All Forum Posts by: Joe Norman

I don't think it's ever too early to start speaking with Realtors. You don't necessarily need to sign a Buyer Representation Agreement right away, but it's good to start the relationship building process. Plus a Realtor can give you MLS access, send potential opportunities to you, and generally help you get a better feel for the market. They can also refer you to lenders and property managers so that you can start the relationship building on that side too.

Another potential issue to pile on here, besides the numbers which Lydia laid out well, is the assignability of the contract. Since you say it was "listed" I'm assuming that that means it was on the MLS and that the seller is represent by a listing agent (if that is not the case, then the following is probably moot)...

In 99% of transactions where the seller is represented by an agent and the property is listed on the MLS, the state Board of Realtor's standard sales contract is used, and the majority of them (if not all) are explicitly non-assignable. Be sure to check what you're signing and confirm that your contract is in fact assignable.
 

Great question, and I would 100% start with finding a great Realtor who has relationships with great lenders. Plenty of buyers/investors come to me without financing already lined up, and thats how I prefer it so that I can connect them with lenders I trust to get the job done and take great care of our mutual clients.

That said, what I generally won't do is spend time showing houses to a new lead who hasn't gone through the pre-approval process yet. Don't be surprised if your Realtor has the same policies in place.

Just like with any other type of service, it just really depends on who you hire. There are mechanics out there who will do a great job maintaining your vehicle to prevent headaches, and others that are sleezy and charge you for work that isn't needed/isn't performed. There are fantastic Realtors who go above and beyond to make the process of buying/selling as stress free as possible, and others that you can't even get on the phone.

So, to answer your question "Do property management companies really prevent that many headaches? Is it really worth it?" - it depends on who you hire. 

Concur with Richard's post above - the firs step is to check your management agreement to determine what it says about termination. At that point you can take the appropriate steps which should be done in a verifiable way (certified letter AND email, IMO). At that point notify the tenant (CC'ing the PM) of the date that management will change over and where they should start paying their rent.

Collecting documents (lease agreement, rental license, lead certs, etc) from your current manager may be a PIA, but well worth it if they are not meeting your expectations.

One more thought - if you live in a state where PMs are required to be licensed you can file a complaint with the regulatory board.

Good luck!

I personally target properties in the $175-225k range so I think you're on track and shouldn't have much trouble in Baltimore (or Dundalk!). In addition to the neighborhoods you mentioned I would check out the Northwood area. Happy to chat more if you want to shoot me a PM!

Keep it simple and do not form an entity yet, unless anonymity is very important to you. The only upside to an LLC (besides anonymity) is liability protection, and you can get that with a simple umbrella liability policy.

There are, however, several downsides:

-financing is more difficult (and more expensive) for an LLC then it is for an individual

-you have to do yearly filings (and pay the associated fees/taxes...at least in Maryland)

A few things to consider/do:

-Adrienne makes a great point about the capital gains exception for primary residences, reread that and factor it into your analysis

-What are your minimum criteria? Be sure to evenly apply them to all applicants to avoid the perception of Fair Housing violations

-How will you do credit/criminal/eviction screening?

-How will tenant's apply? Do you have a paper application or will you be using a website?

-What is your pet policy?

-Do you have a lease agreement?

-Does your state/municipality require a Rental License?

-Was the house built in 1978 or earlier? If so what are the requirements for lead paint testing?

-How will you accept rent payments?

-Does your state require a separate account for holding security deposits? 

-Adrienne makes a great point about the capital gains exception for primary residences, reread that and factor it into your analysis

It really depends on who's asking. For marketing purposes the seller/listing agent can call anything a bedroom that they want (their reputation might start to suffer, but there's nothing stopping them).

Buyers are going to see the room through the lens of their own needs (did they want the 3rd bedroom for a true, private bedroom, or are they looking for a home with 3 bedrooms so that they can have an office space?).

HUD Appraisers are going to have different requirements. Local housing authorities (or other organizations that manage voucher programs) are going to have another opinion.

Long story short: whether or not this is a 3 bedroom house depends on who's asking and why.