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7/29/2019 Regency Presentation Package
1/17
Joe Lumbley
214-941-3417
[email protected] Dallas, Texas, 75208
Located on frontage road (crossing Park Row) of SH 360 in Arlingtron TX
Regency Apartments
2507 Airport Circle
Prepared for
Prospective Purchaser
Arlington Texas
Individual HVAC
Presented by
819 N. Bishop
JP Lumbley & Associates, LLC, Realtors
Bishop Arts District Office
Individual Hot Water Heaters
Built in 1967
Separate Electric Meters, Tenants pay electric
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Potential Rental Income 420,480$ Purchase/Asking Price 1,850,000$ Property Type Apartments
Other Income 7,988 Improvements - No. of Units 70
Total Vacancy and Credits (42,048) Other - Price Per Unit 26,429$
Operating Expenses (240,574)$ Closing Costs - Total Sq Ft 56,996
Annual Reserves: $ Finance Points - Price Per Sq Ft 32$Net Operating Income (NOI) 145,846$ Income per Unit 6,121$
MIP Payments $ Total Acquisition Cost 1,850,000$ Expenses per Unit (3,437)$
Annual Reserves: $
Debt Service: (91,942)$Mortgage (s) 1,387,500$
Cash Flow Before Taxes 53,905$
(7,808) Down Payment / Investment 462,500$
Cash Flow After Taxes 46,097$
% of Asking % of Cost
Rental Growth Rate: 5.00% Down Payment: 462,500$ 25.00% 25.00%
Expense Growth Rate: 5.00% Initial Loan Balance: 1,387,500$ 75.00% 75.00%
Capitalization Rate (Resale): 8.00%
Marginal Tax Rate: 28.00% Loan Amount Interest Rate Term Payment
Capital Gain Tax Rate: 15.00% 1,387,500$ 5.25% 30 $7,662
$ 5.00% 30 $0
$ 4.00% 30 $0
Year 1 Year 3 Year 7
Debt Coverage Ratio (DCR) 1.59 1.89 2.42
Loan-to-Value Ratio (LVR) 67.7% 55.2% 42.0%
Capitalization Rate Based on Cost 7.88% 9.41% 12.03%
Capitalization Rate Based on Resale Price 8.00% 8.00% 8.00%
Gross Rent Multiplier 4.40 5.18 5.18
4.00% 99,955 556,045 1,250,917
10.00% 43,776 304,677 557,124
Cash on Cash Return - Before Taxes 11.66% 17.77% 28.23%
Cash on Cash Return - After Taxes 9.97% 14.75% 21.97%
Internal Rate of Return - Before Taxes 37.93% 30.52%
Internal Rate of Return - After Taxes 31.78% 26.25%
35.17% 25.11%
29.68% 21.97%
Loan InformationAssumptions
Income Taxes: Benefit (Expense) @ 28%
Financial Measurements Notes / Discussion
The information, calculations and data presented in this report are believed to be accurate but are not guaranteed. The information contained in this report shall not be considered as
a subs titution for legal, accounting or other professional advice. Please s eek proper legal and tax advice as appropriate before making investments.
Modified Internal Rate of Return - Before Taxes
Modified Internal Rate of Return - After Taxes
Net Present Value (NPV) - B/ Taxes
Net Present Value (NPV) - A/Taxes
Disclaimer: All information presented is believed to be accurate.
