All Forum Posts by: Tim Jacob

Assuming parking and a w/d this time of year $1800 if you want to fill it quick however in a month or so I would bump that up and try to get 2 even.  You dont have a second full bath so that would be the highest.  I did lease an updated 3/1.5 earlier in the same zip for 2.2k  it was right off the Ave though.  That is real close to Union Collective so you can market that.  I personally like that more then Rotunda or the Ave but there is definitely more stuff at the other 2.  

I would start networking by going to meetups and talking to various people in the industry.  I'm sure you have started to get some ideas of what might work.  Run them by here on the forums and by people at the meetups.  If you are still renting in DC maybe buy a place with an extra bedroom or 2 you want to live in and rent the others.  That way your housing payment is going toward your net worth.  I would consult someone to make sure it can be a good rental if that is your plan if you leave assuming you don't want to stay in DC.  I would get a real investors agent.  If making it a rental is where you are heading toward.  Someone that can give you real estimates about capex repair after inspection based on real experience.  Someone who has real long term experience in property management and leasing.   Someone who knows the neighborhoods.  A lot of agents can just give you comps and give you very generic information in terms of renovation like a bathroom costs x and a kitchen costs y. Some agents can give you more accurate analysis then ballparking maintenance/repair/ renovation and expectations over the difficulties of property management in the area.  A lot won't go that far and considering they are paid by a seller I would try to get someone who can give the best advice even if its not a friend or a friend of a friend/relative.  If they sound disinterested or not willing to go the extra mile I would go with someone else for properties you haven't seen yet.  

Other advice is being local unless the property is legitimately turn key.  I would be very apprehensive over a so called turnkey company.  I have seen a few in my area and they basically renovate properties in horrible neighborhoods and market them as turnkey to out of state investors who don't want to come to the property by telling them some lies about how they can just sit back and collect a check.  The pictures are nice but things don't work out usually because of the tenants.  A heavy renovation is a lot to trust to other people unless you really compensate them and there goes the profit.      

I lease stuff up that way a lot.  You should be able to get good A+ tenants with adequate leasing and screening.  Furthermore the area will most likely appreciate.  I would keep it unless you need the money.  Might get undercut in  this rate environment. 

One of the biggest reasons to invest in this versus small multi family is simply inventory.  There are so many more single families in every market and in newer markets multifamily can be extremely scarce though I have heard how certain areas are encouraging ADUs to aid in the housing shortage.  A lot of people don't really want to  devote the amount of time or money that is needed to fix up an older place.  A lot of people who did regret it and wish they took the turnkey route or atleast not as much renovation.  I recommend watching The Moneypit.  I understand some people genuinely enjoy fixing properties and not everybody regrets it.  If you can get a relatively turnkey property with only cosmetic stuff that could be another option.  A boiler central hvac conversion for example in a good asset class is something that would get better tenants however they are extremely expensive.  In a multi its not just installing the condenser, coil, and furnace.  Its running all the duct, finishing around the duct, possibly upgrading the electric service, running individual electric to each condenser, possibly upgrading each units breaker, and running flex line from the gas connection in each apartment to where the furnace is assuming you can tie in off the stove.  There are other multifamily issues that can be voided as well unless you find one with everything which again will be hard to compete with every local investor on.  When you factor everything in you can find them but I would still consider the single family with at least newer capex.  Trust me the snowball can grow real fast.  I would at least be patient with a realistic estimate on work and what will be a burden.  If you still find a multi that is economically viable great but for many single family could be the best option.

I think it depends on the neighborhood. In Baltimore 100k doesn't get you far. I understand you got it off market and it was a fixer upper. If you are in an A or B grade asset I would be inclined to keep it. If it has 3 bedrooms and is 240k ARV it might qualify for that. In those areas you can spike rents and in a few years be cashflowing better along with having stronger resale value. Assuming you don't need the cash it wouldn't be a bad deal. Hence it could be a hedge against hyper inflation if things get worse. If its lesser than that I would sell it. Base it on tenant quality more than anything. Depends on your situation most though.

These can be a real pain.  Sometimes its difficult like others have said in regards to the bird dogging and the fact many holders of ground rent are in deed deceased.  One thing I would make sure of is in case a new person/ company assumes the new ownership of it through right of survivorship or something else be sure to have the address you get your company billing stuff at on the SDAT form or someone you really trust.  If they start asking for the ground rent and it remains unpaid they can literally start foreclosure on your property.  They can do this over the diminutive annual or semi annual amount of $100 or less.  If the lawyers get involved the fees will be spiked up to close to the full redemption amount. Same thing can happen with not paying environmental fines in Baltimore City which can be not cutting your grass and start at $50.  Those fines can be even worse.     

