I am flipping my first property and wondering how do I obtain, contact, and calculate my carrying cost before I present my numbers to the lender. Do I call the different companies first? If so, how do I find that information? Or Is there a good cost amount I can write in, present it to the lender, and pay for carrying cost after?
You call the people that provide/collect those fees.
Are you local to the property?
If you are you should already know what utilities you pay and who to call for that.
If not there are generally 5 basic utilities, electric, gas, water, sewer, trash. Sometimes they're combined into one utility company.
For taxes in Atlanta you can search for a property's previous tax bills here: https://www.fultoncountytaxes.org/property-taxes/search-for-tax-bill.aspx
Of course this is based on current assessment. When you purchase it it will get reassessed and likely increase.
For insurance, I personally use NREIG but call around different companies that offer builder's risk.
@Terry Bernard Lanier don’t forget property maintenance if you have a yard to keep up etc.
factor in snow removal in winter.
It's hard to understand the tax bill. It this a fee I have to pay one time or is there a monthly payment. I'm lost on going about finding and paying the taxes.
Tax bills are annual, and you only pay for how long you hold it for. So if the property taxes are $5,000 but you only hold it for 6 months, then your property tax holding cost would be $2,500.
@Terry Bernard Lanier
You should familiarize yourself with the carrying costs & other costs associated with holding real estate.
At the very least, you should be able to have a rough idea of what the costs are.
The thing that I am concerned about is if you go into the deal, get the financing and a couple months down the road, you are underwater on the deal because you underestimated the carrying costs.
Carrying costs can definitely add up, especially if the project takes longer to rehab or the property takes longer to sell.
Good luck on your real estate adventures.
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