Looking for feedback on possible first deal

Real Estate Deal Analysis & Advice
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Looking for feedback on possible first deal

Heather Ippolito
Investor · Port Jefferson, NY · Member since 2015 · 53 posts · 4 votes

I have two SF houses I'm looking at

1st

100k ask price

1000 rental income expected

633/month in taxes

closing cost approx 3.5k

possibly 1k in repairs needed

can pay cash for house if we want to

2nd

85k asking price

950 rental income expected

810/month in taxes

closing costs approx 2.5k

possibly 1k in repairs needed

can pay cash for house if we want

I'm new to all this but these see like good deals to me. I'd love some feedback from more experienced investors if possible!

Thanks, Heather

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  • Matthew Cole
    Investor · Allen Park, MI · Member since 2014 · 98 posts · 36 votes
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    Where are these properties? Taxes seem outrageous. Neither deal looks too good.
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  • Heather Ippolito
    OP
    Investor · Port Jefferson, NY · Member since 2015 · 53 posts · 4 votes
    11y

    It is Southern Pines, NC. Yeah taxes are kind of high. They don't look too good b/c of the taxes?

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  • Account Closed
    Miami, FL · Member since 2015 · 161 posts · 26 votes
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    Heather Ippolito I agree with Mathew neither deal looks very lucrative and taxes through the roof.
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  • Heather Ippolito
    OP
    Investor · Port Jefferson, NY · Member since 2015 · 53 posts · 4 votes
    11y

    Thanks @Matthew Cole and @Account Closed

    I found a house of similar price in the area with taxes at 220/month. Much better. Surprising how different taxes can be for different houses. I still don't understand how that works. Why would the taxes be so different in houses so close by?

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  • Thelonious Jones
    Atlanta, GA · Member since 2015 · 157 posts · 83 votes
    11y

    Hello,

    Are you 100% that tax information is correct?

    I just find it to be a tad bit high for NC.

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  • Heather Ippolito
    OP
    Investor · Port Jefferson, NY · Member since 2015 · 53 posts · 4 votes
    11y

    @Thelonious Jones It is what is listed on the MLS. I am planning to ask the agent about it when I see the places.

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  • Thelonious Jones
    Atlanta, GA · Member since 2015 · 157 posts · 83 votes
    11y

    Yes ma'am, I agree, try to get as much info as possible. You may be also able to research with the County Tax Assessors online.

    In my opinion if it is $633 & $810 a year is sounds like as decent return, however if it is $633 & $810 a month wouldn't entertain it.

    Hope this helps.

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    11y

    @Heather Ippolito if your taking the data from the MLS listing they are listing the annual tax's not monthly .. what you do need to figure out tho is if the tax's are low because of owner occ status and will they rise when they are turned into rentals.

    In many states owner occ's get about a 50% discount compared to investors.. they get it through their homeowner exemption...

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  • Joseph DrutherPro Member
    Investor · Southern Pines, NC · Member since 2014 · 340 posts · 171 votes
    11y

    I think that's per year price. Wen we moved be down from New Jersey that was the last thing that sealed the deal. Everything looked amazing until she got to the taxes. We said " oh, that's about what we pay every month.". She said "EVERY MONTH???!!!!?, that's for the year!". I still think 220 a month is reeeaally high for around here. At least for an 85k house.  About to sit down for dinner but will be talking with you. I would love to help you out. 

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  • Heather Ippolito
    OP
    Investor · Port Jefferson, NY · Member since 2015 · 53 posts · 4 votes
    11y

    Oh damn thank you!!!!!! Uh yeah I'm clearly still new at this!

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  • Heather Ippolito
    OP
    Investor · Port Jefferson, NY · Member since 2015 · 53 posts · 4 votes
    11y

    Thank you @Joseph Druther!

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  • Heather Ippolito
    OP
    Investor · Port Jefferson, NY · Member since 2015 · 53 posts · 4 votes
    11y

    So these look like way better deals with the taxes being lower!

    1Reply
  • Nathan Patterson
    New to Real Estate · Castle Rock, CO · Member since 2014 · 172 posts · 66 votes
    11y

    I'm not an experienced investor but I'd like to ask how are the big items looking?  Is the room good for 10 years, or will it need to be replaced soon.  Hows the HVAC and other big ticket items for the next 5-10 years.   

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  • Mehran M.
    Investor · Poway, CA · Member since 2015 · 1 post · 0 votes
    11y

    You can easily find out how much in taxes are paid every year at Zillow web site. Just ype in the address and click on it. Then go down to taxes section, and you will know how much the taxes are for any property in the USA.  Go to Zillow.com

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  • Will Stewart
    Investor · MA · Member since 2014 · 164 posts · 114 votes
    11y

    assuming they're both in decent locations and in good condition, i'd make a low offer on both (maybe 85k and 70k or something) and see if one accepts. if you can pay cash for one, i'd leverage and try to buy 3-4 with that same money, depending on your risk tolerance of course.

    good luck!

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  • Heather Ippolito
    OP
    Investor · Port Jefferson, NY · Member since 2015 · 53 posts · 4 votes
    11y

    Thanks @Will Stewart. Unfortunately I looked today and the areas are not great. I'm looking at houses in the 125- 140k price range now in better areas.

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  • Vincent Crane
    Realtor · Atlanta, GA · Member since 2015 · 693 posts · 357 votes
    11y

    Hahaha when I saw those taxes my jaw dropped, yeah that's annual, not monthly... You need some practice in analyzing deals. Read some of the articles on here and either create a spreadsheet you use for income - ALL expenses, including vacancy, capex, monthly repairs, etc.... or get BP Pro and use the BP rental calculator. Also learn the terms of NOI, cash on cash return, etc.. and figure out what those numbers are too on these deals, that'll allow us to help you a lot more.

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