Tennessee situation guide · Updated November 2026

Wholesaling Seller-Financed Deals in Tennessee

Wholesaling seller-financed deals in Tennessee means contracting with an owner who will carry the loan, then assigning that contract to a buyer who wants those terms. The seller acts as the bank and collects monthly payments. The buyer gets flexible credit terms. Tennessee has rules on interest, taxes and disclosure that shape how you write the deal. Our seller financing guide explains the basics.

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The short answer

Can you wholesale a seller-financed deal in Tennessee?

Yes, you can assign a contract with seller financing terms, if you give the written disclosures that T.C.A. 66-4-403 requires. An attorney or title company should prepare the note and deed of trust.

In seller financing, the buyer signs a promissory note and a deed of trust in favor of the seller and pays over time. Your contract sets the price, down payment, rate and term. Your assignee steps into those terms. Our seller financing contract guide shows what to include.

Interest matters. Under T.C.A. 47-14-103, a written, signed contract can use the applicable formula rate, while other transactions are capped at 10% a year. Check current rules for your deal and keep the rate in the document. Our balloon payment guide covers common term shapes.

Seller-Financed Deals in Tennessee at a glance

Paperwork	Promissory note and deed of trust
Interest	Written contracts: formula rate; others: 10% cap
Recordation tax on deeds	$0.37 per $100
Tax on deeds of trust	$0.115 per $100 of debt; first $2,000 exempt
Disclosure act	Covers installment land contracts on 1 to 4 units
Wholesaling law	T.C.A. 66-4-401 to -403

The opportunity

Why seller-financed deals work in Nashville

Davidson County has high prices and long-time owners with large equity. Many of them own homes free and clear and do not need a lump sum. Monthly income secured by a home they know is easy to understand. Buyers who cannot meet bank rules, such as self-employed investors, will pay a fair price for terms. Prices and rates move quickly, so check current data. Our installment sale guide covers the tax side for sellers.

Free-and-clear owners

Owners with no mortgage can carry the whole note.

Estate sellers

Heirs who want steady income may prefer a note. See our probate leads guide.

Tax timing

Spreading a sale over years may soften the tax bill, subject to advice from a tax professional.

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Lead sources

Where to find seller-financed leads in Tennessee

Free-and-clear owners. County records show homes with no loan. See our owner lookup guide.
Tired landlords. Landlords who want income without repairs may like a note. Try our absentee owner guide.
FSBO sellers. Some owners advertise that they will consider terms.
Land and rural owners. Owner financing is already common for land. See our land guide.
Retirees. Older owners often want income more than a lump sum.

Your exit

Who buys seller-financed deals in Tennessee

Landlords who prefer a low down payment and buyers who struggle with bank loans are common. Terms matter as much as price, so ask each buyer how much they can pay down and how long they will hold.

Use a third-party servicer to collect payments and send statements. It protects the seller and gives the buyer a clean record if they later refinance. Our note investing guide explains how notes can later be sold.

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Step by step

How to start wholesaling seller-financed deals in Tennessee

Learn the seller’s goals. Ask about income, down payment and timeline.
Set the terms. Agree on price, down payment, rate, term and any balloon.
Check interest rules. Confirm the rate against T.C.A. 47-14-103 with an attorney.
Run the numbers. Use the ARV calculator and the MAO calculator.
Write the contract. Add the bold disclosures about marketing your equitable interest.
Give notice. Tell the seller the assignment date at least 3 business days ahead.
Close and service. Close at an investor-friendly title company and set up servicing.

Your checklist for wholesaling Seller-Financed Deals in Tennessee

Write every financing term into the contract.
Check the rate against the interest statute.
Budget for recordation tax on the deed and on the deed of trust.
Set up a loan servicer before closing.
Get legal advice if the buyer will live in the home.

A Tennessee example: a Nashville retiree who wanted monthly income

Price	$385,000
Down payment	$40,000
Seller note	$345,000 at 6.5%
Balloon	Due in year 7
Assignment fee	$15,000
Seller’s monthly payment	About $2,180 for principal and interest

A retired teacher in East Nashville owned a bungalow with no mortgage. She wanted monthly income and did not want a big one-year tax bill. Her house needed work and she did not want an agent.

You agreed on $385,000 with $40,000 down and a 6.5% note. An attorney drafted the note and deed of trust. Your contract had bold disclosure that you might assign it.

A local landlord took the assignment for a $15,000 fee. The seller got her 3 business day notice and a servicer now sends her payments. All numbers are illustrative.

Tennessee rules to know

Interest, taxes and disclosure in Tennessee

The recordation tax is $0.37 per $100 on a deed, paid by the grantee. A deed of trust is taxed at $0.115 per $100 of debt, with the first $2,000 exempt, under T.C.A. 67-4-409. Seller disclosure rules cover sales, installment land contracts and lease-options on residential property of 1 to 4 units. A disclaimer works only if the buyer waives the disclosure.

Residential lending licensing and federal rules for owner-occupant buyers may apply to sellers who finance, and those exemptions are not covered here. Check current rules. See our wrap-around mortgage guide and the contract for deed guide for related structures.

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Shape terms that protect everyone

Seller finance deals live in the details. Our students send us term sheets and we help them check the structure.

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FAQ

Seller-Financed Deals in Tennessee: common questions

Is wholesaling seller-financed deals in Tennessee legal?

Yes, when the paperwork follows Tennessee law and the 2025 disclosure rules. Your contract sets the price, down payment, rate and term, and your assignee steps into those terms, so an attorney or title company should prepare the note and deed of trust. Check current rules with an attorney.

What interest can a seller charge?

T.C.A. 47-14-103 allows the applicable formula rate on written, signed contracts and caps other transactions at 10% a year. Keep the rate in the document, and check current rules for your deal, since written contracts and other transactions are treated differently.

What taxes apply to the note?

A deed of trust is taxed at $0.115 per $100 of debt, with the first $2,000 exempt, and the deed carries $0.37 per $100. The recordation tax is paid by the grantee, so ask the closing attorney how both taxes apply to your note.

Should I use a loan servicer?

Yes. A servicer tracks payments, sends statements and protects both sides. The buyer pays over time on a promissory note, so a servicer also gives the seller a clear record, which suits owners who want monthly income instead of a lump sum.

Can I assign a contract with seller financing?

Yes, with written disclosure to the seller and notice at least 3 business days before the assignment takes effect. The terms must be in bold, large print in the agreement, and your assignee steps into the financing terms, so describe them clearly.