Hello Forum! My name is Dave and I have been listening to BiggerPockets for the past several months and I am hooked. I am excited about REI regarding rentals and would like to make my first purchase in Houlton Maine or Northern part of Maine. I would love to connect with folks who have experience in this market area. Looking forward to hearing from everyone. Thanks.
You can find pretty good homes that can be purchased for cash in the $3000 to $8000 range. Then rent to own with $1500 or more down and payments of $400 - $500 a month for 2 to 5 yrs depending on how good the unit is. If a small park (under 30 units) could be purchased, you can add the lot rent to the equation. I own parks and look for trailers on private land. Then move the trailer to my park and hold paper on the trailer and the land separately. I would think in Houlton area you could find the units on land for under $15000. Depending on area resell land for similar terms as the trailer and do as above for trailer. The land is already set up with well, septic, utilities and mobile home pad so it should be marketable.
Bangor has many more possibilities but if your going to try to make a living on apartments I would caution on anything less than 6 units because the price per unit is usually to high to make much money and still cover turn over and repairs. The more units you can buy under one roof the better off you will be. Run the math on a per unit basis on apartments compared to a trailer park on the net income. On a park, one full time maintenance man can handle 100 pads if you don’t own trailers and probably 25-30 if you own the units.
Dave i’m in Maine but as you know things can be quite different “up in the county” so not sure how much help I can be. For most places in Maine you can’t let appreciation factor in because it doesn’t. Make sure you get the right cash flow so that some time you will be able to exit.
Make sure you screen tenants well and offer a good, solid, and clean product. I allow dogs, screen the dog just as much but this has worked well for me
Dave I am familiar with the county. You have to be careful as the population is not growing and therefore vacancies will be higher and longer so don’t make purchases figuring on being full. I don’t know what your interest or financial situation is but if I were starting out I would look at mobile homes up there. Buy and rent to own. Sell the payment amount rather than the total price and you will recoup your money very quickly and establish a residual. Get on Keenan auctions list as there are homes there regularly. Also look for bank owned in the area as they may go at large discounts. Note vacant properties as you ride around and track down the owners. If they are private they may be owned by someone who is now out of state and wants to unload.
@ Bernie and Ed. I am a healthcare provider and a transplant from MN. Been living in "the county" for over one year. Things are very different up here. I am in good financial shape since my wife and I are both frugal and able to save 50% of my salary, even though we both have student loans and a mortgage to pay. My wife stays at home to watch the kids and I work full-time. My interest is in 2-4 units rental property to establish passive income. I am very hesitant to move forward since I don't know enough about the market up here in Houlton. There are several 2-4 units multiplex available and they are they are built in the 1900s. It seems like they have been in the market for a year or more. When I do the four square method, the COC on several of these property is more than 20%-50% with conservative numbers, but I am very concerned about vacancies since the population is aging and not growing and there is no economic recovery up here. I am also not sure what my exit strategy would be in the future. I am a newbie and afraid I might make the wrong choices.
@ Ed. Mobile homes seem like an interesting option. Can you explain on this "Buy and rent to own. Sell the payment amount rather than the total price and you will recoup your money very quickly and establish a residual."
The rental market is much stronger in the Bangor area as compared to Houlton. Brewer, just across the river, is another solid area. There are some decent units on the market there now. What sort of timeframe would you expect to have for owning them? Are you a locum who will be leaving in a year or two? Do you plan to set down roots? Do you want to still own it after you leave and have someone manage it for you? I'm an agent and could send you some disclosures if you're interested.
I lived in Bangor for 11 years there is more options there in the "twin cities" but still I would not say the area is growing.
I invest in central Maine which by the way isn't anything like southern Maine. I have found the following:
1) buy right in a reasonably stable area (for the area)
2) I will only buy properties that can be nice...I am willing and want to do the value add but there are lot of properties where you could "improve" but you still have a set of units that have a poor layout...since the traffic is not tremendous there you want to take the time to find the right tenant but if the apartment has a crappy layout (which many single converted to multi do) they will leave a year later for a better livable layout
I have found units that I could put in good shape with a layout that is actually a livable layout -- this is unique and sought after in areas which may otherwise be depressed. (no walking through a room to get to a room, no larger bedroom but tiny living room, no bathroom downstairs / bedrooms up...things like that). If you can find property where rent can be near the top of the market but the unit is clean and comfortable there are very few other options for tenants and they stay. I've also found with the above and the ability to have a dog is additional bonus for the qualified tenant (I'm talking about someone who takes care of, and cares for their dog, not somebody who ties it to a chain in the backyard). no cats!
I'm starting to consider MH parks and there are several that might be workable "in the county" but that is new ground for me so can't add value to that part of the discussion
b
You can find pretty good homes that can be purchased for cash in the $3000 to $8000 range. Then rent to own with $1500 or more down and payments of $400 - $500 a month for 2 to 5 yrs depending on how good the unit is. If a small park (under 30 units) could be purchased, you can add the lot rent to the equation. I own parks and look for trailers on private land. Then move the trailer to my park and hold paper on the trailer and the land separately. I would think in Houlton area you could find the units on land for under $15000. Depending on area resell land for similar terms as the trailer and do as above for trailer. The land is already set up with well, septic, utilities and mobile home pad so it should be marketable.
Bangor has many more possibilities but if your going to try to make a living on apartments I would caution on anything less than 6 units because the price per unit is usually to high to make much money and still cover turn over and repairs. The more units you can buy under one roof the better off you will be. Run the math on a per unit basis on apartments compared to a trailer park on the net income. On a park, one full time maintenance man can handle 100 pads if you don’t own trailers and probably 25-30 if you own the units.
@ Ed and Bernie. Great advice and info. Thanks!
@ Tim. Time frame to owning them would be around 5-8 years or longer if I could find the right property management. I am not a locum tenem provider. I am planning to be in Maine for at least 10 years. I am looking for 2-4 unit properties that are close to the hospitals or in a good stable area for Bangor or Brewer. I like to market to traveling nurses, locum tenen providers or medical residents/interns. I am a newbie and don't want to purchase anything too expensive. I like to start small and see how it goes. You can send my some disclosures. Thanks.