Can someone give me an overview of the neighborhood (A, B, C, D..) type and conditions in Milwaukee, WI, Zip Code: 53215? Also, stretching it further, if someone local willing to drive around the property that I plan to get in and feedback me on the neighborhood and property condition (from outside), would be very much appreciated.
@Dawn Anastasi wrote a short book titled: Investing In Milwaukee. She rates that zip code C- to B. There is an app called Trulia and they too have a crime map.
As far as someone driving to the property- you don't have anything set up in Milwaukee yet you want to invest there? I know in REI there's risk but I think most would agree that you do all you can to mitigate risk.
All the best to you...
Thanks Jorge for your tips and advice.
I agree to have boots on the ground and enough research needs to be done from my side and that I'll do before jumping into anything further.
Having said that, I'd like to leverage BP community to get preliminary overview of the Milwaukee market. Appreciate your referral to Dawn Anastasi's book.
53215 is very dependent on exactly where you are in that neighborhood. My firehouse covers a significant portion of that zip code. The further west you go towards Jackson Park is better than East. South is better than North. Depending on what exactly you are looking for, I could help you.
Thanks Mike. Very helpful comments. I'll take up your offer once things get firmed up:)
@Devang S. most new investors are following the same decision making path: they are looking online and find an overwhelming sea of choices. Their instinct tells them to mitigate risk exposure, so they are looking for cheaper properties. That leads to a particular neighborhood, often because of proximity or familiarity. Then they identify a property that (literally) looks good and lastly run the numbers. The property will then choose the tenants, so the target audienbce becomes a default choice. Most everyone starts out this way, but eventually evolves to the almost reverse order.
Start with the financial model; one of they key assumptions is going to be rent. Rent will define your target demographic. Every Product Manager in the world will always start by defining a target customer segment and then develop the product for that market, not the other way around. Real estate investors should follow the same logic. You should know who you want to rent to, before you look at zip codes and properties. You can choose anywhere from low or no income to young families to business executives. The next step is to tweak the financial model to find your personal sweet spot for cash flow, potential for appreciation, risk, turnover and management intensity, condition and capital requirements. All these parameters correlate and if you move one up another one will go down and sometimes not linear. Once you have dialed in your financial model it will dictate the neighborhood you want to invest and the type of building. From there on it's easier, because you are just looking for a property that will match your financial model. The nice thing about Milwaukee is that you will find a perfect neighborhood for pretty much any investment scenario you are looking for.
Has anyone viewed the growth potential for Milwaukee market? I recently saw reports showing Milwaukee as having low to negative population growth.
@Marcus Auerbach - Solid advice. Thanks for your detailed explanation, specifically financial modeling. It does make sense, still learning:)
@Noel Volin - very good question. I have done little backwards analysis, but heard there is something coming up in Miwaukee area that would create an additional 10,000 jobs. It's all hearsay, so will ask other area experts to jump in and validate such claims.