Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 27, 2019 | Jun. 30, 2018 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Cottonwood Communities, Inc. | ||
Entity Central Index Key | 0001692951 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | true | ||
Entity Shell Company | false | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 1,730,513 | ||
Entity Public Float | $ 0 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Cash and cash equivalents | $ 3,406,175 | $ 200,000 |
Other assets | 317,279 | 0 |
Total assets | 3,723,454 | 200,000 |
Liabilities | ||
Related party payables | 128,617 | 0 |
Accounts payable and accrued liabilities | 29,146 | 0 |
Total liabilities | 157,763 | 0 |
Commitments and contingencies (Note 6) | ||
Stockholders' equity | ||
Preferred stock, $0.01 par value; 100,000,000 shares authorized | 0 | 0 |
Common stock, $0.01 par value, 1,000,000,000 shares authorized; 366,654 and 20,000 shares issued and outstanding at December 31, 2018 and 2017, respectively | 3,667 | 200 |
Additional paid-in capital | 3,662,233 | 199,800 |
Accumulated deficit | (100,209) | 0 |
Total stockholders' equity | 3,565,691 | 200,000 |
Total liabilities and stockholders' equity | $ 3,723,454 | $ 200,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 366,654 | 20,000 |
Common stock, shares outstanding (in shares) | 366,654 | 20,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Expenses | ||
General and administrative expenses | $ 100,209 | $ 0 |
Total expenses | 100,209 | 0 |
Net loss | $ (100,209) | $ 0 |
Weighted-average shares outstanding (in shares) | 32,053 | 20,000 |
Net loss per common share - basic and diluted (in dollars per share) | $ (3.13) | $ 0 |
Consolidated Statement of Stock
Consolidated Statement of Stockholder's Equity - USD ($) | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit |
Shares outstanding, beginning balance (in shares) at Dec. 31, 2016 | 20,000 | |||
Stockholders' equity, beginning balance at Dec. 31, 2016 | $ 200,000 | $ 200 | $ 199,800 | $ 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net loss | $ 0 | |||
Shares outstanding, ending balance (in shares) at Dec. 31, 2017 | 20,000 | 20,000 | ||
Stockholders' equity, ending balance at Dec. 31, 2017 | $ 200,000 | $ 200 | 199,800 | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of common stock (in shares) | 346,654 | |||
Issuance of common stock | 3,465,900 | $ 3,467 | 3,462,433 | |
Net loss | $ (100,209) | (100,209) | ||
Shares outstanding, ending balance (in shares) at Dec. 31, 2018 | 366,654 | 366,654 | ||
Stockholders' equity, ending balance at Dec. 31, 2018 | $ 3,565,691 | $ 3,667 | $ 3,662,233 | $ (100,209) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Operating activities | ||
Net loss | $ (100,209) | $ 0 |
Changes in operating assets and liabilities | ||
Other assets | (61,279) | 0 |
Related party payables | 128,617 | 0 |
Accounts payable and accrued liabilities | 29,146 | 0 |
Net cash used in operating activities | (3,725) | 0 |
Financing activities | ||
Issuance of common stock | 3,209,900 | 0 |
Net cash provided by financing activities | 3,209,900 | 0 |
Net increase in cash | 3,206,175 | 0 |
Cash at beginning of period | 200,000 | 200,000 |
Cash at end of period | 3,406,175 | 200,000 |
Supplemental schedule of non-cash financing activities | ||
Proceeds receivable for issuance of common stock | $ 256,000 | $ 0 |
Organization and Business
Organization and Business | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business | Organization and Business Cottonwood Communities, Inc. (the "Company") is a Maryland corporation formed on July 27, 2016 that intends to qualify as a real estate investment trust ("REIT"). The Company was formed to invest in multifamily apartment communities and real estate related assets located throughout the United States. The Company is the sole general partner of Cottonwood Communities O.P., LP, a Delaware limited partnership (the “Operating Partnership”). Substantially all of our business is conducted through the Operating Partnership. Unless the context indicates otherwise, the “Company,” “we,” “our” or “us” refers to Cottonwood Communities, Inc. and its consolidated subsidiaries, including the Operating Partnership. We are externally managed by Cottonwood Communities Management, LLC (our “advisor”), an affiliate of Cottonwood Residential O.P., LP ("CROP"), and have no employees. Refer to Note 8 for changes in the advisor that occurred in 2019. As of December 31, 2018 , we have neither purchased nor contracted to purchase any investments. Except as described in Note 8 , we have not identified any investment opportunities in which there is a reasonable probability we will invest. |
Capitalization
