Document_And_Entity_Informatio
Document And Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Nov. 10, 2014 | |
Document Information [Line Items] | ||
Entity Registrant Name | Reven Housing REIT, Inc. | |
Entity Central Index Key | 1487782 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Smaller Reporting Company | |
Trading Symbol | RVEN | |
Entity Common Stock, Shares Outstanding | 7,016,796 | |
Document Type | 10-Q | |
Amendment Flag | TRUE | |
Amendment Description | This Amendment No. 1 on Form 10-Q/A (“Amendment No. 1”) is being filed to effect a restatement of the previously issued consolidated financial statements of Reven Housing REIT, Inc. (either the “Company,” “we” or “our”) as of and for the three and nine months ended September 30, 2014 filed as part of the Company’s Quarterly Report on Form 10-Q filed with the SEC on November 12, 2014 (“Original Form 10-Q”). The Company is restating its previously issued third quarter 2014 consolidated financial statements to correct an error that resulted from the inadvertent failure to properly account for our portfolio acquisitions of leased single family homes as asset acquisitions instead of business acquisitions. In addition, a portion of the purchase price relating to our third quarter 2014 acquisitions should have been allocated on our balance sheet to lease origination costs instead of building values. This Amendment No.1 amends and restates Items 1, 2 and 4 of Part I of the Original Form 10-Q to reflect the effects of the restatements. In addition, in accordance with Rule 12b-15 promulgated under the Securities and Exchange Act of 1934, as amended, this Amendment also includes updated certifications from our Chief Executive Officer and Chief Financial Officer as Exhibits 31.1, 31.2 and 32.1. The remaining Items contained within this Amendment No. 1 consist of all other Items originally contained in Original Form 10-Q. This Amendment No. 1 does not reflect events occurring after the filing of the Original Form 10-Q or modify or update those disclosures in any way other than as required to reflect the effects of the restatements. | |
Document Period End Date | 30-Sep-14 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2014 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Investment in real estate: | ||
Land | $4,090,909 | $2,514,009 |
Buildings and improvements | 17,917,326 | 9,685,361 |
Investment in real estate,Gross | 22,008,235 | 12,199,370 |
Accumulated depreciation | -430,552 | -73,950 |
Investment in real estate, net | 21,577,683 | 12,125,420 |
Cash | 6,584,098 | 2,134,510 |
Rents and other receivables | 95,714 | 10,053 |
Tax and insurance reserves | 169,740 | 0 |
Escrow deposits and prepaid expenses | 896,545 | 151,128 |
Lease origination costs, net | 124,886 | 75,038 |
Loan fees, net | 253,177 | 0 |
Deferred stock issuance costs | 472,357 | 35,000 |
Total Assets | 30,174,200 | 14,531,149 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Accounts payable and accrued expenses | 722,329 | 347,179 |
Security deposits | 253,870 | 156,985 |
Note payable | 7,570,000 | 0 |
Total Liabilities | 8,546,199 | 504,164 |
Commitments (Note 9) | ||
Stockholders' Equity | ||
Preferred stock, $.001 par value; 25,000,000 shares authorized; No shares issued & outstanding | 0 | 0 |
Common stock, $.001 par value; 100,000,000 shares authorized; 4,393,044 and 6,591,796 shares issued & outstanding at December 31, 2013 and September 30, 2014, respectively | 6,592 | 4,393 |
Additional paid-in capital | 24,601,719 | 16,036,648 |
Accumulated deficit | -2,980,310 | -2,014,056 |
Total Stockholders' Equity | 21,628,001 | 14,026,985 |
Total Liabilities and Stockholders' Equity | $30,174,200 | $14,531,149 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized | 25,000,000 | 25,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 6,591,796 | 4,393,044 |
Common stock, shares outstanding | 6,591,796 | 4,393,044 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Rental income, net | $740,778 | $14,193 | $1,716,758 | $55,817 |
Operating expenses: | ||||
Rental expenses | 262,311 | 11,978 | 682,700 | 25,718 |
General and administrative | 278,543 | 17,060 | 988,790 | 121,599 |
Legal and accounting | 49,809 | 21,536 | 219,661 | 114,411 |
Real estate acquisition costs | 256,764 | 0 | 295,122 | 0 |
Interest expense | 50,603 | 25,081 | 53,090 | 77,382 |
Amortization of discount on notes payable | 0 | 281,625 | 0 | 563,253 |
Depreciation and amortization | 240,650 | 4,200 | 443,650 | 12,600 |
Total operating expenses | 1,138,680 | 361,480 | 2,683,013 | 914,963 |
Net loss | ($397,902) | ($347,287) | ($966,255) | ($859,146) |
Net loss per share | ||||
(Basic and fully diluted) (in dollars per share) | ($0.06) | ($0.64) | ($0.17) | ($1.86) |
Weighted average number of common shares outstanding (in shares) | 6,591,796 | 546,872 | 5,610,265 | 461,098 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Cash Flows From Operating Activities: | ||
Net loss | ($966,255) | ($859,146) |
Adjustments to reconcile net loss to Net cash used for operating activities: | ||
Amortization of debt discount | 0 | 563,253 |
Stock compensation | 195,000 | 0 |
Depreciation and amortization | 443,650 | 12,600 |
Changes in operating assets and liabilities: | ||
Rents and other receivables | -85,661 | -7,090 |
Tax and insurance reserves | -169,740 | 0 |
Accounts payable, accrued expenses, accrued interest and security deposits | 472,035 | -76,242 |
Related party advances | 0 | -263,877 |
Net cash used for operating activities | -110,971 | -630,502 |
Cash Flows From Investing Activities: | ||
Additions to investments in real estate | -9,808,865 | -263,428 |
Lease origination costs | -123,569 | 0 |
Payments for escrow deposits and prepaids on residential homes | -1,590,763 | 0 |
Reduction of escrow deposits and prepaids expenses | 845,346 | 0 |
Net cash used for investing activities | -10,677,851 | -263,428 |
Cash Flows From Financing Activities: | ||
Proceeds from notes payable | 7,570,000 | 500,000 |
Payment of convertible notes payable | 0 | -152,176 |
Loan fees | -266,503 | 0 |
Net proceeds from common stock issuance | 8,372,270 | 10,646,457 |
Payments for deferred stock issuance costs | -437,357 | 0 |
Net cash provided by financing activities | 15,238,410 | 10,994,281 |
Net Increase In Cash | 4,449,588 | 10,100,351 |
Cash at the Beginning of the Period | 2,134,510 | 5,763 |
Cash at the End of the Period | 6,584,098 | 10,106,114 |
Supplemental Disclosure of Non-Cash Investing and Financing Activities: | ||
Debt discount for allocation of proceeds to warrants and beneficial conversion feature of debt | 0 | 291,920 |
Conversion of debt to common shares | 0 | 902,176 |
Deferred costs of common stock issuance | 0 | 50,000 |
Supplemental Disclosure: | ||
Cash paid for interest | $34,778 | $0 |
ORGANIZATION_OPERATIONS_AND_SU
ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Accounting Policies [Abstract] | |||||||||||
Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block] | NOTE 1. ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||
Reven Housing REIT, Inc. was initially incorporated in the State of Colorado and then converted to a Maryland corporation on April 1, 2014 (Reven Housing REIT, Inc., along with its subsidiaries, are also referred to herein collectively as the “Company”). The Company acquires portfolios of occupied and rented single-family homes throughout the United States with the objective of receiving income from rental property activity and future profits from the sale of rental property at appreciated values. | |||||||||||
Restatement of Consolidated Financial Statements | |||||||||||
In connection with preparing the annual financial information for the year ending December 31, 2014, prior period errors were identified which affected the annual period ended December 31, 2013, and the quarterly period ending September 30, 2014. These errors occurred in the Company’s accounting for the acquisition of certain real property portfolios of single family homes included in investment in real estate and involve acquisition costs that were improperly capitalized, and the reallocation of acquisition values from building and improvements to lease origination costs. These errors require the Company to restate previously reported financial results contained in this report. The effects of these prior period errors in the consolidated financial statements for the period ended December 31, 2013 are disclosed in the Form 10K/A filing for that period. The changes to the condensed consolidated financial statements for the period ended September 30, 2014 are shown in the following table and include reclassification of expenses in order to enable the presentation to be consistent with the December 31, 2013 year end amended filing. | |||||||||||
