Question for DMV Investors

[Adrian Luckie]

For the DMV investors how would you rate the current DMV market in terms of buy and hold, fix and flips. I hear some investors saying that the market is picking up and deals are getting more difficult to find, based on your experience is it a good time to invest in the DMV and what are you seeing big returns on buy and hold or fix and flips. The DC market appears to be a good market but because of my affordability I was looking more at Baltimore or PG County, is there any specific zip codes I should stay away from or is it on a street by street basis.

My current situation is I have my own home which I bought in 2010 so there really isn't any equity there, I plan on having about 15k save next year, I have good credit but DTI is a little high but I'm working on getting that lower. My question is what you would suggest that my first step/approach be to getting started base on my current situation

[Russell Brazil]

I think investing in any market is possible....you just have to understand what the strengths and weaknesses to each market are. Also if you are able to take a long range view, then understanding the inefficiencies in the market will help you build wealth long term.

For cash flowing properties that meet the 1% rule, I like Laurel MD and Frederick MD.  For appreciation, I like parts of Rockville (Northern part of 20851 specifically), parts of 20906, Silver Spring, Brightwood, Ivy City, parts of Alexandria. If you are looking for cash flow that exceeds the 2% rule, and even hits ridiculous numbers like 3 or 4% or maybe even more, these can be found in Baltimore.  For properties that are a little under the 1% rule, but also offer steady appreciation I like parts of Germantown and Gaithersburg. You will get properties at about .8%, but have a steady amount of appreciation.

For experienced flippers I like Petworth, Brightwood, and Trinidad. In these nieghborhoods you can buy a house on the MLS and flip it, and make $100k in profit. But here is the caveat....you really need to know what you are doing. You need to know how to rehab the property to the quality that buyers are expecting in those neighborhoods. Flipping in Prince Georges county is a little bit more forgiving, and requires less capital. Hyattsville and College Park have seen an upswing lately. Downtown Frederick Ive seen some nice flips....but Ive also seen one recent flip that someone has been unable to move.