(Transcription Below)

Today we’re going to go into the nuts and bolts, and we are going to talk about the different types of duplexes that you are going to find in Milwaukee.

Today we’re talking about the different types of duplexes, and it’s important for you to know the main categories, because they all come with their individual set of attributes, pros and cons. By knowing the differences, you can make a strategic decision based on your personal preferences and finding out which one is the right one for you.

It may surprise you that house hacking is actually not a modern invention. People have been house hacking in Milwaukee for well over 100, 150 years.

In order for you to understand a little bit better the different types of duplexes that we have in Milwaukee, I would like to take you back in time quickly and give you a short overview about the history of duplexes in Milwaukee. So in order to better understand why and how Milwaukee ended up with the most duplexes of any city in the Midwest, that also includes Chicago, we have to go back in time and look at the history.

So it comes down to basically three things, and that is transportation, power generation, and people. So transportation, back in the 1800s, was mostly on the water. People would start settlements everywhere where a big and deep river would go into one of the lakes. Why would a big river’s important? For two reasons, because you can take your boat when there was a storm and bring it up the river, so it had safe harbor while there was a storm raging out on the lake. That was before breakwaters were built.

Secondly, you could also dam up the river and use it for power generation, to power your saw mills and your grain mills and other industries. So these trading points developed a good economy and brought in more people, so these developments started growing.  Milwaukee had a strategic advantage over Chicago at the time. They were both about the same size, but Milwaukee was located more centrally on the lake, and Chicago was more in a dead end of the lake.

That all changed when the first railroad was built from the East Coast to Chicago. Then, of course, with transportation, Chicago took over and rapidly grew faster than Milwaukee. But, Milwaukee kept on growing, and being strategically located more in the center of the lake, it became a natural trading point for a lot of agricultural products. Milwaukee had the biggest grain exchange at the time, but also other agricultural products like dairy, meat, sausages, leather, were a big industry. And of course, Milwaukee developed a beer brewing industry around those days.

So, the growing economy started bringing in more and more immigrants, most of them from Europe, and many of them were from Germany and from Poland. The Germans and the Polish were very hard working, but they were also very practical thinking, and they became the first house hackers. So, they really invented the duplex and they really invented house hacking in Milwaukee as a way of not only having a home for the family, but also to generate an additional income for their own economic progress.

House hacking worked so well for these hardworking immigrants, that in the early 1900s, so between 1900 and 1918, almost 60% of all new construction in Milwaukee was two family units. Looking back at the early 1900s, we really have two different types of duplexes that were developed. Those were the Polish flats and the German style duplexes. The idea was the same but the implementation, of course, was influenced by the cultural background of both the Polish and the Germans. The Polish settled mostly on the south side of Milwaukee, so in the area that is today the Lincoln Village east of Bay View and the Historic Mitchell Street District.

There was also Jones Island, which was basically a fishing village on the lake shore of Lake Michigan. The Polish flat, as they called it, was generally a single family home that got raised, and had a brick or a block basement underneath it. Then, they would move into the lower and rent the upper more valuable space for income. Unfortunately, from today’s point of view and for the purpose of house hacking, the Polish flats come with a number of disadvantages. Because they were using the basement for living space, you don’t have enough room for mechanicals and for heating equipment. The ceilings are rather low; you usually have small and tiny windows, and many of these old Polish flats also have basement and foundation problems.

Another big part of the Milwaukee population back in the early 1900s were the Germans. They made up about 25%, and they liked to settle more on the north side of Milwaukee and along the river, which is where today we find most of the German style duplexes. They were usually built larger and with more architectural details. Also the German style duplexes follow the different concept than the Polish flats. They usually had a dedicated basement space for the mechanicals, followed by two main living units, and an attic for additional storage.

On a German style duplex, the owner would traditionally reside on the first floor on the main floor. The second floor would traditionally be rented out. And this could happen one of two ways, either they would rent out the entire unit with two or three bedrooms, or they would rent out the unit and separate out one of the bedrooms. The interesting thing is you can still see this today, because as you walk up the stairs to the second floor, you usually encounter two front doors. One of them is leading into the unit and one of them is a separate entrance to the front bedroom, which was rented out separately at the time.

