Bought a triplex for $275K in 2018. A buyer today loses $1,200/mo on the same bldg

Bridgeport, Connecticut
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Bought a triplex for $275K in 2018. A buyer today loses $1,200/mo on the same bldg

Anthony Gayle
Rental Property Investor · Fairfield County, CT · Member since 2024 · 16 posts · 6 votes

I ran my own building through today's numbers last week, and I wouldn't be able to buy it.

Bridgeport, CT, 2018. $275,000, VA loan, $0 down, about $15,850 out of pocket after paint and appliances. I moved into one unit and rented the other two. For anyone outside the Northeast, Bridgeport sits on the commuter rail into Manhattan, about 20 minutes past Stamford, which is the expensive one.

Today it's worth around $705,000, and that's a conservative read off Zillow and current ARV in my neighborhood. Rents on those same two units are up about 60%. I still live here, and those two units cover everything and hand me about $1,815 a month.

Same building at today's price and today's rate, a buyer is roughly $1,200/mo negative going VA, about $600/mo negative at 20% down conventional. No equity. No free housing. Same building, same rents. The only thing that changed is when you got in.

Here's the part that bothers me. I bought it because I'd spent two years watching people get priced out of Stamford and land in Bridgeport, and that part I read right. The bonus was supposed to be a Metro-North station that was in planning at the time. It got deferred the year after I closed and never got built. What actually moved this market was COVID.

So I was right about the direction and completely wrong about the reason.

Which leaves me with a question I can't answer from here. Bridgeport was the affordable alternative. It isn't anymore. Is the next-city-over play still alive in your market, or have the cheap cities been priced out too?

And when you look back at your best deal, did it work for the reason you bought it, or did something else end up driving it?

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Ashish AcharyaBusiness Member
CPA, CFP®, PFS · Sarasota, FL · Member since 2017 · 5k+ posts · 3k+ votes
3mo

The house hack math shifting so dramatically has a real tax angle worth flagging alongside the market story. Since you moved into one unit and rented the other two, your depreciation basis has only ever applied to the two rented units, that split matters a lot now given how much the property's appreciated, since only that rental portion's basis and any depreciation you've taken factor into your future gain if you ever sell.

If you do sell at some point, the Section 121 exclusion only covers gain tied to the unit you've actually lived in, and only if you meet the 2-of-5-years test at the time of sale, the two rental units never qualify for that exclusion regardless of how long you've lived there, and depreciation recapture on those units applies on top of that at a flat 25% rate no matter your income bracket. With the building nearly tripling in value since 2018, that recapture and gain on the rental portion specifically could be a meaningful number, worth running that scenario now rather than being surprised by it whenever you do decide to sell or convert the whole property to a rental down the line.

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  • Vijay Friedman
    Miami, FL · Member since 2026 · 766 posts · 124 votes
    3mo
    Quote from @Anthony Gayle:

    I ran my own building through today's numbers last week, and I wouldn't be able to buy it.

    Bridgeport, CT, 2018. $275,000, VA loan, $0 down, about $15,850 out of pocket after paint and appliances. I moved into one unit and rented the other two. For anyone outside the Northeast, Bridgeport sits on the commuter rail into Manhattan, about 20 minutes past Stamford, which is the expensive one.

    Today it's worth around $705,000, and that's a conservative read off Zillow and current ARV in my neighborhood. Rents on those same two units are up about 60%. I still live here, and those two units cover everything and hand me about $1,815 a month.

    Same building at today's price and today's rate, a buyer is roughly $1,200/mo negative going VA, about $600/mo negative at 20% down conventional. No equity. No free housing. Same building, same rents. The only thing that changed is when you got in.

    Here's the part that bothers me. I bought it because I'd spent two years watching people get priced out of Stamford and land in Bridgeport, and that part I read right. The bonus was supposed to be a Metro-North station that was in planning at the time. It got deferred the year after I closed and never got built. What actually moved this market was COVID.

    So I was right about the direction and completely wrong about the reason.

    Which leaves me with a question I can't answer from here. Bridgeport was the affordable alternative. It isn't anymore. Is the next-city-over play still alive in your market, or have the cheap cities been priced out too?

    And when you look back at your best deal, did it work for the reason you bought it, or did something else end up driving it?

    @Anthony Gayle
    That's a really interesting perspective. One thing that stands out is how quickly financing costs changed the math, even while rents increased. It seems like a lot of investors today are having to rely more on operational improvements or long-term appreciation than immediate cash flow. It'll be interesting to see whether the next wave of opportunities comes from different markets or simply a shift in interest rates.

