All Forum Posts by: Robert Taylor

If I ever did spend several minutes of my usually way too short time reading ANY of this genre of "Top whatever # of cities (or states, countries, etc) that are good/bad/declining/rising" that often pop up, I wouldn't admit that I'd foolishly wasted my time like that! They're simply various stats, metrics or whatever you'd like to call them, plugged into whatever rudimentary algorithm the author and whoever else is helping on this latest piece of garbage writing thinks makes some sense and this is what it spits out for results. 

If the author had help, no doubt there were probably countless arguments over the design of the algorithm "hey you've got this all wrong where you count the number of "adult bookstores" per capita as a positive, cities with lots of them are dumps!" "No way you idiot, if there's a lot of adult bookstores, then that's very good news because that means people have so much extra money, they even pay for porn when you can get it free 24/7 at 34 million websites, you're a moron!!"

Also, this brings up one of my minor pet peeves, which is that due to some major cities having wide boundaries while others are very small, so anyone going by CITY POPULATION instead of METRO AREA POPULATION would have to then think that San Francisco (meaning the city itself) is not a whole lot bigger than Milwaukee is. If you fly over the massive Bay Area followed by a Milwaukee area flyover, you'd see that Milwaukee is a fairly good sized city, but just a fraction of the size of the Bay Area!

I've been to a landlord bootcamp run by Atty Tristan Pettit, who my usual, all purpose attorney AND another attorney I know who also practices general business related law both said is definitely the best LANDLORD'S attorney in town and the guy to call if you're in any sort of serious landlord/tenant dispute or any serious case related to being a landlord where the stakes are high enough to make darn sure you've got the best possible representation due to what you could lose if things go the wrong way! He's also an all around real estate attorney and I believe is the guy who drafts the docs that the WI Legal Blank Co sell that many in WI use for their leases, etc so I'd sure think he's well qualified for your need and even if someone who knows pretty well what to do is say $100 cheaper, I'd pay the extra $100 for Atty Petit in a heartbeat and get papers I know darn well should cover my a** in ALL situations!

http://petriestocking.com/blog/landlord-tenant

Here's a link to his EXCELLENT landlord blog too and he's good about answering emails, so I'm sure if you email him he'll let you know if he is qualified to help and if not, my ipression having talked with him multiple times is that then he'd refer you to whoever you should call and not just take the biz he's not well versed in, he strikes me as a very honest and principled man. Hope that helps!

http://petriestocking.com/blog/landlord-tenant

Ok, I gotcha on that then if you're just referring to those grades as far as rentals go, in that cse I'd certainly place some of the nicer parts of Tosa as reaching into an "A" grade. As far as corned beef goes, of course there's always Jake's on North Ave too, although having lived on the east side for years I'd usually go to Benji's in Shorewood and now that I moved north a ways, Benji's new location on Port Rd in that little shopping area with the Best Buy etc is less than 5 min away and is now my new corned beef stop. (As you probably have guessed, I LOVE corned beef!) I have one more though too, the House of Corned Beef on around 60th and Silver Spring is darn good too! Although last time I stopped there, I think they morphed into a House of Corned Beef/some pizza place too if I remember correctly, but its on the north side of of Silver Spring around 60th, next to Popeye's. Maybe BP needs to start a new "corned beef forum" for all of this though!

@Darren Budahn

@Nate Culkin I should definitely say that I like your line of thinking assuming that what you're thinking is to try to work both the cash flow angle as well as potential for future appreciation there, but I'm not very bullish on that neighborhood, which I know fairly well. There's a Wendy's just to the east, must be about 46th or 47th and North Ave and north of there things get sketchy pretty quickly. You're right in there where as others like Dave Carpenter mentioned, going not far at all in certain directions gets you into some areas that crime statistic wise at least, are very rough. One you start getting into predicting some of what the future may hold, a lot of factors beyond anything just realty related become involved as well. As I said before too, I'd REALLY REALLY emphasize that you and if you have any partners, that you check with the city of MKE as far as the work you mention this place needs and try to nail them down as to what they're going to require as far as fixing whatever in the place because one example I can give you is one home I'm soon to put on the market where it came (as an REO) with a 4 fuse fuse box and the ancient knob and tube wiring inside and while these days you really can't get ins coverage on anything with fuses, so they've been updated to breakers, you do still have a lot of knob and tube wiring around here as we have a fair amount of housing stock that's very old.

