All Forum Posts by: Carl Hebert

@Dmitriy Fomichenko thanks! 

@Ken B. Yes it turned out to be a smart buy, but the whole time I was working on it and spending money you question yourself the whole time lol. 

Good luck on finding a place here, the market is currently a bit insane to say the least. I would have all my ducks lined up to purchase, so you can grab the deal when you see it, otherwise it will be gone.

@Kolton Lynch I would agree with @John Thedford about the price difference between Naples and everything north of it. Naples is, in my opinion quite a bit higher then the Cape Coral/Fort Myers area for the same property type. If you really like the Naples area you may want to look at Bonita Springs just north of it for better deals. I have been driving around and checking out different areas from Marco Island to Venice and there are lots of great neighborhoods along the coast worth checking out. 

Hi @Ruth P. I own several multi's in the Lewiston/Auburn area and it depends on the leases. Have your agent get the leases and see if there is a clause in there saying that the tenants can be made to leave if building is sold. This is what is in my leases:

Termination upon Sale of Property. Notwithstanding any other provision of this Agreement,
Landlord may terminate this Agreement upon 30 days' written notice to Tenant that the Property
has been sold.

Otherwise you have to honor the leases that are in place according to Maine law. 

Month to month they just need a 30 day notice. 

A few more pics

An after shot of the back.

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $40,000
Cash invested: $64,500
Sale price: $145,000

A fix and flip single family home, 3-Bedroom, 1.5 Bath, bought with hard money loan of $40K. We put $64,500 into it and sold it for $145k. We did a ton of work, new floors, doors, windows, kitchen, bath, driveway, deck, gutters, shingles, painted outside, etc. Pretty much replaced or repaired everything. We also jacked the roof up and added a knee wall in the attic, which we then insulated.

Started work 1st of September and closed on January 27th. All work was done by the end of November, but we had to redo a portion of the deck for code and fix a few tiles in the kitchen.

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

The house had great potential in a really nice neighborhood in Auburn, Maine. The market was starting to pick up for good 3 bedroom homes and thought we could make a decent profit on it.

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

I saw this on the mls for $42k and thought it would make a good flip. A couple of friends happen to mention they were interested in doing a flip, so I sent them the address. We offered $40k and it was accepted.

How did you finance this deal?

Hard money loan from a friend of one of the partners. We ended up paying back $44k on a loan of $40k. Most of the materials we paid for with credit cards, most with Lowes for 5% discount, but also Home Depot taking advantage of their deferred interest payments.

How did you add value to the deal?

Completely remodeled the house. Made the kitchen and bath bright and modern, removed some walls to create a more open concept. Painted the outside after installing new windows, doors and adding shingles were needed. The place had no driveway to the garage! We added a new driveway and cleaned up the landscape and also removed trees from in front of the kitchen and dining windows to brighten the inside. Removed the old deck and created a wrap around deck. New plumbing and electrical where needed.

What was the outcome?

The place came out amazing! We listed for pie in the sky at the time for $159k and we aggressively lowered the price to $150k after the first week to hit the $150k price point. That week we had an offer and accepted $145k, which was our target at the start anyways.

$145k - $44k loan - $64.5k expenses = $36.5k in profit. Not bad 5 months from close to close.

Lessons learned? Challenges?

Always pull a permit! The city considered it a new deck not a repair of an old deck. We ended up taking part of it down and redoing it to meet code. Lost about $3k there.

Know your area, we could of saved a few thousand more by not putting in tile in the kitchen and bath.

We had 4 partners in this deal and we picked people for certain things to be approved and they would have final say on those items. That helped a lot with keeping the project moving along at a fast steady pace.

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

Fontaine Family - Clayton Larochelle agent

@Allen Wu, All the numbers keep pointing to a hot market here. Prices are up over 15-20% from last year, rents are up, inventory is down. You can find some more info online about the trends here, but it is basically a steady line up since around 2010ish. I think we are right near the home values of 2008 again, but this is not a repeat of 2008. People are moving here (SW Florida), in a steady flow. I believe the pandemic caused prices to surge pretty much everywhere, but definitely here. 

Buying a duplex that actually cash flows out the gate here is a good buy, usually you would be looking at appreciation down the road for profit. 

Just my 2 shiny pennies, hopefully some of the more knowledgeable locals will chime in for you! 

@Damian Cummings You should find out who handles your property at the local housing authority. Usually, at least here in Lewiston, one agent will handle the building. They should be able to give you all the info you need. Basically all you will need to do is send a letter to the housing authority and the tenant saying you are asking for a rent increase and state what the increase is. 

Here is Lewiston/Auburn it has to be 60 days before you want the rent increased, May 1st letter - July 1st rent increase. I was never told that I could not increase beyond x%. I just raise it to market and have a little note mentioning that and a list of improvements we have done since we bought the building etc. 

So far only one tenant actually had their portion increase and it was for $6.00 (for a $75 increase on a $650 rental). Most of the FMV will be on the government side of things.

I have not been denied an increase, but I also do not get greedy. I look at what the local HUD numbers are and bring it up to that level.

You can ask the person at the housing authority to send you a copy of the HUD numbers also.

And if you have a lot of tenants on section 8 ask for the link to setup so you can see who gets what amount. Here in Lewiston I will get one deposit for 6 tenants with no invoice saying who got what lol. The site has it all broken down for you.

@Allen Wu Hi, I live just north of City Hall on Cultural Park Blvd. We feel safe here and in the surrounding areas. We bike, run and walk at all hours of the day. You are within 10 mins of everything you would need to live here. Grocery, hardware, auto, medical etc all within 10 min drive. Beaches are about 30-40+ to get to Fort Myers beach area. There really is not a good beach in Cape Coral. SW Florida International airport is 30-45 depending on traffic. 

@Dan Weber and @Andy Verge, thanks. This definitely was not a deal for everyone, I was willing to not have income come in for almost an entire year while working on it and dealing with the grant program. I can see some people not being able to handle that lack of income for such a period of time. 

Some of the time delay was just my traveling with my wife, but couldn't pass up the chance for some world travel lol!