Rich Uncles Real Estate Investment Trust I 10-Q 2017 Q1 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2017

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from____________to__________

Commission file number: 000-55623

RICH UNCLES REAL ESTATE INVESTMENT TRUST I

(Exact name of registrant as specified in its charter)

California	37-6511147
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
3080 Bristol Street, Suite 550, Costa Mesa, CA	92626
(Address of principal executive offices)	(Zip Code)

(855) 742-4862

(Registrant’s telephone number, including area code:)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES  ¨ NO  x

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨No x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨	Accelerated filer  ¨
Non-accelerated filer ¨	Smaller reporting company  x
(Do not check if a smaller reporting company)
	Emerging growth company  ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ¨ NO x

As of August 10, 2017 there were 7,385,425 shares of common stock outstanding.

RICH UNCLES REAL ESTATE INVESTMENT TRUST I

FORM 10-Q

MARCH 31, 2017

INDEX

PART I -	FINANCIAL INFORMATION		3
	Item 1.	Unaudited Condensed Consolidated Financial Statements	3
		Condensed Consolidated Balance Sheets – March 31, 2017 and December 31, 2016	3
		Condensed Consolidated Statements of Operations - Three Months Ended March 31, 2017 and 2016	4
		Condensed Consolidated Statement of Shareholders’ Equity – Three Months Ended March 31, 2017	5
		Condensed Consolidated Statements of Cash Flows - Three Months Ended March 31, 2017 and 2016	6
		Notes to the Unaudited Condensed Consolidated Financial Statements	7
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32
	Item 4.	Controls and Procedures	32
PART II -	OTHER INFORMATION
	Item 1.	Legal Proceedings	33
	Item 1A.	Risk Factors	33
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34
	Item 3.	Defaults upon Senior Securities	35
	Item 4.	Mine Safety Disclosures	35
	Item 5.	Other Information	35
	Item 6.	Exhibits	35
SIGNATURES			35

2

PART I — FINANCIAL INFORMATION

ITEM 1 – Unaudited Condensed Consolidated Financial Statements

Rich Uncles Real Estate Investment Trust I

Condensed Consolidated Balance Sheets

(Unaudited)

	March 31, 2017			December 31, 2016
ASSETS
Real estate investments:
Land	$	29,910,452		$	27,738,010
Buildings and improvements		94,281,495			72,141,786
Tenant origination and absorption costs		12,250,951			9,380,693
Total real estate investments, cost		136,442,898			109,260,489
Accumulated depreciation and amortization		(5,016,064	)		(3,797,990	)
Total real estate investments, net		131,426,834			105,462,499
Cash and cash equivalents		10,079,127			12,341,682
Restricted cash		1,585,610			1,123,470
Tenant receivables		975,105			731,690
Above-market leases, net		718,042			249,967
Due from affiliates		48,950			48,950
Purchase and other deposits		-			1,250,000
Interest rate swap derivatives		232,316			180,759
Other assets		35,486			18,553
TOTAL ASSETS	$	145,101,470		$	121,407,570
LIABILITIES AND STOCKHOLDERS' EQUITY
Mortgage note payable, net	$	62,939,103		$	38,705,103
Accounts payable, accrued expenses and other liabilities		1,225,194			923,249
Sales deposit liability (Note 4)		1,000,000			1,000,000
Share repurchase payable		549,492			592,511
Below-market leases, net		4,622,754			4,841,757
Due to affiliates		679,164			644,277
Interest rate swap derivatives		72,940			106,840
TOTAL LIABILITIES		71,088,647			46,813,737
Redeemable common stock		1,169,076			1,229,644
Common stock $0.01 par value, 50,000,000,000 shares authorized,
8,302,216 shares issued and outstanding as of March 31, 2017 and 8,249,204 shares issued and outstanding as of December 31, 2016		83,022			82,492
Additional paid-in-capital		81,270,220			80,637,051
Cumulative distributions and net losses		(8,509,495	)		(7,355,354	)
TOTAL STOCKHOLDERS' EQUITY		72,843,747			73,364,189
Commitments and contingencies (Note 9)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	145,101,470		$	121,407,570

See accompanying notes to the unaudited condensed consolidated financial statements

3

PART I – FINANCIAL INFORMATION (continued)

ITEM 1 – Unaudited Condensed Consolidated Financial Statements (continued)

Rich Uncles Real Estate Investment Trust I

Condensed Consolidated Statements of Operations

(Unaudited)

	Three Months Ended March 31,
	2017		2016
Revenues:
Rental income	$	2,392,795	$	773,476
Tenant recoveries		333,472		31,426
Total revenue		2,726,267		804,902
Expenses:
Fees to affiliates (Note 8)		162,201		187,339
General and administrative		149,665		704,215
Depreciation and amortization		1,218,074		481,481
Interest expense		461,200		458,716
Property expenses		340,959		51,391
Acquisition costs		-		54,676
Total expenses		2,332,099		1,937,818
Other income – interest income		280		-
Net income (loss)	$	394,448	$	(1,132,916	)
Net income (loss) per share, basic and diluted	$	0.05	$	(0.26	)
Weighted-average number of common shares outstanding, basic and diluted		8,318,101		4,341,301
Dividends declared per common share	$	0.1875	$	0.1875

See accompanying notes to the unaudited condensed consolidated financial statements

4

PART I – FINANCIAL INFORMATION (continued)

ITEM 1 – Unaudited Condensed Consolidated Financial Statements (continued)

Rich Uncles Real Estate Investment Trust I

Condensed Consolidated Statement of Shareholders' Equity

For the three months ended March 31, 2017

(unaudited)

	Common Stock						Additional			Cumulative Distributions and Net			Total Stockholders'
	Shares			Amounts			Paid -in Capital			Losses			Equity
Balance, December 31, 2016		8,249,204		$	82,492		$	80,637,051		$	(7,355,354	)	$	73,364,189
Issuance of common stock		109,263			1,093			1,091,539			-			1,092,632
Dividends declared		-			-			-			(1,548,589	)		(1,548,589	)
Common stock awarded for services		3,000			30			29,970			-			30,000
Repurchase of common stock		(59,252	)		(593	)		(591,925	)		-			(592,518	)
Net income		-			-			-			394,448			394,448
Transfer from redeemable common stock		-			-			103,585			-			103,585
Balance, March 31, 2017		8,302,216		$	83,022		$	81,270,220		$	(8,509,495	)	$	72,843,747

See accompanying notes to the unaudited condensed consolidated financial statements

5

PART I – FINANCIAL INFORMATION (continued)

ITEM 1 – Unaudited Condensed Consolidated Financial Statements (continued)

Rich Uncles Real Estate Investment Trust I

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Three Months ended March 31,
	2017			2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	394,448		$	(1,132,916	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		1,218,074			481,481
Common stock awarded for services		30,000			11,610
Straight-line rents		(155,188	)		(47,714	)
Amortization of deferred financing costs		68,258			22,423
Amortization of above-market lease		6,016			(14,134	)
Amortization of below-market leases		(219,003	)		(19,801	)
Distributions from earnings in limited partnerships		-			21,193
Unrealized gain (loss) on interest rate swap		(85,457	)		318,567
Expensed organization and offering costs		32,779			505,443
Expensed acquisition fees and costs		-			149,676
Changes in operating assets and liabilities:
Tenant receivables		(88,227	)		(5,813	)
Other assets		(16,821	)		-
Accounts payable, accrued liabilities, and other liabilities		551,947			155,337
Due to affiliates		34,909			99,195
Net cash provided by operating activities		1,771,735			544,547
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of real estate investment		(25,750,000	)		(4,326,879	)
Payments of acquisition fees and costs		(602,523	)		(50,565	)
Payment of seller holdback		(250,000	)		-
Additions to real estate investment		(53,978	)		-
Refundable loan/purchase deposits		-			(850,000	)
Distributions from sales proceeds in limited partnerships		-			1,230,858
Net cash used in investing activities		(26,656,501	)		(3,996,586	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from mortgage notes payable		24,865,612			6,977,000
Cash held in escrow from mortgage financing		-			4,296,000
Repayments of mortgage note payable		(208,936	)		(32,859	)
Borrowings from unsecured credit facility		-			-
Repayments of unsecured credit facility		-			(8,044,432	)
Payment of deferred financing costs		(491,049	)		(381,259	)
Proceeds from sale of an interest in real property recorded as a financing transaction		-			1,000,000
Proceeds from issuance of common stock		-			16,962,495
Payment of organization and offering costs		(32,800	)		(576,734	)
Repurchase of common stock		(592,518	)		(262,098	)
Dividends paid to common shareholders		(455,958	)		(147,005	)
Net cash provided by financing activities		23,084,351			19,791,108
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		(1,800,415	)		16,339,069
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD		13,465,152			2,102,868
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD	$	11,664,737		$	18,441,938
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest	$	383,503		$	60,009
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Transfer from redeemable common stock	$	103,586		$	-
Reduction in share redemptions payable	$	43,019		$	-
Reinvested dividends from common shareholders	$	1,092,631		$	403,415
Purchase deposits applied to acquisition of real estates	$	1,250,000		$	200,000
Security deposits assumed and prorations from acquisitions	$	-		$	23,122

See accompanying notes to the unaudited condensed consolidated financial statements

6

PART I – FINANCIAL INFORMATION (continued)

ITEM 1 – Unaudited Condensed Consolidated Financial Statements (continued)

RICH UNCLES REAL ESTATE INVESTMENT TRUST I

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017

(unaudited)

NOTE 1. BUSINESS AND ORGANIZATION

Rich Uncles Real Estate Investment Trust I (the “Company”) was formed on March 7, 2012. The Company is an unincorporated association under the laws of the State of California and is treated as a real estate investment trust (“REIT”).

From April 2012 until July 20, 2016 (“Termination Date”), the Company was engaged in an offering of its shares of common stock. The Company continues to sell its shares to existing shareholders under the Company’s dividend reinvestment plan (the “Plan”). The number of shares authorized for issuance under the Company’s dividend reinvestment plan is 3,000,000. The offering includes the sale of shares to investors and the sale of shares pursuant to the Plan.

Additionally, no later than the 10^th anniversary date of the Termination Date, we intend to create a liquidity event for our shareholders, which liquidity event may include the sale of all of our properties and the dissolution and winding up of the Company, the listing of our shares on a national exchange or the merger of the Company with another entity that is listed on a national exchange.

On April 29, 2016, the Company filed a registration statement on Form 10 with the Securities and Exchange Commission (the “SEC”) to register its common stock under the Securities Exchange Act of 1934, as amended. The Form 10 registration statement became effective on May 29, 2016.

The Company was formed to primarily invest, directly or indirectly through investments in real estate owning entities, in single-tenant income-producing corporate properties located 80% in California and 20% in other states, which are leased to creditworthy tenants under long-term net leases. The Company’s goal is to generate current income for investors and long-term capital appreciation in the value of its properties.

The Company holds its investments directly and/or through special purpose wholly owned limited liability companies or other subsidiaries. The Company holds its 70.14% interest in one of its properties through a tenancy in common agreement. See Note 4.

