First time home buyer in Maine

General Real Estate Investing
1

Okay. I am brand new to real estate and my fiance and I want to purchase our first home. I just want to lay everything out for you pros and get your opinions on what we should do, because to be honest this is my passion and not his so much, so it’s up to me to research and make a good decision, rather than pay top dollar just because we want to be home owners RIGHT NOW.

With his job we move alot. For that reason, I am self employed. He makes $60k for 8 months, and we usually take the summer off and spend it up in British Columbia (he is Canadian). We arn’t married yet, but have lived together for 6 years and want to utilize each of our First Time Buyers options in buying two properties this year.

We are about to move to Portland Maine for the year. My college background is in interior design and I am going back for architecture in the fall, so for my first home, I would like to find one in Maine that we can live in and I can work on it all year and put it on the market next summer. (I do not want to do major architectual changes, but more update the kitchens, bathrooms, exterior, landscaping kind of thing)

We do not have disposable cash for a downpayment, but we do have a banker that would loan us whatever we would need for a downpayment, which I understand wouldn’t be much with most First Time Buyers discounts. I would only be willing to take out a loan for the down payment because I do not want to hold on the the property long, therefore, would pay it off quickly. There are so many lenders and ad’s and stories of zero downs, etc I don’t even know where to begin on understanding what type of martgages are available and a good idea for US, or if we even NEED a downpayment…

I am overwhelmed with real estate info EVERYWHERE and do not know what would be the best option for us to start as homeowners/investers/flippers, and I do not want to make a mistake on our first jump into the real estate world as first time buyers, because there are so many breaks and benefits. I also don’t want to spend another year in Maine throwing away money in rent, when I am more than capable in design and carpentry to work on a place for us and help make a good investment for our future.
Is anyone here familiar with real estate in Southern Maine and have any advice on where to find the best deals for REI’s?
I just want a house to put some TLC into and start everything out on the right foot!

Where to begin??? What would you do if you were in my shoes???

Thank you so much in advance for any advice. I really need it. :slight_smile:

2

You a have said a lot, but here are my thoughts. Real estate is a business. Keeping that in mind you make a plan based on what your goals are. Buying a home to live in is not a part of your business. You buy a house to live in because you find a place where you want to live. You seem to have a problem with sequence. You get married first then you move in and buy a house. This may seem to be my old fashion southern attitude talking. But it really isn’t. If you want to do the business of real estate you need to pick a strategy and be able to stick to it. If you have picked a man that is not worth marrying and stayed with him for 6 years or you have a guy that you would love to marry but can’t get him to marry you may be a sign that you may have a hard time dealing with some of the things that will be coming up in the real estate business.

Stop and think about nature. What nature wants us to do is pass our DNA to the next generation. The most efficient way for men to do that is to pass his DNA to as many women as possible. The odds are that several will make it to adulthood. So by nature men don’t want to get married. The most efficient way for women to pass her DNA to adulthood since she will be with that kid through to adulthood is to have the man there to help raise that one kid. So she tends to want to get married. So no man worth his salt wants to get married and no woman worth her salt can’t make a man marry her. That being said, if you tell him the next time you will be intimate with him will be on your wedding night you will be married by the end of the month.

3

First of all, I find your post not only extremely offensive and baseless, but completely off topic. I didn’t ask for a life lesson from a southerner who obviously needs a lesson of their own on a thing called TACT. The rest of your post doesn’t even deserve a response - so if anyone has any actual REAL ESTATE advice, please feel free to comment.
Those who are looking for a space to preach about their twisted views on DNA, reproduction, and male/female relationships, please take your pathetic soapbox somewhere else…

4

IMHO, the first step to successful real estate career is make a very smart buy on a house that you can live in. Granted, I love renters (I have 32 of them paying off a dozen mortgages), but the first thing is to stop paying rent. Next, don’t go over board. Buy something that is modest but perhaps with some time can be made in to something better, has stronger features that the next buyer will want and is within budget. However, you mention you have no money for a downpayment. Fact of the matter while not a complete show stopper, is a red-flag in my book. Being a homeowner (or rental property owner) means you need to be able to have some free cash to make repairs, upkeep and the unexpected major expenses (furance goes out, hot water, bad roof, etc etc.) Heck, I had a massive bee infestion in my chimney and they were coming into my house. Nearly $500 later, it was solved. Not a big deal for me, but could you handle a $500 (or a $1000) repair bill on 5 days notice?

