Freeport Maine Fix and Hold

[Brian McDonough]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $300,000
Cash invested: $100,000

Contributors:
Jessica Niles-McDonough

Downtown Freeport single family long term rental. Potentially short or mid term rental at some point. Lots of sweat equity added to this deal. So far this property has seemed easier and less daunting than our (wife and I) first deal which is encouraging. It is currently being rented out as a long term, furnished rental and could be switched to short term any time. Life circumstances caused us to push pause on the short term rental for now. It cash flows as a long term rental, and the potential for solid appreciation seems high given a long enough horizon. We hope to flip the switch when the timing is right and see if we can push up our cash flow using the short-mid term rental approach without creating too much of another job for ourselves. The house was completely over grown, needed exterior paint, lots of clean up, light kitchen remodel, light bathroom remodel, etc. mostly cosmetic work.

What made you interested in investing in this type of deal?

Solid potential for appreciation, multiple exit strategies, just the right amount of work needed to be done to where it scared off some competition I think, but still plenty of room for us to improve without having to do a full blown renovation.

How did you find this deal and how did you negotiate it?

On Market. My wife is our agent and did an amazing job locking up the property for us. She knew we needed to go 25K over, it was listed at $275k. No inspections. No appraisal contingency.

How did you finance this deal?

Heloc.

How did you add value to the deal?

Removed all the garbage, cleaned upon the yard, painted entire exterior, some new systems, plumbing, electrical, insulation. Light kitchen and bath remodel, paint, improved functionality. There is also an entire attached garage, which was partially converted to living space at some point, but was un-permitted. We plan to add a deck off the back side of the garage and turn that space into a master suite turning it into a 3bd/2ba.

What was the outcome?

Rented long term right now. As it sits, valued somewhere around 350-375k

Lessons learned? Challenges?

Heloc was a vital tool for us in this situation, but takes longer than we'd like to get paid off so we can redeploy the money. Wheels are turning on other options.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Jessica Niles-McDonough at Locations Real Estate in Falmouth, ME.