Out of Town Investor Looking at Baltimore SFHs

5 Replies

Hey everyone,

I'm a real estate investor from NYC looking to purchase a single family home in Baltimore to force appreciation through renovation and establish solid cash flow through renting. 

I've been looking at the neighborhoods around Charles Village (Barclay, Harwood) and it seems like I'd be able to acquire a property for less than $60K and fix it up for less than $30K. I'm ineligible for financing (I currently have two mortgages on properties in DC), so I'd have to go the all-cash route and possibly work out financing down the road. I'd be using contractors to do the renovation and already have some contacts (but would love to get some additional recommendations)/

A realtor I've consulted with has told me that a good perimeter to work in is bounded by St. Paul St. to the west, Greenmount Ave. to the east, 29th St. to the north, and 20th St. to the south. I'm curious what everyone's thoughts are on this area (i.e. any experience living/investing there, what the typical renter is like, what is the market rent for a 3BD SFH, prospects for the future of the neighborhood, etc.) and if that seems like a decent strategy.

From an outsider's perspective, it seems like Baltimore is on the upswing and that it's a wise medium-term investment, but I'm willing to concede that my experience is limited to DC which is a fairly unique case. Let me know what you guys think when you get a chance. Thanks in advance!

You can still cash flow anywhere in that area, but within that threshold,  the properties to the west (closer to St Paul's) and north (closer to 29th st) will be the most valuable as you'll be closer to JHU. Nothing wrong with the west side of St Paul's or north of 29th. There is a noticeable decline in home values as you get closer to greenmount and south of 25th St.

@David Johnson my guess would be that the repair number is on the low side. Remember these are very old houses.  They could have 1950s or earlier; wiring and plumbing, and probably radiators and no AC.

i am not saying avoid the area, just be careful with your estimates.

I don't know that area specifically but a gut renovation is going to be $50k absolute min. and that is for rental level. If you are talking about some of the large 3 story homes you could easily spend $100K+. 

The area is on the upswing, but it can still be a rough area. My gut feel without really looking at numbers is the area is better for a flip than buy and hold.  I suspect I would be in for much more than I would want to be for a buy and hold. Of course that does not mean it is not right for you. It could be a home run if the area continues to develop, due to appreciation. 

@David Johnson , @Ned Carey is right. When we first came to Baltimore we were blown out of the water on our rehab estimates because so much of Baltimore is older housing stock. Have a couple GCs come with you to look at a couple deals and you'll start to get a feel for some of the line items that will need to be replaced that quickly add to your rehab budget.

We tend to stay in nicer areas in Baltimore and have looked at gut projects ranging from $80k to $130k. Granted these are nicer areas than the one you're looking in, but it at least gives you a data point.

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