All Forum Posts by: Sam Lewis

Sounds like you are making lemonade with lemons. Kudos to you, every investor has a story of things not working out, but in the end it will. Buy and hold is an incredibly powerful strategy.

Wishing you the best,

Sam

Awesome job! Looks amazing

I have a friend who cash flows roughly 700 given my numbers in Patterson Park, with a 4/4.5 townhome. Granted he has higher level of vacancies since his home is in a higher crime area. 

I think cash flow is still attainable, especially when you eventually remove yourself from the househack, and ideally rent out that last room. 

A couple things - 3 beds will have one less room of course, and I am not sure - are you looking at properties that have a livable space in the basement that could be an unofficial bedroom not listed on the MLS? That extra livable space changes numbers drastically

Echoing @Joe Norman and @Russell Brazil on this one. Great input right there. Best of luck!

Hey Logan, as long as you pull necessary permits, you shouldn't run into any issues adding an additional range or kitchen amenity to a basement. 

To legally zone a property a duplex, you would need to receive approval from the Frederick County Zoning Office - this would be required to legally list the property as a duplex on the MLS.

Owner occupancy makes everything much greyer - in addition, Frederick County has no rental registration requirements like many other counties in Maryland.

I don't know how viable it is to call Potomac Edison and ask for two separate meters under the assumption you don't go the zoning route. A few suggestions, make sure you have a strategy for splitting utilities between both units - with one heating and cooling system, one party may be cold while the other is warm. Perhaps have a space heater or window AC unit available in the downstairs 'unit.' 

Hey Sam, welcome to BP! 

Househacking and Section 8 rentals are a great way to go. Househacking in Baltimore is how I got started (suburb of Towson) and now I do Section 8 as well. Joining a local REIA (such as Baltimore REIA) is a great way to meet other folks who are involved in real estate in your area. While there are online events now, BP is a great place to connect with likeminded people and also meet someone for a drink or coffee.

Househacking is definitely the way to go to get started... granted I was always told by mentors of mine that living in a property is ideal before going through with a non-owner occupied investment. Ideally you can purchase a property with as little as 3-5% down, and ask for 3% back from the seller. You live here, and rent room by room and cover the mortgage and more.

Think of your first real estate deal as the most crucial stepping stone. Step forward and land safely, you'll be more willing to jump to the next more advanced step, say a Section 8 rental.

So for the perfect househack, where can you see yourself living and having roommates? Federal Hill, Canton, and Fells Point are great areas. While Fed Hill is suitable for the fresh-out-of-college crowd, there are some other parts of Baltimore City such as Druid Hill Park which are becoming 'up and up'. Generally speaking, (especially in suburbs) I typically recommend a location that is within half a mile of a public university, private university, hospital or hospital system, and major company headquarters. This helps assure you will attract young 20 or 30 somethings who wouldn't mind a shared environment. Canton shouldn't be any issue with the large amount of young folks with new jobs, and folks in their mid to late 20s shifting from the younger Fed Hill crowd.

As for selecting a townhome in Canton or other areas of Baltimore City, properties tend to have been built in the ballpark of 1915-1925. In this case, make sure you select a home inspector with great attention to detail, and who can locate potential foundation and/or water issues. 

I have friends who househack in the city - the best ratio of bed/bath I've found is 4 bedrooms with 4+ baths and a basement that isn't considered a bedroom. Your total mortgage payment could be in the ballpark of $2000 - $2300 and you could command rents of about $700-900 per bedroom. 

If you have any questions, feel free to reach out.

Kyle, congrats on saving that much money and being in a solid financial spot. A ton of people would kill to be in your situation.

My response will of course be biased to my own experience. I started with about 15K in a savings account and had no idea what wholesaling was at the time. My agent explained to me that the best way to start would be to find a "turn key" property that required little work, maybe some paint worst case scenario. 

The issue with wholesaling is a couple things - a lot of wholesale deals have the property in poor condition, which means a) you will have to make repairs, b) a traditional FHA or conventional 3 or 5% loan wouldn't work given the condition of the property, and c) (building on b) a seller would most likely sell for less if you gave them an all-cash deal with a hard money lender, where in this case you would most likely require a 4-6 week closing period with your 3-5% down lender (assuming property is in good enough condition).

There are definitely a lot of moving parts, but it can be done in theory. I highly recommend working with an experienced agent who can find you a great property hot off of the MLS. You could also have your agent ask for seller help (up to 3%) where seller covers 3% of your closing costs. This is what my agent did which allowed me to purchase a 350K property with $14.5K out of pocket.

Wishing the best of luck to you,

Sam

Paul I would never call you crazy

A couple points, if you are first jumping into real estate, it's best to start with an area you are familiar with. Trust in contractors and a property manager is huge, and an idea on how to attract high quality tenants is huge.

If anything, make sure your network in that area know you are an involved landlord - you don't want to say you're on a boat somewhere in Mexico or your positive cash flow may quickly turn negative

Late to the party here, fellow Towsonite and highly recommend Towson for a place to live, but buy and hold numbers are nearly impossible to achieve positive cash flow.

As what has been said, retail home buyers snatch properties up quick. Parkville or Overlea would be focus area which is close to Towson

Best of luck to you