Multi Family Rental

11 Replies

Hello BP,

I am looking to purchase my first investment property in Baltimore by using a FHA owner occupied loan. I currently live in DC and I am a licensed realtor in DC and MD. I want to know what are the best areas in Baltimore for buy and hold. Should I buy at a discount and rehab using the 203K? Also being though I am just starting out should I rent to section 8 holders or W-2 tenants only? Any advice would be greatly appreciated.

"Also being though I am just starting out should I rent to section 8 holders or W-2 tenants only?"

fyi: Fair Housing Regs prohibit consideration (read exclusion) of the tenants source of funds - - we may only verify sufficient funds( typically X times the rent) are available.

However, given my choice, I would opt for W2 income, or self-employed persons with bank statements as proof.  If you look into Sec-8, the property must be inspected, qualified and the 'appropriate lease' enforced - - hmm(hint), what happens if I never get qualified?

Originally posted by NA Beard:

"Also being though I am just starting out should I rent to section 8 holders or W-2 tenants only?"

fyi: Fair Housing Regs prohibit consideration (read exclusion) of the tenants source of funds - - we may only verify sufficient funds( typically X times the rent) are available.

 Nope not in MD. Currently you can choose not to rent to section 8. I suspect the J Beard is referring to a CA specific law 

@Damien Dupee best is relative. Some people want nicer neighborhoods believing they will have fewer problems and possible appreciation. Some investors want to maximize cash flow and are willing to go into lesser neighborhoods.

If you choose the lower end route, I recommend section 8 tenants. In poor neighborhoods you will likely have more problems collecting from market tenants.

In general think you are better off buying fixer uppers and gaining sweat equity by renovating. (PS not your sweat, pay someone to sweat for you)

@Ned Carey

I crossed my references, sorry - - it's a Fair Housing Regulation:

Fair Housing Laws prohibit
discrimination based on:

  • - Race or Color
  • - National Origin or Ancestry
  • - Religion
  • - Sex
  • - Sexual Orientation
  • - Marital Status
  • - Age / Familial Status (having
  • children or being pregnant)
  • - Mental or Physical Disability
  • - Source of Income

What actions are prohibited?
It is illegal for a landlord or seller to:

  • - Refuse to rent or sell housing.
  • - Discourage you from looking at a house or apartment.
  • - Steer you to a different house or apartment.
  • - Set different terms, conditions, privileges, or provision of services relating to the rental or sale of the housing.
  • - Deny you property insurance.
  • - Conduct property appraisals in a discriminatory manner.
  • - Tell you that housing is not available for inspection, sale or rental when it is available.
  • - Refuse Areasonable [email protected] for a person with a disability.
  • - Harass, coerce, intimidate, or interfere with anyone exercising a fair housing right or assisting others to exercise their fair housing rights.
  • - Discriminate in the advertising of a house or apartment.
  • - Treat you differently based on the source of your income.
  • - Fail to aggregate income of all persons in the household for purposes of qualifying for a rental or home purchase.

Updated almost 6 years ago

http://www.lawfoundation.org/repository/Income.pdf WHO MUST OBEY THE FEDERAL FAIR HOUSING LAW? Landlords, sellers, financiers or others involved in three (3) or more sales or rentals in the previous 12 months. Rental agents, real estate agents, or sales agents involved in two (2) or more sales or rentals in the previous year. Owners of buildings that can house five (5) or more families. Owners occupying a dwelling of four (4) units or less where the owner advertises the availability of a unit in the dwelling. Owners of single-family homes who use the services of a real estate broker, salesman or agent to sell or rent the home. Owners of single-family homes who advertise for the sale or rental of the single-family dwelling. Owners of dwellings paid for with the aid of loans, advances, grants or contributions made by the federal government, unless repaid in full prior to the enactment of the 1988 Fair Housing Amendments.

@J Beard and others I repeat "source of income" is NOT a protected class under federal rules. It may be under state laws, many states add additional protected classes.

There are seven "Protected Classes" under federal law. They include:

  • Race 
  • Color
  • religion
  • Sex
  • Handicap
  • Familial status
  • National origin

See question 3 under this link

http://www.realtor.org/rmoquiz2.nsf/QuizLookupFair...

Or direct from HUD government site

http://portal.hud.gov/hudportal/HUD?src=/program_o...