Document and Entity Information
Document and Entity Information - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 28, 2023 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | REDWOOD MORTGAGE INVESTORS IX | ||
Entity Central Index Key | 0001448038 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Common Stock, Shares Outstanding | 72,300,000 | ||
Document Annual 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 | ||
Entity Public Float | $ 0 | ||
Auditor Firm ID | 243 | ||
Auditor Name | BDO USA, LLP | ||
Auditor Location | San Francisco, California |
Balance Sheets
Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
ASSETS | ||
Cash, in banks | $ 5,055 | $ 1,033 |
Loan payments in trust | 94 | 67 |
Loans | ||
Principal | 72,533 | 81,097 |
Advances | 19 | 17 |
Accrued interest | 490 | 529 |
Prepaid interest | (254) | (643) |
Loan balances secured by deeds of trust | 72,788 | 81,000 |
Allowance for loan losses | (55) | (55) |
Loan balances secured by deeds of trust, net | 72,733 | 80,945 |
Debt issuance costs, net | 36 | 14 |
Prepaid expenses | 2 | 25 |
Total assets | 77,920 | 82,084 |
LIABILITIES AND MEMBERS’ CAPITAL | ||
Accounts payable and accrued liabilities | 109 | 75 |
Payable to the manager and related parties (Note 3) | 254 | 101 |
Line of credit | 9,900 | 8,480 |
Total liabilities | 10,263 | 8,656 |
Commitments and contingencies (Note 6) | ||
Members’ capital, net | 70,767 | 76,816 |
Receivable from manager (formation loan) | (3,110) | (3,388) |
Members’ capital, net of formation loan | 67,657 | 73,428 |
Total liabilities and members’ capital | $ 77,920 | $ 82,084 |
Statements of Income
Statements of Income - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue | ||
Interest income | $ 6,526 | $ 6,943 |
Interest expense | (520) | (456) |
Net interest income | 6,006 | 6,487 |
Late fees | 40 | 62 |
Gain on sale, loans | 40 | 0 |
Total revenue, net | 6,086 | 6,549 |
Provision for loan losses | 0 | 0 |
Operations expense | ||
Mortgage servicing fees to Redwood Mortgage Corp. | 193 | 201 |
Asset management fees to Redwood Mortgage Corp. | 552 | 564 |
Costs from Redwood Mortgage Corp., net (Note 3) | 348 | 220 |
Professional services | 897 | 693 |
Other | 38 | 65 |
Total operations expense | 2,028 | 1,743 |
Net income | 4,058 | 4,806 |
Members (99%) | 4,018 | 4,757 |
Manager (1%) | $ 40 | $ 49 |
Statements of Income (Parenthet
Statements of Income (Parenthetical) - Redwood Mortgage Investors IX [Member] | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Members investment | 99% | 99% |
Ownership interest held by the manager | 1% | 1% |
Statements of Changes in Member
Statements of Changes in Members' Capital - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
Beginning balance | $ 73,428 | ||
Net income | 4,058 | $ 4,806 | |
Ending balance | 67,657 | 73,428 | |
RMC [Member] | |||
Early withdrawal penalties | 3 | 35 | |
Capital Members [Member] | |||
Beginning balance | 78,192 | 80,801 | |
Net income | 4,018 | 4,757 | |
Organization and offering expenses allocated | (282) | (303) | |
Early withdrawal penalties | 0 | ||
Ending balance | 71,730 | 78,192 | |
Capital Members [Member] | RMC [Member] | |||
Organization and offering expenses repaid by RMC | 0 | 0 | |
Capital Members [Member] | Earnings Distributed To Members [Member] | |||
Partners capital accounts | (4,122) | (4,418) | |
Capital Members [Member] | Earnings Distributed Used In DRIP [Member] | |||
Partners capital accounts | 1,994 | 2,216 | |
Capital Members [Member] | Member's Redemptions [Member] | |||
Partners capital accounts | (8,070) | (4,861) | |
Managers Capital Net [Member] | |||
Beginning balance | 82 | 182 | |
Net income | 40 | 49 | |
Organization and offering expenses allocated | 0 | 0 | |
Early withdrawal penalties | 0 | ||
Ending balance | 82 | 82 | |
Managers Capital Net [Member] | RMC [Member] | |||
Organization and offering expenses repaid by RMC | 0 | 0 | |
Managers Capital Net [Member] | Earnings Distributed To Members [Member] | |||
Partners capital accounts | (40) | (149) | |
Managers Capital Net [Member] | Earnings Distributed Used In DRIP [Member] | |||
Partners capital accounts | 0 | 0 | |
Managers Capital Net [Member] | Member's Redemptions [Member] | |||
Partners capital accounts | 0 | 0 | |
Unallocated Organization and Offering Expenses [Member] | |||
Beginning balance | (1,458) | (1,858) | |
Net income | 0 | 0 | |
Organization and offering expenses allocated | 282 | 303 | |
Organization and offering expenses repaid by RMC | [1] | (131) | (81) |
Early withdrawal penalties | [2] | 0 | 16 |
Ending balance | (1,045) | (1,458) | |
Unallocated Organization and Offering Expenses [Member] | RMC [Member] | |||
Organization and offering expenses repaid by RMC | 131 | 81 | |
Unallocated Organization and Offering Expenses [Member] | Earnings Distributed To Members [Member] | |||
Partners capital accounts | 0 | 0 | |
Unallocated Organization and Offering Expenses [Member] | Earnings Distributed Used In DRIP [Member] | |||
Partners capital accounts | 0 | 0 | |
Unallocated Organization and Offering Expenses [Member] | Member's Redemptions [Member] | |||
Partners capital accounts | 0 | 0 | |
Member And Managers Capital Net [Member] | |||
Beginning balance | 76,816 | 79,125 | |
Net income | 4,058 | 4,806 | |
Organization and offering expenses allocated | 0 | 0 | |
Early withdrawal penalties | 16 | ||
Ending balance | 70,767 | 76,816 | |
Member And Managers Capital Net [Member] | RMC [Member] | |||
Organization and offering expenses repaid by RMC | 131 | 81 | |
Member And Managers Capital Net [Member] | Earnings Distributed To Members [Member] | |||
Partners capital accounts | (4,162) | (4,567) | |
Member And Managers Capital Net [Member] | Earnings Distributed Used In DRIP [Member] | |||
Partners capital accounts | 1,994 | 2,216 | |
Member And Managers Capital Net [Member] | Member's Redemptions [Member] | |||
Partners capital accounts | $ (8,070) | $ (4,861) | |
[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 quarterly allocations. RMC estimated its future obligation to repay unallocated O&O expenses on scheduled redemptions as of December 31, 2022 , to be approximately $ 23 thousand. Beginning in 2022, RMC discontinued the specific allocation of early withdrawal penalties it received to the formation loan and to the amount owed for unallocated O&O expenses on redeeming-members’ accounts. Prior to 2022, the O&O expenses component of early withdrawal penalties were applied as a reduction to O&O expenses to be repaid by RMC to members’ capital on scheduled redemptions. The amounts credited were determined by the ratio between the amount of the formation loan and the amount of offering costs incurred by the company. The change in 2022 has no net effect on the amounts paid by RMC to RMI IX. |
Statements of Cash Flows
Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Operations | ||
Interest income received | $ 6,135 | $ 7,741 |
Interest expense paid | (465) | (400) |
Late fees and other loan income (expense) | (33) | 162 |
Operations expense | (1,839) | (1,697) |
Total cash provided by operations | 3,798 | 5,806 |
Investing – loans | ||
Loans funded | (30,248) | (49,182) |
Principal collected | 36,351 | 48,972 |
Loans transferred from related mortgage fund | (1,939) | (4,672) |
Loans transferred to related mortgage funds | 0 | 2,560 |
Loans sold to non-affiliate | 4,530 | 3,464 |
Advances funded | (4) | (3) |
Promissory note funded to related party | (1,000) | 0 |
Promissory note repaid by related party | 1,000 | 0 |
Total cash provided by investing | 8,690 | 1,139 |
Distributions to members | ||
Distributions to members and manager | (10,235) | (7,177) |
Contributions by members, net | ||
Organization and offering expenses received, net | 131 | 81 |
Early withdrawal penalties | (3) | 0 |
Cash used in members' and manager's capital | (10,107) | (7,096) |
Line of credit | ||
Advances | 9,900 | 19,935 |
Repayments | (8,480) | (21,455) |
Debt issuance costs | (57) | 0 |
Cash provided by (used in) line of credit | 1,363 | (1,520) |
Formation loan collected | 278 | 405 |
Total cash used in financing | (8,466) | (8,211) |
Net increase (decrease) in cash | 4,022 | (1,266) |
Cash, beginning of period | 1,033 | 2,299 |
Cash, end of period | 5,055 | 1,033 |
Net income | 4,058 | 4,806 |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Gain on sale, loans | (40) | 0 |
Amortization of debt issuance costs | 35 | 55 |
Change in operating assets and liabilities | ||
Loan payments in trust | (73) | 100 |
Accrued interest | (3) | 155 |
Prepaid interest | (389) | 643 |
Prepaid expenses | 23 | (25) |
Accounts payable and accrued liabilities | 34 | (25) |
Payable to related parties | 153 | 97 |
Total adjustments | (260) | 1,000 |
Total cash provided by operations | 3,798 | 5,806 |
Earnings Distributed To Members [Member] | ||
Distributions to members | ||
Distributions to members and manager | (2,168) | (2,351) |
Member's Redemptions [Member] | ||
Distributions to members | ||
Distributions to members and manager | $ (8,067) | $ (4,826) |
Statements of Cash Flows (Paren
Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Non cash financing activity in early withdrawal penalties | $ 35 | |
Non-cash financing activity includes manager withdrawals | $ 30 | 149 |
Earnings Distributed To Members [Member] | ||
Earnings distributed used in DRIP | $ 2,000 | 2,200 |
Formation Loan [Member] | ||
Non cash financing activity in early withdrawal penalties | 19 | |
Unallocated Organization and Offering Expenses [Member] | ||
Non cash financing activity in early withdrawal penalties | $ 16 |
Organization and General
Organization and General | 12 Months Ended |
Dec. 31, 2022 | |
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. 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”), as amended by the Second Amendment to 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 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. Federal and state income taxes are the obligation of the members, other than the annual California franchise tax and the California LLC gross receipts tax. The tax basis in the net assets of the company differs from book basis by the amount of the allowance for loan losses. 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. The company’s business is neither dependent on any one, nor concentrated with a few, major borrowers, investors, or lenders. 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 organization and offering expenses (“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. Pursuant to the terms of the 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 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 million units ($ 15 million) 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 December 31, 2022, 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 $ 8.1 million. As of December 31, 2022 , the difference between earnings allocated to members’ capital accounts and net income available to members was approximately $ 298 thousand, and is expected to be offset by future earnings in excess of net distributions in 2023. 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 Operating Agreement includes a unit redemption program, whereby 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 one year 92 % of the purchase price or of the capital balance, whichever is less; after two years 94 %; after three 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 thousand 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. The manager also has the right, in its sole discretion, at any time, to reject any request for redemption, or to suspend or terminate the acceptance of new redemption requests without prior notice, or to terminate, suspend or amend the unit redemption program upon 30-day notice. Pursuant to 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; however, the manager may, but is not required to, waive this limitation if it deems it in the best interest of the company. In the event unit withdrawal requests exceed 5 % in any calendar year, and are held by the company, units will be redeemed in the order of priority provided in the Operating Agreement. The manager may, in its sole discretion, waive any applicable holding periods or penalties in the event of the death of a member or other exigent circumstances or if the manager believes such wavier is in the best interests of the company. Effective March 31, 2023, the manager intends to strictly adhere to the quarterly and annual members’ capital redemption limitations as described in the company’s Operating Agreement. The manager has no present intention to exercise its discretionary power to waive or modify the enforcement of the annual redemptions limitation in the foreseeable future. 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 terminate on December 31, 2038 unless: (i) the term is further extended by RMC with the affirmative consent of a majority interest of the members; or (ii) the company is earlier terminated pursuant to the Operating Agreement or by operation of law. The initial term of RMI IX was extended through December 31, 2038 by an affirmative ( 53 %) vote of the member units outstanding, following which RMC's board of directors approved the adoption of the Second Amendment, dated March 11, 2022, to the Ninth Amended and Restated Limited Liability Company Operating Agreement of RMI IX. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
