Genesis Financial 10-Q 15 May 17 2017 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information	3 Months Ended
	Mar. 31, 2017shares
Document and Entity Information
Entity Registrant Name	Genesis Financial Inc
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
Amendment Flag	false
Entity Central Index Key	1,183,082
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding	17,200,653
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q1
Entity Incorporation, State Country Name	Wyoming
Trading Symbol	gfnl
Entity Incorporation, Date of Incorporation	Jan. 24, 2002

GENESIS FINANCIAL, INC. Balance

GENESIS FINANCIAL, INC. Balance Sheets (Interim period unaudited) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
CURRENT ASSETS:
Cash and cash equivalents	$ 63,928	$ 10,639
Interest and other receivables	6,184	16,748
Investments in real estate limited liability companies	104,729	104,940
Loans held for sale	346,010	347,755
Real estate owned		14,999
Total current assets	520,851	495,081
NON-CURRENT ASSETS:
Long-term investments	362,619	362,619
Real estate leasehold interest, net of accumulated amortization of $75,688 and $70,527, respectively	199,262	204,423
Rental Property, net of accumulated depreciation of $637 and $7,568, respectively	44,363	121,895
Office equipment, net of accumulated depreciation of $7,345 and $6,865, respectively	587	1,067
Total non-current assets	606,831	690,004
Total assets	1,127,682	1,185,085
CURRENT LIABILITIES:
Line of credit, affiliated company	950,000	950,000
Line of credit, bank	170,000	180,000
Note payable	26,002	28,385
Other current liabilities	1,247	1,115
Total current liabilities	1,147,249	1,159,500
STOCKHOLDERS' EQUITY:
Common stock, $.001 par value; 100,000,000 authorized, 17,280,241 and 17,200,653 issued and outstanding, respectively	17,280	17,201
Additional paid-in capital	8,607,510	8,598,531
Accumulated deficit	(8,644,357)	(8,590,147)
Total stockholders' equity	(19,567)	25,585
Total liabilities and stockholders' equity	$ 1,127,682	$ 1,185,085

Statement of Financial Position

Statement of Financial Position - Parenthetical - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Statement of financial position
Preferred Stock, Par Value	$ 1	$ 1
Preferred Stock, Shares Authorized	2,290,000	2,290,000
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Common Stock, Par Value	$ 0.001	$ 0.001
Common Stock, Shares Authorized	100,000,000	100,000,000
Common Stock, Shares Issued	17,280,241	17,200,653
Common Stock, Shares Outstanding	17,280,241	17,200,653
Accumulated depreciation, equipment	$ 7,345	$ 6,865
Accumulated amortization, real estate leasehold interest	75,688	70,527
Accumulated depreciation, rental property	$ 637	$ 7,568

GENESIS FINANCIAL, INC. Condens

GENESIS FINANCIAL, INC. Condensed Statements of Operations and Comprehensive Income (Loss) (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
REVENUE:
Interest, processing fees and other income	$ 3,022	$ 19,530
Rental income	7,125	5,500
Total revenues	10,147	25,030
EXPENSES:
Loss (income) on investment in real estate LLC		(138,111)
(Gain) on sale of loan and REO	(342)	(21,258)
Salaries	9,000	12,750
Interest expense, related party	9,058	2,155
Interest expense, other	2,221	1,536
Financing expense, related party		29,000
Depreciation	769	877
Amortization	5,161	5,161
Rental Property expense	1,897	2,109
Office occupancy and other	36,594	46,802
Total operating (income) expenses	64,356	(58,979)
NET INCOME (LOSS)	(54,209)	84,009
COMPREHENSIVE INCOME (LOSS):
Unrealized loss on available for sale securities		(13,285)
COMPREHENSIVE INCOME (LOSS)	$ (54,209)	$ 70,724
BASIC AND DILUTED EARNINGS (LOSS) PER SHARE	$ 0	$ 0.01
WEIGHTED AVERAGE SHARES BASIC AND DILUTED	17,220,097	16,613,156

GENESIS FINANCIAL, INC. Conden5

GENESIS FINANCIAL, INC. Condensed Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Statement of cash flows
CASH FLOWS FROM OPERATING ACTIVITIES	$ (31,053)	$ (177,660)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of rental property	77,585
Proceeds from sale of real estate owned	19,140
Proceeds from sale of real estate limited liability company		389,934
Net cash provided by investing activities	96,725	389,934
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings (repayment) from line of credit from bank, net	(10,000)	(170,000)
Payments on notes payable	(2,383)	(376)
Net cash (used) by financing activities	(12,383)	(170,376)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	53,289	41,898
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	10,639	31,301
CASH AND CASH EQUIVALENTS AT END OF PERIOD	63,928	73,199
NONCASH INVESTING AND FINANCING TRANSACTIONS
Convertible note payable to officer converted to common stock		$ 250,000
Common stock issued for interest owing on line of credit with affiliate company	$ 9,058

