How do property taxes work in a small quick wholesale deal

3 Replies

I am looking for more understanding on how Property Taxes work when you buy, and when you sell. I recently bought a property for 3150.00 at auction, put about 2.5k in it, and sold it for 10k, and in the end lost about 300.00. I sold it FSBO, agreed to 1.5k realtor commission (mistake) for the buyer agent etc etc. - I decided I didn't want to mess with it because Im starting another project with higher potential return.

Now, as an example, I look at this one:

Its on the Auction block, if I picked it up for 2 or 3k, and sold it for 10k to someone else who wants to work with it, essentially a wholesale deal, and didn't spend any money fixing it up, and agreed to max 1k realtor fees if any, I might make some money on it.

If you go to our county tax assessor site, and search '63 Granvue', youll see that 1) the total taxes for 2018 are $2981.38, and 2) they are paid by the bank already for 2018

What I am asking is - if I bought this at auction, and sold it within a couple of months as a property someone else can rehab, how would the property taxes work / what would I end up paying?  I avoid these small wholesale deals (especially after the one I mentioned above) because the taxes could make it not worth the while.

Apologies if this is a newbie question, Im used to making more profit and expecting up to 1 year of property taxes max, getting a discount at the beginning, then playing catchup at the end, ultimately paying p. taxes for the time I hold and carry the property.

You will pay a prorated amount of taxes based on the time you own the property. For example, if taxes are $3,000 per year and you own the property for 4 months, you will pay $1,000 in property taxes.

Originally posted by @Robert Campbell :

Thanks J Scott, perhaps I was overthinking it.


Btw, it's the title company's (or closing attorney's) job to handle this.  If the seller has already paid the taxes for the year, the buyer will reimburse them the pro-rated amount.   If the taxes haven't been paid for the year, the bill will be paid at the closing table (generally), with each party contributing their pro-rated amount.