Capitalization | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Capitalization | Capitalization Our charter authorizes the issuance of up to 1,100,000,000 shares of capital stock, of which 1,000,000,000 shares are designated as common stock and 100,000,000 are designated as preferred stock. On December 2, 2016, the Company was capitalized with a $200,000 investment by CROP. On August 13, 2018, we registered with the Securities and Exchange Commission (the "SEC") an offering of up to $750,000,000 in shares of common stock, consisting of up to $675,000,000 in shares in our primary offering (the "Offering") and up to $75,000,000 in shares pursuant to our distribution reinvestment plan (the "DRP Offering”). The price for shares of common stock in our offering is $10.00 per share (with discounts available to certain categories of purchasers) and the price for shares of common stock in our DRP Offering is initially $10.00 per share, all without any upfront costs or expenses charged to the investor. Any offering-related expenses are paid by our advisor without reimbursement by us. The terms of the Offering require the Company to deposit all subscription proceeds in an escrow account with an escrow agent until we receive subscriptions aggregating at least $2,000,000 in shares of common stock (including shares purchased by the advisor, its affiliates and our directors and officers). On December 18, 2018, we satisfied the minimum offering requirement and our board of directors authorized the release of proceeds from escrow. As of December 31, 2018, we have issued and sold 346,654 shares of common stock in the Offering and received proceeds of $3,209,900 . |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements and related notes are prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles (“GAAP”). Principles of Consolidation The consolidated financial statements include the accounts of the Company and its consolidated subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Cash and cash equivalents Cash and cash equivalents consist of amounts the Company has on deposit with a major commercial financial institution. Income Taxes We intend to qualify as a REIT and to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, beginning with the year ending December 31, 2019. To qualify as a REIT, we must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of our taxable income to our stockholders. As a REIT, we generally are not subject to federal corporate income tax on that portion of our taxable income that is currently distributed to stockholders. If we fail to qualify as a REIT in any taxable year, we will be subject to federal income tax on our taxable income at regular corporate income tax rates and generally will not be permitted to qualify for treatment as a REIT for federal income tax purposes for the four taxable years following the year during which qualification is lost unless the Internal Revenue Service grants us relief under certain statutory provisions. Such an event could materially and adversely affect our net income and net cash available for distribution to stockholders. However, we intend to organize and operate in such a manner as to qualify for treatment as a REIT. As of December 31, 2018 , we had incurred a net operating loss of $100,209 . We had a deferred tax asset of approximately $25,000 associated with this net operating loss. This deferred tax asset was fully reserved for as we do not expect to realize the tax benefit due to the expectation that we will qualify for REIT status for the tax year ending December 31, 2019. Organization and Offering Costs Organization costs include all expenses incurred in connection with our formation, including but not limited to legal fees and other costs to incorporate the Company. Offering costs include all expenses incurred in connection with the Offering, including legal, accounting, printing, mailing and filing fees, escrow charges and transfer agent fees, dealer manager fees and selling commissions. All organization and offering costs are paid by our advisor. We will not incur any liability for or reimburse our advisor for any of these organizational and offering costs. As of December 31, 2018 , offering costs incurred by our advisor were approximately $1,513,000 . |
Related-Party Transactions
