Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 07, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | Manufactured Housing Properties Inc. | |
Entity Central Index Key | 0001277998 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Common Stock, Shares Outstanding | 12,895,062 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2019 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Investment Property | ||
Land | $ 4,602,721 | $ 4,357,950 |
Site and Land Improvements | 6,781,845 | 6,781,845 |
Buildings and Improvements | 1,474,736 | 1,441,222 |
Acquisition Cost | 151,007 | 140,758 |
Total Investment Property | 13,009,859 | 12,721,775 |
Accumulated Depreciation & Amortization | (802,516) | (699,184) |
Net Investment Property | 12,207,343 | 12,022,591 |
Cash and Cash Equivalents | 881,319 | 458,271 |
Accounts Receivable, net | 9,242 | 12,987 |
Other Assets | 253,649 | 99,472 |
Total Assets | 13,351,553 | 12,593,321 |
Liabilities | ||
Accounts Payable | 48,357 | 71,091 |
Loans Payable | 12,384,791 | 9,086,110 |
Loans Payable - related party | 897,708 | 890,632 |
Convertible Note Payable - related party | 0 | 2,754,550 |
Accrued Liabilities and Deposits | 377,135 | 612,819 |
Tenant Security Deposits | 132,540 | 131,149 |
Total Liabilities | 13,840,531 | 13,546,351 |
Commitments and Contingencies (See Note 5) | ||
Stockholders' deficit | ||
Common Stock (Stock par value $0.01 per share, 200,000,000 shares authorized, 12,895,062 and 10,350,062 shares are issued and outstanding as of March 31, 2019 and December 31, 2018, respectively) | 128,950 | 103,500 |
Additional Paid in Capital | 1,899,924 | 451,567 |
Accumulated Deficit | (2,520,652) | (1,801,338) |
Total Manufactured Housing Properties Inc. Stockholders' Deficit | (488,978) | (1,246,271) |
Non-controlling interest | 0 | 293,241 |
Total Equity (Deficit) | (488,978) | (953,030) |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | 13,351,553 | 12,593,321 |
Series A Stock | ||
Stockholders' deficit | ||
Preferred Stock | 2,800 | 0 |
Series B Stock | ||
Stockholders' deficit | ||
Preferred Stock | $ 0 | $ 0 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
Common Stock, Par Value | $ .01 | $ .01 |
Common Stock, Authorized | 200,000,000 | 200,000,000 |
Common Stock, Issued | 12,895,062 | 10,350,062 |
Common Stock, Outstanding | 12,895,062 | 10,350,062 |
Series A Stock | ||
Preferred Stock, Par Value | $ 2.50 | $ 2.50 |
Preferred Stock, Authorized | 4,000,000 | 4,000,000 |
Preferred Stock, Issued | 280,000 | 0 |
Preferred Stock, Outstanding | 280,000 | 0 |
Series B Stock | ||
Preferred Stock, Par Value | $ .01 | $ .01 |
Preferred Stock, Authorized | 1,000,000 | 1,000,000 |
Preferred Stock, Issued | 0 | 0 |
Preferred Stock, Outstanding | 0 | 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue | ||
Rental and Related Income | $ 524,374 | $ 490,813 |
Management fees, related party | 12,000 | 0 |
Total Revenues | 536,374 | 490,813 |
Community Operating Expenses | ||
Repair & Maintenance | 43,290 | 42,674 |
Real estate taxes | 23,561 | 19,265 |
Utilities | 31,593 | 41,839 |
Insurance | 6,271 | 10,901 |
General and Administrative Expense | 95,106 | 122,190 |
Total Community Operating Expenses | 199,821 | 236,869 |
Corporate Payroll and Overhead | 135,963 | 123,474 |
Depreciation & Amortization Expense | 134,926 | 132,822 |
Refinancing costs | 552,272 | 0 |
Interest expense | 232,706 | 234,132 |
Total Expenses | 1,255,688 | 727,297 |
Net loss before provision for income taxes | (719,314) | (236,484) |
Provision for income taxes | 0 | 0 |
Net Loss | (719,314) | (236,484) |
Net Income attributable to the non-controlling interest | 0 | 7,572 |
Net Loss | (719,314) | (244,056) |
Preferred stock dividends | ||
Series A Preferred | 4,667 | 0 |
Total preferred stock dividends | 4,667 | 0 |
Net loss attributable to common stockholders | $ (723,981) | $ (244,056) |
Weighted Average Shares - Basic and Fully Diluted | 12,527,673 | 10,000,000 |
Weighted Average Basic | $ (0.06) | $ (0.02) |
Weighted Average Fully Diluted | $ (0.06) | $ (0.02) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDER'S DEFICIT - USD ($) | Preferred Stock | Common Stock | Additional Paid In Capital | Noncontrolling Interest | Accumulated Deficit | Total |
Beginning balance, shares at Dec. 31, 2017 | 0 | 10,000,062 | ||||
Beginning balance, amount at Dec. 31, 2017 | $ 0 | $ 100,000 | $ 238,803 | $ 302,580 | $ (504,945) | $ 136,438 |
Stock option expense | 245 | 245 | ||||
Minority interest distributions | (4,498) | (4,498) | ||||
Imputed interest | 0 | |||||
Net income (loss) | 7,572 | (244,056) | (236,484) | |||
Ending balance, shares at Mar. 31, 2018 | 0 | 10,000,062 | ||||
Ending balance, amount at Mar. 31, 2018 | $ 0 | $ 100,000 | 239,048 | 305,654 | (749,001) | (104,299) |
Beginning balance, shares at Dec. 31, 2018 | 0 | 10,350,062 | ||||
Beginning balance, amount at Dec. 31, 2018 | $ 0 | $ 103,500 | 451,567 | 293,241 | (1,801,338) | (953,030) |
Stock option expense | 8 | 8 | ||||
Common Stock issuance for acquisition of minority interest, shares | 2,000,000 | |||||
Common Stock issuance for acquisition of minority interest, amount | $ 20,000 | 517,562 | (293,241) | 244,321 | ||
Series A Preferred Stock issuance for cash, shares | 280,000 | |||||
Series A Preferred Stock issuance for cash, amount | $ 2,800 | 597,200 | 600,000 | |||
Common Stock issuance for line of credit, shares | 545,000 | |||||
Common Stock issuance for line of credit, amount | $ 5,450 | 299,750 | 305,200 | |||
Common Stock issuance for service, amount | 24,500 | 24,500 | ||||
Preferred shares Series A dividends | (4,667) | (4,667) | ||||
Minority interest distributions | 0 | |||||
Imputed interest | 14,004 | 14,004 | ||||
Net income (loss) | (719,314) | (719,314) | ||||
Ending balance, shares at Mar. 31, 2019 | 280,000 | 12,895,062 | ||||
Ending balance, amount at Mar. 31, 2019 | $ 2,800 | $ 128,950 | $ 1,899,924 | $ 0 | $ (2,520,652) | $ (488,978) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash Flows From Operating Activities: | ||
Net Loss | $ (719,314) | $ (236,484) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Stock option expense | 8 | 245 |
Stock compensation expense | 329,700 | 0 |
Imputed interest | 14,004 | 0 |
Depreciation & Amortization | 134,927 | 132,822 |
Write off of mortgage costs | 68,195 | 0 |
Provision for bad debt | 4,076 | 11,014 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (331) | (8,335) |
Other assets | (154,177) | (33,452) |
Accounts payable | (22,734) | 99,114 |
Accrued expenses | (235,684) | 22,531 |
Other Liabilities and deposits | 1,391 | 40,011 |
Net Cash (Used in) Provided by Operating Activities | (579,939) | 27,466 |
