Purchasing a property for residence and rental

[Jay Bhatt]

Hello all,

I have seen other posts regarding the Baltimore real estate investments but they all seem to be out of date. I am relatively new to the area (10 months and counting) and have got a pretty good feel for which areas are good and which aren't. 

Currently I am trying to purchase a 3 Bedroom property for around 200K (conven. loan) and looking to rent out 2 of those rooms for around $700 each. I am trying to make the monthly payments come out to $2000/month for the total mortgage payment (taxes and everything included). Hence, I'd essentially be paying $600.00 in rent and split the utilities. I also plan on putting away around $100-$150 per month for emergency situation. I am essentially asking the community to see if my plan is naive, stupid or improbable. 

Also, if someone has done what I am trying to do and has done it successfully, I am all ears! I'd even take you out to dinner and would love to learn what you have learned. 

My general interest locale for investment/residence are:

1. Canton

2. Highlandtown

3. Upper Fells

4. Butcher Hill

5. Little Italy

6. General area around Patterson Park 

If someone has suggestions of other areas in Baltimore I should look into, I am all ears on that as well. 

Thank you for reading this, and I am looking forward to this being an awesome and educative discussion.

Sincerely,

Jay Bhatt 

[Asish Balu]

For that price you're probably not going to find a 3B2B in the areas you mentioned unless you lived a little bit more north. I don't know how comfortable you are with city life, but the area north of patterson park isn't the nicest place to live.

It looks like you're trying to meet the 1% rule. Unfortunately it's tough to find properties that satisfy the 1% rule in the nicer areas of the city. 

What you could do is find a 3B2B, live in a non-bedroom (ex. live in the basement), and rent out the other rooms. That should cover most of your expenses.