Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Aug. 10, 2017 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | RW Holdings NNN REIT, Inc. | |
Entity Central Index Key | 1,645,873 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 6,863,449 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Real estate investments: | ||
Land | $ 16,182,071 | $ 5,369,238 |
Building and improvements | 61,597,935 | 24,243,072 |
Tenant origination and absorption costs | 6,581,896 | 3,632,731 |
Total investments in real estate property | 84,361,902 | 33,245,041 |
Accumulated depreciation and amortization | (1,649,463) | (493,185) |
Total investments in real estate property, net | 82,712,439 | 32,751,856 |
Investment in Rich Uncles REIT I | 3,555,268 | 3,523,809 |
Real estate investments, net | 86,267,707 | 36,275,665 |
Cash and cash equivalents | 2,544,784 | 3,431,769 |
Restricted cash | 1,859,899 | 245,604 |
Tenant receivables | 557,482 | 114,320 |
Above-market leases, net | 729,816 | 148,577 |
Due from affiliates | 42,925 | 108,433 |
Purchase and other deposits | 1,625,100 | 500,000 |
Prepaid expenses and other assets | 949,566 | 478,192 |
TOTAL ASSETS | 94,577,279 | 41,302,560 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Mortgage notes payable, net | 25,975,486 | 7,113,701 |
Unsecured credit facility, net | 9,232,184 | 10,156,685 |
Accounts payable, accrued expenses and other liabilities | 1,622,708 | 470,236 |
Below-market leases, net | 502,326 | 150,767 |
Due to affiliates | 278,611 | 383,422 |
Interest rate swap derivatives | 104,633 | 0 |
Investor deposits | 0 | 582,516 |
Share repurchases payable | 310,676 | 17,467 |
TOTAL LIABILITIES | 38,026,624 | 18,874,794 |
Redeemable common stock | 138,429 | 196,660 |
Preferred stock, $0.001 par value, 50,000,000 shares authorized, no shares issued and outstanding | 0 | 0 |
Common stock $0.001 par value, 200,000,000 shares authorized, 6,184,560 and 2,458,881 shares issued and outstanding as of June 30, 2017 and December 31, 2016, respectively. | 6,186 | 2,458 |
Additional paid-in-capital | 59,545,077 | 23,643,435 |
Cumulative distributions and net losses | (3,139,037) | (1,414,787) |
TOTAL STOCKHOLDERS' EQUITY | 56,412,226 | 22,231,106 |
Commitments and contingencies (Note 8) | ||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 94,577,279 | $ 41,302,560 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2017 | Dec. 31, 2016 |
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 50,000,000 | 50,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 |
Common Stock, Shares, Issued | 6,184,560 | 2,458,881 |
Common Stock, Shares, Outstanding | 6,184,560 | 2,458,881 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Revenue: | ||||
Rental income | $ 1,366,901 | $ 41,466 | $ 2,063,595 | $ 41,466 |
Tenant recoveries | 362,141 | 0 | 525,646 | 0 |
Total revenue | 1,729,042 | 41,466 | 2,589,241 | 41,466 |
Expenses: | ||||
Fees to affiliates (Note 7) | 196,856 | 481,688 | 308,154 | 481,688 |
General and administrative | 831,179 | 6,290 | 2,018,023 | 6,380 |
Depreciation and amortization | 725,419 | 33,489 | 1,156,278 | 33,489 |
Interest expense | 438,168 | 40,650 | 570,005 | 40,650 |
Property expenses (Note 7) | 375,963 | 0 | 555,741 | 0 |
Acquisition costs | 0 | 73,028 | 0 | 73,028 |
Total expenses | 2,567,585 | 635,145 | 4,608,201 | 635,235 |
Less: Expenses reimbursed/fees waived by Sponsor or affiliates (Note 7) | (722,118) | 0 | (1,437,969) | 0 |
Net expenses | 1,845,467 | 635,145 | 3,170,232 | 635,235 |
Other income: | ||||
Interest income | 613 | 0 | 888 | 0 |
Equity in earnings from Rich Uncles REIT I | 159,399 | 0 | 167,356 | 0 |
Total other income | 160,012 | 0 | 168,244 | 0 |
Net income (loss) | $ 43,587 | $ (593,679) | $ (412,747) | $ (593,769) |
Net income (loss) per share, basic and diluted | $ 0.01 | $ (29.68) | $ (0.09) | $ (29.69) |
Weighted-average number of common shares outstanding, basic and diluted | 5,295,203 | 20,000 | 4,381,066 | 20,000 |
Dividends declared per common share | $ 0.175 | $ 0 | $ 0.350 | $ 0 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Stockholders' Equity - 6 months ended Jun. 30, 2017 - USD ($) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] |
Balance at Dec. 31, 2016 | $ 22,231,106 | $ 2,458 | $ 23,643,435 | $ (1,414,787) |
Balance (in shares) at Dec. 31, 2016 | 2,458,881 | |||
Issuance of common stock | 37,937,373 | $ 3,794 | 37,933,579 | 0 |
Issuance of common stock (in shares) | 3,793,737 | |||
Offering costs | (1,138,121) | $ 0 | (1,138,121) | 0 |
Distributions declared | (1,311,503) | 0 | 0 | (1,311,503) |
Stock compensation expense | 65,000 | $ 6 | 64,994 | 0 |
Stock compensation expense (in shares) | 6,500 | |||
Repurchase of common stock | (723,904) | $ (72) | (723,832) | 0 |
Repurchase of common stock (in shares) | (74,558) | |||
Net loss | (412,747) | $ 0 | 0 | (412,747) |
Reclassifications to redeemable common stock | (234,978) | 0 | (234,978) | 0 |
Balance at Jun. 30, 2017 | $ 56,412,226 | $ 6,186 | $ 59,545,077 | $ (3,139,037) |
Balance (in shares) at Jun. 30, 2017 | 6,184,560 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (412,747) | $ (593,769) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 1,156,278 | 33,489 |
Stock compensation expense | 65,000 | 0 |
Deferred rents | (176,513) | 2,452 |
Amortization of deferred financing costs | 36,504 | 1,186 |
Amortization of above-market lease | 35,248 | 1,389 |
Amortization of below-market leases | (13,758) | 0 |
Unrealized losses (gain) on interest rate swap valuation | 104,633 | 0 |
Equity in earnings from investment in Rich Uncles REIT I | (167,356) | 0 |
Distributions from investment in Rich Uncles REIT I | 135,896 | 0 |
Change in operating assets and liabilities: | ||
Tenant receivables | (272,112) | 0 |
Due from affiliates | 79,219 | 0 |
Prepaid expenses and other assets | (5,576) | 0 |
Accounts payable, accrued expenses and other liabilities | 635,109 | 34,275 |
Due to affiliates | 231,737 | 577,418 |
Net cash provided by operating activities | 1,431,562 | 56,440 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Acquisition of real estate investments | (49,134,241) | (15,731,000) |
Payment of acquisition fees to affiliate | (1,771,482) | 0 |
Refundable purchase deposits | (1,500,000) | 0 |
Additions to real estate investments | (193,191) | 0 |
Investment in Rich Uncles REIT I | 0 | (2,000,000) |
Net cash used in investing activities | (52,598,914) | (17,731,000) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Borrowings from unsecured credit facility | 33,140,000 | 11,000,000 |
Repayments of unsecured credit facility | (34,065,618) | 0 |
Proceeds from mortgage notes payable | 19,454,988 | 7,319,700 |
Principal payments on mortgage notes payable | (86,898) | 0 |
Refundable loan deposits | (125,100) | 0 |
Payments of deferred financing costs | (541,691) | (171,166) |
Proceeds from issuance of common stock and investor deposits | 36,295,673 | 0 |
Payments of offering costs | (1,200,469) | 0 |
Payments to redeem common stock | (723,904) | 0 |
Distributions paid to common stockholders | (252,319) | 0 |
Net cash provided by financing activities | 51,894,662 | 18,148,534 |
NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 727,310 | 473,974 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD | 3,431,769 | 200,815 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD | 2,544,784 | 674,789 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid for interest | 350,750 | 10,589 |
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES | ||
Transfers of redeemable common stock | 234,978 | 7,500 |
Distributions paid to common stockholders through common stock issuances pursuant to the distribution reinvestment plan | 1,059,184 | 0 |
Purchase deposits applied to acquisition of real estate | 500,000 | 0 |
Increase in share repurchases payable | 293,209 | 17,467 |
Payable to seller for acquisition of real estate investment | $ 117,803 | $ 0 |
BUSINESS AND ORGANIZATION
BUSINESS AND ORGANIZATION | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Business Description and Basis of Presentation [Text Block] | NOTE 1. BUSINESS AND ORGANIZATION RW Holdings NNN REIT, Inc. (the “Company”) was incorporated on May 14, 2015 as a Maryland corporation. The Company was originally incorporated under the name Rich Uncles Real Estate Investment Trust, Inc., but amended its name on October 19, 2015 to Rich Uncles NNN REIT, Inc. and again on August 14, 2017 to RW Holdings NNN REIT, Inc. As of June 30, 2017, the Company has the authority to issue 250,000,000 200,000,000 0.001 50,000,000 0.001 10.00 500 The Company holds its investments in real property through special purpose wholly owned limited liability companies or through Rich Uncles NNN Operating Partnership, LP, a Delaware limited partnership (the “Operating Partnership”). The Operating Partnership was formed on January 28, 2016. The Company is the sole general partner of, and owns a 99 1 The Company is externally managed by its advisor, Rich Uncles NNN REIT Operator, LLC (the “Advisor”), a Delaware limited liability company wholly owned by the Company’s sponsor, Rich Uncles, LLC (the “Sponsor”), a Delaware limited liability company whose members include Harold Hofer, Howard Makler, and Ray Wirta. On June 24, 2015 and December 31, 2015, the Company issued 10,000 10.00 On July 15, 2015, the Company filed a registration statement on Form S-11 with the Securities and Exchange Commission (the “SEC”) to register an initial public offering of its common stock to offer a maximum of $ 900,000,000 100,000,000 On July 20, 2016, the Company began offering shares to the public and through June 30, 2017, the Company had sold 6,231,455 118,418 62,314,551 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information as contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“Codification”), and in conjunction with rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the unaudited Condensed Consolidated Financial Statements do not include certain information and footnote disclosures required by GAAP for audited financial statements. In the opinion of management, the unaudited Condensed Consolidated Financial Statements reflect all adjustments which are of a normal and recurring nature, necessary for a fair and consistent presentation of the financial position and the results for the interim period presented. Operating results for the three and six months ended June 30, 2017 are not necessarily indicative of the results that may be expected for the year ended December 31, 2017. The accompanying unaudited interim financial information should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2016 as filed with the SEC. The unaudited Condensed Consolidated Financial Statements include the accounts of the Company, the Operating Partnership, and directly wholly owned subsidiaries. All significant intercompany balances and transactions are eliminated in consolidation. Certain amounts in the Company’s prior period consolidated financial statements have been reclassified to conform to the current period presentation. These reclassifications have not changed the results of operations of prior periods. For all periods presented, other comprehensive income (loss) is the same as net income (loss). The Company enters into derivative instruments for risk management purposes to hedge its exposure to cash flow variability caused by changing interest rates on its variable rate mortgage notes payable. The Company records these derivative instruments at fair value in the accompanying consolidated balance sheets. The Company’s mortgage derivative instruments have not been designated as effective hedges and therefore the changes in fair value are recorded as gain or loss on derivative instruments in the accompanying consolidated statement of operations. The Company’s investment in Rich Uncles REIT I (“REIT I”) represented an approximate 4.36 4.39 30,038 79,271 18,813 7,957 159,399 120,165 167,356 109,309 The following is summarized financial information for REIT I: Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 Total revenue $ 3,507,951 $ 1,440,457 $ 6,234,218 $ 2,245,359 Net income (loss) $ 937,414 $ (1,268,078) $ 1,331,862 $ (2,400,993) Use of Estimates The preparation of the unaudited Condensed Consolidated Financial Statements and the accompanying notes thereto in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited Condensed Consolidated Financial Statements and accompanying notes. Actual results may differ from those estimates. New Accounting Standards Issued and Adopted In January 2017, the FASB issued Accounting Standards Update (“ASU”) No. 2017-01 , Business Combinations (Topic 805): Clarifying the Definition of a Business In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash New Accounting Standards Recently Issued and Not Yet Adopted In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) Revenue Recognition (Topic 605) Leases (Topic 840). Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) |
