MJ (MJNE) 10-Q 14 Nov 16 2016 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Nov. 10, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	MJ Holdings, Inc.
Entity Central Index Key	1,456,857
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q3
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		14,027,939

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Real estate property:
Land	$ 747,389	$ 747,389
Buildings and improvements	3,145,167	3,141,193
Computer equipment and software	2,000	2,000
Real estate property, gross	3,894,556	3,890,582
Accumulated depreciation	(228,380)	(140,699)
Real estate property, net	3,666,176	3,749,883
Real estate loans receivable, net
Cash	421,760	303,368
Deferred leasing costs	136,622	157,463
Deferred rent receivable	86,557	54,664
Prepaid expenses and other assets	6,949	6,093
Total Assets	4,318,064	4,271,471
Liabilities
Notes payable - related party, net of unamortized debt issuance costs of $3,416 and $11,357, respectively	2,721,584	2,713,643
Security deposits	70,168	95,203
Accounts payable and accrued liabilities	116,750	118,983
Total Liabilities	2,908,502	2,927,829
Stockholders' Equity
Preferred stock, par value $0.001, 5,000,000 shares authorized; 0 shares issued and outstanding
Common stock, par value $0.001, 95,000,000 shares authorized; 14,027,939 shares issued and outstanding	14,028	14,028
Additional paid-in capital	2,779,105	2,779,105
Accumulated deficit	(1,383,571)	(1,449,491)
Total Stockholders' Equity	1,409,562	1,343,642
Total Liabilities and Stockholders' Equity	$ 4,318,064	$ 4,271,471

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Unamortized debt issuance costs	$ 3,416	$ 11,357
Preferred stock, par value per share	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value per share	$ 0.001	$ 0.001
Common stock, shares authorized	95,000,000	95,000,000
Common stock, shares issued	14,027,939	14,027,939
Common stock, shares outstanding	14,027,939	14,027,939

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Revenues:
Rental income	$ 181,498	$ 169,879	$ 519,492	$ 458,566
Interest income from real estate loans receivable	6,900		9,039
Total revenues	188,398	169,879	528,531	458,566
Operating Expenses:
Property expenses	31,278	23,032	94,977	100,981
General and administrative expenses	9,348	69,526	67,726	231,504
Depreciation expense	29,605	28,871	87,681	73,544
Total operating expenses	70,231	121,429	250,384	406,029
Operating income	118,167	48,450	278,147	52,537
Interest expense, net - related party	(68,125)	(68,125)	(204,375)	(172,929)
Interest expense, net	(1,254)	(3,718)	(7,852)	(9,448)
Income (loss) before income taxes	48,788	(23,393)	65,920	(129,840)
Provision for income taxes
Net Income (Loss)	$ 48,788	$ (23,393)	$ 65,920	$ (129,840)
Basic and diluted net earnings (loss) per common share:
Weighted average shares outstanding	14,027,939	14,006,419	14,027,939	13,935,222
Net earnings (loss) per common share	$ 0.003	$ (0.002)	$ 0.005	$ (0.009)

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash flow from operating activities:
Net income (loss)	$ 65,920	$ (129,840)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation	87,681	73,544
Stock-based compensation		139,134
Deferred rental income	(31,893)	(36,271)
Amortization of deferred leasing and debt costs	28,782	30,095
Changes in operating assets and liabilities:
Deferred leasing costs		17,511
Prepaid and other assets	(856)	50,222
Security deposits	(25,035)	(6,842)
Accounts payable and accrued liabilities	(2,233)	(119,274)
Net Cash Provided by Operating Activities	122,366	18,279
Cash flow from investing activities:
Acquisition of real estate property and building improvements	(3,974)	(895,143)
Investment in real estate loans receivable	(150,000)
Repayment of investment in real estate loans receivable	150,000
Net Cash Used in Investing Activities	(3,974)	(895,143)
Cash flow from financing activities:
Proceeds from notes payable, related party		925,000
Payment for debt issuance costs		(10,634)
Net Cash Provided by Financing Activities		914,366
Net increase in cash	118,392	37,502
Cash at beginning of period	303,368	175,792
Cash at end of period	421,760	213,294
Supplemental disclosure of cash flow information:
Cash paid for interest to related party	$ 204,375	$ 165,221

Interim Financial Statements

Interim Financial Statements	9 Months Ended
	Sep. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Interim Financial Statements	Note 1 — Interim Financial Statements The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, these condensed consolidated financial statements do not include all of the information and footnotes required for audited annual financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary to make the condensed consolidated financial statements not misleading have been included. The balance sheet at December 31, 2015, has been derived from the Company’s audited consolidated financial statements as of that date. The unaudited condensed consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements and the notes thereto that are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, that was filed with the SEC on March 30, 2016. The results of operations for the nine months ended September 30, 2016, are not necessarily indicative of the results to be expected for the full year. The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, 5353 Joliet, LLC, MJ Havana, LLC, and MJ Sheridan, LLC. Intercompany balances and transactions have been eliminated in consolidation.

