Any out-of-state investors?

Question

I am completely new to RE investing and am doing my best to learn as much as I can. I'm very thankful for this site and individuals who have helped me to get started. I'm wondering if there are any out-of-state investors on this forum that are buying & holding in Baltimore City. I understand that being out-of-area will require use of project managers which will increase my purchase price and property managers which will add to my monthly expenses. When I run the "numbers", it doesn't look like I'll be generating much cash flow but there's a chance I'm over-estimating some costs. On the flip side, I also worry that there may be some costs involved that I haven't even considered which would further lower my cash flow. Either way, I'd be so appreciative to hear from some out-of-state investors currently buying & holding in this area. Thank you!

Shawn Ginder · Answer

@Summer Timms - check out www.padeals.com I have been to there introductory seminar, and believe they can be a trusted company to work with as a turn key provider if interested. The management team they recommend using is what we are using and are very professional, Harrisburg property management group. Non the less will give you another market to look at in the Harrisburg PA region. We have three properties in Harrisburg, mostly outside the city, one edge of the city and doing well with them.

Brian Pham · Answer

@Summer Timms --- @Joe Norman is absolutely right...Baltimore is a city of many neighborhoods, more than your typical city. My partner and I are just beginning our REI ventures here in Baltimore, but I grew up here and lived in over a dozen neighborhoods -- good and bad. Happy to share any informal insights on any neighborhoods when you get to that point.

Summer Timms · Answer

@Shawn Ginder - thank you for sharing that info! I'll be sure to look into them first thing tomorrow. Happy you're doing well with your investment & wish you continued success! On another note, I just realized you are from Lititz, PA originally. We did a Fall Foliage trip to that area in October - beautiful country!

Summer Timms · Answer

@Shawn Ginder - Thanks for the quick response! I was under the impression that you are in the Baltimore City RE market which is the area I'm looking at. I live on Long Island but haven't found any markets that look promising here.....

Shawn Ginder · Answer

@Summer Timms - You'll need to get this information from someone in the market itself. In PA we have what is called residential licensing fee for having a rental unit, and a city business license fee for having rental property, and if the city does inspections they may charge you the inspection fee. These fees are minimal, when averaged out over a year can be from 10-30 monthly on the property. We are also now getting quarterly sewer maintenance fees from the city. You won't know until you ask these specific questions from either investors in a particular market or a property manager who would know. Many of these fees are borough or city limit specific.

Summer Timms · Answer

Thank you for the informative replies!

@Brian Pham - I will very much appreciate the "informal" input on neighborhoods when I'm a little further along, so thank you in advance for that.

@Shawn Ginder - Thanks so much for sharing your insight! I know ground rent & city inspections are a couple of "local" costs. Any others I want to keep in mind?

Shawn Ginder · Answer

We are buy and hold from out of country! Born and raised in south eastern PA, I was looking into the Baltimore market, around the same time 2 years ago during that research period was a time of unrest in the city that gave rise to some concerns. What really got me reconsidering this market was connecting with a friend and his brother who are partners in the city as RE investors. He shared that with the current events at that time they were considering getting out of the market, shared as well some of the local rules and compliance issues for the city can be a source of extra fees and fines.

Grated in hind sight my friends have learned a lot of hard lessons over the years investing in Baltimore, and really would have gained a lot of knowledge through this website that would have saved them a lot of trouble.

However, there approach was self manage, pay cash as they went, and rehab the properties themselves. So in this business model you can even see how they have gone the hard road of figuring things out as they go.

For me, investing out of country from Europe, investing in somewhat local region from where I grew up, I have relied heavily on good property managers. This will make or break your investing business being out of state. I am learning what it means to manage the managers to stay on top of what is going on at the properties. The manager will be a tremendous resource for you in helping you locate better neighbourhoods that you will want to be in. If they are licensed agents, listed carefully to the choice of words as they can't legally tell you not to invest in a certain block as I understand it. Look for the key words more desirable, less desirable, rating areas of the city over other areas. Use tools like trulia to gain perspective on crime rates, but always get an on the ground perspective on the area. The numbers have to work cash flow wise, but than always run the address by a trusted property manager you may work with in the future for a perspective on the area. Run several addresses by them, and you learn where to look.

Joe Norman · Answer

Welcome to Bigger Pockets and to the Baltimore Real Estate Market!  Be very careful when purchasing in Baltimore, it is full of sub markets and home values vary greatly within just a few blocks of each other.  Be sure you have a good local team on the ground that you can trust!

Any out-of-state investors?

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