All Forum Posts by: Andy Gross

Eleanor - lots going on in your commentary, and Baltimore City rent court can be complicated for tenants and landlords alike. I suggest contacting an attorney to assist you in navigating the process, or at least giving you a primer on the process so you know which questions to ask your PM, and can hold them accountable if necessary. 

Generally, at any time before the actual eviction takes place, a tenant may redeem the property by paying the judgment and costs. If they've missed additional rent payments after the judgment, those are a separate legal action. A tenant loses the right to redeem after four judgments in Baltimore City. So a single Judgment/Warrant of Restitution isn't going to do you any good.

A tenant can withhold rent if there is a dangerous condition on the property, but the landlord must be on notice of the defect. This does not mean a landlord can put their head in the sand and say "well, I didn't know." The landlord has a reasonable amount of time to repair the problem. Furnace broke in the winter, when the temps are hovering around freezing for the next week? That's an emergency. This is why it is critical your landlord keep good records, including a call log for tenants that contains sufficient details.

If your PM isn't communicating issues with you, and stuff isn't getting fixed, they potentially putting you on the hook for some major headaches.

Again, you should contact a lawyer in Baltimore City who is familiar with the system so they can give you a primer on this kind of thing. Baltimore City has a lot of protections for tenants which exist because of a long history of terrible practices. 

This is true, but it depends where you look. There are some really, really nice old town homes that have been turned into 2-4 unit buildings in Baltimore. The Charles Street corridor, from downtown to Charles Village, has a bunch, but you can also go to Bolton Hill and Reservoir Hill as well. Purchase something, rehab it, live in one unit and rent out the other 2-3.

@Jim K. I think there is a middle ground between your primary residence and a 2-4 unit in a slum...hence, house hacking. I think @Tasia Larri is looking at that middle ground, and I think for her budget of $160k, she could probably find a 2-unit in a decent area. It won't be a huge place, but she should be able to make it decent (not luxurious) for that price. She won't cash flow, but she will likely only be paying a fraction of what she would be otherwise paying for rent or to buy her own place.

I also wouldn't say she has to forgo these things for the next 10-15 years, just long enough to build some equity and save up a little more money (which she'll do given the reduced housing costs that come with house-hacking).

I think your main constraint is the HNI loan. Have you looked at any other mortgage products?

The flip side to Russell's point is that you never learn if you don't make mistakes. I learned a ton during the renovations to my primary residence, and now I am paying to repair/remodel the mistakes.

Interesting. Not familiar with that particular block of houses, but you are super close to the park. I think you'll find you're getting more than just Hopkins students. You'll probably end up with a steady stream of 20-somethings just out of college, some of which might be employed or go to school. A good friend of mine lived in the next block and worked at an advertising agency, and I lived 4 blocks south while in grad school in another part of town. I think $700/room isn't crazy, if the place is nice. Historically, it got more expensive closer to Canton Square or the water, but that area has transformed in the past 15 years. Also, if you can get a legit apartment in the basement, you're in good shape.

All in all, not a bad place to buy. I think that you'd be well off house-hacking it. 

I would double and triple check that ARV, though. Prices in that area are highly variable depending on the street, block, number and size of bedrooms, bathrooms, condition, whether it has a roofdeck, parking, etc.

But, as someone above noted, keep in mind property tax and city sewer/water.

It's not perfect for BRRR, but it sounds solid for house-hacking in the short to medium term.

First, $3k/month in rent is a pretty high number, which I would double check. I think that number depends largely on which side of Hopkins you are on.

You also don't have a ton of margin built in, so if your ARV is too optimistic, or you have a surprise during the renovation, your final investment number is going to up.

A friend of mine has made it her full time job, but the city is trying to crack down.

 A friend of mine works with companies affiliated with Ridgecrest. Not sure about their PM business, but I know he takes his businesses seriously.

That said, you have to take a look at your contracts. They should have provisions for terminating the agreement, transitioning, etc.

With regards to the Arlington model, your profit gets wiped out if you have if you have to do any capital improvements. My mental math says less than a 4% return on your cash. I mean, you're going to continue to get appreciation, pay down the mortgage, tax advantage, etc, but those numbers don't leave a ton of wiggle room.

I know a lot of people bullish on Hagerstown because the downtown is getting revitalized, but at the same time, other than the jail, there aren't a ton of large employers. Martinsburg is showing some employment growth. USM Hagerstown is a bright spot downtown, though.

Interesting comment. I've always thought a wholesaler to be someone in the real estate investing world who finds off markets deals and markets them to people with cash who can close quickly. An investor, on the other hand, is someone who has money in the deal, meaning that they either purchased the property or are part of a group that purchased the property, but as you note, an investor can and generally is a broad term.

All are investors, but a wholesaler has a specific role in the REI machine.

That said, downstream investors find themselves wholesailing deals sometimes as well. 

It's funny how we give ourselves labels to identify our niche. You're a flipper, wholesaler, agent, landlord (even if you hire someone to manage), note investor, or a combination of the above. I find that most of the folks involved in this forum are a combination of the above, but it just tends to be too long to fit on a business card. 

I just like being called Andy, who is should also looking for buy and hold deals in Baltimore County markets. I guess I'll be a landlord.

Sorry to hijack the thread. Just a musing.