10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark one)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2016

Or

[    ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission File Number: 000-51892

VESTIN REALTY MORTGAGE II, INC.

(Exact name of registrant as specified in its charter)

MARYLAND	61-1502451
(State or Other Jurisdiction of	(I.R.S. Employer
Incorporation or Organization)	Identification No.)

8880 W. SUNSET ROAD, SUITE 200, LAS VEGAS, NEVADA 89148

(Address of Principal Executive Offices)  (Zip Code)

Registrant's Telephone Number: 702.227.0965

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  [X]    No   [   ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes  [ X ]    No   [   ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer [   ]	Accelerated filer [   ]
Non-accelerated filer [   ] (Do not check if a smaller reporting company)	Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  [   ]    No   [X]

As of November 14, 2016, there were 2,384,179 shares of the Company's Common Stock outstanding.

TABLE OF CONTENTS
		Page
Item 1.	Condensed Consolidated Financial Statements (unaudited)	1
	Condensed Consolidated Balance Sheets as of September 30, 2016 (unaudited) and December 31, 2015	1
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2016 and 2015 (unaudited)	2
	Condensed Consolidated Statements of Other Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2016 and 2015 (unaudited)	3
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended Nine 30, 2016 and 2015 (unaudited)	4
	Notes to Condensed Consolidated Financial Statements (unaudited)	5
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	27
Item 4.	Controls and Procedures	37
Part II	OTHER INFORMATION
Item 1.	Legal Proceedings	39
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39
Item 6.	Exhibits	40
	SIGNATURES	41
	Exhibit 31.1
	Exhibit 31.2
	Exhibit 32

PART I - FINANCIAL INFORMATION

ITEM 1

VESTIN REALTY MORTGAGE II, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
	September 30, 2016			December 31, 2015
	(Unaudited)
Assets
Cash and cash equivalents	$	5,163,000		$	4,228,000
Prepaid expenses		315,000			323,000
Investment in marketable securities - related party		455,000			137,000
Interest and other receivables		163,000			42,000
Investment in MVP REIT II		327,000			325,000
Investments in Delaware Statutory Trusts		3,063,000			1,800,000
Notes receivable, net of allowance of $1,086,000 and $1,099,000 at September 30, 2016 and December 31, 2015, respectively		--			--
Investment in real estate loans, net of allowance for loan losses of $2,450,000 at September 30, 2016 and December 31, 2015.		5,447,000			2,161,000
Fixed assets, net of accumulated depreciation of $2,000 and $1,000 at September 30, 2016 and December 31, 2015, respectively		18,000			21,000
Due from related parties		865,000			408,000
Assets held for sale		--			44,545,000
Total assets	$	15,816,000		$	53,990,000
LIABILITIES AND EQUITY
Liabilities
Accounts payable and accrued liabilities	$	418,000		$	928,000
Deferred gain on sale of assets held for sale		620,000			--
Due to related parties		7,832,000			5,265,000
Note payable		84,000			--
Liabilities related to assets held for sale		--			30,306,000
Total liabilities		8,954,000			36,499,000
Commitments and contingencies
Equity
Vestin Realty Mortgage II, Inc. stockholders' equity:
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding		--			--
Treasury stock, at cost, 0 shares at September 30, 2016 and December 31, 2015		--			--
Common stock, $0.0001 par value; 100,000,000 shares authorized; 2,384,179 and 2,472,089 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively		--			--
Additional paid-in capital		266,241,000			266,576,000
Accumulated deficit		(256,843,000	)		(252,997,000	)
Accumulated other comprehensive income		317,000			--
Total Vestin Realty Mortgage II, Inc. stockholders' equity		9,715,000			13,579,000
Non-controlling interest		(2,853,000	)		3,912,000
Total equity		6,862,000			17,491,000
Total liabilities and equity	$	15,816,000		$	53,990,000

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

-1-

VESTIN REALTY MORTGAGE II, INC.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(UNAUDITED)

	For The Three Months Ended September 30,						For The Nine Months Ended September 30,
	2016			2015			2016			2015
Revenues
Interest income from investment in real estate loans	$	236,000		$	47,000		$	655,000		$	570,000
Gain related to pay off of real estate loan, including recovery of allowance for loan loss		--			--			--			1,623,000
Gain related to pay off of notes receivable, including recovery of allowance for notes receivable		--			513,000			13,000			539,000
Acquisition fee income		735,000			29,000			1,982,000			1,331,000
Advisor fee income		293,000			164,000			840,000			372,000
Total revenues		1,264,000			753,000			3,490,000			4,435,000
Operating expenses
Management fees – related party		274,000			274,000			823,000			822,000
MVP REIT II Organization and offering cost		--			436,000			2,000			1,015,000
Wages and benefits		675,000			884,000			1,847,000			2,598,000
Interest expense		1,000			1,000			3,000			2,000
Acquisition expense		--			--			--			1,000
Depreciation		--			1,000			2,000			1,000
Professional fees		187,000			264,000			806,000			814,000
Seminars		307,000			450,000			1,029,000			1,146,000
Consulting fees		17,000			41,000			77,000			181,000
Insurance		62,000			64,000			173,000			194,000
Commissions		1,715,000			1,507,000			3,808,000			2,836,000
Travel		115,000			214,000			490,000			806,000
Other		305,000			219,000			823,000			512,000
Total operating expenses		3,658,000			4,355,000			9,883,000			10,928,000
Loss from operations		(2,394,000	)		(3,602,000	)		(6,393,000	)		(6,493,000	)
Non-operating income
Other income		2,000			--			7,000			--
Gain related to recovery of allowance on note receivable – related party		--			24,000			--			24,000
Recovery from settlement with loan guarantor		--			--			261,000			--
Dividend income		--			--			2,000			--
Gain on marketable securities		--			1,000			--			2,000
Total other non-operating income		2,000			25,000			270,000			26,000
Provision for income taxes		--			--			--			--
Loss from continuing operations		(2,392,000	)		(3,577,000	)		(6,123,000	)		(6,467,000	)
Discontinued operations, net of income taxes
Expenses related to real estate owned held for sale		(1,000	)		(103,000	)		(50,000	)		(298,000	)
Disposition expense		--			--			(753,000	)		--
Loss on sale of assets held for sale		--			--			(66,000	)		--
Income (loss) from assets held for sale, net of income taxes		6,000			339,000			(618,000	)		1,002,000
Recovery from fully impaired real estate held for sale		--			396,000			1,303,000			396,000
Total income (loss) from discontinued operations		5,000			632,000			(184,000	)		1,100,000
Net loss		(2,387,000	)		(2,945,000	)		(6,307,000	)		(5,367,000	)
Net loss attributable to non-controlling interest – related party		(851,000	)		(1,351,000	)		(2,461,000	)		(2,768,000	)
Net loss attributable to Vestin Realty Mortgage II, Inc. common stockholders	$	(1,536,000	)	$	(1,594,000	)	$	(3,846,000	)	$	(2,599,000	)
Basic and diluted income (loss) per weighted average common share
Loss from continuing operations attributable to Vestin Realty Mortgage II, Inc. common stockholders	$	(0.64	)	$	(0.85	)	$	(1.59	)	$	(1.35	)
Income (loss) from discontinued operations		(0.00	)		0.22			(0.00	)		0.32
Net loss attributable to Vestin Realty Mortgage II, Inc. common stockholders - basic and diluted loss per weighted average common share	$	(0.64	)	$	(0.64	)	$	(1.59	)	$	(1.02	)
Weighted average common shares outstanding, basic and diluted		2,408,804			2,494,011			2,414,872			2,537,533

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

-2-

VESTIN REALTY MORTGAGE II, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE LOSS (unaudited)
	For The Three Months Ended September 30,						For The Nine Months Ended September 30,
	2016			2015			2016			2015
Net loss	$	(2,387,000	)	$	(2,945,000	)	$	(6,307,000	)	$	(5,367,000	)
Unrealized holding gain on available-for-sale securities – related party		6,000			113,000			317,000			203,000
Comprehensive loss		(2,381,000	)		(2,832,000	)		(5,990,000	)		(5,164,000	)
Less: net loss attributable to non-controlling interest		(851,000	)		(1,351,000	)		(2,461,000	)		(2,768,000	)
Comprehensive loss attributable to Vestin Realty Mortgage II, Inc. common stockholders	$	(1,530,000	)	$	(1,481,000	)	$	(3,529,000	)	$	(2,396,000	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

-3-

VESTIN REALTY MORTGAGE II, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
	For the Nine Months Ended September 30,
	2016			2015
Cash flows from operating activities:
Net loss	$	(6,307,000	)	$	(5,367,000	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		2,000			1,000
Treasury stock for settlement		(112,000	)		--
DRIP shares from MVP REIT, Inc.		(2,000	)		--
Recovery of allowance for doubtful notes receivable		(13,000	)		(539,000	)
Gain on sale of marketable securities		--			(2,000	)
Gain related to recovery of allowance for loan loss		--			(1,623,000	)
Gain related to recovery of allowance for notes receivable – related party		--			(24,000	)
Recovery from fully impaired real estate held for sale		(1,303,000	)		(396,000	)
Change in operating assets and liabilities:
Interest and other receivables		(121,000	)		(40,000	)
Assets held for sale, net of liabilities		375,000			242,000
Due to/from related parties, net		2,047,000			3,139,000
Prepaid expenses – related party		8,000			(279,000	)
Other assets		--			296,000
Accounts payable and accrued liabilities		(447,000	)		159,000
Net cash used in operating activities		(5,873,000	)		(4,433,000	)
Cash flows from investing activities:
Investments in real estate loans		(7,341,000	)		(3,228,000	)
Purchase of investments in real estate loans from third parties		--			(200,000	)
Proceeds from loan payoffs		47,000			5,945,000
Sale of investments in real estate loans to third parties		4,008,000			2,317,000
Investment in Delaware Statutory Trust		(1,479,000	)		(3,600,000	)
Proceeds from notes receivable		13,000			539,000
Proceeds from notes receivable – related party		--			24,000
Proceeds from payments on Delaware Statutory Trust		216,000			--
Proceeds related to real estate held for sale		14,781,000			--
Collection from recovery of loan loss		--			1,623,000
Proceeds from recovery of fully impaired real estate held for sale		1,303,000			396,000
Purchase of marketable securities		--			(200,000	)
Purchase of fixed assets held for sales		(172,000	)		(22,000	)
Investments in MVP REIT II		--			(200,000	)
Asset purchase – assets held for sale		--			(124,000	)
Proceeds from marketable securities		--			113,000
Net cash provided by investing activities		11,376,000			3,383,000
Cash flows from financing activities:
Principal payments on notes payable		(124,000	)		(116,000	)
Purchase of treasury stock		(223,000	)		(386,000	)
Distribution to non-controlling interest entity held for sale		(4,304,000	)		(81,000	)
Proceeds from note payable		208,000			166,000
Payments on note payable on assets held for sale		(125,000	)		(430,000	)
Net cash used in financing activities		(4,568,000	)		(847,000	)
NET CHANGE IN CASH		935,000			(1,897,000	)
Cash, beginning of period		4,228,000			7,541,000
Cash, end of period	$	5,163,000		$	5,644,000
Supplemental disclosures of cash flows information:
Interest paid	$	3,000		$	2,000
Non-cash investing and financing activities:
Adjustment to notes receivable and related allowance	$	--		$	1,600,000
Note payable related to prepaid D & O insurance	$	208,000		$	166,000
Unrealized gain on marketable securities - related party	$	317,000		$	203,000

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

-4-

VESTIN REALTY MORTGAGE II, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016

NOTE A — ORGANIZATION

Vestin Realty Mortgage II, Inc. ("VRM II", the "Company", "we", "us" or "our"), formerly Vestin Fund II, LLC ("Fund II"), invests in loans secured by real estate through deeds of trust or mortgages; hereafter referred to collectively as "deeds of trust" and as defined in our management agreement ("Management Agreement") as mortgage assets ("Mortgage Assets").  In addition, we invest in, acquire, manage or sell real property and acquire entities involved in the ownership or management of real property.  We commenced operations in June 2001.  References in this report to the "Company," "we," "us," or "our" refer to Fund II with respect to the period prior to April 1, 2006 and to VRM II with respect to the period commencing on April 1, 2006.

We operated as a real estate investment trust ("REIT") through December 31, 2011.  We are not a mutual fund or an investment company within the meaning of the Investment Company Act of 1940, nor are we subject to any regulation thereunder.  As a REIT, we were required to have a December 31 fiscal year end. We announced on March 28, 2012 that we have terminated our election to be treated as a REIT under the Internal Revenue Code of 1986, as amended (the "Code"), effective for the tax year ending December 31, 2012.  Under the Code, we will not be able to make a new election to be taxed as a REIT during the four years following December 31, 2012.  Pursuant to our charter, upon the determination by the Board of Directors that we should no longer qualify as a REIT, the restrictions on transfer and ownership of shares set forth in Article VII of our charter ceased to be in effect and, accordingly, shares of the Company's stock will no longer be subject to such restrictions.  In connection with the termination of our REIT status, we also amended our stockholders' rights plan to provide that a stockholder, other than Michael Shustek, may own up to 20% of outstanding shares of common stock, and that Michael Shustek may own up to 35% of outstanding shares of common stock.

Michael Shustek owns a significant majority of Vestin Mortgage, LLC, a Nevada limited liability company, which is our manager (the "manager" or "Vestin Mortgage"). The business of brokerage and placement of real estate loans have been performed by affiliated or non-affiliated mortgage brokers, including Advant Mortgage, LLC ("MVP Mortgage"), a licensed Nevada mortgage broker, which is indirectly wholly owned by Mr. Shustek.

Pursuant to a management agreement, our manager is responsible for managing our operations and implementing our business strategies on a day-to-day basis.  Consequently, our operating results are dependent to a significant extent upon our manager's ability and performance in managing our operations and servicing our loans.

Vestin Mortgage is also the manager of Vestin Realty Mortgage I, Inc. ("VRM I"), as the successor by merger to Vestin Fund I, LLC ("Fund I").  VRM I has investment objectives similar to ours.

In April 2009, we entered into an accounting services agreement with Strategix Solutions, LLC ("Strategix Solutions"), a Nevada limited liability company from which our former CFO and other members of our accounting staff were employed.  As of March 1, 2016, our CFO and certain members of our accounting staff were no longer employed by Strategix Solutions and became employed by MVP Realty Advisors.  On June 1, 2016, Tracee Gress resigned as the Chief Financial Officer of the Company which resignation became effective as of June 14, 2016.  Also on June 1, 2016, the Board of Directors of the Company appointed Edwin H. Bentzen IV as the new Chief Financial Officer of the Company effective as of June 14, 2016. Mr. Bentzen and the accounting staff also provide accounting and financial reporting services to MVP REIT, Inc. ("MVP REIT"), MVP REIT II, Inc. ("MVP REIT II") and VRM I.

In December 2013, we entered into a membership interest transfer agreement with MVP Capital Partners, LLC ("MVP Capital") pursuant to which we increased our ownership interest from 40% to 60% in MVP Realty Advisors, LLC ("MVP Advisors"), the advisor of MVP REIT. At the same time, VRM I acquired from MVP Capital the remaining 40% interest in MVP Advisors.  We and VRM I have agreed to fund certain costs and expenses of MVP REIT through MVP Advisors in proportion to our respective ownership interest.

-5-

During May 2015, our Board of Directors and the Board of Directors of VRM I agreed to form MVP CP II. We own 60% and VRM I owns 40%.  The purpose of MVP CP II is to act as the sponsor of MVP REIT II, a Maryland corporation, which was formed as a publicly registered non traded REIT ("MVP REIT II"). MVP REIT II's registrations statement for its initial public offering has been declared effective by the Securities and Exchange Commission on October 22, 2015.  MVP REIT II is a proposed $550,000,000 offering with the proceeds raised from the offering being used primarily to acquire parking assets in the United States and Canada. MVP REIT II has engaged MVP Advisors as its advisor.

We and VRM I have agreed to fund certain costs and expenses of MVP REIT II through MVP CP II in proportion to our respective ownership interest.  As consideration for the initial investment of $0.2 million MVP CP II received 8,000 shares of common stock in MVP REIT II.

Through our interest in MVP Advisor and MVP CP II, we have directed, and continue to direct, a portion of our cash towards development of the businesses of MVP REIT and MVP REIT II.

Reverse Stock Split

On September 15, 2016, the Company filed a Schedule 13E-3 and related preliminary proxy statement with the Securities and Exchange Commission (the "SEC") in connection with a proposed transaction that is intended to result in the voluntary delisting of the Company's common stock from NASDAQ and the voluntary deregistration from the Company's public reporting obligations under the Securities and Exchange Act of 1934 (the "Exchange Act"). The proposed transaction, if approved by the stockholders, is expected to permit the Company to forego many of the expenses associated with operating as a public reporting company, including the costs of preparing and filing periodic reports with the SEC, related accounting and legal fees and costs, and the ongoing expenses for compliance with the Sarbanes-Oxley Act of 2002 and other SEC requirements.

The suspension of reporting obligations would be accomplished by a reverse 1:1,000 stock split of the Company's common stock. All stockholders owning fewer than 1,000 shares prior to the reverse stock split would be cashed out by the Company and would no longer be stockholders of the Company. The cash out price will be not less than $2.70 per share, which is the average per-share closing price of the Company's common stock on NASDAQ for the ten consecutive trading days ending on the last trading day prior to September 15, 2016, or the date of the first public disclosure of the reverse stock split proposal in the form of the initial filing of the preliminary proxy statement with the SEC (the "Cash-Out Price"). If, however, the average per share closing price of the Company's common stock for the ten consecutive trading days ending on the last trading day prior to the effective date of the reverse stock split (the "Closing Trading Price") exceeds the Cash-Out Price, then fractional shares will be paid out at the Closing Trading Price rather than the Cash-Out Price.

If, after completion of the reverse stock split, the Company has fewer than 300 stockholders of record, the Company intends to delist from NASDAQ by filing a Form 25 and suspend its reporting obligations under the Exchange Act by filing a Form 15 with the SEC. Upon the effectiveness of such filings, the Company's common stock would no longer be listed on NASDAQ and the Company would be relieved of its requirements to file periodic reports with the SEC, including annual reports on Form 10-K and quarterly reports on Form 10-Q. After delisting from NASDAQ, the Company anticipates that its common stock would be quoted on the Pink Sheets, a centralized electronic quotation service for over-the-counter securities, after the reverse stock split. The Company, however, can give no assurance that trading in its stock will continue on the Pink Sheets or on any other securities exchange or quotation medium after the reverse stock split.

The consummation of the proposed transaction is subject to a number of conditions, including the filing of a definitive proxy statement with the SEC and approval by the Company's stockholders. The Company intends to include a proposal to amend the company's Certificate of Incorporation to effect the reverse stock split at its annual meeting of stockholders.

-6-

Stockholders are advised not to put undue reliance on the description of the reverse stock split provided in this Form 10-Q and in the preliminary proxy statement. The Company has filed a preliminary proxy statement and Schedule 13E-3 concerning the proposed reverse stock split, which are subject to SEC review. STOCKHOLDERS ARE URGED TO READ CAREFULLY AND IN THEIR ENTIRETY THE PRELIMINARY PROXY STATEMENT AND SCHEDULE 13E-3 FILED WITH THE SEC, AND, WHEN THEY BECOME AVAILABLE, THE DEFINITIVE PROXY STATEMENT AND OTHER RELEVANT MATERIALS, BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY AND THE PROPOSED REVERSE STOCK SPLIT. The definitive proxy statement and Schedule 13E-3 will be mailed to stockholders as of a record date to be established for voting on the proposed transaction. Stockholders may obtain free copies of the Company's preliminary proxy statement, Schedule 13E-3, definitive proxy statement (when available) and its other SEC filings electronically by accessing the SEC's home page at http://www.sec.gov. Copies can also be obtained, free of charge, upon written request to the Company, attention: Investor Relations.

The Company and its directors, executive officers, and advisors may be deemed to be participants in the solicitation of proxies from the holders of the Company's common stock in respect of the proposed reverse stock split. Stockholders may obtain additional information regarding the interest of those participants by reading the Company's preliminary proxy statement and, when they become available, the Company's definitive proxy statement and other relevant proxy materials, and the Company's Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q as filed with the SEC.

The information set forth above is not a proxy statement or solicitation of a proxy, consent or authorization with respect to any securities or in respect of the proposed reverse stock split and shall not constitute an offer to sell or a solicitation of an offer to buy the securities of the Company, nor shall there be any sale of any such securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction.

NOTE B — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting

The accompanying unaudited condensed consolidated financial statements of the Company are prepared by management on the accrual basis of accounting and in accordance with principles generally accepted in the United States of America ("GAAP") for interim financial information as contained in the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC"), and in conjunction with rules and regulations of the SEC. Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to SEC rules and regulations. Accordingly, the unaudited condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. The unaudited condensed consolidated financial statements include accounts and related adjustments, which are, in the opinion of management, of a normal recurring nature and necessary for a fair presentation of the Company's financial position, results of operations and cash flows for the interim period.

Operating results for the three and nine months ended September 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015.

The condensed consolidated balance sheet as of December 31, 2015 contained herein has been derived from the audited consolidated financial statements as of December 31, 2015, but do not include all disclosures required by GAAP.

Management Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

-7-

Investments in Real Estate Loans

We may, from time to time, acquire or sell investments in real estate loans from or to our manager or other related parties pursuant to the terms of our Management Agreement without a premium.  The primary purpose is to either free up capital to provide liquidity for various reasons, such as loan diversification, or place excess capital in investments to maximize the use of our capital.  Selling or buying loans allows us to diversify our loan portfolio within these parameters.  Due to the short-term nature of the loans we make and the similarity of interest rates in loans we normally would invest in, the fair value of a loan typically approximates its carrying value.  Accordingly, discounts or premiums typically do not apply upon sales of loans and therefore, generally no gain or loss is recorded on these transactions, regardless of whether to a related or unrelated party.

Investments in real estate loans are secured by deeds of trust or mortgages.  Generally, our real estate loans require interest only payments with a balloon payment of the principal at maturity.  We have both the intent and ability to hold real estate loans until maturity and therefore, real estate loans are classified and accounted for as held for investment and are carried at amortized cost.  Loans sold to or purchased from affiliates are accounted for at the principal balance and no gain or loss is recognized by us or any affiliate.  Loan-to-value ratios are initially based on appraisals obtained at the time of loan origination and are updated, when new appraisals are received or when management's assessment of the value has changed, to reflect subsequent changes in value estimates.  Such appraisals are generally dated within 12 months of the date of loan origination and may be commissioned by the borrower.

The Company considers a loan to be impaired when, based upon current information and events, it believes it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement.  The Company's impaired loans include troubled debt restructuring, and performing and non-performing loans in which full payment of principal or interest is not expected.  The Company calculates an allowance required for impaired loans based on the present value of expected future cash flows discounted at the loan's effective interest rate, or at the loan's observable market price or the fair value of its collateral.

Loans that have been modified from their original terms are evaluated to determine if the loan meets the definition of a Troubled Debt Restructuring ("TDR") as defined by ASC 310-40.  When the Company modifies the terms of an existing loan that is considered a TDR, it is considered performing as long as it is in compliance with the modified terms of the loan agreement.  If the modification calls for deferred interest, it is recorded as interest income as cash is collected.

Allowance for Loan Losses

We maintain an allowance for loan losses on our investments in real estate loans for estimated credit impairment.  Our manager's estimate of losses is based on a number of factors including the types and dollar amounts of loans in the portfolio, adverse situations that may affect the borrower's ability to repay, prevailing economic conditions and the underlying collateral securing the loan.  Additions to the allowance are provided through a charge to earnings and are based on an assessment of certain factors, which may indicate estimated losses on the loans.  Actual losses on loans are recorded first as a reduction to the allowance for loan losses.  Generally, subsequent recoveries of amounts previously charged off are recognized as income.

Estimating allowances for loan losses requires significant judgment about the underlying collateral, including liquidation value, condition of the collateral, competency and cooperation of the related borrower and specific legal issues that affect loan collections or taking possession of the property.  As a commercial real estate lender willing to invest in loans to borrowers who may not meet the credit standards of other financial institutional lenders, the default rate on our loans could be higher than those generally experienced in the real estate lending industry.  We and our manager generally approve loans more quickly than other real estate lenders and, due to our expedited underwriting process; there is a risk that the credit inquiry we perform will not reveal all material facts pertaining to a borrower and the security.

-8-

Additional facts and circumstances may be discovered as we continue our efforts in the collection and foreclosure processes.  This additional information often causes management to reassess its estimates.  In recent years, we have revised estimates of our allowance for loan losses.  Circumstances that have and may continue to cause significant changes in our estimated allowance include, but are not limited to:

· Declines in real estate market conditions, which can cause a decrease in expected market value;

· Discovery of undisclosed liens for community improvement bonds, easements and delinquent property taxes;

· Lack of progress on real estate developments after we advance funds.  We customarily utilize disbursement agents to monitor the progress of real estate developments and approve loan advances.  After further inspection of the related property, progress on construction occasionally does not substantiate an increase in value to support the related loan advances;

· Unanticipated legal or business issues that may arise subsequent to loan origination or upon the sale of foreclosed property; and

· Appraisals, which are only opinions of value at the time of the appraisal, may not accurately reflect the value of the property.

Discontinued Operations

We have reclassified for all periods presented in the accompanying consolidated statements of operations, the amounts related to discontinued operations and real estate held for sale, in accordance with the applicable accounting criteria.  In addition, the assets and liabilities related to the discontinued operations are reported separately in the accompanying consolidated balance sheets as real estate held for sale, assets held for sale, and liabilities related to assets held for sale.

Generally, operating results and cash flows from long-lived assets held for sale are to be classified as discontinued operations as a separately stated component of net income.  Our operations related to REO are separately identified in the accompanying consolidated statements of operations.

Real Estate Owned Held for Sale

Real estate owned held for sale ("REO") includes real estate acquired through foreclosure and will be carried at the lower of the recorded amount, inclusive of any senior indebtedness, or the property's estimated fair value, less estimated costs to sell, with fair value based on appraisals and knowledge of local market conditions.  While pursuing foreclosure actions, we seek to identify potential purchasers of such property.  We generally seek to sell properties acquired through foreclosure as quickly as circumstances permit, taking into account current economic conditions.  The carrying values of REO are assessed on a regular basis from updated appraisals, comparable sales values or purchase offers.

Management classifies real estate as REO when the following criteria are met:

· Management commits to a plan to sell the properties;

· The property is available for immediate sale in its present condition subject only to terms that are usual and customary;

· An active program to locate a buyer and other actions required to complete a sale have been initiated;

· The sale of the property is probable;

· The property is being actively marketed for sale at a reasonable price; and

· Withdrawal or significant modification of the sale is not likely.

-9-

Acquisitions

The Company records the acquired tangible and intangible assets and assumed liabilities of acquisitions of all operating properties and those development and redevelopment opportunities that meet the accounting criteria to be accounted for as business combinations at fair value at the acquisition date. The Company assesses and considers fair value based on estimated cash flow projections that utilize available market information and discount and/or capitalization rates that the Company deems appropriate. Estimates of future cash flows are based on a number of factors including historical operating results, known and anticipated trends, and market and economic conditions. The acquired assets and assumed liabilities for an operating property acquisition generally include but are not limited to: land, buildings and improvements, construction in progress and identified tangible and intangible assets and liabilities associated with in-place leases, including tenant improvements, leasing costs, value of above-market and below-market operating leases and ground leases, acquired in-place lease values and tenant relationships, if any.

The fair value of land is derived from comparable sales of land within the same submarket and/or region. The fair value of buildings and improvements, tenant improvements, and leasing costs are based upon current market replacement costs and other relevant market rate information.

The fair value of the above-market or below-market component of an acquired in-place operating lease is based upon the present value (calculated using a market discount rate) of the difference between (i) the contractual rents to be paid pursuant to the lease over its remaining non-cancellable lease term and (ii) management's estimate of the rents that would be paid using fair market rental rates and rent escalations at the date of acquisition measured over the remaining non-cancellable term of the lease for above-market operating leases and the initial non-cancellable term plus the term of any below-market fixed rate renewal options, if applicable, for below-market operating leases. The amounts recorded for above-market operating leases are included in deferred leasing costs and acquisition-related intangibles, net on the balance sheet and are amortized on a straight-line basis as a reduction of rental income over the remaining term of the applicable leases.

The amounts recorded for below-market operating leases are included in deferred revenue and acquisition-related liabilities, net on the balance sheet and are amortized on a straight-line basis as an increase to rental income over the remaining term of the applicable leases plus the term of any below-market fixed rate renewal options, if applicable. Our below-market operating leases generally do not include fixed rate or below-market renewal options.

The fair value of acquired in-place leases is derived based on management's assessment of lost revenue and costs incurred for the period required to lease the "assumed vacant" property to the occupancy level when purchased. This fair value is based on a variety of considerations including, but not necessarily limited to: (1) the value associated with avoiding the cost of originating the acquired in-place leases; (2) the value associated with lost revenue related to tenant reimbursable operating costs estimated to be incurred during the assumed lease-up period; and (3) the value associated with lost rental revenue from existing leases during the assumed lease-up period. Factors considered by us in performing these analyses include an estimate of the carrying costs during the expected lease-up periods, current market conditions, and costs to execute similar leases. In estimating carrying costs, the Company includes real estate taxes, insurance and other operating expenses, and estimates of lost rental revenue during the expected lease-up periods based on current market demand at market rates. In estimating costs to execute similar leases, the Company considers leasing commissions, legal and other related expenses. The amount recorded for acquired in-place leases is included in deferred leasing costs and acquisition-related intangibles, net on the balance sheet and amortized as an increase to depreciation and amortization expense over the remaining term of the applicable leases. If a lease were to be terminated or if termination were determined to be likely prior to its contractual expiration (for example resulting from bankruptcy), amortization of the related unamortized in-place lease intangible would be accelerated.

The determination of the fair value of any debt assumed in connection with a property acquisition is estimated by discounting the future cash flows using interest rates available for the issuance of debt with similar terms and remaining maturities.

The determination of the fair value of the acquired tangible and intangible assets and assumed liabilities of operating property acquisitions requires us to make significant judgments and assumptions about the numerous inputs discussed above. The use of different assumptions in these fair value calculations could significantly affect the reported amounts of the allocation of our acquisition related assets and liabilities and the related amortization and depreciation expense recorded for such assets and liabilities. In addition, because the value of above and below market leases are amortized as either a reduction or increase to rental income, respectively, our judgments for these intangibles could have a significant impact on our reported rental revenues and results of operations.

-10-

Costs directly associated with all operating property acquisitions and those development and redevelopment acquisitions that meet the accounting criteria to be accounted for as business combinations are expensed as incurred. Our acquisition expenses are directly related to our acquisition activity and if our acquisition activity was to increase or decrease, so would our acquisition costs. Costs directly associated with development acquisitions accounted for as asset acquisitions are capitalized as part of the cost of the acquisition. During the nine months ended September 30, 2016, the Company did not capitalize any such acquisition costs.

