Newbie looking for some advice in Baltimore, MD

[Chris Hijazin]

Hey BP Fam!

My name is Chris. I am planning to move into the Baltimore area ASAP (Pending employment) and am looking to pull the trigger into Real Estate investing. I think my best best is to secure an FHA or FHA 203k loan, find myself a nice multi-family, house hack and ideally crate some cash flow.

Being a new investor this is obviously a big leap for me and something I think I would really enjoy. I work in Hospitality so I believe I would be a great landlord. I am handy around the house so basic repairs and maintenance I can handle. I also have been coming up with ideas of systems to put in place to assist me in my land lording business.

Soooo... my questions are 1.Does this seem like a solid and achievable plan for a newbie with not a lot of capital? 2. I am somewhat familiar with Baltimore and the different areas, but if I find a half decent neighborhood suitable for tenants, What is the market like? What's the rental market like there etc.

Hopefully we can connect soon!

Thanks, Chris

[Sam Lewis]

Welcome to BP @Chris Hijazin! 

A little over 2 years ago I was able to leverage a 300K+ househack in Baltimore County with 14K out of pocket. I did a 3% down owner-occupied FHA down payment, and had the seller pay me 3% back towards closing. Granted, this didn't cover all of the closing costs, but it allowed me to bring less money to the table.

Quick note about the surrounding Baltimore area - there are plenty of ways to househack, however multifamily is not as common in our area than in others (as often discussed in BP books, podcasts, and forums). 

In 95% of cases, I recommend finding a single family home (SFH) in the suburbs of Baltimore (think Anne Arundel, Baltimore, Howard counties, depending on where your work is) and renting to 20-somethings.

Key criteria for a successful SFH househack:

• Suitable zoning criteria, i.e. room rental laws (county by county)
• Within 1 mile of hospital, major company HQ, public university, and private university (to attract 20-somethings)
• At least half as many bathrooms as bedrooms (i.e. a 4 bed / 2.5 bath could work, but 4 / 1.5 could get sticky)
• Plenty of driveway space / street parking (1 per roommate)
• Plenty of kitchen space (since the kitchen is the most occupied room other than individual rooms)
• Basement or side entrance entry point (i.e. if you wanted to turn the basement into your living space, you could enter from a side entrance)
• Un-involved neighborhood community (cul-de-sacs can be the worst spots)
• Turn-key quality (i.e. you won't need to fix much of anything when you move in)

This list is by no means exhaustive, but things to think about when you work with an agent on a SFH househack. I generally recommend the following suburbs of Baltimore for solid rentership: Columbia, Glen Burnie, Towson.

So in summary, if you found a househack in the range of 200-350K, I'd expect to have 12-17K saved up for an owner-occupied, first-time home ownership structured deal in the surrounding counties of Greater Baltimore.