New Investor in greater Milwaukee area

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New Investor in greater Milwaukee area

Pat Parrillo
Realtor · Milwaukee, WI · Member since 2014 · 147 posts · 73 votes

Hi All,

My name is Pat and I am a new investor looking to get started in buy and hold rental properties and live in West Bend, WI about 45 minutes north of Milwaukee. I have been reading the BP blog and listening to the podcast on my way to work…love it.

My goal of REI is to build a foundation of rental properties and would like to purchase one property every year for the next 10 or more years.

Originally my strategy was to focus on multi-family properties within a 20 minute drive of my house. Markets include West Bend, Port Washington, Grafton and Cedarburg of interest. After researching properties on MLS there are few multi's that cash flow at the 1% rule or greater in these markets and the several that do which I have toured I have not been impressed with.

I am now broadening my search to include Single Family Homes. In doing so I am struggling to understand what rents would be for SFH in my area. Rent-o-meter and craigslist have been great for setting a benchmark for multi but I am looking for additional sources to vet out what rents would be for SFH.

What would be greatly appreciated is some insight into how to better evaluate cities to invest in and recommendations or thoughts from people from the MKE area about the cities I am considering. Also, how far you would recommend for a first property from your home?

Thanks in advance and glad to be a part of the BP community. 

Pat

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Dawn AnastasiPro Member
Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
11y

@Pat Parrillo  a warm (er, chilly!) Wisconsin welcome to you!

Podcast Guest on Show #29
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  • Sibbir Noman
    Glen Allen, VA · Member since 2014 · 49 posts · 11 votes
    11y

    @Pat Parrillo

    Hi Pat - Welcome to the site!  I'm sure others on the site will disagree but buying properties away from where you live can be very complicated and difficult.  I own properties in Chicago burbs when I bought them when I used to live there.  I wouldn't look to buy in a new city that I don't know personally.  There are cities where a few block can make a huge difference as far as neighborhood goes.  Also, it's much easier to initially manage when your properties are close by.  Just my 2 cents.

    0Reply
  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    11y

    @Pat Parrillo 

    welcome to the site.

    0Reply
  • Kyle Mack
    Investor · SE Wisconsin/NE Illinois · Member since 2012 · 109 posts · 57 votes
    11y

    Hey Pat, welcome to BP and I'm glad you took the plunge to introduce yourself.

    Yeah, as you mention, I'm a big fan of rentometer and think its usually within $50 of market rents.

    Also, as a first property, for me, it was very convenient to have a rental very close (next door in my duplex). As a newbie getting started, I'm glad I didn't have to deal with the added stress/time of traveling TO the property. Obviously, on my next property, I'll have to branch out a bit, but it will definitely be fairly close to my home. Even if I had to pay slightly more for a property, it would be worth it. Maybe its that Milwaukee mentality that a 20 minute drive is super far away.

    0Reply
  • Dawn AnastasiPro Member
    Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
    11y

    @Pat Parrillo  a warm (er, chilly!) Wisconsin welcome to you!

    Podcast Guest on Show #29
    1Reply
  • Lumi Ispas
    Real Estate Consultant · Chicago, IL · Member since 2014 · 720 posts · 439 votes
    11y

    Pat, 30 min one way is already too long, as the tenants need something when they get home, meaning at the traffic time, so your 30 min drive can become one hour easily. And that's only one way...

    One thing to keep in mind is that the property could be within 30 min of your home or your work. If there are more options for good investment properties closer to your work, buy them there, and the best scenario is to look along your home - work path.

    Regarding rental prices, I would advice you to call some Management Companies, Rental Agencies or Real Estate offices. This way you'll get the most pertinent information.

    Good luck to you!

    0Reply
  • Karen M.
    Hales Corners, WI · Member since 2013 · 229 posts · 80 votes
    11y

    Hi Pat, and welcome!   We have family in Richfield and my impression of West Bend is that it is a great, growing area.  Good luck with your research.