Cash Flows From Investing Activities: | ||
Proceeds from sale of property | 0 | 10,000 |
Purchase of Property | (33,514) | (3,502) |
Net cash provided by investing activities | (33,514) | 6,498 |
Cash Flows From Financing Activities: | ||
Proceeds from related party note | 7,076 | 147,445 |
Proceeds from issuance of Preferred Stock | 600,000 | 0 |
Proceeds from notes payable | 8,241,000 | 0 |
Capitalized Financing costs | (110,039) | 0 |
Repayment of Line of Credit | (2,754,550) | 0 |
Preferred shares Series A dividends | (4,667) | 0 |
Repayments of notes payable | (4,942,319) | (64,183) |
Non controlling interest Distributions | 0 | (4,498) |
Net cash provided by financing activities | 1,036,501 | 78,764 |
Net Change in Cash and cash equivalents | 423,048 | 112,728 |
Cash and cash equivalents at Beginning of the Period | 458,271 | 355,935 |
Cash and cash equivalents at End of the Period | 881,319 | 468,663 |
Cash paid for: Income Taxes | 0 | 0 |
Cash paid for: Interest | 218,702 | 1,801,322 |
Non-Cash Investing and Financing Activities | ||
Purchase of Minority Interest in Pecan Grove | $ 537,562 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION | (A) Organization The Company is a Nevada corporation whose principal activities together with its affiliates, acquires, owns, and operates manufactured housing communities. Mobile Home Rental Holdings (“MHRH”) was formed in April 2016 to acquire the assets for Pecan Grove MHP in November 2016 and Butternut MHP in April 2017. To continue the acquisition and aggregation of mobile home parks, MHRH intend to raise capital in the public markets. Therefore, on October 21, 2017, MHRH was acquired by and merged with a public entity Stack-it Storage, Inc. (OTC: STAK). As part of the merger transaction, Stack-it Storage, Inc. changed its name to Manufactured Housing Properties Inc. (OTC: MHPC). For accounting purposes, this transaction was accounted for as a reverse merger and has been treated as a recapitalization of Stack-it Storage, Inc. with Manufactured Housing Properties, Inc. as the accounting acquirer. Basis of Presentation The Company prepares its consolidated financial statements under the accrual basis of accounting, in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The Company’s subsidiaries are all formed in the state of North Carolina as Limited Liability Companies. The acquisition and date of consolidation are as follows: Date of Consolidation Subsidiary Ownership October 2016 Pecan Grove MHP, LLC 100% April 2018 Butternut MHP, LLC 100% November 2018 Azalea MHP, LLC 100% November 2018 Holly Faye MHP, LLC 100% November 2018 Chatham MHP, LLC 100% November 20178 Lake View MHP, LLC 100% December, 2018 Maple Hills MHP, LLC 100% All intercompany transactions and balances have been eliminated in consolidation. The Company does not have a majority or minority interest in any other company, either consolidated or unconsolidated. Revenue Recognition The Company follows Topic 606 of the FASB Accounting Standards Codification for revenue recognition and ASU 2014-09. On January 1, 2018, the Company adopted ASU 2014-09, which is a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. The Company considers revenue realized or realizable and earned when all the five following criteria are met: (1) Identify the Contract with a Customer, (2) Identify the Performance Obligations in the Contract, (3) Determine the Transaction Price, (4) Allocate the Transaction Price to the Performance Obligations in the Contract, and (5) Recognize Revenue When (or As) the Entity Satisfies a Performance Obligation. Results for reporting periods beginning after January 1, 2018 are presented under ASU 2014-09, while prior period amounts are not adjusted and continue to be reported under the previous accounting standards. There was no impact to revenues as a result of applying ASU 2014-09 for the quarter ended March 31, 2019, and there have not been any significant changes to our business processes, systems, or internal controls as a result of implementing the standard. The Company recognizes rental income revenues on a monthly basis based on the terms of the lease agreement which are for either the land or a combination of both, the mobile home and land. Home sales revenues are recognized upon the sale of a home with an executed sales agreement. The Company has deferred revenues from home lease purchase options and records those option fees as deferred revenues and then records them as revenues when (1) the lease purchase option term is completed and title has been transferred, or (2) the leaseholder defaults on the lease terms resulting in a termination of the agreement which allows us to keep any payments as liquidated damages. Accounts Receivable Accounts receivable consist primarily of amounts currently due from residence. Accounts receivables are reported in the balance sheet at outstanding principal adjusted for any charge-offs and the allowance for losses. The Company records an allowance for bad debt when receivables are over 90 days old. Acquisitions The Company accounts for acquisitions in accordance with ASC 805, Business Combinations (“ASC 805”) and allocates the purchase price of the property based upon the fair value of the assets acquired, which generally consist of land, site and land improvements, buildings and improvements and rental homes. The Company allocates the purchase price of an acquired property generally determined by internal evaluation as well as third-party appraisal of the property obtained in conjunction with the purchase. Net Income (Loss) Per Share Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding plus the weighted average number of net shares that would be issued upon exercise of stock options pursuant to the treasury stock method. Total dilutive securities outstanding as of March 31, 2019 and 2018 totaled 541,334 and 698,000 stock options, respectively and 0 and 786,695 convertible shares, respectively, which are not included in dilutive loss per share as the effect would be anti-dilutive. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company’s significant accounting estimates and assumptions affecting the consolidated financial statements were the estimates and assumptions used in valuation of equity and derivative instruments. Those significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to those estimates or assumptions, and certain estimates or assumptions are difficult to measure or value. