Connecticut Foreclosure Auction List (6-14-14)

The following is a list of foreclosure auctions taking place through out Connecticut this Saturday, June 14, 2014. If you'd like more information on any of these properties, simply click here to email me and I'll send you the property information sheets.

Connecticut Foreclosure Auction List

74 Wright Drive, Avon, CT (No Photo)
73 Woodlawn Road, Berlin, CT (No Photo)
116 Rockwell Road, Bethel, CT (No Photo)
1077-1 Blue Hills Avenue, Bloomfield, CT (No Photo)
32 MILO DRIVE, BRANFORD, CT (No Photo)

80 Sixth Street, Bridgeport, CT


3245 Main Street, Unit #203, Bridgeport, CT (No Photo)
23 Birch Drive, Cheshire, CT (No Photo)
326 Colebrook River Road, Colebrook, CT (No Photo)
12 COUNTRY RIDGE ROAD, DANBURY, CT (No Photo) 
10 Martin Circle, East Hartford, CT (No Photo)

48 ANDREW DRIVE, EAST HARTFORD, CT


47 Ridgeline Road, Easton, CT (No Photo)
289 Ridgefield Street, Hartford, CT (No Photo)

54 Scenic Road, Madison CT


185 McKee Street, Manchester CT


31 Blackledge Drive, Marlborough, CT


6 Barwill Drive, Meriden, CT (No Photo)
664 West Main Street, Meriden CT (No Photo)
41 Carriage Crossing, Unit 8101, Middletown, CT (No Photo)

260 Fowler Ave. Middletown, CT


42 Fairview Street, Milford, CT (No Photo)

109 Harkness Drive, Milford, CT


167 Maplewood Avenue, Milford, CT


61 Cambridge Street, New Britain, CT

Click Here to learn more about investing in foreclosures

 

If you're interested in purchasing Short Sale or Bank Owned properties in Connecticut, please click here to let me know exactly what you're looking for.

1247E East Street, New Britain, CT


7 Pleasant View Road, New Fairfield, CT (No Photo)
9 Lyman Street, New Haven, CT (No Photo)
2 Old Lantern Lane New Milford, CT (No Photo)
18 Hinckley Road, New Preston (Washington), CT (No Photo)

65 Summit Street, Newington, CT


172 CURRITUCK ROAD, NEWTOWN, CT (No Photo)
34 Alpine Drive, Newtown, CT (No Photo)

5 Skiff Parkway, North Haven, CT


54 Brookfield Drive, Northford, CT (No Photo)

123 - 125 Broadway Norwich, CT


100 Broad Street, #103, Norwich, CT


13 Baltic Street, Norwich, CT


67 MAXINE ROAD, PLAINVILLE, CT


17 FINCH DRIVE, RIDGEFIELD, CT


360 Roosevelt Drive, Seymour, CT (No Photo)
71 Kyles Way, Unit 52, Shelton, CT (No Photo)
113 Low Bridge Road, Southbury, CT (No Photo)

163 Weed Hill Avenue, Stamford, CT


136 WEST BROAD STREET, STONINGTON, CT


1411 South Avenue, Stratford, CT (No Photo)

70 Mountain View Manor, Torrington, CT


36 KING STREET, WALLINGFORD, CT (No Photo)
106 Manor Ave., Waterbury, CT (No Photo)
302 Lakewood Road, Waterbury, CT (No Photo)
1461 Bunker Hill Road, Watertown, CT (No Photo)

244 Ridgewood Rd., West Hartford, CT


117 Chase Lane, West Haven, CT (No Photo)
24 Norfolk Street, West Haven, CT (No Photo)

41 Booth Avenue, Wethersfield, CT


6 Pine Street, Wolcott CT (No Photo)


If you'd like more information on any of these properties, simply click here to email me and I'll send you the property information sheets.

The best way to pet proof a rental (Q&A)

 

Click Here to email me your real estate investing question

Question: I am currently looking for more investment property in my town, and in doing my research on the local buy/sell pages it seems like there is an incredibly high demand for rentals that accept pets. I, like most landlords, don't really like the 4 legged friends to be in my units, but this might be a market here to make some money if I can find a way to keep my turnover costs low by "pet proofing" any new units that I buy. Just wondering what are the best ways to "pet proof" a rental?

