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ARV is the most important number in fix-and-flip investing — and the most frequently wrong. Overestimate ARV by 10% on a $300K project and you turn a $30,000 profit into a $0 deal. Underestimate it and you walk away from good deals. Here's exactly how experienced Texas investors calculate ARV, how lenders use it, and the adjustments that separate accurate ARV from wishful thinking.
ARV is only as good as your comparable sales. Most new investors pull comps too loosely — wrong size, wrong location, wrong time period — and end up with an ARV that's $20,000–$40,000 too high. Here's the discipline that keeps your ARV honest.
The tighter the geographic boundary, the more reliable the comp. In rural Texas, expand to 1 mile. In urban infill (East Austin, Oak Cliff), stay within 3–4 blocks — micro-markets shift dramatically street by street.
Use closed sales only — active listings are asking prices, not market prices. In fast-moving markets (DFW suburbs 2024–2026), 90 days captures current market. In slower rural markets, extend to 6 months with caution.
A 1,400 SF comp does not validate a 1,900 SF subject. Appraisers adjust ~$50–85/SF for size difference in Texas markets — that's a $25,000–$42,500 adjustment on 500 SF. Stay within 20% or adjust explicitly.
A 3/2 comp for a 4/2 subject requires a bedroom adjustment. Appraisers typically adjust $5,000–$15,000 per bedroom depending on the market. If you're adding a bedroom in your renovation, factor this into projected ARV.
Your ARV reflects the fully renovated end state. Use comps that sold fully updated — new kitchen, baths, flooring, paint. Ignore distressed or cosmetic-only sales for ARV purposes. Appraisers call this "as-improved" value.
In Texas, lot size matters more in suburban markets than urban. A corner lot adds value in some neighborhoods and creates traffic noise concerns in others. A 6,000 SF lot vs 10,000 SF may adjust $5,000–$20,000 depending on market.
| Feature | Market | Typical Adjustment | Notes |
|---|---|---|---|
| Full kitchen renovation | DFW suburbs | +$15,000–$25,000 | New cabinets, granite/quartz, appliances, fixtures |
| Master bath renovation | Houston suburbs | +$8,000–$15,000 | Walk-in shower, new vanity, tile — buyer expectation |
| Pool (existing) | Suburban TX | +$15,000–$30,000 | Adds value in TX heat — especially with fence/landscaping |
| Pool (add during reno) | Any TX market | Often negative ROI | Cost $40–60K to add; return $15–25K — avoid |
| Garage conversion (removed garage) | Any | −$10,000–$20,000 | TX buyers expect garages — converting to living space hurts resale |
| Extra bedroom added | DFW/Houston | +$8,000–$15,000 | Going from 3/2 to 4/2 — must be permitted |
| New roof | All TX | +$5,000–$10,000 | Buyers discount heavily for old/damaged roof — replace it |
| Foundation repair (done) | All TX | Neutral–slightly pos | Buyers want warranty — disclose and provide paperwork |
| Backing to busy road | All TX | −$5,000–$15,000 | Can't be renovated away — factor into purchase price |
| New HVAC | All TX | +$3,000–$6,000 | TX summers make HVAC a health issue — buyers notice |
Run the full deal math — max bid, loan sizing, total cost stack, and projected profit
Zillow's "Zestimate" and active listings reflect asking prices, not sale prices. In a softening market, listings sit 10–15% above where they'll actually close. ARV must be based on closed sales only — what buyers actually paid.
One street in East Austin or Oak Cliff can be worth $50/SF more than the street behind it. Pulling comps from 1 mile away in an urban infill market introduces massive error. Get hyper-local or get burned.
Premium finishes (quartz waterfall island, high-end tile) in a $200K neighborhood don't add $30,000 to ARV — buyers in that price point don't pay for luxury finishes. Match renovation quality to the price point of the neighborhood.
Texas spring (March–May) is peak selling season — ARV comps from spring may be 3–5% higher than what you'll actually achieve listing in August or November. Adjust your ARV for when you expect to list, not when you buy.
Our underwriters have comped thousands of Texas flips. When you submit a deal, we pull comps independently — and if our ARV differs from yours by more than 10%, we tell you why before you commit. Get a same-day indication on any Texas fix-and-flip deal.
Submit Your Flip for Review →The courthouse steps are where savvy Texas investors find their best deals — and where unprepared investors lose money. Here's how the process actually works, from notice to deed in hand.
From the first missed payment to the day you can take possession as the new owner:
After 1–3 missed payments, the lender issues a "Notice of Default" and gives the borrower a final opportunity to cure (catch up on payments). Most lenders attempt loan modification or payment plans during this phase. As an investor, you can sometimes negotiate a "short sale" or direct purchase here — before the public auction.
The lender's trustee files a Notice of Trustee's Sale with the county clerk and mails it to the borrower. This notice sets the auction date (always the first Tuesday of the month) and is public record. Track these filings on your county's official website or through third-party services like Foreclosure.com, PropertyRadar, or PublicData.us. This is your lead list.
Auctions happen at the county courthouse between 10 AM and 4 PM — exact time varies by property. Register with the trustee that morning. Bidding starts at the lender's minimum bid (usually the outstanding loan balance). You must pay with certified funds or a hard money lender's cashier's check/wire confirmation on the same day. The highest bidder gets the trustee's deed.
This is a major Texas advantage: unlike many states, Texas has no post-sale redemption right for residential properties. Once you win the bid and the trustee issues the deed, the prior owner has no legal right to buy it back. You own it immediately. (Exception: tax deed sales have a 2-year redemption period for homesteads.)
If the prior owner or a tenant is still occupying the property, you must go through the standard Texas eviction process — file a forcible detainer action at the JP court. With a trustee's deed, you'll typically get a hearing within 10 days. Once you have a writ of possession, the constable removes occupants. Never attempt self-help eviction (changing locks) — it's illegal and will get you sued.
Buying at auction is not like buying through an agent. The upside is real — so are these risks:
You're bidding on a property you may have never seen inside. HVAC failures, foundation issues, mold, and trashed interiors are common. Budget a 10–20% contingency on top of your estimated rehab cost.
Winning a first-lien foreclosure wipes the first lien but may NOT clear second mortgages, HOA liens, or IRS liens filed before the first lien. Always run a full title search before bidding. Junior liens on a property you "won" can cost you the property.
Institutional buyers with deep pockets attend DFW auctions in force. Emotional bidding can push prices above ARV. Know your max bid before you arrive and walk away at your number — there's always another auction.
If you win a bid and can't fund same-day, you lose the bid deposit and may be barred from future auctions. Hard money lenders can issue a "proof of funds" letter or cashier's check in advance — but confirm your lender is auction-ready before you bid.
The #1 reason investors lose auction deals isn't being outbid — it's not having funding in place. Banks can't move at auction speed. We can.
Proof of Funds Letter: We issue a same-day proof of funds letter specifying the property and maximum bid amount. Most Texas auction trustees accept a lender's POF letter to satisfy the funding requirement on auction day, with wire to follow within 24 hours.
Pre-Commitment: If you're a repeat borrower, we can pre-approve a credit line for auction purchases up to a specified dollar amount — so you can bid confidently on any deal that fits the criteria we've agreed to, without calling us before every auction.
What we need from you: Property address, opening bid amount, your estimated ARV, and your rehab budget. Submit the deal 24 hours before the auction and we can be ready when the hammer drops.
Get a proof of funds letter or pre-commitment before the first Tuesday. We've funded courthouse-steps deals across DFW, Houston, San Antonio, and Austin.
Get Auction Funding →Hard money isn't just for distressed borrowers. It's a precision tool that sophisticated real estate investors use when speed, flexibility, or property condition rules out conventional financing.
Doing multiple deals simultaneously. Can't wait 60 days for conventional approval — a deal that sits dies. Needs fast closes and is comfortable with higher rates because the hold time is short (4–6 months).
Has the capital but not the track record for bank financing. Hard money lenders evaluate the deal and the down payment — not your history. First deal closes; first profit builds the track record for the next one.
Buys distressed, renovates, rents, refinances into DSCR or conventional, pulls capital back out. Hard money is the acquisition vehicle — cheap enough to hold for 6–12 months while renovation and seasoning happen.
Courthouse steps, REO auctions, and online platforms often require closing in 15–30 days with proof of funds upfront. No conventional lender can move that fast. Hard money can.
Has equity in an existing property but not the liquid cash for a new acquisition. Uses hard money to bridge — buys the new property, sells the old one, pays off the bridge. No contingency, clean close.
