Hi All! I'm new to this community and very excited to learn from all of you.
I am moving to Connecticut in a few months to start my first job as a pediatrician, and would like to buy an apartment building in the Hartford area using the money I will get from selling my house in North Carolina as a down payment. Then live in one of the units while renting out the others, until I save enough to buy a property just for me.
My only experience as a landlord is renting out my spare bedrooms in my house to travel nurses via AirBnB. It has been really lucrative for the past 2.5 years, but I am ready to jump into the "big leagues" once I move up to Connecticut. I realize that AirBnB and a 4-6 unit building are very different, and would like to learn as much in advance to avoid making a huge financial mistake.
Any advice on how to use a realtor to buy an apartment building (or names of good ones)? Anyone in that area know areas to avoid purchasing vs good areas to buy? Any recommendations on buying a brick 6 unit building vs a house style 3 or 4 pled?
I've found some on Zillow that seem like good deals, but sometimes I wonder if things are just too good to be true (i.e. sellers stating cash flow in the ranges of 30-60K/year)
Thanks guys! -Heidi
@Heidi Kenefick it sounds like you are on a cool adventure and taking a step that can set you up for years.
One thing to consider is, if you go with a 4 unit building you can get traditional financing. Once you get to a 5 unit or larger, you will have commercial financing. Since you will live in one unit, you could get some pretty competitive financing on a 4 unit.
Also, a lot of folks when they mention that $30-60K in cash flow, they are talking about net operating income and not including any debt servicing. Just keep that in mind.
Good luck and once you find your property and move in, be sure to update everyone in the real estate success stories. I know I would enjoy hearing how it turns out for you.
@Heidi Kenefick there are a couple realtors from CT on here that will be along soon I am sure. With that said, definitely use someone with local knowledge. Hartford (if you intend to go into Hartford itself, verse the Hartford "area") has some really, really bad areas. Hartford also has very high property taxes. You will need to go over your numbers as you would with any rental, however I would absolutely be cautious on where you end up. Along side having a knowledgeable local realtor help you, I would also go see the locations myself. What on paper is an ok area, may scare you once you actually step foot there.
I have been threatened to be shot in the north end of Hartford in the past (I was working on a window replacement project and trying to get measurements) and been in a few other uncomfortable situations in different areas.
oh dear, that sounds incredibly scary!! Perhaps it would be better to stick to the suburbs...
I live in West Hartford and its a great town. I do not recommend buying in Hartford, as mentioned most areas especially, the areas zoned multi unit, are rough and border line war zones. If you do choose Hartford I recommend waiting until you live locally and do a lot of driving around to see which neighborhoods you’re comfortable living. That said, there are some great communities around Hartford, I recommend checking West Hartford, Glastonbury, Avon and Farmington. Bloomfield, Southington, Newington, Berlin are ok areas too. There are a couple local agents on BP that can help you find a property.
Btw, I moved from Charlotte, NC to CT about 4 years ago. Feel free to ask me if you have any questions about communities or properties.
@Andrew Kerr Thanks for the advice about the financing. I did not realize that the number of units makes a difference in the type of financing available. :-)
Hi @Heidi Kenefick welcome to CT and BP.
I would recommend renting for a year to get your feet wet and really experience the area for yourself. Taking on a new job and managing 3 apartments is a big responsibility if you are going to do it yourself. If you hire a property manager, you need to shop around, and ensure the rents you can get are going to cover your monthly expenses.
I would encourage taking a real estate course, potentially getting your license. I just took the course myself an learned a lot, in the process of getting my license.
Best of luck!
What area of CT are you moving to? Multi families that are also nice enough to live in are typically overpriced in south western CT. Compared to a same sized single family. You’re better off finding a single family and converting it. Provided zoning allows.
@Heidi Kenefick welcome! As @Brian Pulaski stated, replacing windows in the north end of Hartford, may be a little dicey :-) Brian is spot on with taxes. Hartford commercial properties are taxed at a much higher rate, and most of the time the #'s just don't work for the risk/reward. However, there are exceptions. You CAN find something in some sections of Hartford (Southern, West end for example), that are excellent areas to own in.
Find a good agent for sure. Find someone who has not only local real estate experience, but also an investor themselves. Agents are everywhere, but finding one that has a similar mindset to you (in terms of investing), is what you need. I know the area well, you can reach out to me directly any time to chat.
Welcome to BP @Heidi Kenefick !
These awesome fellas above me covered the big points, but if you have any questions when you get here, especially about the management of the units, feel free to give a shout!