All Forum Posts by: Matt Schelberg

@Sarah Kuppert Great suggestions in this thread. Also interesting idea from @Ned Carey on the DAWGS doors. I've dealt with 10 breaks-ins at Baltimore City vacants in the past year and have a few lessons learned.  I would add the following:

• the $100 security doors at Depot are junk and thieves can easily cut through the wire mesh to unlock the thumb-turn deadbolt. They are basically a deterrent that should be considered a robust screen door.
• reinforce  your deadbolts by attaching the door jambs to the framing using this method.
• security bars that prop up against the door knob are ok but tend to slide out at the bottom.  They work better if there is an anchor on the floor to prevent slippage
• Security alarms will not deter a thief from entering, but his time in the house will be limited to police response time.  Earlier this year I had a junkie who would break-in each morning and steal a light fixture while the SimpliSafe alarm was blaring. Enough to get his fix for the morning.
• Consider getting a motion sensor game camera to catch photos of any thieves.  It will help them get locked up so at least you can finish your rehab without the same guy robbing you blind repeatedly. 
• Thieves can easily cut through a lockbox to take the key, forcing you to change all your locks.  In my experience this is neighborhood-specific.  A lockbox in one neighborhood can go untouched for months while in another neighborhood criminals are brazen enough to do their work in plain view at the front door

Be careful with people who take them for free -- you're generally talking about scrap metal haulers and they might not be too careful about making a mess.  I had a guy remove a basement oil tank once.  Great price...and he spilled oil sludge in my 1st floor trying to get it out of there.  Took me 2 weeks to clean it up and get the smell out.  

You'll also want to make sure the sludge is properly disposed of at the county landfill.  Otherwise it will end up in our beautiful Chesapeake Bay.

 While I agree with Ian about entering Baltimore real estate with eyes wide open, I don't think this approach to crime is good advice for everyone. Especially someone we know nothing about.  I assume the poster is a woman and I would never want my mother or wife to go in the parts of Baltimore where I go.  

Ian is right that Baltimore crime is unpredictable, but just like lightning, it's not random.  Stay off the hilltops in the lightning storm. 

Baltimore crime is brutal -- the moment you get complacent or fail to respect it, it will bury you.  So OP: invest where you feel comfortable.  And never assume that a nice neighborhood is safer.  If you look at a crime map you'll see that some parts of your triangle have more violent crime than the most crappy, run-down blocks in West Baltimore. 

@Daniel Suarez that is a great tip from @Charlie MacPherson.  Instruct the tenant to stay out of the water until emergency services can visit the house and ensure the power is off in the flooded areas.  Once they say it's safe to go in the water, disconnect the power to the water heater and HVAC equipment.  You have a better chance of preserving these appliances if they don't operate while submerged.  

After you get all the water out of the house, your top priority will be drying everything out quickly.  Household dehumidifiers will likely be insufficient for this -- you'll need commercial grade equipment.

To prevent a repeat problem in the future:  I live here in Baltimore and based on what I saw yesterday, I don't think a sump pump will prevent this from happening again.  We took on too much water too fast for a sump pump to get rid of it.  I would look at ways to move rainwater away from the foundation so it doesn't enter the house in the first place.

@Ben M. Great question!  It's a tough problem.

Home inspectors and contractors take different approaches when looking at a house.  The contractor will be looking at the big picture and giving you a rough estimate on your planned scope of work.  The contractor will not vouch for the house after spending only 30 minutes inside -- any surprises that pop up during the renovation will cost you extra money.  If he sees something gnarly while walking the house with you, he'll tell you.  But he's not looking for defects -- he's running numbers.

The home inspector is looking for hidden defects.  He or she will get dirty and crawl around in the attic. He'll give you an idea of the condition of the HVAC equipment, the electric panel, and the water heater. He'll spend time in the basement looking for structural defects, etc.  The inspector will rarely give you a rehab estimate.  He'll help you make a more complete scope of work so that you can make a good buy decision.

