Why does Connecticut look so good for deals?

Question

I constantly search using keywords to find potential deals. Problem is, I don't see many at all here in Massachusetts, unless I am doing something wrong.

It seems like there are a TON of low priced homes in Connecticut. This is a headache for me, since I have to drive 90 to 100 or more miles to get to them. I have made some contacts with a Contractor down there, so I have that in place.

I believe, I should start out with a lawyer reviewing my contracts, and I have gotten some referrals here for that as well.

It is TIME for me to pull the trigger. I still have not mastered the Estimating Rehab costs, so I am going to be relying on the Contractor a bit more than I want to. Any advice about this?

Should I find a Home Inspection company to inspect the properties and take pictures for me? or hire someone off Craigslist to take them. Doing the latter, has some implications and potential problems associated with it.

I would like to buy, flip and sell remotely from here and only travel down to CT when and if it is absolutely necessary.

Obviously, I need to get the ARV nailed down with Recently Sold properties off of Trulia.com or some other website.

How can I make offers on these properties. What are the steps, please??

When does Title Insurance come in?

My offers will need to have expected legal expenses factored in, until I understand the laws in Connecticut.

I have more questions, but I will keep it shorter for now?

Again, my goal is to get an interest in the prop, or get it under contract, then inspect without going down there to CT, then buy the property, and flip to another investor. I want to do this with confidence and eliminate un-necessary trips that could become very costly and time consuming.

J Scott · Answer

If you're new to investing, starting out by trying to do everything virtually sounds like a waste of time to me.  It's hard enough to learn and do this job when you're doing it yourself, but what you're suggesting is that you'd rely on other people to do the work for you without having any idea about what good quality (and bad quality) work looks like.

Sounds to me like you're looking for an easy way to make money, but you're going to find that this was is much harder...and you probably won't make any money in the process.

Just my $.02...

Karin Crompton · Answer

Hi @Ronald H. - would you mind sharing a few more details? What area of the state are you talking about, and what town/city? I live in southeastern CT (shoreline area toward the Rhode Island side) and I don't see a ton of great deals on the MLS, assuming you're talking about properties that are listed. I know there are some cities here in CT that have deceptively low asking prices, but there's usually a good reason for it.

I don't mean to throw cold water on your plan, which might work out very well; it just depends on the area. And I always get nervous for people who are tempted by low asking prices. There should be a lot more criterial than that.

As far as making offers, you would probably hook up with an agent. This sounds like it could be your best bet, as you'd need a local expert who knows the area, knows contracts, etc. Make sure that agent knows how to nail down ARV, which is going to be the toughest thing for you to figure out in this long-distance scenario. It could be really easy for someone to blow smoke and tell you a house is a great deal when it's not - how would you know? That agent should have some idea about the rehab process, too. You don't want someone who sees a low asking price, sees a good ARV, and has no idea of the work and cost in between.

Title insurance comes in at closing; your closing attorney will arrange for it and it will show up on the settlement statement.

A home inspection company isn't a bad idea, though you might not have time for that if it truly is a good deal. You'll be competing with rehabbers who got into the house right away and are submitting contracts with little to no contingencies. These houses don't typically undergo a full inspection prior to purchase.

Hope that helps, and good luck with the plan! If you find anything in my area, let me know (tho if it was on the MLS, I probably already saw it. ;-)  ).

J Scott · Answer

The problem is, you're looking for publicly listed deals.  That was a fine strategy a couple years ago when half the properties listed on the MLS would make good flips, but these days, you're not going to find a lot of great deals on the MLS -- whether in MA or CT.  There may be a lot of deals listed, but I doubt many of them are good enough to wholesale.

You need to focus on finding off-market deals.  Direct mail, bandit signs, advertising, networking, etc.  These are the deals where you won't be competing with a hundred other investors and you'll have an opportunity to pick things up for below-market value.

Ronald H. · Answer

Thanks everyone.