Related-Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | Related-Party Transactions Advisory Agreement On August 13, 2018, we entered an advisory agreement with our advisor. Per the terms of our advisory agreement, and in exchange for the fees discussed below, our advisor will make decisions related to the structuring, acquisition, management, financing and disposition of our assets in accordance with our investment objectives, guidelines, policies and limitations. Our advisor will also manage day-to-day operations, retain property managers, and perform other duties. These activities are all subject to oversight by our board of directors. Contingent Acquisition Fee After stockholders have received, or are deemed to have received (with respect to a merger or a listing), together as a collective group, aggregate distributions sufficient to provide a return of their invested capital, plus a cumulative, noncompounded annual return on their investment (a “Required Return”), our advisor will receive a contingent acquisition fee from us that is a percentage of the cost of investments acquired or originated by us, or the amount to be funded by us to acquire or originate loans, including acquisition and origination expenses and any debt attributable to such investments plus significant capital expenditures related to the development, construction or improvement of the investment as follows: 1% contingent acquisition fee if stockholders receive a 6% Required Return; and 2% additional contingent acquisition fee if stockholders receive a 13% Required Return. The contingent acquisition fee is immediately payable when each Required Return has been met. The fee is based on all assets we have acquired even if no longer in our portfolio. To the extent we acquire any assets after satisfying the return threshold, the contingent acquisition fee will be immediately payable at the closing of the acquisition. If our advisor agreement is terminated before August 13, 2028 for any reason other than our advisor’s fraud, willful misconduct or gross negligence, our advisor will receive a 3% contingent acquisition fee less the amount of any prior payments of contingent acquisition fees to our advisor. Acquisition Expense Reimbursement Subject to the limitations contained in our charter, our advisor will receive reimbursement from us for all out-of-pocket expenses incurred in connection with the selection and acquisition or origination of investments, whether or not we ultimately acquire the property or other real estate-related investment. Contingent Financing Fee After our stockholders have received, or are deemed to have received (with respect to a merger or a listing), together as a collective group, aggregate distributions sufficient to provide a return of their invested capital, plus a Required Return of 13% , our advisor will receive from us a contingent financing fee of 1% of the original principal amount of any financing obtained or assumed by us. The contingent financing fee is payable upon satisfying the return threshold with respect to any financing obtained or assumed by us prior to satisfaction of the return threshold and at the closing of new financing following satisfaction of the return threshold. If our advisor agreement is terminated before August 13, 2028 for any reason other than the advisor’s fraud, willful misconduct or gross negligence, the payment of the contingent financing fee will be immediately due and payable. Property Management Fee Our advisor will receive from us a property management fee in an amount up to 3.5% of the annual gross revenues of our multifamily apartment communities that it manages. Our advisor may subcontract the performance of its property management duties to third parties and will pay a portion of its property management fee to the third parties with whom it subcontracts for these services. Asset Management Fee Our advisor will receive an annual asset management fee, paid monthly, in an amount equal to 1.25% of gross assets as of the last day of the prior month. In this context, “gross assets” means (i) the gross book value of our assets until such time as our board of directors has established a net asset value of our assets, and (ii) after our board of directors has established a net asset value of our assets, the gross asset value of our assets based on the net asset value determination; provided that, the value of any assets acquired after our determination of a net asset value will be the gross book value of the assets until such assets are included in a net asset value determination. Economic Dependency Under various agreements, we have engaged or will engage our advisor or its affiliates to provide certain services that are essential to us, including asset management services and other administrative responsibilities for the Company including accounting services and investor relations. Because of these relationships, we are dependent upon our advisor. If these companies were unable to provide us with the respective services, we would be required to find alternative providers of these services. |
Economic Dependency
