I wonder if any BP-er out there is investing in Des Moines, IA. I am finding fairly positive economic data but have not run across many on these forums who invest there. Just wonder if I am missing anything? Please understand that I am at the beginning of my research on this area, so anyone has any pointers, that would be appreciated.
There are a number of Universities there too, so I would think that apartments are good to invest in?
Hey @Jan H. ,
I am active in Des Moines. I'm quite fond of the market myself. Recently moved here myself. I'd love to chat with you sometime about what I'm seeing in the area. I am in multifamily as well, so we could have a lot to discuss. Any particular product type you are interested in?
Hi @Chase Keller , thanks for the response. I am looking to invest in apartments and rolling my 'dead equity' in something larger (apartments). Happy to chat!
Agree with Chase. Des Moines may be a smaller market but it is well managed and growing. It is considered one of the hot spots for young professionals and has worked hard to develop a diversified economic base. There is a lot of new A-class apartment building happening (maybe too much). Like everywhere, valuations have risen and cap rates compressed.
Yes! Everything I own is DM & suburbs.
Des Moines is a very good investment spot both passive and actively. But I agree with
@Chris Fleming that the market is slowly becoming saturated with commercial multi family. This is happening in some of the surrounding area as well.
@Jan H. What's up man! I am actually born and raised in DSM, and currently own and manage just over 200 units throughout the city. It is a great market to invest in for both SFR and multi family, although out of state investors have been pushing prices up on multi family more than SFR. We used to be able to buy 8-10 cap apartment buildings, but over the past 12 months a lot of money from both coasts have started to uncover what you are, and the prices on multi family is closer to 6.5-7.5 currently. Still better than anything you can probably find in California. I think the most value in DSM currently, if you can find the right PM, is in SFR. We are buying SFR for around 50k per property and renting for around 1k. One thing to note is that property taxes are much higher, and the city enforces rental inspections more than any other market I am aware of.
Having owned 100 unit rental portfolio's previously in numerous states, I think that DSM, and suburbs have incredible upside, but the key is management. Labor costs are 20-30% higher than my core market in Denver, which was very surprising to me, which makes finding a PM that has in house maintenance, electrical, plumbing, HVAC very valuable.
I hope this helps answer some of your initial questions, if you have anything more specific, feel free to inbox me and I will help in anyway I can.
Have clients who own apartment complexes Des Moines that I am familiar with and one under contract right now. It is a good market.
@Jan H. I’m working on a project there. It’s not explosive growth like dallas or the rest of the Texas triangle but you have a billion of other investors hunting for deals.
Hi everyone, I'm also looking into investing in Des Moines. I went to college near DSM a few years ago. I am looking at SFR but multi-family apartments also sound really interesting. I just don't know much about multi-family yet. How does it work? Do I buy a few apartments from the developer or do I need to buy the whole building with multiple units?
I would like to connect with anyone to learn more about the market and the people to point in the right direction. I'm new to this and being out-of-state so looking to learn from the experience.
I been spending time researching Des Moines and I really like what I see, although their isn't much for what I am looking for. We are wanting to get 2-4 units, which is smaller but seems hard to find. I am online daily looking for properties. Would love to connect with others that know that market better and watch for deals and hoping to get something in the next month or two.
Nah, Des Moines is a terrible market to invest in. You'd hate it here. ;-)
Just a couple thoughts RE: Universities. The universities here are small. It's definitely not a college town by any means. DMU is the closest to a campus environment, but it's small and it will be relocating to West Des Moines soon so I'm not sure what that means for those apartments...
Maybe Ames is worth a look if you are actually looking for college rentals. It's a nearby market with many of the same characteristics of the DSM market, but definitely bolstered by a strong state school economy. (EDIT sorry for tagging on to a zombie thread...)
@Terrance Doyle is correct. All of our purchases have been pocket listings and typically value add is the only way we have been able to see good CAPs and COC returns.
We own several apartment buildings in DSM but the problem in the market is that labor for PM is inefficient, inexperienced, and expensive. We actually spun out our PM work to be public facing and we're able to provide repairs to other owners at a much better price and with a much faster turn around than most other companies that are looking more a SFR remodels. We don't do full PM for other people's rentals (no leasing) but because of volume (4 FT techs) we're able to lower own costs and help other owners.
I'm curious about people investing in DSM from other markets that aren't using a full service PM company like Renter's Warehouse. Are you able to get good returns with them or have you found solutions to the frequency and specificity of rental inspection repair requests?
@Cherian Koshy thanks for making a very informative post. I like you experienced a lot of pain trying to find experienced and efficient property manager's in Des Moines, so we ended up starting our own full service PM to handle our portfolio needs. We are not currently offering PM services to other land lords in the market, but I think that the market is ripe to disrupt this space as there are very few seasoned operators that are set up for out of state investor's to actually hit pro forma rents and expenses. Good work setting up your own service tailor made to fit your specific needs.
@Susie Lowe it is difficult to find real opportunities unless you have boots on the ground or a close relationship with a commercial broker or wholesaler. If you would like some help getting to know some good people on the ground feel free to shoot me an email and I am more than happy to get you connected with some good folks.
Hello everyone I'm not located in Des Moines the city but Des Moines the County. It's smaller than Des Moines the city but there's deals here. I've lived here my whole life so I know the market well, a majority of the properties are fixer uppers. There's also a lot of landlords who don't take care of their tentans and properties in this market but continue to raise rents. If your somebody who's looking for cheap fixer uppers and will take care of your tentans then this small market is for you! I'm new to investing so I'm using wholesaling as a way to build my cash so that I can buy and hold properties in the market myself.
Hey Good Morning, All. My wife and I lived in DSM for a couple years while traveling for a commercial construction company. We fell in love with DSM while living in the South of Grand and West DSM areas, but ultimately had to return back to the east coast last year. I know this thread is a bit older, but wondering if anyone is still finding success in Iowa and would be willing to connect for some advice in the long distance SFH rental market.
@Andrew Peeler I am in the same boat. I live in Minnesota but from what I have seen DSM area is a good place for rentals. Only issue I see (I am huge into data for my day job so I run numbers on cities on a regular basis) is that there has been population decrease in last 5 years. But other than that it seems like a decent market to get into.
@Andrew Peeler I'd also be interested in talking shop about DSM and long distance investing in SFH. I'm new to investing so unfortunately can't provide much advice on the area but have been out there a number of times over the last couple of years to visit friends and like you, really love the area.
@Toby Khan can I ask what your favorite sources are on population data?