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Management regularly reviews its estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such reviews, and if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates. Significant estimates include the assumptions used in valuing equity-based transactions, valuation of deferred tax assets, depreciable lives of property and equipment and valuation of investment property. Investment Property and Equipment and Depreciation Property and equipment are carried at cost. Depreciation for Sites and Building is computed principally on the straight-line method over the estimated useful lives of the assets (ranging from 15 to 25 years). Depreciation of Improvements to Sites and Buildings, Rental Homes and Equipment and Vehicles is computed principally on the straight-line method over the estimated useful lives of the assets (ranging from 3 to 25 years). Land Development Costs are not depreciated until they are put in use, at which time they are capitalized as Sites and Land Improvements. Interest Expense pertaining to Land Development Costs are capitalized. Maintenance and Repairs are charged to expense as incurred and improvements are capitalized. The costs and related accumulated depreciation of property sold or otherwise disposed of are removed from the financial statement and any gain or loss is reflected in the current year’s results of operations. Impairment Policy The Company applies Financial Accounting Standards Board Accounting Standards Codification (“ASC”) 360-10, Property, Plant & Equipment (“ASC 360-10”) to measure impairment in real estate investments. Rental properties are individually evaluated for impairment when conditions exist which may indicate that it is probable that the sum of expected future cash flows (on an undiscounted basis without interest) from a rental property is less than the carrying value under its historical net cost basis. These expected future cash flows consider factors such as future operating income, trends and prospects as well as the effects of leasing demand, competition and other factors. Upon determination that a permanent impairment has occurred, rental properties are reduced to their fair value. For properties to be disposed of, an impairment loss is recognized when the fair value of the property, less the estimated cost to sell, is less than the carrying amount of the property measured at the time there is a commitment to sell the property and/or it is actively being marketed for sale. A property to be disposed of is reported at the lower of its carrying amount or its estimated fair value, less its cost to sell. Subsequent to the date that a property is held for disposition, depreciation expense is not recorded. Cash and Cash Equivalents The Company considers all highly liquid financial instruments purchased with an original maturity of three months or less to be cash equivalents. The Company maintains cash balances at banks and deposits at times may exceed federally insured limits. Management believes that the financial institutions that hold the Company's cash are financially secure and, accordingly, minimal credit risk exists. At March 31, 2019 and December 31, 2018, the Company had no cash balances above the FDIC-insured limit, respectively. Stock Based Compensation All stock based payments to employees, nonemployee consultants, and to nonemployee directors for their services as directors, including any grants of restricted stock and stock options, are measured at fair value on the grant date and recognized in the statements of operations as compensation or other expense over the relevant service period in accordance with FASB Accounting Standards Codification Topic 718. Stock based payments to nonemployees are recognized as an expense over the period of performance. Such payments are measured at fair value at the earlier of the date a performance commitment is reached or the date performance is completed. In addition, for awards that vest immediately and are nonforfeitable the measurement date is the date the award is issued. The Company recorded stock option expense of $8 and $17 during the three months ended March 31, 2019 and 2018, respectively. Fair Value of Financial Instruments We follow paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of our financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of our financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (“U.S. GAAP”) and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. Recent Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 requires that entities use a new forward looking “expected loss” model that generally will result in the earlier recognition of allowance for credit losses. The measurement of expected credit losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. ASU No. 2016-13 is effective for annual reporting periods, including interim reporting periods within those periods, beginning after December 15, 2019. The Company is currently evaluating the potential impact this standard may have on the consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, “Leases.” ASU 2016-02 amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. The standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. ASU 2016-02 will be effective for annual reporting periods beginning after December 15, 2018. Early adoption is permitted. The Company has evaluated the potential impact this standard may have on the consolidated financial statements and determined that it had no impact on the consolidated financial statements. In June 2018, the FASB issued ASU 2018-07 “Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting.” Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying Consolidated Financial Statements. |
GOING CONCERN
GOING CONCERN | 3 Months Ended |
Mar. 31, 2019 | |
Going Concern | |
