You probably imagine Waco, the hometown of the celebrated Chip & Joanna Gaines, when you think of the hottest location in Texas for house renovations. However, the area just a little bit south, in the Austin Hill Country Area, has had the biggest increase in growth in the post-pandemic market.
Everyone wants a home in the stunning Texas Hill Country, whether it’s because of the enormous influx of Californians, the numerous job prospects from tech companies like Samsung and Tesla expanding into the area or just the breathtaking views of Lake Travis.
Tips for Flipping Houses in Austin
Still not convinced? It could be useful to know that flipping properties in Austin is actually easier than you think. While there isn’t a secret formula to follow, there are a few things to bear in mind that can make your journey easier.
Finding the budget to flip that house
A seller finds it extremely alluring when they may accept a cash offer because it results in a quick and safe transaction.
However, if you don’t have enough cash on hand to cover the entire investment, think about working with an investor to share the costs. Establishing connections with qualified and reliable contractors will also help speed up the process and ensure the completion of high-quality work for any repairs that require outside assistance.
It can’t be emphasized enough how much a knowledgeable Austin real estate agent can aid you in this process, particularly when it comes to identifying the appropriate Austin properties that could be repaired and subsequently sold for a profit. Make sure to hire an experienced real estate agent that can help you every step of the process and has the contacts and expertise to find fantastic real estate opportunities to invest in.
Best homes to flip in Austin
The longer a home sits empty, the more eager the owner would be to sell it, therefore vacant homes in Austin are a fantastic option. When a property isn’t being maintained, visible symptoms of neglect and decay might appear within a few weeks; this is a motivator to rent or sell the property immediately.
Search for properties that have been seized for real estate tax evasion as this is another place to get great prices on properties in Austin. Tax deed sales provide home flippers with rights of ownership to a home for a small portion of its true market worth.
When you’re searching for houses to flip, you would like to identify properties that are being advertised for under what they are really worth because of repossessions and foreclosures. Since you can’t still get a good look at the house prior you put a bid on the property, this form of investing is riskier. Additionally uncommon in Austin, they include.
It is highly likely that the home’s prior owner couldn’t keep it up if they were having financial problems, and in some circumstances, they might have purposefully damaged it out of spite. It’s not a big deal if you were going to renovate the house anyhow, but you should account for these conceivably unanticipated events while you’re figuring out your budget for repairs.
Pick Your Locations Carefully
Flipping houses in Texas is on the boom. The location of a house typically impacts whether a fix and flip operation is successful or not. Make sure to select residences at a discount in desired, “value-add” neighborhoods with respectable, easily accessible schools, rising real estate values, and rising employment rates. As a result, your profit margins will grow.
It’s vital to observe the architecture of Austin. Buyers will be drawn to ranch-style suburban homes constructed to withstand Austin summer heat. Make sure you properly research the real estate market you’re entering before making any purchases.
The Guarantee of Payment
If you’re a new house flipper, it may be difficult to find the money you need to start your first project.
You can obtain 14th Street Capital’s specially crafted private real estate loans within a week of filing an application for finance. So if you need money for Austin fix and flip financing, don’t be hesitant to contact us.
Finding the balance between cost and work
Finding motivated sellers who are prepared to give up some equity for a quick sale is the true secret to successfully flipping homes in Austin. The buying price must be approximately 70% of what the house would sell for after renovation in order to make money on the investment. Discover all you can about purchasing Austin real estate.
Find owners that are ready to sell, need to sell soon, and are willing to negotiate a cheaper price; this is frequently the case during the off-season. Always consider the house’s general condition and the necessary repairs before making an offer.
The greatest homes for flipping are frequently those that only require minor improvements. A house should almost always be avoided if it needs major plumbing, foundation, or mold repairs because these issues can drastically raise the price of a flip.
You can save thousands of dollars and reduce the stress of your restoration project by thoroughly inspecting a home for things like cracked walls, warped floors, and signs of water damage.
If you’re buying directly from a seller, the writing of the buying contract, the sale of the property, and assistance in finding the best properties to flip should all be handled by licensed agents. Preferably, your Austin agent should have personal home-flipping experience.
Make Sure You’re Making Money
The fix and flip process can include some difficult tasks, so you’d be excused for losing track of your money and spending more than you had intended to.
How Much Money Do You Need to Flip Houses in Austin?
