Baltimore City Rental in 21229 worth at least 80k?

[Michael Perry]

Hey Baltimore City Investors,

I need some help evaluating a couple rentals in 21229.  They are 3512 and 3514 Old Frederick Rd.  They are off-market and I'm talking to the seller now about buying them for 60k each.  3512 already has a voucher tenant in place who pays $0 (the housing authority pays $1200).  3514 is vacant and rent ready.  

They've both been renovated to rent standards in 2014.  They are up to section 8 standards.  They will both rent for 2% of acquisition so my question is not about cash flow.  

My concern is about what they'll appraise for.  My plan is buy with 0% interest business credit (Fund&Grow) then refinace after 30 days-6 months (depending on the lender).  But I'm only gonna get 75% of the appraised value from the lender.  I need help in figuring out if these are still good deals.  I don't want to get myself in a situation where if I have to sell them for some reason, I've paid more than the appraised value.  

Here's a few more details about them:

3512:  end unit, 3 bedroom 1 and 1/2 bath, finished basement with 7'1" ceiling; rented by voucher tenant for $1200.  1344 sq ft.  Renovated in 2014.  

3514: 3 bedroom, 2 full bathrooms, unifinished basement with 6' ceiling; renovated in 2014, vacant, 1044 sq ft

Any help would be greatly appreciated.  Thank you!

[Ronald Davis]

I see no comps nearby even near your seller's asking price (as Ned Carey says not knowing the condition of the properties); I see comps averaging around $20K on the same block and the 3400 block.This mean the seller's asking price is including the value for the tenant voucher and section 8 standards. If you have not already visited the properties on a drive-by and/or a personal inspection then do so (this is a must for city properties). I also would make your final closing depending on both property inspection reports (consider this a good investment expense if go for these higher than normal comps asking prices), consider adding a depending clause on getting a current appraisal value as part of your offering contract, and proof of section 8 passed standards for both properties (this is in my opinion you need because the seller is increasing the values based on these properties being at section 8 standards). Take care.