All Forum Posts by: Jason Bergan

Hi Jose,

Ankeny is building to keep up with incoming demand due to their projected growth. There's a lot of new developments going up in the metro in general, but in Des Moines proper there's just not room, so the established properties won't have quite as much competition in their direct area.

For NW Des Moines, parts of Drake, Beaverdale, Merle Hay, Waveland, and a few others all seem to be coming up.

The greater southside, Somerset, Jordan, Magnolia park, and a few others seem to be doing well. The biggest con with the south side in my opinion is that it took a higher hit on property values during the last recession and hasn't recovered very well in some sub sections, so a bit more risk long term.

Hey Jose,

You bet. Feel free to message me with any questions. As far as rentals go, I really like north west and southwest Des Moines proper for my investors. The suburbs are booming, but that also means a lot of new A class multifamily is going up, and we'll likely see higher vacancies because of that. Ankeny and the western suburbs are also expensive for both single family and multifamily, so cash flow is negative on a lot of the deals I've been seeing, and again you'll be competing against A class properties in the coming years, which is threatening for both rental rates and vacancy. Both nw and sw des moines have a lot of new families and young professionals, so both seem to rent well and stay rented. Small multifamily is easier to find as well as single family homes, all doable below the $200,000 mark.

Hi Matt,

If you're still looking for someone feel free to send me a message. I live in the Beaverdale area so I know that sub-market well.

-Jason Bergan Realtor Century 21 SRE

Hi Jose,

I would do your due diligence up front and make sure a single family home is in a low vacancy area, since it seems like you'd be more comfortable in a single family home. The Des Moines multifamily market is also moving very quickly right now, and prices are inflated, so buying a multifamily may not be the best option either way. My suggestion would be to buy 3 or more bedrooms, and maybe even look into the townhomes on Jack London in Johnston. They're close enough to the Camp Dodge Army base that they rarely sit vacant and they appreciate really well as well. The HOA also takes care of all the exterior items and some of the utilities for a fairly low fee, so that would save you expenses in the long run once it becomes a rental. You may still share a wall with a neighbor but they'd likely be more soundproof than a multifamily.

Hi Matthew,

My clients and I have had good experiences with Renter's Warehouse. Brad and his team are really responsive and cover a large area if you're planning to grow throughout Central Iowa.  Feel free to message me as well if you have a really specific need, want more recommendations, or if you want me to help make an introduction.

Jason Bergan Century 21 SRE 

Make sure to check on if there are any other requirements through the city. In our market if you update the electrical in any way, they require you to update everything in order to get your rental certificate. Something like that would add a much larger cost than just splitting the meters.

Even if there is a recession, there's no good reason to assume that housing is going to take a huge hit like it did last time. Housing doesn't always take a hit in recessions, which is a reason that a lot of people invest in RE. Our estimates for our market are estimating slower appreciation during the next recession, not that properties will be going on sale by any means. Deals are always out there, it's more about finding them regardless of market conditions. 

Look at your specific market and target areas to see what your potential tenants are going to want. You can use the demographic data to see which will be more in demand. If you're looking for cash flow, multifamily is the way to go. Multifamily also is easier to self manage if that's what you're looking for, since more units will be in the same place, one driveway, one roof, etc. If you want to start with single family, vacancy is your biggest risk, so you likely are going to want to grow that more quickly to minimize your risk of vacancy. 

@Daniel Fane I wouldn't suggest breaking into other markets if you're not comfortable with it yet. Investing out of your area takes a lot more trust in your local agents, contractors, etc so unless you have those connections in place, you could end up paying more for small mistakes. My advice was going to be to edit your criteria to better match your market while still making sure you could make a profit. Also, when manufacturing is your main employment industry, make sure that there are multiple manufactures in different sectors, otherwise one company shutting down or moving locations could take away years of hard work. I notice you're a licensed realtor, so you should have access to RPR. The reports you can run will give you a no-nonsense area overview that breaks down what industry people are employed in, as well as what percentage own vs rent. Observations are good, but make sure you're always checking the facts as well. 

Don't use cap rate as a factor in my opinion. We use cap rate to evaluate a property and to get a 10% cap you usually have to buy extremely distressed properties or buy in undesirable areas. For my investors, I show them the average list to sold price in the areas they're looking. You can write offers all day but sellers know what those numbers are as well and are unlikely to accept if they don't see it as close to fair. Don't factor in a management fee unless you're planning to pay yourself for it on your books. These forms and blogs are great, but you still have to take everything with a grain of salt. The Iowa market is still hot right now and in most price points is a seller's market, so not everything works in the marketplace as well as it does on paper. Also keep time value of money in mind, if you go another year without getting into a rental due to your criteria, you're losing all that potential income and experience.