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Turn-Key Positive Cash Flow
Real Estate Investments
Presenting:
NEW CONSTRUCTION PRE-LEASED DUPLEX HOMES IN
FORT SMITH, ARKANSAS
PRESENTER / SELLING AGENT:
Chris Runyan ~ Keller Williams Realty of NWA•Member Arkansas, National, & Local REALTOR Assoc.•8 Years Investment Property Experience•Lifelong Arkansas Resident•Over $20 Million in Transactions to Out of State Buyers
TONIGHT’S GOALS
YOU WILL LEARN ABOUT:
THE GREATER FORT SMITH ARKANSAS REGION
THE FUTURE OF THE REGION
WHY THE TIME IS RIGHT FOR: PRE-LEASED POSITIVE CASH FLOW PROPERTY
Why the area is a safe haven for real estate investors
What Makes a Great Area to Own Property?
• Population Growth
= • Increased Housing Demand
= • Less Available Land
= • Increase in Property Values
What Makes a Great Area to Own Property?
Why Does Population Grow?
•JOBS!
• Desirable Climate
• Educational Opportunities
• Recreation
• Affordable Living
• Medical Facilities
= HIGH QUALITY OF LIFE
DEFINING THE REGION
CENTRALIZED LOCATIONWHERE IS? FORT SMITH, ARKANSAS
HIGH QUALITY OF LIFE
WHAT DEFINES REGION TODAY?
DEFINING THE REGION
•LOW COST OF LIVING ~ 26% BELOW NATIONAL AVG.FORBES RECENTLY RANKED #1
•AFFORDABLE HOUSING ~ $176K AVG.
•RANKED #6 INCOME GROWTH IN US~FORBES
HIGH QUALITY OF LIFE
WHAT DEFINES REGION TODAY?
•AVERAGE COMMUTE ONLY 18 MINUTES US AVERAGE OF 28 MINUTES
DEFINING THE REGION
•DESIRABLE CLIMATE ~ 200 DAYS OF SUNSHINE74 AVG HIGH – 44 AVG LOW
•ABUNDANCE OF OUTDOOR RECREATIONSURROUNDED BY OZARK & OUACHITA MOUNTAIN RANGES
WHAT DEFINES REGION TODAY?
DEFINING THE REGION
•NEW 4 YEAR UNIVERSITYThe University of Arkansas-Fort Smith
•REGIONAL HUB for MEDICAL SERVICES
•ACTIVE MILITARY TRAINING BASE
HIGH QUALITY OF LIFE
PRO-BUSINESS ENVIRONMENT
WHAT DEFINES REGION TODAY?
•#6 LOW COST OF DOING
BUSINESS IN US~FORBES
•TOP 25 SMALL CITY FOR
DOING BUSINESS~ INC MAGAZINE
DEFINING THE REGION
TOP MAJOR EMPLOYERSArkansas Best Freight – 1,000
Sparks Medical – 2,150
St. Edwards Medical – 1,800
Baldor Electric – 1,800
Whirlpool Corporation – 3,000
University of Arkansas-Fort Smith – 800
Rheem Air – 1,800
OK Industries – 4,800
DEFINING THE ECONOMY ~ JOBS
DEFINING THE REGION
•CURRENTLY HIGHEST ACTIVE LABOR FORCE EVER
•CURRENTLY HIGHEST EMPLOYMENT EVER
•4.5% UNEMPLOYMENT ~ US AVG 5%
•PROJECTED TO ADD OVER 10,000 NEW JOBS NEXT 6 YEARS~ARKANSAS DEPARTMENT OF LABOR
THE ECONOMY ~ GOOD NEWS!
•DISCOVERY OF FAYETTEVILLE SHALE-NATURAL GAS RESERVE
DEFINING THE REGION
•$100 MILLION IN ADDITIONAL DOWNTOWN INVESTMENTS
•7 NEW MANUFACTURING PLANT ANNOUNCEMENTS IN THE LAST 6 MONTHS
DEFINING THE REGION
•I-49 PLANNEDCONNECTING CHICAGO & CANADA TO GULF OF MEXICO AND MEXICO
•10,000 NEW RESIDENTS IN LAST 18 MONTHS
THE ECONOMY ~ GOOD NEWS!
THE FORT SMITH ARKANSAS REGION
DEFINING THE REGION
A Safe Haven for Real Estate Investors..
•STEADY AND PREDICTABLE
Buy Property Here If You Desire:
•5% Vacancy RateFort Smith Property Managers Association – 4QTR 07
•HIGH OCCUPANCY
•5-7% APPRECIATION ANNUALLY(OFHEO)•40% of Population Rents
•SUBPRIME WOES
•RENTAL MARKET WILL CONTINUE TO THRIVE
DEFINING THE FUTURE HOUSING
•LESS PEOPLE CAN AFFORD TO BUY HOMES
•CHANGING LENDING REQUIREMENTSMORE MONEY OUT OF POCKET TO OWN HOME
•JOB GROWTH = HOUSING DEMAND
DEFINING THE REGION
What Makes a Great Area to Own Property?
POPULATION GROWTH!
•JOBS!
• Desirable Climate
• Educational Opportunities
• Recreation
• Affordable Living
• Medical Facilities
= THE FORT SMITH REGION!
What Makes a Great Property to BUY?
