Buying Maine - A Breakdown
The purpose of this post is to add transparency to this project, including its costs. We have worked tirelessly to achieve this goal and hope to inspire others to reach their home ownership goals as well.
// Disclosure: This blog post is not sponsored. However we did create an Instagram ad with our partner Chase on this topic and make mention of My Chase Plan
Picking Our Next Big Project
We have spent over a year thinking and searching for our next big project. Would we sell our Boston Victorian and buy a farm? Should we take a swing at P-Town? Firehouse? Homestead? Vermont? Lake? New Hampshire? Ocean? Maine? It wasn’t totally clear - but we did have some basic criteria to help guide us….
OUR SEARCH CRITERIA:
The project needed to be outside of the city - ideally within two hours driving
The project needed to have over an acre of land - the more the better - and at least one of the following:
A reason you didn’t want to leave - ocean front, a beautiful lake, or a killer view
OR be in a natural landscape but close to a great small town and interesting things to do
Looking for this project seemed endless - but we kept at it, sometimes spending hours in bed saving listings and reviewing pros and cons. It wasn’t until David’s Mom sent over a listing that popped up in Midcoast Maine, just a few miles from his parents house... a 1974 chalet style cabin home.
This cabin had everything: 1+ acres of land, it was situated on a tidal river (salt water), a small stream that defined the property line, and privacy. Better yet - it is just minutes from some of the cutest towns Maine has to offer. The only criteria it didn’t meet was the drive, at over 3.5 hours away it was outside of our range… but having family nearby will make the distance much easier to manage. The property is an absolute dream, and we are still pinching ourselves.
Acquiring Maine
Maine was listed for $475,000 and, for us, would be considered a second home. This means that the loan terms would certainly be less favorable (more expensive) and we would likely need to make a 20% downpayment ($95,000.) We were referred to Camden Coast Real Estate and began the process by submitting an offer for the asking price. We hadn’t yet seen the property but our agent had, and the photos were great. We quickly drafted a letter about who we are (personally, not as the Renovation Husbands) that explained how we would love to be the new stewards of this property… after-all it was being sold by the family that built it almost 50 years ago.
// Asking Price: $475,000
// 20% Downpayment: $95,000
We lost MISERABLY, third place in fact. There were two larger offers - cash (and far above asking) - and we were crushed.
Fast forward a number of weeks and we got a call from Nikki our Realtor… the highest offer dropped out due to the scope of work, and the second offer had moved on to something else. “Can you be here tomorrow morning?” she asked… and we were basically already packing the car.
This was the first image of the property on Zillow and it grabbed our hearts
Due Diligence
After touring the property we re-submitted our offer (with an updated letter of course) and assured the seller that we don’t care about any non-critical repairs - we are not the buyers to sweat about the small stuff.
// FUN FACT: This is the exact moment we left for Colorado to film Battle on the Mountain - wild.
We did however need the house systems to be functional. This meant inspecting the now 50 year old septic system, the well, stove/chimney, and electric. Mary and Nikki at Camden Coast Real Estate took the lead and had everything inspected and quoted for us - they were INCREDIBLE. Also, shout out to David’s parents who attended many of the inspections and helped make decisions while we were away, it really became a team effort!
The reports of outdated systems began to roll in, as did the estimates… but we were not deterred.
// Estimates for Needed Repairs & Upgrades:
Chimney Cleaning and Repairs: $4,800
Water Treatment: $18,480
Well Repairs: $3,202
Septic Average: $25,100 (we had two quotes for $23k and $27.2k)
// Total cost of system critical repairs: $51,582
Touring the property with our Realtor and Family
Final Offer
During negotiations it is common to ask the seller to perform repairs or return funds at closing to pay for repairs. However, we wanted this transaction to be as simple (and straightforward) as possible by asking for a simple price reduction of $51,500. There were no other stipulations, no extended timelines, no bananas, and luckily our offer was accepted within a day!
// New Purchase Price: $423,500
// New 20% Downpayment: $84,700
// Estimated Repair Costs: $52,000
// Amount in our Savings Account: ~$60,000
Our plan for the Downpayment? We bought our Boston Victorian in 2017 and put in years of sweat equity. The house was boarded up and gutted when we bought it, and is now worth much more than we paid for it. Because of the equity we created we were able to open a HELOC (Home Equity Line of Credit) against the house. A HELOC is kind of like a second mortgage credit card - you get a special checkbook and write checks to anyone (including yourself) and use the money for whatever you want. For the last two years our HELOC has served as our business back up plan - we left our corporate jobs and if Renovation Husbands failed - we would have access to cash. Luckily that didn’t happen and we now could borrow the downpayment amount from our Boston home and invest in a new asset!
Our plan for Repairs? For this we would utilize our savings by prioritizing the septic, well, and chimney repairs for the first round. Then regroup and start on the electric and water treatment repairs. We also kept in mind that buying an empty old house has a lot of costs (we needed to buy everything from bedding to dishes).
// FAQ: We set the goal to prioritize the system improvements. This way, if something were to happen to us financially, we would have an exit plan - ie. selling Maine. As we have learned, this house would be much easier to sell with all new systems (we may even turn a profit). While we don’t plan to fail, we do create exit plans for everything that we do.
Mortgage Time
As we already alluded, this purchase would not be straightforward. Maine is a second home and in that scenario you lose access to all of the home buying perks (for good reason as a second home is a luxury purchase). What we also learned is that Renovation Husbands does not have enough business tax returns to get a conventional mortgage (as we are no longer W2 employees). That means we would have to turn to a different loan type to make it work.
