Document and Entity Information
Document and Entity Information | 3 Months Ended |
Mar. 31, 2020shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Mar. 31, 2020 |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | Q1 |
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 ($) | Mar. 31, 2020 | Dec. 31, 2019 |
ASSETS | ||
Cash, in banks | $ 7,714,802 | $ 4,450,529 |
Loans | ||
Principal | 67,450,683 | 70,660,284 |
Advances | 10,846 | 14,040 |
Accrued interest | 656,193 | 680,146 |
Loan balances secured by deeds of trust | 68,117,722 | 71,354,470 |
Allowance for loan losses | (55,000) | (87,000) |
Loan balances secured by deeds of trust, net | 68,062,722 | 71,267,470 |
Debt issuance costs | 87,611 | |
Total assets | 75,865,135 | 75,717,999 |
LIABILITIES, INVESTORS IN APPLICANT STATUS, AND MEMBERS’ CAPITAL | ||
Accounts payable and accrued liabilities | 29,073 | 36,933 |
Payable to affiliate | 53,173 | |
Total liabilities | 82,246 | 36,933 |
Commitments and contingencies (Note 6) | ||
Members’ capital, net | 79,725,634 | 79,629,130 |
Receivable from manager (formation loan) | (3,942,745) | (3,948,064) |
Members’ capital, net of formation loan | 75,782,889 | 75,681,066 |
Total liabilities and members’ capital | $ 75,865,135 | $ 75,717,999 |
Statements of Income (Unaudited
Statements of Income (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues, net | ||
Interest income | $ 1,427,677 | $ 1,360,992 |
Late fees | 8,048 | 16,985 |
Total revenues | 1,435,725 | 1,377,977 |
Recovery of loan losses | (75) | |
Operations expense | ||
Mortgage servicing fees | 42,273 | 38,646 |
Asset management fees, net (Note 3) | 135,321 | |
Professional services | 145,586 | 147,317 |
Other | 67 | 3,356 |
Total operations expense | 323,247 | 189,319 |
Net income | 1,112,553 | 1,188,658 |
Members (99%) | 1,101,427 | 1,176,771 |
Manager (1%) | $ 11,126 | $ 11,887 |
Statements of Income (Parenthet
Statements of Income (Parenthetical) (Unaudited) - Redwood Mortgage Investors IX [Member] | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Members investment | 99.00% | 99.00% |
Manager investment | 1.00% | 1.00% |
Statement of Changes in Members
Statement of Changes in Members' Capital (Unaudited) - USD ($) | 3 Months Ended | 126 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | ||
Beginning balance | $ 75,681,066 | |||
Net income | 1,112,553 | $ 1,188,658 | ||
Early withdrawal penalties | [1] | 4,414 | $ 64,704 | |
Ending balance | 75,782,889 | 75,782,889 | ||
RMC [Member] | ||||
Early withdrawal penalties | 9,733 | 45,500 | ||
Capital Members [Member] | ||||
Beginning balance | 81,755,930 | 79,198,453 | ||
Net income | 1,101,427 | 1,176,771 | ||
Organization and offering expenses allocated | (80,715) | (80,808) | ||
Early withdrawal penalties | 0 | 0 | ||
Ending balance | 81,747,167 | 79,965,409 | 81,747,167 | |
Capital Members [Member] | Contributions Admitted To Members Capital [Member] | ||||
Partners capital accounts | 1,271,500 | |||
Capital Members [Member] | Earnings Distributed To Members [Member] | ||||
Partners capital accounts | (1,130,877) | (1,111,007) | ||
Capital Members [Member] | Earnings Distributed Used In DRIP [Member] | ||||
Partners capital accounts | 589,564 | 602,896 | ||
Capital Members [Member] | Member's Redemptions [Member] | ||||
Partners capital accounts | (488,162) | (1,092,396) | ||
Managers Capital Net [Member] | ||||
Beginning balance | 133,268 | 125,200 | ||
Net income | 11,126 | 11,887 | ||
Early withdrawal penalties | 0 | 0 | ||
Ending balance | 144,394 | 138,359 | 144,394 | |
Managers Capital Net [Member] | Contributions Admitted To Members Capital [Member] | ||||
Partners capital accounts | 1,272 | |||
Unallocated Organization and Offering Expenses [Member] | ||||
Beginning balance | (2,260,068) | (2,519,458) | ||
Organization and offering expenses | (93,239) | |||
Organization and offering expenses allocated | 80,715 | 80,808 | ||
Early withdrawal penalties | 4,414 | 19,415 | ||
Ending balance | (2,165,927) | (2,475,629) | (2,165,927) | |
Unallocated Organization and Offering Expenses [Member] | RMC [Member] | ||||
Organization and offering expenses repaid by RMC | 9,012 | 36,845 | ||
Members Capital, Net [Member] | ||||
Beginning balance | 79,629,130 | 76,804,195 | ||
Net income | 1,112,553 | 1,188,658 | ||
Organization and offering expenses | (93,239) | |||
Early withdrawal penalties | 4,414 | 19,415 | ||
Ending balance | 79,725,634 | 77,628,139 | $ 79,725,634 | |
Members Capital, Net [Member] | RMC [Member] | ||||
Organization and offering expenses repaid by RMC | 9,012 | 36,845 | ||
Members Capital, Net [Member] | Contributions Admitted To Members Capital [Member] | ||||
Partners capital accounts | 1,272,772 | |||
Members Capital, Net [Member] | Earnings Distributed To Members [Member] | ||||
Partners capital accounts | (1,130,877) | (1,111,007) | ||
Members Capital, Net [Member] | Earnings Distributed Used In DRIP [Member] | ||||
Partners capital accounts | 589,564 | 602,896 | ||
Members Capital, Net [Member] | Member's Redemptions [Member] | ||||
Partners capital accounts | $ (488,162) | (1,092,396) | ||
Investors In Applicant Status [Member] | ||||
Beginning balance | 651,500 | |||
Early withdrawal penalties | 0 | |||
Ending balance | 1,499,263 | |||
Investors In Applicant Status [Member] | Contributions On Application [Member] | ||||
Partners capital accounts | 2,112,263 | |||
Investors In Applicant Status [Member] | Contributions Admitted To Members Capital [Member] | ||||
Partners capital accounts | (1,271,500) | |||
Investors In Applicant Status [Member] | Premiums Paid On Application By RMC [Member] | ||||
Partners capital accounts | $ 7,000 | |||
[1] | Prior to June 30, 2019, early withdrawal penalties collected were applied to the next installment due under the formation loan and to reduce the amount owed to RMC for O&O expenses. For periods beginning July 1, 2019, the O&O component of early withdrawal penalties are a reduction to O&O expenses repaid by RMC to members’ capital on scheduled redemptions. The amounts credited are determined by the ratio between the amount of the formation loan and the amount of offering costs incurred by the company. |
Statements of Cash Flows (Unaud
Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operations | ||
Interest income received | $ 1,439,773 | $ 1,274,865 |
Late fees | 8,048 | 16,985 |
Operations expense | (277,935) | (174,389) |
Total cash provided by operations | 1,169,886 | 1,117,461 |
Investing – loans | ||
Loans funded | (6,373,600) | (16,327,000) |
Loans sold to non-affiliate, net | 143,000 | |
Loan transferred from related mortgage fund | (2,296,677) | |
Principal collected | 11,859,810 | 11,889,592 |
Advances (made on) received from loans | 3,194 | (7,003) |
Total cash provided by (used in) investing | 3,192,727 | (4,301,411) |
Distributions to members | ||
Distributions to members | (1,019,741) | (1,555,007) |
Contributions by members, net | ||
Organization and offering expenses received (paid), net | 9,012 | (56,394) |
Formation loan funding | (140,928) | |
Total contributions by members, net | 9,012 | 1,923,246 |
Cash (distributed to) received from members, net | (1,010,729) | 368,239 |
Debt issuance costs | 87,611 | |
Total cash (used in) provided by financing | (1,098,340) | 368,239 |
Net increase (decrease) in cash | 3,264,273 | (2,815,711) |
Cash, beginning of period | 4,450,529 | 10,674,953 |
Cash, March 31, | 7,714,802 | 7,859,242 |
Net income | 1,112,553 | 1,188,658 |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Charge off of accrued interest | (11,857) | |
Recovery of loan losses | (75) | |
Change in operating assets and liabilities | ||
Accrued interest | 23,952 | (86,127) |
Accounts payable and accrued liabilities | 45,313 | 14,930 |
Total adjustments | 57,333 | (71,197) |
Total cash provided by operations | 1,169,886 | 1,117,461 |
Members Equity Contributions [Member] | ||
Contributions by members, net | ||
Contributions by new members | 2,120,568 | |
Earnings Distributed To Members [Member] | ||
Distributions to members | ||
Distributions to members | (541,313) | (508,111) |
Member's Redemptions [Member] | ||
Distributions to members | ||
Distributions to members | $ (478,428) | $ (1,046,896) |
Statements of Cash Flows (Paren
Statements of Cash Flows (Parenthetical) (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Non cash financing activity in early withdrawal penalties | $ 9,733 | $ 45,500 |
Non cash investing activity principal charges | 20,068 | 0 |
Formation Loan [Member] | ||
Non cash financing activity in early withdrawal penalties | 5,319 | 26,085 |
Unallocated Organization and Offering Expenses [Member] | ||
Non cash financing activity in early withdrawal penalties | $ 4,414 | $ 19,415 |
Organization and General
Organization and General | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Organization and General | NOTE 1 – ORGANIZATION AND GENERAL In the opinion of 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 unaudited financial statements should be read in conjunction with the audited financial statements included in the company’s Form 10-K for the year ended December 31, 2019, filed with the U.S. Securities and Exchange Commission (SEC). The results of operations for the three months ended March 31, 2020 are not necessarily indicative of the operating 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 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; • 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; • a line of credit; • loan sales to unaffiliated 3 rd • payments from RMC on the outstanding balance of the formation loan. The mortgage loans the company funds and/or invests in are arranged and generally are serviced by RMC. The ongoing ability of the company to source funds for loans from one or more of these sources may be adversely affected by the COVID-19 pandemic and the social and governmental responses and severe economic disruptions caused by the pandemic. (See “COVID-19,” below). 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 funding, and purchased at the current par value, which approximates fair value. The company intends to hold until maturity the loans in which it invests and does not presently intend to invest in mortgage loans primarily for the purpose of reselling such loans in the ordinary course of business; however, the company may sell mortgage loans (or fractional interests therein) when the manager determines that it appears to be advantageous for the company to do so, based upon then current interest rates, the length of time that the loan has been held by the company, the company’s credit risk and concentration risk and the overall investment objectives of the company. Loans sold to third parties may be sold for par, at a premium or, in the case of non-performing or under performing loans, at a discount. Company loans may be sold to third parties or to the manager or its related mortgage funds; however, any loan sold to the manager or a related mortgage fund thereof will be sold for a purchase price equal to the greater of (i) the par value of the loan or (ii) the fair market value of the loan. The manager will not receive commissions or broker fees with respect to loan sales conducted for the company; however, selling loans will increase members’ capital available for investing in new loans for which the manager will earn brokerage fees and other forms of compensation. The 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 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. Prior to May 2019, the manager was required to contribute to capital one tenth of one percent (0.1%) of the aggregate capital accounts of the members. RMC is entitled to 1% of the profits and losses of the company and to fees and reimbursements of qualifying cost as specified in the Operating Agreement. The company’s primary investment objectives are to: • yield a favorable rate of return from the company’s business of making and/or investing in loans; • preserve and protect the company’s capital by making and/or investing in loans secured by California real estate, preferably income-producing properties geographically situated in the San Francisco Bay Area and the coastal metropolitan regions of Southern California; and, • generate and distribute cash flow from these mortgage lending and investing activities. Members representing a majority of the outstanding units may, without the concurrence of the managers, vote to: • dissolve the company; • amend the Operating Agreement, subject to certain limitations; • approve or disapprove the sale of all or substantially all of the assets of the company; and • 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. Net income (losses) are allocated 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 partnership tax shelter investments. Federal and state income taxes are the obligation of the members, other than the annual California franchise tax and the California LLC cash receipts taxes paid by the company. The company’s net income, cash available for distribution, and net-distribution rate fluctuates depending on: • loan origination volume and the balance of capital available to lend; • the current and future interest rates negotiated with borrowers; • 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. 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. For periods prior to March 2018, this support increased RMI IX’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). 