Well, basically the city wants that knob and tube replaced with romex and for my rehab of a 2000 sq ft 1905 home on the east side of MKE, where the values are the highest in the city for sgl fam's it was certainly not a small expense, but worth it considering that it cost maybe $2500 to $3k to totally rewire the place, which included adding outlets to the 4 bedrooms, which had ONE outlet in each when I bought it, so that's a great selling point and $3k on a $275k house isn't much, percentage wise. Conversely, if that 32 unit building needs rewiring or anything else along those lines which wouldn't surprise me since a lot of the owners that caused the city to be so leery of the suck the $$ out, never put the $$ in landlords would cut off a couple fingers of they had to, to avoid updates like that. Point is that unless this place has been totally run through an A1 rehab, you might end up getting shoved right into some MAJOR repairs, MAJOR $$$$ repairs! 

 @Nate Culkin I'm leery of that one AND you could be very well opening a MASSIVE can of worms since the codes are different once you go over first 2 units but especially 4 units, you could end up getting whacked with the city mandating repairs or upgrades that end up coming with a monstrous price tag. The city building inspectors have been fine to work with in my experience BUT as I mentioned in an earlier posting, if anyone ticks off or gets in bad with the city of Milwaukee, they have no qualms at all dropping their hammer on them and can and sometimes will wreck financial havoc on people and they're especially worried about absentee landlords (which I totally understand since we've had a lot of clowns who chase down their rent $$ like bloodhounds, but somehow when it comes time for major $$ repairs, they are harder to find than DB Cooper! Yes, Tosa starts at 60th St in that area and some parts of Tosa are great, but do some searching like on the jsonline.com site (our crappy local daily paper) or there's at least two small Tosa based mini-papers and you'll see a LOT of articles about the many issues people living just west of 60th in Tosa and being strong arm robbed, or armed robberies in their driveways, back yards, etc. I personally have TWO friends who over the last ten years bought in that area and sold and left within 2 or 3 years due to the numerous car break ins, garage break ins and one had his home burglarized. He finally left after getting into a brawl with 3 teen thugs who were strong arm robbing his elderly neighbor in the neighbor man's driveway-in broad daylight! Luckily this guy is a pretty physically intimidating dude who can handle himself very well and after tussling with him for couple of minutes, the kids ran off seeing my buddy wasn't going down at all and might take them down instead, or at least hold em till the cops soon arrived. 

That's another difference in city of MKE, unless there's gunshots or its a ridiculously slow crime day, don't expect a quick response for a small fist fight or anything else. I have all of the respect in the worlf for the MPD street cops (most are cool or at least decent guys too) but we're way understaffed and our mayor, who I used think was a decent guy even if I don't agree with him on a whole lot is out to lunch, like on a permanent basis! That doesn't mean there aren't areas of opportunity though, I'd highly suggest looking up the Walkers Point area and areas around there, where you're between the 3rd ward, where had any of us speculated on some of the then mostly vacant 10 story warehouses in time for the condo boom of the late 90's and 2000's, we'd be well on our way to the Forbes 400! South of the Walker's Point area is Bay View, which has become another totally booming area and now many of the longtime residents or new residents who want to live in a cool area for cheap are raising hell about any new development, so that area in the middle just might be the perfect next spot to fill in and its close to downtown, where for the CITY of Milwaukee at least, many of the higher paying jobs are located, so its a great commute for residents who work downtown. 

@Darren Budahn is right about Mc Bob's though, great corned beef, although you can also get that at Benji's deli in Shorewood and Fox Point, where I'm often camped out, slobbing down a 1/2 lb Benji corned beef sandwich. One last thing, as I've said before I don't do those ABCD grades myself, but even in the best parts of Tosa like the Highlands, if that's an "A", then what are places like River Hills, Chenequa, Elm Grove or especially Indian Hills in Elm Grove where they've got teardowns selling for $700k and being replaced by 12,000, 15,000 or even a 20,000 sq foot home?? Is that an A++++++ or?? I guess I'd put Tosa as a B in most parts, maybe B+ for the Highlands, but also come C's too. Not trying to start an argument at all, just curious?

