The Bloody Apartment is owned by Dwayne Forge, and is located in Northwood. Blood trails run through its corridors, the source of which is never revealed in the game.
The blood trail begins as a single blood splatter just outside the apartment's entrance, becoming several blood splats in the corridor leading to a pool of blood on the living room floor. It is believed that while Dwayne was in prison, many hobos could have moved into his apartment and started fighting each other. What supports this idea is the fact that Dwayne never locks his apartment doors. Another theory is that Dwayne most likely killed someone in his apartment, which could also be one of the reasons he went to prison, along with whatever crack cocaine offense Dwanye committed which sent him to prison, as Playboy X mentions during the mission Blow Your Cover.
Several photos of LCPD cops can be found in the apartment, meaning that either a police officer lived there, Dwayne knew the officer/officers personally, or that the officer/officers were murdered in this apartment and that Dwayne may have possibly ordered the killing.