Found a 28% below-assessed property in Dallas — am I reading this right?

Question

Running my weekly analysis of Dallas leads, and this one jumped out:

3516 Rio Grande Cir, Dallas, TX 75233-

Asking: $279,900- Tax assessed: $390,460 (28% below assessed)

- Suggested offer: $220,000

- ARV estimate: $390,000

- Strategy: Wholesale

The spread between asking and ARV looks solid for a wholesale assignment. Listing is FSBO, which usually means more room to negotiate.

Red flags I'm watching: no interior condition details, no rehab scope estimate, and I'd want to verify that the tax assessment is current.

Any Dallas investors active in 75233? What are you seeing on comps in that area?

Diego Alvarado · Answer

Hi @Jackie Carmichael,

The ARV for that property is $300,000, I would never focus my ARV calculation based on the Assess Value.

This was a foreclosure and bought by an flipper that owns the property has a loan on it.

There are much more information but this does not seem a wholesale deal that someone will look forward to get.

Bruce Lynn · Answer

I almost never look at assessed value.  It can be way high or way low or right on the money.  All kinds of reasons for this.  It is just not a very good indicator of value.  Same with most of the online valuation models.  Remember that chances are the assessor has never seen the property, certainly likely they've never been inside it.  Values are done by MASS appraisal and they don't share their models, so in my opinion never a good indicator of value.

V.G Jason · Answer

Assess value?

I got property taxes back for all my Texas properties-- all of them are 10-25% higher than my Jan 1 appraisals I did. I don't trust assessed value, go check the actual market value.

Jackie Carmichael · Answer

That's a really good point — and tracks with what I'm  hearing from other Texas investors. Assessed value and                                                                            actual market value are two different things, especially                                                                                                                                   in Texas, where appraisal districts tend to run high.                                                                                                                                                                                                                                                                                                                                  I've already updated how I evaluate deals — pulling                                                                                                                                        Census data and comparable indicators instead of leaning                                                                                                                                   on assessed value. Still refining the process, so feedback like this from people with boots on the ground is exactly what I need.                                                                                                                                                                                                                                                                                                                                                               Out of curiosity — what are you using for comps when        you're underwriting? MLS, Redfin sold data, or something else?

Found a 28% below-assessed property in Dallas — am I reading this right?

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