Impairment of Long Lived Assets

When circumstances indicate the carrying value of a property may not be recoverable, the Company reviews the asset for impairment. This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property's use and eventual disposition. These estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors. If impairment exists, due to the inability to recover the carrying value of a property, an impairment loss is recorded to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held and used. For properties held for sale, the impairment loss is the adjustment to fair value less estimated cost to dispose of the asset. These assessments have a direct impact on net income because recording an impairment loss results in an immediate negative adjustment to net income.

Cash and Cash Equivalents

Cash and cash equivalents include interest-bearing and non-interest bearing bank deposits, money market accounts, short-term certificates of deposit with original maturities of three months or less, and short-term instruments with a liquidation provision of one month or less.

Revenue Recognition

The Company recognizes interest income from loans on an accrual basis over the expected terms of the loans using the effective interest method.  The Company may recognize fees, discounts, premiums, anticipated exit fees and direct cost over the terms of the loans as an adjustment to the yield.  The Company may recognize fees on commitments that expire unused at expiration.  The Company may recognize interest income from available-for-sale securities on an accrual basis over the life of the investment on a yield-to-maturity basis.  Interest is fully allowed for on impaired loans and is recognized on a cash basis method.  The receipt of previous loan or note receivable allowances or impairments are recognized as revenue.

Advertising Costs

Advertising costs incurred in the normal course of operations are expensed as incurred.  The Company had no advertising expense for the three and nine months ended September 30, 2016 and 2015.

Investments in Real Estate and Fixed Assets

Investments in real estate and fixed assets are stated at cost less accumulated depreciation. Depreciation is provided principally on the straight-line method over the estimated useful lives of the assets, which are primarily 3 to 40 years. The cost of repairs and maintenance is charged to expense as incurred. Expenditures for property betterments and renewals are capitalized. Upon sale or other disposition of a depreciable asset, cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in other income (expense).

The Company periodically evaluates whether events and circumstances have occurred that may warrant revision of the estimated useful lives of fixed assets or whether the remaining balance of fixed assets should be evaluated for possible impairment. The Company uses an estimate of the related undiscounted cash flows over the remaining life of the fixed assets in measuring their recoverability.

Investment in Marketable Securities

Investment in marketable securities consists of stock in VRM I and MVP REIT II, related parties.  The securities are stated at fair value as determined by the closing market prices as of September 30, 2016 and December 31, 2015.  All securities are classified as available-for-sale.

-11-

We are required to evaluate our available-for-sale investment for other-than-temporary impairment charges.  We will determine when an investment is considered impaired (i.e., decline in fair value below its amortized cost), and evaluate whether the impairment is other than temporary (i.e., investment value will not be recovered over its remaining life).  If the impairment is considered other than temporary, we will recognize an impairment loss equal to the difference between the investment's cost and its fair value.

Basic and Diluted Earnings Per Common Share

Basic earnings per share ("EPS") is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding.  Diluted EPS is similar to basic EPS except that the weighted average number of common shares outstanding is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been exercised.  We had no outstanding common share equivalents during the periods ended September 30, 2016 and December 31, 2015.

Common Stock Dividends

During June 2008, our Board of Directors decided to suspend the payment of dividends.  Our Board of Directors will closely monitor our operating results in order to determine when dividends should be reinstated; however, we do not expect our Board of Directors to reinstate dividends in the foreseeable future.

Treasury Stock

On March 21, 2007, our Board of Directors authorized the repurchase of up to $10 million worth of our common stock. On November 17, 2014, our Board of Directors authorized the repurchase of an additional $500,000 in common stock.  Depending upon market conditions, shares may be repurchased from time to time at prevailing market prices through open market or privately negotiated transactions.  We are not obligated to purchase any shares.  Subject to applicable securities laws, including SEC rule 10b-18, repurchases may be made at such times and in such amounts, as our management deems appropriate.  The share repurchase program may be discontinued or terminated at any time and we have not established a date for completion of the share repurchase program.  The repurchases will be funded from our available cash.

We record our treasury stock using the cost method.  Under the Maryland General Corporation Law, shares of its own stock acquired by a corporation constitute authorized but unissued shares.

Segments

We currently are authorized to operate three reportable segments, investments in real estate loans, investments in real property and investment in a real estate management company.  During the nine months ended September 30, 2016, the Company operated in all segments.

Our objective is to invest approximately 97% of our assets in real estate loans and real estate related investments, while maintaining approximately 3% as a working capital cash reserve.

Principles of Consolidation

Our consolidated financial statements include the accounts of VRM II; Building A, LLC, Building C, LLC, Wolfpack Properties, LLC; Devonshire, LLC; SE Properties, LLC; ExecuSuites, LLC; MVP Advisors; and MVP Capital Partners II, LLC.  All significant intercompany transactions and balances have been eliminated in consolidation.

Business Combinations

In December 2007, the Financial Accounting Standards Board (FASB) revised the authoritative guidance for business combinations, establishing principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired (including goodwill), the liabilities assumed, and any non-controlling interest in the acquiree. Subsequently, on April 1, 2009, the FASB amended and clarified certain aspects of its authoritative guidance on initial recognition and measurement, subsequent measurement and accounting, and disclosure of assets and liabilities arising from contingencies in a business combination. We apply the FASB authoritative guidance to all business combinations for which the acquisition date is on or after January 1, 2009, and to certain future income tax effects related to our prior business combinations, should they arise.

-12-

Non-controlling Interests

The FASB issued authoritative guidance for non-controlling interests in December 2007, which establishes accounting and reporting standards for the non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary. The guidance clarifies that a non-controlling interest in a subsidiary, which is sometimes referred to as an unconsolidated investment, is an ownership interest in the consolidated entity that should be reported as a component of equity in the consolidated financial statements. Among other requirements, the guidance requires consolidated net income (loss) to be reported at amounts attributable to both the parent and the non-controlling interest. It also requires disclosure, on the face of the consolidated income statement, of the amounts of consolidated net income (loss) attributable to the parent and to the non-controlling interest.

Income Taxes

The Company accounts for its income taxes under the assets and liabilities method, which requires recognition of deferred tax assets and liabilities for future tax consequences of events that have been included in the financial statements.  Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.  The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

The Company records net deferred tax assets to the extent the Company believes these assets will more likely than not be realized.  In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations.  A valuation allowance is established against deferred tax assets that do not meet the criteria for recognition.  In the event the Company was to determine that it would be able to realize deferred income tax assets in the future in excess of their net recorded amount, they would make an adjustment to the valuation allowance which would reduce the provision for income taxes.

The Company follows the accounting guidance which provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized initially and in subsequent periods.  Also, included is guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

Reclassifications

In conjunction with the adoption of new accounting standards, certain debt or loan issuance costs for the three and nine months ended September 30, 2015 as well as certain amounts as of December 31, 2015, have been reclassified to conform to the current year's presentation.

NOTE C — FINANCIAL INSTRUMENTS AND CONCENTRATIONS OF CREDIT RISK

Financial instruments consist of cash, interest and other receivables, notes receivable, accounts payable and accrued liabilities, due to/from related parties and notes payable.  The carrying values of these instruments approximate their fair values due to their short-term nature.  Marketable securities – related party and investment in real estate loans are further described in Note K – Fair Value.

Financial instruments with concentration of credit and market risk include cash, interest and other receivables, marketable securities - related party, notes receivable, accounts payable and accrued liabilities, due to/from related parties, notes payable, and loans secured by deeds of trust.

We maintain cash deposit accounts and certificates of deposit that, at times, may exceed federally-insured limits.  To date, we have not experienced any losses.  As of September 30, 2016 and December 31, 2015 we had approximately $3.4 million and $3.9 million of funds, respectively, in excess of the federally-insured limits.

As of September 30, 2016, 100% of our loans were loans in which we participated with other lenders, most of whom are our affiliates.

-13-

As of September 30, 2016, 48% and 48% of our loans were in Nevada and California, respectively, compared to 93% in Nevada at December 31, 2015.

As of September 30, 2016, the loan to our largest borrower represented approximately 48% of our total investment in real estate loans.  This real estate loan is an acquisition and development loan secured by property located in California, with a first lien position.  The interest rate is 8.5% per annum, the outstanding balance is approximately $3.8 million and the loan is considered a performing loan.  As of December 31, 2015, the loan to our largest borrower represented approximately 53% of our total investment in real estate loans.  This real estate loan was a commercial loan secured by property located in Nevada, with a first lien position.  The interest rate is 15% per annum, the outstanding balance is approximately $2.5 million and the loan is considered a non-performing loan.

The success of a borrower's ability to repay its real estate loan obligation in a large lump-sum payment may be dependent upon the borrower's ability to refinance the obligation or otherwise raise a substantial amount of cash.  With the weakened economy, credit continues to be difficult to obtain and as such, many of our borrowers who develop and sell commercial real estate projects have been unable to complete their projects, obtain takeout financing or have been otherwise adversely impacted.  In addition, an increase in interest rates over the loan rate applicable at origination of the loan may have an adverse effect on our borrower's ability to refinance.

Common Guarantors

As of December 31, 2015, two loans totaling approximately $1.7 million, representing approximately 38% of our portfolio's total value, have a common guarantor.  As of September 30, 2016, these loans were paid in full.

As of September 30, 2016 and December 31, 2015, three loans totaling approximately $0.3 million, representing approximately 3.9% and 7%, respectively, of our portfolio's total value, have a common guarantor.  These loans were considered performing loans as of September 30, 2016.

As of September 30, 2016, three loans totaling approximately $0.9 million, representing approximately 11.6% of our portfolio's total value, had a common guarantor.  These loans were considered performing loans as of September 30, 2016.

NOTE D — INVESTMENTS IN REAL ESTATE LOANS

As of September 30, 2016 and December 31, 2015, most of our loans provided for interest only payments with a "balloon" payment of principal payable and any accrued interest payable in full at the end of the term.  As of September 30, 2016 and December 31, 2015, three loans had variable interest rates adjusted quarterly at a rate of prime plus 3.30% (6.8% as of September 30, 2016 and December 31, 2015). The balance on these loans was approximately $0.3 million as of September 30, 2016 and December 31, 2015.

In addition, we may invest in real estate loans that require borrowers to maintain interest reserves funded from the principal amount of the loan for a period of time.  At September 30, 2016 and December 31, 2015, we had one and three investments in real estate loans that had interest reserves.

Loan Portfolio

As of September 30, 2016, we had five available real estate loan products consisting of commercial, construction, acquisition and development, land and residential.  The effective interest rates on all product categories range from 8% to 15% which includes performing and non performing loans that are being fully or partially accrued and will be payable at maturity.  Revenue by product will fluctuate based upon relative balances during the period.

-14-

Investments in real estate loans as of September 30, 2016, were as follows:

Loan Type	Number of Loans		Balance *		Weighted Average Interest Rate			Portfolio Percentage			Current Weighted Average Loan-To-Value, Net of Allowance for Loan Losses
Commercial		8	$	3,676,000		12.75	%		46.55	%		59.72	%
Construction		1		403,000		0.88	%		5.10	%		15.35	%
Acquisition		1		3,818,000		9.35	%		48.35	%		133.61	%
Total		10	$	7,897,000		10.69	%		100.00	%		46.97	%

Investments in real estate loans as of December 31, 2015, were as follows:

Loan Type	Number of Loans		Balance *		Weighted Average Interest Rate			Portfolio Percentage			Current Weighted Average Loan-To-Value, Net of Allowance for Loan Losses
Commercial		7	$	4,541,000		11.85	%		98.48	%		60.14	%
Construction		1		70,000		0.12	%		1.52	%		0.44	%
Total		8	$	4,611,000		11.79	%		100.00	%		58.61	%

* Please see Balance Sheet Reconciliation below.

The "Weighted Average Interest Rate" as shown above is based on the contractual terms of the loans for the entire portfolio including non-performing loans.  The weighted average interest rate on performing loans only, as of September 30, 2016 and December 31, 2015, was 10.69% and 11.79%, respectively.  Please see "Non-Performing Loans" and "Asset Quality and Loan Reserves" below for further information regarding performing and non-performing loans.

Loan-to-value ratios are generally based on the most recent appraisals and may not reflect subsequent changes in value and include allowances for loan losses.  Recognition of allowance for loan losses will result in a maximum loan-to-value ratio of 100% per loan.

The following is a schedule of priority of real estate loans:

Loan Type	Number of Loans		September 30, 2016 Balance*		Portfolio Percentage			Number of Loans		December 31, 2015 Balance*		Portfolio Percentage
First deeds of trust		9	$	7,893,000		99.95	%		8	$	4,611,000		100.00	%
Second deeds of trust		1		4,000		0.05	%		--		--		--
Total		10	$	7,897,000		100.00	%		8	$	4,611,000		100.00	%

* Please see Balance Sheet Reconciliation below.

The following is a schedule of contractual maturities of investments in real estate loans as of September 30, 2016:

Non-performing and past due loans	$	2,450,000
October 2016 –December 2016		--
January 2017 – March 2017		--
April 2017 – June 2017		--
July 2017 – September 2017		--
Thereafter		5,447,000
Total	$	7,897,000

-15-

The following is a schedule by geographic location of investments in real estate loans:

	September 30, 2016 Balance *		Portfolio Percentage			December 31, 2015 Balance *		Portfolio Percentage
Nevada	$	3,765,000		47.68	%	$	4,295,000		93.15	%
California		3,818,000		48.35	%		--		--
Ohio		308,000		3.90	%		310,000		6.72	%
Arizona		6,000		0.07	%		6,000		0.13	%
Total	$	7,897,000		100.00	%	$	4,611,000		100.00	%

* Please see Balance Sheet Reconciliation below.

Balance Sheet Reconciliation

The following table reconciles the balance of the loan portfolio to the amount shown on the accompanying Consolidated Balance Sheets.

	September 30, 2016			December 31, 2015
Balance per loan portfolio	$	7,897,000		$	4,611,000
Less:		--			--
Allowance for loan losses (a)		(2,450,000	)		(2,450,000	)
Balance per consolidated balance sheets	$	5,447,000		$	2,161,000

(a) Please refer to Specific Reserve Allowance below.

Non-Performing Loans

As of September 30, 2016 and December 31, 2015, we had one loan considered non-performing (i.e., based on current information and events, it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement or when the payment of interest is 90 days past due).  This loan has been placed on non-accrual of interest status and is currently carried on our books at a value of $0, net of allowance for loan losses of approximately $2.5 million.

At September 30, 2016 and December 31, 2015, the following loan types were non-performing:

Loan Type	Number of Non-Performing Loans		Balance		Allowance for Loan Losses			Net Balance
Commercial		1	$	2,450,000	$	(2,450,000	)	$	--
Total		1	$	2,450,000	$	(2,450,000	)	$	--

Asset Quality and Loan Reserves

Losses may occur from investing in real estate loans.  The amount of losses will vary as the loan portfolio is affected by changing economic conditions and the financial condition of borrowers.

The conclusion that a real estate loan is uncollectible or that collectability is doubtful is a matter of judgment.  On a quarterly basis, our manager evaluates our real estate loan portfolio for impairment.  The fact that a loan is temporarily past due does not necessarily mean that the loan is non-performing.  Rather, all relevant circumstances are considered by our manager to determine impairment and the need for specific reserves.  Such evaluation, which includes a review of all loans on which full collectability may not be reasonably assured, considers among other matters:

· Prevailing economic conditions;

· Historical experience;

· The nature and volume of the loan portfolio

· The borrowers' financial condition and adverse situations that may affect the borrowers' ability to pay;

-16-

·Evaluation of industry trends; and

· Estimated net realizable value of any underlying collateral in relation to the loan amount.

Based upon this evaluation, a determination is made as to whether the allowance for loan losses is adequate to cover any potential losses on an individual loan basis; we do not have a general allowance for loan losses.  Additions to the allowance for loan losses are made by charges to the provision for loan loss.  As of September 30, 2016, our ratio of total allowance for loan losses to total loans with an allowance for loan loss was 100%.

The following is a breakdown of allowance for loan losses related to performing loans and non-performing loans:

	September 30, 2016
	Balance		Allowance for loan losses **			Balance, net of allowance
Non-performing loans – no related allowance	$	--	$	--		$	--
Non-performing loans – related allowance		2,450,000		(2,450,000	)		--
Subtotal non-performing loans		2,450,000		(2,450,000	)		--
Performing loans – no related allowance		5,447,000		--			5,447,000
Performing loans – related allowance		--		--			--
Subtotal performing loans		5,447,000		--			5,447,000
Total	$	7,897,000	$	(2,450,000	)	$	5,447,000

	As of December 31, 2015
	Balance		Allowance for loan losses **			Balance, net of allowance
Non-performing loans – no related allowance	$	--	$	--		$	--
Non-performing loans – related allowance		2,450,000		(2,450,000	)		--
Subtotal non-performing loans		2,450,000		(2,450,000	)		--
Performing loans – no related allowance		2,161,000		--			2,161,000
Performing loans – related allowance		--		--			--
Subtotal performing loans		2,161,000		--			2,161,000
Total	$	4,611,000	$	(2,450,000	)	$	2,161,000

** Please refer to Specific Reserve Allowances below.

Our manager evaluated our loans and, based on current estimates with respect to the value of the underlying collateral, believes that such collateral is sufficient to protect us against further losses of principal.  However, such estimates could change or the value of the underlying real estate could decline.  Our manager will continue to evaluate our loans in order to determine if any other allowance for loan losses should be recorded.

Specific Reserve Allowances

As of September 30, 2016 and December 31, 2015, we have provided a specific reserve allowance for one non-performing loan in the amount of $2,450,000 based on updated appraisals of the underlying collateral and/or our evaluation of the borrower.  We will continue to evaluate our position in this loan.

Extensions

As of September 30, 2016 and December 31, 2015, our manager had granted extensions on one outstanding loan totaling approximately $2.5 million, pursuant to the terms of the original loan agreements, which permit extensions by mutual consent, or as part of a TDR.  Such extensions are generally provided on loans where the original term was 12 months or less and where a borrower requires additional time to complete a construction project or negotiate take-out financing.  Our manager generally grants extensions when a borrower is in compliance with the material terms of the loan, including, but not limited to the borrower's obligation to make interest payments on the loan.  In addition, if circumstances warrant, our manager may extend a loan that is in default as part of a work out plan to collect interest and/or principal.

-17-

NOTE E —INVESTMENTS IN DELAWARE STATUTORY TRUST

As of September 30, 2016, we had investments in two Delaware Statutory Trusts ("DST") for a total of approximately $3.1 million which have mandatory repurchase agreements which, for accounting purposes, are accounted for in a manner similar to loans. The DST's hold commercial properties located in Illinois and Florida respectively, which we consider to be the collateral on these loans. Additionally, each DST is guaranteed by a third party Broker Dealer who has a selling agreement with MVP REIT and MVP REIT II.  Certain members of the Broker Dealer's management also guaranteed these loans.  During the three and nine months ended September 30, 2016, we earned approximately $0.1 million and $0.4 million in interest, respectively.

NOTE F —ASSETS HELD FOR SALE

During April 2015, we committed to a plan to sell all interests in our six office buildings, at which point we began classifying the related assets as assets held for sale, and the related liabilities as liabilities related to assets held for sale. Additionally, we have classified the six office building's operating results of operations as discontinued operations.

Assets and groups of assets and liabilities which comprise disposal groups are classified as "held for sale" when all of the following criteria are met: a decision has been made to sell, the assets are available for sale immediately, the assets are being actively marketed at a reasonable price in relation to the current fair value, a sale has been or is expected to be concluded within twelve months of the balance sheet date, and significant changes to the plan to sell are not expected. Assets held for sale are not depreciated.

Additionally, the operating results and cash flows related to these assets and liabilities are included in discontinued operations in the consolidated statements of operations and consolidated statements of cash flows for the nine months ended September 30, 2016.

On January 29, 2016, we closed on the sale of our interest in three office buildings that we owned with VRM I through various subsidiaries.  The first building was owned by Building C, LLC and is located at 8930 West Sunset Road, Las Vegas, Nevada (the "8930 Building").  The second building was owned by SE Property Investments, LLC and is located at 8905 West Post Road, Las Vegas, Nevada (the "8905 Building") and the third building was owned by ExecuSuite Properties, LLC and is located at 8945 West Post Road, Las Vegas, Nevada (the "8945 Building").

The sales price for the 8930 Building was $12.1 million less the current debt on the property, which was assumed by the purchaser for a net of approximately $4.0 million of which our share was approximately $2.9 million before closing costs.  The sales price for the 8905 Building was $5.6 million less the current debt on the property, which was assumed by the purchaser for a net of approximately $2.3 million of which our share was approximately $1.6 million before closing costs.  The sales price for the 8945 Building was $5.0 million less the current debt on the property, which was assumed by the purchaser for a net of approximately $2.0 of which our share was approximately $1.4 million before closing costs.

On April 5, 2016, we closed on the sale of our interest in two office buildings that we owned with VRM I through various subsidiaries.  The first building was owned by Wolfpack Properties, LLC and is located at 8860 West Sunset Road, Las Vegas, Nevada (the "8860 Building").  The second building was owned by Devonshire, LLC and is located at 8925 West Post Road, Las Vegas, Nevada (the "8925 Building").

The sales price for the 8860 Building was $5.5 million and the sales price for the 8925 Building is $5.4 million less the combined current debt on the properties, which was assumed by the purchaser for a net of approximately $7.6 million of which our share was approximately $5.5 million before closing costs.

On May 13, 2016, we closed on the sale of our interest in an office building that we owned with VRM I through various subsidiaries.  The building was owned by Building A, LLC and is located at 8880 West Sunset Road, Las Vegas, Nevada (the "8880 Building").

The sales price for the 8880 Building was $12.3 million less the combined current debt on the properties, which was assumed by the purchaser for a net of approximately $8.2 million of which our share was approximately $5.9 million before closing costs.

-18-

We and VRM I, through its subsidiaries, have the right, for a period of one year from the closing dates of the building sales, to repurchase the buildings at a price equal to (i) the sales price for each building, plus (ii) $65,000 for the 8930 Building, $65,000 for the 8880 building, $30,000 for the 8905 Building, $30,000 for the 8860 Building, $30,000 for the 8925 Building and $30,000 for the 8945 Building, plus (iii) twelve percent less any profit realized by the purchaser of the building being repurchased.  Stable Development, LLC, a limited liability company is the manager of and owns a 15% interest in each of the purchasers.  Due to this repurchase right, we have recorded the gain on sale as deferred revenue, to be recognized when the repurchase right is exercised or expires.  Lance Bradford, the former President of MVP REIT is an owner of Stable Development, LLC.

As of September 30, 2016 all assets previously held for sale have been sold.

The following is a summary of the results of operations related to the assets held for sale for the three and nine months ended September 30, 2016 and 2015.

	For The Three Months Ended September 30,						For The Nine Months Ended September 30,
	2016			2015			2016			2015
Revenue	$	--		$	1,200,000		$	943,000		$	3,633,000
Revenue eliminated through consolidation		(9,000	)		(67,000	)		(66,000	)		(201,000	)
Expenses		15,000			(794,000	)		(1,495,000	)		(2,430,000	)
Net income (loss)	$	6,000		$	339,000		$	(618,000	)	$	1,002,000

NOTE G — INVESTMENT IN MARKETABLE SECURITIES – RELATED PARTY

In December 2014, VRM I effected a 1 for 4 reverse split of its common stock. All share and per share information in VRM I's consolidated financial statements and its accompanying notes have been adjusted to retroactively reflect the 1 for 4 reverse stock split.

As of September 30, 2016, we owned 134,545 shares of VRM I's common stock, representing approximately 10.8% of the total outstanding shares. VRM I's common stock is listed on the OTC Pink Marketplace. The closing price of VRM I's common stock on September 30, 2016, was $3.49 per share.

During the nine months ended September 30, 2016, the trading price for VRM I's common stock ranged from $3.33 to $4.00 per share.  We will continue to evaluate our investment in marketable securities on a quarterly basis.

NOTE H — INVESTMENT IN MVP REIT II

During May 2015, our Board of Directors and the Board of Directors of VRM I agreed to form MVP CP II. We own 60% and VRM I owns 40%.  The purpose of MVP CP II is to act as the sponsor of MVP REIT II, a Maryland corporation, which was formed as a publicly registered non traded REIT ("MVP REIT II"). MVP REIT II's registration statement has been declared effective by the SEC on October 22, 2015.  MVP REIT II is a proposed $550,000,000 offering with the proceeds raised from the offering being used primarily to acquire parking assets in the United States and Canada. MVP REIT II has engaged MVP Advisors as its advisor.

We and VRM I have agreed to fund certain costs and expenses of MVP REIT II through MVP CP II in proportion to our respective ownership interest.  As consideration for the initial investment of $0.2 million MVP CP II received 8,000 shares of common stock in MVP REIT II.

As part of the advisory agreement, MVP Advisors will receive a 1% annual asset management fee and 2.25% of the purchase price on all acquisitions.  MVP Advisors will also receive the lesser of 3% of contract sale price or 50% of the brokerage commission paid on dispositions of MVP REIT II assets, which amount shall accrue until the MVP REIT II investors have a return of their net capital and a 6% annual cumulative non compounded return. In addition once the MVP REIT II investors have received a return of their net capital invested and a 6% annual cumulative, non-compounded return, then MVP Advisors will be entitled to receive 15% of the remaining proceeds. This fee will be payable under only one of the following events: (i) if MVP REIT II shares are listed on a national securities exchange;

-19-

(ii) if MVP REIT II assets are sold, other than single assets sold in the ordinary course, or liquidated; (iii) upon a merger, share exchange, reorganization or other transaction pursuant to which MVP REIT II investors receive cash or publicly traded securities in exchange for their shares; or (iv) upon termination of the advisory agreement. The operating agreement of the Advisor provides that once we and VRM I have been repaid in full for any capital contributions to the Advisor or for any expenses advanced on the Advisor's behalf, or capital investment, and once we and VRM I have received an annualized return on our capital investment of 7.5%, then Michael Shustek will receive 40% of the net profits of the Advisor.

As of September 30, 2016, we held 5,000 shares of MVP REIT II's outstanding common stock, purchased in December 2015, for $125,000. During the nine months ended September 30, 2016, we received approximately $2,000 in DRIP shares as dividend income.

NOTE I — RELATED PARTY TRANSACTIONS

Transactions with the Manager

Our manager is entitled to receive from us an annual management fee of up to 0.25% of our aggregate capital contributions received by us and Fund II from the sale of shares or membership units, paid monthly.  The amount of management fees earned by our manager for the three months ended September 30, 2016 and 2015 were approximately $274,000 and $274,000, respectively, during each period.  The amount of management fees earned by our manager for the nine months ended September 30, 2016 and 2015 were approximately $823,000 and $822,000, respectively, during each period.

As of September 30, 2016 and December 31, 2015, our manager owned 23,175 of our common shares, representing approximately 1.0% of our total outstanding common stock at the respective dates.

During the nine months ended September 2016 we paid the manager approximately $0.2 million in fees related to the investment in Delaware Statutory Trust.  During September 2015, we and VRM I paid the manager approximately $0.3 million in fees, of which our portion was approximately $0.2 million, related to the investment in Delaware Statutory Trust.

Transactions with Other Related Parties

During the three months ended September 30, 2016, the trading price for VRM I's common stock ranged from $3.33 to $4.00 per share.  For the three and nine months ended September 30, 2016 and 2015, we recognized no dividend income from VRM I.

As of September 30, 2016 and December 31, 2015, VRM I owned 134,270 of our common shares, representing approximately 5.6% of our total outstanding common stock for both periods.

During the three and nine months ended September 30, 2016, we paid Vestin Mortgage a disposition fee of approximately $0.2 million and $0.8 million, respectively, related to the sale of assets held for sale.

As of September 30, 2016 and December 31, 2015, MVP Advisors owed VRM I approximately $4.5 million.

As of September 30, 2016 and December 31, 2015, we owned a 60% interest in MVP Advisors, the advisor of MVP REIT and MVP REIT II, Inc.

MVP Advisors is entitled to receive a monthly asset management fee at an annual rate equal to 0.85% of the fair market value of (i) all assets then held by MVP REIT or (ii) MVP REIT's proportionate share thereof in the case of an investment made through a joint venture or other co-ownership arrangement, excluding (only for clause (ii)) debt financing obtained by MVP REIT or made available to MVP REIT. The fair market value of real property shall be based on annual "AS-IS", "WHERE-IS" appraisals, and the fair market value of real estate-related secured loans shall be equal to the face value of such loan, unless it is non-performing, in which case the fair market value shall be equal to the book value of such loan. The asset management fee will be reduced to 0.75% if MVP REIT is listed on a national securities exchange.  Asset management fees for the three months ended September 30, 2016 and 2015 were approximately $0.3 million and $0.1 million, respectively. Asset management fees for the nine months ended September 30, 2016 and 2015 were approximately $0.8 million and $0.3 million, respectively.

-20-

MVP Advisors receives a monthly debt financing fee at an annual rate equal to 0.25% of the aggregate debt financing obtained by MVP REIT or made available to MVP REIT, such as mortgage debt, lines of credit, and other term indebtedness, including refinancing's.  In the case of a joint venture, MVP REIT pays this fee only on MVP REIT's pro rata share.  Debt financing fees for the three months ended September 30, 2016 and 2015 were approximately $32,000, and $18,000, respectively. Debt financing fees for the nine months ended September 30, 2016 and 2015 were approximately $81,000, and $48,000, respectively.

MVP Advisors receives a 3% acquisition fee for all acquisitions of MVP REIT.  MVP Advisors received approximately $24,000 and $29,000 in acquisition fee income from MVP REIT during the three months ended September 30, 2016 and 2015.  MVP Advisors received approximately $0.9 million and $1.3 million in acquisition fee income from MVP REIT during the nine months ended September 30, 2016 and 2015, respectively.

MVP Advisors receives a 2.25% acquisition fee for all acquisitions of MVP REIT II.  MVP Advisors received approximately $0.4 million and $0.8 million in acquisition fee income from MVP REIT II during the three and nine months ended September 30, 2016.

As of September 30, 2016 we have made loans of approximately $12.9 million to MVP Advisors, the manager of MVP REIT.  We believe MVP Advisors has the opportunity to generate fees for the services it will render to MVP REIT. However, such fees may not be significant in the near term as MVP REIT only recently commenced operations in December 2012, and over the next 12 months, there may be a diminution of our liquid assets.  If MVP REIT is unable to deploy the capital and operate its business successfully, then our return on our investment in MVP Advisor and the ability of MVP Advisor to repay our loans could be adversely impacted.  We have not forgiven the balance due from MVP Advisor; however the decision by MVP Advisor to forgive certain amounts creates additional uncertainty as to when we will be repaid the amounts loaned to MVP Advisor. Based on these uncertainties, we have determined to fully impair the balance of this investment and note receivable.

As consideration for the initial investment of $0.2 million MVP CP II received 8,000 shares of common stock in MVP REIT II.  As of September 30, 2016 we have made loans of approximately $2.0 million to MVP CP II.  Similar to our investments in MVP Advisors in connection with MVP REIT, the return on our investment in MVP CP II in connection with MVP REIT II, including the ability of MVP CP II to repay its loans, will likely depend upon the success of the pending public offering of MVP REIT II and the ability of MVP CP II and MVP Advisor to successfully deploy the offering proceeds.  Based on uncertainties regarding repayment, during the nine months ended September 30, 2016, we have determined to fully impair the entire balance of this loan.

