Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 01, 2019 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Inland Residential Properties Trust, Inc. | |
Entity Central Index Key | 0001595627 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Common Stock, Shares Outstanding | 2,183,727 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2019 | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity Address, State or Province | Illinois | |
Entity File Number | 000-55765 | |
Entity Tax Identification Number | 800966998 | |
Entity Address, Address Line One | 2901 Butterfield Road | |
Entity Address, City or Town | Oak Brook | |
Entity Address, Postal Zip Code | 60523 | |
City Area Code | 630 | |
Local Phone Number | 218-8000 |
CONSOLIDATED STATEMENTS OF NET
CONSOLIDATED STATEMENTS OF NET ASSETS - Liquidation Basis [Member] - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
ASSETS | ||
Real estate investments at fair value | $ 40,000,000 | $ 87,000,000 |
Cash | 4,904,655 | 14,226,863 |
Total assets | 44,904,655 | 101,226,863 |
Liabilities: | ||
Mortgages payable | 21,930,000 | 49,380,000 |
Due to related parties | 5,399,441 | 5,256,839 |
Transaction costs payable | 425,751 | 1,245,970 |
Liabilities for estimated costs in excess of estimated receipts during liquidation | 667,495 | 373,261 |
Total liabilities | 28,422,687 | 56,256,070 |
Commitments and contingencies | ||
Net assets in liquidation | $ 16,481,968 | $ 44,970,793 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS - Liquidation Basis [Member] - USD ($) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Beginning balance | $ 35,185,250 | $ 44,970,793 |
Initial liquidating distribution | (9,900,000) | |
Second liquidating distribution | (18,758,219) | (18,758,219) |
Change in estimated costs to be incurred during liquidation | 54,937 | 169,394 |
Ending balance | $ 16,481,968 | $ 16,481,968 |
CONSOLIDATED STATEMENT OF OPERA
CONSOLIDATED STATEMENT OF OPERATIONS - USD ($) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2018 | Jun. 30, 2018 | |
Income: | ||
Total income | $ 2,614,125 | $ 5,214,000 |
Expenses: | ||
General and administrative expenses | 325,518 | 806,118 |
Depreciation and amortization | 952,763 | 2,003,376 |
Total expenses | 2,546,391 | 5,347,571 |
Operating income (loss) | 67,734 | (133,571) |
Interest expense | (607,066) | (1,218,700) |
Interest and other income | 5,390 | 12,339 |
Net loss | $ (533,942) | $ (1,339,932) |
Net loss per common share, basic and diluted | $ (0.25) | $ (0.62) |
Weighted average number of common shares outstanding, basic and diluted | 2,156,997 | 2,154,835 |
Rental Income [Member] | ||
Income: | ||
Total income | $ 2,309,367 | $ 4,621,701 |
Other Property Income [Member] | ||
Income: | ||
Total income | 304,758 | 592,299 |
Property Operating Expenses [Member] | ||
Expenses: | ||
Expenses | 833,079 | 1,663,972 |
Real Estate Tax Expense [Member] | ||
Expenses: | ||
Expenses | 276,468 | 557,127 |
Business Management Fee [Member] | ||
Expenses: | ||
Expenses | $ 158,563 | $ 316,978 |
CONSOLIDATED STATEMENT OF EQUIT
CONSOLIDATED STATEMENT OF EQUITY - 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, 2017 | $ 34,993,826 | $ 1,479 | $ 404 | $ 243 | $ 47,049,832 | $ (12,058,132) |
Balance, shares at Dec. 31, 2017 | 1,479,155 | 404,069 | 243,346 | |||
Proceeds from the offering | 405,000 | $ 2 | $ 15 | 404,983 | ||
Proceeds from the offering, shares | 2,296 | 14,499 | ||||
Offering costs | (34,754) | (34,754) | ||||
Issuance of shares from distribution reinvestment plan | 648,707 | $ 19 | $ 5 | $ 3 | 648,680 | |
Issuance of shares from distribution reinvestment plan, shares | 19,359 | 5,271 | 3,058 | |||
Shares repurchased | (359,861) | $ (13) | $ (2) | (359,846) | ||
Shares repurchased, shares | (12,906) | (3,129) | ||||
Distributions declared | (1,281,901) | (1,281,901) | ||||
Net loss | (1,339,932) | (1,339,932) | ||||
Equity based compensation | 6,018 | 6,018 | ||||
Equity based compensation, shares | 402 | |||||
Balance at Jun. 30, 2018 | 33,037,103 | $ 1,485 | $ 409 | $ 261 | 47,714,913 | (14,679,965) |
Balance, shares at Jun. 30, 2018 | 1,486,010 | 408,507 | 260,903 | |||
Balance at Mar. 31, 2018 | 34,241,309 | $ 1,488 | $ 409 | $ 259 | 47,740,188 | (13,501,035) |
Balance, shares at Mar. 31, 2018 | 1,488,756 | 408,847 | 259,309 | |||
Offering costs | (30) | (30) | ||||
Issuance of shares from distribution reinvestment plan | 326,762 | $ 10 | $ 2 | $ 2 | 326,748 | |
Issuance of shares from distribution reinvestment plan, shares | 9,795 | 2,569 | 1,594 | |||
Shares repurchased | (354,715) | $ (13) | $ (2) | (354,700) | ||
Shares repurchased, shares | (12,906) | (2,909) | ||||
Distributions declared | (644,988) | (644,988) | ||||
Net loss | (533,942) | (533,942) | ||||
Equity based compensation | 2,707 | 2,707 | ||||
Equity based compensation, shares | 365 | |||||
Balance at Jun. 30, 2018 | $ 33,037,103 | $ 1,485 | $ 409 | $ 261 | $ 47,714,913 | $ (14,679,965) |
Balance, shares at Jun. 30, 2018 | 1,486,010 | 408,507 | 260,903 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Cash flows from operating activities: | |
Net loss | $ (1,339,932) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |
Depreciation and amortization | 2,003,376 |
Amortization of debt issuance costs | 18,124 |
Amortization of equity based compensation | 6,018 |
Changes in assets and liabilities: | |
Accounts payable and accrued expenses | 320,713 |
Accounts and rents receivable | 15,426 |
Due to related parties | 310,959 |
Other liabilities | 3,933 |
Other assets | 128,504 |
Net cash flows provided by operating activities | 1,467,121 |
Cash flows from investing activities: | |
Capital expenditures | (121,088) |
Net cash flows used in investing activities | (121,088) |
Cash flows from financing activities: | |
Payment of note payable | (3,500,000) |
Proceeds from offering | 405,000 |
Distributions paid | (634,616) |
Shares repurchased | (359,861) |
Payment of offering costs | (267,129) |
Net cash flows used in financing activities | (4,356,606) |
Net decrease in cash and cash equivalents | (3,010,573) |
Cash and cash equivalents, at beginning of the period | 7,556,763 |
Cash and cash equivalents, at end of period | 4,546,190 |
Supplemental disclosure of cash flow information: | |
Cash paid for interest | 1,223,960 |
Distributions payable | 212,435 |
Accrued offering costs payable | 490,105 |
Common stock issued through distribution reinvestment plan | $ 648,707 |
ORGANIZATION
ORGANIZATION | 6 Months Ended |
Jun. 30, 2019 | |
