Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2021shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Sep. 30, 2021 |
Document Fiscal Year Focus | 2021 |
Document Fiscal Period Focus | Q3 |
No Trading Symbol Flag | true |
Entity Registrant Name | REDWOOD MORTGAGE INVESTORS IX |
Entity Central Index Key | 0001448038 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | false |
Entity Common Stock, Shares Outstanding | 0 |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Shell Company | false |
Document Quarterly Report | true |
Document Transition Report | false |
Entity File Number | 000-55601 |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 26-3541068 |
Entity Address, Address Line One | 177 Bovet Road |
Entity Address, Address Line Two | Suite 520 |
Entity Address, City or Town | San Mateo |
Entity Address, State or Province | CA |
Entity Address, Postal Zip Code | 94402 |
City Area Code | 650 |
Local Phone Number | 365-5341 |
Balance Sheets
Balance Sheets - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
ASSETS | ||
Cash, in banks | $ 1,553,909 | $ 2,299,113 |
Loan payments in trust | 99,078 | 130,898 |
Loans | ||
Principal | 73,539,360 | 82,274,807 |
Advances | 17,486 | 14,331 |
Accrued interest | 539,109 | 683,975 |
Prepaid interest | (804,164) | |
Loan balances secured by deeds of trust | 73,291,791 | 82,973,113 |
Allowance for loan losses | (55,000) | (55,000) |
Loan balances secured by deeds of trust, net | 73,236,791 | 82,918,113 |
Debt issuance costs, net | 27,402 | 68,506 |
Prepaid expenses | 31,520 | |
Other receivable | 1,094 | |
Total assets | 74,949,794 | 85,416,630 |
LIABILITIES AND MEMBERS’ CAPITAL | ||
Accounts payable and accrued liabilities | 76,690 | 99,516 |
Payable to related parties | 3,501 | 4,185 |
Line of credit | 1,100,000 | 10,000,000 |
Total liabilities | 1,180,191 | 10,103,701 |
Commitments and contingencies (Note 6) | ||
Members’ capital, net | 77,211,140 | 79,124,948 |
Receivable from manager (formation loan) | (3,441,537) | (3,812,019) |
Members’ capital, net of formation loan | 73,769,603 | 75,312,929 |
Total liabilities and members’ capital | $ 74,949,794 | $ 85,416,630 |
Statements of Income (Unaudited
Statements of Income (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenue | ||||
Interest income | $ 1,791,385 | $ 1,857,029 | $ 5,176,213 | $ 4,796,705 |
Interest expense | (108,493) | (122,618) | (368,173) | (169,362) |
Net interest income | 1,682,892 | 1,734,411 | 4,808,040 | 4,627,343 |
Late fees | 23,319 | 7,040 | 56,084 | 20,042 |
Total revenue, net | 1,706,211 | 1,741,451 | 4,864,124 | 4,647,385 |
Provision for (recovery of) loan losses | (75) | |||
Operations expense | ||||
Mortgage servicing fees | 49,921 | 48,500 | 153,881 | 134,831 |
Asset management fees | 141,390 | 135,321 | 424,170 | 405,963 |
Costs from Redwood Mortgage Corp., net (Note 3) | 70,022 | 72,181 | 214,284 | 72,181 |
Professional services | 144,765 | 156,005 | 518,860 | 452,090 |
Other | 15,079 | 3,331 | 37,777 | 10,678 |
Total operations expense | 421,177 | 415,338 | 1,348,972 | 1,075,743 |
Net income | 1,285,034 | 1,326,113 | 3,515,152 | 3,571,717 |
Members (99%) | 1,272,184 | 1,312,852 | 3,480,001 | 3,535,999 |
Manager (1%) | $ 12,850 | $ 13,261 | $ 35,151 | $ 35,718 |
Statements of Income (Parenthet
Statements of Income (Parenthetical) (Unaudited) - Redwood Mortgage Investors IX [Member] | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Members investment | 99.00% | 99.00% | 99.00% | 99.00% |
Manager investment | 1.00% | 1.00% | 1.00% | 1.00% |
Statement of Changes in Members
Statement of Changes in Members' Capital (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | ||
Beginning balance | $ 75,312,929 | ||||
Net income | $ 1,285,034 | $ 1,326,113 | 3,515,152 | $ 3,571,717 | |
Early withdrawal penalties | [1] | 11,388 | 12,468 | ||
Ending balance | 73,769,603 | 73,769,603 | |||
RMC [Member] | |||||
Early withdrawal penalties | 13,775 | 5,598 | 24,402 | 27,531 | |
Capital Members [Member] | |||||
Beginning balance | 79,043,284 | 81,547,630 | 80,801,456 | 81,755,930 | |
Net income | 1,272,184 | 1,312,852 | 3,480,001 | 3,535,999 | |
Organization and offering expenses allocated | (74,958) | (79,580) | (229,179) | (240,489) | |
Early withdrawal penalties | 0 | ||||
Ending balance | 78,543,243 | 81,373,590 | 78,543,243 | 81,373,590 | |
Capital Members [Member] | Earnings Distributed To Members [Member] | |||||
Partners capital accounts | (1,092,332) | (1,108,339) | (3,337,326) | (3,354,984) | |
Capital Members [Member] | Earnings Distributed Used In DRIP [Member] | |||||
Partners capital accounts | 545,868 | 567,813 | 1,679,151 | 1,730,609 | |
Capital Members [Member] | Member's Redemptions [Member] | |||||
Partners capital accounts | (1,150,803) | (866,786) | (3,850,860) | (2,053,475) | |
Managers Capital Net [Member] | |||||
Beginning balance | 204,075 | 155,725 | 181,774 | 133,268 | |
Net income | 12,850 | 13,261 | 35,151 | 35,718 | |
Early withdrawal penalties | 0 | ||||
Ending balance | 216,925 | 168,986 | 216,925 | 168,986 | |
Unallocated Organization and Offering Expenses [Member] | |||||
Beginning balance | (1,645,876) | (2,068,360) | (1,858,282) | (2,260,068) | |
Organization and offering expenses allocated | 74,958 | 79,580 | 229,179 | 240,489 | |
Early withdrawal penalties | 6,444 | 2,530 | 11,388 | 12,468 | |
Ending balance | (1,549,028) | (1,964,927) | (1,549,028) | (1,964,927) | |
Unallocated Organization and Offering Expenses [Member] | RMC [Member] | |||||
Organization and offering expenses repaid by RMC | 15,446 | 21,323 | 68,687 | 42,184 | |
Members Capital, Net [Member] | |||||
Beginning balance | 77,601,483 | 79,634,995 | 79,124,948 | 79,629,130 | |
Net income | 1,285,034 | 1,326,113 | 3,515,152 | 3,571,717 | |
Early withdrawal penalties | 6,444 | 2,530 | 11,388 | 12,468 | |
Ending balance | 77,211,140 | 79,577,649 | 77,211,140 | 79,577,649 | |
Members Capital, Net [Member] | RMC [Member] | |||||
Organization and offering expenses repaid by RMC | 15,446 | 21,323 | 68,687 | 42,184 | |
Members Capital, Net [Member] | Earnings Distributed To Members [Member] | |||||
Partners capital accounts | (1,092,332) | (1,108,339) | (3,337,326) | (3,354,984) | |
Members Capital, Net [Member] | Earnings Distributed Used In DRIP [Member] | |||||
Partners capital accounts | 545,868 | 567,813 | 1,679,151 | 1,730,609 | |
Members Capital, Net [Member] | Member's Redemptions [Member] | |||||
Partners capital accounts | $ (1,150,803) | $ (866,786) | $ (3,850,860) | $ (2,053,475) | |
[1] | The O&O expenses component of early withdrawal penalties are applied as a reduction to O&O expenses to be repaid by RMC to members’ capital on scheduled redemptions. The amounts credited are determined by the ratio between the amount of the formation loan and the amount of offering costs incurred by the company. |
Statements of Cash Flows (Unaud
Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Operations | ||
Interest income received | $ 6,125,243 | $ 4,658,819 |
Interest expense paid | (336,840) | (101,445) |
Late fees and other loan income | 87,904 | 20,042 |
Operations expense | (1,395,325) | (1,011,549) |
Total cash provided by operations | 4,480,982 | 3,565,867 |
Investing – loans | ||
Loans funded | (34,824,300) | (36,327,850) |
Principal collected | 42,683,651 | 25,301,168 |
Loan transferred from related mortgage fund | (4,671,760) | (2,296,677) |
Loans transferred to related mortgage funds | 2,559,588 | |
Loans sold to non-affiliate | 2,988,268 | 480,000 |
Advances made on loans | (3,155) | (3,634) |
Promissory note funded to related party | (850,000) | |
Total cash provided by (used in) investing | 8,732,292 | (13,696,993) |
Distributions to members | ||
Distributions to members | (5,484,633) | (3,650,319) |
Organization and offering expenses received, net | 68,687 | 42,184 |
Formation loan collected | (357,468) | |
Cash used in members' capital | (5,058,478) | (3,608,135) |
Advances | 8,255,000 | 19,250,000 |
Repayments | (17,155,000) | (9,250,000) |
Debt issuance costs | (109,526) | |
Cash (used in) provided by line of credit | (8,900,000) | 9,890,474 |
Total cash (used in) provided by financing | (13,958,478) | 6,282,339 |
Net decrease in cash | (745,204) | (3,848,787) |
Cash, beginning of period | 2,299,113 | 4,450,529 |
Cash, end of period | 1,553,909 | 601,742 |
Net income | 3,515,152 | 3,571,717 |
Adjustments to reconcile net income to net cash provided by operations | ||
Charge off of accrued interest | (11,858) | |
Amortization of debt issuance costs | 41,104 | 27,320 |
Provision for (recovery of) loan losses | (75) | |
Change in operating assets and liabilities | ||
Loan payments in trust | 31,820 | |
Accrued interest | 144,866 | (140,336) |
Prepaid interest | 804,164 | 14,308 |
Prepaid expenses | (31,520) | |
Other receivable | (1,094) | (19,200) |
Accounts payable and accrued liabilities | (22,826) | 45,452 |
Payable to related parties | (684) | 78,539 |
Total adjustments | 965,830 | (5,850) |
Total cash provided by operations | 4,480,982 | 3,565,867 |
Earnings Distributed To Members [Member] | ||
Distributions to members | ||
Distributions to members | (1,658,175) | (1,624,375) |
Member's Redemptions [Member] | ||
Distributions to members | ||
Distributions to members | $ (3,826,458) | $ (2,025,944) |
Statements of Cash Flows (Paren
Statements of Cash Flows (Parenthetical) (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Non cash financing activity in early withdrawal penalties | $ 24,402 | $ 27,531 |
Non cash investing activity principal charges | 0 | 20,068 |
Non cash investing activity loans transferred to held for sale | 0 | 7,534,512 |
Earnings Distributed To Members [Member] | ||
Earnings distributed used in DRIP | 1,679,151 | 1,730,609 |
Formation Loan [Member] | ||
Non cash financing activity in early withdrawal penalties | 13,014 | 15,063 |
Unallocated Organization and Offering Expenses [Member] | ||
Non cash financing activity in early withdrawal penalties | $ 11,388 | $ 12,468 |
Organization and General
Organization and General | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Organization and General | NOTE 1 – ORGANIZATION AND GENERAL Redwood Mortgage Investors IX, LLC (“RMI IX” or “the company”) is a Delaware limited liability company formed in October 2008 to engage in business as a mortgage lender and investor by making and holding-for-investment mortgage loans secured by California real estate, primarily through first and second deeds of trust. The company is externally managed by Redwood Mortgage Corp (“RMC” or “the manager”). RMC provides the personnel and services necessary for the company to conduct its business as the company has no employees of its own. The mortgage loans the company funds and invests in are arranged and generally are serviced by RMC. In the opinion of management of RMC, the accompanying unaudited financial statements contain all adjustments, consisting of normal, recurring adjustments, necessary to present fairly the financial information included therein. These unaudited financial statements should be read in conjunction with the audited financial statements included in the company’s Form 10-K for the year ended December 31, 2020, filed with the U.S. Securities and Exchange Commission (SEC). The results of operations for the three and nine months ended September 30, 2021 are not necessarily indicative of the operating results to be expected for the full year. The rights, duties and powers of the members and manager of the company are governed by the Ninth Amended and Restated Limited Liability Company Operating Agreement of RMI IX (the “Operating Agreement”), the Delaware Limited Liability Company Act and the California Revised Uniform Limited Liability Company Act. Members representing a majority of the outstanding units may, without the concurrence of the managers, vote to: (i) dissolve the company, (ii) amend the Operating Agreement, subject to certain limitations, (iii) approve or disapprove the sale of all or substantially all of the assets of the company or (iv) remove or replace one or all of the managers. Where there is only one manager, a majority in interest of the members is required to elect a new manager to continue the company business after a manager ceases to be a manager due to its withdrawal. The following is a summary of certain provisions of the Operating Agreement and is qualified in its entirety by the terms of the Operating Agreement. Members should refer to the Operating Agreement for complete disclosure of its provisions. The manager is solely responsible for managing the business and affairs of the company, subject to the voting rights of the members on specified matters. The manager acting alone has the power and authority to act for and bind the company. RMC is entitled to one percent ( 1 %) of the profits and losses of the company and to fees and reimbursements of qualifying costs as specified in the Operating Agreement. The company’s primary investment objectives are to: yield a favorable rate of return from the company’s business of making and/or investing in loans; preserve and protect the company’s capital by making and/or investing in loans secured by California real estate, preferably income-producing properties geographically situated in the San Francisco Bay Area and the coastal metropolitan regions of Southern California; and, generate and distribute cash flow from these mortgage lending and investing activities. Net income (or loss) is allocated among the members according to their respective capital accounts after one percent ( 1 %) of the net income (or loss) is allocated to the manager. The monthly results are subject to subsequent adjustment as a result of quarterly and year-end accounting and reporting. Federal and state income taxes are the obligation of the members, other than the annual California franchise tax and the California LLC cash receipts taxes paid by the company. The company’s net income, cash available for distribution, and net-distribution rate fluctuates depending on: loan origination volume and the balance of capital available to lend; the current and future interest rates negotiated with borrowers; line of credit advances, repayments and the interest rate thereon; loan sales to unaffiliated third parties, and any gains received thereon; the amount of fees and cost reimbursements to RMC; the timing and amount of other operating expenses, including expenses for professional services; the timing and amount of payments from RMC on the formation loan; and, fee and/or cost reimbursements waived, if any, from RMC. The ongoing sources of funds for loans are the proceeds (net of redemption of members’ capital and operating expenses) from: loan payoffs; borrowers’ monthly principal and interest payments; line of credit advances; loan sales to unaffiliated third parties; payments from RMC on the outstanding balance of the formation loan; and sale of units to members participating in the dividend reinvestment plan. The company intends to hold until maturity the loans in which it invests and does not presently intend to invest in mortgage loans primarily for the purpose of reselling such loans in the ordinary course of business; however, the company may sell mortgage loans (or fractional interests therein) when the manager determines that it appears to be advantageous for the company to do so, based upon then current interest rates, the length of time that the loan has been held by the company, the company’s credit risk and concentration risk and the overall investment objectives of the company. Loans sold to third parties may be sold for par, at a premium or, in the case of non-performing or under performing loans, at a discount. Company loans may be sold to third parties or to the manager or its related mortgage funds; however, any loan sold to the manager or a related mortgage fund will be sold for a purchase price equal to the greater of (i) the par value of the loan or (ii) the fair market value of the loan. The manager will not receive commissions or broker fees with respect to loan sales conducted for the company; however, selling loans will increase members’ capital available for investing in new loans for which the manager will earn brokerage fees and other forms of compensation. COVID-19 Given the ongoing and dynamic nature of the impacts on peoples’ lives, the healthcare system and its resources, and the economy and real estate markets since the World Health Organization declared the COVID-19 outbreak a pandemic, it is not possible to predict or estimate the impact - for the remainder of 2021 and the years beyond - of the COVID-19 outbreak on the financial condition, the liquidity or the results of operations of the company. While the company has not incurred material disruptions to date, the rapid developments and fluidity of COVID-19 may cause the manager, in the future, to adjust its business operations, lending parameters, and collection practices and processes for past-due loans. The majority of borrowers have continued to make monthly payments and/or negotiated in good faith resulting in extensions on terms consistent with the original loan terms. No loan losses were incurred in the first nine months of 2021 and none were incurred in 2020. During 2020 and to a lesser extent in 2021, as a result of the disruptions caused by the pandemic, the company experienced a manageable increase in requests for loan extensions, payment delinquencies and requests for forbearance agreements from borrowers. Market conditions, regulatory restrictions on the company's enforcement rights with respect to loans in default, delays in foreclosure proceedings, including moratoriums in some jurisdictions, and backlogs in the courts has increased the timeline to resolve non-performing and /or maturing loans. Distribution policy/Distribution reinvestment plan (DRIP) Cash available for distribution at the end of each calendar month is allocated ninety-nine percent ( 99 %) to the members and one percent ( 1 %) to the manager. Cash available for distribution means cash flow from operations (excluding repayments for loan principal and other capital transaction proceeds) less amounts set aside for creation or restoration of reserves. The manager may withhold from cash otherwise distributable to the members with respect to any period the respective amounts of O&O expenses allocated to the members’ accounts for the applicable period pursuant to the company’s