All Forum Posts by: Andrew Stephens

@Chris Jenkins Congrats on the move to Maryland and the Federal job. 

If your Thrift Savings Plan (TSP) retirement account balance is big enough, you can take a loan from it and use that as a down payment on your next property.

TSP loan rates are really low (2-something percent). The best news is that because you are borrowing from yourself, it doesn't show up as a loan on your credit report.

I've used TSP loans in my two investments and it was quick and easy.

Good luck. 

@Ozzy Sirimsi thanks for taking the initiative to arrange this tutorial about Baltimore. I can't make it in the 27th but I look forward to the next one.

I saw several inquiries from out of town -- will you have a dial in one Google Hangout option for out of town participants?

@Matt R. Yes I read that the federal Census Bureau estimate of vacant homes in Baltimore is much higher, because they use a different methodology. (The city lists only homes that appear uninhabitable, not just uninhabited). 

Here is an article that estimates the actual number of vacant homes to be: "25 percent to 50 percent higher than the number of city vacancy violations, or between 21,000 and 25,000."

http://www.baltimoresun.com/news/opinion/oped/bs-e...

 I agree that D.C. Has come a long way in 20 years.  But I don't think D.C. ever had 16,000 abandoned homes.  

I bought a single family house in College Park in 2015 and just closed on another in Cambridge, MD last month.  I was looking in Northern PG County this year, too, but anything worth investing in sold in a few days with multiple offers.  What part of Baltimore City are you looking at? 

I think the conflict of interest provisions would apply if you work directly for HUD.

You should ask your ethics office at your agency for guidance. 

What area are you thinking of investing in?

@Bj Ayoleke, unless you have a few hundred thousand dollars in your account it probably makes the most sense to roll over funds into the 401k at your new job and then borrow against from the 401k for a down payment on a property.  

One great thing about borrowing up to $50,000 from your 401k is that the transaction does not show up as a loan on your credit report. That can be a really useful element to consider. 

The IRS says you can borrow the lower of: up to $50,000 or half of your account balance. 

https://www.irs.gov/retirement-plans/plan-particip...

The other option is to put your current balance into an IRA and preserve that for a future SDIRA, but meanwhile you won't be able to borrow from it.

The difference in the median price points in Baltimore vs. DC makes the same point -- Baltimore is dramatically undervalued for all the reasons discussed in this thread.  

There are also just a ton of houses for sale in Baltimore -- 2,636 listings on Zillow this morning at any price, compared to only 746 for sale in DC, and DC has a larger population.  

With so many low priced houses, Baltimore is also an anomaly in the Maryland / DC / Virginia region -- 91% of houses for sale at less than $200,000 in the region depicted in the screenshot below are in Baltimore (1,774 out of 1,937) with most of the rest being in the surrounding suburbs of Baltimore: 

Yes, it seems that in addition to zombie houses on the street, there are thousands of zombie houses in the MLS - I just searched for SFRs and townhouses in Baltimore City on Zillow for less than $300,000, and there are 2,192 listings. Of those, 2,159 have been on Zillow for more than 24 months. If I apply the "more than 24 months on Zillow" filter there are 2,160 homes from that same data set.

I can't tell how accurate that 24 month filter is, but it suggests that the majority of the houses for sale in Baltimore are zombies.  It's interesting to see that most of the homes for sale are not empty shells selling at low prices -- of the ~2,000 listings, only 600 are listed for less than $50,000.

I think there are a couple of factors that create a bifurcated real estate market in Baltimore.  One factor is that many of the typical Baltimore row houses are small and not that appealing architecturally.  They are reminiscent of factory towns in England.  That makes sense because some neighborhoods in Baltimore were factory towns - built by the factories for their workers.  

Another factor is racism.  This article notes that the geographic pattern of the vacant houses in Baltimore tracks the historic areas of "redlining" where lenders refused to lend on houses based upon race. 

Here's another bit of information -- of the 16,000+ vacant homes, an estimated 11,500 have little value and should be demolished according to this Baltimore City Website:

"Population loss and other economic factors over the past 60 years have left Baltimore with upwards of 17,000 vacant and boarded structures. Based on location, population trends, and market demand, about 5,500 of those vacants have good potential for redevelopment. Market demand for the remaining 11,500, however, is very limited."