All Forum Posts by: Michael Krupp

Hi James, I have multiple rentals and always do white ceilings, rental or resale, that is my standard. I have seen other colors for ceilings in a custom painted house, though not that common.  In reality, yes, it may be a little cheaper, though the cost is likely nominal, and probably not worth your time to be quite honest going back and forth.  Time and focus is money.  If you like white, for a few more dollars, I would simply paint it white, and I agree, it will look better.  I am not sure that in the end it really matters at all, and you probably have bigger issues to deal with.  Sometimes we forget ROT and where our time is best spent. It is a fair question mind you, I just want you to think about it a little differently if that makes sense.

Hey Joseph,

Do you have any contacts in Baltimore? In my opinion, you need more than a lender to be successful investing in out of state real estate.  Do you have a good realtor that knows the area, works with investors and rentals which I assume is what you are buying turn key?  Did you consider the lead paint status and certification?  Do you have a contractor and will you manage the property yourself, if so, you will need a handyman, or will you use a property manager?  What kind of financing do you need?  Will the seller hold any paper? Every situation is different and with some, you may not need any as said above.  There are various types depending on the situation, from hard money, to conventional to out of state National lenders that work with investors.  I just try to look at the bigger picture to be a successful investor, and financing is only one piece to the puzzle. The answers to these questions will help to steer you in the right direction.  I hope this makes sense.

Hi! Congrats for getting in the game! So many people talk and ever do it! Give yourself some credit!  Learning how to fish, you feed yourself for a lifetime, when someone gives you a fish, it only feeds you for a day.  You are learning how to fish!     ( I modified this old wonderful old saying to your situation).  Did you have any help? Any other investors, coach, or mentor?  If not, then I would highly suggest you start networking and find some experienced investors to help guide you, or a coach and mentor.  While this might cost you, it will save you $$$ in the long run and expedite the learning curve, so the $$$ return will be greater and faster.  I always tell new investors, if you do 10 deals, there will likely be 4 good ones, 4 ok ones, and 2 not so good ones. You simply need to win more than you lose. This comes from experience and often getting help.  The only thing you have to remember, is that you don't get to choose which one comes first.  Sometimes investors make a killing on their first deal and think it is easy only to find out that it is not, and hit roadblocks and losses on their next deal or two.  If the first one does not go well, then it often kicks some investors out of the game.  Real estate investing is by no means, easy.  TV and social media often make it look like it is.  You cannot just read this stuff in books, you can learn things, though it is not the same as being in the trenches and doing it.  The lessons from doing it are invaluable and if you can get help to expedite the lessons, then you will be better off for it. 3 Things Grant Cardone says to invest in... RULE #1, Invest in yourself first!   RULE #2 Invest in your business, marketing, branding, people, collaborations.. RULE #3 Invest in Real Estate - Real Assets - Cash flow.  SEE RULE #1

Hey Guys, I am a lender and investor in Baltimore for 20 years, and I concur with pretty much all that @Stephanie P. said.  The 21216 and 21217 areas are pretty rough in most places, though there are some ok streets mixed in.  Location is everything and Baltimore is a block by block town. If out of town investors want to invest in Baltimore, they should 100% get someone experienced with boots on the ground. They need either an experienced realtor, lender or investor to help them vet their deals, preferably all 3.  Wholesalers are Ok to find properties, though I would not solely rely on them to advise you which areas are better than others.  You also need someone to make sure the wholesale deal you are looking at makes good sense.  There is no way to make a case to most lenders, even hard money lenders like me, for buying at $14k and even if you put $30k into it, getting $127k out of it albeit in these areas.  There are plenty of areas in Baltimore that are reasonably priced and good investments for flips or rentals, though it is competitive and some new investors have been overpaying for properties.  Typically you really want to get into an area that has a solid average value or sale price of $100k+ with multiple comps. This property of yours may make more sense as a rental, though you need to take lead paint into consideration.  You also should make sure that your contractor pulled the proper permits, and that you also have the property properly registered with city.

Please join GRID Baltimore on Wednesday August 28th, 2019 at the DoubleTree Hilton in Pikesville. We will be discussing the keys to building wealth over time with rental properties.

Great Job Anil!  

Hey Josh, I really like your post.  It says so much that is so true, not just about real estate, about life.  We often do things with our own personal goal or goals in mind that start out being self serving.  We aim for this magical destination called success, or financial freedom.  There may be a dollar goal in mind, whether it be monthly or annually.  Along the way, there are so many ups and downs, and diversions while traveling this road and we often begin to realize that other people are affected by everything we do, whether we talk to them directly or not.  We begin to question our motives, and intentions and even upon reaching some of our goals, our happiness. Yet again, what is happiness?  It is different for everyone and while there absolutely nothing wrong with the pursuit of financial goals, success or freedom, we often find that there is so much more than this.  

I have been in involved in Real Estate investing for almost 20 years, and have multiple rentals, rehab or build multiple houses annually, lend hard money, wholesale at times, coaching and mentoring along the way, and more.  Throughout this process, I have interacted with hundreds if not thousands of others and in one form or fashion, have truly impacted lives.   I have been fairly "successful" though I have still not reached my "goals" and continue the pursuit.  Things have changed for me over the last several years as the money is great, the freedom is simply that I work for myself, out of my home, when and how I want.  The most satisfying and fulfilling part, is when I am helping others to better understand this business and how to best achieve their goals.  I am spending much of my time in this arena now with everything that I do.  