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 involve a significant level of uncertainty and have had or are reasonably likely to have a material impact on the company’s financial condition or results of operations. Such estimates relate principally to the determination of the allowance for loan losses, including the valuation of non-performing secured loans (which itself requires determining the fair value of the collateral), and the valuation of real estate owned ( “ REO ” ), at acquisition and subsequently (RMI IX has not acquired REO since it commenced operations in 2009). 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 thousand. 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 arrears) 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”). 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 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 less estimated costs to sell. 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. Reclassifications A reclassification has been made in the prior year statement of cash flows to reclassify the presentation of formation loan collected from changes in members’ and manager’s capital to a separate line item within the financing section of the statement of cash flows. There was no change in total cash used in financing activities. Recently issued accounting pronouncements - Accounting and Financial Reporting for Expected Credit Losses Effective January 1, 2023, RMI IX adopted Accounting Standards Codification 326, Financial Instruments – Credit Losses (“ASC 326”). The current expected credit loss (“CECL”) methodology required by ASC 326 utilizes a lifetime expected credit loss measurement objective for the recognition of credit losses at the time the financial asset is originated or acquired. The expected credit losses are adjusted each period for changes in expected lifetime credit losses for loans. The CECL methodology replaces the multiple existing impairment methods in current GAAP, which generally require that a loss be incurred before it is recognized. The CECL estimate is forward-looking, and management is required to use not only historical trends and current conditions, but also forecasts about future economic conditions to determine the expected credit loss over the remaining life of RMI IX’s loans. Management has completed its evaluation and implementation of the adoption of the new standard and concluded that the change to CECL methodology from the incurred loss models presently in use did not result in a material impact to the reported results of operations or financial position upon adoption. |
Manager and Other Related Parti
Manager and Other Related Parties | 12 Months Ended |
Dec. 31, 2022 | |
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 2022 and 2021 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 approximately $ 797 thousand and $ 645 thousand in 2022 and 2021 , respectively. The reimbursement of costs from RMC waived was approximately $ 449 thousand and $ 425 thousand in 2022 and 2021, respectively. Total costs reimbursed to RMC by RMI IX were approximately $ 348 thousand and $ 220 thousand in 2022 and 2021, 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 waived was approximately $ 302 thousand and $ 492 thousand in 2022 and 2021, 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 $ 653 thousand and $ 928 thousand for 2022 and 2021, 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 approximately $ 5.6 million, of which approximately $ 3.1 million remains outstanding at December 31, 2022. Formation loan transactions for 2022 and 2021 are presented in the following table ($ in thousands). 2022 2021 Balance, January 1 $ 3,388 $ 3,812 Payments received from RMC ( 278 ) ( 405 ) Early withdrawal penalties applied — ( 19 ) Balance, December 31 $ 3,110 $ 3,388 In March 2022, the Operating Agreement was amended to extend the term for the repayment of the formation loan to December 2038 to coincide with the extended term of the company. In accordance with the amended Operating Agreement, the formation loan is repayable by RMC in annual installments of approximately $ 208 thousand which may be paid by RMC either in full on December 31st of each calendar year during the term of the company (each, an “Annual Payment Date”) or in four equal quarterly installments beginning on the Annual Payment Date and continuing thereafter on the last day of each calendar quarter in the following year. Any amount of the formation loan balance remaining unpaid on the last day of the company term, is payable in full on that date. 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. As such, the formation loan is presented as contra equity. Redemptions of members’ capital Redemptions of members’ capital for 2022 and 2021 are presented in the following table ($ in thousands). Redemptions 2022 2021 Without penalty $ 7,949 $ 3,983 With penalty 121 878 Total $ 8,070 $ 4,861 Early withdrawal penalties $ 3 $ 35 At December 31, 2022, scheduled redemptions of members' capital were approximately $ 1.2 million, all of which is scheduled for payment in 2023, subject to the limitations discussed in the following paragraphs. Pursuant to the Operating Agreement, unless waived by the manager, the company will not redeem in any calendar year more than five percent (5.0%) and in any calendar quarter one and one-quarter percent (1.25%) of the weighted average number of units outstanding in the twelve (12) month period immediately prior to the date of redemption. Aggregate redemption requests for the calendar quarters in 2022 exce eded the 1.25% limitation; however, the manager elected to waive the quarterly limitation rather than withhold the excess redemption amount and pay the unfulfilled redemption requests in future periods. Total redemptions in 2022 were $ 8.1 million, which exceeded the 5 % limitation of approximately $ 3.8 million. Total redemptions in 2021 were $ 4.8 million, which exceeded the annual redemption limit of $ 4.0 million. Effective March 31, 2023, the manager intends to strictly adhere to the quarterly and annual members’ capital redemption limitations as described in the company’s Operating Agreement. The manager has no present intention to exercise its discretionary power to waive or modify the enforcement of the annual redemptions limitation in the foreseeable future. Total redemption requests scheduled for March 31, 2023 approximate $ 1.9 million, which amount exceeds the quarterly limitation of $ 936 thousand. Accordingly, the redemption requests will be honored in the following order of priority: • first, to redemptions upon the death of a member, which total $ 85 thousand; and • next, to other redemption requests until all other requests for redemption have been met. All redemption requests shall be honored on a pro rata basis, based on the amount of redemption requests received in – and/or carried over from – the preceding quarter. The redemptions to be paid, net of the redemptions to be paid based on the death of a member, on March 31, 2023, will be approximately $ 851 thousand or forty-five percent (45%) of redemption requests scheduled. Redemption requests scheduled but not paid at March 31, 2023, are carried forward to subsequent quarters until paid. 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 40 calendar quarters or the quarter in which such units are redeemed. Unallocated O&O transactions for the years ended December 31, 2022 and 2021 are summarized in the following table ($ in thousands). 2022 2021 Balance, January 1 $ 1,458 $ 1,858 O&O expenses allocated ( 282 ) ( 303 ) O&O expenses paid by RMC (1) ( 131 ) ( 81 ) Early withdrawal penalties applied (2) — ( 16 ) Balance, December 31 $ 1,045 $ 1,458 (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 quarterly allocations. RMC estimated its future obligation to repay unallocated O&O expenses on scheduled redemptions as of December 31, 2022 , to be approximately $ 23 thousand. (2) Beginning in 2022, RMC discontinued the specific allocation of early withdrawal penalties it received to the formation loan and to the amount owed for unallocated O&O expenses on redeeming-members’ accounts. Prior to 2022, the O&O expenses component of early withdrawal penalties were applied as a reduction to O&O expenses to be repaid by RMC to members’ capital on scheduled redemptions. The amounts credited were determined by the ratio between the amount of the formation loan and the amount of offering costs incurred by the company. The change in 2022 has no net effect on the amounts paid by RMC to RMI IX. 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 December 31, 2022 , the payable to related party balance of approximately $ 254 thousand consisted of accounts payable of approximately $ 192 thousand to the manager and $ 62 thousand to a related mortgage fund. The related party transactions were settled in March, 2023. At December 31, 2021 , the payable to related party balance of approximately $ 101 thousand consisted of accounts payable to the manager of $ 168 thousand, which was partially offset by a receivable due from the manager of $ 67 thousand. The receivable was received from the manager and the payable was paid to the manager in March, 2022. - 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 value, which approximates market value. In 2022 , a related mortgage fund transferred to RMI IX two performing loans with aggregate principal of approximately $ 1.9 million in-full at par value, which approximates fair value. In 2021 , a related mortgage fund transferred to RMI IX five performing loans with aggregate principal of approximately $ 4.7 million 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 2021 , RMI IX transferred to related mortgage fund(s) five performing loans with aggregate principal of approximately $ 2.6 million 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 2022 - Promissory note funded to/repaid by related parties On April 15, 2022, the company loaned $ 1 million to a related party. This amount was utilized by the related party to fund a mortgage loan made by the related party in the amount of $ 3.5 million, which mortgage loan was secured by a deed of trust encumbering a real property consisting of six (6) tenancy-in-common units (each, a “TIC Unit”). At the time the mortgage loan was made, one of the TIC Units was in contract for sale with a scheduled closing date of April 18, 2022 and the mortgage loan borrower had agreed to utilize the net proceeds of the sale of the TIC Unit to pay down the mortgage loan in exchange for a partial release of the deed of trust securing the mortgage loan (“Release Proceeds”). The note evidencing the loan by the company to the related party accrued interest at the same rate of 7.75 % as the mortgage loan and the company’s loan to the related party was secured by a pledge of all payments received by the related party under the mortgage loan, including the Release Proceeds. The note matured on April 30, 2022. The Release Proceeds were received by the related party on April 18, 2022 and thereafter all principal and interest due to the company under its note from the related party was paid in full. |