REAL PROPERTY
REAL PROPERTY | 6 Months Ended |
Jun. 30, 2017 | |
Real Estate [Abstract] | |
Real Estate Disclosure [Text Block] | NOTE 3. REAL PROPERTY Property Location Acquisition Property Land, Tenant Accumulated Total Accredo Orlando, FL 6/15/2016 Office $ 9,850,055 $ 1,053,638 $ (512,437) $ 10,391,256 Walgreens Stockbridge, GA 6/21/2016 Retail 4,147,948 705,423 (341,623) 4,511,748 Dollar General Litchfield, ME 11/4/2016 Retail 1,281,812 116,302 (25,152) 1,372,962 Dollar General Wilton, ME 11/4/2016 Retail 1,543,776 140,653 (32,190) 1,652,239 Dollar General Thompsontown, PA 11/4/2016 Retail 1,199,860 106,730 (24,167) 1,282,423 Dollar General Mt. Gilead, OH 11/4/2016 Retail 1,174,188 111,847 (23,171) 1,262,864 Dollar General Lakeside, OH 11/4/2016 Retail 1,112,872 100,857 (23,780) 1,189,949 Dollar General Castalia, OH 11/4/2016 Retail 1,102,086 86,408 (23,105) 1,165,389 Dana Cedar Park, TX 12/27/2016 Industrial 8,392,906 1,210,874 (265,729) 9,338,051 Northrop Grumman Melbourne, FL 3/7/2017 Office 12,382,991 1,341,198 (228,383) 13,495,806 exp US Services Maitland, FL 3/27/2017 Office 5,920,121 388,248 (63,332) 6,245,037 Harley Bedford, TX 4/13/2017 Retail 13,178,286 - (64,063) 13,114,222 Wyndham Summerlin, NV 6/22/2017 Office 9,447,270 669,232 (12,106) 10,104,396 Williams Sonoma Summerlin, NV 6/22/2017 Office 7,045,835 550,486 (10,225) 7,586,097 $ 77,780,006 $ 6,581,896 $ (1,649,463) $ 82,712,439 Current Acquisitions Property Acquisition Land Buildings and Tenant Above- Below- Total Northrop Grumman 3/7/2017 $ 1,191,024 $ 11,191,967 $ 1,341,199 $ - $ - $ 13,724,190 exp US Services 3/27/2017 785,801 5,134,320 388,248 616,486 - 6,924,855 Harley 4/13/2017 1,145,196 12,033,090 - - - 13,178,286 Wyndham 6/22/2017 4,144,069 5,303,201 669,232 - - 10,116,502 Williams Sonoma 6/22/2017 3,546,744 3,499,091 550,486 - (364,554) 7,231,767 $ 10,812,834 $ 37,161,669 $ 2,949,165 $ 616,486 $ (364,554) $ 51,175,600 Purchase price $ 51,175,600 Purchase deposits applied (500,000) Acquisition fees to affiliates (1,483,571) Payable to seller for acquisition of real estate (117,803) Refund from escrow 60,015 Cash paid for acquisition of real estate $ 49,134,241 The purchase price allocations reflected in the accompanying unaudited Condensed Consolidated Financial Statements is based upon estimates and assumptions that are subject to change that may impact the fair value of the assets and liabilities above (including real estate investments, other assets and accrued liabilities). Property Lease Expiration Northrop Grumman 5/31/2021 exp US Services 11/30/2026 Harley 4/12/2042 Wyndham 2/29/2025 Williams Sonoma 10/31/2022 The Company recorded these acquisitions as asset acquisitions and capitalized $ 1,038,776 1,723,251 965,368 1,066,814 Operating Leases Property and Location Net Carrying Percentage of Accredo, FL $ 10,391,256 10.99 % Northrop Grumman, FL $ 13,495,806 14.27 % Harley, TX $ 13,114,222 13.87 % Wyndham, NV $ 10,104,396 10.68 % At June 30, 2017 and December 31, 2016, tenant receivables included $ 201,026 29,975 July 1, 2017 through December 31, 2017 $ 2,870,956 2018 6,732,550 2019 6,884,632 2020 7,035,980 2021 5,563,272 2022 4,556,702 Thereafter 20,331,662 $ 53,975,754 Revenue Concentration Property and Location Revenue Percentage of Accredo, FL $ 531,744 20.54 % Dana, TX $ 465,089 17.97 % Northrop, FL $ 459,047 17.73 % Harley, TX $ 326,102 12.60 % Property and Location Effective Percentage of Accredo, FL $ 899,010 13.56 % Dana, TX $ 665,917 10.05 % Northrop, FL $ 1,162,274 17.53 % exp US Services, FL $ 681,077 10.27 % Harley, TX $ 900,000 13.58 % Wyndham, NV $ 798,827 12.05 % *Effective Annualized Base Rent is calculated based on the monthly base rent at June 30, 2017 for twelve months. As of June 30, 2017, no other tenant accounted for more than 10% of annualized base rent. Intangibles Tenant Origination Above-Market Below-Market Cost $ 6,581,896 $ 783,115 $ (516,164) Accumulated amortization (608,394) (53,299) 13,838 Net amount $ 5,973,502 $ 729,816 $ (502,326) Tenant Above-Market Below-Market July 1, 2017 through December 31, 2017 $ 559,234 $ 48,523 $ (44,772) 2018 1,118,468 97,045 (89,544) 2019 1,118,468 97,045 (89,544) 2020 1,118,468 97,045 (89,544) 2021 702,209 78,994 (89,544) 2022 412,034 63,719 (69,853) Thereafter 944,621 247,445 (29,525) $ 5,973,502 $ 729,816 $ (502,326) Weighted-Average Remaining Amortization Period 6.33 years 8.43 years 5.80 years |
DEBT
DEBT | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | NOTE 4. DEBT Mortgage Notes Payable Collateral Principal Deferred Net Contractual Effective Loan Accredo/Walgreens properties $ 7,200,707 $ (142,659) $ 7,058,048 3.95% 3.95% 7/1/2021 Dana property 4,747,013 (134,248) 4,612,765 4.56% 4.56% 4/1/2023 Six Dollar General properties (2) 3,976,515 (171,369) 3,805,146 4.69% 4.69% 4/1/2022 Wyndham property (3) 5,970,000 (115,276) 5,854,724 One-month LIBOR + 2.05% 4.34% 6/5/2027 Williams Sonoma property (3) 4,740,000 (95,197) 4,644,803 One-month LIBOR + 2.05% 4.05% 6/5/2022 $ 26,634,235 $ (658,749) $ 25,975,486 (1) Contractual interest rate represents the interest rate in effect under the mortgage note payable as of June 30, 2017. Effective interest rate is calculated as the actual interest rate in effect as of June 30, 2017 (consisting of the contractual interest rate and the effect of the interest rate swap, if applicable). For further information regarding the Company’s derivative instruments, see Note 5. (2) The loan is cross-collateralized with all six Dollar General properties owned by the Company and one Dollar General property owned by REIT I. The deeds of trust for the Company’s six Dollar General properties and the deed of trust for the REIT I Dollar General property contain cross-collateralization and cross default provisions. At June 30, 2017, the outstanding principal balance of the loan on REIT I’s one Dollar General property was $ 636,916 (3) The loans on each of the Williams Sonoma and Wyndham properties (collectively, the Property) located in Summerlin, Nevada were originated by Nevada State Bank (Bank). The loans are collateralized by a deed of trust and a security agreement with assignment of rents and fixture filing. In addition, the individual loans are subject to a cross collateralization and cross default agreement whereby any default under, or failure to comply with the terms of any one or both of the loans is an event of default under the terms of both loans. The value of the Property must be in an amount sufficient to maintain a loan to value ratio of no more than 60%. If the loan to value ratio is ever less than 60%, the borrower shall, upon the Bank’s written demand, reduce the principal balance of the loans so that the loan to value ratio is no more than 60 Unsecured Credit Facility On June 7, 2016, the Operating Partnership (“Borrower”), entered into a credit agreement (the “Unsecured Credit Agreement”) with Pacific Mercantile Bank (“Lender”). Pursuant to the Unsecured Credit Agreement, the Borrower has a $ 12,000,000 th June 15, 2017 4.98 The Unsecured Credit Agreement is guaranteed in the amount of $ 12,000,000 60,000,000 We are negotiating the extension of the maturity date of the Unsecured Credit Agreement and we expect to complete this process prior to its current October 28, 2017 maturity date. All Debt Agreements Pursuant to the terms of the mortgage notes payable and the Unsecured Credit Agreement, the Company and/or the Operating Partnership are subject to certain financial loan covenants. The Company and/or the Operating Partnership was in compliance with all financial covenants of these loan agreement as of August 9, 2017. Mortgage Note Unsecured Total Remaining 2017 $ 226,844 $ 9,232,184 $ 9,459,028 2018 465,064 - 465,064 2019 482,054 - 482,054 2020 498,925 - 498,925 2021 7,068,308 - 7,068,308 2022 8,234,746 - 8,234,746 2023 9,658,294 - 9,658,295 Total principal $ 26,634,235 $ 9,232,184 $ 35,866,420 Three Months Ended Six Months Ended 2017 2016 2017 2016 Mortgage notes payable Interest expense (1) $ 184,179 $ 10,589 $ 265,837 $ 10,589 Amortization of deferred financing costs 24,998 1,155 35,386 1,155 Unrealized loss (gain) on interest rate swaps (see Note 5) 104,633 - 104,633 - Unsecured credit facility Interest expense 103,877 28,875 143,031 28,875 Amortization of deferred financing costs 481 31 1,118 31 Forfeited loan fee 20,000 - 20,000 - Total interest expense $ 438,168 $ 40,650 $ 570,005 $ 40,650 (1) As of June 30, 2017, no payments had yet been made with respect to the Company’s interest rate swaps. Accrued interest payable of $ 2,533 |
INTEREST RATE SWAP DERIVATIVES
INTEREST RATE SWAP DERIVATIVES | 6 Months Ended |
Jun. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities Disclosure [Text Block] | NOTE 5. INTEREST RATE SWAP DERIVATIVES The primary goal of the Company’s risk management practices related to interest rate risk is to prevent changes in interest rates from adversely impacting the Company’s ability to achieve its investment return objectives. The Company does not enter into derivatives for speculative purposes. The Company enters into interest rate swaps as a fixed rate payer to mitigate its exposure to rising interest rates on its variable rate mortgage notes payable. The value of interest rate swaps is primarily impacted by interest rates, market expectations about interest rates, and the remaining life of the applicable instrument. In general, increases in interest rates, or anticipated increases in interest rates, will increase the value of the fixed rate payer position and decrease the value of the variable rate payer position. As the remaining life of the interest rate swap decreases, the value of both positions will generally move towards zero. During June 2017, the Company (or wholly owned limited liability company subsidiaries) entered into interest rate swap agreements with amortizing notational amounts relating to two of its mortgage notes payable. June 30, 2017 Derivative Number of Notional Amount Reference Rate as Weighted Average Weighted Average Interest Rate 2 $ 10,710,000 One-month LIBOR + applicable spread/Fixed at 4.05%-4.34% 4.21 % 8.3 years (i) The notional amount of the Company’s swaps decrease each month to correspond to the outstanding principal balance on the related mortgage. The maximum notional amount is shown above. The minimum notional amount (outstanding principal balance at the maturity date) as of June 30, 2017 was $ 9,083,700 June 30, 2017 Derivative Instrument Balance Sheet Location Number of Fair Value Interest Rate Swaps Liability Interest rate swap derivatives, at fair value 2 $ (104,633) The change in fair value of a derivative instrument that is not designated as a cash flow hedge is recorded as interest expense in the accompanying consolidated statements of operations. None of the Company’s derivatives at June 30, 2017 were designated as hedging instruments; therefore the net realized loss recognized on interest rate swaps of $ 104,633 |
FAIR VALUE DISCLOSURES
