All Forum Posts by: Ryan Smith

I am also interested in a February meet up.

I work as a project manager for a home builder. I will say, after all the time you put in to spec the home, and all the fees, permits, selling costs, etc, you'd be better off just selling that parcel of land if you're thinking of short term gain. Much simpler. Cleaner. And you'll probably net about the same amount either way. Just my observation.

The other option would be to build a multifamily on it, and depending on the cost/ROI, that's a good option.

Thanks for the feedback on the heat pumps. Retail number (can't give cost number, obviously) on a 4 unit is around $350k, plus land. If we say $400k with land, and Auburn rents at $1,250+/unit, it's a solid deal, especially considering the lower maintenance costs with a new build. Closer to Portland has even higher rents. 1.25% in Auburn area, and 2% in certain parts of Portland where rent is $2k/unit. Not a bad percentage in either place. Just need to find the right land. I guess that's the next step, but I was trying to put the numbers together considering the heating systems in the final build number.
Thanks again for the feedback everyone. Glad to have BiggerPockets to gather information from.

 Thanks for the information. The land would be paid with cash and used as equity/down payment for the rest of the project. We do an "end loan" instead of a construction loan, so the costs will be held by my company throughout the process of building. Same with the heat pumps, it would be paid upfront with the "mortgage". No financing.

We do heat pumps, but normally banks like to see a separate system installed for heating. I may consider doing wall heaters as that primary source, along with the heat pumps, if I can get the heat pumps for the right upfront cost. It may be a selling point where I may be able to get more for rent. But I was trying to avoid that much cost for a heating system. Might not be able to escape it! Thanks for the company recommendation - I may need more bids, seeing that our contractors in that area are slammed busy.

Hello everyone,

I work for a modular home builder in Maine and I've been making offers on existing multifamily properties. As many know, it's a tough market out there, and Maine real estate is really old and beat up. So I've decided to start my search for land. I believe I can follow a 1.5-2% rule (even at retail cost) in a more Southern part of Maine (as far north as Lewiston/Auburn) with a completely brand new multifamily.

I've priced out a few floorplans and found one I like. The problem I'm having is deciding on a heating system to put in. I'd like to set it up so each unit pays for their own heat. I don't need AC, because most homes in Maine don't have it. People would typically get a window unit to put in for the few months of summer we get here. I mainly deal with selling single family properties at my work, so we would normally do a base board heating system fueled by propane or oil. I'm leaning more towards electric base board, so each unit could be responsible for their own electric bill. I could also do wall heaters, because these units will only be in the 700-800 square foot range.

Any recommendations? It does get quite cold here during the winter, so I'd like to also keep this efficient for the tenants if it wouldn't have a huge up front cost.

Disclaimer: I am a newbie and don't own an rental property yet (have put in offers recently, but nothing has stuck), but hopefully I can offer perspective.

I see that you moved away, and that you own it free and clear. Have you thought about what you'd do with $275k cash, minus agent fees? You could use that money to fund a BRRRR or put 20% down on a few properties, whichever kind you are interested in investing in. Doing a quick calculation of cash flow could show you how much that money could work for you. That is, comparing it to what you're getting from this condo. However, if you bought it for $265k, and can sell it for $275k, it seems that you bought it kind of high. Remember, condos can lose value quick. This might be a good opportunity to get out from that and get into a more stable asset, in terms of holding and gaining value. But if you are cash flowing a crazy amount and don't plan on letting it go anytime soon, that might be justification enough to hold on to it. Seeing that you've already listed it before, and you don't live around there anymore, it seems that you have seriously wanted to get rid of it.

Just a few ideas to toss around. I would brainstorm what that cash could do for you and weigh that out. If you could get, let's say, $13k/year in NOI, that's only a 5% return on $265k. But if you're getting 15% (in the ballpark of $40k NOI), it could go either way. But it doesn't look like you're in that ballpark with the current renters.

Good find! I was born and raised in Syracuse, IN, lived in Warsaw for a while, and went to Goshen College up the road. Great market! Kosciusko county's tax rates are certainly appealing too.

It certainly doesn't hurt to ask! The lowest I've found is 10%, but that was from calling nine different banks trying to find one that would do under 20%. If you find a bank who would do 3%, you've found an investor's dream! Let us know how it works out.

What do the numbers look like in terms of cash flow? Also, have you looked into building a multifamily home on the property (if allowed)? Those would be the two questions I have. Looking at this from the outside, the only "concern" I would have it tying that much cash into one deal. It's certainly a more conservative way to go about it, but have you considered putting less down (financing) and doing multiple projects at once? That is, if you have the land for that.

Just some stuff to consider! If you can refinance at 75% and just keep using that cash, that would not be a bad way to go about it at all. If you're into this for the long term hold, run the numbers for ROI and compare it to the rest of your market.