Investor · San Mateo · Member since 2015 · 14 posts · 16 votes
I'm a software engineer at HouseCanary, which makes real estate software such as the ComeHome app. After starting my new job I just had to start investing in real estate. My favorite part is all the people I get to talk to and interact with, so much different from my head-down professional life.
After a few months of scouting a dozen cities to potentially invest in, I picked Milwaukee, not because it was the best place to invest but because it was the first place I got a realtor to engage seriously and start sending me decent leads that matched what I described in my intro.
I like to send out 1-2 offers per week even if I don't think they will be accepted, as long as the price would make it a great deal.
Property Manager · Milwaukee, WI · Member since 2014 · 113 posts · 144 votes
6y
@Kalen Jordan I've found discussing COC returns relative to SFR in any market can be incredibly challenging, primarily because no two proformas are the same. I've seen Milwaukee folks boast anywhere from 20% to "infinity" COC returns, but those are the same folks that don't factor in Cap-Ex and tend to be social media all-stars.
I personally feel most areas of Milwaukee represent a 6% COC when truly 100% passive (you've hired out management, maintenance, and brokerage). The more interesting conversation relative to Milwaukee comes to play with the national affordable housing crisis. Milwaukee has culture, entertainment, great food, low traffic, two major sports teams (Bucks are best in the league currently), freshwater, emerging tech startup community, a handful of fortune 500 companies, the DNC in 2020 AND you can buy a house for $100k. I'm not sure how many markets in this country have comparable potential, but I'm betting big on MKE.
Real Estate Broker · Forney, TX · Member since 2019 · 1k+ posts · 399 votes
6y
Welcome to BiggerPockets! Truly nice to meet you. Good luck going forward! I am inspired by your enthusiasm. I believe there is opportunity in any location if you run your numbers and follow your plan. Glad to hear you found a good real estate agent for your team. Hope the best for you going forward!
I'm a software engineer at HouseCanary, which makes real estate software such as the ComeHome app. After starting my new job I just had to start investing in real estate. My favorite part is all the people I get to talk to and interact with, so much different from my head-down professional life.
After a few months of scouting a dozen cities to potentially invest in, I picked Milwaukee, not because it was the best place to invest but because it was the first place I got a realtor to engage seriously and start sending me decent leads that matched what I described in my intro.
I like to send out 1-2 offers per week even if I don't think they will be accepted, as long as the price would make it a great deal.
Welcome aboard Kody. Something that may help you get a better response rate from Realtors is if you contact Realtors who work at Property Management Companies or contact Realtors who are listing a ton of rental properties. Think Duplexes and the like. Good luck over there in Milwaukee.
Welcome to BP and welcome to the Milwaukee market. I live over in Madison, but I've done most of my investing in Milwaukee. Who are you using as a Realtor and how did you find them? I'm always interested to learn who is worth working with out there.
Milwaukee, WI · Member since 2019 · 54 posts · 44 votes
6y
Hi and welcome to Milwaukee. I manage properties here and have a good feel for the market. Feel free to give me a call and I can try to help with any info.
Real Estate Syndicator · Milwaukee, WI · Member since 2018 · 1k+ posts · 907 votes
6y
Welcome to the Milwaukee market! I invest heavily in this market. Feel free to reach out if you have any questions or need any intros to PM's and realtors.
Investor · Nipomo, CA · Member since 2014 · 366 posts · 401 votes
6y
@Kalen Jordan That is going to depend on a few factors. I suggest connecting with @Matt Maurice and with @Matthew Meunier, as they both are in the PM and acquisition side of the market. They can help give a solid rundown of the market and what you can expect for returns.
Property Manager · Milwaukee, WI · Member since 2014 · 113 posts · 144 votes
6y
@Kalen Jordan I've found discussing COC returns relative to SFR in any market can be incredibly challenging, primarily because no two proformas are the same. I've seen Milwaukee folks boast anywhere from 20% to "infinity" COC returns, but those are the same folks that don't factor in Cap-Ex and tend to be social media all-stars.
