Real Estate Agent · Mystic, CT · Member since 2019 · 48 posts · 13 votes
Hello Everyone,
I am just starting my buy-and-hold investing career and I am located in southeastern Connecticut. I have done some brief market research and I believe the local market I'm in, the Groton/Mystic area, would be a good place to start. It is home to two casinos, Electric Boat, a Navy Sub Base, and a National Guard Base, so the potential for future renters is promising. However, Connecticut as a whole is seeing a large population decrease as people are leaving the state to avoid high taxes, and there is fear in the speculation of adding tolls to our highways. I do live about 30 minutes from the Rhode Island line, so I am wondering if it would be a good idea if, as a new investor, I spent some time researching Rhode Island markets. Has anyone had any luck beginning investing outside of their home state?
Rental Property Investor · North Palm Beach, FL · Member since 2018 · 2k+ posts · 1k+ votes
7y
Hi Tyler,
I am originally from Connecticut and have a portfolio of multifamily in New Britain. I am not sure about Groton but New Britain is a cash flow market, not much appreciation. CT is not a landlord friendly state but if you have boots on the ground and the deals are good, you will make money. I am now based in Florida where there is both appreciation and cash flow. If you are investing in a syndication, it is much easier to invest across state lines. Otherwise you need to build a new team in each market which is very time consuming.
Buy and Hold Investor · Cranston, RI · Member since 2013 · 1k+ posts · 1k+ votes
7y
@Tyler Hespeler I don't necessarily think it's better in Rhode Island. Our section of the country is generally known for high taxes and not a lot of economic growth.
I think the Boston area has some possibilities only because it does still have some tech startup innovation activity, but I don't really see that in RI except for limited parts of northern RI (Pawtucket, Cumberland) that get some folks who are commuting up to the economic activity in Boston.
The Boston market also suffers from very high prices so while I think there's economic promise there, I also think you pay a lot to be in that market and it would be tough to find something these days where the #s make sense.
I think it's always worth spending the time researching, but I wouldn't be surprised if you find a similar situation or only marginally better, in Rhode Island.
I think the topic of out of state investing has been covered a lot of BP forums and podcasts, but my 2 cents is, make sure you already have some kind of connection to, or knowledge of the market, or are willing to invest your time developing it, rather than just jumping in head first. Also, you really need to research your property manager / team who will be your "boots on the ground" since you won't be there.
If you are in the area (RI, Providence area) sometime let me know, I'd be happy to get together or tell you about some local investment groups in the area which could provide a lot of helpful education and contacts.
Rental Property Investor · North Palm Beach, FL · Member since 2018 · 2k+ posts · 1k+ votes
7y
Hi Tyler,
I am originally from Connecticut and have a portfolio of multifamily in New Britain. I am not sure about Groton but New Britain is a cash flow market, not much appreciation. CT is not a landlord friendly state but if you have boots on the ground and the deals are good, you will make money. I am now based in Florida where there is both appreciation and cash flow. If you are investing in a syndication, it is much easier to invest across state lines. Otherwise you need to build a new team in each market which is very time consuming.
Norwich, CT · Member since 2017 · 24 posts · 14 votes
7y
IMO, stay close to home on your first deal. There are opportunities to be had in new London county that have lower priced entry points than other parts of the state and surrounding states. Like you said, we have EB, two casinos and plenty of people looking for apartments to rent. Finding a deal that cash flows and has value add potential by us is pretty easy. But then again it may depend on what kind of property size you’re looking to start with, if you’re looking for something bigger (6-10 units or more under one roof) that can be tough to find in nl county. Good luck, feel free to reach out if you need anything.
Kyle Campbell
IMT Realty
Real Estate Agent · Southbury, CT · Member since 2013 · 160 posts · 98 votes
7y
@Tyler Hespeler
What I ask every investor I work with is, what are your financial goals? What died a property need to make you a month to be considered? What appreciation are you hoping for?
Connecticut doesn't have much appreciation but we have amazing cash flow. If you're concerned with getting high appreciation, consider going out of state but realize your cash flow will probably not be as good.
Personally I buy rentals with the idea that I never want to sell them. Price going up or down doesn't affect my income or bottom line.