GOING CONCERN | The ability of the Company to continue its operations as a going concern is dependent on management’s plans, which include the raising of capital through debt and/or equity markets with some additional funding from other traditional financing sources, including term notes, until such time that funds provided by operations are sufficient to fund working capital requirements. There is substantial doubt about the Company’s ability to continue as a going concern. The Company will require additional funding to finance the growth of its current and expected future operations as well as to achieve its strategic objectives. The Company believes its current available cash along with anticipated revenues may be insufficient to meet its cash needs for the near future. There can be no assurance that financing will be available in amounts or terms acceptable to the Company, if at all. The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. These unaudited condensed consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern. Our working capital has been provided by our operating activities and our related party note. As of March 31, 2019, the related party entity with a common ownership to the Company’s president loaned the Company $897,708 for costs related to Reorganization cost and working capital. The related party note has a five-year term with no annual interest and principal payments are deferred to maturity date for a total credit line of $1.5 million. Except our line of credit, generally, our promissory notes on our acquisitions range from 4.5% to 7.0% with 20 to 25 years principal amortization. Two of the promissory notes had an initial 6 months period on interest only payments. The Line of Credit is interest only payment based on 8%, and 10% deferred till maturity to be paid with principal balance. We plan to meet our short-term liquidity requirements of approximately $1,890,348 for the next twelve months, generally through available cash as well as net cash provided by operating activities and availability under our existing related party note of $897,708. We also have availability from our lenders under our loan agreements for Capital expenditure needs on our acquisitions. We expect these resources to help the Company meet operating working capital requirements. The ability of the Company to continue its operations as a going concern is dependent on management’s plans, which include raising of capital through debt and/or equity markets with some additional funding from other traditional financing sources, including term notes. |
FIXED ASSETS
FIXED ASSETS | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
FIXED ASSETS | Property and equipment consists of the following as of: March 31, 2019 December 31, 2018 Land $ 4,602,271 $ 4,357,950 Site and Land Improvements 6,781,845 6,781,845 Buildings and Improvements 1,474,736 1,441,222 Acquisition Cost 151,007 140,758 13,009,859 12,721,775 Less: accumulated depreciation and amortization (802,516 ) (699,184 ) $ 12,207,343 $ 12,022,591 Depreciation and amortization expense totaled $134,926 and $132,822 for the three months ended March 31, 2019, and 2018 , During the three months ended March 31, 2019 the Company acquired the 25% minority interest in Pecan Grove MHP LLC resulting in a purchase price difference of 244,321 that was allocated to land. The company also invested in additional buildings and improvements totaling $33,514 and $3,502 for the three months ended March 31, 2019 and 2018, respectively. As of March 31, 2019, the Company wrote off mortgage cost of $68,195 and capitalized $110,039 of mortgage cost related to the refinancing from five of our nine existing communities. |
PROMISSORY NOTES
PROMISSORY NOTES | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
PROMISSORY NOTES | During the years ended December 31, 2017 and 2016, the company entered into promissory notes payable to lenders related to the acquisition of seven manufactured housing communities. During the three months ended March 31, 2019, the Company refinanced a total of $4,942,319 from our current loans payable to $8,241,000 of new notes payable from five of our nine existing communities, resulting in an additional loan payable of $3,320,859. The Company used the additional loans payable proceeds from the refinance to retire our Convertible Note Payable of $2,754,550 plus accrued interest. As of March 31, 2019, the Company wrote off mortgage cost of $68,195 and capitalized $110,039 of mortgage cost due to the refinancing. Except our line of credit, generally, the promissory notes range from 4.5% to 7.0% with 20 to 25 years principal amortization. Two of the promissory notes had an initial 6 months period on interest only payments. The Line of Credit is interest only payment based on 8%, and 10% deferred till maturity to be paid with principal balance. The Line of Credit originally awarded the lender 455,000 shares of common stock as compensation, which resulted in making the lender a related party due to their significant ownership. The promissory notes are secured by the real estate assets, and the line of credit is guaranteed by the principal stockholder of the company. During the three months ended March 31, 2019, the Company paid off the entire balance on the Line of Credit of $2,754,550 plus interest and amended the agreement to allow for the redeployment of the $3,000,000 available, eliminated the conversion option whereby the lender can convert the ratio of total outstanding debt at time of exercise of the option into an amount of newly issued shares of the company’s common stock equal determined by dividing the outstanding indebtedness by $3,000,000 multiplied by 10% with a cap of 864,500 shares. The amendment resulted in issuing an additional 545,000 shares with a fair value of $305,200 for a total of 1,000,000 shares awarded to the lender. The line of credit gives the lender the right and option to purchase it’s pro rata share of debt or equity securities issued to maintain up to 10% equity interest in the Company at the most recent price of any equity transaction for seven years from the amendment dated February 26, 2019. The following are terms of our secured outstanding debt: Maturity Interest Balance Balance Date Rate 03/31/2019 12/31/18 Butternut MHP Land LLC 3/30/20 6.500 % $ 1,129,802 $ 1,134,971 Butternut MHP Land LLC Mezz 4/1/27 7.000 % 285,318 287,086 Pecan Grove MHP LLC 2/22/29 5.250 % 3,150,000 1,270,577 Azalea MHP LLC 3/1/29 5.400 % 843,175 598,571 Holly Faye MHP LLC 3/1/29 5.400 % 579,825 462,328 Chatham MHP LLC 4/1/24 5.875 % 1,793,000 1,366,753 Lake View MHP LLC 3/1/29 5.400 % 1,875,000 1,222,521 Maple MHP LLC 1/1/23 5.125 % 2,728,670 2,743,303 Totals note payables 12,384,791 9,086,110 Convertible notes payable 12/12/21 18.000 % - 2,754,550 Related Party notes payable 9/30/22 (*) 897,708 890,632 Total convertible note and notes payable including related party $ 13,282,499 $ 12,731,292 (*) Maturities of Long Term Obligations for Five Years and Beyond The minimum annual principal payments of notes payable at March 31, 2019 by fiscal year were: The minimum annual principal payments of notes payable at September 30, 2018 were: 2019 $ 164,981 2020 1,332,457 2021 230,828 2022 1,141,403 2023 and Thereafter 10,412,830 Total minimum principal payments $ 13,282,499 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | From time to time, the Company may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise that may harm its business. The Company is currently not aware of any such legal proceedings or claims that they believe will have, individually or in the aggregate, a material adverse effect on its business, financial condition or operating results. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2019 | |
