Short-term fix-and-flip financing for Texas real estate investors. Funds the purchase price plus renovation budget. Construction draw facility included. Close in 7–14 days.
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Fix-and-flip loans are specifically designed for investors who acquire a property below its potential value, renovate it to that potential, and sell at the renovated market value. The loan funds both the acquisition and the renovation budget in a single facility — eliminating the need to fund renovation separately or use multiple financing vehicles.
The loan structure is straightforward: the lender commits to a total loan amount (acquisition price plus renovation budget), closes on the acquisition at that total, and holds renovation funds in a draw account that releases as renovation milestones are verified. The investor repays at sale. The lender's security is the property value — at closing and throughout the project — which is why ARV (after-repair value) is the primary underwriting variable.
Fix-and-flip loans are structured specifically for the renovation-to-sale investment cycle. The loan funds both the acquisition price and the renovation budget in one facility, with the renovation portion released over time as work is verified. This is different from a standard hard money or bridge loan that funds only the acquisition — fix-and-flip loans assume the investor will execute a renovation scope as part of the exit strategy.
DFW's suburban expansion creates the most consistent fix-and-flip opportunity set in Texas. Frisco, Plano, South Dallas, Fort Worth, and Cedar Hill neighborhoods offer affordable acquisition prices with strong post-renovation demand. Suburban spec builds — where investors acquire a dated home and completely renovate it to current market standards — are a common DFW flip strategy.
Houston's large housing stock produces a steady stream of distressed inventory at accessible acquisition prices. Garden Oaks, Oak Forest, East End, and Near East End neighborhoods offer fix-and-flip opportunities where the renovation scope is substantial (full kitchen and bath remodels, flooring, exterior) but the ARV supports strong margins. Houston flips frequently exit to owner-occupant buyers who benefit from the fully renovated condition.
Austin's competitive market creates a different fix-and-flip dynamic: acquisition prices in East Austin, South Austin, and North Austin are high enough that the margin calculation is tight, but Austin's exit values are among the highest in Texas. Austin flips work best when the investor finds properties with significant below-market acquisition pricing — often through off-market or distressed seller situations — to create adequate margin.
DFW Suburban Spec Builds: The DFW suburban spec flip is a specific Texas fix-and-flip strategy where investors acquire 1970s–1990s vintage homes in Frisco, Plano, or North Fort Worth subdivisions and execute complete renovation scope (kitchen, bathrooms, flooring, exterior) to bring the property to current market standards. The renovated product commands a significant premium over the pre-renovation as-is value. This strategy works because DFW's buyer demand for updated product is consistently strong and absorption times for well-priced renovated homes are short.
| Parameter | Typical Range (2026) | Notes |
|---|---|---|
| Interest Rate | 10% – 13% annually | Lower end for DFW/Austin experienced borrowers with strong ARV support; higher for Houston distressed and first-time flippers |
| Origination Points | 2.0 – 3.0 points | Standard; higher for first-time borrowers or short-track projects |
| Loan Term | 9 – 18 months | Extensions available at additional cost; confirm extension pricing upfront |
| LTV (ARV-based) | 65% – 70% of ARV | Primary underwriting metric; loan amount = lower of ARV LTV or as-is LTV |
| LTV (As-Is) | 60% – 70% of current as-is value | Used when as-is value is lower constraint on loan amount |
| Loan-to-Cost (LTC) | 75% – 90% | LTC = loan ÷ (acquisition + renovation); higher LTC available for experienced borrowers |
| Payment Structure | Interest-only monthly | Principal balloon due at maturity |
| Construction Draw Release | Milestone or percentage-based | Draw schedule confirmed at loan commitment; typically 3–6 tranches |
| Time to Close | 7 – 14 business days | Appraisal is often the rate-limiting step; schedule appraisal immediately after term sheet |
| Prepayment | Usually no penalty | Confirm minimum interest requirement in term sheet |
DFW is the highest-volume fix-and-flip market in Texas. The metro's consistent population growth and strong buyer demand for move-in ready homes create reliable exit markets for renovated product across all price points. The DFW suburban spec build — acquiring a 1980s–2000s vintage home in Frisco, Plano, South Dallas, or North Fort Worth and executing a full cosmetic renovation — is the most common and accessible Texas flip strategy. Acquisition prices in DFW suburban submarkets range from $280K to $550K depending on zip code and condition, with post-renovation exit values of $400K to $750K. Renovation scopes of $50K to $120K are typical. The DFW flip margin depends heavily on acquisition pricing discipline — overpaying for the as-is property compresses margins even if the renovation is executed well.