Answer:  Hi Ken, You definitely want to get rid of any carpet in the unit. Also think about removing screen doors and adding doggy doors. Good exterior fencing will attract responsible pet owners. I feel that the little dogs do a lot of urine damage, so I'd rather have the mid size dogs. Meet, photograph, and pre-approve each dog. Do inspections and act on damage quickly. Charge a higher deposit and maybe even add $25/month extra for each dog.

Click Here to email me your real estate investing question

If you have a different opinion or just something that you'd like to add, please feel free to leave a comment below.

This is not legal advice. Please contact an attorney for professional legal advice.

How to Raise Money for Your Real Estate Investing

“It is natural to indulge in the illusions of hope. We are apt to shut our eyes to that siren until she allures us to our death.” – Gertrude Stein.

For many real estate investors, the thought of raising capital to increase their purchasing power is an irresistible allure.  However, how one goes about this business can have serious long-term ramifications for the uninformed. 
When you’re dealing with other people’s money, you need to make sure you are setup correctly. In the post Madoff climate, we now find ourselves with state and federal agencies that are pursuing a take no prisoners attitude when it comes to investors who raise money.   Failure to comply with the securities laws increases an investor’s risk of lawsuits by other investors – and can even lead to criminal prosecution.  Remember, ignorance of the law is no excuse and even an innocent mistake can lead to court and likely jail. 
If you are not deterred by these warnings . . .

Here are a few things to consider if you plan on raising money for your real estate investments:

• If you plan on raising money with an LLC, start by registering your LLC in the state where you will be working.  A mistake made by many investors is raising money through a Nevada entity without proper registration. This is a path to jail where you will not pass “go” if things turn south for your investors.
• Draft an operating agreement that details how the funds will be invested, distributed, managed and any fees paid for management.  This is a crucial step for any investor because the operating agreement puts everyone on notice as to how the funds will be handled i.e., it’s a point of agreement between you and your investors about how the LLC will operate.

Many real estate investors will not proceed past this point in their fund raising activities.  In other words, I have my LLC so let’s start making money.  Unfortunately, to stay completely legal (out of jail) you must also be mindful of state and federal securities laws. 
When one or more people buy into your LLC, you are selling what the government calls "securities" and there is an extremely complicated set of laws that govern this activity.  For example, most real estate investors are not aware that borrowing money from outside investors can be construed as a security.  It’s sad but true and I have read of a few situations where the SEC put promoters in orange jump suits for their borrowing activities.
It sounds scary, but if you follow the rules from the beginning, it’s not that bad. Generally, when raising money your fund will fall under "Regulation D," which gives several exemptions. Here are some general guidelines, but as I tell everyone with this idea – CONSULT A SECURITIES  ATTORNEY IN YOUR STATE: 

• Try to Partner only with Accredited Investors who meet one of the following criteria:
  • An individual with annual income of more than $200,000 per year, or a joint income of $300,000, in each of the last two years and expect to reasonably maintain the same level of income.
  • An individual who has a net worth exceeding $1 million, either individually or jointly with his or her spouse excluding the personal residence.
  • An individual who is a general partner, executive officer, director or a related combination thereof for the issuer of a security being offered.
• Keep your offering private, never blatantly advertising to the public.  On the other hand, you can provide general information about what activities and why you need money.
• Raise no more than $5 million
• Require your investors to sign a Subscription Agreement
• Do not guarantee a rate of return or refer to performance of past offerings

These are just some of the concerns you should address prior to raising money for your investing. Remember, it is better to spend a few thousand with an attorney on the front end of your business rather than tens of thousands if things go wrong.

Article by Attorney Clint Coons

Connecticut Foreclosure Auction List (6-7-14)

The following is a list of foreclosure auctions taking place through out Connecticut this Saturday, June 7, 2014. If you'd like more information on any of these properties, simply click here to email me and I'll send you the property information sheets.

