New investor, anyone investing in Little Rock from OOS

16 Replies

Hi there - After much research, learning and observing, I am ready to get off the side lines and start building my portfolio!

I am primarily interested in creating passive cash flow though buying SF rentals and have been very intrigued by Little Rock. While it may not offer as much appreciation growth as other markets, it does seem to be a fairly linear market with opportunity for solid cash flow. There also seems to be a good amount of affordable properties out there that are being bought/rehabbed/sold as rent ready, which is primarily what I am looking for as my first (maybe few) purchase.

Anyone out there doing the same from outside of AR? I am in the SF Bay Area and would love to connect with other investors already in the market or interested in it, like me.

I am also appreciate general recommendations on neighborhoods that are good to consider as well as ones best to avoid.

Thanks in advance!

Jennifer, we have been active in Little Rock for the past 3 years and you are right about solid cash flow. I would recommend focusing on Jacksonville, Sherwood, South West Little Rock, Alexander, Benton, Bryant and West Little Rock. 

I am out of NY and I hold rentals in LR.  I made a lot of phone calls and made a list of people to interview in person. Realtors, property managers, lenders and home inspectors.  The one group I missed was contractors.  We drove out with a 3 year old and 10 year old and spent about a week.  I thoroughly interviewed everyone and had a list of questions to ask going in.  I kept note of everyones answers and selected from there.  We became comfortable by just spending time in the city like it was a family vacation and we fell in love with the area.

Hi Jennifer - 

I live/work in the Sacramento area and invest in Little Rock. We lived there for 5 years about 10 years ago. The areas that we keep an eye on are Benton, Bryant, Little Rock near UMAS, West Little Rock, 72211, Sherwood, and parts of NLR. We occasionally consider Mamuelle, Cabot, or areas of Jacksonville that would be the most desirable for people stationed at the Air Force base.

We interviewed a local property management company who has criteria that revolves around neighborhoods where properties typically rent for around 1k+. We stick with that general rule since we don’t plan to manage anything ourselves but I’m sure there are other companies with different criteria.

-Jean

@Jean Marx - hello CA neighbor! thanks for your reply. One of the property managers that I've seen as I've researched what rents are going for is Callahan Real Estate. Any experience with them? PS - do you ever get up to Apple Hill? My partner and I have a small cabin in El Dorado Country and love that area, this time of year especially. :)

@Account Closed - thank you for the feedback. I am planning to take a trip out to visit LR in the next few weeks. I'm looking forward to exploring it and learning more about the various neighborhoods.

@Zul Budhwani - thank you for the feedback! I feel a bit better knowing that I'm focusing on the "right" areas. Jacksonville, in particular, caught my attention. Unfortunately, the property I was interested in went into contract before I could get to it, but I'm going to continue to keep an eye on that area and check it out when I visit.

Hope everyone has a great Monday!

@Jennifer Figueroa      I'd be curious if you find out anything on Little Rock or anywhere in Arkansas. I currently invest in the San Francisco Bay Area and in Cleveland, but according to multiple studies I have seen it is my understanding that Arkansas is actually the most landlord friendly state in the country. 

Based on that alone I'm actually very surprised there isn't as much love for Arkansas in general regarding buy and hold for rentals. 

@Brian Garlington - I'm also in the Bay Area (SF for 20 years before moving to Oakland in 2018). I was originally looking to invest in my backyard, but I quickly learned that the numbers just don't work out from a cash flow perspective or ROI (except in the long run since we have such crazy appreciation here). The landlord friendly laws are definitely a factor in me narrowing my first market down to Little Rock, as are the low taxes.

I have found a property SW Little Rock that I"m interested in...it will be fully rehabed and rent ready. To be honest, I'm a little skeptical about the rent price point used in the 1-year projection provided to me, but unless I'm wildly underestimating expenses and set asides (i.e. % for vacancy), I should still make out OK if I need to rent it for a little less. I'm fully expecting to some mistakes, but hopefully I don't end up taking a bath. :)

@Jennifer Figueroa

Generally speaking I have found that rentometer is usually a pretty good barometer as to what a place will rent out for....I have found this the case in Oakland (We might be neighbors) and Concord here in the Bay Area as well as Cleveland. Whatever rentometer says the "median" rent is for a given area has usually been pretty spot on. What do a lot of the SFR's go for in those areas of LR? I don't care about appreciation in my out of state rentals, just cash flow.

@Brian Garlington - I'm still getting my arms around the data, but it looks like the median rent in the area I"m currently looking at is $850/mo. and goes up to $950-$975, at least based on what's currently being advertised that is equivalent (3bed/2bath). The area in SW Little Rock that I'm looking at sounds lot like East Oakland (I live in West Oakland btw). According to Rentometer, rents are up 6%...my guess is because of these turnkey providers buying up and fixing distressed properties and then selling them to people like me and you.

@Hadar Orkibi     OOS means Out of State

@Jennifer Figueroa Well I am in East Oakland :-) Interestingly I have never bought from a Turnkey Provider. I have 2 SFR's and 2 Duplexes in Cleveland and they were all off the MLS. I flew out to Cleveland a couple of times and drove neighborhoods and met with potential PM's and agents while I was out there.

Originally posted by @Jennifer Figueroa :

@Jean Marx - hello CA neighbor! thanks for your reply. One of the property managers that I've seen as I've researched what rents are going for is Callahan Real Estate. Any experience with them? PS - do you ever get up to Apple Hill? My partner and I have a small cabin in El Dorado Country and love that area, this time of year especially. :)

Jennifer - I don't have any experience with Callahan Real Estate but let me check with one other person that may. I'll send you a message the feedback or lack thereof. Re: Apple Hill - Yes! Love it there. That's fabulous that you have a getaway option in the area!

@Brian Gerlach - We're still new enough that I'm probably not the one to ask. We have a short sale we're working on now. I can let you know how that goes but it'll be a minute before we have our systems down. Everyone else that I know in the area does a lot of work on their own so their numbers are skewed from someone hiring everything out. If you'd like to hear from them, I'd still be happy to put you in touch.

-Jean

Originally posted by @Jennifer Figueroa :

Hi there - After much research, learning and observing, I am ready to get off the side lines and start building my portfolio!

I am primarily interested in creating passive cash flow though buying SF rentals and have been very intrigued by Little Rock. While it may not offer as much appreciation growth as other markets, it does seem to be a fairly linear market with opportunity for solid cash flow. There also seems to be a good amount of affordable properties out there that are being bought/rehabbed/sold as rent ready, which is primarily what I am looking for as my first (maybe few) purchase.

Anyone out there doing the same from outside of AR? I am in the SF Bay Area and would love to connect with other investors already in the market or interested in it, like me.

I am also appreciate general recommendations on neighborhoods that are good to consider as well as ones best to avoid.

Thanks in advance!

 Welcome to the site Jennifer.