Hey there, how's it going? Welcome to the REtipster podcast. This is Seth Williams, and you're listening to episode 221. And today I'm talking with Liz Nowlin and Terry Kerr of Mid-South Homebuyers, a turnkey real estate provider specializing in rental properties in Memphis, Tennessee. Now, why are we talking about turnkey rentals? Because as land investors, it's important for us to always be thinking about what's next. Because let's be honest, The land business is a little bit of a hamster wheel. It's a hamster wheel that pays extremely well, but it's still a hamster wheel. And if you want to stay on the hamster wheel for the rest of your life, then great. Keep doing what you're doing. But if you want a few different exit ramps you can take at some point in the future, it's important to always be thinking about where you can put your money so that it creates sources of income that are truly passive and, more importantly, permanent. And there are obviously many ways you can do this. And one such way is through opportunities like what Mid-South Homebuyers has to offer. Mid-South Homebuyers has been around since 2001, and it's one of the oldest turnkey providers in the country. They're known for buying and thoroughly renovating single-family houses and also providing efficient property management so their investors can enjoy reliable, low-maintenance rentals. And I wanted to interview Liz and Terry to understand what sets Mid-South Homebuyers apart and what makes Memphis such an attractive market for turnkey rentals. And also why anyone would want to get into this investment strategy in the first place, and if they do, how they can succeed in this space. Liz and Terry have a unique perspective on market cycles because they've spent decades refining their business model. If you've ever wanted to hear from someone who knows what they're talking about in this space, these are the two people you want to talk to. So Liz and Terry, welcome to the show. How's it going? Great. Thanks so much, Seth. Seth, a pleasure to be here. Yeah, absolutely. So in case anybody's listening to this, in case they don't know what exactly a turnkey rental property is. Maybe we should start there. What is this for those who are not familiar? Yeah. So a turnkey rental property is a property that an investor can buy that has already been completely renovated, has a resident already in the property, and has a property management company in place. So it's a completely passive investment. Buy the property and hit the mailbox once a month for the checks. Absolutely. And if you're doing it right, you're working with people that are going to be your experts on the ground. You know, you can't just make any part of town work as a rental. It needs to be a safe, stable neighborhood with low purchase prices, low property taxes. When buying a turnkey rental like this, my understanding correct that there should be nothing else I have to do to fix it up. It's good to go. Money should start coming in almost immediately. Is that accurate? Absolutely. Yeah, that's it. And there's lots of ways to skin the cat, right? You can buy a house, fix it up yourself and manage it yourself, or you could hit up an outfit to locate a property for you that needs a lot of repairs and then contract with that outfit to make the repairs for you. Or you can purchase a property that has already been completely renovated with a resident already in the property that's cash flowing from the day of purchase. And that's what we specialize in. Have you both been in this company since 2001? I'm the newbie, having only been here about 16 years. So I joined in 2009. And so it's really unusual that we've been in business that long. I mean, you want to take a 20-year snippet and cover every real estate cycle that has been. I mean, you're talking about bubbles, crashes, and everything in between pandemic. And Memphis has proved itself incredibly recession-proof, resilient, durable, slow and steady in appreciation and sometimes rapid appreciation. And it's given us 20 years to figure out the brand of ceiling fan and paint and the strictest renter criteria that still functions, you know, lots of different things. Terry, did you like start this company or how did you get into this? I did. I did. I didn't set out to have the company. The goal was to, you know, buy them and hold them. And then I bumped into a buddy of mine I hadn't seen in years who had 10 rental properties that he had bought fixed up himself. And he asked if he could buy one from me. And I said, why would you want to do that? And he said, well, I don't have time to fix them up myself. And the numbers work for me if I just buy it from you as is, or not as is, after you fix it all up. And so I sold one house to my old buddy, Steve. He's like, dude, this is awesome. And I sold him 10 more. And so the business was born of passing bargains onto bargain hunters and turnkey was kind of invented there for us. Yeah. I think his exact quote was, my wife is tired of me not being home on nights and weekends. So you're talking about that hamster wheel. We get to send some really large checks every month to people whose total involvement is opening a report once a month and cruising it saying, oh, they paid rent again and then going on. And I love businesses that start so organically. Terry often says he's been lucky to be born in a city that lends itself to investment property the way that Memphis does. And then after a couple of years of selling houses to other investors locally, and then less locally, and then less locally as really the word started to spread. Terry was always creating and accumulating these houses for himself. I myself buy