10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

(Mark one)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2018

☐ TRANSITION REPORT PURSUANT

TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period fromto

Commission file number: 000-55601

REDWOOD MORTGAGE INVESTORS IX, LLC

(Exact name of registrant as specified in its charter)

Delaware	26-3541068
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

177 Bovet Road, Suite 520, San Mateo, CA	94402
(Address of principal executive offices)	(Zip Code)

(650) 365-5341

(Registrant’s telephone number, including area code)

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    ☐  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 (§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    ☐  NO

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth 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	☒
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    ☐  YES    ☒  NO

Part I – FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

REDWOOD MORTGAGE INVESTORS IX, LLC

Balance Sheets

March 31, 2018 (unaudited) and December 31, 2017 (audited)

	2018			2017
ASSETS
Cash and cash equivalents	$	9,540,950		$	8,509,852
Loans
Principal		57,865,391			54,768,689
Advances		16,637			13,989
Accrued interest		426,538			409,867
Loan balances secured by deeds of trust		58,308,566			55,192,545
Loan administrative fees, net		5,878			9,008
Total loans		58,314,444			55,201,553
Total assets	$	67,855,394		$	63,711,405
LIABILITIES, INVESTORS IN APPLICANT STATUS, AND MEMBERS’ CAPITAL
Liabilities
Accounts payable and accrued liabilities	$	36,139		$	180
Investors in applicant status		4,415,358			3,270,312
Members’ capital, net		67,537,728			64,218,001
Receivable from manager (formation loan)		(4,133,831	)		(3,777,088	)
Members’ capital, net, less formation loan		63,403,897			60,440,913
Total liabilities, investors in applicant status and members’ capital	$	67,855,394		$	63,711,405

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

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REDWOOD MORTGAGE INVESTORS IX, LLC

Statements of Income

For the Three Months Ended March 31, 2018 and 2017 (unaudited)

	2018		2017
Revenues, net
Interest income	$	1,177,732	$	835,980
Late fees		4,711		6,189
Total revenues		1,182,443		842,169
Provision for loan losses		—		—
Operations Expense
Mortgage servicing fees		35,184		24,310
Asset management fees, net (Note 3)		—		—
Costs from Redwood Mortgage Corp., net (Note 3)		—		—
Professional services, net (Note 3)		4,685		—
Other		85		1,039
Total operations expense		39,954		25,349
Net income	$	1,142,489	$	816,820
Members (99%)		1,131,064		808,652
Managers (1%)		11,425		8,168
	$	1,142,489	$	816,820

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

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REDWOOD MORTGAGE INVESTORS IX, LLC

Statement of Changes in Members’ Capital

For the Three Months Ended March 31, 2018 (unaudited)

				Members' Capital, net
	Investors In Applicant Status			Members’ Capital			Manager’s Capital		Unallocated Organization and Offering Expenses			Members’ Capital, net
Balance at December 31, 2017	$	3,270,312		$	66,450,424		$	102,902	$	(2,335,325	)	$	64,218,001
Contributions on application		4,313,438			—			—		—			—
Contributions admitted to members' capital		(3,193,207	)		3,193,207			3,200		—			3,196,407
Premiums paid on application by RMC		31,920			—			—		—			—
Premiums admitted to members' capital		(7,105	)		7,105			—		—			7,105
Net income		—			1,131,064			11,425		—			1,142,489
Earnings distributed to members		—			(1,090,347	)		—		—			(1,090,347	)
Earnings distributed used in DRIP		—			598,278			—		—			598,278
Members’ redemptions		—			(403,400	)		—		—			(403,400	)
Organization and offering expenses		—			—			—		(143,694	)		(143,694	)
Organization and offering expenses allocated		—			(70,208	)		—		70,208			—
Manager reimbursement		—			—			—		12,193			12,193
Early withdrawal penalties		—			—			—		696			696
Balance at March 31, 2018	$	4,415,358		$	69,816,123		$	117,527	$	(2,395,922	)	$	67,537,728

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

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REDWOOD MORTGAGE INVESTORS IX, LLC

Statements of Cash Flows

For the Three Months Ended March 31, 2018 and 2017 (unaudited)

	2018			2017
Operations
Interest received	$	1,161,061		$	837,318
Other loan income		4,711			6,189
Loan administrative fee reimbursed (paid)		3,130			9,464
Operations expense		(2,453	)		(24,476	)
Total cash provided by (used in) operations		1,166,449			828,495
Investing – loan principal/advances
Principal collected on loans		12,739,617			5,236,520
Loans originated		(9,946,500	)		(8,607,733	)
Loans acquired from affiliates		(5,889,819	)		—
Advances (made) received on loans		(2,648	)		(9,141	)
Total cash provided by (used in) investing		(3,099,350	)		(3,380,354	)
Financing – members’ capital
Contributions by members, net
Contributions by members		4,348,762			4,542,913
Organization and offering expenses paid, net		(131,500	)		(166,756	)
Formation loan funding		(357,794	)		(315,951	)
Total cash provided by members, net		3,859,468			4,060,206
Distributions to members
Earnings distributed		(492,069	)		(334,640	)
Redemptions		(403,400	)		(400,310	)
Cash distributions to members		(895,469	)		(734,950	)
Total cash provided by (used in) financing		2,963,999			3,325,256
Net increase (decrease) in cash		1,031,098			773,397
Cash, beginning of period		8,509,852			2,194,854
Cash, end of period	$	9,540,950		$	2,968,251

Reconciliation of net income to net cash provided by (used in) operating activities

	2018			2017
Net income	$	1,142,489		$	816,820
Adjustments to reconcile net income to net cash provided by    (used in) operating activities
Change in operating assets and liabilities
Accrued interest		(16,672	)		1,338
Loan administrative fees reimbursed (paid)		3,130			9,464
Accounts payable		35,754			—
Other		1,748			873
Total adjustments		23,960			11,675
Net cash provided by (used in) operating activities	$	1,166,449		$	828,495

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

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REDWOOD MORTGAGE INVESTORS IX, LLC

Notes to Financial Statements

March 31, 2018 (unaudited)

NOTE 1 – ORGANIZATION AND GENERAL

In the opinion of the manager, the accompanying unaudited financial statements contain all adjustments, consisting of normal, recurring adjustments, necessary to present fairly the financial information included therein. These financial statements should be read in conjunction with the audited financial statements included in the company’s Form 10-K for the fiscal year December 31, 2017 filed with the U.S. Securities and Exchange Commission (SEC). The results of operations for the three month period ended March 31, 2018 are not necessarily indicative of the operations results to be expected for the full year.

Redwood Mortgage Investors IX, LLC (RMI IX or the company) is a Delaware limited liability company formed in October 2008 to engage in business as a mortgage lender and investor by making and holding-for-investment mortgage loans secured by California real estate, primarily through first and second deeds of trust.

The company’s primary investment objectives are to:

• yield a favorable rate of return from the company’s business of making and/or investing in loans;

• preserve and protect the company’s capital by making and/or investing in loans secured by California real estate, preferably income-producing properties geographically situated in the San Francisco Bay Area and the coastal metropolitan regions of Southern California; and,

• generate and distribute cash flow from these mortgage lending and investing activities.

The ongoing sources of funds for loans are the proceeds (net of redemption of members’ capital) from:

• sale of members’ units (net of reimbursement to RMC of organization and offering expenses), including units sold by reinvestment of distributions;

• loan payoffs;

• borrowers’ monthly principal and interest payments; and,

• to a lesser degree and, if obtained, a line of credit.

Profits and losses are allocated among the members according to their respective capital accounts monthly after one percent (1%) of the profits and losses are allocated to the manager. The monthly results are subject to subsequent adjustment as a result of quarterly and year-end accounting and reporting. Investors should not expect the company to provide tax benefits of the type commonly associated with limited liability company tax shelter investments. Federal and state income taxes are the obligation of the members, if and when taxes apply, other than the annual California franchise tax and any California LLC cash receipts taxes paid by the company.

The company is externally managed by Redwood Mortgage Corp. (RMC or the manager). The manager is solely responsible for managing the business and affairs of the company, subject to the voting rights of the members on specified matters. The manager acting alone has the power and authority to act for and bind the company. RMC provides the personnel and services necessary for us to conduct our business as we have no employees of our own. The mortgage loans the company funds and/or invests in are arranged and generally are serviced by RMC. The manager is required to contribute to capital one tenth of one percent (0.1%) of the aggregate capital accounts of the members.

The rights, duties and powers of the members and manager of the company are governed by the company’s operating agreement, the Delaware Limited Liability Company Act and the California Revised Uniform Limited Liability Company Act. Members should refer to the company’s operating agreement for complete disclosure of its provisions. Members representing a majority of the outstanding units may, without the concurrence of the managers, vote to: (i) dissolve the company, (ii) amend the operating agreement, subject to certain limitations, (iii) approve or disapprove the sale of all or substantially all of the assets of the company or (iv) remove or replace one or all of the managers. Where there is only one manager, a majority in interest of the members is required to elect a new manager to continue the company business after a manager ceases to be a manager due to its withdrawal.

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REDWOOD MORTGAGE INVESTORS IX, LLC

Notes to Financial Statements

March 31, 2018 (unaudited)

Distribution policy

Cash available for distribution at the end of each calendar month is allocated ninety-nine percent (99%) to the members and one percent (1%) to the manager. Cash available for distribution means cash flow from operations (excluding repayments for loan principal and other capital transaction proceeds) less amounts set aside for creation or restoration of reserves. The manager may withhold from cash available for distribution otherwise distributable to the members with respect to any period the respective amounts of organization and offering expenses allocated to the members for the applicable period pursuant to the company’s reimbursement and allocation of organization and offering expenses policy. Per the terms of the company’s operating agreement, cash available for distribution allocated to the members is allocated among the members in proportion to their percentage interests (except with respect to differences in the amounts of organization and offering expenses allocated to the respective members during the applicable period) and in proportion to the number of days during the applicable month that they owned such percentage interests.

Cash available for distributions allocable to members, other than those participating in the distribution reinvestment plan (DRIP) and the manager, is distributed at the end of each calendar month. Cash available for distribution allocable to members who participate in the DRIP is used to purchase additional units at the end of each calendar month. The manager’s allocable share of cash available for distribution is also distributed not more frequently than with cash distributions to members.

To determine the amount of cash to be distributed in any specific month, the company relies in part on its annual forecast of profits, which takes into account the difference between the forecasted and actual results in the year and the requirement to maintain a cash reserve. For the three months ended March 31, 2018, earnings (estimated) allocated to member accounts was $1,160,555 and net income available to members (actual) was $1,131,064. The difference between earnings allocated and net income available to members of $29,491 is anticipated to be offset in the remaining quarters of 2018.

Distribution reinvestment plan

The DRIP provision of the operating agreement permits members to elect to have all or a portion of their monthly distributions reinvested in additional units. Members may withdraw from the DRIP with written notice.

Liquidity and unit redemption program

Because there are substantial restrictions on transferability of units, there is no established public trading and/or secondary market for the units and none is expected to develop. In order to provide liquidity to members, the company’s operating agreement includes a unit redemption program, whereby beginning one year from the date of purchase of the units, a member may redeem all or part of their units, subject to certain limitations.

The price paid for redeemed units is based on the lesser of the purchase price paid by the redeeming member or the member’s capital account balance as of the date of each redemption payment. Redemption value is calculated based on the period from date of purchase as follows:

• after one year, 92% of the purchase price or of the capital account balance, whichever is less;

• after two years, 94% of the purchase price or of the capital account balance, whichever is less;

• after three years, 96% of the purchase price or of the capital account balance, whichever is less;

• after four years, 98% of the purchase price or of the capital account balance, whichever is less;

• after five years, 100% of the purchase price or of the capital account balance, whichever is less.

The company redeems units quarterly, subject to certain limitations as provided for in the operating agreement. The number of units that may be redeemed per quarter per individual member is subject to a maximum of the greater of 100,000 units or 25% of the member’s units outstanding. For redemption requests requiring more than one quarter to fully redeem, the percentage discount amount that, if any, applies when the redemption payments begin continues to apply throughout the redemption period and applies to all units covered by such redemption request regardless of when the final redemption payment is made.

The company has not established a cash reserve from which to fund redemptions. The company’s capacity to redeem units upon request is limited by the availability of cash and the company’s cash flow. The company will not, in any calendar year, redeem more

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REDWOOD MORTGAGE INVESTORS IX, LLC

Notes to Financial Statements

March 31, 2018 (unaudited)

than five percent (5%) of the weighted average number of units outstanding during the twelve-month period immediately prior to the date of the redemption.

Contributed capital

The manager is required to contribute to capital one tenth of one percent (0.1%) of the aggregate capital accounts of the members.

Manager’s interest

If a manager is removed, withdrawn or terminated, the company will pay to the manager all amounts then accrued and owing to the manager. Additionally, the company will terminate the manager’s interest in the company’s profits, losses, distributions and capital by payment of an amount in cash equal to the then-present fair value of such interest. The formation loan is forgiven if the manager is removed and RMC is no longer receiving payments for services rendered.

Unit sales commissions paid to broker-dealers/formation loan

Commissions for unit sales to be paid to broker-dealers (B/D sales commissions) are paid by RMC and are not paid directly by the company out of offering proceeds. Instead, the company advances to RMC, from offering proceeds, amounts sufficient to pay the B/D sales commissions and premiums to be paid to investors. Such advances in total may not exceed seven percent (7%) of offering proceeds. The receivable arising from the advances is unsecured, and non-interest bearing and is referred to as the “formation loan.” As of March 31, 2018 the company had made such advances of $5,017,741, of which $4,133,831 remains outstanding on the formation loan.

Term of the company

The term of the company will continue until 2028, unless sooner terminated as provided in the operating agreement.

Ongoing public offering of units/ SEC Registrations

Gross proceeds from sales of units from inception (October, 2009) through March 31, 2018 are summarized below.

	Proceeds
From investors - admitted	$	67,106,564
From members under our DRIP		6,830,872
From premiums paid by RMC(1)		296,209
Total proceeds from unit sales	$	74,233,645

(1) If a member acquired units through an unsolicited sale (i.e. without broker/dealer) the member’s capital account is credited with their capital contribution plus a premium paid by RMC equal to the amount of the sales commissions that otherwise would have been paid to a broker-dealer by RMC. This premium is reported in the year paid as taxable income to the member.

As of March 31, 2018, we had sold approximately 74,234,000 units– 39,407,000 units under our previous registration statements and approximately 34,827,000 units under our current registration statement which was effective on June 6, 2016. Correspondingly, gross proceeds from unit sales at $1 per unit (including units issued under our distribution reinvestment plan) were approximately $39,407,000 and $34,827,000, respectively.

Use of Proceeds from sale of units

We will use the proceeds from the sale of the units to:

• make additional loans;

• fund working capital reserves;

• pay RMC up to 4.5% of  proceeds from sale of units for organization and offering expenses; and,

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REDWOOD MORTGAGE INVESTORS IX, LLC

Notes to Financial Statements

March 31, 2018 (unaudited)

• fund a formation loan to RMC at up to 7% of proceeds from sale of units.  

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).

Management estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions about the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities, at the dates of the financial statements and the reported amounts of revenues and expenses during the reported periods. Such estimates relate principally to the determination of the allowance for loan losses, including, when applicable, the valuation of impaired loans (which itself requires determining the fair value of the collateral), and the valuation of real estate held for sale and held as investment, at acquisition and subsequently. Actual results could differ significantly from these estimates.

Fair value estimates

GAAP defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets and liabilities; it is not a forced transaction. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact and (iv) willing to transact.

Fair values of assets and liabilities are determined based on the fair-value hierarchy established in GAAP. The hierarchy is comprised of three levels of inputs to be used:

• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the company has the ability to access at the measurement date. An active market is a market in which transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

• Level 2 inputs are inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly in active markets and quoted prices for identical assets or liabilities that are not active, and inputs other than quoted prices that are observable or inputs derived from or corroborated by market data.

• Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs reflect the company’s own assumptions about the assumptions market participants would use in pricing the asset or liability (including assumptions about risk). Unobservable inputs are developed based on the best information available in the circumstances and may include the company’s own data.

The fair value of the collateral is determined by exercise of judgment based on management’s experience informed by appraisals (by licensed appraisers), brokers’ opinion of values and publicly available information on in-market transactions. Appraisals of commercial real property generally present three approaches to estimating value: 1) market comparables or sales approach; 2) cost to replace and 3) capitalized cash flows or investment approach. These approaches may or may not result in a common, single value. The market-comparables approach may yield several different values depending on certain basic assumptions, such as, determining highest and best use (which may or may not be the current use); determining the condition (e.g. as-is, when-completed or for land when-entitled); and determining the unit of value (e.g. as a series of individual unit sales or as a bulk disposition).

Management has the requisite familiarity with the real estate markets it lends in generally and of the properties lent on specifically to analyze sales-comparables and assess their suitability/applicability. Management is acquainted with market participants – investors, developers, brokers, lenders – that are useful, relevant secondary sources of data and information regarding valuation and valuation variability. These secondary sources may have familiarity with and perspectives on pending transactions, successful strategies to optimize value and the history and details of specific properties – on and off the market – that enhance the process and analysis that is particularly and principally germane to establishing value in distressed markets and/or property types.

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REDWOOD MORTGAGE INVESTORS IX, LLC

Notes to Financial Statements

March 31, 2018 (unaudited)

Cash and cash equivalents

The company considers all highly liquid financial instruments with maturities of three months or less at the time of purchase to be cash equivalents. Periodically, company cash balances in banks exceed federally insured limits.

Loans and interest income

Loans generally are stated at the unpaid principal balance (principal). Management has discretion to pay amounts (advances) to third parties on behalf of borrowers to protect the company’s interest in the loan. Advances include, but are not limited to, the payment of interest and principal on a senior lien to prevent foreclosure by the senior lien holder, property taxes, insurance premiums and attorney fees. Advances generally are stated at the amounts paid out on the borrower’s behalf and any accrued interest on amounts paid out, until repaid by the borrower.

The company may fund a specific loan origination net of an interest reserve (one to two years) to insure timely interest payments at the inception of the loan. As monthly interest payments become due, the company funds the payments into the affiliated trust account. In the event of an early loan payoff, any unapplied interest reserves would be first applied to any accrued but unpaid interest and then as a reduction to the principal.

If events and or changes in circumstances cause management to have serious doubts about the collectability of the payments of interest and principal in accordance with the loan agreement, a loan may be designated as impaired. Impaired loans are included in management’s periodic analysis of recoverability. Any subsequent payments on impaired loans are applied to late fees, then to the accrued interest, then to advances, and lastly to principal.

From time to time, the company negotiates and enters into loan modifications with borrowers whose loans are delinquent. If the loan modification results in a significant reduction in the cash flow compared to the original note, the modification is deemed a troubled debt restructuring and a loss is recognized. In the normal course of the company’s operations, loans that mature may be renewed at then current market rates and terms for new loans. Such renewals are not designated as impaired, unless the renewed loan was previously designated as impaired.

Interest is accrued daily based on the principal of the loans. Impaired loans continue to recognize interest income as long as the loan is in the process of collection and is considered to be well-secured. Impaired loans are placed on non-accrual status if 180 days delinquent or at the earlier of management’s determination that the primary source of repayment will come from the foreclosure and subsequent sale of the collateral securing the loan (which usually occurs when a notice of sale is filed) or when the loan is no longer considered well-secured. When a loan is placed on non-accrual status, the accrual of interest is discontinued; however, previously recorded interest is not reversed. A loan may return to accrual status when all delinquent interest and principal payments become current in accordance with the terms of the loan agreement

Loan administrative fees paid to RMC for loans funded or invested in by the company are capitalized and amortized over the life of the loan on a straight-line method which approximates the effective interest method.

Allowance for loan losses

Loans and the related accrued interest and advances (i.e. the loan balance) are analyzed on a periodic basis for ultimate recoverability. Delinquencies are identified and followed as part of the loan system of record. Collateral fair values are reviewed quarterly and the protective equity for each loan is computed. As used herein, “protective equity” is the arithmetic difference between the fair value of the collateral, net of any senior liens, and the loan balance, where “loan balance” is the sum of the unpaid principal, advances and the recorded interest thereon. This computation is done for each loan (whether impaired or performing), and while loans secured by collateral of similar property type are grouped, there is enough distinction and variation in the collateral that a loan-by-loan, collateral-by-collateral analysis is appropriate.

For loans designated impaired, a provision is made for loan losses to adjust the allowance for loan losses to an amount such that the net carrying amount (unpaid principal less the specific allowance) is reduced to the lower of the loan balance or the estimated fair value of the related collateral, net of any senior loans and net of any costs to sell in arriving at net realizable value.

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REDWOOD MORTGAGE INVESTORS IX, LLC

Notes to Financial Statements

March 31, 2018 (unaudited)

Loans determined not to be individually impaired are grouped by the property type of the underlying collateral, and for each loan and for the total by property type, the amount of protective equity or amount of exposure to loss ( i.e., the dollar amount of the deficiency of the fair value of the underlying collateral to the loan balance) is computed.

The company charges off uncollectible loans and related receivables directly to the allowance account once it is determined the full amount is not collectible.

At foreclosure any excess of the recorded investment in the loan (accounting basis) over the net realizable value is charged against the allowance for loan losses.

Real estate owned (REO)

Real estate owned, or REO, is property acquired in full or partial settlement of loan obligations generally through foreclosure, and is recorded at acquisition at the lower of the amount owed on the loan (legal basis), plus any senior indebtedness, or at the property’s net realizable value, which is the fair value less estimated costs to sell, as applicable. The fair value estimates are derived from information available in the real estate markets including similar property, and often require the experience and judgment of third parties such as commercial real estate appraisers and brokers. The estimates figure materially in calculating the value of the property at acquisition, the level of charge to the allowance for loan losses and any subsequent valuation reserves. After acquisition, costs incurred relating to the development and improvement of property are capitalized to the extent they do not cause the recorded value to exceed the net realizable value, whereas costs relating to holding and disposition of the property are expensed as incurred.  After acquisition, REO is analyzed periodically for changes in fair values and any subsequent write down is charged to operations expenses. Any recovery in the fair value subsequent to such a write down is recorded and is not to exceed the value recorded at acquisition. Recognition of gains on the sale of real estate is dependent upon the transaction meeting certain criteria related to the nature of the property and the terms of the sale including potential seller financing.

Recently issued accounting pronouncements

-Accounting and Financial reporting for Expected Credit Losses

The Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) that significantly changes how entities will account for credit losses for most financial assets that are not measured at fair value through net income. The new standard will supersede currently in effect guidance and applies to all entities. Entities will be required to use a current expected credit loss (CECL) model to estimate credit impairment. This estimate will be forward-looking, meaning management will be required to use forecasts about future economic conditions to determine the expected credit loss over the remaining life of an instrument. This will be a significant change from the current incurred credit loss model, and generally may result in allowances being recognized in earlier periods than under the current credit loss model.

RMI IX invests in real estate secured loans made with the expectation of zero credit losses as a result of substantial protective equity provided by the underlying collateral. For a loss to be recognized under the CECL or incurred loss model, if the lending/loan-to-value guidelines are followed effectively, an intervening, subsequent-to-loan-funding, event must negatively impact the value of the underlying collateral of the loan in an amount greater than the amount of protective equity provided by the collateral. Such an event would be either (or both) of:

• an uninsured event(s) specifically impacting the collateral or

• a non-temporary decline in values in the applicable real estate market.

In both of these instances the treatment would be the same in the incurred loss and CECL models of approximately the same amount.  Other than in these events, the probable of occurrence criteria of the incurred loss model is not triggered and a loss is not recognized. Further, if the zero-expected-loss lending guideline is preserved and  the protective equity provided by the collateral is not expected to be impaired over the life of the loans, then a loss is not required to be recognized under the CECL model.

This convergence between the CECL and incurred loss models as to loss recognition – as an event driven occurrence – in low LTV, real estate secured programs caused RMC to conclude that the CECL model will not materially impact the reported results of operations or financial position as compared to that which would be reported in the incurred loss model.  The manager expects to adopt the ASU for interim and annual reporting in 2020.

