10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2016

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number 000-54369

Resource Real Estate Opportunity REIT, Inc.

(Exact name of registrant as specified in its charter)

Maryland	27-0331816
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
1845 Walnut Street, 18th Floor, Philadelphia, PA 19103
(Address of principal executive offices) (Zip code)
(215) 231-7050
(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 þ No o

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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

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

Large accelerated filer	o		Accelerated filer	o
Non-accelerated filer	þ	(Do not check if a smaller reporting company)	Smaller reporting company	o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No þ

As of August 5, 2016, there were 71,713,289 outstanding shares of common stock of Resource Real Estate Opportunity REIT, Inc.

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

INDEX TO ANNUAL REPORT

ON FORM 10-Q

		PAGE
PART 1	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Balance Sheets - June 30, 2016 (unaudited) and December 31, 2015	3
	Consolidated Statements of Operations and Comprehensive (Loss) Income - Three and Six Months Ended June 30, 2016 and 2015 (unaudited)	4
	Consolidated Statement of Changes in Equity - Six Months Ended June 30, 2016 (unaudited)	5
	Consolidated Statements of Cash Flows - Six Months Ended June 30, 2016 and 2015 (unaudited)	6
	Notes to Consolidated Financial Statements - June 30, 2016 (unaudited)	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	35
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	52
Item 4.	Controls and Procedures	52
PART II
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	53
Item 3.	Defaults Upon Senior Securities	53
Item 6.	Exhibits	54
SIGNATURES		55

Forward-Looking Statements

Certain statements included in this Quarterly Report on Form 10-Q are forward-looking statements.  Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts.  In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “could,” “estimate,” “expects,” “intend,” “may,” “plan,” “potential,” “project,” “should,” “will” and “would” or the negative of these terms or other comparable terminology.  Actual results may differ materially from those contemplated by such forward-looking statements.  Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.  We undertake no obligation to publicly revise or update these forward-looking statements to reflect events or circumstances after the date of this report, except as may be required under applicable law.

PART 1.     FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

CONSOLIDATED BALANCE SHEETS (in thousands, except share data)

	June 30, 2016			December 31, 2015
	(unaudited)
ASSETS
Investments:
Rental properties, net	$	849,696		$	916,498
Other investments	764			4,643
Identified intangible assets, net	154			374
Assets held for sale - rental properties, net	26,602			69,350
Total investments	877,216			990,865
Cash	82,192			78,442
Restricted cash	6,422			9,987
Due from related parties	2,004			1,421
Tenant receivables, net	141			211
Deposits	191			230
Prepaid expenses and other assets	4,824			2,227
Goodwill	711			1,231
Other assets associated with rental properties held for sale	—			81
Total assets	$	973,701		$	1,084,695
LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net	$	538,273		$	591,545
Credit facility	5,394			21,894
Accounts payable	5,351			1,583
Accrued expenses and other liabilities	5,944			7,932
Accrued real estate taxes	5,321			6,856
Due to related parties	1,477			1,185
Tenant prepayments	922			1,212
Security deposits	2,553			2,626
Other liabilities associated with rental properties held for sale	—			16,763
Total liabilities	565,235			651,596
Equity:
Preferred stock (par value $.01; 10,000,000 shares authorized, none issued)	—			—
Common stock (par value $.01; 1,000,000,000 shares authorized;73,674,067 and 72,333,652 shares issued, respectively; and 71,495,449 and 71,617,117 shares outstanding, respectively)	715			716
Convertible stock (“promote shares”; par value $.01; 50,000 shares authorized, issued and outstanding)	1			1
Additional paid-in capital	636,992			638,335
Accumulated other comprehensive loss	(391		)	(440		)
Accumulated deficit	(230,277		)	(213,366		)
Total stockholders’ equity	407,040			425,246
Noncontrolling interests	1,426			7,853
Total equity	408,466			433,099
Total liabilities and equity	$	973,701		$	1,084,695

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

3

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

(in thousands, except per share data)

(unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2015			2016			2015
Revenues:
Rental income	$	30,357		$	28,250		$	60,748		$	55,821
Interest and dividend income	364			162			529			325
Total revenues	30,721			28,412			61,277			56,146
Expenses:
Rental operating - expenses	7,251			7,857			14,860			15,792
Rental operating - payroll	3,731			3,974			7,588			8,181
Rental operating - real estate taxes	3,401			3,438			7,027			6,456
Subtotal - Rental operating expenses	14,383			15,269			29,475			30,429
Acquisition costs	—			4,108			—			5,809
Management fees	4,032			3,719			8,087			7,180
General and administrative	2,980			3,359			6,495			6,881
Loss on disposal of assets	144			1,372			286			2,481
Provision for loan loss	—			130			—			130
Depreciation and amortization expense	10,945			12,059			22,339			22,356
Total expenses	32,484			40,016			66,682			75,266
Loss before other income (expense)	(1,763		)	(11,604		)	(5,405		)	(19,120		)
Other income (expense):
Net gains on dispositions of properties and joint venture interests	9,701			4,376			27,456			33,551
Interest expense	(5,582		)	(5,408		)	(11,355		)	(10,275		)
Insurance proceeds in excess of cost basis	71			160			211			407
Total other income (expense)	4,190			(872		)	16,312			23,683
Net income (loss)	2,427			(12,476		)	10,907			4,563
Net (income) loss attributable to noncontrolling interests	(25		)	192			(6,306		)	181
Net income (loss) attributable to stockholders	$	2,402		$	(12,284	)	$	4,601		$	4,744
Net income (loss)	$	2,427		$	(12,476	)	$	10,907		$	4,563
Other comprehensive (loss) income:
Reclassification adjustment for realized loss on derivative due to sale	—			—			72			—
Designated derivatives, fair value adjustments	(7		)	(41		)	(23		)	(125		)
Total other comprehensive (loss) income	(7		)	(41		)	49			(125		)
Comprehensive income (loss)	2,420			(12,517		)	10,956			4,438
Comprehensive (income) loss attributable to noncontrolling interests	(25		)	192			(6,306		)	181
Total comprehensive income (loss) attributable to stockholders	$	2,395		$	(12,325	)	$	4,650		$	4,619
Weighted average common shares outstanding	72,005			70,107			71,862			69,798
Basic and diluted income per common share:
Net income (loss) per common share	$	0.03		$	(0.18	)	$	0.06		$	0.07

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

4

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED JUNE 30, 2016

(in thousands)

(unaudited)

	Common Stock					Convertible Stock			Additional Paid-in Capital			Accumulated Other Comprehensive (Loss) Income			Accumulated Deficit			Total Stockholders’ Equity			Noncontrolling interests			Total Equity
	Shares		Amount			Shares	Amount
Balance at January 1, 2016	71,617		$	716		50	$	1	$	638,335		$	(440	)	$	(213,366	)	$	425,246		$	7,853		$	433,099
Common stock issued through distribution reinvestment plan	1,340		13			—	—		14,394			—			—			14,407			—			14,407
Distributions on common stock	—		—			—	—		—			—			(21,512		)	(21,512		)	—			(21,512		)
Common stock redemptions	(1,462	)	(14		)	—	—		(15,737		)	—			—			(15,751		)	—			(15,751		)
Other comprehensive income	—		—			—	—		—			49			—			49			—			49
Deconsolidation of subsidiaries	—		—			—	—		—			—			—			—			(3,613		)	(3,613		)
Distribution to noncontrolling interests	—		—			—	—		—			—			—			—			(9,120		)	(9,120		)
Net income	—		—			—	—		—			—			4,601			4,601			6,306			10,907
Balance at June 30, 2016	71,495		$	715		50	$	1	$	636,992		$	(391	)	$	(230,277	)	$	407,040		$	1,426		$	408,466