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  • Stacy RaskinBusiness Member
    Lender · Member since 2022 · 1k+ posts · 531 votes
    3mo

    Interesting to hear your experience. Covid era appreciation and rock bottom rates have changed the real estate market. For those who bought before 2020 or refinanced or bought during Covid era low rates, there has been significant appreciation if purchased before or right at the beginning of Covid while those who bought during Covid have very low interest rates that may never be that low again in our lifetimes. 

    There is still money to be made in real estate. I'm seeing investors being successful in the Midwest or South on 1-4 unit properties that can still cash flow with long term rentals. These properties may not appreciate as much or as quickly as properties located in the Western coast in places like job centers in California. Usually cash flow markets are going to be different than appreciation markets especially with the current interest rates. Real estate can be bought by just paying a fraction of the purchase price through utilizing mortgages. Along with loan programs like DSCR programs that don't use investor debt to income (DTI) ratios, that combination can help an investor more easily scale and build long term wealth.

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  • Ashish AcharyaBusiness Member
    CPA, CFP®, PFS · Sarasota, FL · Member since 2017 · 5k+ posts · 3k+ votes
    3mo

    The house hack math shifting so dramatically has a real tax angle worth flagging alongside the market story. Since you moved into one unit and rented the other two, your depreciation basis has only ever applied to the two rented units, that split matters a lot now given how much the property's appreciated, since only that rental portion's basis and any depreciation you've taken factor into your future gain if you ever sell.

    If you do sell at some point, the Section 121 exclusion only covers gain tied to the unit you've actually lived in, and only if you meet the 2-of-5-years test at the time of sale, the two rental units never qualify for that exclusion regardless of how long you've lived there, and depreciation recapture on those units applies on top of that at a flat 25% rate no matter your income bracket. With the building nearly tripling in value since 2018, that recapture and gain on the rental portion specifically could be a meaningful number, worth running that scenario now rather than being surprised by it whenever you do decide to sell or convert the whole property to a rental down the line.

    Happy to connect!

    [email protected]941-914-7779
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  • Jules Aton
    MD/DC · Member since 2024 · 1k+ posts · 1k+ votes
    3mo

    Definitely sounds like a strong purchase and excellent timing but are you sure you could actually find a buyer at the price Zillow estimate? Would it cash flow if all three units were rented? 

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  • James JonesPro Member
    Investor · Collierville, TN 38017 · Member since 2017 · 1k+ posts · 718 votes
    3mo

    "Right about the direction, wrong about the reason" is the most honest thing I've read on here in a while. Most people bury that part.

    My best deal was the same. Bought it because the numbers worked day one, told myself a story about the path of development coming my way. The development never came. What bailed me out was rates dropping and rents running. Nothing I predicted, everything I didn't. If I'm honest the thesis was a rationalization and the margin of safety was the actual reason it worked.

    Which is the lesson, I think. Your building didn't win because you called Bridgeport. It won because you got in at $275K with nothing down and it cash flowed while you waited. The entry price was the margin. Everything after that, the station, COVID, whichever, was just which lottery ball came up. You built something that could survive being wrong, and then you got to be wrong profitably.

    On your actual question, the next-city-over play isn't dead but the spread got thin. When Bridgeport was half of Stamford the math protected you. Now the discount for going one more stop out doesn't cover the extra vacancy and worse tenant pool you take on. You're not buying a discount anymore, you're buying a coin flip on a place still figuring out what it is.

    Where I still see it work is one specific setup. A cheaper town that already has the thing, the rail stop, the hospital, the jobs, that's just unloved. Not a town waiting on a catalyst that may never show. You already ran that experiment. The catalyst got deferred and never built, and you won anyway, because you didn't actually need it. Buy so you don't need the catalyst. If it shows up, that's the bonus, not the plan.

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  • Wale LawalBusiness Member
    Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
    3mo

    @Anthony Gayle

    One such lesson I have learned is that it does not matter what the catalysts are, but that the investment should be in good property along a pathway of future growth. This way investments will do well because no one can foresee what may turn out to be the reason.

    Good luck!

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  • Nick Sansivero
    Rental Property Investor · Member since 2026 · 56 posts · 30 votes
    3mo

    None of my properties would work as rentals at today's prices unless I put way more down. If I was buying today I'd be looking in different markets. This heat map shows counties with high rent-to-price ratios (in red), I'd drill into these markets to see if I can find deals where the numbers work 

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  • Anthony Gayle
    OP
    Rental Property Investor · Fairfield County, CT · Member since 2024 · 16 posts · 6 votes
    3mo

    @Jules Aton Fair on both. No, I haven't tested the price. That's a Zestimate plus my own ARV read, not an appraisal.

