Fix and Flip in Nashville

The envelope got shorter and the entitlement got easier. The ordinance passed third reading on December 16, 2025 and was approved by the mayor the next day, with the height table delayed to February 27, 2026. Maximum height across the single-family and two-family bulk table dropped from 3 stories to 2.5, and a new "half story" definition counts a half story as a full one if its top wall plates, on at least two opposite exterior walls, sit more than 4 feet above that story's floor. Note 6 caps height at 24 feet to the eave or parapet and 35 feet to the ridge, with a blockface exception: if more than half the existing structures on the same block face oriented to the same street exceed 35 feet, you get 3 stories in 45 feet. Note 4 is the tall-skinny rule proper, holding two detached units on a single lot to a ratio of 1.0 horizontal to 1.5 vertical for each structure, and dormers may not occupy more than half of any roof face. There is a real carve-out: inside the area bounded by I-65 on the north and west, I-40 on the west and south, and I-24 on the east, the maximum stays 3 stories in 45 feet and the Note 6 eave and ridge limits do not apply. Running the other way, the old five-part conditions test for two-family was deleted in full and replaced with a simple standard, so two-family is permitted on any lot legally created under state law or inside an approved final plat that meets the district minimum lot size. If you are holding plans drawn to a 3-story tall-skinny outside the loop, they no longer pencil the same way. Have your architect confirm the current envelope with Metro Codes before you go hard.

Through a horizontal property regime created by a recorded master deed. The legal basis is the Tennessee Horizontal Property Act, T.C.A. Title 66, Chapter 27, Part 1. Under section 66-27-102 an "apartment" is any part of the property intended for independent use, and the definition expressly includes "a separate free-standing building." That is why two physically detached houses can be conveyed as separate units on one legal lot without a subdivision. It matters to your loan in three places: the appraiser has to comp units rather than a lot, the title work runs through the master deed, and the first unit to sell needs a partial release. Tell us the structure at term sheet, not at the first payoff, so the release mechanics sit in the loan documents. Two other notes. Metro also permits two-family as a zoning use, with fee-simple splits handled separately, so your real estate attorney should confirm which structure your specific deal uses. And under BL2025-1006, two-family structures legally built before the effective date may remove the connector between the units. Run the exit price against the fix and flip calculator on a per-unit basis, not on the combined build.

The buyer pays the transfer tax in Tennessee, at $0.37 per $100. The base is the greater of consideration or property value, and the grantee pays by statute, so on a $400,000 purchase that is $1,480 out of your side of the table, not the seller's. You will pay it going in and your buyer will pay it going out. The second one is the indebtedness tax on the recorded loan: 11.5 cents per $100 of debt, with the first $2,000 exempt, owed by the borrower and collected and remitted by the note holder. On a $400,000 note that is about $458. Every recorded debt instrument carries the legend "Maximum principal indebtedness for Tennessee Recording tax purposes is $___," and a revolving line is taxed once on the stated maximum, with re-draws untaxed and any increase beyond that maximum taxed on the increase with no $2,000 exclusion. Do not be tempted to shade the deed. Consideration is sworn on the face of the deed, false statements are punishable as perjury, and the Department of Revenue runs a discovery program comparing sworn deed values against assessor values. Recording fees themselves are small, $10 per document and $5 per page over two under T.C.A. 8-21-1001, but Davidson County's own posted schedule should be confirmed with your closing agent. Talk to your attorney or CPA about how these land on your specific closing statement.

You can, but underwrite that fallback on today's rents, because Nashville rents are falling. Start by checking whether the sale really is stuck: the metro median sale price hit a record $495,000 in June 2026, but that was up only 3.1% year over year against roughly 3 months of supply and 35 average days on market, so this is a market closer to balanced than tight. Three independent series agree on direction as of August 2026: Apartment List has the metro median at $1,373 and down 3.6% year over year, Zumper has the 1-bedroom median at $1,650 and down 5%, and CoStar data reported by Northmarq has average advertised asking rent down 1.2% to $1,642. Multifamily vacancy sat at 8.5% in the first quarter of 2026, a cyclical high. The constructive half of the story is real but slow: deliveries fall from 12,852 units in 2024 to 9,011 in 2025 to a forecast 6,020 in 2026, units under construction are down about 25%, and trailing-12-month absorption held near 8,700 units, so the rent decline is a supply artifact with a visible end. That end is a 2027 to 2028 story, not a 2026 one. If plan B is a rental, price it flat and check the coverage with the DSCR calculator before you buy. One more caution: do not fill the gap with short-term rental income. In Davidson County a new not-owner-occupied short-term rental permit is not available in AR2A, R, RS or RM zoning, and an existing permit does not transfer on sale.