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

5

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited)
	Six Months Ended
	June 30,
	2016			2015
Cash flows from operating activities:
Net income	$	10,907		$	4,563
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Loss on disposal of assets	286			2,481
Casualty losses	80			—
Provision for loan loss	—			130
Net gains on dispositions of properties and joint venture interests	(27,456		)	(33,551		)
Depreciation and amortization	22,339			22,356
Amortization of deferred financing costs	1,232			906
Amortization of fair value adjustment of debt	(242		)	(374		)
Realized loss on change in fair value of interest rate cap	72			—
Accretion of discount and direct loan fees and costs	(22		)	(17		)
Changes in operating assets and liabilities, net of acquisitions:
Restricted cash	1,711			906
Tenant receivables, net	3			168
Deposits	6			(38		)
Prepaid expenses and other assets	(788		)	(17		)
Due to/from related parties, net	(611		)	(1,101		)
Accounts payable and accrued expenses	44			(1,286		)
Tenant prepayments	(237		)	(172		)
Security deposits	157			55
Net cash provided by (used in) operating activities	7,481			(4,991		)
Cash flows from investing activities:
Proceeds from disposal of properties and joint venture interests, net of closing costs	56,444			55,051
Property acquisitions	—			(96,953		)
Insurance proceeds received for casualty losses	178			—
Acquisition of preferred equity interest	(408		)	—
Sale of preferred equity interest	4,300			—
Capital expenditures	(13,291		)	(17,465		)
Restricted cash	1,191			(690		)
Principal payments received on loans held for investment	9			591
Net cash provided by (used in) investing activities	48,423			(59,466		)

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

6

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS - (Continued) (in thousands) (unaudited)
	Six Months Ended
	June 30,
	2016			2015
Cash flows from financing activities:
Redemptions of common stock	$	(15,751	)	$	(1,849	)
Payment of deferred financing costs	(170		)	(402		)
Increase in borrowings on mortgages	12,296			26,280
Principal payments on borrowings on mortgages	(15,804		)	(2,926		)
Proceeds from borrowings on credit facility	12,500			30,918
Payments on credit facility	(29,000		)	(20,288		)
Distributions paid on common stock	(7,105		)	(6,496		)
Contributions of noncontrolling interests	—			151
Purchase of interest rate caps	—			(91		)
Distributions to noncontrolling interests	(9,120		)	—
Net cash (used in) provided by financing activities	(52,154		)	25,297
Net increase (decrease) in cash	3,750			(39,160		)
Cash at beginning of period	78,442			140,129
Cash at end of period	$	82,192		$	100,969

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

7

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2016

(unaudited)

NOTE 1 - NATURE OF BUSINESS AND OPERATIONS

Resource Real Estate Opportunity REIT, Inc. (the “Company”) was organized in Maryland on June 3, 2009 to purchase a diversified portfolio of discounted U.S. commercial real estate and real estate-related assets in order to generate gains to stockholders from the potential appreciation in the value of the assets and to generate current income for stockholders by distributing cash flow from the Company’s investments. Resource Real Estate Opportunity Advisor, LLC (the “Advisor”), an indirect wholly-owned subsidiary of Resource America, Inc. (“RAI”), a publicly traded company (NASDAQ: REXI) operating in the real estate, financial fund management and commercial finance sectors, has been engaged to manage the day-to-day operations of the Company. 

Through its private offering and primary public offering, which concluded on December 13, 2013, the Company raised aggregate gross offering proceeds of $645.8 million, which resulted in the issuance of 64.9 million shares of common stock, including 276,056 shares purchased by the Advisor and 1.2 million shares sold in the Company's distribution reinvestment plan. During the years ended December 31, 2015 and 2014, the Company issued 5.3 million additional shares for $51.9 million pursuant to its distribution reinvestment plan. During the six months ended June 30, 2016, the Company additionally issued 1.3 million shares for $14.4 million pursuant to its distribution reinvestment plan. The Company's distribution reinvestment plan offering is ongoing.

The Company has acquired, and may continue to acquire, real estate-related debt and equity. The Company has a particular focus on acquiring and operating multifamily assets, and it has targeted, and intends to continue to target, this asset class while also possibly acquiring interests in other types of commercial property assets consistent with its investment objectives.  The Company’s targeted portfolio consists of commercial real estate assets, principally (i) multifamily rental properties purchased as non-performing or distressed loans or as real estate that was foreclosed upon and sold by financial institutions and (ii) multifamily rental properties to which the Company can add value with a capital infusion (referred to as “value add properties”).  However, the Company is not limited in the types of real estate assets in which it may invest and, accordingly, it may invest in other real estate-related assets either directly or together with a co-investor or joint venture partner.

The Company is organized and conducts its operations in a manner intended to allow it to qualify as a real estate investment trust (“REIT”) for U.S. federal income tax purposes under Subchapter M of the Internal Revenue Code of 1986, as amended.  The Company also operates its business in a manner intended to maintain its exemption from registration under the Investment Company Act of 1940, as amended.

The consolidated financial statements and the information and tables contained in the notes to the consolidated financial statements are unaudited. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). However, in the opinion of management, these interim financial statements include all the necessary adjustments to fairly present the results of the interim periods presented. The consolidated balance sheet as of December 31, 2015 was derived from the audited consolidated financial statements as of and for the year ended December 31, 2015. The unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. The results of operations for the six months ended June 30, 2016 may not necessarily be indicative of the results of operations for the full year ending December 31, 2016.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summary of the significant accounting policies consistently applied in the preparation of the accompanying consolidated financial statements follows:

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries as follows:

Subsidiary	Apartment Complex	Number of Units	Property Location
RRE Opportunity Holdings, LLC	N/A	N/A	N/A
Resource Real Estate Opportunity OP, LP	N/A	N/A	N/A
RRE Charlemagne Holdings, LLC	N/A	N/A	N/A

8

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

JUNE 30, 2016

(unaudited)

