Hagerstown Maryland

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Hagerstown Maryland

Account Closed
Sunnyvale, CA · Member since 2016 · 71 posts · 21 votes

Hey Investors,

I'm looking for a place to invest in Maryland, and Hagerstown might be attractive to me.  There's good job growth, population growth, falling house prices, low vacancy, and reasonable taxes.  Does anybody here have any experience in that area?

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Andrew Michael
Lender · Frederick/ Falls Church DC, Maryland & Virginia · Member since 2014 · 794 posts · 612 votes
9y

@Account Closed mentioned the tenant base can be an issue.  Make sure you have a fair and diligent screening process in place.  

Another thing to think about is where in Hagerstown you want to invest.  All parts of Hagerstown are not created equal and the city is a pain to work with (think uneducated people in official positions).  If you are going to invest within the city limits I would be very picky about where you pick up rentals.

I do not want to paint a doom and gloom picture.  There are some really nice streets and some great people just understand the overall market you are getting into.  Hagerstown is a cash flow only play.

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  • Stanley Dean
    Rental Property Investor · Burtonsville, MD · Member since 2014 · 69 posts · 9 votes
    9y

    Hey Chris-  Even I was exploring the area to get  a good feel for it.  But I was told that rental go typically 1600$ for 3br/2 bath BUT if u got 4 house 1 of 4 might end up being an eviction that u need to be at the courthouse for is what I was told by an experienced investor.  Just wondering how did you determine the factor or gauge that such elements good job growth, population growth, low vacancy were prevalent in Hagerstown.

    I have been trying to determine the source for indicators or how to evaluate the submarket and know the market cycle for regions.  Till now no one has been able to provide a straight answer or feedback as if its kind of buried but will love to get any insights.

    0Reply
  • Andrew Michael
    Lender · Frederick/ Falls Church DC, Maryland & Virginia · Member since 2014 · 794 posts · 612 votes
    9y

    @Account Closed mentioned the tenant base can be an issue.  Make sure you have a fair and diligent screening process in place.  

    Another thing to think about is where in Hagerstown you want to invest.  All parts of Hagerstown are not created equal and the city is a pain to work with (think uneducated people in official positions).  If you are going to invest within the city limits I would be very picky about where you pick up rentals.

    I do not want to paint a doom and gloom picture.  There are some really nice streets and some great people just understand the overall market you are getting into.  Hagerstown is a cash flow only play.

    7Reply
  • Robert Fountain
    Investor · Greencastle, PA · Member since 2016 · 67 posts · 24 votes
    9y

    I agree with @Andrew Michael.  I have 2 rentals in Hagerstown and they do quite well but I'm very picky about where I buy.  I stick mainly to the North End which, for me, produces better tenants and better rent.

    If you invest within the city limits, the city will get you on a yearly licensing fee, plus inspections. and they ALWAYS find something in the inspections that you'll have to fix before you can rent it. If your unit was built before 1978 it better be certified lead free before you buy or you'll be dealing with a lot of red tape from the city there as well.

    In addition there are ordinances in the city that will penalize you (the owner) if your tenants have run-ins with the law.

    5Reply
  • Stanley Dean
    Rental Property Investor · Burtonsville, MD · Member since 2014 · 69 posts · 9 votes
    9y

    Thank you @Andrew Michael and @Robert Fountain you guys gave great insight.  Just wanted an insight from you Clever  professional are there sites that helps to narrow down by street within a submarket or region to help gauge where to buy and also site which can give some climate indication for the  market cycle for the region.  Andrew if you got any wholesale deals for the Damascus / Laurel /Bowie/ Burtonsville/ Hyattsville/ Beltsville region please inbox me.

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  • Andrew Michael
    Lender · Frederick/ Falls Church DC, Maryland & Virginia · Member since 2014 · 794 posts · 612 votes
    9y

    @Stanley Dean actually on my way to a closing now.  Will get in touch later today and get you added to our list.  I can help you with the above areas.  

    Thanks

    1Reply
  • Stanley Dean
    Rental Property Investor · Burtonsville, MD · Member since 2014 · 69 posts · 9 votes
    9y

    Thanks Andrew looking forward to connect.

