A recent college graduate bought a home in Maine worth about $200,000 for just $540, as many Americans struggle in the current housing market.
Drake Zimba, 23, of Benton, recently closed on a three-bedroom duplex home on Gannett Street in Augusta that he intends to not only live in, but also make a profit on.
The ‘investment junkie’ graduated from Rensselaer Polytechnic Institute’s Lally School of Management in 2023. In February he became a licensed real estate broker and sales agent with Candor Reality after leaving his job at Bath Iron Works.
Zimba, who plans to earn more than $23,000 a year in net operating income, was able to complete the affordable deal with the help of seller credit and first-time homebuyer programs, two strategies that many buyers are unaware of.
‘I only found out about these programs between three and six months before I got (the duplex). I thought I was going to have to shell out, you know, $10,000 or something,” Zimba said. Bangor Daily News.
Drake Zimba, 23, of Benton, recently closed on a home in Augusta, Maine, valued at about $200,000, for just $540.
Zimba not only plans to live in the three-bedroom duplex house on Gannett Street, but he also plans to rent out the other two rooms for a profit.
Zimba, who is double majoring in business and management economics, was not originally planning to invest in property so early in his life, but was immediately drawn to the idea after his friend introduced him to his mentor Brett Brockway.
Brockway is the owner of Standard Management Company, a property management and redevelopment company, which helped launch Zimba’s journey as a new home buyer.
Zimba was soon introduced to the strategy known as ‘house hacking’, a way to generate income from your own home, by Brockway and a team of other real estate industry professionals.
Together with his mentor, Deb Hacskaylo, Zimba’s lender at Fairway Independent Mortgage Corp., and his agent, Max Hopper, they taught him about the different programs the young entrepreneur could qualify for.
“The state of Maine is just wonderful with all the different programs they have to offer right now,” Brockway said.
‘I don’t think you need to be smart. I don’t think enough people know that this can be done.’
The family room area of the house (left). The kitchen of the three-bedroom duplex (right)
The Maine State Housing Authority offers a first-time home loan program called MaineHousing helping first-time buyers navigate the complex real estate market.
The program offers fixed-rate mortgages below six percent, along with help with closing costs and down payments. Zimba said grants range from $5,000 to $14,000.
To qualify for the MainHousing program, Zimba said recipients must meet income requirements, have a credit score above 640 and live at the property.
Since he will only live in one of the house’s three bedrooms, Zimba plans to rent out the other two.
The monthly cost that future tenants will pay will not only help you get a loan, but will also help you pay your mortgage and other expenses along the way.
In addition to the stolen price of the house, Zimba also received $10,000 in seller credits, when the seller contributes closing costs, because the house needs to be renovated.
Zimba said he had to fix the roof and siding of the house and that the previous tenants removed all the smoke detectors.
Zimba took advantage of a state housing program that helped him get his first property by providing purchase subsidies.
The median home price in Augusta is $274,967, which is up 11.8 percent from last year, according to Zillow.
The cost of a home in the city is still about $129,000 cheaper than the median cost of a home in the state, estimated at $403,919. Zillow reported.
Aaron Chadbourne, president-elect of the Greater Portland Board of Realtors, told the Bangor Daily News that what Zimba accomplished is not possible in certain parts of Maine.
“In some communities, there aren’t many multifamily homes to choose from,” Chadbourne revealed.
“In parts of central Maine, there are areas where there isn’t a lot of competition for houses, so it’s certainly something you can do.”
Chadbourne cautioned that with a home like Zimba’s, built in 1900, buyers should be mindful of the preventative maintenance that will be necessary over the years.
“It’s a great way for people who don’t have the highest incomes to think about creative ways to unlock homeownership, because homeownership is really a path to creation,” he added.
Zimba’s new home and career have made him feel confident about his spending and savings, rather than just “throwing money down the drain.”
Zimba’s new home and new career have made him feel confident about his spending and savings, rather than just “throwing money down the drain.”
In the United States, the average home price has risen by more than a third to $442,500 over the past five years. But the average size of those sold has decreased in the same period.
This means buyers are now having to pay 52.7 per cent more than they would in May 2019 for a home of the same size, and this is partly due to the rise in working from home.
The trend can be seen throughout the country, but the most affected city is New York, where it has increased by 84.7 percent.
Boston, Massachusetts, also saw it rise 72.9 percent, while it soared 68.9 percent in Nashville, Tennessee.