Best Way to Find Off-Market Four-Unit for Sale in Portland?

Question

Hi BP,

My husband and I are both in our 20s and work remotely in the tech sector. We have been renting on the peninsula for the past 6 years, and recently we decided to look into buying and owner-occupying a multi-family property. Since this is going to be our first purchase, we are specifically interested in buying a four-unit (to maximize leverage through FHA), preferably on the peninsula.

We have been doing research, reviewing past sales, and observing the market for about 3-4 months and understand that the supply in Portland has historically been low, so instead of only waiting for MLS listings, we decided to ask around to see if there are other ways to connect with potential sellers. Some on the internet suggested trying mail-outs, do you think it would be a viable option in our case? It would be great if we could connect with a local investor who is looking to downsize their portfolio during the pandemic, but we don't know where to get started. What would you suggest to first-time multi-family buyers like us? Thank you!

Best,Joon

Katelyn Michaud · Answer

If you haven't talked to a lender, that should be your first step. FHA loans have maximum amounts, which are generally around $350k. You're not going to find a four-unit on the Penisula (or probably even in Portland) for less than the maximum FHA loan amount. And if you do, it won't qualify for an FHA loan. I recommend seeing what and how much you qualify for first and then broaden your geographic location. You could probably find something in South Portland or Westbrook.

Zhiyun P. · Answer

Sorry! I should have specified Portland, ME. I believe I posted this in the Maine Q&A forum.

Brad Hammond · Answer

I think it is hard to find multi-family properties off-market.  A couple of notes to think about.

1. There are not a ton of 4-plexes out there so inventory will always be low.

2. Get on the list from a wholesaler.

3. If you do find an off-market property, chances are you will need to fix some issues or it will need a lot of rehab.  That could be difficult for a first-time investor or someone without a wide network.

Harrison Smith · Answer

@Joon Park As an agent and investor in Southern Maine, I can say that direct mail has been working really well of late. We are getting a better response than ever to letters and postcards. I would highly recommend putting together a simple letter and mailing the target areas or properties to see if you can get into a discussing with a property owner. Being a landlord is tough right now, so you might some people ready to move on.

Steve Morris · Answer

Also, if you've got a broker with access to MLS in Portland, it would be worth doing a pull.

Some times these are priced fairly, however, I think a lot are over-priced for the rents they generate.

Steve Morris · Answer

so instead of only waiting for MLS listings, we decided to ask around to see if there are other ways to connect with potential sellers.

Well, I think if you want off-market deals you either:

1) Groom a list (pick a neighborhood, I'd rather do in-depth coverage) and start calling (preferable), mailing or maybe door-knocking (takes a lot of time) or

2) Get with a broker that has a track record and has got a list.  Ask for a done deal list to grade them.

Doing off-market stuff is tough.  For now, that's my strategy as a broker in Portland, since listings are either gone in an instant or if they get past 2 weeks just sit there.

I'd also get your pitch pack ready.  Basically, the collateral that shows you're serious (eg proof of funds if they ask).

Jeremy A. · Answer

I couldn't find 4 unit in my price point. So Instead i bought biggest three 2/1 unit with huge attached barn added more bedrooms connected to public sewer stabilized repairs and now getting funding/quotes to proceed adding 4th unit to barn. Maybe 5th.

Zhiyun P. · Answer

It’s reassuring to know that. We’ll definitely give it a try. Thanks for letting us know.

David Marshall · Answer

Hi Joon,

It sounds like you may have the resources to get a 4-unit on the peninsula. There is another loan program that may work for first time buyers with multi-units that may have a higher limit for you depending on the census track. It is a good idea to search for properties off-market since the market is so skinny right now.

Zhiyun P. · Answer

Hi Scott,

I should have specified that I am looking in the Portland, ME area. Thank you for the offer!

Best Way to Find Off-Market Four-Unit for Sale in Portland?

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