They say everything’s bigger in Texas, and that’s certainly the case when it comes to the fix-and-flip industry in the state.
Texas laws are well-known to be investor-friendly and there are some truly amazing locations to pick from. With that being said, Texas is frankly gigantic—making choosing the right real estate market best suited for your individual investment strategy somewhat challenging.
To make that process a little more manageable, we’ve compiled three of the leading real estate investment markets to kick off your search for your next fix-and-flip project.
But before we get to those, let’s look at some important points for any real estate investor looking to break into the Texas market.
Is Fix and Flipping in Texas Profitable?
Fix and flip projects can be lucrative, but the success of such investments depends on the location and market conditions. In Texas, there are a number of markets that offer investors with potential for profits through fix and flip deals.
Texas is one of the fastest-growing states in the United States, and many investors are looking to capitalize on the increasing demand for housing. With a booming economy and population growth, Texas is an ideal place to invest in a fix-and-flip investment property.
How do Fix and Flip Loans Work in Texas?
Fix and flip loans are designed to help investors purchase, renovate, and resell a property for a profit. In Texas, these loans are typically short-term loans with high interest rates that allow investors to quickly access the funds they need.
The specific terms of a fix and flip loan will vary from money lender to lender, but generally speaking, they come with higher fees than traditional mortgages due to the shorter loan terms and higher risk associated with flipping homes.
Where are the Best Markets for Fix & Flip Loans in Texas?
Texas is one of the most sought after states for fix and flip loans. With its booming economy, low cost of living, and abundant housing market, it has become a hot spot for investors looking to make a quick return on their investments. Let’s take a closer look at our top markets to look for fix and flip loans in Texas.
Ideally located in the Austin metro area, Round Rock is a sought-after suburban oasis that has a ton of appeal in the current market. The area has seen exponential growth of 3-4% over the past year alone.
If you are looking to pursue a buy-and-hold approach, rental income is a promising $1,654 per month on average—which are great returns for investors looking to upgrade a rental property and lease it out to tenants at an above-market rate.
Things get even better considering that appreciation has driven the median property value up by nearly 6% since 2020, with the average listing price sitting at approximately $280,000.
The local economy is strong, with a significant boost coming from a number of leading tech companies including Dell and Emerson having corporate offices nearby—a factor that attracts a substantial number of young professionals seeking housing options.
What’s more, Austin has had issues supporting its exponentially growing population, meaning that newcomers are migrating in droves to the suburbs such as Round Rock to get more bang for their buck. This trend is an amazing opportunity for real estate investors, who can still acquire reasonably priced properties to rehab and resell for top dollar.
Situated just outside of Houston, the median home values are rising quickly in Sugar Land.
Properties have appreciated to the tune of 2.5% over the last year, with the typical listing selling for over $305,000. Rental prices are also optimal, with monthly rental income averaging out around $1,946—well above the national average.
Not too long ago, Sugar Land was a sleepy little farm town, but has quickly evolved into a hub for jobs, technology, and recreation. A large 6,500-seat stadium was just finished, and major international companies like UnitedHealthcare and Bechtel EO are headquartered there.
The economy is booming, with oil and gas firms staking their claim in the area. For example, Nalco Champion recently built a $45 million operations and research plant in Sugar Land, which will provide employment opportunities well into the future.
Location is everything when it comes to real estate, and Seguin is the perfect example.
Just a half-hour outside San Antonio and 45 minutes from Austin, Seguin is an intriguing prospect for aspiring fix-and-flippers. With a local market that has seen property values spike over 4% in the last year alone and monthly rental income averaging a lucrative $1,540, there is plenty of potential for optimal return on investment in Seguin.
Perhaps one of the most promising aspects of the Senguin and larger San Antonio area is the overwhelming number of famous companies that have set up shop in Seguin—which include Caterpillar, Tyson Foods, and Continental Automotive Systems to name a few—that bring with them workers and commerce.
The local government has also recently built a cutting-edge medical center and is expanding housing initiatives to cater to the steady stream of new residents that have relocated to the area in pursuit of employment opportunities.
That’s great news for investors, who know that all of these newcomers need a place to call home, and the flexibility and affordability of fix-and-flip properties are the perfect solution to bolster the reduced housing inventory.
Our Top Tips for Texas Fix and Flip Investing
Even with the booming economy, steady appreciation rates, and high rental incomes that Texas has to offer, if you want to maximize your return on investment here, there are a few important tips you should keep in mind.
Here are our top tips for house flippers to evaluating a potential fix and flip:
1. Research the local market
2. Find the Right Purchase Price
3. Check Out the Potential Buyers
4. Explore Local Real Estate Agents
5. Inspect the Property:
6. Calculate Your Financing
7. Explore Private Lenders
8. Use the 70% Rule of Thumb Method
Want to know more – check out the full article: ‘How to Evaluate a Fix and Flip Property: 8 Tips to Know if it’s Worth It‘
Essential Factors To Consider When Applying For Fix And Flip Loans
When investing in real estate, having access to a reliable and secure source of financing is essential. As such, many savvy investors turn to fix and flip money loans to purchase properties for renovation and resale.
But when it comes to securing a loan from a private money lender for this purpose, it’s important even for the most experienced flippers to consider a few key factors before moving forward with the application process.
1. Loan Type:
The type of loan you’re applying for will have a large effect on the outcome of your investment. You’ll want to consider how much money you need, and the length of time you’ll need it for. Most fix and flip loans have short terms of 6-12 months, but longer terms may be available depending on your lender and financial situation.
2. Loan Terms:
When applying for a fix and flip loan, it’s important to understand what kind of terms you’re agreeing to. Pay close attention to the interest rate, repayment schedule, and any potential fees or penalties associated with the loan. You should also take into account any special offers or incentives that may be available—these can often help reduce the overall cost of the loan.
3. Credit Score:
Your credit score will play a major role in determining whether or not you’re approved for a fix and flip loan. It’s important to make sure your credit is in good standing before applying, as lenders may require a minimum score to qualify for certain loans.
Some lenders may require you to provide collateral in order to secure a fix and flip loan. Collateral can come in the form of a lien on the property being purchased, or other assets such as investments or savings accounts.
It’s important to consider your experience level when applying for a fix and flip loan. Many lenders will look at your track record of successful flips to assess your ability to repay the loan. If you’re new to flipping, it’s important to work with a lender who is willing to take a chance on you and provide assistance along the way.
6. Rehab Cost
Finally, one of the most important factors to consider is rehab costs. While these projects can be profitable, they come with a certain level of risk associated with them.
That’s why it is important for investors to have an accurate understanding of the amount of money that will need to be put into any potential investment property in order to get it ready for market and make a return.
By taking these essential factors into consideration before applying for a fix and flip loan, any house flipper can increase your chances of securing the financing necessary for a successful investment project.
Seize the Opportunity
Don’t let funding be the factor holding you back from capitalizing on that next promising fix-and-flip project. With Express Capital Financing, you get the money you need when you need it.
No more waiting months for the capital you need to close the deal. No more strict underwriting protocol to follow. The experts at Express Capital Financing understand real estate investing and can leverage their vast experience to deliver viable and creative funding solutions for fix and flip transactions.
Contact us today to learn more about how we can help you take your investment business to the next level.