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Welcome back to The Wealth Wagon, I hope you are having an amazing week so far! Today we are back to discuss another real estate market, that of Sioux, South Dakota, Enjoy!

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Real Estate Investing

Market Snapshot:

Sioux Falls, South Dakota
Sioux Falls is emerging as a promising real estate market, with the median home price at $324,000, reflecting a 4.8% year-over-year increase. This growth is fueled by steady population increases and a thriving local economy. The city benefits from a low unemployment rate of 2.4%, one of the lowest in the nation, which supports strong housing demand. Active listings have increased slightly, with 850 homes currently on the market, offering more options for buyers. While higher mortgage rates have cooled some activity, Sioux Falls remains a stable market with opportunities for investors focusing on single-family homes and small multifamily properties.

Median Home Price: $324,000
YoY Price Growth: 4.8%
Active Listings: 850

Deal Of The Day:

8-plex near southwest Sioux Falls
Price: $2,400,000
Units: 8 (4-Bed, 3-Bath)
Monthly Rental Income: $13,600
Cap Rate: 7.9%

This 8-plex, located near southwest Sioux Falls, offers an excellent opportunity for both cash flow and appreciation. Each unit shows room for renovation and property appreciation, with rents averaging $1,700 per month. Its proximity to local businesses and universities may show an issue for those looking to be in the city. With a 7.9% cap rate, this property is ideal for investors seeking stable income in a growing market.

Deal Rating: 9/10

This deal not only has a great opportunity to create equity right off the bat with the ability to renovate all of the units to bring them up to date but they also are showing excellent potential for cash flow. The one thing driving it down from a 10/10 is the proximity to a big town, which may make finding renters harder than a property in the city.

Real Estate Tip:

Investment Strategy:

Seller Financing Deals
Seller financing can be a powerful strategy, particularly in high-interest-rate environments. In this approach, the seller acts as the lender, allowing buyers to negotiate favorable terms. For instance, you could negotiate a 5% interest rate for 10 years on a $300,000 property, avoiding traditional mortgage requirements. This strategy benefits both parties, providing the seller with a steady income stream and the buyer with reduced borrowing costs.

Current Interest Rates:

Sioux Falls, South Dakota
30-Year Fixed Residential: 7.2%
15-Year Fixed Residential: 6.5%
Commercial Rates: Starting at 6.8%

Mortgage rates in Sioux Falls have remained steady, with residential rates hovering around 7.2% for 30-year fixed loans. This has created more demand for creative financing solutions like adjustable-rate mortgages and seller financing. Investors are particularly drawn to commercial properties, where rates start at 6.8%, offering potential for higher returns.

How Sioux Falls is Becoming a Real Estate Hub

Sioux Falls is quietly becoming a real estate hub for both residential and commercial investments. The city’s affordability, combined with a steady influx of new residents, makes it an attractive market for both seasoned and first-time investors. Unlike larger cities where competition drives up prices, Sioux Falls offers a balanced market with room for growth.

A key factor in the city’s real estate appeal is its strong job market. Major employers like Sanford Health and Wells Fargo provide stability, while the city’s growing tech scene adds a modern edge. The downtown area is undergoing revitalization, attracting young professionals and increasing demand for high-end rentals.

Commercial real estate is also thriving, with vacancy rates for office spaces dropping to 6%, compared to the national average of 12%. This trend is driven by the city’s business-friendly policies and relatively low operating costs. Investors seeking a mix of stable cash flow and appreciation potential should keep a close eye on Sioux Falls, especially as it continues to expand its infrastructure and amenities.

Economic Conditions

Sioux Falls continues to experience economic growth, bolstered by industries like healthcare, finance, and manufacturing. The city’s GDP grew by 4.1% in the last year, outpacing the national average. Rising wages and low unemployment have supported strong consumer spending, which is fueling demand for both residential and retail real estate. However, inflation, currently at 3.5%, has slightly increased construction costs, making development projects pricier but still feasible due to the city’s high demand.

Market Rating: 7/10

With interest rates so high in this market, it makes it challenging for people to enter this market, although with the high interest rates aside this market shows great upward potential with property prices rising a good amount every year alongside the median rent in the area consistently rising.

Key Takeaways:

• Sioux Falls Market Update: Median home price at $324,000, with a 4.8% YoY growth rate.

• Deal of the Day: A 8-plex generating $13,600/month in rental income with a 7.9% cap rate.

• Tip: Diversify your portfolio to balance cash flow and risk.

• Strategy: Use seller financing to secure favorable terms and avoid high mortgage rates.

• Interest Rates: Residential rates at 7.2%, with commercial loans starting at 6.8%.

• Economic Outlook: Sioux Falls boasts 4.1% GDP growth, low unemployment, and a revitalized downtown driving real estate demand.

That’s All For Today

I hope you enjoyed today’s issue. If you have any questions regarding today’s issue or future issues feel free to ask. Come back tomorrow for information on how to grow your income and wealth. I hope to see you.

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