Moody National REIT II (MNRTII) 10-Q/A 16 Nov 15 2015 Q3 Quarterly report (amended) Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 09, 2015
Document And Entity Information
Entity Registrant Name	Moody National REIT II, Inc.
Entity Central Index Key	1,615,222
Document Type	10-Q
Document Period End Date	Sep. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer	No
Is Entity a Voluntary Filer	No
Is Entity's Reporting Status Current	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		319,735
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2,015

CONSOLIDATED BALANCE SHEETS (un

CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
ASSETS
Cash and cash equivalents	$ 4,335,774	$ 198,624
Earnest money and deposits	1,778,250
Total Assets	6,114,024	$ 198,624
Liabilities:
Accounts payable and accrued expenses	1,509
Due to related parties	823,445
Dividends payable	32,442
Total Liabilities	857,396
Special Limited Partnership Interests	1,000	$ 1,000
Stockholders' equity:
Common stock, $0.01 par value per share; 999,999,000 shares authorized, 260,373 and 8,000 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively	2,604	80
Additional paid-in capital	5,356,031	199,920
Accumulated deficit and distributions	(103,007)	(2,376)
Total stockholders' equity	5,255,628	197,624
TOTAL LIABILITIES AND EQUITY	$ 6,114,024	$ 198,624

CONSOLIDATED BALANCE SHEETS (u3

CONSOLIDATED BALANCE SHEETS (unaudited) (PARENTHETICAL) - $ / shares	Sep. 30, 2015	Dec. 31, 2014
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	100,000,000	100,000,000
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	999,999,000	999,999,000
Common stock, shares issued	260,373	8,000
Common stock, shares outstanding	260,373	8,000
Convertible Stock [Member]
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	1,000	1,000

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	2 Months Ended	3 Months Ended	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2015
Revenue
Interest income			$ 18
Total revenue			18
Expenses
General and administrative	$ 2,376	$ 44,876	45,410
Total expenses	2,376	44,876	45,410
Net loss attributable to common stockholders	$ (2,376)	$ (44,876)	$ (45,392)
Net loss per share attributable to common stockholders - basic and diluted	$ (0.30)	$ (0.30)	$ (0.81)
Weighted average common shares outstanding - basic and diluted	8,000	150,008	55,856

CONSOLIDATED STATEMENT OF STOCK

CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY (unaudited) - 9 months ended Sep. 30, 2015 - USD ($)	Common Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Deficit [Member]	Total
Balance, beginning at Dec. 31, 2014	$ 80	$ 199,920	$ (2,376)	$ 197,624
Balance, beginning, shares at Dec. 31, 2014	8,000
Issuance of common stock, net of offering costs	$ 2,422	5,111,913		$ 6,053,189
Issuance of common stock, net of offering costs, shares	242,127			242,373
Issuance of common stock pursuant to dividend reinvestment plan	$ 2	5,836		$ 5,838
Issuance of common stock pursuant to dividend reinvestment plan, shares	246			4,210,526
Stock-based compensation	$ 100	38,362		$ 38,462
Stock-based compensation, shares	10,000
Net loss			(45,392)	(45,392)
Dividends declared			(55,239)	(55,239)
Balance, ending at Sep. 30, 2015	$ 2,604	$ 5,356,031	$ (103,007)	$ 5,255,628
Balance, ending, shares at Sep. 30, 2015	260,373

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)	2 Months Ended	9 Months Ended
	Sep. 30, 2014USD ($)	Sep. 30, 2015USD ($)
Cash flows from operating activities
Net loss	$ (2,376)	$ (45,392)
Stock-based compensation	0	38,462
Adjustments to reconcile net loss to net cash used in operating activities:
Accounts payable and accrued expenses		1,509
Net cash used in operating activities	(2,376)	(5,421)
Cash flows from investing activities
Earnest money and deposits		(1,778,250)
Due to related parties		489,910
Net cash used in investing activities		(1,288,340)
Cash flows from financing activities
Proceeds from issuance of common stock	200,000	6,053,189
Proceeds from issuance of Special Limited Partnership Interests	1,000
Offering costs paid		(605,319)
Dividends paid		(16,959)
Net cash provided by financing activities	201,000	5,430,911
Net change in cash and cash equivalents	198,624	4,137,150
Cash and cash equivalents at beginning of period		198,624
Cash and cash equivalents at end of period	$ 198,624	4,335,774
Supplemental Disclosure of Non-Cash Financing Activity
Increase in accrued offering costs due to related party		333,535
Issuance of common stock from dividend reinvestment plan		5,838
Dividends payable		$ 32,442

