Hi BP community!
I'm doing some DD on a 37 unit apartment building in Sioux city and wanted to see if anyone could share their thoughts/experience investing in this area. The neighborhood is class C from what I've seen. It's is located around Jackson and 19th. Thanks!
I live near Sioux City. That’s not a great neighborhood.
@Nate Phillips Thanks for the reply. I was definitely thinking it's going to be a lower income area and challenging for management. It has an NOI that reflects that concern though.
What I’m most concerned about is demand for rentals and it being a “war zone”. From what you’ve observed is it at least an area that people live in? Just wanting to avoid abandoned areas. Thanks!
Like Nate mentioned neighborhood is not great there at all.
Is this the property a few blocks over from that? I am not familiar with one on Jackson and 19th?
@Tyler Aube I’m not sure. I’m thinking it’s Jackson and 18th. Brick 37 unit
I’m certainly not expecting a good neighborhood. More so want a place that’s not an abandoned war zone, or heading in that direction. A class C- neighborhood is perfectly acceptable for the expected cap rate of this deal though
@Nathan H. I use google earth and maps a lot to evaluate areas; and since I am stuck in the house today decided to take deep dive on the corner you mentioned. You ought to do the same and decide whether it warrants a look in person. The neighborhood looks very mixed, old mansions, some being restored, small businesses, older SFR, MF, a bit or everything, crime-yes; looks like an area that might have some potential. All the best!
hi. I live in sioux city and have a couple of rentals off of Jackson in the 29th and 31st block. if it is the building I am thinking of they have done a lot of work to it. Yes the area isnt the best, but it isnt a war zone or deserted. Not the worst of sioux city by far. I would say yes there is a demand for that level of rentals. Let me know if you have any questions or want me to take some photos for you.
Thanks @Bjorn Ahlblad that’s very thoughtful.
@Todd Plummer thank you for that insight, super valuable. I appreciate the offer. That’s probably the same building. I know they’ve done a lot to it and the city tore the adjacent building down, which is good for the other buildings in the area. From what I’ve seen, the building is solid. The more affirmation I’m getting that I’ll have tenant demand, the more excited I get about this deal. They had an occupancy issue at one point, said it was due to poor management, so I’m trying to determine if that’s true, or if there is more to the story. Occupancy is definitely on the up though. This deal makes perfect sense with the assumption vacancy loss will be less than 15%