Loans
Loans | 12 Months Ended |
Dec. 31, 2022 | |
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 are generally acquired 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 December 31, 2022, 42 of the company's 45 loans (representing 98 % 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 December 31, 2022, 24 of the loans outstanding (representing 71 % of the aggregate principal balance of the company's loan portfolio) provide for monthly payments of interest only, with the principal due at maturity. The remaining loans require monthly payments of principal and interest, typically calculated on a 30 -year amortization schedule, with the remaining principal due at maturity. Secured loans unpaid principal balance (principal) Secured loan transactions for 2022 and 2021 are summarized in the following table ($ in thousands). 2022 2021 Principal, beginning of period $ 81,097 $ 82,275 Loans funded 30,248 49,182 Principal collected (1) ( 36,306 ) ( 49,008 ) Loans transferred from related mortgage fund 1,939 4,672 Loans transferred to related mortgage funds — ( 2,560 ) Loans sold to non-affiliate ( 4,445 ) ( 3,464 ) Principal, end of period $ 72,533 $ 81,097 (1) Principal collected in 2022 includes principal collected and held in trust of approximately $ 3 thousand at December 31, 2022 , offset by principal collected and held in trust of approximately $ 48 thousand at December 31, 2021 which was disbursed to the company in January 2022. Principal collected in 2021 includes principal collected and held in trust of approximately $ 48 thousand at December 31, 2021 offset by principal collected and held in trust of approximately $ 12 thousand at December 31, 2020 which was disbursed to the company in January 2021. During 2022 and 2021 , the company renewed 12 and 16 maturing (or matured) loans with aggregate principal of approximately $ 33.6 million and $ 22.7 million, respectively, which are not included in the activity shown in the table above. The loans have an average extension period of approximately 11 months and 12 months in 2022 and 2021. The loans were current and deemed well collateralized (i.e., the LTV at the time of extension was within the company's lending guidelines). Additionally, interest rates charged to borrowers may be adjusted in conjunction with the loan extensions to reflect current market conditions. 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. In 2022 , seven loans with principal of approximately $ 4.4 million were sold to unaffiliated third-parties. After commission to third parties, the company recognized a gain of approximately $ 40 thousand. In 2021 , seven loans with aggregate principal of approximately $ 3.5 million were sold to unaffiliated third parties, for an amount that approximated the loan balance at the time of sale. 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 December 31, 2022, were disbursed to the company’s account by January 13, 2023. Loan payments in trust at December 31, 2021 were disbursed to the company’s account by January 14, 2022. Loan characteristics Secured loans had the characteristics presented in the following table ($ in thousands). December 31, December 31, 2022 2021 Number of secured loans 45 54 Secured loans – principal $ 72,533 $ 81,097 Secured loans – lowest interest rate (fixed) 6.8 % 6.8 % Secured loans – highest interest rate (fixed) 11.0 % 10.0 % Average secured loan – principal $ 1,612 $ 1,502 Average principal as percent of total principal 2.2 % 1.9 % Average principal as percent of members’ and manager's capital, net 2.3 % 2.0 % Average principal as percent of total assets 2.1 % 1.8 % Largest secured loan – principal $ 6,735 $ 6,750 Largest principal as percent of total principal 9.3 % 8.3 % Largest principal as percent of members’ and manager's capital, net 9.5 % 8.8 % Largest principal as percent of total assets 8.6 % 8.2 % Smallest secured loan – principal $ 146 $ 148 Smallest principal as percent of total principal 0.2 % 0.2 % Smallest principal as percent of members’ and manager's capital, net 0.2 % 0.2 % Smallest principal as percent of total assets 0.2 % 0.2 % Number of California counties where security is located 11 12 Largest percentage of principal in one California county 26.3 % 32.1 % Number of secured loans with prepaid interest 1 2 Prepaid interest $ 254 $ 643 As of December 31, 2022, the company’s largest loan with principal of $ 6.7 million is secured by an office property located in Santa Clara county, bears an interest rate of 8.25 % and matures on January 1, 2023 . As of December 31, 2022, the loan was performing and in first lien position. As of December 31, 2022 , the company had no commitments to lend outstanding and had no construction or rehabilitation loans outstanding. Distribution of secured loans - principal by California counties The distribution of secured loans by counties is presented in the following table ($ in thousands). December 31, 2022 December 31, 2021 Principal Percent Principal Percent San Francisco Bay Area (2) San Francisco $ 13,801 19.0 % $ 22,919 28.3 % San Mateo 13,054 18.0 4,985 6.1 Santa Clara 19,042 26.3 26,064 32.1 Alameda 6,062 8.4 5,637 7.0 Contra Costa 1,000 1.4 668 0.8 Napa 644 0.9 — 0.0 53,603 74.0 60,273 74.3 Other Northern California Placer 1,500 2.1 1,500 1.8 Tehama 405 0.5 405 0.5 Butte — 0.0 292 0.4 1,905 2.6 2,197 2.7 Northern California Total 55,508 76.6 62,470 77.0 Los Angeles & Coastal Los Angeles 3,512 4.8 3,621 4.5 Orange 6,809 9.4 8,444 10.4 San Diego 6,704 9.2 6,043 7.5 17,025 23.4 18,108 22.4 Other Southern California San Bernardino — 0.0 519 0.6 — 0.0 519 0.6 Southern California Total 17,025 23.4 18,627 23.0 Total principal, secured loans $ 72,533 100.0 % $ 81,097 100.0 % (2) Includes Silicon Valley Property type Secured loans summarized by property type are presented in the following table ($ in thousands). December 31, 2022 December 31, 2021 Loans Principal Percent Loans Principal Percent Single family (3) 21 $ 25,360 35 % 25 $ 24,236 30 % Commercial 17 34,386 47 19 41,923 52 Multi-family 6 11,287 16 9 13,438 16 Land 1 1,500 2 1 1,500 2 Total principal, secured loans 45 $ 72,533 100 % 54 $ 81,097 100 % (3) Single family property type as of December 31, 2022 consists of 10 loans with principal of $ 11.6 million that are owner occupied and 11 loans with principal of $ 13.8 million that are non-owner occupied. At December 31, 2021, single family property type consisted of 7 loans with principal of approximately $ 4.6 million that are owner occupied and 18 loans with principal of approximately $ 19.6 million that are non-owner occupied. Lien position At funding, secured loans had the lien positions in the following table ($ in thousands). December 31, 2022 December 31, 2021 Loans Principal Percent Loans Principal Percent First trust deeds 30 $ 59,497 82 % 38 $ 69,327 85 % Second trust deeds 15 13,036 18 16 11,770 15 Total principal, secured loans 45 72,533 100 % 54 81,097 100 % Liens due other lenders at loan closing 36,544 31,338 Total debt $ 109,077 $ 112,435 Appraised property value at loan closing $ 195,261 $ 215,683 Percent of total debt to appraised values (4) 58.3 % 58.0 % (4) Based on appraised values and liens due to 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 of the amount of senior liens to other lenders. Scheduled maturities/Secured loans - principal Secured loans scheduled to mature as of December 31, 2022, are presented in the following table ($ in thousands). First Trust Deeds Second Trust Deeds Loans Principal Percent Loans Principal Loans Principal 2023 22 $ 43,491 60 % 15 $ 36,468 7 $ 7,023 2024 12 20,536 28 8 17,212 4 3,324 2025 5 4,350 6 3 2,760 2 1,590 2026 — — 0.0 — — — — 2027 3 1,931 3 2 1,331 1 600 Thereafter 1 226 0.0 1 226 — — Total scheduled maturities 43 70,534 97 29 57,997 14 12,537 Matured as of December 31, 2022 2 1,999 3 1 1,500 1 499 Total principal, secured loans 45 $ 72,533 100 % 30 $ 59,497 15 $ 13,036 Scheduled maturities are presented based on the most recent in-effect agreement with the borrower, including forbearance agreements. As a result, matured loans at December 31, 2022, 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. Delinquency/secured loans Secured loans summarized by payment-delinquency status are presented in the following table ($ in thousands). December 31, 2022 December 31, 2021 Loans Principal Loans Principal Current 40 $ 64,423 47 $ 72,116 Past Due 30-89 days 1 4,940 4 7,165 90-179 days 2 1,681 1 930 180 or more days 2 1,489 2 886 Total past due 5 8,110 7 8,981 Total principal, secured loans 45 $ 72,533 54 $ 81,097 The table above presents the unpaid principal by delinquency category for all secured loans based on payment status, including loans that are interest only with no principal due. Secured loans at December 31, 2022 and 2021 had principal payments in arrears totaling approximately $ 2 million ( 5 loans) and $ 2.3 million ( 7 loans), respectively, and interest payments in arrears totaling approximately $ 133 thousand and $ 125 thousand, respectively. Payments in arrears for secured loans (i.e., monthly interest and principal payments past due 30 or more days) at December 31, 2022 are presented in the following tables ($ in thousands). Loans Principal Interest (5) At December 31, 2022 Past Monthly Past Monthly Past Monthly Total Past due 30-89 days — 1 $ — $ 32 $ — $ 64 $ 96 90-179 days 1 1 1,500 1 11 4 1,516 180 or more days 1 1 499 — — 54 553 Total past due 2 3 $ 1,999 $ 33 $ 11 $ 122 $ 2,165 (5) Interest includes foregone interest of approximately $ 54 thousand on non-accrual loans with monthly payments in arrears. December 2022 interest is due January 1, 2023 and is not included in the payments in arrears at December 31, 2022 . At December 31, 2022 and December 31, 2021, there was one loan with a forbearance agreement in effect with principal of $ 990 thousand, included in the table above as 180 or more days delinquent, which was not deemed to be a troubled debt restructuring. At December 31, 2022 and December 31, 2021, the company had no loan payment modification/workout agreements with borrowers. Secured loans in non-accrual status are summarized in the following table ($ in thousands). December 31, 2022 December 31, 2021 Number of loans 2 2 Principal $ 1,489 $ 1,576 Advances 1 1 Accrued interest (6) 4 35 Total recorded investment $ 1,494 $ 1,612 Foregone interest $ 58 $ 67 (6) Accrued interest in the table above is the amount of interest accrued prior to the loan being placed on non-accrual status, net of 68 thousand and $ 64 thousand was recognized for the loans in the non-accrual status for 2022 and 2021, respectively. The amortized cost basis of loans in non-accrual status with no specific allowance at December 31, 2022 and December 31, 2021 is equivalent to the entire balance of loans in non-accrual status since there is no specific allowance recorded for any loan. Secured loans are placed on non-accrual status the first day of the following month after a payment is 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. Once the payments are made current, interest income is recognized. At December 31, 2022, two loans with aggregate principal of approximately $ 1.7 million were 90 days or more past due and were not in non-accrual status. At December 31, 2021 , two loans with aggregate principal of approximately $ 1.2 million were 90 days or more 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. There was no activity in the allowance for loan losses in 2022 and 2021. The balance of the allowance for loan losses at December 31, 2022 and December 31, 2021 was $ 55 thousand. Loans designated impaired are presented in the following table ($ in thousands). December 31, 2022 December 31, 2021 Number of loans 4 4 Principal $ 3,170 $ 2,806 Recorded investment (7) 3,193 2,852 Impaired loans without allowance 3,193 2,852 Impaired loans with allowance — — Allowance for loan losses, impaired loans — — Weighted average LTV at origination 56.6 % 49.5 % (7) 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 2022 and 2021, as presented in the following table ($ in thousands). December 31, 2022 December 31, 2021 Average recorded investment $ 3,022 $ 5,374 Interest income recognized 219 167 Interest income received in cash 276 170 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 sales comparables (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 | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Line of Credit | NOTE 5 – LINE OF CREDIT Activity involving the line of credit in 2022 and 2021 is presented in the following table ($ in thousands). 