Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Aug. 07, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Resource Apartment REIT III, Inc. | |
Entity Central Index Key | 1,652,926 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Class A common stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding, Class A | 616,466 | |
Class T common stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding, Class A | 1,067,952 | |
Class R Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding, Class A | 25,014 | |
Class I Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding, Class A | 21,906 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Investments: | ||
Rental properties, net | $ 2,436,491 | $ 2,445,835 |
Identified intangible assets, net | 0 | 27,870 |
Investments | 2,436,491 | 2,473,705 |
Cash | 12,801,170 | 3,351,536 |
Restricted cash | 5,765 | 7,733 |
Tenant receivables, net | 1,000 | 788 |
Due from related parties | 3,640 | 2,352 |
Contribution receivable | 0 | 210,000 |
Prepaid expense | 1,185,077 | 100,485 |
Deferred offering costs | 4,396,190 | 2,848,199 |
Total assets | 20,829,333 | 8,994,798 |
Liabilities: | ||
Mortgage note payable, net of deferred financing costs of $33,348 and $34,166 | 1,577,899 | 1,590,834 |
Accounts payable and accrued expenses | 153,649 | 214,284 |
Due to related parties | 6,501,390 | 3,616,713 |
Tenant prepayments | 1,364 | 0 |
Security deposits | 6,100 | 3,300 |
Distributions payable | 18,862 | 25,174 |
Total liabilities | 8,259,264 | 5,450,305 |
Stockholder's equity: | ||
Preferred stock | 0 | 0 |
Additional paid-in capital | 14,359,063 | 4,380,126 |
Accumulated deficit | (1,806,329) | (841,115) |
Total stockholder's equity | 12,570,069 | 3,544,493 |
Total liabilities and stockholder's equity | 20,829,333 | 8,994,798 |
Convertible Stock | ||
Stockholder's equity: | ||
Preferred stock | 500 | 500 |
Class A common stock | ||
Stockholder's equity: | ||
Common stock | 6,161 | 3,842 |
Class T common stock | ||
Stockholder's equity: | ||
Common stock | 10,674 | 1,140 |
Class R Common Stock | ||
Stockholder's equity: | ||
Common stock | 0 | 0 |
Class I Common Stock | ||
Stockholder's equity: | ||
Common stock | $ 0 | $ 0 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) | Apr. 25, 2017 | Jun. 30, 2017 | Jun. 28, 2017 | Dec. 31, 2016 |
Deferred financing costs | $ 33,348 | $ 34,166 | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 | ||
Preferred stock, shares issued (in shares) | 0 | 0 | ||
Preferred stock, shares outstanding (in shares) | 0 | 0 | ||
Common stock, par value (in dollars per share) | $ 0.01 | |||
Common stock, shares authorized (in shares) | 1,000,000,000 | |||
Convertible Stock | ||||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||
Preferred stock, shares authorized (in shares) | 50,000 | 50,000 | ||
Preferred stock, shares issued (in shares) | 50,000 | 50,000 | ||
Preferred stock, shares outstanding (in shares) | 50,000 | 50,000 | ||
Class A common stock | ||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | |
Common stock, shares authorized (in shares) | 25,000,000 | 25,000,000 | 250,000,000 | |
Common stock, shares issued (in shares) | 616,086 | 384,195 | ||
Common stock, shares outstanding (in shares) | 616,086 | 384,195 | ||
Authorized stock dividend of common stock (in shares) | 6,100 | |||
Class T common stock | ||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | |
Common stock, shares authorized (in shares) | 25,000,000 | 25,000,000 | 750,000,000 | |
Common stock, shares issued (in shares) | 1,067,396 | 114,037 | ||
Common stock, shares outstanding (in shares) | 1,067,396 | 114,037 | ||
Authorized stock dividend of common stock (in shares) | 10,568 | |||
Class R Common Stock | ||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0 | |
Common stock, shares authorized (in shares) | 750,000,000 | 750,000,000 | 0 | |
Common stock, shares issued (in shares) | 0 | 0 | ||
Common stock, shares outstanding (in shares) | 0 | 0 | ||
Class I Common Stock | ||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0 | |
Common stock, shares authorized (in shares) | 75,000,000 | 75,000,000 | 0 | |
Common stock, shares issued (in shares) | 0 | 0 | ||
Common stock, shares outstanding (in shares) | 0 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Revenues: | ||||
Rental income | $ 51,713 | $ 0 | $ 101,154 | $ 0 |
Total revenues | 51,713 | 0 | 101,154 | 0 |
Expenses: | ||||
Rental operating | 19,511 | 0 | 40,601 | 0 |
Acquisition costs | 83,233 | 0 | 83,233 | 0 |
Property management fees | 2,580 | 0 | 4,762 | 0 |
Management fees - related parties | 6,730 | 0 | 13,457 | 0 |
General and administrative | 238,385 | 26,458 | 540,404 | 26,458 |
Depreciation and amortization expense | 23,392 | 0 | 48,698 | 0 |
Total expenses | 373,831 | 26,458 | 731,155 | 26,458 |
Loss before other income (expense) | (322,118) | (26,458) | (630,001) | (26,458) |
Other income (expense): | ||||
Other income | 0 | 0 | 1,500 | |
Interest income | 3,903 | 0 | 5,484 | 0 |
Interest expense | (13,039) | 0 | (25,980) | 0 |
Net loss | (331,254) | (26,458) | (648,997) | (26,458) |
Class A common stock | ||||
Other income (expense): | ||||
Net loss attributable to common stockholders | $ (140,820) | $ (26,458) | $ (323,547) | $ (26,458) |
Basic and diluted net loss per common share (in dollars per share) | $ (0.25) | $ (1.04) | $ (0.65) | $ (1.15) |
Weighted-average number of shares outstanding, basic and diluted (in shares) | 559,739 | 25,511 | 501,031 | 23,008 |
Class T common stock | ||||
Other income (expense): | ||||
Net loss attributable to common stockholders | $ (190,434) | $ 0 | $ (325,450) | $ 0 |
Basic and diluted net loss per common share (in dollars per share) | $ (0.27) | $ 0 | $ (0.67) | $ 0 |
Weighted-average number of shares outstanding, basic and diluted (in shares) | 696,020 | 0 | 486,845 | 0 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Stockholders' Equity - 6 months ended Jun. 30, 2017 - USD ($) | Total | Class A common stock | Class T common stock | Common StockClass A common stock | Common StockClass T common stock | Convertible StockConvertible Stock | Additional Paid-in Capital | Accumulated Deficit |
Beginning balance at Dec. 31, 2016 | $ 3,544,493 | $ 3,842 | $ 1,140 | $ 500 | $ 4,380,126 | $ (841,115) | ||
Beginning balance (in shares) at Dec. 31, 2016 | 384,195 | 114,037 | 384,195 | 114,037 | 50,000 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock | 11,035,315 | $ 2,192 | $ 9,366 | 11,023,757 | ||||
Issuance of common stock (in shares) | 616,086.02 | 1,067,395.79 | 219,259 | 936,581 | ||||
Offering costs | (1,328,398) | (1,328,398) | ||||||
Cash distributions declared | (64,650) | $ (38,400) | $ (26,250) | (64,650) | ||||
Stock dividends (in shares) | 10,956 | 14,993 | ||||||
Stock dividends | 0 | $ 110 | $ 150 | 251,307 | (251,567) | |||
Common stock issued through distribution reinvestment plan (in shares) | 1,676 | 1,785 | ||||||
Common stock issued through distribution reinvestment plan | 32,306 | $ 16,087 | $ 16,219 | $ 17 | $ 18 | 32,271 | ||
Net loss | (648,997) | (648,997) | ||||||
Ending balance at Jun. 30, 2017 | $ 12,570,069 | $ 6,161 | $ 10,674 | $ 500 | $ 14,359,063 | $ (1,806,329) | ||
Ending balance (in shares) at Jun. 30, 2017 | 616,086 | 1,067,396 | 616,086 | 1,067,396 | 50,000 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows - USD ($) | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cash flows from operating activities: | ||
Net loss | $ (648,997) | $ (26,458) |
Adjustment to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization expense | 48,698 | 0 |
Amortization of deferred financing costs | 818 | 0 |
Changes in operating assets and liabilities: | ||
Restricted cash | 1,968 | 0 |
Tenant receivable, net | (212) | 0 |
Due from related parties | (1,288) | 0 |
Prepaid expenses and other assets | (83,544) | 420 |
Due to related parties | 751,834 | 23,288 |
Accounts payable and accrued expenses | (141,375) | 2,750 |
Security deposits | 2,800 | 0 |
Net cash used in operating activities | (69,298) | 0 |
Cash flows from investing activities: | ||
Deposit for property acquisition | (1,000,000) | 0 |
Capital expenditures | (11,484) | 0 |
Net cash used in investing activities | (1,011,484) | 0 |
Cash flows from financing activities: | ||
Net proceeds from issuance of common stock | 10,582,825 | 0 |
Payments on borrowings | (13,753) | 0 |
Distributions paid on common stock | (38,656) | 0 |
Net cash provided by financing activities | 10,530,416 | 0 |
Net increase in cash | 9,449,634 | 0 |
Cash at beginning of period | 3,351,536 | 200,000 |
Cash at end of period | $ 12,801,170 | $ 200,000 |
Nature of Business and Operatio
Nature of Business and Operations | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business and Operations | NATURE OF BUSINESS AND OPERATIONS Resource Apartment REIT III, Inc. (the "Company") was organized in Maryland on July 15, 2015 . The Company is offering up to $1.1 billion of shares of its common stock, consisting of up to $1.0 billion of shares in its primary offering and up to $100.0 million of shares pursuant to its distribution reinvestment plan (the "DRIP"). Through June 30, 2017, the Company offered shares of Class A and Class T common stock at prices of $10.00 per share and $9.47 per share, respectively. As of July 3, 2017, the Company ceased offering shares of Class A and Class T common stock in its primary offering. Commencing July 3, 2017, the Company is offering shares of Class R and Class I common stock at prices of $9.52 per share and $9.13 per share, respectively. The initial offering price for shares offered pursuant to the DRIP is $9.60 per share for Class A, $9.09 per share for Class T, $9.14 per share for Class R and $8.90 per share for Class I. The Company will determine its net asset value ("NAV") per share on a date no later than June 30, 2018 (the "NAV Pricing Date"). Commencing on the NAV Pricing Date, if the primary offering is ongoing, the Company will offer Class R and Class I shares in the primary offering at a price equal to the NAV per share for Class R and Class I shares, respectively, plus applicable selling commissions and dealer manager fees, and pursuant to the DRIP at a price equal to 96% of the new primary offering price. If the Company’s primary offering is not ongoing on the NAV Pricing Date, or on the date of any subsequent NAV pricing, it will offer Class A, Class T, Class R and Class I shares pursuant to the DRIP at a price equal to 96% of the most recently determined NAV per share. The Company will update its NAV at least annually following the NAV Pricing Date and further adjust the per share price in the primary offering and DRIP accordingly. The Company qualifies as an emerging growth company. As of June 30, 2017 , the Company has raised aggregated offering proceeds of approximately $15.7 million from the sale of 601,207 Class A shares and 1,049,996 Class T shares of common stock. On June 29, 2016 , the Company satisfied the $2.0 million minimum offering amount for its initial public offering, excluding shares purchased by residents of Pennsylvania, New York and Washington. As a result, the Company has broken escrow and issued shares of common stock in the offering. The Company broke escrow in New York on October 11, 2016. Subscription payments received from residents of Pennsylvania and Washington will continue to be held in escrow until the Company has received aggregate subscriptions of at least $50.0 million and $20.0 million , respectively. Having raised the minimum offerings, the offering proceeds were released by the escrow agent to the Company and available for acquisition of properties and other purposes. Resource REIT Advisor, LLC (formerly known as Resource Apartment Advisor III, LLC) (the "Advisor"), which is an indirect wholly-owned subsidiary of Resource America, Inc. ("RAI"), operating in the real estate, financial fund management and commercial finance sectors, contributed $200,000 to the Company in exchange for 20,000 shares of Class A common stock on August 10, 2015. On June 29, 2016 , RAI purchased 222,222 shares of Class A common stock for $2.0 million in the offering. On August 5, 2016, the Advisor exchanged 5,000 shares of common stock for 50,000 shares of convertible stock. Under limited circumstances, these shares may be converted into shares of the Company's Class A common stock satisfying its obligation to pay the Advisor an incentive fee and diluting its stockholders’ interest in the Company. RAI is a wholly-owned subsidiary of C-III Capital Partners, LLC ("C-III"), a leading commercial real estate services company engaged in a broad range of activities. C-III controls the Advisor, Resource Securities LLC ("Resource Securities"), the Company's dealer manager, and Resource Apartment Manager III, LLC, the Company's property manager. C-III also controls all of the shares of the Company's common stock held by RAI and the Advisor. The Company’s objective is to take advantage of Resource Real Estate, Inc.’s (its "Sponsor") multifamily investing and lending platforms to invest in apartment communities in order to provide the investor with growing cash flow and increasing asset values. The Company intends to acquire underperforming apartments which it will renovate and stabilize in order to increase rents. To a lesser extent, the Company will also seek to originate and acquire commercial real estate debt secured by apartments having the same characteristics. The Company believes multiple opportunities exist within the apartment industry today and will continue to present themselves over the next few years to real estate investors who possess the following characteristics: (i) extensive experience in multifamily investing, (ii) strong management platforms specializing in operational and financial performance optimization, (iii) financial sophistication allowing them to benefit from complex opportunities, and (iv) the overall scale and breadth of a national real estate platform in both the equity and debt markets. At June 30, 2017 and December 31, 2016 , the Company owned one apartment property located in Alexandria, Virginia. At June 30, 2017 , the Company was under contract to purchase its second property, a 220 -unit apartment complex located in Jacksonville, Florida, and completed the transaction on July 31, 2017 ( see Note 13 ). The Company intends to elect and qualify to be taxed as a real estate investment trust ("REIT") for U.S. federal income tax purposes under the provisions of the Internal Revenue Code of 1986, as amended, commencing with its taxable year ending December 31, 2017. As such, to maintain its REIT qualification for U.S. federal income tax purposes, the Company is generally required to distribute at least 90% of its net income (excluding net capital gains) to its stockholders as well as comply with certain other requirements. Accordingly, once qualified as a REIT, the Company generally will not be subject to U.S. federal income taxes to the extent that it annually distributes all of its REIT taxable income to its stockholders. The Company also intends to operate its business in a manner that will permit it to maintain its exemption from registration under the Investment Company Act of 1940, as amended. The consolidated financial statements and the information and tables contained in the notes thereto are unaudited. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"), pertaining to interim financial statements in Form 10-Q. However, in the opinion of management, these interim financial statements include all the necessary adjustments to fairly present the results of the interim periods presented. The consolidated balance sheet as of December 31, 2016 was derived from the audited consolidated financial statements as of and for the year ended December 31, 2016 . The unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 . The results of operations for the six months ended June 30, 2017 may not necessarily be indicative of the results of operations for the full year ending December 31, 2017 . |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with GAAP. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries as follows: Subsidiaries Resource Apartment REIT III Holdings, LLC Resource Apartment REIT III OP, LP RRE Payne Place Holdings, LLC RRE Bay Club Holdings, LLC All intercompany accounts have been eliminated in consolidation. