Hard money lender in Houston, Texas
Fix and flip, construction, bridge and DSCR rental loans across greater Houston, funded from our own capital. We are headquartered here, so we know these submarkets, these taxes and these flood maps first hand.
What we fund here
Houston is the market we know best. Roughly speaking, the files split four ways: cosmetic and full rehab flips inside the Loop and in the older suburban rings, teardown and townhome construction on the near north and east sides, bridge loans on small multifamily and mixed use, and DSCR rental loans on everything that gets kept.
Because we are here, the practical steps are simpler. Our valuation and title relationships are local, and if a file needs somebody to actually look at a house, somebody can.
What makes a Houston deal work
Three things decide most Houston flip files, and none of them is the purchase price.
The comps have to carry the finished product. Houston blocks change character quickly. A renovated house one street over may not be a comp if that street has different deed restrictions or a different lot pattern. We lend against an appraiser’s after repair value supported by closed sales, so an optimistic ARV is the most common reason a term sheet reprices.
Taxes and insurance have to be real. Property taxes are high here and the reassessment after a purchase is a certainty, not a risk. Insurance in coastal and flood adjacent areas is expensive and getting more so. A rental exit that pencils at the seller’s current tax rate and a guessed insurance number often does not pencil at the real ones.
The exit has to be nameable. Sell, refinance into a DSCR loan, or refinance into bank debt. We underwrite that exit before funding, which on a Houston rental means checking that the rents actually support the coverage ratio at today’s taxes and insurance.
Typical Houston files
- Cosmetic to full rehab on a 1950s ranch in Oak Forest, Spring Branch or Garden Oaks
- Teardown and two unit townhome construction in the Heights, Independence Heights or EaDo
- Bridge on an eight to twenty unit apartment building bought below replacement cost
- DSCR refinance on a stabilized single family rental in Katy, Cypress or Pearland
- Cash out bridge on an unencumbered property to fund the next acquisition
- Delayed financing after an auction or estate purchase made with cash
Programs available in Houston
| Program | Loan size | Max leverage | Term |
|---|---|---|---|
| Fix and flip | $100K to $3MM | 90% purchase 100% rehab 75% of ARV | 12 to 18 mo |
| Ground up construction | $250K to $5MM | 85% of cost 70% of finished value | 12 to 24 mo |
| Bridge | $150K to $5MM | 75% purchase 70% cash out | 12 to 24 mo |
| DSCR rental | $100K to $3MM | 80% purchase 75% cash out | 30 yr |
Illustrative ranges for well structured transactions, not an offer or a commitment to lend. Business purpose loans only.
Commercial financing in Houston
Everything above is our own money on residential and small balance property. For stabilized and income producing commercial real estate in Houston, apartments over five units, retail centers, office, industrial and flex, self storage, hotels and owner occupied buildings, we act as a broker and shop the file nationally. That side of the business works in all 50 states. See commercial real estate loans, or go straight to multifamily or SBA 504 and 7(a).
Lending in Houston
Do you lend in a Houston flood zone?
Yes, and we underwrite it carefully. Flood zone designation affects insurance cost, which affects the DSCR on a rental exit and the carry on a flip. We want the current FEMA map designation, an elevation certificate where one exists, and a real flood insurance quote rather than an estimate. Properties that flooded in a named storm need documentation of the repair, permits included. A property in a floodway, as opposed to a flood plain, is a much harder conversation and sometimes a decline.
Houston has no zoning. Does that change anything?
It changes what you have to check. There is no zoning, but there are deed restrictions, and they are enforceable. A plan to split a lot, build townhomes or add a second unit can be stopped by a subdivision’s restrictions even though the city would permit it. On a construction or teardown file we want to see the restrictions for the subdivision, and on a plat change we want the plat. This is the single most common reason a Houston construction deal stalls.
What about MUD districts and property taxes?
A MUD district adds to the tax rate, sometimes substantially, and that hits both a flip’s carry and a rental’s coverage ratio. We underwrite taxes at the rate that will apply after your purchase, not the rate the seller pays today, because Harris County will reassess. Investors are regularly surprised by that reassessment on a property bought well under market. Build it into your model before you write the offer.
Do you finance townhome infill in the Heights and Garden Oaks?
Yes. Teardown and replat to two or three units is one of the most common construction files we see in the near north side. What we want: permits issued or clearly ready, stamped plans, a general contractor with completed Houston projects, a line item budget, and comparable sales for the finished product on the same street pattern rather than four miles away. Demolition and abatement costs belong in the budget, not in a surprise change order.
How long does a Houston permit take?
Long enough that we underwrite it as a schedule item. City of Houston residential permits can move quickly, and they can also sit. Outside the city limits you are dealing with the county and, in some subdivisions, an architectural control committee as well. We do not fund entitlement or permitting risk on a construction loan. Permits should be issued or demonstrably ready before we close, and if you are earlier than that, a bridge loan on the land is usually the right first step.
What does foundation work do to a deal?
Houston clay moves, and foundation repair is a normal line item rather than a red flag. What matters is that it is in the budget at a real number with a transferable warranty from an established company, and that the appraiser is told about it. A budget that ignores an obviously unlevel structure gets adjusted upward in underwriting, which changes your cash to close. Better to price it correctly at the offer.
Every deal gets a real answer
Tell us the property, the plan and the number you need. A credit officer reads it and tells you what it will support.
- Texas hard money. A term sheet from the people who fund the loan.
- Commercial, all 50 states. Quotes from the desks that cover your asset.
- Outside the box? A straight reason, and usually a name that does fund it.