The Company is externally managed by its advisor and sponsor, Rich Uncles, LLC (the “Advisor” or the “Sponsor”) whose members include Harold Hofer, Howard Makler, and Ray Wirta. Rich Uncles, LLC is a Delaware limited liability company registered to do business in California. The Company has entered into an agreement (the “Advisory Agreement”) with the Advisor. The current term of the Advisory Agreement ends on March 8, 2018. The Advisory Agreement may be renewed for an unlimited number of successive one-year periods upon the mutual consent of the Company and the Advisor. The Advisor may terminate the Advisory Agreement for any reason and without penalty upon 60 days’ written notice; and we may terminate the Advisory Agreement for cause as defined in the Advisory Agreement. Upon termination of the Advisory Agreement, the Advisor may be entitled to a termination fee. This agreement entitles the Advisor to specified fees upon the provision of certain services with regard to the investment of funds in real estate investments, the management of those investments, among other services, and the disposition of investments, as well as entitles the Advisor to reimbursement of organization and offering costs incurred by the Advisor or Sponsor on behalf of the Company, such as expenses related to the offering, and certain costs incurred by the Advisor in providing services to the Company. In addition, the Advisor is entitled to certain other fees, including an incentive fee upon achieving certain performance goals, as detailed in the Advisory Agreement. The Advisor Agreement is terminable by a majority of the members of the Company’s independent Board of Trustees or the Advisor on 60 days’ written notice with or without cause. The Sponsor also serves as the sponsor for RW Holdings NNN REIT, Inc.

The Company elected to be taxed as a REIT for U.S. federal income tax purposes under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, beginning with the year ended December 31, 2014.

7

PART I – FINANCIAL INFORMATION (continued)

ITEM 1 – Unaudited Condensed Consolidated Financial Statements (continued)

RICH UNCLES REAL ESTATE INVESTMENT TRUST I

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

March 31, 2017

(unaudited)

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information as contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“Codification”), and in conjunction with rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the unaudited condensed consolidated financial statements do not include certain information and footnote disclosures required by GAAP for audited financial statements. In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments which are of a normal and recurring nature, necessary for a fair and consistent presentation of the financial position and the results for the interim period presented. Operating results for the three months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the year ended December 31, 2017. The accompanying unaudited interim financial information should be read in conjunction with our December 31, 2016 audited consolidated financial statements included in our Annual Report on Form 10-K filed with the SEC on July 14, 2017.

The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions are eliminated in consolidation.

Cash, Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash equivalents may include cash and short-term investments. Cash, cash equivalents and restricted cash are stated at cost, which approximates fair value. The Company’s cash, cash equivalents, and restricted cash could be impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets.

Other Comprehensive Loss

For all periods presented, other comprehensive loss is the same as net loss.

Use of Estimates

The preparation of the unaudited condensed consolidated financial statements and the accompanying notes thereto in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. Actual results may differ from those estimates.

Recent Accounting Pronouncements

New Accounting Standards Issued and Adopted

In August 2016, the FASB issued ASU No. 2016-15,Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments(“ASU 2016-15”), which clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows. ASU 2016-15 addresses certain issues where diversity in practice was identified. It amends existing guidance, which is principles based and often requires judgment to determine the appropriate classification of cash flows as operating, investing or financing activities. In addition, ASU 2016-15 clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. On October 1, 2016, the Company elected to early adopt the provisions of ASU 2016-15, and the standard was applied retrospectively for all periods presented. As a result of the adoption of ASU 2016-15, the Company classified organization and offering costs as financing activities and acquisition fees as investing activities.

8

PART I – FINANCIAL INFORMATION (continued)

ITEM 1 – Unaudited Condensed Consolidated Financial Statements (continued)

RICH UNCLES REAL ESTATE INVESTMENT TRUST I

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

March 31, 2017

(unaudited)

In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”). The amendments in ASU 2014-15 require management to evaluate, for each annual and interim reporting period, whether there are conditions or events, considered in the aggregate, that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or are available to be issued when applicable) and, if so, provide related disclosures. The Company elected to early adopt ASU 2014-15 on October 1, 2016 and it did not impact the Company’s condensed consolidated financial statements nor its disclosures.

In January 2017, the FASB issued Accounting Standards Update (“ASU”) No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”) which clarified the definition of a business. The update added further guidance that assists preparers in evaluating whether a transaction will be an acquisition of an asset or a business. The Company expects that most of its acquisitions will qualify as an asset acquisition and therefore acquisition costs are capitalized as part of the cost of the acquired properties. The Company adopted the standard as of October 1, 2016. For periods prior to the adoption of ASU 2017-01, the Company’s financial statements will not be comparable because acquisitions of property qualified as a business and therefore acquisition costs were expensed.

New Accounting Standards Recently Issued and Not Yet Adopted

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). ASU 2014-09 requires an entity to recognize the revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. ASU 2014-09 supersedes the revenue requirements in Revenue Recognition (Topic 605) and most industry-specific guidance throughout the Industry Topics of the Codification.  ASU 2014-09 does not apply to lease contracts within the scope of Leases (Topic 840). ASU 2014-09 was to be effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and is to be applied retrospectively, with early application not permitted.  In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date (“ASU 2015-14”), which defers the effective date of ASU 2014-09 by one year. Early adoption is permitted but not before the original effective date. As the primary source of revenue for the Company is generated through leasing arrangements, which are scoped out of this standard, the Company does not expect the adoption of ASU 2014-09 to have a significant impact on its condensed consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). The amendments in ASU 2016-02 change the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU 2016-02 is effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption of ASU 2016-02 is permitted. The new standard for lease accounting requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The Company is currently evaluating the impact of adopting the new leases standard on its condensed consolidated financial statements.

9

PART I – FINANCIAL INFORMATION (continued)

ITEM 1 – Unaudited Condensed Consolidated Financial Statements (continued)

RICH UNCLES REAL ESTATE INVESTMENT TRUST I

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

March 31, 2017

(unaudited)

NOTE 3. REAL ESTATE INVESTMENTS

The following table provides summary information regarding the Company’s properties as of March 31, 2017:

Property	Location	Acquisition Date	Property Type	Land, building and improvements		Tenant origination and absorption costs		Accumulated depreciation and amortization			Total real estate investments, net
Chase Bank & Great Clips	Antioch, CA	8/22/2014	Retail	$	3,160,035	$	668,200	$	(839,838	)	$	2,988,397
Chevron Gas Station	Rancho Cordova, CA	2/6/2015	Retail		2,600,000		-		(153,510	)		2,446,490
Chevron Gas Station	San Jose, CA	5/29/2015	Retail		2,775,000		-		(72,680	)		2,702,320
Levins	Sacramento, CA	8/19/2015	Industrial		3,750,000		-		(345,929	)		3,404,071
Chevron Gas Station (See Note 4)	Roseville, CA	9/30/2015	Retail		2,800,000		-		(147,330	)		2,652,670
Island Pacific Supermarket	Elk Grove, CA	10/1/2015	Retail		3,151,460		568,540		(249,903	)		3,470,097
Dollar General	Bakersfield, CA	11/11/2015	Retail		4,632,567		689,020		(264,054	)		5,057,533
Rite Aid	Lake Elsinore, CA	12/7/2015	Retail		6,663,446		968,286		(308,158	)		7,323,574
PMI Preclinical	San Carlos, CA	12/9/2015	Office		8,920,000		-		(265,570	)		8,654,430
EcoThrift	Sacramento, CA	3/17/2016	Retail		4,486,993		541,729		(252,298	)		4,776,424
GSA (MSHA)	Vacaville, CA	4/5/2016	Office		2,998,232		456,645		(145,548	)		3,309,329
PreK San Antonio	San Antonio, TX	4/8/2016	Retail		11,851,540		1,593,451		(875,068	)		12,569,923
Dollar Tree	Morrow, GA	4/22/2016	Retail		1,248,156		206,844		(87,703	)		1,367,297
Dinan Cars	Morgan Hill, CA	6/21/2016	Industrial		4,651,845		654,155		(301,015	)		5,004,985
Solar Turbines	San Diego, CA	7/21/2016	Office		5,481,198		389,718		(133,991	)		5,736,925
Amec Foster	San Diego, CA	7/21/2016	Office		5,697,402		485,533		(138,248	)		6,044,687
ITW Ripley	El Dorado, CA	8/18/2016	Industrial		6,178,204		407,316		(184,226	)		6,401,294
Dollar General Big Spring	Big Spring, TX	11/4/2016	Retail		1,161,647		112,958		(11,390	)		1,263,215
Gap	Rocklin, CA	12/1/2016	Office		7,209,629		677,191		(93,165	)		7,793,655
L-3 Communications	San Diego, CA	12/23/2016	Office		10,516,420		961,107		(98,153	)		11,379,374
Sutter Health	Rancho Cordova, CA	3/15/2017	Office		24,258,173		2,870,258		(48,287	)		27,080,144
				$	124,191,947	$	12,250,951	$	(5,016,064	)	$	131,426,834

10

PART I – FINANCIAL INFORMATION (continued)

ITEM 1 – Unaudited Condensed Consolidated Financial Statements (continued)

RICH UNCLES REAL ESTATE INVESTMENT TRUST I

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

March 31, 2017

(unaudited)

Current Acquisitions

During the three months ended March 31, 2017, the Company acquired the following property:

Property	Land, building and improvements		Tenant origination and absorption costs		Above market lease		Purchase price
Sutter Health	$	24,258,173	$	2,870,258	$	474,091	$	27,602,523

Purchase price	$	27,602,523
Purchase deposits applied		(1,250,000	)
Acquisition fees and costs		(602,523	)
Cash paid for acquisition of real estate investment	$	25,750,000

The purchase price allocations reflected in the accompanying condensed consolidated financial statements are based upon estimates and assumptions that are subject to change that may impact the fair value of the assets and liabilities above (including real estate investments, other assets and accrued liabilities).

The expiration of the leases of the properties acquired during the three months ended March 31, 2017 are as follows:

Property	Lease Expiration
Sutter Health	10/31/2025

The Company recognized $112,725 of total revenue related to this property for the three months ended March 31, 2017.

Operating Leases

The Company’s real estate properties are primarily leased to tenants under triple-net leases for which terms and expirations vary. The Company monitors the credit of all tenants to stay abreast of any material changes in credit quality. The Company monitors tenant credit by (1) reviewing the credit ratings of tenants (or their parent companies or lease guarantors) that are rated by national recognized rating agencies; (2) reviewing financial statements and related metrics and information that are publicly available or that are required to be provided pursuant to the lease; (3) monitoring new reports and press releases regarding the tenants (or their parent companies or lease guarantors), and their underlying business and industry; and (4) monitoring the timeliness of rent collections.

At March 31, 2017 and December 31, 2016, tenant receivables included $700,462 and $545,274, respectively, of straight-line rent receivable.

As of March 31, 2017, the future minimum contractual rent payments due under the Company’s non-cancelable operating leases are as follows:

April 1, 2017 through December 31, 2017	$	9,720,186
2018		9,761,153
2019		9,957,362
2020		10,158,543
2021		9,189,556
2022		7,644,732
Thereafter		18,412,166
	$	74,843,698

11

PART I – FINANCIAL INFORMATION (continued)

ITEM 1 – Unaudited Condensed Consolidated Financial Statements (continued)

RICH UNCLES REAL ESTATE INVESTMENT TRUST I

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

March 31, 2017

(unaudited)

Revenue Concentration

As of March 31, 2017, our portfolio’s tenant concentration (greater than 10% of annualized base rent) was as follows:

Property and Location	Annualized Base Rent*		Percentage of Annualized Base Rent
Sutter Health, CA	$	2,161,686	$	21.31	%

*Effective Annualized Base Rent is calculated based on the monthly base rent at June 30, 2017 for twelve months.

As of March 31, 2017, no other tenant accounted for more than 10% of annualized base rent.

