Inland Residential Properties Trust 10-Q 14 May 15 2015 Q1 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information (USD $)	3 Months Ended
	Mar. 31, 2015	13-May-15
Document And Entity Information
Entity Registrant Name	Inland Residential Properties Trust, Inc.
Entity Central Index Key	1595627
Document Type	10-Q
Document Period End Date	31-Mar-15
Amendment Flag	FALSE
Current Fiscal Year End Date	-19
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Public Float		$200,000
Entity Common Stock, Shares Outstanding		8,000
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2015

Consolidated_Balance_Sheets

Consolidated Balance Sheets (USD $)	Mar. 31, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Cash and cash equivalents	$346,078	$232,635
Deferred offering costs	0	2,613,311
Other assets	57,411	19,867
Total assets	403,489	2,865,813
Liabilities:
Accounts payable	1,079,089	1,318,167
Due to affiliates	2,668,579	1,532,667
Total liabilities	3,747,668	2,850,834
Preferred stock
Common stock		8
Class A Common stock	8
Class T Common stock
Additional paid in capital	-3,005,775	199,992
Retained earnings (deficit)	-338,412	-185,021
Total stockholders (deficit) equity	-3,344,179	14,979
Total liabilities and stockholders (deficit) equity	$403,489	$2,865,813

Consolidated_Balance_Sheets_Pa

Consolidated Balance Sheets (Parenthetical) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Preferred stock, par value	$0.00	$0.00
Preferred stock, shares authorized	50,000,000	50,000,000
Preferred stock, shares outstanding	0	0
Common stock, par value	$0.00	$0.00
Common stock, shares outstanding	8,000	8,000
Class A common stock, par value	$0.00	$0.00
Class A common stock, shares authorized	320,000,000	320,000,000
Class A common stock, shares outstanding	8,000	8,000
Class T common stock, par value	$0.00	$0.00
Class T common stock, shares authorized	80,000,000	80,000,000
Class T common stock, shares outstanding	0	0
Offering costs of additional paid in capital	$3,205,767	$0

Consolidated_Statements_of_Ope

Consolidated Statements of Operations (Unaudited) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Expenses:
General and administrative expenses	$135,325	$0
Organization costs	18,066	3,908
Net loss	$153,391	$3,908
Net loss per common share, basic and diluted	($19.17)	($0.49)
Weighted average number of common shares outstanding, basic and diluted	8,000	8,000

Consolidated_Shareholders_Equi

Consolidated Shareholders Equity (Unaudited) (USD $)	Common Stock	Additional Paid-In Capital	Retained Earnings / Accumulated Deficit	Total
Balance beginning (in shares) at Dec. 31, 2014	8,000
Balance beginning at Dec. 31, 2014	$8	$199,992	($185,021)	$14,979
Offering costs	0	-3,205,767	0	-3,205,767
Net loss	0	0	-153,391	-153,391
Balance at Mar. 31, 2015	$8	($3,005,775)	($338,412)	($3,344,179)
Balance (in shares) at Mar. 31, 2015	8,000

Consolidated_Statements_of_Cas

Consolidated Statements of Cash Flows (Unaudited) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Cash flows from operating activities:
Net loss	($153,391)	($3,908)
Adjustments to reconcile net loss to net cash used in operating activities:
Accounts payable	31,383	-23,505
Due to affiliates	5,420	27,391
Other assets	-42,910	0
Net cash flows used in operating activities	-159,498	-22
Cash flows from financing activities:
Payment of offering costs	-927,059	0
Advances from sponsor	1,200,000	0
Net cash flows provided by financing activities	272,941	0
Net increase (decrease) in cash and cash equivalents	113,443	-22
Cash and cash equivalents, at beginning of the period	232,635	500,000
Cash and cash equivalents, at end of period	346,078	499,978
Supplemental disclosure of noncash financing activities:
Accrued offering expenses	$334,603	$259,015

