All Forum Posts by: Garrett Fulton

It seems quite possible if not a certainty that federal budget cuts in the near term could drastically reduce social welfare programs.  Any opinions out there of what this might do to low income subsidized housing?  

Hey @Will Wagner

If you are talking about buying a rental in Baltimore city, the HUD FMRs are used as a guideline. When the home is inspected, the inspector will grade the property based on location and condition. When the case worker reviews the inspection report they will come up with a number (sometimes without too much rhyme or reason). You can dispute if you feel that the amount is too low, however this delays the lease signing as a supervisor must review.

For reference I have two fully renovated 3 bedroom properties in C- areas in the city with rents of $1351 and $1301. Both of these properties were gut rehabs ( new plumbing, electric, sheetrock , central Ac and finished basments).  I know another investor who does a minimum rehab on his rentals and his rents are a bit lower for similar 3 bedrooms (mid $1200s).

I would think that to get that top rent number, you would need to be in a premier neighborhood  in the city.

@Kelton Johnson

Try Embrace Home Loans,

2 years ago, I financed a 55k rental property in Baltimore City using them. They are a national lender.  

 30 year conventional mortgage at 4.75%.

20% down

 Send me a PM and I can give you the name of the loan officer I used. (Great guy and can close any loan) 

Hey @Tariq B.,

I'm 25; so just missed your cutoff of "under 25". Hahaha

I've been slowly but steadily buying rental properties in the city for about 2 years now.  Looking to purchase my sixth property in the next few months!  

I have two 5 bedroom properties and 1 four bedroom property in Baltimore city.  Both the 5 bedrooms are rented out to younger women with 8 children. The four bedroom visits of a mother and 6 children.  All properties are section 8.  

The homes have been rented out for 2 years or less and the damage that has been done and general dirtiness is hard to believe.  Laminate flooring is shot and torn up in some places. The new drywall had paint that is no longer a uniform color or texture, but rather consists of a mixture of crayon drawings, dried food stuffs and trails of sticky juice splattered on the walls.  Carpet will go into the trash as soon as the tenants move out.  I'm sure this isn't the case every time but so far I am 0/3 with high occupant properties.  

On the other hand, my 2 and 3 bedroom properties (3-4 occupants each) look immaculate in comparison.  My future acquisitions will consists of the same two and three bedrooms units as in the long term, I find my profits to be greater even with the smaller rent amount.  

Hey Eric

I just went through this process on a single family rental property.  I recommend finding a good title company to help you through the process. They should be able to walk you through everything. Here are the basic steps.

1) agree on a price with the seller

2) Have title attorney create a purchase and sales contract with the purchase amount and closing date.  (Include in the contract inspection contingency and seller disclosure addendum to protect yourself.)

3). Both you and the seller look over the contract and sign.  (Typically things like transfer taxes are split 50/50 between buyer and seller; however the contract should dictate this.)

4) Send earnest money to title company to be put in escrow account.  Earnest money amount should be stipulated in the purchase and sales agreement.

5)Title company will take care of the title search and ensure the property is ready to transfer ownership by the closing date.  Make sure that title insurance is included when purchasing to protect yourself.

Note: if getting financing, speak with a lender beforehand to make sure that financing is available.  When using a lender, they will help you schedule appraisal and get all needed documents for getting financed 

I found this website that is New Hampshire specific, that might help you.

https://www.amitree.com/articles/148/new-hampshire-homebuying-and-closing-process

Hello BP,

I've been reading that HUD is looking to roll out a new way to calculate fair market rates for section 8 housing in large metropolitan areas. The new policy called "small area fair market rate would set new fair market rates by zip codes within a city. Some zip codes would be lower than the average and others would be higher.

Here's the link to the HUD site.

http://www.regulations.gov/#!documentDetail;D=HUD-...

I looked up what the new fair market rates would be in Baltimore for my properties zip codes and it looks as though I would take a 10%-15% cut in my rents if this policy is rolled out in Baltimore.

Do any of you guys know when this new policy would take effect?

Will it be mandatory for all PHAs to adopt this policy?

What's the likelihood of this policy even being passed? 

Thanks for you input!

Thank you all for your sound advice everyone.  I just sent payment to the attorney and will avoid a ground rent eject meant suite.  Even better news, my title company did set up an escrow for ground rent with the lender.... The lender just forgot to disburse the funds.  So after talking to several supervisors over at the lending institution, they are cutting me a check for the full amount ! :) 

Hello BP,

After beginning my buy and hold investing strategy a little over a year ago, I am just starting to realize some of the problems and pitfalls that I was too careless or inexperienced to even think of.    I submit to you all just one of the roadblocks I have encountered throughout my short investing career in the hopes that I can get some advice on how this should be handled.

Today I received a collection letter from an attorney representing a ground rent owner in baltimore city.  I had been aware of ground rent in baltimore city but naively assumed that upon closing on the property Oct 2014, the title company would relay the information to the lender and my mortgage payment would include ground rent to be escrowed( just like taxes and insurance every month).  What a big mistake I made.

The collection letter includes an itemized list of the claims to be paid.  These claims are as follows.

"1) ground rent installments due through June 2015:                                          $96"

"2). Fees and expenses per former ejectment

 provisions (Real property article, Annotated Code of Maryland-

including but not limited to title charges, judgment 

reports, certified mail, and attorneys fees.                                                         $500"

"Total amount owed:                                                                                            $596"

The letter goes on to say that if I fail to pay these debts "within 10 days from the date of this letter [June 15 2015].....my client has instructed me to institute a ground rent ejectment suit".  My take away from this letter is that I need to pay these guys right now....... or ELSE!     

 I have no problems paying the ground rent of $96, but my gut feeling is that $500 dollars in fees is a little over the top. Is this real life?  Anyways, I would greatly appreciate any advice or similar experiences others have had with ground rents.  Should I just pay the debt and chalk this whole thing up to a lesson learned? I've emailed my title attorney the letter and asked if my title insurance might cover this; no response yet [ seems odd that the letter would be sent so that it arrives on a Friday after business hours]  and I'm not holding my breathe that I will be covered. I don't know if there is any recourse in my situation, but I will make darn sure that I never miss a ground rent payment on this property or any of my others.  

Thank you for reading and thanks for any advice.  Sorry if this ended up just being a vent session but I am still pretty overwhelmed at how fast this situation seemed to escalate.

Thank you all for the words of advice and encouragement. You have all given me many good anwsers and also some thoughts and questions that i must consider as i move forward! I have come to the conclusion, as @Ned Carey said so thoughtfully, that I will be activley waiting "for a KILLER deal". If that deal comes tomorrow, next month, or after the new year i want to be ready!

@Brant Richardson , great to hear that we have the same goals. Flipping a house would be a great plan to build more cash for future buy n holds. I am that turnkey buyer that you describe. Due to my one month on, one month off work schedule, i am lucky to close on a property before I need to go back to work. This is why my strategy has been to buy homes that need no work.

@Marcia Maynard brought up a great point about insurance that I have been on the fence about.

I currently do not own umbrella insurance. Am i crazy? My thinking was that at this point in my life I have no real assets other than a vehicle, and 20% equity into each properties.

@Elizabeth C. , I am currently not a home owner. I sheepishly admit that I live with my original roommates (parents) due to the fact that I am gone half the year. This will undoubtedly change as my SO is pushing for us to rent an apartment. I will get to see what its like being a tenant and a landlord :) As far as the VA loan is concerned, id need to serve six years before i am eligible as I am only in the reserves. My main job is in the private shipping industry.