All Forum Posts by: Ray Slack

That's a tough one. I would think you need someone that specializes in shipping container homes. 

Baltimore is a prime example of why you CAN NOT use a 1% 2% or any percent rule. You need to use a Cap Rate based on the amount of cash you are putting into a deal and the NOI you are getting on the rental. It's a basic formula that takes about 5 minutes to calculate on any deal. You have to learn how to do this simple calculation if you are going to invest in real estate PERIOD.. I read about someone buying a condo based on the 1 percent rule but they didn't take into account the $900 per month condo fee. I recently bought a townhouse in baltimore for $13,000 but the taxes on the property right now are $2300 per year. I'm sorry to be so blunt but if you don't know how to total up all your annual expenses and divide them by your projected income to get a cap rate you should not be investing in real estate. As far as Cap rates (which is basically your cash on cash return rate) I look for 10% to 20% based risk, potential appreciate, how difficult management will be on the specific property. If you still are stuck on the 1% rule or the 2% rule contact me through email as I have about 10 properties in baltimore city I will sell you out of my portfolio that meet your 1-2% rule requirement. Would they be a good investment for you? Probably not. But hey they will fall into your 1% to 2% rule.

If the property is in Bowie or Lanham I would suggest Apex management but they mainly manage bowie Properties.   

I buy REOs through auction.com, hubzu, and a few other online auction companies. They used to pay for your owner's policy if you used their title company.  Which the bank /Seller owns.  

Now they are not paying for the buyers policy but their are forcing you to pay a $700 transaction management fee to the Seller's title company if you don't use them and choose to use your own company.  

  If I don't want to use the seller's title company (Which they own) and agree to use my own title company and pay all the buyers and seller's costs imposed by my title company how can the the seller's title company still charge me a fee just because I'm not using them?  I believe this is illegal.  Any input?

I agree with Ned.  You are looking at A rated areas of Baltimore.   I own several properties all in lower income areas of baltimore city that I would never live in myself but  they are 2x and a few 3-4x properties.    You can buy a 3/2 in a lower income neighborhood that rents for $1300-$1400 for $30k to $40k or you can buy a 2/2 in the A rated neighborhoods for $200k that rents for $1500 to $1600.  Now my lower income area properties while being cash cows will probably go up in value 1-2% per  year as opposed to the higher appreciation in A rates areas.  Give me the Cash Flow!!

it would help if you let us know what county you plan to invest in.

If you are just seeking his advice on setting up your business structure, Yes I think it's too high.  His hourly rate seems fair but it shouldn't take more than 1-2 hour consultation and another 1-2 setting up everything.. If you give him a $5k retainer your not getting anything back. I ran across a company online that just works on setting up structures for saving RE investors on taxes and they seemed really reasonable.  I'll try to find their information or a link to their site. 

Okay. I'm going to chime in. I can't speak for Maryland (Even though I live here now)  but in Florida it would not be illegal to pay the bonus/referral fee to a non licensed person (as long are you are also not licensed as a real estate agent)  but it would be illegal for them to receive it. (Acting as a real estate agent without a license ).  

BTW that purchase price needs to be your "all In" price including renovations and closing costs.

IN a small town with this much sweat equity I would say that you should figure out what you could rent out the units for fixed up..  Say for the sake of arguement $750 each..    Annual Gross =$54,000 subtract out expenses such as taxes, water/sewer insurance, v&C of 5% for say expenses of $8000 ish to get a net amount of $46,000   I would say in a small town with this many vacants you should be getting around a 20% return.   so, based on those numbers purchase price in the $230k range.  Of course if the rent or expense numbers are not inline the purchase price will change.