Dallas–Fort Worth is one of the largest and fastest-growing metro areas in the country, with a huge supply of older single-family homes. Ranch houses from the 1950s through the 1980s, in particular, make up a big share of the renovation opportunities across Dallas, Fort Worth and the surrounding suburbs.
Here is how fix-and-flip financing works for DFW projects, and the Texas-specific details that can affect your costs and timeline.
How Fix-and-Flip Financing Works
A fix-and-flip loan is short-term, business-purpose financing for buying and renovating an investment property. The purchase is funded at closing, and the renovation budget is held back and released through draws as work is completed.
On qualified deals, high-leverage programs can finance:
- Up to 100% of the purchase price
- Up to 100% of the renovation budget
- Up to 75% of after-repair value (ARV), which caps the total loan
The 100/100 program starts at a 600 credit score and one completed project, plus verified liquidity of 10% of the rehab budget plus 6 months of payments, third-party fees and closing costs. See Fix-and-Flip Loan Requirements for more detail.
A DFW Example
| Item | Amount |
|---|---|
| Purchase price | $235,000 |
| Renovation budget | $60,000 |
| Total project cost | $295,000 |
| Projected ARV | $410,000 |
| 75% of ARV | $307,500 |
The full purchase and rehab fit under the ARV cap, with a small cushion left over. If the ARV came in at $380,000, the cap would be $285,000 and you would need to cover a $10,000 gap. A conservative ARV estimate protects your cash plan.
Texas-Specific Considerations
No transfer tax, but property taxes matter
Texas does not charge a state or local real estate transfer tax, which keeps closing costs lower than in many states. Title insurance premiums in Texas are set by the state, so the base premium is the same no matter which title company you use. Closings are typically handled by a title company.
The tradeoff is property taxes. Texas has no state income tax, and local property taxes tend to be relatively high. Include a realistic estimate of taxes for your hold period, and check whether the property’s current exemptions (like a homestead exemption) will drop off after you buy.
Contractor licensing and registration
Texas does not issue a statewide general contractor license. Trades are a different story:
- Electricians and HVAC contractors are licensed through the Texas Department of Licensing and Regulation (TDLR).
- Plumbers are licensed by the Texas State Board of Plumbing Examiners.
Many cities add their own rules. Dallas, for example, requires general contractors to register with the city before pulling permits. Make sure your contractor and subs are licensed and registered where you are working, because lenders and inspectors will check.
Permits vary by city
DFW is made up of dozens of separate cities, each with its own building department and rules. A project in Dallas, Fort Worth, Arlington, Garland or Mesquite may have different permit requirements and review times. Before you buy, confirm which jurisdiction the property is actually in. A mailing address can be misleading.
Foundations
North Texas clay soils expand and contract with moisture, and foundation movement is common in older homes. Get a foundation inspection before you close, and budget for repairs if needed. Foundation issues are one of the most common reasons DFW rehab budgets run over.
Tips for a DFW Flip
- Inspect the foundation, roof and HVAC first. These are the big-ticket items in older Texas homes.
- Price comps by school district and subdivision. Values can shift a lot across city and district lines.
- Plan for summer. Heat can slow exterior work and affect scheduling.
- Know your exit. If resale timing slips, a BRRRR refinance into a long-term DSCR rental loan may be a backup plan.
Price Your DFW Deal
Use the 100% Financing Calculator to estimate your loan and cash to close, or learn more about our 100% fix-and-flip financing. When you have a property, submit your deal for a preliminary review.
Sources: Texas Department of Licensing and Regulation, Texas State Board of Plumbing Examiners.
Disclosure
Borrowers Capital LLC provides access to business-purpose real estate financing through correspondent and private lending channels. Program availability, leverage, pricing, fees, loan amounts and approval requirements vary by transaction and are subject to applicable lender guidelines, borrower and property eligibility, valuation, due diligence, underwriting and final approval. References to 100% financing describe the potential financing of eligible project costs and do not guarantee a zero-cash transaction or loan approval. Borrowers Capital LLC may receive compensation in connection with arranging a transaction. This article is general information and does not constitute a commitment to lend, an offer of credit, or financial, legal or tax advice.