I'm a flipper, landlord, and run a construction company in Baltimore City, MD, by no means are people just plucking mls deals everyday and making a fortune. Most of the 70K+ houses you are talking about have serious structural issues, mechanicals have to be fully redone, and permits take time and money. Most of the time if someone is buying something for 70K it needs 80K+ work done to it, then you have to include closing costs 11%-12% in Baltimore City do to high tranfer taxes, and a 3% subsidy(seller help, its almost guaranteed in Baltimore), and 5% commission, then you have lending costs, property taxes, etc. Then you have to deal with the work from most GCs which is crap, unless you pay up for a good GC, which never happens as investors always go for the cheapest. I get calls almost everyday from out of state investors who are stuck cause GCs ripped them off. Everyone I know, looks at out of staters as the suckers that buy everything no one else wants. If you don't have a great, honest team on the ground you are screwed.
@Boaz Rozen happy new year! @Nicole B. is right about being block by block. Sounds like you are looking to fix and flip? I am doing one in area called Upper Fells Point. Some popular areas are Fells Point, Patterson Park is popular, Canton, Federal Hill if you are looking to do a rowhouse in good neighborhood, You also have the option for Baltimore county. Most places in the city have certain cut off streets you don't want to go beyond. I am not sure what kind of fix and flip you are looking for but would advise if you are not from the area just to make sure you bounce whatever property you might be looking at with someone who is familiar. Hope some of the information helped. I am always happy to help any way I can. Good Luck!
@Boaz Rozen Baltimore is definitely a city with a bright future, with it's proximity to the nation's capital and the array of asset classes available to invest in.
As for areas to invest in, it all depends on your real estate strategy and capital requirements.
In general, you want to be close to one of major drivers of employment and tenants such as one of the JHU institutions. In addition, apartments are also a great way to mitigate the risks of managing the day to day operations if you feel that you would want something a little hands off.
For fix and flips you can look outside of Baltimore City into Baltimore County as well. Places in the county like pikesville have strong ARVs and home owner neighborhoods you would have to do your due diligence on specific addresses to make sure the deal works as a fix and flip, but if your willing to go into the county there are nice suburban neghiborhoods that would work well as fix and flips.
@Boaz Rozen you are in California and want to do long distance investing in Baltimore ? If you dont know Balto dont invest there . What will look great on paper most likely isnt . You need to have feet on the ground
I would have to agree with @Matthew Paul. Baltimore City is not a place you want to invest in long distance. Like @James A. said, it is by the blocks but even blocks where property values are good, the threat of having all of your shiny new appliances robbed mid flip is still there. I hate to make Baltimore sound so dangerous, but I personally wouldn't risk a long distance flip without thoroughly vetting the deal and the neighborhood.
Welcome to BP and happy new year. It seems you have great aspirations for the new year. Warning be very wary of nan sayers they can thwart your dreams if you allow them to. Baltimore is a great and safe city to invest in as long as you have the right team of Professionals. There are still honest Property managers, Agents, Contractors, Wholesalers and Investors still out here, I work with many of them and am one myself. You attract what you are. Hence the saying Birds of a Feather Flock Together. But before investing in that area, I would recommend reading
long-distance real estate investing
By: David Greene
and listening to this podcast to get familiar with the systems and strategies that exist to facilitate the process. Podcast Guest on Show #257
Cheers to you new endeavors may you make the most of them. Feel free to reach out if you need any inside info on any areas or just would like to dialog.
Hi Boaz Rozen
I am not sure what your price point is, your strategy is, how you want to make money etc...
Everybody is right, Baltimore changes a lot in certain areas.
If you have a budget of 30k-50k range, looking for a gem in the rough neighborhoods, I totally agree you should not invest all the way from California, unless you come here and see yourself.
If you want to spend more money( still
way less than California) , get decent returns, be safe, then there are many neighborhoods in Baltimore you can invest.
It is all about what you are looking for.
Buy 40k - spend 20-30k - sell for 130k then you need spend time here.
If you can give more details, then we can give you better info.
Good Luck!!!
Baltimore is a gold mine. Proper analysis and a lot of work and you can make your fortune here. You will also need a team on the ground. Just like in a gold mine there are some dangerous areas but the reward is worth it.
@Boaz Rozen welcome to BP. Baltimore has lots of potential however it is difficult to understand from afar. It is not difficult to understand if you drive the streets here . The changes will be obvious.
If you do choose to invest here make sure you have a local person that you can absolutely trust.
I'm eyeing baltimore and have looked at a gobs of mls investor numbers. The spreads I am seeing on some of these investor deals are insane to me. Buy for 70k sell for 250k? Buy for 200k, sell for 500k? And many of these are simply just outdated houses. And they are buying them right off the mls. All of this seems too good to be true for an investor from Denver, where the mls is dead and buried, and laying right next to it in the coffin is the 70% rule. Would love to hear some success stories from anyone reading this thread and willing to share. Based on those spreads I'm sure people are making maybe 100k net in pocket on a deal done right?
I'm a flipper, landlord, and run a construction company in Baltimore City, MD, by no means are people just plucking mls deals everyday and making a fortune. Most of the 70K+ houses you are talking about have serious structural issues, mechanicals have to be fully redone, and permits take time and money. Most of the time if someone is buying something for 70K it needs 80K+ work done to it, then you have to include closing costs 11%-12% in Baltimore City do to high tranfer taxes, and a 3% subsidy(seller help, its almost guaranteed in Baltimore), and 5% commission, then you have lending costs, property taxes, etc. Then you have to deal with the work from most GCs which is crap, unless you pay up for a good GC, which never happens as investors always go for the cheapest. I get calls almost everyday from out of state investors who are stuck cause GCs ripped them off. Everyone I know, looks at out of staters as the suckers that buy everything no one else wants. If you don't have a great, honest team on the ground you are screwed.
