Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2019shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Sep. 30, 2019 |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | Q3 |
No Trading Symbol Flag | true |
Entity Registrant Name | Redwood Mortgage Investors IX |
Entity Central Index Key | 0001448038 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | false |
Entity Common Stock, Shares Outstanding | 0 |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Shell Company | false |
Document Quarterly Report | true |
Document Transition Report | false |
Entity File Number | 000-55601 |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 26-3541068 |
Entity Address, Address Line One | 177 Bovet Road |
Entity Address, Address Line Two | Suite 520 |
Entity Address, City or Town | San Mateo |
Entity Address, State or Province | CA |
Entity Address, Postal Zip Code | 94402 |
City Area Code | 650 |
Local Phone Number | 365-5341 |
Balance Sheets
Balance Sheets - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
ASSETS | ||
Cash and cash equivalents | $ 1,174,966 | $ 10,674,953 |
Loans | ||
Principal | 73,632,874 | 62,115,713 |
Advances | 12,369 | 21,041 |
Accrued interest | 536,731 | 473,966 |
Prepaid interest | (21,000) | |
Loan balances secured by deeds of trust | 74,160,974 | 62,610,720 |
Other receivable | 234 | |
Total assets | 75,336,174 | 73,285,673 |
LIABILITIES, INVESTORS IN APPLICANT STATUS, AND MEMBERS’ CAPITAL | ||
Accounts payable and accrued liabilities | 42,098 | 9,321 |
Payable to affiliate | 43,467 | |
Total liabilities | 85,565 | 9,321 |
Commitments and contingencies (Note 5) | ||
Investors in applicant status | 651,500 | |
Members’ capital, net | 79,568,327 | 76,804,195 |
Receivable from manager (formation loan) | (4,317,718) | (4,179,343) |
Members’ capital, net, less formation loan | 75,250,609 | 72,624,852 |
Total liabilities, investors in applicant status and members’ capital | $ 75,336,174 | $ 73,285,673 |
Statements of Income (Unaudited
Statements of Income (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenues, net | ||||
Interest income | $ 1,526,142 | $ 1,305,044 | $ 4,405,007 | $ 3,798,691 |
Late fees | 18,162 | 4,773 | 44,789 | 15,015 |
Gain on sale, loans | 20,833 | 20,833 | 14,246 | |
Total revenues | 1,565,137 | 1,309,817 | 4,470,629 | 3,827,952 |
Operations expense | ||||
Mortgage servicing fees | 40,450 | 36,266 | 122,010 | 110,144 |
Asset management fees, net (Note 3) | 119,187 | 158,916 | ||
Professional services, net (Note 3) | 178,752 | 90,957 | 404,927 | 179,855 |
Other | 19 | 1,442 | 24,757 | 9,939 |
Total operations expense | 338,408 | 128,665 | 710,610 | 299,938 |
Net income | 1,226,729 | 1,181,152 | 3,760,019 | 3,528,014 |
Members (99%) | 1,214,462 | 1,169,341 | 3,722,419 | 3,492,734 |
Manager (1%) | $ 12,267 | $ 11,811 | $ 37,600 | $ 35,280 |
Statements of Income (Parenthet
Statements of Income (Parenthetical) (Unaudited) - Redwood Mortgage Investors IX [Member] | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Members investment | 99.00% | 99.00% | 99.00% | 99.00% |
Manager investment | 1.00% | 1.00% | 1.00% | 1.00% |
Statement of Changes in Members
Statement of Changes in Members' Capital (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | 120 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | ||
Beginning balance | $ 72,624,852 | |||||
Net income | $ 1,226,729 | $ 1,181,152 | 3,760,019 | $ 3,528,014 | ||
Early withdrawal penalties | [1] | 19,415 | $ 60,290 | |||
Ending balance | 75,250,609 | 75,250,609 | 75,250,609 | |||
RMC [Member] | ||||||
Early withdrawal penalties | 6,611 | 10,175 | 67,695 | 14,143 | ||
Investors In Applicant Status [Member] | ||||||
Beginning balance | 1,300,160 | 651,500 | 3,270,312 | |||
Early withdrawal penalties | 0 | 0 | 0 | |||
Ending balance | 1,349,575 | 1,349,575 | ||||
Investors In Applicant Status [Member] | Contributions On Application [Member] | ||||||
Partners capital accounts | 1,977,425 | 2,666,508 | 9,385,023 | |||
Investors In Applicant Status [Member] | Contributions Admitted To Members Capital [Member] | ||||||
Partners capital accounts | (1,944,110) | (3,318,008) | (11,315,105) | |||
Investors In Applicant Status [Member] | Premiums Paid On Application By RMC [Member] | ||||||
Partners capital accounts | 19,950 | 12,355 | 52,990 | |||
Investors In Applicant Status [Member] | Premiums Admitted To Members Capital [Member] | ||||||
Partners capital accounts | (3,850) | (12,355) | (43,645) | |||
Capital Members [Member] | ||||||
Beginning balance | 81,934,546 | 76,346,119 | 79,198,453 | 66,450,424 | ||
Net income | 1,214,462 | 1,169,341 | 3,722,419 | 3,492,734 | ||
Organization and offering expenses allocated | (85,485) | (79,027) | (247,975) | (223,715) | ||
Early withdrawal penalties | 0 | 0 | 0 | |||
Ending balance | 81,759,674 | 78,072,973 | 81,759,674 | 78,072,973 | 81,759,674 | |
Capital Members [Member] | Contributions Admitted To Members Capital [Member] | ||||||
Partners capital accounts | 1,944,110 | 3,318,008 | 11,315,105 | |||
Capital Members [Member] | Premiums Admitted To Members Capital [Member] | ||||||
Partners capital accounts | 3,850 | 12,355 | 43,645 | |||
Capital Members [Member] | Earnings Distributed To Members [Member] | ||||||
Partners capital accounts | (1,147,807) | (1,137,066) | (3,375,675) | (3,315,986) | ||
Capital Members [Member] | Earnings Distributed Used In DRIP [Member] | ||||||
Partners capital accounts | 604,814 | 613,170 | 1,808,995 | 1,800,930 | ||
Capital Members [Member] | Member's Redemptions [Member] | ||||||
Partners capital accounts | (760,856) | (787,524) | (2,676,906) | (1,490,164) | ||
Managers Capital Net [Member] | ||||||
Beginning balance | 153,864 | 97,091 | 125,200 | 102,902 | ||
Net income | 12,267 | 11,811 | 37,600 | 35,280 | ||
Early withdrawal penalties | 0 | 0 | 0 | |||
Ending balance | 166,131 | 110,850 | 166,131 | 110,850 | 166,131 | |
Managers Capital Net [Member] | Contributions Admitted To Members Capital [Member] | ||||||
Partners capital accounts | 1,948 | 3,331 | 11,358 | |||
Managers Capital Net [Member] | Earnings Distributed To Members [Member] | ||||||
Partners capital accounts | (38,690) | |||||
Unallocated Organization and Offering Expenses [Member] | ||||||
Beginning balance | (2,460,386) | (2,590,122) | (2,519,458) | (2,335,325) | ||
Organization and offering expenses | (92,543) | (185,332) | (514,933) | |||
Organization and offering expenses allocated | 85,485 | 79,027 | 247,975 | 223,715 | ||
Early withdrawal penalties | 4,179 | 19,415 | 5,754 | |||
Ending balance | (2,357,478) | (2,580,853) | (2,357,478) | (2,580,853) | (2,357,478) | |
Unallocated Organization and Offering Expenses [Member] | RMC [Member] | ||||||
Organization and offering expenses repaid by RMC | 17,423 | 79,922 | ||||
Unallocated Organization and Offering Expenses [Member] | Manager Reimbursement [Member] | ||||||
Partners capital accounts | 18,606 | 39,936 | ||||
Members Capital, Net [Member] | ||||||
Beginning balance | 79,628,024 | 73,853,088 | 76,804,195 | 64,218,001 | ||
Net income | 1,226,729 | 1,181,152 | 3,760,019 | 3,528,014 | ||
Organization and offering expenses | (92,543) | (185,332) | (514,933) | |||
Early withdrawal penalties | 4,179 | 19,415 | 5,754 | |||
Ending balance | 79,568,327 | 75,602,970 | 79,568,327 | 75,602,970 | $ 79,568,327 | |
Members Capital, Net [Member] | RMC [Member] | ||||||
Organization and offering expenses repaid by RMC | 17,423 | 79,922 | ||||
Members Capital, Net [Member] | Contributions Admitted To Members Capital [Member] | ||||||
Partners capital accounts | 1,946,058 | 3,321,339 | 11,326,463 | |||
Members Capital, Net [Member] | Premiums Admitted To Members Capital [Member] | ||||||
Partners capital accounts | 3,850 | 12,355 | 43,645 | |||
Members Capital, Net [Member] | Earnings Distributed To Members [Member] | ||||||
Partners capital accounts | (1,147,807) | (1,137,066) | (3,375,675) | (3,354,676) | ||
Members Capital, Net [Member] | Earnings Distributed Used In DRIP [Member] | ||||||
Partners capital accounts | 604,814 | 613,170 | 1,808,995 | 1,800,930 | ||
Members Capital, Net [Member] | Member's Redemptions [Member] | ||||||
Partners capital accounts | $ (760,856) | (787,524) | $ (2,676,906) | (1,490,164) | ||
Members Capital, Net [Member] | Manager Reimbursement [Member] | ||||||
Partners capital accounts | $ 18,606 | $ 39,936 | ||||
[1] | Prior to June 30, 2019, early withdrawal penalties collected were applied to the next installment of principal due under the formation loan and to reduce the amount owed to RMC for O&O expenses. The amounts credited were be determined by the ratio between the amount of the formation loan and the amount of offering costs incurred by the company. |
Statements of Cash Flows (Unaud
Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Operations | ||
Interest income received | $ 4,307,297 | $ 3,610,914 |
Other loan revenue received | 45,289 | 14,267 |
Loan administrative fee reimbursed | 3,130 | |
Operations expense | (635,059) | (275,295) |
Total cash provided by operations | 3,717,527 | 3,353,016 |
Investing – loans | ||
Loans originated | (53,073,200) | (50,614,250) |
Loans sold to non-affiliate, net | 4,994,818 | 14,163,158 |
Loans transferred from affiliates | (5,889,819) | |
Principal collected | 36,646,053 | 31,007,578 |
Advances received (made) on loans | 618 | (2,251) |
Total cash used in investing | (11,431,711) | (11,335,584) |
Contributions by members, net | ||
Organization and offering expenses paid, net | (105,410) | (474,996) |
Formation loan funding | (186,656) | (707,941) |
Total cash provided by members, net | 2,390,088 | 8,266,388 |
Distributions to members | ||
Distributions to members | (4,175,891) | (3,043,910) |
Total cash (used in) provided by financing | (1,785,803) | 5,222,478 |
Net decrease in cash | (9,499,987) | (2,760,090) |
Cash, beginning of period | 10,674,953 | 8,509,852 |
Cash, September 30, | 1,174,966 | 5,749,762 |
Net income | 3,760,019 | 3,528,014 |
Adjustments to reconcile net income to net cash provided by operating activities | ||
(Gain) on sale, loans | (20,833) | (14,246) |
Amortization of loan administrative fees | 4,530 | |
Change in operating assets and liabilities | ||
Prepaid interest | 21,000 | |
Accrued interest | (118,710) | (192,308) |
Loan administrative fees reimbursed | 3,130 | |
Accounts payable and accrued liabilities | 76,285 | 11,000 |
Other | (234) | 12,896 |
Total adjustments | (42,492) | (174,998) |
Total cash provided by operations | 3,717,527 | 3,353,016 |
Members Equity Contributions [Member] | ||
Contributions by members, net | ||
Contributions by members/manager | 2,682,154 | 9,449,325 |
Earnings Distributed To Members [Member] | ||
Distributions to members | ||
Distributions to members | (1,566,680) | (1,553,746) |
Member's Redemptions [Member] | ||
Distributions to members | ||
Distributions to members | $ (2,609,211) | $ (1,490,164) |
Statements of Cash Flows (Paren
Statements of Cash Flows (Parenthetical) (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Statement Of Cash Flows [Abstract] | ||
Non cash financing activity in early withdrawal penalties | $ 67,695 | $ 14,143 |
Organization and General
Organization and General | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Organization and General | NOTE 1 – ORGANIZATION AND GENERAL In the opinion of the management of Redwood Mortgage Corp. (RMC or the manager), the accompanying unaudited financial statements contain all adjustments, consisting of normal, recurring adjustments, necessary to present fairly the financial information included therein. These financial statements should be read in conjunction with the audited financial statements included in the company’s Form 10-K for the year ended December 31, 2018, filed with the U.S. Securities and Exchange Commission (SEC). The results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the operations results to be expected for the full year. 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 RMC. The manager is solely responsible for managing the business and affairs of RMI IX, 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. The rights, duties and powers of the members and manager of the company are governed by the Ninth Amended and Restated Limited Liability Company Operating Agreement of RMI IX (the “Operating Agreement”), the Delaware Limited Liability Company Act and the California Revised Uniform Limited Liability Company Act. 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 company’s Operating Agreement for complete disclosure of its provisions. 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. 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; • payments from RMC on the outstanding balance of the formation loan; • sale of units to members participating in the dividend reinvestment plan and – prior to May 2019 – sale of units net of reimbursement to RMC of organization and offering expenses (“O&O expenses”) and net of amounts advanced for the formation loan to RMC; • loan sales to unaffiliated 3 rd • a line of credit, if obtained. 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 affiliates; however, any loan sold to the manager or an affiliate thereof will be sold in an arm’s length transaction and 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 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. Net income (losses) are allocated monthly among the members according to their respective capital accounts after one percent (1%) of the net income (losses) are allocated to the manager. The monthly results are subject to subsequent adjustment as a result of quarterly and year-end accounting and reporting. Investors should not expect the company to provide tax benefits of the type commonly associated with limited liability company tax shelter investments. Federal and state income taxes are the obligation of the members, if and when taxes apply, other than the annual California franchise tax and the California LLC cash receipts taxes paid by the company. 