Flipping Houses Education: Assessing Property Value

The Property Value Assessment is critical for determining the fair market value of your fixtoflip property. Making a few phone calls means the difference between making a smart flipping house investment versus a poor one. The assessment helps you determine two key points.

• First, it allows you to determine the value of any other neighboring properties. Obviously, you want to get several comparable properties that were sold within the same year.
• Second, the assessment is key in determining the taxes. The annual taxes must be added into you final numbers to determine if the property will have a positive or negative cash flow. Typically, you can get most of these answers from your local court house or from a real estate agent.. For example, in the area I work in, I could contact the county court house and chat with the Assessment Office.

Here are a sample of a questions and example of the answers you should receive from an Assessment Office.

• What was the properties original sale price? Answer: This property was last sold in September of 95 for $44,495.
• What are other properties selling for in this building or neighborhood? Answer: The best comparable property was a single unit in building D, which was sold in 2001 for $50,000.
• What is the property parcel number? Answer: The parcel number is 11042334000
• What is the mileage rate? Answer: The mileage rate is .027163 for West Chester (This includes County, Township, and School taxes.)
• What is the property assessed at? Answer: The property is assessed at $39,620.
• What are the annual taxes for this property? Answer: The taxes are the mileage rate times the assessed property value. (.027163 x $39,620 = $1076/year).

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