Public school teacher starting real estate investment journey

Baltimore, Maryland
New Member Introductions
1yFollow

Public school teacher starting real estate investment journey

Nina DiehlPro Member
Baltimore, MD · Member since 2025 · 39 posts · 15 votes

Good morning,Bigger Pockets Forums, 

Today I’m doing the inspection of what I hope becomes my first real estate investment.

I spent the last 2 months reading, listening to podcasts, talking to other investors, combing through listings, and visiting properties in Baltimore near where I live.  I also spent a good deaL of time convincing my husband that this is a good deal. 

I'm confident I found a decent deal for this market that brings cash flow and appreciation. I was hoping for a BRRRR but it's a little risky for me at my skill level at this point. I even put an offer in on a great BRRRR in Baltimore's Patterson Park but was outbid, likely by an LLC that already has its own contractors ready to go.

Crossing my fingers that all goes well in the inspection and I’ll move on to the next steps of property management. 

1Reply
61 views

Most Popular Reply

Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
1y
Quote from @Drew Sygit:

@Nina Diehl what Property Class are you buying?

How have you adjusted your expectations to match the Property Class?

@Russell Brazil is Patterson Park a decent rental area?

Here's some copy & paste info you might find interesting:

----------------------------------------------------------------------------------------------------------

Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.

Why is Property Class so important for investors to understand and apply in their investing strategies?

Because the Property Class dictates the Class of the tenant pool that the property will attract.

The Tenant Class greatly impacts rental income stability and property maintenance/damage by tenants.

Both Property Class and Tenant Class affect what type of contractors, handymen and property management companies will work on a property.

If you buy & renovate a property in Class D area to Class A standards, what Tenant Class will rent it?

Or, if you put several Class D tenants in a Class A four-plex, what do you think will happen to the property?

So, if you fail to apply the correct assumptions to a property, your expectations won’t be met and it may even be a financial disaster.

We use the following to rank Property Classes, in order of importance:

  • Property Tenant Pool: closely linked to location, but not always.
  • Property Location: closely linked to tenant pool, but not always.
  • Property Condition & Amenities: it’s important to, “Maintain to the Neighborhood.”

Key metrics for each Property Class:

Class A Properties:
Tenant Pool: Majority of FICO scores 680+, no convictions/evictions in last 7 years.
Tenant Default: 0-5% probability of eviction or early lease termination.
Section 8: Class A rents are too high and won’t be approved.
Vacancies: 5-10%, depending on market conditions.
Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.

Class B Properties:
Tenant Pool: Majority of FICO scores 620-680, some blemishes, no convictions/evictions in last 5 years.
Tenant Default: 5-10% probability of eviction or early lease termination.
Vacancies: 10-15%, depending on market conditions.
Cashflow vs Appreciation: Typically, 1-3 years for positive cashflow, balanced amounts of relative rent & value appreciation.
Section 8: Class B rents are usually too high for the Section 8 program.

Class C Properties:
Tenant Pool: Majority of FICO scores 560-620, many blemishes, but should have no convictions/evictions in last 3 years. Verifying recent 2-years of rental history very important! Same for 2-years of job/income stability.
Tenant Default: 10-20% probability of eviction or early lease termination.
Section 8: Class C rents usually meet program requirements, proper screening still recommended.
Vacancies: 10-20%, depending on market conditions and tenant screening.
Cashflow vs Appreciation: Should cashflow immediately, at the lower end of relative rent & value appreciation.

Class D Properties:
Tenant Pool: Majority of FICO scores under 560, little to no good tradelines, lots of collections & chargeoffs, but should have no convictions/evictions in last 12 months. Verifying last 2-years of rental history and income/employment extremely important to find the “best of the worst”.
Tenant Default: 20-30% probability of eviction or early lease termination.

Section 8: Class D rents meet program requirements, often challenges to pass Section 8 inspection.
Vacancies: 20%+, depending on market conditions and tenant screening.
Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciation.

Where did we get our FICO credit score information from?

Check out this chart:

FICO Score

Pct of Population

Default Probability

800 or more

13.00%

1.00%

750-799

27.00%

1.00%

700-749

18.00%

4.40%

650-699

15.00%

8.90%

600-649

12.00%

15.80%

550-599

8.00%

22.50%

500-549

5.00%

28.40%

Less than 499

2.00%

41.00%

Source: Fair Isaac Company

Make sure you understand the Class of properties you are looking at and the corresponding results to expect.


