Herve Francois: All right, folks. Welcome to another
edition of Market Hunter Thursday with Herve. I got to tell you something, we're going to mix it
up a little different for you guys. Washington D.C. versus Baltimore, Maryland. Folks,
I am torn on this one. As you know, we typically go ahead and invite a guest speaker
from a different city to come and talk about real estate investing in their city, the opportunities,
the markets, the neighborhoods ... Sport Coat Steve:
And I don't want to offend anybody who's watching and who's listening. They really want to get all
the black people out of the city. Stephanie Assi:
We're talking first time investors. Sport Coat Steve:
I took a moment to come by. Sport Coat Steve:
That's Somerset Projects. Stephanie Assi:
Shopping centers, stores opening, things happening.
Herve Francois: Today, no guest speaker
just [foreign language 00:00:44]. What we're going to do here is we're going to go ahead and
we're going to do a comparison. Two different cities, Washington D.C. versus Baltimore,
Maryland and guess what? Towards the end, I'm going to have you guys decide which is the best
city to invest in from a real estate perspective after I give you some stats, some opinions, some
thoughts about each of these cities. Now remember we did have a guest speaker come on our show
back on January 24th to talk about real estate investing in Baltimore, Maryland and back on
April 1st, we had another person come on and talk about real estate investing in D.C..
Sport Coat Steve: Like now, okay,
what we call Jewtown- Herve Francois:
Mm-hmm (affirmative). Sport Coat Steve:
-that's above northern Parkway. Okay, they actually used to be all the way down far as
Emerson village, I mean Emerson and Fulton. Herve Francois:
Okay. Sport Coat Steve:
And they just kept migrating up because more and more black people were moving in.
Sport Coat Steve: I'm going to give you a perfect example.
Remember I told you, I was talking to you about Johns Hopkins bought part of a project, right?
I made sure- Stephanie Assi:
Shopping centers, stores opening, things happening, especially in Anacostia,
Capitol Heights, like those areas. And prices are very attractive. Successful investors that I have
interacted with, a lot of close friends, the major, I would say successes in D.C.
are around flips. So a lot of people are buying distressed properties, renovating them, putting
a lot of upgrades and then getting them on the market. Because buyers, especially D.C. buyers,
families, they're looking for homes that are move-in ready.
Sport Coat Steve: I took a moment to come by.
That's Somerset Projects. Herve Francois:
Yeah man. Sport Coat Steve:
I don't know if they could see that in that top corner. Okay, that's Johns Hopkins Hospital.
Herve Francois: Yep.
Sport Coat Steve: Johns Hopkins has
[tactlessly 00:02:45] bought up the whole East Side. East Baltimore was a flat area. When you
look in here now, it's now a skyline here. They have a Hilton hotel down here and everything.
Stephanie Assi: You're talking first
time investors, so you really want to go to Laurel College Park.
Herve Francois: Yes.
Stephanie Assi: Those are good areas
that are still affordable and still close enough to D.C. when it comes to commuting.
And Metro accessible too, that's important. Herve Francois:
So I would definitely implore you to go ahead and check out those videos for more specific details,
here I'm going to hit on some highlights as well as some other research, I hope you find
it helpful. So let's go into it. Tale of the tape, Washington D.C. versus Baltimore, Maryland. Folks,
I am torn on this one because let me tell you right now, it's my old stomping grounds,
I grew up in a small town called Columbia in Maryland, right between Baltimore
and Washington D.C.. I went to high school in Baltimore. I went to graduate school in D.C.,
I'm torn. I'm going to let you guys decide and if you guys liked this, please smash that subscribe
button at the bottom of your screen. Herve Francois:
All right, let's kick it off right now with Washington D.C.. Here's some stats right
off the top. Population 714,000, median income $86,000. Now the median income to rent in D.C.
is $63,000, because you got median rent of about $1500. Now I know it's a lot of numbers there,
but one of the most important ratios to take into consideration here is
the price to rent ratio in Washington, D.C., That number is 32 and a half times. Which basically
means that D.C. is a good market for renting because the price of homes are so high. Again,
that median home value in D.C. is $600,000. D.C. ranks as number three in the country of cities
that have gone through gentrification. Herve Francois:
It ain't the same D.C. that I knew from back in the days when I was there down in grad school.
You got headquarters of some big time companies in D.C.. Fannie Mae, Danaher Corp, Lockheed Martin,
Marriott Corp, obviously the hotels and hospitality company,
as well as Capital One Bank, right? Which is right outside of D.C.. So a lot of big time employers,
a lot of job creation going on in D.C.. You got some real up and coming neighborhoods in D.C..
