3rd buy & hold property a single family in Maine

[Carl Hebert]

Investment Info:

Single-family residence buy & hold investment in Auburn.

Purchase price: $30,000
Cash invested: $44,000

Single family home, 3-bedroom 1-bath, bought with cash. I just happened to glance at the single family mls listings and saw that this had just hit the market that day. I was just up the street so drove by and immediately called my agent to schedule a walk through. The outside yard was horrendous, and the inside looked old and worn out. Walking through though I could see the bones were solid and most of the work we could do.

They were asking $35k and I offered $30k cash. Agent was a bit hesitant, but they accepted the offer same day.
We rented through the winter and started remodeling in the spring of 2017. Worked with the city to get a grant to help with some of the costs and they ended up doing the plumbing and rebuilding the yard. They set it up for a new driveway, installed a retaining wall and sculpted the land to let the water flow away from the building instead of directly into it.

The interior was gutted and completely redone by us. Removed the old bath to expand the kitchen and made a larger bathroom with laundry on the other side of the building. New electric and plumbing throughout. New roof over the kitchen and front porch. New front and back stairs outside. Painted everything that needed to be painted.

Took most of the year to finish, but we rented it out in December of 2017 and same tenants are in it to this day.
We rented it for $850 and it currently is at $1000, tenant pays all utilities. Really like the current tenants, they keep the place clean, and the yard always looks great. Pretty much hands off with this property, one of the reasons the rent is below market. The current tenant leaves this would probably rent for $1300-$1500.
Current cashflow is $420 avg, before the current loan on the property we average about $625. You can see why I was in rush to raise the rents on my good tenants :)
Current market value is $160k

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

This had to be one of the most impulse purchases I have ever done. I saw it on the mls by luck and was right nearby. Did a walkthrough and put a cash offer in that day. I saw great potential in this property and did not want to think back later with I wish I had bought it.

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

MLS, made cash offer 5k below asking price of $35k

How did you finance this deal?

Cash

How did you add value to the deal?

Complete gut and remodel inside, ton of work outside.

What was the outcome?

Building currently cashflows for $420 a month and is valued at $160k

Lessons learned? Challenges?

Started a great relationship with the City of Auburn, which paid off later on a different property. The challenge was initially figuring out how to navigate the cities grant program.

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

Fontaine Family Realtors, Clay Larochelle was our agent.