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This statistic highlights Sachem Capital’s Revenue by Segment, across Income from Partnership Investment, Investment Income, Late and Other Fees, Origination Fees, Processing Fees, Rental Income and Other Fees, from Q1 2016 onwards.
|Segment||2022 Q1||2022 Q2||2022 Q3||2022 Q4||2023 Q1||Contribution (2023 Q1)|
|Debt Forgiveness (deprecated)|
|Gain (loss) on sale of investment securities||-154,135||5,570||-1,076,800||-1,738,395||716,380||4.87%|
|Income from partnership investment||272,488||317,004||523,100||696,972||549,723||3.74%|
|Interest income from loans||8,511,375||10,433,572||11,545,800||12,128,070||10,983,320||74.68%|
|Late and other fees||128,864||117,676||641,700||-472,512||–||0.00%|
|Net gain on sale of real estate (deprecated)|
|Rental income (loss), net||10,042||18,158||–||37,647||–||0.00%|
Gain (loss) on Sale of Investment Securities
This segment experienced a positive contribution of $716,380, accounting for 4.87% of the total revenue. Compared to the previous quarters, Q1 2023 shows an improvement from the losses incurred in Q2 and Q4 of 2022. The gain suggests successful investment decisions during this period.
Income from Partnership Investment
With a contribution of $549,723, or 3.74% of total revenue, this segment remained relatively stable in Q1 2023 compared to the previous quarters. The consistent performance indicates a reliable source of income from their partnerships.
Interest Income from Loans
This segment generated the highest contribution of $10,983,320, representing a significant 74.68% of total revenue. Although slightly lower than the previous quarter’s figures, it remains the primary revenue driver for Sachem Capital Corp. The decrease could be attributed to factors such as changes in interest rates or adjustments in the loan portfolio.
Q1 2023 saw a positive contribution of $274,790, accounting for 1.87% of total revenue. This segment experienced a recovery from the loss incurred in Q4 2022. The rebound suggests improved performance in their investment activities.
Late and Other Fees
This segment did not contribute any revenue in Q1 2023. It is worth noting that while it generated revenue in the previous quarters, the absence of revenue in this period might be attributed to factors such as changes in fee structures or the repayment behavior of borrowers.
With a contribution of $1,475,920, or 10.03% of total revenue, this segment remained consistent in Q1 2023 compared to previous quarters. Origination fees represent a significant portion of Sachem Capital Corp’s revenue and continued to contribute steadily during this period.
Q1 2023 saw a contribution of $707,600, accounting for 4.81% of total revenue. This segment experienced a recovery from the negative figure reported in Q4 2022. The increase suggests improved performance or the inclusion of new sources of income.
Processing Fees and Rental Income (loss), net.
These segments did not contribute any revenue in Q1 2023. Their absence might be due to factors such as changes in business operations or the nature of their loan portfolio.
Overall, Q1 2023 demonstrated a strong revenue performance for Sachem Capital Corp, with increases in some segments and improved results compared to the previous quarters. The fluctuations in revenue can be attributed to various factors such as investment decisions, changes in interest rates, adjustments in fee structures, and the performance of their loan portfolio. Sachem Capital Corp continues to rely heavily on interest income from loans and origination fees as their primary revenue sources, while diversifying their income streams through other segments.
Sachem Capital Corp, incorporated in 2010 and headquartered in Branford, Connecticut, is a real estate finance company specializing in short-term loans secured by first mortgage liens on real property. Their loans, commonly known as “hard money loans,” are primarily used by real estate investors and developers for property acquisition, renovation, rehabilitation, and development projects. While their lending activity was initially concentrated in Connecticut and surrounding states, the company has significantly expanded its geographic footprint in recent years, with loans spread across 16 states by December 2022.
Historically, Sachem Capital Corp focused on smaller loans under $500,000, but their strategy has shifted to actively pursue larger loans. Despite this shift, they still maintain a substantial percentage of smaller loans in their portfolio. The loans typically have a maximum initial term of one to three years and carry fixed interest rates ranging from 5.0% to 14.2% per year, with a default rate of up to 18% per year.
Revenue generation for Sachem Capital Corp comes from origination fees, interest income, and various other fees related to loan underwriting, funding, and management. They carefully evaluate loan-to-value ratios, considering factors such as collateral value, credit profile, borrower history, and local real estate market conditions to mitigate risk. The company also imposes limits on the maximum loan amount to a single borrower or group of affiliated borrowers, and any loan exceeding $5 million requires board approval.
Sachem Capital Corp primary objective is to grow their loan portfolio while protecting and preserving capital, with a focus on providing attractive risk-adjusted returns to their shareholders. They aim to achieve this through a two-pronged strategy: accelerating profitable growth and driving operational excellence to reduce general and administrative expenses as a percentage of revenue. By selectively originating loans and managing their portfolio, they aim to generate attractive risk-adjusted returns across various market conditions and high-growth geographies.
Despite the market opportunity for hard money lending, Sachem Capital Corp faces challenges. Rising interest rates have made it more difficult and costly to raise funds, impacting their margins. Additionally, property value fluctuations due to interest rate increases pose risks to their loan portfolio. The company mitigates these risks by focusing on borrower creditworthiness and closely monitoring their loan portfolio.
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