Looking for the right Market in the Northeast

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Looking for the right Market in the Northeast

Stefan Huber
Long Island, NY · Member since 2019 · 10 posts · 1 vote

Hi everyone!

I am at the stage where I am ready to get into my first deal (I have saved enough, my credit is excellent and I have the time to do so) but I am still unsure of the right market.  Being from Long Island New York the barrier to entry is so high for anything in the local area and cash flow is tough to come by.  I have analysed many areas outside of the metro New York area in the surrounding states and further upstate but have been discouraged by the fact that in all of these markets, such as the smaller Connecticut markets like Waterbury and areas such a Poughkeepsie New York, populations have been declining over the past decade due to the cost of living and the departure of manufacturing.  

Could anyone point me in the right direction as to a market (preferably within 2 hours of NYC) that has the potential for or is experiencing growth while maintaining a relatively low cost of entry into the multifamily space?  

Any advise is much appreciated!!
 

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Mark Albini
Realtor · Evansville, IN · Member since 2020 · 61 posts · 76 votes
6y

@Stefan Huber hello and congrats on venturing out!

CT is rough. I am born and raised there and I moved out for a reason. Increasing cost of living and high taxes/regulations make it hard to succeed there. Please, if you invest. Stay out of Waterbury. I've been helping my family get rid of their Waterbury rentals.

Wolcott is a great town, Bristol is okay. If you're looking specifically close to Waterbury.

Have you ever thought about the Midwest?

I help my family(from CT) as well as a bunch of out of state investors invest here. Where I'm located, your median price range is 75k (most rentals, I aquire for around 50-60k, I just picked one up for 14k). There are higher end rentals if you want as well. We have about 7 zip codes in Evansville Indiana. All have their different medians.

Cash flow wise. With 20% down (10-15k) on a 50-75k house. You can cashflow after property management, mortgage, insurance, taxes, anywhere from $150-300 a month.

I'd be more than happy to discuss your goals with you. Send me a message. :)

Licensed Realtor in Indiana.

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  • Mark Albini
    Realtor · Evansville, IN · Member since 2020 · 61 posts · 76 votes
    6y

    @Stefan Huber hello and congrats on venturing out!

    CT is rough. I am born and raised there and I moved out for a reason. Increasing cost of living and high taxes/regulations make it hard to succeed there. Please, if you invest. Stay out of Waterbury. I've been helping my family get rid of their Waterbury rentals.

    Wolcott is a great town, Bristol is okay. If you're looking specifically close to Waterbury.

    Have you ever thought about the Midwest?

    I help my family(from CT) as well as a bunch of out of state investors invest here. Where I'm located, your median price range is 75k (most rentals, I aquire for around 50-60k, I just picked one up for 14k). There are higher end rentals if you want as well. We have about 7 zip codes in Evansville Indiana. All have their different medians.

    Cash flow wise. With 20% down (10-15k) on a 50-75k house. You can cashflow after property management, mortgage, insurance, taxes, anywhere from $150-300 a month.

    I'd be more than happy to discuss your goals with you. Send me a message. :)

    Licensed Realtor in Indiana.

    1Reply
  • Filipe Pereira
    Property Manager · Windsor Locks, CT · Member since 2016 · 1k+ posts · 1k+ votes
    6y

    Hi @Stefan Huber congratulations on getting to the point of being ready to invest in your first deal. Honestly, given your location, it is pretty difficult to find something that makes sense to spend those hard-earned dollars on if you’re looking for cashflow and positive population growth. A 2 hour radius of Long Island puts you in Connecticut, upstate New York, Pennsylvania or New Jersey.

    Most of these locations won't work for you due to price point, and a lot of the other ones may experience stagnant or declining populations. Unfortunately, I don't know of any profitable deals out in the Atlantic Ocean yet, lol.

    If you are opposed to investing beyond that 2-hour radius, I think you will have to do the next best thing which is choose the area that works the best from your given options. I typically advise folks who are looking to get into small multi-family to not get too caught up with population growth. At the end of the day the majority of folks who are moving out of the state are in a different financial position then the folks you will be renting to. (I understand this may be a flawed logic - but really look at the demographics of who’s moving out). I tend to leave the macroeconomics to the big apartment complex players, and folks who are investing in higher-end housing.

    You may also want to consider transit-oriented development as that is becoming a key factor in major parts of Connecticut, especially along the Amtrak line. We just had a Boston-based investor spend about 60 million converting an Old Mill into apartments here in Windsor Locks along the rail. If they feel comfortable spending that kind of money, maybe the rest of us small guys are getting too caught up in the details.

    Licensed agent and property manager in CT and MA. If you have questions, I may have answers. Just ask! 

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  • Stefan Huber
    OP
    Long Island, NY · Member since 2019 · 10 posts · 1 vote
    6y

    @Mark Albini and @Filipe Pereira thanks for the response!

    Mark- I am definitely not opposed to investing outside this radius in the future, but I do want to be within that radius to start this way it can be a little bit more hands on and be as much of a learning opportunity as possible.  I will be in contact with you! 

