As a young naive investor I was looking at row homes in Baltimore to purchase in 2005. While touring one property I went next door to another property being renovated and spoke to the owner. His advice to me was, if you plan on doing renovations here, plan to live in it while you renovate because they we steal the stuff when you leave because it happened to him. I ran as fast as I could, 15 years later that neighborhood is still struggling

Good video. I live in Baltimore and I'm a real estate attorney. Another major problem is liability. If you buy a vacant home and don't start renovating right away, you can find yourself in big trouble. If some kid eats lead paint in your property, you can end up in jail. And no, owning it in an LLC won't save you. Scary stuff.

Baltimore has a HUGE problem that it must overcome if it has any hopes of real development. The city is not business friendly and is unwilling to take the bitter pill to curb its crime, drugs and gang problems.

As a general contractor I've done a few rehabs for investors in Baltimore. The biggest obstacles are CORRUPTION and CRIME . City officials are corrupt and are only good at sticking out their hands. I've had tools, materials and even my work van stolen. Good general contractors won't work in Baltimore.

Living in Baltimore for years was mental torture. One friend was murdered, we were all burglarized, I was run over, and the guy didn't even get a ticket after flooring the gas from a stop at a red light after making eye contact with me. The investment strategy for Baltimore is to move far away and to live well and not be a constant victim of serious crime. Any investment made in that city is a waste, and literally puts your life at risk.

The great TV series THE WIRE does a excellent job of showing Baltimore politicians as they truly are

Bought a property in Westport zip 21230 to renovate. Paid $19,000 for it. Sold it 2 years later for $14,000. Between the city trying to fine me for every little thing including them tearing down the wood fence on my property to store some of their construction equipment. They were working on the road. So then they fined me for my fence laying in my yard that their workers tore down without my permission. Paying a water bill higher then the one at my personal home, when the water on this property is shut off. But worse was the fine upstanding citizens that I'm sure are all preparing to go to college to better themselves. They felt they had the right to break in and steal everything of value and destroy everything else. I swear I think they would steal a dirty pair of underwear if you left them there. So my wife and myself just took the loss and swore to never even think about investing in Baltimore city again. To many of the people are just plain thugs and drug dealers and the city is corrupt from the top down. Learned my lesson the hard way.

It’s not the actual house, it’s the neighborhoods that the property is in. Also a lot of these properties are not worth the time or money because a lot of the neighborhoods are just so dangerous and nobody in their right mind wants to deal with it

What they need to do is what they did with Federal Hill. Instead of knocking them down, the City needs to seize them en mass. Erase all of the liens and sell them for $1 each. The only stipulation being that within 24 months, whatever structure is there must be completely up to code. Not up to code? The city takes the property back at no cost and sells it to someone else for $1. It worked wonders in the 80s.

I went past the house that my mom grew up in on Virginia Ave. Her old house was boarded up and her grandparent's house, next to it, had a tree growing up through the middle of it and the roof and upper level had collapsed. Was a shame as we have some old photos of those houses and they were absolutely beautiful in their prime.

Two major reasons not mentioned. 1. Property Taxes: In Baltimore they are about 10 x higher than in Virginia. And keep in mind that for investors, the purchase price is often well below the tax assessed value of the property. 2. Non-Resident Withholding Tax: If you are an out of state investor, expect to pay an extra 5-8% in taxes on your net proceeds at closing.

I was just in Baltimore and ended up driving through the East side where I saw block after block of beautiful row houses boarded up and in shambles. It was honestly shocking and I’ve never seen something like it before. Then a few miles down in Canton, the row houses are beautiful, selling for around $450k. It was shocking to see the difference so close together!

Baltimore has become the Detroit of the eastern United States...

Come to Baltimore , become a statistic.

Please....I lived in Fells Point for ten years. During major snowstorms, WE had to dig out our street, it was NEVER plowed.. My water meter broke (city owned) in the front of my house and it took TWO WEEKS for them to come out and turn it off (the process took less than 3 minutes). In the meantime, my basement continued to flood. Every time I called they told me the same thing - they had no record of my previous calls, even though I told them who I spoke with. It is a great place to live if you stay stoned all the time, or don't work. City even managed to ruin the Inner Harbor Complex.

Baltimore has a sharp divide between the haves and have nots.

