Case Studies

Apartment Case Study 1

CTN saved Newco Management Company $82,092 in Taxes for Willowick Apartment Complex in Just 2 Years

CLIENT PROFILE

Newco Management Company has been a client of ours since 1996. We contacted them as a result of market research done in the area surrounding their property indicating that their property was over assessed. They allowed us to correct an excessive valuation on this property, Willowick Apartment Complex. As a result of our success, Newco entered the rest of their entire portfolio of properties into our contract, including properties in California, Florida, Georgia, Virginia, Texas, Colorado, North Carolina, and South Carolina.

PROBLEM

This apartment complex is located near an exclusive residential area of Houston. Prior to our representation of the project, the value had always been overstated. It was split into two smaller accounts for only one project and its classification was incorrect. In addition, the average unit size is considerably larger than any other similar properties which resulted in the appraisal district overstating the effective rental rates and expenses.

SOLUTION

First we combined the two separate accounts into one account with a total value of $8,093,600. We protested the value using the actual income, physical information concerning functional problems, and used tax comparables evaluating the subject against property classified comps. We successfully reduced the value to $6,368,880 for a tax savings of $47,653.

During the years, we have kept their values low with the exception of the 2001 tax year. We were forced to recommend litigation to receive a fair value. During the course of the lawsuit we included the 2002 tax year. The actual tax savings for those years are as follows:

2001
Noticed Preliminary Value $12,112,400      
Final Value in Appeal $11,180,000   Tax savings of $27,080
Lawsuit Final Value $10,175,000   Tax savings of $29,774
        ------------
      Total Yearly Savings $56,854
2002
Noticed Preliminary Value $11,651,900      
Final Value in Appeal $11,651,900   Tax savings of $0
Lawsuit Final Value $10,800,000   Tax savings of $25,238
        ------------
      Total Yearly Savings $25,238
      Total 2 Year Savings $82,092

The success of the lawsuit was a combination of Actual Income calculations and Uniform and Equal calculations per the Texas Property Tax Code. According to Newco's internal appraisal, the actual market value is significantly higher than our successful efforts arriving at the above assessed values.

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