Good Neighborhoods for Cash Flow and Appreciation
Investor · Milwaukee, WI · Member since 2016 · 15 posts · 5 votes
Good Neighborhoods for Cash Flow and Appreciation
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Rebecca KnoxBusiness Member
Specialist · Milwaukee, WI · Member since 2014 · 1k+ posts · 1k+ votesConnect with Lee Valentyn, project director of Clarke Square Neighborhood Initiative through Journey House if you are interested in Clarke Square. He runs a free Clarke Square landlord meetup that meets once a quarter and it's mostly landlords that have rentals in Clarke Square-a handful of homeowners. I go to those meetings whenever I can just to keep up on what's happening in the neighborhood. From what I know, it sounds like a lot of in your face prostitution going on....some of the stories were pretty funny but they are trying to crack down on that.
West Allis was just brought up yesterday to me by another 'pre' investor who told me that someone told him that West Allis was a horrible place to buy--I personally told him that I believe the other guy doesn't want competition :) but also that neighborhoods much like scope of works, can be very subjective and dependent on your immediate resources and long term goals. I wholesale deals and I don't ever worry about West Allis deals--they go quickly. Reach out to Matt Maurice from Welcome Home Milwaukee--his business office is in West Allis and he is very familiar with that area--owns commercial and residential. My guess is Matt will tell you that West Allis and Kops are ok but I'm guessing Clarke Square may be shaky in his opinion at this time but Ryan Pattee owns a lot and is a big face in the Clarke Square neighborhood--his building has the Welcome to Clarke Square mural on it.
Kops Park is another one---hot investor area with lots of activity and interest....people rehabbing in that neighborhood and buy and hold.
You can sign up for neighborhoods you're interested in on Nextdoor and you can learn a lot about the neighborhood just from that--also, I have found some great contractors through there--you do have to have different email address for each neighborhood. I actually met Lee through Nextdoor.
17 Replies
- Architect · Wenatchee, WA · Member since 2018 · 843 posts · 907 votes7y
Why would you get a commercial loan on a Duplex?
- Investor · Milwaukee, WI · Member since 2016 · 15 posts · 5 votes7y
I guess I am referring broadly to the need to take out a conventional or commercial loan for a non-owner occupied investment property that would require a 25% down payment. I currently own two houses, my duplex and my single-family home where I live, and bought those with 3.5% and 5% down respectively, and the best I have been able to find thus far for the next purchase is 25%. I haven't dug too deep into financing options yet, and if you know of options otherwise, I'm all ears.
- Architect · Wenatchee, WA · Member since 2018 · 843 posts · 907 votes7y
Oh ok. Ya commercial loan typically have shorter am. yrs and higher interest. Thats why I was asking.
20-25% on an investment property is typical. Keep shopping around and you might find one with 20%. Rarely do you get lower than that now a days. Good luck. - WI · Member since 2018 · 123 posts · 69 votes7y
@Dennis Elverman what kind of renter have you picked up in the Wash Heights area? I've noticed there is a decent strip that is situated between two moderate crime areas...just blocks away. Curious if you have had any problems?
- Member since 2019 · 5 posts · 0 votes7y
I was starting to wonder if anyone from Milwaukee was on the site. I just purchased something in the Kops Park area. It's a duplex and I will be living in the top unit. From what I've seen so far, it's a good neighborhood. It's off of Burleigh and 85th.
- Rental Property Investor · Joplin, MO · Member since 2017 · 66 posts · 9 votes7y
@Dennis Elverman Hi Dennis! How were you able to put down 5% for your single-family home? Was that conventional or FHA?
- 7yRebecca KnoxBusiness MemberSpecialist · Milwaukee, WI · Member since 2014 · 1k+ posts · 1k+ votes
Connect with Lee Valentyn, project director of Clarke Square Neighborhood Initiative through Journey House if you are interested in Clarke Square. He runs a free Clarke Square landlord meetup that meets once a quarter and it's mostly landlords that have rentals in Clarke Square-a handful of homeowners. I go to those meetings whenever I can just to keep up on what's happening in the neighborhood. From what I know, it sounds like a lot of in your face prostitution going on....some of the stories were pretty funny but they are trying to crack down on that.
West Allis was just brought up yesterday to me by another 'pre' investor who told me that someone told him that West Allis was a horrible place to buy--I personally told him that I believe the other guy doesn't want competition :) but also that neighborhoods much like scope of works, can be very subjective and dependent on your immediate resources and long term goals. I wholesale deals and I don't ever worry about West Allis deals--they go quickly. Reach out to Matt Maurice from Welcome Home Milwaukee--his business office is in West Allis and he is very familiar with that area--owns commercial and residential. My guess is Matt will tell you that West Allis and Kops are ok but I'm guessing Clarke Square may be shaky in his opinion at this time but Ryan Pattee owns a lot and is a big face in the Clarke Square neighborhood--his building has the Welcome to Clarke Square mural on it.