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.). In June 2019, RMC began collecting from RMI IX the asset management fee of three quarters of one percent annually (0.75%). Also in 2019, RMC arranged for RMI IX to be invoiced directly fees from an independent service bureau for information technology relating to the recordkeeping and reporting for the accounts of individual investors and their corresponding member accounts. In prior years these fees were invoiced to RMC and then billed to the company through the cost-reimbursement, all of which was waived. 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. COVID-19 In March 2020, the World Health Organization declared the coronavirus (COVID-19) outbreak a pandemic. Since that time, the coronavirus has spread throughout the United States, including in the California regions and markets in which the company lends. In response, the State of California, has instituted emergency restrictions that have substantially limited the operation of non-essential businesses and the activities of individuals. The COVID-19 pandemic and these restrictions have had a significant adverse effect on the global, US, and California economies and have caused significant disruption to the financial and real estate markets. Restrictions and economic conditions caused by COVID-19 have also caused record unemployment nationwide as well as a significant number of layoffs and furloughs in the regions and communities in which the company lends. The ultimate effect of COVID-19 on the California real estate markets and broader economy is not known nor is the ultimate length of time California and other regions will be subject to the restrictions described and their accompanying effects. Some states and regions have begun to ease prior restrictions which may improve economic and market conditions; however, if the easing of these restrictions results in significant increases in COVID-19 cases or deaths, reinstatement of prior restrictions may be required and the COVID-19 crisis prolonged. As of March 31, 2020, the company has seen an in increase in the number of borrowers delaying payments. However, as the company generally lends at loan to value ratios below 70%, the delays in payments has not increased the credit risk on the loans, and therefore based on the company’s assessment of the value of real estate collateralizing its loans, there has not been an increase in the allowance for loan losses during the three months ended March 31, 2020. In either case, the impacts of COVID-19 may have significant adverse effects on our business, financial condition and result of operations due to the inability of some borrowers to make principal and interest payments and a decrease in the volume of loans funded and the values of the California real properties that serve as collateral for the loans. Declines in the value of real estate may lead to increases in the allowance for loan losses. Moreover, the Federal Reserve has taken action to lower the Federal Funds rate, which may negatively affect interest income and, therefore, earnings, financial condition and results of operation of the company. Potential other issues and risks resulting from the COVID-19 pandemic include: • Should key personnel of the manager become incapacitated by the COVID-19 virus, or be required (voluntarily or involuntarily) to terminate active involvement with the manager due to the effects of the virus, the business of the manager could be adversely impacted. • The ability to enforce loan terms through foreclosure may be delayed and adversely effected by current or future limitations or moratoriums on foreclosures enacted by state or local authorities to address the impacts of COVID-19. • Loans secured by rental properties may be adversely impacted by restrictions or moratoriums on evictions enacted by federal, state or local authorities to address the impacts of COVID-19. • Partial or complete closures of county recording offices may affect the ability of the company to record deeds of trust and other documents and may affect the cost or ability of the company to obtain adequate title insurance for its loans. • The uncertainty of the effects of COVID-19 on borrowers, properties, and the economy generally may result in inaccuracy or delays in the recognition of loan losses or impairments by the company. • The company may incur additional costs to remedy damages caused by such disruptions and restrictions. Given the ongoing and dynamic nature of the circumstances, it is not possible to predict or estimate the ultimate impact of the coronavirus outbreak on the financial condition or results of operations and liquidity of the company for the remainder of 2020. On March 27, 2020, the “Coronavirus Aid, Relief, and Economic Security (CARES) Act” was signed into law. The company continues to examine the impact that the CARES Act may have on its business. Although the company does not expect the CARES Act to have a direct impact on the company, it may have an indirect impact on the company’s borrowers and its manager. At the time of issuance of these financial statements, the company is unable to estimate the impact that the CARES Act will have on its financial condition, results of operation, or liquidity for the remainder of 2020. 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 otherwise distributable to the members with respect to any period the respective amounts of O&O expenses allocated to the members’ accounts for the applicable period pursuant to the company’s reimbursement to RMC and allocation to members’ accounts of O&O expenses. The amount otherwise distributable, less the respective amounts of O&O expenses allocated to members, is the net distribution. Per the terms of the company’s Operating Agreement, cash available for distribution to the members is allocated among the members in proportion to their percentage interests (except with respect to differences in the amounts of O&O expenses allocated to the respective members during the applicable period) and in proportion to the number of days during the applicable month that they owned such percentage interests. See Note 3 (Manager and Other Related Parties) to the financial statements for a detailed discussion on the allocation of O&O expenses to members’ accounts. The distribution reinvestment plan (DRIP) provision of the Operating Agreement permits members to elect to have all or a portion of their monthly distributions reinvested in the purchase of additional units. Cash available for distributions allocable to members, other than those participating in the 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 cumulative program to date difference between earnings allocated to members’ capital accounts and net income available to members is approximately $70,000, which is net of the surplus of approximately $40,600 at the beginning of the year, and is expected to be offset by future earnings in excess of net distributions in 2020 as the cash available at March 31, 2020 and advances on the line of credit are deployed in new loans. 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. Manager’s interest If a manager is removed, withdrawn or terminated, the company will pay to the manager all amounts then accrued and due to the manager. Additionally, the company will terminate the manager’s interest in the company’s profits, losses, distributions and capital by payment of an amount in cash equal to the then-present fair value of such interest. 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 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 in those states in which approval has been obtained. The Registration Statement on Form S-3 became effective on May 9, 2019. As of March 31, 2020, the gross proceeds from sales of units to our members under our DRIP pursuant to the May 9, 2019 Form S-3 Registration Statement (after May 9, 2019) was approximately $2,204,000. 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 (for periods beginning May 1, 2019, DRIP units only) to: • make additional loans; • fund working capital reserves; • prior to May 2019, pay RMC up to 4.5% of proceeds from sale of units for O&O expenses, excluding units sold in the DRIP; and • prior to May 2019, fund a formation loan to RMC at up to 7% of proceeds from sale of units, excluding units sold in the DRIP. Commissions paid to broker-dealers/ Formation loan for periods prior to May 2019 Commissions for unit sales (other than DRIP units) 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.” Term of the company The term of the company will continue until 2028, unless sooner terminated as provided in the Operating Agreement, or extended by majority vote of the members. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Management estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions about the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities, at the dates of the financial statements and the reported amounts of revenues and expenses during the reported periods. Such estimates relate principally to the determination of the allowance for loan losses, including, when applicable, the valuation of impaired loans (which itself requires determining the fair value of the collateral), and the valuation of real estate owned, at acquisition and subsequently. Actual results could differ materially from these estimates. Fair value estimates GAAP defines fair value as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets and liabilities; it is not a forced transaction. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact and (iv) willing to transact. Fair values of assets and liabilities are determined based on the fair-value hierarchy established in GAAP. The hierarchy is comprised of three levels of inputs to be used: • Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the company has the ability to access at the measurement date. An active market is a market in which transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis. • Level 2 inputs are inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly in active markets and quoted prices for identical assets or liabilities that are not active, and inputs other than quoted prices that are observable or inputs derived from or corroborated by market data. • Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs reflect the company’s own assumptions about the assumptions market participants would use in pricing the asset or liability (including assumptions about risk). Unobservable inputs are developed based on the best information available in the circumstances and may include the company’s own data. The fair value of real property is determined by exercise of judgment based on management’s experience informed by appraisals (by licensed appraisers), brokers’ opinion of values and publicly available information on in-market transactions. Appraisals of commercial real property generally present three approaches to estimating value: 1) market comparables or sales approach; 2) cost to replace; and 3) capitalized cash flows or income approach. These approaches may or may not result in a common, single value. The market-comparables approach may yield several different values depending on certain basic assumptions, 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 in banks At March 31, 2020, 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 net of an interest reserve (one to two years) to insure timely interest payments at the inception of the loan. Any interest reserve is amortized over the period that the amount is prepaid. In the event of an early loan payoff, any unapplied interest reserves would be first applied to any accrued but unpaid interest and then as a reduction to the principal. In the normal course of the company’s operating activities, performing loans that are maturing or have matured may be renewed at then current market rates of interest and terms for new loans. Such renewals are not designated as impaired. From time to time, the manager negotiates and enters into loan modifications with borrowers whose loans are delinquent (non-performing). 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. In March 2020, various regulatory agencies issued an interagency statement on loan modifications and reporting for financial institutions working with borrowers affected by the Coronavirus. The interagency statement was effective immediately and impacted accounting for loan modifications. Under Accounting Standards Codification 310-40, “Receivables – Troubled Debt Restructurings by Creditors,” (“ASC 310-40”), a restructuring of debt constitutes a troubled debt restructuring (“TDR”) if the creditor, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider. The agencies confirmed with the staff of the FASB that short-term modifications made on a good faith basis in response to COVID- 19 to borrowers who were current prior to any relief, are not to be considered TDRs. This includes short-term (e.g., six months) modifications such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant. Borrowers considered current are those that are less than 30 days past due on their contractual payments at the time a modification program is implemented. The company is evaluating the potential impact that the interagency guidance will have on the company’s financial statements; however, this impact, if any cannot be quantified at this time. The company funds loans with the intent to hold the loans until maturity. From time to time the company may sell certain loans when the manager determines it to be in the best interest of the company. Loans are classified as held-for-sale once a decision has been made to sell loans and the loans held-for-sale have been identified. Allowance for loan losses Loans and the related accrued interest and advances (i.e., the loan balance) are analyzed on a periodic basis for ultimate recoverability. Collateral fair values are reviewed quarterly and the protective equity for each loan is computed. As used herein, “protective equity” is the dollar amount by which the net realizable value (i.e., fair value less the cost to sell) of the collateral, net of any senior liens exceeds the loan balance, where “loan balance” is the sum of the unpaid principal, advances and the recorded interest thereon. If based upon current information and events, it is probable the company will be unable to collect all amounts due according to the contractual terms of the loan agreement, then 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 that are deemed collateral dependent a provision for loan losses is recorded to adjust the allowance for loan losses (principal and/or recorded interest) in an amount such that the net carrying amount (unpaid principal 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. Any amounts collected after a charge off is deemed a recovery of loan losses. At foreclosure, any excess of the recorded investment in the loan (accounting basis) over the net realizable value of the collateral 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. Debt issuance costs Debt issuance costs are the fees and commissions incurred in the course of obtaining a line of credit for services from banks, law firms and other professionals and are amortized as interest expense over the term of the line of credit. 