Moving to MD and looking for opportunities
Hello all! I'm just beginning to learn about real estate investing and will be moving to Columbia, MD within the next two months. My partner and I will be closing on our first home, hopefully, by the end of the month. I'm looking for a buy and hold investment property to generate monthly income to offset the concerningly high mortgage payment (thank you interest rates). I don't have much in savings so I'm trying to utilize one of the strategies in Brandon's book "Investing in Real Estate with No 9and Low) Money Down." I thought about looking in Baltimore for cheaper options, but per my research, Baltimore's yoy population is decreasing and I'm weary about finding tenants. If there are any experienced folks who have any advice on where to look to get started, it'd be much appreciated.
Quote from @Holly Harvey:
Hello all! I'm just beginning to learn about real estate investing and will be moving to Columbia, MD within the next two months. My partner and I will be closing on our first home, hopefully, by the end of the month. I'm looking for a buy and hold investment property to generate monthly income to offset the concerningly high mortgage payment (thank you interest rates). I don't have much in savings so I'm trying to utilize one of the strategies in Brandon's book "Investing in Real Estate with No 9and Low) Money Down." I thought about looking in Baltimore for cheaper options, but per my research, Baltimore's yoy population is decreasing and I'm weary about finding tenants. If there are any experienced folks who have any advice on where to look to get started, it'd be much appreciated.
Hey Holly, welcome to MD! I grew up in Columbia and am pretty well connected in both the Baltimore and DC metro areas. Would be happy to chat sometime or introduce you to some ‘investor friendly’ agents in the area to help with searching for an investment property if you’d like some help still.
I'd recommend checking out CR of Maryland! They are a turn-key real estate investment company based out of Baltimore and may have some properties to buy
Hi Holly! I share Kyle's welcome! Kyle is a great lender. I actually spoke with him on the phone over a year ago when I first got started.
I personally bought my first investment property a year ago in Overlea neighborhood of Baltimore. It was a duplex and ended turning out to be a great choice. Having said this, Baltimore is certainly a city with it's disadvantages just like any city. You really have to know the neighborhoods so that you don't end up buying in a bad area. You're right about the population, but to be honest there's still half a million people living in the city plus you have big employers like John Hopkins Hospital + University, University of Maryland, Amazon, and Under Armour (many more). I'm not sure if I've ever shared this, but I did a whole research package when I had my doubts about Baltimore. See link Baltimore Invesment Area Research. The reality is that there are thousands of investors here that continue to invest. Baltimore may be on the come-up or it may not be but there's still a TON of people that need a place to live. Hope this helps.
Baltimore's population has been declining for 70 plus years.
However most of that is in the western and eastern parts. The central parts from the harbour neighborhoods straight north through the city are pretty stable.
It is very block to block in areas.
Reach out to @Sara Frank, she's an agent that lives in the Canton Neighborhood of Baltimore.
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Real Estate Agent Pennsylvania (#SBR005765 ), West Virginia (#WVA230040225), District of Columbia (#BR200201381), Maryland (#648402), Virginia (#0225219736), and Delaware (#RA-0031082)
- (301) 893-4635
- http://www.DistrictInvest.com
- [email protected]
- Podcast Guest on Show #192
I obviously people like saving money however a lot of people come to Baltimore with an idealistic perspective motivated by greed and leave feeling dwindled as they default to a lwts do the cheap thing mindset everytime and have unrealistic expectations as a result. The worst case is they have 1 property workout where they were lucky to get a tenant in that asset class and they think they can replicate that time after time and 4 or 5 properties in the luck runs out and it becomes a nightmare when they make little to no money. I recommend an A or B grade area. If you invest there you can probably get good tenants. Even for a 2 bed that is running into the low to high 100s. If you go much lower you are looking at renovation or a lesser asset class. The ideal scenario of 70 dollars for maintenance and Capex in c or d grade assets even if you self manage is not the realistic scenario. Its the fictitious scenario. If you get the grass cut because you don't want to go there thats running you probably atleast 30 bucks for someone reliable for a townhouse yard which leaves only 40 in an asset class where that is just not going to cut it. Honestly even B or A grade stuff will cost more and thats if the tenants don't break things. Also I would factor in water and electric/gas charges to some degree. It should be very small for turnover but in c grade stuff add more for water. I would say $75 to $100 to be realistic. A good agent will help manage your expectations. What you don't want is to purchase a problem and then after that expecting a property manager to save you from an unsavable situation. I'm an agent that has been in property management and contracting before being an agent a lot of it in the Baltimore area and I own property in Charles Village as well. Let me know if you want to discuss things.