Summary of Significant Accounti

Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2016
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Note 2 — Summary of Significant Accounting Policies The significant accounting policies followed by the Company for interim reporting are consistent with those included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. The Company adopted the following accounting policy during the nine months ended September 30, 2016: Real Estate Loans Receivable The Company’s real estate loans receivable are recorded at amortized cost, net of loan loss reserves, and evaluated for impairment at each balance sheet date. The amortized cost of a real estate loan receivable is the outstanding unpaid principal balance, net of unamortized acquisition premiums or discounts and unamortized costs and fees directly associated with the origination or acquisition of the loan, if applicable. Interest income on the Company’s real estate loans receivable is recognized as revenue on an accrual basis over the life of the investment using the effective interest method. Direct loan origination fees and origination or acquisition costs, if applicable, are amortized over the term of the loan as an adjustment to interest income. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (the “FASB”) issued guidance to clarify the principles for recognizing revenue. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance provides a comprehensive framework for revenue recognition that supersedes current general revenue guidance and most industry-specific guidance. In addition, the guidance requires improved disclosures to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue that is recognized. An entity should apply the guidance either retrospectively to each prior reporting period presented or retrospectively with the cumulative adjustment at the date of the initial application. In July 2015, the FASB delayed the effective date of the new guidance to annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is now permitted after the original effective date of December 15, 2016. The Company is still evaluating the impact of adopting the new accounting guidance, but does not expect the adoption to have a material impact on its consolidated financial statements. In August 2014, FASB issued guidance that requires management to evaluate whether there are conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern, and to provide certain disclosures when it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued. The Company adopted this guidance for the annual period ending December 31, 2016, beginning with the first quarter ended March 31, 2016. The adoption of this guidance primarily addressed certain disclosures to the financial statements and had no impact on our financial position, results of operations or cash flows. In April 2015, the FASB issued guidance to simplify the presentation of debt issuance costs. This guidance provides that debt issuance costs related to a recognized liability be presented in the balance sheet as a direct reduction from the carrying amount of that debt liability, consistent with debt discounts. The Company adopted this guidance with the annual and the interim period beginning January 1, 2016, and applied the standard on a retrospective basis as of December 31, 2015. As of September 30, 2016, and December 31, 2015, we had $3,416 and $11,357, respectively, of debt issuance costs associated with $2.7 million of notes payable that were reclassified from other assets to a reduction in the carrying amount of the notes payable. The adoption of this standard did not have a material impact on our financial position and did not impact our results of operations or cash flows.

Going Concern

Going Concern	9 Months Ended
	Sep. 30, 2016
Going Concern [Abstract]
Going Concern	Note 3 — Going Concern The Company’s financial statements have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities and commitments in the normal course of business. During the nine months ended September 30, 2016, the Company generated net income of $65,920. As of September 30, 2016, the Company had an accumulated deficit of $1,383,571 and a working capital deficit of $2,413,041, consisting of cash and prepaid expenses of $428,709 less promissory notes for $2,725,000 due within the next twelve months and accounts payable and accrued liabilities of $116,750. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s future success is dependent upon its ability to achieve and maintain profitable operations, generate cash from operating activities, refinance existing debt obligations and/or obtain additional financing. Although we can provide no assurances, we believe our cash on hand, coupled with revenues generated by rental income and our ability to refinance our equity in the real estate we own, will provide sufficient liquidity and capital resources to fund our business for the next twelve months. In the event the Company experiences liquidity and capital resource constraints because of unanticipated operating losses, we may need to raise additional capital in the form of equity and/or debt financing. If such additional capital is not available on terms acceptable to us or at all, then we may need to curtail our operations and/or take additional measures to conserve and manage our liquidity and capital resources, any of which would have a material adverse effect on our financial position, results of operations, and our ability to continue in existence. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Real Estate Loans Receivable

