What's The Deal With Little Rock, AR?

Question

I've been tracking Little Rock, AR for almost 2 years and don't understand why no one wants to buy in this beautiful state. The city has a lot of potential, and I see a lot of opportunity. I almost bought a property, but my mother said it was TOO cold for her to visit. :(

Can someone from Arkansas please provide perspective? Drugs? Crime? Mafia?

Can investors please provide perspective as well?

Can someone from Arkansas please provide perspective? Drugs? Crime? Mafia?

Can investors please provide perspective as well?

Myka Artis · Answer

I love investing in Little Rock. My family is originally from there and I've been back and forth my entire life. I've actually bought two properties in Little Rock during the quarantine. As far as crime goes it is best if you know where to invest. I invest in the 72204 zipcode, historic districts, and anything between North Little Rock to Jacksonville, AR. I do short term rentals so I have to be very specific on where to invest. If you're doing traditional rentals then southwest Little Rock is a great market if you want cash flow.

Violeta Archer · Answer

Thank you, EVERYONE, for the great information and insights. I'll review each one and follow up. :)

John M. · Answer

My goal is positive cash flow (income) and some appreciation. Shortlisted 3 areas - Benton, Conway, and Cobat. I am looking for some help to put them in order for the best areas to achieve my goal. TIA!

Shane Gordon · Answer

@Jean Marx Thank you for your response! I was curious how the cash out refi would work during COVID times and if it is even worth doing the BRRRR strategy right now. If you don't mind me asking, what areas did you invest in? We are also looking for cashflow but we want to be able to do cash out refi's so like yourself we have the capital to turn around and repeat the process.

Jean Marx · Answer

@Shane Gordon It's definitely possible. You're right about the appreciation; however, we invest there for the cashflow and aren't overly concerned with the low appreciation. As far as having the BRRRR strategy work, you have to buy something at the right price with the potential to add value through rehab. We purchased a property for $125K, spent a little over 30k to update it and it actually just appraised today for 200K. We're refinancing the majority of the money back out and still have the cashflow we want plus the $ to turn around and do it again. I will say that it was a little interesting when COVID shelter in place orders first hit. The investment property cashout interest rates skyrocketed so we decided to hold off for a few months until they normalized into something that made sense.

Jay C. · Answer

@NaDean Bowles which areas do you avoid? I would think south of 630 and NLR south of 40 are 2 areas I would avoid the most. I see a lot of deals south of 30 but I am not as familiar but it seems okay. My wife works in that area and it still seems like a C-class area but not anywhere close to what you would get in some of the rougher areas.

NaDean Bowles · Answer

@Shane Gordon

Hi Shane,

Almost all, but not quite all, of Conway would be a great place to do this. Deals are tighter there and hard to come by because it is one of the most sought after markets.

You can do you a BRRR in Little Rock as well but I would recommend doing it in an area where you do not have mostly rentals in the neighborhood. If you ever have specific neighborhood questions, feel free to reach out.￼

Shane Gordon · Answer

@Chase Calhoun Thank you for the information. Check your inbox.

Chase Calhoun · Answer

BRRRR is possible for sure, but usually best with large rehab projects which are tougher.  Traditional appreciation is rare in most parts of Central Arkansas but there have been some neighborhoods that have seen appreciated from a high demand.  In my opinion you dont have to count on traditional appreciation with a BRRRR and you force it through the rehab.  The main barrier right now would be the cash out refinance.  A lot of lenders have tightened their belts during Covid.  I am doing one right now on a class A rental home but am using a commercial loan through a small/ local bank.  The home values in the neighborhood have not increase but the value of this home has increase substancial through the rehab.

Chase Calhoun · Answer

I am an active investor and investor friendly real estate agent in Little Rock and think it's a great market.  I think you can invest successfully in most areas but personally am trying to invest in more stable/ nicer areas as they draw much better tenants and have more options when you decide to exit.

I am seeing a huge tenant demand for rental properties (especially nicer proprties) but the purchase market has been more competitive latelty due to lower inventory and low interest rates driving first time buyer sales.

Please dont hesistate to reach out if you have any specific questions as I am always more than happy to shar information.

What's The Deal With Little Rock, AR?

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