All Forum Posts by: Tim Jacob

The class will really dictate how to manage the property.  You can manage D grade rentals in rough areas but in general the most success is from those that manage their own rentals in those areas of town.  If you get to a pound t where it's a C grade rental or better you can start to get decent management.  You have to look at things from the management perspective to understand this.  If the property is in a rough part and only rents for 1000 and is harder to manage than a rental that's double that and it's percentage based they gave to be compensated fir the extra work.  No eviction protection so since you gave to settle on someone with and low 600s credit score if you have to go to court they get to charge for their time on that.  Also get to charge for turnover work.  In higher grades you can get those protections.  In general decent pms just don't manage in bad areas.  I would call pms and ask them areas they would manage or go on someone websites where you can get an idea from their.  I would say air on the side of caution.  

What's not going to happen is your going to get good long term pm done for you in rough areas with no other incentives like they are making money more on project management of the renovations.  Also more likely you have better rentals which are less hassle.  No one is going to subsidize your cash flow on their behalf taking on all that responsibility for what they could have made as a teenager working at McDonald's.  As long as you treat things with a level of fairness it will work out.  Section 8 is getting harder and harder in the city btw.

You can thread the needle by purchasing the right property but you need someone who really knows the local market.  If you need help let me know.  Im a realtor and a pm up here.

I really appreciate the post about the lead lawsuit.  I'm sure there are plenty of people here that invest in the east and midwest that have had 1.  Imagine if there had been no risk reduction cert and no acknowledgement of these things on the lease.  I will say this though.  Think about your asset quality and the most likely demographic that will be there.  Do they have young children.  Furthermore as many people unfortunately default to I wouldn't label Baltimore bad entirely.  Being a large city there are good and bad parts.  Also if you have someone testing positive for lead somewhere else I wouldn't expect your jurisdiction to save you.  The law will come down on you hard for that in other places as well.

I would think about how much money it is to go lead free if you are buying a new property though.

Going lead free in old homes that are pretty 1950 usually means eliminating old radiators, getting the lead off them, or replacing them as well as eliminating all old trim aa well as cornices and even fire escapes.  Some of this isn't economically feasible like the fire escape.  However you can still go lead limited which means it's lead free on the inside.  This means a visual inspection of the exterior every 2 years.  This eliminates some liability and is easier for turnovers as keeping lead on the inside means dustswipes for every turnover regardless of tenancy length.  Usually the radiators are deal-breakers for me but I would be honest with yourself and ask your self who your tenant is.  If you suspect a lot of families will be leased to than it might be worth getting the inside done.  If it's a college area it won't matter as much.  A lot of lead inspectors can you give you a cheap test to tell you where it is to confirm things.

Dundalk I would prefer compared to Essex as it's closer to the city.  I'd say for mid term I'd be near hospitals.  The main hospital and Bayview are commutable from Dundalk.  Good Samaritan and Franklin are both close as well.  Parkville in the right area is nice.  In general you are looking at C grade in some parts of Parkville as well  as Dundalk, Essex, and Middle River.  Price will reflect this.  Northeast near Morgan they are upgrading but is in the city.  Ofcourse that means more taxes and water bills.  Towson things will be nicer but the purchase price will increase.  I'd make sure it would do well with long term in case you get sick of mid term and want to convert it to long term.    

I assume you would never consider moving into 1 like occupying an apt in a duplex if that is included.  If you do you can use the 250k tax deduction or double it  for if your married but you need to live there 2 years.  You will need to collect mail there and have your license note that address as well as living there to check that box.

I invest and manage properties up here in Baltimore.  I can tell you this entirely depends on the area.  The area will determine the quality of tenant you can obtain.  If you will only be able to get a certain quality it won't matter in the long run how things work.  If you can't get someone with a 700 plus credit score within a few weeks of quality leasing the property at the right price I would not keep the property.  Things are getting harder and harder in a lesser asset class and as things trend into the future influenced politically that's going to get worse.  In that asset class you are depending on things to save you that are trending against it.

That said if the 30k completes a partial done rehab it might make sense but if it's a purely cosmetic one I would sell it now close to as is.

Go with a background check where you can see what is actually in it not just them giving you a letter grade or pass go.  Also in some states there are free online databases.  

The post about asset quality should not be overlooked.  I do think in A & B you can push those numbers on the high side.  MYve if you factor in holding times during renovations that could be diluted with a longer period of ownership but assuming once its ready to go I like to average 2% or less.  Another thing is the higher the asset the more likely you can push rent prices up.  If your rent increases just mimic inflation close to half or more if you self manage will bump your yield up and cash flow.  Thus think long term and invest in good areas.  Up here in Baltimore high 100s might get you a decent 2/1 rowhome turnkey.  I would t go much lower unless you can estimate rehabbing accurately or bear in mind the asset class to vacancy and other variable cost issues rising.

The biggest thing you can be fought on is parking.  You should make sure your place has the parking available.  Secondly the square footage.  Underpinning or an addition would make most conversions not feasible economically.  I always worry about forecode as well.  As of now you don't need to retrofit places with sprinklers but Maryland is ridiculous on that.

Hi.  I'm an agent, investor, and pm here in Baltimore.  You can do well in the city or county with the right strategy.  Being a Maryland landlord should help you even if the properties are out side of the Baltimore area.  Where in the area are you looking to buy?