Starting Small in Baltimore

[D'Aydra Allen]

I've been browsing different posts on BP and elsewhere about investing in Baltimore but I'd love specific feedback on the ideas and thoughts I have.

My husband and I own a HVAC company, he has the actual HVAC experience. I have almost 8 years of construction experience (estimating, project management, drafting). I think we're a pretty great team! We're finally ready to figure out this investing thing and we're very excited about the possibilities.

I think Baltimore would be a good start for us, as we have little money to begin with AND it's close enough to home. Is it realistic to invest 5-8k in one of the row houses in Baltimore? I have done online research of different neighborhoods; the good, bad, and in between. I've found a zillion properties in the 5k range and of those about a handful with actual potential (at least that's what I have come up with based on nearby neighborhoods, home values, and rental prices). I want to go to Baltimore this weekend or sometime soon to actually drive through some of these areas to get a real feel.

If things appear decent enough my idea is for my husband and I to purchase and put in major sweat equity to demo and remodel. We have family and friends who are electricians, home builders, plumbers, etc., so if we need additional help I know that we can make it work for a lot less money than average. Once we've remodeled, my husband would like to hold onto the property and rent it out (I'm undecided).

So, what do you all think? Any opinions on this?

**Just so you're aware, we plan to use our own cash, using credit is not an option at this time. Also, a partnership has been on my mind too... like, if we can come up with 5-8k maybe we could partner and have 10-16k total to invest in something better with someone else.

I look forward to your feedback!

D'Aydra Allen

[Jamal L.]

@D'Aydra Allen

Welcome to BP.  Yes it is totally realistic to invest in properties in the 5-8k range.  These properties typically will need a lot of work but depending on your exit strategy the numbers will vary.  I recently sold a property for $8.5k and the investor was very happy with the semi detached home (which needed about 8-12k worth of work).   The property was in a not so good neighborhood that had drug transactions taking place one block over.  The reason i mention this is because people still need a place to live. If you rehab a house appropriately, there are residents that are use to worse conditions in the area that may have family in the vicinity, therefore want to remain and will pay to have a better quality of life. We have a lot of deplorable properties in some of the worst areas in the city that could use an upgrade. So don't be discouraged if you drive some of the neighborhoods and find that they aren't what you were expecting. As long as you do a good job of screening tenants if you plan on renting it can be a good profitable investment.