reimbursement to RMC and allocation to members’ accounts of O&O expenses. The amount otherwise distributable, less the respective amounts of O&O expenses allocated to members, is the net distribution. Per the terms of the company’s Operating Agreement, cash available for distribution to the members is allocated among the members in proportion to their percentage interests (except with respect to differences in the amounts of O&O expenses allocated to the respective members during the applicable period) and in proportion to the number of days during the applicable month that they owned such percentage interests. See Note 3 (Manager and Other Related Parties) to the financial statements for a detailed discussion on the allocation of O&O expenses to members’ accounts. Cash available for distributions allocable to members who have elected to receive distributions is disbursed at the end of each calendar month. The manager’s allocable share of cash available for distribution is also distributed not more frequently than cash distributions to members. The distribution reinvestment plan (DRIP) provision of the Operating Agreement permits members to elect to have all or a portion of their monthly distributions reinvested in the purchase of additional units. Cash available for distributions allocable to members who have elected to participate in the DRIP is distributed and reinvested in units at each month end. In May 2019, the company filed a Registration Statement on Form S-3 with the SEC (SEC File No. 333-231333) that went effective May 9, 2019, to offer up to 15,000,000 units ($ 15,000,000 ) to members of record as of April 30, 2019 who had previously elected to participate in the DRIP or who later provide written notice to the manager electing to participate in the DRIP, in those states in which approval has been obtained. As of September 30, 2021, the aggregate gross proceeds from sales of units to members under the company's DRIP pursuant to the May 2019 Form S-3 Registration Statement is approximately $ 5,596,000 . To determine the amount of cash to be distributed in any month, the company relies in part on its forecast of full-year net income, which takes into account the difference between the forecasted net income for the remainder of the year and actual results in the year to date and the requirement to maintain a cash reserve. As of September 30, 2021 , the difference between earnings allocated to members’ capital accounts and net income available to members was approximately $ 34,000 , and is expected to be offset by future earnings in excess of net distributions in 2021 as a result of borrower payments received including forgone interest on loans designated non-accrual. Liquidity and unit redemption program There are substantial restrictions on transferability of units, and there is no established public trading and/or secondary market for the units and none is expected to develop. In order to provide liquidity to members, the company’s Operating Agreement includes a unit redemption program, whereby beginning one year from the date of purchase of the units, a member may redeem all or part of their units, subject to certain limitations. The price paid for redeemed units is based on the lesser of the purchase price paid by the redeeming member or the member’s capital account balance as of the date of each redemption payment. Redemption value – for other than DRIP units - is calculated based on the period from date of purchase as follows: after 2 years 94 % of the purchase price or of the capital balance, whichever is less; after 3 years 96 %; after four years 98 %; and after five years 100 %. The company redeems units quarterly, subject to certain limitations as provided for in the Operating Agreement. The maximum number of units which may be redeemed per quarter per individual member shall not exceed the greater of (i) 100,000 units, or (ii) 25 % of the member’s total outstanding units. For redemption requests requiring more than one quarter to fully redeem, the percentage discount amount if any, that applies when the redemption payments begin continues to apply throughout the redemption period and applies to all units covered by such redemption request regardless of when the final redemption payment is made. The company has not established a cash reserve from which to fund redemptions. The company’s capacity to redeem units upon request is limited by the availability of cash and the company’s cash flow. As provided in the Operating Agreement, the company will not, in any calendar year, redeem more than five percent (5%) of the weighted average number of units outstanding during the twelve-month period immediately prior to the date of the redemption. In the event unit withdrawal requests exceed 5 % in any calendar year, units will be redeemed in the order of priority provided in the Operating Agreement. Manager’s interest If a manager is removed, withdrawn or terminated, the company will pay to the manager all amounts then accrued and due to the manager. Additionally, the company will terminate the manager’s interest in the company’s profits, losses, distributions and capital by payment of an amount in cash equal to the then-present fair value of such interest. Term of the company The term of the company will continue operations until 2028, unless sooner terminated as provided in the Operating Agreement, or extended by majority vote of the members. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). Management estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions about the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities, at the dates of the financial statements and the reported amounts of revenues and expenses during the reported periods. Such estimates relate principally to the determination of the allowance for loan losses, including, when applicable, the valuation of impaired loans (which itself requires determining the fair value of the collateral), and the valuation of real estate owned, at acquisition and subsequently. Actual results could differ materially from these estimates. Fair value estimates GAAP defines fair value as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets and liabilities; it is not a forced transaction. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact and (iv) willing to transact. Fair values of assets and liabilities are determined based on the fair-value hierarchy established in GAAP. The hierarchy is comprised of three levels of inputs to be used: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the company has the ability to access at the measurement date. An active market is a market in which transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 inputs are inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly in active markets and quoted prices for identical assets or liabilities that are not active, and inputs other than quoted prices that are observable, or inputs derived from or corroborated by market data. Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs reflect the company’s own assumptions about the assumptions market participants would use in pricing the asset or liability (including assumptions about risk). Unobservable inputs are developed based on the best information available in the circumstances and may include the company’s own data. The fair value of real property is determined by exercise of judgment based on management’s experience informed by appraisals (by licensed appraisers), brokers’ opinion of values and publicly available information on in-market transactions. Appraisals of commercial real property generally present three approaches to estimating value: 1) market comparables or sales approach; 2) cost to replace; and 3) capitalized cash flows or income approach. These approaches may or may not result in a common, single value. The market-comparables approach may yield several different values depending on certain basic assumptions, including the consideration of adjustments made for any attributes specific to the real property. Management has the requisite familiarity with the real estate markets it lends in and of the specific properties lent on to analyze sales-comparables and assess their suitability/applicability. Management is acquainted with market participants – investors, developers, brokers, lenders – that are useful, relevant secondary sources of data and information regarding valuation and valuation variability. These secondary sources may have familiarity with and perspectives on pending transactions, successful strategies to optimize value and the history and details of specific properties – on and off the market – that enhance the process and analysis that is particularly and principally germane to establishing value in distressed markets and/or property types. Cash in banks Certain of the company’s cash balances in banks exceed federally insured limits of $ 250,000 . The bank or banks in which funds are deposited are reviewed periodically for their general creditworthiness/investment grade credit rating. See Note 5 (Line of Credit) for compensating balance arrangements. Loans and interest income Performing loans are carried at amortized cost which is generally equal to the unpaid principal balance (principal). Management has discretion to pay amounts (advances) to third parties on behalf of borrowers to protect the company’s interest in the loan. Advances include, but are not limited to, the payment of interest and principal on a senior lien to prevent foreclosure by the senior lien holder, property taxes, insurance premiums and attorney fees. Advances generally are stated at the amounts paid out on the borrower’s behalf and any accrued interest on amounts paid out, until repaid by the borrower. For performing loans, interest is accrued daily on the principal plus advances, if any. Non-performing loans (i.e., loans with a payment in arears) less than 180 days delinquent continue to recognize interest income as long as the loan is in the process of collection and is considered to be well-secured. Non-performing loans are placed on non-accrual status if 180 days delinquent or earlier if management determines that the primary source of repayment will come from the foreclosure and subsequent sale of the collateral securing the loan (which usually occurs when a notice of sale is filed) or when the loan is no longer considered well-secured. When a loan is placed on non-accrual status, the accrual of interest is discontinued for accounting purposes only; however, previously recorded interest is not reversed. A loan may return to accrual status when all delinquent interest and principal payments become current in accordance with the terms of the loan agreement. Late fees are recognized in the period received. The company may fund a specific loan net of an interest reserve ( one to two years ) to insure timely interest payments at the inception of the loan. Any interest reserve is amortized over the period that the amount is prepaid. In the event of an early loan payoff, any unapplied interest reserves would be first applied to any accrued but unpaid interest and then as a reduction to the principal. In the normal course of the company’s operating activities, performing loans that are maturing or have matured may be renewed at then current market rates of interest and terms for new loans. From time to time, the manager negotiates and enters into loan modifications with borrowers whose loans are delinquent (non-performing). If a borrower is experiencing financial difficulties and a loan modification were to result in an economic concession to the borrower (i.e., a significant delay or reduction in cash flows compared to the original note), the modification is deemed a troubled debt restructuring (TDR). In March 2020, various federal regulatory agencies issued an interagency statement on loan modifications and reporting for financial institutions working with borrowers affected by COVID-19. The interagency statement was effective immediately and impacted accounting for loan modifications. The agencies confirmed with the staff of the Financial Accounting Standards Board (FASB) that short-term modifications made on a good faith basis in response to COVID- 19 to borrowers who were current prior to any relief, are not to be considered TDRs. This includes short-term (e.g., six months) modifications such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant. The company funds loans with the intent to hold the loans until maturity. From time to time the company may sell certain loans when the manager determines it to be in the best interest of the company. Loans are classified as held-for-sale once a decision has been made to sell loans and the loans held-for-sale have been identified. Loans classified as held for sale are carried at the lower of cost or fair value. Pursuant to California regulatory requirements, borrower payments are deposited into a trust account established by RMC with an independent bank (and are presented on the balance sheet as “Loan payments in trust”). Funds are disbursed to the company as collected which can range from same day for wire transfers and up to two weeks after deposit for checks. Allowance for loan losses Loans and the related accrued interest and advances (i.e., the loan balance) are analyzed on a periodic basis for ultimate recoverability. Collateral fair values are reviewed quarterly and the protective equity for each loan is computed. As used herein, “protective equity” is the dollar amount by which the net realizable value (i.e., fair value less the cost to sell) of the collateral, net of any senior liens exceeds the loan balance, where “loan balance” is the sum of the unpaid principal, advances and the recorded interest thereon. If based upon current information and events, it is deemed probable the company will not collect substantially all amounts due according to the contractual terms of the original loan agreement, then a loan is designated as impaired. An insignificant delay or insignificant shortfall in the amount of payments does not constitute non-performance with the contractual terms of the original loan agreement if the manager expects to collect the amounts due including interest accrued at the contractual interest rate for the period of delay. In determining the probability that the borrower will not substantially perform according to the terms of the original loan agreement, the manager considers the following: payment status – if payments are in arrears 90+ days (typically 3 payments past due) loans are designated impaired unless resolution of the delinquency is forthcoming without significant delay; bankruptcy – if the borrower files bankruptcy, the loan is designated impaired; notice of sale – if the company files a notice of sale, the loan is designated impaired. Payments on loans designated as impaired are applied in the following order: late fees, accrued interest, advances, and lastly to principal. For loans that are deemed collateral dependent for repayment, a provision for loan losses is recorded to adjust the allowance for loan losses (principal and/or recorded interest) in an amount such that the net carrying amount (unpaid principal plus recorded interest, less the specific allowance) is reduced to the lower of the loan balance or the estimated fair value of the related collateral, net of any costs to sell and net of any senior debt and claims. The company charges off uncollectible loans and related receivables directly to the allowance account once it is determined the full amount is not collectible. Any amounts collected after a charge off is deemed a recovery of loan losses. If the loan goes to foreclosure, an updated appraisal is ordered and the recorded investment in the loan is adjusted to the net realizable value of the REO to be acquired. The adjustment is made to the specific reserve in the allowance for loan losses by a charge or a credit to the provision for loan losses. Real estate owned (REO) Real estate owned, or REO, is property acquired in full or partial settlement of loan obligations generally through foreclosure and is recorded at acquisition at the property’s net realizable value, which is the fair value less estimated costs to sell, as applicable. The fair value estimates are derived from information available in the real estate markets including similar property, and often require the experience and judgment of third parties such as commercial real estate appraisers and brokers. The estimates figure materially in calculating the value of the property at acquisition, the level of charge to the allowance for loan losses and any subsequent valuation reserves. After acquisition, costs incurred relating to the development and improvement of property are capitalized to the extent they do not cause the recorded value to exceed the net realizable value, whereas costs relating to holding and disposition of the property are expensed as incurred. REO is analyzed periodically for changes in fair values and any subsequent write down is charged to operations expenses. Any recovery in the fair value subsequent to such a write down is recorded and is not to exceed the value recorded at acquisition. Recognition of gains or losses on the sale of real estate is dependent upon the transaction meeting certain criteria related to the nature of the property and the terms of the sale including potential seller financing. Debt issuance costs Debt issuance costs are the fees and commissions incurred in the course of obtaining a line of credit for services from banks, law firms and other professionals and are amortized on a straight-line basis, which approximates the interest method, as interest expense over the term of the line of credit. Recently issued accounting pronouncements - Accounting and Financial reporting for Expected Credit Losses The FASB issued an Accounting Standards Update (“ASU”) that significantly changes how entities will account for credit losses for most financial assets that are not measured at fair value through net income. The new standard will supersede currently in effect guidance and applies to all entities. Entities will be required to use a current expected credit loss (“CECL”) model to estimate credit impairment. This estimate will be forward-looking, meaning management will be required to use not only historical trends and current conditions, but must also consider forecasts about future economic conditions to determine the expected credit loss over the remaining life of an instrument. This will be a significant change from the current incurred credit loss model, and generally may result in allowances being recognized in earlier periods than under the current credit loss model. The ASU is effective for smaller reporting companies for interim and annual reporting periods in 2023. RMI IX invests in real estate secured loans made with the expectation that the possibility of credit losses is remote as a result of substantial protective equity provided by the underlying collateral. The real estate secured programs and low loan-to-value ratios have caused the company to expect that the adoption of the CECL model from the incurred loss models presently in use as to credit loss recognition will likely not materially impact the reported results of operations or financial position. However, the impact, if any, upon adoption will be dependent upon the facts and circumstances relating to the company’s loans at that date. - Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, provides temporary optional expedients for various agreements and contracts that utilize the London Interbank Offered Rate (“LIBOR”) as the benchmark reference rate. The relief generally applies to eligible modifications of contractual terms that change (or have the potential to change) the amount or timing of contractual cash flows related to replacement of a reference rate. The relief allows such modifications to be accounted for as continuations of existing contracts without additional analysis. As the guidance in ASU 2020-04 is intended to assist entities during the global market-wide reference rate transition period, it is in effect from March 12, 2020 through December 31, 2022. The Company is currently evaluating the impact of the potential discontinuance of LIBOR in relation to the company’s line of credit and has not yet adopted the optional relief. |