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 under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, beginning with the tax year ended December 31, 2015. On September 17, 2018, the Company’s board of directors approved the sale of all or substantially all of the Company’s assets, the Company’s liquidation and the Company’s dissolution pursuant to a plan of liquidation (the “Plan of Liquidation”), subject to the approval of the Company’s stockholders. The Company’s stockholders approved the Plan of Liquidation on December 18, 2018. The approval of the Plan of Liquidation by the Company’s stockholders caused the Company’s basis of accounting to change from the going-concern basis (the “Going-Concern Basis”) to the liquidation basis of accounting (the “Liquidation Basis of Accounting”). On March 29, 2019, the Company sold to an unaffiliated third party “The Retreat at Market Square,” located in Frederick, Maryland, for a sale price of $47,000,000. At the closing, the Company received net proceeds of $18,758,218 representing the sale price of $47,000,000, net of closing costs, commissions, and certain prorations and adjustments, and the full repayment of $27,450,000 in mortgage debt that encumbered the property. At June 30, 2019, the Company owned one multi-family community totaling 332 residential units. The property consists of 376,968 The Plan of Liquidation Pursuant to the plan, the Company expects to sell or otherwise dispose of all or substantially all of its properties and assets (including any assets held by the operating partnership and its and the Company’s subsidiaries). Following the completion of the sale or transfer of all of its assets in accordance with the Plan of Liquidation, the Company will pay or provide for its liabilities and expenses, distribute the remaining proceeds of the liquidation of its assets to its stockholders, wind up its operations and dissolve. Pursuant to the Plan of Liquidation, on January 25, 2019, the Company paid an initial liquidating distribution of $4.53 per share of the Company’s Class A common stock, $.001 par value per share (“Class A Share”), to stockholders of record as of the close of business on January 25, 2019 (the “Initial Liquidating Distribution”). On April 11, 2019, the Company paid a second liquidating distribution of $8.59 per Class A Share to stockholders of record as of the close of business on April 2, 2019 (the “Second Liquidating Distribution”). The Company’s common stock is currently registered under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”). The Company may, after filing its articles of dissolution, seek relief from the Securities and Exchange Commission (the “SEC”) from the reporting requirements under the Exchange Act. The Company anticipates that, if relief is granted, the Company would continue to file current reports on Form 8-K to disclose material events relating to its liquidation and dissolution, along with any other reports that the SEC might require, but would discontinue filing Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2019 | |
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, 2018, as filed with the SEC on March 29, 2019, 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, 2019 except as noted below. 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. Basis of Presentation Pre Plan of Liquidation All financial results and disclosures for the six months ended June 30, 2018, which was completed prior to the Company adopting the Liquidation Basis of Accounting, are presented on a Going-Concern Basis, which contemplated the realization of assets and liabilities in the normal course of business. As a result, the consolidated statement of operations and the consolidated statement of equity for the three and six months ended June 30, 2018, and the consolidated statement of cash flows for the six months ended June 30, 2018 are presented on a Going-Concern Basis. For a discussion of significant accounting polices applicable to the going concern financial statements, see the Company’s 2018 Annual Report on Form 10-K. Post Plan of Liquidation As a result of the approval of the Plan of Liquidation by the Company’s stockholders, the Company has adopted the Liquidation Basis of Accounting as of December 18, 2018 and for the subsequent periods in accordance with U.S. GAAP. The consolidated statements of net assets, presented as of June 30, 2019 and December 31, 2018, and the consolidated statement of changes in net assets, presented for the three and six months ended June 30, 2019, are presented using the Liquidation Basis of Accounting. The consolidated statements of net assets presents the estimated amount of net assets that the Company expects to be available for distribution at the end of its Plan of Liquidation. Accordingly, as of June 30, 2019 and December 31, 2018 the Company’s net assets are presented at estimated net realizable value, or liquidation value, which represents the estimated amount of cash that the Company expects to collect on disposal of assets as it carries out the Plan of Liquidation. The liquidation value of the Company’s assets is presented on an undiscounted basis. Liabilities are carried at their contractual amounts due or estimated settlement amounts. The consolidated statement of changes in net assets reflects changes in net assets in liquidation for the three and six months ended June 30, 2019, as further described below. The Company accrues costs and income that it expects to incur and earn through the end of liquidation to the extent it has a reasonable basis for estimation. These amounts are classified as a liability for estimated costs in excess of estimated receipts during liquidation on the consolidated statements of net assets. The Company currently estimates that it will have costs in excess of estimated receipts during the liquidation. These amounts can vary significantly due to, among other things, the timing and estimates for the amounts associated with discharging known and contingent liabilities and the costs associated with the winding up of operations. These costs are estimated and are anticipated to be paid out over the liquidation period. See Note 4 — “Net Assets in Liquidation” for further discussion. |
EQUITY
EQUITY | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
EQUITY | NOTE 3 – EQUITY The Company commenced an offering of Class A Shares and shares of Class T common stock, $.001 par value per share (“Class T Shares”) on February 17, 2015 (the “Offering”) and, effective February 2, 2017, the Company reallocated certain of the remaining shares offered in the Offering to offer shares of Class T-3 common stock, $.001 par value per share (“Class T-3 Shares”). The Company ceased accepting subscription agreements dated after December 31, 2017 and terminated the Offering on January 3, 2018. Excluding the distribution reinvestment plan (as amended, the “DRP”), the Company issued 1,401,711 Class A Shares, 390,230 Class T Shares and 255,666 Class T-3 Shares generating gross proceeds of approximately $50 million from the Offering. On January 23, 2019, all of the Company’s outstanding Class T Shares and Class T-3 Shares automatically converted to Class A Shares. As of June 30, 2019, the Company had 2,183,727 Class A Shares outstanding. Historically, the Company provided the following programs to facilitate additional investment in the Company’s shares and to provide limited liquidity for stockholders. On September 17, 2018, in contemplation of the Plan of Liquidation, which was still pending at that time, the Company’s board of directors determined to terminate the Company’s DRP and share repurchase program (“SRP”). Distribution Reinvestment Plan Prior to September 17, 2018, which was prior to the transition to the Liquidation Basis of Accounting, the