All Forum Posts by: Andy Gross

Also, did the previous flipper do the job right?

I don't think you have enough of the right data. Ultimately, go back to ARV, which in Baltimore it is block-to-block dependent. If you are using comps more than 3 blocks away, your numbers are going to be off. You should be walking through with a contractor. If you suspect foundation issues, make sure your contractor knows something about foundations. You water damage could be from a roof. Make sure your guy understands roofing.

@Tim Jacob I think MAGLEV would be a game changer, assuming it could be done at a reasonable price. The challenge would be for the city to get it's mass transit in order. MAGLEV would be pretty cool, but if it's inaccessible because Baltimore can't manage transit, then it would be all for nothing.

Originally posted by @Mariama R.:

Thank you everyone for your posts including the one about the lead paint. This is really good to know. Most of the homes on the market in Baltimore that I'm seeing on the market were built around 1978. Baltimore is close to DC - you don't think DC will rub off on Baltimore in terms of wealth and neighborhoods coming around? Does John Hopkins serve as the main supply of tenants or not in Baltimore? I thought Baltimore would be good in terms of renting because of Hopkins and its doctors, medical students, nurses and other staff persons. I live in DC but it seems to be virtually impossible to enter the DC market at a low price point. Also, if tenants are unwilling to pay the rent, I hear that DC is unfavorable in terms of laws than is Baltimore - is this true? Thank you for the mention of the Reias - I will look into them because I need to investigate before plunging in. Thanks for the advice about PG County - I will look at. I recognize your name Sherman - I believe that you are a head of a REIA. What about homes in Federal Hill that were built in the early 1900s? Are there the same issues with lead paint?

Johns Hopkins is one of the main employers in the area, but most people, if they can afford it, live in the county. Younger folks might live in the city in enclaves like Charles Village, Canton, Fells Point, Federal Hill, Mount Vernon, etc, but if you have money and kids, you move to Baltimore, Howard or Harford County because they schools are far better. Some neighborhoods are SLOWY transitioning, like the Greenmount West/Station North Arts District, Washington Village (Pigtown) and Reservoir Hill. When you take into account the fact that property taxes are double what they are in the counties, and the need for private school for kids, you end up paying a huge premium to live in the city.

As far as lead paint in Federal Hill, it's definitely there, but it's either been cleaned up or encapsulated for the most part. The properties are in much better shape in that part of town.
There is no cash-flow to be had in A and B neighborhoods where the docs and nurses want to live unless you get a killer deal on a house or you score a multi-unit.

Baltimore isn't really that close to DC. If you work in downtown DC, you're an hour train ride between Penn Station and Union Station, so you're looking at 90 minutes door to do if you live/work any distance from either. That's just unpleasant. People have been hoping for DC to rub off on Baltimore for years, and it's happening, but really, really slowly. DC and Baltimore have similar landlord/tenant laws to the extent that they both favor the tenant.

That said, there is money to be made providing quality housing to those who don't have a ton of money. These houses won't be in the best neighborhoods, and you might not always have the most stable tenants. You might be able to go all-in on a place and make it decent for $60k, but management is going to be a challenge, especially if you don't buy on the correct block.

Right now, I'm looking at Baltimore County, specifically, Dundalk. I'm still on the sidelines right now, so take my advice with a grain of salt.

I paid $3000 per month in rent in Hawaii, because I was only going to be there two years and I didn't think I could recoup my investment. Four years and 10+% price appreciation later, we're thinking we should have bought. Oh well.

Some people just don't want to commit to the time and investment. My generation is not that in to home ownership.

That being said, I'm now a homeowner, and I'm spending money at Lowe's twice a month on small projects here and there. That's in addition to the 5-10 hours a month I spend on fixing minor things, updating things, etc. Sometimes, it's just nice to move into a place and not have to worry.

Dominion is a well run organization. As said, well respected.

I suspect that most wholesalers have their buyers, and the ones you see advertised are the ones that the players have passed on.

@John Bucci I would factor in maintenance to be a bit higher because could have turnover on a yearly basis. You should be able to rent it out quickly, but you might be doing carpet and paint more often.

In Federal Hill, you shouldn't have much vacancy, but you will have turnover.

The question is, where in Federal Hill is it?

@Stephen Quesinberry Great work! Got a few questions:

- Did you have any problems refinancing less than six months after purchasing the property?

- Where did you get your 5% vacancy from? Is that the average in your local area?

- How did you estimate rehab costs?