Quote from @Kenneth Cheston:
Hi Holly! I share Kyle's welcome! Kyle is a great lender. I actually spoke with him on the phone over a year ago when I first got started.
I personally bought my first investment property a year ago in Overlea neighborhood of Baltimore. It was a duplex and ended turning out to be a great choice. Having said this, Baltimore is certainly a city with it's disadvantages just like any city. You really have to know the neighborhoods so that you don't end up buying in a bad area. You're right about the population, but to be honest there's still half a million people living in the city plus you have big employers like John Hopkins Hospital + University, University of Maryland, Amazon, and Under Armour (many more). I'm not sure if I've ever shared this, but I did a whole research package when I had my doubts about Baltimore. See link Baltimore Invesment Area Research. The reality is that there are thousands of investors here that continue to invest. Baltimore may be on the come-up or it may not be but there's still a TON of people that need a place to live. Hope this helps.
Hi Kenneth, thank you for sharing those details in your link.
How good is Baltimore for Brrrr? Is it realistic to find deals where you get all of your buying and rehabbing money back when you refinance?
Quote from @Sam Bhattacharya:
Quote from @Kenneth Cheston:
Hi Holly! I share Kyle's welcome! Kyle is a great lender. I actually spoke with him on the phone over a year ago when I first got started.
I personally bought my first investment property a year ago in Overlea neighborhood of Baltimore. It was a duplex and ended turning out to be a great choice. Having said this, Baltimore is certainly a city with it's disadvantages just like any city. You really have to know the neighborhoods so that you don't end up buying in a bad area. You're right about the population, but to be honest there's still half a million people living in the city plus you have big employers like John Hopkins Hospital + University, University of Maryland, Amazon, and Under Armour (many more). I'm not sure if I've ever shared this, but I did a whole research package when I had my doubts about Baltimore. See link Baltimore Invesment Area Research. The reality is that there are thousands of investors here that continue to invest. Baltimore may be on the come-up or it may not be but there's still a TON of people that need a place to live. Hope this helps.
Hi Kenneth, thank you for sharing those details in your link.
How good is Baltimore for Brrrr? Is it realistic to find deals where you get all of your buying and rehabbing money back when you refinance?
No, you will typically be leaving money in a BRRRR in Baltimore currently. Im about to start one that I plan on leaving about $50-$60k into, ARV $700k.
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Real Estate Agent Pennsylvania (#SBR005765 ), West Virginia (#WVA230040225), District of Columbia (#BR200201381), Maryland (#648402), Virginia (#0225219736), and Delaware (#RA-0031082)
- (301) 893-4635
- http://www.DistrictInvest.com
- [email protected]
- Podcast Guest on Show #192
Quote from @Sam Bhattacharya:Wow great feedback from Tim and Russell. Sam, definitely agree with Russell. I've only done one deal so I default to those guys on knowing way more than myself. My first deal I house-hacked and did a partial BRRR by taking out a HEL. I was 66k into the deal and took out 23k although I could have gone higher up to 40k but didn't want to hurt the cash flow too much. It's a balance, but generally a full 100% BRRR is really hard in Baltimore I think. But hey.... even if it's a partial BRRR that's a great deal. All depends on what final numbers you are looking for.