Manager and Other Related Parti
Manager and Other Related Parties | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
Manager and Other Related Parties | NOTE 3 – MANAGER AND OTHER RELATED PARTIES The Operating Agreement provides for compensation to the manager and for the reimbursement of qualifying costs as detailed below. RMC is entitled to 1 % of the net income or loss of the company. RMC - at its sole discretion - collected less than the maximum allowable reimbursement of qualifying costs attributable to RMI IX (Costs from RMC on the Statements of Income), which increased the net income, cash available for distribution, and the net-distribution rate. The cost-reimbursement waivers in the three and nine months ended September 30, 2021 and 2020, by RMC were not made for the purpose of providing RMI IX with sufficient funds to satisfy any required level of distributions, as the Operating Agreement has no such required level of distributions, nor to meet withdrawal requests. Mortgage servicing fees The manager is entitled to receive a servicing fee of up to one-quarter of one percent ( 0.25 %) annually of secured loan principal. The mortgage servicing fees are accrued monthly on all loans. Remittance to RMC is made monthly unless the loan has been assigned a specific loss reserve, at which point remittance is deferred until the specific loss reserve is no longer required, or the property securing the loan has been acquired by the company. Asset management fees The manager is entitled to receive a monthly asset management fee for managing RMI IX’s assets, liabilities, and operations in an amount up to three-quarters of one percent ( 0.75 %) annually of the portion of the capital originally committed to investment in mortgages, not including leverage, and including up to two percent ( 2 %) of working capital reserves. Costs from RMC The manager is entitled to request reimbursement for operations expense incurred on behalf of RMI IX, including without limitation, RMC’s personnel and non-personnel costs incurred for qualifying business activities, including investor services, accounting, tax and data processing, postage and out-of-pocket general and administration expenses. Qualifying personnel/compensation costs and consulting fees are tracked by business activity, and then costs of qualifying activities are allocated to RMI IX pro-rata based on the percentage of RMI IX’s members’ capital to the total capital of all related mortgage funds managed by RMC. Certain other non-personnel, qualifying costs such as postage and out-of-pocket general and administrative expenses can be tracked by RMC as specifically attributable to RMI IX; other non-personnel, qualifying costs (e.g., RMC’s accounting and audit fees, legal fees and expenses, occupancy, and insurance premiums) are allocated pro-rata based on the percentage of RMI’s members’ capital to total capital of the related mortgage funds managed by RMC. The amount of qualifying costs attributable to RMI IX incurred by RMC was $ 143,461 and $ 145,054 in the three months ended September 30, 2021 and 2020, respectively and $ 448,157 and $ 435,868 for the nine months ended September 30, 2021 and 2020, respectively. The reimbursement of costs from RMC waived was $ 73,439 and $ 72,873 in the three months ended September 30, 2021 and 2020, respectively and $ 233,873 and $ 363,687 in the nine months ended September 30, 2021 and 2020, respectively. Loan administrative fees The manager is entitled to receive a loan administrative fee of up to one percent ( 1 %) of the principal amount of each new loan funded or acquired for services rendered in connection with the selection and underwriting of loans payable upon the closing or acquisition of each loan. Since August 2015, RMC, at its sole discretion, has waived loan administrative fees on new originations. The total amount of loan administrative fees chargeable was $ 164,435 and $ 143,520 in the three months ended September 30, 2021 and 2020, respectively and $ 348,243 and $ 363,279 in the nine months ended September 30, 2021 and 2020, respectively. Commissions and fees paid by the borrowers to RMC - Brokerage commissions, loan originations For fees in connection with the review, selection, evaluation and negotiation of loans (including extensions), RMC may collect a loan brokerage commission that is expected to range from approximately 1.5 % to 5 % of the principal amount of each loan made during the year. Total loan brokerage commissions are limited to an amount not to exceed 4 % of the total company assets per year. The loan brokerage commissions are paid by the borrowers to RMC, and thus are not an expense of the company. Loan brokerage commissions paid by the borrowers to RMC approximated $ 267,000 and $ 438,000 for three months ended September 30, 2021 and 2020, respectively and $ 694,000 and $ 867,000 for the nine months ended September 30, 2021 and 2020, respectively. - Other fees RMC receives fees for processing, notary, document preparation, credit investigation, reconveyance and other mortgage related fees. The amounts received are customary for comparable services in the geographical area where the property securing the loan is located, payable solely by the borrower and not by the company. Formation loan Commissions for unit sales to new members paid to broker-dealers (“B/D sales commissions”) and premiums paid to certain investors upon the purchase of units were paid by RMC and were not paid directly by RMI IX out of unit-sales proceeds. Instead, RMI IX advanced to RMC amounts sufficient to pay the B/D sales commissions and premiums to be paid to investors. Such advances in total were not to exceed seven percent ( 7 %) of offering proceeds. The receivable arising from the advances is unsecured and non-interest bearing and is referred to as the “formation loan.” When offerings of units to new members ended on April 30, 2019, such advances totaled $ 5,626,566 , of which $ 3,441,537 remains outstanding at September 30, 2021. Formation loan transactions for the nine months ended September 30, 2021 and 2020 are presented in the following table. 2021 2020 Balance, January 1 $ 3,812,019 $ 3,948,064 Payments received from RMC ( 357,468 ) — Early withdrawal penalties applied ( 13,014 ) ( 15,063 ) Balance, September 30 $ 3,441,537 $ 3,933,001 RMC is repaying the formation loan such that the formation loan is paid by December 31, 2027, and prior to the end of the term of the company in 2028. Beginning December 31, 2020, RMC will make quarterly payments of principal, without interest, of approximately $ 124,000 , less early withdrawal penalties until such time – in the opinion of the manager -as the market uncertainties resulting from the COVID-19 pandemic are substantially resolved and loan brokerage commissions earned by the manager on new loan originations return to pre-pandemic levels. Annual payments of $ 496,000 are expected to resume by December 2022 . The primary source of repayment of the formation loan are the loan brokerage commissions earned by RMC. The formation loan is forgiven if the manager is removed and RMC is no longer receiving payments for services rendered. Redemptions of members’ capital Redemptions of members’ capital for the three and nine months ended September 30, 2021 and 2020 are presented in the following table. Three months ended Nine months ended Redemptions 2021 2020 2021 2020 Without penalty $ 794,264 $ 747,009 $ 3,226,591 $ 1,509,603 With penalty 356,539 119,777 624,269 543,872 Total $ 1,150,803 $ 866,786 $ 3,850,860 $ 2,053,475 Early withdrawal penalties $ 13,775 $ 5,598 $ 24,402 $ 27,531 At September 30, 2021, scheduled redemptions of members' capital were $ 931,390 , of which $ 670,383 is payable in 2021, and $ 261,007 is payable in 2022. Scheduled redemptions of $ 10,128 are subject to early withdrawal penalties. Organization and offering expenses The manager was reimbursed for O&O expenses incurred in connection with the organization of the company and the offering of the units of membership interest including, without limitation, attorneys’ fees, accounting fees, printing costs and other selling expenses (other than sales commissions) in a total amount not exceeding 4.5 % of the original purchase price of all units (other than DRIP units) sold in all offerings (hereafter, the “maximum O&O expenses”). RMC paid the O&O expenses in excess of the maximum O&O expenses. The O&O expenses incurred by RMI IX are allocated to the members as follows - For each of forty (40) calendar quarters or portion thereof after December 31, 2015 that a member holds units (other than DRIP units), the O&O expenses incurred by RMI IX are allocated to and debited from that member’s capital account in an annual amount equal to 0.45 % of the member’s original purchase price for those units, in equal quarterly installments of 0.1125 % each commencing with the later of the first calendar quarter of 2016 or the first full calendar quarter after a member’s purchase of units, and continuing through the quarter in which such units are redeemed. Unallocated O&O transactions for the nine months ended September 30, 2021 and 2020 are summarized in the following table. 2021 2020 Balance, January 1 $ 1,858,282 $ 2,260,068 O&O expenses allocated ( 229,179 ) ( 240,489 ) O&O expenses paid by RMC (1) ( 68,687 ) ( 42,184 ) Early withdrawal penalties applied (2) ( 11,388 ) ( 12,468 ) Balance, September 30 $ 1,549,028 $ 1,964,927 (1) RMC is obligated per the Operating Agreement to repay RMI IX for the amount of unallocated O&O expenses attributed to a member’s capital account if the member redeems prior to the 40 quarter ly allocations. RMC estimated its future obligation to repay unallocated O&O expenses on scheduled redemptions as of September 30, 2021 , to be approximately $ 12,571 , which may be offset in part by early withdrawal penalties collected in future periods. (2) The O&O expenses component of early withdrawal penalties are applied as a reduction to O&O expenses to be repaid by RMC to members’ capital on scheduled redemptions. The amounts credited are determined by the ratio between the amount of the formation loan and the amount of offering costs incurred by the company. Other related party transactions - Payable to/receivable from related parties From time to time, in the normal course of business operations, the company may have payables to and/or receivables from related parties. At September 30, 2021 , the payable to related party balance of $ 3,501 consisted of accounts payable to a related mortgage fund and RMC. There was no amount receivable from a related party at September 30, 2021. At December 31, 2020 , the payable to related parties balance consisted of accounts payable and cost reimbursements to the manager and related mortgage fund of $ 6,452 , which was partially offset by a receivable of $ 2,267 due from the manager and related mortgage fund. The receivable was received from the manager and the payable was paid to the manager in March 2021. - Loan transactions with related parties In the ordinary course of business, performing loans may be transferred by executed assignment, in-part or in-full, between the RMC managed mortgage funds at par which approximates market value. In the nine months ended September 30, 2021 , a related mortgage fund transferred to RMI IX five performing loans with aggregate principal of $ 4,671,760 in-full at par value, which approximates fair value. In the nine months ended September 30, 2020 a related mortgage fund transferred to RMI IX one performing loan with principal of $ 2,296,677 in-full at par value which approximates fair value. RMI IX paid cash for the loans and the related mortgage fund has no continuing obligation or involvement with the loans. In the nine months ended September 30, 2021 , RMI IX transferred to related mortgage fund(s) five performing loans with aggregate principal of $ 2,559,588 in-full at par value, which approximates fair value. The related mortgage fund(s) paid cash for the loans and RMI IX has no continuing obligation or involvement with the loans. No loans were transferred to related mortgage funds in the nine months ended September 30, 2020 . |
Loans
Loans | 9 Months Ended |
Sep. 30, 2021 | |
Receivables [Abstract] | |
Loans | NOTE 4 – LOANS Loans generally are funded at a fixed interest rate with a loan term of up to five years. Loans acquired are generally done so within the first six months of origination and are purchased at par value, which approximates fair value. See Note 3 (Manager and Other Related Parties) for a description of loans transferred by executed assignments between the related mortgage funds. As of September 30, 2021, 49 loans outstanding (representing 97 % of the aggregate principal of the company’s loan portfolio) have a loan term of five years or less. The remaining loans have terms longer than five years . Substantially all loans are written without a prepayment penalty provision. As of September 30, 2021, 28 loans outstanding (representing 32 % of the aggregate principal of the company’s loan portfolio) provide for monthly payments of principal and interest, typically calculated on a 30 -year amortization, with the remaining principal due at maturity. The remaining loans provide for monthly payments of interest only, with the principal due at maturity. Secured loans unpaid principal balance (principal) Secured loan transactions for the three and nine months ended September 30, 2021 are summarized in the following table. Three months ended Nine months ended Principal, beginning of period $ 79,876,199 $ 82,274,807 Loans funded 16,443,500 34,824,300 Principal collected ( 22,780,339 ) ( 42,683,651 ) Loans transferred from related mortgage fund — 4,671,760 Loans transferred to related mortgage funds — ( 2,559,588 ) Loans sold to non-affiliate — ( 2,988,268 ) Principal, September 30 $ 73,539,360 $ 73,539,360 During the three and nine months ended September 30, 2021 , the company renewed three and fifteen maturing (or matured) loans with aggregated principal of approximately $ 8,776,000 and $ 22,274,000 , respectively, which are not included in the transactions shown in the table above. The loans were current and deemed well collateralized (i.e., the LTV at the time of renewal was within lending guidelines). The company funds loans with the intent to hold the loans until maturity, although from time to time the company may sell certain loans when the manager determines it to be in the best interest of the company. During the nine months ended September 30, 2021 , five loans with aggregate principal of approximately $ 2,988,000 were sold to unaffiliated third parties, for an amount that approximated the loan balance at the time of sale. There were no loan sales for the three months ended September 30, 2021. Pursuant to California regulatory requirements, borrower payments are deposited into a trust account established by RMC with an independent bank (and are presented on the balance sheet as “Loan payments in trust”). Funds are disbursed to the company as collected which can range from same day for wire transfers and up to two weeks after deposit for checks. Loan payments in trust at September 30, 2021, were disbursed to the company’s account by October 18, 2021. Loan payments in trust at December 31, 2020 were disbursed to the company’s account by January 15, 2021. Loan characteristics Secured loans had the characteristics presented in the following table. September 30, December 31, 2021 2020 Number of secured loans 54 82 Secured loans – principal $ 73,539,360 $ 82,274,807 Secured loans – lowest interest rate (fixed) 6.8 % 6.8 % Secured loans – highest interest rate (fixed) 10.5 % 10.5 % Average secured loan – principal $ 1,361,840 $ 1,003,351 Average principal as percent of total principal 1.9 % 1.2 % Average principal as percent of members’ capital, net 1.8 % 1.3 % Average principal as percent of total assets 1.8 % 1.2 % Largest secured loan – principal $ 6,735,000 $ 6,735,000 Largest principal as percent of total principal 9.2 % 8.2 % Largest principal as percent of members’ capital, net 8.7 % 8.5 % Largest principal as percent of total assets 9.0 % 7.9 % Smallest secured loan – principal $ 53,180 $ 104,378 Smallest principal as percent of total principal 0.1 % 0.1 % Smallest principal as percent of members’ capital, net 0.1 % 0.1 % Smallest principal as percent of total assets 0.1 % 0.1 % Number of California counties where security is located 12 14 Largest percentage of principal