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Real Estate Investments The Company records acquired real estate at fair value on its acquisition date. The Company considers the period of future benefit of an asset to determine its appropriate useful life. The Company's estimated useful lives of its assets by class are as follows: Buildings 27.5 years Building improvements 3.0 to 27.5 years Tenant improvements Shorter of lease term or expected useful life Lease intangibles Weighted average remaining term of related lease Impairment of Long Lived Assets When circumstances indicate the carrying value of a property may not be recoverable, the Company will review the asset for impairment. This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition. These estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors. If impairment exists, due to the inability to recover the carrying value of a property, an impairment loss will be recorded to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held and used. For properties held for sale, the impairment loss is the adjustment to fair value less estimated cost to dispose of the asset. These assessments have a direct impact on net income because recording an impairment loss results in an immediate negative adjustment to net income. There were no impairment losses recorded on long lived assets during the three and six months ended June 30, 2017 and 2016 . Loans Held for Investment The real estate loans receivable will be recorded at cost and reviewed for potential impairment at each balance sheet date. A loan receivable is considered impaired when it becomes probable, based on current information, that the Company will be unable to collect all amounts due according to the loan’s contractual terms. The amount of impairment, if any, is measured by comparing the recorded amount of the loan to the present value of the expected cash flows or the fair value of the collateral. If a loan is deemed to be impaired, the Company will record a reserve for loan losses through a charge to income for any shortfall. Failure to recognize impairment would result in the overstatement of the carrying values of the Company’s real estate loans receivable and an overstatement of the Company’s net income. The Company may acquire real estate loans at a discount due to credit quality. Revenues from these loans are recorded under the effective interest method. Under this method an effective interest rate ("EIR") is applied to the cost basis of the real estate loan receivable. The EIR that is calculated when the real estate loan receivable is acquired remains constant and is the basis for subsequent impairment testing and income recognition. If the amount and timing of future cash collections are not reasonably estimable, the Company accounts for the real estate receivable on the cost recovery method. Under the cost recovery method of accounting, no income is recognized until the basis of the real estate loan receivable has been fully recovered. Interest income from loans receivable will be recognized based on the contractual terms of the debt instrument. Fees related to any buydown of the interest rate will be deferred as prepaid interest income and amortized over the term of the loan as an adjustment to interest income. Closing costs related to the purchase of a loan receivable will be amortized over the term of the loan and accreted as an adjustment against interest income. Allocation of Purchase Price of Acquired Assets Upon the acquisition of real properties, it is the Company’s policy to allocate the purchase price of properties to acquired tangible assets, consisting of land, building, fixtures and improvements, and identified intangible lease assets and liabilities, consisting of the value of above-market and below-market leases, as applicable, other value of in-place leases and value of tenant relationships, based in each case on their fair values. The Company records above-market and below-market in-place lease values for acquired properties based on the present value (using an interest rate that reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of the lease. The Company amortizes any capitalized above-market or below-market lease values as an increase or reduction to rental income over the remaining non-cancelable terms of the respective leases, which the Company expects will range from one month to one year . The Company measures the aggregate value of other intangible assets acquired based on the difference between (i) the property valued with existing in-place leases adjusted to market rental rates and (ii) the property valued as if vacant. Management’s estimates of value are expected to be made using methods similar to those used by independent appraisers (e.g., discounted cash flow analysis). Factors to be considered by management in its analysis include an estimate of carrying costs during hypothetical expected lease-up periods considering current market conditions and costs to execute similar leases. The Company also considers information obtained about each property as a result of its pre-acquisition due diligence, marketing and leasing activities in estimating the fair value of the tangible and intangible assets acquired. In estimating carrying costs, management also includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods. Management also estimates costs to execute similar leases including leasing commissions and legal and other related expenses to the extent that such costs have not already been incurred in connection with a new lease origination as part of the transaction. The total amount of other intangible assets acquired is further allocated to in-place lease values and customer relationship intangible values based on management’s evaluation of the specific characteristics of each tenant’s lease and the Company’s overall relationship with that respective tenant. Characteristics to be considered by management in allocating these values include the nature and extent of the Company’s existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality and expectations of lease renewals (including those existing under the terms of the lease agreement), among other factors. The Company amortizes the value of in-place leases to expense over the initial term of the respective leases. The value of customer relationship intangibles is amortized to expense over the initial term and any renewal periods in the respective leases, but in no event will the amortization periods for the intangible assets exceed the remaining depreciable life of the building. Should a tenant terminate its lease, the unamortized portion of the in-place lease value and customer relationship intangibles would be charged to expense in that period. The determination of the fair value of the assets and liabilities acquired requires the use of significant assumptions with regard to current market rental rates, discount rates and other variables. The use of inappropriate estimates would result in an incorrect assessment of the fair value of these assets and liabilities, which could impact the amount of the Company’s reported net income. These estimates are subject to change until all information is finalized, which is generally within one year of the acquisition date. Revenue Recognition The Company recognizes minimum rent, including rental abatements and contractual fixed increases attributable to operating leases, on a straight-line basis over the term of the related lease and includes amounts expected to be received in later years in deferred rents. The Company records property operating expense reimbursements due from tenants for common area maintenance, real estate taxes and other recoverable costs in the period the related expenses are incurred. Tenant Receivables Tenant receivables are stated in the consolidated financial statements as amounts due from tenants net of an allowance for uncollectible receivables. Payment terms vary and receivables outstanding longer than the payment terms are considered past due. The Company determines its allowance by considering a number of factors, including the length of time receivables are past due, security deposits held, the Company’s previous loss history, the tenants’ current ability to pay their obligations to the Company, the condition of the general economy and the industry as a whole. The Company writes off receivables when they become uncollectible. At June 30, 2017 and December 31, 2016 , there were no allowances for uncollectible receivables. Income Taxes The Company intends to elect and qualify to be taxed as a REIT, commencing with its taxable year ending December 31, 2017. Accordingly, once qualified as a REIT, the Company will generally not be subject to corporate U.S. federal or state income tax to the extent that it makes qualifying distributions to its stockholders, and provided it satisfies on a continuing basis, through actual investment and operating results, the REIT requirements including certain asset, income, distribution and stock ownership tests. If the Company fails to qualify as a REIT, and does not qualify for certain statutory relief provisions, it will be subject to U.S. federal, state and local income taxes and may be precluded from qualifying as a REIT for the subsequent four taxable years following the year in which it lost its REIT qualification. Accordingly, the Company’s failure to qualify as a REIT could have a material adverse impact on its results of operations and amounts available for distribution to its stockholders. The dividends paid deduction of a REIT for qualifying dividends to its stockholders is computed using the Company’s taxable income as opposed to net income reported on the financial statements. Taxable income, generally, will differ from net income reported on the financial statements because the determination of taxable income is based on tax provisions and not financial accounting principles. The Company may elect to treat certain of its subsidiaries as taxable REIT subsidiaries ("TRSs"). In general, a TRS may hold assets and engage in activities that it cannot hold or engage in directly and generally may engage in any real estate or non-real estate-related business. A TRS is subject to U.S. federal, state and local corporate income taxes. While a TRS may generate net income, a TRS can declare dividends to the Company which will be included in the Company’s taxable income and necessitate a distribution to its stockholders. Conversely, if the Company retains earnings at a TRS level, no distribution is required and the Company can increase book equity of the consolidated entity. Earnings Per Share Basic earnings per share are computed by dividing net income (loss) attributable to common stockholders for each period by the weighted-average common shares outstanding during the period for each share class. Diluted net income (loss) per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted to common stock. For the purposes of calculating earnings per share, all common shares and per share information in the financial statements have been retroactively adjusted for the effect of any stock dividends and stock splits. In accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") No. 260-10-45, "Earnings Per Share", the Company uses the two-class method to calculate earnings per share. Basic earnings per share is calculated based on dividends declared and the rights of common shares and participating securities in any undistributed earnings, which represents net income remaining after deduction of dividends declared during the period. The undistributed earnings are allocated to all outstanding common shares based on their relative percentage of each class of shares to the total number of outstanding shares. The Company did not have any participating securities outstanding other than Class A common stock and Class T common stock during the periods presented ( see Note 9 ). Organization and Offering Costs The Company incurs organization and offering costs in pursuit of its financing. Organization and offering costs (other than selling commissions and dealer manager fees) of the Company are initially being paid by the Advisor on behalf of the Company. Pursuant to the advisory agreement between the Company and the Advisor, the Company is obligated to reimburse the Advisor for organization and other offering costs paid by the Advisor on behalf of the Company, up to an amount equal to 4.0% of gross offering proceeds as of the termination of the initial public offering if the Company raises less than $500 million in the primary portion of the initial public offering and 2.5% of gross offering proceeds as of the termination of the initial public offering if the Company raises $500 million or more in the primary portion of the initial public offering. Through June 30, 2017 , the Company has charged approximately $360,624 to equity for the payment of offering costs consisting of accounting, advertising, allocated payroll, due diligence, marketing, legal, printing and similar costs. At June 30, 2017 , the Advisor has advanced approximately $4.7 million of these costs on behalf of the Company, of which $4.3 million have been deferred at June 30, 2017 . A portion of deferred offering costs will be charged to equity upon the sale of each share of common stock sold under the public offering. Such deferred costs will only become a liability of the Advisor to the extent that organization and offering costs incurred by us exceed 4% of the gross proceeds of the initial public offering. However, if the Company raises the maximum offering amount in the primary offering, organization and offering expenses (excluding selling commissions, the dealer manager fee and the distribution and stockholder servicing fee) are estimated to be approximately 1.0% of the gross proceeds of the initial public offering. When recorded by the Company, organization costs are expensed as incurred, which include all expenses incurred by the Company in connection with its formation, including but not limited to legal fees and other costs to incorporate. There can be no assurance that the Company's plans to raise capital will be successful. Prior to the Company breaking escrow, the Advisor incurred approximately $104,266 of formation and other operating expenses on the Company's behalf, which will not be reimbursed to the Advisor. Outstanding Class T shares issued in the Company's primary offering are subject to a 1% annual distribution and shareholder servicing fee for five years from the date on which such share is issued. The Company will cease paying the distribution and shareholder servicing fee on each Class T share prior to the fifth anniversary of its issuance on the earliest of the following, should any of these events occur: (i) the date at which, in the aggregate, underwriting compensation from all sources equals 10% of the gross proceeds from the Company's primary offering (i.e., excluding proceeds from sales pursuant to the DRIP); (ii) the date on which the Company lists its common stock on a national securities exchange; and (iii) the date of a merger or other extraordinary transaction in which the Company is a party and in which the common stock is exchanged for cash or other securities. The Company cannot predict if or when any of these events will occur. Outstanding Class R shares issued in the Company's primary offering are also subject to a 1% annual distribution and shareholder servicing fee. The Company will cease paying the distribution and shareholder servicing fee with respect to Class R shares held in any particular account, and those Class R shares will convert into a number of Class I shares determined by multiplying each Class R share to be converted by the applicable "Conversion Rate," on the earlier of (i) the date after the termination of the primary offering at which, in the aggregate, underwriting compensation from all sources equals 10% of the gross proceeds from its primary offering; (ii) a listing of the Class I shares on a national securities exchange; (iii) a merger or consolidation of the company with or into another entity, or the sale or other disposition of all or substantially all of its assets; and (iv) the end of the month in which the total underwriting compensation (which consists of selling commissions, dealer manager fees and distribution and shareholder servicing fees) paid with respect to such Class R shares purchased in a primary offering is not less than 8.5% (or a lower limit, provided that, in the case of a lower limit, the agreement between the Resource Securities and the broker-dealer in effect at the time Class R shares were first issued to such account sets forth the lower limit and Resource Securities advises the Company's transfer agent of the lower limit in writing) of the gross offering price of those Class R shares purchased in such primary offering (excluding shares purchased through its distribution reinvestment plan). The Company records distribution and shareholder servicing fees as a reduction to additional paid-in capital and the related liability in an amount equal to the maximum fees payable in relation to the Class T and Class R shares on the date the shares are issued. The liability will be relieved over time, as the fees are paid to the Dealer Manager, or adjusted if the fees are no longer payable pursuant to the conditions described above. For issued Class T shares, the Company has accrued an estimate of the total distribution and shareholder servicing fee of $497,173 for the full five year period at June 30, 2017 based on a total of 5% of the gross proceeds from all Class T shares sold, of which, the Company paid $16,782 cumulatively through June 30, 2017 . There were no Class R shares issued and outstanding as of June 30, 2017 . Adoption of New Accounting Standards Accounting Standards Issued But Not Yet Effective In May 2014, FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers", which will replace most existing revenue recognition guidance in GAAP. The core principle of ASU No. 2014-09 is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. ASU No. 2014-09 requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. ASU No. 2014-09 will be effective for the Company beginning January 1, 2018, including interim periods in 2018, and allows for both retrospective and prospective methods of adoption. In accordance with the Company’s plan for the adoption of ASU 2014-09, the Company has identified revenue streams and is performing an in-depth review to identify the related performance obligations and to evaluate the impact on the Company’s consolidated financial statements and internal accounting processes and controls. As the majority of the Company’s revenue is derived from lease contracts, the Company does not expect that the adoption of ASU 2014-09 or related amendments and modifications issued by the FASB will have a material impact on its consolidated financial statements. In February 2016, FASB issued ASU No. 2016-02, "Leases", which is intended to improve financial reporting about leasing transactions and requires organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. ASU No. 2016-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is continuing to evaluate this guidance; however, it does not expect the adoption of ASU No. 2016-02 to have a significant impact on its consolidated financial statements. In June 2016, FASB issued ASU No. 2016-03 "Financial Instruments - Credit Losses", which requires measurement and recognition of expected credit losses for financial assets held. The standard update is effective for the Company beginning January 1, 2019. The Company is continuing to evaluate this guidance; however, it does not expect the adoption of ASU No. 2016-03 to have a significant impact on its consolidated financial statements. In August 2016, FASB issued ASU No. 2016-15 "Classification of Certain Cash Receipts and Cash Payments", which addresses eight specific cash flow issues with the objective of reducing existing diversity in practice. The guidance is effective for the Company as of January 1, 2018. Early application is permitted. The adoption of the new requirements is not expected to have a material impact on the Company's consolidated statement of cash flows. In November 2016, FASB issued ASU No. 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash," which provides guidance on the classification of restricted cash in the statement of cash flows. ASU No. 2016-18 is effective for the Company's fiscal year beginning January 1, 2018 and the Company does not expect the adoption of ASU No. 2016-18 to have a material effect on its consolidated financial statements and disclosures. In January 2017, FASB issued ASU No. 2017-01, "Business Combinations (Topic 850): Clarifying the Definition of Business," which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of businesses. ASU No. 2017-01 is effective for the Company beginning January 1, 2018 but early adoption is allowed. The Company is currently evaluating the impact the adoption of ASU No. 2017-01 may have on its consolidated financial statements. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 6 Months Ended |