RRE Iroquois, LP (“Vista”)	Vista Apartment Homes	133	Philadelphia, PA
RRE Iroquois Holdings, LLC	N/A	N/A	N/A
RRE Cannery Holdings, LLC (“Cannery”)	Cannery Lofts	156	Dayton, OH
RRE Williamsburg Holdings, LLC (“Williamsburg”)	Williamsburg	976	Cincinnati, OH
WPL Holdings, LLC	N/A (a)	N/A	Cincinnati, OH
RRE Park Forest Holdings, LLC ("Park Forest")	Mosaic	216	Oklahoma City, OK
RRE Deerfield Holdings, LLC ("Deerfield")	Deerfield	166	Hermantown, MN
RRE Autumn Wood Holdings, LLC ("Autumn Wood")	Retreat at Rocky Ridge	206	Hoover, AL
RRE Village Square Holdings, LLC ("Village Square")	Trailpoint at the Woodlands	271	Houston, TX
RRE Brentdale Holdings, LLC ("Brentdale")	The Westside Apartments	412	Plano, TX
RRE Jefferson Point Holdings, LLC ("Jefferson Point")	Tech Center Square	208	Newport News, VA
RRE Centennial Holdings, LLC ("Centennial")	Verona Apartment Homes	276	Littleton, CO
RRE Pinnacle Holdings, LLC ("Pinnacle")	Skyview Apartment Homes	224	Westminster, CO
RRE Jasmine Holdings, LLC ("Jasmine")	The Nesbit Palisades	437	Alpharetta, GA
RRE River Oaks Holdings, LLC ("River Oaks")	Maxwell Townhomes	314	San Antonio, TX
RRE Nicollet Ridge Holdings, LLC ("Nicollet Ridge")	Meridian Pointe	339	Burnsville, MN
RRE Addison Place Holdings, LLC ("Addison Place")	The Estates at Johns Creek	403	Alpharetta, GA
PRIP Coursey, LLC ("Evergreen at Coursey Place")	Evergreen at Coursey Place (b)	352	Baton Rouge, LA
PRIP 500, LLC ("Pinehurst")	Pinehurst (b)	146	Kansas City, MO
PRIP 1102, LLC ("Pheasant Run")	Pheasant Run (b)	160	Lee's Summit, MO
PRIP 11128, LLC ("Retreat at Shawnee")	Retreat at Shawnee (b)	342	Shawnee, KS
PRIP Stone Ridge, LLC ("Stone Ridge")	N/A (b)	N/A	N/A
PRIP Pines, LLC ("Pines of York")	Pines of York (b)	248	Yorktown, VA
RRE Chisholm Place Holdings LLC ("Chisholm Place")	Chisholm Place	142	Plano, TX
RRE Berkeley Run Holdings, LLC ("Berkley Run")	Perimeter Circle	194	Atlanta, GA
RRE Berkeley Trace Holdings LLC ("Berkley Trace")	Perimeter 5550	165	Atlanta, GA
RRE Merrywood Holdings, LLC ("Merrywood")	Aston at Cinco Ranch	228	Katy, TX
RRE Sunset Ridge Holdings, LLC ("Sunset Ridge")	Sunset Ridge	324	San Antonio, TX
RRE Parkridge Place Holdings, LLC ("Parkridge Place")	Calloway at Las Colinas	536	Irving, TX
RRE Woodmoor Holdings, LLC ("Woodmoor")	South Lamar Village	208	Austin, TX
RRE Gilbert Holdings, LLC ("Springs at Gilbert")	Heritage Pointe	458	Gilbert, AZ
RRE Bonita Glen Holdings, LLC ("Bonita")	Villages at Bonita Glen	295	Chula Vista, CA
RRE Yorba Linda Holdings, LLC ("Yorba Linda")	Yorba Linda	400	Yorba Linda, CA
		8,935
Subsidiaries related to disposed investments:
RRE Crestwood Holdings, LLC (“Crestwood”)	(c)	N/A	N/A
RRE 107th Avenue Holdings, LLC (“107th Avenue”)	(c)	N/A	N/A
RRE Westhollow Holdings, LLC (“Westhollow”)	(c)	N/A	N/A
RRE Campus Club Holdings, LLC (“Campus Club”)	(c)	N/A	N/A
RRE Bristol Holdings, LLC (“Bristol”)	(c)	N/A	N/A
RRE Skyview Holdings, LLC ("Skyview")	(c)	N/A	N/A
RRE Foxwood Holdings, LLC ("Foxwood")	(c)	N/A	N/A
RRE Flagstone Holdings, LLC ("Flagstone")	(c)	N/A	N/A
RRE Kenwick Canterbury Holdings, LLC ("Kenwick & Canterbury")	(c)	N/A	N/A
RRE Armand Place Holdings, LLC ("Armand")	(d)	N/A	N/A

9

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

JUNE 30, 2016

(unaudited)

PRIP 5060/6310, LLC ("Governor Park")	(b)(c)	N/A	N/A
PRIP 3700, LLC ("Champion Farms")	(b)(d)	N/A	N/A
PRIP 6700, LLC ("Hilltop Village")	(b)(c)	N/A	N/A
PRIP 3383, LLC ("Conifer Place")	(b)(d)	N/A	N/A
RRE Nob Hill Holdings, LLC ("Nob Hill")	(d)	N/A	N/A
RRE Spring Hill Holdings, LLC ("Spring Hill")	(e)	N/A	N/A
PRIP 10637, LLC ("Fieldstone")	(b)(d)	N/A	N/A

N/A - Not Applicable

(a) - Subsidiary holds a portion of the Williamsburg parking lot    

(b) - Wholly-owned subsidiary of RRE Charlemagne Holdings, LLC

(c) - Underlying investment sold prior to 2016

(d) - Underlying investment sold in 2016

(e) - Underlying investment resolved in 2016

All intercompany accounts and transactions have been eliminated in consolidation.

The consolidated financial statements reflect the Company's accounts and the accounts of the Company's majority-owned and/or controlled subsidiaries. The Company follows the provisions of Accounting Standards Codification (“ASC”) Topic 810, “Consolidation,” and accordingly consolidates entities that are variable interest entities (“VIEs”) where it has determined that it is the primary beneficiary of such entities. Once it has been determined that the Company holds a variable interest in a VIE, management performs a qualitative analysis to determine (i) if the Company has the power to direct the matters that most significantly impact the VIE's financial performance; and (ii) if the Company has the obligation to absorb the losses of the VIE that could potentially be significant to the VIE or the right to receive the benefits of the VIE that could potentially be significant to the VIE. If the Company's interest possesses both of these characteristics, the Company is deemed to be the primary beneficiary and would be required to consolidate the VIE. The Company will continually assess its involvement with VIEs and re-evaluate the requirement to consolidate them. For consolidated entities (including VIEs of which the Company is the primary beneficiary), noncontrolling interests are presented and disclosed as a separate component of stockholders' equity (not as a liability or other item outside of stockholders' equity). Consolidated net income (loss) includes the noncontrolling interests’ share of income (loss). All changes in the Company’s ownership interest in a subsidiary are accounted for as stockholders' equity transactions if the Company retains its controlling financial interest in the subsidiary. The portions of these entities that the Company does not own are presented as noncontrolling interests as of the dates and for the periods presented in the consolidated financial statements. The consolidated financial statements include the accounts of the Company's majority-owned and/or controlled subsidiaries, which are VIEs, as follows:

Subsidiary	Ownership %	Apartment Complex	Number of Units	Property Location
Springhurst Housing Partners, LLC (1)	70.0%	Champion Farms	N/A	Louisville, KY
Glenwood Housing Partners I, LLC (2)	83.0%	Fieldstone	N/A	Woodlawn, OH
FPA/PRIP Conifer, LLC (3)	42.5%	Conifer Place	N/A	Norcross, GA
DT Stone Ridge, LLC	83.4%	Stone Ridge	188	Columbia, SC

(1) On January 29, 2016, the Company sold its joint venture interest in Champion Farms to its joint venture partner. As such, the Company deconsolidated the entity as of January 29, 2016. The Company has no continuing involvement with this joint venture. (See Note 6)

(2) On June 30, 2016, the Company sold its joint venture interest in Fieldstone to its joint venture partner. As such, the Company deconsolidated the entity as of June 30, 2016. The Company has no continuing involvement with this joint venture. (See Note 6)

(3) On January 27, 2016, the Company and its joint venture partner sold the Conifer Place Apartments, which resulted in the deconsolidation of the entity as of January 27, 2016. (See Note 6)

The Company's preferred equity investment was a VIE for which the Company had determined it was not the primary beneficiary; therefore, the Company did not consolidate the entity. The Company was not considered the primary beneficiary of the preferred equity investee because it did not possess the unilateral power to direct the key activities of investee that were considered most significant.  Additional information with respect to the preferred equity investment is disclosed in Note 5.

