Flipping in Lubbock & Amarillo, Texas

18 Replies

Hey there!

My name is Tyler and I live in eastern New Mexico. I've been purchasing buy & hold properties in Oklahoma City over the course of the last year, but am considering transitioning towards flipping in Amarillo and/or Lubbock in order to create some short term cash flow. 

Is there anyone in the BP community who has experience flipping in these markets? Lastly, are there any REIA meet-ups that occur regularly?

Thanks for the help!

What price range do you work in?

I know two wholesalers that aren't really active here, but do a little flipping as one of many exits. They mostly wholesale and even keep some as rentals. Mitchell Property Group and Amarillo Welcome Homes. You can find them on Google. They focus in the 60-100k market for retail flips, but often wholesale them before they finish the rehab. 

An amazing person from AMA that was on Bigger Pockets, Ryan Webber, passed away too young. He was a amazing person, experienced investor in all types of exits, and organized the investing club. From what i understand it isn't very active at the moment. Im looking to go to the Apartment Associate meeting run my Karla Ross soon. I think there are a few people that do stuff outside multifamily there... or at least people that do both. 

I find it hard to make numbers work to flip most deals in this market. It seems like finding deals with enough margin left to flip leaves the numbers too tight for me to flip, but still good to hold. Most people I know will just wholesale to buy and hold investors... making a little less, but doing it faster and not paying commissions.  

May be the margins are tight because its a little competitive at the moment in town. Its a very blue color mentality here. With interest rates low and the blue color mindset of being okay to get ur hands dirty, leaves lots chasing real estate at the moment. 

I have chosen to buy and hold as a main strategy. Doesn't mean you can't flip, just the opportunity to do it is low. I did one simi-flip last summer because I found an amazing deal and was low on capital to hold it. It was with a investor buddy of mine that has way more capitol than me. I bought it with the sale to him verbally agreed upon at the start. It was one of those deals that doesn't come around daily. Would have be nice to keep it, but it was also nice to make some money and move on to the next deal. 

Hope this helps. Would be glad to hear more about what you are up to and see if there might be a way to continue to future each others pursuits. 

good luck. 

@Blake C.  thanks for all the information! Truly helpful, I appreciate it. The buy & holds that I've purchased are in the 50k-75k range in Oklahoma City. 

I'll be sure to look those companies up, thanks.

So sorry to hear about Ryan Webber, from everything that I've read he seemed like an amazing individual.

In your opinion, would you expect the margins to be tight regardless of whether or not I go through a wholesaler to find a property? i.e. Would the margins still be tight if I found the property on my own, or through a foreclosure auction? 

Thanks again for all the advice.

@Tyler Flagg  

Although I live in Austin, I have flipped a dozen or so over the last few years up that way from the outlying area of Lubbock to Muleshoe.  Typically, marketing takes a little longer than some other area but if you are spot on on your numbers money can be made

I haven't bought from foreclosure auctions. Clearly if you go through a wholesaler your margin gets tighter because everyone has to "get their cut." Ive bought from a wholesaler once and it was a good deal. The best deals were ones I found on my own, off MLS, non-auction, through word of mouth.

The problem is, without significant marketing, its challenging for me to get killer deals more than once a year or so. For you, I have a hard time seeing that happening without boots on the ground locally and building connections daily. I don't mean to discourage you, but thats my 2 cents on the how to.  It can happen, but unless you are trying to take the on full-time, I haven't found a strategy worth the marketing $$ or time. Clearly you have made it happen in OKC, so why not here? May be the same strategy will work. 

The guys I know finding deals in number are spending 20-40k a year marketing for those deals. There is more than one of those dudes out there and thats probably driving lots of local competition (but I imagine this is true in OKC too). Thats leading to a good number of deals for them, but I don't see a middle ground. Im sure it can be done, but I don't see it. 

Therefore I'm doing what Im doing... connecting with the wholesalers, keeping word of mouth rolling, and holding investments as rentals since I don't have to have as big of margin as a flip. Time is on my side this way too. 

How did you make it work in OKC? What kind of volume are you talking?

@Greg H.  thanks a lot, that's definitely reassuring. 

@Blake C.  thanks again! I'm going to send you a PM with a quick question. 

Hey Tyler,

I realize you're looking to branch into some Texas markets however, since you're living in New Mexico, know that Montano Properties works out of New Mexico wholesaling property. We occasionally do deals in surrounding areas such as Texas. If you would like to be added to the buyers list just send me your email address and I can make sure we let you know of any deals we get going in Texas, or even New Mexico as well if you would be interested.

I'm know nothing about lubbock, Amarillo on the other hand is a super hot market at the moment.

