Starting out with this deal...what do you think, money maker or t

[Garett Jacobs]

Hi, my Name is Garett Jacobs...Ive been in the trades since I was 18 though my dad was a painter so I was an subject to indentured servitude since from around l the age of 13. 

I've lived in the Topsham/Brunswick area pretty much my whole life. I love Maine and New England in general. 

So the first thing I should start out with is that I'm super green to real estate. 

I don't really know a lot about real estate outside of what I've heard on the podcast, the people I've talked to who have purchased their own home, and any common sense I can muster (which isn't always a bunch).

I have a situation that feels unique although I'm sure isn't...though being a newb, I really don't know. 

In the Southern Mid-coast Maine market things are a bit busy and Portland is the busiest. People are swarming and growth is happening.

We (My girlfriend and I) were subject to a renovation eviction and figured we'd buy a multifamily to avoid paying such high rents and eventually see returns after we renovated and moved out after the required two years.

So we've been staying at a friend's campground, for the past 5 months, that she owns over the summer and she said, "Why don't you buy my house?"

Hers is a duplex that they tried and were previously denied permitting to put in a third unit they had ALREADY built. After checking with codes population growth has changed requirements and it's now able to be permitted but needs a codes required sprinkler system (Roughly $9000) to be a livable three unit under the new regulations.

Without going into lots of boring details the short is I'm using an FHA 203k loan to bring it up to codes and then after a year plan to re-fi to pull out some of the equity to finish everything off and then move out after two years with the property making 1.8% of the perchase price monthly.

We purchased for $178k with a full mortgage amount of $200k for the improvements and the units are as follows: 

upstairs: 

4 bedroom 1 bath @ $1600/m

downstairs : 

(2) 2 bedroom units @ $1200/m

The closing cost are being paid for by the seller and we beleive it will most likely appraise for somewhere around $230k

My girlfriend's aunt is a property manager that owns a decent size company and has been in the game for over three decades so we have a good source of information as well as a valuable resource for checking on background, credit score, and gut level opinions on tenant applicability. 

It's definately a fixer upper but there's a lot to work off of and hopefully this is the start to the beginning of many more purchases. 

If you've read this far and have any opinions to share or advice or criticisms to offer I'm more than all ears because I LOVE learning and especially about something that may well give me and my family financial security for the rest of our lives. 

Thanks for reading