As of September 30, 2016 and December 31, 2015, MVP CP II owed VRM I approximately $3.2 million and $0.7 million, respectively.

From time to time, we may also jointly invest in real property or real estate loans with our affiliates, including VRM I, MVP REIT, Inc. and MVP REIT II, Inc.  These investments are described elsewhere in this report and incorporated herein by reference.

From time to time, we may also acquire or sell investments in real estate or in real estate loans from/to our manager or other related parties.  Pursuant to the terms of our Management Agreement, such acquisitions and sales are made without any mark up or mark down.  No gain or loss is recorded on these transactions, as it is not our intent to make a profit on the purchase or sale of such investments.  The purpose is generally to diversify our portfolio by syndicating loans and real estate investments, thereby providing us with additional capital to make additional loans and investments in real estate.

On November 25, 2014, Shustek Investments Inc., a company wholly owned by our CEO Mike Shustek, entered into a loan purchase contract with us to acquire a loan with a book value of approximately $2.4 million. The loan was originated during March 2009 with an original principal balance of $7.45 million earning interest at a rate of 11% per annum. The borrower made principal payments during the life of the loan; however, they also received extensions for the maturity of the note. As of the date of the loan purchase contract, the loan was extended through January 2015.  The purchase price of the loan was approximately $3.0 million, which includes the purchase of interest assigned to third parties. As additional consideration we may receive 50% of any amount collected in excess of the purchase price less any expenses incurred by Shustek Investments. After three years the 50% shall be reduced to 33%. This transaction resulted in a gain on sale of loan – related party totaling approximately $0.6 million for the year ended December 31, 2014.  During the nine months ended September 30, 2015, this loan was paid in full and we received approximately $1.6 million.

-21-

NOTE J — NOTES PAYABLE

In April 2015, we financed a 12-month insurance policy for Directors and Officers liability, with an annual interest rate of 2.9%.  The agreement required a down payment of $39,000 and nine monthly payments of $25,000 beginning on May 27, 2015.  During December 2015, the outstanding balance of the note was paid in full.

In April 2016, we financed a 12-month insurance policy for Directors and Officers liability, with an annual interest rate of 3.8%.  The agreement required a down payment of $37,000 and nine monthly payments of $21,000 beginning on May 27, 2016.  As of September 2016, the outstanding balance of the note was approximately $0.1 million.

During April 2014, through the acquisition of SE Properties, the Company assumed the liability on a loan with a balance of approximately $3.4 million, collateralized by real property located in Las Vegas, Nevada, bearing an annual interest rate of 6.625%, and payable in monthly installment payments of principal and interest totaling approximately $25,000 maturing in January 2036.  During January 2016 this loan was assigned to the buyer and the Company was released from the debt through the sale of the property.

During April 2014, through the acquisition of ExecuSuites, the Company assumed the liability on a loan with a balance of approximately $3.1 million, collateralized by real property located in Las Vegas, Nevada, bearing an annual interest rate of 5.875%, and payable in monthly installment payments of principal and interest totaling approximately $21,000 maturing in May 2037.  During January 2016 this loan was assigned to the buyer and the Company was released from the debt through the sale of the property.

During July 2014, through the acquisition of Building C, the Company assumed the liability on a loan with a balance of approximately $8.4 million, collateralized by real property located in Las Vegas, Nevada, bearing an annual interest rate of 4.81%, and payable in monthly installment payments of principal and interest totaling approximately $49,000, with a lump sum payment of approximately $7.0 million due at maturity in April of 2021.  During January 2016 this loan was assigned to the buyer and the Company was released from the debt through the sale of the property.

On May 16, 2014, Wolfpack, LLC and Devonshire, LLC entered into a loan agreement with a financial institution in the amount of $7.8 million, collateralized by real property held in Las Vegas, Nevada. The loan bears an annual interest rate of 4.6% and is payable in monthly installment payments of principal and interest totaling approximately $50,000, with a lump sum payment of approximately $6.3 million due at maturity in June of 2024. This loan agreement replaces their previous loans which held balances of approximately $3.9 million and $3.9 million, respectively, at payoff. During April 2016 this loan was assigned to the buyer and the Company was released from the debt through the sale of the property.

During August 2014, through the acquisition of Building A, the Company assumed the liability on a loan with a balance of approximately $8.4 million, collateralized by real property located in Las Vegas, Nevada, bearing an annual interest rate of 4.969%, and payable in monthly installment payments of principal and interest totaling approximately $46,000, with a lump sum payment of approximately $7.8 million due at maturity in April of 2019.  During May 2016 this loan was assigned to the buyer and the Company was released from the debt through the sale of the property.

As of September 30, 2016, future principal payments on the notes payable are as follows:

2016	$	84,000
2017		--
2018		--
2019		--
2020		--
Thereafter		--
Total	$	84,000

NOTE K— FAIR VALUE

As of September 30, 2016 and December 31, 2015, financial assets and liabilities utilizing Level 1 inputs included investment in marketable securities - related party and third party.  We had no assets or liabilities utilizing Level 2 inputs, and assets and liabilities utilizing Level 3 inputs included investments in real estate loans and investments in equity method investees, both held for sale and not held for sale.

-22-

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment.  Accordingly, our degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.  In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy.  In such cases, an asset or liability will be classified in its entirety based on the lowest level of input that is significant to the measurement of fair value.

Fair value is a market-based measure considered from the perspective of a market participant who holds the asset or owes the liability rather than an entity-specific measure.  Therefore, even when market assumptions are not readily available, our own assumptions are set to reflect those that market participants would use in pricing the asset or liability at the measurement date.  We use prices and inputs that are current as of the measurement date, including during periods of market dislocation, such as the recent illiquidity in the auction rate securities market.  In periods of market dislocation, the observability of prices and inputs may be reduced for many instruments.  This condition may cause our financial instruments to be reclassified from Level 1 to Level 2 or Level 3 and/or vice versa.

Our valuation techniques will be consistent with at least one of the three possible approaches: the market approach, income approach and/or cost approach.  Our Level 1 inputs are based on the market approach and consist primarily of quoted prices for identical items on active securities exchanges.  Our Level 2 inputs are primarily based on the market approach of quoted prices in active markets or current transactions in inactive markets for the same or similar collateral that do not require significant adjustment based on unobservable inputs.  Our Level 3 inputs are primarily based on the income and cost approaches, specifically, discounted cash flow analyses, which utilize significant inputs based on our estimates and assumptions.

The following table presents the valuation of our financial assets and liabilities as of September 30, 2016 and December 31, 2015, measured at fair value on a recurring basis by input levels:

	Fair Value Measurements at Reporting Date Using
	Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance at 09/30/16		Carrying Value on Balance Sheet at 09/30/16
Assets
Investment in marketable securities - related party	$	455,000	$	--	$	--	$	455,000	$	455,000
Investment in real estate loans	$	--	$	--	$	5,460,000	$	5,460,000	$	5,447,000

	Fair Value Measurements at Reporting Date Using
	Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance at 12/31/15		Carrying Value on Balance Sheet at 12/31/15
Assets
Investment in marketable securities - related party	$	262,000	$	--	$	--	$	262,000	$	262,000
Investment in real estate loans	$	--	$	--	$	2,148,000	$	2,148,000	$	2,161,000

-23-

The following table presents the changes in our financial assets and liabilities that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3) from January 1, 2016 to September 30, 2016:

	Investment in real estate loans
Balance on January 1, 2016	$	2,148,000
Purchase and additions of assets
New mortgage loans and mortgage loans acquired		7,340,000
Purchase from third parties		--
Sales, pay downs and reduction of assets
Collections and settlements of principal and sales of investment in real estate loans		(47,000	)
Sale of assets to third parties		(4,008,000	)
Temporary change in estimated fair value based on future cash flows		27,000
Balance on September 30, 2016, net of temporary valuation adjustment	$	5,460,000

The following table presents the changes in our financial assets and liabilities that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3) from January 1, 2015 to December 31, 2015:

	Investment in real estate loans
Balance on January 1, 2015	$	5,167,000
Purchase and additions of assets
New mortgage loans and mortgage loans acquired		5,217,000
Purchase from third parties		200,000
Sales, pay downs and reduction of assets
Collections and settlements of principal and sales of investment in real estate loans		(5,971,000	)
Sale of assets to third parties		(2,472,000	)
Temporary change in estimated fair value based on future cash flows		7,000
Balance on December 31, 2015, net of temporary valuation adjustment	$	2,148,000

NOTE L— EMPLOYEE BENEFIT PLAN

MVP Advisors maintains a 401(k) Plan (the "Plan"), which is a defined contribution plan covering all eligible employees. Under the provisions of the Plan, participants may direct the Company to defer a portion of their compensation to the Plan, subject to Internal Revenue Code limitations. The Company provides for an employer matching contribution equal to 100% of the first 3% of eligible compensation and 50% of the next 2% of eligible compensation contributed by each employee, which is funded in cash. All contributions vest immediately.

Total expense recorded for the matching 401(k) contribution in the three and nine months ended September 30, 2016was approximately $12,000 and $39,000, respectively.

NOTE M — SEGMENT INFORMATION

Company management reviews financial and operating performance in the following three separate operating segments:  (1) investment in real estate loans, (2) investments in real property and (3) investment in a real estate management company.  Selling, general and administrative expenses, primarily consisting of compensation of employees, seminar expense, professional fees and overhead costs not directly related to a specific operating segment, are reflected in the table below as corporate activities.

Assets related to investments in real property are currently listed as held for sale. Revenues, net of expenses for this segment are reported in discontinued operations.

-24-

The following are certain financial data for the Company's operating segments for the periods:

	For The Three Months Ended September 30,				For The Nine Months Ended September 30,
	2016		2015		2016		2015
Revenues
Investment in real estate loans	$	236,000	$	560,000	$	668,000	$	2,732,000
Investments in real property held for sale		735,000		29,000		1,982,000		1,331,000
Investment in real estate management		293,000		164,000		840,000		372,000
Total revenues		1,264,000		753,000		3,490,000		4,435,000
Operating expenses
Investment in real estate loans	$	274,000	$	274,000	$	823,000	$	822,000
Investment in real property		1,000		1,000		3,000		3,000
Investment in real estate management		675,000		884,000		1,847,000		2,598,000
Corporate activities		2,708,000		3,196,000		7,210,000		7,505,000
Total expenses		3,658,000		4,355,000		9,883,000		10,928,000

Total Assets	September 30, 2016		December 31, 2015
Investment in real estate loans	$	8,673,000	$	4,003,000
Investment in real property held for sale		--		44,545,000
Corporate assets		7,143,000		5,442,000
Total assets	$	15,816,000	$	53,990,000

NOTE N — RECENT ACCOUNTING PRONOUNCEMENTS

In February 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis, which provides guidance on the consolidation evaluation for reporting organizations that are required to evaluate whether they should consolidate certain legal entities. In accordance with the guidance, all legal entities are subject to reevaluation under the revised consolidation model. The guidance is effective in the first and second quarter of 2016, and early adoption is permitted. We are currently evaluating the potential impact of the adoption of ASU 2015-02 on our consolidated financial statements.

On April 17, 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs, which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the associated debt liability.  Currently, debt issuance costs are recorded as an asset and amortization of these deferred financing costs is recorded in interest expense.  Under the new standard, debt issuance costs will continue to be amortized over the life of the debt instrument and amortization will continue to be recorded in interest expense.  The new standard is effective for the Company on January 1, 2016 and will be applied on a retrospective basis.  The Company is currently evaluating ASU 2015-03, and anticipates a change in our presentation only since the standard does not alter the accounting for debt issuance costs.

NOTE O — LEGAL MATTERS INVOLVING THE COMPANY

On February 7, 2012, we, VRM I and Fund III entered into a Deed in Lieu Agreement with a borrower in lieu of the foreclosure of our subordinated secured loan which had matured on December 31, 2011, with a principal balance, net of allowance for loan loss, of approximately $9.9 million, of which our portion was approximately $9.0 million. Pursuant to the Deed in Lieu Agreement, our subsidiary 1701 Commerce, LLC ("1701 Commerce") received a deed to the secured property operated as the Sheraton Hotel and Spa Fort Worth, Texas (the "Hotel").  On March 26, 2012, 1701 Commerce filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Northern District of Texas, Ft. Worth Division, to seek relief from a pending foreclosure of the Hotel by the senior mortgage lien holder and to preserve and protect 1701 Commerce's equity and the interests of other Hotel creditors.  Due to the uncertainty and disputes involving the Hotel, we recorded this investment as Other Real Estate Owned on our balance sheet until August 23, 2012. On July 17, 2013 the Hotel was sold to a third party for the sum of $49.3 million.  The net proceeds of the sale and the cash on hand as of the date of the sale were used to pay all 1701 Commerce creditors 100% of their claim plus interest, with the balance distributed to us and our two partners, VRM I and Fund III. On February 4, 2015, the court entered its final decree closing the case.

-25-

We hold an interest of approximately 90%, VRM I holds an interest of approximately 8% and Fund III holds an interest of approximately 2% in 1701 Commerce.

In addition to the matters described above, we are involved in a number of other legal proceedings concerning matters arising in the ordinary course of our business activities.  We believe we have meritorious defenses to each of these actions and intend to defend them vigorously.  Other than the matters described above, we believe that we are not a party to any pending legal or arbitration proceedings that would have a material adverse effect on our financial condition or results of operations or cash flows, although it is possible that the outcome of any such proceedings could have a material impact on our operations in any particular period.

VOT Hawaii Management, Inc. ("VOT Hawaii") is preparing to bring claims in arbitration against Vestin Mortgage, LLC as the successor in interest to Vestin Mortgage, Inc., and several other Vestin entities, specifically Vestin Capital, Inc., Vestin Fund I, LLC, Vestin Fund II, LLC, Vestin Group, Inc., Vestin Mortgage, Inc., Vestin Realty Mortgage I, Inc., Vestin Realty Mortgage II, Inc., and Vestin Originations, Inc. 

Rightstar Hawaii Management, Inc., ("Rightstar"), a company that operated a funeral and cemetery business in Hawaii, had defaulted on a loan from certain Vestin entities.  In connection with foreclosing on Rightstar's assets, Vestin Capital, Inc., Vestin Fund I, LLC, Vestin Fund II, LLC, Vestin Group, Inc., Vestin Mortgage, Inc., Vestin Realty Mortgage I, Inc., Vestin Realty Mortgage II, Inc., and Vestin Originations, Inc. entered into an October 2008 Pre-Foreclosure Sale Management Services and Consulting Agreement (the "Agreement") with Rightstar (being operated under the authority granted to court-appointed receiver Marie N. Milks) and VOT Hawaii, under which VOT Hawaii was employed as a death care industry consultant to professionally manage, and attempt to improve operations of Rightstar, pending foreclosure of Rightstar's assets.

VOT Hawaii's arbitration claims are for amounts allegedly owed to VOT Hawaii (either directly or by assignment) under the Agreement.  Its first claim is a breach of contract claim intended to recover a $500,000 "Base Success Fee" and a contingent success fee that VOT Hawaii calculated to total $30,797,200, allegedly owed to VOT Hawaii's president, David Mickits.  VOT Hawaii's second claim is for tortious interference with a contract, alleging that the Vestin entities caused Hawaii Funeral Services, LLC, as successor to Rightstar, to not pay VOT Hawaii 2 1/3 months of a $22,500 base consulting fee ($52,500), to have been paid by Rightstar under the Agreement. VOT Hawaii also seeks attorneys' fees and pre- and post-judgment interest.  The Company believes the claims asserted are without merit and the Company intends to vigorously defend itself against such claims.

NOTE Q — COMMITMENTS AND CONTINGENCIES

Amended Income Tax Returns

Earlier this year we learned that our federal income tax return for 2013 reported income that we never recognized nor received.  The tax return, which was prepared by an outside tax accounting firm, reported income of approximately $11,137,000, which had the effect of erroneously reducing our reported net operating losses by approximately $11 million.  Our aggregate net operating losses are approximately $228.2 million; therefore, the incorrect reported income of approximately $11,137,000 did not result in us paying any federal income taxes for 2013.  We have filed amended tax returns for 2013 and 2014 to correct the error.  The outside tax accounting firm involved with this filing has been terminated.

Our financial statements never included the non-existent income and no restatement of our financial statements is necessary.

Our audit committee is currently investigating this matter.  In its investigation, the audit committee is reviewing, among other things, (i) the actions of our former outside tax accountants who prepared the tax return reporting non-existent income, (ii) what if any involvement or knowledge our officers or directors had with respect to the filing of the tax return in question and (iii) what if any internal control weaknesses may have contributed to the incorrect tax filing. While the audit committee's investigation is on-going and no final conclusions have been reached, we believe that we may have been victimized by a scheme to improperly reduce the taxes of an unrelated third party. Although we did not receive any benefit from the reporting of non-existent income on our tax return, it is possible the Internal Revenue Service could investigate the matter and seek to impose penalties upon us. We believe we have meritorious defenses to any such claim.

NOTE R — SUBSEQUENT EVENTS

There have been no material subsequent events to evaluate through the date of this filing with the SEC.

-26-

ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a financial review and analysis of our financial condition and results of operations for the three and nine months ended September 30, 2016 and 2015. This discussion should be read in conjunction with our financial statements and the notes thereto and Management's Discussion and Analysis of Financial Conditions and Results of Operations in our annual report on Form 10-K for the year ended December 31, 2015. The following information contains forward-looking statements, which are subject to risks and uncertainties. Should one or more of these risks or uncertainties materialize, actual results may differ materially from those expressed or implied by the forward-looking statements. Please see "Forward-Looking Statements" below for a description of some of these risks and uncertainties.

FORWARD-LOOKING STATEMENTS

Certain statements in this report, including, without limitation, matters discussed under this Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations, should be read in conjunction with the consolidated financial statements, related notes, and other detailed information included elsewhere in this report on Form 10-Q.  We are including this cautionary statement to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Statements that are not historical fact are forward-looking statements.  Certain of these forward-looking statements can be identified by the use of words such as "believes," "anticipates," "expects," "intends," "plans," "projects," "estimates," "assumes," "may," "should," "will," or other similar expressions.  Such forward-looking statements involve known and unknown risks, uncertainties and other important factors, which could cause actual results, performance or achievements to differ materially from future results, performance or achievements.  These forward-looking statements are based on our current beliefs, intentions and expectations.  These statements are not guarantees or indicative of future performance.  Important assumptions and other important factors that could cause actual results to differ materially from those forward-looking statements include, but are not limited to, those factors, risks and uncertainties of this Quarterly Report on Form 10-Q, our Annual Report on Form 10-K and in our other securities filings with the Securities and Exchange Commission ("SEC").  Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and involve inherent risks and uncertainties.  Our estimates of the value of collateral securing our loans may change, or the value of the underlying property could decline subsequent to the date of our evaluation.  As a result, such estimates are not guarantees of the future value of the collateral.  The forward-looking statements contained in this report are made only as of the date hereof.  We undertake no obligation to update or revise information contained herein to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

RESULTS OF OPERATIONS

OVERVIEW

Our investment strategy is to invest in a portfolio of real estate secured loans (including first and second mortgage loans, mezzanine loans, bridge loans, convertible mortgages, variable interest rate real estate secured loans, where a portion of the return is dependent upon performance-based metrics and other loans related to real estate), and direct investments in real property that meet our investment objectives.    In addition, we invest in companies that manage real estate or mortgage investment programs.  We have recently increased our investments in such companies.

During the nine months ended September 30, 2016, we funded one loan totaling approximately $3.7 million.  During the nine months ended September 30, 2015, we funded three loans totaling approximately $0.2 million.  As of September 30, 2016, our loan-to-value ratio was 46.97%, net of allowances for loan losses, on a weighted average basis, generally using updated appraisals.

Through our interest in MVP Advisor and MVP CP II, we have directed, and may continue to direct, a portion of our cash towards development of the businesses of MVP REIT and MVP REIT II.

-27-

As of September 30, 2016, we have made loans of approximately $12.9 million, which amount has been fully allowed for, to our 60% owned subsidiary, MVP Advisors, the manager of MVP REIT.  MVP REIT is a SEC-registered, non-traded REIT that seeks to invest predominantly in parking facilities located throughout the United States as its core assets.  We believe MVP Advisors has the opportunity to generate fees for the services it renders to MVP REIT.  However, MVP REIT recently completed its initial publicly registered offering in September 2015 and the fees paid to date to MVP Advisors have not been significant.  We may not realize interest income from the loan to MVP Advisors or any return on our investment in MVP Advisors until it is able to generate sufficient fees to service the interest on our loan and generate a return on our investment. We have recorded an impairment of this investment due to uncertainty as to if and when we will be repaid the amounts loaned.  To further support development of the business of MVP REIT, MVP Advisors also has agreed to waive certain fees and expense reimbursements it otherwise would have been entitled to receive under the terms of its advisory agreement with MVP REIT. MVP Advisors ability to repay the loans and the return on our investment in MVP Advisors will likely depend upon the success of MVP REIT's ability to successfully deploy the offering proceeds. We expect such investments to ultimately generate a return through management fees payable by MVP REIT to MVP Advisors.  If MVP REIT is unable to deploy the capital and operate its business successfully, then our return on our investment in MVP Advisors and the ability of MVP Advisors to repay our loans could be adversely impacted.

During May 2015, our Board of Directors and the Board of Directors of VRM I agreed to form MVP CP II. We own 60% and VRM I owns 40%.  The purpose of MVP CP II is to act as the sponsor of MVP REIT II. MVP REIT II has filed its initial registration statement with the SEC and all of the states.  MVP REIT II's registration statement was declared effective by the SEC on October 22, 2015.  MVP REIT II is offering up to $550,000,000 in shares of common stock.  Through September 30, 2016, MVP REIT II had raised an aggregate of approximately $44.9 million through the sale of its common stock.  On November 1, 2016, MVP REIT II also disclosed that it is offering up to $50,000,000 in shares of its Series A Convertible Redeemable Preferred Stock in a private placement to accredited investors. The proceeds raised from the offerings are being used primarily to acquire parking assets in the United States and Canada. MVP REIT II has engaged MVP Advisors as its advisor.

We and VRM I have agreed to fund certain costs and expenses of MVP REIT II through MVP CP II in proportion to our respective ownership interest.  As consideration for the initial investment of $0.2 million MVP CP II received 8,000 shares of common stock in MVP REIT II.  As part of the advisory agreement, MVP Advisors is entitled to receive a 1% annual asset management fee and 2.25% of the purchase price on all acquisitions.  MVP Advisors is also entitled to receive the lesser of 3% of contract sale price or 50% of the brokerage commission paid on dispositions of MVP REIT II assets which amount shall accrue until the MVP REIT II investors have a return of their net capital and a 6% annual cumulative non compounded return. In addition once the MVP REIT II investors have received a return of their net capital invested and a 6% annual cumulative, non-compounded return, then MVP Advisors will be entitled to receive 15% of the remaining proceeds. This fee will be payable under only one of the following events: (i) if MVP REIT II shares are listed on a national securities exchange; (ii) if MVP REIT II assets are sold, other than single assets sold in the ordinary course, or liquidated; (iii) upon a merger, share exchange, reorganization or other transaction pursuant to which MVP REIT II investors receive cash or publicly traded securities in exchange for their shares; or (iv) upon termination of the advisory agreement. The operating agreement of the Advisor provides that once we and VRM I have been repaid in full for any capital contributions to the Advisor or for any expenses advanced on the Advisor's behalf, or capital investment, and once we and VRM I have received an annualized return on our capital investment of 7.5%, then Michael Shustek will receive 40% of the net profits of the Advisor.

As of September 30, 2016 we have made loans of approximately $5.0 million to MVP CP II.  Similar to our investments in MVP Advisor in connection with MVP REIT, the return on our investment in MVP CP II in connection with MVP REIT II, including the ability of MVP CP II to repay its loans, will likely depend upon the success of the pending securities offerings by MVP REIT II and the ability of MVP CP II and MVP Advisor to successfully deploy the offering proceeds. As with our investment in MVP REIT, while we expect any such investments to ultimately generate a return through management fees payable by MVP REIT II to MVP CP II and MVP Advisor, the amount of fees may not be significant in the near term as MVP REIT II begins its operations. If MVP REIT II is unable to raise sufficient capital in its publicly registered offering or deploy the capital and operate its business successfully, then our return on our investment in MVP CP II and the ability of MVP CP II to repay our loans could be adversely impacted.  Based on this uncertainty, we have determined to fully impair the balance of our $1.1 million loan to MVP CP II.

-28-

During April 2015, we committed to a plan to sell all interests in our six office buildings, at which point we began classifying the related assets as assets held for sale, and the related liabilities as liabilities related to assets held for sale. Additionally, we have classified the six office building's results as discontinued operations.  On January 29, 2016, we closed on the sale of its interest in three office buildings that we owned with VRM I through various subsidiaries.  The first building was owned by Building C, LLC and is located at 8930 West Sunset Road, Las Vegas, Nevada (the "8930 Building").  The second building was owned by SE Property Investments, LLC and is located at 8905 West Post Road, Las Vegas, Nevada (the "8905 Building") and the third building was owned by ExecuSuite Properties, LLC and is located at 8945 West Post Road, Las Vegas, Nevada (the "8945 Building").

The sales price for the 8930 Building was $12.1 million less the current debt on the property of approximately $8.1 million, which was assumed by the purchaser for a net of approximately $4.0 million of which our share was approximately $2.9 million.  The sales price for the 8905 Building was $5.6 million less the current debt on the property of approximately $3.3 million, which was assumed by the purchaser for a net of approximately $2.3 million of which our share was approximately $1.6 million.  The sales price for the 8945 Building was $5.0 million less the current debt on the property of approximately $3.0 million, which was assumed by the purchaser for a net of approximately $2.0 million of which our share was approximately $1.4 million.

On April 5, 2016, we closed on the sale of our interest in two office buildings that we owned with VRM I through various subsidiaries.  The first building was owned by Wolfpack Properties, LLC and is located at 8860 West Sunset Road, Las Vegas, Nevada (the "8860 Building").  The second building was owned by Devonshire, LLC and is located at 8925 West Post Road, Las Vegas, Nevada (the "8925 Building").

The sales price for the 8860 Building was $5.5 million and the sales price for the 8925 Building is $5.4 million less the combined current debt on the properties, which was assumed by the purchaser for a net of approximately $7.6 million of which our share was approximately $5.5 million.

On May 13, 2016, we closed on the sale of our interest in an office building that we owned with VRM I through various subsidiaries.  The building was owned by Building A, LLC and is located at 8880 West Sunset Road, Las Vegas, Nevada (the "8880 Building").

The sales price for the 8880 Building was $12.3 million less the combined current debt on the properties, which was assumed by the purchaser for a net of approximately $8.2 million of which our share was approximately $5.9 million.

We and VRM I, through its subsidiaries, have the right, for a period of one year from the closing dates of the building sales, to repurchase one or more of the buildings at a price equal to (i) the sales price for each building, plus (ii) $65,000 for the 8930 Building, $65,000 for the 8880 building, $30,000 for the 8905 Building, $30,000 for the 8860 Building, $30,000 for the 8925 Building and $30,000 for the 8945 Building, plus (iii) twelve percent less any profit realized by the purchaser of the building being repurchased.  Stable Development, LLC, a limited liability company is the manager of and owns a 15% interest in each of the purchasers.  Due to this repurchase right, we have recorded the gain on sale as deferred revenue, to be recognized when the repurchase right is exercised or expires.  Lance Bradford, the former President of MVP REIT is an owner of Stable Development, LLC.

As of September 30, 2016, VRM II held 5,000 shares of MVP REIT II's outstanding common stock, purchased in December 2015, for $125,000.

Our financial results, including the sources of our revenues and expenses, for the three and nine months ended September 30, 2016reflect, in significant part, the shift in our investment focus from real estate secured loans to direct investments in a real estate management company.  So long as such real estate investments remain part of our investment portfolio, we would expect that, in the near term, expenses relating to our investments in MVP REIT and MVP REIT II will continue to make up a greater portion of our total expenses.  Our advisor fee income and acquisition fee income related to our investment in MVP Advisors and MVP CP II also may become a more significant source of revenues in the future, depending upon the level of success achieved by MVP Advisors and MVP CP II in their management of MVP REIT and MVP REIT II. If we decide to make more direct investments in real estate, rental income may make up a greater portion of our total revenues. While we do not anticipate any near term change in the composition of our revenues, we may, from time to time, decide to sell one or more of our investments, including our real property investments, and redeploy those assets in investments in real estate secured loans, direct investments in real property or other real property related investments.

-29-

SUMMARY OF FINANCIAL RESULTS

Comparison of operating results for the three months ended September 30, 2016 and the three months ended September 30, 2015

Total Revenue:	2016		2015		$ Change			% Change
Interest income from investment in real estate loans	$	236,000	$	47,000	$	189,000			402	%
Gain related to pay off of notes receivable, including recovery of allowance for notes receivable		--		513,000		(513,000	)		(100	%)
Acquisition fee income		735,000		29,000		706,000			2434	%
Advisor fee		293,000		164,000		129,000			79	%
Total	$	1,264,000	$	753,000	$	511,000			68	%

Our revenue from interest income is dependent upon the balance of our investment in real estate loans and the interest earned on these loans.  Acquisition fee and advisor fee income is related to MVP Advisors, which advises MVP REIT and MVP REIT II and earns certain fees for these services.  During the three months ended September 30, 2016, MVP REIT and MVP REIT II purchased properties which resulted in acquisition fee income of approximately $0.5 million.  During the three months ended September 30, 2016, MVP REIT and MVP REIT II paid a combined advisor fee income of approximately $0.4 million.

For additional information see Note D – Investments in Real Estate Loans of the Notes to the Consolidated Financial Statements included in Part I, Item 1  Financial Statements  of this Quarterly Report on Form 10-Q.

Operating expenses:	2016		2015		$ Change			% Change
Management fees – related party	$	274,000	$	274,000	$	--			--
MVP REIT II organization and offering costs		--		436,000		(436,000	)		(100	%)
Wages and benefits		675,000		884,000		(209,000	)		(24	%)
Interest expense		1,000		1,000		--			--
Acquisition expense		--		--		--			--
Depreciation		--		1,000		(1,000	)		(100	%)
Professional fees		187,000		264,000		(77,000	)		(29	%)
Seminars		307,000		450,000		(143,000	)		(32	%)
Consulting		17,000		41,000		(24,000	)		(59	%)
Insurance		62,000		64,000		(2,000	)		(3	%)
Commissions		1,715,000		1,507,000		208,000			14	%
Travel		115,000		214,000		(99,000	)		(46	%)
Other		305,000		219,000		86000			39	%
Total	$	3,658,000	$	4,355,000	$	(697,000	)		(16	%)

Wages and benefits were lower during the three months ended September 30, 2016 due to decrease in staff compared to the three months ended September 30, 2015.  During the three months ended September 30, 2016, MVP Advisors incurred and paid a 5.25% commission, totally approximately $1.7 million, to third party brokers for all MVP REIT common shares sold in its in initial public offering (which closed in September 2015) compared to $1.5 million in 2015.

