Milwaukee Rental Locations

[Benjamin Eccles]

This is for all of my seasoned Milwaukee area investors! I am brand new to real estate investing and am having trouble identifying the best neighborhoods or suburbs to find great deals on multifamily homes. I am currently living on Marquette's campus so everything within a mile is either the downtown area or very low income and very high crime rate (western and southern Milwaukee proper). What areas have others found the most success? I am not really looking to flip or whole sale, I feel that Milwaukee area has great cash flow potential I just can't find any properties with the numbers working. I am thinking of expanding into the first ring suburbs because I know there are some great neighborhoods but if any could point me in a more specific directing than just "outside of Milwaukee" I would really appreciate it! Another idea is to do student rentals, as they are high cash flow opportunities but I'm assuming a lot more management goes into those kinds of properties. It would be very convenient to be living within blocks of a rental and maybe it would be good to dive in head first to a possibly high maintenance situation to learn the ropes. Thanks for any help you can provide! - Ben

[Darren Budahn]

@Benjamin Eccles

Obviously, the better cash flow opportunities (on paper at least) are going to be in the city.  And of course the worse the neighborhood, the more possible cash flow you can theoretically get.  Of course owning property in tough neighborhoods comes with its own host of problems that I'm sure you can imagine what they are.  I am in no way advising doing this (especially if you have no experience), but the numbers will always look better from a cash flow perspective in bad neighborhoods. 

I still think you can be cash flow positive just about anywhere in Milwaukee and in almost all of the suburbs.  West Allis and South Milwaukee are strong rental areas that aren't super expensive.  Tosa is going to be super expensive everywhere and have very few opportunities.  All the North Shore suburbs will be pricey as well and aren't going to be cash cows if that's what you are looking for.  

I would try and define exactly what your goals are and then come up with a plan to reach those goals. Are you planning on living in the multifamily that you want to purchase? If I had to do it over again when I was younger, I would have bought a 2, 3, or 4 unit on the East Side with an FHA loan and lived in one of the units myself. You are able to to get in with a low down payment, learn how to be a landlord, and get to live in one of the best parts of the city while having other people pay your mortgage. You can cashflow and and also have a good chance of appreciation working in your favor over the long term.