Chicago or Milwaukee... What's better?

[Johann Kleisch]

I live about half way between Chicago and Milwaukee and plan to start buying 8-50 unit apartment buildings within one year. 

What market would be better to invest in over the next 10 years.  I know people can't predict the future, so what would you recommend based on the last 10 years.

Also looking for suggestions on commercial brokers in both markets.

Thanks in advance, best of success! 

[Wendell De Guzman]

I guess there are pro's and con's in every city.

I can't say anything about Milwaukee but I have the following data for Chicago:

1) Volume of Sales have Risen in the Past 5 Years

2) Months of Supply Have Decreased Substantially In the Past 5 Years

3) Foreclosure Filings is A Leading Indicator of Price Movement - As Can Be Seen Below, Foreclosure Filings Have Decreased Substantially in the Past 3 Years

4) What's Behind Higher Sales, Lower Inventory and Lower Foreclosure Filings is Excellent JOB GROWTH In The Past 4 Years

5) All of The Above Shows That Over the Long Term, Home Prices Are Poised To Go Higher in Chicago (Based on Chicago Case Shiller Index)

CONCLUSION: Chicago is a great market for fix-n-flips, rent to own and appreciation plays (with no cashflow).

The Downsides of Investing in Chicago?

1) High Property taxes and corrupt government (which leads to increasing property taxes) results in population migrations across the borders (to Indiana and to Wisconsin). The ones most affected are the cities/ towns nearest those borders like Zion in the north and southeast cities in Cook counties (think of Calumet City, Chicago Heights).

2) High property taxes do not make Chicago ideal for buy-and-hold as the high property taxes result in lower cashflow. Having said that, rents are also high as you approach Chicago city specifically, Chicago northside neighborhoods. 

3) Corrupt and pro-tenant governments specially in the city of Chicago makes evictions painful and costlier vs. in other counties in Chicagoland (e.g., Dupage county is very pro-landlord!)

Other than a couple of rent to own properties, my buy-and-hold are NOT in Chicago. The above 3 downsides are the reasons why.