All Forum Posts by: Lauren Frost

 Wish they had something like this in Baltimore - my life would be 100% easier.

Hey @Kelly Bettendorf! 

I just got started with investing February 2014. The biggest source of quality information and education I found was at the Baltimore REIA (Real Estate Investments Association). Check out their website: http://www.baltimorereia.com/

Also, the property management company I work for has managed properties down in the Columbia/Ellicott City area since 1991.

Best of luck!

Hey Andrew! Good to see you in here :) This is a great place to get information from investors all over the country!

I took a class on calculating offers based on rental expenses. There a few ways of doing it and it all depends on what your end goal is. The person teaching the class that I took wasn't worried much about appreciation or the selling value of the property since his main focus was monthly cash flow over a long period of time. If this is the case with you, you have to decide what you want your monthly profit to be. The person teaching my class looked for at least $200/month in profit after all expenses - doesn't seem like much but as a buy-and-hold investor, you aren't getting rich off of one property. You will build a portfolio and after 10 properties making a profit of $200/month, you'll be bringing is $2,000 of passive income every month. It builds on itself.

So lets take your current rental in Belcamp and pretend that you don't own it yet. When you bought it, you purchased it as a residence as a retail buyer, so the numbers are going to be different when you look at it as an investment from the beginning. 

So you would take:

$1,400/month (rent)

- $98 (management fee)

- *$81.67 (leasing fee, 70% of first month's rent broken out over 12 months)

- $157.58 (taxes, based on your 2014 tax record)

- $50 (insurance estimate)

- $66 (HOA fee)

- **$140 (repairs @ 10%)

- $98 (vacancy @ 7%)

- $200 (desired profit)

= 508.75 left over to pay your loan payment

* The leasing fee will most likely not be a yearly expense, but its good to calculate for the worst-case scenario so that you're prepared. If you don't incur the cost that you allotted for, more profit in your pocket!

** In our area and for a house as "young" as yours, a 10% per month repair fund is adequate. If you bought a much older house that requires more maintenance, then you would have to adjust your monthly repair estimate accordingly.

As an investor, your loans will be different than what you have been used to as a homeowner. You may get bank loans for a few, but banks will only lend on a small amount of properties so you'll most likely end up doing owner financing, private funding, or hard-money loans. In that case, your taxes and insurance will not be included with the mortgage payment, which is why I broke it out above. 

So now you know what your mortgage payment has to be in order to make a monthly profit on the property. The next step is to use an amortization schedule to determine what your total loan amount can be to ensure that you make your $200 profit. I use a financial calculator to figure this out, but you can go old-school and get an actual amortization book to determine this figure. Its really easy to use!

Assuming you're doing a 30 year loan at 4.125% interest (to make it easy), you could finance up to $104,972.72 for this particular property. This would include the purchase AND any necessary repairs/renovations.

Your numbers will vary based on interest rate, loan term, down payment, etc., but hopefully this at least gets you thinking :) Here is a link to the class that I took through the Baltimore REIA in case you want to do it yourself:

http://www.baltimorereia.com/start-me-up-2015/

Good school district
Proximity to major commuting routes and daily conveniences
Signs of steady growth in the area (developments, road construction, parks, etc.)
Average days on market for other advertised rentals (the faster they go, the higher the demand!)

Hi! I live and work here in MD and the law says that landlords can not take deposits that amount to more than 2 months of rent. Further, many judges here in MD consider moneys that are received prior to the month that they are "earned" as a deposit. Therefore, there is a very fine line when accepting rents upfront.

While it sounds like a great deal, there could be some issues down the road if you took the lump sum. The tenant could have an issue 6 months down the road and get disgruntled if he feels it wasn't taken care of properly, and then that could snowball into him feeling like he got taken advantage of by paying his rent upfront which then could start a legal battle that you probably don't want to deal with. If you get a judge that considers your advanced rent payment as a deposit, then you could end up owing the tenant 3x the deposit overage plus attorney's fees. No fun! I always look at worst-case scenario and decide whether the possible negative outcomes outweigh the benefits, so that is what you will have to decide here :)

2011 Volvo XC60 AWD - got it lightly used and paid it off in 9 months. With no mortgage, no student loans, and literally not a penny of debt to my name, I thought that having a car payment for a few months wouldn't be such a bad thing if it meant getting a car I enjoyed driving.  Its amazing in the snow, has great room for hauling junk when I need to, and its pretty :)

I can't speak about mobile homes, but I invest in condos and have found that they are great as long as you are smart with your calculations. You have to figure in condo fees and have to make sure that the condo community is FHA-approved if you plan to flip. They are fantastic because they are generally in a condition that all you are really doing is cosmetic updates, the projects are quick, and they generally sell fast in good areas.

Very tough situation - I had a great tenant who very unfortunately got into a bad car accident and was in the hospital for months (and couldn't pay the rent). He was a great guy, but I had to go through the eviction proceedings to legally take back possession of the property in his absence for the sake of making sure the house didn't get damaged or vandalized. He understood that I had to do it and I gave him plenty of notice so that his family could get his belongings before eviction day. Obviously with your tenant being in a coma, you don't have the same luxury I did but hopefully you can still contact the family to collect her belongings. Most leases say that the lease become void in the case of a death of the tenant, so if that is the case then you probably wouldn't have to evict.

You definitely want to get the utilities switched to your name immediately to make sure the heat stays on and try to go to the property to make sure its secure. 

You have to refer to your HOA bylaws and rules/regs documents. There is a certain standard that you agreed to when you bought the house, regardless of what the previous owner had done prior to your ownership. Some HOA's can be a big pain in the neck, but they are only trying to preserve the resale values in the neighborhood. If a neighbor used your house as an excuse to use mismatched colors, then the HOA's logic would dictate that other neighbors will too - they just want to prevent a trend in the neighborhood so that everyone doesn't start putting mismatched doors on their homes.

An alternative option if you don't have the time/resources to get it painted would be to just remove the screen door completely until you do have time (assuming the HOA doesn't require you to have a screen door on the house).

It really depends on the type of property that you have. I currently manage homes in middle to high income areas where credit checks are not only warranted, but expected. If I see any judgement from any landlord, its an automatic "no". Even if the person doesn't have a judgement but they have been filed against in court for non-payment of rent within the last 3 years, I usually say "no" to that as well (with VERY limited cases of exemption). I really like the idea that @Michele Fischer has about using a point system and I completely agree that medical bills and regular consumer debt (car payment, credit cards that are not delinquent, etc.) isn't necessarily a reason to deny them automatically, but you want to make sure that they are making their payments on time and aren't up to their eyeballs in debt. 

I got started in the property management business with low-income housing, which used a completely different system all together. I would have never been able to find tenants if I checked credit scores or went off the basis of judgements, so in those cases it may be more risk involved. However, if the person had landlord judgements or chronically didn't pay their rent on time resulting in multiple court filings, the rule still remained the same.