houses from the company. We drink the Kool-Aid, I'll put it that way. And Terry's houses were outperforming some of his friends' houses that he bought from us. And the only difference was the management. We built our management company around managing Terry's houses. It wasn't about, oh, let's create a third-party property management company that's going to have this great profitable success as a property management company. The whole thing was working backwards from managing Terry's houses. And when it became clear he needed to manage for the people that we were selling, we didn't restructure. We didn't change how we charge, what we charge, what we cover. And I think it's really unique on the management side, what we would call an owner focused management style. We don't manage Terry's properties any different than we manage for our owners in Japan, Australia, China, you name it. Is this unique for the turnkey rental property provider to also be the property manager? Yes. Most folks that are buying from a turnkey provider are buying from someone who rehabbed the house, put a resident in the property and is going to retain management. Yeah. And it really keeps your accountability all in one place. And I think that's really important. A story, something that will come up over and over again is a turnkey purchaser buys a house elsewhere. They're told that the rent is quite high and that the condition of the house is that there's no deferred maintenance. And then a different third-party property management company is involved and the seller walks away. The house isn't renting. The house isn't renting. Oh, it looks like we need to rent it for a hundred bucks less than what you thought. And then, okay, well, we got a renter in there and now there's repair after repair after repair. And when the people that are managing the house are the ones like with us, we've already taken a deposit on every house I offer my investors that rent couldn't be more real. And then we're the ones servicing and repairing the house. We're the ones offering the total one-year warranty. And so everything that is told to you on the front end is tied up with the people on the other side. Since you're on both sides of renovating it and managing it, like it doesn't serve you in any way to cheap out on the renovation, right? Because like, You're just going to have to deal with it later if you don't actually handle the problems, right? Absolutely. Yeah. And the thing is, is the name of the game is to keep the property rented, right? And if the resident has got a really nice quality property to move into, and then when something does end up breaking down the road, if it's addressed quickly, we pride ourselves on super quick repairs. When something does happen, you keep the residents happy. The residents renew their leases, and that's the only way a property is going to perform. So we're super duper resident focused as well, because they're what make the whole thing work. And it doesn't even you hit the nail on the head with repairs, you know, whereas an independent seller might want to pocket a little extra by spending less on the rehab and then they get to walk away. That goes into location, too. We don't want to manage in unsafe neighborhoods. We don't want to manage undesirable floor plans or houses that are under flight paths or our property management company. well, our friends are our coworkers. They're going to get mad at us. We want to manage properties that are easy to manage. I always say we've had a small wait list for our properties for years. We're very selective on what we buy, very selective on what we will manage and renovate and offer to our investors. And slowly over these 20 years, the word has gotten out. But I always say even at the longest of our wait list times, our acquisitions team was not thinking about me and my wait list. They're thinking about Terry's mandate that we don't put out a house that he would not personally and proudly own in his own portfolio. And that we want every house we serve up to one of our beloved investors to make them want to come back and buy more houses and to be a house we want to manage. Now about Memphis. So what's so special about Memphis? Like why focus on that city in particular? Is there something that makes it stand out from other markets or what's the deal with that city? Absolutely. The price to rent ratio works in Memphis. So you've got to be able to buy a property at a price point in relation to the rent that makes it cash flow. And Liz mentioned that, you know, I've said plenty of times, I'm just so lucky to have been born in Memphis in a town where the price to rent ratios are so super favorable. And also the market in Memphis, about 53% of the Memphis market rents. So such a large proportion of our market rents, that that also lends to the business model. And then lastly, we have a lot of blue-collar workers here that can graduate from high school and get a really good job without a college education working for FedEx or Nike or Amazon because we're such a huge distribution city. And so it's the workforce in Memphis that tends to be more geared towards renting that makes the Memphis business model work. And I want to touch on price to rent ratio a little bit and just kind of for people outside the industry that may not be as even familiar with that, you know, to break it down to the ridiculous, if a house rents for a million dollars a month and is for sale for a dollar, go ahead and buy it. That's the steal of the century. And if a house rents for a dollar and is for sale for a million, that is probably not going to work out on the numbers side. And so people in this space evaluate homes