Milwaukees Old Homes

[Account Closed]

As I look at properties in Milwaukee for the most part they are obviously old. Most build in the late 1800's early 1900's- has anyone thought about tearing them down and building new ones?

If yes unless I just haven't heard about it why isn't it being done?

Thanks in advance BP

Jorge Ruiz 

[Marcus Auerbach]

Originally posted by @Account Closed:

As I look at properties in Milwaukee for the most part they are obviously old. Most build in the late 1800's early 1900's- has anyone thought about tearing them down and building new ones?

If yes unless I just haven't heard about it why isn't it being done?

Thanks in advance BP

Jorge Ruiz 

 It's been a while Jorge! You are right, the older parts of town date back to the 1920, but as you go more outward there are a lot of areas that have been developed post WW2. The basements are deeper and made from cinder block, they have sump pumps, the rest is 2x4s and drywall instead of lath and plaster, more modern floor plans, more closet space, etc..

I have looked into tear down and rebuild; I know I can build a duplex for under $150/sf - so about 350k in build cost with 3 BR and 1.5bath units. Now you have to add purchase of the lot (or the tear down), cost of demolition and disposal of the old building, impact fees, utilities, overhead - you can twist and turn it and its always going to be around half a million. If you do that in a lower priced neighborhood it will never appraise out, and if you go into a higher priced neighborhood you land acquistion cost will be even higher. Also, it is difficult to make the project cash flow; you'll need rents to the tune of $2000, which again points you into a higher priced neighborhood. The best way to pull it off in my opinion is to buy a duplex with an extra buildable lot included and then develop the "free land". Have not found a way yet to pull that off...