Rental Property Investor · New Martinsville, WV · Member since 2012 · 105 posts · 44 votes
10y
There is no economic growth in most of the state with the exception of Morgantown (WVU) and the Martinsburg area. WV is not a very business friendly state. Very high insurance premiums both in business and personally. There is drilling for Marcellus gas where I live but that has stalled due to low gas prices. Also these workers don't relocate here. The state couldn't balance the budget so it raised the tax on a pack of cigarettes $0.65. It is very different than the state I grew up in as a child.
That being said, the most I've ever paid for a sf investment home is $35k. A few cosmetic updates and rents are between $450 - $800 depending on the town (my personal properties). Most renters here have poor credit and with sfh prices so low anyone with good credit purchases a home.
Don't mean to be negative about WV but this is reality currently.
Rental Property Investor · New Martinsville, WV · Member since 2012 · 105 posts · 44 votes
10y
There is no economic growth in most of the state with the exception of Morgantown (WVU) and the Martinsburg area. WV is not a very business friendly state. Very high insurance premiums both in business and personally. There is drilling for Marcellus gas where I live but that has stalled due to low gas prices. Also these workers don't relocate here. The state couldn't balance the budget so it raised the tax on a pack of cigarettes $0.65. It is very different than the state I grew up in as a child.
That being said, the most I've ever paid for a sf investment home is $35k. A few cosmetic updates and rents are between $450 - $800 depending on the town (my personal properties). Most renters here have poor credit and with sfh prices so low anyone with good credit purchases a home.
Don't mean to be negative about WV but this is reality currently.
Investor · Morgantown, WV · Member since 2008 · 207 posts · 33 votes
10y
WV is struggling a lot with all the EPA environmental rules which have hurt coal. We have relied a lot in our natural resources.
We were one of the few states that didn't suffer with massive forecloses because our home prices never over inflated.
Morgantown is where wvu is and the market is tight and prices are higher. 30 minutes south in Fairmont , I just purchased a duplex for 30k and hope to get $1000 mo or more. This meets the 2 percent rule.
Doubt I could find this in Morgantown.
WV also suffers from our infrastructure. Many of our communities are nestled in the mountains and country with no easy access to businesses. As we shift away from natural resources, with newer leadership, hopefully we can be more inviting to business and lower archaic tax structures. Keep in mind, Pa just proposed and may have passed a $1 raise on cigarettes taxes.
I also notice that gass is at least .20 cent higher in PA.
Real Estate Investor · Charles Town, WV · Member since 2015 · 35 posts · 12 votes
10y
Jefferson County in the Eastern Panhandle of West Virginia is a far flung suburb of Washington DC. There is commuter rail service to DC which provides access to good jobs. I live in Jefferson County and commute to VA for my W2 job. I don't invest in Jefferson County because of the limited inventory of small Multifamilies available in my price range as well as my lack of experience with local property management companies. I currently invest in Hagerstown, Md which is about an hour away because the numbers work there. Hagerstown brings a full range of opinions here, which if nothing else, provide entertaining reading as well as interesting opinions.
Investor · Bowie, MD · Member since 2015 · 114 posts · 36 votes
10y
@Ray Arends,
I'm starting to take a look at Hagerstown myself. What is it about that market demographic-wise that makes it work? Any keys to look for in the multifamily market there?
Cash flow! I believe that the proximity of Hagerstown to the crossroads of I81 and I70 provide decent jobs in the transportation and warehousing industries. The prices on small multi families are such that the rents can support commercial debt coverage ratios that local banks are willing to lend on.
There are also professional management options available.
Of course there are downsides. The small 4-7 unit buildings I am interested in are typically over 100 years old. They were more than likely large single family homes that were converted into apartments. As a result, some, but not all, floor plans are odd. I avoid the weird buildings. Heat is typically master metered, the landlord on the hook for heat and hot water. Natural gas is widely available and more economical than fuel oil heat. Electric baseboard heat is an alternative, being more easily sub metered with the tenant paying for what is in my mind the most inefficient heat available. Water, sewer and trash are also paid by the owner.
Appreciation is pretty much non existent. If you are a buy and hold investor looking for cash flow this isn't an issue as long as you recognize this characteristic prior to jumping in.
Finally, both the city and county tax real estate annually. There's nothing like the arrival of two tax bills in the same week to lighten one's wallet!
Get your agent to show you several properties. I like the north side of town starting about 5 blocks north of Franklin St. At that point it seems to me the area transitions from urban to a more suburban feel.
Financial services executive · Frederick, MD · Member since 2015 · 609 posts · 341 votes
10y
What's it like getting a non paying tenant out in WVA? Rentals in those price ranges are always going to experience some delinquency. The tough eviction laws scared me off of Charles Town.