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REDWOOD MORTGAGE INVESTORS IX, LLC

Notes to Financial Statements

March 31, 2018 (unaudited)

-Accounting and Financial Reporting for Revenue Recognition

On May 28, 2014, FASB issued a final standard on revenue from contracts with customers. The standard issued as ASU 2014-09 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The standard is effective January 1, 2018, and has been adopted using the modified retrospective approach.

The goals of the revenue recognition project are to clarify and converge the revenue recognition principles under U.S. GAAP and to develop guidance that would streamline and enhance revenue recognition requirements.  A core principle of the standard is to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services.  Revenue is recognized when a performance obligation is satisfied by transferring goods or services to a customer. The FASB intentionally used the wording “be entitled” rather than “receive” or “collect” to distinguish collectability risk from other uncertainties that may exist under a contract.

Adoption of the revenue standard did not have an impact on the company’s current revenue recognition policies since the scope of guidance is not applicable to financial instruments including loans and therefore did not have an impact on the recognition of interest income or late fees.

NOTE 3 – MANAGER AND OTHER RELATED PARTIES

RMC’s allocated one percent (1%) of the profits and losses was $11,425 and $8,168 for the three months ended March 31, 2018 and 2017, respectively. The manager, at its sole discretion, provided financial support that improved net income and the return to investors in both 2018 and 2017. Total support provided, as detailed below, was approximately $628,000 and $401,000 for the three months ended March 31, 2018 and 2017, respectively.

At times, to enhance the company’s earnings, RMC has taken several actions, including:

• charging less than the maximum allowable fees;

• not requesting reimbursement of qualifying expenses; and/or,

• paying company expenses, such as professional fees, that could have been obligations of the company.

Such fee waivers and cost actions were not made for the purpose of providing the company with sufficient funds to satisfy withdrawal requests, nor to meet any required level of distributions, as the company has no such required level of distributions. RMC does not use any specific criteria in determining the exact amount of fees to be waived and/or costs to be absorbed. Any decision to waive fees and/or to absorb costs, and the amount (if any) to be waived or absorbed, is made by RMC in its sole discretion.

Going forward, this support will be reduced and RMC expects support will ultimately cease.  Beginning in April 2018, the manager will no longer pay for company expenses, and intends, by the fourth quarter of 2018, to begin reducing fee waivers and commence collecting reimbursable expenses, so that by July 2019 the company will be paying RMC the fees it is entitled to under the operating agreement and reimbursing RMC for expenses attributable to the company.  

Fees waived and costs reimbursements for the three months ended March 31, 2018 are presented in the following table.

				Operating Expenses
	Loan Admin Fees			Mortgage Servicing Fees		Asset Management Fee			Cost Reimbursements			Professional Services			Other			Total
Chargeable/reimbursable	$	158,363		$	35,184	$	127,844		$	184,149		$	147,837		$	14,332		$	667,709
RMC Support
Waived		(158,363	)		—		(127,844	)		(184,149	)		—			—			(470,356	)
Cost Absorbed by RMC		—			—		—			—			(143,152	)		(14,247	)		(157,399	)
Total RMC Support		(158,363	)		—		(127,844	)		(184,149	)		(143,152	)		(14,247	)		(627,755	)
Net charged	$	—		$	35,184	$	—		$	—		$	4,685		$	85		$	39,954

12

REDWOOD MORTGAGE INVESTORS IX, LLC

Notes to Financial Statements

March 31, 2018 (unaudited)

Fees waived and costs reimbursements for the three months ended March 31, 2017 are presented in the following table.

				Operating Expenses
	Loan Admin Fees			Mortgage Servicing Fees		Asset Management Fee			Cost Reimbursements			Professional Services			Other			Total
Chargeable/reimbursable	$	86,077		$	24,310	$	86,434		$	97,605		$	119,739		$	11,808		$	425,973
RMC Support
Waived		(86,077	)		—		(86,434	)		(97,605	)		—			—			(270,116	)
Cost Absorbed by RMC		—			—		—			—			(119,739	)		(10,769	)		(130,508	)
Total RMC Support		(86,077	)		—		(86,434	)		(97,605	)		(119,739	)		(10,769	)		(400,624	)
Net charged	$	—		$	24,310	$	—		$	—		$	—		$	1,039		$	25,349

• Loan administrative fees

RMC is entitled to receive a loan administrative fee in an amount up to one percent (1%) of the principal amount of each new loan originated or acquired on the company’s behalf by RMC for services rendered in connection with the selection and underwriting of potential loans. Such fees are payable by the company upon the closing or acquisition of each loan. Beginning in August 2015, RMC, at its sole discretion, began waiving loan administrative fees.  

• Mortgage servicing fees

RMC earns mortgage servicing fees from the company of up to one-quarter of one percent (0.25%) annually of the unpaid principal balance of the loan portfolio or such lesser amount as is reasonable and customary in the geographic area where the property securing the mortgage is located. RMC is entitled to receive these fees regardless of whether specific mortgage payments are collected. The mortgage servicing fees are accrued monthly on all loans. Remittance to RMC is made monthly unless the loan has been assigned a specific loss reserve, at which point remittance is deferred until the specific loss reserve is no longer required, or the property has been acquired by the company. An increase or decrease in this fee within the limits set by the operating agreement directly impacts the yield to the members.

• Asset management fees

RMC is entitled to receive a monthly asset management fee for managing the company’s portfolio and operations in an amount up to three-quarters of one percent (0.75%) annually of the portion of the capital originally committed to investment in mortgages, not including leverage, and including up to two percent (2%) of working capital reserves. This amount will be recomputed annually after the second full year of operations by subtracting from the then fair value of the company’s loans plus working capital reserves, an amount equal to the outstanding debt.

RMC, at its sole discretion, may elect to accept less than the maximum amount of the asset management fee. An increase or decrease in this fee within the limits set by the operating agreement directly impacts the yield to the members. RMC intends to begin reducing these fee waivers by the fourth quarter of 2018.

• Costs through RMC

RMC, per the operating agreement, may request reimbursement by the company for operations expense incurred on behalf of the company, including without limitation, accounting and audit fees, legal fees and expenses, postage and preparation of reports to members and out-of-pocket general and administration expenses. Certain costs (e.g. postage) can be allocated specifically to the company. Other costs are allocated on a pro-rata basis (e.g. by the company’s percentage of total capital of all mortgage funds managed by RMC). Payroll and consulting fees are broken out first based on activity, and then allocated to the company on a pro-rata basis based on percentage of capital to the total capital of all mortgage funds.

RMC, at its sole discretion, has elected to request less than the maximum amount of reimbursement for operating expenses.  An increase or decrease in this reimbursement, within the limits set by the operating agreement, directly impacts the yield to the members. RMC intends to initiate collecting qualifying expenses by the fourth quarter of 2018.

13

REDWOOD MORTGAGE INVESTORS IX, LLC

Notes to Financial Statements

March 31, 2018 (unaudited)

• Professional Services

Professional services consist primarily of legal, regulatory (including SEC/FINRA compliance) and audit and tax compliance expenses.

RMC, at its sole discretion, elected to reimburse the company for professional services (primarily audit and tax expense). An increase or decrease in reimbursements by RMC directly impacts the yield to the members. Beginning in April 2018, RMC will no longer provide reimbursements to the company for professional services.

Commissions and fees are paid by the borrowers to RMC.

• Brokerage commissions, loan originations

For fees in connection with the review, selection, evaluation, negotiation and extension of loans, RMC may collect a loan brokerage commission that is expected to range from approximately 1.5% to 5% of the principal amount of each loan made during the year. Total loan brokerage commissions are limited to an amount not to exceed 4% of the total company assets per year. The loan brokerage commissions are paid by the borrowers, and thus, are not an expense of the company.

• Other fees

RMC receives fees for processing, notary, document preparation, credit investigation, reconveyance and other mortgage related fees. The amounts received are customary for comparable services in the geographical area where the property securing the loan is located, payable solely by the borrower and not by the company.

In the ordinary course of business, performing loans may be assigned, in-part or in-full, between the affiliated mortgage funds at par. During the three months ended March 31, 2018, Redwood Mortgage Investors VIII, LP, an affiliated mortgage fund, assigned to the company two performing loans in-full at par value of approximately $5,890,000. The company paid cash for the loans and the affiliated mortgage fund has no continuing obligation or involvement on the loans assigned to the company. There were no loans assigned during the three months ended March 31, 2017.

Formation loan

Formation loan transactions are presented in the following table.

	For the three months ended			Since Inception
Balance, beginning of period	$	3,777,088		$	—
Formation loan advances to RMC		357,794			5,017,741
Payments received from RMC		—			(854,077	)
Early withdrawal penalties applied		(1,051	)		(29,833	)
Balance, March 31, 2018	$	4,133,831		$	4,133,831
Subscription proceeds since inception				$	71,490,002
Formation loan advance rate					7	%

The future minimum payments on the formation loan as of March 31, 2018 are presented in the following table.

2018	$	377,709
2019		377,709
2020		377,709
2021		377,709
2022		377,709
Thereafter		2,245,286
Total	$	4,133,831

14

REDWOOD MORTGAGE INVESTORS IX, LLC

Notes to Financial Statements

March 31, 2018 (unaudited)

RMC is required to make annual payments on the formation loan of one tenth of the principal balance outstanding at December 31 of the prior year. The formation loan is forgiven if the manager is removed and RMC is no longer receiving payments for services rendered.

Reimbursement and allocation of organization and offering expenses

The manager is reimbursed for, or the company may pay directly, organization and offering expenses (or O&O expenses) incurred in connection with the organization of the company or offering of the units including, without limitation, attorneys’ fees, accounting fees, printing costs and other selling expenses (other than sales commissions) in a total amount not exceeding 4.5% of the original purchase price of all units (other than DRIP units) sold in all offerings (hereafter, the “maximum O&O expenses”), and the manager pays any O&O expenses in excess of the maximum O&O expenses. For each calendar quarter or portion thereof after December 31, 2015, that a member holds units (other than DRIP units) and for a maximum of forty (40) such quarters, a portion of the O&O expenses borne by the company is allocated to and debited from that member’s capital account in an annual amount equal to 0.45% of the member’s original purchase price for those units, in equal quarterly installments of 0.1125% each commencing with the later of the first calendar quarter of 2016 or the first full calendar quarter after a member’s purchase of units, and continuing through the quarter in which such units are redeemed. If at any time the aggregate O&O expenses actually paid or reimbursed by the company since inception are less than the maximum O&O expenses, the company shall first reimburse the manager for any O&O expenses previously borne by it so long as it does not result in the company bearing more than the maximum O&O expenses, and any savings thereafter remaining shall be equitably allocated among (and serve to reduce any subsequent such cost allocations to) those members who have not yet received forty (40) quarterly allocations of O&O expenses, as determined in the good faith judgment of the manager. Any O&O expenses with respect to a member’s units that remain unallocated upon redemption of such units shall be reimbursed to the company by the manager.

Organization and offering expenses (O & O expenses) are summarized in the following table.

	2018			Since Inception
Balance, January 1	$	2,335,325		$	—
O&O expenses reimbursed to RMC		143,694			3,038,308
Early withdrawal penalties applied (1)		(696	)		(19,211	)
O&O expenses allocated(2)		(70,208	)		(452,365	)
O&O expenses reimbursed by RMC (3)		(12,193	)		(170,810	)
Balance, March 31 (4)	$	2,395,922		$	2,395,922

(1) Early withdrawal penalties collected are applied to the next installment of principal due under the formation loan and to reduce the amount owed to RMC for O&O expenses. The amounts credited will be determined by the ratio between the amount of the formation loan and the amount of offering costs incurred by the company.

(2) Beginning in 2016, O&O expenses reimbursed to RMC by RMI IX are allocated to members’ capital accounts over 40 quarters

(3) RMC reimburses the company for any unallocated O&O expenses on units redeemed.

(4) Proceeds from investors admitted to RMI IX were $67,106,564 through March 31, 2018. O&O expenses incurred by RMC and remaining to be reimbursed to RMC by RMI IX were $3,210,028.

NOTE 4 – LOANS

Loans generally are funded at a fixed interest rate with a loan term of up to five years.  Loans acquired are generally done so within the first six months of origination, and purchased at the current par value, which approximates fair value. As of March 31, 2018, 87 of the company’s 93 loans (representing 98% of the aggregate principal of the company’s loan portfolio) have a loan term of five years or less from loan inception. The remaining loans have terms longer than five years. Substantially all loans are written without a prepayment penalty provision. As of March 31, 2018, 69 loans outstanding (representing 67% of the aggregate principal balance of the company’s loan portfolio) provide for monthly payments of principal and interest, typically calculated on a 30-year amortization, with the remaining principal balance due at maturity. The remaining loans provide for monthly payments of interest only, with the principal balance due at maturity.

15

REDWOOD MORTGAGE INVESTORS IX, LLC

Notes to Financial Statements

March 31, 2018 (unaudited)

Secured loans unpaid principal balance (principal)

Secured loan transactions are summarized in the following table for the three months ended March 31, 2018.

	2018
Principal, January 1	$	54,768,689
Loans funded		9,946,500
Loans acquired from affiliates		5,889,819
Principal payments received		(12,739,617	)
Principal, March 31	$	57,865,391

During the three months ended March 31, 2018, the company renewed 4 loans, at then market terms, with an aggregate principal balance of $1,324,473, which are not included in the activity shown above.

Loan characteristics

Secured loans had the characteristics presented in the following table.

	March 31,			December 31,
	2018			2017
Number of secured loans		93			93
Secured loans – principal	$	57,865,391		$	54,768,689
Secured loans – lowest interest rate (fixed)		6.9	%		6.9	%
Secured loans – highest interest rate (fixed)		10.5	%		10.5	%
Average secured loan – principal	$	622,209		$	588,911
Average principal as percent of total principal		1.1	%		1.1	%
Average principal as percent of members’ capital		0.9	%		0.9	%
Average principal as percent of total assets		0.9	%		0.9	%
Largest secured loan – principal	$	3,200,000		$	3,239,124
Largest principal as percent of total principal		5.5	%		5.9	%
Largest principal as percent of members’ capital		4.7	%		5.0	%
Largest principal as percent of total assets		4.7	%		5.1	%
Smallest secured loan – principal	$	94,425		$	52,562
Smallest principal as percent of total principal		0.2	%		0.1	%
Smallest principal as percent of members’ capital		0.1	%		0.1	%
Smallest principal as percent of total assets		0.1	%		0.1	%
Number of California counties where security is located		17			16
Largest percentage of principal in one California county		18.8	%		22.6	%
Number of secured loans with filed notice of default		1			1
Secured loans in foreclosure – principal	$	139,162		$	139,643
Number of secured loans with an interest reserve		—			—
Interest reserves	$	—		$	—

As of March 31, 2018, the company’s largest loan with principal of $3,200,000 represents 5.5% of outstanding secured loans and 4.7% of company assets. The loan is secured by a retail-office property located in Los Angeles County, bears an interest rate of 8.75% and matures on November 1, 2018. As of March 31, 2018, the company had 1 loan with a notice of default filed.

In compliance with California laws and regulations, all borrower receipts are deposited into a bank trust account maintained by RMC and subsequently disbursed to the company after an appropriate holding period. At March 31, 2018, the trust account held a balance

16

REDWOOD MORTGAGE INVESTORS IX, LLC

Notes to Financial Statements

March 31, 2018 (unaudited)

relating to the company’s loan portfolio of $50,209, consisting of both interest and principal payments from borrowers, all of which was disbursed by April 13, 2018.

Lien position

Secured loans had the lien positions presented in the following table.

	March 31, 2018								December 31, 2017
	Loans		Principal			Percent			Loans		Principal			Percent
First trust deeds		56	$	35,087,060			61	%		60	$	37,032,195			68	%
Second trust deeds		37		22,778,331			39			33		17,736,494			32
Total secured loans		93		57,865,391			100	%		93		54,768,689			100	%
Liens due other lenders at loan closing				37,901,684								31,545,806
Total debt			$	95,767,075							$	86,314,495
Appraised property value at loan closing			$	197,444,000							$	181,018,000
Percent of total debt to appraised values    (LTV) at loan closing(1)				53.7	%							53.5	%

(1) Based on appraised values and liens due other lenders at loan closing. The weighted-average loan-to-value (LTV) computation above does not take into account subsequent increases or decreases in property values following the loan closing nor does it include decreases or increases of the amount owing on senior liens to other lenders.

Property type

Secured loans summarized by property type are presented in the following table.

	March 31, 2018							December 31, 2017
	Loans		Principal		Percent			Loans		Principal		Percent
Single family(2)		65	$	37,929,509		66	%		67	$	37,615,216		69	%
Multi-family		8		5,337,203		9			5		2,164,861		4
Commercial		20		14,598,679		25			21		14,988,612		27
Total secured loan balance		93	$	57,865,391		100	%		93		54,768,689		100	%

(2) Single family property type as of March 31, 2018 consists of 11 loans with principal of $6,506,239 that are owner occupied and 54 loans with principal of $31,423,270 that are non-owner occupied.  At December 31, 2017, single family property consisted of 10 loans with principal of $6,309,036 that are owner occupied and 57 loans with principal of $31,306,180 that are non-owner occupied.

17

REDWOOD MORTGAGE INVESTORS IX, LLC

Notes to Financial Statements

March 31, 2018 (unaudited)

Distribution of loans within California

The distribution of secured loans outstanding by California counties is presented in the following table as of March 31, 2018, and December 31, 2017.

	March 31, 2018					December 31, 2017
	Principal		Percent			Principal		Percent
San Francisco Bay Area(3)
Alameda	$	8,993,618		15.5	%	$	9,869,036		18.0	%
San Mateo		8,554,723		14.8			7,800,549		14.2
San Francisco		7,755,285		13.4			8,338,720		15.1
Santa Clara		7,111,703		12.3			5,461,084		10.0
Sonoma		1,285,000		2.2			—		—
Contra Costa		1,064,345		1.8			1,511,195		2.8
Solano		—		—			109,443		0.2
		34,764,674		60.0			33,090,027		60.3
Other Northern California
Sacramento		850,000		1.5			850,000		1.6
Placer		641,571		1.1			642,913		1.2
Yolo		169,915		0.3			174,758		0.3
San Joaquin		156,696		0.3			157,039		0.3
		1,818,182		3.2			1,824,710		3.4
Northern California Total		36,582,856		63.2			34,914,737		63.7
Los Angeles & Coastal
Los Angeles		10,871,240		18.8			12,357,456		22.6
Orange		4,594,372		7.9			1,487,747		2.7
San Diego		2,004,547		3.5			2,192,746		4.0
Santa Barbara		994,774		1.7			996,768		1.8
Ventura		349,291		0.6			350,000		0.6
		18,814,224		32.5			17,384,717		31.7
Other Southern California
San Bernardino		2,110,000		3.7			2,110,000		3.9
Riverside		358,311		0.6			359,235		0.7
		2,468,311		4.3			2,469,235		4.6
Southern California Total		21,282,535		36.8			19,853,952		36.3
Total Secured Loans	$	57,865,391		100.0	%	$	54,768,689		100.0	%

(3) Includes Silicon Valley

18

REDWOOD MORTGAGE INVESTORS IX, LLC

Notes to Financial Statements

March 31, 2018 (unaudited)

Scheduled maturities

Secured loans are scheduled to mature as presented in the following table as of March 31, 2018.

	Loans		Principal		Percent
2018(4)		13	$	15,156,189		26	%
2019		37		25,167,665		43
2020		18		8,254,558		14
2021		9		4,244,110		7
2022		11		3,469,122		6
Thereafter		4		1,434,585		3
Total future maturities		92		57,726,229		99
Matured as of March 31, 2018		1		139,162		1
Total secured loan balance		93	$	57,865,391		100	%

(4) Loans maturing in 2018 from April 1 to December 31.

One loan with a principal balance of $139,162 was past maturity as of March 31, 2018. The loan was 334 days delinquent and designated as impaired and in non-accrual status at March 31, 2018.

Loans may be repaid or refinanced before, at or after the contractual maturity date.  On matured loans, the company may continue to accept payments while pursuing collection of amounts owed from borrowers.  Therefore, the above tabulation for scheduled maturities is not a forecast of future cash receipts.

Delinquency

Secured loans summarized by payment delinquency are presented in the following table as of March 31, 2018 and December 31, 2017.

	March 31, 2018				December 31, 2017
	Loans		Amount		Loans		Amount
Past Due
30-89 days		4	$	1,324,345		3	$	1,259,100
90-179 days		—		—		—		—
180 or more days		1		139,162		1		139,643
Total past due		5		1,463,507		4		1,398,743
Current		88		56,401,884		89		53,369,946
Total secured loan balance		93	$	57,865,391		93	$	54,768,689

Loans in non-accrual status

	March 31, 2018		December 31, 2017
Number of loans	$	1	$	1
Principal investment		139,162		139,643
Advances		4,369		969
Accrued Interest		8,874		11,025
Total recorded investment	$	152,405	$	151,637
Foregone interest	$	7,535	$	4,306

At March 31, 2018, and December 31, 2017, no loans were 90 or more days past due as to principal or interest and not in non-accrual status.

19

REDWOOD MORTGAGE INVESTORS IX, LLC

Notes to Financial Statements

March 31, 2018 (unaudited)

Impaired loans/allowance for loan losses

	March 31, 2018		December 31, 2017
Principal	$	139,162	$	139,643
Recorded investment(5)		152,405		151,637
Impaired loans without allowance		152,405		151,637
Impaired loans with allowance		—		—
Allowance for loan losses, impaired loans		—		—
Number of loans		1		1

(5)Recorded investment is the sum of the principal, advances, and interest accrued for financial reporting purposes.

One loan was designated as impaired at March 31, 2018 and at December 31, 2017. No allowance for loan losses has been recorded as all loans were deemed to have protective equity (i.e., low loan-to-value ratio) such that collection is reasonably assured for all amounts owing.

Impaired loans had average balances and interest income recognized and received in cash as presented in the following tables as of and for the three months ended March 31, 2018 and the year ended December 31, 2017.

	March 31, 2018		December 31, 2017
Average recorded investment	$	152,021	$	536,934
Interest income recognized		—		8,602
Interest income received in cash		3,224		4,342

Modifications and troubled debt restructurings

No loan payment modifications were made during three months ended March 31, 2018, and December 31, 2017, and no modifications were in effect at March 31, 2018 and December 31, 2017.  

Commitments/loan disbursements/construction and rehabilitation loans

As of March 31, 2018, the company had no construction loans outstanding. The company may make construction loans that are not fully disbursed at loan inception. Construction loans are determined by the manager to be those loans made to borrowers for the construction of entirely new structures or dwellings, whether residential, commercial or multi-family properties. The company will approve and fund the construction loan up to a maximum loan balance. Disbursements will be made periodically as phases of the construction are completed or at such other times as the loan documents may require. Undisbursed construction funds will be held in escrow pending disbursement. Upon project completion, construction loans are reclassified as permanent loans. Funding of construction loans is limited to 10% of the loan portfolio. 

At March 31, 2018, the company had no rehabilitation loans outstanding. The company may also make rehabilitation loans. A rehabilitation loan will be approved up to a maximum principal balance and, at loan inception, will be either fully or partially disbursed. If fully disbursed, a rehabilitation escrow account is established and advanced periodically as phases of the rehabilitation are completed or at such other times as the loan documents may require. If not fully disbursed, the rehabilitation loan will be funded from available cash balances and future cash receipts. The company does not maintain a separate cash reserve to fund undisbursed rehabilitation loan obligations. Rehabilitation loan proceeds are generally used to acquire and remodel single family homes for future sale or rental. Upon project completion, rehabilitation loans are reclassified as permanent loans. Funding of rehabilitation loans is limited to 15% of the loan portfolio. 

