All Forum Posts by: Tim Jacob

Yes she overpaid.  I looked at the turnkey providers website and a lot of their stuff in the city I would not touch.  I wouldn't purchase them if they were half the price they are listed at.  They have a county option that might be better but I didn't see prices on the properties there nor the addresses of them listed.

200-230k are not marginal neighborhoods in Baltimore for single family rentals.  That price point should be able to get you into a B grade rowhome with 3 plus bedrooms and often times more than 1 bath.  They should be in decent shape.  For that range I would like above 1700 maybe up to 2000.  Turnkey or close to it B grade should not be too far off a 1% rule property in Baltimore.  This seems around .75%.  For that range you should not be having problems as you should be in B grade other than maintenance for capex that is missed but that is only a year or 2 and not vacancy.  .75% in Baltimore should be A grade with lesser vacancy and only potential initial maintenance. 

I'm a realtor that owns and manages a multi family in Baltimore City.  Additionally I manage them for other people.  My biggest recommendation is its better to get a duplex or single family in a neighborhood you want to live in and can get good tenants than something that's 3 or 4 units and in an area that can be problematic.  There are plenty of good neighborhoods you can buy in that will be good investments and cash flow very well in the city.   

I would think about the area around it.  I househacked in Rockville a while back for years and have managed a similar situation in Silver Spring.  Both went very well.  One thing I would focus on with that is walkability to the metro.  Even so I think having a college walking distance or metro or train station is atleast as good in that regard.  If it can be a half mile or less ot really helps.  To attract decent people I would look at neighborhoods that are safe.  Also on-site washer/dryer is a necessity.  If you can combine this with a functional place and cosmetic reno you can attract decent people.  I think Baltimore city in parts near colleges and College Park would also work.  For Baltimore City if you are near JHU, Towson, or Morgan you should be in good shape.  College Park has University of Maryland which is huge.  Something to note is the legality of how many unrelated people can legally live there.  In Baltimore County that # is 2 so in Towson that could void a 3 bedroom or more from that.  In PG County its 5 so in College Park you could have a 5 bedroom charge.  In Baltimore City is 4. I have managed househacks near University of Maryland and Baltimore City and continue to.    Both have been very successful with little drama or vacancy issues due to good screening.  I want to be clear especially in Baltimore City it only really will work in certain parts. It is not a place to househack some C or D grade asset bc its cheap to purchase and wonder why things go bad shortly thereafter.  If you need help let me know.

As was stated in MD you can only collect 2 months deposit.  That includes for a pet.  I screen on credit, employment, and rental history.  I don't know where your place is but for a place you can charge over 2k for rent you should probably be able to get someone with high credit and good income in Baltimore.  I have had zero issues with that.  Once they meet that requirement and I would say 700 minimum score than I would be comfortable with only 1 month deposit due before giving the keys over with the first month rent as well.  I would require a cash or money order payment for that.  If they have a cat, dog, pig, iguana, guinea pig, monkey, large turtle, or other pet that cannot be contained to a cage or tank  I would look at your flooring type and require additional deposit solely for that.  If LVP or tile you can require less but if its a lot of carpet the vise versa.  

If the applicant gives you any excuse and then asks to work with them and that they can't afford what you are asking and they want a pro rata payment then deny them on the spot.  This will almost never happen with the 700 plus credit crowd.

I think at that price point you certainly could get a turnkey property in a quality area of Baltimore.  What part of town was it in?

I would just do them.  Nothing seemed to hard on their just handyman work.  My favorite was the time an inspection passed except for the fact that the tenant was dirty and had a bunch of clothes on their couch.  Apparently section 8 thinks its on the landlord to tell the tenant to keep their apartment or house clean on top of everything else the landlord has to pass.  Section 8 wants their tenants coddled like children.  That's super equitable for everyone involved don't you think.

The whole I can self manage from afar but only want someone there to do small stuff is aggravating for a lot of people in real estate and makes them feel like they are getting nickeled and dimed.  Whoever is left I would really question unless they are family or friends.  I would either have a leasing agent lease stuff for you and self manage, do everything from afar,  or have a full property management agreement.  Download google translate and you can communicate via text with them otherwise.  Good luck.

With a brrr keep in mind the closing costs for both the purchase and refi.

Screenings are an absolute must but to say it doesn't matter if its an A or D neighborhood is flat incorrect.  Can you get a bad tenant in an A or B grade neighborhood.  Sure if you do a bad job screening but its not hard to do a decent job screening and get a good tenant.  To get a good tenant in a D grade neighborhood that stays a long time is much harder.  I would rather own an A or B grade asset in Baltimore or even California than own a D grade asset in Florida or somewhere way more landlord friendly.   That's because I know I won't get a bad tenant because I will screen them and get good people and I can trust a reputable property manager to screen them if I ever needed to move.  They would take the job because they know in an A or B asset class they will be paid what they are worth.  They won't take the D grade asset because its a headache and they will not be paid what they are worth.

The problem is some new investor will hear that it doesn't matter whether its an A or D grade asset and think well I might as well go cheap with things in D grade then find out the hard way experiencing a world of hurt.