Income Opportunity Realty Investors, Inc. (IOR): Business Model Canvas [11-2024 Updated]
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Income Opportunity Realty Investors, Inc. (IOR) Bundle
Understanding the Business Model Canvas of Income Opportunity Realty Investors, Inc. (IOR) unveils how this company strategically navigates the real estate market to generate income and value for its investors. By leveraging key partnerships, efficient management practices, and a diverse revenue stream, IOR is positioned to cater to both institutional and individual investors. Dive into the specifics of IOR's model below and discover how it maximizes opportunities in real estate investments.
Income Opportunity Realty Investors, Inc. (IOR) - Business Model: Key Partnerships
Collaborates with Pillar Income Asset Management
Income Opportunity Realty Investors, Inc. (IOR) operates under an advisory agreement with Pillar Income Asset Management, Inc. (Pillar). This agreement outlines Pillar's responsibilities, which include locating, evaluating, and recommending real estate and real estate-related investment opportunities for IOR.
Pillar also arranges debt and equity financing with third-party lenders and investors. As of September 30, 2024, advisory fees paid to Pillar were $26,000 for the three months ended and $76,000 for the nine months ended.
Engages in transactions with related parties
IOR engages in various business transactions with related parties, primarily involving investment in notes receivable. As of September 30, 2024, receivables from related parties amounted to $109,493,000, reflecting advances made to Pillar. The interest income from related party receivables was $1,464,000 and $4,336,000 for the three and nine months ended September 30, 2024, respectively.
Moreover, related party transactions may not always occur at arm's length, which can lead to terms that are not necessarily favorable to IOR. For example, the interest on notes receivable from Unified Housing Foundation, Inc. (UHF), another related party, had been restructured to a floating rate indexed to SOFR.
Works with third-party lenders for financing
IOR collaborates with third-party lenders to secure financing for its operations. The company has a history of utilizing various financing methods, which include mortgage notes receivable. As of September 30, 2024, IOR reported total assets of $120,817,000, with significant contributions from receivables and notes.
The company’s financial strategy includes managing its liquidity needs through collections of mortgage notes and related party receivables, ensuring sufficient cash flow to meet its obligations.
| Partnership Type | Entity Name | Financial Impact |
|---|---|---|
| Advisory Services | Pillar Income Asset Management | Advisory fees: $26,000 (3 months), $76,000 (9 months) |
| Related Party Transactions | Unified Housing Foundation | Receivables: $109,493,000; Interest income: $1,464,000 (3 months) |
| Financing | Various Third-Party Lenders | Total assets: $120,817,000 |
Income Opportunity Realty Investors, Inc. (IOR) - Business Model: Key Activities
Manages investment opportunities in real estate
Income Opportunity Realty Investors, Inc. (IOR) focuses on managing investment opportunities primarily in mortgage notes receivable that are secured by income-producing properties. As of September 30, 2024, IOR's total assets amounted to $120.8 million, reflecting a slight increase from $118.1 million at the end of 2023.
Evaluates and recommends investments
The company employs an external management team, Pillar Income Asset Management, which is responsible for locating, evaluating, and recommending real estate investment opportunities. In 2024, IOR reported a net income of $3.54 million for the nine months ended September 30, representing a decrease from $4.53 million for the same period in 2023. The advisory fees paid to Pillar for the nine months ended September 30, 2024, were $76,000, down from $1.05 million in the previous year.
Administers mortgage notes receivable
IOR's primary revenue source comes from interest income derived from related party receivables. For the nine months ended September 30, 2024, interest income from related party receivables was $4.79 million, a decrease from $7.16 million in the same period in 2023. As of September 30, 2024, the company holds notes receivable from related parties totaling $11.15 million.
