House Hacking in Baltimore City

[Jasmine Benford]

Hello everyone! I am ready to start my REI journey! Ideally, I would like to start off with a House Hack. I'm curious to know if anyone has house hacked in Baltimore City and what areas you may suggest. I work downtown and would prefer to hack [near] downtown as well! I would like to enjoy living near where I work. Thank you!

[Eric Anderson]

Good morning @Jasmine Benford

How is the market in the down town area?

Wendy and I are working doing the same out here in California.  I've been walking and driving for dollars, looking for those properties that we want to occupy.

It is a bit of a challenge because the good four plexes are not on the market; only the ones investors do not want make it to the MLS for public consumption. So... we'll need to rely on direct sales letters to generate opportunities.

Best of luck in your search.  It is a game of longevity so stick with it and you will find "that" property!

[Sebastian E.]

Hi Jasmine,

I have also been looking at some similar type properties. Although the prices are obviously much better in Baltimore than in DC where I am there is a reason for it. Taxes are through the roof and regulatory hoops seem to be harder than even in DC where it's no walk in the park. Also similar to nuclear fusion, Baltimore has been 10 years away for 30 years. On a lot of the stuff I am looking at that was originally purchased in 05/06 is still 20% down today. 

With the house hack you have a big leg up on traditional investors because your short term returns don't have to be as high or immediate as those who are working with financing. I would suggest taking advantage of every new homebuyer program in Baltimore, make sure you are in a CHAP district to mitigate tax risk and find something where you can put in a few roommates or a duplex. 

Good luck and keep us posted!

Seb

[Mark Moyer]

That was a pretty good summary @Sebastian E..  Baltimore doesn't have the giant incomes that DC has so it will develop more slowly.  The city is geographically very large so it's easier to talk specifics about neighborhoods rather than the area as a whole.  There are certainly pockets of wealth and then areas of intense poverty.  The areas of highest speculation in 2006 are some of the areas that are still % down today.  It's a sign of how unrealistic some of that speculation was.  Other neighborhoods have exceeded prior levels to reach new growth patterns.  

[Sebastian E.]

Thanks @Mark Moyer would love to sit down with you in Baltimore when I am back stateside. What do you think of the Station North / Old Goucher area? I am thinking specifically of a large SFH that I can house hack.

[Mark Moyer]

that sounds good Sebastian.  Those neighborhoods are worth keeping on your radar.  Sometimes the best deal will make itself clear when the time comes.  There's other places with large homes that could be a good fit as well.  

[Jasmine Benford]

Thanks @Sebastian E. ! I am finding that many of the homebuyer programs cannot be used for house hacking...unless the lender I am working with is unsure. I am still waiting to hear back from a few other lenders. 

[Sebastian E.]

Hi @Jasmine Benford. Are you referring to a house hack as doing a multi-family? That was true for my experience in DC as well. 

And thanks @Mark Moyer you are right. I have also found that the universe has a way of handling some of those things as far as deals go so long as I am open to accepting  them when they come!

[Jasmine Benford]

@Sebastian E. Sorry I wasn't clear, yes, I am interested in house hacking with a multifamily unit. 

[Sebastian E.]

Yeah. I ran into the same problem in DC with the first time homebuyer programs.

[Jacob Ansbacher]

@Jasmine Benford Use Live Baltimore  (https://livebaltimore.com/) to learn about Baltimore City's Home Buying assistance programs.  I didn't end up applying for any of the programs for my house hack but I found the class very informative.

I just moved into a duplex last month using an FHA loan. Does anyone have any advice for refi? I plan on fixing up the duplex and reappraising to get my 20% equity. Thanks

[Jasmine Benford]

Thanks! @Jacob Ansbacher ; how long were you looking for your multi before you purchased? Also, what area did you purchase in?  

[Jacob Ansbacher]

@Jasmine Benford ; I purchased in fed hill / riverside. I spent ~300k, a little more than I wanted to spend, but ended up putting down less than 10k with my FHA loan because i asked for "seller help." I am happy because my expensive property will depreciate every year on paper, I can raise the rent and lower my monthly payments with a little construction and refinancing out of my FHA loan, and as soon as I move out i know i can cashflow 1200-1800/mnth

[Stephanie P.]

@Jasmine Benford

House hacking is alive and well in Baltimore.  The first house my husband I bought was on Chinquapin Pkwy off Northern Pkwy and York Rd.  A 2 unit that will probably go for about 125,000 now (we bought it at 58K I think) but rents have risen commensurately.

That area around Northern Pkwy, York Rd. The Alameda is a great place to buy and rent because of the proximity to downtown Baltimore or north to Towson etc...

FHA is the best way to go for these type of loans. Let me know if you need a lender. US Commercial doesn't do them, but I know some good lenders that do.

Best of luck,

Stephanie

[Jasmine Benford]

@Jacob Ansbacher thank you! It seems as though I may have to look into "upping" my purchase price because some of the multi units i have seen, have needed some major renovations. Not sure if would meet FHA requirements. I am trying to remain patient nonetheless.

@Stephanie P. that's great to hear! I am going to assume that you renovating the property? Were you able to use a FHA loan for that? I am interested in learning more if you have some time to chat!

[Stephanie P.]

@Jasmine Benford

You can, but we didn't.  It was quite a while ago.

FHA 203K is the program you want to use for multiple unit renovation (up to 4 units).

Most homebuyer assistance programs are for single family.  In the District, DC HPAP is single family and I don't know of any in Baltimore that are for multi family.

With FHA, you only need 3.5% down and that can be a gift. You can get seller help as well.

It sounds like you need a good lender. Let me know. We don't do FHA (just don't want to get hit for solicitation outside the marketplace by the moderator), but I'll be glad to send you a referral.

Best of luck and welcome to Biggerpockets.

Stephanie

[Jasmine Benford]

@Stephanie P. Once again, thank you for sharing. That was great information!