Question 1

What do Tennessee's closing taxes add to a flip budget?

Accepted Answer

Two lines most out-of-state flippers forget. Tennessee taxes the deed and the note separately. The realty transfer tax is $0.37 per $100 of the greater of consideration or value and the buyer pays it by statute, not the seller. The indebtedness tax is $0.115 per $100 of the debt, first $2,000 exempt, and the borrower pays it. On a $250,000 buy with a $225,000 loan that is $925 on the deed (250,000 / 100 x 0.37 = 925) plus $256.45 on the note (223,000 / 100 x 0.115 = 256.45). You pay the transfer tax again as the seller's grantee pays it on the exit, which is to say your buyer carries that one. Also worth knowing: a sworn consideration statement appears on the deed face, false statements are punishable as perjury, and the Department of Revenue runs a discovery program comparing sworn deed values against assessor values. Understated intra-entity transfers get caught there.

Question 2

Can you fund a Tennessee trustee's sale purchase, and how much lead time do I get?

Accepted Answer

Yes, and the publication schedule is your calendar. Tennessee forecloses non-judicially under a deed of trust. TCA 35-5-101 requires advertisement at least three different times in a newspaper published in the county, with the first publication at least 20 days before the sale, and the trustee must mail notice to the debtor by registered or certified mail on or before that first publication. A sale can be adjourned without republishing if it is rescheduled within a year and announced at each date, with mailed notice at least 10 days ahead when it moves more than 30 days. So you generally get roughly three weeks of public notice, and money has to be committed before the sale rather than after. We issue a term sheet the same day and most fix and flip files land at 5 to 7 days once title and insurance come together. Apply now when you see the first advertisement, not the week of the sale. Subject to underwriting.

Question 3

Who closes a Tennessee flip, and can the seller pick the closer?

Accepted Answer

A title or escrow company usually closes it, and since July 1, 2025 the buyer picks. Tennessee is a title and escrow state, the clean opposite of an attorney-closing state: no attorney is required to close, and transactions are customarily handled by title companies and escrow agents staffed by non-attorneys. One line does stay with lawyers. Drafting a deed for someone else is the practice of law in Tennessee under TCA 23-3-103, so non-attorney staff may prepare closing and title-policy documents but not that. The 2025 change matters on a wholesale or assigned contract: legislation effective July 1, 2025 gives the buyer or borrower the right to choose the settlement agent, subject only to lender approval, and a seller may not require a particular one. That protection cannot be waived by agreement. The seller may still retain its own attorney for deed preparation and document review.

Question 4

How do I insure a vacant Tennessee property under renovation?

Accepted Answer

Through surplus lines, and start that conversation on day one. Tennessee is in the minority of states with no state FAIR plan and no property insurer of last resort, so hard-to-place risk has no public backstop and a vacant or under-renovation house goes straight to the surplus-lines market. The dominant perils here are tornado, straight-line wind and hail rather than coastal storm, and Middle Tennessee has documented major outbreaks in March 2020 and December 2023. Wind and hail sit inside the standard homeowners form rather than being carved out to a separate windstorm policy, but percentage wind and hail deductibles of roughly 1 to 5 percent of dwelling coverage are common, which is the number that shows up in an actual loss. Get a real quote for the specific address and the specific vacancy period. We do not publish a Tennessee average premium, because the available figures conflict badly.

Question 5

Will my property tax bill reset to what I paid?

Accepted Answer

No. Tennessee has no acquisition-value reset on sale. Values are frozen between countywide reappraisals, and counties run a six-year cycle, or a four-year cycle with State Board of Equalization approval, or a five-year cycle if the assessor agrees and the county legislative body votes it. So the assessed value you inherit is the one from the last reappraisal, not your purchase price, and your carry on a 6-month hold is fairly predictable. Residential property is assessed at 25 percent of value, commercial and industrial at 40 percent. None of Tennessee's relief programs, the elderly and disabled freeze and tax relief, reach an investor, and there is no homestead-style cap for you to lose because there was never one on the parcel. Check the county cycle before you model the hold, and use the fix and flip calculator to run the whole deal.

Question 6

Can I hold a Tennessee flip in a family LLC and skip franchise and excise tax?

Accepted Answer

Not as a flipper. This is the trap in the FONCE exemption. Tennessee's family-owned non-corporate entity exemption relieves an LLC or LP from franchise and excise tax when at least 95 percent is owned by family members or qualifying trusts and at least 66.67 percent of receipts are passive investment income. Here is what kills it for you: capital gains on real estate sales are non-passive in Tennessee regardless of federal treatment, so selling a property can blow the test for that year, and flipping and operating income are non-passive too. A flipper cannot rely on FONCE at all. Absent an exemption the entity owes excise at 6.5 percent of Tennessee net earnings and franchise at 0.25 percent of net worth with a $100 minimum. Tennessee does follow federal section 1031 and opportunity-zone deferral for excise purposes. Take this one to a Tennessee CPA before you form the entity.

Question 7

What credit score do I need for a Tennessee fix and flip loan?

Accepted Answer

There is no minimum score on this program. We run credit, but on an asset-based loan it carries far less weight than it would at a bank. The file turns on the property, the rehab budget and the after repair value. Weaker credit is usually answered with lower leverage rather than a decline, and there is no hard credit pull to start. For what your submarket is actually doing on resale, read the metro page, for example Nashville fix and flip. Subject to underwriting.

Question 8

How much cash do I need to bring to a Tennessee flip?

Accepted Answer

Roughly 10% of the purchase, plus closing costs and a contingency. We fund up to 90% of the purchase price and up to 100% of the rehab budget, capped to ARV. On a $300,000 purchase that is up to $270,000 from us and $30,000 from you (300,000 x 90% = 270,000), with rehab drawn against the schedule rather than paid up front. Add the Tennessee closing taxes to your cash: $0.37 per $100 on the deed and $0.115 per $100 on the debt after the first $2,000. Subject to underwriting.

Question 9

What is the smallest Tennessee flip you can fund?

Accepted Answer

$100,000 is the floor and $5,000,000 is the ceiling. Below $100,000 the fixed cost of a closing eats the deal for both of us, and Tennessee has real inventory under that line, so check the number before you tie up a contract. The term is 6 months, interest-only, and that window has to cover rehab, listing and a price reduction, not just the construction schedule. Subject to underwriting.

Question 10

Can I get a Tennessee fix and flip loan on my first deal?

Accepted Answer

Yes. First-time flippers are welcome on this program. The file is underwritten on the property, the budget and the exit, so a thin track record is not a decline by itself. Expect it to show up in leverage rather than in a yes or no, and expect harder questions about your contractor and your ARV support. Bring closed comps, a line-item rehab budget, and a real insurance quote for a vacant property, because Tennessee has no insurer of last resort to fall back on. Subject to underwriting.

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