hen you buy good investment properties you generally benefit in three ways: positive cash flow, gradual appreciation, and tremendous tax benefits. Sometimes, though, there is another way you can make money—“instant equity”.

Mark Bloom of San Francisco learned of the great investing opportunities in Dallas properties and took a calculated chance by buying one single-family house from Al Lee’s Tortoise I, LP. The houses are designed to be cash-flowing rental properties that target mainly the huge local Section 8 market. “I was a bit skeptical, because the price seemed too good to be true, and I knew little of the developer.…[but] after doing a background check and calling references, I felt very comfortable and took the plunge”, recalls Mark.

Like everyone else, he bought the property pre-construction and waited several months for the development and building to be completed before he could close escrow.

Al had told all of the buyers that the prices they were paying were actually below-market; but Mark accepted that as optimistic salesmanship and just focused on the prospects for getting the house leased and producing income.

Within 60 days (there is normally a several week delay for processing and inspections by the Section 8 administrations) the house was leased to a good tenant and, as Al had predicted, producing income. At this point Mark was quite pleased with his new investment.

Then, in May, Mark received the appraisal that the city does annually for tax purposes. These appraisals are based on comparable sales in the area and are designed to reflect the actual fair market value of each property. “I received my 2007 tax assessment from Dallas and the house appraised for…more than  $10,000 over my purchase price 6 months ago”, he remarked, adding: “I am now looking into purchasing a second home in the Ravenview area..”

While Tortoise I can not promise instant equity on any purchase and property valuations are subject to changes, good-quality houses in the right locations that produce positive cash flow certainly do offer the opportunity to profit in many ways.