@Roland Jerez and @Tony Hightower, Milwaukee is a great market and I am very grateful that life dropped me off here (for so many reasons outside of real estate as well), but remember the grass always looks greener on the other side.. Milwaukee is competitive and good deals are not easy to get under contract. We have about 1200 active local investors (my personal estimate) and the institutionals. You are correct on vacancy rates, we typically fill any vacancy within a couple weeks, and we don't have much turn over in the first place.
The city seems to be in the process of reinventing itself, at a pace we have not seen since the 1960s. We have a ton of new construction and 5 star appartement buildings are shooting up everywhere and so you need to be positioned correctly to compete. We rehab and own mostly single family properties in better chool districts outside of the MPS Milwaukee Public School system, which BTW is very challanged and covers most C class neighborhoods.
Cheap properties look good on paper, but I encourage everyone to look into the cycle of deferred maintenance, capex, tenant wear and tear, cost of PM, etc leading to a reluctance to re-invest in the property, leading to a lower grade tenant, leading to more wear, etc. And cashflow is the only source of income to pay for it all.
@Roland Jerez I see you are from Clarksville, TN - I have never beetn there, but I see about 1,600 homes for sale, amazing prizes and also good rents. What makes you want to give up your home field advantage and invest long distance? It would be tough for me to invest in Clarksville, I'd have a lot to learn!
@Marcus Auerbach Hey Marcus, I will respond. Clarksville can be a good market. But, what you are seeing is not necessarily what we see here. Right now, you may see a few for sale at .8 % of rents. Rents can vary widely even on same street.(3 br can be $725-950 or $950-1150).
There are opportunities for off market still that can bring much higher ROI. I have found several of these recently.
My guess is that he is looking at Milwaukee because of higher potential for increases in rent vs Cville. Rents here have traditionally moved slowly and we have an enormous amount of new construction going on in SF and MF. Also, is there a turnkey company in Milwaukee? That may be another factor.
@Tony Hightower thank you both for responding. The real situation in Clarksville is new construction appearing but an overall vacancy rate for clarksville is higher than I’d like for an investment property. I’ll look into off market propertied in Clarksville with direct mail campaigns.
@Marcus Auerbach the vacancy rates in Milwaukee appear to be much better IMO. Investing out of state is a bit worrisome but with the right "boots on ground" can alleviate that stress. What type of properties do you enjoy the most Multi or SFR? Of course, the one with the best cash flow but what's your preference?
I currently invest in the Milwaukee market. I prefer the submarkets of Milwaukee, though. Cap rates are still pretty decent in the Milwaukee market compared to many other comparable cities. Lots of opportunity for C class, high cashflowing properties. The B class properties are harder to come by though. Feel free to reach out if you want to set up a time for call. We host the largest monthly multifamily meetup in WI, if you're ever in the area!
@Brock Mogensen thanks for the information. After my market data research it appears C class properties are the way forward for investment opportunities. Still figuring out cap rates though. Do you run your own REIN in Milwaukee?
@Roland Jerez You mentioned looking for off-market deals in Clarksville. You might try working with a list broker to learn about good options for your area. If Clarksville has many investors working the area, chances are that Absentee Owners are already getting a lot of offers. You might consider some of the new motivated owner occupied lists.
@Roland Jerez and @Tony Hightower, Milwaukee is a great market and I am very grateful that life dropped me off here (for so many reasons outside of real estate as well), but remember the grass always looks greener on the other side.. Milwaukee is competitive and good deals are not easy to get under contract. We have about 1200 active local investors (my personal estimate) and the institutionals. You are correct on vacancy rates, we typically fill any vacancy within a couple weeks, and we don't have much turn over in the first place.
The city seems to be in the process of reinventing itself, at a pace we have not seen since the 1960s. We have a ton of new construction and 5 star appartement buildings are shooting up everywhere and so you need to be positioned correctly to compete. We rehab and own mostly single family properties in better chool districts outside of the MPS Milwaukee Public School system, which BTW is very challanged and covers most C class neighborhoods.
Cheap properties look good on paper, but I encourage everyone to look into the cycle of deferred maintenance, capex, tenant wear and tear, cost of PM, etc leading to a reluctance to re-invest in the property, leading to a lower grade tenant, leading to more wear, etc. And cashflow is the only source of income to pay for it all.
@Roland Jerez I agree, C class properties are the most popular and profitable in Milwaukee. However, make sure to research the areas you are buying in. In regards to your question about the REIN. Yes, along with my partners we host this monthly meetup. It is called the WI Apartment Investors Meetup. Next one is tomorrow!