Real Estate Loans Receivable	9 Months Ended
	Sep. 30, 2016
Receivables [Abstract]
Real Estate Loans Receivable	Note 4 — Real Estate Loans Receivable In May 2016, the Company invested $150,000 in a $1,750,000 promissory note secured by the assignment of a mortgage on real estate property located in Miami, Florida. The mortgage was held by Chemtov Mortgage Group (“CMG”), an entity wholly-owned by the Company’s co-CEO, Shawn Chemtov. The Company did not incur any loan origination fees or any other costs associated with the mortgage investment. The promissory note paid interest at 12% per annum and provided for cash interest payments on a monthly basis, commencing on July 1, 2016. The outstanding principal amount and any unpaid interest were due on May 19, 2017. The promissory note contained a prepayment charge equal to six months of interest on the prepaid amount less interest paid to the date of such prepayment. In September 2016, the promissory note was repaid in full, including $3,600 of additional interest as a result of the prepayment. During the three and nine months ended September 30, 2016, the Company recorded $6,900 and $9,039, respectively, of revenue generated by interest income from the $150,000 real estate loan receivable.

Real Estate Property Acquisitio

Real Estate Property Acquisitions	9 Months Ended
	Sep. 30, 2016
Business Combinations [Abstract]
Real Estate Property Acquisitions	Note 5 — Real Estate Property Acquisitions 5353 Joliet Street In June 2014, through its wholly-owned subsidiary, 5353 Joliet LLC, the Company acquired an owner-occupied 22,144 square feet industrial building situated on 1.4 acres of land in Denver, Colorado for $2,214,000. The acquisition was funded with proceeds from the issuance of a secured promissory note in the amount of $1,800,000 and $414,000 of cash on-hand. The promissory note is held by CMG, an entity wholly-owned by the Company’s co-CEO, Shawn Chemtov. CMG has assigned all ownership and security interest granted to it pursuant to the promissory note to 5353 Mortgage Loan, LLC, a single purpose entity created solely for the purpose of this transaction. CMG invested $100,000 of the $1,800,000 of funds used to finance the purchase of the promissory note. CMG acts as the loan servicing entity for the promissory note, administering the note, processing payments from the Company, and transferring all payments to 5353 Mortgage Loan, LLC. CMG charges no administration fees for servicing the promissory note. The promissory note bears interest at 10% per annum, provides for cash interest payments on a monthly basis, matured on June 1, 2016. The Company is currently in the process of refinancing or extending the due date of the promissory note. In the interim, the Company continues paying the monthly interest payments. The Company has guaranteed the promissory note and has pledged its ownership interest in 5353 Joliet LLC, and as such its fee-simple ownership interest in the property as security for the promissory note. For the nine months ended September 30, 2016 and 2015, the Company recorded $135,000 and $135,000, respectively, of interest expense related to the promissory note. In September 2014, the Company entered into a lease agreement contingent upon the lessee obtaining city and state licenses and permits for its intended operations at the premises. The contingencies were met by the lessee, and the lease agreement became effective December 1, 2014. The lease agreement is for a term of seven years. Insurance and real property taxes shall be paid by the Company and, subsequently, charged to the lessee as additional rent based on the actual expenses incurred - see Note 6 below for additional lease details. 503 Havana Street In September 2014, through its wholly-owned subsidiary, MJ Havana LLC, the Company acquired an owner-occupied 1,250 square foot building situated on 23,625 square feet of land in Aurora, Colorado for $756,000, exclusive of closing costs. The acquisition was funded with cash on-hand. The property is zoned B-2 and has been approved by the city of Aurora as a retail dispensary for recreational marijuana. Prior to closing on the property acquisition, the Company had pre-negotiated a 10-year lease agreement with a third-party, a licensed marijuana dispensary company serving both medical and adult (21+) customers in Colorado. Once the closing of the property was completed with the seller, the pre-negotiated lease was executed in September 2014 with the third-party. Pursuant to the terms of the lease agreement, the Company agreed to contribute $150,000 to improvements to the property - see Note 6 below for additional lease details. As of September 30, 2016, the Company had paid $150,000 towards the tenant’s building improvements. 1126 South Sheridan Boulevard In May 2015, through its wholly-owned subsidiary, MJ Sheridan LLC, the Company acquired real estate property located at 1126 South Sheridan Boulevard in Denver, Colorado, for $771,750, exclusive of closing costs. The Company funded the acquisition through the issuance of a promissory note in the amount of $925,000 to a related party of which $771,750 was used to purchase the property. The balance of the funds will be used by the Company as working capital. The acquired property is 17,729 square feet with a 3,828 square foot one story free-standing building. The property is zoned B-2 and has been approved by the city of Denver as a retail dispensary for recreational marijuana. The promissory note is held by CMG, an entity wholly-owned by the Company’s co-CEO, Shawn Chemtov. CMG has assigned all ownership and security interest granted to it pursuant to the promissory note to a single purpose entity created solely for the purpose of this transaction. CMG acts as the loan servicing entity for the promissory note, administering the note and processing payments from the Company. CMG charges no administration fees for servicing the promissory note. The promissory note bears interest at 10% per annum, provides for cash interest payments on a monthly basis, matures on June 1, 2017. The promissory note is collateralized with the Company’s ownership interest in the newly acquired property and its previously acquired property located at 503 Havana Street in Aurora, Colorado. The promissory note does not restrict the Company’s ability to incur future indebtedness. For the nine months ended September 30, 2016 and 2015, the Company recorded $69,375 and $37,929, respectively, of interest expense related to the promissory note. Prior to closing on the property acquisition, the Company had pre-negotiated a 10-year lease agreement with a third-party, a licensed marijuana dispensary company serving both medical and adult (21+) customers in Colorado. Once the closing of the property was completed with the seller, the pre-negotiated lease was executed in May 2015 with the third-party - see Note 6 below for additional lease details. A summary of real estate property at September 30, 2016, is as follows: Estimated September 30, Life 2016 Buildings 30 years $ 2,995,167 Improvements 9-10 years 150,000 Land Not depreciated 747,389 Computer equipment and software 3 years 2,000 Total real estate property 3,894,556 Less: Accumulated depreciation (228,380 ) Real estate property, net $ 3,666,176

