Hi All!
Thanks for finding time to read this. I'm looking to buy my first multi-family investment property, most likely a duplex or triplex in Fairfield County, Connecticut. I would likely purchase with an FHA loan, since I do not have a lot of money to put down. I would like to rent out the other units while fixing up the unit I live in. I am a project manager for a high-end real estate development firm, so a value-add opportunity would be ideal, but on top of the down-payment, added capital expenses seem unrealistic for me. I know if I find the right property, forcing equity out of a rehab would be easy, but I'm still in the rat race looking to get through a large tax bill from last year (long story). I have access to potential investors, both clients and partners in our contracting business, as well as a mother, who says she will not invest in Connecticut, but I'm sure I can persuade her if I find the right opportunity.
If an investor is involved, I'll need guidance on structuring the deal the first go-around. And no matter what, I need guidance on finding the deal! I work so many hours, that I rarely can find time to hunt for properties. My daily Zillow email is filled with overpriced properties. Are people really buying multi-family properties for these prices? It's insane.
Part of me wants to do it alone on a property that does not require much capital expenses, but part of me knows I'll find the better opportunity if I aim a little higher and find a value-add opportunity requiring more rehabilitation.
On my own, the price-points I'm looking at limit me to certain areas. One area I'm looking at is a huge rental market given it's proximity to the beach and restaurants, bars, and night-life. It is also a relatively safe neighborhood, but the taxes are so steep that this area never seems to appreciate in value over a certain point. It's right on the border of the ghetto as well. This is Blackrock, a neighborhood of Bridgeport if anyone knows the area. Right now, it seems like the home values have peaked, and none of the listed sales prices seem to allow for ANY cashflow. Every potential deal I wander across gets eaten up by cash offers with no contingencies. One property looked promising but by day 3 on the MLS, there were over 10 cash offers.
I'm sure I already know the answer from all the books and podcasts I've read, but how do I find the deal without scouring the MLS? Should I start entertaining my potential investors with a vague idea of partnering, even without a property in mind? (sarcasm) Part of me wants to save up capital, get pre-approved for a bigger loan, find an interested hard-money lender, agree on the criteria and numbers we're looking for along with a reasonable agreement between me and the lender, and only pounce when the bunny rabbit of a deal comes hopping by. Just I want to hunt the rabbit and not wait! It's starting to seem like none of the numbers are going to work until the market goes through a correction, or I start throwing in low-ball offers and getting creative.
The scary thing is I'm finding myself secretly hoping that the market crashes so that I can get started. Is that morbid? I think it's positive thinking.
I graduated college when the market was at it's worst, and I had no capital! I'm finally at the point where I can picture me being ready to act when home prices plummet again, but need help navigating this hot market. I really want to get started.
Anyway, I look forward to being a part of the Bigger Pockets community! Sorry for the long "intro". Any advice or even a conversation would be much appreciated!
Thanks,
Derek
