To all my Baltimore investors, would you invest in the Sandtown Winchester neighborhood in Baltimore City?
This is particularly directed to Lanlords that invest in Baltimore in lower income / section 8 rentals.
Every neighborhood has its own unique challenges. The question is do the numbers work and are you willing/equipped to work in the area. They are many people looking for a place to live. Unless the neighborhood is falling apart with no livable areas, I would invest there. There is someone landlording in every part of the city and if they know what they are doing they are profiting as well.
Well I plan in going to an auction for 2 houses in that neighborhood. If the property is in a decent condition, I plan on hopefully purchasing 1 of the properties for around $10,000. I plan in having a property manager. I'm hoping to see that the home doesn't need more than 10 to 15k work since the home values seem to be around 30k. On rentometer, the rents range from 750 to over $1,000. The majority seem to rent in the $950 range. 2 houses on the block I'm interested in rent for $1200 and are 3 bedrooms like the homes I'm looking at. @Tyrus Shivers
Sounds good. The deal with auctions is you do not know what is on the inside. I went into a property recently on Woodbrook Ave (some consider Parkview) and it was decent on the outside, but on the inside all plumbing was gone, electrical cut, furnace gone, etc. So needless to say no deal. 10-15 will get you cosmetics and maybe a little more, but you do not want major items to fall under that either. Are you planning retail renting or Section 8? A 3 bed voucher can get you 1300+ depending, you can check HUD's site for numbers or call the housing office. I have not had major issues with communicating with the city or getting things done with the properties I deal with.
@Tyrus Shivers I would like to do section 8. I'm planning on hopefully being able to do a walk thru before the auction so I can get a good idea of all the work needed. Was the 10 to 15 k you mentioned general contractor pricing? Do you think sec 8 renters would move into that neighborhood? If they do, I'm a little concerned about the type of tenant that might move in in that neighborhood. Either way, I think the auction will be a learning experience.
If you can get in there that would be great. It was pricing for separate guys doing the work, not under a general contractor. That price should get your flooring,painting, and patchwork done. Mechanical and electricity work depending on how much and what will increase that. I have a little breakdown that I compiled that was provided to me by a few rehabbers in Baltimore and the Counties. There are Section 8 renters in most neighborhoods. Even the middle class ones. Proper screening will help you in most cases.
During my summer break this year, I went to an auction in the MillHill area of B'more. I Though I brought a certified check as required to jump in if I wanted to actually bid, I went with the intention of observing and walking the property during the inspection time and just listening to all the other experienced investors out there and watch them do their thing. I'd say there were about 20 investors there. It's wasn't like a crazy bidding war but the opening bid shot up quickly. I don't know what your opening bid is at these auctions. I would strongly suggest that you go to an auction BEFORE these so you have a basic level of what to expect (maybe you have already done this which good for you if you have). Also have your financing completely lined up because if you are the winning bidder you are on the clock to obtain the property. Good luck!
Thanks! @Christina R. I've been to 1 other auction before. I walked around and inspected the property and listened to other investors like you said. Quite interesting. I didn't even bid at that auction because like you said the bidding price jumped up quite quickly. It sold for somewhere between 80 and 90k and was over in about 10 to 15 minutes. This auction should be over much quicker since I highly doubt the price will go that high due to the neighborhood. I'll see what happens!
Awesome I hope u get the property!
thanks @Christina R.
I bought a lot of tax liens in Sandtown. With the right deal I would keep one for a rental there. Like many neighborhoods there are some parts that are better than others. I believe Habitat for Humanity has done a fair amount of work there.
@Ned Carey Ashland Auction Group
Good luck at the auction! As everyone said be careful to check out as much as you can in the house at the walkthrough and set a firm upper limit that you would pay based on the amount of work you think it will need vs. expected rent. If you have a PM lined up see what they might have to say about other rentals they are taking care of in the area ( I.e. section 8 rent they are getting, ease of finding tenants, etc.)
You never know where people want to live in this city-near relatives, favorite schools, etc.
okay, good suggestions. Thanks @Jeff K. !
Ashland was my guess. They just sold one for me over there.
No I wouldnt. I have one in the middle of Sandtown. This area has only one ROI strategy primarly Sect.8 or low market rent(not good). Not good area to renovate and flip or for appriceation. Ideal in real esate investing is to have more than one way for ROI.
I know this is an old post, however.....Sandtown/Winchester is arguably the worst neighborhood in the entire city, which is saying something.
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