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 not only historical trends and current conditions, but must also consider forecasts about future economic conditions to determine the expected credit loss over the remaining life of an instrument. This will be a significant change from the current incurred credit loss model, and generally may result in allowances being recognized in earlier periods than under the current credit loss model. The ASU is effective for smaller reporting companies for interim and annual reporting periods in 2023. RMI IX invests in real estate secured loans made with the expectation that the possibility of credit losses is remote as a result of substantial protective equity provided by the underlying collateral. The real estate secured programs and low loan-to-value ratios have caused 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. However, the impact, if any, upon adoption will be dependent upon the facts and circumstances relating to our loans at that date. |
Manager and Other Related Parti
Manager and Other Related Parties | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Manager and Other Related Parties | NOTE 3 – MANAGER AND OTHER RELATED PARTIES The Operating Agreement provides for fees as compensation to the manager and for reimbursement of qualifying costs, as detailed below. Loan administrative fees, asset management fees, and costs from RMC, and the amounts waived by RMC for the three months ended March 31, 2020 are presented in the following table. For the three months ended Loan Admin Fees Asset Management Fees Costs from RMC Total March 31, 2020 Chargeable/reimbursable $ 63,736 $ 135,321 $ 152,716 $ 351,773 RMC support (63,736 ) — (152,716 ) (216,452 ) Net charged $ — $ 135,321 $ — $ 135,321 Loan administrative fees, asset management fees, and costs from RMC, and the amounts waived by RMC for the three months ended March 31, 2019 are presented in the following table. For the three months ended Loan Admin Fees Asset Management Fees Costs from RMC Total March 31, 2019 Chargeable/reimbursable $ 163,270 $ 119,187 $ 179,656 $ 462,113 RMC support (163,270 ) (119,187 ) (179,656 ) (462,113 ) Net charged $ — $ — $ — $ — 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 funded 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. The company began paying RMC the asset management fees for periods commencing June 1, 2019. 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 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 related mortgage funds managed by RMC. RMC, at its sole discretion, has elected to waive reimbursement for operating expenses during the three months ended March 31, 2020 and 2019. 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 paid by the borrowers to RMC are not recorded by the company and approximated $152,000 and $384,000 for the three months ended March 31, 2020 and 2019, respectively. - Other fees – In the ordinary course of business, performing loans may be transferred by executed assignment, in-part or in-full, between the related mortgage funds at par. During the three months ended March 31, 2020, Redwood Mortgage Investors VIII, LP, a related mortgage fund, transferred to the company one performing loan in-full at par value, which approximates fair value, of approximately $2,297,000. The company paid cash for the loan and the related mortgage fund has no continuing obligation or involvement on the loan. No loans were transferred during the three months ended March 31, 2019. Formation loan Formation loan transactions are presented in the following table. 2020 Balance, January 1, 2020 $ 3,948,064 Early withdrawal penalties applied (5,319 ) Balance, March 31, 2020 $ 3,942,745 RMC is repaying the formation loan in annual installments of principal, without interest, of $492,843, less early withdrawal penalties such that the formation loan is paid in full on December 31, 2027, and prior to the end of the term of the company in 2028. 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 months ended March 31, 2020 and 2019. 2020 2019 Capital redemptions-without penalty $ 317,672 $ 367,396 Capital redemptions-subject to penalty 170,490 725,000 Total $ 488,162 $ 1,092,396 Early withdrawal penalties $ 9,733 $ 45,500 At March 31, 2020, scheduled future redemptions of members' capital was $666,259, all of which is scheduled for payment in 2020. 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 for the three months ended March 31, 2020 and since inception are summarized in the following table. 2020 Since Inception Balance, beginning of period $ 2,260,068 $ — O&O expenses reimbursed to RMC — 3,671,853 Early withdrawal penalties applied (1) (4,414 ) (64,704 ) O&O expenses allocated (2) (80,715 ) (1,096,305 ) O&O expenses repaid to Members' Capital by RMC (3) (9,012 ) (344,917 ) Balance, March 31, 2020 $ 2,165,927 $ 2,165,927 (1) Prior to June 30, 2019, early withdrawal penalties collected were applied to the next installment due under the formation loan and to reduce the amount owed to RMC for O&O expenses. For periods beginning July 1, 2019, the O&O component of early withdrawal penalties are a reduction to O&O expenses repaid by RMC to members’ capital on scheduled redemptions. The amounts credited are determined by the ratio between the amount of the formation loan and the amount of offering costs incurred by the company. (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 RMI IX for the amount of unallocated O&O expenses attributed to members’ capital accounts if the member redeems prior to the 40 quarterly allocations. RMC estimated its future obligation to repay unallocated O&O expenses on scheduled redemptions as of March 31, 2020, to be approximately $11,660, which may be offset in part by early withdrawal penalties collected in future periods. The payable to affiliate as of March 31, 2020 of $53,173 is primarily the accrual of asset management fees of $45,107 which was paid in May 2020 and certain intercompany payables incurred in the normal course of business, which were paid in April 2020. |
Loans
Loans | 3 Months Ended |
Mar. 31, 2020 | |
Receivables [Abstract] | |
Loans | NOTE 4 – LOANS As of March 31, 2020, 66 of the company’s 69 loans (representing 98% of the aggregate principal of the company’s loan portfolio) have a loan term of five years or less. The remaining loans have terms longer than five years. Substantially all loans are written without a prepayment penalty provision. As of March 31, 2020, 45 loans outstanding (representing 41% 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 months ended March 31, 2020. Principal, beginning of period $ 70,660,284 Loans funded 6,373,600 Loan transferred from related mortgage fund 2,296,677 Principal charged off (20,068 ) Principal collected (11,859,810 ) Principal, March 31, 2020 $ 67,450,683 During the three months ended March 31, 2020, the company renewed two maturing (or matured) loans with aggregated principal of approximately $671,000 which are not included in the activity shown in the table above. See Note 3 (Manager and Other Related Parties) for a description of loans transferred by executed assignments between related mortgage funds. Pursuant to California regulatory requirements, borrower payments are deposited into a trust account established by RMC with an independent bank. Funds are disbursed to the company as collected, which can range from same day for wire transfers and up to two weeks after deposit for checks. Borrower payments held in the trust account that are yet to be disbursed to the company are not included in the financial statements. At March 31, 2020, $21,874 of borrower payments made by check, was on deposit in the bank trust account, which was disbursed to the company’s account by April 15, 2020. At December 31, 2019, $71,416 of borrower payments made by check, was on deposit in the trust account, all of which was disbursed to the company by January 23, 2020, when they were recorded by the company. Loan characteristics Secured loans had the characteristics presented in the following table. March 31, December 31, 2020 2019 Number of secured loans 69 77 Secured loans – principal $ 67,450,683 $ 70,660,284 Secured loans – lowest interest rate (fixed) 6.8 % 7.8 % Secured loans – highest interest rate (fixed) 10.5 % 10.5 % Average secured loan – principal $ 977,546 $ 917,666 Average principal as percent of total principal 1.4 % 1.3 % Average principal as percent of members’ capital, net 1.2 % 1.2 % Average principal as percent of total assets 1.3 % 1.2 % Largest secured loan – principal $ 6,735,000 $ 6,735,000 Largest principal as percent of total principal 10.0 % 9.5 % Largest principal as percent of members’ capital, net 8.4 % 8.5 % Largest principal as percent of total assets 8.9 % 8.9 % Smallest secured loan – principal $ 111,771 $ 125,656 Smallest principal as percent of total principal 0.2 % 0.2 % Smallest principal as percent of members’ capital, net 0.1 % 0.2 % Smallest principal as percent of total assets 0.1 % 0.2 % Number of California counties where security is located 16 17 Largest percentage of principal in one California county 31.4 % 27.0 % Number of secured loans with filed notice of default — — Secured loans in foreclosure – principal $ — $ — As of March 31, 2020, 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 March 31, 2020, the company had no construction loans outstanding, no rehabilitation loans outstanding, and no commitments to fund construction, rehabilitation or other loans. Lien position At funding, secured loans had the lien positions presented in the following table. March 31, 2020 December 31, 2019 Loans Principal Percent Loans Principal Percent First trust deeds 40 $ 43,279,537 64 % 42 $ 42,712,037 60 % Second trust deeds 29 24,171,146 36 35 27,948,247 40 Total principal, secured loans 69 67,450,683 100 % 77 70,660,284 100 % Liens due other lenders at loan closing 52,882,494 54,062,023 Total debt $ 120,333,177 $ 124,722,307 Appraised property value at loan closing $ 226,913,000 $ 237,453,000 Percent of total debt to appraised values (LTV) at loan closing (1) 55.9 % 55.3 % (1) Based on appraised values and liens due other lenders at loan closing. The weighted-average loan-to-value (LTV) computation above does not take into account subsequent increases or decreases in property values following the loan closing nor does it include decreases or increases on senior liens to other lenders. Property type Secured loans summarized by property type are presented in the following table. March 31, 2020 December 31, 2019 Loans Principal Percent Loans Principal Percent Single family (2) 43 $ 27,210,278 40 % 53 $ 32,361,343 46 % Multi-family 9 9,690,000 15 9 9,219,497 13 Commercial 17 30,550,405 45 15 29,079,444 41 Total principal, secured loans 69 $ 67,450,683 100 % 77 $ 70,660,284 100 % (2) Single family property type as of March 31, 2020 consists of 8 loans with principal of $4,695,984 that are owner occupied and 35 loans with principal of $22,514,294 that are non-owner occupied. At December 31, 2019, single family property type consisted of 11 loans with principal of $6,236,571 that are owner occupied and 42 loans with principal of $26,124,772 that are non-owner occupied. Distribution of loans within California The distribution of secured loans within California by counties is presented in the following table. March 31, 2020 December 31, 2019 Principal Percent Principal Percent San Francisco Bay Area (3) Santa Clara $ 21,188,642 31.4 % $ 19,064,638 27.0 % San Mateo 7,796,910 11.6 10,837,195 15.3 San Francisco 6,941,591 10.3 7,735,173 10.9 Alameda 3,720,691 5.5 2,930,219 4.2 Contra Costa 799,405 1.2 400,000 0.6 Santa Cruz — — 264,515 0.4 Marin — — 249,628 0.4 40,447,239 60.0 41,481,368 58.8 Other Northern California Sutter 3,815,000 5.7 3,815,000 5.4 Monterey 1,110,000 1.6 1,110,000 1.6 Tehama 405,000 0.6 405,000 0.6 Sacramento 154,083 0.2 492,216 0.6 5,484,083 8.1 5,822,216 8.2 Northern California Total 45,931,322 68.1 47,303,584 67.0 Los Angeles & Coastal Los Angeles 10,158,072 15.1 12,531,312 17.7 San Diego 4,659,602 6.9 4,983,331 7.1 Orange 3,066,464 4.6 3,067,396 4.3 Santa Barbara 497,185 0.7 497,977 0.7 San Luis Obispo 430,000 0.6 — — 