Stockholders' deficit | |
STOCKHOLDERS' EQUITY | Preferred Stock Our Articles of Incorporation, as amended, further authorize the Board of Directors to issue, from time to time, without stockholder approval, up to 10,000,000 shares of preferred stock ($0.01par value). On May 8, 2019, we filed a certificate of designation with the Nevada Secretary of State to establish our Series A Preferred Stock. We designated a total of 4,000,000 shares of Preferred Stock as “Series A Cumulative Convertible Preferred Stock.” In the first quarter of 2019, we executed Subscription Agreements relating to the sale of 280,000 shares of our Series A Cumulative Convertible Preferred Stock for a total of $700,000 in cash. This is a part of a total of $10,000,000 that we are seeking through the sale of shares of our preferred stock to acquire assets of manufactured housing communities in our pipeline. The preferred share that will be issued will provide purchasers with an annual return of 8% annually, paid in monthly distributions, and 1.5 times the initial investment at redemption after 5 years for a total IRR of approximately 16%. Our Series A Cumulative Convertible Preferred Stockholder shall have the right to convert into common stock at $2.50 per share at any time. The Company shall have the right, but not the obligation, to cause a conversion of the shares of its Series A Preferred Stock into shares of our Common Stock at a conversion rate of $2.50 per share of Common Stock when the Market Price of the shares of our Common Stock reaches $2.50. Our Series A Cumulative Convertible Preferred Stock have liquidity rights over our common shareholders. Our Series A Cumulative Convertible Preferred Stock requires that the Company may not authorize or issue any class or series of equity securities ranking senior to the Shares as to dividends or distributions upon liquidation or amend our charter to materially and adversely change the terms of the shares of Series A Preferred Stock without the affirmative vote of at least two-thirds of the votes entitled to be cast on such matter by holders of outstanding shares of Series A Preferred Stock, voting together as a class. Otherwise, holders of the shares of Series A Preferred Stock will not have any voting rights. On May 8, 2019, we designated 1,000,000 shares of Series B Cumulative Redeemable Preferred Stock, which we refer to as the Series B Preferred Stock. The Series B Preferred Stock will rank, as to dividend rights and rights upon our liquidation, dissolution, or winding up, senior to our Common Stock and pari passu Common Stock Our authorized capital stock consists of 200,000,000 shares of common stock, par value $0.01 per share. Stock issued for Service In November 2018, the Company issued 350,000 shares of stock for services to an investment bank for advisory services with a fair value of $171,500. $24,500 of that fair value was expensed during the three months ended March 31, 2019. In February 2019, the Company issued an additional 545,000 shares of stock for services to the same lender under an amendment to the line of credit facility agreement with a fair value of $305,200. Equity Incentive Plan In December 2017, the Board of Directors, with the approval of a majority of the stockholders of the Company, adopted the Equity Incentive Plan (the “Plan”) which will be administered by a committee appointed by the Board. The Company, under its Equity Incentive Plan, issues options to various officers and directors. One third of the options vest immediately, and two thirds vest in equal annual installments over a two-year period. All of the options are exercisable at a purchase price of $.01 per share. The Company recorded stock option expense of $8 and $245 during the three months ended March 31, 2019 and 2018, respectively. The following table summarizes the stock options outstanding as of March 31, 2019 and 2018: Weighted Weighted average Average remaining Number of exercise price contractual options (per share) term (in years) Outstanding at December 31, 2018 541,334 $ 0.01 9.0 Granted - - - Exercised - - - Forfeited / cancelled / expired - - - Outstanding at March 31, 2019 541,334 $ 0.01 8.75 The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the Company’s closing stock price at fiscal year-end and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holder had all options holders exercised their options on March 31, 2019. As of March 31, 2019, there were 377,000 “in-the-money” options with an aggregate intrinsic value of $373,230. The following table summarizes information concerning options outstanding as of March 31, 2019 and December 31, 2018: The table below presents the weighted average expected life in years of options granted under the Plan as described above. The riskfree rate of the stock options is based on the U.S. Treasury yield curve in effect at the time of grant, which corresponds with the expected term of the option granted. The fair value of stock options was estimated using the Black Scholes option pricing model with the following assumptions for grants made during the periods indicated. March 31, December 31, Stock option assumptions 2019 2018 Risk-free interest rate - 1.95 % Expected dividend yield - 0.00 % Expected volatility - 16.71 % Expected life of options (in years) - 10 Non-Controlling Interest Prior to January 1st, 2019, the Company owned 75% of membership interest in Pecan Grove MHP LLC. The remaining 25% was owned by unaffiliated non-controlling investors. In January 2019, we agreed to acquire the 25% minority interest in Pecan Grove, and we issued 2,000,000 shares of our common stock to Gvest Real Estate for the minority interest acquisition which were valued at the historical cost value of $537,562. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | As of March 31, 2019, an entity with a common ownership to the Company’s founder loaned the Company $897,708 for reorganization cost and working capital. The note has a five-year term with no annual interest and principal payments are deferred to maturity date. The Company recorded an In-kind contribution of interest in the amount of $14,004 and $0 for the three months ended March 31, 2019 and 2018, respectively. During the year ended December 31, 2017, the Company entered into a debt agreement for a revolving line of credit. The Line of Credit is interest only payment based on 8%, and 10% deferred until maturity to be paid with principal balance. The Line of Credit is personally guaranteed by the owner of the principal stockholder of the Company. During the three months ended March 31, 2019, the Company paid off the entire balance on the Line of Credit of $2,754,550 plus interest and amended the agreement to allow for the redeployment of the $3,000,000 available, eliminated the conversion option whereby the lender can convert the ratio of total outstanding debt at time of exercise of the option into an amount of newly issued shares of the company’s common stock equal determined by dividing the outstanding indebtedness by $3,000,000 multiplied by 10% with a cap of 864,500 shares. The amendment resulted in issuing an additional 545,000 shares with a fair value of $305,200 for a total of 1,000,000 shares awarded to the lender. The line of credit gives the lender an option to purchase up to 10% of outstanding common shares at the most recent price of any equity transaction. In January 2019, we executed an agreement to acquire the 25% minority interest in Pecan Grove, and issued 2,000,000 shares of our common stock to Gvest Real Estate for the minority interest acquisition which were valued at the historical cost value of $537,562. During the three months ended March 31, 2019, The Company recorded $12,000 in revenues related to property management consulting services provided to an entity with common ownership as our founder and Chairman of the Board. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | In April 2019, we completed the acquisition of a manufactured housing community comprised of 79 pads, located in the Columbia, SC metro area totaling $1,965,000. In May 2019, we completed the acquisition of a manufactured housing community comprised of 96 pads, located in Chester, SC totaling $2,500,000. In April and May 2019, the Company used $270,000 and $1,000,000, respectively from its Line of Credit for the two above acquisitions. In April and May 2019, we executed Subscription Agreements relating to the sale of 90,000 shares of our Series A Cumulative Convertible Preferred Stock for a total of $225,000 in cash, including 25,000 from a related party. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The Company prepares its consolidated financial statements under the accrual basis of accounting, in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The Company’s subsidiaries are all formed in the state of North Carolina as Limited Liability Companies. The acquisition and date of consolidation are as follows: Date of Consolidation Subsidiary Ownership October 2016 Pecan Grove MHP, LLC 100% April 2018 Butternut MHP, LLC 100% November 2018 Azalea MHP, LLC 100% November 2018 Holly Faye MHP, LLC 100% November 2018 Chatham MHP, LLC 100% November 20178 Lake View MHP, LLC 100% December, 2018 Maple Hills MHP, LLC 100% All intercompany transactions and balances have been eliminated in consolidation. The Company does not have a majority or minority interest in any other company, either consolidated or unconsolidated. |
Revenue Recognition | The Company follows Topic 606 of the FASB Accounting Standards Codification for revenue recognition and ASU 2014-09. On January 1, 2018, the Company adopted ASU 2014-09, which is a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. The Company considers revenue realized or realizable and earned when all the five following criteria are met: (1) Identify the Contract with a Customer, (2) Identify the Performance Obligations in the Contract, (3) Determine the Transaction Price, (4) Allocate the Transaction Price to the Performance Obligations in the Contract, and (5) Recognize Revenue When (or As) the Entity Satisfies a Performance Obligation. Results for reporting periods beginning after January 1, 2018 are presented under ASU 2014-09, while prior period amounts are not adjusted and continue to be reported under the previous accounting standards. There was no impact to revenues as a result of applying ASU 2014-09 for the quarter ended March 31, 2019, and there have not been any significant changes to our business processes, systems, or internal controls as a result of implementing the standard. The Company recognizes rental income revenues on a monthly basis based on the terms of the lease agreement which are for either the land or a combination of both, the mobile home and land. Home sales revenues are recognized upon the sale of a home with an executed sales agreement. The Company has deferred revenues from home lease purchase options and records those option fees as deferred revenues and then records them as revenues when (1) the lease purchase option term is completed and title has been transferred, or (2) the leaseholder defaults on the lease terms resulting in a termination of the agreement which allows us to keep any payments as liquidated damages. |
Accounts Receivable | Accounts receivable consist primarily of amounts currently due from residence. Accounts receivables are reported in the balance sheet at outstanding principal adjusted for any charge-offs and the allowance for losses. The Company records an allowance for bad debt when receivables are over 90 days old. |
Acquisitions | The Company accounts for acquisitions in accordance with ASC 805, Business Combinations (“ASC 805”) and allocates the purchase price of the property based upon the fair value of the assets acquired, which generally consist of land, site and land improvements, buildings and improvements and rental homes. The Company allocates the purchase price of an acquired property generally determined by internal evaluation as well as third-party appraisal of the property obtained in conjunction with the purchase. |
Net Income (Loss) Per Share | Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding plus the weighted average number of net shares that would be issued upon exercise of stock options pursuant to the treasury stock method. Total dilutive securities outstanding as of March 31, 2019 and 2018 totaled 541,334 and 698,000 stock options, respectively and 0 and 786,695 convertible shares, respectively, which are not included in dilutive loss per share as the effect would be anti-dilutive. |
Use of Estimates | The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company’s significant accounting estimates and assumptions affecting the consolidated financial statements were the estimates and assumptions used in valuation of equity and derivative instruments. Those significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to those estimates or assumptions, and certain estimates or assumptions are difficult to measure or value. Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Management regularly reviews its estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such reviews, and if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates. Significant estimates include the assumptions used in valuing equity-based transactions, valuation of deferred tax assets, depreciable lives of property and equipment and valuation of investment property. |
