Cash flowing Milwaukee Multi-family B/C class neighborhoods
New to Real Estate · Long Island, NY · Member since 2018 · 16 posts · 15 votes
Cash flowing Milwaukee Multi-family B/C class neighborhoods
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Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
3yMilwaukee has a lot of duplexes, but they are old - either 1920's or 1960s. While the 1920s have great curb appeal, they are expensive to rehab - everything was custom built on site by carpenters. You can't just got to Home Depot and buy a door, it won't fit. That's different for the 1960's vintage, but I call them shoeboxes and they lack cur appeal. Look up Milwaukee duplxes on YouTube.
We also have a chronic housing shortage here, both for sale and for rent. This has been driving prices and rents for the last 8 years. A turnkey duplex for 125k will be in an F neighborhood. 250k is probably the minimum budget for an okay area, but even then you will need more than 5-7k for rehab. Paint and carpet will be more than that, usually you have a few other things to fix as well.
On the positive side, we have also seen rents go up and there is huge demand for nice rental properties. We usually get 100+ inquires in a week and rents are substanially higher than they used to be.
Given our inventory situation and the fact that demand is driven by a demographic shift I don't think much will change on the supply and demand equation and therefore prices are likely to continue to reflect that.
One way you can tell is that a good duplex in the 300-400k range will usually sell with multiple offers within 3-5 days and significantly over asking price. Anything that you see that has been on the market 10+ days be careful, 30+ days is a red flag, especially when it's dirt cheap and still nobody local wants it.
10 Replies
- Investor · Member since 2022 · 235 posts · 127 votes3y
Hey @Mavely Pazmino, our team has been focused on finding opportunities such as these in Milwaukee. We actually have one under contract now. It is possible to find a more or less turnkey property for that amount and prudent to underwrite conservatively when it comes to Maintenance and capex.
If you would like to connect, shoot me a DM.
- Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes3y
Milwaukee has a lot of duplexes, but they are old - either 1920's or 1960s. While the 1920s have great curb appeal, they are expensive to rehab - everything was custom built on site by carpenters. You can't just got to Home Depot and buy a door, it won't fit. That's different for the 1960's vintage, but I call them shoeboxes and they lack cur appeal. Look up Milwaukee duplxes on YouTube.
We also have a chronic housing shortage here, both for sale and for rent. This has been driving prices and rents for the last 8 years. A turnkey duplex for 125k will be in an F neighborhood. 250k is probably the minimum budget for an okay area, but even then you will need more than 5-7k for rehab. Paint and carpet will be more than that, usually you have a few other things to fix as well.
On the positive side, we have also seen rents go up and there is huge demand for nice rental properties. We usually get 100+ inquires in a week and rents are substanially higher than they used to be.
Given our inventory situation and the fact that demand is driven by a demographic shift I don't think much will change on the supply and demand equation and therefore prices are likely to continue to reflect that.
One way you can tell is that a good duplex in the 300-400k range will usually sell with multiple offers within 3-5 days and significantly over asking price. Anything that you see that has been on the market 10+ days be careful, 30+ days is a red flag, especially when it's dirt cheap and still nobody local wants it.
- Real Estate Broker · Milwaukee, WI · Member since 2015 · 299 posts · 90 votes3y
1. If not turnkey- then I've also considered duplexes that need light cosmetic work ($5-7k), but what can i expect from subcontractors in Milwaukee as far as completing a job/prices?
Contractors in Milwaukee are pretty busy and alot of times they won't keep their appt. I usually double book to get estimates. If it is light work i hit up nextdoor.com and ask for a contract and list what im looking to do.
2. For those that have invested in these areas, what can i expect to see as far as maintenance expenses, capex, turnover/vacancy rate, property management fees, utilities, types of tenants ?? Any specific points i should consider about these neighborhoods?
No matter where you buy good and bad tenants alike will apply, I screen everyone and don't necessarily run credit but i make sure they have time on the job and income is at least x times the rent.
3. Is ~$125k turnkey for a duplex reasonable?
That would be mainly on the north side. Which plenty of lanlords still can cashflow with the right management in place.
- 3yRebecca KnoxBusiness MemberSpecialist · Milwaukee, WI · Member since 2014 · 1k+ posts · 1k+ votes
Riverwest & Wauwatosa duplexes are much higher than 125k.
Your best bet for the price & TURNKEY will be North Division, Old North Milwaukee or Arlington Heights but be prepared for more activity managing.
Harambee would be next but in my opinion, a turnkey duplex will be much higher.
If you're out of state, I'd suggest hiring a reputable and local property manager. I use Citywide Rentals but there's also MKE Leasing and Welcome Home Milwaukee although they won't manage in some of those areas. A good property manager has maintenance on staff and can get things done cheaper and more efficiently. In higher crime areas such, the contractors are equivalent to the tenants--challenging and/or charging a premium to take the risk of working in said area. Use extreme caution before pre-paying...at the minimum, always check Driver's license/ID, personal name and LLC or company name in WI CCAP and do a background check....if the job requires a license, you can look it up on DATCP. I run Wisconsin Contractor & Handyman Club and based off the stories that I've witnessed, many would've saved a lot of heart ache if they just would've done these simple checks.
