All Forum Posts by: Tyler Hampton

@Eamonn McElroy thank you very much! I’m going to assume my taxes will be the arv times 40% times the tax rate. That answers exactly what I wanted to know. Thanks so much!

Hello,

I was looking at numbers for a house in Atlanta and I looked up the tax bill and I don’t understand it! Can anyone with an Atlanta (Fulton County) real estate tax bill help me figure it out?

It shows on Zillow that the assessed value for 2018 was $14,240, which as I understand is 40% of the fair market value. The tax dollar amount shows $1,080 for 2018 taxes on Zillow. I looked up the tax bill on the assessor’s website and it shows two amounts for the tax bill, one to “Atlanta” and one to “County”. The total of the two was $589.54 for 2018 and that shows the correct assessment of $14,240. Is that total amount of those two paid twice yearly, so the tax amount would be $1,179.08, or is that the total tax bill and Zillow is way high?

The next question is as follows. The current assessed value shows $34,560, drastically higher than $14,240 for 2018. Do I use that number for 2019 taxes? Then will it go up if I rehab it? So do I take $34,560 times the tax rates and multiply by 2, or is it just that one single payment, and Zillow was high on the dollar amount estimate?

I apologize for the length of this and if it wasn’t very clear. Thanks for any help!

@Josh Durham I’m assuming this is on the east side of the river, probably Washington or Morton? Or is it west like Brimfield/Kickapoo? I live in Peoria and work in the home building and construction industry. Development in this area would have to be done extremely carefully. New housing permits in this area are almost non existent. You may be sitting on that land for a long time depending on how the economy goes. If you can make some income from the farming side while you wait for things to turn around, then I don’t think it’s necessarily a bad idea, but I just feel like it might be awhile.

It also depends on what you would be developing it into. Single family subdivision or multi family? Or commercial? That would make a big difference Along with location. Just be extremely tedious in all your info gathering. Feel free to PM me if you need any other local building info.

@Logan Reinard I am not a CPA and I’m not an attorney. This is just strictly my own experiences and my own thoughts on the matter. I repeat, I don’t know the answer to your question! Haha, but I currently pay rent to myself, but I also collect a paycheck. I would imagine that as long as your rent paid is about the fair market value, that would be no problem. I could see it being an issue if you’re paying yourself $10,000 a month when normally the building would rent for $2,000 a month or something. But I think as long as you’re renting at a fair market value, that’s totally fine. If that number isn’t enough to make ends meet for you, then you’ll have to keep paying yourself a paycheck. If your business can afford to pay the building expenses, taxes, insurance, and then rent, it’s a good way to pay fewer taxes. Not sure if that helps or not, but those are my two cents.

@Mark Belenky

I was a good tenant in my apartment by all standards except I always paid on the 5th because I didn’t understand that just because I wasn’t “late” didn’t mean I wasn’t late. Maybe I am naive, but I honestly think some tenants don’t understand that the due date is the first and anything after that is late even if they don’t have to pay a late fee. I just didn’t think it was a big deal.

But it also could be someone who might end up being bad. Not sure! Just my personal experience.

@Kristie Hurst I am a newbie here and am currently looking for my first deal, so take this with a grain of salt. If his main concern is not paying interest, that's an invalid concern for not wanting to do a HELOC. If it cash flows, the interest gets paid for by someone else. Now I am a big fan of the idea of paying off houses because it lowers risk, and gives solid cash flow. My personal pathway is going to be to get one with a conventional loan, then use alternative methods over the next 5-10 years to try to accumulate 5-10 properties and then use all the cash flow to pay one house off at a time until they are all paid for. I'm 32 and just starting so I'm hoping to get there by 55. If you're late forties, I'd say any alternative methods you can use to get your first 5 houses would be good as long as they have positive cash flow. Pay those off then use all that to buy more until you get 5 more and pay those off!

I personally enjoy working and have both a Roth IRA and 401k, so this is more of a long term hobby that I'm hoping will give me a lot more flexibility in retirement, but I'm not looking for it to replace an income anytime soon. So it all depends on your personal life plan and what your goals are. Its hard when you and your spouse are on two different pages. Try to come up with a good plan that both are comfortable with and go with it! Good luck!

@Don Roberts is the $5k (probably more as you said) the only income you will have? Do you have any other retirement fund set up? Personally, I don’t think $60k per year is enough income to retire on with no other savings. I’m trying to do the same thing you’ve done and buy houses and pay them off. I love that idea! I totally understand you want to retire and do what you love, but is there any way to get more income buy working even part time or something?

If it was me, I would look hard at the house in Hawaii and make sure it’s worth it because I’m guessing that payment isn’t cheap. Needs to be cash flowing very well. Then I would continue working for another 5 years or so and divert all the $5k monthly cash flow towards another property. If you can live off another income for 5 more years and buy a house every year with your $60k down payment, you could get another 5 houses in those 5 years. Then you would be 56 and if those 5 houses cash flowed even $100-300 per house, you would get an extra $6,000-18,000 per year there. Then you would have an income of $6-8k per month and you’d have 5 more houses. Then you live off the $5k per year you were planning on and use the leftover $12-36k per year to pay off all your houses. Should be able to pay off one within a few years, then that increases your monthly cash flow, then it speeds up after that. Should be able to have 11 paid for houses by 60-63 and that would probably double your income and leave you a lot more comfortable for retirement.

So if you can work another 5 years, I think it would be very beneficial. You’ll also have to have insurance, unless military covers that. So that’s what I would do, but ultimately up to you! Sounds like you’ve done an awesome job and I’d love to be in that position one day! Good luck!

@Clark Kirkpatrick thank you for your input! Yeah, private money is another good option! I’ll have to do more research on private money and seller financing since I’m not very familiar with them. Appreciate the help!

I'm trying to get started in real estate and my only real goal is to get 10 SFH paid for and enjoy a good cash flow for retirement. (I'd buy more after that I'm sure, but I'm not very risky so I like a simple goal) what's the best way to keep that process going once I buy my first property? I don't understand how people BRRRR and do rehabs for like $15k! That's like two things in a house. Kitchen and floors will pretty much eat that up. Again, i'm not super risky, so hard money lending and borrowing a ton isn't my cup of tea, but possibly seller financing (although I don't really understand how that works. You just pay the seller monthly payments instead of the bank?). So how do you get the process sped up just a little with most of my funds going towards the first deal? Or since I'm a little risk averse, I just have to kind of plod through for 20-25 years to reach that? Thanks for any advice!

I was in a contract for a home in the Pittsburgh neighborhood of Atlanta and it fell through after inspection, so I turned my sights towards some different areas and Smyrna GA has some nice homes that look like will rent well. Does anyone have any good or bad experience in Smyrna? I liked the Pittsburgh/west end/capitol view area for the extreme potential of appreciation, but those areas have a little more short term risk. Smyrna seems like a safer investment, but maybe with less upside. Is that a fair assessment, or am I way off? I’d love to hear any insight out there!

Tyler Hampton