Organization

Organization	9 Months Ended
	Sep. 30, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization	1. Organization Moody National REIT II, Inc. (the “Company”) was formed on July 25, 2014, as a Maryland corporation and intends to qualify as a real estate investment trust (“REIT”) beginning with the year ended December 31, 2015. The Company expects to use the proceeds from its initial public offering to invest in a portfolio of hospitality properties focusing primarily on the premier-brand, select-service segment of the hospitality sector. To a lesser extent, the Company may also invest in hospitality-related real estate securities and debt investments. As discussed in Note 3, the Company was initially capitalized by Moody National REIT Sponsor, LLC (the “Sponsor”). The Company’s fiscal year end is December 31. As of September 30, 2015, the Company did not own any real estate assets. The Company is offering a maximum of 40,000,000 shares of its common stock to the public in its primary offering (the “offering”) at $25.00 per share, with discounts available to certain purchasers, and 4,210,526 shares of its common stock pursuant to its distribution reinvestment plan (the “DRP”) at $23.75 per share. The Company may reallocate the shares between the offering and the DRP. In addition, the Company’s board of directors may, from time to time, in its sole discretion, change the price at which the Company offers shares to the public in the offering or to its stockholders pursuant to the DRP to reflect changes in the Company’s estimated value per share and other factors that the Company’s board of directors deems relevant. Pursuant to the terms of the offering, the Company was required to deposit all subscription proceeds in escrow pursuant to the terms of the Company’s escrow agreement with UMB Bank, N.A. until the earlier of the date that the Company received subscriptions aggregating at least $2,000,000 (including shares of the Company’s common stock purchased by the Company’s sponsor, its affiliates and the Company’s directors and officers) or January 20, 2016. On July 2, 2015, the Company received subscriptions aggregating $2,000,000, and the subscription proceeds held in escrow were released to the Company. As of September 30, 2015, the Company had received and accepted investors’ subscriptions for and issued 242,373 shares of the Company’s common stock in the offering, including 246 shares of common stock pursuant to the DRP, resulting in gross offering proceeds of $6,053,189. As of September 30, 2015, there were a total of 260,373 shares of the Company’s common stock issued and outstanding, including 8,000 shares sold to Sponsor and 10,000 shares of restricted stock discussed in Note 5. The Company’s advisor is Moody National Advisor II, LLC (“Advisor”), a Delaware limited liability company and an affiliate of Sponsor. Subject to certain restrictions and limitations, Advisor is responsible for managing the Company’s affairs on a day-to-day basis and for identifying and making acquisitions and investments on behalf of the Company. Substantially all of the Company’s business is conducted through Moody National Operating Partnership II, LP, a Delaware limited partnership (the “OP”). The Company is the sole general partner of the OP. The initial limited partners of the OP are Moody OP Holdings II, LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Company (“Moody Holdings”), and Moody National LPOP II, LLC (“Moody LPOP II”), an affiliate of Advisor. Moody Holdings has invested $1,000 in the OP in exchange for limited partner interests, and Moody LPOP II has invested $1,000 in the OP in exchange for a separate class of limited partnership interests (the “Special Limited Partnership Interests”). As the Company accepts subscriptions for shares, it will transfer substantially all of the net proceeds of the offering to the OP as a capital contribution. The partnership agreement provides that the OP will be operated in a manner that will enable the Company to (1) satisfy the requirements for being classified as a REIT for tax purposes, (2) avoid any federal income or excise tax liability, and (3) ensure that the OP will not be classified as a “publicly traded partnership” for purposes of Section 7704 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), which classification could result in the OP being taxed as a corporation, rather than as a partnership. In addition to the administrative and operating costs and expenses incurred by the OP in acquiring and operating real properties, the OP will pay all of the Company’s administrative costs and expenses, and such expenses will be treated as expenses of the OP.

