New construction in the Uplands neighborhood of Baltimore

[Chrissy L.]

Hello!  I have been exploring a new construction in the Uplands neighborhood, about 20 minutes west of downtown Baltimore.  The first delivery was in 2013, the development sits on 63 acres with ~180 units, so far.  They're made up of townhouses and single family homes.  It's called Uplands by Bozutto Homes, http://www.homesatuplands.com.

I'm considering a 4/3.5 townhouse with a parking pad, all in for $220K. Per the preferred lender, I can do 15% without PMI, with slight higher interest rate, of course. For this particular home, the settlement would be in mid-June. There are other similar models for delivery in July, November and a year from now. Even though I've done extensive research, I'm still a little gun-shy and I'm not sure how to proceed. I would appreciate any help with the following:

1) Does anyone have insight to that neighborhood/the development?

2) What's the rental market like in that area?

3) New construction investment, in general, good idea or bad?

Many thanks!

[George Taylor]

@Chrissy L. I grew up in PW County and that NoVA market has always been great as long as I could remember. Have you looked into that area compared to MD? I know a good builder there in the Leesburg/Great Falls area and have come across some pretty good deals on land in Fairfax and Loudon Counties. I know a lot of investors are drawn to MD automatically and don't really consider VA but there is a lot to consider there.

 The borrower up in IL is looking to build and sell several homes in the same development over the next year. Total in his build will be $200k and retail sales is $277-$300k. Very quick turn around. My personal opinion would be to get in and out in a new development for a home or two. Then if you see they are selling quickly either you can continue that business model or start to hold onto them as rentals as you know the area is good. As you know already, up there either the market is great for sales immediately or rentals a few years later. 

 Your return would be great in DC but that property is so expensive either you would have to find the diamond in the rough or a revitalization area that no one knows about, yet. One example in the Fairfax County area, right off Rt. 29 I was looking at a few months ago. It's called Bull Run Estates. The lot was going for $300k, I could get a builder in with a 5k sq. ft. home at $300k. Comps were going in the same neighborhood easily at 1MM - 1.2MM. Much higher return and the lot backed up right to the water. I've know the project manager for that builder since I was a child so they know their stuff.