| Financial Metrics | As of September 30, 2024 | As of December 31, 2023 | Change |
|---|---|---|---|
| Total Assets | $120.8 million | $118.1 million | +1.4% |
| Net Income (9 months) | $3.54 million | $4.53 million | -21.9% |
| Interest Income (9 months) | $4.79 million | $7.16 million | -33.2% |
| Notes Receivable | $11.15 million | $11.17 million | -0.2% |
Income Opportunity Realty Investors, Inc. (IOR) - Business Model: Key Resources
Financial assets from related parties
As of September 30, 2024, Income Opportunity Realty Investors, Inc. (IOR) reported receivables from related parties totaling $109,493 thousand, compared to $106,541 thousand at December 31, 2023. This represents amounts outstanding advanced to Pillar Income Asset Management, Inc. net of unreimbursed fees. The interest income from related party receivables for the three months ended September 30, 2024, was $1,464 thousand, a decrease from $2,178 thousand for the same period in 2023. For the nine months ended September 30, 2024, interest income was $4,336 thousand, down from $6,157 thousand in 2023.
Advisory agreements with Pillar
IOR operates under an advisory agreement with Pillar Income Asset Management, Inc., which manages the company's investments in mortgage notes receivable. Advisory fees paid to Pillar amounted to $26 thousand and $76 thousand for the three and nine months ended September 30, 2024, respectively. Comparatively, these figures were $346 thousand and $1,045 thousand for the same periods in 2023. This significant reduction reflects a strategic adjustment in IOR’s operational cost management.
Portfolio of mortgage notes receivable
The total balance of notes receivable from related parties was $11,146 thousand as of September 30, 2024, which is slightly down from $11,173 thousand at the end of the previous year. The notes are primarily secured by properties owned by Unified Housing Foundation, Inc. (UHF). The interest rate on these notes was amended in October 2023 from a fixed rate of 12.0% to a floating rate indexed to the Secured Overnight Financing Rate (SOFR), with rates being 5.33% as of September 30, 2024, and 5.31% as of December 31, 2023. The maturity date for these notes remains set for December 31, 2032.
| Financial Metric | September 30, 2024 | December 31, 2023 | September 30, 2023 |
|---|---|---|---|
| Receivables from Related Parties | $109,493 | $106,541 | N/A |
| Interest Income from Related Parties (Q3) | $1,464 | N/A | $2,178 |
| Advisory Fees (Q3) | $26 | N/A | $346 |
| Notes Receivable from Related Parties | $11,146 | $11,173 | N/A |
| Interest Rate on Notes Receivable | 5.33% | 5.31% | 12.0% |
Income Opportunity Realty Investors, Inc. (IOR) - Business Model: Value Propositions
Provides steady income through interest on receivables
Income Opportunity Realty Investors, Inc. (IOR) generates a significant portion of its revenue through interest income from related party receivables. For the nine months ended September 30, 2024, IOR reported interest income of $4,785,000 compared to $7,160,000 for the same period in 2023. This reflects a decrease in interest income, which is primarily attributed to changes in the cash management agreement and the interest rate adjustments on receivables.
Offers investment opportunities in real estate markets
IOR provides investors with opportunities to engage in real estate markets through its mortgage notes receivables, which are secured by income-producing properties. As of September 30, 2024, total assets of IOR stood at $120,817,000, including $11,146,000 in notes receivable from related parties. The company’s strategy to consolidate notes and adjust interest rates enhances its positioning within the real estate investment landscape.
Utilizes expertise in managing real estate investments
The company is externally managed by Pillar Income Asset Management, which plays a critical role in locating and evaluating investment opportunities. For the nine months ended September 30, 2024, IOR incurred advisory fees to related parties amounting to $76,000, down from $1,045,000 in the same period of the previous year. This indicates a strategic focus on cost management while continuing to leverage expertise in real estate investment management.
| Financial Metrics | 2024 (Nine Months Ended Sept 30) | 2023 (Nine Months Ended Sept 30) |
|---|---|---|
| Interest Income | $4,785,000 | $7,160,000 |
| Total Assets | $120,817,000 | $118,078,000 |
| Notes Receivable from Related Parties | $11,146,000 | $11,173,000 |
| Advisory Fees Paid | $76,000 | $1,045,000 |
| Net Income | $3,538,000 | $4,527,000 |
Income Opportunity Realty Investors, Inc. (IOR) - Business Model: Customer Relationships
Maintains ongoing communication with investors
Income Opportunity Realty Investors, Inc. (IOR) prioritizes ongoing communication with its investors through various channels. The company utilizes regular newsletters, quarterly earnings calls, and investor meetings to ensure that stakeholders are informed about the latest developments and performance metrics. This approach not only keeps investors engaged but also fosters a sense of trust and transparency.
