Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Mar. 23, 2015 | Jun. 30, 2014 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Resource Real Estate Opportunity REIT II, Inc. | ||
Entity Central Index Key | 1559484 | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | FALSE | ||
Entity Common Stock, Shares Outstanding | 12,653,262 | ||
Entity Public Float | $0 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Investments: | ||
Rental properties, net | $54,703,305 | $0 |
Identified intangible assets, net | 1,176,061 | 0 |
Investments | 55,879,366 | 0 |
Cash | 15,780,579 | 200,644 |
Restricted cash | 725,305 | 0 |
Tenant receivables | 5,746 | 0 |
Due from related parties | 34,025 | 0 |
Subscriptions receivable | 3,819,991 | 0 |
Prepaid expenses and other assets | 774,338 | 0 |
Deferred offering costs | 3,618,954 | 0 |
Deferred financing costs, net | 581,783 | 0 |
Total assets | 81,220,087 | 200,644 |
Liabilities: | ||
Mortgage notes payable | 38,540,000 | 0 |
Accounts payable and accrued expenses | 857,897 | 0 |
Due to related parties | 3,851,263 | 0 |
Tenant prepayments | 30,704 | 0 |
Security deposits | 68,696 | 0 |
Distribution payable | 259,379 | 0 |
Total liabilities | 43,607,939 | 0 |
Stockholders’ equity: | ||
Preferred stock (par value $.01, 10,000,000 shares authorized, none issued and outstanding) | 0 | 0 |
Common stock | 47,596 | 150 |
Additional paid-in capital | 42,148,473 | 199,350 |
Accumulated other comprehensive loss | -34,468 | 0 |
Accumulated (deficit) earnings | -4,549,953 | 644 |
Total stockholders’ equity | 37,612,148 | 200,644 |
Total liabilities and stockholders’ equity | 81,220,087 | 200,644 |
Convertible Stock [Member] | ||
Stockholders’ equity: | ||
Common stock | 500 | 500 |
Total stockholders’ equity | $500 | $500 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parentheticals) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 | |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 | |
Preferred stock, shares issued (in shares) | 0 | 0 | |
Preferred stock, shares outstanding (in shares) | 0 | 0 | |
Common stock, par value (in dollars per share) | $0.01 | $0.01 | |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 | |
Common stock, shares issued (in shares) | 4,759,567 | 15,000 | |
Common stock, shares outstanding (in shares) | 4,759,567 | 15,000 | |
Convertible Stock [Member] | |||
Common stock, par value (in dollars per share) | $0.01 | $0.01 | |
Common stock, shares authorized (in shares) | 50,000 | 50,000 | |
Common stock, shares issued (in shares) | 50,000 | 50,000 | |
Common stock, shares outstanding (in shares) | 50,000 | 50,000 | 0 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations and Comprehensive (Loss) Income (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues: | ||
Rental income | $991,543 | $0 |
Interest income | 8,251 | 451 |
Total revenues | 999,794 | 451 |
Expenses: | ||
Rental operating | 689,325 | 0 |
Acquisition costs | 1,588,944 | 0 |
Management fees - related parties | 127,496 | 0 |
General and administrative | 1,472,181 | 0 |
Loss on disposal of assets | 198,840 | 0 |
Depreciation and amortization expense | 531,058 | 0 |
Total expenses | 4,607,844 | 0 |
(Loss) income before other expense | -3,608,050 | 451 |
Other expense: | ||
Interest expense | 158,842 | 0 |
Net (loss) income | -3,766,892 | 451 |
Other comprehensive loss: | ||
Designated derivative, fair value adjustment | -34,468 | 0 |
Comprehensive (loss) income | ($3,801,360) | $451 |
Weighted average common shares outstanding (in shares) | 1,680,062 | 19,849 |
Basic and diluted (loss) earnings per common share (in dollars per share) | ($2.24) | $0.02 |
Consolidated_Statement_of_Chan
Consolidated Statement of Changes in Stockholders' Equity (USD $) | Total | Convertible Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Loss [Member] | Retained Earnings/(Accumulated Deficit) [Member] |
Balance, beginning of period at Dec. 31, 2012 | $200,193 | $0 | $200 | $199,800 | $0 | $193 |
Balance, beginning of period (in shares) at Dec. 31, 2012 | 0 | 20,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Conversion of common stock to convertible stock | 0 | 500 | -50 | -450 | ||
Conversion of common stock to convertible stock (in shares) | 50,000 | -5,000 | ||||
Designated derivative, fair value adjustment | 0 | |||||
Net (loss) income | 451 | 451 | ||||
Balance, end of period at Dec. 31, 2013 | 200,644 | 500 | 150 | 199,350 | 0 | 644 |
Balance, beginning of period (in shares) at Dec. 31, 2013 | 15,000 | 50,000 | 15,000 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of stock | 46,748,354 | 0 | 47,024 | 46,701,330 | 0 | |
Issuance of stock (in shares) | 0 | 4,702,399 | ||||
Distributions of common stock | 0 | 196 | 195,346 | -195,542 | ||
Distributions of common stock (in shares) | 19,554 | |||||
Syndication costs | -5,162,160 | -5,162,160 | ||||
Common stock issued through distribution reinvestment plan | 0 | 226 | 214,607 | -214,833 | ||
Common stock issued through dividend reinvestment plan (in shares) | 22,614 | |||||
Distributions declared | -373,330 | -373,330 | ||||
Designated derivative, fair value adjustment | -34,468 | -34,468 | ||||
Net (loss) income | -3,766,892 | -3,766,892 | ||||
Balance, end of period at Dec. 31, 2014 | $37,612,148 | $500 | $47,596 | $42,148,473 | ($34,468) | ($4,549,953) |
Balance, beginning of period (in shares) at Dec. 31, 2014 | 4,759,567 | 50,000 | 4,759,567 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities: | ||
Net (loss) income | ($3,766,892) | $451 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Loss on disposal of assets | 198,840 | 0 |
Depreciation and amortization | 531,058 | 0 |
Amortization of deferred financing costs | 9,581 | 0 |
Changes in operating assets and liabilities: | ||
Restricted cash | -725,305 | 0 |
Tenant receivables, net | -5,746 | 0 |
Due from related party | -34,025 | 0 |
Prepaid expenses and other assets | -642,278 | 0 |
Due to related parties | 2,384,199 | 0 |
Accounts payable and accrued expenses | 452,781 | 0 |
Tenant prepayments | 17,379 | 0 |
Security deposits | 6,397 | 0 |
Net cash (used in) provided by operating activities | -1,574,011 | 451 |
Cash flows from investing activities | ||
Property acquisitions | -56,434,350 | 0 |
Capital expenditures | -109,264 | 0 |
Net cash used in investing activities | -56,543,614 | 0 |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock | 42,928,363 | 0 |
Payment of deferred financing costs | -591,364 | 0 |
Deferred offering costs | -1,815,856 | 0 |
Increase in borrowings | 39,862,000 | 0 |
Repayments on borrowings | -1,322,000 | 0 |
Purchase of interest rate caps | -87,470 | 0 |
Distributions paid on common stock | -113,952 | 0 |
Syndication costs | -5,162,161 | 0 |
Net cash provided by financing activities | 73,697,560 | 0 |
Net increase in cash | 15,579,935 | 451 |
Cash at beginning of period | 200,644 | 200,193 |
Cash at end of period | $15,780,579 | $200,644 |
Nature_of_Business_and_Operati
Nature of Business and Operations | 12 Months Ended |
Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business and Operations | NOTE 1 - NATURE OF BUSINESS AND OPERATIONS |
Resource Real Estate Opportunity REIT II, Inc. (the “Company”) was organized in Maryland on September 28, 2012. The Company is offering up to 100,000,000 shares of common stock in its primary initial public offering for $10 per share, with volume discounts available to investors who purchase $1.0 million or more of shares through the same participating broker-dealer. Discounts are also available for other categories of investors. The Company is also offering up to 10,000,000 shares pursuant to the Company’s distribution reinvestment plan at a purchase price initially equal to $9.50 per share. The Company has adopted a fiscal year ending December 31. On February 6, 2014, the Securities and Exchange Commission (the “SEC”) declared effective the Company's Registration Statement on Form S-11, as amended (Commission File No. 333-184476) (the “Registration Statement”), relating to the offering of up to 110,000,000 shares of the Company’s common stock, including shares offered pursuant to the Company's distribution reinvestment plan. | |
Resource Real Estate Opportunity Advisor II, LLC (the "Advisor”) is a wholly owned subsidiary of Resource Real Estate, Inc. (the "Sponsor") and an indirect wholly owned subsidiary of Resource America, Inc. (“RAI”), a publicly traded company (NASDAQ: REXI) operating in the real estate, financial fund management and commercial finance sectors. The Advisor acts as the Company's external advisor and manages the Company's day-to-day operations and its portfolio of real estate investments and provides asset-management, marketing, investor relations and other administrative services on the Company's behalf, all subject to the supervision of the Company's Board of Directors. On October 9, 2012, the Advisor contributed $200,000 to the Company in exchange for 20,000 shares of common stock. On December 20, 2013, the Advisor received 50,000 shares of convertible stock in exchange for 5,000 shares of the Company’s common stock. The Advisor purchased an additional 117,778 shares of common stock in 2014 for $1.1 million. | |
On June 2, 2014, the Company satisfied the $2.0 million minimum offering amount for its initial public offering, broke escrow and issued shares of common stock in the offering. The Company subsequently raised the minimum New York offering amount of $2.5 million on June 4, 2014. On October 21, 2014, the Company raised the minimum Ohio offering amount of $20.0 million; and on January 8, 2015, the Company raised the minimum Pennsylvania offering amount of $50.0 million. As of December 31, 2014, a total of 4,759,567 shares, including shares purchased by the Advisor and shares issued through the distribution reinvestment plan, have been issued in connection with the Company's public offering resulting in gross offering proceeds of $47.1 million. As of December 31, 2014, the Company had issued 22,614 shares for $214,833 pursuant to its distribution reinvestment plan. | |
The Company’s objective is to take advantage of the Sponsor's dedicated multifamily investing and lending platforms to invest in multifamily assets across the entire spectrum of investments in order to provide stockholders with growing cash flow and increasing asset values. The Company’s targeted portfolio will consist, at the time of acquisition, of commercial real estate assets, principally (i) underperforming multifamily rental properties which the Company will renovate and stabilize in order to increase rents, (ii) distressed real estate owned by financial institutions, usually as a result of foreclosure, and non-performing or distressed loans, including first- and second-priority mortgage loans and other loans which the Company will resolve, and (iii) performing loans, including first- and second-priority mortgage loans and other loans the Company originates or purchases either directly or with a co-investor or joint venture partner. | |
The Company intends to elect and qualify to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes under the provisions of the Internal Revenue Code of 1986, as amended, commencing with its taxable year ended December 31, 2014. As such, to maintain its REIT qualification for U.S. federal income tax purposes, the Company is generally required to distribute at least 90% of its net income (excluding net capital gains) to its stockholders as well as comply with certain other requirements. Accordingly, the Company generally will not be subject to U.S. federal income taxes to the extent that it annually distributes at least 90% of its REIT taxable income to its stockholders. The Company also intends to operate its business in a manner that will permit it to maintain its exemption from registration under the Investment Company Act of 1940, as amended. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Accounting Policies [Abstract] | |||||||
Summary of Significant Accounting Policies | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||
Principles of Consolidation | |||||||
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries as follows: | |||||||
Subsidiary | Apartment Complex | Number of Units | Property Location | ||||
RRE Opportunity Holdings II, LLC | N/A | N/A | N/A | ||||
RRE Opportunity OP II, LP | N/A | N/A | N/A | ||||
RRE Bear Creek Holdings, LLC ("Bear Creek") | Bear Creek | 152 | Dallas, TX | ||||
RRE Oak Hill Holdings, LLC ("Oak Hill") | Oak Hill | 360 | Fort Worth, TX | ||||
N/A - Not Applicable | |||||||
All intercompany accounts and transactions have been eliminated in consolidation. | |||||||
Use of Estimates | |||||||
The preparation of the consolidated financial statements in conformity with Generally Accepted Accounting Principles ("GAAP") requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. | |||||||
Concentration of Credit Risk | |||||||
Financial instruments, which potentially subject the Company to concentration of credit risk, consist of periodic temporary deposits of cash. At December 31, 2014, the Company had $15.8 million of deposits at various banks, $14.8 million of which was greater than the insurance limit of the Federal Deposit Insurance Corporation. No losses have been experienced on such deposits. | |||||||
Real Estate Investments | |||||||
The Company records acquired real estate at fair value. The Company considers the period of future benefit of an asset to determine its appropriate useful life. The Company's estimated useful lives of its assets by class are as follows: | |||||||
Buildings | 27.5 years | ||||||
Building improvements | 3.0 to 27.5 years | ||||||
Tenant improvements | Expected useful life | ||||||
Lease intangibles | Remaining term of related lease | ||||||
Impairment of Long Lived Assets | |||||||
When circumstances indicate the carrying value of a property may not be recoverable, the Company reviews the asset for impairment. This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition. These estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors. | |||||||
If impairment exists, due to the inability to recover the carrying value of a property, an impairment loss will be recorded to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held and used. For properties held for sale, the impairment loss is the adjustment to fair value less estimated cost to dispose of the asset. These assessments have a direct impact on net income because recording an impairment loss results in an immediate negative adjustment to net income. There were no impairments as of December 31, 2014. | |||||||
Allocation of Purchase Price of Acquired Assets | |||||||
Upon the acquisition of real properties, the Company allocates the purchase price of properties to acquired tangible assets, consisting of land, buildings, fixtures and improvements, identified intangible lease assets, consisting of the value of above-market and below-market leases, as applicable, the value of in-place leases, the value of tenant relationships, and liabilities, based in each case on their fair values. | |||||||
Fair value estimates are based on information obtained from a number of sources, including information obtained about each property as a result of pre-acquisition due diligence, marketing and leasing activities. In addition, the Company may obtain independent appraisal reports. The information in the appraisal reports, along with the aforementioned information available to the Company's management, is used in allocating the purchase price. The independent appraisers have no involvement in management's allocation decisions other than providing market information. | |||||||
The Company records above-market and below-market in-place lease values for acquired properties based on the present value (using an interest rate that reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of the lease. The Company amortizes any capitalized above-market or below-market lease values as an increase or reduction to rental income over the remaining non-cancelable terms of the respective leases. | |||||||
