Baltimore Turnkey

[Chris Searcy]

Good morning,

I'm considering some cheap properties in Baltimore. Although some clearly require complete or partial rehabs, there are some that seem to be turnkey and even state they they have been certified for Section 8 tenants. 

A couple of deals seem too good to be true. There would be more than enough fat to pay the mortgage, pay a property manager slightly above market for the extra headache, put aside reserves for capex and taxes, and still generate at least a couple hundred bucks in cash flow. 

What's the catch?

Chris

[Jamal L.]

@Chris Searcy Well this is a complicated question.  Whats the catch? I can certainly say from my own experience that you can buy a property and have enough cash flow to clear all expense and still deposit a few hundred in the bank.  Whats the catch, would depend on the level of rehab, the area, and the customer base, which usually is based on the level of rehab and the area. If the rehab is proper and can pass a section 8 inspection then there may not be any catch.  Many investors rehab and resell to other investors who chose to make their profits on the front end opposed to the back end.  Meaning some investors buy cheap $5-$10k put $35-$45k in and resell turnkey units for a profit. Because of the high rate of return in Baltimore they are able to sell turnkey to other investors and still make a living.    

But on any turnkey property, I would hire an inspector before buying and make sure there weren't any outstanding liens for permits that weren't pulled. And also make sure its section 8 certified before purchasing.