All Forum Posts by: Charles Clark

Millennial here, just to say having the student loans forgiven angers me greatly. As someone who worked very hard in high school to go to a good university with good aid, and then worked hard during that time to get a STEM degree with a reasonable GPA, and worked through college to avoid taking on any debt this is a slap in the face. The message this sends to me is I should not have bothered to work in college, I should have just accumulated debt and let the taxpayers pick up the tab down the road.
Instead, as someone who graduated and got a job (because I studied in a field that was actually relevant and in demand) and pays income taxes, I get to watch my tax dollars go to people who partied through college, got a worthless degree, and are complaining that they owe the government money. All this does is reward sloth and stupidity.
If the government is going to hand out opportunity it should be to people who have demonstrated they can use it well, instead of squandering it on people who have shown the opposite.

The more I look at this the more I come to the same set of conclusions.

This real estate investor trend/boom/etc. really took off after 2008 when prices were artificially low. The last 2 years had absurd appreciation (not entirely real due to inflation) which make many deals work.

However I doubt the next decade will be nearly as attractive from an investment standpoint. My guess is the appreciation from the last 2 years is so high that the next 5 will be poor. Combined with high interest rates and Wall Street entering the business I think the arbitrage opportunity for buying rental properties available to the average person and renting them at any kind of return is over for most people.

You see this with investors talking about "investing" in things like short term rentals, furnished rentals, refurbish properties, etc. but the reality is all of those have a significant work component added to make them profitable. 

Probably the current state of the market. Nothing I look at has any hope of being a cash flow positive rental under even the best assumptions, and even appreciation is unlikely to correct that in the next 3-5 years. So while I am saving and watching the market carefully to know what a deal looks like I feel its unlikely I will be able to make one. 

Obviously before opening the wallet you need to do due diligence and verify everything.
But the upside of Zillow is I can check my buy box daily and aggregate significant amounts of data. Even if it is not 100% correct, the law of large numbers and some careful stat work should still give an excellent feel for what the market looks like. That is the way to use Zillow.

Quote from @David M.:

@Charles Clark

I think we said it... Apply the county rate to the assessed rate.  Look up how ad valorem tax systems work.  Look up specifically how Texas and their specific counties apply it.

I understand how these systems work that is not the problem.
I had spent considerable time swimming through the county website trying to decipher an answer, I thought it might be faster/easier to just ask people who have done it before.

Quote from @Sam Yin:

@Charles Clark

Why not just look up the rate on Google? Do the math with you purchase price. That simple. No need to call or bother people. I do it all the time... even for potential Texas deals.

Leverage technology.

I am more than capable of leveraging technology, but sometimes (often frequently) Google is wrong. I know what the county rate is, that is not hard to find, but it is not what I am asking for. The issue is knowing what value to apply said rate to. Seeing what someone else paid in tax on a property is not a solution either unless I know for certain which exemptions were or were not applied.

Quote from @Joel Case:

Call the tax office and give them the address. As simple as that.

 I think they would quickly tire of me calling daily for several different quotes.

Hi all, I've been running numbers on different properties trying to evaluate cash flow. One issue I am having is the cost of taxes, I'm not sure what is the best way to estimate it.

Zillow has a simple estimate of % rate x asking price to estimate taxes. However this value is far higher than the tax paid in the tax history section, which is based on a lower property value.

I'm thinking this second value might reflect a homestead exemption or the like, which I don't want to include in the cash flow estimates as a rental. However I am not sure how assessment works. If you buy a property does the sale price become the new assessed value? Or is it based on something else? (Bought a vehicle last year, the price I paid was more than the assessed value for sales tax purposes, that is part of what is driving my confusion here, not sure if the same situation applies to real estate).

Obviously I don't need an exact answer, but its difficult to evaluate cash-flow opportunity with such a wide discrepancy in figures. 

Quote from @Bruce Woodruff:

First of all, I wouldn't take this on unless you are  very experienced.....

I have done something similar.....ie taking on a 15 unit Apt redo in a C minus neighbor hood. It started off ok, because my crew of 10 burly carpenters were there all day every day, and that kept a lot of the riff-raff away once we established dominance. But there were still the nights. I eventually hired one of the nearby Apt managers (who was an ex-cop) to watch the place overnight. He was great, and actually loved getting back in the game in that way.....

But this is not for the faint-of-heart, so beware before you jump into this. It will be a 24/7 job for you personally. And may present you with some degree of physical danger and you may need to be armed.....can you handle this lifestyle for a few bucks? There are plenty of other properties out there.....

Physically being there is probabally the only real fix for this. I knew a guy that was building his own house and had theft issues, he bought an old trailer and started sleeping out there (with a shotgun I'm sure) and that solved the issue. If you are not up for that it might be a tough job.

I am going to guess your average appraiser does not understand the value of slate, so they may prefer shingles, but a roof expert that can assess the state of the slate might give a better idea of where it is lifecycle wise. Good slate has been known to go well past 100 years.