Archive for the ‘multifamily’ Category

property tax protests in austin tx travis county

August 22, 2011

Every year I protest my property tax valuations and almost every year it is time well spent. It allows me to learn something new about how my property is valued and what other property is valued at surrounding my property and is a general adventure in dealing with people.

So this year I started out with the commercial stuff. I sat down with the same guy that I talked to last year. He remembered that I had my son with me last year but this year I happened to have to go on his birthday so he did not come along (“his loss :)” just kidding son ). I asked for my property to be reduced about 15% from where the county had them appraised at. After showing him my p&l for the year he agreed to get me to a value about 7.5% lower then where the county was at. I decided that it was a good enough return and took his offer and our conversation was almost over. He began to work up the settlement and I began to pick his brain. Well it turns out that the county has produced some very important information which is used to determine property values.

One of those reports is a CAP RATE report for apartment transactions for the prior year. This report contains cap rates for sales that took place for the prior year catorgorized by the age of the complex. It can be used to determine value for your particular property and for those around you. Here is why I was surprised by the report: I was surprised because of how low the cap rates were! Or by how high the values were. For example there was a transaction on a building built in 1973 and it had a 7% cap rate. if you had a 20 unit building that was generating a 100K Net Operating Income you could in theory sell it for a prices of 100K/7%= $1,428,571.


Working backward:
If a unit was renting for about 675 per month with a 5% vacancy and the expenses averaged about 35% of revenue after the vacancy you generate a 100K net operating income.
For those of you who don’t know 7% is LOW. My first student loan interest rate was at 8%. I remember when FHA loans were are 8%. So for an older building to sell at a 7% Capitalization Rate is a really low number and a high value.
Say for example that 7% is a fluke and If you used a 8.5 rate the value would be 1,176,470 ! Which is still out of this world! I did not think that our market was that hot! Boy was I surprised!

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My first eviction saga…….

May 9, 2011

(Normally evictions are a pain but not a SAGA) It all started when a tenant did not pay and performed what I call a Midnight move out. That is when they move at midnight so no one would see what was happening. Well this tenant did not take everything. So I called her and said hey do you want this stuff?

Yes I will get it in a couple of days.

NO you can come get it from the front porch b/c I am setting it out as we speak.

Well you can’t do that, I say read your lease you already abandoned the unit and you already gave me permission to set out your stuff if you abandoned the unit.

((Tenants never read the lease but always know how things are supposed to happen))

So I instruct my staff to set out the stuff and remind them of the general rule of not disturbing the peace if she shows up just be nice and calm and I leave. Well she comes right over with the police!

Of course my staff calls me and says what do we do? I say well don’t argue with her just leave the stuff and tell the police who you are and what not. So they leave and the tenant wants them to put the stuff back inside to which they don’t have to call me for the answer to whether or not they will do that.

NO! They wont put it back inside!!

The next day when I come back I tell them to do it again and of course the police come back again with the tenant. I think her friends who were the neighbors were calling her to let her know if someone was in the unit. I love the neighbors to be friendly I just don’t want them to team up against me!

So the officer comes and tells me that I cant just put her stuff out even though she has moved most of it and just left some junk. He says I have to evict her and I let him know that I will do just that since she is intent upon having her way.

((She does not realize that an eviction will result in a judgment, which is worse then just a collection account from a landlord for her credit))

So I go to court fully expecting to see her. It turns out that she was trying to cancel her lease but instead of reading it she relied upon the info that she got from the Austin Tenants Council concerning canceling the lease.

((I guess this is one of those you get what you pay for situations))

So she missed the court date but I will come back to that in a little while. But she files an appeal and a pauper’s affidavit to go along with it.

Now she has a little problem with this pauper’s affidavit, the jest of it is that she is no pauper!

She bought a new car ((I supposed with the rent and tax return money)) Additionally she has a job!

In the Great State of Texas if you want to appeal an eviction you have to post a bond in the amount of the judgment. That is unless you are a pauper. What is a pauper? I general terms a poor person who cannot pay. Well why would a pauper want to appeal an eviction? If they could not pay in the first place what makes them think that they could pay later?

Since this was a first for me I had to take out my trusty RED BOOK from the Austin apartment association and see what needed to be done about this! The red book said file a challenge to the pauper’s affidavit immediately!

So that is exactly what I did!

When we get to the court for the hearing she is not there, but at the last minute she shows up! Man I am disappointed I thought I would not have to fight and go thru all of this stuff.

