Milwaukee market questions for OOS investor
Rental Property Investor · Los Angeles, CA · Member since 2019 · 78 posts · 40 votes
Hi,
Looking for feedback from local Milwaukee investors.
I currently reside in CA but am interested in exploring the MKE market as I have family there and a property manager I might be able to add to my team. Seeking a small multi family that will require low-moderate rehab and cash flow nicely.
After briefly researching online it appears to be a favorable market with decent population growth / ave cap rate.
Questions I have:
- Top emerging neighborhoods around the area?
- Best cash flowing areas?
- Indicators of industry/job growth?
- For those with rental properties: are you increasing rents each year? If so, what %?
- Any areas to avoid? Anything to watch out for?
Thanks in advance!
@Daniel Whitmore When you say small multi-family, could you add a little more color to that? Duplex, 4-unit, 8-unit? Everyone's small is a bit different and based on that answer, it will likely push you to different neighborhoods in town.
Popular neighborhoods we are seeing right now: Washington Heights, Nash Park, Grasslyn Manor, Sunset Heights, Capitol Heights, Story Hill, Silver City, Johnson's Woods and the City of West Allis.
Best cash flowing areas will end up with me on a soapbox that nobody has time to read... let's just say that cheaper isn't better, and rent ratio's aren't due diligence.
For Milwaukee standards, we have some pretty cool stuff going on right now on the job & development scene. Northwestern mutual built the first skyscraper in quite some time downtown, BMO harris is building another tower, Michels corp is building a new HQ, Kumatsu is starting a riverwalk site, apartments have been raising up as fast as contractors can build them to keep up with the demand. I was convinced 2 years ago we were massively over building, I seem to have been inaccurate there.
Rents aren't going up like they were a few years back, but still a steady 2-4% upon renewal. You generally see a $25-$50 / month jump after a turn.
Areas to avoid? Sure, just like any major city there are plenty of properties and locations you should stay away from as an OOSI. It starts with, do you want to be a real estate investor or do you want to invest in real estate? If you want to be hands-on, build a team, use employees instead of vendors, scale something big and have a sizeable tolerance for risk you can be a bit more aggressive with the location. If you are looking for a completely passive venture, I'd suggest more modest choices.
Best of luck!
Hi,
Looking for feedback from local Milwaukee investors.
I currently reside in CA but am interested in exploring the MKE market as I have family there and a property manager I might be able to add to my team. Seeking a small multi family that will require low-moderate rehab and cash flow nicely.
After briefly researching online it appears to be a favorable market with decent population growth / ave cap rate.
Questions I have:
- Top emerging neighborhoods around the area? A. Harambe neighborhood comes to mind or maybe south Milwaukee but In terms of cost per property the city Milwaukee really does not have any emerging neighborhood.
- Best cash flowing areas?
- Indicators of industry/job growth?
- For those with rental properties: are you increasing rents each year? If so, what %?
- Any areas to avoid? Anything to watch out for? A. Avoid low income porperties or high crime area you need to manage them yourself to be successful
Thanks in advance!
I have about 30 properties there. i have a presence from Lake county Il to MIlwuakee. Macro trend there is one of the best around. I focus on workforce single family houses. There are some touph areas that I stay away from. Mult family is hard to find. I have a small team working the area from kenosha to Miwuakee. you can reach out to me if you want to talk more
If you are looking for class A properties, the third ward area is very nice. You can see better cashflow in the "Concordia" area, which is a solid C class area. Tough to come by the larger multifamily deals. Feel free to reach out for more info. I also work with a great PM company if you need one.
Hi,
Looking for feedback from local Milwaukee investors.
I currently reside in CA but am interested in exploring the MKE market as I have family there and a property manager I might be able to add to my team. Seeking a small multi family that will require low-moderate rehab and cash flow nicely.
After briefly researching online it appears to be a favorable market with decent population growth / ave cap rate.
Questions I have:
- Top emerging neighborhoods around the area?
- Best cash flowing areas?
- Indicators of industry/job growth?
- For those with rental properties: are you increasing rents each year? If so, what %?
- Any areas to avoid? Anything to watch out for?
Thanks in advance!
The 53122 ZIP code includes 2,292 households, and 75 percent of them earn at least $75,000 a year. Nearly 30 percent make in excess of $200,000. That is the biggest upside for income that you will find anywhere in Wisconsin. Just an FYI more than anything.
Check out the property taxes. I believe the property tax rate is higher there than in California. Especially in the Milwaukee area.
@Karen Lee
I can’t believe that. My duplex is assessed at $210k and property taxes are $4700/yr. I would be shocked if that was higher than California.
California property taxes are a best kept secret. Due to Prop 13, they are "set" at 1% of purchase and cannot be increased by more than 2% per year. They have figured out ways to include other "fees" and sort of cheat the original proposition, but my residence taxes (and whatever silly "fees" they throw in now) are still at less than 1% of home market value. And my assessment was hiked a lot this past year. Even Warren Buffet has said Ca. property taxes are "too low." Prop 13 is constantly under threat. But this helps carrying costs in CA to be surprisingly lower than what you may expect. In fact this helps explain why many of our other taxes are "high". It is to offset property taxes being low.
@Daniel Whitmore When you say small multi-family, could you add a little more color to that? Duplex, 4-unit, 8-unit? Everyone's small is a bit different and based on that answer, it will likely push you to different neighborhoods in town.
Popular neighborhoods we are seeing right now: Washington Heights, Nash Park, Grasslyn Manor, Sunset Heights, Capitol Heights, Story Hill, Silver City, Johnson's Woods and the City of West Allis.
Best cash flowing areas will end up with me on a soapbox that nobody has time to read... let's just say that cheaper isn't better, and rent ratio's aren't due diligence.
For Milwaukee standards, we have some pretty cool stuff going on right now on the job & development scene. Northwestern mutual built the first skyscraper in quite some time downtown, BMO harris is building another tower, Michels corp is building a new HQ, Kumatsu is starting a riverwalk site, apartments have been raising up as fast as contractors can build them to keep up with the demand. I was convinced 2 years ago we were massively over building, I seem to have been inaccurate there.
Rents aren't going up like they were a few years back, but still a steady 2-4% upon renewal. You generally see a $25-$50 / month jump after a turn.
Areas to avoid? Sure, just like any major city there are plenty of properties and locations you should stay away from as an OOSI. It starts with, do you want to be a real estate investor or do you want to invest in real estate? If you want to be hands-on, build a team, use employees instead of vendors, scale something big and have a sizeable tolerance for risk you can be a bit more aggressive with the location. If you are looking for a completely passive venture, I'd suggest more modest choices.
Best of luck!