Thinking about flipping houses in Dallas but not sure if it’s a good place for it? It’s smart to research before any big real estate investment. Lucky for you, Dallas is a great place to flip houses!
It ranks as one of the top places in the nation for this real estate business model. If you want to get started, now is a great time to enter, given the market conditions, even if you’ll face some competition in buying.
But you’ll want to be smart with your investment, even with the strong market. Learn the best way to approach a house flip in Dallas to ensure you leave with a worthwhile profit.
- Why Should You Consider Flipping Houses in Dallas
- Is Flipping Houses in Dallas Profitable?
- Where To Flip Houses in Dallas: Best Neighborhoods
- Flipping Houses in Dallas in 6 Steps
- Costs of Flipping Houses in Dallas
- Do You Need a License to Flip Houses in Dallas?
- Other Cities to Look At for Profitable House Flipping
- Wrapping Up
Why Should You Consider Flipping Houses in Dallas
Property investors looking at Dallas are in for a treat. It’s a safe and steady market with high demand and a great forecast for buying.
- Stable median home prices: The median home price in Dallas right now is $309,505, down 2% in the last year. This is a sign of a relatively stable market.
- Inventory increase: The end of 2023 is expected to see a 100% increase in homes on the market. There will be a great selection of homes for interested buyers.
- Strong economy: Last year saw a 4.24% increase in the job market in Dallas, which is in line with the five-year average of 3.25%. A thriving job market is a sign of a safe and strong economy.
- Forecasted buyer’s market: Dallas is forecasted to be one of the nation’s best buyers markets by the end of 2023. This makes it a great time to buy a home.
- House-flipping community: There’s a great community of house flippers in Dallas, many of whom have seen success in the last few years.
Is Flipping Houses in Dallas Profitable?
Yes, flipping houses in Dallas can be profitable if you pick the right project. The market is favorable for house flipping due to its stability and historical price increases.
The median house price has remained relatively stable in the last few years. 2022 was a standout year for the housing market, and most of the nation is seeing drastic drops in prices. Dallas homes are holding their value well comparatively, showing the strength of the market.
The second quarter of 2023 saw record-high increases in Dallas, so this slight decrease is only a natural correction. It’s nothing to be worried about as a house flipper. Knock, a home-selling company, forecasts that home values in Dallas will increase by 6.3% by the end of 2023.
Where To Flip Houses in Dallas: Best Neighborhoods
A glance at available houses on the Oak Cliff market shows the diversity of older and newer homes in this neighborhood. It’s one of the most historic areas of the city and draws in many house flippers.
Properties in Oak Cliff have had the largest price increases anywhere in Dallas in the last decade. Average house prices remain below the city average, making it a great place to target for house flippers looking for affordable homes to renovate.
The median house price is $275,000, but this average is pulled up by many of the newer homes on the market. Many houses sit around $200,000 on the market and are ripe for renovation.
Houses are also sitting on the market for longer compared to last year, making it a great time to look as a buyer.
Lake Highlands is shifting from an older neighborhood to one full of high-end homes. If you can get your hands on one of the few remaining older homes, it’s a safe investment to flip.
Older houses in this area will cost more upfront due to the reputation of the neighborhood, but this also provides a lower risk for your investment. Land in Lake Highlands is less susceptible to market conditions, as there will always be steady demand and high desirability.
The median house price is $580,000, but this number is drastically brought up by the large and luxury homes in the area. There are many homes in the $200,000 to $400,000 range that are prime real estate for flipping.
The last year saw a 12.6% increase in the median house price, largely due to the shift that the neighborhood is seeing. With more homes on the market now, it’s worth looking for a house.
If you’re looking for a larger house-flipping project that focuses on a luxury feel, Lake Highlands is a great neighborhood to consider.
Garland is one of Dallas’ fastest growing cities, with great infrastructure to support the growth. The city announced that it wants to grow its residential neighborhoods as the demand increases, which is a great opportunity for house flippers to invest in the area.
The median house price is $301,832, and most homes are around this price range.
The median age that houses in this area were built in is 1978, but many houses are even older than this. These older homes will be easier to modernize and flip.
Flipping Houses in Dallas in 6 Steps
Step 1: Find Properties
To start house flipping, you need to find the right house. Scan the market for properties that look undervalued and prime for a makeover. It’s best to look in neighborhoods that have older homes and are going through a growth stage.
