OfflineOn page 87 of "Profit from Real Estate Now", Matt Larson talks about how, once the banks stopped lending him 100% on a loan that he switched to a new strategy in which he would pay for the house and then the bank would refinance 100% of the appraised value (at least this was my understanding of this part).
Here's the question I have (yes, I know I need to do more research but, in my opening discovery this question is coming to mind):
- is the tax assessment the same as the appraised value? If not, how close is it to that? (in other words, in my initial findings, how good is this as an indicator of the value?)
Here's what I'm looking at that I will be digging into more tomorrow when the offices are open again (and, yes, I know there is more to find out...but you'll see why I'm asking on this already even before I know occupancy, etc.):
- I found a quadplex that just went into foreclosure and is being offered for $42,900. The tax assessment (2010) is $147,750.
Already, I'm thinking the 42.9 is a great deal likely and I'm just curious on the assement/value.
Another question connected to what I read Matt say in the book on this:
- Is it possible for me to buy this out right and then have the bank refinance the total value? (perhaps $147.7)
- Why would this not be a home-equity loan as opposed to a refinace or is this just a difference of phrases and words to describe the same thing?
I know that's a lot of questions - but I appreciate any specific answers that can be shared.
Again, please know that I know I have much more to find out -- right now, I'm just curious about the assement vs. value and how it ties in to a refinance.
THANKS EVERYONE!
Mike
(let "Operation KICKBUTT" begin!)
"Make it an AWESOME day! (Who else is going to do it for you?)" - Mike Spillman
"As long as there is breath there is hope!" - Mike Spillman
Hi Mike,
I can answer one of your questions..."Is the tax assessment the same as the appraised value? If not, how close is it to that? (in other words, in my initial findings, how good is this as an indicator of the value?)"
I believe it depends on your area. In my county (Lancaster County, PA) how close the FMV is to the assessed value depends on the age of the home. The older the home, the farther apart they are. There is no set "ratio or formula". For example, we added 700 sqft of living space to our house and the assessed value only went up about $1500. An appraiser would give a value of about $17500 for that much of a difference between 2 comps.
You have to look at comps in your area of varying ages and see what the trends are for your area. Sorry I couldn't help more.
Thanks, Nadine
** Realtor/Investor in Lancaster County, PA
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Input is what I'm looking for and I appreciate yours! That's the great thing about this site, isn't it?
Thanks again!
Mike
"Make it an AWESOME day! (Who else is going to do it for you?)" - Mike Spillman
"As long as there is breath there is hope!" - Mike Spillman
that it was built in 1987.
I'm looking forward to finding out more about it...the potential (at this point) is looking good!
Still seeking more input and thoughts/answers.
Thanks in advance!
"Make it an AWESOME day! (Who else is going to do it for you?)" - Mike Spillman
"As long as there is breath there is hope!" - Mike Spillman
Thanks...I just wanted to seek some more thoughts on this.
"Make it an AWESOME day! (Who else is going to do it for you?)" - Mike Spillman
"As long as there is breath there is hope!" - Mike Spillman
i have not found the assessed value in Indiana or Oklahoma to be associated with the appraised value in any way. the assessed value has to do with taxation and the government, but they are not appraisers. appraisers are licensed professionals that are actually letting you know the market value (in their opinion) of a property. for myself, i don't pay much attention to the assessed value as far as price goes. comps off the MLS are the best way to know the FMV of a property; assessed value will tell you about taxes. in fact, if you purchase the property, you might want to challenge that assessed value and see if you can get your taxes lowered. i really doubt the banks will refi the total value for you, but if it's that good a deal, you might be able to get 70-80% refi. you could check into a HELOC as well. i would suggest finding a great mortgage broker if you don't have one all ready. i have one here in Indiana that is awesome. i found her by revising one of Dean's letters, looking up the A+ brokers with the BBB and then faxing them the letter. she was the only one who responded and she is great to work with. hope that helps.
Linda, Army EOD Mom
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I appreciate your input.
)
I'm having a hard time getting in touch with the real estate agent on this property so I can ask some questions.
I'm still curious about how Matt did what is talked about in my original post on this topic.
Thing is - if I got a financial backer/investor on the purchase price and even was able to get 70-80% refi that might end up being a super deal!
Again, I know I have a lot more to find out....just the beginning stuff running through my head (no, you really don't want to peel back my head to see what all goes on in there!
Thanks again!
"Make it an AWESOME day! (Who else is going to do it for you?)" - Mike Spillman
"As long as there is breath there is hope!" - Mike Spillman
I have heard Matt talk about this technique several times. He pays cash and in doing that he is able to get the price way on down. On the appraised value I don't know if Matt hires an appraiser or if the bank sends theirs out. Usually the assessed value is totally different that the appraised value.
As far as the assesed value...I find some are almost right on and then there are others that the assessment is way off. You know the old house I was selling a while back? The tax assessor valued it at $37K...you know what it looked like and it was not worth that much in its condition. In that area when the house is in good condition that is the range in which it should sell for once fixed up. So you see sometimes the tax assessment is way off. The tax assessor does a "drive by " assessment. They are not able to look at the house as a whole and give it a good appraisal.
Before you buy you might get an assessor to assess it and give you an idea of its value before you fork out the cash. Do you know if the bank will loan you 100% of the appraised value? Maybe you should ask them these questions before jumping into a deal and write all the things down that you see wrong with it and take pictures as proof.
Let us know how it goes for you.
Sissy
"THE ARCHITECT OF YOUR DESTINY IS YOURSELF"
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Oh, I would definitely have done a lot of stuff like you said before I would have moved on the deal. That's one thing I kept emphasizig to everyone so they would know I wasn't jumping in blindly. This was just some initial questions I had - especially after re-reading that section that Matt talked about.
Found out this morning that there is already a contract on the property (after finally talking to the agent) and that there were/are apparently some structual issues with the property.
Thanks for your time in sharing your wisdom!
Thanks to everyone for their input!
Here's to your/our succes -
Mike
"Make it an AWESOME day! (Who else is going to do it for you?)" - Mike Spillman
"As long as there is breath there is hope!" - Mike Spillman
Is it possible to get a loan based on an appraisal REO property before you buy the property but have it under contract? Should I ask the same bank if they would give me the funds based on their last appraisal report and now there are renters living in the property (payments going to the bank)
What should I do next now that my offer has been accepted?
I am also thing of going thru an HDML to help in the purchase of the home based on the banks last appraisal. PM me or just answer the question, the clock is ticking for this deal.