in one California county 36.2 % 28.2 % Number of secured loans with prepaid interest 3 — Prepaid interest $ 804,164 $ — At September 30, 2021, the company’s largest loan with principal of $ 6,735,000 is secured by an office building located in Santa Clara County, bears an interest rate of 8.25 % and matured on October 1, 2021 . The maturity date of the loan was subsequently extended to October 1, 2022. As of September 30, 2021 , the company had no commitments to lend outstanding and had no construction or rehabilitation loans outstanding. Lien position At funding, secured loans had the lien positions presented in the following table. September 30, 2021 December 31, 2020 Loans Principal Percent Loans Principal Percent First trust deeds 36 $ 61,040,293 83 % 56 $ 61,066,097 74 % Second trust deeds 18 12,499,067 17 26 21,208,710 26 Total principal, secured loans 54 73,539,360 100 % 82 82,274,807 100 % Liens due other lenders at loan closing 32,289,086 45,206,740 Total debt $ 105,828,446 $ 127,481,547 Appraised property value at loan closing $ 206,880,000 $ 251,970,000 Percent of total debt to appraised values (1) 55.2 % 55.6 % (1) Based on appraised values and liens due other lenders at loan closing. The weighted-average loan-to-value (LTV) computation above does not take into account subsequent increases or decreases in property values following the loan closing nor does it include decreases or increases on senior liens to other lenders. Property type Secured loans summarized by property type are presented in the following table. September 30, 2021 December 31, 2020 Loans Principal Percent Loans Principal Percent Single family (2) 24 $ 21,799,270 30 % 47 $ 30,297,525 37 % Commercial 22 45,546,473 62 27 43,692,125 53 Multi-family 7 4,693,617 6 8 8,285,157 10 Land 1 1,500,000 2 — — — Total principal, secured loans 54 $ 73,539,360 100 % 82 $ 82,274,807 100 % (2) Single family property type as of September 30, 2021 consists of 6 loans with principal of $ 4,432,988 that are owner occupied and 18 loans with principal of $ 17,366,282 that are non-owner occupied. At December 31, 2020, single family property type consisted of 8 loans with principal of $ 5,565,052 that are owner occupied and 39 loans with principal of $ 24,732,473 that are non-owner occupied. Distribution of loans within California The distribution of secured loans within California by counties is presented in the following table. September 30, 2021 December 31, 2020 Principal Percent Principal Percent San Francisco Bay Area (3) Santa Clara $ 26,652,130 36.2 % $ 23,205,654 28.2 % San Francisco 14,180,433 19.3 11,339,546 13.8 San Mateo 5,640,797 7.7 6,878,086 8.4 Alameda 4,234,940 5.8 6,790,814 8.2 Contra Costa 693,042 0.9 1,094,189 1.3 Marin — — 1,944,696 2.4 51,401,342 69.9 51,252,985 62.3 Other Northern California Placer 1,500,000 2.0 — 0.0 Monterey — 0.0 1,110,000 1.4 Tehama 404,831 0.6 404,837 0.5 Sacramento 53,180 0.1 104,378 0.1 1,958,011 2.7 1,619,215 2.0 Northern California Total 53,359,353 72.6 52,872,200 64.3 Los Angeles & Coastal Los Angeles 3,310,492 4.5 11,775,334 14.3 San Diego 6,694,439 9.1 10,186,152 12.4 Orange 8,456,076 11.5 5,431,677 6.6 Santa Barbara — — 290,444 0.3 18,461,007 25.1 27,683,607 33.6 Other Southern California San Bernardino 1,719,000 2.3 1,719,000 2.1 Southern California Total 20,180,007 27.4 29,402,607 35.7 Total principal, secured loans $ 73,539,360 100.0 % $ 82,274,807 100.0 % (3) Includes Silicon Valley Scheduled maturities Secured loans scheduled to mature as of September 30, 2021, are presented in the following table. Loans Principal Percent 2021 (4) 7 $ 10,777,995 15 % 2022 24 30,344,280 41 2023 11 21,585,948 29 2024 3 5,320,650 7 2025 5 3,743,816 5 Thereafter 1 237,605 1 Total scheduled maturities 51 72,010,294 98 Matured as of September 30, 2021 3 1,529,066 2 Total principal, secured loans 54 $ 73,539,360 100 % (4) Loans scheduled to mature in 2021 after September 30 . Scheduled maturities are presented based on the most recent in-effect agreement with the borrower, including forbearance agreements. As a result, matured loans at September 30, 2021, for the scheduled maturities table above may differ from the same captions in the tables of delinquencies and payment in arears presented below that do not consider forbearance agreements. For matured loans, the company may continue to accept payments while pursuing collection of principal or while negotiating an extension of the loan’s maturity date. It is the company’s experience that the timing of future cash receipts from secured loans will differ from scheduled maturities. Loans may be repaid or renewed before, at or after the contractual maturity date. Delinquency/Non-performing secured loans Secured loans summarized by payment-delinquency status are presented in the following table. September 30, 2021 December 31, 2020 Loans Principal Loans Principal Current 43 $ 66,457,146 73 $ 74,041,631 Past Due 30-89 days 4 3,113,520 1 190,195 90-179 days 5 2,182,637 5 4,756,811 180 or more days 2 1,786,057 3 3,286,170 Total past due 11 7,082,214 9 8,233,176 Total principal, secured loans 54 $ 73,539,360 82 $ 82,274,807 At September 30, 2021 and December 31, 2020, there were two forbearance agreements in effect. One with principal of $ 990,000 is included in the table above as 90-179 days past due, and one with a principal of $ 1,200,000 which is included in the table above as 180 or more days past due. As of September 30, 2021, both loans were designated impaired and in non-accrual status. No loan forbearance agreements or payment modifications were made during the nine months ended September 30, 2021, and none were in effect at December 31, 2020, that would be deemed troubled debt restructurings. At September 30, 2021, and December 31, 2020, the company had one workout agreement with a borrower. T he loan, with principal of $ 190,198 matured on June 1, 2016 . The workout agreement was entered into September 2016, whereby the borrower agreed to resume monthly payments. This agreement extended the maturity date through October 1, 2021 . As of September 30, 2021, the loan was 90 days delinquent and was designated as impaired and in non-accrual status. Non-performing secured loans at September 30, 2021, and December 31, 2020, had principal payments in arrears totaling $ 2,733,555 ( 11 loans) and $ 1,577,874 ( 8 loans), respectively and interest payments in arrears totaling $ $ 301,617 and $ 360,813 , respectively. Payments in arrears for non-performing secured loans (i.e., monthly interest and principal payments past due 30 or more days) at September 30, 2021 and December 31, 2020, are presented in the following tables. Loans Principal Interest(5) At September 30, 2021 Past Monthly Past Monthly Past Monthly Total Past due 30-89 days 1 3 $ 931,458 $ 808 $ — $ 17,331 $ 949,597 90-179 days 2 3 597,608 858 — 59,879 658,345 180 or more days 1 1 1,200,000 2,823 199,500 24,907 1,427,230 Total past due (6) 4 7 $ 2,729,066 $ 4,489 $ 199,500 $ 102,117 $ 3,035,172 (5) Interest includes foregone interest of approximately $ 126,000 on non-accrual loans past maturity and approximately $ 38,000 for monthly payments in arrears. September 2021 interest is due October 1, 2021 and is not included in the payments in arrears at September 30, 2021. (6) In October 2021, two loans included in the table above as 30-89 days past due on monthly payments, and one loan included in the table above as 90-179 days past due on monthly payments, were brought current. The remaining two loans included in the table above as 90-179 days past due on monthly payments each made one payment during October. Loans Principal Interest (7) At December 31, 2020 Past Monthly Past Monthly Past Monthly Total Past due 30-89 days — 1 $ — $ 378 $ — $ 1,509 $ 1,887 90-179 days 1 4 376,613 854 — 146,270 523,737 180 or more days 1 1 1,200,000 29 105,000 108,034 1,413,063 Total past due (8) 2 6 $ 1,576,613 $ 1,261 $ 105,000 $ 255,813 $ 1,938,687 (7) Interest includes foregone interest of $ 42,000 on non-accrual loans past maturity and approximately $ 20,800 for monthly payments in arrears. December 2020 interest is due January 1, 2021 and is not included in the payments in arrears at December 31, 2020. (8) One loan with principal of approximately $ 137,000 , which was 180 or more days past due, paid in full in January 2021 and so was not designated as non-performing at December 31, 2020, and is not included in the table above. Delinquency/Loans in non-accrual status Secured loans in non-accrual status are summarized in the following table. September 30, 2021 December 31, 2020 Number of loans 3 3 Principal $ 2,380,198 $ 3,339,684 Advances 10,277 10,320 Accrued interest 93,452 181,060 Total recorded investment $ 2,483,927 $ 3,531,064 Foregone interest $ 182,718 $ 62,821 Non-performing loans are placed on non-accrual status if 180 days delinquent or earlier if management determines that the primary source of repayment will come from the foreclosure and subsequent sale of the collateral securing the loan (which usually occurs when a notice of sale is filed) or when the loan is no longer considered well-secured. When a loan is placed on non-accrual status, the accrual of interest is discontinued for accounting purposes only (i.e., foregone interest in the table above); however, previously recorded interest is not reversed. At September 30, 2021, there were four loans with aggregate principal of approximately $ 1,588,000 w hich were 90 or more days past due and not in non-accrual status. At December 31, 2020 , five loans with aggregate principal of $ 4,703,296 were 90 days or more days past due and were not in non-accrual status. Provision/allowance for loan losses and impaired loans Generally, the company has not recorded an allowance for loan losses as all loans have protective equity such that collection is deemed probable for all recorded amounts due on the loan. From time to time, the manager may deem it in the best interest of the company to agree to concessions to borrowers to facilitate a sale of collateral or refinance transactions primarily for secured loans in second lien position. Activity in the allowance for loan losses for the nine months ended September 30, 2021 and 2020, is presented in the following table. 2021 2020 Balance January 1, $ 55,000 $ 87,000 Recovery for loan losses — ( 75 ) Charge-offs — ( 31,925 ) Balance September 30, $ 55,000 $ 55,000 Loans designated impaired and any associated allowance for loan losses is presented in the following table. September 30, 2021 December 31, 2020 Number of loans (9) 6 6 Principal $ 3,563,862 $ 7,529,684 Recorded investment (10) 3,701,067 7,895,605 Impaired loans without allowance 3,701,067 7,895,605 Impaired loans with allowance — — Allowance for loan losses, impaired loans — — Weighted average LTV at origination 61.7 % 52.5 % (9) One loan, with principal of approximately $ 405,000 , was more than 90 days delinquent and was not designated impaired at September 30, 2021. The loan was brought current in October 2021, and so is not included in the table above. (10) Recorded investment is the sum of the principal, advances, and accrued interest receivable for financial reporting purposes. Loans designated impaired had an average recorded investment, interest income recognized and interest income received in cash for the nine months ended September 30, 2021 and the year ended December 31, 2020, as presented in the following table. September 30, 2021 December 31, 2020 Average recorded investment $ 5,798,336 $ 6,307,655 Interest income recognized 104,274 704,506 Interest income received in cash 100,836 360,753 Fair Value The following methods and assumptions are used when estimating fair value of secured loans. Secured loans, performing and non-performing not designated as impaired (Level 3) - Each loan is reviewed quarterly for its delinquency, LTV adjusted for the most recent valuation of the underlying collateral, remaining term to maturity, borrower’s payment history and other factors. Due to the nature of the company’s loans and borrowers, the fair value of loan balances secured by deeds of trust approximates the recorded amount (per the financial statements) due to the following: are of shorter terms at origination than commercial real estate loans by institutional lenders and conventional single-family home mortgage lenders; are written without a prepayment penalty causing uncertainty/a lack of predictability as to the expected duration of the loan; and have limited marketability and are not yet sellable into an established secondary market. Secured loans, designated impaired (Level 3) - The fair value of secured loans designated impaired is the lesser of the fair value of the collateral or the enforceable amount of the note. Secured loans designated impaired are collateral dependent because it is expected that the primary source of repayment will not be from the borrower but rather from the collateral. The fair value of the collateral is determined on a nonrecurring basis by exercise of judgment based on management’s experience informed by appraisals (by licensed appraisers), brokers’ opinion of values and publicly available information on in-market transactions (Level 3 inputs). When the fair value of the collateral exceeds the enforceable amount of the note, the borrower is likely to redeem the note. Accordingly, third party market participants would generally pay the fair value of the collateral, but no more than the enforceable amount of the note. The following methods and assumptions are used to determine the fair value of the collateral securing a loan. Single family - Management’s preferred method for determining the fair market value of its single-family residential assets is the sale comparison method. Management primarily obtains sale comps via its subscription to the RealQuest service, but also uses free online services such as Zillow.com and other available resources to supplement this data. Sale comps are reviewed and adjusted for similarity to the subject property, examining features such as proximity to subject, number of bedrooms and bathrooms, square footage, sale date, condition and year built. If applicable sale comps are not available or deemed unreliable, management will seek additional information in the form of brokers’ opinions of value or appraisals. Multi-family residential - Management’s preferred method for determining the aggregate retail value of its multifamily units is the sale comparison method. Sale comps are typically provided in appraisals, or by realtors who specialize in multi-family residential properties. Sales comps are reviewed for similarity to the subject property, examining features such as proximity to subject, rental income, number of units, composition of units by the number of bedrooms and bathrooms, square footage, condition, amenities and year built. Management’s secondary method for valuing its multifamily assets as income-producing rental operations is the direct capitalization method. In order to determine market cap rates for properties of the same class and location as the subject, management refers to published data from reliable third-party sources such as the CBRE Cap Rate Survey. Management applies the appropriate cap rate to the subject’s most recent available annual net operating income to determine the property’s value as an income-producing project. When adequate sale comps are not available or reliable net operating income information is not available or the project is under development or is under-performing to market, management will seek additional information and analysis to determine the cost to improve and the intrinsic fair value and/or management will seek additional information in the form of brokers’ opinion of value or appraisals. Commercial - Management’s preferred method for determining the fair value of its commercial buildings is the sale comparison method. Sale comps are typically provided in appraisals, or by realtors who specialize in commercial properties. Sale comps are reviewed for similarity to the subject property, examining features such as proximity to subject, rental income, number of units, composition of units, common areas, and year built. Management’s secondary method for valuing its commercial buildings is the direct capitalization method. In order to determine market cap rates for properties of the same class and location as the subject, management refers to reputable third-party sources such as the CBRE Cap Rate Survey. Management then applies the appropriate cap rate to the subject’s most recent available annual net operating income to determine the property’s value as an income-producing commercial rental project. When adequate sale comps are not available or reliable net operating income information is not available or the project is under development or is under-performing to market, management will seek additional information and analysis to determine the cost to improve and the intrinsic fair value and/or management will seek additional information in the form of brokers’ opinion of value or appraisals. Commercial land - Commercial land has many variations/uses, thus requiring management to employ a variety of methods depending upon the unique characteristics of the subject land, including a determination of its highest and best use. Management may rely on information in the form of a sale comparison analysis (where adequate sale comps are available), brokers’ opinion of value, or appraisal. |
Line of Credit
