New to BP and curious about multi family rentals in Des Moines

5 Replies

I am new to BP and live in Des Moines ia. A lot of new construction and development entering this area. Looking for advice on whether or not right now is a good time to invest In Multifamily Property. Things I should be researching or looking for in this specific market place. And advice would be much appreciated!

It’s a great time to invest if it meets your criteria! :-) do you have a written criteria that your willing to share?  I’m sure more people can weigh in to your question after knowing this information. 

The new construction are all commanding top dollar rents. 2/2's going for $1,450 and up. Some really high if they have amenities like workout areas and such. Older, in need of cosmetics in Des Moines rentals are about $750-900 for 2/2 and 3/2's. Ankeny rents are going for higher. I get $1,110 for 2/1 and $1,325 for 3/2 duplex. Both upgraded in last several  years, with 1 stall garage. I'd say it all depends on what kind of resources you have. I like the in-between that I own. Not new, not old and "dusty". Plenty of duplexes around $200,000. But they need some TLC. I was just outbid on two duplexes in Ankeny. Thought the people paid too much. Don't see how they cash flow. 1% is what I'm looking for around here, or higher in Des Moines since landlord pays a lot of utilities. Tight margins on buy and holds right now. 

Welcome to BP Logan! Unless you are a large firm that has the opportunity to invest across numerous, uncorrelated assets, investing in real estate is a continuous process. You have to be looking for and buying deals at all points of the cycle. So if you're like me and only invest in real estate then it is always a good time to invest. However, in certain times (like these), I would recommend proceeding with caution rather than aggression. 

As a side note, one of my partners who owns and operates a $500MM portfolio is looking to break into the Des Moines market.. Good luck!!

Thanks @Anthony Wick for that advice! I've been watching MLS duplexes go pretty quickly around the DM area and Ankeny seems to go even faster. Do you see many 3-5 plexes in the area that aren't on the east side? Seems like pretty thin selection anywhere else in town from what I've seen in my initial searches.

@Logan Cunningham Welcome to BP from another newbie!

@John Crouthamel  I've looked at and through numerous 3-6 plexes around the Drake area. As I work a full time job, I've determined those simply needed too much work, or they would need too much attention to self manage. That area is ripe for revitalization in some neighborhoods, but that's not what I'm prepared to do. I'm sticking around the Ankeny area, as opposed to Des Moines. 

I've now formed an LLC with two other partners. We are looking for either a small portfolio to buy from somebody in Ankeny, or maybe one or two 4-6 plexes.

@Brandon Turner was 100% right on his podcasts. Tell anybody and everybody what you're up to, and people and money will come to you. I have two friends that came to me and asked if we could partner on buying a few buy and hold properties. Now, the real work begins...