20

REDWOOD MORTGAGE INVESTORS IX, LLC

Notes to Financial Statements

March 31, 2018 (unaudited)

Fair Value

The company does not record its loans at fair value on a recurring basis. The recorded amount of the performing loan (i.e., the loan balance) is deemed to approximate fair value as is the loan balance of loans designated impaired for which a specific reserve has not been recorded (i.e., the loan is well collateralized such that collection of the amount owed is assured, including forgone interest if any). Loans designated impaired (i.e., that are collateral dependent) are measured at fair value on a non-recurring basis. No assets or liabilities were measured at fair value on a non-recurring basis at and for the periods ended March 31, 2018 or December 31, 2017.

• Secured loans, performing (i.e. not designated as impaired) (Level 2) - Each loan is reviewed quarterly for its delinquency, LTV adjusted for the most recent valuation of the underlying collateral, remaining term to maturity, borrower’s payment history and other factors. Also considered is the limited resale market for the loans. Most companies or individuals making similar loans as the company intend to hold the loans until maturity as the average contractual term of the loans (and the historical experience of the time the loan is outstanding due to pre-payments) is shorter than conventional mortgages. As there are no prepayment penalties to be collected, loan buyers may be hesitant to risk paying above par. Due to these factors, sales of the loans are infrequent, because an active market does not exist. The recorded amount of the performing loans (i.e. the loan balance) is deemed to approximate the fair value, although the intrinsic value of the loans would reflect a premium due to the interest to be received.

• Secured loans, designated impaired (Level 2) - Secured loans designated impaired are deemed collateral dependent, and the fair value of the loan is the lesser of the fair value of the collateral or the enforceable amount owing under the note. The fair value of the collateral is determined by exercise of judgment based on management’s experience informed by appraisals (by licensed appraisers), brokers’ opinion of values and publicly available information on in-market transactions (Level 2 inputs).

The following methods and assumptions are used to determine the fair value of the collateral securing a loan.

Single family – Management’s preferred method for determining the fair market value of its single-family residential assets is the sale comparison method. Management primarily obtains sale comps via its subscription to the RealQuest service, but also uses free online services such as Zillow.com and other available resources to supplement this data. Sale comps are reviewed for similarity to the subject property, examining features such as proximity to subject, number of bedrooms and bathrooms, square footage, sale date, condition and year built.

If applicable sale comps are not available or deemed unreliable, management will seek additional information in the form of brokers’ opinions of value or appraisals.

Multi-family residential – Management’s preferred method for determining the aggregate retail value of its multifamily units is the sale comparison method. Sale comps are reviewed for similarity to the subject property, examining features such as proximity to subject, rental income, number of units, composition of units by the number of bedrooms and bathrooms, square footage, condition, amenities and year built.

Management’s secondary method for valuing its multifamily assets as income-producing rental operations is the direct capitalization method.  In order to determine market cap rates for properties of the same class and location as the subject, management refers to published data from reliable third-party sources such as the CBRE Cap Rate Survey. Management applies the appropriate cap rate to the subject’s most recent available annual net operating income to determine the property’s value as an income-producing project. When adequate sale comps are not available or reliable net operating income information is not available or the project is under development or is under-performing to market, management will seek additional information and analysis to determine the cost to improve and the intrinsic fair value and/or management will seek additional information in the form of brokers’ opinion of value or appraisals.

Commercial buildings – Where commercial rental income information is available, management’s preferred method for determining the fair value of its commercial real estate assets is the direct capitalization method. In order to determine market cap rates for properties of the same class and location as the subject, management refers to reputable third-party sources such as the CBRE Cap Rate Survey. Management then applies the appropriate cap rate to the subject’s most recent available annual net operating income to determine the property’s value as an income-producing commercial rental project. When adequate sale comps are not available or reliable net operating income information is not available or the project is under development or is under-performing to market, management will seek additional information and analysis to determine the cost to improve and the intrinsic fair value and/or management will seek additional information in the form of brokers’ opinion of value or appraisals.

Management supplements the direct capitalization method with additional information in the form of a sale comparison analysis (where adequate sale comps are available), brokers’ opinion of value, or appraisal.

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REDWOOD MORTGAGE INVESTORS IX, LLC

Notes to Financial Statements

March 31, 2018 (unaudited)

Commercial land – Commercial land has many variations/uses, thus requiring management to employ a variety of methods depending upon the unique characteristics of the subject land. Management may rely on information in the form of a sale comparison analysis (where adequate sale comps are available), brokers’ opinion of value, or appraisal.

NOTE 5 – COMMITMENTS AND CONTINGENCIES, OTHER THAN LOAN COMMITMENTS

Commitments

The company had two contractual obligations as of March 31, 2018:

• To reimburse RMC for O&O expenses (as of March 31, 2018, $3,210,028 was to be reimbursed to RMC) contingent upon future sales of units; and,

• Redemptions of members' capital scheduled of $393,124, to be paid between 2018 and 2021.

Scheduled redemptions as of March 31, 2018 are presented in the following table.

2018	$	365,958
2019		12,000
2020		12,000
2021		3,166
Total	$	393,124

Legal proceedings

In the normal course of its business, the company may become involved in legal proceedings (such as assignment of rents, bankruptcy proceedings, appointment of receivers, unlawful detainers, judicial foreclosure, etc.) to collect the debt owed under the promissory notes, to enforce the provisions of the deeds of trust, to protect its interest in the real property subject to the deeds of trust and to resolve disputes with borrowers, lenders, lien holders and mechanics. None of these actions, in and of themselves, typically would be of any material financial impact to the net income or balance sheet of the company. As of the date hereof, the company is not involved in any legal proceedings other than those that would be considered part of the normal course of business.

NOTE 6 – SUBSEQUENT EVENTS

None.

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the unaudited financial statements and notes thereto, which are included in Item 1 of this report on Form 10-Q, as well as the audited financial statements and the notes thereto, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the company’s Annual Report on Form 10-K for the year ended December 31, 2017, filed with the U.S. Securities and Exchange Commission (or SEC). The results of operations for the three months ended March 31, 2018 are not necessarily indicative of the operations results to be expected for the full year.

Forward-Looking Statements

Certain statements in this Report on Form 10-Q which are not historical facts may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including statements regarding the company’s expectations, hopes, intentions, beliefs and strategies regarding the future. Forward-looking statements, which are based on various assumptions (some of which are beyond our control), may be identified by reference to a future period or periods or by use of forward-looking terminology, such as “may,” “will,” “believe,” “expect,” “anticipate,” “continue,” “possible” or similar terms or variations on those terms or the negative of those terms. Forward-looking statements include statements regarding trends in the California real estate market, future interest rates and economic conditions and their effect on the company and its assets, estimates as to the allowance for loan losses, estimates of future redemptions of units, future funding of loans and possibly loan sales to third parties by the company, reductions in financial support by the manager, fluctuations in the distribution rate, and beliefs relating to how the company will be affected by current economic conditions and trends in the financial and credit markets. Actual results may be materially different from what is projected by such forward-looking statements. Factors that might cause such a difference include, but are not limited to, the following:

• changes in economic conditions, interest rates, and/or changes in California real estate markets;

• the impact of competition and competitive pricing for mortgage loans;

• our ability to grow our mortgage lending business;

• the manager’s ability to make and arrange for loans that fit our investment criteria;

• the volume and timing of loan sales to third parties or if we are able to sell loans at all;

• the concentration of credit risks to which we are exposed;

• increases in payment delinquencies and defaults on our mortgage loans; and

• changes in government regulation and legislative actions affecting our business.

All forward-looking statements and reasons why results may differ included in this Form 10-Q are made as of the date hereof, and we assume no obligation to update any such forward-looking statement or reason why actual results may differ.

Overview

Redwood Mortgage Investors IX, LLC (we, RMI IX or the company) is a Delaware limited liability company formed in October 2008 to engage in business as a mortgage lender and investor by making and holding-for-investment loans secured by California real estate, primarily through first and second deeds of trust. The company is externally managed. Redwood Mortgage Corp. (RMC, the manager or management) is the manager of the company.

See Note 1 (Organization and General) to the financial statements included in Part I, Item 1 of this report on Form 10-Q for additional detail on the organization and operations of RMI IX which detail is incorporated by this reference into this Item 2. For a detailed presentation of the company activities for which related parties are compensated and related transactions, including the formation loan to RMC, See Note 1 (Organization and General) and Note 3 (Manager and Other Related Parties) to the financial statements included in Part I, Item 1 of this report, which presentation is incorporated by this reference into this Item 2.

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Ongoing public offering of units/ SEC Registrations

In June, 2016, the company’s Registration Statement on Form S-11 filed with the SEC (SEC File No. 333-208315) to offer up to 120,000,000 units ($120,000,000) to the public and 20,000,000 units ($20,000,000) to its members pursuant to the DRIP became effective and continues for up to three (3) years thereafter. As of March 31, 2018, we had sold approximately 74,234,000 units – 39,407,000 units under our previous registration statements and 34,827,000 units under our current registration which is effective as of June 2016. Correspondingly, gross proceeds from unit sales at $1 per unit (including units issued under our distribution reinvestment plan) were approximately $39,407,000 and $34,827,000, respectively.

The units have been registered pursuant to Section 12(g) of the Exchange Act of 1934 (or the Exchange Act). Such registration of the units, along with the satisfaction of certain other requirements under ERISA, enables the units to qualify as “publicly-offered securities” for purposes of ERISA and regulations issued thereunder. By satisfying those requirements, the underlying assets of the company should not be considered assets of a “benefit plan investor” (as defined under ERISA) by virtue of the investment by such benefit plan investor in the units.

The following summarizes the proceeds from sales of units, from inception (October, 2009) through March 31, 2018.

	Proceeds
From investors - admitted	$	67,106,564
From members under our DRIP		6,830,872
From premiums paid by RMC(1)		296,209
Total proceeds from unit sales	$	74,233,645

(1) If a member acquired units through an unsolicited sale (i.e. without broker/dealer) the member’s capital account is credited with their capital contribution plus a premium paid by RMC equal to the amount of the sales commissions that otherwise would have been paid to a broker-dealer by RMC. This premium is reported in the year paid as taxable income to the member.

The proceeds from the sales of the units will not be segregated but will be commingled with the company’s cash. The ongoing sources of funds for loans are the proceeds from:

• sale of members’ units (net of reimbursement to RMC of organization and offering expenses), including units sold by reinvestment of distributions;

• loan payoffs;

• borrowers’ monthly principal and interest payments; and

• to a lesser degree and, if obtained, a line of credit.

Cash generated from loan payoffs and borrower payments of principal and interest is used for operating expenses, reimbursements to RMC of O&O expenses, and unit redemptions. The cash flow, if any, in excess of these uses is reinvested in new loans.

Critical Accounting Policies

See Note 2 (Summary of Significant Accounting Policies) to the financial statements included in Part I, Item 1 of this report on Form 10-Q for a detailed presentation of critical accounting policies, which presentation is incorporated by this reference into this Item 2.

Results of Operations

General economic conditions – California

All of our mortgage loans are secured by California real estate. Our secured-loan investment activity and the value of the real estate securing our loans is significantly dependent on economic activity and employment conditions in the state. Wells Fargo’s Economics Group periodically provides timely, relevant information and analysis in its commentary and reports regarding California’s employment and economic conditions. Highlights from a recently issued report from Wells Fargo Securities Economic Group is presented below.

In the publication “California Gets a Jump on 2018” dated March 9, 2018:

“Nonfarm employment fell for the second month in a row in California, as employers cut a net 7,300 jobs during March. The drop follows a 5,200-job decline in February. Despite the declines, employment remains up solidly on a year-to-year basis, climbing 2.1 percent and posting a net gain of 345,200 jobs. California’s unemployment rate was unchanged in March at 4.3 percent, which

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matches its modern era low. The number of employed Californians has increased 1.5 percent over the past year, or more than three times faster than the labor force has risen. The number of unemployed has fallen 17.1 percent over the past year.”

“The recent pullback in nonfarm employment may simply be statistical noise. The monthly data can bounce around quite a bit, and the October to January period averaged close to 50,000 net new jobs per month. Taking the past six months together, the monthly average gain is now 30,400 jobs, which is more in line with the year-to-year trend. Most major industry categories posted declines during March, led by other services, retail trade, financial activities and management of companies. The softness in these four sectors may be more problematic than the slowing of the overall data. The most common occupations in the other services category are car detailers, automotive technicians, hair stylists, manicurists and parking lot attendants–most of which, with the exception of automotive technicians, are relatively low paid jobs that earn less than $25,000 a year. Workers in these fields are increasingly leaving the state as it has become exceptionally difficult for them to afford to live in California. The tighter labor market may also be opening the door for workers in lower-paying occupations to land jobs in higher paying fields. Workers in lower-paying occupations in retail trade and financial services are also increasingly being priced out of the state, while the drop in jobs in management of companies, which has fallen in 8 of the past 12 months and is down 0.4 percent year-to-year, likely reflects the relocation of corporate offices and headquarters to other states. Even companies that are staying in California are increasingly moving administrative functions to lower cost areas in Arizona, Nevada, Utah, Texas and the Southeast.”

“California’s education & health services sector has supplied some of the strongest year-over-year payroll growth in the state at 3.3 percent, second only to the much smaller construction industry. The 88,000 jobs added in education and health care account for one quarter of the jobs added in California during the past year, with most of the gain coming in health care and social assistance.”

“Health care is an important driver of the California economy according to the recently-released Occupational Employment Statistics, which provides annual detail on payrolls and average earnings for occupations within major industries. According to the report, the healthcare and social assistance sector is the largest in the state and employs nearly 2.4 million workers with an average annual wage of $57,260. Over half of those jobs can be found in just two major occupation categories that are at opposite ends of the wage spectrum. Healthcare practitioners and technical occupations is at the top end of the wage spectrum, with its 668,730 workers earning an average annual wage of $99,090. …”

“Educational services is the fourth largest aggregate employer in the state with 1,473,180 in total employment and an average wage of $62,950. Within that broad category, education, training and library services accounted for just under two-thirds of jobs in 2017. While the average annual wage for the sector is $66,090, the distribution of wages within the category varies considerably. Elementary school teachers are the largest subsector in the category, which numbered 156,320 in the state, and earned an above average wage of $78,010. Postsecondary teachers fell at the high- end of the wage spectrum, earning the highest average annual earnings of the sector at $93,757. Indeed, the 27 highest paying teaching occupations in education services are all at colleges and universities, led by health specialties instructors, who earn over $158,000 per year. Teacher assistant, however, is the second largest occupation in the education services category, employing 140,540 workers, yet earned $35,020 on average.”

In addition to the Wells Fargo article above, several articles have been published recently regarding California’s economic recovery since the “great recession,” excerpts from one such article posted on the LA Times website by Associated Press, May 4, 2018, 1:50pm “California is now the world's fifth-largest economy, surpassing United Kingdom” reads as follows:

“California's economy has surpassed that of the United Kingdom to become the world's fifth largest, according to new federal data made public Friday.

California's gross domestic product rose by $127 billion from 2016 to 2017, surpassing $2.7 trillion, the data said. Meanwhile, the U.K.'s economic output slightly shrank over that time when measured in U.S. dollars, due in part to exchange rate fluctuations.

The data demonstrate the sheer immensity of California's economy, home to nearly 40 million people, a thriving technology sector in Silicon Valley, the world's entertainment capital in Hollywood and the nation's salad bowl in the Central Valley agricultural heartland. It also reflects a substantial turnaround since the Great Recession.

All economic sectors except agriculture contributed to California's higher GDP, said Irena Asmundson, chief economist at the California Department of Finance. Financial services and real estate led the pack at $26 billion in growth, followed by the information sector, which includes many technology companies, at $20 billion. Manufacturing was up $10 billion.

California last had the world's fifth largest economy in 2002 but fell as low as 10th in 2012 following the Great Recession. Since then, the most populous U.S. state has added 2 million jobs and grown its GDP by $700 billion.

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California's economic output is now surpassed only by the total GDP of the United States, China, Japan and Germany. The state has 12% of the U.S. population but contributed 16% of the country's job growth between 2012 and 2017. Its share of the national economy also grew to 14.2% from 12.8% over that five-year period, according to state economists.

California's strong economic performance relative to other industrialized economies is driven by worker productivity, said Lee Ohanian, an economics professor at UCLA and director of the university's Ettinger Family Program in Macroeconomic Research. The United Kingdom has 25 million more people than California but now has a smaller GDP, he said.

California's economic juggernaut is concentrated in coastal metropolises around San Francisco, San Jose, Los Angeles and San Diego.”

Key Performance Indicators

The table below shows key performance indicators at and for the three months ended March 31.

	2018			2017
Secured loans – end of period balance	$	57,865,391			43,494,606
Secured loans – average daily balance	$	55,758,000			39,477,000
Interest on loans, gross	$	1,177,732			835,980
Portfolio interest rate(1)		8.5	%		8.5	%
Effective yield rate(2)		8.4	%		8.5	%
Amortization of loan administrative fees, net(7)		—			—
Percent of average daily balance(2)		0.0	%		0.0	%
Interest on loans, net	$	1,177,732			835,980
Percent of average daily balance(2)		8.4	%		8.5	%
Provision for loan losses	$	—			—
Percent of average daily balance(2)		0.0	%		0.0	%
Total operations expense(7)	$	39,954			25,349
Net Income(7)	$	1,142,489			816,820
Percent of average members’ capital(3)(4)		6.6	%		7.0	%
Member Distributions	$	1,090,347			757,355
Percent of average members’ capital(3)(5)		6.3	%		6.7	%
Members’ capital, gross – end of period balance	$	69,816,123			49,470,244
Members’ capital, gross – average balance	$	68,468,000			46,323,000
Member Redemptions(6)	$	403,400			400,310

(1) Stated note interest rate, weighted daily average (annualized)

(2) Percent of secured loans – average daily balance (annualized)

(3) Percent of members’ capital, gross – average daily balance (annualized)

(4) Percent based on the net income available to members (excluding 1% allocated to manager)

(5) Members Capital Distributed is net of O&O costs allocated to members during the year

(6) Scheduled member redemptions as of March 31, 2018 were $393,124 payable between 2018 and 2021. Scheduled member redemptions as of March 31, 2017 were $33,152, payable in 2017.

(7) See Note 3 (Manager and Other Related Parties) to the financial statements included in Part I, Item 1 of this report for a detailed discussion on fees waived and costs absorbed by the manager, which presentation is incorporated by this reference into this Item 2

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Secured loans

The secured loan balance at March 31, 2018 of $57,865,391 was an increase of approximately 33.0% ($14.4 million) over 2017’s $43,494,606. The increased balance of the secured loan portfolio is due to the 1) increased balance of members’ capital which provides additional capital for funding loans, and 2) the favorable economic environment generally and to increased investment in California real estate markets specifically, both of which expands the opportunity for new loans. Secured loans as a percent of member’s capital (based on average balances) was 81.4% and 85.2% for three months ended March 31, 2018 and 2017, respectively.

Loans generally are funded at a fixed interest rate with a loan term of up to five years. Loans acquired are generally done so within the first six months of origination, and purchased at the current par value, which approximates fair value. As of March 31, 2018, 87 of the company’s 93 loans (representing 98% of the aggregate principal of the company’s loan portfolio) had a loan term of five years or less from loan inception. The remaining loans had terms longer than five years. Substantially all loans are written without a prepayment-penalty provision. As of March 31, 2018, 69 loans outstanding (representing 67% of the aggregate principal balance of the company’s loan portfolio) provide for monthly payments of principal and interest, typically calculated on a 30-year amortization, with the remaining principal balance due at maturity. The remaining loans provide for monthly payments of interest only, with principal due in full at maturity.

We have sought to exercise strong discipline in underwriting loan applications and lending against collateral at amounts that create a mortgage portfolio that has substantial protective equity (i.e., safety margins to outstanding debt) as indicated by the overall conservative weighted average loan-to-value ratio (LTV) which at March 31, 2018 was approximately 53.7%. Thus, per the appraisal-based valuations at the time of loan inception, borrowers have, in the aggregate, equity of 46.3% in the property, and we as lenders have lent in the aggregate 53.7%% (including other senior liens on the property) against the properties we hold as collateral for the repayment of our loans.

See Note 4 (Loans) to the financial statements included in Part I, Item 1 of this report for detailed presentations on the secured loan portfolio and on the allowance for loan losses, which presentations are incorporated by this reference into this Item 2.

Performance overview

Revenue from the interest on loans, net for the three months ended March 31, 2018 increased by approximately $342,000, over the same period in 2017, due to the increased average loan balance of the secured loan portfolio. Operations expense for the three months ended March 31, 2018 increased by approximately $15,000, over the same period in 2017 due primarily to the timing of professional services rendered, certain increased compliance expenses, and an increase in mortgage servicing fees due to an increased loan portfolio. In all periods presented, the manager, at its sole discretion, provided significant support to the company which affected the net income and the return to investors.

Since commencement of our operations in 2009, to enhance our earnings and cash from operations, our manager has taken several actions, including:

• charging less than the maximum allowable fees;

• not requesting reimbursement of qualifying expenses; and/or,

• paying our expenses, such as professional fees, that could have been our obligations.

Such fee waivers and cost actions were not made for the purpose of providing us with sufficient funds to satisfy withdrawal requests, nor to meet any required level of distributions, as we have no such required level of distributions. Any decision to waive fees and/or to absorb costs, and the amount (if any) to be waived or absorbed, is made by our manager in its sole discretion. Total support provided, as detailed below, was $627,755 and $400,624 for the three months ended March 31, 2018 and 2017, respectively. Going forward, this support will be reduced and RMC expects support will ultimately cease, as discussed below. See Note 3 (Manager and Other Related Parties) to the financial statements included in Part I, Item I of this report for a detailed discussion on fees waived and costs absorbed by the manager, which presentation is incorporated by this reference into this Item 2.

Commencing in April 2018, our manager will no longer pay for our direct our expenses, and intends, by the fourth quarter of 2018, to begin reducing fee waivers and commence collecting reimbursable expenses, so that by July 2019 all financial support will end. In March 2018, we reduced our net distribution rate from 6.5% to 6.0%. As financial support from our manager begins to decrease in April 2018 and eventually ceases, distribution rates will correspondingly decrease further unless interest rates on loans rise and/or other revenue opportunities, such as loan sales to third parties, materialize, as discussed below. As of the date of this report, we have not engaged in any loan sales to third parties.

We, along with our manager, are working with a nationally renowned professional services firm to commence selling loans, which we believe we will be able to sell at a premium (i.e. profit to par). Any gain on loan sales would generate additional revenue for us and may allow us to pay fees and expenses owed to our manager without further reducing the distribution rate. Potential additional revenue from premiums generated through loan sales would provide a buffer to the expenses we will absorb after our manager

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decreases and eventually ceases providing financial support. To engage in loan sales, the dollar amount of pending loan applications meeting our investment criteria must exceed the capital available to lend. We cannot estimate when or if this will be the case; thus, we cannot estimate the extent of loan sales we may achieve, in number or value, or if we will sell any loans at all.

Our distribution rate will fluctuate and could decrease depending on:

• loan origination volumes;

• the timing and gains received from loan sales; and

• the effects of future interest rates negotiated with borrowers.

Notwithstanding potential loan sales, we will attempt to be fully invested in loans in the future but we cannot guarantee that we will be able do to so.

For the three months ended March 31, 2018, earnings (estimated) allocated to member accounts was $1,160,555 and net income available to members (actual) was $1,131,064. The difference between earnings allocated and net income available to members of $29,491 is anticipated to be offset in the remaining quarters of 2018.

Analysis and discussion of income from operations 2018 v. 2017

Significant changes to revenue and expenses during 2018 and 2017 are summarized in the following table.

	Interest on loans, net			Provision For Loan Losses		Operations Expense			Net Income
For the three months ended
March 31, 2018	$	1,177,732			—		39,954			1,142,489
March 31, 2017		835,980			—		25,349			816,820
Change	$	341,752			—		14,605			325,669
Change
Loan Balance Increase	$	350,307			—		10,874			339,433
Loan Portfolio Effective Yield Rate		(8,555	)		—		—			(8,555	)
Late Fees		—			—		—			(1,478	)
Capital Balance Increase		—			—		127,954			(127,954	)
Managers Fees/Costs Waived		—			—		(127,954	)		127,954
Manager Reimbursements		—			—		3,731			(3,731	)
Change	$	341,752			—		14,605			325,669

The table above displays only significant changes to net income for the period, and is not intended to cross foot.