2022 2021 Balance, January 1, $ 8,480 $ 10,000 Draws 9,900 19,935 Repayments ( 8,480 ) ( 21,455 ) Balance, December 31, $ 9,900 $ 8,480 Line of credit - average daily balance $ 8,479 $ 7,941 In March 2020, RMI IX entered into a revolving line of credit and term loan agreement with Western Alliance Bank (“bank”) which is governed by the terms of the Business Loan Agreement (Revolving Line of Credit and Term Loan Agreement) between the bank and company (“original credit agreement”), which was as amended and modified by the First Loan Modification Agreement made effective March 4, 2022 (the “modification agreement” and together with the original credit agreement, the “credit agreement of 2022”). Under the terms of the credit agreement of 2022, RMI IX can borrow up to a maximum principal of $ 10 million subject to a borrowing base calculation set forth in the credit agreement and the amounts advanced under the credit 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 maturity date is March 13, 2024 when all amounts outstanding are then due. RMI IX has the option prior at maturity date to convert – for a fee of one-quarter of one percent (0.25%) – the then outstanding principal balance to a two-year term loan maturing in March 2026. Prior to the modification agreement, interest on outstanding principal was payable monthly and accrued 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 %). The modification agreement replaced LIBOR as the reference rate under the credit agreement with the 30-day American Interbank Offered Rate Term -30 Index published for loans in United States Dollars by the American Financial Exchange (“Ameribor”). Following the modification agreement, interest on the outstanding principal under the credit line is payable monthly and accrues at the annual rate that is the greater of: (i) the Ameribor Rate plus three and one-quarter percent ( 3.25 %) and (ii) five percent ( 5.0 %). The fair value of the balance on the line of credit is deemed to approximate the recorded amount because the reference rate plus 3.25 % and the other terms and conditions, including the two-year term, of the Revolving Line of Credit and Term Loan Agreement are reflective of market rate terms (Level 2 inputs). 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 December 31, 2022 , the interest rate was seven and fourteen one-hundredths percent ( 7.14 %). 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 ($ 10,000,000 ). Advances on the line of credit are to be used exclusively to fund secured loans. The credit agreement provides for customary financial and borrowing base reporting by the company to the 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 bank’s guidance, less loan loss allowances, divided by total principal of the company’s loans. The credit agreement provides that in the event the credit 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 December 31, 2022 and December 31, 2021, agg regate principal of pledged loans was approximately $ 24.5 million an d $ 20.5 million , respectively, with a maximum allowed advance thereon of approximately $ 10 million, subject to the borrowing base calculation. The debt issuance costs from the original credit agreement were fully amortized in March 2022. Debt issuance costs of approximately $ 57 thousand from the modification agreement are being amortized over the two-year term of the modification agreement. Amortized debt issuance costs included in interest expense approximated $ 35 thousand and $ 55 thousand for 2022 and 2021 , respectively. |
Commitments and Contingencies,
Commitments and Contingencies, Other Than Loan Commitments | 12 Months Ended |
Dec. 31, 2022 | |
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 December 31, 2022. Legal proceedings and government proceedings As of December 31, 2022, the company is not involved in any legal proceedings or government proceedings other than those that would be considered part of the normal course of business and no legal proceedings were terminated during the fourth quarter of 2022. 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 | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 7 – SUBSEQUENT EVENTS The manager evaluated events occurring subsequent to December 31, 2022 and determined that there were no events or transactions occurring during this reporting period that require recognition or disclosure in the financial statements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
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 involve a significant level of uncertainty and have had or are reasonably likely to have a material impact on the company’s financial condition or results of operations. Such estimates relate principally to the determination of the allowance for loan losses, including the valuation of non-performing secured loans (which itself requires determining the fair value of the collateral), and the valuation of real estate owned ( “ REO ” ), at acquisition and subsequently (RMI IX has not acquired REO since it commenced operations in 2009). 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 thousand. 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 arrears) 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”). 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 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 less estimated costs to sell. 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. |
Reclassifications | Reclassifications A reclassification has been made in the prior year statement of cash flows to reclassify the presentation of formation loan collected from changes in members’ and manager’s capital to a separate line item within the financing section of the statement of cash flows. There was no change in total cash used in financing activities. |
Recently Issued Accounting Pronouncements | Recently issued accounting pronouncements - Accounting and Financial Reporting for Expected Credit Losses Effective January 1, 2023, RMI IX adopted Accounting Standards Codification 326, Financial Instruments – Credit Losses (“ASC 326”). The current expected credit loss (“CECL”) methodology required by ASC 326 utilizes a lifetime expected credit loss measurement objective for the recognition of credit losses at the time the financial asset is originated or acquired. The expected credit losses are adjusted each period for changes in expected lifetime credit losses for loans. The CECL methodology replaces the multiple existing impairment methods in current GAAP, which generally require that a loss be incurred before it is recognized. The CECL estimate is forward-looking, and management is required to use not only historical trends and current conditions, but also forecasts about future economic conditions to determine the expected credit loss over the remaining life of RMI IX’s loans. Management has completed its evaluation and implementation of the adoption of the new standard and concluded that the change to CECL methodology from the incurred loss models presently in use did not result in a material impact to the reported results of operations or financial position upon adoption. |
Manager and Other Related Par_2
Manager and Other Related Parties (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Schedule of Accounts, Notes, Loans and Financing Receivable | Formation loan transactions for 2022 and 2021 are presented in the following table ($ in thousands). 2022 2021 Balance, January 1 $ 3,388 $ 3,812 Payments received from RMC ( 278 ) ( 405 ) Early withdrawal penalties applied — ( 19 ) Balance, December 31 $ 3,110 $ 3,388 |
Schedule of Unit Redemptions | Redemptions of members’ capital for 2022 and 2021 are presented in the following table ($ in thousands). Redemptions 2022 2021 Without penalty $ 7,949 $ 3,983 With penalty 121 878 Total $ 8,070 $ 4,861 Early withdrawal penalties $ 3 $ 35 |
Summary of Organization and Offering Expenses | Unallocated O&O transactions for the years ended December 31, 2022 and 2021 are summarized in the following table ($ in thousands). 2022 2021 Balance, January 1 $ 1,458 $ 1,858 O&O expenses allocated ( 282 ) ( 303 ) O&O expenses paid by RMC (1) ( 131 ) ( 81 ) Early withdrawal penalties applied (2) — ( 16 ) Balance, December 31 $ 1,045 $ 1,458 (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 quarterly allocations. RMC estimated its future obligation to repay unallocated O&O expenses on scheduled redemptions as of December 31, 2022 , to be approximately $ 23 thousand. (2) Beginning in 2022, RMC discontinued the specific allocation of early withdrawal penalties it received to the formation loan and to the amount owed for unallocated O&O expenses on redeeming-members’ accounts. Prior to 2022, the O&O expenses component of early withdrawal penalties were applied as a reduction to O&O expenses to be repaid by RMC to members’ capital on scheduled redemptions. The amounts credited were determined by the ratio between the amount of the formation loan and the amount of offering costs incurred by the company. The change in 2022 has no net effect on the amounts paid by RMC to RMI IX. |
Loans (Tables)
Loans (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Secured Loan Principal Transactions | Secured loan transactions for 2022 and 2021 are summarized in the following table ($ in thousands). 2022 2021 Principal, beginning of period $ 81,097 $ 82,275 Loans funded 30,248 49,182 Principal collected (1) ( 36,306 ) ( 49,008 ) Loans transferred from related mortgage fund 1,939 4,672 Loans transferred to related mortgage funds — ( 2,560 ) Loans sold to non-affiliate ( 4,445 ) ( 3,464 ) Principal, end of period $ 72,533 $ 81,097 (1) Principal collected in 2022 includes principal collected and held in trust of approximately $ 3 thousand at December 31, 2022 , offset by principal collected and held in trust of approximately $ 48 thousand at December 31, 2021 which was disbursed to the company in January 2022. Principal collected in 2021 includes principal collected and held in trust of approximately $ 48 thousand at December 31, 2021 offset by principal collected and held in trust of approximately $ 12 thousand at December 31, 2020 which was disbursed to the company in January 2021. |
Secured Loans Characteristics | Secured loans had the characteristics presented in the following table ($ in thousands). December 31, December 31, 2022 2021 Number of secured loans 45 54 Secured loans – principal $ 72,533 $ 81,097 Secured loans – lowest interest rate (fixed) 6.8 % 6.8 % Secured loans – highest interest rate (fixed) 11.0 % 10.0 % Average secured loan – principal $ 1,612 $ 1,502 Average principal as percent of total principal 2.2 % 1.9 % Average principal as percent of members’ and manager's capital, net 2.3 % 2.0 % Average principal as percent of total assets 2.1 % 1.8 % Largest secured loan – principal $ 6,735 $ 6,750 Largest principal as percent of total principal 9.3 % 8.3 % Largest principal as percent of members’ and manager's capital, net 9.5 % 8.8 % Largest principal as percent of total assets 8.6 % 8.2 % Smallest secured loan – principal $ 146 $ 148 Smallest principal as percent of total principal 0.2 % 0.2 % Smallest principal as percent of members’ and manager's capital, net 0.2 % 0.2 % Smallest principal as percent of total assets 0.2 % 0.2 % Number of California counties where security is located 11 12 Largest percentage of principal in one California county 26.3 % 32.1 % Number of secured loans with prepaid interest 1 2 Prepaid interest $ 254 $ 643 |
