Net Income After Property Management: $25,000 (that is being generous)

Estimated Insurance: -$25,000 Estimated Taxes: -$13,000 Principle + Interest (20% Down, 7.5%) -$133,000

Net Annual Cashflow: -$146,000

Oh boy, where do I sign up? Notice that even if you paid CASH, the property would not have a positive cashflow, especially if you factored in maintenance. Sadly, we literally saw hundred’s of for sale signs on the Cape. I wish them luck in trying to sell because I don’t believe there will be many buyers for those fundamentals for a long time.

Marble Falls, Texas (Note: This article was intended to be before our property release but had to be delayed)

Like the resort market above, many of you have probably never heard of Marble Falls, Texas which is located about 45 minutes west of Austin, Texas. The major attraction to the area is that the Colorado river is damned into LBJ lake that then allows very nice lake homes to be built on its shores. In addition, there is a tremendous amount of golf (5 courses) in the area with a total permanent population of around 5,000. After driving through hot Texas for hours, this location was truly an oasis.

Even more interesting to me is the tremendous growth that is going on in employment, population, press popularity, etc in the area. In fact, Money magazine just ranked Austin #2 in best places to live and the area always ranks very high on job growth since Texas is still very aggressive in corporate relocations. Huge companies are moving to the area on a regular basis due to low land costs and a very favorable tax situation.

When you look inside Marble Hills, it really is just a tiny town that for the most part, services and survives off of the resort area. Like many resort locations, a lot of employment gets created however it is not high paying; if you look at most resort locations that have experienced growth, lower end property has become in extreme demand for affordable housing for workers. Given the growth of the surrounding area, the high dollar value of the resort type homes, and the lack of many true resorts in Texas, it is reasonable to expect Marble Falls to follow the same path.

In addition, when you go into Marble Falls, you see something very, very strange. For a town of such a small population, you see essentially a new Home Depot, and a new Office Depot, and lots of signs of new growth. Hmmmmm. Knowing that firms like Home Depot rarely miss on their analysis of future growth, that is really interesting to me.

So now, let’s look at some numbers. We are working on a duplex project that we hope to bring to our group over the next week. Here are the rough numbers with a purchase price of approximately $200,000 ($100,000 per side of the duplex).

Net Income After Property Management: $20,000 (We believe this to be conservative)

Page 2 of 3 :: First | Last :: Prev | 1 2 3 | Next