Investor · Rocky Hill, CT · Member since 2013 · 373 posts · 299 votes
Thanks to the help of @Michael Noto myself and my partner are closing on our first property in New Britain, CT tomorrow afternoon. This is in a good neighborhood, directly across from a school- a three family unit. This REO property does need some renovation, but it looks to be in surprisingly good shape. I will take photo's of the units and progress as we go.
Investor · Rocky Hill, CT · Member since 2013 · 373 posts · 299 votes
11y
Here are some numbers on the deal. It is a triplex with 3- 2br units. Washer dryer hook up in 2. Acquiring at 100,500, estimated rents are 950-1000 for units 1 and 2- unit 3 will be 800. After repair comps are 180,000 when fully rented. Estimated repairs are 20,000 + a roof inspection/repair.
Goal is to refinance out and keep it long term as a buy and hold.
Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
11y
@William Collins Although this was Bill's first multi-family purchase he went into the process with a very well laid out plan and executed it perfectly. Thanks for the shout out Bill and you guys are awesome to work with. Why?
It was my pleasure to assist Bill and his partner where needed because they did a great job of identifying specifically what they wanted in an investment property and finding one that fit their investment strategy. They had their infrastructure in place and were ready to pounce on something that fit into their strategy and did so.
In a competitive market being ready to act and knowing what you are looking for becomes paramount and due to their upfront research on the market they recognized a good deal, in a good area and I was happy to help them along the way.
I could go on forever about investors and what they need to do to be prepared to jump on an opportunity when it presents itself like Bill did, but that could be a book to be honest and I don't want to bore anyone.
Yes, they did find this deal on the MLS here in Connecticut and there are properties that fit the newly coined "BRRR" strategy here in CT which is what Bill hopes to do with this property as he outlined.
Rehabber · Niantic, CT · Member since 2012 · 443 posts · 150 votes
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Congrats, @William Collinsand kudos to @Michael Noto! Sounds like a good example of preparation meeting opportunity all the way around. Good luck with the property!
Investor · Rocky Hill, CT · Member since 2013 · 373 posts · 299 votes
11y
So folks asked for a few pictures of the deal
First we have the stand layout. This is a constructed to be multi family. The first two floors are living room, leading to a dining room. There is a wood paneling on 1 floor. The wood floor is in need of some repairs, so we are going to level and put in vinyl planks throughout the unit.
The kitchens have solid cabinets in decent repair needing some refurbishment. We are patching, priming and painting them. All counters are being replaced.
The first two floors have garbage disposals and dishwashers. We are removing the garbage disposals automatically.
The bathrooms need some updating without a doubt. We are looking at installing vent fan's hardwired to the light switch and replacing the windows (in the shower) with glass block. The tub will get reglazed on both floors, all other bathroom fixtures get replaced.
Each of the first two floors has a washer/dryer room, and two bedroom similar to this one, basic room's, good light- bad flooring and walls.
Here comes the fun part: all three unit's are fully split out- electric, and gas hook up. Two of three water heater's appear to be salvagable. One furnace works fine, the second needs repair's, and the boiler for the third floor can't be tested yet. This was a REO- so there is copper rip out, but not all the copper was removed. We are looking at some plumbing costs, and hvac repairs.
I will keep you updated as we progress- we are mid demo now on things that need to get removed.
Hartsdale, NY · Member since 2015 · 874 posts · 218 votes
11y
It certainly looks like you will do well with this 3 family. Why are you replacing the bathroom window with solid glass Brick and how much does that cost? I remember when we bought coop a long time ago and the bathroom window frame and apron was all water damaged. We had the sill and the area cut out and replaced it with a Corian window sill and Corian apron and that worked well for us.
Actually your renovation estimate of $20,000 seems low. Do you think you can do all that renovation for that price? What will the cost of the Roof repair come to? Are you doing any of the work yourselves? Is reglazing the tub the best approach, rather then replacing it?
Investor · Rocky Hill, CT · Member since 2013 · 373 posts · 299 votes
11y
@Barbara G. The renovation inside is running well so far. The outlier is the plumbing costs for the copper ripped out. Currently the costs for the cosmetic portions looks to be in line with 12 thousand, as I have a really affordable handyman. If we can get that we can get to what we really desire to do which is getting the unit to fully rentable by June.
Hartsdale, NY · Member since 2015 · 874 posts · 218 votes
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HI William,
Are you keeping the paneling on the first floor? Did you get a plumber's estimate? Do you need an electrician or can the handi man do all the electrical? Where in Conn are you doing this? Do you think you can finish this by the end of May? Its a real interesting project. Can you get it Refinanced when you are finished with the Renovation and the Renting or do you have to wait for a period of time? On Our project the Bank said they will refinance at 70% of the appraisal. What percentage will your lender refinance of the appraised value?
