Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Aug. 01, 2017 | |
Document And Entity Information [Line Items] | ||
Entity Registrant Name | Inland Residential Properties Trust, Inc. | |
Entity Central Index Key | 1,595,627 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,017 | |
Class A Common Stock [Member] | ||
Document And Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 1,378,383 | |
Class T Common Stock [Member] | ||
Document And Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 391,506 | |
Class T-3 Common Stock [Member] | ||
Document And Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 85,377 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Real estate: | ||
Land | $ 7,794,219 | $ 6,301,838 |
Building and other improvements | 59,885,396 | 38,889,177 |
Total real estate | 67,679,615 | 45,191,015 |
Less: accumulated depreciation | (2,682,959) | (1,822,971) |
Net real estate | 64,996,656 | 43,368,044 |
Cash and cash equivalents | 17,168,529 | 9,038,642 |
Accounts and rents receivable | 26,628 | 17,961 |
Acquired in place lease intangibles, net | 532,994 | |
Other assets | 289,259 | 458,316 |
Total assets | 83,014,066 | 52,882,963 |
Liabilities: | ||
Mortgages and note payable, net | 50,395,683 | 27,447,459 |
Accounts payable and accrued expenses | 427,425 | 232,736 |
Distributions payable | 176,259 | 137,207 |
Due to related parties | 6,116,366 | 5,684,753 |
Other liabilities | 233,532 | 67,287 |
Total liabilities | 57,349,265 | 33,569,442 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $.001 par value, 50,000,000 shares authorized, none outstanding | ||
Additional paid in capital (net of offering costs of $10,046,720 and $8,268,768 as of June 30, 2017 and December 31, 2016, respectively) | 34,456,882 | 25,539,970 |
Distributions and accumulated losses | (8,793,902) | (6,227,832) |
Total stockholders’ equity | 25,664,801 | 19,313,521 |
Total liabilities and stockholders’ equity | 83,014,066 | 52,882,963 |
Class A Common Stock [Member] | ||
Stockholders’ equity: | ||
Common stock | 1,354 | 1,099 |
Class T Common Stock [Member] | ||
Stockholders’ equity: | ||
Common stock | 388 | $ 284 |
Class T-3 Common Stock [Member] | ||
Stockholders’ equity: | ||
Common stock | $ 79 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Offering costs included as reduction to additional paid in capital | $ 10,046,720 | $ 8,268,768 |
Class A Common Stock [Member] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 320,000,000 | 320,000,000 |
Common stock, shares issued | 1,354,006 | 1,098,858 |
Common stock, shares outstanding | 1,354,006 | 1,098,858 |
Class T Common Stock [Member] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 40,000,000 | 40,000,000 |
Common stock, shares issued | 388,824 | 284,283 |
Common stock, shares outstanding | 388,824 | 284,283 |
Class T-3 Common Stock [Member] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 40,000,000 | 40,000,000 |
Common stock, shares issued | 79,362 | 0 |
Common stock, shares outstanding | 79,362 | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income: | ||||
Rental income | $ 1,294,942 | $ 917,059 | $ 2,198,454 | $ 1,760,295 |
Other property income | 128,262 | 88,713 | 244,505 | 176,724 |
Total income | 1,423,204 | 1,005,772 | 2,442,959 | 1,937,019 |
Expenses: | ||||
Property operating expenses | 432,756 | 313,838 | 696,666 | 601,571 |
Real estate tax expense | 164,056 | 87,528 | 253,999 | 174,553 |
General and administrative expenses | 390,663 | 320,173 | 694,517 | 600,684 |
Business management fee | 91,763 | 68,594 | 160,455 | 137,185 |
Acquisition related costs | 30,266 | 71,479 | ||
Depreciation and amortization | 609,311 | 450,466 | 978,707 | 1,072,825 |
Total expenses | 1,718,815 | 1,240,599 | 2,855,823 | 2,586,818 |
Operating loss | (295,611) | (234,827) | (412,864) | (649,799) |
Interest expense | (423,299) | (372,037) | (675,550) | (799,064) |
Interest and other income | 14,116 | 24,514 | ||
Net loss | $ (704,794) | $ (606,864) | $ (1,063,900) | $ (1,448,863) |
Net loss per common share, basic and diluted | $ (0.42) | $ (0.88) | $ (0.67) | $ (2.61) |
Weighted average number of common shares outstanding, basic and diluted | 1,696,801 | 687,355 | 1,595,207 | 556,070 |
CONSOLIDATED STATEMENT OF EQUIT
CONSOLIDATED STATEMENT OF EQUITY - 6 months ended Jun. 30, 2017 - USD ($) | Total | Common Stock [Member]Class A Common Stock [Member] | Common Stock [Member]Class T Common Stock [Member] | Common Stock [Member]Class T-3 Common Stock [Member] | Additional Paid In Capital [Member] | Distributions and Accumulated Losses [Member] |
Balance at Dec. 31, 2016 | $ 19,313,521 | $ 1,099 | $ 284 | $ 25,539,970 | $ (6,227,832) | |
Balance, shares at Dec. 31, 2016 | 1,098,858 | 284,283 | ||||
Proceeds from the offering | 9,632,568 | $ 222 | $ 95 | $ 79 | 9,632,172 | |
Proceeds from the offering, shares | 221,971 | 95,366 | 78,786 | |||
Offering costs | (1,777,952) | (1,777,952) | ||||
Discount on shares to related parties | 24,530 | 24,530 | ||||
Issuance of shares from distribution reinvestment plan | 479,079 | $ 16 | $ 4 | 479,059 | ||
Issuance of shares from distribution reinvestment plan, shares | 15,874 | 4,349 | 126 | |||
Distributions declared | $ (948,184) | (948,184) | ||||
Stock dividends issued | $ 17 | $ 5 | 553,964 | (553,986) | ||
Stock dividends issued, shares | 22,396 | 17,120 | 4,826 | 450 | ||
Net loss | $ (1,063,900) | (1,063,900) | ||||
Equity based compensation | 5,139 | 5,139 | ||||
Equity based compensation, shares | 183 | |||||
Balance at Jun. 30, 2017 | $ 25,664,801 | $ 1,354 | $ 388 | $ 79 | $ 34,456,882 | $ (8,793,902) |
Balance, shares at Jun. 30, 2017 | 1,354,006 | 388,824 | 79,362 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cash flows from operating activities: | ||
Net loss | $ (1,063,900) | $ (1,448,863) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 978,707 | 1,072,825 |
Amortization of debt issuance costs | 5,950 | 68,465 |
Amortization of equity based compensation | 5,139 | 6,076 |
Discount on shares issued to related parties | 24,530 | 14,542 |
Changes in assets and liabilities: | ||
Accounts payable and accrued expenses | 238,845 | (75,732) |
Accounts and rents receivable | (28,076) | 11,326 |
Due to related parties | 219,235 | 193,098 |
Other liabilities | 133,126 | (21,122) |
Other assets | (8,551) | 279,964 |
Net cash flows provided by operating activities | 505,005 | 100,579 |
Cash flows from investing activities: | ||
Purchase of real estate | (22,936,173) | |
Capital expenditures | (20,166) | (4,300) |
Net cash flows used in investing activities | (22,956,339) | (4,300) |
Cash flows from financing activities: | ||
Payment of mortgage | (15,363,817) | |
Proceeds from mortgages and note payable | 23,000,000 | |
Proceeds from offering | 9,632,568 | 12,881,557 |
Payment of debt issuance costs | (57,726) | (329) |
Distributions paid | (430,053) | (171,301) |
Payment of offering costs | (1,563,568) | (1,705,396) |
Net cash flows provided by (used in) financing activities | 30,581,221 | (4,359,286) |
Net increase (decrease) in cash and cash equivalents | 8,129,887 | (4,263,007) |
Cash and cash equivalents, at beginning of the period | 9,038,642 | 5,281,172 |
Cash and cash equivalents, at end of period | 17,168,529 | 1,018,165 |
Supplemental disclosure of cash flow information: | ||
Land | 1,492,382 | |
Building and other improvements | 20,643,086 | |
Furniture, fixtures and equipment | 339,645 | |
Acquired in place lease intangibles | 645,035 | |
Assumed assets and liabilities, net | (183,975) | |
Purchase of real estate | 22,936,173 | |
Supplemental schedule of non-cash investing and financing activities: | ||
Cash paid for interest | 675,606 | 737,305 |
Distributions payable | 176,259 | 77,632 |
Accrued offering costs payable | 756,106 | 532,231 |
Stock dividends issued | 553,986 | 63,970 |
Common stock issued through distribution reinvestment plan | $ 479,079 | $ 117,326 |
ORGANIZATION
ORGANIZATION | 6 Months Ended |
Jun. 30, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
ORGANIZATION | NOTE 1 - ORGANIZATION The Company was formed on December 19, 2013 to primarily acquire and manage a portfolio of multi-family properties located primarily in the top 100 United States metropolitan statistical areas, which generally contain populations greater than 500,000 people. The Company entered into a business management agreement (as amended, the “Business Management Agreement”) with Inland Residential Business Manager & Advisor, Inc. (the “Business Manager”), an indirect wholly owned subsidiary of Inland Real Estate Investment Corporation (the “Sponsor”), to be the Business Manager to the Company. Substantially all of the Company’s business is conducted through Inland Residential Operating Partnership, L.P. (the “operating partnership”), of which the Company is the sole general partner. The Company elected to be taxed as a real estate investment trust for U.S. federal income tax purposes (“REIT”) under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, beginning with the tax year ended December 31, 2015. At June 30, 2017, the Company owned real estate consisting of two multi-family communities totaling 291 units. The properties consist of 300,174 square feet of residential and 10,609 square feet of retail gross leasable area. During the six months ended June 30, 2017, the properties’ weighted average daily occupancy for residential was 95.5% and at June 30, 2017, 284 units, or 97.6% of the total residential units were leased. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Disclosures discussing all significant accounting policies are set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, as filed with the Securities and Exchange Commission on March 17, 2017, under the heading “Note 2 - Summary of Significant Accounting Policies.” There has been no change to the Company’s significant accounting policies during the six months ended June 30, 2017. 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. In the opinion of management, all adjustments necessary for a fair statement, in all material respects, of the financial position and results of operations for the periods are presented. Actual results could differ from those estimates. The results of operations for the interim periods are not necessarily indicative of the results for the entire year. Recent Accounting Pronouncements In November 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). Leases The Company is currently documenting the accounting implications, principles for recognition and measurement and presentation and disclosure requirements. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers The Company has completed a preliminary review of this standard to identify and document specific areas that will be affected by its adoption. Once ASU No. 2016-02 becomes effective, the new revenue standard will apply to certain executory costs and other non-lease components even though the revenue for such activities are not separately stipulated in the tenant’s lease. Revenue from these items are recognized on a straight-line basis under current lease guidance and subsequently, will be recognized as the related services are delivered. |