See Note 3 (Manager and Other Related Parties) to the financial statements included in Part I, Item 1 of this report for a detailed discussion on fees waived and costs absorbed by the manager, which presentation is incorporated by this reference into this Item 2. See “Performance Overview” for a discussion of RMC’s plans to reduce and eventually eliminate fee waivers and cost absorptions.

Interest on loans, net

Interest on loans increased by $341,752 due to growth of the secured loan portfolio. The portfolio has a strong payment history, with one loan currently designated as impaired. The Secured loans – average daily balance at March 31, 2018 increased approximately $16.3 million, or approximately 41.2%, over the average daily balance at March 31, 2017. 

Provision for loan losses

At March 31, 2018 and 2017, the company had not recorded an allowance for loan losses as all loans had protective equity such that at March 31, 2018 and 2017, collection was deemed probable for amounts owing.

Total principal amounts past due more than 90 days at March 31, 2018 and 2017 were $139,162 and $0, respectively.

Operations expense

Operations expense as a percent of interest on loans, net was approximately 3.4% and 3.0% for the three months ended March 31, 2018 and 2017, respectively, as RMC provided, at its sole discretion, financial support by fee waiver, paying company expenses (such as professional fees) that could have been obligations of the company, and by not passing on expenses that qualified as reimbursable to RMC.

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Going forward, this support will be reduced and RMC expects support will ultimately cease. As discussed above, beginning in April 2018, RMC will no long pay for our direct expenses, and intends, by the fourth quarter of 2018, to being reducing fee waivers and commence collecting reimbursable expenses so that by July 2019 we will be paying RMC the fees it is entitled to under the operating agreement and reimbursing RMC for expenses attributed to us.

Significant changes to operations expense during 2018 and 2017, are summarized in the following table.

	Mortgage Servicing Fees		Asset Management Fees, net			Costs From RMC, net			Professional Services, net		Other			Total
For the three months ended
March 31, 2018	$	35,184		—			—			4,685		85			39,954
March 31, 2017		24,310		—			—			—		1,039			25,349
Change	$	10,874		—			—			4,685		(954	)		14,605
Change
Loan Balance Increase	$	10,874		—			—			—		—			10,874
Capital Balance Increase		—		41,410			86,544			—		—			127,954
Managers Fees/Costs Waived		—		(41,410	)		(86,544	)		—		—			(127,954	)
Manager Reimbursements		—		—			—			4,685		(954	)		3,731
Change	$	10,874		—			—			4,685		(954	)		14,605

See Note 3 (Manager and Other Related Parties) to the financial statements included in Part I, Item 1 of this report for a detailed discussion on fees waived and costs absorbed by the manager, which presentation is incorporated by this reference into this Item 2. See “Performance Overview” for a discussion of RMC’s plans to reduce and eventually eliminate fee waivers and cost absorptions.

•Mortgage servicing fees

The increase in mortgage servicing fees of $10,874 was consistent with the increase in the average daily secured loan portfolio to $55,758,000, noted above in Key Performance Indicators, at the annual rate of 0.25%.

•Asset management fees

The total amount of asset management fees chargeable were $127,844 and $86,434 for the three months ended March 31, 2018 and 2017, respectively. Of the total amount chargeable, RMC, at its sole discretion, waived all asset management fees for the three months ended March 31, 2018 and 2017, respectively.

•Costs through RMC

Costs incurred by RMC, for which reimbursement could have been requested were $184,149 and $97,605 for the three months ended March 31, 2018 and 2017, respectively. RMC, at its sole discretion, waived all reimbursements for the three months ended March 31, 2018 and 2017, respectively.

•Professional services

Professional services consist primarily of legal, audit and tax compliance expenses. The increase in professional services for three months ended March 31, 2018 and 2017, was due primarily to the timing of professional services rendered and an increase in certain compliance expenses.

29

Members' capital, cash flows and liquidity

Cash flows by business activity are presented in the following table for the three months ended March 31.

	2018			2017
Members’ capital
Contributions by members, net	$	4,348,762		$	4,542,913
Organization and offering costs, net		(131,500	)		(166,756	)
Formation loan, net		(357,794	)		(315,951	)
Distributions and redemptions, net		(895,469	)		(734,950	)
Cash – members’ capital, net		2,963,999			3,325,256
Loan principal/advances/interest
Principal collected	$	12,739,617		$	5,236,520
Interest received, net		1,164,191			846,782
Other loan income		4,711			6,189
Loan funding & advances, net		(9,949,148	)		(8,616,874	)
Loans acquired from affiliates		(5,889,819	)		—
Cash – loans, net		(1,930,448	)		(2,527,383	)
Operations expense		(2,453	)		(24,476	)
Net change in cash	$	1,031,098		$	773,397

The table below shows the breakout of distributions for three months ended March 31, 2018 and 2017.

	2018			2017
DRIP	$	598,278		$	422,715
Cash		492,069			334,640
Total	$	1,090,347		$	757,355
Percent of members’ capital, electing cash distribution		45	%		44	%

The table below shows the company’s unit redemptions for three months ended March 31, 2018 and 2017.

	2018		2017
Capital redemptions-without penalty	$	316,050	$	378,288
Capital redemptions-subject to penalty		87,350		22,022
Total	$	403,400	$	400,310

Scheduled redemptions at March 31, 2018 were $393,124, to be paid between 2018 and 2021.

The ongoing sources of funds for loans are the proceeds (net of redemption of members’ capital) from:

• sale of members’ units (net of reimbursement to RMC of organization and offering expenses), including units sold by reinvestment of distributions;

• loan payoffs;

• borrowers’ monthly principal and interest payments; and

• to a lesser degree and, if obtained, a line of credit.

The company’s loans generally have shorter maturity terms than typical mortgages. As a result, constraints on the ability of our borrowers to refinance their loans at maturity possibly would have a negative impact on their ability to repay their loans. In the event a borrower is unable to repay at maturity, the company may consider extending the term through a loan modification or foreclosing on the property. A reduction in loan repayments would reduce the company’s cash flows and restrict the company’s ability to invest in new loans and/or, if ongoing for an extended period, provide earnings distributions and redemptions of members’ capital.

30

Generally, within a broad range, the company’s rates on mortgage loans is not affected by market movements in interest rates. If, as expected, we continue to make and invest in fixed rate loans primarily, and interest rates were to rise, a possible result would be lower prepayments of the company’s loans. This increase in the duration of time loans are on the books may reduce overall liquidity, which itself may reduce the company’s investment into new loans at higher interest rates. Conversely, if interest rates were to decline, we could see a significant increase in borrower prepayments. If we then invest in new loans at lower rates of interest, a lower yield to members may possibly result.

Contractual obligations

The company had two contractual obligations as of March 31, 2018.

• To reimburse RMC for O&O expenses (as of March 31, 2018, $3,210,028 was to be reimbursed to RMC) contingent upon future sales of units; and

• Redemptions of members' capital scheduled of $393,124, to be paid between 2018 and 2021.

See Note 3 (Manager and Other Related Parties) and Note 5 (Commitments and Contingencies, Other Than Loan Commitments) to the financial statements included in Part I, Item 1 of this report for a detailed presentation on commitments and contingencies, which presentation is incorporated by this reference into this Item 2.

At March 31, 2018, the company had no construction or rehabilitation loans outstanding.

The Company has no off-balance sheet arrangements as such arrangements are not permitted by the operating agreement.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not included because the company is a smaller reporting company.

Item 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The company is externally managed by RMC. The manager is solely responsible for managing the business and affairs of the company, subject to the voting rights of the members on specified matters. The manager acting alone has the power and authority to act for and bind the company. RMC provides the personnel and services necessary for us to conduct our business, as we have no employees of our own.

As a limited liability company, we do not have a board of directors, nor, therefore, do we have an audit committee of the board of directors. Thus, there is not conventional independent oversight of the company’s financial reporting process. The manager, however, provides the equivalent functions of a board of directors and of an audit committee for, among other things, the following purposes:

• Appointment; compensation, and review and oversight of the work of our independent public accountants; and

• establishing and maintaining internal controls over our financial reporting.

RMC, as the manager, carried out an evaluation, with the participation of RMC's President (acting as principal executive officer/principal financial officer) of the effectiveness of the design and operation of the manager's controls and procedures over financial reporting and disclosure (as defined in Rule 13a-15 of the Exchange Act) for and as of the end of the period covered by this report. Based upon that evaluation, RMC's principal executive officer/principal financial officer concluded that the manager's disclosure controls and procedures were effective.

Changes to Internal Control Over Financial Reporting

There have not been any changes in internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, the manager’s or company’s internal control over financial reporting.

31

PART II – OTHER INFORMATION

ITEM 1. Legal Proceedings

In the normal course of business, the company may become involved in various legal proceedings such as assignment of rents, bankruptcy proceedings, appointment of receivers, unlawful detainers, judicial foreclosure, etc. to enforce the provisions of the deeds of trust, collect the debt owed under the promissory notes or protect or recoup its investment from the real property secured by the deeds of trust and to resolve disputes between borrowers, lenders, lien holders and mechanics. None of these actions typically would be of any material importance.  As of March 31, 2018, the company was not involved in any legal proceedings other than those that would be considered part of the normal course of business.

ITEM 1A. Risk Factors

There have been no material changes to the risk factors set forth in the “Risk Factors” section of the Prospectus filed with the SEC on May 1, 2018.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

Recent Sales of Unregistered Securities

There were no sales of securities by the company which were not registered under the Securities Act of 1933.

Use of Proceeds from Registered Securities

On June 6, 2016, the company’s Registration Statement on Form S-11 filed with the SEC (SEC File No. 333-208315) to offer up to 120,000,000 units ($120,000,000) to the public and 20,000,000 units ($20,000,000) to its members pursuant to the DRIP became effective and is effective for up to three (3) years thereafter. The registration statement was amended on May 1, 2018. As of March 31, 2018, we had sold approximately 74,234,000 units – 39,407,000 units under our previous registration statements and 34,827,000 units under our 2016 registration statement. Correspondingly, gross proceeds from unit sales at $1 per unit (including units issued under our distribution reinvestment plan) approximately– $39,407,000 and $34,827,000, respectively.

The units have been registered pursuant to Section 12(g) of the Exchange Act.  Such registration of the units, along with the satisfaction of certain other requirements under ERISA, enables the units to qualify as “publicly-offered securities” for purposes of ERISA and regulations issued thereunder. By satisfying those requirements, the underlying assets of the company should not be considered assets of a “benefit plan investor” (as defined under ERISA) by virtue of the investment by such benefit plan investor in the units.

The following summarizes the proceeds from sales of units from inception (October 2009) through March 31, 2018.

	Proceeds
From investors - admitted	$	67,106,564
From members under our DRIP		6,830,872
From premiums paid by RMC(1)		296,209
Total proceeds from unit sales	$	74,233,645

(1) If a member acquired units through an unsolicited sale, the member’s capital account is credited with their capital contribution plus a premium paid by RMC equal to the amount of the sales commissions that otherwise would have been paid to a broker-dealer by RMC.  This amount is reported in the year paid as taxable income to the member.

The proceeds from the sales of the units will not be segregated but will be commingled with the company’s cash. The ongoing sources of funds for loans are the proceeds from (1) sale of units, including units sold by reinvestment of distributions, (2) loan payoffs, (3) borrowers’ monthly principal and interest payments, and (4) to a lesser degree and, if obtained, a line of credit. Cash generated from loan payoffs and borrower payments of principal and interest is used for operating expenses, reimbursements to RMC of organization and offering expenses, and unit redemptions. The cash flow, if any, in excess of these uses is reinvested in new loans.

For a description of the formation loan advances made by RMI IX to RMC from offering proceeds to pay B/D sales commissions, see Note 3 (Manager and other Related Parties) to the financial statements included in Part I, Item 1 of this report, which information is incorporated by reference in this Item 2.

Redemptions are made once a quarter, on the last business day of the quarter. Redemptions for the three months ended March 31, 2018 were $403,400. The unit redemption program is ongoing and available to members beginning one year after the purchase of the units.  The maximum number of units that may be redeemed in any year and the maximum amount of redemption available in any period to members are subject to certain limitations.

32

ITEM 3. Defaults Upon Senior Securities

Not Applicable.

ITEM 4. Mine Safety Disclosures

Not Applicable.

ITEM 5. Other Information

None.

ITEM 6. Exhibits

Exhibit No.	Description of Exhibits
31.1	Certification of Manager pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Manager pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

33

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.

	REDWOOD MORTGAGE INVESTORS IX, LLC
	(Registrant)
Date:  May 11, 2018	By:	Redwood Mortgage Corp., Manager
		By:	/s/ Michael R. Burwell
		Name:	Michael R. Burwell
		Title:	President, Secretary and Treasurer
			(On behalf of the registrant, and in the capacity of principal financial officer)

34

EX-31.1

Exhibit 31.1

PRESIDENT’S CERTIFICATION

I, Michael R. Burwell, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Redwood Mortgage Investors IX, LLC, a Delaware limited liability company (the “Registrant”);

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 officers 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 15-d-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 officers 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.

/s/ Michael R. Burwell

Michael R. Burwell, President,

(principal executive officer and principal financial officer)

Redwood Mortgage Corp.,

Manager

May 11, 2018

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Redwood Mortgage Investors IX, LLC (the “company”) on Form 10-Q for the period ended March 31, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), pursuant to 18 U.S.C. (S) 1350, as adopted pursuant to (S) 906 of the Sarbanes-Oxley Act of 2002, I, Michael R. Burwell, certify that to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the company at the dates and for the periods indicated.

A signed original of this written statement required by Section 906 has been provided to Redwood Mortgage Investors IX, LLC and will be retained by Redwood Mortgage Investors IX, LLC and furnished to the Securities and Exchange Commission or its staff upon request.

/s/ Michael R. Burwell

Michael R. Burwell, President,

(principal executive officer and principal financial officer)

Redwood Mortgage Corp.,

Manager

May 11, 2018

XML

Document and Entity Information	3 Months Ended
	Mar. 31, 2018 shares
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q1
Trading Symbol	CK0001448038
Entity Registrant Name	Redwood Mortgage Investors IX
Entity Central Index Key	0001448038
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding	0

XML

Balance Sheets - USD ($)	Mar. 31, 2018	Dec. 31, 2017
ASSETS
Cash and cash equivalents	$ 9,540,950	$ 8,509,852
Loans
Principal	57,865,391	54,768,689
Advances	16,637	13,989
Accrued interest	426,538	409,867
Loan balances secured by deeds of trust	58,308,566	55,192,545
Loan administrative fees, net	5,878	9,008
Total loans	58,314,444	55,201,553
Total assets	67,855,394	63,711,405
Liabilities
Accounts payable and accrued liabilities	36,139	180
Investors in applicant status	4,415,358	3,270,312
Members’ capital, net	67,537,728	64,218,001
Receivable from manager (formation loan)	(4,133,831)	(3,777,088)
Members’ capital, net, less formation loan	63,403,897	60,440,913
Total liabilities, investors in applicant status and members’ capital	$ 67,855,394	$ 63,711,405

XML

Statements of Income (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Revenues, net
Interest income	$ 1,177,732	$ 835,980
Late fees	4,711	6,189
Total revenues	1,182,443	842,169
Operations Expense
Mortgage servicing fees	35,184	24,310
Professional services, net (Note 3)	4,685
Other	85	1,039
Total operations expense	39,954	25,349
Net income	1,142,489	816,820
Members (99%)	1,131,064	808,652
Managers (1%)	$ 11,425	$ 8,168

XML

Statements of Income (Unaudited) (Parenthetical)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Income Statement [Abstract]
Members investment	99.00%	99.00%
Managers investment	1.00%	1.00%

XML

Statement of Changes in Members' Capital (Unaudited) - USD ($)		3 Months Ended	102 Months Ended
		Mar. 31, 2018	Mar. 31, 2018
Beginning balance		$ 60,440,913
Net income		1,142,489
Early withdrawal penalties	[1]	696	$ 19,211
Ending balance		63,403,897	63,403,897
Investors In Applicant Status [Member]
Beginning balance		3,270,312
Early withdrawal penalties		0
Ending balance		4,415,358	4,415,358
Investors In Applicant Status [Member] | Contributions On Application [Member]
Partners capital accounts		4,313,438
Investors In Applicant Status [Member] | Contributions Admitted To Members Capital
Partners capital accounts		(3,193,207)
Investors In Applicant Status [Member] | Premiums Paid On Application By RMC [Member]
Partners capital accounts		31,920
Investors In Applicant Status [Member] | Premiums Admitted To Members Capital
Partners capital accounts		(7,105)
Capital Members [Member]
Beginning balance		66,450,424
Net income		1,131,064
Organization and offering expenses allocated		(70,208)
Early withdrawal penalties		0
Ending balance		69,816,123	69,816,123
Capital Members [Member] | Contributions Admitted To Members Capital
Partners capital accounts		3,193,207
Capital Members [Member] | Premiums Admitted To Members Capital
Partners capital accounts		7,105
Capital Members [Member] | Earnings Distributed To Members [Member]
Partners capital accounts		(1,090,347)
Capital Members [Member] | Earnings Distributed Used In DRIP [Member]
Partners capital accounts		598,278
Capital Members [Member] | Member's Redemptions [Member]
Partners capital accounts		(403,400)
Managers Capital Net [Member]
Beginning balance		102,902
Net income		11,425
Early withdrawal penalties		0
Ending balance		117,527	117,527
Managers Capital Net [Member] | Contributions Admitted To Members Capital
Partners capital accounts		3,200
Unallocated Syndication Costs Members [Member]
Beginning balance		(2,335,325)
Organization and offering expenses		(143,694)
Organization and offering expenses allocated		70,208
Early withdrawal penalties		696
Ending balance		(2,395,922)	(2,395,922)
Unallocated Syndication Costs Members [Member] | Manager Reimbursement [Member]
Partners capital accounts		12,193
Members Capital, Net [Member]
Beginning balance		64,218,001
Net income		1,142,489
Organization and offering expenses		(143,694)
Early withdrawal penalties		696
Ending balance		67,537,728	$ 67,537,728
Members Capital, Net [Member] | Contributions Admitted To Members Capital
Partners capital accounts		3,196,407
Members Capital, Net [Member] | Premiums Admitted To Members Capital
Partners capital accounts		7,105
Members Capital, Net [Member] | Earnings Distributed To Members [Member]
Partners capital accounts		(1,090,347)
Members Capital, Net [Member] | Earnings Distributed Used In DRIP [Member]
Partners capital accounts		598,278
Members Capital, Net [Member] | Member's Redemptions [Member]
Partners capital accounts		(403,400)
Members Capital, Net [Member] | Manager Reimbursement [Member]
Partners capital accounts		$ 12,193

[1] Early withdrawal penalties collected are applied to the next installment of principal due under the formation loan and to reduce the amount owed to RMC for O&O expenses. The amounts credited will be determined by the ratio between the amount of the formation loan and the amount of offering costs incurred by the company.

XML

Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Operations
Interest received	$ 1,161,061	$ 837,318
Other loan income	4,711	6,189
Loan administrative fee reimbursed (paid)	3,130	9,464
Operations expense	(2,453)	(24,476)
Net cash provided by (used in) operating activities	1,166,449	828,495
Investing – loan principal/advances
Principal collected on loans	12,739,617	5,236,520
Loans originated	(9,946,500)	(8,607,733)
Loans acquired from affiliates	(5,889,819)
Advances (made) received on loans	(2,648)	(9,141)
Total cash provided by (used in) investing	(3,099,350)	(3,380,354)
Contributions by members, net
Organization and offering expenses paid, net	(131,500)	(166,756)
Formation loan funding	(357,794)	(315,951)
Total cash provided by members, net	3,859,468	4,060,206
Distributions to members
Distributions to Member	(895,469)	(734,950)
Total cash provided by (used in) financing	2,963,999	3,325,256
Net increase (decrease) in cash	1,031,098	773,397
Cash, beginning of period	8,509,852	2,194,854
Cash, end of period	9,540,950	2,968,251
Net income	1,142,489	816,820
Change in operating assets and liabilities
Accrued interest	(16,672)	1,338
Loan administrative fees reimbursed (paid)	3,130	9,464
Accounts payable	35,754
Other	1,748	873
Total adjustments	23,960	11,675
Net cash provided by (used in) operating activities	1,166,449	828,495
Members Equity Contributions [Member]
Contributions by members, net
Contributions by members/manager	4,348,762	4,542,913
Earnings Distributed To Members [Member]
Distributions to members
Distributions to Member	(492,069)	(334,640)
Member's Redemptions [Member]
Distributions to members
Distributions to Member	$ (403,400)	$ (400,310)

XML

Organization and General

3 Months Ended

Mar. 31, 2018

Accounting Policies [Abstract]

Organization and General

NOTE 1 – ORGANIZATION AND GENERAL

In the opinion of the manager, the accompanying unaudited financial statements contain all adjustments, consisting of normal, recurring adjustments, necessary to present fairly the financial information included therein. These financial statements should be read in conjunction with the audited financial statements included in the company’s Form 10-K for the fiscal year December 31, 2017 filed with the U.S. Securities and Exchange Commission (SEC). The results of operations for the three month period ended March 31, 2018 are not necessarily indicative of the operations results to be expected for the full year.

Redwood Mortgage Investors IX, LLC (RMI IX or the company) is a Delaware limited liability company formed in October 2008 to engage in business as a mortgage lender and investor by making and holding-for-investment mortgage loans secured by California real estate, primarily through first and second deeds of trust.

The company’s primary investment objectives are to:

• yield a favorable rate of return from the company’s business of making and/or investing in loans;

• preserve and protect the company’s capital by making and/or investing in loans secured by California real estate, preferably income-producing properties geographically situated in the San Francisco Bay Area and the coastal metropolitan regions of Southern California; and,

• generate and distribute cash flow from these mortgage lending and investing activities.

The ongoing sources of funds for loans are the proceeds (net of redemption of members’ capital) from:

• sale of members’ units (net of reimbursement to RMC of organization and offering expenses), including units sold by reinvestment of distributions;

• loan payoffs;

• borrowers’ monthly principal and interest payments; and,

• to a lesser degree and, if obtained, a line of credit.

Profits and losses are allocated among the members according to their respective capital accounts monthly after one percent (1%) of the profits and losses are allocated to the manager. The monthly results are subject to subsequent adjustment as a result of quarterly and year-end accounting and reporting. Investors should not expect the company to provide tax benefits of the type commonly associated with limited liability company tax shelter investments. Federal and state income taxes are the obligation of the members, if and when taxes apply, other than the annual California franchise tax and any California LLC cash receipts taxes paid by the company.

The company is externally managed by Redwood Mortgage Corp. (RMC or the manager). The manager is solely responsible for managing the business and affairs of the company, subject to the voting rights of the members on specified matters. The manager acting alone has the power and authority to act for and bind the company. RMC provides the personnel and services necessary for us to conduct our business as we have no employees of our own. The mortgage loans the company funds and/or invests in are arranged and generally are serviced by RMC. The manager is required to contribute to capital one tenth of one percent (0.1%) of the aggregate capital accounts of the members.

The rights, duties and powers of the members and manager of the company are governed by the company’s operating agreement, the Delaware Limited Liability Company Act and the California Revised Uniform Limited Liability Company Act. Members should refer to the company’s operating agreement for complete disclosure of its provisions. Members representing a majority of the outstanding units may, without the concurrence of the managers, vote to: (i) dissolve the company, (ii) amend the operating agreement, subject to certain limitations, (iii) approve or disapprove the sale of all or substantially all of the assets of the company or (iv) remove or replace one or all of the managers. Where there is only one manager, a majority in interest of the members is required to elect a new manager to continue the company business after a manager ceases to be a manager due to its withdrawal.

