All Forum Posts by: David Constant

Welcome to the BP community :)

My 2 cents on this: it seems like partnering up with your friends will allow you to invest more quickly than if you wait and save the money yourself. If this is true, I would definitely encourage you to do so. Any time you go into a financial endeavor with friends (or anyone else for that matter), you want to keep a few things in mind:

-I'd recommend connecting with a lawyer and forming an LLC. When you introduce money to the equation, it's important to protect everyone's interest (financial and otherwise). By forming an LLC with a lawyer - and by getting clear on roles, responsibilities, voting, etc. - everyone will be on the same page when it comes to decision-making. You want to guard against a scenario where you find a deal but your friends say no because they're in charge of the money.

-outline the process beforehand, to the greatest extent possible. While you may have to consider changing course midstream, have a plan of attack before you launch into this partnership. For example, are you searching for SFHs, multi-families, short-term rentals, etc.? Do you have a contractor connection? Who is your attorney? Lender? Real estate agent? Building the team in advance and having a clear goal and making sure all partners are in support is crucial.

Just a couple of initial thoughts - DM me if you want to talk more!

Hi @Paul Meiners! Welcome to the BP community. Given what you shared above, it sounds like you're not an ordinary "newbie," but I appreciate your humility and willingness to learn and grown with everyone else. That's what makes RE Investing so great!

There's a lot to chew on in your post, but I'll try my best to share a few responses and then some advice.

1. You're right; finding a property to do a traditional BRRRR is a tall task in CT right now. With inventory as low as it is and interest rates where they are, it's a challenge to find a property under market value with the chance to force immediate appreciation. Folks are doing it, but it will require lots of patience and a fine tooth comb. I'd recommend getting connected with a trustworthy wholesaler.

2. House hacking another multifamily - especially because you could use an FHA loan sounds like a great way to go. I'm not sure where you live now, but depending on where you're looking, there are lots of great places where you can still house hack for free (the other 2 or 3 tenants pay for your entire mortgage). If your long-term goal is to build out a portfolio of properties, this seems like the best next step to get there. This will allow you to build your portfolio, leverage your current home as a rental and create additional cash flow, and save on paying a mortgage for the time being. If you sock that money away, you'll be able to buy another multifamily in the next year or so.

3. If your goal is to create immediate cash on hand, finding a partner and going in on a flip would be a good option. However, this again is incredibly challenging right now given the low inventory.

4. If you can find a single family that can fit you comfortably, that's a great option, however that will be challenging with $10k saved for a downpayment. 

5. Have you looked into Down Payment Assistance or Time to Own funds? I've worked with a few buyers who have successfully used both to purchase a home despite not having a lot of their own money saved for a Down Payment. The TTO funds tend to run out quickly, so make sure you talk to your agent/lender to make sure they're still available.

This community is a fantastic resource, too! You're smart to post here and get some advice. You'll learn a lot!

Good luck and let me know if you have any questions!

Hi Keith - Welcome to CT; we're happy to have you!

As Sam mentioned, inventory statewide is at all-time low, so if the angle is "can I buy under market value and turn a quick profit?" the likely answer is no. I've done wholesaling in the past, and while some of the massive wholesalers who are saturating the market are having some success, getting started is challenging right now (although not impossible). Sellers know the market is advantageous for them, so not many folks are willing to let their property go for anything lower than market value.

In terms of long-term investing - or even STRs - the market is very strong. Even though property values are increasing by the day, so are rents in many places. SFHs in the right town have very high rents. As one example, I live in Glastonbury and a standard SFH with ~1500sqft, 3 BRs and 1.5bathrooms can fetch well over $3000/month if it's in good condition. The same can be said for multi-family investing.

While you're unlikely to land a true BRRRR and you most definitely have to leave money in the property, cash flow & appreciation is very much strong if you're looking in the right places.

Happy to talk more! Good luck!

@Anthony David What kind of work are you looking to get in particular? Depending on the specific projects I have a whole list of folks I'd refer out. Let me know!

David Constant

Welcome @Kenneth Hadinoto! How's your search going? Any luck?

Hey Kalidas - 

This sounds great! I live right in Glastonbury, so this would be a great fit for me. Unfortunately, I won't be able to make it this week because I'm taking the GHAR Realtor class online right now, but what are some other ways to connect with you and your team? Also, do you host this meet-up at Maggie McFly's every month? Thanks!

@Pallavi Irshad Welcome to the BP Community :) It sounds like you're definitely asking the right questions and thinking the right way. Rentals in Hamden are definitely in high demand and cyclical just like rentals elsewhere. Because you've got a diverse market in that area - working professionals, families, college students, post-grads, etc. - you won't have to worry about demand, especially if you're planning to make the property nice. In terms of $1650 vs. $1800 - that's hard to predict without knowing the details of the specific property. There are 2bd/1ba properties in that area listed for as much as $2150 on Facebook marketplace right now. Get yourself a good agent who is willing to hustle and who knows the market. They should be your #1 ally and resource. I've got a couple of people in mind. DM me if you'd like to talk more. 

@Andres Gomez welcome and good luck to you :) This is definitely the right place to learn, grow, and network on your way towards financial independence! The short answer: yes, rents and property values will be increasing in Southeastern CT. How quickly or by how much? That's a little bit harder to predict. We know that rents always go up - always. And we also know that with rising interest rates it's likely - not certain - that homebuyers may be priced out of the market. This means more people having to continue to rent. With growth at Electric Boat, reinvigoration projects in New London County, and general migration throughout the state, I'm seeing big things for the rental market in that area of the state. Let me know if you want to connect and discuss more.

Hey James -

You are well on your way to building some long-term wealth for you and your family; great work! House hacking is one of the best ways to build your portfolio with as little out of pocket as possible. If you've got the right relationships with lenders, you've got a few options at your disposal. With FHA letting you go 3.5% down, that's always a sensible option. But you're right, you can only have 1 of those out at a time. If you're concerned about rising interest rates, there are some workarounds with the right lender. Also, remember that your wealth-building is long-term and these interest rates are likely short-term. If you can refinance - even to a 5-6% rate - and still cash flow in your current properties, this might be worth it just to lock up a new property with only 3.5% down. Think of it this way: whether you buy the new property with an FHA loan (meaning you've got to refi out of your current loan) or with a conventional loan, you're looking at a higher interest rate on your new purchase. You might as well have a lower down payment with an increased rate vs. a higher downpayment with an increased rate. I've got a few connections that I think could benefit you. DM me and I'd love to talk more.

Hey Paul - Glad to see you're ready to jump in and take action! That's really what it's about :) Are you open to other areas in the state or exclusively Fairfield County? What are you guys looking for specifically: fix & flip, buy & hold, do you care about appreciation more or cash flow? are you interested in short-term rentals? Thinking through all of these can be incredibly helpful as you surround yourself with a strong team of lenders, agents, contractors, and property managers.