Line of Credit | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Line of Credit | NOTE 5 – LINE OF CREDIT Activity involving the line of credit during the nine months ended September 30, 2021 and 2020 is presented in the following table. 2021 2020 Balance, January 1, $ 10,000,000 $ — Draws 8,255,000 19,250,000 Repayments ( 17,155,000 ) ( 9,250,000 ) Balance, September 30, $ 1,100,000 $ 10,000,000 Line of credit - average daily balance $ 8,624,000 $ 6,236,000 In March 2020, RMI IX entered into a revolving line of credit and term loan agreement and in April 2020 borrowed on the bank line of credit. The company can borrow up to a maximum principal of $ 10 million subject to a borrowing base calculation pursuant to a credit and term loan agreement (the loan agreement) with a bank. Amounts under the loan agreement are secured by a first priority security interest in the notes and deeds of trust of the pledged loans in the borrowing base. The loan agreement matures in March 2022 when all amounts outstanding are then due. The company has the option at the maturity date to convert the then outstanding principal balance on the line of credit to a one-year term loan - for a fee of one-quarter of one percent ( 0.25 %) – thereby extending the maturity date to March 2023 . Interest on the outstanding principal is payable monthly and accrues at the per annum rate of the greater of (i) five percent ( 5 %) or (ii) the sum of the one-month LIBOR rate plus three and one-quarter percent ( 3.25 %). If the company does not maintain the required compensating balance with a minimum daily average of $ 1.0 million for the calendar quarter, the interest rate automatically increases by one-quarter of one percent ( 0.25 %) above that rate which would otherwise be applicable for the next calendar quarter retroactive to the beginning of the calendar quarter in which the compensating balance is not maintained. At September 30, 2021, the interest rate was five percent (5%). For each calendar quarter during which the aggregate average daily outstanding principal is less than fifty percent ( 50 %) of the maximum principal of $10 million, there is a quarterly unused line fee equal to one-half of one percent ( 0.50 %) per annum of the average daily difference between the average principal outstanding and fifty percent (50%) of the maximum principal of $10 million ($5,000,000). The loan proceeds are to be used exclusively to fund secured loans. The loan agreement provides for customary financial and borrowing base reporting by the company to the lending bank and specifies that the company shall maintain (i) minimum tangible net worth of $ 50 million, net of amounts due from related companies; (ii) debt service coverage ratio at all times of not less than 2.00 to 1.00 ; and (iii) loan payment delinquency of less than ten percent ( 10.0 %) at calendar quarter-end, calculated as the principal of loans with payments over 61-days past due as determined by the lending bank’s guidance, less loan loss allowances, divided by total principal of the company’s loans. The loan agreement provides that in the event the loan payment delinquency rate exceeds 10.0% as of the end of any quarter, the bank will cease to make any further advances but agrees not to accelerate repayment of the loan. At September 30, 2021 and December 31, 2020, agg regate principal of pledged loans was approximately $ 18,110,000 an d $ 20,068,000 , respectively with a maximum allowed advance thereon of approximately $ 10,000,000 , subject to the borrowing base calculation. Debt issuance costs of approximately $ 110,000 are being amortized over the two -year term of the line of credit agreement. Amortized debt issuance costs included in interest expense approximated $ 13,700 for the three months ended September 30, 2021 and 2020, and $ 41,100 and $ 27,300 for the nine months ended September 30, 2021 and 2020 respectively. |
Commitments and Contingencies,
Commitments and Contingencies, Other Than Loan Commitments | 9 Months Ended |
Sep. 30, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies, Other Than Loan Commitments | NOTE 6 – COMMITMENTS AND CONTINGENCIES, OTHER THAN LOAN COMMITMENTS Commitments Note 3 (Manager and Other Related Parties) presents a detailed discussion of the company’s contractual obligations to RMC and scheduled redemptions of members’ capital at September 30, 2021. Legal proceedings As of September 30, 2021 , the company is not involved in any legal proceedings other than those that would be considered part of the normal course of business. In the normal course of its business, the company may become involved in legal proceedings (such as assignment of rents, bankruptcy proceedings, appointment of receivers, unlawful detainers, judicial foreclosure, etc.) to collect the debt owed under the promissory notes, to enforce the provisions of the deeds of trust, to protect its interest in the real property subject to the deeds of trust and to resolve disputes with borrowers, lenders, lien holders and mechanics. None of these actions, in and of themselves, typically would be of any material financial impact to the net income or balance sheet of the company. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 7 – SUBSEQUENT EVENTS Subsequent to quarter end, two loans with aggregate principal of approximately $ 488,000 , were offered for sale. The manager evaluated events occurring subsequent to September 30, 2021 and determined that there were no other events or transactions occurring during this reporting period that require recognition or disclosure in the unaudited financial statements . |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of presentation The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). |
Management Estimates | Management estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions about the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities, at the dates of the financial statements and the reported amounts of revenues and expenses during the reported periods. Such estimates relate principally to the determination of the allowance for loan losses, including, when applicable, the valuation of impaired loans (which itself requires determining the fair value of the collateral), and the valuation of real estate owned, at acquisition and subsequently. Actual results could differ materially from these estimates. |
Fair Value Estimates | Fair value estimates GAAP defines fair value as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets and liabilities; it is not a forced transaction. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact and (iv) willing to transact. Fair values of assets and liabilities are determined based on the fair-value hierarchy established in GAAP. The hierarchy is comprised of three levels of inputs to be used: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the company has the ability to access at the measurement date. An active market is a market in which transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 inputs are inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly in active markets and quoted prices for identical assets or liabilities that are not active, and inputs other than quoted prices that are observable, or inputs derived from or corroborated by market data. Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs reflect the company’s own assumptions about the assumptions market participants would use in pricing the asset or liability (including assumptions about risk). Unobservable inputs are developed based on the best information available in the circumstances and may include the company’s own data. The fair value of real property is determined by exercise of judgment based on management’s experience informed by appraisals (by licensed appraisers), brokers’ opinion of values and publicly available information on in-market transactions. Appraisals of commercial real property generally present three approaches to estimating value: 1) market comparables or sales approach; 2) cost to replace; and 3) capitalized cash flows or income approach. These approaches may or may not result in a common, single value. The market-comparables approach may yield several different values depending on certain basic assumptions, including the consideration of adjustments made for any attributes specific to the real property. Management has the requisite familiarity with the real estate markets it lends in and of the specific properties lent on to analyze sales-comparables and assess their suitability/applicability. Management is acquainted with market participants – investors, developers, brokers, lenders – that are useful, relevant secondary sources of data and information regarding valuation and valuation variability. These secondary sources may have familiarity with and perspectives on pending transactions, successful strategies to optimize value and the history and details of specific properties – on and off the market – that enhance the process and analysis that is particularly and principally germane to establishing value in distressed markets and/or property types. |
Cash in Banks | Cash in banks Certain of the company’s cash balances in banks exceed federally insured limits of $ 250,000 . The bank or banks in which funds are deposited are reviewed periodically for their general creditworthiness/investment grade credit rating. See Note 5 (Line of Credit) for compensating balance arrangements. |
Loans and Interest Income | Loans and interest income Performing loans are carried at amortized cost which is generally equal to the unpaid principal balance (principal). Management has discretion to pay amounts (advances) to third parties on behalf of borrowers to protect the company’s interest in the loan. Advances include, but are not limited to, the payment of interest and principal on a senior lien to prevent foreclosure by the senior lien holder, property taxes, insurance premiums and attorney fees. Advances generally are stated at the amounts paid out on the borrower’s behalf and any accrued interest on amounts paid out, until repaid by the borrower. For performing loans, interest is accrued daily on the principal plus advances, if any. Non-performing loans (i.e., loans with a payment in arears) less than 180 days delinquent continue to recognize interest income as long as the loan is in the process of collection and is considered to be well-secured. Non-performing loans are placed on non-accrual status if 180 days delinquent or earlier if management determines that the primary source of repayment will come from the foreclosure and subsequent sale of the collateral securing the loan (which usually occurs when a notice of sale is filed) or when the loan is no longer considered well-secured. When a loan is placed on non-accrual status, the accrual of interest is discontinued for accounting purposes only; however, previously recorded interest is not reversed. A loan may return to accrual status when all delinquent interest and principal payments become current in accordance with the terms of the loan agreement. Late fees are recognized in the period received. The company may fund a specific loan net of an interest reserve ( one to two years ) to insure timely interest payments at the inception of the loan. Any interest reserve is amortized over the period that the amount is prepaid. In the event of an early loan payoff, any unapplied interest reserves would be first applied to any accrued but unpaid interest and then as a reduction to the principal. In the normal course of the company’s operating activities, performing loans that are maturing or have matured may be renewed at then current market rates of interest and terms for new loans. From time to time, the manager negotiates and enters into loan modifications with borrowers whose loans are delinquent (non-performing). If a borrower is experiencing financial difficulties and a loan modification were to result in an economic concession to the borrower (i.e., a significant delay or reduction in cash flows compared to the original note), the modification is deemed a troubled debt restructuring (TDR). In March 2020, various federal regulatory agencies issued an interagency statement on loan modifications and reporting for financial institutions working with borrowers affected by COVID-19. The interagency statement was effective immediately and impacted accounting for loan modifications. The agencies confirmed with the staff of the Financial Accounting Standards Board (FASB) that short-term modifications made on a good faith basis in response to COVID- 19 to borrowers who were current prior to any relief, are not to be considered TDRs. This includes short-term (e.g., six months) modifications such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant. The company funds loans with the intent to hold the loans until maturity. From time to time the company may sell certain loans when the manager determines it to be in the best interest of the company. Loans are classified as held-for-sale once a decision has been made to sell loans and the loans held-for-sale have been identified. Loans classified as held for sale are carried at the lower of cost or fair value. Pursuant to California regulatory requirements, borrower payments are deposited into a trust account established by RMC with an independent bank (and are presented on the balance sheet as “Loan payments in trust”). Funds are disbursed to the company as collected which can range from same day for wire transfers and up to two weeks after deposit for checks. |
Allowance for Loan Losses | Allowance for loan losses Loans and the related accrued interest and advances (i.e., the loan balance) are analyzed on a periodic basis for ultimate recoverability. Collateral fair values are reviewed quarterly and the protective equity for each loan is computed. As used herein, “protective equity” is the dollar amount by which the net realizable value (i.e., fair value less the cost to sell) of the collateral, net of any senior liens exceeds the loan balance, where “loan balance” is the sum of the unpaid principal, advances and the recorded interest thereon. If based upon current information and events, it is deemed probable the company will not collect substantially all amounts due according to the contractual terms of the original loan agreement, then a loan is designated as impaired. An insignificant delay or insignificant shortfall in the amount of payments does not constitute non-performance with the contractual terms of the original loan agreement if the manager expects to collect the amounts due including interest accrued at the contractual interest rate for the period of delay. In determining the probability that the borrower will not substantially perform according to the terms of the original loan agreement, the manager considers the following: payment status – if payments are in arrears 90+ days (typically 3 payments past due) loans are designated impaired unless resolution of the delinquency is forthcoming without significant delay; bankruptcy – if the borrower files bankruptcy, the loan is designated impaired; notice of sale – if the company files a notice of sale, the loan is designated impaired. Payments on loans designated as impaired are applied in the following order: late fees, accrued interest, advances, and lastly to principal. For loans that are deemed collateral dependent for repayment, a provision for loan losses is recorded to adjust the allowance for loan losses (principal and/or recorded interest) in an amount such that the net carrying amount (unpaid principal plus recorded interest, less the specific allowance) is reduced to the lower of the loan balance or the estimated fair value of the related collateral, net of any costs to sell and net of any senior debt and claims. The company charges off uncollectible loans and related receivables directly to the allowance account once it is determined the full amount is not collectible. Any amounts collected after a charge off is deemed a recovery of loan losses. If the loan goes to foreclosure, an updated appraisal is ordered and the recorded investment in the loan is adjusted to the net realizable value of the REO to be acquired. The adjustment is made to the specific reserve in the allowance for loan losses by a charge or a credit to the provision for loan losses. |
Real Estate Owned (REO) | Real estate owned (REO) Real estate owned, or REO, is property acquired in full or partial settlement of loan obligations generally through foreclosure and is recorded at acquisition at the property’s net realizable value, which is the fair value less estimated costs to sell, as applicable. The fair value estimates are derived from information available in the real estate markets including similar property, and often require the experience and judgment of third parties such as commercial real estate appraisers and brokers. The estimates figure materially in calculating the value of the property at acquisition, the level of charge to the allowance for loan losses and any subsequent valuation reserves. After acquisition, costs incurred relating to the development and improvement of property are capitalized to the extent they do not cause the recorded value to exceed the net realizable value, whereas costs relating to holding and disposition of the property are expensed as incurred. REO is analyzed periodically for changes in fair values and any subsequent write down is charged to operations expenses. Any recovery in the fair value subsequent to such a write down is recorded and is not to exceed the value recorded at acquisition. Recognition of gains or losses on the sale of real estate is dependent upon the transaction meeting certain criteria related to the nature of the property and the terms of the sale including potential seller financing. |
Debt Issuance Costs | Debt issuance costs Debt issuance costs are the fees and commissions incurred in the course of obtaining a line of credit for services from banks, law firms and other professionals and are amortized on a straight-line basis, which approximates the interest method, as interest expense over the term of the line of credit. |