The Company measures the aggregate value of other intangible assets acquired based on the difference between (i) the property valued with existing in-place leases adjusted to market rental rates and (ii) the property valued as if vacant. Management’s estimates of value are expected to be made using methods similar to those used by independent appraisers (e.g., discounted cash flow analysis). Factors to be considered by management in its analysis include an estimate of carrying costs during hypothetical expected lease-up periods considering current market conditions and costs to execute similar leases. | |||||||
The Company also considers information obtained about each property as a result of its pre-acquisition due diligence, marketing and leasing activities in estimating the fair value of the tangible and intangible assets acquired. In estimating carrying costs, management includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods. Management also estimates costs to execute similar leases including leasing commissions and legal and other related expenses to the extent that such costs have not already been incurred in connection with a new lease origination as part of the transaction. | |||||||
The total amount of other intangible assets acquired is further allocated to customer relationship intangible values based on management’s evaluation of the specific characteristics of each tenant’s lease and the Company’s overall relationship with that respective tenant. Characteristics considered by management in allocating these values include the nature and extent of the Company’s existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality and expectations of lease renewals (including those existing under the terms of the lease agreement), among other factors. | |||||||
The Company amortizes the value of in-place leases to expense over the remaining term of the respective leases. The value of customer relationship intangibles is amortized to expense over the initial term and any renewal periods in the respective leases, but in no event do amortization periods for the intangible assets exceed the remaining depreciable life of the building. Should a tenant terminate its lease, the unamortized portion of the in-place lease value and customer relationship intangibles would be charged to expense in that period. | |||||||
The determination of the fair value of the assets and liabilities acquired requires the use of significant assumptions with regard to current market rental rates, discount rates and other variables. These estimates are subject to change until all information is finalized, which is generally within one year of the acquisition date. | |||||||
Derivatives and Hedging Activities | |||||||
Risk Management Objective of Using Derivatives | |||||||
The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its debt funding and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s investments and borrowings. | |||||||
As a condition of the Company’s mortgage loan, from time to time the Company may be required to enter into certain derivative transactions as may be required by the lender. These transactions would generally be in line with the Company’s own risk management objectives and also serve to protect the lender. | |||||||
Cash Flow Hedges of Interest Rate Risk | |||||||
The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company entered into interest rate caps that were designated as cash flow hedges during 2014. Interest rate caps designated as cash flow hedges involve the receipt of variable amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an up-front premium. | |||||||
The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the year ended December 31, 2014, such derivatives were used to hedge the variable cash flows, indexed to USD- London InterBank Offered Rate ("LIBOR"), associated with an existing variable-rate loan agreement. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. During the year ended December 31, 2014, the Company did not record any hedge ineffectiveness in earnings. | |||||||
Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. | |||||||
Revenue Recognition | |||||||
The Company recognizes minimum rent, including rental abatements and contractual fixed increases attributable to operating leases, on a straight-line basis over the term of the related lease and includes amounts expected to be received in later years in deferred rents. The Company records property operating expense reimbursements due from tenants for common area maintenance, real estate taxes and other recoverable costs in the period the related expenses are incurred. | |||||||
The specific timing of a sale is measured against various criteria related to the terms of the transaction and any continuing involvement associated with the property. If the criteria for profit recognition under the full-accrual method are not met, the Company defers the gain recognition and accounts for the continued operations of the property by applying the percentage-of-completion, reduced profit, deposit, installment or cost recovery methods, as appropriate, until the appropriate criteria are met. | |||||||
The future minimum rental payments to be received from noncancelable operating leases are $3.7 million and $85,000 for the years ending December 31, 2015 and 2016, and none thereafter. | |||||||
Tenant Receivables | |||||||
The Company makes estimates of the collectability of its tenant receivables related to base rents, including straight-line rentals, expense reimbursements and other revenue or income. The Company specifically analyzes accounts receivable and historical bad debts, tenant creditworthiness, current economic trends when evaluating the adequacy of the allowance for doubtful accounts. In addition, with respect to tenants in bankruptcy, the Company makes estimates of the expected recovery of pre-petition and post-petition claims in assessing the estimated collectability of the related receivable. In some cases, the ultimate resolution of these claims can exceed one year. | |||||||
Income Taxes | |||||||
The Company intends to elect and qualify to be taxed as a REIT, commencing with its taxable year ended December 31, 2014. Accordingly, the Company will generally not be subject to corporate U.S. federal or state income tax to the extent that it makes qualifying distributions to its stockholders, and provided it satisfies on a continuing basis, through actual investment and operating results, the REIT requirements including certain asset, income, distribution and stock ownership tests. If the Company fails to qualify as a REIT, and does not qualify for certain statutory relief provisions, it will be subject to U.S. federal, state and local income taxes and may be precluded from qualifying as a REIT for the subsequent four taxable years following the year in which it lost its REIT qualification. Accordingly, the Company’s failure to qualify as a REIT could have a material adverse impact on its results of operations and amounts available for distribution to its stockholders. | |||||||
The dividends paid deduction of a REIT for qualifying dividends to its stockholders is computed using the Company’s taxable income as opposed to net income reported on the financial statements. Taxable income, generally, will differ from net income reported on the financial statements because the determination of taxable income is based on tax provisions and not financial accounting principles. | |||||||
The Company may elect to treat certain of its subsidiaries as taxable REIT subsidiaries (“TRSs”). In general, the Company’s TRS may hold assets and engage in activities that it cannot hold or engage in directly and generally may engage in any real estate or non-real estate-related business. A TRS is subject to U.S. federal, state and local corporate income taxes. | |||||||
While a TRS may generate net income, a TRS can declare dividends to the Company which will be included in the Company’s taxable income and necessitate a distribution to its stockholders. Conversely, if the Company retains earnings at a TRS level, no distribution is required and the Company can increase book equity of the consolidated entity. | |||||||
Earnings Per Share | |||||||
Basic earnings per share is calculated on the basis of weighted-average number of common shares outstanding during the year. Basic earnings per share is computed by dividing income available to common shareholders by the weighted-average common shares outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted to common stock. Due to reported losses for the periods presented, the convertible shares (discussed in Note 12) are not included in the diluted earnings per share calculation. All common shares and per common share information in the financial statements have been adjusted retroactively for the effect of one 0.625% stock distribution, issued on July 14, 2014, one 1.00% stock distribution, issued October 15, 2014, and one 0.83333% stock distribution, issued on January 15, 2015. | |||||||
Organization and Offering Costs | |||||||
The Company incurs organizational, accounting, and offering costs in connection with its ongoing initial public offering. Organization and offering costs (other than selling commissions and dealer-manager fees) of the Company are initially paid by the Advisor on behalf of the Company. Offering costs are discussed in more detail below under the heading "Deferred Offering Costs." Organization costs are expensed as incurred and include all expenses to be incurred by the Company in connection with the formation of the Company, including but not limited to legal fees and other costs to incorporate the Company. | |||||||
Pursuant to the Amended and Restated Advisory Agreement between the Company and the Advisor dated January 9, 2014 (the “Advisory Agreement”), the Company is obligated to reimburse the Advisor for organizational and offering costs it incurs on the Company's behalf, but only to the extent that such reimbursements will not cause organizational and offering expenses (other than selling commissions and the dealer manager fees) to exceed 2.5% of the gross offering proceeds raised in the offering, when recorded by the Company. As of December 31, 2014, a total of $2.3 million in reimbursable organizational and offering costs incurred on behalf of the Company by the Advisor has yet to be reimbursed by the Company. These costs are included in due to related parties on the consolidated balance sheet as of December 31, 2014. | |||||||
Deferred Offering Costs | |||||||
Through December 31, 2014, the Company has incurred $4.4 million for the payment of public offering costs consisting of accounting, advertising, allocated payroll, due diligence, marketing, legal and similar costs. As of December 31, 2014, the Advisor has advanced $3.0 million of these costs on behalf of the Company. A portion of these costs was charged to equity upon the sale of each share of common stock sold under the public offering. Similarly, a portion of the proceeds received from the sales of shares in the Company's public offering was paid to the Advisor to reimburse it for the amount incurred on behalf of the Company. Deferred offering costs represent the portion of the total costs incurred that have not been charged to equity to date. As of December 31, 2014, the Company has reimbursed $734,493 of deferred offering costs to the Advisor. Upon completion of the public offering, any excess deferred offering costs in excess of the limit on organization and offering costs discussed above, will be charged back to the Advisor. | |||||||
New Accounting Standards | |||||||
In June 2014, the Financial Accounting Standards Board ("FASB") issued authoritative guidance to change the criteria for reporting development stage entities. Under the new guidance, the requirement to present inception-to-date information on the statement of operations, cash flows and statement of equity has been eliminated. In addition, financial statements no longer need to be labeled as those of a development stage entity, disclosure of a description of the development stage activities in which the entity is engaged is no longer required, and disclosing in the first year the company is no longer a development stage entity and that in prior years it had been in the development stage is also no longer required. The Company's early adoption of this guidance, as of January 1, 2014, did not have a material impact on its consolidated financial position, results of operations or cash flows. | |||||||
Accounting Standards Issued But Not Yet Effective | |||||||
In May 2014, FASB issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers” ("ASU No. 2014-09"), which will replace most existing revenue recognition guidance in GAAP. The core principle of ASU No. 2014-09 is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. ASU No. 2014-09 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. ASU No. 2014-09 will be effective for the Company beginning January 1, 2017, including interim periods in 2017, and allows for both retrospective and prospective methods of adoption. The Company is in the process of determining the method of adoption and assessing the impact of ASU No. 2014-09 on the Company's consolidated financial position, results of operations and cash flows. | |||||||
In January 2015, FASB issued ASU No. 2015-01, "Income Statement - Extraordinary and Unusual Items (Subtopic 225-20), Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items" (“ASU No. 2015-01”). The amendments in ASU No. 2015-01 eliminate from GAAP the concept of extraordinary items. Although the amendment will eliminate the requirements for reporting entities to consider whether an underlying event or transaction is extraordinary, the presentation and disclosure guidance for items that are unusual in nature or occur infrequently will be retained and will be expanded to include items that are both unusual in nature and infrequently occurring. ASU No. 2015-01 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The Company does not expect the adoption of ASU No. 2015-01 to have a significant impact on its financial statements. |
Supplemental_Cash_Flow_Informa
Supplemental Cash Flow Information | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Supplemental Cash Flow Elements [Abstract] | ||||||||
Supplemental Cash Flow Information | NOTE 3 - SUPPLEMENTAL CASH FLOW INFORMATION | |||||||
The following table presents supplemental cash flow information: | ||||||||
Years Ended | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Non-cash financing and investing activities: | ||||||||
Increase in subscription receivables | $ | 3,819,991 | $ | — | ||||
Cash distributions on common stock declared but not yet paid | 259,379 | — | ||||||
Stock issued from distribution reinvestment plan | 195,542 | — | ||||||
Stock distributions issued | 214,833 | — | ||||||
Deferred offering costs | 1,803,098 | — | ||||||
Due to related parties | 1,467,064 | — | ||||||
Cash paid during the period for: | ||||||||
Interest | $ | 133,036 | $ | — | ||||
Restricted_Cash
Restricted Cash | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Cash and Cash Equivalents [Abstract] | ||||||||
Restricted Cash | NOTE 4 - RESTRICTED CASH | |||||||
Restricted cash represents escrow deposits with lenders to be used to pay real estate taxes, insurance, and capital improvement. A summary of the components of restricted cash follows: | ||||||||
December 31, | December 31, | |||||||
2014 | 2013 | |||||||
Real estate taxes | $ | 128,871 | $ | — | ||||
Insurance | 157,600 | — | ||||||
Capital improvements | 438,834 | — | ||||||
Total | $ | 725,305 | $ | — | ||||
Rental_Properties_Net
Rental Properties, Net | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Real Estate [Abstract] | ||||||||
Rental Properties, Net | NOTE 5 - RENTAL PROPERTIES, NET | |||||||
The Company’s investments in rental properties consisted of the following: | ||||||||
December 31, | December 31, 2013 | |||||||
2014 | ||||||||
Land | $ | 6,723,368 | $ | — | ||||
Building and improvements | 47,546,786 | — | ||||||
Furniture, fixtures and equipment | 612,846 | — | ||||||
54,883,000 | — | |||||||
Less: accumulated depreciation | (179,695 | ) | — | |||||
$ | 54,703,305 | $ | — | |||||