There are various line items in a budget for flipping houses, such as real estate expenses and repair expenses. Let’s look into the cost of buying a property first.
Austin’s average house price
Austin houses cost an average of $189,300 in 2019, and according to experts, prices will rise by 4.2 percent in 2020. Purchase and holding fees are extra costs .
Foreclosures appeal to real estate investors because they often sell for less than market value. In Travis County, the median listing price for a house is $32,967, while the average listing price is $283,125.
Keep in mind that a cheap house can actually be in a terrible state, raising the cost of repairs.
Repair costs
Because they depend on the condition of the home and what potential buyers are looking for, repair expenses might vary greatly.
Extensive repairs, for example, can affect how long it takes to complete the restoration and get the home ready for sale. Keep in mind that holding costs (such loan interest) will increase the longer it takes to list and sell the house.
What You Should Research
Recognize the local areas: Investigate aspects of the neighborhood market for a while. For instance, houses in neighborhoods with better schools are wise investments.
Choose the locations you wish to concentrate on and search for houses there.
Network: Find contractors, home inspectors, realtors, title companies, attorneys, etc. to assist you on your route to flipping houses.
Evaluating properly: Bring your go-to contractor with you to figure out how much the project will cost.
Findings from the inspection: A qualified inspection will reveal any issues with the property that might prevent the sale from going through.
Consider all of your available financial options: hard money lenders, conventional loans, crowdsourced loans for real estate, private money lenders, etc.
Seek out the cheapest options for acquiring supplies and materials for home repair.
Consider your exit strategy
Before you invest, you should decide on your exit strategy and incorporate it in your business plan for a fix and flip project.
One of the first questions we at 14th Street Capital ask our borrowers is what their ultimate objective is. Make a wise choice from the many possible alternative strategies!
Getting Money to Flip Homes in the Austin Area
The potential profit from flipping a home has also increased dramatically along with home values. To acquire a house worth flipping in this fiercely competitive market, you’ll need to take out a loan unless you have all the money up front.
There are two choices for the majority of flippers:.
- Obtaining credit from a bank
- Being approved for a hard money loan via a private lender
Compared to a hard money loan, regular banks will be able to finance you with a smaller down payment and a cheaper interest rate (granted, their criteria for eligibility will be much more strict). However, because traditional bank loans take so long to fund considering how quickly homes are selling, buyers who rely on them are missing out on opportunities.
This is due to the fact that other investors making offers on the house you’re interested in are doing so in cash to take advantage of the rapid list-to-sell times.
Hard money loans are the quickest option to obtain funding for a house flip, despite having higher rates and shorter durations than conventional bank loans.
You can typically get the money you need from a hard money lender in Austin like 14th Street Capital in under 2 weeks!
Best neighborhoods for flipping houses in Austin
1. Downtown Austin’s (78701)
Rainey Street and the Seaholm District, to be exact. Developers are obviously taking note of the ongoing rise and demand for downtown lofts.
2. South Austin (78745)
This is a terrific neighborhood to purchase an older house from the 1970s that you can repair and sell for a healthy profit. It’s far enough enough to escape drawbacks of city living, like traffic jams, but close enough to downtown to still feel like the house is in the city.
3.East Riverside (78741)
The hike and bike trail’s expansion has given this area the opportunity to shine. There will likely be many more construction projects like Travis Heights in this area.
4. Highland Park West (78731)
This region will rival the luxury that was previously supposed to be available exclusively in Tarrytown. Three of the homes included on the 2016 AIA Austin Homes Tour, for instance, were located here.
5. Terra Colinas (78738)
Consider this part of West Austin as a less expensive Lakeway. Jump on it because this is one of the Austin neighborhoods where many new houses are being developed.
6. Deep East Austin (78721)
One of Austin’s neighborhoods seeing significant development is East Austin. There are both new and old residences, but there are lots of opportunities. Additionally, it has one of Austin’s top cuisine scenes.
Conclusion
Austin offers a fantastic network of flippers from which you can seek assistance as required. For non-owner occupied properties, the seasoned lender 14th Street Capital will assist you in obtaining a hard money loan so you can begin repairing and flipping in Austin. Simple asset-backed hard money loans can help you obtain the funding you require regardless of your financial situation, whether you have a poor credit score, self-employed, or have a history of foreclosure. These loans have flexible terms and little documentation. Get in contact with us today to begin investing in real estate.