Business Plan · Confidential · Income Fund
K7 Income Fund
Austin Hospitality
Execution plan for a $50M total-capital value-add hospitality fund targeting Lake Travis, Austin, Texas. $20M of debt is already secured; $30M equity raise is under way. Conservative income-focused strategy targeting 7–12% annual cash yield and 12–16% IRR, with quarterly distributions beginning within 1–2 quarters of investment. 401K / IRA eligible. Schedule K1.
Fund Targets
Annual Cash Yield7–12%
Target IRR12–16%
Fund Life10 years
Hold Period5 years
DistributionsQuarterly
First DistributionWithin 1–2 quarters
Debt Secured$20M
Equity Raise$30M underway
Time to Close60–120 days
Retirement Eligible401K / IRA
01
Fund Thesis
Conservative Income from Prime Lake-Hospitality Assets
The K7 Real Estate Income Fund is a conservative income-oriented vehicle targeting value-add hospitality assets on Lake Travis in Austin, Texas — one of the most durable destination-hospitality sub-markets in the United States. Unlike the Notre Dame flagship (growth) or the Texas BTR fund (higher-return growth), this fund is sized to deliver steady quarterly cash distributions, long-term income, and capital preservation.
- Focus: steady cash flow, long-term income, capital preservation.
- Return profile: 7–12% annual cash yield; 12–16% IRR.
- Asset class: Lake Travis hospitality — hotels and resort product with a value-add renovation thesis.
- Ideal investor: conservative investors, retirees, income-focused portfolios seeking current yield.
- Distributions: quarterly, beginning within 1–2 quarters of investment.
- Fund structure: 506(c) Regulation D; fund life 10 years; hold period 5 years; 401K / IRA eligible; Schedule K1.
- Capital stack: $50M total — $20M of debt already secured · $30M equity raise under way.
- Time to close: 60–120 days.
The defining feature of this fund is the combination of (a) already-secured senior debt reducing first-dollar capital risk, (b) near-term stabilised cash distributions beginning within two quarters, and (c) exposure to a destination lake-hospitality market with both daily-rate growth and renovation-driven NOI uplift.
02
Strategy
Value-Add Hospitality on Lake Travis
The fund executes a repeatable three-lever value-add playbook on acquired hospitality assets:
- Lever 1 — Physical upgrade: targeted renovation of guestrooms, F&B outlets, and exterior / amenity areas to re-position each asset into a higher ADR (average daily rate) tier. Investment is disciplined — upgrades only where documented rate uplift supports the capex.
- Lever 2 — Operational repricing: revenue-management, channel-mix optimisation, and direct-booking programs to capture daily-rate growth. Lake Travis sees structural demand from Austin metro visitation, corporate retreats, and destination weddings — all segments that reward active revenue management.
- Lever 3 — F&B and experience monetisation: lake-adjacent F&B, events, and seasonal programming build non-room revenue streams that lift total RevPAR and support stabilised NOI.
Across the three levers, stabilised NOI uplift is the principal driver of both quarterly cash yield and terminal exit value. The 5-year hold is sized to capture full physical repositioning plus multi-year rate compounding.
03
Market
Lake Travis & the Austin Destination Economy
Austin MSA Population
~2.5M
Top-growth U.S. metro
Lake Travis
63 miles
Shoreline · premier lake
Demand Drivers
Multi-segment
Leisure · corp · weddings
Texas Tax Regime
No state income tax
Operating margin friendly
Why Lake Travis Specifically
Lake Travis is the premier inland-lake destination serving the greater Austin visitor economy. Structural demand is supported by a combination of Austin MSA population growth, corporate expansion into Central Texas, and a year-round wedding / retreat calendar. The lake-adjacent hospitality sub-market has limited new supply due to shoreline entitlement constraints — creating durable pricing power for existing well-positioned assets.