Depreciation expense for the years ended December 31, 2014 and 2013 was $179,695 and $0, respectively. |
Acquisitions
Acquisitions | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||
Acquisitions | NOTE 6 - ACQUISITIONS | ||||||||||||||||||||||||||||||||
As of December 31, 2014, the Company owned two properties. The table below summarizes these acquisitions and the respective fair values assigned: | |||||||||||||||||||||||||||||||||
Multifamily | City and State | Date of | Purchase | Land | Building and | Furniture, Fixture and Equipment | Intangible Assets | Other | Fair Valued | ||||||||||||||||||||||||
Community Name | Acquisition | Price (1) | Improvements | Liabilities | Assigned | ||||||||||||||||||||||||||||
Bear Creek | Dallas, TX | 6/4/14 | $ | 9,500,000 | $ | 1,888,982 | $ | 7,060,815 | $ | 198,840 | $ | 351,363 | $ | (84,732 | ) | $ | 9,415,268 | ||||||||||||||||
Oak Hill | Fort Worth, TX | 12/19/14 | 47,000,000 | 4,834,386 | 40,485,971 | 503,582 | 1,176,061 | (59,977 | ) | 46,940,023 | |||||||||||||||||||||||
-1 | Purchase price excludes closing costs and acquisition expenses. | ||||||||||||||||||||||||||||||||
On June 4, 2014, the Company acquired its first investment, a 152-unit, multifamily apartment community located in Dallas, Texas known as Bear Creek, for $9.5 million, excluding closing costs. The Company paid an acquisition fee of $264,239, or 2% of the purchase price (including closing costs and any amounts reserved for capital expenditures), to the Advisor. | |||||||||||||||||||||||||||||||||
The following table reflects the fair value of the net assets acquired: | |||||||||||||||||||||||||||||||||
Rental property: | |||||||||||||||||||||||||||||||||
Land | $ | 1,888,982 | |||||||||||||||||||||||||||||||
Buildings | 7,060,815 | ||||||||||||||||||||||||||||||||
Personal property | 198,840 | ||||||||||||||||||||||||||||||||
9,148,637 | |||||||||||||||||||||||||||||||||
Acquired intangibles - in-place leases | 351,363 | ||||||||||||||||||||||||||||||||
Accrued real estate taxes | (69,085 | ) | |||||||||||||||||||||||||||||||
Prepaid rents | (163 | ) | |||||||||||||||||||||||||||||||
Security deposits | (15,484 | ) | |||||||||||||||||||||||||||||||
Fair value assigned | $ | 9,415,268 | |||||||||||||||||||||||||||||||
On December 19, 2014, the Company acquired a 360-unit, multifamily apartment community located in Fort Worth, Texas known as Oak Hill, for $47.0 million, excluding closing costs. The Company paid an acquisition fee of $1.1 million, or 2% of the purchase price (including closing costs and any amounts reserved for capital expenditures), to the Advisor. | |||||||||||||||||||||||||||||||||
The following table reflects the fair value of the net assets acquired: | |||||||||||||||||||||||||||||||||
Rental property: | |||||||||||||||||||||||||||||||||
Land | $ | 4,834,386 | |||||||||||||||||||||||||||||||
Buildings | 40,485,971 | ||||||||||||||||||||||||||||||||
Personal property | 503,582 | ||||||||||||||||||||||||||||||||
45,823,939 | |||||||||||||||||||||||||||||||||
Acquired intangibles - in-place leases | 1,176,061 | ||||||||||||||||||||||||||||||||
Accrued real estate taxes | — | ||||||||||||||||||||||||||||||||
Prepaid rents | (13,162 | ) | |||||||||||||||||||||||||||||||
Security deposits | (46,815 | ) | |||||||||||||||||||||||||||||||
Fair value assigned | $ | 46,940,023 | |||||||||||||||||||||||||||||||
The table below summarizes the total revenues, net loss, and acquisition costs of the Company's 2014 acquisitions: | |||||||||||||||||||||||||||||||||
Years Ended | |||||||||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||||||||
Multifamily Community | 2014 | 2013 | |||||||||||||||||||||||||||||||
Bear Creek | |||||||||||||||||||||||||||||||||
Total Revenues | $ | 821,576 | $ | — | |||||||||||||||||||||||||||||
Net Loss | (748,500 | ) | — | ||||||||||||||||||||||||||||||
Acquisition Costs | 329,709 | — | |||||||||||||||||||||||||||||||
Oak Hill | |||||||||||||||||||||||||||||||||
Total Revenues | $ | 170,097 | $ | — | |||||||||||||||||||||||||||||
Net Loss | (82,184 | ) | — | ||||||||||||||||||||||||||||||
Acquisition Costs | 1,259,235 | — | |||||||||||||||||||||||||||||||
Identified_Intangible_Assets_N
Identified Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2014 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Identified Intangible Assets, Net | IDENTIFIED INTANGIBLE ASSETS, NET |
Identified intangible assets, net, consist of rental leases. The value of acquired in-place leases totaled $1.5 million and $-0- as of December 31, 2014 and 2013, respectively, less accumulated amortization of $351,363 and $-0- | |
, respectively. The weighted average remaining life of the rental leases is eight months as of December 31, 2014. Expected amortization for the rental leases for the next 12 months is $1.2 million. For the year ended December 31, 2014, amortization expense totaled $351,363. There was no amortization expense for year ended December 31, 2013. |
Mortgage_Notes_Payable
Mortgage Notes Payable | 12 Months Ended | |||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||
Mortgage Notes Payable | MORTGAGE NOTES PAYABLE | |||||||||||||||||
The following is a summary of the Company's mortgage notes payable as of December 31, 2014: | ||||||||||||||||||
Balance Outstanding at | Maturity | Interest Rate | Average | Interest Expense | ||||||||||||||
Date | Monthly Debt | Incurred for the | ||||||||||||||||
Collateral | 31-Dec-14 | 31-Dec-14 | Service | Year ended December 31, 2014 | ||||||||||||||
Bear Creek | $ | 7,465,000 | 7/1/24 | 2.54 | % | $ | 15,901 | $ | 110,302 | |||||||||
Oak Hill | 31,075,000 | 1/1/25 | 2.07 | % | 54,323 | 36,557 | ||||||||||||
$ | 38,540,000 | |||||||||||||||||
On June 4, 2014, in connection with the acquisition of Bear Creek, the Company entered into a $7.5 million, 10-year secured mortgage loan with Berkadia Commercial Mortgage, LLC (the "Bear Creek Mortgage Loan"), secured by the property. The Bear Creek Mortgage Loan, which matures on July 1, 2024, bears interest at a floating rate of one-month LIBOR plus 2.37%. As of December 31, 2014, the interest rate was 2.54%. Monthly payments are initially interest only. Beginning with the August 2018 payment, monthly payments will include interest and principal in the amount of approximately $23,432 per month. | ||||||||||||||||||
On December 19, 2014, in connection with the acquisition of Oak Hill, the Company entered into a $31.1 million, secured mortgage loan with M&T Reality Capital Corporation (the "Oak Hill Mortgage Loan"), secured by the property. The Oak Hill Mortgage Loan, which matures on January 1, 2025, bears interest at a floating rate of one-month LIBOR plus 1.90%. As of December 31, 2014, the interest rate was 2.07%. Monthly payments are initially interest only. Beginning with the February 2017 payment, monthly payments will include interest and principal in the amount of approximately $109,047 per month. | ||||||||||||||||||
Annual principal payments on the mortgage notes payable for each of the next five years ending December 31, and thereafter, are as follows: | ||||||||||||||||||
2015 | $ | — | ||||||||||||||||
2016 | — | |||||||||||||||||
2017 | 590,509 | |||||||||||||||||
2018 | 680,324 | |||||||||||||||||
2019 | 730,909 | |||||||||||||||||
Thereafter | 36,538,258 | |||||||||||||||||
$ | 38,540,000 | |||||||||||||||||
Deferred_Financing_Costs
Deferred Financing Costs | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||||
Deferred Financing Costs | DEFERRED FINANCING COSTS | |||
Deferred financing costs incurred to obtain financing are amortized over the term of the related debt. As of December 31, 2014 and December 31, 2013, there were $9,581 and $-0-, respectively, of accumulated amortization of deferred financing costs. Amortization of deferred financing costs for the next five years ending December 31, and thereafter, are as follows: | ||||
2015 | $ | 58,112 | ||
2016 | 62,137 | |||
2017 | 61,607 | |||
2018 | 60,653 | |||
2019 | 59,547 | |||
Thereafter | 279,727 | |||
$ | 581,783 | |||
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Loss | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Equity [Abstract] | ||||
Accumulated Other Comprehensive Loss | ACCUMULATED OTHER COMPREHENSIVE LOSS | |||
The following table presents the changes in accumulated other comprehensive loss for the year ended December 31, 2014: | ||||
Net unrealized loss on derivatives | ||||
January 1, 2014 | $ | — | ||
Unrealized loss on designated hedge | (34,468 | ) | ||
December 31, 2014 | $ | (34,468 | ) |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Related Party Transactions [Abstract] | |||||||||
Related Party Transactions | RELATED PARTY TRANSACTIONS | ||||||||
Pursuant to the terms of the Advisory Agreement, the Advisor provides the Company with its management team, including its officers, along with appropriate support personnel. The Advisor will be reimbursed for the Company’s allocable share of costs for Advisor personnel, including allocable personnel salaries and benefits. Each of the Company’s officers is an employee of the Sponsor or one of its affiliates. The Company does not have any employees. The Advisor is not obligated to dedicate any specific portion of its time or the time of its personnel to the Company’s business. The Advisor is at all times subject to the supervision and oversight of the Company’s Board of Directors and has only such functions and authority as the Company delegates to it. | |||||||||
During the course of the offering, the Advisor will provide offering-related services to the Company and will advance funds to the Company for both operating costs and organization and offering costs. These amounts will be reimbursed to the Advisor from the proceeds from the offering, although there can be no assurance that the Company’s plans to raise capital will be successful. As of December 31, 2014, the Advisor has incurred costs on a cumulative basis on behalf of the Company of approximately $3.0 million. | |||||||||
Relationship with the Advisor | |||||||||
The Advisory Agreement has a one-year term and renews for an unlimited number of successive one-year terms upon the approval of the conflicts committee of the Company's Board of Directors. Under the Advisory Agreement, the Advisor receives fees and is reimbursed for its expenses as set forth below: | |||||||||
Acquisition fees. The Advisor earns an acquisition fee of 2.0% of the cost of investments acquired on behalf of the Company, plus any capital expenditure reserves allocated, or the amount funded by the Company to acquire loans, including acquisition expenses and any debt attributable to such investments. | |||||||||
Asset management fees. The Advisor earns a monthly asset management fee equal to one-twelfth of 1.0% of the cost of each asset, without deduction for depreciation, bad debts or other non-cash reserves. The asset management fee is based only on the portion of the costs or value attributable to the Company’s investment in an asset if the Company does not own all or a majority of an asset and does not manage or control the asset. | |||||||||
Disposition fees. The Advisor earns a disposition fee in connection with of the sale of a property equal to the lesser of one-half of the aggregate brokerage commission paid, or if none is paid, 2.0% of the contract sales price. No properties were sold during the year ended December 31, 2014 and, therefore, no disposition fees were earned. | |||||||||
Debt financing fees. The Advisor earns a debt financing fee equal to 0.5% of the amount available under any debt financing obtained for which it provided substantial services. | |||||||||
Expense reimbursements. The Company also pays directly or reimburses the Advisor for all of the expenses paid or incurred by the Advisor or its affiliates on behalf of the Company or in connection with the services provided to the Company in relation to its public offering, including its distribution reinvestment plan offering. This includes all organization and offering costs of up to 2.5% of gross offering proceeds. Reimbursements also include expenses the Advisor incurs in connection with providing services to the Company, including the Company’s allocable share of costs for Advisor personnel and overhead, out-of-pocket expenses incurred in connection with the selection and acquisition of properties or other real estate related debt investments, whether or not the Company ultimately acquires the investment. However, the Company will not reimburse the Advisor or its affiliates for employee costs in connection with services for which the Advisor earns acquisition or disposition fees. | |||||||||
On June 4, 2014, the Advisor provided a $1.3 million bridge loan (the “Bridge Loan”) to the Company. The Company used the proceeds of the Bridge Loan to partially finance the acquisition of Bear Creek. The Bridge Loan, which was scheduled to mature on December 4, 2014, incurred interest at an annual rate of LIBOR plus 3.0%. The Company repaid the Bridge Loan in full on June 30, 2014 and paid $2,242 in interest during the year ended December 31, 2014. | |||||||||
Relationship with RAI | |||||||||
The receivable from related party includes escrow funds held by RAI for self insurance. The Company's properties participate in an insurance pool with other properties directly and indirectly managed by RAI. RAI holds the escrow funds related to the insurance pool on its books. The insurance pool covers losses up to $2.5 million. Catastrophic insurance would cover losses in excess of the insurance pool up to $85 million. Therefore, unforeseen or catastrophic losses in excess of the Company's insured limits could have a material adverse effect on the Company's financial condition and operating results. | |||||||||
Relationship with Resource Real Estate Opportunity Manager II | |||||||||
Resource Real Estate Opportunity Manager II, LLC (the “Manager”), an affiliate of the Advisor, manages real estate properties and real estate-related debt investments and coordinates the leasing of, and manages construction activities related to the Company’s real estate property pursuant to the terms of the management agreement with the Manager. | |||||||||
Property management fees. The Manager earns a property management fee equal to 4.5% of actual gross cash receipts from the operations of real property investments. | |||||||||
Construction management fees. The Manager earns a construction management fee of 5.0% of actual aggregate costs to construct improvements, or to repair, rehab or reconstruct a property. No construction management fees were earned during the year ended December 31, 2014. | |||||||||
Debt servicing fees. The Manager earns a debt servicing fee of 2.75% on payments received from loans held by the Company for investment. No debt servicing fees were earned during the year ended December 31, 2014. | |||||||||
Expense reimbursement. During the ordinary course of business, the Manager or other affiliates of RAI may pay certain shared operating expenses on behalf of the Company. | |||||||||
Relationship with Resource Securities | |||||||||
Resource Securities, Inc. (“Resource Securities”), an affiliate of the Advisor, serves as the Company’s dealer-manager and is responsible for marketing the Company’s shares during the primary portion of its public offering. Pursuant to the terms of the dealer-manager agreement with Resource Securities, the Company pays Resource Securities a selling commission of up to 7% of gross primary offering proceeds and a dealer-manager fee of up to 3% of gross primary offering proceeds. Resource Securities reallows all selling commissions earned and a portion of the dealer-manager fee as a marketing fee to participating broker-dealers. No selling commissions or dealer-manager fees are earned by Resource Securities in connection with sales under the distribution reinvestment plan. Additionally, the Company may reimburse Resource Securities for bona fide due diligence expenses. | |||||||||
Relationship with Other Related Parties | |||||||||
The Company utilizes the services of a printing company, Graphic Images, LLC (“Graphic Images”), the principal owner of which is the father of RAI’s Chief Financial Officer. | |||||||||
