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Southern Maine Multi Unit Market Snapshot

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As we head into winter and landlords try and embrace the often roller coaster ride of heating costs and frozen pipes I thought I would provide a quick snapshot of the current multi unit markets and attempt to put them into context with recent year sales.

The multi unit market of Portland Maine has held its value SIGNIFICANTLY better than any of the other markets in the region.  To date 77 units have sold in 2009 at an average price point of 292K compared with an average price of 302K in 2007.  Contrast this with the worst performing market of Biddeford that saw an average price of 133K in 2009, compared with 221K in 2007, wow!!
The mid coastal markets of Bath and Brunswick currently have 36 multi units for sale  offered at median prices of 157K and 198K respectively.  In 2009, a total of 17 units sold at significantly lower median prices of 155K and 144K on average.
To read the full Southern Maine Investment Report, please visit my site www.mymaineproperty.com and sign up for an Investment Package or simply shoot me an email at john@greentreemaine.com or call me anytime at 207-650-5383.
Thanks for reading,
John


Maine Business rankings released by Forbes Magazine

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The verdict is in once again, 48th out of 50 on best places to do business. Well at  least it can’t get much worse.  The only states outranking us were Louisiana and West Virgina.  Coming as no big surprise since as 2 years prior we tallied a 46th ranking in the same pole.  Broken down into 5 categories, the one area we did rank in the 25, a 16th in quality of life, so just because nobody wants to do move their business here, plenty still want to relocate and retire in Maine.  We ranked 27th on labor (educational attainment, net migration and projected population growth), 30th in economic climate (current job, income and gross state product growth, unemployment and the presence of large employers), 42nd in growth prospects (projected job,…income and GSP growth, business openings and closings, and venture capital investment), 43rd on business costs (labor, energy and taxes) and  we bottom out at 46th on regulatory environment (regulatory and tort climate, incentives, transportation and bond ratings)Â

Oh well, the Maine Lobster will have its day.. Read the complete story here


The Maine Newsletter May Issue Released

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Inventory, Pricing, Demand
Statistics for April show the continued trends of rising inventories yet increasing prices, a quandary for traditional Supply/Demand economics.  Prices were up in 3 out of the 4 counties followed with a 6.7% increase in Cumberland.  The number of properties sold increased in Lincoln and York, remained flat in Sagadahoc but saw a strong decline in Cumberland partially attributed to the Portland younger buyer’s inability to secure loans due to increasingly stringent lending practices for higher risk financing.  A general sense of “blah” seems to have clouded the markets in April, yet investor and consumer sentiment seem to point toward improving market conditions for late spring.Â

Read the entire Maine Newsletter here.


The Portland Maine Whole Foods Real Estate Boost

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Trying to think what interests people and having just done a bike tour searching out multi units in and around the East End of Portland, the love of food coupled with the desire for lucrative investments in Maine real estate  I thought perhaps a brief commentary on how I feel the local region surround the behemouth will fare over the coming years was a good subject for conversation. Driving down 295 one can’t help but notice the beacon of development Whole Foods represents.  Coupled with the newer Planet fitness next door, the Back Cove a stones throw away and the push of the city to redevelop the bayside area, the real estate, although a little rough around the edges has great potential I believe.   The brick warehouses on Kennebec streed I envision as loft condos, the single family and duplexes on streets such as Alder, Oxford, Chestnut, Hanover and Elm to name a few, shall be bought, renovated and brought back to their original splendor and  the removal and infill of the local junk yards and city of Portland public works buildings will bring larger mixed used retail, commercial and residential proprety. The area is ripe for improvement,  keep an eye on it.Â


In town Portland Maine Multi-unit Housing Statistics

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As the residential real estate markets continue to undergo tumultous times, what has been happening in investment properties in Maine. In Portland the current inventory of multi units has grown to around 90-95 properties after hovering around 80 to 85 for the past many months.    Here are some recent statistics on the current inventory levels and pricing of smaller mulit unit properties on the  East and West end.

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Current Inventory levels as of 5/15/07

                                           East End Â
               Total    Avg List Price      Per/Unit       DOM
 2 Unit        4            276                 138               110
 3 Unit        7            397                 132                38
 4 Unit        4            421                 105                41
 5 Plus        3                                  100Â
    Â
                                             West End Â
            Total       Avg List Price       Per/Unit          DOM
 2 Unit      8             349                    175                 110
 3 Unit      5             334                    111                  38
 4 Unit      4             414                    104                   41
 5 Plus      7                                        83Â


Maine Multi Unit Investment Real Estate (Part 3 of 3)

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The Numbers, its that simple!

A sample balance sheet for a 3 unit complex

Purchase Price:                        300K
Down Payment:                       60K    20%

Income:
     Rents                                 800
1000
1100
coin op laundry                    150
Rental Income                       $3050  (Monthly)
Minus Vacancy/Reserve (10%)  -$350
GROSS RENTAL INCOME        $2700
yearly                            $32,400

Expenses
Water/Sewer                   $2000
Common Electric              $300
Heat                               $3000
Maintenance                    $1000
Property Taxes                $2500
Insurance                       $1000
Total Expenses:                       $9800

Net Operating Income:         $22,600

Debt Service:
7% 30 year loan:                     $19,160   ($1600 month)

Cash Flow Yearly                   $3,440

What does this all mean?  Well the building would make you approximately $250 plus a month after all expenses, factoring a healthy vacancy rate and assuming you are putting down 20% of the purchase price.  Is this a good investment?  The key ratio to look at is the Cash Flow divided by the down payment (your equity) which in this example yields a 5.7% figure, meaning that your money invested is earning a rate of return of 5.7%, better than what your bank will offer, but worth all the headaches of managing the building?   With that said, investing in the right markets for an extended period of time will more than likely give you some appreciation not to mention the  the beneficial tax depreciation one will realize while also looking for ways to boost income while reducing expenses can siginficantly sweeten the deal.  For example if one transferred the heat cost on to the tenant, cash flow would double as would your ROE to 12%.  Thanks for reading…


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