Potential Canton Duplex(Baltimore)-Need help with assumptions!!

[Eric Guth]

Hi,

I have the opportunity to purchase a duplex in the Canton area in Baltimore area and I was wondering if people could help me narrow done some assumptions. Here are the details

Located right next to Patterson Park.

200-215K purchase price. Rent can reasonably be 1800/month over both units. Newly renovated and new roof.

My brother plans to live in one unit, so an FHA loan is possible and he plans to do most of the management of the unit.

Want to buy and hold.

I was wondering if people in the area could help me with pricing out the following:

Typical bank interest loans in the area (I have very good credit, any recommended banks would be useful too)

Property tax rates in the area.

Insurance rates.

Potential management fees and recommended property managers

Typical closing costs

What duplexes in the area typically go for.

What is considered a good rate of return in the area.

Any of course any other area specific information or things to consider would be greatly helpful!

Thanks everybody,

Eric

[Ned Carey]

Eric,

If the property is above Patterson Park or below it will make a big difference in the value. (To the South is better)

Property tax rate is 2.4% of the assessed value every year. The tax rate is very high in Baltimore. I would guess insurance to be $800 to $1000 a year. I pay about half that but none of my property are that expensive.

Bank interest rates will vary. A big factor is whether you will buy in your own name or in an LLC. If your brother is buying for himself or whether you buy it and rent to him will make a difference.

Many factors affect closing costs.  Much of the cost is financing costs and 3% transfer fees in baltimore city. Typically the transfer fees are split between buyer and seller but often investors wind up pay it all.

With a price of $200K+ and a rent of $1800 a month you are below 1%. That is not a very good ratio. It is not one I would accept. You may have no positive cash flow after expenses. Expenses are more than you would expect. You didn't even mention vacancy, repairs and turnover costs. These are some of your largest costs. However in that area you may have solid appreciation.