Distribution policy

Cash available for distribution at the end of each calendar month is allocated ninety-nine percent (99%) to the members and one percent (1%) to the manager. Cash available for distribution means cash flow from operations (excluding repayments for loan principal and other capital transaction proceeds) less amounts set aside for creation or restoration of reserves. The manager may withhold from cash available for distribution otherwise distributable to the members with respect to any period the respective amounts of organization and offering expenses allocated to the members for the applicable period pursuant to the company’s reimbursement and allocation of organization and offering expenses policy. Per the terms of the company’s operating agreement, cash available for distribution allocated to the members is allocated among the members in proportion to their percentage interests (except with respect to differences in the amounts of organization and offering expenses allocated to the respective members during the applicable period) and in proportion to the number of days during the applicable month that they owned such percentage interests.

Cash available for distributions allocable to members, other than those participating in the distribution reinvestment plan (DRIP) and the manager, is distributed at the end of each calendar month. Cash available for distribution allocable to members who participate in the DRIP is used to purchase additional units at the end of each calendar month. The manager’s allocable share of cash available for distribution is also distributed not more frequently than with cash distributions to members.

To determine the amount of cash to be distributed in any specific month, the company relies in part on its annual forecast of profits, which takes into account the difference between the forecasted and actual results in the year and the requirement to maintain a cash reserve. For the three months ended March 31, 2018, earnings (estimated) allocated to member accounts was $1,160,555 and net income available to members (actual) was $1,131,064. The difference between earnings allocated and net income available to members of $29,491 is anticipated to be offset in the remaining quarters of 2018.

Distribution reinvestment plan

The DRIP provision of the operating agreement permits members to elect to have all or a portion of their monthly distributions reinvested in additional units. Members may withdraw from the DRIP with written notice.

Liquidity and unit redemption program

Because there are substantial restrictions on transferability of units, there is no established public trading and/or secondary market for the units and none is expected to develop. In order to provide liquidity to members, the company’s operating agreement includes a unit redemption program, whereby beginning one year from the date of purchase of the units, a member may redeem all or part of their units, subject to certain limitations.

The price paid for redeemed units is based on the lesser of the purchase price paid by the redeeming member or the member’s capital account balance as of the date of each redemption payment. Redemption value is calculated based on the period from date of purchase as follows:

• after one year, 92% of the purchase price or of the capital account balance, whichever is less;

• after two years, 94% of the purchase price or of the capital account balance, whichever is less;

• after three years, 96% of the purchase price or of the capital account balance, whichever is less;

• after four years, 98% of the purchase price or of the capital account balance, whichever is less;

• after five years, 100% of the purchase price or of the capital account balance, whichever is less.

The company redeems units quarterly, subject to certain limitations as provided for in the operating agreement. The number of units that may be redeemed per quarter per individual member is subject to a maximum of the greater of 100,000 units or 25% of the member’s units outstanding. For redemption requests requiring more than one quarter to fully redeem, the percentage discount amount that, if any, applies when the redemption payments begin continues to apply throughout the redemption period and applies to all units covered by such redemption request regardless of when the final redemption payment is made.

The company has not established a cash reserve from which to fund redemptions. The company’s capacity to redeem units upon request is limited by the availability of cash and the company’s cash flow. The company will not, in any calendar year, redeem more than five percent (5%) of the weighted average number of units outstanding during the twelve-month period immediately prior to the date of the redemption.

Contributed capital

The manager is required to contribute to capital one tenth of one percent (0.1%) of the aggregate capital accounts of the members.

Manager’s interest

If a manager is removed, withdrawn or terminated, the company will pay to the manager all amounts then accrued and owing to the manager. Additionally, the company will terminate the manager’s interest in the company’s profits, losses, distributions and capital by payment of an amount in cash equal to the then-present fair value of such interest. The formation loan is forgiven if the manager is removed and RMC is no longer receiving payments for services rendered.

Unit sales commissions paid to broker-dealers/formation loan

Commissions for unit sales to be paid to broker-dealers (B/D sales commissions) are paid by RMC and are not paid directly by the company out of offering proceeds. Instead, the company advances to RMC, from offering proceeds, amounts sufficient to pay the B/D sales commissions and premiums to be paid to investors. Such advances in total may not exceed seven percent (7%) of offering proceeds. The receivable arising from the advances is unsecured, and non-interest bearing and is referred to as the “formation loan.” As of March 31, 2018 the company had made such advances of $5,017,741, of which $4,133,831 remains outstanding on the formation loan.

Term of the company

The term of the company will continue until 2028, unless sooner terminated as provided in the operating agreement.

Ongoing public offering of units/ SEC Registrations

Gross proceeds from sales of units from inception (October, 2009) through March 31, 2018 are summarized below.

	Proceeds
From investors - admitted	$	67,106,564
From members under our DRIP		6,830,872
From premiums paid by RMC(1)		296,209
Total proceeds from unit sales	$	74,233,645

(1) If a member acquired units through an unsolicited sale (i.e. without broker/dealer) the member’s capital account is credited with their capital contribution plus a premium paid by RMC equal to the amount of the sales commissions that otherwise would have been paid to a broker-dealer by RMC. This premium is reported in the year paid as taxable income to the member.

As of March 31, 2018, we had sold approximately 74,234,000 units– 39,407,000 units under our previous registration statements and approximately 34,827,000 units under our current registration statement which was effective on June 6, 2016. Correspondingly, gross proceeds from unit sales at $1 per unit (including units issued under our distribution reinvestment plan) were approximately $39,407,000 and $34,827,000, respectively.

Use of Proceeds from sale of units

We will use the proceeds from the sale of the units to:

• make additional loans;

• fund working capital reserves;

• pay RMC up to 4.5% of  proceeds from sale of units for organization and offering expenses; and,

• fund a formation loan to RMC at up to 7% of proceeds from sale of units.  

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2018

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).

Management estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions about the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities, at the dates of the financial statements and the reported amounts of revenues and expenses during the reported periods. Such estimates relate principally to the determination of the allowance for loan losses, including, when applicable, the valuation of impaired loans (which itself requires determining the fair value of the collateral), and the valuation of real estate held for sale and held as investment, at acquisition and subsequently. Actual results could differ significantly from these estimates.

Fair value estimates

GAAP defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets and liabilities; it is not a forced transaction. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact and (iv) willing to transact.

Fair values of assets and liabilities are determined based on the fair-value hierarchy established in GAAP. The hierarchy is comprised of three levels of inputs to be used:

• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the company has the ability to access at the measurement date. An active market is a market in which transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

• Level 2 inputs are inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly in active markets and quoted prices for identical assets or liabilities that are not active, and inputs other than quoted prices that are observable or inputs derived from or corroborated by market data.

• Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs reflect the company’s own assumptions about the assumptions market participants would use in pricing the asset or liability (including assumptions about risk). Unobservable inputs are developed based on the best information available in the circumstances and may include the company’s own data.

The fair value of the collateral is determined by exercise of judgment based on management’s experience informed by appraisals (by licensed appraisers), brokers’ opinion of values and publicly available information on in-market transactions. Appraisals of commercial real property generally present three approaches to estimating value: 1) market comparables or sales approach; 2) cost to replace and 3) capitalized cash flows or investment approach. These approaches may or may not result in a common, single value. The market-comparables approach may yield several different values depending on certain basic assumptions, such as, determining highest and best use (which may or may not be the current use); determining the condition (e.g. as-is, when-completed or for land when-entitled); and determining the unit of value (e.g. as a series of individual unit sales or as a bulk disposition).

Management has the requisite familiarity with the real estate markets it lends in generally and of the properties lent on specifically to analyze sales-comparables and assess their suitability/applicability. Management is acquainted with market participants – investors, developers, brokers, lenders – that are useful, relevant secondary sources of data and information regarding valuation and valuation variability. These secondary sources may have familiarity with and perspectives on pending transactions, successful strategies to optimize value and the history and details of specific properties – on and off the market – that enhance the process and analysis that is particularly and principally germane to establishing value in distressed markets and/or property types.

Cash and cash equivalents

The company considers all highly liquid financial instruments with maturities of three months or less at the time of purchase to be cash equivalents. Periodically, company cash balances in banks exceed federally insured limits.

Loans and interest income

Loans generally are stated at the unpaid principal balance (principal). Management has discretion to pay amounts (advances) to third parties on behalf of borrowers to protect the company’s interest in the loan. Advances include, but are not limited to, the payment of interest and principal on a senior lien to prevent foreclosure by the senior lien holder, property taxes, insurance premiums and attorney fees. Advances generally are stated at the amounts paid out on the borrower’s behalf and any accrued interest on amounts paid out, until repaid by the borrower.

The company may fund a specific loan origination net of an interest reserve (one to two years) to insure timely interest payments at the inception of the loan. As monthly interest payments become due, the company funds the payments into the affiliated trust account. In the event of an early loan payoff, any unapplied interest reserves would be first applied to any accrued but unpaid interest and then as a reduction to the principal.

If events and or changes in circumstances cause management to have serious doubts about the collectability of the payments of interest and principal in accordance with the loan agreement, a loan may be designated as impaired. Impaired loans are included in management’s periodic analysis of recoverability. Any subsequent payments on impaired loans are applied to late fees, then to the accrued interest, then to advances, and lastly to principal.

From time to time, the company negotiates and enters into loan modifications with borrowers whose loans are delinquent. If the loan modification results in a significant reduction in the cash flow compared to the original note, the modification is deemed a troubled debt restructuring and a loss is recognized. In the normal course of the company’s operations, loans that mature may be renewed at then current market rates and terms for new loans. Such renewals are not designated as impaired, unless the renewed loan was previously designated as impaired.

Interest is accrued daily based on the principal of the loans. Impaired loans continue to recognize interest income as long as the loan is in the process of collection and is considered to be well-secured. Impaired loans are placed on non-accrual status if 180 days delinquent or at the earlier of management’s determination that the primary source of repayment will come from the foreclosure and subsequent sale of the collateral securing the loan (which usually occurs when a notice of sale is filed) or when the loan is no longer considered well-secured. When a loan is placed on non-accrual status, the accrual of interest is discontinued; however, previously recorded interest is not reversed. A loan may return to accrual status when all delinquent interest and principal payments become current in accordance with the terms of the loan agreement

Loan administrative fees paid to RMC for loans funded or invested in by the company are capitalized and amortized over the life of the loan on a straight-line method which approximates the effective interest method.

Allowance for loan losses

Loans and the related accrued interest and advances (i.e. the loan balance) are analyzed on a periodic basis for ultimate recoverability. Delinquencies are identified and followed as part of the loan system of record. Collateral fair values are reviewed quarterly and the protective equity for each loan is computed. As used herein, “protective equity” is the arithmetic difference between the fair value of the collateral, net of any senior liens, and the loan balance, where “loan balance” is the sum of the unpaid principal, advances and the recorded interest thereon. This computation is done for each loan (whether impaired or performing), and while loans secured by collateral of similar property type are grouped, there is enough distinction and variation in the collateral that a loan-by-loan, collateral-by-collateral analysis is appropriate.

For loans designated impaired, a provision is made for loan losses to adjust the allowance for loan losses to an amount such that the net carrying amount (unpaid principal less the specific allowance) is reduced to the lower of the loan balance or the estimated fair value of the related collateral, net of any senior loans and net of any costs to sell in arriving at net realizable value.

Loans determined not to be individually impaired are grouped by the property type of the underlying collateral, and for each loan and for the total by property type, the amount of protective equity or amount of exposure to loss ( i.e., the dollar amount of the deficiency of the fair value of the underlying collateral to the loan balance) is computed.

The company charges off uncollectible loans and related receivables directly to the allowance account once it is determined the full amount is not collectible.

At foreclosure any excess of the recorded investment in the loan (accounting basis) over the net realizable value is charged against the allowance for loan losses.

Real estate owned (REO)

Real estate owned, or REO, is property acquired in full or partial settlement of loan obligations generally through foreclosure, and is recorded at acquisition at the lower of the amount owed on the loan (legal basis), plus any senior indebtedness, or at the property’s net realizable value, which is the fair value less estimated costs to sell, as applicable. The fair value estimates are derived from information available in the real estate markets including similar property, and often require the experience and judgment of third parties such as commercial real estate appraisers and brokers. The estimates figure materially in calculating the value of the property at acquisition, the level of charge to the allowance for loan losses and any subsequent valuation reserves. After acquisition, costs incurred relating to the development and improvement of property are capitalized to the extent they do not cause the recorded value to exceed the net realizable value, whereas costs relating to holding and disposition of the property are expensed as incurred.  After acquisition, REO is analyzed periodically for changes in fair values and any subsequent write down is charged to operations expenses. Any recovery in the fair value subsequent to such a write down is recorded and is not to exceed the value recorded at acquisition. Recognition of gains on the sale of real estate is dependent upon the transaction meeting certain criteria related to the nature of the property and the terms of the sale including potential seller financing.

Recently issued accounting pronouncements

-Accounting and Financial reporting for Expected Credit Losses

The Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) that significantly changes how entities will account for credit losses for most financial assets that are not measured at fair value through net income. The new standard will supersede currently in effect guidance and applies to all entities. Entities will be required to use a current expected credit loss (CECL) model to estimate credit impairment. This estimate will be forward-looking, meaning management will be required to use forecasts about future economic conditions to determine the expected credit loss over the remaining life of an instrument. This will be a significant change from the current incurred credit loss model, and generally may result in allowances being recognized in earlier periods than under the current credit loss model.

RMI IX invests in real estate secured loans made with the expectation of zero credit losses as a result of substantial protective equity provided by the underlying collateral. For a loss to be recognized under the CECL or incurred loss model, if the lending/loan-to-value guidelines are followed effectively, an intervening, subsequent-to-loan-funding, event must negatively impact the value of the underlying collateral of the loan in an amount greater than the amount of protective equity provided by the collateral. Such an event would be either (or both) of:

• an uninsured event(s) specifically impacting the collateral or

• a non-temporary decline in values in the applicable real estate market.

In both of these instances the treatment would be the same in the incurred loss and CECL models of approximately the same amount.  Other than in these events, the probable of occurrence criteria of the incurred loss model is not triggered and a loss is not recognized. Further, if the zero-expected-loss lending guideline is preserved and  the protective equity provided by the collateral is not expected to be impaired over the life of the loans, then a loss is not required to be recognized under the CECL model.

This convergence between the CECL and incurred loss models as to loss recognition – as an event driven occurrence – in low LTV, real estate secured programs caused RMC to conclude that the CECL model will not materially impact the reported results of operations or financial position as compared to that which would be reported in the incurred loss model.  The manager expects to adopt the ASU for interim and annual reporting in 2020.

-Accounting and Financial Reporting for Revenue Recognition

On May 28, 2014, FASB issued a final standard on revenue from contracts with customers. The standard issued as ASU 2014-09 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The standard is effective January 1, 2018, and has been adopted using the modified retrospective approach.

The goals of the revenue recognition project are to clarify and converge the revenue recognition principles under U.S. GAAP and to develop guidance that would streamline and enhance revenue recognition requirements.  A core principle of the standard is to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services.  Revenue is recognized when a performance obligation is satisfied by transferring goods or services to a customer. The FASB intentionally used the wording “be entitled” rather than “receive” or “collect” to distinguish collectability risk from other uncertainties that may exist under a contract.

Adoption of the revenue standard did not have an impact on the company’s current revenue recognition policies since the scope of guidance is not applicable to financial instruments including loans and therefore did not have an impact on the recognition of interest income or late fees.

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Manager and Other Related Parties

3 Months Ended

Mar. 31, 2018

Related Party Transactions [Abstract]

Manager and Other Related Parties

NOTE 3 – MANAGER AND OTHER RELATED PARTIES

RMC’s allocated one percent (1%) of the profits and losses was $11,425 and $8,168 for the three months ended March 31, 2018 and 2017, respectively. The manager, at its sole discretion, provided financial support that improved net income and the return to investors in both 2018 and 2017. Total support provided, as detailed below, was approximately $628,000 and $401,000 for the three months ended March 31, 2018 and 2017, respectively.

At times, to enhance the company’s earnings, RMC has taken several actions, including:

• charging less than the maximum allowable fees;

• not requesting reimbursement of qualifying expenses; and/or,

• paying company expenses, such as professional fees, that could have been obligations of the company.

Such fee waivers and cost actions were not made for the purpose of providing the company with sufficient funds to satisfy withdrawal requests, nor to meet any required level of distributions, as the company has no such required level of distributions. RMC does not use any specific criteria in determining the exact amount of fees to be waived and/or costs to be absorbed. Any decision to waive fees and/or to absorb costs, and the amount (if any) to be waived or absorbed, is made by RMC in its sole discretion.

Going forward, this support will be reduced and RMC expects support will ultimately cease.  Beginning in April 2018, the manager will no longer pay for company expenses, and intends, by the fourth quarter of 2018, to begin reducing fee waivers and commence collecting reimbursable expenses, so that by July 2019 the company will be paying RMC the fees it is entitled to under the operating agreement and reimbursing RMC for expenses attributable to the company.  

Fees waived and costs reimbursements for the three months ended March 31, 2018 are presented in the following table.

				Operating Expenses
	Loan Admin Fees			Mortgage Servicing Fees		Asset Management Fee			Cost Reimbursements			Professional Services			Other			Total
Chargeable/reimbursable	$	158,363		$	35,184	$	127,844		$	184,149		$	147,837		$	14,332		$	667,709
RMC Support
Waived		(158,363	)		—		(127,844	)		(184,149	)		—			—			(470,356	)
Cost Absorbed by RMC		—			—		—			—			(143,152	)		(14,247	)		(157,399	)
Total RMC Support		(158,363	)		—		(127,844	)		(184,149	)		(143,152	)		(14,247	)		(627,755	)
Net charged	$	—		$	35,184	$	—		$	—		$	4,685		$	85		$	39,954

Fees waived and costs reimbursements for the three months ended March 31, 2017 are presented in the following table.

				Operating Expenses
	Loan Admin Fees			Mortgage Servicing Fees		Asset Management Fee			Cost Reimbursements			Professional Services			Other			Total
Chargeable/reimbursable	$	86,077		$	24,310	$	86,434		$	97,605		$	119,739		$	11,808		$	425,973
RMC Support
Waived		(86,077	)		—		(86,434	)		(97,605	)		—			—			(270,116	)
Cost Absorbed by RMC		—			—		—			—			(119,739	)		(10,769	)		(130,508	)
Total RMC Support		(86,077	)		—		(86,434	)		(97,605	)		(119,739	)		(10,769	)		(400,624	)
Net charged	$	—		$	24,310	$	—		$	—		$	—		$	1,039		$	25,349

•  Loan administrative fees

RMC is entitled to receive a loan administrative fee in an amount up to one percent (1%) of the principal amount of each new loan originated or acquired on the company’s behalf by RMC for services rendered in connection with the selection and underwriting of potential loans. Such fees are payable by the company upon the closing or acquisition of each loan. Beginning in August 2015, RMC, at its sole discretion, began waiving loan administrative fees.  

• Mortgage servicing fees

RMC earns mortgage servicing fees from the company of up to one-quarter of one percent (0.25%) annually of the unpaid principal balance of the loan portfolio or such lesser amount as is reasonable and customary in the geographic area where the property securing the mortgage is located. RMC is entitled to receive these fees regardless of whether specific mortgage payments are collected. The mortgage servicing fees are accrued monthly on all loans. Remittance to RMC is made monthly unless the loan has been assigned a specific loss reserve, at which point remittance is deferred until the specific loss reserve is no longer required, or the property has been acquired by the company. An increase or decrease in this fee within the limits set by the operating agreement directly impacts the yield to the members.

• Asset management fees

RMC is entitled to receive a monthly asset management fee for managing the company’s portfolio and operations in an amount up to three-quarters of one percent (0.75%) annually of the portion of the capital originally committed to investment in mortgages, not including leverage, and including up to two percent (2%) of working capital reserves. This amount will be recomputed annually after the second full year of operations by subtracting from the then fair value of the company’s loans plus working capital reserves, an amount equal to the outstanding debt.

RMC, at its sole discretion, may elect to accept less than the maximum amount of the asset management fee. An increase or decrease in this fee within the limits set by the operating agreement directly impacts the yield to the members. RMC intends to begin reducing these fee waivers by the fourth quarter of 2018.

• Costs through RMC

RMC, per the operating agreement, may request reimbursement by the company for operations expense incurred on behalf of the company, including without limitation, accounting and audit fees, legal fees and expenses, postage and preparation of reports to members and out-of-pocket general and administration expenses. Certain costs (e.g. postage) can be allocated specifically to the company. Other costs are allocated on a pro-rata basis (e.g. by the company’s percentage of total capital of all mortgage funds managed by RMC). Payroll and consulting fees are broken out first based on activity, and then allocated to the company on a pro-rata basis based on percentage of capital to the total capital of all mortgage funds.

RMC, at its sole discretion, has elected to request less than the maximum amount of reimbursement for operating expenses.  An increase or decrease in this reimbursement, within the limits set by the operating agreement, directly impacts the yield to the members. RMC intends to initiate collecting qualifying expenses by the fourth quarter of 2018.

• Professional Services

Professional services consist primarily of legal, regulatory (including SEC/FINRA compliance) and audit and tax compliance expenses.

RMC, at its sole discretion, elected to reimburse the company for professional services (primarily audit and tax expense). An increase or decrease in reimbursements by RMC directly impacts the yield to the members. Beginning in April 2018, RMC will no longer provide reimbursements to the company for professional services.

Commissions and fees are paid by the borrowers to RMC.

• Brokerage commissions, loan originations

For fees in connection with the review, selection, evaluation, negotiation and extension of loans, RMC may collect a loan brokerage commission that is expected to range from approximately 1.5% to 5% of the principal amount of each loan made during the year. Total loan brokerage commissions are limited to an amount not to exceed 4% of the total company assets per year. The loan brokerage commissions are paid by the borrowers, and thus, are not an expense of the company.

• Other fees

RMC receives fees for processing, notary, document preparation, credit investigation, reconveyance and other mortgage related fees. The amounts received are customary for comparable services in the geographical area where the property securing the loan is located, payable solely by the borrower and not by the company.

In the ordinary course of business, performing loans may be assigned, in-part or in-full, between the affiliated mortgage funds at par. During the three months ended March 31, 2018, Redwood Mortgage Investors VIII, LP, an affiliated mortgage fund, assigned to the company two performing loans in-full at par value of approximately $5,890,000. The company paid cash for the loans and the affiliated mortgage fund has no continuing obligation or involvement on the loans assigned to the company. There were no loans assigned during the three months ended March 31, 2017.

Formation loan

Formation loan transactions are presented in the following table.

	For the three months ended			Since Inception
Balance, beginning of period	$	3,777,088		$	—
Formation loan advances to RMC		357,794			5,017,741
Payments received from RMC		—			(854,077	)
Early withdrawal penalties applied		(1,051	)		(29,833	)
Balance, March 31, 2018	$	4,133,831		$	4,133,831
Subscription proceeds since inception				$	71,490,002
Formation loan advance rate					7	%

The future minimum payments on the formation loan as of March 31, 2018 are presented in the following table.

2018	$	377,709
2019		377,709
2020		377,709
2021		377,709
2022		377,709
Thereafter		2,245,286
Total	$	4,133,831

RMC is required to make annual payments on the formation loan of one tenth of the principal balance outstanding at December 31 of the prior year. The formation loan is forgiven if the manager is removed and RMC is no longer receiving payments for services rendered.

Reimbursement and allocation of organization and offering expenses

The manager is reimbursed for, or the company may pay directly, organization and offering expenses (or O&O expenses) incurred in connection with the organization of the company or offering of the units including, without limitation, attorneys’ fees, accounting fees, printing costs and other selling expenses (other than sales commissions) in a total amount not exceeding 4.5% of the original purchase price of all units (other than DRIP units) sold in all offerings (hereafter, the “maximum O&O expenses”), and the manager pays any O&O expenses in excess of the maximum O&O expenses. For each calendar quarter or portion thereof after December 31, 2015, that a member holds units (other than DRIP units) and for a maximum of forty (40) such quarters, a portion of the O&O expenses borne by the company is allocated to and debited from that member’s capital account in an annual amount equal to 0.45% of the member’s original purchase price for those units, in equal quarterly installments of 0.1125% each commencing with the later of the first calendar quarter of 2016 or the first full calendar quarter after a member’s purchase of units, and continuing through the quarter in which such units are redeemed. If at any time the aggregate O&O expenses actually paid or reimbursed by the company since inception are less than the maximum O&O expenses, the company shall first reimburse the manager for any O&O expenses previously borne by it so long as it does not result in the company bearing more than the maximum O&O expenses, and any savings thereafter remaining shall be equitably allocated among (and serve to reduce any subsequent such cost allocations to) those members who have not yet received forty (40) quarterly allocations of O&O expenses, as determined in the good faith judgment of the manager. Any O&O expenses with respect to a member’s units that remain unallocated upon redemption of such units shall be reimbursed to the company by the manager.