I live 15 mins outside of Baltimore, & have wondered for *years* why these 6k houses aren't getting snatched up & flipped. The liens you describe are predatory & awful, & it FINALLY makes sense. Now, remember, 1) My county has free trash pickup, & free landfill access. Baltimore citizens have to pay. 2) The water & utilities are super-high compared to ours 3) Public transportation, to help ppl there get to higher-paying jobs, has been promised for decades, but not delivered. 4) Salaries in these neighborhoods are ridiculously low. 5) When someone grows up in these neighborhoods, & can't get a better job, & can't ever GET TO a better job, they end up stuck in a cycle of poverty while the rest of us blame them for the crime of "trying anything" to get out. Something has to change, but gentrification & supply-side economics aren't going to be it. You can develop all the housing in the world, but if there's no parking, & no reliable public transportation, they're not going to be able to afford it. So, thank you for explaining the part about the liens. What we need to do now is think of a win-win solution to get the city to drop them, so gentrification doesn't NEED to be part of the conversation.

I used to work with a client who bought homes in Baltimore that were literally shells. I understand the lien issue and he would buy ones without liens or the ones without major ones. After making the mistake once of leaving renovations unattended and having pipes and material stolen several times, he would hire an armed security guard to basically live in the house while the renovations were being done and he would or his wife would watch the cameras when the security guard was sleeping or off and at home. They caught many people trying to break in and intercepted them this way. After he flips the house, it is up to the new owners how they want to keep the property secure. He told me he would get contacted by recent buyers complaining about attempted burglaries. It is honestly a real shame. Too many criminals in that area. You arrest one breaking in, another guy shows up next week. They never stop. Can't keep new construction nice unless you stay on top of it 24/7. They should pass a law in MD that anyone that gets convicted of burglary in MD with intent to gut a house, should either have a choice of being sentenced with a felony and 5 years in prison or 5 years probation and a full time work requirement. These guys are gutting houses because they need money. Thats nice. How about finding a job?

This is such a shame. Lived in the Inner Harbor area 20 years ago and remember seeing streets full of these dilapidated row homes all over. Sad to see it’s still the case.

I've rehabbed properties in Baltimore. I can tell you that the issue for me wasn't corruption from the city or liability. The issue was THE PEOPLE! From robbing the homes, breaking into them for a night of drugs and god knows what else to stealing tools from the trucks of my contractors; I experienced so much rehabbing in Baltimore! I'm a woman and I went to one property one day to check out what my contractor had done. I was alone. As I was opening the front door, someone was running out of the back door! The person left their CAR KEYS! I found some garbage and a blanket upstairs in the home, but the person CLEARLY had a vehicle! Since I was alone, I just left the keys there and left the property. I didn't even go looking from room to room to possibly surprise someone. I had people break into one of my properties and steal all the materials. Even with video cameras (ie. Ring), the police don't respond quickly enough to stop the property crimes. It was a really hard thing to manage, along with trying to get everything done. I rented dumpsters. The very first property I did, I notified the dumpster people that the dumpster should be picked up. They didn't come get it for 2 days. By the time they came to get it, the neighborhood people had dumped EVERYTHING into it. It had been WAYYYY overfilled! That was a nightmare! I had to battle the dumpster company because they didn't come immediately when I asked them to! I thank American Express for ruling in my favor, but it was so much of this. I had someone break in and have a drug party. I was happy when I called the police because I thought we were going to "get them" since we had needles, bottles and lots of DNA evidence! The cop laughed at me and told me I watch too much CSI! He said the crime lab doesn't even come out unless there is a murder! LMAO! He said that even if they did and they found each person, each person would just say someone planted their DNA at the scene! LMAO! I had video, but the video showed ONE person coming in and then letting everyone else in. So no one but the first person could even possibly be prosecuted because everyone else would just say they were invited to a party! LOL! No! I walked away from 4 properties I purchased in the city because I just had enough. If you find GOOD solid contractors, hold on to them like gold! And invest in SOLID security! I might try it again in the future, now that I have some rehabs under my belt in other areas and I have a better handle on what to do, but Baltimore was my first foray into rehabbing and I can admit that I got my butt spanked! I can laugh about it now, but there were some moments that I just wished I could strangle some of the criminals there.

