Rental Property Investor · Towson, MD · Member since 2015 · 49 posts · 27 votes
Calling all investors in the 21215 area of Baltimore city, I need your expertise!! An opportunity has come my way recently but I just don't know the area well enough.
A friend of mine is selling his rental property on the 2400 block of Shirley Ave. He is selling it to me for 70k. It is a true 4BR and 2 BA. The property needs 25k at most in upgrades ( electric, roof, plumbing, and hvac replaced 10 years ago).
He said he was getting $1600/mo section 8 for the house from the same lady for the past 9 years.
No Board-ups on this block
A house on cold spring just sold for 150K (which is a very busy main road) And another home sold in the area for 170 (an outliar)
I believe once I renovate it the house will appraise for 145k at least. I would be using the BRRR strategy so this would work very well.
What do you think bp, should I pull the trigger or is this area just a dead zone?
@Gabriel Ehrlich Without doing any research, my gut tells me the rent and price are too high. However numbers don't lie, If it is an honest $145 ARV that seems to be a reasonable deal.
@Gabriel Ehrlich Without doing any research, my gut tells me the rent and price are too high. However numbers don't lie, If it is an honest $145 ARV that seems to be a reasonable deal.
I own a house on the 2400 block of shirley. 3 bed Rented market for 1050. Is yours on the hill side or flat ground side? Big difference. 1600 is reaching and not to be counted on. You lose that tenant, replacing it is going to be difficult for that sort of money. Section 8 Has been dropping rents for a while now. Figure if its super nice youll get Maybe 1400+ with a 4 bed voucher.
@Ned Carey There aren't really any good comps in the area for a house this size and the rentals I do are high quality (granite, new cabinets, tiled bathrooms, hardwoods, modern finishes etc.) I see one on coldspring that recently sold for 150k in just a few days but other than that there isn't much going on in the area. As for rent, there aren't any rental comps on the mls and few things on zillow. Rentometer has some comps but they are on the other side of Reisterstown rd which is a whole different ball game. My friend selling it is an agent and he says the the value of the house once i make a few cosmetic updates is at least 145k. I need another opinion.
@Jeffrey H. This one is a few houses down from the pall mall - Shirley ave intersection. Do you like the area for rentals there? Is it tough getting a section 8 tenant over there (even if the house is nice?)
@Ozzy Sirimsi I saw those as well but this is a true 4 bedroom house (above grade) and its in good shape (systems are all newer). Wouldn't this be taken into account?
Just negotiate a little, bring him down, but I agree that 1600 rent could be little high if you lose your tenant. If you keep her couple years, then good to go.
@Ozzy Sirimsi Since I would be going the sec 8 route, I am a bit concerned about getting a tenant in this location quickly. I was there yesterday and it seems like a quiet block with lots of greenery. I don't want to pass on a potential deal but at the same time, I'm not so sure it is one. Even at 1400 mo rent, this house should cash flow ~$550 (not including vacancy and maintenance). Question is, would the house appraise high enough to pull out my money... and the lack of "good" comps is what has me concerned.
But your nut would be lower and youd get your money back in a higher monthly cash flow. Again...is the house on the hill or on the flat ground side of the street? P.s. If you have a 1600 a month sec 8 tenant in place, why are you doing 25k in work?
@Jeffrey H. I didn't really pay much attention to the hill vs flat, so I cant really say until i go back. It's 2483 shirley - perhaps you can tell me what the difference is on hill vs flat side?
The tenant with the 1600 MO sec 8 moved out several months ago.
I am putting in 25k because I need the house to appraise high in order to pull out my money. Additionally, since that area isn't exactly the most desirable, i figure i need to make it nice in order to draw voucher tenants.
@Gabriel Ehrlich lots of steps to get to the front door om hillside. Yours is on the flatside. Aka more desirable. If your house is "nice". youll rent it. A 4 bed voucher might grab approaching 1500 in this area, if i guess. Now figure what "nice" means in sec 8 world and if this house is that.
@Jeffrey H. If i get 1500 in rent, this house is a deal. Additionally, my friend just took this town to 65k. I think at this price its a winner. Thanks so much for your input.
@Gabriel Ehrlich if you aren’t looking to invest in the property I’ll take that deal. I know some investors who farm in this area but obviously have to do some negotiating
@Jeffrey H. Well, I suppose there is always a risk when dealing with section 8. However, the lowest amount for a 4br voucher is 1480 (correct me if I'm wrong). Even at that amount, this one makes sense. 4 big BR upstairs and a massive open kitchen/dining room.
@Jimmy Samai I appreciate the offer, but I'm scooping this one up for myself. At 65k, it's a deal.