Company provided 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, were used to purchase Class A Shares, Class T Shares and Class T-3 Shares, respectively. Such purchases under the DRP were 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. The price per share for shares of common stock purchased under the DRP were made initially at a price of $23.75, $22.81 and $22.81 per Class A Share, Class T Share and Class T-3 Share, respectively, until February 5, 2018 when the Company reported estimated per share net asset values of its common stock. Beginning with the February 2018 distribution payments made to stockholders in March 2018 until the Company terminated the DRP in September 2018, shares of common stock purchased under the DRP were at a price equal to $23.15 per Class A Share, $24.32 per Class T Share and $23.55 per Class T-3 Share. Distributions reinvested through the DRP were $326,748 and $648,680 for the three and six months ended June 30, 2018, respectively. Share Repurchase Program Prior to September 17, 2018, which was prior to the transition to the Liquidation Basis of Accounting, under the SRP, the Company was 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 had held their shares for at least one year, if requested. Subject to funds being available, the Company limited 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 was limited to the proceeds that the Company received 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 applied. Repurchases through the SRP were $354,715 and $359,861 during the three and six months ended June 30, 2018, respectively. |
NET ASSETS IN LIQUIDATION
NET ASSETS IN LIQUIDATION | 6 Months Ended |
Jun. 30, 2019 | |
Net Assets In Liquidation [Abstract] | |
NET ASSETS IN LIQUIDATION | NOTE 4 – NET ASSETS IN LIQUIDATION Net assets in liquidation decreased by $28,488,825 during the six months ended June 30, 2019 to $16,481,968. The changes were due to the Initial Liquidating Distribution of $9,900,000, the Second Liquidating Distribution of $18,758,219 and a $169,394 reduction in estimated costs to be incurred during liquidation. Net assets in liquidation includes projections of costs and expenses to be incurred during the period required to complete the Plan of Liquidation. There is inherent uncertainty with these estimates, and they could change materially based on changes in the underlying assumptions of the projected cash flows. The amount of net cash proceeds available for distribution, pursuant to the Plan of Liquidation, depends on a variety of factors, including, but not limited to, the amount required to pay both existing liabilities and obligations as well as any contingent liabilities and the cost of operating the Company through the date of its final dissolution. The net assets in liquidation value is based on certain assumptions and estimates and may not reflect the amount that our stockholders will receive in the Plan of Liquidation. |
ACQUIRED INTANGIBLE ASSETS
ACQUIRED INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
ACQUIRED INTANGIBLE ASSETS | NOTE 5 – ACQUIRED INTANGIBLE ASSETS 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: 2018 2018 Acquired in place lease value $ 21,259 $ 137,329 |
MORTGAGES PAYABLE, NET
MORTGAGES PAYABLE, NET | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
MORTGAGES PAYABLE, NET | NOTE 6 – MORTGAGES PAYABLE, NET As of June 30, 2019 and December 31, 2018, the Company had the following mortgages payable: June 30, 2019 December 31, 2018 Type of Debt Maturity Date Interest Rate per Annum Principal Amount Weighted Average Interest Rate Principal Amount Weighted Average Interest Rate Mortgages Payable: The Retreat at Market Square September 30, 2023 (1) 3.64 % $ — $ 27,450,000 Verandas at Mitylene August 1, 2027 3.88 % 21,930,000 21,930,000 Total debt $ 21,930,000 3.88 % $ 49,380,000 3.75 % (1) The mortgage was paid in full in connection with the sale of the property on March 29, 2019. 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 was $21,930,000 and $49,380,000 as of June 30, 2019 and December 31, 2018, respectively, and its estimated fair value was $21,930,000 and $49,380,000 as of June 30, 2019 and December 31, 2018, respectively. The mortgage loan requires compliance with certain covenants such as debt service ratios, investment restrictions and distribution limitations. As of June 30, 2019, the Company is in compliance with all financial covenants related to its mortgage loan. |
DISTRIBUTIONS
DISTRIBUTIONS | 6 Months Ended |
Jun. 30, 2019 | |
Distributions [Abstract] | |
DISTRIBUTIONS | NOTE 7 – DISTRIBUTIONS In light of the Plan of Liquidation, the Company’s board of directors ceased declaring and paying regular distributions to the Company’s stockholders following the distributions to stockholders of record with respect to each day during the month of October 2018. From January 1, 2018 t Three Months Ended Six Months Ended June 30, June 30, 2018 2018 Distributions paid $ 652,414 $ 1,283,323 Distributions declared $ 644,988 $ 1,281,901 |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 6 Months Ended |
Jun. 30, 2019 | |
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 six months ended June 30, 2018, 640 shares 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, 2019 | |
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. 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. At June 30, 2019, there were no unvested restricted shares. Upon the approval of the Plan of Liquidation by the Company’s stockholders on December 18, 2018, all 1,791 outstanding restricted shares held by the Company’s non-employee directors vested immediately and the unamortized balance was expensed. Prior to the transition to Liquidation Basis of Accounting, the grant-date value of the restricted shares was amortized over the vesting period representing the requisite service period. 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 6,018 for the six months ended June 30, 2018. |
SEGMENT REPORTING
SEGMENT REPORTING | 6 Months Ended |
Jun. 30, 2019 | |
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, 2019 and 2018. |
TRANSACTIONS WITH RELATED PARTI
TRANSACTIONS WITH RELATED PARTIES | 6 Months Ended |
Jun. 30, 2019 | |