Organization and offering expenses (O & O expenses) are summarized in the following table.

	2018			Since Inception
Balance, January 1	$	2,335,325		$	—
O&O expenses reimbursed to RMC		143,694			3,038,308
Early withdrawal penalties applied (1)		(696	)		(19,211	)
O&O expenses allocated(2)		(70,208	)		(452,365	)
O&O expenses reimbursed by RMC (3)		(12,193	)		(170,810	)
Balance, March 31 (4)	$	2,395,922		$	2,395,922

(1) Early withdrawal penalties collected are applied to the next installment of principal due under the formation loan and to reduce the amount owed to RMC for O&O expenses. The amounts credited will be determined by the ratio between the amount of the formation loan and the amount of offering costs incurred by the company.

(2) Beginning in 2016, O&O expenses reimbursed to RMC by RMI IX are allocated to members’ capital accounts over 40 quarters

(3) RMC reimburses the company for any unallocated O&O expenses on units redeemed.

(4) Proceeds from investors admitted to RMI IX were $67,106,564 through March 31, 2018. O&O expenses incurred by RMC and remaining to be reimbursed to RMC by RMI IX were $3,210,028.

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Loans

3 Months Ended

Mar. 31, 2018

Receivables [Abstract]

Loans

NOTE 4 – LOANS

Loans generally are funded at a fixed interest rate with a loan term of up to five years.  Loans acquired are generally done so within the first six months of origination, and purchased at the current par value, which approximates fair value. As of March 31, 2018, 87 of the company’s 93 loans (representing 98% of the aggregate principal of the company’s loan portfolio) have a loan term of five years or less from loan inception. The remaining loans have terms longer than five years. Substantially all loans are written without a prepayment penalty provision. As of March 31, 2018, 69 loans outstanding (representing 67% of the aggregate principal balance of the company’s loan portfolio) provide for monthly payments of principal and interest, typically calculated on a 30-year amortization, with the remaining principal balance due at maturity. The remaining loans provide for monthly payments of interest only, with the principal balance due at maturity.

Secured loans unpaid principal balance (principal)

Secured loan transactions are summarized in the following table for the three months ended March 31, 2018.

	2018
Principal, January 1	$	54,768,689
Loans funded		9,946,500
Loans acquired from affiliates		5,889,819
Principal payments received		(12,739,617	)
Principal, March 31	$	57,865,391

During the three months ended March 31, 2018, the company renewed 4 loans, at then market terms, with an aggregate principal balance of $1,324,473, which are not included in the activity shown above.

Loan characteristics

Secured loans had the characteristics presented in the following table.

	March 31,			December 31,
	2018			2017
Number of secured loans		93			93
Secured loans – principal	$	57,865,391		$	54,768,689
Secured loans – lowest interest rate (fixed)		6.9	%		6.9	%
Secured loans – highest interest rate (fixed)		10.5	%		10.5	%
Average secured loan – principal	$	622,209		$	588,911
Average principal as percent of total principal		1.1	%		1.1	%
Average principal as percent of members’ capital		0.9	%		0.9	%
Average principal as percent of total assets		0.9	%		0.9	%
Largest secured loan – principal	$	3,200,000		$	3,239,124
Largest principal as percent of total principal		5.5	%		5.9	%
Largest principal as percent of members’ capital		4.7	%		5.0	%
Largest principal as percent of total assets		4.7	%		5.1	%
Smallest secured loan – principal	$	94,425		$	52,562
Smallest principal as percent of total principal		0.2	%		0.1	%
Smallest principal as percent of members’ capital		0.1	%		0.1	%
Smallest principal as percent of total assets		0.1	%		0.1	%
Number of California counties where security is located		17			16
Largest percentage of principal in one California county		18.8	%		22.6	%
Number of secured loans with filed notice of default		1			1
Secured loans in foreclosure – principal	$	139,162		$	139,643
Number of secured loans with an interest reserve		—			—
Interest reserves	$	—		$	—

As of March 31, 2018, the company’s largest loan with principal of $3,200,000 represents 5.5% of outstanding secured loans and 4.7% of company assets. The loan is secured by a retail-office property located in Los Angeles County, bears an interest rate of 8.75% and matures on November 1, 2018. As of March 31, 2018, the company had 1 loan with a notice of default filed.

In compliance with California laws and regulations, all borrower receipts are deposited into a bank trust account maintained by RMC and subsequently disbursed to the company after an appropriate holding period. At March 31, 2018, the trust account held a balance relating to the company’s loan portfolio of $50,209, consisting of both interest and principal payments from borrowers, all of which was disbursed by April 13, 2018.

Lien position

Secured loans had the lien positions presented in the following table.

	March 31, 2018								December 31, 2017
	Loans		Principal			Percent			Loans		Principal			Percent
First trust deeds		56	$	35,087,060			61	%		60	$	37,032,195			68	%
Second trust deeds		37		22,778,331			39			33		17,736,494			32
Total secured loans		93		57,865,391			100	%		93		54,768,689			100	%
Liens due other lenders at loan closing				37,901,684								31,545,806
Total debt			$	95,767,075							$	86,314,495
Appraised property value at loan closing			$	197,444,000							$	181,018,000
Percent of total debt to appraised values    (LTV) at loan closing(1)				53.7	%							53.5	%

(1) Based on appraised values and liens due other lenders at loan closing. The weighted-average loan-to-value (LTV) computation above does not take into account subsequent increases or decreases in property values following the loan closing nor does it include decreases or increases of the amount owing on senior liens to other lenders.

Property type

Secured loans summarized by property type are presented in the following table.

	March 31, 2018							December 31, 2017
	Loans		Principal		Percent			Loans		Principal		Percent
Single family(2)		65	$	37,929,509		66	%		67	$	37,615,216		69	%
Multi-family		8		5,337,203		9			5		2,164,861		4
Commercial		20		14,598,679		25			21		14,988,612		27
Total secured loan balance		93	$	57,865,391		100	%		93		54,768,689		100	%

(2) Single family property type as of March 31, 2018 consists of 11 loans with principal of $6,506,239 that are owner occupied and 54 loans with principal of $31,423,270 that are non-owner occupied.  At December 31, 2017, single family property consisted of 10 loans with principal of $6,309,036 that are owner occupied and 57 loans with principal of $31,306,180 that are non-owner occupied.

Distribution of loans within California

The distribution of secured loans outstanding by California counties is presented in the following table as of March 31, 2018, and December 31, 2017.

	March 31, 2018					December 31, 2017
	Principal		Percent			Principal		Percent
San Francisco Bay Area(3)
Alameda	$	8,993,618		15.5	%	$	9,869,036		18.0	%
San Mateo		8,554,723		14.8			7,800,549		14.2
San Francisco		7,755,285		13.4			8,338,720		15.1
Santa Clara		7,111,703		12.3			5,461,084		10.0
Sonoma		1,285,000		2.2			—		—
Contra Costa		1,064,345		1.8			1,511,195		2.8
Solano		—		—			109,443		0.2
		34,764,674		60.0			33,090,027		60.3
Other Northern California
Sacramento		850,000		1.5			850,000		1.6
Placer		641,571		1.1			642,913		1.2
Yolo		169,915		0.3			174,758		0.3
San Joaquin		156,696		0.3			157,039		0.3
		1,818,182		3.2			1,824,710		3.4
Northern California Total		36,582,856		63.2			34,914,737		63.7
Los Angeles & Coastal
Los Angeles		10,871,240		18.8			12,357,456		22.6
Orange		4,594,372		7.9			1,487,747		2.7
San Diego		2,004,547		3.5			2,192,746		4.0
Santa Barbara		994,774		1.7			996,768		1.8
Ventura		349,291		0.6			350,000		0.6
		18,814,224		32.5			17,384,717		31.7
Other Southern California
San Bernardino		2,110,000		3.7			2,110,000		3.9
Riverside		358,311		0.6			359,235		0.7
		2,468,311		4.3			2,469,235		4.6
Southern California Total		21,282,535		36.8			19,853,952		36.3
Total Secured Loans	$	57,865,391		100.0	%	$	54,768,689		100.0	%

(3) Includes Silicon Valley

Scheduled maturities

Secured loans are scheduled to mature as presented in the following table as of March 31, 2018.

	Loans		Principal		Percent
2018(4)		13	$	15,156,189		26	%
2019		37		25,167,665		43
2020		18		8,254,558		14
2021		9		4,244,110		7
2022		11		3,469,122		6
Thereafter		4		1,434,585		3
Total future maturities		92		57,726,229		99
Matured as of March 31, 2018		1		139,162		1
Total secured loan balance		93	$	57,865,391		100	%

(4) Loans maturing in 2018 from April 1 to December 31.

One loan with a principal balance of $139,162 was past maturity as of March 31, 2018. The loan was 334 days delinquent and designated as impaired and in non-accrual status at March 31, 2018.

Loans may be repaid or refinanced before, at or after the contractual maturity date.  On matured loans, the company may continue to accept payments while pursuing collection of amounts owed from borrowers.  Therefore, the above tabulation for scheduled maturities is not a forecast of future cash receipts.

Delinquency

Secured loans summarized by payment delinquency are presented in the following table as of March 31, 2018 and December 31, 2017.

	March 31, 2018				December 31, 2017
	Loans		Amount		Loans		Amount
Past Due
30-89 days		4	$	1,324,345		3	$	1,259,100
90-179 days		—		—		—		—
180 or more days		1		139,162		1		139,643
Total past due		5		1,463,507		4		1,398,743
Current		88		56,401,884		89		53,369,946
Total secured loan balance		93	$	57,865,391		93	$	54,768,689

Loans in non-accrual status

	March 31, 2018		December 31, 2017
Number of loans	$	1	$	1
Principal investment		139,162		139,643
Advances		4,369		969
Accrued Interest		8,874		11,025
Total recorded investment	$	152,405	$	151,637
Foregone interest	$	7,535	$	4,306

At March 31, 2018, and December 31, 2017, no loans were 90 or more days past due as to principal or interest and not in non-accrual status.

Impaired loans/allowance for loan losses

	March 31, 2018		December 31, 2017
Principal	$	139,162	$	139,643
Recorded investment(5)		152,405		151,637
Impaired loans without allowance		152,405		151,637
Impaired loans with allowance		—		—
Allowance for loan losses, impaired loans		—		—
Number of loans		1		1

(5)Recorded investment is the sum of the principal, advances, and interest accrued for financial reporting purposes.

One loan was designated as impaired at March 31, 2018 and at December 31, 2017. No allowance for loan losses has been recorded as all loans were deemed to have protective equity (i.e., low loan-to-value ratio) such that collection is reasonably assured for all amounts owing.

Impaired loans had average balances and interest income recognized and received in cash as presented in the following tables as of and for the three months ended March 31, 2018 and the year ended December 31, 2017.

	March 31, 2018		December 31, 2017
Average recorded investment	$	152,021	$	536,934
Interest income recognized		—		8,602
Interest income received in cash		3,224		4,342

Modifications and troubled debt restructurings

No loan payment modifications were made during three months ended March 31, 2018, and December 31, 2017, and no modifications were in effect at March 31, 2018 and December 31, 2017.  

Commitments/loan disbursements/construction and rehabilitation loans

As of March 31, 2018, the company had no construction loans outstanding. The company may make construction loans that are not fully disbursed at loan inception. Construction loans are determined by the manager to be those loans made to borrowers for the construction of entirely new structures or dwellings, whether residential, commercial or multi-family properties. The company will approve and fund the construction loan up to a maximum loan balance. Disbursements will be made periodically as phases of the construction are completed or at such other times as the loan documents may require. Undisbursed construction funds will be held in escrow pending disbursement. Upon project completion, construction loans are reclassified as permanent loans. Funding of construction loans is limited to 10% of the loan portfolio. 

At March 31, 2018, the company had no rehabilitation loans outstanding. The company may also make rehabilitation loans. A rehabilitation loan will be approved up to a maximum principal balance and, at loan inception, will be either fully or partially disbursed. If fully disbursed, a rehabilitation escrow account is established and advanced periodically as phases of the rehabilitation are completed or at such other times as the loan documents may require. If not fully disbursed, the rehabilitation loan will be funded from available cash balances and future cash receipts. The company does not maintain a separate cash reserve to fund undisbursed rehabilitation loan obligations. Rehabilitation loan proceeds are generally used to acquire and remodel single family homes for future sale or rental. Upon project completion, rehabilitation loans are reclassified as permanent loans. Funding of rehabilitation loans is limited to 15% of the loan portfolio. 

Fair Value

The company does not record its loans at fair value on a recurring basis. The recorded amount of the performing loan (i.e., the loan balance) is deemed to approximate fair value as is the loan balance of loans designated impaired for which a specific reserve has not been recorded (i.e., the loan is well collateralized such that collection of the amount owed is assured, including forgone interest if any). Loans designated impaired (i.e., that are collateral dependent) are measured at fair value on a non-recurring basis. No assets or liabilities were measured at fair value on a non-recurring basis at and for the periods ended March 31, 2018 or December 31, 2017.

• Secured loans, performing (i.e. not designated as impaired) (Level 2) - Each loan is reviewed quarterly for its delinquency, LTV adjusted for the most recent valuation of the underlying collateral, remaining term to maturity, borrower’s payment history and other factors. Also considered is the limited resale market for the loans. Most companies or individuals making similar loans as the company intend to hold the loans until maturity as the average contractual term of the loans (and the historical experience of the time the loan is outstanding due to pre-payments) is shorter than conventional mortgages. As there are no prepayment penalties to be collected, loan buyers may be hesitant to risk paying above par. Due to these factors, sales of the loans are infrequent, because an active market does not exist. The recorded amount of the performing loans (i.e. the loan balance) is deemed to approximate the fair value, although the intrinsic value of the loans would reflect a premium due to the interest to be received.

• Secured loans, designated impaired (Level 2) - Secured loans designated impaired are deemed collateral dependent, and the fair value of the loan is the lesser of the fair value of the collateral or the enforceable amount owing under the note. The fair value of the collateral is determined by exercise of judgment based on management’s experience informed by appraisals (by licensed appraisers), brokers’ opinion of values and publicly available information on in-market transactions (Level 2 inputs).

The following methods and assumptions are used to determine the fair value of the collateral securing a loan.

Single family – Management’s preferred method for determining the fair market value of its single-family residential assets is the sale comparison method. Management primarily obtains sale comps via its subscription to the RealQuest service, but also uses free online services such as Zillow.com and other available resources to supplement this data. Sale comps are reviewed for similarity to the subject property, examining features such as proximity to subject, number of bedrooms and bathrooms, square footage, sale date, condition and year built.

If applicable sale comps are not available or deemed unreliable, management will seek additional information in the form of brokers’ opinions of value or appraisals.

Multi-family residential – Management’s preferred method for determining the aggregate retail value of its multifamily units is the sale comparison method. Sale comps are reviewed for similarity to the subject property, examining features such as proximity to subject, rental income, number of units, composition of units by the number of bedrooms and bathrooms, square footage, condition, amenities and year built.

Management’s secondary method for valuing its multifamily assets as income-producing rental operations is the direct capitalization method.  In order to determine market cap rates for properties of the same class and location as the subject, management refers to published data from reliable third-party sources such as the CBRE Cap Rate Survey. Management applies the appropriate cap rate to the subject’s most recent available annual net operating income to determine the property’s value as an income-producing project. When adequate sale comps are not available or reliable net operating income information is not available or the project is under development or is under-performing to market, management will seek additional information and analysis to determine the cost to improve and the intrinsic fair value and/or management will seek additional information in the form of brokers’ opinion of value or appraisals.

Commercial buildings – Where commercial rental income information is available, management’s preferred method for determining the fair value of its commercial real estate assets is the direct capitalization method. In order to determine market cap rates for properties of the same class and location as the subject, management refers to reputable third-party sources such as the CBRE Cap Rate Survey. Management then applies the appropriate cap rate to the subject’s most recent available annual net operating income to determine the property’s value as an income-producing commercial rental project. When adequate sale comps are not available or reliable net operating income information is not available or the project is under development or is under-performing to market, management will seek additional information and analysis to determine the cost to improve and the intrinsic fair value and/or management will seek additional information in the form of brokers’ opinion of value or appraisals.

Management supplements the direct capitalization method with additional information in the form of a sale comparison analysis (where adequate sale comps are available), brokers’ opinion of value, or appraisal.

Commercial land – Commercial land has many variations/uses, thus requiring management to employ a variety of methods depending upon the unique characteristics of the subject land. Management may rely on information in the form of a sale comparison analysis (where adequate sale comps are available), brokers’ opinion of value, or appraisal.

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Commitments and Contingencies, Other Than Loan Commitments

3 Months Ended

Mar. 31, 2018

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies, Other Than Loan Commitments

NOTE 5 – COMMITMENTS AND CONTINGENCIES, OTHER THAN LOAN COMMITMENTS

Commitments

The company had two contractual obligations as of March 31, 2018:

• To reimburse RMC for O&O expenses (as of March 31, 2018, $3,210,028 was to be reimbursed to RMC) contingent upon future sales of units; and,

• Redemptions of members' capital scheduled of $393,124, to be paid between 2018 and 2021.

Scheduled redemptions as of March 31, 2018 are presented in the following table.

2018	$	365,958
2019		12,000
2020		12,000
2021		3,166
Total	$	393,124

Legal proceedings

In the normal course of its business, the company may become involved in legal proceedings (such as assignment of rents, bankruptcy proceedings, appointment of receivers, unlawful detainers, judicial foreclosure, etc.) to collect the debt owed under the promissory notes, to enforce the provisions of the deeds of trust, to protect its interest in the real property subject to the deeds of trust and to resolve disputes with borrowers, lenders, lien holders and mechanics. None of these actions, in and of themselves, typically would be of any material financial impact to the net income or balance sheet of the company. As of the date hereof, the company is not involved in any legal proceedings other than those that would be considered part of the normal course of business.

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Subsequent Events

3 Months Ended

Mar. 31, 2018

Subsequent Events [Abstract]

Subsequent Events

NOTE 6 – SUBSEQUENT EVENTS

None.

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2018

Accounting Policies [Abstract]

Basis of Presentation

Basis of presentation

The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).

Management Estimates

Management estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions about the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities, at the dates of the financial statements and the reported amounts of revenues and expenses during the reported periods. Such estimates relate principally to the determination of the allowance for loan losses, including, when applicable, the valuation of impaired loans (which itself requires determining the fair value of the collateral), and the valuation of real estate held for sale and held as investment, at acquisition and subsequently. Actual results could differ significantly from these estimates.

Fair Value Estimates

Fair value estimates

GAAP defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets and liabilities; it is not a forced transaction. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact and (iv) willing to transact.

Fair values of assets and liabilities are determined based on the fair-value hierarchy established in GAAP. The hierarchy is comprised of three levels of inputs to be used:

• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the company has the ability to access at the measurement date. An active market is a market in which transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

• Level 2 inputs are inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly in active markets and quoted prices for identical assets or liabilities that are not active, and inputs other than quoted prices that are observable or inputs derived from or corroborated by market data.

• Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs reflect the company’s own assumptions about the assumptions market participants would use in pricing the asset or liability (including assumptions about risk). Unobservable inputs are developed based on the best information available in the circumstances and may include the company’s own data.

The fair value of the collateral is determined by exercise of judgment based on management’s experience informed by appraisals (by licensed appraisers), brokers’ opinion of values and publicly available information on in-market transactions. Appraisals of commercial real property generally present three approaches to estimating value: 1) market comparables or sales approach; 2) cost to replace and 3) capitalized cash flows or investment approach. These approaches may or may not result in a common, single value. The market-comparables approach may yield several different values depending on certain basic assumptions, such as, determining highest and best use (which may or may not be the current use); determining the condition (e.g. as-is, when-completed or for land when-entitled); and determining the unit of value (e.g. as a series of individual unit sales or as a bulk disposition).

Management has the requisite familiarity with the real estate markets it lends in generally and of the properties lent on specifically to analyze sales-comparables and assess their suitability/applicability. Management is acquainted with market participants – investors, developers, brokers, lenders – that are useful, relevant secondary sources of data and information regarding valuation and valuation variability. These secondary sources may have familiarity with and perspectives on pending transactions, successful strategies to optimize value and the history and details of specific properties – on and off the market – that enhance the process and analysis that is particularly and principally germane to establishing value in distressed markets and/or property types.

Cash and Cash Equivalents

Cash and cash equivalents

The company considers all highly liquid financial instruments with maturities of three months or less at the time of purchase to be cash equivalents. Periodically, company cash balances in banks exceed federally insured limits.

Loans and Interest Income

Loans and interest income

Loans generally are stated at the unpaid principal balance (principal). Management has discretion to pay amounts (advances) to third parties on behalf of borrowers to protect the company’s interest in the loan. Advances include, but are not limited to, the payment of interest and principal on a senior lien to prevent foreclosure by the senior lien holder, property taxes, insurance premiums and attorney fees. Advances generally are stated at the amounts paid out on the borrower’s behalf and any accrued interest on amounts paid out, until repaid by the borrower.

The company may fund a specific loan origination net of an interest reserve (one to two years) to insure timely interest payments at the inception of the loan. As monthly interest payments become due, the company funds the payments into the affiliated trust account. In the event of an early loan payoff, any unapplied interest reserves would be first applied to any accrued but unpaid interest and then as a reduction to the principal.

If events and or changes in circumstances cause management to have serious doubts about the collectability of the payments of interest and principal in accordance with the loan agreement, a loan may be designated as impaired. Impaired loans are included in management’s periodic analysis of recoverability. Any subsequent payments on impaired loans are applied to late fees, then to the accrued interest, then to advances, and lastly to principal.

From time to time, the company negotiates and enters into loan modifications with borrowers whose loans are delinquent. If the loan modification results in a significant reduction in the cash flow compared to the original note, the modification is deemed a troubled debt restructuring and a loss is recognized. In the normal course of the company’s operations, loans that mature may be renewed at then current market rates and terms for new loans. Such renewals are not designated as impaired, unless the renewed loan was previously designated as impaired.

Interest is accrued daily based on the principal of the loans. Impaired loans continue to recognize interest income as long as the loan is in the process of collection and is considered to be well-secured. Impaired loans are placed on non-accrual status if 180 days delinquent or at the earlier of management’s determination that the primary source of repayment will come from the foreclosure and subsequent sale of the collateral securing the loan (which usually occurs when a notice of sale is filed) or when the loan is no longer considered well-secured. When a loan is placed on non-accrual status, the accrual of interest is discontinued; however, previously recorded interest is not reversed. A loan may return to accrual status when all delinquent interest and principal payments become current in accordance with the terms of the loan agreement

Loan administrative fees paid to RMC for loans funded or invested in by the company are capitalized and amortized over the life of the loan on a straight-line method which approximates the effective interest method.

Allowance for Loan Losses

Allowance for loan losses

Loans and the related accrued interest and advances (i.e. the loan balance) are analyzed on a periodic basis for ultimate recoverability. Delinquencies are identified and followed as part of the loan system of record. Collateral fair values are reviewed quarterly and the protective equity for each loan is computed. As used herein, “protective equity” is the arithmetic difference between the fair value of the collateral, net of any senior liens, and the loan balance, where “loan balance” is the sum of the unpaid principal, advances and the recorded interest thereon. This computation is done for each loan (whether impaired or performing), and while loans secured by collateral of similar property type are grouped, there is enough distinction and variation in the collateral that a loan-by-loan, collateral-by-collateral analysis is appropriate.

