Off Market Deal in Meriden, Connecticut - Purchase Below Market Price and Opportunity for Improvement
Off Market Deal in Meriden, Connecticut - Purchase Below Market Price and Opportunity to Improve to 12 Percent Net Return
Hello friends,
As you have probably noticed, the number of good deals is small and must be found in tweezers.
The current deal is a duplex in a developing city in Meriden, Connecticut.
In the e-mail and on the website we describe the advantages of investment, the advantages of the region and the possibilities of profit.
Many of you turn to me every day to ask if there are any new deals to enter.
As you have seen, since the last transaction in April, which was really an excellent transaction below the market price, it has been over two months, and there have been no deals that I believe are good.
To my delight, after many searches, I found a deal that I think is very good.
Nature of the transaction:
First thing as you know in real estate - someone's trouble is someone else's advantage. The property is sold by a divorcing couple (not us). They tried to advertise it on the market at a higher price, entered into a contract, took down the advertising but the client was unable to get a mortgage. Due to the couple's urgency to sell, get the funds and split the money, they do not want to go through this process again and are willing to offer the property at a discount for a quick cash transaction.
So what we are talking about here - buying a duplex of 2 units at a price lower than the market price of 102 thousand dollars. (This price will only be allowed for quick decisions in the coming days as we do not have a contract for the property).
The first floor is currently leased at 700 USD, and the second floor at 650 USD. Total 1350 USD Rentals.
(15.8 percentage of gross yield)
Total cost for a renovated property with wholesale fees, closing fees, attorney, amount reserved for eviction of tenants if necessary, insurance, title, inspection and our accompaniment throughout the process until purchase - $ 138,500
Estimated rent after renovation - $ 2150 per month - ie 18.6 percent gross!
The value of the property after the renovation according to Compasses - 180 thousand dollars to 215 thousand dollars. (See comparative assets below)
A gross profit opportunity of between 40 thousand to 75 thousand dollars gross in the clip! (Before brokerage fees, sales taxes, etc.).
The net return of this property per year is 17 thousand dollars
NOI - $ 17,000
Worst scenario:
The minimum price that a broker will sell the property will be at a cap rate of 9.5 percent - that is:
NOI / 9.5% cap rate = 178K
Net after sale at minimum price: 165-170 a thousand after broker commission expenses, closing expenses, etc.
Also the deal is even more excellent for long term holding - the potential for property improvement is that on the first floor only cosmetic renovation is needed, and on the second floor we will build two more rooms that will significantly increase income - which will bring us about 12 percent net rent.
Expected breakdown of renovation costs:
So how does the deal take place?
After signing a contract with us, a cash deposit is transferred to a lawyer who will serve as the initial deposit to enter into the contract with the seller
We condition the contract on a thorough inspection of the property - inspection
We will ask the seller 10 days to decide whether we are moving or not
If you decide not to proceed, you get the deposit back, minus the cost of the test
If we decide to continue the transaction, you will continue forward with our accompaniment
Location: Meriden, which has undergone accelerated development in recent years
The big advantage of the city is its location - about a year ago a new train station opened there that leads directly to Manhattan in about two hours!
It also opened a new central park (like a small central park) that received rave reviews (you can see the Google reviews in the photo) - many festivals are held in the park, and next to it the municipality has turned buildings with housing for the needy into modern condo apartments with pool, gyms, guard, etc. Of a high standard
Meriden Green's new park
As you can see, the new railway station is part of the improvement of the entire area and is adjacent to Meriden Green Park and the new condo buildings in the area
The city site tells about the new park and its activities
Meriden is considered a leader in aerospace engineering and includes companies in this industry who work with the US Army and live in, among others, aviation engineers and blue collar workers working in these companies.
Below is a list of the leading 30 airlines that are located in Meriden
Meriden is only a 22-minute drive from Hartford - the capital of Connecticut, which is also the insurance capital of the United States with 17 Fortune 500 companies with a combined value of hundreds of billions and providing employment to area residents.
Learn more about the benefits of investing in Connecticut.
http://info.www.forumnadlanusa.com/multi
Hartford and Manhattan can be reached directly by train from the new station in Meriden.
The opening of the new station makes Meridan accessible to the surrounding major cities - the new station began operating in June 2018 - watch the TV announcement of the new station
The great advantage of Meriden over many other cities in Connecticut is its excellent location on the transportation axis which makes it possible to get from there to Manhattan in a short time - in less than two hours:
Famous tourist site in Meriden - Castle Craig
CMA Comparative Report (Compasses):
15 Silver street
Almost identical property offered without renovation at 174,900 USD
https://www.zillow.com/homes/for_sale/57935238_zpid/2-_baths/41.533302,-72.799439,41.529069,-72.807164_rect/16_zm/0_mmm/1_rs/1_fr/
2. 19 Silver Street
Property with the same area sold last April at 195,500 dollars when not renovated. 2 minutes away from property
https://www.zillow.com/homes/for_sale/58916883_zpid/2-_baths/41.533302,-72.799439,41.529069,-72.807164_rect/16_zm/0_mmm/1_rs/1_fr/
3.