Quote from @Kenneth Cheston:
Hi Holly! I share Kyle's welcome! Kyle is a great lender. I actually spoke with him on the phone over a year ago when I first got started.
I personally bought my first investment property a year ago in Overlea neighborhood of Baltimore. It was a duplex and ended turning out to be a great choice. Having said this, Baltimore is certainly a city with it's disadvantages just like any city. You really have to know the neighborhoods so that you don't end up buying in a bad area. You're right about the population, but to be honest there's still half a million people living in the city plus you have big employers like John Hopkins Hospital + University, University of Maryland, Amazon, and Under Armour (many more). I'm not sure if I've ever shared this, but I did a whole research package when I had my doubts about Baltimore. See link Baltimore Invesment Area Research. The reality is that there are thousands of investors here that continue to invest. Baltimore may be on the come-up or it may not be but there's still a TON of people that need a place to live. Hope this helps.
Hi Kenneth, thank you for sharing those details in your link.
How good is Baltimore for Brrrr? Is it realistic to find deals where you get all of your buying and rehabbing money back when you refinance?
Baltimore and Maryland in general is a love hate relationship. I have one property left in Baltimore and amazing tenants. Once they're gone, I'm selling, no if ands or butts. I recommend a good attorney for evictions, and it doesn't matter if its A or D neighborhood. I grew up in Howard County and visit often to see friends, it's not called the golden ghetto for nothing. Very detailed tenant screening and checks all around is a must. Any red flags and be ready to ask the applicant the hard questions. Put them on spot and explain what ever it is you have concerns with, don't be afraid to offend them, this is your property and business and if you end up in a bad situation Maryland is on the tenant side, not the landlords.
But when things are good, the money can be great.
I might seem very bias, but I and a good friend both have had some really bad experiences and lost lots of money. If want to hear a horror story, feel free to DM me.
Baltimore taxes are pretty high and the laws are also not landlord friendly. I would suggest looking at a midwest market like Cleveland where you can find tons of opportunity for SFH and small multi family. I live in Northern Virginia and invest primarily in Cleveland from the past 2 years and I have been able to scale up to 12 doors. Feel free to connect and we can discuss.
Screenings are an absolute must but to say it doesn't matter if its an A or D neighborhood is flat incorrect. Can you get a bad tenant in an A or B grade neighborhood. Sure if you do a bad job screening but its not hard to do a decent job screening and get a good tenant. To get a good tenant in a D grade neighborhood that stays a long time is much harder. I would rather own an A or B grade asset in Baltimore or even California than own a D grade asset in Florida or somewhere way more landlord friendly. That's because I know I won't get a bad tenant because I will screen them and get good people and I can trust a reputable property manager to screen them if I ever needed to move. They would take the job because they know in an A or B asset class they will be paid what they are worth. They won't take the D grade asset because its a headache and they will not be paid what they are worth.
The problem is some new investor will hear that it doesn't matter whether its an A or D grade asset and think well I might as well go cheap with things in D grade then find out the hard way experiencing a world of hurt.
Quote from @Aj Parikh:
Baltimore taxes are pretty high and the laws are also not landlord friendly. I would suggest looking at a midwest market like Cleveland where you can find tons of opportunity for SFH and small multi family. I live in Northern Virginia and invest primarily in Cleveland from the past 2 years and I have been able to scale up to 12 doors. Feel free to connect and we can discuss.
Cleveland's tax rate is actually a descent amount higher than Baltimore's. Baltimore is 2.26% of the properties value. And Cleveland's ranges from 2.64% to 4.09%, so it can be almost as much as double Baltimore's.
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Real Estate Agent Pennsylvania (#SBR005765 ), West Virginia (#WVA230040225), District of Columbia (#BR200201381), Maryland (#648402), Virginia (#0225219736), and Delaware (#RA-0031082)
- (301) 893-4635
- http://www.DistrictInvest.com
- [email protected]
- Podcast Guest on Show #192
Quote from @Russell Brazil:
Quote from @Aj Parikh:
Baltimore taxes are pretty high and the laws are also not landlord friendly. I would suggest looking at a midwest market like Cleveland where you can find tons of opportunity for SFH and small multi family. I live in Northern Virginia and invest primarily in Cleveland from the past 2 years and I have been able to scale up to 12 doors. Feel free to connect and we can discuss.