Operating Leases

Operating Leases	9 Months Ended
	Sep. 30, 2016
Leases, Operating [Abstract]
Operating Leases	Note 6 — Operating Leases The Company generates revenues by leasing its acquired real estate properties through operating leasing arrangements. A summary of revenues generated from our rental properties for the three and nine months ended September 30, 2016 and 2015, is as follows: Three months ended September 30, Nine months ended September 30, 2016 2015 2016 2015 Revenues: Rental payments $ 144,666 $ 140,195 $ 429,718 $ 380,719 Reimbursed operating expenses 26,587 15,646 57,881 41,576 Deferred rent revenue 10,245 14,038 31,893 36,271 Total revenues from rental properties $ 181,498 $ 169,879 $ 519,492 $ 458,566 503 Havana Street In September 2014, the Company entered into a non-cancelable operating lease agreement with a marijuana dispensary (the “Lessee”) to move into the Company’s acquired property located at 503 Havana Street in Aurora, Colorado. The lease agreement is for a term of ten years and a monthly rent obligation of $11,250, subject to annual increases of 3% per year. Insurance and real property taxes shall be paid by the Company and, subsequently, charged to the Lessee as additional rent based on the actual expenses incurred. Pursuant to the terms of the lease agreement, the Company has agreed to contribute $150,000 to improvements to the property. Upon the expiration of the term of ten years, the Lessee has the option to renew the lease agreement for one additional ten-year term, on the same terms as provided in the lease agreement. During the third year of the lease agreement, the Lessee may exercise an option to purchase the Property. 5353 Joliet Street In September 2014, the Company entered into a lease agreement for its property and warehouse building located at 5353 Joliet Street in Denver, Colorado. The lease agreement is for a term of seven years and a monthly rent obligation of $25,835, subject to annual increases of 2% per year. Insurance and real property taxes shall be paid by the Company and, subsequently, charged to the lessee as additional rent based on the actual expenses incurred. The lease was contingent upon the lessee, obtaining city and state licenses and permits for its intended operations at the premises, within the dates provided in the lease agreement. The contingencies were met by the lessee, and the lease agreement became effective December 1, 2014. Upon the expiration of the seven-year term, the lessee has the option to renew the lease for two separate five-year terms, subject to rent reviews and adjustments, as set out in the lease agreement. 1126 South Sheridan Boulevard In May 2015, the Company entered into a lease agreement for its acquired property located at 1126 South Sheridan Boulevard in Denver, Colorado. The lease agreement is for a term of ten years and a monthly rent obligation of $10,945, subject to annual increases of 3% per year. Insurance and real property taxes shall be paid by the Company and, subsequently, charged to the Lessee as additional rent based on the actual expenses incurred. Upon the expiration of the term of ten years, the Lessee has the option to renew the lease agreement for one additional ten-year term, on the same terms as provided in the lease agreement. During the third year of the lease agreement, the Lessee may exercise an option to purchase the Property. Future minimum rental payments, excluding the reimbursement of specified operating expenses, for non-cancelable operating lease agreements are as follows as of September 30, 2016: 2016 $ 144,668 2017 588,457 2018 602,886 2019 617,681 2020 632,857 Thereafter 1,489,862 Total minimal rental payments $ 4,076,411