Summary of Significant Accounti

Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2015
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies Consolidation The Company’s consolidated financial statements include the Company’s accounts and the accounts of subsidiaries over which the Company has control, including the OP and Moody Holdings. All intercompany balances and transactions are eliminated in consolidation. Organization and Offering Costs Organization and offering costs of the Company are paid directly by the Company or may be incurred by Advisor on behalf of the Company. Under the terms of the advisory agreement with Advisor, upon the sale of shares of common stock to the public, the Company is obligated to reimburse Advisor for organization and offering costs incurred by Advisor in connection with the offering. The amount of the reimbursement to Advisor for cumulative organization and offering costs is limited to a maximum amount of up to 15% of the aggregate gross proceeds from the sale of the shares of common stock sold in the Company’s public offerings. Such costs shall include legal, accounting, printing and other offering expenses, including marketing, salaries and direct expenses of Advisor’s employees and employees of Advisor’s affiliates and others. Any such reimbursement will not exceed actual expenses incurred by Advisor. As of September 30, 2015, total offering costs were $938,854, comprised of $605,319 of offering costs incurred directly by the Company and $333,535 in offering costs incurred by and reimbursable to Advisor. As of September 30, 2015, the Company had $333,535 payable to Advisor for reimbursable offering costs. Income Taxes The Company intends to make an election to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code, commencing in the taxable year ended December 31, 2015. If the Company qualifies for taxation as a REIT, the Company generally will not be subject to federal corporate income tax to the extent it distributes its REIT taxable income to its stockholders, so long as it distributes at least 90 percent of its REIT taxable income (which is computed without regard to the dividends paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with accounting principles generally accepted in the United States of America (“GAAP”)). REITs are subject to a number of other organizational and operational requirements. Even if the Company qualifies for taxation as a REIT, it may be subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed income. In order for the income from any hotel property investments to constitute “rents from real properties” for purposes of the gross income test required for REIT qualification, the income the Company earns cannot be derived from the operation of any of these hotels. Therefore, the Company will lease each hotel property to a subsidiary of the OP, which the Company intends to be treated as a taxable REIT subsidiary (a “TRS”). Cash and Cash Equivalents Cash and cash equivalents consists of cash on hand and highly liquid investments purchased with original maturities of three months or less. Earnest Money and Deposits Earnest money and deposits includes earnest money, rate-lock deposits and expense deposits for future acquisitions.

Capitalization

Capitalization	9 Months Ended
	Sep. 30, 2015
Stockholders' Equity Note [Abstract]
Capitalization	3. Capitalization Capitalization Under the Company’s Articles of Amendment and Restatement (the “Charter”), the Company has the authority to issue 999,999,000 shares of common stock, 100,000,000 shares of preferred stock, and 1,000 shares of non-participating, non-voting convertible stock. All shares of such stock have a par value of $0.01 per share. On August 15, 2014, the Company sold 8,000 shares of common stock to Sponsor at a purchase price of $25.00 per share for an aggregate purchase price of $200,000, which was paid in cash. The Company’s board of directors is authorized to amend its Charter, without the approval of the stockholders, to increase the aggregate number of authorized shares of capital stock or the number of shares of any class or series that the Company has authority to issue. Distributions The Company’s board of directors has authorized and declared a distribution to its stockholders that (1) accrues daily to the Company’s stockholders of record as of the close of business on each day; (2) is payable in cumulative amounts on or before the 15 th The following table summarizes distributions paid in cash and pursuant to the DRP for the nine months ended September 30, 2015. Period (1) Cash Distribution (1) Distribution Paid Pursuant Total Amount of Distribution (1) Third Quarter 2015 $ 16,959 $ 5,838 $ 22,797 Total $ 16,959 $ 5,838 $ 22,797 (1) Distributions are paid on a monthly basis. Distributions for all record dates in a given month are paid approximately 15 days following the end of such month. (2) Amount of distributions paid in shares of common stock pursuant to our distribution reinvestment plan.

