Good Afternoon BP family. I am looking at Baltimore City to buy my second buy and hold property. I will be purchasing a tax lien from the upcoming 2018 tax sale over the counter ( this is a way to get my feet wet). I have gone through the Pigtown section of Baltimore City and I have some questions. It appears as if the neighborhood has a lot of boarded up properties and the area seems run down HOWEVER it is right next door to the Ravens Stadium, Orioles Stadium, downtown, and MD University Baltimore. Location is everything in real estate as we all know however I wanted to know if I am missing something. The location is perfect however the neighborhoods are in horrible condition. If anyone has any advice about this area of Baltimore City I would greatly appreciate it. Thank you!
Hi @Marissa Cowan ,
It is really hard to classify an entire area/neighborhood in Baltimore City as good/bad. Location in Baltimore City changes block by block and, sometimes, you can even talk about the good end of the block vs the bad end of the block.
Pigtown in particular has been up and coming for years for the reasons you have mentioned; however, it never seems to get there. It is an area that I generally like, but as I mentioned early, there are parts of this neighborhood that I won’t purchase in (lot of crime and difficult tenants) and other parts of it that I would love to own property (good tenants for buy and hold of great resale value for flips, gentrification is happening, great appreciation, etc.).
It looks like in the last 6 months, there have been a few purchases under 90k by RE companies and then some market....
830 Woodward St (likely a flip) 162k
633 Archer St 176k
744 McHenry St 197k
853 Washington (likely a flip) 252k
Are you planning to buy and hold or flip? There have been 22 sales in the last year, 7 over 130k. 7 rentals, averaging $1200. In general, I'm seeing most action (sales/rentals) on Washington Blvd, Carroll, and Carey St.
@Marissa Cowan Pig town does not have a lot of boarded up properties relative to many weaker areas of the city. However It is considered a weaker area. I think it is a good longer term bet because of how close it is to downtown. If it were that close on the other side of the city prices would be double.
Being close to the stadiums is a non issue for me. That could as easily be a minus as plus. As someone above said Pig town has been up and coming for a while. It just never seems to get there.
I wouldn't count on getting a pig town tax lien over the counter. It is too well known of an area to get ignored in the auction. It can happen though.
Mr.F ernandez thank you for the information. I will need to go and scope out the area again. I do remember saying to myself that every street seemed to be different. Some streets were good and some where bad.
Mr. Carey what zip codes or neighborhoods should I look to buy a left over tax lien? The only reason why I am purchasing a left over tax lien this year is because I do not understand the bidding process. I know I will only have enough money to purchase one lien during the tax sale anyway. I just want to get started. Is there a way to determine through the tax sale which properties are multifamily? I am aiming at only purchasing these types of properties so I can exit the rat race much earlier than expected.
I know the process of foreclosing on a property through the tax sale will take up to a year and a half and during that time I will have to pay the property taxs, any back taxes and miscellaneous bills. Is there a way for me to find out this information before I go and pay for a tax lien? Thank you.
Finally I would like to come to the REIA you are apart of. Do you all have the dates set for 2018? Thank you!
@Marissa Cowan Zip code is not a very effective way to break down Baltimore. Almost every zip come has both good and bad areas. They few zip codes that are universally good are very unlikely to wind up in the leftover tax sale list.
Researching leftover tax liens is the way I became familiar with the city. It can take a lot of work to go through the list and narrow down potential candidates. Then it takes more work to go look at them and evaluate them in person. But dong that made made me a lot of money. It is one area where time and effort can make up for lack of money. It also made me an expert on the city.
No you cannot tell from the list which properties are multifamily. One way to tell when driving by is see how many doorbells or mailboxes the property has.
No you do not have to pay any taxes while you hold the tax lien. They only need to be paid after your foreclosure is complete in order to record your deed. You can estimate two years worth of taxes and perhaps $1,000 worth of water in advance when you buy the lien. But fines and violations you will only know when it is time to record your deed.
The clubs I am at the most are the BWI Meetup and the Anne Arundle REI meetup. However I am not at either one very often. I will probably be speaking about tax liens sometime next spring.
Mr. Carey thank you for your timely response. The pro tip about the two mailboxes and two doorbells is brilliant :).
So it seems as if the city is wide open to find a good property. That is good news for me. I know in order to find a good property I need to drive pass the property at different times of the day and week to get a feel of the neighborhood. In addition I should inspect the property if I can ( check foundation for cracks, check roof damage, broken windows etc). Is there anything else I should check for in my mock inspection of the property?
If I buy a lien for approximately $1,000.00 and foreclose on it for about $3,000 is it safe to assume I will pay another $2,000 in back taxes (about two years) and another $1,000.00 in fines? So my approximate out of pocket expense will be about $7,000.00 for one lien? I'm only asking so I will know how much money I really should have to take a lien from delinquent to a recorded deed.
I would love to come see you speak on this topic in the spring. I will stay close to your posts on BP to ensure I do not miss it :).
@Marissa Cowan your estimate of total cost to foreclose is pretty good. you can make it a little closer by using the actual amount of the new taxes X2 to instead of just estimating $2000.
When inspecting i look for a lot of subtle things. Are the window new or old wood windows? One of the first things people upgrade on older house is the windows. Old would windows is an indications nothing else inside has been updated.
Is the painted wood on the exterior in good condition? If it is boarded up are the boards new or old gray weathered boards that are curled up on the edges because they are so old. If a property appears vacant i will try to look in the front window, or even the mail slot.
One thing that has thrown me off is the front door. We have often found houses with a really nice newer expensive looking front door be crap inside. Based on the door I would have guessed the house had been updated.
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