Al’s experience in real estate is long and wide – his father was a contractor and concrete trainer, he’s been involved in traditional and creative real estate deal making (rehabs, wholesale, sub-2, land contracts).
At the moment, Al’s modus operandi of choice is Turn Key Rentals & Rehabbing Remotely.
He lives in Milwaukee WI and runs a rehabbing operation in Flint MI. Even more specifically, he specializes in rehabbing turnkey rentals, which he sells as great deals to passive cash flow investors.
How I Select My Remote Opportunity Market – 7 Factors
For those who want to buy and hold for long term cash flow, versus a more traditional fix and flip I’ll cover my 7 factors that I believe every remote needs to consider when choosing Milwaukee Wisconsin.
Factor 1: Signs of Recovery
Now what exactly do I mean by “economic recovery?” Well, it’s those areas that are already starting to see things turn around. There are new jobs cropping up, people are buying houses again, and people have some stable jobs to support paying rent or a mortgage – and you might actually be seeing new houses starting to be built again. In Milwaukee on every block where there is a boarded up house we are beginning to see developers rehabbing properties.
Factor 2: More Than One Economic Driver
Now, these signs of recovery are heavily influenced by several economic drivers. What you want to do when researching markets is to find out what industry is supporting the signs of recovery?
There are five primary market drivers that I look at when I consider a market as a viable remote opportunity.
The 5 Primary Economic Market Drivers are:
So when choosing a new market to plunge yourself into, even if one or even two bottoms out, you want to make sure it won’t destroy your market overnight.
“Don’t put all your eggs in one basket.” You’d never want to base your remote rehab decision one economic market driver alone. Milwaukee Wisconsin is a renter’s market, no matter the factor renters are always available driven by Government, Construction, Healthcare, Casino, Manufacturing, Trade.
Factor 3: My 30% Driver Rule
Now that you’ve found a market that is either showing signs of economic recovery and/or has more than one of my five key economic drivers you still have to remember my 30% driver rule.
Make sure one market driver has no more than 30% impact on a market.
Why? Do not enter into a market with only one of my five primary economic driver, likewise, do not enter into a market where one economic driver has more than 30% impact on a market.
Doing your market drivers research
Google Search! OR bestplaces.net
Type “economic drivers” + “the city name” or “Top 10” + “the city name” of the area you are looking to possibly start rehabbing in. The results usually give an idea if the city is a good fit for your remote rehabbing efforts.
A Word of Caution
Be cautious about economic data from biased companies and websites. Take the information with a grain of salt (these sites and companies likely have a huge reason for making bold statements around economic drivers and recovery in their local area).
You want to make sure you are getting your data and information from unbiased sources like the Department of Commerce in the local area.
Factor 4: Infrastructure Improving
Is the local government putting money into infrastructure improvements? Are they building or planning to build roads, public transit or have redevelopment efforts under way or planned?
Factor 5: Quality of Life Improving
Is local government supporting and building parks, theaters, shopping centers, etc.
People want to live in or relocate to areas where there are nice amenities and the local government makes an effort to improve the quality of life of all their citizens. This means you have more people wanting to move into your rehab projects.
Basically you want to be in areas where the local government is drawing in more population. More population = more renters.
Factor 6: Affordability
Is the market affordable for renters? Can the average person afford the rent you need to get on the property to make it positive cash flow for you or for your investor buyer?
If the rental rate is higher than what the average person can spend on their cost of living then your property is likely to sit vacant causing a negative cash flow.
If people are finding it hard to make ends meet because the cost of living is too high in an area then they will eventually move to other areas that have positive economic trends and lower cost of living.
Factor 7: Inventory
In Milwaukee Wisconsin the inventory is abundant. You’d get a solid rental here with positive cash flow every month. Your strategy should be “buy and hold” (for a minimum of 24 months) while collecting rent for cash flow. Properties are available for under 30K and can be sold as positive performing turn key for up to 40K.
Side Note: My Model vs. Others
Our remote rehabbing business differs from the fix and flip model. The criteria outlined have has to do with the long-term quality of the market, which is especially important when rehabbing rentals.
When rehabbing to retail flip you could more realistically play around in markets with fewer economic drivers, or ride the wave (in the short run) of one big economic driver that’s really fueling a market in fast forward.
Our model is to rehab while a tenant is already in the property, then flip turnkey rentals to investors who are holding them for the long term. Because of this, the long term market conditions are more of a factor than in the case of rehabbing for resale to a retail buyer.
If you’re just fixing a house to do a flip, pretty much any market will work so long as you know what the end value is going to be. And this is actually one of the toughest parts about the market today, isn’t it?
What You Need to Do to Start Rocking A Remote Rehabbing Business
Are you ready to take on a new market? Never done a deal or only a few in your own backyard? Contact me for more information about the Milwaukee opportunities. 414 856 5599