All Forum Posts by: Michael Kretch

Hi Dean,

I have several rental properties in Racine and rehabbing my first in Kenosha as well.

I'm located in Chicago but primarily invest in Kenosha and Racine.

@Marcus Auerbach I agree.  Removing Foxconn from the equation doesn't completely reverse the trajectory of the area and if it does come to fruition, should be a major tailwind.  There would likely be a price drop in intermediate term if project fell through.  Separately, got a house under contract in a solid neighborhood of Kenosha this week, continuing to invest in the area.

@EJ Hyman I was told by Chase they wouldn't open a business account for a Series LLC about a year back, only a regular LLC. Wound up opening business checking with US Bank, there are a handful of banks that will work with the Series LLCs. Possible their policies have changed in past year. As an aside, haven't created a Series yet and not sure that I will.

@Sam Shueh There are a number of economic tailwinds in SE Wisconsin that have contributed to the recent rise in prices so I don't think the area is solely reliant on Foxconn to continue to grow.  I do agree though, there are a number of uncertainties with the Foxconn plans and development being completed so there is a distinct element of speculation.  Also, just being in close proximity to the planned site may not necessarily mean a property should hold longer term value, I think an investor has to consider where the potential workforce actually wants to live.

@Jay Hinrichs Would you happen to have a link to your talk at Google?  Their fairly recent Chicago HQ is a beautiful building and a big reason Fulton Market went from red-hot to white-hot...certainly wouldn't mind working there.

If you do visit Racine/Kenosha area, obviously would love to hear your insights. There is a public use regional airport about a mile from the 4 unit building I'm closing on today, if you fly yourself ;)  Really do think there had already been a lot of opportunity in the area and Foxconn multiplies it's potential, both residential and commercial.  

@John Franczyk Great to hear from someone seeing the project in motion day to day.  Residential prices have definitely shot up after already being on an upward trajectory with the lower inventory in both counties.  Anecdotally, seems like 20-30% across the board is pretty common past 6-9 months.  Looking at a couple properties in Kenosha before closing in Caledonia today, I agree there is still good value out there but much harder to find than even last fall.  Encouraged by the steady redevelopment of both city's downtowns and new construction heading West.

@Jay Hinrichs Yes, I'm sure there will be further demand for logistics and warehousing in the area.  However, I had to google what tilt-up construction is, so I'd be learning a lot with an undertaking of that size to say the least.  The distribution centers recently built by Amazon and U-Line on the I-94 corridor are gigantic.

@Bob Floss II I agree, one of the intermediate-term tailwinds of SE WI is the migration of some IL residents to lower tax areas, NW Indiana has also added residents from this trend.  Kenosha and Racine property taxes are still fairly high compared to the rest of the country though, something to watch for when looking at rental properties.  

Pleasant Prairie is definitely in high demand, as well as much of Kenosha and Racine...and you can see it in the property values.  Have also spoken with several contractors swamped with work.  Haven't bought anything in Pleasant Prairie yet but continuing to write offers nearby.

@Jeff Burdick True, I think IL will also be a beneficiary.  Although I wonder if we would have been able to provide such subsidies given our fiscal situation.  A lot a of nice areas in Northeastern IL that make for a convenient commute to Racine.

@Jay Hinrichs Yes, the trick now seems to be determining where the ripple effect of the planned plant heads next since adjacent land to the site is certainly not going for farmer prices any longer.  

Thanks for the input!

Last year news was announced that Foxconn plans to build a large plant in Racine County, WI. My initial thought was that housing prices and rents should continue to rise nearby to accommodate the future workforce and current demand, so rental property could be a good investment approach. However, maybe I'm not thinking deeply enough.

What other ways could investors approach a development of this size? Will the main beneficiaries be close by Kenosha and Racine or will the true beneficiaries be nearby Chicago and Milwaukee?

Instead of residential real estate, would a savvy investor look to commercial property, self-storage, land development, all of the above in this situation?

I'm bullish on Southeastern Wisconsin and the I-94 corridor. I had been researching Kenosha and Racine before the Foxconn news was announced and made my first purchase in the area about 6 months ago. So far I've bought 2 single-family rentals and am set to close on my first 4-unit building next week. My initial goal is to purchase $1M in B-C+ class cash flowing rentals in the region.

It would be great to hear your thoughts and ideas BP!

@Mike Barry Currently I have a PAL through Schwab which is backed by a brokerage account, I think a few other institutions offer them as well.  Interest is LIBOR + a rate spread.  So far the product has been great, I find it to be very flexible and have used it for a couple properties.  I'm still not sure how an underwriter would view the line, guessing a lot like any other line of credit.