The amounts receivable/payable and the fees earned/expenses incurred by such related parties are summarized in the following tables: | |||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Due from related parties: | |||||||||
Resource Securities | $ | 3,944 | $ | — | |||||
RAI - self-insurance funds held in escrow | 30,081 | — | |||||||
$ | 34,025 | $ | — | ||||||
Due to related parties: | |||||||||
Advisor | |||||||||
Asset management fees | $ | 28,456 | — | ||||||
Organization and offering costs | 2,272,325 | $ | — | ||||||
Operating expense reimbursements | 1,145,784 | — | |||||||
Manager | |||||||||
Property management fees | 6,391 | — | |||||||
Expense reimbursements | 39,592 | — | |||||||
Resource Securities | |||||||||
Selling commissions and dealer-manager fees | 358,715 | — | |||||||
$ | 3,851,263 | $ | — | ||||||
Graphic Images (1) | $ | 81,424 | $ | — | |||||
(1) Included in Accrued expenses on the consolidated balance sheets. | |||||||||
Years Ended | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Fees earned / expenses incurred: | |||||||||
Advisor | |||||||||
Acquisition fees (1) | $ | 1,354,551 | $ | — | |||||
Asset management fees (2) | $ | 88,253 | $ | — | |||||
Debt financing fees (3) | $ | 192,700 | $ | — | |||||
Organization and offering costs (4) | $ | 3,006,819 | $ | — | |||||
Operating expense reimbursement (5) | $ | 1,115,426 | $ | — | |||||
Interest expense (6) | $ | 2,242 | $ | — | |||||
Manager | |||||||||
Property management fees (2) | $ | 39,242 | $ | — | |||||
Operating expense reimbursements (7) | $ | 54,123 | $ | — | |||||
Resource Securities | |||||||||
Selling commissions and dealer-manager fees (8) | $ | 4,399,256 | $ | — | |||||
Other | |||||||||
Graphic Images | $ | 364,972 | $ | — | |||||
(1) Included in Acquisition costs on the consolidated statements of operations and comprehensive (loss) income. | |||||||||
(2) Included in Management fees on the consolidated statements of operations and comprehensive (loss) income. | |||||||||
(3) Included in Deferred financing costs, net on the consolidated balance sheets. | |||||||||
(4) Included in Deferred offering costs on the consolidated balance sheets. | |||||||||
(5) Included in General and administrative on the consolidated statements of operations and comprehensive (loss) income. | |||||||||
(6) Included in Interest expense on the consolidated statements of operations and comprehensive (loss) income. | |||||||||
(7) Included in Due to Related Parties on the consolidated balance sheets. | |||||||||
(8) Included in Stockholders' equity on the consolidated balance sheets. |
Equity
Equity | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||
Equity | EQUITY | ||||||||||||||||||||
Preferred Stock | |||||||||||||||||||||
The Company’s charter authorizes the Company to issue 10,000,000 shares of its $0.01 par value preferred stock. As of December 31, 2014, no shares of preferred stock were issued or outstanding. | |||||||||||||||||||||
Convertible Stock | |||||||||||||||||||||
As of December 31, 2014, the Company had 50,000 shares of $0.01 par value convertible stock outstanding, which are owned by the Advisor. The convertible stock will convert into shares of the Company’s common stock upon the occurrence of (a) the Company having paid distributions to common stockholders that in the aggregate equal 100% of the price at which the Company originally sold the shares plus an amount sufficient to produce a 7% cumulative, non-compounded annual return on the shares at that price; or (b) if the Company lists its common stock on a national securities exchange and, on or after the 31st trading day following the listing, the Company’s value based on the average trading price of its common stock since the listing, plus prior distributions, combine to meet the same 7% return threshold. | |||||||||||||||||||||
Common Stock | |||||||||||||||||||||
As of December 31, 2014, the Company had an aggregate of 4,759,567 shares of $0.01 par value common stock outstanding, including the Advisor's additional purchase of 117,778 shares of common stock for $1.1 million, as follows: | |||||||||||||||||||||
Shares Issued | Gross Proceeds | ||||||||||||||||||||
Initial public offering | 4,702,399 | $ | 46,748,354 | ||||||||||||||||||
Shares issued through stock distributions | 19,554 | — | |||||||||||||||||||
Shares issued through distribution reinvestment plan | 22,614 | 214,833 | |||||||||||||||||||
Advisor's initial investment, net of 5,000 share conversion | 15,000 | 150,000 | |||||||||||||||||||
4,759,567 | $ | 47,113,187 | |||||||||||||||||||
Distributions | |||||||||||||||||||||
For the year ended December 31, 2014, the Company paid aggregate distributions of $328,785, including $113,952 of distributions paid in cash and $214,833 of distributions reinvested in shares of common stock through the Company's distribution reinvestment plan, as follows: | |||||||||||||||||||||
Authorization Date | Per | Record Date | Distribution Date | Distributions invested in shares of Common Stock | Net Cash Distributions | Total Aggregate Distributions | |||||||||||||||
Common | |||||||||||||||||||||
Share | |||||||||||||||||||||
June 5, 2014 | $ | 0.00068493 | July 31, 2014 | August 1, 2014 | $ | 5,065 | $ | 5,560 | $ | 10,625 | |||||||||||
June 5, 2014 | 0.00068493 | August 31, 2014 | September 2, 2014 | 11,086 | 8,844 | 19,930 | |||||||||||||||
June 5, 2014 | 0.00068493 | September 30, 2014 | October 1, 2014 | 18,497 | 11,197 | 29,694 | |||||||||||||||
October 6, 2014 | 0.00082192 | October 30, 2014 | October 31, 2014 | 27,143 | 13,970 | 41,113 | |||||||||||||||
October 30, 2014 | 0.00068493 | November 26, 2014 | November 28, 2014 | 31,213 | 15,113 | 46,326 | |||||||||||||||
November 13, 2014 | 0.00164384 | December 30, 2014 | December 31, 2014 | 121,829 | 59,268 | 181,097 | |||||||||||||||
$ | 214,833 | $ | 113,952 | $ | 328,785 | ||||||||||||||||
On November 13, 2014, the Company's Board of Directors authorized cash distributions of $259,379 ($0.00164384 per common share) to stockholders of record for every day in the period from December 31, 2014 through January 29, 2015, which distributions were paid on January 30, 2015. | |||||||||||||||||||||
On June 5, 2014, the Company's Board of Directors authorized a stock distribution of 0.00625 shares of common stock, or 0.625% of each outstanding share of common stock to the stockholders of record at the close of business on June 30, 2014. Such stock distribution was issued on July 14, 2014. | |||||||||||||||||||||
On August 14, 2014, the Company's Board of Directors authorized a stock distribution of 0.01 shares of common stock, or 1.0% of each outstanding share of common stock to the stockholders of record at the close of business on September 30, 2014. Such stock distribution was issued on October 15, 2014. | |||||||||||||||||||||
On November 19, 2014, the Company's Board of Directors authorized a stock distribution of 0.008333 shares of the Company's common stock, $0.01 par value per share, or 0.8333% of each outstanding share of common stock to the stockholders of record at the close of business on December 31, 2014. Such distribution was issued January 15, 2015. |
Fair_Value_Measures_and_Disclo
Fair Value Measures and Disclosures | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||
Fair Value Measures and Disclosures | FAIR VALUE MEASURES AND DISCLOSURES | |||||||||||||||
In analyzing the fair value of its investments accounted for on a fair value basis, the Company follows the fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company determines fair value based on quoted prices when available or, if quoted prices are not available, through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the investment. The fair values of cash, tenant receivables and accounts payable, approximate their carrying values due to their short nature. The hierarchy followed defines three levels of inputs that may be used to measure fair value: | ||||||||||||||||
Level 1 - Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date. | ||||||||||||||||
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability. | ||||||||||||||||
Level 3 - Unobservable inputs that reflect the entity’s own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques. | ||||||||||||||||
The determination of where an asset or liability falls in the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each quarter; depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter. However, the Company expects that changes in classifications between levels will be rare. | ||||||||||||||||
The fair value of rental properties is usually estimated based on information obtained from a number of sources, including information obtained about each property as a result of pre-acquisition due diligence, marketing and leasing activities. The Company allocates the purchase price of properties to acquired tangible assets, consisting of land, buildings, fixtures and improvements, and identified intangible lease assets and liabilities, consisting of the value of above-market and below-market leases, as applicable, the value of in-place leases and the value of tenant relationships, based in each case on their fair values. | ||||||||||||||||
Derivatives (interest rate caps) which are reported at fair value in the consolidated balance sheets are valued by a third party pricing agent using an income approach with models that use, as their primary inputs, readily observable market parameters. This valuation process considers factors including interest rate yield curves, time value, credit and volatility factors. (Level 2) | ||||||||||||||||
The following table presents information about the Company's assets measured at fair value on a recurring basis and | ||||||||||||||||
indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value as follows: | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
December 31, 2014 | ||||||||||||||||
Assets: | ||||||||||||||||
Interest rate caps | $ | — | $ | 53,002 | $ | — | $ | 53,002 | ||||||||
$ | — | $ | 53,002 | $ | — | $ | 53,002 | |||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
December 31, 2013 | ||||||||||||||||
Assets: | ||||||||||||||||
Interest rate caps | $ | — | $ | — | $ | — | $ | — | ||||||||
$ | — | $ | — | $ | — | $ | — | |||||||||
The carrying amount and fair value of the Company’s mortgage notes payable are as follows: | ||||||||||||||||
December 31, 2014 | ||||||||||||||||
Carrying | Fair | |||||||||||||||
Amount | Value | |||||||||||||||
Mortgage notes payable | $ | 38,540,000 | $ | 38,540,000 | ||||||||||||
Since the interest rate is variable, the fair value of the mortgage notes payable is equal to the carrying amount. |
Derivatives_and_Hedging_Activi
Derivatives and Hedging Activities | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||
Derivatives and Hedging Activities | DERIVATIVES AND HEDGING ACTIVITIES | ||||||||||||||||||||||
As of December 31, 2014, the Company had the following outstanding interest rate derivatives that were designated as a cash flow hedges of interest rate risk: | |||||||||||||||||||||||
Interest Rate Derivative | Number of Instruments | Notional | Maturity Dates | ||||||||||||||||||||
Amount | |||||||||||||||||||||||
Interest rate cap | 2 | $ | 38,540,000 | November 1, 2018 and January 1, 2018 | |||||||||||||||||||
Tabular Disclosure of Fair Value of Derivative Instrument on the Balance Sheet | |||||||||||||||||||||||
The table below presents the fair value of the Company’s derivative financial instruments, which is included in prepaid expenses and other assets on the consolidated balance sheet as of December 31, 2014: | |||||||||||||||||||||||
Asset Derivatives | Liabilities Derivatives | ||||||||||||||||||||||
December 31, 2014 | December 31, 2013 | December 31, 2014 | December 31, 2013 | ||||||||||||||||||||
Balance Sheet | Fair Value | Balance Sheet | Fair Value | Balance Sheet | Fair Value | Balance Sheet | Fair Value | ||||||||||||||||
Interest rate cap | $ | 53,002 | Interest rate cap | $ | — | NA | $ | — | NA | $ | — | ||||||||||||
Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. During 2015, the Company estimates that $552 will be reclassified as an increase to interest expense. |
Operating_Expense_Limitation
Operating Expense Limitation | 12 Months Ended |
Dec. 31, 2014 | |
Other Income and Expenses [Abstract] | |
Operating Expense Limitation | OPERATING EXPENSE LIMITATION |
As defined under the Company's charter, commencing four fiscal quarters ending June 30, 2015, the Advisor must reimburse the Company the amount by which the aggregate total operating expenses for the four fiscal quarters then ended exceed the greater of 2% of the average invested assets or 25% of net income, unless the conflicts committee has determined that such excess expenses were justified based on unusual and non-recurring factors. “Average invested assets” means the average monthly book value of assets invested, directly or indirectly, in equity interests in and loans secured by real estate during the 12-month period before deducting depreciation, bad debts or other non-cash reserves. “Total operating expenses” means all expenses paid or incurred by the Company, as determined under GAAP, that are in any way related to operations, including advisory fees, but excluding (a) the expenses of raising capital such as organization and offering expenses, legal, audit, accounting, underwriting, brokerage, listing, registration and other fees, printing and other such expenses and taxes incurred in connection with the issuance, distribution, transfer, registration and stock exchange listing of stock; (b) interest payments; (c) taxes; (d) non-cash expenditures such as depreciation, amortization and bad debt reserves; (e) reasonable incentive fees based on the gain in the sale of assets; and (f) acquisition fees, acquisition expenses (including expenses relating to potential investments that do not close), disposition fees on the resale of property and other expenses connected with the acquisition, disposition and ownership of real estate interests, loans or other property (including the costs of foreclosure, insurance premiums, legal services, maintenance, repair and improvement of property). |
Subsequent_Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS |
On January 26, 2015, the Company's Board of Directors authorized cash distributions to the stockholders of record at the close of business each day in the period commencing January 30, 2015 through March 30, 2015 equal to a daily amount of $0.00164384 per share of common stock, payable on February 27, 2015 and March 31, 2015. | |
On February 19, 2015, the Company's Board of Directors authorized a stock distribution of 0.005 shares of the Company's common stock, or 0.5% of each outstanding share of common stock, to the stockholders of record at the close of business on March 31, 2015. Such distribution is to be issued on April 15, 2015. | |
On March 30, 2015, the Company, through its operating partnership, purchased a 216 unit multifamily community located in Atlanta, Georgia from an unaffiliated seller for $32.5 million. | |
On March 24, 2015, the Company's Board of Directors authorized a cash distribution to the stockholders of record at the close of business each day in the period commencing March 31, 2015 through and including June 29, 2015 equal to a daily amount of $0.000164384 per share of common stock, payable on April 30, 2015, May 29, 2015 and June 30, 2015. | |
The Company has evaluated subsequent events and determined that no events have occurred, other than those disclosed above, which would require an adjustment to the consolidated financial statements. |
Schedule_III_Real_Estate_and_A
Schedule III Real Estate and Accumulated Depreciation | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
SEC Schedule III, Real Estate and Accumulated Depreciation Disclosure [Abstract] | |||||||||||||||||||||||||
SEC Schedule III Real Estate and Accumulated Depreciation Disclosure [Text Block] | |||||||||||||||||||||||||
Column A | Column B | Column C | Column D | Column E | Column F | Column G | Column H | ||||||||||||||||||