Organization

Organization	3 Months Ended
	Mar. 31, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization	(1)  Organization
	Inland Residential Properties Trust, Inc. was formed on December 19, 2013 to acquire and manage a portfolio of multifamily properties located primarily in the top 100 United States metropolitan statistical areas, which generally contain populations greater than 500,000 people. Effective July 14, 2014, the Company changed its name from “Inland Retail Properties Trust V, Inc.” to “Inland Residential Properties Trust, Inc.” Inland Real Estate Investment Corporation (the “Sponsor”) is the sole stockholder of the Company. The Company entered into a Business Management Agreement (the “Business Management Agreement”) with Inland Residential Business Manager & Advisor, Inc. (the “Business Manager”), an affiliate of the Company, to be the Business Manager to the Company.
	The Company is authorized to sell up to $1,000,000,000 of shares of common stock which consists of Class A common stock, $.001 par value per share (“Class A Shares”), at a price of $25.00 per share and Class T common stock, $.001 par value per share (“Class T Shares”), at $23.95 per share, in any combination, in an initial “reasonable best efforts” offering (the “Offering”) which commenced on February 17, 2015. The Company is also authorized to issue up to $190,000,000 of Class A Shares at a price of $23.75 per share pursuant to the Company’s distribution reinvestment plan (“DRP”). In addition, the Company declared that each share of common stock that was issued and outstanding immediately prior to the effective date of the amendment of the Company’s charter converted into one issued and outstanding share of Class A common stock. As a result, the 8,000 shares of common stock the Sponsor owned as of December 31, 2014, was converted into 8,000 shares of Class A common stock.
	No shares of common stock will be sold unless subscriptions for at least $2,000,000, the minimum offering, have been obtained within one year after commencement of the Offering.
	The Company intends to elect to be taxed as a real estate investment trust (“REIT”) under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”), beginning with the year ending December 31, 2015 or the Company’s first year of material operations. In order to maintain the Company’s qualification as a REIT, the Company is required to, among other things, make aggregate annual distributions (other than capital gain dividends) to the Company’s stockholders of at least 90% of the Company’s annual REIT taxable income (which does not equal net income as calculated in accordance with U.S. GAAP) determined without regard to the deduction for dividends paid and excluding net capital gain, and meet certain tests regarding the nature of the Company’s income and assets.
	If the Company qualifies for taxation as a REIT, the Company generally will not be subject to U.S. federal income tax to the extent it meets certain criteria and distributes its REIT taxable income to its stockholders. Even if the Company qualifies for taxation as a REIT, the Company may be subject to (1) certain state and local taxes on its income, property or net worth, and (2) U.S. federal income and excise taxes on its undistributed income, if any income remains undistributed. The Company intends to operate in a manner that allows the Company to meet the requirements for taxation as a REIT, including creating taxable REIT subsidiaries to hold assets that generate income that would not be consistent with the rules applicable to qualification as a REIT if held directly by the REIT. If the Company were to fail to meet these requirements, it could be subject to U.S. federal income tax on the Company’s taxable income at regular corporate rates. The Company would not be able to deduct distributions paid to stockholders in any year in which it fails to qualify as a REIT. The Company will also be disqualified for the four taxable years following the year during which qualification was lost unless the Company is entitled to relief under specific statutory provisions.
	The Company provides the following programs to facilitate investment in the Company’s shares and to provide limited liquidity for stockholders.
	The Company provides stockholders with the option to purchase additional shares from the Company by automatically reinvesting distributions through the DRP, subject to certain share ownership restrictions. For participants in the DRP, distributions paid on Class A Shares and Class T Shares, as applicable, will be used to purchase Class A Shares. Class T Shares will not be issued pursuant to the DRP. Such purchases under the DRP will not be subject to selling commissions, dealer manager fees, distribution and stockholder servicing fees or reimbursement of issuer costs in connection with shares of common stock issued through the DRP and are made at a price of $23.75 per Class A Share.
	The Company may purchase shares under the share repurchase program (“SRP”), if the Company chooses to repurchase them. Subject to funds being available, the Company will limit the number of shares repurchased during any calendar year to 5% of the number of shares of common stock outstanding on December 31st of the previous calendar year. Funding for the SRP will come from proceeds that the Company receives from the DRP.
	The fiscal year-end of the Company is December 31.