Real Estate Agent · Mystic, CT · Member since 2019 · 48 posts · 13 votes
7y
@Jason Arcuri thanks for the feedback. I have penciled in on my business plan for a single or small multi-family between $100-150k that cash flows. My goals this year would be to learn as much as I can, make some connections, and land a property. My wife and I bought a house last summer that we are fixing up to eventually rent out, and we do have a few connections with closing attorneys and realtors. Ultimately, I would like to achieve financial freedom by the time I’m 40. I I’m glad you said the CT is more of a cash flowing state, because I would be in it for the long haul just as you are.
Real Estate Agent · Mystic, CT · Member since 2019 · 48 posts · 13 votes
7y
@Kyle Campbell thank you. I definitely don’t see myself getting into anything above 4 units to start out with. At the moment I am focusing more on small multi-family or single family rentals. Have you had better luck with a certain one in this area? I see you work out of Groton, I would love to chat. Thanks
Real Estate Agent · Mystic, CT · Member since 2019 · 48 posts · 13 votes
7y
@Charles Carillo thank you. I used to go to school at CCSU and rented two houses while I was a student there. Do you have a high turnover rate with all the college students or do you try to avoid students when screening for tenants to get a more long-term renter?
Real Estate Agent · Southbury, CT · Member since 2013 · 160 posts · 98 votes
7y
@Tyler Hespeler If you have the cash, I recommend going for as much as you can afford. You'll be paying down a bigger mortgage and theoretically, your cash flow will be slightly higher. Find an agent in the area you want to buy that KNOWS investments and can run the numbers with you. Especially for the first couple, you want someone who has an idea what the numbers look like plus what the potential repairs will look like and cost you. I generally look for the 1.5 to 2 percent rule here in connecticut but thats been harder to get lately. Not impossible but need to be paying attention. My goal is also to profit 1000 a month on a multi unit building. That changes depending on factors and cost but is just a general guideline. Also that does NOT factor in rent loss or much for repairs. I know with that amount, I'll be able to cover 95% of repairs that come up as they come up.
Real Estate Agent · Mystic, CT · Member since 2019 · 48 posts · 13 votes
7y
@Anthony Thompson thank you for the feedback, that was very helpful. Based on all the responses so far here, I think I will dive in a little deeper to my local market and see what I can find. As you said, make sure to establish some connections, my wife and I purchased our primary residence this past summer and we have made a good relationship with our closing attorney and realtor. I’ll still keep RI in mind and I will be sure to reach out if decide to pursue it. Like was, feel free to contact me if you decide you want to invest in SE CT!
Real Estate Agent · Mystic, CT · Member since 2019 · 48 posts · 13 votes
7y
@Jason Arcuri I'm glad you say that, I have analyzed a few properties with 2% rule and nothing seemed realistic, and I remember reading that that rule only applied to certain markets. I will continue to research some more properties. Have you ever found something that doesn't pass the 2% or 50% rule, but once you crunch the numbers, the ROI works? Or do you tend to shy away once those rules aren't met? The first question I plan on asking any realtor would be if they have had any experience in dealing with investors. Thank you.
Real Estate Agent · Southbury, CT · Member since 2013 · 160 posts · 98 votes
7y
@Tyler Hespeler a ton of properties don't pass the 2% rule. That rule is very very unrealistic if you aren't going into harder areas. 1.5% is a good quick indication. I also look at taxes. For example, I have a client selling a home in not a great section and will be asking around 140k 3 units, 800 a unit. Initially it's pretty good. Then, the taxes are ONLY 2400 which is unbelievably rare. Average is usually like 5500 for similar homes. This shoots the ROI way up and makes it a great investment.
Real Estate Agent · Mystic, CT · Member since 2019 · 48 posts · 13 votes
7y
@Jason Arcuri that makes sense, I’ll drop down to 1.5% and see how the numbers work out. Interesting, good to know the taxes have such a wide spread between similar properties. Thanks again!
