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NOTES AND INTEREST RECEIVABLE
 3 Months Ended
Mar. 31, 2014
NOTES AND INTEREST RECEIVABLE  
NOTES AND INTEREST RECEIVABLE

NOTE 3. NOTES AND INTEREST RECEIVABLE

 

A portion of our assets are invested in mortgage notes receivable, principally secured by real estate. We may originate mortgage loans in conjunction with providing purchase money financing of property sales. Notes receivable are generally collateralized by real estate or interests in real estate and personal guarantees of the borrower and, unless noted otherwise, are so secured. Management intends to service and hold for investment the mortgage notes in our portfolio. A majority of the notes receivable provide for principal to be paid at maturity.  Our mortgage notes receivable consist of first, wraparound and junior mortgage loans (dollars in thousands):

 

 

 

 

 

 

 

 

 

Maturity

 

Interest

 

 

 

 

Borrower

 

 

 

 

 

 

Date

 

Rate

 

Amount

 

Security

Performing loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

     Miscellaneous non-related party notes

 

 

Various

 

Various

 

 $           3,297

 

Various secured interests

 

     Miscellaneous related party notes (1)

 

 

Various

 

Various

 

              3,441

 

Various secured interests

 

     One Realco Corporation (1) (2)

 

 

01/17

 

3.00%

 

              7,000

 

Unsecured

 

     Realty Advisors Management, Inc. (1)

 

 

12/16

 

2.20%

 

            20,387

 

Unsecured

 

     S Breeze I-V, LLC

 

 

 

 

06/14

 

5.00%

 

              3,238

 

6% Class A and 25% Class B Limited Partner Interests

 

     Woodhaven-Hawthorn, Inc. (1)

 

 

10/19

 

5.50%

 

              1,028

 

Unsecured

 

     Unified Housing Foundation, Inc. (Cliffs of El Dorado) (1)

 

12/32

 

12.00%

 

              2,097

 

100% Membership Interest in Unified Housing of McKinney, LLC

 

     Unified Housing Foundation, Inc. (Echo Station) (1)

 

12/32

 

12.00%

 

              1,481

 

100% Membership Interest in Unified Housing of Temple, LLC

 

     Unified Housing Foundation, Inc. (Inwood on the Park) (1)

 

12/32

 

12.00%

 

              5,059

 

100% Membership Interest in Unified Housing Inwood, LLC

 

     Unified Housing Foundation, Inc. (Kensington Park) (1)

 

12/32

 

12.00%

 

              3,936

 

100% Membership Interest in Unified Housing Kensington, LLC

 

     Unified Housing Foundation, Inc. (Lakeshore Villas) (1)

 

12/32

 

12.00%

 

              2,000

 

Unsecured

 

     Unified Housing Foundation, Inc. (Lakeshore Villas) (1)

 

12/32

 

12.00%

 

              9,096

 

Membership interest in Housing for Seniors of Humble, LLC

 

     Unified Housing Foundation, Inc. (Limestone Canyon) (1)

 

12/32

 

12.00%

 

              3,057

 

100% Membership Interest in Unified Housing of Austin, LLC

 

     Unified Housing Foundation, Inc. (Limestone Canyon) (1)

 

12/32

 

12.00%

 

              4,663

 

100% Membership Interest in Unified Housing of Austin, LLC

 

     Unified Housing Foundation, Inc. (Limestone Ranch) (1)

 

12/32

 

12.00%

 

              2,250

 

100% Membership Interest in Unified Housing of Vista Ridge, LLC

 

     Unified Housing Foundation, Inc. (Limestone Ranch) (1)

 

12/32

 

12.00%

 

              6,000

 

100% Membership Interest in Unified Housing of Vista Ridge, LLC

 

     Unified Housing Foundation, Inc. (Parkside Crossing) (1)

 

12/32

 

12.00%

 

              2,272

 

100% Membership Interest in Unified Housing of Parkside Crossing, LLC

 

     Unified Housing Foundation, Inc. (Sendero Ridge) (1)

 

12/32

 

12.00%

 

              5,174

 

100% Membership Interest in Unified Housing of Sendero Ridge, LLC

 

