You’ve found the perfect property in Dallas. The numbers look good on paper. You’re ready to jump into your first fix and flip project. But here’s what we see every week: new investors making avoidable financing mistakes that cost them time, money, or worse, their entire deal.
At HiFi Hard Money, we’ve funded thousands of projects across major markets in Texas since 2015. We’ve seen what works and what doesn’t. Most “first-time” financing mistakes aren’t about the property itself. They’re about how investors approach the loan process, what they expect, and what they overlook before signing.
Let’s walk through the most common mistakes we see with first flip financing in Texas, and more importantly, how you can avoid them.
Getting Your First Flip Financed the Right Way
We’re going to break down nine specific mistakes we see repeatedly with “first-time” flip financing in Texas, and show you exactly how to handle each one. These aren’t theories. They’re real issues that cost real money on real deals. Some can be fixed with better planning. Others require choosing the right lender from the start. Either way, knowing what to watch for before you sign anything puts you miles ahead of most new investors.
Mistake 1: Waiting Until You Find a Property to Talk to a Lender
Many investors spend weeks finding the perfect flip, negotiating the price, and getting the property under contract. Then they start looking for financing. By that point, you’re racing against your contract deadline and making rushed decisions.
We recommend talking to a lender before you ever make an offer. When you reach out to us early, we can walk you through what we look at, how our draw process works, and what closing timeline you can count on. That way, when you find a property, you already know if it fits our loan parameters and exactly how fast we can close. For new investors working with HiFi, we typically quote one full week, or 5 business days, to close. That’s critical information to have when you’re writing an offer.
Mistake 2: Assuming All Hard Money Lenders Work the Same Way
Not all fix and flip loans are created equal. Some lenders pile on administrative fees, underwriting charges, and other costs that aren’t transparent until you’re deep into the process. Others advertise low rates but require significant cash down or restrict how you access rehab funds.
We’re completely transparent about our costs. The appraisal cost is what we pay. Doc prep is what we pay. We don’t charge administrative or underwriting fees. And here’s what sets us apart for “first-time” flippers: we defer points, “third-party” fees, your first month’s prorated interest, wire fees, inspection fees, and extension fees until you sell the property. That means you’re bringing far less cash to closing, which is huge when you’re getting started and managing multiple expenses.
Mistake 3: Targeting the Wrong Property Types
This one trips up a lot of new investors in Texas. You find a great condo deal in Austin or a small multifamily property that seems perfect. But not every lender finances every property type, especially in today’s environment.
We focus on single family homes across major markets in Texas, including Dallas Fort Worth, San Antonio, Austin, and Houston. We could consider a small multifamily, but it’s highly unlikely right now. Condos aren’t something we finance. Knowing this upfront saves you from wasting time on deals that won’t get funded. Before you get serious about any property, confirm with your lender that they actually finance that type of project in that location.
Mistake 4: Underestimating How Much Skin You Need in the Game
Here’s a common scenario: an investor finds a property, calculates the purchase price and rehab budget, then assumes they can borrow 100% of everything. When they find out they need to bring money to closing, the deal falls apart.
We determine your loan amount using two calculations, and we lend the lesser of the two. First, we can lend up to 90% of the purchase price plus 100% of the renovation budget. Second, we cap the loan at 75% of the After Repaired Value (ARV).
You are responsible for covering any gap between our loan amount and your total project cost. Because we defer fees and interest, your upfront cash requirement is typically lower than with most lenders. However, you will still need capital. Make sure to calculate this before going under contract, not after.
Mistake 5: Ignoring the Draw Process
Your rehab doesn’t happen all at once. Neither does your access to rehab funds. Some investors don’t understand how construction draws work until they’re mid project and need money for materials.
Our draw process is simple and fast. We do one physical inspection around 40 to 50% completion. Otherwise, photos and videos work just fine. Turnaround is typically same day or next day. The inspection fee is $200 and wire fees are $35, both deferred until you sell. But you need to know this process exists. Plan your construction timeline and cash flow around it. Don’t assume all your rehab money is available on day one.
Mistake 6: Overlooking External Factors That Kill Value
New investors focus intensely on the rehab itself: finishes, layout, curb appeal. That’s important. But there are external factors that impact property value no matter how beautiful your renovation is.
