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I want to buy a building TRANSCRIPT

/ introduction by Makeda Phillander

guerilla / realty is Baltimore’s modern real estate company.

/ fair housing by Tomeka Givens

it’s not only your right, it’s the federal law!

Good evening everyone, I’m Tomeka Givens, a real estate agent with guerilla realty. It was hearing about the lack of fair housing practice that helped to catalyze my decision to leave my corporate America career as an Analytical Chemist to become a licensed realtor in the state of MD. I received a lot of backlash and doubt from friends and family about this decision. What my family didn’t understand was that my decision wasn’t about the money. As a single mom, that means my son gets to see me when he gets off the bus, I’m available to help with homework, projects, volunteer at his school from time to time, and participate on the PTA board.

g u e r i l l a / r e a l t yg o - g u e r i l l a . c o mg u e r i l l a / r e a l t yg o - g u e r i l l a . c o m


Second to that, I get the luxury of helping people achieve their dreams of homeownership. I get to educate while I navigate them from pre-approval to closing/settlement. I set them up to win by working and linking purchasers with credible and ethical lenders and title companies. In addition, I urge my clients to make wise choices throughout the process. By wise, I mean decisions that make sense to their situation. Once you’re pre-approved, I urge you to know your numbers and stick to your budget. I advise them when it’s time to negotiate.

What spear-headed me into pursuing real estate full-time was my love for working with people. In addition to that was learning how so many people are mistreated in real estate simply because of their race, socio-economic status, religion, color, etc.

residential segretation did not occur overnight

After the 1920s, many whites transitioned to using more institutionalized methods to fight the expansion of the African American enclaves, such as collective neighborhood action, and racially discriminatory real estate practices.

after World War II, the housing construction boom resulted in a great suburban expansion, but residential segregation continued.

African Americans were excluded from suburban communities, and racial segregation continued in urban communities. Another possible explanation for continued housing discrimination is that real estate agents are engaging in geographic steering, thus depriving parties of the choice to integrate. Geographic steering occurs when real estate agents systematically show white home buyers homes in more predominantly white neighborhoods and show minorities buyers homes only in mixed or minority neighborhoods.

Good evening everyone, I’d like to thank you all for coming to our event tonight. And the saying is true, showing up is half the battle, so you all should be commended.

Again, Welcome everyone, we are guerilla / realty, Baltimore’s modern real estate company. We’d like to thank our hosts Platform Arts Center and Maryland Art Place for supporting this event. Because of such an overwhelming response to this event, we can tell that something like this in the arts community is sorely needed, and we are extremely excited to help educate everyone who may be interested in buying a building.

I am Makeda Phillander and as you can no doubt tell from my accent I’m originally from Trinidad and Tobago. I moved to New York in the early 90’s. I lived there for ten years then I moved here to Baltimore and have been living

here for the last twelve years. I first got interested in real estate when I realized that the biggest bill I paid month after month was my rent. So, I said to myself, one day someone was going to pay me rent. I started looking into owning real estate. Myself and three other people got together and we bought a building. It had commercial space on the street level and two apartments, one on the back of the building the other on the second floor. None of us was over the age of 25 and no one had ever owned real estate before. It was not easy but it also was no impossible. So tonight we will talk about how buying a building is possible. Now before we get into all the details and the specifics we’ll hear from Tomeka Givens…


April 11th 1968 President Lyndon Johnson signed the Civil Rights Act of 1968; this act was a follow up to the Civil Rights Act of 1964

This modification expanded on previous acts and included Title VIII named the Fair Housing Act, which prohibits refusal / discrimination concerning the sale, rental and financing of housing based on race, color, familial status, national origin, religion, sex and disability. This swift action of implementing the fair housing laws was a result of the MLK assassination and the nationwide race riots and civil unrest that followed. Even with Fair Housing Laws in place, unethical practices have not totally disappeared. Baltimore’s Housing Market is still indeed segregated.


the map and chart provided on the previous page are from a City Paper article, Two Baltimores: The White L vs. the Black Butterfly, by Dr. Lawrence Brown of Morgan State University.