Joe Lumbley
JP Lumbley & Associates, LLC, Realtors
214-941-3417
Property Overview
Regency Apartments
2507 Airport Circle
Arlington Texas
Income, Expenses & Cash Flow
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South Park
Apartments 76Units
Regency
Apartments 70Units
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Regency Apartments
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Regency Apartments
2507 Airport Circle
Arlington Texas
Potential Rental Income 420,480$ 441,504$ 463,579$ 486,758$ 511,096$
Other Income 7,988 8,388 8,807 9,248 9,710
Less: Vacancy & Credit Losses (42,048) (35,320) (32,451) (24,338) (25,555)
Effective Gross Income 386,420$ 414,572$ 439,936$ 471,668$ 495,251$
Less: Operating Expenses (240,574) (252,956) (265,789) (279,468) (293,441)
Net Operating Income (NOI) 145,846$ 161,616$ 174,147$ 192,200$ 201,810$
Less: Annual Debt Service (91,942) (91,942) (91,942) (91,942) (91,942)
CASH FLOW Before Taxes 53,905$ 69,674$ 82,205$ 100,258$ 109,868$
Projected Sales Price 2,020,196$ 2,176,835$ 2,402,499$ 2,522,624$ 2,648,755$
Less: Selling Expenses (121,212) (130,610) (144,150) (151,357) (158,925)
Adjusted Projected Sales Price 1,898,984$ 2,046,225$ 2,258,349$ 2,371,267$ 2,489,830$
Less: Mortgage(s) Balance Payoff (1,367,935) (1,347,319) (1,325,593) (1,302,699) (1,278,574)
SALE PROCEEDS Before Taxes 531,049$ 698,907$ 932,756$ 1,068,567$ 1,211,256$
Cash Generated in Current Year 46,097$ 59,487$ 68,200$ 80,872$ 87,448$
Cash Generated in Previous Years n/a 46,097 105,583 173,783 254,656
Cash Generated from Property Sale 510,807 643,124 831,701 937,120 1,048,569
Original Initial Investment (462,500) (462,500) (462,500) (462,500) (462,500)
94,404$ 286,208$ 542,984$ 729,276$ 928,174$
Debt Coverage Ratio (DCR) 1.59 1.76 1.89 2.09 2.19
Loan-to-Value Ratio (LVR) 67.7% 61.9% 55.2% 51.6% 48.3%
Capitalization Rate Based on Cost 7.88% 8.74% 9.41% 10.39% 10.91%
Capitalization Rate Based on Resale Price 8.00% 8.00% 8.00% 8.00% 8.00%
Gross Rent Monthly Multiplier (GRM) 52.80 59.17 62.19 62.19 62.19
Gross Rent Yearly Multiplier (GRM) 4.40 4.93 5.18 5.18 5.18
Value of Property Using this GRM 5.00 2,102,400 2,207,520 2,317,896 2,433,791 2,555,480
Break-Even Ratio 77.61% 76.66% 75.73% 74.88% 74.00%Operating Expense Ratio 62.26% 61.02% 60.42% 59.25% 59.25%
Net Present Value (NPV) - Before Taxes 4.00% 99,955 299,927 556,045 725,945 898,397
Cash-on-Cash Return with Equity 20.41% 37.55% 39.93% 22.40% 21.22%
Cash-on-Cash Return - Before Taxes 11.66% 15.06% 17.77% 21.68% 23.76%
Internal Rate-of-Return (IRR)- Before Taxes 26.48% 34.87% 37.93% 35.08% 33.13%
Modified Internal Rate-of-Return (MIRR)- Before Taxes 26.48% 33.44% 35.17% 31.49% 28.83%
Joe Lumbley
214-941-3417
Financial Measurements
Year 4 Year 5
Cash Position
Rental Activity Analysis
Total Potential CASH Generated
Property Resale Analysis
Year 1 Year 2 Year 3
2/8/2013 1:39 PM 1993 - 2012 Cash Flow Analyzer h ttp://RentalSoftware.com
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Regency Apartments
2507 Airport Circle
Arlington Texas
Per unit Total Percent of Monthly Rent Monthly Annua
Sq Ft Sq Ft Total Rev/ Sq Ft Per Unit Rent Rent
1-1 12 602 7,224 12.67% 0.710 425$ 5,100$ 61,$
1-1 4 682 2,728 4.79% 0.640 435$ 1,740$ 20,$
1-1 2 720 1,440 2.53% 0.630 450$ 900$ 10,$
1-1 12 756 9,072 15.92% 0.600 450$ 5,400$ 64,$
1-1 6 790 4,740 8.32% 0.600 475$ 2,850$ 34,$
2-1 6 792 4,752 8.34% 0.660 525$ 3,150$ 37,$
2-1 12 912 10,944 19.20% 0.600 550$ 6,600$ 79,$
2-2 12 996 11,952 20.97% 0.580 575$ 6,900$ 82,$
2-2 4 1,036 4,144 7.27% 0.580 600$ 2,400$ 28,$
0 0 0 0 0.00% 0.000 $ $ $
Totals 70 7,286 56,996 100.0% 0.615 4,485 35,040$ 420,$
Joe Lu
214-941
Unit Description
Number of
Units
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Regency Apartments
2507 Airport Circle
Arlington Texas
Per Unit Total
Sq. Ft. Sq. Ft.