 South of Patrerson Park is all good. West of Patterson Park is mostly good w a few bad blocks. East of Patterson Park is block by block. North of Patterson Park, the first block is OK, but then gets worse each subsequent block up.

[email protected]301-893-4635Podcast Guest on Show #192
District Invest Group545 Reviews
WebsiteView Page
2Reply
See this reply in the discussion

13 Replies

Jump to latestLatest
  • Vince Scipione
    Realtor · Scranton / Pocono Mountains, PA · Member since 2020 · 99 posts · 33 votes
    1y

    Congrats on taking the first steps. Those are the hardest. Hope the inspection turns up okay, and remember if there is any major material defects. Try to re-negotiate, and if they wont budge. Get estimates on repairs and integrate that data into your underwriting, if you know it may need a roof is 2 years. Hold additional % into your CapEx!

    0Reply
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
    1y

    @Nina Diehl what Property Class are you buying?

    How have you adjusted your expectations to match the Property Class?

    @Russell Brazil is Patterson Park a decent rental area?

    Here's some copy & paste info you might find interesting:

    ----------------------------------------------------------------------------------------------------------

    Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.

    Why is Property Class so important for investors to understand and apply in their investing strategies?

    Because the Property Class dictates the Class of the tenant pool that the property will attract.

    The Tenant Class greatly impacts rental income stability and property maintenance/damage by tenants.

    Both Property Class and Tenant Class affect what type of contractors, handymen and property management companies will work on a property.

    If you buy & renovate a property in Class D area to Class A standards, what Tenant Class will rent it?

    Or, if you put several Class D tenants in a Class A four-plex, what do you think will happen to the property?

    So, if you fail to apply the correct assumptions to a property, your expectations won’t be met and it may even be a financial disaster.

    We use the following to rank Property Classes, in order of importance:

    • Property Tenant Pool: closely linked to location, but not always.
    • Property Location: closely linked to tenant pool, but not always.
    • Property Condition & Amenities: it’s important to, “Maintain to the Neighborhood.”

    Key metrics for each Property Class:

    Class A Properties:
    Tenant Pool: Majority of FICO scores 680+, no convictions/evictions in last 7 years.
    Tenant Default: 0-5% probability of eviction or early lease termination.
    Section 8: Class A rents are too high and won’t be approved.
    Vacancies: 5-10%, depending on market conditions.
    Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.

    Class B Properties:
    Tenant Pool: Majority of FICO scores 620-680, some blemishes, no convictions/evictions in last 5 years.
    Tenant Default    : 5-10% probability of eviction or early lease termination.
    Vacancies    : 10-15%, depending on market conditions.
    Cashflow vs Appreciation: Typically, 1-3 years for positive cashflow, balanced amounts of relative rent & value appreciation.
    Section 8: Class B rents are usually too high for the Section 8 program.

    Class C Properties:
    Tenant Pool: Majority of FICO scores 560-620, many blemishes, but should have no convictions/evictions in last 3 years. Verifying recent 2-years of rental history very important! Same for 2-years of job/income stability.
    Tenant Default: 10-20% probability of eviction or early lease termination.
    Section 8: Class C rents usually meet program requirements, proper screening still recommended.
    Vacancies: 10-20%, depending on market conditions and tenant screening.
    Cashflow vs Appreciation: Should cashflow immediately, at the lower end of relative rent & value appreciation.

    Class D Properties:
    Tenant Pool: Majority of FICO scores under 560, little to no good tradelines, lots of collections & chargeoffs, but should have no convictions/evictions in last 12 months. Verifying last 2-years of rental history and income/employment extremely important to find the “best of the worst”.
    Tenant Default: 20-30% probability of eviction or early lease termination.

    Section 8: Class D rents meet program requirements, often challenges to pass Section 8 inspection.
    Vacancies: 20%+, depending on market conditions and tenant screening.
    Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciation.

    Where did we get our FICO credit score information from?

