Monday Mixed Bag – Flooding, Appraisal Protests, and Prospecting Letters

10 Aug

I hope everybody is staying cool out there! We’ve been keeping plenty busy this summer – I recently got back from a trip to South Padre Island to pre-celebrate my sister’s wedding.

South Padre Island Beach

For the most part our rentals have been blissfully business-as-usual, but I do have a few notable highlights worth sharing:

Memorial Day Weekend Floods
You may have already seen this on the news: Central Texas experienced some extraordinary rain and flooding over Memorial Day weekend. On one hand we could use the rain, but things got a little cray cray there for a bit.

My cousin in central Austin!

My cousin in central Austin

Luckily our properties were not affected, but it did give me reason for pause at the time. We have homeowners policies but nothing that covers flooding – should we have a flood policy? Then again, this was a pretty darn good stress test and the properties passed with flying colors, so we ultimately decided to keep our current coverage.

On a related note, many moons ago an insurance agent shared this nifty website that estimates flood risk using a map interface. I don’t know how legit it is, but it might be worth a peak when considering a new property.

2015 Appraisal Protest Results
After last year’s unbridled success, Corey tried his hand at protesting our tax appraisals again. The proposed year-over-year increases were… steep.

Property 2014
2015 Proposed
% Change

Duplex #1 $179,362 $239,473 34%
Duplex #2 $149,488 $164,749 10%
Duplex #3 $151,313 $191,984 27%

Good-ness. But compared to our latest comps (and the appraisal district’s) the proposed values were reasonable – we simply didn’t have a lot of contrary data points to work with this year.

Corey still managed to knock a few thousand off the appraised value and saved $157 in taxes. Once that is applied to our mortgage pre-payment goal we’ll save another $255 in unpaid interest for a total savings of $412.

Reducing Competition in a Seller’s Market
As you’ve probably deduced, our real estate market is really hot right now. You might recall we were competing against multiple cash offers when we purchased duplex #3 last year.

We were recently the recipients of some crafty prospecting letters that were attempting to find duplex sellers BEFORE the competition can get involved:

Dear [Name], My wife and I live in the [city] area and we are interested in purchasing a duplex on [street]. If you ever consider selling your duplex, please let me know.

Would have been a little more convincing if there wasn’t a 2nd letter in our mailbox asking about a different duplex and claiming they live in a different part of town. 🙂  4 months later we received another letter (just one this time) from the same couple, with a refined message:

Dear [Name], My wife and I are interested in purchasing a duplex in [city] and came across your property on [street]. We are pre-approved with a local Austin lender and can close within 30 days of contract. Minor repairs and issues do not represent a problem for us. Please contact us if you have thoughts about selling.

Little white lies aside, I do wonder if there’s any merit to this tactic. It would be easy to recreate if you had a few neighborhoods in mind, and then cross-referenced those addresses against the county appraisal district’s website to get owner addresses.

Looking Forward
We’re gearing up for 2 vacancies in September and October. For the first time ever we’re going to let our property management company handle the majority of the make ready work, but I’ll still take a day off to inspect things for myself and tidy up loose ends. I find vacancies a LOT of work, so I’m looking forward to seeing how this higher cost/less hassle trade-off treats us.

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