The year 2021 has been significant for all investors who stepped into Texas’ fix and flip industry. The remarkable rise of bidding wars in the residential properties sector and housing shortage across the country have led people to flipping houses in Texas. Be it Dallas, Houston, San Antonio, or any other part of the country, houses are affordable in Texas with the flipping market providing the biggest returns in particular. So, if you are looking to know what exactly flipping houses are or how to flip houses in Texas, you have come to the right place!
Here in this blog, we’ll cover what flipping houses are, why to flip houses, and how to do it. So, without any ado, let’s start with an overview of flipping houses.
What Does House Flipping Refer To?
House flipping is nothing but a process to purchase a listed property, fix it, and then sell it for profit. However, even though the process of flipping a house sounds simple, it doesn’t mean to be easy. The process involves much more than buying, rehabilitating, and selling a property. The process can be overwhelming and intimidating for investors, especially the ones who are not well-versed in real estate investing and financial matters. That said, flipping houses requires investors to carefully analyze the market just like other real estate investing before making any commitment. Extensive market research actually prevents investors from facing hefty losses and helps them find profitable deals.
Reasons to Flip Houses in Texas
Did you know Texas real estate market has been on fire for the last few years? It offers big money-making opportunities to house flippers. House flipping can be highly profitable if you choose the right plan and strategy. And Texas, being the home to some of the biggest flipping markets in the country can help you find one of the most lucrative deals in the country. However, this isn’t the only reason to flip a house in Texas. Here are some of the significant reasons to fix and flip in Texas.
- Affordable Purchase Prices: In Texas, properties are more reasonably affordable than average house prices across the nation. This makes flipping houses in Texas the best option to make money through real estate investing.
- More Availability of Foreclosed Properties: The foreclosure postponements are high in Texas. That means investors have a lot more choices available to invest in.
- Low Tax Rates: Texas has a minimal capital gains tax and no state income tax. This makes it an affordable place for employers, entrepreneurs, and employees to invest and live.
- Good Quality of Life: Texas is an amazing place to live. The mild winters, beaches, lively cities, incredible diversity, and scenic areas make Texas the best place to live in America.
- A rise in Population: The Texas population is rapidly growing, making it the second most moved-to state in The U.S. As per records, the population in Texas has increased from 25.2 million to 29 million.
Steps to Flip a House in Texas
#1. Choose a Good Location
The location is the key aspect of earning profits through flipping houses in Texas. It can make or break a deal, hence, be careful about investing in a county, city, or neighborhood that offers undervalued properties with accessibility to good schools, employment options, etc. Ensure not to choose a property built on a flood plain and do your research before making the final purchase.
#2. Plan the Finances Beforehand
It’s very essential to create a budget and gather funds way before looking out to fix and flip a property in Texas. It not only saves time but also gives the investor a realistic approach to house flipping. You can get in touch with private money lenders to plan the financial side of your flip. Securing your finances beforehand will allow you to avail of a profitable deal as soon as you come across it.
#3. Ensure to Make Profits
Given the complexity of the house flipping process, you may more likely tend to lose track of your finances and end up spending more than you intended or planned to. The best way to avoid such a pitfall is to follow the 70% Rule. this means that you should never pay more than 70% of a property’s ARV (After Repair Value) while initially purchasing your fixer-upper.
#4. Plan an Exit Strategy
The most important part of a fix and flip investment is to determine an exit strategy before investing in a property. There are several strategies to choose from, hence be mindful while picking up a business plan.
Now that you have read the entire blog, you know what house flipping means, why to flip a house, and the steps to do it. When it comes to making huge profits through real estate investments, investors often choose to buy a property through probate sale or flipping a house. Although both these investing strategies help in getting profitable deals, they have risks associated with them. So, it’s always better to hire an experienced real estate agent, especially if you are a newbie real estate investor.