    Check out this chart:

    FICO Score

    Pct of Population

    Default Probability

    800 or more

    13.00%

    1.00%

    750-799

    27.00%

    1.00%

    700-749

    18.00%

    4.40%

    650-699

    15.00%

    8.90%

    600-649

    12.00%

    15.80%

    550-599

    8.00%

    22.50%

    500-549

    5.00%

    28.40%

    Less than 499

    2.00%

    41.00%

    Source: Fair Isaac Company

    Make sure you understand the Class of properties you are looking at and the corresponding results to expect.

    [email protected]248-209-6824
    Logical Property Management4.9469 Reviews
    WebsiteView Page
    2Reply
    • Russell BrazilBusiness Member
      Moderator
      Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
      1y
      Quote from @Drew Sygit:

      @Nina Diehl what Property Class are you buying?

      How have you adjusted your expectations to match the Property Class?

      @Russell Brazil is Patterson Park a decent rental area?

      Here's some copy & paste info you might find interesting:

      ----------------------------------------------------------------------------------------------------------

      Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.

      Why is Property Class so important for investors to understand and apply in their investing strategies?

      Because the Property Class dictates the Class of the tenant pool that the property will attract.

      The Tenant Class greatly impacts rental income stability and property maintenance/damage by tenants.

      Both Property Class and Tenant Class affect what type of contractors, handymen and property management companies will work on a property.

      If you buy & renovate a property in Class D area to Class A standards, what Tenant Class will rent it?

      Or, if you put several Class D tenants in a Class A four-plex, what do you think will happen to the property?

      So, if you fail to apply the correct assumptions to a property, your expectations won’t be met and it may even be a financial disaster.

      We use the following to rank Property Classes, in order of importance:

      • Property Tenant Pool: closely linked to location, but not always.
      • Property Location: closely linked to tenant pool, but not always.
      • Property Condition & Amenities: it’s important to, “Maintain to the Neighborhood.”

      Key metrics for each Property Class:

      Class A Properties:
      Tenant Pool: Majority of FICO scores 680+, no convictions/evictions in last 7 years.
      Tenant Default: 0-5% probability of eviction or early lease termination.
      Section 8: Class A rents are too high and won’t be approved.
      Vacancies: 5-10%, depending on market conditions.
      Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.

      Class B Properties:
      Tenant Pool: Majority of FICO scores 620-680, some blemishes, no convictions/evictions in last 5 years.
      Tenant Default      : 5-10% probability of eviction or early lease termination.
      Vacancies      : 10-15%, depending on market conditions.
      Cashflow vs Appreciation: Typically, 1-3 years for positive cashflow, balanced amounts of relative rent & value appreciation.
      Section 8: Class B rents are usually too high for the Section 8 program.

      Class C Properties:
      Tenant Pool: Majority of FICO scores 560-620, many blemishes, but should have no convictions/evictions in last 3 years. Verifying recent 2-years of rental history very important! Same for 2-years of job/income stability.
      Tenant Default: 10-20% probability of eviction or early lease termination.
      Section 8: Class C rents usually meet program requirements, proper screening still recommended.
      Vacancies: 10-20%, depending on market conditions and tenant screening.
      Cashflow vs Appreciation: Should cashflow immediately, at the lower end of relative rent & value appreciation.

      Class D Properties:
      Tenant Pool: Majority of FICO scores under 560, little to no good tradelines, lots of collections & chargeoffs, but should have no convictions/evictions in last 12 months. Verifying last 2-years of rental history and income/employment extremely important to find the “best of the worst”.
      Tenant Default: 20-30% probability of eviction or early lease termination.

      Section 8: Class D rents meet program requirements, often challenges to pass Section 8 inspection.
      Vacancies: 20%+, depending on market conditions and tenant screening.
      Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciation.

      Where did we get our FICO credit score information from?

      Check out this chart:

      FICO Score

      Pct of Population

      Default Probability

      800 or more

      13.00%

      1.00%

      750-799

      27.00%

      1.00%

      700-749

      18.00%

      4.40%

      650-699

      15.00%

      8.90%

      600-649

      12.00%

      15.80%

      550-599

      8.00%

      22.50%

      500-549

      5.00%

      28.40%

      Less than 499

      2.00%

      41.00%

      Source: Fair Isaac Company

      Make sure you understand the Class of properties you are looking at and the corresponding results to expect.


       South of Patrerson Park is all good. West of Patterson Park is mostly good w a few bad blocks. East of Patterson Park is block by block. North of Patterson Park, the first block is OK, but then gets worse each subsequent block up.