Houston's large and diverse housing stock is a consistent source of distressed acquisition opportunities. Inner-loop neighborhoods — Garden Oaks, Oak Forest, East End, Near East End, Heights, and Gulfton — offer fix-and-flip opportunities at accessible acquisition prices ($180K to $400K) with renovation scopes that create substantial ARV uplift. Houston flips exit to a broad buyer pool including first-time buyers, young families, and investors converting to rental. The Houston flip works best with complete renovation scope — full kitchen and bath remodels, new flooring, fresh paint, and exterior improvements that bring the property to move-in ready condition. Houston's lack of zoning restrictions (no city-level zoning) means renovated product has a large and liquid exit market.
Austin's fix-and-flip market operates at higher price points and with more competition than DFW or Houston. Acquisition prices in East Austin, South Austin, and North Austin neighborhoods range from $400K to $700K for properties with fix-and-flip potential. Austin flips require careful ARV underwriting — the lender's appraisal must support the exit value, which is high relative to acquisition price in Austin's competitive market. The most successful Austin flip strategy targets properties with below-market acquisition pricing — often through off-market acquisition, trustee sale, or motivated seller situations — to create margin in a market where on-market deals are frequently overbid. Austin's higher exit values (renovated SFR at $650K to $1M+ in East Austin and South Austin) support larger renovation budgets and meaningful margins when acquisition pricing is disciplined.
San Antonio's fix-and-flip market is more accessible than DFW or Austin. Acquisition prices in established San Antonio neighborhoods range from $180K to $320K, with post-renovation exit values of $280K to $480K depending on submarket. The workforce housing flip — acquiring a dated or distressed property in a stable San Antonio neighborhood and renovating to move-in ready condition — is the most common San Antonio flip strategy. Fort Sam Houston proximity creates stable rental demand, so some San Antonio flips exit to investors converting to long-term holds via DSCR refinance rather than sale. San Antonio's San Antonio Independent School District neighborhoods and near-downtown corridors (Tobin Hill, Monte Vista) attract flip investors targeting the young professional and military family buyer demographics.
Construction draws are the mechanism by which renovation funds are released from the loan facility as work is completed. Understanding the draw process — and planning for it — is essential for managing a Texas fix-and-flip project.
Draw schedule structure: Most Texas fix-and-flip lenders structure draws in one of three ways: (1) milestone-based draws tied to percentage completion (e.g., 25% at rough-in, 50% at mid-point, 75% at substantial completion, 100% at final inspection); (2) time-based draws (monthly releases based on lender-verified progress); (3) hybrid approaches with both milestone and time elements. Confirm the draw schedule with your lender before closing and incorporate it into your project timeline and cash flow planning.
Verification requirements: Draw releases require lender verification of completed work. Verification methods vary: some lenders use third-party inspectors who visit the property; others accept photos and contractor invoices with a self-certification form; others require combination documentation. Understand the verification requirement before closing — inspectors visiting the property weekly adds to project timeline and coordination overhead.
Managing draw timing: Draw releases typically take 3–7 business days from request to receipt of funds. Build this timeline into your project schedule. If a draw request is submitted on Monday, funds may not arrive until Thursday or Friday of the same week. For renovation scopes where timing is tight (e.g., holding period deadline approaching), coordinate with your lender on draw timing before submitting.
Final draw and retention: Most lenders hold back 10–15% of the renovation budget until final inspection confirms completion of all scope items. Final draw is released after the lender's inspector confirms 100% completion of the renovation scope. Budget for this retention in your project cash flow — you won't receive the final renovation tranche until the project is fully complete.
After-repair value is the foundation of fix-and-flip lending. The lender's ARV appraisal — not the borrower's estimate — determines the maximum loan amount. Understanding how lenders arrive at ARV helps borrowers present deals effectively.
Comparative market analysis (CMA) vs. appraisal: Lenders use licensed appraisers to determine ARV. The appraisal process looks at recent comparable sales of similar properties in similar condition — specifically, properties that have been renovated or are in move-in ready condition. Comps should be within 0.5–1 mile for urban neighborhoods, up to 2 miles for suburban areas, and sold within the past 6–12 months. Older comps are deprioritized in fast-moving Texas markets.
Comps for Texas flips: DFW and Austin have strong comp data for renovated SFR — lenders can pull multiple recent sales of comparable renovated homes in most metro zip codes. Houston inner-loop neighborhoods also have good comp support. San Antonio's comp data is solid for established neighborhoods but thinner in transitional areas. Rural Texas and Permian Basin communities may lack sufficient comp data for ARV-based lending — confirm lender appetite for your specific market before submitting.