Economic Dependency | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Economic Dependency | Related-Party Transactions Advisory Agreement On August 13, 2018, we entered an advisory agreement with our advisor. Per the terms of our advisory agreement, and in exchange for the fees discussed below, our advisor will make decisions related to the structuring, acquisition, management, financing and disposition of our assets in accordance with our investment objectives, guidelines, policies and limitations. Our advisor will also manage day-to-day operations, retain property managers, and perform other duties. These activities are all subject to oversight by our board of directors. Contingent Acquisition Fee After stockholders have received, or are deemed to have received (with respect to a merger or a listing), together as a collective group, aggregate distributions sufficient to provide a return of their invested capital, plus a cumulative, noncompounded annual return on their investment (a “Required Return”), our advisor will receive a contingent acquisition fee from us that is a percentage of the cost of investments acquired or originated by us, or the amount to be funded by us to acquire or originate loans, including acquisition and origination expenses and any debt attributable to such investments plus significant capital expenditures related to the development, construction or improvement of the investment as follows: 1% contingent acquisition fee if stockholders receive a 6% Required Return; and 2% additional contingent acquisition fee if stockholders receive a 13% Required Return. The contingent acquisition fee is immediately payable when each Required Return has been met. The fee is based on all assets we have acquired even if no longer in our portfolio. To the extent we acquire any assets after satisfying the return threshold, the contingent acquisition fee will be immediately payable at the closing of the acquisition. If our advisor agreement is terminated before August 13, 2028 for any reason other than our advisor’s fraud, willful misconduct or gross negligence, our advisor will receive a 3% contingent acquisition fee less the amount of any prior payments of contingent acquisition fees to our advisor. Acquisition Expense Reimbursement Subject to the limitations contained in our charter, our advisor will receive reimbursement from us for all out-of-pocket expenses incurred in connection with the selection and acquisition or origination of investments, whether or not we ultimately acquire the property or other real estate-related investment. Contingent Financing Fee After our stockholders have received, or are deemed to have received (with respect to a merger or a listing), together as a collective group, aggregate distributions sufficient to provide a return of their invested capital, plus a Required Return of 13% , our advisor will receive from us a contingent financing fee of 1% of the original principal amount of any financing obtained or assumed by us. The contingent financing fee is payable upon satisfying the return threshold with respect to any financing obtained or assumed by us prior to satisfaction of the return threshold and at the closing of new financing following satisfaction of the return threshold. If our advisor agreement is terminated before August 13, 2028 for any reason other than the advisor’s fraud, willful misconduct or gross negligence, the payment of the contingent financing fee will be immediately due and payable. Property Management Fee Our advisor will receive from us a property management fee in an amount up to 3.5% of the annual gross revenues of our multifamily apartment communities that it manages. Our advisor may subcontract the performance of its property management duties to third parties and will pay a portion of its property management fee to the third parties with whom it subcontracts for these services. Asset Management Fee Our advisor will receive an annual asset management fee, paid monthly, in an amount equal to 1.25% of gross assets as of the last day of the prior month. In this context, “gross assets” means (i) the gross book value of our assets until such time as our board of directors has established a net asset value of our assets, and (ii) after our board of directors has established a net asset value of our assets, the gross asset value of our assets based on the net asset value determination; provided that, the value of any assets acquired after our determination of a net asset value will be the gross book value of the assets until such assets are included in a net asset value determination. Economic Dependency Under various agreements, we have engaged or will engage our advisor or its affiliates to provide certain services that are essential to us, including asset management services and other administrative responsibilities for the Company including accounting services and investor relations. Because of these relationships, we are dependent upon our advisor. If these companies were unable to provide us with the respective services, we would be required to find alternative providers of these services. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation As of December 31, 2018 , we were not subject to any material litigation nor were we aware of any material litigation threatened against us. Distribution Reinvestment Plan We have adopted a distribution reinvestment plan whereby stockholders may elect to have us apply their dividends and other distributions to the purchase of additional shares of common stock. Participants in the plan will acquire common stock at the per share price effective on the date of purchase (initially $10.00 ). Share Repurchase Program We have a share repurchase program whereby, on a quarterly basis, stockholders may request that we repurchase all or any portion of their shares. We may choose to repurchase all, some or none of the shares that have been requested to be repurchased at our discretion, subject to limitations in the share repurchase plan. The total amount of aggregate repurchases shares will be limited to 5% of the weighted average number of shares of common stock outstanding during the prior calendar year. In addition, during any calendar year, we may redeem only the number of shares that we could purchase with the amount of net proceeds from the sale of shares under our distribution reinvestment plan during the prior calendar year. Except for Exceptional Repurchases (as defined in the share repurchase program), the repurchase price is subject to the following discounts, depending on how long a redeeming stockholder has held each share: Share Purchase Anniversary Repurchase Price as a Percentage of Estimated Value (1) Less than 1 year No repurchase allowed 1 year - 2 years 85 % 3 years - 4 years 90 % 5 years and thereafter 95 % A stockholder’s death or complete disability, less than 2 years 95 % A stockholder’s death or complete disability, 2 years or more 100 % (1) For the purposes of the share repurchase program, the “estimated value per share” will initially be equal to the purchase price per share at which the original purchaser or purchasers of the shares bought its shares from us, and the purchase price per share will be adjusted to reflect any stock dividends, combinations, splits, recapitalizations or any similar transaction with respect to the shares outstanding. We plan to establish an estimated net asset value (“NAV”) per share of its common stock based on valuations of its assets and liabilities no later than 150 days following the second anniversary of the date of breaking escrow in the Offering, and annually thereafter. Upon our establishment of an estimated NAV per share, the estimated NAV per share will be the estimated value per share pursuant to the share repurchase program. No shares were redeemed during the years ended December 31, 2018 and 2017. Our board of directors may, in its sole discretion, amend, suspend or terminate our share repurchase program for any reason upon 15 days’ notice to our stockholders. |
Quarterly Financial Information
Quarterly Financial Information (Unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information (Unaudited) | Quarterly Financial Information (Unaudited) The following table presents our quarterly results: For the Three Months Ended March 31, 2018 June 30, 2018 September 30, 2018 December 31, 2018 Total revenues $ — $ — $ — $ — General and administrative expenses 963 1,109 — 98,137 Net loss $ 963 $ 1,109 $ — $ 98,137 Net loss per share, basic and diluted $ (0.05 ) $ (0.06 ) $ — $ (1.45 ) No activity incurred during the year ended December 31, 2017. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events We have evaluated subsequent events up until the date the consolidated financial statements are issued for recognition or disclosure and have determined there are none to be reported or disclosed in the consolidated financial statements other than those mentioned below. Status of the Offering As of March 27, 2019 , we had sold 1,710,513 shares of common stock in our public offering for aggregate gross offering proceeds of $ 17,078,127 . Included in these amounts were 1,802 shares of common stock sold pursuant to our distribution reinvestment plan for aggregate gross offering proceeds of $18,021 . Distributions We paid the following distributions for daily record dates for each day in the periods below: Period Amount December 18, 2018 - January 31, 2019 $28,390 February 1, 2019 - February 28, 2019 $29,890 On March 18, 2019, our board of directors declared a cash distribution in the amount of $0.02465753 per share on the outstanding shares of our common stock to stockholders of record as of March 18, 2019. Also on March 18, 2019, our board of directors declared cash distributions on the outstanding shares of our common stock based on daily record dates for the period from March 19, 2019 through March 31, 2019, which we expect to pay in April 2019; the period from April 1, 2019 through April 30, 2019, which we expect to pay in May 2019; and the period from May 1, 2019 through May 31, 2019, which we expect to pay in June 2019. Investors may choose to receive cash distributions or