Southern, NJ · Member since 2016 · 16 posts · 2 votes
Hey everyone, my name is Lee i'm new here. I am looking to buy my first property which is a foreclosed 1235sq ft corner row home and total rehab. The asking price is $3,000. The property is in a low income community. After the rehab is complete I plan to rent the home out. I have not been inside this property yet, but from the pictures it looks like alot of work. I get mixed opinions from family and friends. Any advice?
You get the best responses in this forum if you ask specific questions. In order to find much information about a broad topic, it is most effective to search through older posts in the category that covers your topic. There is tons of valuable info to find.
Rental Property Investor · Seattle, WA · Member since 2013 · 2k+ posts · 1k+ votes
10y
Do you have the opportunity to bring in an inspector to understand what you are getting yourself into? If it is clean-up, cosmetics, and the usual work, great, but there are a lot of surprises that could explain the low low price.
Look me up when/if you get to the low income landlording stage, that's my niche.
Do you have the opportunity to bring in an inspector to understand what you are getting yourself into? If it is clean-up, cosmetics, and the usual work, great, but there are a lot of surprises that could explain the low low price.
Look me up when/if you get to the low income landlording stage, that's my niche.
Michele I do plan to take someone knowledgeable with me to inspect the home. If I can locate an inspector I will certainly look into that. Wow, I read your bio and you and your a husband are doing exactly what me and my wife Michele(one L too) plan on doing. The community I want to buy and hold in is where I grew up. Over the years the place has really took a dive. So like you In see it as business/mission work. I will certainly connect with you.
You get the best responses in this forum if you ask specific questions. In order to find much information about a broad topic, it is most effective to search through older posts in the category that covers your topic. There is tons of valuable info to find.
Don't listen to any one tell you that you can't be successful. Go for it but make sure you estimate all rehab costs accurately, the rehab time accurately, the rent price accurately and then overall have a large amount of equity in the property once your rehab is complete. If you are going to take on a hog like that , you deserve bigger pockets. The process will teach you a lot too which will become invaluable ! Good luck
Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
10y
@Lee Edwards There are properties that inexpensive in Baltimore.
Keep in mind the cost is sometimes more than the property is worth when you are finished. That can be OK as long as the finished price still cash flows well. Just realize that is an additional risk. If you get stuck you may not be able to sell for what you have in it.
You should be aware of the quality of property renters expect. You don't want to under develop and have no one want to rent. You also don't want to over develop and drive your costs up. This is where Knowing your market and what competing rentals look like helps.
Southern, NJ · Member since 2016 · 16 posts · 2 votes
10y
@Ned Carey I was just recently speaking to a friend who lives outside of Baltimore, and yes the property prices are comparable to my area in NJ. I appreciate your added advice, I have been looking at other rentals in the area and comparing. So far it appears no other owners have really did any major renovating. Most seem to have patched up here and there and painted. I even saw one house with a polished wood floor that had dark spots. The rent price in the area ranges between $850-$930 roughly.
Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
10y
@Lee Edwards good it sounds like you know your market. I would still tend to fix up a little nicer. Both to reduce repairs and to get better tenants and keep them longer. Tenant turnover is your biggest cost.
Ironically section 8 tenants expect better houses than market tenants here. So sometimes houses get fixed up nicer in lesser neighborhoods.
Property Manager · Baltimore, MD · Member since 2014 · 1k+ posts · 1k+ votes
10y
Hey Lee, I suggest you ignore what your "friends and family" have to say about it. Unless they've been there and done that then they don't really have a soap box to stand on. If you have a significant other who would be sharing the financial responsibility with you that is a different story of course.
I also want to second Ned's point: know your market. Know what competing rentals look like so that you can rehab accordingly. Know what the ARV will be so that you don't over invest. Know the area rental rates so that you can be certain the property will cash flow and cash flow well.
Aside from that I suggest assembling a "team" of strong local advocates. This will include paid professionals such as contractors, inspectors, tennant placement folks, etc. and also one or two unpaid mentors who can act as sounding boards for you. There are plenty of people in the Baltimore Real Estate scene who are very generous with their time and knowledge.
I also own a rental in a low income area that I bought for nothing and the rehab will cost as much as the house is worth,but as @Ned Carey said it won't matter cause it will cash flow like crazy.
Find good contractors so you don't spend a lot of time doing things twice
Do NOT take advice from anyone that is not in this business
Hey everyone, my name is Lee i'm new here. I am looking to buy my first property which is a foreclosed 1235sq ft corner row home and total rehab. The asking price is $3,000. The property is in a low income community. After the rehab is complete I plan to rent the home out. I have not been inside this property yet, but from the pictures it looks like alot of work. I get mixed opinions from family and friends. Any advice?
Have you taken a look at any turn key properties in the area? Having one already completed for you to just purchase and rent out ASAP is also a good option.
I just completed a rehab in Baltimore City similar to what you are doing. It can be an awesome deal if the contractor is use to working with these types of properties in the city. I have a good contractor that works on row homes in the city let me know if you need his information,
Southern, NJ · Member since 2016 · 16 posts · 2 votes
10y
Queen Sheba Owusu-Hassan thanks for the input. The area I am looking to tackle first is actually in NJ. If you know any contractors locally I would definitely like to connect. I am currently looking at a few turn keys as well.
Flipper · Holiday, Florida (FL) · Member since 2015 · 94 posts · 24 votes
10y
Hi Lee and Welcome! I didn't see it mentioned above but I'd definitely recommend you check out "The Book on Estimating Rehab Costs" by J Scott. It will give you a very strong foundation for your rehab. J is a member/blogger on BP and a wealth of knowledge/information. Much success!