For loans designated impaired, a provision is made for loan losses to adjust the allowance for loan losses to an amount such that the net carrying amount (unpaid principal less the specific allowance) is reduced to the lower of the loan balance or the estimated fair value of the related collateral, net of any senior loans and net of any costs to sell in arriving at net realizable value.

Loans determined not to be individually impaired are grouped by the property type of the underlying collateral, and for each loan and for the total by property type, the amount of protective equity or amount of exposure to loss ( i.e., the dollar amount of the deficiency of the fair value of the underlying collateral to the loan balance) is computed.

The company charges off uncollectible loans and related receivables directly to the allowance account once it is determined the full amount is not collectible.

At foreclosure any excess of the recorded investment in the loan (accounting basis) over the net realizable value is charged against the allowance for loan losses.

Real Estate Owned (REO)

Real estate owned (REO)

Real estate owned, or REO, is property acquired in full or partial settlement of loan obligations generally through foreclosure, and is recorded at acquisition at the lower of the amount owed on the loan (legal basis), plus any senior indebtedness, or at the property’s net realizable value, which is the fair value less estimated costs to sell, as applicable. The fair value estimates are derived from information available in the real estate markets including similar property, and often require the experience and judgment of third parties such as commercial real estate appraisers and brokers. The estimates figure materially in calculating the value of the property at acquisition, the level of charge to the allowance for loan losses and any subsequent valuation reserves. After acquisition, costs incurred relating to the development and improvement of property are capitalized to the extent they do not cause the recorded value to exceed the net realizable value, whereas costs relating to holding and disposition of the property are expensed as incurred.  After acquisition, REO is analyzed periodically for changes in fair values and any subsequent write down is charged to operations expenses. Any recovery in the fair value subsequent to such a write down is recorded and is not to exceed the value recorded at acquisition. Recognition of gains on the sale of real estate is dependent upon the transaction meeting certain criteria related to the nature of the property and the terms of the sale including potential seller financing.

Recently Issued Accounting Pronouncements

Recently issued accounting pronouncements

-Accounting and Financial reporting for Expected Credit Losses

The Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) that significantly changes how entities will account for credit losses for most financial assets that are not measured at fair value through net income. The new standard will supersede currently in effect guidance and applies to all entities. Entities will be required to use a current expected credit loss (CECL) model to estimate credit impairment. This estimate will be forward-looking, meaning management will be required to use forecasts about future economic conditions to determine the expected credit loss over the remaining life of an instrument. This will be a significant change from the current incurred credit loss model, and generally may result in allowances being recognized in earlier periods than under the current credit loss model.

RMI IX invests in real estate secured loans made with the expectation of zero credit losses as a result of substantial protective equity provided by the underlying collateral. For a loss to be recognized under the CECL or incurred loss model, if the lending/loan-to-value guidelines are followed effectively, an intervening, subsequent-to-loan-funding, event must negatively impact the value of the underlying collateral of the loan in an amount greater than the amount of protective equity provided by the collateral. Such an event would be either (or both) of:

• an uninsured event(s) specifically impacting the collateral or

• a non-temporary decline in values in the applicable real estate market.

In both of these instances the treatment would be the same in the incurred loss and CECL models of approximately the same amount.  Other than in these events, the probable of occurrence criteria of the incurred loss model is not triggered and a loss is not recognized. Further, if the zero-expected-loss lending guideline is preserved and  the protective equity provided by the collateral is not expected to be impaired over the life of the loans, then a loss is not required to be recognized under the CECL model.

This convergence between the CECL and incurred loss models as to loss recognition – as an event driven occurrence – in low LTV, real estate secured programs caused RMC to conclude that the CECL model will not materially impact the reported results of operations or financial position as compared to that which would be reported in the incurred loss model.  The manager expects to adopt the ASU for interim and annual reporting in 2020.

-Accounting and Financial Reporting for Revenue Recognition

On May 28, 2014, FASB issued a final standard on revenue from contracts with customers. The standard issued as ASU 2014-09 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The standard is effective January 1, 2018, and has been adopted using the modified retrospective approach.

The goals of the revenue recognition project are to clarify and converge the revenue recognition principles under U.S. GAAP and to develop guidance that would streamline and enhance revenue recognition requirements.  A core principle of the standard is to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services.  Revenue is recognized when a performance obligation is satisfied by transferring goods or services to a customer. The FASB intentionally used the wording “be entitled” rather than “receive” or “collect” to distinguish collectability risk from other uncertainties that may exist under a contract.

Adoption of the revenue standard did not have an impact on the company’s current revenue recognition policies since the scope of guidance is not applicable to financial instruments including loans and therefore did not have an impact on the recognition of interest income or late fees.

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Organization and General (Tables)

3 Months Ended

Mar. 31, 2018

Accounting Policies [Abstract]

Summary of Gross Proceeds from Sales of Units

Gross proceeds from sales of units from inception (October, 2009) through March 31, 2018 are summarized below.

	Proceeds
From investors - admitted	$	67,106,564
From members under our DRIP		6,830,872
From premiums paid by RMC(1)		296,209
Total proceeds from unit sales	$	74,233,645

(1) If a member acquired units through an unsolicited sale (i.e. without broker/dealer) the member’s capital account is credited with their capital contribution plus a premium paid by RMC equal to the amount of the sales commissions that otherwise would have been paid to a broker-dealer by RMC. This premium is reported in the year paid as taxable income to the member.

As of March 31, 2018, we had sold approximately 74,234,000 units– 39,407,000 units under our previous registration statements and approximately 34,827,000 units under our current registration statement which was effective on June 6, 2016. Correspondingly, gross proceeds from unit sales at $1 per unit (including units issued under our distribution reinvestment plan) were approximately $39,407,000 and $34,827,000, respectively.

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Manager and Other Related Parties (Tables)

3 Months Ended

Mar. 31, 2018

Related Party Transactions [Abstract]

Summary of Fees Waived and Costs Reimbursements

Fees waived and costs reimbursements for the three months ended March 31, 2018

				Operating Expenses
	Loan Admin Fees			Mortgage Servicing Fees		Asset Management Fee			Cost Reimbursements			Professional Services			Other			Total
Chargeable/reimbursable	$	158,363		$	35,184	$	127,844		$	184,149		$	147,837		$	14,332		$	667,709
RMC Support
Waived		(158,363	)		—		(127,844	)		(184,149	)		—			—			(470,356	)
Cost Absorbed by RMC		—			—		—			—			(143,152	)		(14,247	)		(157,399	)
Total RMC Support		(158,363	)		—		(127,844	)		(184,149	)		(143,152	)		(14,247	)		(627,755	)
Net charged	$	—		$	35,184	$	—		$	—		$	4,685		$	85		$	39,954

Fees waived and costs reimbursements for the three months ended March 31, 2017 are presented in the following table.

				Operating Expenses
	Loan Admin Fees			Mortgage Servicing Fees		Asset Management Fee			Cost Reimbursements			Professional Services			Other			Total
Chargeable/reimbursable	$	86,077		$	24,310	$	86,434		$	97,605		$	119,739		$	11,808		$	425,973
RMC Support
Waived		(86,077	)		—		(86,434	)		(97,605	)		—			—			(270,116	)
Cost Absorbed by RMC		—			—		—			—			(119,739	)		(10,769	)		(130,508	)
Total RMC Support		(86,077	)		—		(86,434	)		(97,605	)		(119,739	)		(10,769	)		(400,624	)
Net charged	$	—		$	24,310	$	—		$	—		$	—		$	1,039		$	25,349

Schedule of Accounts, Notes, Loans and Financing Receivable

Formation loan transactions are presented in the following table.

	For the three months ended			Since Inception
Balance, beginning of period	$	3,777,088		$	—
Formation loan advances to RMC		357,794			5,017,741
Payments received from RMC		—			(854,077	)
Early withdrawal penalties applied		(1,051	)		(29,833	)
Balance, March 31, 2018	$	4,133,831		$	4,133,831
Subscription proceeds since inception				$	71,490,002
Formation loan advance rate					7	%

Formation Loan, Future Minimum Payments

The future minimum payments on the formation loan as of March 31, 2018 are presented in the following table.

2018	$	377,709
2019		377,709
2020		377,709
2021		377,709
2022		377,709
Thereafter		2,245,286
Total	$	4,133,831

Summary of Organization and Offering Expenses

Organization and offering expenses (O & O expenses) are summarized in the following table.

	2018			Since Inception
Balance, January 1	$	2,335,325		$	—
O&O expenses reimbursed to RMC		143,694			3,038,308
Early withdrawal penalties applied (1)		(696	)		(19,211	)
O&O expenses allocated(2)		(70,208	)		(452,365	)
O&O expenses reimbursed by RMC (3)		(12,193	)		(170,810	)
Balance, March 31 (4)	$	2,395,922		$	2,395,922

(1) Early withdrawal penalties collected are applied to the next installment of principal due under the formation loan and to reduce the amount owed to RMC for O&O expenses. The amounts credited will be determined by the ratio between the amount of the formation loan and the amount of offering costs incurred by the company.

(2) Beginning in 2016, O&O expenses reimbursed to RMC by RMI IX are allocated to members’ capital accounts over 40 quarters

(3) RMC reimburses the company for any unallocated O&O expenses on units redeemed.

(4) Proceeds from investors admitted to RMI IX were $67,106,564 through March 31, 2018. O&O expenses incurred by RMC and remaining to be reimbursed to RMC by RMI IX were $3,210,028.

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Loans (Tables)

3 Months Ended

Mar. 31, 2018

Secured Loan Principal Transactions

Secured loan transactions are summarized in the following table for the three months ended March 31, 2018.

	2018
Principal, January 1	$	54,768,689
Loans funded		9,946,500
Loans acquired from affiliates		5,889,819
Principal payments received		(12,739,617	)
Principal, March 31	$	57,865,391

Secured Loans Characteristics

Secured loans had the characteristics presented in the following table.

	March 31,			December 31,
	2018			2017
Number of secured loans		93			93
Secured loans – principal	$	57,865,391		$	54,768,689
Secured loans – lowest interest rate (fixed)		6.9	%		6.9	%
Secured loans – highest interest rate (fixed)		10.5	%		10.5	%
Average secured loan – principal	$	622,209		$	588,911
Average principal as percent of total principal		1.1	%		1.1	%
Average principal as percent of members’ capital		0.9	%		0.9	%
Average principal as percent of total assets		0.9	%		0.9	%
Largest secured loan – principal	$	3,200,000		$	3,239,124
Largest principal as percent of total principal		5.5	%		5.9	%
Largest principal as percent of members’ capital		4.7	%		5.0	%
Largest principal as percent of total assets		4.7	%		5.1	%
Smallest secured loan – principal	$	94,425		$	52,562
Smallest principal as percent of total principal		0.2	%		0.1	%
Smallest principal as percent of members’ capital		0.1	%		0.1	%
Smallest principal as percent of total assets		0.1	%		0.1	%
Number of California counties where security is located		17			16
Largest percentage of principal in one California county		18.8	%		22.6	%
Number of secured loans with filed notice of default		1			1
Secured loans in foreclosure – principal	$	139,162		$	139,643
Number of secured loans with an interest reserve		—			—
Interest reserves	$	—		$	—

Secured Loans by Lien Position in the Collateral

Secured loans had the lien positions presented in the following table.

	March 31, 2018								December 31, 2017
	Loans		Principal			Percent			Loans		Principal			Percent
First trust deeds		56	$	35,087,060			61	%		60	$	37,032,195			68	%
Second trust deeds		37		22,778,331			39			33		17,736,494			32
Total secured loans		93		57,865,391			100	%		93		54,768,689			100	%
Liens due other lenders at loan closing				37,901,684								31,545,806
Total debt			$	95,767,075							$	86,314,495
Appraised property value at loan closing			$	197,444,000							$	181,018,000
Percent of total debt to appraised values    (LTV) at loan closing(1)				53.7	%							53.5	%

(1) Based on appraised values and liens due other lenders at loan closing. The weighted-average loan-to-value (LTV) computation above does not take into account subsequent increases or decreases in property values following the loan closing nor does it include decreases or increases of the amount owing on senior liens to other lenders.

Secured Loans by Property Type of the Collateral

Secured loans summarized by property type are presented in the following table.

	March 31, 2018							December 31, 2017
	Loans		Principal		Percent			Loans		Principal		Percent
Single family(2)		65	$	37,929,509		66	%		67	$	37,615,216		69	%
Multi-family		8		5,337,203		9			5		2,164,861		4
Commercial		20		14,598,679		25			21		14,988,612		27
Total secured loan balance		93	$	57,865,391		100	%		93		54,768,689		100	%

(2) Single family property type as of March 31, 2018 consists of 11 loans with principal of $6,506,239 that are owner occupied and 54 loans with principal of $31,423,270 that are non-owner occupied.  At December 31, 2017, single family property consisted of 10 loans with principal of $6,309,036 that are owner occupied and 57 loans with principal of $31,306,180 that are non-owner occupied.

Secured Loans Distributed within California

The distribution of secured loans outstanding by California counties is presented in the following table as of March 31, 2018, and December 31, 2017.

	March 31, 2018					December 31, 2017
	Principal		Percent			Principal		Percent
San Francisco Bay Area(3)
Alameda	$	8,993,618		15.5	%	$	9,869,036		18.0	%
San Mateo		8,554,723		14.8			7,800,549		14.2
San Francisco		7,755,285		13.4			8,338,720		15.1
Santa Clara		7,111,703		12.3			5,461,084		10.0
Sonoma		1,285,000		2.2			—		—
Contra Costa		1,064,345		1.8			1,511,195		2.8
Solano		—		—			109,443		0.2
		34,764,674		60.0			33,090,027		60.3
Other Northern California
Sacramento		850,000		1.5			850,000		1.6
Placer		641,571		1.1			642,913		1.2
Yolo		169,915		0.3			174,758		0.3
San Joaquin		156,696		0.3			157,039		0.3
		1,818,182		3.2			1,824,710		3.4
Northern California Total		36,582,856		63.2			34,914,737		63.7
Los Angeles & Coastal
Los Angeles		10,871,240		18.8			12,357,456		22.6
Orange		4,594,372		7.9			1,487,747		2.7
San Diego		2,004,547		3.5			2,192,746		4.0
Santa Barbara		994,774		1.7			996,768		1.8
Ventura		349,291		0.6			350,000		0.6
		18,814,224		32.5			17,384,717		31.7
Other Southern California
San Bernardino		2,110,000		3.7			2,110,000		3.9
Riverside		358,311		0.6			359,235		0.7
		2,468,311		4.3			2,469,235		4.6
Southern California Total		21,282,535		36.8			19,853,952		36.3
Total Secured Loans	$	57,865,391		100.0	%	$	54,768,689		100.0	%

(3) Includes Silicon Valley

Secured Loans Scheduled Maturities

Secured loans are scheduled to mature as presented in the following table as of March 31, 2018.

	Loans		Principal		Percent
2018(4)		13	$	15,156,189		26	%
2019		37		25,167,665		43
2020		18		8,254,558		14
2021		9		4,244,110		7
2022		11		3,469,122		6
Thereafter		4		1,434,585		3
Total future maturities		92		57,726,229		99
Matured as of March 31, 2018		1		139,162		1
Total secured loan balance		93	$	57,865,391		100	%

(4) Loans maturing in 2018 from April 1 to December 31.

Past Due Financing Receivables

Secured loans summarized by payment delinquency are presented in the following table as of March 31, 2018 and December 31, 2017.

	March 31, 2018				December 31, 2017
	Loans		Amount		Loans		Amount
Past Due
30-89 days		4	$	1,324,345		3	$	1,259,100
90-179 days		—		—		—		—
180 or more days		1		139,162		1		139,643
Total past due		5		1,463,507		4		1,398,743
Current		88		56,401,884		89		53,369,946
Total secured loan balance		93	$	57,865,391		93	$	54,768,689

Secured Loans in Non-Accrual Status

	March 31, 2018		December 31, 2017
Number of loans	$	1	$	1
Principal investment		139,162		139,643
Advances		4,369		969
Accrued Interest		8,874		11,025
Total recorded investment	$	152,405	$	151,637
Foregone interest	$	7,535	$	4,306

Impaired Loans [Member]

Impaired Financing Receivables

Impaired loans/allowance for loan losses

	March 31, 2018		December 31, 2017
Principal	$	139,162	$	139,643
Recorded investment(5)		152,405		151,637
Impaired loans without allowance		152,405		151,637
Impaired loans with allowance		—		—
Allowance for loan losses, impaired loans		—		—
Number of loans		1		1

(5)Recorded investment is the sum of the principal, advances, and interest accrued for financial reporting purposes.

Average Balances and Interest Income [Member]

Impaired Financing Receivables

Impaired loans had average balances and interest income recognized and received in cash as presented in the following tables as of and for the three months ended March 31, 2018 and the year ended December 31, 2017.

	March 31, 2018		December 31, 2017
Average recorded investment	$	152,021	$	536,934
Interest income recognized		—		8,602
Interest income received in cash		3,224		4,342

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Commitments and Contingencies, Other Than Loan Commitments (Tables)

3 Months Ended

Mar. 31, 2018

Scheduled Redemptions Of Members Capital [Abstract]

Scheduled Redemptions of Members' Capital

Scheduled redemptions as of March 31, 2018 are presented in the following table.

2018	$	365,958
2019		12,000
2020		12,000
2021		3,166
Total	$	393,124

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Organization and General - Additional Information (Details)	3 Months Ended
	Mar. 31, 2018 USD ($) Unit $ / shares shares	Mar. 31, 2017 USD ($)	Dec. 31, 2017 USD ($)
Organization and General (Details) [Line Items]
Ownership interest held by the manager	1.00%	1.00%
Members or partners capital, description	Cash available for distribution at the end of each calendar month is allocated ninety-nine percent (99%) to the members and one percent (1%) to the manager.
Percentage of distribution allocated to members	99.00%
Estimated earnings allocated to members accounts	$ 1,160,555
Net income available to members	1,131,064	$ 808,652
Cash available for distribution	$ 29,491
Unit Redemption Program, Years After Purchase	1 year
Maximum Capital Units for Redemption Per Quarter Per Individual | Unit	100,000
Maximum Percentage of Members Outstanding Units for Redemption Per Quarter Per Individual	25.00%
Maximum Percentage of Weighted Average Number of Members Outstanding Units During Twelve Months for Redemption	5.00%
Formation loan, advances	$ 357,794	$ 315,951
Receivable from affiliate (formation loan)	$ 4,133,831		$ 3,777,088
Member Units [Member]
Organization and General (Details) [Line Items]
Capital Unit Sold in Public Offering, Shares | shares	34,827,000
Capital Unit Sold in Public Offering, Value	$ 34,827,000
Limited partners capital account sales per unit from gross proceeds of unit sales | $ / shares	$ 1
Maximum [Member]
Organization and General (Details) [Line Items]
Percentage of offering proceeds	7.00%
Maximum [Member] | Member Units [Member] | Capital Units Issued Under Previous Registration Statements [Member]
Organization and General (Details) [Line Items]
Capital Unit Sold in Public Offering, Shares | shares	74,234,000
Minimum [Member] | Member Units [Member] | Capital Units Issued Under Previous Registration Statements [Member]
Organization and General (Details) [Line Items]
Capital Unit Sold in Public Offering, Shares | shares	39,407,000
Capital Unit Sold in Public Offering, Value	$ 39,407,000
Formation Loan [Member]
Organization and General (Details) [Line Items]
Formation loan, advances	5,017,741
Receivable from affiliate (formation loan)	$ 4,133,831
Redemption Between One to Two Years [Member]
Organization and General (Details) [Line Items]
Redemption Value Percentage of Purchase Price or Capital Account Balance	92.00%
Redemption Between Two to Three Years [Member]
Organization and General (Details) [Line Items]
Redemption Value Percentage of Purchase Price or Capital Account Balance	94.00%
Redemption Between Three to Four Years [Member]
Organization and General (Details) [Line Items]
Redemption Value Percentage of Purchase Price or Capital Account Balance	96.00%
Redemption Between Four to Five Years [Member]
Organization and General (Details) [Line Items]
Redemption Value Percentage of Purchase Price or Capital Account Balance	98.00%
Redemption After Five Years [Member]
Organization and General (Details) [Line Items]
Redemption Value Percentage of Purchase Price or Capital Account Balance	100.00%
RMC [Member]
Organization and General (Details) [Line Items]
Percentage of profits and losses allocated to manager	1.00%
Ownership interest held by the manager	0.10%
RMC [Member] | Maximum [Member]
Organization and General (Details) [Line Items]
Percentage of proceeds from sale of units used to pay for organization and offering expenses	4.50%
Percentage of proceeds from sale of units used for funding formation loan to related party	7.00%

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Organization and General - Summary of Gross Proceeds from Sales of Units (Detail) - USD ($)		3 Months Ended	102 Months Ended
		Mar. 31, 2018	Mar. 31, 2018
Limited Partners' Capital Account [Line Items]
Total proceeds from unit sales			$ 74,233,645
Contributions Admitted To Members Capital
Limited Partners' Capital Account [Line Items]
Total proceeds from unit sales		$ 67,106,564	67,106,564
DRIP
Limited Partners' Capital Account [Line Items]
Total proceeds from unit sales			6,830,872
Premiums Admitted To Members Capital
Limited Partners' Capital Account [Line Items]
Total proceeds from unit sales	[1]		$ 296,209

[1] If a member acquired units through an unsolicited sale (i.e. without broker/dealer) the member’s capital account is credited with their capital contribution plus a premium paid by RMC equal to the amount of the sales commissions that otherwise would have been paid to a broker-dealer by RMC. This premium is reported in the year paid as taxable income to the member.

