4th buy & hold property a 4 unit in Maine

[Carl Hebert]

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $62,500
Cash invested: $29,000

4 unit - 1 - efficiency, 1 - 1 bedroom, 1 - 2 bedroom, and 1 - 3 bedroom all have 1 bath. There is also a 1 ½ car garage.

Refreshed the one bedroom in 2018. Added all new porches and replaced a few doors throughout the building. Did a full remodel on the three bedroom in 2020. We tinned all the wood trim outside as it was all peeling and contained lead.

We use the garage to store all our tools and items for the business. There is extra room in the back of the first floor that we are converting into an office space for the business.

Current rental income is $3385 a month, cash flow is an average of $1200 a month.

Last appraisal was for $205k

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

Was looking to build my portfolio and this was a building I was already familiar with.

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

Friend of mine had this and three other properties with three partners and they were looking to sell. I offered 125k for two buildings and they accepted.

How did you finance this deal?

Regular 30 year mortgage for 125k at 4.63%, used the extra money to pay off some debt we had in the business. This loan ended up being rolled into a larger loan in 2020.

How did you add value to the deal?

Fixed issues throughout the building, painted the garage, repaired all the porches, replaced bad doors, refreshed one apartment, completely remodeled another.
We also brought rents up to market on all the units since we purchased the building.

What was the outcome?

A building that was appraised at 129k when we purchased it was reappraised in 2020, for a refinance, at 205k.

Lessons learned? Challenges?

Insurance issues, the building had peeling paint on all the exposed wood trim outside. Insurance was going to cancel our policy if we did not take care of the issue. We were able to get an extension due to it being winter, but something to keep in mind when buying a building.

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

Fontaine Family, Clayton Larochelle was the agent.