Reawaken Capital Investor Report - Q3 2024

Reawaken Capital Investor Report - Q3 2024

Reawaken Capital Investor Report

Q3 2024

Date Prepared: 11/8/24 Reporting Period: July - October 2024


Executive Summary

Reawaken Capital officially began operations in July 2024. Since then, we have closed on 16 properties across multiple high-growth markets in Atlanta, GA; Pittsburgh, PA; Kansas City, MO; and Indianapolis, IN. This initial phase has outperformed our initial projected targets by almost 100%, and we are pleased to report promising early returns for our investors. 

We are excited to share our progress, key acquisitions, and financial performance in this report.


Investment Highlights

  • Atlanta Portfolio: Acquired six off-market properties with two more pending. The remaining two properties are expected to close shortly, pending seller-completed repairs.
  • Pittsburgh, PA: Closed on two Section 8 properties with strong rental income stability. We have two more in the pipeline.
  • Kansas City, MO and Indianapolis, IN (Anderson): Acquired a selection of long-term rentals positioned for stable cash flow.


Atlanta Case Study

Reawaken Capital is acquiring a portfolio of eight off-market properties (61 units) strategically located across Atlanta’s growing neighborhoods. Acquired at a significant discount compared to their estimated market value, these properties provide immediate equity gains and strong long-term cash flow potential.

Financial Breakdown

  • Purchase Price: $1,775,000
  • Previous Sale Price (2022): $2,375,000
  • Down Payment (30%): $532,500
  • Loan Terms: 30-year mortgage at 7.25% interest
  • Closing Costs & Inspections: $56,725
  • Rehabilitation Costs: $48,743
  • Total Out of Pocket: $637,968

Investment Returns

  • Equity Gain at Close: $600,000
  • Return on Capital from Equity Gain: 94%
  • Annual Net Operating Income (NOI): $269,930
  • Cap Rate: 15.2%
  • Expected Annual Appreciation: 6% 
  • 10-Year Average Return: 24.7%

Cash-on-Cash Returns

  • Year 1: 11.6%
  • Year 2: 10.8%
  • Year 3+: 14.8%

Summary

This portfolio of eight off-market properties in Atlanta presents an exceptional opportunity for both immediate and long-term gains. The significant purchase price discount, paired with the potential for renovation and the robust demand for rental properties in the Atlanta metro area, demonstrates Reawaken Capital's ability to generate strong returns for our investors. By strategically acquiring under-market assets and enhancing their value, we are setting the stage for impressive appreciation and consistent cash flow, ensuring sustainable wealth generation for years to come.


Reawaken Capital Financial Summary

  • Projected Gross Rental Income (GRI): $626,700.00
  • Projected Operating Expenses: $143,957.00
  • Initial Target Return: 15-18%
  • Current ROE: 25.45%
  • Current Average Cap Rate: 11.79%
  • Current Market Value of Assets:  $4,093,000.00 
  • Projected Average Cash-on-Cash Return (Year 1): 16.46%


Market Commentary

  • Atlanta, GA: Strong demand in the rental market, favorable cap rates, and consistent appreciation trends make Atlanta a key target for further expansion.
  • Pittsburgh, PA: The Section 8 market remains a stable source of income with relatively low vacancy risk.
  • Kansas City, MO & Indianapolis, IN: Steady rental demand offers attractive returns and low risk, supporting portfolio diversification.
  • Easing interest rates are a potential opportunity as we look forward to our debt options next year.


Looking Ahead

  • Property Management Initiatives: Implementing a proactive property management approach with regular updates on repair and maintenance for all assets.
  • Rent Stabilization: We will be stabilizing rents on our new acquisitions through Q1 2025 improving overall cash flows. 
  • Next Acquisitions: We have identified a similar acquisition to the one we just closed on in Atlanta and plan to pursue pending the completion of this transaction. 
  • Cost Reduction: We will evaluate and pursue opportunities to lower costs and thereby increase returns by moving some aspects of property management in-house.


Thank you for your continued support and trust in Reawaken Capital. We look forward to delivering sustained growth and value for our stakeholders. - Dylan Peters


Forward-Looking Statements

The statements contained herein may contain certain forward-looking statements relating to Reawaken Capital, LLC (the “Fund”) that are based on the beliefs of the Fund’s management as well as assumptions made by and information currently available to the Fund’s management. These forward-looking statements are, by their nature, subject to significant risks and uncertainties. These forward-looking statements include, without limitation, statements relating to the Fund’s investment prospects, future developments, trends and conditions in the industry and geographical markets in which the Fund operates, its strategies, plans, objectives and goals, operations, rental income, weather events, overall market trends, risk management and interest rates.

When used herein, the words “anticipate”, “believe”, “could”, “estimate”, “expect”, “going forward”, “intend”, “may”, “ought to”, “plan”, “project”, “seek”, “should”, “will”, “would” and similar expressions, as they relate to the Fund or the Fund’s management, are intended to identify forward-looking statements. These forward-looking statements reflect the Fund’s views at the time such statements were made with respect to future events and are not a guarantee of future performance or developments. You are strongly cautioned that reliance on any forward-looking statements involves known and unknown risks and uncertainties. Actual results and events may differ materially from information contained in the forward-looking statements as a result of a number of factors, including any changes in the laws, rules and regulations relating to any aspects of the Fund’s business operations, general economic, market and business conditions, changes or volatility in interest rates, the actions and developments of the Fund’s competitors and changes in the supply and demand for housing, changes in population growth and other demographic trends, including mortality, morbidity and longevity rates, persistency levels, the Fund’s ability to identify, measure, monitor and control risks in the Fund’s investments, including its ability to manage and adapt its overall risk profile, its ability to properly price its investments and establish reserves for future unforeseen events, and factors beyond the Group’s control. The Fund does not intend to update or otherwise revise such forward-looking statements, whether as a result of new information, future events or otherwise. As a result of these and other risks, uncertainties and assumptions, forward-looking events and circumstances discussed herein might not occur in the way the Fund expects, or at all. Accordingly, you should not place reliance on any forward-looking information or statements. All forward-looking statements herein are qualified by reference to the cautionary statements set forth in this section.

Shoya Matsumori

Founder and CEO @ Carnot Inc. | Ph.D. in CS

1mo

Amazing Dylan!

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Maciej Popielarz

Director of Innovation Programs and Cybersecurity | 👨💻 Startup Advisor | 2x Ex-Founder- 1 Exit | 🏎 Aerial Maverick | MIT Delta V 19

1mo

Great work, Dylan! 16 properties and beating projections—excited to see what’s next!

Freddie Spann

Helping RE & PE investment firms build trust with their investors, automate operations and accelerate growth

1mo

Nice work man Congrats 🎊

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