What it’s really like to invest in Des Moines, IA

This week, we’re heading to Des Moines, IA.

Average home price: $203,387 (up 1.1% YoY)
Homes that sell over list price: 19.2%
Homes that sell under list price: 62.3%
Average rent: $1,100

Lay of the land: Des Moines may be affordable, but high interest rates have made the market a tougher nut to crack. “The real estate investor market has been tough,” says Mitch Coluzzi of SoldFast Des Moines. “Many folks got used to lipstick remodels, where you paint and carpet for a profit. They’re not used to larger projects where you can add deep value through improvement. The difficulty is buying the project at a profitable gap because so many people overpay for marginal houses.”

His advice: Look for deals through estate sales. That’s how Coluzzi recently purchased a two-bedroom, one-bathroom home for $80,000. “The owner passed away, and it was in pretty rough condition and had not been maintained,” he recalls. After pouring $24,000 into renovations, he listed it for $164,900, which, he says, breaks down to monthly payments “around the same rate as rent for a similar unit,” making this a win-win for both buyer and seller.

PS: With estate sales, Coluzzi often invites the sellers to see how the house turned out. “We had the sellers come walk back through after updates,” he says. “Since some people find healing in that opportunity.”

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