REI is about patience and knowing your marketing. Want to get in “right now” is not the right attitude. Be the bear sitting beside the stream waiting for the perfect salmon to swim by. Having bought more than two dozen properties in the past 15 years, I always know when its the right one. I “work the numbers”, study the comps and other available properties, check my files for things I’ve looked in the past and make a list of all the pros and cons of the deal. My latest deal I’ve been watching this particular segment of market that I regular invest in since Jan. I thought I had a deal back in Apr. and then lost it and then it came back (fell out of escrow). I close next week on a property for $61k and it has very strong comps in the range of 105-110k. For me, it a flip, but I only do 1-2 flips per year (I have a full time job so this is a hobby). My main interest is rental properties, but right now is not the right time for that (coming soon, however!).

Each and every deal you seriously consider will make you that much more ready to invest/purchase. Unless you’ve looked at 50-100 houses, analyized in detail at least 5-10, then you’re not ready (IMHO).

Patience Jedi warrior of real estate (and good luck!)

5

Great advice aak5454- thank you! I guess I should be more specific - our situation is a bit odd, as my fiance is an athlete that swings between the majors and the minors, so his salary fluctuates and his paychecks come in lump sums, bonus’, etc. so the least he could possibly make in this next season is $60k but he will most likely receive bonus’s or hopefully log alot of time in the majors. That being said, we do have other investments that have money in them but haven’t specifically set up a fund for a downpayment, basically because we move alot and haven’t been in one place for very long, and for the simple fact that we figure we will just take one or two bonus’ and put it straight into a house when we are ready to buy. I don’t like counting on money that I do not have in my hand yet, so for that simple fact, I just wrote $60k because that is what I KNOW is coming, not to mention the money that comes from my business. I just know getting any kind of loan being self employed is tough, so I was only taking into account his salary. So to answer your question, I am not too concerned in unforseen costs - we would be able to cover them - life gives them to us everyday!! :wink: I am concerned however, with my knowlege on real estate I do agree I need to sit back and learn alot more before I jump into actual investing. I see your point about a house to LIVE IN versus a house to flip, etc. I guess I wanted it to be both, since we are never in one spot for long, but after reading alot of posts on here that seems to be the reasonable concensus to keep the two seperate. :slight_smile:
Let me ask you one more question…when buying the home you LIVE in, were you as diligent in searching out the best deals or did you have to settle paying more market value to get into the area/location you really wanted? And, as REI’s - what are your (or anyone elses) thoughts on building the homes you live in, in order to be in more control of your dollar/location, than purchasing an older home, in order to get in the locations you really want to LIVE and not get stuck paying market value, if foreclosures in that area are few and far between?

Thanks again :slight_smile:

6

Ms. Bunny,

It’s probably none of my business, but what do you do for self employ? Don’t believe what you hear. If you’re self empl, it’s not more difficult to get a loan. Additionally, these days, there’s nothing special about being first time buyers. May be wise to do a little more research before you start investing in RE. If you look to the left, there are some great resources. Buying a home to live in is a great place to start. I wouldn’t get more involved than finding a solid builder and spending time in their design center. One last thought. Could you carry the mortgage on just your income? If not, I’d think twice about jumping on a mortgage with a fiance. Does Canada have extradition with the US. Just a kidding, but be careful. Tell us about the RE market in Maine.

