Looking for Real Estate Agents w/ Exp. in Multi-Family *2-4 units

[Abraham Bakre]

Hey BP,

Long time since my last post! I find myself in a position where I have cash to invest but no connections to find off-market property. I've recently moved out to MD (Dec. 2018) and have somewhat settled down to the point where I believe MD is now home. Living in Central MD seems ideal since I drive to PA, WV, DE, VA, & DC for my profession (Property Insurance Adjuster).

Distressed properties with upside seem to be the most attractive since I have decent construction knowledge and I am currently in a lease agreement until Jan. 2021. I don't mind breaking the lease if I find something sooner and the property management is aware of this since I was unsure if I would be here long-term when I moved here.

The eventual goal here is to transition into larger commercial real estate (10+ units and much higher). I feel like it makes sense to start out with the 2-4 multifamily househack home to take advantage of the FHA financing and build landlord exp. in order to look more credible to lenders in the future.

Quick facts:

-32 years old, -live in Laurel, MD, -$50,000 ready to invest, -not afraid to swing a hammer, -willing to learn/teachable!, -open to mentors and willing to work for free or pay for knowledge, -no real estate owned, -719 credit score (via Creditwise).

Open to any and all criticism and connections. Please help!

[Tim Jacob]

Hi Abraham,

I would really recommend a house hack of a single family unless you dont want to do much renovation on the multi family with the budget you have.  A lot of older multi families that are good enough to rent in Baltimore are on radiator heat and even if they arent or you keep that to enhance rents and get better tenants installing washer dryers if its not done as well as kitchen or bathroom reno will run you out of money quick.  

You could house hack in PG county and get a 5/3 single family detached for less than 300k hopefully closer to 250k so on fha with closing you will still have most of that 50k left assuming you cant get va financing if you can that will help you a little.  It will probably have prexisting hvac so if you did replace it would not need to be ducted which doesnt include the needed electrical which could often include upgrading a main disconnect or running 220s to a disconnect at the condenser or flex line for a furnace in the case of an old multi in Baltimore on radiator.  Other multi on radiator alternatives are ducyless mini split which is close to the same as full central hvac as well as baseboard which is cheaper but not nearly enough.  In the case of a newer single family with preexisting hvac if its broke and your replace the furnace, condenser and coil and its 5k or 6k.  If you dont run new plumbing and do cosmetic upgrades to a good sized 5/3 with a full bath in the basement and you don't go crazy and over spend which you can aid with some sweat equity you can come close to living for free or maybe make money if you rent the other rooms.

You can probably get a good 4/2 in Baltimore for 150k.  I would focus on the neighborhood and if its a good place for a house hack ie) near a college or in the right parts of Baltimore or somewhere else that will attract a lot of young people.  If the set up is good.  If you live there and you get a bunch of college kids you might want some space being a little older like being in the fimished basement with your own full bath while they live upstairs and share one.  I would get one with atleast 2 finished bathrooms with one in a basement and preferably 3 if the house is over 200k to purchase.  Id really focus on the neighborhood there are many homes in Baltimore for cheaper but that doesn't make them good investments.

I really wouldn't buy a multi on your budget unless you dont plan on reno in decent parts of Baltimore in can be ok but remember you will be paying the gas bill on a boiler unless its split which tenants will get in a pissing contest over if there are too many the same will be true for water.  

Another thing is being a landlord if you have never been before would be easier to walk away from a single family house hack then a multi.  The exit strategy is far easier in case you wind up not liking this.

Hope this helps.

Tim