Great neighborhoods in Baltimore for BRRRRs?

Question

Hi friends! What neighborhoods in Baltimore are great for BRRRRs right now?

Based on my initial research, I'm looking at the 21213 zip code but I'm open to others (no D class neighborhoods though).

Specifically, I'm looking for neighborhoods with a good amount of distressed 3+ bedroom townhomes for sale for $120k or less that require a moderate amount of renovation (no gut jobs or major structural issues) and that will get me a rent-to-price ratio of 1% or higher on the final ARV.

Thanks in advance for any thoughts/ideas/suggestions!

Tim Jacob · Answer

21213 fluctuates for asset quality.  Years ago I dealt with D grade in 21213.  I don't and won't anymore.  C grade is possible as you go away from downtown and North Ave and more into northeast Baltimore.  Belair Edison is not bad.  As you get off Belair Rd North East of Erdman you should be alright.

For your price range you are definitely C grade at best.  I would recommend 21239 or Dundalk/ Middle River / Essex in the county.   Know things are getting more and more tenant friendly and you will not be able to get that tenant with a 700 plus credit score you don't have to worry about like in an A or B grade asset.  Your taking risk and though it can work allocate more to variable expenses than if you high graded things because overtime they will work out that way.  Things for the most part are back to normal and have been a while compared to the pandemic but the c and d grade crowd got killed during that.  D grade will not work at all and though C grade can just be aware.

Ozzy Sirimsi · Answer

To be honest I would spend more money and get my 1% on North of Baltimore.

You should be able to get more than 1% around 21213.

FYI, Baltimore in general housing stock is old, when you do moderate renovation like paint, vanity change, new carpet etc... you will definitely have plumbing issues along the way.

I would strictly do section 8 in 21213, you can end up in eviction court pretty often othewise.

Ned Carey · Answer

@Elizabeth Rose this is not an easy question.

Part of the problem is the housing stock of Baltimore is very old. It is hard to find a "distressed" property that only needs cosmetic work.  They sustems like expectirc plumbig and HVAC are often very old. Properteis that have had these systems updated tend to be much more expensive.

In many area the prices have gotten well above the intrinsic value given the risk of the neighborhood. Every zip code has good and bad areas. Even within Belair Edison in 21213 there are better areas and riskier areas. Generally when the market turns, the weaker aares will drop much faster and farther than the stronger areas. So it pays to learn the marketplace well.

I suggest you learn Belair Edison. It is a middle of the road rental area with some homeowners. I am not saying Belair Edison is right for you, but if you know it well it will give you a standard by which to judge. Any good agent or investor will know the neighboorhood. If you tell your agent "I wnt something just a little nicer than Belair Edision" the agent will likely know what your are talking about.

A similar neighboorhood on the West side of the city Edmaondson Village or Rognel Hights. I also like Yale Heights /Beechfiled.  All of these neighborhoods are in zip 21229

Now a diferent question is what deal is good enough for Brrrrr. BRRRRR does not work on most deals. the deal has to allow enough "Value Add" to work to get all or nost of your money back out. These kinds of deals can be hard to find after the recent run up of prices.

Good luck

Ned Carey · Answer

@Elizabeth Rose above @Tim Jacob gave great advice. Yes ther are c class properties in 21213. Belair Edison is one example I gave. But as Tim said the block closest to Belair Rd is the sketchiest.

Another neighborhhood similar to Belair Edison is Berea in 21213. But just like Belair Edision ther are some lesser blocks there too.

Logan Lambert · Answer

Hey,

We are located in Baltimore and see a lot of deals come through in the 21213 zip code. Belair Edison is a good rental area and has seen good appreciation.

One area that is a little more challenging in this zip code is known as "The 4 By 4". This area is one that a lot of investors seem to avoid.

David Hathaway · Answer

Here is the video on youtube that goes into to details on zip codes and discusses the best areas to invest in Baltimore

David Hathaway · Answer

@Elizabeth Rose There are lots of BRRRR neighborhoods in Baltimore, 21213 is a good one, although I think it is better for long term rentals. I would also suggest neighborhoods like

Waverly

Old Coucher

New Northwood around Morgan State

Lauraville and Waltherson and that whole area up to Parkville

Dundaulk and Highlandtown

Up and down Broadway St near Hopkins is getting some great comps.

That's a start. I interviewed 2 investors with big portfolios in Baltimore recently and can share that video with you if you would like a more in depth explanation of where to invest and where to stay away from just DM me

Vladimir Virtualkin · Answer

@Elizabeth Rose

Check pigtown 21230. But it wont be cosmetic, most likely 50-80k rehab

Elizabeth Rose · Answer

Thanks @Tim Jacob! This is super helpful.

Tim Jacob · Answer

Not all of it is that bad. I would say the part closer to downtown is pretty rough.  Think of Belair and North as being horrible.  That and other parts of that part of 21213 closer to downtown  were shown in We own the City on HBO recently bc they are indeed really bad.  As you go on Belair Rd northeast of that intersection it starts getting better I would say by Belair and Erdman which is right in the middle of Belair Edison things have gotten to a C grade asset.  Even then I would try to be half a block off Belair Rd but I have managed properties in that area and have not had many issues there.

Great neighborhoods in Baltimore for BRRRRs?

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