EQUITY
EQUITY | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
EQUITY | NOTE 3 – EQUITY The Company is authorized to sell up to $1,000,000,000 of shares of common stock consisting of Class A common stock, $.001 par value per share (“Class A Shares”), at a price of $25.00 per share, Class T common stock, $.001 par value per share (“Class T Shares”), at a price of $23.95 per share, and Class T-3 common stock, $.001 par value per share (“Class T-3 Shares” and, together with the Class A Shares and the Class T Shares, the “Shares”), at a price of $24.14 per share, in any combination, in an initial “reasonable best efforts” offering (the “Offering”). The Company is also authorized to issue up to $190,000,000 of Class A, Class T and Class T-3 Shares at a per share price of $23.75, $22.81 and $22.81, respectively, pursuant to the Company’s distribution reinvestment plan (as amended, the “DRP”). The Company commenced its Offering of Class A Shares and Class T Shares on February 17, 2015 and, effective February 2, 2017, the Company reallocated certain of the remaining shares offered in the Offering to offer Class T-3 Shares. Excluding DRP proceeds, the Company generated gross proceeds of $5,446,659, $2,284,009 and $1,901,900 from sales of its Class A Shares, Class T Shares and Class T-3 Shares, respectively, during the six months ended June 30, 2017. As of June 30, 2017, the Company had 1,354,006, 388,824 and 79,362 Class A Shares, Class T Shares and Class T-3 Shares outstanding, respectively. For the six months ended June 30, 2017, the Company declared cash distributions of $948,184, paid total distributions of $909,132 and issued stock dividends of 22,396 shares to stockholders. The Company provides the following programs to facilitate additional investment in the Company’s shares and to provide limited liquidity for stockholders. Distribution Reinvestment Plan The Company provides stockholders with the option to purchase additional shares from the Company by automatically reinvesting cash distributions through the DRP, subject to certain share ownership restrictions. For participants in the DRP, cash distributions paid on Class A Shares, Class T Shares and Class T-3 Shares, as applicable, are used to purchase Class A Shares, Class T Shares and Class T-3 Shares, respectively. Such purchases under the DRP are not 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 initially at a price of $23.75, $22.81 and $22.81 per Class A Share, Class T Share and Class T-3 Distributions reinvested through the DRP were $479,079 and $117,326 for the six months ended June 30, 2017 and 2016, respectively. Share Repurchase Program Under the share repurchase program (as amended, the “SRP”), the Company is authorized, in its discretion, to purchase shares from stockholders who purchased their shares from the Company or received their shares through a non-cash transfer and who have held their shares for at least one year, if requested. Subject to funds being available, the Company limits the number of shares repurchased during any calendar year to no more than 5% of the number of shares of common stock outstanding on December 31st of the previous calendar year. Funding for the SRP is limited to the proceeds that the Company receives from the DRP during the same period. In the case of repurchases made upon the death of a stockholder or qualifying disability, as defined in the SRP, neither the one year holding period, the limit regarding funds available from the DRP nor the 5% limit applies. The SRP will immediately terminate if the Company’s shares become listed for trading on a national securities exchange. In addition, the Company’s board of directors, in its sole direction, may, at any time, amend, suspend or terminate the SRP. There were no repurchases through the SRP for the six months ended June 30, 2017. |
ACQUISITIONS
ACQUISITIONS | 6 Months Ended |
Jun. 30, 2017 | |
Business Combinations [Abstract] | |
ACQUISITIONS | NOTE 4 – ACQUISITIONS During the six months ended June 30, 2017, t he property below was acquired through IRESI Vernon Hills Commons, L.L.C., the Company’s indirect wholly-owned subsidiary (the “Commons Subsidiary”), and financed by entering into, through the Commons Subsidiary, a seven-year mortgage loan for $13,800,000 and an eight-month mezzanine loan for $9,200,000 (the “Mezzanine Loan”). 2017 Acquisitions Date Acquired Property Name Location Total Number of Residential Units Square Footage (a) Purchase Price (b) 2nd Quarter 5/3/2017 Commons at Town Center Vernon Hills, IL 85 105,442 $ 23,000,000 (a) Does not include five units comprising 10,609 square feet of extended first floor retail space. (b) Total purchase price of property. The acquisition of the Commons at Town Center was accounted for as an asset acquisition. For the six months ended June 30, 2017, the Company incurred $230,000 of total acquisition costs and fees, $158,521 of which were capitalized as the acquisition of net real estate in the accompanying consolidated balance sheets and $71,479 of such costs are included in acquisition related costs in the accompanying consolidated statements of operations. For the property acquired during the six months ended June 30, 2017, the Company recorded revenue of $415,948 and property net income of $179,907. The following table presents certain additional information regarding the Company’s acquisition during the six months ended June 30, 2017. The amounts recognized for major assets acquired as of the acquisition date are as follows: 2017 Land $ 1,492,382 Building and other improvements 20,643,086 Furniture, fixtures and equipment 339,645 Acquired in place lease intangibles 645,035 Assumed assets and liabilities, net (183,975 ) Total $ 22,936,173 |
ACQUIRED INTANGIBLE ASSETS
ACQUIRED INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
ACQUIRED INTANGIBLE ASSETS | NOTE 5 – ACQUIRED INTANGIBLE ASSETS The following table summarizes the Company’s identified intangible assets and liabilities as of June 30, 2017 and December 31, 2016: June 30, 2017 December 31, 2016 Intangible assets: Acquired in place lease value $ 645,035 $ — Accumulated amortization (112,041 ) — Acquired lease intangibles, net $ 532,994 $ — As of June 30, 2017, the weighted average amortization period for acquired in place lease intangibles is 1.9 years. The portion of the purchase price allocated to acquired in place lease value is amortized on a straight-line basis over the acquired leases’ weighted average remaining term. Amortization pertaining to acquired in place lease value is summarized below: Three Months Ended June 30, Six Months Ended June 30, Amortization recorded as amortization expense: 2017 2016 2017 2016 Acquired in place lease value $ 112,041 $ — $ 112,041 $ — Estimated amortization of the respective intangible lease assets and liabilities as of June 30, 2017 for each of the five succeeding years and thereafter is as follows: Acquired In-Place Leases 2017 (remainder of year) $ 288,836 2018 88,331 2019 85,035 2020 48,976 2021 21,816 Thereafter — Total $ 532,994 |
MORTGAGES AND NOTE PAYABLE, NET
MORTGAGES AND NOTE PAYABLE, NET | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
MORTGAGES AND NOTE PAYABLE, NET | NOTE 6 – MORTGAGES AND NOTE PAYABLE, NET As of June 30, 2017 and December 31, 2016, the Company had the following mortgages and note payable: June 30, 2017 December 31, 2016 Type of Debt Principal Amount Weighted Average Interest Rate Principal Amount Weighted Average Interest Rate Mortgages $ 41,250,000 3.66 % $ 27,450,000 3.64 % Note payable 9,200,000 5.40 % — — Total debt before debt issuance costs $ 50,450,000 3.97 % $ 27,450,000 3.64 % Unamortized debt issuance costs (54,317 ) (2,541 ) Total debt $ 50,395,683 $ 27,447,459 The Company estimates the fair value of its total debt by discounting the future cash flows of each instrument at rates currently offered for similar debt instruments of comparable maturities by the Company’s lenders using Level 3 inputs. The carrying value of the Company’s debt excluding unamortized debt issuance costs was $50,450,000 and $27,450,000 as of June 30, 2017 and December 31, 2016, respectively, and its estimated fair value was $49,123,831 and $26,957,385 as of June 30, 2017 and December 31, 2016, respectively. Mortgages The mortgage loans require compliance with certain covenants such as debt service ratios, investment restrictions and distribution limitations. As of June 30, 2017, the Company is in compliance with all financial covenants related to its mortgage loans. Note Payable The Mezzanine Loan has customary affirmative, negative and financial covenants, agreements, representations, warranties and borrowing conditions including various customary events of default. The Sponsor has agreed to guarantee the obligations or liabilities of the Commons Subsidiary to lender under the Mezzanine Loan. The Company has not paid, and will not pay, any fees or other consideration to the Sponsor for this guarantee. As of June 30, 2017, the Company is in compliance with all financial covenants related to the Mezzanine Loan. As of June 30, 2017, scheduled principal payments and maturities on the Company’s mortgages and note payable were as follows: June 30, 2017 Scheduled Principal Payments and Maturities by Year: Scheduled Principal Payments Maturities of Mortgages Maturity of Note Payable Total 2017 (remainder of the year) $ — $ — $ — $ — 2018 — — 9,200,000 9,200,000 2019 — — — — 2020 — — — — 2021 124,063 — — 124,063 Thereafter 853,206 40,272,731 — 41,125,937 Total $ 977,269 $ 40,272,731 $ 9,200,000 $ 50,450,000 |