FAIR VALUE DISCLOSURES | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures [Text Block] | NOTE 6. FAIR VALUE DISCLOSURES The fair value for certain financial instruments is derived using valuation techniques that involve significant management judgment. The price transparency of financial instruments is a key determinant of the degree of judgment involved in determining the fair value of the Company’s financial instruments. Financial instruments for which actively quoted prices or pricing parameters are available and for which markets contain orderly transactions will generally have a higher degree of price transparency than financial instruments for which markets are inactive or consist of non-orderly trades. The Company evaluates several factors when determining if a market is inactive or when market transactions are not orderly. The following is a summary of the methods and assumptions used by management in estimating the fair value of each class of financial instrument for which it is practicable to estimate the fair value: Cash and cash equivalents, restricted cash, tenant receivables, due from affiliates, purchase and other deposits, prepaid expenses and other assets, accounts payable, accrued expenses and other liabilities and due to affiliates: Derivative Instruments Unsecured Credit Facility Mortgage notes payable: June 30, 2017 December 31,2016 Face value Carrying Fair value Face Value Carrying Fair Value $ 26,634,235 $ 25,975,486 $ 26,716,448 $ 7,266,145 $ 7,113,701 $ 7,266,145 Disclosures of the fair values of financial instruments are based on pertinent information available to the Company as of June 30, 2017 and require a significant amount of judgment. The actual value could be materially different from the Company’s estimate of value. Recurring Basis Total Quoted Prices in Significant Other Significant Unobservable Interest rate swap liabilities $ 107,166 $ - $ 107,166 $ - |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | NOTE 7. RELATED PARTY TRANSACTIONS The Company has entered into an agreement (the “Advisory Agreement”) with the Advisor. This agreement entitles the Advisor to specified fees upon the provision of certain services with regard to the investment of funds in real estate investments, the management of those investments, among other services, and the disposition of investments, as well as entitles the Advisor to reimbursement of organization and offering costs incurred by the Advisor or Sponsor on behalf of the Company, such as expenses related to the Registered Offering, and certain costs incurred by the Advisor or Sponsor in providing services to the Company. In addition, the Advisor is entitled to certain other fees, including an incentive fee upon achieving certain performance goals, as detailed in the Advisory Agreement. The Sponsor also serves as the sponsor for Rich Uncles REIT I. During the six months ended June 30, 2017 and 2016, no other business transactions occurred between the Company and Rich Uncles REIT I, other than described below or elsewhere herein, and those relating to the Company’s investment in Rich Uncles REIT I. Three Six months Three Six June 30, 2017 June 30, 2017 June 30, 2016 December 31, 2016 Incurred Incurred Receivable Payable Incurred Incurred Receivable Payable Expensed Acquisition fees $ - $ - $ - $ - $ 474,122 $ 474,122 $ - $ - Asset management fees (2) 196,856 308,154 - 260,692 7,566 7,566 - 29,577 Fees to affiliates 196,856 308,154 481,688 481,688 Property management fees* 622 622 - 622 - - - - Expense reimbursements from Sponsor (1) (672,904) (1,360,930) 643 - - - 79,862 - Waiver of asset management fees (2) (49,214) (77,039) - - - - - - Capitalized Acquisition fees 882,971 1,483,571 13,711 - - - - 274,200 Financing fees - 87,450 - - - - - - Additional paid-in-capital Reimbursable organizational and offering expenses (3) 529,991 1,138,121 - 17,297 - - - 79,645 Other Costs reimbursable from Rich Uncles REIT I (4) - - 28,571 - - - 28,571 - $ 888,322 $ 1,579,949 $ 42,925 $ 278,611 $ 481,688 $ 481,688 $ 108,433 $ 383,422 * Property management fees are presented as property operating expenses. (1) The Company records payroll costs related to Company employees that answer questions from prospective shareholders. The Sponsor has agreed to reimburse the Company for these investor relations payroll costs which the Sponsor considers to be offering expenses in accordance with the Advisory Agreement. (2) To the extent the Advisor elects, in its sole discretion to defer all or any portion of its monthly asset management fee, the Advisor will be deemed to have waived, not deferred, that portion up to 0.025 49,214 77,039 (3) As of June 30, 2017, the Sponsor had incurred $ 4,452,858 3 (4) The Company incurred $ 28,571 Organizational and Offering Expenses Pursuant to the Advisory Agreement, the Company is obligated to reimburse the Sponsor or its affiliates for organizational and offering expenses (as defined by the Sponsor) paid by the Sponsor on behalf of the Company. The Company will reimburse the Sponsor for organizational and offering expenses up to 3.0% of gross offering proceeds. The Sponsor and affiliates will be responsible for any organizational and offering expenses to the extent they exceed 3.0% of gross offering proceeds. As of June 30, 2017, the Sponsor has incurred organizational and offering expenses in excess of 3.0% of the gross offering proceeds received by the Company. To the extent the Company has more gross offering proceeds from future shareholders, the Company will be obligated to reimburse the Sponsor. As the amount of future gross offering proceeds is uncertain, the amount the Company is obligated to reimburse to the Sponsor is uncertain. As of June 30, 2017, the Company has reimbursed the Sponsor $ 1,858,140 1,875,437 17,297 Investor relations payroll expense reimbursement from Sponsor The Company employs investor personnel that answer inquiries from potential investors regarding the Company and/or its prospectus. The payroll expense associated with the investor relations personnel is reimbursed by the Sponsor. The Sponsor considers these payroll costs to be offering expenses. The total amount of such payroll expense reimbursements was $ 672,904 1,360,930 Acquisition Fees The Company shall pay the Advisor a fee in an amount equal 3.0% of Company’s contract purchase price of its properties, as defined, as acquisition fees. The total of all acquisition fees and acquisition expenses shall be reasonable, and shall not exceed 6.0% of the contract price of the property. 882,971 1,483,571 Asset Management Fee The Company shall pay to the Advisor as compensation for the advisory services rendered to the Company, a monthly fee in an amount equal to 0.1% of the Company’s Average Invested Assets, as defined (the “Asset Management Fee”), as of the end of the preceding month. The Asset Management Fee shall be payable monthly on the last day of such month, or the first business day following the last day of such month. The Asset Management Fee, which must be reasonable in the determination of the Company’s independent directors at least annually, may or may not be taken, in whole or in part as to any year, in the sole discretion of the Advisor. All or any portion of the Asset Management Fee not paid as to any fiscal year shall be deferred without interest and may be paid in such other fiscal year as the Advisor shall determine. Additionally, to the extent the Advisor elects, in its sole discretion, to defer all or any portion of its monthly Asset Management Fee, the Advisor will be deemed to have waived, not deferred, that portion of its monthly Asset Management Fee that is up to 0.025 196,856 308,154 49,214 77,039 260,692 Financing Coordination Fee Other than with respect to any mortgage or other financing related to a property concurrent with its acquisition, if the Advisor or an affiliate provides a substantial amount of the services (as determined by a majority of the Company’s independent directors) in connection with the post-acquisition financing or refinancing of any debt that the Company obtains relative to a property, then the Company shall pay to the Advisor or such affiliate a financing coordination fee equal to 1.0 0 87,450 Property Management Fees If the Advisor or any of its affiliates provides a substantial amount of the property management services (as determined by a majority of the Company’s independent directors) for the Company’s properties, then the Company shall pay to the Advisor or such affiliate a property management fee equal to 1.5 622 622 Disposition Fees For substantial assistance in connection with the sale of properties, the Company shall pay to its Advisor or one of its affiliates 3.0% of the contract sales price, as defined, of each property sold; provided, however, that if, in connection with such disposition, commissions are paid to third parties unaffiliated with our Advisor or its affiliates, the disposition fees paid to our Advisor, our Sponsor, their affiliates and unaffiliated third parties may not exceed the lesser of the competitive real estate commission or 6% of the contract sales price. Leasing Commission Fees If a property or properties of the Company becomes unleased and the Advisor or any of its affiliates provides a substantial amount of the services (as determined by a majority of the Company’s independent directors) in connection with the Company’s leasing of the property or properties to unaffiliated third parties, then the Company shall pay to the Advisor or such affiliate leasing commissions equal to 6.0% of the rents due pursuant to such lease for the first ten years of the lease term; provided, however (i) if the term of the lease is less than ten years, such commission percentage will apply to the full term of the lease and (ii) any rents due under a renewal of a lease of an existing tenant upon expiration of the initial lease agreement (including any extensions provided for thereunder) shall accrue a commission of 3.0% in lieu of the aforementioned 6.0% commission. Other Operating Expense Reimbursement Under the prospectus, total operating expenses of the Company are limited to the greater of 2% of average invested assets or 25% of net income for the four most recently completed fiscal quarters (2%/25% Limitation). Operating expense reimbursements for the four fiscal quarters ended June 30, 2017 exceeded the 2%/25% Limitation. The Company’s conflicts committee approved the operating expenses above the 2%/25% Limitation, as they determined that the relationship of the Company’s operating expenses to average invested assets were justified for the four fiscal quarters ended June 30, 2017 given the costs of operating a public company and the early stage of the Company’s operations. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | NOTE 8. COMMITMENTS AND CONTINGENCIES Economic Dependency The Company depends on its Sponsor and its Advisor for certain services that are essential to the Company, including the sale of the Company’s shares of common stock, the identification, evaluation, negotiation, origination, acquisition and disposition of investments; management of the daily operations of the Company’s investment portfolio; and other general and administrative responsibilities. In the event that these companies are unable to provide the respective services, the Company will be required to obtain such services from other sources. Environmental As an owner of real estate, the Company is subject to various environmental laws of federal, state and local governments. Although there can be no assurance, the Company is not aware of any environmental liability that could have a material adverse effect on its financial condition or results of operations. However, changes in applicable environmental laws and regulations, the uses and conditions of properties in the vicinity of the Company’s properties, the activities of its tenants and other environmental conditions of which the Company is unaware with respect to the property could result in future environmental liabilities. Tenant Improvements Pursuant to lease agreements, the Company has an obligation to pay for $ 2,113,737 1,520,292 Legal Matters From time to time, the Company may become party to legal proceedings that arise in the ordinary course of its business. Other than the below, the Company is not a party to any legal proceeding, nor is the Company aware of any pending or threatened litigation that could have a material adverse effect on the Company’s business, operating results, cash flows or financial condition should such litigation be resolved unfavorably. The U.S. Securities and Exchange Commission (the “SEC”) is conducting an investigation related to the advertising and sale of securities by the Company in connection with the Registered Offering. The investigation is a non-public factfinding inquiry. It is neither an allegation of wrongdoing nor a finding that violations of law have occurred. In connection with the investigation, the Company and certain affiliates have received and responded to subpoenas from the SEC requesting documents and other information related to the Company and the Registered Offering. The SEC’s investigation is ongoing. The Company has cooperated and intends to continue to cooperate with the SEC in this matter. The Company is unable to predict the likely outcome of the investigation or determine its potential impact, if any, on the Company. