Multi Family in Hartford - should I ???

14 Replies

Hi all,

I am new here and somewhat new to real estate. I am in the home stretch (fingers crossed) of closing on 2 small multi family homes in Hartford. 

I'm also waiting on a short sale approval for a third one, and that's where I feel I could use some input:

3 family home in south end of Hartford. I offered $130K a few months ago. 

Now the bank appraised it themselves and they want me to match the appraised value of $145k. 

It needs 15-20k work. Rents $800-900 per unit (3 units). Taxes $3700. Insurance $1600.

Should I up my offer to 145k?

Shirley, what a rotten trick the bank is pulling for an extra 15k! Have you had the property inspected? I would; it might provide you some ammo. The numbers still seem to work so that’s the important thing. Take another pass at the deal, including the neighborhood and see if it supports the work you want to do to achieve your goals. Congrats on all this activity and all the best!

Originally posted by @Shirley Rozenshteyn :

Hi all,

I am new here and somewhat new to real estate. I am in the home stretch (fingers crossed) of closing on 2 small multi family homes in Hartford. 

I'm also waiting on a short sale approval for a third one, and that's where I feel I could use some input:

3 family home in south end of Hartford. I offered $130K a few months ago. 

Now the bank appraised it themselves and they want me to match the appraised value of $145k. 

It needs 15-20k work. Rents $800-900 per unit (3 units). Taxes $3700. Insurance $1600.

Should I up my offer to 145k?

 15-20K of work for a 3 family home?

Hmmm...

It is hard to answer such a question not knowing what the house looks like. But just so you get an idea. 15-20K is something like new paint interior (6 to 9K for a SFH) I would say close to 8 to 11 K for a 3 family home (depending what size house). 3 new water heaters about 5K.. and there goes your budget.

Just paint and water heaters. A house needing 20K of rehab is pretty much in really good shape.

Should you match the bank?

It feels like you are using emotion here. You should use numbers. Calculate your ROI over time. See if you find the area a good area...

I don't think you should ask the forum such a personal question.  Personal questions gt you personal answers and those are dangerous.

If you want a good answer to your Q, you should show some pics, give us the numbers. As is value, ARV, issues the house has. Is there an inspection done?

You are closing on 2, and this is the 3rd. I think you can slow down a bit. If you miss out on this one, there will be more. Do the numbers and make absolutely sure the numbers work for you and don't force the deal.

Thank you @Jerryll Noorden   for taking the time to respond. It's very possible I'm using emotion here, cause my numbers tell me it's a good deal, but I can't let go of the nagging feeling the bank is "bluffing".

It needs a new roof now and a good clean up, but the rest is cosmetic that can wait till I get better situated and established. My research tells me it can sell for low 200s with a new roof and closer to 250s with a cosmetic rehab.

I think you're also right that closing on two properties this week is already enough on my plate. So, even though I have agreed to the new price, I might find an exit if they want to close soon. Since it is a short sale, I'm hoping it will be a long time before the bank makes a move...  

Run the numbers, re-run the numbers and make sure they make sense for your portfolio. If they do... well then move forward!

Update:

Closed Monday on the above mentioned 3 family on Maple Ave in Hartford. 

As I expected, the estimates for the new roof and other urgent fixups are coming in at 20k.

I went there with a handyman today to check out the boilers. He mentioned that the water heater for the 3rd Floor is leaking and in very bad condition and should be replaced.

I go up to see the tenant, a lady with a baby, maybe 18 month old. So I ask her, is the hot water working okay? She says: No, we don't have hot water for a month now...

WTF? What is wrong with people? 

Is it just me or is the previous landlord completely insane? And why did tenant not call the city to complain?

If you think it is a decent deal at 145K, go for it.  If you are financing the property eventually, the costs of the extra 15K isn't much.

Appraisals do not equal market value.  So press your case with the bank or agent, if you have any input.

Honestly, Shirley, the thing that worries me most is the very high crime rate in Hartford.  Hartford is very close to where I live, but I have stayed out of it, and instead chose to buy in New Britain, because the crime rate in New Britain is much lower than in Hartford.  Yes, New Britain has armed robbery and shootings too, but they're much rarer than in Hartford.

That being said, if the building has 3 units that are 3 bedrooms each, you still did okay at 145K, even with all the repairs you have to do.

Hartford gets a bad rap mostly because of the North End. Maple Ave is on the South End and while there is crime, it's nothing to be afraid of especially if just investing. Having said that, I did move out altogether to raise my kids and get more peace and quiet.

@Shirley Rozenshteyn curious as to why you go the buy + hold route vs flipping SFH.

@Thaddeus S.

The South End isn't too bad, that's true, but also the ho,mes are so old, there's so many issues all the time...

I go with buy and hold mainly for two reasons. I was raised that way, you buy and rarely sale, that is how you build generational wealth - you accumulate and pass it down. Also, flipping is more of a job than investing, I'm looking to work less and have passive income more. Though the reality is that managing these old properties is a part time job too. Especially now when I'm still stabilizing...

Hi @Shirley Rozenshteyn , my brother and I grew up in West Hartford and have been looking into a few areas in Hartford where we could invest in a multi-family property.

We've started looking at a few neighborhoods: Parkville, Frog Hollow, and South Green. It seems like you've been focusing on the South End, curious to know attracted you to that area.

I guess what I'm asking is - is the answer to your original question, "Multi-Family in Hartford - Should I?", still a "yes"?

BTW: I appreciate your posting! We've learned a lot from your threads/posts.

@Daniel Francoeur

Well, a year later I guess I'm on the verge of seeing the light here. I'm at the home stretch of renovating the building and have tenants lined up. Got a chance to help a single mom w/ 2 kids out of a shelter, so I agreed to reduce the rent for her. Otherwise, I was able to increase rents significantly (more than 300 a unit).

Hopefully the rough patch is close to over. BUT, I'm not doing it again, if that answers your question. When I buy again (and it will be a while) it will be in B areas.

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