All Forum Posts by: Andy Gross

@Tim Youse - Demo can be expensive if they are doing lead remediation as part of the process.

@Julie Hassett - I just renovated my own home and acted as the GC, with input from my father who is an actual contractor. This was my first rehab project, and I was miserable. I work a full time job, and my time is better spent elsewhere. I ran into the same headaches that you have, as in not knowing what comes next, who to call for what, etc. A good GC is worth it, IMHO. You might be able to find your own electrician or plumber who can get you a better rate, but having a GC manage the subs removes headaches. You still have to manage your GC, and you'll learn a lot while doing that. That's just my two cents, however.

This is some great information! I totally agree with you that a second bath is a game changer. It seems like the 3/1/1 layout is functionally obsolete, and yet very common in the Baltimore area.

A lot of the 1/2 baths are in basements. Have you had any feedback that full baths in basements are undesirable or a waste of money?

Great work @Amy A.! Where are you investing? My family takes a vacation near Portland every year, and I keep telling them to look at stuff in Munjoy Hill. That way, they can make a portion of their vacation tax-deductible.

Smells like either a development deal that you could build a ton of nuts on, or the seller is full of crap.

@Leon Chappell a good property manager can help mitigate risk and manage the headache. But, consider this: You will be paying your manager 8-10%, which amounts to about $100 a month, give or take. It's tough to find good people to take on the amount of work management requires for that rate. There are some property managers on BP that work in the city, but I can tell you that for every good property manager, you'll hire/fire 2-3 duds.

I really recommend coming up to Baltimore and meeting some folks that work in the area. 

 Lots and lots of strategies in the area, and as others have said, tons of posts on the topic of neighborhoods, etc. I recommend attending the BWI Meetup.

Similar concepts have run in Patterson Park and Reservoir Hill with varying degrees of success. I'm interested. When is the meeting?

 The reason Baltimore CAN BE so profitable is:

- Tenant friendly laws and courts

- Tenants that know how friendly the courts can be.

- For every great tenant, there are several more that can't get their act together.

- Old housing stock and lots of lead paint - this point is not to be underestimated. 

- Stupid high property taxes

High risk can equal high reward. It can also mean huge losses.

@Andrew Nugent It's a hot neighborhood for the 21-35 crowd, but the prices might make it tough to make a profit. I found that the floor for Federal Hill was about $650 per bedroom near Riverside Park or near the southern end of Federal Hill proper. If the place was nicer or closer to Cross Street, you might be $1000 or more per bedroom. Parking of course always commanded a premium. My numbers are a bit old, but from my limited experience, it looks hard to break 4-5% cap rates in the area. I think the Charles Street Corridor north of the Harbor is a better bet.

If you are looking to househack, however, Federal Hill might be perfect. Lots of 20 somethings looking for rooms to rent. The trick is finding someone who is at your level as far as partying goes. Fed Hill has a ton of reasons to stay out until 2am. If you are a light sleeper, early riser, or teetotaler, you might want to screen carefully.

@Juan Rodriguez have you considered a 203K loan? This would allow you to fix something up and bring it into compliance with FHA standards. It's a great product.

Even if you can't cashflow, living rent free is certainly not bad. Cash flowing on a 1-4 unit property AND living there is going to be a challenge.