Non-operating income:	2016		2015		$ Change			% Change
Gain on sale of marketable securities		--		1,000		(1,000	)		(100	%)
Gain related to recovery of allowance on note payable – related party		--		24,000		(24,000	)		(100	%)
Other income	$	2,000	$	--	$	2,000			100	%
Total	$	2,000	$	25,000	$	(23,000	)		(92	%)

-30-

Discontinued operations, net of income taxes:	2016			2015			$ Change			% Change
Expenses related to real estate owned held for sale	$	(1,000	)	$	(103,000	)	$	102,000			(99	%)
Loss on sale of assets held for sale		--			--			--			--
Income (loss) from assets held for sale, net of income taxes		6,000			339,000			(333,000	)		(98	%)
Recovery from fully impaired real estate held for sale		--			396,000			(396,000	)		(100	%)
Total	$	5,000		$	632,000		$	(627,000	)		(99	%)

Discontinued operations related to properties that have entered into a purchase sales agreement and are recorded as assets held for sale.

For additional information see Note F – Assets Held for Sale of the Notes to the Financial Statements included in Part I, Item 1 Financial Statements  of this Quarterly Report on Form 10-Q.

Comparison of operating results for the nine months ended September 30, 2016 and the nine months ended September 30, 2015

Total Revenue:	2016		2015		$ Change			% Change
Interest income from investment in real estate loans	$	655,000	$	570,000	$	85,000			15	%
Gain related to pay off of real estate loan, including recovery of allowance for loan loss		--		1,623,000		(1,623,000	)		(100	%)
Gain related to pay off of notes receivable, including recovery of allowance for notes receivable		13,000		539,000		(526,000	)		(98	%)
Acquisition fee income		1,982,000		1,331,000		651,000			49	%
Advisor fee		840,000		372,000		468,000			126	%
Total	$	3,490,000	$	4,435,000	$	(945,000	)		(21	%)

Our revenue from interest income is dependent upon the balance of our investment in real estate loans and the interest earned on these loans.

Acquisition fee and advisor fee income is related to MVP Advisors, which advises MVP REIT and MVP REIT II and earns certain fees for these services.  During the nine months ended September 30, 2016, MVP REIT and MVP REIT II purchased properties which resulted in acquisition fee income of approximately $1.7 million.  During the nine months ended September 30, 2016, MVP REIT and MVP REIT II paid a combined advisor fee income of approximately $0.9 million.

On November 25, 2014, Shustek Investments Inc., a company wholly owned by our CEO Mike Shustek, entered into a loan purchase contract with us to acquire a loan with a book value of approximately $2.4 million. The loan was originated during March 2009 with an original principal balance of $7.45 million earning interest at a rate of 11%.  The borrower made principal payments during the life of the loan; however, they also received extensions for the maturity of the note. As of the date of the loan purchase contract, the loan was extended through January 2015.

The purchase price of the loan was approximately $3.0 million, which includes the purchase of interest assigned to third parties. As additional consideration we may receive 50% of any amount collected in excess of the purchase price less any expenses incurred by Shustek Investments. After three years, the 50% shall be reduced to 33%. This transaction resulted in a gain on sale of loan – related party totaling approximately $0.6 million for the year ended December 31, 2014.  During the three months ended March 31, 2015 this loan was paid in full, and we received approximately $1.6 million.

For additional information see Note D – Investments in Real Estate Loans of the Notes to the Consolidated Financial Statements included in Part I, Item 1  Financial Statements  of this Quarterly Report on Form 10-Q.

-31-

Operating expenses:	2016		2015		$ Change			% Change
Management fees – related party	$	823,000	$	822,000	$	1,000			--
MVP REIT II organization and offering costs		2,000		1,015,000		(1,013,000	)		(100	%)
Wages and benefits		1,847,000		2,598,000		(751,000	)		(29	%)
Interest expense		3,000		2,000		1,000			50	%
Acquisition expense		--		1,000		(1,000	)		(100	%)
Depreciation		2,000		1,000		1,000			100	%
Professional fees		806,000		814,000		(8,000	)		(1	%)
Seminars		1,029,000		1,146,000		(117,000	)		(10	%)
Consulting		77,000		181,000		(104,000	)		(57	%)
Insurance		173,000		194,000		(21,000	)		(11	%)
Commissions		3,808,000		2,836,000		972,000			34	%
Travel		490,000		806,000		(316,000	)		(39	%)
Other		823,000		512,000		311,000			61	%
Total	$	9,883,000	$	10,928,000	$	(1,045,000	)		(10	%)

Wages and benefits were lower during the nine months ended September 30, 2016 due to decrease in staff compared to the nine months ended September 30, 2015. During the nine months ended September 30, 2016, MVP Advisors incurred and paid a 5.25% commission, totaling approximately $3.8 million, to third party brokers for all MVP REIT common shares sold in its in initial public offering (which closed in September 2015) compared to $2.8 million in 2015.

Non-operating income:	2016		2015		$ Change			% Change
Gain related to recovery of allowance on note payable – related party	$	--	$	24,000	$	(24,000	)		(100	%)
Other income		7,000		--		7,000			100	%
Recovery from settlement with loan guarantor		261,000		--		261,000			100	%
Gain on marketable securities		--		2,000		(2,000	)		(100	%)
Dividend Income		2,000		--		2,000			100	%
Total	$	270,000	$	26,000	$	244,000			938	%

During the nine months ended September 30, 2016 we received payments from a loan guarantor for three different loans in the amount $261,000. No such payments were received in the nine months ended September 30, 2015.

Discontinued operations, net of income taxes:	2016			2015			$ Change			% Change
Expenses related to real estate owned held for sale	$	(50,000	)	$	(298,000	)	$	248,000			(83	%)
Disposition expense		(753,000	)		--			(753,000	)		(100	%)
Loss on sale of asset held for sale		(66,000	)		--			(66,000	)		(100	%)
Income (loss) from assets held for sale, net of income taxes		(618,000	)		1,002,000			(1,620,000	)		(162	%)
Recovery from fully impaired real estate held for sale		1,303,000			396,000			907,000			229	%
Total	$	(184,000	)	$	1,100,000		$	(1,284,00	)		(117	%)

Discontinued operations related to properties that have entered into a purchase sales agreement and are recorded as assets held for sale.

For additional information see Note F – Assets Held for Sale of the Notes to the Financial Statements included in Part I, Item 1 Financial Statements  of this Quarterly Report on Form 10-Q.

CAPITAL AND LIQUIDITY

Liquidity is a measure of a company's ability to meet potential cash requirements, including ongoing commitments to fund lending activities and general operating purposes.  Subject to a 3% reserve, we generally seek to use all of our available funds to invest in real estate assets.  Distributable cash flow generated from such loans is paid out to our stockholders, in the form of a dividend.  We do not anticipate the need for hiring any employees, acquiring fixed assets such as office equipment or furniture, or incurring material office expenses during the next twelve months.  We may pay our manager an annual management fee of up to 0.25% of the aggregate capital received by Fund II and us from the sale of shares or membership units.

-32-

During the nine months ended September 30, 2016, net cash flows used in operating activities were approximately $5.9 million.  Operating cash flows were used for the payment of normal operating expenses such as management fees, accounting fees, legal bills and expenses related to real estate owned held for sale.  During the nine months ended September 30, 2016, cash flows related to investing activities consisted of cash used for investments in Delaware Statutory Trust of $1.5 million and investments in new real estate loans of approximately $7.3 million.  In addition, cash flows related to investing activities consisted of cash provided by sale of investments in real estate loans to third parties of approximately $4.0 million, payments on Delaware Statutory Trust of approximately $0.2 million and proceeds from the sale of assets held for sale of approximately $14.7 million.  Cash flows used in financing activities consisted of purchase of treasury stock of approximately $0.2 million, cash for payments on notes payable of approximately $0.1 million and distribution to non-controlling interest entity for real estate held for sale of approximately $4.3 million.

On November 25, 2014, Shustek Investments Inc., a company wholly owned by our CEO Mike Shustek, entered into a loan purchase contract with us to acquire a loan with a book value of approximately $2.4 million. The loan was originated during March 2009 with an original principal balance of $7.45 million earning interest at a rate of 11%. The borrower made principal payments during the life of the loan; however, they also received extensions for the maturity of the note. As of the date of the loan purchase contract, the loan was extended through January 2015.  The purchase price of the loan was approximately $3.0 million, which includes the purchase of interest assigned to third parties. As additional consideration we may receive 50% of any amount collected in excess of the purchase price less any expenses incurred by Shustek Investments. After three years the 50% shall be reduced to 33%. This transaction resulted in a gain on sale of loan – related party totaling approximately $0.6 million for the year ended December 31, 2014.  During the six months ended June 30, 2015 this loan was paid in full and we received approximately $1.6 million.

At September 30, 2016, we had approximately $5.2 million in cash, $0.6 million in marketable securities – related party, and approximately $15.8 million in total assets.  We intend to meet short-term working capital needs through a combination of proceeds from loan payoffs, loan sales, rental revenue, sales of real estate owned held for sale and/or borrowings.  We believe we have sufficient working capital to meet our operating needs during the next 12 months.

We have no current plans to sell any new shares.  Although a small percentage of our shareholders had elected to reinvest their dividends, we suspended payment of dividends in June 2008 and at this time are not able to predict when dividend payments will resume.  Accordingly, we do not expect to issue any new shares through our dividend reinvestment program in the foreseeable future.

When economic conditions permit, we may seek to expand our capital resources through borrowings from institutional lenders or through securitization of our loan portfolio or similar arrangements.  No assurance can be given that, if we should seek to borrow additional funds or to securitize our assets, we would be able to do so on commercially attractive terms.  Our ability to expand our capital resources in this manner is subject to many factors, some of which are beyond our control, including the state of the economy, the state of the capital markets and the perceived quality of our loan and real estate portfolios.

During April 2012, we contributed $1,000 for a 40% interest in MVP Advisors. Mr. Shustek, through a wholly owned company named MVP Capital Partners, LLC ("MVP CP") contributed $1,500 for a 60% interest in MVP Advisors. In December 2013, we and MVP CP entered into a membership interest transfer agreement (the "Transfer Agreement"), dated as of December 19, 2013, pursuant to which we acquired from MVP CP an additional 20% of the membership interests (the "Acquired Interests") of MVP Advisor. The Company and VRM I now own 60% and 40%, respectively, of the aggregate membership interests of MVP Advisors.

Pursuant to the Transfer Agreement, we did not pay any up-front consideration for the Acquired Interests, but will be responsible for our proportionate share of future expenses of MVP Advisor. In recognition of MVP CP's substantial investment in MVP Advisor for which MVP CP received no up-front consideration, the Transfer Agreement and the amended operating agreement of MVP Advisor further provide that once we and VRM I have been repaid in full for any capital contributions to MVP Advisor or for any expenses advanced on MVP Advisor's behalf ("Capital Investment"), and once we and VRM I have received an annualized return on our Capital Investment of 7.5%, then MVP CP will receive one-third of the net profits of MVP Advisor.

-33-

Through our interest in MVP Advisor, we have directed, and may continue to direct, a portion of our cash towards development of the business of MVP REIT. As of June 30, 2013, we and MVP CP had loaned approximately $3.6 million and approximately $1.2 million, respectively, to MVP Advisors related to MVP REIT, Inc.  On June 30, 2013, MVP CP decided to forgive the full amount of its $1.2 million loan.  We have not forgiven the balance due from MVP Advisors. However the decision by MVP Advisors to forgive the full amount of its loans created uncertainty as to when we will be repaid the amounts loaned to MVP Advisors. Based on this uncertainty, we determined to treat as fully impaired the balance of this investment and note receivable. During the six months ended June 30, 2014, we provided additional advances to MVP Advisor of $1.0 million.  As of June 30, 2016 and 2015, we had notes receivable from MVP Advisor of approximately $12.9 million and $10.5 million, respectively, which amount has been fully allowed for. To further support development of the business of MVP REIT, MVP Advisors also has agreed to waive certain fees and expense reimbursements it otherwise would have been entitled to receive under the terms of its advisory agreement with MVP REIT. MVP Advisors ability to repay the loans and the return on our investment in MVP Advisors will likely depend upon the success of MVP REIT's public offering and its ability to successfully deploy the offering proceeds. While we expect any such investments to ultimately generate a return through management fees payable by MVP REIT to MVP Advisors, such fees may not be significant in the near term as MVP REIT only recently completed its initial public offering in September 2015, and over the next 12 months, there may be a diminution of our liquid assets.  If MVP REIT is unable to deploy the offering proceeds and operate its business successfully, then our return on our investment in MVP Advisors and the ability of MVP Advisors to repay our loans could be adversely impacted.

During May, 2015 our Board of Directors and the Board of Directors of VRM I agreed to form MVP CP II. We own 60% and VRM I owns 40%.  The purpose of MVP CP II is to act as the sponsor of MVP REIT II. MVP REIT II has filed its initial registration statement with the Securities Exchange Commission and all of the states. As of the date of this filing, MVP REIT II has been declared effective on October 23, 2015.  MVP REIT II is a proposed $550,000,000 offering with the proceeds raised from the offering being used primarily to acquire parking assets in the United States and Canada. MVP REIT II has engaged MVP Advisors as its advisor.

We and VRM I have agreed to fund certain costs and expenses of MVP REIT II through MVP CP II in proportion to our respective ownership interest.  As consideration for the initial investment of $0.2 million MVP CP II received 8,000 shares of common stock in MVP REIT II.  As part of the advisory agreement, MVP Advisors will receive a 1% annual asset management fee and 2.25% of the purchase price on all acquisitions.  MVP Advisors will also receive the lesser of 3% of contract sale price or 50% of the brokerage commission paid on dispositions of MVP REIT II, assets which amount shall accrue until the MVP REIT II investors have a return of their net capital and a 6% annual cumulative non compounded return. In addition once the MVP REIT II investors have received a return of their net capital invested and a 6% annual cumulative, non-compounded return, then MVP Advisors will be entitled to receive 15% of the remaining proceeds.

This fee will be payable under only one of the following events: (i) if MVP REIT II shares are listed on a national securities exchange; (ii) if MVP REIT II assets are sold, other than single assets sold in the ordinary course, or liquidated; (iii) upon a merger, share exchange, reorganization or other transaction pursuant to which MVP REIT II investors receive cash or publicly traded securities in exchange for their shares; or (iv) upon termination of the advisory agreement. The operating agreement of the Advisor provides that once we and VRM I have been repaid in full for any capital contributions to the Advisor or for any expenses advanced on the Advisor's behalf, or capital investment, and once we and VRM I have received an annualized return on our capital investment of 7.5%, then Michael Shustek will receive 40% of the net profits of the Advisor.  As of September30, 2016 we have made loans of approximately $4.8 million to MVP CP II, which have been impaired.

We maintain working capital reserves of approximately 3% in cash and cash equivalents, certificates of deposits and short-term investments or liquid marketable securities.  This reserve is available to pay expenses in excess of revenues, satisfy obligations of underlying properties, expend money to satisfy our unforeseen obligations and for other permitted uses of working capital.  As of November 9, 2016, we have met our 3% reserve requirement.

Investments in Real Estate Loans Secured by Real Estate Portfolio

We offer five real estate loan products consisting of commercial property, construction, acquisition and development, land, and residential loans.  The effective interest rates on all product categories range from 8% to 15%.  Revenue by product will fluctuate based upon relative balances during the period.  We had investments in 10 real estate loans, as of September 30, 2016, with a balance of approximately $7.9 million as compared to investments in eight real estate loans, as of December 31, 2015, with a balance of approximately $4.6 million.

-34-

For additional information on our investments in real estate loans, refer to Note D – Investments In Real Estate Loansof the Notes to the Financial Statements included in Part I, Item 1  Financial Statements of this Quarterly Report on Form 10-Q.

Asset Quality and Loan Reserves

As a commercial real estate lender willing to invest in riskier loans, rates of delinquencies, foreclosures and our losses on our loans could be higher than those generally experienced in the commercial mortgage lending industry.  Problems in the sub-prime residential mortgage market have adversely affected the general economy and the availability of funds for commercial real estate developers.  We believe this lack of available funds has led to an increase in defaults on our loans.  Furthermore, problems experienced in U.S. credit markets from 2007 through 2009 reduced the availability of credit for many prospective borrowers.  While credit markets have generally improved, the commercial real estate markets in some of our principal areas of operation have not recovered, thereby resulting in continuing constraints on the availability of credit in these markets.  These problems have made it more difficult for our borrowers to obtain the anticipated re-financing necessary in many cases to pay back our loans.  Thus, we have had to work with some of our borrowers to either modify, restructure and/or extend their loans in order to keep or restore the loans to performing status.  Our manager will continue to evaluate our loan portfolio in order to minimize risk associated with current market conditions.

Real Estate Investments

Investments in real estate are recorded at cost. Improvements and replacements are capitalized when they extend the useful life of the asset. Costs of repairs and maintenance are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of up to 40 years for buildings, 15 years for land improvements, five years for fixtures and the shorter of the useful life or the remaining lease term for tenant improvements and leasehold interests.

We are required to make subjective assessments as to the useful lives of our properties for purposes of determining the amount of depreciation to record on an annual basis with respect to our investments in real estate. These assessments have a direct impact on our net income because if we were to shorten the expected useful lives of our investments in real estate, we would depreciate these investments over fewer years, resulting in more depreciation expense and lower net income on an annual basis.

We are required to present the operations related to properties that have been sold or properties that are intended to be sold as discontinued operations in the statement of operations for all periods presented. Properties that are intended to be sold are to be designated as "held for sale" on the balance sheet.

OFF-BALANCE SHEET ARRANGEMENTS

As of September 30, 2016, we do not have any interests in off-balance sheet special purpose entities nor do we have any interests in non-exchange traded commodity contracts.

RELATED PARTY TRANSACTIONS

From time to time, we may acquire or sell investments in real estate loans from/to our manager or other related parties pursuant to the terms of our Management Agreement without a premium.  No gain or loss is recorded on these transactions, as it is not our intent to make a profit on the purchase or sale of such investments.  The purpose is generally to diversify our portfolio by syndicating loans or investments in real estate, thereby providing us with additional capital to invest in real estate or make additional loans.  For further information regarding related party transactions, refer to Note I – Related Party Transactions of the Notes to the Consolidated Financial Statements included in Part I, Item 1  Financial Statements of this Quarterly Report on Form 10-Q.

CRITICAL ACCOUNTING ESTIMATES

Revenue Recognition

Interest income on loans is accrued by the effective interest method.  We do not accrue interest income from loans once they are determined to be non-performing.  A loan is considered non-performing when, based on current information and events, it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement or when the payment of interest is 90 days past due.

-35-

The following table presents a sensitivity analysis, averaging the balance of our loan portfolio at the end of the last six quarters, to show the impact on our financial condition at September 30, 2016, from fluctuations in weighted average interest rate charged on loans as a percentage of the loan portfolio:

Changed Assumption	Increase (Decrease) in Interest Income
Weighted average interest rate assumption increased by 1.0% or 100 basis points	$	51,000
Weighted average interest rate assumption increased by 5.0% or 500 basis points	$	256,000
Weighted average interest rate assumption increased by 10.0% or 1,000 basis points	$	513,000
Weighted average interest rate assumption decreased by 1.0% or 100 basis points	$	(51,000	)
Weighted average interest rate assumption decreased by 5.0% or 500 basis points	$	(256,000	)
Weighted average interest rate assumption decreased by 10.0% or 1,000 basis points	$	(513,000	)

The purpose of this analysis is to provide an indication of the impact that the weighted average interest rate fluctuations would have on our financial results.  It is not intended to imply our expectation of future revenues or to estimate earnings.  We believe that the assumptions used above are appropriate to illustrate the possible material impact on the consolidated financial statements.

Allowance for Loan Losses

We maintain an allowance for loan losses on our investments in real estate loans for estimated credit impairment in our investment in real estate loans portfolio.  Our manager's estimate of losses is based on a number of factors including the types and dollar amounts of loans in the portfolio, adverse situations that may affect the borrower's ability to repay, prevailing economic conditions and the underlying collateral securing the loan.  Additions to the allowance are provided through a charge to earnings and are based on an assessment of certain factors, which may indicate estimated losses on the loans.  Actual losses on loans are recorded as a charge-off or a reduction to the allowance for loan losses.  Subsequent recoveries of amounts previously charged off are added back to the allowance or included as income.

The following table presents a sensitivity analysis to show the impact on our financial condition at September 30, 2016, from increases and decreases to our allowance for loan losses as a percentage of the loan portfolio:

Changed Assumption	Increase (Decrease) in Allowance for Loan Losses
Allowance for loan losses assumption increased by 1.0% of loan portfolio	$	79,000
Allowance for loan losses assumption increased by 5.0% of loan portfolio	$	395,000
Allowance for loan losses assumption increased by 10.0% of loan portfolio	$	790,000
Allowance for loan losses assumption decreased by 1.0% of loan portfolio	$	(79,000	)
Allowance for loan losses assumption decreased by 5.0% of loan portfolio	$	(395,000	)
Allowance for loan losses assumption decreased by 10.0% of loan portfolio	$	(790,000	)

Estimating allowances for loan losses requires significant judgment about the underlying collateral, including liquidation value, condition of the collateral, competency and cooperation of the related borrower and specific legal issues that affect loan collections or taking possession of the property.  As a commercial real estate lender willing to invest in loans to borrowers who may not meet the credit standards of other financial institutional lenders, the default rate on our loans could be higher than those generally experienced in the mortgage lending industry.  We, our manager and MVP Mortgage generally approve loans more quickly than other real estate lenders and, due to our expedited underwriting process, there is a risk that the credit inquiry we perform will not reveal all material facts pertaining to a borrower and the security.

-36-

We may discover additional facts and circumstances as we continue our efforts in the collection and foreclosure processes.  This additional information often causes management to reassess its estimates.  In recent years, we have revised estimates of our allowance for loan losses.  Circumstances that may cause significant changes in our estimated allowance include, but are not limited to:

· Declines in real estate market conditions that can cause a decrease in expected market value;

· Discovery of undisclosed liens for community improvement bonds, easements and delinquent property taxes;

· Lack of progress on real estate developments after we advance funds.  We customarily utilize disbursement agents to monitor the progress of real estate developments and approve loan advances.  After further inspection of the related property, progress on construction occasionally does not substantiate an increase in value to support the related loan advances;

· Unanticipated legal or business issues that may arise subsequent to loan origination or upon the sale of foreclosed upon property; and

· Appraisals, which are only opinions of value at the time of the appraisal, may not accurately reflect the value of the property.

Real Estate Owned Held for Sale

Real estate owned held for sale and other real estate owned includes real estate acquired through foreclosure or deed in lieu and will be carried at the lower of the recorded amount, inclusive of any senior indebtedness, or the property's estimated fair value, less estimated costs to sell, with fair value based on appraisals and knowledge of local market conditions.  The carrying values of real estate owned held for sale are assessed on a regular basis from updated appraisals, comparable sales values or purchase offers.

RECENT ACCOUNTING PRONOUNCEMENTS

See Note N– Recent Accounting Pronouncements of the Notes to the Consolidated Financial Statements included in Part I, Item 1 Financial Statements  of this Quarterly Report on Form 10-Q.

ITEM 4. CONTROLS AND PROCEDURES

Amended Income Tax Returns

Earlier this year, we learned that our federal income tax return for 2013 reported income that we never recognized nor received.  The tax return, which was prepared by an outside tax accounting firm, reported income of approximately $11,137,000, which had the effect of erroneously reducing our reported net operating losses by approximately $11 million.  Our aggregate net operating losses are approximately $228.2 million; therefore, the incorrect reported income of approximately $11,137,000 did not result us paying any federal income taxes for 2013.  We have filed amended tax returns for 2013 and 2014 to correct the error.  The outside tax accounting firm involved with this filing has been terminated.

Our financial statements never included the non-existent income and no restatement of our financial statements is necessary.

Our audit committee is currently investigating this matter.  In its investigation, the audit committee is reviewing, among other things, (i) the actions of our former outside tax accountants who prepared the tax return reporting non-existent income, (ii) what if any involvement or knowledge our officers or directors had with respect to the filing of the tax return in question and (iii) what if any internal control weaknesses may have contributed to the incorrect tax filing. While the audit committee's investigation is on-going and no final conclusions have been reached, we believe that we may have been victimized by a scheme to improperly reduce the taxes of an unrelated third party. Although we did not receive any benefit from the reporting of non-existent income on its tax return, it is possible the Internal Revenue Service could investigate the matter and seek to impose penalties upon us. We believe we have meritorious defenses to any such claim.

-37-

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), as appropriate, to allow timely decisions regarding required financial disclosure.  In connection with the preparation of this Report on Form 10-Q, management carried out an evaluation, under the supervision and with the participation of our CEO and CFO, as of September 30, 2016, of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) under the Exchange Act.

Based upon management's evaluation, our CEO and CFO concluded that, as of September 30, 2016 and subject to the disclosures set forth under "Amended Income Tax Returns" under this Item 4, our disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues within our company have been or will be detected.  Even effective internal control over financial reporting can only provide reasonable assurance with respect to financial statement preparation.  Furthermore, because of changes in conditions, the effectiveness of internal control over financial reporting may vary over time.  Our management, including our CEO and CFO, does not expect that our controls and procedures will prevent all errors.

The certifications of our CEO and CFO required under Section 302 of the Sarbanes-Oxley Act have been filed as Exhibits 31.1 and 31.2 to this report.

Management's Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting for our Company, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.  Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with accounting principles generally accepted in the United States.  Internal control over financial reporting includes those policies and procedures that: pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of our Company; provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States, and that receipts and expenditures of our Company are being made only in accordance with authorizations of management and directors of our Company; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our Company's assets that could have a material effect on our financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.  Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Management has conducted an assessment, including testing, of the effectiveness of our internal control over financial reporting as of September 30, 2016.  In making its assessment of internal control over financial reporting, management used the criteria in Internal Control -- Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO").  Based on this assessment, management, with the participation of the Chief Executive and Chief Financial Officers, believes that, as of September 30, 2016 and subject to the disclosures set forth under "Amended Income Tax Returns" under this Item 4, the Company's internal control over financial reporting is effective based on those criteria.

-38-

Changes in Internal Control Over Financial Reporting

As required by Rule 13a-15(d) under the Exchange Act, our management, including our CEO and CFO, has evaluated our internal control over financial reporting to determine whether any changes occurred during the third fiscal quarter of 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.  Based on that evaluation and subject to the disclosures set forth under "Amended Income Tax Returns" under this Item 4, there has been no such change during the third fiscal quarter of 2016.

PART II - OTHER INFORMATION

None.

ITEM 1. LEGAL PROCEEDINGS

Please refer to Note O - Legal Matters Involving The Company in Part I, Item 1 Financial Statements of this Quarterly Report on Form 10-Q for information regarding legal proceedings, which discussion is incorporated herein by reference.

ITEM 2. UNREGISTERED SALES OF EQUITY AND USE OF PROCEEDS

None.

The following is a summary of our stock purchases during the nine months ended September 30, 2016, as required by Regulation S-K, Item 703.

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
January 1, 2016 – January 31, 2016		--	$	--		--	$	395,615
February 1, 2016 – February 28, 2016		--		--		--		395,615
March 1, 2016 – March 31, 2016		--		--		--		395,615
April 1, 2016 – April 30, 2016		--		--		--		395,615
May 1, 2016 – May 31, 2016		--		--		--		395,615
June 1, 2016 – June 30, 206		22,795		2.40		22,795		341,048
July 1, 2016 – July 31,2016		--		--		--		341,048
August 1, 2016 – August 31, 2016		29,765		2.30		29,765		272,613
September 1, 2016 – September 30, 2016		25,635		2.92		25,635		197,945
Total as of September 30, 2016		78,195	$	2.53		78,195	$	197,945

-39-

EXHIBIT INDEX

Exhibit No.		Description of Exhibits
3.1 (1)		Articles of Incorporation of the Registrant
3.2 (1)		Bylaws of the Registrant
3.3 (1)		Form of Articles Supplementary of the Registrant
3.4 (3)		Amendment to Vestin Realty Mortgage II's Articles of Incorporation, effective December 31, 2007.
3.5 (4)		Amended Articles of Incorporation of the Registrant
4.1 (1)		Reference is made to Exhibits 3.1, 3.2,  3.3, 3.4 and 3.5
4.2 (2)		Specimen Common Stock Certificate
4.3 (1)		Form of Rights Certificate
4.4(5)		First Amendment to Rights Agreement, dated as of July 9, 2012, between Registrant and the rights agent
4.5(5)		Second Amendment to Rights Agreement, dated as of July 9, 2012, between Registrant and the rights agent
31.1*		Section 302 Certification of Michael V. Shustek
31.2*		Section 302 Certification of Tracee Gress
32*		Certification Pursuant to 18 U.S.C. Sec. 1350
101*		The following material from the Company's quarterly report on Form 10-Q for the six months ended June 30, 2016, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of September 30, 2016 and December 31, 2015, (ii) Consolidated Statements of Operations for the three and nine months ended September 30, 2016 and 2015 (iii) Consolidated Statements of Other Comprehensive Income for the three and nine months ended September 30, 2016 and 2015  (iv) Consolidated Statements of Cash Flows for the three and nine months ended September 30, 2016 and, 2015 (v) Notes to the Consolidated Financial Statements.
*	Filed concurrently herewith.
(1)	Incorporated herein by reference to Post-Effective Amendment No. 6 to our Form S-4 Registration Statement filed on January 4, 2006 (File No. 333-125121)
(2)	Incorporated herein by reference to Post-Effective Amendment No. 7 to our Form S-4 Registration Statement filed on January 13, 2006 (File No. 333-125121)
(3)	Incorporated herein by reference to the Current Report on Form 8-K filed on January 4, 2008 (File No. 000-51892)
(4)	Incorporated herein by reference to the Annual Report on Form 10-K filed on March 14, 2008 (File No. 000-51892)
(5)	Incorporated herein by reference to the Current Report on Form 8-K filed on July 13, 2012 (File No. 000-51892)

-40-

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Vestin Realty Mortgage II, Inc.
By:	/s/ Michael V. Shustek
	Michael V. Shustek
	President and Chief Executive Officer
Date:	November 9, 2016
By:	/s/ Ed Bentzen
	Ed Bentzen
	Chief Financial Officer
Date:	November 9, 2016

-41-

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Michael V. Shustek, certify that:

1. I have reviewed this Form 10-Q of Vestin Realty Mortgage II, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 9, 2016

/s/ Michael V. Shustek

Michael V. Shustek

Chief Executive Officer

Vestin Realty Mortgage II, Inc.

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Ed Bentzen, certify that:

1. I have reviewed this Form 10-Q of Vestin Realty Mortgage II, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 9, 2016

/s/ Ed Bentzen

Ed Bentzen

Chief Financial Officer

Vestin Realty Mortgage II, Inc.