Secured Loans by Lien Position in the Collateral | At funding, secured loans had the lien positions in the following table ($ in thousands). December 31, 2022 December 31, 2021 Loans Principal Percent Loans Principal Percent First trust deeds 30 $ 59,497 82 % 38 $ 69,327 85 % Second trust deeds 15 13,036 18 16 11,770 15 Total principal, secured loans 45 72,533 100 % 54 81,097 100 % Liens due other lenders at loan closing 36,544 31,338 Total debt $ 109,077 $ 112,435 Appraised property value at loan closing $ 195,261 $ 215,683 Percent of total debt to appraised values (4) 58.3 % 58.0 % (4) Based on appraised values and liens due to 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 of the amount of 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 ($ in thousands). December 31, 2022 December 31, 2021 Loans Principal Percent Loans Principal Percent Single family (3) 21 $ 25,360 35 % 25 $ 24,236 30 % Commercial 17 34,386 47 19 41,923 52 Multi-family 6 11,287 16 9 13,438 16 Land 1 1,500 2 1 1,500 2 Total principal, secured loans 45 $ 72,533 100 % 54 $ 81,097 100 % (3) Single family property type as of December 31, 2022 consists of 10 loans with principal of $ 11.6 million that are owner occupied and 11 loans with principal of $ 13.8 million that are non-owner occupied. At December 31, 2021, single family property type consisted of 7 loans with principal of approximately $ 4.6 million that are owner occupied and 18 loans with principal of approximately $ 19.6 million that are non-owner occupied. |
Secured Loans Distributed within California | The distribution of secured loans by counties is presented in the following table ($ in thousands). December 31, 2022 December 31, 2021 Principal Percent Principal Percent San Francisco Bay Area (2) San Francisco $ 13,801 19.0 % $ 22,919 28.3 % San Mateo 13,054 18.0 4,985 6.1 Santa Clara 19,042 26.3 26,064 32.1 Alameda 6,062 8.4 5,637 7.0 Contra Costa 1,000 1.4 668 0.8 Napa 644 0.9 — 0.0 53,603 74.0 60,273 74.3 Other Northern California Placer 1,500 2.1 1,500 1.8 Tehama 405 0.5 405 0.5 Butte — 0.0 292 0.4 1,905 2.6 2,197 2.7 Northern California Total 55,508 76.6 62,470 77.0 Los Angeles & Coastal Los Angeles 3,512 4.8 3,621 4.5 Orange 6,809 9.4 8,444 10.4 San Diego 6,704 9.2 6,043 7.5 17,025 23.4 18,108 22.4 Other Southern California San Bernardino — 0.0 519 0.6 — 0.0 519 0.6 Southern California Total 17,025 23.4 18,627 23.0 Total principal, secured loans $ 72,533 100.0 % $ 81,097 100.0 % (2) Includes Silicon Valley |
Secured Loans Scheduled Maturities | Secured loans scheduled to mature as of December 31, 2022, are presented in the following table ($ in thousands). First Trust Deeds Second Trust Deeds Loans Principal Percent Loans Principal Loans Principal 2023 22 $ 43,491 60 % 15 $ 36,468 7 $ 7,023 2024 12 20,536 28 8 17,212 4 3,324 2025 5 4,350 6 3 2,760 2 1,590 2026 — — 0.0 — — — — 2027 3 1,931 3 2 1,331 1 600 Thereafter 1 226 0.0 1 226 — — Total scheduled maturities 43 70,534 97 29 57,997 14 12,537 Matured as of December 31, 2022 2 1,999 3 1 1,500 1 499 Total principal, secured loans 45 $ 72,533 100 % 30 $ 59,497 15 $ 13,036 |
Past Due Financing Receivables | Secured loans summarized by payment-delinquency status are presented in the following table ($ in thousands). December 31, 2022 December 31, 2021 Loans Principal Loans Principal Current 40 $ 64,423 47 $ 72,116 Past Due 30-89 days 1 4,940 4 7,165 90-179 days 2 1,681 1 930 180 or more days 2 1,489 2 886 Total past due 5 8,110 7 8,981 Total principal, secured loans 45 $ 72,533 54 $ 81,097 The table above presents the unpaid principal by delinquency category for all secured loans based on payment status, including loans that are interest only with no principal due. |
Payments in Arrears Past Due Financing Receivables | Payments in arrears for secured loans (i.e., monthly interest and principal payments past due 30 or more days) at December 31, 2022 are presented in the following tables ($ in thousands). Loans Principal Interest (5) At December 31, 2022 Past Monthly Past Monthly Past Monthly Total Past due 30-89 days — 1 $ — $ 32 $ — $ 64 $ 96 90-179 days 1 1 1,500 1 11 4 1,516 180 or more days 1 1 499 — — 54 553 Total past due 2 3 $ 1,999 $ 33 $ 11 $ 122 $ 2,165 (5) Interest includes foregone interest of approximately $ 54 thousand on non-accrual loans with monthly payments in arrears. December 2022 interest is due January 1, 2023 and is not included in the payments in arrears at December 31, 2022 . |
Secured Loans in Non-Accrual Status | Secured loans in non-accrual status are summarized in the following table ($ in thousands). December 31, 2022 December 31, 2021 Number of loans 2 2 Principal $ 1,489 $ 1,576 Advances 1 1 Accrued interest (6) 4 35 Total recorded investment $ 1,494 $ 1,612 Foregone interest $ 58 $ 67 (6) Accrued interest in the table above is the amount of interest accrued prior to the loan being placed on non-accrual status, net of 68 thousand and $ 64 thousand was recognized for the loans in the non-accrual status for 2022 and 2021, respectively. The amortized cost basis of loans in non-accrual status with no specific allowance at December 31, 2022 and December 31, 2021 is equivalent to the entire balance of loans in non-accrual status since there is no specific allowance recorded for any loan. |
Impaired Loans [Member] | |
Impaired Financing Receivables | Loans designated impaired are presented in the following table ($ in thousands). December 31, 2022 December 31, 2021 Number of loans 4 4 Principal $ 3,170 $ 2,806 Recorded investment (7) 3,193 2,852 Impaired loans without allowance 3,193 2,852 Impaired loans with allowance — — Allowance for loan losses, impaired loans — — Weighted average LTV at origination 56.6 % 49.5 % (7) 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 2022 and 2021, as presented in the following table ($ in thousands). December 31, 2022 December 31, 2021 Average recorded investment $ 3,022 $ 5,374 Interest income recognized 219 167 Interest income received in cash 276 170 |
Line Of Credit (Tables)
Line Of Credit (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Line of Credit Facility [Abstract] | |
Schedule of Line of Credit Facilities Activity | Activity involving the line of credit in 2022 and 2021 is presented in the following table ($ in thousands). 2022 2021 Balance, January 1, $ 8,480 $ 10,000 Draws 9,900 19,935 Repayments ( 8,480 ) ( 21,455 ) Balance, December 31, $ 9,900 $ 8,480 Line of credit - average daily balance $ 8,479 $ 7,941 |
Organization and General - Addi
Organization and General - Additional Information (Details) $ in Thousands | 12 Months Ended | 117 Months Ended | ||
Dec. 31, 2022 USD ($) Units | May 31, 2019 | Mar. 11, 2022 | May 09, 2019 USD ($) 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 | |||
Effect on Future Earnings, Offset Amount | $ 298 | |||
Maximum Capital Units for Redemption Per Quarter Per Individual | Units | 100,000 | |||
Maximum Percentage of Members Total Outstanding Units for Redemption Per Quarter Per Individual | 25% | |||
Maximum Percentage of Weighted Average Number of Members Outstanding Units During Twelve Months for Redemption | 5% | |||
Weighted Average Number of Units Outstanding, Percentage Minimum | 5% | |||
Number of voting percentage | 53% | |||
DRIP [Member] | ||||
Organization and General (Details) [Line Items] | ||||
Gross proceeds from unit sales | $ 8,100 | |||
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 | |||
Redemption Between One to Two Years [Member] | ||||
Organization and General (Details) [Line Items] | ||||
Redemption Value Percentage of Purchase Price or Capital Account Balance | 92% | |||
Redemption Between Two to Three Years [Member] | ||||
Organization and General (Details) [Line Items] | ||||
Redemption Value Percentage of Purchase Price or Capital Account Balance | 94% | |||
Redemption Between Three to Four Years [Member] | ||||
Organization and General (Details) [Line Items] | ||||
Redemption Value Percentage of Purchase Price or Capital Account Balance | 96% | |||
Redemption Between Four to Five Years [Member] | ||||
Organization and General (Details) [Line Items] | ||||
Redemption Value Percentage of Purchase Price or Capital Account Balance | 98% | |||
Redemption After Five Years [Member] | ||||
Organization and General (Details) [Line Items] | ||||
Redemption Value Percentage of Purchase Price or Capital Account Balance | 100% | |||
RMC [Member] | ||||
Organization and General (Details) [Line Items] | ||||
Ownership interest held by the manager | 1% | |||
Managers share of net income or loss | 1% | |||
Percentage of profits and losses allocated to manager | 1% |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) 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 |
Manager and Other Related Par_3
Manager and Other Related Parties - Additional Information (Details) $ in Thousands | 12 Months Ended | ||||||||||
Mar. 31, 2023 USD ($) | Apr. 15, 2022 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) Loan | Dec. 31, 2022 USD ($) Loans | Dec. 31, 2022 USD ($) MortgageLoan | Dec. 31, 2021 USD ($) Loan MortgageLoan | Dec. 31, 2020 USD ($) | Apr. 30, 2019 USD ($) | |
Managers and Other Related Parties (Details) [Line Items] | |||||||||||
Managers Share of net income or loss | 1% | ||||||||||
Liquidation offering proceeds, percentage | 7% | ||||||||||
Formation loan advances to RMC | $ 3,100 | ||||||||||
Original formation loan | $ 5,600 | ||||||||||
Schedule future redemptions of member's capital | 1,200 | ||||||||||
Reimbursement as a percentage of member's original purchase price | 0.45% | ||||||||||
Percentage of original purchase price, quarterly installment percentage | 0.1125% | ||||||||||
Payable to the manager and related parties (Note 3) | $ 254 | 254 | $ 254 | $ 254 | $ 254 | $ 254 | $ 101 | ||||
Receivables from manager | $ 67 | ||||||||||
Mortgage Loans Transferred On Real Estate Number Of Loans | 0 | 5 | |||||||||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate, New Mortgage Loan | 30,248 | $ 49,182 | |||||||||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate, Number of Loans | 45 | 45 | 54 | ||||||||
Total principal, secured loans | 72,533 | 72,533 | $ 72,533 | 72,533 | $ 72,533 | $ 72,533 | $ 81,097 | $ 82,275 | |||
Total Capital redemptions | $ 1,900 | 8,100 | 4,800 | ||||||||
limitation rate | 5% | ||||||||||
limitation in amount | 936 | 3,800 | 4,000 | ||||||||
redemptions on death | 85 | 85 | $ 85 | $ 85 | 85 | 85 | |||||
Redemption amount net of the redemption due to death | $ 851 | ||||||||||
Redwood Mortgage Investors VIII [Member] | |||||||||||
Managers and Other Related Parties (Details) [Line Items] | |||||||||||
Payments to Fund Long-Term Loans to Related Parties | $ 1,000 | ||||||||||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate, New Mortgage Loan | $ 3,500 | ||||||||||
Mortgage Loan Interest Rate | 7.75% | ||||||||||
Actual costs reimbursed to RMC after the waived | 348 | $ 220 | |||||||||
Two Performing Loan [Member] | |||||||||||
Managers and Other Related Parties (Details) [Line Items] | |||||||||||
Mortgage Loans Transferred On Real Estate Number Of Loans | Loan | 2 | ||||||||||
Total principal, secured loans | 1,900 | 1,900 | 1,900 | $ 1,900 | 1,900 | 1,900 | |||||
Five Performing Loan [Member] | |||||||||||
Managers and Other Related Parties (Details) [Line Items] | |||||||||||
Mortgage Loans Transferred On Real Estate Number Of Loans | Loan | 5 | ||||||||||
