Anyone investing in Des Moines, IA?

8 Replies

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 Halasz ,
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.

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 Halasz 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.

Best,

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 Halasz 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.

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