DISTRIBUTIONS
DISTRIBUTIONS | 6 Months Ended |
Jun. 30, 2017 | |
Distributions [Abstract] | |
DISTRIBUTIONS | NOTE 7 – DISTRIBUTIONS The Company currently pays distributions based on daily record dates, payable in arrears the following month, equal to a daily amount of $0.003424658 per Class A Share, $0.002768493 per Class T Share and $0.003306849 per Class T-3 Share, based upon a 365-day year. The Company issued 22,396 in stock dividends during the six months ended June 30, 2017. The table below presents the distributions paid and declared for the three and six months ended June 30, 2017 and 2016. Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 Distributions paid $ 488,222 $ 100,997 $ 909,132 $ 171,301 Distributions declared $ 506,971 $ 211,247 $ 948,184 $ 342,522 |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER SHARE | NOTE 8 – EARNINGS (LOSS) PER SHARE Basic earnings (loss) per share (“EPS”) are computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period (the “common shares”). Diluted EPS is computed by dividing net income (loss) by the common shares plus common share equivalents. The Company excludes antidilutive restricted shares from the calculation of weighted-average shares for diluted EPS. As a result of a net loss for the three and six months ended June 30, 2017, 811 and 761 shares, respectively, were excluded from the computation of diluted EPS, because they would have been antidilutive. As a result of a net loss for the three and six months ended June 30, 2016, 518 and 234 shares, respectively were excluded from the computation of diluted EPS, because they would have been antidilutive. |
EQUITY-BASED COMPENSATION
EQUITY-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
EQUITY-BASED COMPENSATION | NOTE 9 – EQUITY-BASED COMPENSATION In accordance with the Company’s Employee and Director Incentive Restricted Share Plan (the “RSP”), restricted shares are issued to non-employee directors as compensation. Under the RSP, restricted shares generally vest over a one to three year vesting period from the date of the grant based on the specific terms of the grant. The grant-date value of the restricted shares is amortized over the vesting period representing the requisite service period. At vesting, any restrictions on the shares lapse. The number of shares that may be issued under the RSP is limited to 5% of outstanding shares. Compensation expense associated with the director restricted shares is included in general and administrative expenses in the accompanying consolidated financial statements. Compensation expense under the RSP was $2,778 and $5,139 for the three and six months ended June 30, 2017, respectively. Compensation under the RSP was $3,316 and $6,076 for the three and six months ended June 30, 2016, respectively. As of June 30, 2017, the Company had $20,116 of unrecognized compensation cost related to the unvested restricted share awards. The weighted average remaining period that compensation expense related to unvested restricted shares will be recognized is 1.76 years. A summary of the status of the restricted shares is presented below: Shares Weighted Average Grant Date Fair Value Aggregate Intrinsic Value Outstanding at December 31, 2016 804 $ 18,334 $ 18,334 Granted 658 15,000 15,000 Vested (183 ) (4,167 ) (4,167 ) Forfeited — — — Outstanding at June 30, 2017 1,279 $ 29,167 $ 29,167 |
SEGMENT REPORTING
SEGMENT REPORTING | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | NOTE 10 – SEGMENT REPORTING The Company has one reportable segment, multi-family real estate, as defined by U.S. GAAP for the three and six months ended June 30, 2017 and 2016. |
TRANSACTIONS WITH RELATED PARTI
TRANSACTIONS WITH RELATED PARTIES | 6 Months Ended |
Jun. 30, 2017 | |
Related Party Transactions [Abstract] | |
TRANSACTIONS WITH RELATED PARTIES | NOTE 11 – TRANSACTIONS WITH RELATED PARTIES The following table summarizes the Company’s related party transactions for the three and six months ended June 30, 2017 and 2016. Three Months Ended June 30, Six Months Ended June 30, Amount Unpaid as of 2017 2016 2017 2016 June 30, 2017 December 31, 2016 General and administrative reimbursements (a) $ 119,724 $ 166,333 $ 210,031 $ 257,796 $ 92,735 $ 80,386 Affiliate share purchase discounts (b) 974 12 24,530 14,542 — — Total general and administrative costs $ 120,698 $ 166,345 $ 234,561 $ 272,338 $ 92,735 $ 80,386 Acquisition related costs (c) $ 123,418 $ — $ 158,276 $ — $ 720,988 $ 686,250 Offering costs (d) $ 712,154 $ 724,809 $ 1,110,183 $ 1,274,616 $ 1,689,124 $ 1,476,746 Business management fee (e) $ 91,763 $ 68,594 $ 160,455 $ 137,185 $ 526,450 $ 365,995 Mortgage financing fee (f) $ — $ — $ — $ — $ 114,375 $ 114,375 Sponsor non-interest bearing advances (g) $ — $ — $ — $ — $ 2,950,000 $ 2,950,000 Property management fee $ 61,409 $ 39,597 $ 100,554 $ 76,728 $ — $ — Property operating expenses 129,715 96,284 223,135 168,990 22,694 11,001 Total property operating expenses (h) $ 191,124 $ 135,881 $ 323,689 $ 245,718 $ 22,694 $ 11,001 (a) The Business Manager and its affiliates are entitled to reimbursement for certain general and administrative expenses incurred 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 related parties in the accompanying consolidated balance sheets. (b) The Company established a discount stock purchase policy for affiliates and affiliates of the Business Manager that enable them to purchase shares of common stock at $22.81 per share. The Company sold 11,201 and 6,635 shares to affiliates during the six months ended June 30, 2017 and 2016, respectively. (c) Prior to August 8, 2016 under the Business Management Agreement, the Company was required to pay the Business Manager or its affiliates an acquisition fee equal to 1.5% of the “contract purchase price,” as defined in that agreement, of each property and real estate-related asset acquired. The Business Management Agreement was amended to, among other things, delete the obligation to pay acquisition fees, real estate sales commissions and mortgage financing fees payable to the Business Manager by the Company with respect to transactions occurring on or after August 8, 2016 . (d) The Company reimburses the Sponsor and its affiliates for costs and other expenses of the Offering. Offering costs are offset against the stockholders’ equity accounts. Unpaid amounts are included in due to related parties in the accompanying consolidated balance sheets. An affiliate of the Business Manager also receives selling commissions equal to 6.0% of the sale price for each Class A Share sold, 2.0% of the sale price for each Class T Share sold and 3.0% of the sale price for each Class T-3 Share sold and a dealer manager fee equal to 2.75% of the sale price for each Class A and Class T Share sold and 2.5% of the sale price for each Class T-3 Share sold, the majority of which is re-allowed (paid) to third party soliciting dealers. The Company does not pay selling commissions or the dealer manager fee in connection with shares issued through the DRP and pays no or reduced selling commissions and dealer manager fees in connection with certain special sales. Unpaid amounts are included in due to related parties in the accompanying consolidated balance sheets. The Company pays a distribution and stockholder servicing fee equal to 1.0% per annum of the purchase price per share (or, once reported, the amount of the Company’s estimated value per share) for each Class T Share and Class T-3 Share sold in the Offering. The fee is not paid at the time of purchase. The Company accounts for the total fee as a charge to equity at the time each Class T Share or Class T-3 Share is sold in the Offering and records a corresponding payable in due to related parties. The distribution and stockholder servicing fee is payable monthly in arrears as it becomes contractually due. At June 30, 2017 and December 31, 2016, the unpaid fee equal to $475,643 and $335,327, respectively, was recorded in due to related parties in the accompanying consolidated balance sheets. (e) The Company pays the Business Manager an annual business management fee equal to 0.6% of its “average invested assets,” payable quarterly in an amount equal to 0.15% of the Company’s average invested assets as of the last day of the immediately preceding quarter. “Average invested assets” means, for any period, the average of the aggregate book value of the Company’s assets, including all intangibles and goodwill, invested, directly or indirectly, in equity interests in, and loans secured by, properties, as well as amounts invested in securities or consolidated and unconsolidated joint ventures or other partnerships, before reserves for amortization and depreciation or bad debts, impairments or other similar non-cash reserves, computed by taking the average of these values at the end of each month during the relevant calendar quarter. Unpaid amounts are included in due to related parties in the accompanying consolidated balance sheets. (f) Prior to August 8, 2016 under the Business Management Agreement, the Company was required to pay the Business Manager or its affiliates a mortgage financing fee equal to 0.25% of the amount available or borrowed under the financing or the assumed debt if the Business Manager or its affiliates provided services in connection with the origination or refinancing of any debt that the Company obtained and used to finance properties or other assets, or that was assumed, directly or indirectly, in connection with the acquisition of properties or other assets. Pursuant to the amended Business Management Agreement, (g) This amount represents non-interest bearing advances made by the Sponsor which the Company intends to repay. Unpaid amounts are included in due to related parties in the accompanying consolidated balance sheets. (h) The Company pays Inland Residential Real Estate Services, LLC (the “Real Estate Manager”) a monthly property management fee of up to 4% of the gross income from any property managed directly by the Real Estate Manager or its affiliates. The Real Estate Manager may reduce, in its sole discretion, the amount of the management fee payable in connection with a particular property, subject to these limits. The Company also reimburses the Real Estate Manager and its affiliates for property-level expenses that they pay or incur on the Company’s behalf, including the salaries, bonuses, benefits and severance payments for persons performing services, including without limitation acquisition due diligence services, for the Real Estate Manager and its affiliates (excluding the executive officers of the Real Estate Manager and the Company’s executive officers). |