Why, Here's why, as soon as you remodel the block everything inside the houses will be stolen. They will be stripped of all the copper. Anything of value will be gone. Good luck..

I am happy to see such a young face making such an investment in Baltimore. Unfortunately, the reason that the city is this way is because Private Ownership began to be removed between 1955 and 1968, since that time more and more slumlord, out of town investors moved in and less real people owning real property. I was born in Baltimore and have spent my life doing Baltimore history. Gentrification was called "Blockbusting" when Nancy Pelosi's father in 1955 and it DESTTOYED the unification of the community.

Stringer tried but failed.

This is my hometown and there are about 17,000 abandons. This is heartbreaking and wasn’t like this 30 years ago. I would love to rebuild my city

Because when they are finished.... the investment is in Baltimore City run by clowns. That is how the city got in the condition it did.

Most interesting video I’ve seen in awhile! Great job. Hopefully you have more like this on other dilapidated cities. Keep up the good work please !!

To investors and those who are aspiring: members of communities do not destroy the properties nearest to them for sport. They are in a community that is so stricken by poverty people will do anything to eat. The causes of poverty are cyclical-job opportunities are based on education, education is based on property taxes, property taxes are based on property values, property values are based on investment in a community, no investment means crime and drugs (a black market literally caused and created by a lack of resources both from sociological/psychological despair and monetary incentives of those who have few other opportunities). Crime and drugs mean no investment, no investment mean lower values, lower values mean lower taxes, lower taxes mean poor schooling, poor schooling mean fewer economic opportunities which lead to higher crime and the cycle begins again. .

I'm not even into anything your channel is about but this topic I've just always wondered. Thank you for explaining it in so much detail

Answering your question would get me banned.

It’s great when you google a question and you get exactly the answer you’re looking for. This plus your renovation cost breakdown = gold! Now I can bid with a little more knowledge and confidence on these two upcoming B-more properties up for auction.

Classy Climb Crew here. This was very informative. I have always wondered why these cheap and almost free houses just sit there but you provided a very clear explanation. Thank you! I think I'll check out some of your other videos.

As an investment group a conversation could be had with the city council to determine a deal. Tax breaks, contractor deals etc...Also a waiver of liens. Once a total renovation and rollout plan is presented Multiple blocks can be razed and reconstructed increasing the taxbase in the city. But the project would need to be sizable

This whole 10 minutes video can be said with 1 word: LOCATION

Very informative... I just started taking a second look at Bmore $1 properties. And yes, the Comps are an issue, if the Realtors and banks wont go 3 miles away. And it doesn't makes sense to have 1 unit Reno's but the left and right unit still bad. An investor must get an entire block, rehabilitation them all, and try to sell from there. That easily get into the millions, and that's if the natives dont destroy it in the process. In one breath, they dont want the run down area, but on the other hand they dont want to see develops come through, because they know the developers are not there for them. DC has done the same thing, now look at it. $1mil property that only top people can afford.

Thank you for this, I worked at the Cleveland Land Bank and this is all accurate. There are way too many strings attached to these properties for anything productive to happen, unless large scale projects and/or companies start moving back into urban areas. I don’t see happening anytime soon.

i looked up houses when i use to hang out in nefarious spots of Philly... you can get a super nice row house completely renovated for under 50 grand...just have to deal with people shooting up outside on your doorstep

Thank you for this information. For some reason I am always angry when I see the conditions in the city of Baltimore. This has helped me to understand what the real causes are.

"Pushes them out" Gentrification

I learned way more than I thought I would in this video great content

It might cost even more to demolish the buildings given that they are older and have asbestos. So the EPA won't even let you do a simple demolition without high costs for asbestos removal. The government should do something bold and repurpose the land or create programs that help disenfranchised communities all while improving communities. It's so tough. Not an easy solution. Great vid!

Great video good info because I was definitely curious about Baltimore cities market 👌🏿

They answered the question when they said Baltimore, Baltimore is the reason. I'm so glad I got out of MD in the summer of 07

Wow, good info! Ericka Williams' Classy Climb Channel brought me here!

Great information and thank you very much!

Thanks for the information. My wife and I loved to go to the Harbor to stay. We were warned by multiple people to stay within the Harbor area. One day we decided to venture out by car to the surrounding areas and saw just how bad some of it was. Our first thought was to pick up a block and renovate it. We thought that surely this could be the next Harlem revival. Unfortunately, a friend was explaining what you were saying. It’s easier said than done, especially with the politicians in office.