Kops Park is another one---hot investor area with lots of activity and interest....people rehabbing in that neighborhood and buy and hold.
You can sign up for neighborhoods you're interested in on Nextdoor and you can learn a lot about the neighborhood just from that--also, I have found some great contractors through there--you do have to have different email address for each neighborhood. I actually met Lee through Nextdoor.
- Flipper/Rehabber · Milwaukee, WI · Member since 2016 · 153 posts · 84 votes7y
I am currently in the middle of a flip in the Nash Park neighborhood and really like it over there. Super diverse neighborhood with older long time residents and some young families. Kids walking home from the school bus by themselves no problem. Prices are pretty reasonable still in that area too. Food for thought.
- 7yRebecca KnoxBusiness MemberSpecialist · Milwaukee, WI · Member since 2014 · 1k+ posts · 1k+ votes
Also you may want to consider AirBnB for your Washington Heights duplex especially for DNC. I run Brew City REI, a private club, and there's a thread going on about this. Ryan just rented his Walker's Point AirBnB at $4k a night...another investor has his booked at $1000/night.
Also, someone in Brew City mentioned Joe Shere from Wisconsin River Bank can do 20% down on an ARM
- 7yRebecca KnoxBusiness MemberSpecialist · Milwaukee, WI · Member since 2014 · 1k+ posts · 1k+ votes
I agree Brett. Nash Park is legit!!!
- Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes7y
@Dennis Elverman non owner occupied loans (NOO) require more down payment (you referred to them as commercial) than OO loans. FHA is not always a good option, because a lot of sellers are concerned about the FHA inspection and will prefer an offer with a conventional loan.
There are low down payment options between 5% and 15% for conventional OO loans. Of course, that would require you to move into your next purchase and turn your current home into a rental. It's a leapfrog strategy that allows you to scale much faster, than saving up 20% from your W2 before you can make another purchase.
I have learned to be very careful to call an area "up and comming". In my ten years in REI I have not seen a neighborhood complete a full turn; my wife went to school at UWM and she said River West was up and comming 25 years ago. Still is today. My tip would be follow school districts; good ones usually fair better both in rents and appreciation.
- Investor · Milwaukee, WI · Member since 2016 · 15 posts · 5 votes7y
@Patrick M., I have been picking up all different kinds of college educated professional tenants over the 5 years I have owned the house. This includes a teacher, an admin at the Medical College, an insurance underwriter, an HR manager, and a commercial interior designer. I simply frame and market my rental as a great option for professionals that work in Tosa or downtown, take care of the property, and treat my tenants well. I find that most of the Heights is safe and a good investment, but have a preference for west of Hawley/55th, and south of Lloyd. Hi-Mount is pretty nice too, and honestly the only area I would avoid is probably 47th Street or North Ave.
@Richard Gaskins and @Brett Kash, Thanks for the tip on Kops Park and Nash Park!
@Corbin Jones, I have a 3.5% FHA on my duplex, but can show probably 30-35% equity in that now, and a conventional non-FHA loan for my personal single-family home. You can find plenty of banks willing to give you a conventional loan for 5% down, but you will probably have to pay PMI. My wife and I lucked out with a program through a national bank that gives people of certain professions low down-payment loans without PMI (I'm a lawyer/professor, the wife is a PhD Neuropsychologist that works in the medical field). That being said, while it all worked out, I will never get a loan from a national bank again. I was a foreclosure attorney and saw how screwed up things were at the national banks in the wake of the great recession, and things haven't improved.
@Rebecca Knox, Thank you for all of your insight! I am D.J. Elverman on the Brew City Facebook page, and you have been a great help on all platforms! Pattee was actually the one pimping out Clarke Square and Silver City to me, but I guess based on your insight that might not be the best metaphor to use. I am thinking West Allis might be the best place to check out next now that I live on the southwest-side and intend to self-manage.
@Marcus Auerbach, Thank you for your insight as well. I agree that certain neighborhoods will always be "up and coming." That being said, some areas of Walker's Point, Brewer's Hill, and the Fifth Ward seem like they are poised to make major strides. I like Washington Heights as well, but I am biased. My goal was originally to use the leapfrog technique, but last year with one kid here and one on the way we said screw it and moved into the home we see ourselves staying in for a while. This may slow down my investment strategy, but hopefully we can get things rolling with another deal soon.
