Just bought a 4 unit in Cicero. Gorgeous building, all 1 bedrooms, 2500sf. Last sold for $395,000 at the absolute peak. This amount is ridiculous, but, thats what it sold for in 2005-2006. Bought for $135,000...needs very little work. There are 4 IDENTICAL building on each kitty corner. They have garages, mine doesn't. The others were assessed at $200,000. This year, they went up to $300,000!!! Mine, which is identical, was assessed at $400,000!!! EEEEKKK. Taxes were $6000. Then $8000. Now, $15,000!?!?! The building generates $23,000 gross, $17,000 net. You can't pay $15,000 in taxes, when you only generate $17,000 (full rented). Gee...what about a mortgage payment? I plan to contest, but am not sure what the best way to do it is. Yourself? Hire a lawyer? At the very least, the taxes should be the same as the other 3 buildings... But frankly, they should be less. I suspect the appraisal will come in, in the low 200's. Anyone successfully protest their taxes? Specifically in Illinois? Whats the best way to do it? I will post this under the Business section too, as it poses a larger question. How the hell is commercial/apt buildings supposed to survive? If they jack taxes up to match peak sales prices from 3 years ago, no one can pay. Prior (dumb) owners bought based on appreciation, even though the numbers didn't work... Whats the BEST way to fight this? Anyone have a copy of how they succesfully approached this? A form letter? What? Any help appreciated.
If you just bought at $135K, then the market value is $135K, not some arm chair assesment of $400K. You can take your paper work by yourself and get an adjustment. If the city doesn't adjust downward at the appropriate ratio, get a lawyer and work that way. If there are other multi units in the area that recently sold, get the sales price for comparison. Cities try and inflate the assessments because they know they are going into a year of lower revenue, but city service costs have not decreased, so all cities are going to feel the pinch this year.
You would think thats how it should work... but it doesn't. They disregard any sales price that was a shortsale or foreclosure. And NOTHING else is selling...
It sure isn't $400K either. My building was a 7 unit building (Cook County) and generated $5500 per month. Taxes were about $8500. That was a few years ago, but my venture back to looking at multi units shows the same cash flow today. With the current economy direction, shrinking, I cannot see increasing the value on these units being anything but an attempt to rob the owner.
Bo, Absolutely hire an attorney who specializes in property tax appeals. It's almost an impossible thing to do on your own.....I've tried it and finally gave up! Then, I hired an attorney a couple of time and got results, which I couldn't do. Many will only charge a fee if they get you a reduction. In my case, the fees were 50% of the reductions they got me for the 1st year.
Who did you use? My question is whether its worth pursuing on my own first, then, if I fail, get a lawyer. The taxes SHOULD BE half of what they are... I don't want to miss any time windows, and miss out on a reduction...
As an aside, do you guys think there might be a technical problem here??? Does 15k in taxes on a 400k building even sound right? That would mean that a 1.2mm house would pay 45k in taxes?!?! That just isn't right. I know folks in cook with 1mm+ homes, and they definitely don't pay 45k in taxes?! That just doesn't sound realistic...right???
In cook county you actually have 2 means by which to appeal. The timing of each is determined by what township you are in. The first way to contest is with the Assessor's Office. I have had less success here. The second way is with the Cook County Board of Review. I have had great success with the BOR, and I have always done it myself. They key to a good BOR hear is to be prepared, and make sure the comps that you provide have the same classification (per the assessor description), then highlight differences (i.e. lack of garage). The value assessment is assigned to the land and to the building. Typically, land is a fuction of square footage and they generally don't increase/decrease based on busy street vs. quiet street. The building features to focus on are size, # of bathrooms, ac vs. no ac (all of which can be factually supported through assessor web page). If you want a law firm, try Madigan and Getzendenner, not sure if they take signle properties. However, they do a huge % of all downtown buildings. I guess it helps when one of the 2 name partners is also the speaker of IL house.