Note 1 - Organization and Summa

Note 1 - Organization and Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2017
Notes
Note 1 - Organization and Summary of Significant Accounting Policies:	NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Organization: Genesis Financial, Inc. (“the Company” or “GFI”) was incorporated in Washington State on January 24, 2002 and on January 26, 2016 we moved our corporate domicile to the State of Wyoming. The Company is primarily engaged in the business of purchasing and selling real estate receivable loans and periodically providing bridge capital funding. Loans consist of real estate loans and mortgage notes collateralized by primarily first position liens on residential and commercial real estate. The loans collateralized by real estate are typically non-conventional either because they are originated as a result of seller financing, or the underlying property is non-conventional. The Company invests in loans using investor funds, equity funds and funds generated from external borrowings including a line of credit facility from an affiliated stockholder. The financial statements of GFI, presented in this Form 10Q are unaudited and reflect, in the opinion of Management, a fair presentation of operations for the three month periods ended March 31, 2017 and 2016. All adjustments of a normal recurring nature and necessary for a fair presentation of the results for the periods covered have been made. Certain information and footnote disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the applicable rules and regulations of the Securities and Exchange Commission. These financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company's Form 10K for the year ended December 31, 2016 as filed with Securities and Exchange Commission. The results of operations for the three months ended March 31, 2017, are not necessarily indicative of the results expected for the full fiscal year or for any other fiscal period. Summary of Significant Accounting Policies: Use of estimates Fair value measurements - the fair value measurement; the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets or liabilities (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3); for fair value measurements using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: a. total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings, and a description of where those gains or losses included in earnings are reported in the statement of operations; b. the amount of these gains or losses attributable to the change in unrealized gains or losses relating to those assets or liabilities still held at the reporting period date and a description of where those unrealized gains or losses are reported; c. purchases, sales, issuances, and settlements (net); and d. transfers into and/or out of Level 3. 4. the amount of the total gains or losses for the period in (3)(a) included in earnings that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date and a description of where those unrealized gains or losses are reported in the statement of operations; and in annual periods only, the valuation technique(s) used to measure fair value and a discussion of changes in valuation techniques, if any, during the period. Real estate leasehold interest – Loans held for sale – Real estate owned – Income tax Earnings per share March 31, 2017 2016 Stock options - 261,000 Convertible preferred stock - - Convertible debt - - Total possible dilution 0 261,000 Reclassifications

Note 2 - Loans Held For Sale an

Note 2 - Loans Held For Sale and Convertible Note	3 Months Ended
	Mar. 31, 2017
Notes
Note 2 - Loans Held For Sale and Convertible Note:	NOTE 2 — LOANS HELD FOR SALE AND CONVERTIBLE NOTE: The Company's fair value of loans held for sale and convertible notes consisted of the following: March 31, 2017 December 31, 2016 Residential $ 119,167 $ 120,912 Commercial 226,843 226,843 Loans held for sale - Total $ 346,010 $ 347,755 The following table presents a reconciliation of assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the quarters ended March 31, 2017 and 2016: March 31, 2017 2016 Beginning Balance $ 347,755 $ 503,890 Principal payments received (1,745) (1,464) Proceeds from sale of loans - (120,000) Gain on sale of loan - 21,258 Repossession expenses - 77 Ending Balance $ 346,010 $ 403,761 During the quarter ended March 31, 2016, the Company sold one loans with a basis of $98,742 for $120,000 in cash. A gain of $21,258 was recognized.

Note 3- Real Estate Owned

Note 3- Real Estate Owned	3 Months Ended
	Mar. 31, 2017
Notes
Note 3- Real Estate Owned:	NOTE 3- REAL ESTATE OWNED: The Company's REO consisted of the following: March 31, 2017 December 31, 2016 Land $ - $ 14,999 Commercial - - Total $ - $ 14,999 The following table presents a change in balance sheet carrying values associated with REO for the three months ended March 31, 2017 and 2016: March 31, 2017 2016 Beginning Balance $ 14,999 $ 27,451 Proceeds from sale of REO (19,140) - Gain on sale of REO 4,141 - Ending Balance $ -0- $ 27,451 During the quarter ended March 31, 2017, by board action the Company sold two REO with a basis of $14,999 for $19,140 for a gain of $4,141.