Business owners and freelancers who write off expenses to minimize taxes end up showing $40K in taxable income on a $300K actual income. Banks decline the loan. Hard money lenders look at the deal, not the 1040.
These are representative deal types — the situations where hard money solves the problem a bank can't:
We'd rather tell you now than waste your time. Hard money doesn't fit every situation:
Submit your deal summary — property, price, your plan. We'll tell you within 24 hours whether we can fund it and at what terms.
Get Pre-Qualified →Hard money isn't just for residential flips. Texas investors use commercial hard money to acquire distressed retail, reposition underperforming multifamily, bridge to permanent financing on stabilizing commercial assets, and fund ground-up construction when bank timelines don't work. The underwriting is asset-based, not income-based — which means speed and flexibility that no conventional commercial lender can match.
Acquire 5–50 unit apartment at below-stabilized occupancy. Rehab units, lease-up to 90%+, then refi into DSCR perm. Hard money bridges the gap between acquisition and stabilization.
Buy a vacant or distressed strip center at a deep discount, execute lease-up with new tenants, then refi perm at stabilized value. Hard money funds acquisition + TI + leasing commissions during the repositioning period.
Distressed suburban office being converted to medical, coworking, or residential. Hard money bridge while permits and renovation are underway — then DSCR or conventional perm at stabilization. Dallas and Houston have active conversion pipelines.
Build-to-suit or speculative commercial construction for retail, medical, or industrial use. Draw-based funding tied to construction milestones. Hard money construction lenders move faster than banks and don't require 2 years of operating history.
Buy commercial properties at courthouse steps, bank REO, or note sale. All-cash or hard money required — bank foreclosure and note purchases don't allow conventional financing contingencies. Speed to close is the competitive advantage.
Property qualifies for perm but conventional lender needs 60–90 days. Hard money closes in 10 days, lets you fund the purchase or payoff the matured loan, then you refinance into bank financing at your leisure.
| Factor | Commercial Hard Money | Bank Construction Loan |
|---|---|---|
| Close timeline | 7–21 days | 60–120 days |
| Income documentation | Asset-based — minimal docs | Full 2-yr tax returns, P&L, global cash flow |
| Stabilized property required | No — lends on as-is or as-built value | Often requires stabilization before funding |
| Borrower experience required | 1 commercial deal preferred, not required | 3–5 years track record often required |
| Interest rate | 10–14% (short-term cost) | Prime+1–2% (lower long-term) |
| Points / origination | 2–4 points upfront | 0.5–1% origination |
| Extension flexibility | Usually available at 1–2 points | Often rigid — must refi or pay off |
| Portfolio / distressed assets | Yes — lends on challenged properties | Must be standard, well-leased, conventional |
Multifamily bridge, retail repositioning, office conversion, ground-up construction, or foreclosure purchase — if the deal makes sense at the asset level, we can fund it. No 60-day bank process. No stabilized income requirement. Submit your deal and we'll have an indication of interest within 24 hours and close in 2–3 weeks.
Submit Your Commercial Deal →The #1 cause of fix-and-flip disasters isn't the deal — it's the contractor. Here's a systematic framework to find, vet, and manage rehab contractors in Texas before a dollar of hard money changes hands.
Texas does not require a general contractor license — but every trade subcontractor (electrician, plumber, HVAC) must be licensed by the state. Verify licenses at the Texas Department of Licensing and Regulation (tdlr.texas.gov) and the Texas State Board of Plumbing Examiners.
Before they step foot on your property: general liability insurance ($1M minimum) and workers' compensation. Ask for a certificate of insurance naming you as additional insured. If a worker is injured on your property and the GC has no workers' comp, you could be liable.
Never accept a single bid. Get three itemized written bids on the same scope of work. "Itemized" means line-by-line labor and materials — not a single lump sum. Compare the scope, not just the number. The cheapest bid often omits work the other two included.
Ask for 3–5 references from jobs completed in the last 12 months that were similar in scope. Call every one. Ask: Did they finish on time? On budget? Would you hire them again? What went wrong and how did they handle it?
Ask for addresses of prior completed flips in Texas — specifically ones they rehabbed within the last year. Drive by. Does the workmanship look solid from the street? Does the curb appeal hold up? Were the permits pulled and closed properly (searchable on most county websites)?
In Texas, unpaid subs and suppliers can file a mechanic's lien against your property even if you paid the GC. Before hiring, search the county clerk's records for any liens associated with your contractor's name. Repeat at the end of the job before final payment.
Any one of these is enough to disqualify a contractor and find someone else:
A verbal agreement is worth nothing in a Texas dispute. Your written contract must include:
Tie every payment to completed work — never to time. Never pay upfront for all materials.
Once you have your contractor and scope of work, we can fund your hard money loan in as little as 7–10 days. Submit the deal — we'll have a term sheet back to you in 24 hours.
Get Hard Money Funding →Bad contractors are the #1 reason Texas flippers lose money. Blown budgets, missed timelines, shoddy work, and outright theft all happen regularly — and they're almost entirely preventable with the right vetting process. After thousands of Texas fix-and-flip loans, we've seen what separates the investors who consistently close on schedule from those who get burned. Here's the exact framework.
Texas doesn't require a general contractor license at the state level, but electricians, plumbers, and HVAC contractors must be licensed — verify every trade sub. Require a Certificate of Insurance for general liability (minimum $1M) and workers comp. An uninsured contractor working on your flip means you're liable if someone gets hurt. Call the insurance company directly to confirm the policy is active.
Three bids on every project. The lowest bid almost always means the contractor doesn't understand the scope, will cut corners, or will come back for change orders. The highest bid isn't automatically better quality — it may just be a contractor who doesn't want the job. The middle bid with the clearest scope of work wins on most projects.
Ask for 3 references from other real estate investors, not homeowners. Homeowners have different expectations and timelines. An investor who has used the contractor on 3–4 flips can tell you: Did they hit the timeline? Did the budget hold? Did they show up every day? Would they use them again? Call references. Actually call them.
Visit a project the contractor is actively working on. You'll see how they organize their crew, how they handle materials, how clean the site is, and whether the pace of work matches your timeline expectations. A contractor with a chaotic job site will bring that chaos to your project. A tight operation runs tight projects.
Never sign a lump-sum contract with vague scope ("renovation as discussed" or "update kitchen"). Every line item must be specified: square footage, material specifications, brand, model number where applicable. A detailed SOW eliminates "that wasn't included" change order arguments and gives you something to verify draws against.
Never pay more than 10–15% upfront. Tie every subsequent payment to a verified completed milestone — not to a timeline or a promise. A contractor who requires 50% upfront is either desperate for cash (danger) or planning to front-load your project to fund another. Your hard money lender will release draws based on inspections; align your GC payment schedule to match.
Texas has strong mechanic's lien laws — a subcontractor your GC didn't pay can file a lien on your property even if you paid the GC in full. Require lien waivers (conditional and unconditional) from the GC and all major subs at every draw. This is standard practice for institutional investors and should be standard for yours too.
Any request for 30–50% upfront before work begins is a danger sign. Reputable contractors have supplier relationships and don't need your capital to fund materials for a $40K rehab.
"We can work on a handshake" means you have zero legal protection when something goes wrong. Always. Always a written contract with scope, price, timeline, and payment schedule.
A contractor with only a cell phone number and no business address, website, or permanent presence is high-risk. If they disappear with your money, you have no way to find them.
"I have insurance" is not a Certificate of Insurance. Require the actual COI with your name as additional insured on the GL policy. If they stall, they're uninsured.
A contractor's references should be eager to talk. If calls go unanswered or references give vague non-answers, that's information — the contractor cherry-picked the least-unhappy clients.
Every change to scope, price, or timeline must be in writing before work proceeds. Verbal change orders become he-said-she-said disputes that contractors usually win because they have more time to fight than you do.
| Draw # | Milestone Trigger | % of Budget | Lender Inspection |
|---|---|---|---|
| Mobilization | Contract signed, materials ordered, dumpster delivered, demo started | 10–15% | Not required |
| Draw 1 — Rough | Demo complete, framing done, rough plumbing/electrical/HVAC roughed in | 25–30% | Required — inspector confirms rough work |
| Draw 2 — Drywall | Insulation installed, drywall hung and taped, passed rough inspections | 20% | Required — inspector walks |
| Draw 3 — Finishes | Cabinets, flooring, tile, trim, interior doors, fixtures installed | 20% | Required — lien waivers collected |
| Final Draw | Punch list complete, CO issued (if required), property show-ready | 10–15% | Required — final walkthrough with investor |
We don't just lend — we've been on job sites across Texas. We know how rehabs go sideways and we structure our draw process to protect both you and us. If you have a deal and a solid contractor, bring us both — we'll tell you within 24 hours if the numbers work and what we can fund.