purchase additional shares through our distribution reinvestment plan. Distributions for these periods will be calculated based on stockholders of record each day during these periods at a rate of $0.00136986 per share per day. Restructuring of Advisor On March 28, 2019, we entered various agreements with our advisor and property manager, Cottonwood Communities Management, LLC ("CC Management"), and its affiliates, to restructure the ownership of the entity that provides our advisory services. Effective March 1, 2019, our advisory services are provided by a newly formed affiliate of our sponsor, CC Advisors III, LLC (“CC Advisors III”). Cottonwood Capital Management, Inc. (“Cottonwood Capital Management”) wholly owns CC Management and will continue to have an indirect ownership interest in the new advisor, CC Advisors III; however, two additional entities in which employees of Cottonwood Residential O.P., LP ("CROP") have an ownership interest will also have an indirect ownership interest in our new advisor. As our advisor will be an affiliate of our sponsor, our new advisor will continue to rely on the same expertise and experience of the sponsor and its affiliates to provide our advisory services. Property management services will continue to be provided by CC Management under separate property management agreements to be entered at the time we acquire a property. In addition, we consented to the assignment of the promotional interest held by Cottonwood Communities Investor, LLC, the sole limited partner of the Operating Partnership, to Cottonwood Communities Advisors Promote, LLC. Amendment to Operating Partnership Agreement On March 28, 2019, as general partner of the Operating Partnership, we amended the partnership agreement of Cottonwood Communities OP, LP to require that our stockholders, together as a collective group, instead of us as general partner, receive distributions sufficient to provide the return required before Cottonwood Communities Investor, LLC can receive the promotional interest in the Operating Partnership. In addition, the amendment provides that if the separate one-time payment is payable to Cottonwood Communities Investor, LLC following the termination or non-renewal of our advisory agreement for reasons unrelated to a liquidity event for our stockholders, the payment shall be in the form of an interest-bearing promissory note that is payable after our stockholders have actually received distributions in the amount required before Cottonwood Communities Investor, LLC can receive the promotional interest. In addition, if the promissory note has not been repaid prior to a liquidity event for our stockholders, the promissory note shall be paid in full on the date of or immediately prior to the liquidity event. As of March 1, 2019, pursuant to the agreements described above, the promotional interest is held by Cottonwood Communities Advisors Promote, LLC. Amendment to Dealer Manager Agreement On March 28, 2019, we amended our Dealer Manager Agreement with Cottonwood Communities Management, Inc. and Orchard Securities, LLC. The amendment provides that the reallowance of the dealer manager fee for a non-accounting marketing and due diligence allowance shall be limited to 1.00% of the gross proceeds from the primary offering, except in select cases when it may be up to 1.25% of the gross proceeds from the primary offering. In circumstances where 1.00% of offering proceeds are reallowed, the dealer manager fee will be 2.75% . Identification of Property for Investment On March 28, 2019, we entered into a purchase agreement with Luma at West Palm Beach, LLC, an unaffiliated third party, to acquire Luma at West Palm Beach, a 245 -unit, elevator-serviced, concrete and stucco community in West Palm Beach, Florida. The purchase price is $67,000,000 , of which $1,000,000 was provided in non-refundable earnest money upon execution of the purchase agreement. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements and related notes are prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles (“GAAP”). |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its consolidated subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. |
Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents consist of amounts the Company has on deposit with a major commercial financial institution. |