Jun. 30, 2017 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | SUPPLEMENTAL CASH FLOW INFORMATION The following table presents supplemental cash flow information: Six Months Ended June 30, 2017 2016 Non-cash operating, financing and investing activities: Offering costs payable $ 1,796,886 $ 1,514,089 Cash distributions on common stock declared but not yet paid 18,862 — Stock issued from distribution reinvestment plan 32,306 — Stock dividend issued 251,567 — Subscription of common stock — 2,000,000 Cash paid during the year for: Interest $ 20,986 $ — |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2017 | |
Business Combinations [Abstract] | |
Acquisitions | ACQUISITIONS On August 19, 2016, the Company, through its wholly-owned subsidiary, purchased a multifamily community located in Alexandria, Virgina ("Payne Place"). Payne Place, constructed in 1950, contains 11 units and amenities, including but not limited to storage lockers and a patio with a barbeque area. Payne Place encompasses 6,730 rentable square feet. At June 30, 2017 , Payne Place was 100% leased. Payne Place was acquired for a purchase price of $2.5 million , excluding closing costs. In connection with the acquisition, the Company incurred an acquisition fee of $52,864 to its Advisor pursuant to the advisory agreement and $14,200 of acquisition costs reimbursable to related parties. In order to finalize the fair values of the acquired assets and liabilities, the Company obtained a third-party appraisal. The valuation for Payne Place was finalized as of December 31, 2016 . The table below summarized the acquisition and the respective fair value assigned: Multifamily Community Name City and State Date of Acquisition Contractual Purchase Price (1) Land Building and Improvements Furniture, Fixtures and Equipment Intangible Assets Other Liabilities Fair Value Assigned Payne Place Alexandria, Virginia 8/19/2016 $ 2,500,000 $ 1,419,898 $ 1,016,451 $ 13,710 $ 49,941 $ (6,327 ) $ 2,493,673 (1) Contractual purchase price excludes closing costs, acquisition expenses, and other immaterial settlement date adjustments and pro-rations. Total revenues, rental operating expenses, acquisition costs and property management fees included on the consolidated statements of operations for the three and six months ended June 30, 2017 are attributable to Payne Place. |
Rental Properties, Net
Rental Properties, Net | 6 Months Ended |
Jun. 30, 2017 | |
Real Estate [Abstract] | |
Rental Properties, Net | RENTAL PROPERTY, NET At June 30, 2017 , the Company owned one property. The following table presents the Company's investment in rental properties: June 30, 2017 December 31, 2016 Land $ 1,419,898 $ 1,419,898 Building and improvements 1,021,675 1,018,051 Furniture, fixtures and equipment 24,812 21,317 Construction in progress 4,365 — 2,470,750 2,459,266 Less: accumulated depreciation (34,259 ) (13,431 ) Total rental property, net $ 2,436,491 $ 2,445,835 Depreciation expense for the three and six months ended June 30, 2017 was $10,504 and $20,828 , respectively. There was no depreciation expense for the same periods in 2016 . |
Identified Intangible Assets, N
Identified Intangible Assets, Net | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Identified Intangible Assets, Net | IDENTIFIED INTANGIBLE ASSETS, NET Identified intangible assets, net, consist of in-place rental leases. The value of in-place leases at June 30, 2017 and December 31, 2016 was $0 and $27,870 , respectively. Accumulated amortization at June 30, 2017 and December 31, 2016 was $49,941 and $22,071 , respectively. Amortization expense for the three months ended June 30, 2017 and 2016 was $12,888 and $0 , respectively. Amortization expense for the six months ended June 30, 2017 and 2016 was $27,870 and $0 , respectively. At June 30, 2017, the in-place leases were fully amortized. At December 31, 2016 , the weighted average remaining life of the rental leases was five months. |
Mortgage Notes Payable
Mortgage Notes Payable | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt Disclosure | MORTGAGE NOTES PAYABLE On December 15, 2016, the Company, through a wholly owned subsidiary, entered into a $1.6 million secured mortgage loan with JPMorgan Chase Bank, N.A., secured by Payne Place (the "Payne Place Loan"). The Payne Place Loan, which matures on January 1, 2047, bears interest at a fixed rate of 3.11% for the first three years. On January 1, 2020, the interest rate converts to a variable rate based on the six month London Interbank Offered Rate ("LIBOR") plus 2.25% , with an all-in rate floor of 2.50% and ceiling of 9.50% . Monthly payments include interest and principal in the amount of approximately $7,000 per month. Any remaining principal balance and all accrued and unpaid interest and fees will be due at maturity. The Company may prepay the Payne Place Loan in full at any time or in part from time to time: (1) during the first year of the loan upon payment of a prepayment premium equal to 3% of the amount prepaid; (2) during the second year of the loan upon payment of a prepayment premium equal to 2% of the amount prepaid; (3) during the third year of the loan upon payment of a prepayment premium equal to 1% of the amount prepaid; and (4) after the third year of the loan with no prepayment premium. The Payne Place Loan is guaranteed by RAI until the Company achieves the following: (a) owns a minimum of five apartment complexes; (b) has a minimum net worth of $50.0 million ; (c) has liquidity of no less than $5.0 million ; and (d) has an aggregate portfolio leverage of no more than 65% . The following is a summary of the Company's mortgage note payable as of June 30, 2017 and December 31, 2016 : Outstanding Borrowings Deferred Financing Costs, net Carrying Value Outstanding borrowings Deferred Financing Costs, net Carrying Value Average Average Collateral June 30, 2017 December 31, 2016 Payne Place $ 1,611,247 $ (33,348 ) $ 1,577,899 $ 1,625,000 $ (34,166 ) $ 1,590,834 $ 6,948 $ 1,933 Annual principal payments on the mortgage note payable for each of the next five 12-month periods ending June 30, and thereafter, are as follows: 2018 $ 33,743 2019 34,807 2020 35,905 2021 37,038 2022 38,206 Thereafter 1,431,548 $ 1,611,247 Deferred financing costs incurred to obtain financing are amortized over the term of the related debt. During the three months ended June 30, 2017 and 2016 , amortization of deferred financing costs of $490 and $0 , respectively, was included in interest expense. During the six months ended June 30, 2017 and 2016 , amortization of deferred financing costs of $818 and $0 , respectively, was included in interest expense. Accumulated amortization at June 30, 2017 and December 31, 2016 was $818 and $2,775 , respectively. Estimated amortization of the existing deferred financing costs for the next five 12-month periods ending June 30, are as follows: 2018 $ 1,935 2019 1,894 2020 1,851 2021 1,807 2022 1,761 Thereafter 24,100 $ 33,348 At June 30, 2017 and December 31, 2016 , the Company had $5,765 and $7,733 , respectively, of restricted cash related to escrow deposits held by the mortgage lender for real estate taxes. |
Certain Relationships and Relat
Certain Relationships and Related Party Transactions | 6 Months Ended |
Jun. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS The Company is externally managed and advised by the Advisor. Pursuant to the terms of the Advisory Agreement, the Advisor provides the Company with its management team, including its officers, along with appropriate support personnel. The Advisor will be reimbursed for the Company’s allocable share of costs for Advisor personnel, including allocable personnel salaries and benefits. Each of the Company’s officers is an employee of the Sponsor, which is the Advisor's parent company and a wholly-owned subsidiary of RAI. The Company does not expect to have any employees. The Advisor is not obligated to dedicate any specific portion of its time or its employees' time to the Company’s business. The Advisor and any employees of the Sponsor acting on behalf of the Advisor are at all times subject to the supervision and oversight of the Company’s board of directors and have only such functions and authority as the Company delegates to it. Effective April 28, 2017 , the Company renewed the advisory agreement with the Advisor through April 27, 2018 . The terms of the agreement are identical to those of the advisory agreement in effect through April 27, 2017 . During the course of the offering, the Advisor will provide offering-related services to the Company and will advance funds to the Company for both operating costs and organization and offering costs. These amounts will be reimbursed to the Advisor from the proceeds from the offering, subject to the aforementioned limits on organization and offering expense reimbursements, although there can be no assurance that the Company’s plans to raise capital will be successful. As of June 30, 2017 , the Advisor has advanced organization and offering costs on a cumulative basis on behalf of the Company of approximately $4.7 million . Relationship with the Advisor The Advisory Agreement has a one -year term and may be renewed for an unlimited number of successive one -year terms upon the approval of the Conflicts Committee of the Company's board of directors. Under the Advisory Agreement, the Advisor will receive fees and will be reimbursed for its expenses as set forth below: Acquisition fees. The Advisor earns an acquisition fee of 2.0% of the cost of investments acquired on behalf of the Company, plus any capital expenditure reserves allocated, or the amount funded by the Company to acquire loans, including acquisition expenses and any debt attributable to such investments. Asset management fees. The Advisor earns a monthly asset management fee equal to 0.083% (one-twelfth of 1.0% ) of the cost of each asset at the end of each month, without deduction for depreciation, bad debts or other non-cash reserves. The asset management fee is based only on the portion of the costs or value attributable to the Company’s investment in an asset if the Company does not own all of an asset and does not manage or control the asset. Disposition fees. The Advisor will earn a disposition fee in connection with the sale of a property equal to the lesser of one-half of the aggregate brokerage commission paid, or if none is paid, 2.0% of the contract sales price. Debt financing fees. The Advisor will earn a debt financing fee equal to 0.5% of the amount available under any debt financing obtained for which it provided substantial services. Expense reimbursements. The Company also will pay directly or reimburse the Advisor for all of the expenses paid or incurred by the Advisor or its affiliates on behalf of the Company or in connection with the services provided to the Company in relation to its public offering, including its distribution reinvestment plan offering. This includes all organization and offering costs of up to 4.0% of gross offering proceeds if the Company raises less than $500.0 million in the primary offering and 2.5% of gross offering proceeds if the Company raises more than $500.0 million in the primary offering. Reimbursements also include expenses the Advisor incurs in connection with providing services to the Company, including the Company’s allocable share of costs for Advisor personnel and overhead, out-of-pocket expenses incurred in connection with the selection and acquisition of properties or other real estate related debt investments, whether or not the Company ultimately acquires the investment. However, the Company will not reimburse the Advisor or its affiliates for employee costs in connection with services for which the Advisor earns acquisition or disposition fees. Prior to the Company breaking escrow, the Advisor incurred approximately $104,266 of formation and other operating expenses the Company's behalf, which will not be reimbursed to the Advisor. On August 18, 2016 , the Advisor provided a $555,000 bridge loan (the "Bridge Loan") to the Company. The Company used the proceeds of the Bridge Loan to partially finance the acquisition of Payne Place. The Bridge Loan incurred interest at an annual rate of LIBOR plus 3.00% . On November 1, 2016, the Company repaid the outstanding balance of the Bridge Loan and accrued interest. Interest expense associated with Bridge Loan for the year ended December 31, 2016 was $2,921 . Relationship with Resource Apartment Manager III, LLC Resource Apartment Manager III, LLC (the "Manager"), an affiliate of the Advisor, will manage real estate properties and real estate-related debt investments and will coordinate the leasing of and will manage construction activities related to the Company’s real estate property pursuant to the terms of the management agreement with the Manager. Property management fees. The Manager will earn a property management fee equal to 4.5% of actual gross cash receipts from the operations of real property investments that it manages and an oversight fee on any real property investments that are managed by third parties. Property management fees are deducted directly from the property's operating account by the property manager. Any property management fees paid to unaffiliated third party property managers in excess of 4.5% of actual gross receipts will be reimbursed to the Company by the Advisor. At June 30, 2017 and December 31, 2016 , the Advisor owes the Company $2,342 and $1,041 , respectively, for property management fees in excess of the 4.5% cap paid to the unaffiliated third party property manager. Construction management fees . The Manager will earn a construction management fee equal to 5.0% of actual aggregate costs to construct improvements to a property. Debt servicing fees . The Manager will earn a debt servicing fee equal to 2.75% of gross receipts from real estate-related debt investments. Expense reimbursement . During the ordinary course of business, the Manager or other affiliates of RAI may pay certain shared operating expenses on behalf of the Company. The Company is obligated to reimburse the Manager or other affiliates for such shared operating expenses. Relationship with Resource Securities Resource Securities, an affiliate of the Advisor, serves as the Company’s dealer manager and is responsible for marketing the Company’s shares during the public offering. Dealer manager fee and selling commissions. Pursuant to the terms of the amended and restated dealer manager agreement with Resource Securities, the Company generally pays Resource Securities a selling commission of up to 3.5% of gross offering proceeds from the sale of Class R shares and a dealer manager fee of up to 3.0% of gross offering proceeds from the sale of Class R shares (but the aggregate of such fees shall not exceed 5.5% of gross offering proceeds). The Company generally pays Resource Securities a dealer manager fee of up to 1.5% of gross offering proceeds from the sale of the Class I shares. Prior to July 3, 2017, the Company paid Resource Securities of selling commissions up to 7.0% of gross primary offering proceeds from the sale of Class A shares and up to 2.0% of gross primary offering proceeds from the sale of Class T shares and a dealer manager fee of up to 3.0% of gross primary offering proceeds from the sale of either Class A or Class T shares. Resource Securities allows all selling commissions earned and a portion of the dealer manager fee as a marketing fee to participating broker-dealers. No selling commissions or dealer manager fees are earned by Resource Securities in connection with sales under the distribution reinvestment plan. Additionally, the Company may reimburse Resource Securities for bona fide due diligence expenses. No selling commissions or dealer manager fees were paid in connection with the sales of Class A shares to the Advisor or RAI. Distribution and shareholder servicing fee . Resource Securities is paid an annual fee of 1.0% of the purchase price (or, once reported, the NAV) per share of Class T common stock sold in the primary offering for five years from the date on which each share is issued up to a total of 5.0% . Resource