If its still sitting on mls, there exists a reason, usually. Experience with the market helps one understand why. Sale -(Purchase +rehab)= profit. You know the purchase, which of the other two are you sure of? Can you get a great deal off mls? Maybe. Each house is its own adventure, and has its own variables. Maybe the rehab has got to be insane, maybe its located in a crazy place making it unsellable, maybe a million different things.
bought a rental in Baltimore county not too far from the city line. I painted and the minimum when I first purchased to rebuild my cash reserves. The renter I had pooped the bed so i figured it was time to do the required upgrades to keep a good tenant. This not being a “planned” empty time for my rental I didn’t get a lot of time to line up a good GC, all of the good ones are booked up way in advance. I went through 5 different contractors from beginning to end in just 45 days! First one gave a quote then completely disappeared, second I fired for basically being glorified drywall hangers, third wanted to be paid paid hourly promptly did the easy stuff then quit, fourth did one day of work then disappeared, fifth refused to do all the work they agreed to. Honest contractors are key!
@Michael Goad, did you use an MHIC licensed contractor? if you went through 5 contractors, then you either did one of two things, used unlicensed subs(if someone wants to be paid hourly, they aren't licensed) or went as cheap as you could, instead of finding a quality MHIC licensed contractor. You have no one to blame but yourself. You also, let me guess, never showed up to oversee the project or did once a week? I've never heard of anyone going through five MHIC licensed General Contractors on one small job. Again, don't blame anyone except yourself if you want to go the cheap route. A car whose oil gets changed ever 15k miles won't work as well as a car whose oil gets changed every 5k miles, same goes with real estate.
Lol. You’re assumptions are cute. As I stated time frame was tight. First contractor was MHIC. He came to the house, gave me a quote, and then strung me along for 2 weeks. He was a contractor I’d used before and felt comfortable with. I’d call Every day asking for the contract to be sent over. He would promise to send it that night, repeat for 9-11 days and then I stopped calling him. The second set of guys weren’t MHIC and I knew it. To avoid getting burned I held all payments until work was completed. I bought all materials, delivered them myself multiple times a day keeping an eye on progress. When instructions weren’t followed and quality dipped below my acceptable level I fired them. I can go on and on. I took chances. As I said all the good GCs are booked way in advance. The end result is my house came out great and on budget but if I hadn’t been there daily and had taken any of their nonsense as truth I would have been eaten alive.
The return on investment in Baltimore is 44%. Don't be fooled. Where can you purchase a home for less than $70K and rent it for $1,500??
Baltimore is a great city to invest in. Many who are advising you to avoid Baltimore are basing that off of opinion and rumors. They do NOT understand Baltimore real estate. Sure you can invest in Baltimore county but you would be leaving so much money on the table leaving Baltimore city out. What you need on your team are knowlegable/passionate players. I have 3 investors from California who have purchased a total of 15 investment properties. None of the investors have ever step foot in Baltimore. I have investors in Florida, New York and Philadelphia.
I have closed on over 17 Baltimore investment properties in 2018 thus far. Look me up on Zillow, all of this is public record.
Neighborhoods to pay close attention to:
Pig Town, Washington Village (21230 zip code), Reservoir hill (21217), Station North, Remington, Brewers Hill.
And yes Baltimore is a block by block city, which means each block on a particular street could look and feel totally different.
Thank you for posting! I currently work in Baltimore City and grew up there. I've been driving through the 21217 area pretty regularly for about a year and have seen a lot of growth/turn-around in that year. However, it really is block by block.
I'm looking to purchase my first investment property and with the way prices seem to have ballooned very recently, I think I will have to move my ventures from Baltimore County to Baltimore City.
Are there blocks in particular that anyone would recommend over others?
@Melanie Hartmann the list of good blocks or blocks to avoid would be pretty long. It would help if you gave us a little more about what you want, what you are trying to achieve, What kind of funds you have and price range you are thinking.
If you are speaking of speaking of 21217 Reservoir hill is pretty much block by block. South of North Ave. Bolton hill is likely to expensive to be practical. Madison ave or McCulloh are probably the best bets. On Druid hill and Division you better be very picky about which blocks you choose. Just as importantly you need to make sure you are getting a good deal. Don't accept an average deal. With prices going up, particularly in 21217 I don't think and "Average" deal works.
That makes a lot of sense. I was looking into purchasing a 3-unit on Druid Hill. I worked 3 min from the location figuring it might be ok. Drove by it... oh no! So glad that deal fell through.
I guess I'm also wondering what is a good price.
Ultimately, I want to get into apartment complexes but I do not have the capital for that just yet. I'd be interested in utilizing the BRRR strategy locally to help build up funds/equity/experience.
I've been hesitant to pursue Baltimore City, just because I know it is so up and down (and I ultimately did not want to stay invested in SFHs). I also really am only familiar with the Northeast side. So maybe it might be best to invest over that way where I'm more familiar.
@Melanie Hartmann Baltimore city is not so much up and down as block by block. But it is not secret. All you have to do is drive and it is pretty obvious the bad areas vs better areas. You didn't need demographic info, school info or crime stats to figure out Druid Hill ave is not a very good street.
You can do very well in Baltimore just focusing on the north east side.
Thank you Ned! In investing in Baltimore, I would love to jump in on the blocks that are turning around, but I'm not as versed or confident in determining which ones those might be, if that makes sense.
@Melanie Hartmann you don't need to find blocks that are turning around, that means risk. Pick safe solid well established areas and then buy the best deals you can find there.