All Forum Posts by: Brad Cogswell

Hey @Charles Cooper, that is the holy grail of contractors! My recommendation is to start creating a list of contractors that is quite large. You can use Angie's List, recommendations, mentions in various Baltimore investment groups, etc. Once you have those lists, then come spend some time out here interviewing them, asking for referrals, looking at their work, etc. There's a lot of work going on in Baltimore right now and people want to keep their crews busy, which makes it so they keep their contractor a little closer to the chest.

You can whittle it down and hopefully have a couple contractors to bid out your project who you feel comfortable about and trust them, especially if you're doing this from afar.

@David Johnson, @Ned Carey is right. When we first came to Baltimore we were blown out of the water on our rehab estimates because so much of Baltimore is older housing stock. Have a couple GCs come with you to look at a couple deals and you'll start to get a feel for some of the line items that will need to be replaced that quickly add to your rehab budget.

We tend to stay in nicer areas in Baltimore and have looked at gut projects ranging from $80k to $130k. Granted these are nicer areas than the one you're looking in, but it at least gives you a data point.

Hey all,

With some flips currently active, we are switching our focus to doing a couple of purchases and rehabs for buy and hold, in addition to one or two smaller multifamily value add deals.

I'm going to be speaking with banks this week and next, but wanted to see if anyone had any lenders they would recommend. Would likely need a commercial lender for both of these types of projects, and want to see what the typical time period for title seasoning requirements (obviously the lower the better).

If anyone has someone they'd recommend, I'd really appreciate a nod in the right direction.

Thanks, and as always let me know if there's anything I can help you out with.

Brad

@Ari Bachrach the title company can work through a ground rent redemption with you. 

Buyers won't care, but it's important to note that some national lenders who aren't familiar with ground rent will require you to redeem the ground rent if you are going to finance it. They will only finance fee simple, not leasehold.

The only other thing I'll add to @Rich Baer 's spot on explanation is that if the ground rent was created before a certain year, and I think it's 1993 but I could be wrong, then the redemption amount is divided by .03 instead of .06.

@Terry O'Brien in my opinion it's going to be very difficult to do a flip for all in less than $75k. You've got to assume that you'll have around $5k in closing costs to purchase the property. Many of the houses in Baltimore are older 1900-1920 stock, which means that there's always standard work that needs to be done mechanically/code wise. Are you doing the work yourself? If not, this formula means that IF you were able to find something that did work within $75k, you're going to be in a pretty rough area.

@Patrick J. why don't you just post an ad on Craigslist and pay someone hourly?

People are assigning contracts all the time here, don't know the exact rules around what's allowed and what isn't though.

And spillage into Baltimore definitely is happening in certain areas.

@Account Closed I wouldn't say it's me in particular, more to newbie investors/people that don't know the area. There's the allure of incredible cash flow in Baltimore, which is true. But wholesalers and others know this, and will package up vacant units and try to put a tenant in them and market it as a turnkey deal. If you look at Google Maps you can see comps in the area so it seems to make sense. But when you visit in person you can tell that it isn't worth it.

There's a lot going on in this thread, so I'm not going to comment on the cash flow vs. appreciation argument or anything like that. What I will say is went to college in Los Angeles and lived in Orange County working in real estate for several years after that, so I'm very familiar with the LA market. I currently live in San Francisco, and invest in Baltimore (and love the city as I've become more familiar).

I'm happy to share my experience. Investing in Baltimore takes more dedication for an out of state investor because of the block by block nature of the city. I frequently am flying out to Baltimore to stay for a week at a time to establish my team and get to know the neighborhoods. I haven't gotten into rentals yet, am specifically working on flips. There are also some people who have tried to take advantage of my lack of intimate knowledge of the city, and that comes with being an outsider. 

Through all of this, am glad I chose to invest here and happy to answer actual tactical/strategic questions if you have any.