September 30, 2014 | |||||||||||
As | As previously | ||||||||||
Restated | Reported | Adjustment | |||||||||
Consolidated Balance Sheet | |||||||||||
Buildings and improvements | $ | 22,008,235 | $ | 22,693,455 | $ | -685,220 | |||||
Accumulated depreciation | $ | -430,552 | $ | -432,802 | $ | 2,250 | |||||
Investment in real estate, net | $ | 21,577,683 | $ | 22,260,653 | $ | -682,970 | |||||
Lease origination costs, net | $ | 124,886 | $ | - | $ | 124,886 | |||||
Total Assets | $ | 30,174,200 | $ | 30,732,284 | $ | -558,084 | |||||
Accumulated deficit | $ | -2,980,310 | $ | -2,422,226 | $ | -558,084 | |||||
Total Stockholders' Equity | $ | 21,628,001 | $ | 22,186,085 | $ | -558,084 | |||||
Total Liabilities and Stockholders' Equity | $ | 30,174,200 | $ | 30,732,284 | $ | -558,084 | |||||
Three months ended September 30, 2014 | |||||||||||
As | As previously | ||||||||||
Restated | Reported | Adjustment | |||||||||
Consolidated Statement of Operations | |||||||||||
Rental expenses | $ | 262,311 | $ | 317,444 | $ | -55,133 | |||||
Legal and accounting | $ | 49,809 | $ | 69,054 | $ | -19,245 | |||||
Real estate acquisition costs | $ | 256,764 | $ | - | $ | 256,764 | |||||
Depreciation and amortization | $ | 240,650 | $ | 166,928 | $ | 73,722 | |||||
Total operating expenses | $ | 1,138,680 | $ | 882,572 | $ | 256,108 | |||||
Net loss | $ | -397,902 | $ | -141,794 | $ | -256,108 | |||||
Net loss per share | $ | -0.06 | $ | -0.02 | $ | -0.04 | |||||
Nine months ended September 30, 2014 | |||||||||||
As | As previously | ||||||||||
Restated | Reported | Adjustment | |||||||||
Consolidated Statement of Operations | |||||||||||
Rental expenses | $ | 682,700 | $ | 737,833 | $ | -55,133 | |||||
General and administrative | $ | 988,790 | $ | 1,005,648 | $ | -16,858 | |||||
Legal and accounting | $ | 219,661 | $ | 260,406 | $ | -40,745 | |||||
Real estate acquisition costs | $ | 295,122 | $ | - | $ | 295,122 | |||||
Depreciation and amortization | $ | 443,650 | $ | 369,928 | $ | 73,722 | |||||
Total operating expenses | $ | 2,683,013 | $ | 2,426,905 | $ | 256,108 | |||||
Net loss | $ | -966,255 | $ | -710,147 | $ | -256,108 | |||||
Net loss per share | $ | -0.17 | $ | -0.13 | $ | -0.04 | |||||
Nine months ended September 30, 2014 | |||||||||||
As | As previously | ||||||||||
Restated | Reported | Adjustment | |||||||||
Consolidated Statement of Cash Flows | |||||||||||
Net loss | $ | -966,255 | $ | -710,147 | $ | -256,108 | |||||
Depreciation and amortization | $ | 443,650 | $ | 369,928 | $ | 73,722 | |||||
Net cash used for operating activities | $ | -110,971 | $ | 71,415 | $ | -182,386 | |||||
Acquisitions of investments in real estate | $ | -9,808,865 | $ | -10,114,820 | $ | 305,955 | |||||
Lease origination costs | $ | -123,569 | $ | - | $ | -123,569 | |||||
Net cash used for investing activities | $ | -10,677,851 | $ | -10,860,237 | $ | 182,386 | |||||
Basis of Presentation | |||||||||||
The accompanying unaudited condensed consolidated interim financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of management, all adjustments (which include only normal recurring adjustments except as noted in management’s discussion and analysis of financial condition and results of operations) necessary to present fairly the financial position, results of operations and changes in cash flows have been made. | |||||||||||
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the 2013 Annual Report on Form 10-KA, filed April 17, 2015. The results of operations for the period ended September 30, 2014 are not necessarily indicative of the operating results for the full year. | |||||||||||
On November 5, 2014, the Company effected a 1-for-20 reverse stock split of the issued common stock. Each stockholder’s percentage ownership and proportional voting power generally remained unchanged as a result of the reverse stock split. All applicable share data, per share amounts and related information in the condensed consolidated financial statements and notes thereto have been adjusted retroactively to give effect to the 1-for-20 reverse stock split. See Note 5. | |||||||||||
Principles of Consolidation | |||||||||||
The accompanying financial statements consolidate the accounts of the Company and its wholly-owned subsidiaries, Reven Housing Georgia, LLC, Reven Housing Texas, LLC, Reven Housing Florida, LLC, and Reven Housing Tennessee, LLC. All significant inter-company transactions have been eliminated in consolidation. | |||||||||||
New Accounting Pronouncements | |||||||||||
In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2014-09 Revenue from Contracts with Customers, or ASU No. 2014-09, which will supersede nearly all existing revenue recognition guidance under GAAP. ASU No. 2014-09 provides that an entity recognize revenue when it transfers 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. This update also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. ASU No. 2014-09 allows for either full retrospective or modified retrospective adoption and will become effective for the Company in the fourth quarter of 2017. | |||||||||||
The Company has adopted all recently issued accounting pronouncements. The adoption of the accounting pronouncements, including those not yet effective, is not anticipated to have a material effect on the financial position or results of operations of the Company. | |||||||||||
Cash and Cash Equivalents | |||||||||||
The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents. | |||||||||||
Rents and Other Receivables | |||||||||||
Rents and other receivables represent the amount of rent receivables, security deposits and net rental funds which are held by the property manager on behalf of the Company, net of any allowance for amounts deemed uncollectible. | |||||||||||
Tax and Insurance reserves | |||||||||||
Tax and insurance reserves represent amounts held in accordance with the terms of our loan for taxes and insurance. | |||||||||||
Loan Fees | |||||||||||
Loan closing costs and fees totaled $266,503 and will be amortized over the term of the loan which is 60 months. For the three and nine months ended September 30, 2014, amortization expense for these loan fees was $13,326. | |||||||||||
Deferred Stock Issuance Costs | |||||||||||
Deferred stock issuance costs represent amounts paid for consulting services and other offering expenses in conjunction with the future raising of additional capital to be performed within one year. These costs are charged against additional paid-in capital as a cost of the stock issuance upon closing of the respective stock placement. | |||||||||||
Warrant Issuance and Note Conversion Feature | |||||||||||
The Company accounts for the proceeds from the issuance of convertible notes payable with detachable stock purchase warrants and embedded conversion features in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 470-20, Debt with Conversion and Other Options. Under FASB ASC 470-20, the proceeds from the issuance of a debt instrument with detachable stock purchase warrants shall be allocated to the two elements based on the relative fair values of the debt instrument without the warrants and of the warrants themselves at the time of issuance. The portion of the proceeds allocated to the warrants is accounted for as additional paid-in capital and the remaining proceeds are allocated to the debt instrument which resulted in a discount to debt which is amortized and charged as interest expense over the term of the note agreement. Additionally, pursuant to FASB ASC 470-20, the intrinsic value of the embedded conversion feature of the convertible notes payable is included in the discount to debt and amortized and charged to interest expense over the life of the note agreement. | |||||||||||
Revenue Recognition | |||||||||||
Property is leased under rental agreements of generally one year and revenue is recognized over the lease term on a straight-line basis. | |||||||||||
Income Taxes | |||||||||||