Connecticut Foreclosure Auction List

6 Broad Oak Drive, Ashford, CT (No Photo)

48 Wintonbury Avenue, Bloomfield, CT


11 Hillcrest Avenue, Bloomfield, CT


356 Monticello Drive, Branford, CT (No Photo)
198 PENNSYLVANIA AVENUE, BRIDGEPORT, CT (No Photo)
1144 Huntington Turnpike, Bridgeport, CT (No Photo)
54 Marcy Road, Bridgeport, CT (No Photo)
 2625 Park Avenue, Unit 7-P, Bridgeport, CT (No Photo)
72 Bancroft Avenue, Bridgeport, CT (No Photo)

199 Parish Hill Road, Chaplin CT


7 Marine Avenue, Clinton, CT


3 Holly Court Unit B Building 36, Cromwell, CT (No Photo)
3 Lovers Lane, Danbury, CT (No Photo)
61 Lawrence Avenue, Unit 2405, Danbury, CT (No Photo)

  10 North Cobblers Court, Niantic, CT


23 Connecticut Avenue, Enfield, CT


598 South Benson Road Fairfield, CT (No Photo)

110 Farmington Avenue, Fairfield, CT

140 Water Street, Guilford, CT (No Photo)

103 Shore Drive, Guilford, CT 


74-76 Thomaston Street Hartford, CT


186-188 Putnam Street, Hartford, CT 


19 Beechwood Drive, Harwinton, CT  (No Photo)

127 Country Club Road, Killingly (Dayville) CT


3 Goldfield Road, Killingworth, CT (No Photo)
66 Goodwill Avenue, Meriden, CT (No Photo)
43 Algonquin Road, Middlefield, CT (No Photo)

18 Bridge Street, Unit 3C Naugatuck, CT


70 Lawlor Street, New Britain, CT


25 Harvard Street, New Britain, CT (No Photo)
40 Donna Drive, Unit B-4, New Haven, CT (No Photo)
76 Filmore Street, New Haven, CT (No Photo)

737 Dixwell Avenue, New Haven, CT


3 Riverview Court, New Milford, CT


6 Wendover Road, Newtown CT

Click Here to learn more about investing in foreclosures

 

If you're interested in purchasing Short Sale or Bank Owned properties in Connecticut, please click here to let me know exactly what you're looking for.

4 Glenwood Avenue, Unit B-4, Norwalk, CT



12 LINCOLN AVENUE, NORWALK, CT


66 Hamilton Avenue, Norwich, CT


68 Mathewson Mill Road, Preston, CT


324 South Main Street, Putnam, CT


20 Angell Avenue, Shelton, CT


481 Old Long Ridge Road, Stamford, CT


23 Garden Street, (Pawcatuck) Stonington, CT


456 Barnum Terrace Extension, Stratford, CT (No Photo)
85 Floral Way, Stratford, CT (No Photo)

2370 Stratford Avenue, Stratford, CT

65 Marsh Way, Stratford, CT (No Photo)

430-432 High Street Torrington, CT


Unit 9, Bldng 1, Elm Garden Condominium, 317 S. Elm Street, Wallingford, CT (No Photo)
60 Bee Brook Rd Washington, CT (No Photo)
254 Horseshoe Drive, Waterbury, CT (No Photo)
245 Montoe Road, Waterbury, CT (No Photo)

60 Old Norwich Road, Waterford, CT 


16 Spring Lane, West Hartford, CT


440 Ocean Avenue, West Haven, CT (No Photo)
1014-1016 Ocean Avenue, West Haven, CT (No Photo)

8 Wildwood Dr. Wilton, CT


23 Coolidge Street Windsor Locks, CT (No Photo)


If you'd like more information on any of these properties, simply click here to email me and I'll send you the property information sheets.

What is Gross Rent Multiplier

Gross Rent Multiplier is a simple calculation but because income plays no role in the formula, it provides limited insight into the apartment’s investment viability. Gross Rent Multiplier (GRM) is also easy to calculate but unlike Price Per Unit, GRM does incorporate the property’s income.

