All Forum Posts by: Daniel Raposo

Hello BP Marketplace! 

This is my first time posting in the marketplace, so bear with me...

I have a new construction deal in Norwalk, CT that I was hoping to get some feedback on. Here is a pretty in depth investment breakdown and analysis of the deal.

The basics are as follows: 

2 Lot Subdivision - .75 acres with 3,000 sq ft 4 br/3.5ba

Purchase Price: $300,000

Development Costs: $900,000

Sales Price (both homes): $1,500,000

All of these numbers are conservative in my opinion. I tried to give myself plenty of room in my construction budget, and went low on the resale numbers (which you will see in the comps) Keep in mind, that my company will be doing most of the construction work, meaning site work, demolition, foundations, framing, floors, cabinetry, painting, finishes, etc. so we can cut a lot of costs in those areas. 

The property is being bought with cash, so no liens. We are hoping to finance the rest of the development using either traditional construction financing or a combination of private equity investors and construction financing. We have had interest from various lenders to put up anywhere from $500k to $750k in construction type loans (meaning paid out as work is completed) but these options would leave us with varying amounts of private equity to raise ($150k to $300k) 

What are your thoughts on this deal as I have laid it out?

Does anyone have any interest in being an investor or lender on this project?

new construction, development, fairfield county, investment, lending, lender, investor, Connecticut, too many keywords...

Hi Rebecca Peters I'm assuming you will be looking for a 203k rehab loan, which is why you're looking for a consultant. HUD has a search tool on their website you can use to search for consultants by name or area. Here's a link. https://entp.hud.gov/idapp/html/f17cnsltdata.cfm

Hi Shvonne Craig I think this would make more sense for a buy and hold investor, but really that would depend more on the rental income the property could provide. Do you have any information on the income and expenses of the property? Any buyer, whether flipper or buy and hold, is going to want to know that information, as well as more information about the second lot and the development potential there. Good luck!

Hey Connor Nolan I'm also in the Fairfield County area. Welcome to BP

Joe Gore yes, CT law allows for three months up front. You can call it what you want, first last one month security, first and two month security, etc but 3 months is the limit. Unless you rent to elderly which I believe you are more limited.

I would guess CT has similar seasonal swings as Chicago when it comes to rental markets, however in not sure what kind of tenants you're dealing with. If so you won't want it vacant past September 1, worst case October 1or else it's going to be real hard to rent. As long as they have good income, good credit, and can pay first months rent and two months security I don't see a problem leasing for a year. As for your original question, your pricing and possibly process are probably to blame for the lack of tenant. I believe in offering a great deal and making the process easy for people. No app fees, I always have an app with me or will email it to them before the showing, and let them know I can process app and do leases as quickly as a day if necessary. Finding a home is a process, the easier you make it for them the better tenants you will find.

Woody Jean Mary B. I don't believe property managers need to be licensed in the state of CT unless they are also handling the leasing or sale of real estate, but you should double check with the department of consumer protection at www.ct.gov/dcp I am confused however by your question. Are you looking to have agents or brokers find you properties to purchase? If so then they would typically collect a fee from the sellers. If you're asking about paying brokers to lease or sell properties that you have been hired to manage, the fees would typically be paid by your client, the owner, not by you the manager. I'm not sure if that answers your question since I'm not really sure what you were asking, but let me know if this helps or maybe you can clarify your question further... Just looked up some quick info, it appears that if you're not selling, exchanging, leasing or collecting rents or working for a community association (like a condo or coop) you would not need to licensed. But I'm not an attorney and that's just my two cents.

Woody Jean Mary B. I don't believe property managers need to be licensed in the state of CT unless they are also handling the leasing or sale of real estate, but you should double check with the department of consumer protection at www.ct.gov/dcp I am confused however by your question. Are you looking to have agents or brokers find you properties to purchase? If so then they would typically collect a fee from the sellers. If you're asking about paying brokers to lease or sell properties that you have been hired to manage, the fees would typically be paid by your client, the owner, not by you the manager. I'm not sure if that answers your question since I'm not really sure what you were asking, but let me know if this helps or maybe you can clarify your question further...

Hi Jennifer Proulx I had little to no money when I started looking to flip house about a year ago, but I had a comfortable income and construction experience. My suggestion is to learn as much as you can and start talking to people about investing in real estate, both people you know and people you don't. Go to BP meet ups and CT REIA events and meet other investors. Eventually you will find someone with money that is willing to partner with you and make some money, you just have to look for them and a great deal. Good luck!

If you're looking for tax auctions they are typically run town by town so you would have to get them through the town websites or tax collector offices. There was a tax auction in Norwalk this week if you want to tame a look at that www.norwalkct.org I'm not sure about foreclosure auctions though.