All Forum Posts by: Marcus Auerbach

Redfin just posted their February numbers and listed Milwaukee #1 followed by Detroit and other Midwest markets. Bottom of the list FL and TX. Here is a link to the article: https://www.redfin.com/news/home-prices-rise-midwest-2025/

Milwaukee has been a trick market to invest over the last few years. With inventory ultra-low sellers have no reason to negotiate discounts and even properties in poor condition sell for close to the same price as their updated comparables down the street. The Midwest mentality has a hard time wrapping their head around this: always humble and a little self-deprecating, they don't believe in superlatives and that is what kept the market (and prices) sort-of grounded for the last few years. 

But I have been saying this on my channel for years: if you travel a little bit you realize Milwaukee is not a below-average city. So it makes no sense that Milwaukee real estate is selling so much below the national average. Speaking of national average: Redfin say the average US median price increase in February was 3%.

Here is the data from our local MLS system for the City of Milwaukee:

Milwaukee metro area - including the suburbs:

This is single-family only, I suspect that Redfin is looking at all categories, hence the slightly different numbers. 

In a couple weeks we will have March numbers, but from what I have seen in the market the last couple weeks the numbers are not going to be any softer. 

@Bryan F. lot's of good points! 

Learning at home first is huge! Based on that, it is easier to learn a second market and it sounds like you spend a lot of time there. Once you have multiple properties in that market, built knowledge and relationships the lines between OOS and homefield-investing start to blur, at least you narrow the gap. 

What you did is in stark contrast to the person who wants to buy one property and then move on to the next State for "diversification". They never reach critical mass on knowledge, relationships and revenue with service providers. 

Or the person who tells me they don't want to spend the money on a flight to Milwaukee (have never been here) and invest "fully remote".

It also forces you to take yourself out of the equation as a handyman and property manager, which has pros and cons. I assume you probably self-managed at first with your Chicago properties. It really helps you learn the job and saves some cash which is critical in the beginning to buy your next deal. But at some point you also become the bottle neck and you can't grow your biz any further because of your own limitations.

Yup, that's my point: there is friction involved that you don't have when you are local and you can stop by on your way home. This gives the OOS investor a built-in disadvantage over local investors. With a large enough economic delta between the market where you live and where you invest, it still does make financial sense. The benefits outweigh the friction losses. And you can mitigate those by investing in better-quality properties. The lower grade the investment is, the more interactions you will have for repairs and tenants, the more opportunities for extra friction - which materializes as a cost. If you apply first principle thinking, you want to strategically minimize the number of opportunities to interact with the property.

That's why over the years we have tightened the radius of our investments even more to about 20 minutes, so I don't go to the south side of Milwaukee, even though I see a lot of great opportunities there. 

And I am lucky to live in a great market; however I have to add it was not considered great when I started here in 2009 and everything was falling apart. That was really just dumb luck that my corporate job got me here. 

Right, but that still does not make it an investment. It's a currency. You can lend out dollars too, (or Euros if you want it to sound more exciting). Nobody would say: I invest in dollars because they "cash flow". Same with crypto. 

You can totally use Zillow for comps. The data is good (the same as MLS) and Zillow even has a comp tool you can use. The problem is that establishing ARV is both art and science. Most agents struggle with it, any training we offer is always packed. ut you don't need to be an agent to get good at ARVs, you get better with time and practice. Calculate 100 ARVs and see how close you get.. I would not argue with someone who does not have much experience.

Yes you can use use your zengo or coinbase wallet so you don't need to bring a USB stick. I was just making a point. Don't be so offended

If you buy a farm it does not matter if farm prices go up or down, you make money every year. If you buy an apartment building and real estate prices drop to half, it does not matter, because people can live in it and pay rent. If you buy dividend stocks, it does not matter, you get dividends...

You do know about the Dutch tulips right?

Well, if you run a lending business on crypto you get interest, but crypto in itself does not cash flow. Neither does gold.

Hi Matthew, excatly, it's the newbie who is unsure what to do and partners with a friend who is equally green and then they go and buy a duplex as tenants in common. Sooner or later one wants out and the other one can not aford to pay him out, or one rents to a bad tenant and they loose a bunch of money on an eviction and now the blame game starts..

The best partnerships are formed when 2 people complement each other, for example one has money and the other has time or skill. The odds of success of two pros partnering are much different than two noobs forming an LLC and then calling me, because they want to buy their first property and of course OOS... ;-)

@Cody L. congratulations!! I only know a handful of people who have scaled this large! Most never went past 10 or 20 units, but even that wil chnage someones financial future. So my comments are aimed at investors who are looking at 1-4 unit deals, maybe a considering and 8 or 12 unit building. 

Once you go 100+ units the dynamic is obviously much different, you have a much bigger rent roll to pay contractors or full-time staff. Being local is not that important anymore..

Yup, thats exactly what it comes down to good boots on the ground, someone who has the necessary knowledge and you can trust. But of course there is a cost to that.

Partnering is an option, but I'd be very careful. Almost every biz partnership I have ever seen went sour sooner or later. Written agreement, spelled out responsibilities and a spelled out exit plan is a must!