9 Summit Street - Sold in March for $ 185
https://www.zillow.com/homes/recently_sold/57930052_zpid/3-_beds/1-_baths/150000-_price/575-_mp/globalrelevanceex_sort/41.536318,-72.797138,41.530246,-72.808671_rect/16_zm/?fbclid=IwAR3tgwsY5ecn4r-nm9qeU4-kFutLnzXwUvgVO_mBBbOeb0a_tBC-LexOAik
4.
60 Oak St - Sold for $ 196
https://gyazo.com/0d36f196a5e4ba91e6aa0aeeb482e9e4
https://www.zillow.com/homes/recently_sold/57934249_zpid/3-_beds/1-_baths/150000-_price/575-_mp/globalrelevanceex_sort/41.535162,-72.79681,41.52909,-72.808344_rect/16_zm/?fbclid=IwAR1qMgRe4vU6CWwtE6A2qIydk81eh4EqnCNNRf5sTxSiVe9xaqZ5-LwsUwI
5.
211 Elm St - a 4-room property only - sold for $ 170 in November 2018
https://www.zillow.com/homes/recently_sold/57930271_zpid/3-_beds/1-_baths/150000-_price/575-_mp/globalrelevanceex_sort/41.533997,-72.796773,41.527925,-72.808307_rect/16_zm/?fbclid=IwAR3wZ_lP8bCc85-hjGQU-DxV5bBgQxrL7ecjlSRiBGHFnex3ElxhhXPgg8o
The property is located in a school that ranks second in all of Meridan - from the publication of the property:
Do not miss your chance to live in the Pulaski school district. Pulaski is currently the 2nd highest rated elementary school in Meriden.
The time we can advance in the transaction is limited - the price at which the property will go up for sale again in the free market in ten days by a broker is 109 without the renovation, closing fees, etc. - you can see the sales history below
Property's sales history:
The price includes full accompaniment until the property is owned by you and is under management company (if you are interested, we can also take care of you to open a company etc. at a reduced cost)
Business plan options:
Today the property has two tenants who pay 650 dollars each to 2 bedroom apartment
Option one: Leaving the property as it is as a rental property
Option 2: You can raise the rent to the market price of 900 dollars to existing tenants, or decide to evict tenants
(In principle it is better to leave a tenant who pays than to spend it to renovate his apartment in 7500 dollars and therefore it is better to see if you can get with tenants to build in terms of their low monthly rent)
Third option: to renovate the property and save it as a rental property or to sell it at a profit (Flip)
Evaluation of expenses according to business plan 3 number which includes renovation:
$102,000
Cash purchase includes wholesale and accompaniment fee
$2,000
Estimated closing costs - lawyer, title insurance, inspection, etc.
$1,500
Reserved amount in case of evacuation of tenants
$33,000
Estimated renovation cost includes renovation assistance
$138,500
Total
Information about the property from the municipality:
Property:
Property Chart:
Calculation of existing and proforma expenses:
You can see that the area is considered a hot spot for investment! With an average price per US $ 167,100. The region has risen by 5 percent in the last year
You can also get by in this area without a car - everything is close and there is a Manhattan train station!
According to the Realtor website, the property value should rise by 13 percent over the next year:
Also according to the site, the value of this property is lower in 35.64 the percentage of similar assets!
The property is approximately 10 only a minute's walk to the Manhattan train (about 2 hours' drive from Manhattan):
Tour of the 1 property:
https://www.youtube.com/watch?v=Qkeo8JlUoRE&feature=youtu.be
Tour of the 2 property:
https://www.youtube.com/watch?v=rDLlvj_pLeA&feature=youtu.be
Tour of the 3 property:
https://www.youtube.com/watch?v=EDQOwxwgT10&feature=youtu.be
Tour of the 4 property:
https://www.youtube.com/watch?v=_FL1NDxqVBM&feature=youtu.be
Tour of the 5 property:
https://www.youtube.com/watch?v=o-jYIVyvwmQ&feature=youtu.be
Pictures from the property:
First Floor - Bathroom:
https://gyazo.com/49344612523d887959ac542d8c8e5769
https://gyazo.com/409beb6f3b5c3077a7f88c54ce53f742
Second Floor - First Bedroom:
https://gyazo.com/0d1464dc785b595736e5b48297b3bd55
Second Floor - Second Bedroom:
https://gyazo.com/8000330e593d87f8542f06361d445d6d
CMA - Comparative Index for Rentals (Boxes):
1.
Two Bed - $ 1100
2/
Four Bed - $ 1350
https://www.zillow.com/homes/for_sale/pmf,pf_pt/57935977_zpid/41.537092,-72.795014,41.528627,-72.810463_rect/15_zm/1_fr/
3.
Two Bed - $ 975
4.
Two Bed - $ 1400
5.
