Lured by BP podcasts and the writings of various BP members who shall remain nameless I have made the trip to Milwaukee in search of real estate - I have found one duplex near W. Vliet and N. 38th St. - I am set to close on 6/30 and intend to make the purchase - the asking price is around $25k and the current rent is $600/unit - this is a small pocket of mainly multifamily properties located close to but away from "war zones" to the north and east, as far as I can tell. I would strongly suggest to anyone looking at Milwaukee to come to the city and drive the streets - it is pretty clear where the bad areas are. Zip codes are not enough. The area where I intend to purchase has been called a C+ area and maybe a bit better - I'm not sure. The key to this deal and why I may end up regretting it is that it needs work and one of the tenants seems to be a great handyman type who enjoys the work [free rent]. If I can count on him to pull off the repairs, this should be a good deal. If not, I may be stuck. This area is completely different from where I am living currently and I would say extreme caution is needed - probably more caution than I am using. Good to luck to all. Feedback or questions about this deal, Milwaukee, duplexes in Milwaukee, more than welcome - would love to hear about potential duplex deals or SFR deals in Milwaukee or maybe other Wisconsin cities like Madison, Green Bay. Also will be looking again in KCMO when the dust settles on this one.
I live in the Milwaukee area If you need any help. I know madison real estate is booming right now
@Daniel M. glad you made the trip to MKE and the best to you on your new deal. Please get set up woth a good PM who will take care of the property for you. Let me know if at some point you take the drive over to Townsend. All the best.
@Shawn Ackerman thank you Shawn, you're a good person and a valuable resource
@Daniel M. Thanks man! Now if you can make a recording of that so that I can replay for my wife I'd be a happy man😂😂. thanks for the kind words. I'm always here for you if you get into a jam.
@Daniel M. so funny how small the BP world is. I live in Wauwatosa, work downtown and take Vliet to and from work. To add to this, I made another connection today with an investor in Houston TX where I am working on insurance options for his portfolio.
Besides the coincidental story, I wanted to second your grading of c+. With the expressway and park to the West, Harley Davidson to the South, it seems to keep it from getting too ugly.
Good luck with your purchase! I don't let my tenants work on my properties--when I got into this business I learned the two most important rules of being a landlord:
1. The landlord is in charge.
2. The tenant is not in charge.
Having a tenant work on your property can make maintaining this order difficult. It has worked well for some people, but to me, it's not worth it. Particularly if you are out of state. Make sure you have someone lined up to go and inspect the work being done since you can't do it yourself. Make sure it is done on time and with the qualify of work you expect. Document payment (or rent break?) meticulously.
@Bob E. I did close on the property and will email you photos of the property this week - hope you had a productive trip over there
HI Dan, Looking at properties today.
I grew up in Wauwatosa and, while I do not have any properties in the Milwaukee area today, both of my sons are just getting into investing there (purchased a duplex this spring), as well as working in property management. For higher end tenants and quality properties look into the Riverwest area and points east.
Who did you use for inspecting the property before finalizing the purchase? We are currently also looking for multifamilies in Milwaukee and have one in our cross hairs but unsure of good inspectors for multifamilies in this area. Hope your investment works out, I lived in town for 8 years and you are right in saying you need to drive the streets, they are very clear delineations between good and "bad" areas that would be tough investments. It is a very segregated city that can have affluent populations living only blocks from what most would consider very challenged areas.
@Kyle Garro where are you looking to invest specifically and what strategy are you after?
I'm currently looking at a property on W Montana St in Milwaukee, not sure if this is a C or D area, anybody know this area ?
How did this deal turn it for you? I just purchased a property down the road from you at 4716 W Vliet. Welcome to the neighborhood. Washington Heights is one if not the favorite place for me to invest right now. You are just east of there, I feel like the strip from 35 to the park is about to really see a big push. Great housing stock there and tons of nice Brick mixed use available.
Thank you @Ryan Pattee , I am very curious to see what will happen with this area. There's a big difference right now as you know between where you're at and where I'm at. I've had a lot of issues with the property, which was not maintained very well - new outlets, storm windows, replacement windows, leaky pipes, bad electrical switches, replacement flooring, roof issues, garage issues, insect issues, tree issues - learning a lot, spending a lot. Hope the area justifies the investment! Regards. dm
For $25000 you did alright as long as your rehab costs haven’t skyrocketed. That area is about 5-7 years away from being super cool. Harley and Miller scopes are right there, and the Near West Side partners are investing a ton of time and money over there. Hang onto it.
As someone who grew up on Vliet I can attest it can be a tough area especially east of Washington Park. I personally only am willing to look at property south of the Menominee valley. Just my preference. Different tenants, tend to do less property damage.
I thought I would update this situation. The upstairs tenant broke his lease in August '17 and abandoned the property, doing more damage on the way out. He left a lot of junk behind which I had removed for $500. The place was infested with bugs, which I treated for several months. It is now bug free. The downstairs tenant billed me for work that was never done, so I had to get another contractor. I found a great contractor but he is not cheap by any means. This property is over 100 years old and needs lots of work. I've been working on the upper unit for awhile as funds permit and am close to being done. The contractor wants to fix everything and so far that's what has happened - again these old houses need tons of work and finding the right person or crew to do the work is absolutely critical. I've work doe on the roof - patching and removing scuttle hatch. Work in the attic - took down 4 paster/lathe walls installed improperly in the attic, installed new windows, and removed massive amounts of old insulation. Rented a dumpster and put 2.7 tons of materials in it. Have redone the bathroom/kitchen and replaced/repaired/installed new outlets in the upper unit. Converted gas dryer to electric. Painted the entire unit. Took down kitchen ceiling and one wall and replaced. Replaced kitchen flooring and pantry flooring including sub flooring. Cleaned out cold air returns and installed new dry wall. Will install new kitchen cabinets today and gas oven. This process takes a lot of time, energy, work, and money. Do not buy a 100 year old house in Milwaukee and expect it to be maintenance free. Have a very good idea what needs to be fixed and how much it will cost to fix it and who will do the work before you buy. There will definitely be significant costs involved depending on what you want the property to be like when you're done. Good luck!
Has this property ever made you a profit?
@Daniel M. after putting about $16K into a duplex that isn’t as old as yours, I learned one important thing:
Stick to SFH. Since then I have purchased three in Milwaukee and the maintenance is much easier to handle and the cash flow is actually a bit better.
I always through the duplex route would be the way to go, but even tenanted seem to be more of a problem with tenant relationships, etc.
Good luck with the rest of your rehab and if you need any help out here, let me know. I spent 15 months in Houston, residing in the Willowbrook neighborhood.
So you’ve gone 9 months without making any money on this property?
So is the other tenant covering your mortgage for now?
How are you covering all your expenses for this proper if it’s not making money?
Sorry for all the questions. Just trying to learn and understand how someone in your position has not lost or sold the property.
@Daniel M. Who is your property manager.