    Filipe- Do you have any suggestions as to some strong rental markets that I should look into?  I have been checking out Meriden, New Britain and Naugatuck as well and these seem to be decent options. I plan to take a ride to Connecticut this weekend to get a boots on the ground view of the areas and want to make sure that I get a comprehensive view of the Hartford area. 

    Thanks again for all of the information!

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  • Jonathan GreeneBusiness Member
    Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
    6y

    @Stefan Huber there are deals in every market that make sense (barring major cities for price point. You may only be considering on-market properties. Long Island is not price-exclusive, there are areas where you can find what would work to start with, it's just about how you are trying to find deals. If all you are looking at is the MLS and don't know other investors and wholesalers in your market, you are missing the potential of staying close to home.

    [email protected]Podcast Guest on Show BiggerPockets Daily 667: 5 Amazing Benefits Multifamily Investments Offer (That Single Family Homes Don’t) by Gino Barbaro
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  • Filipe Pereira
    Property Manager · Windsor Locks, CT · Member since 2016 · 1k+ posts · 1k+ votes
    6y
    Originally posted by @Stefan Huber:

    @Mark Albini and @Filipe Pereira thanks for the response!

    Mark- I am definitely not opposed to investing outside this radius in the future, but I do want to be within that radius to start this way it can be a little bit more hands on and be as much of a learning opportunity as possible.  I will be in contact with you! 

    Filipe- Do you have any suggestions as to some strong rental markets that I should look into?  I have been checking out Meriden, New Britain and Naugatuck as well and these seem to be decent options. I plan to take a ride to Connecticut this weekend to get a boots on the ground view of the areas and want to make sure that I get a comprehensive view of the Hartford area. 

    Thanks again for all of the information!

    Here are my thoughts on most of Hartford County, which is where we are based out of. I don't comment on Waterbury, Bridgeport, Norwalk or the rest of the southern part of the state because I just don't know it as well. My understanding is that Waterbury and Bridgeport are typically tougher areas, but that’s just from what I’ve heard. No experience there.

    Windsor is a great "small town" that generates good cashflow with moderate chances of appreciation (relative to the CT Market)

    Granby even a smaller town feel than Windsor, rentals are in high demand and rent prices are high. Expect high prices too, though. Appreciation likely.

    Enfield is better on cashflow, but has some rough parts of town that I personally avoid (Specifically T'ville). It does have a busy shopping area, and a mall that desperately needs attention. The proximity to MA is a benefit.

    Manchester strong rents, but getting into the market can be tough, as multis are priced accordingly.

    West Hartford if you're in this town you're probably banking on appreciation, not cashflow.

    Glastonbury Strong rents, but expensive. Multis / rentals are not common, and in demand. Appreciation likely.

    East Hartford Mostly a B/C class community. I like it. Rents are strong, proximity to downtown Hartford is a major plus. Prices have gone up steadily since 2015/2016.

    New Britain     Still has quite a negative stigma, mostly due to crime. I hear it all the time when I'm showing tenants units in other towns and I get asked "Do you have any other units available." You can see the expressions if you say "Yes we have one in New Britain." We manage in town, but I don't feel comfortable enough to purchase in NB myself. That being said, prices can be attractive.

    Bristol Strong rental market. Seems to always have demand given proximity to Hartford, Waterbury and Meriden.

    1Reply
  • Lynne Demond
    Member since 2018 · 11 posts · 5 votes
    6y

    I second the Evansville Indiana suggestion.  I moved here 3 years ago from Boston for a job.  I could no longer afford anything in the Northeast but have bought 4 properties in the last 3 years in Evansville downtown.  There is a revitalization ongoing but you can still find real estate in the lovely downtown area that is very affordable if you want to put some work into rehab.

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  • Sam Abazari
    Lender · Chicago, IL · Member since 2020 · 53 posts · 30 votes
    6y

    Hi @Stefan Huber! Am happy for you that you'll soon be venturing into the world of real estate investing! It's one of the best decisions I've made. That said, making that first step is also quite challenging, especially if you're based in LI and prices tend to be elevated near a metro area like NYC. Have you considered looking into properties in Massachusetts? Many definitely fit your criteria of "experiencing growth while maintaining a relatively low cost of entry." 

    Of course, that'd mean you'd have the extra upfront work of finding a trustworthy property manager, but in the long term it'll definitely be worth it. As you've probably figured by now, the forum itself is a super useful and supportive platform to look for recommendations / build your network! I'd also be happy to connect and chat more about the market here in MA if you're interested. 
     

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  • Craig Bellot
    Property Manager · CT · Member since 2014 · 687 posts · 329 votes
    6y

    Hey Stefan!

    The first steps I would recommend as a new investor is to get a handle on analyzing the income, expenses and ROI of these properties in Bridgeport CT. Connecticut in general is in a sellers market. You will need to be creative in negotiating to get the price / terms you need.


    You can use the Bigger Pockets calculators to start. Right now rents are strong, you can get $800 for a 1 bed, $1100 for 2 bed, and up to $1300 for a 3 bedroom. Use Zillow and rentometer.com to get data and analyze a few from your home to see what type if returns there are.

    If these meet your investment criteria then start looking in person by contacting the listing agent.

    Let me know if you have any questions.

    Craig Bellot  

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