      [email protected]301-893-4635Podcast Guest on Show #192
      District Invest Group545 Reviews
      WebsiteView Page
      2Reply
  • Ozzy SirimsiBusiness Member
    Real Estate Agent · Baltimore, MD · Member since 2016 · 1k+ posts · 782 votes
    1y

    Congrats and good luck!!!!

    If you find an MLS deal that can cash flow, and you can get appreciation, pretty good.

    Good Luck with the inspection!!!

    0Reply
  • Nina DiehlPro Member
    OP
    Baltimore, MD · Member since 2025 · 39 posts · 15 votes
    1y

    Thank you for this advice. Sadly, there was over 20,000 in work that showed up from the inspection. On a property that appeared to be turnkey. We are asking the sellers to fix everything with receipts from licensed contractors. I’m not sure if they’ll agree. 

    0Reply
  • Nina DiehlPro Member
    OP
    Baltimore, MD · Member since 2025 · 39 posts · 15 votes
    1y

    This seems like an increasingly difficult thing to do. How many properties do you analyze before you find a deal?

    0Reply
  • Nina DiehlPro Member
    OP
    Baltimore, MD · Member since 2025 · 39 posts · 15 votes
    1y

    Thanks for this advice Drew. 

    0Reply
  • Majeida Harvey
    Member since 2024 · 1 post · 1 vote
    1y

    Hey, Nina. Thanks for sharing your journey, and please keep me updated. I resonate with your story; we all have experienced the start of something new in many ways, which makes the business journey a worthy adventure.

    1Reply
  • Rick Luebbert
    Real Estate Agent · Memphis · Member since 2021 · 41 posts · 25 votes
    1y

    Welcome to BP, Nina! If they are unwilling to make the needed repairs or negotiate,  I would suggest walking away. Chalk it up to a learning experience for when you look for your next opportunity. Is this a private seller, or are you buying from a TK provider? 

    0Reply
    • Nina DiehlPro Member
      OP
      Baltimore, MD · Member since 2025 · 39 posts · 15 votes
      1y
      Quote from @Rick Luebbert:

      Welcome to BP, Nina! If they are unwilling to make the needed repairs or negotiate,  I would suggest walking away. Chalk it up to a learning experience for when you look for your next opportunity. Is this a private seller, or are you buying from a TK provider? 

      We were not buying from a turnkey provider, but the owner had made it look really nice- new everything until we went through inspection and found that electrical, plumbing, and HVAC were all messed up pretty badly. 

      We asked the seller to fix the problems, they refused, we walked away. Two weeks later, the property was off the market without a sale. Not sure if the seller “fired” her agent or what happened 🤷🏻‍♀️. The $475 paid for the inspection was the best money spent!
      0Reply
    • Rick Luebbert
      Real Estate Agent · Memphis · Member since 2021 · 41 posts · 25 votes
      1y
      Quote from @Nina Diehl:
      Quote from @Rick Luebbert:

      Welcome to BP, Nina! If they are unwilling to make the needed repairs or negotiate,  I would suggest walking away. Chalk it up to a learning experience for when you look for your next opportunity. Is this a private seller, or are you buying from a TK provider? 

      We were not buying from a turnkey provider, but the owner had made it look really nice- new everything until we went through inspection and found that electrical, plumbing, and HVAC were all messed up pretty badly. 

      We asked the seller to fix the problems, they refused, we walked away. Two weeks later, the property was off the market without a sale. Not sure if the seller “fired” her agent or what happened 🤷🏻‍♀️. The $475 paid for the inspection was the best money spent!

       Good for you, Nina. Cosmetic repairs can be deceiving. You did the right thing. On to the next deal!

      1Reply
  • Jay ThomasPro Member
    Real Estate Agent · Houston, TX · Member since 2021 · 1k+ posts · 715 votes
    1y

    Hey Nina, welcome to the Forums, and congrats on taking such a big step in your real estate journey.

    Wishing you all the best with the inspection.Cheers!

    [email protected]832-889-5607
    1Reply
  • Steven Rossi
    New to Real Estate · Baltimore, MD · Member since 2022 · 12 posts · 5 votes
    1y

    Welcome Nina! Congrats!

    1Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free