Gross Rent Multiplier = Price / Gross Scheduled Income (annual)

Gross Scheduled Income is the potential income a property would generate if it was 100% occupied. You can think of GRM as the number of years it would eventually take for the property’s gross income to total the price.

Example: A 10-unit apartment building is offered for sale at $1 million. Each unit is 2Bd/2Ba and is renting for $1,000. What is the Gross Rent Multiplier?

Gross Rent Multiplier = $1,000,000 / (10 x 1,000 x 12) = 8.33 GRM

As long as you can get your hands on the rent roll, then the Gross Rent Multiplier measurement is preferred over Price Per Unit. Generally speaking, properties in prime locations have higher GRMs versus properties in less desirable locations.

Advantage – It’s More Useful and Reliable than Price Per Unit
Pop quiz, what are you buying when acquiring an apartment? You’re buying income stream. Given the fact that GRM accounts for income into its formula automatically makes it a more reliable method for evaluating investment properties compared to Price Per Unit. Additionally, by taking into account income, property features are automatically factored into your evaluation. It’s reasonable to assume that rents reflect unit size, amenities, location, and even external factors such as general market conditions that may add to or deduct from its price level. Rents are market driven – you can only charge as much as a tenant is willing and able to pay. By factoring in a market-driven data point (income), GRM is more reliable as a measurement for comparing properties. In areas where operating costs can be expected to be uniform across properties, GRM is especially useful for comparing and selecting investment properties for further analysis.

Limitation – Ignores Vacancy & Operating Expenses
Gross Rent Multiplier serves to indicate what the market is paying as a multiplier of the gross income. As explained above, gross income is generally a good data point because its market driven and accounts for enhancements and deficiencies of the property as well as general rental demand. But because it is gross instead of net income, GRM fails to differentiate properties with lower or higher operating expenses and vacancies. Tenants may pay for some, all, or none of the operating expense. For example, a landlord may pay for all utilities because the building is master metered. This will result in higher rents compared to an identical property where those costs are directly passed to tenants. If you were estimating the price between the master-metered versus the individual-metered property using the same GRM number, then this would result in a very questionable value.
As with Price Per Unit, it’s important to understand the reason to use Gross Rent Multiplier. Always keep in mind the above limitations and remember that its purpose is to get a quick feel for the potential market value of the apartment.

Is "Price Per Unit" really important?

If you’re evaluating many apartment investment deals, oftentimes you need a quick way to determine ones that warrant more detailed analysis. After all, your time is valuable and any time spent analyzing deals that don’t make sense from the very beginning may result in other lost opportunities. What you need are techniques to act as filter mechanisms and help you quickly decide if the investment deal will really work.

Price per Unit is often used because it’s simple and quick to calculate.

Price per Unit = Price ÷ Number of Rental Units.

 

What makes it popular is that it’s easy to gather the necessary information to run the calculation. All that’s needed is the asking price and the total number of units.
Example: A 10-unit apartment building is offered for sale at $1 million. The property has a total of 20 bedrooms and 20 baths. What is the Price per Unit?

$1,000,000 ÷ 10 units = $100,000 per Unit.

If the general price per unit rate is $50k per unit, and the property is offered at $100k per unit, then red flags should be raised immediately. If evaluating multiple deals, this might be one you choose to set aside.

Precaution #1 – Neglecting to Factor in Property Features
What if the general rate in the area was $75,000 per unit? Will you still be quick to discount the property? One precaution to take with Price per Unit is that it doesn’t take into account property features such as amenities, location, or floor plans. Each of these can add or subtract to the Price per Unit value. Let’s say the 10-unit subject property’s 2bd/2ba units are generous in size at 1400 sq ft each. Other surrounding properties have outdated floor plans with only 2bd/1ba models and average 800sq ft each going at the general rate of $75k per unit. The higher price per unit of the 10-unit apartment would then be warranted because of its more modern features and larger floor plans. If you were strictly comparing price per unit rates, then you may have dismissed this opportunity by thinking the property was overpriced.

