Anyone investing the Des Moines area?

Question

My daughter is about to start her first year at Drake University. Meanwhile, I am just starting out on this real estate investing journey and while I'd like to invest close to home (I live in Denver), I realize that other parts of the country might be friendlier for cash-flowing multi-family.

Since I will be taking trips to Des Moines a few times a year for at least the next four years, I thought I'd explore investing there. I'm interested in small multifamily. Is anyone her investing in Des Moines? How has your experience been?

Thanks for sharing!

Darson Grantham · Answer

Hey @David Mulholland, for some perspective the Des Moines market is slightly ahead of units sold currently YTD compared to 2021 same time period. The pending sales (properties that are under contract) are down 30%. So we are soon to see headlines that say "Des Moines Market down 30%" but in reality, this number is ONLY units sold, not the average price of properties sold.I own some property near Drake, and many of the rental units in that area are actually not occupied by students in their first year of college. But if you are not necessarily looking to buyer HER a place to live right away, but to find a way to "write off" your travel expenses and stays in Des Moines, I think you'll be surprised at the quality of long term rental market in Des Moines.You will want to pay close attention to the property taxes, as they are higher than most would expect, and also each property will have utilities set up in a different way, sometimes tenants pay, and sometimes landlord pays. You'll want to inquire heavily there.Lastly, pay close attention to the rental inspection certificate of each property. Des Moines is notorious for giving investors a hard time in obtaining/renewing rental certificates and if you don't have one, the city can penalize you heavily. All that being said, 50% of my business is from out-of-state investors, so to fully answer your question, yes people are buying in Des Moines! And if purchased with eyes wide open, most will say it was a good experience.Send me a message and I'm happy to get on a zoom call with you to answer any other questions you may have!

Logan Webb · Answer

Fun fact: Des Moines just hosted a full distance IRONMAN event downtown. If ending up looking for a property in that area, I've seen short term rentals work quite well. I would recommend paying attention to the event schedules for Ironman triathlon events in the area. Could briefly raise rates during this time the athletes come to race :)

Matt McCurdy · Answer

@David Mulholland, I grew up in Grimes, IA, so I know the DM area very well. I have family still in the area, so I lean on them if I have issues. I primarily invest remotely and live about 2 hours away in Cedar Rapids, IA.Same to you!

Colton Hahn · Answer

First off, congrats on your daughter starting college.Secondly, We actually have two commercial multifamily properties out there and really believe in the region. Great value and all indicators point to continued growth

Mike D'Arrigo · Answer

@David Mulholland that's a market that has intrigued me in the past but haven't gotten involved there. Des Moines has solid economic and demographic fundamentals so I think it really comes down to inventory availability and whether the numbers work. There are a lot of markets in the Midwest that can cash flow. We've been active in Indianapolis and Kansas City for about 10 years and more recently in the Quad Cities (Davenport, IA) and select areas around Cleveland. You might want to put them on your radar also. In general, I recommend looking at markets that have growing populations, growing jobs, modern/diverse economies where economic development is taking place.

David Mulholland · Answer

@Chase Keller Thanks for this feedback. I'll send you a DM to connect!

David Mulholland · Answer

@Mike D'Arrigo Thanks for sharing these thoughts! I'll still in the early research phase so I'll give your recommendations some consideration.

David Mulholland · Answer

@Logan Webb Great advice. Thank you!

David Mulholland · Answer

@Matt McCurdy Thanks for the background. Glad to hear your recommendation as I just connected with Darson yesterday! Do you live in the Des Moines area? Or are you investing remotely?Best of luck to you!

Matt McCurdy · Answer

@David Mulholland, I recently sold a duplex in Des Moines and own a few still in Des Moines. Just like any market in the US, Des Moines has seen plenty of appreciation over the past few years. However, Des Moines is a great market that is ripe with more potential and offers good cash flow, as long as you have a good experienced agent helping you. I would recommend Darson, as I've worked with him in the past and he seems to have the pulse on the small (2-4 units) range multi family properties.