Investor Groups In Baltimore

11 Replies

Hello All,

I purchased a 3-Unit Row Home in the Madison Park area of Baltimore a year ago on a 203K loan. Construction has gone horrible due to a contractor that underbid on the project on purpose. I have been trudging along getting it moving slowly but I am now expecting my first child and changes have to be made. Can anyone recommend an investor group that might consider purchasing the project from me for what I paid?

Appraisal was for 240k with comps of 400k. I paid 190K and invested 32k of my own money. I am simply seeking to pay off the loan and what I invested which would leave an investor with about 100K in equity and potential rents of $3300 a month.

Quado,

I actually had an identical situation on Madison Ave in same area which I purchased years ago and recently sold.  This is a tough situation and i am happy to share some advice.  It might be best to reach out to me via email.  I am happy to share some details here if you prefer.  The real key here is how much work still needs to be done.  It will be tough though to get someone to come in here and pay around $300k.  How much is still in escrow for the work to be done? 

Originally posted by @Michael Krupp :

Quado,

I actually had an identical situation on Madison Ave in same area which I purchased years ago and recently sold.  This is a tough situation and i am happy to share some advice.  It might be best to reach out to me via email.  I am happy to share some details here if you prefer.  The real key here is how much work still needs to be done.  It will be tough though to get someone to come in here and pay around $300k.  How much is still in escrow for the work to be done? 

 Hey Michael,

I still  have approx 80K in escrow. The issues are as follow.

1) It's a 3400 squarefoot home and I had major wiring and and plumbing work that the contractor did not budget for. So entire home has been rewired, new plumbing and new windows. I paid 32k out of pocket to get project moving 
2) All the roughins have been completed and we are at inspections. Yes, at inspections after a year.
3) Contractor doesn't believe he can close up the walls and finish for remaining amount.

I truly feel for you as I have been exactly in the same place, crazy! I was burned by 2-3 contractors and the rehab took more than a year, same neighborhood. I bought mine for $150k and put $ 150k into it by the end. My concern is that I am not sure if $80k will be sufficient to complete the house? 

So you have had all the inspections to rough in? General, Insulation, Framing, Electrical, Plumbing, and HVAC?

FIrst thing I would do is get a solid licensed insured contractor in there to do a scope of work and estimate to complete the work.  My guidelines for contractors are as follows:

1)Licensed
2)Insured

3)Can show you their current work and quality

4)Are solvent and able to use their own funds to get started on the work and get paid in draws as work is completed - this protects you!  This is how we do it when we make hard money loans too.

5)References

There is no guarantees here, but you minimize the risks and a licensed contractor is liable.

Most investors are looking for a deal and this may not be as attractive as other options they might find in my opinion.  

If $3300 is the monthly rental income, what are the estimated monthly rental costs?? Are the units self contained and separately metered? 

Originally posted by @Michael Krupp :

I truly feel for you as I have been exactly in the same place, crazy! I was burned by 2-3 contractors and the rehab took more than a year, same neighborhood. I bought mine for $150k and put $ 150k into it by the end. My concern is that I am not sure if $80k will be sufficient to complete the house? 

So you have had all the inspections to rough in? General, Insulation, Framing, Electrical, Plumbing, and HVAC?

FIrst thing I would do is get a solid licensed insured contractor in there to do a scope of work and estimate to complete the work.  My guidelines for contractors are as follows:

1)Licensed
2)Insured

3)Can show you their current work and quality

4)Are solvent and able to use their own funds to get started on the work and get paid in draws as work is completed - this protects you!  This is how we do it when we make hard money loans too.

5)References

There is no guarantees here, but you minimize the risks and a licensed contractor is liable.

Most investors are looking for a deal and this may not be as attractive as other options they might find in my opinion.  

If $3300 is the monthly rental income, what are the estimated monthly rental costs?? Are the units self contained and separately metered? 

Thanks Michael, 
I will do so.
The $3300 are the estimated rents. Each unit is self contained for electricity and gas but not for water. 

I believe the contractor simply wants out the project because the profit margins arent as high as he thought.

It would depend exactly where in Madison park. On block the wrong way and it makes a big difference. Franky I think you paid too much and given the amount of work needed it is not worth what you have in it.

I know of a 5 unit building in the same neighborhood. It is Fully rented and operating for about the same or less than the all in cost on your building.

PS: this is not a solicitation, the 5 unit building is NOT my building. It is on the MLS

Originally posted by @Ned Carey :

It would depend exactly where in Madison park. On block the wrong way and it makes a big difference. Franky I think you paid too much and given the amount of work needed it is not worth what you have in it.

I know of a 5 unit building in the same neighborhood. It is Fully rented and operating for about the same or less than the all in cost on your building.

PS: this is not a solicitation, the 5 unit building is NOT my building. It is on the MLS

 I'm on the 1800 block of Madison Ave

Originally posted by @Ned Carey :

@Quado C.Actually that is about as good as you can get in Madison Park. That is a good thing for you.  I don't know comps specifically in that area but I don't think it will be an easy sale. Fortunately it won't be near as tough as I feared originally. 

Thanks @Ned Carey 

I did some homework prior to the sale and thought it was a bit easier of a rehab than I originally thought. However, the city made us redo everything.  I originally planned to live in the bottom unit so I felt I selected well.


Any idea how to get connected to investors to shop the property?

@Quado C.

Become a pro member and place an add in the Marketplace here

Go to local investing clubs and network with other investors. BWI Meetup is my favorite but there are several others in the Baltimore area. 

List it with an agent. Lots of investors use the  multiple list as there only source or deals so that is where investors look.

Auction it. There are several auctioneers in town and they often get good crowds. Sometimes auctions bring the best price as buyers get caught up in the excitement a keep biding just s little more.

Originally posted by @Ola Dantis :

@Quado C. What do you end doing in this situation? 

Were you able to dispose the property? Thanks! - Ola 

 Hello Ola,
I haven't tried to move the property yet. I am exhausting all of my options before selling. I really believe in the value and possibilities for the property.  

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