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. Distribution policy 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 available for distribution 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. Per the terms of the company’s Operating Agreement, cash available for distribution to the members is allocated among the members in proportion to their percentage interests (except with respect to differences in the amounts of O&O expenses allocated to the respective members during the applicable period) and in proportion to the number of days during the applicable month that they owned such percentage interests. See Note 3 (Manager and Other Related Parties) to the financial statements for a detailed discussion on the allocation of O&O expenses to members’ accounts. Cash available for distributions allocable to members, other than those participating in the distribution reinvestment plan (DRIP) and the manager, is distributed at the end of each calendar month. Cash available for distribution allocable to members who participate in the DRIP is used to purchase additional units at the end of each calendar month. The manager’s allocable share of cash available for distribution is also distributed not more frequently than with cash distributions to members. To determine the amount of cash to be distributed in any specific month, the company relies in part on its forecast of full year profits, which takes into account the difference between the forecasted and actual results in the year and the requirement to maintain a cash reserve. 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; • the timing and amount of gains received from loan sales, if any; • payment of fees and cost reimbursements to RMC; • the amount and timing of other operating expenses, including expenses for professional services; • financial support, if any, from RMC; • payments from RMC on the outstanding balance of the formation loan; and, • a line of credit, if obtained. Financial Support from RMC Since commencement of operations in 2009, RMC, at its sole discretion, has provided significant financial support to the company which increased the net income, cash available for distribution, and the net-distribution rate, by: • charging less than the maximum allowable fees; • not requesting reimbursement of qualifying costs attributable to the company (“Costs from RMC” on the Statements of Income); and/or, • absorbing some, and in certain periods, all of the company’s direct expenses, such as professional fees. Such fee and cost-reimbursement waivers and the absorption of the company’s expenses by RMC were not made for the purpose of providing the company 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. Any decision to waive fees or cost-reimbursements and/or to absorb direct expenses, and the amount (if any) to be waived or absorbed, is made by RMC in its sole discretion. This support increased the company’s financial performance and resulted in an annual 6.5% net distribution rate (6.95% before O&O expenses allocation of 0.45% when applicable) for periods prior to February 28, 2018. In April 2018, RMI IX began paying its direct expenses for professional-service fees (legal and audit/tax compliance) and other operating expenses (postage, printing etc.), and in September 2019, and for the nine months year to date, paid its fees to an independent service bureau for computer processing services relating to the recordkeeping and reporting for the accounts of individual investors. In June 2019, RMC began collection of the asset management fee of three quarters of one percent annually (0.75%), and plans to commence collection of reimbursements of costs from RMC in 2020. Liquidity and unit redemption program There are substantial restrictions on transferability of units, and there is no established public trading and/or secondary market for the units and none is expected to develop. In order to provide liquidity to members, the company’s Operating Agreement includes a unit redemption program, whereby beginning one year from the date of purchase of the units, a member may redeem all or part of their units, subject to certain limitations. The price paid for redeemed units is based on the lesser of the purchase price paid by the redeeming member or the member’s capital account balance as of the date of each redemption payment. Redemption value is calculated based on the period from date of purchase as follows: • after one year, 92% of the purchase price or of the capital account balance, whichever is less; • after two years, 94% of the purchase price or of the capital account balance, whichever is less; • after three years, 96% of the purchase price or of the capital account balance, whichever is less; • after four years, 98% of the purchase price or of the capital account balance, whichever is less; • after five years, 100% of the purchase price or of the capital account balance, whichever is less. The company redeems units quarterly, subject to certain limitations as provided for in the Operating Agreement. The maximum number of units which may be redeemed per quarter per individual member shall not exceed the greater of (i) 100,000 units, or (ii) 25% of the member’s total outstanding units. For redemption requests requiring more than one quarter to fully redeem, the percentage discount amount if any, that applies when the redemption payments begin continues to apply throughout the redemption period and applies to all units covered by such redemption request regardless of when the final redemption payment is made. The company has not established a cash reserve from which to fund redemptions. The company’s capacity to redeem units upon request is limited by the availability of cash and the company’s cash flow. As provided in the Operating Agreement, the company will not, in any calendar year, redeem more than five percent (5%) of the weighted average number of units outstanding during the twelve-month period immediately prior to the date of the redemption. In the event unit withdrawal requests exceed 5% in any calendar year, units will be redeemed in the order of priority provided in the Operating Agreement. Contributed capital Prior to April 30, 2019, the manager was required to contribute to capital one tenth of one percent (0.1%) of the aggregate capital accounts of the members. Manager’s interest If a manager is removed, withdrawn or terminated, the company will pay to the manager all amounts then accrued and owing 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. The formation loan is forgiven if the manager is removed and RMC is no longer receiving payments for services rendered. Distribution reinvestment plan (DRIP)/Unit sales Members of record as of April 30, 2019, that previously elected to participate in the DRIP or that provide written notice to the manager may elect to participate in the DRIP, in those states in which approval has been obtained. On May 9, 2019, the company filed a Registration Statement on Form S-3 with the SEC (SEC File No. 333-231333) to offer up to 15,000,000 units ($15,000,000) to members of record as of April 30, 2019 that had previously elected to participate in the DRIP or that elect to participate in the DRIP. The Registration Statement on Form S-3 became effective on May 9, 2019. As of September 30, 2019, the gross proceeds from sales of units to our members under our DRIP pursuant to the May 9, 2019 Form S-3 Registration Statement was approximately $1,008,000. The company’s Registration Statement on Form S-11 filed with the SEC in June 2016 (SEC File No. 333-208315) to offer up to 120,000,000 units ($120,000,000) to the public and 20,000,000 units ($20,000,000) to its members pursuant to the DRIP, was not renewed in 2019 and the offering expired April 30, 2019. On June 11, 2019, the company filed a Post-Effective Amendment No. 5 with the SEC (SEC File No. 333-208315) to deregister all of the units which were registered under its Form S-11 Registration Statement that remained unsold as of April 30, 2019. The company uses the gross proceeds from the sale of the units to: • make additional loans; • fund working capital reserves; • pay RMC up to 4.5% of proceeds from sale of units for O&O expenses, excluding units sold in the DRIP; and • fund a formation loan to RMC at up to 7% of proceeds from sale of units, excluding units sold in the DRIP. Unit sales – commissions paid to broker-dealers/formation loan Commissions for unit sales were previously paid to broker-dealers (B/D sales commissions) by RMC and were not paid directly by the company out of offering proceeds. Instead, the company advanced to RMC, from offering proceeds, amounts sufficient to pay the B/D sales commissions and premiums paid to investors up to 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.” RMC is required to make annual payments on the formation loan in the amount of one tenth of the principal balance outstanding at December 31 of the prior year. Term of the company The term of the company will continue until 2028, unless sooner terminated as provided in the Operating Agreement. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Management estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions about the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities, at the dates of the financial statements and the reported amounts of revenues and expenses during the reported periods. Such estimates relate principally to the determination of the allowance for loan losses, including, when applicable, the valuation of impaired loans (which itself requires determining the fair value of the collateral), and the valuation of real estate held for sale and held as investment, at acquisition and subsequently. Actual results could differ significantly from these estimates. Fair value estimates GAAP defines fair value as the exchange 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 the collateral 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 investment 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, such as, determining highest and best use (which may or may not be the current use); determining the condition (e.g., as-is, when-completed or for land when-entitled); and determining the unit of value (e.g., as a series of individual unit sales or as a bulk disposition). Management has the requisite familiarity with the real estate markets it lends in generally and of the properties lent on specifically 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 and cash equivalents The company considers all highly liquid financial instruments with maturities of three months or less at the time of purchase to be cash equivalents. At September 30, 2019, certain of the company’s cash balances in banks exceed federally insured limits of $250,000. The bank or banks in which funds are deposited are reviewed periodically for their general credit-worthiness/investment grade credit rating. Loans and interest income Performing loans are carried at amortized cost which is generally equal to the unpaid principal balance (principal). Management has discretion to pay amounts (advances) to third parties on behalf of borrowers to protect the company’s interest in the loan. Advances include, but are not limited to, the payment of interest and principal on a senior lien to prevent foreclosure by the senior lien holder, property taxes, insurance premiums and attorney fees. Advances generally are stated at the amounts paid out on the borrower’s behalf and any accrued interest on amounts paid out, until repaid by the borrower. For performing loans, interest is accrued daily on the principal plus advances, if any. Non-performing loans (i.e., loans with a payment in arears) less than 180 days delinquent continue to recognize interest income as long as the loan is in the process of collection and is considered to be well-secured. Non-performing loans are placed on non-accrual status if 180 days delinquent or earlier if management determines that the primary source of repayment will come from the foreclosure and subsequent sale of the collateral securing the loan (which usually occurs when a notice of sale is filed) or when the loan is no longer considered well-secured. When a loan is placed on non-accrual status, the accrual of interest is discontinued; 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 origination net of an interest reserve (one to two years) to insure timely interest payments at the inception of the loan. 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 operations, loans that mature may be renewed at then current market rates and terms for new loans. Such renewals are not designated as impaired, unless the renewed loan was previously designated as impaired. From time to time, the manager negotiates and enters into loan modifications with borrowers whose loans are delinquent. If 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. The company originates loans with the intent to hold the loans until maturity. From time to time the company may sell certain loans. 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. In 2019 and 2018 certain performing loans were sold at an immaterial gain (net of expenses). As a result, the recorded amount of the performing loans (i.e., the loan balance) and the loan balance of loans designated impaired for which a specific reserve has not been recorded because the loan is well collateralized and management has determined that collection of the amount owed is assured, are deemed to approximate fair value. 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 events or changes in circumstances cause management to have serious doubts about the collectability of the payments of interest and principal in accordance with the loan agreement, a loan may be designated as impaired. Impaired loans are included in management’s periodic analysis of recoverability. Payments on impaired loans are applied to late fees, then to the accrued interest, then to advances, and lastly to principal. For loans designated impaired, a provision is made for loan losses to adjust the allowance for loan losses to an amount such that the net carrying amount (unpaid principal 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 in arriving at net realizable value and net of any senior loans. The company charges off uncollectible loans and related receivables directly to the allowance account once it is determined the full amount is not collectible. At foreclosure, any excess of the recorded investment in the loan (accounting basis) over the net realizable value is charged against the allowance for loan losses. Real estate owned (REO) Real estate owned, or REO, is property acquired in full or partial settlement of loan obligations generally through foreclosure, and is recorded at acquisition at the property’s net realizable value, which is the fair value less estimated costs to sell, as applicable. The fair value estimates are derived from information available in the real estate markets including similar property, and often require the experience and judgment of third parties such as commercial real estate appraisers and brokers. The estimates figure materially in calculating the value of the property at acquisition, the level of charge to the allowance for loan losses and any subsequent valuation reserves. After acquisition, costs incurred relating to the development and improvement of property are capitalized to the extent they do not cause the recorded value to exceed the net realizable value, whereas costs relating to holding and disposition of the property are expensed as incurred. After acquisition, 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 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. Recently issued accounting pronouncements -Accounting and Financial reporting for Expected Credit Losses The Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) that significantly changes how entities will account for credit losses for most financial assets that are not measured at fair value through net income. The new standard will supersede currently in effect guidance and applies to all entities. Entities will be required to use a current expected credit loss (CECL) model to estimate credit impairment. This estimate will be forward-looking, meaning management will be required to use forecasts about future economic conditions to determine the expected credit loss over the remaining life of an instrument. This will be a significant change from the current incurred credit loss model, and generally may result in allowances being recognized in earlier periods than under the current credit loss model. The ASU is effective for smaller reporting companies for interim and annual reporting periods in 2023. RMI IX invests in real estate secured loans made with the expectation that the possibility of credit losses is remote as a result of substantial protective equity provided by the underlying collateral. The real estate secured programs and low loan-to-value ratios have caused RMC to expect that the adoption of the CECL model from the incurred loss models presently in use as to credit loss recognition will likely not materially impact the reported results of operations or financial position. |
