Data USA counts 39,868 Memphis residents working in transportation and warehousing, the largest resident employment sector in a city of about 619,000. Health care and social assistance follows at 38,301. That is the tenant base behind every Memphis rental, and it explains why the city works for cash-out refinancing when you underwrite it as a cash-flow market and not an appreciation play.
DSCR Cash-Out Calculator
Run the cash-out numbers in Memphis, TN
Rate source: Freddie Mac 30-yr average via FRED® — Federal Reserve Bank of St. Louis · effective Sep 24, 2026
Prefilled with starting assumptions — enter your property’s value, balance, taxes, and insurance for a more accurate picture.
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As of Sep 24, 2026 · General Freddie Mac market benchmark, not a Lendmire loan offer. Property value, balance, taxes, and insurance are editable estimates. Maximum loan-to-value varies by lender, program, property type, and seasoning. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
Key Takeaways:
A DSCR cash-out refinance in Memphis, Tennessee is underwritten primarily on the property’s rental income measured against its full monthly obligation, so the number that matters is coverage on today’s rents, not forecast appreciation in a market where Redfin shows prices slightly down year over year.
- Cash-out LTV tops out at 75 percent, with about 6 months of seasoning from title recording.
- Redfin’s median sale price is $187K, down 2.2 percent year over year.
- Houses rent well above apartments here, per Zumper: $1,395 versus $1,000.
- Multifamily vacancy sits at 15.1 percent, so skip apartment-heavy plays.
Equity in Memphis Comes From Cash Flow, Not Appreciation
Memphis equity is mostly the equity you bought, plus the equity you created through rehab and stabilization. Don’t count on the market to add more. Redfin puts the median sale price at $187K, down 2.2 percent over the prior year, with homes averaging 36 days on market. Houzeo shows a higher $215,000 median, unchanged from last year, with sales at 96.29 percent of asking. The gap is methodology. This article uses Redfin’s figure as the headline.
Forecasts are modest at best. Norada expects Memphis to post the slowest home value growth among Tennessee’s major cities. Treat that as opinion, but it matches the flat readings above. The practical read for an investor who already owns: a cash-out here is sized off what the property appraises for and what its rent covers, and neither is going to bail out a thin file.
Rents don’t help either. RentCafe shows average apartment rent at $1,146, up just 0.15 percent, while Zumper reports average rents down 3 percent from a year earlier. Underwrite to today’s rent with zero growth. Houses renting at $1,395 against $1,000 for apartments is the real story, and it favors the workforce single-family niche.
Where the Coverage Math Holds Up
Frayser, North Memphis, South Memphis, Hickory Hill, and Whitehaven carry the strongest rent-to-value ratios in the city. They also carry the most repair and turnover exposure, so the coverage math only holds if the file is conservatively built.
North Memphis, ZIPs 38106 and 38107. Gemhaus puts 38107 at a $162,450 median list price and $1,195 median rent, an 8.83 percent gross yield, with a median of 282 days on market. That last number is a liquidity warning. Its neighbor, ZIP 38106, shows an $88,250 list price against $995 rent, a 13.53 percent gross yield. Those are gross yields from listing samples, not net returns.
The 38106 ratio is the strongest in the data, but a sub-$100K appraisal makes for a small loan. Smaller balances route through select lenders in the network, and thin comps can limit how much a cash-out actually delivers. Pricing like 38107 leaves more room for a loan that still covers with cushion. (Yes, the cheaper ZIP has the prettier yield. It doesn’t always have the better refinance.)
Frayser. Reedy & Company describes older single-family homes and modest duplexes, and RentCafe shows Frayser average rent at $765 a month, below the citywide figure. Employment demand is real: The Kirkland Company reported a $200 million, 855,000-square-foot Amazon distribution center in Frayser and Raleigh expected to employ 1,000. Frayser rewards investors who already hold a stabilized asset. It punishes anyone hoping a refinance will fund unfinished repairs.
South Memphis small multifamily. Listings there price small buildings around $1,180 per two-bedroom door. A fourplex at that level shows about $4,720 a month at full occupancy, and a six-unit building runs up to $7,080. These are asking rents. Lenders underwrite to the appraiser’s rent schedule, so treat them as a ceiling.
North Memphis multifamily. Same product type, very different math. Homes.com shows listings from $30,000 to $200,000, and one fourplex with three of four units occupied at $2,000 a month against $2,700 potential. That is roughly $670 a door versus $1,180 in South Memphis. Door count doesn’t create coverage. Rent per door and unit condition do.
