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NOTES AND INTEREST RECEIVABLE
 6 Months Ended
Jun. 30, 2020
Receivables [Abstract]  
NOTES AND INTEREST RECEIVABLE

NOTE 5. 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, 2020 (dollars in thousands): 

 

    Maturity   Interest          
Borrower   Date   Rate     Amount    Security
Performing loans:                  
     Prospectus Endeavors 4, LLC   01/23   12.00%                                 5,907   Secured
     Prospectus Endeavors 6, LLC   10/22   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
     Forest Pines   11/20   5.00%                                 2,869   Secured
     Spyglass Apartments of Ennis, LP   11/20   5.00%                                 5,336   Secured
     Bellwether Ridge   11/20   5.00%                                 3,855   Secured
     Parc at Windmill Farms   11/20   5.00%                                 7,929   Secured
     Autumn Breeze Apts   10/21   5.00%                                 1,638   Secured
     Plum Tree   10/21   5.00%                                    658   Secured
     Ingleside   12/21   5.00%                                 2,181   Secured
     RNC   09/24   5.00%                                 8,853   Secured
     Revolving Line of Credit Steeple Crest   10/20   5.00%                                 6,665   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%                                 3,934   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. (Timbers of Terrell) (1)   12/32   12.00%                                 1,323   Secured
     Unified Housing Foundation, Inc. (1)   12/21   12.00%                               10,401   Unsecured
     Unified Housing Foundation, Inc. (1)   03/21   12.00%                                 5,314   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. (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%                                    497   Unsecured
     Unified Housing Foundation, Inc. (1)   05/23   12.00%                                 3,615   Unsecured
     RAH/PFBL 2020 Advisory Fee   03/23   12.00%                                      61   Secured
     RAI/UHF RWR I&II, Tivoli   03/23   12.00%                                 1,482   Secured
     RAI/UHF 2020 Advisory Fee   03/23   12.00%                                 4,792   Secured
     RAI/UHF Trails of WR Sale   03/23   12.00%                                    716   Secured
     RAI/FBH 2020 Advisory Fee   03/23   12.00%                                    317   Secured
     Realty Advisors Management, Inc. (1)   12/22   2.28%                               20,387   Unsecured
     One Realco Corporation   01/23   3.00%                                 7,000   Unsecured
     Other related party notes (1) (2)   Various   Various                                 4,078   Various secured interests
     Other non-related party notes   Various   Various                               11,724   Various secured interests
     Accrued interest                                       14,509    
Total Performing                                     180,146    
      Allowance for estimated losses                                      (12,557)    
Total    $                   167,589    

 

(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, 2020, we had mortgage loans and accrued interest receivable from related parties, net of allowances, totaling $98.2 million and recognized interest income of $4.4 million related to these notes receivables. During the quarter just ended, the Company collected $4.7 million and purchased from a related party $10.9 million of notes receivables with an interest rate of 12% and maturity date of March 2023.

 

The Company has various notes receivable from Unified Housing foundation, Inc. (“UHF”). UHF is determined to be a related party due to our significant investment in the performance of the collateral secured under the notes receivable. Payments are due from surplus cash flow from operations, sale or refinancing of the underlying properties. These notes are cross collateralized to the extent that any surplus cash available from any of the properties underlying these notes will be used to repay outstanding interest and principal for the remaining notes. Furthermore, any surplus cash available from any of the properties UHF owns, besides the properties underlying these notes, can be used to repay outstanding interest and principal for these notes. The allowance on the notes was a purchase allowance that was netted against principal balance at the time of the acquisition.