The Company intends to elect to be taxed as a real estate investment trust (“REIT”), as defined in the Internal Revenue Code, upon meeting the necessary requirements. Management believes that the Company will be able to satisfy the requirements for qualification as a REIT. Accordingly, the Company is not expecting to be subject to federal income tax, provided that it qualifies as a REIT and distributions to the stockholders equal or exceed REIT taxable income. | |||||||||||
However, qualification and taxation as a REIT depends upon the Company’s ability to meet the various qualification tests imposed under the Internal Revenue Code related to the percentage of income that are earned from specified sources, the percentage of assets that fall within specified categories, the diversity of capital stock ownership, and the percentage of earnings that are distributed. Accordingly, no assurance can be given that the Company will be organized or be able to operate in a manner so as to qualify or remain qualified as a REIT. If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal and state income tax (including any applicable alternative minimum tax) on its taxable income at regular corporate tax rates, and the Company may be ineligible to qualify as a REIT for four subsequent tax years. Even if the Company qualifies as a REIT, it may be subject to certain state or local income taxes. | |||||||||||
The tax benefit of uncertain tax positions is recognized only if it is “more likely than not” that the tax position will be sustained, based solely on its technical merits, with the taxing authority having full knowledge of relevant information. The measurement of a tax benefit for an uncertain tax position that meets the “more likely than not” threshold is based on a cumulative probability model under which the largest amount of tax benefit recognized is the amount with a greater than 50% likelihood of being realized upon ultimate settlement with the taxing authority, having full knowledge of all the relevant information. As of December 31, 2013 and September 30, 2014, the Company had no unrecognized tax benefits. The Company does not anticipate a significant change in the total amount of unrecognized tax benefits during 2014. | |||||||||||
Incentive Compensation Plan | |||||||||||
During 2012, the Company established the 2012 Incentive Compensation Plan, which was subsequently amended and restated in December 2013 (“2012 Plan”). The 2012 Plan allows for the grant of options and other awards representing up to 1,650,000 shares of the Company’s common stock. Such awards may be granted to officers, directors, employees, consultants and other persons who provide services to the Company or any related entity. Under the 2012 Plan, options may be granted at an exercise price greater than or equal to the market value at the date of the grant, for owners of 10% or more of the voting shares, at an exercise price of not less than 110% of the market value. Awards are exercisable over a period of time as determined by a committee designated by the Board of Directors, but in no event longer than ten years. | |||||||||||
On April 4, 2014, the Board of Directors authorized the issuance of, and the Company issued, an aggregate of 48,750 shares of the Company’s common stock under the 2012 Plan to the members of the Board of Directors as compensation for their services. | |||||||||||
On October 16, 2014, the Board of Directors authorized the issuance of, and the Company issued, an aggregate of 425,000 shares of the Company’s common stock under the 2012 Plan to certain officers and consultants of the Company. The shares issued are subject to restrictions and future vesting conditions based on the Company reaching certain future milestones. None of the shares were vested as of the issuance date. | |||||||||||
Net Loss Per Share | |||||||||||
Net loss per share is computed by dividing the net loss by the weighted average number of shares of common stock outstanding. Warrants, stock options, and common stock issuable upon the conversion of the Company's preferred stock (if any), are not included in the computation if the effect would be anti-dilutive and would increase the earnings or decrease loss per share. For the nine months ended September 30, 2013, and 2014, potentially dilutive securities excluded from the calculations were 263,588 shares issuable upon exercise of outstanding warrants granted in conjunction with the convertible notes. | |||||||||||
Financial Instruments | |||||||||||
The carrying value of the Company’s financial instruments, as reported in the accompanying condensed consolidated balance sheets, approximates fair value. | |||||||||||
Security Deposits | |||||||||||
Security deposits represent amounts deposited by tenants at the inception of the lease. | |||||||||||
Use of Estimates | |||||||||||
The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the balance sheet dates and reported amounts of expenses for the periods presented. Accordingly, actual results could differ from those estimates. Significant estimates include assumptions used to determine the allocation of purchase prices of property acquisitions. | |||||||||||
Investments in Real Estate | |||||||||||
The Company accounts for its investments in real estate as business combinations under the guidance of FASB ASC Topic 805, Business Combinations (“ASC 805”) and these acquisitions are recorded at fair value, allocated to land, building and the existing leases based upon their fair values at the date of acquisition, with acquisition costs expensed as incurred. In making estimates of fair values for purposes of allocating purchase price, the Company utilizes its own market knowledge and published market data. The estimated fair value of acquired in-place leases represents the expected costs the Company would have incurred to lease the property at the date of acquisition. Each portfolio of acquired property is recorded as a separate business combination. | |||||||||||
Land, buildings and improvements are recorded at cost. Buildings and improvements are depreciated over estimated useful lives of approximately 27.5 years using the straight-line method. Lease origination costs are amortized over the average remaining term of the in-place leases which is generally less than one year. Maintenance and repair costs are charged to expenses as incurred. | |||||||||||
The Company assesses the impairment of investments in real estate, whenever events or changes in business circumstances indicate that carrying amounts of the assets may not be fully recoverable. When such events occur, management determines whether there has been impairment by comparing the asset’s carrying value with its fair value. Should impairment exist, the asset is written down to its estimated fair value. The Company has not recognized any impairment losses through September 30, 2014. | |||||||||||
Reclassifications | |||||||||||
Certain amounts for 2013 have been reclassified to conform to the current period’s presentation. | |||||||||||
RESIDENTIAL_HOMES
RESIDENTIAL HOMES | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Residential Homes [Abstract] | ||||||||||||||
Residential Homes [Text Block] | NOTE 2. RESIDENTIAL HOMES | |||||||||||||
Residential homes purchased by the Company are recorded at cost. The homes are leased on short-term leases expiring on various dates primarily over the coming year. | ||||||||||||||
The following table represents the Company’s investment in the homes and allocates purchase price in accordance with ASC 805: | ||||||||||||||
Number | Residential | Total | ||||||||||||
of Homes | Land | Homes | Investment | |||||||||||
Total at December 31, 2013 | 159 | $ | 2,514,009 | $ | 9,685,361 | $ | 12,199,370 | |||||||
Purchases and improvements during 2014: | ||||||||||||||
Houston, TX | 18 | 319,500 | 1,236,765 | 1,556,265 | ||||||||||
Jacksonville, FL | 47 | 479,700 | 2,745,578 | 3,225,278 | ||||||||||
Memphis, TN | 69 | 777,700 | 4,229,978 | 5,007,678 | ||||||||||
Atlanta, GA improvements | - | - | 19,644 | 19,644 | ||||||||||
Total at September 30, 2014 | 293 | $ | 4,090,909 | $ | 17,917,326 | $ | 22,008,235 | |||||||
ACCOUNTS_PAYABLE_AND_ACCRUED_E
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Accounts Payable and Accrued Liabilities [Abstract] | ||||||||
Accounts Payable and Accrued Liabilities Disclosure [Text Block] | NOTE 3. ACCOUNTS PAYABLE AND ACCRUED EXPENSES | |||||||
At December 31, 2013 and September 30, 2014, accounts payable and accrued expenses consisted of the following: | ||||||||