18,811,323 27.9 21,080,016 29.8 Other Southern California San Bernardino 1,632,000 2.4 1,200,000 1.7 Riverside 1,076,038 1.6 1,076,684 1.5 2,708,038 4.0 2,276,684 3.2 Southern California Total 21,519,361 31.9 23,356,700 33.0 Total principal, secured loans $ 67,450,683 100.0 % $ 70,660,284 100.0 % (3) Includes Silicon Valley Scheduled maturities Secured loans are scheduled to mature as presented in the following table as of March 31, 2020. Loans Principal Percent 2020 (4) 20 $ 14,696,793 22 % 2021 28 39,520,905 59 2022 9 5,493,499 8 2023 3 743,925 1 2024 1 246,038 — Thereafter 6 5,850,180 9 Total future maturities 67 66,551,340 99 Matured as of March 31, 2020 2 899,343 1 Total principal, secured loans 69 $ 67,450,683 100 % (4) Loans scheduled to mature in 2020 after March 31. It is the company’s experience that loans may be repaid or renewed before, at or after the contractual maturity date. For matured loans, the company may continue to accept payments while pursuing collection of principal or while negotiating an extension of the loan’s maturity date. The timing of future cash receipts from secured loans will differ from scheduled maturities. Delinquency/Non-performing loans Secured loans summarized by payment delinquency are presented in the following table. March 31, 2020 December 31, 2019 Loans Principal Loans Principal Current 59 $ 55,688,367 65 $ 62,174,140 Past Due 30-89 days 6 7,343,231 8 3,952,306 90-179 days 2 327,478 2 3,520,112 180 or more days 2 4,091,607 2 1,013,726 Total past due 10 11,762,316 12 8,486,144 Total principal, secured loans 69 $ 67,450,683 77 $ 70,660,284 No loan payment modifications were made during the three months ended March 31, 2020 and 2019 and the company had no troubled debt restructurings in effect at March 31, 2020 and December 31, 2019. Payments in arrears for non-performing secured loans (i.e., monthly interest and principal payments past due 30 or more days), are presented in the following table as of March 31, 2020. Principal (5) Interest (6) Loans Past maturity Monthly payments Past maturity Monthly payments Total payments in arrears Payments in arrears 30-89 days (1-3 payments) 6 $ — $ 703 $ — $ 74,934 $ 75,637 90-179 days (4-6 payments) 2 137,078 850 2,656 3,689 144,273 180 or more days (6 or more payments) 2 762,265 12,984 15,722 184,501 975,472 Total payments past due 10 $ 899,343 $ 14,537 $ 18,378 $ 263,124 $ 1,195,382 (5) At March 31, 2020, two loans were past maturity. One loan with principal of $137,078 matured on December 1, 2019 and is included in principal past maturity 90-179 days. One loan with principal of $762,265 matured on April 1, 2019 is included in principal past maturity 180 or more days. (6) Interest – past maturity 90-179 days includes foregone interest of $885 for one loan which was past maturity and designated as in non-accrual status. Interest – monthly payments 180 or more days of $184,501 includes foregone interest of $26,357 for one loan which was 213 days delinquent and designated as in non-accrual status. Secured loans in non-accrual status are summarized in the following table. March 31, 2020 December 31, 2019 Number of loans 4 3 Principal $ 4,419,085 $ 1,204,495 Advances 8,843 10,677 Accrued interest receivable 187,104 37,799 Total recorded investment $ 4,615,032 $ 1,252,971 Foregone interest $ 54,485 $ 3,952 At March 31, 2020, no loans were 90 or more days delinquent and not in non-accrual status. One loan with principal of approximately $3,329,000 was 90 or more days delinquent as to principal or interest and not in non-accrual status at December 31, 2019. In 2019 the company entered into two forbearance agreements with borrowers. • One loan with principal of $762,265 matured on April 1, 2019 and was 366 days delinquent and was designated impaired and in non-accrual status at March 31, 2020. The company entered into a forbearance agreement with the borrower in August 2019, whereby the borrower agreed to resume monthly payments and the company agreed to forbear collection activity until April 1, 2020. • One loan with principal of $3,329,342 was 213 days delinquent and was designated impaired and in non-accrual status at March 31, 2020. The company 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 the company agreed to forbear collection activity until August 1, 2020. Forbearance agreements do not modify the maturity date or delinquency data presented in the tables above. At March 31, 2020, the company had one workout agreement with a borrower. The loan, with principal of $190,400 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 the company. This agreement extended 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. At March 31, 2020 the loan was 91 days delinquent and was designated as impaired and in non-accrual status. One loan with principal of $137,078, matured on December 1, 2019, was 122 days delinquent and was designated as impaired and in non-accrual status at March 31, 2020. Provision/allowance for loan losses and impaired loans Generally, the company has not recorded an allowance for loan losses as all loans have protective equity such that collection is deemed probable for all recorded amounts due on the loan. From time to time, the manager may deem it in the best interest of the company to agree to concessions to borrowers to facilitate a sale of collateral or refinance transactions primarily for secured loans in second lien position. For the three months ended March 31, 2020, RMI IX recorded an insignificant recovery for loan losses. There were no provision or allowance for loan losses recorded during the three months ended March 31, 2019. Activity in the allowance for loan losses is presented in the following table for the three months ended March 31, 2020. 2020 Balance, beginning of period $ 87,000 Recovery for loan losses (75 ) Charge-offs (31,925 ) Balance March 31, 2020 $ 55,000 Loans designated impaired and the associated allowance for loan losses is presented in the following table. March 31, 2020 December 31, 2019 Principal $ 4,419,085 $ 4,533,838 Recorded investment (7) 4,615,032 4,719,705 Impaired loans without allowance 4,615,032 4,451,368 Impaired loans with allowance — 268,337 Allowance for loan losses, impaired loans — 37,000 Number of loans 4 4 Weighted average LTV at origination 64.1 % 66.0 % (7) Recorded investment is the sum of the principal, advances, and accrued interest receivable for financial reporting purposes. As of March 31, 2020 and December 31, 2019, loans designated impaired had an average recorded investment balance and interest income recognized and interest income received in cash for the three months ended March 31, 2020 and the year ended December 31, 2019 is presented in the following table. March 31, 2020 December 31, 2019 Average recorded investment $ 4,474,982 $ 4,334,931 Interest income recognized 46,823 169,585 Interest income received in cash 19,438 67,990 Fair Value The following methods and assumptions are used when estimating fair value: Secured loans, performing and non-performing not designated as impaired (Level 3) - Each loan is reviewed quarterly for its delinquency, LTV adjusted for the most recent valuation of the underlying collateral, remaining term to maturity, borrower’s payment history and other factors. Due to the nature of the company’s loans and borrowers, the fair value of loan balances secured by deeds of trust approximates the recorded amount (per the financial statements) due to the following: • are of shorter terms at origination than commercial real estate loans by institutional lenders and conventional single-family home mortgage lenders; • are written without a prepayment penalty causing uncertainty/a lack of predictability as to the expected duration of the loan; and • have limited marketability and are not yet sellable into an established secondary market. Secured loans, non-performing and designated impaired (Level 3) - The fair value of secured loans, non-performing and designated impaired is the lesser of the fair value of the collateral or the enforceable amount of the note. Secured loans designated impaired are collateral dependent because it is expected that the primary source of repayment will not be from the borrower but rather from the collateral. The fair value of the collateral is determined on a nonrecurring basis by exercise of judgment based on management’s experience informed by appraisals (by licensed appraisers), brokers’ opinion of values and publicly available information on in-market transactions (Level 3 inputs). When the fair value of the collateral exceeds the enforceable amount of the note, the borrower is likely to redeem the note. Accordingly, third party market participants would generally pay the fair value of the collateral, but no more than the enforceable amount of the note. The following methods and assumptions are used to determine the fair value of the collateral securing a loan. Single family – Management’s preferred method for determining the fair market value of its single-family residential assets is the sale comparison method. Management primarily obtains sale comps via its subscription to the RealQuest service, but also uses free online services such as Zillow.com and other available resources to supplement this data. Sale comps are reviewed and adjusted for similarity to the subject property, examining features such as proximity to subject, number of bedrooms and bathrooms, square footage, sale date, condition and year built. If applicable sale comps are not available or deemed unreliable, management will seek additional information in the form of brokers’ opinions of value or appraisals. Multi-family residential – Management’s preferred method for determining the aggregate retail value of its multifamily units is the sale comparison method. Sale comps are 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. 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. When adequate sale comps are not available or reliable net operating income information is not available or the project is under development or is under-performing to market, management will seek additional information and analysis to determine the cost to improve and the intrinsic fair value and/or management will seek additional information in the form of brokers’ opinion of value or appraisals. Commercial land – Commercial land has many variations/uses, thus requiring management to employ a variety of methods depending upon the unique characteristics of the subject land, including a determination of its highest and best use. Management may rely on information in the form of a sale comparison analysis (where adequate sale comps are available), brokers’ opinion of value, or appraisal. |
Line of Credit
Line of Credit | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Line of Credit | NOTE 5 – LINE OF CREDIT In March 2020, RMI IX entered into a revolving line of credit and term loan agreement with a bank pursuant to which RMI IX can borrow up to a maximum principal of $10 million subject to a borrowing base calculation. Amounts under the agreement are secured by a first priority security interest in the notes and deeds of trust of the pledged loans in the borrowing base. The agreement matures March 13, 2022 when all amounts outstanding are then due. The company has the option at the maturity date to convert the then outstanding principal balance on the line of credit to a one-year term loan - for a fee of one-quarter of one percent (0.25%) – thereby extending the maturity date to March 13, 2023. Interest on the outstanding principal is payable monthly and accrues at the per annum rate of the greater of (i) five percent (5%) or (ii) the sum of the one-month LIBOR rate plus three and one-quarter percent (3.25%). If the company does not maintain the required compensating balance with a minimum daily average of $1.0 million for any day during the calendar quarter, the interest rate automatically increases by one-quarter of one percent (0.25%) above that rate which would otherwise be applicable for the next calendar quarter retroactive to the beginning of the calendar quarter in which the compensating balance is not maintained. Commencing with the quarter ending September 30, 2020, for each calendar quarter during which the aggregate average daily principal is less than fifty percent (50%) of the maximum principal of $10 million, there is a quarterly unused line fee equal to one-half of one percent (0.50%) per annum of the average daily difference between the principal outstanding and the maximum principal of $10 million. Principal of pledged loans was approximately $17.9 million at month-end April 2020 with a maximum advance thereon of approximately $8.8 million, with $5.0 million advanced and outstanding. Available borrowings under the revolving line of credit was effective beginning in April 2020. The loan proceeds are to be used exclusively to fund secured loans. The loan agreement provides for customary financial and borrowing base reporting by RMI IX to the lending bank and specifies that RMI IX shall maintain (i) minimum tangible net worth of $50 million, net of amounts due from related companies; (ii) debt service coverage ratio at all times of not less than 2.00 to 1.00; and (iii) loan payment delinquency of less ten percent (10%) on a quarterly basis as of the calendar quarter-end commencing with the calendar quarter ending March 31, 2020 calculated as the principal of loans with payments over 61-days past due, less loan loss allowances, divided by total principal of RMI IX loans. The loan agreement provides that in the event the loan payment delinquency rate exceeds 10.0% as of the end of any quarter, the bank will cease to make any further advances but agrees to not accelerate repayment of the loan. |
