$260K fix & flip in Houston, TX — 80% LTC, 12-day close

Situation

A first-time investor with steady W-2 income and no completed projects wanted to renovate a three-bedroom house in a Houston suburb with strong resale activity. With no track record of their own, experience was the obvious hurdle.

Structure

The borrower hired a licensed general contractor with a long list of completed renovations in the same area, and the GC’s projects counted as the borrower’s experience. As a Tier 1 file — first project with a licensed GC — leverage started a step below the maximum at 80% of the $325,000 cost, priced at 9.50% with two points. With the GC agreement, license and insurance in the file, it closed in 12 days.

In numbers: a $260,000 loan against $325,000 of total cost left $65,000 of borrower equity in the deal. The value test — 75% of the $420,000 after-repair value ($315,000) — sat above the loan, so cost, not value, set the size. Fully drawn, interest-only carry at 9.50% works out to about $2,058 a month, and 2 points of origination came to $5,200 at closing.

Draws

The GC’s itemised bid became the draw schedule: roof and exterior, plumbing and electrical, interior finishes, and landscaping and punch list. Each milestone was released against photos and invoices, with a remote inspection where the work allowed it.

The file

The file that closed: a purchase contract, the GC’s license, insurance and list of completed projects, the itemised bid, two months of bank statements showing the down payment and six months of reserves, and the LLC documents.

Exit

The house was listed after the final draw and sold to an owner-occupant buyer. The completed project now counts toward the investor’s own experience, moving the next file closer to Tier 2 leverage and pricing.

• GC’s completed projects counted as experience
• Itemised GC bid doubled as the draw schedule
• Conservative Tier 1 leverage with a clear upgrade path
• Strong resale comparables supported the ARV

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Fix & flip loans in Texas →