All Forum Posts by: Sara Frank

Depending on where you are located, mid term rentals can be a lucrative strategy as well. If you're near a hospital there are typically nurses/doctors who need a place for anywhere from 30 to 90 days and are willing to pay a premium for a furnished space.

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Quote from @Mike Goikhberg:

I am considering buying a property that was built as a two unit but is not zoned as such in baltimore CITY. I want to split the electrical. Is there any way for me to get a second meter there? Or perhaps wire two separate electrical panels to the same meter? Does anyone have experience doing this sort of thing?

Its not ideal but I would just bill back utilities split between the two units. I live in Canton and have a SFH that functions as a duplex and I went through this whole thought process when purchasing but at the end of the day it wasnt worth the cost/headache to do two meters. It can be very expensive

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Baltimore, Maryland

I would definitely paint if you can swing it. "Agreeable grey" my Sherwin Williams or white. Will make the whole place look less dated for relatively little $$$

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Awesome!!! Congratulations. I love the 203k, such a powerful play and most dont know about it.

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Can get 1% in some parts of Baltimore if you change lease terms.. I.e. instead of LTR do medium term. Cant do airbnb or any short term unless owner occupied.

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Quote from @Tim Wheeler:

Hey everyone,

I'm new to real estate investing and my wife & I have started looking at multifamily properties in MA & RI that we will live in for at least a year in hopes to purchase a single family afterwards. The properties we're eyeing are move-in ready, but not all of them are newly renovated. We'd be willing to put some work into any of the homes that made sense.

Using tools such as the BP rental property calculator and Mashvisor, I'm only coming across properties that, with the minimum FHA down payment of 3.5%, will be cash flow positive after a number of years (lowest I've seen is 3 years, up to 15+ years which would likely be a no-go/red flag).

In today's market, is that something that's typical with this type of down payment? I'm inputting the general rules of thumb for vacancy, maintenance, etc. I just want to make sure we're not putting ourselves into a hole that we can't get out of on the first property in our portfolio.

Ideally we'd be in a solid cash flow position right away, but I'm unsure if that's realistic when putting the minimum 3.5% down.

Thanks in advance, and happy to provide more details.

Tim

Hard to be cash flow positive when highly levered + 6% interest rates ... however with rents rising you can also look at it as opportunity cost. Even if you are not cash flowing -- if you are paying a fraction of what you would be renting for thats still $ in your pocket at the end of the day. And equity of course. Cash flow isn't everything, especially if its your first property. Goodluck!

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Providence, Rhode Island

The answer depends greatly on what type of financing you're using and your budget. If it comes down to two or three with similar numbers -- the tie breaker should come down to local landlord laws.

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There are some awesome neighborhoods in Baltimore, just have a higher acquisition price. If you pay bottom dollar prices for properties you will make up for those "savings" in repairs, negative tenant experiences, etc.

Another consideration is property taxes, they are pretty high in Bmore and can eat into your cash flow depending on what financing you use. In such an inflationary environment, I recommend looking for something as turnkey as possible in Canton, Fed Hill, Fells Point, Locust Point... the cost of doing a rehab right now is a lot of time and money.

@Sean Monahanundefined

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Baltimore, Maryland

Quote from @Ned Carey:

@Chris Seveney I don't have clear numbers, but my perception is a mild slowing, but still a sellers market. I am referring to the investor side of the market. Auctions sales are a little more hit and miss as far as sellers getting great prices.

The Baltimore city tax sale from a couple of days ago saw ridiculously high prices. I was getting beat by close to double my bids on some properties. So some investors still have confidence in the market despite their cost of funds going up. Two bidders just told me their credit lines went up 1 percent just recently. Yet they still bid the auction at less than their cost of funds on some properties.

I suspect we haven't seen the full effect of rising rates yet. Investors are biding and putting under contract, without realizing the financing may not come through.

In 90 days I think we will see a dramatically different market. That is enough time for both buyers and sellers to see the reality of the changes that have happened in the financing world.

My prediction is anything from a major crash to continued rising prices at a surprising level. The probability of which result we will see, shaped somewhat like a bell curve, with modest dropping in the middle of the curve.

I agree with Ned there seems to be a rush of investors listening to the constant media hype that its now or never to park their money in real estate so they are overpaying for it. It's important to hedge against inflation but I'm seeing financing fall through because appraisals are starting to stabilize and cost of capital will keep going up. I cant speak to what's going to happen long term, but I know I've been able to get appraisal and/or inspection contingencies for many of my clients recently when that wasn't an option 90 days ago. We're far from a buyers market, there's just not enough inventory, but there has been softening. We'll see how it develops.

1 Vote

All Forum Posts by: Sara Frank

Sara Frank has started 15 posts and replied 248 times.

Post: Wanting bigger pockets !!

Post: STR outside D.C. ? Montgomery County - Rockville, Potomact, etc.

Post: Adding two gas/electric meters to single fam property

Post: Do I need to paint my STR?

Post: My first success (thank you bigger pockets)!

Post: Do you follow 1 percent rule

Post: Cash flow positive with 3.5% down?

Post: Am I On The Right Track (debating the city to buy in)

Post: Investing in Multi-family Units In Baltimore?

Post: Buyers or Sellers Market