OPERATING LEASES
OPERATING LEASES | 6 Months Ended |
Jun. 30, 2017 | |
Leases Operating [Abstract] | |
OPERATING LEASES | NOTE 12 – OPERATING LEASES The Company’s residential lease terms are generally for twelve months or less. The retail lease terms range from 1 to 4 years. Minimum lease payments to be received under retail operating leases as of June 30, 2017 for the years indicated, assuming no expiring leases are renewed, are as follows: Minimum Lease Payments 2017 (remainder of year) $ 135,425 2018 257,350 2019 254,650 2020 172,750 2021 78,120 Thereafter — Total $ 898,295 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 13 – SUBSEQUENT EVENTS Cash distributions The Company’s board of directors declared cash distributions payable to stockholders of record of Class A, Class T and Class T-3 Shares each day beginning on the close of business July 1, 2017 through the close of business December 31, 2017. Through that date distributions were declared in a daily amount equal to $0.003424658 per Class A Share, $0.002768493 per Class T Share and $0.003306849 per Class T-3 Share, based on a 365-day period. Distributions were paid monthly in arrears as follows. Distribution Month Month Distribution Paid Gross Amount of Distribution Paid Distribution Reinvested through DRP Shares Issued Net Cash Distribution June 2017 July 2017 $ 176,258 $ 94,758 4,031 $ 81,500 July 2017 August 2017 $ 186,955 $ 100,971 4,295 $ 85,984 Acquisitions The Company purchased the following property from an unaffiliated third party subsequent to June 30, 2017: Date Acquired Property Name Location Square Footage Number of Units Purchase Price 7/27/2017 Verandas at Mitylene Montgomery, Alabama 376,968 332 $ 36,550,000 Financing Date Property Interest Rate (stated) Principal Amount Maturity Date 7/27/2017 Verandas at Mitylene 3.88% $ 21,930,000 8/1/2027 |
SUMMARY OF SIGNIFICANT ACCOUN20
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
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. In the opinion of management, all adjustments necessary for a fair statement, in all material respects, of the financial position and results of operations for the periods are presented. Actual results could differ from those estimates. The results of operations for the interim periods are not necessarily indicative of the results for the entire year. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In November 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). Leases The Company is currently documenting the accounting implications, principles for recognition and measurement and presentation and disclosure requirements. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers The Company has completed a preliminary review of this standard to identify and document specific areas that will be affected by its adoption. Once ASU No. 2016-02 becomes effective, the new revenue standard will apply to certain executory costs and other non-lease components even though the revenue for such activities are not separately stipulated in the tenant’s lease. Revenue from these items are recognized on a straight-line basis under current lease guidance and subsequently, will be recognized as the related services are delivered. |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Business Combinations [Abstract] | |
Schedule of Acquisitions | 2017 Acquisitions Date Acquired Property Name Location Total Number of Residential Units Square Footage (a) Purchase Price (b) 2nd Quarter 5/3/2017 Commons at Town Center Vernon Hills, IL 85 105,442 $ 23,000,000 (a) Does not include five units comprising 10,609 square feet of extended first floor retail space. (b) Total purchase price of property. |
Schedule of Major Assets Acquired and Liabilities Assumed | The following table presents certain additional information regarding the Company’s acquisition during the six months ended June 30, 2017. The amounts recognized for major assets acquired as of the acquisition date are as follows: 2017 Land $ 1,492,382 Building and other improvements 20,643,086 Furniture, fixtures and equipment 339,645 Acquired in place lease intangibles 645,035 Assumed assets and liabilities, net (183,975 ) Total $ 22,936,173 |
ACQUIRED INTANGIBLE ASSETS (Tab
ACQUIRED INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Summary of Company's Identified Intangible Assets and Liabilities | The following table summarizes the Company’s identified intangible assets and liabilities as of June 30, 2017 and December 31, 2016: June 30, 2017 December 31, 2016 Intangible assets: Acquired in place lease value $ 645,035 $ — Accumulated amortization (112,041 ) — Acquired lease intangibles, net $ 532,994 $ — |
Amortization Pertaining to Acquired in Place Lease Value | Amortization pertaining to acquired in place lease value is summarized below: Three Months Ended June 30, Six Months Ended June 30, Amortization recorded as amortization expense: 2017 2016 2017 2016 Acquired in place lease value $ 112,041 $ — $ 112,041 $ — |
Estimated Amortization of the Respective Intangible Lease Assets and Liabilities | Estimated amortization of the respective intangible lease assets and liabilities as of June 30, 2017 for each of the five succeeding years and thereafter is as follows: Acquired In-Place Leases 2017 (remainder of year) $ 288,836 2018 88,331 2019 85,035 2020 48,976 2021 21,816 Thereafter — Total $ 532,994 |
MORTGAGES AND NOTE PAYABLE, N23
MORTGAGES AND NOTE PAYABLE, NET (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Mortgages and Note Payable | As of June 30, 2017 and December 31, 2016, the Company had the following mortgages and note payable: June 30, 2017 December 31, 2016 Type of Debt Principal Amount Weighted Average Interest Rate Principal Amount Weighted Average Interest Rate Mortgages $ 41,250,000 3.66 % $ 27,450,000 3.64 % Note payable 9,200,000 5.40 % — — Total debt before debt issuance costs $ 50,450,000 3.97 % $ 27,450,000 3.64 % Unamortized debt issuance costs (54,317 ) (2,541 ) Total debt $ 50,395,683 $ 27,447,459 |
Scheduled Principal Payments and Maturities on Mortgages and Note Payable | As of June 30, 2017, scheduled principal payments and maturities on the Company’s mortgages and note payable were as follows: June 30, 2017 Scheduled Principal Payments and Maturities by Year: Scheduled Principal Payments Maturities of Mortgages Maturity of Note Payable Total 2017 (remainder of the year) $ — $ — $ — $ — 2018 — — 9,200,000 9,200,000 2019 — — — — 2020 — — — — 2021 124,063 — — 124,063 Thereafter 853,206 40,272,731 — 41,125,937 Total $ 977,269 $ 40,272,731 $ 9,200,000 $ 50,450,000 |
DISTRIBUTIONS (Tables)
DISTRIBUTIONS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Distributions [Abstract] | |
Schedule of Dividends Distributions | The table below presents the distributions paid and declared for the three and six months ended June 30, 2017 and 2016. Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 Distributions paid $ 488,222 $ 100,997 $ 909,132 $ 171,301 Distributions declared $ 506,971 $ 211,247 $ 948,184 $ 342,522 |
EQUITY-BASED COMPENSATION (Tabl
EQUITY-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of the Restricted Shares | A summary of the status of the restricted shares is presented below: Shares Weighted Average Grant Date Fair Value Aggregate Intrinsic Value Outstanding at December 31, 2016 804 $ 18,334 $ 18,334 Granted 658 15,000 15,000 Vested (183 ) (4,167 ) (4,167 ) Forfeited — — — Outstanding at June 30, 2017 1,279 $ 29,167 $ 29,167 |
TRANSACTIONS WITH RELATED PAR26
TRANSACTIONS WITH RELATED PARTIES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Related Party Transactions [Abstract] | |