Securities is also paid an annual fee of 1.0% of the purchase price (or, once reported, the NAV) per share of Class R common stock sold in the primary offering. The Company will cease paying the distribution and shareholder servicing fee with respect to Class R shares held in any particular account, and those Class R shares will convert into a number of Class I shares determined by multiplying each Class R share to be converted by the applicable "Conversion Rate," on the earlier of (i) the date after the termination of the primary offering at which, in the aggregate, underwriting compensation from all sources equals 10.0% of the gross proceeds from the primary offering; (ii) a listing of the Class I shares on a national securities exchange; (iii) a merger or consolidation of the Company with or into another entity, or the sale or other disposition of all or substantially all of our assets; and (iv) the end of the month in which the total underwriting compensation (which consists of selling commissions, dealer manager fees and distribution and shareholder servicing fees) paid with respect to such Class R shares purchased in a primary offering is not less than 8.5% (or a lower limit, provided that, in the case of a lower limit, the agreement between Resource Securities and the broker-dealer in effect at the time Class R shares were first issued to such account sets forth the lower limit and Resource Securities advises the Company’s transfer agent of the lower limit in writing) of the gross offering price of those Class R shares purchased in such primary offering (excluding shares purchased through the distribution reinvestment plan). The differences between the Class A, Class T, Class R and Class I shares relate to the fees and selling commissions payable with respect to each class and the differing distribution amounts and expense allocations due to differing ongoing fees and expenses. The per share amount of distributions on Class T and Class R shares will likely be lower than the distributions on the Class A and Class I shares for so long as the distribution and shareholder servicing fee applies because this fee is a class-specific expense. The following table summarizes the differences in fees and selling commissions between the classes of common stock: Class A Share Class T Share Class R Share Class I Share Initial Offering Price $10.00 $9.47 $9.52 $9.13 Selling Commissions Paid by Company (per shares) 7.0% 2.0% 3.5% (1) None Dealer Manager Fee (per share) 3.0% 3.0% 3.0% (1) 1.5% Annual Distributions and Shareholder Servicing Fee None 1.0% (2) 1.0% (3) None Initial Offering Price Under the DRIP $9.60 $9.09 $9.14 $8.90 (1) The aggregate amount paid to Resource Securities for selling commissions and dealer manager fees shall not exceed 5.5% of gross offering proceeds. (2) Each outstanding Class T share issued in the primary offering is subject to an annual distribution and shareholder servicing fee for five years from the date on which such share is issued. The Company will cease paying the distribution and shareholder servicing fee on each Class T share prior to the fifth anniversary of its issuance on the earliest of the following, should any of these events occur: (i) the date at which, in the aggregate, underwriting compensation from all sources equals 10% of the gross proceeds from the Company's primary offering (i.e., excluding proceeds from sales pursuant to the DRIP); (ii) the date on which the Company lists its common stock on a national securities exchange; and (iii) the date of a merger or other extraordinary transaction in which the Company is a party and in which the common stock is exchanged for cash or other securities. The Company cannot predict if or when any of these events will occur. (3) The Company will cease paying the distribution and shareholder servicing fee with respect to Class R shares held in any particular account, and those Class R shares will convert into a number of Class I shares determined by multiplying each Class R share to be converted by the applicable "Conversion Rate," on the earlier of (i) the date after the termination of the primary offering at which, in the aggregate, underwriting compensation from all sources equals 10.0% of the gross proceeds from the primary offering; (ii) a listing of the Class I shares on a national securities exchange; (iii) a merger or consolidation of the Company with or into another entity, or the sale or other disposition of all or substantially all of our assets; and (iv) the end of the month in which the total underwriting compensation (which consists of selling commissions, dealer manager fees and distribution and shareholder servicing fees) paid with respect to such Class R shares purchased in a primary offering is not less than 8.5% (or a lower limit, provided that, in the case of a lower limit, the agreement between Resource Securities and the broker-dealer in effect at the time Class R shares were first issued to such account sets forth the lower limit and Resource Securities advises the Company’s transfer agent of the lower limit in writing) of the gross offering price of those Class R shares purchased in such primary offering (excluding shares purchased through the distribution reinvestment plan). The Company cannot predict if or when any of these events will occur. Relationship with RAI Self-insurance funds held in escrow. The receivable from related parties includes escrow funds held by RAI and C-III for self-insurance, which, if unused, will be returned to the Company. The Company's property participates in insurance pools with other properties directly and indirectly managed by RAI and C-III for both property insurance and general liability. RAI and C-III hold the deposits in escrow to fund future insurance claims. The insurance pool covers losses up to $2.5 million and the pool for the general liability covers losses up to the first $50,000 per incident. Catastrophic insurance would cover losses in excess of the insurance pool up to $250.0 million and $51.0 million , respectively. Therefore, unforeseen or catastrophic losses in excess of the Company's insured limits could have a material adverse effect on the Company's financial condition and operating results. During the three and six month ended June 30, 2017 , the Company paid $0 and $419 into the insurance pools. Internal audit fees. RAI performs internal audit services for the Company. The 2017 annual fee for the services provided is $12,500 . RAI co-guarantees the mortgage on Payne Place with the Company until such time as the Company achieves the following: (a) owns a minimum of five apartment complexes; (b) has a minimum net worth of $50.0 million ; (c) has liquidity of no less than $5.0 million ; and (d) has an aggregate portfolio leverage of no more than 65% ( see Note 7 for further details). The fees earned/expenses incurred and the amounts payable to such related parties are summarized in the following table: June 30, 2017 December 31, 2016 Due from related parties: Advisor $ 2,342 $ 1,041 RAI and affiliate - insurance funds held in escrow 1,298 1,311 $ 3,640 $ 2,352 Due to related parties: Advisor: Acquisition related reimbursements $ 1,079 $ 14,050 Asset management fees — 2 Organization and offering costs 4,706,053 2,848,317 Operating expense reimbursements (including prepaid expenses) 1,309,879 682,661 $ 6,017,011 $ 3,545,030 RAI: Internal Audit Fee $ 750 $ 8,250 Operating expense reimbursements 3,238 — $ 3,988 $ 8,250 Resource Securities: Selling commissions and dealer-manager fees $ — $ 10,363 Distribution and shareholder servicing fee 480,391 53,015 $ 480,391 $ 63,378 Other $ — $ 55 — $ 6,501,390 $ 3,616,713 Three Months Ended Six Months Ended 2017 2016 2017 2016 Fees earned / expenses incurred: Advisor Asset management fees (1) $ 6,730 $ — $ 13,457 $ — Organization and offering costs (2) $ 1,010,962 $ — $ 1,857,736 $ — Operating expense reimbursement (3) $ 162,526 $ 26,458 $ 314,205 $ 26,458 Resource Securities Selling commissions and dealer-manager fees (4) $ 403,514 $ — $ 636,033 $ — Distribution and shareholder servicing fee (4) $ 291,316 $ — $ 443,471 $ — (1) Included in Management fees on the consolidated statements of operations. (2) Included in Deferred offering costs and Stockholders' equity on the consolidated balance sheets. (3) Included in General and administrative on the consolidated statements of operations and excludes third party costs that are advanced by the Advisor. (4) Included in Stockholders' equity on the consolidated balance sheets. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE The following table presents a reconciliation of basic and diluted earnings per share for the periods presented as follows: Three Months Ended Six Months Ended 2017 2016 2017 2016 Net loss $ (331,254 ) $ (26,458 ) $ (648,997 ) $ (26,458 ) Less: Class A common stock cash distributions declared 30,709 — 38,400 — Less: Class T common stock cash distributions declared 22,858 — 26,250 — Undistributed net loss attributable to common stockholders $ (384,821 ) $ (26,458 ) $ (713,647 ) $ (26,458 ) Class A common stock: Undistributed net loss attributable to Class A common stockholders $ (171,529 ) $ (26,458 ) $ (361,947 ) $ (26,458 ) Class A common stock cash distributions declared 30,709 — 38,400 — Net loss attributable to Class A common stockholders $ (140,820 ) $ (26,458 ) $ (323,547 ) $ (26,458 ) Net loss per Class A common share, basic and diluted $ (0.25 ) $ (1.04 ) $ (0.65 ) $ (1.15 ) Weighted-average number of Class A common shares outstanding, basic and diluted 559,739 25,511 501,031 23,008 Class T common stock: Undistributed net loss attributable to Class T common stockholders $ (213,292 ) $ — $ (351,700 ) $ — Class T common stock cash distributions declared 22,858 — 26,250 — Net loss attributable to Class T common stockholders $ (190,434 ) $ — $ (325,450 ) $ — Net loss per Class T common share, basic and diluted $ (0.27 ) $ — $ (0.67 ) $ — Weighted-average number of Class T common shares outstanding, basic and diluted 696,020 — 486,845 — Diluted earnings per share take into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted to common stock. None of the 50,000 shares of convertible stock ( see Note 10 ) are included in the diluted earnings per share calculations because the necessary conditions for conversion have not been satisfied as of June 30, 2017 (were such date to represent the end of the contingency period). Due to reported losses for the three and six months ended June 30, 2017 , common shares potentially issuable to settle accrued distributions are excluded from the calculation of diluted earnings per share calculations, as their inclusion would be anti-dilutive. |
Equity
Equity | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Equity | EQUITY Preferred Stock The Company’s charter authorizes the Company to issue 10 million shares of its $0.01 par value preferred stock. At June 30, 2017 , no shares of preferred stock were issued or outstanding. Convertible Stock The Company’s charter authorizes the Company to issue 50,000 shares of its $0.01 par value convertible stock. On August 5, 2016 , the board of directors approved the issuance of 50,000 convertible shares in exchange of 5,000 shares of Class A common stock. At June 30, 2017 , the Company had 50,000 shares of $0.01 par value convertible stock outstanding, which are owned by the Advisor. The convertible stock will convert into shares of the Company’s Class A common stock upon the occurrence of (a) the Company having paid distributions to common stockholders that in the aggregate equal 100% of the price at which the Company originally sold the shares plus an amount sufficient to produce a 6% cumulative, non-compounded annual return on the shares at that price; or (b) if the Company lists its common stock on a national securities exchange or the Company consummates a merger pursuant to which consideration received by the stockholders is securities of another issuer that are listed on a national securities exchange. Each of these two events is a "Triggering Event." Upon a Triggering Event, the Company's convertible stock will, unless its advisory agreement has been terminated or not renewed on account of a material breach by its Advisor, generally be converted into a number of shares of common stock equal to 1/50,000 of the quotient of: (A) 15% of the amount, if any, by which (1) the value of the Company as of the date of the event triggering the conversion plus the total distributions paid to its stockholders through such date on the then-outstanding shares of its common stock exceeds (2) the sum of the aggregate issue price of those outstanding shares plus a 6% cumulative, non-compounded, annual return on the issue price of those outstanding shares as of the date of the event triggering the conversion, divided by (B) the value of the Company divided by the number of outstanding shares of common stock, in each case, as of the as of the date of the event triggering the conversion. Common Stock The Company’s charter authorizes the issuance of 1 billion shares of common stock with a par value of $0.01 per share, of which, the Company previously allocated 250 million shares of its $0.01 par value common stock as Class A common stock and 750 million shares of its $0.01 par value common stock as Class T common stock. As of June 30, 2017 , there were 616,086 shares of Class A common stock and 1,067,396 shares of Class T common stock issued and outstanding. On June 28, 2017 , the Company amended its charter to authorize 750 million shares of its $0.01 par value common stock as Class R common stock, 75 million shares of its $0.01 par value common stock as Class I common stock, 25 million shares of its $0.01 par value common stock as Class A common stock and 25 million shares of its $0.01 par value common stock as Class T common stock. As of July 3, 2017 , the Company ceased offering shares of Class A and Class T common stock in its primary offering. As of July 3, 2017 , the Company commenced the offering of Class R and Class I common stock in its public offering. Distributions Cash Distributions During the six months ended June 30, 2017 , the Company's board of directors declared a cash distribution on the outstanding shares of all classes of its common stock based on daily record dates for the period from March 31, 2017 through July 30, 2017 , which were paid on April 28, 2017 , May 31, 2017, June 30, 2017 and July 31, 2017 . The distributions declared for these periods were calculated based on stockholders of record each day during these periods at a rate of (i) $0.000547945 per share per day less (ii) the applicable daily distribution and shareholder servicing fees accrued for and allocable to any class of common stock. Distributions are generally paid to stockholders on the last business day of the month for which the distribution has accrued. Distributions reinvested pursuant to the distribution reinvestment plan are reinvested in shares of the same class as the shares on which distributions are made. The table below provides information regarding distributions declared and paid to stockholders during the three and six months ended June 30, 2017 : Three Months Ended June 30, 2017 Six Months Ended June 30, 2017 Class A Class T Total Class A Class T Total Distributions declared $ 30,709 $ 22,858 $ 53,567 $ 38,400 $ 26,250 $ 64,650 Distributions reinvested in shares of common stock paid $ 9,637 $ 11,577 $ 21,214 $ 16,087 $ 16,219 $ 32,306 Cash distributions paid 17,686 4,541 22,227 32,562 6,094 38,656 Total distributions paid $ 27,323 $ 16,118 $ 43,441 $ 48,649 $ 22,313 $ 70,962 At June 30, 2017 , the Company had accrued $ 18,862 for the cash distributions paid on July 31, 2017 , which is reported in distributions payable in the consolidated balance sheet. Stock Dividends On April 25, 2017 , the Company's board of directors authorized a stock dividend for the second quarter of 2017, in the amount of 0.01 shares of common stock on each outstanding share of common stock to all common stockholders of record as of the close of business on July 1, 2017 . Stock dividends are issued in the same class of shares as the shares for which such stockholder received the stock dividend. The Company issued this stock dividend on July 14, 2017 . In accordance with the accounting guidance for stock dividends, these shares were reflected as being issued in the consolidated balance sheets at June 30, 2017 . |
Fair Value Measures and Disclos
Fair Value Measures and Disclosures | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures | FAIR VALUE MEASURES AND DISCLOSURES In analyzing the fair value of its financial instruments accounted for on a fair value basis, the Company follows the fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company determines fair value based on quoted prices when available or, if quoted prices are not available, through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the investment. The fair value of cash, tenant receivables and accounts payable, approximate their carrying value due to their short nature. The hierarchy followed defines three levels of inputs that may be used to measure fair value: Level 1 - Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date. Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability. Level 3 - Unobservable inputs that reflect the entity’s own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques. The determination of where an asset or liability falls in the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each quarter; depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter. However, the Company expects that changes in classifications between levels will be rare. The fair value of rental properties is usually estimated based on information obtained from a number of sources, including information obtained about each property as a result of pre-acquisition due diligence, marketing and leasing activities. The Company allocates the purchase price of properties to acquired tangible assets, consisting of land, buildings, fixtures and improvements, and identified intangible lease assets and liabilities, consisting of the value of above-market and below-market leases, as applicable, the value of in-place leases and the value of tenant relationships, based in each case on their fair values. The carrying and fair values of the Company’s mortgage note payable, which was not carried at fair value on the consolidated balance sheets at June 30, 2017 and December 31, 2016 , were as follows (in thousands): June 30, 2017 December 31, 2016 Carrying Amount Fair Value Carrying Amount Fair Value Mortgage note payable $ 1,611,247 $ 1,415,677 $ 1,625,000 $ 1,625,000 The carrying amount of the mortgage notes payable presented is the outstanding borrowings excluding premium or discount and deferred finance costs, net. At June 30, 2017 , the fair value of mortgage note payable was estimated using a discounted cash flow model and rates available to the Company for debt with similar terms and remaining maturity. At December 31, 2016 , the carrying value of the mortgage note payable was estimated to be the fair value due to the recent issuance of the mortgage obtained (Level 3). |
