Affectionately known as the Pine Tree State, Maine has a lot to offer aspiring real estate investors. In 2019, home prices in Maine appreciated by 7.2%, and despite the challenges brought on by Coronavirus, this particular state appears to be holding the fort in 2020. Where most states are set to drop 1-5% over the next year, Maine properties are expected to drop by less than 1 percent. All things considered, this should give property investors concentrating on the Maine market reason to be optimistic.
Now let’s dive deeper into how to flip houses in Maine.
Maine House Flipping Stats
Median Purchase Price
Median Resale Price
Price Per Square Foot
Population Size In Maine
Median Household Income
High School Graduation
Travel Time To Work
Best Cities for Flipping Houses In Maine
- South Portland
Safest Areas in Maine
- Kennebunk – Safety Score: 90.49
- Cape Elizabeth – Safety Score: 89.02
- Wells – Safety Score: 88.59
- York – Safety Score: 87.94
- Falmouth – Safety Score: 87.90
Please note – All the statistics in this article are based on 2019 data. You can view the data sources at the bottom of the article.
The Basics Of Flipping Houses In Maine
- Find a property in Maine that is undervalued
- Source funding from a reputable lender
- Buy the property for a price that makes it possible to generate profit when it is resold
- Complete renovations that will increase the after repair value
- Find buyers for the property and sell it for a healthy profit margin
2. Leverage The Power of Wholesalers
Finding a good wholesaler can be very rewarding for a property flipper. Wholesalers tend to have access to all the most relevant property databases, and they often have unique personal networks. By using a wholesaler, you effectively gain inside access to their knowledge of properties in Maine.
3. Attend Bank Auctions
Bank auctions often present opportunities to purchase properties below their market value. This is mainly because banks hold these auctions in order to sell the properties as fast as possible. If you attend bank auctions with a clearly defined strategy, you can potentially walk away with a new property that fits in perfectly with your investment portfolio.
4. Use Direct Mail To Find Off-Market Properties
Although it is considered an old school technique, direct mail can still yield positive results for house flippers. Direct mail has been shown to have a higher response rate than email, and numerous studies have shown that people actually enjoy checking their mailboxes. More importantly, you might be surprised by how many people have considered selling their homes. Your letter could be the trigger that they have been waiting for.
5. Sign Up To The Multiple Listing Service (MLS)
Even though MLS listings can be competitive, it is still a good avenue for finding properties to flip. The MLS is literally a database created by real estate agents, and it is filled with property details and statistics that can help aid your research process. There is a fee involved, but one deal is all you need to comfortably cover the costs.
6. Find Foreclosures
When properties fall into foreclosure, the primary goal of the loan originator is to recoup any potential losses. This is good news for house flippers, because properties in foreclosure often sell for less than their market value. If you are able to locate foreclosure opportunities in Maine, there’s a good chance you will be able to purchase a property for less than its market value. This is why foreclosure can serve as a great platform for a potential flip.
Maine Housing Market Analysis
House Flippers In Maine Are Focusing On Good Areas: The median resale value of house flips in Maine is $228,594. This is about $20,000 less than the medium home value in Maine, which is $249,550. The takeaway here is that property investors are focusing on run down homes in good areas where they can sell the property quickly after the renovations have been completed.
Experienced flippers know how to transform the after repair value of a home by focusing on renovations that are known to increase resale value. In addition, house flippers are clearly choosing the right areas, knowing full well that the desirability of a suburb has a fundamental influence on the final sale price.
Home Values Are Predicted To Drop By 0.4%: According to Zillow, home values in Maine appreciated by 7,2% over the last 12 months. Zillow also predicts that house prices will drop by about less than 1% over the next year. All things considered, this suggests that the Main real estate market is holding the fort against the impact of coronavirus. Where most states are set to drop anywhere from 1-5% over the next 12 months, Maine is effectively bucking the trend with a relatively minor drop or 0.4%.
Less Than Average Revenue Per Flip: Where the average revenue per flip throughout the US is just north of $60,000, the average revenue per flip in Maine is approximately $50,469. For some, this might be seen as a warning sign. It means your rehab budget needs to be pretty light in order to make a profit in this particular property market.
For more details on how to figure out the right price to pay for a property in Maine, have a look at our detailed article on using the 70% rule. By sticking to this rule, you can ensure that you don’t overpay for the property initially. This can have a big impact on the net profit you make, so it’s definitely worth taking extra time when filtering through potential properties in this state.
The Labour Market Is Starting To Revover From Covid-19: From 2010 to 2020, Maine experienced a steadily declining unemployment rate. While covid-19 has caused a spike (the unemployment rate jumped from 3.6% in March to 10.8% in April), things are already starting to stabilize.
With talks of a vaccine gathering momentum and numerous clinical trials underway throughout the world, there is reason to be hopeful that the Maine unemployment rate will continue to drop in the months ahead. This is good news for house flippers, because a stable labor market will increase the demand for housing and make your property easier to sell when the renovations are complete.
If you’re committed to flipping houses in Maine, the next step is to invest time and energy into finding the best possible property. We have outlined a number of methods in this post, and all of them can potentially bear fruit.
Once you have identified a property, using a reputable Hard Money lender like New Silver can help accelerate the house flipping process. Our company is built on speed, efficiency and user-friendly technology. The online application can be completed in less than 10 minutes, and we offer instant proof of funds letters to all of our clients.