Total principal, secured loans | 4,700 | 4,700 | 4,700 | 4,700 | 4,700 | 4,700 | $ 2,600 | ||||
Accounts Payable and Cost Reimbursements [Member] | |||||||||||
Managers and Other Related Parties (Details) [Line Items] | |||||||||||
Payable to the manager and related parties (Note 3) | 192 | 192 | 192 | 192 | 192 | 192 | 168 | ||||
Accounts Payable Related to Mortgage Fund [Member] | |||||||||||
Managers and Other Related Parties (Details) [Line Items] | |||||||||||
Payable to the manager and related parties (Note 3) | $ 62 | $ 62 | $ 62 | $ 62 | $ 62 | $ 62 | |||||
Maximum [Member] | |||||||||||
Managers and Other Related Parties (Details) [Line Items] | |||||||||||
Annual mortgage servicing fees, percentage | 0.25% | 0.25% | 0.25% | 0.25% | 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 | ||||||||||
RMC [Member] | |||||||||||
Managers and Other Related Parties (Details) [Line Items] | |||||||||||
Management Fee, Percentage | 0.75% | 0.75% | 0.75% | 0.75% | 0.75% | 0.75% | |||||
Administrative Fees, Percentage | 1% | 1% | 1% | 1% | 1% | 1% | |||||
Working Capital Reserve, Percentage | 2% | 2% | 2% | 2% | 2% | 2% | |||||
Loan Brokerage Commission Percent Minimum | 1.50% | 1.50% | 1.50% | 1.50% | 1.50% | 1.50% | |||||
Loan Brokerage Commission Percent Maximum | 5% | 5% | 5% | 5% | 5% | 5% | |||||
Loan Brokerage Commissions, Maximum Percent of Assets | 4% | 4% | 4% | 4% | 4% | 4% | |||||
Repayment of formation loan in annual installments | $ 208 | $ 208 | $ 208 | $ 208 | $ 208 | $ 208 | |||||
Schedule future redemptions of member's capital | 8,070 | 4,861 | |||||||||
Qualifying costs incurred | 797 | 645 | |||||||||
Reimbursement of costs from RMC waived | 449 | 425 | |||||||||
Loan Brokerage Commission | 653 | 928 | |||||||||
Early withdrawal penalties | 3 | 35 | |||||||||
Loan administrative fees waived | 302 | 492 | |||||||||
RMC [Member] | Accounts Payable and Cost Reimbursements [Member] | |||||||||||
Managers and Other Related Parties (Details) [Line Items] | |||||||||||
Payable to the manager and related parties (Note 3) | $ 254 | $ 254 | $ 254 | $ 254 | $ 254 | $ 254 | $ 101 |
Manager and Other Related Par_4
Manager and Other Related Parties - Formation Loan Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Formation Loan Transactions [Abstract] | ||
Balance, January 1 | $ 3,388 | $ 3,812 |
Payments received from RMC | 278 | 405 |
Early withdrawal penalties applied | 0 | 19 |
Balance, December 31 | $ 3,110 | $ 3,388 |
Manager and Other Related Par_5
Manager and Other Related Parties - Schedule of Unit Redemptions (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Managers and Other Related Parties (Details) [Line Items] | ||
Total, Capital redemptions | $ 1,200 | |
RMC [Member] | ||
Managers and Other Related Parties (Details) [Line Items] | ||
Total, Capital redemptions | 8,070 | $ 4,861 |
Early withdrawal penalties | 3 | 35 |
RMC [Member] | Without Penalty [Member] | ||
Managers and Other Related Parties (Details) [Line Items] | ||
Total, Capital redemptions | 7,949 | 3,983 |
RMC [Member] | With Penalty [Member] | ||
Managers and Other Related Parties (Details) [Line Items] | ||
Total, Capital redemptions | $ 121 | $ 878 |
Manager and Other Related Par_6
Manager and Other Related Parties - Summary of Organization and Offering Expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
Managers And Other Related Parties Details [Line Items] | |||
Balance, January 1 | $ (73,428) | ||
Ending balance | (67,657) | $ (73,428) | |
Unallocated Organization and Offering Expenses [Member] | |||
Managers And Other Related Parties Details [Line Items] | |||
Balance, January 1 | 1,458 | 1,858 | |
O&O expenses allocated | (282) | (303) | |
Organization and offering expenses repaid by RMC | [1] | (131) | (81) |
Early withdrawal penalties | [2] | 0 | (16) |
Ending balance | $ 1,045 | $ 1,458 | |
[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 quarterly allocations. RMC estimated its future obligation to repay unallocated O&O expenses on scheduled redemptions as of December 31, 2022 , to be approximately $ 23 thousand. Beginning in 2022, RMC discontinued the specific allocation of early withdrawal penalties it received to the formation loan and to the amount owed for unallocated O&O expenses on redeeming-members’ accounts. Prior to 2022, the O&O expenses component of early withdrawal penalties were applied as a reduction to O&O expenses to be repaid by RMC to members’ capital on scheduled redemptions. The amounts credited were determined by the ratio between the amount of the formation loan and the amount of offering costs incurred by the company. The change in 2022 has no net effect on the amounts paid by RMC to RMI IX. |
Manager and Other Related Par_7
Manager and Other Related Parties - Summary of Organization and Offering Expenses (Parenthetical) (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Related Party Transactions [Abstract] | |
Unallocated O&O expenses on units rebates period | 120 months |
Estimated future rebates on scheduled redemptions | $ 23 |
Loans - Additional Information
Loans - Additional Information (Details) | 12 Months Ended | |||||||
Dec. 31, 2022 USD ($) Loan Loans | Dec. 31, 2022 USD ($) Loan Loans | Dec. 31, 2022 USD ($) Loan Loans MortgageLoan | Dec. 31, 2022 USD ($) Loan Loans | Dec. 31, 2022 USD ($) Loan Loans | Dec. 31, 2021 USD ($) Loan Loans MortgageLoan | Dec. 31, 2020 USD ($) | ||
Loans Details [Line Items] | ||||||||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate, Number of Loans | 45 | 45 | 54 | |||||
Mortgage loans on Real estate number Of loans renewed | Loans | 12 | 16 | ||||||
Aggregated principal renewed | $ 33,600,000 | $ 22,700,000 | ||||||
Number of monthly interest loans | Loan | 24 | |||||||
Loans Receivable, Amortization Term | 30 years | |||||||
Mortgage Loans On Real Estate Principal Renewed | 33,600,000 | $ 22,700,000 | ||||||
Number of loans sold | Loans | 7 | 7 | ||||||
Financing Receivable, Recorded Investment, Nonaccrual Status (in Dollars) | $ 4,400,000 | 4,400,000 | $ 4,400,000 | $ 4,400,000 | $ 4,400,000 | $ 3,500,000 | ||
Gain recognized on sales of loans | $ 40,000 | |||||||
Mortgage Loans on Real Estate, Number of Loans | Loans | 2 | 2 | 2 | 2 | 2 | |||
Largest secured loan - principal (in Dollars) | $ 6,735,000 | $ 6,735,000 | $ 6,735,000 | $ 6,735,000 | $ 6,735,000 | $ 6,750,000 | ||
Commitment to Lend, Outstanding | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | |||
Number of loans | Loan | 45 | 45 | 45 | 45 | 45 | 54 | ||
Principal | $ 72,533,000 | $ 72,533,000 | $ 72,533,000 | $ 72,533,000 | $ 72,533,000 | $ 81,097,000 | ||
Allowance for Loan and Lease Losses, Adjustments, Other | 55,000 | 55,000 | ||||||
Principal non performing loans | $ 2,000,000 | 2,000,000 | 2,000,000 | 2,000,000 | $ 2,000,000 | |||
Principal payment arrears amount of non-performing loans | $ 2,300,000 | |||||||
Non performing number of loans | Loans | 5 | 7 | ||||||
Interest, Due Date | Jan. 01, 2023 | |||||||
Accrued interest | $ 490,000 | 490,000 | 490,000 | 490,000 | $ 490,000 | $ 529,000 | ||
Allowance for loans losses reserve | 0 | |||||||
Principal | 3,170,000 | 3,170,000 | 3,170,000 | 3,170,000 | 3,170,000 | 2,806,000 | ||
Total principal, secured loans | 72,533,000 | 72,533,000 | $ 72,533,000 | $ 72,533,000 | 72,533,000 | $ 81,097,000 | $ 82,275,000 | |
Impaired Loans [Member] | ||||||||
Loans Details [Line Items] | ||||||||
Number of loans | Loan | 4 | 4 | ||||||
Single Family [Member] | ||||||||
Loans Details [Line Items] | ||||||||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate, Number of Loans | MortgageLoan | [1] | 21 | 25 | |||||
Total principal, secured loans | [1] | 25,360,000 | 25,360,000 | $ 25,360,000 | $ 25,360,000 | 25,360,000 | $ 24,236,000 | |
San Bernardino [Member] | ||||||||
Loans Details [Line Items] | ||||||||
Total principal, secured loans | 0 | 0 | 0 | 0 | 0 | 519,000 | ||
Alameda [Member] | ||||||||
Loans Details [Line Items] | ||||||||
Total principal, secured loans | [2] | 6,062,000 | 6,062,000 | 6,062,000 | 6,062,000 | 6,062,000 | 5,637,000 | |
San Francisco [Member] | ||||||||
Loans Details [Line Items] | ||||||||
Total principal, secured loans | [2] | 13,801,000 | 13,801,000 | 13,801,000 | 13,801,000 | 13,801,000 | 22,919,000 | |
Loan Payment Modification Agreement [Member] | ||||||||
Loans Details [Line Items] | ||||||||
Principal | $ 990,000 | $ 990,000 | $ 990,000 | $ 990,000 | $ 990,000 | $ 990,000 | ||
Past Due 30-89 Days [Member] | ||||||||
Loans Details [Line Items] | ||||||||
Number of loans | Loan | 1 | 1 | 1 | 1 | 1 | 4 | ||
Principal | $ 4,940,000 | $ 4,940,000 | $ 4,940,000 | $ 4,940,000 | $ 4,940,000 | $ 7,165,000 | ||
Past Due 90-179 Days [Member] | ||||||||
Loans Details [Line Items] | ||||||||
Number of loans | Loan | 2 | 2 | 2 | 2 | 2 | 1 | ||
Principal | $ 1,681,000 | $ 1,681,000 | $ 1,681,000 | $ 1,681,000 | $ 1,681,000 | $ 930,000 | ||
Past Due 180 Or More Days [Member] | ||||||||
Loans Details [Line Items] | ||||||||
Number of loans | Loan | 2 | 2 | 2 | 2 | 2 | 2 | ||
Principal | $ 1,489,000 | $ 1,489,000 | $ 1,489,000 | $ 1,489,000 | $ 1,489,000 | $ 886,000 | ||
Monthly payments, principal | 0 | 0 | 0 | 0 | 0 | |||
Monthly payments, interest | [3] | $ 54,000 | $ 54,000 | $ 54,000 | $ 54,000 | $ 54,000 | ||
Financial Asset, Equal to or Greater than 90 Days Past Due | ||||||||
Loans Details [Line Items] | ||||||||
Number of loans | Loans | 2 | 2 | 2 | 2 | 2 | 2 | ||
Financing receivable, recorded investment, 90 days past due and still accruing | $ 1,700,000 | $ 1,700,000 | $ 1,700,000 | $ 1,700,000 | $ 1,700,000 | $ 1,200,000 | ||
Minimum [Member] | ||||||||
Loans Details [Line Items] | ||||||||
Loans Receivable, Remaining Term | 5 years | |||||||
Non Performing Loans [Member] | Maximum [Member] | ||||||||
Loans Details [Line Items] | ||||||||
Accrued interest | $ 125,000 | |||||||
Interest in arrears | $ 133,000 | $ 133,000 | $ 133,000 | $ 133,000 | $ 133,000 | |||
Five Years Or Less Term Loans [Member] | ||||||||
Loans Details [Line Items] | ||||||||
SEC Schedule, 12-29, Real Estate Companies, Investment in Mortgage Loans on Real Estate, Number of Loans | MortgageLoan | 42 | |||||||
Loans Receivable, Percent of Aggregate Principal | 98% | 98% | 98% | 98% | 98% | |||
Interest Only [Member] | ||||||||
Loans Details [Line Items] | ||||||||
Loans Receivable, Percent of Aggregate Principal | 71% | 71% | 71% | 71% | 71% | |||
Largest Loan [Member] | ||||||||
Loans Details [Line Items] | ||||||||
Loans Receivable, Yield of Loan Acquired | 8.25% | 8.25% | 8.25% | 8.25% | 8.25% | |||
Loans Receivable Maturity Date | Jan. 01, 2023 | |||||||
Construction Or Rehabilitation Loans [Member] | ||||||||
Loans Details [Line Items] | ||||||||
Number of loans | Loan | 0 | |||||||
[1] Single family property type as of December 31, 2022 consists of 10 loans with principal of $ 11.6 million that are owner occupied and 11 loans with principal of $ 13.8 million that are non-owner occupied. At December 31, 2021, single family property type consisted of 7 loans with principal of approximately $ 4.6 million that are owner occupied and 18 loans with principal of approximately $ 19.6 million that are non-owner occupied. Includes Silicon Valley Interest includes foregone interest of approximately $ 54 thousand on non-accrual loans with monthly payments in arrears. December 2022 interest is due January 1, 2023 and is not included in the payments in arrears at December 31, 2022 |
Loans - Secured Loan Principal
Loans - Secured Loan Principal Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
Receivables [Abstract] | |||
Principal, beginning of period | $ 81,097 | $ 82,275 | |
Loans funded | 30,248 | 49,182 | |
Principal collected | [1] | (36,306) | (49,008) |
Loans transferred from related mortgage fund | 1,939 | 4,672 | |
Loans transferred to related mortgage funds | 2,560 | ||
Loans sold to non-affiliate | (4,445) | (3,464) | |
Principal, December 31 | $ 72,533 | $ 81,097 | |
