All Forum Posts by: Account Closed

Anyone own or consider the older ones? From what people tell me, it's a lot more hassle and work. These owners are desperate to sell and have been trying for many years. I just don't want to make a grave mistake especially with the market being high now. I may offer low to get a 10% cap at least to account for a larger budget for updates/repair/maintenance. Get ready to just wait or continue with the newer Duplexes and SFHs.

What do you think of buying an older apartment building? Can this work for long term cash flow? They seem to be lower priced and what I can find. Newer ones are rare to be on sale and cost a lot more. I've been looking for my first larger building (10-12 units). Currently own 2-units and SFHs all built in the 80s/90s.

I toured a 10 and 12 unit building recently and they are built in 1950 and 1970. 2bd and 3bd units. Utils, HVAC, and water heaters are modern and separate on each. Rents are low by around 100-200/ unit. There is plenty of value add left. Location is decent, small town, yet close to city, jobs, and everything that's needed. Little to no crime. Fully leased.

@Shaun Sullivan - Oh yeah I know there. They had foreclosed condos there, still come out once in a while. It seems OK. I've considered it before and I've never tried a condo. I've been trying to find something in the Frederick area that's reasonable enough. I'm only looking for possibly 1-2 more 2-units in Hagerstown and I should be set. Don't want too many there.

I have a few off market distressed houses I found driving by in Frederick and Middletown that meet my criteria as well. I've been meaning to make contact and try to close on one at least. One rehab project on the side should be ok.

@Shaun Sullivan - I haven't heard of Country Side off 85. Fredericktowne Village + Old Farm are both good rental locations. There should still be a foreclosure or two coming out of both areas once in a while. If you're ok with a little less than 1% then that can be had in the Frederick market today. Possible 1% if you get an extra good deal on a foreclosure.

For maintenance/capex on a townhouse, it depends how old it is and what your initial rehab/update is like. There will be something you need to do upfront. That can be factored in your offer if the price does not already reflect those things.

I've been expanding slowly in Hagerstown. 2-Unit duplexes built in the late 80s in decent areas and good schools. Fairly easy to get over 1% purchase-rent. Exiting old landlords provide a discount as well to sell quick for instant equity. That has been working well for me out there and I rarely have to go out there after closing, small rehab, and renting one out.

@Shaun Sullivan - Yes it is difficult to find now for the 1+%. I got in low during the foreclosure wave few years back and able to achieve 1+% on rentals in the area. I haven't bought anything in the Frederick area since. There were a few low priced sales recently in Middletown. One sold for 90k for a split level, but a big rehab. I did bid on a HUD townhouse with basement for 97k in Stonegate in Dec, but was outbid.

Be careful with the rural areas over 15 min out from Frederick (Boonsboro, Myersville,Thurmont, Walkersville, Brunswick). Rentals take much longer to rent out. Same with Sales. I think you are right in your homework. 

Middletown suburbs are an exception. Of course don't buy too far out into the country in Middletown. Same effect. The area has top schools and command a higher price than Frederick areas. Got in low and enjoy the appreciation and fast renting to high quality, highly paid families. Many from MoCo moved here and commute to MoCo for work. 10 min to the Golden Mile.

Welcome! I have rentals in the area. Frederick, Middletown, Hagerstown. 

Frederick + Middletown values have increased with the foreclosure wave dying down. Areas stabilized quick by new population who got in at bargain prices! But there are still deals to be had that can work as rentals. There are still some foreclosures coming out as well.

Hagerstown would be the place to look for cheaper houses. Especially if you're looking for a rental or 2-unit duplex that are newer built in the 80s or 90s. The rental market is decent there and generate decent cash flow.

This only has an advantage if your Heloc is a lower rate than your mortgage and won't be jacked up anytime soon (more likely will be). Otherwise, you're just paying extra interest to pay down.

If the rental is cash flowing well and you don't really have a need to pay off the mortgage, keep it. The right lender will just need the lease and the mortgage debt can be offset in qualifying for the next rental. You can also save the Heloc to get the next rental if the numbers work out right then pay it down quickly to reuse again.

Your rental* - I would sell it if it doesn't cash flow now. You may fare better selling it as a primary without a tenant inside. Then find a better rental 30 min further south from NOVA/DC.

I haven't paid off any 30 year low fixed rate mortgages. They all cash flow well, but tenant's principal pay down is really slow. I can rely on it now as I'm still young.

I have paid off short term loans used for the down payments however as they can affect my ability to acquire more. Helocs, 401k loan, OPM- not comfy borrowing long term etc.

Get the Heloc set up first. It won't hurt to have it and not use it.

After when you look for a lender, make sure you let your lender know everything of your plan. It's usually 25% down. If they're investor friendly this would be no problem at all. If they aren't, they'll come up with excuses and improperly calculate your DTI and such. Just make sure you get pre-approved first and make sure can close before finalizing with appraisal and such.

Interest Only Heloc is better for DTI since it's much lower monthly payment. Make sure you are disciplined to pay the principal down on your own too.

I have done it and helped others in my area do it. It all comes down to finding a lender comfortable with lending on investment property.