Milwaukee's 53206 Market Analysis
Hi all, I am a newbie to the industry, trying my hand at analyzing properties as rentals in my childhood zip code. I grew up in 53206, it is a D to C Grade neighborhood from experience I can tell you bad things do happen but good people do live here and I would like to make it a better environment for all that call it home. I started my analysis by looking at the zip code stats using UnitedStatesZipCodes.Org. they have the median household income pegged at $22,141. I took this number and applied the 2% and 70% rules of thumb to it. So, (22,141).33 to get an annual rent cost of $7,306/12 to get a monthly rent cost of $608. Now, I am keenly interested in duplexes because well economies of scale, so monthly a property should make $1,216.
This ($1,216)50 = gives me a purchase price (all-in) of $60,800/.7 = and a home value (ARV) of $86,857. With this information, I took to the county accessors website, and at random choose existing duplexes I know to be in the area confirming my valuation. Next, I took to the city's real estate site to confirm the plausibility. I found that there are several city-owned properties for sale that can fit these numbers. Leaving me with the question of how do I proceed? I am a young kid with a lot of hustle and just as much knowledge but I am lacking capital, how do I present my findings to a reputable investor? Secondly what improvements can I make to my methods to limit the madness I may be in for?
Thank you all for your time and consideration on this matter!