Fix and Flip in Waco

List in spring, and price to a market that has fallen four years running. The Waco MSA's median list price was $308,030 in July 2026, down from $319,000 a year earlier and 12.0% off the July 2022 peak of $350,000, the fourth straight July-over-July decline. Entry basis is the other half of the math: the city of Waco's mid-tier home value was $200,115 in June 2026 against $259,951 for the metro overall, so a full rehab is fundable at a price point where a Dallas or Austin deal will not start. Timing matters more here than in the big Texas metros. Median days on market ran 70 in July 2026, but the swing through the year is severe: 65 days in May and June against 123 in February. Build the rehab schedule so the house lists in spring, or budget the carry to hold it through a slow winter.

It applies once your renovation budget crosses a set percentage of the building's appraised value, and the thresholds move with price. Under Waco Code section 28-832, a "substantial renovation" is renovation cost equal to 30% of appraised building value on buildings worth more than $200,000, 40% on buildings worth $100,000 to $200,000, and 50% on buildings under $100,000. Cross that line and the property must also comply with the overlay: one parking space per bedroom, a ten-foot pedestrian way along the street, four-foot landscape screening next to conforming single-family homes, and architectural review. Roof repair or replacement, HVAC work, electrical and plumbing repair, foundation stabilization, masonry repair, rotten-wood replacement, and window and door repair that doesn't change the building's look are all excluded from the ratio, so a heavy but code-driven rehab can often stay under it. On a $120,000 house, $48,000 of countable work is enough to trigger it, which is a routine budget for a rent-by-the-bedroom conversion. The city keeps the CU zone map on file rather than published online, so before you write a rehab budget on a Baylor-adjacent property, confirm both the appraised building value and the property's CU zone with the city.

About 2.25% of value a year inside Waco city limits, and it's headed up, not down. The 2025 adopted rate stack for the city was 2.248379 per $100: McLennan County 0.334805, McLennan Community College 0.131974, City of Waco 0.755000, and Waco ISD 1.026600. Investment property gets no homestead exemption, so the full appraised value carries tax from day one. The county proposed a 6-cent increase for tax year 2026, to 0.394805, an 18% jump over the adopted 2025 county rate, citing sheriff, jail, and salary costs, so don't underwrite a flat tax line on a longer hold. City limits and school district aren't the same boundary here either. Confirm the actual ISD on the parcel's McLennan CAD account before you finalize carry.

Budget for a bad year, not an average one. McLennan County paid out $58.2 million in homeowners losses across 47,827 policies in 2025, or $1,216 per policy, with wind and hail at 53% of that total. In 2023, a heavier hail year, paid losses hit $120.6 million, or $2,575 per policy, with wind and hail alone at $1,986 per policy, more than double the 2025 figure. Set your roof and deductible assumptions to a 2023-shaped year rather than a 2025-shaped one. McLennan County is roughly 180 miles from the Gulf and outside the TWIA coastal wind pool, so there's no windstorm-association layer here, as of mid-2026 (data date 2026-08-13); the real underwriting question is roof age and hail deductible, not hurricane exposure.

No, not for a standard long-term rental. Waco's own zoning definition of "family" in Code of Ordinances section 28-1 covers "a group of unrelated persons living together as a single housekeeping unit," with no number attached, so by-the-bedroom leasing near Baylor isn't fighting a four-person cap the way it once did in some other Texas university towns. The only caps that exist: a small-lot single-family dwelling, under 50 feet wide and under 6,000 square feet, is limited to two unrelated occupants, and short-term rentals in the lowest-density zoning districts are capped at four unrelated occupants. For a standard long-term hold, Waco's own zoning code already answers the question. See our fix and flip loan terms if you're weighing a flip-to-rental exit.

Only if you check zoning before you buy: the classic non-owner-occupied Airbnb is not allowed in most of Waco's single-family neighborhoods. STR Type II, a non-owner-occupied single-family or duplex short-term rental, is flatly "Not Allowed" in the R-E, R-1A, R-1B and R-1C zoning districts, and the city removed the special-permit path for it effective June 15, 2021. It's permitted by right only in higher-density districts like R-2 through R-3E, the O districts, and C-4. And a license doesn't transfer with the sale: the city says on its own page that a new owner must qualify the property fresh, even if the current owner holds a valid license. If your flip's exit plan depends on short-term rental income, confirm the specific parcel's zoning district before you close, not after.

About 10% of the purchase, plus closing costs and carry. We fund up to 90% of the purchase price and up to 100% of the rehab budget, capped to ARV, on a 6-month interest-only term. On a $200,000 Waco purchase that is up to $180,000 from us and $20,000 from you (200,000 x 90% = 180,000), with rehab drawn against the schedule instead of paid up front. The city of Waco's mid-tier home value was $200,115 in June 2026, so that is close to a real entry basis here. Add the tax carry at about 2.25% of value a year, since an investment property gets no homestead exemption. Subject to underwriting.

Yes, and with the rehab funded on top it clears it easily. Fix and flip loans run $100,000 to $5,000,000. Most Waco deals clear that floor without trouble: the city's mid-tier home value was $200,115 in June 2026 and the metro overall ran $259,951. Remember the loan amount is purchase plus the rehab we're funding, not the purchase alone, so a low-cost house with a real budget behind it often clears the floor when the purchase price on its own would not. The ceiling is rarely the binding number in this market. Subject to underwriting.

Yes, and that swing is the part of a first file we look at hardest. We run credit, but on an asset-based loan like a fix and flip it carries far less weight than it would at a bank, and there is no minimum score. Weaker credit usually means lower leverage rather than a decline, and there is no hard credit pull to start. On a first deal the exit gets the hardest look. Waco's selling window swings hard, with median days on market at 65 in May and June against 123 in February, so build a schedule that lists in spring or budget the carry to hold through a slow winter. Subject to underwriting.