All Forum Posts by: Tim Jacob

No one has a crystal ball but most people agree places that over built recently or had an insane number of people relocate to their area then move somewhere else at the end of covid or had ridiculous home price increases are the places with heavy declines.  DC is not really one of those areas and even then most believe its not even close to 2006-2009.  Most likely that will never return just like covid era interest rates.  If things drop another 5 or even 10% i wouldn't feel to bad about it if you keep it 5 plus years most likely the value will be much more when selling.  

In regards to the VA loan use that and you will not have the PMI. You will have a funding fee however but it shouldn't be deal breaker. The VA loan is the best way to go when possible. Just tons of junk mail lol.

Nice job.  Just curious who is underwriting the deals?

There is some give and take that people should consider.  Most listing agents can give a yes or no on a verbal and thus the agent should always check that option if you are low balling.  If you are low balling and they are spending days and days writing offers only to be rejected because you are asking a ridiculous amount off then you are wasting there time.  Maybe they can come up with a strategy like only do this if a property has been listed at a price point for more than a month and then don't go over 10 or 15%.  They should make sure you will pay them a minimum commission regardless of the list price so you are not wasting their time.  Marginalizing the help for your own gain usually winds up having more negative consequence for your bottom line than any gain.  At the same time they could be really lazy if they don't want to even give a verbal for something not too low or write an offer under list price at all.  Its hard to judge this situation.  

Turnkey is never a bad idea but it is relatively new for Baltimore built in 1965.  Its ducted with central heat and relatively new infrastructure as a result.  Maybe do simple upgrades and don't refi like paint and carpet.  It depends on what needs to be replaced not determinable based on the pics.  A decent new kitchen could cost you 10-15k.  You can get an accurate number based on a more thorough inspection of the property.  I would atleast do that for a brrr and probably more.

Hopefully it works.  I have not seen any positive reviews of cr of Maryland.  Just the 1 negative review that is on here where they are experiencing typical issues that will issues in lower class neighborhoods leading to loss of money by the investor.  I don't blame CR of Maryland.  In a certain asset class overtime you will lose which is what that showed with high vacancy and maintenance.  People acting like they can get good management in a lower asset class don't have a lot of property management experience and shouldn't be advising others on the subject and especially when they are not local.  It comes  down to billable rate for the pm which is why these investments fail.  Good luck if you follow through with this.

It is a blue collar area.  Its better than D grade though I have seen the same tunrkey company work on D grade to out of state investors as well in Baltimore city.  For over 200k you can do a lot better in Baltimore as @Ozzy Sirimsi stated.   I would buy over 200k but target  B grade areas with an agent like myself that knows the area.  B grade will be easier to run and rely on pm or manage remotely and have someone lease it.  Over the long run you will have a lot less problems buying a better asset for not too much more cost.

A lot of turnkey companies bank on out of state investors who don't want to be involved at all in the property.  A lot of them hope the investor never actually visits the property because its in a horrible neighborhood.  If you want to let me know the address.  I can help you.  I'm sure some turnkey providers are honest but so many are not.  They put a slick salesmen on the phone with you and try to sell you garbage.  Let me know.

If you want to BRRR going out of state is going to be really hard. The way people save money is to project manage reno and maybe even put in some sweat equity in labor. Project managing at a distance is going to be hard. You should go to the property atleast every other day to review punchlists and make sure the contractor is doing what they are supposed to. If you don't the affordable contractor will not do what you want. Furthermore you don't know what the vendor capabilities are from not being there. The rockstars know other rockstars thing is great but some level of confirmation of capability would be good as well. You can ofcourse get this from Google reviews but then you pay for their reputation. In some cases that will be unavoidable. Another option is hire a contract you don't need to supervise but they cost way more. If you want to go out of state I recommend going turnkey. I would get a good investors agent on here and then get a thorough inspection. Get something with updated infrastructure as well if you are going to another city with older housing. If you want to BRRR I would really stay relatively local driving distance of less than 100 miles 1 way

By the way Baltimore is not bad right now.  More deals have popped up In the last few days then I've seen in a while.

I would echo the book is a nice starting point sentiment.  I would break your costs in to 2 sectors.  Are you flipping or are you in for buy and hold.  If you are buy and hold you really want to limit your deferred maintenance.  It can really crush you later on.  

Every place is a case by case basis.  I would look at things during your walk through then get a good home inspection.  After that getting someone like myself to review it with would be best to get better ballpark numbers so you can line item expense things and not just simply say a bathroom is 15k or whatever.

That being the case when working on old homes especially its important to factor in whether infrastructure has been replaced.  I have a lot of remodel and maintenance experience from doing property management and project management remodel work including full replacement of infrastructure for a while. Because of my extensive experience I recommend looking for something with new infrastructure to void excessive costs.  Ive bought and helped others buy old buildings with newer infrastructure which halved if not more the budgets of the renovations.  Cosmetic renovations are substantially cheaper.  

The way to save money is to project manage yourself and maybe do some of the work.  Project managing is no fun but unless you have a substantial buffer is necessary.  If you don't want to do that  pay the project manager appropriately as J Scott talks of that.

People who skimp on project management because they want to brrr have a tough couple first few years until the deffered maintenance stabilizes.  Brrr is great but their are limits.

I think one thing to note is point of contact.  I would worry about some big company where a salesman is real good at talking to you and selling you.  The problem I think most people will have is maintenance.  Tenant quality is  often based on asset quality so that can be messed up by big or small companies.  Maintenance though vs a small company is something I hear a lot of negatives about.  If the pmc is hundreds of people there is a good chance they have some voice automated way of dealing with it where very few people take any accountability.  If you have a place that doesn't need a lot great but if you do I hope it isn't a nightmare for you and tenants to have maintenance done.  Small companies have a point of contact.  I really hope that this works out for you.  I would read about who is responsible for updating licensure requirements as well.