Manager and Other Related Parti
Manager and Other Related Parties | 9 Months Ended |
Sep. 30, 2019 | |
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, as detailed below. RMC is entitled to 1% of the profits and losses of the company. Loan administrative fees and operating expenses, including fees and cost reimbursements waived and/or expenses absorbed by RMC, for the three months ended September 30, 2019 are presented in the following table. Operating Expenses For the three months ended Loan Admin Fees Mortgage Servicing Fees Asset Management Fee Costs from RMC Professional Services (1) Other Total September 30, 2019 Chargeable/reimbursable $ 221,512 $ 40,450 $ 119,187 $ 151,061 $ 178,752 $ 19 $ 710,981 RMC support Waived (221,512 ) — — (151,061 ) — — (372,573 ) Expenses absorbed by RMC — — — — — — — Total RMC support (221,512 ) — — (151,061 ) — — (372,573 ) Net charged $ — $ 40,450 $ 119,187 $ — $ 178,752 $ 19 $ 338,408 1) In April 2018, RMI IX began paying its direct expenses for professional-service fees (legal and audit/tax compliance) and other operating expenses (postage, printing etc.), and in September 2019, and for the nine months year to date, paid its fees to an independent service bureau for computer processing services relating to the recordkeeping and reporting for the accounts of individual investors. Loan administrative fees and operating expenses, including fees and cost reimbursements waived and/or expenses absorbed by RMC, for the nine months ended September 30, 2019 are presented in the following table. Operating Expenses For the nine months ended Loan Admin Fees Mortgage Servicing Fees Asset Management Fee Costs from RMC Professional Services (2) Other Total September 30, 2019 Chargeable/reimbursable $ 530,732 $ 122,010 $ 357,561 $ 517,163 $ 404,927 $ 24,757 $ 1,957,150 RMC support Waived (530,732 ) — (198,645 ) (517,163 ) — — (1,246,540 ) Expenses absorbed by RMC — — — — — — — Total RMC support (530,732 ) — (198,645 ) (517,163 ) — — (1,246,540 ) Net charged $ — $ 122,010 $ 158,916 $ — $ 404,927 $ 24,757 $ 710,610 2) In April 2018, RMI IX began paying its direct expenses for professional-service fees (legal and audit/tax compliance) and other operating expenses (postage, printing etc.), and in September 2019, and for the nine months year to date, paid its fees to an independent service bureau for computer processing services relating to the recordkeeping and reporting for the accounts of individual investors. Loan administrative fees and operating expenses, including fees and cost reimbursements waived and/or expenses absorbed by RMC, for the three months ended September 30, 2018 are presented in the following table. Operating Expenses For the three months ended Loan Admin Fees Mortgage Servicing Fees Asset Management Fee Costs from RMC Professional Services Other Total September 30, 2018 Chargeable/reimbursable $ 240,738 $ 36,266 $ 104,955 $ 186,523 $ 90,957 $ 1,442 $ 660,881 RMC support Waived (240,738 ) — (104,955 ) (186,523 ) — — (532,216 ) Expenses absorbed by RMC — — — — — — — Total RMC support (240,738 ) — (104,955 ) (186,523 ) — — (532,216 ) Net charged $ — $ 36,266 $ — $ — $ 90,957 $ 1,442 $ 128,665 Loan administrative fees and operating expenses, including fees and cost reimbursements waived and/or expenses absorbed by RMC, for the nine months ended September 30, 2018 are presented in the following table. Operating Expenses For the nine months ended Loan Admin Fees Mortgage Servicing Fees Asset Management Fee Costs from RMC Professional Services Other Total September 30, 2018 Chargeable/reimbursable $ 565,041 $ 110,144 $ 314,865 $ 548,530 $ 323,007 $ 24,185 $ 1,885,772 RMC support Waived (565,041 ) — (314,865 ) (548,530 ) — — (1,428,436 ) Expenses absorbed by RMC — — — — (143,152 ) (14,246 ) (157,398 ) Total RMC support (565,041 ) — (314,865 ) (548,530 ) (143,152 ) (14,246 ) (1,585,834 ) Net charged $ — $ 110,144 $ — $ — $ 179,855 $ 9,939 $ 299,938 Loan administrative fees RMC is entitled to receive a loan administrative fee in an amount up to one percent (1%) of the principal amount of each new loan originated or acquired on the company’s behalf by RMC for services rendered in connection with the selection and underwriting of potential loans. Such fees would be payable by the company upon the closing or acquisition of each loan. Since August 2015, RMC, at its sole discretion, waived and continues to waive, the loan administrative fees. Mortgage servicing fees The manager acting as servicing agent with respect to all loans is entitled to receive a servicing fee from the company of up to one-quarter of one percent (0.25%) annually of the unpaid principal balance of the loan portfolio or such lesser amount as is reasonable and customary in the geographic area where the property securing the mortgage is located. RMC is entitled to receive these fees regardless of whether specific mortgage payments are collected. 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 has been acquired by the company. Asset management fees The manager is entitled to receive a monthly asset management fee for managing the company’s portfolio 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. RMC elected to begin collecting asset management fees commencing June 1, 2019 and ongoing. Costs from RMC The manager is entitled to request reimbursement by the company for operations expense incurred on behalf of the company, including without limitation, accounting, tax and data processing, postage and preparation of reports to members and out-of-pocket general and administration expenses. Certain of these qualifying costs (e.g., postage) can be tracked by RMC as specifically attributable to the company. Other costs (e.g., RMC’s accounting and audit fees, legal fees and expenses, qualifying payroll expenses, occupancy, and insurance premium) are allocated on a pro-rata basis (e.g., by the company’s percentage of total capital of all mortgage funds managed by RMC). Payroll and consulting fees are allocated first based on activity, and then to the company on a pro-rata basis based on percentage of capital to the total capital of all affiliated mortgage funds managed by RMC. RMC, at its sole discretion, has elected to waive reimbursement for operating expenses during the three and nine months ended September 30, 2019 and 2018. Professional Services Professional services consist primarily of legal, audit and tax compliance, computer processing related to recordkeeping and reporting for individual investor accounts, and regulatory (including SEC/FINRA compliance) expenses. Prior to April 2018, RMC, at its sole discretion, had elected to absorb some or all of RMI IX’s expenses for professional services (and other operating expenses directly incurred by the company). Commissions and fees paid by the borrowers to RMC - Brokerage commissions, loan originations – For fees in connection with the review, selection, evaluation, negotiation and extension of loans, 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, and thus, are not an expense of the company. - Other fees – In the ordinary course of business, performing loans may be transferred by executed assignment, in-part or in-full, between the affiliated mortgage funds at par. During the nine months ended September 30, 2018, Redwood Mortgage Investors VIII, LP, an affiliated mortgage fund, transferred to the company two performing loans in-full at par value, which approximates fair value, of approximately $5,890,000. The company paid cash for the loans and the affiliated mortgage fund has no continuing obligation or involvement on the loans. No loans were transferred during the nine months ended September 30, 2019. Formation loan Formation loan transactions are presented in the following table. For the nine months ended Since Inception Balance, beginning of period $ 4,179,343 $ — Formation loan advances to RMC 186,656 5,626,566 Payments received from RMC — (1,199,716 ) Early withdrawal penalties applied (48,281 ) (109,132 ) Balance, September 30, 2019 $ 4,317,718 $ 4,317,718 Subscription proceeds since inception $ 80,256,995 Formation loan advance rate 7 % The future minimum payments on the formation loan, net of early withdrawal penalties, as of September 30, 2019 are presented in the following table. 2019 $ 369,654 2020 417,934 2021 417,934 2022 417,934 2023 417,934 Thereafter 2,276,328 Total $ 4,317,718 RMC is required to make annual payments on the formation loan, net of early withdrawal penalties, of one tenth of the principal balance outstanding at December 31 of the prior year. The formation loan is forgiven if the manager is removed and RMC is no longer receiving payments for services rendered. The primary source of repayment of the formation loan are loan brokerage commissions earned by RMC. Member capital withdrawals The table below presents the company’s unit redemptions for the three and nine months ended September 30, 2019 and 2018. Three months ended Nine months ended 2019 2018 2019 2018 Capital redemptions-without penalty $ 445,485 $ 635,218 $ 1,187,961 $ 1,211,085 Capital redemptions-subject to penalty 315,371 152,306 1,488,945 279,079 Total $ 760,856 $ 787,524 $ 2,676,906 $ 1,490,164 Early withdrawal penalties $ 6,611 $ 10,175 $ 67,695 $ 14,143 At September 30, 2019, scheduled future redemptions of members' capital was $578,981, all of which is scheduled for payment in 2019. Reimbursement and allocation of organization and offering expenses Per the Operating Agreement, the manager is reimbursed for, or the company may pay directly, O&O expenses incurred in connection with the organization of the company or offering of the units 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”), and the manager pays any O&O expenses in excess of the maximum O&O expenses. For each calendar quarter or portion thereof after December 31, 2015, that a member holds units (other than DRIP units) and for a maximum of forty (40) such quarters, a portion of the O&O expenses borne by the company is allocated to and debited from that member’s capital account in an annual amount equal to 0.45% of the member’s original purchase price for those units, in equal quarterly installments of 0.1125% each commencing with the later of the first calendar quarter of 2016 or the first full calendar quarter after a member’s purchase of units, and continuing through the quarter in which such units are redeemed. If at any time the aggregate O&O expenses actually paid or reimbursed by the company since inception are less than the maximum O&O expenses, the company shall first reimburse the manager for any O&O expenses previously borne by it so long as it does not result in the company bearing more than the maximum O&O expenses, and any savings thereafter remaining shall be equitably allocated among (and serve to reduce any such subsequent cost allocations to) those members who have not yet received forty (40) quarterly allocations of O&O expenses, as determined in the good faith judgment of the manager. Unallocated O&O transactions are summarized in the following table. 2019 Since Inception Balance, beginning of period $ 2,519,458 $ — O&O expenses reimbursed to RMC 185,332 3,671,853 Early withdrawal penalties applied (1) (19,415 ) (60,290 ) O&O expenses allocated (2) (247,975 ) (934,331 ) O&O expenses repaid to Members' Capital by RMC (3) (79,922 ) (319,754 ) Balance, September 30 $ 2,357,478 $ 2,357,478 (1) Prior to June 30, 2019, early withdrawal penalties collected were applied to the next installment of principal due under the formation loan and to reduce the amount owed to RMC for O&O expenses. The amounts credited were be determined by the ratio between the amount of the formation loan and the amount of offering costs incurred by the company. (2) Beginning in 2016, O&O expenses reimbursed to RMC by RMI IX are allocated to members’ capital accounts over 40 quarters. (3) RMC is obligated under the Operating Agreement to repay the company for unallocated O&O expenses attributed to units redeemed prior to the 40 quarterly allocations. RMC estimated its future obligations to repay unallocated O&O expenses on scheduled redemptions as of September 30, 2019, to be approximately $17,291, to be offset by early withdrawal penalties. |
Loans
Loans | 9 Months Ended |
Sep. 30, 2019 | |
Receivables [Abstract] | |
