How Van Ly Turned a Maine Ranch Into a Successful Midterm Rental

Van Ly (00:00)
I turned it into a midterm rental as of now. I that I bought that ranch intentionally to live full time. And then when I bought it within three months later, I got really sick and I couldn’t sell it at that time. So I pivoted and I did a Furnished Finder and I turned into a midterm rental.

And then from there on, I just have a lot of travel nurses.

Dylan Silver (02:01)
Hey folks, welcome back to the show. Today we’re joined by Van Ly, an investor in Maine focused on building long-term wealth through buy and hold investing opportunities. Van, thanks for joining us here today.

Van Ly (02:14)
Thank you very much for welcoming me.

Dylan Silver (02:16)
Yeah, great to have you on. What does a good deal look like these days? When something crosses your desk, what does good look like?

Van Ly (02:25)
The good deal look like I would say below market price.

Dylan Silver (02:29)
Yeah, right. That’s a great place to start. You know, acquisitions is everything, right? When we talk about acquisitions specifically, and we were talking in the green room, Van, you’ve purchased a condo and you’ve also purchased a ranch in Maine, right? So two different asset classes. How are you able to find those deals? Where did you find those deals?

Van Ly (02:51)
I found the deal through a real estate agent that I work with, continue work with since I bought my condo.

Dylan Silver (03:01)
Yeah, and and you know, when we talk specifically about, you know, finding deals that are at or below right market value and not not paying so much that there’s not enough room for some relatively quick appreciation, how are you able to find those deals or how is your agent able to find those deals? Is it because of seller distress or a situation where the seller needs to sell quickly?

Van Ly (03:26)
In my at the condo you asking me the condo experience or the ranch experience?

Dylan Silver (03:33)
Right? Both. Yeah.

Van Ly (03:34)
Give you an example of the condo experience that I had back in ’08. Is that because that’s very valuable? Because that’s how I base my ranch purchase during COVID. I’ll give you an example during the 2008 market crash, real estate market crash. I bought it intentionally to live there and then

It was everything is just like on sale quickly, quickly, quickly at that time. And I said just you know, and I worked with a real estate agent at that time and they said, You need to buy this now because the the real estate is tanking. And I just on a whim and I bought it, it was listed for 200K at that time. And I was qualified to do 130 for the condo. And I told the real estate this is what I pre-qualified.

qualified for 130. And then we made an offer and then I take a counter offer to 180 and we keep going and going until the seller decided, you know what, I’m not gonna play the game. I am just gonna, you know, accept what you have and 130, there it is, back in ’08. And I bought that condo, condo for 130.

Dylan Silver (05:38)
So they were asking 280? They were asking 280 and you bought it for so basically half, right? Unbelievable. And so now when we talk about those type of counter offers, right? Was that a process that took, you know, weeks or was this something that was relatively quick? What was the seller response?

Van Ly (05:40)
Yeah.

The seller responded was I don’t care because I am moving out of the state and I’m getting married and within a month, you know, the offer accepted within a month, counter offer. Back in ’08 though.

Dylan Silver (06:14)
So now when we talk about that time frame, you mentioned where you had an approval, if I’m not mistaken, if I heard correctly. And so you were using some type of bank financing at that point.

Van Ly (06:25)
Yes, yes, yes, very much so. Yes.

Dylan Silver (06:28)
Okay, okay. So a lot of times people say that there was no lending happening, but of course even during the the crash there was some transactions happening. You just had to have everything in a row. Pivoting to the ranch deal, how did that deal come about?

Van Ly (06:46)
That deal came about through MLS through a real estate agent. He found it through MLS and as soon as the ranch was listed, he said you need to go to see the property at the time and back in two four years ago, so I think it’s twenty twenty-two doing the height of everything it’s like, you know, like

Gone within a minute or two.

Dylan Silver (07:14)
Yeah, yeah. And so was that another one where there was some back and forth and counter offers on that deal, or was that different?

Van Ly (07:22)
Is it was the same, but this this experience it was a little bit different than the one in ’08. The one in ’08 I have more leverage in terms of negotiation. But the one in 2022, the ranch, I did not have any leverage at all. There was nine offer for the ranch.