Not knowing who your HVAC person or firm is up here, I'd be very curious as to IF the city of Milwaukee DNS (Dept of Neighborhood Services-where all of the inspectors, city planners, etc work) or even the state of WI in any capacity has any other suggestions OR if there's any outside chance that when someone mentions "yeah, we're going to replace the current central heating system (which I'd sure as heck assume must be gas or MIGHT be still heating oil if it was never retrofitted or replaced since way back when) with electric baseboard heat" if they're going to suddenly have steam pouring out of their ears or some other cartoon character type reaction, because as I'm sure everyone knows, it gets damn cold up here every winter (especially compared to Cape Coral where it is warm enough to have all of those canals all over) 

Not only is electric heat WAY more expensive than gas heat now, IF the new EPA regs that are blatantly designed to make life hell and skyrocket bills for states heavily reliant on coal for generating electricity (like here in WI!) go into effect as proposed, those tenants are going to be getting some MASSIVE heat bills and as I think someone did mention, we also have what sure sounded like a nice, do gooder type program here where they by law cannot shut off your gas and electric during the winter till Apr 15th for nonpayment of your bill.

That sounded great and yes, it would make is all look and feel like a bunch of heartless bastards to shut off heat during the winter, problem is though that for whatever reason a fair amount of people then run their heat literally at 80, 82, 85 degrees all winter long AND have a few windows open or even my personal favorite I've seen a million times, its -8 degrees and some goof has their main front exterior door OPEN with just the flimsy glass storm door shut to block the cold. So, every April 15th the do gooder social service agencies like one where a friend works are totally flooded with clowns and their massive bills, $2500, $3k, $4k or more-FOR LIKE FOUR OR FIVE MOTHS MAX! 

So, this is a big behind the scenes issue here already and I just would make darn sure no one from any govt agency with veto power (or just other powers to use to make a damn clear its a BAD idea) is going to flip out on that electric baseboard heat idea, especially since electric heat up here in WI is about as common as a Brontosaurus!

I think  @Nathan Schoenborn nails it when he mentions about showing his face, being a pro-active landlord, etc and that plays into both what the tenants think, the neighbors AND the various inspectors, etc from the city all will soon surmise as to who the new landlord is for whichever house on the block is. 

One thing that bothers me on a whole different level is when people from outside of these areas make comments basically saying the entire area is a cesspool of drugs, violence, etc since the truth of the matter is even in the "roughest" part of town, there's still a MAJORITY of people who are not criminals whatsoever and many people who choose to live there because its home to them and not just "all they can afford". 

If you are the pro-active landlord, you'll meet the many more good people in these areas and often, they'll clue you in to some good tenants (still requiring a full screening process both for doing the right screening and for legal reasons, you really need to screen people equally no matter what) and the city will see that you're not another replay of what they've seen too much of, the out of area (could be just living 5 miles away or 2000 miles!) landlord who wants to suck every cent out and stick as few back in as possible. Even if you live in CA, it is possible to be the "great landlord" with the right PM, but then you better be darn sure you have the right PM!

That's also why I've recently decided to avoid using terms like "war zone", etc too, I think it stigmatizes the entire area and makes us as landlords look like we're over-generalizing in a very negative way and is an insult to the majority of good people who live in these areas, some of whom I've met over the years. Just as I can sound very negative about the possible dire consequences for anyone thinking they've just found a magic cash machine by buying in the lowest priced areas here in MKE, I think the flip side of that is that a landlord who gets a great rep with both the residents AND the city as a decent landlord could have all sorts of great opportunities fall into their laps over and over again!

For some people, heck yeah Waukesha, either the city of Waukesha or anywhere in Waukesha county might as well be Greenland as far as they're concerned, while for others I'd say not as much to not at all. Again, I DO NOT want to convey the idea that I'm saying one wrong step or even half wrong step and they'll make your life hell forever, not at all and I honestly can see exactly where they're coming from, they've had many slumlords come in over the decades and for any inspector, or anyone dealing at all with neighbor's complaints. For some over here, even their personal politics are a huge barrier, I've heard it myself MANY times last few years when I'd mention I grew up in Waukesha Cty, but have lived in MKE Cty for most of last 20+ years. (although city of Waukesha is the one (and really only) spot in that county that's pretty even that way, but some people are still foaming at the mouth 24/7, while guy in next cubicle couldn't care less! I think even living in a much more well off part of the city of MKE is out of town to many too! 