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Summary of Significant Accounting Policies - Additional Information (Details)	3 Months Ended
	Mar. 31, 2018 USD ($) Approach
Summary of Significant Accounting Policies [Line Items]
Estimating Real Property Value, Number of Approaches | Approach	3
Cash and Cash Equivalents, Maximum Initial Maturity	3 months
Interest Reserve Minimum Length	1 year
Interest Reserve Maximum Length	2 years
ASU 2014-09 [Member]
Summary of Significant Accounting Policies [Line Items]
Adoption of revenue standard, impact on recognition of interest income or late fees	$ 0
Real Estate Secured Loans [Member]
Summary of Significant Accounting Policies [Line Items]
Expected credit losses from investment	$ 0

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Manager and Other Related Parties - Additional Information (Details)	3 Months Ended		12 Months Ended
	Mar. 31, 2018 USD ($) MortgageLoan	Mar. 31, 2017 USD ($) MortgageLoan	Dec. 31, 2017 USD ($) MortgageLoan
Managers and Other Related Parties (Details) [Line Items]
Managers Share of Profits or Losses	1.00%
Managers (1%), Net income	$ 11,425	$ 8,168
Mortgage Loans on Real Estate, Number of Loans | MortgageLoan	93		93
Principal	$ 57,865,391		$ 54,768,689
Reimbursement as a percentage of member's original purchase price	0.45%
Percentage of original purchase price, quarterly installment percentage	0.1125%
Performing Loans [Member]
Managers and Other Related Parties (Details) [Line Items]
Mortgage Loans on Real Estate, Number of Loans | MortgageLoan	2	0
Principal	$ 5,890,000
Maximum [Member]
Managers and Other Related Parties (Details) [Line Items]
Annual mortgage servicing fees, percentage	0.25%
Percentage of reimbursement of organization and offering expenses	4.50%
Reimbursement threshold	Maximum of forty (40) such quarters
RMC [Member]
Managers and Other Related Parties (Details) [Line Items]
Managers (1%), Net income	$ 11,425	$ 8,168
Related Party Transaction, Amounts of Transaction	$ 628,000	$ 401,000
Administrative Fees, Percentage	1.00%
Management Fee, Percentage	0.75%
Working Capital Reserve, Percentage	2.00%
Loan Brokerage Commission Percent Minimum	1.50%
Loan Brokerage Commission Percent Maximum	5.00%
Loan Brokerage Commissions, Maximum Percent of Assets	4.00%

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Manager and Other Related Parties - Summary of Fees Waived and Costs Reimbursed (Details) - RMC [Member] - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Managers and Other Related Parties (Details) [Line Items]
Chargeable/reimbursable	$ 667,709	$ 425,973
Waived	(470,356)	(270,116)
Cost Absorbed by RMC	(157,399)	(130,508)
Total RMC Support	(627,755)	(400,624)
Net charged	39,954	25,349
Loan Admin Fees [Member]
Managers and Other Related Parties (Details) [Line Items]
Chargeable/reimbursable	158,363	86,077
Waived	(158,363)	(86,077)
Total RMC Support	(158,363)	(86,077)
Mortgage Servicing Fees [Member]
Managers and Other Related Parties (Details) [Line Items]
Chargeable/reimbursable	35,184	24,310
Net charged	35,184	24,310
Asset Management Fee [Member]
Managers and Other Related Parties (Details) [Line Items]
Chargeable/reimbursable	127,844	86,434
Waived	(127,844)	(86,434)
Total RMC Support	(127,844)	(86,434)
Cost Reimbursements [Member]
Managers and Other Related Parties (Details) [Line Items]
Chargeable/reimbursable	184,149	97,605
Waived	(184,149)	(97,605)
Total RMC Support	(184,149)	(97,605)
Professional Services [Member]
Managers and Other Related Parties (Details) [Line Items]
Chargeable/reimbursable	147,837	119,739
Cost Absorbed by RMC	(143,152)	(119,739)
Total RMC Support	(143,152)	(119,739)
Net charged	4,685
Other [Member]
Managers and Other Related Parties (Details) [Line Items]
Chargeable/reimbursable	14,332	11,808
Cost Absorbed by RMC	(14,247)	(10,769)
Total RMC Support	(14,247)	(10,769)
Net charged	$ 85	$ 1,039

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Manager and Other Related Parties - Formation Loan Transactions (Details) - USD ($)	3 Months Ended	102 Months Ended
	Mar. 31, 2018	Mar. 31, 2018
Formation Loan Transactions [Abstract]
Balance, beginning of period	$ 3,777,088
Formation loan advances to RMC	357,794	$ 5,017,741
Payments received from RMC		(854,077)
Early withdrawal penalties applied	(1,051)	(29,833)
Balance, March 31, 2018	$ 4,133,831	4,133,831
Subscription proceeds since inception		$ 71,490,002
Formation loan advance rate		7.00%

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Manager and Other Related Parties - Formation Loan, Future Minimum Payments (Details)	Mar. 31, 2018 USD ($)
Formation Loan Future Minimum Payments [Abstract]
2018	$ 377,709
2019	377,709
2020	377,709
2021	377,709
2022	377,709
Thereafter	2,245,286
Total	$ 4,133,831

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Manager and Other Related Parties - Summary of Organization and Offering Expenses (Details) - USD ($)		3 Months Ended	102 Months Ended
		Mar. 31, 2018	Mar. 31, 2018
Related Party Transactions [Abstract]
Balance, beginning of period		$ 2,335,325
O&O expenses reimbursed to RMC		143,694	$ 3,038,308
Early withdrawal penalties applied	[1]	(696)	(19,211)
O&O expenses allocated	[2]	(70,208)	(452,365)
O&O expenses reimbursed by RMC	[3]	(12,193)	(170,810)
Balance, end of period	[4]	$ 2,395,922	$ 2,395,922

[1] Early withdrawal penalties collected are applied to the next installment of principal due under the formation loan and to reduce the amount owed to RMC for O&O expenses. The amounts credited will be determined by the ratio between the amount of the formation loan and the amount of offering costs incurred by the company.

[2] Beginning in 2016, O&O expenses reimbursed to RMC by RMI IX are allocated to members’ capital accounts over 40 quarters

[3] RMC reimburses the company for any unallocated O&O expenses on units redeemed

[4] Proceeds from investors admitted to RMI IX were $67,106,564 through March 31, 2018. O&O expenses incurred by RMC and remaining to be reimbursed to RMC by RMI IX were $3,210,028.

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Manager and Other Related Parties - Summary of Organization and Offering Expenses (Parenthetical) (Details)	3 Months Ended	102 Months Ended
	Mar. 31, 2018 USD ($)	Mar. 31, 2018 USD ($)
Managers and Other Related Parties (Details) - Syndication Costs [Line Items]
Proceeds from investors admitted		$ 74,233,645
O&O expenses incurred by RMC and remaining to be reimbursed to RMC	$ 3,210,028	3,210,028
O&O expenses reimbursed period to RMC	120 months
Contributions Admitted To Members Capital
Managers and Other Related Parties (Details) - Syndication Costs [Line Items]
Proceeds from investors admitted	$ 67,106,564	$ 67,106,564

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Loans - Additional Information (Details)	3 Months Ended	12 Months Ended
	Mar. 31, 2018 USD ($) MortgageLoan Loan	Dec. 31, 2017 USD ($) MortgageLoan Loan	Mar. 31, 2017 USD ($)
Loans (Details) [Line Items]
Loans Receivable, Term	5 years
Mortgage Loans on Real Estate, Number of Loans | MortgageLoan	93	93
Loans Receivable, Number of Principal and Interest Loans | Loan	69
Loans Receivable, Amortization Term	30 years
Mortgage Loans on Real Estate Renewed, Number of Loans | MortgageLoan	4
Loans - principal renewed (in Dollars)	$ 1,324,473
Loans Receivable Largest Loan (in Dollars)	$ 3,200,000	$ 3,239,124
Loans Receivable, Percent	100.00%	100.00%
Balance relating to loan portfolio held in bank trust account	$ 50,209
Mortgage Loans on Real Estate, Number of Loans | MortgageLoan	1
Financing receivable, recorded investment, 90 days past due and still accruing	$ 0	$ 0
Financing Receivable, Modifications, Number of Contracts | Loan	0	0
Loans - principal (in Dollars)	$ 57,865,391	$ 54,768,689
Percentage of loan portfolio limited for funding of construction loans	10.00%
Percentage of loan portfolio limited for funding of rehabilitation loans	15.00%
Assets measured at fair value on non-recurring basis	$ 0		$ 0
Liabilities measured at fair value on non-recurring basis	0		$ 0
Construction Loans [Member]
Loans (Details) [Line Items]
Loans - principal (in Dollars)	0
Rehabilitation Loans [Member]
Loans (Details) [Line Items]
Loans - principal (in Dollars)	$ 0
Impaired Loans [Member]
Loans (Details) [Line Items]
Mortgage Loans on Real Estate, Number of Loans | MortgageLoan	1	1
Impaired Loans [Member] | Past Maturity 1 to 334 Days [Member]
Loans (Details) [Line Items]
Mortgage Loans on Real Estate, Number of Loans | MortgageLoan	1
Financing Receivable, Recorded Investment, Nonaccrual Status (in Dollars)	$ 139,162
Five Years Or Less Term Loans [Member]
Loans (Details) [Line Items]
Mortgage Loans on Real Estate, Number of Loans | MortgageLoan	87
Loans Receivable, Percent of Aggregate Principal	98.00%
Interest Only [Member]
Loans (Details) [Line Items]
Loans Receivable, Percent of Aggregate Principal	67.00%
Largest Loan [Member]
Loans (Details) [Line Items]
Loans Receivable, Percent	5.50%
Loans Receivable, Percent of Assets	4.70%
Loans Receivable, Yield of Loan Acquired	8.75%
Loans Receivable Maturity Date	Nov. 01, 2018
Largest Loan [Member] | Filed Notice Of Sale [Member]
Loans (Details) [Line Items]
Mortgage Loans on Real Estate, Number of Loans | MortgageLoan	1
Minimum [Member]
Loans (Details) [Line Items]
Loans Receivable, Remaining Term	5 years
Maximum [Member]
Loans (Details) [Line Items]
Balance relating to loan portfolio held in bank trust account, disbursement date to partnership	Apr. 13, 2018

XML

Loans - Secured Loan Principal Transactions (Details)	3 Months Ended
	Mar. 31, 2018 USD ($)
Receivables [Abstract]
Principal, beginning of period	$ 54,768,689
Loans funded	9,946,500
Loans acquired from affiliates	5,889,819
Principal payments received	(12,739,617)
Principal, end of period	$ 57,865,391

XML

Loans - Secured Loans Characteristics (Details)	3 Months Ended	12 Months Ended
	Mar. 31, 2018 USD ($) MortgageLoan Country	Dec. 31, 2017 USD ($) MortgageLoan Country
Secured Loan Transactions [Line Items]
Number of secured loans | MortgageLoan	93	93
Secured loans - principal (in Dollars)	$ 57,865,391	$ 54,768,689
Average secured loan - principal (in Dollars)	$ 622,209	$ 588,911
Average principal as percent of total principal	1.10%	1.10%
Average principal as percent of members’ capital	0.90%	0.90%
Average principal as percent of total assets	0.90%	0.90%
Largest secured loan - principal (in Dollars)	$ 3,200,000	$ 3,239,124
Largest principal as percent of total principal	5.50%	5.90%
Largest principal as percent of members’ capital	4.70%	5.00%
Largest principal as percent of total assets	4.70%	5.10%
Smallest secured loan - principal (in Dollars)	$ 94,425	$ 52,562
Smallest principal as percent of total principal	0.20%	0.10%
Smallest principal as percent of members’ capital	0.10%	0.10%
Smallest principal as percent of total assets	0.10%	0.10%
Number of California counties where security is located | Country	17	16
Largest percentage of principal in one California county	18.80%	22.60%
Secured loans in foreclosure - principal (in Dollars)	$ 139,162	$ 139,643
Minimum [Member]
Secured Loan Transactions [Line Items]
Secured loans – interest rate (fixed)	6.90%	6.90%
Maximum [Member]
Secured Loan Transactions [Line Items]
Secured loans – interest rate (fixed)	10.50%	10.50%
Filed Notice of Default [Member]
Secured Loan Transactions [Line Items]
Number of secured loans | MortgageLoan	1	1

XML

Loans - Secured Loans by Lien Position in the Collateral (Details)		3 Months Ended	12 Months Ended
		Mar. 31, 2018 USD ($) MortgageLoan	Dec. 31, 2017 USD ($) MortgageLoan
Loans (Details) - Secured Loans by Lien Position in the Collateral [Line Items]
Loans | MortgageLoan		93	93
Loans - principal (in Dollars)		$ 57,865,391	$ 54,768,689
Liens due other lenders at loan closing		37,901,684	31,545,806
Total debt		95,767,075	86,314,495
Appraised property value at loan closing		$ 197,444,000	$ 181,018,000
Percent of total debt to appraised values (LTV) at loan closing	[1]	53.70%	53.50%
Loans - percent		100.00%	100.00%
First Trust Deeds [Member]
Loans (Details) - Secured Loans by Lien Position in the Collateral [Line Items]
Loans | MortgageLoan		56	60
Loans - principal (in Dollars)		$ 35,087,060	$ 37,032,195
Loans - percent		61.00%	68.00%
Second Trust Deeds [Member]
Loans (Details) - Secured Loans by Lien Position in the Collateral [Line Items]
Loans | MortgageLoan		37	33
Loans - principal (in Dollars)		$ 22,778,331	$ 17,736,494
Loans - percent		39.00%	32.00%

[1] Based on appraised values and liens due other lenders at loan closing. The weighted-average loan-to-value (LTV) computation above does not take into account subsequent increases or decreases in property values following the loan closing nor does it include decreases or increases of the amount owing on senior liens to other lenders.

XML

Loans - Secured Loans by Property Type (Details)		3 Months Ended	12 Months Ended
		Mar. 31, 2018 USD ($) MortgageLoan	Dec. 31, 2017 USD ($) MortgageLoan
Loans (Details) - Secured Loans by Property Type [Line Items]
Loans | MortgageLoan		93	93
Loans - principal (in Dollars) | $		$ 57,865,391	$ 54,768,689
Loans - percent		100.00%	100.00%
Single Family [Member]
Loans (Details) - Secured Loans by Property Type [Line Items]
Loans | MortgageLoan	[1]	65	67
Loans - principal (in Dollars) | $	[1]	$ 37,929,509	$ 37,615,216
Loans - percent	[1]	66.00%	69.00%
Multifamily [Member]
Loans (Details) - Secured Loans by Property Type [Line Items]
Loans | MortgageLoan		8	5
Loans - principal (in Dollars) | $		$ 5,337,203	$ 2,164,861
Loans - percent		9.00%	4.00%
Commercial [Member]
Loans (Details) - Secured Loans by Property Type [Line Items]
Loans | MortgageLoan		20	21
Loans - principal (in Dollars) | $		$ 14,598,679	$ 14,988,612
Loans - percent		25.00%	27.00%

[1] Single family property type as of March 31, 2018 consists of 11 loans with principal of $6,506,239 that are owner occupied and 54 loans with principal of $31,423,270 that are non-owner occupied. At December 31, 2017, single family property consisted of 10 loans with principal of $6,309,036 that are owner occupied and 57 loans with principal of $31,306,180 that are non-owner occupied.

XML

Loans - Secured Loans by Property Type (Parenthetical) (Details)	3 Months Ended	12 Months Ended
	Mar. 31, 2018 USD ($) MortgageLoan	Dec. 31, 2017 USD ($) MortgageLoan
Loans (Details) - Secured Loans by Property Type [Line Items]
Number of secured loans | MortgageLoan	93	93
Principal | $	$ 57,865,391	$ 54,768,689
Single Family Property-Owner Occupied [Member]
Loans (Details) - Secured Loans by Property Type [Line Items]
Number of secured loans | MortgageLoan	11	10
Principal | $	$ 6,506,239	$ 6,309,036
Single Family Property-NonOwner Occupied [Member]
Loans (Details) - Secured Loans by Property Type [Line Items]
Number of secured loans | MortgageLoan	54	57
Principal | $	$ 31,423,270	$ 31,306,180

XML

Loans - Secured Loans Distributed Within California (Details) - USD ($)		Mar. 31, 2018	Dec. 31, 2017
Loans (Details) - Secured Loans Distributed Within California [Line Items]
Loans - principal (in Dollars)		$ 57,865,391	$ 54,768,689
Loans - percent		100.00%	100.00%
Alameda [Member]
Loans (Details) - Secured Loans Distributed Within California [Line Items]
Loans - principal (in Dollars)	[1]	$ 8,993,618	$ 9,869,036
Loans - percent	[1]	15.50%	18.00%
San Francisco [Member]
Loans (Details) - Secured Loans Distributed Within California [Line Items]
Loans - principal (in Dollars)	[1]	$ 7,755,285	$ 8,338,720
Loans - percent	[1]	13.40%	15.10%
San Mateo [Member]
Loans (Details) - Secured Loans Distributed Within California [Line Items]
Loans - principal (in Dollars)	[1]	$ 8,554,723	$ 7,800,549
Loans - percent	[1]	14.80%	14.20%
Santa Clara [Member]
Loans (Details) - Secured Loans Distributed Within California [Line Items]
Loans - principal (in Dollars)	[1]	$ 7,111,703	$ 5,461,084
Loans - percent	[1]	12.30%	10.00%
Solano [Member]
Loans (Details) - Secured Loans Distributed Within California [Line Items]
Loans - principal (in Dollars)	[1]		$ 109,443
Loans - percent	[1]		0.20%
Contra Costa [Member]
Loans (Details) - Secured Loans Distributed Within California [Line Items]
Loans - principal (in Dollars)	[1]	$ 1,064,345	$ 1,511,195
Loans - percent	[1]	1.80%	2.80%
Sonoma [Member]
Loans (Details) - Secured Loans Distributed Within California [Line Items]
Loans - principal (in Dollars)	[1]	$ 1,285,000
Loans - percent	[1]	2.20%
San Francisco Bay Area [Member]
Loans (Details) - Secured Loans Distributed Within California [Line Items]
Loans - principal (in Dollars)	[1]	$ 34,764,674	$ 33,090,027
Loans - percent	[1]	60.00%	60.30%
Placer [Member]
Loans (Details) - Secured Loans Distributed Within California [Line Items]
Loans - principal (in Dollars)		$ 641,571	$ 642,913
Loans - percent		1.10%	1.20%
San Joaquin [Member]
Loans (Details) - Secured Loans Distributed Within California [Line Items]
Loans - principal (in Dollars)		$ 156,696	$ 157,039
Loans - percent		0.30%	0.30%
Yolo [Member]
Loans (Details) - Secured Loans Distributed Within California [Line Items]
Loans - principal (in Dollars)		$ 169,915	$ 174,758
Loans - percent		0.30%	0.30%
Sacramento [Member]
Loans (Details) - Secured Loans Distributed Within California [Line Items]
Loans - principal (in Dollars)		$ 850,000	$ 850,000
Loans - percent		1.50%	1.60%
Other Northern California [Member]
Loans (Details) - Secured Loans Distributed Within California [Line Items]
Loans - principal (in Dollars)		$ 1,818,182	$ 1,824,710
Loans - percent		3.20%	3.40%
Northern California [Member]
Loans (Details) - Secured Loans Distributed Within California [Line Items]
Loans - principal (in Dollars)		$ 36,582,856	$ 34,914,737
Loans - percent		63.20%	63.70%
Los Angeles [Member]
Loans (Details) - Secured Loans Distributed Within California [Line Items]
Loans - principal (in Dollars)		$ 10,871,240	$ 12,357,456
Loans - percent		18.80%	22.60%
San Diego [Member]
Loans (Details) - Secured Loans Distributed Within California [Line Items]
Loans - principal (in Dollars)		$ 2,004,547	$ 2,192,746
Loans - percent		3.50%	4.00%
Orange [Member]
Loans (Details) - Secured Loans Distributed Within California [Line Items]
Loans - principal (in Dollars)		$ 4,594,372	$ 1,487,747
Loans - percent		7.90%	2.70%
Ventura [Member]
Loans (Details) - Secured Loans Distributed Within California [Line Items]
Loans - principal (in Dollars)		$ 349,291	$ 350,000
Loans - percent		0.60%	0.60%
Los Angeles & Coastal [Member]
Loans (Details) - Secured Loans Distributed Within California [Line Items]
Loans - principal (in Dollars)		$ 18,814,224	$ 17,384,717
Loans - percent		32.50%	31.70%
Santa Barbara [Member]
Loans (Details) - Secured Loans Distributed Within California [Line Items]
Loans - principal (in Dollars)		$ 994,774	$ 996,768
Loans - percent		1.70%	1.80%
Riverside [Member]
Loans (Details) - Secured Loans Distributed Within California [Line Items]
Loans - principal (in Dollars)		$ 358,311	$ 359,235
Loans - percent		0.60%	0.70%
San Bernardino [Member]
Loans (Details) - Secured Loans Distributed Within California [Line Items]
Loans - principal (in Dollars)		$ 2,110,000	$ 2,110,000
Loans - percent		3.70%	3.90%
Other Southern California [Member]
Loans (Details) - Secured Loans Distributed Within California [Line Items]
Loans - principal (in Dollars)		$ 2,468,311	$ 2,469,235
Loans - percent		4.30%	4.60%
Southern California [Member]
Loans (Details) - Secured Loans Distributed Within California [Line Items]
Loans - principal (in Dollars)		$ 21,282,535	$ 19,853,952
Loans - percent		36.80%	36.30%

[1] Includes Silicon Valley

XML

Loans - Secured Loans Scheduled Maturities (Details)		3 Months Ended	12 Months Ended
		Mar. 31, 2018 USD ($) MortgageLoan	Dec. 31, 2017 USD ($) MortgageLoan
Secured Loans Scheduled Maturities [Abstract]
2018, Loans | MortgageLoan	[1]	13
2019, Loans | MortgageLoan		37
2020, Loans | MortgageLoan		18
2021, Loans | MortgageLoan		9
2022, Loans | MortgageLoan		11
Thereafter, Loans | MortgageLoan		4
Total future maturities, Loans | MortgageLoan		92
Matured as of March 31, 2018, Loans | MortgageLoan		1
Number of secured loans | MortgageLoan		93	93
2018, Principal | $	[1]	$ 15,156,189
2019, Principal | $		25,167,665
2020, Principal | $		8,254,558
2021, Principal | $		4,244,110
2022, Principal | $		3,469,122
Thereafter, Principal | $		1,434,585
Total future maturities, Principal | $		57,726,229
Matured as of March 31, 2018, Principal | $		139,162
Total secured loan balance, Principal | $		$ 57,865,391	$ 54,768,689
2018, Percent	[1]	26.00%
2019, Percent		43.00%
2020, Percent		14.00%
2021, Percent		7.00%
2022, Percent		6.00%
Thereafter, Percent		3.00%
Total future maturities, Percent		99.00%
Matured as of March 31, 2018, Percent		1.00%
Total secured loan balance, Percent		100.00%	100.00%

[1] Loans maturing in 2018 from April 1 to December 31.

XML

Loans - Past Due Financing Receivables (Details)	Mar. 31, 2018 USD ($) Loan	Dec. 31, 2017 USD ($) Loan
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loans | Loan	93	93
Amount | $	$ 57,865,391	$ 54,768,689
Past Due 30-89 Days [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loans | Loan	4	3
Amount | $	$ 1,324,345	$ 1,259,100
Past Due 180 Or More Days [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loans | Loan	1	1
Amount | $	$ 139,162	$ 139,643
Total Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loans | Loan	5	4
Amount | $	$ 1,463,507	$ 1,398,743
Current [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Number of loans | Loan	88	89
Amount | $	$ 56,401,884	$ 53,369,946

XML

Loans - Secured Loans in Non-Accrual Status (Details)	3 Months Ended	12 Months Ended
	Mar. 31, 2018 USD ($) MortgageLoan	Dec. 31, 2017 USD ($) MortgageLoan
Loans Details Secured Loans In Nonaccrual Status [Line Items]
Number of secured loans | MortgageLoan	93	93
Loans - principal (in Dollars)	$ 57,865,391	$ 54,768,689
Accrued interest	$ 426,538	$ 409,867
Non-Accrual Status [Member]
Loans Details Secured Loans In Nonaccrual Status [Line Items]
Number of secured loans | MortgageLoan	1	1
Loans - principal (in Dollars)	$ 152,405	$ 151,637
Accrued interest	8,874	11,025
Foregone interest	7,535	4,306
Principal [Member] | Non-Accrual Status [Member]
Loans Details Secured Loans In Nonaccrual Status [Line Items]
Loans - principal (in Dollars)	139,162	139,643
Advances [Member] | Non-Accrual Status [Member]
Loans Details Secured Loans In Nonaccrual Status [Line Items]
Loans - principal (in Dollars)	$ 4,369	$ 969

XML

Loans - Schedule of Impaired Loans/Allowance for Loan Losses (Details)		3 Months Ended	12 Months Ended
		Mar. 31, 2018 USD ($) Loan	Dec. 31, 2017 USD ($) Loan
Secured Loans Designated as Impaired Loans [Abstract]
Principal		$ 139,162	$ 139,643
Recorded investment	[1]	152,405	151,637
Impaired loans without allowance		$ 152,405	$ 151,637
Number of loans | Loan		1	1

[1] Recorded investment is the sum of the principal, advances, and interest accrued for financial reporting purposes.

XML

Loans - Impaired Loans - Average Balances and Interest Income (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Impaired Loans - Average Balances and Interest Income [Abstract]
Average recorded investment	$ 152,021	$ 536,934
Interest income recognized		8,602
Interest income received in cash	$ 3,224	$ 4,342

XML

Commitment and Contingencies, Other Than Loan Commitments - Additional Information (Details)	3 Months Ended
	Mar. 31, 2018 USD ($) ContractualObligation
Commitments And Contingencies Disclosure [Abstract]
Number of contractual obligations | ContractualObligation	2
O&O expenses incurred by RMC and cash remaining to be reimbursed	$ 3,210,028
Redemptions of members' capital	$ 393,124

XML

Commitments and Contingencies, Other Than Loan Commitments - Scheduled Redemptions of Members' Capital (Details)	3 Months Ended
	Mar. 31, 2018 USD ($)
Scheduled Redemptions Of Members Capital [Abstract]
2018	$ 365,958
2019	12,000
2020	12,000
2021	3,166
Total	$ 393,124