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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 struggle in today's housing market.
Drake Zimba, 23, from Benton, recently closed on a three-bedroom duplex home on Gannett Street in Augusta that he intends to not only live in, but make a profit from.
The 'Investment Addict' graduated from Rensselaer Polytechnic Institute's Lally School of Management in 2023. By 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 make more than $23,000 a year in net operating income, was able to complete the affordable deal with the help of seller credits and first-time homebuyer programs- two strategies that many buyers are not aware of.
'I only knew about these programs three to six months before I got [the duplex]. I thought I was gonna have to shell out, you know, 10 grand or something,' Zimba told Bangor Daily News.
Drake Zimba, 23, from 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 home on Gannett Street, but also plans on renting out the two other bedrooms to make a profit
Zimba, who double-majored in business and management economics, did not originally plan on investing in a property so early in his 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 business, that helped kick start Zimba's journey as a new 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 housing industry.
Along with his mentor, Deb Hacskaylo, Zimba's lender with Fairway Independent Mortgage Corp., and his agent, Max Hopper, taught him about the different programs that the young entrepreneur could qualify for.
'The state of Maine is just wonderful with all the different programs that they have to offer right now,' Brockway said.
'I don’t think you need to be savvy. I don’t think enough people know that you can do this.'
The family room area of the home (left). The kitchen in the three-bedroom duplex (right)
Maine's state housing authority offers a first home loan program called MaineHousing which helps first-time buyers get on track in the complex housing market.
The program offers fixed-rate mortgages below six percent, along with help on closing costs and down payments. Zimba said that the grants range from $5,000- $14,000.
To qualify for the MainHousing program Zimba said that recipients need to meet income requirements, have a credit score above 640, and need to live on the property.
Because he will live in just one of the three bedrooms in the house, Zimba plans to rent out the other two.
The monthly cost that future tenants will pay not only helped him secure a loan, but will help him pay off his mortgage and other expenses along the way.
In addition to the steal price on the home, Zimba also received $10,000 in seller's credits- when the seller chips in for closing costs- because the home needs to be renovated.
Zimba said that he had to fix the roof and siding on the home and the previous tenants took out all of the smoke detectors.
Zimba took advantage of a state housing program that assisted him in securing his first property by giving him grants toward the purchase
The average price of a home in Augusta is $274,967, which has increased 11.8 percent compared to last year, according to 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 Bangor Daily News that what Zimba achieved isn't possible in certain parts of Maine.
'In some communities, there isn't a lot of multi-family housing stock to choose from,' Chadbourne revealed.
'In parts of central Maine, there are areas where there’s not a lot of competition for houses, so it’s certainly something you’re able to do.'
Chadbourne warned that with a house like Zimba's, which was built in 1900, buyers need to take into account preventative maintenance that will be required over the years.
'It’s a great way for people that don’t have the highest income to think about creative ways to unlock homeownership, because homeownership is really a pathway to creating,' he added.
Zimba's new home and career has left him feeling confident about his spending and saving, instead of just 'throwing money down the drain'
Zimba's new home and career has left him feeling confident about his spending and saving, instead of just 'throwing money down the drain.'
In the US, the price of the average home has jumped more than a third to $442,500 in the last five years. But the average size of those being sold has shrunk in the same period.
It means that buyers now need to pay 52.7 percent more than they would have in May 2019 for the same sized home, with a surge in working from home partly to blame.
The trend can be seen nationwide but the worst-affected city is New York where it has increased 84.7 percent.
Boston, Massachusetts, has also seen it jump 72.9 percent, while it has shot up 68.9 percent in Nashville, Tennessee.