Loans | NOTE 4 – LOANS Loans generally are funded at a fixed interest rate with a loan term of up to five years. Loans acquired are generally done so within the first six months of origination, and purchased at the current par value, which approximates fair value. As of September 30, 2019, 77 of the company’s 79 loans (representing 99% of the aggregate principal of the company’s loan portfolio) have a loan term of five years or less. The remaining loans have terms longer than five years. Substantially all loans are written without a prepayment penalty provision. As of September 30, 2019, 54 loans outstanding (representing 46% of the aggregate principal of the company’s loan portfolio) provide for monthly payments of principal and interest, typically calculated on a 30-year amortization, with the remaining principal due at maturity. The remaining loans provide for monthly payments of interest only, with the principal due at maturity. Secured loans unpaid principal balance (principal) Secured loan transactions are summarized in the following table for the three and nine months ended September 30, 2019. For the three months ended For the nine months ended Principal, beginning of period $ 70,922,877 $ 62,115,713 Loans originated 22,151,200 53,073,200 Loans sold to non-affiliate (4,773,346 ) (4,909,986 ) Principal collected (14,667,857 ) (36,646,053 ) Principal September 30, 2019 $ 73,632,874 $ 73,632,874 Borrower payments are deposited into an independent bank trust account established and administered by RMC, pursuant to California regulation, and are subsequently disbursed to the company after an appropriate holding period to ensure the funds are collected. At September 30, 2019, there was $1,002,146, of borrower payments held in the RMC trust account, of which $905,525 was a loan payoff, which was distributed to the company on October 4, 2019. The amount remaining was fully disbursed to the company’s bank account by October 22, 2019. In September 2019, one loan with a principal balance of $500,000, that had been designated as impaired, was sold to an unaffiliated third party which specializes in the resolution of such loans. The loan was sold for $527,296, of which $22,403 was recognized as interest income, and $4,893 was repayment of outstanding advances, and no gain was recognized In July 2019 the company sold to an unaffiliated third party 8 loans with an aggregate principal balance of $4,273,346 and accrued interest of $31,830 at a price that netted an immaterial gain. In March 2019, one loan with a principal balance of $136,640, that had been designated as impaired and in non-accrual status, was sold to an unaffiliated third party. The loan was sold for $143,000, of which $1,711 was recognized as interest income, and $4,649 was repayment of outstanding advances, $10,791 in foregone interest, and no gain was recognized. During the three and nine months ended September 30, 2019, the company renewed five and six loans with aggregated principal of approximately$4,961,000 and $5,361,000, respectively. See Note 3 (Manager and Other Related Parties) for a description of loans transferred by executed assignments between affiliates. The company originates loans with the intent to hold the loans until maturity. Loan characteristics Secured loans had the characteristics presented in the following table. September 30, December 31, 2019 2018 Number of secured loans 79 83 Secured loans – principal $ 73,632,874 $ 62,115,713 Secured loans – lowest interest rate (fixed) 7.8 % 7.0 % Secured loans – highest interest rate (fixed) 10.5 % 10.5 % Average secured loan – principal $ 932,062 $ 748,382 Average principal as percent of total principal 1.3 % 1.2 % Average principal as percent of members’ capital, net 1.2 % 1.0 % Average principal as percent of total assets 1.2 % 1.0 % Largest secured loan – principal $ 6,735,000 $ 4,000,000 Largest principal as percent of total principal 9.1 % 6.4 % Largest principal as percent of members’ capital, net 8.5 % 5.2 % Largest principal as percent of total assets 8.9 % 5.5 % Smallest secured loan – principal $ 54,091 $ 74,390 Smallest principal as percent of total principal 0.1 % 0.1 % Smallest principal as percent of members’ capital, net 0.1 % 0.1 % Smallest principal as percent of total assets 0.1 % 0.1 % Number of California counties where security is located 18 15 Largest percentage of principal in one California county 28.5 % 25.0 % Number of secured loans with filed notice of default — 2 Secured loans in foreclosure – principal $ — $ 565,685 Number of secured loans with an interest reserve — — Interest reserves $ — $ — Number of secured loans with prepaid interest 1 — Prepaid interest $ 21,000 $ — As of September 30, 2019, the company’s largest loan with principal of $6,735,000 is secured by an office building located in Santa Clara County, bears an interest rate of 8.25% and matures on October 1, 2021. As of September 30, 2019, the company had no loans with filed notices of default. As of September 30, 2019, the company had no construction loans outstanding, no rehabilitation loans outstanding, and no commitments to fund construction or rehabilitation loans. Lien position Secured loans had the lien positions presented in the following table. September 30, 2019 December 31, 2018 Loans Principal Percent Loans Principal Percent First trust deeds 41 $ 42,569,199 58 % 41 $ 29,699,888 48 % Second trust deeds 38 31,063,675 42 42 32,415,825 52 Total principal, secured loans 79 73,632,874 100 % 83 62,115,713 100 % Liens due other lenders at loan closing 61,149,303 65,941,118 Total debt $ 134,782,177 $ 128,056,831 Appraised property value at loan closing $ 254,228,000 $ 240,307,000 Percent of total debt to appraised values (LTV) at loan closing (1) 56.5 % 54.5 % (1) Based on appraised values and liens due other lenders at loan closing. The weighted-average loan-to-value (LTV) computation above does not take into account subsequent increases or decreases in property values following the loan closing nor does it include decreases or increases of the amount owing on senior liens to other lenders. Property type Secured loans summarized by property type are presented in the following table. September 30, 2019 December 31, 2018 Loans Principal Percent Loans Principal Percent Single family (2) 53 $ 33,901,279 46 % 60 $ 42,967,253 69 % Multi-family 9 9,566,559 13 8 8,210,970 13 Commercial 17 30,165,036 41 15 10,937,490 18 Total principal, secured loans 79 $ 73,632,874 100 % 83 $ 62,115,713 100 % (2) Single family property type as of September 30, 2019 consists of 10 loans with principal of $6,528,442 that are owner occupied and 43 loans with principal of $27,372,837 that are non-owner occupied. At December 31, 2018, single family property consisted of 14 loans with principal of $11,398,869 that are owner occupied and 46 loans with principal of $31,568,384 that are non-owner occupied. Distribution of loans within California The distribution of secured loans by counties is presented in the following table. September 30, 2019 December 31, 2018 Principal Percent Principal Percent San Francisco Bay Area (3) Santa Clara $ 20,971,193 28.5 % $ 11,756,695 18.9 % San Mateo 11,964,218 16.2 9,619,609 15.5 San Francisco 6,397,988 8.6 5,238,008 8.4 Alameda 3,794,437 5.2 7,306,779 11.8 Solano 600,000 0.8 — — Marin 498,552 0.7 575,000 0.9 Contra Costa 348,000 0.5 725,771 1.2 Santa Cruz 265,000 0.4 — — Sonoma — — 1,300,000 2.1 44,839,388 60.9 36,521,862 58.8 Other Northern California Sutter 3,815,000 5.2 — — Monterey 1,110,000 1.5 322,716 0.5 Placer 628,858 0.9 637,354 1.0 Sacramento 189,863 0.2 822,500 1.3 5,743,721 7.8 1,782,570 2.8 Northern California Total 50,583,109 68.7 38,304,432 61.6 Los Angeles & Coastal Los Angeles 12,435,125 16.9 15,514,789 25.0 San Diego 4,988,294 6.8 5,563,635 9.0 Orange 2,850,595 3.8 1,177,446 1.9 Santa Barbara 498,751 0.7 — — 20,772,765 28.2 22,255,870 35.9 Other Southern California San Bernardino 1,200,000 1.6 1,200,000 1.9 Riverside 1,077,000 1.5 355,411 0.6 2,277,000 3.1 1,555,411 2.5 Southern California Total 23,049,765 31.3 23,811,281 38.4 Total principal, secured loans $ 73,632,874 100.0 % $ 62,115,713 100.0 % (3) Includes Silicon Valley Scheduled maturities Secured loans are scheduled to mature as presented in the following table as of September 30, 2019. Loans Principal Percent 2019 (4) 7 $ 3,972,546 5 % 2020 37 27,512,366 37 2021 23 36,812,129 50 2022 8 3,975,446 5 2023 2 347,494 1 Thereafter 1 247,000 1 Total future maturities 78 72,866,981 99 Matured as of September 30, 2019 1 765,893 1 Total principal, secured loans 79 $ 73,632,874 100 % (4) Loans scheduled to mature in 2019 from October 1 to December 31. Loans may be repaid or refinanced before, at or after the contractual maturity date. On matured loans, the company may continue to accept payments while pursuing collection of amounts owed from borrowers. Therefore, the above tabulation for scheduled maturities is not a forecast of future cash receipts. Matured loans Secured loans past maturity are summarized in the following table as of September 30, 2019. September 30, 2019 Number of loans 1 Principal $ 765,893 Advances 1,653 Accrued interest 21,062 Total recorded investment $ 788,608 Principal past maturity as percent of total principal 1 % The one loan past maturity at September 30, 2019, was 183 days delinquent and was designated as impaired and in non-accrual status. Delinquency Secured loans summarized by payment delinquency are presented in the following table. September 30, 2019 December 31, 2018 Loans Principal Loans Principal Past Due 30-89 days 3 $ 3,774,996 5 $ 3,828,975 90-179 days 2 440,398 — — 180 or more days 1 765,893 2 565,685 Total past due 6 4,981,287 7 4,394,660 Current 73 68,651,587 76 57,721,053 Total principal, secured loans 79 $ 73,632,874 83 $ 62,115,713 One loan with principal of approximately $765,800 matured on April 1, 2019 and was 183 days delinquent at September 30, 2019. The company entered into a forbearance agreement with the borrower in August 2019, whereby the borrower agreed to resume monthly payments and RMI IX agreed to forbear collection activity on the past due principal and interest until April 1, 2020. One loan with a principal balance of approximately $3,331,000 was 61 days delinquent at September 30, 2019. RMI IX entered into a forbearance agreement with the borrower in August 2019, whereby the company agreed to defer the interest payments due August 1, 2019, September 1, 2019 and October 1, 2019 and RMI IX agreed to forbear collection activity on the past due interest until August 1, 2020. One loan, with principal of approximately $191,000 matured on June 1, 2016, and the company entered into a workout agreement in September 2016, whereby the borrower agreed to resume monthly payments to RMI IX. This agreement extend the maturity date through October 1, 2021. The 2016 agreement was the successor to three prior agreements with the borrower, the first of which was dated August 5, 2011. The loan was 92 days delinquent and designated as impaired at September 30, 2019. One loan with principal of approximately $250,000 was 122 days delinquent, designated as impaired, and was not past maturity nor in non-accrual status at September 30, 2019. The remaining two delinquent loans, with an aggregate principal of $443,800, were 30 days delinquent and not designated as impaired or in non-accrual status. Loans in non-accrual status Secured loans in non-accrual status are summarized in the following table as of September 30, 2019 and December 31, 2018. September 30, 2019 December 31, 2018 Number of loans 1 2 Principal $ 765,893 $ 565,685 Advances 1,653 10,688 Accrued interest 21,062 19,831 Total recorded investment $ 788,608 $ 596,204 Foregone interest $ — $ 33,410 At September 30, 2019, two loans with aggregate principal of approximately $440,000 were 90 or more days delinquent and not in non-accrual status. No loans were 90 or more days delinquent and not in non-accrual status at December 31, 2018. Impaired loans/allowance for loan losses September 30, 2019 December 31, 2018 Principal $ 4,537,429 $ 3,841,148 Recorded investment (6) 4,664,076 3,950,157 Impaired loans without allowance 4,664,076 3,950,157 Impaired loans with allowance — — Allowance for loan losses, impaired loans (7) — — Number of loans 4 6 LTV 66.1 % 54.7 % (6) Recorded investment is the sum of the principal, advances, and interest accrued for financial reporting purposes. (7) The loans designated impaired for accounting purposes are well collateralized (i.e., their protective equity was such that collection was deemed probabl e for amounts owing) and there was no allowance for loan losses at September 30, 2019 and December 31, 2018 . Impaired loans had average balances and interest income recognized and received in cash as presented in the following tables as of and for the nine months ended September 30, 2019 and the year ended December 31, 2018. September 30, 2019 December 31, 2018 Average recorded investment $ 4,307,117 $ 2,050,897 Interest income recognized 313,717 23,848 Interest income received in cash 36,943 21,670 No loan payment modifications were made during the three and nine months ended September 30, 2019, and no modifications were in effect at September 30, 2019 and December 31, 2018. No allowance for loan losses has been recorded as all loans were deemed to have protective equity (i.e., low loan-to-value ratio) such that collection is reasonably assured for all amounts owing. Fair Value The following methods and assumptions are used when estimating fair value: Secured loans, performing (i.e., 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. The fair value of loan balances secured by deeds of trust is deemed to approximate the recorded amount (per the financial statements) as our loans: • are of shorter terms at origination than commercial real estate loans by institutional 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) - Secured loans designated impaired are deemed collateral dependent, and the fair value of the loan is the lesser of the fair value of the collateral or the enforceable amount owing under the note. The fair value of the collateral 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 (Level 3 inputs). Loans designated impaired that are deemed collateral dependent are measured at fair value on a non-recurring basis when the net realizable value of the real property collateral is determined to be less than the loan balance. The following methods and assumptions are used to determine the fair value of the collateral securing a loan. Single family – Management’s preferred method for determining the fair market value of its single-family residential assets is the sale comparison method. Management primarily obtains sale comps via its subscription to the RealQuest service, but also uses free online services such as Zillow.com and other available resources to supplement this data. Sale comps are reviewed 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. (Note: proceeds for loans secured by owner-occupied single-family residences are required to have been designated by the borrower as being used for business and/or investment purposes). 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 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 buildings – Where commercial rental income information is available, management’s preferred method for determining the fair value of its commercial real estate assets 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. Management supplements the direct capitalization method with additional information in the form of a sale comparison analysis (where adequate sale comps are available), brokers’ opinion of value, or appraisal. 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. 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. |
