All Forum Posts by: Stephen Predmore

Rentometer.com for Burleith Ave 21215 3/2 is ~$1250

Rentometer.com for East baltimore St 21224 3/2 is ~$2000 

Rentometer.com for Random Rd 21229 3/2 is ~$1475

I would have your realtor pull actual comps if you want some solid ARV's

@Ned Carey  Thanks Ned.  That means a lot!   

Property is in 21212 Richnor Springs

Scott was great. Really knows his stuff. I needed to go the commercial loan route due to a high DTI.

I'm glad I finally got my first property under my belt.  I had so much anxiety about pulling the trigger.  Now that my tenant is stabilized, paying all the bills and I'm cash-flowing, I'm kicking myself for not doing this many years ago.

@Dag A.  @Andre M. Thank you.  Property is in 21212 zip code.  
I found my contractor through the 'Maryland Investors Network' Facebook group. He was also recommended by my lender.

@Tyrone Marson Running through my numbers again - contractor was about 34k, additional 3k that I spent on appliances (1.5k), paint, tile, lighting, smokes, blinds, screens, vents, dehumidifier, locks, etc.   I saved some money by doing the entire house painting and backsplash tiling myself.   

Investment Info:

Single family rowhouse fix & hold investment in Baltimore, MD.

Purchase price: $65,900
Cash invested: $35,000
Rent: $1,400

What made you interested in investing in this type of deal?

Baltimore is a great cashflow market.  Lots of colleges, hospitals, industry.

How did you find this deal and how did you negotiate it?

MLS. Offered 3k under list price and they accepted.

How did you finance this deal?

Commercial loan (thru my LLC) 75% LTC and 100% rehab. Used 401k loan for down payment and closing costs.

Rehab completed?
New kitchen, flooring throughout, semi-major plaster wall & ceiling repair, replaced part of flat roof/gutters, paint, new appliances.  Minor electric and plumbing.

Lessons learned? Challenges?

Purchased right at the start of the Covid-19 crisis.  Friends thought I was crazy.  Rehab was completed in about 6 weeks (10 weeks planned) due to my contractor having 2 crews able to work on the job (they had other Covid cancellations).   Hired property mgmt company for photos, listing and tenant placement (cost = 1st months rent).  Well worth the cost for me as a rookie.  Currently doing the PM myself.  Using Apartments.com for rent collection.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I worked with my agent, @Joe Norman.  He's a great realtor and investor himself.  Would absolutely recommend him to anyone. I used Scott Freitag with Eastern Savings Bank for my commercial loan.  Awesome as well.

@Nat Rojas  Check out Scott Freitag at Eastern Savings Bank.

@Jerrel Dobbs I suggest you join the 'Maryland Investors Network' Facebook group.   There you can find lots of recommendations for attorneys, realtors, mortgage brokers, contractors, etc.   It's a very active group.

@Scott Freitag is a great investor-friendly mortgage broker.

Also check out the Facebook Group 'Maryland Investors Network'.  Scott is very active there.

@Michael Lopez  If you quit your job when you have an outstanding 401k loan, then yes, the loan would be immediately called due.  Still no tax penalties.    If you didn't pay it back in a timely fashion, it could go into default which would trigger the IRS 1099-R form (distribution/withdrawl from the 401k) + tax penalties.

So don't quit while you still have an open 401k loan.

The length of the loan is flexible however.  I was able to pick from 6-60 months payback period.  If you know when you are leaving the company, you could plan a loan length around that.  Use the loan while you're still employed.

I second the 401k loan idea.   A 401k LOAN is different than a 401k WITHDRAWL.  There are no tax penalties on the loan.  I am paying myself back over 5 years at a 5% rate.

I just used this method to take a loan (smaller of: 50k or 50% of the current balance) thru Fidelity, my 401k administrator.

One could argue that the %potential growth missed is greater than the 5% rate payback.

One could also argue that the missed time of not investing in real estate (due to lack of startup funds) is greater than any potential gains in a 401k.