Submit Your Flip Deal →Texas foreclosure auctions — held on the first Tuesday of every month at county courthouses — are where experienced investors consistently buy properties at 65–80% of market value. It's the most competitive deal-sourcing channel in the state, but also the least forgiving. You need cash (or committed hard money), title knowledge, and discipline on your maximum bid. Here's how to do it right.
Texas is a non-judicial foreclosure state — no court approval required. The entire process from first missed payment to auction can happen in as little as 60 days:
Borrower misses 1–3 payments. Lender sends Notice of Default. Texas law requires a 20-day cure period.
Filed at county clerk at least 21 days before auction. Posted at courthouse. Published in county newspaper.
First Tuesday of month, 10 AM–4 PM at courthouse. Trustee reads the deed of trust, opens bidding. Cash or cashier's check required same day.
Highest bidder above the opening bid (set by lender) wins. Trustee's deed issued same day or within days. Title passes immediately — no redemption period in Texas.
Occupants must vacate. If occupied, you must file eviction (JP court). Texas courts move quickly — typically 30–45 days to possession if contested.
Largest volume in the state. Auctions held at George Allen Courts Building. 500–1,000+ notices filed monthly across all price points.
Auctions at 301 Fanin St. Diverse inventory — inner-loop teardowns to suburban ranches. High investor competition on desirable inner-loop properties.
Strong value-add inventory in Eastside, Polytechnic, Riverside neighborhoods. Lower competition than Dallas — better margins available for prepared buyers.
Lower volume due to fewer distressed properties in Austin's high-equity market. When deals appear, competition is fierce — preparation is essential.
Consistent volume across price points. Military relocation market creates unique inventory patterns. Good mix of Southside, Eastside, and suburban properties.
Lubbock, Amarillo, El Paso, Waco, Tyler — less competition, better margins for investors willing to drive. Same process, smaller bidder pool.
Most counties require payment within hours of winning a bid — you can't go get financing after you win. The investors who consistently win at auction have their funding pre-arranged. Here's how to structure it:
Work with a hard money lender to establish a pre-approved acquisition line before auction season. They review your track record, set a max, and you can bid with confidence knowing funds are committed.
Bring a large cashier's check to the auction (refundable if you don't win). Win the bid → your hard money lender wires the balance to the trustee within hours. Requires a very tight lender relationship.
The most common approach: buy with cash at auction, immediately submit to HML for a refinance. Most hard money lenders will refi an auction purchase within 3–5 business days, returning your capital.
We work with active courthouse steps investors across Texas. If you've just won an auction purchase and need to refinance your cash out quickly, we can typically close a hard money refi in 3–5 business days. Bring your trustee's deed and your rehab scope — we'll move fast.
Get Funded Fast →Plug in your numbers. Get an instant verdict on whether the deal makes sense — and what your hard money loan would look like.
Estimates only — actual results vary. Verify all costs with your contractor and title company.
Your exit strategy isn't a decision you make at the end of a rehab — it's baked into your buy price, rehab scope, and loan term from day one. Texas flippers who plan their exit before signing the contract consistently outperform those who figure it out at the end.
If you're doing a retail exit, follow the steps Texas's top flippers use to minimize DOM and maximize sale price:
| Cost Item | Typical Range | On a $350K Sale |
|---|---|---|
| Buyer's Agent Commission | 2.5–3% | $8,750 |
| Listing Agent Commission | 2.5–3% | $8,750 |
| Title Insurance (seller pays in TX) | 0.5–0.8% | $2,100 |
| Escrow / Closing Fees | $800–1,500 | $1,200 |
| Property Tax Proration | Varies by close date | $1,800 avg |
| Home Warranty (often buyer request) | $400–600 | $500 |
| Misc (touch-up repairs, staging) | $500–3,000 | $1,500 |
| TOTAL SELLING COSTS | ~7–8% of sale price | ~$24,600 |
Our hard money loan terms are structured around your exit strategy. Retail exit at 6 months? We have that covered. BRRRR with a DSCR lender refi letter in hand? We can extend. Submit your deal and let's build the right loan structure from day one — not after closing.
Get My Loan Structured →Most first-time investors fail because they don't have a roadmap — not because they lack capital. Here's exactly how to do your first deal from contract to closing.
Start looking before you have financing. Drive for dollars, MLS distressed listings, probate, wholesalers. In Texas look at Harris, Tarrant, and Dallas counties — highest volume of distressed single-family.
Get 3 contractor bids before signing anything. Add 15% contingency on top. Most beginners underestimate rehab by 20–30%. Your profit is made at purchase, not at sale.
Call us before going under contract. 24–48 hour pre-qual. We'll look at the deal, your exit plan, and down payment availability — not your credit score or W-2s.
We lend up to 90% LTV on purchase. Rehab draws released in stages as work is completed. You maintain control of the rehab process — no micromanagement.
Stick to the scope. Change orders kill profits. Use licensed Texas contractors — required for permits. Document everything with photos for draw requests.
List at or slightly below market to sell in under 30 days. OR refinance into a 30-year DSCR loan and keep it as a rental. Either way, we're paid off and you've done your first deal.
What the numbers actually look like on a typical Texas entry-level flip
Get pre-qualified in 24 hours. No income docs, no W-2s, no appraisal required to get started.
Start Your Pre-Qualification →Not every distressed property is a flip. The fix-to-rent strategy — buy distressed, renovate with hard money, then refinance into a long-term DSCR rental loan — lets Texas investors build a portfolio without tying up all their cash in each deal. Here's exactly how the bridge works.
The fix-to-rent (also called BRRRR — Buy, Rehab, Rent, Refinance, Repeat) strategy solves a real problem for investors who want to build a rental portfolio: buying distressed properties in cash-only condition, then holding them long-term, without needing fresh capital for every single acquisition. The mechanics are straightforward, but the financing has to be structured correctly at each phase or the whole strategy falls apart at the refinance step.
We fund the purchase and renovation budget together, typically up to 90% of purchase price plus 100% of rehab costs, capped at a percentage of after-repair value (ARV). Interest-only, 6-12 month term.
Complete the rehab, then place a tenant. This is the step investors most often underestimate — lenders want to see an actual signed lease, not a rent estimate, before refinancing.
Once leased, refinance the hard money bridge into a 30-year DSCR rental loan sized off the new appraised value and in-place rent — pulling most or all of your original capital back out.
The single biggest failure point in fix-to-rent deals isn't the renovation — it's the seasoning requirement on the refinance. Most DSCR lenders require either a documented purchase price plus verified rehab receipts, or a minimum seasoning period (often 6 months of ownership) before they'll lend off the new, higher appraised value rather than the original purchase price. Investors who don't plan for this get stuck refinancing off their acquisition cost instead of ARV, defeating the purpose of the strategy. We coordinate the hard money bridge and the DSCR exit together specifically to avoid this — the exit lender needs to already understand the file before the refinance request lands on their desk.
The second most common issue is underestimating carrying costs during lease-up. A property that sits vacant for 60 days after renovation completion is 60 days of interest-only payments with no offsetting rent — we size rehab budgets to include a lease-up reserve so this doesn't catch borrowers off guard mid-deal.
We fund the bridge and coordinate the DSCR exit so your refinance actually goes through at ARV. Tell us the numbers.
Get Your Fix-to-Rent Quote →Courthouse steps auctions and bank-owned (REO) listings both demand one thing traditional financing can't deliver: speed. Hard money lets Texas investors compete like cash buyers on both.
Foreclosure and REO acquisitions are two different games with one thing in common — the sellers (trustees at auction, banks holding REO inventory) both favor buyers who can close fast and without financing contingencies. A conventional mortgage with a 30-45 day underwriting timeline simply doesn't work for either channel. That's the gap hard money fills: proof-of-funds letters that hold up, and actual closings inside a week or two when needed.
Full cash payment required same-day, no inspection or financing contingency, no interior access before bidding. Highest risk, highest potential discount. Texas trustee sales happen the first Tuesday of each month at county courthouses statewide.
Requires pre-approved proof of funds before biddingPurchased through a licensed agent like a normal listing, but banks strongly prefer offers with proof of funds or hard money pre-approval over financed offers — and often require close in 15-21 days.