We’ll talk about the characteristics of duplexes some more in just a minute, but first let’s move on in our timeline. The economy started slowing down in the 1920s, and of course, in the 1930s, we started hitting The Great Recession, followed by World War II in the late ’30s, which lasted until 1945. If you would look at an aerial map of Milwaukee around that timeframe, you would see that big areas that we consider city today would have been agricultural farmland back then.

So if you look at big parts of Wauwatosa, for example, or where Mayfair Mall is today, or at Glendale or Brown Deer, all of that was just farmland and completely undeveloped. But that was about to change because after World War II, we were ready for another economic cycle, and a huge boom started in the 1950s.

Something else happened in the 1950s. Automobiles became widely available, and that opened the door for the suburbanization of Milwaukee. So we saw a huge development in Milwaukee again, a huge growth spurt in the 1950s and in the 1960s, with a lot of single families and a lot of duplexes built in the suburbs of Milwaukee. These duplexes were built very different; they were lacking architectural detail, but they were built for size and for speed. They were built to be very efficient and very economical.

Today, we take the mobility that comes from owning a car for granted. But I think it’s remarkable that back in the ’60s, it was a change in transportation, which was the widespread introduction of an automobile to the general population, which led to the suburbanization of the city. So by the end of the 1960s, that growth spurt came to an end, and the city had reached approximately the same footprint as we have today. It left us with a total population of about 66,000 duplexes in Milwaukee County.

Now as of last year, 2020, we have sold about 1,600, which is a turnover rate of only about 2.4%. So that’s about a quarter of the speed that we see, typically, single family homes turn over. And I think that by itself is speaking volumes about the benefits that duplexes have for their owners.

All right, this concludes our little Milwaukee history session. Now let’s talk a little bit more about nuts and bolts, and about the specific pros and cons that these individual types of duplexes have for a modern day house hack. So first, let’s take a look about on the classic 1920s Milwaukee duplex. The first thing you notice when you pull up to one of these buildings that they were very large, they were very stately looking with a ton of curb appeal, a lot of architectural details on the outside. And of course, that comes also with the cost, because you have a lot of different materials, different textures on the outside. So if you’re remodeling them, that is going to be a little bit more expensive.

The other thing that you can see right away from the outside is that you typically have a very wide front porch and typically two front doors, one leads into the main unit and the other one leads into a wide staircase going up to the second floor unit. Now, when you go inside, you see that the ceilings are relatively tall, the living room and the grand room and the dining room are relatively big. The bedrooms are usually a little bit more on the smaller side. You see a lot of really nice woodwork on the inside. You see hardwood floors, usually oak, sometimes maple in the older ones, and very nice built-ins as well.

As far as the room configuration, they came in two bedroom or three bedroom configuration. Typically, the upper and the lower were about the same, but usually only with one bathroom per level. So it’s very rare that you find one with a bath-and-a-half. That’s one of the downsides. The other thing is that they also came with smaller bedrooms and usually limited closet and storage space. People just didn’t have that many clothes back then, I guess, in the 1920s, so they were able to get by with smaller closets.

Most of these duplexes were built by very, very skilled tradespeople. They knew what they were doing, and they took the necessary time to really put their houses together in a quality way that will stand the test of time. Now, when you walk up to these duplexes, you notice that they usually sit a little bit higher over the street. That was necessary to achieve natural drainage because electric sump pumps were not around at the time.

The basement was usually hand dug. The basement walls were made either from brick or from block. I would say from today’s point of view, block is preferable, because brick tends to get brittle over time and it’s also a little bit sensitive to moisture, so it needs some repairs and some upkeeping once in a while. The structure itself was then framed up with very high quality timber. So the trees that they were using back then were slow grown and naturally dried over a summer, which results in a very dense and very hard wood. They really took the time to put it together properly. So usually the bones of the buildings are still in excellent shape today.

When you compare it with the lumber that we use today, which is fast grown and then kiln dried, it’s a much different quality. I think that’s the reason why these buildings are still in such good shape after more than a hundred years.

