Hard money lender in Austin, TX.

I am a hard money lender in Austin, and the city asks a different question of an investor than most Texas markets do. Prices here sit well above the rest of the state, the gap between a tired ranch house and a finished one is narrower than people assume, and the land under the house is often worth more than the house. That last fact is why so much of the conversation in Austin is about what else the lot can hold.

Two local rules shape that conversation. The city rewrote its residential code over 2023 and 2024 so that an ordinary single-family lot can carry more than one home, and so that smaller lots can be created. The city also tightened how short-term rentals are licensed and listed. One rule opens up a deal and the other narrows how you should value the finished product, and I underwrite both before I write a term sheet.

I am a private money lender. One person reads your file and the answer comes back with the reason attached, whether it is yes or no. This page covers the parts of Austin where investor activity is visible, what actually trades in the city, and how fix and flip loans in Austin, DSCR loans in Austin and new construction loans in Austin work when the budget is real and the comparables are honest.

The most common investor purchase is the postwar or 1970s ranch house: one story, three bedrooms, slab foundation, an older roof and a kitchen nobody has touched in a long time. In the east and southeast parts of the city these are the flips. The scope I look at first is the slab and the drainage around it, then the roof, the electrical panel and the plumbing under the slab, because a cosmetic budget on a house with foundation movement is not a budget.

Infill is the second category, and it has grown since the residential code changed. A builder buys an older house on a standard lot, and either keeps it and adds a second or third home behind it, or clears the lot and builds two or three new homes. Some go further and split a large lot into smaller ones. These are construction loans, and the questions are about the site plan, the permit path, utilities and whether the finished homes sell or rent at the numbers the builder expects.

Rentals trade too, mostly single-family houses and small duplexes in the north and southeast parts of the city. A BRRRR here is usually a light to medium rehab on a house bought below the finished value, leased on a twelve-month lease and refinanced. The rent has to carry the debt on its own, which in a high-price city takes more discipline than in a cheaper Texas market.

Austin also has newer homes that need little work, bought by investors who want a stable rental from day one. Those are straight DSCR purchases, and the file is about the lease, the insurance quote and the property tax bill, which in Texas is a larger line than many out-of-state investors expect.

Austin's HOME changes, adopted by the city council in two phases in late 2023 and mid 2024, are the local fact I underwrite around most. The first phase lets most single-family lots carry up to three homes by right. The second phase lowered the minimum lot size, so that a larger lot can sometimes be split into smaller lots that each carry a house. The city has since been asked to revisit parts of the rules, so I check the current version before I rely on it.

For an investor, this means a tired house on a deep lot may be worth more as a site than as a flip. It also means the after-repair value of a simple renovation can be capped by what a builder would pay for the land, because a builder is now a buyer for the same house. When I read a flip in East Austin, I ask whether the comparable sales are finished houses or lots that sold to a builder.

The rules do not make infill easy. Each project still needs a site plan, permits, utility capacity and drainage that work, and some lots carry deed restrictions or a homeowners association that limit what can be built regardless of what the city allows. Small projects have also run into lengthy reviews. I want the builder to have confirmed what the lot can hold, in writing, before closing.

The other half is how the finished home is used. Austin licenses short-term rentals and now requires the booking platforms to show a valid license and to remove listings that lack one. A short-term rental can still be legal, but I size a hold on long-term rent, because that is the number a refinance appraiser will support and the one that survives a change in the rules.

Fix and flip loans in Austin put the purchase and the rehab in one facility, and the rehab money is released in draws against work that is finished and inspected. On a slab-on-grade ranch house, the early draws usually cover foundation repair, drainage, the roof and plumbing, and the finishes come later.

The after-repair value is where Austin flips go wrong. Prices across the city have softened from their peak, and in the southeast the spread between a dated house and a renovated one can be thinner than a newcomer expects. I build the value from renovated sales of similar size on nearby streets, not from the citywide median, and I check whether any of the comparables were really land sales. A written term sheet follows within 24 to 48 hours of a complete file, and closing takes 5 to 10 days once title is clear. Pricing is set per deal and stated in the term sheet.

How fix and flip loans work

DSCR loans in Austin qualify on the property's rent, with no tax returns or W2s. I need the lease or a market rent opinion, the insurance quote and the property tax bill, because in Austin those two lines decide whether the rent covers the payment more often than the interest does.

I size the loan on long-term rent. If the plan is a short-term rental, I still underwrite the twelve-month lease the house could command, since that is the figure an appraiser can defend. These close in 14 to 21 days. They work on stabilized single-family houses and duplexes, and on the refinance out of a bridge loan once the work is done and a tenant is in place. Pricing is set per deal and stated in the term sheet.

How DSCR loans work

New construction loans in Austin cover the land and the vertical construction in one facility, from $150K to $1M+. Under the HOME rules the typical project is two or three homes on what used to be one single-family lot, or a new house on a lot created by a split.

I review the contractor bids before closing. I want a line-item budget, a schedule, the site plan and evidence of where the permit stands, plus confirmation of utility service and drainage for the added homes. Draws follow the schedule of values as work is inspected. A builder who has already taken a small infill project through the city's review is a different risk from one who has not. These close in 10 to 14 days once the file is complete.

How construction loans work

The bridge loan is the first half of an Austin BRRRR. You buy a dated house below its finished value, fund the purchase and the rehab with me, lease it, and refinance into a DSCR loan once it is stabilized, with the same lender on both sides. Because I already know the house, the refinance is not a fresh underwrite by a stranger.

Bridge loans also fit builders who need to buy a lot quickly while plans are drawn and permits are in process. In that case the exit is a construction loan rather than a refinance, and I want the timeline to permit spelled out, because carrying land in Austin while a review drags is expensive. Pricing is set per deal and stated in the term sheet.

How the BRRRR bridge works

The margin here is modest, which is normal for a Southeast Austin flip. That is why the budget includes a plumbing check under the slab and a look at the foundation before closing, because one surprise there takes most of the profit.

Insurance and property taxes on a Texas house are a real part of the carry. Four to five months of both, plus utilities and interest, should be in the budget before the purchase price is set.

If the house does not sell at the value planned, the fallback is a long-term rental. I want to know before closing that the twelve-month rent would carry a DSCR refinance, so the fallback is real.