Related Party Arrangements

Related Party Arrangements	9 Months Ended
	Sep. 30, 2015
Related Party Transactions [Abstract]
Related Party Arrangements	4. Related Party Arrangements Advisor and certain affiliates of Advisor will receive fees and compensation in connection with the offering, and the acquisition, management and sale of the Company’s real estate investments. In addition, in exchange for $1,000 and in consideration of services to be provided by Advisor, the OP has issued an affiliate of the Advisor, Moody LPOP II, a separate, special limited partnership interest, in the form of Special Limited Partnership Interests. For further detail, please see Note 6 (“Subordinated Participation Interest”) below. Sales Commissions and Dealer Manager Fees Moody National Securities, LLC (“Moody Securities”), the dealer manager of the offering and an affiliate of the Advisor, will receive a commission of up to 7.0% of gross offering proceeds. Moody Securities may reallow all or a portion of such sales commissions earned to participating broker-dealers. In addition, the Company will pay Moody Securities a dealer manager fee of up to 3.0% of gross offering proceeds, a portion of which may be reallowed to participating broker-dealers. No selling commissions or dealer manager fee are paid for sales under the DRP. As of September 30, 2015, the Company had paid Moody Securities $412,394 in selling commissions related to the offering and $116,212 in dealer manager fees related to the offering, which has been recorded as a reduction to additional paid-in capital in the consolidated balance sheets. Organization and Offering Expenses Advisor will receive reimbursement for organizational and offering expenses incurred on the Company’s behalf, but only to the extent that such reimbursements do not exceed actual expenses incurred by Advisor and do not cause the cumulative sales commission, the dealer manager fee and other organization and offering expenses borne by the Company to exceed 15.0% of gross offering proceeds from the sale of shares in its public offering as of the date of reimbursement. As of September 30, 2015, total offering costs were $938,854, comprised of $605,319 of offering costs incurred directly by the Company and $333,535 in offering costs incurred by and reimbursable to Advisor. As of September 30, 2015, the Company had $333,535 payable to Advisor for reimbursable offering costs. Acquisition Fees Advisor, or its affiliates, will also receive an acquisition fee equal to 1.5% of (1) the cost of all investments the Company acquires (including the Company’s pro rata share of any indebtedness assumed or incurred in respect of the investment and exclusive of acquisition and financing coordination fees), (2) the Company’s allocable cost of investments acquired in a joint venture (including the Company’s pro rata share of the purchase price and the Company’s pro rata share of any indebtedness assumed or incurred in respect of that investment and exclusive of acquisition fees and financing coordination fees) or (3) the amount funded by the Company to acquire or originate a loan or other investment, including mortgage, mezzanine or bridge loans (including any third-party expenses related to such investment and exclusive of acquisition fees and financing coordination fees). Once the proceeds from the offering have been fully invested, the aggregate amount of acquisition fees and financing coordination fees shall not exceed 1.9% of the contract purchase price and the amount advanced for a loan or other investment, as applicable, for all the assets acquired. As of September 30, 2015, the Company had not paid any acquisition fees to Advisor. Financing Coordination Fee Advisor will also receive financing coordination fees of 1% of the amount available under any loan or line of credit made available to the Company and 0.75% of the amount available or outstanding under any refinanced loan or line of credit. Advisor will pay some or all of these fees to third parties with whom it subcontracts to coordinate financing for the Company. As of September 30, 2015, the Company had not paid any financing coordination fees to Advisor. Property