    BTW, there is a City of Milwaukee land lording class on Dec 10. that I'm going to. They have them every so often and they are free. You may also want to network at the Milwaukee REIA (I think the founder lives up your way), and the Bigger Pockets Milwaukee meet ups too. Have fun!

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  • Paul Timmins
    Specialist · Rockland, MA · Member since 2010 · 7k+ posts · 2k+ votes
    11y

    @Pat Parrillo 

    Welcome. Fill in the foundation below.

    Check out the Start Here page http://www.biggerpockets.com/starthere

    Check out BiggerPockets Ultimate Beginner's Guide - A fantastic free book that walks through many of the key topics of real estate investing.

    Check out the free BiggerPockets Podcast - A weekly podcast with interviews and a ton of great advice. And you get the benefit of having over 90 past ones to catch up on.

    Locate and attend 3 different local REIA club meetings great place to meet people gather resources and info. Here you will meet wholesalers who provide deals and rehabbers.

    Two Great reads, I bought both J. Scott The Book on Flipping Houses, The Book on Estimating ReHab Costs http://www.biggerpockets.com/flippingbook

    To find out about an area go to IREM.org search for ARM certified property managers. Call 5 ask them what parts of the city they like/dislike and why. Ask them what they see expenses running per category per unit. What do they see them selling for per unit, what is the market occupancy rate. What are the market rents? Ask them if they know anything coming up for sale. Great way to pick up some good info and possibly a deal.

    You can also search NARPM.org for the RMP (Residential Management Professional) and MPM (Master Property Manager) certified.

    You might consider Niche or Specialized Housing like student housing. Rents can be 2-4 times more. Remember you don't have to own a property to control it.

    Download BP’s newest book here some good due diligence in Chapter 10. Real Estate Rewind Starting over

    http://www.biggerpockets.com/files/user/brandonatbp/file/real-estate-rewind-a-biggerpockets-community-book

    Good Luck

    Paul 

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  • Dave CarpenterPro Member
    Investor · Cedarburg, WI · Member since 2013 · 439 posts · 150 votes
    11y

    @Pat Parrillo  welcome to BP!

    I currently live in Cedarburg, work in West Bend and invest in Milwaukee. I don't know a ton about the west bend market for SFH but know that it tends to be a bit less expensive than some of the closer suburbs. Having said that, I'd bet west bend could be a great market in and of itself. I think there are a variety of areas you could invest within west bend.

    Cedarburg is a more expensive market, though I do know some people who rent out their homes (after they moved away) but I don't get the impression any of them are cash flowing significantly.

    If it were me, I'd begin looking at SFHs in west bend and start there. There may be a few neighborhoods you could identify based on price and type of home and then talk with a RE agent about getting information on those areas. 

    Do you have a specific price point you are looking at? A specific size/style of home?

    You have taken the first step!!

    0Reply
  • Alex Anderson
    Real Estate Agent · Milwaukee, WI · Member since 2010 · 129 posts · 24 votes
    11y

    Welcome Pat! I try to invest in areas that I can reach by bicycle lol. A little unconventional but when you continue to turn over rocks in your neighborhood, you'll find some great deals.

    0Reply
  • Carlton B.
    Rental Property Investor · Milwaukee, WI · Member since 2013 · 281 posts · 133 votes
    11y

    Welcome @Pat Parrillo 

    I personally invest within a few miles of my home, and its very convenient. Also I'm familiar with the neighborhoods. Also MLS is a great source for finding properties its not the only. Actually getting out there and driving the neighborhoods and talking to people can be a good source of leads. In Rich Dad Poor Dad Robert would go jogging and find properties.

    0Reply
  • Pat Parrillo
    OP
    Realtor · Milwaukee, WI · Member since 2014 · 147 posts · 73 votes
    11y

    Thanks for all the fantastic advice so far. Feeling the BP love and excited to take action on the recommendations. 

    @Karen M. - Thanks for the heads up on the Land Lording class I will have to check that out. I am a member of Milwaukee REIA, just joined, great resource and group of people and looking forward to future meetings. Is there a site where I can find upcoming BP Milwaukee Meet Up? Or a list of other local REI organizations?

