Acquiring a traditional single-family residential home on a 0.37-acre lot in South Memphis for an asking price of $17,000 ($20 per square foot) represents an entry-level price point for experienced real estate investors. Located at 5085 Clinton Rd, Memphis, TN 38109 in Shelby County (Old Home Town subdivision), this property is listed at a deep discount—reflecting the need for a full, comprehensive rehabilitation.
Currently tenant-occupied on a month-to-month lease generating $500/month, this property offers cash flow from day one. However, realizing its maximum value will require an experienced rehab team to execute a capital overhaul to bring the home up to modern rental standards and capture local market rents ($850–$950/month).
Below is a detailed breakdown covering property specifications, investment dynamics, financial metrics, neighborhood fundamentals, and a final buyer verdict.
Property Specifications at a Glance
| Property Attribute | Property Specification | Investment Context & Highlights |
|---|---|---|
| Listing Price | $17,000 ($20 / Sq. Ft.) | Deep discount entry price for cash flow investors |
| Location & Subdivision | 5085 Clinton Rd, Memphis, TN 38109 | Old Home Town Subdivision (Zip Code 38109) |
| Interior Footprint | 858 Sq. Ft. Livable Area | 2 Bedrooms / 1 Full Bathroom (Built 1951) |
| Lot Size & Dimensions | 0.37 Acres (110′ x 150′ dimensions) | Expansive double-wide lot providing yard space |
| Construction Style | Single-Story Traditional Brick Veneer | Durable exterior shell requiring lower maintenance |
| Current Occupancy | Tenant Occupied ($500/mo Month-to-Month) | Immediate baseline cash flow upon closing |
| Condition | Needs Full Rehabilitation | Ideal for BRRRR (Buy, Rehab, Rent, Refinance, Repeat) |
| Heating & Cooling | Window Units & Space Heating | Upgrading to Central HVAC will drive value |
| Annual Tax Burden | $478 / Year (~$40 / Month) | Exceptionally low fixed holding tax overhead |
Core Value Drivers: Why This $17,000 Deal Has Equity Potential
1. Extremely Low Acquisition Basis ($17,000 Baseline)
The primary advantage of this listing is the sub-$20,000 price point. In Memphis, unimproved 0.37-acre residential infill lots in Zip Code 38109 frequently trade for $8,000 to $12,000 alone. Acquiring a brick-veneer single-family shell on nearly 0.4 acres for $17,000 means you are buying the underlying real estate near raw land value while receiving the physical structure at a nominal price.
2. Immediate Cash Flow & Tenant Flexibility
- $500/Month Day-One Revenue: The home is currently occupied by a month-to-month tenant paying $500 per month. This tenant income offsets holding costs while you draw up architectural plans, secure permits, and line up contractors.
- Tenant Choice: The tenant is willing to stay or vacate, giving the buyer the choice to either maintain baseline income or request vacant possession to begin a full interior renovation.
3. Generous 0.37-Acre Lot Footprint
Most urban Memphis infill lots measure between 0.12 and 0.18 acres. At 0.37 acres (16,117 sq. ft.), this property features an expansive 110′ x 150′ lot. This provides ample off-street parking, room for adding a carport or storage shed, or potential for future building expansion.
Critical Limitations & Capital Requirements to Consider
A disciplined real estate analysis requires looking past the $17,000 purchase price to evaluate the full scope of rehab capital required to maximize returns.
1. Full Rehabilitation Scope ($35k – $50k Budget Needed)
The listing explicitly specifies that the house needs a full rehab. To reposition this 858 sq. ft. home to achieve market-rate rents ($850–$950/mo) and qualify for a conventional cash-out refinance, investors should budget for:
- Mechanicals & Systems: Installing a new central HVAC system (replacing window units), upgrading the electrical service panel, and updating PEX/PVC plumbing drops.
- Interior Finishes: Complete kitchen rebuild (cabinets, countertops, appliances), full bathroom overhaul, new luxury vinyl plank (LVP) flooring, drywall repair, and fresh interior paint.
- Exterior & Roof: Roof inspection/replacement, fascia/soffit repairs, window updates, and landscaping cleanup.
2. Low Initial Rent Roll Relative to Market
- Below Market Rent: The current $500/month rent sits well below the 38109 area median for 2-bedroom single-family homes ($850–$950/mo). To achieve maximum yield, a post-rehab rent adjustment will be required.
Financial Analysis & BRRRR Proforma
To evaluate 5085 Clinton Rd, we must look at the total all-in investment basis relative to market comps and rental cash flows in Shelby County.