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | NOTE 9. SUBSEQUENT EVENTS The Company evaluates subsequent events up until the date the Condensed Consolidated Financial Statements are issued. Distributions On July 11, 2017, the Company’s board of directors declared dividends based on daily record dates for the period June 1, 2017 through June 30, 2017 at a rate of $ 0.0019444 344,139 344,139 278,380 On August 1 0 0.0018817 371,708 371,708 303,083 Offering Status Through August 10, 2017, the Company had sold 6,958,810 69,588,103 176,548 1,765,478 Acquisitions On July 20, 2017, through a wholly owned subsidiary, the Company 51,800 7,400,000 281,862 Debt Financing On July 17, 2017, the Company obtained a $ 6,000,000 4.4 Redeemable common stock For the period from July 1, 2017 through August 9, 2017, the Company redeemed 133,661 1,296,476 Amendments to Charter On August 11, 2017, the board of directors approved and adopted amendments to its charter, which became effective August 14, 2017, to increase the authorized number of shares of the Company’s common stock, $ 0.001 400,000,000 100,000,000 0.001 Also on August 11, 2017, the board of directors approved and adopted a further amendment to the Company’s charter, which became effective August 14, 2017, to change the name of the Company from “Rich Uncles NNN REIT, Inc.” to “RW Holdings NNN REIT, Inc.” In addition, on August 11, 2017, the board of directors approved, pursuant to Section 7.7.10 of Article 7 of the Company’s charter, an increase in the “Common Shares Ownership Limit”, as such term is defined therein, from 8.0 9.8 Amendments to Advisory Agreement On August 11, 2017, the board of directors, and all members of the Conflicts Committee of the Board, which comprises all of its independent directors, approved the Company’s entry into a Second Amended and Restated Advisory Agreement (the “Restated Advisory Agreement”) by and among the Company, the Advisor and the Sponsor. The Restated Advisory Agreement amends and restates the Amended and Restated Advisory Agreement by and among the Company, the Advisor and the Sponsor, dated as of January 17, 2017, in order to reflect, in addition to certain ministerial and conforming changes, (1) amendments to the description of the Advisor’s duties, (2) an expansion of the definition of “Large Investors” to encompass investors with aggregate subscriptions or purchases for at least $1 million in one or more securities offerings sponsored by the Sponsor and to allow the Company to include as Large Investors clients of one or more financial advisors whose clients collectively meet the foregoing requirement, (3) revisions to the terms of certain compensation payable to the Advisor, including rebates paid by the Advisor to Large Investors with respect to the asset management fee, subordinated participation fee and liquidation fee, and a reduction in the applicable percentage used to calculate the subordinated participation fee from 40% to 30%, and (4) conforming edits throughout the Restated Advisory Agreement in connection with the designation and reclassification of the Company’s Class C common stock and Class S common stock described above. Class S Dividend Reinvestment Plan and Class S Share Repurchase Program On August 11, 2017, the board of directors approved and adopted, in connection with the Class S Offering described above, (i) a Dividend Reinvestment Plan (the “Class S DRP”) applicable to shares of the Company’s Class S common stock, and (ii) a Share Repurchase Program (the “Class S Repurchase Program”) applicable to shares of the Company’s Class S common stock. The Class S DRP provides any holder of Class S common stock who elects to participate the ability to reinvest dividends and other distributions declared and paid in respect of such participant’s Class S shares to the purchase of additional Class S shares for such participant. The Class S Repurchase Program provides eligible holders of Class S common stock purchased from time to time in the Class S Offering with limited, interim liquidity by enabling them to present for repurchase all or a portion of their Class S shares to the Company. Holders of Class S common stock are required to hold their Class S shares for a minimum of one year before they can participate in the program. The Company will repurchase Class S shares based on the then-applicable NAV per share and the Class S share repurchase will be limited to 2% of the Company’s aggregate applicable NAV per month, up to 5% of its aggregate NAV per quarter, with respect to such Class S shares. |
SUMMARY OF SIGNIFICANT ACCOUN16
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Consolidation, Policy [Policy Text Block] | Basis of Presentation and Principles of Consolidation The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information as contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“Codification”), and in conjunction with rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the unaudited Condensed Consolidated Financial Statements do not include certain information and footnote disclosures required by GAAP for audited financial statements. In the opinion of management, the unaudited Condensed Consolidated Financial Statements reflect all adjustments which are of a normal and recurring nature, necessary for a fair and consistent presentation of the financial position and the results for the interim period presented. Operating results for the three and six months ended June 30, 2017 are not necessarily indicative of the results that may be expected for the year ended December 31, 2017. The accompanying unaudited interim financial information should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2016 as filed with the SEC. The unaudited Condensed Consolidated Financial Statements include the accounts of the Company, the Operating Partnership, and directly wholly owned subsidiaries. All significant intercompany balances and transactions are eliminated in consolidation. |
Reclassification, Policy [Policy Text Block] | Reclassifications Certain amounts in the Company’s prior period consolidated financial statements have been reclassified to conform to the current period presentation. These reclassifications have not changed the results of operations of prior periods. |
Comprehensive Income, Policy [Policy Text Block] | Other Comprehensive Income For all periods presented, other comprehensive income (loss) is the same as net income (loss). |
Derivatives, Reporting of Derivative Activity [Policy Text Block] | Derivative Instruments The Company enters into derivative instruments for risk management purposes to hedge its exposure to cash flow variability caused by changing interest rates on its variable rate mortgage notes payable. The Company records these derivative instruments at fair value in the accompanying consolidated balance sheets. The Company’s mortgage derivative instruments have not been designated as effective hedges and therefore the changes in fair value are recorded as gain or loss on derivative instruments in the accompanying consolidated statement of operations. |
Equity Method Investments [Policy Text Block] | Equity in Earnings The Company’s investment in Rich Uncles REIT I (“REIT I”) represented an approximate 4.36 4.39 30,038 79,271 18,813 7,957 159,399 120,165 167,356 109,309 The following is summarized financial information for REIT I: Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 Total revenue $ 3,507,951 $ 1,440,457 $ 6,234,218 $ 2,245,359 Net income (loss) $ 937,414 $ (1,268,078) $ 1,331,862 $ (2,400,993) |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates The preparation of the unaudited Condensed Consolidated Financial Statements and the accompanying notes thereto in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited Condensed Consolidated Financial Statements and accompanying notes. Actual results may differ from those estimates. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Pronouncements New Accounting Standards Issued and Adopted In January 2017, the FASB issued Accounting Standards Update (“ASU”) No. 2017-01 , Business Combinations (Topic 805): Clarifying the Definition of a Business In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash New Accounting Standards Recently Issued and Not Yet Adopted In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) Revenue Recognition (Topic 605) Leases (Topic 840). Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) |
SUMMARY OF SIGNIFICANT ACCOUN17
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Equity Method Investments [Table Text Block] | The following is summarized financial information for REIT I: Three months ended June 30, Six months ended June 30, 2017 2016 2017 2016 Total revenue $ 3,507,951 $ 1,440,457 $ 6,234,218 $ 2,245,359 Net income (loss) $ 937,414 $ (1,268,078) $ 1,331,862 $ (2,400,993) |
REAL PROPERTY (Tables)
REAL PROPERTY (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Real Estate [Abstract] | |
Schedule of Real Estate Properties [Table Text Block] | As of June 30, 2017, the Company’s real estate portfolio consisted of fourteen properties in seven states consisting of eight retail, five office and one industrial property. The following table provides summary information regarding the Company’s real estate as of June 30, 2017: Property Location Acquisition Property Land, Tenant Accumulated Total Accredo Orlando, FL 6/15/2016 Office $ 9,850,055 $ 1,053,638 $ (512,437) $ 10,391,256 Walgreens Stockbridge, GA 6/21/2016 Retail 4,147,948 705,423 (341,623) 4,511,748 Dollar General Litchfield, ME 11/4/2016 Retail 1,281,812 116,302 (25,152) 1,372,962 Dollar General Wilton, ME 11/4/2016 Retail 1,543,776 140,653 (32,190) 1,652,239 Dollar General Thompsontown, PA 11/4/2016 Retail 1,199,860 106,730 (24,167) 1,282,423 Dollar General Mt. Gilead, OH 11/4/2016 Retail 1,174,188 111,847 (23,171) 1,262,864 Dollar General Lakeside, OH 11/4/2016 Retail 1,112,872 100,857 (23,780) 1,189,949 Dollar General Castalia, OH 11/4/2016 Retail 1,102,086 86,408 (23,105) 1,165,389 Dana Cedar Park, TX 12/27/2016 Industrial 8,392,906 1,210,874 (265,729) 9,338,051 Northrop Grumman Melbourne, FL 3/7/2017 Office 12,382,991 1,341,198 (228,383) 13,495,806 exp US Services Maitland, FL 3/27/2017 Office 5,920,121 388,248 (63,332) 6,245,037 Harley Bedford, TX 4/13/2017 Retail 13,178,286 - (64,063) 13,114,222 Wyndham Summerlin, NV 6/22/2017 Office 9,447,270 669,232 (12,106) 10,104,396 Williams Sonoma Summerlin, NV 6/22/2017 Office 7,045,835 550,486 (10,225) 7,586,097 $ 77,780,006 $ 6,581,896 $ (1,649,463) $ 82,712,439 |
Schedule Of Real Estate Property Acquisitions [Table Text Block] | During the six months ended June 30, 2017, the Company acquired the following properties: Property Acquisition Land Buildings and Tenant Above- Below- Total Northrop Grumman 3/7/2017 $ 1,191,024 $ 11,191,967 $ 1,341,199 $ - $ - $ 13,724,190 exp US Services 3/27/2017 785,801 5,134,320 388,248 616,486 - 6,924,855 Harley 4/13/2017 1,145,196 12,033,090 - - - 13,178,286 Wyndham 6/22/2017 4,144,069 5,303,201 669,232 - - 10,116,502 Williams Sonoma 6/22/2017 3,546,744 3,499,091 550,486 - (364,554) 7,231,767 $ 10,812,834 $ 37,161,669 $ 2,949,165 $ 616,486 $ (364,554) $ 51,175,600 |
Schedule Of Real Estate Investment Property Purchase Price [Table Text Block] | Purchase price $ 51,175,600 Purchase deposits applied (500,000) Acquisition fees to affiliates (1,483,571) Payable to seller for acquisition of real estate (117,803) Refund from escrow 60,015 Cash paid for acquisition of real estate $ 49,134,241 |
Schedule Of Lease Expiration Date [Table Text Block] | The noncancellable lease term of the properties acquired during the six months ended June 30, 2017 are as follows: Property Lease Expiration Northrop Grumman 5/31/2021 exp US Services 11/30/2026 Harley 4/12/2042 Wyndham 2/29/2025 Williams Sonoma 10/31/2022 |
Schedule Of Portfolios Asset Concentration [Table Text Block] | As of June 30, 2017, our portfolio’s asset concentration (greater than 10% of total assets) was as follows: Property and Location Net Carrying Percentage of Accredo, FL $ 10,391,256 10.99 % Northrop Grumman, FL $ 13,495,806 14.27 % Harley, TX $ 13,114,222 13.87 % Wyndham, NV $ 10,104,396 10.68 % |
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | As of June 30, 2017, the future minimum contractual rent payments due under the Company’s non-cancelable operating leases are as follows: July 1, 2017 through December 31, 2017 $ 2,870,956 2018 6,732,550 2019 6,884,632 2020 7,035,980 2021 5,563,272 2022 4,556,702 Thereafter 20,331,662 $ 53,975,754 |
Schedule Of Portfolios Revenue Concentration [Table Text Block] | For the six months ended June 30, 2017, our portfolio’s revenue concentration (greater than 10% total revenue) was as follows: Property and Location Revenue Percentage of Accredo, FL $ 531,744 20.54 % Dana, TX $ 465,089 17.97 % Northrop, FL $ 459,047 17.73 % Harley, TX $ 326,102 12.60 % |