Laundry 666$ 7,988$ 10$ 0.09 0.01
Totals 666$ 7,988$ 10$ 0.09 0.01
Joe Lumbley
214-941-3417
DescriptionAnnualAmount
Per UnitMonthlyAmount
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Regency Apartments
2507 Airport Circle
Arlington Texas
% of % of
Expenses Revenue
350 5.0% 5.00 0.01 0.1% 0.1%
612 5.0% 8.74 0.01 0.3% 0.1%
235 5.0% 3.36 0.00 0.1% 0.1%
17,276 5.0% 246.80 0.30 7.2% 4.1%
41,666 5.0% 595.23 0.73 17.3% 9.9%
15,137 216.25 0.27 6.3% 3.6%
62,764 5.0% 896.63 1.10 26.1% 14.9%
3,988 5.0% 56.96 0.07 1.7% 0.9%
200 5.0% 2.86 0.00 0.1% 0.0%
42,762 5.0% 610.89 0.75 17.8% 10.2%2,433 5.0% 34.76 0.04 1.0% 0.6%
9,276 5.0% 132.51 0.16 3.9% 2.2%
3,716 5.0% 53.08 0.07 1.5% 0.9%
1,327 5.0% 18.96 0.02 0.6% 0.3%
38,832 5.0% 554.74 0.68 16.1% 9.2%
240,574$ 3,437$ 56,996 100.0% 57.2%
Electricity
Per Unit
Supplies
Water
Expense Description
Telephone
Total Annual Operating Expenses
Trash Removal
Payroll
Maintenance
Office Expenses
Property Taxes
Payroll
Management Fee
Annual
Increase
Accounting
Insurance
Joe Lumbley
214-941-3417
Per Sq Ft
Advertising
Association Fees
Annual
Amount
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Annual Property Operating DataRege ncy Apartments
2507 Airport Circle
Arlington Texas
Year 1 Sq Ft Pe r Unit Year 2 Sq Ft Pe r Unit Year 3 Sq Ft Per Unit Year 4
Potential Rental Income 420,480$ 0.61 500.57 441,504$ 0.65 525.60 463,579$ 0.68 551.88 486,75$
Less: Vacancy & Credit Losses (42,048) -0.06 -50.06 (35,320) -0.05 -42.05 (32,451) -0.05 -38.63 (24,33
Other Income 7,988 0.01 9.51 8,388 0.01 9.99 8,807 0.01 10.48 9,24
386,420$ 0.56 460.02 414,572$ 0.61 493.54 439,936$ 0.64 523.73 471,66$
Accounting 350 0.00 0.42 368 0.00 0.44 386 0.00 0.46 40
Advertising 612 0.00 0.73 643 0.00 0.77 675 0.00 0.80 70
Association Fees 235 0.00 0.28 247 0.00 0.29 259 0.00 0.31 27
Insurance 17,276 0.03 20.57 18,140 0.03 21.60 19,047 0.03 22.67 19,99
Maintenance 41,666 0.06 49.60 43,749 0.06 52.08 45,937 0.07 54.69 48,23
Management Fee 15,137 0.02 18.02 16,247 0.02 19.34 17,245 0.03 20.53 18,49
Payroll 62,764 0.09 74.72 65,902 0.10 78.46 69,198 0.10 82.38 72,65
Office Expenses 3,988 0.01 4.75 4,187 0.01 4.98 4,396 0.01 5.23 4,61
Supplies 200 0.00 0.24 210 0.00 0.25 221 0.00 0.26 23
Property Taxes 42,762 0.06 50.91 44,900 0.07 53.45 47,145 0.07 56.13 49,50
Payroll 2,433 0.00 2.90 2,555 0.00 3.04 2,682 0.00 3.19 2,81
Trash Removal 9,276 0.01 11.04 9,740 0.01 11.60 10,227 0.01 12.17 10,73
Electricity 3,716 0.01 4.42 3,902 0.01 4.64 4,097 0.01 4.88 4,30
Telephone 1,327 0.00 1.58 1,393 0.00 1.66 1,463 0.00 1.74 1,53
Water 38,832 0.06 46.23 40,774 0.06 48.54 42,812 0.06 50.97 44,95
240,574$ 0.35 286.40 252,956$ 0.37 301.14 265,789$ 0.39 316.42 279,46$
145,846$ 0.21 173.63 161,616$ 0.24 192.40 174,147$ 0.25 207.32 192,20$
Less: Annual Debt Service (91,942) -0.13 -109.45 (91,942) -0.13 -109.45 (91,942) -0.13 -109.45 (91,94
Cash Flow Before Taxes 53,905$ 0.08 64.17 69,674$ 0.10 82.94 82,205$ 0.12 97.86 100,25$