Commitments and Contingencies,
Commitments and Contingencies, Other Than Loan Commitments | 3 Months Ended |
Mar. 31, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies, Other Than Loan Commitments | NOTE 6 – COMMITMENTS AND CONTINGENCIES, OTHER THAN LOAN COMMITMENTS Commitments At March 31, 2020, scheduled future redemptions of members' capital was $666,259, all of which is scheduled for payment in 2020. The company has contractual obligations to RMC per the Operating Agreement. See Note 3 (Manager and Other Related Parties) for a more detailed discussion on the company’s contractual obligations to RMC. 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 March 31, 2020, 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 | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 7 – SUBSEQUENT EVENTS As of May 13, 2020, April contractual loan payments from loans which existed at March 31, 2020 were received from approximately 86% of our borrowers. In addition, the company received a number of short-term loan payment relief requests, most of which were in the form of requests for deferral of payments or requests for further discussion of COVID-19 related relief. No requests were granted and four remain pending as of May 13, 2020. The manager evaluated subsequent events that have occurred after March 31, 2020 and determined that there were no other events or transactions occurring during this reporting period that require recognition or disclosure in the unaudited financial statements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of presentation The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). |
Management Estimates | Management estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions about the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities, at the dates of the financial statements and the reported amounts of revenues and expenses during the reported periods. Such estimates relate principally to the determination of the allowance for loan losses, including, when applicable, the valuation of impaired loans (which itself requires determining the fair value of the collateral), and the valuation of real estate owned, at acquisition and subsequently. Actual results could differ materially from these estimates. |
Fair Value Estimates | Fair value estimates GAAP defines fair value as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets and liabilities; it is not a forced transaction. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact and (iv) willing to transact. Fair values of assets and liabilities are determined based on the fair-value hierarchy established in GAAP. The hierarchy is comprised of three levels of inputs to be used: • Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the company has the ability to access at the measurement date. An active market is a market in which transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis. • Level 2 inputs are inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly in active markets and quoted prices for identical assets or liabilities that are not active, and inputs other than quoted prices that are observable or inputs derived from or corroborated by market data. • Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs reflect the company’s own assumptions about the assumptions market participants would use in pricing the asset or liability (including assumptions about risk). Unobservable inputs are developed based on the best information available in the circumstances and may include the company’s own data. The fair value of real property is determined by exercise of judgment based on management’s experience informed by appraisals (by licensed appraisers), brokers’ opinion of values and publicly available information on in-market transactions. Appraisals of commercial real property generally present three approaches to estimating value: 1) market comparables or sales approach; 2) cost to replace; and 3) capitalized cash flows or income approach. These approaches may or may not result in a common, single value. The market-comparables approach may yield several different values depending on certain basic assumptions, 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 In Banks | Cash in banks At March 31, 2020, 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 net of an interest reserve (one to two years) to insure timely interest payments at the inception of the loan. Any interest reserve is amortized over the period that the amount is prepaid. In the event of an early loan payoff, any unapplied interest reserves would be first applied to any accrued but unpaid interest and then as a reduction to the principal. In the normal course of the company’s operating activities, performing loans that are maturing or have matured may be renewed at then current market rates of interest and terms for new loans. Such renewals are not designated as impaired. From time to time, the manager negotiates and enters into loan modifications with borrowers whose loans are delinquent (non-performing). 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. In March 2020, various regulatory agencies issued an interagency statement on loan modifications and reporting for financial institutions working with borrowers affected by the Coronavirus. The interagency statement was effective immediately and impacted accounting for loan modifications. Under Accounting Standards Codification 310-40, “Receivables – Troubled Debt Restructurings by Creditors,” (“ASC 310-40”), a restructuring of debt constitutes a troubled debt restructuring (“TDR”) if the creditor, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider. The agencies confirmed with the staff of the FASB that short-term modifications made on a good faith basis in response to COVID- 19 to borrowers who were current prior to any relief, are not to be considered TDRs. This includes short-term (e.g., six months) modifications such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant. Borrowers considered current are those that are less than 30 days past due on their contractual payments at the time a modification program is implemented. The company is evaluating the potential impact that the interagency guidance will have on the company’s financial statements; however, this impact, if any cannot be quantified at this time. The company funds loans with the intent to hold the loans until maturity. From time to time the company may sell certain loans when the manager determines it to be in the best interest of the company. Loans are classified as held-for-sale once a decision has been made to sell loans and the loans held-for-sale have been identified. |
Allowance for Loan Losses | Allowance for loan losses Loans and the related accrued interest and advances (i.e., the loan balance) are analyzed on a periodic basis for ultimate recoverability. Collateral fair values are reviewed quarterly and the protective equity for each loan is computed. As used herein, “protective equity” is the dollar amount by which the net realizable value (i.e., fair value less the cost to sell) of the collateral, net of any senior liens exceeds the loan balance, where “loan balance” is the sum of the unpaid principal, advances and the recorded interest thereon. If based upon current information and events, it is probable the company will be unable to collect all amounts due according to the contractual terms of the loan agreement, then 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 that are deemed collateral dependent a provision for loan losses is recorded to adjust the allowance for loan losses (principal and/or recorded interest) in an amount such that the net carrying amount (unpaid principal 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. Any amounts collected after a charge off is deemed a recovery of loan losses. At foreclosure, any excess of the recorded investment in the loan (accounting basis) over the net realizable value of the collateral 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. |
Debt issuance costs | Debt issuance costs Debt issuance costs are the fees and commissions incurred in the course of obtaining a line of credit for services from banks, law firms and other professionals and are amortized as interest expense over the term of the line of credit. |
Recently Issued Accounting Pronouncements | Recently issued accounting pronouncements Accounting and Financial reporting for Expected Credit Losses The 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 not only historical trends and current conditions, but must also consider forecasts about future economic conditions to determine the expected credit loss over the remaining life of an instrument. This will be a significant change from the current incurred credit loss model, and generally may result in allowances being recognized in earlier periods than under the current credit loss model. The ASU is effective for smaller reporting companies for interim and annual reporting periods in 2023. RMI IX invests in real estate secured loans made with the expectation that the possibility of credit losses is remote as a result of substantial protective equity provided by the underlying collateral. The real estate secured programs and low loan-to-value ratios have caused 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. However, the impact, if any, upon adoption will be dependent upon the facts and circumstances relating to our loans at that date. |
Manager and Other Related Par_2
Manager and Other Related Parties (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Summary of Loan Administrative Fees, Administration Fees and Operations Expenses, for Reimbursements and amounts Waived | Loan administrative fees, asset management fees, and costs from RMC, and the amounts waived by RMC for the three months ended March 31, 2020 are presented in the following table. For the three months ended Loan Admin Fees Asset Management Fees Costs from RMC Total March 31, 2020 Chargeable/reimbursable $ 63,736 $ 135,321 $ 152,716 $ 351,773 RMC support (63,736 ) — (152,716 ) (216,452 ) Net charged $ — $ 135,321 $ — $ 135,321 Loan administrative fees, asset management fees, and costs from RMC, and the amounts waived by RMC for the three months ended March 31, 2019 are presented in the following table. For the three months ended Loan Admin Fees Asset Management Fees Costs from RMC Total March 31, 2019 Chargeable/reimbursable $ 163,270 $ 119,187 $ 179,656 $ 462,113 RMC support (163,270 ) (119,187 ) (179,656 ) (462,113 ) Net charged $ — $ — $ — $ — |
Schedule of Accounts, Notes, Loans and Financing Receivable | Formation loan transactions are presented in the following table. 2020 Balance, January 1, 2020 $ 3,948,064 Early withdrawal penalties applied (5,319 ) Balance, March 31, 2020 $ 3,942,745 |
Schedule of Unit Redemptions | The table below presents the company’s unit redemptions for the three months ended March 31, 2020 and 2019. 2020 2019 Capital redemptions-without penalty $ 317,672 $ 367,396 Capital redemptions-subject to penalty 170,490 725,000 Total $ 488,162 $ 1,092,396 Early withdrawal penalties $ 9,733 $ 45,500 |
Summary of Organization and Offering Expenses | Unallocated O&O transactions for the three months ended March 31, 2020 and since inception are summarized in the following table. 2020 Since Inception Balance, beginning of period $ 2,260,068 $ — O&O expenses reimbursed to RMC — 3,671,853 Early withdrawal penalties applied (1) (4,414 ) (64,704 ) O&O expenses allocated (2) (80,715 ) (1,096,305 ) O&O expenses repaid to Members' Capital by RMC (3) (9,012 ) (344,917 ) Balance, March 31, 2020 $ 2,165,927 $ 2,165,927 (1) Prior to June 30, 2019, early withdrawal penalties collected were applied to the next installment due under the formation loan and to reduce the amount owed to RMC for O&O expenses. For periods beginning July 1, 2019, the O&O component of early withdrawal penalties are a reduction to O&O expenses repaid by RMC to members’ capital on scheduled redemptions. The amounts credited are determined by the ratio between the amount of the formation loan and the amount of offering costs incurred by the company. (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 RMI IX for the amount of unallocated O&O expenses attributed to members’ capital accounts if the member redeems prior to the 40 quarterly allocations. RMC estimated its future obligation to repay unallocated O&O expenses on scheduled redemptions as of March 31, 2020, to be approximately $11,660, which may be offset in part by early withdrawal penalties collected in future periods. |
Loans (Tables)
Loans (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Secured Loan Principal Transactions | Secured loan transactions are summarized in the following table for the three months ended March 31, 2020. Principal, beginning of period $ 70,660,284 Loans funded 6,373,600 Loan transferred from related mortgage fund 2,296,677 Principal charged off (20,068 ) Principal collected (11,859,810 ) Principal, March 31, 2020 $ 67,450,683 |