Management Fee The Company will pay Moody National Hospitality Management, LLC (“Property Manager”) a monthly hotel management fee equal to 4.0% of the monthly gross receipts from the properties managed by Property Manager for services it provides in connection with operating and managing properties. Property Manager may pay some or all of the compensation it receives from the Company to a third-party property manager for management or leasing services. In the event that the Company contracts directly with a non-affiliated third-party property manager, the Company will pay Property Manager a market-based oversight fee. The Company will reimburse the costs and expenses incurred by Property Manager on the Company’s behalf, including legal, travel and other out-of-pocket expenses that are directly related to the management of specific properties, but the Company will not reimburse Property Manager for general overhead costs or personnel costs other than employees or subcontractors who are engaged in the on-site operation, management, maintenance or access control of the properties. The Company will also pay an annual incentive fee to Property Manager. Such annual incentive fee is equal to 15% of the amount by which the operating profit from the properties managed by Property Manager for such fiscal year (or partial fiscal year) exceeds 8.5% of the total investment of such properties. Property Manager may pay some or all of this annual fee to third-party sub-property managers for management services. For purposes of this fee, “total investment” means the sum of (i) the price paid to acquire a property, including closing costs, conversion costs, and transaction costs; (ii) additional invested capital; and (iii) any other costs paid in connection with the acquisition of the property, whether incurred pre- or post-acquisition. As of September 30, 2015, the Company had not paid any property management fees to Property Manager. Asset Management Fee The Company will pay Advisor a monthly asset management fee of one-twelfth of 1.0% of the cost of investment of all real estate investments the Company acquires. As of September 30, 2015, the Company had not paid any asset management fees to Advisor. Disposition Fee Advisor or its affiliates will also receive a disposition fee in an amount of up to one-half of the brokerage commission paid but in no event greater than 3.0% of the contract sales price of each property or other investment sold; provided, however, in no event may the aggregate disposition fees paid to the Advisor and any real estate commissions paid to unaffiliated third parties exceed 6.0% of the contract sales price. As of September 30, 2015, the Company had not paid any disposition fees to Advisor. Operating Expense Reimbursement The Company will reimburse Advisor for all expenses paid or incurred by Advisor in connection with the services provided to the Company, subject to the limitation that the Company will not reimburse Advisor for any amount by which its operating expenses (including the asset management fee) at the end of the four preceding fiscal quarters exceeds the greater of: (1) 2% of its average invested assets, or (2) 25% of its net income determined without reduction for any additions to reserves for depreciation, bad debts or other similar non-cash reserves and excluding any gain from the sale of the Company’s assets for that period (the “2%/25% Limitation”). Notwithstanding the above, the Company may reimburse Advisor for expenses in excess of this limitation if a majority of the independent directors determines that such excess expenses are justified based on unusual and non-recurring factors. For the four fiscal quarters ended September 30, 2015, total operating expenses of the Company were $248,234, which included $45,410 in operating expenses incurred directly by the Company and $202,824 incurred by Advisor on behalf of the Company. Of the $202,824 in operating expenses incurred by Advisor during the four fiscal quarters ended September 30, 2015, $202,234 exceeded the 2%/25% Limitation. The Company reimbursed Advisor $0 in operating expenses during the four fiscal quarters ended September 30, 2015.