-H

7
Don't believe what you hear. If you're self empl, it's not more difficult to get a loan.

True it is does not require any more documentation than other loans, but qualifying is more difficult.

It truly depends on verifiable income. If you are self-employed and cannot use your taxes to show any kind of profit then you may have to go “stated” which while it may not be more difficult it does change the allowable parameters of the loan. (i.e., lower LTV, higher interest rate, etc.)

8

I am sorry, but when I see barriers to success I think I would be remiss if I didn’t warn you about it. I really think that you are exhibiting signs of pending failure. If marriage was not important you would not have mentioned it. If it is that important to you and you can’t get a person that loves you to do it for you, how can you get people that want to take advantage of you to do what you want then that will be problematic.

I don’t tell people what they want to hear and I am not always right, but this is what I see. But I will say put this in your thought soup along with the other information. Think of it as a problem to solve. It may just be that you need a partner to deal with some of the more aggressive parts of the business. I can’t figure out what looks pretty in a house. I use my wife to tell me if the granite matches the backsplash. Real estate is a team sport.

9

Bluemoon06 you really just shouldnt be allowed to speak in public and let me give YOU some of MY concerns. I would really think twice about doing business with someone who is so quick to judge a situation without knowing ANY facts, and if I were you, I would just stop talking all together to save yourself any more embarassment in being the discriminating ass you are making yourself out to seem. Notice how I say SEEM to be? I say that because I don’t KNOW you - see how that makes sense? The only thing I mentioned about marriage in my first post was that I am engaged and that we were not married yet (which was important info as we would each utilize the First Time Buyers discount.) Now if that was too much for you to take in and process, I would also be concerned about your mental capacity to process information for REI. To assume I need a partner to deal with the more aggressive side of business is not only overtly sexist, but again - baseless. It’s 2007 grandpa - people can be engaged and live together before they are married and be happy, successful, thriving people. I would actually be more concerned with the obvious amount of time you spend in the internet, racking up over a thousand posts on a message board. Not much of a life offline, eh? Your wife is probably lonely, or resentful - probably both. She lets you know if the granite matches the backsplash? I’m sorry, I have a few more braincells available than that. You are making assumptions without knowing one grain of info on my life and relationship and I personally find it rude and offensive, and am not going to let it slide. I graduated from an Ivy League university with two degrees - am going back for a third, raised over $20,000 in two charity events I organzied, and started a business from scratch that has been featured in 4 major fashion magazines this year alone - don’t tell me what I can and can not do and don’t tell me I would need a partner to deal with the “aggressive side of business”. I deal with scum like you every day and do just fine. This isn’t the Laura Schlessinger boards - it’s a REAL ESTATE board, and you are preaching to an engaged Christian. Please. I don’t need your “advice” on marriage, DNA, tips to snagging a man, etc. Please, take your “cause” and elsewhere. Your misoginistic comments arn’t welcome here.

10

I am so sorry that I offended you. I make judgments about people for a living based on small amounts of information; I can only judge you using what I am given (your post). My general philosophy is that real estate is a business and the worse time to start a business is when you need the money from that business. I saw in your post that you were not really prepared to move into any business because your life appeared really messy. But that may just be me reading really fast. You really sound like you have it more together than I thought. Being able to raise $20,000 for 2 charities is nothing to sneeze at. You are probably a delightful person…I mean a mean person…I mean a delightful person with a mean streak. I don’t know. You can probably buy all the houses you want and do very well.