@Jayson Valdez

Here is what I would do if I was to invest out of state. First get in touch with lenders and get preapproved. While doing that go on google and get in touch with some property management companies in the areas you are looking with good reviews. You can find them on here as well. I would ask them which areas are worth investing in and what strategies and types of tenants will I get in those areas. They dont want a tire kicker but if you are brief and concise you might get some good information. After asking a few of them I would compile a list of properties in those neighborhoods. I would highly recommend going as turnkey as possible as heavy reno work from afar though possible really throws in a lot of variables that can go wrong. BRRR sounds great but what people don't tell you on here are all the nightmares of when they go wrong. I would atleast gain momentum with a tunrkey 1 first before doing a BRRR. Maybe the second or third time you will have established a good pm who also might be a contractor or know good ones and a BRRR will be better.

After narrowing down neighborhood and good PMs will tell you to avoid D grade stuff and some will say C grade as well narrow down your neighborhoods.  Then call reputable agents with preapproval letters which will be a reason more agents will work with you, so they can start walking houses with you remotely.  At this point I would start making offers.  Once accepted I would fly out and walk the neighborhood personally.  I would do it not just at 2 PM but at 11 PM on a weekend and weekday.  If the area is unsafe which should have been voided during the previous process you can just walk from the contract.  Think of the plane ticket as a chance to see a new place at the same time.  

Before doing any of this I would look into area landlord tenant laws of the area.  Some are very tenant friendly and hence profitability at even C grade asset quality can be tough to obtain.  

Don't trust anyone too much, eliminate as much risk as possible, budget accordingly, and don't be cheap with your team and you can do alright.  

@Eric Teran

This last post was informative.  I really like the note about the underpinning. I found costs can really get up there and get even worse if you have certain types of preexisting foundations that are common in old buildings as many in DC and other east coast cities have.  Where I looked at adding units in other jurisdictions they said they needed the entire building upgraded with sprinklers instead of just the one unit that is being added.  It seems either case you are looking at street construction to upgrade the preexisting water line diameter for fire flow from the street which will be a decent amount if you need to reroute traffic.  Based on a need for housing are places giving variances on this as well as voiding the need to run new fire flow lines in the other preexisting units.  It seems at minimum they should be reasonable about the other units.  Can you get around the street line upgrade by putting a hot tub sized tank somewhere like a fire pond and cistern in rural areas or being close to a hydrant with a siamese connection like in commercial.  It seems everyone is complaining about a lack of housing in certain places it seems they are willing to bend on atleast firecode but not others.     

A few things.  1 the time of year is bad.  You said university students are a large part of the tenant base but the best time to lease to them is late spring to mid summer.  If you don't go section 8 I would end the lease then and really spike rent if the tenant wants to go month to month to ensure turnover is in a better time.  

That might be the reason its taking a while.  Options would be lowering the price.  I think if it was priced even a little low it would sell.  Maybe the comps are close but in a slightly better area.  Or lease g was done in a better time.  Either way lowering 100 would not be that bad.  

If it is truly a B area I would not take section 8.  Section 8 usually is good for C grade areas. They can usually demand better than d grade but B grade means ability to get someone with 700 plus credit though it might not be as easy as A grade where you can just set up 1 open house and get them.  If you can get someone with 700 plus credit and 5x or 6x monthly  income over rent it should be smooth.  Id rather get that sort of person at 1400 then section 8 at 1500.  you can deny on credit btw to reject section 8.  There are a few places were woke stupidity has said you can't screen on credit.  SC is not 1 of them.  I'm sure landlord are really respecting that where its happening.  Lol. 

As others said get out of it and take the loss.  Its just 1 property.  Jay Hinrich hit D grade rental investing nail on the head.  Self manage that asset as  decent Property Management only works in C grade at the very lowest.  

Maybe a good way to look at it is instead of paying a guru for education you got this experience through the school of hard knocks. 

A good way to figure asset quality is call a PM company with good reviews and ask them what they would manage where you are looking to invest.  Decent Property managers need to make money as well.  If they say no steer clear unless you want to be hands on dealing in the hood with tenants self managing.