Incentive Award Plan

Incentive Award Plan	9 Months Ended
	Sep. 30, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Incentive Award Plan	5. Incentive Award Plan The Company has adopted an incentive plan (the “Incentive Award Plan”) that provides for the grant of equity awards to its employees, directors and consultants and those of the Company’s affiliates. The Incentive Award Plan authorizes the grant of non-qualified and incentive stock options, restricted stock awards, restricted stock units, stock appreciation rights, dividend equivalents and other stock-based awards or cash-based awards. Shares of common stock will be authorized and reserved for issuance under the Incentive Award Plan. The Company has adopted an independent directors compensation plan (the “Independent Directors Compensation Plan”) pursuant to which each of the Company’s independent directors is entitled, subject to the plan’s conditions and restrictions, to receive an initial grant of 5,000 shares of restricted stock when the Company raises the minimum offering amount of $2,000,000 in the offering. Each new independent director that subsequently joins the Company’s board of directors will receive a grant of 5,000 shares of restricted stock upon his or her election to the Company’s board of directors. In addition, on the date of each of the first four annual meetings of the Company’s stockholders at which an independent director is re-elected to the Company’s board of directors, he or she will receive an additional grant of 2,500 shares of restricted stock. Subject to certain conditions, the non-vested shares of restricted stock granted pursuant to the Independent Directors Compensation Plan will vest and become non-forfeitable in four equal quarterly installments beginning on the first day of the first quarter following the date of grant; provided, however, that the restricted stock will become fully vested on the earlier to occur of (1) the termination of the independent director’s service as a director due to his or her death or disability, or (2) a change in control of the Company. 10,000 shares of restricted stock were granted pursuant to the Independent Directors Compensation Plan during the three and nine months ended September 30, 2015. The weighted average grant date fair value of the shares of restricted stock was $25.00 per share, which was based on observable market transactions occurring near the date of the grants. The Company recorded compensation expense related to such shares of restricted stock ratably from the grant date to the date the shares become fully vested based on the fair market value of such shares at the date they were granted. The Company recorded compensation expense related to such shares of restricted stock of $38,462 for the three and nine months ended September 30, 2015 and $0 for the period from July 25, 2014 through September 30, 2014. As of September 30, 2015, there were 10,000 non-vested shares of restricted common stock granted pursuant to the Independent Directors Compensation Plan on August 12, 2015. The remaining unrecognized compensation expense of $211,538 will be recognized during the fourth quarter of 2015 and the first, second and third quarters of 2016.

Subordinated Participation Inte

Subordinated Participation Interest	9 Months Ended
	Sep. 30, 2015
Subordinated Participation Interest
Subordinated Participation Interest	6. Subordinated Participation Interest Pursuant to the Limited Partnership Agreement for the OP, Moody LPOP II, the holder of the Special Limited Partnership Interests, is entitled to receive distributions equal to 15.0% of the OP’s net cash flows, whether from continuing operations, the repayment of loans, the disposition of assets or otherwise, but only after the Company’s stockholders have received, in the aggregate, cumulative distributions equal to their total invested capital plus a 6.0% cumulative, non-compounded annual pre-tax return on such aggregated invested capital. In addition, the Special Limited Partnership Interest holder is entitled to a separate payment if it redeems its Special Limited Partnership Interests. The Special Limited Partnership Interests may be redeemed upon: (1) the listing of the Company’s common stock on a national securities exchange; or (2) the occurrence of certain events that result in the termination or non-renewal of the Company’s advisory agreement, in each case for an amount that Moody LPOP II would have been entitled to receive had the OP disposed of all of its assets at the enterprise valuation as of the date of the event triggering the redemption.

Subsequent Events

Subsequent Events	9 Months Ended
	Sep. 30, 2015
Subsequent Events [Abstract]
Subsequent Events	7. Subsequent Events Distributions Declared On September 30, 2015, the Company declared a distribution in the aggregate amount of $32,442, of which $22,257 was paid in cash on October 15, 2015 and $10,185 was paid pursuant to the DRP in the form of additional shares of the Company’s common stock. On October 31, 2015, the Company declared a distribution in the aggregate amount of $43,159 which was paid in cash and through the DRP in the form of additional shares of the Company’s common stock on November 13, 2015. Residence Inn Austin On October 15, 2015, the Company, through a wholly owned subsidiary, acquired the Residence Inn University Area Austin (the “Residence Inn Austin”) from a third-party seller for an aggregate purchase price of $25,500,000, excluding acquisition costs. The Company financed the acquisition of the Residence Inn Austin with a portion of the proceeds from its public offering and financing, in the aggregate amount of $16,575,000, secured by the Residence Inn Austin. Determination of Estimated Value Per Share On November 12, 2015, the Company’s Board of Directors determined that the estimated value of the Company’s common stock, as of October 31, 2015, was $25.03 per share. More information about the determination of the Company’s estimated value per share can be found in the Company’s Current Report on Form 8-K filed with the SEC on November 16, 2015.