11

I accept your apology and understand that you make judgements about people based on small information for a living, but as I mentioned before, I am serious when I say, you need to work on having a little tact when speaking to people. As for my life being messy - my fiance is an athlete, we move alot - I can’t change that and frankly I think we are lucky to be able to experinece all the people and places we get to, before we start a family. Some people want his autograph - you think our life “is a mess”. To each their own, I guess. That does make deciding where to live for the three months we get off messy, but is in no way definitive of my life, our life together, or my judgement abilities. Bottom line, I like real estate and am trying to find a way to make the jump into it the smartest way I can under the circumstances of my life, and the last thing I am looking for is some stranger to read waaaaaay too much into the first post I write on the subject and rip apart my character and my relationship, and not even offer one peice of real estate advice - other than stating I seem to have a problem with sequence. I think it is pretty obvious that I am not a mean person at all, but direct and straightforward, and if you are assuming that I am some sort of fluffy doormat because I lived with a man before we got married and my screen name is Snowbunny, that would be your mistake. I also know what condescending is, which would be your next mistake in the way you speak to me, and while I appreciate you saying that I can probably buy all the houses I want “and do very well”, I am smart enough to realize that it isn’t a genuine statement. That might work with your wife that matches the backsplash to the granite, but not with me. As I said before, please just refrain from speaking - you really arn’t doing yourself any favors.

12

I did not consider as much about getting a great deal as I did things like re-saleability, location, and possibility of appreciation.

I would not recommend to build especially if you know you will move again. Also, I have watched several friends go thru the process and it is a very time consuming, stressful and always seems to cost more than when you start and the contractor never finishes things exactly the way YOU want it. You can write all the contracts you want in the world, but at the end of the day is boils down to a lotof effort to manage the project. The fact of the matter is your time sunk into such a project does not add any real value. IMHO, you are better off to buy a great house that meets your needs and spend that time looking for profitable REI deals.

13

Thank you aak5454! You have given me some good points to think about…

:slight_smile:

14

Snowbunny,

I don’t think marriage has ONE SINGLE THING to do with your question.

I understand why you mentioned it. You have an opportunity to take advantage of a first time home buyers program by NOT being married.
I get it. End of story.

If I were you guy’s I’d just build a small cash savings and wait things out. I’m in New england too. Prices here are going to get MUCH better in 2008-09. We have a HUGE unwinding of real estate prices ahead. You guy’s, with some patience, can reap rewards from that. In my opinion the next 2-4 years will see prices DROP substantially from present levels.

Spend that waiting time LEARNING your market. Get some small ads out in local newspapers, tell people your looking for a house that needs some work for a good price. YOU WILL GET CALLS!!!

Go back and read some of my previous posts. All the why’s and how’s are in there.

Enjoy your life together.

HALF of all mariages end in divorce. If you guy’s are happy and work good together as a team you have half the population already BEAT!!!

Good luck.

15

At one point we were thinking of building our own house to save some money. I did a lot of reading and there seemed to be a consensus that you probably will not save money on your first property. The authors said there are things you can save money on, but in the end they tend to help pay for the mistakes that you make. The upside of course is that you would then get the house that you wanted - but that might not add too much “value” for someone else when they are buying it, when you are ready to sell.
off topic - nice to see that you are blessed with love :biggrin

16

Snowbunny-
You mention a “passion” for real estate… You also present your household as quite comfortable, with your other half making a minimum of $60,000 and yourself being a “self employed” Ivy Leaguer with multiple degrees.

From a practical standpoint, the first time homebuyer program has income caps. Furthermore, there is a minimum amount of time (at least 2 years) that you must live in the property to avoid recapture of the interest saved with this loan.

My advice, having been in the business and living here in central Maine for over 5 years, is to learn as much as you can, and then see if you still have this “passion” after actually doing it. Find a property with a good upside, buy it, and fix it up before putting it back on the market.

It makes no sense to me why you would continue to rent your own house/apartment and seek unconventional methods of purchasing investment properties. It’s putting the cart before the horse.

The wonderful thing about the business I’m in… it doesn’t matter where you OR I went to school or any other pedigree… my reputation is built on my balls and my word… and I’m not so naive as to believe that you can survive in this business without putting ANY of your own ass or cash on the line.

I truly believe that sustained success in this business requires full commitment and an aversion to schemes.