04
Fund Structure
Terms, Capital Stack & Investor Economics
Total Fund Size$50M
Debt Secured$20M
Equity Raise (underway)$30M
Offering Type506(c) Regulation D
Investor EligibilityAccredited investors only
Target Annual Cash Yield7–12%
Target IRR12–16%
Fund Life10 years
Hold Period per Asset5 years
Distribution FrequencyQuarterly
First DistributionWithin 1–2 quarters of investment
Time to Close60–120 days
Tax ReportingSchedule K1
Retirement Eligibility401K / IRA
Debt Already Secured
$20M of senior debt is already secured against the fund's targeted asset pool. This materially reduces time-to-deployment risk on investor equity: capital is not sitting idle while financing is sourced, accelerating the path to the first quarterly distribution.
05
Use of Proceeds
Indicative $30M Equity Deployment Plan
| Allocation | Indicative | Purpose |
|---|
| Hospitality Asset Acquisition (Equity) | ~$18M | Paired with $20M secured debt for ~$38M asset purchase capacity |
| Value-Add Renovation Capex | ~$7M | Guestrooms, F&B, amenity repositioning |
| F&B / Experience Program Launch | ~$1.5M | Lake-adjacent F&B, events, seasonal programming |
| Working Capital & Distribution Reserve | ~$2M | Supports first-two-quarter distribution cadence |
| Soft Costs / Closing / Legal / Fund Admin | ~$1.5M | Cross-deal |
| Total Equity Raise | $30M | Paired with $20M debt already secured |
06
Cash Flow Path
How Quarterly Distributions Ramp
Quarter 1–2
Acquire
Close asset · deploy equity
Quarter 2–3
First Distribution
Quarterly payout begins
Year 1–2
Reposition
Value-add capex · rate uplift
Year 3–5
Stabilised Yield
7–12% cash yield compounding
Year 5
Exit
Asset sale · terminal IRR
Distribution Discipline
Quarterly distributions are designed to begin within 1–2 quarters of investment, enabled by acquiring already-cash-flowing hospitality assets rather than ground-up development. This is a core structural differentiator from the Notre Dame and Texas BTR funds, which are ramp-stage (pre-stabilisation) vehicles.
07
Risk Framework
Identified Risks & Mitigants
MEDIUM
Hospitality demand cyclicality
Mitigant: Lake Travis demand is multi-segment (leisure, corporate, weddings/events), reducing single-segment cyclical exposure. Diversified F&B and experience revenue streams further reduce reliance on pure room-night RevPAR.
LOWER
Financing risk on acquisition
Mitigant: $20M of debt is already secured. The fund does not carry open-ended financing execution risk between equity close and asset close.
MEDIUM
Renovation cost and schedule risk
Mitigant: Value-add capex is phased — starting with the highest-ROI guestroom upgrades first, funded in staged tranches rather than all at once. Properties remain open during renovation wherever possible to protect ongoing cash flow.
MEDIUM
Interest-rate sensitivity on secured debt
Mitigant: Debt terms are locked as part of the already-secured $20M facility. Return targets quoted to the LP equity incorporate the as-secured debt-service assumption; variable-rate exposure is limited to any incremental project-level tranches.
LOWER
Supply / competitive risk on Lake Travis
Mitigant: New-supply growth on the Lake Travis shoreline is materially constrained by entitlement limitations. Existing well-located assets benefit from durable pricing power — a structural advantage for the fund's value-add thesis.
LOWER
Weather / seasonality risk
Mitigant: Quarterly distribution targets and operating pro-formas incorporate normalised seasonality. Diversified revenue streams (F&B, events, weddings, corporate) smooth pure lake-leisure seasonality.
Financial model & pro-forma detail
Stabilised NOI model, quarterly distribution cadence, renovation-capex waterfall, and exit scenarios available on the Financials page.
Disclaimer · Confidential Business Plan
Strictly Confidential
This Business Plan for the K7 Real Estate Income Fund (Austin Hospitality) is confidential and for the exclusive use of the authorised recipient. This is a 506(c) Reg D offering limited to accredited investors under U.S. securities laws. Forward-looking statements involve risks and uncertainties; actual results may differ materially.