Houston fix and flip loan

Flipping Houses in Houston, Texas: Case Study

A Longleaf Lending customer and experienced real estate investor made $110,000+ on a 4 month Houston-area single-family fix and flip.

The investor used a short-term residential hard money loan from Longleaf Lending to finance the acquisition and 100% of the rehab budget. We closed the property in less than a week.

Why was the flip was so successful?

  • He is an experienced investor, having flipped over 30+ homes in the last few years
  • The investor has a formula and a crew for houses in this price range – it allows him to complete comprehensive renovations in 2 months or less
    • This formula gives him an edge and results in very accurate budgeting
  • He benefited from Covid-related real estate market trends – more homeowners with work flexibility looking for more space in suburban/rural areas

Key stats from the project

Purchase price: $90,000

Rehab budget: $70,000

ARV: $240,000

Sales price: $305,000

Hold time: 110 days

Days on market: 22 days

Net profit: ~$110,000

Challenges with this project

  • This was a tough property to comp, for both the hard money lender and the investor – it was in a more rural part of Houston with fewer available comps
    • The investor used very conservative assumptions that would still result in a successful real estate investment and return
    • When finally sold, he flipped it for more than $50,000 above where he expected the market to be
  • The property was in rough shape – additional contingency was built into the budget in anticipation of hidden costs

At Longleaf, we offer various types of real estate loans and can help fund your project in as little as two days. For more information, check out our loan products or give us a call at 979-200-2823.

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