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Investment Guidelines
We have established four basic, key guidelines for determining which properties should be acquired from any builder. We buy new properties at, or below, current estimated “production builder” replacement cost. In determining an acceptable purchase price, we consider all phases of the building process, including “land acquisition cost, vertical construction cost, general & administrative, selling and carrying costs.” In doing so, we use a worst economic case scenario approach for estimating the cost of each phase of this process. We are not interested in re-inventing the wheel by investing in regions which either have little expectation of growth (ie.- Idaho, Montana, Wyoming, etc) or regions where there is little chance of property appreciation (such as Texas, Oklahoma, Arkansas, etc). As a result, we look only to invest in areas of the US where there has been substantial growth in the past and where there is likely to be continued growth as well as renewed property appreciation in the future! We buy only properties that are expected to produce a positive monthly cash flow from rentals, presuming reasonable financing. We maintain a local property rental management operation in each region where we are investing. This operation rents property for those clients who require this service. We use our large buying power to negotiate low cost rental management agreements, on favorable terms for our investor clients.
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