Operating Expense Limitation
Operating Expense Limitation | 6 Months Ended |
Jun. 30, 2017 | |
Other Income and Expenses [Abstract] | |
Operating Expense Limitation | OPERATING EXPENSE LIMITATION Under its charter, commencing September 30, 2017, the Company must limit its total operating expenses to the greater of 2% of its average invested assets or 25% of its net income for the four most recently completed fiscal quarters, unless the conflicts committee of the Company’s board of directors has determined that such excess expenses were justified based on unusual and non-recurring factors. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS On July 27, 2017 , the Company's board of directors declared cash distributions on the outstanding shares of all classes of the Company's common stock based on daily record dates from July 31, 2017 through August 30, 2017 , from August 31, 2017 through September 28, 2017 and from September 29, 2017 through October 30, 2017 , which distributions the Company expects to pay on August 31, 2017 , September 29, 2017 and October 31, 2017 , respectively. Distributions for these periods have been or will be calculated based on stockholders of record each day during these periods at a rate of (i) $0.001434521 per share per day less (ii) the applicable daily distribution and shareholder servicing fees accrued for and allocable to any class of common stock divided by the number of shares of common stock of such class outstanding as of the close of business of each respective record date. On July 31, 2017 , the Company, through its wholly-owned subsidiary, purchased a multifamily community located in Jacksonville, Florida ("Bay Club"). Bay Club, constructed in 1990, contains 220 units and amenities, including private garages for each unit, a clubhouse, pool, fitness center and business center. The Bay Club property is currently 96% leased. In connection with the transaction, the Company made an earnest money deposit of $1.0 million , which is included in prepaid expenses and other assets on the consolidated balance sheet at June 30, 2017 . Bay Club was acquired for a purchase price of $28.3 million , excluding closing costs. The Company funded the purchase with a combination of offering proceeds and proceeds from a seven -year, $21.5 million secured mortgage loan with CBRE Capital Markets, Inc., an unaffiliated lender, secured by Bay Club (the "Bay Club Mortgage Loan"). The Bay Club Mortgage Loan matures on July 31, 2024. The Bay Club Mortgage Loan bears interest at a rate of LIBOR plus 1.87% , with a maximum interest rate of 5.75% . Monthly payments are interest only for the first 24 months . Beginning on August 1, 2019, the Company will pay both principal and interest based on 30 year amortization. Any remaining principal balance and all accrued and unpaid interest and fees will be due at maturity. The Company may prepay the Bay Club Mortgage Loan in full at any time (1) after July 31, 2019 and until April 30, 2024 upon payment of a prepayment premium equal to 1% of the principal amount prepaid; and (2) after April 30, 2024 with no prepayment premium. The non-recourse carveouts under the loan documents for the Bay Club Mortgage Loan are guaranteed by the Company. The Company has evaluated subsequent events through the filing of these financial statements and determined no events have occurred, other than those discussed above that would require adjustments to or additional disclosure in the consolidated financial statements. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with GAAP. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries as follows: Subsidiaries Resource Apartment REIT III Holdings, LLC Resource Apartment REIT III OP, LP RRE Payne Place Holdings, LLC RRE Bay Club Holdings, LLC All intercompany accounts have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates |
Real Estate Investments | Real Estate Investments The Company records acquired real estate at fair value on its acquisition date. The Company considers the period of future benefit of an asset to determine its appropriate useful life. The Company's estimated useful lives of its assets by class are as follows: Buildings 27.5 years Building improvements 3.0 to 27.5 years Tenant improvements Shorter of lease term or expected useful life Lease intangibles Weighted average remaining term of related lease |
Impairment of Long Lived Assets | Impairment of Long Lived Assets When circumstances indicate the carrying value of a property may not be recoverable, the Company will review the asset for impairment. This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition. These estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors. If impairment exists, due to the inability to recover the carrying value of a property, an impairment loss will be recorded to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held and used. For properties held for sale, the impairment loss is the adjustment to fair value less estimated cost to dispose of the asset. These assessments have a direct impact on net income because recording an impairment loss results in an immediate negative adjustment to net income. There were no impairment losses recorded on long lived assets during the three and six months ended June 30, 2017 and 2016 . |
Loans Held for Investment | Loans Held for Investment The real estate loans receivable will be recorded at cost and reviewed for potential impairment at each balance sheet date. A loan receivable is considered impaired when it becomes probable, based on current information, that the Company will be unable to collect all amounts due according to the loan’s contractual terms. The amount of impairment, if any, is measured by comparing the recorded amount of the loan to the present value of the expected cash flows or the fair value of the collateral. If a loan is deemed to be impaired, the Company will record a reserve for loan losses through a charge to income for any shortfall. Failure to recognize impairment would result in the overstatement of the carrying values of the Company’s real estate loans receivable and an overstatement of the Company’s net income. The Company may acquire real estate loans at a discount due to credit quality. Revenues from these loans are recorded under the effective interest method. Under this method an effective interest rate ("EIR") is applied to the cost basis of the real estate loan receivable. The EIR that is calculated when the real estate loan receivable is acquired remains constant and is the basis for subsequent impairment testing and income recognition. If the amount and timing of future cash collections are not reasonably estimable, the Company accounts for the real estate receivable on the cost recovery method. Under the cost recovery method of accounting, no income is recognized until the basis of the real estate loan receivable has been fully recovered. Interest income from loans receivable will be recognized based on the contractual terms of the debt instrument. Fees related to any buydown of the interest rate will be deferred as prepaid interest income and amortized over the term of the loan as an adjustment to interest income. Closing costs related to the purchase of a loan receivable will be amortized over the term of the loan and accreted as an adjustment against interest income. |
Allocation of Purchase Price of Acquired Assets | Allocation of Purchase Price of Acquired Assets Upon the acquisition of real properties, it is the Company’s policy to allocate the purchase price of properties to acquired tangible assets, consisting of land, building, fixtures and improvements, and identified intangible lease assets and liabilities, consisting of the value of above-market and below-market leases, as applicable, other value of in-place leases and value of tenant relationships, based in each case on their fair values. The Company records above-market and below-market in-place lease values for acquired properties based on the present value (using an interest rate that reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of the lease. The Company amortizes any capitalized above-market or below-market lease values as an increase or reduction to rental income over the remaining non-cancelable terms of the respective leases, which the Company expects will range from one month to one year . The Company measures the aggregate value of other intangible assets acquired based on the difference between (i) the property valued with existing in-place leases adjusted to market rental rates and (ii) the property valued as if vacant. Management’s estimates of value are expected to be made using methods similar to those used by independent appraisers (e.g., discounted cash flow analysis). Factors to be considered by management in its analysis include an estimate of carrying costs during hypothetical expected lease-up periods considering current market conditions and costs to execute similar leases. The Company also considers information obtained about each property as a result of its pre-acquisition due diligence, marketing and leasing activities in estimating the fair value of the tangible and intangible assets acquired. In estimating carrying costs, management also includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods. Management also estimates costs to execute similar leases including leasing commissions and legal and other related expenses to the extent that such costs have not already been incurred in connection with a new lease origination as part of the transaction. The total amount of other intangible assets acquired is further allocated to in-place lease values and customer relationship intangible values based on management’s evaluation of the specific characteristics of each tenant’s lease and the Company’s overall relationship with that respective tenant. Characteristics to be considered by management in allocating these values include the nature and extent of the Company’s existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality and expectations of lease renewals (including those existing under the terms of the lease agreement), among other factors. The Company amortizes the value of in-place leases to expense over the initial term of the respective leases. The value of customer relationship intangibles is amortized to expense over the initial term and any renewal periods in the respective leases, but in no event will the amortization periods for the intangible assets exceed the remaining depreciable life of the building. Should a tenant terminate its lease, the unamortized portion of the in-place lease value and customer relationship intangibles would be charged to expense in that period. The determination of the fair value of the assets and liabilities acquired requires the use of significant assumptions with regard to current market rental rates, discount rates and other variables. The use of inappropriate estimates would result in an incorrect assessment of the fair value of these assets and liabilities, which could impact the amount of the Company’s reported net income. These estimates are subject to change until all information is finalized, which is generally within one year of the acquisition date. |
Revenue Recognition | Revenue Recognition The Company recognizes minimum rent, including rental abatements and contractual fixed increases attributable to operating leases, on a straight-line basis over the term of the related lease and includes amounts expected to be received in later years in deferred rents. The Company records property operating expense reimbursements due from tenants for common area maintenance, real estate taxes and other recoverable costs in the period the related expenses are incurred. |
Tenant Receivables | Tenant Receivables Tenant receivables are stated in the consolidated financial statements as amounts due from tenants net of an allowance for uncollectible receivables. Payment terms vary and receivables outstanding longer than the payment terms are considered past due. The Company determines its allowance by considering a number of factors, including the length of time receivables are past due, security deposits held, the Company’s previous loss history, the tenants’ current ability to pay their obligations to the Company, the condition of the general economy and the industry as a whole. The Company writes off receivables when they become uncollectible. At June 30, 2017 and December 31, 2016 , there were no allowances for uncollectible receivables. |
Income Taxes | Income Taxes The Company intends to elect and qualify to be taxed as a REIT, commencing with its taxable year ending December 31, 2017. Accordingly, once qualified as a REIT, the Company will generally not be subject to corporate U.S. federal or state income tax to the extent that it makes qualifying distributions to its stockholders, and provided it satisfies on a continuing basis, through actual investment and operating results, the REIT requirements including certain asset, income, distribution and stock ownership tests. If the Company fails to qualify as a REIT, and does not qualify for certain statutory relief provisions, it will be subject to U.S. federal, state and local income taxes and may be precluded from qualifying as a REIT for the subsequent four taxable years following the year in which it lost its REIT qualification. Accordingly, the Company’s failure to qualify as a REIT could have a material adverse impact on its results of operations and amounts available for distribution to its stockholders. The dividends paid deduction of a REIT for qualifying dividends to its stockholders is computed using the Company’s taxable income as opposed to net income reported on the financial statements. Taxable income, generally, will differ from net income reported on the financial statements because the determination of taxable income is based on tax provisions and not financial accounting principles. The Company may elect to treat certain of its subsidiaries as taxable REIT subsidiaries ("TRSs"). In general, a TRS may hold assets and engage in activities that it cannot hold or engage in directly and generally may engage in any real estate or non-real estate-related business. A TRS is subject to U.S. federal, state and local corporate income taxes. While a TRS may generate net income, a TRS can declare dividends to the Company which will be included in the Company’s taxable income and necessitate a distribution to its stockholders. Conversely, if the Company retains earnings at a TRS level, no distribution is required and the Company can increase book equity of the consolidated entity. |
Earnings Per Share | Earnings Per Share Basic earnings per share are computed by dividing net income (loss) attributable to common stockholders for each period by the weighted-average common shares outstanding during the period for each share class. Diluted net income (loss) per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted to common stock. For the purposes of calculating earnings per share, all common shares and per share information in the financial statements have been retroactively adjusted for the effect of any stock dividends and stock splits. In accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") No. 260-10-45, "Earnings Per Share", the Company uses the two-class method to calculate earnings per share. Basic earnings per share is calculated based on dividends declared and the rights of common shares and participating securities in any undistributed earnings, which represents net income remaining after deduction of dividends declared during the period. The undistributed earnings are allocated to all outstanding common shares based on their relative percentage of each class of shares to the total number of outstanding shares. The Company did not have any participating securities outstanding other than Class A common stock and Class T common stock during the periods presented ( see Note 9 ). |