Intangibles

As of March 31, 2017, the Company’s intangibles were as follows:

	Tenant Origination and Absorption Costs			Above-Market  Leases			Below-Market Leases
Cost	$	12,250,951		$	747,358		$	(5,349,908	)
Accumulated amortization		(1,536,948	)		(29,316	)		727,154
Net amount	$	10,714,003		$	718,042		$	(4,622,754	)

Amortization of intangible assets over the next five years is expected to be as follows:

	Tenant Origination and Absorption Costs			Above-Market Leases			Below-Market  Leases
Remaining 2017	$	(1,313,970	)	$	(24,406	)	$	656,746
2018		(1,557,413	)		(32,542	)		860,165
2019		(1,557,413	)		(32,542	)		860,165
2020		(1,557,414	)		(32,542	)		860,165
2021		(1,310,296	)		(32,542	)		667,541
2022		(1,310,296)			(32,542	)		657,362
Thereafter		(2,107,201	)		(530,926	)		60,610
	$	(10,714,003	)	$	(718,042	)	$	4,622,754
Weighted average remaining amortization period		7.36 years			34.44 years			6.08 years

NOTE 4. SALE OF INTEREST IN REAL ESTATE INVESTMENT PROPERTY

In March 2016, the Company entered into a tenancy in common agreement and sold an undivided 29.86% interest in the Chevron Gas Station located in Roseville, CA for $1,000,000. The purchaser has the right to require the Company to repurchase their interest in the property during the period from March 1, 2018 through March 1, 2019. Therefore, the sale does not qualify for sales recognition under ASC 360 for financial reporting purposes and the transaction is accounted for as a financing transaction. The proceeds received from the purchaser were recorded as a sales deposit liability and the payments to the purchaser for their share of the property’s operations were recorded as interest expense. The interest expense recorded as a result of this transaction was $13,751 and $4,278 for the three months ended March 31, 2017 and 2016, respectively. The sale will qualify as a sale for financial reporting when the right to require the company to repurchase the 29.86% interest in the property expires without being exercised. The Company earned a disposition fee in connection with this transaction, see Note 8.

12

PART I – FINANCIAL INFORMATION (continued)

ITEM 1 – Unaudited Condensed Consolidated Financial Statements (continued)

RICH UNCLES REAL ESTATE INVESTMENT TRUST I

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

March 31, 2017

(unaudited)

NOTE 5. DEBT

Mortgage Notes Payable

As of March 31, 2017, the Company’s mortgage notes payable consisted of the following:

Collateral	Principal Amount		Deferred Financing Costs			Net Balance		Contractual Interest Rate	Effective Interest Rate (1)			Loan Maturity
Chase Bank & Great Clips	$	1,915,752	$	(31,229	)	$	1,884,523	4.37% fixed		4.37	%	2/5/2019
Levins		2,201,696		(46,306	)		2,155,390	One-month LIBOR + 1.93%		3.74	%	1/5/2021
Island Pacific Supermarket		2,002,076		(44,764	)		1,957,312	One-month LIBOR + 1.93%		3.74	%	1/5/2021
Dollar General		2,467,596		(71,869	)		2,395,727	One-month LIBOR + 1.48%		3.38	%	3/5/2021
Rite Aid		3,887,628		(132,348	)		3,755,280	One-month LIBOR + 1.50%		3.25	%	5/5/2021
PMI Preclinical		4,372,458		(164,971	)		4,207,487	One-month LIBOR + 1.48%		3.38	%	3/5/2021
EcoThrift		2,810,441		(106,073	)		2,704,368	One-month LIBOR + 1.21%		2.96	%	7/5/2021
GSA		1,911,588		(81,798	)		1,829,790	One-month LIBOR + 1.25%		3.00	%	8/5/2021
PreK San Antonio		5,401,275		(192,418	)		5,208,857	4.25% fixed		4.25	%	12/1/2021
Dinan Cars		2,854,082		(95,908	)		2,758,174	One-month LIBOR + 2.27%		4.02	%	1/5/2022
ITW Sky Park		10,003,732		(279,673	)		9,724,059	3.35% fixed		3.35	%	11/1/2026
L-3 Communications		5,527,600		(134,338	)		5,393,262	4.5% fixed		4.50	%	4/1/2022
Gap		3,831,387		(97,234	)		3,734,153	4.15% fixed		4.15	%	8/1/2023
Dollar General Big Spring (2)		638,012		(29,215	)		608,797	4.69% fixed		4.69	%	3/13/2022
Sutter Health		14,850,000		(228,076	)		14,621,924	4.5% fixed		4.50	%	3/9/2024
	$	64,675,323	$	(1,736,220	)	$	62,939,103

(1) Contractual interest rate represents the interest rate in effect under the mortgage note payable as of March 31, 2017. Effective interest rate is calculated as the actual interest rate in effect as of March 31, 2017 (consisting of the contractual interest rate and the effect of the interest rate swap, if applicable). For further information regarding the Company’s derivative instruments, see Note 6.

(2) The loan is cross-collateralized with the six Dollar General properties owned by RW Holdings NNN REIT, Inc. The deed of trust for the Company’s Dollar General Big Spring property and the deeds of trust for the RW Holdings NNN REIT, Inc.’s six Dollar General properties contain cross collateralization and cross default provisions. At June 30, 2017, the outstanding principal balance of the loans on RW Holdings NNN REIT, Inc.’s six Dollar General properties was $3,976,515.

13

PART I – FINANCIAL INFORMATION (continued)

ITEM 1 – Unaudited Condensed Consolidated Financial Statements (continued)

RICH UNCLES REAL ESTATE INVESTMENT TRUST I

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

March 31, 2017

(unaudited)

The mortgage notes payable provide for monthly payments of principal and interest. The mortgage loans payable have balloon payments that are due at loan maturity.

Pursuant to the terms of the mortgage notes payable agreements, the Company is subject to certain financial loan covenants. The Company was in compliance with all terms and conditions of the mortgage loan agreements.

The following summarizes the future principal payments on the Company’s mortgage notes payable as of March 31, 2017:

April 1, 2017 through December 31, 2017	$	879,268
2018		1,233,521
2019		3,092,990
2020		1,287,632
2021		23,880,363
2022		8,889,131
Thereafter		25,412,418
Total	$	64,675,323

Unsecured Credit Facility

On January 13, 2015, the Company (“Borrower”), entered into a credit agreement (the “Unsecured Credit Agreement”) with Pacific Mercantile Bank (“Lender”). The line of credit was paid off in January 2016 and no amounts were drawn on the line after January 2016. The Company canceled its line of credit with Pacific Mercantile Bank in June 2016.

The following is a reconciliation of the components of interest expense for the three months ended March 31, 2017 and 2016:

	Three Months Ended March 31,
	2017			2016
Mortgage notes payable
Interest expense (1)	$	465,115		$	105,637
Amortization of deferred financing costs		68,258			10,173
Unrealized loss (gain) on interest rate swaps (see Note 6)		(85,924	)		332,123
Unsecured credit facility
Interest expense		-			(5,745	)
Amortization of deferred financing costs		-			12,250
Sales deposit liability (See Note 4)		13,751			4,278
Total interest expense	$	461,200		$	458,716

(1) Includes $467 and $9,821 for the three months ended March 31, 2017 and 2016, respectively, of monthly payments to settle the Company’s interest rate swaps and $13,242 and $9,821 of accrued interest payable at March 31, 2017 and 2016, respectively, representing the unsettled portion of the interest rate swaps for the period from the most recent settlement date through March 31, 2017 and 2016, respectively.

NOTE 6. INTEREST RATE SWAP DERIVATIVES

The primary goal of the Company’s risk management practices related to interest rate risk is to prevent changes in interest rates from adversely impacting the Company’s ability to achieve its investment return objectives. The Company does not enter into derivatives for speculative purposes.

14

PART I – FINANCIAL INFORMATION (continued)

ITEM 1 – Unaudited Condensed Consolidated Financial Statements (continued)

RICH UNCLES REAL ESTATE INVESTMENT TRUST I

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

March 31, 2017

(unaudited)

The Company enters into interest rate swaps as a fixed rate payer to mitigate its exposure to rising interest rates on its variable rate mortgage notes payable. The value of interest rate swaps is primarily impacted by interest rates, market expectations about interest rates, and the remaining life of the instrument. In general, increases in interest rates, or anticipated increases in interest rates, will increase the value of the fixed rate payer position and decrease the value of the variable rate payer position. As the remaining life of the interest rate swap decreases, the value of both positions will generally move towards zero.

During 2016, the Company (or wholly owned LLCs) entered into interest rate swap agreements with amortizing notational amounts relating to eight of its mortgage notes payable. The following table summarizes the notional amount and other information related to the Company’s interest rate swaps as of March 31, 2017. The notional amount is an indication of the extent of the Company’s involvement in each instrument at that time, but does not represent exposure to credit, interest rate or market risks:

	March 31, 2017
Derivative Instruments	Number of Instruments	Notional Amount (1)		Reference Rate as of 3/31/2017	Weighted Average Fixed Pay Rate			Weighted Average Remaining Term
Interest Rate Swap Derivatives	8	$	22,507,565	One-month LIBOR/Fixed at 1.21%-2.27%		3.42	%	4.09 years

(1) The notional amount of the Company’s swaps decreases each month to correspond to the outstanding principal balance on the related mortgage. The maximum notional amount is shown above. The minimum notional amount (outstanding principal balance at the maturity date) is $20,552,875.

The following table sets forth the fair value of the Company’s derivative instruments as well as their classification in the consolidated balance sheets as of March 31, 2017 and December 31, 2016, respectively.

		March 31, 2017				December 31, 2016
Derivative Instrument	Balance Sheet Location	Number of Instruments	Fair Value			Number of Instruments		Fair Value
Interest Rate Swaps	Asset - Interest rate swap derivatives, at fair value	5	$	232,316			5	$	180,759
	Liability – Interest rate swap derivatives, at fair value	3	$	(72,940	)		3	$	(106,840	)

The change in fair value of a derivative instrument that is not designated as a cash flow hedge is recorded as interest expense in the accompanying consolidated statements of operations. None of the Company’s derivatives at March 31, 2017 or December 31, 2016 were designated as hedging instruments, therefore the net unrealized loss (gain) recognized on interest rate swaps of $(85,457) and $318,567 was recorded as a (decrease) increase in interest expense for the three months ended March 31, 2017 and 2016, respectively.

NOTE 7. FAIR VALUE DISCLOSURES

The fair value for certain financial instruments is derived using a combination of market quotes, pricing models, and other valuation techniques that involve significant management judgment. The price transparency of financial instruments is a key determinant of the degree of judgment involved in determining the fair value of the Company’s financial instruments. Financial instruments for which actively quoted prices or pricing parameters are available and for which markets contain orderly transactions will generally have a higher degree of price transparency than financial instruments for which markets are inactive or consist of non-orderly trades. The Company evaluates several factors when determining if a market is inactive or when market transactions are not orderly. The following is a summary of the methods and assumptions used by management in estimating the fair value of each class of financial instrument for which it is practicable to estimate the fair value:

15

PART I – FINANCIAL INFORMATION (continued)

ITEM 1 – Unaudited Condensed Consolidated Financial Statements (continued)

RICH UNCLES REAL ESTATE INVESTMENT TRUST I

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

March 31, 2017

(unaudited)

Cash and cash equivalents, restricted cash, tenant receivables, due from affiliates, purchase and other deposits, other assets, accounts payable, accrued expenses and other liabilities, sales deposit liability, share repurchase payable, and due to affiliates: These balances approximate their fair values due to the short maturities of these items.

