All Forum Posts by: William Collins

2023 Update time for my central Connecticut journey.

In 2022 to 2023 there's a major change to my why for doing real estate. Similar to @Ben Leybovich, my ability to maintain my W2 status long-term is jeopardized through a health concern. All of the planning that I've done so far in the building has set me in a decent place to succeed long-term but definitely derailed a bunch of what I really want to accomplish in 2022.

Beginning 2021 Breakdown summary: 1 six-plex, 1 fourplex, 2 triplexes, and 12 duplexes. Total units: 40

Beginning 2022: 4 duplexes in Manchester, 1 triplex, 1 five plex, 1 six-plex in Canton, 2 duplexes in Southing, a duplex and triplex in Berlin, and a duplex, a quad, and six-plex in Bristol. Total end units: 43

Beginning 2023:

Manchester CT – 4 duplexes, 1 quadruplex and 1 5 plex

Canton CT – 1 triplex, 1 five plex and 1 six-plex

Southington CT- 2 duplexes

Bristol CT- 1 duplex, 1 quadruplex, 1 six-plex

Berlin CT- 1 duplex, 1triplex

Goal 1: 50 units total in 2021- missed this. But on track to surpass it in 2022. Finally, hit this goal and will be plateauing for a while

Goal 2: Each building cashflows $1000 or more. Each door cashflows $300 an average. In the progress of weeding/ harvesting equity from duplexes which are good- but not great cash flowers. This was accomplished and is my new mark- on track

Goal 3: Create $500,000 of equity from forced appreciation. In progress, I have a line of sight to the creation but need to close on some units and start raising NOI. NOI continues to rise due to rent growth.

Goal 4: Controlled real estate passing $3,500,000 of value. This has been surpassed.

What are my main challenges:

1. Balance:
   1. Time vs health needs vs hustle
2. Expand mastermind
3. Shift to some AirBnb to design the portfolio.

1) 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. Also I would highly recommend doing separate buys for you and the girlfriend.

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. So ask yourself are you going to house hack by the unit or by the room.

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 or Bristol. I really like both towns, especially compared to say- New Britain. Manchester and its neighborhoods feel more alive, have great niches, and local employment. I currently own 4 duplexes in the town and have sold 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 cash flow, 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 met.

@Tony Velez what region of Connecticut?

I have bought 14 duplexes in the state of Connecticut. CT taxes vary from town to town a great deal, including what it is in those taxes or not. taxes are just an expense item that needs to be factored into the profit and loss equation when you consider purchasing the house. now there are three scenarios that I see in the state. first is the house hack. buying a good duplex and a great neighborhood allows someone to free up what they're paying for rent and is in general an appreciation slash cost avoidance plan. the second scenario is a great deal. for example, I have a Southington duplex that was purchased for 200,000 it is a side-by-side three-bedroom 2 bath each house constructed in the 80s. that house wants the renovation is completed and should be generating $3400 in monthly revenue top line. even with taxes in the utilities and everything else it still is generating cash flow. the third scenario is an appreciation play. this is not one that I would follow in the state of Connecticut even though I have benefited from a great deal of its appreciation across My Portfolio. when you target a town like West Hartford or Glastonbury, something a little higher-end appreciation can be achieved.

@Nathan B.

In the state of Connecticut, it is by and far easier to evict for nonpayment of rent. any other provision that you are trying to evict for such as end of lease is harder to evict for. The tenant will not change their ways. They currently are training you to accept what they are providing. This dynamic needs to change.

Stop trying to contract with your tenants to provide services. Hire someone so that the job is done and done right.

You have two choices to proceed. One, serve the notice to quit immediately through a lawyer. In the state of Connecticut, it is required that all houses held in LLCS have evictions prosecuted through a lawyer. Realize that you will not be receiving rent the whole time and you will incur a lawyer's bill which will be approximately $1100 to $1500 depending on the lawyer.

