1. Pick a strategy first.
"Real estate investing" is four different businesses. Pick one and learn it cold before adding another.
Buy and hold (long-term rental)
Buy a property, finance with a 30-year mortgage, rent it. Tenant pays the mortgage and (hopefully) generates monthly cash flow. Returns come from cash flow + mortgage paydown + appreciation + tax depreciation. Time horizon: 7–30+ years. Capital required: 20–25% down + closing + reserves. Risk: tenant turnover, capital expenses (HVAC, roof), market downturns.
Fix & flip
Buy distressed, renovate in 3–6 months, sell at retail. Returns are short-term capital gains taxed as ordinary income. Capital required: 15–25% down + 100% of rehab + holding costs. Risk: ARV miscalculation, rehab overruns, market shift during hold.
BRRRR (Buy, Rehab, Rent, Refinance, Repeat)
Hybrid of flip and hold. Buy distressed with hard money or cash, rehab, lease up, refinance into a 30-year DSCR loan that recovers most or all of your initial cash. The capital recycles into the next deal. Hardest strategy to execute well — every step has to land.
Wholesale
Find off-market distressed properties, get them under contract, assign the contract to another investor for a fee. No money down, no rehab, no holding. But Maryland requires a real estate license to advertise contracts to the general public — wholesalers operate in a narrow regulatory band. Talk to Samantha before you start.
2. Underwrite conservatively.
Most investors lose money on their first three deals. The reason is always the same: they were too optimistic on rents, ARV, rehab, or vacancy. Bake in margin.
The numbers that matter
- For rentals: Cap rate, cash-on-cash return, GRM, monthly cash flow, the 1% rule. Use the investment ROI calculator.
- For flips: The 70% rule (max offer = ARV × 70% − rehab), all-in cost, net profit, ROI on cash, holding period.
- For both: Reserves. Plan to hold $10,000+ liquid per door at all times.
Where new investors get burned
- ARV inflation: Pulling comps from a half mile away on a different street. Use comps within 0.25 mi, sold within 90 days, similar size and condition. No exceptions.
- Rehab underestimation: Always add 15–25% contingency. Hidden plumbing, electrical, and structural issues love to show up after demo starts.
- Rent assumption: Don't trust Zillow Rent Estimate alone. Pull 3 active listings + 3 leased listings within 0.5 mi in the last 60 days.
- Vacancy & turnover: Plan for 8% vacancy on B-class single-family in the DMV. C-class can hit 12–15% in turnover-heavy submarkets.
If a deal only works in your spreadsheet at the optimistic numbers, it's not a deal — it's a hope. The deals you make money on look obvious before you sign the contract.
3. Investor financing options.
Conventional investment loans
20–25% down, full income documentation, primary credit qualifies. Best rates available to investors. Limited to 10 financed properties per Fannie/Freddie guidelines. Slow to close (30–45 days).
DSCR loans
Debt Service Coverage Ratio loans qualify based on the property's rent vs PITI — not your personal income. 20–25% down, rates ~1–2% above conventional, no DTI limit. The workhorse of buy-and-hold investors. Ideal for self-employed, multi-property investors, or BRRRR refis.
Hard money
Asset-based, short-term (6–24 months), 8–12% interest, 1–3 points origination. Closes in 7–14 days. Designed for flips and BRRRR acquisitions. Most lenders want 10–20% down or 65–75% of ARV (whichever is less) and finance some or all of rehab on draws.
Private money
Friends, family, or HNW individuals lending against your deals. Rates negotiable (often 8–10%), terms negotiable, no underwriting bureaucracy. Best for repeat deals where you have a track record. Always document with a promissory note and deed of trust.
HELOC / cash-out refi on primary
Pull equity from your primary residence to fund down payments on investment properties. Cheapest capital available, but you're putting your home at risk. Use carefully.
4. Where the deals come from.
Retail listings on Zillow are not deals — by the time you see them, fifty other investors have run the numbers. Real deals come from:
- Off-market via wholesalers: Build a list of 5–10 active Maryland wholesalers and stay top-of-mind. Pay quickly when deals work.
- Direct mail and cold call: Targeting absentee owners, code violations, pre-foreclosure, probate, and tired-landlord lists. Slow build, high payoff.
- Auction (foreclosure, tax sale): Anne Arundel County, Baltimore City, and Prince George's all run regular auctions. Cash-only and as-is, but margin can be huge. Ask Samantha about Maryland tax sale specifics.
- MLS — Days on Market filter: Listings with 60+ DOM, price drops, "as-is" language, and estate sales. Most retail buyers skip these.
- Driving for dollars: Identify distressed properties yourself. Look for overgrown yards, deferred maintenance, full mailboxes, boarded windows. Skip-trace and contact the owner directly.
- Agent partnerships: Build relationships with agents who source pocket listings and pre-listings. Samantha runs an investor list for exactly this.
