Milwaukee duplex Purchase

Investor · Milwaukee, WI · Member since 2023 · 7 posts · 4 votes

Hello, I'm in the process purchasing my third 2 unit property here in Milwaukee WI. I just wanted some feedback on the numbers on this property. It's located in the Riverwest Neighborhood it's an upper/lower 3-1 bath per unit layout. Purchase price is 210k ( plus a 6500 credit from the seller) rents I'm seeing in the area realistically are 1450-1650 per unit. The appraisal came back at 255k on this building. Initial work that needs to be completed is approximately 15-20k. Just looking for some feedback on the deal given the current nature of the market. I appreciate any input!! Thank you.

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Marcus Auerbach

Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes

Financially a no-brainer, just make sure you understand your capex on a 1900 built duplex and make sure you screen well. Holton is the deviding line between the better and the not so great area

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Jaycee GreenePro Member
Real Estate Consultant · St. Louis MSA · Member since 2024 · 3k+ posts · 728 votes
1y
Quote from @Darius Bates:

Hello, I'm in the process purchasing my third 2 unit property here in Milwaukee WI. I just wanted some feedback on the numbers on this property. It's located in the Riverwest Neighborhood it's an upper/lower 3-1 bath per unit layout. Purchase price is 210k ( plus a 6500 credit from the seller) rents I'm seeing in the area realistically are 1450-1650 per unit. The appraisal came back at 255k on this building. Initial work that needs to be completed is approximately 15-20k. Just looking for some feedback on the deal given the current nature of the market. I appreciate any input!! Thank you.

Hey @Darius Bates, welcome to the BP Forum! Is the property north or south of Locust? Are you going the Section 8 route?
[email protected]
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Darius Bates
OP
Investor · Milwaukee, WI · Member since 2023 · 7 posts · 4 votes
1y
Hello it's south of Locust near North Ave. I apologize some additional information my monthly payment including PITI is estimated to be 1850 a month. I have a 125$ property management fee. Onsite coin op washers and driers to offset quarterly water bill.
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Michael SmytheBusiness Member
Real Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
1y
So rents will be $1500 x 2 = $3000 and PIT only $1850?
As long as you can find stable tenants, sounds like a no-brainer.
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- Jaycee GreenePro Member
  Real Estate Consultant · St. Louis MSA · Member since 2024 · 3k+ posts · 728 votes
  1y
  Quote from @Michael Smythe:
  
  So rents will be $1500 x 2 = $3000 and PIT only $1850?
  As long as you can find stable tenants, sounds like a no-brainer.
  
  @Darius Bates What's just your P&I?
  [email protected]
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- Darius Bates
  OP
  Investor · Milwaukee, WI · Member since 2023 · 7 posts · 4 votes
  1y
  Quote from @Jaycee Greene:
  
  Quote from @Michael Smythe:
  
  So rents will be $1500 x 2 = $3000 and PIT only $1850?
  As long as you can find stable tenants, sounds like a no-brainer.
  
  @Darius Bates What's just your P&I?
  
  My PI only is 1202
  0 Reply
- Jaycee GreenePro Member
  Real Estate Consultant · St. Louis MSA · Member since 2024 · 3k+ posts · 728 votes
  1y
  Quote from @Darius Bates:
  
  Quote from @Jaycee Greene:
  
  Quote from @Michael Smythe:
  
  So rents will be $1500 x 2 = $3000 and PIT only $1850?
  As long as you can find stable tenants, sounds like a no-brainer.
  
  @Darius Bates What's just your P&I?
  
  My PI only is 1202
  
  @Darius Bates Most investors look at the NOI of properties to determine if they're a good deal (P&I is excluded from NOI). So, as long as your total operating expenses (taxes, insurance, PM fee, and other, but NOT P&I) are less than $1,500/month, this is a strong deal!
  [email protected]
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Darius Bates
OP
Investor · Milwaukee, WI · Member since 2023 · 7 posts · 4 votes
1y
Thank you for your help!
taxes are estimated to be 412 Monthly
Insurance 133 monthly
Property management fee 125 a month
Quarterly Water 125 a month
Vacancy 5% 2900x0.05 145 per month
Repairs 7% is 203 a month
Capx 5% 145
All combined puts me at 1288. Again I appreciate your help!
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- Jaycee GreenePro Member
  Real Estate Consultant · St. Louis MSA · Member since 2024 · 3k+ posts · 728 votes
  1y
  Quote from @Darius Bates:
  
  Thank you for your help!
  taxes are estimated to be 412 Monthly
  Insurance 133 monthly
  Property management fee 125 a month
  Quarterly Water 125 a month
  Vacancy 5% 2900x0.05 145 per month
  Repairs 7% is 203 a month
  Capx 5% 145
  All combined puts me at 1288. Again I appreciate your help!
  
  @Darius Bates Vacancy ($145) is actually taken off the gross rent ($2,900), to get EGI (Effective Gross Income) of $2,755. So adding up the other expenses, I come up with $1,060 in monthly operating expenses (or ~38% of EGI). Generally, bank lenders I work with like to see Op Exp around 35%, but 38% is fine. Most bank lenders I work with would lend up to 75% of the ARV (in some cases, they'll go to as high as 80%). At 75% LTV with P&I of $1,202, this would mean a loan of ~$191k, with a DSCR of ~1.42x (which is very strong)!
  [email protected]
  1 Reply
Darius Bates
OP
Investor · Milwaukee, WI · Member since 2023 · 7 posts · 4 votes
1y
Thank you for your input and helping me break the numbers down!
1 Reply
Charles ClarkBusiness Member
Real Estate Broker · Milwaukee, WI · Member since 2020 · 307 posts · 209 votes
1y
@Darius Bates
Solid deal on paper — nice work. Riverwest is a strong rental neighborhood, and your numbers line up well.

