Purchasing very old homes in Milwaukee: Good or Bad Idea?

Question

Hi all,

I am wondering if I can receive some advice from experienced investors when it comes to purchasing older homes in the Milwaukee area. Obviously, there are a lot of homes in Milwaukee that are very old. However, should I not consider purchasing properties that are past a certain age? For example, should I consider a property built in 1900 to be too old to not have any major defects? Also, what is your experience with how easy it is to sell these older homes when you want to liquidate? Thank you in advance for any advice!

Marcus Auerbach · Answer

Milwaukee had two major building booms that have created most of the housing stock: the immigration boom in the 1920s and the post WWII boom in the 1960s.

Houses built in the 1920 have had dug basements that are less deep in the ground, no original sump crock/pump and often brick walls. They were framed with slow grown and naturally dried timber, which is much harder than what you can find at Home Depot today. Windows, doors and millwork were built on site by very skilled carpenters in sizes you can't buy at Menards. Walls are lath and plaster (good luck finding a skilled & affordable plaster guy). Often radiant heat, no AC. Exterior has lots of architectural details, great curb appeal. Overall excellent craftsmanship, really well built. Automobiles were a new thing, so don't expect a modern 2 car garage.

Properties built in the 1960s have machine excavated basements, cinderblock walls and a steel carriage beam. Every house has a drain tile system and a sump pump. Closets have gotten bigger, because people had more stuff. Doors and windows are standard size and you can just buy a 6 panel door slab and hang it into the existing jamb. Interior walls are drywall, plumbing and electrical systems look basically like what we use today. Often forced air heat with AC. Exterior looks more like a shoe box, best case call it mid century modern. Many feature brick planters that fell victim to frost cracks.

From an investor point of view the 1960s generation is much easier and cost effective to maintain, material is readily available in standard sizes: doors, windows etc. Mechanical systems are easy to upgrade. Drywall is easier to patch than lath and plaster, which also tends to develop cracks and fall off the wall after 100 years. 1920 houses are much more custom meaning you'll send more on labor and material for every project.

When you go back to 1900 and before materials and craftsmanship is all over the map - from really good to very questionable. Houses were built with whatever people could find. Fieldstone for the basement walls, tree trunks for support posts. You really need to know what you are looking at, some are good and some are money pits. You find some really interesting specimen on the lower east side and in Bayview. It can be very tricky to estimate rehab budgets, as one thing tends to lead to another. Usually best to stick to paint and carpet.

A friend of mind rehabbed a large home in Bayview from ground up. They discovered structural issues and wanted to do things right. Had an interesting conversation with the carpenter about the challenges they had. He said in hindsight it would have been cheaper and faster to tear it down and build new on the lot.

More information about old duplxes and the differences on my YouTube channel

Jaron Walling · Answer

"naturally dried timber, which is much harder than what you can find at Home Depot today" - I built a coffee bar and shelfs for our kitchen out of old 1.5" wood like this. My miter saw blade was smoking when cutting it @Marcus Auerbach

Marcus Auerbach · Answer

I believe it! My grandpa (he grew up on a large farm in Austria) told me that harvesting construction lumber was done during dead winter and only during waning moon, which is when the sap is at the lowest. This way the lumber would be resistant to rot and fire. I am not sure how much there is to this, but people knew a lot of stuff that we have forgotten, or simply can't do because its not economical.

Marcus Auerbach · Answer

Yes! Some of the coolest "flips" (owner occupied remodel) I have seen on Milwaukee's North Shore are early 1920 mansions. They are well built and they do have tall ceilings and large windows, all features that we value today and that are impossible to create if not present. As of recently they usually sell for a million + and that is a combination of location and fantastic condition/design.

Similarly you can find mid century modern buildings, some in a Frank-Lloyd-Wright design that will break 7 figures if extensively updated, but ideally preserving the architect's vision.

But that is specific for flipping, both do not make for good buy & hold. And the stuff built before 1920 is hit and miss, well more miss I'd say when it comes to the bones - they just used whatever material they had, often lacking the excellent craftsmanship we have seen in the 1920.

Travis Hill · Answer

@Marcus Auerbach every answer you give, is so on point. I really look forward to reading, learning each time you comment. Thank you.

J.D Alexander · Answer

I believe your question speaks on a classic Fix and Flip situation. Sometimes it doesn't matter how old the property is really. While it may be correct that  houses from the 1900's and 1920's may require extensive reconstruction and structural design due to its substandard or deteriorated condition, the philosophy for some Realtors/investors is 'the older the property, the better'. For most people attempting a property rehabilitation project, the main objective is a profitable ROI and a substantial increase in  property value.All my experience in property wholesale and real estate investing, there are various building portions or features that can spike up property value. Most times its the kitchen and  other times an extension of a portion of the property. So basically, interior and exterior.

For example a very old house with a post war Milwaukee architecture can be extensively reconstructed to surpass recent or modern architectural housing designs.The architecture of Post-War housing in  Milwaukee is a topic that can very easily be swallowed by context. It’s not that the styles or buildings themselves are uninteresting, but rather that the forces creating them are infinitely more so. The mixture of a modest simplified version of traditional design and a modern architectural style direction sticks out distinctly.

This way, you can preserve the historical features of the building at the same time, making the building compatible and sometimes more valuable for new use. From an Investors artistic point of view, this would stand out in the property market, especially areas in Milwaukee which practices a more themed housing structure and architectural design.

Hope this helps.

Corby Goade · Answer

Buying REALLY old homes isn't good or bad. In many cases, the best neighborhoods are gentrified and are nothing but 100+ year old homes.

You'll obviously be doing due dilligence and there are generally 3 things you'll want to look out for with older homes (and newer homes too): plumbing- how old are the supply and sewer lines? What material are they made out of and what is their expected life span? For older homes, copper is a bit of a gold mine because of the life span, but most other materials are going to need attention.

Electrical: Anything other than breakers and 3-wire romex will likely need some spendy upgrades.

Foundation: depending on where you are in the country, this can be an expensive issue.

If there are problems with any of these, don't think of them as deal breakers, think of them as leverage. Can you negotiate the deal so it works with those repairs in mind? If so, I don't think there's any problem at all buying an older home, go for it.

Best of luck!

Marc Rice · Answer

Most homes I see in my local market are 1920-1945. Just be cautious of the basement, joists, knob and tube electric, galvanized plumbing, lead toilet elbows, termites, lead based paint, etc.

Sam McCormack · Answer

@Kollin Ruiz

Hi Kollin, I wouldn't worry too much on age. I have seen houses built in 1880 that look better than houses built in the 60's. It depends on the type of foundation. And older houses have stone foundations, which are normally very good and sturdy, as well as a poured foundation. I would never pass on an inspection though, always make sure to get that

Stephanie Barnard · Answer

I own my home in Riverwest; it was built in 1920. So far (2 years in) no major issues apart from a sewer root removal. No basement leaks, etc. (knock on wood!)

I also owned a house in Cincinnati that was built in 1890 that also had no major issues and I sold it for $100K more than I bought it for; it was on the market for 24 hours. So, it really depends on the market conditions and what condition the house is in when you buy it; I would personally not waive inspection on an older home, even if means you lose out on a deal, because you want to make sure the foundation, electrical, etc. are in good shape. Avoid knob & tube wiring and signs of foundation issues (cracks, sloping, etc.).

Purchasing very old homes in Milwaukee: Good or Bad Idea?

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