Interior access and inspection typically allowedFor courthouse auctions, we issue a pre-approval and proof-of-funds letter before the sale date based on your target property and maximum bid — this is what gets you into the bidding with credibility. If you win, funding closes within days since underwriting was largely completed pre-auction. Because auction properties can't be inspected inside beforehand, we typically lend more conservatively on unseen condition (lower LTV) until a post-purchase inspection confirms scope of work, at which point rehab funds can be added to the loan.
For REO purchases, the process looks more like a standard hard money purchase — you have an accepted offer, an inspection period, and a defined closing date — but compressed. We move fast specifically because REO sellers frequently give preference to, or require, buyers who can close in under three weeks.
Get pre-approved before you bid. We can typically turn proof-of-funds letters same-day.
Get Pre-Approved →No fluff, no banker-speak. Here are the questions every fix-and-flip investor asks us before their first hard money deal — and the answers that will save you time, money, and headaches.
A hard money loan is a short-term, asset-based loan secured by real estate. The lender makes decisions primarily based on the property's value and your equity — not your tax returns, W-2s, or debt-to-income ratio. That's the entire point.
Investors use hard money when speed matters and conventional financing is too slow, too rigid, or simply unavailable. A bank takes 45–90 days. We take 7–14. A bank won't touch a distressed property that needs $80K in rehab. We will — because we're lending on what the property will be worth after repairs (ARV), not what it's worth today.
Hard money rates in Texas typically run 10–13% per year depending on your experience, LTV, property type, and the lender's risk appetite. Our rates currently start at 10.5% for experienced investors with strong deals.
| Scenario | Typical Rate | Why |
|---|---|---|
| Experienced investor, 65% LTC | 10.5–11% | Lower risk, less capital deployed |
| First-time investor, 75% LTC | 11.5–12.5% | Higher risk, larger advance |
| Rural property or complex deal | 12–13% | Liquidity risk and exit uncertainty |
Points are an upfront origination fee charged as a percentage of the loan amount. 1 point = 1% of the loan. A $300K loan at 2 points = $6,000 paid at closing. Most Texas hard money lenders charge 2–4 points.
Points compensate the lender for fast underwriting, direct capital deployment, and the cost of maintaining a loan pipeline without the float a bank enjoys. Think of it as a speed and flexibility premium — you're paying for access, not just money.
Most hard money lenders in Texas want to see at least a 620 credit score — but it's far less critical than your deal quality and equity position. We've funded investors with 580 scores on strong deals, and declined investors with 750 scores on weak deals.
What we actually care about, in order: (1) The deal itself — does the ARV pencil out? (2) Your equity — are you bringing enough skin in the game? (3) Your experience — have you completed flips before? (4) Your exit plan — sell or refinance, and is it realistic? Credit score is last.
No. Hard money loans are asset-based, not income-based. We do not require W-2s, tax returns, pay stubs, or debt-to-income ratios for fix-and-flip loans. This is the primary advantage for self-employed investors, business owners, and anyone who writes off income aggressively.
We'll verify your identity, pull credit, and evaluate the property — that's the underwrite. Your income is irrelevant because our repayment comes from the sale proceeds or refinance proceeds, not your monthly paycheck.
Our standard close is 10–14 business days from application. For experienced borrowers with clean titles and straightforward deals, we've closed in 7 days. For first-timers or complex deals, 14–21 days is more realistic.
What drives the timeline is not us — it's the title company. Title search, lien searches, and scheduling the closing notary are the long poles. We can approve your loan in 24 hours; the title takes 5–10 days. If you're working with a title company that knows investor transactions, you'll close faster.
LTV (Loan-to-Value) is based on the current as-is value of the property. A $200K property at 70% LTV = $140K loan. LTC (Loan-to-Cost) is based on your total project cost (purchase + rehab). A $150K purchase + $50K rehab = $200K total cost; 80% LTC = $160K loan.
Most fix-and-flip lenders use a combination: we'll lend up to 80% of total project cost AND up to 70–75% of as-is value (whichever is lower). We also cap at 65–70% of ARV — the after-repair value — to protect both of us from over-leveraging.
| Metric | What It's Based On | Our Limit |
|---|---|---|
| LTC | Purchase + rehab costs | 80% |
| LTV (as-is) | Current property value | 75% |
| LTV (ARV) | After-repair value | 70% |
We fund both — purchase and rehab — in a single loan. The rehab portion is held in a draw reserve and released in 2–5 installments as work is completed and verified by inspection.
How draws work: you submit draw requests as you complete renovation milestones. We inspect the work (in-person or via photos), verify completion, and wire the draw within 48–72 hours. You're never floating more than one phase of work at a time.
Here's the honest breakdown of what hard money loans actually cost beyond the headline rate:
| Fee | Typical Range | Notes |
|---|---|---|
| Origination (points) | 2–4% of loan | Paid at closing |
| Appraisal / BPO | $400–$800 | Needed to confirm ARV |
| Processing / underwriting | $500–$1,500 | Some lenders waive this |
| Title insurance + closing | $1,500–$3,000 | Paid to title company, not us |
| Draw inspection fees | $100–$200 per draw | Third-party inspector |
| Extension fee | 0.5–1% per month | If you need 30+ day extension |
Yes — we fund first-time investors regularly. But we underwrite more conservatively: expect to bring 20–25% down (versus 10–15% for experienced investors), and we'll want to see that your ARV is well-supported by active comps in the same neighborhood, not wishful thinking.
What makes a first-timer fundable: a realistic renovation scope (not a total gut renovation as your debut project), a solid general contractor you've already vetted, comps within 0.5 miles and 6 months that support your exit price, and a clear exit — sell or refinance into a rental.
Most hard money loans have 6–12 month terms. If your project runs long, extensions are available — typically 1–3 months at a time, with a fee of 0.5–1% of the loan balance per extension period. Extensions require that you're not in default and that the project is progressing.
The critical thing: communicate early. If you're on month 4 of a 6-month loan and you're 60% done with rehab, call us now — not in month 6. Lenders who know a borrower is on track will extend readily. Surprises at the maturity date create problems that could have been avoided.
Yes — with the expectation that you'll refinance into a DSCR or conventional rental loan at the end of the term. This is the core of the BRRRR strategy: Buy distressed → Rehab → Rent → Refinance → Repeat. Hard money is the acquisition-and-rehab vehicle; the rental loan is the permanent hold vehicle.
The key metric your refinance lender will use is DSCR (Debt Service Coverage Ratio): monthly rent ÷ monthly loan payment. Most DSCR lenders want 1.20× or higher to approve the cashout refinance. Model your numbers before you buy to confirm the exit works.
Submit your deal — purchase price, rehab estimate, and ARV. We'll have a term sheet back in 24 hours. No commitment, no credit pull until you say go.
Get a Term Sheet →Fire-damaged, flood-damaged, and insurance claim properties represent some of the deepest discounts in Texas real estate — and some of the most consistent opportunities for experienced flippers. Conventional lenders won't touch them. Hard money lenders fund them routinely, because the underwrite is based on the after-repair value, not the current condition of the collateral.
Contained to one room or area. Smoke odor throughout, surface char, damaged drywall. Structure intact, no roof penetration, no HVAC damage. Rehab: remediation + cosmetic finish.
Fire penetrated one or more rooms, roof damage in affected area, framing compromised in sections. Requires partial demo, structural repair, re-roof of damaged sections, MEP inspection.
Structure is unsalvageable. Lender funds as a lot with the land value as primary collateral, plus construction budget for a ground-up rebuild. Requires demo permit before construction loan closes.
Category 1–3 water intrusion. Subfloor damage, mold remediation required, potentially HVAC and electrical damage. Mold clearance letter required before any financing discussion.
Roof replacement, siding, windows, fence. Interior damage from leaks. Most straightforward insurance claim property type — often owner-occupied sellers who want out quickly after a claim.
Requires certified remediation company, official clearance certificate, and disclosure to all future buyers. Significant discount opportunity but lender scrutiny is high. Environmental report required.
The acquisition and funding process for damaged properties differs meaningfully from a standard flip. Here's the step-by-step:
The discount on a fire or storm-damaged property is not accidental — it's structural. Sellers face insurance company delays, contractor availability issues, the stress of temporary housing, and often just want to sell fast at a discount and move on. This creates predictable off-market opportunity:
Homeowners dealing with insurance companies, adjusters, and contractors are exhausted. Cash offers that close fast at 60–70% of ARV are often accepted because the alternative is a 6-month insurance battle.
In a high-cost construction environment, acquiring a damaged property at land value plus 20% of build cost and repairing it for 60% is still below replacement cost — creating built-in equity at completion.