based on the price to rent relationship. Those numbers correlate in a kind of undesirable way almost everywhere else. So you're going to have sky high rents and sky high purchase prices in New York, California, the West Coast, the East Coast. And when the mortgage payment is very, very close or exceeds the rent, you're not cash flowing. And it goes down on the other end of the spectrum, too. You might have a house in a tiny town in a rural area that rents for $450 and you can buy it for $16,000. But what happens in Memphis with that blue collar working force that Terry was talking about and essentially 53% of our population renting. I mean, we're about the 45th biggest city in the U.S. I mean, we have world class restaurants, theaters, symphony, you name it. And we have more renters than owners. Locally. Our rental demand is stronger than our local purchase demand. And you get this seesaw where the rent well, well exceeds the mortgage. And we have investors in 17 different countries around the world and all 50 states. There is a reason that I have investors in Brazil and Canada and on and on and on. And it is because of that. And then it just kind of continues on. If Memphis checks 10 boxes. It's hard to find other places. There's a few, but that check all those 10. We have incredibly favorable landlord tenant law. Land investors don't have to worry about that human element and our investors don't either. We worry about the human element for it, but we've got really favorable laws here, even down to the default construction style. Memphis has a bunch of brick ranch houses with aluminum windows, just this low maintenance construction style. Goldilocks size for rental property, not too big, not too small. So the stars really just aligned here. Yeah. If anyone wants to check out their website, you can either find a link to it in the show notes, retipster.com forward slash 221, or also just go to midsouthhomebuyers.com. You can check out their available properties. You'll kind of see what Liz is talking about. They all look really nice. I would gladly live in any of these things. They're really sharp and look well put together. And the prices are compared to where I live, which I consider to be Grand Rapids. Crazy expensive, but not the cheapest either. But I mean, this is like way cheaper than the kind of stuff I can find in my town. Is Memphis on the lower range of the spectrum in terms of prices nationwide? We have such an incredible cost of living here. I love living in this town. I see people moving back to Memphis. You've got millennials really hitting that home buying age. You want to talk about a city where you can live in a safe neighborhood for under 1500 bucks a month that is, again, in the top 50 biggest cities in the U.S. I mean, we are the sweet spot for dollar to culture ratio. You go up the food chain city-wise, your cost of living triples, but we already had all the festivals and the concerts and Beale Street. And for those that know Memphis, we have about a million people a year visit Memphis as tourists. 600,000 people a year come through Graceland alone. It's the second most visited house in the country, second till the White House. There's so much to do here and you can live here safely. So many musicians have moved here from Austin, Texas. They call it the Memphis move. We don't talk about appreciation a ton because we're such a cashflow town and the rent is very predictable. We've seen that rent come in through a lot of different economic circumstances, but kind of taking off my investor hat and putting on my Memphian hat, I see the things that went in the blender to make a Portland. To make an Austin where artists can afford to live here. People love it. And we see people that have friends and family that have moved to the coast to do their career stuff, come back here to buy houses and have kiddos. Yeah, I can totally see that. Yeah, I think about that. People who are, you know, 20 years old, trying to establish themselves and buy a house, like, I don't know how they do it where I live. I would be really discouraged if I was in that position right now. But it kind of seems like based on your website, Memphis is a pretty ideal place to do that. Our houses range from about 100,000 to about 200,000 with, I'd say, 80% of our inventory falling between 130 and 150. And again, let me stress, that's new roof, new furnace, new water heater, new bathtubs, new toilets. I mean, that's a brand new house from a renovation standpoint with no deferred maintenance in a peaceful neighborhood. I work with all kinds of investors, investors that are in land, that are in storage, that are doing this, people that have only done syndications. But it's not uncommon for me to work with executives in New York or LA that are renting. And I'm really literally helping them with their first purchase in life because it's 2 million to touch anything where they are. And especially for people in their 20s and 30s, it's a great way to start building wealth through real estate when your own market is not a good source for that. Yeah. One of the things I want to touch on is the quality of our houses. One of the things that makes us different is the full-blown gut job. Right? So we're not looking for the houses that just need a little paint, a little carpet. We love the houses where you can see the dirt floor and you can look up and see the sky. Those are our favorites, right? Because when you're done with a rehab like that, everything is brand new. And we're very fortunate that we've been around for so long and we figured out some efficiencies and some scale to where we're able to have in both Memphis and Little Rock, a couple of 