School boundaries matter. A lot. Home values in Texas can vary by up to 20% depending on the school district. Check resources like SchoolDigger.com before you buy. Busy routes like highways, airports, or railroads create noise and reduce desirability. Adjacencies to power lines, commercial zones, or flood zones hurt value. These aren’t things you can fix with a great kitchen. Make sure you’re evaluating the property’s location as carefully as the property itself.
Mistake 7: Taking Advice From the Wrong People
Wholesalers and brokers often mean well. But their incentives are tied to closing the deal, not to your long term success as an investor. They’ll emphasize optimism, sometimes at the expense of realistic projections.
We’ve seen thousands of projects. Some turned huge profits. Others barely broke even or lost money. When you work with us, we share honest feedback based on what we’ve seen. If something feels off about a deal, we’ll tell you. Our success is tied to yours. If you succeed and come back for your next project, we both win. We’d rather lose one deal than see you lose money on a bad flip.
Mistake 8: Forgetting About the Timing Game
Flips don’t generate income while you’re holding them. Every day you own the property costs you money: loan interest, utilities, insurance, taxes. The longer the project takes, the thinner your margin gets.
Buy and sell strategies only work if you close before your breakeven point. Delays can turn a profitable project into a loss. That’s why coordination with your contractor, your lender, and your listing agent matters so much. We provide quick project analysis, preliminary loan offers even during off hours, and most clients have direct cell access to our team for rapid communication. Speed isn’t just a nice feature. It’s the difference between profit and loss.
Mistake 9: Not Understanding Closing Costs and Tax Issues
Buyers should expect standard closings costs from any title agency, including escrow fees for the title agencies services, title policy premiums, and document and recording costs. And property taxesmust be allocated at closing, which could mean a prorated cost to the buyer to pay the outstanding tax bill. We can help estimate all of these costs so that you’re fully aware of the actual expenses at closing.
What to Do Instead
Financing your first flip in Texas doesn’t have to be complicated. Here’s what we recommend:
Talk to us before you find a property. Understand what we look for, how fast we close, and what your cash requirement will be. We can typically close in 5 business days. That’s a huge advantage in competitive markets across Dallas, Austin, San Antonio, and Houston.
Focus on single family homes in strong school districts across major Texas markets. Avoid external factors that kill value. Run realistic numbers that account for holding costs and don’t rely solely on optimistic projections from people whose incentive is just to close the deal.
Use a lender that’s transparent about costs and defers fees to minimize your upfront capital needs. We don’t charge administrative or underwriting fees. Everything from points to inspection costs gets deferred until you sell.
Plan your project timeline carefully and understand the draw process before construction starts. Our same day or next day turnaround keeps your project moving, but you need to know when and how to request funds.
Let’s Talk About Your First Texas Flip
We’ve been helping investors finance, fix and flip projects across Texas since 2015. Our team has seen almost every scenario, every mistake, and every success story. We know what works in Dallas, Austin, San Antonio, and Houston.
If you’re ready to finance your first flip the right way, let’s talk. We’ll give you honest feedback on your project, explain exactly how our loan works, and help you avoid the costly mistakes that trip up new investors. You can reach us at (972) 630-6676 or email info@hifihardmoney.com.
Ready to get started? Apply now. It’s fast, easy, and you’ll have a real person reviewing your project, not an algorithm.
FAQs
What property types does HiFi Hard Money finance in Texas?
We focus on single family homes across major markets in Texas, including Dallas Fort Worth, San Antonio, Austin, and Houston. We could consider small multifamily properties, but it’s highly unlikely in the current environment. We don’t finance condos. All properties must be non owner occupied investment properties.
How fast can HiFi close a fix and flip loan for a “first-time” borrower?
For new investors working with HiFi for the first time, we typically quote one full week, or 5 business days, to close. That speed gives you a major advantage when competing for properties in Texas markets.
What upfront costs should I expect with a HiFi fix and flip loan?
We defer points, “third-party” fees like appraisals and loan docs, your first month’s prorated interest, wire fees, inspection fees, and extension fees until you sell the property. This minimizes your upfront cash requirement significantly. We’re transparent about costs: appraisal is charged at what we pay, doc prep is what we pay, and we don’t add administrative or underwriting fees.
How much of my project cost will HiFi finance?
HiFi Finance determines loan amounts using two calculations and lends the lesser of the two: (1) 90% of the purchase price plus 100% of renovation costs, or (2) 75% of the After Repaired Value (ARV). Borrowers must provide cash to cover any difference between the approved loan amount and the total project cost.