The segregation and racism here today is not as bold and bluntly published on signs and in newspapers like it was back in the day. Now, instead of bulletins and signs on the street, there are structural advantages in certain areas and structural disadvantages in others. To be specific, refer to the chart below:

as human beings, we all want to be in a cohesive community where the crime is low, your neighbors are friendly and there is friendly interaction with the local law enforcement.

I’m covering this topic to remind you that you have the right to look for a home or building wherever you want. The benefit of being my client is that I will ensure you have access to all active options in Baltimore’s market, having someone advocate and negotiate in your best interest; educate while I navigate you from pre-approval to settlement.


/ breaking it down by Rachel Rabinowitz

good evening, I’m Rachel Rabinowitz and I’m the broker / owner of guerilla realty. I’ve worked in real estate for the past ten years, and I also have an art business background including working for auction houses and art galleries.

Most of my work involves selling houses, but I’ve also sold; restaurants, churches, medical offices, farms, and raw land (to name a few). In real estate there is typically a divide between residential agents and commercial agents. The task of selling both residential and commercial properties is like being asked to speak two different languages. In a urban environment like Baltimore this traditional model of separate residential and commercial has limitations because there are so many interesting properties that blur the lines between those categories, in particular live / work spaces.

In creating guerilla / realty I wanted to empower my clients to consider spaces without artificial limitations. I find that creative solutions are often the best way to sell real estate, so I sought out a client base of creative professionals. Like many of you, I’m a small business owner. You all are all here because you’ve got an interest in acquiring unconventional spaces. For our purposes, the properties you might consider will fall into three different categories, and having an understanding of these categories will go a long way in your pursuit of real estate.

Previous editions are obsolete form HUD-928.1 (6/2011)

U. S. Department of Housing and Urban Development

EQUAL HOUSING OPPORTUNITY

We Do Business in Accordance With the Federal Fair Housing Law

(The Fair Housing Amendments Act of 1988)

It is illegal to Discriminate Against Any Person Because of Race, Color, Religion, Sex,Handicap, Familial Status, or National Origin

In the sale or rental of housing or residential lots

In advertising the sale or rental of housing

In the financing of housing

In the provision of real estate brokerage services

In the appraisal of housing

Blockbusting is also illegal

Anyone who feels he or she has beendiscriminated against may file a complaint ofhousing discrimination: 1-800-669-9777 (Toll Free)

1-800-927-9275 (TTY) www.hud.gov/fairhousing

U.S. Department of Housing andUrban DevelopmentAssistant Secretary for Fair Housing andEqual OpportunityWashington, D.C. 20410



/ demystify the process

“No” we won’t make any repairs, and “No” the bank can’t make those terms work.

but in a sea of “no’s” we are really only looking for that one “yes”.

The longer someone has owned a building, and the longer they’ve been trying to sell it, the more likely you are to get a “yes”.

why?

If the owner does not have a large mortgage on the property, they may be able to sell for less. If the owner has owned the property for a long time, they may enjoy selling the property to someone who has a dynamic future usage in-mind. If the owner has a property for which there is a limited audience – you may be the only person knocking on their door. Yes, they want to sell to you. Yes, you are the buyer they’ve been waiting for.

Until you are working with the right people and pursing the right properties you may be fated to sit on the sidelines. And this type of information is not available on zillow – it’s a matter of research + experience + boldness. In real estate, if you don’t ask, you don’t get…period.

back to the Mount Everest analogy, those climbers who make it to the summit of Mount Everest probably have experience climbing other mountains.

The good news is in real estate, you’re a “player” once you acquire your first property. And if you are a savvy player, you can trade up. Consider having your first property be a manageable property.

As a resource for you to get the process started, we’ve got an “I Want To Buy a Building” next steps guide. This “I Want To Buy A Building” guide will break the process down into steps to get you ready to proceed with your acquisition. You would not climb Everest without supplies; you should not be searching for real estate without preparing for the journey ahead.