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

Michael V. Shustek, as Chief Executive Officer of Vestin Realty Mortgage II, Inc. (the "Registrant"), and Ed Bentzen, as Chief Financial Officer of the Registrant, hereby certify, pursuant to 18 U.S.C. Sec. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Registrant's Report on Form 10-Q for the nine months ended September 30, 2016, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Date: November 9, 2016

/s/ Michael V. Shustek

Michael V. Shustek

Chief Executive Officer

Vestin Realty Mortgage II, Inc.

Date: November 9, 2016

/s/ Ed Bentzen

Ed Bentzen

Chief Financial Officer

Vestin Realty Mortgage II, Inc.

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Nov. 09, 2016
Document And Entity Information
Entity Registrant Name	Vestin Realty Mortgage II, Inc
Entity Central Index Key	0001327603
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		2,384,179
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2016

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Assets
Cash and cash equivalents	$ 5,163,000	$ 4,228,000
Prepaid expenses	315,000	323,000
Investment in marketable securities - related party	455,000	137,000
Interest and other receivables	163,000	42,000
Investment in MVP REIT II	327,000	325,000
Investments in Delaware Statutory Trusts	3,063,000	1,800,000
Notes receivable, net of allowance of $1,086,000 and $1,099,000 at September 30, 2016 and December 31, 2015, respectively
Investment in real estate loans, net of allowance for loan losses of $2,450,000 at September 30, 2016 and December 31, 2015.	5,447,000	2,161,000
Fixed assets, net of accumulated depreciation of $2,000 and $1,000 at September 30, 2016 and December 31, 2015, respectively	18,000	21,000
Due from related parties	865,000	408,000
Assets held for sale		44,545,000
Total assets	15,816,000	53,990,000
Liabilities
Accounts payable and accrued liabilities	418,000	928,000
Deferred gain on sale of assets held for sale	620,000
Due to related parties	7,832,000	5,265,000
Note payable	84,000
Liabilities related to assets held for sale		30,306,000
Total liabilities	8,954,000	36,499,000
Equity
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding
Treasury stock, at cost, 0 shares at September 30, 2016 and December 31, 2015
Common stock, $0.0001 par value; 100,000,000 shares authorized; 2,384,179 and 2,472,089 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively
Additional paid-in capital	266,241,000	266,576,000
Accumulated deficit	(256,843,000)	(252,997,000)
Accumulated other comprehensive income	317,000
Total Vestin Realty Mortgage II, Inc. stockholders' equity	9,715,000	13,579,000
Non-controlling interest	(2,853,000)	3,912,000
Total equity	6,862,000	17,491,000
Total liabilities and equity	$ 15,816,000	$ 53,990,000

XML

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Notes receivable, allowance	$ 1,086,000	$ 1,099,000
Investment in real estate loans, allowance	2,450,000	2,450,000
Accumulated Depreciation	$ 2,000	$ 1,000
Preferred stock par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Treasury stock, shares	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	2,384,179	2,472,089
Common stock, shares outstanding	2,384,179	2,472,089

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Revenues
Interest income from investment in real estate loans	$ 236,000	$ 47,000	$ 655,000	$ 570,000
Gain related to pay off of real estate loan, including recovery of allowance for loan loss				1,623,000
Gain related to pay off of notes receivable, including recovery of allowance for notes receivable		513,000	13,000	539,000
Acquisition fee income	735,000	29,000	1,982,000	1,331,000
Advisor fee income	293,000	164,000	840,000	372,000
Total revenues	1,264,000	753,000	3,490,000	4,435,000
Operating expenses
Management fees - related party	274,000	274,000	823,000	822,000
MVP REIT II Organization and offering cost		436,000	2,000	1,015,000
Wages and Benefits	675,000	884,000	1,847,000	2,598,000
Interest expense	1,000	1,000	3,000	2,000
Acquisition expense				1,000
Depreciation		1,000	2,000	1,000
Professional fees	187,000	264,000	806,000	814,000
Seminars	307,000	450,000	1,029,000	1,146,000
Consulting fees	17,000	41,000	77,000	181,000
Insurance	62,000	64,000	173,000	194,000
Commissions	1,715,000	1,507,000	3,808,000	2,836,000
Travel	115,000	214,000	490,000	806,000
Other	305,000	219,000	823,000	512,000
Total operating expenses	3,658,000	4,355,000	9,883,000	10,928,000
Loss from operations	(2,394,000)	(3,602,000)	(6,393,000)	(6,493,000)
Non-operating income
Other income	2,000		7,000
Gain related to recovery of allowance on note receivable - related party		24,000		24,000
Recovery from settlement with loan guarantor			261,000
Dividend income			2,000
Gain on sale of marketable securities		1,000		2,000
Total other non-operating income, net	2,000	25,000	270,000	26,000
Provision for income taxes
Loss from continuing operations	(2,392,000)	(3,577,000)	(6,123,000)	(6,467,000)
Discontinued operations, net of income taxes
Expenses related to real estate owned held for sale	(1,000)	(103,000)	(50,000)	(298,000)
Disposition expense			(753,000)
Loss on sale of assets held for sale			(66,000)
Income (loss) from assets held for sale, net of income taxes	6,000	339,000	(618,000)	1,002,000
Recovery from fully impaired real estate held for sale		396,000	1,303,000	396,000
Total income (loss) from discontinued operations	5,000	632,000	(184,000)	1,100,000
Net Loss	(2,387,000)	(2,945,000)	(6,307,000)	(5,367,000)
Net loss attributable to non-controlling interest - related party	(851,000)	(1,351,000)	(2,461,000)	(2,768,000)
Net loss attributable to Vestin Realty Mortgage II, Inc. common stockholders	$ (1,536,000)	$ (1,594,000)	$ (3,846,000)	$ (2,599,000)
Basic and diluted income (loss) per weighted average common share
Loss from continuing operations attributable to Vestin Realty Mortgage II, Inc. common stockholders	$ (0.64)	$ (0.85)	$ (1.59)	$ (1.35)
Income (loss) from discontinued operations	0	0.22	0	0.32
Net loss attributable to Vestin Realty Mortgage II, Inc. common stockholders - basic and diluted loss per weighted average common share	$ (0.64)	$ (0.64)	$ (1.59)	$ (1.02)
Weighted average common shares outstanding, basic and diluted	2,408,804	2,494,011	2,414,872	2,537,533

XML

Condensed Consolidated Statements of Other Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Statement of Comprehensive Income [Abstract]
Net loss	$ (2,387,000)	$ (2,945,000)	$ (6,307,000)	$ (5,367,000)
Unrealized holding gain on available-for-sale securities - related party	6,000	113,000	317,000	203,000
Comprehensive loss	(2,381,000)	(2,832,000)	(5,990,000)	(5,164,000)
Less: net loss attributable to non-controlling interest	(851,000)	(1,351,000)	(2,461,000)	(2,768,000)
Comprehensive loss attributable to Vestin Realty Mortgage II, Inc. common stockholders	$ (1,530,000)	$ (1,481,000)	$ (3,529,000)	$ (2,396,000)

XML

Condensed Consolidated Statements Of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash flows from operating activities:
Net loss	$ (6,307,000)	$ (5,367,000)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	2,000	1,000
Treasury stock for settlement	112,000
DRIP shares from MVP REIT, Inc.	(2,000)
Recovery of allowance for doubtful notes receivable	(13,000)	(539,000)
Gain on sale of marketable securities		(2,000)
Gain related to recovery of allowance for loan loss		(1,623,000)
Gain related to recovery of allowance on note receivable - related party		(24,000)
Recovery from fully impaired real estate held for sale	(1,303,000)	(396,000)
Change in operating assets and liabilities:
Interest and other receivables	(121,000)	(40,000)
Assets held for sale, net of liabilities	375,000	242,000
Due to/from related parties, net	2,047,000	3,139,000
Prepaid expenses - related party	8,000	(279,000)
Other assets		296,000
Accounts payable and accrued liabilities	(447,000)	159,000
Net cash (used in) operating activities	(58,739,000)	(4,433,000)
Cash flows from investing activities:
Investments in real estate loans	(7,341,000)	(3,228,000)
Purchase of investments in real estate loans from third parties		(200,000)
Proceeds from loan payoffs	47,000	5,945,000
Sale of investments in real estate loans to third parties	4,008,000	2,317,000
Investment in Delaware Statutory Trust	(1,479,000)	(3,600,000)
Proceeds from notes receivable	13,000	539,000
Proceeds from notes receivable - related party		24,000
Proceeds from payments on Delaware Statutory Trust	216,000
Proceeds related to real estate held for sale	14,781,000
Collection from recovery of loan loss		1,623,000
Recovery from fully impaired real estate held for sale	1,303,000	396,000
Purchase of marketable securities		(200,000)
Purchase of fixed assets held for sales	(172,000)	(22,000)
Investments in MVP REIT II		(200,000)
Asset purchase - assets held for sale		(124,000)
Proceeds from marketable securities		113,000
Net cash provided by investing activities	11,376,000	3,383,000
Cash flows from financing activities:
Principal payments on notes payable	(124,000)	(116,000)
Purchase of treasury stock	(223,000)	(386,000)
Distribution to non-controlling interest entity held for sale	(4,304,000)	(81,000)
Proceeds from note payable	208,000	166,000
Payments on note payable on assets held for sale	(125,000)	(430,000)
Net cash used in financing activities	(4,568,000)	(847,000)
NET CHANGE IN CASH	935,000	(1,897,000)
Cash, beginning of period	4,228,000	7,541,000
Cash, end of period	5,163,000	5,644,000
Supplemental disclosures of cash flows information:
Interest paid	3,000	2,000
Non-cash investing and financing activities:
Adjustment to notes receivable and related allowance		1,600,000
Note payable related to prepaid D & O insurance	208,000	166,000
Unrealized gain on marketable securities - related party	$ 317,000	$ 203,000

XML

Organization

9 Months Ended

Sep. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization

NOTE A — ORGANIZATION

Vestin Realty Mortgage II, Inc. (“VRM II”, the “Company”, “we”, “us” or “our”), formerly Vestin Fund II, LLC (“Fund II”), invests in loans secured by real estate through deeds of trust or mortgages; hereafter referred to collectively as “deeds of trust” and as defined in our management agreement (“Management Agreement”) as mortgage assets (“Mortgage Assets”). In addition, we invest in, acquire, manage or sell real property and acquire entities involved in the ownership or management of real property. We commenced operations in June 2001. References in this report to the “Company,” “we,” “us,” or “our” refer to Fund II with respect to the period prior to April 1, 2006 and to VRM II with respect to the period commencing on April 1, 2006.

We operated as a real estate investment trust (“REIT”) through December 31, 2011. We are not a mutual fund or an investment company within the meaning of the Investment Company Act of 1940, nor are we subject to any regulation thereunder. As a REIT, we were required to have a December 31 fiscal year end. We announced on March 28, 2012 that we have terminated our election to be treated as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”), effective for the tax year ending December 31, 2012. Under the Code, we will not be able to make a new election to be taxed as a REIT during the four years following December 31, 2012. Pursuant to our charter, upon the determination by the Board of Directors that we should no longer qualify as a REIT, the restrictions on transfer and ownership of shares set forth in Article VII of our charter ceased to be in effect and, accordingly, shares of the Company’s stock will no longer be subject to such restrictions. In connection with the termination of our REIT status, we also amended our stockholders’ rights plan to provide that a stockholder, other than Michael Shustek, may own up to 20% of outstanding shares of common stock, and that Michael Shustek may own up to 35% of outstanding shares of common stock.

Michael Shustek owns a significant majority of Vestin Mortgage, LLC, a Nevada limited liability company, which is our manager (the “manager” or “Vestin Mortgage”). The business of brokerage and placement of real estate loans have been performed by affiliated or non-affiliated mortgage brokers, including Advant Mortgage, LLC (“MVP Mortgage”), a licensed Nevada mortgage broker, which is indirectly wholly owned by Mr. Shustek.

Pursuant to a management agreement, our manager is responsible for managing our operations and implementing our business strategies on a day-to-day basis. Consequently, our operating results are dependent to a significant extent upon our manager’s ability and performance in managing our operations and servicing our loans.

Vestin Mortgage is also the manager of Vestin Realty Mortgage I, Inc. (“VRM I”), as the successor by merger to Vestin Fund I, LLC (“Fund I”). VRM I has investment objectives similar to ours.

In April 2009, we entered into an accounting services agreement with Strategix Solutions, LLC (“Strategix Solutions”), a Nevada limited liability company from which our former CFO and other members of our accounting staff were employed. As of March 1, 2016, our CFO and certain members of our accounting staff were no longer employed by Strategix Solutions and became employed by MVP Realty Advisors. On June 1, 2016, Tracee Gress resigned as the Chief Financial Officer of the Company which resignation became effective as of June 14, 2016. Also on June 1, 2016, the Board of Directors of the Company appointed Edwin H. Bentzen IV as the new Chief Financial Officer of the Company effective as of June 14, 2016. Mr. Bentzen and the accounting staff also provide accounting and financial reporting services to MVP REIT, Inc. (“MVP REIT”), MVP REIT II, Inc. (“MVP REIT II”) and VRM I.

In December 2013, we entered into a membership interest transfer agreement with MVP Capital Partners, LLC (“MVP Capital”) pursuant to which we increased our ownership interest from 40% to 60% in MVP Realty Advisors, LLC (“MVP Advisors”), the advisor of MVP REIT. At the same time, VRM I acquired from MVP Capital the remaining 40% interest in MVP Advisors. We and VRM I have agreed to fund certain costs and expenses of MVP REIT through MVP Advisors in proportion to our respective ownership interest.

During May 2015, our Board of Directors and the Board of Directors of VRM I agreed to form MVP CP II. We own 60% and VRM I owns 40%. The purpose of MVP CP II is to act as the sponsor of MVP REIT II, a Maryland corporation, which was formed as a publicly registered non traded REIT (“MVP REIT II”). MVP REIT II’s registrations statement for its initial public offering has been declared effective by the Securities and Exchange Commission on October 22, 2015. MVP REIT II is a proposed $550,000,000 offering with the proceeds raised from the offering being used primarily to acquire parking assets in the United States and Canada. MVP REIT II has engaged MVP Advisors as its advisor.

We and VRM I have agreed to fund certain costs and expenses of MVP REIT II through MVP CP II in proportion to our respective ownership interest. As consideration for the initial investment of $0.2 million MVP CP II received 8,000 shares of common stock in MVP REIT II.

Through our interest in MVP Advisor and MVP CP II, we have directed, and continue to direct, a portion of our cash towards development of the businesses of MVP REIT and MVP REIT II.

Reverse Stock Split

On September 15, 2016, the Company filed a Schedule 13E-3 and related preliminary proxy statement with the Securities and Exchange Commission (the “SEC”) in connection with a proposed transaction that is intended to result in the voluntary delisting of the Company’s common stock from NASDAQ and the voluntary deregistration from the Company’s public reporting obligations under the Securities and Exchange Act of 1934 (the “Exchange Act”). The proposed transaction, if approved by the stockholders, is expected to permit the Company to forego many of the expenses associated with operating as a public reporting company, including the costs of preparing and filing periodic reports with the SEC, related accounting and legal fees and costs, and the ongoing expenses for compliance with the Sarbanes-Oxley Act of 2002 and other SEC requirements.

The suspension of reporting obligations would be accomplished by a reverse 1:1,000 stock split of the Company’s common stock. All stockholders owning fewer than 1,000 shares prior to the reverse stock split would be cashed out by the Company and would no longer be stockholders of the Company. The cash out price will be not less than $2.70 per share, which is the average per-share closing price of the Company’s common stock on NASDAQ for the ten consecutive trading days ending on the last trading day prior to September 15, 2016, or the date of the first public disclosure of the reverse stock split proposal in the form of the initial filing of the preliminary proxy statement with the SEC (the “Cash-Out Price”). If, however, the average per share closing price of the Company’s common stock for the ten consecutive trading days ending on the last trading day prior to the effective date of the reverse stock split (the “Closing Trading Price”) exceeds the Cash-Out Price, then fractional shares will be paid out at the Closing Trading Price rather than the Cash-Out Price.

If, after completion of the reverse stock split, the Company has fewer than 300 stockholders of record, the Company intends to delist from NASDAQ by filing a Form 25 and suspend its reporting obligations under the Exchange Act by filing a Form 15 with the SEC. Upon the effectiveness of such filings, the Company's common stock would no longer be listed on NASDAQ and the Company would be relieved of its requirements to file periodic reports with the SEC, including annual reports on Form 10-K and quarterly reports on Form 10-Q. After delisting from NASDAQ, the Company anticipates that its common stock would be quoted on the Pink Sheets, a centralized electronic quotation service for over-the-counter securities, after the reverse stock split. The Company, however, can give no assurance that trading in its stock will continue on the Pink Sheets or on any other securities exchange or quotation medium after the reverse stock split.

The consummation of the proposed transaction is subject to a number of conditions, including the filing of a definitive proxy statement with the SEC and approval by the Company’s stockholders. The Company intends to include a proposal to amend the company’s Certificate of Incorporation to effect the reverse stock split at its annual meeting of stockholders.

Stockholders are advised not to put undue reliance on the description of the reverse stock split provided in this Form 10-Q and in the preliminary proxy statement. The Company has filed a preliminary proxy statement and Schedule 13E-3 concerning the proposed reverse stock split, which are subject to SEC review. STOCKHOLDERS ARE URGED TO READ CAREFULLY AND IN THEIR ENTIRETY THE PRELIMINARY PROXY STATEMENT AND SCHEDULE 13E-3 FILED WITH THE SEC, AND, WHEN THEY BECOME AVAILABLE, THE DEFINITIVE PROXY STATEMENT AND OTHER RELEVANT MATERIALS, BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY AND THE PROPOSED REVERSE STOCK SPLIT. The definitive proxy statement and Schedule 13E-3 will be mailed to stockholders as of a record date to be established for voting on the proposed transaction. Stockholders may obtain free copies of the Company’s preliminary proxy statement, Schedule 13E-3, definitive proxy statement (when available) and its other SEC filings electronically by accessing the SEC’s home page at http://www.sec.gov. Copies can also be obtained, free of charge, upon written request to the Company, attention: Investor Relations.

The Company and its directors, executive officers, and advisors may be deemed to be participants in the solicitation of proxies from the holders of the Company’s common stock in respect of the proposed reverse stock split. Stockholders may obtain additional information regarding the interest of those participants by reading the Company’s preliminary proxy statement and, when they become available, the Company’s definitive proxy statement and other relevant proxy materials, and the Company’s Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q as filed with the SEC.

The information set forth above is not a proxy statement or solicitation of a proxy, consent or authorization with respect to any securities or in respect of the proposed reverse stock split and shall not constitute an offer to sell or a solicitation of an offer to buy the securities of the Company, nor shall there be any sale of any such securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction.

XML

Summary Of Significant Accounting Policies

9 Months Ended

Sep. 30, 2016

Accounting Policies [Abstract]

Summary Of Significant Accounting Policies

NOTE B — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting

The accompanying unaudited condensed consolidated financial statements of the Company are prepared by management on the accrual basis of accounting and in accordance with principles generally accepted in the United States of America (“GAAP”) for interim financial information as contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), and in conjunction with rules and regulations of the SEC. Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to SEC rules and regulations. Accordingly, the unaudited condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. The unaudited condensed consolidated financial statements include accounts and related adjustments, which are, in the opinion of management, of a normal recurring nature and necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the interim period.

Operating results for the three and nine months ended September 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

The condensed consolidated balance sheet as of December 31, 2015 contained herein has been derived from the audited consolidated financial statements as of December 31, 2015, but do not include all disclosures required by GAAP.

Management Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Investments in Real Estate Loans

We may, from time to time, acquire or sell investments in real estate loans from or to our manager or other related parties pursuant to the terms of our Management Agreement without a premium. The primary purpose is to either free up capital to provide liquidity for various reasons, such as loan diversification, or place excess capital in investments to maximize the use of our capital. Selling or buying loans allows us to diversify our loan portfolio within these parameters. Due to the short-term nature of the loans we make and the similarity of interest rates in loans we normally would invest in, the fair value of a loan typically approximates its carrying value. Accordingly, discounts or premiums typically do not apply upon sales of loans and therefore, generally no gain or loss is recorded on these transactions, regardless of whether to a related or unrelated party.

Investments in real estate loans are secured by deeds of trust or mortgages. Generally, our real estate loans require interest only payments with a balloon payment of the principal at maturity. We have both the intent and ability to hold real estate loans until maturity and therefore, real estate loans are classified and accounted for as held for investment and are carried at amortized cost. Loans sold to or purchased from affiliates are accounted for at the principal balance and no gain or loss is recognized by us or any affiliate. Loan-to-value ratios are initially based on appraisals obtained at the time of loan origination and are updated, when new appraisals are received or when management’s assessment of the value has changed, to reflect subsequent changes in value estimates. Such appraisals are generally dated within 12 months of the date of loan origination and may be commissioned by the borrower.

The Company considers a loan to be impaired when, based upon current information and events, it believes it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. The Company’s impaired loans include troubled debt restructuring, and performing and non-performing loans in which full payment of principal or interest is not expected. The Company calculates an allowance required for impaired loans based on the present value of expected future cash flows discounted at the loan’s effective interest rate, or at the loan’s observable market price or the fair value of its collateral.

Loans that have been modified from their original terms are evaluated to determine if the loan meets the definition of a Troubled Debt Restructuring (“TDR”) as defined by ASC 310-40. When the Company modifies the terms of an existing loan that is considered a TDR, it is considered performing as long as it is in compliance with the modified terms of the loan agreement. If the modification calls for deferred interest, it is recorded as interest income as cash is collected.

Allowance for Loan Losses

We maintain an allowance for loan losses on our investments in real estate loans for estimated credit impairment. Our manager’s estimate of losses is based on a number of factors including the types and dollar amounts of loans in the portfolio, adverse situations that may affect the borrower’s ability to repay, prevailing economic conditions and the underlying collateral securing the loan. Additions to the allowance are provided through a charge to earnings and are based on an assessment of certain factors, which may indicate estimated losses on the loans. Actual losses on loans are recorded first as a reduction to the allowance for loan losses. Generally, subsequent recoveries of amounts previously charged off are recognized as income.

Estimating allowances for loan losses requires significant judgment about the underlying collateral, including liquidation value, condition of the collateral, competency and cooperation of the related borrower and specific legal issues that affect loan collections or taking possession of the property. As a commercial real estate lender willing to invest in loans to borrowers who may not meet the credit standards of other financial institutional lenders, the default rate on our loans could be higher than those generally experienced in the real estate lending industry. We and our manager generally approve loans more quickly than other real estate lenders and, due to our expedited underwriting process; there is a risk that the credit inquiry we perform will not reveal all material facts pertaining to a borrower and the security.

Additional facts and circumstances may be discovered as we continue our efforts in the collection and foreclosure processes. This additional information often causes management to reassess its estimates. In recent years, we have revised estimates of our allowance for loan losses. Circumstances that have and may continue to cause significant changes in our estimated allowance include, but are not limited to:

· Declines in real estate market conditions, which can cause a decrease in expected market value;

· Discovery of undisclosed liens for community improvement bonds, easements and delinquent property taxes;

· Lack of progress on real estate developments after we advance funds. We customarily utilize disbursement agents to monitor the progress of real estate developments and approve loan advances. After further inspection of the related property, progress on construction occasionally does not substantiate an increase in value to support the related loan advances;

· Unanticipated legal or business issues that may arise subsequent to loan origination or upon the sale of foreclosed property; and

· Appraisals, which are only opinions of value at the time of the appraisal, may not accurately reflect the value of the property.

Discontinued Operations

We have reclassified for all periods presented in the accompanying consolidated statements of operations, the amounts related to discontinued operations and real estate held for sale, in accordance with the applicable accounting criteria. In addition, the assets and liabilities related to the discontinued operations are reported separately in the accompanying consolidated balance sheets as real estate held for sale, assets held for sale, and liabilities related to assets held for sale.

Generally, operating results and cash flows from long-lived assets held for sale are to be classified as discontinued operations as a separately stated component of net income. Our operations related to REO are separately identified in the accompanying consolidated statements of operations.

Real Estate Owned Held for Sale

Real estate owned held for sale (“REO”) includes real estate acquired through foreclosure and will be carried at the lower of the recorded amount, inclusive of any senior indebtedness, or the property's estimated fair value, less estimated costs to sell, with fair value based on appraisals and knowledge of local market conditions. While pursuing foreclosure actions, we seek to identify potential purchasers of such property. We generally seek to sell properties acquired through foreclosure as quickly as circumstances permit, taking into account current economic conditions. The carrying values of REO are assessed on a regular basis from updated appraisals, comparable sales values or purchase offers.

Management classifies real estate as REO when the following criteria are met:

· Management commits to a plan to sell the properties;

· The property is available for immediate sale in its present condition subject only to terms that are usual and customary;

· An active program to locate a buyer and other actions required to complete a sale have been initiated;

· The sale of the property is probable;

· The property is being actively marketed for sale at a reasonable price; and

· Withdrawal or significant modification of the sale is not likely.

Acquisitions

The Company records the acquired tangible and intangible assets and assumed liabilities of acquisitions of all operating properties and those development and redevelopment opportunities that meet the accounting criteria to be accounted for as business combinations at fair value at the acquisition date. The Company assesses and considers fair value based on estimated cash flow projections that utilize available market information and discount and/or capitalization rates that the Company deems appropriate. Estimates of future cash flows are based on a number of factors including historical operating results, known and anticipated trends, and market and economic conditions. The acquired assets and assumed liabilities for an operating property acquisition generally include but are not limited to: land, buildings and improvements, construction in progress and identified tangible and intangible assets and liabilities associated with in-place leases, including tenant improvements, leasing costs, value of above-market and below-market operating leases and ground leases, acquired in-place lease values and tenant relationships, if any.

The fair value of land is derived from comparable sales of land within the same submarket and/or region. The fair value of buildings and improvements, tenant improvements, and leasing costs are based upon current market replacement costs and other relevant market rate information.

The fair value of the above-market or below-market component of an acquired in-place operating lease is based upon the present value (calculated using a market discount rate) of the difference between (i) the contractual rents to be paid pursuant to the lease over its remaining non-cancellable lease term and (ii) management's estimate of the rents that would be paid using fair market rental rates and rent escalations at the date of acquisition measured over the remaining non-cancellable term of the lease for above-market operating leases and the initial non-cancellable term plus the term of any below-market fixed rate renewal options, if applicable, for below-market operating leases. The amounts recorded for above-market operating leases are included in deferred leasing costs and acquisition-related intangibles, net on the balance sheet and are amortized on a straight-line basis as a reduction of rental income over the remaining term of the applicable leases.

The amounts recorded for below-market operating leases are included in deferred revenue and acquisition-related liabilities, net on the balance sheet and are amortized on a straight-line basis as an increase to rental income over the remaining term of the applicable leases plus the term of any below-market fixed rate renewal options, if applicable. Our below-market operating leases generally do not include fixed rate or below-market renewal options.

The fair value of acquired in-place leases is derived based on management's assessment of lost revenue and costs incurred for the period required to lease the “assumed vacant” property to the occupancy level when purchased. This fair value is based on a variety of considerations including, but not necessarily limited to: (1) the value associated with avoiding the cost of originating the acquired in-place leases; (2) the value associated with lost revenue related to tenant reimbursable operating costs estimated to be incurred during the assumed lease-up period; and (3) the value associated with lost rental revenue from existing leases during the assumed lease-up period. Factors considered by us in performing these analyses include an estimate of the carrying costs during the expected lease-up periods, current market conditions, and costs to execute similar leases. In estimating carrying costs, the Company includes real estate taxes, insurance and other operating expenses, and estimates of lost rental revenue during the expected lease-up periods based on current market demand at market rates. In estimating costs to execute similar leases, the Company considers leasing commissions, legal and other related expenses. The amount recorded for acquired in-place leases is included in deferred leasing costs and acquisition-related intangibles, net on the balance sheet and amortized as an increase to depreciation and amortization expense over the remaining term of the applicable leases. If a lease were to be terminated or if termination were determined to be likely prior to its contractual expiration (for example resulting from bankruptcy), amortization of the related unamortized in-place lease intangible would be accelerated.

The determination of the fair value of any debt assumed in connection with a property acquisition is estimated by discounting the future cash flows using interest rates available for the issuance of debt with similar terms and remaining maturities.

The determination of the fair value of the acquired tangible and intangible assets and assumed liabilities of operating property acquisitions requires us to make significant judgments and assumptions about the numerous inputs discussed above. The use of different assumptions in these fair value calculations could significantly affect the reported amounts of the allocation of our acquisition related assets and liabilities and the related amortization and depreciation expense recorded for such assets and liabilities. In addition, because the value of above and below market leases are amortized as either a reduction or increase to rental income, respectively, our judgments for these intangibles could have a significant impact on our reported rental revenues and results of operations.

Costs directly associated with all operating property acquisitions and those development and redevelopment acquisitions that meet the accounting criteria to be accounted for as business combinations are expensed as incurred. Our acquisition expenses are directly related to our acquisition activity and if our acquisition activity was to increase or decrease, so would our acquisition costs. Costs directly associated with development acquisitions accounted for as asset acquisitions are capitalized as part of the cost of the acquisition. During the nine months ended September 30, 2016, the Company did not capitalize any such acquisition costs.

Impairment of Long Lived Assets

When circumstances indicate the carrying value of a property may not be recoverable, the Company reviews the asset for impairment. This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition. These estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors. If impairment exists, due to the inability to recover the carrying value of a property, an impairment loss is recorded to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held and used. For properties held for sale, the impairment loss is the adjustment to fair value less estimated cost to dispose of the asset. These assessments have a direct impact on net income because recording an impairment loss results in an immediate negative adjustment to net income.

Cash and Cash Equivalents

Cash and cash equivalents include interest-bearing and non-interest bearing bank deposits, money market accounts, short-term certificates of deposit with original maturities of three months or less, and short-term instruments with a liquidation provision of one month or less.

Revenue Recognition

The Company recognizes interest income from loans on an accrual basis over the expected terms of the loans using the effective interest method. The Company may recognize fees, discounts, premiums, anticipated exit fees and direct cost over the terms of the loans as an adjustment to the yield. The Company may recognize fees on commitments that expire unused at expiration. The Company may recognize interest income from available-for-sale securities on an accrual basis over the life of the investment on a yield-to-maturity basis. Interest is fully allowed for on impaired loans and is recognized on a cash basis method. The receipt of previous loan or note receivable allowances or impairments are recognized as revenue.

Advertising Costs

Advertising costs incurred in the normal course of operations are expensed as incurred. The Company had no advertising expense for the three and nine months ended September 30, 2016 and 2015.

Investments in Real Estate and Fixed Assets

Investments in real estate and fixed assets are stated at cost less accumulated depreciation. Depreciation is provided principally on the straight-line method over the estimated useful lives of the assets, which are primarily 3 to 40 years. The cost of repairs and maintenance is charged to expense as incurred. Expenditures for property betterments and renewals are capitalized. Upon sale or other disposition of a depreciable asset, cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in other income (expense).