Organization and Offering Costs | Organization and Offering Costs The Company incurs organization and offering costs in pursuit of its financing. Organization and offering costs (other than selling commissions and dealer manager fees) of the Company are initially being paid by the Advisor on behalf of the Company. Pursuant to the advisory agreement between the Company and the Advisor, the Company is obligated to reimburse the Advisor for organization and other offering costs paid by the Advisor on behalf of the Company, up to an amount equal to 4.0% of gross offering proceeds as of the termination of the initial public offering if the Company raises less than $500 million in the primary portion of the initial public offering and 2.5% of gross offering proceeds as of the termination of the initial public offering if the Company raises $500 million or more in the primary portion of the initial public offering. Through June 30, 2017 , the Company has charged approximately $360,624 to equity for the payment of offering costs consisting of accounting, advertising, allocated payroll, due diligence, marketing, legal, printing and similar costs. At June 30, 2017 , the Advisor has advanced approximately $4.7 million of these costs on behalf of the Company, of which $4.3 million have been deferred at June 30, 2017 . A portion of deferred offering costs will be charged to equity upon the sale of each share of common stock sold under the public offering. Such deferred costs will only become a liability of the Advisor to the extent that organization and offering costs incurred by us exceed 4% of the gross proceeds of the initial public offering. However, if the Company raises the maximum offering amount in the primary offering, organization and offering expenses (excluding selling commissions, the dealer manager fee and the distribution and stockholder servicing fee) are estimated to be approximately 1.0% of the gross proceeds of the initial public offering. When recorded by the Company, organization costs are expensed as incurred, which include all expenses incurred by the Company in connection with its formation, including but not limited to legal fees and other costs to incorporate. There can be no assurance that the Company's plans to raise capital will be successful. Prior to the Company breaking escrow, the Advisor incurred approximately $104,266 of formation and other operating expenses on the Company's behalf, which will not be reimbursed to the Advisor. Outstanding Class T shares issued in the Company's primary offering are subject to a 1% annual distribution and shareholder servicing fee for five years from the date on which such share is issued. The Company will cease paying the distribution and shareholder servicing fee on each Class T share prior to the fifth anniversary of its issuance on the earliest of the following, should any of these events occur: (i) the date at which, in the aggregate, underwriting compensation from all sources equals 10% of the gross proceeds from the Company's primary offering (i.e., excluding proceeds from sales pursuant to the DRIP); (ii) the date on which the Company lists its common stock on a national securities exchange; and (iii) the date of a merger or other extraordinary transaction in which the Company is a party and in which the common stock is exchanged for cash or other securities. The Company cannot predict if or when any of these events will occur. Outstanding Class R shares issued in the Company's primary offering are also subject to a 1% annual distribution and shareholder servicing fee. The Company will cease paying the distribution and shareholder servicing fee with respect to Class R shares held in any particular account, and those Class R shares will convert into a number of Class I shares determined by multiplying each Class R share to be converted by the applicable "Conversion Rate," on the earlier of (i) the date after the termination of the primary offering at which, in the aggregate, underwriting compensation from all sources equals 10% of the gross proceeds from its primary offering; (ii) a listing of the Class I shares on a national securities exchange; (iii) a merger or consolidation of the company with or into another entity, or the sale or other disposition of all or substantially all of its assets; and (iv) the end of the month in which the total underwriting compensation (which consists of selling commissions, dealer manager fees and distribution and shareholder servicing fees) paid with respect to such Class R shares purchased in a primary offering is not less than 8.5% (or a lower limit, provided that, in the case of a lower limit, the agreement between the Resource Securities and the broker-dealer in effect at the time Class R shares were first issued to such account sets forth the lower limit and Resource Securities advises the Company's transfer agent of the lower limit in writing) of the gross offering price of those Class R shares purchased in such primary offering (excluding shares purchased through its distribution reinvestment plan). The Company records distribution and shareholder servicing fees as a reduction to additional paid-in capital and the related liability in an amount equal to the maximum fees payable in relation to the Class T and Class R shares on the date the shares are issued. The liability will be relieved over time, as the fees are paid to the Dealer Manager, or adjusted if the fees are no longer payable pursuant to the conditions described above. For issued Class T shares, the Company has accrued an estimate of the total distribution and shareholder servicing fee of $497,173 for the full five year period at June 30, 2017 based on a total of 5% of the gross proceeds from all Class T shares sold, of which, the Company paid $16,782 cumulatively through June 30, 2017 . There were no Class R shares issued and outstanding as of June 30, 2017 . |
Adoption of New Accounting Standards | Adoption of New Accounting Standards Accounting Standards Issued But Not Yet Effective In May 2014, FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers", which will replace most existing revenue recognition guidance in GAAP. The core principle of ASU No. 2014-09 is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. ASU No. 2014-09 requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. ASU No. 2014-09 will be effective for the Company beginning January 1, 2018, including interim periods in 2018, and allows for both retrospective and prospective methods of adoption. In accordance with the Company’s plan for the adoption of ASU 2014-09, the Company has identified revenue streams and is performing an in-depth review to identify the related performance obligations and to evaluate the impact on the Company’s consolidated financial statements and internal accounting processes and controls. As the majority of the Company’s revenue is derived from lease contracts, the Company does not expect that the adoption of ASU 2014-09 or related amendments and modifications issued by the FASB will have a material impact on its consolidated financial statements. In February 2016, FASB issued ASU No. 2016-02, "Leases", which is intended to improve financial reporting about leasing transactions and requires organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. ASU No. 2016-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is continuing to evaluate this guidance; however, it does not expect the adoption of ASU No. 2016-02 to have a significant impact on its consolidated financial statements. In June 2016, FASB issued ASU No. 2016-03 "Financial Instruments - Credit Losses", which requires measurement and recognition of expected credit losses for financial assets held. The standard update is effective for the Company beginning January 1, 2019. The Company is continuing to evaluate this guidance; however, it does not expect the adoption of ASU No. 2016-03 to have a significant impact on its consolidated financial statements. In August 2016, FASB issued ASU No. 2016-15 "Classification of Certain Cash Receipts and Cash Payments", which addresses eight specific cash flow issues with the objective of reducing existing diversity in practice. The guidance is effective for the Company as of January 1, 2018. Early application is permitted. The adoption of the new requirements is not expected to have a material impact on the Company's consolidated statement of cash flows. In November 2016, FASB issued ASU No. 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash," which provides guidance on the classification of restricted cash in the statement of cash flows. ASU No. 2016-18 is effective for the Company's fiscal year beginning January 1, 2018 and the Company does not expect the adoption of ASU No. 2016-18 to have a material effect on its consolidated financial statements and disclosures. In January 2017, FASB issued ASU No. 2017-01, "Business Combinations (Topic 850): Clarifying the Definition of Business," which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of businesses. ASU No. 2017-01 is effective for the Company beginning January 1, 2018 but early adoption is allowed. The Company is currently evaluating the impact the adoption of ASU No. 2017-01 may have on its consolidated financial statements. |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Estimated Useful Life of Assets | The Company's estimated useful lives of its assets by class are as follows: Buildings 27.5 years Building improvements 3.0 to 27.5 years Tenant improvements Shorter of lease term or expected useful life Lease intangibles Weighted average remaining term of related lease |
Supplemental Cash Flow Inform22
Supplemental Cash Flow Information (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Supplemental Cash Flow Information | The following table presents supplemental cash flow information: Six Months Ended June 30, 2017 2016 Non-cash operating, financing and investing activities: Offering costs payable $ 1,796,886 $ 1,514,089 Cash distributions on common stock declared but not yet paid 18,862 — Stock issued from distribution reinvestment plan 32,306 — Stock dividend issued 251,567 — Subscription of common stock — 2,000,000 Cash paid during the year for: Interest $ 20,986 $ — |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Business Combinations [Abstract] | |
Summary of Acquisitions and Fair Value Assigned | The table below summarized the acquisition and the respective fair value assigned: Multifamily Community Name City and State Date of Acquisition Contractual Purchase Price (1) Land Building and Improvements Furniture, Fixtures and Equipment Intangible Assets Other Liabilities Fair Value Assigned Payne Place Alexandria, Virginia 8/19/2016 $ 2,500,000 $ 1,419,898 $ 1,016,451 $ 13,710 $ 49,941 $ (6,327 ) $ 2,493,673 (1) Contractual purchase price excludes closing costs, acquisition expenses, and other immaterial settlement date adjustments and pro-rations. |
Rental Properties, Net (Tables)
Rental Properties, Net (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Real Estate [Abstract] | |
Summary of Investment in Rental Property | The following table presents the Company's investment in rental properties: June 30, 2017 December 31, 2016 Land $ 1,419,898 $ 1,419,898 Building and improvements 1,021,675 1,018,051 Furniture, fixtures and equipment 24,812 21,317 Construction in progress 4,365 — 2,470,750 2,459,266 Less: accumulated depreciation (34,259 ) (13,431 ) Total rental property, net $ 2,436,491 $ 2,445,835 |
Mortgage Notes Payable (Tables)
Mortgage Notes Payable (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The following is a summary of the Company's mortgage note payable as of June 30, 2017 and December 31, 2016 : Outstanding Borrowings Deferred Financing Costs, net Carrying Value Outstanding borrowings Deferred Financing Costs, net Carrying Value Average Average Collateral June 30, 2017 December 31, 2016 Payne Place $ 1,611,247 $ (33,348 ) $ 1,577,899 $ 1,625,000 $ (34,166 ) $ 1,590,834 $ 6,948 $ 1,933 |
Schedule of Maturities of Long-term Debt | Annual principal payments on the mortgage note payable for each of the next five 12-month periods ending June 30, and thereafter, are as follows: 2018 $ 33,743 2019 34,807 2020 35,905 2021 37,038 2022 38,206 Thereafter 1,431,548 $ 1,611,247 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure | Estimated amortization of the existing deferred financing costs for the next five 12-month periods ending June 30, are as follows: 2018 $ 1,935 2019 1,894 2020 1,851 2021 1,807 2022 1,761 Thereafter 24,100 $ 33,348 |
Certain Relationships and Rel26
Certain Relationships and Related Party Transactions (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | Class A Share Class T Share Class R Share Class I Share Initial Offering Price $10.00 $9.47 $9.52 $9.13 Selling Commissions Paid by Company (per shares) 7.0% 2.0% 3.5% (1) None Dealer Manager Fee (per share) 3.0% 3.0% 3.0% (1) 1.5% Annual Distributions and Shareholder Servicing Fee None 1.0% (2) 1.0% (3) None Initial Offering Price Under the DRIP $9.60 $9.09 $9.14 $8.90 (1) The aggregate amount paid to Resource Securities for selling commissions and dealer manager fees shall not exceed 5.5% of gross offering proceeds. (2) Each outstanding Class T share issued in the primary offering is subject to an annual distribution and shareholder servicing fee for five years from the date on which such share is issued. The Company will cease paying the distribution and shareholder servicing fee on each Class T share prior to the fifth anniversary of its issuance on the earliest of the following, should any of these events occur: (i) the date at which, in the aggregate, underwriting compensation from all sources equals 10% of the gross proceeds from the Company's primary offering (i.e., excluding proceeds from sales pursuant to the DRIP); (ii) the date on which the Company lists its common stock on a national securities exchange; and (iii) the date of a merger or other extraordinary transaction in which the Company is a party and in which the common stock is exchanged for cash or other securities. The Company cannot predict if or when any of these events will occur. (3) The Company will cease paying the distribution and shareholder servicing fee with respect to Class R shares held in any particular account, and those Class R shares will convert into a number of Class I shares determined by multiplying each Class R share to be converted by the applicable "Conversion Rate," on the earlier of (i) the date after the termination of the primary offering at which, in the aggregate, underwriting compensation from all sources equals 10.0% of the gross proceeds from the primary offering; (ii) a listing of the Class I shares on a national securities exchange; (iii) a merger or consolidation of the Company with or into another entity, or the sale or other disposition of all or substantially all of our assets; and (iv) the end of the month in which the total underwriting compensation (which consists of selling commissions, dealer manager fees and distribution and shareholder servicing fees) paid with respect to such Class R shares purchased in a primary offering is not less than 8.5% (or a lower limit, provided that, in the case of a lower limit, the agreement between Resource Securities and the broker-dealer in effect at the time Class R shares were first issued to such account sets forth the lower limit and Resource Securities advises the Company’s transfer agent of the lower limit in writing) of the gross offering price of those Class R shares purchased in such primary offering (excluding shares purchased through the distribution reinvestment plan). The Company cannot predict if or when any of these events will occur. The fees earned/expenses incurred and the amounts payable to such related parties are summarized in the following table: June 30, 2017 December 31, 2016 Due from related parties: Advisor $ 2,342 $ 1,041 RAI and affiliate - insurance funds held in escrow 1,298 1,311 $ 3,640 $ 2,352 Due to related parties: Advisor: Acquisition related reimbursements $ 1,079 $ 14,050 Asset management fees — 2 Organization and offering costs 4,706,053 2,848,317 Operating expense reimbursements (including prepaid expenses) 1,309,879 682,661 $ 6,017,011 $ 3,545,030 RAI: Internal Audit Fee $ 750 $ 8,250 Operating expense reimbursements 3,238 — $ 3,988 $ 8,250 Resource Securities: Selling commissions and dealer-manager fees $ — $ 10,363 Distribution and shareholder servicing fee 480,391 53,015 $ 480,391 $ 63,378 Other $ — $ 55 — $ 6,501,390 $ 3,616,713 Three Months Ended Six Months Ended 2017 2016 2017 2016 Fees earned / expenses incurred: Advisor Asset management fees (1) $ 6,730 $ — $ 13,457 $ — Organization and offering costs (2) $ 1,010,962 $ — $ 1,857,736 $ — Operating expense reimbursement (3) $ 162,526 $ 26,458 $ 314,205 $ 26,458 Resource Securities Selling commissions and dealer-manager fees (4) $ 403,514 $ — $ 636,033 $ — Distribution and shareholder servicing fee (4) $ 291,316 $ — $ 443,471 $ — (1) Included in Management fees on the consolidated statements of operations. (2) Included in Deferred offering costs and Stockholders' equity on the consolidated balance sheets. (3) Included in General and administrative on the consolidated statements of operations and excludes third party costs that are advanced by the Advisor. (4) Included in Stockholders' equity on the consolidated balance sheets. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table presents a reconciliation of basic and diluted earnings per share for the periods presented as follows: Three Months Ended Six Months Ended 2017 2016 2017 2016 Net loss $ (331,254 ) $ (26,458 ) $ (648,997 ) $ (26,458 ) Less: Class A common stock cash distributions declared 30,709 — 38,400 — Less: Class T common stock cash distributions declared 22,858 — 26,250 — Undistributed net loss attributable to common stockholders $ (384,821 ) $ (26,458 ) $ (713,647 ) $ (26,458 ) Class A common stock: Undistributed net loss attributable to Class A common stockholders $ (171,529 ) $ (26,458 ) $ (361,947 ) $ (26,458 ) Class A common stock cash distributions declared 30,709 — 38,400 — Net loss attributable to Class A common stockholders $ (140,820 ) $ (26,458 ) $ (323,547 ) $ (26,458 ) Net loss per Class A common share, basic and diluted $ (0.25 ) $ (1.04 ) $ (0.65 ) $ (1.15 ) Weighted-average number of Class A common shares outstanding, basic and diluted 559,739 25,511 501,031 23,008 Class T common stock: Undistributed net loss attributable to Class T common stockholders $ (213,292 ) $ — $ (351,700 ) $ — Class T common stock cash distributions declared 22,858 — 26,250 — Net loss attributable to Class T common stockholders $ (190,434 ) $ — $ (325,450 ) $ — Net loss per Class T common share, basic and diluted $ (0.27 ) $ — $ (0.67 ) $ — Weighted-average number of Class T common shares outstanding, basic and diluted 696,020 — 486,845 — |