30,000 square foot warehouses that are basically like a mini Home Depot. Right. So we don't buy our materials from the big box stores. We buy them from the folks that sell to the big box stores, and we're able to get such a discount on the materials that we're able to put more renovation dollars into a house than our competitors do because they're having to buy from the big box stores. And that's a really big differentiator, not just for our investors as far as repairs and the properties not needing repair for a long time, but also for the residents that are living in the houses that are not having water heaters go out and furnaces go out and water leaks and whatnot. So that's definitely one of the biggest differentiators between us and a lot of the folks out there. Yeah, no, that's awesome. Where are you finding these houses? Like, are you the wholesaler or are you working with wholesalers? Or like how does the inventory work? Wholesalers. Yeah, we're not a wholesaler. We're not the We Buy Houses guys, but we buy houses from the folks that are the We Buy Houses guys. I'm going to call it 85% and then maybe 5% just warm referrals from folks that know this is what we do and maybe 10% just off of the MLS, but it's mostly wholesalers. Gotcha. Now, when I'm on your website and I'm looking at these available properties, it looks like most of everything I'm seeing is actually already under contract. So is there a, I know you said there's like a wait list. Like if I want to get on the wait list, how long do I have to wait? How's that work? It's really not too bad. So it's not lack of inventory. That's one thing I like to make sure folks know. We grateful to get to set up, sell 680 houses last year. I believe we'll probably do 700, 720 this year. We've done a little bit more every year we've ever been in business. So we're jettin' on that and we're managing about 5,000 properties and counting. So about every month I sell 45 to 60 houses to our wonderful investors. It's a mix of people coming back for their 6th and 10th houses and always a good third to half being our first time folks that have heard about us. But even then, we have a few more investors than houses. I remember when I started working for Terry in 2009, I think it was about 2010, and just the phone kept ringing. We've never advertised much. And this was pretty well before podcasts were certainly what they are now. And I said, how do people keep finding us? And he said, they just, I don't know, they do. Everybody keeps telling everybody about us. And so it was about 2011, which also I like to say is, you know, turnkey is quite known now as a concept. There's when we were doing this, really no one else was sort of bottling it up like that. And we started having seven, eight requests for houses. People could not, I mean, within moments of them becoming available. And not that we love having all the demand, but it was frustrating for folks. Folks want to think about it. They might want to call their spouse, you know. And Terry and I, I mean, I think we both remember the conversation we had about not just. Putting the one house out and letting everybody scrap over it and say they wanted it in one second and anybody that wanted to think about it for a minute just had to deal with it. And we kind of put folks in line and we slowed down that offer process to give people a little bit of time to ask a question or think about it. And so essentially, instead of sending one house to hundreds of people all at once, and essentially also, frankly, my repeat investors, as much as we love them, they act like they're going through a drive-thru and ordering a hamburger. Their trust in us is sky high. Their confidence, you know, one of my favorite things, one of my repeat investors once said to me is, I'm just buying your business model by the square foot. He said, that's, you know, it's an 800 square foot purchase of your business model or a 2000 square foot purchase of your business model. And once they really know us, they just go. And so I knew that because each first time investor does become a repeat investor and then does end up referring their colleague or their family member that when we were having this conversation 11, 13 years ago, that if I could figure out a way to make this more comfortable for people less familiar with us and less familiar with the industry to come in the door, that we were going to be better off long-term. And that's what we decided to do. So I send the house out to 15 folks at a time. I wait an hour. It works as people want to go. But the short of that long is that wait times are only about 60 days, give or take. It's about 30 days for my cash buyers and about 45 to 60 for my finance folks. I send you properties till you see the one you want. There's no obligation to act. It just, that's our little process to slow it down and make it a enjoyable process for people. So what kind of returns should an investor realistically expect when they buy a property from you? We use, you'll see one of the things I love, our website is my baby. We have worked on it for years. Terry and I wrote every single that is on that website, by the way. There's a ton of transparency. It's actually unusual for a turnkey provider to have their properties. Where everyone can see them. A lot of websites are going to make you give your email address and your personal information before you can ever see it. But we used ROI for a long time, but it's a really simple calculation as I'm sure your listeners will know. And there's at least five different ways that real estate pays you, right? There's incredibly beneficial tax breaks for most people. Some of my wealthiest investors are