All Forum Posts by: Jonathan Tavarez

Investment Info:

Townhouse buy & hold investment.

Purchase price: $87,000
Cash invested: $28,000

Baltimore row home, I acquired the property because I like the area and it was a good cash flow deal for my numbers and strategy.

What made you interested in investing in this type of deal?

I'm looking to increase my rental portfolio, I'm familiar with the area and have been trying to acquire more properties in this part of the city.

How did you find this deal and how did you negotiate it?

MLS I knew my numbers since before the properties was available. I lost another deal in that same street just a few months ago but was able to acquire this one (more sqft). For now it is rented but when I decided to renovate and sell it will be a really good deal fro the area.

How did you finance this deal?

Cash

How did you add value to the deal?

I'm improving the quality of living for the tenant that I inherited by putting a brand new HVAC system. Other than that the property is in great shape so I'm not doing any additional repairs for now.

What was the outcome?

Rented property cash flowing around $400 a month

Lessons learned? Challenges?

TBD

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

The best realtor in Maryland @Sarah Tavarez, she is my wife :) and we have purchased 6 properties so far and she has helped other investors as well.

Hi @Christopher Brandenburg,

I have experience with Ashland Auctions but are you asking if they are a legitimate auction house? Because if so then yes, absolutely they are a legitimate auction house, they work hundreds of properties every year and have been doing so for many years as well. If you are asking if all the deals they sell are great? then the answer is no, just like any auction house not all the deals are great, you have to do your homework, understand the costs associated with auction houses and then make your choice. I have seen properties they sell with reserve prices higher than the MLS but its all about the buyers, that's not the auction house. In terms of fees well all action houses have them just factor them in your purchase, round the numbers and see if the deal makes sense for you. Best of luck!

@Lauren Fernandez Then maybe just rent a different place for a year?  If you are set in buying then just try to buy as cheap a house as you can get in this market, keep an eye on North Laurel or Elkridge (Howard County side) some times old properties pop up for around ~$320K, that could be a good investment overtime and you wont have to stretch your budget as much. 

I agree with @Ozzy Sirimsi, if you dont have to buy right now then wait another year and see what happens.  After this pandemic is under control and the forbearance is done there should be more inventory and prices should calm down a bit.

There will be a correction for sure because of more inventory available and some foreclosures but hardly a tsunami in my opinion.  For those missing mortgage payments the house is probably  worth 20% more than last year, they can refi, get cash and keep waiting.  Inventory is so low right now that even after people are comfortable to list there homes it will take months before a significant supply hits the market and we are not even talking about stimulus checks and unemployment benefits, lots of folks sitting on cash right now.  I just don't see anything mayor happening to prices this year.

Adding another vote for Redfin!

Investment Info:

Single-family residence buy & hold investment in Laurel.

Purchase price: $435,000
Cash invested: $30,000

I purchased this property as my personal residence, after a few years we put it in the market for rent and now instead of a liability it is an asset cash flowing almost $700 a month (plus the amazing equity!)

What made you interested in investing in this type of deal?

Good property in good area, we decided to purchase for the family with plans of selling or renting after a few years.

How did you find this deal and how did you negotiate it?

This was my first property ever so we just got it out of the MLS

How did you finance this deal?

My own cash and a conventional mortgage

How did you add value to the deal?

A few repairs but nothing mayor.

What was the outcome?

Rented and cash flowing $700 a month

Lessons learned? Challenges?

It was a great idea to move and downsize, now we are mortgage free thanks to the cash flow from our other properties.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Sarah Tavarez from Keller Williams Realty Centre

Investment Info:

Single-family residence fix & flip investment in Baltimore.

Purchase price: $135,000
Cash invested: $50,000
Sale price: $245,000

Brooklyn Park Flip in Baltimore a few years ago, I'm finally adding some of the properties I have done under my profile. It took a while but worth the effort so other investors can get more information on the type of work I have done and the areas I invest. Enjoy!

What made you interested in investing in this type of deal?

I really like the Anne Arundel side of Brooklyn Park, this area has some good opportunities for flips and strong rental market.

How did you find this deal and how did you negotiate it?

I got this deal at an online auction, there wasn't much negotiation after the price was set and I offer a little more than the others during the auction time line. I had my numbers set in stone and I also went to see the property before bidding on it (something I strongly recommend you do if you buy at an auction).

How did you finance this deal?

I put some of my cash and some hard money. Hard money is expensive but if you factor your numbers correctly it is a great tool.

How did you add value to the deal?

We did a fairly big renovation, totally gut rehabbed the basement including a bathroom and also added significant work on the second floor. Some landscaping and added granite counters to the kitchen.

What was the outcome?

We got a nice profit but I really like the area so in all honesty I didn't wanted to sell it but at the end decided to let it go. I was happy with all the work and with this property I let my team have more freedom when doing the work and I was less involved. So all in all it was a great project.

Lessons learned? Challenges?

In this kind of project there is always surprises, some areas didn't have insulation and we only find that out after removing some of the drywall, some old electrical work even thought the main panel was upgraded, etc. At this point I see things as everything has a fix just do your numbers and don't freak out, there is always a way.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

My wife Sarah Tavarez with Keller Williams Realty is my agent and she does a great job with negotiations, it really helps to have a realtor in your team :)

I'm from Maryland and have been down this path before and can tell you from experience that you will need a significant amount of cash and time to entertain this kind of project.  Is not impossible by any means but just like with your typical rehabs there is a lot of competition and the impact taxes, dealing with the counties, etc. can be very time consuming an expensive.  As a quick example I was trying to work a deal on a 3 acre piece of land with 3 old structures in it, turns out that I needed to pay for road work for the area, light poles, electrical cables and connecting to sewers (even thought old properties were not connected) and that was all before putting one brick in place, not even going to mention the materials crisis we are seeing right now.  Take a look at the Maryland Building Industry Association, they have some great content.

Hi Carla and welcome to BP!

@Russell Brazil has a lot of experience in the DMV area and his numbers are very accurate.  I do want to add that there are multiple accredited investors in Biggerpockets that operate in the DMV area and since the market here is fairly high and competitive cash wont necessarily guarantees that you will get a good deal or good people to put a deal together (cash will get you a good realtor but that's about it).  I honestly believe that good deals at this point of the real estate market cycle are way more valuable than cash, but maybe that's obvious lol.  Happy hunting and if there is anything I can help you with let me know, always happy to help other investors.