- New to Real Estate · Long Island, NY · Member since 2018 · 16 posts · 15 votes3y
Thank you all for the great insight.
- Real Estate Syndicator · Milwaukee, WI · Member since 2018 · 1k+ posts · 907 votes3y
Be ready to have property management and asset management dialed in. Managing C-class properties is not "turn-key". Requires a great PM and consistent monitoring.
- Member since 2023 · 32 posts · 6 votes3yI have also been looking at the Milwaukee real estate! The houses there are so amazing but yes they are expensive rehabs! I noticed the city also sells historic and distressed properties for less than $10k but have been inspected and shown to need $60k-$120k in essential repairs! I’d love to do that I’m next year. I also have been working with a property management company that manages rehabs for their out of state clients! But again it’s costly! I’m loving Milwaukee architecture! A real estate agent told me there was a spike in prices during the summer of over valuation and they are seeing it come down due to high interest rates and buyers hesitant to purchase at this point!
Quote from @Marcus Auerbach:
Milwaukee has a lot of duplexes, but they are old - either 1920's or 1960s. While the 1920s have great curb appeal, they are expensive to rehab - everything was custom built on site by carpenters. You can't just got to Home Depot and buy a door, it won't fit. That's different for the 1960's vintage, but I call them shoeboxes and they lack cur appeal. Look up Milwaukee duplxes on YouTube.
We also have a chronic housing shortage here, both for sale and for rent. This has been driving prices and rents for the last 8 years. A turnkey duplex for 125k will be in an F neighborhood. 250k is probably the minimum budget for an okay area, but even then you will need more than 5-7k for rehab. Paint and carpet will be more than that, usually you have a few other things to fix as well.
On the positive side, we have also seen rents go up and there is huge demand for nice rental properties. We usually get 100+ inquires in a week and rents are substanially higher than they used to be.
Given our inventory situation and the fact that demand is driven by a demographic shift I don't think much will change on the supply and demand equation and therefore prices are likely to continue to reflect that.
One way you can tell is that a good duplex in the 300-400k range will usually sell with multiple offers within 3-5 days and significantly over asking price. Anything that you see that has been on the market 10+ days be careful, 30+ days is a red flag, especially when it's dirt cheap and still nobody local wants it.
- Member since 2023 · 32 posts · 6 votes3yI am also interested in Milwaukee investing. There’s a high demand for rentals but a lot of people getting priced out of the safe developed neighborhoods. I see the city selling houses from less than $10k but need like $100k in rehab. Worth it if you’re experienced I think. I’d love to rehab some but I want to get my feet wet first! You can high a full service management company that will manage your company structuring and even find tenants and help you find a property! I have one I’m working with and so far they have all the services covered from real estate agents to contractors ready to help you.
Quote from @Gregory Chadwell:
1. If not turnkey- then I've also considered duplexes that need light cosmetic work ($5-7k), but what can i expect from subcontractors in Milwaukee as far as completing a job/prices?
Contractors in Milwaukee are pretty busy and alot of times they won't keep their appt. I usually double book to get estimates. If it is light work i hit up nextdoor.com and ask for a contract and list what im looking to do.
2. For those that have invested in these areas, what can i expect to see as far as maintenance expenses, capex, turnover/vacancy rate, property management fees, utilities, types of tenants ?? Any specific points i should consider about these neighborhoods?
No matter where you buy good and bad tenants alike will apply, I screen everyone and don't necessarily run credit but i make sure they have time on the job and income is at least x times the rent.
3. Is ~$125k turnkey for a duplex reasonable?
That would be mainly on the north side. Which plenty of lanlords still can cashflow with the right management in place.
- Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes3y
Quote from @Quincy Jones:
I have also been looking at the Milwaukee real estate! The houses there are so amazing but yes they are expensive rehabs! I noticed the city also sells historic and distressed properties for less than $10k but have been inspected and shown to need $60k-$120k in essential repairs! I’d love to do that I’m next year. I also have been working with a property management company that manages rehabs for their out of state clients! But again it’s costly! I’m loving Milwaukee architecture! A real estate agent told me there was a spike in prices during the summer of over valuation and they are seeing it come down due to high interest rates and buyers hesitant to purchase at this point!Quote from @Marcus Auerbach:
Milwaukee has a lot of duplexes, but they are old - either 1920's or 1960s. While the 1920s have great curb appeal, they are expensive to rehab - everything was custom built on site by carpenters. You can't just got to Home Depot and buy a door, it won't fit. That's different for the 1960's vintage, but I call them shoeboxes and they lack cur appeal. Look up Milwaukee duplxes on YouTube.