Recently Issued Accounting Pronouncements | Recently issued accounting pronouncements - Accounting and Financial reporting for Expected Credit Losses The FASB issued an Accounting Standards Update (“ASU”) that significantly changes how entities will account for credit losses for most financial assets that are not measured at fair value through net income. The new standard will supersede currently in effect guidance and applies to all entities. Entities will be required to use a current expected credit loss (“CECL”) model to estimate credit impairment. This estimate will be forward-looking, meaning management will be required to use not only historical trends and current conditions, but must also consider forecasts about future economic conditions to determine the expected credit loss over the remaining life of an instrument. This will be a significant change from the current incurred credit loss model, and generally may result in allowances being recognized in earlier periods than under the current credit loss model. The ASU is effective for smaller reporting companies for interim and annual reporting periods in 2023. RMI IX invests in real estate secured loans made with the expectation that the possibility of credit losses is remote as a result of substantial protective equity provided by the underlying collateral. The real estate secured programs and low loan-to-value ratios have caused the company to expect that the adoption of the CECL model from the incurred loss models presently in use as to credit loss recognition will likely not materially impact the reported results of operations or financial position. However, the impact, if any, upon adoption will be dependent upon the facts and circumstances relating to the company’s loans at that date. - Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, provides temporary optional expedients for various agreements and contracts that utilize the London Interbank Offered Rate (“LIBOR”) as the benchmark reference rate. The relief generally applies to eligible modifications of contractual terms that change (or have the potential to change) the amount or timing of contractual cash flows related to replacement of a reference rate. The relief allows such modifications to be accounted for as continuations of existing contracts without additional analysis. As the guidance in ASU 2020-04 is intended to assist entities during the global market-wide reference rate transition period, it is in effect from March 12, 2020 through December 31, 2022. The Company is currently evaluating the impact of the potential discontinuance of LIBOR in relation to the company’s line of credit and has not yet adopted the optional relief. |
Manager and Other Related Par_2
Manager and Other Related Parties (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
Schedule of Accounts, Notes, Loans and Financing Receivable | Formation loan transactions for the nine months ended September 30, 2021 and 2020 are presented in the following table. 2021 2020 Balance, January 1 $ 3,812,019 $ 3,948,064 Payments received from RMC ( 357,468 ) — Early withdrawal penalties applied ( 13,014 ) ( 15,063 ) Balance, September 30 $ 3,441,537 $ 3,933,001 |
Schedule of Unit Redemptions | Redemptions of members’ capital for the three and nine months ended September 30, 2021 and 2020 are presented in the following table. Three months ended Nine months ended Redemptions 2021 2020 2021 2020 Without penalty $ 794,264 $ 747,009 $ 3,226,591 $ 1,509,603 With penalty 356,539 119,777 624,269 543,872 Total $ 1,150,803 $ 866,786 $ 3,850,860 $ 2,053,475 Early withdrawal penalties $ 13,775 $ 5,598 $ 24,402 $ 27,531 |
Summary of Organization and Offering Expenses | Unallocated O&O transactions for the nine months ended September 30, 2021 and 2020 are summarized in the following table. 2021 2020 Balance, January 1 $ 1,858,282 $ 2,260,068 O&O expenses allocated ( 229,179 ) ( 240,489 ) O&O expenses paid by RMC (1) ( 68,687 ) ( 42,184 ) Early withdrawal penalties applied (2) ( 11,388 ) ( 12,468 ) Balance, September 30 $ 1,549,028 $ 1,964,927 (1) RMC is obligated per the Operating Agreement to repay RMI IX for the amount of unallocated O&O expenses attributed to a member’s capital account if the member redeems prior to the 40 quarter ly allocations. RMC estimated its future obligation to repay unallocated O&O expenses on scheduled redemptions as of September 30, 2021 , to be approximately $ 12,571 , which may be offset in part by early withdrawal penalties collected in future periods. (2) The O&O expenses component of early withdrawal penalties are applied as a reduction to O&O expenses to be repaid by RMC to members’ capital on scheduled redemptions. The amounts credited are determined by the ratio between the amount of the formation loan and the amount of offering costs incurred by the company. |
Loans (Tables)
Loans (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Secured Loan Principal Transactions | Secured loan transactions for the three and nine months ended September 30, 2021 are summarized in the following table. Three months ended Nine months ended Principal, beginning of period $ 79,876,199 $ 82,274,807 Loans funded 16,443,500 34,824,300 Principal collected ( 22,780,339 ) ( 42,683,651 ) Loans transferred from related mortgage fund — 4,671,760 Loans transferred to related mortgage funds — ( 2,559,588 ) Loans sold to non-affiliate — ( 2,988,268 ) Principal, September 30 $ 73,539,360 $ 73,539,360 |
Secured Loans Characteristics | Secured loans had the characteristics presented in the following table. September 30, December 31, 2021 2020 Number of secured loans 54 82 Secured loans – principal $ 73,539,360 $ 82,274,807 Secured loans – lowest interest rate (fixed) 6.8 % 6.8 % Secured loans – highest interest rate (fixed) 10.5 % 10.5 % Average secured loan – principal $ 1,361,840 $ 1,003,351 Average principal as percent of total principal 1.9 % 1.2 % Average principal as percent of members’ capital, net 1.8 % 1.3 % Average principal as percent of total assets 1.8 % 1.2 % Largest secured loan – principal $ 6,735,000 $ 6,735,000 Largest principal as percent of total principal 9.2 % 8.2 % Largest principal as percent of members’ capital, net 8.7 % 8.5 % Largest principal as percent of total assets 9.0 % 7.9 % Smallest secured loan – principal $ 53,180 $ 104,378 Smallest principal as percent of total principal 0.1 % 0.1 % Smallest principal as percent of members’ capital, net 0.1 % 0.1 % Smallest principal as percent of total assets 0.1 % 0.1 % Number of California counties where security is located 12 14 Largest percentage of principal in one California county 36.2 % 28.2 % Number of secured loans with prepaid interest 3 — Prepaid interest $ 804,164 $ — |
Secured Loans by Lien Position in the Collateral | At funding, secured loans had the lien positions presented in the following table. September 30, 2021 December 31, 2020 Loans Principal Percent Loans Principal Percent First trust deeds 36 $ 61,040,293 83 % 56 $ 61,066,097 74 % Second trust deeds 18 12,499,067 17 26 21,208,710 26 Total principal, secured loans 54 73,539,360 100 % 82 82,274,807 100 % Liens due other lenders at loan closing 32,289,086 45,206,740 Total debt $ 105,828,446 $ 127,481,547 Appraised property value at loan closing $ 206,880,000 $ 251,970,000 Percent of total debt to appraised values (1) 55.2 % 55.6 % (1) Based on appraised values and liens due other lenders at loan closing. The weighted-average loan-to-value (LTV) computation above does not take into account subsequent increases or decreases in property values following the loan closing nor does it include decreases or increases on senior liens to other lenders. |
Secured Loans by Property Type of the Collateral | Secured loans summarized by property type are presented in the following table. September 30, 2021 December 31, 2020 Loans Principal Percent Loans Principal Percent Single family (2) 24 $ 21,799,270 30 % 47 $ 30,297,525 37 % Commercial 22 45,546,473 62 27 43,692,125 53 Multi-family 7 4,693,617 6 8 8,285,157 10 Land 1 1,500,000 2 — — — Total principal, secured loans 54 $ 73,539,360 100 % 82 $ 82,274,807 100 % Single family property type as of September 30, 2021 consists of 6 loans with principal of $ 4,432,988 that are owner occupied and 18 loans with principal of $ 17,366,282 that are non-owner occupied. At December 31, 2020, single family property type consisted of 8 loans with principal of $ 5,565,052 that are owner occupied and 39 loans with principal of $ 24,732,473 that are non-owner occupied. |
Secured Loans Distributed within California | The distribution of secured loans within California by counties is presented in the following table. September 30, 2021 December 31, 2020 Principal Percent Principal Percent San Francisco Bay Area (3) Santa Clara $ 26,652,130 36.2 % $ 23,205,654 28.2 % San Francisco 14,180,433 19.3 11,339,546 13.8 San Mateo 5,640,797 7.7 6,878,086 8.4 Alameda 4,234,940 5.8 6,790,814 8.2 Contra Costa 693,042 0.9 1,094,189 1.3 Marin — — 1,944,696 2.4 51,401,342 69.9 51,252,985 62.3 Other Northern California Placer 1,500,000 2.0 — 0.0 Monterey — 0.0 1,110,000 1.4 Tehama 404,831 0.6 404,837 0.5 Sacramento 53,180 0.1 104,378 0.1 1,958,011 2.7 1,619,215 2.0 Northern California Total 53,359,353 72.6 52,872,200 64.3 Los Angeles & Coastal Los Angeles 3,310,492 4.5 11,775,334 14.3 San Diego 6,694,439 9.1 10,186,152 12.4 Orange 8,456,076 11.5 5,431,677 6.6 Santa Barbara — — 290,444 0.3 18,461,007 25.1 27,683,607 33.6 Other Southern California San Bernardino 1,719,000 2.3 1,719,000 2.1 Southern California Total 20,180,007 27.4 29,402,607 35.7 Total principal, secured loans $ 73,539,360 100.0 % $ 82,274,807 100.0 % (3) Includes Silicon Valley |
Secured Loans Scheduled Maturities | Secured loans scheduled to mature as of September 30, 2021, are presented in the following table. Loans Principal Percent 2021 (4) 7 $ 10,777,995 15 % 2022 24 30,344,280 41 2023 11 21,585,948 29 2024 3 5,320,650 7 2025 5 3,743,816 5 Thereafter 1 237,605 1 Total scheduled maturities 51 72,010,294 98 Matured as of September 30, 2021 3 1,529,066 2 Total principal, secured loans 54 $ 73,539,360 100 % (4) Loans scheduled to mature in 2021 after September 30 . |
Past Due Financing Receivables | Secured loans summarized by payment-delinquency status are presented in the following table. September 30, 2021 December 31, 2020 Loans Principal Loans Principal Current 43 $ 66,457,146 73 $ 74,041,631 Past Due 30-89 days 4 3,113,520 1 190,195 90-179 days 5 2,182,637 5 4,756,811 180 or more days 2 1,786,057 3 3,286,170 Total past due 11 7,082,214 9 8,233,176 Total principal, secured loans 54 $ 73,539,360 82 $ 82,274,807 |
Payments in Arrears Past Due Financing Receivables | Payments in arrears for non-performing secured loans (i.e., monthly interest and principal payments past due 30 or more days) at September 30, 2021 and December 31, 2020, are presented in the following tables. Loans Principal Interest(5) At September 30, 2021 Past Monthly Past Monthly Past Monthly Total Past due 30-89 days 1 3 $ 931,458 $ 808 $ — $ 17,331 $ 949,597 90-179 days 2 3 597,608 858 — 59,879 658,345 180 or more days 1 1 1,200,000 2,823 199,500 24,907 1,427,230 Total past due (6) 4 7 $ 2,729,066 $ 4,489 $ 199,500 $ 102,117 $ 3,035,172 (5) Interest includes foregone interest of approximately $ 126,000 on non-accrual loans past maturity and approximately $ 38,000 for monthly payments in arrears. September 2021 interest is due October 1, 2021 and is not included in the payments in arrears at September 30, 2021. (6) In October 2021, two loans included in the table above as 30-89 days past due on monthly payments, and one loan included in the table above as 90-179 days past due on monthly payments, were brought current. The remaining two loans included in the table above as 90-179 days past due on monthly payments each made one payment during October. Loans Principal Interest (7) At December 31, 2020 Past Monthly Past Monthly Past Monthly Total Past due 30-89 days — 1 $ — $ 378 $ — $ 1,509 $ 1,887 90-179 days 1 4 376,613 854 — 146,270 523,737 180 or more days 1 1 1,200,000 29 105,000 108,034 1,413,063 Total past due (8) 2 6 $ 1,576,613 $ 1,261 $ 105,000 $ 255,813 $ 1,938,687 (7) Interest includes foregone interest of $ 42,000 on non-accrual loans past maturity and approximately $ 20,800 for monthly payments in arrears. December 2020 interest is due January 1, 2021 and is not included in the payments in arrears at December 31, 2020. (8) One loan with principal of approximately $ 137,000 , which was 180 or more days past due, paid in full in January 2021 and so was not designated as non-performing at December 31, 2020, and is not included in the table above. |
Secured Loans in Non-Accrual Status | Secured loans in non-accrual status are summarized in the following table. September 30, 2021 December 31, 2020 Number of loans 3 3 Principal $ 2,380,198 $ 3,339,684 Advances 10,277 10,320 Accrued interest 93,452 181,060 Total recorded investment $ 2,483,927 $ 3,531,064 Foregone interest $ 182,718 $ 62,821 |
Activity in Allowance for Loan Losses | Activity in the allowance for loan losses for the nine months ended September 30, 2021 and 2020, is presented in the following table. 2021 2020 Balance January 1, $ 55,000 $ 87,000 Recovery for loan losses — ( 75 ) Charge-offs — ( 31,925 ) Balance September 30, $ 55,000 $ 55,000 |
Impaired Loans [Member] | |
Impaired Financing Receivables | Loans designated impaired and any associated allowance for loan losses is presented in the following table. September 30, 2021 December 31, 2020 Number of loans (9) 6 6 Principal $ 3,563,862 $ 7,529,684 Recorded investment (10) 3,701,067 7,895,605 Impaired loans without allowance 3,701,067 7,895,605 Impaired loans with allowance — — Allowance for loan losses, impaired loans — — Weighted average LTV at origination 61.7 % 52.5 % (9) One loan, with principal of approximately $ 405,000 , was more than 90 days delinquent and was not designated impaired at September 30, 2021. The loan was brought current in October 2021, and so is not included in the table above. (10) Recorded investment is the sum of the principal, advances, and accrued interest receivable for financial reporting purposes. |
Average Balances and Interest Income [Member] | |
Impaired Financing Receivables | Loans designated impaired had an average recorded investment, interest income recognized and interest income received in cash for the nine months ended September 30, 2021 and the year ended December 31, 2020, as presented in the following table. September 30, 2021 December 31, 2020 Average recorded investment $ 5,798,336 $ 6,307,655 Interest income recognized 104,274 704,506 Interest income received in cash 100,836 360,753 |
Line Of Credit (Tables)
Line Of Credit (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Line Of Credit Facility [Abstract] | |
Schedule of Line of Credit Facilities Activity | Activity involving the line of credit during the nine months ended September 30, 2021 and 2020 is presented in the following table. 2021 2020 Balance, January 1, $ 10,000,000 $ — Draws 8,255,000 19,250,000 Repayments ( 17,155,000 ) ( 9,250,000 ) Balance, September 30, $ 1,100,000 $ 10,000,000 Line of credit - average daily balance $ 8,624,000 $ 6,236,000 |
Organization and General - Addi
Organization and General - Additional Information (Details) | 9 Months Ended | 117 Months Ended | |
Sep. 30, 2021USD ($)Unit | May 31, 2019 | May 09, 2019USD ($)shares | |
Organization and General (Details) [Line Items] | |||
Members or partners capital, description | Cash available for distribution at the end of each calendar month is allocated ninety-nine percent (99%) to the members and one percent (1%) to the manager. | ||
Percentage of distribution allocated to members | 99.00% | ||
Cumulative difference between earnings allocated to members' account and net income available to members | $ 34,000 | ||
Unit Redemption Program, Years After Purchase | 1 year | ||
Maximum capital units for redemption per quarter per individual | Unit | 100,000 | ||
Maximum percentage of members total outstanding units for redemption per quarter per individual | 25.00% | ||
Maximum percentage of weighted average number of members outstanding units during twelve months for redemption | 5.00% | ||
Redemption Between Two to Three Years [Member] | |||
Organization and General (Details) [Line Items] | |||
Redemption value percentage of purchase price or capital account balance | 94.00% | ||
Redemption Between Three to Four Years [Member] | |||
Organization and General (Details) [Line Items] | |||
Redemption value percentage of purchase price or capital account balance | 96.00% | ||
Redemption Between Four to Five Years [Member] | |||
Organization and General (Details) [Line Items] | |||
Redemption value percentage of purchase price or capital account balance | 98.00% | ||
Redemption After Five Years [Member] | |||
Organization and General (Details) [Line Items] | |||
Redemption value percentage of purchase price or capital account balance | 100.00% | ||
DRIP [Member] | |||
Organization and General (Details) [Line Items] | |||
Gross proceeds from unit sales | $ 5,596,000 | ||
Member Units [Member] | |||
Organization and General (Details) [Line Items] | |||
Capital unit sold in public offering, shares | shares | 15,000,000 | ||
Capital unit sold in public offering, value | $ 15,000,000 | ||
RMC [Member] | |||
Organization and General (Details) [Line Items] | |||
Ownership interest held by the manager | 1.00% | ||
Managers share of net income or loss | 1.00% | ||
Percentage of profits and losses allocated to manager | 1.00% |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2021USD ($)Approach | |
Summary of Significant Accounting Policies [Line Items] | |
Estimating Real Property Value, Number of Approaches | Approach | 3 |
Impaired loans maximum days of delinquent | 180 days |
Interest Reserve Minimum Length | 1 year |
Interest Reserve Maximum Length | 2 years |
Maximum [Member] | |
Summary of Significant Accounting Policies [Line Items] | |
Federal Insurance Limit | $ | $ 250,000 |
Manager and Other Related Par_3
Manager and Other Related Parties - Additional Information (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)MortgageLoan | Sep. 30, 2020USD ($)LoanMortgageLoan | Dec. 31, 2020USD ($)MortgageLoan | Jun. 30, 2021USD ($) | ||
Managers And Other Related Parties Details [Line Items] | |||||||
Managers Share of net income or loss | 1.00% | ||||||
Liquidation offering proceeds, percentage | (7.00%) | ||||||
Loan formations, amount | $ 5,626,566 | ||||||
Remaining performance obligation, amount | $ 3,441,537 | 3,441,537 | |||||
Future redemptions of member's capital | 931,390 | ||||||
Early withdrawal penalties | [1] | $ 11,388 | $ 12,468 | ||||
Reimbursement as a percentage of member's original purchase price | 0.45% | ||||||
Percentage of original purchase price, quarterly installment percentage | 0.1125% | ||||||
Payable to related parties | 3,501 | $ 3,501 | $ 4,185 | ||||
Receivables from manager | 0 | 2,267 | |||||
Principal | 73,539,360 | $ 73,539,360 | $ 82,274,807 | $ 79,876,199 | |||
Reimbursement as a percentage of member's original purchase price | MortgageLoan | 54 | 82 | |||||
Mortgage Loans transferred On Real Estate Number Of Loans | Loan | 0 | ||||||
Five Performing Loan [Member] | |||||||
Managers And Other Related Parties Details [Line Items] | |||||||
Principal | 4,671,760 | $ 4,671,760 | |||||
Reimbursement as a percentage of member's original purchase price | MortgageLoan | 5 | ||||||
One Performing Loan [Member] | |||||||
Managers And Other Related Parties Details [Line Items] | |||||||
Principal | $ 2,296,677 | $ 2,296,677 | |||||
