Investment Opportunity in Hampden

 ***UPDATE*** This property has sold

In Baltimore's Hampden neighborhood along a stretch of Roland Ave, just below The Avenue, there has been a significant amount of real estate flipping over the past two years. Fixer upper houses are being acquired in the 100's and being re-sold in the 300's.

In both the sale of the fixer-uppers and the renovated properties the days on market both in the acquisition and the resale are questionably long. Why? I've got a few theories...

Theory One:

In the past year (2015-2016) there seems to be a shortage of buyers in Baltimore willing to renovate a property. This is something that runs true from the houses that need only new carpet and fresh paint to the properties that need a full gut rehab. Even if there is demonstrative financial opportunity, the sweat equity portion seems like a hassle.  The exception is experienced renovators who take a volume-based approach to their work - their costs are lower because they've got the tools, the contractors, and the experience.

Theory Two:

Its hard to price properties in the trendy Hampden market. Data suggests strong sales are achievable, and with this knowledge sellers and agents alike are sometimes being too ambitious with their pricing. I'm guilty of this myself. In 2015 20% more real estate changed hands in Hampden than the previous year. Properties traded slightly lower (less than 1% statistically) than 2014. So while the market had more volume the results were flat. This is quite different than the Hampden market in 2014 which had significant increases in property values from 2013. If you experienced the Hampden real estate market in 2014, you could be forgiven for overpricing in 2015. In real estate when things are headed in an upward direction sometimes we think the trend will only continue. In the case of Hampden, the market leveled off in 2015. 

Given the aforementioned market conditions, an intriguing 2016 investment opportunity in Hampden can be found at 3522 Roland Ave Baltimore MD 21211.  Listed by guerilla realty for $190,000 this home has been featured in the January 2016 issue of Baltimore's Style Magazine. The detached property stands out on a block that is almost all attached rowhouses. While the location is Hampden, the feel + age of the house is just like you'd experience in Baltimore's Evergreen neighborhood. 

This circa 1880 property was approved for a Maryland Historical Trust preservation certificate in 2010 as it is located in the Hampden Historic District and the owner applied for tax credits associated with the cost of replacing some of the cedar shingles. Going forward, as this property is a candidate for a large interior renovation, the ability to receive tax credits for improvements will be valuable to the new owner.

A view from the front room at 3522 Roland Ave Baltimore Maryland 21211

The best interior features in the home are the hardwood floors, the replacement windows, and the overall square footage (over 1500 square feet according to the tax record). On the other hand, the kitchen and bathrooms are in need of an upgrade. The carpeting found on the top two floors has been professionally cleaned but will probably get replaced. The home has older systems (oil furnace and window units for air conditioning) that eventually should be re-done in a much more modern way. This home is an antique, its both historically charming and a property that will always require TLC. Much like the idea of purchasing a used BMW vs. a brand new Hyundai in terms of experience. 

On the exterior, 3522 Roland Ave benefits from a brand new front porch, well-kept roof (done in 2011) delightful backyard pergola, and attractive cedar shingles. There is a small front yard with a white picket fence that is sweet for gardening. Most important of all, this home is steps from Baltimore's best commercial entertainment district, The Avenue.  3522 Roland Ave does not have off-street parking, however,  you do not need a car to live in this location. Street parking is available and currently no permits are required. 

An interior view of the main floor at 3522 Roland Ave Baltimore Maryland 21211

The interior stairs have been off-putting to many potential buyers because the width of the treads are smaller than today's standards. The staircase itself is wide enough for moving furniture to the top two floors, but the tread issue is frequently brought to my attention. A Baltimore city client of mine replaced their interior staircase last summer and the new stairs proved to be a great enhancement. On the other hand, the existing stairs at Roland Ave have always worked well for the current owner, so it's a matter of preference. 

So what evidence is available that investors are purchasing in the 100's and re-selling in the 300's? Here are three examples in the immediate vicinity of 3522 Roland Ave:

3544 Roland Ave is for sale. This property was purchased in March 2015 for $188,000 and  re-listed in October 2016 for $334,900. The current price is $324,900 after spending some days on market. 

3528 Roland Ave is for sale. This property was purchased in December 2014 for $99,000 and re-listed in October 2015 for $339,999. The current price is $315,000 after spending some days on market. 

3524 Roland Ave (the house next-door) is currently under contract. This property was purchased in January 2015 for $126,000 and re-listed in October 2015 for $349,999. The last list price at time of contract was $314,999 (and it has since gone to settlement at $305,000)

These homes were being renovated last year when I first listed our subject property. Last summer a walk along the block was akin to walking next to a construction site - from the dumpsters to the porta-potties. Now that the dust has settled, buyers are starting to take notice of the new and improved properties. In terms of an investor comparable to our subject property, these comps all have off-street parking and roof decks. For this reason its wise to assume that 3522 Roland Ave, once renovated, will still trade a bit lower. The big variable in the price will be aesthetics. The interiors of the renovated comparables are shiny and new but a bit suburban in feel. This may not be your cup-of-tea if you are drawn to the 19th century charm of 3522 Roland Ave.  

Investment opportunity in Hampden, 3522 Roland Ave should be on your radar if you are looking for investment properties to renovate and re-sell or simply looking to buy a fixer-upper in a location with an upward trajectory. The property is available to be previewed by appointment. Equal housing opportunity.