    1Reply
  • Mike Webb
    Real Estate Investor · Hagerstown, MD · Member since 2013 · 276 posts · 107 votes
    9y
    Christopher Pepper - I invest in Hagerstown and can answer any questions you might have about the Hagerstown market. I also wholesale and can keep you in mind if you let me know what you're looking for. Look forward to talking with you.
    1Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    9y

    My thoughts on Hagerstown are well known to those in our area...I think it's a s**thole. But I have friends such as @Andrew Michael who invest there.

    Median household income there is like $35k. It's one of the poorest parts of the state.

    [email protected]301-893-4635Podcast Guest on Show #192
    District Invest Group546 Reviews
    WebsiteView Page
    2Reply
  • Account Closed
    OP
    Sunnyvale, CA · Member since 2016 · 71 posts · 21 votes
    9y
    Stanley Dean , I looked at data on the census. You can find it at http://factfinder.census.gov/ I compared it to average values for other "urbanized areas".
    0Reply
  • Account Closed
    OP
    Sunnyvale, CA · Member since 2016 · 71 posts · 21 votes
    9y
    Stanley Dean , also thanks for the heads up on the tenant base. Andrew Michael , thanks for the tips. I am looking for a mix of appreciation and cash flow, so maybe Hagerstown isn't quite a great fit. Robert Fountain , that's great information. What kind of problems has the city caused for you? Russell Brazil , telling it like it is!
    1Reply
  • Account Closed
    OP
    Sunnyvale, CA · Member since 2016 · 71 posts · 21 votes
    9y
    I'm looking for an area (in or near Maryland hopefully) that has a good rent to price ratio and some chance to appreciate. What areas in Maryland would you guys suggest?
    0Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    9y
    Originally posted by @Account Closed:

    I'm looking for an area (in or near Maryland hopefully) that has a good rent to price ratio and some chance to appreciate. What areas in Maryland would you guys suggest?

     Frederick will give you a little bit of both but not a ton of either.

    In the most general sense DC offers amazing appreciation and bad cash flow, and as you move further away from the city appreciation levels drop and the price/rent ratio gets stronger.

    [email protected]301-893-4635Podcast Guest on Show #192
    District Invest Group546 Reviews
    WebsiteView Page
    2Reply
  • Account Closed
    OP
    Sunnyvale, CA · Member since 2016 · 71 posts · 21 votes
    9y
    Also, for those who invest in multi family units in Hagerstown, what are some typical cap rates you've achieved?
    0Reply
  • Ray Arends
    Real Estate Investor · Charles Town, WV · Member since 2015 · 35 posts · 12 votes
    9y

    In my limited experience, 10 caps are easily achievable. As always, buy right!

    0Reply
  • Ned CareyPro Member
    Moderator
    Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
    9y

    @Account Closed I don't know that market at all. However if it is true there is both good job growth and population growth, that that may mitigate some of the negative concerns expressed here.

    0Reply
  • Ray Arends
    Real Estate Investor · Charles Town, WV · Member since 2015 · 35 posts · 12 votes
    9y

    @Russell Brazil I appreciate your insight into the Hagerstown market. In my opinion,  a 35k annual salary is an ideal candidate for one of my  one bedroom units. They are not potential homebuyers and will rent until their income increases. BTW, I enjoyed your appearance on the Bigger Pockets podcast, a stellar appearance from someone in my area. Well done!

    1Reply
  • Robert Fountain
    Investor · Greencastle, PA · Member since 2016 · 67 posts · 24 votes
    9y

    @Account Closed. Luckily I haven't had any problems with the city.  I have great tenants and my units are certified lead free and/or built after 1978.

    1Reply
  • Ray Arends
    Real Estate Investor · Charles Town, WV · Member since 2015 · 35 posts · 12 votes
    9y

    @Robert 

    @Robert Fountain I concur with your assessment of the north end of town. Hagerstown transitions quickly from urban to suburban north of Fairground Ave as one drives north on Locust St. 

    1Reply
  • Ray Arends
    Real Estate Investor · Charles Town, WV · Member since 2015 · 35 posts · 12 votes
    9y

    @ Christopher 

    @Account Closed before you buy anything spend a couple of hours driving the city. Look at anything you want to buy in person. I made an offer on a six unit in Hagerstown sight unseen and by some stroke of luck my offer was declined. The numbers looked amazing but when I took the time to view the property it was not something I wanted to be associated with. The property later sold for my offer price, 10k under asking. Whew!

