Milwaukee Wisconsin property classes. A,B,C,D.

[Tyler Wenzel]

Hey all! I am new to the Milwaukee area and real estate investing in general.  I've been living in Bayview for about 3 weeks now.  I'd love to hear opinions on what the different "zones" for property classes.  Is there any type of current "map" or list somebody has made dividing the county into different classes?

I am looking to owner occupy a small multifamily in the very near future and am contemplating a B-class property vs. a C-class property.  I understand cash flow would be typically higher on the C-class but I also would love to have minimal tenant issues with my first property.  Milwaukee is a big area and I'd like to know where I should be driving to check out the area.

Also, if anyone knows of any good meet-ups in the near future, I'd like to get together and talk real estate.

I look forward to reading the responses!

[Marcus Auerbach]

@Tyler Wenzel everyone's definition is a bit different. Technically you take the entire city's price range ($0 - $1,000,000+) and divide it in 4 segments. This would make parts of Whitefish Bay class A (750k+), parts of Shorewood class B (500-750), Wauwatosa C (250-500) and anything else in Milwaukee class D (under 250).

Investors and PM's tend to rate on a different scale, something like: Tosa class A, West Allis B and a lot of other neighborhoods C, and only the really rough parts class D. That does make sense to me, but it's technically incorrect.

And of course you have investors who tell themselves that they own C class properties for under 100k, because there are still the 20k neighborhoods they would call class D. 

My observation with our duplex market is that cashflow is actually relatively similar across the different markets, because for the most part higher rents make up for higher PITI. In a market like the North Shore or even Tosa to some extend the level of finishes drive rents: while the going rate may be $1,500 for a 1,200sf unit in nice condition, you will find tenants that are happy to pay $1,800 and more for "stunning", which means new kitchens, baths (plural), lighting, flooring, windows etc

What changes is you cash on cash return, because you need more down payment for about the same cash flow. On the other hand, you are playing with bigger chips now, so equity, principal pay down etc - all bigger numbers.

If you are house hacking I would suggest something like West Allis or equivalent as entry level, maybe Washington Heights, but Tosa works really well and also Shorewood on the top end.