All Forum Posts by: Tim Jacob

In most places in the county finding good tenants is possible.  Like has been said you might need to filter as a lot of the places are c grade.  If you are leasing yourself and have a long drive think about someone else leasing and the price being right.  Its bettter to rent at 1500 and have an easier time getting the right person then chancing it at 1600 and getting the wrong one.  Dont make someone lease at a rate too high for an extra 100.  They will take whomever if they think you are wasting their time and then that will be a problem.  

It should be possible to get the right people.  You might be able to pm yourself after leasing where a lot of the work is.  Especially in nice neighborhoods.  A lot of this depends on neighborhood quality, how you value your time, and how close you are.

Get a buyers agent with renovation experience.  They will be incentivized to care bc of the commision they receive.  They dont cost you anything as the buyer.  They might be willing to share subcontractors and other contacts as well as things progress between you 2.  If you see stuff off market it could change and you might not havevthat option but be careful with transactional experience in the off market deals as the low end sellers that just want to abandon with a quitclaim deed can be real sketchy.

1 thing to keep in mind is that if you go into low grade areas because the price is cheap you won't do well unless you self manage.  Its simply not worth a legit pm's time.  I know people think thats where they would want a pm the most but its not going to work.  Go into either a better area, manage yourself, or don't do it.

I've renovated and managed buildings in both of those neighborhoods and have had no issues.  I would say especially with Station North and Old Goucher which is more southern Charles Village area between Charles and Calvert are though even there Charles in parts  is questionable.  If you stray east toward Greenmount things change over to really rough where arvs and tenant quality drop.  If you get closer to JHU in Charles Village or hit Mt Vernon things spread more east and west. 

I wonder the exact location of your friends building.  For single family it could be less but be careful of the exact block.  135k is ok if it needs a ton of work in a good neighborhood or its really small.  Maybe if its in horrible shape than ok but you do get what you pay for.  You aren't going to change the block unless you buy it all so make sure it really is a good location as that will dictate tenant quality. 

For brrrr for high end neighborhoods you have a huge spread.  If you purchase in the inner harbor or a nice part of the 83 Corridor like Hampden and its a place with parking and ample square footage to the point it could be a spacious 4/2.5 or 4/3 or 4/3.5with good finishes your arvs spike upto over 400k.  You might buy it for 200k though hopefully a little less
but even if you sink in over 100k to the renovation which can be offset by project managing and sweat equity you can come out more on top bc the spread is so big to begin with.    

I think you should get a very realistic expectation on who your tenants will be on the backend of this work.  A few of those neighborhoods make sense but the arvs are going to adjust accordingly.  A decent 3 or 4 unit in charles village or south charles village is going for close to 300k and thats not renovated.  In single family the numbers go down but not too much.  To brrr some of the highrr end neighborhoods make sense like Charles Village, Bolton Hill or Hampden.  Some places are ok like Hollins Market or Reservoir Hill in parts but are somewhat block to block and really drop off.  I'd be careful in Sandtown and really think about your tenant base.

Put up a high chainlink fence after throwing it over.  Put a motion light on  that it will trigger when they do that and shine bright on there back yard. Neither should be too much $

@William Segal If you are looking in Baltimore multi inventory is tight right now.  There are deals out there but you have to act fast.  You can get a turnkey 4 unit for low 400s. You do need to consider utilities a lot with multi.  There are a few usually near the MARC train where you can get a commuter train with wifi down to DC.  Many are near the middle of the city and you need to pinpoint the location to get a good deal and not a headache.  If you get an A or B grade asset you should do alright.  If you want an easier commute by car the inner harbor is possible, specifically the Fed Hill peninsula.  If you get a house there you can get an updated house in a really fun place to be for someone in there 20s like being in northwest DC for 300k or less and rent the rooms to pay most of the mortgage while you live there comfortably.  People that have problems up here are those that get cute.   Let me know if you need help.

Baltimore has good and lower grade areas like other large cities.  A good way to figure that is arv.  In general over 200k arv for a place with 2 beds or more puts you in an area where you wont have to worry.  150k arv and you are still in decent areas but expenses go up.  100k arv it keeps going down.  At less than 100k you are asking for trouble and a lot of the people with problems up here went that route.  You can't find decent property management in places with the arv under 100k.  There is a lot more to it but these are good starter numbers.  If you keep in mind you get what you pay for, actually visit the site a few times in the day before buying, and screen tenants, contractors, and others thoroughly you should be alright.

I break properties into 3 categories based on property management.  

Ones that are easy like your Medfield one.  Unless you rent rooms it makes sense to get a leasing agent  for turnovers and manage yourself unless your time is worth a lot so high income individuals.  Most pm companies would gladly take these.  

Ones that are more c grade and more work but not too much.  Pm companies will still take these Because it is worth their time.  Expect higher expenses than the first group but not extremely high.  

Third are D grade properties where you can't get reliable property management.  Its not worth their time unless there are no warranties on tenants and hence  they need to charge for eviction costs.  If you cant get pm then you have to do it yourself.  I know that people are thinking this is where the pm makes most sense but not really if you keep in mind you get what you pay for.  

Govans really fluctuates and based on price it sounds like you are somewhere between the 2nd and 3rd one.  A lot of northeast Baltimore is more the 2nd type but dont know in Govans.  Especially near Greenmount.  If you are in the 3rd one sell it as much of your variable expenses are dictated by tenant quality which over time is based on the quality of the assets neighborhood.  If not I would keep it.  

For repairs it sounds like a flipper did no capex on a house or really did poor work and you were basically stuck with finishing it.  When it comes to fresh renovations you can go online to confirm permit status and pay more for an inspection.  Assuming a lot of it is capex keep in mind overtime most properly done work has a 20 year life.  I know all a lot of warranties are for 10 years but I can tell you from doing a lot of pm things last longer kind of like cars going double there milage warranty before they become to much of a cost to maintain.  That being said capex should probably be around 75 per month assuming central hvac, water heater, standard appliances, and rubber roof.  Having a shingle roof, boiler, or other things will change this but not excessively diluted over time.

Stuff to keep in mind.

Almost every decent pm wants the money to go to them directly.  You will have a hard time finding someone willing to let them back pay you.

There are a bunch of reasons.  Also ensuring not only do they get paid cordially but so do there subcontractors and anyone else that needs to.  Budgeting is part of their job so why make it yours?  Also they will know when to stop eviction proceedings in case of tenant failure to pay rent.