Derivative Instruments: The Company’s derivative instruments are presented at fair value in the accompanying consolidated balance sheet. The valuation of these instruments is determined using a proprietary model that utilizes observable inputs. As such, the Company classifies these inputs as Level 2 inputs. The proprietary model uses the contractual terms of the derivatives, including the period to maturity, as well as observable market-based inputs, including interest rate curves and volatility. The fair value of interest rate swaps are estimated using the market standard methodology of netting the discounted fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on an expectation of interest rates (forward curves) derived from observable market interest rate curves. In addition, credit valuation adjustments, which consider the impact of any credit risks to the contracts, are incorporated in the fair values to account for potential nonperformance risk.

Mortgage Notes Payable: The fair value of the Company’s mortgage notes payable is estimated using a discounted cash flow analysis based on management’s estimates of current market interest rates for instruments with similar characteristics, including remaining loan term, loan-to-value ratio. Additionally, when determining the fair value of liabilities in circumstances in which a quoted price in an active market for an identical liability is not available, the Company measures fair value using (i) a valuation technique that uses the quoted price of the identical liability when traded as an asset or quoted prices for similar liabilities or similar liabilities when traded as assets or (ii) another valuation technique that is consistent with the principles of fair value measurement, such as the income approach or the market approach. The Company classifies these inputs as Level 3 inputs.

The following were the face value, carrying amount and fair value of the Company’s mortgage notes payable as of March 31, 2017 and December 31, 2016:

March 31, 2017						December 31,2016
Face value		Carrying value		Fair value		Face Value		Carrying Value		Fair Value
$	64,675,323	$	62,939,103	$	62,613,614	$	40,018,648	$	38,705,103	$	38,153,219

Disclosures of the fair values of financial instruments are based on pertinent information available to the Company as of March 31, 2017 and December 31, 2015 and require a significant amount of judgment. Low levels of transaction volume for certain financial instruments have made the estimation of fair values difficult and, therefore, both the actual results and the Company’s estimate of value at a future date could be materially different. The actual value could be materially different from the Company’s estimate of value.

During the three months ended March 31, 2017 and the year ended December 31, 2016, the Company measured the following assets and liabilities at fair value:

Recurring Basis	Total			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
March 31, 2017:
Asset - Interest rate swap derivatives	$	232,316		$	-	$	232,316		$	-
Liability – Interest rate swap derivatives	$	(72,940	)	$	-	$	(72,940	)	$	-
December 31, 2016:
Asset - Interest rate swap derivatives	$	180,759		$	-	$	180,759		$	-
Liability – Interest rate swap derivatives	$	(106,840	)	$	-	$	(106,840	)	$	-

16

PART I – FINANCIAL INFORMATION (continued)

ITEM 1 – Unaudited Condensed Consolidated Financial Statements (continued)

RICH UNCLES REAL ESTATE INVESTMENT TRUST I

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

March 31, 2017

(unaudited)

NOTE 8. RELATED PARTY TRANSACTIONS

The costs incurred by the Company pursuant to the Advisory Agreement for the three months ended March 31, 2017 and 2016 as well as the related amounts payable or receivable as of March 31, 2017 and December 31, 2016 are included in the table below. The amounts payable or receivable are presented in the unaudited condensed consolidated balance sheets as “Due to Affiliates” and “Due from Affiliates.”

	Three months ended						Three months ended
	March 31, 2017		March 31, 2017				March 31, 2016		December 31, 2016
	Incurred		Receivable		Payable		Incurred		Receivable		Payable
Expensed:
Acquisition fees	$	-	$	-	$	-	$	95,000	$	-	$	-
Asset management fees		162,201		-		46,036		62,339		-		43,993
Disposition fees		-		-		-		30,000		-		-
Fees to affiliates		162,201						187,339
Property management fees *		17,866		-		39,133		1,063		-		21,267
Reimbursable organizational and offering expenses		32,779		-		41,775		521,135		-		41,797
Capitalized:
Acquisition fees		540,000		48,950		-		-		48,950		-
Financing coordination fees		100,156		-		137,800		69,770		-		137,800
Other:
Due to advisor for costs advanced		15,000		-		285,372		47,055		-		270,372
Due to other - SSLFO (1)		-		-		100,477		-		-		100,477
Due to RW Holdings NNN REIT Inc.(2)		-		-		28,571		-		-		28,571
	$	868,002	$	48,950	$	679,164	$	826,362	$	48,950	$	644,277

* Property management fees are presented as “property expenses” in the condensed consolidated statement of operations

(1) These costs were incurred by SSLFO, an affiliate of the Sponsor, in connection with the organization and offering of the Company’s shares.

(2) These costs were incurred in connection with the potential acquisition of a property by the Company. The property was acquired by RW Holdings NNN REIT, Inc.; therefore, the Company has a receivable from RW Holdings NNN REIT, Inc.

17

PART I – FINANCIAL INFORMATION (continued)

ITEM 1 – Unaudited Condensed Consolidated Financial Statements (continued)

RICH UNCLES REAL ESTATE INVESTMENT TRUST I

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

March 31, 2017

(unaudited)

Organizational and Offering Expenses

During the offering, pursuant to the Advisory Agreement, the Company is obligated to reimburse the Sponsor or its affiliates for organizational and offering expenses paid by the Sponsor on behalf of the Company. The Company will reimburse the Sponsor for organizational and offering expenses up to 3.0% of gross offering proceeds. The Sponsor and affiliates will be responsible for any organizational and offering expenses related to the offering to the extent they exceed 3.0% of gross offering proceeds from the offering. As of March 31, 2017, the Sponsor has incurred organizational and offering expenses of $3,424,663, which is in excess of 3.0% of the gross offering proceeds received by the Company. To the extent the Company has more gross offering proceeds from future sales of stock, including sales pursuant to the Plan, the Company will be obligated to reimburse the Sponsor. As the amount of future gross offering proceeds under the Plan is uncertain, the amount the Company is obligated to reimburse to the Sponsor is uncertain.

As of March 31, 2017 and December 31, 2016, the Company has reimbursed the Sponsor $2,546,870 and $2,514,070, respectively, for organizational and offering expenses. The Company’s maximum liability for organizational and offering costs through March 31, 2017 and December 31, 2016 was $2,588,645 and $2,555,866, respectively, of which $41,775 was payable at March 31, 2017 and $41,797 was receivable at December 31, 2016.

Acquisition Fees

The Company shall pay the Advisor a fee in an amount equal 3.0% of Company’s contract purchase price of its properties, as defined, as acquisition fees. The total of all acquisition fees and acquisition costs shall be reasonable, and shall not exceed 6.0% of the contract price of the property.  However, a majority of the trust managers (including a majority of the independent trust managers) not otherwise interested in the transaction may approve fees in excess of these limits if they determine the transaction to be commercially competitive, fair and reasonable to the Company.

Asset Management Fee

The Company shall pay to the Advisor as compensation for the advisory services rendered to the Company, a monthly fee in an amount equal to 0.05% of the Company’s Average Invested Assets, as defined (the “Asset Management Fee”), as of the end of the preceding month. The Asset Management Fee shall be payable monthly on the last day of such month, or the first business day following the last day of such month. The Asset Management Fee, which must be reasonable in the determination of the Company’s independent trust managers at least annually, may or may not be taken, in whole or in part as to any year, in the sole discretion of the Advisor. All or any portion of the Asset Management Fee not paid as to any fiscal year shall be deferred without interest and may be paid in such other fiscal year as the Advisor shall determine.

Financing Coordination Fee

Other than with respect to any mortgage or other financing related to a property concurrent with its acquisition, if the Advisor or an affiliate provides a substantial amount of the services (as determined by a majority of the Company’s independent trust managers) in connection with the post-acquisition financing or refinancing of any debt that the Company obtains relative to a property, then the Company shall pay to the Advisor or such affiliate a financing coordination fee equal to 1.0% of the amount of such financing.

Property Management Fees

If the Advisor or any of its affiliates provides a substantial amount of the property management services (as determined by a majority of the Company’s independent trust managers) for the Company’s properties, then the Company shall pay to the Advisor or such affiliate a property management fee equal to 1.5% of gross revenues from the properties managed. The Company also will reimburse the Advisor and any of its affiliates for property-level expenses that such person pays or incurs on behalf of the Company, including salaries, bonuses and benefits of persons employed by such person, except for the salaries, bonuses and benefits of persons who also serve as one of the Company’s executive officers or as an executive officer of such person. The Advisor or its affiliate may subcontract the performance of its property management duties to third parties and pay all or a portion of its property management fee to the third parties with whom it contracts for these services.

18

PART I – FINANCIAL INFORMATION (continued)

ITEM 1 – Unaudited Condensed Consolidated Financial Statements (continued)

RICH UNCLES REAL ESTATE INVESTMENT TRUST I

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

March 31, 2017

(unaudited)

Disposition Fees

For substantial assistance in connection with the sale of properties, the Company shall pay to its Advisor or one of its affiliates 3.0% of the contract sales price, as defined, of each property sold; provided, however, that if, in connection with such disposition, commissions are paid to third parties unaffiliated with our Advisor or its affiliates, the disposition fees paid to our Advisor, our Sponsor, their affiliates and unaffiliated third parties may not exceed the lesser of the competitive real estate commission or 6% of the contract sales price.

Leasing Commission Fees

If the Advisor or any of its affiliates provides a substantial amount of the services (as determined by a majority of the Company’s independent trust managers) in connection with the Company’s leasing of its properties to unaffiliated third parties, then the Company shall pay to the Advisor or such affiliate leasing commissions equal to 6.0% of the rents due pursuant to such lease for the first ten years of the lease term; provided, however (i) if the term of the lease is less than ten years, such commission percentage will apply to the full term of the lease and (ii) any rents due under a renewal of a lease of an existing tenant upon expiration of the initial lease agreement (including any extensions provided for thereunder) shall accrue a commission of 3.0% in lieu of the aforementioned 6.0% commission.

Other Operating Expense Reimbursement

Under the prospectus, total operating expenses of the Company are limited to the greater of 2% of average invested assets or 25% of net income for the four most recently completed fiscal quarters (2%/25% Limitation). If the Company exceeds the 2%/25% Limitation, the Advisor must reimburse the Company the amount by which the aggregate total operating expenses exceeds the limitation, or the Company must obtain a waiver from the Company’s conflicts committee. For purposes of determining the 2%/25% Limitation amount, “average invested assets” means the average monthly book value of the Company’s assets invested directly or indirectly in equity interests and loans secured by real estate during the 12-month period before deducting depreciation, reserves for bad debts or other non-cash reserves. “Total operating expenses” means all expenses paid or incurred by the Company, as determined by GAAP, that are in any way related to the Company’s operation including Asset Management Fees, but excluding (a) the expenses of raising capital such as organization and offering expenses, legal, audit, accounting, underwriting, brokerage, listing, registration and other fees, printing and other such expenses and taxes incurred in connection with the issuance, distribution, transfer, listing and registration of shares of the Company’s common stock; (b) interest payments; (c) taxes; (d) non-cash expenditures such as depreciation, amortization and bad debt reserves; (e) reasonable incentive fees based upon increases in NAV per share; (f) acquisition fees and acquisition expenses (including expenses, relating to potential investments that the Company does not close); and (h) disposition fees on the sale of real property and other expenses connected with the acquisition, disposition and ownership of real estate interests or other property (other than disposition fees on the sale of assets other than real property), including the costs of insurance premiums, legal services, maintenance, repair and improvement of real property.