Net Operating Income (NOI)
Total Operating Expenses
Operating Expenses
Effective Gross Income
1993 - 2
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Regency Apartments
Joe Lumb
214-941-3
Time Net Operating Debt Cash Flow Incomes Cash Flow
Period Income Service Before Tax Taxes After Tax
Int Investment (462,500)$ (462,500)$
Year 1 145,846 - (91,942) 53,905 (7,808) 46,097
Year 2 161,616 - (91,942) 69,674 (10,187) 59,487
Year 3 174,147 - (91,942) 82,205 (14,005) 68,200
Year 4 192,200 - (91,942) 100,258 (19,386) 80,872
Year 5 201,810 - (91,942) 109,868 (22,420) 87,448
2507 Airport Circle
Arlington Texas
MIP Payments
$
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
1 2 3 4 5
Cash Flow After Taxes
Cash Flow Before Taxes
1993 - 2012 Cash Flow Analyzer http://RentalSoftware.com
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Regency Apartments
2507 Airport Circle
Arlington TexasJoe Lumb
214-941-3
Time Initial Investment Cash Flow Cash on Cash Income Cash Flow Cash on Cash
Period Adj for Refinance Before Taxes Before Taxes Taxes After Taxes After Taxes
Year 1 462,500$ 53,905$ 11.66% (7,808)$ 46,097$ 9.97%Year 2 462,500 69,674 15.06% (10,187) 59,487 12.86%
Year 3 462,500 82,205 17.77% (14,005) 68,200 14.75%
Year 4 462,500 100,258 21.68% (19,386) 80,872 17.49%
Year 5 462,500 109,868 23.76% (22,420) 87,448 18.91%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
1 2 3 4 5
After Taxes
Before Taxes
1993 - 2012 Cash Flow Analyzer http://RentalSoftware.com
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Regency Apartments
2507 Airport Circle
Arlington TexasJoe Lumb
214-941-3
Time Net Operating Cap Rate on Cost Resale
Period Income (NOI) 1,850,000$ Value
Year 1 145,846$ 7.88% 2,020,196$
Year 2 161,616 8.74% 2,176,835
Year 3 174,147 9.41% 2,402,499
Year 4 192,200 10.39% 2,522,624
Year 5 201,810 10.91% 2,648,755
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
1 2 3 4 5
1993 - 2012 Cash Flow Analyzer http://RentalSoftware.com
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Regency Apartments
2507 Airport Circle
Arlington TexasJoe Lumb
214-941-3
Time Net Operating Mortgage Debt Coverage
Period Income Payments Before Taxes
Year 1 145,846$ (91,942)$ 1.59
Year 2 161,616 (91,942) 1.76
Year 3 174,147 (91,942) 1.89
Year 4 192,200 (91,942) 2.09
Year 5 201,810 (91,942) 2.19
-
0.50
1.00
1.50
2.00
2.50
1 2 3 4 5
1993 - 2012 Cash Flow Analyzer http://RentalSoftware.com
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Regency Apartments
2507 Airport Circle
Arlington TexasJoe Lumb
214-941-3
Before Taxes After Taxes
Year 1 26.48% 20.41%
Year 2 34.87% 28.34%
Year 3 37.93% 31.78%
Year 4 35.08% 29.65%
Year 5 33.13% 28.20%
Internal Rate of Return (IRR)Time Period
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
1 2 3 4 5
IRR After TaxIRR Before Tax
1993 - 2012 Cash Flow Analyzer http://RentalSoftware.com
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Regency Apartments
2507 Airport Circle