Thank you all for your responses, I thought this thread was dead, and I appreciate you bringing it back to life!
- 7yRebecca KnoxBusiness MemberSpecialist · Milwaukee, WI · Member since 2014 · 1k+ posts · 1k+ votes
"Pattee was actually the one pimping out Clarke Square and Silver City to me" hahahahahahaha, now that made me laugh out loud! ....and yes, I know you from the club as D.J.
- Investor · Milwaukee, WI · Member since 2013 · 1k+ posts · 1k+ votes7y
Originally posted by @Patrick M.:
@Dennis Elverman what kind of renter have you picked up in the Wash Heights area? I've noticed there is a decent strip that is situated between two moderate crime areas...just blocks away. Curious if you have had any problems?
LOL. You mean Washington Highlands??? It's a little more than decent, relatively speaking. Milwaukee is spotty. Things can change fast in a few blocks.
- Investor · Milwaukee, WI · Member since 2013 · 1k+ posts · 1k+ votes7y
Originally posted by @Dennis Elverman:
Hello all! I currently own a duplex in Washington Heights and am saving up for my next investment. As of right now, I am probably a year or two away from having the cash to pick up another Washington Heights duplex (approx. $200k purchase price, $50k down for a commercial loan). I am getting antsy, and can probably pick up something under $100k this summer, so I am expanding my horizons.
What are some other neighborhoods that people are investing in? I have looked at Washington Park, Martin Drive, and Uptown west of Loomis a bit, but I want to expand my horizons. Anyone investing in Clarke Square? Silver City? I heard at a recent REI event that Clarke Square and Silver City are up and coming neighborhoods, but I'd like to hear from people buying in these neighborhoods before I take the leap.
What about West Allis? I know that it is a solid city, but I can't personally distinguish what neighborhoods are good and bad. If anyone has any insight, I'd love to hear it!
Wont you be, wont you be, please wont you be, my neighbor?
https://www.estately.com/listings/info/2737-n-53rd...
Probably a decent buy. Have not seen it up close. I own across the street.
This one is south of Capital, west of the 35th corridor, sort of wondering why it hasn't sold, might be in rougher shape than it looks, sure is cute, not too bad on the inside from the pics - I would go look at it
This one is probably worth a peek if you prefer the southside
Have had my eye on this one, but the $107k price tag is outrageous for the physical condition - very cool though - $25k and I'm sold.
There you go local lawyer dude. No, I wouldn't do this for an out of state investor on BP. Hopefully they won't notice. $100k for cash flow and appreciation is a tall order my friend. Best to just find a good deal for appreciation, which you can do in any neighborhood, but of course is always harder when searching retail. For cash flow, obviously it comes down to purchase price in relation to rents and again, harder when you buy retail. This is why I prefer the north side over the south side (also because I shoot in on Capital), but let's face it, the south side is in better shape over-all. I absolutely concur with Marcus on being weary of anyone saying a neighborhood is up and coming. Riverwest and Bayview have been up and coming for 30 years, maybe longer (I was 20 30 years ago). Maybe they are. Will we live long enough to see it?
As far as some of the best buys in the city, though not for short-term appreciation reasons, I think the southshore is pretty cool, for a person who loves Big Blue and wants to be near it. Try touching any of that on the northshore!!!
Just north of 894 is probably a good area to farm for you, but it is very difficult to get one for $100k through the MLS. That one on Oklahoma is definitely interesting. I wonder what it looks like inside.
$200k in Washington Heights? Maybe buy one there for $100k and fix it up? You are so familiar. I wonder if you own the one I walked away from doing an appraisal on a couple years ago. Washington Heights is all over the board. I might suggest you stop buying based on what you would live in and what is a safer bet. But hey, don't let me tell you what you want!!!
LOL. Sorry, I do not possess a filter and would therefore make a very bad realtor. Sometimes it gets me into trouble...often it keeps me out of it too.
I've been an appraiser for 14 years. If you want to help each other Mr Real Estate Lawyer dude, I'm game.
Peace.
- Investor · Milwaukee, WI · Member since 2016 · 15 posts · 5 votes7y
@Account Closed, Thanks for the post! I only have a second to reply now, but I had to say wow about the house on Oklahoma, hard to find duplexes that low in that neighborhood. It will probably be gone soon if it isn't gone already.
- Investor · Parker, CO · Member since 2016 · 550 posts · 389 votes7y
@Dennis Elverman we buy most of our properties in 53209 and 53218 zip codes. They seem to make really good rental properties. We use the Trulia crime maps a lot to help us stay away from the high crime areas and that helps a bunch.
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