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, 2019 and 2018. The Sponsor and its affiliates will not require repayment of acquisition related costs (fee), certain offering costs, mortgage financing fee and Sponsor non-interest bearing advances until subsequent to 12 months from the issuance of this report or upon liquidation if earlier. Three Months Ended June 30, Three Months Ended June 30, Six Months Ended June 30, Six Months Ended June 30, Amount Unpaid as of Liquidation Basis Going Concern Basis Liquidation Basis Going Concern Basis 2019 2018 2019 2018 June 30, 2019 December 31, 2018 General and administrative reimbursements (a) $ 56,463 $ 89,839 $ 158,489 $ 256,665 $ 71,432 $ 97,041 Acquisition related costs (b) $ — $ — $ — $ — $ 686,250 $ 686,250 Offering costs (c) $ — $ — $ — $ 20,151 $ 1,011,419 $ 1,011,419 Reimbursement of offering costs (d) $ — $ — $ — $ 3,976 $ 432,228 $ 432,228 Business management fee (e) $ 55,121 $ 158,563 $ 156,069 $ 316,978 $ 1,121,595 $ 965,526 Mortgage financing fee (f) $ — $ — $ — $ — $ 114,375 $ 114,375 Sponsor non-interest bearing advances (g) $ — $ — $ — $ — $ 1,950,000 $ 1,950,000 Property management fee $ 37,604 $ 100,449 $ 117,371 $ 204,896 $ — $ — Property operating expenses 166,974 219,769 311,344 439,217 12,142 — Total property operating expenses (h) $ 204,578 $ 320,218 $ 428,715 $ 644,113 $ 12,142 $ — (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 statements of net assets as of June 30, 2019 and December 31, 2018. (b) 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 . (c) The Company reimbursed the Sponsor and its affiliates for costs and other expenses of the Offering. Offering costs are offset against the stockholders’ equity accounts. As of June 30, 2019 and December 31, 2018, unpaid amounts are included in due to related parties in the consolidated statements of net assets. An affiliate of the Business Manager also received 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 was re-allowed (paid) to third party soliciting dealers. The Company did not pay selling commissions or the dealer manager fee in connection with shares issued through the DRP and paid no or reduced selling commissions and dealer manager fees in connection with certain special sales. Prior to November 1, 2018, the Company paid 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 was not paid at the time of the purchase. The Company accounted for the total fee as a charge to equity at the time each Class T Share or Class T-3 Share was sold in the Offering and recorded a corresponding payable in due to related parties. The distribution and stockholder servicing fee was payable monthly in arrears as it became contractually due. At June 30, 2019 and December 31, 2018, there were no unpaid distribution and stockholder servicing fees. The Sponsor will not require the repayment of the unpaid offering costs equal to $1,011,419 until at least one-year after the filing date of this report or upon liquidation, if earlier. (d) Organization and offering expenses, excluding selling commissions and dealer manager fees (“other organization and offering expenses”), could not exceed 2.0% of the gross Offering proceeds (the “maximum expense cap”). To the extent that other organization and offering expenses exceeded the maximum expense cap, the excess expenses were required to be paid by the Business Manager with no recourse to the Company. Other organization and offering expenses exceeded the maximum expense cap. Total offering costs were $10,972,727, of which $7,070,590 were other organization and offering expenses subject to the maximum expense cap. These expenses include registration and filing fees, legal and accounting fees, printing and mailing expenses, bank fees and other administrative expenses. Total proceeds raised in the Offering were $50,140,908, resulting in cap excess of $6,067,772. The Business Manager reimbursed the Company an estimated amount of $6,500,000 during the year ended December 31, 2017. This amount includes an overpayment of $432,228 which is included in due to related parties in the accompanying consolidated statements of net assets at June 30, 2019 and December 31, 2018. (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 as of June 30, 2019 and December 31, 2018 are included in due to related parties in the consolidated statements of net assets. (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, 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 consolidated statements of net assets as of June 30, 2019 and December 31, 2018. The Business Manager will not require the repayment (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 statements of net assets as of June 30, 2019 and December 31, 2018. The Sponsor will not require the repayment of $1,950,000 until at least one-year after the filing date of this report, or upon liquidation, if earlier. (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). |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
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. |
Basis of Presentation | Basis of Presentation Pre Plan of Liquidation All financial results and disclosures for the six months ended June 30, 2018, which was completed prior to the Company adopting the Liquidation Basis of Accounting, are presented on a Going-Concern Basis, which contemplated the realization of assets and liabilities in the normal course of business. As a result, the consolidated statement of operations and the consolidated statement of equity for the three and six months ended June 30, 2018, and the consolidated statement of cash flows for the six months ended June 30, 2018 are presented on a Going-Concern Basis. For a discussion of significant accounting polices applicable to the going concern financial statements, see the Company’s 2018 Annual Report on Form 10-K. Post Plan of Liquidation As a result of the approval of the Plan of Liquidation by the Company’s stockholders, the Company has adopted the Liquidation Basis of Accounting as of December 18, 2018 and for the subsequent periods in accordance with U.S. GAAP. The consolidated statements of net assets, presented as of June 30, 2019 and December 31, 2018, and the consolidated statement of changes in net assets, presented for the three and six months ended June 30, 2019, are presented using the Liquidation Basis of Accounting. The consolidated statements of net assets presents the estimated amount of net assets that the Company expects to be available for distribution at the end of its Plan of Liquidation. Accordingly, as of June 30, 2019 and December 31, 2018 the Company’s net assets are presented at estimated net realizable value, or liquidation value, which represents the estimated amount of cash that the Company expects to collect on disposal of assets as it carries out the Plan of Liquidation. The liquidation value of the Company’s assets is presented on an undiscounted basis. Liabilities are carried at their contractual amounts due or estimated settlement amounts. The consolidated statement of changes in net assets reflects changes in net assets in liquidation for the three and six months ended June 30, 2019, as further described below. The Company accrues costs and income that it expects to incur and earn through the end of liquidation to the extent it has a reasonable basis for estimation. These amounts are classified as a liability for estimated costs in excess of estimated receipts during liquidation on the consolidated statements of net assets. The Company currently estimates that it will have costs in excess of estimated receipts during the liquidation. These amounts can vary significantly due to, among other things, the timing and estimates for the amounts associated with discharging known and contingent liabilities and the costs associated with the winding up of operations. These costs are estimated and are anticipated to be paid out over the liquidation period. See Note 4 — “Net Assets in Liquidation” for further discussion. |
ACQUIRED INTANGIBLE ASSETS (Tab
ACQUIRED INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
