I think the short term effect on rents is virtually zero - illegal immigrants usually live multiple numbers to a home, rather than everyone having their own space like Americans - but longer term there may be some softness at the bottom levels of rentals. i would be more concerned about the lower economic job market than I would be about rental housing.

In terms of buying vs. selling - it really depends on your situation and what your goals are. 

I have a pretty wide range of types of real estate I am looking into, but I lack knowledge into what is feasible for me (especially in terms of what I can finance).

Most likely one of two issues. (1) You don't have an investment grade deal; or (2) you don't have the relationships yet to assign a contract. 

I am thinking of starting with rentals, be it short term, midterm or longterm. 

The Section 8 process involves more paperwork and effort upfront, but it can be a good long term strategy if you're looking for stability.

:)General question here: I invest in long term rentals in Memphis, but I live out-of-state in NYC, so I was wondering if anyone had any general advice about starting an LLC in my situation.Would you form the LLC in Tennessee or would you recommend forming the LLC elsewhere?

Short term, leaving financing in place during rehab prior to resale — great strategy with limited risk to either party. 

They've violated the lease, and the chances of them making a long-term change to become a decent tenant are slim. 

But my long term is rental mainly.