Downtown Silver Spring Condos

[Brandon Russell]

Hi All,

I'm looking to purchase my first investment property. I'm hoping my first property will be close by so I can learn the ropes. I'm primarily interested in BRRRR properties but I'm just starting my research, so I'm still trying to get the lay of the land.

I live in the Silver Spring (Glenmont) area and I'm aware the pricing out here makes it difficult to find a deal that works for the BRRRR strategy. However, I notice there are lots of condos in the downtown area that are around the $250k mark. These would be more turnkey but I am curious about their viability. I've lived in the area for some time and it seems many of these places are newer and have not appreciated in value. See this listing: https://www.zillow.com/homedet... This particular property is near the train but it is a new construction and seems to always have units for sale. In fact, this one is cheaper than it was in the past. Sounds like something like this would be bad for equity but could be good for cash flow due to its location downtown. Do any of you real estate moguls in the area know why the prices seem to remain flat? Also if I go for a condo how would I check the owner-occupancy rate and see if the building has any restrictions on rentals?

Thanks in advance!

[Jack Seiden]

Quote from @Brandon Russell:

Hi All,

I'm looking to purchase my first investment property. I'm hoping my first property will be close by so I can learn the ropes. I'm primarily interested in BRRRR properties but I'm just starting my research, so I'm still trying to get the lay of the land.

I live in the Silver Spring (Glenmont) area and I'm aware the pricing out here makes it difficult to find a deal that works for the BRRRR strategy. However, I notice there are lots of condos in the downtown area that are around the $250k mark. These would be more turnkey but I am curious about their viability. I've lived in the area for some time and it seems many of these places are newer and have not appreciated in value. See this listing: https://www.zillow.com/homedet... This particular property is near the train but it is a new construction and seems to always have units for sale. In fact, this one is cheaper than it was in the past. Sounds like something like this would be bad for equity but could be good for cash flow due to its location downtown. Do any of you real estate moguls in the area know why the prices seem to remain flat? Also if I go for a condo how would I check the owner-occupancy rate and see if the building has any restrictions on rentals?

Thanks in advance!

 That specific deal actually looks pretty good, condo's have been flat post covid because living habits have changed and with remote work people want more space and it's easier to live farther from the office, that said I do think it's possible with how cheap some condo's have gotten coupled with more people being called back into the office that it might be decent deal. That condo aside, at that price point i'd definitely look more in the germantown/gaitherburg area as with a few exceptions (mostly in d.c.) I really don't like investing in pre 1990's era condos.

[Damon L. Davis]

Hey Brandon, I'm down the street at Georgia Ave and Spring St. I know that building well, and walked through it before the condo conversion was complete. You'll note in the listing the property value in the "Home Value" section it's been literally flat for 6 years. So, you can't force any equity in a condo, history shows the value is not going up to improve your equity, so I can't see how a BRRRR could work. But this could be a nice buy-and-hold for cash flow. Fully furnished it could pull around $2500 or more given its close proximity to downtown SS and the metro. You could rent it medium-term to professionals who flow through our area a lot. That's my model with another condo in the area. However, I recommend calling the building to find out about all of their condo fees. Ask about everything like utilities and any other fee that could eat away at your profit.

[Chris Seveney]

@Brandon Russell

I own a condo on Sligo. Silver spring prices have risen but not considerably because they are still a lower Barrier to entry

@Russell Brazil can shed more light

[Russell Brazil]

Quote from @Chris Seveney:

@Brandon Russell

I own a condo on Sligo. Silver spring prices have risen but not considerably because they are still a lower Barrier to entry

@Russell Brazil can shed more light

 Thanks for the tag.

This particular building is interesting as it is new. I wouldnt buy it because of the size of the units. They are very small in that building. Renters dont move to Silver Spring for small...if they want smallz theyll go to DC.

Someone remarked peices were flat on condos post covid. Prices are actually down 8%ish or so on condos from 2019.

But hey, Ive also bought plenty of condo rentals that wernt great. You got to start someplace

[Jason Piccolo]

Hi Brandon,

As Russell mentioned that is a really small condo. I started out investing in condos in 2004, but I have not seen a tremendous amount of appreciation in the ones I own in Arlington/Alexandria. The appreciation has been tempered by the large jumps in condo fees. The Fairlington investments have been better, but not great with around 6.5% appreciation per year since 2012. Overall, we have had better luck investing passively with syndicators in apartments, car washes, self storage and ATM's where we get monthly cash flow and great depreciation benefits. 7-10% cash flow per year with 16-19% IRR.