MARKET SPOTLIGHT: MARYLAND STILL AN ATTRACTIVE PLACE TO INVEST
The affordability to rent a home in the city in 2019 is 35.3 percent and 41.5 percent for the county. The percent of wages to buy a home in the city with three percent down was 16.1 percent and 38.1 percent in the county last year. To realtor, investor, mentor, and author Ian Parrish, whose family has been in Baltimore real estate for de- cades, real estate is not about location, it is about cash flow and equity and controlling property. “I can invest in high-dollar neighborhoods or tougher neighborhoods. You don’t have to buy real estate, you just have to control it. In any market you're going to have the opportunity to go under the rocks and get out of the mainstream,” said Parrish, who is also president of the Investors United School of Real Estate Investing. “I want to make my equity when I buy and realize it when I sell. There are still people underwater who just want the property out of their name. The most important thing is to realize it’s there.”
A HIGHER POINT OF ENTRY Both the University of Maryland and Johns Hopkins University have campuses in Montgomery County, home to a population of more than 1 million people, and the most populous county in the state. It is also one of the more costly places to live in the state. So for investors looking for investment properties there, the point of entry into the market is going to be higher. With an unemployment rate that averaged 3.3 percent in 2018, investors are not only competing with each oth- er for available assets, but also with traditional buyers, including parents looking to buy condos near those well- known schools for their kids. “People who are investing in Montgomery County are people who have money, live here or, are bringing in money from overseas,” said Alex Saenger, president of the Saenger Group LLC, with the Rockville office of Keller Williams. “Our area is a big area for wholesalers. We buy homes for cash. That’s a big thing happening right now. If you can afford it, buy-and-hold is the best strategy long term for investors, but not necessarily condos.”
I can invest in high dollar neighborhoods or tougher neighborhoods. You don’t have to buy real estate, you just have to control it. In any market you're going to have the opportunity to go under the rocks and get out of the mainstream. I want to make my equity when I buy and realize it when I sell. There are still people underwater who just want the property out of their name. The most important thing is to realize it’s there.”
IAN PARRISH
Baltimore City
were seriously underwater by the end of 2018 while 23.4 percent of its homeowners were in an equity-rich position. The average rent for a three-bedroom, single-family home in Montgomery County for 2019 is $2,368 a month, a 0.6 percent increase from 2018. The affordability to rent a home in the county this year is 39.3 percent of the average wage, while the percent of wages to buy a home in the county with three percent down was 67.4 percent last year. With a nationwide network of investors to draw from, Saenger said his business comes to him almost exclu- sively by referral these days. For new investors he recommends they refer to a seasoned investor who can help advise them on how to pencil out a deal to make sense. “People get a false understanding of what it takes to do this stuff and then are disappointed when they don’t make what they think they should,” he said. “You don’t want to have the most expensive house in the neighbor- hood. Nobody will pay for it.” A DECADE OF CHANGE To O’Ranti J. Robinson, a broker with RE/MAX Profes- sionals in College Park, the last 10 years have seen a significant change in Prince George’s County, particular- ly in the real estate sector. “There’s a lot of things in the works that will push the economy in the area and housing is a big part of it,” Robinson said. “When investors do come in, there has been significant change in terms of the neighborhoods
People who are investing in Montgomery County are people who have money, live here or, are bringing in money from overseas”
ALEX SAENGER
That’s not to say that flipping is not happening in Mont- gomery County. ATTOM reported for the third quarter of 2018 that 104 flips were done, representing 2.9 percent of all home sales in that quarter and down 28 percent from the same quarter a year ago. Sixty nine percent of all flipped properties were bought all-cash, for a median purchase price of $240,500. Investors saw a gross return on invest- ment of 49.7 percent, a 13 percent increase in ROI from a year ago. The average flip took 176 days to complete. One in every 265 properties in Montgomery County had a foreclosure filing in 2018, totaling 1,457 properties with foreclosure filings, down 10.5 percent from the pre- vious year. The county ended 2018 with a median sales price of $430,000, a four percent increase from 2017. The well-heeled nature of Montgomery County is evi- denced by the fact that only 6.3 percent of its homeowners
24 think realty housing news report
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