10

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

JUNE 30, 2016

(unaudited)

Use of Estimates

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

Assets Held for Sale

The Company presents the assets and liabilities of any rental properties which qualify as held for sale, separately in the consolidated balance sheets. Real estate assets held for sale are measured at the lower of carrying amount or fair value less cost to sell. Both the real estate and the corresponding liabilities are presented separately in the consolidated balance sheets. Subsequent to classification of an asset as held for sale, no further depreciation is recorded. At December 31, 2015, the Company had three rental properties included in assets held for sale. At June 30, 2016, the Company had one rental property included in assets held for sale.

Rental Properties

The Company records acquired rental properties at fair value on their respective acquisition date. The Company considers the period of future benefit of an asset to determine its appropriate useful life and depreciates the rental properties using the straight line method.  The Company anticipates the estimated useful lives of its assets by class as follows:

Buildings	27.5 years
Building improvements	3.0 to 27.5 years
Tenant improvements	Shorter of lease term or expected useful life

Improvements and replacements in excess of $1,000 are capitalized when they extend the useful life of the asset. Resource Real Estate Opportunity Manager, LLC (the “Manager”), an affiliate of the Advisor, earns a construction management fee of 5% of actual aggregate costs to construct improvements, or to repair, rehab or reconstruct a property. These costs are capitalized along with the related asset. Costs of repairs and maintenance are expensed as incurred.

Impairment of Long Lived Assets

When circumstances indicate the carrying value of a property may not be recoverable, the Company reviews the asset for permanent impairment.  This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition.  The review also considers factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors.

An impairment loss will be recorded to the extent that the carrying value exceeds the estimated fair value of a property to be held and used.  For properties held for sale, the impairment loss would be the adjustment to fair value less the estimated cost to dispose of the asset.  There were no impairment charges during the three and six months ended June 30, 2016 and 2015.

Loans Held for Investment, Net

The Company records acquired performing loans held for investment at cost and reviews them for potential impairment at each balance sheet date.  The Company considers a loan to be impaired if one of two conditions exists.  The first condition is if, based on current information and events, management believes it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement.  The second condition is if the loan is deemed to be a troubled-debt restructuring (“TDR”) where a concession has been given to a borrower in financial difficulty.  A TDR may not have an associated specific loan loss allowance if the principal and interest amount is considered recoverable based on current market conditions, expected collateral performance and/or guarantees made by the borrowers.

The amount of impairment, if any, is measured by comparing the recorded amount of the loan to the present value of the expected cash flows or, as a practical expedient, the fair value of the collateral.  If a loan is deemed to be impaired, the Company records a reserve for loan losses through a charge to income for any shortfall.    

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RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

JUNE 30, 2016

(unaudited)

Interest income from performing loans held for investment is recognized based on the contractual terms of the loan agreement.  Fees related to any buy down of the interest rate are deferred as prepaid interest income and amortized over the term of the loan as an adjustment to interest income.  The initial investment made in a purchased performing loan includes the amount paid to the seller plus fees.  The initial investment frequently differs from the related loan’s principal amount at the date of the purchase.  The difference is recognized as an adjustment of the yield over the life of the loan.  Closing costs related to the purchase of a performing loan held for investment are amortized over the term of the loan and accreted as an adjustment to interest income.

The Company may acquire real estate loans at a discount due to the credit quality of such loans and the respective borrowers under such loans.  Revenues from these loans are recorded under the effective interest method.  Under this method, an effective interest rate (“EIR”) is applied to the cost basis of the real estate loan held for investment.  The EIR that is calculated when the loan held for investment is acquired remains constant and is the basis for subsequent impairment testing and income recognition.  However, if the amount and timing of future cash collections are not reasonably estimable, the Company accounts for the real estate receivable on the cost recovery method.  Under the cost recovery method of accounting, no income is recognized until the basis of the loan held for investment has been fully recovered.

Preferred Equity Investment

The Company recorded its preferred equity investments at amortized cost. Investments carried at amortized cost were evaluated for impairment at each reporting date. When an investment was impaired and that impairment was considered other than temporary, the amount of the loss accrual was calculated by comparing the carrying amount of the investment to its estimated fair value. This investment was repaid in full on June 6, 2016 (See Note 5).

Dividend income was recognized when earned based on the contractual terms of the preferred equity agreement. 

Allocation of the Purchase Price of Acquired and Foreclosed Assets

The cost of rental properties acquired directly as fee interests and through foreclosing on a loan are allocated to net tangible and intangible assets based on their relative fair values.  The Company allocates the purchase price of properties to acquired tangible assets, consisting of land, buildings, fixtures and improvements, and to identified intangible lease assets and liabilities, consisting of the value of above-market and below-market leases, as applicable, the value of in-place leases and the value of tenant relationships. Fair value estimates are based on information obtained from a number of sources, including information obtained about each property as a result of pre-acquisition due diligence, marketing and leasing activities.  In addition, the Company may obtain independent appraisal reports. The information in the appraisal reports along with the aforementioned information available to the Company's management is used in allocating the purchase price. The independent appraisers have no involvement in management's allocation decisions other than providing market information.

In allocating the purchase price, management also includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up period.  Management also estimates costs to execute similar leases, including leasing commissions and legal and other related expenses, to the extent that such costs have not already been incurred in connection with a new lease origination as part of the transaction.

The Company records above-market and below-market in-place lease values for acquired properties based on the present value (using an interest rate that reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of the lease.  The Company amortizes any capitalized above-market or below-market lease values as an increase or reduction to rental income over the remaining non-cancelable terms of the respective leases.    

The Company measures the aggregate value of other intangible assets acquired based on the difference between (i) the property valued with existing in-place leases adjusted to market rental rates and (ii) the property valued as if it were vacant.  Management’s estimates of value are made using methods similar to those used by independent appraisers (e.g., discounted cash flow analysis).  Factors to be considered by management in its analysis include an estimate of carrying costs during hypothetical expected lease-up periods considering current market conditions and costs to execute similar leases.

The total amount of other intangible assets acquired is further allocated to customer relationship intangible values based on management’s evaluation of the specific characteristics of each tenant’s lease and the Company’s overall relationship with that respective tenant.  Characteristics to be considered by management in allocating these values include the nature and extent of the

12

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

JUNE 30, 2016

(unaudited)

Company’s existing relationships with the tenant, the tenant’s credit quality and expectations of lease renewals (including those existing under the terms of the lease agreement), among other factors.

The Company amortizes the value of in-place leases to expense over the average remaining term of the respective leases.  The value of customer relationship intangibles are amortized to expense over the initial term and any renewal periods in the respective leases, but in no event will the amortization periods for the intangible assets exceed the remaining depreciable life of the building.  Should a tenant terminate its lease, the unamortized portion of the in-place lease value and customer relationship intangibles associated with that tenant would be charged to expense in that period.

The determination of the fair value of assets and liabilities acquired requires the use of significant assumptions with regard to current market rental rates, discount rates and other variables.  The use of inappropriate estimates would result in an incorrect assessment of the purchase price allocations, which could impact the amount of the Company’s reported net income.  Initial purchase price allocations are subject to change until all information is finalized, which is generally within one year of the acquisition date.