Summary of Significant Accoun14

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2015
Accounting Policies [Abstract]
Consolidation	Consolidation The Company’s consolidated financial statements include the Company’s accounts and the accounts of subsidiaries over which the Company has control, including the OP and Moody Holdings. All intercompany balances and transactions are eliminated in consolidation.
Organization and Offering Costs	Organization and Offering Costs Organization and offering costs of the Company are paid directly by the Company or may be incurred by Advisor on behalf of the Company. Under the terms of the advisory agreement with Advisor, upon the sale of shares of common stock to the public, the Company is obligated to reimburse Advisor for organization and offering costs incurred by Advisor in connection with the offering. The amount of the reimbursement to Advisor for cumulative organization and offering costs is limited to a maximum amount of up to 15% of the aggregate gross proceeds from the sale of the shares of common stock sold in the Company’s public offerings. Such costs shall include legal, accounting, printing and other offering expenses, including marketing, salaries and direct expenses of Advisor’s employees and employees of Advisor’s affiliates and others. Any such reimbursement will not exceed actual expenses incurred by Advisor. As of September 30, 2015, total offering costs were $938,854, comprised of $605,319 of offering costs incurred directly by the Company and $333,535 in offering costs incurred by and reimbursable to Advisor. As of September 30, 2015, the Company had $333,535 payable to Advisor for reimbursable offering costs.
Income Taxes	Income Taxes The Company intends to make an election to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code, commencing in the taxable year ended December 31, 2015. If the Company qualifies for taxation as a REIT, the Company generally will not be subject to federal corporate income tax to the extent it distributes its REIT taxable income to its stockholders, so long as it distributes at least 90 percent of its REIT taxable income (which is computed without regard to the dividends paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with accounting principles generally accepted in the United States of America (“GAAP”)). REITs are subject to a number of other organizational and operational requirements. Even if the Company qualifies for taxation as a REIT, it may be subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed income. In order for the income from any hotel property investments to constitute “rents from real properties” for purposes of the gross income test required for REIT qualification, the income the Company earns cannot be derived from the operation of any of these hotels. Therefore, the Company will lease each hotel property to a subsidiary of the OP, which the Company intends to be treated as a taxable REIT subsidiary (a “TRS”).
Cash and Cash Equivalents	Cash and Cash Equivalents Cash and cash equivalents consists of cash on hand and highly liquid investments purchased with original maturities of three months or less.
Earnest Money and Deposits	Earnest Money and Deposits Earnest money and deposits includes earnest money, rate-lock deposits and expense deposits for future acquisitions.

Capitalization (Tables)

Capitalization (Tables)	9 Months Ended
	Sep. 30, 2015
Stockholders' Equity Note [Abstract]
Summary of distributions paid in cash and pursuant to the DRP	The following table summarizes distributions paid in cash and pursuant to the DRP for the nine months ended September 30, 2015. Period (1) Cash Distribution (1) Distribution Paid Pursuant Total Amount of Distribution (1) Third Quarter 2015 $ 16,959 $ 5,838 $ 22,797 Total $ 16,959 $ 5,838 $ 22,797 (1) Distributions are paid on a monthly basis. Distributions for all record dates in a given month are paid approximately 15 days following the end of such month. (2) Amount of distributions paid in shares of common stock pursuant to our distribution reinvestment plan.

Organization (Details Narrative

Organization (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2015	Jul. 02, 2015	Dec. 31, 2014
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Common stock issued under DRP	4,210,526
Common stock, shares issued	260,373		8,000
Common stock offering price, dollars per share	$ 25
Dividend Reinvestment Plan Common Stock Price, dollars per share	$ 23.75
Maximum amount of primary offering, in shares	40,000,000
Subscriptions held in escrow account		$ 2,000,000
Number of stock issued for public offering	242,373
Value of stock issued for public offering	$ 6,053,189

Summary of Significant Accoun17

Summary of Significant Accounting Policies (Details Narrative)	Sep. 30, 2015
Accounting Policies [Abstract]
REIT distribution threshold for federal corporate income tax benefit	90.00%

Capitalization (Details Narrati

Capitalization (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Common stock, shares authorized	999,999,000	999,999,000
Preferred stock, shares authorized	100,000,000	100,000,000
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Value of shares issued	$ 6,053,189
Number of shares issued	242,373
Outstanding shares of restricted stock	1,000
Distribution paid per share	$ 0.00479
Annualized distribution rate	7.00%
Share price (in dollars per share)	$ 25
Sponsor [Member]
Value of shares issued	$ 200,000
Number of shares issued	8,000
Share price (in dollars per share)	$ 25