Schedule of Rent Expense [Table Text Block] | Property and Location Effective Percentage of Accredo, FL $ 899,010 13.56 % Dana, TX $ 665,917 10.05 % Northrop, FL $ 1,162,274 17.53 % exp US Services, FL $ 681,077 10.27 % Harley, TX $ 900,000 13.58 % Wyndham, NV $ 798,827 12.05 % *Effective Annualized Base Rent is calculated based on the monthly base rent at June 30, 2017 for twelve months. |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | As of June 30, 2017, the Company’s intangibles were as follows: Tenant Origination Above-Market Below-Market Cost $ 6,581,896 $ 783,115 $ (516,164) Accumulated amortization (608,394) (53,299) 13,838 Net amount $ 5,973,502 $ 729,816 $ (502,326) |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | Amortization of intangible assets over the next five years is expected to be as follows: Tenant Above-Market Below-Market July 1, 2017 through December 31, 2017 $ 559,234 $ 48,523 $ (44,772) 2018 1,118,468 97,045 (89,544) 2019 1,118,468 97,045 (89,544) 2020 1,118,468 97,045 (89,544) 2021 702,209 78,994 (89,544) 2022 412,034 63,719 (69,853) Thereafter 944,621 247,445 (29,525) $ 5,973,502 $ 729,816 $ (502,326) Weighted-Average Remaining Amortization Period 6.33 years 8.43 years 5.80 years |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Debt [Table Text Block] | As of June 30, 2017, the Company’s mortgage notes payable consisted of the following: Collateral Principal Deferred Net Contractual Effective Loan Accredo/Walgreens properties $ 7,200,707 $ (142,659) $ 7,058,048 3.95% 3.95% 7/1/2021 Dana property 4,747,013 (134,248) 4,612,765 4.56% 4.56% 4/1/2023 Six Dollar General properties (2) 3,976,515 (171,369) 3,805,146 4.69% 4.69% 4/1/2022 Wyndham property (3) 5,970,000 (115,276) 5,854,724 One-month LIBOR + 2.05% 4.34% 6/5/2027 Williams Sonoma property (3) 4,740,000 (95,197) 4,644,803 One-month LIBOR + 2.05% 4.05% 6/5/2022 $ 26,634,235 $ (658,749) $ 25,975,486 (1) Contractual interest rate represents the interest rate in effect under the mortgage note payable as of June 30, 2017. Effective interest rate is calculated as the actual interest rate in effect as of June 30, 2017 (consisting of the contractual interest rate and the effect of the interest rate swap, if applicable). For further information regarding the Company’s derivative instruments, see Note 5. (2) The loan is cross-collateralized with all six Dollar General properties owned by the Company and one Dollar General property owned by REIT I. The deeds of trust for the Company’s six Dollar General properties and the deed of trust for the REIT I Dollar General property contain cross-collateralization and cross default provisions. At June 30, 2017, the outstanding principal balance of the loan on REIT I’s one Dollar General property was $ 636,916 (3) The loans on each of the Williams Sonoma and Wyndham properties (collectively, the Property) located in Summerlin, Nevada were originated by Nevada State Bank (Bank). The loans are collateralized by a deed of trust and a security agreement with assignment of rents and fixture filing. In addition, the individual loans are subject to a cross collateralization and cross default agreement whereby any default under, or failure to comply with the terms of any one or both of the loans is an event of default under the terms of both loans. The value of the Property must be in an amount sufficient to maintain a loan to value ratio of no more than 60%. If the loan to value ratio is ever less than 60%, the borrower shall, upon the Bank’s written demand, reduce the principal balance of the loans so that the loan to value ratio is no more than 60 |
Schedule of Maturities of Long-term Debt [Table Text Block] | The following summarizes the future principal repayment of the Company’s mortgage notes payable and unsecured credit facility as of June 30, 2017: Mortgage Note Unsecured Total Remaining 2017 $ 226,844 $ 9,232,184 $ 9,459,028 2018 465,064 - 465,064 2019 482,054 - 482,054 2020 498,925 - 498,925 2021 7,068,308 - 7,068,308 2022 8,234,746 - 8,234,746 2023 9,658,294 - 9,658,295 Total principal $ 26,634,235 $ 9,232,184 $ 35,866,420 |
Schedule Of Interest Expenses Reconciliation [Table Text Block] | The following is a reconciliation of the components of interest expense for the three and six months ended June 30, 2017 and 2016: Three Months Ended Six Months Ended 2017 2016 2017 2016 Mortgage notes payable Interest expense (1) $ 184,179 $ 10,589 $ 265,837 $ 10,589 Amortization of deferred financing costs 24,998 1,155 35,386 1,155 Unrealized loss (gain) on interest rate swaps (see Note 5) 104,633 - 104,633 - Unsecured credit facility Interest expense 103,877 28,875 143,031 28,875 Amortization of deferred financing costs 481 31 1,118 31 Forfeited loan fee 20,000 - 20,000 - Total interest expense $ 438,168 $ 40,650 $ 570,005 $ 40,650 (1) As of June 30, 2017, no payments had yet been made with respect to the Company’s interest rate swaps. Accrued interest payable of $ 2,533 |
INTEREST RATE SWAP DERIVATIVES
INTEREST RATE SWAP DERIVATIVES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments [Table Text Block] | The following table summarizes the notional amount and other information related to the Company’s interest rate swaps as of June 30, 2017. The notional amount is an indication of the extent of the Company’s involvement in each instrument at that time, but does not represent exposure to credit, interest rate or market risks: June 30, 2017 Derivative Number of Notional Amount Reference Rate as Weighted Average Weighted Average Interest Rate 2 $ 10,710,000 One-month LIBOR + applicable spread/Fixed at 4.05%-4.34% 4.21 % 8.3 years (i) The notional amount of the Company’s swaps decrease each month to correspond to the outstanding principal balance on the related mortgage. The maximum notional amount is shown above. The minimum notional amount (outstanding principal balance at the maturity date) as of June 30, 2017 was $ 9,083,700 |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block] | The following table sets forth the fair value of the Company’s derivative instruments as well as their classification in the consolidated balance sheets as of June 30, 2017. June 30, 2017 Derivative Instrument Balance Sheet Location Number of Fair Value Interest Rate Swaps Liability Interest rate swap derivatives, at fair value 2 $ (104,633) |
FAIR VALUE DISCLOSURES (Tables)
FAIR VALUE DISCLOSURES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments [Table Text Block] | The following were the face value, carrying amount and fair value of the Company’s mortgage notes payable as of June 30, 2017 and December 31, 2016: June 30, 2017 December 31,2016 Face value Carrying Fair value Face Value Carrying Fair Value $ 26,634,235 $ 25,975,486 $ 26,716,448 $ 7,266,145 $ 7,113,701 $ 7,266,145 |
Fair Value Measurements, Recurring and Nonrecurring [Table Text Block] | During the six months ended June 30, 2017, the Company measured the following assets and liabilities at fair value (in thousands): Recurring Basis Total Quoted Prices in Significant Other Significant Unobservable Interest rate swap liabilities $ 107,166 $ - $ 107,166 $ - |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions [Table Text Block] | Pursuant to the terms of the agreement, summarized below are the related party costs incurred by the Company for the three and six months ended June 30, 2017: Three Six months Three Six June 30, 2017 June 30, 2017 June 30, 2016 December 31, 2016 Incurred Incurred Receivable Payable Incurred Incurred Receivable Payable Expensed Acquisition fees $ - $ - $ - $ - $ 474,122 $ 474,122 $ - $ - Asset management fees (2) 196,856 308,154 - 260,692 7,566 7,566 - 29,577 Fees to affiliates 196,856 308,154 481,688 481,688 Property management fees* 622 622 - 622 - - - - Expense reimbursements from Sponsor (1) (672,904) (1,360,930) 643 - - - 79,862 - Waiver of asset management fees (2) (49,214) (77,039) - - - - - - Capitalized Acquisition fees 882,971 1,483,571 13,711 - - - - 274,200 Financing fees - 87,450 - - - - - - Additional paid-in-capital Reimbursable organizational and offering expenses (3) 529,991 1,138,121 - 17,297 - - - 79,645 Other Costs reimbursable from Rich Uncles REIT I (4) - - 28,571 - - - 28,571 - $ 888,322 $ 1,579,949 $ 42,925 $ 278,611 $ 481,688 $ 481,688 $ 108,433 $ 383,422 * Property management fees are presented as property operating expenses. (1) The Company records payroll costs related to Company employees that answer questions from prospective shareholders. The Sponsor has agreed to reimburse the Company for these investor relations payroll costs which the Sponsor considers to be offering expenses in accordance with the Advisory Agreement. (2) To the extent the Advisor elects, in its sole discretion to defer all or any portion of its monthly asset management fee, the Advisor will be deemed to have waived, not deferred, that portion up to 0.025 49,214 77,039 (3) As of June 30, 2017, the Sponsor had incurred $ 4,452,858 3 (4) The Company incurred $ 28,571 |
BUSINESS AND ORGANIZATION (Deta
BUSINESS AND ORGANIZATION (Details Textual) - USD ($) | Aug. 10, 2017 | Jul. 20, 2016 | Oct. 19, 2015 | Jun. 24, 2015 | Jun. 30, 2017 | Dec. 31, 2016 | Jul. 15, 2015 |
Business And Organisation [Line Items] | |||||||
Authority To Issue of Common Stock | 250,000,000 | ||||||
Minimum Investment in Shares Value | $ 500 | ||||||
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 | 200,000,000 | ||||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Preferred Stock, Shares Authorized | 50,000,000 | 50,000,000 | 50,000,000 | ||||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Share Price | $ 10 | ||||||
Limited Liability Company (LLC) or Limited Partnership (LP), Managing Member or General Partner, Ownership Interest | 99.00% | ||||||
Limited Liability Company (LLC) or Limited Partnership (LP), Members or Limited Partners, Ownership Interest | 1.00% | ||||||
Stock Issued During Period, Shares, New Issues | 6,958,810 | 6,231,455 | |||||
Stock Issued During Period, Value, New Issues | $ 69,588,103 | $ 62,314,551 | $ 37,937,373 | ||||
Distribution Reinvestment Plan [Member] | |||||||
Business And Organisation [Line Items] | |||||||
Stock Issued During Period, Shares, New Issues | 118,418 | ||||||
IPO [Member] | |||||||
Business And Organisation [Line Items] | |||||||
Common Stock, Value, Subscriptions | $ 900,000,000 | ||||||
DRP Offering [Member] | |||||||
Business And Organisation [Line Items] | |||||||
Common Stock, Value, Subscriptions | $ 100,000,000 | ||||||
Sponsor [Member] | |||||||
Business And Organisation [Line Items] | |||||||
Stock Issued During Period, Shares, New Issues | 10,000 | ||||||
Shares Issued, Price Per Share | $ 10 |
SUMMARY OF SIGNIFICANT ACCOUN24
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Total revenue | $ 1,729,042 | $ 41,466 | $ 2,589,241 | $ 41,466 |
Net income (loss) | 43,587 | (593,679) | (412,747) | (593,769) |
Rich Uncles REIT I [Member] | ||||
Total revenue | 3,507,951 | 1,440,457 | 6,234,218 | 2,245,359 |
Net income (loss) | $ 937,414 | $ (1,268,078) | $ 1,331,862 | $ (2,400,993) |
SUMMARY OF SIGNIFICANT ACCOUN25
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2017 | Mar. 31, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Income (Loss) from Equity Method Investments | $ 159,399 | $ 120,165 | $ 0 | $ 167,356 | $ 0 | $ 109,309 |
Rich Uncles Real Estate Investment Trust 1 [Member] | ||||||
Percentage of Ownership Interest | 4.36% | 4.39% | ||||
Income (Loss) from Equity Method Investments | $ 0 | 18,813 | $ 30,038 | |||
Rich Uncles Real Estate Investment Trust 1 [Member] | Scenario, Previously Reported [Member] | ||||||
Income (Loss) from Equity Method Investments | $ 7,957 | $ 79,271 |
REAL PROPERTY (Details)
REAL PROPERTY (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2017 | Dec. 31, 2016 | |
Real Estate [Line Items] | ||
Land, building and improvements | $ 77,780,006 | |
Tenant origination and absorption costs | 6,581,896 | $ 3,632,731 |
Accumulated depreciation and amortization | (1,649,463) | (493,185) |
Total real estate investments, net | $ 82,712,439 | $ 32,751,856 |
Accredo [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Property Location | Orlando, FL | |
Walgreens [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Property Location | Stockbridge, GA | |
Dollar General One [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Property Location | Litchfield, ME | |
Dollar GeneralTwo [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Property Location | Wilton, ME | |
Dollar General Three [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Property Location | Thompsontown, PA | |
Dollar General Four [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Property Location | Mt. Gilead, OH | |
Dollar General Five [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Property Location | Lakeside, OH | |
Dollar General Six [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Property Location | Castalia, OH | |
Dana [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Property Location | Cedar Park, TX | |
Northrop [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Property Location | Melbourne, FL | |
Ex Us Services [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Property Location | Maitland, FL | |
Harley [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Property Location | Bedford, TX | |
Wyndham [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Property Location | Summerlin, NV | |
Wiiliams Sonoma [Member] | ||
Real Estate [Line Items] | ||
Real Estate, Acquisition, Property Location | Summerlin, NV | |
Office Building [Member] | Accredo [Member] | ||
Real Estate [Line Items] | ||
Land, building and improvements | $ 9,850,055 | |
Tenant origination and absorption costs | 1,053,638 | |
Accumulated depreciation and amortization | (512,437) | |
Total real estate investments, net | 10,391,256 | |
Office Building [Member] | Northrop [Member] | ||
Real Estate [Line Items] | ||
Land, building and improvements | 12,382,991 | |
Tenant origination and absorption costs | 1,341,198 | |
Accumulated depreciation and amortization | (228,383) | |
Total real estate investments, net | 13,495,806 | |
Office Building [Member] | Ex Us Services [Member] | ||
Real Estate [Line Items] | ||
Land, building and improvements | 5,920,121 | |
