Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
I haven't been around much the past 2 weeks, as I've been finishing up the rehab Marty Boardman and I have been working on in the Milwaukee suburbs. After 40+ rehabs in my local area (Atlanta), Marty and I decided to venture into a new market together and give long-distance rehabbing a try.
It was quite a project -- the largest I've ever attempted, both in terms of scope and budget. But, the results were great. We took an early 70s house that others considered a tear-down (according to my listing estate agent who had brought some other investors through the house when it was listed for sale earlier in the year) and brought it back to life.
It won't be a home run (purchase of $150K, rehab of $120K, listed for resale at $340K), but for a first long-distance project, we'll take it. We've had two showings on the first day after listing, and the feedback was great...hopefully we'll get it sold sooner rather than later.
And our second Milwaukee project is now under contract to purchase, just three doors down from the first. We close on it in 2 weeks and will be starting the rehab right after Christmas...
Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
13y
There was a TON of stuff built between 1940 - 1960 in Milwaukee. You do find some older, and of course there are newer homes too. Especially the area where I live, right in the fifties, they started putting up homes like gangbusters for families with men returning from the military. Almost all the rentals I have are from 1949 - 1959. The one exception is from 1926. When I renovated it for renting out, the upstairs bathroom sink was a Kohler with a date stamp on it from 1915. Now that's some history!
Milwaukee may not be the best for flips, but rentals is a whole different story, especially on the Northwest side.
My 3 most recent rentals:
$25K purchase, $10K renovation, rented out at $800/month
$23K purchase, $2k renovation, rented out at $875/month
$24K purchase, $15K renovation, rented out at $1100/month
Real Estate Agent · San Jose, CA · Member since 2013 · 43 posts · 39 votes
13y
Beautiful transformation, you did a really nice job there.
J Scott Your blog's name sound very familiar to me, wouldn't you happen to post on 2p2 as well?
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
Originally posted by Khang Vu:
Beautiful transformation, you did a really nice job there.
J Scott Your blog's name sound very familiar to me, wouldn't you happen to post on 2p2 as well?
Hey Khang -
Thanks! Yup, I post occasionally on 2p2, though not nearly as much as I used to...
Residential Landlord · Greenfield, WI · Member since 2013 · 299 posts · 126 votes
13y
Originally posted by Dawn A.:
If the selling price was $330K then it must've been in a better area of Milwaukee.
You bet!
The thing that gets me about this is...You have the (not so small) added expense of travel, the disadvantage of not being onsite, unfamiliarity of the area and contractors...and the local rehabbers in MKE didn't see the potential and couldn't beat you? By a lot?
I know nothing of rehabbing, but given the competitiveness of rehabbing (lotta fish swimming in that pond), the negatives I've listed, and some I don't even know of...well, no offense, but I'm skeptical.
Real Estate Agent · Milwaukee County, WI · Member since 2009 · 3k+ posts · 525 votes
13y
Okay, just my opinion
Do not shoot or attack the messenger here
First off - I do not have to talk for J Scott -
Believe me he has that point covered
It’s legit @Arnie Guida
They starting assembling a respectable team of contractors,
real estate agent, and general ideal of the local area.
Sad part is when I visited their work site :
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
– I realize I been walking around with my eyes closed
- I been working in that community for now over 16+ years,
but in the computer field.
It like a beautiful woman sitting under your nose and
you thought she was a dud. Bad example, but that how I feel
I was surprised to see price point they got for the
property, but more the mary.
Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
13y
Originally posted by Arnie Guida:
Originally posted by Dawn A.:
If the selling price was $330K then it must've been in a better area of Milwaukee.
You bet!
The thing that gets me about this is...You have the (not so small) added expense of travel, the disadvantage of not being onsite, unfamiliarity of the area and contractors...and the local rehabbers in MKE didn't see the potential and couldn't beat you? By a lot?
I know nothing of rehabbing, but given the competitiveness of rehabbing (lotta fish swimming in that pond), the negatives I've listed, and some I don't even know of...well, no offense, but I'm skeptical.
Something doesn't smell right.
Overall, J's margins are lower than I accept. He does more projects than I do, but frankly I'm a little surprised that he hasnt moved up market before now.
I work in a market 250 miles away that is extremely competitive. It still allows 6 figure margins on spec builds. I see nothing unbelievable about his numbers. Now Will Barnard, on the other hand....
Real Estate Agent · Milwaukee County, WI · Member since 2009 · 3k+ posts · 525 votes
13y
@Arnie Guida - I know this no joke to you through
One of issues I see we have here locally is
No true ideal of who is providing hard money lending.
For example:
look at the bigger pocket map of hard money lenders – no dot
Private lenders and Hard money providers – everyone keeping to
themselves ( locally ). One of things I hope to provide one day
would be local funding for rehabbers and educate next generation
real estate investors (kids). I have about 24+ years before I retire
and really do not want to spend it saving the world
Wisconsin real estate investors just really do not share to
pull each other up in life. It just my personal feelings
The local rei will share for about hefty upfront cost
and monthly fee. If it was not for biggerpockets
I probably be walking snoring
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
Originally posted by Arnie Guida:
Originally posted by Dawn A.:
If the selling price was $330K then it must've been in a better area of Milwaukee.