Equity Equity (Tables)
Equity Equity (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Dividends Declared | The table below provides information regarding distributions declared and paid to stockholders during the three and six months ended June 30, 2017 : Three Months Ended June 30, 2017 Six Months Ended June 30, 2017 Class A Class T Total Class A Class T Total Distributions declared $ 30,709 $ 22,858 $ 53,567 $ 38,400 $ 26,250 $ 64,650 Distributions reinvested in shares of common stock paid $ 9,637 $ 11,577 $ 21,214 $ 16,087 $ 16,219 $ 32,306 Cash distributions paid 17,686 4,541 22,227 32,562 6,094 38,656 Total distributions paid $ 27,323 $ 16,118 $ 43,441 $ 48,649 $ 22,313 $ 70,962 |
Fair Value Measures and Discl29
Fair Value Measures and Disclosures (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value, by Balance Sheet Grouping | The carrying and fair values of the Company’s mortgage note payable, which was not carried at fair value on the consolidated balance sheets at June 30, 2017 and December 31, 2016 , were as follows (in thousands): June 30, 2017 December 31, 2016 Carrying Amount Fair Value Carrying Amount Fair Value Mortgage note payable $ 1,611,247 $ 1,415,677 $ 1,625,000 $ 1,625,000 |
Nature of Business and Operat30
Nature of Business and Operations (Details) | Aug. 05, 2016shares | Jun. 29, 2016USD ($)shares | Aug. 10, 2015USD ($)shares | Jun. 30, 2017USD ($)property$ / sharesshares | Jul. 31, 2017unit | Jul. 03, 2017$ / shares | Dec. 31, 2016property | Jun. 30, 2016USD ($) |
Class of Stock [Line Items] | ||||||||
Value of shares of common stock offered | $ 1,100,000,000 | |||||||
Percentage of the new primary offering price | 96.00% | |||||||
Consideration received on to date | $ 15,700,000 | |||||||
Issuance of common stock | 11,035,315 | |||||||
Gross offering proceeds threshold for commencement of operations | $ 2,000,000 | |||||||
Subscription of common stock | $ 0 | $ 2,000,000 | ||||||
Number of properties owned | property | 1 | |||||||
Alexandria, Virginia | ||||||||
Class of Stock [Line Items] | ||||||||
Number of properties owned | property | 1 | 1 | ||||||
Advisor | ||||||||
Class of Stock [Line Items] | ||||||||
Issuance of common stock | $ 200,000 | |||||||
Issuance of stock (in shares) | shares | 20,000 | |||||||
Common stock exchanged (in shares) | shares | 5,000 | |||||||
Class A common stock | ||||||||
Class of Stock [Line Items] | ||||||||
Number of shares issued in transaction to date | shares | 601,206.55 | |||||||
Issuance of stock (in shares) | shares | 616,086.02 | |||||||
Class A common stock | Resource America, Inc. | ||||||||
Class of Stock [Line Items] | ||||||||
Issuance of common stock | $ 2,000,000 | |||||||
Issuance of stock (in shares) | shares | 222,222 | |||||||
Class A common stock | PENNSYLVANIA | ||||||||
Class of Stock [Line Items] | ||||||||
Subscription of common stock | $ 50,000,000 | |||||||
Class A common stock | WASHINGTON | ||||||||
Class of Stock [Line Items] | ||||||||
Subscription of common stock | $ 20,000,000 | |||||||
Class T common stock | ||||||||
Class of Stock [Line Items] | ||||||||
Number of shares issued in transaction to date | shares | 1,049,996.30 | |||||||
Issuance of stock (in shares) | shares | 1,067,395.79 | |||||||
Convertible Common Stock | Advisor | ||||||||
Class of Stock [Line Items] | ||||||||
Issuance of stock (in shares) | shares | 50,000 | |||||||
Initial public offering | ||||||||
Class of Stock [Line Items] | ||||||||
Value of shares of common stock offered | $ 1,000,000,000 | |||||||
Initial public offering | Class A common stock | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, initial offering price (in dollars per share) | $ / shares | $ 10 | |||||||
Initial public offering | Class T common stock | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, initial offering price (in dollars per share) | $ / shares | 9.47 | |||||||
Initial public offering | Class R Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, initial offering price (in dollars per share) | $ / shares | 9.52 | |||||||
Initial public offering | Class I Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, initial offering price (in dollars per share) | $ / shares | $ 9.13 | |||||||
Distribution reinvestment plan | ||||||||
Class of Stock [Line Items] | ||||||||
Value of shares of common stock offered | $ 100,000,000 | |||||||
Distribution reinvestment plan | Class A common stock | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, initial offering price (in dollars per share) | $ / shares | $ 9.60 | |||||||
Distribution reinvestment plan | Class T common stock | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, initial offering price (in dollars per share) | $ / shares | 9.09 | |||||||
Distribution reinvestment plan | Class R Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, initial offering price (in dollars per share) | $ / shares | 9.14 | |||||||
Distribution reinvestment plan | Class I Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, initial offering price (in dollars per share) | $ / shares | $ 8.90 | |||||||
Subsequent event | Initial public offering | Class R Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, initial offering price (in dollars per share) | $ / shares | $ 9.52 | |||||||
Subsequent event | Initial public offering | Class I Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock, initial offering price (in dollars per share) | $ / shares | $ 9.13 | |||||||
Bay Club | Subsequent event | ||||||||
Class of Stock [Line Items] | ||||||||
Number of units in real estate property | unit | 220 |
Summary of Significant Accoun31
Summary of Significant Accounting Policies (Details) - USD ($) | Jun. 30, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||||||
Impairment of long-lived assets | $ 0 | $ 0 | $ 0 | $ 0 | ||
Allowance for uncollectible receivables | $ 0 | 0 | 0 | $ 0 | ||
Deferred offering costs | 360,624 | 1,328,398 | ||||
Advisor | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Cumulative advances from related party | 4,700,000 | 4,700,000 | 4,700,000 | |||
Advisor | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Cumulative advances from related party | $ 4,700,000 | $ 4,700,000 | 4,700,000 | |||
Deferred cash or noncash | 4,300,000 | |||||
Formation and other operating expenses | $ 104,266 | $ 104,266 | ||||
Advisor | Initial public offering | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Approximate reimbursement of organization and offering expenses to be reimbursed, option one | 4.00% | |||||
Offering proceeds, threshold, option one (less than) | $ 500,000,000 | |||||
Approximate reimbursement of organization and offering expenses to be reimbursed, option two | 2.50% | |||||
Offering proceeds, threshold, option two (more than) | $ 500,000,000 | |||||
Advisor | Initial public offering and DRIP | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Approximate reimbursement of organization and offering expenses to be reimbursed, option two | 1.00% | |||||
Minimum | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Remaining term of lease | 1 month | |||||
Maximum | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Remaining term of lease | 1 year | |||||
Buildings | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Real estate investments, useful life | 27 years 6 months | |||||
Building improvements | Minimum | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Real estate investments, useful life | 3 years | |||||
Building improvements | Maximum | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Real estate investments, useful life | 27 years 6 months | |||||
Class T common stock | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Annual fee, percentage of purchase price of common stock sold | 1.00% | |||||
Annual distribution and shareholder servicing fee, term | 5 years | |||||
Triggering event to cease payment, percentage of gross proceeds | 10.00% | 10.00% | 10.00% | |||
Common stock, shares issued (in shares) | 1,067,396 | 1,067,396 | 1,067,396 | 114,037 | ||
Common stock, shares outstanding (in shares) | 1,067,396 | 1,067,396 | 1,067,396 | 114,037 | ||
Class T common stock | Resource Securities | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Annual fee, percentage of purchase price of common stock sold | 1.00% | |||||
Class R Common Stock | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Annual fee, percentage of purchase price of common stock sold | 1.00% | |||||
Triggering event to cease payment, percentage of gross proceeds | 10.00% | 10.00% | 10.00% | |||
Underwriting compensation as percentage of Class R gross offering price (as a percentage) | 8.50% | |||||
Common stock, shares issued (in shares) | 0 | 0 | 0 | 0 | ||
Common stock, shares outstanding (in shares) | 0 | 0 | 0 | 0 | ||
Class R Common Stock | Resource Securities | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Annual fee, percentage of purchase price of common stock sold | 1.00% | |||||
Triggering event to cease payment, percentage of gross proceeds | 10.00% | 10.00% | 10.00% | |||
Underwriting compensation as percentage of Class R gross offering price (as a percentage) | 8.50% | |||||
Distribution and shareholder servicing fee | Resource Securities | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Accrued estimate of distribution and shareholder servicing fee | $ 291,316 | $ 0 | $ 443,471 | $ 0 | ||
Distribution and shareholder servicing fee | Class T common stock | Resource Securities | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Accrued estimate of distribution and shareholder servicing fee | $ 497,173 | |||||
Percentage of shares sold | 5.00% | |||||
Payment of distribution and shareholder service fee | $ 16,782 |
Supplemental Cash Flow Inform32
Supplemental Cash Flow Information (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Non-cash operating, financing and investing activities: | |||
Offering costs payable | $ (1,796,886) | $ (1,514,089) | |
Cash distributions on common stock declared but not yet paid | 18,862 | 0 | $ 25,174 |
Stock issued from distribution reinvestment plan | 32,306 | 0 | |
Stock dividend issued | 251,567 | 0 | |
Subscription of common stock | 0 | 2,000,000 | |
Interest | $ 20,986 | $ 0 |
Acquisitions - Summary and Narr
Acquisitions - Summary and Narrative (Details) | Aug. 19, 2016USD ($)ft²property | Jun. 30, 2017USD ($)property | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($)property | Jun. 30, 2016USD ($) | Dec. 31, 2016property |
Business Acquisition [Line Items] | ||||||
Number of properties owned | property | 1 | 1 | ||||
Acquisition costs | $ 83,233 | $ 0 | $ 83,233 | $ 0 | ||
Alexandria, Virginia | ||||||
Business Acquisition [Line Items] | ||||||
Number of properties owned | property | 1 | 1 | 1 | |||
Payne Place | ||||||
Business Acquisition [Line Items] | ||||||
Acquisition costs reimbursable to related parties | $ 14,200 | |||||
Payne Place | Alexandria, Virginia | ||||||
Business Acquisition [Line Items] | ||||||
Number of properties owned | property | 11 | |||||
Area of land (in square footage) | ft² | 6,730 | |||||
Percentage of area leased | 100.00% | |||||
Contractual Purchase Price | $ 2,500,000 | |||||
Land | 1,419,898 | |||||
Building and Improvements | 1,016,451 | |||||
Furniture, Fixtures and Equipment | 13,710 | |||||
Intangible Assets | 49,941 | |||||
Other Liabilities | (6,327) | |||||
Fair Value Assigned | 2,493,673 | |||||
Advisor | Payne Place | ||||||
Business Acquisition [Line Items] | ||||||
Acquisition costs | $ 52,864 |
Rental Properties, Net (Details
Rental Properties, Net (Details) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017USD ($)property | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($)property | Jun. 30, 2016USD ($) | Dec. 31, 2016USD ($) | |
Real Estate [Abstract] | |||||
Number of properties owned | property | 1 | 1 | |||
Land | $ 1,419,898 | $ 1,419,898 | $ 1,419,898 | ||
Building and improvements | 1,021,675 | 1,021,675 | 1,018,051 | ||
Furniture, fixtures and equipment | 24,812 | 24,812 | 21,317 | ||
Construction in progress | 4,365 | 4,365 | 0 | ||
Rental property, at cost | 2,470,750 | 2,470,750 | 2,459,266 | ||
Less: accumulated depreciation | (34,259) | (34,259) | (13,431) | ||
Total rental property, net | 2,436,491 | 2,436,491 | $ 2,445,835 | ||
Depreciation expense | $ 10,504 | $ 0 | $ 20,828 | $ 0 |
Identified Intangible Assets,35
Identified Intangible Assets, Net (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization of intangible assets | $ 12,888 | $ 0 | $ 27,870 | $ 0 | |
In-place leases | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Value of in-place leases, net of accumulated amortization | 0 | 0 | $ 27,870 | ||
Accumulated amortization | $ 49,941 | $ 49,941 | $ 22,071 | ||
Weighted average remaining life of rental leases | 5 months |
Mortgage Notes Payable (Details
Mortgage Notes Payable (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017USD ($) | Jun. 30, 2017USD ($)apartment_complex | Dec. 31, 2016USD ($) | Dec. 15, 2016USD ($) | |
Debt Instrument [Line Items] | ||||
Outstanding borrowings | $ 1,611,247 | $ 1,611,247 | ||
Restricted cash related to escrow deposits | 5,765 | $ 5,765 | $ 7,733 | |
LIBOR | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 2.25% | |||
Mortgages | Payne Place | ||||
Debt Instrument [Line Items] | ||||
Outstanding borrowings | $ 1,611,247 | $ 1,611,247 | $ 1,625,000 | $ 1,600,000 |
Annual interest rate | 3.11% | 3.11% | ||
Average monthly debt service | $ 6,948 | |||
Prepayment premium, year one (as a percentage) | 3.00% | |||
Prepayment premium, year two (as a percentage) | 2.00% | |||
Prepayment premium, year three (as a percentage) | 1.00% | |||
Minimum | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 2.50% | |||
Maximum | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 9.50% | |||
Resource America, Inc. | Mortgages | Payne Place | ||||
Debt Instrument [Line Items] | ||||
Number of apartment complexes owned | apartment_complex | 5 | |||
Minimum net worth | 50,000,000 | $ 50,000,000 | ||
Liquidity (no less than) | $ 5,000,000 | $ 5,000,000 | ||
Aggregate portfolio leverage, percentage (no more than) | 65.00% |
Mortgage Notes Payable Summary
Mortgage Notes Payable Summary of Mortgage Notes Payable (Details) - USD ($) | 3 Months Ended | ||
Jun. 30, 2017 | Dec. 31, 2016 | Dec. 15, 2016 | |
Debt Instrument [Line Items] | |||
Outstanding Borrowings | $ 1,611,247 | ||
Deferred Financing Costs, net | (33,348) | $ (34,166) | |
Mortgages | Payne Place | |||
Debt Instrument [Line Items] | |||
Outstanding Borrowings | 1,611,247 | 1,625,000 | $ 1,600,000 |
Deferred Financing Costs, net | (33,348) | (34,166) | |
Carrying Value | 1,577,899 | $ 1,590,834 | |
Average Monthly Debt Service | 6,948 | ||
Average Monthly Escrow | $ 1,933 |
Mortgage Notes Payable Annual P
Mortgage Notes Payable Annual Principal Payments on Mortgage Notes Payable (Details) | Jun. 30, 2017USD ($) |
Debt Disclosure [Abstract] | |
2,018 | $ 33,743 |
2,019 | 34,807 |
2,020 | 35,905 |
2,021 | 37,038 |
2,022 | 38,206 |
Thereafter | 1,431,548 |
Total principal payments | $ 1,611,247 |
Mortgage Notes Payable Amortiza
Mortgage Notes Payable Amortization of Deferred Financing Costs (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] | |||||
Amortization of deferred financing costs | $ 818 | $ 0 | |||
Accumulated amortization of deferred financing costs | $ 818 | 818 | $ 2,775 | ||
2,018 | 1,935 | 1,935 | |||
2,019 | 1,894 | 1,894 | |||
2,020 | 1,851 | 1,851 | |||
2,021 | 1,807 | 1,807 | |||
2,022 | 1,761 | 1,761 | |||
Thereafter | 24,100 | 24,100 | |||
Deferred financing costs | 33,348 | 33,348 | $ 34,166 | ||
Interest Expense | |||||
Related Party Transaction [Line Items] | |||||
Amortization of deferred financing costs | $ 490 | $ 0 | $ 818 | $ 0 |
Certain Relationships and Rel40
Certain Relationships and Related Party Transactions - Narrative (Details) | Aug. 18, 2016USD ($) | Jun. 30, 2017USD ($)$ / shares | Jun. 30, 2017USD ($)apartment_complex$ / shares | Dec. 31, 2016USD ($) | Jun. 30, 2016USD ($) |
Related Party Transaction [Line Items] | |||||
Due from related parties | $ 3,640 | $ 3,640 | $ 2,352 | $ 2,352 | |
Insurance pool (up to) | 2,500,000 | ||||
General liability coverage (up to) | $ 50,000 | 50,000 | |||
Catastrophic insurance (up to) | 250,000,000 | ||||
Payment into the insurance pools | $ 51,000,000 | ||||
LIBOR | |||||
Related Party Transaction [Line Items] | |||||
Interest rate | 2.25% | ||||
Class R Common Stock | |||||
Related Party Transaction [Line Items] | |||||
Annual fee, percentage of purchase price of common stock sold | 1.00% | ||||
Underwriting compensation as percentage of Class R gross offering price (as a percentage) | 8.50% | ||||
Class T common stock | |||||
Related Party Transaction [Line Items] | |||||
Annual fee, percentage of purchase price of common stock sold | 1.00% | ||||
Annual distribution and shareholder servicing fee, term | 5 years | ||||
Initial public offering | Class R Common Stock | |||||
Related Party Transaction [Line Items] | |||||
Common stock, initial offering price (in dollars per share) | $ / shares | $ 9.52 | $ 9.52 | |||
Initial public offering | Class I Common Stock | |||||
Related Party Transaction [Line Items] | |||||
Common stock, initial offering price (in dollars per share) | $ / shares | 9.13 | 9.13 | |||
Initial public offering | Class A common stock | |||||
Related Party Transaction [Line Items] | |||||
Common stock, initial offering price (in dollars per share) | $ / shares | 10 | 10 | |||
Initial public offering | Class T common stock | |||||
Related Party Transaction [Line Items] | |||||