The Company periodically evaluates whether events and circumstances have occurred that may warrant revision of the estimated useful lives of fixed assets or whether the remaining balance of fixed assets should be evaluated for possible impairment. The Company uses an estimate of the related undiscounted cash flows over the remaining life of the fixed assets in measuring their recoverability.

Investment in Marketable Securities

Investment in marketable securities consists of stock in VRM I and MVP REIT II, related parties. The securities are stated at fair value as determined by the closing market prices as of September 30, 2016 and December 31, 2015. All securities are classified as available-for-sale.

We are required to evaluate our available-for-sale investment for other-than-temporary impairment charges. We will determine when an investment is considered impaired (i.e., decline in fair value below its amortized cost), and evaluate whether the impairment is other than temporary (i.e., investment value will not be recovered over its remaining life). If the impairment is considered other than temporary, we will recognize an impairment loss equal to the difference between the investment’s cost and its fair value.

Basic and Diluted Earnings Per Common Share

Basic earnings per share (“EPS”) is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding. Diluted EPS is similar to basic EPS except that the weighted average number of common shares outstanding is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been exercised. We had no outstanding common share equivalents during the periods ended September 30, 2016 and December 31, 2015.

Common Stock Dividends

During June 2008, our Board of Directors decided to suspend the payment of dividends. Our Board of Directors will closely monitor our operating results in order to determine when dividends should be reinstated; however, we do not expect our Board of Directors to reinstate dividends in the foreseeable future.

Treasury Stock

On March 21, 2007, our Board of Directors authorized the repurchase of up to $10 million worth of our common stock. On November 17, 2014, our Board of Directors authorized the repurchase of an additional $500,000 in common stock. Depending upon market conditions, shares may be repurchased from time to time at prevailing market prices through open market or privately negotiated transactions. We are not obligated to purchase any shares. Subject to applicable securities laws, including SEC rule 10b-18, repurchases may be made at such times and in such amounts, as our management deems appropriate. The share repurchase program may be discontinued or terminated at any time and we have not established a date for completion of the share repurchase program. The repurchases will be funded from our available cash.

We record our treasury stock using the cost method. Under the Maryland General Corporation Law, shares of its own stock acquired by a corporation constitute authorized but unissued shares.

Segments

We currently are authorized to operate three reportable segments, investments in real estate loans, investments in real property and investment in a real estate management company. During the nine months ended September 30, 2016, the Company operated in all segments.

Our objective is to invest approximately 97% of our assets in real estate loans and real estate related investments, while maintaining approximately 3% as a working capital cash reserve.

Principles of Consolidation

Our consolidated financial statements include the accounts of VRM II; Building A, LLC, Building C, LLC, Wolfpack Properties, LLC; Devonshire, LLC; SE Properties, LLC; ExecuSuites, LLC; MVP Advisors; and MVP Capital Partners II, LLC. All significant intercompany transactions and balances have been eliminated in consolidation.

Business Combinations

In December 2007, the Financial Accounting Standards Board (FASB) revised the authoritative guidance for business combinations, establishing principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired (including goodwill), the liabilities assumed, and any non-controlling interest in the acquiree. Subsequently, on April 1, 2009, the FASB amended and clarified certain aspects of its authoritative guidance on initial recognition and measurement, subsequent measurement and accounting, and disclosure of assets and liabilities arising from contingencies in a business combination. We apply the FASB authoritative guidance to all business combinations for which the acquisition date is on or after January 1, 2009, and to certain future income tax effects related to our prior business combinations, should they arise.

Non-controlling Interests

The FASB issued authoritative guidance for non-controlling interests in December 2007, which establishes accounting and reporting standards for the non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary. The guidance clarifies that a non-controlling interest in a subsidiary, which is sometimes referred to as an unconsolidated investment, is an ownership interest in the consolidated entity that should be reported as a component of equity in the consolidated financial statements. Among other requirements, the guidance requires consolidated net income (loss) to be reported at amounts attributable to both the parent and the non-controlling interest. It also requires disclosure, on the face of the consolidated income statement, of the amounts of consolidated net income (loss) attributable to the parent and to the non-controlling interest.

Income Taxes

The Company accounts for its income taxes under the assets and liabilities method, which requires recognition of deferred tax assets and liabilities for future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

The Company records net deferred tax assets to the extent the Company believes these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. A valuation allowance is established against deferred tax assets that do not meet the criteria for recognition. In the event the Company was to determine that it would be able to realize deferred income tax assets in the future in excess of their net recorded amount, they would make an adjustment to the valuation allowance which would reduce the provision for income taxes.

The Company follows the accounting guidance which provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized initially and in subsequent periods. Also, included is guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

Reclassifications

In conjunction with the adoption of new accounting standards, certain debt or loan issuance costs for the three and nine months ended September 30, 2015 as well as certain amounts as of December 31, 2015, have been reclassified to conform to the current year’s presentation.

XML

Financial Instruments And Concentrations Of Credit Risk

9 Months Ended

Sep. 30, 2016

Risks and Uncertainties [Abstract]

Financial Instruments And Concentrations Of Credit Risk

NOTE C — FINANCIAL INSTRUMENTS AND CONCENTRATIONS OF CREDIT RISK

Financial instruments consist of cash, interest and other receivables, notes receivable, accounts payable and accrued liabilities, due to/from related parties and notes payable. The carrying values of these instruments approximate their fair values due to their short-term nature. Marketable securities – related party and investment in real estate loans are further described in Note K – Fair Value.

Financial instruments with concentration of credit and market risk include cash, interest and other receivables, marketable securities - related party, notes receivable, accounts payable and accrued liabilities, due to/from related parties, notes payable, and loans secured by deeds of trust.

We maintain cash deposit accounts and certificates of deposit that, at times, may exceed federally-insured limits. To date, we have not experienced any losses. As of September 30, 2016 and December 31, 2015 we had approximately $3.4 million and $3.9 million of funds, respectively, in excess of the federally-insured limits.

As of September 30, 2016, 100% of our loans were loans in which we participated with other lenders, most of whom are our affiliates.

As of September 30, 2016, 48% and 48% of our loans were in Nevada and California, respectively, compared to 93% in Nevada at December 31, 2015.

As of September 30, 2016, the loan to our largest borrower represented approximately 48% of our total investment in real estate loans. This real estate loan is an acquisition and development loan secured by property located in California, with a first lien position. The interest rate is 8.5% per annum, the outstanding balance is approximately $3.8 million and the loan is considered a performing loan. As of December 31, 2015, the loan to our largest borrower represented approximately 53% of our total investment in real estate loans. This real estate loan was a commercial loan secured by property located in Nevada, with a first lien position. The interest rate is 15% per annum, the outstanding balance is approximately $2.5 million and the loan is considered a non-performing loan.

The success of a borrower’s ability to repay its real estate loan obligation in a large lump-sum payment may be dependent upon the borrower’s ability to refinance the obligation or otherwise raise a substantial amount of cash. With the weakened economy, credit continues to be difficult to obtain and as such, many of our borrowers who develop and sell commercial real estate projects have been unable to complete their projects, obtain takeout financing or have been otherwise adversely impacted. In addition, an increase in interest rates over the loan rate applicable at origination of the loan may have an adverse effect on our borrower’s ability to refinance.

Common Guarantors

As of December 31, 2015, two loans totaling approximately $1.7 million, representing approximately 38% of our portfolio’s total value, have a common guarantor. As of September 30, 2016, these loans were paid in full.

As of September 30, 2016 and December 31, 2015, three loans totaling approximately $0.3 million, representing approximately 3.9% and 7%, respectively, of our portfolio’s total value, have a common guarantor. These loans were considered performing loans as of September 30, 2016.

As of September 30, 2016, three loans totaling approximately $0.9 million, representing approximately 11.6% of our portfolio’s total value, had a common guarantor.

These loans were considered performing loans as of September 30, 2016.

XML

Investments In Real Estate Loans

9 Months Ended

Sep. 30, 2016

Real Estate [Abstract]

Investments In Real Estate Loans

NOTE D — INVESTMENTS IN REAL ESTATE LOANS

As of September 30, 2016 and December 31, 2015, most of our loans provided for interest only payments with a “balloon” payment of principal payable and any accrued interest payable in full at the end of the term. As of September 30, 2016 and December 31, 2015, three loans had variable interest rates adjusted quarterly at a rate of prime plus 3.30% (6.8% as of September 30, 2016 and December 31, 2015). The balance on these loans was approximately $0.3 million as of September 30, 2016 and December 31, 2015.

In addition, we may invest in real estate loans that require borrowers to maintain interest reserves funded from the principal amount of the loan for a period of time. At September 30, 2016 and December 31, 2015, we had one and three investments in real estate loans that had interest reserves.

Loan Portfolio

As of September 30, 2016, we had five available real estate loan products consisting of commercial, construction, acquisition and development, land and residential. The effective interest rates on all product categories range from 8% to 15% which includes performing and non performing loans that are being fully or partially accrued and will be payable at maturity. Revenue by product will fluctuate based upon relative balances during the period.

Investments in real estate loans as of September 30, 2016, were as follows:

Loan Type	Number of Loans			Balance *	Weighted Average Interest Rate	Portfolio Percentage	Current Weighted Average Loan-To-Value, Net of Allowance for Loan Losses
Commercial	8	$	3,676,000		12.75%	46.55%	59.72%
Construction	1		403,000		0.88%	5.10%	15.35%
Acquisition	1		3,818,000		9.35%	48.35%	133.61%
Total	10	$	7,897,000		10.69%	100.00%	46.97%

Investments in real estate loans as of December 31, 2015, were as follows:

Loan Type	Number of Loans		Balance *	Weighted Average Interest Rate	Portfolio Percentage	Current Weighted Average Loan-To-Value, Net of Allowance for Loan Losses
Commercial	7	$	4,541,000	11.85%	98.48%	60.14%
Construction	1		70,000	0.12%	1.52%	0.44%
Total	8	$	4,611,000	11.79%	100.00%	58.61%

* Please see Balance Sheet Reconciliation below.

The “Weighted Average Interest Rate” as shown above is based on the contractual terms of the loans for the entire portfolio including non-performing loans. The weighted average interest rate on performing loans only, as of September 30, 2016 and December 31, 2015, was 10.69% and 11.79%, respectively. Please see “Non-Performing Loans” and “Asset Quality and Loan Reserves” below for further information regarding performing and non-performing loans.

Loan-to-value ratios are generally based on the most recent appraisals and may not reflect subsequent changes in value and include allowances for loan losses. Recognition of allowance for loan losses will result in a maximum loan-to-value ratio of 100% per loan.

The following is a schedule of priority of real estate loans:

Loan Type	Number of Loans		September 30, 2016 Balance*	Portfolio Percentage	Number of Loans		December 31, 2015 Balance*		Portfolio Percentage
First deeds of trust	9	$	7,893,000	99.95%	8	$		4,611,000	100.00%
Second deeds of trust	1		4,000	0.05%	--			--	--
Total	10	$	7,897,000	100.00%	8	$		4,611,000	100.00%

* Please see Balance Sheet Reconciliation below.

The following is a schedule of contractual maturities of investments in real estate loans as of September 30, 2016:

Non-performing and past due loans	$	2,450,000
October 2016 –December 2016		--
January 2017 – March 2017		--
April 2017 – June 2017		--
July 2017 – September 2017		--
Thereafter		5,447,000
Total	$	7,897,000

The following is a schedule by geographic location of investments in real estate loans:

		September 30, 2016 Balance *	Portfolio Percentage		December 31, 2015 Balance *	Portfolio Percentage
Nevada	$	3,765,000	47.68%	$	4,295,000	93.15%
California		3,818,000	48.35%		--	--
Ohio		308,000	3.90%		310,000	6.72%
Arizona		6,000	0.07%		6,000	0.13%
Total	$	7,897,000	100.00%	$	4,611,000	100.00%

* Please see Balance Sheet Reconciliation below.

Balance Sheet Reconciliation

The following table reconciles the balance of the loan portfolio to the amount shown on the accompanying Consolidated Balance Sheets.

		September 30, 2016		December 31, 2015
Balance per loan portfolio	$	7,897,000	$	4,611,000
Less:		--		--
Allowance for loan losses (a)		(2,450,000)		(2,450,000)
Balance per consolidated balance sheets	$	5,447,000	$	2,161,000

(a) Please refer to Specific Reserve Allowance below.

Non-Performing Loans

As of September 30, 2016 and December 31, 2015, we had one loan considered non-performing (i.e., based on current information and events, it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement or when the payment of interest is 90 days past due). This loan has been placed on non-accrual of interest status and is currently carried on our books at a value of $0, net of allowance for loan losses of approximately $2.5 million.

At September 30, 2016 and December 31, 2015, the following loan types were non-performing:

Loan Type	Number of Non-Performing Loans		Balance		Allowance for Loan Losses		Net Balance
Commercial	1	$	2,450,000	$	(2,450,000)	$	--
Total	1	$	2,450,000	$	(2,450,000)	$	--

Asset Quality and Loan Reserves

Losses may occur from investing in real estate loans. The amount of losses will vary as the loan portfolio is affected by changing economic conditions and the financial condition of borrowers.

The conclusion that a real estate loan is uncollectible or that collectability is doubtful is a matter of judgment. On a quarterly basis, our manager evaluates our real estate loan portfolio for impairment. The fact that a loan is temporarily past due does not necessarily mean that the loan is non-performing. Rather, all relevant circumstances are considered by our manager to determine impairment and the need for specific reserves. Such evaluation, which includes a review of all loans on which full collectability may not be reasonably assured, considers among other matters:

· Prevailing economic conditions;

· Historical experience;

· The nature and volume of the loan portfolio

· The borrowers’ financial condition and adverse situations that may affect the borrowers’ ability to pay;

· Evaluation of industry trends; and

· Estimated net realizable value of any underlying collateral in relation to the loan amount.

Based upon this evaluation, a determination is made as to whether the allowance for loan losses is adequate to cover any potential losses on an individual loan basis; we do not have a general allowance for loan losses. Additions to the allowance for loan losses are made by charges to the provision for loan loss. As of September 30, 2016, our ratio of total allowance for loan losses to total loans with an allowance for loan loss was 100%.

The following is a breakdown of allowance for loan losses related to performing loans and non-performing loans:

		September 30, 2016
		Balance		Allowance for loan losses **		Balance, net of allowance
Non-performing loans – no related allowance	$	--	$	--	$	--
Non-performing loans – related allowance		2,450,000		(2,450,000)		--
Subtotal non-performing loans		2,450,000		(2,450,000)		--
Performing loans – no related allowance		5,447,000		--		5,447,000
Performing loans – related allowance		--		--		--
Subtotal performing loans		5,447,000		--		5,447,000
Total	$	7,897,000	$	(2,450,000)	$	5,447,000

		As of December 31, 2015
		Balance		Allowance for loan losses **		Balance, net of allowance
Non-performing loans – no related allowance	$	--	$	--	$	--
Non-performing loans – related allowance		2,450,000		(2,450,000)		--
Subtotal non-performing loans		2,450,000		(2,450,000)		--
Performing loans – no related allowance		2,161,000		--		2,161,000
Performing loans – related allowance		--		--		--
Subtotal performing loans		2,161,000		--		2,161,000
Total	$	4,611,000	$	(2,450,000)	$	2,161,000

** Please refer to Specific Reserve Allowances below.

Our manager evaluated our loans and, based on current estimates with respect to the value of the underlying collateral, believes that such collateral is sufficient to protect us against further losses of principal. However, such estimates could change or the value of the underlying real estate could decline. Our manager will continue to evaluate our loans in order to determine if any other allowance for loan losses should be recorded.

Specific Reserve Allowances

As of September 30, 2016 and December 31, 2015, we have provided a specific reserve allowance for one non-performing loan in the amount of $2,450,000 based on updated appraisals of the underlying collateral and/or our evaluation of the borrower. We will continue to evaluate our position in this loan.

Extensions

As of September 30, 2016 and December 31, 2015, our manager had granted extensions on one outstanding loan totaling approximately $2.5 million, pursuant to the terms of the original loan agreements, which permit extensions by mutual consent, or as part of a TDR. Such extensions are generally provided on loans where the original term was 12 months or less and where a borrower requires additional time to complete a construction project or negotiate take-out financing. Our manager generally grants extensions when a borrower is in compliance with the material terms of the loan, including, but not limited to the borrower’s obligation to make interest payments on the loan. In addition, if circumstances warrant, our manager may extend a loan that is in default as part of a work out plan to collect interest and/or principal.

XML

Investment In Delaware Statutory Trust

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Investment In Delaware Statutory Trust

NOTE E —INVESTMENTS IN DELAWARE STATUTORY TRUST

As of September 30, 2016, we had investments in two Delaware Statutory Trusts (“DST”) for a total of approximately $3.1 million which have mandatory repurchase agreements which, for accounting purposes, are accounted for in a manner similar to loans. The DST’s hold commercial properties located in Illinois and Florida respectively, which we consider to be the collateral on these loans. Additionally, each DST is guaranteed by a third party Broker Dealer who has a selling agreement with MVP REIT and MVP REIT II. Certain members of the Broker Dealer’s management also guaranteed these loans. During the three and nine months ended September 30, 2016, we earned approximately $0.1 million and $0.4 million in interest, respectively.

XML

Assets Held For Sale

9 Months Ended

Sep. 30, 2016

Banking and Thrift [Abstract]

Assets Held For Sale

NOTE F —ASSETS HELD FOR SALE

During April 2015, we committed to a plan to sell all interests in our six office buildings, at which point we began classifying the related assets as assets held for sale, and the related liabilities as liabilities related to assets held for sale. Additionally, we have classified the six office building’s operating results of operations as discontinued operations.

Assets and groups of assets and liabilities which comprise disposal groups are classified as “held for sale” when all of the following criteria are met: a decision has been made to sell, the assets are available for sale immediately, the assets are being actively marketed at a reasonable price in relation to the current fair value, a sale has been or is expected to be concluded within twelve months of the balance sheet date, and significant changes to the plan to sell are not expected. Assets held for sale are not depreciated.

Additionally, the operating results and cash flows related to these assets and liabilities are included in discontinued operations in the consolidated statements of operations and consolidated statements of cash flows for the nine months ended September 30, 2016.

On January 29, 2016, we closed on the sale of our interest in three office buildings that we owned with VRM I through various subsidiaries. The first building was owned by Building C, LLC and is located at 8930 West Sunset Road, Las Vegas, Nevada (the “8930 Building”). The second building was owned by SE Property Investments, LLC and is located at 8905 West Post Road, Las Vegas, Nevada (the “8905 Building”) and the third building was owned by ExecuSuite Properties, LLC and is located at 8945 West Post Road, Las Vegas, Nevada (the “8945 Building”).

The sales price for the 8930 Building was $12.1 million less the current debt on the property, which was assumed by the purchaser for a net of approximately $4.0 million of which our share was approximately $2.9 million before closing costs. The sales price for the 8905 Building was $5.6 million less the current debt on the property, which was assumed by the purchaser for a net of approximately $2.3 million of which our share was approximately $1.6 million before closing costs. The sales price for the 8945 Building was $5.0 million less the current debt on the property, which was assumed by the purchaser for a net of approximately $2.0 of which our share was approximately $1.4 million before closing costs.

On April 5, 2016, we closed on the sale of our interest in two office buildings that we owned with VRM I through various subsidiaries. The first building was owned by Wolfpack Properties, LLC and is located at 8860 West Sunset Road, Las Vegas, Nevada (the “8860 Building”). The second building was owned by Devonshire, LLC and is located at 8925 West Post Road, Las Vegas, Nevada (the “8925 Building”).

The sales price for the 8860 Building was $5.5 million and the sales price for the 8925 Building is $5.4 million less the combined current debt on the properties, which was assumed by the purchaser for a net of approximately $7.6 million of which our share was approximately $5.5 million before closing costs.

On May 13, 2016, we closed on the sale of our interest in an office building that we owned with VRM I through various subsidiaries. The building was owned by Building A, LLC and is located at 8880 West Sunset Road, Las Vegas, Nevada (the “8880 Building”).

The sales price for the 8880 Building was $12.3 million less the combined current debt on the properties, which was assumed by the purchaser for a net of approximately $8.2 million of which our share was approximately $5.9 million before closing costs.

We and VRM I, through its subsidiaries, have the right, for a period of one year from the closing dates of the building sales, to repurchase the buildings at a price equal to (i) the sales price for each building, plus (ii) $65,000 for the 8930 Building, $65,000 for the 8880 building, $30,000 for the 8905 Building, $30,000 for the 8860 Building, $30,000 for the 8925 Building and $30,000 for the 8945 Building, plus (iii) twelve percent less any profit realized by the purchaser of the building being repurchased. Stable Development, LLC, a limited liability company is the manager of and owns a 15% interest in each of the purchasers. Due to this repurchase right, we have recorded the gain on sale as deferred revenue, to be recognized when the repurchase right is exercised or expires. Lance Bradford, the former President of MVP REIT is an owner of Stable Development, LLC.

As of September 30, 2016 all assets previously held for sale have been sold.

The following is a summary of the results of operations related to the assets held for sale for the three and nine months ended September 30, 2016 and 2015.

		For The Three Months Ended September 30,				For The Nine Months Ended September 30,
		2016		2015		2016		2015
Revenue	$	--	$	1,200,000	$	943,000	$	3,633,000
Revenue eliminated through consolidation		(9,000)		(67,000)		(66,000)		(201,000)
Expenses		15,000		(794,000)		(1,495,000)		(2,430,000)
Net income (loss)	$	6,000	$	339,000	$	(618,000)	$	1,002,000

XML

Investment In Marketable Securities - Related Party

9 Months Ended

Sep. 30, 2016

Investments, Debt and Equity Securities [Abstract]

Investment In Marketable Securities - Related Party

NOTE G — INVESTMENT IN MARKETABLE SECURITIES – RELATED PARTY

In December 2014, VRM I effected a 1 for 4 reverse split of its common stock. All share and per share information in VRM I’s consolidated financial statements and its accompanying notes have been adjusted to retroactively reflect the 1 for 4 reverse stock split.

As of September 30, 2016, we owned 134,545 shares of VRM I’s common stock, representing approximately 10.8% of the total outstanding shares. VRM I’s common stock is listed on the OTC Pink Marketplace. The closing price of VRM I’s common stock on September 30, 2016, was $3.49 per share.

During the nine months ended September 30, 2016, the trading price for VRM I’s common stock ranged from $3.33 to $4.00 per share. We will continue to evaluate our investment in marketable securities on a quarterly basis.

XML

Investment In MVP REIT II

9 Months Ended

Sep. 30, 2016

Investments in and Advances to Affiliates, Schedule of Investments [Abstract]

Investment In MVP REIT II

NOTE H — INVESTMENT IN MVP REIT II

During May 2015, our Board of Directors and the Board of Directors of VRM I agreed to form MVP CP II. We own 60% and VRM I owns 40%. The purpose of MVP CP II is to act as the sponsor of MVP REIT II, a Maryland corporation, which was formed as a publicly registered non traded REIT (“MVP REIT II”). MVP REIT II’s registration statement has been declared effective by the SEC on October 22, 2015. MVP REIT II is a proposed $550,000,000 offering with the proceeds raised from the offering being used primarily to acquire parking assets in the United States and Canada. MVP REIT II has engaged MVP Advisors as its advisor.

We and VRM I have agreed to fund certain costs and expenses of MVP REIT II through MVP CP II in proportion to our respective ownership interest. As consideration for the initial investment of $0.2 million MVP CP II received 8,000 shares of common stock in MVP REIT II.

As part of the advisory agreement, MVP Advisors will receive a 1% annual asset management fee and 2.25% of the purchase price on all acquisitions. MVP Advisors will also receive the lesser of 3% of contract sale price or 50% of the brokerage commission paid on dispositions of MVP REIT II assets, which amount shall accrue until the MVP REIT II investors have a return of their net capital and a 6% annual cumulative non compounded return. In addition once the MVP REIT II investors have received a return of their net capital invested and a 6% annual cumulative, non-compounded return, then MVP Advisors will be entitled to receive 15% of the remaining proceeds. This fee will be payable under only one of the following events: (i) if MVP REIT II shares are listed on a national securities exchange; (ii) if MVP REIT II assets are sold, other than single assets sold in the ordinary course, or liquidated; (iii) upon a merger, share exchange, reorganization or other transaction pursuant to which MVP REIT II investors receive cash or publicly traded securities in exchange for their shares; or (iv) upon termination of the advisory agreement. The operating agreement of the Advisor provides that once we and VRM I have been repaid in full for any capital contributions to the Advisor or for any expenses advanced on the Advisor’s behalf, or capital investment, and once we and VRM I have received an annualized return on our capital investment of 7.5%, then Michael Shustek will receive 40% of the net profits of the Advisor.

As of September 30, 2016, we held 5,000 shares of MVP REIT II’s outstanding common stock, purchased in December 2015, for $125,000. During the nine months ended September 30, 2016, we received approximately $2,000 in DRIP shares as dividend income.

XML

Related Party Transactions

9 Months Ended

Sep. 30, 2016

Related Party Transactions [Abstract]

Related Party Transactions

NOTE I — RELATED PARTY TRANSACTIONS

Transactions with the Manager

Our manager is entitled to receive from us an annual management fee of up to 0.25% of our aggregate capital contributions received by us and Fund II from the sale of shares or membership units, paid monthly. The amount of management fees earned by our manager for the three months ended September 30, 2016 and 2015 were approximately $274,000 and $274,000, respectively, during each period. The amount of management fees earned by our manager for the nine months ended September 30, 2016 and 2015 were approximately $823,000 and $822,000, respectively, during each period.

As of September 30, 2016 and December 31, 2015, our manager owned 23,175 of our common shares, representing approximately 1.0% of our total outstanding common stock at the respective dates.

During the nine months ended September 2016 we paid the manager approximately $0.2 million in fees related to the investment in Delaware Statutory Trust. During September 2015, we and VRM I paid the manager approximately $0.3 million in fees, of which our portion was approximately $0.2 million, related to the investment in Delaware Statutory Trust.

Transactions with Other Related Parties

During the three months ended September 30, 2016, the trading price for VRM I’s common stock ranged from $3.33 to $4.00 per share. For the three and nine months ended September 30, 2016 and 2015, we recognized no dividend income from VRM I.

As of September 30, 2016 and December 31, 2015, VRM I owned 134,270 of our common shares, representing approximately 5.6% of our total outstanding common stock for both periods.

During the three and nine months ended September 30, 2016, we paid Vestin Mortgage a disposition fee of approximately $0.2 million and $0.8 million, respectively, related to the sale of assets held for sale.

As of September 30, 2016 and December 31, 2015, MVP Advisors owed VRM I approximately $4.5 million.

As of September 30, 2016 and December 31, 2015, we owned a 60% interest in MVP Advisors, the advisor of MVP REIT and MVP REIT II, Inc.

MVP Advisors is entitled to receive a monthly asset management fee at an annual rate equal to 0.85% of the fair market value of (i) all assets then held by MVP REIT or (ii) MVP REIT’s proportionate share thereof in the case of an investment made through a joint venture or other co-ownership arrangement, excluding (only for clause (ii)) debt financing obtained by MVP REIT or made available to MVP REIT. The fair market value of real property shall be based on annual “AS-IS”, “WHERE-IS” appraisals, and the fair market value of real estate-related secured loans shall be equal to the face value of such loan, unless it is non-performing, in which case the fair market value shall be equal to the book value of such loan. The asset management fee will be reduced to 0.75% if MVP REIT is listed on a national securities exchange. Asset management fees for the three months ended September 30, 2016 and 2015 were approximately $0.3 million and $0.1 million, respectively. Asset management fees for the nine months ended September 30, 2016 and 2015 were approximately $0.8 million and $0.3 million, respectively.

MVP Advisors receives a monthly debt financing fee at an annual rate equal to 0.25% of the aggregate debt financing obtained by MVP REIT or made available to MVP REIT, such as mortgage debt, lines of credit, and other term indebtedness, including refinancing’s. In the case of a joint venture, MVP REIT pays this fee only on MVP REIT’s pro rata share. Debt financing fees for the three months ended September 30, 2016 and 2015 were approximately $32,000, and $18,000, respectively. Debt financing fees for the nine months ended September 30, 2016 and 2015 were approximately $81,000, and $48,000, respectively.

MVP Advisors receives a 3% acquisition fee for all acquisitions of MVP REIT. MVP Advisors received approximately $24,000 and $29,000 in acquisition fee income from MVP REIT during the three months ended September 30, 2016 and 2015. MVP Advisors received approximately $0.9 million and $1.3 million in acquisition fee income from MVP REIT during the nine months ended September 30, 2016 and 2015, respectively.

MVP Advisors receives a 2.25% acquisition fee for all acquisitions of MVP REIT II. MVP Advisors received approximately $0.4 million and $0.8 million in acquisition fee income from MVP REIT II during the three and nine months ended September 30, 2016.

As of September 30, 2016 we have made loans of approximately $12.9 million to MVP Advisors, the manager of MVP REIT. We believe MVP Advisors has the opportunity to generate fees for the services it will render to MVP REIT. However, such fees may not be significant in the near term as MVP REIT only recently commenced operations in December 2012, and over the next 12 months, there may be a diminution of our liquid assets. If MVP REIT is unable to deploy the capital and operate its business successfully, then our return on our investment in MVP Advisor and the ability of MVP Advisor to repay our loans could be adversely impacted. We have not forgiven the balance due from MVP Advisor; however the decision by MVP Advisor to forgive certain amounts creates additional uncertainty as to when we will be repaid the amounts loaned to MVP Advisor. Based on these uncertainties, we have determined to fully impair the balance of this investment and note receivable.

As consideration for the initial investment of $0.2 million MVP CP II received 8,000 shares of common stock in MVP REIT II. As of September 30, 2016 we have made loans of approximately $2.0 million to MVP CP II. Similar to our investments in MVP Advisors in connection with MVP REIT, the return on our investment in MVP CP II in connection with MVP REIT II, including the ability of MVP CP II to repay its loans, will likely depend upon the success of the pending public offering of MVP REIT II and the ability of MVP CP II and MVP Advisor to successfully deploy the offering proceeds. Based on uncertainties regarding repayment, during the nine months ended September 30, 2016, we have determined to fully impair the entire balance of this loan.

As of September 30, 2016 and December 31, 2015, MVP CP II owed VRM I approximately $3.2 million and $0.7 million, respectively.

From time to time, we may also jointly invest in real property or real estate loans with our affiliates, including VRM I, MVP REIT, Inc. and MVP REIT II, Inc. These investments are described elsewhere in this report and incorporated herein by reference.

From time to time, we may also acquire or sell investments in real estate or in real estate loans from/to our manager or other related parties. Pursuant to the terms of our Management Agreement, such acquisitions and sales are made without any mark up or mark down. No gain or loss is recorded on these transactions, as it is not our intent to make a profit on the purchase or sale of such investments. The purpose is generally to diversify our portfolio by syndicating loans and real estate investments, thereby providing us with additional capital to make additional loans and investments in real estate.

