Am I wasting my time investing in the Twin Cities?

[Stephanie Deppe]

I am a new investor (I work full time in another career). Just purchased a duplex in Minneapolis a couple months ago. I'm looking to go the BRRR route with long term rentals, but I'm finding deal flow to be very difficult. I have also looked in Milwaukee but not a lot of luck. Could someone lend a helping hand and let me know if there are other midwest cities I should be looking in? Would also need a realtor, property mgr, GC in that city.

Alternatively, I could pivot strategies and aim to start 1-2 AirBnBs/year in my state. Advice?

[Marcus Auerbach]

Well, we are in a real estate recession: fewer people are buying or selling, in Milwaukee transaction volume has been down about a third for the last 3 years compared to historic norms. On top of that prices have doubled since 2015 and are on track to increase another 7.5% or so this year - same as the last years.

I have done brrrs for 15 years, but its not worth it to me anymore - too much work and not enough equity. In fact on the last few I made as much on market appreciation over the 6 months we were working on it as from the rehab. The market does not give you a discount for condition anymore, some first time home buyer will overpay. So we've been basically buying move in ready homes instead and focus more on negotiating a discount and less on improvements.

Looking for another city is pointless, the market conditons are the same all over the Midwest. You can get deals in most Sunbelt States right now, they see home values decline, but from a very high level. My advice: leverage your home field advantage as much as you can. We are not getting away from inflation any time soon, so assets are bound to go up (measured in USD)