Lender · Farmington, CT · Member since 2015 · 542 posts · 321 votes
7y
@Tyler Hespeler much like @Charles Carillo i live in Texas now but still have a portfolio of houses in New Britain around CCSU. I also went to school there and rented out houses like you mentioned. Like everyone said, cash flow is great up there, but, appreciation, not so much. you are track with most everything you said. if you ever want any advice or opinions on anything, let me know and i would be happy to help. if you want to send me a private message, feel free!
Real Estate Agent · Mystic, CT · Member since 2019 · 48 posts · 13 votes
7y
@Mark Skaff, thank you for letting me know! Mat had contacted me a few days ago and we exchanged information. Definitely interested so hopefully I’ll see you there!
Rental Property Investor · Plainfield, CT · Member since 2014 · 60 posts · 43 votes
7y
Hey guys. Just jumping in on the thread. @Tyler Hespeler, if you have any questions related to commercial or residential financing, feel free to reach out to me. I'm a fellow Blue Devil as well!
Real Estate Agent · West Hartford, CT · Member since 2016 · 449 posts · 476 votes
7y
@Tyler Hespeler I grew up in New London County (Waterford) to be specific and know that area well. Like Ryan Deasy, I currently invest in the New Britain area because of the cash flow. It is also surrounding expensive towns like West Hartford and Farmington. In New London- like New Britain, you really have to be careful on what streets you invest on, it really does vary street by street.
From a quality perspective, I think you will find better tenants in Groton and better parts of Norwhich but your cash flow will be better in New London. I think it makes sense to focus your time on connecting with local investors in southeastern Ct and look to other parts of Ct (perhaps Central area) before devoting time and resources out of state.
Investor · west hartford, CT · Member since 2016 · 7 posts · 2 votes
7y
@Tyler Hespeler I grew up in the area and have a friend who invests there, they swear by Groton as they rent primarily to EB and military. I think there probably are opportunities in New London and Norwich but I'd probably cut your teeth in a better area and then really start to get to know the areas of New London and Norwich better for your second deal.
Also, I have seen a lot of people mention New Britain as a good area for cash flow. I've been in West Hartford and the West End of Hartford but am looking for a new area. I just started looking into Manchester and New Britain and was wondering if there were any thoughts or areas to avoid in either.
Lender · Farmington, CT · Member since 2015 · 542 posts · 321 votes
7y
@Ryan McNeil hey Ryan, i’d be happy to help you here. I know the area well and have properties in new britain and west hartford. send me a PM and i would be happy to give you the run down and any other assistance that i can provide!
Real Estate Agent · Mystic, CT · Member since 2019 · 48 posts · 13 votes
7y
@Bill Couture thank you, I’ll keep that in mind when I start breaking down my financing options.
@Michael Doherty @Ryan McNeil cool, I grew up right across the river in Ledyard. I hadn’t considered New London cash flowing better than Groton, but I guess that would make sense considering the purchase prices would be cheaper. I will definitely do my homework before investing, especially in New London, to make sure the location is okay. I also have heard a lot about New Britain, so maybe after I acquire a few local properties I can check that out. I used to live on Commonwealth Avenue right off the CCSU campus, and that whole neighborhood around Eddy Glover Boulevard and Stanley park was a very friendly. I also lived on Edmund Street in Newington, about 5 minutes away, and that was a nice neighborhood. This may be a good spot for you to start looking, however when I was living there I didn’t have any investing experience.
Rental Property Investor · Providence, RI · Member since 2018 · 75 posts · 35 votes
7y
I live in Providence. I am both an investor and a broker. And I tell all my new investment clients to pick their market. Are you ok sacrificing cash flow with appreciation. Do you want to rent to young professionals. Medical residents. Families. Students. Section 8. Long term or short term hold, etc. While a deal is a deal and they are hard to pass up when they come along, I suggest picking a strategy and sticking with it. At least until you are well-healed in the business and have the confidence (and balance sheet) to diversify.
Real Estate Agent · Mystic, CT · Member since 2019 · 48 posts · 13 votes
7y
@Nelson Taylor thank you for the input. At the moment I am looking for cash flow over appreciation for multi-family rentals in the Groton/New London area. My price range is between $100-150k. For a little while I couldn't find much that fit these parameters but after doing a few weeks of surfing the MLS and driving around I have found a few.