On November 25, 2014, Shustek Investments Inc., a company wholly owned by our CEO Mike Shustek, entered into a loan purchase contract with us to acquire a loan with a book value of approximately $2.4 million. The loan was originated during March 2009 with an original principal balance of $7.45 million earning interest at a rate of 11% per annum. The borrower made principal payments during the life of the loan; however, they also received extensions for the maturity of the note. As of the date of the loan purchase contract, the loan was extended through January 2015. The purchase price of the loan was approximately $3.0 million, which includes the purchase of interest assigned to third parties. As additional consideration we may receive 50% of any amount collected in excess of the purchase price less any expenses incurred by Shustek Investments. After three years the 50% shall be reduced to 33%. This transaction resulted in a gain on sale of loan – related party totaling approximately $0.6 million for the year ended December 31, 2014. During the nine months ended September 30, 2015, this loan was paid in full and we received approximately $1.6 million.

XML

Notes Payable

9 Months Ended

Sep. 30, 2016

Payables and Accruals [Abstract]

Notes Payable

NOTE J — NOTES PAYABLE

In April 2015, we financed a 12-month insurance policy for Directors and Officers liability, with an annual interest rate of 2.9%. The agreement required a down payment of $39,000 and nine monthly payments of $25,000 beginning on May 27, 2015. During December 2015, the outstanding balance of the note was paid in full.

In April 2016, we financed a 12-month insurance policy for Directors and Officers liability, with an annual interest rate of 3.8%. The agreement required a down payment of $37,000 and nine monthly payments of $21,000 beginning on May 27, 2016. As of September 2016, the outstanding balance of the note was approximately $0.1 million.

During April 2014, through the acquisition of SE Properties, the Company assumed the liability on a loan with a balance of approximately $3.4 million, collateralized by real property located in Las Vegas, Nevada, bearing an annual interest rate of 6.625%, and payable in monthly installment payments of principal and interest totaling approximately $25,000 maturing in January 2036. During January 2016 this loan was assigned to the buyer and the Company was released from the debt through the sale of the property.

During April 2014, through the acquisition of ExecuSuites, the Company assumed the liability on a loan with a balance of approximately $3.1 million, collateralized by real property located in Las Vegas, Nevada, bearing an annual interest rate of 5.875%, and payable in monthly installment payments of principal and interest totaling approximately $21,000 maturing in May 2037. During January 2016 this loan was assigned to the buyer and the Company was released from the debt through the sale of the property.

During July 2014, through the acquisition of Building C, the Company assumed the liability on a loan with a balance of approximately $8.4 million, collateralized by real property located in Las Vegas, Nevada, bearing an annual interest rate of 4.81%, and payable in monthly installment payments of principal and interest totaling approximately $49,000, with a lump sum payment of approximately $7.0 million due at maturity in April of 2021. During January 2016 this loan was assigned to the buyer and the Company was released from the debt through the sale of the property.

On May 16, 2014, Wolfpack, LLC and Devonshire, LLC entered into a loan agreement with a financial institution in the amount of $7.8 million, collateralized by real property held in Las Vegas, Nevada. The loan bears an annual interest rate of 4.6% and is payable in monthly installment payments of principal and interest totaling approximately $50,000, with a lump sum payment of approximately $6.3 million due at maturity in June of 2024. This loan agreement replaces their previous loans which held balances of approximately $3.9 million and $3.9 million, respectively, at payoff. During April 2016 this loan was assigned to the buyer and the Company was released from the debt through the sale of the property.

During August 2014, through the acquisition of Building A, the Company assumed the liability on a loan with a balance of approximately $8.4 million, collateralized by real property located in Las Vegas, Nevada, bearing an annual interest rate of 4.969%, and payable in monthly installment payments of principal and interest totaling approximately $46,000, with a lump sum payment of approximately $7.8 million due at maturity in April of 2019. During May 2016 this loan was assigned to the buyer and the Company was released from the debt through the sale of the property.

As of September 30, 2016, future principal payments on the notes payable are as follows:

2016	$	84,000
2017		--
2018		--
2019		--
2020		--
Thereafter		--
Total	$	84,000

XML

Fair Value

9 Months Ended

Sep. 30, 2016

Fair Value Disclosures [Abstract]

Fair Value

NOTE K— FAIR VALUE

As of September 30, 2016 and December 31, 2015, financial assets and liabilities utilizing Level 1 inputs included investment in marketable securities - related party and third party. We had no assets or liabilities utilizing Level 2 inputs, and assets and liabilities utilizing Level 3 inputs included investments in real estate loans and investments in equity method investees, both held for sale and not held for sale.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, our degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an asset or liability will be classified in its entirety based on the lowest level of input that is significant to the measurement of fair value.

Fair value is a market-based measure considered from the perspective of a market participant who holds the asset or owes the liability rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, our own assumptions are set to reflect those that market participants would use in pricing the asset or liability at the measurement date. We use prices and inputs that are current as of the measurement date, including during periods of market dislocation, such as the recent illiquidity in the auction rate securities market. In periods of market dislocation, the observability of prices and inputs may be reduced for many instruments. This condition may cause our financial instruments to be reclassified from Level 1 to Level 2 or Level 3 and/or vice versa.

Our valuation techniques will be consistent with at least one of the three possible approaches: the market approach, income approach and/or cost approach. Our Level 1 inputs are based on the market approach and consist primarily of quoted prices for identical items on active securities exchanges. Our Level 2 inputs are primarily based on the market approach of quoted prices in active markets or current transactions in inactive markets for the same or similar collateral that do not require significant adjustment based on unobservable inputs. Our Level 3 inputs are primarily based on the income and cost approaches, specifically, discounted cash flow analyses, which utilize significant inputs based on our estimates and assumptions.

The following table presents the valuation of our financial assets and liabilities as of September 30, 2016 and December 31, 2015, measured at fair value on a recurring basis by input levels:

		Fair Value Measurements at Reporting Date Using
		Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance at  09/30/16		Carrying Value on Balance Sheet at 09/30/16
Assets
Investment in marketable securities - related party	$	455,000	$	--	$	--	$	455,000	$	455,000
Investment in real estate loans	$	--	$	--	$	5,460,000	$	5,460,000	$	5,447,000

		Fair Value Measurements at Reporting Date Using
		Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance at 12/31/15		Carrying Value on Balance Sheet at 12/31/15
Assets
Investment in marketable securities - related party	$	262,000	$	--	$	--	$	262,000	$	262,000
Investment in real estate loans	$	--	$	--	$	2,148,000	$	2,148,000	$	2,161,000

The following table presents the changes in our financial assets and liabilities that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3) from January 1, 2016 to September 30, 2016:

		Investment in real estate loans
Balance on January 1, 2016	$	2,148,000
Purchase and additions of assets
New mortgage loans and mortgage loans acquired		7,340,000
Purchase from third parties		--
Sales, pay downs and reduction of assets
Collections and settlements of principal and sales of investment in real estate loans		(47,000)
Sale of assets to third parties		(4,008,000)
Temporary change in estimated fair value based on future cash flows		27,000
Balance on September 30, 2016, net of temporary valuation adjustment	$	5,460,000

The following table presents the changes in our financial assets and liabilities that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3) from January 1, 2015 to December 31, 2015:

		Investment in real estate loans
Balance on January 1, 2015	$	5,167,000
Purchase and additions of assets
New mortgage loans and mortgage loans acquired		5,217,000
Purchase from third parties		200,000
Sales, pay downs and reduction of assets
Collections and settlements of principal and sales of investment in real estate loans		(5,971,000)
Sale of assets to third parties		(2,472,000)
Temporary change in estimated fair value based on future cash flows		7,000
Balance on December 31, 2015, net of temporary valuation adjustment	$	2,148,000

XML

Employee Benefit Plan

9 Months Ended

Sep. 30, 2016

Compensation and Retirement Disclosure [Abstract]

Employee Benefit Plan

NOTE L— EMPLOYEE BENEFIT PLAN

MVP Advisors maintains a 401(k) Plan (the “Plan”), which is a defined contribution plan covering all eligible employees. Under the provisions of the Plan, participants may direct the Company to defer a portion of their compensation to the Plan, subject to Internal Revenue Code limitations. The Company provides for an employer matching contribution equal to 100% of the first 3% of eligible compensation and 50% of the next 2% of eligible compensation contributed by each employee, which is funded in cash. All contributions vest immediately.

Total expense recorded for the matching 401(k) contribution in the three and nine months ended September 30, 2016 was approximately $12,000 and $39,000, respectively.

XML

Segment Information

9 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

Segment Information

NOTE M — SEGMENT INFORMATION

Company management reviews financial and operating performance in the following three separate operating segments: (1) investment in real estate loans, (2) investments in real property and (3) investment in a real estate management company. Selling, general and administrative expenses, primarily consisting of compensation of employees, seminar expense, professional fees and overhead costs not directly related to a specific operating segment, are reflected in the table below as corporate activities.

Assets related to investments in real property are currently listed as held for sale. Revenues, net of expenses for this segment are reported in discontinued operations.

The following are certain financial data for the Company’s operating segments for the periods:

		For The Three Months Ended September 30,				For The Nine Months Ended September 30,
		2016		2015		2016		2015
Revenues
Investment in real estate loans	$	236,000	$	560,000	$	668,000	$	2,732,000
Investments in real property held for sale		735,000		29,000		1,982,000		1,331,000
Investment in real estate management		293,000		164,000		840,000		372,000
Total revenues		1,264,000		753,000		3,490,000		4,435,000
Operating expenses
Investment in real estate loans	$	274,000	$	274,000	$	823,000	$	822,000
Investment in real property		1,000		1,000		3,000		3,000
Investment in real estate management		675,000		884,000		1,847,000		2,598,000
Corporate activities		2,708,000		3,196,000		7,210,000		7,505,000
Total expenses		3,658,000		4,355,000		9,883,000		10,928,000

Total Assets		September 30, 2016		December 31, 2015
Investment in real estate loans	$	8,673,000	$	4,003,000
Investment in real property held for sale		--		44,545,000
Corporate assets		7,143,000		5,442,000
Total assets	$	15,816,000	$	53,990,000

XML

Recent Accounting Pronouncements

9 Months Ended

Sep. 30, 2016

Accounting Changes and Error Corrections [Abstract]

Recent Accounting Pronouncements

NOTE N — RECENT ACCOUNTING PRONOUNCEMENTS

In February 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis, which provides guidance on the consolidation evaluation for reporting organizations that are required to evaluate whether they should consolidate certain legal entities. In accordance with the guidance, all legal entities are subject to reevaluation under the revised consolidation model. The guidance is effective in the first and second quarter of 2016, and early adoption is permitted. We are currently evaluating the potential impact of the adoption of ASU 2015-02 on our consolidated financial statements.

On April 17, 2015, the FASB issued ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs, which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the associated debt liability. Currently, debt issuance costs are recorded as an asset and amortization of these deferred financing costs is recorded in interest expense. Under the new standard, debt issuance costs will continue to be amortized over the life of the debt instrument and amortization will continue to be recorded in interest expense. The new standard is effective for the Company on January 1, 2016 and will be applied on a retrospective basis. The Company is currently evaluating ASU 2015-03, and anticipates a change in our presentation only since the standard does not alter the accounting for debt issuance costs.

XML

Legal Matters Involving The Company

9 Months Ended

Sep. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

Legal Matters Involving The Company

NOTE O — LEGAL MATTERS INVOLVING THE COMPANY

On February 7, 2012, we, VRM I and Fund III entered into a Deed in Lieu Agreement with a borrower in lieu of the foreclosure of our subordinated secured loan which had matured on December 31, 2011, with a principal balance, net of allowance for loan loss, of approximately $9.9 million, of which our portion was approximately $9.0 million. Pursuant to the Deed in Lieu Agreement, our subsidiary 1701 Commerce, LLC (“1701 Commerce”) received a deed to the secured property operated as the Sheraton Hotel and Spa Fort Worth, Texas (the “Hotel”). On March 26, 2012, 1701 Commerce filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Northern District of Texas, Ft. Worth Division, to seek relief from a pending foreclosure of the Hotel by the senior mortgage lien holder and to preserve and protect 1701 Commerce’s equity and the interests of other Hotel creditors. Due to the uncertainty and disputes involving the Hotel, we recorded this investment as Other Real Estate Owned on our balance sheet until August 23, 2012. On July 17, 2013 the Hotel was sold to a third party for the sum of $49.3 million. The net proceeds of the sale and the cash on hand as of the date of the sale were used to pay all 1701 Commerce creditors 100% of their claim plus interest, with the balance distributed to us and our two partners, VRM I and Fund III. On February 4, 2015, the court entered its final decree closing the case.

We hold an interest of approximately 90%, VRM I holds an interest of approximately 8% and Fund III holds an interest of approximately 2% in 1701 Commerce.

In addition to the matters described above, we are involved in a number of other legal proceedings concerning matters arising in the ordinary course of our business activities. We believe we have meritorious defenses to each of these actions and intend to defend them vigorously. Other than the matters described above, we believe that we are not a party to any pending legal or arbitration proceedings that would have a material adverse effect on our financial condition or results of operations or cash flows, although it is possible that the outcome of any such proceedings could have a material impact on our operations in any particular period.

VOT Hawaii Management, Inc. (“VOT Hawaii”) is preparing to bring claims in arbitration against Vestin Mortgage, LLC as the successor in interest to Vestin Mortgage, Inc., and several other Vestin entities, specifically Vestin Capital, Inc., Vestin Fund I, LLC, Vestin Fund II, LLC, Vestin Group, Inc., Vestin Mortgage, Inc., Vestin Realty Mortgage I, Inc., Vestin Realty Mortgage II, Inc., and Vestin Originations, Inc. 

Rightstar Hawaii Management, Inc., (“Rightstar”), a company that operated a funeral and cemetery business in Hawaii, had defaulted on a loan from certain Vestin entities.  In connection with foreclosing on Rightstar’s assets, Vestin Capital, Inc., Vestin Fund I, LLC, Vestin Fund II, LLC, Vestin Group, Inc., Vestin Mortgage, Inc., Vestin Realty Mortgage I, Inc., Vestin Realty Mortgage II, Inc., and Vestin Originations, Inc. entered into an October 2008 Pre-Foreclosure Sale Management Services and Consulting Agreement (the “Agreement”) with Rightstar (being operated under the authority granted to court-appointed receiver Marie N. Milks) and VOT Hawaii, under which VOT Hawaii was employed as a death care industry consultant to professionally manage, and attempt to improve operations of Rightstar, pending foreclosure of Rightstar’s assets.

VOT Hawaii’s arbitration claims are for amounts allegedly owed to VOT Hawaii (either directly or by assignment) under the Agreement.  Its first claim is a breach of contract claim intended to recover a $500,000 “Base Success Fee” and a contingent success fee that VOT Hawaii calculated to total $30,797,200, allegedly owed to VOT Hawaii’s president, David Mickits.  VOT Hawaii’s second claim is for tortious interference with a contract, alleging that the Vestin entities caused Hawaii Funeral Services, LLC, as successor to Rightstar, to not pay VOT Hawaii 2 1/3 months of a $22,500 base consulting fee ($52,500), to have been paid by Rightstar under the Agreement. VOT Hawaii also seeks attorneys’ fees and pre- and post-judgment interest.

XML

Commitments And Contingencies

9 Months Ended

Sep. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments And Contingencies

NOTE Q — COMMITMENTS AND CONTINGENCIES

Amended Income Tax Returns

Earlier this year we learned that our federal income tax return for 2013 reported income that we never recognized nor received. The tax return, which was prepared by an outside tax accounting firm, reported income of approximately $11,137,000, which had the effect of erroneously reducing our reported net operating losses by approximately $11 million. Our aggregate net operating losses are approximately $228.2 million; therefore, the incorrect reported income of approximately $11,137,000 did not result in us paying any federal income taxes for 2013. We have filed amended tax returns for 2013 and 2014 to correct the error. The outside tax accounting firm involved with this filing has been terminated.

Our financial statements never included the non-existent income and no restatement of our financial statements is necessary.

Our audit committee is currently investigating this matter. In its investigation, the audit committee is reviewing, among other things, (i) the actions of our former outside tax accountants who prepared the tax return reporting non-existent income, (ii) what if any involvement or knowledge our officers or directors had with respect to the filing of the tax return in question and (iii) what if any internal control weaknesses may have contributed to the incorrect tax filing. While the audit committee’s investigation is on-going and no final conclusions have been reached, we believe that we may have been victimized by a scheme to improperly reduce the taxes of an unrelated third party. Although we did not receive any benefit from the reporting of non-existent income on our tax return, it is possible the Internal Revenue Service could investigate the matter and seek to impose penalties upon us. We believe we have meritorious defenses to any such claim.

XML

Subsequent Events

9 Months Ended

Sep. 30, 2016

Subsequent Events [Abstract]

Subsequent Events

NOTE R — SUBSEQUENT EVENTS

There have been no material subsequent events to evaluate through the date of this filing with the SEC.

XML

Summary Of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2016

Accounting Policies [Abstract]

Basis of Accounting

Basis of Accounting

The accompanying unaudited condensed consolidated financial statements of the Company are prepared by management on the accrual basis of accounting and in accordance with principles generally accepted in the United States of America (“GAAP”) for interim financial information as contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), and in conjunction with rules and regulations of the SEC. Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to SEC rules and regulations. Accordingly, the unaudited condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. The unaudited condensed consolidated financial statements include accounts and related adjustments, which are, in the opinion of management, of a normal recurring nature and necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the interim period.

Operating results for the three and nine months ended September 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

The condensed consolidated balance sheet as of December 31, 2015 contained herein has been derived from the audited consolidated financial statements as of December 31, 2015, but do not include all disclosures required by GAAP.

Management Estimates

Management Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Investments in Real Estate Loans

Investments in Real Estate Loans

We may, from time to time, acquire or sell investments in real estate loans from or to our manager or other related parties pursuant to the terms of our Management Agreement without a premium. The primary purpose is to either free up capital to provide liquidity for various reasons, such as loan diversification, or place excess capital in investments to maximize the use of our capital. Selling or buying loans allows us to diversify our loan portfolio within these parameters. Due to the short-term nature of the loans we make and the similarity of interest rates in loans we normally would invest in, the fair value of a loan typically approximates its carrying value. Accordingly, discounts or premiums typically do not apply upon sales of loans and therefore, generally no gain or loss is recorded on these transactions, regardless of whether to a related or unrelated party.

Investments in real estate loans are secured by deeds of trust or mortgages. Generally, our real estate loans require interest only payments with a balloon payment of the principal at maturity. We have both the intent and ability to hold real estate loans until maturity and therefore, real estate loans are classified and accounted for as held for investment and are carried at amortized cost. Loans sold to or purchased from affiliates are accounted for at the principal balance and no gain or loss is recognized by us or any affiliate. Loan-to-value ratios are initially based on appraisals obtained at the time of loan origination and are updated, when new appraisals are received or when management’s assessment of the value has changed, to reflect subsequent changes in value estimates. Such appraisals are generally dated within 12 months of the date of loan origination and may be commissioned by the borrower.

The Company considers a loan to be impaired when, based upon current information and events, it believes it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. The Company’s impaired loans include troubled debt restructuring, and performing and non-performing loans in which full payment of principal or interest is not expected. The Company calculates an allowance required for impaired loans based on the present value of expected future cash flows discounted at the loan’s effective interest rate, or at the loan’s observable market price or the fair value of its collateral.

Loans that have been modified from their original terms are evaluated to determine if the loan meets the definition of a Troubled Debt Restructuring (“TDR”) as defined by ASC 310-40. When the Company modifies the terms of an existing loan that is considered a TDR, it is considered performing as long as it is in compliance with the modified terms of the loan agreement. If the modification calls for deferred interest, it is recorded as interest income as cash is collected.

Allowance for Loan Losses

Allowance for Loan Losses

We maintain an allowance for loan losses on our investments in real estate loans for estimated credit impairment. Our manager’s estimate of losses is based on a number of factors including the types and dollar amounts of loans in the portfolio, adverse situations that may affect the borrower’s ability to repay, prevailing economic conditions and the underlying collateral securing the loan. Additions to the allowance are provided through a charge to earnings and are based on an assessment of certain factors, which may indicate estimated losses on the loans. Actual losses on loans are recorded first as a reduction to the allowance for loan losses. Generally, subsequent recoveries of amounts previously charged off are recognized as income.

Estimating allowances for loan losses requires significant judgment about the underlying collateral, including liquidation value, condition of the collateral, competency and cooperation of the related borrower and specific legal issues that affect loan collections or taking possession of the property. As a commercial real estate lender willing to invest in loans to borrowers who may not meet the credit standards of other financial institutional lenders, the default rate on our loans could be higher than those generally experienced in the real estate lending industry. We and our manager generally approve loans more quickly than other real estate lenders and, due to our expedited underwriting process; there is a risk that the credit inquiry we perform will not reveal all material facts pertaining to a borrower and the security.

Additional facts and circumstances may be discovered as we continue our efforts in the collection and foreclosure processes. This additional information often causes management to reassess its estimates. In recent years, we have revised estimates of our allowance for loan losses. Circumstances that have and may continue to cause significant changes in our estimated allowance include, but are not limited to:

· Declines in real estate market conditions, which can cause a decrease in expected market value;

· Discovery of undisclosed liens for community improvement bonds, easements and delinquent property taxes;

· Lack of progress on real estate developments after we advance funds. We customarily utilize disbursement agents to monitor the progress of real estate developments and approve loan advances. After further inspection of the related property, progress on construction occasionally does not substantiate an increase in value to support the related loan advances;

· Unanticipated legal or business issues that may arise subsequent to loan origination or upon the sale of foreclosed property; and

· Appraisals, which are only opinions of value at the time of the appraisal, may not accurately reflect the value of the property.

Discontinued Operations

Discontinued Operations

We have reclassified for all periods presented in the accompanying consolidated statements of operations, the amounts related to discontinued operations and real estate held for sale, in accordance with the applicable accounting criteria. In addition, the assets and liabilities related to the discontinued operations are reported separately in the accompanying consolidated balance sheets as real estate held for sale, assets held for sale, and liabilities related to assets held for sale.

Generally, operating results and cash flows from long-lived assets held for sale are to be classified as discontinued operations as a separately stated component of net income. Our operations related to REO are separately identified in the accompanying consolidated statements of operations.

Real Estate Owned Held for Sale

Real Estate Owned Held for Sale

Real estate owned held for sale (“REO”) includes real estate acquired through foreclosure and will be carried at the lower of the recorded amount, inclusive of any senior indebtedness, or the property's estimated fair value, less estimated costs to sell, with fair value based on appraisals and knowledge of local market conditions. While pursuing foreclosure actions, we seek to identify potential purchasers of such property. We generally seek to sell properties acquired through foreclosure as quickly as circumstances permit, taking into account current economic conditions. The carrying values of REO are assessed on a regular basis from updated appraisals, comparable sales values or purchase offers.

Management classifies real estate as REO when the following criteria are met:

· Management commits to a plan to sell the properties;

· The property is available for immediate sale in its present condition subject only to terms that are usual and customary;

· An active program to locate a buyer and other actions required to complete a sale have been initiated;

· The sale of the property is probable;

· The property is being actively marketed for sale at a reasonable price; and

· Withdrawal or significant modification of the sale is not likely.

Acquisitions

Acquisitions

The Company records the acquired tangible and intangible assets and assumed liabilities of acquisitions of all operating properties and those development and redevelopment opportunities that meet the accounting criteria to be accounted for as business combinations at fair value at the acquisition date. The Company assesses and considers fair value based on estimated cash flow projections that utilize available market information and discount and/or capitalization rates that the Company deems appropriate. Estimates of future cash flows are based on a number of factors including historical operating results, known and anticipated trends, and market and economic conditions. The acquired assets and assumed liabilities for an operating property acquisition generally include but are not limited to: land, buildings and improvements, construction in progress and identified tangible and intangible assets and liabilities associated with in-place leases, including tenant improvements, leasing costs, value of above-market and below-market operating leases and ground leases, acquired in-place lease values and tenant relationships, if any.

The fair value of land is derived from comparable sales of land within the same submarket and/or region. The fair value of buildings and improvements, tenant improvements, and leasing costs are based upon current market replacement costs and other relevant market rate information.

The fair value of the above-market or below-market component of an acquired in-place operating lease is based upon the present value (calculated using a market discount rate) of the difference between (i) the contractual rents to be paid pursuant to the lease over its remaining non-cancellable lease term and (ii) management's estimate of the rents that would be paid using fair market rental rates and rent escalations at the date of acquisition measured over the remaining non-cancellable term of the lease for above-market operating leases and the initial non-cancellable term plus the term of any below-market fixed rate renewal options, if applicable, for below-market operating leases. The amounts recorded for above-market operating leases are included in deferred leasing costs and acquisition-related intangibles, net on the balance sheet and are amortized on a straight-line basis as a reduction of rental income over the remaining term of the applicable leases.

The amounts recorded for below-market operating leases are included in deferred revenue and acquisition-related liabilities, net on the balance sheet and are amortized on a straight-line basis as an increase to rental income over the remaining term of the applicable leases plus the term of any below-market fixed rate renewal options, if applicable. Our below-market operating leases generally do not include fixed rate or below-market renewal options.

The fair value of acquired in-place leases is derived based on management's assessment of lost revenue and costs incurred for the period required to lease the “assumed vacant” property to the occupancy level when purchased. This fair value is based on a variety of considerations including, but not necessarily limited to: (1) the value associated with avoiding the cost of originating the acquired in-place leases; (2) the value associated with lost revenue related to tenant reimbursable operating costs estimated to be incurred during the assumed lease-up period; and (3) the value associated with lost rental revenue from existing leases during the assumed lease-up period. Factors considered by us in performing these analyses include an estimate of the carrying costs during the expected lease-up periods, current market conditions, and costs to execute similar leases. In estimating carrying costs, the Company includes real estate taxes, insurance and other operating expenses, and estimates of lost rental revenue during the expected lease-up periods based on current market demand at market rates. In estimating costs to execute similar leases, the Company considers leasing commissions, legal and other related expenses. The amount recorded for acquired in-place leases is included in deferred leasing costs and acquisition-related intangibles, net on the balance sheet and amortized as an increase to depreciation and amortization expense over the remaining term of the applicable leases. If a lease were to be terminated or if termination were determined to be likely prior to its contractual expiration (for example resulting from bankruptcy), amortization of the related unamortized in-place lease intangible would be accelerated.

The determination of the fair value of any debt assumed in connection with a property acquisition is estimated by discounting the future cash flows using interest rates available for the issuance of debt with similar terms and remaining maturities.

The determination of the fair value of the acquired tangible and intangible assets and assumed liabilities of operating property acquisitions requires us to make significant judgments and assumptions about the numerous inputs discussed above. The use of different assumptions in these fair value calculations could significantly affect the reported amounts of the allocation of our acquisition related assets and liabilities and the related amortization and depreciation expense recorded for such assets and liabilities. In addition, because the value of above and below market leases are amortized as either a reduction or increase to rental income, respectively, our judgments for these intangibles could have a significant impact on our reported rental revenues and results of operations.

Costs directly associated with all operating property acquisitions and those development and redevelopment acquisitions that meet the accounting criteria to be accounted for as business combinations are expensed as incurred. Our acquisition expenses are directly related to our acquisition activity and if our acquisition activity was to increase or decrease, so would our acquisition costs. Costs directly associated with development acquisitions accounted for as asset acquisitions are capitalized as part of the cost of the acquisition. During the nine months ended September 30, 2016, the Company did not capitalize any such acquisition costs.

Impairment of Long Lived Assets

Impairment of Long Lived Assets

When circumstances indicate the carrying value of a property may not be recoverable, the Company reviews the asset for impairment. This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition. These estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors. If impairment exists, due to the inability to recover the carrying value of a property, an impairment loss is recorded to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held and used. For properties held for sale, the impairment loss is the adjustment to fair value less estimated cost to dispose of the asset. These assessments have a direct impact on net income because recording an impairment loss results in an immediate negative adjustment to net income.

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash and cash equivalents include interest-bearing and non-interest bearing bank deposits, money market accounts, short-term certificates of deposit with original maturities of three months or less, and short-term instruments with a liquidation provision of one month or less.

Revenue Recognition

Revenue Recognition

The Company recognizes interest income from loans on an accrual basis over the expected terms of the loans using the effective interest method. The Company may recognize fees, discounts, premiums, anticipated exit fees and direct cost over the terms of the loans as an adjustment to the yield. The Company may recognize fees on commitments that expire unused at expiration. The Company may recognize interest income from available-for-sale securities on an accrual basis over the life of the investment on a yield-to-maturity basis. Interest is fully allowed for on impaired loans and is recognized on a cash basis method. The receipt of previous loan or note receivable allowances or impairments are recognized as revenue.

Advertising Costs

Advertising Costs

Advertising costs incurred in the normal course of operations are expensed as incurred. The Company had no advertising expense for the three and nine months ended September 30, 2016 and 2015.

Investments in Real Estate and Fixed Assets

Investments in Real Estate and Fixed Assets

Investments in real estate and fixed assets are stated at cost less accumulated depreciation. Depreciation is provided principally on the straight-line method over the estimated useful lives of the assets, which are primarily 3 to 40 years. The cost of repairs and maintenance is charged to expense as incurred. Expenditures for property betterments and renewals are capitalized. Upon sale or other disposition of a depreciable asset, cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in other income (expense).

The Company periodically evaluates whether events and circumstances have occurred that may warrant revision of the estimated useful lives of fixed assets or whether the remaining balance of fixed assets should be evaluated for possible impairment. The Company uses an estimate of the related undiscounted cash flows over the remaining life of the fixed assets in measuring their recoverability.

Investment in Marketable Securities

Investment in Marketable Securities

Investment in marketable securities consists of stock in VRM I and MVP REIT II, related parties. The securities are stated at fair value as determined by the closing market prices as of September 30, 2016 and December 31, 2015. All securities are classified as available-for-sale.

We are required to evaluate our available-for-sale investment for other-than-temporary impairment charges. We will determine when an investment is considered impaired (i.e., decline in fair value below its amortized cost), and evaluate whether the impairment is other than temporary (i.e., investment value will not be recovered over its remaining life). If the impairment is considered other than temporary, we will recognize an impairment loss equal to the difference between the investment’s cost and its fair value.

Basic and Diluted Earnings Per Common Share

Basic and Diluted Earnings Per Common Share

Basic earnings per share (“EPS”) is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding. Diluted EPS is similar to basic EPS except that the weighted average number of common shares outstanding is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been exercised. We had no outstanding common share equivalents during the periods ended September 30, 2016 and December 31, 2015.

Common Stock Dividends

Common Stock Dividends

During June 2008, our Board of Directors decided to suspend the payment of dividends. Our Board of Directors will closely monitor our operating results in order to determine when dividends should be reinstated; however, we do not expect our Board of Directors to reinstate dividends in the foreseeable future.

Treasury Stock

Treasury Stock

On March 21, 2007, our Board of Directors authorized the repurchase of up to $10 million worth of our common stock. On November 17, 2014, our Board of Directors authorized the repurchase of an additional $500,000 in common stock. Depending upon market conditions, shares may be repurchased from time to time at prevailing market prices through open market or privately negotiated transactions. We are not obligated to purchase any shares. Subject to applicable securities laws, including SEC rule 10b-18, repurchases may be made at such times and in such amounts, as our management deems appropriate. The share repurchase program may be discontinued or terminated at any time and we have not established a date for completion of the share repurchase program. The repurchases will be funded from our available cash.

