Looking to Invest in Connecticut

17 Replies

Hello everyone, 

I am 23 years old. I graduated as a civil engineer last year, but I am currently in graduate school. I would like to use at least 25K-30K for an investment property. My credit score is 790. 

I see a lot of nice townhomes in CT between $200,000-300,000. Are they a good start for those looking to build a rental portfolio?

Also, what areas of CT would you recommend looking into? I have mainly been looking along the metro north new haven line, but I would love to hear some recommendations. thank you

Are you looking to purchase a Townhouse and live there while renting out some rooms (househacking)? Or will it strictly be for an investment property? CT can be a tough place for condos and townhouses because of the HOA fees typically associated with these properties. Those additional monthly payments kill the cashflow sometimes. There are of course positives to condos/townhouses, like the fact that exterior maintenance is typically covered by the HOA. I'm not saying it wont be possible, but it will be difficult to find something that financially makes sense and still cashflows. It may make more sense to look for a duplex or triplex? New Haven, Waterbury, Hartford and many other cities still have some pretty nice deals right off the MLS if you dont mind owning in those areas. Good luck to you!

Hi @Jamila Thompson  

I agree with @Rui Costa . Owning a Townhouse as an income property comes with the added expense of HOA fees. Although one could argue that this could be offset by not having to pay the cost of snow removal, lawn care etc (for HOAs with low fees), I'm still reluctant to say it's a good idea due to the fact that HOAs are often unpredictable. They could at anytime charge additional assessments for various reasons in which could kill your cashflow. On top of that, they could add restrictions on non-owner-occupied units within the complex. I'm really not a fan of condos/townhomes as income property. If you're not planning on living in the property, my advice would be to stick with multi-family properties. Preferably 3-4 unit properties for your first few.

@Jamila Thompson , welcome to BP and congrats on graduation.  There are some nice pockets in New Haven you could target, in the Yale area.  Another nice area for investors and to live is near the water in West Haven or Branford.  I am a fan of Fairfield County because of the lower taxes, but the entry point is a bit higher down there.  Happy to answer more specific questions as you think of them.  Good luck!!!

Hi Jamila,

Townhomes can be nice, but as Rui mentioned, HOA can really stress your numbers. I know you are looking into the North Heaven area, but, West Hartford, Rocky Hill, Glastonbury are great towns with good school districts that you might want to look into as well. Best of luck!

Hi Jamila,

Congrats on your accomplishments and wish I was as smart as you at 23 and even now at 54.  I am a rookie real estate investor at 54, so take anything I say with a grain of salt.  I think the house-hacking recommendation is a great one.  Having someone pay your mortgage and maybe more is a great way to start.  Otherwise, even though I've lived in Fairfield, CT for almost 10 years, I never considered investing here as I didn't think I could cash flow, especially using 80% leverage.  Have you considered remote investing?  There are markets (Memphis, TN, Birmingham, AL, etc.) that cash flow and our landlord friendly.  Something to consider...Best of luck!


A lot of good advice above. Right now with the rush of buyers to multi family and single family properties I've been seeing some good opportunities with townhomes. You have to be cautious about HOA's, however I do see the cost off setting the other maintenance I would need to pay for (snow, garbage, water, sewer, sometimes heat and hot water). I've picked up two personally since covid and they have been performing very well. Happy to chat about investing and helping you find a property!

Congratulations @Jamila Thompson ! I got a BS in architectural engineering down at the University of Miami a few years back, and then made my way into project management and investing after designing for a few years. You are definitely going down the right path! And BP is the best place to make those relationships. 

I currently live on the new haven line of metro north as well down in New Rochelle, NY and have had a number of clients buying in CT lately along the line so they can still commute to the city when needed. As many people have suggested, I will also support. If you do want to be in the New Haven area, the university could be helpful, but keep in mind we may start to see the in person college trend start changing a bit. The reason I bring this up is more for the consideration of house hacking. It may mean that students are spending more time in their homes and educating virtually, which will put a larger strain on your living situation and utility bills if you are covering them in some way (house hacking of course). 


I do agree that townhouses are seeing less competition for sure, and it is better to own some real estate and wait than pay someone elses mortgage while you wait. Just make sure that HOA doesn't kill it. I know if westchester NY, and fairfield county CT sometimes Living in the unit will though the numbers off a bit while you live there at a reduced rate. As long as the benefit in your net worth is positive I think its a great way to get the ball rolling. Our price points are so high that cash flow is not as easy t find when getting started.

You also need to make sure that what ever area you end up deciding on, you get into as many houses as possible so you have a feel for the condition of the area. Just because they are cheaper in some areas, does not mean the product is worth what they are asking. They can be cheap, but require more rehab than they are worth. 

I know i didn't specifically answer your are question but hope to keep you thinking!


Also not sure if you heard about the 4th train-line metro north is adding that with go into penn station! its something that will add lots of value to the whole long island sound corridor!

You're not going to get any cash flow from a townhome in CT at that price point. You also don't have enough cash to get any loan that is not an owner occupant loan. You sound like you're in a good position to buy a multifamily property though and that's what I would do if I were 23 again and knew all I do now. The area you are looking in is a good one for multis. Nicer areas of Bridgeport and New Haven come to mind, as well as East and West Haven, Ansonia...Actually most of New Haven County. You're going to be priced out further south into Fairfield County. Keep in mind, CT evictions and foreclosures have been in moratorium since March so there is limited inventory now. I do think many landlords in CT will exit the business and liquidate once they can get evict again, and the missing foreclosure inventory will come to market. There will be better deals available at some point soon.

