I don’t consider Killeen to be great for flippers and wholesellers. There are several headwinds that flippers face in the Killeen market.
Firstly, there is a lot of building in Killeen. A typical home in Killeen was was built in 2001. And builders are still going strong. Why buy a flip with a dated floor plan when you can get something brand new from a builder for $150,000? Not only that, but most of the homes are less than 15 years old, meaning there is not likely a lot of repair work and improvement needed that would allow an investor to scoop it up at a discount.
The other headwind is the buyer’s market. Killeen is technically in a neutral market with just under 6 months of inventory. But it still behaves as a buyer’s market. 6% Realtor commissions, 3% buyer concessions, owner’s title policy, survey and the first year of a home warranty are common seller concessions – 10% of an investor’s gross is gone right there.
Finally, the prevalence of the VA loan is a major obstacle. Home buyers in Killeen often start underwater, with negative equity. Many distressed homeowners in Killeen will only have been in their home a few years, and not enough equity to even sell traditionally with a Realtor and break even.
But that doesn’t mean there aren’t flippers active in Killeen and doing well. I know some personally (to find like-minded investors, try the Fort Hood Investor MeetUp at El Chico’s). I tried to come up with a way to identify the “best” neighborhoods to start your investor prospecting if you are looking for flipping and wholesale deals. I was looking for two things – equity and a decent ARV (After Repair Value). So I looked through the MLS for neighborhoods at least 20 years old with price points in the $120,000s+.
I came up with six neighborhoods to especially consider if you are preparing an investor prospecting campaign. Note that the price ranges include the full spectrum that homes sold for in the neighborhood in 2015 (i.e. including foreclosure sales).
Chantz
2015 Stats
| Price Range | Median Price | Median DOM | # Sold | # Foreclosures |
|---|---|---|---|---|
| $61,500 – $125,000 | $97,000 | 61 | 16 | 2 |
Adjacent Oak Valley and just off of Stan Schlueter Lp., Chantz features single story homes between 1400 and 2100 sq. ft. and built in the mid-1990s. This is a good turnover neighborhood that is also a good rental market.
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James Way
2015 Stats
| Price Range | Median Price | Median DOM | # Sold | # Foreclosures |
|---|---|---|---|---|
| $65,000 – $140,000 | $105,000 | 75 | 14 | 4 |
James Way is a small neighborhood on the south side of Stan Schlueter and above Trimmier Estates. It features single story homes between 1400 and 1800 sq. ft. built in the mid-’90s. Prices have been stable in the neighborhood, and it has slightly better turnover than some of the other neighborhoods on this list.
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Jasper Heights
2015 Stats
| Price Range | Median Price | Median DOM | # Sold | # Foreclosures |
|---|---|---|---|---|
| $155,000 – $200,000 | $189,500 | 65 | 3 | 0 |
This is a very low turnover neighborhood just north of Hwy 190 on Trimmier, featuring single family homes built in the ’70s between 1800-2800 sq. ft. and great size lots (0.3 – 0.5 acres). It is an established neighborhood with older residents. There is not a lot of sales activity, but a deal here has a lot of potential.
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Oak Valley
2015 Stats
| Price Range | Median Price | Median DOM | # Sold | # Foreclosures |
|---|---|---|---|---|
| $58,500 – $130,000 | $107,109 | 93 | 36 | 11 |
Oak Valley is immediately adjacent to Chantz, and also Hymesa Estates (a neighborhood that didn’t make this list but also has potential) on Killeen’s South-East side. Like Chantz, it features mostly single family homes built in the mid-1990s and approximately 1200 – 1800 sq. ft., and has a much higher turnover than some of the other neighborhoods on this list.
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Turtlebend
2015 Stats
| Price Range | Median Price | Median DOM | # Sold | # Foreclosures |
|---|---|---|---|---|
| $95,000 – $185,000 | $154,700 | 95 | 14 | 1 |
Turtlebend is a small, established neighborhood in the center of Killeen, adjacent to Ellison High School. It is older versus most of the Killeen market, with most homes built in in the 1980s. In spite of all the new subdivisions and builders to compete with, Turtlebend has maintained property values magnificently. It features larger single story homes between 1800 and 2800 sq. ft.
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Twin Creek
2015 Stats
| Price Range | Median Price | Median DOM | # Sold | # Foreclosures |
|---|---|---|---|---|
| $89,000 – $120,000 | $104,500 | 158 | 2 | 0 |
This is a very small community with low turnover on Killeen’s North-East side, featuring mostly single story homes with 1400 – 2100 sq. ft. and homes built in the mid-1980s. It might be a worthwhile stop if you are “driving for dollars” and find yourself on Twin Creek Dr.
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These are NOT a lot of homes to market to. And they tend to be neighborhoods with low turnover. But if you can get a deal in these neighborhoods, it is probably your best chance at having a “real” deal.
Not the greatest options? Next week, I will do the same analysis for Harker Heights, TX – probably the best community in the Fort Hood area for flippers.
I should note, there are flippers I know who are successful in communities with lower price points than these, who look to acquire properties in the $30,000-$40,000 with ARVs around $100,000. I don’t recommend limiting yourself to these few neighborhoods. These are just ideas!
If you are a Killeen investor looking for an investor friendly agent, please reach out to me at (512) 763-7912 or brian@starpointerealty.com.
Questions, ideas, feedback or experiences flipping in Killeen? Please share in the comments!