Diary of a 3-Family Flip in New Britain, CT

[Michael Noto]

@Bill Labrecque and I recently purchased a 3-family in New Britain, Connecticut as a flip project. Since we are expecting the rehab to be pretty be expansive we figured it would be good for a BP deal diary which we haven't done in a while. We used to diary all of our deals on here and stopped for some reason.

Here are the basics on this property:

Purchase price - $72,250

Estimated repair budget - $45,000-$50,000

ARV - $185-195k

Taxes - $4338/yr

How we purchased:

Purchased with financing from a local hard money lender who financed 80% of the purchase price and 100% of the renovations at 12% interest only and 3 points charged at closing

Unit Breakdown:

- 1st floor is a 2-bed/1-bath 900 sq ft unit - Projected rent after rehab $900-$950

- 2nd floor is a 2-bed/1-bath 900 sq ft unit - Projected rent after rehab $900-$950

- 3rd floor is a 1-bed/1-bath 600 sq ft unit - Projected rent after rehab $700-$725

How we located the deal:

- We zeroed in on this foreclosure deal after it fell out of contract on the local MLS. List price was $80,000. Took us 30 days to close it out.

In the next post I will throw up some before pictures to give an idea of the current condition.....

[Michael Noto]

@Pat McCandless I have a primary business partner that I do 6-8 rehabs a year with. We compliment each other well and have been partnering for 5 years.

The reason we flip 2-4 units more is simply because there is more inventory that falls into that category in our area and the deal flow has been there. Also, we are big on investing in better areas where we can possibly attract owner occupants and/or investors when we go to sell. If you buy in a suspect area you are really limiting your buyer pool to investor buyers.

While the strategy with this property is to sell after the rehab is complete and 2 of the 3 units are filled with tenants, we currently hold 25 units in our local market here in CT and the highest amount of units in a given building is 6. The plan going forward is to only hold properties with 6 units or more, we feel we are ready for that jump. That could change, but right now that is our focus along with continuing to flip the 2-4 unit properties & the occasional single family.