We record our treasury stock using the cost method. Under the Maryland General Corporation Law, shares of its own stock acquired by a corporation constitute authorized but unissued shares.

Segments

Segments

We currently are authorized to operate three reportable segments, investments in real estate loans, investments in real property and investment in a real estate management company. During the nine months ended September 30, 2016, the Company operated in all segments.

Our objective is to invest approximately 97% of our assets in real estate loans and real estate related investments, while maintaining approximately 3% as a working capital cash reserve.

Principles of Consolidation

Principles of Consolidation

Our consolidated financial statements include the accounts of VRM II; Building A, LLC, Building C, LLC, Wolfpack Properties, LLC; Devonshire, LLC; SE Properties, LLC; ExecuSuites, LLC; MVP Advisors; and MVP Capital Partners II, LLC. All significant intercompany transactions and balances have been eliminated in consolidation.

Business Combinations

Business Combinations

In December 2007, the Financial Accounting Standards Board (FASB) revised the authoritative guidance for business combinations, establishing principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired (including goodwill), the liabilities assumed, and any non-controlling interest in the acquiree. Subsequently, on April 1, 2009, the FASB amended and clarified certain aspects of its authoritative guidance on initial recognition and measurement, subsequent measurement and accounting, and disclosure of assets and liabilities arising from contingencies in a business combination. We apply the FASB authoritative guidance to all business combinations for which the acquisition date is on or after January 1, 2009, and to certain future income tax effects related to our prior business combinations, should they arise.

Non-controlling Interests

Non-controlling Interests

The FASB issued authoritative guidance for non-controlling interests in December 2007, which establishes accounting and reporting standards for the non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary. The guidance clarifies that a non-controlling interest in a subsidiary, which is sometimes referred to as an unconsolidated investment, is an ownership interest in the consolidated entity that should be reported as a component of equity in the consolidated financial statements. Among other requirements, the guidance requires consolidated net income (loss) to be reported at amounts attributable to both the parent and the non-controlling interest. It also requires disclosure, on the face of the consolidated income statement, of the amounts of consolidated net income (loss) attributable to the parent and to the non-controlling interest.

Income Taxes

Income Taxes

The Company accounts for its income taxes under the assets and liabilities method, which requires recognition of deferred tax assets and liabilities for future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

The Company records net deferred tax assets to the extent the Company believes these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. A valuation allowance is established against deferred tax assets that do not meet the criteria for recognition. In the event the Company was to determine that it would be able to realize deferred income tax assets in the future in excess of their net recorded amount, they would make an adjustment to the valuation allowance which would reduce the provision for income taxes.

The Company follows the accounting guidance which provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized initially and in subsequent periods. Also, included is guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

Reclassifications

Reclassifications

In conjunction with the adoption of new accounting standards, certain debt or loan issuance costs for the three and nine months ended September 30, 2015 as well as certain amounts as of December 31, 2015, have been reclassified to conform to the current year’s presentation.

XML

Investments In Real Estate Loans (Tables)

9 Months Ended

Sep. 30, 2016

Real Estate [Abstract]

Investments In Real Estate Loans

Loan Type	Number of Loans			Balance *	Weighted Average Interest Rate	Portfolio Percentage	Current Weighted Average Loan-To-Value, Net of Allowance for Loan Losses
Commercial	8	$	3,676,000		12.75%	46.55%	59.72%
Construction	1		403,000		0.88%	5.10%	15.35%
Acquisition	1		3,818,000		9.35%	48.35%	133.61%
Total	10	$	7,897,000		10.69%	100.00%	46.97%

Loan Type	Number of Loans		Balance *	Weighted Average Interest Rate	Portfolio Percentage	Current Weighted Average Loan-To-Value, Net of Allowance for Loan Losses
Commercial	7	$	4,541,000	11.85%	98.48%	60.14%
Construction	1		70,000	0.12%	1.52%	0.44%
Total	8	$	4,611,000	11.79%	100.00%	58.61%

Schedule Of Priority Of Real Estate Loans

Loan Type	Number of Loans		September 30, 2016 Balance*	Portfolio Percentage	Number of Loans		December 31, 2015 Balance*		Portfolio Percentage
First deeds of trust	9	$	7,893,000	99.95%	8	$		4,611,000	100.00%
Second deeds of trust	1		4,000	0.05%	--			--	--
Total	10	$	7,897,000	100.00%	8	$		4,611,000	100.00%

Investments Classified by Contractual Maturity Date

Non-performing and past due loans	$	2,450,000
October 2016 –December 2016		--
January 2017 – March 2017		--
April 2017 – June 2017		--
July 2017 – September 2017		--
Thereafter		5,447,000
Total	$	7,897,000

Schedule By Geographic Location Of Investments In Real Estate Loans

		September 30, 2016 Balance *	Portfolio Percentage		December 31, 2015 Balance *	Portfolio Percentage
Nevada	$	3,765,000	47.68%	$	4,295,000	93.15%
California		3,818,000	48.35%		--	--
Ohio		308,000	3.90%		310,000	6.72%
Arizona		6,000	0.07%		6,000	0.13%
Total	$	7,897,000	100.00%	$	4,611,000	100.00%

Reconciliation Of Portfolio To Balance Sheet

		September 30, 2016		December 31, 2015
Balance per loan portfolio	$	7,897,000	$	4,611,000
Less:		--		--
Allowance for loan losses (a)		(2,450,000)		(2,450,000)
Balance per consolidated balance sheets	$	5,447,000	$	2,161,000

Non-Performing Loans

Loan Type	Number of Non-Performing Loans		Balance		Allowance for Loan Losses		Net Balance
Commercial	1	$	2,450,000	$	(2,450,000)	$	--
Total	1	$	2,450,000	$	(2,450,000)	$	--

Allowance For Loan Losses Related To Performing Loans And Non-Performing Loans

		September 30, 2016
		Balance		Allowance for loan losses **		Balance, net of allowance
Non-performing loans – no related allowance	$	--	$	--	$	--
Non-performing loans – related allowance		2,450,000		(2,450,000)		--
Subtotal non-performing loans		2,450,000		(2,450,000)		--
Performing loans – no related allowance		5,447,000		--		5,447,000
Performing loans – related allowance		--		--		--
Subtotal performing loans		5,447,000		--		5,447,000
Total	$	7,897,000	$	(2,450,000)	$	5,447,000

		As of December 31, 2015
		Balance		Allowance for loan losses **		Balance, net of allowance
Non-performing loans – no related allowance	$	--	$	--	$	--
Non-performing loans – related allowance		2,450,000		(2,450,000)		--
Subtotal non-performing loans		2,450,000		(2,450,000)		--
Performing loans – no related allowance		2,161,000		--		2,161,000
Performing loans – related allowance		--		--		--
Subtotal performing loans		2,161,000		--		2,161,000
Total	$	4,611,000	$	(2,450,000)	$	2,161,000

XML

Assets Held For Sale (Tables)

9 Months Ended

Sep. 30, 2016

Banking and Thrift [Abstract]

Summary Of Results Of Operations Related To Assets Held For Sale

		For The Three Months Ended September 30,				For The Nine Months Ended September 30,
		2016		2015		2016		2015
Revenue	$	--	$	1,200,000	$	943,000	$	3,633,000
Revenue eliminated through consolidation		(9,000)		(67,000)		(66,000)		(201,000)
Expenses		15,000		(794,000)		(1,495,000)		(2,430,000)
Net income (loss)	$	6,000	$	339,000	$	(618,000)	$	1,002,000

XML

Notes Payable (Tables)

9 Months Ended

Sep. 30, 2016

Payables and Accruals [Abstract]

Future Principal Payments On The Notes Payable

2016	$	84,000
2017		--
2018		--
2019		--
2020		--
Thereafter		--
Total	$	84,000

XML

Fair Value (Tables)

9 Months Ended

Sep. 30, 2016

Fair Value Disclosures [Abstract]

Valuation Of Financial Assets And Liabilities on Recurring Basis

		Fair Value Measurements at Reporting Date Using
		Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance at  09/30/16		Carrying Value on Balance Sheet at 09/30/16
Assets
Investment in marketable securities - related party	$	455,000	$	--	$	--	$	455,000	$	455,000
Investment in real estate loans	$	--	$	--	$	5,460,000	$	5,460,000	$	5,447,000

		Fair Value Measurements at Reporting Date Using
		Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance at 12/31/15		Carrying Value on Balance Sheet at 12/31/15
Assets
Investment in marketable securities - related party	$	262,000	$	--	$	--	$	262,000	$	262,000
Investment in real estate loans	$	--	$	--	$	2,148,000	$	2,148,000	$	2,161,000

Changes In Financial Assets And Liabilities on Recurring Basis Using Significant Unobservable Inputs

		Investment in real estate loans
Balance on January 1, 2016	$	2,148,000
Purchase and additions of assets
New mortgage loans and mortgage loans acquired		7,340,000
Purchase from third parties		--
Sales, pay downs and reduction of assets
Collections and settlements of principal and sales of investment in real estate loans		(47,000)
Sale of assets to third parties		(4,008,000)
Temporary change in estimated fair value based on future cash flows		27,000
Balance on September 30, 2016, net of temporary valuation adjustment	$	5,460,000

		Investment in real estate loans
Balance on January 1, 2015	$	5,167,000
Purchase and additions of assets
New mortgage loans and mortgage loans acquired		5,217,000
Purchase from third parties		200,000
Sales, pay downs and reduction of assets
Collections and settlements of principal and sales of investment in real estate loans		(5,971,000)
Sale of assets to third parties		(2,472,000)
Temporary change in estimated fair value based on future cash flows		7,000
Balance on December 31, 2015, net of temporary valuation adjustment	$	2,148,000

XML

Segment Information (Tables)

9 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

Schedule Of Investment In Real Estate Loans And Investments In Real Property

		For The Three Months Ended September 30,				For The Nine Months Ended September 30,
		2016		2015		2016		2015
Revenues
Investment in real estate loans	$	236,000	$	560,000	$	668,000	$	2,732,000
Investments in real property held for sale		735,000		29,000		1,982,000		1,331,000
Investment in real estate management		293,000		164,000		840,000		372,000
Total revenues		1,264,000		753,000		3,490,000		4,435,000
Operating expenses
Investment in real estate loans	$	274,000	$	274,000	$	823,000	$	822,000
Investment in real property		1,000		1,000		3,000		3,000
Investment in real estate management		675,000		884,000		1,847,000		2,598,000
Corporate activities		2,708,000		3,196,000		7,210,000		7,505,000
Total expenses		3,658,000		4,355,000		9,883,000		10,928,000

Total Assets		September 30, 2016		December 31, 2015
Investment in real estate loans	$	8,673,000	$	4,003,000
Investment in real property held for sale		--		44,545,000
Corporate assets		7,143,000		5,442,000
Total assets	$	15,816,000	$	53,990,000

XML

Investments In Real Estate Loans (Detail) - Investments in Real Estate Loans	9 Months Ended	12 Months Ended
	Sep. 30, 2016 USD ($)	Dec. 31, 2015 USD ($)
Balance	$ 7,897,000	$ 4,611,000
Weighted Average Interest Rate	10.69%	1179.00%
Portfolio Percentage	100.00%	100.00%
Current Weighted Average Loan-To-Value Net of Allowance for Loan Losses	100.00%
Commercial Loans [Member]
Number of Loans	8	7
Balance	$ 3,676,000	$ 4,541,000
Weighted Average Interest Rate	12.75%	11.85%
Portfolio Percentage	46.55%	98.48%
Current Weighted Average Loan-To-Value Net of Allowance for Loan Losses	59.72%	60.14%
Construction Loans [Member]
Number of Loans	1	1
Balance	$ 403,000	$ 70,000
Weighted Average Interest Rate	0.88%	0.12%
Portfolio Percentage	5.10%	1.52%
Current Weighted Average Loan-To-Value Net of Allowance for Loan Losses	15.35%	0.44%
Acquisition Loans [Member]
Number of Loans	1
Balance	$ 3,818,000
Weighted Average Interest Rate	9.35%
Portfolio Percentage	48.35%
Current Weighted Average Loan-To-Value Net of Allowance for Loan Losses	133.61%
Total [Member]
Number of Loans	10	8
Balance	$ 7,897,000	$ 4,611,000
Weighted Average Interest Rate	10.69%	11.79%
Portfolio Percentage	100.00%	100.00%
Current Weighted Average Loan-To-Value Net of Allowance for Loan Losses	46.97%	58.61%

XML

Investments In Real Estate Loans (Detail) - Schedule Of Priority Of Real Estate Loans	9 Months Ended	12 Months Ended
	Sep. 30, 2016 USD ($)	Dec. 31, 2015 USD ($)
Portfolio Percentage	100.00%	100.00%
First Deeds Of Trust [Member]
Number of Loans	9	8
Balance	$ 7,893,000	$ 4,611,000
Portfolio Percentage	99.95%	100.00%
Second Deeds Of Trust [Member]
Number of Loans	1
Balance	$ 4,000
Portfolio Percentage	0.05%
Total [Member]
Number of Loans	10	8
Balance	$ 7,897,000	$ 4,611,000
Portfolio Percentage	100.00%	100.00%

XML

Investments In Real Estate Loans (Detail) - Investments Classified by Contractual Maturity Date - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Balance	$ 7,897,000	$ 4,611,000
Non-performing and past due loans [Member]
Balance	2,450,000
October 2016 to December 2016 [Member]
Balance
January 2017 to March 2017 [Member]
Balance
April 2017 to June 2017 [Member]
Balance
July 2017 to September 2017 [Member]
Balance
Thereafter [Member]
Balance	5,447,000
Total [Member]
Balance	$ 7,897,000

XML

Investments In Real Estate Loans (Detail) - Geoographic Location of Investments in Real Estate Loans - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Balance	$ 7,897,000	$ 4,611,000
Portfolio Percentage	100.00%	100.00%
Nevada [Member]
Balance	$ 3,765,000	$ 4,295,000
Portfolio Percentage	47.68%	93.15%
California [Member]
Balance	$ 3,818,000
Portfolio Percentage	48.35%
Ohio [Member]
Balance	$ 308,000	$ 310,000
Portfolio Percentage	3.90%	6.72%
Arizona [Member]
Balance	$ 6,000	$ 6,000
Portfolio Percentage	0.07%	0.13%

XML

Investments In Real Estate Loans (Detail) - Reconciliation Of Portfolio To Balance Sheet - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Real Estate [Abstract]
Balance per loan portfolio	$ 7,897,000	$ 4,611,000
Less:
Allowance for loan losses	(2,450,000)	(2,450,000)
Balance per consolidated balance sheets	$ 5,447,000	$ 2,161,000

XML

Investments In Real Estate Loans (Detail) - Non-Performing Loans	9 Months Ended	12 Months Ended
	Sep. 30, 2016 USD ($)	Dec. 31, 2015 USD ($)
Allowance for Loan Losses	$ (2,450,000)	$ (2,450,000)
Commercial Loans [Member]
Number Of Non-Performing Loans	1
Balance	$ 2,450,000
Allowance for Loan Losses	$ (2,450,000)
Total [Member]
Number Of Non-Performing Loans	1
Balance	$ 2,450,000
Allowance for Loan Losses	(2,450,000)
Net Balance [Member]
Balance
Allowance for Loan Losses

XML

Investments In Real Estate Loans (Detail) - Allowance For Loan Losses Related To Performing Loans And Non-Performing Loans - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Balance	$ 7,897,000	$ 4,611,000
Allowance for loan losses	(2,450,000)	(2,450,000)
Balance, net of allowance	5,447,000	2,161,000
Non Performing Loans No Related Allowance [Member]
Balance
Allowance for loan losses
Balance, net of allowance
Non Performing Loans Related Allowance [Member]
Balance	2,450,000	2,450,000
Allowance for loan losses	(2,450,000)	(2,450,000)
Balance, net of allowance
Non Performing Loans [Member]
Balance	2,450,000	2,450,000
Allowance for loan losses	(2,450,000)	(2,450,000)
Balance, net of allowance
Performing Loans No Related Allowance [Member]
Balance	5,447,000	2,161,000
Allowance for loan losses
Balance, net of allowance	5,447,000	2,161,000
Performing Loans Related Allowance [Member]
Balance
Allowance for loan losses
Balance, net of allowance
Performing Loans [Member]
Balance	5,447,000	2,161,000
Allowance for loan losses
Balance, net of allowance	$ 5,447,000	$ 2,161,000

XML

Assets Held For Sale (Detail) - Summary Of Results Of Operations Related To Assets Held For Sale - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Property, Plant and Equipment [Abstract]
Revenue		$ 1,200,000	$ 943,000	$ 3,633,000
Revenue eliminated through consolidation	(9,000)	(67,000)	(66,000)	(201,000)
Expenses	15,000	(794,000)	(1,495,000)	(2,430,000)
Net income (loss)	$ 6,000	$ 339,000	$ (618,000)	$ 1,002,000

XML

Notes Payable (Detail) - Future Principal Payments On The Notes Payable - USD ($)	Sep. 30, 2016	Sep. 30, 2015
2016 [Member]
Principal Payments	$ 84,000
2017 [Member]
Principal Payments
2018 [Member]
Principal Payments
2019 [Member]
Principal Payments
2020 [Member]
Principal Payments
Thereafter [Member]
Principal Payments
Total [Member]
Principal Payments		$ 84,000

XML

Fair Value (Detail) - Valuation Of Financial Assets And Liabilities on Recurring Basis - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Assets
Investment in marketable securities - related party	$ 455,000	$ 262,000
Investment in real estate loans	5,460,000	2,148,000
Quoted Prices in Active Markets For Identical Assets (Level 1) [Member]
Assets
Investment in marketable securities - related party	455,000	262,000
Investment in real estate loans
Significant Other Observable Inputs (Level 2) [Member]
Assets
Investment in marketable securities - related party
Investment in real estate loans
Fair Value, Inputs, Level 3 [Member]
Assets
Investment in marketable securities - related party
Investment in real estate loans	5,460,000	2,148,000
Carrying Value on Balance Sheet [Member]
Assets
Investment in marketable securities - related party	455,000	262,000
Investment in real estate loans	$ 5,447,000	$ 2,161,000

XML

Fair Value (Detail) - Changes in our Financial Assets and Liabilities - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Balance, Beginning	$ 2,161,000
Sales, pay downs and reduction of assets
Balance, End, September 30, 2016, net of temporary valuation adjustment	5,447,000	$ 2,161,000
Real Estate Investment [Member]
Balance, Beginning	2,148,000	5,167,000
Purchase and additions of assets
New mortgage loans and mortgage loans acquired	7,340,000	5,217,000
Purchase from third parties		200,000
Sales, pay downs and reduction of assets
Collections of principal and sales of investment in real estate loans	(47,000)	(5,971,000)
Sale of assets to third parties	(4,008,000)	(2,472,000)
Temporary change in estimated fair value based on future cash flows	27,000	7,000
Balance, End, September 30, 2016, net of temporary valuation adjustment	$ 5,460,000	$ 2,148,000

XML

Segment Information (Detail) - Financial Data For The Company's Operating Segments - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Revenues	$ 1,264,000	$ 753,000	$ 3,490,000	$ 4,435,000
Total Assets	15,816,000		15,816,000		$ 53,990,000
Investment in real estate loans [Member]
Revenues	236,000	560,000	668,000	2,732,000
Operating expenses	274,000	274,000	823,000	822,000
Total Assets	8,673,000		8,673,000		4,003,000
Investments in real property held for sale [Member]
Revenues	735,000	29,000	1,982,000	1,331,000
Investment in real property [Member]
Operating expenses	1,000	1,000	3,000	3,000
Investment in real estate management [Member]
Revenues	293,000	164,000	840,000	372,000
Operating expenses	602,000	884,000	1,847,000	2,598,000
Corporate activities [Member]
Operating expenses	2,708,000	3,196,000	7,210,000	7,505,000
Total [Member]
Revenues	1,264,000	753,000	3,490,000	4,435,000
Operating expenses	3,658,000	$ 4,355,000	9,883,000	$ 10,928,000
Total Assets	15,816,000		15,816,000		53,990,000
Investment in real property held for sale [Member]
Total Assets					44,545,000
Corporate assets [Member]
Total Assets	$ 7,143,000		$ 7,143,000		$ 5,442,000

XML

Summary Of Significant Accounting Policies (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015	Nov. 17, 2014	Mar. 21, 2007
Capitalized Acquisition Costs
Advertising Expense
Outstanding Common Share Equivalents
Stock Repurchase Authorized						$ 500,000	$ 10,000,000
Real Estate Loans And Real Estate Investments [Member]
Concentration Risk Percentage			97.00%
Working Capital Cash Reserve [Member]
Concentration Risk Percentage			3.00%

XML

Financial Instruments And Concentrations Of Credit Risk (Details Narrative) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Cash In Excess Of The Federally Insured Limits	$ 3,400,000	$ 3,900,000
Balance	$ 7,897,000	$ 4,611,000
Mortgage Loans, Interest Rate	10.69%	1179.00%
Largest Borrower [Member]
Balance	$ 3,800,000
Mortgage Loans, Interest Rate	8.50%
Nevada [Member]
Balance	$ 3,765,000	$ 4,295,000
California [Member]
Balance	$ 3,818,000
Lender Risk [Member]
Concentration of Risk, Loans	100.00%
Lender Risk [Member] | Largest Borrower [Member]
Concentration of Risk, Loans	48.00%	53.00%
Geographic Concentration Risk [Member] | Nevada [Member]
Concentration of Risk, Loans	48.00%	93.00%
Geographic Concentration Risk [Member] | California [Member]
Concentration of Risk, Loans	48.00%
Common Guarantor [Member] | Two Loan [Member]
Concentration of Risk, Loans		38.00%
Balance		$ 1,700,000
Common Guarantor [Member] | Three Loan (Set 1) [Member]
Concentration of Risk, Loans	3.90%	7.00%
Balance	$ 300,000	$ 300,000
Common Guarantor [Member] | Three Loan (Set 2) [Member]
Concentration of Risk, Loans	11.60%
Balance	$ 900,000

XML

Investments In Real Estate Loans (Details Narrative) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Three Loans - Variable Interest Rate	6.80%	6.80%
Three Loans - Balance	$ 300,000	$ 300,000
Real Estate Loans, Weighted Average Interest Rate, performing loans	10.69%	1179.00%
Real estate loans	$ 5,447,000	$ 2,161,000
Investment in real estate loans, allowance	$ 2,450,000	2,450,000
Ratio Of Total Allowance For Loan Losses To Total Loans With An Allowance For Loan Loss	100.00%
Real Estate Loans, extensions, our portion	$ 2,500,000	2,500,000
Specific Reserve Allowance [Member]
Investment in real estate loans, allowance	2,450,000	2,450,000
Non-Performing Loans [Member]
Real estate loans	0	0
Investment in real estate loans, allowance	$ 2,500,000	$ 2,500,000

XML

Investment In Delaware Statutory Trust (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Investment	$ 3,063,000		$ 3,063,000		$ 1,800,000
Interest Income	236,000	$ 47,000	655,000	$ 570,000
Delaware Statutory Trust [Member]
Investment	3,100,000		3,100,000
Interest Income	$ 100,000		$ 400,000

XML

Assets Held For Sale (Details Narrative)	9 Months Ended
	Sep. 30, 2016 USD ($)
8930 Building [Member]
Sale Price, less current debt	$ 12,100,000
Net Gain, our share	2,900,000
8905 Building [Member]
Sale Price, less current debt	5,600,000
Net Gain, our share	2,300,000
8945 Building [Member]
Sale Price, less current debt	5,000,000
Net Gain, our share	1,400,000
8860 Building [Member]
Sale Price, less current debt	5,500,000
8925 Building [Member]
Sale Price, less current debt	5,400,000
8860 Building and 8925 Building [Member]
Net Gain, our share	5,500,000
8880 Building [Member]
Sale Price, less current debt	12,300,000
Net Gain, our share	$ 5,900,000
All Buildings Sold [Member]
Repurchase Terms	We and VRM I, through its subsidiaries, have the right, for a period of one year from the Closing Dateclosing dates of the building sales, to repurchase one or more of the buildings at a price equal to (i) the sales price for each building, plus (ii) $65,000 for the 8930 Building, $65,000 for the 8880 building, $30,000 for the 8905 Building, $30,000 for the 8860 Building, $30,000 for the 8925 Building and $30,000 for the 8945 Building, plus (iii) twelve percent less any profit realized by the purchaser of the building being repurchased.

XML

Investment In Marketable Securities - Related Party (Details Narrative) - VRM I [Member]	9 Months Ended
	Sep. 30, 2016 $ / shares shares
Shares in Related Party | shares	134,545
Percentage of Shares Owned in Affiliate	10.80%
Related Party, Share Price	$ 3.49
Minimum [Member]
Related Party, Share Price	3.33
Maximum [Member]
Related Party, Share Price	$ 4.00

XML

Investment In MVP REIT II (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended		9 Months Ended
	Dec. 31, 2015	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Dividend Income				$ 2,000
MVP REIT II [Member]
Ownership, percentage		60.00%		60.00%
Shares in Related Party		5,000		5,000
Purchase of marketable securities - related party	$ 125,000
Dividend Income				$ 2,000

XML

Related Party Transactions (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Management Fees Paid	$ 274,000	$ 274,000	$ 823,000	$ 822,000
Acquisition Fees
Manager [Member]
Fee As A Percentage of Sale of Membership Units	0.25%	0.25%	0.25%	0.25%
Management Fees Paid	$ 274,000	$ 274,000	$ 823,000	$ 822,000
Our Shares Owned By Related Party	23,175		23,175		23,175
Percentage of Our Shares Owned	1.00%		1.00%		1.00%
Manager [Member] | Delaware Statutory Trust [Member]
Management Fees Paid			$ 200,000
VRM I [Member]
Our Shares Owned By Related Party	134,270		134,270		134,270
Percentage of Our Shares Owned	5.60%		5.60%		5.60%
Related Party, Share Price	$ 3.49		$ 3.49
Percentage of Shares Owned in Affiliate			10.80%
Dividend Income
VRM I [Member] | Minimum [Member]
Related Party, Share Price	3.33		$ 3.33
VRM I [Member] | Maximum [Member]
Related Party, Share Price	$ 4.00		$ 4.00
Vestin Mortgage [Member]
Disposition Fee	$ 200,000		$ 800,000
MVP Advisors [Member]
Percentage of Shares Owned in Affiliate			60.00%		60.00%
Payables, related party	4,500,000		$ 4,500,000		$ 4,500,000
Asset Management Fees	300,000	100,000	800,000	300,000
Debt Financing Fees	32,000	18,000	81,000	48,000
Acquisition Fees	24,000	$ 29,000	900,000	$ 1,300,000
Loans Receivable Related Party	$ 12,900,000		$ 12,900,000
MVP CP II [Member]
Our Shares Owned By Related Party	8,000		8,000
Payables, related party	$ 3,200,000		$ 3,200,000		$ 700,000
Loans Receivable Related Party	200,000		200,000
Loans Receivable Related Party Impaired	$ 200,000		$ 200,000

XML

Notes Payable (Details Narrative)	1 Months Ended
	Apr. 30, 2016 USD ($)	Apr. 30, 2015 USD ($)	Aug. 31, 2014 USD ($)	Jul. 31, 2014 USD ($)	May 16, 2014 USD ($)	Apr. 30, 2014 USD ($)	Sep. 30, 2016 USD ($)
Acquisition Of SE Properties [Member]
Loan Balance						$ 3,400,000
Loan Collateral						collateralized by real property located in Las Vegas, Nevada
Loan Interest Rate						6.625%
Loan Payment Frequency						Monthly
Loan Payments						$ 25,000
Maturity Date						Jan. 31, 2036
Loan Resolved Terms						During January 2016 this loan was paid in fullassigned to the buyer and the Company was released from the debt through the sale of the property.
Acquisition Of Execusuites [Member]
Loan Balance						$ 3,100,000
Loan Collateral						by real property located in Las Vegas, Nevada
Loan Interest Rate						5.875%
Loan Payment Frequency						Monthly
Loan Payments						$ 21,000
Maturity Date						May 31, 2037
Loan Resolved Terms						During January 2016 this loan was paid in fullassigned to the buyer and the Company was released from the debt through the sale of the property.
Acquisition Of Building C [Member]
Loan Balance				$ 8,400,000
Loan Collateral				by real property located in Las Vegas, Nevada
Loan Interest Rate				4.81%
Loan Payments				$ 49,000
Maturity Date				Apr. 30, 2021
Payment at Maturity				$ 7,000,000
Loan Resolved Terms				During January 2016 this loan was paid in fullassigned to the buyer and the Company was released from the debt through the sale of the property.
Wolfpack, LLC and Devonshire, LLC Loan Agreement [Member]
Loan Balance					$ 7,800,000
Loan Collateral					collateralized by real property held in Las Vegas, Nevada
Loan Interest Rate					4.60%
Loan Payment Frequency					Monthly
Loan Payments					$ 50,000
Maturity Date					Jun. 30, 2024
Payment at Maturity					$ 6,300,000
Loan Resolved Terms					During April 2016 this loan was assigned to the buyer and the Company was released from the debt through the sale of the property.
Acquisition Of Building A [Member]
Loan Balance			$ 8,400,000
Loan Collateral			collateralized by real property located in Las Vegas, Nevada
Loan Interest Rate			4.969%
Loan Payments			$ 46,000
Maturity Date			Apr. 30, 2019
Payment at Maturity			$ 7,800,000
Loan Resolved Terms			During May 2016 this loan was assigned to the buyer and the Company was released from the debt through the sale of the property.
12-Month Insurance Policy [Member]
Loan Down Payment	$ 37,000	$ 39,000
Loan Balance							$ 100,000
Loan Interest Rate	3.80%					2.90%
Loan Payment Frequency		Monthly
Loan, Number of Payments	9	9
Loan Payments	$ 21,000	$ 25,000
Loan Resolved Terms		During December 2015, the outstanding balance of the note was paid in full.

XML

Employee Benefit Plan (Details Narrative) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2016
Compensation and Retirement Disclosure [Abstract]
Contribution Plan Description	The Company provides for an employer matching contribution equal to 100% of the first 3% of eligible compensation and 50% of the next 2% of eligible compensation contributed by each employee, which is funded in cash.	The Company provides for an employer matching contribution equal to 100% of the first 3% of eligible compensation and 50% of the next 2% of eligible compensation contributed by each employee, which is funded in cash.
Matching 401(k) Contribution Expense	$ 12,000	$ 39,000

XML

Legal Matters Involving The Company (Details Narrative)	9 Months Ended
	Sep. 30, 2016 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Net Of Allowance For Loan Loss	$ 9,900,000
Net Of Allowance For Loan Loss, Our Portion	$ 9,000,000

XML

Commitments and Contingencies (Details Narrative)	12 Months Ended
	Dec. 31, 2013 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Federal Income Tax 2013 Income Reported in Error	$ 11,137,000
Aggregate Net Operating Losses	$ 228,200,000