All Forum Posts by: Marcus Auerbach

@Jeff Walden I think you are too concerned about your tenant and what he might do or not do. The sooner you tell him, the longer he has to find a new place. This is business, not personal. Remind him that the new landlord will call you for references. Your lease should state that the security deposit cannot be used as last months rent. If you don't have rent on the 5th you serve him a notice. You can still file for eviction based on the non-payment of rent - still 3 weeks left to go. Plus you have every right to go after him. The law is really very clear and if you know your tools you should not have a reason to be concerned. If you need more details just download "The Wisconsin Way - Landlord Tenant Guide". Comes as a pdf, just google it.

Single Family Buy & Hold Mixer

It's been a while since we've opened up a Buy&Hold property to the BP community, but my friend Brian H. has volunteered to host at his latest acquisition in Brown Deer. If you are interested in SFR investing you should definitely use this opportunity to hear his thoughts on:

- Why he bought the property

- How his numbers look like

- What upgrades are worth the money and what to leave alone 

The format is much like a house warming party, no formal presentation, but take a look behind the scene, a great opportunity to network with other investors, get some ideas and enjoy a drink and good company. We may also have my favorite lender around. (Full disclosure: I am an investor and real estate agent in and around Milwaukee and will also be happy to chat) 

RSVP by clicking on the blue button on top of the post so we can prepare and have enough to drink! Cheers!

@Brant Jones depends what type of property you want to finance and what you plan is going forward. If you are looking for a one shot deal I can recommend a mortgage broker, they will shop the loan around for you. if you are looking to build a relationship you, are better served with a small commercial bank. 

Here is a post from Jonas Prising, the CEO of the ManpowerGroup (workforce agency, a $19 Billion business - yes with a "B") about Milwaukee. @Meredith L. asked me the other day about the development of employment - who better to answer this than the CEO of a company that provides workforce? I thought it was an interesting take and worth sharing.

The Rise And Rise Of America’s Best-Kept Secret

Milwaukee has transformed from dairy belt to rust belt to digital belt.

Harleys. Cheeseheads. Packers. Beer. Maybe even hard-working people with Midwest values.

That’s what you might hear when you tell people you live in Milwaukee. Or you did. Now, increasingly, it’s changing. The heart of Wisconn Valley. Regenerated downtown and leisure-drenched riverwalk. New NBA Milwaukee Bucks stadium. A center of advanced manufacturing. Home to hard-working people with in-demand skills. A city where we see firsthand the impact of the Skills Revolution ― where new skills emerge as fast as others become obsolete. A secondary city transforming itself.

That’s what we mean when we say America’s best-kept secret. And last year, as if you need more evidence, Milwaukee was named one of America’s most misunderstood cities. Who knew?

We did, actually.

Founded here almost 70 years ago, and 10 years ago moving our HQ from the sleepy suburbs back downtown, we became a major part of the renaissance of this thriving hub of Fortune 500s, global companies and local artisans. As an organization operating across the U.S. and in 80 markets around the world, we often relocate people to the city. We attract talent from Texas, California, Canada, the Netherlands and elsewhere to join this Midwest melting pot of cultural, ethnic and social groups of German, Polish, Irish, Italian and Hispanic communities, all of us fiercely proud of our hometown.

Here are five things you might not know about America’s best kept secret:

1. Milwaukee Is A Digital Disrupter:

For decades, Milwaukee and manufacturing have gone hand in hand with a reputation as the workshop to the world. From motorbikes to machinery. Years ago, that would have meant dirty, dull, even dangerous work, but today the city is at the forefront of next-generation advanced digital manufacturing. Businesses like Rockwell Automation and now Foxconn are trailblazing a new industry that provides sustainable work for thousands ― provided people have the skills. To fill these rapidly transforming high-tech roles, we’re looking to new talent pools, working together with Rockwell Automation in a ground-breaking new partnership to up-skill 1,000 veterans per year by 2018, investing in the future workforce and creating a pool of certified talent. Milwaukee companies together are making America as great as it’s ever been. See the impact on individuals as well as employers.

2. Milwaukee Is A Hot City For Skilled Workers

When it comes to jobs, Wisconsin has much to celebrate. Unemployment hovers around 3.2 percent ― a 17-year low ― and the state has had a positive net hiring outlook over 10 percent for the past seven years, according to our MEOS Survey. Across the Midwest region, employment outlooks are on a level with or stronger than New York in professional and business services, manufacturing, construction, and leisure and hospitality. The appeal of lakeside living, lower rents and great jobs works for millennials, Gen Xers and boomers alike, and Gen Zs are arriving from in and out of state to learn-up at great colleges and universities like Marquette University, the University of Wisconsin network, Concordia University, MATC and more.

3. Demand For “Made In Milwaukee” Continues To Grow

Organizations are stepping up manufacturing efforts here on U.S. soil. The quest for increasingly specific skills brings many to Milwaukee for its combination of work-ready talent, business-friendly policies and economic development experts intent on the region’s success. To create a sustainable pipeline of skilled workers for the future, we’re working with companies to build the right-skilled advanced manufacturing workforce to help fuel America’s growth. This is how we will get ALL people ready for a future of work that is more digital. Other states and sectors would do well to follow the upskilling trend. Plenty has been written predicting the future: more jobs, different jobs, less jobs, even no jobs. Few are telling people that they will need new skills and they will need them more often to stay employable for jobs we may not even have heard of yet. We can’t afford to wait and see exactly what these skills might be. We need to build the plane while flying it too.

