buy and hold in the DC metro area? (Baltimore, Laurel: section 8, real estate)

[trying2moveup]

I'm just curious if anyone is finding TH and SFH to buy and hold for rent in this area during this market? It seems to me that even with the fall in prices, it is still hard to find properties to rent and cover expenses with minimal cash flow that people actually want to live in. Just wanted to get opinions.

[trying2moveup]

?

[North Beach Person]

One of the problems with many sellers is they think it's still 2005 or so. Because of that many won't take current value (which in some cases is still more than they paid or currently owe). Also there are people who are upside down and don't want to take the loss.

[cool rob]

You have to really look around, there (IMO) are some great deals out there, you just have to search to find them. You may also want to give the auction in Upper Marlboro a try, every now and then you can find a nice steal on a pre-foreclosed property.

[dcdrogers]

Ok...please don't shoot the messenger here, but here's were you can make some potential cash if you can hold long-term. Look in less desirable areas such as Capitol Heights (20743) and Landover (20785). Properties are selling dirt cheap (far less than $100,000 in MANY) cases. These properties will need some work, but if you can buy a few at $50,000 or $60,000, put some work into them and rent them to Section 8 families the properties could potentially pay for themselves. Keep in mind.......Section 8 isn't for everyone.

Just a thought.....

[trying2moveup]

I never shoot the messenger; i want advice and opinions which is why I come to this forum, so thanks for the tips. I'm looking for long-term. Are the 20743 and 20785 zips near this whole National Harbor thingy (I know where Landover is in general fromthe old Cap Centre days but I"m not familiar with Capitol Heights at all). I can see where the properties can pay for themselves and i'm not against Section 8 -- however, is there any appreciation in these areas. . .is there revitalization planned or ongoing? I'm sure we could buy something but is it going to be worth only what we paid for it in 20 years?? I know, it's like tryin to have a crystal ball. . .

[cdj02]

Originally Posted by trying2moveup

I never shoot the messenger; i want advice and opinions which is why I come to this forum, so thanks for the tips. I'm looking for long-term. Are the 20743 and 20785 zips near this whole National Harbor thingy (I know where Landover is in general fromthe old Cap Centre days but I"m not familiar with Capitol Heights at all). I can see where the properties can pay for themselves and i'm not against Section 8 -- however, is there any appreciation in these areas. . .is there revitalization planned or ongoing? I'm sure we could buy something but is it going to be worth only what we paid for it in 20 years?? I know, it's like tryin to have a crystal ball. . .

Hey Trying2Moveup,

You ever think about investing in Baltimore?

[cool rob]

Originally Posted by cdj02

Hey Trying2Moveup,

You ever think about investing in Baltimore?

From what I heard about Baltimore, is that the majority of those empty rowhouses are truely shells (some of them make you sign a waiver before you enter in because of inherent dangers such as toxic mold, bad ceilings, old stairs, etc) and many are owned by out of state speculators (or the city outright) who have no interest in selling them, they are just holding them in that hope that Baltimore becomes the next DC or NY.

Baltimore also is a very "who you know" town, so getting one of those rowhouses in a better/not so bad neighborhood is easier said than done, and were talking about investing at least 60 grand in rehab costs.

Many times the empty rowhouses are on blocks full of other empty rowhouses, so what is the point in grabbing one, repairing it, just to have the crackhouse across the street wait for you to finish so they can bumrush the house and steal all the materials out (appliances, even copper plumbing!)

Trying2moveup, if you don't mind the distance, I heard the York, PA area has some seriously cheap homes that need very little (if any) work done, and you can grab a 3 unit building for a few thousand bucks. Not too much crime, its just a depressed area that has very little industry. And it's only about an hour outside of Baltimore. Give it a look and see if it fits.

[trying2moveup]

THanks for the tips CDJ02 and Cool Rob. Though we are very close to Baltimore here in Laurel, I am scared to start as a brand-new investor there. I'm sure there are deals to be made and had but I don't know if I'm cut out for that right now until I have some experience.

The block to block nature also perplexes me; not that is isn't as it is.. . but WHY is it that way?? I mean if you can be "safe" in a rennovated home in one block and walk to the next and be in crack-heaven. . . I just don't get that!

I will have to check on York. ONe thing I wanted to ask is if real estate agents can also determine what the average rent prices are in a given area so that when we analyze the property and determine the NOI as far out as we can, we can tell if we can even rent it.

Here's another question -

how many investors rent only for cash flow (however minimal) or rent to break even OR rent with negative cash flow. I know this is a hot topic!

[cool rob]

Originally Posted by trying2moveup

THanks for the tips CDJ02 and Cool Rob. Though we are very close to Baltimore here in Laurel, I am scared to start as a brand-new investor there. I'm sure there are deals to be made and had but I don't know if I'm cut out for that right now until I have some experience.

The block to block nature also perplexes me; not that is isn't as it is.. . but WHY is it that way?? I mean if you can be "safe" in a rennovated home in one block and walk to the next and be in crack-heaven. . . I just don't get that!

I will have to check on York. ONe thing I wanted to ask is if real estate agents can also determine what the average rent prices are in a given area so that when we analyze the property and determine the NOI as far out as we can, we can tell if we can even rent it.

Here's another question -

how many investors rent only for cash flow (however minimal) or rent to break even OR rent with negative cash flow. I know this is a hot topic!

I will just try and answer your last question:

I think in this market, very few are renting to make any real money, as it has kind of become cheaper to own your own (if you can) then rent someone else (exluding "high end" rentals, these will always be cheaper to rent over time IMO).

I also believe that many are pulling this one here: Renting to a unsuspecting tenant, pocketing the cash (however much it may be) while the whole time, the house is placed on the foreclosure list (I heard it can take up to a year and a half before you are finally kicked out, and with so many anti-foreclosures bills coming up it may be longer than that). The tenant doesn't know until the sheriff is at your door with some paperwork and a couple hard looking guys with moving clothes on (I think a great number of foreigners fell victim to this one).

Another way to look at it is that: You have someone who's ARM just went up another 300 bucks, and they are trying to stay above water and keep their credit in as good of shape they can, so they may be willing to take a little loss each month, just to keep the place occupied and off of the foreclosure list.

And then you have the savvy investors whom: bought extremly low at the right time (or were left a house paid for and didn't go crazy on the refinancing), and are in no rush to sell, and can afford to take a little hit each month (as should be expected). These jokers may owe 400 on a 3 bedroom single family in the hood, and rent it out for 800 a month. So if your renter is short 200 bucks, it is not the end of the world. Now this same property but with a landlord who owes 800 a month on the mortgage can't take the hit each month, and can't realistically "compete" with the other landlord. One can accept shorts, while the other can't, and he does not need the full amount of the rent paid to keep bread on the table, because as long as the 400 is paid, he is ok (not that he doesn't want his money, just not as hard pressed)