Capitalization (Details)

Capitalization (Details) - USD ($)		3 Months Ended	9 Months Ended
		Sep. 30, 2015	Sep. 30, 2015
Stockholders' Equity Note [Abstract]
Cash distributions	[1]	$ 16,959	$ 16,959
Distributions paid pursuant to DRP	[1],[2]	5,838	5,838
Total amount of distributions	[1]	$ 22,797	$ 22,797
[1]	Distributions are paid on a monthly basis. Distributions for all record dates in a given month are paid approximately 15 days following the end of such month.
[2]	Amount of distributions paid in shares of common stock pursuant to our distribution reinvestment plan.

Related Party Arrangements (Det

Related Party Arrangements (Details Narrative)	9 Months Ended
	Sep. 30, 2015USD ($)
Percentage of acquisition fee (in percent)	1.50%
Debt financing fee percentage	1.00%
Debt financing fee refinanced percentage	0.75%
Advisor expense reimbursement - alternative 1	2.00%
Advisor expense reimbursement - alternative 2	25.00%
Total operating expenses incurred	$ 248,234
Operating expenses not reimbursable	$ 0
Monthly hotel management fee percentage	4.00%
Incentive fee percentage	15.00%
Total investment of managed property	8.50%
Payments for commissions	$ 412,394
Dealer manager fees	116,212
Offering costs	$ 938,854
Advisor [Member]
Percent of organization and offering costs (in percent)	15.00%
Monthly asset management fee percentage	0.833%
Percentage of disposition fee on sale of each property (in percent)	3.00%
Maximum percentage of disposition fee and real estate commissions (in percent)	6.00%
Operating expenses incurred by Advisor	$ 202,824
Asset management fee percentage	1.00%
Related party transaction amount exceeded limitation	$ 202,234
Moody Securities [Member]
Percentage of selling commisssion on gross offering (in percent)	7.00%
Percentage of dealers manager fee on gross offering (in percent)	3.00%

Incentive Award Plan (Details N

Incentive Award Plan (Details Narrative) - USD ($)	2 Months Ended	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2015
Stock-based compensation	$ 0	$ 38,462
Independent directors compensation plan [Member] | Restricted stock [Member] | Board of Directors [Member]
Entitlement number of shares issued, minimum offering exceeds certain specified limit		5,000
Minimum offering amount threshold		$ 2,000,000
Number of shares issued to new joining directors		5,000
Entitlement number of shares issued , Reelection of directors at annual general meeting		2,500
Restricted shares granted		10,000
Weighted average grant date fair value of restricted stock		$ 25
Nonvested of restricted stock common stock		10,000

Subordinated Participation In22

Subordinated Participation Interest (Details Narrative)	Sep. 30, 2015
Subordinated Participation Interest
Maximum percentage of income received to special unit holders	15.00%
Percentage of additional operating income received	6.00%

Subsequent Events (Details Narr

Subsequent Events (Details Narrative) - USD ($)		Oct. 31, 2015	Oct. 15, 2015	Sep. 30, 2015	Sep. 30, 2015	Sep. 30, 2015
Declared Distribution	[1],[2]				$ 5,838	$ 5,838
Cash distributions	[2]				$ 16,959	$ 16,959
Subsequent Event [Member]
Estimated value of common stock (per share)		$ 25.03
Declared Distribution		$ 43,159		$ 32,442
Cash distributions			$ 22,257
Stock distributions			10,185
Subsequent Event [Member] | Hotel [Member]
Residence Inn Austin purchase			25,550,000
Payments to acquire Residence Inn Austin			$ 16,575,000
[1]	Amount of distributions paid in shares of common stock pursuant to our distribution reinvestment plan.
[2]	Distributions are paid on a monthly basis. Distributions for all record dates in a given month are paid approximately 15 days following the end of such month.