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Fix and flip loans: purchase and rehab funded together in Texas.
Purchase and rehab in one facility, $25K to $1M+. Rehab is released in draws against completed work rather than handed over up front, and a written term sheet arrives in 24 to 48 hours.
This market
What changes in Texas.
Speed decides more deals here than pricing does. In the major Texas metros the competition for a good flip is usually another cash buyer rather than another financed one, which means the seller is choosing on certainty rather than on the number. A five-day close and a twenty-day close are not two versions of the same offer; frequently only one of them is an offer at all.
That is the whole argument for having terms in writing before you bid. An investor who can show a seller a term sheet is negotiating from a different position than one who is still finding out whether the deal is fundable.
The line most out-of-state investors underprice is insurance. Texas carries weather exposure that markets further north do not, premiums have moved considerably, and a holding cost model built on a national average will be wrong in the direction that hurts.
The instrument
One facility, two things it has to do.
The full detail is on the fix and flip page. Nothing about it is restricted by state.
A fix and flip loan has to fund the purchase and the rehab, and it has to do both without requiring the money to sit in your account before the work happens. Here that is one facility rather than a purchase loan and a separate rehab line: the contract price and the scope of work are underwritten together, against the finished value the property is expected to reach.
Rehab does not arrive as a lump sum. It is released in draws against completed work, so the budget stays a budget rather than a number that got spent on something else. A draw request is inspected and wired the same day it clears, which is the part that decides whether a crew keeps showing up.
Terms
What is on the table.
| Amount | $25,000 to $1,000,000+ |
|---|---|
| Coverage | Up to 100% of purchase and rehab when the deal supports it |
| Rate and points | Set by credit, experience and the deal. Your number is in the term sheet. |
| Decision | 24 to 48 hours from a complete submission |
| Time to close | 5 to 10 days, subject to title clearance |
| Rehab funds | Released in draws against completed work, inspected and wired same day |
| Prepayment | No penalty. Exit whenever the deal is done. |
| Property types | Non-owner-occupied residential, 1 to 4 units, and small multifamily |
Questions
About Texas.
Do you only write fix and flip loans in Texas?
No. Lending is nationwide and this instrument is not restricted by state. Texas has its own page because it is one of the markets these deals most often come from.
Which parts of Texas do you lend in?
All of it. The most active markets are Houston, Dallas, Fort Worth, San Antonio, Austin, which is where the deals have come from rather than a service area.
How is a fix and flip loan different from a rehab loan?
They usually describe the same thing. Some lenders split purchase and rehab into two products; here they are one facility so you are not qualifying for and closing on two loans to do one deal.
Can I get the full rehab budget covered?
Often, yes, when the deal supports it. What the deal supports is set by the finished value and the strength of the exit rather than by a fixed percentage applied to every file.
How fast are rehab draws released?
A draw request is inspected and wired the same day in most cases. The schedule of what each stage is worth is agreed before the first draw, so it is not renegotiated as the project goes.
Elsewhere
Not in Texas?
Lending is nationwide. The states below have their own page because they are where the most deals come from, not because they are the only places money goes. If your property is somewhere else, submit it anyway; the terms do not change with the postmark.
More about this market on the Texas page, and about the instrument on the fix and flip page. This program also has pages for New Jersey, Pennsylvania.
Other instruments: BRRRR, Ground-up construction, DSCR purchase and refinance, Rental portfolio refinance, Wholesaler transactional funding.
Submit a deal
Let's price it.
No credit pull, no obligation, and a real answer either way. If it is not a fit I will tell you why, and usually who to call instead.
- Terms in 24 to 48 hours
- Written, not verbal
- One person, start to finish