Well when she finally comes in after pausing at the door unsure of whether or not to come in we get started in the roughest, meanest, longest paupers affidavit challenge of the century!

Here is how it went down. The Judge swears us in and then says I am going to ask you a few questions about the appeal and paupers affidavit.

Judge: Did you know that you would have to pay the rent in order to file an appeal?

Tenant: No, but …..

Judge: Did you pay the rent?

Tenant: No, but…..

Judge: I was out when this went to court for the eviction and my substitute was here but why didn’t you come to court on that day if there was a problem?

Tenant: Well I was here but your staff sent me to the wrong courtroom. ((A little background here is good. This is the main court house for the county it has 4 floors and at least 25 court rooms and several floors next door with several court rooms per floor as well.))

Judge: Who sent you to the wrong courtroom?

Tenant: Your clerk… Judge: Bailiff go get all my staff in here this minute I want to know who sent you to the wrong court room!

Tenant: I don’t want to get anyone in trouble…..

Judge: Nonsense I want to know who sent you to the wrong courtroom! Staff comes in and one of the clerks recognizes the tenant.

Clerk: Your honor she looks familiar but you know I see lots of people and this was 2 weeks ago, but did you have a criminal case as well on the same day?

Tenant: Yes I had another case as well and I went to that courtroom and by the time I made it back here this was finished.

Judge: What is the docket number for the other case?

Tenant: I don’t know but have the paper work in the car my boyfriend can go and get it.

Judge: Good go and get it but lets work this thing now. You filed this papers affidavit is all of this info correct?

Tenant: Yes….

Judge: How were you paying the car note and rent before this time b/c I don’t see any income on here?

Tenant: Well I have a job but its only part time? And the car note gets paid..

Judge: The car note just gets paid…. Please take a second and fill this out completely.

Tenant: Ok here you go.

Judge: You don’t make enough money to pay the rent and all of the other expenses that you listed and you already said that you understand that to win an appeal you have to pay the rent but you have not done so. So why do you want to appeal?

 Tenant: Well there were some things that did not get fixed in my unit and I sent the landlord notice.

Judge: Ok well I see….

(( Now here is where I am thinking that I will get a chance to SLAM her)) In the meantime I have been just sitting there looking out the window trying not to the speak when I was not spoken to. My mother raised me right (don’t speak when you are not spoken too) I am ready to ask her when she bought the car I already know that it was after her midnight move out so she cant claim that she is a pauper, b/c paupers don’t go buy new cars? Since it was around tax return time I was also going to ask her about that as well, and her boyfriends income since they were living together. Additionally, about her income since she always had the rent until now and where she was staying since she was not paying rent to me she must be paying someone. Etc etc etc

I was ready for war! So I look at the judge for my queue, but he says……

Judge: I don’t think you are credible and I am denying your paupers affidavit! Mr. Seay you are free to go unless you want to stay to see this other stuff

Ron says: No thank you your honor Can I get a copy of your decision today or will it come in the mail.

The moral of the story is dont use your rent to buy a new car!

Texas apartment data

January 31, 2011

Occupancy 93.3%!!!

November was 93.1%

I am full in austin meaning 100% occupancy.   Now I need to get full and paying but being full is a good start.  Check out the write up from ALNsystems.com about the Austin, San Antonio, Dallas, Houston, and Fort Worth markets.   I attached them as a PDF to this post.aln apartment data 1-11-11

1 in 12 live in TEXAS!

January 28, 2011

One of 12 Americans lives in Texas (and other 2010 census findings)

By San Antonio Express-News

Read more: http://www.beaumontenterprise.com/default/article/One-of-12-Americans-lives-in-Texas-and-other-965303.php#ixzz1CGh7udiH

I really like the part about the cheap air conditioning!   Especially in summer!   I dont like the part about the budget deficit that Texas faces.
Overall, the article provides some evidence that supports my reasoning for real estate investment in Texas.   Do you have a real estate quesiton?   Need a real estate consultant?   Need real estate expert testimony?   Are you ready to make some investments in Texas real estate?   Call me 512-782-8982 or send me an email.

FIRE!!!

January 9, 2011

over the holidays I had to deal with a fire in one of the apartments that I own.   I am relieved that the resident was not killed and thankful that the damage was not to the entire building!   Fires can wreck a real estate investment luckily this one is insured so the damage will not be as large as it could have been, but nevertheless it is a big distraction when you want to start the new year on a positive note.  Check out some of the pictures of the fire

after the fire

inside the unit


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