[1] Principal collected in 2022 includes principal collected and held in trust of approximately $ 3 thousand at December 31, 2022 , offset by principal collected and held in trust of approximately $ 48 thousand at December 31, 2021 which was disbursed to the company in January 2022. Principal collected in 2021 includes principal collected and held in trust of approximately $ 48 thousand at December 31, 2021 offset by principal collected and held in trust of approximately $ 12 thousand at December 31, 2020 which was disbursed to the company in January 2021. |
Loans - Secured Loan Principa_2
Loans - Secured Loan Principal Transactions (Parenthetical) (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Receivables [Abstract] | |||
Amount Includes Principal Collected and Held in trust | $ 3 | $ 48 | $ 12 |
Loans - Secured Loans Character
Loans - Secured Loans Characteristics (Details) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2022 USD ($) MortgageLoan Country | Dec. 31, 2022 USD ($) Country | Dec. 31, 2022 USD ($) Country Loans | Dec. 31, 2021 USD ($) Country MortgageLoan | Dec. 31, 2020 USD ($) | |
Secured Loan Transactions [Line Items] | |||||
Total principal, secured loans | 45 | 45 | 54 | ||
Principal | $ 72,533 | $ 72,533 | $ 72,533 | $ 81,097 | $ 82,275 |
Average secured loan - principal (in Dollars) | $ 1,612 | $ 1,612 | $ 1,612 | $ 1,502 | |
Average principal as percent of total principal | 2.20% | 2.20% | 2.20% | 1.90% | |
Average principal as percent of members’ capital, net | 2.30% | 2.30% | 2.30% | 2% | |
Average principal as percent of total assets | 2.10% | 2.10% | 2.10% | 1.80% | |
Largest secured loan - principal (in Dollars) | $ 6,735 | $ 6,735 | $ 6,735 | $ 6,750 | |
Largest principal as percent of total principal | 9.30% | 9.30% | 9.30% | 8.30% | |
Largest principal as percent of members’ capital, net | 9.50% | 9.50% | 9.50% | 8.80% | |
Largest principal as percent of total assets | 8.60% | 8.60% | 8.60% | 8.20% | |
Smallest secured loan - principal (in Dollars) | $ 146 | $ 146 | $ 146 | $ 148 | |
Smallest principal as percent of total principal | 0.20% | 0.20% | 0.20% | 0.20% | |
Smallest principal as percent of members’ capital, net | 0.20% | 0.20% | 0.20% | 0.20% | |
Smallest principal as percent of total assets | 0.20% | 0.20% | 0.20% | 0.20% | |
Number of California counties where security is located | Country | 11 | 11 | 11 | 12 | |
Largest percentage of principal in one California county | 26.30% | 26.30% | 26.30% | 32.10% | |
Prepaid interest | $ 254 | $ 254 | $ 254 | ||
Prepaid Interest [Member] | |||||
Secured Loan Transactions [Line Items] | |||||
Total principal, secured loans | MortgageLoan | 1 | 2 | |||
Prepaid interest | $ 643 | ||||
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) | 11% | 10% |
Loans - Secured Loans Distribut
Loans - Secured Loans Distributed Within California (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Principal | $ 72,533 | $ 81,097 | $ 82,275 | |
Loans - percent | 100% | 100% | ||
San Francisco [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Principal | [1] | $ 13,801 | $ 22,919 | |
Loans - percent | [1] | 19% | 28.30% | |
San Mateo [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Principal | [1] | $ 13,054 | $ 4,985 | |
Loans - percent | [1] | 18% | 6.10% | |
Santa Clara [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Principal | [1] | $ 19,042 | $ 26,064 | |
Loans - percent | [1] | 26.30% | 32.10% | |
Alameda [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Principal | [1] | $ 6,062 | $ 5,637 | |
Loans - percent | [1] | 8.40% | 7% | |
Contra Costa [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Principal | [1] | $ 1,000 | $ 668 | |
Loans - percent | [1] | 1.40% | 0.80% | |
Napa [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Principal | [1] | $ 644 | $ 0 | |
Loans - percent | [1] | 0.90% | 0% | |
San Francisco Bay Area [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Principal | [1] | $ 53,603 | $ 60,273 | |
Loans - percent | [1] | 74% | 74.30% | |
Placer [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Principal | $ 1,500 | $ 1,500 | ||
Loans - percent | 2.10% | 1.80% | ||
Tehama [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Principal | $ 405 | $ 405 | ||
Loans - percent | 0.50% | 0.50% | ||
Butte [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Principal | $ 0 | $ 292 | ||
Loans - percent | 0% | 0.40% | ||
Other Northern California [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Principal | $ 1,905 | $ 2,197 | ||
Loans - percent | 2.60% | 2.70% | ||
Northern California [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Principal | $ 55,508 | $ 62,470 | ||
Loans - percent | 76.60% | 77% | ||
Los Angeles [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Principal | $ 3,512 | $ 3,621 | ||
Loans - percent | 4.80% | 4.50% | ||
Orange [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Principal | $ 6,809 | $ 8,444 | ||
Loans - percent | 9.40% | 10.40% | ||
San Diego [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Principal | $ 6,704 | $ 6,043 | ||
Loans - percent | 9.20% | 7.50% | ||
Los Angeles & Coastal [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Principal | $ 17,025 | $ 18,108 | ||
Loans - percent | 23.40% | 22.40% | ||
San Bernardino [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Principal | $ 0 | $ 519 | ||
Loans - percent | 0% | 0.60% | ||
Other Southern California [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Principal | $ 0 | $ 519 | ||
Loans - percent | 0% | 0.60% | ||
Southern California [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Principal | $ 17,025 | $ 18,627 | ||
Loans - percent | 23.40% | 23% | ||
[1] Includes Silicon Valley |
Loans - Secured Loans by Proper
Loans - Secured Loans by Property Type (Details) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2022 USD ($) MortgageLoan | Dec. 31, 2022 USD ($) Loans | Dec. 31, 2021 USD ($) MortgageLoan | Dec. 31, 2020 USD ($) | ||
Loans (Details) - Secured Loans by Property Type [Line Items] | |||||
Total principal, secured loans | 45 | 45 | 54 | ||
Principal | $ 72,533 | $ 72,533 | $ 81,097 | $ 82,275 | |
Loans - percent | 100% | 100% | 100% | ||
Single Family [Member] | |||||
Loans (Details) - Secured Loans by Property Type [Line Items] | |||||
Total principal, secured loans | MortgageLoan | [1] | 21 | 25 | ||
Principal | [1] | $ 25,360 | $ 25,360 | $ 24,236 | |
Loans - percent | [1] | 35% | 35% | 30% | |
Commercial [Member] | |||||
Loans (Details) - Secured Loans by Property Type [Line Items] | |||||
Total principal, secured loans | MortgageLoan | 17 | 19 | |||
Principal | $ 34,386 | $ 34,386 | $ 41,923 | ||
Loans - percent | 47% | 47% | 52% | ||
Multifamily [Member] | |||||
Loans (Details) - Secured Loans by Property Type [Line Items] | |||||
Total principal, secured loans | MortgageLoan | 6 | 9 | |||
Principal | $ 11,287 | $ 11,287 | $ 13,438 | ||
Loans - percent | 16% | 16% | 16% | ||
Land [Member] | |||||
Loans (Details) - Secured Loans by Property Type [Line Items] | |||||
Total principal, secured loans | MortgageLoan | 1 | 1 | |||
Principal | $ 1,500 | $ 1,500 | $ 1,500 | ||
Loans - percent | 2% | 2% | 2% | ||
[1] Single family property type as of December 31, 2022 consists of 10 loans with principal of $ 11.6 million that are owner occupied and 11 loans with principal of $ 13.8 million that are non-owner occupied. At December 31, 2021, single family property type consisted of 7 loans with principal of approximately $ 4.6 million that are owner occupied and 18 loans with principal of approximately $ 19.6 million that are non-owner occupied. |
Loans - Secured Loans by Prop_2
Loans - Secured Loans by Property Type (Parenthetical) (Details) | 12 Months Ended | ||||
Dec. 31, 2022 USD ($) MortgageLoan | Dec. 31, 2022 USD ($) Loan | Dec. 31, 2022 USD ($) Loans | Dec. 31, 2021 USD ($) Loan MortgageLoan | Dec. 31, 2020 USD ($) | |
Loans (Details) - Secured Loans by Property Type [Line Items] | |||||
Total principal, secured loans | 45 | 45 | 54 | ||
Principal | $ 72,533,000 | $ 72,533,000 | $ 72,533,000 | $ 81,097,000 | $ 82,275,000 |
Single Family Property-Owner Occupied [Member] | |||||
Loans (Details) - Secured Loans by Property Type [Line Items] | |||||
Total principal, secured loans | Loan | 10 | 7 | |||
Principal | 11,600,000 | $ 11,600,000 | 11,600,000 | $ 4,600,000 | |
Single Family Property-NonOwner Occupied [Member] | |||||
Loans (Details) - Secured Loans by Property Type [Line Items] | |||||
Total principal, secured loans | Loan | 11 | 18 | |||
Principal | $ 13,800 | $ 13,800 | $ 13,800 | $ 19,600,000 |
Loans - Secured Loans by Lien P
Loans - Secured Loans by Lien Position in the Collateral (Details) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2022 USD ($) MortgageLoan | Dec. 31, 2022 USD ($) Loans | Dec. 31, 2021 USD ($) MortgageLoan | Dec. 31, 2020 USD ($) | ||
Loans (Details) - Secured Loans by Lien Position in the Collateral [Line Items] | |||||
Total principal, secured loans | 45 | 45 | 54 | ||
Principal | $ 72,533 | $ 72,533 | $ 81,097 | $ 82,275 | |
Liens due other lenders at loan closing | 36,544 | 36,544 | 31,338 | ||
Total debt | 109,077 | 109,077 | 112,435 | ||
Appraised property value at loan closing | $ 195,261 | $ 195,261 | $ 215,683 | ||
Percent of total debt to appraised values (LTV) at loan closing | [1] | 58.30% | 58.30% | 58% | |
Loans - percent | 100% | 100% | 100% | ||
First Trust Deeds [Member] | |||||
Loans (Details) - Secured Loans by Lien Position in the Collateral [Line Items] | |||||
Total principal, secured loans | 30 | 30 | 38 | ||
Principal | $ 59,497 | $ 59,497 | $ 69,327 | ||
Loans - percent | 82% | 82% | 85% | ||
Second Trust Deeds [Member] | |||||
Loans (Details) - Secured Loans by Lien Position in the Collateral [Line Items] | |||||
Total principal, secured loans | 15 | 15 | 16 | ||
Principal | $ 13,036 | $ 13,036 | $ 11,770 | ||
Loans - percent | 18% | 18% | 15% | ||
[1] Based on appraised values and liens due to 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 of the amount of senior liens to other lenders. |
Loans - Secured Loans Scheduled
Loans - Secured Loans Scheduled Maturities (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 USD ($) Loans MortgageLoan | Dec. 31, 2022 USD ($) Loans | Dec. 31, 2021 USD ($) MortgageLoan Loans | Dec. 31, 2020 USD ($) | |
Financing Receivable, Past Due [Line Items] | ||||
2023, Loans | Loans | 22 | 22 | ||
2024, Loans | Loans | 12 | 12 | ||
2025, Loans | Loans | 5 | 5 | ||
2026, Loans | Loans | 0 | 0 | ||
2027, Loans | Loans | 3 | 3 | ||
Thereafter, Loans | Loans | 1 | 1 | ||
Total scheduled maturities, Loans | Loans | 43 | |||
Matured as of December 31, 2022, Loans | Loans | 2 | 2 | ||
Total principal, secured loans | Loans | 12 | 16 | ||
Total principal, secured loans | 45 | 45 | 54 | |
2023, Principal | $ 43,491 | $ 43,491 | ||
2024, Principal | 20,536 | 20,536 | ||
2025, Principal | 4,350 | 4,350 | ||
2026, Principal | 0 | 0 | ||
2027, Principal | 1,931 | 1,931 | ||
Thereafter, Principal | 226 | 226 | ||
Total scheduled maturities, Principal | 70,534 | 70,534 | ||
Matured as of December 31, 2022, Principal | 1,999 | 1,999 | ||
Total principal, secured loans | $ 72,533 | $ 72,533 | $ 81,097 | $ 82,275 |
2023, Percent | 60% | 60% | ||
2024, Percent | 28% | 28% | ||
2025, Percent | 6% | 6% | ||
2026, Percent | 0% | 0% | ||
2027, Percent | 3% | 3% | ||
Thereafter, Percent | 0% | 0% | ||
Total scheduled maturities, Percent | 97% | 97% | ||
Matured as of December 31, 2022, Percent | 3% | 3% | ||
Total principal, secured loans, Percent | 100% | 100% | 100% | |
First Trust Deeds [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
2023, Loans | Loans | 15 | 15 | ||
2024, Loans | Loans | 8 | 8 | ||
2025, Loans | Loans | 3 | 3 | ||
2026, Loans | Loans | 0 | 0 | ||
2027, Loans | Loans | 2 | 2 | ||
Thereafter, Loans | Loans | 1 | 1 | ||
Total scheduled maturities, Loans | Loans | 29 | |||
Matured as of December 31, 2022, Loans | Loans | 1 | 1 | ||
Total principal, secured loans | 30 | 30 | 38 | |
2023, Principal | $ 36,468 | $ 36,468 | ||
2024, Principal | 17,212 | 17,212 | ||
2025, Principal | 2,760 | 2,760 | ||