Borrower vs. lender ARV divergence: Borrower and lender ARV estimates occasionally diverge. A borrower may believe the property's post-renovation value is $550K while the lender's appraiser values it at $500K. The lender's ARV governs the loan amount. To minimize divergence: use a local lender with established appraiser relationships, present recent comparable sales data with your submission, and be conservative in your own ARV estimates.
Texas fix-and-flip lenders work with first-time flippers, though typically with more conservative structures. First-flip caution is warranted: the most common first-flip mistakes — underestimating renovation costs, overestimating ARV, underestimating carrying costs — can turn a promising deal into a losing position.
Conservative terms for first flippers: Lower LTVs (60%–65% vs. 65%–70% for experienced investors), higher rates, and more detailed exit strategy review are standard for first-time borrowers. Some lenders require larger down payments or higher borrower equity. First-time flippers should expect to bring 15%–25% of the total project cost (acquisition + renovation) as their own capital, with the fix-and-flip loan covering the remainder.
Best first-flip markets in Texas: DFW suburban markets (Frisco, Plano, South Dallas) are forgiving first-flip environments because post-renovation absorption is fast — even if the flip takes longer than expected, the property will sell. Houston inner-loop neighborhoods offer similar dynamics with lower acquisition prices reducing absolute risk. San Antonio's workforce housing market is also accessible for first-time flippers with moderate capital.
First-flip strategy recommendations: Partner with an experienced investor as a co-borrower if possible. Select a straightforward project (cosmetic renovation, no structural work) for your first flip. Secure a contractor commitment before closing. Build a 15–20% contingency into your renovation budget. Underwrite the ARV conservatively — assume the lender's appraisal will come in at the low end of your range, not the high end.
The fix-and-flip margin is the spread between your total project cost and your net sale proceeds. Calculating it accurately — before you submit the deal to a lender — is the most important step in determining whether a Texas flip is viable.
Total project cost components: (1) Acquisition price + closing costs (typically 2–3% of purchase price); (2) Renovation budget (hard costs + soft costs + contingency, typically 10–20% of hard costs); (3) Interest and origination fees during the holding period; (4) Holding costs (insurance, taxes, utilities, HOA if applicable); (5) Selling costs (agent commissions 5–6%, transfer taxes, title insurance on sale). All components must be included — omitting selling costs is a common beginner error that makes a project look more profitable than it is.
Target margin: A viable Texas flip typically requires a minimum gross margin of 15–20% of total project cost (before overhead and taxes) to be worthwhile after accounting for carrying costs, selling costs, and unexpected items. Margins below 10% are risky — unexpected renovation overages or absorption delays can quickly eliminate the margin entirely. Margins above 20–25% indicate either a below-market acquisition price or a market with exceptional demand for renovated product.
Absorption risk: Texas metro absorption rates are generally favorable — well-priced renovated DFW and Houston properties sell within 2–4 weeks of listing in most submarkets. Austin is similarly liquid for well-priced product. San Antonio absorption is slightly slower (3–6 weeks typical). Build a 4–6 week absorption buffer into your project timeline and carrying cost calculations. Properties that sit on the market because they're priced above market absorption absorb carrying costs that compress or eliminate margin.
| Financing Type | What It Funds | Rate (2026) | Best For |
|---|---|---|---|
| Fix-and-Flip Loan | Acquisition + Renovation (draws) | 10–13% | DFW/Houston/Austin/San Antonio flip projects |
| Hard Money | Acquisition only (no renovation budget) | 10–14% | Distressed purchases, time-sensitive deals |
| Bridge Loan | Acquisition (stabilized property) | 9–13% | Buy-and-hold bridge ahead of DSCR refinance |
| DSCR Loan | Long-term hold (no flip component) | 7–9.5% | Rental portfolio long-term holds |
| Cash Purchase | Full acquisition price | None (opportunity cost) | Highly competitive deals where cash beats financed offers |
A fix-and-flip loan is a short-term real estate loan that funds both the acquisition of an investment property and its renovation costs. In Texas, fix-and-flip lenders provide the purchase price plus a construction draw facility — releasing funds as renovation milestones are completed and verified. The loan is repaid from sale proceeds when the renovated property sells. These are private capital loans for investment properties only, not owner-occupied residences. Fix-and-flip loans are asset-based: lenders evaluate after-repair value (ARV), project costs, and exit market rather than borrower income. Common Texas uses include DFW suburban spec builds, Houston distressed property renovations, Austin competitive bidding acquisitions, and San Antonio workforce housing flips.
