All Forum Posts by: Tim Jacob

I obviously people like saving money however a lot of people come to Baltimore with an idealistic perspective motivated by greed and leave feeling dwindled as they default to a lwts do the cheap thing mindset everytime and have unrealistic expectations as a result. The worst case is they have 1 property workout where they were lucky to get a tenant in that asset class and they think they can replicate that time after time and 4 or 5 properties in the luck runs out and it becomes a nightmare when they make little to no money. I recommend an A or B grade area. If you invest there you can probably get good tenants. Even for a 2 bed that is running into the low to high 100s. If you go much lower you are looking at renovation or a lesser asset class. The ideal scenario of 70 dollars for maintenance and Capex in c or d grade assets even if you self manage is not the realistic scenario. Its the fictitious scenario. If you get the grass cut because you don't want to go there thats running you probably atleast 30 bucks for someone reliable for a townhouse yard which leaves only 40 in an asset class where that is just not going to cut it. Honestly even B or A grade stuff will cost more and thats if the tenants don't break things. Also I would factor in water and electric/gas charges to some degree. It should be very small for turnover but in c grade stuff add more for water. I would say $75 to $100 to be realistic. A good agent will help manage your expectations. What you don't want is to purchase a problem and then after that expecting a property manager to save you from an unsavable situation. I'm an agent that has been in property management and contracting before being an agent a lot of it in the Baltimore area and I own property in Charles Village as well. Let me know if you want to discuss things.

It sounds like you want to stay in really nice parts of town along the 83 corridor.  For something in those areas maybe there is enough of a margin if you do a large rehab to flip or brrr more effectively though I still would try to avoid redoing an hvac system.  There are a few other city neighborhoods up that way that are fairly similar as well sometimes a little cheaper but with the same neighborhood quality that might be slightly further from trendy shops though a better bargain.  There are numerous cases of this along the 83 corridor.  Let me know if you want to talk.  

It is possible however I would budget a decent amount into renovation with labor and especially material costs trending higher than a few years ago. 1 possibility is get something somewhat turnkey. When you get beyond cosmetics and into doing a boiler to central hvac conversion costs really start to spike. If you can get something with atleast partially newer Capex stuff it would be helpful. If you need help estimating costs let me know. I have done all sorts of renovations in Baltimore.

Also let me know you budget and preferred house size, type, and amenties.

1 thing some people are estimating is that the rates will come down in a year or 2.  If they come down to what they were before covid and then a possible refi at that point.  Say 4.5-5% things could make more sense.  Maybe in the next couple months things get a little better for home prices bc of the interest rates but at some point that will stop.  Before this there was the eviction moratorium.  I feel like there will always be something negative to figure with risk which is what will help make the deal better.  

You can apply when you have to renew they just had a deadline of 9-1.  If your valid for that the next time is on 1-1.  After that it is usually annual.  Wasn't this time because of covid.  The inspection is still valid until next year when it expires.  Usually 2 years initially then 3 years.  At that time you will need a 3rd party inspector.  You will need your closing docs showing your ownership to obtain a renewal license uploaded to the city registration website.  

I would recommend staying within driving distance.  I think the high side of your budget could get you something turnkey in an area of Baltimore that you could get someone to lease for you and manage yourself or not have many problems with property management based on the area.  I really recommend getting something in an A or B grade areas of town and not any less to avoid the headaches.

In Baltimore precedent was established you can evict for tenants holding over at the lease end without a rental license.   You just can't for failure to pay rent.

You don't need an attorney in Maryland.  However you should really know the law.  You can use holdover or failure to pay rent.  Since you have no license a failure to pay judgement can be voided until they get the license.  Id get a lawyer or equivalent for the tnho.   Some of the best people are not lawyers but property managers who specialize in c grade rentals.  You will need a termination letter with a legitimate reason as you have just cause there then give another 60 days before filing for holdover.  The lawyer or pm can help you.  Tell them its going to be a few thousand for that route.  I'd get the license as well which will require a rental and possibly lead inspection.  Lucky for them the whole process is now 6 months or less vs a year ago where you can add another 6 months.

Other option is sell it as is with the bad tenant and offering an extreme discount.

Good luck.

Be real careful with that at cost maintenance.  You don't want to screw yourself bc someone here did a bad brrr then you wind up basically project managing the last 20% of there reno for merely the property manager fee.  Example a person gives you a portfolio of 10 homes and expects you to compensate for there poorly done brrr but there are 10.  They should have spent 10k extra per house now the tenantios complaining bc of the shoddy work.  Now you get to project manage the extra 10k times 10 for only your 8-10% fee or whatever you charge and bc all the project management  takes so long make less than a high school McDonald's worker before restructuring fees or quitting.  Get what you deserve based on the responsibility you take on.  Structure them up front..  Probably won't happen with getting people leaving the property they loved in bc of a job relocation or something else.  Charge a markup on that if you are not at the level of in house stuff and be careful what sort of maintenance you delegate out.  Some stuff the handyman can't handle.  Also be careful of who you hire for that.  If they are an addict the negative effect will manifest into tenants terminating earlier even if they do a decent job.  If you do not know what can be handled some is of course common sense but some of it will be gained in experience.  

To keep your clients and get better things will come in time but the biggest thing would be managing your clients expectations and avoiding bad clients to ensure you are getting paid what you are worth.   

Probably an easy no however one question is where is the property.  Also how long does it take to evict someone in that jurisdiction.  Also would lowering the price get more applicants.  I would rather take someone at a lesser rent than someone that is such a huge risk.  If this is D grade and you lowered things enough and evictions are 3 or 4 months then maybe.  Anything higher and I would say no.   I dont work in D grade anymore and dont want to manage anymore C grade stuff for others.  I only own B grade and recommend that or higher to investors to give you an idea of my tolerance from doing this awhile.