Schedule of Transactions with Related Parties | The following table summarizes the Company’s related party transactions for the three and six months ended June 30, 2017 and 2016. Three Months Ended June 30, Six Months Ended June 30, Amount Unpaid as of 2017 2016 2017 2016 June 30, 2017 December 31, 2016 General and administrative reimbursements (a) $ 119,724 $ 166,333 $ 210,031 $ 257,796 $ 92,735 $ 80,386 Affiliate share purchase discounts (b) 974 12 24,530 14,542 — — Total general and administrative costs $ 120,698 $ 166,345 $ 234,561 $ 272,338 $ 92,735 $ 80,386 Acquisition related costs (c) $ 123,418 $ — $ 158,276 $ — $ 720,988 $ 686,250 Offering costs (d) $ 712,154 $ 724,809 $ 1,110,183 $ 1,274,616 $ 1,689,124 $ 1,476,746 Business management fee (e) $ 91,763 $ 68,594 $ 160,455 $ 137,185 $ 526,450 $ 365,995 Mortgage financing fee (f) $ — $ — $ — $ — $ 114,375 $ 114,375 Sponsor non-interest bearing advances (g) $ — $ — $ — $ — $ 2,950,000 $ 2,950,000 Property management fee $ 61,409 $ 39,597 $ 100,554 $ 76,728 $ — $ — Property operating expenses 129,715 96,284 223,135 168,990 22,694 11,001 Total property operating expenses (h) $ 191,124 $ 135,881 $ 323,689 $ 245,718 $ 22,694 $ 11,001 (a) The Business Manager and its affiliates are entitled to reimbursement for certain general and administrative expenses incurred 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 related parties in the accompanying consolidated balance sheets. (b) The Company established a discount stock purchase policy for affiliates and affiliates of the Business Manager that enable them to purchase shares of common stock at $22.81 per share. The Company sold 11,201 and 6,635 shares to affiliates during the six months ended June 30, 2017 and 2016, respectively. (c) Prior to August 8, 2016 under the Business Management Agreement, the Company was required to pay the Business Manager or its affiliates an acquisition fee equal to 1.5% of the “contract purchase price,” as defined in that agreement, of each property and real estate-related asset acquired. The Business Management Agreement was amended to, among other things, delete the obligation to pay acquisition fees, real estate sales commissions and mortgage financing fees payable to the Business Manager by the Company with respect to transactions occurring on or after August 8, 2016 . (d) The Company reimburses the Sponsor and its affiliates for costs and other expenses of the Offering. Offering costs are offset against the stockholders’ equity accounts. Unpaid amounts are included in due to related parties in the accompanying consolidated balance sheets. An affiliate of the Business Manager also receives selling commissions equal to 6.0% of the sale price for each Class A Share sold, 2.0% of the sale price for each Class T Share sold and 3.0% of the sale price for each Class T-3 Share sold and a dealer manager fee equal to 2.75% of the sale price for each Class A and Class T Share sold and 2.5% of the sale price for each Class T-3 Share sold, the majority of which is re-allowed (paid) to third party soliciting dealers. The Company does not pay selling commissions or the dealer manager fee in connection with shares issued through the DRP and pays no or reduced selling commissions and dealer manager fees in connection with certain special sales. Unpaid amounts are included in due to related parties in the accompanying consolidated balance sheets. The Company pays a distribution and stockholder servicing fee equal to 1.0% per annum of the purchase price per share (or, once reported, the amount of the Company’s estimated value per share) for each Class T Share and Class T-3 Share sold in the Offering. The fee is not paid at the time of purchase. The Company accounts for the total fee as a charge to equity at the time each Class T Share or Class T-3 Share is sold in the Offering and records a corresponding payable in due to related parties. The distribution and stockholder servicing fee is payable monthly in arrears as it becomes contractually due. At June 30, 2017 and December 31, 2016, the unpaid fee equal to $475,643 and $335,327, respectively, was recorded in due to related parties in the accompanying consolidated balance sheets. (e) The Company pays the Business Manager an annual business management fee equal to 0.6% of its “average invested assets,” payable quarterly in an amount equal to 0.15% of the Company’s average invested assets as of the last day of the immediately preceding quarter. “Average invested assets” means, for any period, the average of the aggregate book value of the Company’s assets, including all intangibles and goodwill, invested, directly or indirectly, in equity interests in, and loans secured by, properties, as well as amounts invested in securities or consolidated and unconsolidated joint ventures or other partnerships, before reserves for amortization and depreciation or bad debts, impairments or other similar non-cash reserves, computed by taking the average of these values at the end of each month during the relevant calendar quarter. Unpaid amounts are included in due to related parties in the accompanying consolidated balance sheets. (f) Prior to August 8, 2016 under the Business Management Agreement, the Company was required to pay the Business Manager or its affiliates a mortgage financing fee equal to 0.25% of the amount available or borrowed under the financing or the assumed debt if the Business Manager or its affiliates provided services in connection with the origination or refinancing of any debt that the Company obtained and used to finance properties or other assets, or that was assumed, directly or indirectly, in connection with the acquisition of properties or other assets. Pursuant to the amended Business Management Agreement, (g) This amount represents non-interest bearing advances made by the Sponsor which the Company intends to repay. Unpaid amounts are included in due to related parties in the accompanying consolidated balance sheets. (h) The Company pays Inland Residential Real Estate Services, LLC (the “Real Estate Manager”) a monthly property management fee of up to 4% of the gross income from any property managed directly by the Real Estate Manager or its affiliates. The Real Estate Manager may reduce, in its sole discretion, the amount of the management fee payable in connection with a particular property, subject to these limits. The Company also reimburses the Real Estate Manager and its affiliates for property-level expenses that they pay or incur on the Company’s behalf, including the salaries, bonuses, benefits and severance payments for persons performing services, including without limitation acquisition due diligence services, for the Real Estate Manager and its affiliates (excluding the executive officers of the Real Estate Manager and the Company’s executive officers). |
OPERATING LEASES (Tables)
OPERATING LEASES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Leases Operating [Abstract] | |
Schedule of Minimum Lease Payments to be Received Under Operating Leases | The retail lease terms range from 1 to 4 years. Minimum lease payments to be received under retail operating leases as of June 30, 2017 for the years indicated, assuming no expiring leases are renewed, are as follows: Minimum Lease Payments 2017 (remainder of year) $ 135,425 2018 257,350 2019 254,650 2020 172,750 2021 78,120 Thereafter — Total $ 898,295 |
SUBSEQUENT EVENTS (Tables)
SUBSEQUENT EVENTS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Schedule of Dividends Distributions | The table below presents the distributions paid and declared for the three and six months ended June 30, 2017 and 2016. Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 Distributions paid $ 488,222 $ 100,997 $ 909,132 $ 171,301 Distributions declared $ 506,971 $ 211,247 $ 948,184 $ 342,522 |
Schedule of Acquisitions | 2017 Acquisitions Date Acquired Property Name Location Total Number of Residential Units Square Footage (a) Purchase Price (b) 2nd Quarter 5/3/2017 Commons at Town Center Vernon Hills, IL 85 105,442 $ 23,000,000 (a) Does not include five units comprising 10,609 square feet of extended first floor retail space. (b) Total purchase price of property. |
Schedule of Mortgages and Note Payable | As of June 30, 2017 and December 31, 2016, the Company had the following mortgages and note payable: June 30, 2017 December 31, 2016 Type of Debt Principal Amount Weighted Average Interest Rate Principal Amount Weighted Average Interest Rate Mortgages $ 41,250,000 3.66 % $ 27,450,000 3.64 % Note payable 9,200,000 5.40 % — — Total debt before debt issuance costs $ 50,450,000 3.97 % $ 27,450,000 3.64 % Unamortized debt issuance costs (54,317 ) (2,541 ) Total debt $ 50,395,683 $ 27,447,459 |
Unaffiliated Third Party [Member] | |
Schedule of Acquisitions | The Company purchased the following property from an unaffiliated third party subsequent to June 30, 2017: Date Acquired Property Name Location Square Footage Number of Units Purchase Price 7/27/2017 Verandas at Mitylene Montgomery, Alabama 376,968 332 $ 36,550,000 |
Schedule of Mortgages and Note Payable | Date Property Interest Rate (stated) Principal Amount Maturity Date 7/27/2017 Verandas at Mitylene 3.88% $ 21,930,000 8/1/2027 |
Cash Distributions [Member] | |
Schedule of Dividends Distributions | Distribution Month Month Distribution Paid Gross Amount of Distribution Paid Distribution Reinvested through DRP Shares Issued Net Cash Distribution June 2017 July 2017 $ 176,258 $ 94,758 4,031 $ 81,500 July 2017 August 2017 $ 186,955 $ 100,971 4,295 $ 85,984 |
ORGANIZATION (Narrative) (Detai
ORGANIZATION (Narrative) (Details) | 6 Months Ended |
Jun. 30, 2017ft²PropertyUnit | |
Real Estate Properties [Line Items] | |
Number of retail properties owned | Property | 2 |
Property acquisition, total number of units acquired | Unit | 291 |
Residential property's weighted average occupancy rate | 95.50% |
Number of units leased | Unit | 284 |
Real estate property, total residential units leased percentage | 97.60% |
Residential [Member] | |
Real Estate Properties [Line Items] | |
Square footage of real estate properties owned | ft² | 300,174 |
Retail Gross Leasable [Member] | |
Real Estate Properties [Line Items] | |
Square footage of real estate properties owned | ft² | 10,609 |
EQUITY (Narrative) (Details)
EQUITY (Narrative) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Feb. 02, 2017 | Dec. 31, 2016 | Feb. 17, 2015 | |
Class Of Stock [Line Items] | |||||||
Total value of common stock company is authorized to sell through initial 'reasonable best efforts' offering | $ 1,000,000,000 | ||||||
Cash distribution, declared | $ 948,184 | ||||||
Total cash distribution, paid | $ 488,222 | $ 100,997 | $ 909,132 | $ 171,301 | |||
Stock dividends issued, shares | 22,396 | ||||||
Distribution reinvested through distribution reinvestment plan | $ 479,079 | ||||||
Stock repurchase program, amount | $ 0 | ||||||
Maximum [Member] | |||||||
Class Of Stock [Line Items] | |||||||
