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Old 04-20-2011, 08:48 PM
 
5,709 posts, read 7,338,947 times
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Quote:
Originally Posted by (-) View Post
buy and hold. that's what i'm doing. you can make a new development anywhere but you can't make a new waterfront anywhere. in about 4 years from now, you will see a drastic change.
It kindof annoys me when people do this. You're not helping the area at all (and you're probably hurting it if you leave the home vacant), and are basically just trying to wait until other people actually care enough to do something. What if a lot of other people have the same strategy as you? Then everyone's going to be "holding" and the neighborhood won't go anywhere.
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Old 04-20-2011, 10:25 PM
 
708 posts, read 1,116,885 times
Reputation: 369
Quote:
Originally Posted by GoPhils View Post
It kindof annoys me when people do this. You're not helping the area at all (and you're probably hurting it if you leave the home vacant), and are basically just trying to wait until other people actually care enough to do something. What if a lot of other people have the same strategy as you? Then everyone's going to be "holding" and the neighborhood won't go anywhere.
I think he means rent them out in the meantime. Not just let them be vacant.

However-giving the condition of most of the properties there, I have no idea how landlords aren't fined out the wazoo for the condition of the homes. Some of them are awful. Being a slumlord is not of interest to me.
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Old 04-21-2011, 04:59 AM
 
Location: Portland, Maine
4,180 posts, read 12,808,653 times
Reputation: 1603
Quote:
Originally Posted by End-User View Post
Do you have any advice on picking these neighborhoods? Specifics that someone not familiar with Baltimore wouldn't know?



For the life of me I cannot comprehend this sentence, what exactly do you mean?

Here's an example: A lady had passed about a year ago in the Patterson Park neighborhood. It was her family home and she had lived in it all her life. Needless to say-no updating had occured during that time. The home went to auction and the highest bid was 34 grand. Someone bought it and is now fixing it up with the help of our newest immigrants. He puts maybe 80 into it with material and labor. He sells it for 210. Or he sits on it awhile until the market starts to upswing. Either way he makes out in the deal.
What's his gamble? He knows that about 1/2 the homes in the area have already been rehabbed and sees the direction the neighborhood is going in.
My advice: I would walk and drive around and actually look for homes that are being rehabbed. Chances are those are the areas best for picking. In today's market, I would be looking at Highlandtown, still some in Patterson Park, perhaps Greektown, dumps in Hampden. There are many other areas also although I am not familiar with that. A thread should be started for advice like what areas of the city would someone want to invest in. Even in Canton, there may be some available that either go to auction or foreclosure, etc.

When I said I always bought for location, not home: My first home in Baltimore was on a little street named Register in Fells Point. I really liked Fells Point so I looked in that neighborhood for a home that I could afford that needed to be fixed up. I worked on it while I lived in it and sold it for a pretty good profit. I took the profit and bought one in Canton that needed work and did the same process. It wasn't necessarily the home I bought but rather where the home was located. I should also state that it didn't hurt me that two of my best friends in town were a a plumber and an electrician.

I should say that I actually enjoy doing that. It was kind of a hobby for me and I had a job that afforded me the extra money to fix stuff up. I always hired someone for anything I couldn't personally tackle like the plumbing, electricity. But most stuff can be learned as you do it. Pointing bricks? Tedious but easy. Sanding floors? Tedious but easy. Renting concrete busters? Tedious but easy. I think the hardest skill I learned was laying drywall but after awhile, that also became pretty easy.
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Old 04-21-2011, 09:04 AM
(-)
 
690 posts, read 1,595,317 times
Reputation: 477
Quote:
Originally Posted by GoPhils View Post
It kindof annoys me when people do this. You're not helping the area at all (and you're probably hurting it if you leave the home vacant), and are basically just trying to wait until other people actually care enough to do something. What if a lot of other people have the same strategy as you? Then everyone's going to be "holding" and the neighborhood won't go anywhere.
what i do with my money is my business as long as it is legal. the term buy and hold does not mean buy and become a slumlord/deadbeat owner. i pay cash for all my properties. no mortgages. if they are in speculative areas, i lightly renovate them in order to get adequate renters. no sense in doing an upscale renovation in a blighted area. change doesn't happen over night. i screen all my tenants. i dont just put anyone into my properties. i've been doing this for well over 9 years now, i know what i am doing. other people don't have the cash (not gloating) to do what i do. doing what i do would put most people in financial binds.
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Old 04-21-2011, 10:21 AM
 
Location: Squirrel Hill
1,350 posts, read 3,098,533 times
Reputation: 402
Well its your own business until you go posting about it on a message board, that's essentially an invitation for people to express their opinion on it if they want. I'm glad you have such a great business strategy that seems to be working for you... I'm not sure how it helps the OP though who clearly isn't in that sort of financial situation.