coming to us solely for the tax breaks that this real estate is going to give us. You have rental appreciation over time. You have property appreciation over time. You have the actual cash flow, which is the thing that tends to draw people in the first place. And so that IRR is internal rate of return. You'll see a 19 to 22% IRR on there. Oh, and then I forgot there's the profit when you sell the house for more than you paid for it and get not only every dollar you spend on the front end, but a profit after that. And so what you'll see there is I show year one cash flows, which is just really going to be rent minus mortgage minus management. They're nice cash flows, but your first year is your worst year. Your rent is typically going to go up faster than any other expenses. And so it kind of loads there as you'll see with a nice exterior photo of the home, the purchase price, the rent, and that cash flow number we're showing you there is going to be the dollar amount that your bank account goes up every single month. And then as you dive into that pro forma and that 15 year projection, I'm just really proud of how much that covers. I mean, people also forget it's all those positives I talked about, but you know, taxes go up over time and insurance goes over time. Even the cost of labor and materials repairs to your home go up over time. And we're really capturing a really in-depth look with that pro forma. A hundred thousand dollar house, you're talking about 20% down. So that's 20 grand, maybe five grand in closing costs. That's going to be a rent of 950, give or take. On that low, low end, you might be being at like 250 a month, you know, before that rent goes up. And then you're easily into the six and 700 and $800 a month. And this is all with a finance purchase. Obviously a lot of people purchase for cash and then you're getting even more. I don't know if you know this about any of your clients. I wouldn't expect you to, but just in case you do, do you know of anybody who buys rentals from you who pays no taxes because they have so many depreciation write-offs? This is a thing that I've met hotel owners that are like this and self-storage facility owners who do this, which is just kind of a mind-blowing thing, especially for land investors who pay a ton of money in taxes. Is that a common thing where people own so many rentals that they just have no tax bill? I don't know anybody that pays no taxes, but I know that everybody that pays a whole lot less taxes. I don't know about zero taxes. Yeah, I would definitely say that for my investors that are still in the world of financing, meaning that they can qualify for a conventional mortgage. Good problem they have, what is not uncommon for an investor to do is have their CPA draw up a rough draft of their taxes and have that reviewed to make sure that they're not writing off so much income that they cannot borrow. Because if you have a really good CPA, you could make yourself look like you shouldn't be a loan. And so people want to pay enough taxes that they're still bankable. On the property management side of things, so how do you screen tenants? What issues for you would be red flags that most people wouldn't think they would be? Or what issues should not be red flags, even though some people think they are? Well, ability to pay is king, right? And we want to see a history. We're not going to rent a house to somebody who has been living at home with their parents. And maybe they have a good job and they qualify from a standpoint of enough income and they qualify from a standpoint of debt to income. Their background check came back good. Everything looks great. But if they don't have a rental history, we are not going to rent to them. And that's a big red flag. Obviously, you've got to do a criminal background check. You've got to make sure somebody has not had any evictions. And you've got to make sure that the debt-to-income ratio works and also check with their current landlord and ask the landlord, you know, why are they leaving? Have they been a good resident? So there are a lot of boxes to check there. And one of the ways that we differentiate ourselves, and Liz alluded to this back when we first started managing properties for other folks, is I never requested or required our potential residents, our applicants, to pay an application fee, right? So application fees are a must. I don't know any other property management company that doesn't charge them. And I understand why they do, because it's expensive to pull credit reports and do background checks, not just because you've got to pay a service to do it, but you've also got to have a W-2 employee that's going to scrutinize that. And that also takes time and money and application fees cover that cost. Well, I knew that if I didn't require an application fee, I would have a lot more folks come take a look at us and we would have a much better shot at finding the best resident and finding them quickly. And so it made way more sense to me solo as an owner of my own properties without a property management company for other folks to absorb that application fee. Well, fast forward to managing for a couple of thousand folks with well over 5,000 houses under management and rehabbed, we're not charging those application fees. And so we get a way better pool of folks to look at and again, can fill the properties quicker with a better applicant. And we forgo a large income stream as a property management company. By eating that, it becomes cost. It's overhead instead of an income stream. And that's just one of the many ways that we differentiate ourselves from our competitors. You know, you think, oh, application