Texas fix-and-flip loan rates in 2026 generally range from approximately 10% to 13% annually. Origination fees of 2 to 3 points are typical. Interest-only monthly payments are standard during the loan term. DFW and Austin metro projects with experienced borrowers, strong ARVs, and realistic renovation budgets tend to attract rates at the lower end of the range. Houston distressed properties, first-time flippers, or projects in lower-liquidity secondary markets may see rates toward the upper end. All rates are informational; consult directly with licensed Texas lenders for current pricing on your specific project.
Construction draw facilities work as follows: (1) The lender commits to a total loan amount covering acquisition plus renovation budget; (2) The acquisition portion funds at closing; (3) Renovation funds are held in reserve and released in draws as work is completed; (4) The borrower requests a draw, the lender sends an inspector or reviews photos/documentation to verify completed work, then releases the next tranche of funds. Draw schedules vary by lender — some release funds in 3–4 milestone-based draws, others release monthly based on percentage completion. Understand the draw schedule and inspection process before closing, as delays in draw funding can stall renovation timelines and increase carrying costs. Texas lenders in the DFW market often have streamlined digital draw processes; confirm draw procedures upfront.
Most Texas fix-and-flip lenders use two LTV calculations: (1) As-is LTV — typically 65%–75% of current as-is value; (2) ARV LTV — typically 65%–70% of the after-repair value as determined by the lender appraisal. The loan amount is typically the lower of the two calculations applied. For renovation-heavy deals, lenders may also evaluate loan-to-cost (LTC) — total loan divided by total project cost (acquisition + renovation) — capping at 80%–90% LTC for experienced borrowers. All limits vary by lender and deal. DFW and Austin metro properties with strong recent comp data typically support ARV-based lending at the higher end of the range.
ARV is estimated from recent comparable sales (comps) — similar properties in the same neighborhood that sold in renovated condition within the past 6–12 months. Good comps for Texas flips should match on: bedroom/bathroom count, square footage (within 15%), age, and lot size. In fast-moving DFW submarkets, prioritize comps from the past 3–6 months over older sales — market movement can render year-old comps unreliable. Austin and Houston neighborhoods in transition require even more recent comps. Lenders order their own ARV appraisal as part of underwriting; borrower and lender ARV estimates occasionally diverge. The lender appraised ARV — not your estimate — will determine your maximum loan amount.
Some Texas fix-and-flip lenders work with first-time flippers, though typically with more conservative terms: lower LTVs (60%–65%), higher rates, larger down payment requirements, and more detailed exit strategy review. First-time flippers benefit from: partnering with an experienced investor as co-borrower, selecting a straightforward project (cosmetic renovation vs. structural gut), securing a contractor commitment before closing, and building a realistic contingency budget. A first flip is also a time to underwrite conservatively — most margin errors on first flips come from underestimated renovation costs and overestimated ARVs. Texas markets with high absorption rates for renovated product (DFW suburbs, Austin Eastside) are more forgiving of first-flip underwriting errors than softer markets.
A complete Texas fix-and-flip timeline generally runs: acquisition (1-2 weeks for hard money/fix-and-flip close) + renovation (4-12 weeks depending on scope) + listing and sale (2-6 weeks depending on market and season) + closing (30-45 days after offer accepted). Total timeline typically ranges from 4 to 8 months. DFW metro well-priced renovated properties typically go under contract within 1-3 weeks given strong buyer demand. Austin competitive markets may see faster offers. Houston and San Antonio SFR flips run on similar timelines to DFW. Permian Basin markets have more seasonal dependency and fewer qualified buyers, which can extend the exit timeline.
Top Texas fix-and-flip submarkets in 2026 include: DFW — Frisco and Plano North (newer construction flips at higher price points), South Dallas and Cedar Hill (accessible acquisition prices, strong exit demand), Fort Worth Near Southside (gentrification momentum, increasing ARVs); Houston — East End and Near East End (gentrification corridor, improving comp data), Garden Oaks and Oak Forest (strong school district adjacency, consistent buyer demand), Heights (higher price points, strong demand for updated product); Austin — East Austin (Rundberg, Montopolis, lower east), South Austin (William Cannon, Menchaca corridor), North Austin ( Rundberg, North Lamar industrial conversion areas); San Antonio — Tobin Hill and Monte Vista (close-in gentrification), Medical Center area workforce housing. Avoid neighborhoods where post-renovation demand is soft or where renovation cost exceeds reasonable market absorption — overimproved flips that sit on the market are a common first-time mistake in all Texas markets.