Residential permits are priced off valuation, and Metro publishes no review clock. The total is a $25 zoning examination fee plus the building valuation fee, plus a Codes Tech Fee of 10% of that valuation fee, plus plan review where it applies. Residential work on 1-2 family homes and townhouses runs $5.00 per $1,000 of total valuation, and one- and two-family dwellings, townhouses, demolition and blasting are exempt from the plan review fee entirely. Valuation is set off the ICC Building Valuation Data table, February 2025 edition, which puts one- and two-family construction between $169.09 and $215.90 per square foot depending on type. Start electrical work before the permit issues and the fees triple. Re-inspections are $50. On timing, Metro Codes publishes no standard or service level for plan review, so do not build a schedule around a number a third party quoted you. What Metro does run is concurrent electronic review, with one plan set going at once to Water and Sewer, Stormwater, Health, the Fire Marshal, Planning, NDOT and Historic. Two things to plan around: only registered licensed contractors can hold an ePermits account, so an unlicensed owner-borrower has to appear in person at 800 President Ronald Reagan Way, which is a real schedule risk on an owner-managed job. And if you are building a single- or two-family home in a designated sidewalk area under Metro Code section 17.20.120, compliance is a condition of the building permit: you build the sidewalk, or pay an in-lieu contribution where that option is open to you. There is no option to pay when the lot sits on a side of the street that already has sidewalks, or when a sidewalk would extend the network from an abutting development. Where you can pay, the contribution is capped at 3% of total construction value, and that cap is the number to underwrite to. Either way you dedicate right of way or a pedestrian easement. Looking forward, Tennessee Public Chapter 1044 takes effect January 1, 2027 and binds every local government in the state to 30 business days for written staff comments and 60 business days to approve or advance an application, with automatic approval as submitted if either deadline is missed. It governs plan review, not the inspection cycle.

Off assessed value, not off your purchase price. Tennessee assesses residential and farm property at 25% of appraised value and commercial and industrial at 40%. Davidson County's 2025 rates are $2.814 per $100 of assessed value in the Urban Services District and $2.782 in the General Services District. Work it through: a $500,000 house in the GSD is assessed at $125,000, and $125,000 divided by 100 times $2.782 is $3,477.50 a year, or about $290 a month while you hold. That is an effective rate near 0.70% of market value, which is the number to put in your carry, not the headline millage. The same $500,000 valued as commercial is assessed at $200,000 and bills $5,564, roughly 1.6 times the residential figure, so a change of use moves the tax bill even when value does not. Pull the address-level figures from the Davidson County Assessor rather than trusting the seller's current bill, and talk to your CPA about your own situation.

About 10% of the purchase, plus the transfer tax, closing costs and your carry. We fund up to 90% of the purchase price and up to 100% of the rehab budget, capped to ARV, on a 6-month interest-only term. At the metro median sale price of $495,000 that is up to $445,500 from us and $49,500 from you (495,000 x 90% = 445,500), with rehab drawn against the schedule rather than paid up front. Budget the Tennessee transfer tax on top of that, because at $0.37 per $100 the buyer pays it and you are the buyer on the way in. Subject to underwriting.

Comfortably. We write fix and flip loans from $100,000 to $5,000,000. The Nashville metro median sale price of $495,000 sits comfortably inside that range, so most deals in the county clear the floor without a second thought. A very small outlying parcel can land under it. If that is your deal, tell us what else you are buying, because a small acquisition often travels with a rehab budget that carries the loan over the line. Rehab is funded up to 100% of budget and counts toward the total. Subject to underwriting.

Yes. First-time flippers are welcome, and that balance is exactly why the exit gets read hard. We run credit, but on an asset-based loan like fix and flip there is no minimum score, and it carries far less weight than it would at a bank. Weaker credit is usually met with lower leverage rather than a decline. There is no hard credit pull to start a conversation. What we read hardest is the budget and the exit, and on a first deal that matters more than usual: Nashville is closer to balanced than tight right now, at roughly 3 months of supply and 35 average days on market, so carry a real contingency and do not price the exit off the top of the comp set. Subject to underwriting.