All Forum Posts by: Sebastian E.

25% down on a multi unit in Baltimore City in an up and coming area. 

In my experience in Baltimore City they are just more work. You can make more money but you either need to put in more hours or hire people to handle the greater workload, so depending on how you value your time and how much you are paying people it might not be the best use of your time. I am in the process of putting all my properties under management because I was hitting a ceiling with the amount of time I was putting into management which was stifling my growth. I think it can be a good strategy if like you said you have good systems in place. 

@Tony DiDomenico I made it a point to try a few different models in Baltimore and I took some licks along the way. I think it is a great place to invest if you can manage your tenant and regulatory risks and also figure out how to finance and execute your renovations so that you can pull your money back out have been the biggest hurdles. The last part around the refinance can be a particular challenge but I have figured out some ways to get around that now as well. Happy to share what I know.

Hi @Brad Wood Congratulations on deciding to invest in the RE market in Baltimore. I started my RE journey in DC househacking a quad and then about a year and half ago began investing in Baltimore City. Baltimore is different from DC in that there are a lot of "up and coming" neighborhoods depending on who you ask as opposed to DC where things have already up and come. With developed neighborhoods like Fells or Patterson Park you will not find great investment opportunities unless you are doing a flip or a house hack. Because there is high demand for these areas by homeowners it compresses the cap rate and then you can hope for appreciation but there are a lot of people who have been sitting around Baltimore waiting for appreciation while nearby markets like Philly and DC have experienced tremendous growth since 09. 

I own a variety of rentals, so to answer your question it depends on what your goal is. If you want to maximize cash flow then room rentals can be very appealing in areas around a hospital or even in class C areas. There is a large part of the population here who rely on cheaper housing options because the incomes here are quite low. The area of the city where a bulk of my out of stat investors are investing in is on the East side where you can buy properties for between $80-90k invest $25k in them and have them appraise at $140k and rent for $1200 - 1400. They aren't home runs but with this strategy you can slowly build up a decent portfolio of rentals that cash flow at $300 a door. 

It is a great community here so feel free to ask questions and i'd be happy to help out in any way I can.

Awesome. We have the quorum! The name of the group is: 

Hello BP folks in Baltimore and surrounding area. I am starting a Baltimore meetup group focused on building community around topics of financial independence. Some of these aspects will include: househacking, real estate investing, as well as broader personal development topics. All are welcomed to join. Please search for the group on meetup.com 

Hello @Eric Lawson I have heard of agents charging an upfront fee in Baltimore and then crediting it back to the buyer at closing if they make a purchase. I don't do it, but I don't think it is a bad strategy.

With the flat fee, because prices are so low in Baltimore, we do have a flat fee for all transactions under 100k. All respectable agents who I have come across have a flat fee. There are ones who will do lower dollar transactions without one but if they don't really value their own time then you should question whether they have the competence to get you through the transaction. We will bend on our flat fee if it is a person buying a flip for example since there is a larger commission the back end.

Happy investing.

Seb

Hi Brian welcome to investing and the forum. What are the numbers like on your deal? My main suggestion if you plan to scale is to put the property management. It was a choice that helped me to accelerate the growth on my business when I made that choice. There are different schools of thought on it but for me having those aspects taken care of enabled me to focus on growth. 

Happy investing :)

Hello Robert. I own in DC and Baltimore at the moment but I have started putting offers  in Lancaster. I think it is an absolute hidden gem. The cap rates are great and definitely feels like there are certain neighborhoods in a good path of progress. My theory is that Millennials are going to start moving into what I call tier 2 or tie 3 cities like Lancaster, Pa. I would consider NYC, Boston, Seattle, SF, Austin etc tier one cities. It's where a lot of jobs are but the living costs are far too high. There is quite a bit of variability when you get out of tier 1 but broadly speaking some examples are Boulder, Co,  Gainesville, FL;  Raleigh, NC, Grand Rapids, Michigan. These are places with lower costs of living and high quality of life. They are areas with high concentrations of educated people, convenient geolocation, and lower rents and real estate prices than your tier 1 cities. I think the economics and more teleworking is going to end up shifting where people want to live. After spending 9 years living in DC, I think there are many draw backs to living in a tier 1 city that aren't really factored into real estate prices. 

I think Lancaster has the possibility of being such a town that could attract people. I am happy to connect you with the agent who I have been working with there. He has been great.

As for Baltimore City. I just went under contract on my second house hack. Happy to share my strategy.

Seb

@Dara Thomas for house hacking? I like Union Square, Hollins Market, Reservoir Hill, Seton Hill. Basically anywhere close enough to to the hospitals. I am sure you can do it on the east side too with Bayview Hospital but I am just not as familiar with that area.