Description | Encumbrances | Initial cost to Company | Cost capitalized subsequent to acquisition | Gross Amount at which carried at close of period | Accumulated Depreciation | Date of Construction | Date Acquired | ||||||||||||||||||
Real estate owned: | |||||||||||||||||||||||||
Residential | $ | — | $ | 9,148,637 | $ | (94,229 | ) | $ | 9,054,408 | $ | (179,695 | ) | 1980 | 6/4/14 | |||||||||||
Dallas, Texas | |||||||||||||||||||||||||
Residential | — | 45,823,939 | 4,653 | 45,828,592 | — | 1999 | 12/19/14 | ||||||||||||||||||
Fort Worth, Texas | |||||||||||||||||||||||||
$ | — | $ | 54,972,576 | $ | (89,576 | ) | $ | 54,883,000 | $ | (179,695 | ) | ||||||||||||||
Years Ended | |||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
Investments in real estate: | |||||||||||||||||||||||||
Balance at beginning of the year | $ | — | $ | — | |||||||||||||||||||||
Additions during the period: | — | — | |||||||||||||||||||||||
Acquisitions | 54,972,576 | — | |||||||||||||||||||||||
Improvements, etc. | 109,264 | — | |||||||||||||||||||||||
Dispositions during the period: | (198,840 | ) | — | ||||||||||||||||||||||
Balance at end of year | $ | 54,883,000 | $ | — | |||||||||||||||||||||
Accumulated Depreciation: | |||||||||||||||||||||||||
Balance at beginning of year | $ | — | $ | — | |||||||||||||||||||||
Additions charged to expenses | 179,695 | — | |||||||||||||||||||||||
Balance at the end of year | $ | 179,695 | $ | — | |||||||||||||||||||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Accounting Policies [Abstract] | |||||||
Principles of Consolidation | Principles of Consolidation | ||||||
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries as follows: | |||||||
Subsidiary | Apartment Complex | Number of Units | Property Location | ||||
RRE Opportunity Holdings II, LLC | N/A | N/A | N/A | ||||
RRE Opportunity OP II, LP | N/A | N/A | N/A | ||||
RRE Bear Creek Holdings, LLC ("Bear Creek") | Bear Creek | 152 | Dallas, TX | ||||
RRE Oak Hill Holdings, LLC ("Oak Hill") | Oak Hill | 360 | Fort Worth, TX | ||||
N/A - Not Applicable | |||||||
All intercompany accounts and transactions have been eliminated in consolidation. | |||||||
Use of Estimates | Use of Estimates | ||||||
The preparation of the consolidated financial statements in conformity with Generally Accepted Accounting Principles ("GAAP") requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. | |||||||
Concentration of Credit Risk | Concentration of Credit Risk | ||||||
Financial instruments, which potentially subject the Company to concentration of credit risk, consist of periodic temporary deposits of cash. At December 31, 2014, the Company had $15.8 million of deposits at various banks, $14.8 million of which was greater than the insurance limit of the Federal Deposit Insurance Corporation. No losses have been experienced on such deposits. | |||||||
Real Estate Investments | Real Estate Investments | ||||||
The Company records acquired real estate at fair value. The Company considers the period of future benefit of an asset to determine its appropriate useful life. The Company's estimated useful lives of its assets by class are as follows: | |||||||
Buildings | 27.5 years | ||||||
Building improvements | 3.0 to 27.5 years | ||||||
Tenant improvements | Expected useful life | ||||||
Lease intangibles | Remaining term of related lease | ||||||
Impairment of Long Lived Assets | Impairment of Long Lived Assets | ||||||
When circumstances indicate the carrying value of a property may not be recoverable, the Company reviews the asset for impairment. This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition. These estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors. | |||||||
If impairment exists, due to the inability to recover the carrying value of a property, an impairment loss will be recorded to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held and used. For properties held for sale, the impairment loss is the adjustment to fair value less estimated cost to dispose of the asset. These assessments have a direct impact on net income because recording an impairment loss results in an immediate negative adjustment to net income. There were no impairments as of December 31, 2014. | |||||||
Allocation of Purchase Price of Acquired Assets | Allocation of Purchase Price of Acquired Assets | ||||||
Upon the acquisition of real properties, the Company allocates the purchase price of properties to acquired tangible assets, consisting of land, buildings, fixtures and improvements, identified intangible lease assets, consisting of the value of above-market and below-market leases, as applicable, the value of in-place leases, the value of tenant relationships, and liabilities, based in each case on their fair values. | |||||||
Fair value estimates are based on information obtained from a number of sources, including information obtained about each property as a result of pre-acquisition due diligence, marketing and leasing activities. In addition, the Company may obtain independent appraisal reports. The information in the appraisal reports, along with the aforementioned information available to the Company's management, is used in allocating the purchase price. The independent appraisers have no involvement in management's allocation decisions other than providing market information. | |||||||
The Company records above-market and below-market in-place lease values for acquired properties based on the present value (using an interest rate that reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of the lease. The Company amortizes any capitalized above-market or below-market lease values as an increase or reduction to rental income over the remaining non-cancelable terms of the respective leases. | |||||||
The Company measures the aggregate value of other intangible assets acquired based on the difference between (i) the property valued with existing in-place leases adjusted to market rental rates and (ii) the property valued as if vacant. Management’s estimates of value are expected to be made using methods similar to those used by independent appraisers (e.g., discounted cash flow analysis). Factors to be considered by management in its analysis include an estimate of carrying costs during hypothetical expected lease-up periods considering current market conditions and costs to execute similar leases. | |||||||
The Company also considers information obtained about each property as a result of its pre-acquisition due diligence, marketing and leasing activities in estimating the fair value of the tangible and intangible assets acquired. In estimating carrying costs, management includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods. Management also estimates costs to execute similar leases including leasing commissions and legal and other related expenses to the extent that such costs have not already been incurred in connection with a new lease origination as part of the transaction. | |||||||
The total amount of other intangible assets acquired is further allocated to customer relationship intangible values based on management’s evaluation of the specific characteristics of each tenant’s lease and the Company’s overall relationship with that respective tenant. Characteristics considered by management in allocating these values include the nature and extent of the Company’s existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality and expectations of lease renewals (including those existing under the terms of the lease agreement), among other factors. | |||||||
The Company amortizes the value of in-place leases to expense over the remaining term of the respective leases. The value of customer relationship intangibles is amortized to expense over the initial term and any renewal periods in the respective leases, but in no event do amortization periods for the intangible assets exceed the remaining depreciable life of the building. Should a tenant terminate its lease, the unamortized portion of the in-place lease value and customer relationship intangibles would be charged to expense in that period. | |||||||
The determination of the fair value of the assets and liabilities acquired requires the use of significant assumptions with regard to current market rental rates, discount rates and other variables. These estimates are subject to change until all information is finalized, which is generally within one year of the acquisition date. | |||||||
Derivatives and Hedging Activities | Derivatives and Hedging Activities | ||||||
Risk Management Objective of Using Derivatives | |||||||
The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its debt funding and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s investments and borrowings. | |||||||
As a condition of the Company’s mortgage loan, from time to time the Company may be required to enter into certain derivative transactions as may be required by the lender. These transactions would generally be in line with the Company’s own risk management objectives and also serve to protect the lender. | |||||||
Cash Flow Hedges of Interest Rate Risk | |||||||
The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company entered into interest rate caps that were designated as cash flow hedges during 2014. Interest rate caps designated as cash flow hedges involve the receipt of variable amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an up-front premium. | |||||||
The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the year ended December 31, 2014, such derivatives were used to hedge the variable cash flows, indexed to USD- London InterBank Offered Rate ("LIBOR"), associated with an existing variable-rate loan agreement. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. During the year ended December 31, 2014, the Company did not record any hedge ineffectiveness in earnings. | |||||||
Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. | |||||||
Revenue Recognition | Revenue Recognition | ||||||
The Company recognizes minimum rent, including rental abatements and contractual fixed increases attributable to operating leases, on a straight-line basis over the term of the related lease and includes amounts expected to be received in later years in deferred rents. The Company records property operating expense reimbursements due from tenants for common area maintenance, real estate taxes and other recoverable costs in the period the related expenses are incurred. | |||||||
The specific timing of a sale is measured against various criteria related to the terms of the transaction and any continuing involvement associated with the property. If the criteria for profit recognition under the full-accrual method are not met, the Company defers the gain recognition and accounts for the continued operations of the property by applying the percentage-of-completion, reduced profit, deposit, installment or cost recovery methods, as appropriate, until the appropriate criteria are met. | |||||||
Tenant Receivables | Tenant Receivables | ||||||
The Company makes estimates of the collectability of its tenant receivables related to base rents, including straight-line rentals, expense reimbursements and other revenue or income. The Company specifically analyzes accounts receivable and historical bad debts, tenant creditworthiness, current economic trends when evaluating the adequacy of the allowance for doubtful accounts. In addition, with respect to tenants in bankruptcy, the Company makes estimates of the expected recovery of pre-petition and post-petition claims in assessing the estimated collectability of the related receivable. In some cases, the ultimate resolution of these claims can exceed one year. | |||||||
Income Taxes | Income Taxes | ||||||
The Company intends to elect and qualify to be taxed as a REIT, commencing with its taxable year ended December 31, 2014. Accordingly, the Company will generally not be subject to corporate U.S. federal or state income tax to the extent that it makes qualifying distributions to its stockholders, and provided it satisfies on a continuing basis, through actual investment and operating results, the REIT requirements including certain asset, income, distribution and stock ownership tests. If the Company fails to qualify as a REIT, and does not qualify for certain statutory relief provisions, it will be subject to U.S. federal, state and local income taxes and may be precluded from qualifying as a REIT for the subsequent four taxable years following the year in which it lost its REIT qualification. Accordingly, the Company’s failure to qualify as a REIT could have a material adverse impact on its results of operations and amounts available for distribution to its stockholders. | |||||||
The dividends paid deduction of a REIT for qualifying dividends to its stockholders is computed using the Company’s taxable income as opposed to net income reported on the financial statements. Taxable income, generally, will differ from net income reported on the financial statements because the determination of taxable income is based on tax provisions and not financial accounting principles. | |||||||
The Company may elect to treat certain of its subsidiaries as taxable REIT subsidiaries (“TRSs”). In general, the Company’s TRS may hold assets and engage in activities that it cannot hold or engage in directly and generally may engage in any real estate or non-real estate-related business. A TRS is subject to U.S. federal, state and local corporate income taxes. | |||||||
While a TRS may generate net income, a TRS can declare dividends to the Company which will be included in the Company’s taxable income and necessitate a distribution to its stockholders. Conversely, if the Company retains earnings at a TRS level, no distribution is required and the Company can increase book equity of the consolidated entity. | |||||||
Earnings Per Share | Earnings Per Share | ||||||
Basic earnings per share is calculated on the basis of weighted-average number of common shares outstanding during the year. Basic earnings per share is computed by dividing income available to common shareholders by the weighted-average common shares outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted to common stock. Due to reported losses for the periods presented, the convertible shares (discussed in Note 12) are not included in the diluted earnings per share calculation. | |||||||
Organization and Offering Costs | Organization and Offering Costs | ||||||
The Company incurs organizational, accounting, and offering costs in connection with its ongoing initial public offering. Organization and offering costs (other than selling commissions and dealer-manager fees) of the Company are initially paid by the Advisor on behalf of the Company. Offering costs are discussed in more detail below under the heading "Deferred Offering Costs." Organization costs are expensed as incurred and include all expenses to be incurred by the Company in connection with the formation of the Company, including but not limited to legal fees and other costs to incorporate the Company. | |||||||
Pursuant to the Amended and Restated Advisory Agreement between the Company and the Advisor dated January 9, 2014 (the “Advisory Agreement”), the Company is obligated to reimburse the Advisor for organizational and offering costs it incurs on the Company's behalf, but only to the extent that such reimbursements will not cause organizational and offering expenses (other than selling commissions and the dealer manager fees) to exceed 2.5% of the gross offering proceeds raised in the offering, when recorded by the Company. | |||||||
Deferred Offering Costs | Deferred Offering Costs | ||||||
Through December 31, 2014, the Company has incurred $4.4 million for the payment of public offering costs consisting of accounting, advertising, allocated payroll, due diligence, marketing, legal and similar costs. As of December 31, 2014, the Advisor has advanced $3.0 million of these costs on behalf of the Company. A portion of these costs was charged to equity upon the sale of each share of common stock sold under the public offering. Similarly, a portion of the proceeds received from the sales of shares in the Company's public offering was paid to the Advisor to reimburse it for the amount incurred on behalf of the Company. Deferred offering costs represent the portion of the total costs incurred that have not been charged to equity to date. As of December 31, 2014, the Company has reimbursed $734,493 of deferred offering costs to the Advisor. Upon completion of the public offering, any excess deferred offering costs in excess of the limit on organization and offering costs discussed above, will be charged back to the Advisor. | |||||||
