Investor · Shelton, CT · Member since 2016 · 218 posts · 225 votes
Hello BP community!
Just wondering what local CT investors are seeing in the buy and hold market? I have a 2 family in Torrington that’s had stable renters during the pandemic and has actually appreciated over the past 2 years which is rare in CT. Where is everyone seeing this market go and do you think it’s a good market to be looking for buy-and-hold rentals? What parts of the state do you see the best prospect for either future growth or overall rental stability?
Good question- I’d be curious to hear thoughts as well. Six months ago many of us thought the sky was falling and that we’d be crazy to buy in 2020. Granted I understand we haven’t seen the end of this all, but I think the outlook is much better for those that currently hold real estate and I am personally trying to get another property in CT in the next few months.
Good question- I’d be curious to hear thoughts as well. Six months ago many of us thought the sky was falling and that we’d be crazy to buy in 2020. Granted I understand we haven’t seen the end of this all, but I think the outlook is much better for those that currently hold real estate and I am personally trying to get another property in CT in the next few months.
I help manage a buy and hold real estate company in CT and NY and we are still under a normal operating procedure. We bought a duplex in Bridgeport about a month ago and are looking for another small multi in the near future. If anything, our portfolio has benefited from a hot market from an appreciation standpoint, not that we are ever really sellers out here. I think the government subs to unemployment has really helped a lot of people make ends meet if they were affected by Covid, to date we haven't had any evictions due to the virus, and we have 30 units in Fairfield and New Haven county.
From a buying standpoint, I think that the market is going to turn in the next 6 - 18 months. I just don't think this hot market is really sustainable forever and once the pandemic starts to calm down, people's RE buying is going to change. All the people who are in foreclosure and eviction situations will have to move, so I feel like the chaos is going to be then rather than now.
As far as growth markets, it has been our strategy to focus on cash flow in a buy and hold or BRRRR acquisition. We have been successful investors because we have a bigger emphasis on management. We don't flip homes, we don't 1031 often, its just not our bread and butter (not that those wouldn't be a sound strategies, they are just not something we do as a company). All that being said, we like the 95 corridor in southwestern Connecticut because we consider that our backyard. This makes our management a lot easier. The trends of people moving out of NYC into the surrounding burbs has pushed people who were originally in those areas further up and out so there is a trickle effect there. That's why I believe the market has been hot.
The prices in those areas are a lot higher then in other parts of the state, but honestly if you find a good deal, you've found a good deal. It will work out for you if you manage everything well. We haven't tried looking elsewhere because there are plenty of deals around. The trick is knowing a good deal when you see one, because every market is different. Hope this helps!
@Jeff Piscioniere The market in Torrington is crazy right now!!!! We just sold a nice 3 family on Central Ave. Weren't planning on selling, however there was money to be made fast. We purchased the house for 140k in 2015. Listed it for 180k and closed 10k over asking. Homerun in my opinion. Now we are looking to do a 1031 on something bigger! Also have another 3 family in Ansonia. Purchased in 2014 for 165k listed it for 239k and have an offer for 227k. Hoping all goes well with that transaction then we will do another 1031 or combine it with the other 1031 if we find the right investment. Definitely still looking to buy just figured the market will only sustain a little longer. Better to get that money now than wait for the next boom.
@Tom Picheco keep me in mind if you have any other properties in Torrington you’d like to move. It’s a great market in our price range wheelhouse. Great blue collar community with lots of services! Would love to look into doing a refi on our property in Torrington to pull out equity to get our next property but unfortunately my current partners are not at that level of aggressiveness. Working on teaming with a bee partner who sees eye to eye with me. Right @Diana T. Wink, wink!
@Jeff Piscioniere I too like the torrington market and continue to look in the area for "deals". Its just getting overpriced right now. 2 families selling for 175k doesn't allow cash flow. Inventory is low on 3 family's and the pricing is just out of control. The houses on the market that we have seen in the area are horrible lately. I will keep you in mind as I hope you will me if anything pops up.
Right now there are very few long term buy and hold opportunities I am seeing which are not retail pricing. Value add deals are few and far between if your goal is to keep the property long term. Can you add to your portfolio right now? Yes, but mainly retail level pricing. Long term Torrington I look at with some scepticism as there are few good jobs close to the town.
@William Collins I think the fact that the hospital is now part of Hartford Health is a good thing for Torrington. Hartford Health is growing by leaps and bounds all across the state. I would imagine their footprint will increase further up in the northwest corner. Also if there are that many NY’ers fleeing their city/state and they settle in the hills, there will always be a need for blue collar service professionals.
@Jeff Piscioniere There is no question it is a sellers market. With rates at all time lows (increasing demand) and limited inventory it's causing a surge in home prices particular in the residential and Multi family 1-4 unit world. Surprisingly, larger commercial property from what I have seen, hasn't seen the surge in prices (yet?). Specifically Commercial properties with retail. There are still deals to be found on the MLS in Hartford/Middlesex County but as I am sure you are aware, the best deals are found off market.