Then the interior was finished with what we call lath and plaster. This was before the introduction of drywall. And the way they finished interior walls was they would build up the walls with very thin wood strips with lath and then cover it with plaster. So that’s a cement concrete mix that gets pushed through these little wood strips and forms a key on the back side. So it really grabs onto the wood strips and then gets troweled smooth from the outside.

So this was used for the ceilings. This was used for walls. And it takes really some skill and some care to apply plaster in the right way and to make a surface really look good. The problem with plaster is that it tends to crack over time, because the wood behind it is moving, it’s shrinking and expanding throughout the seasons. And of course the plaster cannot always accommodate these movements, and then it develops cracks. You see those cracks in the ceiling. That’s oftentimes the reason why they are covering the ceilings with acoustic tile or something similar. You also see the cracks in the walls and they usually get painted over.

Lath and plaster is a beautiful material, but it’s a little bit of a pain in the neck when you have to remodel the house and you put, let’s say, new electrical and new plumbing in the wall. It’s not as easy as patching drywall. And you need somebody who is skilled to work with lath and plaster and put that stuff together in the right and the traditional way.

Heating was usually achieved by means of radiant heat. So when you walk through the building, you see these cast iron radiators in every room. They are filled with hot water, which gets produced by a boiler in the basement. Of course, the fuel type has changed over the last hundred years. So it used to be solid fuel and coal and wood, then it was oil, and today it’s mostly natural gas.

So it’s a very nice and pleasant form of heating, because you’re not blowing dry hot air around, which dries out the building and dries out your skin. So it’s very pleasant. It’s very efficient. But it has one big downside. You cannot cool the house. So for air conditioning, you have to use a window unit or a portable unit.

Let’s talk a little bit about the electric system. Most of the time, it has already been upgraded to a more modern service panel with electric breakers. Once in a while, we still discover these old style fuses that need to be replaced or even some knob and tube wiring. And that, of course, can be a pain because you have to go inside all the walls. And as you’ve already heard, they are made with lath and plaster. On the outside, you should usually see two service meters from We Energies. And then on the inside, you have two separate service panels, one for each unit, so one serving the upper, one serving the lower unit.

Plumbing is usually very straightforward, because you have only one kitchen and one bathroom, and they’re right on top of each other. So all the plumbing lines go up in one cavity inside the walls, and you have very limited plumbing in those buildings. But as far as the plumbing materials, we usually encounter a broad mix of the original cast iron, some galvanized pipes, maybe some upgrades to copper or even modern upgrades to PVC and to PEX lines.

In terms of water supply, you have one water line coming in from the street, which goes through the water hole and the city’s water meter, which is where they’re measuring how much water you’re consuming. And then it splits off and services both units. So for a duplex, you have two electric bills, but you will only get one water and one sewer bill, which is for the entire building.

In summary, I think we can say that these 1920s style duplexes are usually beautiful buildings with tons of charm and curb appeal, very well-built and totally worth restoring. But, they come with one downside, because everything was custom built and onsite, and with old materials, the cost of remodeling and restoring things is usually a little bit higher.

All right, next up, the 1960s style duplex, very easy to spot because they have the curb appeal of a shoe box, a very efficient, very plain design, but with the big advantage, they’re easy to work on and very cost effective to maintain. As we have discussed earlier, they were built in the 1960s, so that was the rise of the automobile and the suburbanization of Milwaukee. So you will find almost always plenty of off-street parking and a garage in the backyard, because that was really a hallmark of these buildings.

That is sometimes an issue of these old 1920s duplexes, where you don’t always have off-street parking and you don’t always have a parking garage that comes with the building. So that’s definitely a pro for the 1960s buildings. They come in two different configurations. The upper/lower is the most common configuration. Usually you have, as well, two front doors with the staircase leading to the upper unit. And that is important because here you can transport furniture, a king size mattress or a sectional couch, you can easily transport upstairs for the upper unit as well.

The other configuration that you see once in a while is a side-by-side configuration. That is more rare. But the side-by-side has a huge advantage because it offers more privacy, because you do not have your neighbor on top of you, so you have more privacy. You don’t hear the footsteps from somebody running around upstairs.

