New From MOCO Maryland!

22 Replies

I accidentally thread jacked another members post, rookie mistake!!  Let me try again :)

Hello All! I'm new to BP but have been reading quietly on forums and listening to the webinars! I'm fairly new to REI but as it turns out I was an investor with out even knowing it (house hacking)! Now I want to get my feet wet with multifamily investment ASAP! I'm now residing in Bethesda, MD but work in Gaithersburg MD. I'm looking into investing in Hagerstown and Frederick area as my research and from other BP members have suggested allow for good cash flow with lower capital investment.

With that said are there any RE agents or wholesalers you recommend for those markets? Let me know if anyone wants to meet up and chat! Any advice, referrals or comments will be rewarded with beer (if that's allowed on BP)!

Happy Friday ALL! 

Welcome to BP @Sovat C. .  Im right next door to you in Rockville.  I actually own two properties in Frederick and really like the market.  Id be more than willing to help you out buying in Frederick. Hagerstown I will list properties, but I wont do the buy end of a transaction there (it's just too far). 

I think Frederick, as well as MoCo, DC, Fairfax, Arlington, PG etc...are great areas to invest in.  I would not personally invest in Hagerstown as I feel it is too risky of a market...but that being said there are plenty of other people who will invest there.  

Hello

I'm a new investor as well, and currently looking at a few properties out in Hagerstown 

Zip Code 21740

Russell - Can you please tell me why you don't think its a good area to invest in? 

Any insight is greatly appreciated. 

TY

Mike

Originally posted by @Michael A Rytina :

Hello

I'm a new investor as well, and currently looking at a few properties out in Hagerstown 

Zip Code 21740

Russell - Can you please tell me why you don't think its a good area to invest in? 

Any insight is greatly appreciated. 

TY

Mike

 High poverty rate, poor tenant quality, very old stock of housing (which in itself isnt bad since I like DC) but combine that with poor tenants and you have high cap ex and repair costs, I anticipate much higher than normal vacancy and non payment rents in Hagerstown, virtually no appreciation and possible even risk to initial capital due to depreciation, .....just walk around the downtown there,...there is broker glass and garbage everywhere, and people high on meth walking around......really I just cant see any reason to invest there. The promise of a high return is just a mirage when you factor in all the costs. Id much rather be in a safer cash flow area that has some appreciation potential like Frederick, or just be in stronger appreciation areas with a little bit of cash flow like MoCo, or just straight appreciation plays like DC.

@Sovat C. Welcome to BP!

You had me at "Beer", I'd love to meet up with you over a beer sometime at a Moco brewery or deli and talk about the Montgomery county market. I'm located in Kensington.

Best of luck to you in 2016!

Hagerstown doesn't seem as desirable anymore for those who are risk adverse which I am!

@Russell Brazil - make sense now!  I would love to meet up and we can chat about Frederick RE!  I will PM. 

@Brett McCurdy - beer and real estate, my two loves!  I like MoCo too but it's so darn pricey!!! I will PM as well! 

I am also new in RE, and now living in Rockville. Frederick looks a little bit far as real estate backyard for me ( more than 1 hour drive). I prefer to MoCo area. However, the Capital rate of rental of single family house or town house in this area seem not very high, which kills most of benefit if you are not rich in cash. Anybody would like to talk about your policy in RE? I might consider flipping or do fixer upper.

Originally posted by @Frank Eimiller:

Welcome welcome welcome!

 Also I forgot to mention-- if you're not listening to the BP podcast (they're released weekly) you're doing it wrong. Podcast guests give so much great info, check it out! 

Totally disagree with the idea that Hagerstown is a bad area to invest. I drive through downtown everyday multiple times and even walking around I don't see the problems that are suggested. I have helped mutiple investors purchase in and around Hagerstown and and with sound stratagies and solid processes you can create excellent cash flows.. Far better than you can find in other Eastern areas of Md.

@Sovat C. welcome to BP. I'm right up the road from you (typing this from rainy Urbana) and think Frederick and Hagerstown are great areas to invest. With that said, we are comparing apples and oranges. If you want much lower cash flow, bank on appreciation and want something closer to home...I would buy rentals in Frederick. If you want more cash flow, very little (if any) appreciation and a little further away...I would buy rentals in Hagerstown. Both areas have their pluses and minuses. Hagerstown has rough areas and Frederick does, too. My rentals are all in the Hagerstown market and our flips are in Frederick and Hagerstown.

I do have access to two townhouses all ready fixed up, renovated and cash flowing in Frederick if you might be interested. We are looking for a cash sale of the two (package deal :)

Hope that helps and feel free to call or email me anytime if you want to chat more. 

-Mike

I've been in Hagerstown a year and a half now and am up to 13 units. I live in Frederick and it is almost too far. Bethesda? DC? Forget it. Unless you're going to come out the gate with 25+ units it is not worth your time. You will be wondering why you worked really hard all week to sit in traffic, to then sit in court, to chase a $450 rent payment. The only way to make it work there is either living in Hagerstown or ramping up the volume so you visit three units that are being worked on, attend 3 court hearings when you go, etc.

All of the detractors that are there absolutely exist. It's a horribly mismanaged city that is definitely poverty level. You will not be dealing with professional people. Picture a tenant with their ceiling caved in, calls the city to get code enforcement to harass you about that repair, you finally find someone who can do the work and is willing to show up and then the tenant refuses access to the repair man. Who knows what craziness results in that sort of thought process - I'm sure they think they're building a claim against us (other tenants have) and then they get that deflated look when the judge tells them to deposit the rent they don't have with the court. Gone two weeks later - every time.

It's a tough market and the returns when you get through with the vacancy are around 12%. That's a great return, but you have to work for it. Fight for every dollar of rent. When your tenant is fighting all month to come up with that rent they don't part with it easily. I'm lucky to have my girlfriend working on it full time - not free labor but we are doing a better job than the property manager I tried out for a few months to try and get it off your plate.

I have two rentals in Frederick. They are great and do around the same return but there's not a lot of volume at that return. To grow the portfolio here I'd have to take an 8-10% return. This is my retirement income, I want to retire soon and be as comfortable as possible - 2% matters for me. I wouldn't even come from Germantown to case it though.

Welcome to BP @Sovat C. . If you'd ever like to come in and visit with my property manager so you can get more intel on Frederick and better understand what the challenges of Hagerstown are drop me a note.

@Mike Webb Let's get together at my office this week so we can finally have our meeting, our vacancy rate ran high as we got into the holidays as soon as it's fixed we're gonna start working on getting this thing to 30 units. 

@JR T. - shoot me an email, text or call and we can get something set-up. Hagerstown isn't the nicest but I don't seem to have quite the experience you are having, by the sounds of it.

I would be interested in talking further.

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