The problem being out of  own (I once was, and ended up moving here) is the town is so hit or miss. There's brand new desirable golf course homes minutes away from "war zones" there is neighborhoods that are super hot next to ones that take forever to sell. Even the block in the neighborhood can play a major role in the sale. Comps can be all over the place, we have old middle to lower class neighborhoods selling at the same price per sqft as new builds, Stuff that doesnt make sense to people who don't know the town, and well, (and still doesn't make sense even to people who do know the town!) their is practically a whole quarter of the town where its very hard to retail a home, your pretty much just going to be selling to buy and hold investors, and our local buildings inspectors are rediculous, then on top of all that, as mentioned above there is 4 big wholesalers in this market, two that were mentioned above, then two that dont really advertise their deals, all of which are very experienced and seem to have unlimited marketing budgets..

Anythings possible, but not being in this market is going to be a huge disadvantage, as the margins are just too slim..

Add all that to tons of newbie investors who over pay for every "Internet auction" "hud" and "tax sale" "craigslist" type deals ever, makes it a hard market to be repeatedly successful in.. 

95% of the deals I look at, Shawn or Wade (the two guys companies mentioned above) have already looked at them, are at the property when I am, or are on their way) they're advertising is top notch and they don't miss much., a lot of times it ends up being easier buying from them, as your time is worth something and when your getting 1/10th the leads they are, and they're getting all the leads you do, it's hard to compete. I have bought dozens off the same investor Blake purchased from..

What price range/type of deal are you looking for?

@Account Closed  I appreciate the no bull advice. Now that I've heard essentially the same report from a few people, it seems like it might be my best option to steer clear at the moment and concentrate on Lubbock instead. As for the price range, I've got some private money available that I could easily do some flips in the 50k-100k range. I might be able to go slightly higher end, but being that this is my first go-around when it comes to flipping, I don't want to push it. Thanks again for shooting straight with me. 

@Tyler Flagg @Scott R. @Blake C. @Greg H. @Joe Fairless @Kyle Wilkison My name is Jeff Smith, I am from Lubbock and I am the President of the Lubbock REIA. Get connected with us at LubbockREIA.com and find Lubbock REIA on facebook. I am also doing deals in the Amarillo, Midland and Odessa markets as well. I wholesale property in all these cities and have a good reputation for bringing solid deals with lots of profit potentials to my cash buyers. I also fix and flip, and other creative real estate solutions. I'd be happy to add any of you to my email list. We also like to partner with private money lenders if your interested in great ROI's. #JoeFairless I love your podcast man!

Originally posted by @Jeff Smith :

@Tyler Flagg @Scott R. @Blake C. @Greg H. @Joe Fairless @Kyle Wilkison My name is Jeff Smith, I am from Lubbock and I am the President of the Lubbock REIA. Get connected with us at LubbockREIA.com and find Lubbock REIA on facebook. I am also doing deals in the Amarillo, Midland and Odessa markets as well. I wholesale property in all these cities and have a good reputation for bringing solid deals with lots of profit potentials to my cash buyers. I also fix and flip, and other creative real estate solutions. I'd be happy to add any of you to my email list. We also like to partner with private money lenders if your interested in great ROI's. #JoeFairless I love your podcast man!

Hi Jeff,

My name is Robert. Moved to Lubbock from San Diego a year ago. I got an offer I couldn't pass up: a great job with Tech and a full scholarship to complete my doctorate in Ed Leadership. I've been investing in RE for about 15 years off and on. Did great in the boom, got crushed in the bust, and now working my way back up. Recently have focused more of my attention and resources towards buying. Bought an SFR and a Duplex a couple months ago and entering escrow on three SFR's now. I am in the market for a multi family with good cash flow $1.5 mil top end (owner carryback 10-20% preferred) and fix and flip. Very much interested in developing partnerships. Actually would love a partner/mentor here in town. I'm by no means a seasoned investor but also do not consider myself a novice either.

Hi Robert, 

I'm glad to know you. Quite a bit of a culture shock from San Diego huh? I'm originally from Fresno myself. 

Lets get you connected with the Lubbock REIA members. If you havent already visit or site and sign up. I'll also add you to my buyers list.

Fresno Buldogs!! 

Will do Jeff.

Thanks 

what a great thread here! I m from San Diego myself too @Robert Bleisch ! I have a friend who has a rental property at Lubbock and to her it seems like a great place. I m looking to buy my first rental property and I m considering Lubbock. Not sure if the market is too hot now. What are the areas should I look into that's ideal for rental if you don't mind sharing ? The price range I m looking for is around 100k.

@Jeff Smith , please add me to your buyer list too. 

Thank you

that's very cool that your from SD Stephanie. We love it in Lubbock. The market is hot in Lubbock but hot in Lubbock means maybe 5% appreciation. Personally, rather than looking for appreciation I look for distressed properties that can be fixed up and rented. For me, North Lubbock is a good area. I'm also now starting to venture to East Lubbock. However, if I were you I'd be looking for deals between 19th and 34 and University and Q. Not sure what this particular neighborhood is called but it's adjacent to Tech Terrace (where prices are much higher) and close to the university. Hope this helps 

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