Goodwill

The Company records the excess of the cost of an acquired entity over the difference between the amounts assigned to assets acquired (including identified intangible assets) and liabilities assumed as goodwill. Goodwill is not amortized but is tested for impairment at a level of reporting referred to as a reporting unit during the fourth quarter of each calendar year, or more frequently if events or changes in circumstances indicate that the asset might be impaired.

Revenue Recognition

The Company recognizes minimum rent, including rental abatements and contractual fixed increases attributable to operating leases, on a straight-line basis over the term of the related lease and includes amounts expected to be received in later years in deferred rents.  

The future minimum rental payments to be received from noncancelable operating leases for residential rental properties are $51.2 million and $346,000 for the 12 month periods ending June 30,2017 and 2018, respectively, and none thereafter. The future minimum rental payments to be received from noncancelable operating leases for commercial rental properties and antenna rentals are $362,000, $253,000, $169,000, $120,000, $11,000, and $0 for the 12 month periods ending June 30,2017, 2018, 2019, 2020, 2021, and thereafter, respectively.

Revenue is primarily derived from the rental of residential housing units, however, included within rental income are other income such as pet fees, parking fees, and late fees, as well as property operating expense reimbursements due from tenants for common area maintenance, real estate taxes and other recoverable costs. The Company records the ancillary charges in the period they are earned or received and records the reimbursements in the period in which the related expenses are incurred. Total other income included within rental income was $2.8 million and $2.5 million for the three months ended June 30, 2016 and 2015, respectively. Total other income included within rental income was $5.6 million and $4.5 million for the six months ended June 30, 2016 and 2015, respectively.

Tenant Receivables

Tenant receivables are stated in the financial statements as amounts due from tenants net of an allowance for uncollectible receivables.  Payment terms vary and receivables outstanding longer than the payment terms are considered past due.  The Company determines its allowance by considering a number of factors, including the length of time receivables are past due, security deposits held, the Company’s previous loss history, the tenants’ current ability to pay their obligations to the Company, the condition of the general economy and the industry as a whole.  The Company writes off receivables when they become uncollectible.  At June 30, 2016 and December 31, 2015, there were allowances for uncollectible receivables of $4,399 and $24,100, respectively.

Income Taxes

To maintain its REIT qualification for U.S. federal income tax purposes, the Company is generally required to distribute at least 90% of its taxable net income (excluding net capital gains) to its stockholders as well as comply with other requirements, including certain asset, income and stock ownership tests.  As a REIT, the Company is not subject to federal corporate income tax to the extent that it distributes 100% of its REIT taxable income each year.  If the Company fails to qualify as a REIT, and does not qualify for certain statutory relief provisions, it is subject to U.S. federal, state and local income taxes and may be precluded

13

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

JUNE 30, 2016

(unaudited)

from qualifying as a REIT for the subsequent four taxable years following the year in which it fails its REIT qualification.  Accordingly, the Company’s failure to qualify as a REIT could have a material adverse impact on its results of operations and amounts available for distribution to its stockholders.

The dividends-paid deduction of a REIT for qualifying dividends to its stockholders is computed using the Company’s taxable income as opposed to net income reported on the financial statements.  Generally, taxable income differs from net income reported on the financial statements because the determination of taxable income is based on tax provisions and not financial accounting principles.

The Company may elect to treat certain of its subsidiaries as taxable REIT subsidiaries (“TRS”). In general, the Company’s TRSs may hold assets and engage in activities that the Company cannot hold or engage in directly and generally may engage in any real estate or non-real estate-related business.  A TRS is subject to U.S. federal, state and local corporate income taxes.  As of June 30, 2016 and December 31, 2015, the Company had no TRSs.

The Company evaluates the benefits from tax positions taken or expected to be taken in its tax return. Only the largest amount of benefits from tax positions that will more likely than not be sustainable upon examination are recognized by the Company.  The Company does not have any unrecognized tax benefits, nor interest and penalties, recorded in its consolidated financial statements and does not anticipate significant adjustments to the total amount of unrecognized tax benefits within the next 12 months.

The Company is subject to examination by the U.S. Internal Revenue Service and by the taxing authorities in other states in which the Company has significant business operations.  The Company is not currently undergoing any examinations by taxing authorities. The Company is not subject to IRS examination for tax return years 2011 and prior.

Earnings Per Share

Basic earnings per share are calculated on the basis of the weighted-average number of common shares outstanding during the year. Basic earnings per share are computed by dividing income available to common stockholders by the weighted-average common shares outstanding during the period.  Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted to common stock.  None of the 50,000 shares of convertible stock (discussed in Note 12) are included in the diluted earnings per share calculations because the necessary conditions for conversion have not been satisfied as of June 30, 2016 (were such date to represent the end of the contingency period).

Reclassifications

Certain amounts in the prior year financial statements have been reclassified to conform to the current-year presentation. The Company has reclassified $428,000 and $956,000 of payroll expenses from General and Administrative to Rental Operating for the three and six months ended June 30, 2015, respectively. The impact of the reclassifications made to prior year amounts are not material and did not affect net income.

In accordance with the adoption of Financial Accounting Standards Board ("FASB") Accounting Standards Update (“ASU”) 2015-03, "Simplifying the Presentation of Debt Issuance Costs", the Company has reclassified $6.5 million of unamortized debt issuance costs at December 31, 2015 from assets to liabilities as a direct reduction of the related mortgage notes payable. In addition, deferred finance costs related to the Company's credit facility were reclassified to prepaid and other assets (See Note 9).

Adoption of New Accounting Standards

In January 2015, FASB issued ASU No. 2015-01, "Income Statement - Extraordinary and Unusual Items (Subtopic 225-20), Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items". The amendments in ASU No. 2015-01 eliminate from GAAP the concept of extraordinary items. Although the amendment will eliminate the requirements for reporting entities to consider whether an underlying event or transaction is extraordinary, the presentation and disclosure guidance for items that are unusual in nature or occur infrequently will be retained and will be expanded to include items that are both unusual in nature and infrequently occurring. ASU No. 2015-01 was effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. On January 1, 2016, the Company adopted ASU No. 2015-01 and the adoption had no impact on the Company's consolidated financial statements.

In February 2015, FASB issued ASU 2015-02, "Consolidation (Topic 810): Amendments to the Consolidation Analysis",

14

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

JUNE 30, 2016

(unaudited)

which makes certain changes to both the variable interest model and the voting model, including changes to (1) the identification of variable interests (fees paid to a decision maker or service provider), (2) the variable interest entity characteristics for a limited partnership or similar entity and (3) the primary beneficiary determination. On January 1, 2016, the Company adopted ASU 2015-02 and the adoption did not have a significant impact on the Company's consolidated financial statements.

In April 2015, FASB issued ASU 2015-03, "Simplifying the Presentation of Debt Issuance Costs", which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected. Upon adoption, the Company applied the new guidance on a retrospective basis and adjusted the balance sheet of each individual period presented to reflect the period-specific effects of applying the new guidance. This guidance was effective and was adopted by the Company on January 1, 2016. The Company has reclassified $6.5 million of unamortized debt issuance costs at December 31, 2015 from assets to liabilities as a direct reduction of the related mortgage notes payable.

