Baltimore - a path to never-ending pain
Anyone considering investing in this town i just wanted to give my 1 year of experience and advice. Bottom line, don't do what i did.
1) Don't buy through a turnkey provider -they promise they are doing amazing renovations of quickly gentrifying neighborhoods. FALSE - No neighborhoods are quickly gentrifying in Baltimore. Everything works slow and the city govt is completely inept at a minimum and possibly worse. Further it could take MONTHS after closing for your new home to be rent ready as the city seems to slow roll any new permits for anything. I was 6 months before one home was even ready to rent.
2) Don't believe it when anyone tells you "Zillow is wrong and those photos are old" - no they are NOT. A burned out street on Zillow is still a burned out street today.
3) Dont believe it when they say your property taxes will be low for 3 years - its a luck of the draw when the city wants to reassess your home and it could be THIS YEAR and cause that $400 to skyrocket to $2,000 or maybe - if you are super unlucky like me - $5000
4) Related to #3 - BUY PRE-RENOVATION not after, so the sales price does not trigger a re-assessment and cause a 522% increase overnight in property taxes from $800 to $5000 within the first year.
5) watch out for SUPER HIGH UTILITIES AND other city FEES! Water is $150 / month! Annual rental licenses are $200, the city requires annual inspections etc. The list goes on and Baltimore knows how to stick it to you.
6) Section 8 tenants are not all roses - in one house this year i had a break-in that turned out to be the crackhead boyfriend breaking down the front door and punching holes in walls. In another home my tenant refuses to pay the $200 / mo water bill, thereby cancelling out my tiny cash flow profits and i have to pay it. I'm told she cannot walk away without paying it eventually (or risk losing her "voucher" .. but i'll have to take her to civil court for it.
7) FEAR THE EVICTION PROCESS - in my only non-section 8 house i have a professional scammer living. I blame my PM for putting him there but upon arrival he somehow conned the PM for a free month, then proceeded to NEVER PAY A PENNY IN RENT. To get someone out of your house requires you take them to court 5 TIMES before you have the right to NOT ACCEPT their measely 1 month's rent from 4 months ago, despite the fact they already owe you 3 more months. It is now September, I have been fighting since Jan to get this loser out unsuccessfully. He owes $6,000 at this point plus the water bill. I will never see it.
8) ALL YOUR CASH FLOW WILL BE EATEN UP - whether its the City taking it from you, your PM, or your renters and the courts, all you will get is pain.
bottom line - run from inner city area Baltimore. I just wish i could have told my future self this 1 year ago. Cheers
As a Baltimore investor, I am sorry to hear you had a bad experience. I ve been only investing in Baltimore and I mostly have positive thing.
I thing your main problem was ( as you mentioned) going with turnkey providers. I don't know you but I never understand why people fall into it. Usually they offer one or two year rent guarantee, I guess that is quite attractive when you don't know the city.
Baltimore has multiple layers of properties and if you truly invest in mid range (not like those turnkey companies mid range) you should be fine but I assume you bought in a bad neighborhood, paid top dollar and later realized you made a mistake which is a very common story with a lot of people who invest with turnkey providers.
As a Baltimore investor I can say that it is not just the city, it is the company and investors who wants to make the big buck by investing 100K or less.
I hope you find better deals in the future and you should definitely reach local investors in Bigger pockets to double check. Most of us are very helpful and dont mind answering questions.