• High Occupancy or Tenants In Place
+ • Low Maintenance
+ • Location
+ • Experienced Property Management
+ POSITIVE CASH FLOW +
+ SELLER INCENTIVES +
+ DISCOUNTS +
THE TIMING IS RIGHTINVESTMENT OPPORTUNITY
TURN-KEY
NEW CONSTRUCTION
PRE-LEASED DUPLEX HOMES
WITH POSITIVE CASH FLOW
INVESTMENT OPPORTUNITY
BUILDER/DEVELOPER
•30 YEARS EXPERIENCE IN MARKET
•DANNY MEADOWS CONSTRUCTION
•PROVEN TRACK RECORD
•HANDS ON BUILDER
INVESTMENT OPPORTUNITY
NEW CONSTRUCTION PRE-LEASED DUPLEXES
TENANTS LOVE ‘EM!
•LAWN MAINTENANCE PROVIDED
•NEAR JOBS, SHOPPING, ENTERTAINMENT, & SCHOOLS
•SUBDIVISION LOCATED AMONG NEW SINGLE FAMILY HOMES
•TRIED AND TESTED LARGE FLOOR PLANS
•FENCED-IN BACKYARDS
•LESS RENTS PER MONTH BUT SAME BENEFITS OF HOME RENTAL
INVESTMENT OPPORTUNITY
NEW CONSTRUCTION PRE-LEASED DUPLEXES
INVESTORS LOVE ‘EM!
•POSITIVE CASH FLOW WITH 10% DOWN
•DESIGNED FOR LOW MAINTENANCE COSTS
•NEW CONSTRUCTION(2007 OR NEWER)
•TURN-KEY OWNERSHIPPRE-LEASED
BUILDER ALSO OWNS PROPERTY MANAGEMENTEASY TO HANDLE WARRANTY ITEMS & MAINTENANCE NEEDS
•10% UNDER APPRAISED & SELLER INCENTIVES
INVESTMENT OPPORTUNITY
SOUTH MEADOWS ESTATES
INVESTMENT OPPORTUNITY
SOUTH MEADOWS ESTATES
INVESTMENT OPPORTUNITY
SOUTH MEADOWS ESTATES
INVESTMENT OPPORTUNITY
SOUTH MEADOWS ESTATESAMENITIES
•80% BRICK
•FULLY SODDED & LANDSCAPED
•2 CAR GARAGES
•PRIVACY FENCED
•DISHWASHER, STOVE & RANGE, MICROWAVE, BLINDS INCLUDED
INVESTMENT OPPORTUNITY
SOUTH MEADOWS ESTATES3 FLOOR PLANS
•2,600-2,900 SQ FT
•(2) 3 BEDROOM 2 BATH 2 CAR GARAGE UNITS (2,600-2,800 SQ FT)
•(2) 2 BEDROOM 2 BATH 2 CAR GARAGE UNITS (2,600 SQ FT)
•HYBRID (1) 3 BEDROOM 2 BATH 2 CAR GARAGE UNIT AND (1) 2 BEDROOM 2 BATH 2 CAR GARAGE UNIT (2,900 SQ FT)
INVESTMENT OPPORTUNITY
SOUTH MEADOWS
ESTATES DUPLEXES
LOCATION
LOCATION
LOCATION
INVESTMENT OPPORTUNITY
SOUTH MEADOWS ESTATES
SELLER INCENTIVES
•SELLER PAYS 2% OF PURCHASE PRICE •DISCOUNTED PROPERTY MANAGEMENT
•DISCOUNTED 10% OFF RECENT APPRAISALS ($20,000)•ONE YEAR BUILDER’S WARRANTY
INVESTMENT OPPORTUNITY
SOUTH MEADOWS ESTATESFINANCIAL PROFORMA – 6 BEDROOM PLAN
PURCHASE PRICE
$198,500
DOWN PAYMENT 10%
$19,850
TOTAL FINANCED
$178,650
INVESTMENT OPPORTUNITY
SOUTH MEADOWS ESTATES
DEBT SERVICE
10% DOWN, 30 YEAR FIXED,10 YEARS I/O,
SELLER PAID 2PT BUYDOWN
INTEREST RATE AS OF 5/18/2008 = 6.375%
MONTHLY PAYMENT ESTIMATE:
$1,374 INCLUDES MI
FINANCIAL PROFORMA – 6 BEDROOM PLAN
INVESTMENT OPPORTUNITY
SOUTH MEADOWS ESTATESFINANCIAL PROFORMA
ESTIMATED EXPENSESTAXES $150 /MOINSURANCE $50 /MOMANAGEMENT FEES $95 /MO
TOTAL EST. EXPENSES $1374/MO
ACTUAL GROSS RENTS $1,590 /MO
DEBT SERVICE $1079 /MO
TOTAL ESTIMATED EXPENSES $1374 /MO
MINUS
ESTIMATED AFTER TAX CASH FLOW +$523/MO
ESTIMATED CASH FLOW +$216/MO
INVESTMENT OPPORTUNITY
SOUTH MEADOWS ESTATESFINANCIAL PROFORMA
GROSS ANNUAL RENTS
$19,080
ANNUAL ESTIMATED NET INCOME BEFORE TAXES
$2,592
IN SUMMARY
FORT SMITH IS A GREAT AREA TO INVEST IN
SOUTH MEADOWS ESTATES ARE A GREAT PROPERTY TO OWN
THE TIMING IS RIGHT
INVESTMENT OPPORTUNITY
WHAT IS NEXT?
•CALL NREI CLUB AT 925-846-2582 or
•EMAIL NREI CLUB AT
•REFERENCE: FORT SMITH DUPLEXES
First Come, First Serve Basis
TO RESERVE: