All Forum Posts by: Joe Norman

I couldn't imagine managing a property from out of state unless you had an extremely strong team of people in your market to help with showings, inspections, repairs, etc. In addition you'll need to be able to keep up with the ever changing local laws and regulations which is doable from out of state, but will require proactive effort.

To find a good reliable PMC I would start by finding 3-4 that are (1) members of NARPM and (2) licensed by the state Real Estate Commission (not required in all states, but always a plus). From there do your normal due diligence, and remember that cheaper is rarely better. Good luck!

We don't consider charges/fees as "rent", but our lease does say that any money received by the tenant is applied to those first, and any left over is applied to rent. That has been the workaround for us.

@Nathan Gesner you're absolutely right, the rules are stacked against us here in Maryland. Even the Baltimore City Sheriff (who is in charge of enforcing eviction orders) testified in Annapolis this past session for more tenant eviction protections. Shows you who's side he's on...

Awesome man! Baltimore gets a bad wrap sometimes, but from an REI perspective it can be great if approached correctly (which it sounds like you are doing!). Keep up the good work!

If you're only looking short term then this sounds like a decent situation. Not a home run, but nothing to walk away from. Note, of course, that this opinion is coming from a place of the very limited information you supplied in your original post but on the face of it living for $1500/mo in a decent neighborhood seems decent to me.

That said, I would encourage you to look at this more long term. In 2-3 years, once you've gone through turnover and have the units rented at market rate how does the picture look? How much equity have you built up through amortization of the mortgage and appreciation of the asset? How much did you save in taxes through depreciation of the building?

What will this deal look like in 20 years (or whatever your retirement timeline is)?

Not all deals are home runs. Take the singles and doubles and be happy for them.

If you simply want to "get involved in it" I would suggest seeking out local, licensed property managers who are hiring. A year or two as an onsite manager for a large complex will likely be a great education.

If you're looking for equity/ownership, but without "burning much money", you're likely out of luck. You could look into syndication, however even that will require a significant upfront investment in legal and marketing fees.

Good luck!

I love the forward looking approach, however you're probably over complicating it at this stage. For the flipping business I'd set up a simple LLC since you won't have to worry about refinancing those properties. For the rentals I would purchase in your personal name (to get preferential lending terms) and then transfer title to an LLC at a later date.

LLCs are simple to create so you don't need to plan this too far out in advance, IMO. That said I would definitely consult with both a lawyer and a CPA before making a decision. 

Remote management is definitely doable, and as you hinted at it's very important to have trusted local vendors. The 12 hour time difference will be your biggest issue, have you considered a call center service? Probably would be cheaper to just hire a PM but may be an option worth looking into.

Here is a link to the Comptroller's guide to the non-resident withholding, which may have answers to your questions: https://www.marylandtaxes.gov/forms/current_forms/withholdin...

If link doesn't work the document is called "MARYLAND'S WITHHOLDING REQUIREMENTS for Sales or Transfers of Real Property and Associated Personal Property by Nonresidents" which you should be able to Google.

Good luck.

The OP is currently exploring conventional rehab loans (presumably 203k or similar) which would indicate that he is intending to owner occupy, and therefore hard money loans are likely off the table (as most HMLs are not NMLS licensed and don't make owner occupant loans).

That said, to the OP, if you're looking at a conventional rehab loan you're just going to have to accept higher costs, less flexibility, and more red tape. It goes with the territory. I can't answer your questions about whether those items would be problems for your lender, and they are good questions for him. One option may be to do a Streamline 203k and have your contractor do the bare minimum to get the home up to FHA standards, and then you can do the rest of the work yourself? Something else to discuss with your lender.

Good luck!

I'm local to Harford County and actively involved in this market. I can tell you that we have extremely low inventory and a limited appetite from our local government to construction significantly more. This is going to keep prices up regardless of the Federal Interest Rate moving a point or two. Those waiting for a recession will be waiting for a LONG time...it isn't happening this economic cycle, the stubbornly high inflation rates indicate that.

A few points above to reiterate: (1) real estate is LOCAL, while there may be some worrying trends nationally, the Harford County market is strong and will stay that way IMO, (2) timing the market is generally a fools errand if you have a long term outlook (if you're looking at short term investments then timing factors in more), (3) if you're looking for a place to live (not strictly an investment) then there are a lot of other important factors to consider.

Bottom line is that if you have the means, and if you intend to own the place for 5 or more years, I personally wouldn't hesitate to jump in. PM me with where in Harford you're looking to live and I can provide some more local advice. 

Good luck!