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: 2018 2018 Acquired in place lease value $ 21,259 $ 137,329 |
MORTGAGES PAYABLE, NET (Tables)
MORTGAGES PAYABLE, NET (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Mortgages Payable | As of June 30, 2019 and December 31, 2018, the Company had the following mortgages payable: June 30, 2019 December 31, 2018 Type of Debt Maturity Date Interest Rate per Annum Principal Amount Weighted Average Interest Rate Principal Amount Weighted Average Interest Rate Mortgages Payable: The Retreat at Market Square September 30, 2023 (1) 3.64 % $ — $ 27,450,000 Verandas at Mitylene August 1, 2027 3.88 % 21,930,000 21,930,000 Total debt $ 21,930,000 3.88 % $ 49,380,000 3.75 % (1) The mortgage was paid in full in connection with the sale of the property on March 29, 2019. |
DISTRIBUTIONS (Tables)
DISTRIBUTIONS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Distributions [Abstract] | |
Schedule of Dividends Distributions | Three Months Ended Six Months Ended June 30, June 30, 2018 2018 Distributions paid $ 652,414 $ 1,283,323 Distributions declared $ 644,988 $ 1,281,901 |
TRANSACTIONS WITH RELATED PAR_2
TRANSACTIONS WITH RELATED PARTIES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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, 2019 and 2018. Three Months Ended June 30, Three Months Ended June 30, Six Months Ended June 30, Six Months Ended June 30, Amount Unpaid as of Liquidation Basis Going Concern Basis Liquidation Basis Going Concern Basis 2019 2018 2019 2018 June 30, 2019 December 31, 2018 General and administrative reimbursements (a) $ 56,463 $ 89,839 $ 158,489 $ 256,665 $ 71,432 $ 97,041 Acquisition related costs (b) $ — $ — $ — $ — $ 686,250 $ 686,250 Offering costs (c) $ — $ — $ — $ 20,151 $ 1,011,419 $ 1,011,419 Reimbursement of offering costs (d) $ — $ — $ — $ 3,976 $ 432,228 $ 432,228 Business management fee (e) $ 55,121 $ 158,563 $ 156,069 $ 316,978 $ 1,121,595 $ 965,526 Mortgage financing fee (f) $ — $ — $ — $ — $ 114,375 $ 114,375 Sponsor non-interest bearing advances (g) $ — $ — $ — $ — $ 1,950,000 $ 1,950,000 Property management fee $ 37,604 $ 100,449 $ 117,371 $ 204,896 $ — $ — Property operating expenses 166,974 219,769 311,344 439,217 12,142 — Total property operating expenses (h) $ 204,578 $ 320,218 $ 428,715 $ 644,113 $ 12,142 $ — (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 statements of net assets as of June 30, 2019 and December 31, 2018. (b) 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 . (c) The Company reimbursed the Sponsor and its affiliates for costs and other expenses of the Offering. Offering costs are offset against the stockholders’ equity accounts. As of June 30, 2019 and December 31, 2018, unpaid amounts are included in due to related parties in the consolidated statements of net assets. An affiliate of the Business Manager also received 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 was re-allowed (paid) to third party soliciting dealers. The Company did not pay selling commissions or the dealer manager fee in connection with shares issued through the DRP and paid no or reduced selling commissions and dealer manager fees in connection with certain special sales. Prior to November 1, 2018, the Company paid 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 was not paid at the time of the purchase. The Company accounted for the total fee as a charge to equity at the time each Class T Share or Class T-3 Share was sold in the Offering and recorded a corresponding payable in due to related parties. The distribution and stockholder servicing fee was payable monthly in arrears as it became contractually due. At June 30, 2019 and December 31, 2018, there were no unpaid distribution and stockholder servicing fees. The Sponsor will not require the repayment of the unpaid offering costs equal to $1,011,419 until at least one-year after the filing date of this report or upon liquidation, if earlier. (d) Organization and offering expenses, excluding selling commissions and dealer manager fees (“other organization and offering expenses”), could not exceed 2.0% of the gross Offering proceeds (the “maximum expense cap”). To the extent that other organization and offering expenses exceeded the maximum expense cap, the excess expenses were required to be paid by the Business Manager with no recourse to the Company. Other organization and offering expenses exceeded the maximum expense cap. Total offering costs were $10,972,727, of which $7,070,590 were other organization and offering expenses subject to the maximum expense cap. These expenses include registration and filing fees, legal and accounting fees, printing and mailing expenses, bank fees and other administrative expenses. Total proceeds raised in the Offering were $50,140,908, resulting in cap excess of $6,067,772. The Business Manager reimbursed the Company an estimated amount of $6,500,000 during the year ended December 31, 2017. This amount includes an overpayment of $432,228 which is included in due to related parties in the accompanying consolidated statements of net assets at June 30, 2019 and December 31, 2018. (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 as of June 30, 2019 and December 31, 2018 are included in due to related parties in the consolidated statements of net assets. (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, 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 consolidated statements of net assets as of June 30, 2019 and December 31, 2018. The Business Manager will not require the repayment (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 statements of net assets as of June 30, 2019 and December 31, 2018. The Sponsor will not require the repayment of $1,950,000 until at least one-year after the filing date of this report, or upon liquidation, if earlier. (h) The Company pays Inland Residential Real Estate Services LLC (the “Real Estate Manager”) a monthly property management fee of up to 4% of the gross income from any property managed directly by the Real Estate Manager or its affiliates. The Real Estate Manager may reduce, in its sole discretion, the amount of the management fee payable in connection with a particular property, subject to these limits. The Company also reimburses the Real Estate Manager and its affiliates for property-level expenses that they pay or incur on the Company’s behalf, including the salaries, bonuses, benefits and severance payments for persons performing services, including without limitation acquisition due diligence services, for the Real Estate Manager and its affiliates (excluding the executive officers of the Real Estate Manager and the Company’s executive officers). |
ORGANIZATION (Narrative) (Detai
ORGANIZATION (Narrative) (Details) | Apr. 11, 2019$ / shares | Mar. 29, 2019USD ($) | Jun. 30, 2019ft²PropertyUnit$ / shares | Feb. 17, 2015$ / shares |
Real Estate Properties [Line Items] | ||||
Number of retail properties owned | Property | 1 | |||
Property acquisition, total number of units acquired | Unit | 332 | |||
Number of units leased | Unit | 324 | |||
Real estate property, residential units leased percentage | 97.60% | |||
