Investor · Northern Virginia · Member since 2020 · 16 posts · 10 votes
Good Day BP! I almost feel silly asking this, but here goes...
I will be moving overseas very soon & my company is picking up the tab on the new place. Due to that & a couple other factors, i will have some extra cash to be used in our buy & hold investment strategy in Baltimore. I am only interested in turnkey (or just carpet & paint kinda places) primarily because we will be really far away & just haven't built a network of trusted professionals.
Right now, here are the numbers:
2br SFH - $600/mo cash flow - 14% cap
3br SFH - $550/mo cash flow - 12.5% cap
$6k/mo allocated for ongoing RE growth.
Knowing what you all do, what would you recommend for someone in my shoes?
Hi Brian,
I wouldn't buy under 100k arv places at all and for something stable go upto mid 100s in the Baltimore area. That way you can get reliable property management and expenses won't eat you up. I'd try to get something outdated with good systems like no old galvanized pipe or other stuff that will not need immediate replacement. New stuff is going to up the price tag. Are your current properties in the suburbs or the city? What is your plans with pm?
Looks like great options regardless. Cap rate is one way to look at it, but with the numbers so close to each other, which property would give you less headache?
Numbers aside, I always prefer 3 beds (3/1.5+) since it’s the sweet spot for growing and shrinking families.
I have some property management contacts if you need a greater Baltimore area referral
Sorry I wasn’t clear. I own those two right now, and would buy another one every few months, if they were available.
Ah got it. In that case I would keep buying at a minimum 12 cap for properties that need a little bit of work (paint and flooring). Sweet spot could be 3/1.5 townhomes in a C class neighborhood.
This is my advice for a hands off investor who has trusted contacts who can do the basics (install a lockbox, paint, have property pass inspection etc.)
Hi Brian,
I wouldn't buy under 100k arv places at all and for something stable go upto mid 100s in the Baltimore area. That way you can get reliable property management and expenses won't eat you up. I'd try to get something outdated with good systems like no old galvanized pipe or other stuff that will not need immediate replacement. New stuff is going to up the price tag. Are your current properties in the suburbs or the city? What is your plans with pm?
Ok hopefully its the better part of 21213. The bad part is horrible. I have managed in Belair Edison with decent luck. Places with finished basements. They always paid rent but the water bill was dificult for a good amount. I would expect more of the same for that hopefully you are budgeting for that as it will hit cash flow in the city. I wouldnt go into rough 21213. If you have aready you have been lucky. I have seen investors think they can handle the hood crash and burn thanks to tenant quality which is impossible to get. Usually 1 dud tenant will negate the positive of the other 3 and cash flow will be negative. If your pm takes that good luck bc you will need it.
@Tim Jacob The trick now is deal flow. 2 years ago you could pick those up in Belair Edison all day. Now you need to find one that needs some work in order to start off with instant equity. I am sure some folks have some ideas of where that next area with similar fundamentals may pop up.