New Accounting Standards | New Accounting Standards | ||||||
In June 2014, the Financial Accounting Standards Board ("FASB") issued authoritative guidance to change the criteria for reporting development stage entities. Under the new guidance, the requirement to present inception-to-date information on the statement of operations, cash flows and statement of equity has been eliminated. In addition, financial statements no longer need to be labeled as those of a development stage entity, disclosure of a description of the development stage activities in which the entity is engaged is no longer required, and disclosing in the first year the company is no longer a development stage entity and that in prior years it had been in the development stage is also no longer required. The Company's early adoption of this guidance, as of January 1, 2014, did not have a material impact on its consolidated financial position, results of operations or cash flows. | |||||||
Accounting Standards Issued But Not Yet Effective | |||||||
In May 2014, FASB issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers” ("ASU No. 2014-09"), which will replace most existing revenue recognition guidance in GAAP. The core principle of ASU No. 2014-09 is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. ASU No. 2014-09 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. ASU No. 2014-09 will be effective for the Company beginning January 1, 2017, including interim periods in 2017, and allows for both retrospective and prospective methods of adoption. The Company is in the process of determining the method of adoption and assessing the impact of ASU No. 2014-09 on the Company's consolidated financial position, results of operations and cash flows. | |||||||
In January 2015, FASB issued ASU No. 2015-01, "Income Statement - Extraordinary and Unusual Items (Subtopic 225-20), Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items" (“ASU No. 2015-01”). The amendments in ASU No. 2015-01 eliminate from GAAP the concept of extraordinary items. Although the amendment will eliminate the requirements for reporting entities to consider whether an underlying event or transaction is extraordinary, the presentation and disclosure guidance for items that are unusual in nature or occur infrequently will be retained and will be expanded to include items that are both unusual in nature and infrequently occurring. ASU No. 2015-01 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The Company does not expect the adoption of ASU No. 2015-01 to have a significant impact on its financial statements. | |||||||
Fair Value Measures | In analyzing the fair value of its investments accounted for on a fair value basis, the Company follows the fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company determines fair value based on quoted prices when available or, if quoted prices are not available, through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the investment. The fair values of cash, tenant receivables and accounts payable, approximate their carrying values due to their short nature. The hierarchy followed defines three levels of inputs that may be used to measure fair value: | ||||||
Level 1 - Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date. | |||||||
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability. | |||||||
Level 3 - Unobservable inputs that reflect the entity’s own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques. | |||||||
The determination of where an asset or liability falls in the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each quarter; depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter. However, the Company expects that changes in classifications between levels will be rare. | |||||||
The fair value of rental properties is usually estimated based on information obtained from a number of sources, including information obtained about each property as a result of pre-acquisition due diligence, marketing and leasing activities. The Company allocates the purchase price of properties to acquired tangible assets, consisting of land, buildings, fixtures and improvements, and identified intangible lease assets and liabilities, consisting of the value of above-market and below-market leases, as applicable, the value of in-place leases and the value of tenant relationships, based in each case on their fair values. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Accounting Policies [Abstract] | |||||||
Schedule of Wholly-Owned Subsidiaries | The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries as follows: | ||||||
Subsidiary | Apartment Complex | Number of Units | Property Location | ||||
RRE Opportunity Holdings II, LLC | N/A | N/A | N/A | ||||
RRE Opportunity OP II, LP | N/A | N/A | N/A | ||||
RRE Bear Creek Holdings, LLC ("Bear Creek") | Bear Creek | 152 | Dallas, TX | ||||
RRE Oak Hill Holdings, LLC ("Oak Hill") | Oak Hill | 360 | Fort Worth, TX | ||||
N/A - Not Applicable | |||||||
Real Estate Investments | The Company's estimated useful lives of its assets by class are as follows: | ||||||
Buildings | 27.5 years | ||||||
Building improvements | 3.0 to 27.5 years | ||||||
Tenant improvements | Expected useful life | ||||||
Lease intangibles | Remaining term of related lease |
Supplemental_Cash_Flow_Informa1
Supplemental Cash Flow Information (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Supplemental Cash Flow Elements [Abstract] | ||||||||
Supplemental Cash Flow Information | The following table presents supplemental cash flow information: | |||||||
Years Ended | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Non-cash financing and investing activities: | ||||||||
Increase in subscription receivables | $ | 3,819,991 | $ | — | ||||
Cash distributions on common stock declared but not yet paid | 259,379 | — | ||||||
Stock issued from distribution reinvestment plan | 195,542 | — | ||||||
Stock distributions issued | 214,833 | — | ||||||
Deferred offering costs | 1,803,098 | — | ||||||
Due to related parties | 1,467,064 | — | ||||||
Cash paid during the period for: | ||||||||
Interest | $ | 133,036 | $ | — | ||||
Restricted_Cash_Tables
Restricted Cash (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Cash and Cash Equivalents [Abstract] | ||||||||
Summary of Components of Restricted Cash | A summary of the components of restricted cash follows: | |||||||
December 31, | December 31, | |||||||
2014 | 2013 | |||||||
Real estate taxes | $ | 128,871 | $ | — | ||||
Insurance | 157,600 | — | ||||||
Capital improvements | 438,834 | — | ||||||
Total | $ | 725,305 | $ | — | ||||
Rental_Properties_Net_Tables
Rental Properties, Net (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Real Estate [Abstract] | ||||||||
Schedule of Investments in Rental Properties | The Company’s investments in rental properties consisted of the following: | |||||||
December 31, | December 31, 2013 | |||||||
2014 | ||||||||
Land | $ | 6,723,368 | $ | — | ||||
Building and improvements | 47,546,786 | — | ||||||
Furniture, fixtures and equipment | 612,846 | — | ||||||
54,883,000 | — | |||||||
Less: accumulated depreciation | (179,695 | ) | — | |||||
$ | 54,703,305 | $ | — | |||||
Acquisitions_Tables
Acquisitions (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||
Summary of Acquisitions and Assigned Fair Values | The table below summarizes these acquisitions and the respective fair values assigned: | ||||||||||||||||||||||||||||||||
Multifamily | City and State | Date of | Purchase | Land | Building and | Furniture, Fixture and Equipment | Intangible Assets | Other | Fair Valued | ||||||||||||||||||||||||
Community Name | Acquisition | Price (1) | Improvements | Liabilities | Assigned | ||||||||||||||||||||||||||||
Bear Creek | Dallas, TX | 6/4/14 | $ | 9,500,000 | $ | 1,888,982 | $ | 7,060,815 | $ | 198,840 | $ | 351,363 | $ | (84,732 | ) | $ | 9,415,268 | ||||||||||||||||
Oak Hill | Fort Worth, TX | 12/19/14 | 47,000,000 | 4,834,386 | 40,485,971 | 503,582 | 1,176,061 | (59,977 | ) | 46,940,023 | |||||||||||||||||||||||
-1 | Purchase price excludes closing costs and acquisition expenses. | ||||||||||||||||||||||||||||||||
Fair Value of Net Assets Acquired | The following table reflects the fair value of the net assets acquired: | ||||||||||||||||||||||||||||||||
Rental property: | |||||||||||||||||||||||||||||||||
Land | $ | 1,888,982 | |||||||||||||||||||||||||||||||
Buildings | 7,060,815 | ||||||||||||||||||||||||||||||||
Personal property | 198,840 | ||||||||||||||||||||||||||||||||
9,148,637 | |||||||||||||||||||||||||||||||||
Acquired intangibles - in-place leases | 351,363 | ||||||||||||||||||||||||||||||||
Accrued real estate taxes | (69,085 | ) | |||||||||||||||||||||||||||||||
Prepaid rents | (163 | ) | |||||||||||||||||||||||||||||||
Security deposits | (15,484 | ) | |||||||||||||||||||||||||||||||
Fair value assigned | $ | 9,415,268 | |||||||||||||||||||||||||||||||
On December 19, 2014, the Company acquired a 360-unit, multifamily apartment community located in Fort Worth, Texas known as Oak Hill, for $47.0 million, excluding closing costs. The Company paid an acquisition fee of $1.1 million, or 2% of the purchase price (including closing costs and any amounts reserved for capital expenditures), to the Advisor. | |||||||||||||||||||||||||||||||||
The following table reflects the fair value of the net assets acquired: | |||||||||||||||||||||||||||||||||
Rental property: | |||||||||||||||||||||||||||||||||
Land | $ | 4,834,386 | |||||||||||||||||||||||||||||||
Buildings | 40,485,971 | ||||||||||||||||||||||||||||||||
Personal property | 503,582 | ||||||||||||||||||||||||||||||||
45,823,939 | |||||||||||||||||||||||||||||||||
Acquired intangibles - in-place leases | 1,176,061 | ||||||||||||||||||||||||||||||||
Accrued real estate taxes | — | ||||||||||||||||||||||||||||||||
Prepaid rents | (13,162 | ) | |||||||||||||||||||||||||||||||
Security deposits | (46,815 | ) | |||||||||||||||||||||||||||||||
Fair value assigned | $ | 46,940,023 | |||||||||||||||||||||||||||||||
The table below summarizes the total revenues, net loss, and acquisition costs of the Company's 2014 acquisitions: | |||||||||||||||||||||||||||||||||
Years Ended | |||||||||||||||||||||||||||||||||
December 31, | |||||||||||||||||||||||||||||||||
Multifamily Community | 2014 | 2013 | |||||||||||||||||||||||||||||||
Bear Creek | |||||||||||||||||||||||||||||||||
Total Revenues | $ | 821,576 | $ | — | |||||||||||||||||||||||||||||
Net Loss | (748,500 | ) | — | ||||||||||||||||||||||||||||||
Acquisition Costs | 329,709 | — | |||||||||||||||||||||||||||||||
Oak Hill | |||||||||||||||||||||||||||||||||
Total Revenues | $ | 170,097 | $ | — | |||||||||||||||||||||||||||||
Net Loss | (82,184 | ) | — | ||||||||||||||||||||||||||||||
Acquisition Costs | 1,259,235 | — | |||||||||||||||||||||||||||||||
Mortgage_Notes_Payable_Tables
Mortgage Notes Payable (Tables) | 12 Months Ended | |||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||
Summary of Mortgage Notes Payable | The following is a summary of the Company's mortgage notes payable as of December 31, 2014: | |||||||||||||||||
Balance Outstanding at | Maturity | Interest Rate | Average | Interest Expense | ||||||||||||||
Date | Monthly Debt | Incurred for the | ||||||||||||||||
Collateral | 31-Dec-14 | 31-Dec-14 | Service | Year ended December 31, 2014 | ||||||||||||||
Bear Creek | $ | 7,465,000 | 7/1/24 | 2.54 | % | $ | 15,901 | $ | 110,302 | |||||||||
Oak Hill | 31,075,000 | 1/1/25 | 2.07 | % | 54,323 | 36,557 | ||||||||||||
$ | 38,540,000 | |||||||||||||||||
Annual Principal Payments on Mortgage Notes Payable for Next Five Years | Annual principal payments on the mortgage notes payable for each of the next five years ending December 31, and thereafter, are as follows: | |||||||||||||||||
2015 | $ | — | ||||||||||||||||
2016 | — | |||||||||||||||||
2017 | 590,509 | |||||||||||||||||
2018 | 680,324 | |||||||||||||||||
2019 | 730,909 | |||||||||||||||||
Thereafter | 36,538,258 | |||||||||||||||||
$ | 38,540,000 | |||||||||||||||||
Deferred_Financing_Costs_Table
Deferred Financing Costs (Tables) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||||
Schedule of Deferred Financing Costs | Amortization of deferred financing costs for the next five years ending December 31, and thereafter, are as follows: | |||
2015 | $ | 58,112 | ||
2016 | 62,137 | |||
2017 | 61,607 | |||
2018 | 60,653 | |||
2019 | 59,547 | |||
Thereafter | 279,727 | |||
$ | 581,783 | |||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Equity [Abstract] | ||||
Schedule of Accumulated Other Comprehensive Loss | The following table presents the changes in accumulated other comprehensive loss for the year ended December 31, 2014: | |||
Net unrealized loss on derivatives | ||||
January 1, 2014 | $ | — | ||
Unrealized loss on designated hedge | (34,468 | ) | ||
December 31, 2014 | $ | (34,468 | ) |
Related_Party_Transactions_Tab
Related Party Transactions (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Related Party Transactions [Abstract] | |||||||||
Fees Earned/Expenses Incurred and Amounts Payable to Related Parties | The amounts receivable/payable and the fees earned/expenses incurred by such related parties are summarized in the following tables: | ||||||||
December 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Due from related parties: | |||||||||
Resource Securities | $ | 3,944 | $ | — | |||||
RAI - self-insurance funds held in escrow | 30,081 | — | |||||||
$ | 34,025 | $ | — | ||||||
Due to related parties: | |||||||||
Advisor | |||||||||
Asset management fees | $ | 28,456 | — | ||||||
Organization and offering costs | 2,272,325 | $ | — | ||||||
Operating expense reimbursements | 1,145,784 | — | |||||||
Manager | |||||||||
Property management fees | 6,391 | — | |||||||
Expense reimbursements | 39,592 | — | |||||||
Resource Securities | |||||||||
Selling commissions and dealer-manager fees | 358,715 | — | |||||||
$ | 3,851,263 | $ | — | ||||||
Graphic Images (1) | $ | 81,424 | $ | — | |||||
(1) Included in Accrued expenses on the consolidated balance sheets. | |||||||||
Years Ended | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Fees earned / expenses incurred: | |||||||||
Advisor | |||||||||
Acquisition fees (1) | $ | 1,354,551 | $ | — | |||||
Asset management fees (2) | $ | 88,253 | $ | — | |||||
Debt financing fees (3) | $ | 192,700 | $ | — | |||||
Organization and offering costs (4) | $ | 3,006,819 | $ | — | |||||
Operating expense reimbursement (5) | $ | 1,115,426 | $ | — | |||||
Interest expense (6) | $ | 2,242 | $ | — | |||||
Manager | |||||||||
Property management fees (2) | $ | 39,242 | $ | — | |||||
Operating expense reimbursements (7) | $ | 54,123 | $ | — | |||||
Resource Securities | |||||||||
Selling commissions and dealer-manager fees (8) | $ | 4,399,256 | $ | — | |||||
Other | |||||||||
Graphic Images | $ | 364,972 | $ | — | |||||
(1) Included in Acquisition costs on the consolidated statements of operations and comprehensive (loss) income. | |||||||||
(2) Included in Management fees on the consolidated statements of operations and comprehensive (loss) income. | |||||||||
(3) Included in Deferred financing costs, net on the consolidated balance sheets. | |||||||||
(4) Included in Deferred offering costs on the consolidated balance sheets. | |||||||||
(5) Included in General and administrative on the consolidated statements of operations and comprehensive (loss) income. | |||||||||
(6) Included in Interest expense on the consolidated statements of operations and comprehensive (loss) income. | |||||||||
(7) Included in Due to Related Parties on the consolidated balance sheets. | |||||||||
(8) Included in Stockholders' equity on the consolidated balance sheets. |
Equity_Tables
Equity (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||