After all these years and experience, I formally started a coaching and mentoring company for these exact reasons and the fact that there is much hype on real estate investor training and coaching in this country.  There is absolutely no reason that anyone should pay $25-50k to learn about real estate investing. I have met so many people that have spent their last dime that they cannot even begin to start their real estate business. While I cannot afford to do this for free, I can do it cost effectively for anyone, anywhere, that is interested or willing to learn.  I have spent most of my life in the personal development space, taking classes, and seminars, reading books, listening to audio, etc.  I am also sharing all that I have learned there with my clients and students. Investors need to understand about people, communication, finance, business, technology, and the list goes on.  There is more to all this than real estate investing, there is life. There is more than houses and properties, there are human beings.  This is truly what it is all about, not money or property, PEOPLE.  You realize success, freedom, and happiness, is not a destination, it is a JOURNEY.   You are the sum of the amount of people that you have helped along the way.  You realize that if you help others first, everything that you can dream of will come to fruition.  Congratulations for reaching this point along your journey!  We are soul brothers my friend.  There is still so many people to help and so much to learn...

@William Yanez

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Hey Guys, I don't know about you, as I am in the Baltimore area and we take lead paint seriously here. The laws have changed drastically over the past several years, and in Baltimore City especially, it is big deal. A major investor and landlord was sued and his LLC was penetrated so he became personally liable. You can look up, Member of LLC May Be Personally Liable For Lead-Paint Injuries (Md., March 22, 2010). The Court of Appeals of Maryland held that a member of a limited liability company could be personally liable for lead paint related injuries allegedly suffered by children. Here is another one from 2014, Jury awards $2.1 million in lead paint suit in Baltimore. So a company is no longer a shield.

As a landlord, I started doing lead safe (encapsulating lead) certifications rather than lead free (removal of lead) due to the costs and now wish I would have spent the extra money. I will only do lead free rentals from now on. Around here, mostly all properties before the 1950s have lead, and after the 1950s they either have some lead, or after 1955 there often is no lead.  Of course this is not absolute. There are lead notices that must be provided to tenants, and they must sign, though that does not remove the liability. If you do the test and have any knowledge of lead based paint, it must be provided to any buyer.

Also, you don't want to do the testing yourself, hire a qualified licensed lead inspector.  Your time and money is best spent as an investor, and hire the right people for the skilled work.  If the property was built in the 1930's there is a high likelihood of lead, and if you are doing a total rehab, you will likely be removing the lead though it may definitely make sense to do a lead inspection and remove all the lead as long as you are prepare to do so. On a full gut,should not cost be much extra cost.  Here is Baltimore, contractors are supposed to be licensed and lead certified to take precautions for demolition to control and remediate the lead dust. I am very cautious when it comes to this stuff and highly advise you to do the same, especially for rentals!

Hey Ethan, Congrats on the first one! That can definitely be the hardest one for sure!  How did you finance it?  I also have some other thoughts and questions as a landlord myself:

1) When was the property built?  How are you going to deal with lead, are you familiar with the options and what is your plan?  Lead safe or lead free?  I have many rentals myself, started out doing just lead safe via dust swipes and am now doing only lead free rentals where they use a laser gun to find the lead.  I have found that properties built before 1950 or so, typically have more lead, which leads to a bigger rehab and costs in order to remove it.  In these cases, it is easier and more cost effective to do lead safe as you only need to encapsulate the contaminated areas. This also though does leave you exposed with more risk,so you need to be very careful and diligent with maintenance, and not having any chipping paint. For me these days, I am only buying properties now that are built in the 1950's or later that typically have less lead contamination if any and are easier and more cost effective to make lead free.  NOTE: If the property is fully renovated, then you will have to get a lead inspection and make a decision from there which way to go, as I am sure you won't want to do any renovations in this case. Contact Neal Roseman at Lead Probe for lead inspections.

2) Are you planning to manage the property yourself? If so, then there was some great suggestions here where to get info on landlord tenant laws.  If you are are planning to do more rentals and use a property manager, then they would be a great resource of information regarding tenant placement, and the legalities of property management. You might look at www.ManageBaltimore.com and ask for Mark . If you only need tenant placement, call Tony Lewis, I have used him for years, you can email me for contact info.

3) For leases, I would try to find a reputable source to get an existing lease. No need to recreate the wheel or pay a lawyer.  A realtor in MD can get you a copy of their MD Residential lease agreement approved by the Greater Baltimore Board of Realtors/GBBR.  A good experienced property manager can also get you a copy of a proven lease.  You might also reach out to Sal at www.marylandrentcourt.com or www.myrentcourt.com as they do evictions and the like and so have a ton of experience with rentals and may share a copy of their lease with you.  You can also get on www.gosection8.com if you are doing a subsidized rental and market your property there as well as take flyers to the Baltimore Housing Office on 1225 W Pratt St.

The GBBR also has free classes at times about rental properties, lead, landlord-tenant laws, etc.

4) On Insurance, you typically need a builders risk - vacant dwelling policy during renovations and then convert to a rental policy once the renovations are complete and the property is rented. For builders risk, you can try HU Dove & Co or Paul Dowling at Bayview Insurance.  Once the property is rented, you can try your own insurance company as they may be able to do that for you.  I use Erie Insurance for all my rentals.

I hope some of this helps!  Best Wishes and Great Job!  Feel free to reach out to me if I can help you in any way.