I've never been interested in owning real estate for investment purposes, however, I have rented three times. Some renters "intend" to increase the value of the rental, while they live there, because that "improves" the quality of their lifestyle while renting. Some people don't understand that. Whether one "owns" (and that is always debatable) or rents, some people are "invested" in their own lives and want a certain kind of environment to live in. Some people DONT. Remember, Take Good Care.

This is absolutly craziness! What a very broken system. Thanks for the video bro. I was talking to another investor the other day about one of those areas.

Excellent breakdown to a question I had for a while now

Well said, I learned a lot. You should teach.

You speak with honesty.

Really interesting take on vacant houses. I think this deserves more views.

thank you. like your friendly,info approach. helped explain liens that an elderly,underfinanced friend found encombering selling her home.

Well presented vid on the hidden pitfalls of investing in low value real estate in Baltimore.

I kind of wonder if they could like, crowdfund a square mile of the city and basically guarantee employment from companies and basically "aggressively gentrify" areas where no one lives anyway and actually stimulate the economy. Might be an interesting idea.

Dear Mr. Moreno, Thank you for an honest, unbiased, and careful analysis of this problem. ;-)

Great job Devin! Very informative videos. I have watched tons of real estate videos but I find your videos very realistic and devoid of all the bogus stuff that puts me off many other videos. Thank you for sharing. However, I have a question. Can you recommend a resource to me where I can learn how to fund a project with hard money lenders and have the bank pay them back etc? I am totally new to this and I need some hand-holding. Thanks again.

Did I miss the part where he says that entire neighborhoods are filled with criminals and drug addicts?

Interesting breakdown of the problems. I live in a nearby state and have experienced some of the issues. I bought a beautiful old house that was pretty sound, structurally, at a rock bottom price. My plan was to live mortgage free so I could retire early. I'm satisfied with the choice but am happy only if I ignore the blight all around me. Mine is the only owner-occupied residence; the rest are slumlord owned with low-quality tenants. To be fair, the neighbors are sometimes very nice, but their struggles and low expectations guarantee that my property value will remain low. I do all renovations for my own enjoyment and accept that I won't earn it back on resale.

Awesome video thank you for sharing!

predatory liens for sure. I would love to interview you over at the classy climb channel.

The only way to invest in inner city Baltimore and profit is if Gentrification happens. The quality of people who reside in the area doesn't care for the area which is the problem.

One thing I've learned from my mentors is that it's better to buy a great investment at a fair price than a modest investment at a cheap price.

Great video. Keep the great info flowing.

This was very eye opening. Thank you

No one mentioned the rats the size of cats.... if you rent them out after you sink money into it, you just have to do it all over after renters tear it up again.... been there, done that....

I lived in Baltimore one year, to be close to Johns Hopkins Hospital. That was more than enough of that terrible city. I couldn't wait to get out of there and move to Virginia.

nicely told....you truly schooled me literally

Great job man!

The Baltimore market will change in those warzone neighborhoods. Investors would just have to be willing to wait many years. Possibly decades

Here in England we have a quaint expression which adequately sums up the situation here: "You cannot polish a turd."

Found you through the Classy Climb Channel. You both give solid information.

all your side is spot on David

The only reason they tear down houses is because it is cheaper than to renovate the existing houses. Which is really sad because the city then loses its historic buildings....Baltimore can be a beautiful city if they renovate the existing houses instead of tearing them down...just look at DC and how the area behind Capitol Hill has improved. It's the best part of DC because it kept those historic row houses intact. I really hope that Baltimore decides to preserve these homes. Developers building a bunch of high-rises will turn it into yet another American city with no history. I'm looking at Baltimore right now to buy a property. I just can't stand to see the city's history destroyed like that.

Thanks for making this video. very interesting. I'd be interested in hearing more about the reason/story/politics behind the lien situation on these properties.

Thank you this was very informative

Liked and subbed. Great info, interesting comments

Pushing them to other neighborhoods does one thing. Brings down the neighborhood they move too. I grew up on northeast and its gone way downhill

For some reason I’ve found these old row houses in Baltimore to be really fascinating. Must have been hopping back in the day. Sad it’s difficult to bring them back. Perfect for “gentrification,” even though that can be a bad word.

