Note 6 — Real Estate Owned and Held-For-Sale

Real Estate Owned

	September 30, 2014									December 31, 2013
	Multifamily Portfolio			Hotel Portfolio			Total			Multifamily Portfolio			Hotel Portfolio			Total
Land	$	5,538,844		$	10,893,651		$	16,432,495		$	11,382,579		$	10,893,651		$	22,276,230
Building and intangible assets	31,129,305			63,121,573			94,250,878			46,115,430			61,632,645			107,748,075
Less: accumulated depreciation and amortization	(7,077,163		)	(12,868,073		)	(19,945,236		)	(8,598,915		)	(9,707,213		)	(18,306,128		)
Real estate owned, net	$	29,590,986		$	61,147,151		$	90,738,137		$	48,899,094		$	62,819,083		$	111,718,177

The Company’s real estate owned assets were comprised of three multifamily properties (the “Multifamily Portfolio”) and five hotel properties (the “Hotel Portfolio”) at September 30, 2014.

In the third quarter of 2014, a property in the Multifamily Portfolio was sold to a third party for $3.1 million. In connection with this sale, the Company recorded a loss on sale of $0.2 million and a reduction of the mortgage note payable of $3.4 million. During the first quarter of 2014, the Company recorded an impairment loss of $0.3 million related to this property as a result of an impairment analysis based on the indicators of value from the market participants. In the third quarter of 2014, three properties in the Multifamily Portfolio were classified as held-for sale with a total carrying value of $26.4 million and a first lien mortgage of $23.8 million.

In the second quarter of 2014, a property in the Multifamily Portfolio with a carrying value of $11.4 million and a first lien mortgage of $11.0 million was reclassified from real estate held-for-sale to real estate owned, net as a proposed sale for this property failed to close and the property no longer met the requirements for classification as discontinued operations or real estate held-for-sale. In connection with this reclassification, the Company recorded depreciation of $0.3 million in the second quarter of 2014.

As of September 30, 2014 and December 31, 2013, the Multifamily Portfolio had mortgage note payable of $25.0 million and $42.7 million, respectively, and a weighted average occupancy rate of approximately 86% and 85%, respectively.

For the nine months ended September 30, 2014 and 2013, the Company’s Hotel Portfolio had a weighted average occupancy rate of approximately 57% and 56%, respectively, a weighted average daily rate of approximately $79 and $80, respectively, and a weighted average revenue per available room of approximately $44 and $45, respectively.

The Company’s real estate assets had restricted cash balances totaling $1.5 million and $0.9 million as of September 30, 2014 and December 31, 2013, respectively, due to escrow requirements.

Real Estate Held-For-Sale

As described above, during the third quarter of 2014, three properties in the Multifamily Portfolio were classified as held-for sale with a carrying value of $26.4 million and a first lien mortgage of $23.8 million. In the fourth quarter of 2014, one of the properties classified as held-for-sale with a carrying value of $11.0 million was sold for a gain of approximately $0.5 million.

The results of operations for properties classified as held-for-sale are summarized as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Revenue:
Property operating income	$	1,526,804		$	1,419,470		$	4,438,060		$	4,096,936

Expenses:
Property operating expense	1,213,009			1,183,182			3,546,261			3,539,459
Depreciation	392,451			344,087			1,150,675			990,790
Net loss	$	(78,656	)	$	(107,799	)	$	(258,876	)	$	(433,313	)