Most retail buyers can't get financing on damaged properties. Most flippers are scared off by visible damage. Less competition = better pricing and more time to do proper due diligence before closing.
Insurance adjusters, restoration contractors, and remediation companies are deal flow sources that most investors ignore. Building those relationships puts you in front of damaged property opportunities before they're ever listed.
Conventional lenders pass on damaged properties. We don't. Bring your purchase price, your ARV comps, and your line-item rehab budget — we'll have a term sheet within 24 hours. We've funded smoke damage, partial fire losses, flood remediation, and total-loss rebuilds across Texas.
Submit Your Damaged Deal →A standard homeowner's policy won't cover a vacant rehab property. Here's every insurance policy a Texas fix-and-flip investor needs — and what your hard money lender will require.
Covers the property structure during renovation — fire, vandalism, wind, theft of materials. Standard homeowner's policies exclude vacant, under-renovation properties. Builder's risk fills this gap. Most hard money lenders require it as a condition of closing.
Once a property is vacant for 30–60 days, standard policies are void. Vacant property insurance covers fire, vandalism, and liability on an unoccupied building. Required by hard money lenders immediately upon closing if no tenant is in place. Typically issued in 3-month terms.
Covers bodily injury and property damage to third parties. If a neighbor is injured by falling debris, or a potential buyer trips during a showing, GL covers your legal exposure. Get at least $1M per occurrence / $2M aggregate. Most hard money lenders name themselves as additional insured on the GL policy.
Lenders are required by law to mandate flood insurance on properties in Special Flood Hazard Areas (SFHA). In Texas — especially in Houston, Beaumont, and coastal areas — many properties are in AE or X500 flood zones. NFIP coverage or private flood insurance must be in place before closing.
Adds an additional layer of liability coverage above your GL, auto, and homeowner's policies. A $1M lawsuit can come from almost anywhere on a construction site — an umbrella policy covers excess liability at minimal cost. Strongly recommended for investors doing 2+ simultaneous flips.
For projects over $500K with multiple subcontractors, an Owner Controlled Insurance Program (OCIP) or Wrap-Up policy provides one umbrella policy covering all parties on the job. Simplifies the requirement to collect COIs from every sub and ensures no coverage gaps between trades.
Before we fund your loan, here's exactly what you'll need to provide on the insurance side:
Homeowner's policies exclude vacant properties and construction activities. If you file a claim on a vacant rehab under a standard HO policy, it will be denied. Get builder's risk before you close.
The most dangerous coverage gap is between project completion and occupancy by a tenant. Keep vacant property insurance active until lease execution — not "until we're done with the rehab."
Lenders will require this as a condition, but it's easy to miss in the policy setup. An insurance payout to you personally instead of the lender creates a covenant violation on your hard money loan.
If you bought a distressed property for $95K and replacement cost is $180K, you need $180K of coverage — not $95K. After a fire, rebuilding is priced at current material and labor costs, not your purchase price.
Submit your deal and we'll tell you exactly what insurance you need at closing. Most experienced Texas investors have their insurance agents on call — we can recommend several for hard money projects.
Get Funded — We'll Handle the Rest →Lenders throw these terms around constantly. If you don't know the difference, you can't negotiate your loan or evaluate whether the deal works. Here's what each means and how they interact.
The loan amount divided by the current market value (or purchase price) of the property as-is — before any improvements. This is the primary risk metric for the lender on the day the loan is made.
The loan amount divided by the total project cost — purchase plus rehab plus all other costs to get the property to its completed state. Used in value-add and construction deals where there's significant capital being deployed post-closing.
The estimated market value of the property after all planned renovations are complete. This is what the property will be worth — not what it's worth today. Some lenders offer ARV-based lending (80% of ARV), which can fund more of your rehab. Risky if ARV estimate is wrong.
$150K purchase price, $35K rehab budget, $230K ARV — here's how all three metrics apply to the same deal:
The 70% rule is the most widely-used shortcut in fix-and-flip investing. It says: your maximum purchase price should be 70% of ARV, minus the rehab cost. The remaining 30% of ARV covers your hard money interest, carrying costs, selling commissions, and profit margin.
Formula: Max Purchase Price = (ARV × 0.70) − Rehab Cost
Using the example above: (230,000 × 0.70) − 35,000 = $126,000 max offer. The deal at $150K is above the 70% rule — it can still be profitable if your ARV estimate is solid and you control costs, but there's less margin for error.
The 70% rule is a filter, not a commandment. Strong ARV confidence, low holding costs, and a fast sale can make deals above 70% work. What it catches: deals where the math looks right on the back of a napkin but doesn't hold when you model all the costs.
Submit your deal with your purchase price, rehab estimate, and ARV — we'll tell you within 24 hours whether we can fund it and at what terms.
Analyze My Deal →Mold remediation, fire-damaged properties, and flood-affected homes scare away the majority of fix-and-flip investors — which is exactly why they represent some of the best margin opportunities in the Texas market. Sellers are often desperate, prices are significantly discounted, competition is minimal, and buyers don't care about the history once the remediation is documented and the renovation is complete. Here's how to evaluate, fund, and execute these deals correctly.
Mold scares retail buyers and agents, which drives prices down dramatically — but mold is one of the most straightforward remediation categories. A licensed Texas mold remediation contractor, proper containment and removal protocol, a post-remediation clearance test, and a Certificate of Mold Remediation (required by TX law) turns a "mold house" into a fully marketable property. The discount often exceeds the remediation cost by 3–5×.
Fire-damaged properties are priced aggressively because the damage is visible and intimidating — but cosmetic fire damage (smoke, soot, minor char) is far less expensive to remediate than it looks. The real risk is structural damage to framing, roof, or load-bearing walls, which requires a structural engineer before you commit. Get an engineer's report and a remediation bid before making any offer — once you have those two numbers, you can underwrite the deal precisely.
Texas is the most flood-prone state in the US — Harvey flooded 154,000 homes in Houston alone, and repeated flooding events have created a permanent supply of distressed flood-affected inventory. The key distinction is whether the property is in a FEMA Special Flood Hazard Area (SFHA). Flood zone properties require flood insurance for any mortgage, which reduces your buyer pool. Non-flood-zone water damage (burst pipes, AC leaks, roof leaks) is straightforward remediation with no zone stigma.
Texas averages more hail events per year than any other state — DFW, San Antonio, and Houston are in the primary hail corridor. Storm-damaged properties often have unclaimed or partially claimed insurance proceeds that transfer to the buyer. A property with a valid open insurance claim for roof, siding, and windows can fund a significant portion of your renovation budget — but navigating insurance claims requires understanding the assignment of benefits process and Texas's specific rules on claim transfers.
90% of investors and all retail buyers walk away from visibly damaged homes. You're competing against a fraction of the field — which translates directly into better prices and less multiple-offer pressure.
Insurance hassles, inability to sell conventionally, displacement costs, and emotional fatigue make damage-property sellers highly motivated. All-cash hard money offers close fast — exactly what these sellers need.
Every dollar of remediation you complete converts the property from "undiscoverable" (no mortgage lender will touch it) to "fully lendable." That transition alone adds 20–40% to the effective buyer pool size.
Once properly remediated with documentation, the property is disclosed as repaired — not hidden. Buyers accept remediated damage the same as any other renovation. A clearance certificate is actually a selling point.
Texas requires disclosure of known material defects on the Seller's Disclosure Notice (SDN). As the flipping investor, you must disclose any prior mold, fire, or flood damage on the SDN — along with documentation showing it was professionally remediated. Attempting to conceal known damage is a DTPA violation and creates legal liability post-sale. The correct approach: disclose fully, provide all remediation documentation (certificate of mold remediation, insurance claim settlement, contractor warranties), and price accordingly. Transparent disclosures with full documentation rarely kill deals — hidden defects discovered post-sale definitely do.
Mold, fire, flood, storm — we fund distressed property flips that other lenders decline. We underwrite on ARV and your remediation plan, not on the current condition of the home. If you have a solid deal with a credible contractor and a realistic rehab budget, bring it to us. Same-day indication, close in 7–14 days.
Submit Your Damage Property Deal →Multifamily hard money splits into two very different underwriting boxes depending on unit count — 2-4 unit properties finance like residential investment property, while 5+ unit properties finance like true commercial real estate. Knowing which box your deal falls into changes everything about how it's underwritten.