Tenant origination and absorption costs | 388,248 | |
Accumulated depreciation and amortization | (63,332) | |
Total real estate investments, net | 6,245,037 | |
Office Building [Member] | Harley [Member] | ||
Real Estate [Line Items] | ||
Land, building and improvements | 13,178,286 | |
Tenant origination and absorption costs | 0 | |
Accumulated depreciation and amortization | (64,063) | |
Total real estate investments, net | 13,114,222 | |
Office Building [Member] | Wyndham [Member] | ||
Real Estate [Line Items] | ||
Land, building and improvements | 9,447,270 | |
Tenant origination and absorption costs | 669,232 | |
Accumulated depreciation and amortization | (12,106) | |
Total real estate investments, net | 10,104,396 | |
Office Building [Member] | Wiiliams Sonoma [Member] | ||
Real Estate [Line Items] | ||
Land, building and improvements | 7,045,835 | |
Tenant origination and absorption costs | 550,486 | |
Accumulated depreciation and amortization | (10,225) | |
Total real estate investments, net | 7,586,097 | |
Retail Site [Member] | Walgreens [Member] | ||
Real Estate [Line Items] | ||
Land, building and improvements | 4,147,948 | |
Tenant origination and absorption costs | 705,423 | |
Accumulated depreciation and amortization | (341,623) | |
Total real estate investments, net | 4,511,748 | |
Retail Site [Member] | Dollar General One [Member] | ||
Real Estate [Line Items] | ||
Land, building and improvements | 1,281,812 | |
Tenant origination and absorption costs | 116,302 | |
Accumulated depreciation and amortization | (25,152) | |
Total real estate investments, net | 1,372,962 | |
Retail Site [Member] | Dollar GeneralTwo [Member] | ||
Real Estate [Line Items] | ||
Land, building and improvements | 1,543,776 | |
Tenant origination and absorption costs | 140,653 | |
Accumulated depreciation and amortization | (32,190) | |
Total real estate investments, net | 1,652,239 | |
Retail Site [Member] | Dollar General Three [Member] | ||
Real Estate [Line Items] | ||
Land, building and improvements | 1,199,860 | |
Tenant origination and absorption costs | 106,730 | |
Accumulated depreciation and amortization | (24,167) | |
Total real estate investments, net | 1,282,423 | |
Retail Site [Member] | Dollar General Four [Member] | ||
Real Estate [Line Items] | ||
Land, building and improvements | 1,174,188 | |
Tenant origination and absorption costs | 111,847 | |
Accumulated depreciation and amortization | (23,171) | |
Total real estate investments, net | 1,262,864 | |
Retail Site [Member] | Dollar General Five [Member] | ||
Real Estate [Line Items] | ||
Land, building and improvements | 1,112,872 | |
Tenant origination and absorption costs | 100,857 | |
Accumulated depreciation and amortization | (23,780) | |
Total real estate investments, net | 1,189,949 | |
Retail Site [Member] | Dollar General Six [Member] | ||
Real Estate [Line Items] | ||
Land, building and improvements | 1,102,086 | |
Tenant origination and absorption costs | 86,408 | |
Accumulated depreciation and amortization | (23,105) | |
Total real estate investments, net | 1,165,389 | |
Industrial [Member] | Dana [Member] | ||
Real Estate [Line Items] | ||
Land, building and improvements | 8,392,906 | |
Tenant origination and absorption costs | 1,210,874 | |
Accumulated depreciation and amortization | (265,729) | |
Total real estate investments, net | $ 9,338,051 |
REAL PROPERTY (Details 1)
REAL PROPERTY (Details 1) - USD ($) | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | $ 49,134,241 | $ 15,731,000 |
Northrop Grumman [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 13,724,190 | |
exp US Services [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 6,924,855 | |
Harley [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 13,178,286 | |
Wyndham [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 10,116,502 | |
Wiiliams Sonoma [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 7,231,767 | |
Land [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 10,812,834 | |
Land [Member] | Northrop Grumman [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 1,191,024 | |
Land [Member] | exp US Services [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 785,801 | |
Land [Member] | Harley [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 1,145,196 | |
Land [Member] | Wyndham [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 4,144,069 | |
Land [Member] | Wiiliams Sonoma [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 3,546,744 | |
Buildings and Improvements [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 37,161,669 | |
Buildings and Improvements [Member] | Northrop Grumman [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 11,191,967 | |
Buildings and Improvements [Member] | exp US Services [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 5,134,320 | |
Buildings and Improvements [Member] | Harley [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 12,033,090 | |
Buildings and Improvements [Member] | Wyndham [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 5,303,201 | |
Buildings and Improvements [Member] | Wiiliams Sonoma [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 3,499,091 | |
Above Market Leases [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 616,486 | |
Above Market Leases [Member] | Northrop Grumman [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 0 | |
Above Market Leases [Member] | exp US Services [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 616,486 | |
Above Market Leases [Member] | Harley [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 0 | |
Above Market Leases [Member] | Wyndham [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 0 | |
Above Market Leases [Member] | Wiiliams Sonoma [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 0 | |
Below Market Leases [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | (364,554) | |
Below Market Leases [Member] | Northrop Grumman [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 0 | |
Below Market Leases [Member] | exp US Services [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 0 | |
Below Market Leases [Member] | Harley [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 0 | |
Below Market Leases [Member] | Wyndham [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 0 | |
Below Market Leases [Member] | Wiiliams Sonoma [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | (364,554) | |
Tenant origination and absorption costs [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 2,949,165 | |
Tenant origination and absorption costs [Member] | Northrop Grumman [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 1,341,199 | |
Tenant origination and absorption costs [Member] | exp US Services [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 388,248 | |
Tenant origination and absorption costs [Member] | Harley [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 0 | |
Tenant origination and absorption costs [Member] | Wyndham [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | 669,232 | |
Tenant origination and absorption costs [Member] | Wiiliams Sonoma [Member] | ||
Real Estate [Line Items] | ||
Payments to Acquire Real Estate | $ 550,486 |
REAL PROPERTY (Details 2)
REAL PROPERTY (Details 2) - USD ($) | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Purchase price | $ 51,175,600 | |
Purchase deposits applied | (500,000) | |
Acquisition fees to affiliates | (1,483,571) | |
Payable to seller for acquisition of real estate | (117,803) | $ 0 |
Refund from escrow | 60,015 | |
Cash paid for acquisition of real estate | $ 49,134,241 | $ 15,731,000 |
REAL PROPERTY (Details 3)
REAL PROPERTY (Details 3) | 6 Months Ended |
Jun. 30, 2017 | |
Northrop Grumman [Member] | |
Lease Expiration Date | May 31, 2021 |
exp US Services [Member] | |
Lease Expiration Date | Nov. 30, 2026 |
Harley [Member] | |
Lease Expiration Date | Apr. 12, 2042 |
Wyndham [Member] | |
Lease Expiration Date | Feb. 28, 2025 |
Wiiliams Sonoma [Member] | |
Lease Expiration Date | Oct. 31, 2022 |
REAL PROPERTY (Details 4)
REAL PROPERTY (Details 4) - USD ($) | 6 Months Ended | ||
Jun. 30, 2017 | Dec. 31, 2016 | ||
Real Estate Investments, Net | $ 86,267,707 | $ 36,275,665 | |
Accredo, FL [Member] | |||
Real Estate Investments, Net | 10,391,256 | ||
Revenue | 531,744 | ||
Effective Annual Base Rent | [1] | $ 899,010 | |
Accredo, FL [Member] | Portfolio Asstes [Member] | |||
Concentration Risk, Percentage | 10.99% | ||
Accredo, FL [Member] | Portfolio Revenue [Member] | |||
Concentration Risk, Percentage | 20.54% | ||
Accredo, FL [Member] | Sales Revenue, Net [Member] | |||
Concentration Risk, Percentage | 13.56% | ||
Dana, TX [Member] | |||
Revenue | $ 465,089 | ||
Effective Annual Base Rent | [1] | $ 665,917 | |
Dana, TX [Member] | Portfolio Revenue [Member] | |||
Concentration Risk, Percentage | 17.97% | ||
Dana, TX [Member] | Sales Revenue, Net [Member] | |||
Concentration Risk, Percentage | 10.05% | ||
Northrop Grumman, FL [Member] | |||
Real Estate Investments, Net | $ 13,495,806 | ||
Revenue | 459,047 | ||
Effective Annual Base Rent | [1] | $ 1,162,274 | |
Northrop Grumman, FL [Member] | Portfolio Asstes [Member] | |||
Concentration Risk, Percentage | 14.27% | ||
Northrop Grumman, FL [Member] | Portfolio Revenue [Member] | |||
Concentration Risk, Percentage | 17.73% | ||
Northrop Grumman, FL [Member] | Sales Revenue, Net [Member] | |||
Concentration Risk, Percentage | 17.53% | ||
exp US Services, FL [Member] | |||
Effective Annual Base Rent | [1] | $ 681,077 | |
exp US Services, FL [Member] | Sales Revenue, Net [Member] | |||
Concentration Risk, Percentage | 10.27% | ||
Harley, TX [Member] | |||
Real Estate Investments, Net | $ 13,114,222 | ||
Revenue | 326,102 | ||
Effective Annual Base Rent | [1] | $ 900,000 | |
Harley, TX [Member] | Portfolio Asstes [Member] | |||
Concentration Risk, Percentage | 13.87% | ||
Harley, TX [Member] | Portfolio Revenue [Member] | |||
Concentration Risk, Percentage | 12.60% | ||
Harley, TX [Member] | Sales Revenue, Net [Member] | |||
Concentration Risk, Percentage | 13.58% | ||
Wyndham, NV [Member] | |||
Real Estate Investments, Net | $ 10,104,396 | ||
Effective Annual Base Rent | [1] | $ 798,827 | |
Wyndham, NV [Member] | Portfolio Asstes [Member] | |||
Concentration Risk, Percentage | 10.68% | ||
Wyndham, NV [Member] | Sales Revenue, Net [Member] | |||
Concentration Risk, Percentage | 12.05% | ||
[1] | Effective Annualized Base Rent is calculated based on the monthly base rent at June 30, 2017 for twelve months. |
REAL PROPERTY (Details 5)
REAL PROPERTY (Details 5) | Jun. 30, 2017USD ($) |
July 1, 2017 through December 31, 2017 | $ 2,870,956 |
2,018 | 6,732,550 |
2,019 | 6,884,632 |
2,020 | 7,035,980 |
2,021 | 5,563,272 |
2,022 | 4,556,702 |
Thereafter | 20,331,662 |
Operating Leases, Future Minimum Payments Receivable | $ 53,975,754 |
REAL PROPERTY (Details 6)
REAL PROPERTY (Details 6) | Jun. 30, 2017USD ($) |
Tenant origination and absorption costs [Member] | |
Cost | $ 6,581,896 |
Accumulated amortization | (608,394) |
Net amount | 5,973,502 |
Above market lease [Member] | |
Cost | 783,115 |
Accumulated amortization | (53,299) |
Net amount | 729,816 |
Below-market lease intangibles [Member] | |
Cost | (516,164) |
Accumulated amortization | 13,838 |
Net amount | $ (502,326) |
REAL PROPERTY (Details 7)
REAL PROPERTY (Details 7) | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Above market lease intangibles [Member] | |
Real Estate [Line Items] | |
July 1, 2017 through December 31, 2017 | $ 48,523 |
2,018 | 97,045 |
2,019 | 97,045 |
2,020 | 97,045 |
2,021 | 78,994 |
2,022 | 63,719 |
Thereafter | 247,445 |
Finite-Lived Intangible Assets, Net | $ 729,816 |
Weighted-Average Remaining Amortization Period | 8 years 5 months 5 days |
Tenant origination and absorption costs intangibles [Member] | |
Real Estate [Line Items] | |
July 1, 2017 through December 31, 2017 | $ 559,234 |
2,018 | 1,118,468 |
2,019 | 1,118,468 |
2,020 | 1,118,468 |
2,021 | 702,209 |
2,022 | 412,034 |
Thereafter | 944,621 |
Finite-Lived Intangible Assets, Net | $ 5,973,502 |
Weighted-Average Remaining Amortization Period | 6 years 3 months 29 days |
Below-market lease intangibles [Member] | |
Real Estate [Line Items] | |
Weighted-Average Remaining Amortization Period | 5 years 9 months 18 days |
July 1, 2017 through December 31, 2017 | $ (44,772) |
2,018 | (89,544) |
2,019 | (89,544) |
2,020 | (89,544) |
2,021 | (89,544) |
2,022 | (69,853) |
Thereafter | (29,525) |
Finite-Lived Intangible Assets, Net | $ (502,326) |
REAL PROPERTY (Details Textual)
REAL PROPERTY (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Real Estate [Line Items] | |||||
Acquisition Costs, Period Cost | $ 0 | $ 73,028 | $ 0 | $ 73,028 | |
Real Estate Revenue, Net | 1,366,901 | $ 41,466 | 2,063,595 | $ 41,466 | |
Accounts and Notes Receivable, Net | 201,026 | 201,026 | $ 29,975 | ||
Accredo and Walgreens acquisitions [Member] | |||||
Real Estate [Line Items] | |||||