Reimbursement as a percentage of member's original purchase price | MortgageLoan | 1 | ||||||
Two Performing Loan [Member] | |||||||
Managers And Other Related Parties Details [Line Items] | |||||||
Principal | $ 2,559,588 | $ 2,559,588 | |||||
Reimbursement as a percentage of member's original purchase price | MortgageLoan | 5 | ||||||
Accounts Payable And Cost Reimbursements [Member] | |||||||
Managers And Other Related Parties Details [Line Items] | |||||||
Payable to related parties | $ 6,452 | ||||||
Scheduled for Payment 2020 [Member] | |||||||
Managers And Other Related Parties Details [Line Items] | |||||||
Future redemptions of member's capital | $ 670,383 | ||||||
Scheduled for Payment 2021 [Member] | |||||||
Managers And Other Related Parties Details [Line Items] | |||||||
Future redemptions of member's capital | 261,007 | ||||||
Scheduled for Payment Penalty [Member] | |||||||
Managers And Other Related Parties Details [Line Items] | |||||||
Early withdrawal penalties | $ 10,128 | ||||||
RMC [Member] | |||||||
Managers And Other Related Parties Details [Line Items] | |||||||
Management Fee, Percentage | 0.75% | 0.75% | |||||
Working Capital Reserve, Percentage | 2.00% | 2.00% | |||||
Qualifying costs incurred | $ 143,461 | 145,054 | $ 448,157 | $ 435,868 | |||
Reimbursement of costs | $ 73,439 | 72,873 | $ 233,873 | 363,687 | |||
Administrative Fees, Percentage | 1.00% | 1.00% | |||||
Administrative Fees Chargeable | $ 164,435 | 143,520 | $ 348,243 | 363,279 | |||
Loan Brokerage Commission Percent Minimum | 1.50% | 1.50% | |||||
Loan Brokerage Commission Percent Maximum | 5.00% | 5.00% | |||||
Loan Brokerage Commissions, Maximum Percent of Assets | 4.00% | 4.00% | |||||
Loan Brokerage Commission | $ 267,000 | 438,000 | $ 694,000 | 867,000 | |||
Repayment of formation loan in annual installments | 496,000 | $ 496,000 | |||||
Formation loan payment date | Dec. 31, 2022 | ||||||
Loan quarterly payments of principal | $ 124,000 | ||||||
Future redemptions of member's capital | 1,150,803 | 866,786 | 3,850,860 | 2,053,475 | |||
Early withdrawal penalties | 13,775 | $ 5,598 | 24,402 | $ 27,531 | |||
RMC [Member] | Accounts Payable Related to Mortgage Fund [Member] | |||||||
Managers And Other Related Parties Details [Line Items] | |||||||
Payable to related parties | $ 3,501 | $ 3,501 | |||||
Maximum [Member] | |||||||
Managers And Other Related Parties Details [Line Items] | |||||||
Annual mortgage servicing fees, percentage | 0.25% | 0.25% | |||||
Percentage of reimbursement of organization and offering expenses | 4.50% | ||||||
Reimbursement threshold | For each of forty (40) calendar quarters or portion thereof after December 31, 2015 | ||||||
[1] | The O&O expenses component of early withdrawal penalties are applied as a reduction to O&O expenses to be repaid by RMC to members’ capital on scheduled redemptions. The amounts credited are determined by the ratio between the amount of the formation loan and the amount of offering costs incurred by the company. |
Manager and Other Related Par_4
Manager and Other Related Parties - Formation Loan Transactions (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Formation Loan Transactions [Abstract] | ||
Balance, January 1 | $ 3,812,019 | $ 3,948,064 |
Payments received from RMC | (357,468) | |
Early withdrawal penalties applied | (13,014) | (15,063) |
Balance, September 30 | $ 3,441,537 | $ 3,933,001 |
Manager and Other Related Par_5
Manager and Other Related Parties - Schedule of Unit Redemptions (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | ||
Managers And Other Related Parties Details [Line Items] | |||||
Total, Capital redemptions | $ 931,390 | ||||
Early withdrawal penalties | [1] | 11,388 | $ 12,468 | ||
RMC [Member] | |||||
Managers And Other Related Parties Details [Line Items] | |||||
Total, Capital redemptions | $ 1,150,803 | $ 866,786 | 3,850,860 | 2,053,475 | |
Early withdrawal penalties | 13,775 | 5,598 | 24,402 | 27,531 | |
RMC [Member] | Without Penalty [Member] | |||||
Managers And Other Related Parties Details [Line Items] | |||||
Total, Capital redemptions | 794,264 | 747,009 | 3,226,591 | 1,509,603 | |
RMC [Member] | With Penalty [Member] | |||||
Managers And Other Related Parties Details [Line Items] | |||||
Total, Capital redemptions | $ 356,539 | $ 119,777 | $ 624,269 | $ 543,872 | |
[1] | The O&O expenses component of early withdrawal penalties are applied as a reduction to O&O expenses to be repaid by RMC to members’ capital on scheduled redemptions. The amounts credited are determined by the ratio between the amount of the formation loan and the amount of offering costs incurred by the company. |
Manager and Other Related Par_6
Manager and Other Related Parties - Summary of Organization and Offering Expenses (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | ||
Related Party Transactions [Abstract] | |||
Balance, January 1 | $ 1,858,282 | $ 2,260,068 | |
O&O expenses allocated | (229,179) | (240,489) | |
O&O expenses paid by RMC | [1] | (68,687) | (42,184) |
Early withdrawal penalties applied | [2] | (11,388) | (12,468) |
Balance, September 30 | $ 1,549,028 | $ 1,964,927 | |
[1] | RMC is obligated per the Operating Agreement to repay RMI IX for the amount of unallocated O&O expenses attributed to a member’s capital account if the member redeems prior to the 40 quarter ly allocations. RMC estimated its future obligation to repay unallocated O&O expenses on scheduled redemptions as of September 30, 2021 , to be approximately $ 12,571 , which may be offset in part by early withdrawal penalties collected in future periods. | ||
[2] | The O&O expenses component of early withdrawal penalties are applied as a reduction to O&O expenses to be repaid by RMC to members’ capital on scheduled redemptions. The amounts credited are determined by the ratio between the amount of the formation loan and the amount of offering costs incurred by the company. |
Manager and Other Related Par_7
Manager and Other Related Parties - Summary of Organization and Offering Expenses (Parenthetical) (Details) | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Related Party Transactions [Abstract] | |
Unallocated O&O expenses on units rebates period | 120 months |
Estimated future rebates on scheduled redemptions | $ 12,571 |
Loans - Additional Information
Loans - Additional Information (Details) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2021USD ($)Loan | Jun. 30, 2021USD ($) | Sep. 30, 2021USD ($)MortgageLoanLoan | Dec. 31, 2020USD ($)LoanMortgageLoan | Sep. 30, 2021MortgageLoan | Sep. 30, 2021 | Sep. 30, 2021Loan | Jan. 31, 2021USD ($) | Dec. 31, 2020MortgageLoan | Dec. 31, 2020Loan | |
Loans (Details) [Line Items] | ||||||||||
Mortgage Loans On Real Estate Number Of Loans | MortgageLoan | 54 | 82 | ||||||||
Loans Receivable, Number of Principal and Interest Loans | Loan | 28 | |||||||||
Loans Receivable, Amortization Term | 30 years | |||||||||
Number of loans | Loan | 3 | 15 | ||||||||
Aggregate principal renewed | $ 8,776,000 | $ 22,274,000 | ||||||||
Number of loans sold | Loan | 5 | |||||||||
Financing Receivable, Recorded Investment, Nonaccrual Status (in Dollars) | 0 | $ 2,988,000 | ||||||||
Loans Receivable Largest Loan (in Dollars) | 6,735,000 | 6,735,000 | $ 6,735,000 | |||||||
Loans - principal (in Dollars) | 73,539,360 | $ 79,876,199 | 73,539,360 | 82,274,807 | ||||||
Number of loans | 0 | 54 | 0 | 82 | ||||||
Number of loans | 0 | 54 | 0 | 82 | ||||||
Principal | 73,539,360 | 73,539,360 | 82,274,807 | |||||||
Principal | 73,539,360 | 73,539,360 | 82,274,807 | |||||||
Arrears on principal payments of non performing secured loans . | 2,733,555 | $ 2,733,555 | $ 1,577,874 | |||||||
Non performing number of loans | Loan | 11 | 8 | ||||||||
Arrears on interest payments of non performing secured loans | 301,617 | $ 301,617 | $ 360,813 | |||||||
Forbearance Agreement [Member] | ||||||||||
Loans (Details) [Line Items] | ||||||||||
Number of loans | MortgageLoan | 2 | 2 | ||||||||
Number of loans | MortgageLoan | 2 | 2 | ||||||||
Financing Receivables Ninety To One Hundred And Seventy Nine Days Past Due | ||||||||||
Loans (Details) [Line Items] | ||||||||||
Number of loans | Loan | 5 | 5 | ||||||||
Number of loans | Loan | 5 | 5 | ||||||||
Principal | 2,182,637 | 2,182,637 | 4,756,811 | |||||||
Principal | 2,182,637 | 2,182,637 | 4,756,811 | |||||||
Financing Receivables Ninety To One Hundred And Seventy Nine Days Past Due | Forbearance Agreement [Member] | ||||||||||
Loans (Details) [Line Items] | ||||||||||
Number of loans | MortgageLoan | 1 | 1 | ||||||||
Number of loans | MortgageLoan | 1 | 1 | ||||||||
Principal | 990,000 | 990,000 | 990,000 | |||||||
Principal | 990,000 | 990,000 | 990,000 | |||||||
Past Due 180 Or More Days [Member] | ||||||||||
Loans (Details) [Line Items] | ||||||||||
Number of loans | 2 | 1 | 3 | |||||||
Number of loans | 2 | 1 | 3 | |||||||
Principal | 1,786,057 | 1,786,057 | 3,286,170 | $ 137,000 | ||||||
Principal | 1,786,057 | 1,786,057 | 3,286,170 | $ 137,000 | ||||||
Past Due 180 Or More Days [Member] | Forbearance Agreement [Member] | ||||||||||
Loans (Details) [Line Items] | ||||||||||
Number of loans | MortgageLoan | 1 | 1 | ||||||||
Number of loans | MortgageLoan | 1 | 1 | ||||||||
Principal | 1,200,000 | 1,200,000 | 1,200,000 | |||||||
Principal | 1,200,000 | 1,200,000 | 1,200,000 | |||||||
Past Due 366 Days [Member] | ||||||||||
Loans (Details) [Line Items] | ||||||||||
Principal | 190,198 | 190,198 | ||||||||
Principal | 190,198 | $ 190,198 | ||||||||
Loans receivables maturity date | Jun. 1, 2016 | |||||||||
Loans receivable extended maturity date | Oct. 1, 2021 | |||||||||
Loans, description | As of September 30, 2021, the loan was 90 days delinquent and was designated as impaired and in non-accrual status. | |||||||||
Financial Asset, Equal to or Greater than 90 Days Past Due | ||||||||||
Loans (Details) [Line Items] | ||||||||||
Number of loans | MortgageLoan | 4 | 5 | ||||||||
Number of loans | MortgageLoan | 4 | 5 | ||||||||
Financing receivable, recorded investment, 90 days past due and still accruing | 1,588,000 | $ 1,588,000 | $ 4,703,296 | |||||||
Five Year Term or Less [Member] | ||||||||||
Loans (Details) [Line Items] | ||||||||||
Loans Receivable, Percent of Aggregate Principal | 97.00% | |||||||||
Mortgage Loans On Real Estate Number Of Loans | MortgageLoan | 49 | |||||||||
Interest Only [Member] | ||||||||||
Loans (Details) [Line Items] | ||||||||||
Loans Receivable, Percent of Aggregate Principal | 32.00% | |||||||||
Largest Loan [Member] | ||||||||||
Loans (Details) [Line Items] | ||||||||||
Loans Receivable, Yield of Loan Acquired | 8.25% | |||||||||
Loans Receivable Maturity Date | Oct. 1, 2021 | |||||||||
Construction Loans [Member] | ||||||||||
Loans (Details) [Line Items] | ||||||||||
Loans outstanding | 0 | $ 0 | ||||||||
Construction Or Rehabilitation Loans [Member] | ||||||||||
Loans (Details) [Line Items] | ||||||||||
Loans - principal (in Dollars) | $ 0 | $ 0 | ||||||||
Minimum [Member] | ||||||||||
Loans (Details) [Line Items] | ||||||||||
Loans Receivable, Remaining Term | 5 years |
Loans - Secured Loan Principal
Loans - Secured Loan Principal Transactions (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2021 | Sep. 30, 2021 | |
Receivables [Abstract] | ||
Principal, beginning of period | $ 79,876,199 | $ 82,274,807 |
Loans funded | 16,443,500 | 34,824,300 |
Principal collected | (22,780,339) | (42,683,651) |
Loans transferred from related mortgage fund | 4,671,760 | |
Loans transferred to related mortgage funds | 0 | (2,559,588) |
Loans sold to non-affiliate | 0 | (2,988,268) |
Principal, September 30 | $ 73,539,360 | $ 73,539,360 |
Loans - Secured Loans Character
Loans - Secured Loans Characteristics (Details) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021USD ($)MortgageLoanCountry | Dec. 31, 2020USD ($)CountryMortgageLoan | Jun. 30, 2021USD ($) | |
Secured Loan Transactions [Line Items] | |||
Number of secured loans | MortgageLoan | 54 | 82 | |
Loans - principal (in Dollars) | $ 73,539,360 | $ 82,274,807 | $ 79,876,199 |
Average secured loan - principal (in Dollars) | $ 1,361,840 | $ 1,003,351 | |
Average principal as percent of total principal | 1.90% | 1.20% | |
Average principal as percent of members’ capital, net | 1.80% | 1.30% | |
Average principal as percent of total assets | 1.80% | 1.20% | |
Largest secured loan - principal (in Dollars) | $ 6,735,000 | $ 6,735,000 | |
Largest principal as percent of total principal | 9.20% | 8.20% | |
Largest principal as percent of members’ capital, net | 8.70% | 8.50% | |
Largest principal as percent of total assets | 9.00% | 7.90% | |
Smallest secured loan - principal (in Dollars) | $ 53,180 | $ 104,378 | |
Smallest principal as percent of total principal | 0.10% | 0.10% | |
Smallest principal as percent of members’ capital, net | 0.10% | 0.10% | |
Smallest principal as percent of total assets | 0.10% | 0.10% | |
Number of California counties where security is located | Country | 12 | 14 | |
Largest percentage of principal in one California county | 36.20% | 28.20% | |
Reimbursement as a percentage of member's original purchase price | MortgageLoan | 54 | 82 | |
Prepaid interest | $ 804,164 | ||
Prepaid Interest | |||
Secured Loan Transactions [Line Items] | |||
Number of secured loans | MortgageLoan | 3 | ||
Reimbursement as a percentage of member's original purchase price | MortgageLoan | 3 | ||
Minimum [Member] | |||
Secured Loan Transactions [Line Items] | |||
Secured loans - interest rate (fixed) | 6.80% | 6.80% | |
Maximum [Member] | |||
Secured Loan Transactions [Line Items] | |||
Secured loans - interest rate (fixed) | 10.50% | 10.50% |
Loans - Secured Loans by Lien P
Loans - Secured Loans by Lien Position in the Collateral (Details) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021USD ($)MortgageLoan | Dec. 31, 2020USD ($)MortgageLoan | Jun. 30, 2021USD ($) | ||
Loans (Details) - Secured Loans by Lien Position in the Collateral [Line Items] | ||||
Number of secured loans | MortgageLoan | 54 | 82 | ||
Loans - principal (in Dollars) | $ 73,539,360 | $ 82,274,807 | $ 79,876,199 | |
Liens due other lenders at loan closing | 32,289,086 | 45,206,740 | ||
Total debt | 105,828,446 | 127,481,547 | ||
Appraised property value at loan closing | $ 206,880,000 | $ 251,970,000 | ||
Percent of total debt to appraised values (LTV) at loan closing | [1] | 55.20% | 55.60% | |
Loans - percent | 100.00% | 100.00% | ||
First Trust Deeds [Member] | ||||
Loans (Details) - Secured Loans by Lien Position in the Collateral [Line Items] | ||||
Number of secured loans | MortgageLoan | 36 | 56 | ||
Loans - principal (in Dollars) | $ 61,040,293 | $ 61,066,097 | ||
Loans - percent | 83.00% | 74.00% | ||
Second Trust Deeds [Member] | ||||
Loans (Details) - Secured Loans by Lien Position in the Collateral [Line Items] | ||||
Number of secured loans | MortgageLoan | 18 | 26 | ||
Loans - principal (in Dollars) | $ 12,499,067 | $ 21,208,710 | ||
Loans - percent | 17.00% | 26.00% | ||
[1] | Based on appraised values and liens due other lenders at loan closing. The weighted-average loan-to-value (LTV) computation above does not take into account subsequent increases or decreases in property values following the loan closing nor does it include decreases or increases on senior liens to other lenders. |
Loans - Secured Loans by Proper
Loans - Secured Loans by Property Type (Details) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021USD ($)MortgageLoan | Dec. 31, 2020USD ($)MortgageLoan | Jun. 30, 2021USD ($) | ||
Loans (Details) - Secured Loans by Property Type [Line Items] | ||||
Number of secured loans | MortgageLoan | 54 | 82 | ||
Loans - principal (in Dollars) | $ | $ 73,539,360 | $ 82,274,807 | $ 79,876,199 | |
Loans - percent | 100.00% | 100.00% | ||
Single Family [Member] | ||||
Loans (Details) - Secured Loans by Property Type [Line Items] | ||||
Number of secured loans | MortgageLoan | [1] | 24 | 47 | |
Loans - principal (in Dollars) | $ | [1] | $ 21,799,270 | $ 30,297,525 | |
Loans - percent | [1] | 30.00% | 37.00% | |
Multifamily [Member] | ||||
Loans (Details) - Secured Loans by Property Type [Line Items] | ||||
Number of secured loans | MortgageLoan | 7 | 8 | ||
Loans - principal (in Dollars) | $ | $ 4,693,617 | $ 8,285,157 | ||
Loans - percent | 6.00% | 10.00% | ||
Commercial [Member] | ||||
Loans (Details) - Secured Loans by Property Type [Line Items] | ||||
Number of secured loans | MortgageLoan | 22 | 27 | ||
Loans - principal (in Dollars) | $ | $ 45,546,473 | $ 43,692,125 | ||
Loans - percent | 62.00% | 53.00% | ||
Land [Member] | ||||
Loans (Details) - Secured Loans by Property Type [Line Items] | ||||
Number of secured loans | MortgageLoan | 1 | |||
Loans - principal (in Dollars) | $ | $ 1,500,000 | |||
Loans - percent | 2.00% | |||
[1] | Single family property type as of September 30, 2021 consists of 6 loans with principal of $ 4,432,988 that are owner occupied and 18 loans with principal of $ 17,366,282 that are non-owner occupied. At December 31, 2020, single family property type consisted of 8 loans with principal of $ 5,565,052 that are owner occupied and 39 loans with principal of $ 24,732,473 that are non-owner occupied. |
Loans - Secured Loans by Prop_2
Loans - Secured Loans by Property Type (Parenthetical) (Details) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021USD ($)MortgageLoan | Dec. 31, 2020USD ($)MortgageLoan | Jun. 30, 2021USD ($) | |
Loans (Details) - Secured Loans by Property Type [Line Items] | |||
Number of secured loans | MortgageLoan | 54 | 82 | |
Principal | $ | $ 73,539,360 | $ 82,274,807 | $ 79,876,199 |
Single Family Property-Owner Occupied [Member] | |||
Loans (Details) - Secured Loans by Property Type [Line Items] | |||
Number of secured loans | MortgageLoan | 6 | 8 | |
Principal | $ | $ 4,432,988 | $ 5,565,052 | |
Single Family Property-NonOwner Occupied [Member] | |||
Loans (Details) - Secured Loans by Property Type [Line Items] | |||
Number of secured loans | MortgageLoan | 18 | 39 | |
Principal | $ | $ 17,366,282 | $ 24,732,473 |
Loans - Secured Loans Distribut
Loans - Secured Loans Distributed Within California (Details) - USD ($) | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | |
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | $ 73,539,360 | $ 79,876,199 | $ 82,274,807 | |
Loans - percent | 100.00% | 100.00% | ||
San Francisco Bay Area [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | [1] | $ 51,401,342 | $ 51,252,985 | |