fee, and most investors are probably owner-occupants, but the norm truly is $60 per adult applicant when you're talking about maybe a rent of $1,200. So if you think about that as an expression of a percentage of what a couple may be able to afford for their entire living situation. And they don't know if they're going to be approved. You have to write a check for $120 and just cross fingers. And some companies don't even call people back to tell them they're denied. It's risky and hard. And I have a property in my hometown I bought for a family member that's professionally managed. And they actually charge exactly that at $60 per adult applicant for about a $1,200 a month rent. And you cannot tell me that does not add a week of vacancy out of my bottom line for their profit center. Even if that couple is just going to go home and think about it for a couple of days and say, okay, let's do it. Let's write that check. Our leasing team can take an application over the phone when someone calls off the sign. Because there's no charge there. And then we're doing that criminal background check that we're doing a tri-merge credit check, which your typical, again, when you switch into that, where it's a profit center, that company charging that 60 bucks a month is going to pay 14 bucks to check just TransUnion or just Experian. But for those that know, you can have a blemish on just one bureau. It's not uncommon. And so Terry just really hit the nail on the head. If you get approved with our property management company, you would get approved anywhere in town within the limits of your income. And we have all the boxes you have to check that another company would have and a few extra. And where those few extra come from is that at the beginning of our business, 20 something years ago, every time a renter would fall off the rails, you know, and fall behind, we would go back through that file and say, was there anything, was there anything here that could have predicted that? And so even touching back to what he said, like Like if an applicant had good rental history from somewhere they'd lived for a few years, but then had gone and lived with a family member for a year and then come to us, well, sometimes that's what we would see. Like, hey, he wasn't used to paying that bill, even though that income was there. And so there's a lot of what we do on the rehab side and the management side that just comes from, hey, why is this light fixture showing up on our investors' bills between renters? Let's change. Why didn't this renter work out? Maybe this neighborhood is not as suited as we thought. And now we've just become a machine. In fact, the properties are so almost interchangeable. I think that the hardest thing about investing with us is for someone to actually pick out a house because you have to split hairs to find a difference between any. And people kind of have this natural like, okay, I've got 30 or 40 houses a month coming at me. I need a reason to jump on this one over that one. But for any house I offer an investor, it has jumped through 50 hoops to become a Mid-South house. It has had this identical renovation put on it. And then the price is a formula based off the rent. I mean, we think of it as selling an income stream. And so if folks go and check out that available property section. Which also there's a great property management section, you can even talk about transparency. You can view our management agreement, our lease on there. You can sign up for the waitlist, everything on there. You'll start to see that running theme. They all are under contract to our investors. But one of the main things I encourage people to do when I get on the phone with them as we're beginning to work together is to go have a fake shopping trip on that website and just say, pretend you're ready to write a check today and that every single one of those houses are available to you. And if you're seeing two, three, four, five, 10 that you like, I am going to have that same price, rent, zip code, kitchen, bath, shutters, flowers, you name it. And if you're liking 120 Maple Street, I got 240 Pine Street coming down the pike. For sure. So I am curious... If I want to buy a property from you, how important is it that I visit Memphis and see the property itself? Is that even necessary? Or how do you help your investors make sure that they're performing the right due diligence before buying a property? How does that work? Excellent question. First off, we'd love for folks to come visit us. Probably only about, well, it's less than 5% of the folks that we work with do we ever get to meet. So please come visit us. We'd love to see you. We'd love to go show you around. Liz hosts a rehab tour once a month. And so you can sign up on the website and come visit us. And we'll actually give you $500 off your first house and closing costs. So please come visit us. However, most folks don't. And that's where the website was born. What we wanted to do was create a website where it was educational to where it could teach folks how to shop for a turnkey seller in any market. Now, granted, we want to work with all of your listeners. However, we also want to arm them to go shop for a turnkey seller in any market. So if you go to the website, you'll find tons of information of how to do your due diligence, what kind of questions to ask your turnkey seller, what kind of questions to ask the property management side, you know, how to look under the rock. So first off, if your listeners would go there and check out the due diligence section on the website, there will be a plethora of information there that would educate them. And then if they're looking to buy