Schedule of Common Stock | As of December 31, 2014, the Company had an aggregate of 4,759,567 shares of $0.01 par value common stock outstanding, including the Advisor's additional purchase of 117,778 shares of common stock for $1.1 million, as follows: | ||||||||||||||||||||
Shares Issued | Gross Proceeds | ||||||||||||||||||||
Initial public offering | 4,702,399 | $ | 46,748,354 | ||||||||||||||||||
Shares issued through stock distributions | 19,554 | — | |||||||||||||||||||
Shares issued through distribution reinvestment plan | 22,614 | 214,833 | |||||||||||||||||||
Advisor's initial investment, net of 5,000 share conversion | 15,000 | 150,000 | |||||||||||||||||||
4,759,567 | $ | 47,113,187 | |||||||||||||||||||
Schedule of Dividends | For the year ended December 31, 2014, the Company paid aggregate distributions of $328,785, including $113,952 of distributions paid in cash and $214,833 of distributions reinvested in shares of common stock through the Company's distribution reinvestment plan, as follows: | ||||||||||||||||||||
Authorization Date | Per | Record Date | Distribution Date | Distributions invested in shares of Common Stock | Net Cash Distributions | Total Aggregate Distributions | |||||||||||||||
Common | |||||||||||||||||||||
Share | |||||||||||||||||||||
June 5, 2014 | $ | 0.00068493 | July 31, 2014 | August 1, 2014 | $ | 5,065 | $ | 5,560 | $ | 10,625 | |||||||||||
June 5, 2014 | 0.00068493 | August 31, 2014 | September 2, 2014 | 11,086 | 8,844 | 19,930 | |||||||||||||||
June 5, 2014 | 0.00068493 | September 30, 2014 | October 1, 2014 | 18,497 | 11,197 | 29,694 | |||||||||||||||
October 6, 2014 | 0.00082192 | October 30, 2014 | October 31, 2014 | 27,143 | 13,970 | 41,113 | |||||||||||||||
October 30, 2014 | 0.00068493 | November 26, 2014 | November 28, 2014 | 31,213 | 15,113 | 46,326 | |||||||||||||||
November 13, 2014 | 0.00164384 | December 30, 2014 | December 31, 2014 | 121,829 | 59,268 | 181,097 | |||||||||||||||
$ | 214,833 | $ | 113,952 | $ | 328,785 | ||||||||||||||||
Fair_Value_Measures_and_Disclo1
Fair Value Measures and Disclosures (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||
Schedule of assets measured at fair value on a recurring basis | The following table presents information about the Company's assets measured at fair value on a recurring basis and | |||||||||||||||
indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value as follows: | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
December 31, 2014 | ||||||||||||||||
Assets: | ||||||||||||||||
Interest rate caps | $ | — | $ | 53,002 | $ | — | $ | 53,002 | ||||||||
$ | — | $ | 53,002 | $ | — | $ | 53,002 | |||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
December 31, 2013 | ||||||||||||||||
Assets: | ||||||||||||||||
Interest rate caps | $ | — | $ | — | $ | — | $ | — | ||||||||
$ | — | $ | — | $ | — | $ | — | |||||||||
Schedule of carrying and fair values of assets and liabilities | The carrying amount and fair value of the Company’s mortgage notes payable are as follows: | |||||||||||||||
December 31, 2014 | ||||||||||||||||
Carrying | Fair | |||||||||||||||
Amount | Value | |||||||||||||||
Mortgage notes payable | $ | 38,540,000 | $ | 38,540,000 | ||||||||||||
Derivatives_and_Hedging_Activi1
Derivatives and Hedging Activities (Tables) | 12 Months Ended | ||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||
Schedule of interest rate derivatives | As of December 31, 2014, the Company had the following outstanding interest rate derivatives that were designated as a cash flow hedges of interest rate risk: | ||||||||||||||||||||||
Interest Rate Derivative | Number of Instruments | Notional | Maturity Dates | ||||||||||||||||||||
Amount | |||||||||||||||||||||||
Interest rate cap | 2 | $ | 38,540,000 | November 1, 2018 and January 1, 2018 | |||||||||||||||||||
Schedule of fair value of derivative financial instruments | The table below presents the fair value of the Company’s derivative financial instruments, which is included in prepaid expenses and other assets on the consolidated balance sheet as of December 31, 2014: | ||||||||||||||||||||||
Asset Derivatives | Liabilities Derivatives | ||||||||||||||||||||||
December 31, 2014 | December 31, 2013 | December 31, 2014 | December 31, 2013 | ||||||||||||||||||||
Balance Sheet | Fair Value | Balance Sheet | Fair Value | Balance Sheet | Fair Value | Balance Sheet | Fair Value | ||||||||||||||||
Interest rate cap | $ | 53,002 | Interest rate cap | $ | — | NA | $ | — | NA | $ | — | ||||||||||||
Nature_of_Business_and_Operati1
Nature of Business and Operations (Details) (USD $) | 12 Months Ended | 0 Months Ended | ||||||
Dec. 31, 2014 | Dec. 20, 2013 | Oct. 09, 2012 | Jun. 02, 2014 | Jun. 04, 2014 | Oct. 21, 2014 | Jan. 08, 2015 | Dec. 31, 2013 | |
Class of Stock [Line Items] | ||||||||
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 | ||||||
Issuance of stock | $46,748,354 | |||||||
Common stock, shares issued (in shares) | 4,759,567 | 15,000 | ||||||
Advisor [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Issuance of stock | 1,100,000 | 200,000 | ||||||
Issuance of stock (in shares) | 117,778 | 20,000 | ||||||
Common stock exchanged (in shares) | 5,000 | |||||||
Convertible Stock [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, shares authorized (in shares) | 50,000 | 50,000 | ||||||
Issuance of stock | 0 | |||||||
Issuance of stock (in shares) | 0 | |||||||
Common stock, shares issued (in shares) | 50,000 | 50,000 | ||||||
Convertible Stock [Member] | Advisor [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Issuance of stock (in shares) | 50,000 | |||||||
Offering pursuant to Registration Statement | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, shares authorized (in shares) | 110,000,000 | |||||||
Initial public offering [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, shares authorized (in shares) | 100,000,000 | |||||||
Common stock, initial public offering price (in dollars per share) | $10 | |||||||
Minimum purchase to receive volume discount | 1,000,000 | |||||||
Minimum offering amount | 2,000,000 | |||||||
Common stock, shares issued (in shares) | 4,702,399 | |||||||
Gross offering proceeds | 47,100,000 | |||||||
Initial public offering [Member] | New York [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Minimum offering amount | 2,500,000 | |||||||
Initial public offering [Member] | Ohio [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Minimum offering amount | 20,000,000 | |||||||
Initial public offering [Member] | Pennsylvania [Member] | Subsequent Event [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Minimum offering amount | 50,000,000 | |||||||
Distribution reinvestment plan [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, shares authorized (in shares) | 10,000,000 | |||||||
Common stock, initial public offering price (in dollars per share) | $9.50 | |||||||
Issuance of stock | $214,833 | |||||||
Common stock, shares issued (in shares) | 22,614 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | ||
Oct. 15, 2014 | Jul. 14, 2014 | Dec. 31, 2014 | Jan. 15, 2015 | Dec. 31, 2013 | Mar. 19, 2015 | |
unit | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Deferred Offering Costs to Date | $4,400,000 | |||||
Deposits Assets, Current | 15,800,000 | |||||
Cash, Uninsured Amount | 14,800,000 | |||||
Acquisitions, period to finalize valuation | 1 year | |||||
Future minimum rental payments to be received from noncancelable operating leases, year ending June 30, 2015 | 3,700,000 | |||||
Future minimum rental payments to be received from noncancelable operating leases, year ending June 30, 2016 | 85,000 | |||||
Stock distribution | 1.00% | 0.63% | ||||
Due to related parties | 3,851,263 | 0 | ||||
Deferred offering costs | 3,618,954 | 0 | ||||
Subsequent Event [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Number of Units | 216 | |||||
Stock distribution | 0.83% | |||||
Advisor [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Maximum reimbursement of organizational and offering costs, percent of offering proceeds | 2.50% | |||||
Organization and offering costs [Member] | Advisor [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Due to related parties | 2,272,325 | 0 | ||||
Fees earned / expenses incurred | 3,006,819 | 0 | ||||
Payment of public offering costs [Member] | Advisor [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Deferred offering costs | ($734,493) | |||||
Buildings [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Real estate investments, useful life | 27 years 6 months | |||||
Building improvements [Member] | Minimum [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Real estate investments, useful life | 3 years | |||||
Building improvements [Member] | Maximum [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Real estate investments, useful life | 27 years 6 months | |||||
Bear Creek Apartments [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Number of Units | 152 | |||||
RRE Oak Hill Holdings (Oak Hill) [Member] | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Number of Units | 360 |
Supplemental_Cash_Flow_Informa2
Supplemental Cash Flow Information (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Non-cash financing and investing activities: | ||
Increase in subscription receivables | $3,819,991 | $0 |
Distribution payable | 259,379 | 0 |
Stock issued from distribution reinvestment plan | 195,542 | 0 |
Stock distributions issued | 214,833 | 0 |
Deferred offering costs | 1,803,098 | 0 |
Due to related parties | 1,467,064 | 0 |
Cash paid during the period for: | ||
Interest | $133,036 | $0 |
Restricted_Cash_Details
Restricted Cash (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | $725,305 | $0 |
Real estate taxes [Member] | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | 128,871 | 0 |
Insurance [Member] | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | 157,600 | 0 |
Capital improvements [Member] | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | $438,834 | $0 |
Rental_Properties_Net_Details
Rental Properties, Net (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Rental Properties, Net: | ||
Land | $6,723,368 | $0 |
Building and improvements | 47,546,786 | 0 |
Furniture, fixtures and equipment | 612,846 | 0 |
Rental properties, gross | 54,883,000 | 0 |
Less: accumulated depreciation | -179,695 | 0 |
Rental properties, net | 54,703,305 | 0 |
Depreciation expense | $179,695 | $0 |
Acquisitions_Summary_of_Acquis
Acquisitions - Summary of Acquisitions (Details) (USD $) | 0 Months Ended | |
Jun. 04, 2014 | Dec. 19, 2014 | |
Bear Creek Apartments [Member] | ||
Business Acquisition [Line Items] | ||
Purchase Price | $9,500,000 | |
Land | 1,888,982 | |
Building and Improvements | 7,060,815 | |
Furniture, Fixture and Equipment | 198,840 | |
Intangible Assets | 351,363 | |
Other Liabilities | -84,732 | |
Fair value assigned | 9,415,268 | |
Oak Hill [Member] | ||
Business Acquisition [Line Items] | ||
Purchase Price | 47,000,000 | |
Land | 4,834,386 | |
Building and Improvements | 40,485,971 | |
Furniture, Fixture and Equipment | 503,582 | |
Intangible Assets | 1,176,061 | |
Other Liabilities | -59,977 | |
Fair value assigned | $46,940,023 |
Acquisitions_Bear_Creek_Detail
Acquisitions - Bear Creek (Details) (USD $) | 0 Months Ended |
Jun. 04, 2014 | |
Advisor [Member] | |
Business Acquisition [Line Items] | |
Acquisition fee | 2.00% |
Bear Creek Apartments [Member] | |
Business Acquisition [Line Items] | |
Number of units | 152 |
Purchase price, excluding closing costs | 9,500,000 |
Rental property: | |
Land | 1,888,982 |
Buildings | 7,060,815 |
Personal property | 198,840 |
Rental property | 9,148,637 |
Acquired intangibles - in-place leases | 351,363 |
Accrued real estate taxes | -69,085 |
Prepaid rents | -163 |
Security deposits | -15,484 |
Fair value assigned | 9,415,268 |
Bear Creek Apartments [Member] | Advisor [Member] | |
Business Acquisition [Line Items] | |
Acquisition fee, percent | 264,239 |
Acquisition fee | 2.00% |
Acquisitions_Oak_Hill_Details
Acquisitions - Oak Hill (Details) (USD $) | 0 Months Ended | |
Jun. 04, 2014 | Dec. 19, 2014 | |
Advisor [Member] | ||
Business Acquisition [Line Items] | ||
Acquisition fee | 2.00% | |
Oak Hill [Member] | ||
Business Acquisition [Line Items] | ||
Number of units | 360 | |
Purchase price, excluding closing costs | $47,000,000 | |
Rental property: | ||
Land | 4,834,386 | |
Buildings | 40,485,971 | |
Personal property | 503,582 | |
Rental property | 45,823,939 | |
Acquired intangibles - in-place leases | 1,176,061 | |
Accrued real estate taxes | 0 | |
Prepaid rents | -13,162 | |
Security deposits | -46,815 | |
Fair value assigned | 46,940,023 | |
Oak Hill [Member] | Advisor [Member] | ||
Business Acquisition [Line Items] | ||
Acquisition fee, percent | $1,100,000 | |
Acquisition fee | 2.00% |
Acquisitions_Summary_of_Revenu
Acquisitions - Summary of Revenues, Net Losses and Acquisition Costs (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Business Acquisition [Line Items] | ||
Total Revenues | $999,794 | $451 |
Net Loss | -3,766,892 | 451 |
Acquisition costs | 1,588,944 | 0 |
Bear Creek Apartments [Member] | ||
Business Acquisition [Line Items] | ||
Total Revenues | 821,576 | 0 |
Net Loss | -748,500 | 0 |
Acquisition costs | 329,709 | 0 |
Oak Hill [Member] | ||
Business Acquisition [Line Items] | ||
Total Revenues | 170,097 | 0 |
Net Loss | -82,184 | 0 |
Acquisition costs | $1,259,235 | $0 |
Identified_Intangible_Assets_N1
Identified Intangible Assets, Net (Details) (Acquired in-place leases [Member], USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Acquired in-place leases [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Acquired in-place leases, net | $1,500,000 | $0 |
Acquired in-place leases, accumulated amortization | 351,363 | 0 |
Weighted-average remaining life of rental leases | 8 months | |
Expected amortization for the rental leases for the next year | 1,200,000 | |
Amortization | $351,363 |
Mortgage_Notes_Payable_Summary
Mortgage Notes Payable - Summary of Mortgage Notes Payable (Details) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Jun. 04, 2014 | Dec. 19, 2014 | |
Debt Instrument [Line Items] | ||||
Balance outstanding | $38,540,000 | $0 | ||
Mortgages [Member] | Bear Creek [Member] | ||||
Debt Instrument [Line Items] | ||||
Balance outstanding | 7,465,000 | 7,500,000 | ||
Interest Rate | 2.54% | |||
Average Monthly Debt Service | 15,901 | |||
Interest Expense | 110,302 | |||
Mortgages [Member] | Oak Hill Mortgage Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Balance outstanding | 31,075,000 | 31,100,000 | ||
Interest Rate | 2.07% | |||
Average Monthly Debt Service | 54,323 | |||
Interest Expense | $36,557 |
Mortgage_Notes_Payable_Annual_
Mortgage Notes Payable - Annual Principal Payments on Mortgage Notes Payable (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Debt Disclosure [Abstract] | ||
2015 | $0 | |
2016 | 0 | |
2017 | 590,509 | |
2018 | 680,324 | |
2019 | 730,909 | |
Thereafter | 36,538,258 | |
Mortgage notes payable | $38,540,000 | $0 |
Mortgage_Notes_Payable_Narrati
Mortgage Notes Payable - Narrative (Details) (USD $) | 0 Months Ended | |||
Jun. 04, 2014 | Dec. 19, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | |
Debt Instrument [Line Items] | ||||
Mortgage notes payable | $38,540,000 | $0 | ||
Mortgages [Member] | Bear Creek [Member] | ||||
Debt Instrument [Line Items] | ||||
Mortgage notes payable | 7,500,000 | 7,465,000 | ||
Interest rate at period end | 2.54% | |||
Monthly required principal and interest payment | 23,432 | |||
Mortgages [Member] | Bear Creek [Member] | LIBOR [Member] | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable interest rate | 2.37% | |||
Mortgages [Member] | Oak Hill Mortgage Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Mortgage notes payable | 31,100,000 | 31,075,000 | ||
Interest rate at period end | 2.07% | |||
Monthly required principal and interest payment | $109,047 | |||
Mortgages [Member] | Oak Hill Mortgage Loan [Member] | LIBOR [Member] | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable interest rate | 1.90% |
Deferred_Financing_Costs_Detai