The line between "residential" and "commercial" multifamily isn't cosmetic — it's a hard underwriting boundary set by how appraisals, financing, and even fire code requirements work. Properties with 2-4 units are appraised using comparable sales, just like a single-family house, and can transition into 30-year fixed DSCR financing on exit. Properties with 5 or more units are appraised on income and cap rate — much closer to how an office building or retail strip gets valued — and exit into commercial term loans, not residential-style mortgages. We fund both, but the deal structure and exit strategy differ meaningfully.
Duplexes, triplexes, and fourplexes. Valued via comparable sales. Bridge-to-DSCR exit strategy works cleanly here since DSCR lenders treat these like single-family rentals for financing purposes.
Small apartment buildings and garden-style complexes. Valued via NOI and cap rate — rent increases from renovation directly increase appraised value. Exit is a commercial term loan or agency (Fannie/Freddie small balance) refinance.
Investors who buy a 5+ unit property expecting to refinance it like a duplex are frequently surprised — those loans don't exist in the same product category. On the commercial side, exit financing is underwritten off the property's income after your renovation and lease-up, meaning the appraisal directly rewards the rent increases you actually achieve, unlike a 2-4 unit comp-based appraisal where your improvements only help insofar as they resemble what other nearby duplexes sold for. This is why experienced value-add investors specifically target the 5+ unit tier — the appraised value math works in their favor once the business plan executes.
On the flip side, the commercial tier also carries more underwriting friction: rent rolls, T-12 financials, and a defined business plan for the renovation and lease-up timeline are all required before we'll structure the loan. A 2-4 unit purchase can often close on a simpler file.
Duplex to 30-unit complex — tell us the unit count and business plan, and we'll structure the right financing box for it.
Get Your Multifamily Quote →New construction hard money fills the gap between a permitted lot and a finished house ready to sell or rent. Banks are slow, rigid, and often unwilling to touch spec builders without an established track record. Private construction lenders move in days, not months — and fund based on the project's merit, not just the borrower's biography.
Funds are not released in a lump sum — they're advanced in phases as construction milestones are completed and verified by an independent inspector. Here's a typical 5-draw schedule for a 1,800 SF Texas spec build:
Small-volume builders who build and sell without a pre-committed buyer. Hard money funds the spec, which is listed on MLS during or after construction. Exit is the retail sale, which retires the loan.
Builder has a signed contract with the end buyer but needs construction financing before the buyer's permanent loan can close. Hard money bridges the build period; buyer's mortgage pays it off at completion.
Acquired a lot with a deteriorated structure — demo + rebuild is more cost-effective than a renovation. Hard money funds the land (or equity in the acquired property) plus the full construction budget.
Adding an accessory dwelling unit to an existing property to rent or sell. Construction hard money covers the ADU build; the existing home provides additional collateral for the lender's security.
Strip center, office suite, or medical building being constructed speculatively or for the builder's own business. Commercial construction hard money at 55–65% of completed value for experienced developers.
Building specifically to hold as a long-term rental — BRRRR at scale. Construction HML funds the build; DSCR loan replaces it at stabilization. Growing rapidly in DFW and Houston exurbs.
Bring your permit, your GC contract, and your line-item budget. We'll have a term sheet within 24 hours and close in under two weeks. We fund spec builds, custom contracts, tear-down rebuilds, and BTR projects across DFW, Houston, Austin, San Antonio, and surrounding markets.
Submit Your Build →The best deals never hit the MLS. Here are the 7 channels experienced Texas investors use to find distressed properties before they go to auction — and the exact scripts that work.
Pull the Notice of Default (NOD) list from each county clerk weekly. Mail a simple, handwritten-style letter to every homeowner in pre-foreclosure. These homeowners are 3–4 payments behind — many want to sell before the courthouse steps to save their credit and walk away with something.
Drive specific neighborhoods looking for visual signs of distress: overgrown lawn, boarded windows, deferred maintenance, stacked mail, cars that haven't moved. Note the address, skip-trace the owner, mail or call. DealMachine app makes this systematic — take a photo, it skip-traces automatically.
When a homeowner dies, the estate often needs to liquidate quickly — heirs may live out of state, disagree on value, or simply want cash fast. Probate filings are public record. Search your county clerk's probate records weekly and reach out to estate attorneys and administrators directly.
Absentee owners (property address differs from mailing address) are the most likely to be neglecting maintenance, open to selling at a discount, or already looking for an exit. Pull absentee owner lists from county appraisal district records or data providers. Filter for high equity (owned 10+ years) for best conversion.
Plumbers, electricians, and handymen service homes of owners who are overwhelmed, elderly, or barely keeping up. They often know months before anyone else when a homeowner is considering selling. Set up a simple referral fee arrangement — $500–$1,500 cash for a referral that leads to a closed deal.
Texas has thousands of active "We Buy Houses" Facebook groups by city. Post regularly: simple, no-hype offers to buy houses in any condition. Respond to sellers who post their own situations. The sellers here are already motivated — they came to you.
Wholesalers find distressed properties, put them under contract, and sell the contract to investors — they take a $5K–$20K fee. You pay slightly over direct, but you skip the marketing, skip-tracing, and negotiation. For investors who want deal flow without deal-finding labor, wholesalers provide a consistent pipeline.
These signals indicate a property with a distressed owner — not necessarily a distressed structure. Both are opportunities:
Simple, sincere, and specific beats slick every time. This template works for Texas pre-foreclosure and absentee owner campaigns:
[Owner First Name],
My name is [Your Name]. I'm a local real estate investor based in [City] and I'm looking to purchase a home in your neighborhood at [Property Address].
I buy homes directly from owners — no agents, no fees, no repairs needed. I can close in as little as 2 weeks with cash or confirmed financing, or on whatever timeline works best for you.
If you have any interest in discussing a sale — even if you're not sure yet — I'd welcome a brief call. There's zero obligation and I'll give you a straight answer within 24 hours.
You can reach me at [Phone] anytime. I live and work in [City] and have closed [X] homes in this area.
[Your Name]
Local Investor | [Phone] | [Email]
Once you have a property under contract, we can move. Submit the address, purchase price, and your estimated ARV — we'll have a term sheet back in 24 hours.
Get Funded Fast →California, New York, and Illinois investors have been moving capital into Texas fix-and-flip deals for a decade — lower acquisition prices, no state income tax, strong appreciation, and a landlord-friendly legal environment make Texas one of the top destination markets for out-of-state real estate capital. Here's the exact system to execute flips in Dallas, Houston, San Antonio, and Austin without living in Texas.
Texas has no state income tax on capital gains from property sales. A California flipper pays 13.3% state tax on flip profit — that same profit is 0% in Texas. On a $60,000 flip profit, that's $7,980 kept in Texas vs lost in California.
DFW suburban SFR entry prices for flippable product range $150K–$220K — a fraction of California or NYC pricing. Lower entry = lower risk, more deals with the same capital, and greater margin cushion when unexpected costs arise.
Texas added 2.4M residents since 2020 — the most of any state. More people = more housing demand = stronger resale market for flipped properties. DFW and Houston are adding 100,000+ residents annually.
Well-priced, fully renovated SFR in DFW, Houston, and SA suburbs typically sells in 45–60 days. Austin is slower since the 2022 correction but still under 90 days for priced-right product. Fast sale = fast capital recycle.
Texas does not require a general contractor license at the state level — only individual trade licenses (plumber, electrician, HVAC). This makes it easier to build a contractor network quickly vs states with strict GC licensing requirements.
Texas hard money lenders can approve in 24 hours and close in 5–10 business days. Out-of-state investors compete on speed — local wholesale deals and off-market properties are often won or lost based on who can close first.
Buyer's agent who works with investors — pulls comps, writes fast offers, understands ARV and margin. Ask: "How many investor transactions have you closed in the last 12 months?"
Licensed, insured GC who has flipped with out-of-state investors before. Experience with video walkthroughs and remote communication is essential. Verify references from other remote investors specifically.
Pre-purchase inspection + ongoing renovation milestone checks. Your eyes on the ground. Get one who does investor inspections ($200–400 per visit) and communicates via video and detailed reports.
TX title company familiar with remote/e-notary closings. Texas allows Remote Online Notarization (RON) — you can close on a Texas property without flying in. Confirm RON capability before choosing title.
If your exit strategy includes a BRRRR hold, have a PM lined up before close. If flipping, PM is optional — but having one as a backup gives you flexibility if the market softens mid-project.
One-time consultation on Texas contracts, mechanic's lien law, and entity setup. Texas uses deed of trust (not mortgage) — slight differences from some Northern/Midwestern states that investors should understand.
Pre-approved hard money relationship before you find the deal. A lender who knows you, your market, and your contractor can approve a deal same-day. Being unknown to your lender costs you deals.
