We broker from East Texas, and Texas is the market we know best. Here is the number that decides most Texas deals, what each of the four big metros is actually doing in 2026, and the terms we can place against them.
Texas has no state income tax. It funds itself on property instead, at a statewide effective rate near 1.40 percent — among the highest in the country — with school district levies swinging it hard from one county to the next. The trade is real, but it is a trade, and the bill arrives monthly rather than in April.
Put real numbers on it. A $400,000 rental at 1.40 percent is $5,600 a year, which is $467 a month before you have paid a cent of insurance. The same house in a state at 0.6 percent costs $200. That $267 monthly difference is the entire margin on a lot of otherwise decent single-family deals.
On a DSCR loan it lands directly inside the ratio. Taxes are in the PITIA, so a Texas property needs meaningfully higher rent than an identical property elsewhere to reach the same coverage. Investors who model a Texas rental on national rules of thumb come up short, and they usually find out at underwriting rather than at the offer.
Two things follow. Underwrite the tax at the reassessed value, not the seller's current bill — a long-held property is often assessed far below what you are about to pay for it, and your first bill will not look like theirs. And protest annually; the appraisal district process is routine, free to file, and one of the few operating costs you can actually argue down.
Insurance is the second squeeze, and it is getting worse rather than better. Hail on the North Texas corridor, hurricane exposure on the coast and the lingering effect of the 2021 freeze have pushed premiums up statewide. Quote it before you close.
Statewide prices have declined for roughly ten consecutive months and inventory sits near balanced levels. Homes are averaging around eighty days to sell. The Texas Real Estate Research Center at Texas A&M forecasts 2026 sales up 2.5 percent to about 349,000 units with a year-end median near $334,000, a modest gain of 1.3 percent.
For an investor, softness on acquisition is the opportunity and softness on exit is the risk, and they arrive together. Two consequences worth building into the deal.
Your holding period is longer than it was. An eighty-day average market means a flip that pencils on a sixty-day sale is not pencilling. Add the extra months of interest, tax and insurance to the model before you offer, not after the listing goes stale.
Size the loan against cost, not just value. Our fix and flip and bridge terms go to 100 percent of cost with a 70 percent ceiling on value. Where comps are drifting down — and in DFW and Austin they are — the value ceiling is what binds, and the shortfall is cash you bring to closing. Model both caps before you write the offer.
Houston is the outlier among the big four, with prices up about 3.2 percent year over year while the rest drift down. It also carries the best entry-level acquisition costs and the most stable rental demand base in the state, on a job market spread across energy, healthcare, aerospace and the port. Gross yields run 6 to 8 percent. Katy pulls family renters, the Heights pulls young professionals. If the deal has to work on cash flow rather than appreciation, this is the first place to look.
Median sale price around $266,000, roughly half of Austin's and about 60 percent of Dallas. Days on market average 51 with a sale-to-list ratio of 97.8 percent, so quality stock still transacts close to asking. Gross yields of 7 to 9 percent are the best of the four. Vacancy is 6.5 percent, healthy. Demand comes from the military presence, USAA, Valero, HEB and the expanding north-side medical district, plus around 30,000 new residents in 2024 and steady value relocation from Austin and Dallas. Prices are off about 1.8 percent, the mildest correction of the four. The caution: the outer ring has real rental softness, so submarket analysis is not optional here.
DFW prices are down roughly 4.1 percent year over year, the steepest of the big four, while remaining the most active market in Texas by transaction volume. Corporate relocation and population growth keep the demand floor solid, and out-of-state investors keep arriving from higher-cost markets. Gross yields run 5 to 7 percent. The correction is the opportunity and the execution risk at the same time: you are buying into falling comps, so your ARV needs to be built on the last sixty days, not last spring.
Average home values have slipped about 3.6 percent to roughly $495,000, and prices are down 2.5 to 3.6 percent year over year. Gross yields of 4 to 6 percent are the weakest of the four, because purchase prices are high relative to achievable rents. Austin is a bet on the tech base and the long recovery, not a cash flow market. Underwrite accordingly, and be conservative on the exit.
The tax bill is real, but the operating environment is one of the most favourable in the country and it belongs in the same calculation.
No state income tax means the profit on a flip is yours at the federal level only. In a state taking five to nine percent, that difference lands straight in your return on cash.
The landlord framework is fast: three-day notices to vacate, eviction through the justice courts on a short timetable, no cap on security deposits, and rent control effectively banned by statute. For a DSCR borrower holding rentals, the speed of remedy is worth real money over a portfolio.
And the demand floor is demographic rather than cyclical. Texas adds population at around 1.6 percent a year, nation-leading, spread across four metros large enough that no single employer or sector carries the market.
Fix and flip and bridge from 10.99 percent with 1.99 points, up to 100 percent of cost and 70 percent of value, minimum loan $50,000, terms to twelve months, minimum credit score 600. Ground-up construction from 8.5 percent on non-owner-occupied single family, $100,000 to $3 million. DSCR rental loans from 5.99 percent, $75,000 to $2 million, up to 80 percent of value, no minimum credit score, cross-collateral allowed across two or more properties. Commercial to $5 million at up to 75 percent of value, covering multi-family, mixed use, self storage, office, retail and industrial.
Everything is non-owner-occupied, business purpose, held in an entity. There is also a rate match: bring a fully executed letter of intent from a competing lender, no contingencies, meeting the same underwriting, and the interest rate gets matched. That applies to the rate only and is not a commitment to fund.
A tax figure lifted from the seller's bill. The single most common modelling error in this state. Reassessment at your purchase price can add hundreds a month and turn a 1.25 ratio into a 1.05.
A sixty-day exit assumption. With the state averaging around eighty days, a flip modelled on a fast sale runs out of term. Budget the months.
An ARV from spring comps in a falling metro. In DFW and Austin especially, a stale comp set produces an appraisal gap, a smaller loan and a larger cash requirement at closing.
An insurance quote you guessed at. Hail, wind and freeze exposure move Texas premiums more than square footage does. Get it bound during due diligence.
A house you intend to live in. We cannot lend on a primary residence. That is federal law, not preference.
Yes, statewide. We are based in East Texas and broker deals throughout the state and nationally.
Days rather than the forty-five to sixty a bank takes. On a foreclosure auction or an off-market distressed buy, that speed is the whole advantage. The usual delay is title work, not the loan.
Texas auctions are the first Tuesday of the month, at the county courthouse, and they settle same-day in certified funds. That means the money has to be arranged before the sale, not after you win. Talk to us before the auction date, not on it.
San Antonio or Houston, on entry price and yield. Austin is the hardest place in Texas to make a first deal work on cash flow.
Answer these and we will tell you whether it is fundable, on what terms, and how fast it could close. Investment property only — we do not lend on a home you will live in.
We will run the numbers and come back to you. If it is time-sensitive, call 903-636-7511.
Dominion Hard Money arranges private and asset-based real estate financing for business purposes only. Not a commitment to lend. All loans subject to underwriting, property review, and approval. Terms vary by property, borrower experience, and exit strategy.
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