I live in Connecticut and came across an investor privately selling multi-family that cash flows well in Windsor VT. It's about 3 hours from where I live and with the lack of good deals on multis in CT I am seriously considering buying this property. Does anyone know anything at all about Windsor and the market there? Any info would be appreciated! Thanks!
@Phillip Tutino I have property in Chittenden County Vt, which is probably 2 hours north. Vermont is very tricky because well it's in the middle of nowhere... How big is the unit? I'm assuming it's older? Is it rented? Vermont, unlike Massachusetts and Connecticut and Rhode Island get a lot different winters and the wear and tear through out the winter and negative temperatures can do a number on the wrong property... Inspection and age is key. Good luck .@Ashley Wishinski is a great resource up in VT. Hope that helps.
@Nick Britton Thanks for chiming in! It is rented with a good double digit cap rate. I hear you about the winters! It has had the roof replaced 5 years ago and all windows replaced, Electrical was updated as well. Yes it's older like many multis up here. I agree VT is hit and miss so I need to dig a little deeper on demographics and take a ride up this week. There is one tenant on section 8. If I make the offer it will def be contingent on inspection.
On a side note how is FL working out for you? I have been trying to educate myself on that market as well with thoughts of buying something turn key there as well. Long term my plan is to leave CT as the tax burdens are ridiculous! :)
I'm a fairly new investor and I'm in Central Vermont. I'm learning that multi's in some of these smaller Vermont towns can be a good deal. If it's in good condition without a lot of deferred maintenance and it has a strong rental history, I'd consider it. Being that distance from the property, I'd want a good property management company.
Hey Phillip! Great to meet you on here.
I have a few questions for you. Do you own any other rental real estate? Or would this be your first go at it?
I own a property management, but our service area is just around Burlington. That being said, all of our current investments are in the same area because it's the market we know well and feel comfortable investing in.
Over the years, we have looked at investing in other areas of the state and even country. We've decided to invest locally because we can manage it ourselves and because we know the area and are confident on the returns. The local market for housing is strong in the BTV area and we've been nervous about that in other locations.
What we have found to be helpful to attract quality tenants in our area is to improve the units to attract people who can afford to pay a little more. We tend to attract the cream of the crop and we take good care of both the tenants and the buildings. Not sure if that would work in Windsor, but thought I'd put it out there.
All real estate deals come down to analyzing the risk verses reward. I'd suggest running your numbers with at least a 20% vacancy rate (just to be safe) to make sure the deal still cash flows even if someone stops paying rent for a bit or you have a vacant unit.
Also, researching local management companies, their rates and their average vacancy rate/turn over should help to provide some additional insight into the area and what to expect.
I hope this helps! If you have any other questions feel free to ask.
BTW, Thanks Nick for the mention. : )
@Phillip Tutino I have been to Windsor a few times. I would recommend looking into the industries that supply the jobs up there. My concern would be where do the jobs come from that my tenants would be drawing off of? I know that Harpoon Brewery is a large operation based out of Boston but they have a satellite brewery in Windsor that I imagine employs a decent amount of the people who live in and around there. You want to make sure that whatever industries are supporting the population are sustainable.
I (accidentally) found myself looking at some multis in northern nh ($100k for a 4-unit!), and initially they looked pretty promising. The big kicker was heating- unlike my market, most of these multis were on oil, with a single heating system for the building (ie landlord pays). One particular property grossed 32k per year, but 16k went to oil (never mind any other expenses)! I'm used to my tenants paying for thier own heat!
@Justin Repp brings up a great point- a few of these deals looked killer, and allegedly had good rental history. But you're essentially betting on the local job market when you buy there-- for me that's a big unknown in these more rural areas. My local market has a few colleges who help drive demand, which is a stabilizing factor.
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You guys are great I appreciate all the excellent feedback and this was very helpful! You are correct VT offers some unique situations like the Oil Heat $$ (@Eric Army)! I was told it uses 1200 Gallons per year to heat 3 units which I find hard to believe. I think it would be more. If you spent 16K on a four unit at an avreage cost of even $4 a gallon that 4000 gallons but oil I am guessing averged in the threes last year so prob more gallons. I would think my deal would use at least 3000 vs 1200 I was told. Ball park anyway
Yes also market conditions as well. I found out yesterday @Justin Repp that the McDonalds in Windsor closed. That's not a good sign form an economic standpoint. Also I found out the property is in the Flood Way, so I think I am going to pass.
@Ashley Wishinski I love the burlington area! My sister used to live there. We should talk further since you could potentially manage a property for me there if I find a deal.
Yes I do have rental property but in CT. Nothing out of state. VT is also appealing for retirement down the road as it's wayyy cheaper than CT. Taxes alone here are in the worst top three in the nation so having rentals there now would give me a place to escape to down the road where I can magage them myself.
Ooops prior post was supposed to be @Ashley Wishinski
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@Raymond B. Thanks buddy! :) I was going to try and figure that out tonight. Clearly I have not posted much! lol
@Phillip Tutino Burlington is a special place for sure! Where did your sister live? We've had great success in this market. Although prices in Burlington especially are seeming to rise more quickly than the rental amounts can cover.
I think it's always helpful to invest in your local market than to have your first investment be far away. I'll be interested in hearing your thoughts as you dig into the VT market a bit more. : ) Please let me know what else I can do to help!
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