2013 | 2014 | |||||||
Accounts payable | $ | 89,666 | $ | 74,926 | ||||
Accrued property taxes | 196,141 | 197,606 | ||||||
Accrued legal, board fees and other expenses | 61,372 | 422,987 | ||||||
Accrued interest | - | 26,810 | ||||||
$ | 347,179 | $ | 722,329 | |||||
NOTE_PAYABLE
NOTE PAYABLE | 9 Months Ended |
Sep. 30, 2014 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | NOTE 4. NOTE PAYABLE |
On June 12, 2014, Reven Housing Texas, LLC, a wholly owned subsidiary of the Company, issued a promissory note in the principal amount of up to $7,570,000 to Silvergate Bank, secured by deeds of trust encumbering the Company’s homes located in Texas. The entire balance of principal and accrued interest is due and payable on July 5, 2019. The note provides for monthly payments of interest only at a rate of 1.00% over the prime rate (current interest rate is 4.25%) until July 5, 2016. Thereafter, monthly payments of interest and principal, assuming a 25 year amortization rate will be made until maturity. The note has a prepayment penalty of 3% calculated on principal amounts prepaid prior to July 5, 2016. There is no prepayment penalty on amounts paid after that date. Loan closing costs and fees totaled $266,503 and will be amortized over the term of the loan which is 60 months. | |
The terms of the note also provide for escrows of taxes and insurance reserves. As of September 30, 2014, a total of $169,740 of cash was held in these lender escrow accounts. | |
STOCKHOLDERS_EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2014 | |
Equity [Abstract] | |
Stockholders Equity Note Disclosure [Text Block] | NOTE 5. STOCKHOLDERS’ EQUITY |
On April 4, 2014, in a separate follow-on private placement to the September 27, 2013 private placement, the Company issued an additional 675,000 shares of its common stock for a purchase price of $4.00 per share for gross proceeds of $2,700,000. On May 16, 2014, the Company completed the final tranche of this follow-on private placement with the same accredited investor upon the receipt of additional gross proceeds of $5,900,000 and issued an additional 1,475,000 shares of its common stock for a purchase price of $4.00 per share. Offering costs related to this follow-on private placement totaled $227,730 resulting in combined net proceeds of $8,372,270. | |
On November 5, 2014, the Company effected a 1-for-20 reverse stock split of issued common stock. In conjunction with the reverse stock split, the Board of Directors approved a change in the number of authorized common shares from 600,000,000 to 100,000,000, which change was effected immediately after the effectiveness of the reverse stock split. Additionally, the par value of the shares was modified from $.02 to $.001 per share so that the par value per share of the common stock before the reverse stock split and after the reverse stock split remained at $.001 per share. References in these condensed consolidated financial statements and notes have been adjusted to retroactively account for the effects of the reverse split. | |
INCOME_TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2014 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | NOTE 6. INCOME TAXES |
The Company plans to elect REIT status when it meets all requirements allowing it to do so. At that time, the Company would generally not be subject to income taxes assuming it complied with the specific distribution rules applicable to REITs. | |
Realization of deferred tax assets is dependent upon sufficient future taxable income during the period that deductible temporary differences and expected carry-forwards are available to reduce taxable income. The Company records a valuation allowance when, in the opinion of management, it is more likely than not, that the Company will not realize some or all deferred tax assets. As the achievement of required future taxable income is uncertain, the Company recorded a valuation allowance equal to the deferred tax asset at December 31, 2013 and September 30, 2014. At December 31, 2013 the Company had federal and state net operating loss carry-forwards of approximately $675,000 and $673,000, respectively. The federal and state tax loss carry-forwards will begin to expire in 2032, unless previously utilized. | |
Pursuant to Internal Revenue Code Section 382, use of the Company’s net operating loss carry-forwards may be limited if a cumulative change in ownership of more than 50% occurs within a three year period. Management believes that such an ownership change had occurred but has not performed a study of the limitations on the net operating losses. | |
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2014 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | NOTE 7. RELATED PARTY TRANSACTIONS |
The Company sub-leases office space on a month-to-month basis from Reven Capital, LLC which is wholly-owned by Chad M. Carpenter, a shareholder of the Company and the Company’s Chief Executive Officer, and reimburses Reven Capital, LLC for Company expenses paid and previously advanced by Reven Capital, LLC. The advances are due on demand, unsecured and are non-interest bearing. These advances were paid off in full during the year ended December 31, 2013. During the period ended September 30, 2013, the Company paid previous advances of $263,877. | |
STOCK_COMPENSATION
STOCK COMPENSATION | 9 Months Ended |
Sep. 30, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | NOTE 8. STOCK COMPENSATION |
On April 4, 2014, the Board of Directors authorized the issuance of, and the Company issued, an aggregate of 48,750 shares of the Company’s common stock under the 2012 Plan to the members of the Board of Directors as compensation for their services. These shares were valued at $4.00 per share, for a total expense of $195,000 which has been included in the Company’s Condensed Consolidated Statement of Operations for the nine months ended September 30, 2014. | |
On October 16, 2014, the Board of Directors authorized the issuance of, and the Company issued, an aggregate of 425,000 shares of the Company’s common stock under the 2012 Plan to certain officers and consultants of the Company. The shares issued are subject to restrictions and future vesting conditions based on the Company reaching certain future milestones. None of the shares were vested as of the issuance date. Compensation expense will be recognized in the applicable future periods should the applicable milestones be achieved in accordance with the vesting schedule. At the time of filing there is no assurance that these milestones will in fact be achieved and that the shares will in fact vest in the future. | |
COMMITMENTS
COMMITMENTS | 9 Months Ended |
Sep. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | NOTE 9. COMMITMENTS |
Property Management Agreement | |
The Company has entered into property management agreements with unrelated property management companies in which the Company will pay management fees ranging from six to eight percent of gross rental receipts. | |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2014 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | NOTE 10. SUBSEQUENT EVENTS |
On November 10, 2014, Reven Housing Tennessee, LLC, a wholly-owned subsidiary of the Company, completed the acquisition of 21 residential homes, pursuant to a purchase and sale agreement. The homes are located in the Memphis, Tennessee metropolitan area. The contract purchase price for the 21 homes was approximately $1,725,000, excluding closing costs, which was funded primarily from cash. | |
ORGANIZATION_OPERATIONS_AND_SU1
ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Accounting Policies [Abstract] | |||||||||||
Restatement To Prior Year Income [Policy Text Block] | Restatement of Consolidated Financial Statements | ||||||||||
In connection with preparing the annual financial information for the year ending December 31, 2014, prior period errors were identified which affected the annual period ended December 31, 2013, and the quarterly period ending September 30, 2014. These errors occurred in the Company’s accounting for the acquisition of certain real property portfolios of single family homes included in investment in real estate and involve acquisition costs that were improperly capitalized, and the reallocation of acquisition values from building and improvements to lease origination costs. These errors require the Company to restate previously reported financial results contained in this report. The effects of these prior period errors in the consolidated financial statements for the period ended December 31, 2013 are disclosed in the Form 10K/A filing for that period. The changes to the condensed consolidated financial statements for the period ended September 30, 2014 are shown in the following table and include reclassification of expenses in order to enable the presentation to be consistent with the December 31, 2013 year end amended filing. | |||||||||||
