All Forum Posts by: Nancy Roth

In Maryland, not only is a license NOT required to operate a property management company, but tenant placement is NOT in the least synonymous with property management. 

Some owners who have property managers also seek the parallel services of independent tenant recruiters when they are looking to speed the tenanting process. Also, although some property managers do have a good grasp of the voucher program, most do not focus exclusively on it, as they need to recruit a mix of voucher and market tenants according to the needs of the owners they serve. 

My now ex-property manager steered me away from vouchered tenants, to my dismay, and toward lower-paying, less reliable market tenants because qualifying a property through the inspection requirements of Baltimore's Housing Choice Voucher Program (Baltimore's moniker for Section 8) is more demanding and time-consuming. From my manager's perspective, delays in placing tenants meant delays in getting paid. Guess who prevailed (once!) when my property manager's interest was in conflict with my wishes? The second time the relationship was over. 

Placement specialists have no such conflict of interest. They get paid when the tenant moves in, and then they move on to their next job. 

Brittney, you have a knack for identifying vouchered tenants, but recruiting tenants is only the first step in participating in the HCVP program. Are you equally adept at navigating property owners through the considerable and slow-moving city bureaucracy? Do you have relationships with people in Baltimore Housing whom you can call upon to help sort out one inexplicable delay (getting an inspector out, getting a check sent, whatever) or another? 

This navigational skill strikes me as rarer but more crucial than is often acknowledged. If you can make the entire process of placing vouchered tenants easier for owners, you have a marketable skill and you should capitalize on it. You do not need to be a property manager, though you might wind up working alongside a few.

Best,

Nancy Roth

@Shoshana Shulman I agree with @Ned Carey about the propensity of banks to list their properties. What I've observed is that many banks have rather inflexible guidelines as to how they price a property they list for sale, and how long they must leave the listing at that price before lowering. If an offer comes in at a certain percentage below their asking price, they are not allowed to accept it.

I can't tell you how many times I've watched a bank-owned property linger on the MLS, twisting in the wind at a completely unrealistic price, while the bank rejects lower offers--only to have the property eventually sell at that lower price point several months later, when the bank has fulfilled its internal obligations to seek the highest price.

So there may have been a point that banks were unprepared for the slew of foreclosed properties that came into their possession, and were more open to the offers of individual investors. Now they generally have rules in place that bias them against your offer. Anyone who advises you to try to get properties directly from banks is probably not in tune with today's market. Not in the DC-Baltimore-Virginia area, anyway.

If you are looking for properties that haven't hit the listed market, there are tons of wholesalers in the Baltimore area that you can contact. Alternately, you might look for REOs that have failed to sell on list, and wind up in auction. Go online and look at the sites of Hudson and Marshall, Billig, HUBZU, auction.com, Alex Cooper, and Ashland Auctions, to name a few. Check HomePath and Freddie Mac and HUD websites as well.

BTW, no one wants a war zone, but everyone's idea of what constitutes a war zone is a little different.  

Best of luck,

Nancy Roth

Rahdia, as far as I know there are no hard-and-fast rules about who pays what settlement fees. It's all subject to negotiation, as long as you stay within the regulations that apply to certain buyers, as John just said, such as first-timers (in MD) and veterans using VA loans.

Also, there is certainly no requirement that you do a double closing in MD. I don't know anyone who does that. It would just cost too much. 

I'm sorry to say, it sounds like the lawyer you spoke with didn't know enough about wholesaling to counsel you reliably. People you want to discuss this with are actually out there doing it, not sitting at their desk. So why don't you try getting out to some RE investor meetings (google it with "Maryland"--or go to Meetup.com) where you can cultivate some relationships. 

BTW, I don't want to burst your bubble either, but wholesaling is not the only way to get started in real estate. It's a bumpier path than some would have you think, and for some people it's just not the right way to go. There are soooo many great entry points into the trade, please don't confine yourself to wholesaling just because you heard it was the thing to do. 

Good luck to you.

