For those looking to make money in the housing market, Grayson County’s relative abundance of properties and low purchase prices make it a financially-attractive place for many to do business flipping old houses, building new homes or making a property rental ready. But Briscoe Homes owner and founder Justin Briscoe says every approach comes with its own costs and considerations.
“It’s insane right now,” Briscoe says of Grayson County’s housing market. “We’re seeing a lot people coming in from the DFW Metroplex because they see the opportunities. They’re seeing these houses they can buy for between $50,000 and $80,000, and there just aren’t options like that in other places. It’s the hottest market I’ve seen since we started this thing in 2010.”
Briscoe, along with his wife and business partner Ashley, has flipped, built or sold more than 100 properties in the Denison area since founding their business eight years ago. He says investors make their money when they buy a home, making the first considerations the purchase price and how the property will be used.
“We’ve bought properties for as little as $500, and we’ve spent more than $100,000 on a property,” says Briscoe. “How much you’re willing to spend really depends on how good an opportunity it is, how you intend to use the property and what you expect your profit margin to be.”
The home builder says he generally pays cash for cheaper properties, but will reach out to local banks for loans on pricier properties or projects. But the sale price and the intended improvements are only some of the costs. Briscoe says investors and buyers should make sure the property has good bones first, which goes a long way to cutting expenditures, but should also be aware of hidden and unexpected costs.
“There are things that are hard to see, like termite damage, or you don’t initially know will happen, like when the city comes in and tells you that there are certain things they want brought up to code,” says Briscoe. “Those are often some of the costs that are surprising and people don’t anticipate when they’re formulating their budget and considering expenses.”
In older homes, Briscoe says he likes to invest in the unique features that are already present, like shiplap siding, original wood floors and old brick. For newer homes, Briscoe says funneling funds for bathroom and kitchen upgrades is usually a wise way to boost a home’s overall appeal and value.
Investment returns and the time frame in which buyers can expect to see them vary by project and how the property is paid for. Briscoe says return on a flipped home can generally be had within six months, assuming the remodel isn’t too extensive. For rentals, Briscoe says loans of $10,000 or less can generally be made back within a year on rental properties, but it may be between three and eight years before monthly rent recoups the the total investment.
“When we do new construction, we’re building homes in the $60,000-$70,000 range and those are properties that can potentially sell for up to $120,000,” Briscoe says. “For return on investment, from a rental perspective, we try to land in the 18-20 percent range. On the flip, if we can make a minimum of $30,000 or $40,000 it’s worth taking on the risk for us.”
But like all investments, building, flipping and renovating come with their own risks. Even though a buyer may have a grand vision for his or her property, some homes simply end up becoming money pits and owners have to know when to walk away.
“Unfortunately it does happen to some people,” says Briscoe. “If that’s the case, you’ve just got try and get it to a point where you can sell it.”
Briscoe says the housing market has enjoyed a period of great growth in recent years, especially in Grayson County. But he cautions investors and buyers to be aware the markets move in cycles and while they might be riding high today, change could come as soon tomorrow.
“Try not to buy over your head, stay somewhat conservative in your estimations and really spend your time trying to find the right property,” says Briscoe.