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Updated 10 days ago, 11/15/2024
TR, I am an investor from Milwaukee.
My name is TR, I am an attorney and investor from Milwaukee. As Milwaukee is my home market I have a strong interest in investing here. I also want to be active in other rust-belt cities that are similar to Milwaukee and I want to be part of their eventual comeback: Cleveland, Detroit, Pittsburgh, St. Louis, and Chicago.
Before the great recession, as a 22-year-old that knew nothing, I did a few flips and ran my own property management company. I lost a lot and have been reticent to jump back in. But I am now.
In the past few years, my wife and I have done a couple of house hacks and two short-term rentals. As we seek to grow as professional investors we are sincerely interested in building our network.
I am on Bigger Pockets looking for everything: knowledge, partners, leads, financing, and other team members.
Torrean Welcome to Bigger Pockets and I wish you all the best in your investing journey!!
Congrats for making it back. We all lost money in '08 - so it's all good.
I love the SE Wisconsin market! Let's connect as I travel there about every quarter. I own a good size portfolio there. Thinking about selling some to... maybe
Hi Torrean:
We all have learned from our mistakes. As far as property management goes, I found a lot of the easy-to-get property accounts are the most difficult to collect and manage. But if you automate your rent collection and buy a property with the right tenants it becomes enjoyable. I have a weekly foreclosure list that goes out and I monitor 4 family apt building listings too...
Best regards, Greg
#2 Managing Your Property Contributor
- Property Manager
- Royal Oak, MI
- 4,806
- Votes |
- 8,213
- Posts
#2 Managing Your Property Contributor
- Property Manager
- Royal Oak, MI
@Torrean Edwards he's baaack:)
Glad you're getting "back on the horse"!
One of the biggest challenges of investing in Rustbelt cities is knowing where to invest and properly understanding the cooresponding pros & cons.
Here's copy & paste advice we share to help to address this challenge:
-------------------------------------------------------------------------------------------
Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.
Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.
If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.
If you buy/renovate a Class A property in Class D area, what quality of tenant will you get?
Similarly, if you put all Class D tenants in a Class A 4-plex, what do you think will happen?
So, when investing in areas they don’t really know, investors should research the different property Class submarkets.
Here’s our OPINION for the Metro Detroit market (use as a template for your target area!) that we’ve learned in our 24 years, managing almost 700 doors across the Metro Detroit area, including almost 100 S8 leases.:
Class A Properties:
Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.
Vacancy Est: Historically 10%, 5% the more recent norm.
Tenant Pool: Majority will have FICO scores of 680+ (roughly 5% probability of default), zero evictions in last 7 years.
Class B Properties:
Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.
Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.
Tenant Pool: Majority will have FICO scores of 620-680 (around 10% probability of default), some blemishes, but should have no evictions in last 5 years
Class C Properties:
Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation. Can try to reposition to Class B, but neighborhood may impede these efforts.
Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.
Tenant Pool: majority will have FICO scores of 560-620 (approaching 22% probability of default), many blemishes, but should have no evictions in last 2 years. Verifying last 2 years of rental history very important! Also, focus on 2 years of job/income stability.
Class D Properties:
Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciation
Vacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.
Tenant Pool: majority will have FICO scores under 560 (almost 30% probability of default), little to no good tradelines, lots of collections & chargeoffs, recent evictions. Verifying last 2 years of rental history and income extremely important to find the “best of the worst”.
Make sure you understand the Class of properties you are looking at and the corresponding results to expect.
The City of Detroit has 183 Neighborhoods we’ve analyzed.
PM us if you’d like to discuss this logical approach in greater detail!
- Drew Sygit
- [email protected]
- 248-209-6824
#3 Buying & Selling Real Estate Contributor
- Investor and Real Estate Agent
- Milwaukee - Mequon, WI
- 6,098
- Votes |
- 4,322
- Posts
#3 Buying & Selling Real Estate Contributor
- Investor and Real Estate Agent
- Milwaukee - Mequon, WI
You picked a good week to meet other investors: the RPA is hosting their annual RPA-CON Friday and Saturday in Milwaukee. Actually in Pewaukee, so also easy to get to from Madison.
- Marcus Auerbach
- [email protected]
- 262 671 6868
Good luck on your journey nothing like some good lessons to teach you how to bounce back from anything.
Hi Torrean,
Nice to meet you. My name is Rebecca and my husband, Nick Knox III and I have run Captain Save a Home LLC, Brew City REI Club, Brew City REI Training Cafe and Wisconsin Contractor and Handyman Club based out of Milwaukee, WI for over a decade. My husband is also a licensed realtor with Premier Point Realty. Additionally, I wholesale deals and we buy & hold in SE Wisconsin. Reach out if I can help with anything.
Thank you so much everyone.
Quote from @Drew Sygit:
@Torrean Edwards he's baaack:)
Glad you're getting "back on the horse"!
One of the biggest challenges of investing in Rustbelt cities is knowing where to invest and properly understanding the cooresponding pros & cons.
Here's copy & paste advice we share to help to address this challenge:
-------------------------------------------------------------------------------------------
Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.
Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.
If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.
If you buy/renovate a Class A property in Class D area, what quality of tenant will you get?
Similarly, if you put all Class D tenants in a Class A 4-plex, what do you think will happen?
So, when investing in areas they don’t really know, investors should research the different property Class submarkets.
Here’s our OPINION for the Metro Detroit market (use as a template for your target area!) that we’ve learned in our 24 years, managing almost 700 doors across the Metro Detroit area, including almost 100 S8 leases.:
Class A Properties:
Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.
