Texas is one of the most active fix and flip markets in the country, and the lending mechanics are standard: the loan sizes against after-repair value, rehab funds through inspected draws, and the exit is a sale.
The Texas-specific number is property tax. Effective rates here run well above the national norm, and on a flip that is not an operating expense you can offset with rent — it is pure carry against a property producing no income.
Who lends on fix and flip projects in Texas?
Private lenders, debt funds, and specialty hard-money shops. They size against after-repair value — commonly up to 70% of ARV — or against total cost, typically 85% of purchase plus 100% of rehab, whichever produces the smaller loan. Terms run 6-18 months, interest-only, with 1-2 points in. Banks generally do not lend on this profile.
Texas has depth on the lender side that thinner markets do not: Dallas-Fort Worth, Houston, San Antonio and Austin all support active private-lending competition, which shows up as real pricing differences between quotes rather than a single take-it-or-leave-it offer. That is the argument for getting more than one.
What a Texas lender examines: ARV and its comparables, scope and budget, your completed-flip track record, liquidity for equity and carry, and the submarket — a rehab in a metro with heavy new-build supply underwrites differently from one in a supply-constrained infill pocket.
How is a Texas fix and flip loan sized?
On the lower of an ARV test and a cost test. A worked Texas deal:
| Line | Amount | Note |
|---|---|---|
| Purchase price | $265,000 | |
| Rehab budget | $70,000 | |
| Total cost | $335,000 | |
| After-repair value | $410,000 | supported by comps |
| Loan at 70% of ARV | $287,000 | binding test |
| Loan at 85% purchase + 100% rehab | $295,250 | not binding |
| Loan amount | $287,000 | |
| Sponsor equity | $48,000 | cost less loan |
The ARV test binds again, capping the loan $8,250 below what the cost test would allow. This is the norm rather than the exception on deals with a healthy spread. While the ARV test is the binding one, a $1 change in the appraiser's number moves proceeds by $0.70 and your equity requirement by $0.30 — not dollar for dollar. Once the cost test binds instead, the appraisal stops moving your equity at all.
What does property tax cost you on a Texas flip?
More than most investors model, because Texas funds local government substantially through property tax and a flip generates no income to offset it. On the deal above, nine months of tax is $4,373 — roughly a fifth of the eventual profit, spent on a house nobody is living in.
The full carry on the same deal, with the loan averaging about 75% drawn at 10.75%:
| Cost | Amount |
|---|---|
| Interest (avg 75% of $287,000, 10.75%, 9 months) | $17,355 |
| Points (2% of loan) | $5,740 |
| Property taxes (9 months) | $4,373 |
| Insurance (9 months) | $1,350 |
| Selling costs (6% of $410,000) | $24,600 |
| Total carry and transaction costs | $53,418 |
| Total cost including purchase and rehab | $388,417 |
| Profit at a $410,000 sale | $21,583 |
| Carry funded by the sponsor (interest, points, taxes, insurance) | $28,817 |
| Total cash invested | $76,817 |
| Return on invested cash, 9 months | 28.1% |
Note the shape of that: property taxes at $4,373 are 20% of the $21,583 profit. Compare it against insurance at $1,350 — in most states those two are closer together, and in Texas the tax line is more than three times the insurance line.
Two further Texas tax points that matter on a flip:
- A sale can reset the assessment. If you buy well below the prior assessed value the tax may fall; if you buy above it, your carry rises from the next assessment. Model the number you will actually pay.
- A completed renovation raises the assessed value. That mostly lands on your buyer rather than you on a short hold, but on a project that slips past a full assessment cycle it becomes your problem.
What else moves a Texas flip?
Insurance is cheaper than the coast but hail is the driver. Across North and Central Texas, roof condition and hail history move premiums and, on older roofs, insurability. A roof replacement inside the scope of work often improves both the sale and the insurance quote.
Supply matters more here than in constrained markets. Texas metros build. A rehab competing against new construction at a similar price point sells on condition and location rather than on being new, and the ARV comps need to reflect that competition honestly — an optimistic ARV is the single most common way these deals go wrong, and it is the number the loan is sized on.
How do you get competing fix and flip quotes in Texas?
By matching the deal against current program criteria rather than shopping lender by lender. Texas has genuine private-lending competition, which only helps if the quotes are priced against the same version of the deal — sequential outreach produces quotes made weeks apart against a drifting scope.
YieldStack is a commercial mortgage broker and financing marketplace — not a lender. One submission is pre-screened for bankability and matched at the program level against 5,000+ loan programs, including fix and flip, bridge and renovation structures. Competing terms come back side by side, the median time to a first lender offer is under an hour, and there is $0 upfront with a 0.50-1.00% success fee only when the loan closes. Every credit decision is made by the participating lender.
The bottom line
Texas fix and flip loans size on the lower of roughly 70% of ARV and 85% of purchase plus rehab, run 6-18 months interest-only at 1-2 points. Underwrite property tax as a real carry cost — on a $410,000 ARV deal it is $4,373 across nine months, a fifth of the profit, and more than three times the insurance line.
Submit your Texas flip at YieldStack. $0 upfront — 0.50-1.00% at closing only.