NOTE 9. COMMITMENTS AND CONTINGENCIES

Economic Dependency

The Company depends on its Sponsor and its Advisor for certain services that are essential to the Company, including the sale of the Company’s shares of common stock under the Plan, the identification, evaluation, negotiation, origination, acquisition and disposition of investments; management of the daily operations of the Company’s investment portfolio; and other general and administrative responsibilities. In the event that these companies are unable to provide the respective services, the Company will be required to obtain such services from other sources.

19

PART I – FINANCIAL INFORMATION (continued)

ITEM 1 – Unaudited Condensed Consolidated Financial Statements (continued)

RICH UNCLES REAL ESTATE INVESTMENT TRUST I

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

March 31, 2017

(unaudited)

Environmental

As an owner of real estate, the Company is subject to various environmental laws of federal, state and local governments. Although there can be no assurance, the Company is not aware of any environmental liability that could have a material adverse effect on its financial condition or results of operations. However, changes in applicable environmental laws and regulations, the uses and conditions of properties in the vicinity of the Company’s properties, the activities of its tenants and other environmental conditions of which the Company is unaware with respect to the property could result in future environmental liabilities.

Legal Matters

From time to time, the Company may become party to legal proceedings that arise in the ordinary course of its business. The Company is not a party to any legal proceeding, nor is the Company aware of any pending or threatened litigation that could have a material adverse effect on the Company’s business, operating results, cash flows, or financial condition should such litigation be resolved unfavorably.

The U.S. Securities and Exchange Commission (the “SEC”) is conducting an investigation related to the advertising and sale of securities by the Company in connection with the offering. The investigation is a non-public fact finding inquiry. It is neither an allegation of wrongdoing nor a finding that violations of law have occurred. In connection with the investigation, the Company and certain affiliates have received and responded to subpoenas from the SEC requesting documents and other information related to the Company and the offering. The SEC’s investigation is ongoing. The Company has cooperated and intends to continue to cooperate with the SEC in this matter. The Company is unable to predict the likely outcome of the investigation or determine its potential impact, if any, on the Company.

NOTE 10. SUBSEQUENT EVENTS

The Company evaluates subsequent events up until the date the unaudited condensed consolidated financial statements are issued.

Distributions

On April 20, 2017, the Company’s board of trust managers declared dividends based on daily record dates for the period January 1, 2017 through March 31, 2017 at a rate of $0.0020833 per share per day, or $1,559,176, on the outstanding shares of the Company’s common stock, which the Company paid on April 20, 2017. Of the $1,559,176 dividend, $1,082,081 was reinvested through the Company’s Plan.

On July 20, 2017, the Company’s board of trust managers declared dividends based on daily record dates for the period April 1, 2017 through June 30, 2017 at a rate of $0.0020604 per share per day, or $1,569,284, on the outstanding shares of the Company’s common stock, which the Company paid on July 20, 2017. Of the $1,569,284 dividend, $1,103,595 was reinvested through the Company’s Plan.

Acquisitions

On June 29, 2017, through a wholly owned subsidiary, the Company acquired a 14,490 square foot retail property in Santa Maria, California, which it leases to Walgreen Company, a subsidiary of Walgreens Boots Alliance (“Walgreens”). The seller is not affiliated with the Company or the Advisor. The aggregate purchase price for the Walgreens property was $5,125,000 plus acquisition and closing costs of $125,040. Proceeds from the sale of a Chevron in Rancho Cordova, CA through a 1031 exchange accommodation on April 28, 2017 were used to pay for $3,298,019 of the purchase price.

Property Sale

On April 27, 2017, the Company sold the Chevron Gas Station property in Rancho Cordova, CA to a third party for $3,434,000 which was paid in cash. The Company will recognize a gain on this transaction of approximately $800,000 in the second quarter of 2017.

20

PART I – FINANCIAL INFORMATION (continued)

ITEM 1 – Unaudited Condensed Consolidated Financial Statements (continued)

RICH UNCLES REAL ESTATE INVESTMENT TRUST I

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

March 31, 2017

(unaudited)

Repurchase of Common Stock

For the period from April 1, 2017 through August 10, 2017, the Company repurchased 202,791 shares for $2,027,911.

Legal Matters

None.

ITEM 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following “Management’s Discussion and Analysis of Financial Condition and Results of Operations” should be read in conjunction with the Company’s condensed consolidated Financial Statements and the Notes thereto contained in Part I of this Quarterly Report on Form 10-Q. See also “Forward Looking Statements” below. As used herein, “we,” “us,” and “our” refer to Rich Uncles Real Estate Investment Trust I.

Forward-Looking Statements

Certain statements contained in this Quarterly Report on Form 10-Q of Rich Uncles Real Estate Investment Trust I (the “Company”), other than historical facts, may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We intend for all such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act, as applicable by law. Such statements include, in particular, statements about our plans, strategies, and prospects and are subject to certain risks and uncertainties, as well as known and unknown risks, which could cause actual results to differ materially from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of our performance in future periods. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “may,” “would,” “could,” “should,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue,” or other similar words. Forward-looking statements that were true at the time made may ultimately prove to be incorrect or false. We caution readers not to place undue reliance on forward-looking statements, which reflect our management’s view only as of the date this Quarterly Report on Form 10-Q is filed with the Securities and Exchange Commission (the “SEC”). Additionally, we undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results.

The following are some, but not all, of the assumptions, risks, uncertainties and other factors that could cause our actual results to differ materially from those presented in our forward-looking statements:

• We may be unable to renew leases, lease vacant space or re-lease space as leases expire on favorable terms or at all.

• We are subject to risks associated with tenant, geographic and industry concentrations with respect to our properties.

• Our properties, intangible assets and other assets may be subject to impairment charges.

• We could be subject to unexpected costs or unexpected liabilities that may arise from potential dispositions and may be unable to dispose of properties on advantageous terms.

• We are subject to competition in the acquisition and disposition of properties and in the leasing of our properties and we may be unable to acquire, dispose of, or lease properties on advantageous terms.

• We could be subject to risks associated with bankruptcies or insolvencies of tenants or from tenant defaults generally.

• We have substantial indebtedness, which may affect our ability to pay distributions, and expose us to interest rate fluctuation risk and the risk of default under our debt obligations.

• We may be affected by the incurrence of additional secured or unsecured debt.

21

PART I – FINANCIAL INFORMATION (continued)

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

• We may not be able to maintain profitability.

• Cash for distributions to investors will be from net rental income (including sales of properties) or waiver or deferral of reimbursements to our Sponsor or fees paid to our Advisor.

• We may not generate cash flows sufficient to pay our distributions to shareholders or meet our debt service obligations.

• We may be affected by risks resulting from losses in excess of insured limits.

• We may fail to qualify as a REIT for U.S. federal income tax purposes.

• We are dependent upon our Advisor which has the right to terminate the advisory agreement upon 60 days’ written notice without cause or penalty.

The forward-looking statements contained in this Quarterly Report on Form 10-Q should be read in light of the risk factors identified above and the additional risks and uncertainties described in Part II, Item 1A of this Quarterly Report on Form 10-Q and Item 1A of the Company’s Annual Report on Form 10-K, filed with the SEC on July 14, 2017.

Management’s discussion and analysis of financial condition and results of operations are based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of these financial statements requires our management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On a regular basis, we evaluate these estimates. These estimates are based on management’s historical industry experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.

Management’s Overview

We were formed on March 7, 2012 as a California unincorporated association, under the laws of the State of California, and is treated as a REIT. We invested primarily in single tenant income-producing corporate properties which are leased to creditworthy tenants under long-term net leases. Although we are not limited as to the form our investments may take, our investments in real estate were generally made by acquiring fee title or interests in entities that own and operate real estate. We made acquisitions of our real estate investments directly or indirectly through limited liability companies or limited partnerships, including through other REITs, or through investments in joint ventures, partnerships, tenants in common, co-tenancies or other co-ownership arrangements with other owners of properties, affiliates of our advisor or other persons.

We elected to be taxed as a REIT for U.S. for federal income tax purposes under Section 856 through 860 of the Internal Revenue Code of 1986, as amended, beginning with our taxable year ended December 31, 2014. As a REIT, we generally will not be subject to federal income tax on the income that we distribute to our shareholders each year. If we fail to qualify for taxation as a REIT in any year after electing REIT status, our income will be taxed at regular corporate rates, and we may be precluded from qualifying for treatment as a REIT for the four-year period following our failure to qualify. Such an event could materially and adversely affect our net income and cash available for distribution to our shareholders. However, we believe that we will be organized and will operate in a manner that will enable us to qualify for treatment as a REIT for federal income tax purposes and we intend to continue to operate so as to remain qualified as a REIT for federal income tax purposes thereafter.

Subject to certain restrictions and limitations, our business is externally managed by our advisor pursuant to an Advisory Agreement with Rich Uncles LLC which manages our operations and will manage our portfolio of core real estate Properties and real estate related assets. Rich Uncles LLC is paid certain fees as set forth in Note 8 of the Notes to the Condensed Consolidated Financial Statements.

On April 29, 2016, the Company filed a registration statement on Form 10 with the Securities and Exchange Commission (the “SEC”) to register its common stock under the Securities Exchange Act of 1934, as amended. The Form 10 registration statement became effective on May 29, 2016.

The Company ceased its offering on July 20, 2016 with the exception of shares sold as distribution reinvestments pursuant to the Plan.

As of August 10, 2017, we had sold 8,847,811 shares of common stock for gross offering proceeds for $88,478,107.

22

PART I – FINANCIAL INFORMATION (continued)

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

We used substantially all of the net proceeds from the offering to acquire a portfolio of real estate investments. We invested primarily in single tenant income-producing corporate properties which are leased to creditworthy tenants under long-term net leases. We diversified our portfolio by geography, investment size, and investment risk with the goal of owning a portfolio of income-producing real estate investments that provides attractive and stable returns to our shareholders.

Our investment objectives and policies may be amended or changed at any time by our board of trust managers. Although we have no plans at this time to change any of our investment objectives, our board of trust managers may change any and all such investment objectives, including our focus on single tenant properties, if it believes such changes are in the best interest of our shareholders.

Rich Uncles LLC made recommendations on all investments to our board of trust managers. All proposed real estate investments must be approved by at least a majority of our board of trust managers subject to guidelines established by our board of trust managers which, if a proposed investment fits within such guidelines, specific board approval would not be needed.

As of March 31, 2017, the Company owned twenty-one properties in three states consisting of retail, office and industrial properties. The net book value of these investments at March 31, 2017 was $131,426,834.

The Company

We are a publicly registered, non-exchange traded company dedicated to providing shareholders with dependable quarterly dividends. The Company believes it is qualified and operates as a real estate investment trust, or REIT, which requires it to annually distribute at least 90% of its taxable income (excluding net capital gains) in the form of dividends to its shareholders. The Company’s quarterly dividends are supported by the cash flow generated from real estate owned under long-term, net lease agreements with local, regional, and national commercial tenants.

At August 10, 2017, we owned a diversified portfolio:

• Of 21 properties, eleven properties are retail properties which represent 35% of the portfolio, seven properties are office properties which represent 53% of the portfolio, and of which three properties are industrial property which represents 12% of the portfolio (expressed as a percentage of base rental revenue);

• Fully leased with an occupancy rate of 100.0%;

• Leased to twenty-two different commercial tenants doing business in three separate property types;

• Located in three states;

• With approximately 615,000 square feet of aggregate leasable space of which approximately 185,000 square feet per retail property, approximately 327,000 square feet per office property, and 103,000 square feet per industrial property;

• With an average leasable space per property of approximately 29,500 square feet and

• With a balance of outstanding debt of approximately $64.4 million.

