Sunnyvale, CA · Member since 2016 · 71 posts · 21 votes
Hey BP,
I'm starting to narrow down my search to specific neighborhoods and I think that I'm looking now at Federal Hill, South Baltimore, and Riverside Park. Do any of you BPers invest in these areas and have any tips-tricks for these particular neighborhoods? These areas are a bit more expensive than I was originally thinking (~250k-$300k instead of $150k-$200k) to invest but seem to provide a great mix of potential appreciation, strong rent, and future development. They also seem safe, have a demographic of higher college attainment, etc.
How much does a 2br home rent for with a park view at Riverside Park? I'm estimating about $2200. Rent-o-meter indicates that an average 2br would fetch $1900 and a 3br would get $2600. Are these numbers reasonable? What kind of return would I see if I were to finish a basement with another bedroom (assuming basement heights are 6'+)?
Are there any particulars of the Port Covington renovation that would harm the community?
Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
9y
@Account Closed That area is known as 4X4 (The size is four blocks by four blocks) It is not a great area, although perhaps better than in the past. Now there are landlords who would be perfectly happy there and it looks like a very nice house for the price. It would probably rent for $1200 a month. Those are great numbers but it sounds like it is not for you . . . not for me either.
Nearby is Belair Edison which is considered a decent rental neighborhood. We own two homes there are would be happy to own more. It is what I would call the middle of the road for rental areas.
There are a lot of areas between 4 X 4 which is on the low end and Federal Hill which is one of the nicest areas in the city. There are a lot of good rowhouse neighborhoods a level above Belair Edison in 21212 or 21239 but priced much less than Federal Hill etc.
Real Estate Investment Attorney · Kingsville, MD · Member since 2016 · 643 posts · 408 votes
9y
@Account Closed
For the most part your research is pretty good. However, appreciation has been played out and little room for future development. Also, why invest $275,000 for a $2500 month rent?
Multifamily Syndicator · Houston, TX · Member since 2016 · 1k+ posts · 2k+ votes
9y
@Account Closed Hey Chris, we have a multifamily in Upper Fells Point close by to Patterson Park. There are definitely advantages to areas such as Federal Hill; however, it might be a struggle to find really good cash flowing ON-Market properties in these areas. Have you considered some other up and coming areas where crime is Lowest?
As for rents, rentometer typically reflects the rent on ground but it depends on the unit, does it have silver appliances, central air, and what is the flooring? Some of these impact the rent your property can command.
Though the addition of a basement somewhat helps the rent, it probably helps the most during the disposition phase of the investment.
Port Covington is a good addition to the City, and it shouldn't hurt the community, if anything this helps Baltimore, MD.
Sunnyvale, CA · Member since 2016 · 71 posts · 21 votes
9y
Hi Ola Dantis ,
Im definitely interested in other areas too. I'm also considering Hampden and Patterson park. What can you tell me about Patterson park? How did you choose that area?
My main goals are to maximize rent-to-price (hoping for 1%+), invest between $150k-250k, and do so in a neighborhood that is potentially appreciating more. I'm happy to compromise a little bit on price-to-rent if it might bet me some hope of appreciation, as opposed to investing only in cash-flow in an area without potential growth.
Thanks for the feedback!
Value Add potential: This means you're looking for properties that require minor updates: flooring and paint, maybe appliances
(5) CoCR should be at least 8%+ [Double digit is a blessing]
I'm not too familiar with Hampden; Patterson Park has an interesting mix of young and married couples. This tenant demographic, in my experience, usually don't require a hands-on management approach and they typically take care of the house, lowering your Income-Expense ratio annualized.
We choose this area because the Crime was lowest, and the property had some value add opportunities, some of which we have successfully completed.
I can send you a portfolio to take a look. Perhaps, that can give you a good idea.
Professional Auctioneer · Baltimore, MD · Member since 2015 · 1k+ posts · 1k+ votes
9y
Why limit yourself - go where the CASH FLOW or EQUITY IS.........most of those neighborhoods you mentioned are already lost to more experienced investors and developers - I don't think you are going to hit a home run at this time in those areas............just my opinion.......
Investor · Baltimore, MD · Member since 2013 · 11 posts · 0 votes
9y
@Account Closed,
I live in Federal Hill in a property I "house hacked," and was my introduction to investing 3.5 years ago. Direct message me. We should schedule a time to meet up, so I can fill you in on all the upsides and downsides of doing so.
Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
9y
@Account Closed Based on the names of the areas you asked about it seems you are looking for rentals in a lace where you would live. Those aren't necessarily the best areas to invest.
Those areas might have cash flow today only because of super low interest rates. However you are likely looking at break even or negative cash flow. This means you are counting on appreciation to make you money. Nothing wrong with that as long as you understand that and can afford it.
Remember you principal and interest payment is only the beginning of your expenses. While obviously a crude rule of thumb, it is good to figure you total costs will be about 50% or your rent -NOT including your financing payments.
Sunnyvale, CA · Member since 2016 · 71 posts · 21 votes
9y
Hi @Ned Carey, thanks for the reply. I've looked at other opportunities that would have better cash-flow, but I would keep finding them in areas that Trulia would list as "high" crime and poor schools. Should that not dissuade me? Would a house like this one be something to consider given that it's in good condition and could fetch a reasonable rent?
Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
9y
@Account Closed That area is known as 4X4 (The size is four blocks by four blocks) It is not a great area, although perhaps better than in the past. Now there are landlords who would be perfectly happy there and it looks like a very nice house for the price. It would probably rent for $1200 a month. Those are great numbers but it sounds like it is not for you . . . not for me either.
Nearby is Belair Edison which is considered a decent rental neighborhood. We own two homes there are would be happy to own more. It is what I would call the middle of the road for rental areas.
There are a lot of areas between 4 X 4 which is on the low end and Federal Hill which is one of the nicest areas in the city. There are a lot of good rowhouse neighborhoods a level above Belair Edison in 21212 or 21239 but priced much less than Federal Hill etc.
Professional Auctioneer · Baltimore, MD · Member since 2015 · 1k+ posts · 1k+ votes
9y
If you are fishing and using net - you'd want a large net - you'd catch more fish - to me real estate is about cash flow or equity - the net I use is radio - TV - direct mail - farming. I don't care where the buildings are if it has a potential to assign for a profit - I'll take.