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NOTES AND INTEREST RECEIVABLE
 6 Months Ended
Jun. 30, 2018
Receivables [Abstract]  
NOTES AND INTEREST RECEIVABLE

NOTE 4. 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 guarantees, 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.

 

Below is a summary of our notes receivable as of June 30, 2018 (dollars in thousands):

 

Borrower   Maturity Date   Interest Rate   Amount     Security
Performing loans:                      
H198, LLC (Las Vegas Land)   01/20     12.00%   $ 5,907     Secured
Leman Development, Ltd (2)   N/A     0.00%     1,500     Unsecured
Oulan-Chikh Family Trust   03/21     8.00%     174     Secured
H198, LLC (McKinney Ranch Land)   09/18     6.00%     4,554     Secured
2818 Ventures LLC (Forest Pines)   11/18     5.00%     2,223     Secured
ABC Land & Development (Mandahl Bay)   05/38     6.00%     1,735     Secured
Unified Housing Foundation, Inc. (Echo Station) (1)   12/32     12.00%     1,481     Secured
Unified Housing Foundation, Inc. (Inwood on the Park) (1)   12/32     12.00%     3,639     Secured
Unified Housing Foundation, Inc. (Kensington Park) (1)   12/32     12.00%     3,933     Secured
Unified Housing Foundation, Inc. (Lakeshore Villas) (1)   12/32     12.00%     2,000     Secured
Unified Housing Foundation, Inc. (Lakeshore Villas) (1)   12/32     12.00%     9,101     Secured
Unified Housing Foundation, Inc. (Limestone Ranch) (1)   12/32     12.00%     1,953     Secured
Unified Housing Foundation, Inc. (Limestone Ranch) (1)   12/32     12.00%     6,000     Secured
Unified Housing Foundation, Inc. (Reserve at White Rock Phase I) (1)   12/32     12.00%     2,485     Secured
Unified Housing Foundation, Inc. (Reserve at White Rock Phase II) (1)   12/32     12.00%     2,555     Secured
Unified Housing Foundation, Inc. (Timbers of Terrell) (1)   12/32     12.00%     1,323     Secured
Unified Housing Foundation, Inc. (Tivoli) (1)   12/32     12.00%     7,965     Secured
Unified Housing Foundation, Inc. (Trails at White Rock) (1)   12/32     12.00%     3,815     Secured
Unified Housing Foundation, Inc. (1)   12/18     12.00%     3,994     Unsecured
Unified Housing Foundation, Inc. (1)   12/18     12.00%     6,407     Unsecured
Unified Housing Foundation, Inc. (1)   06/20     12.00%     5,760     Unsecured
Unified Housing Foundation, Inc. (1)   03/21     12.00%     5,314     Unsecured
One Realco Corporation (1,2)   01/20     3.00%     7,000     Unsecured
Realty Advisors Management, Inc. (1)   12/19     2.28%     20,387     Unsecured
Other related party notes   Various     Various     1,349     Various secured interests
Other related party notes   Various     Various     510     Various unsecured interests
Other non-related party notes   Various     Various     3,466     Various secured interests
Other non-related party notes   Various     Various     14,639     Various unsecured interests
Accrued interest               11,108      
Total Performing             $ 142,277      
Allowance for estimated losses               (15,770 )    
                       
Total             $ 126,507      

 

(1) Related party notes

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

 

We invest in mortgage loans, secured by mortgages that are subordinate to one or more prior liens either on the fee or a leasehold interest in real estate. Recourse on such loans ordinarily includes the real estate on which the loan is made, other collateral and guarantees.

 

At June 30, 2018, we had mortgage loans and accrued interest receivable from related parties, net of allowances, totaling $104.7 million. We recognized interest income of $4.9 million related to these notes receivables.

 

The Company has various notes receivable from Unified Housing Foundation, Inc. (“UHF”) and Foundation for Better Housing, Inc. (“FBH”). UHF and FBH are determined to be related parties due to our reliance upon the performance of the collateral secured under the notes receivable. Payments are due from surplus cash flow of operations of the properties. A sale or refinance of any of the properties underlying these notes will be used to repay outstanding interest and principal for the remaining notes for the specific borrower. These notes are cross-collateralized for the specific borrower, but to the extent cash is received from a specific UHF or FBH property, it is applied first 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.