Why investors dump their Milwaukee low end rental properties?

[Lei Pan]

I have done a lot of studies of listed Milwaukee properties, particularly those listed below $50k.  I am surprised to see a couple of investors are unloading their properties by selling in bundles.  Their properties are still all fully rented out, and with good cash flow in my opinion.

What are the reasons for their unloading?

(1) do they see bad future?

(2) do they have too much hidden costs that make the cash flow much worse than it looks?

(3) Did they find better opportunities elsewhere?

[James R.]

I think Milwaukee gets a bad rap for being labeled as a "segregated" city.  Milwaukee is very unique in that it is a city of neighborhoods, with each neighborhood holding on to its unique identity due to the people who live there.  I personally like that.  What I don't like is the poverty in the underprivileged neighborhoods, which sometimes can be perpetuated by landlords.  NPR had a report on how the "system" can work against poor people when it comes to evictions.  The landlord buys a pig and doesn't maintain it.  Instead, he/she pockets the cash flow.  When the tenants refuse to pay rent because the landlord is not maintaining the property, the landlord files for eviction.  There are numerous cases where the poor are continually victimized by these true to form "slumlords".  These same landlords are now trying to unload their pigs to out-of-town investors as cash cows.

The City of Milwaukee is 63% non-white.  The problems started when people seeking jobs and a better life (often from Chicago) came to the neighborhoods left behind during white flight.  When the manufacturing jobs evaporated, these new residents were left with no options.  

The Wal-Mart in the Northside of Milwaukee, which is predominately black, just closed due to lack of profits. Many in that neighborhood are now unemployed due to its closure.  When will corporations do something good for a change, instead of putting profits before people?  

@Dawn Anastasi  I believe your success is due to the fact that you self-manage your properties and you also care.  If more landlords were like you, they would be part of the solution to providing decent housing to people in poorer neighborhoods.  Kudos!