Related Party Transactions

Related Party Transactions	9 Months Ended
	Sep. 30, 2016
Related Party Transactions [Abstract]
Related Party Transactions	Note 7 — Related Party Transactions During the nine months ended September 30, 2016 and 2015, the Company paid $204,375 and $165,221, respectively, for interest due pursuant to $2,725,000 of promissory notes held by CMG, wholly-owned by the Company’s co-CEO and shareholder, Shawn Chemtov - see Note 5 above for additional details regarding the promissory notes held by a related party. In May 2016, the Company invested $150,000 in a promissory note held by CMG. In September 2016, the Company received $150,000 from the repayment of the promissory note held by CMG. During the nine months ended September 30, 2016, the Company received interest payments of $9,039 pursuant to the terms of the promissory note held by CMG - see Note 4 above for additional details regarding this investment.

Stock Based Compensation

Stock Based Compensation	9 Months Ended
	Sep. 30, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock Based Compensation	Note 8 — Stock Based Compensation Warrants A summary of warrants issued, exercised and expired during the nine months ended September 30, 2016, is as follows: Weighted Avg. Exercise Warrants: Shares Price Balance at January 1, 2016 166,665 $ 5.88 Issued — — Exercised — — Expired — — Balance at September 30, 2016 166,665 $ 5.88 Common Stock During the nine months ended September 30, 2015, the Company issued 149,417 shares of common stock for consulting services and recorded $139,134 of stock-based compensation expense for these consulting services, which has been classified as General and administrative expenses. The stock-based compensation expense was calculated based on the grant date fair value of the common stock shares issued in exchange for the consulting services.

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2016
Income Tax Disclosure [Abstract]
Income Taxes	Note 9 — Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance on deferred tax assets is established when management considers it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company did not incur any federal or state income tax expense or benefit for the nine months ended September 30, 2016 and 2015. As of December 31, 2015, the Company had net operating losses of approximately $684,000 for federal and state income tax purposes that can be carried forward for up to twenty years and deducted against future federal taxable income. The taxable income generated as a result of the Company’s net income of $65,920 for the nine months ended September 30, 2016, was completely offset by the available net operating loss carryforwards for federal and state income tax purposes. Based on the expected taxable income for the year ending December 31, 2016, the Company does not expect to incur alternative minimum tax on its net alternative minimum taxable income for the year. The net operating loss carryforwards expire in various years through 2035. All of the federal and state net operating losses incurred prior to 2014 are subject to 100 percent limitation under the provisions of Internal Revenue Code section 382 due to an ownership change and the continuity of business requirement.

Basic and Diluted Earnings (Los

Basic and Diluted Earnings (Loss) per Common Share	9 Months Ended
	Sep. 30, 2016
Earnings Per Share [Abstract]
Basic and Diluted Earnings (Loss) per Common Share	Note 10 — Basic and Diluted Earnings (Loss) per Common Share Basic earnings (loss) per share is computed by dividing the net income or net loss available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share is calculated using the treasury stock method and reflects the potential dilution that could occur if warrants were exercised and were not anti-dilutive. For the three and nine months ended September 30, 2016 and 2015, basic and diluted earnings (loss) per common share were the same since there were no potentially dilutive shares outstanding during the respective periods. The outstanding warrants as of September 30, 2016 and 2015, to purchase 166,665 shares of common stock that were not included in the calculations of diluted income per share because the impact would have been anti-dilutive for each of the periods presented.

