House-Flipping with Hard Money Lenders in Texas a Successful Venture?

House flipping using funds from hard money lenders in Texas is still popular, but many people looking to get into the industry wonder whether it can still provide returns like it did in previous years. Not only is it a lucrative business, but it’s also growing, which means those who know how to do it well are seeing in excess of 50% ROI.

The industry saw a slight decline in the number of flipped homes that were selling earlier this year. However, when Realty Trac released the third quarter results, there was actually an 18% increase over last year. With the economy recovering, buyers are getting pickier about what they’ll accept in a home, and they’re looking for houses that are ready to be moved into. The number of flipped homes has remained relatively constant since the last have of 2009, and aside from a few quarterly blips, hasn’t changed much more than a small fraction of a percent in years.

What has changed, however, is the amount of profit rehabbers are bringing in. Although Realty Trac didn’t cover any Texas real estate markets, several regions throughout the country boasted an average profit of more than $200,000 per sale, and one area even topped $350,000 profit. In some of the more modest markets, house flippers received at least $40,000 per rehab project.

There is presently a perfect storm occurring in many markets across the country, which bodes well for rehabbers. Home values are on the rise, and people want turn-key homes. Hard money lenders in Texas have money ready to lend for these projects, though it’s worth noting that the number of homes that are ideal for fix and flip projects is shrinking.

Hard money lenders in Texas can give you the funds you need to do a home makeover, but if you want to get the most for the money, you need to identify who the buyers are in your particular market, and design the home for their tastes. This time around, Realty Trac focused on millennials and baby boomers who are buying homes, and noted how each group is looking for something very different in a new home. As you approach a new project, check out the demographics and see who inhabits the neighborhood. For instance, millennials tend to look for open floor plans and low-maintenance features. They’re also not into pricey details, so you can skip things like crown molding. Boomers, on the other hand, still appreciate the fine touches that make a house more elegant, though they’re also budget conscious and don’t want an overwhelming mortgage.

 

It’s clear that the profit is there, and that people in the business of flipping homes are getting amazing ROI right now. However, the diminished inventory makes it difficult to find the right home to renovate, and experienced rehabbers are jumping on them fast. When you have financing lined up with hard money lenders in Texas, sellers are more-likely to work with you because they know the transaction will be swift and easy for them. Be true to your buyers and make educated decisions- incredible profits are still being seen across the industry.

 

Dennis Dahlberg
Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:     (512) 516-1177 
dennis@level4funding.com
www.Level4Funding.com

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