Deferred Financing Costs (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Amortization of deferred financing costs | $9,581 | $0 |
2015 | 58,112 | |
2016 | 62,137 | |
2017 | 61,607 | |
2018 | 60,653 | |
2019 | 59,547 | |
Thereafter | 279,727 | |
Deferred financing costs, net | $581,783 | $0 |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Loss (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | $0 | |
Unrealized loss on designated hedge | -34,468 | 0 |
Ending balance | ($34,468) | $0 |
Related_Party_Transactions_Nar
Related Party Transactions - Narrative (Details) (USD $) | 12 Months Ended | 0 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | Jun. 04, 2014 | |
Related Party Transaction [Line Items] | |||
Interest paid | $133,036 | $0 | |
Insurance pool, loss limit | 2,500,000 | ||
Catastrophic insurance, losses in excess of insurance pool, limit | 85,000,000 | ||
Advisor [Member] | |||
Related Party Transaction [Line Items] | |||
Term of Advisory Agreement | 1 year | ||
Acquisition fee | 2.00% | ||
Monthly asset management fee, percent | 0.08% | ||
Disposition fee, percent | 2.00% | ||
Debt financing fee, percent | 0.50% | ||
Maximum reimbursement of organizational and offering costs, percent of offering proceeds | 2.50% | ||
Advisor [Member] | Bridge Loan [Member] | |||
Related Party Transaction [Line Items] | |||
Proceeds from related party bridge loan | 1,300,000 | ||
Advisor [Member] | LIBOR [Member] | Bridge Loan [Member] | |||
Related Party Transaction [Line Items] | |||
Basis spread on variable interest rate | 3.00% | ||
Interest paid | $2,242 | ||
Manager [Member] | |||
Related Party Transaction [Line Items] | |||
Property management fee, percent | 4.50% | ||
Construction management fee, percent | 5.00% | ||
Debt servicing fee, percent | 2.75% | ||
Resource Securities [Member] | |||
Related Party Transaction [Line Items] | |||
Selling commission, percent | 7.00% | ||
Dealer-manager fee, percent | 3.00% |
Related_Party_Transactions_Fee
Related Party Transactions - Fees Earned/Expenses Incurred and Amounts Payable to Related Parties (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Related Party Transaction [Line Items] | ||
Due from related party | $34,025 | $0 |
Due to related parties | 3,851,263 | 0 |
Graphic Images [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties | 81,424 | 0 |
Resource Securities [Member] | Selling commissions and dealer-manager fees [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties | 358,715 | 0 |
Fees earned / expenses incurred | 4,399,256 | 0 |
RAI [Member] | Resource Securities [Member] | ||
Related Party Transaction [Line Items] | ||
Due from related party | 3,944 | 0 |
RAI [Member] | Insurance funds held in escrow [Member] | ||
Related Party Transaction [Line Items] | ||
Due from related party | 30,081 | 0 |
Advisor [Member] | Acquisition fees [Member] | ||
Related Party Transaction [Line Items] | ||
Fees earned / expenses incurred | 1,354,551 | 0 |
Advisor [Member] | Asset management fees [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties | 28,456 | 0 |
Fees earned / expenses incurred | 88,253 | 0 |
Advisor [Member] | Debt financing fees [Member] | ||
Related Party Transaction [Line Items] | ||
Fees earned / expenses incurred | 192,700 | 0 |
Advisor [Member] | Organization and offering costs [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties | 2,272,325 | 0 |
Fees earned / expenses incurred | 3,006,819 | 0 |
Advisor [Member] | Overhead allocation [Member] | ||
Related Party Transaction [Line Items] | ||
Fees earned / expenses incurred | 1,115,426 | 0 |
Advisor [Member] | Operating expense reimbursements [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties | 1,145,784 | 0 |
Advisor [Member] | Interest expense [Member] | ||
Related Party Transaction [Line Items] | ||
Fees earned / expenses incurred | 2,242 | 0 |
Manager [Member] | Property management fees [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties | 6,391 | 0 |
Fees earned / expenses incurred | 39,242 | 0 |
Manager [Member] | Operating expense reimbursements [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties | 39,592 | 0 |
Fees earned / expenses incurred | 54,123 | 0 |
Other [Member] | Graphic Images [Member] | ||
Related Party Transaction [Line Items] | ||
Fees earned / expenses incurred | $364,972 | $0 |
Equity_Narrative_Details
Equity - Narrative (Details) (USD $) | 12 Months Ended | 0 Months Ended | |||||
Dec. 31, 2014 | Jun. 05, 2014 | Nov. 13, 2014 | Nov. 19, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 14, 2014 | |
Class of Stock [Line Items] | |||||||
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 | |||||
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 | |||||
Preferred stock, shares issued (in shares) | 0 | 0 | |||||
Preferred stock, shares outstanding (in shares) | 0 | 0 | |||||
Common stock, shares outstanding (in shares) | 4,759,567 | 15,000 | |||||
Common stock, par value (in dollars per share) | $0.01 | $0.01 | |||||
Common stock | $47,596 | $150 | |||||
Distributions declared | 328,785 | ||||||
Net Cash Distributions | 113,952 | ||||||
Common stock issued through distribution reinvestment plan | 0 | ||||||
Common Stock, Authorized Stock Distribution, Par Value Per Share | $0.01 | ||||||
Advisor [Member] | |||||||
Class of Stock [Line Items] | |||||||
Common stock, shares outstanding (in shares) | 117,778 | ||||||
Common stock | 1,100,000 | ||||||
Convertible Stock [Member] | |||||||
Class of Stock [Line Items] | |||||||
Common stock, shares outstanding (in shares) | 50,000 | 50,000 | 0 | ||||
Common stock, par value (in dollars per share) | $0.01 | $0.01 | |||||
Common stock conversion terms, percent of paid distributions equal to price at which shares were originally sold | 100.00% | ||||||
Percent annual return on shares at price equal to distributions paid | 7.00% | ||||||
Common stock | 500 | 500 | |||||
Convertible Stock [Member] | Advisor [Member] | |||||||
Class of Stock [Line Items] | |||||||
Common stock, shares outstanding (in shares) | 50,000 | ||||||
Common stock, par value (in dollars per share) | $0.01 | ||||||
Record Date of June 30, 2014 [Member] | |||||||
Class of Stock [Line Items] | |||||||
Authorized stock distribution | 0.00625 | ||||||
Authorized stock distribution, percent of common stock outstanding | 0.63% | ||||||
Record Date of September 30, 2014 [Member] | |||||||
Class of Stock [Line Items] | |||||||
Distributions declared | 29,694 | ||||||
Net Cash Distributions | 11,197 | ||||||
Authorized stock distribution | 0.01 | ||||||
Authorized stock distribution, percent of common stock outstanding | 1.00% | ||||||
Common Stock, Dividends, Per Share, Cash Paid | $0.00 | ||||||
Record Date, Every Day in the Period from December 31, 2014, through January 29, 2015 [Member] | |||||||
Class of Stock [Line Items] | |||||||
Net Cash Distributions | 259,379 | ||||||
Common Stock, Dividends, Per Share, Cash Paid | $0.00 | ||||||
Record Date of December 31, 2014 [Member] | |||||||
Class of Stock [Line Items] | |||||||
Authorized stock distribution | 0.008333 | ||||||
Authorized stock distribution, percent of common stock outstanding | 0.83% | ||||||
Retained Earnings [Member] | |||||||
Class of Stock [Line Items] | |||||||
Common stock issued through distribution reinvestment plan | -214,833 | ||||||
Retained Earnings [Member] | Record Date of September 30, 2014 [Member] | |||||||
Class of Stock [Line Items] | |||||||
Common stock issued through distribution reinvestment plan | ($18,497) |
Equity_Schedule_of_Common_Stoc
Equity - Schedule of Common Stock (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Class of Stock [Line Items] | ||
Shares Issued | 4,759,567 | 15,000 |
Gross Proceeds | $47,113,187 | |
Shares Issued Through Distribution Reinvestment Plan, Gross Proceeds | 46,748,354 | |
Initial public offering [Member] | ||
Class of Stock [Line Items] | ||
Shares Issued | 4,702,399 | |
Gross Proceeds | 46,748,354 | |
Stock Distribution [Member] | ||
Class of Stock [Line Items] | ||
Shares Issued | 19,554 | |
Gross Proceeds | 0 | |
Distribution reinvestment plan [Member] | ||
Class of Stock [Line Items] | ||
Shares Issued | 22,614 | |
Shares Issued Through Distribution Reinvestment Plan, Gross Proceeds | 214,833 | |
Advisor's initial investment [Member] | ||
Class of Stock [Line Items] | ||
Shares Issued | 15,000 | |
Gross Proceeds | $150,000 | |
Conversion of stock | 5,000 |
Equity_Schedule_of_Dividend_Di
Equity - Schedule of Dividend Distributions (Details) (USD $) | 12 Months Ended | 0 Months Ended | |||
Dec. 31, 2014 | Jun. 05, 2014 | Oct. 06, 2014 | Oct. 30, 2014 | Nov. 13, 2014 | |
Class of Stock [Line Items] | |||||
Distributions invested in shares of Common Stock | $0 | ||||
Net Cash Distributions | 113,952 | ||||
Total Aggregate Distributions | 328,785 | ||||
Record Date of June 5, 2014 [Member] | |||||
Class of Stock [Line Items] | |||||
Per Common Share | $0.00 | ||||
Net Cash Distributions | 5,560 | ||||
Total Aggregate Distributions | 10,625 | ||||
Record Date of August 31, 2014 [Member] | |||||
Class of Stock [Line Items] | |||||
Per Common Share | $0.00 | ||||
Net Cash Distributions | 8,844 | ||||
Total Aggregate Distributions | 19,930 | ||||
Record Date of September 30, 2014 [Member] | |||||
Class of Stock [Line Items] | |||||
Per Common Share | $0.00 | ||||
Net Cash Distributions | 11,197 | ||||
Total Aggregate Distributions | 29,694 | ||||
Record Date of October 30, 2014 [Member] | |||||
Class of Stock [Line Items] | |||||
Per Common Share | $0.00 | ||||
Net Cash Distributions | 13,970 | ||||
Total Aggregate Distributions | 41,113 | ||||
Record Date of November 26, 2014 [Member] | |||||
Class of Stock [Line Items] | |||||
Per Common Share | $0.00 | ||||
Net Cash Distributions | 15,113 | ||||
Total Aggregate Distributions | 46,326 | ||||
Record Date of December 30, 2014 [Member] | |||||
Class of Stock [Line Items] | |||||
Per Common Share | $0.00 | ||||
Net Cash Distributions | 59,268 | ||||
Total Aggregate Distributions | 181,097 | ||||
Retained Earnings [Member] | |||||
Class of Stock [Line Items] | |||||
Distributions invested in shares of Common Stock | 214,833 | ||||
Retained Earnings [Member] | Record Date of June 5, 2014 [Member] | |||||
Class of Stock [Line Items] | |||||
Distributions invested in shares of Common Stock | 5,065 | ||||
Retained Earnings [Member] | Record Date of August 31, 2014 [Member] | |||||
Class of Stock [Line Items] | |||||
Distributions invested in shares of Common Stock | 11,086 | ||||
Retained Earnings [Member] | Record Date of September 30, 2014 [Member] | |||||
Class of Stock [Line Items] | |||||
Distributions invested in shares of Common Stock | 18,497 | ||||
Retained Earnings [Member] | Record Date of October 30, 2014 [Member] | |||||
Class of Stock [Line Items] | |||||
Distributions invested in shares of Common Stock | 27,143 | ||||
Retained Earnings [Member] | Record Date of November 26, 2014 [Member] | |||||
Class of Stock [Line Items] | |||||
Distributions invested in shares of Common Stock | 31,213 | ||||
Retained Earnings [Member] | Record Date of December 30, 2014 [Member] | |||||
Class of Stock [Line Items] | |||||
Distributions invested in shares of Common Stock | $121,829 |
Fair_Value_Measures_and_Disclo2
Fair Value Measures and Disclosures (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Additional Fair Value Elements [Abstract] | ||
Carrying Amount - Mortgage notes payable | $38,540,000 | $0 |
Fair Value - Mortgage notes payable | 38,540,000 | |
Fair Value, Measurements, Recurring [Member] | ||
Assets, Fair Value Disclosure [Abstract] | ||
Assets, Fair Value Disclosure | 53,002 | 0 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Assets, Fair Value Disclosure [Abstract] | ||
Assets, Fair Value Disclosure | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Assets, Fair Value Disclosure [Abstract] | ||
Assets, Fair Value Disclosure | 53,002 | 0 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Assets, Fair Value Disclosure [Abstract] | ||
Assets, Fair Value Disclosure | 0 | 0 |
Interest Rate Cap [Member] | Fair Value, Measurements, Recurring [Member] | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative Asset | 53,002 | 0 |
Interest Rate Cap [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative Asset | 0 | 0 |
Interest Rate Cap [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative Asset | 53,002 | 0 |
Interest Rate Cap [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Assets, Fair Value Disclosure [Abstract] | ||
Derivative Asset | $0 | $0 |
Derivatives_and_Hedging_Activi2
Derivatives and Hedging Activities - Outstanding Interest Rate Derivatives (Details) (Interest Rate Cap [Member], USD $) | Dec. 31, 2014 |
derivative_contract | |
Interest Rate Cap [Member] | |
Derivatives, Fair Value [Line Items] | |
Number of Instruments | 2 |
Notional Amount | $38,540,000 |
Derivatives_and_Hedging_Activi3
Derivatives and Hedging Activities - Fair Value of Derivative Instruments and Balance Sheet Classification (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2015 | |
Derivatives, Fair Value [Line Items] | |||
Interest expense | $158,842 | $0 | |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Scenario, Forecast [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Interest expense | 552 | ||
Interest Rate Cap [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Asset Derivatives - Interest rate cap, Fair Value | 53,002 | 0 | |
Liabilities Derivatives - Interest rate cap, Fair Value | $0 | $0 |
Operating_Expense_Limitation_D
Operating Expense Limitation (Details) | 12 Months Ended |
Dec. 31, 2014 | |
Other Income and Expenses [Abstract] | |
Limitation on total operating expenses, percentage of average invested assets for the four most recently completed fiscal quarter | 2.00% |
Limitation on total operating expenses, percentage of net income for the four most recently completed fiscal quarter | 25.00% |
Subsequent_Events_Details
Subsequent Events (Details) (Subsequent Event [Member], USD $) | 0 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Mar. 24, 2015 | Mar. 19, 2015 | Jan. 26, 2015 | Feb. 19, 2015 |
Subsequent Event [Line Items] | ||||
Common Stock, Dividends, Per Share, Declared | $0.00 | $0.00 | ||
Number of units | 216 | |||
Purchase Price | $32,500 | |||
Record Date of March 31, 2015 [Member] | ||||
Subsequent Event [Line Items] | ||||
Authorized stock distribution | 0.005 | |||
Authorized stock distribution, percent of common stock outstanding | 0.50% |
Schedule_III_Real_Estate_and_A1
Schedule III Real Estate and Accumulated Depreciation - Schedule of Real Estate Owned (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | |||
Encumbrances | $0 | ||
Initial cost to Company | 54,972,576 | ||
Cost capitalized subsequent to acquisition | -89,576 | ||
Gross Amount at which carried at close of period | 54,883,000 | 0 | 0 |
Accumulated Depreciation | -179,695 | 0 | 0 |
Residential, Dallas, Texas [Member] | |||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | |||
Encumbrances | 0 | ||
Initial cost to Company | 9,148,637 | ||
Cost capitalized subsequent to acquisition | -94,229 | ||
Gross Amount at which carried at close of period | 9,054,408 | ||
Accumulated Depreciation | -179,695 | ||
Residential, Fort Worth, Texas [Member] | |||
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items] | |||
Encumbrances | 0 | ||
Initial cost to Company | 45,823,939 | ||
Cost capitalized subsequent to acquisition | 4,653 | ||
Gross Amount at which carried at close of period | 45,828,592 | ||
Accumulated Depreciation | $0 |
Schedule_III_Real_Estate_and_A2
Schedule III Real Estate and Accumulated Depreciation - Reconciliations (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
SEC Schedule III, Real Estate and Accumulated Depreciation Disclosure [Abstract] | ||
SEC Schedule III, Real Estate, Other Additions | $0 | $0 |
Investments in real estate: | ||
Balance at beginning of the year | 0 | 0 |
Acquisitions | 54,972,576 | 0 |
Improvements, etc. | 109,264 | 0 |
Dispositions during the period: | -198,840 | 0 |
Balance at end of year | 54,883,000 | 0 |
Accumulated Depreciation: | ||
Balance at beginning of year | 0 | 0 |
Additions charged to expenses | 179,695 | 0 |
Balance at the end of year | $179,695 | $0 |