Secured Loans Characteristics | Secured loans had the characteristics presented in the following table. March 31, December 31, 2020 2019 Number of secured loans 69 77 Secured loans – principal $ 67,450,683 $ 70,660,284 Secured loans – lowest interest rate (fixed) 6.8 % 7.8 % Secured loans – highest interest rate (fixed) 10.5 % 10.5 % Average secured loan – principal $ 977,546 $ 917,666 Average principal as percent of total principal 1.4 % 1.3 % Average principal as percent of members’ capital, net 1.2 % 1.2 % Average principal as percent of total assets 1.3 % 1.2 % Largest secured loan – principal $ 6,735,000 $ 6,735,000 Largest principal as percent of total principal 10.0 % 9.5 % Largest principal as percent of members’ capital, net 8.4 % 8.5 % Largest principal as percent of total assets 8.9 % 8.9 % Smallest secured loan – principal $ 111,771 $ 125,656 Smallest principal as percent of total principal 0.2 % 0.2 % Smallest principal as percent of members’ capital, net 0.1 % 0.2 % Smallest principal as percent of total assets 0.1 % 0.2 % Number of California counties where security is located 16 17 Largest percentage of principal in one California county 31.4 % 27.0 % Number of secured loans with filed notice of default — — Secured loans in foreclosure – principal $ — $ — |
Secured Loans by Lien Position in the Collateral | At funding, secured loans had the lien positions presented in the following table. March 31, 2020 December 31, 2019 Loans Principal Percent Loans Principal Percent First trust deeds 40 $ 43,279,537 64 % 42 $ 42,712,037 60 % Second trust deeds 29 24,171,146 36 35 27,948,247 40 Total principal, secured loans 69 67,450,683 100 % 77 70,660,284 100 % Liens due other lenders at loan closing 52,882,494 54,062,023 Total debt $ 120,333,177 $ 124,722,307 Appraised property value at loan closing $ 226,913,000 $ 237,453,000 Percent of total debt to appraised values (LTV) at loan closing (1) 55.9 % 55.3 % (1) Based on appraised values and liens due other lenders at loan closing. The weighted-average loan-to-value (LTV) computation above does not take into account subsequent increases or decreases in property values following the loan closing nor does it include decreases or increases on senior liens to other lenders. |
Secured Loans by Property Type of the Collateral | Secured loans summarized by property type are presented in the following table. March 31, 2020 December 31, 2019 Loans Principal Percent Loans Principal Percent Single family (2) 43 $ 27,210,278 40 % 53 $ 32,361,343 46 % Multi-family 9 9,690,000 15 9 9,219,497 13 Commercial 17 30,550,405 45 15 29,079,444 41 Total principal, secured loans 69 $ 67,450,683 100 % 77 $ 70,660,284 100 % (2) Single family property type as of March 31, 2020 consists of 8 loans with principal of $4,695,984 that are owner occupied and 35 loans with principal of $22,514,294 that are non-owner occupied. At December 31, 2019, single family property type consisted of 11 loans with principal of $6,236,571 that are owner occupied and 42 loans with principal of $26,124,772 that are non-owner occupied. |
Secured Loans Distributed within California | The distribution of secured loans within California by counties is presented in the following table. March 31, 2020 December 31, 2019 Principal Percent Principal Percent San Francisco Bay Area (3) Santa Clara $ 21,188,642 31.4 % $ 19,064,638 27.0 % San Mateo 7,796,910 11.6 10,837,195 15.3 San Francisco 6,941,591 10.3 7,735,173 10.9 Alameda 3,720,691 5.5 2,930,219 4.2 Contra Costa 799,405 1.2 400,000 0.6 Santa Cruz — — 264,515 0.4 Marin — — 249,628 0.4 40,447,239 60.0 41,481,368 58.8 Other Northern California Sutter 3,815,000 5.7 3,815,000 5.4 Monterey 1,110,000 1.6 1,110,000 1.6 Tehama 405,000 0.6 405,000 0.6 Sacramento 154,083 0.2 492,216 0.6 5,484,083 8.1 5,822,216 8.2 Northern California Total 45,931,322 68.1 47,303,584 67.0 Los Angeles & Coastal Los Angeles 10,158,072 15.1 12,531,312 17.7 San Diego 4,659,602 6.9 4,983,331 7.1 Orange 3,066,464 4.6 3,067,396 4.3 Santa Barbara 497,185 0.7 497,977 0.7 San Luis Obispo 430,000 0.6 — — 18,811,323 27.9 21,080,016 29.8 Other Southern California San Bernardino 1,632,000 2.4 1,200,000 1.7 Riverside 1,076,038 1.6 1,076,684 1.5 2,708,038 4.0 2,276,684 3.2 Southern California Total 21,519,361 31.9 23,356,700 33.0 Total principal, secured loans $ 67,450,683 100.0 % $ 70,660,284 100.0 % (3) Includes Silicon Valley |
Secured Loans Scheduled Maturities | Secured loans are scheduled to mature as presented in the following table as of March 31, 2020. Loans Principal Percent 2020 (4) 20 $ 14,696,793 22 % 2021 28 39,520,905 59 2022 9 5,493,499 8 2023 3 743,925 1 2024 1 246,038 — Thereafter 6 5,850,180 9 Total future maturities 67 66,551,340 99 Matured as of March 31, 2020 2 899,343 1 Total principal, secured loans 69 $ 67,450,683 100 % (4) Loans scheduled to mature in 2020 after March 31. |
Past Due Financing Receivables | Secured loans summarized by payment delinquency are presented in the following table. March 31, 2020 December 31, 2019 Loans Principal Loans Principal Current 59 $ 55,688,367 65 $ 62,174,140 Past Due 30-89 days 6 7,343,231 8 3,952,306 90-179 days 2 327,478 2 3,520,112 180 or more days 2 4,091,607 2 1,013,726 Total past due 10 11,762,316 12 8,486,144 Total principal, secured loans 69 $ 67,450,683 77 $ 70,660,284 |
Payments in Arrears Past Due Financing Receivables | Payments in arrears for non-performing secured loans (i.e., monthly interest and principal payments past due 30 or more days), are presented in the following table as of March 31, 2020. Principal (5) Interest (6) Loans Past maturity Monthly payments Past maturity Monthly payments Total payments in arrears Payments in arrears 30-89 days (1-3 payments) 6 $ — $ 703 $ — $ 74,934 $ 75,637 90-179 days (4-6 payments) 2 137,078 850 2,656 3,689 144,273 180 or more days (6 or more payments) 2 762,265 12,984 15,722 184,501 975,472 Total payments past due 10 $ 899,343 $ 14,537 $ 18,378 $ 263,124 $ 1,195,382 (5) At March 31, 2020, two loans were past maturity. One loan with principal of $137,078 matured on December 1, 2019 and is included in principal past maturity 90-179 days. One loan with principal of $762,265 matured on April 1, 2019 is included in principal past maturity 180 or more days. (6) Interest – past maturity 90-179 days includes foregone interest of $885 for one loan which was past maturity and designated as in non-accrual status. Interest – monthly payments 180 or more days of $184,501 includes foregone interest of $26,357 for one loan which was 213 days delinquent and designated as in non-accrual status. |
Secured Loans in Non-Accrual Status | Secured loans in non-accrual status are summarized in the following table. March 31, 2020 December 31, 2019 Number of loans 4 3 Principal $ 4,419,085 $ 1,204,495 Advances 8,843 10,677 Accrued interest receivable 187,104 37,799 Total recorded investment $ 4,615,032 $ 1,252,971 Foregone interest $ 54,485 $ 3,952 |
Activity in Allowance for Loan Losses | Activity in the allowance for loan losses is presented in the following table for the three months ended March 31, 2020. 2020 Balance, beginning of period $ 87,000 Recovery for loan losses (75 ) Charge-offs (31,925 ) Balance March 31, 2020 $ 55,000 |
Impaired Loans [Member] | |
Impaired Financing Receivables | Loans designated impaired and the associated allowance for loan losses is presented in the following table. March 31, 2020 December 31, 2019 Principal $ 4,419,085 $ 4,533,838 Recorded investment (7) 4,615,032 4,719,705 Impaired loans without allowance 4,615,032 4,451,368 Impaired loans with allowance — 268,337 Allowance for loan losses, impaired loans — 37,000 Number of loans 4 4 Weighted average LTV at origination 64.1 % 66.0 % (7) Recorded investment is the sum of the principal, advances, and accrued interest receivable for financial reporting purposes. |
Average Balances and Interest Income [Member] | |
Impaired Financing Receivables | As of March 31, 2020 and December 31, 2019, loans designated impaired had an average recorded investment balance and interest income recognized and interest income received in cash for the three months ended March 31, 2020 and the year ended December 31, 2019 is presented in the following table. March 31, 2020 December 31, 2019 Average recorded investment $ 4,474,982 $ 4,334,931 Interest income recognized 46,823 169,585 Interest income received in cash 19,438 67,990 |
Organization and General - Addi
Organization and General - Additional Information (Details) | 3 Months Ended | 102 Months Ended | 117 Months Ended | 126 Months Ended | |||
Mar. 31, 2020USD ($)Unit | Mar. 31, 2018 | May 31, 2019 | Mar. 31, 2020USD ($) | Jun. 30, 2020 | Dec. 31, 2019 | May 09, 2019USD ($)shares | |
Organization and General (Details) [Line Items] | |||||||
Annualized net distribution rate | 6.50% | ||||||
Net distribution rate before organization and offering expense percentage | 6.95% | ||||||
Organization and offering expense percentage | 0.45% | ||||||
Loan to value ratios | 64.10% | 64.10% | 66.00% | ||||
Members or partners capital, description | Cash available for distribution at the end of each calendar month is allocated ninety-nine percent (99%) to the members and one percent (1%) to the manager. | ||||||
Percentage of distribution allocated to members | 99.00% | ||||||
Cumulative difference between earnings allocated to members’ account and net income available to members | $ 70,000 | ||||||
Capital accounts and net income surplus at beginning of year | $ 40,600 | ||||||
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% | ||||||
DRIP [Member] | |||||||
Organization and General (Details) [Line Items] | |||||||
Gross proceeds from unit sales | $ 2,204,000 | ||||||
Member Units [Member] | |||||||
Organization and General (Details) [Line Items] | |||||||
Capital unit sold in public offering, shares | shares | 15,000,000 | ||||||
Capital unit sold in public offering, value | $ 15,000,000 | ||||||
Maximum [Member] | |||||||
Organization and General (Details) [Line Items] | |||||||
Percentage of offering proceeds | 7.00% | ||||||
Debt-to-Value Ratio, Less than 80 Percent [Member] | Maximum [Member] | |||||||
Organization and General (Details) [Line Items] | |||||||
Loan to value ratios | 70.00% | 70.00% | |||||
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% | |||||
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% | ||||||
RMC [Member] | |||||||
Organization and General (Details) [Line Items] | |||||||
Ownership interest held by the manager | 0.10% | ||||||
Managers share of net income or loss | 1.00% |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2020USD ($)Approach | |
Summary of Significant Accounting Policies [Line Items] | |
Estimating Real Property Value, Number of Approaches | Approach | 3 |
Impaired loans maximum days of delinquent | 180 days |
Interest Reserve Minimum Length | 1 year |
Interest Reserve Maximum Length | 2 years |
Maximum [Member] | |
Summary of Significant Accounting Policies [Line Items] | |
Federal Insurance Limit | $ | $ 250,000 |
Manager and Other Related Par_3
Manager and Other Related Parties - Summary of Loan Administrative Fees, Administration Fees and Operations Expenses, for Reimbursements and amounts Waived (Details) - RMC [Member] - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Managers and Other Related Parties (Details) [Line Items] | ||
Chargeable/reimbursable | $ 351,773 | $ 462,113 |
RMC support | (216,452) | (462,113) |
Net charged | 135,321 | |
Loan Admin Fees [Member] | ||
Managers and Other Related Parties (Details) [Line Items] | ||
Chargeable/reimbursable | 63,736 | 163,270 |
RMC support | (63,736) | (163,270) |
Asset Management Fee [Member] | ||
Managers and Other Related Parties (Details) [Line Items] | ||
Chargeable/reimbursable | 135,321 | 119,187 |
RMC support | (119,187) | |
Net charged | 135,321 | |
Costs from RMC [Member] | ||
Managers and Other Related Parties (Details) [Line Items] | ||
Chargeable/reimbursable | 152,716 | 179,656 |
RMC support | $ (152,716) | $ (179,656) |
Manager and Other Related Par_4
Manager and Other Related Parties - Additional Information (Details) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2020USD ($)MortgageLoan | Mar. 31, 2019USD ($)MortgageLoan | Dec. 31, 2019USD ($)MortgageLoan | Jun. 30, 2020 | May 31, 2020USD ($) | |
Managers and Other Related Parties (Details) [Line Items] | |||||
Mortgage Loans on Real Estate, Number of Loans | MortgageLoan | 69 | 77 | |||
Principal | $ 67,450,683 | $ 70,660,284 | |||
Future redemptions of member's capital | $ 666,259 | ||||
Reimbursement as a percentage of member's original purchase price | 0.45% | ||||
Percentage of original purchase price, quarterly installment percentage | 0.1125% | ||||
Asset Management Fees | $ 53,173 | ||||
Scenario, Forecast [Member] | |||||
Managers and Other Related Parties (Details) [Line Items] | |||||
Asset Management Fees | $ 45,107 | ||||
Performing Loans [Member] | |||||
Managers and Other Related Parties (Details) [Line Items] | |||||
Mortgage Loans on Real Estate, Number of Loans | MortgageLoan | 1 | 0 | |||
Principal | $ 2,297,000 | ||||
Maximum [Member] | |||||
Managers and Other Related Parties (Details) [Line Items] | |||||
Annual mortgage servicing fees, percentage | 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% | ||||
Management Fee, Percentage | 0.75% | ||||
Working Capital Reserve, Percentage | 2.00% | ||||
Loan Brokerage Commission Percent Minimum | 1.50% | ||||
Loan Brokerage Commission Percent Maximum | 5.00% | ||||
Loan Brokerage Commissions, Maximum Percent of Assets | 4.00% | ||||
Loan Brokerage Commission | $ 152,000 | $ 384,000 | |||
Repayment of formation loan in annual installments | $ 492,843 | ||||
Formation loan payment date | Dec. 31, 2027 | ||||
Future redemptions of member's capital | $ 488,162 | $ 1,092,396 | |||
RMC [Member] | Scenario, Forecast [Member] | |||||
Managers and Other Related Parties (Details) [Line Items] | |||||
Management Fee, Percentage | 1.00% |
Manager and Other Related Par_5
Manager and Other Related Parties - Formation Loan Transactions (Details) | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Formation Loan Transactions [Abstract] | |