Second liquidation distribution paid date | Apr. 11, 2019 | |||
Class A Common Stock [Member] | ||||
Real Estate Properties [Line Items] | ||||
Initial liquidation distribution to record holders | $ / shares | $ 4.53 | |||
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 | ||
Second liquidation distribution to record holders | $ / shares | $ 8.59 | |||
Retail Gross Leasable [Member] | ||||
Real Estate Properties [Line Items] | ||||
Square footage of real estate properties owned | ft² | 376,968 | |||
The Retreat at Market Square [Member] | Frederick, Maryland [Member] | ||||
Real Estate Properties [Line Items] | ||||
Sale price of real estate properties | $ | $ 47,000,000 | |||
Proceeds from sale of real estate | $ | 18,758,218 | |||
Repayment of mortgage real estate property | $ | $ 27,450,000 |
EQUITY (Narrative) (Details)
EQUITY (Narrative) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 29 Months Ended | 52 Months Ended | ||||
Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2019 | Feb. 05, 2018 | Feb. 02, 2017 | Feb. 17, 2015 | |
Class Of Stock [Line Items] | ||||||||
Gross proceeds from sale of shares | $ 50,140,908 | $ 50,000,000 | ||||||
Distribution reinvested through distribution reinvestment plan | $ 326,762 | $ 648,707 | ||||||
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% | |||||||
Stock repurchase program, amount | 354,715 | 359,861 | ||||||
Distribution Reinvestment Plan [Member] | ||||||||
Class Of Stock [Line Items] | ||||||||
Distribution reinvested through distribution reinvestment plan | $ 326,748 | $ 648,680 | ||||||
Class A Common Stock [Member] | ||||||||
Class Of Stock [Line Items] | ||||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Common stock shares issued | 1,401,711 | |||||||
Common stock shares outstanding | 2,183,727 | 2,183,727 | 2,183,727 | |||||
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 | $ 23.15 | $ 23.15 | $ 23.15 | $ 23.75 | ||||
Class T Common Stock [Member] | ||||||||
Class Of Stock [Line Items] | ||||||||
Common stock, par value | $ 0.001 | |||||||
Common stock shares issued | 390,230 | |||||||
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 | 24.32 | $ 24.32 | $ 24.32 | 22.81 | ||||
Class T-3 Common Stock [Member] | ||||||||
Class Of Stock [Line Items] | ||||||||
Common stock, par value | $ 0.001 | |||||||
Common stock shares issued | 255,666 | |||||||
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 | $ 23.55 | $ 23.55 | $ 23.55 | $ 22.81 |
NET ASSETS IN LIQUIDATION (Narr
NET ASSETS IN LIQUIDATION (Narrative) (Details) - Liquidation Basis [Member] - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |
Liquidation Basis Of Accounting [Line Items] | ||||
Decrease in net assets in liquidation | $ 28,488,825 | |||
Net assets in liquidation | $ 16,481,968 | 16,481,968 | $ 35,185,250 | $ 44,970,793 |
Initial liquidating distribution | 9,900,000 | |||
Second liquidating distribution | 18,758,219 | 18,758,219 | ||
Reduction in estimated costs to be incurred during liquidation | $ 54,937 | $ 169,394 |
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, 2018 | Jun. 30, 2018 | |
Acquired in Place Lease Value [Member] | ||
Amortization recorded as amortization expense: | ||
Acquired in place lease value | $ 21,259 | $ 137,329 |
MORTGAGES PAYABLE, NET (Schedul
MORTGAGES PAYABLE, NET (Schedule of Mortgages Payable) (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2019 | Dec. 31, 2018 | ||
Debt Instrument [Line Items] | |||
Total debt | $ 21,930,000 | $ 49,380,000 | |
Weighted Average Interest Rate | 3.88% | 3.75% | |
Mortgages Payable [Member] | The Retreat at Market Square [Member] | |||
Debt Instrument [Line Items] | |||
Total debt | $ 27,450,000 | ||
Maturity Date | [1] | Sep. 30, 2023 | |
Interest Rate per Annum | 3.64% | ||
Mortgages Payable [Member] | Verandas at Mitylene [Member] | |||
Debt Instrument [Line Items] | |||
Total debt | $ 21,930,000 | $ 21,930,000 | |
Maturity Date | Aug. 1, 2027 | ||
Interest Rate per Annum | 3.88% | ||
[1] | The mortgage was paid in full in connection with the sale of the property on March 29, 2019. |
MORTGAGES PAYABLE, NET (Narrati
MORTGAGES PAYABLE, NET (Narrative) (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Debt Disclosure [Abstract] | ||
Carrying value of debt | $ 21,930,000 | $ 49,380,000 |
Debt instrument, estimated fair value | $ 21,930,000 | $ 49,380,000 |
DISTRIBUTIONS (Narrative) (Deta
DISTRIBUTIONS (Narrative) (Details) - $ / shares | Jun. 30, 2018 | Mar. 31, 2018 | Feb. 28, 2018 |
Class A Common Stock [Member] | |||
Distributions [Line Items] | |||
Amount per share of distributions | $ 0.003424658 | $ 0.003424658 | $ 0.003424658 |
Class T Common Stock [Member] | |||
Distributions [Line Items] | |||
Amount per share of distributions | 0.002758356 | 0.002758488 | 0.002768493 |
Class T-3 Common Stock [Member] | |||
Distributions [Line Items] | |||
Amount per share of distributions | $ 0.003306849 | $ 0.003323017 | $ 0.003306849 |
DISTRIBUTIONS (Schedule of Divi
DISTRIBUTIONS (Schedule of Dividends Distributions) (Details) - USD ($) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2018 | Jun. 30, 2018 | |
Distributions [Abstract] | ||
Distributions paid | $ 652,414 | $ 1,283,323 |
Distributions declared | $ 644,988 | $ 1,281,901 |
EARNINGS (LOSS) PER SHARE - (Na
EARNINGS (LOSS) PER SHARE - (Narrative) (Details) | 6 Months Ended |
Jun. 30, 2018shares | |
Earnings Per Share [Abstract] | |
Antidilutive shares excluded from computation of diluted EPS | 640 |
EQUITY-BASED COMPENSATION (Narr
EQUITY-BASED COMPENSATION (Narrative) (Details) - Employee and Director Incentive Restricted Share Plan [Member] - Restricted Stock [Member] - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | Dec. 18, 2018 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Percentage of outstanding shares that may be issued under RSP | 5.00% | ||
Unvested restricted shares | 0 | ||
Share-based compensation expense | $ 6,018 | ||
Non-Employee Director [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Restricted shares vested | 1,791 | ||
Minimum [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Vesting period | 1 year | ||
Maximum [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Vesting period | 3 years |
SEGMENT REPORTING (Narrative) (
SEGMENT REPORTING (Narrative) (Details) - Segment | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Segment Reporting [Abstract] | ||||
Number of reportable segments | 1 | 1 | 1 | 1 |
TRANSACTIONS WITH RELATED PAR_3
TRANSACTIONS WITH RELATED PARTIES (Schedule of Transactions with Related Parties) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | ||
Acquisition Related Costs [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Unpaid Amounts | [1] | $ 686,250 | $ 686,250 | $ 686,250 | ||
General and Administrative Reimbursements [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Unpaid Amounts | [2] | 71,432 | 71,432 | 97,041 | ||
Offering Costs [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Expenses with related parties | [3] | $ 20,151 | ||||
Unpaid Amounts | [3] | 1,011,419 | 1,011,419 | 1,011,419 | ||
Reimbursement of Offering Costs [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Expenses with related parties | [4] | 3,976 | ||||