Or two, if you are dependent on their cash flow but the cash flow is unsteady can you really rely on it? if they are having a problem making the rent currently raising the rent will make it so that their ability to pay is less and likelihood to pay is less. it sounds like you need to increase your reserves to complete this in the future and raise your rents to market rent. This choice has you tried to collect the rent at the current level for the months you need to eke by. Do not raise the rent just collect the rent if you need it to make ends meet. If you choose to have that proceed with the rent raise do it in March to make it easier to lease up if they leave. But I would expect to have to leave them based on what you said.

One thing to note: though not all towns are rent controlled in the state of Connecticut there are appeals processes which they can file for regardless of town. The jump in rent that is unreasonable could be pursued as an adverse action and be subject to mediation.

All this advice I am giving to you as someone who has wrestled with the same type of decision in the state of Connecticut. I have fifteen properties and fifty-two rental units.

@Jeff S.

Jeff I aspire to be a renter. The future hopefully holds Financial Independence and the ability to travel from city to city to experience really the best of what this country can offer. Whether that be a short-term rent scenario or a midterm rent scenario to minimize the churn that's up in the air. I think that it's important for folks who are trying to climb /hack their career ladder to keep the flexibility to move and knock it locked in.

@Steven Mercado 

Connecticut is still a great place to invest, but you need to be careful where you place your money. There are a lot of old Mill towns with multi families available duplexes, triplexes, quadraplexes and some smaller multi-units up to 12. There's a lack of 25 through 50-unit properties, especially in towns that you would like to invest in the state. It's also hard to do development work to bring new units onto the market. The market is still great for house hacking. it has some limited markets for short-term rental. the towns that I invested our Bristol, Manchester, Wallingford, Berlin, and Collinsville. Some folks have some luck investing in New Britain and Meriden is well. There is a cost of overhead of doing business in those towns. I personally do not invest in Hartford as the taxes and education base is limited.

There are investment property potential near the following colleges UConn, Central Connecticut , Yale, Wesleyan Quinnipiac, Fairfield University, and Eastern University.

The BiggerPockets rent estimator is relatively accurate for the full state so you can get a general sense of what rent would be in specific towns. There is some variability in the different neighborhoods.

The best towns to do a house hack in my opinion are West Hartford, Newington, Glastonbury Rocky Hill, And generally any good Suburban town outside of the working markets.

Primary employers are clustered along routes 91 and 84 and the Merritt Parkway. The Northeast and northwest corners of the state are both economically not working markets. They're more Rural and nature and don't have large employers.

@Kelley Ogletree

First off congratulations on knowing your why:

As a single mom, I made every financial choice based on my kids' needs at the time. We have a great life and I raised fantastic humans

When you had a strong why you succeeded at getting to your goal.   So start by making a strong new why, something like "I want to be able have my expenses covered by age 60?, so that I have my time free to spend with my grandchildren".

Secondly, you need to break down your current assets, liabilities, and spending.  You look at true expenses and skinny down what you can.  I  am  reading several things in what you wrote: 

1) On what is 9,000 of income you can only save 750.  That means you need to look at expenses to accumulate more capital to invest or do anything else. You could make it to 1,000,000 investing in index funds by 60, but you would need to cut expenses in half and contribute 5,000.  IFyour true expenses are 8,000/month your would need 2,000,000 at the 4% rule.

2) You are heavily invested in an asset not making you money.  Your house is where your capital is locked and I would think a lot of your expenses are.  You really need to look at taking that liability and moving it to the asset column.  Consider selling and buy a house hackable duplex, or renting rooms to boost your savings. Or a place like was mentioned in this week's money podcast- a house that has a built-in short-term rental. 

3) You need things that have a high return on little time or that are as passive as possible.  You in essence state your hustling 60 hours a week, and you don't have time resources or liquid money to flip.  You are not afraid of hard work, but this is about shifting strategies to make the most use of your time and money.

Looking for opinions. I have 14 units in a rural town : Collinsville, Connecticut. Nicer old mill apartments, but though there is fast Internet available, full services. The cell phone reception is poor at best and drops out in some units.

Would you install a cell repeater on the property?

@Benjamin Lemieux howdy, I  am investing here in CT as well.  Cozy.co which is now apartments.com is a lightweight place to set up with no fees.  You also can have all your service requests filed in it.