Can someone help me analyze a property?

Question

So I am new to the game, and I was wondering if someone can help me analyze a property in Pigtown?

http://www.zillow.com/homes/1411-Ramsay-ST-Baltimo...

The price seems to good to be true, which makes me skeptical.

I found it day before yesterday and haven't had a chance to go check out the neighborhood. Does anyone have any info on this part of Pigtown?

Or, does anyone know how I can find more information on this property?

Thanks in advance, STEW

Roy N. · Answer

Account Closed would be of more assistance there.

While the property shows well, you would want to have a look at the quality of work - and the things potentially left untouched (perhaps mostly behind the scenes) such as wiring, HVAC, air sealing and insulation, roof, etc.

You might also find comps from the local neighbourhood to see where the valuation would/should be if this were a traditional sale.

If your plan is to rent, you also want to research the market to know both the market rent and economic vacancy levels and the tenant population(s) to make your business case for the property.

Account Closed · Answer

Just got back from checking out the neighborhood. This is the nicest house for at least a couple of blocks. This house is 3-4 blocks north of Washington Blvd, and you can tell that is the real dividing line is this part of town. This house, at least from the outside, looked good, the rest of the neighborhood seemed in a poor state. 1 boarded up rowhome in the same (small) row and another across the street right next to an empty lot.

@Ned Carey, Just looking at the neighborhood I would be hard pressed to ask someone for $1200 to rent this place. I think for anyone to be even interested in renting this place, it would have to be for < $1000.

Jassem A. · Answer

You might get 800-1200/mo but also consider that the taxes are 3300/yr or 275/mo and your insurance will probably be at least 30/mo so if your tenant doesn't pay then you could still be responsible for the total mortgage payment for however many months it will take to evict them. This could be 600-900/mo depending on if it's 15 yr or 30 yr along with interest rate and PMI. You could also be stuck paying their old water bills if they are not feeling inclined to pay their utility bills.

Ned Carey · Answer

I see some others commented while I was composing my post. I would not be concerned about the wires or space heater etc. I am not sure it is even a space heater it could be an air filter.

My guess is this was a full gut rehab when it was done. In other words this was taken down to the bare brick walls incl.  everything but floor joists and possibly sub floors. This was common when it was lost sold in 2007.

Yes it is possible that there are some minor issues and maybe the construction quality is poor. However from the pictures that does not appear to be the case. In one basement photo I can tell it has new HVAC, new plumbing, new electric. In that photo the only original part of the building that I see are walls and 1 floor joist. Two joists were replaced.

There is no condo HOA here. This house was built in 1900 and HOAs did not exist then.

Ned Carey · Answer

Thanks for the tag @Roy N.

@Michael Steward first of all it is not Pigtown. Pigtown is not an official city designation for a neighborhood but nobody would call that side of the railroad tracks Pigtown. The official name or Pigtown is Washington Village. Washington Village, or Pigtown if you prefer, is a better neighborhood. This is in Mount Clair.

This is a $150K house in a $40k neighborhood. It is a steal  for the quality and condition. However this was overdeveloped for the neighborhood. It is fairly priced but not the bargain it appears at first glance. Also it is a short sale - no guarantee it will sell at that price.

If you wanted to live there this is absolutely the nicest and cheapest deal you will get that close to downtown. If this was on the other side of downtown that close in, say in Fells Point, it would be a $250k house.

It would rent section 8 for $1200 would be by my guess, which solidly meets the 2% rule.

Ashley Schroeder · Answer

The townhome/condo does show nicely in the pictures but there are a few larger things that trigger concern (and you would want to check out).  Maybe they aren't major but they may be.  Such as a very large space heater in the bedroom.  I understand it being cold (we get -40F temps at times during our winters), but your house shouldn't need a space heater that large (unless if it is a personal preference).  Also in a lot of picture there seems to be electrical wires hanging.  In the basement they have a light with outlets at the top.  Are these signs of not enough electricity?  Needing a new panel or rewiring?  Again they may not be major; and with it cosmetically looking okay maybe you'll be able to afford to do some major updates that don't pass inspection or are not up to code.  Just some things to keep in mind!

Jeremy Paschedag · Answer

It looks like that is a condo.  Be sure to include condo fees/HOA fees into your numbers.

Can someone help me analyze a property?

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