Limit on number of shares that can be repurchased each calendar year expressed as a percentage of common stock outstanding on December 31st of the previous calendar year | 5.00% | ||||||
Distribution Reinvestment Plan [Member] | |||||||
Class Of Stock [Line Items] | |||||||
Distribution reinvested through distribution reinvestment plan | $ 479,079 | $ 117,326 | |||||
Class A Common Stock [Member] | |||||||
Class Of Stock [Line Items] | |||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Gross proceeds from sale of shares | $ 5,446,659 | ||||||
Common stock, shares outstanding | 1,354,006 | 1,354,006 | 1,098,858 | ||||
Class A Common Stock [Member] | Reasonable Best Efforts Offering [Member] | |||||||
Class Of Stock [Line Items] | |||||||
Common stock, par value | $ 0.001 | $ 0.001 | |||||
Initial price of each common share authorized pursuant to distribution reinvestment plan | $ 25 | ||||||
Class A Common Stock [Member] | Distribution Reinvestment Plan [Member] | |||||||
Class Of Stock [Line Items] | |||||||
Initial price of each common share authorized pursuant to distribution reinvestment plan | 23.75 | 23.75 | |||||
Class T Common Stock [Member] | |||||||
Class Of Stock [Line Items] | |||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Gross proceeds from sale of shares | $ 2,284,009 | ||||||
Common stock, shares outstanding | 388,824 | 388,824 | 284,283 | ||||
Class T Common Stock [Member] | Reasonable Best Efforts Offering [Member] | |||||||
Class Of Stock [Line Items] | |||||||
Common stock, par value | $ 0.001 | $ 0.001 | |||||
Initial price of each common share authorized pursuant to distribution reinvestment plan | $ 23.95 | ||||||
Class T Common Stock [Member] | Distribution Reinvestment Plan [Member] | |||||||
Class Of Stock [Line Items] | |||||||
Initial price of each common share authorized pursuant to distribution reinvestment plan | 22.81 | 22.81 | |||||
Class T-3 Common Stock [Member] | |||||||
Class Of Stock [Line Items] | |||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Gross proceeds from sale of shares | $ 1,901,900 | ||||||
Common stock, shares outstanding | 79,362 | 79,362 | 0 | ||||
Class T-3 Common Stock [Member] | Reasonable Best Efforts Offering [Member] | |||||||
Class Of Stock [Line Items] | |||||||
Common stock, par value | $ 0.001 | $ 0.001 | |||||
Initial price of each common share authorized pursuant to distribution reinvestment plan | $ 24.14 | ||||||
Class T-3 Common Stock [Member] | Distribution Reinvestment Plan [Member] | |||||||
Class Of Stock [Line Items] | |||||||
Initial price of each common share authorized pursuant to distribution reinvestment plan | $ 22.81 | $ 22.81 | |||||
Class A, Class T and Class T-3 Common Stock [Member] | |||||||
Class Of Stock [Line Items] | |||||||
Total value of common stock company is authorized to sell through initial 'reasonable best efforts' offering | $ 190,000,000 | $ 190,000,000 |
ACQUISITIONS (Narrative) (Detai
ACQUISITIONS (Narrative) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Business Acquisition [Line Items] | ||||
Proceeds from mortgage and mezzanine loan | $ 23,000,000 | |||
Acquisition related costs | $ 30,266 | 71,479 | ||
Revenue | 1,423,204 | $ 1,005,772 | 2,442,959 | $ 1,937,019 |
Commons at Town Centre [Member] | ||||
Business Acquisition [Line Items] | ||||
Total acquisition costs and fees | 230,000 | 230,000 | ||
Capitalized acquisition related costs and fees | $ 158,521 | 158,521 | ||
Acquisition related costs | 71,479 | |||
Revenue | 415,948 | |||
Net income from property acquired | 179,907 | |||
Commons at Town Centre [Member] | Seven-Year Mortgage Loan [Member] | ||||
Business Acquisition [Line Items] | ||||
Proceeds from mortgage and mezzanine loan | $ 13,800,000 | |||
Term of loan | 7 years | |||
Commons at Town Centre [Member] | Eight-Month Mezzanine Loan [Member] | ||||
Business Acquisition [Line Items] | ||||
Proceeds from mortgage and mezzanine loan | $ 9,200,000 | |||
Term of loan | 8 months |
ACQUISITIONS (Schedule of Acqui
ACQUISITIONS (Schedule of Acquisitions) (Details) - Commons at Town Centre [Member] | May 03, 2017USD ($)ft²Unit | |
Business Acquisition [Line Items] | ||
Property acquisition, date acquired | May 3, 2017 | |
Property acquisition, location | Vernon Hills, IL | |
Property acquisition, total number of residential units acquired | Unit | 85 | |
Property acquisition, square footage | ft² | 105,442 | [1] |
Property acquisition, purchase price | $ | $ 23,000,000 | [2] |
[1] | Does not include five units comprising 10,609 square feet of extended first floor retail space. | |
[2] | Total purchase price of property. |
ACQUISITIONS (Schedule of Acq33
ACQUISITIONS (Schedule of Acquisitions) (Parenthetical) (Details) - Commons at Town Centre [Member] | May 03, 2017ft²Unit | |
Business Acquisition [Line Items] | ||
Property acquisition, total number of residential units acquired | Unit | 85 | |
Property acquisition, square footage | ft² | 105,442 | [1] |
Extended First Floor Retail Space [Member] | ||
Business Acquisition [Line Items] | ||
Property acquisition, total number of residential units acquired | Unit | 5 | |
Property acquisition, square footage | ft² | 10,609 | |
[1] | Does not include five units comprising 10,609 square feet of extended first floor retail space. |
ACQUISITIONS (Schedule of Major
ACQUISITIONS (Schedule of Major Assets Acquired and Liabilities Assumed) (Details) - Commons at Town Centre [Member] | May 03, 2017USD ($) |
Business Acquisition [Line Items] | |
Property acquisition, land | $ 1,492,382 |
Property acquisition, building and other improvements | 20,643,086 |
Property acquisition, furniture, fixtures and equipment | 339,645 |
Property acquisition, acquired in place lease intangibles | 645,035 |
Property acquisition, assumed assets and liabilities, net | (183,975) |
Property acquisition, total | $ 22,936,173 |
ACQUIRED INTANGIBLE ASSETS (Sum
ACQUIRED INTANGIBLE ASSETS (Summary of Company's Identified Intangible Assets and Liabilities) (Details) | Jun. 30, 2017USD ($) |
Intangible assets: | |
Acquired in place lease value | $ 645,035 |
Accumulated amortization | (112,041) |
Acquired lease intangibles, net | $ 532,994 |
ACQUIRED INTANGIBLE ASSETS (Nar
ACQUIRED INTANGIBLE ASSETS (Narrative) (Details) | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Weighted average amortization period for acquired in place lease intangibles | 1 year 10 months 24 days |
Intangible assets, amortization method | The portion of the purchase price allocated to acquired in place lease value is amortized on a straight-line basis over the acquired leases’ weighted average remaining term. |
ACQUIRED INTANGIBLE ASSETS (Amo
ACQUIRED INTANGIBLE ASSETS (Amortization Pertaining to Acquired in Place Lease Value) (Details) - USD ($) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2017 | Jun. 30, 2017 | |
Amortization recorded as amortization expense: | ||
Acquired in place lease value | $ 112,041 | $ 112,041 |
ACQUIRED INTANGIBLE ASSETS (Est
ACQUIRED INTANGIBLE ASSETS (Estimated Amortization of the Respective Intangible Lease Assets and Liabilities) (Details) | Jun. 30, 2017USD ($) |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Acquired In-Place Leases, 2017 (remainder of year) | $ 288,836 |
Acquired In-Place Leases, 2018 | 88,331 |
Acquired In-Place Leases, 2019 | 85,035 |
Acquired In-Place Leases, 2020 | 48,976 |
Acquired In-Place Leases, 2021 | 21,816 |
Acquired lease intangibles, net | $ 532,994 |
MORTGAGES AND NOTE PAYABLE, N39
MORTGAGES AND NOTE PAYABLE, NET (Schedule of Mortgages and Note Payable) (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Total debt before debt issuance costs | $ 50,450,000 | $ 27,450,000 |
Unamortized debt issuance costs | (54,317) | (2,541) |
Total debt | $ 50,395,683 | $ 27,447,459 |
Weighted Average Interest Rate | 3.97% | 3.64% |
Mortgages [Member] | ||
Debt Instrument [Line Items] | ||
Total debt before debt issuance costs | $ 41,250,000 | $ 27,450,000 |
Weighted Average Interest Rate | 3.66% | 3.64% |
Note Payable [Member] | ||
Debt Instrument [Line Items] | ||
Total debt before debt issuance costs | $ 9,200,000 | |
Weighted Average Interest Rate | 5.40% |
MORTGAGES AND NOTE PAYABLE, N40
MORTGAGES AND NOTE PAYABLE, NET (Narrative) (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Carrying value of debt excluding unamortized debt issuance costs | $ 50,450,000 | $ 27,450,000 |
Debt instrument, estimated fair value | 49,123,831 | $ 26,957,385 |
Note Payable [Member] | ||
Debt Instrument [Line Items] | ||
Carrying value of debt excluding unamortized debt issuance costs | 9,200,000 | |
Debt instrument, fees or other consideration | $ 0 |
MORTGAGES AND NOTE PAYABLE, N41
MORTGAGES AND NOTE PAYABLE, NET (Scheduled Principal Payments and Maturities on Mortgages and Note Payable) (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
2,018 | $ 9,200,000 | |
2,021 | 124,063 | |
Thereafter | 41,125,937 | |
Total | 50,450,000 | $ 27,450,000 |
Scheduled Principal Payments [Member] | ||
Debt Instrument [Line Items] | ||
2,021 | 124,063 | |
Thereafter | 853,206 | |
Total | 977,269 | |
Maturities of Mortgages [Member] | ||
Debt Instrument [Line Items] | ||
Thereafter | 40,272,731 | |
Total | 40,272,731 | |
Note Payable [Member] | ||
Debt Instrument [Line Items] | ||
2,018 | 9,200,000 | |
Total | $ 9,200,000 |
DISTRIBUTIONS (Narrative) (Deta
DISTRIBUTIONS (Narrative) (Details) | 6 Months Ended |
Jun. 30, 2017$ / sharesshares | |
Distributions [Line Items] | |
Stock dividends issued, shares | shares | 22,396 |
Class A Common Stock [Member] | |
Distributions [Line Items] | |
Amount per share of distributions | $ 0.003424658 |
Class T Common Stock [Member] | |
Distributions [Line Items] | |
Amount per share of distributions | 0.002768493 |
Class T-3 Common Stock [Member] | |
Distributions [Line Items] | |
Amount per share of distributions | $ 0.003306849 |
DISTRIBUTIONS (Schedule of Divi
DISTRIBUTIONS (Schedule of Dividends Distributions) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Distributions [Abstract] | ||||
Distributions paid | $ 488,222 | $ 100,997 | $ 909,132 | $ 171,301 |