Of the 21 properties in the portfolio, 20, or 97%, by base rental revenue, are single-tenant properties. At August 9, 2017, all 21 properties were leased with a weighted average remaining lease term (excluding rights to extend a lease at the option of the tenant) of approximately 7.36 years.

23

PART I – FINANCIAL INFORMATION (continued)

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Investment Strategy

Our investment strategy is to primarily own single-tenant retail, office, and industrial real estate leased to creditworthy tenants on long-term leases. Our ideal portfolio is comprised of a mix of office, industrial and retail property types, with greater than 50% of our real estate leased to investment grade tenants as determined by one of the big three credit rating agencies (Standard & Poor’s, Moody’s or Fitch Group). We generally seek to acquire real estate that has the following characteristics:

• Properties that are freestanding, and commercially zoned with a single tenant;

• Properties that are located in significant markets, which markets are identified and ranked based on several key demographic and real estate specific metrics such as population growth, income, unemployment, job growth, GDP growth, rent growth, and vacancy rates;

• No more than 20% of the properties to be located outside of California;

• Properties that are located in strategic locations critical to generating revenue for the tenants that occupy them (i.e., the tenants need the properties in which they operate in order to conduct their businesses);

• Properties that are located within attractive demographic areas relative to the business of our tenants and are generally fungible and have good visibility and easy access to major thoroughfares;

• Properties with rental or lease payments that approximate or are lower than market rents; and

• Properties that can be purchased with the simultaneous execution or assumption of long-term, net lease agreements, offering both current income and the potential for future rent increases.

See Note 1 to the unaudited condensed Consolidated Financial Statements for further information on our business and organization.

Liquidity and Capital Resources

The Company’s proceeds from shares sold have been, and will continue to be, primarily for (i) property acquisitions; (ii) capital expenditures; and (iii) payment of principal on our outstanding mortgage indebtedness. Our cash needs for the purchase of real estate properties and other real estate investments will be funded primarily from the sale of our shares or from debt proceeds.

At March 31, 2017, the outstanding principal balance of the Company’s mortgage notes payable was $64,675,323. See Note 5 to the unaudited condensed Consolidated Financial Statements for additional information regarding our outstanding indebtedness.

Portfolio Information

Our real estate investments were as follows:

	As of
	March 31, 2017		December 31, 2016		March 31, 2016
Number of Properties:
Retail		11		11		8
Office		7		7		1
Industrial		3		2		1
Total		21		20		10
Leasable Square Feet:
Retail		171,898		171,898		101,966
Office		326,715		220,123		20,800
Industrial		103,296		103,296		76,000
Total		601,909		495,317		198,766

24

PART I – FINANCIAL INFORMATION (continued)

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Cash Flow Summary

The following table summarizes our cash flow activity for the three months ended March 31:

	2017			2016
Net cash provided by operating activities	$	1,717,735		$	544,547
Net cash used in investing activities	$	(26,656,501	)	$	(3,996,586	)
Net cash provided by financing activities	$	23,084,351		$	19,791,108

Cash Flows from Operating Activities

As of March 31, 2017 and 2016, we owned twenty-one and ten properties, respectively. The acquisition of the one property, owning the two properties acquired during the three months ended March 31, 2016 for the entire three month period ended March 31, 2017, as well as the acquisition of ten properties between April 1, 2016 and December 31, 2016, significantly contributed to the increase in net cash provided by operating activities.

Cash Flows from Investing Activities

During the three months ended March 31, 2017, one property was acquired for $25,803,978. During the three months ended, March 31, 2016, one property was acquired for $4,326,879. During the three months ended March 31, 2017 and 2016, the payment of acquisition fees and costs were $602,523 and $50,565 respectively. During the three months ended March 31, 2017 and 2016, the payment of seller holdback was $250,000 and $0, respectively. In addition, refundable purchase deposits of $0 and $850,000 were made during the three months ended March 31, 2017 and 2016, respectively. During the three months ended March 31, 2016, the distribution of sales proceeds in limited partnership was $1,230,858.

Cash Flows from Financing Activities

During the three months ended March 31, 2017 and 2016, the proceeds from mortgage notes payable were $24,865,612 and $6,977,000, respectively. During the three months ended March 31, 2017 and 2016, the proceeds received from cash in escrow related to mortgage notes payable were $0 and $4,296,000, respectively. During the three months ended March 31, 2017 and 2016, principal payments on mortgage notes payable were $208,936, and $32,859, respectively. During the three months ended March 31, 2017 and 2016, the payments on the unsecured credit facility were $0 and $8,044,432, respectively. During the three months ended March 31, 2017 and 2016, payments of deferred financing costs were $491,049 and $381,259, respectively. During the three months ended March 31, 2017, payments of refundable loan deposits were $85,880. During the three months ended March 31, 2016, $1,000,000 was received from the transfer of a 29.86% interest in the Chevron Gas Station property in Roseville, CA. During the three months ended March 31, 2017 and 2016, the proceeds from the issuance of common stock was $0 and $16,962,495, respectively. During the three months ended March 31, 2017 and 2016, organization and offering costs were $32,800 and $576,734, respectively. During the three months ended March 31, 2017 and 2016, the cash used to repurchase common stock was $592,518 and $262,098, respectively. During the three months ended March 31, 2017 and 2016, cash distributions paid to common shareholders were $455,958 and $147,005, respectively.

Capital Resources

Generally, cash needs for property acquisitions, debt payments, capital expenditures, and other investments will be funded by equity and bank borrowings, and to a lesser extent, by internally generated funds. Cash needs for operating and interest expenses and distributions will generally be funded by internally generated funds. If available, future sources of capital include secured or unsecured borrowings from banks or other lenders, proceeds from the sale of properties, as well as undistributed funds from operations.

25

PART I – FINANCIAL INFORMATION (continued)

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Results of Operations

The Company owned twenty properties at December 31, 2016. The Company acquired one property in March 2017. We expect that rental income, tenant recoveries, depreciation and amortization expense, interest expense and asset management fees to affiliates to each increase in future periods as a result of owning the eleven properties acquired in 2016 for an entire period and the acquisition of the Walgreens property in June 2017.

Comparison of the three months ended March 31, 2017 to the three months ended March 31, 2016

Rental Income

Rental income for the three months ended March 31, 2017 was $2,392,795 and $773,476 for the three months ended March 31, 2016. The annualized rental income of the properties owned as of March 31, 2017 was $10,145,247.

Tenant Recoveries

Tenant recoveries for the three months ended March 31, 2017 were $333,472, and was $31,426 for the three months ended March 31, 2016y. Pursuant to most of our lease agreements, tenants are required to pay all or a portion of the property operating expenses.

Fees to Affiliate

Asset management fees to affiliate for the three months ended March 31, 2017 and 2016 were $162,201 and $62,339 respectively. The asset management fees are equal to 0.6% per annum of the Company’s Average Invested Assets.

Disposition fees to affiliate for the three months ended March 31, 2016 were $30,000. There were no disposition fees to affiliate in 2017.

Property management fees to affiliate for the three months ended March 31, 2017 and 2016 were $17,866 and $1,063 respectively.

Acquisition fees to affiliate for the three months ended March 31, 2017 and 2016 were $540,000 and $95,000, respectively. Upon adopting ASU 2017-01 on October 1, 2016, acquisition fees were capitalized and thus the $540,000 of acquisition fee to affiliate was capitalized.

General and Administrative

General and administrative expenses for the three months ended March 31, 2017 and 2016 were $149,665 and $704,215, respectively. During the three months ended March 31, 2016, the Company was offering its shares of common stock to the public. On July 20, 2016, the Company terminated its public offering. The Company continues to sell its shares to existing shareholders pursuant the Plan. Therefore, the advertising costs of $522,135 incurred in the three months ended March 31, 2016 were reduced to $32,779 for the three months ended March 31, 2017. These advertising costs are the reimbursement to the Sponsor of organization and offering costs issued by the Sponsor. The Company’s obligation to reimburse the Sponsor for organization and offering costs is limited to 3% of gross offering proceeds. Gross offering proceeds includes the proceeds from shares sold pursuant to the Plan. General and administrative costs, excluding advertising costs were $116,886 and $236,435 for the three months ended March 31, 2017 and 2016, respectively. The most significant components of general and administrative, after excluding advertising costs, are legal fees, audit fees and common stock awarded for services.

Depreciation and Amortization

Depreciation and amortization expense for the three months ended March 31, 2017 and 2016 was $1,218,074 and $481,481, respectively. The purchase price of the acquired properties is allocated to tangible assets, identifiable intangibles and assumed liabilities. The tangible assets and identifiable intangibles are depreciated or amortized over their estimated useful lives.

26

PART I – FINANCIAL INFORMATION (continued)

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Interest Expense

Interest expense for the three months ended March 31, 2017 and 2016 was $461,200 and $458,716, respectively. See Note 5 for the detail of the components of interest expense.

Property Expenses

Property expenses for the three months ended March 31, 2017 2016 were $340,959 and $51,391, respectively. These expenses primarily relate to property taxes and repairs and maintenance expenses.

New Accounting Pronouncements

See Note 2 to the Notes to the unaudited condensed Consolidated Financial Statements.

Organizational and Offering Costs

Our organizational and offering costs are paid by our Sponsor on our behalf. Offering costs include all expenses incurred in connection with the offering. Other organizational and offering costs include all expenses incurred in connection with our formation, including, but not limited to legal fees, federal and state filing fees, and other costs to incorporate.

During the offering, we are obligated to reimburse our Sponsor for organizational and offering costs related to the offering paid by them on our behalf provided such reimbursement would not exceed 3% of gross offering proceeds raised in the offering as of the date of the reimbursement.

As of March 31, 2017, the Company had not incurred any organizational and offering costs related to the offering as all such costs had been funded by our Sponsor. As a result, these organizational and offering costs related to the offering are not recorded in our financial statements as of March 31, 2017 other than to the extent of 3% of the gross offering proceeds. Through March 31, 2017, our Sponsor had incurred organizational and offering costs on our behalf in connection with our offering of $3,424,663. As of March 31, 2017, the Company had recorded $2,588,645 of organizational and offering costs, of which $41,775 was payable to the Sponsor.

See Note 8 to the unaudited condensed Consolidated Financial Statements for additional information.

Distributions

Dividends declared, dividends paid and cash flow provided by operations were as follows:

					Dividends paid
Period	Dividends declared		Dividends declared per share		Cash		Reinvested		Cash flows provided by operating activities (1)
First Quarter 2016		543,128	$	0.1875	$	146,053	$	397,075	$	544,548
Second Quarter 2016		822,276	$	0.1875	$	233,886	$	588,390	$	802,547
Third Quarter 2016		1,138,525	$	0.1875	$	316,501	$	822,024	$	955,147
Fourth Quarter 2016		1,529,518	$	0.1875	$	435,919	$	1,093,599	$	1,026,685
First Quarter 2017		1,548,589	$	0.1875	$	455,958	$	1,092,631	$	1,717,758
Totals	$	5,586,781	$	1.1250	$	1,588,317	$	3,993,719	$	5,046,685

(1) Since dividends are declared after the end of a quarter, the cash flows provided by operating activities in this column are for the quarter of the distribution period rather than the quarter for which distributions were declared.

