ix & Flip in Baltimore, MD: Basement Conversion & Waterproofing

The Investor Scenario & Opportunity

A local real estate developer contracted an off-market brick rowhouse in the Hampden neighborhood of North Baltimore. Positioned near 36th Street with fast transit access to Johns Hopkins University and Downtown Baltimore, Hampden continues to experience strong demand from buyers seeking updated housing near local retail corridors.

The seller was a motivated out-of-state owner seeking a fast liquidation to clear outstanding estate obligations. The developer negotiated an aggressive purchase price of $115,000, contingent on a six-day settlement. Comparable renovated rowhouses in Hampden with finished lower levels were consistently selling near $245,000, creating a strong margin opportunity for a targeted renovation.

The Strategy & Capital Requirement

The primary objective was rapid execution while preserving working capital across multiple active job sites. The developer was running two active renovations in East Baltimore and needed to avoid locking up liquid cash in long-term equity allocations.

To maintain necessary cash flow for subcontractor payroll and material deposits, the developer required a direct financing partner capable of closing in five business days while funding 90% of the purchase price and 100% of the construction scope.

The Henry Solution (Loan Mechanics & Underwriting)

Hard Money Henry underwrote the loan using direct real estate equity and local sub-market comparables. Our internal team evaluated recent Hampden rowhouse sales within 24 hours, completely waiving the requirement for a third-party appraisal.

We issued a firm commitment letter and structured a $156,100 total loan facility. This covered 90% of the purchase price ($103,500) plus 100% of the renovation scope ($52,600). Construction capital was escrowed and released across three milestone draw inspections as work was completed. The transaction funded and closed in five business days.

The Financial Win & Outcome

The developer executed a focused 60-day renovation scope. The central value-add strategy focused on converting an unfinished, damp basement into functional living space. The investor allocated $18,500 of the $52,600 budget to excavate the lower level, install an interior French drain tile system with a sump pump, apply wall waterproofing, and build out a finished family room with a secondary half-bathroom.

The remaining budget funded fresh interior paint, refinished original hardwood flooring, and updated kitchen fixtures. Expanding the usable finished square footage removed a primary buyer objection, generating a full-price purchase contract within 10 days of listing.

• Purchase Price: $115,000
• Rehab Budget: $52,600 (Basement conversion, interior drainage system, half-bath buildout)
• Financing & Holding Costs: $9,500
• Selling Costs (6%): $14,700
• Total Cost Basis & Expenses: $191,800
• Final Sale Price: $245,000
• Net Profit: $53,200

Key Takeaways for Local Investors

• Lower-level conversions maximize urban living space. Excavating and waterproofing unfinished rowhouse basements adds usable square footage that pushes resale pricing to the top of the sub-market range.
• Sub-market underwriting accelerates closing speed. Partnering with a lender who understands neighborhood valuation dynamics eliminates third-party appraisal delays on off-market deals.
• 100% construction financing preserves operational flexibility. Structuring debt to cover total renovation costs allows active developers to maintain liquid reserves across concurrent active projects.

Planning a rowhouse renovation or basement conversion project in Baltimore? Submit your property address at hardmoneyhenry.com/apply for a 24-hour commitment letter.