Realistically, what could I afford in Baltimore?

Question

Alright, so I am a New Yorker born and raised and I have always wanted to own a row home. Being that price in NYC are prohibitively expensive (let's not even go there... lol) I realize my dream of home ownership (as in my own brownstone or row home) will probably never happen here an that is okay.

Initially I was thinking about sub30k properties but I just don't want to put that much work in for a property I probably wouldn't keep for 30+ years.

So I've been looking at places to buy in the near future. Possible contenders were Philadelphia, Harrisburg (quickly x'ed out because I heard it's just not safe though I looooove the old housing stock), Albany, Buffalo, Troy, Rochester, Pittsburgh and Baltimore. I think my heart is set on Baltimore. It also seems to make sense financially: you can buy a 4-plex for under 400k, take out an FHA loan (probably not what I'd want to do--I'd want to put down 20%) and rent out all four units.

Am I crazy or is Baltimore a good market right now? If you guys know of any towns on the east coast with lots of row houses and a somewhat lively downtown, even if very small, let me know.

Let's say, hypothetically, I had 80k to use in savings, made 80k a year and had good credit (700+). Could I afford a 4-plex in a decent enough area of Baltimore to pay for my mortgage, build up equity, and put at least a thousand back into savings each month? Or is this a total pipe dream? Please smack me in the face with reality as hard as you want, guys!

Ned Carey · Answer

Russel you are right about the nice areas around the edge of the city. However many of the very old stable neighborhoods do have small muti-families. Particularly the large streets in Mount Vernon, butchers hill, Bolton Hill, and Charles village seem to have lot of them.

Ned Carey · Answer

@Audra De Falco Those are nice and very solid areas of baltimore.The problem is I don't see them cash flowing. You are not quite hitting the 1% test and with an estimated 50% expenses I don't see where the cash flow is going to come from. This means you are counting on appreciation of rent and property value. The good news Is I don't see having the problems with tenants that you would typically have in much of Baltimore.The 1811 Saint Paul may fall in the Station North arts district which is a very up and coming area.

Russell Brazil · Answer

With your salary you will have no issue buying a rowhouse in a nice area of Baltimore and be able to get a pretty nice house. However the nicer areas typically don't have mfh's. Those are generally not in the desire able parts of the city (in general)

Rebecca Zadell · Answer

There are two problems. First, there aren't really that many multifamily homes. You could totally buy several houses in a row, if that is your plan, though.The second is that many, many parts of Baltimore are street by street. You can buy a townhouse for $4000, but it may not be a wise idea. The multiple trips down are a very good idea.I'd check into some of the meetups in the Baltimore area. There are several, and would be invaluable to you.

Ned Carey · Answer

@Audra De Falco I think right now is probably the worst time to buy multi family since I stated investing. Demand is high for them, supply is modest, and the people that have them aren't interested in selling. Right now in Baltimore SFHs (well rowhouses really) are getting better returns that multi family. It is actually cheaper to buy then to rent in Baltimore. Some of the properties you mentioned may cash flow modestly but you would have to do an analysis with actual numbers. It wouldn't hit the kind of return I want. I was actually surprised that those prices weren't higher.

Audra De Falco · Answer

Is there any place in the northeast where someone like me could purchase a multi-unit row home and make (even modest) cash flow? It's just always been my dream to purchase one...

Meaza Aboye · Answer

Property tax in baltimore will eat you alive !

Tony Cook · Answer

@Audra De Falco Mt. Vernon is one of the better areas of Baltimore City, along with Canton, Fells Point, and Federal Hill.

Audra De Falco · Answer

Here are some links:http://home.kingoftheroost.com/idx/details/listing...http://home.kingoftheroost.com/idx/details/listing...http://home.kingoftheroost.com/idx/details/listing...http://home.kingoftheroost.com/idx/details/listing/a004/BA9625005/2804-SAINT-PAUL-STThese are the types of properties I am interested in.

Audra De Falco · Answer

Thanks guys! I do know that FHA loans are for owner occupants, hence the multi-family question.I've done some googling and have found some really, really nice MFHs in (what seem to be) nice areas of Baltimore going for about 350k. Am I allowed to post links on here?