With the population of Dallas growing, many of the suburbs will see increasing demand but still have older homes. You can find properties on Multiple Listing Service (MLS) websites, such as Houzeo or Zillow.
Step 2: Research the Houses
Once you see a few houses that pique your interest, research them thoroughly. You don’t want any surprises after you buy, so ensure you know everything you can beforehand.
Talk to the owners, real estate agents, and even people in the neighborhood to learn more. Understand the history of the house and neighborhood.
It may be a smart idea to bring in a contractor if you’re serious about the house to give it a look over and ask the right questions. The more you know, the better you bid a fair price and be confident you’re getting the right deal.
Step 3: Build Your Strategy
Before offering on the house you pick, you’ll want to map out your strategy to ensure it will be worthwhile. To do this, you’ll want to conservatively estimate your renovation costs and after-repair value.
Use the 70 percent rule equation to calculate your maximum purchasing price for that property.
It’s key to think about all other expenses you may have throughout the process, as well. Hidden costs such as selling costs and holding costs will cut into your profits.
Draft up a strong financial plan before you buy the property; this will ensure you reduce the risk of losing your investment.
Step 4: Secure Funds & Make The Offer
Funding your project will vary based on your financial circumstances. For those who need a loan, you’ll have a difficult time getting a traditional loan from the bank. House flipping is viewed as risky, so banks may not accept your request.
Consider finding reputable private money lenders as an alternative. Hard money lenders will differ in their contracts and conditions, so ensure you know exactly what you’re agreeing to when you get a loan.
Once you have the money, make your offer, ensure you don’t get caught up in a bidding war, and follow your initial plan.
Step 5: Flip the House
Be prepared to have higher rehab costs than initially expected. It’s common for additional expenses to come up in house flipping. The more you dig into the house, the more you find to fix.
Do as much of the work as you can yourself to save money and use reliable contractors for the rest.
Step 6: Sell It!
Once your house is finished, you can put it on the market. List across as many MLS sites as possible.
First-time flippers should consider using a real estate agent at this point, which ensures you list the right market value on your project. You don’t want to overestimate or underestimate the worth.
Experts will know the right pricing, as well as the right places to get buyer’s eyes on it.
Costs of Flipping Houses in Dallas
Flipping houses in Dallas takes a bit of cash to get started. You can split your expenses into three categories: initial investment, rehab costs, and closing expenses.
Your initial investment is straightforward but extremely important. You don’t want to pay too much and end up losing money. With the median house price in Dallas sitting around $300,000, you’ll likely find a property for less than this.
Your rehab costs are all of the expenses during the flip. While it may seem like it’s only labor and materials, you need to consider all the additional expenses for holding the property.
Plan to pay insurance, loan repayment fees, utilities, and any other house expenses while you own the property.
Closing expenses will vary based on your strategy. They can be minimized, but it’s not a place you want to skimp on costs because investing in the right strategy can help you secure more profit.
On average, closing costs will take between 2% and 6% of your house’s value.
Do You Need a License to Flip Houses in Dallas?
No, you do not need a license to flip houses in Dallas. Texas has no laws regarding house flipping credentials.
It may be beneficial to get a real estate license in Texas, though. You will be more knowledgeable about the Texas housing market laws and save yourself money in the long run. Real estate fees can be quite expensive if you do multiple house flips.
To become a realtor in Texas, you need 180 hours of coursework before taking the license exams.
Other Cities to Look At for Profitable House Flipping
Even if Dallas may not be the right place for you, don’t rule out house flipping. Consider these other housing markets that are ripe for flippers.
- Flipping Houses in Austin: This other Texan city offers the same urban feeling but draws in a different crowd. Although it’s been a tough last few years for house flipping, Austin might turn around and offer huge profit potential.
- Flipping Houses in Houston: Houston’s large population, older homes, and low median home prices make it a great place for house flippers to consider.
- Flipping Houses in Chicago: Chicago’s growing housing market is forecasted to have a strong next year. With the wide availability of older homes, consider a house flip project here.
It’s a great market in Dallas for house flippers. You should still be cautious starting any large project like this. While a strong market and forecast helps reduce risk a bit, you still need to plan your project well.
Take advantage of the incoming buyer’s market and find yourself a great property to flip.
Hopefully, you feel ready to start flipping houses in Dallas. Let us know your thoughts in the comments, or share this guide with other real estate investors!