Off-market deals come through wholesalers. Join Texas real estate investing Facebook groups, BiggerPockets for your target city, and local REIA meetups (via Zoom). The best deals don't hit MLS.
| Factor | California (LA/Bay Area) | New York (NYC Metro) | Texas (DFW / Houston) |
|---|---|---|---|
| Entry flip price | $600K–$1.2M+ | $500K–$900K+ | $150K–$280K |
| State capital gains tax | 13.3% | 10.9% | 0% |
| Hard money availability | Competitive | Competitive | Very active market |
| Avg days on market (flipped) | 30–45 days (competitive) | 45–75 days | 45–60 days |
| Typical flip margin | 8–12% (compressed) | 10–15% | 12–20% |
| Population trend | Flat / slight outflow | Flat | +8.2% since 2020 |
| Landlord laws (if holding) | Tenant-favorable | Very tenant-favorable | Landlord-friendly |
Don't spread across Dallas, Houston, and Austin simultaneously. Pick one submarket — South Dallas, NE Houston, or NW San Antonio — and learn it completely. Know the neighborhoods, the comparables, the typical rehab costs, and the buyer profile before deploying capital.
Interview 3 agents, 3 GCs, and get pre-approved with a hard money lender before you make your first offer. The team that's in place when the deal comes is the team that wins the deal — building relationships under time pressure costs you money.
Fly to Texas for your first deal — walk the property, meet your GC in person, attend the inspection, and visit comparable sold properties. You'll learn more in 2 days on the ground than 2 months of online research. Every deal after that can be remote.
Pre-offer video walkthrough with your agent, inspection video from your inspector, weekly renovation progress videos from your GC, and final walkthrough video before listing. Never pay a draw without video confirmation the milestone is complete.
Texas Remote Online Notarization (RON) allows you to sign closing documents from anywhere via video notary. Confirm your title company offers RON before going under contract. Most major Texas title companies now offer this as standard.
Out-of-state investors sometimes get attached to their ARV projection and overprice the listing. Price your flip 3–5% below the highest comp to generate multiple offers and a fast close. Speed of sale matters more than getting the last dollar when you're paying hard money interest remotely.
We've funded hundreds of remote investors flipping in DFW, Houston, San Antonio, and Austin. We understand how remote deals work, what makes them succeed, and where the risks are. Pre-approval is fast — tell us your target market, experience, and capital available and we'll give you a same-day indication of what we can fund.
Get Pre-Approved for Your Texas Flip →These terms are used interchangeably — but they describe meaningfully different things. Understanding the distinction helps you approach the right source, at the right time, with the right expectations.
The most sophisticated Texas investors don't choose one or the other — they build a financing stack that uses each tool where it performs best:
When you need certainty, speed, and a deal that won't fall apart two days before closing — that's us. Submit your deal and get a term sheet in 24 hours. You can always bring your own private money equity — we just need to be in first position.
Get a Term Sheet →Probate properties — real estate left in an estate after someone passes — are consistently among the most discounted deals in Texas. Heirs often live out of state, have no interest in managing the property, and want a fast cash sale at a discount to avoid the hassle. The investors who learn this channel access deals before they ever hit the MLS.
Probate deals are sourced before listing — directly with the executor or heirs. You're often the only buyer at the table. No bidding wars, no competing offers, no escalation clauses.
Heirs paying ongoing property taxes, insurance, and maintenance on a house they don't want is a carrying cost that creates urgency. The longer probate drags, the more motivated they become.
Texas estates typically involve homes owned for 20–40 years with minimal or no mortgage. The equity available to discount the purchase price is substantial — heirs often accept 70–75% of market value for speed and certainty.
Texas probate filings are public records, available at every county court. The death rate and asset transfer cycle are predictable. This is not a boom-and-bust deal source — it's a consistent, year-round inventory channel.
Homes occupied by elderly owners for decades often have deferred maintenance — a cosmetic problem that creates a pricing discount but rarely a structural one. These are usually solid old-construction homes, not teardowns.
Heirs aren't emotionally attached to the price a stranger would be — they're emotionally attached to the process being over. Investors who make it easy (cash, fast close, no contingencies) consistently win deals at lower prices.
Texas has one of the most investor-friendly probate processes in the country — most estates qualify for a simplified "muniment of title" or independent administration that moves faster than you'd expect:
Executors love cash buyers who close fast. We can be your proof-of-funds source and your closing capital. Pre-approval takes 24 hours — bring us the address, your purchase price, and your rehab scope. We'll have your commitment letter ready before your offer meeting with the executor.
Get Pre-Approved Now →Most lenders quote an interest rate and bury the real costs in the fine print. Here's every component of a hard money loan's cost — and how to compare lenders honestly.
The percentage charged on the outstanding loan balance per year. Most hard money rates run 10–14% annually. Unlike banks, we charge simple interest — you only pay on what you borrow, not front-loaded.
A percentage of the loan amount paid upfront at closing. 2 points on a $150K loan = $3,000. Points reduce the lender's exposure and compensate for the short loan term. Compare total points carefully — some lenders quote 1 pt but charge hidden processing fees that add up to the same thing.
If your project runs over and you need to extend the loan beyond the original term (typically 12 months), most lenders charge 1 additional point per 3–6 month extension. Always negotiate extension options before you sign — you may need them.
Admin fees for appraisal coordination, title review, and underwriting processing. These are legitimate costs — but watch for excessive "doc prep" or "wire" fees stacked on top. Total admin fees should not exceed $1,500 on a standard deal.
Good news: most hard money loans have no prepayment penalty. You can pay off early — and you should, because every day the loan is outstanding costs you money. Confirm "no prepay" in writing before closing. Some lenders impose a minimum 3-month interest charge.
Hard money lenders typically lend 75–85% of purchase price (not ARV) for acquisitions. The down payment comes from you — it's the equity cushion that protects the lender. Higher down payment = lower rate in most cases. Some lenders allow cross-collateralization if you have other properties.
Select a deal size to see the full cost breakdown including all fees:
Compared to what? A bank loan at 7% over 30 years costs vastly more interest in total than a hard money loan held for 6 months. The question isn't the rate — it's the total cost for the hold period vs. the profit generated. A 12% rate on a $150K loan for 5 months = $7,500 in interest. If the deal generates $40K profit, the rate was irrelevant.
Rate is one variable. The lowest-rate lender who takes 4 weeks to give you a term sheet and 8 weeks to close will cost you more in carrying costs and missed deals than a slightly higher-rate lender who closes in 12 days. Also check: points, fees, extension terms, and whether they can actually fund (some "lenders" are brokers who place your deal with their network).
No. APR includes points and fees amortized over the loan term. On a 12-month hard money loan with 2 points, the APR is approximately 14–16%, not 12%. This isn't deceptive — it's how short-term lending works. Always ask for the total all-in cost over your expected hold period, not just the stated rate.
We don't do bait-and-switch. The term sheet we issue shows rate, points, and every fee before you commit to anything. Submit your deal and see the full picture in 24 hours.
Get My Rate Quote →Your scope of work is the single most important document in your hard money loan application. A weak SOW = underwriter questions, draw delays, and budget overruns. Here's how experienced Texas investors do it right.