    @Paul Timmins  - So much great information and actionable advice. Thank you so much. I've got some exciting work ahead of me can't wait to dig into what you shared. 

    @Dave Carpenter - Price range wise I am basing that around what I feel the markets can command in rent. I feel the top of the market in the West Bend area is about $800 per unit for a duplex and $1,600 for a SFH so I am keeping my ceiling around $160k. However, if a really nice unit is available that has higher rents I would say my very top end ceiling would be $200k. Ideally I would love to get into a SFH for $130k or Duplex for $160k. Haven't quite figured out a specific style or size of a home. Do you have recommendations of how to go about narrowing down that criteria? I think it will make my search more focused and successful to do so.

    Happy Thanksgiving to all!

    0Reply
  • Jon HuberPro Member
    Rental Property Investor · Boca Raton, FL · Member since 2014 · 1k+ posts · 713 votes
    11y

    @Pat Parrillo

    Welcome to the community! Be sure to be as active and engaging as you can. This site offers a tremendous amount of information, but only if you seek it out. Read the blogs, post your questions, and the podcasts as gold. The best free education you can get. Good luck out there.

       As for narrowing down your criteria, I think you are going to need to do more market research to determine what you're most comfortable with. As more properties come on the market, you will see what properties sell the fastest, which rent the highest, etc. Just narrow down your geographic "farm" and master the blocks so that as soon as something comes on the market, you know if it is a great deal, or a seller shooting for the moon.

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  • Account Closed
    Involved In Real Estate · Cedarburg, WI · Member since 2013 · 31 posts · 9 votes
    11y

    @Pat Parrillo 

    Welcome Pat! I agree with the investors who say the closer the better for the investment property. I live in Cedarburg and have two properties in Kenosha. I manage the SFH myself because there really isn't much for me to do there even on a yearly basis. My duplex is a whole other story though. I'm using a management company there because it needs attention much more frequently and that 1+ hour drive each way is a no go. When I lived in Kenosha it wasn't a problem for me (I was about 15 minutes away) and I really liked having the control off all aspects of management. You are right about prices out here being a bit higher though. From what I see, Port is still less expensive than Cedarburg or Grafton. Occasionally we get sellers that do not want to list a property on MLS but are interested in selling. I'll keep me eye out for those. I'm pretty sure we had a duplex in Grafton with that kind of situation within the last few months. Glad you found this site before buying your first property. This place is a treasure trove of information. I wish I found it before buying my first!

    0Reply
  • Pat Parrillo
    OP
    Realtor · Milwaukee, WI · Member since 2014 · 147 posts · 73 votes
    11y

    @Account Closed 

    Thanks for the warm welcome and advice to stay nearby for investing. From all that I am hearing that sounds to be the best plan for me. I would absolutely appreciate the opportunity if a property in your network is for sale and the owner does not want to put it on MLS.

    Couldn't agree more about BP being a treasure trove. Looking forward to all that is to come. 

    Thanks again!

    0Reply
  • Mark Shaffar
    Real Estate Agent · Madison, WI · Member since 2015 · 328 posts · 88 votes
    11y

    Hi Pat I'm in Madison and interested in Milwaukee REIA meetings. I haven't been to any. Did you try any out?

    0Reply
  • Noah Guyette
    New to Real Estate · Oshkosh, WI · Member since 2023 · 1 post · 0 votes
    2y

    Hey @Pat Parrillo. First time home buyer here (and first time BP poster ) who will be headed to West Bend for work in a few months. I'm brand new to bigger pockets forums, and have been building out my buy box and analyzing deals in West Bend. 

    It appears that right now, there isn't a lot of cash flow to be had in West Bend. Especially if I am going to house hack. Thats alright, for my first investment I'd really just like to cut my mortgage payments down so I can save money for my first true investment property. 

    My question for you (after these nine years!), how has West Bend investing treated you? Port Washington definitely has my curiosity however I've never been there in person so I will need to check it out when I get back home. Any sort of insight or advice you have on living and investing in West Bend would be greatly appreciated! 

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