Originally posted by @Rui Costa :

Are you looking to purchase a Townhouse and live there while renting out some rooms (househacking)? Or will it strictly be for an investment property? CT can be a tough place for condos and townhouses because of the HOA fees typically associated with these properties. Those additional monthly payments kill the cashflow sometimes. There are of course positives to condos/townhouses, like the fact that exterior maintenance is typically covered by the HOA. I'm not saying it wont be possible, but it will be difficult to find something that financially makes sense and still cashflows. It may make more sense to look for a duplex or triplex? New Haven, Waterbury, Hartford and many other cities still have some pretty nice deals right off the MLS if you dont mind owning in those areas. Good luck to you!

Thank you for your response Rui. My plan was to live there for a year, then rent out the townhouse. My main worry is the HOA fees. I think you are right, it would be more profitable and easier to invest in a multifamily. I will look into this

 

Originally posted by @Adam Cherko :

Congratulations @Jamila Thompson! I got a BS in architectural engineering down at the University of Miami a few years back, and then made my way into project management and investing after designing for a few years. You are definitely going down the right path! And BP is the best place to make those relationships. 

I currently live on the new haven line of metro north as well down in New Rochelle, NY and have had a number of clients buying in CT lately along the line so they can still commute to the city when needed. As many people have suggested, I will also support. If you do want to be in the New Haven area, the university could be helpful, but keep in mind we may start to see the in person college trend start changing a bit. The reason I bring this up is more for the consideration of house hacking. It may mean that students are spending more time in their homes and educating virtually, which will put a larger strain on your living situation and utility bills if you are covering them in some way (house hacking of course). 


I do agree that townhouses are seeing less competition for sure, and it is better to own some real estate and wait than pay someone elses mortgage while you wait. Just make sure that HOA doesn't kill it. I know if westchester NY, and fairfield county CT sometimes Living in the unit will though the numbers off a bit while you live there at a reduced rate. As long as the benefit in your net worth is positive I think its a great way to get the ball rolling. Our price points are so high that cash flow is not as easy t find when getting started.

You also need to make sure that what ever area you end up deciding on, you get into as many houses as possible so you have a feel for the condition of the area. Just because they are cheaper in some areas, does not mean the product is worth what they are asking. They can be cheap, but require more rehab than they are worth. 

I know i didn't specifically answer your are question but hope to keep you thinking!

Also not sure if you heard about the 4th train-line metro north is adding that with go into penn station! its something that will add lots of value to the whole long island sound corridor!

Thank you, Adam. I agree, the college town market is profitable, but at this time can be unpredictable. I was also looking in Westchester, but the HOA fees can be killer. Thank you for the advice, I appreciate it!

And yes! I actually interned for the East Side Access project. You're right, this is definitely something to look into! 

Originally posted by @Minna Reid :

You're not going to get any cash flow from a townhome in CT at that price point. You also don't have enough cash to get any loan that is not an owner occupant loan. You sound like you're in a good position to buy a multifamily property though and that's what I would do if I were 23 again and knew all I do now. The area you are looking in is a good one for multis. Nicer areas of Bridgeport and New Haven come to mind, as well as East and West Haven, Ansonia...Actually most of New Haven County. You're going to be priced out further south into Fairfield County. Keep in mind, CT evictions and foreclosures have been in moratorium since March so there is limited inventory now. I do think many landlords in CT will exit the business and liquidate once they can get evict again, and the missing foreclosure inventory will come to market. There will be better deals available at some point soon.

Thank you for your response and your insight, Minna. This is great info. You're right, I am only able to get an FHA loan. I have been looking at Bridgeport for multifamilies, but how do I know which areas are the nicer ones?

It's usually pretty easy to tell by driving around - you'll know lol. You can also check crime/school stats online. If you are not local, you would want an agent that knows the area well. Black Rock is probably the most desirable area of Bridgeport, but also the priciest, which will kill your cash flow unless you can get a really good deal. I don't see anything in your price point there right now. Bridgeport is such a mixed bag. Best advice I can give is if you have interest in any certain property, spend a little driving around the neighborhood at different times of day.

I like your thoughts here @Minna Reid , especially re evictions and them being a reason a lot of properties aren't coming to market right now. I think most landlords know that they will have to sell their property at a steep discount right now if they have multiple non paying tenants. The buyer is taking on a big unknown, especially because of covid and how backed up the courts will be - for months. 

It's sad to say, but an empty building is worth more than a building with shaky tenants or ones that are on the road to eviction. And fortunately for CT, we are not alone on this one. Hopefully we can get it done quicker than MA/NY and benefit from it, but that's doubtful at best.  

@Jamila Thompson check out neighborhood scout for resources on crime data of a town. It's a great free resource.

Hey @Jamila Thompson , 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.

You can use the Bigger Pockets calculators to start. 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. 

Let me know if you have any questions.

- Craig

@Jamila Thompson kudos for getting started this early.  

With the market as hot as it is right now, it's probably going to be difficult to get good cash flow with a FHA 3.5% loan anywhere along the Metro North. There's definitely good deals still out there, but I would be patient.

Regardless, if you found something you liked , do it!  The first property I have doesn't have great cash flow but it was the best investment I've ever made because I liked living it it, wasn't paying rent & made some good appreciation.  Also learned a lot throughout the process.  

Based on your criteria, Bridgeport will probably have the best cash flow numbers.  But I'm a little biased to Stamford & New Haven, although cash flow probably won't be as good.  Multis are expensive in NH and Stamford but you should be able to get some good roommates with house hacking as both areas are very popular with young profressionals, students, etc.