Two Beds - $ 1200
Remember I live an hour and a half drive from the property which is a huge advantage - I can be present at all tests, be physically with the lawyer to go through the documents and sign, work directly with the management company, get several quotes instead of with construction companies for example if need to replace roof and do the The tour is physically in the building with them - something that is impossible for investors living in Israel.
Investment horizon:
The investment is suitable for anyone who can invest a sum that is not his last money and with a horizon of two years ahead for those who are looking to hold the property or sell a split after six months.
If you have no experience in real estate and you do not understand that property with tenants is a full-time job and not really passive income, and that it is sometimes necessary to deal with eviction of tenants, repairing the property, sometimes going to court, etc. Although I will be the one to work with the various factors to take care of anyway, we invest in the building together - and I will definitely prefer people with experience so that we can make important decisions together and succeed together. Definitely prefer road partners who understand what real estate is and will not ask to leave after a year or two.
Exit from investment:
If you are required to exit the investment, you will need to find an alternative investor who will enter your place and that is acceptable to members of the investment group. If there are attorney fees and other costs of transferring the name to the new investor, these are expenses that you will need to finance yourself.
What the United States Real Estate Forum headed by Lior Lustig provides for the deal:
(Some of the parameters are relevant only when the forum is part of the joint management of the transaction even after closing)
1. Comprehensive market analysis of all market assets and finding the best deals
2. Options for financing future transactions on American financing terms with Lior's personal commitment to the bank to repay the loan - If the loan is not repaid, the bank sees Lior as a primary creditor and can seize his assets and because of this Lior is committed to a solid and secure transaction.
3. Negotiations on the price of the deal
4. A struggle with the municipality to reduce the taxes on the property
5. Establishing a new company and working with the lawyer, brokers and management companies to verify the transaction data - tenant payments, eviction of tenants, status of properties, planning status, adjustment between the payment of taxes and the reports presented.
6. Physical inspection of the building before sending an inspector - Lior Lustig lives an hour and a half drive from Connecticut and will provide video of the place during the tour and during the inspection
7. Inventions on site at the time of ordering an inspector, appraiser, contractors, management companies, etc.
8. Work regularly with the management companies and cross-reference the number of suppliers in each repair, for example when replacing a roof, bring in several suppliers and cross-reference various proposals for repair. Also working with our independent asset management software that will allow us not to be dependent on a particular management company. The software enables direct communication with the tenants, tracking of income and expenses, etc. - Lior will manage the software on an ongoing basis with the tenants and contractors in parallel with the management company.
9. Constant work on streamlining and optimizing expenses - due to extensive future activity of purchasing a large number of buildings, we can request a reduction in the cost of management and repairs, reuse of materials purchased in additional apartments, etc.
10. Work on increasing the value of the properties - for example in multi-family properties - improving the property to increase the rent and thus increase its value for refinancing or sale, performing various activities in the properties to increase income from them such as billboards, renting warehouses, washing machines and drinks, renting common spaces in the property. . Thinking outside the box as explained in Lior Lustig's lecture on the multifamily world.
11. Working with the American Accountant to produce tax returns for investors - K1.
12. Management of the bank accounts of the assets on an ongoing basis - investors will be given full transparency to the bank accounts to see the incoming and outgoing expenses.
If you are interested in more details, please send a return e-mail to this e-mail by clicking on the blue button at the bottom - but it is better that you post your questions in the Connecticut Transactions Forum, which is part of the "investment arena" on the forum's website:
https://www.forumnadlanusa.com/groups/connecticut/forum/topic/
Register for the site with your Facebook account, click on the Connecticut forum, ask to join and we will confirm it for you. The forum is intended for transactions relevant to Connecticut. The "investment arena" on the site is a new and experimental format, so if you encounter any problems, do not hesitate to contact me.
You are also welcome to arrange a conversation with me for further information at this link
Investors who first transfer the seriousness fees will enter the deal.
The exact address of the property will be given after signing a confidentiality document and transferring the seriousness fees.
By the way - if you know an investor who is interested in joining multi-family transactions in Connecticut, you are welcome to send him / her the landing page:
https://info.www.forumnadlanusa.com/multi
Appears 🙂
Lior Lustig
Director and Founder of the United States Real Estate Forum
-------------------------------------
This property was posted on the Real Estate Forum of the United States Real Estate Forum
To view the full details of the property please click on the attached link
-------------------------------------
The site's famous properties are also posted on the Facebook property forum and are sent to the forum's mailing list
To advertise properties, you can enter the property site, create a profile, and manage your assets:
https://properties.www.forumnadlanusa.com
Want to get all the forum updates to your email once a week? Register now for our mailing list:
https://www.forumnadlanusa.com/newsletter-signup/
Link to our main forum:
https://www.facebook.com/groups/ForumNadlanUSA
Forum link:
www.ForumNadlanUSA.com
You are invited to click on the link to reach the property page, and ask questions about the property in the form on the property page of the site, or here in the forum
Successfully!
Hello friends, as you may have noticed, the amount of good deals is few and should be found in tweezers. The current deal is for a duplex in the developing city of Meriden that…
Responses