Jonjj's strategy is probably better for most people, buy dumps in (reasonably) good neighborhoods and fix them up. It's not for everyone and there is still some risk involved but I think its a better investment overall.
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Old 04-21-2011, 10:32 AM
 
775 posts, read 1,505,252 times
Reputation: 271
Quote:
Originally Posted by jonjj View Post
Very true. My own experience: I never bought what I couldn't easily afford. Basically, I bought dumps in neighborhoods that I thought would have an upswing. My timing was right. I fixed them up and sold when the market was right. I'm out of the business now but I still know of lots of people still doing it and making a buck-not just as much a buck as they would have made during the bubble. I also always chose location over home.
Sidenote: When my dad passed, he had lived in suburban Detroit in the same home for 24 years. He bought it for 102 grand at that time. During the bubble, they were going for 240. I sold it last year for 98.

I would still not hesitate to buy in today's market. I would just be very careful.
So, in 24 years you lost 4 grand? Now there's an investment. I agree with most of the above posters. Rent is the way to go now.
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Old 04-21-2011, 10:41 AM
 
708 posts, read 1,116,885 times
Reputation: 369
Quote:
Originally Posted by jonjj View Post
Here's an example: A lady had passed about a year ago in the Patterson Park neighborhood. It was her family home and she had lived in it all her life. Needless to say-no updating had occured during that time. The home went to auction and the highest bid was 34 grand. Someone bought it and is now fixing it up with the help of our newest immigrants. He puts maybe 80 into it with material and labor. He sells it for 210. Or he sits on it awhile until the market starts to upswing. Either way he makes out in the deal.
What's his gamble? He knows that about 1/2 the homes in the area have already been rehabbed and sees the direction the neighborhood is going in.
My advice: I would walk and drive around and actually look for homes that are being rehabbed. Chances are those are the areas best for picking. In today's market, I would be looking at Highlandtown, still some in Patterson Park, perhaps Greektown, dumps in Hampden. There are many other areas also although I am not familiar with that. A thread should be started for advice like what areas of the city would someone want to invest in. Even in Canton, there may be some available that either go to auction or foreclosure, etc.

When I said I always bought for location, not home: My first home in Baltimore was on a little street named Register in Fells Point. I really liked Fells Point so I looked in that neighborhood for a home that I could afford that needed to be fixed up. I worked on it while I lived in it and sold it for a pretty good profit. I took the profit and bought one in Canton that needed work and did the same process. It wasn't necessarily the home I bought but rather where the home was located. I should also state that it didn't hurt me that two of my best friends in town were a a plumber and an electrician.

I should say that I actually enjoy doing that. It was kind of a hobby for me and I had a job that afforded me the extra money to fix stuff up. I always hired someone for anything I couldn't personally tackle like the plumbing, electricity. But most stuff can be learned as you do it. Pointing bricks? Tedious but easy. Sanding floors? Tedious but easy. Renting concrete busters? Tedious but easy. I think the hardest skill I learned was laying drywall but after awhile, that also became pretty easy.
One important thing to note on this strategy. You cannot deduct improvement costs on your personal residence. You can on an investment property.
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Old 04-21-2011, 11:33 AM
 
Location: reservoir hill
226 posts, read 291,856 times
Reputation: 173
Baltimore officials agreed this week to lease a 6-acre waterfront parcel worth nearly half a million dollars to developer Patrick Turner for free for 40 years.

In return, Turner pledged to plant trees, widen a ravine and wetland area, and maintain the land as a public park. The land is sandwiched between the site of Turner's planned $1.5 billion Westport development and an Interstate 95 bridge, according to a lease agreement.

"We're actually saving the city money by taking the liability off of it," Turner said. "We're taking the maintenance off of [the city] and putting it on us."

Under the deal, Turner will not be required to pay property taxes on the land, which state records indicate is valued at $483,000. He will be barred from building permanent structures on the property.

Turner said he plans to begin work on the plot — a former ballfield long in decay — in about two years and could invest more than $7 million in improving and maintaining the parcel. He will place nearly 2,500 trees, shrubs and other plants in the plot, in accordance with a Chesapeake Bay Critical Area plan.

Turner said he hoped to snake the Gwynns Falls biking trail through the parcel, enabling riders to hug the shoreline and eliminating a loop that winds past a sewage treatment plant. The trail would be "quite magnificent" and possibly feature sculptures, he said.

A mayoral spokesman emphasized that no public funds would be used to fix up the now-vacant plot.

