Real Estate Investor · Arlington, VA · Member since 2009 · 16 posts · 0 votes
Hi All,
I am looking at some rental properties in Baltimore. Specifically, there is a 3 unit with a potential for a 4th currently fully rented at $2100/mo and asking 140k for it.
What is attractive is that for another 10-15k you can add another unit in the basement and parking to get another 700/mo for a total of 2800/mo for a total price of 140-150.
The reason this deal exists is because it's a pretty rough area of baltimore. Some boarded up homes on the block-- stuff like that. I would hire a property management company to manage the property.
Has anyone had experience landlording (either personally or through a property management company) in rough areas of a city?
Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes
17y
I would never reccommend this to a newbie, or an absentee owner. It will be hard to have a good exitstrategy. Many don't want anything to do with boarded up druggie areas. I'm one of those. There are enuff problems with renters without pileing on more negatives, imo. Rich in Dallas.
Real Estate Investor · OH · Member since 2008 · 4k+ posts · 1k+ votes
17y
It depends on your definition of "rough". I have some rentals in low income areas that are not war zones. In other words, there are a lot of criminals and druggies in the areas, but not daily shootings or gang activity. I feel safe there, being properly trained and prepared to defend myself at all times. I would not send my wife to those areas day or night (and she would wouldn't step foot in those areas). There are frequent drug busts and occasional shootings/stabbings in the area but it's normally scumbag on scumbag violence (typically over a drug deal gone bad).
Low income tenants require more hands-on management than tenants a little farther up the food chain. You'll need a very good management company that is experienced in low income rentals if you're going to hire a manager.
Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes
17y
I would never reccommend this to a newbie, or an absentee owner. It will be hard to have a good exitstrategy. Many don't want anything to do with boarded up druggie areas. I'm one of those. There are enuff problems with renters without pileing on more negatives, imo. Rich in Dallas.
Attorney · Raleigh, NC · Member since 2008 · 4k+ posts · 1k+ votes
17y
I like areas that are low income but not too "rough". I've found a niche tenant for these areas that are perfect - folks coming back from Iraq/Afghanistan who are starting off here and want to keep costs down. I give them a military discount on the rent (like 50 bucks - I buy with enough spread to cover it), they have been very good on paying their rent, the local losers tend not to screw with them and any definition of "rough" I have they have no problem with.
Investor · Chantilly, VA · Member since 2008 · 9 posts · 0 votes
17y
Tim,
How and where do you find folks coming back from Iraq/Afghanistan? I have few rentals in Baltimore city adn some of them are in rougher neighborhoods.
Real Estate Investor · North Carolina · Member since 2008 · 1k+ posts · 483 votes
17y
Jon - you may find it difficult to find a management company for your 'rough neighborhood' rental. Which means YOU get to manage it. Check out MikeOH's website for his day-to-day adventures in that area. Those kind of 'adventures' aren't for everyone!
Make sure you are getting FANTASTIC cash flow because unless the neighborhood turns around you will not see much appreciation, if any (even from your 'forced appreciation improvements'). Consider that once you buy this place, you may be in it for a long time, or else have to sell it at a steep discount.
However, for many investors just starting out with limited resources, this is one viable path. You will certainly learn enough to write a book!
Real Estate Investor · Arlington, VA · Member since 2009 · 16 posts · 0 votes
17y
Thanks a lot eveyone. I think, given the feedback, I am going to stick to my home area of northern va. It is much more difficult to find good cash flow here than it baltimore, but ultimately I'll feel more comfortable owning property here.
Select a State · Member since 2009 · 156 posts · 17 votes
17y
I know nothing about Virginia, other than the location of Alexandria on a map (South of DC). Based only on this snippet of information, I was thinking you might look an hour south in smaller towns/cities of Virginia. Around here, the older cities/towns have their low income sections that aren't nearly as rough as cities. Maybe you can get a steal in there.
Just an idea...maybe a bad one. In any event happy hunting!
Edit: I was thinking Alexandria not Arlington. In any event, maybe look for low-income rentals in smaller cities is the gist of my suggestion.
Real Estate Consultant · Baltimore, MD · Member since 2008 · 22 posts · 0 votes
17y
Jon, I was a landlord here in Baltimore years ago. In rough areas It's not worth the headache. Today, I would hire/pay a property management company 6% to 10% of rents. Contact me If you still need a referral to a good company.
I Wholesale Deals in MD 40% to 50% of ARV to 'Cash or Hard Money Loan' Buyers (soon in DC & VA ).
Multi-Family 7br/4ba (3-Unit/poss 4th) Semi-Det. 3060 Sq Ft. Furnace in each unit. On Separate Gas Meters. Only $129k.. 1st Come w/$5,500 + POF.. Seller select Title Co.
btw Where is the rough area you were looking to buy in?