Note 4 - Other Assets

Note 4 - Other Assets	3 Months Ended
	Mar. 31, 2017
Notes
Note 4 - Other Assets	NOTE 4 — OTHER ASSETS: Long term investments: Flyback Energy, Inc.: In December 2015, the Company reduced the carrying value of its Flyback Energy common shares to $0.067 per share, or $212,619, and recorded an impairment change of $1,037,381 based on the last known common share sale. Flyback Energy, Inc. is still a development stage company being financed by outside sources of capital. At this time, Flyback is not assured of future financing capital and is subject to changing world conditions. Digi Outdoor Media, Inc.: In 2014, the Company loaned Placer Creek Mining Company (“Placer”) $150,000. The loan interest rate is 5.0% and the Company has an option to convert any or all of the amount due into an equity private placement of Placer. The Placer transaction is treated as a related party transaction. (See Note 8: Michael Lavigne) On February 24, 2015, the Company converted the loan into 300,000 shares of common stock of Digi Outdoor Media, Inc. (“Digi”), the successor in interest to Placer. The Company determined that the fair value of the shares received on the conversion to be $150,000 based upon the loan balance of $150,000 because Digi is not publicly traded and has had no recent cash sale of its common stock. The fair value was determined using Level 2 inputs under the fair value hierarchy. Digi Outdoor Media, Inc. is a startup company in the business of building and leasing outdoor advertising signs. Investments in Available for Sale Securities: Ambient Water Corporation (Formerly AWG International Water Corp.): The Company purchased 109,906 shares of the AWG International Water Corp, a Nevada corporation, (“AWGI”) common stock for $500,000 ($250,000 each in 2010 and 2011). In July 2012, AWGI was acquired by MIP Solutions, Inc. in a share exchange transaction (the "Acquisition"). In connection with the Acquisition, the Company’s 109,906 shares of AWGI common stock were converted into 7,380,433 shares of AWG International Water Corp (formerly MIP Solutions, Inc.). On May 19, 2016, by board action the Company sold its interest in Ambient Water Corporation to John R. Coghlan (see Note 8) for $.0003 per share, the fair value of the stock on the day of sale for proceeds of $2,213, resulting in a recognized loss of $497,787. Investments in Real Estate Limited Liability Companies: At the end of 2012, the Company acquired investments in two Washington state real estate limited liability companies for $225,000. During the quarter ended March 31, 2016 one limited liability company was sold for $399,934 resulting in a gain of $139,821. During the quarter ended June 30, 2016, by board action the Company exchanged its 9.1756% interest in the other limited liability company to Coghlan Family Corporation “CFC” (see Note 8) for $300,000, resulting in a gain on sale of $131,625. The transaction was made by reducing the balance payable to Coghlan Family Corporation’s revolving line of credit. As required by the operating agreement of Wenatchee, LLC operating agreement the offer was shown to all other members to participate or bid higher for the interest. No members made an offer and the Board of Directors of the Company approved the sale. In 2013, the Company contributed its investment in one real estate owned property with a basis of $51,600 to a newly formed limited liability company in exchange for a 12.9% interest in the new company. As of March 31, 2017 the Company holds a 13.1% interest in this company. In 2014, the Company contributed its investment in one real estate owned property with a basis of $47,925 to a newly formed limited liability company in exchange for 31.95% interest in the new company. As of March 31, 2017 the Company still holds a 31.95% interest in this company. These companies are 100% controlled and managed by Genesis Finance Corporation and John Coghlan, related parties. (See Note 8) Investments are accounted for using the equity method. During the quarters ended March 31, 2017 and 2016, the Company recorded (income) loss of $(211) and ($138,111), respectively. Losses generally represent our portion of this real estate company’s loss for the same period. Rental Properties: At the end of 2013, the Company foreclosed on a loan previously held for sale in Lebanon, Oregon through the bankruptcy courts, and is accounting for the company’s carrying value of $85,534 as a rental property. The property was subsequently leased on a three year lease agreement for $1,500 per month. During the quarter ended March 31, 2017 and 2016, the company recognized $3,000 and $4,500 in rental income. This is a commercial building being depreciated over thirty-nine (39) years. The company recorded depreciation of $-0- and $536 for the quarters ended March 31, 2017 and 2016. On March 8, 2017, by board action the Company sold this property to Coghlan Family Corporation (see Note 8) for $77,585, resulting in a gain on sale of $342. In September 2016, the Company foreclosed on a loan previously held for sale in Lewiston, Idaho through the bankruptcy courts, the property is being operated as Emperor of Indian restaurant. The property was placed into real estate owned during the six month ended June 30, 2016. It was held at a net carrying value of $69,761. The restaurant was subsequently leased on a two year lease agreement for $1,200 per month with an option to purchase for $45,000. During the three month ended March 31, 2017 the company recognized $4,125 in rental income. Fair value of the property was determined to be $45,000 on the date of transfer based on appraisal and contract terms of the lease. This is a commercial building being depreciated over thirty-nine (39) years. The company recorded depreciation of $288 for the quarters ended March 31, 2017. Real Estate Leasehold Interest: On May 31, 2013, the Company completed the acquisition of a real property leasehold interest in approximately 63 acres with fifty (50) RV/residential lots located in Dunn County, North Dakota, (the "Halliday Project"). Total consideration for the leasehold interest was $619,250. The Company may place recreational vehicles, mobile homes, or construct cabins on the lots and offer them for rent or lease. The Company recorded amortization of $5,161 for the quarters ended March 31, 2017 and 2016, respectively. At March 31, 2017 and 2016, the Company had no lots leased and had rental income for the three month ended March 31, 2017 and 2016 of $-0- and $1,000, respectively. At March 31, 2017, the Company’s carrying value of the property is a fair value estimated of $169,262 (not including travel trailers), based on management’s estimate of discounted cash flows received from the property.

Note 5 - Lines of Credit

Note 5 - Lines of Credit	3 Months Ended
	Mar. 31, 2017
Notes
Note 5 - Lines of Credit:	NOTE 5 — LINES OF CREDIT: GFI has a $250,000 line of credit with Riverbank. At March 31, 2017 and December 31, 2016 the balance owing is $170,000 and $180,000. The line has a term of twelve months, and an origination fee of 1/2%, or $1,250. Accrued interest is paid monthly. The Riverbank line of credit is senior to the Coghlan Family Corporation, Inc. (“CFC”) line of credit and is collateralized by the assets of GFI. On December 7, 2016 the line of credit was extended to December 1, 2017 at which time the loan renewed at a four and a half (4.5%) percent interest rate with a renewal fee of ½%, or $1,250. At March 31, 2017 the interest rate was 5.0%. The Riverbank line requires that the CFC line may not be paid down lower than the amount owing to Riverbank at any time during the term of the loan. The line is payable on demand and is personally guaranteed by John R. and Wendy Coghlan, related parties of the Company. The Company has a $2,500,000 Warehouse Line of Credit Promissory Note Agreement with the CFC. At March 31, 2017 and December 31, 2016 the balance owing was $950,000. CFC is an affiliated company controlled by John R. Coghlan. At the time the agreement was made the default interest rate was twelve (12%) percent. Interest was payable monthly. The line had a term of 12 months and an origination fee of 1/2% or $12,500. The credit line is collateralized by all of GFI’s assets and is subordinate to the Riverbank line of credit. The line of credit agreement requires that the Company maintain a debt to equity ratio of no greater than 3.0. Borrowings under the line are personally guaranteed by Michael A. Kirk, the Secretary of the Company. Because of the economic conditions, CFC agreed to waive the interest and origination fees starting October 1, 2010 and also agreed to waive the 3.0 debt to equity ratio requirement as well as the 12% default rate. (See 8-K filed February 8, 2016) In 2016, the Company by board action exchanged a loan held for sale with a basis of $10,000 and exchanged its 9.1756% interest in a limited liability company valued at $300,000 for a reduction in the line of credit of $310,000. Effective August 1, 2016, the company amended the Warehouse Line of Credit Promissory Note Agreement to four (4%) percent interest to be paid monthly in common stock. In addition, the Company issued 50,000 shares of its common stock valued at $5,000 as a loan renewal fee. For the quarter ended March 31, 2017 and the year ended December 31, 2016 the company issued 79,818 and 126,782 shares of the company common stock were issued for a value of $9,058 and $15,407 in interest for the same period.

