Financials · Income Fund Pro-Forma
K7 Income Fund
Financial Model
Fund-level financial pro-forma for the K7 Real Estate Income Fund, targeting value-add hospitality assets on Lake Travis, Austin. $50M total capital: $20M of senior debt already secured, $30M equity raise under way. Conservative income-focused return profile: 7–12% annual cash yield, 12–16% IRR, quarterly distributions.
Fund Financials
Total Fund Size$50M
Debt Secured$20M
Equity Raise$30M underway
Target Annual Cash Yield7–12%
Target IRR12–16%
Fund Life10 years
Hold per Asset5 years
Distribution FrequencyQuarterly
First DistributionWithin 1–2 quarters
Retirement Eligible401K / IRA
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Fund Economics
K7 Real Estate Income Fund · $50M Terms
| Austin Hospitality Fund (USD) | Amount |
|---|
| Fund Size | $50M |
| Debt Secured | $20M |
| Equity Raise Under Way | $30M |
| Target Location | Lake Travis · Austin, TX |
| Product Type | Value-Add Hospitality |
| Target IRR | 12–16% |
| Target Annual Cash Yield | 7–12% |
| Fund Life | 10 years |
| Holding Period | 5 years |
| Distribution Frequency | Quarterly · starting within 1–2 quarters |
| Tax Documentation | Schedule K1 · 401K / IRA eligible |
| Time to Close | 60–120 days |
| Regulatory Structure | 506(c) Reg D · 3(c)5 |
Fund Mechanics
The Income Fund is positioned as the conservative income-focused vehicle in the K7 portfolio. $20M of senior debt is already secured, leaving $30M equity to be raised. Lake Travis hospitality assets are targeted for both renovation-driven NOI uplift and long-term daily-rate growth. Quarterly distributions begin within 1–2 quarters of investment, with capital preservation as the primary mandate and 12–16% IRR as the secondary return driver.
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Capital Stack
Sources & Uses — $50M Total Capital
| Austin Hospitality (USD) | Amount | % |
|---|
| Sources |
| Senior Debt (secured) | $20M | 40% |
| LP Equity (raise underway) | $30M | 60% |
| Total Sources | $50M | 100% |
| Uses |
| Hospitality Asset Acquisition (Equity Portion) | ~$18M | 36% |
| Senior Debt Deployed Against Acquisition | ~$20M | 40% |
| Value-Add Renovation Capex | ~$7M | 14% |
| F&B / Experience Program Launch | ~$1.5M | 3% |
| Working Capital & Distribution Reserve | ~$2M | 4% |
| Soft Costs / Closing / Legal / Fund Admin | ~$1.5M | 3% |
| Total Uses | $50M | 100% |
Acquisition capacity of ~$38M (equity + debt combined) produces leverage ratios in line with institutional hospitality norms for value-add strategies.
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Cash Yield Path
Quarterly Distribution Build-Up
Q1–Q2
Acquire
Close · deploy equity + debt
Q2–Q3
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
Why Distributions Start Early
Acquired assets are already cash-flowing at acquisition. The fund does not require stabilisation-from-zero; it accelerates existing cash flow by layering the three-lever value-add playbook on top of operating NOI. The $20M of already-secured debt means equity is not idle while financing is sourced, further compressing the time from close to first distribution.
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Scenario Analysis
Low / Base / High Outcomes
Low Case
~7% yield
~12% IRR · conservative
Base Case
~9–10% yield
~14% IRR · mid-range
High Case
~12% yield
~16%+ IRR · full value-add
Scenario Sensitivity
Low-case assumes flat ADR growth, extended renovation timelines, and modest F&B uplift. High-case assumes full execution of the three-lever value-add (physical upgrade, operational repricing, F&B / experience monetisation) plus sustained Austin tourism growth and cap-rate stability at exit.
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Key Assumptions
Pro-Forma Assumption Ledger
Secured debt termsFixed — locked at $20M facility
Debt / total capital40%
Acquisition timingQuarter 1–2 post-close
First cash distributionWithin 1–2 quarters
Renovation timeline12–24 months · phased
Stabilised ADR growth (base)3–4% p.a.
Stabilised hotel NOI margin28–34%
Base-case exit cap rate~7.25%
High-case exit cap rate~6.5%
LP preferred return8% (typical)
LP / GP waterfall split above preferred80 / 20 (typical)
Complete due-diligence package
Asset-level underwriting, renovation capex waterfall, Lake Travis hospitality comps, STR/ADR benchmarks, and full sensitivity analyses available on request to accredited investors.
Disclaimer · Confidential Financial Model
Projected Financials · Forward-Looking
All financial figures for the K7 Real Estate Income Fund (Austin Hospitality) are projected and forward-looking, based on management assumptions regarding hospitality ADR, occupancy, renovation cost, and macro conditions. Actual results may differ materially. This is a 506(c) Reg D offering limited to accredited investors. Investment involves risk of loss of principal.
K7 Capital Partners · 2025 Guadalupe Street, Suite 260, Austin, TX 78705 · www.k7capitalpartners.com