a property from us, and we certainly hope they will, they can sign up for the wait list, talk to Liz or one of her crew. We'd be happy to answer any questions they have and hop on the list. And like Liz said, it'd be just a couple of months before properties start to roll their way. I did notice there's one of these properties on your website is in Little Rock, Arkansas. So are you in Little Rock and Memphis? When and why did you expand to Little Rock? We are. We're in Little Rock and Memphis. Little Rock is very similar to Memphis. It's just a little bit smaller. And the main reason we went is because just like Memphis, the price to rent ratios are perfect. They're almost identical. The other reason I went to Little Rock is because I have family there. And so my cousin knew the market. He's local. And it's really tough to go into another market and be able to know the difference between this street is awesome on this end of the block, but it's not too awesome on the other end of the block. So we had some homegrown knowledge there. And so to this day, my cousin is our acquisitions manager over in Little Rock because we want to make sure that we're buying the right property. So that's why we went to Little Rock. And then we're also doing some new construction now direct to rental in Little Rock and Memphis as well. You've both seen the highs and lows of the real estate market over the past, what, 15, 16 years. I often think about when I first got into real estate, it was in 2008, 2009. It was right as the crash was happening. So to me, normal was all properties are super cheap. That's just how it works. And then every year they get more and more and more and more expensive and it just goes up and up and up and up. And I'm just wondering, is it hard for you at all to change with the times in terms of pricing and what stuff is actually worth? Like, does it ever feel like we're in a bubble and stuff isn't actually worth these high prices? Kind of opening a question, like, is that hard for you or not really? The cashflow is real. That's today's rents and today's pricing. And so that's just the reality immediately. Yeah, pricing went up, but so did rents. I mean, that's kind of what made everything work through some of the craziness here is that as the cost of labor and materials went up, as housing scarcity went up, which was to the incredible benefit of all of our investors that have been with us and I think will continue to be so. I mean, the cash flow is the cash flow is the cash flow. And you can bury the money in your backyard. You can trade your time away from your family for money, and you can do this. But there's risks and benefits with everything. But I also joined in 2009. And ironically, in 2018, I was wrong, but the market felt really hot to me in 2018. I relate exactly to what you're saying, Seth. Having come into this when the blood was in the streets, 2018 felt like, wow, man, everybody likes real estate. And everybody buys. And it's just like, oh, the loans are flowing. and is this hot? And I thought, I went back and I did a study. So like 2007 was the worst time in American history to buy real estate, right? Like people that bought that year, probably have a horror story or suffered. And so in my concern is I went to, let me clarify, I was going to buy my house from mid side, buy one house a year from mid South. It's just the pace that I like to do it, that I can afford to do it as I build my own passive income, even though I plan to work here forever and ever. In 2007, we were selling a house that rented for $650 for $56,700. Fully renovated, the same neighborhoods we work in. And I did that math on that worst time in American history to buy real estate. And if I was sitting there in 2018 and you had given me that time travel ticket to the worst time ever to buy real estate, I remember my numbers. It would have been $45,000 in gross cashflow up to that date. That house was, I think about $86,000. At that point, that rent was probably about $860,000 at that point. And I realized at that moment that I would happily go back and buy a house from us at that time. Now it dropped to, I think, 49 briefly at the bottom of it, which if you compare that statistically with other parts of the country is a really low crash volume. But the beautiful thing about buy and hold real estate is that 2007 investor did not buy it to sell it in 08 or 09 or 010 or on. And the cool thing that we saw, I don't know if cool is the right word, but rent stayed super stable. We've never really seen rents go backwards. So not only was he fine, he got that $300 a month that he had signed up for like clockwork. And I decided right then to not try to time the market, just period. Real estate plus time is a. A beautiful combination. If you look at our 100 year graph of real estate in the US, there is one trend. And that, that lip is tiny actually for how, for what it bounced back for. Well, on that note, was it harder to run your business as a turnkey rental provider back in like 2009, 2010, or is it harder now? Or maybe it's neither. Maybe you don't see it as harder, but just different. Do you have any thoughts on that? Yeah, it's just different. Back in 2009, I had five employees and now we have about 150 W-2 employees. Back then, we were just a flip company and managing a few houses. And now we have our own mechanical, electrical, and plumbing companies. And we have a hardware division. We have a finance division for folks that are tapped out of the Fannie and Freddie market. So we've just got a lot of vertical integration and we're able to just provide a lot more value. So the market has changed for sure, but we've just gotten, you