All Forum Posts by: Carl Hebert

@Daniel Ortega What type of properties are you looking for? As @Bethany Turon mentioned there are properties that cash flow in Maine. I just purchased one a couple of months ago in Lewiston that cashflows very well, but I deal in multifamily's. If you focus on just the coast and southern Maine you will have a hard time finding a good cashflowing property. Look inland and you will find quite a few, just be prepared to bid at market and bid fast as they fly off the shelf now. 

Good luck and welcome! 

Duplex (unpermitted) - $85k current market

Collecting $1500 in rent now

Friend will sell to friend for only $90k ($5k over current market)

Wants 50% down - $45k

6% (at least 2-4% over current market rates) on remaining for 7 years

Total interest just over $10k

Has son moving in back with 3 college friends each paying $300

Will rent front for $1000

Says will collect $1600 a month.

Just summarizing it to wrap my head around all the posts. 

How many bedrooms, baths, location, comps etc. 

First glance seems like a bad deal, a friend would not overcharge you on the price and the loan rates. I would search for a bank that would finance this as a single family and get a regular 30 year at around 3%. 

Or just find a duplex/house for your son and friends to rent with a lot less down that can be financed through a bank because it is a permitted building. 

@Allison Meggison a lot of times you have to go with a personal loan instead of a property loan. At least that is what we have been running into here in Florida. It seems to depend on several factors, age, type (single, double, manufactured), and location. Here it is all about hurricanes lol. 

@Jordan Gitch I am pretty sure you can only qualify for a FHA 3.5% if it is your primary residence. I bought my first 3 unit that way, but I lived in one of the apartments.

I would try what @Michael Kinsella mentioned in his post above, check with local banks. They are usually a bit easier to deal with than the larger national banks. 

Grats on the great financing! What are the current tenants paying for rent and what will you be shooting for once you can raise it?

@James Alden & @Bethany Turon sounds good, I fly back to Maine June 3rd and need a week to get camp setup. Would be open after that. 

@James Alden I try to hit the Southern Maine meetup when I can, there isn't one that I know of in the Lewiston/Auburn area. There is nothing saying we can't have a mini meetup this summer though! @Eric Pierpont @Bethany Turon etc :)

@James Alden , I agree with a lot that both @Bethany Turon and @Ed Emmons said. 

I treat section 8 tenants the same as my regular tenants, with respect. 

Many applicants ask if section 8 is accepted and we always say yes. We let them know what the rent is and they need to check with their case worker to see if it fits the requirements for that Housing Authority. We tell them the rent will not be lowered to match their voucher, usually happens when they have a voucher for a 2 bedroom and want our 3 bedroom for example. They know they have to fill out an online application and that there is a fee for the background/credit check. We charge the same deposit and pet fees just like a non section 8 tenant. 

While running the background/credit check the only difference between section 8 and others is the credit score is not as much of a focus, but the number of times they have had late payments is important. 

The best way to get good tenants whether or not they are on section 8 is be sure to run background/credit checks and check references. We have that info right in our ad that we run these checks with a fee and it eliminates a lot of people wasting your time. Prescreening before the first call is received saves time. 

My other tip before you start listing is to get your local HUD rent sheet to see what they will give you for your rental. That way you can list the property at max value from the start and also each year 2 1/2 months before the lease ends start the process to get the rent increased for the next year. The local Housing Authority here requires 2 months in advance to increase.

Hope you get great tenants!

@Sang Yi They should talk to some local institutions, I don't see why one of them wouldn't refinance a property with that much equity built up in it. Avoid the big name banks and go for the more regional ones.  

@Shelley W. if you can't swing the 25% you can always try for a commercial loan. Find a local bank to the property and talk to the commercial officers there. Your interest rate will be higher, but still low considering. My last commercial loan was 4% this year. Commercial loans are usually a lot easier to do in my opinion.