newbie investor in western maryland

[Sean Haardt]

I am a new member and new investor. I have a full time high school teaching position, but thanks to this website and am now going to pull the trigger on something I've wanted to do for 20 years. Thanks BP!

Three questions:

1) What is the difference between the BRRRR calculator and the Rental calculator? The refinancing part?

2) I am in western Maryland. I a looking at a couple markets in western Maryland that are depressed areas or losing many jobs in the past 10-20 years when 2-3 large companies left. Still, I am buying my first property, a duplex, there from a wholesaler with great margins for a buy and hold. How do I know if I can find renters if I buy future properties there? I have placed an add already on Zillow and Craig's list and have many interested parties daily, and am screening tenants now, but am wondering if I should buy another house in the same market in here.

3) Should I always pay for a home inspection before buying these distressed properties while I am starting out? I am doing so with this first one, have already walked through it for 3 hours with my contractor, and am estimating 20K in rehab. The inspection is scheduled for this Monday, 2/20. If anyone has any advice on any of these questions, I'd greatly appreciate it. This is my first deal and I'm hoping the inspection doesn't go over budget by too much. It is a 100-year old home with a lot of quirks and issues... but my wholesaler, who has a vested interest in me coming back to him for more business, is telling me it's a homerun for my first deal. Pending the inspection, the ROI and cash flow are great, and I've been approved for financing at a small community bank and their AVM came back great as well.

Thanks for your time, Sean

[Sherman Ragland]

Hey Sean, let me try to help...

1) we have our own software, so I can't help with this one;

2) Your observations are correct. However, there is one new industry in Western Maryland that is growing.  The prison industry.  Get to know the needs of this market and focus on it, both the guards, and inmates.  As you know, they are relocating all the prisons from Anne Arundel County out your way, so it is a growth industry.  Too soon to tell what impact, if any, the new casinos will have, but worth paying attention to.  Also, Fristburg (State) University is in a hyper growth mode;

3) Generally, if a property needs work (of any type) I don't pay for a home inspection. Instead I rely upon my contractor to inspect.  Unlike a home inspector, the contractor is the one who will actually be doing the work.  No need to pay someone to tell me what needs to be done, then bring in a contractor who tells me the same thing as a part of his estimate for free.  There are some (good) reasons to get an inspection: a) If it's a condition of the contract, and you need to get out of the deal that requires this; b) if it's a quick fix and flip with not much work anticipated ("paint and carpet job") and you anticipate selling to an end user who is going to live in the property and their lender will most likely require an inspection to make the loan; c) you're a "belt and suspenders" kinda investor, who just likes to have all the "I"s dotted and "t"s crossed.