Hickory Hill, Raleigh, and Whitehaven. Affordable entry points with tenants tied to the airport corridor and nearby employers. Reedy notes Whitehaven’s proximity to Memphis International Airport and several major employers. No clean neighborhood-level house rent figures exist here, so these areas call for property-level comps and not assumptions.
East Memphis, Cordova, Germantown, and Bartlett. Established suburban submarkets with medical and retail employment. No verified numbers in the research, so consider them a stability play, not a yield play.
Skip the Downtown Apartment Play
Skip Downtown and Midtown for cash-out math. IRR reports higher vacancy and subdued rent growth in both because of new supply. Citywide, Apartments.com estimates multifamily vacancy at 15.1 percent, second highest nationally, with deliveries below 1,000 units. MMG Real Estate Advisors reports effective rents fell 0.2 percent and projects only about 0.3 percent growth ahead.
The pipeline is shrinking, which helps eventually. TenantBase says multifamily starts dropped 60 percent year over year. But shrinking supply isn’t the same as absorbed supply. A lender reviewing a refinance on a larger apartment product will likely haircut rent and add vacancy, and the coverage number shrinks with it. Midtown does draw medical workers and University of Memphis affiliates, so a single-family or small-building hold there can work, but not at the prices that make the cash-out interesting.
Running the Numbers on a Seasoned Rental
Run the numbers on a house valued at $187,000, Redfin’s median, with a modeled rent of $1,395, Zumper’s house median. At 75 percent LTV, coverage lands in low-1.2 territory including taxes and insurance, using modeled Tennessee-average tax and insurance loads. Treat that as a modeled scenario, not a quote.
DSCR is monthly rent divided by the full monthly obligation: principal, interest, taxes, insurance, and any HOA dues. The standard benchmark is 1.00, and coverage above it doesn’t guarantee approval either way. Some lenders may review lower-coverage files with stronger credit, lower leverage, or more reserves, while others won’t. For the fundamentals, see the guide What Is a DSCR Loan, which explains how the ratio works.
Now the 38107 scenario. A $162,450 property renting for $1,195 at 75 percent LTV models out in the low-1.2 range as well, again including taxes and insurance. Higher-priced houses need proportionally higher rents to keep that ratio. The mechanical point: LTV, not rent, sets how much cash comes out. Rent sets whether the loan works at all.
DSCR files in markets like this one typically look the same: strong rent-to-value on paper, then appraisal and reserve requirements that determine the real proceeds. The stronger files come with a documented lease, a current rent schedule, and a realistic read on what comparable sales support. Investors who arrive with reserves already parked, about six months of PITIA on most files, avoid the late-stage surprises.
What Actually Caps the Cash-Out
Appraisal comps cap the cash-out more often than any lender guideline. Cash-out refinancing tops out at 75 percent LTV, typically requires about 6 months of ownership measured from title recording, and generally expects credit in the 620-and-up range, with better tiers at 660, 680, and 700. Loan sizes run up to $3,000,000 on standard programs. Those are the guardrails, subject to lender guidelines. The real limit is what the property appraises for.
Cheaper submarkets are where comps get thin. North Memphis’ median home price sits at $109,950, and multifamily listings there average 129 days on market with prices spanning $30K to $200K. Appraisers have few clean sale comps to work with, which caps how much value a rehab or seasoning period can show. Plan proceeds around conservative appraised values. Expect a smaller cash-out than the purchase-plus-rehab math suggests.
Proceeds should become down-payment capital for the next rental, not an unstructured cash pile. Investors weighing a refi against a sale can compare investor refinance options and the DSCR cash-out refi mechanics. A conventional path leans on personal income, and the guide “Where DSCR and Conventional Diverge” is worth a look for investors who already hold multiple financed properties. Investors should verify current local rental rules, taxes, and insurance with qualified local professionals.
The Demand Behind the Rents
The tenant profile is logistics and medical, not tourists or state government staff. FedEx runs its global air hub at Memphis International Airport, and We Are Memphis lists it as the largest employer in the metro. The Port of Memphis is the fifth-busiest inland water port in the country. On the medical side, St. Jude pledged $1.4 billion to expand its campus and hire 900 more employees, per Kirkland’s report. Baptist Memorial employs over 10,000 people.
