Finally one can now buy homes in Austin at a price low enough to renovate and flip - some even show up in the Multiple Listing Data Base (MLS). These homes are not for amateurs trying to flip on a shoestring budget. The homes that are being flipped were built in the 50's & 60's in central Austin, usually have significant foundation problems, are priced "as is" in the 250-350K price range and need 80-100K of major of renovation work. These homes are in bad enough condition that traditional mortgage lenders won't loan money on them until after they are renovated. The contractors who are buying them are using "hard money" lenders who charge interest rates ~ 15% so speed of renovation is very important.
The good news for retail buyers is that a many of these contractors are highly skilled and take great pride in the quality of their design and workmanship. If you are an end user Buyer looking for a central Austin home, make sure you use an experienced REALTOR to help you evaluate the homes that you look at. Find an area that you like and get to know the contractors working in that area. The really skilled contractors usually have multiple offers within in hours of putting the renovated house on the market.
"Are the owners willing to rent to me until my credit is repaired?" The short answer is "No, not in this market." This question comes up all the time. The Austin area market is "Hot". Why would an owner who wants to sell, tie up their property in a rent to own deal? My suggestion is to get with a REALTOR and a patient mortgage lender who can guide you in cleaning up your credit. In most cases, the mortgage lender can give you a realistic estimate of how long it will take to get you in a position to buy. This information will help you to decide if you want to stay put and buy in X number of months or find a rental until you do qualify. Call me if you need more help or a referral to a good mortgage lender.