Summary_Of_Significant_Account

Summary Of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2015
Accounting Policies [Abstract]
Summary Of Significant Accounting Policies	(2)  Summary of Significant Accounting Policies
	General
	The accompanying consolidated financial statements have been prepared in accordance with U.S. GAAP and require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
	Consolidation
	The accompanying consolidated financial statements include the accounts of the Company, as well as Inland Residential Operating Partnership, L.P., of which the Company is the sole general partner. All intercompany balances and transactions have been eliminated in consolidation.
	Offering and Organization Costs
	Costs associated with the Offering are deferred and charged against the gross proceeds of the Offering upon the sale of shares. Formation and organizational costs are expensed as incurred.
	Cash and Cash Equivalents
	The Company considers all demand deposits, money market accounts and all short term investments with a maturity of three months or less, at the date of purchase, to be cash equivalents. The Company maintains its cash and cash equivalents at financial institutions. The account balance may periodically exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance coverage and, as a result, there could be a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. The Company believes that the risk will not be significant, as the Company does not anticipate the financial institutions’ non-performance.
	Income Taxes
	Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences and are attributable to (1) differences between the financial statement carrying amounts and their respective tax bases, and (2) net operating losses. A valuation allowance is established for uncertainties relating to realization of deferred tax assets. As of March 31, 2015, the Company had a deferred tax asset of approximately $135,000, for income tax purposes, for which a valuation allowance was recorded in the same amount due to the uncertainty of realization.
	Recent Accounting Pronouncements
	In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective, although it will not affect the accounting for rental related revenues. ASU No. 2014-09 is currently effective for financial statements issued for fiscal years and interim period beginning after December 31, 2016. Early adoption is prohibited. In April 2015, the FASB voted to propose an amendment to the ASU, deferring the effective date one year to annual reporting periods beginning after December 15, 2017 for public entities. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU No. 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting.
	In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The ASU requires that debt issuance costs be deducted from the carrying value of the financial liability and not recorded as separate assets, classified as deferred financing costs. The ASU is effective for public entities for financial statements issued for fiscal years beginning after December 15, 2015. Early adoption is permitted for financial statements that have not been previously issued and will be applied on a retrospective basis. The Company does not expect adoption of this ASU to have a material impact on its consolidated financial statements.

Income_Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2015
Income Tax Disclosure [Abstract]
Income Taxes	(3)  Income Tax
	The Company had no uncertain tax positions as of March 31, 2015. The Company expects no significant increases or decreases in uncertain tax positions due to changes in tax positions within one year of March 31, 2015. The Company has no interest or penalties relating to income taxes recognized in the consolidated statements of operations for the three months ended March 31, 2015 and 2014. As of March 31, 2015, the tax returns for the calendar years 2014 and 2013 remain subject to examination by U.S. and various state and local tax jurisdictions.