| Line Item | Unit | Avg TX Cost | Notes |
|---|---|---|---|
| Roof replacement | Per SQ (100 SF) | $450–$650/SQ | 3-tab vs. architectural shingle |
| Roof repair / partial | Per job | $800–$3,500 | Flashing, valley, small section |
| Foundation repair (piers) | Per pier | $400–$600/pier | Typical TX home needs 12–20 |
| Exterior paint | Per SF of exterior | $1.50–$3/SF | Prep, prime, 2 coats |
| Siding replacement | Per SF | $4–$12/SF | Hardie board vs. vinyl |
| Window replacement | Per window | $300–$700/window | Supply + install, standard size |
| Garage door replacement | Per door | $900–$1,800 | Single vs. double; opener included |
| Driveway / concrete | Per SF | $6–$12/SF | Depends on demo needed |
| Line Item | Unit | Avg TX Cost | Notes |
|---|---|---|---|
| Panel upgrade (100→200A) | Per job | $1,800–$3,500 | Required for modern code |
| Full rewire (older home) | Per SF | $3–$6/SF | Pre-1980 homes often need this |
| Partial rewire / repairs | Per job | $800–$3,500 | Kitchen/bath circuits, outlets |
| Plumbing re-pipe (PEX) | Per SF | $4–$8/SF | Full supply line replacement |
| Water heater replacement | Per unit | $900–$1,800 | Tank vs. tankless; TX code |
| Sewer line repair/replace | Per LF | $150–$250/LF | Scope camera first (~$300) |
| HVAC replacement | Per ton | $1,200–$1,800/ton | 3-ton avg TX home = ~$4,500–6K |
| Line Item | Unit | Avg TX Cost | Notes |
|---|---|---|---|
| Cabinet demo | Per job | $300–$800 | Disposal included |
| New cabinets (RTA/stock) | Per LF | $120–$200/LF | 10 LF typical small kitchen |
| New cabinets (semi-custom) | Per LF | $200–$350/LF | For higher ARV neighborhoods |
| Granite/quartz countertop | Per SF | $45–$85/SF | Fabrication + install |
| Tile backsplash | Per SF | $8–$20/SF | Subway tile vs. decorative |
| Appliance package | Per set | $1,800–$4,500 | SS range/dishwasher/microwave/fridge |
| Sink + faucet | Per set | $350–$900 | Undermount vs. drop-in |
| Line Item | Unit | Avg TX Cost | Notes |
|---|---|---|---|
| Full gut (demo, tile, fixtures) | Per bath | $6,000–$15,000 | Master bath higher end |
| Tile shower (install) | Per SF | $12–$22/SF | Wall tile only; floor extra |
| Vanity replacement | Per vanity | $400–$1,200 | Supply + install |
| Toilet replacement | Per unit | $250–$500 | Standard efficiency |
| Tub reglazing | Per tub | $400–$700 | Alternative to replacement |
| Tub/shower replacement | Per unit | $1,500–$3,500 | Alcove vs. freestanding |
| Line Item | Unit | Avg TX Cost | Notes |
|---|---|---|---|
| Interior paint (full house) | Per SF living area | $1.50–$2.50/SF | Walls, ceilings, trim; 2 coats |
| LVP flooring (install) | Per SF | $4–$7/SF | Material + labor; prep extra |
| Carpet (bedrooms) | Per SF | $2.50–$5/SF | Mid-grade; pad included |
| Tile (kitchen/bath floors) | Per SF | $6–$14/SF | 12×12 or 18×18 standard |
| Interior doors | Per door | $150–$350/door | Prehung, paint-grade |
| Trim / baseboard replace | Per LF | $3–$6/LF | 5-¼" colonial vs. craftsman |
| Light fixtures (per room) | Per fixture | $100–$350 | Standard flip-grade |
Copy this format and fill in your numbers. Line items, costs, and a clear total are what underwriters need to approve your loan and structure your draw schedule:
These are the mistakes that trigger lender callbacks, stall your underwrite, or result in draw disputes:
Attach your scope of work to your application. We'll review it, confirm the draw structure, and have a term sheet back within 24 hours. Texas residential and small commercial.
Submit Your SOW →Subject-to, seller financing, wrap mortgages, and lease-options give Texas investors access to deals that conventional or hard money lending can't touch. These structures aren't loopholes — they're legitimate acquisition strategies used by sophisticated investors to control properties with less capital, move faster than the market, and create win-win exits for motivated sellers. Here's how each works, when to use them, and where hard money fits in.
Buy the property while the seller's mortgage stays in place. The deed transfers to you but the loan stays in the seller's name. You make the payments, build equity, control the asset — without qualifying for a new loan.
Seller acts as the bank — you make monthly payments directly to them, often with a 5–10 year balloon. No bank qualifying. Common on free-and-clear properties and commercial deals where the seller wants income stream vs lump sum.
A second mortgage that "wraps around" the existing first. You pay the seller one payment; they pay the underlying lender. Spread between your rate and their rate is seller profit. Common in Texas on residential investment deals.
Lease the property with an option to buy at a set price during the option period (typically 1–3 years). Option fee is non-refundable but often credited toward purchase price. Control the asset, generate rental income, buy when ready.
Use creative financing to acquire, hard money to rehab or bridge to conventional. A subject-to acquisition with a hard money second for renovation costs is a powerful structure that minimizes upfront capital while preserving optionality.
Lease an entire building from the owner, sublease units to tenants, pocket the spread. Ideal for apartment buildings and small commercial with a motivated owner who doesn't want to sell but needs relief. Option to buy locks in your exit.
How an investor acquired and rehabbed a Dallas SFR using zero bank financing
| Strategy | Capital Required | Speed | Lender Risk | Legal Complexity | Best Exit |
|---|---|---|---|---|---|
| Subject-To | Very Low ($5–20K) | Fast (2–3 wks) | Due-on-sale (low risk) | Moderate — need attorney | Wholesale, flip, or hold |
| Seller Finance | Low–Moderate (10–20%) | Fast (2–3 wks) | None | Simple — promissory note | Refinance at 12–24 mo |
| Wrap Mortgage | Moderate | Moderate | Seller default risk | Complex — TX attorney required | Refi or sell subject-to |
| Lease-Option | Very Low (option fee) | Fast | None | Simple agreement | Exercise option + flip |
| Master Lease | Low (deposits) | Moderate | None | Moderate | Exercise option |
You acquire with subject-to (no bank qualifying), then use hard money as a second lien to fund the renovation. Two-lender structure with minimal equity tied up. Works when combined LTV stays under 75% of ARV.
Seller requires 15–20% down but your capital is tied up. A hard money short-term bridge loan (secured by another asset) funds the down payment, then conventional financing replaces it at close or shortly after.
You've controlled the property for 18 months via lease-option, forced appreciation through management improvements. Now exercise at the locked-in price using hard money, close fast, then sell or refinance.
You've stabilized a 12-unit building via master lease from 60% to 95% occupancy. Now the numbers support a purchase. Hard money funds the acquisition at the option price while you season for DSCR refinance at 6 months.
Most lenders don't understand subject-to, wraps, or master leases. We do — and we've funded the hard money component on hundreds of creative acquisitions across Texas. If you have a deal structure in mind, walk us through it and we'll tell you exactly where and how we can help.
Discuss Your Creative Deal →Texas real estate operates by different rules than the rest of the country — no state income tax, no deed tax, non-judicial foreclosure, and explosive population growth. Here's what that means for your deals.
Texas allows non-judicial foreclosure — if a borrower defaults, lenders can foreclose without a court proceeding. This dramatically reduces lender risk, which means lenders can offer higher LTVs and move faster. In judicial states (like Florida), lenders are more conservative because foreclosures take 12–18 months in court.
TX foreclosure: 60 days | CA: 12–18 monthsTexas added 1,000+ residents per day in 2023. Dallas, Austin, Houston, and San Antonio are among the fastest-growing metros in the US. This creates a structural floor under real estate prices — more demand means fewer distressed sales and faster absorption. Hard money lenders in Texas feel more comfortable lending on ARV because the market is liquid.
+470,000 new TX residents (2023)Texas has zero state income tax, which attracts out-of-state investors who can keep more of their flip profits and rental cash flow. The result: more buyer competition, higher ARVs, and a deeper pool of buyers when you go to sell your renovated property. Your exit is easier in Texas than most states.
0% state income tax — keeps more profitTexas waived licensing requirements for many trades during COVID housing boom, and the workforce expanded significantly. DFW now has the largest construction labor pool in the Southwest. This means shorter contractor wait times and better bid competition vs. 2021–2022 when labor was nearly impossible to find.
DFW: #1 construction job market in SW USThese are the Texas-specific legal facts that make the state unusually favorable for real estate investors:
Get a hard money term sheet in 24 hours. No income docs, no W-2s, no long waits.
Get My Term Sheet →Texas has 254 counties and five major metros — each with different inventory levels, price appreciation, ARV support, and days-on-market dynamics. Here's where experienced investors are finding deals right now, and what to watch out for in each market.
Texas continues to outperform national averages on most metrics that matter for residential investors:
Submit your deal — property address, purchase price, rehab estimate, and your ARV comp support. We fund fix-and-flip deals across all major Texas markets. Term sheet in 24 hours.
Get a Term Sheet →You found a deal. Now you need to know if it pencils as a flip — and whether a hard money lender will fund it. The math isn't complicated, but wholesalers often underestimate holding costs and overestimate ARV. Here's how to run it right.
3/2, 1,450 SF, Eastside neighborhood. Wholesale contract price $195,000. Here's how a lender analyzes it.
Plug in your numbers to see if this deal works before you lock up the contract.
Bring your ARV, rehab scope, and contract price. We'll tell you if we can fund it — and at what terms — before you're locked in. Most approvals same day. Assignment-friendly, no seasoning required.
Submit Your Deal →