How college graduate aged 23 was able to buy $200,000 home that will make him $23,000 profit a year with just a $540 down payment
A recent college graduate bought a home in Maine worth about $200,000 for just $540 as many Americans are struggling in the current housing market.
Drake Zimba, 23, of Benton, recently closed on a three-bedroom duplex on Gannett Street in Augusta that he plans to not only live in but also make a profit from.
The ‘Investment Addict’ 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 quitting his job at Bath Iron Works.
Zimba, who plans to earn a net business income of more than $23,000 per year, was able to complete the affordable deal with the help of seller loans and first-time homebuyer programs β two strategies that many buyers are unaware of.
βI only knew about these programs for three to six months before I came [the duplex]. I thought I had to pay $10,000 or something,β Zimba said Bangor daily news.
Drake Zimba, 23, of Benton, recently closed on a home in Augusta, Maine, worth about $200,000, for just $540
Zimba not only plans to live in the three-bedroom duplex on Gannett Street, but also plans to rent out the other two bedrooms to make a profit.
Zimba, who double majored in business and management economics, did not originally plan to invest in real estate so early in life, but he 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 start Zimba’s journey as a first-time homebuyer.
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 professionals in the home building industry.
Along with his mentor, Deb Hacskaylo, Zimba’s lender at Fairway Independent Mortgage Corp., and his agent, Max Hopper, taught him about the various programs the young entrepreneur could qualify for.
βThe state of Maine is just amazing with all the different programs they have to offer now,β Brockway said.
‘I don’t think you have to be smart. I don’t think enough people know you can do this.’
The family room area of ββthe house (left). The kitchen in the three-bedroom duplex (right)
The Maine State Housing Authority is offering an industry-first home loan program called Maine Housing that helps starters on the complex housing market.
The program offers fixed-rate mortgages under six percent, along with assistance with closing costs and down payments. Zimba said the 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 on the property.
Because he will live in only one of the house’s three bedrooms, Zimba plans to rent out the other two.
The monthly fees that future tenants will pay not only helped him secure a loan, but will also help him pay off his mortgage and other expenses along the way.
In addition to the theft price for the house, Zimba also received $10,000 in seller credits (while the seller chipped in for closing costs) because the house needed renovations.
Zimba said he had to repair the house’s roof and siding and that the previous tenants had removed all the smoke detectors.
Zimba benefited from a state housing program that helped him secure his first property by giving him subsidies for the purchase
The average price of a home in Augusta is $274,967, which is up 11.8 percent from last year, according to figures. Zillow.
The cost of a home in the city is still about $129,000 cheaper than the average 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 has accomplished is not possible in certain parts of Maine.
βIn some communities there isn’t much choice of multi-family properties,β Chadbourne revealed.
βIn parts of central Maine, there are areas where there isn’t a lot of competition for homes, so it’s definitely something you can do.β
Chadbourne warned that buyers of a home like Zimba’s, built in 1900, should consider preventative maintenance that will be required over the years.
βIt’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 way to create,β 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 career have given him confidence in his spending and savings, rather than ‘throwing money in the trash’.
In the US, the price of an average home has risen by more than a third in the past five years to $442,500. But the average size of units sold has shrunk over the same period.
It means buyers now have to pay 52.7 percent more than in May 2019 for a home of the same size, with the increase in working from home partly to blame.
The trend is visible nationwide, but the hardest-hit city is New York, where growth has increased by 84.7 percent.
Boston, Massachusetts, has also seen its economy increase by 72.9 percent, while the economy in Nashville, Tennessee has increased by 68.9 percent.