He kept in touch with local contractors, and one tipped him off about a homeowner who ran out of funds mid-renovation.

After we drafted a bare-bones plan that considered their timeline, target rents, and capital reserves, they honed in on a medium-sized complex managed by a local group.. from what I’ve heard, these guys had impressed other out-of-state buyers before and delivered on their promises.

Try some local real estate meetup groups in Houston.  

Some lenders charge 5% released upon C/O, others release once that particular line item is approved by local inspection agency.

I have looked around online, but haven't had any luck yet, i have local real estate agent there, but they are not expertised on those distressed properties.  

Drawing from your industry expertise, what would you consider the average success rate for Fix-and-Flip investments, and which localities offer the most potential?

FF is a great tool, but you can also look up local corporate leasing companies, as well as, insurance companies/agents to work with for individuals who are going through home insurance claims.  

We even got their name, as one of three, from the local distributor of the product.  

The nat'l trends are definitely not relevant, local is all that matters.

From my experience, attending local meetups, lending-specific events, and networking with experienced investors can open doors.