Investment Property and Equipment and Depreciation | Property and equipment are carried at cost. Depreciation for Sites and Building is computed principally on the straight-line method over the estimated useful lives of the assets (ranging from 15 to 25 years). Depreciation of Improvements to Sites and Buildings, Rental Homes and Equipment and Vehicles is computed principally on the straight-line method over the estimated useful lives of the assets (ranging from 3 to 25 years). Land Development Costs are not depreciated until they are put in use, at which time they are capitalized as Sites and Land Improvements. Interest Expense pertaining to Land Development Costs are capitalized. Maintenance and Repairs are charged to expense as incurred and improvements are capitalized. The costs and related accumulated depreciation of property sold or otherwise disposed of are removed from the financial statement and any gain or loss is reflected in the current year’s results of operations. |
Impairment Policy | The Company applies Financial Accounting Standards Board Accounting Standards Codification (“ASC”) 360-10, Property, Plant & Equipment (“ASC 360-10”) to measure impairment in real estate investments. Rental properties are individually evaluated for impairment when conditions exist which may indicate that it is probable that the sum of expected future cash flows (on an undiscounted basis without interest) from a rental property is less than the carrying value under its historical net cost basis. These expected future cash flows consider factors such as future operating income, trends and prospects as well as the effects of leasing demand, competition and other factors. Upon determination that a permanent impairment has occurred, rental properties are reduced to their fair value. For properties to be disposed of, an impairment loss is recognized when the fair value of the property, less the estimated cost to sell, is less than the carrying amount of the property measured at the time there is a commitment to sell the property and/or it is actively being marketed for sale. A property to be disposed of is reported at the lower of its carrying amount or its estimated fair value, less its cost to sell. Subsequent to the date that a property is held for disposition, depreciation expense is not recorded. |
Cash and Cash Equivalents | The Company considers all highly liquid financial instruments purchased with an original maturity of three months or less to be cash equivalents. The Company maintains cash balances at banks and deposits at times may exceed federally insured limits. Management believes that the financial institutions that hold the Company's cash are financially secure and, accordingly, minimal credit risk exists. At March 31, 2019 and December 31, 2018, the Company had no cash balances above the FDIC-insured limit, respectively. |
Stock Based Compensation | All stock based payments to employees, nonemployee consultants, and to nonemployee directors for their services as directors, including any grants of restricted stock and stock options, are measured at fair value on the grant date and recognized in the statements of operations as compensation or other expense over the relevant service period in accordance with FASB Accounting Standards Codification Topic 718. Stock based payments to nonemployees are recognized as an expense over the period of performance. Such payments are measured at fair value at the earlier of the date a performance commitment is reached or the date performance is completed. In addition, for awards that vest immediately and are nonforfeitable the measurement date is the date the award is issued. The Company recorded stock option expense of $8 and $17 during the three months ended March 31, 2019 and 2018, respectively. |
Fair Value of Financial Instruments | We follow paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of our financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of our financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (“U.S. GAAP”) and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. |
Recent Accounting Pronouncements | In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 requires that entities use a new forward looking “expected loss” model that generally will result in the earlier recognition of allowance for credit losses. The measurement of expected credit losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. ASU No. 2016-13 is effective for annual reporting periods, including interim reporting periods within those periods, beginning after December 15, 2019. The Company is currently evaluating the potential impact this standard may have on the consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, “Leases.” ASU 2016-02 amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. The standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. ASU 2016-02 will be effective for annual reporting periods beginning after December 15, 2018. Early adoption is permitted. The Company has evaluated the potential impact this standard may have on the consolidated financial statements and determined that it had no impact on the consolidated financial statements. In June 2018, the FASB issued ASU 2018-07 “Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting.” Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying Consolidated Financial Statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of subsidiaries | Date of Consolidation Subsidiary Ownership October 2016 Pecan Grove MHP, LLC 100% April 2018 Butternut MHP, LLC 100% November 2018 Azalea MHP, LLC 100% November 2018 Holly Faye MHP, LLC 100% November 2018 Chatham MHP, LLC 100% November 20178 Lake View MHP, LLC 100% December, 2018 Maple Hills MHP, LLC 100% |
FIXED ASSETS (Tables)
FIXED ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | March 31, 2019 December 31, 2018 Land $ 4,602,271 $ 4,357,950 Site and Land Improvements 6,781,845 6,781,845 Buildings and Improvements 1,474,736 1,441,222 Acquisition Cost 151,007 140,758 13,009,859 12,721,775 Less: accumulated depreciation and amortization (802,516 ) (699,184 ) $ 12,207,343 $ 12,022,591 |
PROMISSORY NOTES (Tables)
