---------------------- Forwarded by Phillip K Allen/HOU/ECT on 09/19/2000 
04:35 PM ---------------------------


"George Richards" <cbpres@austin.rr.com> on 09/08/2000 05:21:49 AM
Please respond to <cbpres@austin.rr.com>
To: "Phillip Allen" <pallen@enron.com>
cc: "Larry Lewter" <retwell@mail.sanmarcos.net> 
Subject: Westgate Proforma-Phillip Allen.xls


Enclosed is the preliminary proforma for the Westgate property is Austin
that we told you about.  As you can tell from the proforma this project
should produce a truly exceptional return of over 40% per year over 3 years.
This is especially attractive when the project is in a market as strong as
Austin and we are introducing new product that in a very low price range for
this market.  This is the best project in terms of risk and reward that we
have uncovered to date in the Austin market.
The project does have approved zoning and will only require a site plan.  As
it is in the "Smart Growth Corridor" area designated by the City of Austin
for preferred development, this will be fast tracked and should be complete
in less than 6 months.  Additionally, many of the current and more severe
water treatment ordinances have been waived.  I have estimated the lot
improvement costs based on a 28 lot development we investigated in North
Austin, which included a detention/retention and filtration pond and street
widening.  Even though this property is not likely to require street
widening and will have less of a detention/retention and filtration pond
requirement, I used this data to be cautious.
 The Lone Star gas line easement in the lower portion of the property is not
expected to impact sales significantly.  Other projects have been quite
successful with identical relationships to this pipeline, such as the
adjoining single family residential and a project at St. Edwards University.
As with most infill projects, the quality of the surrounding neighborhoods
is uneven.  We have included a fence around the entire property, but may
only put it on Westgate and Cameron Loop.  Gated communities are far
preferred so this is a good idea for both screening and current buyer
preferences.
The seller accepted our offer Thursday evening with a price of $680,000 and
an extended escrow.  This will enable us to probably obtain an approved site
plan before closing on the contract, which will mean that we can close into
an A&D Loan rather than into a land loan and then an improvement loan.
This analysis shows your investment at $700,000 for a 50% interest in the
profits of the project.  As we discussed in San Marcos, we can also discuss
having you invest only in the lots, sell the lots to the construction entity
with your profit in the lot.  I believe this would facilitate the use of a
1031 Exchange of the proceeds from this deal into another project that is a
rental deal or at least into the land for a rental project that would then
be the equity for that project.  You would need to discuss this with an
exchange expert first.  Larry Lewter knows an expert in the field in San
Antonio if you do not know anyone.
I will send you a package on the property that was prepared by the broker,
by Airborne Express today for Saturday delivery.
Once you have read the package and reviewed this proforma, we would want to
schedule a tour of the site and the area.  Please get back to me as soon as
your schedule permits regarding the site visit and feel free to call at any
time.  You can reach me over the weekend and in the evening at either
512-338-1119 or 512-338-1110.  My cell phone is 512-748-7495 and the fax is
512-338-1103.   I look forward to hearing from you and to working with you
on this project that is sure to be a major winner.
I regret that it took so long to get back to you, but we had some unusual
events these past few weeks.  A small freakish wind storm with severe 60+mpg
downdrafts hit the South part of Austin where we are building 10 town homes.
One of these units had just had the roof decked with the siding scheduled to
start the next day.  The severe downdraft hitting the decked roof was enough
to knock it down.  The City shut down the project for a week and it took
another week to get every thing back on tract.  Then last week I had to take
my wife  to emergency.  She has a bulge in the material between the vertebra
in her spine and it causes her extreme pain and has kept her bedridden this
past week..  There is nothing like having your wife incapacitated to realize
the enormous number of things she does everyday.   Fortunately, it looks as
if she will be ok in the long run.
George W. Richards
Creekside Builders, LLC


 - Westgate Proforma-Phillip Allen.xls