And they accepted my offer because I waived the inspection fee. The inspection clause. I waived the all kinds of escalation clause. I I just pay for closing costs. So I bought it for two thirty at the one in Freeport four years ago.

Dylan Silver (08:13)
Hmm. Well do you remember what they were asking roughly?

Van Ly (08:15)
They were asking for one ninety-nine.

Dylan Silver (08:17)
Okay, so you you actually went above the ask, but in a situation where there were multiple people bidding, you know, you were able to get it because you appeared to be the most intent on closing without having an inspection and an escalation clause. Now that ranch, different from the condo, was a midterm rental, right?

Van Ly (08:40)
I turned it into a midterm rental as of now. I that I bought that ranch intentionally to live full time. And then when I bought it within three months later, I got really sick and I couldn’t sell it at that time. So I pivoted and I did a Furnished Finder and I turned into a midterm rental.

And then from there on, I just have a lot of travel nurses.

I didn’t know at the time, I didn’t know how to do a Furnished Finder, I didn’t know anything about midterm rental. I just kind of like, okay, I’m sick. I need to live it, you know, somewhere in close to a hospital, and I need to, you know, rent it just to pay my mortgage at that time. And didn’t know anything about

special, you know, anything about money, financial aspect of earning an extra money to do anything. I would just kinda like, okay, what do I do now? Four years later I’m learning how to become a midterm landlord, some type.

Dylan Silver (10:24)
Are you doing better these days or are you still dealing with health issues?

Van Ly (10:27)
I’m getting back to my normal. I was diagnosed with early stage of pancreatic cancer. So that house is right now I have a midterm rental living in there, but they keep renewing it until long term. Every six months they say I want to extend it, my stay and extend it and extend it. So I extend it until, you know, next June.

Dylan Silver (10:51)
Now currently are are you still looking at other deals or or what’s your outlook on real estate investing?

Van Ly (10:58)
I am currently looking at the deals right now, but it’s so hard in Maine to find a good deal at the moment. There’s not a lot of affordable housing in this you’re talking about Cumberland County? I am not gonna invest in Cumberland County at all. The real estate market, you know, like from Brunswick down to

Scarborough area. I don’t know if you’re familiar with the Maine Cumberland County, but it’s the real estate market right now is really high. The minimum price range for where the town I live in right now is in Freeport and it’s about a million dollars.

Dylan Silver (11:36)
Now these properties, the ranch and the condo, are you self-managing these? Are you, you know, in touch with the tenants or do you have a property manager that does that for you?

Van Ly (11:46)
I the condo I used to hand it over to the property management until they made a big boo-boo and now I self-manage my condo. And the ranch, I self-manage my my ranch because it’s a midterm kind of thing and not a lot of property management around that area willing to do midterm property management. So I did it all by myself.

Dylan Silver (12:10)
Now when we talk about midterm rentals specifically, what is the typical stay duration of a tenant?

Van Ly (12:18)
I had a travel nurse a year ago stay three months and then she extended another month and a half through her work and then she left. And then I had another couple that does is not a travel nurse, but the husband worked for a utility company and they found me through Furnished Finder and they rented out for

initially they do it two months and then they keep extending it, extended it until like six months, and then they left. And then I have a local couple who does work, just got hired from Bath Iron Works up in Bath. And he works for Bath Iron Works, and he’s he thought he’s just gonna be there for six months. So he is a fully furnished ranch.

So he they just move in and then he and then he stayed with Bath Iron Works for another six months and then they kept having him stay another six months and then he he signed a lease and he said, Can I just stay and until June twenty-seventh? And I go, Yes. But I did not intend it to rent it out as a long term one year lease at all.

Dylan Silver (13:34)
Now, when we talk about midterm rental versus long term lease versus short term rental, each of these have a different level of intensity of owner responsibilities that you need to do on a on a monthly or or at least per changeover basis in order to manage these properties effectively. How did you choose midterm rental for the ranch?

Van Ly (14:00)
I chose the midterm rental for the ranch because based on my medical needs I want to live that house full time and I just couldn’t do it because of the travel from you know my medical needs is every three months I have to go down to Boston Mass General to get treatment and I just couldn’t figure it out, you know, if my house gonna go sideways down or up.