27

PART I – FINANCIAL INFORMATION (continued)

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Dividends are paid on a quarterly basis. In general, distributions for record dates as of the end of a given quarter are paid on or about the 20th of the first month following the quarter. Dividends were declared and paid based on daily record dates at rates per share per day as follows:

Distribution Period	Rate per Share per Day		Declaration Date	Payment Date
October 1 - December 31, 2013		0.002038	January 20, 2014	January 20, 2014
January 1 - March 31, 2014		0.002083	April 20, 2014	April 20, 2014
April 1 - June 30, 2014		0.00206	July 20, 2014	July 20, 2014
July 1 - September 30, 2014		0.00206	October 20, 2014	October 20, 2014
October 1 - December 31, 2014		0.002038	January 20, 2015	January 20, 2015
January 1 - March 31, 2015		0.00206	April 20, 2015	April 20, 2015
April 1 - June 30, 2015		0.00206	July 20, 2015	July 20, 2015
July 1 - September 30, 2015		0.00206	October 20, 2015	October 20, 2015
October 1 - December 31, 2015		0.002038	January 20, 2016	January 20, 2016
January 1 - March 31, 2016		0.002083	April 20, 2016	April 20, 2016
April 1 - March 31, 2017		0.00206	July 20, 2016	July 20, 2016
July 1 – September 30, 2016		0.00206	October 20, 2016	October 20, 2016
October 1 – December 21, 2017		0.002038	January 20, 2017	January 20, 2017
January 1 – March 31, 2017		0.00206	April 20, 2017	April 20, 2017
April 1 - June 30, 2017		0.0020604	July 20, 2017	July 20, 2017

Going forward, we expect our board of trust managers to continue to declare cash distributions based on daily record dates and to pay these distributions on a quarterly basis, and to continue to declare distributions based on a single record date as of the end of the quarter, and to pay these distributions on a quarterly basis. Cash distributions will be determined by our board of trust managers based on our financial condition and such other factors as our board of trust managers deems relevant. We have not established a minimum dividend or distribution level, and our charter does not require that we make dividends or distributions to our shareholders other than as necessary to meet REIT qualification requirements.

To date, the sources of cash used to pay our shareholder distributions have been from net rental income received.

Properties

As of March 31, 2017, we owned twenty-one properties encompassing approximately 601,909 leasable square feet in three states. We were in the offering state of our life cycle through July 20, 2016 with the acquisitions that we completed in June 2017. The Company has fully invested the offering proceeds. More detail about our properties can be found in Note 3 to the unaudited condensed Consolidated Financial Statements.

28

PART I – FINANCIAL INFORMATION (continued)

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Recent Market Conditions

Beginning in late 2007, domestic and international financial markets experienced significant disruptions that severely impacted the availability of credit and contributed to rising costs associated with obtaining credit. Financial conditions affecting commercial real estate have improved and continue to improve, as low treasury rates and increased lending from banks, insurance companies and commercial mortgage backed securities (“CMBS”) conduits have increased lending activity. Nevertheless, the debt market remains sensitive to the macro environment, such as Federal Reserve policy, market sentiment or regulatory factors affecting the banking and CMBS industries. While we expect that financial conditions will remain favorable, if they were to deteriorate we may experience more stringent lending criteria, which may affect our ability to finance certain property acquisitions or refinance any debt at maturity. Additionally, for properties for which we are able to obtain financing, the interest rates and other terms on such loans may be unacceptable. We expect to manage the current mortgage lending environment by considering alternative lending sources, including securitized debt, fixed rate loans, borrowings on a line of credit, short-term variable rate loans, assumed mortgage loans in connection with property acquisitions, interest rate lock or swap agreements, or any combination of the foregoing.

Commercial real estate fundamentals continue to strengthen, as a moderate pace of job creation has supported gains in office absorption, retail sales and warehouse distribution. Although commercial property construction activity has increased, it remains near historic lows; as a result, incremental demand growth has helped to reduce vacancy rates and support modest rental growth. Improving fundamentals have resulted in gains in property values.

Election to be Taxed as a REIT

The Company elected to be taxed as a REIT for U.S. federal income tax purposes under Section 856 through 860 of the Internal Revenue Code of 1986, as amended. beginning with the taxable year ended December 31, 2014. To qualify and maintain our status as a REIT, we must meet certain requirements relating to our organization, sources of income, nature of assets, distributions of income to our shareholders and recordkeeping. As a REIT, we generally would not be subject to federal income tax on taxable income that we distribute to our shareholders so long as we distribute at least 90% of our annual taxable income (computed without regard to the dividends paid deduction and excluding net capital gains).

If we fail to qualify as a REIT for any reason in a taxable year and applicable relief provisions do not apply, we will be subject to tax, including any applicable alternative minimum tax, on our taxable income at regular corporate rates. We will not be able to deduct distributions paid to our shareholders in any year in which we fail to qualify as a REIT. We also will be disqualified for the four taxable years following the year during which qualification is lost, unless we are entitled to relief under specific statutory provisions. Such an event could materially adversely affect our net income and net cash available for distribution to shareholders. However, we believe that we are organized and operate in such a manner as to qualify for treatment as a REIT for federal income tax purposes. No provision for federal income taxes has been made in our accompanying condensed consolidated financial statements. We will be subject to certain state and local taxes related to the operations of properties in certain locations. We are subject to certain state and local taxes related to the operations of properties in certain locations, which have been provided for in our accompanying condensed consolidated unaudited financial statements.

Critical Accounting Policies and Estimates

Our accounting policies have been established to conform with GAAP. The preparation of financial statements in conformity with GAAP requires us to use judgment in the application of accounting policies, including making estimates and assumptions. These judgments affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. If our judgment or interpretation of the facts and circumstances relating to various transactions had been different, it is possible that different accounting policies would have been applied, thus resulting in a different presentation of the financial statements. Additionally, other companies may utilize different estimates that may impact comparability of our results of operations to those of companies in similar businesses. A discussion of the accounting policies that management considers critical in that they involve significant management judgments, assumptions and estimates is included in our December 31, 2016 audited consolidated financial statements included in our Annual Report on Form 10-K, filed with the SEC on July 14, 2017. There have been no significant changes to our policies during 2017, except as disclosed in Note 2 of the Notes to the unaudited condensed Consolidated Financial Statements.

29

PART I – FINANCIAL INFORMATION (continued)

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Real Estate Investments

Real Estate Acquisition Valuation

The Company records acquisitions that meet the definition of a business as a business combination. If the acquisition does not meet the definition of a business, the Company records the acquisition as an asset acquisition. Under both methods, all assets acquired and liabilities assumed are measured based on their acquisition-date fair values. Transaction costs that are related to a business combination are charged to expense as incurred. Transaction costs that are related to an asset acquisition are capitalized as incurred.

The Company assesses the acquisition date fair values of all tangible assets, identifiable intangibles, and assumed liabilities using methods similar to those used by independent appraisers, generally utilizing a discounted cash flow analysis that applies appropriate discount and/or capitalization rates and available market information. Estimates of future cash flows are based on a number of factors, including historical operating results, known and anticipated trends, and market and economic conditions. The fair value of tangible assets of an acquired property considers the value of the property as if it were vacant.

The Company records above-market and below-market in-place lease values for acquired properties based on the present value (using a discount 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 noncancelable term of above-market in-place leases and for the initial term plus any extended term for any leases with below-market renewal options. The Company amortizes any recorded above-market or below-market lease values as a reduction or increase, respectively, to rental income over the remaining noncancelable terms of the respective lease, including any below-market renewal periods.

The Company estimates the value of tenant origination and absorption costs by considering the estimated carrying costs during hypothetical expected lease-up periods, considering current market conditions. In estimating carrying costs, the Company includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease up periods.

The Company amortizes the value of tenant origination and absorption costs to depreciation and amortization expense over the remaining noncancelable term of the respective lease.

Estimates of the fair values of the tangible assets, identifiable intangibles, and assumed liabilities require the Company to make significant assumptions to estimate market lease rates, property operating expenses, carrying costs during lease-up periods, discount rates, market absorption periods, and the number of years the property will be held for investment. The use of inappropriate assumptions would result in an incorrect valuation of the Company’s acquired tangible assets, identifiable intangibles and assumed liabilities, which would impact the amount of the Company’s net income (loss).

Revenue Recognition

The Company recognizes rental income from tenants under operating leases on a straight-line basis over the noncancelable term of the lease when collectability of such amounts is reasonable assured. Recognition of rental income on a straight-line basis includes the effects of rental abatements, lease incentives and fixed and determinable increases in lease payments over the lease term. If the lease provides for tenant improvements, we determine whether the tenant improvements, for accounting purposes, are owned by the tenant or by us. When we are the owner of the tenant improvements, the tenant is not considered to have taken physical possession or have control of the physical use of the leased asset until the tenant improvements are substantially completed. When the tenant is the owner of the tenant improvements, any tenant improvement allowance (including amounts that the tenant can take in the form of cash or a credit against its rent) that is funded is treated as a lease incentive and amortized as a reduction of revenue over the lease term. Tenant improvement ownership is determined based on various factors including, but not limited to: 

• whether the lease stipulates how a tenant improvement allowance may be spent;

• whether the amount of a tenant improvement allowance is in excess of market rates;

• whether the tenant or landlord retains legal title to the improvements at the end of the lease term;

• whether the tenant improvements are unique to the tenant or general-purpose in nature; and

• whether the tenant improvements are expected to have any residual value at the end of the lease.

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PART I – FINANCIAL INFORMATION (continued)

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Tenant reimbursements of real estate taxes, insurance, repairs and maintenance, and other operating expenses are recognized as revenue in the period the expenses are incurred and presented gross if the Company is the primary obligor and, with respect to purchasing goods and services from third-party suppliers, has discretion in selecting the supplier and bears the associated credit risk.

Fair Value of Financial Instruments

Under GAAP, the Company is required to measure certain financial instruments at fair value on a recurring basis. In addition, the Company is required to measure other non-financial and financial assets at fair value on a non-recurring basis (e.g., carrying value of impaired long-lived assets). Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The GAAP fair value framework uses a three-tiered approach. Fair value measurements are classified and disclosed in one of the following three categories:

Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities;

Level 2: quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and

Level 3: prices or valuation techniques where little or no market data is available that requires inputs that are both significant to the fair value measurement and unobservable.

When available, the Company utilizes quoted market prices from independent third-party sources to determine fair value and classifies such items in Level 1 or Level 2. In instances where the market for a financial instrument is not active, regardless of the availability of a nonbinding quoted market price, observable inputs might not be relevant and could require the Company to make a significant adjustment to derive a fair value measurement. Additionally, in an inactive market, a market price quoted from an independent third party may rely more on models with inputs based on information available only to that independent third party. When the Company determines the market for a financial instrument owned by the Company to be illiquid or when market transactions for similar instruments do not appear orderly, the Company uses several valuation sources (including internal or external valuations, discounted cash flow analysis and quoted market prices) and establishes a fair value by assigning weights to the various valuation sources. Additionally, when determining the fair value of liabilities in circumstances in which a quoted price in an active market for an identical liability is not available, the Company measures fair value using (i) a valuation technique that uses the quoted price of the identical liability when traded as an asset or quoted prices for similar liabilities or similar liabilities when traded as assets or (ii) another valuation technique that is consistent with the principles of fair value measurement, such as the income approach or the market approach.

Changes in assumptions or estimation methodologies can have a material effect on these estimated fair values. In this regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, may not be realized in an immediate settlement of the instrument.