In August 2015, FASB issued ASU 2015-15, "Interest - Imputation of Interest", which clarifies that debt issuance costs associated with line of credit arrangements may continue to be accounted for as assets and not as a direct deduction from the carrying amount of the debt liabilities. This guidance was effective and was adopted by the Company on January 1, 2016. Deferred finance costs related to the Company's credit facility were reclassified to prepaid and other assets (See Note 9).     

In September 2015, FASB issued ASU 2015-16, "Simplifying the Accounting for Measurement-Period Adjustments", which eliminates the requirement to retroactively revise comparative financial information for prior periods presented in financial statements due to changes in provisional amounts recorded for acquisitions in subsequent periods. Upon adoption, disclosure of the amounts recorded in current-period earnings that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized at the acquisition date are required. ASU 2015-16 was effective and adopted by the Company on January 1, 2016 and the adoption had no impact on its consolidated financial statements.

Accounting Standards Issued But Not Yet Effective

In May 2014, FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers”, which will replace most existing revenue recognition guidance in GAAP.  The core principle of ASU No. 2014-09 is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services.  ASU No. 2014-09 requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. ASU No. 2014-09 will be effective for the Company beginning January 1, 2018, including interim periods in 2018, and allows for both retrospective and prospective methods of adoption. The Company is in the process of determining the method of adoption and assessing the impact of this guidance on the Company’s consolidated financial position, results of operations and cash flows.

In August 2014, FASB issued ASU No. 2014-15, "Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern." Under the new guidance, an entity should evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. The guidance will be effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The adoption of the new requirements is not expected to have a material impact on the Company's consolidated financial statements.

In February 2016, FASB issued ASU No. 2016-02, "Leases (Topic 842)", which requires lessees to recognize at the commencement date for all leases, with the exception of short-term leases, (a) a lease liability, which is a lessee‘s obligation to make lease payments arising from a lease, measured on a discounted basis, and (b) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU No. 2016-02 will be effective for the Company beginning January 1, 2019. The Company is evaluating this guidance; however, it does not expect the adoption of ASU No. 2016-02 to have a significant impact on its consolidated financial statements.

In June 2016, FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses”, which requires measurement and recognition of expected credit losses for financial assets held. ASU No. 2016-13 will be effective for the Company beginning January 1, 2019. The Company is evaluating this guidance; however, it does not expect the adoption of ASU No. 2016-13 to have a significant impact on its consolidated financial statements.

15

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

JUNE 30, 2016

(unaudited)

NOTE 3 - SUPPLEMENTAL CASH FLOW INFORMATION

The following table presents the Company's supplemental cash flow information (in thousands):

	Six Months Ended
	June 30,
	2016		2015
Non-cash financing and investing activities:
Stock issued from the distribution reinvestment plan	$	14,407	$	14,432
Deferred financing costs and escrow deposits funded directly by mortgage note and revolving credit facility	—		10,709
Non-cash activity related to sales:
Deconsolidation of mortgage note payable	31,539		—
Deconsolidation of rental properties, net	35,152		—
Noncontrolling interest of deconsolidated subsidiary	3,613		—
Mortgage notes payable settled through sale of property	35,422		—
Sale of property used to settle mortgage notes payable	35,422		—
Assets and liabilities assumed in acquisitions:
Debt assumed	—		40,185
Other liabilities assumed	—		99
Rental properties, net	—		40,284
Cash paid during the period for:
Interest	$	10,538	$	9,388

NOTE 4 - RENTAL PROPERTIES, NET

The following table presents the Company’s investments in rental properties (in thousands):

	June 30, 2016			December 31, 2015
Land	$	169,019		$	180,533
Building and improvements	734,028			775,239
Furniture, fixtures and equipment	29,064			28,928
Construction in progress	3,903			2,949
	936,014			987,649
Less: accumulated depreciation	(86,318		)	(71,151		)
	$	849,696		$	916,498

Depreciation expense for the three and six months ended June 30, 2016 was $10.9 million and $22.1 million, respectively, and for the three and six months ended June 30, 2015 was $10.6 million and $19.4 million, respectively.

During the three months ended June 30, 2016, the Company entered into an agreement to sell one rental property, the Nesbit Palisades, with a net book value of $26.6 million. The Company confirmed the intent and ability to sell this property in its present condition and this property qualified for held for sale accounting treatment upon meeting all applicable criteria prior to June 30, 2016, at which time depreciation ceased. As such, the assets associated with this property were separately classified and included as assets held for sale on the Company's consolidated balance sheet at June 30, 2016. However, the sale of this property did not qualify for discontinued operations, and, therefore, the operations for all periods presented continue to be classified

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RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

JUNE 30, 2016

(unaudited)

within continuing operations on the Company's consolidated statements of operations. The Company completed the sale of the Nesbit Palisades on July 8, 2016 (see Note 16).

During the three months ended December 31, 2015, the Company entered into agreements to sell two rental properties, Conifer Place and Ivy at Clear Creek, with a net book value of $43.9 million. The Company confirmed the intent and ability to sell both properties in their present condition and both properties qualified for held for sale accounting treatment upon meeting all applicable criteria prior to December 31, 2015, at which time depreciation ceased. As such, the assets associated with these properties were separately classified and included as assets held for sale on the Company's consolidated balance sheet at December 31, 2015. However, the sale of these properties did not qualify for discontinued operations, and, therefore, the operations for all periods presented continue to be classified within continuing operations on the Company's consolidated statements of operations. The Company completed the sales of both Conifer Place and Ivy at Clear Creek during the three months ended March 31, 2016 (see Note 6).

In December 2015, the Company agreed to sell its 70% interest in the joint venture that owns Champion Farms Apartments to its joint venture partner. The sale was completed in January 2016. As such, all assets and liabilities of the consolidated entity were reclassified to held for sale as of December 31, 2015 in the consolidated balance sheet. In January 2016, the Company deconsolidated the entity (see Note 6).

Loss on disposal of assets. During the three and six months ended June 30, 2016, the Company recorded losses of $144,000 and $286,000, respectively. During the three and six months ended June 30, 2015, the Company recorded losses of $1.4 millionand $2.5 million, respectively, all due to the replacement of appliances at its rental properties in conjunction with unit upgrades.

NOTE 5 - OTHER INVESTMENTS

The following table presents the Company's components of other investments (in thousands):

	June 30, 2016		December 31, 2015
Loan held for investment, net	$	764	$	757
Preferred equity investment, net	—		3,886
	$	764	$	4,643

Preferred equity investment:

On November 12, 2014, the Company, through its wholly owned subsidiary, RRE Spring Hill Holdings, LLC, made a $3.5 million preferred equity investment in Spring Hill Investors Limited Partner, LLC (the “Investment Vehicle”) and became the Preferred Member. An unaffiliated limited liability company, Presidium AMC Spring Hill Venture, LLC, ("Presidium"), a Texas limited liability company, owns the common equity and acts as the managing member of the Investment Vehicle. In October 2015 and March 2016, the Company funded an additional $800,000 in total.

The Company was paid a dividend equal to 12% of the total amount invested, 7% of which was paid monthly and of which the remaining amount accrued and was to be paid when the property cash flow allowed for the repayment. This investment was repaid in full on June 6, 2016. In conjunction with the payoff, the Company received an exit fee of $230,000, which is included in interest income in the Company's consolidated statement of operations.

