All Forum Posts by: Nancy Roth

Rognel Heights is nothing like Sandtown/Winchester, it's actually a pretty nice neighborhood, although there are good and less-good blocks (typical in Baltimore). A 4/2 should probably get you more than 1100 in that neighborhood, I think. I get 1600+ for a 4/2/1 in a neighborhood not far from there, and so does a colleague of mine (our tenants are subsidized, but even market rent should be more than $1100).

I can't give you an evaluation based on the information you have provided. For instance, I don't know what the repairs are or how confident you are in the repair numbers (you sound like you have some doubts). Did a contractor go through and enumerate the costs or are you taking the seller's word for it? Does the $5-7K you mentioned include a little slack for surprises? All houses have surprises, you know.

Also $49K is not a horrible price for a house there, but it's not that great, either. I would like that price much better if the property were rent-ready. 

Long story short: the deal is not fabulous. Okay, maybe, but not that great.

So since you asked for help, I'm going to offer my stubborn, ornery little rule, borne of hard personal experience. If the seller is pressuring you to make a decision you are not prepared to make, walk the hell away! There will always be another house. Arm yourself with knowledge before you buy, so you go into it with some measure of confidence that you can succeed. 

Good luck,

Nancy Roth

@Jay Hinrichs

"unfortunatly these are the areas were rentals are prevalant and out of state investors have no clue..."

Sorry, what? Rentals are prevalent all over Baltimore, not just in those areas, not by a long shot. Baltimore has some of the best investment returns in the US. That is why out-of-town investors own there. I agree with you that folks who are not familiar with the landscape in Baltimore can get into a bad situation. I think that can happen anywhere, though.

@Rob Gribben

Hi, how are you. Actually the news was pretty good today. People from all over town came down to the affected areas with shovels and brooms and cleaned up the streets. I'm not aware that has ever happened before. 

Now, the deep-rooted problems aren't solved in that neighborhood where the trouble started. That has been a tough part of town for about as far back as I can remember--and I grew up in Baltimore. I don't buy in war zones, I'm too much of a coward, but I know people who do, and they get good cash flow and ROI. Who am I to judge?

Nancy Roth

@Lukasz Kownacki

Counties will be fine. Some parts of the city will suffer, yes. But Sandtown/MonDawMin were already pretty problem-ridden areas. The violence we've seen today is not suddenly appearing out of nowhere. 

Yes things changed today in Baltimore. 

I was at the Baltimore REIA meeting this evening in Canton when the governor declared a state of emergency, and the restaurant announced it would be closing at 9. Schools won't open tomorrow and I think there's a curfew all week.

It's painful. DC took 25 years to recover after the 1968 riots. Baltimore is already so fragile, I don't know how it can withstand such a blow. 

The city and state authorities are not helping by stretching out the investigation this long. After, what, 10 days, they can't establish a second-by-second account of what happened from when the young man was arrested and handcuffed, and when he arrived at the station in the back of a police vehicle, unable to breathe or talk? Uncertainty is the worst possible thing for the city, it's like a creeping poison gas. They really need to get some answers out there.

Well I don't know if Baltimore is going to be a great place for rehab/resell this next little while. Of course, my very first rehab will be ready for market in a couple of weeks. 

Nancy Roth

I was on the east side of Baltimore much of Friday and all afternoon yesterday, not just to the north of the Hopkins complex. Saw nothing. I'm going back tomorrow as usual and don't expect any problem. 

Nancy Roth

Hello friends,

I'm doing a 180-degree turnabout today and asking if anyone would please talk about their experience in the Belair Edison area of Baltimore City. I know a few buy and hold investors who do well in the area, but am trying to determine on behalf of a client, a first-time rehabber, if we have enough owner-occupants buying there to make a low-cost start-out rehab tenable. I do not want to steer anyone in the wrong direction, and in this case the numbers I'm seeing simply are not clear enough to help me judge. 

I have often said, here and elsewhere, that there are no good or bad neighborhoods but only good or bad deals, depending on your investment goals, and I stand by that. But there are nuances that the numbers don't capture this time. Would appreciate hearing about your particular experience if you have done successful rehabs in Belair/Edison--or unsuccessful rehabs, or decided against going in that direction in that area.