Vacancy Est: Historically 10%, 5% the more recent norm.
Tenant Pool: Majority will have FICO scores of 680+ (roughly 5% probability of default), zero evictions in last 7 years.
Class B Properties:
Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.
Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.
Tenant Pool: Majority will have FICO scores of 620-680 (around 10% probability of default), some blemishes, but should have no evictions in last 5 years
Class C Properties:
Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation. Can try to reposition to Class B, but neighborhood may impede these efforts.
Vacancy Est: Historically 10%, but 15-20% should be used to also cover tenant nonpayment, eviction costs & damages.
Tenant Pool: majority will have FICO scores of 560-620 (approaching 22% probability of default), many blemishes, but should have no evictions in last 2 years. Verifying last 2 years of rental history very important! Also, focus on 2 years of job/income stability.
Class D Properties:
Cashflow vs Appreciation: Typically, all cashflow with little, maybe even negative, relative rent & value appreciation
Vacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.
Tenant Pool: majority will have FICO scores under 560 (almost 30% probability of default), little to no good tradelines, lots of collections & chargeoffs, recent evictions. Verifying last 2 years of rental history and income extremely important to find the “best of the worst”.
Make sure you understand the Class of properties you are looking at and the corresponding results to expect.
The City of Detroit has 183 Neighborhoods we’ve analyzed.
PM us if you’d like to discuss this logical approach in greater detail!
Wow, Drew, this is invaluable advice and I am very appreciative of the support. I will internalize this, thank you. I will definitely be reaching out.
Quote from @Rebecca Knox:
Hi Torrean,
Nice to meet you. My name is Rebecca and my husband, Nick Knox III and I have run Captain Save a Home LLC, Brew City REI Club, Brew City REI Training Cafe and Wisconsin Contractor and Handyman Club based out of Milwaukee, WI for over a decade. My husband is also a licensed realtor with Premier Point Realty. Additionally, I wholesale deals and we buy & hold in SE Wisconsin. Reach out if I can help with anything.
Rebecca, you are a legend and I am somewhat familiar with Captain Save a Home, I cannot wait to chat with you.
Thank you.
Quote from @John Mason:
Torrean Welcome to Bigger Pockets and I wish you all the best in your investing journey!!
thank you John!
Quote from @Andre Brock:
Good luck on your journey nothing like some good lessons to teach you how to bounce back from anything.
Thanks Andre, looking forward to connecting with you soon.
Quote from @Marcus Auerbach:
You picked a good week to meet other investors: the RPA is hosting their annual RPA-CON Friday and Saturday in Milwaukee. Actually in Pewaukee, so also easy to get to from Madison.
Thank You Marcus, I am looking forward to it and hope to attend.
Quote from @Tim Ryan:
Congrats for making it back. We all lost money in '08 - so it's all good.
I love the SE Wisconsin market! Let's connect as I travel there about every quarter. I own a good size portfolio there. Thinking about selling some to... maybe
Thank you Tim, this sounds fantastic. I am looking forward to connecting with you.
Quote from @Gregory Chadwell:
Hi Torrean:
We all have learned from our mistakes. As far as property management goes, I found a lot of the easy-to-get property accounts are the most difficult to collect and manage. But if you automate your rent collection and buy a property with the right tenants it becomes enjoyable. I have a weekly foreclosure list that goes out and I monitor 4 family apt building listings too...
Best regards, Greg
Hello Greg, thank you. How do I enroll in your weekly list? Thanks again for sharing.
Hi, welcome yes Ohio's market is doing fairly well and if you have any questions please reach out. Best Wishes!
Welcome @Torrean Edwards What are some of your goals with getting back into the Real Estate game? Buy and Hold, flips, etc? I'm focused on Longterm Rentals but any way to help let me know.
Quote from @Marcus Auerbach:
You picked a good week to meet other investors: the RPA is hosting their annual RPA-CON Friday and Saturday in Milwaukee. Actually in Pewaukee, so also easy to get to from Madison.
Marcus, the event was great and I truly appreciated your market review and forecast. That was enlightening.
Quote from @Regina Blake:
Hi, welcome yes Ohio's market is doing fairly well and if you have any questions please reach out. Best Wishes!
Thank you Regina, I would love to borrow from your knowledge.
Quote from @Pat Parrillo:
Welcome @Torrean Edwards What are some of your goals with getting back into the Real Estate game? Buy and Hold, flips, etc? I'm focused on Longterm Rentals but any way to help let me know.
Hey Pat, Thanks for reaching out. I am most comfortable with long-term rentals, but I would like to try a flip or two to build my capital. With market conditions as they are I don't want to be too restrictive.
Quote from @Torrean Edwards:
Quote from @Pat Parrillo:
Welcome @Torrean Edwards What are some of your goals with getting back into the Real Estate game? Buy and Hold, flips, etc? I'm focused on Longterm Rentals but any way to help let me know.
Hey Pat, Thanks for reaching out. I am most comfortable with long-term rentals, but I would like to try a flip or two to build my capital. With market conditions as they are I don't want to be too restrictive.
Smart idea staying flexible in this environment. Value add deals are where the numbers work the best on many deals now. Capital generation is always good with a flip, or maybe getting into a value add deal, leveraging hard money to update the property, then re-fi and hold. Could be a way to get into deals with less money up front and get a long-term rental out of it. One idea that could align with your goals.
Welcome! I am also located in Milwaukee. Excited for you and your journey.