Summary of Significant Accoun16

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2016
Accounting Policies [Abstract]
Real Estate Loans Receivable	Real Estate Loans Receivable The Company’s real estate loans receivable are recorded at amortized cost, net of loan loss reserves, and evaluated for impairment at each balance sheet date. The amortized cost of a real estate loan receivable is the outstanding unpaid principal balance, net of unamortized acquisition premiums or discounts and unamortized costs and fees directly associated with the origination or acquisition of the loan, if applicable. Interest income on the Company’s real estate loans receivable is recognized as revenue on an accrual basis over the life of the investment using the effective interest method. Direct loan origination fees and origination or acquisition costs, if applicable, are amortized over the term of the loan as an adjustment to interest income.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (the “FASB”) issued guidance to clarify the principles for recognizing revenue. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance provides a comprehensive framework for revenue recognition that supersedes current general revenue guidance and most industry-specific guidance. In addition, the guidance requires improved disclosures to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue that is recognized. An entity should apply the guidance either retrospectively to each prior reporting period presented or retrospectively with the cumulative adjustment at the date of the initial application. In July 2015, the FASB delayed the effective date of the new guidance to annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is now permitted after the original effective date of December 15, 2016. The Company is still evaluating the impact of adopting the new accounting guidance, but does not expect the adoption to have a material impact on its consolidated financial statements. In August 2014, FASB issued guidance that requires management to evaluate whether there are conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern, and to provide certain disclosures when it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued. The Company adopted this guidance for the annual period ending December 31, 2016, beginning with the first quarter ended March 31, 2016. The adoption of this guidance primarily addressed certain disclosures to the financial statements and had no impact on our financial position, results of operations or cash flows. In April 2015, the FASB issued guidance to simplify the presentation of debt issuance costs. This guidance provides that debt issuance costs related to a recognized liability be presented in the balance sheet as a direct reduction from the carrying amount of that debt liability, consistent with debt discounts. The Company adopted this guidance with the annual and the interim period beginning January 1, 2016, and applied the standard on a retrospective basis as of December 31, 2015. As of September 30, 2016, and December 31, 2015, we had $3,416 and $11,357, respectively, of debt issuance costs associated with $2.7 million of notes payable that were reclassified from other assets to a reduction in the carrying amount of the notes payable. The adoption of this standard did not have a material impact on our financial position and did not impact our results of operations or cash flows.

Real Estate Property Acquisit17

Real Estate Property Acquisitions (Tables)	9 Months Ended
	Sep. 30, 2016
Business Combinations [Abstract]
Summary of Real Estate Property	A summary of real estate property at September 30, 2016, is as follows: Estimated September 30, Life 2016 Buildings 30 years $ 2,995,167 Improvements 9-10 years 150,000 Land Not depreciated 747,389 Computer equipment and software 3 years 2,000 Total real estate property 3,894,556 Less: Accumulated depreciation (228,380 ) Real estate property, net $ 3,666,176

Operating Leases (Tables)

Operating Leases (Tables)	9 Months Ended
	Sep. 30, 2016
Leases, Operating [Abstract]
Summary of Revenues From Rental Properties	The Company generates revenues by leasing its acquired real estate properties through operating leasing arrangements. A summary of revenues generated from our rental properties for the three and nine months ended September 30, 2016 and 2015, is as follows: Three months ended September 30, Nine months ended September 30, 2016 2015 2016 2015 Revenues: Rental payments $ 144,666 $ 140,195 $ 429,718 $ 380,719 Reimbursed operating expenses 26,587 15,646 57,881 41,576 Deferred rent revenue 10,245 14,038 31,893 36,271 Total revenues from rental properties $ 181,498 $ 169,879 $ 519,492 $ 458,566
Schedule of Future Minimum Rental Payments	Future minimum rental payments, excluding the reimbursement of specified operating expenses, for non-cancelable operating lease agreements are as follows as of September 30, 2016: 2016 $ 144,668 2017 588,457 2018 602,886 2019 617,681 2020 632,857 Thereafter 1,489,862 Total minimal rental payments $ 4,076,411

Stock Based Compensation (Table

Stock Based Compensation (Tables)	9 Months Ended
	Sep. 30, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Summary of warrants issued, exercised and expired	A summary of warrants issued, exercised and expired during the nine months ended September 30, 2016, is as follows: Weighted Avg. Exercise Warrants: Shares Price Balance at January 1, 2016 166,665 $ 5.88 Issued — — Exercised — — Expired — — Balance at September 30, 2016 166,665 $ 5.88

Summary of Significant Accoun20

Summary of Significant Accounting Policies (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Accounting Policies [Abstract]
Note payable	$ 2,725,000	$ 2,700,000
Unamortized debt issuance costs	$ 3,416	$ 11,357

