Turnkey in Memphis/Little Rock

[James York]

Some quick bullets

• I'm a foreign investor (non-US citizen)
• Looking at this area due to friends (other investors, and people that live in the area).

I'm currently looking through Midsouth Homebuyers as 1) they come with high recommendations from a colleague, and 2) they offer finance options for foreign investors.

What's the problem?
There is just so much information out there I want to make sure I'm getting a good deal, and I want to see what my options are. There are a LOT of amazing people on here with advice for days, so, if you don't mind, let me pick your brains! 

Regarding loan rates:

Midsouth Homebuyers offer loans at 7.9% for foreign investors which is nothing to grumble at. A good rate IMO. I just wonder if there are other companies in the area that offer something similar, or lower (market research!)?? Turnkey Properties do not feature rates or whether they offer loans on their site (so I should probably contact them).

Also, other than my (multiple) friends' recommendations for Little Rock, what do BP members think of the areas of Memphis vs Little Rock? Appreciation, crime, rent prices, etc.

Thanks for reading.

James

[Kirby Davis]

@James York Just a word of caution. Please make sure you have someone you trust in the area giving you feedback on the property. Memphis and Little Rock are very similar in that certain areas can be fine, but there are a lot of BAD areas that can easily be disguised as decent/good areas by turnkey providers. I see properties listed by Turnkey providers in Memphis all the time, priced right at that 1% rule because they know a lot of investors target that, and it looks like a good return to someone not familiar with the area. Most of these are in rough areas, so the renters you'll get will cause some issues - this translates to significant additional expense, which their numbers do not account for. In these areas, turnover will likely cost you a good bit, as the renters are very hard on the property, and crime can cost you, also. There's also very little chance for much appreciation in these areas (outside of certain pockets, and those aren't huge), so buy for cash flow but be sure you are accounting for the right level of tenant and the expenses associated with that level... 

I'm originally from Memphis and have lived in Arkansas for the past 10 years. Just wanting to give a word of caution, as I see a lot of turnkey opportunities presented in these areas, and it worries me because they look great. Only knowledge of that area specifically would let you know it's going to be a serious dud.