Distributions declared | $ 506,971 | $ 211,247 | $ 948,184 | $ 342,522 |
EARNINGS (LOSS) PER SHARE - (Na
EARNINGS (LOSS) PER SHARE - (Narrative) (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Earnings Per Share [Abstract] | ||||
Antidilutive shares excluded from computation of diluted EPS | 811 | 518 | 761 | 234 |
EQUITY-BASED COMPENSATION (Narr
EQUITY-BASED COMPENSATION (Narrative) (Details) - Restricted Stock [Member] - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Unrecognized compensation cost related to the unvested restricted share awards | $ 20,116 | $ 20,116 | ||
Weighted average remaining contractual term related to unvested restricted shares | 1 year 9 months 4 days | |||
Employee and Director Incentive Restricted Share Plan [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Percentage of outstanding shares that may be issued under RSP | 5.00% | |||
Share-based compensation expense | $ 2,778 | $ 3,316 | $ 5,139 | $ 6,076 |
Employee and Director Incentive Restricted Share Plan [Member] | Minimum [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Vesting period | 1 year | |||
Employee and Director Incentive Restricted Share Plan [Member] | Maximum [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Vesting period | 3 years |
EQUITY-BASED COMPENSATION (Summ
EQUITY-BASED COMPENSATION (Summary of the Restricted Shares) (Details) - Restricted Stock [Member] | 6 Months Ended |
Jun. 30, 2017USD ($)$ / sharesshares | |
Shares | |
Outstanding, Shares | shares | 804 |
Granted, Shares | shares | 658 |
Vested, Shares | shares | (183) |
Outstanding, Shares | shares | 1,279 |
Weighted Average Grant Date Fair Value | |
Outstanding, Weighted Average Grant Date Fair Value | $ / shares | $ 18,334 |
Granted, Weighted Average Grant Date Fair Value | $ / shares | 15,000 |
Vested, Weighted Average Grant Date Fair Value | $ / shares | (4,167) |
Outstanding, Weighted Average Grant Date Fair Value | $ / shares | $ 29,167 |
Aggregate Intrinsic Value | |
Outstanding, Aggregate Intrinsic Value | $ | $ 18,334 |
Granted, Aggregate Intrinsic Value | $ | 15,000 |
Vested, Aggregate Intrinsic Value | $ | (4,167) |
Outstanding, Aggregate Intrinsic Value | $ | $ 29,167 |
SEGMENT REPORTING (Narrative) (
SEGMENT REPORTING (Narrative) (Details) - Segment | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Segment Reporting [Abstract] | ||||
Number of reportable segments | 1 | 1 | 1 | 1 |
TRANSACTIONS WITH RELATED PAR48
TRANSACTIONS WITH RELATED PARTIES (Schedule of Transactions with Related Parties) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | ||
Related Party Transaction [Line Items] | ||||||
Due to related parties | $ 6,116,366 | $ 6,116,366 | $ 5,684,753 | |||
Acquisition Related Costs [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Expenses with related parties | [1] | 123,418 | 158,276 | |||
Due to related parties | [1] | 720,988 | 720,988 | 686,250 | ||
General and Administrative Reimbursements [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Due to related parties | [2] | 92,735 | 92,735 | 80,386 | ||
Offering Costs [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Expenses with related parties | [3] | 712,154 | $ 724,809 | 1,110,183 | $ 1,274,616 | |
Due to related parties | [3] | 1,689,124 | 1,689,124 | 1,476,746 | ||
Business Management Fee [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Expenses with related parties | [4] | 91,763 | 68,594 | 160,455 | 137,185 | |
Due to related parties | [4] | 526,450 | 526,450 | 365,995 | ||
Mortgage Financing Fee [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Due to related parties | [5] | 114,375 | 114,375 | 114,375 | ||
Sponsor Non-interest Bearing Advances [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Due to related parties | [6] | 2,950,000 | 2,950,000 | 2,950,000 | ||
Property Operating Expenses [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Due to related parties | 22,694 | 22,694 | 11,001 | |||
Total General And Administrative Costs [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Due to related parties | 92,735 | 92,735 | 80,386 | |||
Real Estate Manager Or Affiliates [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Due to related parties | [7] | 22,694 | 22,694 | $ 11,001 | ||
Total General and Administrative Costs [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
General and administrative expenses | 120,698 | 166,345 | 234,561 | 272,338 | ||
Total General and Administrative Costs [Member] | General and Administrative Reimbursements [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
General and administrative expenses | [2] | 119,724 | 166,333 | 210,031 | 257,796 | |
Total General and Administrative Costs [Member] | Affiliate Share Purchase Discounts [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
General and administrative expenses | [8] | 974 | 12 | 24,530 | 14,542 | |
Total Property Operating Expenses [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Operating property expenses | [7] | 191,124 | 135,881 | 323,689 | 245,718 | |
Total Property Operating Expenses [Member] | Property Management Fee [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Operating property expenses | 61,409 | 39,597 | 100,554 | 76,728 | ||
Total Property Operating Expenses [Member] | Property Operating Expenses [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Operating property expenses | $ 129,715 | $ 96,284 | $ 223,135 | $ 168,990 | ||
[1] | Prior to August 8, 2016 under the Business Management Agreement, the Company was required to pay the Business Manager or its affiliates an acquisition fee equal to 1.5% of the “contract purchase price,” as defined in that agreement, of each property and real estate-related asset acquired. The Business Management Agreement was amended to, among other things, delete the obligation to pay acquisition fees, real estate sales commissions and mortgage financing fees payable to the Business Manager by the Company with respect to transactions occurring on or after August 8, 2016. The Business Manager and its affiliates continue to be reimbursed for acquisition related costs of the Business Manager and its affiliates relating to the Company’s acquisition of properties and real estate assets, regardless of whether the Company acquires the properties or real estate assets, subject to the limits provided in the amended agreement. Of the $158,276 related party acquisition costs and fees, $120,040 were capitalized and classified in other assets in the accompanying consolidated balance sheets and $38,236 of such costs are included in acquisition related costs in the accompanying consolidated statements of operations. Acquisition fees earned prior to August 8, 2016, which have been previously accrued for and are owed to the Business Manager, are expected to be paid in the future and are included in due to related parties in the accompanying consolidated balance sheets. | |||||
[2] | The Business Manager and its affiliates are entitled to reimbursement for certain general and administrative expenses incurred 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 related parties in the accompanying consolidated balance sheets. | |||||
[3] | The Company reimburses the Sponsor and its affiliates for costs and other expenses of the Offering. Offering costs are offset against the stockholders’ equity accounts. Unpaid amounts are included in due to related parties in the accompanying consolidated balance sheets. An affiliate of the Business Manager also receives selling commissions equal to 6.0% of the sale price for each Class A Share sold, 2.0% of the sale price for each Class T Share sold and 3.0% of the sale price for each Class T-3 Share sold and a dealer manager fee equal to 2.75% of the sale price for each Class A and Class T Share sold and 2.5% of the sale price for each Class T-3 Share sold, the majority of which is re-allowed (paid) to third party soliciting dealers. The Company does not pay selling commissions or the dealer manager fee in connection with shares issued through the DRP and pays no or reduced selling commissions and dealer manager fees in connection with certain special sales. Unpaid amounts are included in due to related parties in the accompanying consolidated balance sheets. The Company pays a distribution and stockholder servicing fee equal to 1.0% per annum of the purchase price per share (or, once reported, the amount of the Company’s estimated value per share) for each Class T Share and Class T-3 Share sold in the Offering. The fee is not paid at the time of purchase. The Company accounts for the total fee as a charge to equity at the time each Class T Share or Class T-3 Share is sold in the Offering and records a corresponding payable in due to related parties. The distribution and stockholder servicing fee is payable monthly in arrears as it becomes contractually due. At June 30, 2017 and December 31, 2016, the unpaid fee equal to $475,643 and $335,327, respectively, was recorded in due to related parties in the accompanying consolidated balance sheets. | |||||
[4] | The Company pays the Business Manager an annual business management fee equal to 0.6% of its “average invested assets,” payable quarterly in an amount equal to 0.15% of the Company’s average invested assets as of the last day of the immediately preceding quarter. “Average invested assets” means, for any period, the average of the aggregate book value of the Company’s assets, including all intangibles and goodwill, invested, directly or indirectly, in equity interests in, and loans secured by, properties, as well as amounts invested in securities or consolidated and unconsolidated joint ventures or other partnerships, before reserves for amortization and depreciation or bad debts, impairments or other similar non-cash reserves, computed by taking the average of these values at the end of each month during the relevant calendar quarter. Unpaid amounts are included in due to related parties in the accompanying consolidated balance sheets. | |||||