Note 6 - Notes Payable

Note 6 - Notes Payable	3 Months Ended
	Mar. 31, 2017
Notes
Note 6 - Notes Payable	NOTE 6 — NOTES PAYABLE: Convertible Note Payable to Officer On December 15, 2010, the Company entered into a convertible note agreement for $250,000 with John R. Coghlan, a related party (see Note 8). The note accrues interest at eight (8%) percent per annum with interest and balance initially due on December 15, 2012. The note is convertible at any time by Mr. Coghlan into one (1) share of the Company’s Series “B” Preferred stock for every $1.00 outstanding of the note payable and related accrued interest. In connection with the issuance of this note, the Company recognized a beneficial conversion feature of $128,750 that resulted in a discount to the note payable. The discount was amortized into earnings over the initial term of the note and was fully amortized at December 31, 2012. The note is collateralized by 290,000 shares of the Company’s Series “B” Preferred stock. On October 16, 2012, the Company and Coghlan agreed to extend the due date of the note to December 15, 2016. On February 8, 2016, Mr. Coghlan elected to convert his note into shares of the Company’s common stock. The note was originally convertible into 250,000 shares of Series "B", or 625,000 shares of common stock equivalents, at the option of Mr. Coghlan. However, Mr. Coghlan agreed to accept 725,000 common shares in lieu of full payment. The 100,000 additional common shares represents a financing cost to the Company and as such, financing expense of $29,000 was recognized in the quarter ended March 31, 2016. Note Payable: In 2013, the Company assumed a note payable totaling $62,699 relating to a loan it had made in 2005. When the Company funded the loan in 2005, it sold 100% of its interest to various investors. During 2013, the Company began foreclosure proceedings on behalf of the investors because the borrower was delinquent on payments. During the proceedings, it was determined that the Company had failed to obtain first position in the underlying property and that a separate creditor was in first position. To uphold its agreement with the investors, the Company assumed the balance of the note with the creditor and recognized a loss for the entire amount in 2013. The term of the assumed note is 9.5% until paid in full and monthly payments are $832. At March 31, 2017, the balance owing is $26,002.

Note 7 - Series B Preferred Sto

Note 7 - Series B Preferred Stock	3 Months Ended
	Mar. 31, 2017
Notes
Note 7 - Series B Preferred Stock	NOTE 7 — SERIES B PREFERRED STOCK: On November 11, 2010 the Company filed Articles of Amendment to the Amended and Restated Articles of Incorporation creating 2,000,000 shares of Series B Preferred Stock. The designated Series B Preferred Stock consists of 2,000,000 shares with a par value $1.00; is non-dividend bearing, convertible to Common Stock at $.40 per share subject to any recapitalization. The Company subsequently amended the share amount to 2,290,000. The holders of the Preferred Stock will be entitled to receive, prior and in preference to any Distributions of any assets of the Corporation to the holders of the Common Stock. Each share of the Preferred Stock is convertible into two and one-half common stock shares at the option of the holder. Each share of Series B Preferred Stock can be automatically converted immediately prior to the closing of a firm commitment underwritten initial public offering pursuant to an effective registration statement filed under the Securities Act of 1933 or upon the receipt by the Corporation of a written request for such request for such conversion from the holders of the majority of the Series B Preferred Stock holders. On May 18, 2015, the Company by majority consent of Preferred Shareholder agreed to convert all of the outstanding shares of Series B Preferred to common stock. On June 26, 2015, 1,649,500 shares of Series B Preferred were converted into 4,123,750 common shares. As of March 31, 2017 and December 31, 2016, no shares of Series B Preferred Stock are issued, outstanding or obligated.