September 30, 2014 | |||||||||||
As | As previously | ||||||||||
Restated | Reported | Adjustment | |||||||||
Consolidated Balance Sheet | |||||||||||
Buildings and improvements | $ | 22,008,235 | $ | 22,693,455 | $ | -685,220 | |||||
Accumulated depreciation | $ | -430,552 | $ | -432,802 | $ | 2,250 | |||||
Investment in real estate, net | $ | 21,577,683 | $ | 22,260,653 | $ | -682,970 | |||||
Lease origination costs, net | $ | 124,886 | $ | - | $ | 124,886 | |||||
Total Assets | $ | 30,174,200 | $ | 30,732,284 | $ | -558,084 | |||||
Accumulated deficit | $ | -2,980,310 | $ | -2,422,226 | $ | -558,084 | |||||
Total Stockholders' Equity | $ | 21,628,001 | $ | 22,186,085 | $ | -558,084 | |||||
Total Liabilities and Stockholders' Equity | $ | 30,174,200 | $ | 30,732,284 | $ | -558,084 | |||||
Three months ended September 30, 2014 | |||||||||||
As | As previously | ||||||||||
Restated | Reported | Adjustment | |||||||||
Consolidated Statement of Operations | |||||||||||
Rental expenses | $ | 262,311 | $ | 317,444 | $ | -55,133 | |||||
Legal and accounting | $ | 49,809 | $ | 69,054 | $ | -19,245 | |||||
Real estate acquisition costs | $ | 256,764 | $ | - | $ | 256,764 | |||||
Depreciation and amortization | $ | 240,650 | $ | 166,928 | $ | 73,722 | |||||
Total operating expenses | $ | 1,138,680 | $ | 882,572 | $ | 256,108 | |||||
Net loss | $ | -397,902 | $ | -141,794 | $ | -256,108 | |||||
Net loss per share | $ | -0.06 | $ | -0.02 | $ | -0.04 | |||||
Nine months ended September 30, 2014 | |||||||||||
As | As previously | ||||||||||
Restated | Reported | Adjustment | |||||||||
Consolidated Statement of Operations | |||||||||||
Rental expenses | $ | 682,700 | $ | 737,833 | $ | -55,133 | |||||
General and administrative | $ | 988,790 | $ | 1,005,648 | $ | -16,858 | |||||
Legal and accounting | $ | 219,661 | $ | 260,406 | $ | -40,745 | |||||
Real estate acquisition costs | $ | 295,122 | $ | - | $ | 295,122 | |||||
Depreciation and amortization | $ | 443,650 | $ | 369,928 | $ | 73,722 | |||||
Total operating expenses | $ | 2,683,013 | $ | 2,426,905 | $ | 256,108 | |||||
Net loss | $ | -966,255 | $ | -710,147 | $ | -256,108 | |||||
Net loss per share | $ | -0.17 | $ | -0.13 | $ | -0.04 | |||||
Nine months ended September 30, 2014 | |||||||||||
As | As previously | ||||||||||
Restated | Reported | Adjustment | |||||||||
Consolidated Statement of Cash Flows | |||||||||||
Net loss | $ | -966,255 | $ | -710,147 | $ | -256,108 | |||||
Depreciation and amortization | $ | 443,650 | $ | 369,928 | $ | 73,722 | |||||
Net cash used for operating activities | $ | -110,971 | $ | 71,415 | $ | -182,386 | |||||
Acquisitions of investments in real estate | $ | -9,808,865 | $ | -10,114,820 | $ | 305,955 | |||||
Lease origination costs | $ | -123,569 | $ | - | $ | -123,569 | |||||
Net cash used for investing activities | $ | -10,677,851 | $ | -10,860,237 | $ | 182,386 | |||||
Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation | ||||||||||
The accompanying unaudited condensed consolidated interim financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of management, all adjustments (which include only normal recurring adjustments except as noted in management’s discussion and analysis of financial condition and results of operations) necessary to present fairly the financial position, results of operations and changes in cash flows have been made. | |||||||||||
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the 2013 Annual Report on Form 10-KA, filed April 17, 2015. The results of operations for the period ended September 30, 2014 are not necessarily indicative of the operating results for the full year. | |||||||||||
On November 5, 2014, the Company effected a 1-for-20 reverse stock split of the issued common stock. Each stockholder’s percentage ownership and proportional voting power generally remained unchanged as a result of the reverse stock split. All applicable share data, per share amounts and related information in the condensed consolidated financial statements and notes thereto have been adjusted retroactively to give effect to the 1-for-20 reverse stock split. See Note 5. | |||||||||||
Consolidation, Policy [Policy Text Block] | Principles of Consolidation | ||||||||||
The accompanying financial statements consolidate the accounts of the Company and its wholly-owned subsidiaries, Reven Housing Georgia, LLC, Reven Housing Texas, LLC, Reven Housing Florida, LLC, and Reven Housing Tennessee, LLC. All significant inter-company transactions have been eliminated in consolidation. | |||||||||||
New Accounting Pronouncements, Policy [Policy Text Block] | New Accounting Pronouncements | ||||||||||
In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2014-09 Revenue from Contracts with Customers, or ASU No. 2014-09, which will supersede nearly all existing revenue recognition guidance under GAAP. ASU No. 2014-09 provides that an entity recognize revenue when it transfers 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. This update also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. ASU No. 2014-09 allows for either full retrospective or modified retrospective adoption and will become effective for the Company in the fourth quarter of 2017. | |||||||||||
The Company has adopted all recently issued accounting pronouncements. The adoption of the accounting pronouncements, including those not yet effective, is not anticipated to have a material effect on the financial position or results of operations of the Company. | |||||||||||
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents | ||||||||||
The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents. | |||||||||||
Advances to Property Manager [Policy Text Block] | Rents and Other Receivables | ||||||||||
Rents and other receivables represent the amount of rent receivables, security deposits and net rental funds which are held by the property manager on behalf of the Company, net of any allowance for amounts deemed uncollectible. | |||||||||||
Tax, Insurance reserves and holdback funds [Policy Text Block] | Tax and Insurance reserves | ||||||||||
Tax and insurance reserves represent amounts held in accordance with the terms of our loan for taxes and insurance. | |||||||||||
Finance, Loans and Leases Receivable, Policy [Policy Text Block] | Loan Fees | ||||||||||
Loan closing costs and fees totaled $266,503 and will be amortized over the term of the loan which is 60 months. For the three and nine months ended September 30, 2014, amortization expense for these loan fees was $13,326. | |||||||||||
Deferred Stock Issuance Costs [Policy Text Block] | Deferred Stock Issuance Costs | ||||||||||
Deferred stock issuance costs represent amounts paid for consulting services and other offering expenses in conjunction with the future raising of additional capital to be performed within one year. These costs are charged against additional paid-in capital as a cost of the stock issuance upon closing of the respective stock placement. | |||||||||||
Warrant Issuance and Note Conversion Feature [Policy Text Block] | Warrant Issuance and Note Conversion Feature | ||||||||||
The Company accounts for the proceeds from the issuance of convertible notes payable with detachable stock purchase warrants and embedded conversion features in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 470-20, Debt with Conversion and Other Options. Under FASB ASC 470-20, the proceeds from the issuance of a debt instrument with detachable stock purchase warrants shall be allocated to the two elements based on the relative fair values of the debt instrument without the warrants and of the warrants themselves at the time of issuance. The portion of the proceeds allocated to the warrants is accounted for as additional paid-in capital and the remaining proceeds are allocated to the debt instrument which resulted in a discount to debt which is amortized and charged as interest expense over the term of the note agreement. Additionally, pursuant to FASB ASC 470-20, the intrinsic value of the embedded conversion feature of the convertible notes payable is included in the discount to debt and amortized and charged to interest expense over the life of the note agreement. | |||||||||||