So I decided to do midterm rental at the ranch. It’s easier on me. If they move out, I can have it back and as of my full time resident.

Dylan Silver (14:35)
Right, right.

Van Ly (14:36)
And the condo is not viable to do midterm rental because of the HOA’s policy. The rule and regulation from the HOA. Either you’re gonna rent it out year long lease or you’re gonna rent it out to a military family, which I have done and they have to move out whenever. So that’s there’s a regulation around the condo. So I just decided, you know what?

Do a year lease at the condo is stable, you know, the midterm rental I can fix and do whatever I need it and then it just kinda like balancing out both property.

Dylan Silver (15:58)
Now when we talk about the yields for a midterm rental, you know, versus long term, it’s slightly higher, right? You’ll get percentage wise slightly more than a long term rental.

Van Ly (16:09)
Yep, correct. You are correct. You are one hundred percent correct.

Dylan Silver (16:13)
And so, you know, for folks who are looking for you know less intensive than a short term rental with lots of changeovers, or maybe they can’t do a short term rental because like you mentioned, their HOA doesn’t allow it, or the city won’t allow it, a midterm rental would be a great alternative versus, you know, going long term.

Van Ly (16:33)
Yes. I personally myself I like the midterm rental aspect of it because once I know six months is up, the release is up. And then, you know, if I don’t want them to be there anymore, I say that’s it. But the long term rental in the state of Maine currently, the political climate is very, very difficult.

And there’s a lot of issues around it and I’m just learning about renting it to a long term lease people. I can’t kick them out. I get a follow rule. I gotta and midterm I have, you know, Pacific time and they need to leave, you know. And there’s no law against midterm yet.

Dylan Silver (17:16)
Right, and so you see more issues with evictions and squatter rights, and it’s less landlord friendly once people stay there for a certain period of time and have tenants’ rights. Yeah, that that can be very, very challenging. You know, one of the things that people become wary of when investing in areas like that is exactly that you mentioned. You know, you can get into a situation where a tenant on one of your first properties…

Van Ly (17:28)
Yes.

Dylan Silver (17:43)
…is becoming an issue and now you have to pay legal fees to either evict them or you know find a reasonable solution which is oftentimes none other than eviction right? And so when you look at tenant selection in long term properties like the condo that you have what’s been your process for finding good tenants?

Van Ly (18:06)
I hire a real estate agent to do the vetting to get the client and he and I communicated, you know, he does he did all the background check, he did all the things, and he did everything else that it needed to be done to get the tenant in. And I had experience with my condo last time. A couple with a son rented for a year lease, signed a year lease.

They broke the lease early and she just like a nightmare tenant. I learned the lesson itself. A nightmare lesson. She broke the lease, I let it go and I’m like, you know, long term tenant is the worst no matter what. I don’t like it.

Dylan Silver (18:49)
I mean there there’s a lot that goes into it, right? I’m curious when people talk about investing in the Northeast, you know, one of the things that sometimes comes up is folks will look at investing even across state lines and finding someone who can be their boots on the ground, their eyes and ears on the ground. Have you ever considered investing outside of Maine? Is that something you’ve ever looked at?

Van Ly (19:13)
Not sure yet. I to me I’m considering myself a mom and pop. I’m still learning. Even though I’ve been doing it. I rely on the property management to to manage my condo up until three years ago things happened and I just couldn’t justify paying 10% fee for the property management company that

You know, I paid but they didn’t do a job, so I have to do it all by myself. And I learned the rope to do it two years ago and I just couldn’t have the knowledge to do a background check on people. So I rely I hire a real estate agent to get the tenant in there and I just pay him the first month rent and that will be it. And then the rest I can self manage myself.

Dylan Silver (19:59)
Now we are actually coming up on time here, Van. Anything you’d like to mention directly to our audience?

Van Ly (20:06)
Keep on saving, keep on looking, log on Zillow. If you work with a real estate agent, ask him you know, MLS, anything come up yet? Any any, you know, off market deal happening. I rely on my real estate agent most when he does that. That’s all.

Dylan Silver (20:27)
Van, thank you so much for your time today. Thanks for joining us.

Van Ly (20:30)
Thank you. Thank you for letting me join you.