New Member in Milwaukee, WI - Shorewood Duplex/Buy and Hold

18 Replies

Hello all!

My name is Jordan and I am a new member in Milwaukee, WI. I grew up in Milwaukee but have only relocated back to the city about 6 months ago after a 9 year hiatus. I am 30 yrs old, employed with W2 income and I am looking to purchase a duplex to house hack while simultaneously looking for my first buy and hold investment property. I am looking for the owner occupied duplex to be in Shorewood, WI, since that is desirable for my family and looking for the buy and hold in 53223 or West Allis after doing my research. Any advice or comments would be appreciated. Great to meet everyone!

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Hi @Jordan L. welcome to BP.  Small world but I have family that lives in Shorewood and we have a 1, soon to be 2, properties in Milwaukee.

Hello @Jordan L. and welcome to Bigger Pockets. At BP, you can get the information you are looking for while networking with other investors. BP has tons of real estate information including free online videos and courses for you to watch and learn from. BP also allows you to post blogs and share ideas with others. At BP, the possibilities are endless!

Thanks for the notes everyone. Looking forward to getting started.

Does anyone have recommendations on local lenders in Milwaukee? I would be looking for an investor friendly lender with the thought to finance the duplex through a conventional FHA loan and then the investment property through the same lender. I have already reached out to Equitable Bank.

Also, I am trying to get a better handle on the A-D location/property grading. What grades would 53223 and West Allis receive? I would think C+ for 53223 and B for West Allis. Thanks again!  

@Jordan L.

I heard Equitable Bank is fairly investor friendly, although I have no experience.  I've heard the same about Summit Credit Union.  I have used Marine CU myself.  

I would think your grading of the zip codes is about right although it changes within the zip code.  For instance, the western part of West Allis is generally in the B territory as it has newer housing stock and higher home values and feels more suburban compared to the eastern parts of Stallis.  Also, you can find $200,000 plus houses in 53223 when you get into Brown Deer versus $60,000 houses in other parts of the zip code.  

Not sure if you are looking for duplexes for the rental or not, but there won't be more than a handful of them in 53223.  West Allis will have a ton of them.  

@Darren Budahn  

Awesome, I have heard the same feedback on lenders. I will reach out to all of them. How has Marine CU worked for you? Why did you end up going with them? 

I would be looking for a SFR for my first investment property in the $50 - 80k range, so it sounds like both might be an option. What would you grade the east part of Stallis?

Is that type of property in a C+ area or better even possible? Any suggestions on other areas to target would be appreciated. Thanks again!

@Jordan L.

I went with Marine because they allowed me to keep growing my business on the commercial/portfolio side of things. So far so good. Pretty easy to work with. 

I'd say the eastern area of Stallis is about a C grade for the most part.  Older housing stock but less crime than in say C areas in Milwaukee. 

I'd say your goal is certainly attainable. You can find sfh's in C or C+ areas even cheaper if you're willing to venture into Milwaukee. A lot of investors look on the northwest side of Milwaukee for SFH rentals. Lot of 3/1 ranches with lower taxes that aren't 100 years old and that will rent for $900 plus a month.

@Darren Budahn  

What are some B/B+ areas? South Milwaukee, Cudahy and St. Francis? Where are you targeting your investments?

I am still leaning towards targeting a C/C+ area to start investing, while house hacking a duplex in Shorewood.

I'd say if you're looking at B+ areas you would want to check out Bay View, Tosa, and the East Side. Price points will be much higher here obviously. Tosa is really hot now. 

South Milwaukee varies like Stallis, although it's probably a little better overall. Probably goes from C+ to B+. I would put St Francis ahead of Cudahy. 

If you're willing to house hack and willing to live in Milwaukee, you could maybe find a 3 or 4 family on the East Side which is right next to Shorewood. 

My stuff is kind of all over. (Northwest, near south side, stallis , and Sherman Park)  I'm not necessarily targeting only one area. 

@Darren Budahn

Nice, more great information. 

The reason we are targeting Shorewood for our duplex is the school system (kids) and the interest deferred down-payment assistance loan and duplex/attic conversion loans that the village offers. Seems like free money and offers some easy ways to force appreciation.

@Jordan L

Certainly understandable about wanting to get the kids in the better school district. I'll have to research the loan assistance you referenced. Haven't heard of it

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@Jordan L. Hey dude! Welcome. I'm in the same boat. Studying our Milwaukee market.

@Darren Budahn Question for you: what areas around Sherman Park do you own properties in? I go the impression from my on the ground research that some of it is certainly pretty rough, more like D areas. Do you stay west of Sherman Blvd.? Or just wherever you find the deal?

Thanks gang. Good discussion.

@Joshua Martin

I only have one duplex in Sherman Park 

There are definitely some D parts to the neighborhood. You are correct that once you get east of Sherman Blvd it starts getting rough quickly. My place is on 44th-one block west of Sherman off of Chambers. Most people probably consider it a D area. But it's a huge 3,000 sq ft duplex that I was all in for less than 50k that I get $1,600 a month rent in. It's my most profitable property to date. I would most likely not venture more than a couple blocks east of Shermann regardless of the deal

I'd also say Burleigh is kind of a dividing line. South of Burleigh is much rougher than north of Burleigh. Many more homeowners north of Burleigh. Some great housing stock in that area  

@Darren Budahn

Try searching Shorewood Village Neighborhood Improvement Loan. There is a bunch of info online, just don't snap it up before I make my purchase!

@Joshua Martin

Thanks for the warm welcome. Been great getting some nagging questions answered and some good advice. I have also spent some time driving around that area and it seems very spotty. Cash flows seem incredible and destroy the 2% rule, but I just don't know if I want my first investment to be in a D area. Seems like unneeded added risk for a first-time investor. @Darren Budahn what have been the pitfalls (if any) of your $50k duplex in the Sherman Park area?

@Joshua Martin

@Jordan L.

I've owned the property about a year and a half and honestly haven't had any issues so far. One tenant paid late one month and that was about it. Nothing major as of yet.  However, you always need to remember that most folks in these areas are one pitfall (major vehicle repair for example) from financial hardship. And it is a high crime area for sure. NAlso, with a 90 year old house, stuff is bound to come up. We fixed all the minor stuff we could after purchasing the place, but it had newer furnaces, water heaters, and a 5 year old roof to begin with. 

Also, it doesn't bother me, but if you're not comfortable being in that area, I would simply not invest there. For example, I wouldn't drive 20 blocks east and invest around 24th and Burleigh. That area is much worse IMO

@Darren Budahn

Yeah I'm just planning to avoid a large patch of the city in that area where I wouldn't be comfortable going at night or even doing repairs during the day outside the place. I think there are definitely some workable areas in that Sherman/Washington Park area though. Thanks for all the input.

And @Jordan L. , there's a great Milwaukee REIA group that meets at least twice a month. I've only had a chance to go to two so far (work conflicts), but plan to make that regular petty quick. Certainly worth checking out, meeting people, and learning from.

Best of luck,

JTM

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