Baltimore City Investors a few questions from a new investiors.

[Shannon Fong]

I posted a few thoughts I had on another post.  However, I think I have more solid thoughts and questions now.

I really want to do buy and hold real estate investing.

I have about 20K in a PLOC, a credit rating about to hit the 800's, and a monthly cash flow of about 2500+ I can throw into rehabbing.

I have been looking at Baltimore City cheap housing and wanting to buy between the 5 and 10k range in which I know will be most likely complete rehabs.  I am not scared.

I am willing to take my time and rehab; you know possibly doing the one house a year thing.  I am in no rush.  I am hoping to do 10 house in the next 10 years.  This is my no stress plan.

As I said before, I am not scared of total (gut) rehabs if necessary.  What I am scared of is investing in a property in Baltimore City and can't get a renter because of so many vacant houses exist on the block.

I know there are people that will rent anywhere but I am afraid being the state of Baltimore City those renters have rented elsewhere.  Even with section 8 theses low income renters can also rent in better neighbors.  My concerns is the renting pool is small in the areas I want to invest. 

 I want to know from your experience:

• What are some solid areas in Baltimore City you still can invest, even if I have to go a few thousand higher to get in?
• Is there a vacant to occupant ration (how many boards vs properties being occupied) on a block I should consider?  
• Should I consider sale by owners properties as possible good deals?

I know there are still great opportunities in Baltimore City but I know there are bad ones as well.

[Matthew Paul]

Well if you have 10K to buy and another 50K to do the rehab , you have about 60K liquid . If you found a 80 K property that needs cosmetic work , not a complete rehab , put 20K down , you have a 60K mortage . Approximate payment would be $ 500, taxes and escrow included .  10K in repairs and you are renting in 60 days . At estimated $1300 a month for a 3 bedroom in Glen Burnie .  ( just cause I know the area)  That leaves you with another 30K to play with .   

If you are new to the game , dont jump in with both feet , its sink or swim . if you havent dealt with contractors before , they will smell it , and you will pay for it . Leave yourself an out , worst case , can you at least break even if you have to sell . 

I bought this , in Pasadena for 130K  the inside was worse , 

This is a year later , 

Wasnt easy , its a duplex , each side  $ 1300. mo      Its in a Blue ribbon school district and a B neighborhood .   I am a contractor and did the work , over the course of a year when we had down time . I am all in for less than 90K a side , in a neighborhood of 300K single family homes .

My out was that the lot 8 doors down , just the lot , sold for $ 150K  . And my lot was 1/3 larger .  House was appraised 4 months ago for $ 310,000.   

Its a lot more work than you think , even if you aren't swinging the hammer . It takes time to learn an area ,  Baltimore city can be a very risky investment if you dont know where you are buying , short term may look good , long term is harder to predict . To me ,the row homes are even riskier , since they have common walls , how your neighbors maintain their structures can have a direct impact on you .