Milwaukee duplex rentals

[Michael Gibbons]

I’m posting to see if anyone has had success recently buying and renting out duplexes in Milwaukee and what neighborhoods are best and what rents are for a 2 or 3 bed, 1 bath per unit. I’m seeing around $3,100-3,800/month in costs and am trying to figure out if there’s any way to make money with these current rates. I have experience with STRs in Florida but am looking for a less exciting, less stressful idea and am located an hour from Milwaukee.  Any feedback from Milwaukee investors is appreciated!

[Marcus Auerbach]

Buying has gotten tough, also in Milwaukee, or maybe I should say especially in Milwaukee, which is one of the most competitve markets in the US at the moment (who would have thought..) - I talk about this on my YouTube channel a lot.

You basically have two choices, buying rougher properties in rougher areas, ich which case chash flow looks great (on paper). Or buying nicer properties in nicer areas, in that case cash flow is break even at best.

Personally we follow the second approach and we don't even rehab anymore. The reason is that we have such a tight market, that even very dated properties sell close to full price and do not get enought discount to pay for the updates. My last few BRRRs ended up with negative equity, meaning my total cost of acquisition plus rehab exceeded the appraisal. I am still okay with it, because everything is new and the houses won't need much capex in the next 30 years. However, at this point it seems easier to avoid a $60k rehab and several months of work and just let the  appreciation do it's thing.

I don't know how you came up with $3,100 to $3,800. Outside of PITI you have to pay for water and sewer, utilities are typically split and most owners make the tenants mow the lawn. Rents range anywhere from $1200 to $1700 per unit, in some cases higher - but that means great location and fully updated interior/exterior. Most of our investor clients opt for the middle price segement, about 250-300k, but you can make a good case for the upper segement as well 350k-400k if you have the capital, as this means more revenue for the same amount of work.