Commitments and Contingencies,
Commitments and Contingencies, Other Than Loan Commitments | 9 Months Ended |
Sep. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies, Other Than Loan Commitments | NOTE 5 – COMMITMENTS AND CONTINGENCIES, OTHER THAN LOAN COMMITMENTS Commitments At September 30, 2019, scheduled future redemptions of members' capital was $578,981, all of which is scheduled for payment in 2019. Legal proceedings 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. As of the date hereof, the company is not involved in any legal proceedings other than those that would be considered part of the normal course of business. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 6 – SUBSEQUENT EVENTS None. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of presentation The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). |
Management Estimates | Management estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions about the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities, at the dates of the financial statements and the reported amounts of revenues and expenses during the reported periods. Such estimates relate principally to the determination of the allowance for loan losses, including, when applicable, the valuation of impaired loans (which itself requires determining the fair value of the collateral), and the valuation of real estate held for sale and held as investment, at acquisition and subsequently. Actual results could differ significantly from these estimates. |
Fair Value Estimates | Fair value estimates GAAP defines fair value as the exchange 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 the collateral 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 investment 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, such as, determining highest and best use (which may or may not be the current use); determining the condition (e.g., as-is, when-completed or for land when-entitled); and determining the unit of value (e.g., as a series of individual unit sales or as a bulk disposition). Management has the requisite familiarity with the real estate markets it lends in generally and of the properties lent on specifically 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 and Cash Equivalents | Cash and cash equivalents The company considers all highly liquid financial instruments with maturities of three months or less at the time of purchase to be cash equivalents. At September 30, 2019, certain of the company’s cash balances in banks exceed federally insured limits of $250,000. The bank or banks in which funds are deposited are reviewed periodically for their general credit-worthiness/investment grade credit rating. |
Loans and Interest Income | Loans and interest income Performing loans are carried at amortized cost which is generally equal to the unpaid principal balance (principal). Management has discretion to pay amounts (advances) to third parties on behalf of borrowers to protect the company’s interest in the loan. Advances include, but are not limited to, the payment of interest and principal on a senior lien to prevent foreclosure by the senior lien holder, property taxes, insurance premiums and attorney fees. Advances generally are stated at the amounts paid out on the borrower’s behalf and any accrued interest on amounts paid out, until repaid by the borrower. For performing loans, interest is accrued daily on the principal plus advances, if any. Non-performing loans (i.e., loans with a payment in arears) less than 180 days delinquent continue to recognize interest income as long as the loan is in the process of collection and is considered to be well-secured. Non-performing loans are placed on non-accrual status if 180 days delinquent or earlier if management determines that the primary source of repayment will come from the foreclosure and subsequent sale of the collateral securing the loan (which usually occurs when a notice of sale is filed) or when the loan is no longer considered well-secured. When a loan is placed on non-accrual status, the accrual of interest is discontinued; 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 origination net of an interest reserve (one to two years) to insure timely interest payments at the inception of the loan. 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 operations, loans that mature may be renewed at then current market rates and terms for new loans. Such renewals are not designated as impaired, unless the renewed loan was previously designated as impaired. From time to time, the manager negotiates and enters into loan modifications with borrowers whose loans are delinquent. If 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. The company originates loans with the intent to hold the loans until maturity. From time to time the company may sell certain loans. 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. In 2019 and 2018 certain performing loans were sold at an immaterial gain (net of expenses). As a result, the recorded amount of the performing loans (i.e., the loan balance) and the loan balance of loans designated impaired for which a specific reserve has not been recorded because the loan is well collateralized and management has determined that collection of the amount owed is assured, are deemed to approximate fair value. |
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 events or changes in circumstances cause management to have serious doubts about the collectability of the payments of interest and principal in accordance with the loan agreement, a loan may be designated as impaired. Impaired loans are included in management’s periodic analysis of recoverability. Payments on impaired loans are applied to late fees, then to the accrued interest, then to advances, and lastly to principal. For loans designated impaired, a provision is made for loan losses to adjust the allowance for loan losses to an amount such that the net carrying amount (unpaid principal 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 in arriving at net realizable value and net of any senior loans. The company charges off uncollectible loans and related receivables directly to the allowance account once it is determined the full amount is not collectible. At foreclosure, any excess of the recorded investment in the loan (accounting basis) over the net realizable value is charged against the allowance for loan losses. |
Real Estate Owned (REO) | Real estate owned (REO) Real estate owned, or REO, is property acquired in full or partial settlement of loan obligations generally through foreclosure, and is recorded at acquisition at the property’s net realizable value, which is the fair value less estimated costs to sell, as applicable. The fair value estimates are derived from information available in the real estate markets including similar property, and often require the experience and judgment of third parties such as commercial real estate appraisers and brokers. The estimates figure materially in calculating the value of the property at acquisition, the level of charge to the allowance for loan losses and any subsequent valuation reserves. After acquisition, costs incurred relating to the development and improvement of property are capitalized to the extent they do not cause the recorded value to exceed the net realizable value, whereas costs relating to holding and disposition of the property are expensed as incurred. After acquisition, 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 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. |
Recently Issued Accounting Pronouncements | Recently issued accounting pronouncements -Accounting and Financial reporting for Expected Credit Losses The Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) that significantly changes how entities will account for credit losses for most financial assets that are not measured at fair value through net income. The new standard will supersede currently in effect guidance and applies to all entities. Entities will be required to use a current expected credit loss (CECL) model to estimate credit impairment. This estimate will be forward-looking, meaning management will be required to use forecasts about future economic conditions to determine the expected credit loss over the remaining life of an instrument. This will be a significant change from the current incurred credit loss model, and generally may result in allowances being recognized in earlier periods than under the current credit loss model. The ASU is effective for smaller reporting companies for interim and annual reporting periods in 2023. RMI IX invests in real estate secured loans made with the expectation that the possibility of credit losses is remote as a result of substantial protective equity provided by the underlying collateral. The real estate secured programs and low loan-to-value ratios have caused RMC to expect that the adoption of the CECL model from the incurred loss models presently in use as to credit loss recognition will likely not materially impact the reported results of operations or financial position. |
Manager and Other Related Par_2
Manager and Other Related Parties (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Summary of Loan Administrative Fees and Operating Expenses, for Fees and Cost Reimbursements Waived and Expenses Absorbed | Loan administrative fees and operating expenses, including fees and cost reimbursements waived and/or expenses absorbed by RMC, for the three months ended September 30, 2019 are presented in the following table. Operating Expenses For the three months ended Loan Admin Fees Mortgage Servicing Fees Asset Management Fee Costs from RMC Professional Services (1) Other Total September 30, 2019 Chargeable/reimbursable $ 221,512 $ 40,450 $ 119,187 $ 151,061 $ 178,752 $ 19 $ 710,981 RMC support Waived (221,512 ) — — (151,061 ) — — (372,573 ) Expenses absorbed by RMC — — — — — — — Total RMC support (221,512 ) — — (151,061 ) — — (372,573 ) Net charged $ — $ 40,450 $ 119,187 $ — $ 178,752 $ 19 $ 338,408 1) In April 2018, RMI IX began paying its direct expenses for professional-service fees (legal and audit/tax compliance) and other operating expenses (postage, printing etc.), and in September 2019, and for the nine months year to date, paid its fees to an independent service bureau for computer processing services relating to the recordkeeping and reporting for the accounts of individual investors. Loan administrative fees and operating expenses, including fees and cost reimbursements waived and/or expenses absorbed by RMC, for the nine months ended September 30, 2019 are presented in the following table. Operating Expenses For the nine months ended Loan Admin Fees Mortgage Servicing Fees Asset Management Fee Costs from RMC Professional Services (2) Other Total September 30, 2019 Chargeable/reimbursable $ 530,732 $ 122,010 $ 357,561 $ 517,163 $ 404,927 $ 24,757 $ 1,957,150 RMC support Waived (530,732 ) — (198,645 ) (517,163 ) — — (1,246,540 ) Expenses absorbed by RMC — — — — — — — Total RMC support (530,732 ) — (198,645 ) (517,163 ) — — (1,246,540 ) Net charged $ — $ 122,010 $ 158,916 $ — $ 404,927 $ 24,757 $ 710,610 2) In April 2018, RMI IX began paying its direct expenses for professional-service fees (legal and audit/tax compliance) and other operating expenses (postage, printing etc.), and in September 2019, and for the nine months year to date, paid its fees to an independent service bureau for computer processing services relating to the recordkeeping and reporting for the accounts of individual investors. Loan administrative fees and operating expenses, including fees and cost reimbursements waived and/or expenses absorbed by RMC, for the three months ended September 30, 2018 are presented in the following table. Operating Expenses For the three months ended Loan Admin Fees Mortgage Servicing Fees Asset Management Fee Costs from RMC Professional Services Other Total September 30, 2018 Chargeable/reimbursable $ 240,738 $ 36,266 $ 104,955 $ 186,523 $ 90,957 $ 1,442 $ 660,881 RMC support Waived (240,738 ) — (104,955 ) (186,523 ) — — (532,216 ) Expenses absorbed by RMC — — — — — — — Total RMC support (240,738 ) — (104,955 ) (186,523 ) — — (532,216 ) Net charged $ — $ 36,266 $ — $ — $ 90,957 $ 1,442 $ 128,665 Loan administrative fees and operating expenses, including fees and cost reimbursements waived and/or expenses absorbed by RMC, for the nine months ended September 30, 2018 are presented in the following table. Operating Expenses For the nine months ended Loan Admin Fees Mortgage Servicing Fees Asset Management Fee Costs from RMC Professional Services Other Total September 30, 2018 Chargeable/reimbursable $ 565,041 $ 110,144 $ 314,865 $ 548,530 $ 323,007 $ 24,185 $ 1,885,772 RMC support Waived (565,041 ) — (314,865 ) (548,530 ) — — (1,428,436 ) Expenses absorbed by RMC — — — — (143,152 ) (14,246 ) (157,398 ) Total RMC support (565,041 ) — (314,865 ) (548,530 ) (143,152 ) (14,246 ) (1,585,834 ) Net charged $ — $ 110,144 $ — $ — $ 179,855 $ 9,939 $ 299,938 |
Schedule of Accounts, Notes, Loans and Financing Receivable | Formation loan transactions are presented in the following table. For the nine months ended Since Inception Balance, beginning of period $ 4,179,343 $ — Formation loan advances to RMC 186,656 5,626,566 Payments received from RMC — (1,199,716 ) Early withdrawal penalties applied (48,281 ) (109,132 ) Balance, September 30, 2019 $ 4,317,718 $ 4,317,718 Subscription proceeds since inception $ 80,256,995 Formation loan advance rate 7 % |
Formation Loan, Future Minimum Payments Net of Early Withdrawal Penalties | The future minimum payments on the formation loan, net of early withdrawal penalties, as of September 30, 2019 are presented in the following table. 2019 $ 369,654 2020 417,934 2021 417,934 2022 417,934 2023 417,934 Thereafter 2,276,328 Total $ 4,317,718 |