Very good explanations for some very "taboo" subjects. Thanks

Thanks Devin nice job.

Erika from Classy Climbers brought me here. Great info.👍🏾

Wait what? This is the most generous description of Gentrification I've ever heard. And it's carried but, I don't know how it works. Gentrification does not help those people it replaces them with others who have the financial ability to pay more, pushing disenfranchised people further away from services.

If I had the money I would .What's sad is so many celebrities and rich people were born or raised in Baltimore and what are they doing nothing . Even through I left that is still my home .It's sucking when wealthy people with money watch there hometown get boarded up and torn down .

AND.....while your renovating be sure and wear a bullseye on your shirt!!!

Awesome Video!!!! Thank you for sharing this. You saved me over $ 45,999.

I have seen those homes and they are falling down due to old age and neglect. In Washington D.C. they purchased entire neighborhood of bad row homes, knocked them down and built brand new homes instead.

Great vid!

very informative thanks!

Ugh because they don't want to have to call the cops and t hen become targets...unless u plan to allow drugs to be dealt on Your block..

The vacant still have the bodies put there by Chris and Snoop.

Ericka Williams' Classy Climb Channel brought me here! Great Content!

I always had this weird thought that if you bought 4 city blocks, knock down all the houses, wall off the 4 city blocks with high concrete walls, and a heavy gate, bring in top soil, trees and build a large house in the center. It's a crazy pipe deam.

You just described "Gentrification". I worked in NYC back in the 80's for NYC at a very good salery. A group or my coworkers ,combined resorces and purchased abandoned propertirs from the city for as little as one dollar. The city forgave tax leans and absorbed utility liens ,by allowing the companies to raise rates on everybody else.. They paid the tax rates for 5 to 10 years.Rehabed the properties slowiy. Now those rehabed townhowses in Harlem go for 5 million each. The ones in Brooklyn go for 3 million . As a Young person you should start donating to local politictians , who can make that happen. As the politician Clay Davis in the HBO series "The Wire". said"Shhheeeeit".

Gentrification is a blessing for many people that own homes it’s better to have your community thriving then high crime

Very interesting and informative explanation.

Very interesting video. Having lived in Baltimore from birth in 1950 until 1979, I hated to see the City's beautiful rowhouse architecture fall into disrepair in various neighborhoods. Now I understand more clearly why there's no large effort made to save blocks of crumbling rowhouses. Sounds like once the decline hits a certain point the only option is to level everything and start over. Only a miracle - an investor coming along with a bottomless pocket and willing to accept only pennies on the dollar for his/her investment - would save some existing blocks. In my lifetime, I've never made the acquaintance of such a person.

Thank you for this information, I live in DC and wondered the same thing. Would love to meet up and learn more about investing into real estate .

I worked in some of these renovations, so sad to see people walking home from the corner store and drop trash on the ground. Every day sitting in my work van having lunch I’d see this.

Great content

Good questions, I think investors of a different sort are buying and selling. The boarded up houses are often used same as the tokens in the Monopoly board game. Ramshackle house is bought for much more than its worth, a large wad of cash changes hands, the city gets its taxes for the transactions, they building sits for a couple years and is sold again, this time for a radically different amount, money changes hands, taxes are paid, and the cycle goes on. Another interesting aspect to the board game is that many of the people who are involved with the transactions are immigrants. Now, I have no dislike for immigrants, my ancestors were once immigrants, but why is it that people who are recent to America are buying and selling dilapidated buildings????? yet not doing anything with them??? I say its money laundering or tax evasion. When large amounts of money leave or enter a person's bank account, and there is no explanation, like a sale or purchase of real estate, red flags are raised. THE CITY GOVERNMENT IS NOT INTERESTED IN DILAPIDATED BUILDINGS. If it was a concern they would be dealing with the slumlords. Why is the Uni MD Bio Park being funded by taxpayers while the buildings are owned by an LLC at a PO box number in Pheonix AZ????? Why does the city gov. buy up land around the Bio Park, level it then hand it over free or for pennies on the dollar to the insiders of the Bio- Park. Once they demo the properties, the history of the previous owners and sales transactions are erased on the MD Real Property search web site. Please keep producing these videos and keep digging for the truth.