Milwaukee will host a home ownership fair Saturday. The goal is to unload many of the foreclosed properties both banks and the city own. City Hall estimates there to be 4,000 such houses. WUWM’s LaToya Dennis learned of potential buyers who view foreclosures as a great business opportunity.
At the height of the housing bubble a few years back, it would have been rare to come across a decent house for $50,000 or $60,000. Michael Baron says times have changed.
“This house on 55th Street, we picked up for $34,000. We’ll probably put $20,000 into it so we’ll be out about $55,000. An investor will buy it from us for probably $65,000,” Baron says.
Baron says just a few years ago, this house sold for around $130,000. Baron is a manager at Cornerstone Properties in Wauwatosa. He buys and rehabs homes to sell to investors, but also keeps a few for himself. He already has a renter lined up for this three bedroom, one-and-a-half bath home, and expects it to be move-in ready in about two weeks.
“We ended up tearing off the roof, doing a new roof. The landscaping was all overgrown,” Baron says.
Baron says some businesspeople may view real estate as a risky industry - considering the bottom fell out in 2008, following the wholesale collapse of risky mortgages. Yet he says the fallout from the crash is making this a prime market for people like him.
“The reason being is because the market is so valuable or so reasonable right now that the investors are crawling out of the woodworks right now to buy homes,” Baron says.
Baron says, these days, qualifying for a mortgage typically means having 20 percent down, a good credit score and a solid work history. He says banks prefer investors because they usually don’t need mortgages; they pay cash.
Some neighbors also welcome investors, according to John Protiva. He’s a real estate agent for Century 21. Protiva says when houses sit vacant too long, they can become targets for thieves and vandals.
“I had a big house in Menomonee Falls where they took a stainless steel side by side Sub-Zero freezer and fridge probably worth $5,000 or $6,000. They steal leaded glass, just about anything you can imagine gets stolen. And then we also have people who break in just for the fun of it,” Protiva says.
While Protiva has heard about big out-of-state investment groups buying up hundreds and even thousands of homes, he says that has not been happening much in Milwaukee.
“A lot of it is just individuals, they buy one or two at a time, they improve the property and they’ll either put a tenant in or they’ll resell it and make a middleman profit,” Protiva says.
No matter the size of the company, Milwaukee is seeking responsible investors. Maria Prioletta is the city’s Manager of Redevelopment and Special Projects.
“We screen our applicants to make sure that they have a history of paying their taxes, they don’t have a negative history with the Department of Neighborhood Services or building code violations or they don’t have any activity that would be detrimental to a neighborhood,” Prioletta says.
Prioletta says the city’s goal is to help stabilize neighborhoods. She says the good news is that the number of foreclosed properties here dropped 14 percent last year. However, the city is still seeking new owners for the 4,000 vacant properties that remain, and potentially for the 6,000 others that are in the process of foreclosure. The home ownership fair will run from 8:00 a.m. until noon at the Italian Conference Center in the Third Ward.