    On all three rented, that's already what the post assumes. The $1,815 is what the two rented units net after the mortgage, and I live in the third. Sounds high, I know. That's what New York money moving into Bridgeport did to rents.

    A buyer today is negative on those same rents at today's price and rate.

    @Stacy Raskin That's the piece I was missing. I've been reading this through a Fairfield County lens where the last five years were all appreciation. Sounds like the next city over play just moved states.

    DSCR lands differently for me now. No DTI means your W2 stops capping how many doors you can stack. Different constraint than 2018.

    @Ashish Acharya Most useful thing on this thread. I knew the two rental units carried their own basis, but not what that does at sale. 121 only covering my unit, and recapture at a flat 25% on the other two regardless of bracket, is a number I've never run.

    Correction on my own figure, it's about 2.5x not tripled. $275K to roughly $705K. Doesn't change your point, just keeping my numbers straight.

    Reaching out.

    @James Jones You said it better than I did. I've been telling this as right about direction, wrong about reason. You're saying the direction call wasn't the load bearing part, the entry was. Hard to argue when the catalyst I bought for never got built and I still came out fine.

    Buy so you don't need the catalyst is the line I'm keeping.

    What I'm still chewing on is that margin costs a lot more now than it did in 2018. Zero down VA at a price that cash flowed day one isn't sitting on the MLS today. So the question is where that margin still exists, which is more or less where @Stacy Raskin landed.

    @Wale Lawal Same conclusion from the other side. Buy in the path of growth and let the reason sort itself out, since nobody can name it in advance anyway. I bought the path and then credited a catalyst that never showed up. Took me eight years and this thread to see that.

    @Nick Yamamoto Same read. Mine doesn't work at today's price either, and that's what got me looking at this in the first place.

    @Vijay Friedman Agreed. When the financing stops doing the work, the building has to.

    @Nick Sansivero That map is doing exactly what I was asking about. Which tool is that? I've been trying to answer the where question from a Fairfield County lens and it's the wrong vantage point.

    1Reply
  • Ryan ThomsonBusiness Member
    Real Estate Agent · Colorado Springs, CO · Member since 2018 · 1k+ posts · 1k+ votes
    3mo

    Your 2018 VA loan is the solution to the problem you're describing, just for a different buyer.

    VA loans are assumable. Someone today can step into your existing balance and rate instead of taking a new loan at 6.8%. The payment math completely changes. If your original rate was around 3%, the monthly P&I on your remaining balance (probably $220K or so after 8 years) is in the $950-1,000 range vs. $4,500+ on a new loan at today's price and rate. The equity gap is the real hurdle, not the financing.

    I close these full-time in Colorado Springs. The buyers who win right now are stepping into existing VA and FHA loans where the equity gap is workable. They're paying a fraction of what a conventional buyer pays in monthly P&I on the same property.

    On the next-city-over question: the cheap-city play got picked off fast in most secondary markets. But financing is a bigger variable than location right now. A 3% assumed loan on a $500K property can outperform a 6.8% new loan on a $300K property when you run the full cashflow.

    DM me if you want to think through what a buyer assuming your VA loan would actually need to bring.

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  • Ryan ThomsonBusiness Member
    Real Estate Agent · Colorado Springs, CO · Member since 2018 · 1k+ posts · 1k+ votes
    3mo

    Your 2018 VA loan is the solution to the problem you're describing, just for a different buyer.

    VA loans are assumable. Someone today can step into your existing balance and rate instead of taking a new loan at 6.8%. The payment math completely changes. If your original rate was around 3%, the monthly P&I on your remaining balance (probably $220K or so after 8 years) is in the $950-1,000 range vs. $4,500+ on a new loan at today's price and rate. The equity gap is the real hurdle, not the financing.

    I close these full-time in Colorado Springs. The buyers who win right now are stepping into existing VA and FHA loans where the equity gap is workable. They're paying a fraction of what a conventional buyer pays in monthly P&I on the same property.

    On the next-city-over question: the cheap-city play got picked off fast in most secondary markets. But financing is a bigger variable than location right now. A 3% assumed loan on a $500K property can outperform a 6.8% new loan on a $300K property when you run the full cashflow.

    DM me if you want to think through what a buyer assuming your VA loan would actually need to bring.

    The Assumable Guy544 Reviews
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