All Forum Posts by: Joe Norman

Not sure what state you intend to get licensed in to start, but before you get too far along I would check with the Real Estate Commission to confirm that your end-game (AI decisions only, no human broker in the loop) will pass their muster. I doubt that any REC would license a brokerage that didn't intend to have a licensed broker reviewing decisions and documents.

Sounds like a cool idea though, good luck!

 I think so, however the common areas, including exterior, would need to be Lead Free as well. That said I'm not 100% confident in this answer so take it with a grain of salt. I suggest calling up a lead inspection company or two, they will likely be able to answer your questions with more certainty.

I love my Dundalk rentals. All have performed well and rent easily. There are a few Dundalk neighborhoods I'd stay away from but for the most part it's a great area for house hacking/BRRRR. Feel free to reach out if you have any specific questions about the area.

First you have to determine if you want to go Lead Free or Lead Safe. Lead Free involves more expensive tests and has a higher standard, but you're "one and done" in terms of licensing and registration. Lead Safe certificates have a lower standard and the tests are cheaper, however the certificate and registration needs to be renewed regularly. If you're doing a "pretty large renovation" then I would suggest shooting for Lead Free.

Next you have to hire a company to do the test. Note that most all lead inspectors will do dust swipes (Lead Safe tests), but not all have the equipment required to do Lead Free testing so be sure you're specific in what you ask for. 

Assuming you fail the first test, you will have to perform the remediation work and then call for a re-inspection.

One you have a passing inspection you can apply to MDE for your Lead Cert (many lead inspection companies will handle this for you).

Good luck!

The contract shouldn't affect your basis, that will be based on what you pay for the property (unless there's some money changing hands outside of closing, which probably wouldn't be documented in the first place). The legitimacy of the contract probably only really matters if you have to go to court/arbitration to enforce it.

That said, your title company would be a good place to start in terms of getting a legal review, I'm sure they have a real estate lawyer(s) on staff or retainer depending on the state.

As mentioned above, the liability and tax benefits of an LLC are really minimal. IMO the main benefit is anonymity if they are set up properly.

If you register your LLC in a state outside of Maryland, then be sure to register it to do business in Maryland. Otherwise there could be signficant taxes and fees if you sell as an out of state owner.

Utility management can be a pain for sure. One suggestion is to call the utilities and see if they have any solutions for Property Managers. For example our local gas and electric company (Baltimore Gas and Electric) has a program called the Automatic Change Name program that PMCs can enroll in. If a tenant stops service then BGE will automatically change the account over to our name so that service doesn't lapse. 

For water we always keep that in the owner's name (since, in our area at least, water bills run with the house and not the customer). We log in weekly to pay any bills and then invoice the tenant.

Most other utilities (cable, internet, etc) we don't get involved with since they are not requirements under our lease agreement.

Good luck!

This goes against the general concensus, but I'm not a big fan of borrowing money to borrow money. My advice is to buckle down and save enough for down payment, closing costs, and emergency/rehab fund before you make another investment. It sucks to go slower than you want to, but in the long run I think you'll sleep much better at night. In addition to adjusting your personal budget to save more, a side hustle can be a great way to quickly pad the bank account. Good luck!

Market research will be your first step. Find a few that you are interested in and then interview a few Realtors who have a track record of success working with Realtors. If you have $50k to invest then you will probably be looking at properties in the mid-to-high $100s (assuming you're putting 20% down + closing costs and a little cushion). I can only speak from experience on the Baltimore market where you can definitely find quality rental property in this range. Other rust belt cities such as Cleveland and Detroit are likely also good options, but I can't speak from experience on them.

All that said, why buy a rental property instead of a primary residence? The lending terms (specifically the down payment requirement) are generally much more favorable for an owner occupant and you can always convert it to a rental property down the road.

Good luck!

My guess is that your acquaintance was suggesting paying the equivalent of half your mortgage payment every two weeks. Since there are 26 bi-weekly periods in the year, that would result in two months where you pay 1.5x your mortgage or one extra payment a year.