All Forum Posts by: Eileen McCue

@Bob Langworthy Thanks, I will definitely check out your recommendations.  Right now we are just riding out our commercial loan for a while as the rates are pretty low (4.25%) but would love to lock in an even lower rate with a 30 year residential.

@Allison Meggison We have purchased distressed properties with a commercial bank loan based on an after repair value (ARV) appraisal. We submit a list of the repairs we plan and the appraiser accounts for those improvements in the appraisal. Then the bank will lend 80% of the ARV appraised value. The numbers have to shake out just right, but we used this strategy on a duplex last year and were able to get a high enough ARV that we didn't need to bring any cash to close and we had about $90K to draw on to get the renovations done. Not sure if you are looking at distressed properties, but that is a strategy that we have used a few times to essentially purchase with no money down.

@Zachary Stephens Welcome! I am an investor in midcoast Maine and went from a house hack (renovating a single family into a duplex) to 12 units over the last 2 years. I spent lots of time doing research and listening to BP podcasts. Coach Carson is also a great REI podcast to check out; Chad Carson has been on the BP REI and Money podcasts as well.

I would highly recommend spending time crunching numbers and really identifying the market you are looking in. It is also a huge help (unless you have lots of cash sitting around) to develop a good relationship with a local lender. That is what really allowed me to move to the next level and acquire 3 properties (10 units) in less than a year. I got connected with that lender at a local BP REI meet-up, so I would highly recommend getting involved and networking with the group in your area.

Good luck!

I am currently in the final stages of a live-in rehab on a duplex that I am planning to BRRR. This will continue to be my primary residence and is currently under a commercial loan. I am looking to refinance to a 15 or 30 year residential mortgage to lock in lower rates, but my usual lender is talking about issues underwriting for a portfolio loan on a 2-unit even if it is owner occupied. Has anyone else run into this issue? It is making the refinance on this a bit tricky. We could continue with the commercial loan as the rate is pretty low, but locking in a residential rate for 30 years would likely lower our monthly payment by $500 or so, which is significant.

Has anyone in Maine (especially central to mid-coast) had success with a local bank in this type of situation?  I would be grateful for any recommendations!  Thanks, Eileen

We have 12 units, 10 currently rented (we are living in one and renovating one).  All our tenants paid their April rents.  We had sent out a letter a couple weeks ago addressing the pandemic situation and letting them know we value them as tenants and that we'd work with them as much as we could.  We only had one tenant respond that he was just furloughed and might have issues with May rent, but that he was trying to work out pre-paying a few months if possible.  We have not heard from anyone else.  It will be interesting to see how May rents go.

@Ralph R. We used seller financing for our last deal in midcoast Maine.  The seller had a realtor and we decided to use the sellers realtor to represent us as well as part of our negotiating strategy as that saved the seller half to commission.  It was helpful to have a realtor involved to deal with the paperwork.  We also had a real estate attorney do our closing, Lee Woodward, who was excellent, though not in Southern Maine, we had worked with him on a previous deal.  With this deal as it was seller financing we chose not to have a full appraisal done, though we did get a third party realtor to do a Broker Price Opinion for us.  It gave us a little more peace of mind, but we will see in the long term how valuable it was.  Happy to answer any other questions you might have.  Eileen

@Kyle Jensen We had a situation where a seller was supposed to clear out a house but left a bunch of random items (mostly junk and some trash) and an attic full of stuff.  We were ready to get in to the house to begin renovations, so it definitely needed to be removed ASAP.  Our realtor put us in touch with someone locally who clears out houses for free as long as she can take the good stuff to sell as well as the junk.  It worked out pretty well - they hauled everything away and paid for disposal of trash and we didn't have to find buyers or spend our time hauling anything.  I would suggest contacting local realtors to see if they have a similar contact.

@Benjamin Smith, We are closing on a seller financed deal later this week.  We are using a dual agent (same realtor for us and the seller). We agreed to that as we were both familiar with the agent, have worked with him before.  It is appealing for the seller since the realtor agreed to only collect 3% (rather than 6% as would be paid if there were a buyer's and seller's agent), so they save half the realtor fees.  The seller had already contracted with the realtor so it is a slightly different situation.  We have found that a good realtor can totally be an asset and worth their fees, but again, we are folks who will spend the extra funds to make sure we have things totally dialed.  I will also say, we've found that a mediocre or sub-par realtor can sometimes be a hindrance in putting a deal together. It can be cumbersome to have to negotiate through a realtor who doesn't really understand our perspective.

For this deal we are using a real estate lawyer to do the title work and closing.  He is also drawing up all the loan documents.  I feel that it is 100% worth the extra costs (about $1200) for peace of mind and knowing we have the legalities covered, and so the seller feels comfortable.  We also hired a building inspector.  We typically spend the money for a good quality inspection, which might run $500-1000, but again we want to have all our ducks in a row and make sure there are no surprises.  We also find that having that professional report helps us in negotiations around work that will need to be done, especially safety or structural issues.  Then the seller knows it is not just our opinion that the deck looks like it is falling off the building, or that the foundation really does need work.

If you are on Penobscot Bay, you might not be that far away.  We are in Belfast and use Lee Woodward as our lawyer on real estate transactions.  Also, Sam Mitchell is an excellent realtor in the area. Hope this helps!

Congrats on the first deal! It does get better/easier. We are in central/midcoast Maine. We bought a single family home to live in and convert the second floor into an apartment as a buy and hold rental, doing most of the work ourselves and paying for it out of pocket as we went. We thought we'd have it done and rented in a year, but life circumstances (a new baby and a new demanding job) slowed us down considerably. It seemed like it was never going to be done, and I often wondered if it was worth it, but five years later, we got the upstairs rented to a great tenant! That first rent payment felt like magic! That was a year ago, we now have the first floor rented and that property has great cashflow. We are now doing a live-in reno on our second duplex, and closing on another duplex and a 6-unit in the next couple of months. It has been super helpful to connect with other investors in Maine and find a good team (commercial lender, CPA, realtor, etc). Also, it made a big difference to listen to Bigger Pockets and other REI/FIRE podcasts during what felt like endless renovations to keep us motivated! Hang in there!

Hi Deron, nice to know another mid-coast Maine investor.  I have a duplex in Belfast that I am currently doing a live-in reno on, living in one unit while the other is rented.  We have found that coastal Maine taxes and some renovation expenses are a lot higher but the housing market for rentals has a pretty big up-side if you can find the right deal, they are certainly out there to be had.  I'd be happy to look any over if you want a second set of eyes on the numbers.  Good luck, it really does get easier after the first one!