Loan held for investment:    

On March 15, 2011, the Company purchased, at a discount, two non-performing promissory notes (the "Oberlin Note” and the "Heatherwood Note”) and two performing promissory notes (the "Peterson Note” and the "Trail Ridge Note”), collectively referred to as the “Notes”, each of which was secured by a first priority mortgage on multifamily rental apartment communities. The contract purchase price for the Notes was a total of $3.1 million, excluding closing costs. The Oberlin, Peterson and Heatherwood Notes were resolved in prior years.

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RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

JUNE 30, 2016

(unaudited)

The following table presents the aging of the Company’s loan held for investment, net (in thousands):

	June 30, 2016		December 31, 2015
Current	$	764	$	757
Delinquent:
30−89 days	—		—
90−180 days	—		—
Greater than 180 days	—		—
	$	764	$	757

The following table presents information about the credit quality of the Company’s loan held for investment, net (in thousands):

	June 30, 2016		December 31, 2015
Performing	$	764	$	757
Nonperforming	—		—
Total	$	764	$	757

The following table presents details of the balance and terms of the Company's loan held for investment, at June 30, 2016 and December 31, 2015 (in thousands):

	Unpaid Principal Balance		Unamortized Discount			Deferred expenses, net		Net book value		Maturity Date	Interest Rate	Average monthly payment
Loan- Trail Ridge
June 30, 2016:	$	969	$	(212	)	$	7	$	764	10/28/2021	7.5%	$	8
December 31, 2015:	$	981	$	(231	)	$	7	$	757

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RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

JUNE 30, 2016

(unaudited)

NOTE 6 - DISPOSITION OF PROPERTIES AND DECONSOLIDATION OF INTERESTS

The following table presents details of the Company's disposition and deconsolidation activity during the three and six months ended June 30, 2016 and 2015 (in thousands):

					Gain on Sale
Multifamily Community	Location	Sale Date	Contract Sales Price		Three months ended June 30, 2016			Six months ended June 30, 2016
2016 Dispositions:
Conifer Place (1)	Norcross, Georgia	January 27, 2016	$	42,500	$	—		$	9,897
Champion Farms (2)	Louisville, Kentucky	January 29, 2016	7,590		—			1,066
The Ivy at Clear Creek	Houston, Texas	February 17, 2016	19,400		—			6,792
Affinity at Winter Park	Winter Park, Florida	June 9, 2016	17,500		5,605			5,605
Fieldstone (3)	Woodland, Ohio	June 30, 2016	7,514		4,096			4,096
					$	9,701		$	27,456
2015 Dispositions:					Three months ended June 30, 2015			Six months ended June 30, 2015
The Alcove Apartments	Houston, Texas	January 26, 2015	$	11,050	$	(1	)	$	3,784
107th Avenue Apartments	Omaha, Nebraska	January 29, 2015	250		—			50
The Redford Apartments	Houston, Texas	February 27, 2015	32,959		(9		)	15,303
Cityside Apartments	Houston, Texas	March 2, 2015	24,500		—			10,028
One Hundred Chevy Chase	Lexington, Kentucky	June 30, 2015	13,500		4,386			4,386
					$	4,376		$	33,551

(1)    On January 27, 2016, the Company and its joint venture partner sold the Conifer Place Apartments, which resulted in the deconsolidation of the entity as of January 27, 2016. Gain on sale includes $6.2 million attributable to noncontrolling interests.

(2)    On January 29, 2016, the Company sold its joint venture interest in Champion Farms to its joint venture partner. As such, the Company deconsolidated the entity as of January 29, 2016. The Company has no continuing involvement with this joint venture.

(3)    On June 30, 2016, the Company sold its joint venture interest in Fieldstone to its joint venture partner. As such, the Company deconsolidated the entity as of June 30, 2016. The Company has no continuing involvement with this joint venture.

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RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

JUNE 30, 2016

(unaudited)

The following table presents the Company's revenues and net income (loss) attributable to properties sold, which includes gain on sale, for the three and six months ended June 30, 2016 and 2015 (in thousands):

	Revenues Attributable to Properties Sold					Net Income (Loss) Attributable to Properties Sold
Multifamily Community	Three months ended June 30, 2016			Six months ended June 30, 2016		Three months ended June 30, 2016			Six months ended June 30, 2016
2016 Dispositions:
Conifer Place(1)	$	—		$	365	$	—		$	9,942
Champion Farms	—			220		—			1,125
The Ivy at Clear Creek	—			386		(1		)	6,627
Affinity at Winter Park	463			1,008		5,742			5,748
Fieldstone	789			1,548		4,243			4,325
	$	1,252		$	3,527	$	9,984		$	27,767
2015 Dispositions:	Three months ended June 30, 2015			Six months ended June 30, 2015		Three months ended June 30, 2015			Six months ended June 30, 2015
The Alcove Apartments	$	1		$	199	$	4		$	3,810
107th Avenue Apartments	—			3		—			50
The Redford Apartments	(40		)	1,274		(67		)	15,670
Cityside Apartments	7			701		—			10,310
One Hundred Chevy Chase	443			832		4,329			4,108
	$	411		$	3,009	$	4,266		$	33,948

(1)    On January 27, 2016, the Company and its joint venture partner sold the Conifer Place Apartments, which resulted in the deconsolidation of the entity as of January 27, 2016. Net income attributable to properties sold presented in table includes $6.3 million attributable to noncontrolling interests.

The following table presents a rollforward of the Company's activity in goodwill for the six months ended June 30, 2016 (in thousands):

Balance, January 1, 2016	$	1,231
Sale of Conifer, Champion, and Fieldstone	(520		)
Balance, June 30, 2016	$	711

NOTE 7 - IDENTIFIED INTANGIBLE ASSETS, NET

Identified intangible assets, net, consist of apartment unit rental and antennae leases. As of June 30, 2016, all identified intangible assets related to apartment unit rental leases have been fully amortized. The net carrying value of the acquired in-place leases totaled $154,000 and $374,000 as of June 30, 2016 and December 31, 2015, respectively, net of accumulated amortization of $25.1 million and $28.4 million, respectively.  The weighted-average remaining life of the acquired apartment unit rental leases was zero months and one month as of June 30, 2016 and December 31, 2015, respectively.  Expected amortization for the antennae leases at the Vista Apartment Homes is $16,000 annually through 2025.  Amortization of the apartment unit rental and antennae leases for the three and six months ended June 30, 2016 was $4,000 and $220,000, respectively. Amortization of the apartment unit rental and antennae leases for the three and six months ended June 30, 2015 was $1.5 million and $3.0 million, respectively.