I personally feel most areas of Milwaukee represent a 6% COC when truly 100% passive (you've hired out management, maintenance, and brokerage). The more interesting conversation relative to Milwaukee comes to play with the national affordable housing crisis. Milwaukee has culture, entertainment, great food, low traffic, two major sports teams (Bucks are best in the league currently), freshwater, emerging tech startup community, a handful of fortune 500 companies, the DNC in 2020 AND you can buy a house for $100k. I'm not sure how many markets in this country have comparable potential, but I'm betting big on MKE.
Real Estate Agent · Milwaukee, WI · Member since 2018 · 50 posts · 45 votes
6y
@Matt Maurice makes a good point. I wholesale, manage, and am a real estate agent in the MKE market and I can’t tell you how many listings and sellers “fluff” up their pro formas with minimal expenses, low vacancies, and absolutely ZERO cap ex. Everything is a deal in that world.
I find CoC's on SFR's to be 6-10% area pending. 5-7% on MFH due to larger down payments. It's a prime time to sell right now as a lot of people are feeling the "shift" with all the activity MKE has going on. Wear your battle hat when you find something and stay patient.
@Matt Maurice makes a good point. I wholesale, manage, and am a real estate agent in the MKE market and I can’t tell you how many listings and sellers “fluff” up their pro formas with minimal expenses, low vacancies, and absolutely ZERO cap ex. Everything is a deal in that world.
I find CoC's on SFR's to be 6-10% area pending. 5-7% on MFH due to larger down payments. It's a prime time to sell right now as a lot of people are feeling the "shift" with all the activity MKE has going on. Wear your battle hat when you find something and stay patient.
Rental Property Investor · Milwaukee, WI · Member since 2020 · 20 posts · 4 votes
6y
I agree that the market got to a point where the prices are so high and seller’s want to sell their property for a lot more than what they are really worth, just had a talk with an owner of 4 units property found the deal off market but they just have some unrealistic number and not willing to negotiate, also agree that we need to solely rely upon our own information about getting property it is good to ask for property performa but it’s crucial to do own research
I agree that the market got to a point where the prices are so high and seller’s want to sell their property for a lot more than what they are really worth, just had a talk with an owner of 4 units property found the deal off market but they just have some unrealistic number and not willing to negotiate, also agree that we need to solely rely upon our own information about getting property it is good to ask for property performa but it’s crucial to do own research
Just curious - what were they asking in relation to rents/NOI?
What I find is that a lot of off-market deals (excluding the sub 100k market, very different story) are just testing the water to see what they could possibly get, before they get serious about selling and then ultimatley list for maximum exposure. They have only a luke warm motivation, typically lifestyle related, and are comfortable to collect the monthly cash flow and perhaps even a little bit of appreciation - in other words time is on their side.
What you want to look for in an off market deal is motivation and urgency with the seller - if they want to unload a property NOW, you could potentially be looking at a deal.
Got it thanks for the feedback Matt! So it sounds like basically there's solid appreciation potential in addition to a reasonable/conservative 6% CoC?
Yes, that is what Matt is saying. I should have full 2019 numbers in a couple days, but I'll expect median sales price incerases in line with what we have seen the last yeasr: +5% to +7% increase depending on neighborhood. Matt and I had many discussions about this and agree: cash flow is vital and always first, but you can't generate wealth from cash flow. Wealth is created with with equity, de-leveraging principal, appreciation and taxes.
Rental Property Investor · Milwaukee, WI · Member since 2020 · 20 posts · 4 votes
6y
Hi Marcus, the property was located in the gra-ram in Milwaukee .They asked 350 ,the current rents were 700 (4 units) which is way below market, I found couple properties that was sold in the past 1-6 months in the same area ,they almost the same but the average sold price was 270-300. They were justifying their price based on the future rents I will have (average price is 850)
Like you said people that have their property free and clear have a lot more time to test waters and can manipulate