Schedule of Unit Redemptions | The table below presents the company’s unit redemptions for the three and nine months ended September 30, 2019 and 2018. Three months ended Nine months ended 2019 2018 2019 2018 Capital redemptions-without penalty $ 445,485 $ 635,218 $ 1,187,961 $ 1,211,085 Capital redemptions-subject to penalty 315,371 152,306 1,488,945 279,079 Total $ 760,856 $ 787,524 $ 2,676,906 $ 1,490,164 Early withdrawal penalties $ 6,611 $ 10,175 $ 67,695 $ 14,143 |
Summary of Organization and Offering Expenses | Unallocated O&O transactions are summarized in the following table. 2019 Since Inception Balance, beginning of period $ 2,519,458 $ — O&O expenses reimbursed to RMC 185,332 3,671,853 Early withdrawal penalties applied (1) (19,415 ) (60,290 ) O&O expenses allocated (2) (247,975 ) (934,331 ) O&O expenses repaid to Members' Capital by RMC (3) (79,922 ) (319,754 ) Balance, September 30 $ 2,357,478 $ 2,357,478 (1) Prior to June 30, 2019, early withdrawal penalties collected were applied to the next installment of principal due under the formation loan and to reduce the amount owed to RMC for O&O expenses. The amounts credited were be determined by the ratio between the amount of the formation loan and the amount of offering costs incurred by the company. (2) Beginning in 2016, O&O expenses reimbursed to RMC by RMI IX are allocated to members’ capital accounts over 40 quarters. (3) RMC is obligated under the Operating Agreement to repay the company for unallocated O&O expenses attributed to units redeemed prior to the 40 quarterly allocations. RMC estimated its future obligations to repay unallocated O&O expenses on scheduled redemptions as of September 30, 2019, to be approximately $17,291, to be offset by early withdrawal penalties. |
Loans (Tables)
Loans (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Secured Loan Principal Transactions | Secured loan transactions are summarized in the following table for the three and nine months ended September 30, 2019. For the three months ended For the nine months ended Principal, beginning of period $ 70,922,877 $ 62,115,713 Loans originated 22,151,200 53,073,200 Loans sold to non-affiliate (4,773,346 ) (4,909,986 ) Principal collected (14,667,857 ) (36,646,053 ) Principal September 30, 2019 $ 73,632,874 $ 73,632,874 |
Secured Loans Characteristics | Secured loans had the characteristics presented in the following table. September 30, December 31, 2019 2018 Number of secured loans 79 83 Secured loans – principal $ 73,632,874 $ 62,115,713 Secured loans – lowest interest rate (fixed) 7.8 % 7.0 % Secured loans – highest interest rate (fixed) 10.5 % 10.5 % Average secured loan – principal $ 932,062 $ 748,382 Average principal as percent of total principal 1.3 % 1.2 % Average principal as percent of members’ capital, net 1.2 % 1.0 % Average principal as percent of total assets 1.2 % 1.0 % Largest secured loan – principal $ 6,735,000 $ 4,000,000 Largest principal as percent of total principal 9.1 % 6.4 % Largest principal as percent of members’ capital, net 8.5 % 5.2 % Largest principal as percent of total assets 8.9 % 5.5 % Smallest secured loan – principal $ 54,091 $ 74,390 Smallest principal as percent of total principal 0.1 % 0.1 % Smallest principal as percent of members’ capital, net 0.1 % 0.1 % Smallest principal as percent of total assets 0.1 % 0.1 % Number of California counties where security is located 18 15 Largest percentage of principal in one California county 28.5 % 25.0 % Number of secured loans with filed notice of default — 2 Secured loans in foreclosure – principal $ — $ 565,685 Number of secured loans with an interest reserve — — Interest reserves $ — $ — Number of secured loans with prepaid interest 1 — Prepaid interest $ 21,000 $ — |
Secured Loans by Lien Position in the Collateral | Secured loans had the lien positions presented in the following table. September 30, 2019 December 31, 2018 Loans Principal Percent Loans Principal Percent First trust deeds 41 $ 42,569,199 58 % 41 $ 29,699,888 48 % Second trust deeds 38 31,063,675 42 42 32,415,825 52 Total principal, secured loans 79 73,632,874 100 % 83 62,115,713 100 % Liens due other lenders at loan closing 61,149,303 65,941,118 Total debt $ 134,782,177 $ 128,056,831 Appraised property value at loan closing $ 254,228,000 $ 240,307,000 Percent of total debt to appraised values (LTV) at loan closing (1) 56.5 % 54.5 % (1) Based on appraised values and liens due other lenders at loan closing. The weighted-average loan-to-value (LTV) computation above does not take into account subsequent increases or decreases in property values following the loan closing nor does it include decreases or increases of the amount owing on senior liens to other lenders. |
Secured Loans by Property Type of the Collateral | Secured loans summarized by property type are presented in the following table. September 30, 2019 December 31, 2018 Loans Principal Percent Loans Principal Percent Single family (2) 53 $ 33,901,279 46 % 60 $ 42,967,253 69 % Multi-family 9 9,566,559 13 8 8,210,970 13 Commercial 17 30,165,036 41 15 10,937,490 18 Total principal, secured loans 79 $ 73,632,874 100 % 83 $ 62,115,713 100 % (2) Single family property type as of September 30, 2019 consists of 10 loans with principal of $6,528,442 that are owner occupied and 43 loans with principal of $27,372,837 that are non-owner occupied. At December 31, 2018, single family property consisted of 14 loans with principal of $11,398,869 that are owner occupied and 46 loans with principal of $31,568,384 that are non-owner occupied. |
Secured Loans Distributed within California | The distribution of secured loans by counties is presented in the following table. September 30, 2019 December 31, 2018 Principal Percent Principal Percent San Francisco Bay Area (3) Santa Clara $ 20,971,193 28.5 % $ 11,756,695 18.9 % San Mateo 11,964,218 16.2 9,619,609 15.5 San Francisco 6,397,988 8.6 5,238,008 8.4 Alameda 3,794,437 5.2 7,306,779 11.8 Solano 600,000 0.8 — — Marin 498,552 0.7 575,000 0.9 Contra Costa 348,000 0.5 725,771 1.2 Santa Cruz 265,000 0.4 — — Sonoma — — 1,300,000 2.1 44,839,388 60.9 36,521,862 58.8 Other Northern California Sutter 3,815,000 5.2 — — Monterey 1,110,000 1.5 322,716 0.5 Placer 628,858 0.9 637,354 1.0 Sacramento 189,863 0.2 822,500 1.3 5,743,721 7.8 1,782,570 2.8 Northern California Total 50,583,109 68.7 38,304,432 61.6 Los Angeles & Coastal Los Angeles 12,435,125 16.9 15,514,789 25.0 San Diego 4,988,294 6.8 5,563,635 9.0 Orange 2,850,595 3.8 1,177,446 1.9 Santa Barbara 498,751 0.7 — — 20,772,765 28.2 22,255,870 35.9 Other Southern California San Bernardino 1,200,000 1.6 1,200,000 1.9 Riverside 1,077,000 1.5 355,411 0.6 2,277,000 3.1 1,555,411 2.5 Southern California Total 23,049,765 31.3 23,811,281 38.4 Total principal, secured loans $ 73,632,874 100.0 % $ 62,115,713 100.0 % (3) Includes Silicon Valley |
Secured Loans Scheduled Maturities | Secured loans are scheduled to mature as presented in the following table as of September 30, 2019. Loans Principal Percent 2019 (4) 7 $ 3,972,546 5 % 2020 37 27,512,366 37 2021 23 36,812,129 50 2022 8 3,975,446 5 2023 2 347,494 1 Thereafter 1 247,000 1 Total future maturities 78 72,866,981 99 Matured as of September 30, 2019 1 765,893 1 Total principal, secured loans 79 $ 73,632,874 100 % (4) Loans scheduled to mature in 2019 from October 1 to December 31. |
Secured Loans Past Maturity | Secured loans past maturity are summarized in the following table as of September 30, 2019. September 30, 2019 Number of loans 1 Principal $ 765,893 Advances 1,653 Accrued interest 21,062 Total recorded investment $ 788,608 Principal past maturity as percent of total principal 1 % |
Past Due Financing Receivables | Secured loans summarized by payment delinquency are presented in the following table. September 30, 2019 December 31, 2018 Loans Principal Loans Principal Past Due 30-89 days 3 $ 3,774,996 5 $ 3,828,975 90-179 days 2 440,398 — — 180 or more days 1 765,893 2 565,685 Total past due 6 4,981,287 7 4,394,660 Current 73 68,651,587 76 57,721,053 Total principal, secured loans 79 $ 73,632,874 83 $ 62,115,713 |
Secured Loans in Non-Accrual Status | Secured loans in non-accrual status are summarized in the following table as of September 30, 2019 and December 31, 2018. September 30, 2019 December 31, 2018 Number of loans 1 2 Principal $ 765,893 $ 565,685 Advances 1,653 10,688 Accrued interest 21,062 19,831 Total recorded investment $ 788,608 $ 596,204 Foregone interest $ — $ 33,410 |
Impaired Loans [Member] | |
Impaired Financing Receivables | Impaired loans/allowance for loan losses September 30, 2019 December 31, 2018 Principal $ 4,537,429 $ 3,841,148 Recorded investment (6) 4,664,076 3,950,157 Impaired loans without allowance 4,664,076 3,950,157 Impaired loans with allowance — — Allowance for loan losses, impaired loans (7) — — Number of loans 4 6 LTV 66.1 % 54.7 % (6) Recorded investment is the sum of the principal, advances, and interest accrued for financial reporting purposes. (7) The loans designated impaired for accounting purposes are well collateralized (i.e., their protective equity was such that collection was deemed probabl e for amounts owing) and there was no allowance for loan losses at September 30, 2019 and December 31, 2018 . |
Average Balances and Interest Income [Member] | |
Impaired Financing Receivables | Impaired loans had average balances and interest income recognized and received in cash as presented in the following tables as of and for the nine months ended September 30, 2019 and the year ended December 31, 2018. September 30, 2019 December 31, 2018 Average recorded investment $ 4,307,117 $ 2,050,897 Interest income recognized 313,717 23,848 Interest income received in cash 36,943 21,670 |
Organization and General - Addi
Organization and General - Additional Information (Details) | Mar. 31, 2019 | Sep. 30, 2019USD ($)Unitshares | Feb. 28, 2018 | Sep. 30, 2019USD ($)shares | Mar. 31, 2020 | Dec. 31, 2019 | May 09, 2019USD ($)shares |
Organization and General (Details) [Line Items] | |||||||
Members or partners capital, description | Cash available for distribution at the end of each calendar month is allocated ninety-nine percent (99%) to the members and one percent (1%) to the manager. | ||||||
Percentage of distribution allocated to members | 99.00% | ||||||
Annualized net distribution rate | 6.50% | ||||||
Net distribution rate before organization and offering expense percentage | 6.95% | ||||||
Organization and offering expense percentage | 0.45% | ||||||
Unit Redemption Program, Years After Purchase | 1 year | ||||||
Maximum Capital Units for Redemption Per Quarter Per Individual | Unit | 100,000 | ||||||
Maximum Percentage of Members Total Outstanding Units for Redemption Per Quarter Per Individual | 25.00% | ||||||
Maximum Percentage of Weighted Average Number of Members Outstanding Units During Twelve Months for Redemption | 5.00% | ||||||
Capital Unit Sold in Public Offering, Shares | shares | 120,000,000 | 120,000,000 | |||||
Capital Unit Sold in Public Offering, Value | $ 120,000,000 | $ 120,000,000 | |||||
Maximum [Member] | |||||||
Organization and General (Details) [Line Items] | |||||||
Percentage of offering proceeds | 7.00% | ||||||
DRIP [Member] | |||||||
Organization and General (Details) [Line Items] | |||||||
Gross proceeds from unit sales | $ 1,008,000 | ||||||
Member Units [Member] | |||||||
Organization and General (Details) [Line Items] | |||||||
Capital Unit Sold in Public Offering, Shares | shares | 20,000,000 | 20,000,000 | 15,000,000 | ||||
Capital Unit Sold in Public Offering, Value | $ 20,000,000 | $ 20,000,000 | $ 15,000,000 | ||||
Redemption Between One to Two Years [Member] | |||||||
Organization and General (Details) [Line Items] | |||||||
Redemption Value Percentage of Purchase Price or Capital Account Balance | 92.00% | 92.00% | |||||
Redemption Between Two to Three Years [Member] | |||||||
Organization and General (Details) [Line Items] | |||||||
Redemption Value Percentage of Purchase Price or Capital Account Balance | 94.00% | 94.00% | |||||
Redemption Between Three to Four Years [Member] | |||||||
Organization and General (Details) [Line Items] | |||||||
Redemption Value Percentage of Purchase Price or Capital Account Balance | 96.00% | 96.00% | |||||
Redemption Between Four to Five Years [Member] | |||||||
Organization and General (Details) [Line Items] | |||||||
Redemption Value Percentage of Purchase Price or Capital Account Balance | 98.00% | 98.00% | |||||
Redemption After Five Years [Member] | |||||||
Organization and General (Details) [Line Items] | |||||||
Redemption Value Percentage of Purchase Price or Capital Account Balance | 100.00% | 100.00% | |||||
RMC [Member] | |||||||
Organization and General (Details) [Line Items] | |||||||
Percentage of profits and losses allocated to manager | 1.00% | ||||||
Management Fee, Percentage | 0.75% | 0.75% | 0.75% | ||||
RMC [Member] | Maximum [Member] | |||||||
Organization and General (Details) [Line Items] | |||||||
Percentage of proceeds from sale of units used to pay for organization and offering expenses,excluding units sold in the DRIP | 4.50% | ||||||
Percentage of proceeds from sale of units used for funding formation loan to related party,excluding units sold in the DRIP | 7.00% | ||||||
RMC [Member] | Scenario, Forecast [Member] | |||||||
Organization and General (Details) [Line Items] | |||||||
Management Fee, Percentage | 1.00% | 1.00% | |||||
RMC [Member] | |||||||
Organization and General (Details) [Line Items] | |||||||
Ownership interest held by the manager | 0.10% | 0.10% |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2019USD ($)Approach | |
Summary Of Significant Accounting Policies [Line Items] | |
Estimating Real Property Value, Number of Approaches | Approach | 3 |
Cash and Cash Equivalents, Maximum Initial Maturity | 3 months |
Impaired loans maximum days of delinquent | 180 days |
Interest Reserve Minimum Length | 1 year |
Interest Reserve Maximum Length | 2 years |
Maximum [Member] | |
Summary Of Significant Accounting Policies [Line Items] | |
Federal Insurance Limit | $ | $ 250,000 |
Manager and Other Related Par_3
Manager and Other Related Parties - Additional Information (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)MortgageLoan | Sep. 30, 2018USD ($)MortgageLoan | Dec. 31, 2018USD ($)MortgageLoan | Mar. 31, 2020 | Jun. 30, 2019USD ($) | |
Managers and Other Related Parties (Details) [Line Items] | |||||||
Managers Share of Profits or Losses | 1.00% | ||||||
Mortgage Loans on Real Estate, Number of Loans | MortgageLoan | 79 | 83 | |||||
Principal | $ 73,632,874 | $ 73,632,874 | $ 62,115,713 | $ 70,922,877 | |||
Future redemptions of member's capital | $ 578,981 | ||||||
Reimbursement as a percentage of member's original purchase price | 0.45% | ||||||
Percentage of original purchase price, quarterly installment percentage | 0.1125% | ||||||