Income Taxes | Income Taxes We intend to qualify as a REIT and to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, beginning with the year ending December 31, 2019. To qualify as a REIT, we must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of our taxable income to our stockholders. As a REIT, we generally are not subject to federal corporate income tax on that portion of our taxable income that is currently distributed to stockholders. If we fail to qualify as a REIT in any taxable year, we will be subject to federal income tax on our taxable income at regular corporate income tax rates and generally will not be permitted to qualify for treatment as a REIT for federal income tax purposes for the four taxable years following the year during which qualification is lost unless the Internal Revenue Service grants us relief under certain statutory provisions. Such an event could materially and adversely affect our net income and net cash available for distribution to stockholders. However, we intend to organize and operate in such a manner as to qualify for treatment as a REIT. As of December 31, 2018 , we had incurred a net operating loss of $100,209 . We had a deferred tax asset of approximately $25,000 associated with this net operating loss. This deferred tax asset was fully reserved for as we do not expect to realize the tax benefit due to the expectation that we will qualify for REIT status for the tax year ending December 31, 2019. |
Organization and Offering Costs | Organization and Offering Costs Organization costs include all expenses incurred in connection with our formation, including but not limited to legal fees and other costs to incorporate the Company. Offering costs include all expenses incurred in connection with the Offering, including legal, accounting, printing, mailing and filing fees, escrow charges and transfer agent fees, dealer manager fees and selling commissions. All organization and offering costs are paid by our advisor. We will not incur any liability for or reimburse our advisor for any of these organizational and offering costs. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Repurchase Program Discounts | Except for Exceptional Repurchases (as defined in the share repurchase program), the repurchase price is subject to the following discounts, depending on how long a redeeming stockholder has held each share: Share Purchase Anniversary Repurchase Price as a Percentage of Estimated Value (1) Less than 1 year No repurchase allowed 1 year - 2 years 85 % 3 years - 4 years 90 % 5 years and thereafter 95 % A stockholder’s death or complete disability, less than 2 years 95 % A stockholder’s death or complete disability, 2 years or more 100 % (1) For the purposes of the share repurchase program, the “estimated value per share” will initially be equal to the purchase price per share at which the original purchaser or purchasers of the shares bought its shares from us, and the purchase price per share will be adjusted to reflect any stock dividends, combinations, splits, recapitalizations or any similar transaction with respect to the shares outstanding. We plan to establish an estimated net asset value (“NAV”) per share of its common stock based on valuations of its assets and liabilities no later than 150 days following the second anniversary of the date of breaking escrow in the Offering, and annually thereafter. Upon our establishment of an estimated NAV per share, the estimated NAV per share will be the estimated value per share pursuant to the share repurchase program. |
Quarterly Financial Informati_2
Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of Quarterly Results | The following table presents our quarterly results: For the Three Months Ended March 31, 2018 June 30, 2018 September 30, 2018 December 31, 2018 Total revenues $ — $ — $ — $ — General and administrative expenses 963 1,109 — 98,137 Net loss $ 963 $ 1,109 $ — $ 98,137 Net loss per share, basic and diluted $ (0.05 ) $ (0.06 ) $ — $ (1.45 ) |
Subsequent Events (Tables)
Subsequent Events (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Summary of Distributions | We paid the following distributions for daily record dates for each day in the periods below: Period Amount December 18, 2018 - January 31, 2019 $28,390 February 1, 2019 - February 28, 2019 $29,890 |
Organization and Business (Deta
Organization and Business (Details) | Dec. 31, 2018employee |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of employees | 0 |
Capitalization (Details)
Capitalization (Details) - USD ($) | Aug. 13, 2018 | Dec. 02, 2016 | Dec. 31, 2018 | Dec. 31, 2017 |
Subsidiary, Sale of Stock [Line Items] | ||||
Shares of capital stock authorized (in shares) | 1,100,000,000 | |||
Shares of common stock authorized (in shares) | 1,000,000,000 | 1,000,000,000 | ||
Shares of preferred stock authorized (in shares) | 100,000,000 | 100,000,000 | ||
IPO | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Aggregate value of shares offered (up to) | $ 750,000,000 | |||
Share price (in dollars per share) | $ 10 | |||
Primary Offering | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Aggregate value of shares offered (up to) | $ 675,000,000 | |||
Minimum amount of subscription proceeds to be deposited into escrow account until released | 2,000,000 | |||
Number of shares issued and sold (in shares) | 346,654 | |||
