As a company, we started by just dealing with 2-4 units in Portland. That was it. We consolodated and focused our efforts on one very specific market. We grew and became very succesful as a result.
Over the years, we've expanded into larger commercial-sized buildings and into sub markets of Portland and even other cities. We've always been high on Portland due to the inherent value and long-term equity potential. What we run into, however, are investors who (like most investors) want the numbers to "work". While it is not always clear exactly what that means, it generally refers to cash flow... something that is particularly elusive in Portland.
The solution? Well, I just put a client under contract to purchase a 6-family building in Biddeford listed for $150,000. The building consists of six 2 bedroom units, needs cosmetic and some electrical updating. Not bad, huh?
What's the catch? The catch is, you now own a 6-unit in Biddeford! Regardless of how the numbers look on paper, you now own and need to manage a building in a market that is notoriously hard on owners. Not that there's anything wrong with that... but it is work. The client who is buying this building happens to be a pro and already owns and manages many units in that market. She's doing it right. She has consolidated and focused her efforts and resources to become successful in one particular market. It is labor and management intensive, but it can be done.
The moral of the story? In a real estate market where everyone is looking for a deal, know your strengths and limitations. Having a down payment and ability to finance does not make buying a big cheap building in any city a slam dunk. You've got to possess the ability to follow through and manage your investment to it's highest potential. School's out for now...