Note 8- Related-party Transacti

Note 8- Related-party Transactions	3 Months Ended
	Mar. 31, 2017
Notes
Note 8- Related-party Transactions:	NOTE 8— RELATED-PARTY TRANSACTIONS: Related parties are defined as Officers, Directors, and/or those Shareholders owning or controlling more than 5% of the common stock of GFI, or any entities that are owned or controlled by Officers, Directors, and/or those Shareholders owning or controlling more than 5% of the common stock of GFI. Coghlan Family Corporation, Coghlan, LLC and West 3773 Fifth, LLC are controlled by John R. Coghlan, a Company director, CFO and majority shareholder. Coghlan Family Corporation is owned 100% by Coghlan, LLC, which is owned by the Coghlan family members. John R. and Wendy Coghlan (husband and wife) collectively own 35.65% of Coghlan, LLC and are co-managers. West 3773 Fifth, LLC is owned 100% by John and Wendy Coghlan (husband and wife). JC Housing, LLC is owned 33.33% by John R. Coghlan and 33.33% by Clint Lohman. Mr. Lohman is a director of GFI. Genesis Financial Corporation is a company which is owned 100% by Michael Kirk, who is a director and officer of GFI. GFI provides accounting, office services and supplies, and office space for his services provided to Genesis Financial Corporation. The services are valued at $1,500 per month. Genesis Finance Corporation and John R. Coghlan has managing agreement with the real estate limited liability companies. Michael Lavigne is an officer and director of Placer Creek Mining Company. Mr. Lavigne is a director of GFI. In addition to transactions described in Notes 2, 3, 4, 5 and 6, Genesis Financial, Inc. had the following related party transactions for the quarters ended March 31, 2017 and year ended December 31, 2016. John R. Coghlan On December 7, 2016, John R. Coghlan personally guaranteed our Riverbank line of credit. On November 21, 2016, John R. Coghlan terminated his stock options agreement with the Company. On May 19, 2016, by board action the Company sold 7,380,433 common shares of Ambient Water Corporation for $2,213 or $0.0003 per share the fair value on that date to John R Coghlan. On February 8, 2016, John R. Coghlan converted his $250,000 note for 725,000 shares of common stock. The note was originally convertible into 250,000 shares of Series "B", or 625,000 shares of common stock equivalents, at the option of Mr. Coghlan. However, Mr. Coghlan agreed to accept 725,000 common shares in lieu of full payment. The 100,000 additional common shares represent a financing cost to the Company and as such, financing expense of $29,000 was recognized in the year ended December 31, 2016. As of March 31, 2017, the Company continues a managing agreement for the investment in real estate limited liability companies. The agreements are stated in the operating agreement of each limited liability companies. Coghlan Family Corporation “CFC” March 8, 2017, by board action the Company sold a rental property for $77,585, resulting in a gain on sale of $342. The Company also sold two REO with a basis of $14,999 for $19,140 for a gain of $4,141. Effective August 1, 2016 the terms of the amended Warehouse Line of Credit changed to issuing stock for the interest due on the line of credit monthly. The table below shows the issue dates, number of shares issued and amount of interest being paid. (See Note 5) Issue date Shares Issued Interest Amount March 31, 2017 39,041 $3,123 February 28, 2017 23,425 $2,811 January 31, 2017 17,352 $3,123 1 st 79,818 $ 9,058 December 31, 2016 17,352 $3,123 November 30, 2016 16,773 $3,019 October 31, 2016 31,233 $3,123 September 30, 2016 30,192 $3,019 August 31, 2016 31,233 $3,123 2016 Total 126,782 $ 15,407 On August 1, 2016, CFC amended the Warehouse Line of Credit and 50,000 shares of common stock were issued. (See Note 5) On May 18, 2016, by board action the Company exchanged its 9.1756% interest in Wenatchee Riverview, LLC to CFC for a $300,000 reduction in the line of credit with CFC, a gain of $131,417 was realized by the Company. On May 19, 2016, by board action the Company exchanged a loan held for sale for a $10,000 reduction in the line of credit with CFC. Coghlan, LLC There was no activity for the years ending December 31, 2016 and quarter ended March 31, 2017. JC Housing, LLC There was no activity for the years ending December 31, 2016 and quarter ended March 31, 2017. West 3773 Fifth, LLC As of March 31, 2017, the Company continues a month-to-month tenancy with monthly rent of $1,250. Genesis Finance Corporation “GFC” As of March 31, 2017, the Company continues a managing agreement for the investment in real estate limited liability companies. The agreement is stated in the operating agreement of each limited liability company. Michael Lavigne, Director In 2015, the Company converted the Placer Creek Mining Company loan of $150,000 to 300,000 shares of Digi Outdoor Media, Inc., the successor to Placer Creek Mining Company. (See Note 4) There was no activity for the quarter ended March 31, 2017. Clint Lohman, Director There was no activity for the quarter ended March 31, 2017.

Note 9- Subsequent Events

Note 9- Subsequent Events	3 Months Ended
	Mar. 31, 2017
Notes
Note 9- Subsequent Events	NOTE 9— SUBSEQUENT EVENT: On April 19, 2017, the Company by Board Action has grant each of the Company’s four director’s Fifty Thousand (50,000) common shares each for past services rendered. On April 30, 2017, the Company issued 37,740 share of common stock to Coghlan Family Corporation for interest owing on the line on credit. (See Note 5)

Note 1 - Organization and Sum15

Note 1 - Organization and Summary of Significant Accounting Policies: Use of Estimates (Policies)	3 Months Ended
	Mar. 31, 2017
Policies
Use of Estimates	Use of estimates

Note 1 - Organization and Sum16

Note 1 - Organization and Summary of Significant Accounting Policies: Fair Value Measurements (Policies)	3 Months Ended
	Mar. 31, 2017
Policies
Fair Value Measurements	Fair value measurements - the fair value measurement; the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets or liabilities (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3); for fair value measurements using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: a. total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings, and a description of where those gains or losses included in earnings are reported in the statement of operations; b. the amount of these gains or losses attributable to the change in unrealized gains or losses relating to those assets or liabilities still held at the reporting period date and a description of where those unrealized gains or losses are reported; c. purchases, sales, issuances, and settlements (net); and d. transfers into and/or out of Level 3. 4. the amount of the total gains or losses for the period in (3)(a) included in earnings that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date and a description of where those unrealized gains or losses are reported in the statement of operations; and in annual periods only, the valuation technique(s) used to measure fair value and a discussion of changes in valuation techniques, if any, during the period.