know, you do something for a long time. You know, you hope every year you're, you do business a little bit better, a little bit smarter. And so I definitely would not say it's harder. It's just different. And we just feel blessed to still be growing our business, expanding our markets and being able to continue to provide value. When you're looking at all the changes happening in our country right now and the government seems like every day there's some huge upheaval I'm reading about in the news, whether it's tariffs or immigration or something else. Do you think any of these things are going to have an impact on the turnkey rental market for better or worse? Like I know, for example, a lot of stuff I think is imported through Memphis or it's a big shipping hub and there's a lot of new tariffs out there and tariffs coming. I don't know, stuff like that. Does that have any foreseen impact in your opinion or is it not really going to make any difference? I mean, the beautiful thing is that the heartbeat of our business is providing people something that is literally in Maslow's hierarchy of needs. I mean, we're in the business of shelter. What we've seen with these big swings, like even in the crash that we were speaking of before and stuff is people just need housing. You know, I mean, we're going to fluctuate a little bit. So, for example, we had the second busiest cargo airport on planet Earth for the first half of my career. And then COVID, which I know a lot of us were afraid of what that was going to do, caused such an increase in shipping that we became the busiest cargo airport in the world. FedEx was hiring 500 people a week for like six weeks. And the requirement was that you be able to lift a 50 pound box. One thing I love about distribution as the heartbeat of our economy here, there's no way that China or Mexico or anywhere else can take the job of getting a package from New York to L.A. And do it better or faster than Memphis. It is hundreds of years old as an industry. Distribution in Memphis predates the Civil War. So before the Civil War, all cotton grown in the U.S. came through Memphis. And today, all cotton grown in the U.S. comes through Memphis. Tides as they rise and as they lower, they affect everybody. They affect us too, but goods will need to be moved for all of time. And I just like that it's literally about our geography and the infrastructure here. Highway 40 runs coast to coast and right through town. We are the third largest confluence of rail in the US. If some of your folks do come and come on our tours, I mean, we're driving over railroad tracks, driving over railroad tracks, semis all around you, FedEx planes in the sky. And so of course, these uphables and stuff. They can affect everything, but we're talking about housing not going away and an industry that is pretty permanent. I'm curious if somebody's listened to this in there thinking, maybe this sounds good, but I don't know if it's for me. What kind of person do you think should not be investing in turnkey rentals like what you offer? Is there a certain profile of person that makes the most sense for this in certain people? It's like, no, look somewhere else. Absolutely. If someone's looking to buy and sell quickly, turnkey, regardless of Mid-South homebuyers, is not the place. It's a buy and hold strategy. It costs money to buy. It costs money to sell. We tell folks, look, if you're not into it for 10 years, look elsewhere. It's a buy and hold gig. Anybody who's looking to do some flipping, you talked about the hamster wheel with dirt. This is the opposite of that. If somebody does want to learn more or start working with Mid-South Homebuyers, what should they be doing? Where's the best place to go and get started? The website is it. All roads on the website lead to me and my team. I am Liz, three letters, L-I-Z at midsouthhomebuyers.com. You can request a call with me. It's really just, it's me and my right-hand guy, Bill, and my wonderful team member, Kristen. And we set aside a full hour for every person that calls and schedules with us. And I'm not looking at my keyboard, like I really sit down and I learn about what their goals are, what they're looking to do, answer questions. It's folks' jobs to poke holes, ask the hard questions. We welcome, I love them. You know, I do calls with spouses. One spouse is worried and one spouse is raring to go. And I just welcome it. As Terry mentioned, we have everything kind of there. So if you want to do this on your nights and weekends and just read about us, but I just really encourage folks to call and learn about it. We have, I mean, surgeons and pilots. I have a large sect of Amish investors, just kind of every type of individual, every employment type that you can think of. But the running theme is that they're making money while they spend time with their family. And we'd love to get to visit with folks. We wish the percentage was more than 5%. So please come visit us if you can. Head over to midsouthhomebuyers.com. You'll see what they're talking about. Their website is awesome. Just look at the property listings. It kind of gets me excited. It makes me want to go buy one too. I never really would have even thought about this, but it's like, oh, I kind of get it. I see why people do this. So props to both of you for running such a good operation here. I know you've got a great reputation in the industry. A lot of people know about you and buy from you. So thanks again. And again, if people want to check out the show notes for this episode, you can find those at retipster.com forward slash 221. Terry and Liz, thanks again. Seth, it was a pleasure. Thanks so much, Seth. You bet.