Texas makes it cheap to buy and expensive to hold. There is no transfer tax and no state income tax, but property taxes are high and investors get no homestead exemption. A large bridge loan has to be exited with that tax bill in mind.
In short: LendingStreet offers residential investor bridge loans from $1M to $5M+ on 1-8 unit Texas property, with rates from 7.99%, interest-only payments and closings in as little as 10 days on a complete file. Common uses are rental packages in San Antonio, Houston and DFW, Austin-area homes and small multifamily. Larger balances usually need a full valuation, and exits are a sale or a DSCR or jumbo DSCR refinance run on full, non-homestead taxes.
Texas has a large investor-owned rental market, and portfolio trades between investors are routine. A bridge loan lets the buyer close quickly on a package, then lease vacant homes and protest values before the long-term loan.
Dallas-Fort Worth and Houston produce the most volume: suburban rentals in Frisco, McKinney, Garland, Mesquite and Arlington, and in Katy, Cypress, Spring, Pearland and Baytown. San Antonio packages often include homes in Converse, Schertz, Live Oak and the far west side, close to the city's military bases.
Austin and its suburbs (Round Rock, Pflugerville, Georgetown, Kyle) have higher prices and newer homes, while El Paso, the Rio Grande Valley, Killeen-Temple and Lubbock offer lower entry prices where a seven-figure bridge covers many houses.
This example is illustrative and not a quote. An investor buys ten single-family rentals in Converse, Live Oak and the far west side for $2,500,000 from another investor. Taxes are budgeted at full value with no homestead exemption, and several homes carry HOA dues.
Assume a bridge loan of $1,875,000 (75% of the price). Because bridge payments are interest-only, the estimated monthly payment is about $15,625, or about $125,000 across the 8 months the investor expects to hold the loan before refinancing.
The exit appraisal comes in at $2,650,000, and the DSCR loan is sized at 70% LTV, or $1,855,000. That carries estimated principal and interest of about $12,654 a month. Taxes ($4,860), insurance ($1,500) and other costs ($300) bring the payment to about $19,314, and $20,250 of rent works out to DSCR of about 1.05x.
Taxes are almost a quarter of the payment, so the refinance is sized at 70% LTV to stay above 1.0x. The $1,855,000 DSCR loan is about $20,000 less than the $1,875,000 bridge, which the investor pays down at refinance.
| Item | Amount |
|---|---|
| Purchase price | $2,500,000 |
| Bridge loan (75% of price) | $1,875,000 |
| Estimated monthly interest-only payment | $15,625 |
| Interest carry over 8 months | $125,000 |
| Value at refinance | $2,650,000 |
| DSCR refinance at 70% LTV | $1,855,000 |
| Estimated principal and interest | $12,654 |
| Taxes, insurance and other monthly costs | $6,660 |
| Total monthly payment | $19,314 |
| Monthly rent | $20,250 |
| DSCR | 1.05x |
Short term, interest-only, rates from 7.99%, and closings in as little as 10 days: those basics hold at every size in our $150,000 to $5M+ bridge program. Above roughly $1M, two things get more attention in Texas: the valuation, which is usually a full appraisal on larger balances, and the exit, which has to be specific.
Larger balances are reviewed case by case, so the more complete the file, the faster the answer.
Because taxes take such a large share of the payment, Texas packages often refinance below the program's maximum leverage. A home that looks like a 1.15x DSCR on the seller's tax bill can drop near 1.0x at full value with no homestead exemption.
Texas's special rules for cash-out loans on homesteads do not apply to non-owner-occupied investment property, so a cash-out DSCR refinance at the end of the bridge follows the normal program limits.
Texas has no real estate transfer tax, and it is a non-disclosure state, so sale prices are not public and appraisals rely on MLS data. Closing costs are mainly title insurance, escrow and loan costs.
Property taxes are the main holding cost. A home can be taxed by the county, city, school district and special districts, including MUDs and PIDs in many newer suburbs. Investors do not get the homestead exemption or the homestead appraisal cap, so the bill after a purchase from an owner-occupant is often much higher. Appraisal districts send new values each spring, and owners can protest within the deadline on the notice.
Hail across North and Central Texas and hurricanes and flooding around Houston push insurance costs up, and many policies carry percentage wind and hail deductibles. Houston-area homes need a flood determination, and some sit in mapped flood zones.
Austin, Dallas, San Antonio and other cities regulate short-term rentals, and HOAs often ban them. Most large Texas bridge exits are long-term leases.
Our investor loans are business-purpose loans on non-owner-occupied property. The fastest large-balance files show the exit math up front: what the properties rent for, what they will be worth, and how the bridge gets repaid. Get a quote with the form below or at (877) 298-1001.
Expect the team to test the exit first. If the rents and values support a DSCR or jumbo DSCR refinance, or a sale makes sense, the bridge can be sized around that plan, and you will know what cash the Texas deal needs at closing and at refinance.
No. Texas does not charge a real estate transfer tax. Closing costs are mainly title, escrow and loan costs.
Investors do not get the homestead exemption or the homestead appraisal cap. The bill after purchase can be much higher than the seller's.
Yes. Owners can protest the appraisal district's value within the deadline on the notice, which can help the exit DSCR.
On balances above roughly $1M, expect a full valuation of every property securing the loan. Plan for it in your timeline.
No. Our investor loans are business-purpose loans on non-owner-occupied property, such as rentals and properties bought to renovate and sell.
Rates start from 7.99%, with interest-only payments. Final pricing on larger balances depends on the properties, leverage and exit plan.
No. Those rules apply to homesteads, not to non-owner-occupied investment property.
Only where the property can legally operate as an STR. City rules and HOAs often limit them, so most exits are long-term leases.
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