And that brings me to @Michael Tucker & Hagerstown... I have a number of 3 and 4 unit multifamily. The main keys are scaling fast, buying right (better buy 16 caps at a minimum if you want to make 9 to 11% and watch for well maintained opportunities that dont come with tons of deferred capex) and firm screening policies. Frederick is almost too far. Clinton will be a real challenge here is why:
1. You'll be leaving work early on Friday to be in rent court at 1pm. Count on this no matter how great your screening is when a life hiccup occurs for these people they default. No fear or shame in it just part of the cycle.
2. You have to keep the properties to code. Code enforcement is very aggressive. Tenants make a mess with trash? Weeds or grass get a little too high? Evict some deadbeat and put their stuff on the street as required by law? You'll get a posted abatement notice. You get three free per year then the 4th is $250, 5th $500 every one after that 1,000. And that's when they just post. If you don't abate fast enough they'll do it for you and that is 300-750 more. It's very hard to predict when your tenants are gonna act up and get you cited - sometimes they act up and call code on you to boot!
3. The property managers suck. They have to provide crappie service on purpose to work a time intensive unit for 10% of a average 650 rent. Want to get it leased? You'll be making that 3 hour round trip to do showings, lease signings, etc etc
4. A dearth of quality contractors. We have had at least 10 fail to complete jobs in 3 years. Finally in April I was able to hire a staff handyman. Now we keep up. But that costs 750 a week. Every week. He has a family to feed regardless of whether my tenants pay.
It's hard work. From Clinton I wouldn't try to start with less than 10 units. At least then when you come to town you'll have 5 showings 2 rent courts and maybe an eviction that morning from the prior month if you get your timing really sharp. Passive income? Cute.
Real Estate Investor · Hagerstown, MD · Member since 2013 · 276 posts · 107 votes
10y
Very interesting infographic. In this area, West Virginia is a little bit of its own animal. I know several people doing very well focusing their portfolio in the Martinsburg area. Like JR T. & Ray Arends said, the numbers work in Hagerstown and that is why we see the influx of out-of-the-area investors, I think.
Investor · Bowie, MD · Member since 2015 · 114 posts · 36 votes
10y
Thanks @Ray Arends and @JR T. for those well thought out responses. I just noticed that the area was affordable for multi-families and my wife said that the area was pretty professional so I was looking for a bit more perspective. I have some associates from an investment group that wanted to scout the area a bit more so I'm attempting to educate myself on the market.
@JR T. what locales would you suggest to look into for multi-families then? We're you burned by a Hagerstown Experience?
Financial services executive · Frederick, MD · Member since 2015 · 609 posts · 341 votes
10y
I'm in the process of scaling up. I think if I can get to 50 units I can hand the whole thing off to a single employee and have it done right and efficiently. Two years ago I was the guy chasing a $400 rent from a tenant I inherited on a Friday afternoon. I realized during that drive I either had to get big or dump what I had just bought. I opted to buy more. I'm up to 19 units there now. I have a few condos here in Frederick. They're really great when leased all are vacant at the moment.
If you would like some real perspective on Hagerstown @Michael Tucker I'd be happy to arrange you a ride along with my property manager. Really no better way to get a feel for what you will have to look forward to than experiencing it first hand. It's not "a" bad experience in Hagerstown - it's just a tough market man. Everything is tough from the local government, the tenants, super old buildings, ultra-depressed local economy.
@Mike Webb I think Hagerstown sees out of area investment because people don't truly understand how it would be different from what they know, where they live. And it's affordable (on paper). Not too far away in Frederick I tell folks, "It's a really big mountain between here and Hagerstown." They really don't get it though. I think what you see is a dearth of local investors because they got sick of it. The property I bought last week came out of a 100 unit portfolio from a local investor who had simply given up. Properties in Hagerstown-tenant lived in condition stay on the market well over 100 days.
This latest thing with the fines for merely receiving an abatement notice - no court hearing, nothing - is absurd. I hired Bill Wantz who used to be the hearing officer over the kangaroo "court" that hears the appeals of the notices to fight every single one they give me now. He's also supposed to look into challenging the ordinance. I suspect there is not enough due process to deprive a property owner of $1,000.
We were admiring your color choices earlier on Facebook, Mike. You guys really do such a nice job on your renovations.
Real Estate Investor · Hagerstown, MD · Member since 2013 · 276 posts · 107 votes
10y
After typing multiple replies, to several threads, on my phone and then them never posting while the app crashed...I am keyboard cowboying from an old fashioned desktop.
@JR T., Thank you. Also, sounds like we are on the same path for goals in the buy/hold arena.