How to solve the problem of offering immediately with 50% information vs. waiting several days for 80% information: 2 ways for a new investor to develop speed and shorten their OODA Loop:

1. To estimate rehab costs you need either personal experience or the wisdom of others.  Find investors in your space and pick their brain on a scope of work for one of their projects.  Get a good sense for what things cost in your area.  Bottom line: you will never be able to convince a GC to check out all your prospective deals for free.  So learn to estimate rehab costs yourself.  @J Scott's book on Estimating Rehab Costs is a good place to start to learn what questions to ask.
2. Talk to a few independent home inspectors and see what price they would offer for 60 minutes of their time to evaluate a house with you alongside taking notes.  Tell them you don't need a report.  You don't care about cosmetic defects -- you want to know about the big ticket budget-killer items.  This limited-service option will save the inspector 3-4 hours of work, so the inspection fee will be lower.  Bring in that home inspector as one of the final steps in your due diligence process (or the costs will pile up).  Your goal is to find a low-cost way of avoiding bad deals.

As a home inspector I agree with @Barry Cohen that evaluating the structural integrity of a foundation is only one of many reasons to get a home inspection.  There are many defects that can cause a homeowner big problems. 

To make a comparison to the medical field, home inspectors are like a general practitioner.  So rather than spend a bunch of money and bring in a specialist inspector for all the different trades (electrical, plumbing, HVAC, roof, etc) you can bring in a generalist at a fraction of the cost to evaluate the whole house looking for a broad range of problems.  When we identify a problem (for example: a fire hazard in the electrical panel) we'll recommend a specialist (an electrician) to fully evaluate the problem and prescribe the most appropriate fix.

Back to your specific question:  if the basement walls and ceilings are covered it will be difficult for anyone (including a structural engineer) to evaluate for structural issues.  Other things you can do:

• Talk to neighbors with similar housing types and ask about foundation issues -- if the houses were built by the same developer sometimes there will be common themes throughout a development
• Determine the type and age of the foundation. A home inspector or a structural engineer will be able to advise you on common problems for that type

It is rare to find a single-family detached house in Baltimore County that works as both a rental or a flip -- this is one of those deals.  Located on a quiet street in Essex, MD this house has great curb appeal and the huge backyard overlooks a wooded area.  

Rents: $1,450-$1,600 

ARV:  $210,000.  Based on sold comps on the block.  Comps here.

Photos: Here.

Property Features:  

• Large fenced yard (quarter-acre)
• Open kitchen floorplan
• Water heater 2014
• Vinyl siding less than 5 years old
• Upstairs sheetrock has been hung -- just needs to be finished
• Property is vacant. Trash-out is complete.
• 4th bedroom is a "pass-through" on the 2nd floor

Rental Repair Estimate:  $35k for a nice rental (price includes all new bath and kitchen and granite countertops, new flooring, etc). *Please do your own due diligence.

Price: $119,900

Terms: $5k EMD, must use Residential Title and Escrow in Owings Mills, where title work has already started.

This is an assignment of a property purchased at a foreclosure auction at the Towson courthouse steps.  Assignee is responsible for:  property taxes, water, and 6% interest on purchase price from date of auction (1/18/2018). There is no buyer's premium.

Please reply to this post to see the property.

Join us on Thursday night (May 10th) for a free meetup attended by many local BPers.  Guest speaker Brentin Hess (guest of BP Podcast #240) will be discussing how to scale quickly with small multi-families. As always, the event is pitch-free with no selling or guru courses offered. Just good discussion and opportunities to learn and meet local investors.

Regular attendees include BPers @Ned Carey , @Russell Brazil, @Jarred Sleeth, and others.

The meetup begins at 7:30pm. Location details are on our meetup.com page here. Bring your notepad and questions! Hope to see you there.

This property is sold

Hi Michele, this property is under contract.