All Forum Posts by: Joe Norman

Another vetting question to keep in mind when hiring a property manager in Maryland is "do you hold a real estate license"?.

Maryland is one of the few states that does NOT require PMs to be licensed, which means there is no state board or regulatory body over seeing them (i.e., there is no recourse, short of the judiciary, for members of the public who are harmed by a PMC). However PMs can choose to hold a license and submit themselves to the scrutiny of the Maryland Real Estate Commission, and I would personally not use any PMC who doesn't have this extra layer of accountability.

Agree with @Nathan Gesner that "safe" is very subjective and vary's by location and individual. I lived in Salisbury for a few years and personally didn't find any part of town where I felt unsafe (albeit that was about 20 years ago). To determine the quality of a neighborhood (which includes saftey/crime) I will generally look at real estate values/rent rates more than crime demographics. Compare the #s in the neighborhood you're looking in with comparable homes in other neighborhoods - if there is a big discount then there is probably a reason for it.

Do a couple of deals WITH representation first, then decide if you want to pursue a license. You don't know what you don't know, and I promise you that the Pre-Licensing Course will not teach you the ins and outs of being a successful agent/investor - they are only designed to keep you out of trouble.

Welcome to the BP community Scott! It sounds like your goal is cashflow, and there are plenty of markets within an hour drive of Columbia where you can find deals that will cashflow in Year 1. Good luck!

Second for Baltimore if you're looking for a good investment under $200k, but please reach out to @Tim Jacob or another local expert. Baltimore is a tricky city and the numbers (ARV, rent rates, appreciation) can vary significantly if you just go a few blocks in a different direction. We here in the Baltimore market have seen way too many out of state investors get burnt because they don't know their comps.

I don't know about your state, but in Maryland if your realtor sent the termination notice on the proper form (the Property Inspection Notice) and you are within your inspection period then no response from the buyer is required to make the termination "official" - its done. 

Obviously your state could have different procedures/requirements for termination so I would check with your agent on specifics and, if you are satisfied with their response, loop in their broker.

Good luck!

Its hard to give solid advice with more details, but on the face of it this does this doesn't look like a great buy at $515k. If the house needs renovation to make it "complete", and is only worth mid-$400ks after repair, then $515k sounds like you'd be overpaying.

Some mitigating factors might be (1) if this is a rapidly appreciating area and that is your primary objective, or (2) you intend to live in one of the units and are willing to pay above market value because its a place you really want to live in.

How does your Realtor justify their advice to offer so much over what you think the ARV is on a house that still needs work?

The downside is the hassle and expense (in Maryland we have to pay $400+ filing fees every year to keep the LLC in Good Standing).

The upside is the potential for limited liability, however I've heard from various lawyers that the corporate veil is easy to pierce unless the LLC is completely separate from anything in the owners personal life. IMO liability risk can be handled with an umbrella liability policy, which (again, IMO) all property owners should have anyway.

The other upside is anonymity, which is the reason I recently transferred my properties into an LLC. For me, keeping my name and home address out of the public eye was worth the expense of starting an LLC.

Dana is spot on. Transferring ownership of the property to an LLC is usually pretty straight forward (although not always desirable). Mortgage companies are very unlikely to transfer a conforming loan to an LLC though, because it gives them less recourse if things go south. There is a reason that commercial loans are more expensive than personal ones.

It's important to note though that you usually do not have to do both. If you change ownership to an LLC that is solely owned by you then lenders usually don't care (or even notice) as long as you continue to make payments on time.

The Pros of the auto job would be full time income and a W2 for lending purposes which would allow you to start investing in real estate (either by buying a home to live in/househouse hack, or to rent out).

The Con of the auto job would be that you have less control over your time and earning potential.

The piece of information that we don't have, and I think is important before giving advice, is "what is your current financial/living situation"? If your living situation allows you to go a year or two with minimal income then maybe it makes sense to hop into real estate full time and build your business. However if you're currently burning through your savings to cover personal overhead then get a job yesterday.

Good luck!