The University of Memphis enrolls 19,652 students, and U.S. News shows 80 percent living off campus. That supports rental demand near campus. Renters occupy 55 percent of Memphis households, a deep tenant pool. Shift work and hospital schedules tend to support steady long-term leases, which is what a DSCR file wants to see.
Frequently Asked Questions
How do you qualify for a DSCR cash-out refinance on a Memphis rental?
Qualification centers on the property’s rent covering its full monthly obligation, with a typical benchmark around 1.00. Lenders also look at credit, generally starting near 620, about 6 months of seasoning, and roughly 6 months of PITIA in reserves. Cash-out LTV is capped at 75 percent. Everything is subject to lender guidelines, property review, and appraisal.
DSCR vs. conventional financing
Two common ways to finance an investment property in Memphis, TN. They qualify you differently — here’s how investors weigh them.
Why investors choose it
- Qualifies on the property’s rental income — no personal tax returns, W-2s, or pay stubs needed to document income.
- No personal debt-to-income ceiling to clear, so existing mortgages and obligations don’t cap your borrowing the same way.
- Can be closed in an LLC, keeping the property inside a business entity.
- Built for scaling — not held to the limit on number of financed properties that conventional financing applies.
- Underwriting centers on the deal: generally qualifies when the rent covers the payment, a 1.00x coverage ratio being a common baseline (confirmed in underwriting).
- Designed specifically for investment property, including long-term and, where the program allows, short-term rentals.
Where it’s strong
- Often the lowest ongoing financing cost for a buyer who fully qualifies on personal income — a fit for a first property or a cost-first purchase.
Trade-offs for investors
- Requires full personal income documentation and must fit within a debt-to-income limit — salary, existing debts, and other mortgages all count.
- Typically held in your personal name rather than a business entity.
- Caps how many financed properties you can carry, which can become a ceiling as a portfolio grows.
- Evaluates you as a borrower as much as the property, which usually means more paperwork.
How investors usually choose: a first or single property often optimizes for the lowest financing cost; portfolio builders often optimize for leverage, vesting in an LLC, and scaling past conventional caps. The right answer depends on your goals, the property, and current guidelines — both paths run through select lenders in Lendmire’s wholesale network, with eligibility and terms confirmed in underwriting.
What are the requirements for an investment property loan in Memphis, Tennessee?
Expect a lease or rent schedule, an appraisal, insurance, and a credit review. Eligible properties are typically single-family, condos, and 2-4 unit rentals. Manufactured homes, log homes, and barndominiums fall outside these programs. Borrowers can often close in an LLC, subject to lender program eligibility. More on the state side at DSCR loans in Tennessee.
Does a low-priced Memphis house limit how much cash I can pull out?
Yes. A sub-$100K appraisal produces a small loan, and 75 percent of a small value is a small check. Smaller balances route through select lenders in the network, and thin comps in areas like North Memphis can pull appraised value lower. Higher-priced stabilized houses generally produce more usable proceeds and more coverage cushion.
Should Memphis investors count on appreciation to build cash-out equity?
No. Redfin shows prices slightly down year over year, and Houzeo shows flat. Forecasts run at a modest pace. Build equity through purchase price, rehab, and stabilization, then size the refinance off conservative appraised value.
Can Lendmire help structure a DSCR cash-out refinance scenario for a Memphis rental property?
For current guidelines and terms, see Lendmire’s DSCR loan programs page.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage brokerage focused on DSCR investor financing, helping arrange programs through wholesale and investor-lending channels in 41 markets, including Washington, D.C. DSCR loans are evaluated by the lender on property cash flow rather than personal income, subject to lender guidelines, supporting LLC closings and accommodating investors with four or more financed properties. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
2. Redfin, Memphis Housing Market
3. Zumper
4. Houzeo, Memphis Housing Market
5. Norada
6. RentCafe, Memphis Average Rent
11. Homes.com
12. IRR
13. Apartments.com, High Vacancy Markets
15. TenantBase
16. We Are Memphis
17. University of Memphis, Facts at a Glance
18. 2025
19. 2026
This article is part of Lendmire’s investment property cash-out refinance program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: DSCR Cash Out Refinance Cordova Tennessee: Access Equity Without Income Docs · DSCR Loans Memphis: Investor Financing for Beale Street, Medical District, Midtown & Real Estate Investors · Cash Out Refinance Investment Property Cordova Tennessee
Guides: Investment Property Cash-Out Refinance in Memphis, TN · Investment Property Cash-Out Refinance in Tennessee
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.