Note 1 - Organization and Sum17

Note 1 - Organization and Summary of Significant Accounting Policies: Real Estate Leasehold Interest (Policies)	3 Months Ended
	Mar. 31, 2017
Policies
Real Estate Leasehold Interest	Real estate leasehold interest –

Note 1 - Organization and Sum18

Note 1 - Organization and Summary of Significant Accounting Policies: Loans held for sale (Policies)	3 Months Ended
	Mar. 31, 2017
Policies
Loans held for sale	Loans held for sale –

Note 1 - Organization and Sum19

Note 1 - Organization and Summary of Significant Accounting Policies: Real estate owned (Policies)	3 Months Ended
	Mar. 31, 2017
Policies
Real estate owned	Real estate owned –

Note 1 - Organization and Sum20

Note 1 - Organization and Summary of Significant Accounting Policies: Income tax (Policies)	3 Months Ended
	Mar. 31, 2017
Policies
Income tax	Income tax

Note 1 - Organization and Sum21

Note 1 - Organization and Summary of Significant Accounting Policies: Earnings Per Share (Policies)	3 Months Ended
	Mar. 31, 2017
Policies
Earnings Per Share	Earnings per share March 31, 2017 2016 Stock options - 261,000 Convertible preferred stock - - Convertible debt - - Total possible dilution 0 261,000

Note 1 - Organization and Sum22

Note 1 - Organization and Summary of Significant Accounting Policies: Reclassifications (Policies)	3 Months Ended
	Mar. 31, 2017
Policies
Reclassifications	Reclassifications

Note 1 - Organization and Sum23

Note 1 - Organization and Summary of Significant Accounting Policies: Earnings Per Share: Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Tables)	3 Months Ended
	Mar. 31, 2017
Tables/Schedules
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share	March 31, 2017 2016 Stock options - 261,000 Convertible preferred stock - - Convertible debt - - Total possible dilution 0 261,000

Note 2 - Loans Held For Sale 24

Note 2 - Loans Held For Sale and Convertible Note: Schedule of Other Assets (Tables)	3 Months Ended
	Mar. 31, 2017
Tables/Schedules
Schedule of Other Assets	March 31, 2017 December 31, 2016 Residential $ 119,167 $ 120,912 Commercial 226,843 226,843 Loans held for sale - Total $ 346,010 $ 347,755

Note 2 - Loans Held For Sale 25

Note 2 - Loans Held For Sale and Convertible Note: Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Tables)	3 Months Ended
	Mar. 31, 2017
Tables/Schedules
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis	March 31, 2017 2016 Beginning Balance $ 347,755 $ 503,890 Principal payments received (1,745) (1,464) Proceeds from sale of loans - (120,000) Gain on sale of loan - 21,258 Repossession expenses - 77 Ending Balance $ 346,010 $ 403,761

Note 3- Real Estate Owned_ Real

Note 3- Real Estate Owned: Real Estate Owned, Disclosure of Detailed Components (Tables)	3 Months Ended
	Mar. 31, 2017
Tables/Schedules
Real Estate Owned, Disclosure of Detailed Components	March 31, 2017 December 31, 2016 Land $ - $ 14,999 Commercial - - Total $ - $ 14,999

Note 3- Real Estate Owned_ Othe

Note 3- Real Estate Owned: Other Real Estate, Roll Forward (Tables)	3 Months Ended
	Mar. 31, 2017
Tables/Schedules
Other Real Estate, Roll Forward	March 31, 2017 2016 Beginning Balance $ 14,999 $ 27,451 Proceeds from sale of REO (19,140) - Gain on sale of REO 4,141 - Ending Balance $ -0- $ 27,451

Note 8- Related-party Transac28

Note 8- Related-party Transactions: Schedule of Related Party Transactions (Tables)	3 Months Ended
	Mar. 31, 2017
Tables/Schedules
Schedule of Related Party Transactions	Issue date Shares Issued Interest Amount March 31, 2017 39,041 $3,123 February 28, 2017 23,425 $2,811 January 31, 2017 17,352 $3,123 1 st 79,818 $ 9,058 December 31, 2016 17,352 $3,123 November 30, 2016 16,773 $3,019 October 31, 2016 31,233 $3,123 September 30, 2016 30,192 $3,019 August 31, 2016 31,233 $3,123 2016 Total 126,782 $ 15,407

Note 1 - Organization and Sum29

Note 1 - Organization and Summary of Significant Accounting Policies (Details)	3 Months Ended
	Mar. 31, 2017
Details
Nature of Operations	Organization: Genesis Financial, Inc. (“the Company” or “GFI”) was incorporated in Washington State on January 24, 2002 and on January 26, 2016 we moved our corporate domicile to the State of Wyoming. The Company is primarily engaged in the business of purchasing and selling real estate receivable loans and periodically providing bridge capital funding. Loans consist of real estate loans and mortgage notes collateralized by primarily first position liens on residential and commercial real estate. The loans collateralized by real estate are typically non-conventional either because they are originated as a result of seller financing, or the underlying property is non-conventional. The Company invests in loans using investor funds, equity funds and funds generated from external borrowings including a line of credit facility from an affiliated stockholder.
Entity Incorporation, Date of Incorporation	Jan. 24, 2002
Entity Incorporation, State Country Name	Wyoming
Basis of Accounting	The financial statements of GFI, presented in this Form 10Q are unaudited and reflect, in the opinion of Management, a fair presentation of operations for the three month periods ended March 31, 2017 and 2016. All adjustments of a normal recurring nature and necessary for a fair presentation of the results for the periods covered have been made. Certain information and footnote disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the applicable rules and regulations of the Securities and Exchange Commission. These financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company's Form 10K for the year ended December 31, 2016 as filed with Securities and Exchange Commission. The results of operations for the three months ended March 31, 2017, are not necessarily indicative of the results expected for the full fiscal year or for any other fiscal period.