Transactions_With_Related_Part

Transactions With Related Parties	3 Months Ended
	Mar. 31, 2015
Notes to Financial Statements
Transactions With Related Parties	(4)  Transactions with Related Parties
	The Company’s Sponsor contributed $200,000 to the capital of the Company for which it received 8,000 shares of common stock which were subsequently converted into 8,000 shares of Class A common stock. Since inception, the Sponsor has also advanced $1,500,000 in cash to the Company, which is included in due to affiliates on the accompanying consolidated balance sheets, to partially fund formation, offering and organization costs.
	As of March 31, 2015, the Company had incurred $3,268,863 of offering and organization costs. Pursuant to the terms of the Offering, the Business Manager will repay all offering and organization expenses (excluding selling commissions) in excess of 2.0% of the gross proceeds of the Offering or all offering and organization expenses (including selling commissions) which together exceed 10.75% of the gross offering proceeds from Class A Shares and 6.25% of the gross offering proceeds from Class T Shares, sold in the primary offering over the life of the Offering. In the event that the minimum offering amount is not received and accepted, an affiliate of the Business Manager will bear the related costs of the Offering.
	The following table summarizes the Company’s related party transactions for three months ended March 31, 2015 and 2014 and as of March 31, 2015 and December 31, 2014.
		Three Months Ended March 31,				Unpaid Amounts as of
		2015		2014		March 31,		December 31,
						2015		2014
	General and administrative expenses (a)	$	59,079	$	—	$	41,185	$	41,132
	Organization costs (b)		—		1,077		—		—
	Offering costs (c)		61,818		7,022		61,818		125,959
	Sponsor advances and payments by the Sponsor for services provided to the Company (d)		1,200,000		—		2,565,576		1,365,576
	(a)	The Business Manager and its related parties are entitled to reimbursement for certain general and administrative expenses relating to the Company’s administration. Such costs are included in general and administrative expenses in the accompanying consolidated statements of operations. Unpaid amounts are included in due to affiliates in the accompanying consolidated balance sheets.
	(b)	The Business Manager or its affiliates will pay or reimburse any organization or offering costs, including any issuer costs, that exceed 10.75% of the gross offering proceeds from Class A Shares, and 6.25% of the gross offering proceeds from Class T Shares sold in the “reasonable best efforts” offering over the life of the Offering.
	(c)	The Company will reimburse the Sponsor and its affiliates for costs and other expenses of the Offering that they pay on the Company’s behalf.  Offering costs are offset against the stockholder’s equity accounts.  Unpaid amounts are included in due to affiliates in the accompanying consolidated balance sheets.
	(d)	This amount on the accompanying consolidated balance sheets contains non-interest bearing advances made by the Sponsor which will be repaid when the Company receives equity proceeds upon receipt and acceptance of the minimum offering amount.

Summary_Of_Significant_Account1

Summary Of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2015
Accounting Policies [Abstract]
General	General
	The accompanying consolidated financial statements have been prepared in accordance with U.S. GAAP and require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
Consolidation	Consolidation
	The accompanying consolidated financial statements include the accounts of the Company, as well as Inland Residential Operating Partnership, L.P., of which the Company is the sole general partner. All intercompany balances and transactions have been eliminated in consolidation.
Offering and Organization Costs	Offering and Organization Costs
	Costs associated with the Offering are deferred and charged against the gross proceeds of the Offering upon the sale of shares. Formation and organizational costs are expensed as incurred.
Cash and Cash Equivalents	Cash and Cash Equivalents
	The Company considers all demand deposits, money market accounts and all short term investments with a maturity of three months or less, at the date of purchase, to be cash equivalents. The Company maintains its cash and cash equivalents at financial institutions. The account balance may periodically exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance coverage and, as a result, there could be a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. The Company believes that the risk will not be significant, as the Company does not anticipate the financial institutions’ non-performance.
Income Taxes	Income Taxes
	Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences and are attributable to (1) differences between the financial statement carrying amounts and their respective tax bases, and (2) net operating losses. A valuation allowance is established for uncertainties relating to realization of deferred tax assets. As of March 31, 2015, the Company had a deferred tax asset of approximately $135,000, for income tax purposes, for which a valuation allowance was recorded in the same amount due to the uncertainty of realization.
Recent Accounting Pronouncements	Recent Accounting Pronouncements
	In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective, although it will not affect the accounting for rental related revenues. ASU No. 2014-09 is currently effective for financial statements issued for fiscal years and interim period beginning after December 31, 2016. Early adoption is prohibited. In April 2015, the FASB voted to propose an amendment to the ASU, deferring the effective date one year to annual reporting periods beginning after December 15, 2017 for public entities. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU No. 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting.
	In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The ASU requires that debt issuance costs be deducted from the carrying value of the financial liability and not recorded as separate assets, classified as deferred financing costs. The ASU is effective for public entities for financial statements issued for fiscal years beginning after December 15, 2015. Early adoption is permitted for financial statements that have not been previously issued and will be applied on a retrospective basis. The Company does not expect adoption of this ASU to have a material impact on its consolidated financial statements.