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition | ||||||||||
Property is leased under rental agreements of generally one year and revenue is recognized over the lease term on a straight-line basis. | |||||||||||
Income Tax, Policy [Policy Text Block] | Income Taxes | ||||||||||
The Company intends to elect to be taxed as a real estate investment trust (“REIT”), as defined in the Internal Revenue Code, upon meeting the necessary requirements. Management believes that the Company will be able to satisfy the requirements for qualification as a REIT. Accordingly, the Company is not expecting to be subject to federal income tax, provided that it qualifies as a REIT and distributions to the stockholders equal or exceed REIT taxable income. | |||||||||||
However, qualification and taxation as a REIT depends upon the Company’s ability to meet the various qualification tests imposed under the Internal Revenue Code related to the percentage of income that are earned from specified sources, the percentage of assets that fall within specified categories, the diversity of capital stock ownership, and the percentage of earnings that are distributed. Accordingly, no assurance can be given that the Company will be organized or be able to operate in a manner so as to qualify or remain qualified as a REIT. If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal and state income tax (including any applicable alternative minimum tax) on its taxable income at regular corporate tax rates, and the Company may be ineligible to qualify as a REIT for four subsequent tax years. Even if the Company qualifies as a REIT, it may be subject to certain state or local income taxes. | |||||||||||
The tax benefit of uncertain tax positions is recognized only if it is “more likely than not” that the tax position will be sustained, based solely on its technical merits, with the taxing authority having full knowledge of relevant information. The measurement of a tax benefit for an uncertain tax position that meets the “more likely than not” threshold is based on a cumulative probability model under which the largest amount of tax benefit recognized is the amount with a greater than 50% likelihood of being realized upon ultimate settlement with the taxing authority, having full knowledge of all the relevant information. As of December 31, 2013 and September 30, 2014, the Company had no unrecognized tax benefits. The Company does not anticipate a significant change in the total amount of unrecognized tax benefits during 2014. | |||||||||||
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | Incentive Compensation Plan | ||||||||||
During 2012, the Company established the 2012 Incentive Compensation Plan, which was subsequently amended and restated in December 2013 (“2012 Plan”). The 2012 Plan allows for the grant of options and other awards representing up to 1,650,000 shares of the Company’s common stock. Such awards may be granted to officers, directors, employees, consultants and other persons who provide services to the Company or any related entity. Under the 2012 Plan, options may be granted at an exercise price greater than or equal to the market value at the date of the grant, for owners of 10% or more of the voting shares, at an exercise price of not less than 110% of the market value. Awards are exercisable over a period of time as determined by a committee designated by the Board of Directors, but in no event longer than ten years. | |||||||||||
On April 4, 2014, the Board of Directors authorized the issuance of, and the Company issued, an aggregate of 48,750 shares of the Company’s common stock under the 2012 Plan to the members of the Board of Directors as compensation for their services. | |||||||||||
On October 16, 2014, the Board of Directors authorized the issuance of, and the Company issued, an aggregate of 425,000 shares of the Company’s common stock under the 2012 Plan to certain officers and consultants of the Company. The shares issued are subject to restrictions and future vesting conditions based on the Company reaching certain future milestones. None of the shares were vested as of the issuance date. | |||||||||||
Earnings Per Share, Policy [Policy Text Block] | Net Loss Per Share | ||||||||||
Net loss per share is computed by dividing the net loss by the weighted average number of shares of common stock outstanding. Warrants, stock options, and common stock issuable upon the conversion of the Company's preferred stock (if any), are not included in the computation if the effect would be anti-dilutive and would increase the earnings or decrease loss per share. For the nine months ended September 30, 2013, and 2014, potentially dilutive securities excluded from the calculations were 263,588 shares issuable upon exercise of outstanding warrants granted in conjunction with the convertible notes. | |||||||||||
Fair Value of Financial Instruments, Policy [Policy Text Block] | Financial Instruments | ||||||||||
The carrying value of the Company’s financial instruments, as reported in the accompanying condensed consolidated balance sheets, approximates fair value. | |||||||||||
Security Deposits [Policy Text Block] | Security Deposits | ||||||||||
Security deposits represent amounts deposited by tenants at the inception of the lease. | |||||||||||
Use of Estimates, Policy [Policy Text Block] | Use of Estimates | ||||||||||
The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the balance sheet dates and reported amounts of expenses for the periods presented. Accordingly, actual results could differ from those estimates. Significant estimates include assumptions used to determine the allocation of purchase prices of property acquisitions. | |||||||||||
Real Estate, Policy [Policy Text Block] | Investments in Real Estate | ||||||||||
The Company accounts for its investments in real estate as business combinations under the guidance of FASB ASC Topic 805, Business Combinations (“ASC 805”) and these acquisitions are recorded at fair value, allocated to land, building and the existing leases based upon their fair values at the date of acquisition, with acquisition costs expensed as incurred. In making estimates of fair values for purposes of allocating purchase price, the Company utilizes its own market knowledge and published market data. The estimated fair value of acquired in-place leases represents the expected costs the Company would have incurred to lease the property at the date of acquisition. Each portfolio of acquired property is recorded as a separate business combination. | |||||||||||
Land, buildings and improvements are recorded at cost. Buildings and improvements are depreciated over estimated useful lives of approximately 27.5 years using the straight-line method. Lease origination costs are amortized over the average remaining term of the in-place leases which is generally less than one year. Maintenance and repair costs are charged to expenses as incurred. | |||||||||||
The Company assesses the impairment of investments in real estate, whenever events or changes in business circumstances indicate that carrying amounts of the assets may not be fully recoverable. When such events occur, management determines whether there has been impairment by comparing the asset’s carrying value with its fair value. Should impairment exist, the asset is written down to its estimated fair value. The Company has not recognized any impairment losses through September 30, 2014. | |||||||||||
Reclassification, Policy [Policy Text Block] | Reclassifications | ||||||||||
Certain amounts for 2013 have been reclassified to conform to the current period’s presentation. | |||||||||||
ORGANIZATION_OPERATIONS_AND_SU2
ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Organization And Operation [Abstract] | |||||||||||
Schedule of Error Corrections and Prior Period Adjustments [Table Text Block] | The changes to the condensed consolidated financial statements for the period ended September 30, 2014 are shown in the following table and include reclassification of expenses in order to enable the presentation to be consistent with the December 31, 2013 year end amended filing. | ||||||||||