Performing Loans [Member] | |||||||
Managers and Other Related Parties (Details) [Line Items] | |||||||
Mortgage Loans on Real Estate, Number of Loans | MortgageLoan | 0 | 2 | |||||
Principal | $ 5,890,000 | $ 5,890,000 | |||||
Maximum [Member] | |||||||
Managers and Other Related Parties (Details) [Line Items] | |||||||
Annual mortgage servicing fees, percentage | 0.25% | 0.25% | |||||
Percentage of reimbursement of organization and offering expenses | 4.50% | ||||||
Reimbursement threshold | Maximum of forty (40) such quarters | ||||||
RMC [Member] | |||||||
Managers and Other Related Parties (Details) [Line Items] | |||||||
Administrative Fees, Percentage | 1.00% | 1.00% | |||||
Management Fee, Percentage | 0.75% | 0.75% | 0.75% | ||||
Working Capital Reserve, Percentage | 2.00% | 2.00% | |||||
Loan Brokerage Commission Percent Minimum | 1.50% | 1.50% | |||||
Loan Brokerage Commission Percent Maximum | 5.00% | 5.00% | |||||
Loan Brokerage Commissions, Maximum Percent of Assets | 4.00% | 4.00% | |||||
Future redemptions of member's capital | $ 760,856 | $ 787,524 | $ 2,676,906 | $ 1,490,164 |
Manager and Other Related Par_4
Manager and Other Related Parties - Summary of Loan Administrative Fees and Operating Expenses, for Fees and Cost Reimbursements Waived and Expenses Absorbed (Details) - RMC [Member] - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Managers and Other Related Parties (Details) [Line Items] | ||||
Chargeable/reimbursable | $ 710,981 | $ 660,881 | $ 1,957,150 | $ 1,885,772 |
Waived | (372,573) | (532,216) | (1,246,540) | (1,428,436) |
Expenses absorbed by RMC | (157,398) | |||
Total RMC support | (372,573) | (532,216) | (1,246,540) | (1,585,834) |
Net charged | 338,408 | 128,665 | 710,610 | 299,938 |
Loan Admin Fees [Member] | ||||
Managers and Other Related Parties (Details) [Line Items] | ||||
Chargeable/reimbursable | 221,512 | 240,738 | 530,732 | 565,041 |
Waived | (221,512) | (240,738) | (530,732) | (565,041) |
Total RMC support | (221,512) | (240,738) | (530,732) | (565,041) |
Mortgage Servicing Fees [Member] | ||||
Managers and Other Related Parties (Details) [Line Items] | ||||
Chargeable/reimbursable | 40,450 | 36,266 | 122,010 | 110,144 |
Net charged | 40,450 | 36,266 | 122,010 | 110,144 |
Asset Management Fee [Member] | ||||
Managers and Other Related Parties (Details) [Line Items] | ||||
Chargeable/reimbursable | 119,187 | 104,955 | 357,561 | 314,865 |
Waived | (104,955) | (198,645) | (314,865) | |
Total RMC support | (104,955) | (198,645) | (314,865) | |
Net charged | 119,187 | 158,916 | ||
Costs from RMC [Member] | ||||
Managers and Other Related Parties (Details) [Line Items] | ||||
Chargeable/reimbursable | 151,061 | 186,523 | 517,163 | 548,530 |
Waived | (151,061) | (186,523) | (517,163) | (548,530) |
Total RMC support | (151,061) | (186,523) | (517,163) | (548,530) |
Professional Services [Member] | ||||
Managers and Other Related Parties (Details) [Line Items] | ||||
Chargeable/reimbursable | 178,752 | 90,957 | 404,927 | 323,007 |
Expenses absorbed by RMC | (143,152) | |||
Total RMC support | (143,152) | |||
Net charged | 178,752 | 90,957 | 404,927 | 179,855 |
Other [Member] | ||||
Managers and Other Related Parties (Details) [Line Items] | ||||
Chargeable/reimbursable | 19 | 1,442 | 24,757 | 24,185 |
Expenses absorbed by RMC | (14,246) | |||
Total RMC support | (14,246) | |||
Net charged | $ 19 | $ 1,442 | $ 24,757 | $ 9,939 |
Manager and Other Related Par_5
Manager and Other Related Parties - Formation Loan Transactions (Details) - USD ($) | 9 Months Ended | 120 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Formation Loan Transactions [Abstract] | ||
Balance, beginning of period | $ 4,179,343 | |
Formation loan advances to RMC | 186,656 | $ 5,626,566 |
Payments received from RMC | (1,199,716) | |
Early withdrawal penalties applied | (48,281) | (109,132) |
Balance, September 30, 2019 | $ 4,317,718 | 4,317,718 |
Subscription proceeds since inception | $ 80,256,995 | |
Formation loan advance rate | 7.00% |
Manager and Other Related Par_6
Manager and Other Related Parties - Formation Loan, Future Minimum Payments Net of Early Withdrawal Penalties (Details) | Sep. 30, 2019USD ($) |
Formation Loan Future Minimum Payments [Abstract] | |
2019 | $ 369,654 |
2020 | 417,934 |
2021 | 417,934 |
2022 | 417,934 |
2023 | 417,934 |
Thereafter | 2,276,328 |
Total | $ 4,317,718 |
Manager and Other Related Par_7
Manager and Other Related Parties - Schedule of Unit Redemptions (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 120 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | ||
Managers and Other Related Parties (Details) [Line Items] | ||||||
Total, Capital redemptions | $ 578,981 | |||||
Early withdrawal penalties | [1] | 19,415 | $ 60,290 | |||
RMC [Member] | ||||||
Managers and Other Related Parties (Details) [Line Items] | ||||||
Total, Capital redemptions | $ 760,856 | $ 787,524 | 2,676,906 | $ 1,490,164 | ||
Early withdrawal penalties | 6,611 | 10,175 | 67,695 | 14,143 | ||
RMC [Member] | Capital Redemptions-without Penalty [Member] | ||||||
Managers and Other Related Parties (Details) [Line Items] | ||||||
Total, Capital redemptions | 445,485 | 635,218 | 1,187,961 | 1,211,085 | ||
RMC [Member] | Capital Redemptions-subject to Penalty [Member] | ||||||
Managers and Other Related Parties (Details) [Line Items] | ||||||
Total, Capital redemptions | $ 315,371 | $ 152,306 | $ 1,488,945 | $ 279,079 | ||
[1] | Prior to June 30, 2019, early withdrawal penalties collected were applied to the next installment of principal due under the formation loan and to reduce the amount owed to RMC for O&O expenses. The amounts credited were be determined by the ratio between the amount of the formation loan and the amount of offering costs incurred by the company. |
Manager and Other Related Par_8
Manager and Other Related Parties - Summary of Organization and Offering Expenses (Details) - USD ($) | 9 Months Ended | 120 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2019 | ||
Related Party Transactions [Abstract] | |||
Balance, beginning of period | $ 2,519,458 | ||
O&O expenses reimbursed to RMC | 185,332 | $ 3,671,853 | |
Early withdrawal penalties applied | [1] | (19,415) | (60,290) |
O&O expenses allocated | [2] | (247,975) | (934,331) |
O&O expenses repaid to Members' Capital by RMC | [3] | (79,922) | (319,754) |
Balance, September 30 | $ 2,357,478 | $ 2,357,478 | |
[1] | Prior to June 30, 2019, early withdrawal penalties collected were applied to the next installment of principal due under the formation loan and to reduce the amount owed to RMC for O&O expenses. The amounts credited were be determined by the ratio between the amount of the formation loan and the amount of offering costs incurred by the company. | ||
[2] | Beginning in 2016, O&O expenses reimbursed to RMC by RMI IX are allocated to members’ capital accounts over 40 quarters. | ||
[3] | RMC is obligated under the Operating Agreement to repay the company for unallocated O&O expenses attributed to units redeemed prior to the 40 quarterly allocations. RMC estimated its future obligations to repay unallocated O&O expenses on scheduled redemptions as of September 30, 2019, to be approximately $17,291, to be offset by early withdrawal penalties. |
Manager and Other Related Par_9
Manager and Other Related Parties - Summary of Organization and Offering Expenses (Parenthetical) (Details) | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Related Party Transactions [Abstract] | |
O&O expenses reimbursed period to RMC | 120 months |
Unallocated O&O expenses on units rebates period | 120 months |
Estimated future rebates on scheduled redemptions | $ 17,291 |
Loans - Additional Information
Loans - Additional Information (Details) | Oct. 04, 2019USD ($) | Jul. 29, 2019USD ($)MortgageLoan | Sep. 30, 2019USD ($)MortgageLoanLoan | Mar. 31, 2019USD ($)MortgageLoan | Sep. 30, 2019USD ($)MortgageLoanLoan | Dec. 31, 2018USD ($)MortgageLoanLoan | Jun. 30, 2019USD ($) |
Loans (Details) [Line Items] | |||||||
Loans Receivable, Term | 5 years | ||||||
Mortgage Loans on Real Estate, Number of Loans | MortgageLoan | 79 | 83 | |||||
Loans Receivable, Number of Principal and Interest Loans | Loan | 54 | 54 | |||||
Loans Receivable, Amortization Term | 30 years | ||||||
Balance relating to loan portfolio held in bank trust account | $ 1,002,146 | $ 1,002,146 | |||||
Mortgage Loans on Real Estate, Number of Loans | MortgageLoan | 8 | 1 | 1 | ||||
Proceeds from sale of loan | $ 143,000 | $ 527,296 | |||||
Repayment of outstanding | $ 4,893 | 4,649 | 4,893 | ||||
Gain recognized on sales of loans | 0 | 0 | |||||
Loans receivable aggregate principal amount | $ 4,273,346 | ||||||
Accrued interest | $ 31,830 | $ 536,731 | $ 536,731 | $ 473,966 | |||
Foregone interest | 10,791 | ||||||
Mortgage Loans on Real Estate Renewed, Number of Loans | MortgageLoan | 5 | 6 | |||||
Loans - principal renewed (in Dollars) | $ 4,961,000 | $ 5,361,000 | |||||
Loans Receivable Largest Loan (in Dollars) | 6,735,000 | 6,735,000 | 4,000,000 | ||||
Loans - principal (in Dollars) | $ 73,632,874 | $ 73,632,874 | $ 62,115,713 | $ 70,922,877 | |||
Number of loans | Loan | 79 | 79 | 83 | ||||
Principal | $ 73,632,874 | $ 73,632,874 | $ 62,115,713 | ||||
Financing Receivable, Modifications, Number of Contracts | Loan | 0 | 0 | |||||
Past Due 183 Days [Member] | |||||||
Loans (Details) [Line Items] | |||||||
Number of loans | MortgageLoan | 1 | 1 | |||||
Principal | $ 765,800 | $ 765,800 | |||||
Past Due 180 Days [Member] | |||||||
Loans (Details) [Line Items] | |||||||
Loans receivable extended maturity date | Apr. 1, 2019 | ||||||
Past Due 61 Days [Member] | |||||||
Loans (Details) [Line Items] | |||||||
Number of loans | MortgageLoan | 1 | 1 | |||||
Principal | $ 3,331,000 | $ 3,331,000 | |||||
Past Due 30 Days [Member] | |||||||
Loans (Details) [Line Items] | |||||||
Number of loans | MortgageLoan | 2 | 2 | |||||
Principal | $ 443,800 | $ 443,800 | |||||
Past Due 90 Or More Days [Member] | |||||||
Loans (Details) [Line Items] | |||||||
Mortgage Loans on Real Estate, Number of Loans | MortgageLoan | 2 | ||||||
Financing receivable, recorded investment, 90 days past due and still accruing | $ 440,000 | $ 440,000 | $ 0 | ||||
Interest Income [Member] | |||||||
Loans (Details) [Line Items] | |||||||
Proceeds from sale of loan | $ 1,711 | $ 22,403 | |||||
Impaired Loans [Member] | |||||||
Loans (Details) [Line Items] | |||||||
Mortgage Loans on Real Estate, Number of Loans | MortgageLoan | 1 | 1 | 1 | ||||
Financing Receivable, Recorded Investment, Nonaccrual Status (in Dollars) | $ 500,000 | $ 136,640 | $ 500,000 | ||||
Impaired Loans [Member] | Past Due 92 Days [Member] | |||||||
Loans (Details) [Line Items] | |||||||
Number of loans | MortgageLoan | 1 | 1 | |||||
Principal | $ 191,000 | $ 191,000 | |||||
Loans receivable extended maturity date | Oct. 1, 2021 | ||||||
Loans receivable maturity date | Jun. 1, 2016 | ||||||
Impaired Loans [Member] | Past Due 122 Days [Member] | |||||||
Loans (Details) [Line Items] | |||||||
Number of loans | MortgageLoan | 1 | 1 | |||||
Principal | $ 250,000 | $ 250,000 | |||||
Impaired Loans and Non Accrual Status [Member] | Past Due 183 Days [Member] | |||||||
Loans (Details) [Line Items] | |||||||
Mortgage Loans on Real Estate, Number of Loans | MortgageLoan | 1 | 1 | |||||
Subsequent Event [Member] | |||||||
Loans (Details) [Line Items] | |||||||
Balance relating loan payoff to bank trust account | $ 905,525 | ||||||
Five Years Or Less Term Loans [Member] | |||||||
Loans (Details) [Line Items] | |||||||
Mortgage Loans on Real Estate, Number of Loans | MortgageLoan | 77 | ||||||
Loans Receivable, Percent of Aggregate Principal | 99.00% | 99.00% | |||||
Interest Only [Member] | |||||||
Loans (Details) [Line Items] | |||||||
Loans Receivable, Percent of Aggregate Principal | 46.00% | 46.00% | |||||
Largest Loan [Member] | |||||||
Loans (Details) [Line Items] | |||||||
Loans Receivable, Yield of Loan Acquired | 8.25% | 8.25% | |||||
Loans Receivable Maturity Date | Oct. 1, 2021 | ||||||
Largest Loan [Member] | Filed Notice Of Sale [Member] | |||||||
Loans (Details) [Line Items] | |||||||
Mortgage Loans on Real Estate, Number of Loans | MortgageLoan | 0 | ||||||
Construction Loans [Member] | |||||||
Loans (Details) [Line Items] | |||||||
Loans outstanding | $ 0 | $ 0 | |||||
Rehabilitation Loans [Member] | |||||||
Loans (Details) [Line Items] | |||||||
Loans outstanding | 0 | 0 | |||||
Construction Or Rehabilitation Loans [Member] | |||||||
Loans (Details) [Line Items] | |||||||
Loans - principal (in Dollars) | $ 0 | $ 0 | |||||
Minimum [Member] | |||||||
Loans (Details) [Line Items] | |||||||
Loans Receivable, Remaining Term | 5 years |
Loans - Secured Loan Principal
Loans - Secured Loan Principal Transactions (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Receivables [Abstract] | ||
Principal, beginning of period | $ 70,922,877 | $ 62,115,713 |
Loans originated | 22,151,200 | 53,073,200 |
Loans sold to non-affiliate | (4,773,346) | (4,909,986) |
Principal collected | (14,667,857) | (36,646,053) |
Principal September 30, 2019 | $ 73,632,874 | $ 73,632,874 |
Loans - Secured Loans Character
Loans - Secured Loans Characteristics (Details) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019USD ($)MortgageLoanCountry | Dec. 31, 2018USD ($)MortgageLoanCountry | Jun. 30, 2019USD ($) | |
Secured Loan Transactions [Line Items] | |||
Number of secured loans | MortgageLoan | 79 | 83 | |
Secured loans - principal (in Dollars) | $ 73,632,874 | $ 62,115,713 | $ 70,922,877 |
Average secured loan - principal (in Dollars) | $ 932,062 | $ 748,382 | |
Average principal as percent of total principal | 1.30% | 1.20% | |
Average principal as percent of members’ capital, net | 1.20% | 1.00% | |
Average principal as percent of total assets | 1.20% | 1.00% | |
Largest secured loan - principal (in Dollars) | $ 6,735,000 | $ 4,000,000 | |
Largest principal as percent of total principal | 9.10% | 6.40% | |
Largest principal as percent of members’ capital, net | 8.50% | 5.20% | |
Largest principal as percent of total assets | 8.90% | 5.50% | |
Smallest secured loan - principal (in Dollars) | $ 54,091 | $ 74,390 | |
Smallest principal as percent of total principal | 0.10% | 0.10% | |
Smallest principal as percent of members’ capital, net | 0.10% | 0.10% | |
Smallest principal as percent of total assets | 0.10% | 0.10% | |
Number of California counties where security is located | Country | 18 | 15 | |
Largest percentage of principal in one California county | 28.50% | 25.00% | |
Secured loans in foreclosure - principal (in Dollars) | $ 565,685 | ||
Prepaid interest | $ 21,000 | ||
Minimum [Member] | |||
Secured Loan Transactions [Line Items] | |||
