---------------------- Forwarded by Phillip K Allen/HOU/ECT on 09/08/2000 
12:29 PM ---------------------------


"George Richards" <cbpres@austin.rr.com> on 09/08/2000 05:35:20 AM
Please respond to <cbpres@austin.rr.com>
To: "Phillip Allen" <pallen@enron.com>
cc: "Larry Lewter" <retwell@mail.sanmarcos.net>, "Diana Zuniga" 
<invest@bga.com> 
Subject: Sagewood Town Homes


I was aware that Regan Lehman, the lot developer for the entire 70 lot
duplex project, was selling his units in the $180's,  He does have a much
lower basis in the lots than anyone else, but the prime differences are due
to a) he is selling them during construction and b) they are smaller units.
We do not know the exact size of each of his units, but we believe one of
the duplexes is a 1164/1302 sq ft. plan.  This would produce an average sq
footage of 1233, which would be $73.80 psf at $182,000.  (I thought his
sales price was $187,000.)  At this price psf our 1,376 sf unit would sell
for $203,108.
What is more important, in my view, is a) the rental rate and b) the
rent-ability.  You have all of our current rental and cost data for your own
evaluation.  As for rent-ability, I believe that we have shown that the
3-bedroom, 3.5 bath is strongly preferred in this market.    In fact, if we
were able to purchase additional lots from Regan we would build 4 bedroom
units along with the 3-bedroom plan.
Phillip, I will call you today to go over this more thoroughly.
Sincerely,
George W. Richards
Creekside Builders, LLC