Note 1 - Organization and Sum30

Note 1 - Organization and Summary of Significant Accounting Policies: Earnings Per Share: Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Details
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements		261,000
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	0	261,000

Note 2 - Loans Held For Sale 31

Note 2 - Loans Held For Sale and Convertible Note: Schedule of Other Assets (Details) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Details
Loans and Leases Receivable, Gross, Consumer, Real Estate	$ 119,167	$ 120,912
Loans held for sale, commercial	226,843	226,843
Loans held for sale	$ 346,010	$ 347,755

Note 2 - Loans Held For Sale 32

Note 2 - Loans Held For Sale and Convertible Note: Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Details
Fair Value Assets Liabilities Measured On Recurring Basis Beginning Balance	$ 347,755	$ 503,890
Debt Instrument, Periodic Payment, Principal	(1,745)	(1,464)
Proceeds from Sale of Loans Held-for-sale		(120,000)
Gain (Loss) on Sales of Loans, Net		21,258
Foreclosed Real Estate Expense		77
Fair Value, Assets and Liabilities Measured on Recurring Basis, Gain (Loss) Included in Earnings	$ 346,010	$ 403,761

Note 3- Real Estate Owned_ Re33

Note 3- Real Estate Owned: Real Estate Owned, Disclosure of Detailed Components (Details) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Details
Land	$ 14,999	$ 14,999
Real estate owned		$ 14,999

Note 3- Real Estate Owned_ Ot34

Note 3- Real Estate Owned: Other Real Estate, Roll Forward (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Details
Property subject to or available for operating lease beginning balance	$ 14,999	$ 27,451
Long lived assets held for sale, sale proceeds	(19,140)
Long lived assets held for sale, gain	$ 4,141

Note 3- Real Estate Owned (Deta

Note 3- Real Estate Owned (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Details
Land	$ 14,999	$ 14,999
Long lived assets held for sale, sale proceeds	19,140
Long lived assets held for sale, gain	$ 4,141

Note 4 - Other Assets (Details)

Note 4 - Other Assets (Details)	3 Months Ended
	Mar. 31, 2017
Details
Equity Method Investments and Joint Ventures Disclosure	Long term investments: Flyback Energy, Inc.: In December 2015, the Company reduced the carrying value of its Flyback Energy common shares to $0.067 per share, or $212,619, and recorded an impairment change of $1,037,381 based on the last known common share sale. Flyback Energy, Inc. is still a development stage company being financed by outside sources of capital. At this time, Flyback is not assured of future financing capital and is subject to changing world conditions. Digi Outdoor Media, Inc.: In 2014, the Company loaned Placer Creek Mining Company (“Placer”) $150,000. The loan interest rate is 5.0% and the Company has an option to convert any or all of the amount due into an equity private placement of Placer. The Placer transaction is treated as a related party transaction. (See Note 8: Michael Lavigne) On February 24, 2015, the Company converted the loan into 300,000 shares of common stock of Digi Outdoor Media, Inc. (“Digi”), the successor in interest to Placer. The Company determined that the fair value of the shares received on the conversion to be $150,000 based upon the loan balance of $150,000 because Digi is not publicly traded and has had no recent cash sale of its common stock. The fair value was determined using Level 2 inputs under the fair value hierarchy. Digi Outdoor Media, Inc. is a startup company in the business of building and leasing outdoor advertising signs.
Marketable Securities	Investments in Available for Sale Securities: Ambient Water Corporation (Formerly AWG International Water Corp.): The Company purchased 109,906 shares of the AWG International Water Corp, a Nevada corporation, (“AWGI”) common stock for $500,000 ($250,000 each in 2010 and 2011). In July 2012, AWGI was acquired by MIP Solutions, Inc. in a share exchange transaction (the "Acquisition"). In connection with the Acquisition, the Company’s 109,906 shares of AWGI common stock were converted into 7,380,433 shares of AWG International Water Corp (formerly MIP Solutions, Inc.). On May 19, 2016, by board action the Company sold its interest in Ambient Water Corporation to John R. Coghlan (see Note 8) for $.0003 per share, the fair value of the stock on the day of sale for proceeds of $2,213, resulting in a recognized loss of $497,787.
Investment Holdings, Other than Securities	Investments in Real Estate Limited Liability Companies: At the end of 2012, the Company acquired investments in two Washington state real estate limited liability companies for $225,000. During the quarter ended March 31, 2016 one limited liability company was sold for $399,934 resulting in a gain of $139,821. During the quarter ended June 30, 2016, by board action the Company exchanged its 9.1756% interest in the other limited liability company to Coghlan Family Corporation “CFC” (see Note 8) for $300,000, resulting in a gain on sale of $131,625. The transaction was made by reducing the balance payable to Coghlan Family Corporation’s revolving line of credit. As required by the operating agreement of Wenatchee, LLC operating agreement the offer was shown to all other members to participate or bid higher for the interest. No members made an offer and the Board of Directors of the Company approved the sale. In 2013, the Company contributed its investment in one real estate owned property with a basis of $51,600 to a newly formed limited liability company in exchange for a 12.9% interest in the new company. As of March 31, 2017 the Company holds a 13.1% interest in this company. In 2014, the Company contributed its investment in one real estate owned property with a basis of $47,925 to a newly formed limited liability company in exchange for 31.95% interest in the new company. As of March 31, 2017 the Company still holds a 31.95% interest in this company. These companies are 100% controlled and managed by Genesis Finance Corporation and John Coghlan, related parties. (See Note 8) Investments are accounted for using the equity method. During the quarters ended March 31, 2017 and 2016, the Company recorded (income) loss of $(211) and ($138,111), respectively. Losses generally represent our portion of this real estate company’s loss for the same period.
Lessor, Operating Leases	Rental Properties: At the end of 2013, the Company foreclosed on a loan previously held for sale in Lebanon, Oregon through the bankruptcy courts, and is accounting for the company’s carrying value of $85,534 as a rental property. The property was subsequently leased on a three year lease agreement for $1,500 per month. During the quarter ended March 31, 2017 and 2016, the company recognized $3,000 and $4,500 in rental income. This is a commercial building being depreciated over thirty-nine (39) years. The company recorded depreciation of $-0- and $536 for the quarters ended March 31, 2017 and 2016. On March 8, 2017, by board action the Company sold this property to Coghlan Family Corporation (see Note 8) for $77,585, resulting in a gain on sale of $342. In September 2016, the Company foreclosed on a loan previously held for sale in Lewiston, Idaho through the bankruptcy courts, the property is being operated as Emperor of Indian restaurant. The property was placed into real estate owned during the six month ended June 30, 2016. It was held at a net carrying value of $69,761. The restaurant was subsequently leased on a two year lease agreement for $1,200 per month with an option to purchase for $45,000. During the three month ended March 31, 2017 the company recognized $4,125 in rental income. Fair value of the property was determined to be $45,000 on the date of transfer based on appraisal and contract terms of the lease. This is a commercial building being depreciated over thirty-nine (39) years. The company recorded depreciation of $288 for the quarters ended March 31, 2017.
Leases of Lessee Disclosure	Real Estate Leasehold Interest: On May 31, 2013, the Company completed the acquisition of a real property leasehold interest in approximately 63 acres with fifty (50) RV/residential lots located in Dunn County, North Dakota, (the "Halliday Project"). Total consideration for the leasehold interest was $619,250. The Company may place recreational vehicles, mobile homes, or construct cabins on the lots and offer them for rent or lease. The Company recorded amortization of $5,161 for the quarters ended March 31, 2017 and 2016, respectively. At March 31, 2017 and 2016, the Company had no lots leased and had rental income for the three month ended March 31, 2017 and 2016 of $-0- and $1,000, respectively. At March 31, 2017, the Company’s carrying value of the property is a fair value estimated of $169,262 (not including travel trailers), based on management’s estimate of discounted cash flows received from the property.