"Not one dime of City money is being used for the public improvements," Ryan O'Doherty, a spokesman for Mayor Stephanie Rawlings-Blake, said in an email. Rawlings-Blake is a member of the city's spending board, which voted unanimously to approve the deal this week.

The city-owned parcel is just north of the lot where the bright blue and yellow tents for Cirque du Soleil's "Totem" show are set up. Turner said he hopes the show will draw people to his Westport project, which is southwest of downtown.

The economic downturn has slowed work on the Westport development, but Turner said he plans to begin laying infrastructure on the southern edge of his land this summer. Work on the park will take place during the second phase of construction, he said.

Turner said the park will benefit his planned 50-acre development of residential, retail and office space. "It will make the value of the property higher, and we'll pay more property taxes to the city," he said.

The Westport Neighborhood Association sent officials a letter in support of the deal.

But some officials questioned whether the cash-strapped city should give land away — and not require Turner to pay property taxes on the parcel. Rawlings-Blake sliced $65 million from the city's operating budget this year, the third consecutive year of cuts.

City Councilwoman Belinda Conaway said the city should "absolutely" demand some sort of payment from Turner.

"We've asked nonprofits to chip in to help," she said. "I think people who have the means should be asked to help."

City Councilman Carl Stokes said city residents, who pay property taxes at rates twice as high as surrounding jurisdictions, have been forced to pay higher parking fines, income taxes and energy taxes to make up the city's budget shortfalls.

Stokes, who is considering a mayoral run, said developers should be asked to contribute more.

"The city can't afford to keep giving land away," said Stokes. "[Turner] should have to kick in."

Turner's Westport development received an unprecedented $160 million in aid from the city in 2008 in the form of a financial tool known as tax-increment financing.

Under a tax-increment financing plan, developers pay property taxes to the city's general fund on the land's initial value. The taxes on improvements to the property are used to repay the bonds.

M.J. "Jay" Brodie, president of the quasi-public Baltimore Development Corp., which brokered the land lease deal, did not respond to repeated requests for comment.

Turner has emerged in recent years as one of the city's leading developers and wields considerable political influence. Last month, he threw a birthday celebration and campaign fundraiser for Rawlings-Blake at his Silo Point condominium tower. Tickets cost as much as $1,000.

Councilwoman Mary Pat Clarke said she thought the parcel should revert to the control of the city's parks department after Turner finishes his work.

"I think it's fine for him to improve his own investment," said Clarke. "But it seems logical that it would be turned over to the parks department to maintain and manage."

But City Councilman Bill Henry applauded the deal because it meant the city would not need to spend money on the property.

"It might as well be someone else's responsibility to maintain," he said. http://www.baltimoresun.com/news/bs-...211,full.story
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Old 04-21-2011, 02:11 PM
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690 posts, read 1,595,317 times
Reputation: 477
Quote:
Originally Posted by Bong477 View Post
Well its your own business until you go posting about it on a message board, that's essentially an invitation for people to express their opinion on it if they want. I'm glad you have such a great business strategy that seems to be working for you... I'm not sure how it helps the OP though who clearly isn't in that sort of financial situation.

Jonjj's strategy is probably better for most people, buy dumps in (reasonably) good neighborhoods and fix them up. It's not for everyone and there is still some risk involved but I think its a better investment overall.
you assumed that i was some sort of slumlord since i used the term buy and hold. that's where you went wrong. i take exception to that. i would never put someone in a property that i wouldn't want to live in for myself.

there's no money in buying dumps in good neighborhoods, even in this market. that's what got folks into this mess in the first place. you can't "flip" property like you used to do. speculative or "good" neighborhoods have lost so much value that many of them aren't even really good deals now. and if it's too good a deal, chances are you are going to get in a bidding war with someone who has cash to buy the deal.
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Old 04-21-2011, 03:55 PM
 
Location: Squirrel Hill
1,350 posts, read 3,098,533 times
Reputation: 402
Flipping a property has nothing to do with an up or down market, long as properties are still selling and the market isn't rapidly declining before your eyes. Making money by buying in terrible neighborhoods is far more dependent on economic recovery. But whatever... as I said, I'm glad you are happy with your investment strategy that seems to be working out but it is clearly completely irrelevant to the OP who doesn't have much money right now and wants a place to live that will make her some money over the coming years without living in fear daily. I also didn't call you a slumlord, that was another poster.

Except for some specific "energy efficient" improvements, you can't deduct improvements on your home (although you can deduct the interest you pay on them if you finance via a home equity loan), but you don't pay taxes on your profit when you sell if you lived there for at least 2 of the last 5 years (which is substantial).
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