All Forum Posts by: Mike Roy

Hello BP -I'm curious if any of you are investing in small multis in Biddeford, ME. I own one multi and have another under contract in the Bath/Brunswick Area, but deals (1.5% rent ratio, 15%+ CoC) are few and far between in this part of the state. The numbers look better in Biddeford, but from what I understand you have to be very selective in this town. I'd love to connect with someone who is having success in the B/B- residential space.

Just starting my research to see if the area is viable.  Recommendations for a local property manager or agent would be helpful as well.

Thanks,

Mike
   

Thanks guys.  Great to hear some local perspective.  I have one building in Bath and like the prospects for Bath/Brunswick, but prices have gotten crazy over the past couple of years.  I'm inclined to sit tight and wait for the next cycle, but I want to keep an open mind.  Do you guys see any attractive towns in Maine with decent yield right now?  Southern Maine buildings aren't even priced to break even right now.  Maybe Bangor?  We need a good cleansing recession ... 

Hello BP - I'm curious if anyone here owns multifamilies in Augusta, ME and your thoughts on investing in the capital city.  From a 30,000 ft. view, it seems like there are some decent residential neighborhoods and a stable supply of jobs in government, healthcare and education.  However, population has been declining, and that's never good!  

I'd appreciate the insights from the boots on the ground.

Mike
 

Hi Jon - I just started working with Nate Timmins at nicholson michaud and company in Waterville. They work with real estate investors and were recommended by Kenny Lavoie, who is a top Maine investor on BP. It's my first year with them, so time will tell, but so far Nate seems very knowledgable, and he is very responsive. Might be worth a call. I have one 4-plex in Bath, and I'm looking to add 10-15 units in Bath/Brunswick this year if there are deals to be found. Feel free to shoot me a note if you'd like to connect.

All - Thank you for your feedback.  It looks like this is fairly standard, so that is good to know.  Just one more reason to find and KEEP good tenants.

Much appreciated,

Hello BP - Quick question: I just turned over my first ever tenant and just got the monthly statement from my property manager.  I see he's charged me the one month's leasing fee plus the 10% management fee for this unit.  I guess I assumed that I wouldn't pay the 10% on top of the leasing fee.  It seems like double-dipping to me, but is this common practice?

Thanks,

Mike

Hello - I'm six months into my first investment property, a 4-plex in Midcoast Maine, and thought I'd share the numbers based on the experience so far. There's so much talk about how high prices have gone and how hard it is to find a deal, but I think we did okay for our first go of it - and we found this one on the MLS!

Purchase Price: $180k

Current Gross Rents: $3,050 ($800, $800, $825, $625)

P&I: $674 (30-year fixed at 4.375% w/25% down)

Taxes: $392 (Worked with city to reduce from $445!)

Insurance: $123 ($1 Million liability, $5k deductible - SHOP AROUND!)

Management: $305

Common Electricity: $15

Heat: $0 (Converted to individual heating units)

Water: $125

Trash: $65

Lawn/Plow: $85

Vacancy: $250 (Approx. 8%)

Repairs/Cap Ex Reserve: $315 (Approx. 10%)

Monthly Cash Flow: $700 

Down Payment/Closing Costs: $46,000

Initial Repairs: $7,800 (Roof/Exterior Paint)

Heating System Conversion: $5,500 (From K1 to Individual Rinnai)

Total Cash Invested: $59,300

Cash on Cash Return: 14.17%

Going into this deal, Cash Flow on paper was only about $150/mo, but we made some very easy changes to increase that dramatically.  First, we increased rent on two units by $25 each, taking gross rent from $3,000 to $3,050.  Next, we worked with the city to reduce the building's assessed value, thereby reducing the tax bill by about $50/mo.  The previous owner had been paying heat for the building ($300/mo), so we switched this out to individual Rinnais and reduced this to $0 without any real push back from tenants.  Also, the previous owner had a Section 8 tenant and was paying their electric, which they abused ($150/mo!) - We have since replace that tenant with someone who can pay their own utilities.  Just like that, $150/mo Cash Flow became $700!  

Obviously, it remains to be seen if my vacancy and reserve estimates are on target, but I don't think I'll be too far off based on what I know about the market, the condition of the units and the decent quality of the tenants.  

I think we're off to a good start and we're excited about finding the next one.  I'm curious to hear from other investors in Maine/N.H. to see if you're finding similar (or hopefully better) deals.

Best,

Mike

Hello BP - I live in Boston and closed on my first investment property this summer.  Can anyone recommend a knowledgeable, accessible, reasonably priced CPA in the Boston Area?  I'm not quite sure how to start looking for one, so any advice about what to look for and questions to ask would also be appreciated.

Thank you!

Hi Jason - Sorry for the delay, just seeing this now. We did indeed close on our first property, a four unit in Bath, in June. We're looking to add a building or two next year and would be happy to share ideas. (Contact info hidden) Best, Mike

Rather than relying on the seller's numbers, call the utility companies and see if they'll tell you. They technically aren't supposed to, but they often will if you ask nicely. Are your tenants paying heat? That's a big one!