Common stock, initial offering price (in dollars per share) | $ / shares | 9.47 | 9.47 | |||
Distribution reinvestment plan | Class R Common Stock | |||||
Related Party Transaction [Line Items] | |||||
Common stock, initial offering price (in dollars per share) | $ / shares | 9.14 | 9.14 | |||
Distribution reinvestment plan | Class I Common Stock | |||||
Related Party Transaction [Line Items] | |||||
Common stock, initial offering price (in dollars per share) | $ / shares | 8.90 | 8.90 | |||
Distribution reinvestment plan | Class A common stock | |||||
Related Party Transaction [Line Items] | |||||
Common stock, initial offering price (in dollars per share) | $ / shares | 9.60 | 9.60 | |||
Distribution reinvestment plan | Class T common stock | |||||
Related Party Transaction [Line Items] | |||||
Common stock, initial offering price (in dollars per share) | $ / shares | $ 9.09 | $ 9.09 | |||
Advisor | |||||
Related Party Transaction [Line Items] | |||||
Cumulative advances from related party | $ 4,700,000 | $ 4,700,000 | |||
Term of advisory agreement | 1 year | ||||
Acquisition fee | 2.00% | ||||
Monthly asset management fee | 0.083% | ||||
Disposition fee | 2.00% | ||||
Disposition fee, as a percentage of the aggregate brokerage commission paid | 50.00% | ||||
Debt financing fee | 0.50% | ||||
Formation and other operating expenses | $ 104,266 | 104,266 | |||
Advisor | Bridge Loan | |||||
Related Party Transaction [Line Items] | |||||
Mortgage note payable, net of deferred financing costs of $33,838 and $34,166 | $ 555,000 | ||||
Interest expense | 2,921 | ||||
Advisor | Bridge Loan | LIBOR | |||||
Related Party Transaction [Line Items] | |||||
Interest rate | 3.00% | ||||
Advisor | Initial public offering | |||||
Related Party Transaction [Line Items] | |||||
Approximate reimbursement of organization and offering expenses to be reimbursed, option one | 4.00% | ||||
Offering proceeds, threshold, option one (less than) | $ 500,000,000 | ||||
Approximate reimbursement of organization and offering expenses to be reimbursed, option two | 2.50% | ||||
Offering proceeds, threshold, option two (more than) | $ 500,000,000 | ||||
Manager | |||||
Related Party Transaction [Line Items] | |||||
Property management fee | 4.50% | ||||
Due from related parties | 2,342 | $ 2,342 | $ 1,041 | $ 1,041 | |
Construction management fee | 5.00% | ||||
Debt servicing fee | 2.75% | ||||
Resource Securities | Class R Common Stock | |||||
Related Party Transaction [Line Items] | |||||
Selling commission | 3.50% | ||||
Dealer manager fee | 3.00% | ||||
Annual fee, percentage of purchase price of common stock sold | 1.00% | ||||
Underwriting compensation as percentage of Class R gross offering price (as a percentage) | 8.50% | ||||
Resource Securities | Class I Common Stock | |||||
Related Party Transaction [Line Items] | |||||
Dealer manager fee | 1.50% | ||||
Resource Securities | Class A common stock | |||||
Related Party Transaction [Line Items] | |||||
Selling commission | 7.00% | ||||
Dealer manager fee | 3.00% | ||||
Resource Securities | Class T common stock | |||||
Related Party Transaction [Line Items] | |||||
Selling commission | 2.00% | ||||
Dealer manager fee | 3.00% | ||||
Annual fee, percentage of purchase price of common stock sold | 1.00% | ||||
Period of time to receive annual fee from the date each share is issued | 5 years | ||||
Percentage of purchase price of common stock sold, total | 5.00% | ||||
Resource America, Inc. | |||||
Related Party Transaction [Line Items] | |||||
Payment into the insurance pools | 0 | $ 419 | |||
Resource America, Inc. | Internal Audit Fee | |||||
Related Party Transaction [Line Items] | |||||
Professional Fees | $ 12,500 | ||||
Mortgages | Payne Place | Resource America, Inc. | |||||
Related Party Transaction [Line Items] | |||||
Number of apartment complexes owned | apartment_complex | 5 | ||||
Minimum net worth | 50,000,000 | $ 50,000,000 | |||
Liquidity (no less than) | $ 5,000,000 | $ 5,000,000 | |||
Aggregate portfolio leverage, percentage (no more than) | 65.00% | ||||
Maximum | LIBOR | |||||
Related Party Transaction [Line Items] | |||||
Interest rate | 9.50% | ||||
Maximum | Resource Securities | Class R Common Stock | |||||
Related Party Transaction [Line Items] | |||||
Selling commission | 5.50% |
Certain Relationships and Rel41
Certain Relationships and Related Party Transactions - Differences in Fees and Selling Commissions (Details) | 6 Months Ended |
Jun. 30, 2017$ / shares | |
Class T common stock | |
Related Party Transaction [Line Items] | |
Annual fee, percentage of purchase price of common stock sold | 1.00% |
Triggering event to cease payment, percentage of gross proceeds | 10.00% |
Class R Common Stock | |
Related Party Transaction [Line Items] | |
Annual fee, percentage of purchase price of common stock sold | 1.00% |
Triggering event to cease payment, percentage of gross proceeds | 10.00% |
Initial public offering | Class A common stock | |
Related Party Transaction [Line Items] | |
Common stock, initial offering price (in dollars per share) | $ 10 |
Initial public offering | Class T common stock | |
Related Party Transaction [Line Items] | |
Common stock, initial offering price (in dollars per share) | 9.47 |
Initial public offering | Class R Common Stock | |
Related Party Transaction [Line Items] | |
Common stock, initial offering price (in dollars per share) | 9.52 |
Initial public offering | Class I Common Stock | |
Related Party Transaction [Line Items] | |
Common stock, initial offering price (in dollars per share) | 9.13 |
Distribution reinvestment plan | Class A common stock | |
Related Party Transaction [Line Items] | |
Common stock, initial offering price (in dollars per share) | 9.60 |
Distribution reinvestment plan | Class T common stock | |
Related Party Transaction [Line Items] | |
Common stock, initial offering price (in dollars per share) | 9.09 |
Distribution reinvestment plan | Class R Common Stock | |
Related Party Transaction [Line Items] | |
Common stock, initial offering price (in dollars per share) | 9.14 |
Distribution reinvestment plan | Class I Common Stock | |
Related Party Transaction [Line Items] | |
Common stock, initial offering price (in dollars per share) | $ 8.90 |
Resource Securities | Class A common stock | |
Related Party Transaction [Line Items] | |
Selling Commissions Paid by Company (per shares) | 7.00% |
Dealer Manager Fee (per share) | 3.00% |
Resource Securities | Class T common stock | |
Related Party Transaction [Line Items] | |
Selling Commissions Paid by Company (per shares) | 2.00% |
Dealer Manager Fee (per share) | 3.00% |
Annual fee, percentage of purchase price of common stock sold | 1.00% |
Resource Securities | Class R Common Stock | |
Related Party Transaction [Line Items] | |
Selling Commissions Paid by Company (per shares) | 3.50% |
Dealer Manager Fee (per share) | 3.00% |
Annual fee, percentage of purchase price of common stock sold | 1.00% |
Triggering event to cease payment, percentage of gross proceeds | 10.00% |
Resource Securities | Class I Common Stock | |
Related Party Transaction [Line Items] | |
Dealer Manager Fee (per share) | 1.50% |
Maximum | Resource Securities | Class R Common Stock | |
Related Party Transaction [Line Items] | |
Selling Commissions Paid by Company (per shares) | 5.50% |
Certain Relationships and Rel42
Certain Relationships and Related Party Transactions - Schedule of Fees Earned and Expenses Incurred (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | |||||
Due from related parties | $ 3,640 | $ 2,352 | $ 3,640 | $ 2,352 | $ 2,352 |
Due to related parties | 6,501,390 | 3,616,713 | 6,501,390 | 3,616,713 | 3,616,713 |
Other | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | 0 | 55 | 0 | 55 | |
Manager | |||||
Related Party Transaction [Line Items] | |||||
Due from related parties | 2,342 | 1,041 | 2,342 | 1,041 | $ 1,041 |
RAI | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | 3,988 | 8,250 | 3,988 | 8,250 | |
RAI | RAI - insurance funds held in escrow | |||||
Related Party Transaction [Line Items] | |||||
Due from related parties | 1,298 | 1,311 | 1,298 | 1,311 | |
RAI | Internal Audit Fee | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | 750 | 8,250 | 750 | 8,250 | |
RAI | RCP Expense Reimbursements | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | 3,238 | 0 | 3,238 | 0 | |
Resource Securities | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | 480,391 | 63,378 | 480,391 | 63,378 | |
Resource Securities | Selling commissions and dealer-manager fees | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | 0 | 10,363 | 0 | 10,363 | |
Fees earned / expenses incurred: | 403,514 | 0 | 636,033 | 0 | |
Resource Securities | Distribution and shareholder servicing fee | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | 480,391 | 53,015 | 480,391 | 53,015 | |
Fees earned / expenses incurred: | 291,316 | 0 | 443,471 | 0 | |
Advisor | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | 6,017,011 | 3,545,030 | 6,017,011 | 3,545,030 | |
Advisor | Acquisition related reimbursements | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | 1,079 | 14,050 | 1,079 | 14,050 | |
Advisor | Asset management fees | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | 0 | 2 | 0 | 2 | |
Fees earned / expenses incurred: | 6,730 | 0 | 13,457 | 0 | |
Advisor | Organization and offering costs | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | 4,706,053 | 2,848,317 | 4,706,053 | 2,848,317 | |
Fees earned / expenses incurred: | 1,010,962 | 0 | 1,857,736 | 0 | |
Advisor | Operating expense reimbursement | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | 1,309,879 | 682,661 | 1,309,879 | 682,661 | |
Fees earned / expenses incurred: | $ 162,526 | $ 26,458 | $ 314,205 | $ 26,458 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||||
Net loss | $ (331,254) | $ (26,458) | $ (648,997) | $ (26,458) | |
Undistributed net loss attributable to common stockholders | $ (384,821) | (26,458) | (713,647) | (26,458) | |
Common stock cash distributions declared (in shares) | $ 64,650 | ||||
Incremental common shares attributable to dilutive effect of conversion of preferred stock (in shares) | 0 | ||||
Preferred stock, shares issued (in shares) | 0 | 0 | 0 | ||
Convertible Stock | |||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||||
Preferred stock, shares issued (in shares) | 50,000 | 50,000 | 50,000 | ||
Class A common stock | |||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||||
Undistributed net loss attributable to common stockholders | $ (171,529) | (26,458) | $ (361,947) | (26,458) | |
Common stock cash distributions declared (in shares) | 30,709 | 0 | 38,400 | 0 | |
Net loss attributable to common stockholders | $ (140,820) | $ (26,458) | $ (323,547) | $ (26,458) | |
Net los per common share, basic and diluted (USD per share) | $ (0.25) | $ (1.04) | $ (0.65) | $ (1.15) | |
Weighted-average number of shares outstanding, basic and diluted (in shares) | 559,739 | 25,511 | 501,031 | 23,008 | |
Class T common stock | |||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||||
Undistributed net loss attributable to common stockholders | $ (213,292) | $ 0 | $ (351,700) | $ 0 | |
Common stock cash distributions declared (in shares) | 22,858 | 0 | 26,250 | 0 | |
Net loss attributable to common stockholders | $ (190,434) | $ 0 | $ (325,450) | $ 0 | |
Net los per common share, basic and diluted (USD per share) | $ (0.27) | $ 0 | $ (0.67) | $ 0 | |
Weighted-average number of shares outstanding, basic and diluted (in shares) | 696,020 | 0 | 486,845 | 0 |
Equity (Details)
Equity (Details) | Apr. 25, 2017shares | Aug. 05, 2016shares | Jun. 30, 2017USD ($)event$ / sharesshares | Jun. 28, 2017$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Jun. 30, 2016USD ($) |
Class of Stock [Line Items] | ||||||
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 | ||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | ||||
Preferred stock, shares issued (in shares) | 0 | 0 | ||||
Preferred stock, shares outstanding (in shares) | 0 | 0 | ||||
Common stock, conversion terms, percent of paid distributions equal to price at which shares were originally sold | 100.00% | |||||
Percent of annual return on shares at price equal to distributions paid | 6.00% | |||||
Number of triggering events | event | 2 | |||||
Conversion basis | 0.00002 | |||||
Triggering event, option one | 15.00% | |||||
Percentage of non-compounded annual return, option one | 6.00% | |||||
Common stock, shares authorized (in shares) | 1,000,000,000 | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | |||||
Dividends declared, daily accrual amount (in dollars per share) | $ / shares | $ 0.000547945 | |||||
Distributions payable | $ | $ 18,862 | $ 25,174 | $ 0 | |||
Convertible Stock | ||||||
Class of Stock [Line Items] | ||||||
Preferred stock, shares authorized (in shares) | 50,000 | 50,000 | ||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | ||||
Preferred stock, shares issued (in shares) | 50,000 | 50,000 | ||||
Issuance of convertible shares (in shares) | 50,000 | |||||
Preferred stock, shares outstanding (in shares) | 50,000 | 50,000 | ||||
Class A common stock | ||||||
Class of Stock [Line Items] | ||||||
Number of shares exchanged | 5,000 | |||||
Common stock, shares authorized (in shares) | 25,000,000 | 25,000,000 | 250,000,000 | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||
Issuance of stock (in shares) | 616,086.02 | |||||
Common stock, shares outstanding (in shares) | 616,086 | 384,195 | ||||
Authorized stock dividend of common stock (in shares) | 6,100 | |||||
Class T common stock | ||||||
Class of Stock [Line Items] | ||||||
Common stock, shares authorized (in shares) | 25,000,000 | 25,000,000 | 750,000,000 | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||
Issuance of stock (in shares) | 1,067,395.79 | |||||
Common stock, shares outstanding (in shares) | 1,067,396 | 114,037 | ||||
Authorized stock dividend of common stock (in shares) | 10,568 | |||||
Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Authorized stock dividend of common stock (in shares) | 0.01 | |||||
Class R Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Common stock, shares authorized (in shares) | 750,000,000 | 750,000,000 | 0 | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0 | |||
Common stock, shares outstanding (in shares) | 0 | 0 | ||||
Class I Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Common stock, shares authorized (in shares) | 75,000,000 | 75,000,000 | 0 | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0 | |||
Common stock, shares outstanding (in shares) | 0 | 0 |
Equity Schedule of Distribution
Equity Schedule of Distributions (Details) - USD ($) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2017 | Jun. 30, 2017 | |
Class of Stock [Line Items] | ||
Distributions declared | $ 53,567 | $ 64,650 |
Distributions Reinvested in Shares of Common Stock | 21,214 | 32,306 |
Net Cash Distributions | 22,227 | 38,656 |
Total Aggregate Distributions | 43,441 | 70,962 |
Class A common stock | ||
Class of Stock [Line Items] | ||
Distributions declared | 30,709 | 38,400 |
Distributions Reinvested in Shares of Common Stock | 9,637 | 16,087 |
Net Cash Distributions | 17,686 | 32,562 |
Total Aggregate Distributions | 27,323 | 48,649 |
Class T common stock | ||
Class of Stock [Line Items] | ||
Distributions declared | 22,858 | 26,250 |
Distributions Reinvested in Shares of Common Stock | 11,577 | 16,219 |
Net Cash Distributions | 4,541 | 6,094 |
Total Aggregate Distributions | $ 16,118 | $ 22,313 |
Fair Value Measures and Discl46
Fair Value Measures and Disclosures (Details) - Mortgages - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Reported Value Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Mortgage note payable | $ 1,611,247 | $ 1,625,000 |
Estimate of Fair Value Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Mortgage note payable | $ 1,415,677 | $ 1,625,000 |
Operating Expense Limitation (D
Operating Expense Limitation (Details) | 6 Months Ended |
Jun. 30, 2017 | |
Other Income and Expenses [Abstract] | |
Limitation on total operating expenses, percentage of average invested assets for the four most recently completed fiscal quarters | 2.00% |
Limitation on total operating expenses, percentage of net income for the four most recently completed fiscal quarters | 25.00% |
Subsequent Events (Details)
Subsequent Events (Details) | Jul. 31, 2017USD ($)unit | Jul. 27, 2017$ / shares | Jun. 30, 2017USD ($)$ / shares |
Subsequent Event [Line Items] | |||
Distribution per share per day | $ / shares | $ 0.000547945 | ||
Subsequent event | |||
Subsequent Event [Line Items] | |||
Distribution per share per day | $ / shares | $ 0.001434521 | ||
Bay Club | Subsequent event | |||
Subsequent Event [Line Items] | |||
Number of units in real estate property | unit | 220 | ||
Percentage of building leased (as a percentage) | 96.00% | ||
Consideration transferred | $ 28,300,000 | ||
Bay Club Mortgage Loan | Mortgages | Subsequent event | |||
Subsequent Event [Line Items] | |||
Debt instrument term | 7 years | ||
Debt face amount | $ 21,500,000 | ||
Periodic interest payments, period | 24 months | ||
Periodic principal and interest payments, period | 30 years | ||
LIBOR | |||
Subsequent Event [Line Items] | |||
Spread over interest rate | 2.25% | ||
LIBOR | Bay Club Mortgage Loan | Mortgages | Subsequent event | |||
Subsequent Event [Line Items] | |||
Spread over interest rate | 1.87% | ||
Prepayment premium if loan prepayed within first five years (as a percentage) | 1.00% | ||
Maximum | Bay Club Mortgage Loan | Mortgages | Subsequent event | |||
Subsequent Event [Line Items] | |||
Effective rate | 5.75% | ||
Maximum | LIBOR | |||
Subsequent Event [Line Items] | |||
Spread over interest rate | 9.50% | ||
Prepaid Expenses and Other Current Assets | Bay Club | |||
Subsequent Event [Line Items] | |||
Earnest money deposit | $ 1,000,000 |