Going Concern (Details)

Going Concern (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Going Concern [Abstract]
Net income (loss)	$ 48,788	$ (23,393)	$ 65,920	$ (129,840)
Accumulated deficit	1,383,571		1,383,571		$ 1,449,491
Working capital deficit	2,413,041		2,413,041
Total cash and prepaid expenses	428,709		428,709
Real estate loans receivable, net
Promissory note, current portion	2,725,000		2,725,000		2,700,000
Accounts payable and accrued liabilities	$ 116,750		$ 116,750		$ 118,983

Real Estate Loans Receivable (D

Real Estate Loans Receivable (Details) - USD ($)	1 Months Ended		3 Months Ended		9 Months Ended
	Sep. 30, 2016	May 31, 2016	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Receivables [Abstract]
Investment in real estate loans receivable		$ 150,000			$ 150,000
Interest rate on promissory note					12.00%
Maturity date					May 19, 2017
Repayment of promissory note	$ 3,600
Interest income from real estate loans receivable			$ 6,900		$ 9,039

Real Estate Property Acquisit23

Real Estate Property Acquisitions (Narrative) (Details)	1 Months Ended			3 Months Ended		9 Months Ended
	May 31, 2015USD ($)ft²	Sep. 30, 2014USD ($)ft²	Jun. 30, 2014USD ($)aft²	Sep. 30, 2016USD ($)	Sep. 30, 2015USD ($)	Sep. 30, 2016USD ($)	Sep. 30, 2015USD ($)
Business Acquisition [Line Items]
Promissory note, maturity date						May 19, 2017
Interest expense				$ 68,125	$ 68,125	$ 204,375	$ 172,929
Owner Occupied Industrial Building Situated on Land in Denver Colorado [Member]
Business Acquisition [Line Items]
Area of building acquired (in square foot) | ft²			22,144
Area of land on which building is situated (in acres) | a			1.4
Purchase consideration			$ 2,214,000
Proceeds from the issuance of a secured promissory note used to fund acquisition			1,800,000
Cash on-hand used to fund acquisition			$ 414,000
Lease agreement term		7 years
Owner Occupied Building Situated On Land In Aurora Colorado [Member]
Business Acquisition [Line Items]
Area of building acquired (in square foot) | ft²		1,250
Area of land on which building is situated (in acres) | ft²		23,625
Purchase consideration		$ 756,000
Obligation to improvements to the property				$ 150,000		150,000
Payments for tenant's building improvements						150,000
Chemtov Mortgage Group [Member]
Business Acquisition [Line Items]
Interest expense						204,375	165,221
Chemtov Mortgage Group [Member] | Owner Occupied Industrial Building Situated on Land in Denver Colorado [Member]
Business Acquisition [Line Items]
Amount invested to finance the purchase of the promissory note		100,000
Administration fees for servicing the promissory note
Interest rate of promissory note		10.00%
Promissory note, maturity date		Jun. 1, 2016
Interest expense						135,000	135,000
Real Estate Property Located at South Sheridan Boulevard in Denver, Colorado [Member]
Business Acquisition [Line Items]
Area of building acquired (in square foot) | ft²	17,729
Area of land on which building is situated (in acres) | ft²	3,828
Purchase consideration	$ 771,750
Proceeds from the issuance of a secured promissory note used to fund acquisition	925,000
Amount invested to finance the purchase of the promissory note	$ 771,750
Lease agreement term	10 years
Monthly rent obligation	$ 10,945
Annual increases percentage	3.00%
Real Estate Property Located at South Sheridan Boulevard in Denver, Colorado [Member] | Chemtov Mortgage Group [Member]
Business Acquisition [Line Items]
Promissory note, maturity date	Jun. 1, 2017
Interest expense						$ 69,375	$ 37,929

Real Estate Property Acquisit24

Real Estate Property Acquisitions (Schedule of Real Estate Property) (Details)	9 Months Ended
	Sep. 30, 2016USD ($)
Property, Plant and Equipment [Line Items]
Total real estate property	$ 3,894,556
Less: Accumulated depreciation	(228,380)
Real estate property, net	$ 3,666,176
Buildings [Member]
Property, Plant and Equipment [Line Items]
Estimated Life	30 years
Total real estate property	$ 2,995,167
Computer equipment and software [Member]
Property, Plant and Equipment [Line Items]
Estimated Life	3 years
Total real estate property	$ 2,000
Building Improvements [Member]
Property, Plant and Equipment [Line Items]
Total real estate property	$ 150,000
Building Improvements [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated Life	9 years
Building Improvements [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated Life	10 years
Land [Member]
Property, Plant and Equipment [Line Items]
Total real estate property	$ 747,389

