All Forum Posts by: Angelo Pozzuto

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $315,000
Cash invested: $20,142

Househack, we live in one unit and rent the other. FHA on initial loan, now refinanced in 2021 with a better rate and no PMI!

What made you interested in investing in this type of deal?

Lower cost of living made saving and investing easier.

How did you find this deal and how did you negotiate it?

With a realtor on the MLS.

How did you finance this deal?

FHA 10% down

@Mathew Fuentes

A great place to start is to compare what you have to the other places renting around you. I pose as a potential renter and go check out some listings around my place from craigslist or the like. Then you have a baseline. If you want more rent than the place you just saw, it has to be a "better" apartment then the one you saw. Square footage and bedroom/bathroom numbers obviously matter, so try to stick to what you have, if you can, for the comparable rental. So does the type of housing, so if I was you, I would stick to other duplexes, and also if yours is a side by side or an over under makes a difference as well. Once you do this, if you ever buy another property in the same area, you will know exactly the type of remodeling you will need to do, a great estimate on a rehab, etcetera. Hope this helps. Congrats on the purchase! Feel free to reach out if you have any questions or want to talk shop!

~Angelo Pozzuto

@Mat O'Grady agree 100%

@Nicholas Ritieni

Welcome! I am also an investor in Connecticut. Would love to chat anytime!

Hey Sam! Nice to see another new member from CT! Feel free to reach out if you have any questions or want to talk shop. Looking forward to it!

~Angelo

Welcome to BP! Happy to hear from you!

Here's my advice- I find its easier to pick a market when you get an understanding of a criteria. If you hone in on what exactly you are looking for and then decide if a market can support that, it will be an easier problem to solve. Also, I like to preface that whatever your criteria, if you manage the property well and execute to the best of your ability, given enough time everything works. So dont stress to hard, its more important that you pick something and be consistent about it. 

First is strategy, buy and hold is a heck of a lot different then say flipping or wholesaling a house. So if you have your heart set on that, then the next thing is how you are going to buy, meaning off market, like yellow letters and the like, or more of a retail strategy. Both work, they are just different and who you go about in your execution will change. Then you lock down a market, then how much you are willing to pay to get started. I put them almost together because a lot of the time they are related, higher end properties will be more expensive if we are talking two towns near eachother. Different states or regions in a state can be totally different so do some research. If you find you cant get the right criteria in a market, just pick a different market.  But you cant really start in a market without a handle on the how and expect to feel comfortable buying something. I find comfort in knowing that this place fits my criteria, so I would start there. 

Let me know if you have any questions or want to speak further!

-Angelo Pozzuto

I help manage a buy and hold real estate company in CT and NY and we are still under a normal operating procedure. We bought a duplex in Bridgeport about a month ago and are looking for another small multi in the near future. If anything, our portfolio has benefited from a hot market from an appreciation standpoint, not that we are ever really sellers out here. I think the government subs to unemployment has really helped a lot of people make ends meet if they were affected by Covid, to date we haven't had any evictions due to the virus, and we have 30 units in Fairfield and New Haven county. 

From a buying standpoint, I think that the market is going to turn in the next 6 - 18 months. I just don't think this hot market is really sustainable forever and once the pandemic starts to calm down, people's RE buying is going to change. All the people who are in foreclosure and eviction situations will have to move, so I feel like the chaos is going to be then rather than now.

As far as growth markets, it has been our strategy to focus on cash flow in a buy and hold or BRRRR acquisition. We have been successful investors because we have a bigger emphasis on management. We don't flip homes, we don't 1031 often, its just not our bread and butter (not that those wouldn't be a sound strategies, they are just not something we do as a company). All that being said, we like the 95 corridor in southwestern Connecticut because we consider that our backyard. This makes our management a lot easier. The trends of people moving out of NYC into the surrounding burbs has pushed people who were originally in those areas further up and out so there is a trickle effect there. That's why I believe the market has been hot.

The prices in those areas are a lot higher then in other parts of the state, but honestly if you find a good deal, you've found a good deal. It will work out for you if you manage everything well. We haven't tried looking elsewhere because there are plenty of deals around. The trick is knowing a good deal when you see one, because every market is different. Hope this helps!

Hi Miguel, as someone who invests / works in both states, and has an idea of the markets your speaking about, with that kind of down payment it would be easier to find something that will work in Connecticut. That's partially because of the taxes, both income and property/school tax, but also from a overall price perspective. Personally, I don't like NY right now, I know lots of people are investing there, so it does come down to personal preference and where you feel more comfortable. My advice would be to just do something, don't fall prey to the "analysis paralysis"  

Let me know if you ever want to talk RE

~Angelo

Hi Alex, I'm living in a very similar situation, my girlfriend and I actually purchased a duplex as a house hack up in Connecticut. We used an FHA loan, so we didn't put much money down originally and when we ran the numbers, we didn't break even renting the one side and living in the other. But on a positive note, since we are going to live together anyway, its much more affordable buying a duplex as compared to, say a sfh, to live in. What is even better is that once we move out, we will cash flow more than $1,000 a month, plus your paydown and all the tax advantages we get as a landlord for half our house. I guess what I was thinking was that even if a house hack doesn't get you a positive result on a cash flow basis every month, its still better than having a place to live that will only cost me money until I sell. In Long Island where RE is pretty expensive upfront, just like in Connecticut, you probably are going to have a hard time, like I did, finding something move in ready that will cash flow enough to make money and still live in it. I don't know how handy you are or how much you would want to put into a remodel upfront, but that may still be something to consider.

Alternatively, if you are comfortable renting where you are, there are many places you can invest and cash flow, even out of state if your comfortable with that. OR you could also rent out rooms of a sfh which you would also live in (live in house hack), which can net you more monthly cash flow then renting one half of a duplex in the same market. I would run some numbers and see if you would be better off and what works for you. I feel as though every strategy in RE works, its just that some strategies are better for certain situations. A lot of it has to do with what your more comfortable with from a risk or living situation. But believe me, all three of these suggestions will make you money. All you need to do is focus on a strategy and execute to the best of your ability. The rest takes care of itself.

Hi @Aidan Hadley, 

I am also a Connecticut investor, down in Fairfield / New Haven County. Let me know if you would like to connect!