PROMISSORY NOTES (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Summary of secured outstanding debt | Maturity Interest Balance Balance Date Rate 03/31/2019 12/31/18 Butternut MHP Land LLC 3/30/20 6.500 % $ 1,129,802 $ 1,134,971 Butternut MHP Land LLC Mezz 4/1/27 7.000 % 285,318 287,086 Pecan Grove MHP LLC 2/22/29 5.250 % 3,150,000 1,270,577 Azalea MHP LLC 3/1/29 5.400 % 843,175 598,571 Holly Faye MHP LLC 3/1/29 5.400 % 579,825 462,328 Chatham MHP LLC 4/1/24 5.875 % 1,793,000 1,366,753 Lake View MHP LLC 3/1/29 5.400 % 1,875,000 1,222,521 Maple MHP LLC 1/1/23 5.125 % 2,728,670 2,743,303 Totals note payables 12,384,791 9,086,110 Convertible notes payable 12/12/21 18.000 % - 2,754,550 Related Party notes payable 9/30/22 (*) 897,708 890,632 Total convertible note and notes payable including related party $ 13,282,499 $ 12,731,292 |
Summary of minimum annual principal payments of notes payable | The minimum annual principal payments of notes payable at September 30, 2018 were: 2019 $ 164,981 2020 1,332,457 2021 230,828 2022 1,141,403 2023 and Thereafter 10,412,830 Total minimum principal payments $ 13,282,499 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Stockholders' deficit | |
Summary of stock options outstanding | Weighted Weighted average Average remaining Number of exercise price contractual options (per share) term (in years) Outstanding at December 31, 2018 541,334 $ 0.01 9.0 Granted - - - Exercised - - - Forfeited / cancelled / expired - - - Outstanding at March 31, 2019 541,334 $ 0.01 8.75 |
Assumptions of stock options granted | March 31, December 31, Stock option assumptions 2019 2018 Risk-free interest rate - 1.95 % Expected dividend yield - 0.00 % Expected volatility - 16.71 % Expected life of options (in years) - 10 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION (Details) | 3 Months Ended |
Mar. 31, 2019 | |
Subsidiary 1 | |
Name of subsidiary | Pecan Grove MHP, LLC |
Date of consolidation | Oct-16 |
Ownership | 100.00% |
Subsidiary 2 | |
Name of subsidiary | Butternut MHP, LLC |
Date of consolidation | Apr-18 |
Ownership | 100.00% |
Subsidiary 3 | |
Name of subsidiary | Azalea MHP, LLC |
Date of consolidation | Nov-18 |
Ownership | 100.00% |
Subsidiary 4 | |
Name of subsidiary | Holly Faye MHP, LLC |
Date of consolidation | Nov-18 |
Ownership | 100.00% |
Subsidiary 5 | |
Name of subsidiary | Chatham MHP, LLC |
Date of consolidation | Nov-18 |
Ownership | 100.00% |
Subsidiary 6 | |
Name of subsidiary | Lake View MHP, LLC |
Date of consolidation | November 20178 |
Ownership | 100.00% |
Subsidiary 7 | |
Name of subsidiary | Maple Hills MHP, LLC |
Date of consolidation | December, 2018 |
Ownership | 100.00% |
FIXED ASSETS (Details)
FIXED ASSETS (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Abstract] | ||
Land | $ 4,602,721 | $ 4,357,950 |
Site and Land Improvements | 6,781,845 | 6,781,845 |
Buildings and Improvements | 1,474,736 | 1,441,222 |
Acquisition Cost | 151,007 | 140,758 |
Total Investment Property | 13,009,859 | 12,721,775 |
Less: accumulated depreciation and amortization | (802,516) | (699,184) |
Net Investment Property | $ 12,207,343 | $ 12,022,591 |
FIXED ASSETS (Details Narrative
FIXED ASSETS (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization expense | $ 134,926 | $ 132,822 |
PROMISSORY NOTES (Details)
PROMISSORY NOTES (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Notes Payable | $ 12,384,791 | $ 9,086,110 |
Convertible Notes Payable | 0 | 2,754,550 |
Related Party Notes Payable | 897,708 | 890,632 |
Total Convertible Note and Notes Payable including Related Party | $ 13,282,499 | 12,731,292 |
Debt Instrument 1 | ||
Maturity Date | Mar. 30, 2020 | |
Interest Rate | 6.50% | |
Notes Payable | $ 1,129,802 | 1,134,971 |
Debt Instrument 2 | ||
Maturity Date | Apr. 1, 2027 | |
Interest Rate | 7.00% | |
Notes Payable | $ 285,318 | 287,086 |
Debt Instrument 3 | ||
Maturity Date | Feb. 22, 2029 | |
Interest Rate | 5.25% | |
Notes Payable | $ 3,150,000 | 1,270,577 |
Debt Instrument 4 | ||
Maturity Date | Mar. 1, 2029 | |
Interest Rate | 5.40% | |
Notes Payable | $ 843,175 | 598,571 |
Debt Instrument 5 | ||
Maturity Date | Mar. 1, 2029 | |
Interest Rate | 5.40% | |
Notes Payable | $ 579,825 | 462,328 |
Debt Instrument 6 | ||
Maturity Date | Apr. 1, 2024 | |
Interest Rate | 5.875% | |
Notes Payable | $ 1,793,000 | 1,366,753 |
Debt Instrument 7 | ||
Maturity Date | Mar. 1, 2029 | |
Interest Rate | 5.40% | |
Notes Payable | $ 1,875,000 | 1,222,521 |
Debt Instrument 8 | ||
Maturity Date | Jan. 1, 2023 | |
Interest Rate | 5.125% | |
Notes Payable | $ 2,728,670 | $ 2,743,303 |
Debt Instrument 9 | ||
Maturity Date | Dec. 12, 2021 | |
Interest Rate | 18.00% | |
Debt Instrument 10 | ||
Maturity Date | Sep. 30, 2022 | |
Interest Rate | 0.00% |
PROMISSORY NOTES (Details 1)
PROMISSORY NOTES (Details 1) | Mar. 31, 2019USD ($) |
Debt Disclosure [Abstract] | |
2019 | $ 164,981 |
2020 | 1,332,457 |
2021 | 230,828 |
2022 | 1,141,403 |
2023 and Thereafter | 10,412,830 |
Total minimum principal payments | $ 13,282,499 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) | 3 Months Ended |
Mar. 31, 2019$ / sharesshares | |
Stockholders' deficit | |
Number of options outstanding, beginning | shares | 541,334 |
Number of options granted | shares | 0 |
Number of options exercised | shares | 0 |
Number of options forfeited/cancelled/expired | shares | 0 |
Number of options outstanding, ending | shares | 541,334 |
Weighted average exercise price outstanding, beginning | $ / shares | $ 0.01 |
Weighted average exercise price granted | $ / shares | 0 |
Weighted average exercise price exercised | $ / shares | 0 |
Weighted average exercise price forfeited/cancelled/expired | $ / shares | 0 |
Weighted average exercise price outstanding, ending | $ / shares | $ 0.01 |
Weighted average remaining contractual terms, beginning | 9 years |
Weighted average remaining contractual terms, ending | 8 years 9 months |
STOCKHOLDERS' EQUITY (Details 1
STOCKHOLDERS' EQUITY (Details 1) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Stockholders' deficit | ||
Risk-free interest rate | 0.00% | 1.95% |
Expected dividend yield | 0.00% | 0.00% |
Expected volatility | 0.00% | 16.71% |
Expected life of options (in years) | 0 years | 10 years |
STOCKHOLDERS' EQUITY (Details N
STOCKHOLDERS' EQUITY (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Stockholders' deficit | |||
Common Stock, Par Value | $ .01 | $ .01 | |
Common Stock, Authorized | 200,000,000 | 200,000,000 | |
Stock compensation expense | $ 8 | $ 17 | |
Aggregate intrinsic value of all stock options | 373,230 | ||
Minority interest distributions | $ 0 | $ 4,498 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |||
Loans Payable - related party | $ 897,708 | $ 890,632 | |
Imputed interest | 14,004 | $ 0 | |
Convertible Note Payable - related party | $ 0 | $ 2,754,550 |