Provides regular updates on financial performance
IOR provides quarterly financial updates to its investors, detailing key performance indicators such as net income, operating expenses, and interest income. For the three months ended September 30, 2024, IOR reported a net income of $1,198,000, compared to $1,643,000 for the same period in 2023. The company’s total operating expenses for the third quarter of 2024 were $97,000, down from $437,000 in 2023.
| Financial Metrics | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Income | $1,198,000 | $1,643,000 |
| Total Operating Expenses | $97,000 | $437,000 |
| Earnings Per Share (EPS) | $0.29 | $0.39 |
Engages in transparent reporting practices
IOR emphasizes transparent reporting practices to maintain investor confidence. The company adheres to strict regulatory requirements by providing detailed disclosures in its quarterly and annual reports. As of September 30, 2024, IOR reported total assets of $120,817,000 and total shareholders' equity of $120,814,000, reflecting a strong balance sheet.
| Balance Sheet Metrics | As of September 30, 2024 | As of December 31, 2023 |
|---|---|---|
| Total Assets | $120,817,000 | $118,078,000 |
| Total Shareholders' Equity | $120,814,000 | $118,078,000 |
| Cash and Cash Equivalents | $14,000 | $71,000 |
Income Opportunity Realty Investors, Inc. (IOR) - Business Model: Channels
Utilizes the NYSE American Exchange for stock trading
Income Opportunity Realty Investors, Inc. (IOR) is publicly traded on the NYSE American Exchange under the ticker symbol 'IOR'. As of November 7, 2024, there were 4,066,178 shares of common stock outstanding . The company has a stock repurchase program that allows for the repurchase of up to 1,650,000 shares of its common stock, with 513,003 shares remaining available for repurchase as of September 30, 2024.
Distributes financial reports and updates through SEC filings
IOR complies with SEC regulations by filing quarterly reports, including Form 10-Q and annual reports on Form 10-K. For the quarter ended September 30, 2024, the company reported a net income of $1,198,000, compared to $1,643,000 for the same period in 2023. The company also reported total assets of $120,817,000 and total liabilities of $3,000 as of September 30, 2024. These filings provide investors with critical insights into the company’s financial performance and operational updates.
Engages investors through direct communications
IOR actively engages with its investors through direct communications, including updates on financial performance and strategic initiatives. The company’s management discusses significant fluctuations in financial results, such as a decrease in interest income from related party receivables, which impacted net income. Investors are informed of such changes through press releases and investor relations sections on the company’s website, ensuring transparency and fostering investor confidence.
| Financial Metrics | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Net Income | $1,198,000 | $1,643,000 | $3,538,000 | $4,527,000 |
| Total Assets | $120,817,000 | - | - | - |
| Total Liabilities | $3,000 | - | - | - |
| Earnings per Share (Basic and Diluted) | $0.29 | $0.39 | $0.87 | $1.09 |
Income Opportunity Realty Investors, Inc. (IOR) - Business Model: Customer Segments
Institutional investors seeking real estate exposure
Income Opportunity Realty Investors, Inc. (IOR) primarily targets institutional investors who are looking for reliable real estate exposure. This includes pension funds, insurance companies, and mutual funds that allocate a portion of their portfolios to real estate investments. As of September 30, 2024, IOR reported total assets of $120.8 million, with significant portions allocated to real estate-related investments.
Individual investors interested in income-producing assets
IOR also caters to individual investors who seek income-generating assets. The company provides opportunities for retail investors to gain exposure to real estate through its income-producing properties. For the nine months ended September 30, 2024, IOR reported a net income of $3.54 million, reflecting its ability to generate consistent returns for individual shareholders.
