Texas is not just famous for being the home of NASA, the Dallas Cowboys and some of the biggest ranges in the world. The Lone Star State is also proving to be a fertile hunting ground for property investors.
Overall, houses in Texas are reasonably affordable, and there appears to be plenty of opportunities for house flipping in particular. Let’s now take a deeper look at how to flip houses in Texas.
Texas House Flipping Stats
Median Purchase Price
Median Resale Price
Price Per Square Foot
Population Size In Texas
Median Household Income
High School Graduation
Travel Time To Work
Best Cities for Flipping Houses In Texas
- San Antonio
- Fort Worth
Safest Areas in Texas
- Flower Mound – Safety Score: 90.42
- Allen – Safety Score: 88.02
- Georgetown – Safety Score: 86.49
- Mansfield – Safety Score: 85.47
- Cedar Park – Safety Score: 85.08
Please note – All the statistics in this article are based on 2019 data. You can view the data sources at the bottom of the article.
The Basics Of Flipping Houses In Texas
- Find a property in Texas that is undervalued
- Source funding from a reputable lender
- Buy the property for a price that makes it possible to generate profit when it is resold
- Complete renovations that will increase the after repair value
- Find buyers for the property and sell it for a healthy profit margin
2. Leverage The Power of Wholesalers
Finding a good wholesaler can be very rewarding for a property flipper. Wholesalers tend to have access to all the most relevant property databases, and they often have unique personal networks. By using a wholesaler, you effectively gain inside access to their knowledge of properties in Texas.
3. Attend Bank Auctions
Bank auctions often present opportunities to purchase properties below their market value. This is mainly because banks hold these auctions in order to sell the properties as fast as possible. If you attend bank auctions with a clearly defined strategy, you can potentially walk away with a new property that fits in perfectly with your investment portfolio.
4. Use Direct Mail To Find Off-Market Properties
Although it is considered an old school technique, direct mail can still yield positive results for house flippers. Direct mail has been shown to have a higher response rate than email, and numerous studies have shown that people actually enjoy checking their mailboxes. More importantly, you might be surprised by how many people have considered selling their homes. Your letter could be the trigger that they have been waiting for.
5. Sign Up To The Multiple Listing Service (MLS)
Even though MLS listings can be competitive, it is still a good avenue for finding properties to flip. The MLS is literally a database created by real estate agents, and it is filled with property details and statistics that can help aid your research process. There is a fee involved, but one deal is all you need to comfortably cover the costs.
6. Find Foreclosures
When properties fall into foreclosure, the primary goal of the loan originator is to recoup any potential losses. This is good news for house flippers, because properties in foreclosure often sell for less than their market value. If you are able to locate foreclosure opportunities in Texas, there’s a good chance you will be able to purchase a property for less than its market value. This is why foreclosure can serve as a great platform for a potential flip.
Texas Housing Market Analysis
House Flippers Are Focusing On Middle Income Houses: There is only a small gap between the median home value in Texas ($211,199) and the median resale price for house flips in Texas ($205 844). This suggests that investors are generally focusing on the middle end of the market where it may be more common to find poorly maintained properties.
It’s also worth mentioning that property flippers in Texas are generating approximately $47,519 in revenue per flip. This is less than most states in the US, where it is common to generate more than $60,000 per flip. To be successful in the Texas real estate market you will need to stick to tight budgets and deadlines. With such fine margins, the project needs to run smoothly to generate a positive ROI.
Home Values Are Predicted To Drop 1.9%: According to Zillow, home values in Texas appreciated by 3.0% in 2019. However, the expectation is that house prices will drop by approximately 1.9% over the next 12 months. This is more than likely due to the negative impact of coronavirus on the US economy and the real estate market in general.
Despite the negative short term outlook, there is still reason for property flippers to be excited. The slight drop in home values means that you can potentially purchase a property for a discounted rate.
Lots of Good Schools And Plenty of Job Opportunities: Suburbs surrounding good schools tend to hold their value even during trying economic times. For this reason, it’s always a good idea to review the overarching education facilities of the area that you are thinking about investing in.
In addition to good schools, employment opportunities can also influence the economic stability of an area, and by extension, the stability of the housing market. On this point, Midland, Bryan and Victoria are just some of the many areas in Texas with high employment rates.
Mortgage Delinquency: Mortgage delinquency occurs when a homeowner fails to make a mortgage payment. It is usually the first step in the foreclosure process. In Texas, the percent of delinquent mortgages is 1.4%, which is considerably higher than the national average of 1.1%. Ultimately this means that there are likely to be more foreclosures in Texas than other US states. This is good news for house flippers, as foreclosure can often be a great way to purchase a home for less than its market value.
Homes In Texas Are Cheaper Than The National Average: The average home value in Texas is $211,199. This is considerably less than the average home value in the United States, which is approximately $248,857.
The lower cost of homes in Texas is good news for first time flippers, because it reduces the amount of capital needed for a down payment and the total loan amount needed to purchase the property. In other words, the barrier to entry in Texas is quite low, and this bodes well for beginners.
If you’re committed to flipping houses in Texas, the next step is to invest time and energy into finding the best possible property. We have outlined a number of methods in this post, and all of them can potentially bear fruit.
Once you have identified a property, using a reputable Hard Money lender like New Silver can help accelerate the house flipping process. Our company is built on speed, efficiency and user-friendly technology. The online application can be completed in less than 10 minutes, and we offer instant proof of funds letters to all of our clients.