Proceeds from the Offering | $ 3,209,900 | |||
Distribution Reinvestment Plan | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Aggregate value of shares offered (up to) | $ 75,000,000 | |||
Share price (in dollars per share) | $ 10 | $ 10 | ||
CROP | Affiliated Entity | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Proceeds from investment by CROP | $ 200,000 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Subsidiary, Sale of Stock [Line Items] | ||||||
Net operating loss | $ 98,137 | $ 0 | $ 1,109 | $ 963 | $ 100,209 | $ 0 |
Deferred tax asset | 25,000 | 25,000 | ||||
Cottonwood Communities Management, LLC | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Offering costs incurred | $ 1,513,000 | $ 1,513,000 |
Related-Party Transactions (Det
Related-Party Transactions (Details) - Cottonwood Communities Management, LLC - Affiliated Entity | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transaction [Line Items] | |
Contingent acquisition fee | 1.00% |
Shareholders' required return to receive contingent acquisition fee | 6.00% |
Additional contingent acquisition fee | 2.00% |
Shareholders' required return to receive additional contingent acquisition fee | 13.00% |
Contingent acquisition fee to be paid to advisor upon termination (as a percent) | 3.00% |
Contingent financing fee (as a percent) | 1.00% |
Property management fee (as a percent) | 3.50% |
Annual asset management fee (as a percent) | 1.25% |
Commitments and Contingencies -
Commitments and Contingencies - Distribution Reinvestment Plan (Details) - $ / shares | Dec. 31, 2018 | Aug. 13, 2018 |
Distribution Reinvestment Plan | ||
Subsidiary, Sale of Stock [Line Items] | ||
Share price (in dollars per share) | $ 10 | $ 10 |
Commitments and Contingencies_2
Commitments and Contingencies - Share Repurchase Program (Details) - shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Percentage of weighted average number of shares of common stock outstanding authorized for repurchase | 5.00% | |
Share Repurchase Program [Line Items] | ||
Maximum valuation term used for determining the NAV following the second anniversary of the date of breaking escrow in the Offering | 150 days | |
Period of notice required for repurchase program termination | 15 days | |
Number of shares redeemed (in shares) | 0 | 0 |
1 year - 2 years | ||
Share Repurchase Program [Line Items] | ||
Repurchase price as a percentage of estimated value | 85.00% | |
3 years - 4 years | ||
Share Repurchase Program [Line Items] | ||
Repurchase price as a percentage of estimated value | 90.00% | |
5 years and thereafter | ||
Share Repurchase Program [Line Items] | ||
Repurchase price as a percentage of estimated value | 95.00% | |
A stockholder’s death or complete disability, less than 2 years | ||
Share Repurchase Program [Line Items] | ||
Repurchase price as a percentage of estimated value | 95.00% | |
A stockholder’s death or complete disability, 2 years or more | ||
Share Repurchase Program [Line Items] | ||
Repurchase price as a percentage of estimated value | 100.00% |
Quarterly Financial Informati_3
Quarterly Financial Information (Unaudited) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | ||||||
Total revenues | $ 0 | $ 0 | $ 0 | $ 0 | ||
General and administrative expenses | 98,137 | 0 | 1,109 | 963 | $ 100,209 | $ 0 |
Net loss | $ 98,137 | $ 0 | $ 1,109 | $ 963 | $ 100,209 | $ 0 |
Net loss per share, basic and diluted (in dollars per share) | $ (1.45) | $ 0 | $ (0.06) | $ (0.05) | $ (3.13) | $ 0 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - Subsequent event | Mar. 28, 2019USD ($)unit | Mar. 27, 2019USD ($)shares |
Subsequent Event [Line Items] | ||
Reallowance of dealer manager fee for a non-accounting marketing and due diligence allowance, percent of gross proceeds from primary offering | 1.00% | |
Reallowance of dealer manager fee for a non-accounting marketing and due diligence allowance, percent of gross proceeds from primary offering, maximum | 1.25% | |
Dealer manager fee | 2.75% | |
Number of units | unit | 245 | |
Payments to acquire real estate | $ 67,000,000 | |
Payments To acquire real estate, non-refundable earnest money | $ 1,000,000 | |
IPO | ||
Subsequent Event [Line Items] | ||
Number of shares issued and sold (in shares) | shares | 1,710,512.702 | |
Proceeds from public offering | $ 17,078,127 | |
Distribution Reinvestment Plan | ||
Subsequent Event [Line Items] | ||
Number of shares issued and sold (in shares) | shares | 1,802.1 | |
Proceeds from public offering | $ 18,021 |
Subsequent Events - Distributio
Subsequent Events - Distributions (Details) - Subsequent event - USD ($) | Mar. 18, 2019 | Feb. 28, 2019 | Jan. 31, 2019 |
Subsequent Event [Line Items] | |||
Distributions | $ 29,890 | $ 28,390 | |
Cash distribution declared (in dollars per share) | $ 0.02465753 | ||
Common stock, dividend rate (in dollars per share) | $ 0.00136986 |