Investor · Rocky Hill, CT · Member since 2013 · 373 posts · 299 votes
11y
Paneling on the 1st floor will be painted, but kept- we did this at my mother's personal house and it looks pretty good. I would say 95% of the electrical works is swap out's of switches/plates- so mostly the handyman. This is in New Britain CT. We do believe that we can get two of three units done by mid May, the third we are hoping by the end of may. At this point the bank we are working with will refinance at 70% of appraised value once leased tenants are in place. So the goal is with a 100,500 purchase price and recent comparables on the same street being 189,000 to get an appraisal of at least 180,00. This leaves us with the budget we are trying to stick to of 20,000 (and 5 thousand buffer).
Sounds like things are already moving along at a good pace. I'm curious to see how the tub reglazing goes, I have heard that once a tub is reglazed you are limited on what types of cleaning products you can use, and that some common cleaners can damage the finish. How are all the appliances looking? Fingers crossed on the roof repairs and HVAC. The refi plan sounds solid as well depending on what street you are on. What school are you close to?
Did you use a hard money lender to buy this house and get rehab money? Or is your partner the one funding the deal?
What a great project. Good to know that deals can be found on the MLS. Can you please share the original asking price and how many days it was on the market before you made your offer?
Hartsdale, NY · Member since 2015 · 874 posts · 218 votes
11y
Sounds like it is coming along. When was the house built? Can we see a picture of the outside, the exterior of the house and of the bathrooms? are the bathroom walls tiled? What are your plans for the bathroom wall and the tub surround? Has the electrical been updated or do you have a fuse box? Is the bank that is going to Refinance a local bank and have yiu had conversation with them about this renovation, You seem to be moving right along. We are waiting to close on a duplex that also needs complete inside renovation so it is really interesting to me seeing your progress. It sounds like you will have a better cash flow and and a higher appraisal then we will have
Investor · Rocky Hill, CT · Member since 2013 · 373 posts · 299 votes
11y
@Kim Giannola I reglazed a tub in my personal house, and it held up for 4 years before I replaced the tub- it could have held up longer. The nearest school is North End Elementary- which is literally right there. Of the appliances- we have 2 decent fridges, 1 stove, 1 washer, and 2 dishwashers. I will l need to get 1 fridge, 2 stoves, and washer dryer's as each unit has a washer/dryer per unit (though the third floors is in the basement). I figure the timing is right for a Memorial day sales acquiring.
@Barbara all units are separated boxes with breakers. I am working with a bank and informed them of the plan before beginning. as I have another business (a brewery) they already knew about me and were trying to get me as a customer. Kind of like what @Brandon Turner mentioned in several podcasts, being the sought after customer and not the person who has no established credentials. The current funds are from a partner, not hard money.
Here a picture of the other bath- we are going to be using surrounds.
Here are some numbers on the deal. It is a triplex with 3- 2br units. Washer dryer hook up in 2. Acquiring at 100,500, estimated rents are 950-1000 for units 1 and 2- unit 3 will be 800. After repair comps are 180,000 when fully rented. Estimated repairs are 20,000 + a roof inspection/repair.
William I was wondering what your costs were for Insurance, garbage, Water, Electricity, Taxes, estimated mortgage (principal and interest), vacancy, on going maintenance all came to in total? What do you estimate your cash flow to be? Even if the renovation costs go up it still looks like the cash flow should be good.
Are you and your partner doing any work at the house, like painting or demolition? Do you have to replace any appliances like refrigerators or dishwashers or Stoves?
Hartsdale, NY · Member since 2015 · 874 posts · 218 votes
11y
Hi
Is this the house you were thinking of using glass Brick for the Bathroom windows? Did you ever do that? If so how did it work out? If you did not do that why did you not do it? I also have a question about buying in Conn since you are a Conn resident and Conn specialist.
How does New Britain and Plainsville ? compare to Danbury and Waterbury (I know Waterbury is depressed) and Bristol Conn.
Investor · Rocky Hill, CT · Member since 2013 · 373 posts · 299 votes
11y
This is the house where glass block will be installed. We are currently at day 7 of the rennovation, and the windows are going to be next week. Right now we are tracking on budget. Looks like $7500 for mechanicals (plumbing and HVAC)), $15000 on the remainder of the project for inside. There is a roof question, which we are getting quotes for. This is a BRRRR project where we are looking at getting rents from 2600-2900 total from the property, getting a 189,000 range appraisal, and being able to move to a second investment later this year.
Connecticut is interesting, so full disclosure I own a brewery in Bristol, CT and now a multi in New Britain. My thoughts are that each of these towns has local areas which are good markets to target. There are areas I would not recommend. There was a recent light railish project in the area making a devoted bus lane into and out of Hartford- which I believe will change some of these neighborhoods. I do not invest/have working knowledge of the areas in Waterbury or Danbury, but would target Plainville. I also have several other target towns which are within 30 minutes drive of my home.