Multi-family in Delaware

9 Replies

I am a real estate investor from Long Island ready to look out of state.  A few people have suggested Delaware considering the tax-friendly nature.  I am interested in larger apartment complexes and was wondering if anyone had experience in Delaware.  Please let me know.

Thank you

@Craig Schneider - Delaware's low taxes do make it a desirable to place for people to live and invest. It's also like every other state out there in that it does in fact have apartment complexes. I wouldn't say it has a high density of large apartments though. Since Delaware is relatively cheap for the area a lot of people end up in single family homes. You do have apartments in Wilmington Newark, Dover, and some areas around the shore, but it's not as many larger complexes like you find in some other places.

All that having been said it's purely anecdotal. You'd need to talk to the multi-family syndicators out there about what resources exist to identify the markets most suited to larger multi-family buildings. 

Thanks for the advice.  Delaware's lack of population is a concern, and your point about lower taxes is logical.  Being from Long Island I keep seeing people of all different ages relocate out of state due to the state income tax as well as the property taxes, especially with the new 10K cap.  It also seems like everyone is running to Texas so I am looking for places a little off the radar. The other attractive item in Delaware was the ease of getting to for me.  

Originally posted by @Craig Schneider :

Thanks for the advice.  Delaware's lack of population is a concern, and your point about lower taxes is logical.  Being from Long Island I keep seeing people of all different ages relocate out of state due to the state income tax as well as the property taxes, especially with the new 10K cap.  It also seems like everyone is running to Texas so I am looking for places a little off the radar. The other attractive item in Delaware was the ease of getting to for me.  

 I wont disagree that there aren't a lot of folks from LI investing in Philly and Delaware (Usually Wilmington/Newark specifically). Texas is a crazy growing market for lots of economical reasons. Although as the influx increases I imagine so will the need for capital improvement, and the existing tax rates wont have taken that into consideration so there would be additional increases. Of course saying that...parts of Texas have been seeing near double digit growth for probably close to 2 decades now...so they've already been having to make a lot of capital improvements. Anyway...you'll be able to analyze yourself to sleep over and over and never pull the trigger. Take a look at some of the macro economic trends that meet what you're looking for and then just be open to deals in all those places and jump on what comes together first. For the most part I have an amazing team in Wilmington, and having a great team to support your investments is super critical, so while I could go to another market and get better theoretical returns, there's a lot for me to like about where I am for now. When I get to a point where I have more time available to devote to real estate to continue building bigger and better teams across multiple markets, then I can start doing more exploration. 

On Long Island, I have my own team which has been a large reason for my success. 

I must get an offer a month to invest in Phili, which makes me feel the market is a bit overheated.  

As I keep researching I will update you guys.  

Garrett thanks for the offer.  

Originally posted by @Craig Schneider :

On Long Island, I have my own team which has been a large reason for my success. 

I must get an offer a month to invest in Phili, which makes me feel the market is a bit overheated.  

As I keep researching I will update you guys.  

Garrett thanks for the offer.  

 I don't think there are too many markets out there right now which aren't over heated. Lots of newbie investors with crazy stock market money burning a whole in their pocket looking to park it some place safer before interest rates start going up. They're okay with single digit "safe" returns because it's better than their options in the market. 

I can't compete with that since I mostly BRRRR and I have teams that "work" for me...aka I don't do it myself and therefore it's more expensive than someone else putting in sweat equity.

This means you need to develop off market leads and know that you're going to have a lot more to say no to because people have crazy expectations on what they can get when they look at what something sold for on the MLS.

Philly has lots of investors but also lots of opportunity. I just don't want to spend the time to understand the market there right now. 

Craig,

Have you considered the midwest where cap rates are higher and volatility in prices is lower? We are a sponsor that focuses on the Kansas City multi-family market and we generate COCR of 8%+. Our market has steady population and job growth too. We offer a fund that diversifies dollars across multiple assets and yields 10% or you can invest directly into a single property. Let me know if you want to learn more.

James.  

It is the same in most places in regards to MLS. On Long Island, lots of deals we see do not hit MLS, buy and sell. The commercial properties we are looking for are more of the Costar and Loopnet listings. You are 100% correct, the better deals come from reviewing off-market properties and the only way to do it is building a team.

Peter,

Thanks for the info.  We rather be the owners vs silent investors at this time.  If something changes we will keep you in mind.