Loans - percent | [1] | 69.90% | 62.30% | |
Santa Clara [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | [1] | $ 26,652,130 | $ 23,205,654 | |
Loans - percent | [1] | 36.20% | 28.20% | |
San Francisco [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | [1] | $ 14,180,433 | $ 11,339,546 | |
Loans - percent | [1] | 19.30% | 13.80% | |
San Mateo [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | [1] | $ 5,640,797 | $ 6,878,086 | |
Loans - percent | [1] | 7.70% | 8.40% | |
Alameda [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | [1] | $ 4,234,940 | $ 6,790,814 | |
Loans - percent | [1] | 5.80% | 8.20% | |
Contra Costa [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | [1] | $ 693,042 | $ 1,094,189 | |
Loans - percent | [1] | 0.90% | 1.30% | |
Marin [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | [1] | $ 1,944,696 | ||
Loans - percent | [1] | 2.40% | ||
Other Northern California [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | $ 1,958,011 | $ 1,619,215 | ||
Loans - percent | 2.70% | 2.00% | ||
Placer [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | $ 1,500,000 | |||
Loans - percent | 2.00% | 0.00% | ||
Monterey [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | $ 1,110,000 | |||
Loans - percent | 0.00% | 1.40% | ||
Tehama [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | $ 404,831 | $ 404,837 | ||
Loans - percent | 0.60% | 0.50% | ||
Sacramento [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | $ 53,180 | $ 104,378 | ||
Loans - percent | 0.10% | 0.10% | ||
Northern California [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | $ 53,359,353 | $ 52,872,200 | ||
Loans - percent | 72.60% | 64.30% | ||
Los Angeles & Coastal [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | $ 18,461,007 | $ 27,683,607 | ||
Loans - percent | 25.10% | 33.60% | ||
Los Angeles [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | $ 3,310,492 | $ 11,775,334 | ||
Loans - percent | 4.50% | 14.30% | ||
San Diego [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | $ 6,694,439 | $ 10,186,152 | ||
Loans - percent | 9.10% | 12.40% | ||
Orange [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | $ 8,456,076 | $ 5,431,677 | ||
Loans - percent | 11.50% | 6.60% | ||
Santa Barbara [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | $ 290,444 | |||
Loans - percent | 0.30% | |||
Other Southern California [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | $ 73,539,360 | $ 82,274,807 | ||
Loans - percent | 100.00% | |||
San Bernardino [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | $ 1,719,000 | $ 1,719,000 | ||
Loans - percent | 2.30% | 2.10% | ||
Southern California [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | $ 20,180,007 | $ 29,402,607 | ||
Loans - percent | 27.40% | 35.70% | ||
[1] | Includes Silicon Valley |
Loans - Secured Loans Scheduled
Loans - Secured Loans Scheduled Maturities (Details) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021USD ($)MortgageLoan | Dec. 31, 2020USD ($)MortgageLoan | Jun. 30, 2021USD ($) | ||
Secured Loans Scheduled Maturities [Abstract] | ||||
2021, Loans | MortgageLoan | [1] | 7 | ||
2022, Loans | MortgageLoan | 24 | |||
2023, Loans | MortgageLoan | 11 | |||
2024, Loans | MortgageLoan | 3 | |||
2025, Loans | MortgageLoan | 5 | |||
Thereafter, Loans | MortgageLoan | 1 | |||
Total scheduled maturities, Loans | MortgageLoan | 51 | |||
Matured as of September 30, 2021, Loans | MortgageLoan | 3 | |||
Number of secured loans | MortgageLoan | 54 | 82 | ||
2021, Principal | $ | [1] | $ 10,777,995 | ||
2022, Principal | $ | 30,344,280 | |||
2023, Principal | $ | 21,585,948 | |||
2024, Principal | $ | 5,320,650 | |||
2025, Principal | $ | 3,743,816 | |||
Thereafter, Principal | $ | 237,605 | |||
Total scheduled maturities, Principal | $ | 72,010,294 | |||
Matured as of September 30, 2021, Principal | $ | 1,529,066 | |||
Total principal, secured loans | $ | $ 73,539,360 | $ 82,274,807 | $ 79,876,199 | |
2021, Percent | [1] | 15.00% | ||
2022, Percent | 41.00% | |||
2023, Percent | 29.00% | |||
2024, Percent | 7.00% | |||
2025, Percent | 5.00% | |||
Thereafter, Percent | 1.00% | |||
Total scheduled maturities, Percent | 98.00% | |||
Matured as of September 30, 2021, Percent | 2.00% | |||
Total principal, secured loans, Percent | 100.00% | 100.00% | ||
[1] | Loans scheduled to mature in 2021 after September 30 . |
Loans - Secured Loans Schedul_2
Loans - Secured Loans Scheduled Maturities (Parenthetical) (Details) | 9 Months Ended | ||
Sep. 30, 2021USD ($)Loan | Jun. 30, 2021USD ($) | Dec. 31, 2020USD ($) | |
Loans (Details) - Secured Loans by Property Type [Line Items] | |||
Number of loans sold | Loan | 5 | ||
Principal | $ 73,539,360 | $ 79,876,199 | $ 82,274,807 |
San Bernardino [Member] | |||
Loans (Details) - Secured Loans by Property Type [Line Items] | |||
Principal | $ 1,719,000 | $ 1,719,000 |
Loans - Past Due Financing Rece
Loans - Past Due Financing Receivables (Details) | Sep. 30, 2021Loan | Sep. 30, 2021USD ($) | Sep. 30, 2021MortgageLoan | Jan. 31, 2021USD ($) | Dec. 31, 2020Loan | Dec. 31, 2020USD ($) | Dec. 31, 2020MortgageLoan |
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||||||
Number of loans | 54 | 0 | 82 | 0 | |||
Principal | $ 73,539,360 | $ 82,274,807 | |||||
Past Due 30-89 Days [Member] | |||||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||||||
Number of loans | Loan | 4 | 1 | |||||
Principal | 3,113,520 | 190,195 | |||||
Financing Receivables Ninety To One Hundred And Seventy Nine Days Past Due | |||||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||||||
Number of loans | Loan | 5 | 5 | |||||
Principal | 2,182,637 | 4,756,811 | |||||
Past Due 180 Or More Days [Member] | |||||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||||||
Number of loans | 2 | 3 | 1 | ||||
Principal | 1,786,057 | $ 137,000 | 3,286,170 | ||||
Current [Member] | |||||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||||||
Number of loans | Loan | 43 | 73 | |||||
Principal | 66,457,146 | 74,041,631 | |||||
Total Payments Past Due | |||||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||||||
Number of loans | Loan | 11 | 9 | |||||
Principal | $ 7,082,214 | $ 8,233,176 |
Loans - Schedule of Payments in
Loans - Schedule of Payments in Arrears Past Due Financing Receivables (Details) | Sep. 30, 2021USD ($)Loan | Dec. 31, 2020USD ($)Loan | ||
Loans Details Secured Loans By Property Type Of Collateral [Line Items] | ||||
Monthly payments, interest | $ 126,000 | $ 20,800 | ||
30-89 days [Member] | ||||
Loans Details Secured Loans By Property Type Of Collateral [Line Items] | ||||
Number of loans | Loan | 1 | |||
Number of loans | Loan | 3 | 1 | ||
Past maturity, principal | $ 931,458 | |||
Monthlypayments | 808 | $ 378 | ||
Monthly payments, interest | 17,331 | [1] | 1,509 | [2] |
Total payments | $ 949,597 | $ 1,887 | ||
Past Due 90-179 Days [Member] | ||||
Loans Details Secured Loans By Property Type Of Collateral [Line Items] | ||||
Number of loans | Loan | 2 | 1 | ||
Number of loans | Loan | 3 | 4 | ||
Past maturity, principal | $ 597,608 | $ 376,613 | ||
Monthlypayments | 858 | 854 | ||
Monthly payments, interest | 59,879 | [1] | 146,270 | [2] |
Total payments | $ 658,345 | $ 523,737 | ||
Past Due 180 Or More Days [Member] | ||||
Loans Details Secured Loans By Property Type Of Collateral [Line Items] | ||||
Number of loans | Loan | 1 | 1 | ||
Number of loans | Loan | 1 | 1 | ||
Past maturity, principal | $ 1,200,000 | $ 1,200,000 | ||
Monthlypayments | 2,823 | 29 | ||
Past maturity, interest | 199,500 | [1] | 105,000 | [2] |
Monthly payments, interest | 24,907 | [1] | 108,034 | [2] |
Total payments | $ 1,427,230 | $ 1,413,063 | ||
Total Payments Past Due | ||||
Loans Details Secured Loans By Property Type Of Collateral [Line Items] | ||||
Number of loans | Loan | 4 | [3] | 2 | [4] |
Number of loans | Loan | 7 | [3] | 6 | [4] |
Past maturity, principal | $ 2,729,066 | [3] | $ 1,576,613 | [4] |
Monthlypayments | 4,489 | [3] | 1,261 | [4] |
Past maturity, interest | 199,500 | [1],[3] | 105,000 | [2],[4] |
Monthly payments, interest | 102,117 | [1],[3] | 255,813 | [2],[4] |
Total payments | $ 3,035,172 | [3] | $ 1,938,687 | [4] |
[1] | Interest includes foregone interest of approximately $ 126,000 on non-accrual loans past maturity and approximately $ 38,000 for monthly payments in arrears. September 2021 interest is due October 1, 2021 and is not included in the payments in arrears at September 30, 2021. | |||
[2] | Interest includes foregone interest of $ 42,000 on non-accrual loans past maturity and approximately $ 20,800 for monthly payments in arrears. December 2020 interest is due January 1, 2021 and is not included in the payments in arrears at December 31, 2020. | |||
[3] | In October 2021, two loans included in the table above as 30-89 days past due on monthly payments, and one loan included in the table above as 90-179 days past due on monthly payments, were brought current. The remaining two loans included in the table above as 90-179 days past due on monthly payments each made one payment during October. | |||
[4] | One loan with principal of approximately $ 137,000 , which was 180 or more days past due, paid in full in January 2021 and so was not designated as non-performing at December 31, 2020, and is not included in the table above. |
Loans - Schedule of Payments _2
Loans - Schedule of Payments in Arrears Past Due Financing Receivables (parenthetical) (Details) | 1 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Oct. 31, 2021Loan | Sep. 30, 2021MortgageLoan | Dec. 31, 2020MortgageLoan | Sep. 30, 2021Loan | Sep. 30, 2021USD ($) | Jan. 31, 2021USD ($) | Dec. 31, 2020Loan | Dec. 31, 2020USD ($) | |||
Loans (Details) [Line Items] | ||||||||||
Monthly payments, interest | $ 126,000 | $ 20,800 | ||||||||
Forgone interest | 42,000 | |||||||||
Interest, Due Date | Jan. 1, 2021 | |||||||||
Reimbursement as a percentage of member's original purchase price | MortgageLoan | 54 | 82 | ||||||||
Number of loans | 0 | 0 | 54 | 82 | ||||||
Principal | 73,539,360 | 82,274,807 | ||||||||
Past Due 180 Or More Days [Member] | ||||||||||
Loans (Details) [Line Items] | ||||||||||
Monthly payments, interest | 24,907 | [1] | 108,034 | [2] | ||||||
Forgone interest | 38,000 | |||||||||
Interest, Due Date | Oct. 1, 2021 | |||||||||
Number of loans | 1 | 2 | 3 | |||||||
Principal | 1,786,057 | $ 137,000 | 3,286,170 | |||||||
30-89 days [Member] | ||||||||||
Loans (Details) [Line Items] | ||||||||||
Monthly payments, interest | 17,331 | [1] | 1,509 | [2] | ||||||
Past Due 90-179 Days [Member] | ||||||||||
Loans (Details) [Line Items] | ||||||||||
Monthly payments, interest | 59,879 | [1] | 146,270 | [2] | ||||||
Current [Member] | ||||||||||
Loans (Details) [Line Items] | ||||||||||
Number of loans | Loan | 43 | 73 | ||||||||
Principal | $ 66,457,146 | $ 74,041,631 | ||||||||
Subsequent Event | 30-89 days [Member] | ||||||||||
Loans (Details) [Line Items] | ||||||||||
Reimbursement as a percentage of member's original purchase price | Loan | 2 | |||||||||
Subsequent Event | Past Due 90-179 Days [Member] | ||||||||||
Loans (Details) [Line Items] | ||||||||||
Reimbursement as a percentage of member's original purchase price | Loan | 2 | |||||||||
Subsequent Event | Current [Member] | ||||||||||
Loans (Details) [Line Items] | ||||||||||
Reimbursement as a percentage of member's original purchase price | Loan | 1 | |||||||||
[1] | Interest includes foregone interest of approximately $ 126,000 on non-accrual loans past maturity and approximately $ 38,000 for monthly payments in arrears. September 2021 interest is due October 1, 2021 and is not included in the payments in arrears at September 30, 2021. | |||||||||
[2] | Interest includes foregone interest of $ 42,000 on non-accrual loans past maturity and approximately $ 20,800 for monthly payments in arrears. December 2020 interest is due January 1, 2021 and is not included in the payments in arrears at December 31, 2020. |
Loans - Secured Loans in Non-Ac
Loans - Secured Loans in Non-Accrual Status (Details) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021USD ($)MortgageLoan | Dec. 31, 2020USD ($)MortgageLoan | Jun. 30, 2021USD ($) | |
Loans Details Secured Loans In Nonaccrual Status [Line Items] | |||
Number of secured loans | MortgageLoan | 54 | 82 | |
Loans - principal (in Dollars) | $ 73,539,360 | $ 82,274,807 | $ 79,876,199 |
Accrued interest | $ 539,109 | 683,975 | |
Forgone interest | $ 42,000 | ||
Non-Accrual Status [Member] | |||
Loans Details Secured Loans In Nonaccrual Status [Line Items] | |||
Number of secured loans | MortgageLoan | 3 | 3 | |
Loans - principal (in Dollars) | $ 2,483,927 | $ 3,531,064 | |
Accrued interest | 93,452 | 181,060 | |
Forgone interest | 182,718 | 62,821 | |
Principal [Member] | Non-Accrual Status [Member] | |||
Loans Details Secured Loans In Nonaccrual Status [Line Items] | |||
Loans - principal (in Dollars) | 2,380,198 | 3,339,684 | |
Advances [Member] | Non-Accrual Status [Member] | |||
Loans Details Secured Loans In Nonaccrual Status [Line Items] | |||
Loans - principal (in Dollars) | $ 10,277 | $ 10,320 |
Loans - Activity in the Allowan
Loans - Activity in the Allowance for Loan Losses (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Receivables [Abstract] | ||
Balance, beginning of period | $ 55,000 | $ 87,000 |
Recovery for loan losses | 0 | (75) |
Charge-offs | 0 | (31,925) |
Balance, end of period | $ 55,000 | $ 55,000 |
Loans - Schedule of Impaired Lo
Loans - Schedule of Impaired Loans/Allowance for Loan Losses (Details) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021USD ($)Loan | Dec. 31, 2020USD ($)Loan | ||
Secured Loans Designated as Impaired Loans [Abstract] | |||
Number of loans | Loan | [1] | 6 | 6 |
Principal | $ 3,563,862 | $ 7,529,684 | |
Recorded investment | [2] | 3,701,067 | 7,895,605 |
Impaired loans without allowance | $ 3,701,067 | $ 7,895,605 | |
Weighted average LTV at origination | 61.70% | 52.50% | |
[1] | One loan, with principal of approximately $ 405,000 , was more than 90 days delinquent and was not designated impaired at September 30, 2021. The loan was brought current in October 2021, and so is not included in the table above. | ||
[2] | Recorded investment is the sum of the principal, advances, and accrued interest receivable for financial reporting purposes. |
Loans - Schedule of Impaired _2
Loans - Schedule of Impaired Loans/Allowance for Loan Losses (Parenthetical) (Details) - Financing Receivables Greater than 90 Days | Sep. 30, 2021USD ($)Loan |
Loans Details [Line Items] | |
Number of loan | Loan | 1 |
Principal | $ | $ 405,000 |
Loans - Impaired Loans - Averag
Loans - Impaired Loans - Average Balances and Interest Income (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Impaired Loans - Average Balances and Interest Income [Abstract] | ||
Average recorded investment | $ 5,798,336 | $ 6,307,655 |
Interest income recognized | 104,274 | 704,506 |
Interest income received in cash | $ 100,836 | $ 360,753 |
Line of Credit - Schedule of Li
Line of Credit - Schedule of Line of Credit Facilities Activity (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Debt Disclosure [Abstract] | ||
Balance, January 1, | $ 10,000,000 | |
Draws | 8,255,000 | $ 19,250,000 |
Repayments | (17,155,000) | (9,250,000) |
Balance, September 30, | 1,100,000 | 10,000,000 |
Line of credit - average daily balance | $ 8,624,000 | $ 6,236,000 |
Line of Credit - Additional Inf
Line of Credit - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Short Term Debt [Line Items] | |||||
Line of credit facility, maximum amount outstanding during period | $ 10,000,000 | $ 10,000,000 | |||
Maturity date | Mar. 31, 2022 | ||||
Line of credit facility, conversion of outstanding principal balance to term loan of fee | 0.25% | ||||
Line of credit extended maturity date | Mar. 31, 2023 | ||||
Line of credit facility, description | The company has the option at the maturity date to convert the then outstanding principal balance on the line of credit to a one-year term loan - for a fee of one-quarter of one percent (0.25%) – thereby extending the maturity date to March 2023. | ||||
Pledged loans, principal amount | 18,110,000 | $ 18,110,000 | $ 20,068,000 | ||
Amortization of debt issuance costs | 13,700 | $ 13,700 | $ 41,104 | $ 27,320 | |
Term loan, duration | 2 years | ||||
Maximum [Member] | |||||
Short Term Debt [Line Items] | |||||
Pledged loans, advance amount | $ 10,000,000 | $ 10,000,000 | |||
Revolving Credit Facility [Member] | |||||
Short Term Debt [Line Items] | |||||
Line of credit facility, description | Interest on the outstanding principal is payable monthly and accrues at the per annum rate of the greater of (i) five percent (5%) or (ii) the sum of the one-month LIBOR rate plus three and one-quarter percent (3.25%). | ||||
Line of credit facility, interest rate | 5.00% | 5.00% | |||
Compensating balance, minimum | $ 1,000,000 | $ 1,000,000 | |||
Interest on non maintenance of compensating balance | 0.25% | ||||
Line of credit facility, average rate | 50.00% | ||||
Line of credit facility, unused line of fee | 0.50% | ||||
Debt issuance costs | 110,000 | $ 110,000 | |||
Line Of Credit [Member] | Minimum [Member] | |||||
Short Term Debt [Line Items] | |||||
Minimum tangible net worth | $ 50,000,000 | $ 50,000,000 | |||
Debt service coverage ratio | 1 | ||||
Line Of Credit [Member] | Maximum [Member] | |||||
Short Term Debt [Line Items] | |||||
Debt service coverage ratio | 2 | ||||
Line Of Credit [Member] | Maximum [Member] | Financial Asset, 61 Days Past Due [Member] | |||||
Short Term Debt [Line Items] | |||||
Loan payment, quartely | 10.00% | ||||
London Interbank Offered Rate (LIBOR) [Member] | Revolving Credit Facility [Member] | |||||
Short Term Debt [Line Items] | |||||
Line of credit facility, interest rate | 3.25% | 3.25% |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) | Oct. 01, 2021USD ($)Loan | Sep. 30, 2021Loan | Dec. 31, 2020Loan |
Subsequent Event [Line Items] | |||
Non performing number of loans | 11 | 8 | |
Subsequent Event Description | The manager evaluated events occurring subsequent to September 30, 2021 and determined that there were no other events or transactions occurring during this reporting period that require recognition or disclosure in the unaudited financial statements | ||
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Number of loans offered for sale. | 2 | ||
Debt offered for sale face amount | $ | $ 488,000 |