At $210K purchase (plus the $6,500 credit) with an ARV of $255K, you’re walking in with equity. With rents in the $1,450–$1,650 range per unit, even with $15–20K in initial work, this should cash flow well depending on your financing terms.

A few things I’d double-check:
• Confirm rent comps on recently updated units, not just listed ones.
• Make sure your rehab budget is tight — Riverwest can uncover surprises.
• Run reserves into your numbers (CapEx + maintenance).

But overall, this looks like a strong buy in the current Milwaukee market. If you want a second look at the full pro forma, happy to help!
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Marcus Auerbach
Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
1y
Financially a no-brainer, just make sure you understand your capex on a 1900 built duplex and make sure you screen well. Holton is the deviding line between the better and the not so great area
2 Reply
Tim Tauer
Property Manager · Milwaukee, WI · Member since 2020 · 8 posts · 5 votes
11mo
Quote from @Darius Bates:

Hello, I'm in the process purchasing my third 2 unit property here in Milwaukee WI. I just wanted some feedback on the numbers on this property. It's located in the Riverwest Neighborhood it's an upper/lower 3-1 bath per unit layout. Purchase price is 210k ( plus a 6500 credit from the seller) rents I'm seeing in the area realistically are 1450-1650 per unit. The appraisal came back at 255k on this building. Initial work that needs to be completed is approximately 15-20k. Just looking for some feedback on the deal given the current nature of the market. I appreciate any input!! Thank you.

Hey, I own a duplex in Riverwest. I get $1450 for one unit and $1500 for the other. Both are two bedroom. I would say my product is on the nicer side for the area. 255k sounds reasonable for an appraisal. The last two years I was able to rent my vacants out in less than a week at that price. If you have a decently updated duplex you should attract a good amount of interest. Let me know if you have any other questions.
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- Darius Bates
  OP
  Investor · Milwaukee, WI · Member since 2023 · 7 posts · 4 votes
  11mo
  Quote from @Tim Tauer:
  
  Quote from @Darius Bates:
  
  Hello, I'm in the process purchasing my third 2 unit property here in Milwaukee WI. I just wanted some feedback on the numbers on this property. It's located in the Riverwest Neighborhood it's an upper/lower 3-1 bath per unit layout. Purchase price is 210k ( plus a 6500 credit from the seller) rents I'm seeing in the area realistically are 1450-1650 per unit. The appraisal came back at 255k on this building. Initial work that needs to be completed is approximately 15-20k. Just looking for some feedback on the deal given the current nature of the market. I appreciate any input!! Thank you.
  
  Hey, I own a duplex in Riverwest. I get $1450 for one unit and $1500 for the other. Both are two bedroom. I would say my product is on the nicer side for the area. 255k sounds reasonable for an appraisal. The last two years I was able to rent my vacants out in less than a week at that price. If you have a decently updated duplex you should attract a good amount of interest. Let me know if you have any other questions.
  Thanks for the information!! I closed on the duplex a few days ago. Currently renovating the vacant unit.
  0 Reply
- Tim Tauer
  Property Manager · Milwaukee, WI · Member since 2020 · 8 posts · 5 votes
  11mo
  Quote from @Darius Bates:
  
  Quote from @Tim Tauer:
  
  Quote from @Darius Bates:
  
  Hello, I'm in the process purchasing my third 2 unit property here in Milwaukee WI. I just wanted some feedback on the numbers on this property. It's located in the Riverwest Neighborhood it's an upper/lower 3-1 bath per unit layout. Purchase price is 210k ( plus a 6500 credit from the seller) rents I'm seeing in the area realistically are 1450-1650 per unit. The appraisal came back at 255k on this building. Initial work that needs to be completed is approximately 15-20k. Just looking for some feedback on the deal given the current nature of the market. I appreciate any input!! Thank you.
  
  Hey, I own a duplex in Riverwest. I get $1450 for one unit and $1500 for the other. Both are two bedroom. I would say my product is on the nicer side for the area. 255k sounds reasonable for an appraisal. The last two years I was able to rent my vacants out in less than a week at that price. If you have a decently updated duplex you should attract a good amount of interest. Let me know if you have any other questions.
  Thanks for the information!! I closed on the duplex a few days ago. Currently renovating the vacant unit.
  
  Congrats! If you need any more advice about the area let me know. Also, I do property management as a career on top of owning the duplex in Riverwest. So, if you need any PM services (even if its lawncare) let me know!
  1 Reply
Clare PitcherBusiness Member
Property Manager · Milwaukee, WI · Member since 2024 · 162 posts · 97 votes
11mo
Hey Darius,
Riverwest is a great area to invest! The rent will really depend on the condition of the propety and the time of year. Your PM should be able to run rental rates for you and help decide the rate to list the unit for. I run rental analysis every day, so if you want to message me the address directly, I can run one for you and send it to your email!
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- Darius Bates
  OP
  Investor · Milwaukee, WI · Member since 2023 · 7 posts · 4 votes
  11mo
  Quote from @Clare Pitcher:
  
  Hey Darius,
  Riverwest is a great area to invest! The rent will really depend on the condition of the propety and the time of year. Your PM should be able to run rental rates for you and help decide the rate to list the unit for. I run rental analysis every day, so if you want to message me the address directly, I can run one for you and send it to your email!
  
  Sounds good thank you!!!
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