4. Milwaukee Is Becoming A Top Destination For Startups And NextGen Work

In 2016, Milwaukee saw a huge increase (145 percent) in venture capital funding for startups ― to $111.8 million. Thanks to our leading universities and thriving tech scene, co-working spaces and startup incubators are on the rise too. The combination of entrepreneurs and large companies seeking in-demand skills means Milwaukee is a top destination for people looking to work in new ways. This NextGen Work, which includes contract, freelance, temporary and part-time, appeals to 94 percent of workers in the U.S. And it’s not just for millennials ― cash, control and skills development are priorities for all. Milwaukee is fast becoming a destination for NextGen workers looking to learn new skills, earn more and better balance work and home for long working lives.

5. Milwaukee’s Youth Have Got It Covered

Tomorrow rests on the shoulders of the next generation. Milwaukee has one of the top 10 most youthful populations in the U.S., and in the years ahead it’ll be these young people who will be powering the future of work. They’re ambitious, energized and passionate. They have a will to succeed and a thirst for new experiences. We believe every organization has a responsibility to their local community and to take immediate action to get young people ready for work, so here in Milwaukee, we are partnering with organizations like Junior Achievement, the Boys and Girls Clubs and The Commons to nurture learnability and help young people gain valuable work experience.

Take a look at some of the young people who have experienced these programs firsthand, and I challenge you not to be inspired by their ambition.

I’ve lived in more than nine countries around the world, and this is the place that feels like home for me, my family and for ManpowerGroup. Today, Milwaukee is booming with new energy, investment and opportunity. From boom to rust and back to boom, Milwaukee is fueled by transforming industries that are retooling the city to compete on a global stage. It’s an exciting time to be here, and we’re committed to this community and looking forward to whatever the next 70 years hold. I am certain it won’t be America’s best-kept secret for much longer.

@Matthew Olszak reflecting on your comment about ambiguity - I agree with you on some flexibility and common sense, but don't forget about fair housing laws. You have to have written requirements and adhere to them. If you accept someone who does not meet you minimum requirements (maybe just by a little bit) and you turn someone away who would meet the criteria and is a member of a protected class you might get yourself a discrimination complaint.

Protected classes: (there are federal protected classes and state laws. In Wisconsin: race, color, national origin, religion, sex (including pregnancy, childbirth, and related medical conditions), disability: physical or mental, age (40 and older), genetic information, marital status, sexual orientation (includes having a history of or being identified with a preference), arrest or conviction record, military service, off-duty use of lawful product. --- Milwaukee also adds on top of that: source of Income.)

Great question, does not get asked enough! We usually require credit score of 550 or better and household NET income three times the rent. However there is some room for interpretation on both. On credit score we look more for a pattern of responsibility - for example, do they pay WeEnergies like clockwork, but their credit got dinged by medical bills? Reliability and responsibility is what we are looking for. I like people that are picky about the house. It tells me that it matters to them. So the more they complain about some things not being perfect the better I like them. Flipside - if someone barely takes a look at every room and just wants to fill out an application: run, they will not care for the house. We usually run credit only on the stronger breadwinner. If thats shaky we run the other one too. 

On income, the point is to make sure that there is enough money after expenses for paying rent. Most tenants live paycheck to paycheck. If they get paid a day late, I will know about it. Even if they make good money, most will manage to spend all of it and live without reserves. But if they have anough income they can absorb financial issues by spending less and will recover quickly. Most will meet the 3x requirement, only very few are over 4x. Teachers, policemen and bank tellers usually make less then 3k net a month, so they will need a second income to get to $4500 net for a 3x of $1500 rent - and they would all make perfect tenants.

The 3x rule is also very rough, because a single person with only one car will be financially much more stable than a family with 3 cars and 2 kids to feed - they have much higher living expenses. So it's important to speak with them and make sure they are financially comfortable with the rent and not over extended. How much do they spend at their current home?  

Aside of current income we look for job security. Does have someone a professional career and has been in that role for a long time or do they have various jobs and chnage every 6 months? If someone is hard working and has a career I am not too worried about them loosing a job, they will quickly find a new one.

@Taylor Chiu Marine Credit Union, Town Bank, Commerce State Bank, Partnership Bank,..

@Whitney Hill - Applying rent towards the purchase price conflicts with the Dodd Frank Consumer Protection Act, but that does not apply to the option fee. (Unless you have some state laws in the way... I am always a bit skeptical with attorneys and real estate, many don't do enough work in real estate to be familiar with all the little details.) However, even then there is a work around - you may lease (parts of) the property and pay a security deposit, which would be refunded at closing. 

Here is the specific language from the Wisconsin Board approved WB24 Option To Purchase:

@Mike Lauer we still do it, but it's typically a room without a closet - and call it a home office.  If you break it down the cost of a closet is almost as much as the room: it has a door and as far as the drywallers and the finish carpenter installing trim are concerned it has as many walls and corners as a room. As many cut's just less square footage. Remember the old contractor saying - the money is in the corners.

@Jeff Walden one rotten appel spoils the entire bushel. On bad tenant will drive good tenants nuts and run them off. Having two tenants under one roof changes the dynamic a little. You certainly don't have to accept violations of the lease agreement - serve a Notice to Comply or Vacate. If he does not comply he gets evicted, it's very simple and straight forward. And it avoids you having to pick up after him. You are a good person for doing that, but don't let him take advantage of you. By the way I never had problems finding tenants in the winter - there is much less supply which you would have to compete with.