Looking to invest in West Hartford CT

[Viktor Zguro]

I found a property for sale in West Hartford. It’s a 3 unit building with 3 bedrooms and 1 bath on each floor. Each unit is about 1500 sq f. The rents are strong and it’s a few streets away from the busy Farmington Ave. Owner is getting 1800/1850/1990 for the units and has been getting those rents for the past 3 years. Seller is asking 640k but it also includes a piece of land that’s zoned for a residential property. You can build a duplex on this land, but the seller says it doesn’t meet the requirements because it’s a bit narrow and you’d have to apply for a variance. Basically it doesn’t have much value to me at this point in time. I think she’s asking wayyy to much for the total package. The property taxes are 14k and the insurance is 300$ a month!!!! I’m from Worcester MA and I own a few multi families and our property tax and insurance is half that and we get about the same on rent, a bit more actually. Why are the property taxes so high in CT? I really like the Farmington Ave area where all the restaurants are, and the schools are rated really well…. But the taxes are just a killer. At 20% down/4% interest, it still cash flows like 7k a year, but those taxes eat away at another 7k of potential net profit yearly. That taxes realistically should be about half of what they are now. Is CT addressing this issue? I assume this deters many investors from CT and I can also assume that CT is 100% trying to change this because it’s going to drastically limit their growth. I’ve yet to see the unit in person…but I love the area, the schools are great, the average HHI is 100k+.. it’s a great area to have a rental, it’s just the tax that makes this risky. 

Is this deal worth it? Imo I don’t think I’d offer more than 550k. 640k is way to high considering the property taxes.