All Forum Posts by: Joe Norman

If you think that this plan "essentially guarantees cash flow every month" they you need to take off those rose colored glasses. REI can be a great way to build wealth and cashflow, but it's by no means guaranteed or passive (at least not at this scale).

Can your father comfortably cover the $1900 mortgage payment during the months when the property is vacant or the tenants aren't paying? If not then I would sell. If he can then you can absolutely consider refi-and-rent, but is $400/month (after paying a PM, maintenance, vacancy, etc) going to make that much of a difference in your fathers retirement? 

Personally I'd renew your current tenant (assuming they are good tenants, which it sounds like they are. If they don't want to renew I'm selling the property as I don't want to hold anything that doesn't cashflow.

Good luck!

Probably not a popular answer, but I would get a good paying W2 job and start saving. You'll need the cash for downpayment/closing costs/renovations, and you'll need the paystubs for financing.

Worst case scenario is you get sued to perform on the contract, but that is highly unlikely. Must realistic worst case scenario is that you loose your EMD and your reputation takes a hit.

If the Realtor is being unresponsive then contact their broker.

LLCs are much easier to setup than S Corps, but offer most (or maybe all) of the same benefits which is why folks are using them. Especially investors who want a single entity per property.

Since this is your first time dealing with an eviction I strongly suggest getting a lawyer involved - especially in Baltimore City which is very tenant friendly. There are a couple in Baltimore who specialize in landlord/tenant issues (including evictions), shoot me a PM if you want a few referrals.

The IRS generally allows capital gains exceptions if you lived in the house as your primary residence for 2 of the last 5 years. Where were you living during the period of 12/01/2020 to 12/01/2021?  Just sending your mail to Virginia Beach doesn't make that your primary residence, what matters is where you are actually living. If you were living in MD during that time then, unfortunately, it looks like you're paying capital gains.

This doesn't really answer your question, but a word of advice: avoid anything that may be considered a mobile home. The purchase/install price can be attractive, but financing is a huge PIA - especially when you go to sell it.

Good luck!

Hamilton is a solid neighborhood with appreciating home values. I consider it more of a neighborhood for flips than for rentals though, because most of the homes are large single families where the purchase price/reno costs generally are too high compared to the rent you can command. 

When I'm helping clients find cash flow rentals in Baltimore I'm usually targeting neighborhoods that are mostly rowhomes - the price:rent ratio on them is generally much more favorable.