Estimated All-In Investment Basis
| Financial Parameter | Estimated Amount | Calculation Basis & Notes |
|---|---|---|
| Purchase Price | $17,000 | Cash acquisition price |
| Closing & Title Fees | ~$2,000 | Estimated closing costs & title insurance |
| Estimated Rehabilitation Budget | ~$40,000 | Complete interior & system overhaul ($46/sq. ft.) |
| Total All-In Basis | ~$59,000 | Total capital deployed |
Income & Cash Flow Proforma (Post-Rehab)
| Revenue / Expense Category | Estimated Monthly Amount | Calculation Basis & Notes |
|---|---|---|
| Post-Rehab Market Rent | $900 / Month | Conservative rent benchmark for updated 2-bed in 38109 |
| Property Taxes | -$40 / Month | Based on Shelby County annual tax bill ($478/year) |
| Hazard Insurance | -$55 / Month | Estimated landlord insurance policy |
| Property Management (10%) | -$90 / Month | Professional local property management fee |
| Maintenance / Capital Reserve (10%) | -$90 / Month | Ongoing maintenance & capital reserve allocation |
| Net Operating Income (NOI) | ~$625 / Month | ~$7,500 Annual Net Cash Flow |
Returns Takeaway:
At a $59,000 all-in investment basis generating $7,500 in annual Net Operating Income, this project yields an impressive 12.7% Unleveraged Cap Rate (Cash-on-Cash Return). Fully renovated 2-bedroom homes in this corridor trade between $65,000 and $80,000, allowing an investor executing the BRRRR strategy to pull out most (or all) of their initial capital via a cash-out refinance.
Location & Neighborhood Context: Memphis 38109
Located in the Old Home Town subdivision in South Memphis, the property offers proximity to major employment corridors and industrial transportation hubs.
| Landmark / Employment Hub | Distance / Drive Time | Strategic Tenant Appeal |
|---|---|---|
| Memphis International Airport / FedEx Hub | ~15 Minutes | World’s busiest cargo hub; major local employer |
| I-55 / I-240 Highway Corridors | ~8 Minutes | Quick commuter access north to Downtown Memphis & south to MS |
| Downtown Memphis | ~15 Minutes | Medical centers, entertainment districts, and hospitality jobs |
| Whitehaven Commercial Center | ~10 Minutes | Shopping centers, grocery stores, dining, and healthcare services |
Pros vs. Cons Analysis
The Pros (Why You Should Buy)
- Low Sub-$20k Acquisition Cost: Minimal cash required to take title to a brick single-family home on 0.37 acres.
- Immediate $500/Mo Cash Flow: Month-to-month tenant covers carrying costs immediately.
- Substantial Equity Upside: All-in basis (~$59k) sits safely below renovated market value comps ($65k–$80k).
- Strong BRRRR Potential: High cap rates (12%+) once fully renovated and re-rented at market rates ($900/mo).
- Microscopic Property Taxes: Annual taxes sit at an affordable $478 per year (~$40/month).
The Cons (Key Risks to Factor In)
- Requires Full Renovation: Must have a reliable local contractor and $35k–$50k in liquid rehab capital ready.
- Current Rent Below Market: $500/month rent requires eventual tenant turnover or lease renegotiation to reach full yield potential.
- Window Unit Upgrades Needed: Lacks central HVAC; installing split system or central air will maximize tenant retention.
Final Investment Verdict & Purchase Strategy
The Verdict: RECOMMENDED FOR EXPERIENCED INVESTORS — An outstanding deep-value buy for real estate rehabbers, BRRRR strategists, or portfolio builders seeking high double-digit cash-on-cash returns under $20,000.
5085 Clinton Rd offers an unbeatable risk-to-reward entry point in the Memphis cash-flow market. Acquiring a brick home on nearly 0.4 acres for $17,000 with immediate tenant income allows an investor to build substantial equity through a strategic rehabilitation.
Suggested Action Steps:
- Conduct a Contractor Walkthrough: Inspect the roof framing, foundation/crawlspace, electrical panel, and plumbing lines to finalize your line-item rehab budget.
- Review Tenant Lease Status: Verify the month-to-month payment history and estoppel agreement with the listing agent.
- Submit a Clean Cash Offer: Given the recent price drop from $24,300 down to $17,000, submit a quick-closing cash offer at $15,000 to $17,000 with a 7-day inspection contingency.
Listed on Zillow