The Company considers the following factors to be indicators of an inactive market: (i) there are few recent transactions, (ii) price quotations are not based on current information, (iii) price quotations vary substantially either over time or among market makers (for example, some brokered markets), (iv) indexes that previously were highly correlated with the fair values of the asset or liability are demonstrably uncorrelated with recent indications of fair value for that asset or liability, (v) there is a significant increase in implied liquidity risk premiums, yields, or performance indicators (such as delinquency rates or loss severities) for observed transactions or quoted prices when compared with the Company’s estimate of expected cash flows, considering all available market data about credit and other nonperformance risk for the asset or liability, (vi) there is a wide bid-ask spread or significant increase in the bid-ask spread, (vii) there is a significant decline or absence of a market for new issuances (that is, a primary market) for the asset or liability or similar assets or liabilities, and (viii) little information is released publicly (for example, a principal-to-principal market).

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PART I – FINANCIAL INFORMATION (continued)

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

The Company considers the following factors to be indicators of non-orderly transactions: (i) there was not adequate exposure to the market for a period before the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets or liabilities under current market conditions, (ii) there was a usual and customary marketing period, but the seller marketed the asset or liability to a single market participant, (iii) the seller is in or near bankruptcy or receivership (that is, distressed), or the seller was required to sell to meet regulatory or legal requirements (that is, forced), and (iv) the transaction price is an outlier when compared with other recent transactions for the same or similar assets or liabilities.

Commitments and Contingencies

We may be subject to certain commitments and contingencies with regard to certain transactions. See Note 9 to the unaudited condensed Consolidated Financial Statements for further detail.

Related-Party Transactions and Agreements

We have entered into an Advisory Agreement with our Advisor whereby we have agreed to pay certain fees to, or reimburse certain expenses of, our Advisor or its affiliates, such as acquisition fees and expenses, organization and offering costs, asset management fees, and reimbursement of certain operating costs. See Note 8 to the unaudited condensed Consolidated Financial Statements and the Company’s Annual Report on Form 10-K, filed with the SEC on July 14, 2017 for a further explanation of the various related-party transactions, agreements and fees.

Subsequent Events

Certain events occurred subsequent to March 31, 2017 through the filing date of this Quarterly Report on Form 10-Q. See Note 10 to the unaudited condensed Consolidated Financial Statements for further explanation.

Recent Accounting Pronouncements

See Note 2 to the unaudited condensed Consolidated Financial Statements for further explanation.

Off-Balance Sheet Arrangements

As of March 31, 2017, we had no material off-balance sheet arrangements that had or are reasonably likely to have a current or future effect on our financial condition, results of operations, liquidity, or capital resources.

ITEM 3. Quantitative and Qualitative Disclosure about Market Risk

Not applicable as the Company is a Smaller Reporting Company.

ITEM 4. Controls and Procedures

As of the end of the period covered by this report, management, including our principal executive officer and principal financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file and submit under the Exchange Act is processed, recorded, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Based upon, and as of the date of, the evaluation, our principal executive officer and principal financial officer concluded that the disclosure controls and procedures were not effective as of March 31, 2017 because of material weaknesses in our internal control over financial reporting described in Item 9A of our Annual Report on Form 10-K for the year ended December 31, 2016.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) that occurred during the three months ended March 31, 2017 that have materially affected, or are reasonably likely to affect our internal control over financial reporting.

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PART I – FINANCIAL INFORMATION (continued)

Remediation Plan

In connection with the audit of our consolidated financial statements for the year ended December 31, 2016, material weaknesses in our internal control over financial reporting were identified as previously disclosed in Item 9A of our Annual Report on Form 10-K for the year ended December 31, 2016. The material weaknesses identified related to (1) the lack of sufficient qualified resources to be able to produce accurate and complete financial statements and disclosures in a timely manner and (2) lack of established processes relating to the preparation and review of analyses and reconciliations necessary to execute a timely financial close resulting in accurate financial information. Management, and our Board of Directors, is committed to remediating the material weaknesses through hiring additional qualified resources, continued training of personnel, improving the structure and timeliness of our accounting close process and continuing to enhance our financial review controls. Accordingly, management is in the process of developing and implementing a plan to remediate the deficiencies in internal control as described in our Annual Report on Form 10-K for the year ended December 31, 2016. Specifically:

-Management has begun an evaluation of the resources required to be able to produce accurate and complete financial statements and disclosures in a timely manner.

-Management has begun to establish processes related to the preparation and review of analyses and reconciliations necessary to execute a timely financial close resulting in accurate financial information.

We intend to execute our remediation plan as soon as feasible. We will test the effectiveness of the new controls and after they operate effectively for a sufficient period of time, we will consider the material weaknesses remediated. There is no assurance, however, that the new controls will remediate the material weaknesses or ensure that the Company’s internal control over financial reporting will be effective in the future. If we are unable to remediate these material weaknesses, we may not be able to timely file our periodic reports with the SEC which will have a material adverse effect on our ability to provide accurate financial information.

PART II – OTHER INFORMATION

Item 1.        Legal Proceedings

The information disclosed under Legal Matters in Note 9 to the unaudited condensed Consolidated Financial Statements is incorporated herein by reference.

Item 1A.     Risk Factors

There have been no material changes to the risk factors set forth under “Risk Factors” in Item 1A of our December 31, 2016 audited financial statements included in our Annual Report on Form 10-K, as amended, filed with the SEC on July 14, 2017.

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PART II – OTHER INFORMATION (continued)

Item 2.        Unregistered Sales of Equity Securities and Use of Proceeds

During the three months ended March 31, 2017, we did not sell or issue any equity securities that were not registered under the Securities Act of 1933, as amended (the “Securities Act”).

Use of Proceeds from Registered Securities

The offering commenced on March 7, 2012 and terminated on July 20, 2016 with the exception of shares to be sold pursuant to the Plan.

As of March 31, 2017, we had sold 8,628,818 shares of common stock in the offering for gross proceeds of $86,288,180, including 440,853 shares of common stock under the Plan for gross offering proceeds of $4,408,532. See Note 8 to the Notes to the unaudited condensed Consolidated Financial Statements for information regarding certain reimbursements paid to our Sponsor and our Advisor.

Net proceeds available for investment after the payment of the costs described above were approximately $83,699,535. A portion of these proceeds, along with proceeds from debt financing, were used to make approximately $131,786,372 of investments in real estate, including the purchase price of our investments, deposits paid for future acquisitions, acquisition fees and expenses, and costs of leveraging each real estate investment.

See Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations —Distributions for a description of the sources that have been used to fund our distributions.

Issuer Redemptions of Equity Securities

During the three months ended March 31, 2017, we fulfilled repurchase requests and repurchased shares pursuant to our share repurchase program as follows:

(1) We generally repurchase shares approximately 15 days following the end of the applicable quarter in which requests were received.

(2) The share repurchase program is funded by and limited to proceeds realized from our sale of shares under the Plan. The maximum amount that may be repurchased is limited to 5% of the weighted average outstanding shares in the prior twelve months less the amounts repurchased during same twelve month period.The dollar value is as of the last day of the quarter presented. The dollar amount is calculated as (1)  the maximum number of shares that can be repurchased (5% of the weighted average number of shares outstanding during the prior twelve months reduced by the number of shares already repurchased multiplied by (2) the a per share price in cash equal to the lesser of (i) the net asset value per share, as calculated and published by our Advisor and (ii) the per share price paid for the shares by the redeeming shareholder. Furthermore, once the Company has published its NAV, the NAV per share is to be used in the calculation in place of the per share offering price. If the Company determines that sufficient funds aren’t available to fund the share repurchase program, it has the ability to repurchase the number of shares that it believes it has sufficient funds to repurchase. In addition, the Company’s board of trust managers may amend, suspend or terminate the share repurchase program without shareholder approval upon 30 days’ notice.  The Company’s board of trust managers may amend, suspend, or terminate the share repurchase program due to changes in law or regulation, or if the board of trust managers becomes aware of undisclosed material information that it believes should be publicly disclosed before shares are repurchased.

We currently intend to determine our NAV and NAV per share annually in January of each year as of December 31 of the prior year, beginning in January 2018 and calculated as of December 31, 2017. In addition, we may update our NAV at any time between our annual calculations of NAV to reflect significant events that we have determined have had a material impact on NAV. We will report the NAV per share of our common stock (a) in a Current Report on Form 8-K or in our annual or quarterly reports, all publicly filed with the SEC, or (b) in a separate written notice to the shareholders. We will also provide information about our NAV per share on our website (such information may be provided by means of a link to our public filings on the SEC’s website, www.sec.gov) and on our toll-free information line: (1-855-742-4862). In the event that our NAV and NAV per share change during the year, we will publish our new NAV per share no later than ten business days prior to the second-to-last business day of the month in which such adjustment occurs.

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PART II – OTHER INFORMATION (continued)

Item 3.        Defaults Upon Senior Securities

No events occurred during the three months ended March 31, 2017 that would require a response to this item.

Item 4.       Mine Safety Disclosures

Not applicable.

Item 5.       Other Information

No events occurred during the three months ended March 31, 2017 that would require a response to this item.

Item 6.       Exhibits

The exhibits listed on the Exhibit Index (following the signatures section of this Quarterly Report on Form 10-Q) are included herewith, or incorporated herein by reference.

SIGNATURES

Pursuant to the requirements Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.

Rich Uncles Real Estate Investment Trust I
(Registrant)
By:	/s/ HAROLD HOFER
Name:	Harold Hofer
Title:	Chief Executive Officer
By:	/s/ JEAN HO
Name:	Jean Ho
Title:	Chief Financial Officer (principal financial officer and accounting officer)

Date: August 14, 2017

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EXHIBIT INDEX

The following exhibits are included, or incorporated by reference, in this Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2017 (and are numbered in accordance with Item 601 of Regulation S-K).

Exhibit	Description
3.1	Amended and Restated Declaration of Trust of Rich Uncles Real Estate Investment Trust I*
3.2	Amendment to Amended and Restated Declaration of Trust of Rich Uncles Real Estate Investment Trust I*
3.3	Bylaws*
4.1	Form of Subscription Agreement for Shares of Rich Uncles Real Estate Investment Trust I*
4.2	Rich Uncles Real Estate Investment Trust I Dividend Reinvestment Plan*
10.1	Amended and Restated Advisory Agreement dated as of March 8, 2012 by and between Rich Uncles Real Estate Investment Trust I and Rich Uncles, LLC.*
10.2	Amendment No.1 to Amended and Restated Advisory Agreement.*
10.3	Indemnification Agreement dated February 7, 2017 between Rich Uncles Real Estate Investment Trust I, its Directors and Executive Officers, and Rich Uncles, LLC.*
10.4	Non-Solicitation Agreement dated February 8, 2017 between Rich Uncles Real Estate Investment Trust I and Rich Uncles, LLC.*
10.5	Code of Business Conduct and Ethics.*
10.6	Audit Committee Charter.*
21.1	List of Subsidiaries.*
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.**
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.**
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002.***
101.INS	XBRL INSTANCE DOCUMENT
101.SCH	XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT
101.CAL	XBRL TAXONOMY EXTENSION CALCULATION LINKBASE
101.DEF	XBRL TAXONOMY EXTENSION DEFINITION LINKBASE
101.LAB	XBRL TAXONOMY EXTENSION LABELS LINKBASE
101.PRE	XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE
*	Previously filed.
**	Filed herewith.
***	In accordance with Item 601 (b)(32) of Regulation S-K, this Exhibit is not deemed “filed” for purpose of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

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