Arlington Texas Joe Lumb
214-941-3
Cash on Cash Time Period Potential Operating, Debt, Occupancy BreakEven Max Vacancy BreakEven Max Vacanc
Requirement Rental Income Reserve Expenses Rate (Existing) Occupancy Rate BreakEven Rate Occupancy Rate BreakEven Ra
6.00% w/ Cash on Cash w/ Cash on Ca
Year 1 428,468 (332,516) 90.00% 77.61% 22.39% 84.08% 15.92%
Year 2 449,892 (344,898) 92.00% 76.66% 23.34% 82.83% 17.17%
Year 3 472,386 (357,731) 93.00% 75.73% 24.27% 81.60% 18.40%
Year 4 496,006 (371,410) 95.00% 74.88% 25.12% 80.47% 19.53%
Year 5 520,806 (385,383) 95.00% 74.00% 26.00% 79.33% 20.67%
68.00%
70.00%
72.00%
74.00%
76.00%
78.00%
80.00%
82.00%
84.00%
86.00%
1 2 3 4 5
BreakEven Occupancy
BreakEven Occupancy with Cash on Cash Requirment
1993 - 2012 Cash Flow Analyzer http://RentalSoftware.com
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214-941-3417
Joe Lumbley
About Us
JP Lumbley & Associates, LLC, RealtorsBishop Arts District Office
819 N. BishopDallas, Texas, 75208
Joe has been selling income properties in the DFW area for over 33 years. Over the past
few years, he and his firm have been responsible for the sale of almost 100 multifamily
properties in the Dallas/Fort Worth area. Many of the firm's sales have been in close-in,redeveloping areas such as North Oak Cliff. We have lots of experience in C and D level
properties as well as experience in rehabbing and upgrading these properties.
The firm has also managed multifamily properties all over the DFW area. We seek similar
experience in our sales agents. Our last two new hires have both owned multifamily
properties in the 50-100 unit range. We feel that there's no substitute for on-the-ground
experience in the industry.
Joe's overall approach to multifamily investing can best be described as "data driven". He
is a database guru, having written the best-selling Informix DBA Survival Guide.
It's the "Bible" of IBM database administration and has been used as a college textbookfor administration of large IBM database systems. His book has been referenced in many
IT doctoral dissertations as well as being the best-selling book ever written on the
subject.
With that kind of background, it's no surprise that the JP Lumbley & Associates, LLC
corporate database contains features no other real estate firm in the area can match. We
have all multifamily properties in North Texas on our servers, and we can search and
analyze investment opportunities using a myriad of parameters. We also have a corporate
buyer database that enables us to remain in contact with the top buying principals who
are active in the area.
Joe's often said "We're not in the real estate business. We're in the information business.
We sell information and we sell streams of money." With that kind of philosophy you can
expect more than the typical sales pitch from a JPLA agent. You can expect actionable,
usable information about all of our listings. WE DON'T USE PROFORMA NUMBERS.
