All Forum Posts by: Yannik Cudjoe-Virgil

@Kennesha VanBurch Whatever information you find out, ensure that you get it in writing in Baltimore City. Don't take someone's word for it. In Baltimore City, inspectors and people that work at the permit office will tell you one thing, and then it's really another...

@Dan Nad can you share the article or information on where that data came from so we can interpret? From my research here, Baltimore is quite well during this time in certain areas 

@William Wheeler There are quite a few programs at livebaltimore.com that give you grant money towards your next home purchase in Baltimore. You should check it out. 

@Gayle Melnick Great tips! I had that exact issue with the basement in one of my rentals. How did you power wash the basement without getting everywhere wet? Do you mind sharing the exact type of paint and why that specific paint is the way to go?

Hey @Felipe Stefanoni. Yes I do. The market it hot across the country. On the residential side people are able to pay more because of how low rates are. There seems to be a bidding war for every deal on the market. Maybe try looking for an off-market deal to avoid a bidding war. That's what we are doing for larger multifamily. On the larger scale, it's the same thing. We've recently submitted an offer on a 78 unit and got outbid by $1.2m. It's difficult to see how operators are paying for these assets at high prices. Long story short, it's more likely that you have to find a deal off-market these days. 

4 Tips To Rental Property Investing In Baltimore City

Navigating your first investment in Baltimore can be quite tricky. Baltimore is considered one of the top rental markets in the country, and although its real estate can come with a lower entry barrier compared to surrounding cities, it still requires much local knowledge and expertise for success. For new investors looking for yield in this market, I hope these four tips provides much insight on how to strategize your next investment in the Baltimore:

1) Know Your Area

Baltimore is a very block-by-block city. One block can be very vibrant with occupied properties and homeownership, and the block around the corner can be completely distressed. It’s extremely important that you know the area you’re investing in. This can be the difference between profit and loss, and an investment that cannot sell because it’s not in a good area. Also, not all areas command the same improvement. You may not see the benefits in value or rents in certain areas, with respect to your rehab budget on the property. Try not to over improve. Stay away from warzones. Many investors who are new to the city get excited when they see $5,000 to $10,000 properties - compared to the surrounding expensive markets like Washington, DC. These properties are likely in high crime and blighted areas, and are not the best markets to find your next rental opportunity. My motto is that if I am not comfortable picking up a rent check at midnight, then I won’t invest in the area. In my experience, the biggest returns are in areas that are considered to be on the “path to progress.”

2) Know Your Property

Baltimore is notorious for having properties in complete disrepair. Many times, properties in these areas have values that do not exceed their replacement cost - making them tough to pencil for investors. Always do full due diligence on your potential acquisitions. I always check things like rental licenses, lead certs, or past permits, which can be found here. I never want to buy a property unless I know every detail and history (that’s available) on the property. In my experience, I’ve found a lot of property owners performing shady work in the city without proper permits, and when you purchase it, you’re essentially taking on potential liability. I’ve had sellers lie on paper just to get the house sold (and I have caught them in their lie too). Baltimore is also notorious for having lead issues. I always recommend getting a lead consultation to help you remediate and avoid any issues of being taken to court. Sometimes full remediation may not be economically feasible, but It gives you peace of mind.

3) Know Your Property Demographic

While knowing both your area and property are equally important, understanding your property demographic has a direct impact on the potential success of your investment. In my experience and speaking with other owners, areas that have an AMI of under $35,000, is where you start to see high delinquency issues. Be mindful of this when you start looking in “cheap” areas. Generally speaking, low income tenants don’t have the funds that you think you’re going to collect if you’re experiencing non-payment. And sending them to collections probably wouldn’t do much because they may not have the reserves available to become current. Don’t shy away from section-8 tenants. They are great opportunities to get surety of payment in full - especially during this COVID-19 pandemic; however, like any tenant, screen hard!

4) Know The Laws

Baltimore is not the most landlord friendly city and mainly because of the historical predatory and slumlord treatment of tenants in the city. It’s always good to know the eviction laws and process, so that in the event of non-payment, you’re prepared. Our leases are 29 pages long and thorough, to specifically avoid any ambiguity of what is allowed, what is not, and how it will be handled. If you’re doing a rehab, get in the habit of pulling permits. My rule of thumb is that if one subcontractor pulls a permit, everyone else does too, because inspectors will give you a violation if they catch something. Some of the city inspectors can be harsh if they find work being performed without permits. Inspectors aren’t stupid - so don’t risk it.

I hope these were helpful tips for your next Baltimore investment property!

Great! Thanks a lot 

Totally agree - especially downtown. Baltimore is a very block-by-block city, and when you get into downtown, it's tough. You really have to buy on the right block. Pigtown is a good area. If you can snap up a deal I think you will do well. If you're looking for the right deal, I would suggest going direct to seller for an off-market opportunity. If it comes on the market, you'll likely be facing some competition. I hope you get it!

This is based on Multifamily data; however, a duplex and triplex in Baltimore can provide good cash flow opportunities as well! I own a couple and they cash flow about $700 per month for each. That's not bad....You can find some of these in the better performing markets as well and do fine. 

Thanks! It's like that sometimes. Tenants lie and things fall through. But if you have a good product on the market, the leads will come.