Investor letter
Drafted from the books below and rewritten whenever the data, the notes or the distribution change. Click any underlined figure to see where it comes from. Edit the draft directly before release.
Performance against plan
Investors only get commentary on variances big enough to matter. A line is flagged when its quarter variance against plan is over both limits, so a 40% miss on a small line or a $3,000 miss on a large one is not. Flagged lines are highlighted below and need a manager explanation before the letter goes out.
Budget to actual NOI
Quarter NOI, line by line. Click a bar to open its commentary.
Variance commentary & reforecast
The property manager's explanation for each material variance, as it will read in the letter. Classify each one: timing variances reverse later in the year, one-time items are excluded from run-rate NOI, and run-rate changes carry into the forecast.
Projected returns
The question every investor asks: are we still on track? Actual results to date plus the reforecast, carried to a sale at the end of the five-year hold, against the original underwriting.
Cumulative cash to investors
Net of the initial investment, by quarter. Hover for detail.
Business plan
Monthly results since acquisition against the budget and the original underwriting, with the renovation program that drives the plan. The reporting quarter is shaded.
Last quarter's priorities
What the previous letter said we would do, and what happened. Set each status; it goes into the letter.
Monthly NOI
Renovated units, cumulative
Occupancy and renovated premium
Capital & financing
Cash from NOI to distribution for the quarter, the floating-rate loan and its covenants, and capital spending against the renovation budget.
Quarter cash flow
Loan
Capital budget, spent to date
Distributions & capital accounts
Size the quarter's distribution against cash flow and the reserve. Allocations, preferred return and every investor's statement follow.
Distributions and preferred return
Estimated net asset value
All investors
Investor call prep
The questions this quarter's results will raise, ranked by how likely an investor is to ask, each with a drafted answer built from the figures above. Answers update with the data.
Ask about this quarter
Claude answers from this quarter's figures only, as an investor relations draft. Review before sending.
Source books
The quarter's monthly operating statements as closed by the property manager. Change any actual to test the workflow: the variance test, commentary, forecast, distribution checks and letter all rerun.
Method: actuals are compared with the annual budget approved for each year and with the acquisition underwriting, month by month. A line is material when its quarter variance exceeds both the percentage and dollar thresholds. NOI excluding one-time items removes the variance on every line classified one-time. The full-year forecast is year-to-date actual NOI plus budget for the remaining months, plus each run-rate variance carried for the remaining quarters, less timing variances expected to reverse. Debt service is interest-only on a floating-rate loan at SOFR plus the spread, with SOFR capped at the strike; DSCR is quarter NOI over quarter interest. Cash available for distribution is NOI less interest, replacement reserves, the asset management fee and partnership expenses. Operating distributions are paid to all members pro rata and count toward the 8% preferred return, which accrues on contributed capital and is not compounded. Projected returns run quarterly to a sale at the end of a five-year hold (September 2030): the reforecast starts from current run-rate NOI (excluding one-time items and timing variances), adds the renovation premium as units complete at the trailing two-quarter pace, grows rents and expenses 3.5% a year, assumes SOFR of 3.60% on the remaining term, distributes all cash flow, and sells at the exit cap on forward NOI less 2% costs; the underwriting case runs the acquisition model's assumptions the same way. Net returns apply an 8% preferred return and a 20% promote above it. The NAV mark capitalizes run-rate NOI (quarter NOI excluding one-time items, annualized) and is an internal estimate, not an appraisal. The property, investors and all figures are fictional. Built by Michael C. Garcia.