All Forum Posts by: Tim Jacob

That seems reasonable.  Personally I think a little less for management than add a percentage to manage contractors but I could see a larger company not using any subs at all so 10 is fair.  Maybe a little less on a renewal.  Pretty much where it needs to be.  Maybe a little higher than a small company for overhead but a decent pm won't charge much less even if they are smaller.

I would say most points have been highlighted.  I would also say get somewhat familiar with estimating rehab repairs.  On older homes there can be additional infrastructure charges though many have been retrofitted to some extent like most places have changed to copper or cpvc waterline but not from the old castviron drain.  Somethings you can keep but should be familiar as any place old or new will brake down.  Obviously this isn't Baltimore specific as most Eastern and Midwestern cities have the same issues.  

I would try to by as turnkey as possible in decent areas unless you want to be involved.  If you are far away I would say get a turnkey property in an A or B area and you can probably get the same agent that sells you the place to lease it.  Managing should not be too difficult then but this depends on how you value your time.  Somewhat really well off might delegate that as well.  

Just make sure your agents care a little as many just want to get paid and run away.  A good agent should tell you about properties that are going to be problems due to maintenance or tenant quality.  If they aren't doing that it might not be a good fit if you are starting out.

Most stuff I see in that asset class is close to 200k for a row home for a minimum if mostly turnkey.

It doesn't matter.  

You can rent upto 4 rooms with a regular livense you can get from the city.  You will just need a passed rental inspection as well as lead if the property is built before 1978.  That is 4 unrelated people for that in the city. 

Baltimore city has the most small multifamilies.  Baltimore county has a few as well.  Frederick might be another possibility but less inventory.  Montgomery and PG county usually don't have as much.  Additionally PG and Montgomery have rent control.  It is not restrictive unless you own more than 2 units and its for housing built before 2000, which there is a lot of.  The max increases are not bad but if inflation goes crazy like the 80s it would hammer landlords.  Also you don't want to start someone too low or inherit a long term tenant who is paying way under market.  Baltimore and Frederick do not have rent control measures. 

I'm a pm, realtor, and landlord.  Ive been in Baltimore awhile.  I have 1 currently on section 8 but have had others in section and other programs over the years.  It makes sense in some areas.  It has its issues though.  The bureaucracy can be aggravating to slow response times, poor communication, etc.  I can send you a pm about things.

The state of Maryland has a 2 month maximum amount.  I would charge 1 month and add on more for pets depending on type of pet a flooring.  If you are worried about them being able to pay I just wouldn't take them.  I understand if you are in a lower asset class that might not be a possibility for you.  

Failure to pay these days is far faster than holding over.  As of last fall things got back to normal.  You need to prefile on them before filing for failure to pay.  So you can file that July 6th but would give them till the 10th.  Then file for non payment 11 days later.  Court should be a few weeks later.  You need a rental license and lead registration with mde or a lead free cert unless the place was built after 1977.  Hopefully your realtor made sure of this prior to the sale.  If they didn't you need a rental inspection.  Also probably a lead inspection.  The rental license office is where permitting across the street from district Court where the rent court cases are filed. I usually look at the filing to trial times when I'm at permitting or city payments periodically for something since its right there.  Its possible to submit your info online for the license but sometimes there is conflicting information online from what they say at the office if you can't get it to work.  I would visit them if you have questions.   They overhauled their system last year and the new one is more confusing so make sure you get an actual license if filling it online.  Usually with a fresh inspection its not an issue online.

Holdover is 2 months more.  Also rent increases require notice in Baltimore City.  

Might have had a dud tenant from the old landlord.  Was there any mention of this prior to closing.  If this was on market your realtor should have looked into all of this for you.  Especially a non paying tenant.

For someone in DC I would recommend Baltimore.  Its much more affordable than DC and if there is an issue its driving distance.  Building a team remotely can be hard and your are totally at their mercy if things go bad.  400k can get you a small multi in good parts of Baltimore.  Usually there is 1 or 2 in the city or county that might be a good deal. Over a month or 2 decent deals will come up.  If you need someone with good pm, investing, and reno experience let me know.

You probably avoided a problem tenant.  Usually the credit scores go a long way.  But a few pointers.  Use case search as it can uncover things the other searches can't.  Also don't trust electronic payments upfront when the lease is signed.  Cash or money order and make sure they know how to fill out a money order and if not instruct them on how to correctly do that.  Substance abuse can turn into a real problem.   Probably a good idea to refuse them.