Am I getting the property taxes right on this one?

Question

Check out this deal. It is in Ossining, NY. Despite the high property taxes (almost 40k annually on a 400k deal), it still cash flows. Lots of assumptions in this -what do you all think though?

https://www.biggerpockets.com/...

John Bucci · Answer

Yeah taxes are listed as 18k on this one. Rents sounds a bit high. Don't think this it would qualify for financing, need a 203k loan but a cash buyer will prob take this one.

Also, listed as accepted offer BTW, it was a fairly popular property when it hit the market. Still good practice, and may be a good sign you're identifying deals that others thought were good too.

Nicholas Mann · Answer

@Ryan Ross

Hey Ryan,

Before all this corona stuff happened I was looking at buying in Ossining. I visited multiple properties over there and analyzed a lot of deals. My approximate estimate for taxes on a 4 unit in ossining should be around 16k a year but probably more. The tax rate in Ossining is high and typically you would be paying more than surrounding areas.  Trying to factor in 1500 a month for tax expense.

Joe Aiola · Answer

@Ryan Ross well that's my point haha - it's going to be tough to get good at doing the math and analyzing properties correctly with the wrong numbers. Practicing with the right numbers will not only save you time, but will also give you more confidence about the deal. No need to guess - an agent can easily give you these numbers, or at least a good estimate.

Last taxes shown for that property were in 2018, and the taxes were roughly $18,000. Taxes rarely go down, especially here in NY, so you can assume it's even a bit higher. You can call the tax assessor and he will be able to give you a more concrete answer. Here's the tax assessors information:

https://www.townofossining.com/cms/assessor

Ryan Ross · Answer

Hi @@Joe Aiola ! Not working with an agent for this specific property - I am trying to get better at doing the math & analyzing the properties correctly. Basing my renovation number on an uneducated estimate of what might need to be done.

The property taxes in Ossining were a bit hard to find, so I did a westchester average estimate. Am I in the ballpark?

And, thanks for this heads up.

Thanks,

Ryan

Joe Aiola · Answer

@Ryan Ross are you working with an agent? If you are, they should be able to help you with these numbers. And what are you basing your renovation numbers on? Has somebody seen the property for you?

Also, I'm not sure if you're aware, but there is an accepted offer on this property as of 04/23

Ryan Ross · Answer

Thanks guys. I've adjusted the analysis here:

https://www.biggerpockets.com/...

- Rent has been adjusted to $6700 per month- Property taxes have been adjusted to $847/month (Westchester, NY average)- Updated the utilities to expect the owner to have to pay utilities for all 4 units in the property.- Changed downpayment to 20%, versus the 3.5% that I originally projected for. - Increased the amount of work needed to be done to $50k.

Still looks like a good idea to me - what do you think?

Ryan

Jaysen Medhurst · Answer

@Ryan Ross, first and foremost, there's no way this is bringing in $20k/month. Rerun your numbers and save as a report so it's easier for us to review.

Kyle J. · Answer

I don't even see property taxes listed on there, but $40k/annually in property taxes on a $400k property would be way off.  Obviously all the other numbers that are listed are way off too:

No property that you're going to buy for $367k is going to throw off $20k in gross rent per month.  It's just not happening.

Nicholas L. · Answer

@Ryan Ross this looks like a 4-unit, so the gross total monthly rents would not be $20k, they'd be way lower.  And I think the taxes are off too.  The property listing also states that it's a "handyman special," so it may need significant repairs...