5. Execution — where deals die.
The contractor problem
The single biggest reason flips fail is contractor execution. The wrong GC will burn 20% over budget and 60 days over schedule. Vet hard:
- License verified through Maryland Home Improvement Commission (MHIC)
- Insurance certificate naming you as additionally insured
- 3 references from completed flips in the last 12 months — visit two of them
- Written scope of work + line-item budget signed by both parties
- Draw schedule tied to milestones, never lump sum upfront
- Lien waivers signed by GC and any subs at each draw
Permitting
Anne Arundel and Howard County require permits for almost everything beyond paint and flooring. Working without permits voids your insurance, complicates the appraisal, and can trigger stop-work orders that add 30+ days to your hold. Pull the permits even when the contractor pushes back.
Hold timeline discipline
Every additional month on a flip costs you carry (interest + utilities + insurance + property tax) — typically $2,000–$4,000/month on a Maryland flip. Set a hard 90-day rehab target. If you slip past 120 days you're losing the spread.
6. Exit — plan it before you buy.
For flips
List the moment your final inspection signs off. Pre-stage during punch-list week. Photos shot the day after staging. On MLS within 5 days of completion. Maryland buyers in your price band are watching new listings hourly — don't let momentum fade.
For rentals
Hold long-term unless: (a) the market is at a clear cycle peak, (b) the property's cap rate has been compressed by appreciation to under 4%, or (c) you can 1031 exchange into a higher-cash-flowing asset. Selling a stabilized rental usually means re-paying transaction costs you've already amortized — the math rarely favors selling unless something has changed.
1031 exchange
Defers all capital gains tax when you reinvest sale proceeds into a "like-kind" property within 180 days (45 days to identify). Powerful tool for stepping up portfolio quality without paying tax. Requires a qualified intermediary and strict timeline compliance.
7. The five mistakes that kill new investors.
- Buying in a market they don't know. If you can't drive the neighborhood weekly, don't invest there.
- Underestimating rehab. Walk every job with a contractor before contract. Add 15–25% contingency.
- Overestimating ARV. Pull conservative comps. Your appraisal will be conservative — be conservative first.
- Skipping reserves. One blown HVAC, one tenant skip, one mid-flip surprise — and an under-capitalized investor is forced to sell at the worst time.
- Hiring the cheap contractor. The most expensive thing in a flip is the wrong GC. Pay 15% more for someone with proof.
Samantha works with investors at every level — from first deal to fund-scale operators. See her investment portfolio & pipeline →
Common questions.
What is the 70% rule in real estate flipping?
The 70% rule says your maximum offer on a flip should be: (After-Repair Value × 0.70) − rehab cost. So a $400,000 ARV property needing $40,000 rehab maxes out at $240,000 offer. The 30% spread covers acquisition costs, holding costs, sale costs, and your profit. In tight DMV markets like Anne Arundel and Howard, experienced flippers will sometimes go to 75% with strong comps and contained rehab — but 70% is the safe screen.
What is a DSCR loan and when should I use one?
A DSCR (Debt Service Coverage Ratio) loan qualifies based on the rental income of the property — not your personal income. The lender wants the property's rent to be at least 1.0–1.25x its monthly PITI. DSCR loans are ideal for self-employed investors, anyone past Fannie's 10-property limit, or BRRRR refinances. Rates typically run 1–2% above conventional with 20–25% down.
Is BRRRR still viable in 2026?
Yes, but harder than 2020–2022. Higher rates make refinance math tighter, and DMV appreciation has compressed the spread between purchase + rehab and ARV. BRRRR still works on properties bought 25–35% under ARV with disciplined rehab. The investors making it work in 2026 source heavily off-market and have tight contractor relationships.
Do I need an LLC to invest in real estate in Maryland?
No, but most experienced investors hold rentals in single-asset LLCs for liability isolation. Maryland LLC formation is straightforward ($100 filing fee, $300 annual personal property return). Talk to a CPA — there are tradeoffs around due-on-sale clauses for properties with conventional financing.
What's the minimum cash to start investing in Maryland real estate?
Realistically, $40,000–$70,000 to start a single buy-and-hold deal: 20–25% down on a $200,000–$280,000 property, plus closing costs and reserves. Hard money flips can start with $30,000–$50,000 cash plus the loan. House-hacking (FHA owner-occupied 3.5% down on a 2–4 unit) lowers the barrier to under $20,000.
What are the best Maryland markets for investment property in 2026?
It depends on strategy. For cash-flowing rentals: Baltimore City (B and C class), Glen Burnie, Pasadena, and parts of Prince George's still pencil. For appreciation plays: Anne Arundel waterfront-adjacent, Howard, and Severna Park lead. For flips: tired listings in Crofton, Bowie, and Capitol Heights are fertile. Samantha runs deals in all of these — see the neighborhood guides for current pricing.