How did I get to Milwaukee?
# Entrepreneur of the Week Lilach Regev # Post2
The beginning of our path in US real estate was actually in Memphis, where we burned (or spent?) there (virtually of course) for about a month and a half.
After researching Memphis, we created this map with layers by regions - a, b, c (based on the Niche site), for those interested: https://www.google.com/…/data=!3m1!4b1!4m2! 6m1…
I contacted a broker I talked to every day and really invested a lot of time and energy in us, we submitted 50 offers from them on 2 contracts, one of them was a serious shithole (sorry for the phrase) and the other was actually a really cool rent that we even infected and had to yield 9.3% But at the same time we were very much debating whether we wanted to move area.
The first choice in Memphis was arbitrary for us, because we like to sit behind the wheel in making our decisions, we decided to do a market review according to the criteria we are looking for.
Memphis was (and still is) very hot at the time - the whole US has gone up a lot in recent years but Memphis is particularly specific - as a result it is much harder to enter the market because it is very competitive, prices are high and yields are low. .
It's important for me to say in this context that I'm not saying that Memphis is a bad market but it just did not suit us, and I'm not sorry for a single minute that we 'wasted time there' because we really learned a lot!
We started researching markets in order to find a market and settle in it, so a few points regarding market selection (and Milwaukee market analysis):
Positive migration: The first parameter we want to examine is positive migration but it is important to note that looking is more on a trend, i.e. if the migration is negative with a positive trend it meets the requirement. Over the last few years Milwaukee has been characterized by positive immigration, among other things many Germans like to immigrate to it because it is a city with roots of German culture, every year the big beer festival is celebrated there (https://germanfest.com/).
Low unemployment rate: Ultimately we want people to be able to pay rent. As of November-December the unemployment rate in Milwaukee is 2.7% -3%. (https://fred.stlouisfed.org/series/WIMILW5URN)
Industry diversity: that is, an area that is not based on just one industry, because if this industry falls for any reason, unemployment in the area will rise sharply at once. Milwaukee is home to large and diverse companies including: Harley-Davidson, Jockey International, Kohl's Department Stores, Master Lock, Miller Brewing Company, ManpowerGroup, Northwestern Mutual, and GE Healthcare
Median rent ratio compared to median property price ratio: the higher the rent relative to property prices, the higher the return. Despite the significant price increases it has experienced recently, Milwaukee can still be found in a relatively high rental ratio to purchase prices.
Laws: Some states are in favor of the landlord and states are in favor of the tenant; In terms of whether the property owner is allowed to perform an eviction for a tenant who does not pay or how long such a process can take. This is a very important point because in cities that are not friendly it can take half a year and in Milwaukee this time is significantly shortened.
The amount of Active listings: Basically the inventory that the same local market has to offer. Inventory can also come in the form of an entry price and this is something that should also be taken into account, entry prices in some countries are very high. Milwaukee sees a stabilization in 2021 of the amount of active listings.
Types of products in the market? For example in Memphis there are very few duplexes however in Milwaukee there is a very large supply of small multi (2-4 doors), in this we focus our activities.
It is important for me to say that there is no one right truth, the United States is huge and it is possible to succeed in many markets and within them there are many micro markets and neighborhoods. There are also lots of possible strategies and accordingly it is very individual, each according to his goals and what he is looking for, what suits me does not necessarily suit someone else.
For those who are looking to enter entrepreneurship or the investment world in the US, I would recommend choosing a market, focusing on it and getting to know it well (we know better what is happening with the corona virus in Milwaukee than in Israel?, because we read the local news there from the cafe here?: https:/ /urbanmilwaukee.com/) Unless your investment is completely passive through an entrepreneur then it doesn't really matter and risks can be spread.
In the picture are the NBA champions in 2021 the Milwaukee Bucks (can you guess who worked on this part of the post?).
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