Real Estate Owned and Held-For-Sale

6 Months Ended

Jun. 30, 2015

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

Our real estate assets were comprised of three multifamily properties (the “Multifamily Portfolio”) and four hotel properties (the “Hotel Portfolio”) at June 30, 2015 and four multifamily properties and five hotel properties at December 31, 2014.

As of June 30, 2015 and December 31, 2014, the Multifamily Portfolio had a mortgage note payable of $27.2 million and $31.0 million, respectively. See Note 7 — “Debt Obligations” for further details.

Real Estate Owned

	June 30, 2015									December 31, 2014
	Multifamily Portfolio			Hotel Portfolio			Total			Multifamily Portfolio			Hotel Portfolio			Total
Land	$	5,538,844		$	7,093,651		$	12,632,495		$	5,538,844		$	9,393,651		$	14,932,495
Building and intangible assets	31,922,974			46,994,766			78,917,740			31,249,869			58,818,891			90,068,760
Less: accumulated depreciation and amortization	(8,420,932		)	(11,241,254		)	(19,662,186		)	(7,414,267		)	(12,661,347		)	(20,075,614		)

Real estate owned, net	$	29,040,886		$	42,847,163		$	71,888,049		$	29,374,446		$	55,551,195		$	84,925,641

As of June 30, 2015 and December 31, 2014, our Multifamily Portfolio had a weighted average occupancy rate of approximately 91% and 90%, respectively.

For the six months ended June 30, 2015 and 2014, our Hotel Portfolio had a weighted average occupancy rate of approximately 55% and 58%, respectively, a weighted average daily rate of approximately $96 and $91, respectively, and a weighted average revenue per available room of approximately $53 for both periods. The operation of the hotel properties are seasonal with the majority of revenues earned in the first two quarters of the calendar year.

Our real estate assets had restricted cash balances totaling $1.1 million and $1.7 million as of June 30, 2015 and December 31, 2014, respectively, due to escrow requirements.

Real Estate Held-For-Sale

In the second quarter of 2015, a property in the Hotel Portfolio with a carrying value of $11.2 million was reclassified from real estate owned to real estate held-for-sale due to a proposed sale. This sale transaction is expected to close in late 2015. In the first quarter of 2015, we sold a property in our Multifamily Portfolio as well as a property in the Hotel Portfolio classified as held-for-sale for a total of $18.8 million and recognized a gain of $4.0 million. There were no sales of property in the six months ended June 30, 2014.

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Revenue:
Property operating income	$	1,367,641	$	2,297,277	$	3,349,979	$	4,932,057

Expenses:
Property operating expense	1,016,112		1,747,434		2,323,404		3,512,305
Depreciation	212,020		440,710		436,326		873,168

Net income	$	139,509	$	109,133	$	590,249	$	546,584