Despite a slight market shift from previous years, Texas remains a land of opportunity for fix-and-flip investors.
While profit margins may be lower than in previous years, savvy investors can still reap significant rewards.
This guide explores the current Texas fix-and-flip landscape, highlighting top cities and strategies to maximize your profit potential.
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In 2023, Texas fix and flip projects achieved a 27.5% profit margin, translating to an average gross profit of $66,000.
However, the potential earnings can vary widely based on the specific project and are influenced by factors such as the investor’s experience, educational background, and professional network.
The median sales price of a Texas home reached $326,800 during the first quarter of last year, an increase of 0.6% compared to the same period in 2022.
While the market may not be as attractive as in previous years, you can still find many opportunities to buy and renovate in the Lone Star State.
Some experienced insights into the different city markets and how to take advantage of what Texas offers for a renovation/flip project can greatly improve your bottom line.
House flipping in Texas
No matter which state you choose to invest in, successful house flipping is always bolstered by keen market knowledge and swift project execution—generally aiming for a national average flip time of 180 days.
The increasing presence of millennials in the housing market benefits flippers, as this demographic often seeks move-in-ready homes
Texas cities, in particular, are known for their rising home values and high quality of life.
Due to reasonable property prices and modest renovation costs, they offer excellent fix-and-flip opportunities.
The best returns often come from emerging markets yet to reach saturation.
Real estate in Texas
For the past decade, Texas real estate has thrived, driven by significant growth in major cities like Brownsville, McAllen, and El Paso.
This growth has been accompanied by an influx of large employers, including tech giants, attracted by favorable business conditions and a skilled, cost-effective workforce.
The continuing rise of remote work has further fueled demand, enhancing the appeal of smaller, historically less desirable towns.
This dynamic creates many investment opportunities for house flippers across Texas, highlighting the state’s expanding and diverse real estate landscape.
Best cities in Texas for house flipping
Our picks for great cities in Texas currently present excellent opportunities for real estate investment, particularly for flipping projects, due to their growing market values and demographic appeal.
Brownsville, Texas
Projected to experience a steady increase in home prices, Brownsville shows a promising outlook for homeowners and investors alike, with expected growth reaching up to 3.4% by early 2025.
Overall, it presents a compelling option for real estate investment, largely due to its varied neighborhoods, each offering unique benefits for potential growth and lifestyle.
Some promising areas in Brownsville include:
- Los Ebanos: Known for its upscale living and suburban tranquility, this neighborhood provides a peaceful environment close to the city’s core. It’s ideal for families seeking that sought-after blend of comfort and convenience.
- Paseo de la Resaca: This gated community is popular among those looking for security and luxury, with well-maintained parks and scenic walking trails enhancing its appeal.
Southmost: Vibrant and culturally diverse, Southmost offers a dynamic environment with ample investment opportunities, which is particularly appealing due to its authenticity and lively atmosphere.
McAllen, Texas
With moderate growth projected, McAllen offers a stable environment for real estate investments. Prices are anticipated to increase by up to 3.3% by early 2025.
The local economy benefits from a mix of sectors, including retail, healthcare, and education, providing stability and driving demand for housing.
The real estate market in McAllen is currently dynamic, with median home prices around $315,000 and homes generally selling slightly below the asking price, indicating a buyer’s market.
This could be advantageous for investors looking to purchase properties at competitive prices.
Additionally, McAllen has shown resilience with an annual home price increase of 6.1%, demonstrating its potential for capital appreciation.
El Paso, Texas
El Paso presents strong potential for real estate investment due to its steady market growth and favorable buyer conditions.
The city is experiencing a slight buyer’s market trend, meaning there is a greater supply of homes than demand, which could offer investment opportunities at competitive prices.
As of early 2024, the median home price in El Paso was around $291,000, an increase of 2.1% year over year.
The housing market in El Paso is characterized by stability. Homes typically stay on the market for about 70 days. This relatively quick turnover is facilitated by the high sale-to-list price ratio of 99.17%, which indicates that homes generally sell close to their asking prices.
How to cash in on growing real estate markets
Engaging in fix-n-flip projects is an excellent way to leverage the potential of rising real estate markets.
While you might not become a star on a home improvement TV show, flipping houses can be enjoyable, satisfying, and financially rewarding.
If you’re venturing into markets where reselling might pose challenges, it’s crucial to have a backup plan.
If the property doesn’t sell quickly, consider renting it. Proper planning is essential, as this strategy may need to be in place longer than you initially anticipate.
Park Place Finance can be the key to your fix and flip success story
For those exploring house-flipping possibilities, whether in burgeoning markets or closer to home, Park Place Finance offers financing solutions to support your projects.
Reach out today to explore fix-n-flip opportunities in Texas cities or to discover more about the financing options available.