Many thanks,

Nancy Roth

@Nat Chan I ran into a similar situation in acquiring an estate property for rehab. The seller did not live there but had been keeping it, vacant, for years out of attachment to his late grandmother. He offered it for sale when he got sick and needed funds. But after we signed a purchase contract and were about to close he suddenly changed his mind. His health power of attorney told us he was on a new medication that made him irrational. We had a couple of tense weeks wondering whether we could seal the deal. Apparently the seller went to an attorney to try to get out of the deal. I don't know what exactly was said but suddenly the deal went back on track and we closed. I suspect the attorney told him he was in breach of contract and would be exposing himself to a lawsuit, and this is what woke him up to the consequences. This was in Maryland, BTW. So yeah, I think you've got a breach of contract and grounds for a lawsuit. The suit doesn't have to just be about recovering the monetary costs but the time and difficulty it has cost you etc. You get an attorney to write a tough letter promising that you will go after her if she doesn't deliver--something that could rock the boat a little, and maybe motivate her to call her own attorney. I am sorry you are having to deal with this uncertainty and hope it resolves soon. Best, Nancy Roth

@Julie Hassett

Comps in Baltimore have to be in the same neighborhood because values often differ sharply, block to block. You can't do what this agent has done, and skip across a park to grab comps. If you don't have exact comparisons within the neighborhood that sold in the last 3-6 months, take houses of similar square footage and characteristics, or perhaps go a bit farther back in time, b/c you don't get a lot of appreciation in most parts of Baltimore. Location of the subject property is paramount.

But honestly, Julie, your question about drawing comps is secondary to the real point. You asked for help ("Help! I've fallen in love..."), so I'm going offer the best help I can. 

Do not make any kind of financial commitment to this property, not even with an inspection contingency. This is not an appropriate strategy for a first-time buyer who lives across the country, who is unfamiliar with the local real estate market, who plans to live in the property--and worst of all, who has never clapped eyes on it! 

You need to shop for a place to live from afar, okay, it's not ideal for a first-time buyer, but a lot of people have to do this. Find a trustworthy ally on the ground, like @Tyrus Shivers, @Anil Samuel, or @Christina Ramirez. All are smart, ethical realtors who are also BP members. 

Above all, do not rely on the advice of an adversary who has no interest in how and where you land.

Stay safe,

Nancy Roth

I meant @Julie Hassett (sorry for misspelling)!

@Julie Hasset 

I smell a rat in the comps. All of his comparables are in Charles Village, in zip code 21218, across Wyman Park to the east of Hopkins University Homewood campus. Elm Street is in Hampden, in zip code 21210. Strange that he does not state the zip code on his analysis sheet--that is kinda basic information, especially for a buyer from out of state.

Because he is comparing two very different neighborhoods, what you have here is a misrepresentation of the value of the property of interest. 

Hampden historically was a working-class neighborhood of small, often labyrinthine attached wood and brick houses. In the last couple of decades people have expanded and updated many of the homes and sort of schlepped the neighborhood into the middle class. But it retains its eclectic, piecemeal, down-at-the-heels charm, which is part of the fun. I'm fond of it. But Charles Village it's not. 

Here is your 3631 Elm Ave: https://www.google.com/maps/place/3632+Elm+Ave,+Ba...

Charles Village is full of large sturdy 3-4 story brick townhouses, many of which have been converted to small multiunits that house Hopkins students. Along Charles Street overlooking the park and Baltimore Museum of Art the housing stock is lofty and patrician, not unlike uptown 5th Avenue across from Central Park in NYC.

https://www.google.com/maps/@39.326861,-76.617764,...

Here is 3202 Guilford Ave., one of the comparables in the analysis.

https://www.google.com/maps/place/3202+Guilford+Av... 

You see the difference? The two neighborhoods are not alike at all. It's not unusual at all to pay in the $300s for Charles Village multis, but in Hampden? For that price you get a high-quality rehab (i.e. no oil-fired boiler), central air, lead-free certification, new roof, modern kitchens and baths and nice gardens and views. Also do you know anything about the other tenants--and whether you want to live downstairs from them? Read through the comments of @Seth Sherman and commit them to memory. 

BTW, I don't think it's illegal for a listing agent to represent a buyer in Maryland, as long as all parties are informed and sign a dual agency agreement. But it's almost never a good idea, for all the reasons named above, particularly by @K. Marie Poe. And frankly, I believe it would not be in your best interest to work with the agent that produced this analysis.

Yay for you that you looked before leaping, and consulted with the BP community. I wish I had done that the first time I bought a rental.

Regards,

Nancy Roth