Unpaid Amounts | [4] | 432,228 | 432,228 | 432,228 | ||
Business Management Fee [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Expenses with related parties | [5] | $ 158,563 | 316,978 | |||
Unpaid Amounts | [5] | 1,121,595 | 1,121,595 | 965,526 | ||
Mortgage Financing Fee [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Unpaid Amounts | [6] | 114,375 | 114,375 | 114,375 | ||
Sponsor Non-interest Bearing Advances [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Unpaid Amounts | [7] | 1,950,000 | 1,950,000 | 1,950,000 | ||
Property Operating Expenses [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Unpaid Amounts | 12,142 | 12,142 | ||||
Real Estate Manager Or Affiliates [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Unpaid Amounts | [8] | 12,142 | 12,142 | |||
Liquidation Basis [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Unpaid Amounts | 5,399,441 | 5,399,441 | $ 5,256,839 | |||
Liquidation Basis [Member] | Business Management Fee [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Expenses with related parties | [5] | 55,121 | 156,069 | |||
Total General and Administrative Costs [Member] | General and Administrative Reimbursements [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
General and administrative expenses | [2] | 89,839 | 256,665 | |||
Total General and Administrative Costs [Member] | Liquidation Basis [Member] | General and Administrative Reimbursements [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
General and administrative expenses | [2] | 56,463 | 158,489 | |||
Total Property Operating Expenses [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Operating property expenses | [8] | 320,218 | 644,113 | |||
Total Property Operating Expenses [Member] | Property Management Fee [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Operating property expenses | 100,449 | 204,896 | ||||
Total Property Operating Expenses [Member] | Property Operating Expenses [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Operating property expenses | $ 219,769 | $ 439,217 | ||||
Total Property Operating Expenses [Member] | Liquidation Basis [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Operating property expenses | [8] | 204,578 | 428,715 | |||
Total Property Operating Expenses [Member] | Liquidation Basis [Member] | Property Management Fee [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Operating property expenses | 37,604 | 117,371 | ||||
Total Property Operating Expenses [Member] | Liquidation Basis [Member] | Property Operating Expenses [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Operating property expenses | $ 166,974 | $ 311,344 | ||||
[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. There were no related party acquisition costs incurred during the three and six months ended June 30, 2019 and 2018. 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 statements of net assets as of June 30, 2019 and December 31, 2018. The Business Manager will not require the repayment of $686,250 until at least one-year after the filing date of this report or upon liquidation, if earlier. | |||||
[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 statements of net assets as of June 30, 2019 and December 31, 2018. | |||||
[3] | The Company reimbursed the Sponsor and its affiliates for costs and other expenses of the Offering. Offering costs are offset against the stockholders’ equity accounts. As of June 30, 2019 and December 31, 2018, unpaid amounts are included in due to related parties in the consolidated statements of net assets. An affiliate of the Business Manager also received 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 was re-allowed (paid) to third party soliciting dealers. The Company did not pay selling commissions or the dealer manager fee in connection with shares issued through the DRP and paid no or reduced selling commissions and dealer manager fees in connection with certain special sales. Prior to November 1, 2018, the Company paid 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 was not paid at the time of the purchase. The Company accounted for the total fee as a charge to equity at the time each Class T Share or Class T-3 Share was sold in the Offering and recorded a corresponding payable in due to related parties. The distribution and stockholder servicing fee was payable monthly in arrears as it became contractually due. At June 30, 2019 and December 31, 2018, there were no unpaid distribution and stockholder servicing fees. The Sponsor will not require the repayment of the unpaid offering costs equal to $1,011,419 until at least one-year after the filing date of this report or upon liquidation, if earlier. | |||||
[4] | Organization and offering expenses, excluding selling commissions and dealer manager fees (“other organization and offering expenses”), could not exceed 2.0% of the gross Offering proceeds (the “maximum expense cap”). To the extent that other organization and offering expenses exceeded the maximum expense cap, the excess expenses were required to be paid by the Business Manager with no recourse to the Company. Other organization and offering expenses exceeded the maximum expense cap. Total offering costs were $10,972,727, of which $7,070,590 were other organization and offering expenses subject to the maximum expense cap. These expenses include registration and filing fees, legal and accounting fees, printing and mailing expenses, bank fees and other administrative expenses. Total proceeds raised in the Offering were $50,140,908, resulting in cap excess of $6,067,772. The Business Manager reimbursed the Company an estimated amount of $6,500,000 during the year ended December 31, 2017. This amount includes an overpayment of $432,228 which is included in due to related parties in the accompanying consolidated statements of net assets at June 30, 2019 and December 31, 2018. | |||||
[5] | 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 as of June 30, 2019 and December 31, 2018 are included in due to related parties in the consolidated statements of net assets. | |||||
[6] | 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 consolidated statements of net assets as of June 30, 2019 and December 31, 2018. The Business Manager will not require the repayment of $114,375 until at least one-year after the filing date of this report or upon liquidation, if earlier. | |||||
[7] | 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 statements of net assets as of June 30, 2019 and December 31, 2018. The Sponsor will not require the repayment of $1,950,000 until at least one-year after the filing date of this report, or upon liquidation, if earlier. | |||||
