New Construction in Tennessee (Memphis and Nashville)

[Jamie Parker]

New construction in a city like Nashville was and has been a staple in how I started my journey as wholesaler. Wholesaling in Nashville was my first experience into the world of real estate investing. Understanding zoning, and land uses has been the extent of my experience. 

If you are familiar with Nashville, The Nations, is what i think of. Doing my first wholesale deal in 2016, at that time there were builders buying blocks of houses from residents and doing new construction. That was almost 8 years ago. I would argue that the development prior to that when as far back as 2014 for new construction. Turning an entire neighborhood where over 80% of the homes are new construction dating back to least 2015 till now, over a span of ten 10 years.

Building houses is required to initiate a major gentrification process of a neighborhood, but the guy that invented tires didnt invent cars as we see them today. In the 10 year process new construction exit prices were 350K- 420K during 2016-2017, by 2019, 499K-520k were starting to move. 5 years later ( accounting for COVID and mortgage rate changes) prices are up around 650-800K in the same area. 

In Memphis Tennessee, would I ever think this would be the place to start something like that 10 years ago, NO. But today, I have a different attitude towards a major infill redevelopment of an area in Memphis. While there are at least 5 other areas that could be a launchpad for a project of this magnitude; XAi, BlueOval(Ford) and major zoning proposals changes to increase density, specifically. According to my thesis on the subject $80MM investment over 10 years resulting in 30 new homes per year would be the ticket. 

Has anyone ever initiated or been close to ground level in a major redevelopment of a neighborhood?

How did you chose that area?

How did you get past the first year or two?

What were the initial sales price in the very beginning? 

I appreciate any thoughts on the topic.