2026, Principal | 0 | 0 | ||
2027, Principal | 1,331 | 1,331 | ||
Thereafter, Principal | 226 | 226 | ||
Total scheduled maturities, Principal | 57,997 | 57,997 | ||
Matured as of December 31, 2022, Principal | 1,500 | 1,500 | ||
Total principal, secured loans | $ 59,497 | $ 59,497 | $ 69,327 | |
Total principal, secured loans, Percent | 82% | 82% | 85% | |
Second Trust Deeds [Member] | ||||
Financing Receivable, Past Due [Line Items] | ||||
2023, Loans | Loans | 7 | 7 | ||
2024, Loans | Loans | 4 | 4 | ||
2025, Loans | Loans | 2 | 2 | ||
2026, Loans | Loans | 0 | 0 | ||
2027, Loans | Loans | 1 | 1 | ||
Thereafter, Loans | Loans | 0 | 0 | ||
Total scheduled maturities, Loans | Loans | 14 | |||
Matured as of December 31, 2022, Loans | Loans | 1 | 1 | ||
Total principal, secured loans | 15 | 15 | 16 | |
2023, Principal | $ 7,023 | $ 7,023 | ||
2024, Principal | 3,324 | 3,324 | ||
2025, Principal | 1,590 | 1,590 | ||
2026, Principal | 0 | 0 | ||
2027, Principal | 600 | 600 | ||
Thereafter, Principal | 0 | 0 | ||
Total scheduled maturities, Principal | 12,537 | 12,537 | ||
Matured as of December 31, 2022, Principal | 499 | 499 | ||
Total principal, secured loans | $ 13,036 | $ 13,036 | $ 11,770 | |
Total principal, secured loans, Percent | 18% | 18% | 15% |
Loans - Past Due Financing Rece
Loans - Past Due Financing Receivables (Details) $ in Thousands | Dec. 31, 2022 USD ($) Loan | Dec. 31, 2021 USD ($) Loan |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Number of loans | Loan | 45 | 54 |
Principal | $ | $ 72,533 | $ 81,097 |
Current [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Number of loans | Loan | 40 | 47 |
Principal | $ | $ 64,423 | $ 72,116 |
Past Due 30-89 Days [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Number of loans | Loan | 1 | 4 |
Principal | $ | $ 4,940 | $ 7,165 |
Past Due 90-179 Days [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Number of loans | Loan | 2 | 1 |
Principal | $ | $ 1,681 | $ 930 |
Past Due 180 Or More Days [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Number of loans | Loan | 2 | 2 |
Principal | $ | $ 1,489 | $ 886 |
Total past due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Number of loans | Loan | 5 | 7 |
Principal | $ | $ 8,110 | $ 8,981 |
Loans - Schedule of Payments in
Loans - Schedule of Payments in Arrears Past Due Financing Receivables (Details) $ in Thousands | Dec. 31, 2022 USD ($) Loan | |
30-89 days [Member] | ||
Loans Details Secured Loans By Property Type Of Collateral [Line Items] | ||
Number of loans | Loan | 0 | |
Number of loans | Loan | 1 | |
Past maturity, principal | $ 0 | |
Monthly payments, principal | 32 | |
Past maturity, interest | 0 | [1] |
Monthly payments, interest | 64 | [1] |
Total payments | $ 96 | |
90-179 days [Member] | ||
Loans Details Secured Loans By Property Type Of Collateral [Line Items] | ||
Number of loans | Loan | 1 | |
Number of loans | Loan | 1 | |
Past maturity, principal | $ 1,500 | |
Monthly payments, principal | 1 | |
Past maturity, interest | 11 | [1] |
Monthly payments, interest | 4 | [1] |
Total payments | $ 1,516 | |
Past Due 180 Or More Days [Member] | ||
Loans Details Secured Loans By Property Type Of Collateral [Line Items] | ||
Number of loans | Loan | 1 | |
Number of loans | Loan | 1 | |
Past maturity, principal | $ 499 | |
Monthly payments, principal | 0 | |
Past maturity, interest | 0 | [1] |
Monthly payments, interest | 54 | [1] |
Total payments | $ 553 | |
Total past due [Member] | ||
Loans Details Secured Loans By Property Type Of Collateral [Line Items] | ||
Number of loans | Loan | 2 | |
Number of loans | Loan | 3 | |
Past maturity, principal | $ 1,999 | |
Monthly payments, principal | 33 | |
Past maturity, interest | 11 | [1] |
Monthly payments, interest | 122 | [1] |
Total payments | $ 2,165 | |
[1] Interest includes foregone interest of approximately $ 54 thousand on non-accrual loans with monthly payments in arrears. December 2022 interest is due January 1, 2023 and is not included in the payments in arrears at December 31, 2022 |
Loans - Schedule of Payments _2
Loans - Schedule of Payments in Arrears Past Due Financing Receivables (Parenthetical) (Details) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2022 USD ($) Loan | Dec. 31, 2022 USD ($) Loan MortgageLoan | Dec. 31, 2022 USD ($) Loan Loans | Dec. 31, 2021 USD ($) MortgageLoan | ||
Loans Details Secured Loans By Property Type Of Collateral [Line Items] | |||||
Reimbursement as a percentage of member's original purchase price | 45 | 45 | 54 | ||
Foregone interest payments in arrear | $ 54 | $ 54 | $ 54 | ||
Interest, Due Date | Jan. 01, 2023 | ||||
Principal | $ 72,533 | $ 72,533 | $ 72,533 | $ 81,097 | |
30-89 days [Member] | |||||
Loans Details Secured Loans By Property Type Of Collateral [Line Items] | |||||
Reimbursement as a percentage of member's original purchase price | Loan | 1 | 1 | 1 | ||
Monthly payments, interest | [1] | $ 64 | $ 64 | $ 64 | |
Past Due 180 Or More Days [Member] | |||||
Loans Details Secured Loans By Property Type Of Collateral [Line Items] | |||||
Reimbursement as a percentage of member's original purchase price | Loan | 1 | 1 | 1 | ||
Monthly payments, interest | [1] | $ 54 | $ 54 | $ 54 | |
Principal | $ 1,489 | $ 1,489 | $ 1,489 | $ 886 | |
[1] Interest includes foregone interest of approximately $ 54 thousand on non-accrual loans with monthly payments in arrears. December 2022 interest is due January 1, 2023 and is not included in the payments in arrears at December 31, 2022 |
Loans - Secured Loans in Non-Ac
Loans - Secured Loans in Non-Accrual Status (Details) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2022 USD ($) MortgageLoan | Dec. 31, 2022 USD ($) Loans | Dec. 31, 2021 USD ($) MortgageLoan | Dec. 31, 2020 USD ($) | ||
Loans Details Secured Loans In Nonaccrual Status [Line Items] | |||||
Total principal, secured loans | 45 | 45 | 54 | ||
Principal | $ 72,533 | $ 72,533 | $ 81,097 | $ 82,275 | |
Accrued interest | $ 490 | 490 | $ 529 | ||
Non-Accrual Status [Member] | |||||
Loans Details Secured Loans In Nonaccrual Status [Line Items] | |||||
Total principal, secured loans | MortgageLoan | 2 | 2 | |||
Principal | $ 1,494 | 1,494 | $ 1,612 | ||
Accrued interest | [1] | 4 | 4 | 35 | |
Forgone interest | 58 | 58 | 67 | ||
Principal [Member] | Non-Accrual Status [Member] | |||||
Loans Details Secured Loans In Nonaccrual Status [Line Items] | |||||
Principal | 1,489 | 1,489 | 1,576 | ||
Advances [Member] | Non-Accrual Status [Member] | |||||
Loans Details Secured Loans In Nonaccrual Status [Line Items] | |||||
Principal | $ 1 | $ 1 | $ 1 | ||
[1] Accrued interest in the table above is the amount of interest accrued prior to the loan being placed on non-accrual status, net of 68 thousand and $ 64 thousand was recognized for the loans in the non-accrual status for 2022 and 2021, respectively. The amortized cost basis of loans in non-accrual status with no specific allowance at December 31, 2022 and December 31, 2021 is equivalent to the entire balance of loans in non-accrual status since there is no specific allowance recorded for any loan. |
Loans - Secured Loans in Non-_2
Loans - Secured Loans in Non-Accrual Status (Parenthetical) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Loans Details Secured Loans In Nonaccrual Status [Line Items] | ||
Specific allowance | $ 0 | $ 0 |
Non Accrual Loans [Member] | ||
Loans Details Secured Loans In Nonaccrual Status [Line Items] | ||
Interest Income, Operating | $ 68 | $ 64 |
Loans - Schedule of Impaired Lo
Loans - Schedule of Impaired Loans/Allowance for Loan Losses (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) Loan | Dec. 31, 2021 USD ($) Loan | ||
Principal | $ 3,170 | $ 2,806 | |
Recorded investment | [1] | 3,193 | 2,852 |
Impaired loans without allowance | 3,193 | 2,852 | |
Impaired loans with allowance | 0 | ||
Impaired Financing Receivable, Related Allowance | $ 0 | ||
Weighted average LTV at origination | 56.60% | 49.50% | |
Impaired Loans [Member] | |||
Number of loans | Loan | 4 | 4 | |
[1] Recorded investment is the sum of the principal, advances, and accrued interest receivable for financial reporting purposes. |
Loans - Impaired Loans - Averag
Loans - Impaired Loans - Average Balances and Interest Income (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Impaired Loans - Average Balances and Interest Income [Abstract] | ||
Average recorded investment | $ 3,022 | $ 5,374 |
Interest income recognized | 219 | 167 |
Interest income received in cash | $ 276 | $ 170 |
Line of Credit - Schedule of Li
Line of Credit - Schedule of Line of Credit Facilities Activity (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Debt Disclosure [Abstract] | ||
Balance, beginning of period | $ 8,480 | $ 10,000 |
Draws | 9,900 | 19,935 |
Repayments | (8,480) | (21,455) |
Balance, ending of period | 9,900 | 8,480 |
Line of credit - average daily balance | $ 8,479 | $ 7,941 |
Line of Credit - Additional Inf
Line of Credit - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Short Term Debt [Line Items] | ||
Line of credit facility, maximum amount outstanding during period | $ 10,000,000 | |
Line of credit facility, description | has the option prior at maturity date to convert – for a fee of one-quarter of one percent (0.25%) – the then outstanding principal balance to a two-year term loan maturing in March 2026. | |
Line of credit facility, description | interest on outstanding principal was payable monthly and accrued 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 | 7.14% | |
Average period of Extension of loan | 11 months | 12 months |
Pledged loans, principal amount | $ 24,500,000 | $ 20,500,000 |
Debt issuance costs | 57,000 | 0 |
Amortization of debt issuance costs | 35,000 | 55,000 |
Maximum [Member] | ||
Short Term Debt [Line Items] | ||
Line of credit facility, maximum amount outstanding during period | 10,000,000 | |
Pledged loans, advance amount | 10,000,000 | $ 10,000,000 |
Minimum [Member] | ||
Short Term Debt [Line Items] | ||
Line of credit facility, maximum amount outstanding during period | $ 10,000,000 | |
Revolving Credit Facility [Member] | ||
Short Term Debt [Line Items] | ||
Line of credit facility, interest rate | 5% | |
Compensating balance, minimum | $ 1,000,000 | |
Interest on non maintenance of compensating balance | 0.25% | |
Line of credit facility, average rate | 50% | |
Line of credit facility, unused line of fee | 0.50% | |
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||
Short Term Debt [Line Items] | ||
Line of credit facility, interest rate | 3.25% | |
Revolving Credit Facility [Member] | Ameribor | ||
Short Term Debt [Line Items] | ||
Line of credit facility, interest rate | 3.25% | |
Revolving Credit Facility [Member] | Reference Rate [Member] | ||
Short Term Debt [Line Items] | ||
Line of credit facility, interest rate | 3.25% | |
Debt Instrument, Term | 2 years | |
Line Of Credit [Member] | Financial Asset, 61 Days Past Due [Member] | ||
Short Term Debt [Line Items] | ||
Loan payment, quarterly | 10% | |
Line Of Credit [Member] | Maximum [Member] | ||
Short Term Debt [Line Items] | ||
Debt service coverage ratio | 2 | |
Line Of Credit [Member] | Minimum [Member] | ||
Short Term Debt [Line Items] | ||
Minimum tangible net worth | $ 50,000,000 | |
Debt service coverage ratio | 1 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Event [Line Items] | |
Subsequent Event Description | The manager evaluated events occurring subsequent to December 31, 2022 and determined that there were no events or transactions occurring during this reporting period that require recognition or disclosure in the financial statements. |
Line of credit facility, interest rate | 7.14% |
Maximum Percentage of Weighted Average Number of Members Outstanding Units During Twelve Months for Redemption | 5% |
Revolving Credit Facility [Member] | |
Subsequent Event [Line Items] | |
Line of credit facility, interest rate | 5% |
Revolving Credit Facility [Member] | Ameribor | |
Subsequent Event [Line Items] | |
Line of credit facility, interest rate | 3.25% |