Landlords Roll the Dice : Possible pitfalls of buying abandoned unseen auction properties

#Baltimore #CharmCity #RowHome #RealEstate #Construction #RentalProperty #Landlord

The thought of being a homeowner, owning your own property, or being a landlord at the purchase price of pennies on the dollar, can be an exciting adventure to take on. There is much planning that should be done prior, especially if the property is being sold unseen because sometimes even the cheapest property can turn into the biggest money pit. In a city like Baltimore, which has an abundance of empty properties. Empty properties can directly impact crime rates and the standard of living,

There is also the huge responsibility of rehabbing these properties the proper way so tenants are kept healthy. Antonio Loffredo has over 40 years of experience within the construction industry in various areas, but most specifically cost and planning of construction, along with being a landlord for the last 15 years. Loffredo is also the owner of the Loffredo Consulting Group, which he started on his own out of college at the University of Connecticut, 40 years ago and has grown to be the corporation it is today.

Antonio's LinkedIn has a plethora of information on his background and also projects that can be bid on. These properties that he purchases are sometimes listed for sale there or contractors to bid on the work on them. Here is his most current project in North Carolina he is taking bids on. So

Loffredo explains how, depending upon what is wrong inside of the home even a property that is almost being given away, can be more of a headache and money pit, than it would be worth. The home is most likely a rowhouse, due to the abundance of up for auction within the city of Baltimore. There is a huge number of vacant rowhouses in Baltimore. According to Baltimore City "As of February 15, 2022, there are 14,989 vacant properties and only 1245 of those are owned by the City government."

“There is the huge problem of dealing with lead and asbestos that has to be thought of when purchasing a property that was built over 100 years ago. That property may not have had real renovations done since the 70s. You also factor into it how long it has been sitting empty, how many of the properties around it are empty, along with how well it has been closed up. And lastly, if there is damage from floods or fire, that can also include water damage. This is where you have to balance, the cost of renovation to conscience, especially if you’re going to do it as a landlord,” stated Loffredo

Along the pathway of the adventure, the first step will be finding a property. “Some may jump out at you right away and get you super excited, but always do a little research and plan for the worst,” Loffredo went on “the high likelihood of lead-based paint being used in these homes are high.” Anything built before 1978 will contain or have contained lead paint. Most rowhomes in Baltimore are easily 100 years old, lead paint was a common choice due to its colors and durability, along with its affordable price turned out to be an enormous health hazard.

In 1978 Lead-based paints were banned for residential use in 1978. They are now recognized as a severe health hazard, particularly for children. According to the United States Center of Disease Control, when lead-based paint deteriorates, it forms toxic dust and chips, which can contaminate the air and surfaces. Ingesting or inhaling lead particles can lead to lead poisoning, causing developmental issues, learning disabilities, and behavioral problems, among other health complications.

“Lead is just one of many issues to be thought of beforehand when considering buying one of these properties. It is one of the first things I consider and do because it is the base of the house. How much lead is in that house can really factor into if I have to completely gut it or take the chance of encapsulation. Most landlords, especially if they want everything re-done up to code, definitely if planning on going section-8 housing for tenants, best bet would be to completely gut these type of properties” Loffredo closed by saying “ I personally in good faith and on my good conscience couldn’t put somebody in a property that I knew wasn’t 100% healthy. There is also the huge risk I take on by doing so of possible future legal ramifications, that can empty my pockets. That is also not worth a chance at taken.”

The block of Druid Hill Avenue, between North Avenue and Gold Street, which is almost entirely vacant, shows the basic layout of a block of row houses, in Baltimore City.

Photo: Kimberly Angle,