When we look at the interior configuration, and regardless if we’re talking about the upper/lower or the side-by-side, they’re usually built in a two bedroom or three bedroom configuration per unit. But what is really nice that while you have a minimum of one bathroom, many of them were built either with a bath-and-a-half or sometimes even with two bathrooms. So that is a major differentiator to the old 1920s, where you always only have one bathroom per unit.

The other big difference that you see is that the bedrooms have become now bigger, because people have started actually spending more times in their bedrooms, and you have substantially more closet space. The interior architecture also started opening up a little bit more in these mid-century buildings. So you usually have a little bit of an open concept going on between kitchen and living room. They’re more connected than they used to be back in the old 1920s style duplexes.

The interior is usually very plain and very sparse, again, very easy, low cost, efficient to maintain. The walls are made from drywall and two-by-fours. So it’s relatively easy to do upgrades and repairs because you can just patch a piece of drywall and put it right in. All the doors and the windows are not custom-made anymore. They’re all standard sizes. So you can go to Home Depot and Menards and just pick up a door and it will fit right in. So that’s a major benefit.

Also, when you look at mechanicals, basements were built from cinder block mostly, with the steel I-beam running down in the middle. You have now sump pumps instead of natural dewaterization of the basement and the foundation. You have an electric sump pump that is taking the water out of the basement, so that’s a major differentiator. And then in terms of heating, you usually have two forced air units, and oftentimes also with the air conditioners on the outside. So all in all, a lot more modern, but also not as much curb appeal, not as pretty to look at from the outside, but a lot more efficient and a lot easier to run and to maintain.

The third major type of duplex that we absolutely need to discuss here, because we have so many of them in Milwaukee, is what I personally call a one-and-a-half-plex. Now this is not an official designation. This is just what I call them. But I think it gets the story across quite efficiently, because those are single family homes that at some point in time have been converted into a two family. So they just took a single family and separated out a second unit, usually for the upstairs.

Now, the first thing that you notice when you look at the address, you will see that there is no two street numbers. It’s usually only one street number. Or sometimes you have one street number with the letter A designation at the end of it. So the tenant who is living upstairs got its own mailbox with a letter A designation at the end.

So access to the upstairs unit is usually through the back staircase, which unfortunately, oftentimes, is very narrow and makes it very difficult, sometimes impossible, to get large pieces of furniture, like a king size mattress or a sectional couch to the upstairs unit. The upstairs unit itself, then, is usually also smaller. So you have less square footage because you’re already confined by the angles of the roof.

Many times you see these slanted ceilings. The kitchen is sometimes a little bit smaller, improvised, I would like to say. So overall, the upstairs unit always provides a much smaller footprint and will bring in, if you use it for a house hack, also a lot less rent than the lower unit.

Now, there’s different ways you can play this, not all disadvantages, because you can either live in the smaller upstairs unit, basically in the spirit of the old Polish flat. You live in the smaller unit and you rent out the nicer, bigger downstairs unit for income. Or if you spin it the other way around and you live in the lower, you will have usually a very limited amount of people living upstairs. Typically, you have a single person or maybe a couple living upstairs.

So with having a smaller family living upstairs, you’ll also have a lot less noise and traffic and people around. And even though the rental income is lower, that might be an advantage to consider. So it depends a little bit how you want to look at it. But you have to understand that a single family converted into a duplex feels and lives very differently than a building that was designed by an architect to be a two family house.

All right, there you have it. Those are the most common types of duplexes that you will find in the Milwaukee market. And just in case, if you were wondering, there is not really one single best type of duplex for house hacking. They all have their own advantages and disadvantages, the pros and cons, and it really comes down to your budget, to your preference in location, and to your personal preferences on how you want to live, quite frankly.

I hope you got good value out of this video. If you did, then please give it a thumbs up. And if you have any questions or comments, please post them right below here. I usually try to respond to comments within 24 hours. And of course, you can also send me a personal email. So that’s all I had for you today. Stay tuned for the next chapter. We are going to talk about everything you need to know about landlording and managing your tenant in a house hack situation. So thank you very much for watching and I’ll see you next time.


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