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NOTES AND INTEREST RECEIVABLE
 9 Months Ended
Sep. 30, 2019
Receivables [Abstract]  
NOTES AND INTEREST RECEIVABLE

NOTE 5. NOTES AND INTEREST RECEIVABLE

 

A portion of our assets is 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 September 30, 2019 (dollars in thousands):

 

  Maturity   Interest          
Borrower   Date   Rate     Amount   Security
Performing loans:                    
H198, LLC (Las Vegas Land)   01/20   12.00 %     5,907   Secured
H198, LLC (Legacy at Pleasant Grove Land)   10/19   12.00 %     496   Secured
Oulan-Chikh Family Trust   03/21   8.00 %     174   Secured
H198, LLC (McKinney Ranch Land)   09/20   6.00 %     4,554   Secured
RAI PFBL 2018 Purch Fee Note Weatherford   12/21   12.00 %     525   Secured
Forest Pines   11/20   5.00 %     2,675   Secured
Spyglass Apartments of Ennis, LP   11/19   5.00 %     5,287   Secured
Bellwether Ridge   05/20   5.00 %     3,706   Secured
Parc at Windmill Farms   05/20   5.00 %     6,513   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 %     6,369   Secured
Unified Housing Foundation, Inc. (Lakeshore Villas) (1)   12/32   12.00 %     2,732   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 %     2,000   Secured
Unified Housing Foundation, Inc. (Limestone Ranch) (1)   12/32   12.00 %     4,000   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 %     6,140   Secured
Unified Housing Foundation, Inc. (Trails at White Rock) (1)   12/32   12.00 %     3,815   Secured
Unified Housing Foundation, Inc. (1)   12/21   12.00 %     10,401   Unsecured
Unified Housing Foundation, Inc. (1)   06/20   12.00 %     11,074   Unsecured
Unified Housing Foundation, Inc. (1)   03/22   12.00 %     4,782   Unsecured
Unified Housing Foundation, Inc. (Lakeshore Villas) (1)   07/21   12.00 %     838   Secured
Unified Housing Foundation, Inc. (Limestone Ranch) (1)   07/21   12.00 %     773   Secured
Unified Housing Foundation, Inc. (Marquis at Vista Ridge) (1)   07/21   12.00 %     839   Secured
Unified Housing Foundation, Inc. (Timbers at the Park) (1)   07/21   12.00 %     432   Secured
Unified Housing Foundation, Inc. (Trails at White Rock) (1)   07/21   12.00 %     913   Secured
Unified Housing Foundation, Inc. (Bella Vista) (1)   08/21   12.00 %     212   Secured
Unified Housing Foundation, Inc. (1)   10/21   12.00 %     6,831   Unsecured
Unified Housing Foundation, Inc. (1)   12/32   12.00 %     1,349   Unsecured
Realty Advisors Management, Inc. (1)   12/24   2.28 %     20,387   Unsecured
One Realco Corporation   01/20   3.00 %     7,000   Unsecured
Other related party notes (1) (2)   Various   Various       4,019   Various secured interests
Other non-related party notes   Various   Various       17,308   Various secured interests
Accrued interest               11,048    
Total Performing             $ 172,468    
Allowance for estimated losses               (14,269 )  
Total             $ 158,199    

 

(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 September 30, 2019, we had mortgage loans and accrued interest receivable from related parties, net of allowances, totaling $120.3 million. We recognized interest income of $8.1 million related to these notes receivables.

 

The Company has distributed the interest of ‘Class A Limited Partners of Edina Park Plaza Associates’, Limited Partnership, of which a subsidiary of ARI was the general partner as a result of non-payment of certain promissory notes in the amount of $2.7 million upon maturity (Refer to Note 14 ‘Edina Park Class A Plaza Limited Partners’).

 

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.