To comment on Cameron above. I do kno my Market. I have been following sale and creating my own databases of comps with all property details, such as beds, baths, total rooms, lot size, garages or not, and assessed values and sale prices of all sold homes in Saugus. I do have a strong knowledege, but it takes me too much time to create these databases, so I will have to get it from someone else or outsource it, in the future, to free my time to find deals. I have been tossing around the buy and hold idea. I will need to clean out my current home fairly quickly and make the decision pretty soon. Don't really want to be a landlord, See my post titled "Do I really want to be a landlord from last week or so." Thanks for your feedback.

To answer Daniel above. Yes, Wholesaling is what I want to do, not getting anywhere until I can estimate rehab costs, I guess. Need to find a good reliable contractor that will not eat up all the profits just with his rehab costs. I do have money, and I know that the Marketing is important. I have a fear that I will spend 5K and not get any results. That would be painful. I have never been good at sales, so that scares me too. Still, with all this, I just cannot rest this idea. The time is nearing to either do this, or put it to rest.

I

Ronald H. · Answer

Hi, Jonathan

Until December of 2013, I had a contractor that lived next door. He has moved now. The ntwo areas I need to get under control to start off are Estimating Rehab Costs, and yes, if I can find one that would show me. I could speed it up and accept less, each transaction.

Problem with the guy next door, is he is very expensive, however he does have a godd reputation. I don't know if we could make it work. He still comes down to his old house, next door to me, so he could still be available, but we had a fallout about an estimate that he gave me at an earlier time. I was concerned about some fees that he was quoting, and he got annoyed and left the negotiations on a bathroom update that was then given to another local contractor. I later asked this neighbor if he would provide estimates and he said, Yes, but I wonder.

To change the topic for a moment. I have seen a few CT properties and ran comparable searches, using Trulia and their Recently Sold criteria. If these bargain home ads were legitimate, then there were a few homes that looked like they were asking 50% to 60% of the recently sold ones. They all needed repairs, though, but it seemed like there would be amplee room to make money.

I am living in Mass and I would like to get a smaller place and have some $$$ in my pocket to move and live cheaper, while getting to know my new market. I first have to remove a lot of personal items.  Depending on what I get for my home, I could move and perhaps have a little more money to use for start up costs, such as Marketing costs and R.E. Membership fees.

Jonathan Makovsky · Answer

Hi @Ronald H. have you considered partnering with someone who knows the construction side of the business to help you with your deals to put together your SOW? Personally, I met my business partner through BP, and it has been great so far.

Obviously a partner will dilute your profits on a single deal, but it should also mean you will be able to do more deals  (among other advantages). Also, if you have a partner that lives in Connecticut, you can probably drive down to CT less too - which sounds like that's your goal.

Cameron Norfleet · Answer

All great advice up there. I really wouldn't recommend trying to flip or even wholesale in CT if you're not familiar with the market. If you do, find an equity partner that knows the area. There are plenty of them on BP. But I really think that you're opening yourself up to more risk than you should by doing so.

If you're not finding great properties to flip in MA, why not just adjust your strategy. Maybe consider buy & hold.

Ronald H. · Answer

Thanks. I do agree that I need to have the skills to estimate the fix up costs. How long could it take to get them?

I have purchased the Estimating Fix Up Costs book from Biggerpockets, although I really want to get started as soon as possible. Even with the book, how long should I wait, in order to get started?

Getting started now, is the only way I could change my financial picture in a time frame to my liking.

It does not appear as if there are many deals in my area. Everytime, I do keyword searches of the Internet using keywords, such as "Must Sell" "Rehab" "Moving" etc, I end up seeing many in Connecticut and Rhode Island and hardly any in Massachusetts.

Jeff S. · Answer

I'd agree with the posted experts here. My experience is all these people you are hiring may well take up all the profit. You will need to be very knowledgeable about something (values, rehab costs, ARV, rental market) and you have not done the work yet to be there.

If you are a gambling man you might just pick up one of these and try it out. Are you paying cash?

In rereading your post it sounds like you want to wholesale. Good wholesalers have the knowledge you are lacking. This game takes at least a good sense of business. Do you have that?

Why does Connecticut look so good for deals?

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