September 30, 2014 | |||||||||||
As | As previously | ||||||||||
Restated | Reported | Adjustment | |||||||||
Consolidated Balance Sheet | |||||||||||
Buildings and improvements | $ | 22,008,235 | $ | 22,693,455 | $ | -685,220 | |||||
Accumulated depreciation | $ | -430,552 | $ | -432,802 | $ | 2,250 | |||||
Investment in real estate, net | $ | 21,577,683 | $ | 22,260,653 | $ | -682,970 | |||||
Lease origination costs, net | $ | 124,886 | $ | - | $ | 124,886 | |||||
Total Assets | $ | 30,174,200 | $ | 30,732,284 | $ | -558,084 | |||||
Accumulated deficit | $ | -2,980,310 | $ | -2,422,226 | $ | -558,084 | |||||
Total Stockholders' Equity | $ | 21,628,001 | $ | 22,186,085 | $ | -558,084 | |||||
Total Liabilities and Stockholders' Equity | $ | 30,174,200 | $ | 30,732,284 | $ | -558,084 | |||||
Three months ended September 30, 2014 | |||||||||||
As | As previously | ||||||||||
Restated | Reported | Adjustment | |||||||||
Consolidated Statement of Operations | |||||||||||
Rental expenses | $ | 262,311 | $ | 317,444 | $ | -55,133 | |||||
Legal and accounting | $ | 49,809 | $ | 69,054 | $ | -19,245 | |||||
Real estate acquisition costs | $ | 256,764 | $ | - | $ | 256,764 | |||||
Depreciation and amortization | $ | 240,650 | $ | 166,928 | $ | 73,722 | |||||
Total operating expenses | $ | 1,138,680 | $ | 882,572 | $ | 256,108 | |||||
Net loss | $ | -397,902 | $ | -141,794 | $ | -256,108 | |||||
Net loss per share | $ | -0.06 | $ | -0.02 | $ | -0.04 | |||||
Nine months ended September 30, 2014 | |||||||||||
As | As previously | ||||||||||
Restated | Reported | Adjustment | |||||||||
Consolidated Statement of Operations | |||||||||||
Rental expenses | $ | 682,700 | $ | 737,833 | $ | -55,133 | |||||
General and administrative | $ | 988,790 | $ | 1,005,648 | $ | -16,858 | |||||
Legal and accounting | $ | 219,661 | $ | 260,406 | $ | -40,745 | |||||
Real estate acquisition costs | $ | 295,122 | $ | - | $ | 295,122 | |||||
Depreciation and amortization | $ | 443,650 | $ | 369,928 | $ | 73,722 | |||||
Total operating expenses | $ | 2,683,013 | $ | 2,426,905 | $ | 256,108 | |||||
Net loss | $ | -966,255 | $ | -710,147 | $ | -256,108 | |||||
Net loss per share | $ | -0.17 | $ | -0.13 | $ | -0.04 | |||||
Nine months ended September 30, 2014 | |||||||||||
As | As previously | ||||||||||
Restated | Reported | Adjustment | |||||||||
Consolidated Statement of Cash Flows | |||||||||||
Net loss | $ | -966,255 | $ | -710,147 | $ | -256,108 | |||||
Depreciation and amortization | $ | 443,650 | $ | 369,928 | $ | 73,722 | |||||
Net cash used for operating activities | $ | -110,971 | $ | 71,415 | $ | -182,386 | |||||
Acquisitions of investments in real estate | $ | -9,808,865 | $ | -10,114,820 | $ | 305,955 | |||||
Lease origination costs | $ | -123,569 | $ | - | $ | -123,569 | |||||
Net cash used for investing activities | $ | -10,677,851 | $ | -10,860,237 | $ | 182,386 | |||||
RESIDENTIAL_HOMES_Tables
RESIDENTIAL HOMES (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Residential Homes [Abstract] | ||||||||||||||
Real Estate Investment Financial Statements, Disclosure [Table Text Block] | The following table represents the Company’s investment in the homes and allocates purchase price in accordance with ASC 805: | |||||||||||||
Number | Residential | Total | ||||||||||||
of Homes | Land | Homes | Investment | |||||||||||
Total at December 31, 2013 | 159 | $ | 2,514,009 | $ | 9,685,361 | $ | 12,199,370 | |||||||
Purchases and improvements during 2014: | ||||||||||||||
Houston, TX | 18 | 319,500 | 1,236,765 | 1,556,265 | ||||||||||
Jacksonville, FL | 47 | 479,700 | 2,745,578 | 3,225,278 | ||||||||||
Memphis, TN | 69 | 777,700 | 4,229,978 | 5,007,678 | ||||||||||
Atlanta, GA improvements | - | - | 19,644 | 19,644 | ||||||||||
Total at September 30, 2014 | 293 | $ | 4,090,909 | $ | 17,917,326 | $ | 22,008,235 | |||||||
ACCOUNTS_PAYABLE_AND_ACCRUED_E1
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Accounts Payable and Accrued Liabilities [Abstract] | ||||||||
Schedule of Accrued Liabilities [Table Text Block] | At December 31, 2013 and September 30, 2014, accounts payable and accrued expenses consisted of the following: | |||||||
2013 | 2014 | |||||||
Accounts payable | $ | 89,666 | $ | 74,926 | ||||
Accrued property taxes | 196,141 | 197,606 | ||||||
Accrued legal, board fees and other expenses | 61,372 | 422,987 | ||||||
Accrued interest | - | 26,810 | ||||||
$ | 347,179 | $ | 722,329 | |||||
ORGANIZATION_OPERATIONS_AND_SU3
ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
Consolidated Balance Sheet | |||||
Buildings and improvements | $22,008,235 | $22,008,235 | $12,199,370 | ||
Accumulated depreciation | -430,552 | -430,552 | -73,950 | ||
Investment in real estate, net | 21,577,683 | 21,577,683 | 12,125,420 | ||
Lease origination costs, net | 124,886 | 124,886 | 75,038 | ||
Total Assets | 30,174,200 | 30,174,200 | 14,531,149 | ||
Accumulated deficit | -2,980,310 | -2,980,310 | -2,014,056 | ||
Total Stockholders' Equity | 21,628,001 | 21,628,001 | 14,026,985 | ||
Total Liabilities and Stockholders' Equity | 30,174,200 | 30,174,200 | 14,531,149 | ||
Consolidated Statement of Operations | |||||
Rental expenses | 262,311 | 11,978 | 682,700 | 25,718 | |
General and administrative | 278,543 | 17,060 | 988,790 | 121,599 | |
Legal and accounting | 49,809 | 21,536 | 219,661 | 114,411 | |
Real estate acquisition costs | 256,764 | 0 | 295,122 | 0 | |
Depreciation and amortization | 240,650 | 4,200 | 443,650 | 12,600 | |
Total operating expenses | 1,138,680 | 361,480 | 2,683,013 | 914,963 | |
Net loss | -397,902 | -347,287 | -966,255 | -859,146 | |
Net loss per share | ($0.06) | ($0.64) | ($0.17) | ($1.86) | |
Consolidated Statement of Cash Flows | |||||
Net loss | -397,902 | -347,287 | -966,255 | -859,146 | |
Depreciation and amortization | 443,650 | 12,600 | |||
Net cash used for operating activities | -110,971 | -630,502 | |||
Acquisitions of investments in real estate | -9,808,865 | ||||
Lease origination costs | -123,569 | 0 | |||
Net cash used for investing activities | -10,677,851 | -263,428 | |||
Adjustment [Member] | |||||
Consolidated Balance Sheet | |||||
Buildings and improvements | -685,220 | -685,220 | |||
Accumulated depreciation | 2,250 | 2,250 | |||
Investment in real estate, net | -682,970 | -682,970 | |||
Lease origination costs, net | 124,886 | 124,886 | |||
Total Assets | -558,084 | -558,084 | |||
Accumulated deficit | -558,084 | -558,084 | |||
Total Stockholders' Equity | -558,084 | -558,084 | |||
Total Liabilities and Stockholders' Equity | -558,084 | -558,084 | |||
Consolidated Statement of Operations | |||||
Rental expenses | -55,133 | -55,133 | |||
General and administrative | -16,858 | ||||
Legal and accounting | -19,245 | -40,745 | |||
Real estate acquisition costs | 256,764 | 295,122 | |||
Depreciation and amortization | 73,722 | 73,722 | |||
Total operating expenses | 256,108 | 256,108 | |||
Net loss | -256,108 | -256,108 | |||
Net loss per share | ($0.04) | ($0.04) | |||
Consolidated Statement of Cash Flows | |||||
Net loss | -256,108 | -256,108 | |||
Depreciation and amortization | 73,722 | ||||
Net cash used for operating activities | -182,386 | ||||
Acquisitions of investments in real estate | 305,955 | ||||
Lease origination costs | -123,569 | ||||
Net cash used for investing activities | 182,386 | ||||
Scenario, Previously Reported [Member] | |||||
Consolidated Balance Sheet | |||||
Buildings and improvements | 22,693,455 | 22,693,455 | |||
Accumulated depreciation | -432,802 | -432,802 | |||
Investment in real estate, net | 22,260,653 | 22,260,653 | |||
Lease origination costs, net | 0 | 0 | |||
Total Assets | 30,732,284 | 30,732,284 | |||
Accumulated deficit | -2,422,226 | -2,422,226 | |||
Total Stockholders' Equity | 22,186,085 | 22,186,085 | |||
Total Liabilities and Stockholders' Equity | 30,732,284 | 30,732,284 | |||
Consolidated Statement of Operations | |||||
Rental expenses | 317,444 | 737,833 | |||
General and administrative | 1,005,648 | ||||
Legal and accounting | 69,054 | 260,406 | |||
Real estate acquisition costs | 0 | 0 | |||
Depreciation and amortization | 166,928 | 369,928 | |||
Total operating expenses | 882,572 | 2,426,905 | |||
Net loss | -141,794 | -710,147 | |||
Net loss per share | ($0.02) | ($0.13) | |||
Consolidated Statement of Cash Flows | |||||
