Apartment Building Stabilization in New Britain, Connecticut

[Michael Noto]

These forums are filled with people looking to find creative ways to make money when it comes to real estate so I thought it would be worth outlining and documenting a strategy/service @Bill Labrecque and I provide for landlords in our area here in CT.

In every market there are out of state or in state owners who are dealing with properties that have, to put it mildly, gotten away from them.  These owners are at the point where they just want out, but want to stabilize the property before selling it.  

Our typical client for this service is an out of state owner from New Jersey, New York, Massachusetts, or even in state in Connecticut that either made a mistake when hiring a certain management company or super who has essentially took advantage of the owners trust and ran the property into the ground.

This is where we come in.  For what amounts to a 4-6 month span (depending on building size and how bad of shape the property is in) we handle the complete stabilization and sale of the property which includes:

• day-to-day management of the property for a fixed monthly fee
• the identification of any deferred maintenance issues that need to be addressed and the coordination of those repairs being completed
• getting vacant units rent ready, advertised, and filled with qualified tenants (we receive a commission for each unit filled)
• coordinating the eviction of any tenant that needs to be evicted
• collection of rents and coordinating payment of vendors that perform work
• handling the sale of the property once the property has been completely stabilized

The appeal to us is the short term commitment (typically 4-6 months) and the fact that there are multiple streams of income to be had if done properly.

In the next post I will detail a specific apartment stabilization we are working on right now...

[Michael Noto]

This particular apartment building stabilization is in New Britain, CT.  New Britain has a very strong rental demand, but like any other small to mid size city there are areas that are not as good as others to invest in.  

This particular 8-unit apartment is in that zone of the city where I usually recommend that most investors stay away from, especially out of state owners.

The owner, who is out of state, is at the point where he just wants out and we were introduced to him by another out of state landlord we do work for in the city.

Here is the plan we are currently executing at the property:

• going one-by-one into the vacant units, taking care of any of the deferred maintenance, and listing the units for rent. 
• 4 of the 8 units were vacant when we took over 25 days ago and now two of them have been turned over and rented.  Our thinking is to get the place performing again rent wise so the landlord can get some money coming in
• After the units have been filled we will start to go through and get the common areas to the point where they are cleaned up and in good condition
• While all of this is going on we are dealing with the day-to-day issues that come with managing low income tenants as well.

Keep in mind, this strategy works for us because there is already an infrastructure in place. We have someone who works for us coordinating the filling of the vacant units and the day to day issues that come up.  We also have maintenance guys that are handling the repairs that need to be done.

My goal is to update this post almost every day with some insight as to how this process is unfolding through the sale of the property.