Operating Leases (Narrative) (D

Operating Leases (Narrative) (Details) - USD ($)	1 Months Ended
	May 31, 2015	Sep. 30, 2014
503 Havana Street Aurora, Colorado [Member]
Property Subject to or Available for Operating Lease [Line Items]
Lease agreement term		10 years
Monthly rent obligation		$ 11,250
Annual increases percentage		3.00%
Obligation to improvements to the property		$ 150,000
Option to renew term		10 years
5353 Joliet Street Denver Colorado [Member]
Property Subject to or Available for Operating Lease [Line Items]
Lease agreement term		7 years
Monthly rent obligation		$ 25,835
Annual increases percentage		2.00%
Option to renew term		5 years
Real Estate Property Located at South Sheridan Boulevard in Denver, Colorado [Member]
Property Subject to or Available for Operating Lease [Line Items]
Lease agreement term	10 years
Monthly rent obligation	$ 10,945
Annual increases percentage	3.00%
Option to renew term	10 years

Operating Leases (Schedule of R

Operating Leases (Schedule of Revenues From Rental Properties) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Revenues:
Rental payments	$ 144,666	$ 140,195	$ 429,718	$ 380,719
Reimbursed operating expenses	26,587	15,646	57,881	41,576
Deferred rent revenue	10,245	14,038	31,893	36,271
Total revenues from rental properties	$ 181,498	$ 169,879	$ 519,492	$ 458,566

Operating Leases (Schedule of F

Operating Leases (Schedule of Future Minimum Rental Revenues) (Details)	Sep. 30, 2016USD ($)
Leases, Operating [Abstract]
2,016	$ 144,668
2,017	588,457
2,018	602,886
2,019	617,681
2,020	632,857
Thereafter	1,489,862
Total minimal rental payments	$ 4,076,411

Related Party Transactions (Det

Related Party Transactions (Details) - USD ($)	1 Months Ended		3 Months Ended		9 Months Ended
	Sep. 30, 2016	May 31, 2016	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Related Party Transaction [Line Items]
Interest paid to the promissory note held by CMG			$ 68,125	$ 68,125	$ 204,375	$ 172,929
Promissory note held by related party	$ 2,721,584		2,721,584		2,721,584		$ 2,713,643
Investment in real estate loans receivable		$ 150,000			150,000
Proceeds from loans receivables					150,000
Chemtov Mortgage Group [Member]
Related Party Transaction [Line Items]
Interest paid to the promissory note held by CMG					204,375	$ 165,221
Promissory note held by related party	2,725,000		$ 2,725,000		2,725,000
Investment in real estate loans receivable		$ 150,000
Proceeds from loans receivables	$ 150,000
Interest income					$ 9,039

Stock Based Compensation (Narra

Stock Based Compensation (Narrative) (Details) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock issued for services, shares		149,417
Stock-based compensation expense		$ 139,134

Stock Based Compensation (Sched

Stock Based Compensation (Schedule of Warrants Issued, Exercised and Expired) (Details) - Warrant [Member] - Medbox, Inc. [Member] - Consulting services agreement [Member]	9 Months Ended
	Sep. 30, 2016$ / sharesshares
Shares
Balance at January 1, 2016 | shares	166,665
Issued | shares
Exercised | shares
Expired | shares
Balance at September 30, 2016 | shares	166,665
Weighted Avg. Exercise Price
Balance at January 1, 2016 | $ / shares	$ 5.88
Issued | $ / shares
Exercised | $ / shares
Expired | $ / shares
Balance at September 30, 2016 | $ / shares	$ 5.88

Income Taxes (Narrative) (Detai

Income Taxes (Narrative) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Income Tax Disclosure [Abstract]
Provision for income taxes
Net operating losses					$ 684,000
Income (loss) before income taxes	$ 48,788	$ (23,393)	$ 65,920	$ (129,840)
Operating loss carryforwards,expiration period			20 years
Operating loss carryforwards,expiration date			Dec. 31, 2035

Basic and Diluted Earnings (L32

Basic and Diluted Earnings (Loss) per Common Share (Details) - shares	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Earnings Per Share [Abstract]
Warrants excluded from calculation of of diluted income per share	166,665	166,665