Life's too short to deal with bogus numbers.
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10-10-11
Before working with a real estate broker, you
should know that the duties of a brokerdepend on whom the broker represents. Ifyou are a prospective seller or landlord
(owner) or a prospective buyer or tenant (buyer), youshould know that the broker who lists the property forsale or lease is the owners agent. A broker who actsas a subagent represents the owner in cooperationwith the listing broker. A broker who acts as a buyersagent represents the buyer. A broker may act as anintermediary between the parties if the partiesconsent in writing. A broker can assist you in locatinga property, preparing a contract or lease, or obtainingfinancing without representing you. A broker isobligated by law to treat you honestly.
I F THE BROKER REPRESENTS THE OWNER:The broker becomes the owners agent by enteringinto an agreement with the owner, usually through awritten - listing agreement, or by agreeing to act as asubagent by accepting an offer of subagency from thelisting broker. A subagent may work in a different realestate office. A listing broker or subagent can assistthe buyer but does not represent the buyer andmust place the interests of the owner first. The buyershould not tell the owners agent anything the buyerwould not want the owner to know because anowners agent must disclose to the owner any
material information known to the agent.
I F THE BROKER REPRESENTS THE BUYER:The broker becomes the buyers agent by enteringinto an agreement to represent the buyer, usuallythrough a written buyer representation agreement. Abuyers agent can assist the owner but does notrepresent the owner and must place the interests ofthe buyer first. The owner should not tell a buyersagent anything the owner would not want the buyerto know because a buyers agent must disclose to thebuyer any material information known to the agent.
I F THE BROKER ACTS AS AN I NTERMEDI ARY:A broker may act as an intermediary between theparties if the broker complies with The Texas RealEstate License Act. The broker must obtain the writtenconsent of each party to the transaction to act as an
Appro ved by th e Texas Rea l Es ta te Com m iss ion fo r Vo lun t a ry Use
Texas law requires all real estate licensees to give the following information about
brokerage services to prospective buyers, tenants, sellers and landlords.
Information About Brokerage Services
Real estate licensee asks that you acknowledge receipt of this information about brokerage services for the licensees records.
intermediary. The written consent must state who will
pay the broker and, in conspicuous bold or underlinedprint, set forth the brokers obligations as anintermediary. The broker is required to treat eachparty honestly and fairly and to comply with TheTexas Real Estate License Act. A broker who acts asan intermediary in a transaction:
(1) shall treat all parties honestly;
(2) may not disclose that the owner will accept aprice less that the asking price unless authorized inwriting to do so by the owner;
(3) may not disclose that the buyer will pay aprice greater than the price submitted in a written offer
unless authorized in writing to do so by the buyer; and
(4) may not disclose any confidential information orany information that a party specifically instructs thebroker in writing not to disclose unless authorized inwriting to disclose the information or required to do so byThe Texas Real Estate License Act or a court order or ifthe information materially relates to the condition of theproperty.
With the parties consent, a broker acting as anintermediary between the parties may appoint a personwho is licensed under The Texas Real Estate LicenseAct and associated with the broker to communicate
with and carry out instructions of one party andanother person who is licensed under that Act andassociated with the broker to communicate with andcarry out instructions of the other party.
I f you choose to have a broker represent you,you should enter into a written agreement with thebroker that clearly establishes the brokers obligationsand your obligations. The agreement should statehow and by whom the broker will be paid. You havethe right to choose the type of representation, if any,you wish to receive. Your payment of a fee to a brokerdoes not necessarily establish that the brokerrepresents you. If you have any questions regarding
the duties and responsibilities of the broker, youshould resolve those questions before proceeding.
Buyer, Seller, Landlord or Tenant Date
Texas Real Estate Brokers and Salespersons are licensed and regulated by the Texas Real Estate Commission (TREC). If you have a question or complaintregarding a real estate licensee, you should contact TREC at P.O. Box 12188, Austin, Texas 78711-2188 , 512-936-3000 (http://www.trec.texas.gov)