Precaution #2 – Ignoring the Investment Feasibility
Since Price per Unit is based on the physical feature of the property, it’s really a physical measure, not a true financial measure. Because the income is never reflected in the formula, price per unit provides little insight towards financial feasibility of the investment property. You can’t derive from it whether the investment property will provide a suitable return or not. A property could be offered at a low price per unit but still turn out to be a horrible investment because of negative factors such as bad location or problems due to deferred maintenance. Alternatively, a high price per unit doesn’t necessarily mean it’s a bad deal as illustrated in the section above.
Price per Unit is easy to calculate so it’s often a good initial measure to use. However, keep in mind that Price per Unit only looks at the number of units; it completely ignores everything else about the property including its features, location, and income and is limited in its usefulness. Therefore, if the deal passes the Price per Unit test, then move on to the GRM test or the Cap Rate test.

What is a Cap Rate? (Capitalization Rate)

What is Capitalization Rate?

I'll give you the short answer and the more descriptive answer... The short answer is that the Capitalization Rate is the rate of return that you would expect if you were to purchase a property using all cash (no financing). It's just that simple. But I'll dig a little deeper so you fully understand what it is and why it's so important.

The Capitalization Rate, often referred as Cap Rate or just Cap. It is similar to GRM but can be more precise because it considers vacancy loss and operating expenses.

 

Cap Rate = Net Operating Income / Price

Net Operating Income (NOI) is the sum of all potential income less vacancy and operating expenses. NOI does not consider debt payments, depreciation, or capital improvements.

Calculating Cap Rate: An Example

A 10-unit apartment building is offered for sale at $1 million. Its annualized rent roll is $100,000 with operating expenses totaling $40,000. What’s the Cap Rate if average vacancy rate in the area is 5%?
Capitalization Rate = ($100,000 – ($100,000 x 5%) – $40,000) / $1,000,000 = 5.5% Cap
If you know the going Cap Rate for the area, then you can also derive the property value from the NOI.
Cap Rate addresses the limitations of Price Per Unit and Gross Rent Multiplier by including income, vacancy loss, and expenses in its calculation. However by doing so, other problems are introduced.

Precaution #1: Is the Cap Rate Distorted?

Capitalization Rate isn’t flawed, per se. The problem is with Net Operating Income. More often than not, NOI may be inaccurate, which distorts Cap Rate and consequently, misrepresents the estimate of value.
The inaccuracies stem from three primary reasons:

1. Misrepresented expenses
2. Excluded expenses
3. Improper expenses factored into the calculation

Common expenses include insurance, property management, real estate taxes, business fees, maintenance, trash removal, electricity, gas, and water. While reviewing each expense item, confirm the validity of each number. Try and obtain the actual amounts rather than estimates. Are items inappropriately labeled as operating expenses? Remember that depreciation, capital improvements, and mortgage payments are excluded.
Ensuring that expenses are complete and valid will enable you to estimate a more credible value.

Precaution #2 – Is the cap rate calculation based on current or pro forma numbers?

Sometimes sellers or brokers will base their asking price against the future income of the property. This future income is almost always higher resulting in a higher Cap Rate. This tactic is used to lure the unaware investor.
While it’s important to understand the potential upside in rents, projected numbers shouldn’t act as your baseline for estimating value. When estimating value, use current income and expenses. Then evaluate how much premium you’re willing to pay based on projected increases.

Precaution #3 – Financing is not considered.

Investors often use Cap Rate to gauge the potential return of a given investment property during the first year of ownership. Generally, a 10% Cap would indicate a 10% return on investment. Based on expected return, the investor then determines how much they are willing to pay. For investors who pay all cash, Cap Rate enables them to quickly do this.
Since NOI does not consider debt payments, Cap Rate ignores the impact of financing. Cap Rate stays the same whether a property is leveraged or all paid off. If financing is planned, then Cap Rate cannot be used as an estimate of value. Additional methods (ie. cash-on-cash or IRR) are required to assist in that task. However, Cap Rate is still useful as a comparison tool even with financing involved.