Live-In Flip-What would YOU do with a 10 bdrm in Hagerstown, MD?

Question

Two years ago I purchased this beautiful three story 10 bedroom brick foursquare in the North End of Hagerstown, on a historic tree lined street (Oak Hill Ave). I purchased at 305k with a 60k down payment from the proceeds of my previous live-in flip (this is only my 2nd purchase, so I'm still new at this!). Now that I'm beginning to tackle renovations using income from my day job, I'm stuck trying to decide whether to renovate to flip or renovate to hold? With 10 bedrooms and a huge basement that could turn into a studio apartment there's tons of rental opportunity here. But, what about my neighbors? What about compliance with city regulations? What about separate metering? So much consideration goes into turning a single family into an apartment building essentially. And, it'll be my very first time landlording if I go this route. On the other hand, the house just across the street recently sold for 445k, and another is being listed for 499k a few blocks down. Both homes show very well (not flips). The first is 1,000 sqft smaller, while the other is 300 sqft larger. I believe if I put between 30k-50k into quality upgrades (I do most of the work myself) I could possibly sell for 500k or more. So, what would you do BP investors? Anyone familiar with the Hagerstown market please chime in!

*I'd like to quickly add that my ultimate goal is to utilize a combination of judicious flips and long term rentals as a vehicle to build enough passive income to quit my job and finally LIVE. Thru completing my first live-in flip I've realized a passion in the flipping process and would continue doing this as an additional wealth building tool. I would like to be able to do this in the shortest amount of time as possible. Any guidance is sincerely appreciated.

Season Price · Answer

@Matt M. That's a good point about parents not wanting to be on separate floors. It would be great for a family with older kids, or a "sandwich" family so each "family unit" has their own privacy.

Caitlin Brown Tuinstra · Answer

@Matt M. Thanks Matt for your thoughts! I agree, 10 bedrooms is a lot and most families don’t have 7 children like the family that originally built the house in 1914. Although it’s 10 bedrooms now it could, with a little effort be turned into a very comfortable 4 bedroom 4 bath house. The attic alone has 4 bedrooms + storage room. I would convert the whole floor into a master suite. Two den sized rooms would become his/hers walk-in closets, one turned into a master suite nursery or sitting room, and the final one adjoins a tiny bathroom that can be opened up.

Of the six rooms on the second floor, two sets are adjoining with pass-thru doors, thus the two smaller attached rooms would become either sitting rooms or walk-in closets, or even into a much needed second floor laundry room (currently in basement). I also plan to open up the one bedroom at the landing of the stairs to create a formal “landing” area. So that would take away one bedroom.

My engineer has confirmed that all walls coming down are non-load bearing and I can do most of the hammer swinging and plaster/trim repairs myself. I think these changes would make the house much more desirable and marketable. What are your thoughts?

Joseph Cacciapaglia · Answer

Are there any restrictions on STR/Vacation Rentals and is there demand in your area? We do really well with very large short term rentals in my market. That way you don't have to cut up a beautiful old property.

Matt M. · Answer

@Caitlin Brown Tuinstra

Sounds like a great plan, my only concern with the master on the 3rd floor is families with little kids won’t want to be on a different level than the kids. Just my thoughts... but ya never know! The 3rd floor could be the au pair suite!

Matt M. · Answer

@Caitlin Brown Tuinstra

Amazing house, but..  tough sell at 10 beds and the last thing you want is for tenants to destroy that beauty. I don’t know what that area is like, but my first thought was turn it into a bed and breakfast if zoning allows. Or rehab, and see what it’s worth! Great house, super jealous!

Caitlin Brown Tuinstra · Answer

Season Price:  Thanks for the suggestion!

Season Price · Answer

@Caitlin Brown Tuinstra congratulations on snagging such a beautiful house! Are there any colleges near you? Maybe you could rent on the rooms as separate units, with the rest remaining a common space until you decide what you want to do with it for the long term. I watched a UK documentary on something like that a few years ago. I forget what the name of the documentary is, though. It actually made me think more about it when I decided to start considering buy and holds.

Austin Martin · Answer

Yeah, it does seem a bit of a shame to turn into a couple of apartments. I would try reaching out to a property management company and see if they could give you some ideas as far as if its even a feasible idea, and what you could get for rent. I've been working with Hagerstown Managment Corp. They have a pretty good reputation. Just a suggestion, I don't have a lot of experience with rentals myself. I'd would just give it consideration before pouring a ton of money into trying to flip it.

Caitlin Brown Tuinstra · Answer

Thanks again Austin for the kind words. I truly want to keep this house, it's so beautiful and full of potential. I just wish I knew the best strategy to capitalize on it and move on to the next level of investing. I want to make flipping/rentals my full-time career but, I don't know how to get there. And, I don't want to bastardize this lovely historic home or neighborhood by turning this particular home into a chopped up rental. A different house, on a different street, where there are other rentals, sure. But, wouldn't I be doing a disservice to everyone around me if I did that to this house? Am I worrying about the wrong things here? Please help. Thanks again.

Austin Martin · Answer

Its a beautiful house Caitlin! I drive by it everyday on my way to work. I'm glad somebody bought it that will make good use of it, and hope whatever you do with it will be profitable for you!

Live-In Flip-What would YOU do with a 10 bdrm in Hagerstown, MD?

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