/ the steps

step 1 / know your numbers

what are your current housing costs? That’s rent, insurance, utilities, maintenance, parking – anything that’s a regular expense associated with your residence.

what is your current income? No matter if it’s a steady bi-weekly paycheck, or if it’s a compilation of revenue streams including; temp gigs, part-time jobs, and staggered sales – you’ll need to be able to access this information. Earning cash hustling on the side? Keep that info to yourself unless you are declaring the funds as taxable income.

how is your credit? Purchasing property involves doing business with other people, including property owners and lenders. They are going to want to work with someone in reasonably good standing. If you have “bad” credit or simply not enough credit, don’t let it stress you. This is something that can be cured.

are you current on your taxes? This is your ticket to ride. If you have not paid your taxes, you need to get this ironed out. You won’t get a loan from a bank without being on the up-and-up with Uncle Sam. And you won’t get a loan from a private seller either. Speaking of taxes, there are some nice homeownership advantages from a tax perspective. Consider meeting with an accountant to discuss your options, especially if you plan to purchase a live / work space to be partially used by your business. The money you spend on their professional analysis could save you money for many years to come.

what do you have available for a down payment? Having as little as $1000 can be enough. In many cases you’ll want to have at least 3.5% of your targete d purchase-price available. So if you are looking at a $100,000 property, that’s $3,500.

coming up short on funds? Speak with your agent about Baltimore Housing grants and incentives. Do you have a family member who can help you out with the down payment? This is called a “gift of funds” and its something that many 1st time homebuyers use to make the transaction work.

step 2 / know your target

what type of property will work best for you?

residential: If you are making the transition from renting to owning, pursuing a residential property is going to be the easiest type of property to secure. Why? Interest rates on residential loans are lower than commercial loans. The lower the interest rate, the more property you can afford. Residential loans are easier to obtain than commercial loans. Grants and incentives such as the Maryland 1st time Homebuyer discount are tied to the purchase of residential property.

mixed-use residential: By definition mixed-use residential properties have up to four units with the street-level unit having a commercial usage. The classic example is a corner carryout restaurant with owners who live in an apartment above their business. If you need your property to be both a formal residence for you and a retail or office space for your business, a mixed-use residential may be the way to go. These properties allow for owner-occupied residential financing. You’ll need to occupy at least 25% of the property as your residence, but you can lease the other 75% of the building. These are the classic live / work spaces. In addition to residential “R” zoning, these properties are also sometimes are classified under business “B” zoning and Office-Residential “OR” zoning.

its good to be able to quantify how big a challenge you are creating for yourself.

If you are of modest means and you want to buy a massive building – that’s akin to climbing Mount Everest. I’m not here to dissuade you or to tell you its impossible; I simply want you to be cognizant of the fact that’s going to require a tremendous amount of effort on your part. After all, if it were easy everyone would do it. But using the Mount Everest analogy – people who climb the mountain train for it. They have setbacks, and they make sacrifices. However when they reach the summit, it’s incredibly satisfying.

what are some of the challenges of buying real estate? being told “no” is a big one.

“No” we’re not interested in your offer; “No” we won’t sell it to you for that price.

commercial: The sky is the limit for the type of property you might encounter; warehouses, theaters, restaurants, hotels, etc. These properties can be a great fit for a creative client. The first consideration is zoning. How do you intend you use the property? If your planned usage is different than the current usage, you may be in a position of needing a variance. Commercial properties are often purchased using cash. Commercial loans are an option, but you’ll want to take into consideration that commercial loans typically have higher interest rates (i.e. higher payments) than residential loans. If you are buying a fixer-upper commercial property, keep in mind that the costs of upgrading the systems may be a significant investment. Commercial properties are often sold as-is.

step 3 / assemble your team

when it comes to purchasing real estate, you are going to want to “roll deep”. let’s start with you: Are you purchasing solo? Do you plan to purchase with a significant other? Are you purchasing as a group / business? Do you plan to have a family member serve as a co-signor?