    1Reply
  • Austin Irwin
    Rental Property Investor · Chambersburg, PA · Member since 2016 · 9 posts · 0 votes
    9y

    @Robert Fountain could you recommend any areas of town to target for good cash flow/low equity rentals?  My wife and I toured several homes around Burhans on the west side of town yesterday and were left unimpressed.  Thanks.

    0Reply
  • Robert Fountain
    Investor · Greencastle, PA · Member since 2016 · 67 posts · 24 votes
    9y

    @Austin Irwin.  I keep to the north end. Basically look at a map of Hagerstown and stick with everything North of the railroad tracks that run through the city.  

    I stay out of the south end and city center.  Mainly lower quality tenants, higher vacancy rates and more run down properties.  

    I have very good returns on my properties in the north end. 

    1Reply
  • Account Closed
    Investor · Frederick, MD · Member since 2015 · 43 posts · 21 votes
    9y

    @Mike Webb - Would be interested in your wholesale listings as well.

    I have 2-Unit duplexes built in the 80s or 90s. I get 300-400/door. I have one of them on the far south end right outside city limits. It make very good returns and is a quiet safe area. I can get high quality long term tenants with income over 3x the rent. I have two other duplexes in North Hagerstown doing just as well. I could go for maybe 2 more, but don't want to lean too heavy on Hagerstown.

    Have to tread carefully investing in Hagerstown. There is a lot of speculation on **** hole areas and properties especially downtown blight. There is a lot of drug activity in downtown. It is a dumping ground for people released from the prison as well. There are many "Recovery" houses that will bring in failed addicts from outside. All in the back drop of very old blighted houses that should be razed. 

    2Reply
  • JR T.
    Financial services executive · Frederick, MD · Member since 2015 · 609 posts · 341 votes
    9y

    You got it Vince & Russell. In ZIP code 21740 35% are below poverty line (real statistic). They're also just evicted and looking for a place to crash. They have first month and a security cause they didn't pay the last landlord for a couple months to save it up. That second part we learned through experience.

    Careful screening and a willingness to leave your properties vacant until a qualified tenant comes along are big keys to succeeding in buy and holds in Hagerstown. In Maryland rent court cases do not appear on CaseSearch. You need to pay a service like Core Logic SafeRent that has their employees go make copies of all the filings in the state and input them into a database. The search is $8 and worth every penny.

     There are parts of Hagerstown that are normal and the real estate is priced just like normal real estate throughout the rest of Maryland. In the city you're also paying an effective property tax rate of 5% and have to deal with the city BS as @Andrew Michael mentioned.

    The ordinances don't just hit you if the tenants get police calls now @Robert Fountain as of this year if they let weeds grow up on the sidewalk or the tenant puts their trash out early and you get more than 3 code notices in a year (very easy in a four unit building of subprime tenants - shoot we even caught a neighbor leaving trash in front of our building) and they fine you just like under the police ordinance. Crazy.

    I have 10% debt to equity and it returned >1% last year. I am scrupulous about tracking all of our costs in Buildium, relating to the real estate so we have good numbers to work with. This year I'm hoping to do 6-8% as the buildings begin to stabilize and 2017 hopefully 12-15. There is no return past 15% as far as I can tell, that's mostly folks not keeping track or failing to save for CapEx.

    2Reply
  • Shawn AckermanPro Member
    Real Estate Entrepreneur · Mid West, East Coast · Member since 2015 · 3k+ posts · 1k+ votes
    9y

    @Account Closed congrats on finding a market that will work for your REI goals. Be sure you are analyzing deals daily in preparation to finding your first buy and hold. Persist and you will win. Good Luck!

    0Reply
  • Cristhian Huamani
    Real Estate Broker · Hagerstown, MD · Member since 2016 · 36 posts · 47 votes
    9y

    @Account Closed
    Based on the multiple sales I had this year  (80% of what i do is multi-unit apartment buildings in Hagerstown) The average Cap rate is about 9%. Now, There are instances including in the current market with properties with 11% + cap rate. I highly recommending taking a look at the apartment buildings in the current market, compare the rent rolls & expenses to get a better idea.

    0Reply
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