We also have a chronic housing shortage here, both for sale and for rent. This has been driving prices and rents for the last 8 years. A turnkey duplex for 125k will be in an F neighborhood. 250k is probably the minimum budget for an okay area, but even then you will need more than 5-7k for rehab. Paint and carpet will be more than that, usually you have a few other things to fix as well.
On the positive side, we have also seen rents go up and there is huge demand for nice rental properties. We usually get 100+ inquires in a week and rents are substanially higher than they used to be.
Given our inventory situation and the fact that demand is driven by a demographic shift I don't think much will change on the supply and demand equation and therefore prices are likely to continue to reflect that.
One way you can tell is that a good duplex in the 300-400k range will usually sell with multiple offers within 3-5 days and significantly over asking price. Anything that you see that has been on the market 10+ days be careful, 30+ days is a red flag, especially when it's dirt cheap and still nobody local wants it.
Unfortunatley there is no free lunch in Milwaukee, especially not for OOS buyers. If I could make money with low income rehabs I would: we have done BRRRRs for 15 years and now buying move in ready, because there is not enough discount in good areas and I have seen this play out in D and F areas many times: in two words: not good! And if you rehab through a PM your cost is likely at least 30% higher (they have to market up to survive).
What you have been told about prices is not correct. High interest rates have slowed the market, but not enough to reduce competition or prices. Last months List to Sale Price ratio was still 102%, down from 103%. Meaning people still pay over asking. You can follow my monthly market updates on YouTube and see how the data evolves month to month, you can also go back in time and check my predictions.
There is nothing on the radar that could reduce Milwaukee prices in a meaningful way; and we are still about a third below the national avergae, have a chrinic housing shortage, plenty of fresh water and are in a climate safe zone - all factors that will continue to increase demand eyond of where it already is, while we have no meangingful increase in supply and new construction is limited to small numbers and only luxury homes over 600k.
- Member since 2023 · 32 posts · 6 votes3y
Quote from @Marcus Auerbach:
Quote from @Quincy Jones:
I have also been looking at the Milwaukee real estate! The houses there are so amazing but yes they are expensive rehabs! I noticed the city also sells historic and distressed properties for less than $10k but have been inspected and shown to need $60k-$120k in essential repairs! I’d love to do that I’m next year. I also have been working with a property management company that manages rehabs for their out of state clients! But again it’s costly! I’m loving Milwaukee architecture! A real estate agent told me there was a spike in prices during the summer of over valuation and they are seeing it come down due to high interest rates and buyers hesitant to purchase at this point!Quote from @Marcus Auerbach:
Milwaukee has a lot of duplexes, but they are old - either 1920's or 1960s. While the 1920s have great curb appeal, they are expensive to rehab - everything was custom built on site by carpenters. You can't just got to Home Depot and buy a door, it won't fit. That's different for the 1960's vintage, but I call them shoeboxes and they lack cur appeal. Look up Milwaukee duplxes on YouTube.
We also have a chronic housing shortage here, both for sale and for rent. This has been driving prices and rents for the last 8 years. A turnkey duplex for 125k will be in an F neighborhood. 250k is probably the minimum budget for an okay area, but even then you will need more than 5-7k for rehab. Paint and carpet will be more than that, usually you have a few other things to fix as well.
On the positive side, we have also seen rents go up and there is huge demand for nice rental properties. We usually get 100+ inquires in a week and rents are substanially higher than they used to be.
Given our inventory situation and the fact that demand is driven by a demographic shift I don't think much will change on the supply and demand equation and therefore prices are likely to continue to reflect that.
One way you can tell is that a good duplex in the 300-400k range will usually sell with multiple offers within 3-5 days and significantly over asking price. Anything that you see that has been on the market 10+ days be careful, 30+ days is a red flag, especially when it's dirt cheap and still nobody local wants it.
Unfortunatley there is no free lunch in Milwaukee, especially not for OOS buyers. If I could make money with low income rehabs I would: we have done BRRRRs for 15 years and now buying move in ready, because there is not enough discount in good areas and I have seen this play out in D and F areas many times: in two words: not good! And if you rehab through a PM your cost is likely at least 30% higher (they have to market up to survive).
What you have been told about prices is not correct. High interest rates have slowed the market, but not enough to reduce competition or prices. Last months List to Sale Price ratio was still 102%, down from 103%. Meaning people still pay over asking. You can follow my monthly market updates on YouTube and see how the data evolves month to month, you can also go back in time and check my predictions.
There is nothing on the radar that could reduce Milwaukee prices in a meaningful way; and we are still about a third below the national avergae, have a chrinic housing shortage, plenty of fresh water and are in a climate safe zone - all factors that will continue to increase demand eyond of where it already is, while we have no meangingful increase in supply and new construction is limited to small numbers and only luxury homes over 600k.
Thank you for this honest and informative information, I very much appreciate the honest reply!
=)
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