Herve Francois: Now everyone has their own kind of
tastes and everything else like that. These aren't my choices, but just based on some research where
there's a lot of activity going on, there's some good schools here, good jobs and one of the things
that we love about D.C. folks, a really nice Metro system. And let me tell you that has a huge,
huge impact as to the value of the real estate. I owned a condo in D.C. that I recently sold
a couple of weeks ago, let me tell you, for the fact that it was near a subway stop, a Metro stop,
really, really helped the sale and the value of that particular condo. So keeping that mind when
you are selecting either to do your flips, to buy your small multi-family, the location
relative to a Metro stop in D.C.. You got some nice neighborhoods in D.C.. Remember D.C.,
four quadrants, Northwest, Northeast, Southwest, Southeast.
Herve Francois: The three quadrants where you've seen
a lot of development and growth has been the top three, Northwest, Northeast and Southwest. The one
that is slowly coming around, when I say slowly, I mean slowly, is Southeast D.C.. There's a lot of
opportunities for Southeast D.C., but that is an area where you're going to have to plant the seed
and apply some water nicely and over time and be patient. You're going to have to watch that grow.
But if you want to get in right away to some of the pricier areas, let's say in Northwest,
there's talking about McLean Gardens, Cathedral Heights, North Cleveland, Glover Park,
Wesley Heights. These are all about 15, 20 minutes away from downtown D.C. in areas of really good
neighborhoods, near the Metro system, a lot of great opportunities. You're going to find all the
[she-she 00:06:57] restaurants and stores. That's D.C. in a nutshell, just keep in mind. Really
that price to rent ratio 32 and a half times. And it basically means it's a good place to rent if
you're a renter, because homes are so expensive. So, Hey listen, if you're a landlord and you're
interested in small multi-family, hey, D.C. could be a really nice area, you just have to be careful
in regards to where you're going to be selecting that multifamily, choose near a Metro stop.
Herve Francois: Now let's go over to Baltimore,
right? Baltimore's only about an hour and a half north of Washington, D.C.,
but a completely, completely different market. An eclectic market, a dynamic market, a lot of
different things going on in Baltimore, Maryland, my old stomping grounds. Again, here population,
a little bit lower than D.C.. Population in D.C., 715,000, population of Baltimore,
575,000. Median income in D.C., remember $86,000. In Baltimore, almost half. $41,000 median
income in Baltimore, Maryland. Like I said, a lot of dynamics going on in the Baltimore area.
Herve Francois: The median income to rent an apartment in D.C.
is $63,000, in Baltimore that comes down to $53,000. Remember how we get to that number. You
take the median rent, okay? And then you multiply by three because typically landlords want you to
have about three times income in order to afford rent. So $63,000 median income to rent in D.C.,
$53,000 for Baltimore, Maryland. Okay? The median home value in D.C., we talked about it. It is
expensive. You go down to Baltimore, Maryland, $177,000. What do you think that's going to do to
the price to rent ratio? For Baltimore, Maryland that means you have a price to rent ratio of
only 10 times. The demand for rentals is lower in Baltimore because the price of the homes are
pretty affordable. Herve Francois:
Again, we're talking about a median home value over $177,000, right? You got again,
some nice Fortune 500 companies headquartered in Baltimore. Johns Hopkins Hospital, Under Armour.
I got the Steph Curry shoes right there in Baltimore, Maryland. McCormick, University
of Maryland Healthcare System. So nicely spread amongst a bunch of different industries, not one
industry makes up 20% of the jobs in Baltimore, Maryland. Right outside of downtown Baltimore,
again really some nice up and coming neighborhoods where you're going to find the millennials
doing a bunch of renting. Good school districts, nice shops, employers as well. Wyman Park,
Butchers Hill, Upper Fells Point, Guilford along with Canton all within about a 15, 20 minute
drive to Baltimore. Actually, you don't have the Metro system in Baltimore like you do have in
D.C.. both cities have a really nice downtown, both cities have really good school districts,
but again, much more affordability when it comes to home values in Baltimore, relative to D.C..
Herve Francois: Just like how D.C. has its four quadrants,
Baltimore has its interesting neighborhoods as well. You're going to see a lot of empty row
houses in Baltimore, a lot of vacant row houses. You can literally by empty row house over there
for five, $10,000. because what happens is when folks go ahead and buy a row home for
five, 10, 25, $30,000, I understand the strategy of, "Hey, let's go in and just buy this thing on
the cheap and sit on it." But it's not one that's going to be welcome in the city of Baltimore,
they're going to go ahead and categorize it to be demolished. And you're going to wind
up getting fined because you had not done anything on that particular property.
Herve Francois: So folks, I laid it all out for you,
Washington, D.C., Baltimore, Maryland. Who's going to win out? Time will tell. Both cities have made
really, really strong arguments, I'm going to let you guys decide. Punch that "Subscribe" button
at the bottom of this YouTube screen and before you do that, just type it in. Which city do you
believe is better to invest? And you know what? Throw in a sentence or two as to why you believe
either Washington, D.C. or Baltimore, Maryland is a better city to invest for you. Happy investing,
happy hunting, have a great safe weekend and we'll talk to you soon. Be well.