[8] | The Company pays Inland Residential Real Estate Services LLC (the “Real Estate Manager”) a monthly property management fee of up to 4% of the gross income from any property managed directly by the Real Estate Manager or its affiliates. The Real Estate Manager may reduce, in its sole discretion, the amount of the management fee payable in connection with a particular property, subject to these limits. The Company also reimburses the Real Estate Manager and its affiliates for property-level expenses that they pay or incur on the Company’s behalf, including the salaries, bonuses, benefits and severance payments for persons performing services, including without limitation acquisition due diligence services, for the Real Estate Manager and its affiliates (excluding the executive officers of the Real Estate Manager and the Company’s executive officers). |
TRANSACTIONS WITH RELATED PAR_4
TRANSACTIONS WITH RELATED PARTIES (Schedule of Transactions with Related Parties) (Parenthetical) (Details) - USD ($) | Aug. 07, 2016 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Oct. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2019 | Dec. 31, 2018 | |
Related Party Transaction [Line Items] | ||||||||||
Maximum percentage of organization and offering expenses, excluding selling commissions and dealer manager fees on gross offering proceeds | 2.00% | |||||||||
Total offering costs | $ 10,972,727 | |||||||||
Other organization and offering expenses subject to maximum expense cap | 7,070,590 | |||||||||
Total proceeds raised in the offering | 50,140,908 | $ 50,000,000 | ||||||||
Offering Costs [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Related party acquisition costs and fees | [1] | $ 20,151 | ||||||||
Due to related parties | [1] | $ 1,011,419 | 1,011,419 | 1,011,419 | $ 1,011,419 | |||||
Reimbursement of Offering Costs [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Related party acquisition costs and fees | [2] | 3,976 | ||||||||
Due to related parties | [2] | 432,228 | 432,228 | 432,228 | 432,228 | |||||
Related party acquisition costs and fees | 6,067,772 | |||||||||
Mortgage Financing Fee [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Due to related parties | [3] | 114,375 | 114,375 | 114,375 | 114,375 | |||||
Sponsor Non-interest Bearing Advances [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Due to related parties | [4] | 1,950,000 | 1,950,000 | 1,950,000 | 1,950,000 | |||||
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 | 0 | 0 | 0 | 0 | ||||||
Acquisition Related Costs [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Due to related parties | [5] | 686,250 | 686,250 | 686,250 | $ 686,250 | |||||
Business Manager [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
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 | 0 | $ 0 | $ 0 | $ 0 | ||||||
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% | |||||||||
Estimated reimbursement amount | $ 6,500,000 | |||||||||
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% | |||||||||
Business Manager [Member] | Mortgage Financing Fee [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Due to related parties | 114,375 | $ 114,375 | 114,375 | |||||||
Business Manager [Member] | Acquisition Related Costs [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Due to related parties | 686,250 | 686,250 | 686,250 | |||||||
Sponsor [Member] | Offering Costs [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Due to related parties | 1,011,419 | 1,011,419 | 1,011,419 | |||||||
Sponsor [Member] | Sponsor Non-interest Bearing Advances [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Due to related parties | $ 1,950,000 | $ 1,950,000 | $ 1,950,000 | |||||||
Real Estate Manager Or Affiliates [Member] | Maximum [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Property management fee percentage | 4.00% | |||||||||
[1] | The Company reimbursed the Sponsor and its affiliates for costs and other expenses of the Offering. Offering costs are offset against the stockholders’ equity accounts. As of June 30, 2019 and December 31, 2018, unpaid amounts are included in due to related parties in the consolidated statements of net assets. An affiliate of the Business Manager also received 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 was re-allowed (paid) to third party soliciting dealers. The Company did not pay selling commissions or the dealer manager fee in connection with shares issued through the DRP and paid no or reduced selling commissions and dealer manager fees in connection with certain special sales. Prior to November 1, 2018, the Company paid 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 was not paid at the time of the purchase. The Company accounted for the total fee as a charge to equity at the time each Class T Share or Class T-3 Share was sold in the Offering and recorded a corresponding payable in due to related parties. The distribution and stockholder servicing fee was payable monthly in arrears as it became contractually due. At June 30, 2019 and December 31, 2018, there were no unpaid distribution and stockholder servicing fees. The Sponsor will not require the repayment of the unpaid offering costs equal to $1,011,419 until at least one-year after the filing date of this report or upon liquidation, if earlier. | |||||||||
[2] | Organization and offering expenses, excluding selling commissions and dealer manager fees (“other organization and offering expenses”), could not exceed 2.0% of the gross Offering proceeds (the “maximum expense cap”). To the extent that other organization and offering expenses exceeded the maximum expense cap, the excess expenses were required to be paid by the Business Manager with no recourse to the Company. Other organization and offering expenses exceeded the maximum expense cap. Total offering costs were $10,972,727, of which $7,070,590 were other organization and offering expenses subject to the maximum expense cap. These expenses include registration and filing fees, legal and accounting fees, printing and mailing expenses, bank fees and other administrative expenses. Total proceeds raised in the Offering were $50,140,908, resulting in cap excess of $6,067,772. The Business Manager reimbursed the Company an estimated amount of $6,500,000 during the year ended December 31, 2017. This amount includes an overpayment of $432,228 which is included in due to related parties in the accompanying consolidated statements of net assets at June 30, 2019 and December 31, 2018. | |||||||||
[3] | 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 consolidated statements of net assets as of June 30, 2019 and December 31, 2018. The Business Manager will not require the repayment of $114,375 until at least one-year after the filing date of this report or upon liquidation, if earlier. | |||||||||
[4] | 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 statements of net assets as of June 30, 2019 and December 31, 2018. The Sponsor will not require the repayment of $1,950,000 until at least one-year after the filing date of this report, or upon liquidation, if earlier. | |||||||||
[5] | 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. There were no related party acquisition costs incurred during the three and six months ended June 30, 2019 and 2018. 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 statements of net assets as of June 30, 2019 and December 31, 2018. The Business Manager will not require the repayment of $686,250 until at least one-year after the filing date of this report or upon liquidation, if earlier. |