Secured loans – interest rate (fixed) | 7.80% | 7.00% | |
Maximum [Member] | |||
Secured Loan Transactions [Line Items] | |||
Secured loans – interest rate (fixed) | 10.50% | 10.50% | |
Filed Notice of Default [Member] | |||
Secured Loan Transactions [Line Items] | |||
Number of secured loans | MortgageLoan | 2 | ||
Prepaid Interest [Member] | |||
Secured Loan Transactions [Line Items] | |||
Number of secured loans | MortgageLoan | 1 |
Loans - Secured Loans by Lien P
Loans - Secured Loans by Lien Position in the Collateral (Details) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019USD ($)MortgageLoan | Dec. 31, 2018USD ($)MortgageLoan | Jun. 30, 2019USD ($) | ||
Loans (Details) - Secured Loans by Lien Position in the Collateral [Line Items] | ||||
Loans | MortgageLoan | 79 | 83 | ||
Loans - principal (in Dollars) | $ 73,632,874 | $ 62,115,713 | $ 70,922,877 | |
Liens due other lenders at loan closing | 61,149,303 | 65,941,118 | ||
Total debt | 134,782,177 | 128,056,831 | ||
Appraised property value at loan closing | $ 254,228,000 | $ 240,307,000 | ||
Percent of total debt to appraised values (LTV) at loan closing | [1] | 56.50% | 54.50% | |
Loans - percent | 100.00% | 100.00% | ||
First Trust Deeds [Member] | ||||
Loans (Details) - Secured Loans by Lien Position in the Collateral [Line Items] | ||||
Loans | MortgageLoan | 41 | 41 | ||
Loans - principal (in Dollars) | $ 42,569,199 | $ 29,699,888 | ||
Loans - percent | 58.00% | 48.00% | ||
Second Trust Deeds [Member] | ||||
Loans (Details) - Secured Loans by Lien Position in the Collateral [Line Items] | ||||
Loans | MortgageLoan | 38 | 42 | ||
Loans - principal (in Dollars) | $ 31,063,675 | $ 32,415,825 | ||
Loans - percent | 42.00% | 52.00% | ||
[1] | Based on appraised values and liens due other lenders at loan closing. The weighted-average loan-to-value (LTV) computation above does not take into account subsequent increases or decreases in property values following the loan closing nor does it include decreases or increases of the amount owing on senior liens to other lenders. |
Loans - Secured Loans by Proper
Loans - Secured Loans by Property Type (Details) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019USD ($)MortgageLoan | Dec. 31, 2018USD ($)MortgageLoan | Jun. 30, 2019USD ($) | ||
Loans (Details) - Secured Loans by Property Type [Line Items] | ||||
Loans | MortgageLoan | 79 | 83 | ||
Loans - principal (in Dollars) | $ | $ 73,632,874 | $ 62,115,713 | $ 70,922,877 | |
Loans - percent | 100.00% | 100.00% | ||
Single Family [Member] | ||||
Loans (Details) - Secured Loans by Property Type [Line Items] | ||||
Loans | MortgageLoan | [1] | 53 | 60 | |
Loans - principal (in Dollars) | $ | [1] | $ 33,901,279 | $ 42,967,253 | |
Loans - percent | [1] | 46.00% | 69.00% | |
Multifamily [Member] | ||||
Loans (Details) - Secured Loans by Property Type [Line Items] | ||||
Loans | MortgageLoan | 9 | 8 | ||
Loans - principal (in Dollars) | $ | $ 9,566,559 | $ 8,210,970 | ||
Loans - percent | 13.00% | 13.00% | ||
Commercial [Member] | ||||
Loans (Details) - Secured Loans by Property Type [Line Items] | ||||
Loans | MortgageLoan | 17 | 15 | ||
Loans - principal (in Dollars) | $ | $ 30,165,036 | $ 10,937,490 | ||
Loans - percent | 41.00% | 18.00% | ||
[1] | Single family property type as of September 30, 2019 consists of 10 loans with principal of $6,528,442 that are owner occupied and 43 loans with principal of $27,372,837 that are non-owner occupied. At December 31, 2018, single family property consisted of 14 loans with principal of $11,398,869 that are owner occupied and 46 loans with principal of $31,568,384 that are non-owner occupied. |
Loans - Secured Loans by Prop_2
Loans - Secured Loans by Property Type (Parenthetical) (Details) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019USD ($)MortgageLoan | Dec. 31, 2018USD ($)MortgageLoan | Jun. 30, 2019USD ($) | |
Loans (Details) - Secured Loans by Property Type [Line Items] | |||
Number of secured loans | MortgageLoan | 79 | 83 | |
Principal | $ | $ 73,632,874 | $ 62,115,713 | $ 70,922,877 |
Single Family Property-Owner Occupied [Member] | |||
Loans (Details) - Secured Loans by Property Type [Line Items] | |||
Number of secured loans | MortgageLoan | 10 | 14 | |
Principal | $ | $ 6,528,442 | $ 11,398,869 | |
Single Family Property-NonOwner Occupied [Member] | |||
Loans (Details) - Secured Loans by Property Type [Line Items] | |||
Number of secured loans | MortgageLoan | 43 | 46 | |
Principal | $ | $ 27,372,837 | $ 31,568,384 |
Loans - Secured Loans Distribut
Loans - Secured Loans Distributed Within California (Details) - USD ($) | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | |
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | $ 73,632,874 | $ 70,922,877 | $ 62,115,713 | |
Loans - percent | 100.00% | 100.00% | ||
Santa Clara [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | [1] | $ 20,971,193 | $ 11,756,695 | |
Loans - percent | [1] | 28.50% | 18.90% | |
San Mateo [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | [1] | $ 11,964,218 | $ 9,619,609 | |
Loans - percent | [1] | 16.20% | 15.50% | |
San Francisco [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | [1] | $ 6,397,988 | $ 5,238,008 | |
Loans - percent | [1] | 8.60% | 8.40% | |
Alameda [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | [1] | $ 3,794,437 | $ 7,306,779 | |
Loans - percent | [1] | 5.20% | 11.80% | |
Sonoma [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | [1] | $ 1,300,000 | ||
Loans - percent | [1] | 2.10% | ||
Marin [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | $ 498,552 | $ 575,000 | ||
Loans - percent | 0.70% | 0.90% | ||
Solano [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | [1] | $ 600,000 | ||
Loans - percent | [1] | 0.80% | ||
Contra Costa [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | [1] | $ 348,000 | $ 725,771 | |
Loans - percent | [1] | 0.50% | 1.20% | |
Santa Cruz | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | $ 265,000 | |||
Loans - percent | 0.40% | |||
San Francisco Bay Area [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | [1] | $ 44,839,388 | $ 36,521,862 | |
Loans - percent | [1] | 60.90% | 58.80% | |
Sutter [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | $ 3,815,000 | |||
Loans - percent | 5.20% | |||
Sacramento [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | $ 189,863 | $ 822,500 | ||
Loans - percent | 0.20% | 1.30% | ||
Monterey [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | $ 1,110,000 | $ 322,716 | ||
Loans - percent | 1.50% | 0.50% | ||
Placer [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | $ 628,858 | $ 637,354 | ||
Loans - percent | 0.90% | 1.00% | ||
Other Northern California [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | $ 5,743,721 | $ 1,782,570 | ||
Loans - percent | 7.80% | 2.80% | ||
Northern California [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | $ 50,583,109 | $ 38,304,432 | ||
Loans - percent | 68.70% | 61.60% | ||
Los Angeles [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | $ 12,435,125 | $ 15,514,789 | ||
Loans - percent | 16.90% | 25.00% | ||
San Diego [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | $ 4,988,294 | $ 5,563,635 | ||
Loans - percent | 6.80% | 9.00% | ||
Orange [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | $ 2,850,595 | $ 1,177,446 | ||
Loans - percent | 3.80% | 1.90% | ||
Santa Barbara [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | $ 498,751 | |||
Loans - percent | 0.70% | |||
Los Angeles & Coastal [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | $ 20,772,765 | $ 22,255,870 | ||
Loans - percent | 28.20% | 35.90% | ||
San Bernardino [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | $ 1,200,000 | $ 1,200,000 | ||
Loans - percent | 1.60% | 1.90% | ||
Riverside [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | $ 1,077,000 | $ 355,411 | ||
Loans - percent | 1.50% | 0.60% | ||
Other Southern California [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | $ 2,277,000 | $ 1,555,411 | ||
Loans - percent | 3.10% | 2.50% | ||
Southern California [Member] | ||||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | ||||
Loans - principal (in Dollars) | $ 23,049,765 | $ 23,811,281 | ||
Loans - percent | 31.30% | 38.40% | ||
[1] | Includes Silicon Valley |
Loans - Secured Loans Scheduled
Loans - Secured Loans Scheduled Maturities (Details) | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2019USD ($)MortgageLoan | Dec. 31, 2018USD ($)MortgageLoan | Jul. 29, 2019MortgageLoan | Jun. 30, 2019USD ($) | ||
Secured Loans Scheduled Maturities [Abstract] | |||||
2019, Loans | MortgageLoan | [1] | 7 | |||
2020, Loans | MortgageLoan | 37 | ||||
2021, Loans | MortgageLoan | 23 | ||||
2022, Loans | MortgageLoan | 8 | ||||
2023, Loans | MortgageLoan | 2 | ||||
Thereafter, Loans | MortgageLoan | 1 | ||||
Total future maturities, Loans | MortgageLoan | 78 | ||||
Matured as of September 30, 2019, Loans | MortgageLoan | 1 | 8 | |||
Number of secured loans | MortgageLoan | 79 | 83 | |||
2019, Principal | $ | [1] | $ 3,972,546 | |||
2020, Principal | $ | 27,512,366 | ||||
2021, Principal | $ | 36,812,129 | ||||
2022, Principal | $ | 3,975,446 | ||||
2023, Principal | $ | 347,494 | ||||
Thereafter, Principal | $ | 247,000 | ||||
Total future maturities, Principal | $ | 72,866,981 | ||||
Matured as of June 30, 2019, Principal | $ | 765,893 | ||||
Total principal, secured loans | $ | $ 73,632,874 | $ 62,115,713 | $ 70,922,877 | ||
2019, Percent | [1] | 5.00% | |||
2020, Percent | 37.00% | ||||
2021, Percent | 50.00% | ||||
2022, Percent | 5.00% | ||||
2023, Percent | 1.00% | ||||
Thereafter, Percent | 1.00% | ||||
Total future maturities, Percent | 99.00% | ||||
Matured as of June 30, 2019, Percent | 1.00% | ||||
Total principal, secured loans, Percent | 100.00% | 100.00% | |||
[1] | Loans scheduled to mature in 2019 from October 1 to December 31. |
Loans - Secured Loans Past Matu
Loans - Secured Loans Past Maturity (Details) | Sep. 30, 2019USD ($)MortgageLoan | Jul. 29, 2019USD ($)MortgageLoan | Jun. 30, 2019USD ($) | Dec. 31, 2018USD ($) |
Loans Details Secured Loans In Nonaccrual Status [Line Items] | ||||
Number of loans | MortgageLoan | 1 | 8 | ||
Loans - principal (in Dollars) | $ 73,632,874 | $ 70,922,877 | $ 62,115,713 | |
Accrued interest | $ 536,731 | $ 31,830 | $ 473,966 | |
Matured Loans [Member] | ||||
Loans Details Secured Loans In Nonaccrual Status [Line Items] | ||||
Number of loans | MortgageLoan | 1 | |||
Loans - principal (in Dollars) | $ 788,608 | |||
Accrued interest | $ 21,062 | |||
Principal past maturity as percent of total principal | 1.00% | |||
Principal [Member] | Matured Loans [Member] | ||||
Loans Details Secured Loans In Nonaccrual Status [Line Items] | ||||
Loans - principal (in Dollars) | $ 765,893 | |||
Advances [Member] | Matured Loans [Member] | ||||
Loans Details Secured Loans In Nonaccrual Status [Line Items] | ||||
Loans - principal (in Dollars) | $ 1,653 |
Loans - Past Due Financing Rece
Loans - Past Due Financing Receivables (Details) | Sep. 30, 2019USD ($)Loan | Dec. 31, 2018USD ($)Loan |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Number of loans | Loan | 79 | 83 |
Principal | $ | $ 73,632,874 | $ 62,115,713 |
Past Due 30-89 Days [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Number of loans | Loan | 3 | 5 |
Principal | $ | $ 3,774,996 | $ 3,828,975 |
Past Due 90-179 Days [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Number of loans | Loan | 2 | |
Principal | $ | $ 440,398 | |
Past Due 180 Or More Days [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Number of loans | Loan | 1 | 2 |
Principal | $ | $ 765,893 | $ 565,685 |
Total Past Due [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Number of loans | Loan | 6 | 7 |
Principal | $ | $ 4,981,287 | $ 4,394,660 |
Current [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Number of loans | Loan | 73 | 76 |
Principal | $ | $ 68,651,587 | $ 57,721,053 |
Loans - Secured Loans in Non-Ac
Loans - Secured Loans in Non-Accrual Status (Details) | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2019USD ($)MortgageLoan | Dec. 31, 2018USD ($)MortgageLoan | Jul. 29, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | |
Loans Details Secured Loans In Nonaccrual Status [Line Items] | |||||
Number of secured loans | MortgageLoan | 79 | 83 | |||
Loans - principal (in Dollars) | $ 73,632,874 | $ 62,115,713 | $ 70,922,877 | ||
Accrued interest | $ 536,731 | $ 473,966 | $ 31,830 | ||
Foregone interest | $ 10,791 | ||||
Non-Accrual Status [Member] | |||||
Loans Details Secured Loans In Nonaccrual Status [Line Items] | |||||
Number of secured loans | MortgageLoan | 1 | 2 | |||
Loans - principal (in Dollars) | $ 788,608 | $ 596,204 | |||
Accrued interest | 21,062 | 19,831 | |||
Foregone interest | 33,410 | ||||
Principal [Member] | Non-Accrual Status [Member] | |||||
Loans Details Secured Loans In Nonaccrual Status [Line Items] | |||||
Loans - principal (in Dollars) | 765,893 | 565,685 | |||
Advances [Member] | Non-Accrual Status [Member] | |||||
Loans Details Secured Loans In Nonaccrual Status [Line Items] | |||||
Loans - principal (in Dollars) | $ 1,653 | $ 10,688 |
Loans - Schedule of Impaired Lo
Loans - Schedule of Impaired Loans/Allowance for Loan Losses (Details) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019USD ($)Loan | Dec. 31, 2018USD ($)Loan | ||
Secured Loans Designated as Impaired Loans [Abstract] | |||
Principal | $ 4,537,429 | $ 3,841,148 | |
Recorded investment | [1] | 4,664,076 | 3,950,157 |
Impaired loans without allowance | 4,664,076 | 3,950,157 | |
Allowance for loan losses, impaired loans | $ 0 | $ 0 | |
Number of loans | Loan | 4 | 6 | |
LTV | 66.10% | 54.70% | |
[1] | Recorded investment is the sum of the principal, advances, and interest accrued for financial reporting purposes. |
Loans - Schedule of Impaired _2
Loans - Schedule of Impaired Loans/Allowance for Loan Losses (Parenthetical) (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Receivables [Abstract] | ||
Allowance for loan losses, impaired loans | $ 0 | $ 0 |
Loans - Impaired Loans - Averag
Loans - Impaired Loans - Average Balances and Interest Income (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Impaired Loans - Average Balances and Interest Income [Abstract] | ||
Average recorded investment | $ 4,307,117 | $ 2,050,897 |
Interest income recognized | 313,717 | 23,848 |
Interest income received in cash | $ 36,943 | $ 21,670 |
Commitment and Contingencies, O
Commitment and Contingencies, Other Than Loan Commitments - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Commitments And Contingencies Disclosure [Abstract] | |
Future redemptions of member's capital | $ 578,981 |