Our only option was a mortgage for property investors. To qualify you would need to be buying a property where the future rents could support a large percentage of monthly costs AND you must have 6 months of expenses in savings. Fortunately we had the savings (the $60k we mentioned earlier) … unfortunately the potential rent calculator was not robust enough to consider seasonal rentals. As a response we needed to increase our downpayment from 20% to 30% by withdrawing more money from our HELOC. Its a shocking number - but our new downpayment was $127,000. The mortgage also really sucked… with an 8.75% interest rate AND a 12 month prepayment penalty. While the mortgage terms were not ideal, it was our only option.
// Final Numbers: We ended up with a mortgage just shy of $300,000, a $127,000 balance on our HELOC, plus $60,000 in our savings for future costs and repairs.
// Closing Fees: $25,230: This included in $12,000 in origination points (again unfavorable terms), attorney fees, appraisal fees, prepaid escrow fees (insurance and taxes), title costs, recording fees, and underwriting fees just to name a few. There were also some fees that fell outside of this number including inspections, and engineering drawings for the new septic system.
// FAQ: When we purchased our Boston Victorian we couldn’t use a conventional mortgage either. The house was boarded up and was completely gutted - without walls, plumbing, or electric. We used a FHA 203k loan which allowed us to finance the purchase amount in addition to the repairs needed to obtain an occupancy permit. The 203k loan was quite cumbersome to navigate (and also quite expensive) but the only option for buying that type of house.
Since Closing
We closed remotely from Colorado while filming a competition show where the house was oddly similar to Maine. Once we returned home we were eager to make the drive to Maine and pick up the keys. We spent the next few weeks doing the million little things you need to do (and buy) when you purchase a new home. It was also clear that we underestimated what it meant to furnish an entirely empty house.
Cleaning supplies (going to need a lot of these)
Trash barrels and garbage cans (no standard pickup this far out)
Lightbulbs and light sources
Storage, somewhere to sit, basic furniture
Laundry Machines < we used My Chase Plan
Kitchen supplies (pots/pans/dishes)
Small Appliances (toaster, coffee maker, speakers, wifi, modem)
Tool Storage and Duplicate tools we don’t want to drive back and forth < we used My Chase Plan
A million and one other little things
We make all of our purchases on a credit card and try our hardest to pay it off each month. Sometimes however there are larger purchases that extend past our budget. In this example it was new laundry appliances and tools/tool storage. Instead of paying off those specific charges all at once we used My Chase Plan to create monthly payment plans with no interest, just a small fee. This is just one perk that comes with our Chase card and its nice when doing projects like these.
Big Project Status
We closed in August of 2023 and immediately started work to improve the key home systems.
Completed Projects: $47,500
Chimney cleaning and upgrades: $4.8k
Septic Tank Replacement, New Leech Field, and Tree Removal: $36.9k (the scope and amount of work increased dramatically - this person also dug all of the trenches for the other trades)
Large Tree Removal: $2.5k
Well Upgrade: $2.7k
Plumbing: $640
In Progress Projects:
Electric Upgrades (Upgraded service to 200amps, added a 100amp panel to the garage with car charger, upgrade the main panel to 200amps with new breakers): ~$12k
Not Started Projects:
Water Treatment: ~$20k - we are hoping that the well upgrades improve the water quality and will ultimately reduce this number
Trenching for Well and Septic
A whoooole lotta dirt
INTERIOR PROJECTS
While all of the big improvements were underway we got started on interior projects. These included things like deep cleaning, removing a piano (harder than it looks), cleaning the basement (and removing that concrete pedestal), and updating the two guest rooms!
- Plaid Room -
The two guest rooms were performed in partnership with Sherwin Williams, this means that we were paid for creating content and we received the paint at no cost. Everything else for the project we paid for, including painting supplies. You can read more about the Plaid Room in this blog post.
// Approximate Room Cost: $2,040
// Major Costs: Bed Frame $410, Mattress $500, Bedding $200, Rug $125, Ceiling Fan $160, Curtains/Rod $70, Antique Bedside Tables $150, Upgraded Outlets and Face Plates $40, Estimated Paint Cost $350
Not too bad for significantly upgrading the space!
- Green Room -
This room was a bit more expensive but much bigger impact. Again we worked with Sherwin Williams so that helped a lot on the Paint Costs, but everything else we purchased.
// Fun Fact: One unexpected thing happened after we revealed the room… we immediately regretted no using a king bed. We sold the queen bed on Facebook marketplace for a small loss, and swapped the mattress for a small restocking fee. Finally, we kept the sheets for a backup set in the Plaid Room. Therefor the cost estimates are all based on king bed version of this room.
// Approximate Room Cost: $5,145
// Major Costs: Applied Molding $250, Bed Frame $1,780, Mattress $649, Bedding $250, Rug $416, Ceiling Fan $160, Curtains/Rod $80, Updated Outlets/Faceplates $40, Bedside lamps $700, Floor Lamp $290, Other Decor $250, Estimated Paint Cost $280
One of the factors that drove up the costs in this room over the Plaid room was the King size bed which is much more expensive than a queen. We also splurged on the bedside lamps.
Final Thoughts
We hope that this blog post creates transparency around the cost associated with the projects we share.
While we do have the privilege of working with brands to offset some costs, we ultimately achieved this goal with hard work and a lot of financial planning.
And, if its a goal of yours, we know you can too!
