All Forum Posts by: Kris Wong

I am not super familiar with Price Hill, but I do know there are definitely class D blocks in that submarket. The Incline District is a catalyst for progress, but that is in East Price Hill. I would tread with caution and be thorough in your due diligence, especially if you intend to manage the property yourself.

7% is a reasonable cap rate in Pleasant Ridge. I would even go a bit below that for a value-add deal. The submarket has been up and coming for several years.

I looked at the deal you're referencing. I'll just say, take a close look at the property taxes, as well as the unit size/price per sq. ft. in terms of rents. I didn't see much value-add there. However, the numbers may work if you're not looking at syndicating.

Brokers always say the property will go fast. That's the #1 marketing line used by every listing agent on every property. Some times it's true and sometimes it isn't.

I agree with everything @Greg Scott has mentioned is his reply. If you are unable to find a local investor to partner with on the deal before your contingencies are up, then I would bail on this deal. You will burn a bridge with the listing agent, but that's better than doing a bad deal. Let this scenario be a learning opportunity for you.

I have not protested taxes on a commercial property in Texas (only residential), so will have to defer to someone who has been through the process.

I would start with Pleasant Ridge. It's a good neighborhood, and quads there go in the $200K - $225K range.

A lot of deal sponsors that I know in this area are using 90% of purchase price as the assessed value in their underwriting. Texas is indeed a non-disclosure state, but if the property was purchased in the past year, they may refuse to negotiate with you unless you show them the closing documents (I've definitely had that happen on a residential property here in Austin). I am afraid you can't just assume you won't get hit with a big property tax increase. You'll be setting yourself up for failure.

@Josh Adams I also believe that multifamily is the way to go, for scale, and made the transition myself in 2018. However, it's not as simple as "the NOI of the building will dictate the value and not market exuberance". Unfortunately, that's only partly true at best. In this market, the asking price will be set based on the listing broker's pro forma NOI, which can be radically different than the actual NOI. When you've got many investors who are hungry for deals, you start to see people paying prices based on pro forma numbers that represent the "rainbows and unicorns" view of how the property could potentially perform. They will bring additional cash down as necessary to make the purchase at the price they have accepted. I say all this just to prepare you for the fact that the same market dynamics exist in multifamily as well.

How will this investment, along with the cash out of pocket you'll be paying every month, help you achieve your goals? Would you consider this an asset, or a liability (hint: there's a right answer to this question).

I used to dispute via informal hearing at the appraiser's office. This is not the same as as disputing via formal hearing in front of a panel. E-file may be convenient but you don't have any chance to argue your case outside of the online filing unless you want a formal hearing. The most effective strategy will be sold comps and any evidence you can provide of deficiencies in your property (pics that show it's outdated, or in disrepair). They don't care how much the value increased year over year. Now I use Protax because I don't have time for that anymore.

Looking at properties in your destination does not constitute a "business trip" in the eyes of the IRS. Otherwise, it would be fairly easy to claim on pretty much any trip. However, if you were to setup meetings with potential team members, in addition to touring properties with a realtor/broker, this could potentially be considered a business trip. Consult your CPA.