All Forum Posts by: Andrew Hinton

Thanks Greg. Though I've learned that valuable lesson, I'm curious what creative approach may exist, used by other land use professionals to demonstrate unnecessary hardship or practical difficulty, which will make it possible to approve the extra basement unit.

Originally posted by @Greg Dickerson:

Originally posted by @Andrew Hinton:

I purchased a vacant property and planned to develop a certain number of units that requires a variance. However, the language in the Baltimore City Zoning Code says the following:

In order to grant a variance, the case must be made that "because of particular physical surroundings, shape, or topographical conditions [...] an unnecessary hardship or practical difficulty, as opposed to a mere inconvenience, would result".

It goes on to say that the purpose of the variance is not based exclusively on a desire to increase the value or income potential of the property.

The basement unit I have designed is very important to the financial success of the project but I'm having trouble explaining why it will also result in an unnecessary hardship or practical difficulty other than economic reasons.

Any suggestions?

First thing is you never want to close on a development parcel until you get all of the approvals and permits to build what you want.

That being said the best thing to do is call the city and ask them what the attitude is towards development in that area and what your chances of approval or denial look like. 

Impact on the income and profitability is not a hardship or valid argument as they will point out that you knew or should have known the limitations and restrictions regarding the zoning prior to purchasing the property. 

I purchased a vacant property and planned to develop a certain number of units that requires a variance. However, the language in the Baltimore City Zoning Code says the following:

In order to grant a variance, the case must be made that "because of particular physical surroundings, shape, or topographical conditions [...] an unnecessary hardship or practical difficulty, as opposed to a mere inconvenience, would result".

It goes on to say that the purpose of the variance is not based exclusively on a desire to increase the value or income potential of the property.

The basement unit I have designed is very important to the financial success of the project but I'm having trouble explaining why it will also result in an unnecessary hardship or practical difficulty other than economic reasons.

Any suggestions?

Hi Jin,

My top 5 reasons for investing in Baltimore is:

1) The Accessibility - it is a great central location and short train/bus from major markets in Philadelphia and DC and local markets like Newark/Wilmington DE, Annapolis, Frederick, Silver Spring, Columbia, Hyattsville etc. 

2) The University Systems - Top Tier Schools in their respective industries like JHU, JHU Medicine, UMD Law, UMD Medicine, MICA, UMBC, Loyola. Also lots of excellent local schools like Coppin State, Morgan State University, Goucher College. Collectively these school systems produce a lot of rental demand and are appealing to large companies. A multinational eduction company, Laureate International is also based here.

3) Local Industry - The main industries in the area are sometimes referred as "Eds and Meds". Industries like biotech, medtech, and pharmaceutical research will set up in and around Baltimore due to proximity to both JHU, UMD and the National Institute of Health, which has a $30 billion budget, majority of which is distributed as research/project grants. UnderArmour's headquarters are also based in Baltimore.

4) Value - residential properties easily earn 10%-12% year 1 (for those who know the areas best) and the high cap rate is driven by the immense demand for rental housing. This is due to the relatively low purchase price for an urban market as stable as Baltimore and the presence of a large low-middle market population.

5) Stability - contrary to what you read about, Baltimore is very stable. The cap rates have lowered very slowly for a long time now (lowering cap rates means higher property values). Of course the market hasn't grown at the rate of others like DC and the Southwest cities you are hearing about, but it continues to grow for investors which means appreciation benefits over time. 

For a long-term investor, Baltimore means high cash flow, stability of a large metro area, equity buildup from paying off mortgage with rental income, and slight appreciation.

Company is considering bidding on an RFP for a government-owned, vacant city block. Our first time putting together a bid like this - Is it a worthwhile venture? Are there any pitfalls? Who has succeeded in a similar venture and what steps did you take?... 

Good points you raise.  @Matthew G. @Theo Hicks and @Bjorn Ahlblad

Our company just settled on our biggest property yet and brought in several new investors over the last 3 months, thanks in part to the advice shared on this thread. Thanks a lot!!

@Robert Borr Valid poInt. I definItely see the value in sharing with investors that the sponsor’s legal standards are in compliance with SEC regulations. I think your comment also speaks to a point that I don’t believe was said yet - the overall professionalism and attention to detail with respect to legal consideration.

@Scott Morongell Seems like this is the best answer. Reminds me of the phrase my KW agency taught me. Know one cares how much you know until they know how much you care. So it’s less a pitch than relationship-building...

@Theo Hicks Love that perspective - trust builds over time. Once you have trust, wonder how I can convert would-be investors better? Or is the answer just...more time

@Matthew G. I think you have to look at the market and greater environment too. Have you seen any hesitation by investors given recent rate changes (/fear of future changes)? How about finding investors for “alternative markets” like Baltimore MD and Norfolk VA where we are positioned. How do you get over the perception or lack of popularity in certain markets?

@Bjorn Ahlblad Well said. Thanks for your feedback. Would you expound a little. Besides track record and the deal itself, what are investors looking for in a team? Let’s say specific to multi family acquisition.