Buy a Gas Station in Memphis, TN

The Memphis Gas Station Market

Memphis sits at the intersection of I-40 and I-55, making it one of the most logistics-dense cities in the South. High truck and commuter traffic translates directly into fuel volume, which is the single biggest driver of gas station revenue.

There are currently 51 active gas station listings in this market, with asking prices ranging from $139,000 to $216,000,000. The wide spread reflects everything from single-pump rural carryovers to full-service travel plazas with convenience stores and food service attached.

The median asking price of $750,000 is where most serious buyers should focus. That number represents stabilized, owner-operated stations with a functioning c-store and documented fuel volume history.

Deal Economics for a Memphis Gas Station

The median cash flow across Memphis-area listings runs approximately $197,859. At a $750,000 asking price, that implies a 3.4x multiple, which sits comfortably in the SBA 7(a) acquisition sweet spot of 3x to 5x.

Here is what the financing structure looks like on a $750,000 deal:

• Asking price: $750,000
• SBA 7(a) loan (85%): $637,500
• Seller note on full standby at 0% interest (10%): $75,000
• Buyer cash (5%): $37,500
• Total equity injection (10%): $75,000 ($37,500 cash + $37,500 seller note acting as equity)

At approximately 10.5% over a 10-year term, the $637,500 SBA loan carries annual debt service of roughly $104,000 to $107,000. Against $197,859 in cash flow, that yields a DSCR of approximately 1.85x to 1.90x. That clears our 1.5x floor with room, though it falls short of our 2.0x target.

A deal at this DSCR is financeable, but there is not a lot of cushion. Target stations with documented cash flow above $210,000, or negotiate the price down to improve coverage.

These are rough estimates based on market data. Actual terms depend on individual qualification and lender.

What to Look for When Buying a Memphis Gas Station

Fuel volume is the real revenue driver, and it is verifiable. Ask for 24 months of fuel delivery receipts from the supplier. That number does not lie the way SDE figures can.

SDE from listing brokers tends to run inflated on gas station deals. Apply a 15% to 30% discount before you build your debt service model. Environmental liability is the other major risk. Tank age, leak history, and Phase I environmental reports should be reviewed before you sign a letter of intent.

The c-store margin is what separates a mediocre gas station from a strong one. Lottery, tobacco, and food service can add $40,000 to $80,000 in annual cash flow on top of fuel income. Look for stations with underdeveloped c-store operations if you want a value-add play.

Memphis-Specific Considerations

Memphis has a relatively low median household income of $51,211, which affects c-store sales mix. Stations near major corridors (I-40, I-55, Highway 78) serve a different customer base than neighborhood stations in residential areas. Corridor stations carry higher fuel volume but also more competition from branded operators.

Branded vs. unbranded matters for SBA financing. Some lenders have restrictions on fuel supply agreements with mandatory minimums, which can affect cash flow projections. Review the fuel supply contract before the LOI, not after.

Tennessee has no personal income tax on wages, which benefits owner-operators. The state's business climate is generally favorable for small business acquisitions, and SBA lenders are active in the Memphis market.

Frequently Asked Questions

How much does it cost to buy a gas station in Memphis?

The median asking price for a gas station in Memphis is approximately $750,000, though active listings range from $139,000 to well above $1,000,000. Price depends heavily on fuel volume, c-store revenue, real estate inclusion, and brand affiliation. Real estate-included deals typically command a premium of 20% to 40% over lease-only transactions.

What cash flow can I expect from a Memphis gas station?

Median verified cash flow across Memphis-area listings runs roughly $197,859 annually before debt service. Stations with active c-stores, food service, or car washes can push above $250,000. Fuel-only stations with no ancillary revenue typically come in lower, often in the $80,000 to $130,000 range.

Can I use SBA financing to buy a gas station in Memphis?

Yes. Gas stations are SBA 7(a) eligible when they meet basic underwriting criteria. The standard structure is 85% SBA loan, 10% seller note on full standby at 0% interest, and 5% buyer cash. On a $750,000 deal, that means $37,500 out of pocket at close. Environmental contingencies from tank age or prior leaks can complicate lender approval.

What should I look for in a gas station's financial records?

Fuel delivery receipts from the distributor are the most reliable revenue verification tool. Request 24 months minimum. Cross-reference with point-of-sale data from the c-store and lottery terminal reports. SDE figures from brokers often include add-backs that do not hold up under scrutiny, so build your model on conservative cash flow, not headline SDE.

How long does it take to close on a gas station acquisition in Memphis?

A gas station acquisition with SBA financing typically takes 60 to 90 days from signed LOI to close. Environmental review and fuel supply contract assignment are the two most common sources of delay. Deals involving real estate transfer can add another 2 to 4 weeks due to title and appraisal requirements.

Considering a Gas Station Acquisition in Memphis?

Regalis Capital's deal team reviews 120 to 150 deals per week across the country. We handle sourcing, due diligence, deal structure, SBA lender placement, and negotiation from start to close.

If you are looking at a Memphis gas station and want to run the numbers properly, start with a free deal assessment.