Most Memphis investors buy single-family homes, but the city also has a quieter stock of small multi-unit buildings: brick duplexes and fourplexes from the 1920s to 1950s in Midtown, newer side-by-side duplexes in the eastern suburbs, and converted houses near the University of Memphis.
In short: LendingStreet finances Memphis-area duplexes, triplexes and fourplexes with DSCR loans that qualify on the combined rent of all units, with no W-2s or tax returns and LLC borrowers allowed. Loans start at $150,000 with no stated maximum, purchases go up to 80% LTV and the standard minimum DSCR is 1.0x. Memphis rents relative to prices mean many small multi-unit buildings here can clear that bar at normal leverage.
Midtown holds most of the city's older small multi-unit stock. Brick fourplexes and up-down duplexes line streets in Cooper-Young, Central Gardens, Evergreen, Vollintine-Evergreen and around Overton Square, often in walkable blocks near restaurants and the Overton Park area. Many have hardwood floors, radiators or older HVAC and detached garages.
Near the University of Memphis, in Highland Heights and around the Highland strip, duplexes rent to students and staff. In Cordova, Bartlett and Hickory Hill, newer side-by-side duplexes built from the 1970s onward rent to families. Some investors also buy duplexes in Southaven and Horn Lake, across the Mississippi line.
Prices vary widely. A renovated Midtown fourplex near Overton Square can cost several times what a duplex in Frayser or Whitehaven costs, and the rents differ accordingly. The lower-priced buildings can show strong ratios on paper but often need more repair, more management and more turnover budget.
Memphis and Shelby County share a Unified Development Code that sets which districts allow two-family and multi-family use. Many older Midtown fourplexes were built before current rules and may be legal nonconforming uses, and parts of Midtown are in historic overlay districts with their own review for exterior changes. Confirm the legal unit count with the city's records and ask for permits on any conversion.
Lenders and appraisers count legal units only. A basement or garage apartment that was never permitted may not count toward rent.
If you plan to add a unit or convert a large Midtown house into a duplex, talk to the city about the zoning and permit path first. That work usually calls for a short-term renovation loan, followed by a DSCR refinance once the units are leased.
This example is illustrative and not a quote. An investor buys a 1940s brick fourplex in Midtown for $420,000. Two units rent for $1,050 and two for $1,000, for $4,100 a month. City and county taxes are budgeted at $560 a month and insurance at $330, reflecting the building's age.
At 80% LTV the loan is $336,000. Estimated principal and interest is about $2,349, the total payment is about $3,239 and DSCR is about 1.27x. At 75% LTV the loan is $315,000, the payment is about $3,093 and DSCR is about 1.33x.
Insurance is the line to check early. On an older Memphis building, a quote that comes in well above budget can move the ratio more than a small change in rent.
| Item | 80% LTV | 75% LTV |
|---|---|---|
| Loan amount | $336,000 | $315,000 |
| Estimated principal and interest | $2,349 | $2,203 |
| City and county taxes | $560 | $560 |
| Insurance | $330 | $330 |
| Total payment | $3,239 | $3,093 |
| Monthly rent | $4,100 | $4,100 |
| DSCR | About 1.27x | About 1.33x |
Tennessee assesses residential property at a 25% assessment ratio. A building inside Memphis pays both city and Shelby County taxes; one in Bartlett or Cordova's unincorporated areas pays a different combination. Shelby County reappraises on a regular cycle, and Midtown values have risen in recent cycles, so use the current bill and ask when the next reappraisal takes effect.
Tennessee also charges a transfer tax on deeds and a tax on recorded mortgages, which add to closing costs on a purchase.
Most Midtown fourplexes are 70 to 100 years old. Common issues include aging electrical service, galvanized or cast-iron plumbing, foundation settling in clay soils, older roofs and window units in place of central air. Pre-1978 buildings also need lead paint disclosures.
Midtown units rent to young professionals, medical district staff and graduate students who want to live near Overton Square, Cooper-Young and Crosstown Concourse. Suburban duplexes rent to families who want schools and yards. Student-oriented duplexes near the University of Memphis turn over more often.
Use current leases or a market rent estimate for each unit. In older buildings, below-market rents from long-time tenants are common, and the ratio is based on what the building earns.
Tennessee's landlord-tenant law applies in Shelby County, and it sets rules on notice, deposits and entry. If you plan to raise rents or turn over units after buying, plan the timing within those rules, especially before a refinance.
Memphis also has small apartment buildings with five to eight units, especially in Midtown. These are still residential for our programs, with max LTV that can be lower; see our Memphis 5-8 unit page. If you own five or more rentals, including single-family homes, a blanket portfolio loan can put them under one payment.
Many Midtown fourplexes have been held for years by owners who bought at far lower prices. A cash-out refinance up to 75% LTV can free equity for the next purchase if current rents cover the new payment, and a rate-and-term refinance up to 80% LTV on some programs can replace a maturing bank loan. Cash-out seasoning varies by program, so check timing if you bought recently.
Our DSCR loans offer 30-year terms, purchase up to 80% LTV, cash-out up to 75% LTV and a 620 minimum credit score. Sub-1.0 DSCR programs exist for buildings that fall a little short. Send the address, price and unit rents through the form below, or call (877) 298-1001, and we will show the ratio at a few loan amounts.
Yes. Fourplexes qualify on the combined rent of all four units, with no W-2s or tax returns.
$150,000, with no stated maximum.
Not directly, but exterior work may need design review, which can change your renovation budget and timeline.
Usually not. Lenders count legal units.
Age, roof, wiring and plumbing all affect Memphis premiums. Get quotes early and include them in your numbers.
Yes. We lend in Mississippi as well, and multi-state blanket loans are possible on some programs.
No. Our investor loans are business-purpose loans on non-owner-occupied property.
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