Cash flowing rentals in Wisconsin

[Aaron Noltemeyer]

I’m starting the process of investing in real estate. We are looking into small multi or single family home for buy and hold. We want to own locally in SW Wisconsin but prices are really high. What are ways folks are finding cash flowing rental desks in this area?

[Marcus Auerbach]

You find deals where you look. Believe it or not but I have bought most of my personal deals from the MLS, including my latest accepted offer last week. You will can also focus on off market deals, especially in the lower price points, which are not profitable to list on MLS.

Prices in the Milwaukee area are going up very quickly, about 1% per month at the moment. We simply have more people than houses; milleniials are now the #1 home buyers and have caught the industry by surprise. We are short in supply, have not built enough new construction over the last 12 years, now we are stuck between a rock and a hard place and will most likely stay on this path of increasing prices until something chnages, either on the supply or the demand side. And right now I can't see anything that would be able to do that. If you want to see the details check out my monthly market update on YouTube, you can find the link on my BP profile page.

Price is always relative. In terms of affordabilty real estate has never been this affordable in the last 20 years, except of 2009-2011. The combination of higher wages and lower rates makes homes very afforable right now, much more so than in 2000 to 2009 for example! On average a household spends only 15% on housing, so from that point home prices could double and would still be affordable.

Milwaukee is particularly good, check out Kiplingers article on that: we are only #61 in home prices (top 100 most expensive metro areas) - Madison is #31. But we have an affordability index of 3 (1 is most affordable, 10 is least) - combination of income and home prices. This is one of the best ratios in the country! 

So, yes prices are higher now then they were, but I believe they will be even higher in years to come!