All Forum Posts by: Dennis Hollier

Thanks, Andrew, for the tutorial on Md property taxes and assessments. I read most of this on the Baltimore City property tax website, but it's good to have another go at it.

I guess my question was less a legal one and more about what current investors--particularly recent investors--have experienced on their new assessment. The property I'm looking at has had the same owner for at least 15 years and his assessment seems low compared to current sales prices in the neighborhood (including the likely sales price of his building.) Given the process you've outlined, should I expect the property tax to suddenly jump $3,000? My real estate agent says to expect more like a $600 increase, but I'm hoping to confirm this with someone who has real experience. The difference, of course, can make a big difference on NOI for a 4-unit building like the one I'm looking at.

Hi Charles. I like the idea of automatically appealing an increase in the assessment. Does the woman who appeals yours do this for other people? If so, I'd love to have her contact info. It's especially germane in Baltimore City, because the property taxes are so high. As you note, that doesn't mean there aren't good deals in the city; it just means the other numbers have to compensate.

Hey Baltimore Investors,

I'm looking at a multifamily in the city, but I'm worried that the taxes will rise significantly when I purchase the building. Does anyone know how assessments work in the city? Will the new assessed value equal the sales price, or is there some other formula that the city uses that will end up with an assessed value significantly lower than the sales price? The difference could be $3,000 a year in expenses.

Hi Ray,

Thanks for sketching that out for me. Actually, that dovetails neatly with my plan. Buy well, maintain properly, and generally be the best landlord at that price point.

The only problem with owner-financing as an exit strategy is that it may not be possible to get much cash out of the property. That would make it difficult to use the existing equity to buy a larger property. 

Ray Arends

Hey Ray,

Sorry for the delay responding. Part of that "eking out a living as a wordsmith" I guess.

So, if selling isn't an exit strategy for Hagerstown, what other exit strategies are there? My plan is to buy and hold, but not forever. My plan was to hold it for 5-8 years, then sell and buy a bigger place. Open to suggestions, though. We're looking at multifamily.

Hey Russell. If you don't mind, can I give you a call to discuss the market? I can chat tomorrow or Monday. Let me know what works for you. Thanks, Dennis

Thanks for the additional info, Ray. Yes, we're mostly looking for cash flow as opposed to appreciation, so Hagerstown may still work. Also, my "day job" is freelance writing, so I may have the flexibility to make regular runs up check on the property and keep tenants on their toes. Of course, I'm not opposed to appreciation. The question for me is, what's the exit strategy? Is it difficult to unload a decent cash-flowing property?

All that said, I'd be delighted to find something that can deliver the same numbers, but closer to home. Earlier, I gave Frederick a desultory search on Loopnet, but didn't see much that worked for me. Any suggestions on particular areas or submarkets?

Thanks for the quick replay, Andrew. Actually, I'm looking for cash flow more than appreciation, so that part of the story doesn't look so bad. Also, I've just moved back to D.C. from Hawaii, so I'll be able to keep a closer eye on a Hagerstown property. That said, I'm a little concerned about the region's economy. Just drove around the area today, and it looked pretty sleepy, even downtown on a Friday afternoon. Is that normal? I've run old rooming houses before, so I'm used to dealing with deadbeats; I'm more concerned with possible vacancy issues. Do you have any problems keeping units rented? Also, are there 10- or 12-unit multi-families available outside the city limits? 

Thanks for the heads-up!

Does anyone have experience investing in the Hagerstown region. Hard to tell if this is an old town that's dying, or if it's the next Baltimore/Washington exurb ready for investment. Seems like prices have risen over the last three for four years, but they really took a beating in the crash. There are apparently still some good deals, but I'm worried this might be the tail end of another, albeit lesser, bubble. Any opinions?

Hey Everyone,

Can anyone recommend an agent in the D.C. area who specializes in investment properties. We're looking for a small rental, ideally a duplex or bigger. If we can afford it, we're hoping to find something on the shabbier edges of Brookland or the H Street Corridor, but we're open to suggestion. We're also willing to consider near-in Maryland and Virginia. Any suggestions?

Dennis

Again, good advice, Darren. As a former property manager myself (in tenant-happy Washington,  D.C. no less), I know how onerous rent control can be. If I were investing in a multi-family in NJ, where would the best locations be? (Assuming, of course, the deals were comparable.)