Net loss | -141,794 | -710,147 | |||
Depreciation and amortization | 369,928 | ||||
Net cash used for operating activities | 71,415 | ||||
Acquisitions of investments in real estate | -10,114,820 | ||||
Lease origination costs | 0 | ||||
Net cash used for investing activities | ($10,860,237) |
ORGANIZATION_OPERATIONS_AND_SU4
ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Oct. 16, 2014 | Apr. 04, 2014 | |
Accounting Policies [Line Items] | |||||
Entity Incorporation, State Country Name | Colorado | ||||
Payments of Loan Costs | $266,503 | $0 | |||
Amortization of Financing Costs | $13,326 | $13,326 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 1,650,000 | 1,650,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Description | Under the 2012 Plan, options may be granted at an exercise price greater than or equal to the market value at the date of the grant, for owners of 10% or more of the voting shares, at an exercise price of not less than 110% of the market value. | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 263,588 | 263,588 | |||
Property, Plant and Equipment, Useful Life | 27 years 6 months | ||||
Common Stock [Member] | |||||
Accounting Policies [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 48,750 | ||||
Incentive Compensation Plan 2012 [Member] | Subsequent Event [Member] | |||||
Accounting Policies [Line Items] | |||||
Stock Issued During Period, Shares, Issued for Services | 425,000 |
RESIDENTIAL_HOMES_Details
RESIDENTIAL HOMES (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Number | Number | |
Real Estate Properties [Line Items] | ||
Number of Homes | 293 | 159 |
Real Estate Investment Property, at Cost | $22,008,235 | $12,199,370 |
Total Investment | 22,008,235 | 12,199,370 |
Houston, TX [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Homes | 18 | |
Total Investment | 1,556,265 | |
Jacksonville, FL [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Homes | 47 | |
Total Investment | 3,225,278 | |
Memphis, TN [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Homes | 69 | |
Total Investment | 5,007,678 | |
Atlanta, GA improvements [Member] | ||
Real Estate Properties [Line Items] | ||
Number of Homes | 0 | |
Total Investment | 19,644 | |
Land [Member] | ||
Real Estate Properties [Line Items] | ||
Real Estate Investment Property, at Cost | 4,090,909 | 2,514,009 |
Land [Member] | Houston, TX [Member] | ||
Real Estate Properties [Line Items] | ||
Real Estate Investment Property, at Cost | 319,500 | |
Land [Member] | Jacksonville, FL [Member] | ||
Real Estate Properties [Line Items] | ||
Real Estate Investment Property, at Cost | 479,700 | |
Land [Member] | Memphis, TN [Member] | ||
Real Estate Properties [Line Items] | ||
Real Estate Investment Property, at Cost | 777,700 | |
Land [Member] | Atlanta, GA improvements [Member] | ||
Real Estate Properties [Line Items] | ||
Real Estate Investment Property, at Cost | 0 | |
Residential Real Estate [Member] | ||
Real Estate Properties [Line Items] | ||
Real Estate Investment Property, at Cost | 17,917,326 | 9,685,361 |
Residential Real Estate [Member] | Houston, TX [Member] | ||
Real Estate Properties [Line Items] | ||
Real Estate Investment Property, at Cost | 1,236,765 | |
Residential Real Estate [Member] | Jacksonville, FL [Member] | ||
Real Estate Properties [Line Items] | ||
Real Estate Investment Property, at Cost | 2,745,578 | |
Residential Real Estate [Member] | Memphis, TN [Member] | ||
Real Estate Properties [Line Items] | ||
Real Estate Investment Property, at Cost | 4,229,978 | |
Residential Real Estate [Member] | Atlanta, GA improvements [Member] | ||
Real Estate Properties [Line Items] | ||
Real Estate Investment Property, at Cost | $19,644 |
ACCOUNTS_PAYABLE_AND_ACCRUED_E2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Accounts Payable And Accrued Expenses [Line Items] | ||
Accounts payable | $74,926 | $89,666 |
Accrued property taxes | 197,606 | 196,141 |
Accrued legal, board fees and other expenses | 422,987 | 61,372 |
Accrued interest | 26,810 | 0 |
Accounts payable and accrued expenses | $722,329 | $347,179 |
NOTE_PAYABLE_Details_Textual
NOTE PAYABLE (Details Textual) (USD $) | 9 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Jun. 12, 2014 | |
Notes Payable [Line Items] | ||||
Payments of Loan Costs | $266,503 | $0 | ||
Escrow Deposit | 169,740 | 0 | ||
Reven Housing Texas, LLC [Member] | Silvergate Bank [Member] | ||||
Notes Payable [Line Items] | ||||
Debt Instrument, Annual Principal Payment | $7,570,000 | |||
Debt Instrument, Maturity Date | 5-Jul-19 | |||
Debt Instrument, Interest Rate Terms | The note provides for monthly payments of interest only at a rate of 1.00% over the prime rate (current interest rate is 4.25%) until July 5, 2016. | |||
Debt Instrument, Interest Rate, Stated Percentage | 1.00% | |||
Debt Instrument, Convertible, Remaining Discount Amortization Period | 25 years | |||
Debt Instrument Prepayment Penalty Percentage | 3.00% | |||
Debt Instrument Prepayment Maturity Date | 5-Jul-16 | |||
Debt Instrument, Interest Rate, Effective Percentage | 4.25% |
STOCKHOLDERS_EQUITY_Details_Te
STOCKHOLDERS' EQUITY (Details Textual) (USD $) | 1 Months Ended | ||||
Nov. 05, 2014 | 16-May-14 | Apr. 04, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | |
STOCKHOLDERS' EQUITY [Line Items] | |||||
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 | |||
Common Stock, Par or Stated Value Per Share | $0.00 | $0.00 | |||
Subsequent Event [Member] | |||||
STOCKHOLDERS' EQUITY [Line Items] | |||||
Common Stock, Shares Authorized | 100,000,000 | ||||
Common Stock, Par or Stated Value Per Share | $0.00 | ||||
Stockholders' Equity, Reverse Stock Split | the Company effected a 1-for-20 reverse stock split of issued common stock. In conjunction with the reverse stock split, the Board of Directors approved a change in the number of authorized common shares from 600,000,000 to 100,000,000, which change was effected immediately after the effectiveness of the reverse stock split. Additionally, the par value of the shares was modified from $.02 to $.001 per share | ||||
Private Placement [Member] | |||||
STOCKHOLDERS' EQUITY [Line Items] | |||||
Proceeds from Issuance of Private Placement | $5,900,000 | $2,700,000 | |||
Stock Issued During Period, Shares, New Issues | 1,475,000 | 675,000 | |||
Share Price | $4 | $4 | |||
Other Ownership Interests, Offering Costs | 227,730 | ||||
Net proceeds | $8,372,270 |
INCOME_TAXES_Details_Textual
INCOME TAXES (Details Textual) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Line Items] | ||
Deferred Tax Assets, Operating Loss Carryforwards, Domestic | $675,000 | |
Federal Tax Loss Carry Forwards Expiration | 2032 | |
Deferred Tax Assets, Operating Loss Carryforwards, State and Local | $673,000 |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details Textual) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Related Party Transaction [Line Items] | ||
Increase (Decrease) In Accounts Payable, Related Parties | $0 | $263,877 |
STOCK_COMPENSATION_Details_Tex
STOCK COMPENSATION (Details Textual) (USD $) | 9 Months Ended | 1 Months Ended | 0 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Apr. 04, 2014 | Oct. 16, 2014 | Dec. 31, 2013 | Nov. 05, 2014 | |
Share-based Compensation, Total | $195,000 | $0 | ||||
Common Stock, Par or Stated Value Per Share | $0.00 | $0.00 | ||||
Subsequent Event [Member] | ||||||
Common Stock, Par or Stated Value Per Share | $0.00 | |||||
Incenteve Compensation Plan 2012 [Member] | ||||||
Stock Issued During Period, Shares, Issued for Services | 48,750 | |||||
Share-based Compensation, Total | $195,000 | |||||
Common Stock, Par or Stated Value Per Share | $4 | |||||
Incenteve Compensation Plan 2012 [Member] | Subsequent Event [Member] | ||||||
Stock Issued During Period, Shares, Issued for Services | 425,000 |
COMMITMENTS_Details_Textual
COMMITMENTS (Details Textual) | 9 Months Ended |
Sep. 30, 2014 | |
Minimum [Member] | |
Property Management Fee, Percent Fee | 6.00% |
Maximum [Member] | |
Property Management Fee, Percent Fee | 8.00% |
SUBSEQUENT_EVENTS_Details_Text
SUBSEQUENT EVENTS (Details Textual) (Reven Housing Tennessee, LLC [Member], Subsequent Event [Member], 21 Residential Homes, USD $) | Nov. 10, 2014 |
Reven Housing Tennessee, LLC [Member] | Subsequent Event [Member] | 21 Residential Homes | |
Subsequent Event [Line Items] | |
Business Acquisition Cost of Acquired Entity Purchase Prices | $1,725,000 |