[5] | Prior to August 8, 2016 under the Business Management Agreement, the Company was required to pay the Business Manager or its affiliates a mortgage financing fee equal to 0.25% of the amount available or borrowed under the financing or the assumed debt if the Business Manager or its affiliates provided services in connection with the origination or refinancing of any debt that the Company obtained and used to finance properties or other assets, or that was assumed, directly or indirectly, in connection with the acquisition of properties or other assets. Pursuant to the amended Business Management Agreement, mortgage financing fees were eliminated with respect to transactions occurring on or after August 8, 2016. Mortgage financing fees earned prior to August 8, 2016, which have been previously accrued for and are owed to the Business Manager, are expected to be paid in the future and are included in due to related parties in the accompanying consolidated balance sheets. | |||||
[6] | This amount represents non-interest bearing advances made by the Sponsor which the Company intends to repay. Unpaid amounts are included in due to related parties in the accompanying consolidated balance sheets. | |||||
[7] | The Company pays Inland Residential Real Estate Services, LLC (the “Real Estate Manager”) a monthly property management fee of up to 4% of the gross income from any property managed directly by the Real Estate Manager or its affiliates. The Real Estate Manager may reduce, in its sole discretion, the amount of the management fee payable in connection with a particular property, subject to these limits. The Company also reimburses the Real Estate Manager and its affiliates for property-level expenses that they pay or incur on the Company’s behalf, including the salaries, bonuses, benefits and severance payments for persons performing services, including without limitation acquisition due diligence services, for the Real Estate Manager and its affiliates (excluding the executive officers of the Real Estate Manager and the Company’s executive officers). | |||||
[8] | The Company established a discount stock purchase policy for affiliates and affiliates of the Business Manager that enable them to purchase shares of common stock at $22.81 per share. The Company sold 11,201 and 6,635 shares to affiliates during the six months ended June 30, 2017 and 2016, respectively. |
TRANSACTIONS WITH RELATED PAR49
TRANSACTIONS WITH RELATED PARTIES (Narrative) (Details) - USD ($) | Aug. 07, 2016 | Jun. 30, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 |
Related Party Transaction [Line Items] | |||||
Acquisition related costs | $ 30,266 | $ 71,479 | |||
Class T Common Stock and Class T-3 Common Stock [Member] | |||||
Related Party Transaction [Line Items] | |||||
Percentage of distribution and stockholder servicing fee | 1.00% | ||||
Class T Common Stock [Member] | |||||
Related Party Transaction [Line Items] | |||||
Unpaid fee under distribution and servicing | 475,643 | $ 475,643 | $ 335,327 | ||
Business Manager [Member] | |||||
Related Party Transaction [Line Items] | |||||
Common stock shares sold to affiliates during period | 11,201 | 6,635 | |||
Price per share of common stock sold to affiliates during period | $ 22.81 | ||||
Fee required to pay the Business Manager or its affiliates expressed as a percentage of the 'contract purchase price' as defined, of each property and real estate-related asset acquired | 1.50% | ||||
Related party acquisition costs and fees | $ 158,276 | ||||
Capitalized related party acquisition costs and fees | $ 120,040 | 120,040 | |||
Acquisition related costs | $ 38,236 | ||||
Selling commission paid to affiliate of the Business Manager expressed as a percentage of the sales price for each Class A Share sold | 6.00% | ||||
Selling commission paid to affiliate of the Business Manager expressed as a percentage of the sales price for each Class T Share sold | 2.00% | ||||
Selling commission paid to affiliate of the Business Manager expressed as a percentage of the sales price for each Class T-3 Share sold | 3.00% | ||||
Dealer manager fee paid to affiliate of the Business Manager expressed as a percentage of the sales price for each Class A and Class T share sold | 2.75% | ||||
Dealer manager fee paid to affiliate of the Business Manager expressed as a percentage of the sales price for each Class T-3 share sold | 2.50% | ||||
Annual business management fee paid to the Business Manager expressed as a percentage of the Company’s “average invested assets” | 0.60% | ||||
Fee paid to Business Manager or its affiliates expressed as a percentage of the 'average invested assets' as defined | 0.15% | ||||
Mortgage financing fee required to pay Business Manager or its affiliates expressed as a percentage of the amount available or borrowed under financing or assumed debt | 0.25% | ||||
Real Estate Manager Or Affiliates [Member] | Maximum [Member] | |||||
Related Party Transaction [Line Items] | |||||
Property management fee percentage | 4.00% |
OPERATING LEASES - (Narrative)
OPERATING LEASES - (Narrative) (Details) | 6 Months Ended |
Jun. 30, 2017 | |
Minimum [Member] | Retail Lease Terms [Member] | |
Operating Leased Assets [Line Items] | |
Lease term | 1 year |
Maximum [Member] | Residential Lease Terms [Member] | |
Operating Leased Assets [Line Items] | |
Lease term | 12 months |
Maximum [Member] | Retail Lease Terms [Member] | |
Operating Leased Assets [Line Items] | |
Lease term | 4 years |
OPERATING LEASES - (Schedule of
OPERATING LEASES - (Schedule of Minimum Lease Payments to be Received Under Operating Leases) - (Details) | Jun. 30, 2017USD ($) |
Leases Operating [Abstract] | |
2017 (remainder of year) | $ 135,425 |
2,018 | 257,350 |
2,019 | 254,650 |
2,020 | 172,750 |
2,021 | 78,120 |
Total | $ 898,295 |
SUBSEQUENT EVENTS (Narrative) (
SUBSEQUENT EVENTS (Narrative) (Details) | 6 Months Ended |
Jun. 30, 2017$ / shares | |
Class A Common Stock [Member] | |
Subsequent Event [Line Items] | |
Amount per share of distributions | $ 0.003424658 |
Class T Common Stock [Member] | |
Subsequent Event [Line Items] | |
Amount per share of distributions | 0.002768493 |
Class T-3 Common Stock [Member] | |
Subsequent Event [Line Items] | |
Amount per share of distributions | 0.003306849 |
Cash Distributions [Member] | Class A Common Stock [Member] | |
Subsequent Event [Line Items] | |
Amount per share of distributions | 0.003424658 |
Cash Distributions [Member] | Class T Common Stock [Member] | |
Subsequent Event [Line Items] | |
Amount per share of distributions | 0.002768493 |
Cash Distributions [Member] | Class T-3 Common Stock [Member] | |
Subsequent Event [Line Items] | |
Amount per share of distributions | $ 0.003306849 |
Cash Distributions [Member] | Minimum [Member] | Class A Common Stock [Member] | |
Subsequent Event [Line Items] | |
Dividends payable, record date | Jul. 1, 2017 |
Cash Distributions [Member] | Minimum [Member] | Class T Common Stock [Member] | |
Subsequent Event [Line Items] | |
Dividends payable, record date | Jul. 1, 2017 |
Cash Distributions [Member] | Minimum [Member] | Class T-3 Common Stock [Member] | |
Subsequent Event [Line Items] | |
Dividends payable, record date | Jul. 1, 2017 |
Cash Distributions [Member] | Maximum [Member] | Class A Common Stock [Member] | |
Subsequent Event [Line Items] | |
Dividends payable, record date | Dec. 31, 2017 |
Cash Distributions [Member] | Maximum [Member] | Class T Common Stock [Member] | |
Subsequent Event [Line Items] | |
Dividends payable, record date | Dec. 31, 2017 |
Cash Distributions [Member] | Maximum [Member] | Class T-3 Common Stock [Member] | |
Subsequent Event [Line Items] | |
Dividends payable, record date | Dec. 31, 2017 |
SUBSEQUENT EVENTS (Schedule of
SUBSEQUENT EVENTS (Schedule of Dividends Distributions) (Details) - USD ($) | 1 Months Ended | 6 Months Ended | |
Aug. 31, 2017 | Jul. 31, 2017 | Jun. 30, 2017 | |
Subsequent Event [Line Items] | |||
Distribution reinvested through distribution reinvestment plan | $ 479,079 | ||
Distributions Paid Month One [Member] | Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Distribution reinvested through distribution reinvestment plan | $ 94,758 | ||
Shares Issued | 4,031 | ||
Net Cash Distribution | $ 81,500 | ||
Distributions Paid Month Two [Member] | Scenario Forecast [Member] | |||
Subsequent Event [Line Items] | |||
Distribution reinvested through distribution reinvestment plan | $ 100,971 | ||
Shares Issued | 4,295 | ||
Net Cash Distribution | $ 85,984 | ||
Cash Distributions [Member] | Distributions Paid Month One [Member] | |||
Subsequent Event [Line Items] | |||
Distribution Month | 2017-06 | ||
Month Distribution Paid | 2017-07 | ||
Cash Distributions [Member] | Distributions Paid Month One [Member] | Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Gross Amount of Distribution Paid | $ 176,258 | ||
Cash Distributions [Member] | Distributions Paid Month Two [Member] | |||
Subsequent Event [Line Items] | |||
Distribution Month | 2017-07 | ||
Month Distribution Paid | 2017-08 | ||
Cash Distributions [Member] | Distributions Paid Month Two [Member] | Scenario Forecast [Member] | |||
Subsequent Event [Line Items] | |||
Gross Amount of Distribution Paid | $ 186,955 |
SUBSEQUENT EVENTS (Schedule o54
SUBSEQUENT EVENTS (Schedule of Acquisitions) (Details) - Verandas at Mitylene [Member] - Subsequent Event [Member] | Jul. 27, 2017USD ($)ft²Unit |
Subsequent Event [Line Items] | |
Property acquisition, date acquired | Jul. 27, 2017 |
Property acquisition, location | Montgomery, Alabama |
Property acquisition, square footage | ft² | 376,968 |
Property acquisition, number of units acquired | Unit | 332 |
Property acquisition, purchase price | $ | $ 36,550,000 |
SUBSEQUENT EVENTS (Schedule o55
SUBSEQUENT EVENTS (Schedule of Financing) (Details) - Verandas at Mitylene [Member] - Subsequent Event [Member] | Jul. 27, 2017USD ($) |
Subsequent Event [Line Items] | |
Date | Jul. 27, 2017 |
Interest Rate (stated) | 3.88% |
Principal Amount | $ 21,930,000 |
Maturity Date | Aug. 1, 2027 |