Acquisition Costs, Period Cost | 1,038,776 | 1,723,251 | |||
Real Estate Revenue, Net | $ 965,368 | $ 1,066,814 |
DEBT (Details)
DEBT (Details) | 6 Months Ended | |
Jun. 30, 2017USD ($) | ||
Mortgage Notes Payable [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | $ 26,634,235 | |
Deferred Financing Costs, Net | (658,749) | |
Net Balance | 25,975,486 | |
Mortgage Note Payable One [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | 7,200,707 | |
Deferred Financing Costs, Net | (142,659) | |
Net Balance | $ 7,058,048 | |
Contractual Interest Rate | 3.95% | [1] |
Effective Interest Rate | 3.95% | [1] |
Loan Maturity | Jul. 1, 2021 | |
Mortgage Note Payable Two [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | $ 4,747,013 | |
Deferred Financing Costs, Net | (134,248) | |
Net Balance | $ 4,612,765 | |
Contractual Interest Rate | 4.56% | [1] |
Effective Interest Rate | 4.56% | [1] |
Loan Maturity | Apr. 1, 2023 | |
Mortgage Note Payable Three [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | $ 3,976,515 | [2] |
Deferred Financing Costs, Net | (171,369) | [2] |
Net Balance | $ 3,805,146 | [2] |
Contractual Interest Rate | 4.69% | [1],[2] |
Effective Interest Rate | 4.69% | [1],[2] |
Loan Maturity | Apr. 1, 2022 | |
Mortgage Note Payable Four [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | $ 5,970,000 | [3] |
Deferred Financing Costs, Net | (115,276) | [3] |
Net Balance | $ 5,854,724 | [3] |
Contractual Interest Rate | 4.34% | [1],[3] |
Debt Instrument, Description of Variable Rate Basis | One-month LIBOR + 2.05% | [1],[3] |
Effective Interest Rate | 4.34% | [1],[3] |
Loan Maturity | Jun. 5, 2027 | |
Mortgage Note Payable Five [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | $ 4,740,000 | [3] |
Deferred Financing Costs, Net | (95,197) | [3] |
Net Balance | $ 4,644,803 | [3] |
Contractual Interest Rate | 4.05% | [1],[3] |
Debt Instrument, Description of Variable Rate Basis | One-month LIBOR + 2.05% | [1],[3] |
Effective Interest Rate | 4.05% | [1],[3] |
Loan Maturity | Jun. 5, 2022 | |
[1] | Contractual interest rate represents the interest rate in effect under the mortgage note payable as of June 30, 2017. Effective interest rate is calculated as the actual interest rate in effect as of June 30, 2017 (consisting of the contractual interest rate and the effect of the interest rate swap, if applicable). For further information regarding the Company’s derivative instruments, see Note 5. | |
[2] | The loan is cross-collateralized with all six Dollar General properties owned by the Company and one Dollar General property owned by REIT I. The deeds of trust for the Company’s six Dollar General properties and the deed of trust for the REIT I Dollar General property contain cross-collateralization and cross default provisions. At June 30, 2017, the outstanding principal balance of the loan on REIT I’s one Dollar General property was $636,916. | |
[3] | The loans on each of the Williams Sonoma and Wyndham properties (collectively, the Property) located in Summerlin, Nevada were originated by Nevada State Bank (Bank). The loans are collateralized by a deed of trust and a security agreement with assignment of rents and fixture filing. In addition, the individual loans are subject to a cross collateralization and cross default agreement whereby any default under, or failure to comply with the terms of any one or both of the loans is an event of default under the terms of both loans. The value of the Property must be in an amount sufficient to maintain a loan to value ratio of no more than 60%. If the loan to value ratio is ever less than 60%, the borrower shall, upon the Bank’s written demand, reduce the principal balance of the loans so that the loan to value ratio is no more than 60%. |
DEBT (Details 1)
DEBT (Details 1) | Jun. 30, 2017USD ($) |
Debt Instrument [Line Items] | |
Remaining 2,017 | $ 9,459,028 |
2,018 | 465,064 |
2,019 | 482,054 |
2,020 | 498,925 |
2,021 | 7,068,308 |
2,022 | 8,234,746 |
2,023 | 9,658,295 |
Total principal | 35,866,420 |
Mortgage note payable [Member] | |
Debt Instrument [Line Items] | |
Remaining 2,017 | 226,844 |
2,018 | 465,064 |
2,019 | 482,054 |
2,020 | 498,925 |
2,021 | 7,068,308 |
2,022 | 8,234,746 |
2,023 | 9,658,294 |
Total principal | 26,634,235 |
Unsecured Credit Facility [Member] | |
Debt Instrument [Line Items] | |
Remaining 2,017 | 9,232,184 |
2,018 | 0 |
2,019 | 0 |
2,020 | 0 |
2,021 | 0 |
2,022 | 0 |
2,023 | 0 |
Total principal | $ 9,232,184 |
DEBT (Details 2)
DEBT (Details 2) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | ||
Interest expense | $ 438,168 | $ 40,650 | $ 570,005 | $ 40,650 | |
Unrealized loss (gain) on interest rate swaps (see Note 5) | 104,633 | 104,633 | |||
Unsecured Debt [Member] | |||||
Interest expense | 103,877 | 28,875 | 143,031 | 28,875 | |
Amortization of deferred financing costs | 481 | 31 | 1,118 | 31 | |
Forfeited loan fee | 20,000 | 0 | 20,000 | 0 | |
Secured Debt [Member] | |||||
Interest expense | [1] | 184,179 | 10,589 | 265,837 | 10,589 |
Amortization of deferred financing costs | 24,998 | 1,155 | 35,386 | 1,155 | |
Unrealized loss (gain) on interest rate swaps (see Note 5) | $ 104,633 | $ 0 | $ 104,633 | $ 0 | |
[1] | As of June 30, 2017, no payments had yet been made with respect to the Company’s interest rate swaps. Accrued interest payable of $2,533 at June 30, 2017 represented the unsettled portion of the interest rate swaps for the period from origination of the interest note swap through June 30, 2017. The Company had no swap agreements as of June 30, 2016. |
DEBT (Details Textual)
DEBT (Details Textual) - USD ($) | 6 Months Ended | ||
Jun. 30, 2017 | Dec. 31, 2016 | Jun. 07, 2016 | |
Debt Instrument [Line Items] | |||
Interest Payable | $ 2,533 | ||
Stockholders' Equity Attributable to Parent | $ 56,412,226 | $ 22,231,106 | |
Loans To Assets Ratio | 60.00% | ||
Long-term Debt, Gross | $ 35,866,420 | ||
RICH UNCLES NNN REIT, INC. [Member] | |||
Debt Instrument [Line Items] | |||
Stockholders' Equity Attributable to Parent | 60,000,000 | ||
Unsecured Debt [Member] | |||
Debt Instrument [Line Items] | |||
Long-term Debt, Gross | 9,232,184 | ||
Mortgages [Member] | Dollar General Big Spring [Member] | |||
Debt Instrument [Line Items] | |||
Long-term Debt, Gross | $ 636,916 | ||
Pacific Mercantile Bank [Member] | |||
Debt Instrument [Line Items] | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 12,000,000 | ||
Pacific Mercantile Bank [Member] | Unsecured Debt [Member] | |||
Debt Instrument [Line Items] | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 12,000,000 | ||
Unsecured Credit Agreement [Member] | |||
Debt Instrument [Line Items] | |||
Line of Credit Facility, Interest Rate Description | an interest rate equal to 1% over an independent index, that is the highest rate on corporate loans posted by at least 75% of the thirty (30) largest banks in the United States, known as The Wall Street Journal Prime Rate, as published in the Wall Street Journal. | ||
Line of Credit Facility, Interest Rate at Period End | 4.98% | ||
Line of Credit Facility, Expiration Date | Jun. 15, 2017 |
INTEREST RATE SWAP DERIVATIVE39
INTEREST RATE SWAP DERIVATIVES (Details) - Interest Rate Swap [Member] | 6 Months Ended | ||
Jun. 30, 2017USD ($) | Jun. 30, 2016 | ||
Derivatives, Fair Value [Line Items] | |||
Number of Instruments | 2 | ||
Reference Rate | One-month LIBOR + applicable spread/Fixed at 4.05%-4.34% | ||
Weighted Average Fixed Pay Rate | 4.21% | ||
Weighted Average Remaining Term | 8 years 3 months 18 days | ||
Maximum [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Notional Amount | [1] | $ 10,710,000 | |
[1] | The notional amount of the Company’s swaps decrease each month to correspond to the outstanding principal balance on the related mortgage. The maximum notional amount is shown above. The minimum notional amount (outstanding principal balance at the maturity date) as of June 30, 2017 was $9,083,700. |
INTEREST RATE SWAP DERIVATIVE40
INTEREST RATE SWAP DERIVATIVES (Details 1) | 6 Months Ended | |
Jun. 30, 2017USD ($) | Dec. 31, 2016USD ($) | |
Derivatives, Fair Value [Line Items] | ||
Fair Value | $ 104,633 | $ 0 |
Interest Rate Swap [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Balance Sheet Location | Liability – Interest rate swap derivatives, at fair value | |
Number of Instruments | 2 | |
Fair Value | $ (104,633) |
INTEREST RATE SWAP DERIVATIVE41
INTEREST RATE SWAP DERIVATIVES (Details Textual) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2017USD ($) | Jun. 30, 2017USD ($) | |
Derivatives, Fair Value [Line Items] | ||
Unrealized Gain (Loss) on Derivatives | $ 104,633 | $ 104,633 |
Interest Rate Swap [Member] | Minimum [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liability, Notional Amount | $ 9,083,700 | $ 9,083,700 |
FAIR VALUE DISCLOSURES (Details
FAIR VALUE DISCLOSURES (Details) - Mortgage note payable [Member] - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
Face value | $ 26,634,235 | $ 7,266,145 |
Net Balance | 25,975,486 | 7,113,701 |
Fair value | $ 26,716,448 | $ 7,266,145 |
FAIR VALUE DISCLOSURES (Detai43
FAIR VALUE DISCLOSURES (Details 1) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
Interest rate swap liabilities | $ 104,633 | $ 0 |
Interest Rate Swap [Member] | ||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
Interest rate swap liabilities | (104,633) | |
Fair Value, Measurements, Recurring [Member] | Interest Rate Swap [Member] | ||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
Interest rate swap liabilities | 107,166 | |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Interest Rate Swap [Member] | ||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
Interest rate swap liabilities | 0 | |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Interest Rate Swap [Member] | ||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
Interest rate swap liabilities | 107,166 | |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Interest Rate Swap [Member] | ||
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | ||
Interest rate swap liabilities | $ 0 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||||||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | ||||||
Related Party Transaction [Line Items] | ||||||||||
Expenses incurred To Related Parties | $ 888,322 | $ 481,688 | $ 1,579,949 | $ 481,688 | ||||||
Due from Related Parties | 42,925 | 42,925 | $ 108,433 | |||||||
Due to Affiliates | 278,611 | 278,611 | 383,422 | |||||||
Additional Paid-in Capital [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Due from Related Parties | [1] | 0 | 0 | 0 | ||||||
Due to Affiliates | [1] | 17,297 | 17,297 | 79,645 | ||||||
Acquisition Fee [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Expenses incurred To Related Parties | 0 | 474,122 | 0 | 474,122 | ||||||
Due from Related Parties | 0 | 0 | 0 | |||||||
Due to Affiliates | 0 | 0 | 0 | |||||||
Incurred To Related Parties | (882,971) | (1,483,571) | ||||||||
Asset Management Fees [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Expenses incurred To Related Parties | [2] | 196,856 | 7,566 | 308,154 | 7,566 | |||||
Due from Related Parties | [2] | 0 | 0 | 0 | ||||||
Due to Affiliates | [2] | 260,692 | 260,692 | 29,577 | ||||||
Fees to affiliates [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Expenses incurred To Related Parties | 196,856 | 481,688 | 308,154 | 481,688 | ||||||
Property Management Fees [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Expenses incurred To Related Parties | [3] | 622 | 0 | 622 | 0 | |||||
Due from Related Parties | [3] | 0 | 0 | 0 | ||||||
Due to Affiliates | [3] | 622 | 622 | 0 | ||||||
Expense reimbursements from Sponsor [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Expenses incurred To Related Parties | [4] | 0 | 0 | |||||||
Due from Related Parties | [4] | 643 | 643 | 79,862 | ||||||
Due to Affiliates | [4] | 0 | 0 | 0 | ||||||
Incurred To Related Parties | [4] | (672,904) | (1,360,930) | |||||||
Waiver of Assets Management Fees [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Expenses incurred To Related Parties | 49,214 | 0 | [2] | 77,039 | 0 | [2] | ||||
Due from Related Parties | [2] | 0 | 0 | 0 | ||||||
Due to Affiliates | [2] | 0 | 0 | 0 | ||||||
Incurred To Related Parties | (49,214) | [2] | 0 | (77,039) | [2] | 0 | ||||
Capitalized Acquisition Fees [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Expenses incurred To Related Parties | 882,971 | 0 | 1,483,571 | 0 | ||||||
Due from Related Parties | 13,711 | 13,711 | 0 | |||||||
Due to Affiliates | 0 | 0 | 274,200 | |||||||
Capitalized Financing Fees [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Expenses incurred To Related Parties | 0 | 0 | 87,450 | 0 | ||||||
Due from Related Parties | 0 | 0 | 0 | |||||||
Due to Affiliates | 0 | 0 | 0 | |||||||
Reimbursable Organizational and Offering Expenses [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Expenses incurred To Related Parties | [1] | 529,991 | 0 | 1,138,121 | 0 | |||||
