First Baltimore Bayview Rental

[Ken Wang]

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Baltimore.

Purchase price: $115,000
Cash invested: $87,162

Contributors:
Ozzy Sirimsi

Baltimore duplex (row house: 1st and 2nd floor is the 1st unit, basement is the 2nd unit, legally zone duplex )

Total cash invested: $87,162 Breakdown -->
Downpay: $28750
Closing cost: $13682
Rehab + misc cost: $40370
Holding cost: $4360

What made you interested in investing in this type of deal?

Great location close to Johns Hopkins Bayview hospital, and upcoming Bayview area

How did you find this deal and how did you negotiate it?

Close to where I work, talk to the neighbor, and found this deal sale by owner;

First time buying from the homeowner, who was quite difficult to deal with. The closing cost is quite high because we covered almost all the expenses. I should also negotiate the purchasing price lower.

How did you finance this deal?

conventional finance, and 401k

How did you add value to the deal?

Although it is a legally zone duplex, the owner used it as 1 unit rental. We finished the basement as a 2nd unit. The rent is increased from $1200 (single unit) to $1900 (2 units)

What was the outcome?

1. The rent is good with room to increase, and reserve for raining day
2. Great location -> appreciation potential and easy to find good quality tenants

Appraisal price after all the work as of 09 2019: 166k - 171k

Monthly rent: $1050 (2 bedroom, 1 den, 1 bathroom, 2-floor unit)
$850 (1 bedroom, 1 bathroom, basement unit)

Reserve: Vacancy 8.3%, Repair/cap ex: 12%, PM 10%, PITI: $737

Lessons learned? Challenges?

1. After the contractor finished the basement bathroom, I noticed the shower drain was not smooth. I was hesitating if I should ask the contractor to fix it because they gave me several reasons not to do it. Glad I insisted, and it saved me much trouble later.

2. Oil heating system needs much time and effort to take care of it

3. Electric is separated meter but gas, water, oil heating are shared. It needs more involvement in terms of management

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Thank you BP member @Ozzy Sirimsi to work with me for this deal!
I hope through this post. I can connect more people to get next deal!