Investing in Milwaukee or Madison WI

[Sebastian K.]

I was looking at homes in both Milwaukee and Madison WI to see how the market is there and I am finding multi family homes ranging from $4,000 to $100,000 in Milwaukee and $100,000 to $200,000 in Madison.  Why are the multi family homes so affordable in those towns?  I know Milwaukee made the top 10 list for the unsafest city to live in, however, Madison is considered a great place to raise a family.  Can someone who knows those areas share some light on these topics and if possible share some areas within those towns that are invest worthy. 

Thanks again.

[Darren Budahn]

Well, multi family homes selling for $4,000 are mainly going to be city tax foreclosures where the properties have been abandoned for years in some cases and they are all going to be in D areas.  There is no incentive to rehab these places as they are never going to be worth the amount of money you put into them because of the neighborhood they are in.   

With that said, you can find occupied 4 families in Milwaukee in the $60k to $100k range in C to C- class areas that will bring in $1,600 to $2,200 roughly.  But, I personally would not invest in these properties unless I did it myself or had some boots on the ground that you really trusted.  The neighborhoods change block to block in some cases. 

Madison is a completely different animal.  I've never invested there.  There are no D class areas in Madison.  Prices will certainly be higher in general though and it is not very landlord friendly.