I have started seeing Cap Rates in cities like New Britain, Bristol, Hartford, Middletown come down which is a good sign. Just like any city there are good and bad areas, however, I think the sweet spot is a C class market where you can clear $600-800 sometimes more a month on a 3 family house. Regardless what happens from a Macro perspective, everyone still needs a place to eat and sleep. We have already started to see a shift of renters moving from A-B and B-C property. You don't see many renter shifting from C-D however.
For perspective, I just listed my 2br 1b apartment of a 3 family house for rent for $1150 in New Britain. In less than 72 hours I have over 20 inquiries. Albeit some are not qualified, and some are tire kickers... the point being there is 100% a demand for clean affordable housing in Hartford County. Never a bad time to own good dirt... don't let COVID keep you from buying a good deal. Numbers don't lie... if it makes sense from an investment standpoint I don't why you should hold off.
@Michael Doherty so do you feel asking rent rates have increased as of late? If so any idea the percent increase you think might have occurred? I have same 2 bed 1 bath apartments but in Torrington and just wondering if they may have climbed enough that we can get a rent increase. Thanks.
@Jeff Piscioniere Out 3 family in Torrington was all 2 bed 1 bath. Every apartment was clean and updated. Nothing crazy but nice. Our rents were $850. We probably could have raised them some and most likely should have.Might be able to get away with $900. What are your current rents?
I agree with you @Jeff Piscioniere I live in Torrington and the demand in the market for multi families has increased. A big factory downtown has been bought out and is getting renovated not sure exactly what is going there but that can bring a increase in jobs. I’ve seen personally a lot more New York license plates around so more people are gravitating toward northwestern CT. I think some people don’t look at Torrington as a good investment opportunity but like anything there are deals everywhere! I have a question for you... How was your experience owning a property in Torrington?
@Jeff Piscioniere based on the demand yes, I would say asking rent rates have certainly gone up in Hartford County. But there is also a higher population of renters looking for housing compared to Torrington, Ct. So if your trying to raise rents 100-200 dollars without any justification... painting, updates ect.. you may have a harder time.
@Tom Picheco we are getting $850 and have been at that same rate for over 2 years. I believe it’s time we raise them but have been somewhat hesitant during the pandemic. Going to encourage my partners to consider it.
@Jared Maches it’s been outstanding!!! We own a great property in a quiet neighborhood and we cashflow about $700/month. It’s been a HR. This is why I’ve been thoroughly disappointed with my current partners for not moving for not pursuing additional properties. I’m getting worried we may have missed the boat to some extent. But I’m teaming with a great news partner hopefully in short order who is much more equal in our vision of investment. I’m looking forward to it because I want to be out of the 9-5 within 10 years.
Rent rates are going up, especially in desirable neighborhoods. Units we rented out last year for $1,025 are getting swamped with inquiries this year at $1,100 @Jeff Piscioniere.
Prices are going up, and cap rates are going down - with the exception being mostly MFR in the 5+ space. We had a 5 unit property under contract in East Hartford over the summer:
The owner purchased it in 2018 for 320,000, had us manage it for two years, and had a buyer at 365. The appraisal came back at 325,000... Sure, this was a month or two ago when covid-19 was a bit more rampant, but I think it highlights the bigger problem - Commercial lenders were / are somewhat hesitant to underwrite deals without knowing the full implication of covid-19.
The other issue is that many of these properties are not appraising because comps are not keeping up with the for sale market. In our case, the appraiser used comps from almost two years ago because not much has sold in terms of suitable comps. And of course, the comps that were out there were pre-covid when the demand wasn’t as great as it is now. Ironically, both the buyer and seller were based in NY and the property was sold off market. Still a lot of New York investors feeling out and exercising the Connecticut market.
Torrington is my bread and butter and I am glad to see more investors gravitating to the area. I am not sure long term but they are trying really hard to gentrify the downtown area. Not a lot of issues that I have noted.
@James McCard it really is a nice little town! Classic American downtown with lots of good restaurants. Sasso’s is some of the best pizza I’ve had in CT and that’s coming from an Italian who has one of CT’s number one pizza 10mins away. I think if the big city migration continues from NY to CT where their money is going a lot better, that the blue collar service hub of Torrington will be there in the NW corner. And as I mentioned, Hartford Health is getting bigger and bigger. James thanks for the connection too!!!
@James McCard it really is a nice little town! Classic American downtown with lots of good restaurants. Sasso’s is some of the best pizza I’ve had in CT and that’s coming from an Italian who has one of CT’s number one pizza 10mins away. I think if the big city migration continues from NY to CT where their money is going a lot better, that the blue collar service hub of Torrington will be there in the NW corner. And as I mentioned, Hartford Health is getting bigger and bigger. James thanks for the connection too!!!
I will fight you on pizza there is a guy up my way. Bakerville Pizza - he has a food truck and it is honestly probably the best pizza I have ever tasted. Once the world goes back to normal we should link up for a beer!