Income_Taxes_Policies

Income Taxes (Policies)	3 Months Ended
	Mar. 31, 2015
Income Tax Disclosure [Abstract]
Income Tax	(3)  Income Tax
	The Company had no uncertain tax positions as of March 31, 2015. The Company expects no significant increases or decreases in uncertain tax positions due to changes in tax positions within one year of March 31, 2015. The Company has no interest or penalties relating to income taxes recognized in the consolidated statements of operations for the three months ended March 31, 2015 and 2014. As of March 31, 2015, the tax returns for the calendar years 2014 and 2013 remain subject to examination by U.S. and various state and local tax jurisdictions.

Transactions_With_Related_Part1

Transactions With Related Parties (Tables)	3 Months Ended
	Mar. 31, 2015
Notes to Financial Statements
Related party transactions summary		Three Months Ended March 31,				Unpaid Amounts as of
		2015		2014		March 31,		December 31,
						2015		2014
	General and administrative expenses (a)	$	59,079	$	—	$	41,185	$	41,132
	Organization costs (b)		—		1,077		—		—
	Offering costs (c)		61,818		7,022		61,818		125,959
	Sponsor advances and payments by the Sponsor for services provided to the Company (d)		1,200,000		—		2,565,576		1,365,576
	(a)	The Business Manager and its related parties are entitled to reimbursement for certain general and administrative expenses relating to the Company’s administration. Such costs are included in general and administrative expenses in the accompanying consolidated statements of operations. Unpaid amounts are included in due to affiliates in the accompanying consolidated balance sheets.
	(b)	The Business Manager or its affiliates will pay or reimburse any organization or offering costs, including any issuer costs, that exceed 10.75% of the gross offering proceeds from Class A Shares, and 6.25% of the gross offering proceeds from Class T sold in the “best efforts” offering over the life of the Offering.
	(c)	The Company will reimburse the Sponsor and its affiliates for costs and other expenses of the Offering that they pay on the Company’s behalf.  Offering costs are offset against the stockholder’s equity accounts.  Unpaid amounts are included in due to affiliates in the accompanying consolidated balance sheets.
	(d)	This amount on the accompanying consolidated balance sheets contains non-interest bearing advances made by the Sponsor which will be repaid when the Company receives equity proceeds upon achieving the minimum offering.

Organization_Details_Narrative

Organization (Details Narrative) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Company authorized to sell shares of common stock	$1,000,000,000	$1,000,000,000
Class A common stock, authorized	320,000,000	320,000,000
Class T common stock, authorized	80,000,000	80,000,000
Per share price, Class A	$25
Per share price, Class T	$23.95
Distribution reinvestment plan (DRP), authorized	8,000,000
Distribution reinvestment plan (DRP), per price	$23.75
Sponsor owned, shares of stock		8,000
Shares of common stock owned by the Sponsor.		8,000
Minimum offering price of the Offering	$2,000,000

Summary_Of_Significant_Account2

Summary Of Significant Accounting Policies (Details Narrative) (USD $)	Mar. 31, 2015
Accounting Policies [Abstract]
Deferred tax assets	$135,000

Transactions_With_Related_Part2

Transactions With Related Parties (Details Narrative) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Notes to Financial Statements
Sponsor contribution		$200,000
Sponsor cash advance		1,500,000
Sponsor shares received		8,000
Offering and organization costs incurred	$3,268,863

Transactions_With_Related_Part3

Transactions With Related Parties - Related party transactions summary (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Notes to Financial Statements
General and administrative expenses	$59,079	$0
Organization costs	0	1,077
Offering costs	61,818	7,022
Sponsor advances and payments by the Sponsor for services provided to the Company	1,200,000	0
Unpaid amount - General and administration expenses	41,185		41,132
Unpaid amount - Organization costs	0		0
Unpaid amount - Offering costs	61,818		125,959
Unpaid amount - Sponsor advances and payments by the Sponsor for services provided to the Company	$2,565,576		$1,365,576