Also they'll have the MPD coming over yet again saying "Hey 2264 N 43 Pl is a hell hole, he's got dealers in both units, cars parked all over the lawn, blah blah blah" that ticks them off to no end, especially if it was a recent purchase from previous landlord who watched the place like a hawk, heck yeah if I had their job I'd want to send that landlord back to wherever and hopefully with a (figurative!) black eye as well, so if he gets any more bright ideas for MKE RE gold mines, he thinks twice and stays away!

I totally understand WHY many are like this, we have some spots that numbers wise, are as violent as ANY other city in the US of any size and they see their role here as #1 overall priority is keeping ALL slumlords or even just cheapskate landlords who are cheap as hell yet sure as hell better get their rent dammit, OUT of there or else so scared that they straighten up! Plus, even though residency for city workers was abolished by state legislature a year or two back, I think its still tied up in court since MKE sued and almost certainly will eventually lose from everything I've heard, but for now residency is still 100% in effect, so these workers are protecting THEIR CITY!

Get in good with several and show them you're a good or even great guy, which doesn't take ridiculously deep pockets, but in my opinion sure as heck takes more than 5 g's ! You've got a good job though, save up and you'll be golden real soon!!!

I'd just step cautiously and give same advice especially to anyone from outside WI, be careful as heck,

Well @Mark Shaffar when you mention if whether or not Milwaukee is really "that bad" or not (and this is the CITY of Milwaukee I'm referring to, NOT anywhere in the entire metro of nearly 2 mil people and maybe 30 or 40 cities and villages, etc but the CITY is only place where you'll find many or maybe 75 to 90% of these "incredible buys with awesome rents" I keep seeing people from mainly the coasts getting all hot and bothered over!) but I've been around this market first as simple of a landlord as you'll find, buying the duplex I was renting in in 1999, then jumping in on someone else's coattails who taught me a LOT (and someone HUGE here-or WAS huge!) and while I've had an up and down number of rentals I'm holding (right now just one single fam) 

I've settled in on high end rehab/flips since I have the good fortune through no work of my own to have access to a nice pile of avail cash to buy them and after running into some issues after taking on several that aren't too high end ($200k to $280k fixed up prices) that will likely now net me a little bit at most or maybe even lose a bit, I'm sticking back with my bread n butter, high end, screw the rest too much hassle for too little even half "guaranteed" net profits. Main focus now is one that had to sit for the 4 months due to IRS lien, but its 4000+ sq ft castle in one the most A+ prime burbs here on 2.5 acres, so I had to slum it here for a bit and I'll post pics when it lists in I'd say early August for probably $1.3 to $1.4M, barring some massive crash or doomsday between now and then. 

I'll be curious to see how some of these out of town people as well as any in the metro area do, since several people's #'s I've seen sound like a recipe for disaster to me, since once you piss off the city of MKE and they brand you as another bloodsucker (whether relly true or not!) who's going to be another big net negative for MKE, they'll smash anyone like a bug in your kitchen, trust me I've watched it unfold at least 6 or 7 times now and a few were HUGE here, including the guy who taught me the ropes and who basically dominated the local auctions here, he had hundreds and hundreds of mainly single fams and duplexes all rehabbed and rented out, not dumps and he's now wiped out, rebuilding from nothing or trying to.

Another one who got BIG and then was wiped out by the city publicly targeting him with the mayor (still the mayor now) going on tv and saying he was the #1 slumlord, a criminal, etc (he wasn't perfect but sure as hell didn't deserve THAT!) and saw him go from an incredible totally self made success story who in maybe 10 years, went from early 20's and trying to rub two nickles together to his newly built mansion on Lake Michigan, just down the road from my flip now, brand new Ferrari 430 spider in front of it, plus more nice cars in garage, etc and he said he was lucky as hell to have set up an IRA with a few hundred grand in it they can't get, other than that he had the clothes on his back when they were done there!