Cleveland's tax rate is actually a descent amount higher than Baltimore's. Baltimore is 2.26% of the properties value. And Cleveland's ranges from 2.64% to 4.09%, so it can be almost as much as double Baltimore's.
Yes every time I look at Cleveland the taxes kill the whole deal. Look nearby in Toledo OH they are a little high but nothing like Cleveland. (I also live in Maryland)
I have been investing in Baltimore since 2004, and I am pretty happy about it.
Invest in over certain price points you will be fine. Many invest in less than 100K and they are surprised when they have problems. When you invest cheap, just expect there will be problems and if you buy 20-30-40 of them you will be fine doing section 8. There are many investor who do that.
Key is you gotta be keep buying.
If you spend over 130K and upgrade the house, you will still get quality tenants. You dont have to be in Canton or Fells...
As far as BRRR goes, be ready to leave around 15K in it.
As long as you know what you are getting into you are fine.
To do that, find an investor agent. Not somebody who has 3 units or something.
There are bunch in this forum who are experienced. They will all help you.
Good Luck either way!!!
Quote from @Ozzy Sirimsi:
I have been investing in Baltimore since 2004, and I am pretty happy about it.
Invest in over certain price points you will be fine. Many invest in less than 100K and they are surprised when they have problems. When you invest cheap, just expect there will be problems and if you buy 20-30-40 of them you will be fine doing section 8. There are many investor who do that.
Key is you gotta be keep buying.
If you spend over 130K and upgrade the house, you will still get quality tenants. You dont have to be in Canton or Fells...
As far as BRRR goes, be ready to leave around 15K in it.
As long as you know what you are getting into you are fine.
To do that, find an investor agent. Not somebody who has 3 units or something.
There are bunch in this forum who are experienced. They will all help you.
Good Luck either way!!!
Since I haven't done a Brrrr, let me understand what it means exactly to leave money in it.
Let's say you buy a distressed property for $80,000. You rehab it for $30,000. You get it appraised and the ARV comes out to $160,000. You do a cash out refi for $110,000. That covers the entire cost of buying and rehabbing and would be an example of a "perfect" Brrrr.
On the other hand, if the ARV comes in lower and you can only get $95,000 back, would that be an example of leaving $15,000 in the deal?
With a brrr keep in mind the closing costs for both the purchase and refi.
Quote from @Tim Jacob:
Screenings are an absolute must but to say it doesn't matter if its an A or D neighborhood is flat incorrect. Can you get a bad tenant in an A or B grade neighborhood. Sure if you do a bad job screening but its not hard to do a decent job screening and get a good tenant. To get a good tenant in a D grade neighborhood that stays a long time is much harder. I would rather own an A or B grade asset in Baltimore or even California than own a D grade asset in Florida or somewhere way more landlord friendly. That's because I know I won't get a bad tenant because I will screen them and get good people and I can trust a reputable property manager to screen them if I ever needed to move. They would take the job because they know in an A or B asset class they will be paid what they are worth. They won't take the D grade asset because its a headache and they will not be paid what they are worth.
The problem is some new investor will hear that it doesn't matter whether its an A or D grade asset and think well I might as well go cheap with things in D grade then find out the hard way experiencing a world of hurt.
@Tim Jacob I think you are referring to my comment, and it probably wasn't written well so let me clear up what I am saying. Its all about the screening and back ground checks you do on a applicant, It does not matter if it's A hood or D hood, You have to cross all T's and dot all your I's, plus be able to confront the applicant with hard questions to any red flags. You can find some really good people in D class Hoods that are doing the best they can with what they have. Not to say the choices they made haven't put them there, but some will be really eager to right their ship in life.