Note 5 - Lines of Credit (Detai

Note 5 - Lines of Credit (Details) - USD ($)	Aug. 01, 2016	Mar. 31, 2017	Dec. 31, 2016
Details
Line of Credit Facility, Current Borrowing Capacity		$ 250,000
Long-term Line of Credit		$ 170,000	$ 180,000
Line of Credit Facility, Asset Restrictions		The Riverbank line requires that the CFC line may not be paid down lower than the amount owing to Riverbank at any time during the term of the loan. The line is payable on demand and is personally guaranteed by John R. and Wendy Coghlan, related parties of the Company.
Line of Credit Facility, Maximum Borrowing Capacity		$ 2,500,000
Line of credit, affiliated company		$ 950,000	$ 950,000
Stock issued for loan renewal fee, stock	50,000
Stock issued for loan renewal fee, value	$ 5,000
Stock issued for promissory note interest, stock		79,818	126,782
Stock issued for promissory note interest, value		$ 9,058	$ 15,407

Note 6 - Notes Payable (Details

Note 6 - Notes Payable (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Details
Convertible note payable to officer				$ 250,000
Financing expense, related party	$ 29,000
Note payable		$ 26,002	$ 28,385

Note 7 - Series B Preferred S39

Note 7 - Series B Preferred Stock (Details) - $ / shares	Jun. 26, 2015	Mar. 31, 2017	Dec. 31, 2016
Details
Preferred Stock, Par Value		$ 1	$ 1
Preferred Stock, Shares Authorized		2,290,000	2,290,000
Convertible preferred stock converted to other securities	1,649,500
Conversion of preferred stock, stock	4,123,750

Note 8- Related-party Transac40

Note 8- Related-party Transactions (Details) - USD ($)	Dec. 31, 2015	Mar. 31, 2017
Details
Description of related parties		Related parties are defined as Officers, Directors, and/or those Shareholders owning or controlling more than 5% of the common stock of GFI, or any entities that are owned or controlled by Officers, Directors, and/or those Shareholders owning or controlling more than 5% of the common stock of GFI.
Related parties and relationships		Coghlan Family Corporation, Coghlan, LLC and West 3773 Fifth, LLC are controlled by John R. Coghlan, a Company director, CFO and majority shareholder. Coghlan Family Corporation is owned 100% by Coghlan, LLC, which is owned by the Coghlan family members. John R. and Wendy Coghlan (husband and wife) collectively own 35.65% of Coghlan, LLC and are co-managers. West 3773 Fifth, LLC is owned 100% by John and Wendy Coghlan (husband and wife). JC Housing, LLC is owned 33.33% by John R. Coghlan and 33.33% by Clint Lohman. Mr. Lohman is a director of GFI. Genesis Financial Corporation is a company which is owned 100% by Michael Kirk, who is a director and officer of GFI. GFI provides accounting, office services and supplies, and office space for his services provided to Genesis Financial Corporation. The services are valued at $1,500 per month. Genesis Finance Corporation and John R. Coghlan has managing agreement with the real estate limited liability companies. Michael Lavigne is an officer and director of Placer Creek Mining Company. Mr. Lavigne is a director of GFI.
Payments for Rent		$ 1,250
Loans Receivable, Net	$ 150,000
Conversion of Stock, Shares Converted	300,000

Note 8- Related-party Transac41

Note 8- Related-party Transactions: Schedule of Related Party Transactions (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Details
Stock issued for promissory note interest, stock	79,818	126,782
Stock issued for promissory note interest, value	$ 9,058	$ 15,407

Note 9- Subsequent Events (Deta

Note 9- Subsequent Events (Details)	Apr. 30, 2017	Apr. 19, 2017
Details
Subsequent Event, Description	On April 30, 2017, the Company issued 37,740 share of common stock to Coghlan Family Corporation for interest owing on the line on credit. (See Note 5)	On April 19, 2017, the Company by Board Action has grant each of the Company’s four director’s Fifty Thousand (50,000) common shares each for past services rendered.