I'd just say be careful as heck and don't get over extended money or time wise, since either one can make anyone look like a slumlord and once that happens, you're already circling the drain! When I'd see people talking about buying some duplex for $30k, $40k, etc and then setting their "rehab/repair" budget at say $10k or $15k, I'd think "wow, better hope NOTHING goes wrong" which is unlikely as hell in a beat down, 100 year rental property. Even J Scott, who had great success in ATL before on flips and his website shows the VERY well run, tightly managed operation to shoot for and who several people I'd deem totally credible said did top quality rehabs here had his issues with ridiculously picky buyers, even if rentals are somewhat different you're still rehabbing or at least keeping in decent shape and having too low of a budget or just biting off more than you can handle is a recipe that I've seen first hand wipe many out here! That said, I still know more who've done fine, but they live here!

Steven, I know a few people who have made great, even close to ridiculous money-99% cash flow, little shot at a lot of appreciation-on the north side of MKE and I know a few seasoned, experienced landlords with fairly deep to deep pockets from other areas, who lost a lot there before finally selling for what they could get quick out of whatever they had and then split back to where they'd made their original money. Now, its what some call a "war zone" but I don't like too much to simply plaster that label all over the place, even if its "high crime" according to even our local paper's "crime map", "murder map" etc because what's interesting is you will find some blocks that live up (or really down) to those terms, dudes hanging out all over, checking me out to see if I'm there to buy "something" from them, etc but then you'll find other blocks that will have many well cared for homes on that block or blocks and as it turns out, many long term owner/occs or long term renters and you just have to go and scope it out to see each area. 

I never found a cohesive secret to finding great tenants there, other than "older people" was maybe the closest, BUT it sounds like you have a good or great IT job going, while I applaud your wanting to jump out on your own, be your own boss, etc and say to keep thinking that way, I'd HIGHLY recommend saving up a lot more $$$ reserves first, unless maybe as @William Hochstedler mentioned above, your the 1 in a 1000 superman, but that's hard for anyone to predict for themselves. 

Also, one thing I've warned out of towners about buying here when I hear these people raving over our low entry prices and what looks like GREAT cash flow (assuming you get paid your rent) is to figure the city of MKE into your plans BIG TIME and that's double the reason why I'd say to get a much larger reserve, unless you find some new line of credit to tap that's at a LOW % rate, because the city inspectors are usually just fine to work with, BUT the city govt has a big beef with anyone coming here who thinks (and NOT meaning you here!) they can buy in cheap as hell, collect their rents, but do the bare minimum or even be halfway cheap on upkeep and sure as heck tenant safety issues, basically sucking the life and money out of an area that needs some help and contrary to the opinions of many who spend zero time there, is NOT just an orgy of drugs, crime, violence, etc but has a majority of decent people there who likely grew up there, its home to them and even for many who could afford a "better" (ie pricier) area, its still home. 

I'd hate to see someone with good intentions like yourself, who is forced to scrimp on something or things due to flat out lack of funds then be labeled a slumlord, since the city has a MASSIVE hammer to whack the heck out of anyone they think of that way, as code just for exterior is basically a like new structure, down to the paint not chipping etc and they can rack up 20, 30+ code violations instantly and then take that "slumlord" to court, get a civil judgement so you can't even just walk away then, it will hurt or ruin chances for any other mortgage, they don't want that happening and I've seen it happen to people who most of the time, did deserve it. $5k won't even cover a cosmetic rehab and the city also hammered the biggest mega banks on REO homes they let slide, forcing them to hire crews I knew to spend $15k, $20k or more JUST ON EXTERIOR WORK, insides still trashed in areas where nothing sells above $50k or $60k, using same tactics. They were going to get the civil judgements and then go after the banks ability to operate in WI eventually, but it of course never got that far and Citi, BOA, etc gladly spent hundreds of thousands, maybe millions on homes that are likely still vacant, just with new paint, fixed porches, windows, etc!

Build that reserve, keep the spirit and then jump in there, its worked well for many!

Well, good to hear you got a GPS, a big printer and whatever out FROM him and not the other way around Natalie, I was taken aback a bit by the "2 or 3 houses a day" part, unless he has a bunch of staff under him or somehow lined up the miracle home run property manager(s) and/or best contractors to handle every last detail, that would be quite the ridiculously fast growing empire to manage, heck just to close all of those sales you'd be spending the majority of each day at closings! (although you mentioned buying at court auction, which I do myself and still requires nearly as much work to get the deed) 

Good luck on everything though and glad to hear it didn't end up costing you, keep plugging away and you'll get there! I'm still learning lessons too after 10+ years!