next let’s build you team core:Buyers-AgentMortgage Lender Title Company / Settlement Attorney

property condition professionals:Home Inspector(s) / Building InspectorLicensed Contractors – HUD approved licensed contractors

optional additions:AccountantReal Estate Attorney (for commercial transactions)Non-profit financing specialist*Engineer / Architect

step 4 / make a plan

With an understanding of your numbers and your target, and the assistance of your team, the next step is making a plan. Finding the right property can be a matter of luck and timing, so being ready proceed is your best assurance that you won’t miss out on any opportunities. You’ll want to continue to hone your focus; otherwise you’ll exhaust yourself looking at too many properties in too many locations.

questions to consider in formulating your plan:

Are you willing to “do work” i.e. renovate? If so, how much?What is your timeframe? Are you currently renting? Do you have another property you need to sell?How long do you plan to own your new property?


/ traditional vs. creative financing

here with us tonight we’ve got two exceptional financing resources for your consideration:Jon Wald of Primary Residential Mortgage and Toni Davis Spivey of BB&T Bank.

Jon Wald is a lender who understands live / work spaces as well as being an expert in renovation loans.

Toni is a community mortgage specialist and loves working with 1st time homebuyers. – These lenders who are ready, willing, and able to do loans for residential and mixed-use residential properties. BB&T Bank also has a commercial lending division.

Both of these lenders are here because they’ve impressed us with their knowledge and tenacity.I know they are both eager to speak with all of you – whether this evening or in the weeks to come.

if you’ve never applied for a mortgage, start with a residential application (again this does include mixed-use properties).

If the conclusion is that you aren’t approved for a residential loan, you are not likely to be approved for a commercial loan (broadly speaking).

but lets say either you aren’t approved for a mortgage or you fall for a building on which a bank is not likely to give you a loan…. what happens then?

Your next consideration should be seeking out a property that may allow owner financing. Owner financing means that you can be given a loan directly by the seller (property owner). Typically sellers who don’t have a lot of debt on the property, and frankly are having a hard time finding a buyer give these loans. These can be the one true way for a non-traditional applicant to get a loan that has similar terms to a mortgage.

If you are hopeful that an owner-financing scenario is going to be part of your path to buying a building, please keep in mind that the need for you to present yourself as a fiscally responsible person is important. This can include both evidence of your ability to make monthly payments, as well as perhaps a business plan to show your intended use of the property. Owner financing loans can be a short-term solution to allow you to get a property and your own operat-ing capital in a position where a bank would be willing to give you a loan (called a refinance).

I worked selling real estate throughout the most recent housing crisis (as an auction specialist), and this was a time where it became much harder to get a loan, so creative financing because one of the few paths available for people who had been turned down for a loan. This was also a time of foreclosure auctions, short sales and other distress owned scenarios. So it may seem like a challenge to purchase real estate now – but I can assure you it’s actually much easier than it’s been in many years. Now is a genuinely good time to buy real estate. Baltimore City is relatively cheap, and there is something available in almost every price-point – especially if you are open to undervalued locations.

If you require owner financing, the amount of properties you have to choose from will be limited, but keep in mind my previous suggestion that what matters is that you find a way to “be a player”. You may not be ready to secure the dream home, but that does not mean you should sit on the sidelines.

By the way, many 1st time buyers make the mistake of assuming they are looking for their dream home. What you are really looking for is a space where you’ve got chemistry and the numbers are feasible. Your dream-home purchase is more likely to be property #2.



/ properties by David Tomasko

My first real estate “love” was my grandparent’s home. It was custom built by my grandfather to accommodate my 4’ 10” sized grandmother, with lowered cabinets, countertops, door handles & windows. This example illustrates just how personal it can be, both of the heart and of the wallet, to invest in real estate. And it is just that: an investment; an investment in your future.

now, you may have asked yourselves: why “go guerilla,” as we like to say, aside from the fact that we asked you to?

