Julia’s Story
My two business partners and I recently purchased a package of 25 rental houses in Stamford, TX through Brian Payton and his partner Chad Simons.
Stamford is a country town near Abilene and about 3 hours drive west of Dallas. Although the population is quite small (less than 4,000) Stamford is a growing town and has good employment due mainly to ongoing construction of alternative fuel plants and wind farms in the area.
We purchased the Stamford properties because they were cash flow positive (even with a hard money loan), also they gave us good initial equity as we purchased the houses at a wholesale price.
Although most of the houses were in reasonably good condition we have done some rehabs and repairs to ensure we attract good quality tenants.
Because of good employment and lack of new housing there is high demand from tenants for existing properties. Consequently we have been able to increase the rents on some of the houses for even better cash flow. This also increases our equity as property values for investment are tied to rental yields.
We also have the option to owner finance these properties. Many of our tenants are long term and would like to purchase their own home but the banks are often unwilling to lend on properties with a value of less than $50,000. Consequently unless you have cash it is difficult to buy property in this area. We are considering offering owner finance to people in the town – this would be a real win/win situation as people will have the opportunity to buy their own homes with small down payments and the additional P&I repayments will increase our cash flows. Property expenses will also be reduced as property maintenance with owner finance is passed to the buyer.
This type of investment is obviously not for everyone as it does require some hands on management but if you’re prepared to put in some hard work and can think a little outside the square it can be very rewarding.
I would like to thank Brian and Chad for bringing this opportunity to us and for their assistance in getting the deal through and I look forward to doing more business with you in future.
Kind regards
Julia Caldwell
Sydney Australia
14 June 2007