I know nothing of rehabbing, but given the competitiveness of rehabbing (lotta fish swimming in that pond), the negatives I've listed, and some I don't even know of...well, no offense, but I'm skeptical.
Something doesn't smell right.
Wow. After 5 years and tens of thousands of blog and BP posts about my properties and my results, this is literally the first time anyone has questioned my honesty.
Not that I have anything to prove, but my ego won't let me ignore your post.
Here is proof of the sale at the price I indicated:
The house is probably 5 minutes from where you live (assuming your profile is accurate)...must be mind boggling, huh?
I guess that still doesn't prove that I'm not undertaking an elaborate hoax to convince people that I made a thin profit on a deal that was 3 months over schedule and $25K over budget. Luckily, the BP member was was my project manager on this one, the BP member who was my architect, Jenkins (above) and the other three or four BP members who visited me at the property throughout the project, are all willing to lie for me as well.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
Btw, in addition to what I wrote above, the reason no other investors touched this property is because they all seemed to think it needed to be torn down. I spoke with several agents who took local investors through the property when it was an REO, and none of them wanted to touch it. That's why it was still available 1.5 years after it was listed when we came along.
In fact, this is what we've noticed about the Milwaukee market -- there are very few good deals that aren't practically tear-downs, and even those have relatively low margins. Part of the reason why we likely won't be staying in Milwaukee once we finish up the projects we're currently working on.
It was a good learning experience, but between the high labor prices (unions suck! :), the REALLY old houses (1940s is considered new around here), the systemic foundation issues (the whole city is built on clay), and the horrible weather, Milwaukee isn't my ideal real estate town.
That said, I think I have found my ideal town...but that's a whole separate thread... ;-)
Wholesaler · Montreal, Quebec · Member since 2012 · 30 posts · 4 votes
13y
Hi Scott,
I'm always reading your website and blogs and I have to tell you that you are awesome! The work you do and the help you offer to everyone. May God bless you with abundance.
Thank you
Jackie
Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
13y
There was a TON of stuff built between 1940 - 1960 in Milwaukee. You do find some older, and of course there are newer homes too. Especially the area where I live, right in the fifties, they started putting up homes like gangbusters for families with men returning from the military. Almost all the rentals I have are from 1949 - 1959. The one exception is from 1926. When I renovated it for renting out, the upstairs bathroom sink was a Kohler with a date stamp on it from 1915. Now that's some history!
Milwaukee may not be the best for flips, but rentals is a whole different story, especially on the Northwest side.
My 3 most recent rentals:
$25K purchase, $10K renovation, rented out at $800/month
$23K purchase, $2k renovation, rented out at $875/month
$24K purchase, $15K renovation, rented out at $1100/month
Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
13y
I will agree with Jenkins Ramon on one thing -- hard to get money. I too, see no hard money lenders in WI. Therefore I have gone after the low end of the market because its cheaper and I can get in more quickly. So far it has worked.
I do not agree that investors in Milwaukee are not willing to help each other, at least I have been willing to.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
Hi Dawn,
I should have been more clear. There are plenty of houses built after the 1940s they just don't tend to have the right characteristics to make good consistent flips in this area... at least from what I've seen.
I also agree with your 2 other points: there are some great older rentals and people here tend to be very nice and helpful... I am a big fan of the Midwest for that reason...
Milwaukee, WI · Member since 2012 · 26 posts · 1 vote
13y
Arnie Guida One of the advantages for J Scott is they have been using their own funding for most of their projects. In any case, most of the projects that he has completed, did not have any financing costs. For those that use private money, or even more so with hard money, the financing costs can be a significant amount. Especially if you are looking at a $250K price point in terms of purchase price and rehab expenses.
For instance, one of their newer deals is a house in wauwatosa that I had viewed. I would have had to buy it much lower than they did in order to make it a good project. That is partially due to financing costs and partially because I thought the margins were too thin on that deal.
J Scott I am interested to hear more about your ideal real estate town.
New York City, NY · Member since 2013 · 8 posts · 1 vote
13y
Interesting story.You really do good work to final this deal. I hope you can sell it easily.i like your working idea. thanks.these stories are helpful for me to start a real estate business.
Atlanta, GA · Member since 2012 · 93 posts · 8 votes
13y
WOW! It looks great! I'm planning on laying some hardwood flooring soon. What are the specifics of the hardwood you laid in the living room? for instance, color, etc?
Flipper · Irvine, CA · Member since 2013 · 349 posts · 45 votes
13y
Hi J Scott, thanks for posting and updating your Milwaukee rehab with Marty Boardman. I've been following both of you guys with interest because my college lives in Milwaukee and we were talking about partnering up for a rehab in Milwaukee. I really wanted to hear what your experiences were and thanks for the honest feedback. It really helped tremendously. I really liked that you mentioned the union labor and the foundation. Union labor costs could be a deal breaker.
I reside in Orange County with only 1 rehab experience under my belt.