The Complete Guide to Flipping Houses in Texas
With bidding wars on residential properties and a massive shortage of housing across the country, 2021 is a great year to break into the fix and flip industry! One by-product of the pandemic is that many people have begun moving from cities to the burbs and buying up any houses they could find along the way, especially in the South.
With that in mind, one state where you’re more than likely to return a big profit on a fix and flip is Texas. Whether you’re looking to start flipping houses in Houston, Dallas, San Antonio, or any other part of the 2nd most populous state, y’all are sure to find a lot of fix and flip opportunities.
So if you’re feeling the urge to start flipping houses in Texas, keep reading our simple guide to flipping in The Lone Star State.
Why Should You Fix and Flip in Texas?
Texas, the live music capital of the world, is home to some of the best house-flipping markets in the country. However, this isn’t the only reason to fix and flip in Texas. Here are some other reasons why to take the plunge:
- House prices - In Texas, homes cost less than the national average. According to research carried out by the National Association of Realtors (NAR), in May 2020 the average home price across all home types (single-family, townhomes, condominiums, and co-ops) was $284,600. In Texas, however, homes tend to cost less than the national average, with the average home value coming in at $213,036.
- Quality of life - The state of Texas is simply a great place to live for the buyers of your fix and flip venture. The city of Austin, for example, was voted the best place to live in the U.S. in 2019.
- Everyone is moving there - According to a study by Move.org, Texas was the second-most moved to state in 2020, and the majority of those moving there are millennials. Some of the most well-known names to recently make Texas their new home include Tesla and SpaceX CEO Elon Musk, comedian Joe Rogan, and actor James Van Der Beek. This is mostly due to the pandemic, which sparked a wave of migration away from America’s largest cities.
- Rapidly growing population: The Texas population has grown from over 25.2 million to almost 29 million over the past nine years. For example, the city of Frisco, part of the Dallas-Fort Worth metro area, is a prime example of this population growth. Almost half of its population is constituted of people who have moved to the state over the past decade.
If you’re thinking about flipping houses in Texas, contact an experienced private lender to get the funds in 3-7 days.
How to Flip Houses in Texas
Still not convinced? It might help to know that flipping homes in Texas is actually easier than you think. While there’s definitely not a magic set of rules to abide by, there are a few things to bear in mind that can make your journey easier.
Be Picky About Location
Often, the location of a house can make or break any fix and flip venture. Be sure to pick out undervalued properties in desirable, “value-add” locations with good, available schools, increasing home values, and employment rates that are also on the up. This will maximize your profit margins.
In Texas, architecture is also something to pay attention to. Buyers will be drawn to the suburban, ranch-style homes designed to make the hot Texan summers more bearable. Make sure you do your research on the real estate market you’re entering before making any purchases.
If you’re an inexperienced house-flipper, it can sometimes be tricky to gather the funds you’ll need to start your first project.
Here at We Lend, we provide tailor-made private real estate loans that you’ll be able to access within a week of applying for funds. So if you’re looking for a Texas fix and flip loan, don’t hesitate to contact us.
Ensure You're Making a Profit
Given the occasionally complex steps of the fix and flip process, you’d be forgiven for losing track of your finances and spending more than you had originally intended to.
However, to avoid this pitfall, the renowned 70% rule is a good one to go by. This dictates that you must never pay an up-front price of more than 70% of a house’s ARV.
Consider Your Exit Strategy
Determining an exit strategy before you invest is a key part of your business plan for a fix and flip investment.
Here at We Lend, one of the first questions we ask our borrowers is what their end game is. There are several different strategies to choose from, so make sure you pick wisely!
Best Cities to Flip Houses in Texas
And, If you plan your investment thoroughly, the higher prices won’t affect your profits, so don’t let it deter you.
Houston is also one of the most in-demand areas of the state. That being said, you can still find some fix and flip gems. Scoping out foreclosures auctions within the city is a great place to start.
Formerly one of the hottest areas of the country to fix and flip, profits for flippers have decreased here in recent years.
However, provided you buy within the right zip code, this metro area is home to some strategically placed properties with high fix and flip potential.
San Antonio’s perfect combination of gross-profit growth and low refurbishing expenses make it a great area to seek out a fix and flip.
In this coastal city, you’ll find plenty of outdated properties crying out for a fix and flip. This creates great potential for a high return on flip investments.
Given the recent hype around the state of Texas, its low-value properties, and great quality of life, it’s a great place to begin your next fix and flip venture.
Furthermore, there’s a great community of flippers on hand in Texas to seek advice from when you need it. And when it comes to financing, get in touch with an experienced private lender and you can be fixing and flipping within The Lone Star State in less than a week.