     Unified Housing Foundation, Inc. (Sendero Ridge) (1)

 

12/32

 

12.00%

 

              4,812

 

100% Membership Interest in Unified Housing of Sendero Ridge, LLC

 

     Unified Housing Foundation, Inc. (Timbers at the Park) (1)

 

12/32

 

12.00%

 

              1,323

 

100% Membership Interest in Unified Housing of Terrell, LLC

 

     Unified Housing Foundation, Inc. (Tivoli) (1)

 

12/32

 

12.00%

 

              7,966

 

100% Membership Interest in Unified Housing of Tivoli, LLC

 

     Unified Housing Foundation, Inc. (Reserve at White Rock Phase I) (1)

12/32

 

12.00%

 

              2,485

 

100% Membership Interest in Unified Housing of Harvest Hill I, LLC

 

     Unified Housing Foundation, Inc. (Reserve at White Rock Phase II) (1)

12/32

 

12.00%

 

              2,555

 

100% Membership Interest in Unified Housing of Harvest Hill, LLC

 

     Unified Housing Foundation, Inc. (Trails at White Rock) (1)

 

12/32

 

12.00%

 

              3,815

 

100% Membership Interest in Unified Housing of Harvest Hill III, LLC

 

     Unified Housing Foundation, Inc. (1)

 

 

12/13

 

5.00%

 

              6,000

 

Unsecured

 

     Unified Housing Foundation, Inc. (1)

 

 

12/15

 

12.00%

 

            17,928

 

Unsecured

 

     Unified Housing Foundation, Inc. (1)

 

 

12/16

 

12.00%

 

              3,657

 

Unsecured

 

     Foundation for Better Housing, Inc. (Preserve at Pecan Pointe) (1)

03/19

 

12.00%

 

              1,810

 

Unsecured

 

     Foundation for Better Housing, Inc. (Preserve at Pecan Pointe) (1)

03/17

 

12.00%

 

              1,156

 

Unsecured

 

     Accrued interest

 

 

 

 

 

 

 

 

              6,687

 

 

Total Performing

 

 

 

 

 

 

 

 

 

 $       145,670

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Performing loans:

 

 

 

 

 

 

 

 

 

 

 

 

     Leman Development, Ltd (2)

 

 

 

07/11

 

7.00%

 

              1,500

 

Unsecured

 

     Tracy Suttles (2)

 

 

 

 

12/11

 

0.00%

 

              1,077

 

Unsecured

 

     Miscellaneous non-related party notes

 

 

Various

 

Various

 

                 507

 

Various secured interests

 

     Accrued interest

 

 

 

 

 

 

 

 

                   45

 

 

Total Non-Performing

 

 

 

 

 

 

 

 

 $           3,129

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Allowance for doubtful accounts

 

 

 

 

 

 

          (19,579)

 

 

Total

 

 

 

 

 

 

 

 

 

 

 $       129,220

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 (1)  Related party notes

 

 

 

 

 

 

 

 

 

 

 

 (2)  An allowance was taken for estimated losses at full value of note

 

 

 

 

 

 

 

 

At March 31, 2014, we had junior mortgage loans and accrued interest receivable from related parties, net of allowances, totaling $122.3 million. We recognized interest income of $3.1 million related to these notes receivables.

 

The Company has various notes receivable from Unified Housing Foundation, Inc. (“UHF”).  UHF is determined to be a related party to the Company due to our significant investment in the performance of the collateral secured under the notes receivable.  Payments are due from surplus cash flow of operations.  Sale or refinance of any of the properties underlying these notes will be used to repay outstanding interest and principal for the remaining notes.  These notes are cross-collateralized but to the extent cash is received from a specific UHF property, it is applied against any outstanding interest for the related-property note.  The allowance on the UHF notes was a purchase allowance that was netted against the notes when acquired.

 

 On March 31, 2014, TCI received $4.0 million of notes and accrued interest receivable from Foundation for Better Housing, Inc. (“FBH”).  The notes accrue interest at 12%.  Of these receivables, $0.8 million will mature in December 2015, $1.4 million in March 2017 and $1.8 million in March 2019.