Rental Property Investor · Queens, NY City · Member since 2017 · 18 posts · 10 votes
Hi Fellow BP!
I am new to BP and looking to invest in multifamily properties in Baltimore/Maryland. I have reviewed online several on-market properties in Baltimore (near John Hopkins University) and outskirts. I ran back-of-envelope numbers on the COC and IRR for those properties (one was a many-contiguous row homes) and found the numbers attractive. Is Baltimore and Maryland attractive for multifamily investments? I read the economic reports for the 2020 outlook and they do not read promising. However, I am not familiar with the area and there must be other risks/drawbacks to account for this. Has anyone successfully invested in multifamily properties in Baltimore and Maryland in general (except near DC area)?
@John Paniagua performing properties in Baltimore are going to be listed at prices that don't make much sense right now. If you are buying value add properties (rehab and upgrade) then there may be some decent deals.
Baltimore city is a tough market in that every zip code has good and bad areas. Now I am talking about Baltimore city. Baltimore county will cost more but generally be easier to evaluate. Are you local? It is not hard to see why some areas are good and other areas just 1-2 blocks away are bad if your drive those two blocks. However from afar it is difficult to make that distinction.
Assuming the type of investing approach you are referring is active investing and you are talking about small multifamily [2-4units], I can say that we have successfully invested in Baltimore, MD (city).
Baltimore, as you may or may not know, is very block specific and zipcode-centric. Consequently, you have to be aware of that market dynamic to ensure success.
21231 and 21224 are good zip codes and are in proximity to John Hopkins.
Thank you for the feedback. I am currently looking at 50+ unit property in zip code 21205 and 20+ units in 21216. I will continue reviewing Baltimore. What is a good source to determine which zip code is attractive for investment?
Secondly, have you tried reaching out to local property managers yet? If you can find the right local agent, they can be very helpful BUT oftentimes don't have the full story; they work with clients up until the closing, not during the day to day management like the PM. PM's are also generally forthcoming with where, or where they won't, manage properties which can be extremely helpful.
When you reach out to PM's, find the reputable ones that have been around 3+ years. Also, I find it helpful when folks are upfront with their intentions, don't dangle a carrot of potential business until you have business to be had. Keep it simple "I am trying to evaluate a couple of properties in XX area and trying to get more information on the types of residents you typically see there". Can follow up with "where do you prefer to manage?" or "where are your clients currently purchasing properties?".
@John Paniagua performing properties in Baltimore are going to be listed at prices that don't make much sense right now. If you are buying value add properties (rehab and upgrade) then there may be some decent deals.
Baltimore city is a tough market in that every zip code has good and bad areas. Now I am talking about Baltimore city. Baltimore county will cost more but generally be easier to evaluate. Are you local? It is not hard to see why some areas are good and other areas just 1-2 blocks away are bad if your drive those two blocks. However from afar it is difficult to make that distinction.
What is a good source to determine which zip code is attractive for investment?
Zip Codes are too large of an area to go by when looking for investment opportunities in Baltimore. All of them, with the exception of the over priced zip codes that abut the Inner Harbor, will have "good" and "bad" areas. Most of the time you can get away with focusing on, or avoiding, certain neighborhoods, but even then you have to be careful not to be on the wrong block. Investing in Baltimore is tricky, and boots on the ground is a must if you are not familiar with the city.
To be honest, what you call promising and what we call could be different. I know numbers are numbers but it seems like out of state investors settle for much less, but if it is a market deal, probably it is expensive there days.
It numbers make sense for you, Baltimore has a strong rental market, but I have seen enough multifamily scenarios that out of state investors are burn out because of the property managers.
if you provide details, people can give better ideas.
Thank you both for the feedback. I am looking to buy value-add properties in the NW area of Baltimore, like Garwyn Oaks, Mt. Holly, Mandowmin, Walbrook, etc. I am from Queens, NY and looking to eventually leave the city. I am in process of finding a good property manager from that area through referrals.
I am looking at NW Baltimore section and see several 20+ unit properties there for negotiating. Do you know of where I can find property managers other than referrals? Who can I go to get referrals for property managers in NW Baltimore? Thank you again for your input.
More details on who would you recommend in Baltimore, MD for property management:
Ideally, looking for a property manager who owns company and their own real estate. A manager who is familiar with various neighborhoods in Baltimore and has good understanding of the city's economic drivers and job growth potential.
Property managers will be interviewed with goal of looking for a long-term partner to become team member. Property manager will have the prospect of ownership interest in the partnership to ensure the team's objectives are aligned with the end goals.
I really appreciate your input on this and thanks again! Look forward to returning your help!
I am looking at NW Baltimore section and see several 20+ unit properties there for negotiating. Do you know of where I can find property managers other than referrals? Who can I go to get referrals for property managers in NW Baltimore? Thank you again for your input.
Best Regards,
John P.
Ned Carey has a blog about property managers, you might want to check that out. Since I manage my own, I have very limited knowledge on Property managers.