The Cheapest Opportunistic Places in Texas to Flip a House
Texas offers a wealth of opportunities for fix-and-flip investments. It might be worth looking beyond big cities to smaller markets. Here are five ideas.
House flipping can be a great investment, but you must be willing to put in the time. Before you can put in time to fix a property, you have to find one that has the potential to grow in value after you repair or rehabilitate it. This often involves locating areas that are poised to experience population growth, putting fix-and-flip homes in high demand.
Most big cities in Texas are experiencing a rather long-term spike in growth. Even after a post-pandemic cooling of the Texas real estate market, home prices in many parts of cities like Austin and Houston remain high. Other areas may present good opportunities for fix-and-flip investments. Instead of the big cities, it might be worth looking at suburbs, small cities, or small towns.
What we mean by “opportunistic” is not to take advantage of other people’s bad situations; rather, we’re describing great potential opportunities for returns. The following are five possible locations for new fix-and-flip opportunities, along with examples of properties in those cities that could work as fix-and-flip projects.
5 opportunistic Texas markets for fix-and-flips
Arlington
With a population just shy of 400,000 people, Arlington is the third-largest city in the Dallas-Forth Worth metro area, also known as the Metroplex. While home prices in many Texas suburbs have soared higher than those in the cities they orbit, Arlington’s prices remain lower than the Metroplex’s namesake cities, with one exception:
Arlington
Median listing price: $339,000
Median sales price: $333,000
Fort Worth
Median listing price: $342,000
Median sales price: $314,100
Compared to…
Dallas
Median listing price: $484,900
Median sales price: $368,800
The Metroplex is among the fastest-growing metro areas in the country and has led the nation in numerical growth in recent years. Arlington is home to several of the Metroplex’s most well-known attractions, including the original Six Flags Over Texas theme park and the venues for Major League Baseball’s Texas Rangers, the NFL’s Dallas Cowboys, and the WNBA’s Dallas Wings. The city’s location between Dallas and Fort Worth gives residents relatively easy access to much of the rest of the Metroplex.
Image from Realtor.com
It is often difficult to tell what kind of improvements a home needs based solely on photographs. This is not one of those cases. This home needs extensive interior work to repair damaged walls, floors, and ceilings. Its list price of $147,687 puts it well below similar properties in the area, which have estimated values of $214,000 or more. If the home only needs repairs to its visible conditions, it could turn a good profit.
Bastrop
While Bastrop is officially part of the Greater Austin metro area, it still seems more like a small town than a suburb in many ways. That may be about to change. For now, though, Bastrop’s median home prices are considerably lower than in nearby Austin:
Bastrop
Median listing price: $449,900
Median sales price: $390,000
Compared to…
Austin
Median listing price: $635,000
Median sales price: $492,300
Bastrop’s population nearly doubled from 2000 to 2020, going from about 5,300 to just over 10,000. City leaders now reportedly expect the population to double again in a much shorter span of time. Part of this is likely due to larger growth trends in the Austin metro area. One factor that applies specifically to Bastrop, however, involves tech entrepreneur Elon Musk. Two Musk-owned companies, SpaceX and the Boring Company, are building new facilities in Bastrop.
Image from Realtor.com
The pictured property has a list price of $229,900. Nearby properties have estimated values that are greater by $50,000 or more, suggesting that the home just needs a bit of work to match the value of comparable homes.
Converse
Converse is part of the San Antonio metro area. It is located in northeast Bexar County adjacent to Randolph Air Force Base. Its median home prices lag behind those of San Antonio:
Converse
Median listing price: $276,000
Median sales price: $255,000
Compared to…
San Antonio
Median listing price: $300,000
Median sales price: $284,600
The city is part of a cluster of suburbs around Randolph AFB, including Live Oak, Schertz, and Universal City. it has experienced substantial population growth, going from 175 people in 1946 to almost 30,000 people today.
Part of the reason for Converse’s recent population growth involves physical growth. San Antonio abandoned plans to annex nearby land in 2016. Converse stepped in and annexed twelve square miles the following year. This more than doubled the city’s land area, and city leaders expect that the population will increase to 68,000 or more in the next decade.
Image from Realtor.com
This property, listed at $160,000, has no plainly visible problems. Its neighbors have estimated values of around $225,000, however. This may indicate opportunity for work to be done.
Killeen
Killeen is a city of just over 150,000 people in Bell County. It is located near Interstate 35 about 55 miles north of Austin. Dallas and San Antonio are 125 miles to the north and south, respectively.
Killeen
Median listing price: $249,900
Median sales price: $238,200
The United States Army is by far Killeen’s largest employer and is likely to drive continued population growth. Fort Cavazos, formerly known as Fort Hood, is directly adjacent to the city. A 2019 study predicted a “population boom” through at least 2036. As of late 2022, the Temple-Killeen area ranked sixth among the nation’s fastest-growing midsized metro areas.
Image from Realtor.com
With a listing price of $95,000, this property seems to have an interesting story. Comparable properties nearby are worth upwards of $140,000, so hopefully its issues are repairable.
Lubbock
Lubbock’s location along the edge of the vast plain known as the Llano Estacado is an important one in Texas history. This area was once the heart of a sprawling area controlled by the Comanche. Lubbock didn’t incorporate as a city until 1909, but it grew quickly.
With a population of about 264,000, Lubbock is now the 10th-largest city in Texas. It has a median home listing price of $250,000 and, interestingly, a higher median sales price of $257,700.
Education is one of Lubbock’s largest industries and the driver of much of its growth. Texas Tech University employs about 6,000 people and has a student enrollment of about 37,000. The population could double to half a million in the next two decades.
Image from Realtor.com
Lubbock might be off the beaten path for many house flippers, which means that its profit margins might not be as large as in other markets. This house, priced at $55,000, has comparable neighbors valued at anywhere from $20,000 to $50,000 more.
How can hard money loans help house flippers?
Many forms of real estate financing do not work well for fix-and-flip projects. House flippers often work on a fairly fast schedule. They need to get in, make their repairs, and get out with a timetable measured in months or, at most, a few years. A loan with a term of 15 or 30 years isn’t much help.
This is where hard money lenders can step in and help. They work with investors all the time, and they understand their need for a quick turnaround. They also have greater flexibility than traditional lenders, allowing them to tailor loan products to investors’ needs.
Learn more about hard money loans for Texas fix-and-flip projects
The hard money lenders at Capstone Capital Partners offer loans for fix-and-flips and other real estate investment projects. Our team has extensive experience with a wide variety of investments in numerous Texas markets. We provide fast and flexible funding options with friendly service from start to finish. Applying is easy, so contact us today to get your free pre-approval started.