Let me give you a few reasons, by providing some examples of our past client success stories:

/ 116 West Mulberry Street

This building previously housed law offices. Its current owner, Lydia Pettit, who is part of the reason we are here today, converted the property.

It now boasts of twelve artist studio spaces, a contemporary art gallery, and a community space.

Rachel and I first met with Lydia and her parents in a conference room on Halloween. During this meeting we asked her, as we may ask you one day, “what are your goals, and why are you doing this?”

Lydia expressed that as she was soon to graduate from MICA, and she feared losing what that experience offered: community support, comradery, and critiques. She wanted to establish a space not just for herself, but also for others in her position, to help ease the transition from being a student to being a professional.

An anecdote to illustrate that in real estate, there is always a bit of the unknown, an underground tunnel was discovered during basement renovations leading underneath Mulberry Street to who knows where, as we were all hesitant to crawl through it. I believe it’s still down there if you want to take a look.


hello everyone, and thank you for joining us.

my name is David Tomasko, and as you may have guessed by now, I am a real estate agent with guerilla / realty.

Prior to my real estate career, for nearly a decade, I honed my construction skills as a partner in a contracting business, but you may recognize me for a different reason, as I have spent the last 15 years or so at various art openings, talks, performances, and events too numerous to mention.

I have likewise spent a significant amount of time remodeling my own home with my wife, Amy Raehse, who you may also know. During that process, we survived tar bubbling up from refinished floors, living with no bathroom for six months, and returning home to discover bats flying around our second floor bedroom. In short, buying real estate is not for the faint of heart.



/ 713 North Howard Street

This building serves as a multi-use space for its current owners, including two floors of residential space, plus a large artist studio and soon to house a travel agency in the commercial zone, all of this while hosting the best disco ball in the city. These clients expressed their desire to consolidate multiple aspects of their lives, all under one roof.

/ 426 West Franklin Street

This building previously housed a business selling commercial display racks and had been in the seller’s family for decades. With new ownership, it is currently under renovation and will consist of leased commercial space on the first floor & basement, a 2-bedroom apartment on the second floor, and a 1-bedroom apartment on the third floor. The owner of this property, a sculptor, had a desire to renovate, and create an income generating space to supplement his revenue for years to come. The building itself, originally a carriage house, is believed to have been constructed in the late 1700’s, and has beams as wide as 12” thick that were hand-hewn.

phase one phase two

phase one phase two


/ 1019 Cathedral

This building previously housed a family run flower shop, however it is now the new location of Casewerks, which focuses on museum archiving and displays for works of art, archival materials & casing for special collections, including recent renovations at the Baltimore Museum of Art. This client’s needs included an office, conference room, show room, garage, as well as residential space to house clients in town for multiple days while discussing plans for their next project. It is perhaps our best example of a building uniquely pre-suited to our client’s needs, as only cosmetic renovations were necessary.


/ 2721 Greenmount Avenue

If you are looking for something that’s rawer, this warehouse contains a 6500 square foot area with a loading dock. Previously home to an upholsterer for stadium seating, including the old venue for the Orioles, Memorial Stadium. It is now currently renting studios to artists and practice space for bands.

as you may have noticed, each one of these properties is as unique as it’s owner, chosen specifically to meet each buyer’s objectives.

Two of these transactions involved owner financing, one was acquired through the foreclosure process while using a challenging renovation loan offered by Primary Residential – working with Jon Wald, while the other two were purchased with cash. I mention this to demonstrate how the method of acquiring the property may change depending on the properties condition, zoning, and preferences of both the buyers and sellers. You most likely will not make all these decisions prior to your search, but rest assured neither had the clients mentioned earlier.

You may also recognize that these properties all fall in to an unconventional category. This is not a coincidence, unconventional properties tend to have less competition, as the buyer pool is smaller, and may have options for owner financing, as the same families may have owned many of the properties for decades.


the point I’m trying to emphasize, is that guerilla / realty believes in real estate without limits, and so should you.

