Jumped too quick?

Question

Hi, my name is Jayme and have two properties. My first property I purchased  in DC in 2017. I have essentially been house hacking - renting out my basement and living with a roommate until Dec 2024. I have been considering another real estate investment property for several years and finally pulled the trigger and purchased a new home in Baltimore MD with the eventual intent to make into a MTR. I moved to Baltimore and am renting out my DC property netting maybe $300 per month. I could probably be making more but my basement tenants are great and essentially property managing for me while I am living in Baltimore. I rarely have to make a trip to DC for the house. My property in Baltimore, however, is significantly more expensive with a very high interest rate (335k, 6.8%). I bought bc it was a good deal in a great area - close to downtown, walkable with several restaurants and parks within blocks, Johns Hopkins is 3 blocks away for traveling medical professionals as well as students, plus there are several universities within 20 minutes of the home. I bought it as a primary - 3 bedroom two bath. I am living there with my roommate and renting out the top floor. I am coming out of pocket $1000-$1100 per month for this property. I am a little stressed over this. When I move back to DC, I plan to rent room by room, and if I can get the prices I am hoping for, I will break even.  I hear on the podcast that most people have a hard time making the jump but I might have jumped too soon?  have a feeling this was a mistake. I need to figure out how to think through this. Any help, advice, feedback would be grateful appreciated.

Cole Bossert · Answer

It doesn’t sound like you jumped in too soon—it sounds like you made a calculated move that puts you in a strong position long-term. Right now, you’re essentially paying around $700 per month in housing costs while owning two properties in solid markets. That’s not a bad deal when you consider the long-term benefits of appreciation, principal paydown, and future rental income.

From another perspective, if you were renting, you’d likely be paying just as much—if not more—without building any equity. Instead, you’re setting yourself up for strong financial positioning down the road.

Looking ahead, you have multiple ways to improve your situation:

1.	Room-by-Room Rental Strategy in Baltimore – Once you move back to DC, renting by the room could turn this into a break-even or even cash-flowing asset. Many investors use this model to maximize returns, especially in areas with strong demand from students and professionals.

2.	Interest Rate Drop Potential – With rates projected to trend downward later this year, you may have an opportunity to refinance into a more favorable loan, significantly improving cash flow.

3.	Long-Term Equity Growth – Both DC and Baltimore have strong real estate fundamentals, and while cash flow is a challenge in the short term, appreciation in these markets could put you in a great position in a few years.

It’s natural to feel some stress when carrying two properties, but instead of seeing this as a mistake, think of it as an investment in your future financial independence. You’re stacking assets, getting experience, and setting yourself up for flexibility. The key now is optimizing what you have—adjusting rental strategies, keeping an eye on refinance opportunities, and staying patient as the market shifts in your favor.

Bonnie Low · Answer

I don't see what you're describing as a mistake or having jumped too soon. I'd look at it like you're house hacking in a notoriously expensive market and your monthly rent is essentially the $1000 -$1100/month that you're coming out of pocket. I'd venture a guess you'd paying far more to rent a room or a house in the same neighborhood so not only are you getting super cheap "rent", you also have roommates who are paying down a significant portion of your mortgage. That's a win-win. There's a lot of idealism out there still and I think it clouds the realities of what investors are dealing with today. Sometimes real estate gurus and podcast guests talk about how much they're cash flowing on properties they bought 5-10 years ago when everything about the market was dramatically different but because they don't necessarily disclose that, it leaves the impression that you should be getting the same kinds of deals and cash flow today and usually not possible. So don't beat yourself up. It was a smart move. At some point you can probably purchase your next primary residence and do it all over again by fully renting out the DC and Baltimore properties as well as house hacking the next one if that's right for you. You're doing great!

Wale Lawal · Answer

@Jayme Caldwell

It sounds like you made a strategic move by purchasing in a prime Baltimore location, but the high mortgage and current cash flow are understandably stressful. Instead of seeing this as a mistake, think of it as a short-term challenge with long-term potential—once you transition to renting by the room, your cash flow should improve. In the meantime, you could explore refinancing options when rates drop, optimize your rental rates, or consider mid-term rental strategies for traveling professionals to maximize income.

Good luck!

Russell Brazil · Answer

Butchers Hill is ok. Id rather be further south in say Fells Point or Canton. Youre about as far north as Id go over that way.

Jules Aton · Answer

It sounds like you have the fundamentals down and have focused on purchasing properties in decent areas which is my preference even though it often costs more.  What you are paying for your personal housing is cheap and keep in mind each purchase is a new learning experience. I agree with @Russell Brazil re: Fells Point, Canton. Although I waited for decades for things to take off the fringe of JHH has remained dicey in my opinion. I would also add Federal Hill and Locust Point as favorable Balto. neighborhoods although like Fells Pt and Canton they are more expensive.

Russell Brazil · Answer

What neighborhood is it in?

Jayme Caldwell · Answer

Thank you for your response and feedback - it’s hard to know how to think about things, especially while I am trying to learn and figure things out. I get growingly concerned when I hear about the tedious research that is done by investors to make sure it’s a good deal - all research I did not do in making this purchase. For example, I had no idea utilities in Baltimore City would be so high. But if I think about it has paying “rent,” that helps to reframe it. I really appreciate your time and thoughts.

Jayme Caldwell · Answer

It’s in Butcher’s Hill

Jayme Caldwell · Answer

It’s in Butcher’s Hill

Jumped too quick?

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