Related parties involved in real estate transactions
Additionally, IOR engages with related parties involved in real estate transactions. This includes partnerships with entities like Pillar Income Asset Management, which manages IOR’s investments and operations. As of September 30, 2024, IOR had receivables from related parties amounting to $109.5 million, indicating a strong reliance on relationships with these entities for operational support and investment opportunities.
| Customer Segment | Description | Financial Data (as of Sept 30, 2024) |
|---|---|---|
| Institutional Investors | Seeking reliable real estate exposure | Total Assets: $120.8 million |
| Individual Investors | Interested in income-producing assets | Net Income: $3.54 million |
| Related Parties | Engaged in real estate transactions | Receivables from Related Parties: $109.5 million |
Income Opportunity Realty Investors, Inc. (IOR) - Business Model: Cost Structure
General and Administrative Expenses
As of September 30, 2024, the general and administrative expenses for Income Opportunity Realty Investors, Inc. amounted to $71,000 for the three months ended and $230,000 for the nine months ended. For the same periods in 2023, these expenses were $91,000 and $385,000, respectively. The decrease in general and administrative expenses year-over-year reflects a strategic effort to manage costs more effectively.
| Period | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| General and Administrative Expenses | $71,000 | $91,000 | $230,000 | $385,000 |
Advisory Fees Paid to Pillar
The advisory fees paid to Pillar Income Asset Management, LLC, which manages the operations of IOR, were $26,000 for the three months ended September 30, 2024, down from $346,000 for the same period in 2023. For the nine months ended September 30, 2024, advisory fees totaled $76,000, compared to $1,045,000 for the nine months ended in 2023. This significant reduction indicates a restructuring of advisory costs in line with overall expense management.
| Period | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Advisory Fees | $26,000 | $346,000 | $76,000 | $1,045,000 |
Costs Associated with Legal and Compliance Activities
Legal and compliance costs are integral to the operations of IOR. For the nine months ended September 30, 2024, these costs were included within the general and administrative expenses. The company has not explicitly detailed these costs separately, but they are encompassed in the total operating expenses of $306,000 for the nine months ended September 30, 2024, down from $1,430,000 in the same period of the previous year. This reduction is indicative of improved legal cost management and operational efficiency.
| Period | Total Operating Expenses |
|---|---|
| 9M 2024 | $306,000 |
| 9M 2023 | $1,430,000 |
Income Opportunity Realty Investors, Inc. (IOR) - Business Model: Revenue Streams
Interest income from related party receivables
For the three months ended September 30, 2024, Income Opportunity Realty Investors, Inc. (IOR) reported interest income from related party receivables of $1,614,000, a decrease from $2,516,000 for the same period in 2023. For the nine months ended September 30, 2024, the interest income was $4,785,000 compared to $7,160,000 for the same period in 2023.
| Period | Interest Income (in thousands) |
|---|---|
| Three Months Ended September 30, 2024 | $1,614 |
| Three Months Ended September 30, 2023 | $2,516 |
| Nine Months Ended September 30, 2024 | $4,785 |
| Nine Months Ended September 30, 2023 | $7,160 |
Income generated from mortgage notes
IOR's income from mortgage notes is a significant revenue stream. As of September 30, 2024, the company had notes receivable from related parties totaling $11,146,000, down slightly from $11,173,000 at the end of 2023. The interest rates on these notes were adjusted to a floating rate indexed to the Secured Overnight Financing Rate (SOFR) as of January 1, 2024. The new interest rate as of September 30, 2024, was approximately 5.33%.
Advisory fees from investment transactions
Advisory fees are another revenue source for IOR, primarily paid to Pillar Income Asset Management, Inc., a related party. For the three months ended September 30, 2024, advisory fees amounted to $26,000, a significant decline from $346,000 in the same period in 2023. For the nine months ended September 30, 2024, advisory fees were $76,000, compared to $1,045,000 for the same period in 2023.
| Period | Advisory Fees (in thousands) |
|---|---|
| Three Months Ended September 30, 2024 | $26 |
| Three Months Ended September 30, 2023 | $346 |
| Nine Months Ended September 30, 2024 | $76 |
| Nine Months Ended September 30, 2023 | $1,045 |
Updated on 16 Nov 2024
Resources:
- Income Opportunity Realty Investors, Inc. (IOR) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Income Opportunity Realty Investors, Inc. (IOR)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Income Opportunity Realty Investors, Inc. (IOR)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.