Baltimore City/County REI - First Time Buyer Advice

[Rafay Ashar]

Hello Everyone,

I am looking to buy my first rental property in MD. Focusing on Baltimore City and Baltimore County as it is close to where I live.

I want to be able to pay for the house in cash (due to various reasons, I do not wish to take a loan, finance etc. I will strictly pay in cash). As such, I am looking for a house in the 60K-70K range (including any necessary repairs). A little deviation from this range is fine.

I am open to renting the property to Section 8 (Housing Choice Voucher) and non-Section 8 tenants.

So my question is, I have seen some houses on foreclosure, or otherwise on sale, in the 40K-70K range in the Belair-Edison area and Wilson Park area. What do you guys think of these two locations? Are these good locations to put up a house on rent? Any other recommendations for neighborhoods I should check out in Baltimore city or County?

Any advice for first time buyer appreciated. Thanks!

[Seth Hochberg]

@Russell Brazil is likely speaking in general about that price point, doubly so because Baltimore can be a risky place to invest. How familiar are you with Baltimore? You mention two neighborhoods, but neighborhoods can have a large range from one block to another. You need to know which blocks to avoid and which are good to invest in.

I have a property in the Belair-Edison area, but I spent double what you're talking about for purchase + rehab. I might be a couple blocks away from where your friend bought, which can make a difference. It definitely can be done, as evidenced by your friend. If your friend is brand new to the game, they probably did get lucky, because usually it's so easy to get burned at that price range - there's so much that can go wrong. Tenant might not pay rent. Tenant might cause damage to the house. Etc. etc.  I recommend you visualize everything that can go wrong, and determine if that's worth the negatives of taking a loan to buy something higher quality, which would allow you to attract more quality, paying tenants. 

Congrats of having 70k saved up - that could buy get you a down payment or two on some of the nicer neighborhoods in Baltimore. Just another option. I think the right parts of Belair-Edison can have excellent cash flow, but I would be uneasy buying a 40k  house that only needs 30k, just because it worked out for your friend. If you do go this route, do your homework, and have an honest visualization of the risk that comes with it.