So, enough about past successes, we know why you are really here, to find out what can we do for you? Here are a few examples of properties that are currently available in Baltimore that may pique your interest:

/ 114 North Howard Street

located in the Bromo Arts District, and currently listed at $280,000

With 20% down, and a 6% interest rate on a commercial loan, your monthly payment would be approximately $1,925.00, but please keep in mind; everything in real estate is negotiable.

This property, like so many other properties in Baltimore, was originally two separate buildings that have been merged in to one. It consists of commercial space on the 1st floor, currently leased for $2,500 per month, which would drastically reduce your expenses. The remaining space is raw and unfinished, but does include the original elevator gears that helped raise goods from one floor to the other. It has great access to the Light Rail, and the downtown corridor.



/ 2101 Bank Street

located in Upper Fells Point, and listed at $399,000

With 20% down, and a 6% interest rate on a commercial loan, your monthly payment would be approximately $2,800.

It is currently home to the David J. Weber Funeral home, and has been since the family first opened its doors in 1920. It is actually 3 townhomes that have been combined over time, creating a 32 foot wide space. It contains a variety of viewing spaces, preparation areas, and even a lift carrying whatever items necessary, from the first floor, to the second floor. This home would be ideal for studios, with wide door ways and extra wall space.


/ 812 Park Ave

located in Mt. Vernon, and currently listed at $925,000

With 20% down, and a 6% interest rate on a commercial loan, your monthly payment would be approximately $6,500. If that number sounds beyond your reach, please consider the possibilities that with over 7,800 square feet, you would have the opportunity for perhaps as many seven tenants. There is also parking in the back for multiple cars.

Most recently the former offices of the City Paper for approximately 12 years, this property could also be restored to its original glory as a single family residence.

Three entirely different properties, with three entirely different strategies.


/ properties with Makeda Phillanderlet’s go shopping

108 Saratoga Street Asking price is $284,000

This is a mixed use building with commercial space on the street and basement levels and residential space on the two upper floors. The building was featured in an article in the Daily Record back in June and it dates back to the 1920’s and was once used as a boarding house for seamen needing temporary housing while their ship was in port.


breakdown/layout

The Lower level has commercial space: 400 sq ft plus 1/2 bathMain level Salon: 250 sq ft plus 1/2 bathMain building first floor common areas: 393 sq ft dining/ living space, 72 sq ft kitchen space, and front foyerUpper levels have ten 128 sq ft rooms, former boarding rooms, for a total of 1280 sq ft


next up is a renovated fire house close to Howard park

it’s located at 5200 Liberty Heights listed at 247,000

This is a really cool space. The upper level has two bedrooms each with its own bathroom. And they are located on opposite ends of the building. The Bedroom to the front has a tiny balcony that looks onto liberty heights. The living space between the bedrooms is open and grand and has a totally redone kitchen. Soaring high ceiling and original built in bookcases.

Now the lower level is just a huge workshop space. It can easily be reconfigured in to studio space and can even be a source of income to help offset the mortgage payments.

Just to give you an idea and these numbers are strictly estimates - with a 30 year loan at 4% your mortgage payment which includes PITI (That’s Principle, Interest, Taxes and Insurance) is $1860 / month.

Renting out two studio spaces at $500 each per month give you $1000 in income so now your out of pocket costs are $860/ month.


next is a residential property in Station North.

This is quite affordable at $164,000. I like how the brick is exposed throughout the entire house on both levels from front to back. It has three bedrooms and a finished basement. Another nice feature is that the washer and dryer are on the second floor.

This house requires no work at all so if you are not handy or just want to move in an enjoy you new home something like this would work. This station north neighborhood is an up an coming area and may prove to be a great investment in the future but for right now its also a really lovely place to call home.

www.go-guerilla.com

for inquiries or to speak with a guerilla agent, our contact information is below:

rachel rabinowitz / [email protected] makeda phillander / [email protected] tomasko / [email protected] tomeka givens / [email protected]

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