Balance, January 1, 2020 | $ 3,948,064 |
Early withdrawal penalties applied | (5,319) |
Balance, March 31, 2020 | $ 3,942,745 |
Manager and Other Related Par_6
Manager and Other Related Parties - Schedule of Unit Redemptions (Details) - USD ($) | 3 Months Ended | 126 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | ||
Managers and Other Related Parties (Details) [Line Items] | ||||
Total, Capital redemptions | $ 666,259 | |||
Early withdrawal penalties | [1] | 4,414 | $ 64,704 | |
RMC [Member] | ||||
Managers and Other Related Parties (Details) [Line Items] | ||||
Total, Capital redemptions | 488,162 | $ 1,092,396 | ||
Early withdrawal penalties | 9,733 | 45,500 | ||
RMC [Member] | Capital Redemptions-without Penalty [Member] | ||||
Managers and Other Related Parties (Details) [Line Items] | ||||
Total, Capital redemptions | 317,672 | 367,396 | ||
RMC [Member] | Capital Redemptions-subject to Penalty [Member] | ||||
Managers and Other Related Parties (Details) [Line Items] | ||||
Total, Capital redemptions | $ 170,490 | $ 725,000 | ||
[1] | Prior to June 30, 2019, early withdrawal penalties collected were applied to the next installment due under the formation loan and to reduce the amount owed to RMC for O&O expenses. For periods beginning July 1, 2019, the O&O component of early withdrawal penalties are a reduction to O&O expenses repaid by RMC to members’ capital on scheduled redemptions. The amounts credited are determined by the ratio between the amount of the formation loan and the amount of offering costs incurred by the company. |
Manager and Other Related Par_7
Manager and Other Related Parties - Summary of Organization and Offering Expenses (Details) - USD ($) | 3 Months Ended | 126 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2020 | ||
Related Party Transactions [Abstract] | |||
Balance, beginning of period | $ 2,260,068 | ||
O&O expenses reimbursed to RMC | $ 3,671,853 | ||
Early withdrawal penalties applied | [1] | (4,414) | (64,704) |
O&O expenses allocated | [2] | (80,715) | (1,096,305) |
O&O expenses repaid to Members' Capital by RMC | [3] | (9,012) | (344,917) |
Balance, March 31, 2020 | $ 2,165,927 | $ 2,165,927 | |
[1] | Prior to June 30, 2019, early withdrawal penalties collected were applied to the next installment due under the formation loan and to reduce the amount owed to RMC for O&O expenses. For periods beginning July 1, 2019, the O&O component of early withdrawal penalties are a reduction to O&O expenses repaid by RMC to members’ capital on scheduled redemptions. The amounts credited are determined by the ratio between the amount of the formation loan and the amount of offering costs incurred by the company. | ||
[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 RMI IX for the amount of unallocated O&O expenses attributed to members’ capital accounts if the member redeems prior to the 40 quarterly allocations. RMC estimated its future obligation to repay unallocated O&O expenses on scheduled redemptions as of March 31, 2020, to be approximately $11,660, which may be offset in part by early withdrawal penalties collected in future periods. |
Manager and Other Related Par_8
Manager and Other Related Parties - Summary of Organization and Offering Expenses (Parenthetical) (Details) | 3 Months Ended |
Mar. 31, 2020USD ($) | |
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 | $ 11,660 |
Loans - Additional Information
Loans - Additional Information (Details) | 3 Months Ended | 12 Months Ended | ||||||
Mar. 31, 2020USD ($)MortgageLoan | Dec. 31, 2019USD ($)MortgageLoan | Mar. 31, 2020 | Mar. 31, 2020MortgageLoan | Mar. 31, 2020Loan | Dec. 31, 2019MortgageLoan | Dec. 31, 2019Loan | Mar. 31, 2019USD ($)MortgageLoan | |
Loans (Details) [Line Items] | ||||||||
Mortgage Loans on Real Estate, Number of Loans | MortgageLoan | 69 | 77 | ||||||
Loans Receivable, Number of Principal and Interest Loans | Loan | 45 | |||||||
Loans Receivable, Amortization Term | 30 years | |||||||
Mortgage Loans On Real Estate Renewed Number Of Loans | MortgageLoan | 2 | |||||||
Mortgage Loans On Real Estate Principal Renewed | $ 671,000 | |||||||
Balance relating to loan portfolio deposit in bank trust account | 21,874 | $ 71,416 | ||||||
Loans Receivable Largest Loan (in Dollars) | 6,735,000 | 6,735,000 | ||||||
Loans - principal (in Dollars) | $ 67,450,683 | $ 70,660,284 | ||||||
Number of loans | 0 | 69 | 2 | 77 | 0 | |||
Number of troubled debt restructurings | MortgageLoan | 0 | 0 | ||||||
Interest monthly payments | $ 184,501 | |||||||
Principal | 67,450,683 | $ 70,660,284 | ||||||
Principal | $ 67,450,683 | 70,660,284 | ||||||
Allowance for loans losses reserve | 37,000 | $ 0 | ||||||
Payment In Arrears 90-189 Days [Member] | ||||||||
Loans (Details) [Line Items] | ||||||||
Loans Receivable Maturity Date | Dec. 1, 2019 | |||||||
Forgone interest | $ 885 | |||||||
Payment In Arrears 180 or More Days [Member] | ||||||||
Loans (Details) [Line Items] | ||||||||
Loans Receivable Maturity Date | Apr. 1, 2019 | |||||||
Loans - principal (in Dollars) | $ 762,265 | |||||||
Number of loans | Loan | 2 | 2 | ||||||
Interest monthly payments | 184,501 | |||||||
Forgone interest | 26,357 | |||||||
Principal | 762,265 | |||||||
Principal | 4,091,607 | 1,013,726 | ||||||
Payment In Arrears 90-179 Days [Member] | ||||||||
Loans (Details) [Line Items] | ||||||||
Loans - principal (in Dollars) | 137,078 | |||||||
Interest monthly payments | 3,689 | |||||||
Principal | 137,078 | |||||||
Past Due 90 Or More Days [Member] | ||||||||
Loans (Details) [Line Items] | ||||||||
Number of loans | MortgageLoan | 0 | |||||||
Financing receivable, recorded investment, 90 days past due and still accruing | 3,329,000 | |||||||
Past Due 366 Days [Member] | ||||||||
Loans (Details) [Line Items] | ||||||||
Number of loans | MortgageLoan | 1 | |||||||
Principal | $ 762,265 | |||||||
Loans receivable extended maturity date | Apr. 1, 2019 | |||||||
Past Due 213 Days [Member] | ||||||||
Loans (Details) [Line Items] | ||||||||
Number of loans | MortgageLoan | 1 | |||||||
Principal | $ 3,329,342 | |||||||
Past Due 91 Days [Member] | Impaired Loans [Member] | ||||||||
Loans (Details) [Line Items] | ||||||||
Principal | $ 190,400 | |||||||
Loans receivable extended maturity date | Oct. 1, 2021 | |||||||
Loans receivable maturity date | Jun. 1, 2016 | |||||||
Past Due 122 Days [Member] | Impaired Loans [Member] | ||||||||
Loans (Details) [Line Items] | ||||||||
Principal | $ 137,078 | |||||||
Five Years Or Less Term Loans [Member] | ||||||||
Loans (Details) [Line Items] | ||||||||
Mortgage Loans on Real Estate, Number of Loans | MortgageLoan | 66 | |||||||
Loans Receivable, Percent of Aggregate Principal | 98.00% | |||||||
Interest Only [Member] | ||||||||
Loans (Details) [Line Items] | ||||||||
Loans Receivable, Percent of Aggregate Principal | 41.00% | |||||||
Largest Loan [Member] | ||||||||
Loans (Details) [Line Items] | ||||||||
Loans Receivable, Yield of Loan Acquired | 8.25% | |||||||
Loans Receivable Maturity Date | Oct. 1, 2021 | |||||||
Construction Loans [Member] | ||||||||
Loans (Details) [Line Items] | ||||||||
Loans outstanding | $ 0 | |||||||
Rehabilitation Or Other Loans [Member] | ||||||||
Loans (Details) [Line Items] | ||||||||
Loans outstanding | 0 | |||||||
Construction Or Rehabilitation Loans [Member] | ||||||||
Loans (Details) [Line Items] | ||||||||
Loans - principal (in Dollars) | 0 | |||||||
Principal | $ 0 | |||||||
Minimum [Member] | ||||||||
Loans (Details) [Line Items] | ||||||||
Loans Receivable, Remaining Term | 5 years |
Loans - Secured Loan Principal
Loans - Secured Loan Principal Transactions (Details) | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Receivables [Abstract] | |
Principal, beginning of period | $ 70,660,284 |
Loans funded | 6,373,600 |
Loan transferred from related mortgage fund | 2,296,677 |
Principal charged off | (20,068) |
Principal collected | (11,859,810) |
Principal, March 31, 2020 | $ 67,450,683 |
Loans - Secured Loans Character
Loans - Secured Loans Characteristics (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020USD ($)MortgageLoanCountry | Dec. 31, 2019USD ($)MortgageLoanCountry | |
Secured Loan Transactions [Line Items] | ||
Number of secured loans | MortgageLoan | 69 | 77 |
Secured loans - principal (in Dollars) | $ 67,450,683 | $ 70,660,284 |
Average secured loan - principal (in Dollars) | $ 977,546 | $ 917,666 |
Average principal as percent of total principal | 1.40% | 1.30% |
Average principal as percent of members’ capital, net | 1.20% | 1.20% |
Average principal as percent of total assets | 1.30% | 1.20% |
Largest secured loan - principal (in Dollars) | $ 6,735,000 | $ 6,735,000 |
Largest principal as percent of total principal | 10.00% | 9.50% |
Largest principal as percent of members’ capital, net | 8.40% | 8.50% |
Largest principal as percent of total assets | 8.90% | 8.90% |
Smallest secured loan - principal (in Dollars) | $ 111,771 | $ 125,656 |
Smallest principal as percent of total principal | 0.20% | 0.20% |
Smallest principal as percent of members’ capital, net | 0.10% | 0.20% |
Smallest principal as percent of total assets | 0.10% | 0.20% |
Number of California counties where security is located | Country | 16 | 17 |
Largest percentage of principal in one California county | 31.40% | 27.00% |
Minimum [Member] | ||
Secured Loan Transactions [Line Items] | ||
Secured loans - interest rate (fixed) | 6.80% | 7.80% |
Maximum [Member] | ||
Secured Loan Transactions [Line Items] | ||
Secured loans - interest rate (fixed) | 10.50% | 10.50% |
Loans - Secured Loans by Lien P
Loans - Secured Loans by Lien Position in the Collateral (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020USD ($)MortgageLoan | Dec. 31, 2019USD ($)MortgageLoan | ||
Loans (Details) - Secured Loans by Lien Position in the Collateral [Line Items] | |||
Loans | MortgageLoan | 69 | 77 | |
Loans - principal (in Dollars) | $ 67,450,683 | $ 70,660,284 | |
Liens due other lenders at loan closing | 52,882,494 | 54,062,023 | |
Total debt | 120,333,177 | 124,722,307 | |
Appraised property value at loan closing | $ 226,913,000 | $ 237,453,000 | |
Percent of total debt to appraised values (LTV) at loan closing | [1] | 55.90% | 55.30% |
Loans - percent | 100.00% | 100.00% | |
First Trust Deeds [Member] | |||
Loans (Details) - Secured Loans by Lien Position in the Collateral [Line Items] | |||
Loans | MortgageLoan | 40 | 42 | |
Loans - principal (in Dollars) | $ 43,279,537 | $ 42,712,037 | |
Loans - percent | 64.00% | 60.00% | |
Second Trust Deeds [Member] | |||
Loans (Details) - Secured Loans by Lien Position in the Collateral [Line Items] | |||
Loans | MortgageLoan | 29 | 35 | |
Loans - principal (in Dollars) | $ 24,171,146 | $ 27,948,247 | |
Loans - percent | 36.00% | 40.00% | |
[1] | Based on appraised values and liens due other lenders at loan closing. The weighted-average loan-to-value (LTV) computation above does not take into account subsequent increases or decreases in property values following the loan closing nor does it include decreases or increases on senior liens to other lenders. |
Loans - Secured Loans by Proper
Loans - Secured Loans by Property Type (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020USD ($)MortgageLoan | Dec. 31, 2019USD ($)MortgageLoan | ||
Loans (Details) - Secured Loans by Property Type [Line Items] | |||
Loans | MortgageLoan | 69 | 77 | |
Loans - principal (in Dollars) | $ | $ 67,450,683 | $ 70,660,284 | |
Loans - percent | 100.00% | 100.00% | |
Single Family [Member] | |||
Loans (Details) - Secured Loans by Property Type [Line Items] | |||
Loans | MortgageLoan | [1] | 43 | 53 |
Loans - principal (in Dollars) | $ | [1] | $ 27,210,278 | $ 32,361,343 |
Loans - percent | [1] | 40.00% | 46.00% |
Multifamily [Member] | |||
Loans (Details) - Secured Loans by Property Type [Line Items] | |||
Loans | MortgageLoan | 9 | 9 | |
Loans - principal (in Dollars) | $ | $ 9,690,000 | $ 9,219,497 | |
Loans - percent | 15.00% | 13.00% | |
Commercial [Member] | |||
Loans (Details) - Secured Loans by Property Type [Line Items] | |||
Loans | MortgageLoan | 17 | 15 | |
Loans - principal (in Dollars) | $ | $ 30,550,405 | $ 29,079,444 | |
Loans - percent | 45.00% | 41.00% | |
[1] | Single family property type as of March 31, 2020 consists of 8 loans with principal of $4,695,984 that are owner occupied and 35 loans with principal of $22,514,294 that are non-owner occupied. At December 31, 2019, single family property type consisted of 11 loans with principal of $6,236,571 that are owner occupied and 42 loans with principal of $26,124,772 that are non-owner occupied. |
Loans - Secured Loans by Prop_2
Loans - Secured Loans by Property Type (Parenthetical) (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020USD ($)MortgageLoan | Dec. 31, 2019USD ($)MortgageLoan | |
Loans (Details) - Secured Loans by Property Type [Line Items] | ||
Loans | MortgageLoan | 69 | 77 |
Principal | $ | $ 67,450,683 | $ 70,660,284 |
Single Family Property-Owner Occupied [Member] | ||
Loans (Details) - Secured Loans by Property Type [Line Items] | ||
Loans | MortgageLoan | 8 | 11 |
Principal | $ | $ 4,695,984 | $ 6,236,571 |
Single Family Property-NonOwner Occupied [Member] | ||
Loans (Details) - Secured Loans by Property Type [Line Items] | ||
Loans | MortgageLoan | 35 | 42 |
Principal | $ | $ 22,514,294 | $ 26,124,772 |
Loans - Secured Loans Distribut
Loans - Secured Loans Distributed Within California (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 | |
Loans (Details) - Secured Loans Distributed Within California [Line Items] | |||
Loans - principal (in Dollars) | $ 67,450,683 | $ 70,660,284 | |
Loans - percent | 100.00% | 100.00% | |