Due to Affiliates | 17,297 | 17,297 | ||||||||
Costs reimbursable from Rich Uncles REIT I [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Expenses incurred To Related Parties | [5] | 0 | $ 0 | 0 | $ 0 | |||||
Due from Related Parties | [5] | 28,571 | 28,571 | 28,571 | ||||||
Due to Affiliates | [5] | $ 0 | $ 0 | $ 0 | ||||||
[1] | As of June 30, 2017, the Sponsor had incurred $4,452,858 of organizational and offering costs on behalf of the Company. However, the Company is only obligated to reimburse the Sponsor for such organizational and offering expenses to the extent of 3% of gross offering proceeds. The payable related to this obligation is reflected in “Due to affiliates” in the consolidated balance sheets. | |||||||||
[2] | To the extent the Advisor elects, in its sole discretion to defer all or any portion of its monthly asset management fee, the Advisor will be deemed to have waived, not deferred, that portion up to 0.025% of the total investment value of the Company’s assets. For the three and six months ended June 30, 2017, the Advisor waived $49,214 and $77,039, respectively, of asset management fees, which are not subject to future recoupment by the Advisor. No asset management fees were waived for the three or six months ended June 30, 2016. | |||||||||
[3] | Property management fees are presented as property operating expenses. | |||||||||
[4] | The Company records payroll costs related to Company employees that answer questions from prospective shareholders. The Sponsor has agreed to reimburse the Company for these investor relations payroll costs which the Sponsor considers to be offering expenses in accordance with the Advisory Agreement. | |||||||||
[5] | The Company incurred $28,571 of costs in conjunction with due diligence for a property acquisition which is owed to the Company from Rich Uncles REIT I and reflected in “Due from affiliates” in the consolidated balance sheets. |
RELATED PARTY TRANSACTIONS (D45
RELATED PARTY TRANSACTIONS (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | ||||||||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | ||||||
Related Party Transaction [Line Items] | ||||||||||
Due to Related Parties | $ 278,611 | $ 278,611 | $ 383,422 | |||||||
Property Management Fees Percentage | 1.50% | |||||||||
Operating Expenses Reimbursement, Maximum Limit Reimbursements | Under the prospectus, total operating expenses of the Company are limited to the greater of 2% of average invested assets or 25% of net income for the four most recently completed fiscal quarters (2%/25% Limitation). | |||||||||
Related Party Transaction, Expenses from Transactions with Related Party | 888,322 | $ 481,688 | $ 1,579,949 | $ 481,688 | ||||||
Advisor [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Acquisition Fees Description | The Company shall pay the Advisor a fee in an amount equal 3.0% of Companys contract purchase price of its properties, as defined, as acquisition fees. The total of all acquisition fees and acquisition expenses shall be reasonable, and shall not exceed 6.0% of the contract price of the property. | |||||||||
Financing Coordination Fees Percentage | 1.00% | |||||||||
Disposition Fees Description | the Company shall pay to its Advisor or one of its affiliates 3.0% of the contract sales price, as defined, of each property sold; provided, however, that if, in connection with such disposition, commissions are paid to third parties unaffiliated with our Advisor or its affiliates, the disposition fees paid to our Advisor, our Sponsor, their affiliates and unaffiliated third parties may not exceed the lesser of the competitive real estate commission or 6% of the contract sales price. | |||||||||
Leasing Commission Fees Description | the Company shall pay to the Advisor or such affiliate leasing commissions equal to 6.0% of the rents due pursuant to such lease for the first ten years of the lease term; provided, however (i) if the term of the lease is less than ten years, such commission percentage will apply to the full term of the lease and (ii) any rents due under a renewal of a lease of an existing tenant upon expiration of the initial lease agreement (including any extensions provided for thereunder) shall accrue a commission of 3.0% in lieu of the aforementioned 6.0% commission. | |||||||||
Reimbursable Organizational and Offering Expenses [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Due to Related Parties | 17,297 | $ 17,297 | ||||||||
Accrual organization and offering cost | 1,858,140 | 1,858,140 | ||||||||
Related Party Transaction, Expenses from Transactions with Related Party | [1] | 529,991 | 0 | $ 1,138,121 | 0 | |||||
Reimbursable Organizational and Offering Expenses [Member] | Sponsor [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Gross Offering Proceeds Percentage | 3.00% | |||||||||
Waiver Of Assets Management Fees [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Due to Related Parties | [2] | 0 | $ 0 | 0 | ||||||
Asset Management Fees Waive Percentage | 0.025% | |||||||||
Monthly Asset Management Fees Waive Percentage | 0.025% | |||||||||
Related Party Transaction, Other Revenues from Transactions with Related Party | 49,214 | [2] | 0 | $ 77,039 | [2] | 0 | ||||
Related Party Transaction, Expenses from Transactions with Related Party | 49,214 | 0 | [2] | 77,039 | 0 | [2] | ||||
Rich Uncles REIT I [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Accrual organization and offering cost, Related Party | 4,452,858 | 4,452,858 | ||||||||
Related Party Transaction, Expenses from Transactions with Related Party | 28,571 | |||||||||
Sponsor Reimbursement [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Related Party Transaction, Other Revenues from Transactions with Related Party | 672,904 | 1,360,930 | ||||||||
Acquisition Fees [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Due to Related Parties | 0 | 0 | 0 | |||||||
Related Party Transaction, Other Revenues from Transactions with Related Party | 882,971 | 1,483,571 | ||||||||
Related Party Transaction, Expenses from Transactions with Related Party | 0 | 474,122 | 0 | 474,122 | ||||||
Asset Management Fees [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Due to Related Parties | [2] | 260,692 | 260,692 | 29,577 | ||||||
Related Party Transaction, Expenses from Transactions with Related Party | [2] | 196,856 | 7,566 | 308,154 | 7,566 | |||||
Financing Coordination Fees [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Related Party Transaction, Expenses from Transactions with Related Party | 0 | 87,450 | ||||||||
Property Management Fees [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Due to Related Parties | [3] | 622 | 622 | $ 0 | ||||||
Related Party Transaction, Expenses from Transactions with Related Party | [3] | $ 622 | $ 0 | $ 622 | $ 0 | |||||
[1] | As of June 30, 2017, the Sponsor had incurred $4,452,858 of organizational and offering costs on behalf of the Company. However, the Company is only obligated to reimburse the Sponsor for such organizational and offering expenses to the extent of 3% of gross offering proceeds. The payable related to this obligation is reflected in “Due to affiliates” in the consolidated balance sheets. | |||||||||
[2] | To the extent the Advisor elects, in its sole discretion to defer all or any portion of its monthly asset management fee, the Advisor will be deemed to have waived, not deferred, that portion up to 0.025% of the total investment value of the Company’s assets. For the three and six months ended June 30, 2017, the Advisor waived $49,214 and $77,039, respectively, of asset management fees, which are not subject to future recoupment by the Advisor. No asset management fees were waived for the three or six months ended June 30, 2016. | |||||||||
[3] | Property management fees are presented as property operating expenses. |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Textual) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
COMMITMENTS AND CONTINGENCIES [Line Items] | ||
Other Commitment | $ 2,113,737 | |
Restricted Cash and Cash Equivalents | $ 1,859,899 | $ 245,604 |
SUBSEQUENT EVENTS (Details Text
SUBSEQUENT EVENTS (Details Textual) | Aug. 11, 2017$ / sharesshares | Aug. 10, 2017USD ($)$ / sharesshares | Aug. 09, 2017USD ($)shares | Jul. 11, 2017USD ($)$ / shares | Aug. 09, 2017USD ($)shares | Jul. 20, 2017USD ($)a | Jul. 17, 2017USD ($) | Jul. 20, 2016USD ($)shares | Jun. 30, 2017USD ($)$ / sharesshares | Jun. 30, 2016USD ($) | Aug. 14, 2017$ / sharesshares | Dec. 31, 2016$ / sharesshares | Oct. 19, 2015$ / sharesshares |
Subsequent Event [Line Items] | |||||||||||||
Dividends | $ 1,311,503 | ||||||||||||
Stock Issued During Period, Shares, New Issues | shares | 6,958,810 | 6,231,455 | |||||||||||
Stock Issued During Period, Value, New Issues | $ 69,588,103 | $ 62,314,551 | 37,937,373 | ||||||||||
Payments to Acquire Real Estate | $ 49,134,241 | $ 15,731,000 | |||||||||||
Stock Issued During Period, Shares, Dividend Reinvestment Plan | shares | 176,548 | ||||||||||||
Stock Issued During Period, Value, Dividend Reinvestment Plan | $ 1,765,478 | ||||||||||||
Common Stock, Shares Authorized | shares | 200,000,000 | 200,000,000 | 200,000,000 | ||||||||||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||
Subsequent Event [Member] | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Dividends | $ 344,139 | ||||||||||||
Stock Issued During Period, Shares, New Issues | shares | 0 | ||||||||||||
Stock Issued During Period, Value, New Issues | $ 0 | ||||||||||||
Area of Real Estate Property | a | 51,800 | ||||||||||||
Payments to Acquire Real Estate | $ 7,400,000 | ||||||||||||
Stock Issued During Period, Value, Dividend Reinvestment Plan | $ 303,083 | $ 278,380 | |||||||||||
Dividends Payable, Amount Per Share Per Day | $ / shares | $ 0.0018817 | $ 0.0019444 | |||||||||||
Dividends Payable | $ 371,708 | $ 344,139 | |||||||||||
Business Acquisition, Transaction Costs | $ 281,862 | ||||||||||||
Common Shares Ownership Limit Percentage,Minimum | 8.00% | ||||||||||||
Common Shares Ownership Limit Percentage ,Maximum | 9.80% | ||||||||||||
Advisory Agreements Amended Terms | The Restated Advisory Agreement amends and restates the Amended and Restated Advisory Agreement by and among the Company, the Advisor and the Sponsor, dated as of January 17, 2017, in order to reflect, in addition to certain ministerial and conforming changes, (1) amendments to the description of the Advisors duties, (2) an expansion of the definition of Large Investors to encompass investors with aggregate subscriptions or purchases for at least $1 million in one or more securities offerings sponsored by the Sponsor and to allow the Company to include as Large Investors clients of one or more financial advisors whose clients collectively meet the foregoing requirement, (3) revisions to the terms of certain compensation payable to the Advisor, including rebates paid by the Advisor to Large Investors with respect to the asset management fee, subordinated participation fee and liquidation fee, and a reduction in the applicable percentage used to calculate the subordinated participation fee from 40% to 30%, and (4) conforming edits throughout the Restated Advisory Agreement in connection with the designation and reclassification of the Companys Class C common stock and Class S common stock described above. | ||||||||||||
Common Stock Class S Offering Plans, Description | Holders of Class S common stock are required to hold their Class S shares for a minimum of one year before they can participate in the program. The Company will repurchase Class S shares based on the then-applicable NAV per share and the Class S share repurchase will be limited to 2% of the Companys aggregate applicable NAV per month, up to 5% of its aggregate NAV per quarter, with respect to such Class S shares. | ||||||||||||
Subsequent Event [Member] | Conventional Mortgage Loan [Member] | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.40% | ||||||||||||
Debt Instrument, Maturity Date | Mar. 2, 2021 | ||||||||||||
Proceeds from Issuance of Long-term Debt | $ 6,000,000 | ||||||||||||
Subsequent Event [Member] | Redeemable Common Stock [Member] | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Stock Issued During Period, Shares, New Issues | shares | 133,661 | ||||||||||||
Stock Issued During Period, Value, New Issues | $ 1,296,476 | ||||||||||||
Subsequent Event [Member] | Common Class C [Member] | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Common Stock, Shares Authorized | shares | 400,000,000 | ||||||||||||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.001 | ||||||||||||
Subsequent Event [Member] | Common Class S [Member] | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Common Stock, Shares Authorized | shares | 100,000,000 | ||||||||||||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.001 |