Nancy Roth

Hi, Mike,

Sounds like you are making a great start. I'm sure Bigger Pockets will be of help to you, it's a terrific resource in just about every conceivable way. 

I am mainly a buy-and-hold investor and so far have done all my business in Baltimore, but I am looking to learn more about Philadelphia. Is your team active in that area?

Best,

Nancy Roth

I don't understand what you are looking to do, Scott. Someplace to live? A rental house? 

What is your goal? How are you going to achieve it? Once you know those things, then you check the numbers--comps, costs, possible resale value or rental cash flow value--to see if any particular property will get you where you are going. 

As for Remington itself, it used to be an industrial area with a lot of blue-collar neighbors. I have seen some beautiful blocks but as you probably know, Baltimore famously is block by block, of course, so good deals and crummy deals wherever you go, Remington included. 

Good luck to you. 

Nancy Roth

 C. -Thanks for posting this detailed information. Am I missing something, or does your budget reflect a decision to leave the kitchen more or less as is? The kitchen looks perfectly clean and functional, but the cabinets and countertop would look a little outdated in my mid-Atlantic market (Baltimore-Washington area). If you were planning to rent the house after rehab you might keep it that way, but for a resale in my market you would get higher dollar if you upgraded them. I'd be interested to understand your reasoning. 

Also, as a licensed realtor myself, I'm not surprised at the shenanigans you've run into while trying to ratify the contract. Most banks accept cross-outs in the contract if all parties have initialed them. If there get to be too many changes, or the changes are very major (unlike a $2K price adjustment) then you may need to submit a clean copy of the contract that incorporates all the changes. So, okay, you know you are dealing with a conniving seller and an incompetent (or worse) listing agent. I hate to see that but it's not uncommon. Stay alert and stick to your guns. 

@Chris K. -Where in Baltimore are you seeing houses like this that cost $350K? I grew up in Baltimore and do all of my real estate work there, and I'd be surprised to find such a high price tag on this house in the area. But I'm also the first to acknowledge that I still have much to learn, so would appreciate whatever you can tell me. 

I also invest in Baltimore rentals, and because of the potential for water liens on the property I keep the water bills in my own name, so I receive the bills before forwarding them to the tenant. That way I monitor their payments. If they don't pay the other utilities eventually the heat/electricity get turned off, which is motivation enough for most people to stay on top of their bills. 

I'd like to slip in another question about water bills if I may. I live in DC, a far more expensive place to live by most measures, but my water bills are a fraction of what they are in my Baltimore City properties. The two cities are only 40 miles apart. Does anyone know why water costs can vary so much even in the same general area (same amount of rainfall, water resources, and I think the same kinds of usage by residents). 

Ned meant there is NO pitching of products and services and no pressure tactics at the BWI Group. That by itself makes it exceptional, along with the absence of an attendance fee. Whoever may make money out of this group is doing it honestly, not exploitively.

What I like most about it is the sheer variety of people who attend from all corners of the real estate world. Along with rehabbers and wholesalers are property managers, title company people, land buyers and sellers, auctioneers, suppliers, contractors, haulers, tax lien experts (ahem, like Ned), funders and financiers, notes experts, and even a few realtors, etc. etc. Plus the attendees span the whole spectrum of experience, beginners to long-time pros. 

Of course everyone is looking to make a deal, but no one is obnoxiously pumping his or her business. It's not that kind of environment. But during the discussion you do get perspectives from many sides. 

They also have a listserv where members post their deals and inquiries. It's truly a great asset to the community. 

I personally have learned much that has sharpened my vision, and met many colleagues I can call on for advice. Not to mention, with whom I've subsequently done business. 

Highly, highly recommend. 

I would second Ned Carey's recommendation of John Mitnick. 

But let me ask you, are you planning to hold the note, or is the tenant seeking a loan from a financial institution? 

Not sure what you are asking. 

Just like anywhere else, there are good deals and bad deals in Baltimore. It depends on the numbers.