Santa Clara [Member] | |||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | |||
Loans - principal (in Dollars) | [1] | $ 21,188,642 | $ 19,064,638 |
Loans - percent | [1] | 31.40% | 27.00% |
San Mateo [Member] | |||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | |||
Loans - principal (in Dollars) | [1] | $ 7,796,910 | $ 10,837,195 |
Loans - percent | [1] | 11.60% | 15.30% |
San Francisco [Member] | |||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | |||
Loans - principal (in Dollars) | [1] | $ 6,941,591 | $ 7,735,173 |
Loans - percent | [1] | 10.30% | 10.90% |
Alameda [Member] | |||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | |||
Loans - principal (in Dollars) | [1] | $ 3,720,691 | $ 2,930,219 |
Loans - percent | [1] | 5.50% | 4.20% |
Marin [Member] | |||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | |||
Loans - principal (in Dollars) | $ 249,628 | ||
Loans - percent | 0.40% | ||
Contra Costa [Member] | |||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | |||
Loans - principal (in Dollars) | [1] | $ 799,405 | $ 400,000 |
Loans - percent | [1] | 1.20% | 0.60% |
Santa Cruz | |||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | |||
Loans - principal (in Dollars) | $ 264,515 | ||
Loans - percent | 0.40% | ||
San Francisco Bay Area [Member] | |||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | |||
Loans - principal (in Dollars) | [1] | $ 40,447,239 | $ 41,481,368 |
Loans - percent | [1] | 60.00% | 58.80% |
Sutter [Member] | |||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | |||
Loans - principal (in Dollars) | $ 3,815,000 | $ 3,815,000 | |
Loans - percent | 5.70% | 5.40% | |
Tehama | |||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | |||
Loans - principal (in Dollars) | $ 405,000 | $ 405,000 | |
Loans - percent | 0.60% | 0.60% | |
Sacramento [Member] | |||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | |||
Loans - principal (in Dollars) | $ 154,083 | $ 492,216 | |
Loans - percent | 0.20% | 0.60% | |
Monterey [Member] | |||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | |||
Loans - principal (in Dollars) | $ 1,110,000 | $ 1,110,000 | |
Loans - percent | 1.60% | 1.60% | |
Other Northern California [Member] | |||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | |||
Loans - principal (in Dollars) | $ 5,484,083 | $ 5,822,216 | |
Loans - percent | 8.10% | 8.20% | |
Northern California [Member] | |||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | |||
Loans - principal (in Dollars) | $ 45,931,322 | $ 47,303,584 | |
Loans - percent | 68.10% | 67.00% | |
Los Angeles [Member] | |||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | |||
Loans - principal (in Dollars) | $ 10,158,072 | $ 12,531,312 | |
Loans - percent | 15.10% | 17.70% | |
San Diego [Member] | |||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | |||
Loans - principal (in Dollars) | $ 4,659,602 | $ 4,983,331 | |
Loans - percent | 6.90% | 7.10% | |
Orange [Member] | |||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | |||
Loans - principal (in Dollars) | $ 3,066,464 | $ 3,067,396 | |
Loans - percent | 4.60% | 4.30% | |
Santa Barbara [Member] | |||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | |||
Loans - principal (in Dollars) | $ 497,185 | $ 497,977 | |
Loans - percent | 0.70% | 0.70% | |
San Luis Obispo | |||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | |||
Loans - principal (in Dollars) | $ 430,000 | ||
Loans - percent | 0.60% | ||
Los Angeles & Coastal [Member] | |||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | |||
Loans - principal (in Dollars) | $ 18,811,323 | $ 21,080,016 | |
Loans - percent | 27.90% | 29.80% | |
San Bernardino [Member] | |||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | |||
Loans - principal (in Dollars) | $ 1,632,000 | $ 1,200,000 | |
Loans - percent | 2.40% | 1.70% | |
Riverside [Member] | |||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | |||
Loans - principal (in Dollars) | $ 1,076,038 | $ 1,076,684 | |
Loans - percent | 1.60% | 1.50% | |
Other Southern California [Member] | |||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | |||
Loans - principal (in Dollars) | $ 2,708,038 | $ 2,276,684 | |
Loans - percent | 4.00% | 3.20% | |
Southern California [Member] | |||
Loans (Details) - Secured Loans Distributed Within California [Line Items] | |||
Loans - principal (in Dollars) | $ 21,519,361 | $ 23,356,700 | |
Loans - percent | 31.90% | 33.00% | |
[1] | Includes Silicon Valley |
Loans - Secured Loans Scheduled
Loans - Secured Loans Scheduled Maturities (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020USD ($)MortgageLoan | Dec. 31, 2019USD ($)MortgageLoan | ||
Secured Loans Scheduled Maturities [Abstract] | |||
2020, Loans | MortgageLoan | [1] | 20 | |
2021, Loans | MortgageLoan | 28 | ||
2022, Loans | MortgageLoan | 9 | ||
2023, Loans | MortgageLoan | 3 | ||
2024, Loans | MortgageLoan | 1 | ||
Thereafter, Loans | MortgageLoan | 6 | ||
Total future maturities, Loans | MortgageLoan | 67 | ||
Matured as of March 31, 2020, Loans | MortgageLoan | 2 | ||
Loans | MortgageLoan | 69 | 77 | |
2020, Principal | $ | [1] | $ 14,696,793 | |
2021, Principal | $ | 39,520,905 | ||
2022, Principal | $ | 5,493,499 | ||
2023, Principal | $ | 743,925 | ||
2024, Principal | $ | 246,038 | ||
Thereafter, Principal | $ | 5,850,180 | ||
Total future maturities, Principal | $ | 66,551,340 | ||
Matured as of March 31, 2020, Principal | $ | 899,343 | ||
Total principal, secured loans | $ | $ 67,450,683 | $ 70,660,284 | |
2020, Percent | [1] | 22.00% | |
2021, Percent | 59.00% | ||
2022, Percent | 8.00% | ||
2023, Percent | 1.00% | ||
Thereafter, Percent | 9.00% | ||
Total future maturities, Percent | 99.00% | ||
Matured as of March 31, 2020, Percent | 1.00% | ||
Total principal, secured loans, Percent | 100.00% | 100.00% | |
[1] | Loans scheduled to mature in 2020 after March 31. |
Loans - Past Due Financing Rece
Loans - Past Due Financing Receivables (Details) | Mar. 31, 2020USD ($) | Mar. 31, 2020MortgageLoan | Mar. 31, 2020Loan | Dec. 31, 2019USD ($) | Dec. 31, 2019MortgageLoan | Dec. 31, 2019Loan | Mar. 31, 2019MortgageLoan |
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||||||
Number of loans | 0 | 69 | 2 | 77 | 0 | ||
Principal | $ 67,450,683 | $ 70,660,284 | |||||
Past Due 30-89 Days [Member] | |||||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||||||
Number of loans | Loan | 6 | 8 | |||||
Principal | 7,343,231 | 3,952,306 | |||||
Past Due 90-179 Days [Member] | |||||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||||||
Number of loans | Loan | 2 | 2 | |||||
Principal | 327,478 | 3,520,112 | |||||
Payment In Arrears 180 or More Days [Member] | |||||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||||||
Number of loans | Loan | 2 | 2 | |||||
Principal | 4,091,607 | 1,013,726 | |||||
Total Past Due [Member] | |||||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||||||
Number of loans | Loan | 10 | 12 | |||||
Principal | 11,762,316 | 8,486,144 | |||||
Current [Member] | |||||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||||||
Number of loans | Loan | 59 | 65 | |||||
Principal | $ 55,688,367 | $ 62,174,140 |
Loans - Schedule of Payments in
Loans - Schedule of Payments in Arrears Past Due Financing Receivables (Details) | Mar. 31, 2020USD ($)Loan |
Monthly payments | $ 184,501 |
Past Due 30-89 Days [Member] | |
Number of loans | Loan | 6 |
Monthly payments | $ 703 |
Monthly payments | 74,934 |
Total payments | $ 75,637 |
Payment In Arrears 90-179 Days [Member] | |
Number of loans | Loan | 2 |
Past maturity | $ 137,078 |
Monthly payments | 850 |
Past maturity | 2,656 |
Monthly payments | 3,689 |
Total payments | $ 144,273 |
Payment In Arrears 180 or More Days [Member] | |
Number of loans | Loan | 2 |
Past maturity | $ 762,265 |
Monthly payments | 12,984 |
Past maturity | 15,722 |
Monthly payments | 184,501 |
Total payments | $ 975,472 |
Total Payments Past Due [Member] | |
Number of loans | Loan | 10 |
Past maturity | $ 899,343 |
Monthly payments | 14,537 |
Past maturity | 18,378 |
Monthly payments | 263,124 |
Total payments | $ 1,195,382 |
Loans - Secured Loans in Non-Ac
Loans - Secured Loans in Non-Accrual Status (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020USD ($)MortgageLoan | Dec. 31, 2019USD ($)MortgageLoan | |
Loans Details Secured Loans In Nonaccrual Status [Line Items] | ||
Loans | MortgageLoan | 69 | 77 |
Loans - principal (in Dollars) | $ 67,450,683 | $ 70,660,284 |
Accrued interest | $ 656,193 | $ 680,146 |
Non-Accrual Status [Member] | ||
Loans Details Secured Loans In Nonaccrual Status [Line Items] | ||
Loans | MortgageLoan | 4 | 3 |
Loans - principal (in Dollars) | $ 4,615,032 | $ 1,252,971 |
Accrued interest | 187,104 | 37,799 |
Forgone interest | 54,485 | 3,952 |
Principal [Member] | Non-Accrual Status [Member] | ||
Loans Details Secured Loans In Nonaccrual Status [Line Items] | ||
Loans - principal (in Dollars) | 4,419,085 | 1,204,495 |
Advances [Member] | Non-Accrual Status [Member] | ||
Loans Details Secured Loans In Nonaccrual Status [Line Items] | ||
Loans - principal (in Dollars) | $ 8,843 | $ 10,677 |
Loans - Activity in the Allowan
Loans - Activity in the Allowance for Loan Losses (Details) | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Receivables [Abstract] | |
Balance, beginning of period | $ 87,000 |
Recovery for loan losses | (75) |
Charge-offs | (31,925) |
Balance, end of period | $ 55,000 |
Loans - Schedule of Impaired Lo
Loans - Schedule of Impaired Loans/Allowance for Loan Losses (Details) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020USD ($)Loan | Dec. 31, 2019USD ($)Loan | Mar. 31, 2019USD ($) | ||
Secured Loans Designated as Impaired Loans [Abstract] | ||||
Principal | $ 4,419,085 | $ 4,533,838 | ||
Recorded investment | [1] | 4,615,032 | 4,719,705 | |
Impaired loans without allowance | $ 4,615,032 | 4,451,368 | ||
Impaired loans with allowance | 268,337 | |||
Allowance for loan losses, impaired loans | $ 37,000 | $ 0 | ||
Number of loans | Loan | 4 | 4 | ||
Weighted average LTV at origination | 64.10% | 66.00% | ||
[1] | Recorded investment is the sum of the principal, advances, and accrued interest receivable for financial reporting purposes. |
Loans - Impaired Loans - Averag
Loans - Impaired Loans - Average Balances and Interest Income (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Impaired Loans - Average Balances and Interest Income [Abstract] | ||
Average recorded investment | $ 4,474,982 | $ 4,334,931 |
Interest income recognized | 46,823 | 169,585 |
Interest income received in cash | $ 19,438 | $ 67,990 |
Line of Credit - Additional Inf
Line of Credit - Additional Information (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | |
Mar. 31, 2020 | Sep. 30, 2020 | Apr. 30, 2020 | |
Subsequent Event [Member] | |||
Short Term Debt [Line Items] | |||
Pledged loans, principal amount | $ 17.9 | ||
Pledged loans, outstanding amount | 5 | ||
Maximum [Member] | Subsequent Event [Member] | |||
Short Term Debt [Line Items] | |||
Pledged loans, advance amount | $ 8.8 | ||
Revolving Credit Facility [Member] | |||
Short Term Debt [Line Items] | |||
Line of credit facility, maximum amount outstanding during period | $ 10 | ||
Maturity date | Mar. 13, 2022 | ||
Term loan, duration | 1 year | ||
Line of credit facility, conversion of outstanding principal balance to term loan of fee | 0.25% | ||
Line of credit extended maturity date | Mar. 13, 2023 | ||
Line of credit facility, description | The company has the option at the maturity date to convert the then outstanding principal balance on the line of credit to a one-year term loan - for a fee of one-quarter of one percent (0.25%) – thereby extending the maturity date to March 13, 2023. | ||
Line of credit facility, description | Interest on the outstanding principal is payable monthly and accrues at the per annum rate of the greater of (i) five percent (5%) or (ii) the sum of the one-month LIBOR rate plus three and one-quarter percent (3.25%). | ||
Line of credit facility, interest rate | 5.00% | ||
Compensating balance, minimum | $ 1 | ||
Interest on non maintenance of compensating balance | 0.25% | ||
Revolving Credit Facility [Member] | Scenario, Forecast [Member] | |||
Short Term Debt [Line Items] | |||
Line of credit facility, average rate | 50.00% | ||
Line of credit facility, unused line of fee | 0.50% | ||
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||
Short Term Debt [Line Items] | |||
Line of credit facility, interest rate | 3.25% | ||
Line Of Credit [Member] | Financial Asset, 61 Days Past Due [Member] | |||
Short Term Debt [Line Items] | |||
Loan payment, quartely | 10.00% | ||
Line Of Credit [Member] | Maximum [Member] | |||
Short Term Debt [Line Items] | |||
Debt service coverage ratio | 2 | ||
Line Of Credit [Member] | Minimum [Member] | |||
Short Term Debt [Line Items] | |||
Minimum tangible net worth | $ 50 | ||
Debt service coverage ratio | 1 |
Commitment and Contingencies, O
Commitment and Contingencies, Other Than Loan Commitments - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Commitments And Contingencies Disclosure [Abstract] | |
Future redemptions of member's capital | $ 666,259 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - Subsequent Event [Member] | May 13, 2020 |
Subsequent Event [Line Items] | |
Percent of borrowers made contractual loan payment | 86.00% |
Short-term loan payment relief requests, description | the company received a number of short-term loan payment relief requests, most of which were in the form of requests for deferral of payments or requests for further discussion of COVID-19 related relief. No requests were granted and four remain pending as of May 13, 2020. |