CT Investing Strategy

[Kyle Maglio]

Hi Everyone!

I'm an investor from central CT that's having a hard time finding deals, like many others in my area. My initial plan was to house hack a single family home, with cashflow being the main objective. Unfortunately, COVID set the single family market on fire, and finding a deal that works became even harder. I'm now thinking of pivoting to BRRRing a multi-family.

The overall goal is to scale my portfolio quickly, which a BRRR would definitely do. That said, the multi-family market is a tough one in CT as well. In terms of location, I'm thinking Manchester would be the best fit for appreciation AND cash flow, but am open to others as long as the numbers work. I was wondering if anyone has, or is trying to do the same thing, and has any advice for finding suitable properties.

Thanks!

[William Collins]

@Kyle Maglio House hacking is a great first step towards a real estate path. I know @Brandon Rush started with a house hack in New Britain and is up to three properties in 2 years.  But let's break down a couple of things to make sure it is good for you and then look at markets.

1) Are you working/ where is your W2.  Buy close to working markets here and CT and close for you to be convenient if you need to commute into the office for work.  If you are a remote worker- decide if you need a second "workspace" type bedroom or office to succeed.

2) Do you have anyone who will move with you?   If you have a family- are they onboard?  If you have friends/roommates/ significant others- are they onboard?  Would they help make your house hack successful and rent a couple rooms out from you?  I have a friend who took a huge monstrosity house in Middlefield Connecticut and made it into a crazy house hack.  He has 4 units, 2- 1 bedroom's, 1 2- bedroom, and a 5 bedroom.  He lives in the 5, has 2 bedrooms to himself for office and actual bedroom, and rents the rest of the rooms out to friends/ acquaintances and does really well.  

3) Are you going to be in Connecticut long-term? Does it make sense?

Now let's talk about markets.   I would definitely recommend some and stay away from others.  One strategy is to look for a premium town that does not have large amounts of rental houses.  They potentially getting a rental in Glastonbury, Farmington, Avon or the like town would lead to more appreciation and higher rent.  But let's also talk about Manchester.  I really like the town, especially compared to say- New Britain.  Manchester and its neighborhoods feel more alive, have great niches, and local employment.  I currently own 6 duplexes in the town and am selling 2 off due to the appreciation and paydown I have done in the last 5 years. With today's interest rates you need to look at cashflow, and less at price.  Price matters at three points in real estate.  When you buy, when you sell, and when you refinance. If you are going to keep this CT property for a long period of time, and the fixed-rate loan lets you cashflow your target amount it will not matter 10 years from now you paid 10,000-20,000 over what you think it was worth. This is provided you realistically estimate and go towards cash flow.  

I hope this was helpful. Feel free to DM me.