20

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

JUNE 30, 2016

(unaudited)

The following table presents the Company's expected amortization for the antennae leases for the next five 12-month periods ending June 30, and thereafter (in thousands): 

2017	$	16
2018	16
2019	16
2020	16
2021	16
Thereafter	74
	$	154

21

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

JUNE 30, 2016

(unaudited)

NOTE 8 - MORTGAGE NOTES PAYABLE, NET

The following table presents a summary of the Company's mortgage notes payable, net (in thousands):

	June 30, 2016										December 31, 2015
Collateral	Outstanding Borrowings		Premium (Discount)			Deferred finance costs, net			Carrying Value		Outstanding Borrowings		Premium (Discount)			Deferred finance costs, net			Carrying Value
Vista Apartment Homes	$	15,398	$	—		$	(197	)	$	15,201	$	15,573	$	—		$	(216	)	$	15,357
Cannery Lofts	8,065		—			(116		)	7,949		8,148		—			(131		)	8,017
Deerfield	10,439		—			(142		)	10,297		10,517		—			(159		)	10,358
Ivy at Clear Creek	—		—			—			—		8,431		—			(136		)	8,295
Trailpoint at the Woodlands	18,852		—			(240		)	18,612		19,013		—			(257		)	18,756
Verona Apartment Homes	22,176		—			(148		)	22,028		22,402		—			(179		)	22,223
Skyview Apartment Homes	17,907		—			(123		)	17,784		18,089		—			(148		)	17,941
The Nesbit Palisades	20,298		—			(290		)	20,008		20,298		—			(309		)	19,989
Maxwell Townhomes	13,728		—			(152		)	13,576		13,850		—			(167		)	13,683
Fieldstone	—		—			—			—		15,332		—			(37		)	15,295
Pinehurst	4,040		—			—			4,040		4,111		—			—			4,111
Pheasant Run	6,250		71			(15		)	6,306		6,250		100			(20		)	6,330
Retreat of Shawnee	12,993		124			(33		)	13,084		13,090		164			(44		)	13,210
Conifer Place	—		—			—			—		27,074		—			—			27,074
Evergreen at Coursey Place	27,330		112			(107		)	27,335		27,548		123			(120		)	27,551
Pines of York	15,134		(331		)	(63		)	14,740		15,267		(363		)	(69		)	14,835
The Estates at Johns Creek	50,000		—			(465		)	49,535		50,000		—			(526		)	49,474
Chisholm Place	11,587		—			(153		)	11,434		11,587		—			(163		)	11,424
Perimeter Circle	17,478		—			(172		)	17,306		17,657		—			(202		)	17,455
Perimeter 5550	13,795		—			(143		)	13,652		13,935		—			(167		)	13,768
Aston at Cinco Ranch	23,572		—			(299		)	23,273		23,772		—			(328		)	23,444
Sunset Ridge 1	19,913		295			(234		)	19,974		20,121		329			(261		)	20,189
Sunset Ridge 2	2,975		40			(30		)	2,985		3,002		45			(34		)	3,013
Calloway at Las Colinas	35,414		—			(339		)	35,075		35,740		—			(372		)	35,368
South Lamar Village	12,560		—			(158		)	12,402		12,682		—			(184		)	12,498
Heritage Pointe	26,280		—			(348		)	25,932		26,280		—			(370		)	25,910
Yorba Linda	67,500		—			(761		)	66,739		67,500		—			(860		)	66,640
Villages at Bonita Glen	27,089		2,121			(364		)	28,846		27,265		2,276			(391		)	29,150
Stone Ridge	5,288		—			(142		)	5,146		5,350		—			(153		)	5,197
The Westside Apartments	23,000		—			(273		)	22,727		23,000		—			(351		)	22,649
Tech Center Square	12,500		—			(213		)	12,287		12,500		—			(159		)	12,341
	$	541,561	$	2,432		$	(5,720	)	$	538,273	$	595,384	$	2,674		$	(6,513	)	$	591,545

22

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

JUNE 30, 2016

(unaudited)

The following table presents additional information about the Company's mortgage notes payable, net (in thousands, except percentages):

Collateral	Maturity Date	Annual Interest Rate		Average Monthly Debt Service	Average Monthly Escrow
Vista Apartment Homes	1/1/2022	2.76%	(1)(5)	$65	$16
Cannery Lofts	9/1/2020	3.77%	(1)(5)	40	26
Deerfield	11/1/2020	4.66%	(2)(5)	54	29
Trailpoint at the Woodlands	11/1/2023	2.88%	(1)(4)	69	67
Verona Apartment Homes	1/1/2019	3.60%	(2)(5)	106	41
Skyview Apartment Homes	1/1/2019	3.60%	(2)(5)	85	21
The Nesbit Palisades	7/1/2024	2.42%	(1)(3)	59	54
Maxwell Townhomes	1/1/2022	4.32%	(2)(5)	71	63
Pinehurst	1/1/2017	2.97%	(1)(6)	23	12
Pheasant Run	10/1/2017	5.95%	(2)(3)	31	15
Retreat of Shawnee	2/1/2018	5.58%	(2)(5)	78	28
Evergreen at Coursey Place	8/1/2021	5.07%	(2)(5)	154	48
Pines of York	12/1/2021	4.46%	(2)(5)	80	37
The Estates at Johns Creek	7/1/2020	3.38%	(2)(3)	220	102
Chisholm Place	6/1/2024	2.86%	(1)(3)	39	38
Perimeter Circle	7/1/2019	3.42%	(2)(5)	81	53
Perimeter 5550	7/1/2019	3.42%	(2)(5)	64	41
Aston at Cinco Ranch	10/1/2021	4.34%	(2)(5)	120	63
Sunset Ridge 1	11/1/2020	4.58%	(2)(5)	113	91
Sunset Ridge 2	11/1/2020	4.54%	(2)(5)	16	—
Calloway at Las Colinas	12/1/2021	3.87%	(2)(5)	171	113
South Lamar Village	8/1/2019	3.64%	(2)(5)	59	46
Heritage Pointe	4/1/2025	2.35%	(1)(3)	89	44
Yorba Linda	6/1/2020	2.22%	(1)(3)	158	—
Villages at Bonita Glen	10/1/2023	5.33%	(2)(5)	152	38
Stone Ridge	12/1/2022	2.33%	(1)(5)	21	17
The Westside Apartments	12/27/2017	2.42%	(1)(3)	61	—
Tech Center Square	6/1/2023	3.05%	(1)(5)	53	25

(1) Variable rate based on one-month LIBOR of 0.4651% (as of June 30, 2016) plus a fixed margin.

(2) Fixed rate.

(3) Monthly interest-only payment currently required.

(4) Monthly fixed principal plus interest payment required.

(5) Fixed monthly principal and interest payment required.

(6) On January 1, 2016, this loan automatically extended for one year at a variable rate based on one-month LIBOR plus a fixed margin.

23

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

JUNE 30, 2016

(unaudited)

Loans assumed as part of the Villages at Bonita Glen, South Lamar Village, Paladin (Fieldstone, Pinehurst, Pheasant Run, Retreat of Shawnee, Conifer Place, Evergreen at Coursey Place, Pines of York), Sunset Ridge and Maxwell acquisitions were recorded at their fair values. The premium or discount is amortized over the remaining term of the loans and included in interest expense. For the three months ended June 30, 2016 and 2015, interest expense was reduced by $122,000 and $184,000, respectively, for the amortization of the premium or discount. For the six months ended June 30, 2016 and 2015, interest expense was reduced by $242,000 and $374,000, respectively, for the amortization of the premium or discount.    

All mortgage notes are collateralized by a first mortgage lien on the assets of the respective property as named in the table above. The amount outstanding on the mortgages may be prepaid in full during the entire term with a prepayment penalty on the majority of mortgages held.

As of June 30, 2016 and December 31, 2015, the Company had $6.4 million and $10.0 million of restricted cash related to escrow deposits held by mortgage lenders for real estate taxes, insurance and capital reserves.

The following table presents the Company's annual principal payments on the mortgage notes payable, excluding the amortization of the premium or discount, for each of the next five 12-month periods ending June 30, and thereafter (in thousands):

2017	$	11,469
2018	49,794
2019	46,963
2020	114,707
2021	89,006
Thereafter	229,622
	$	541,561

The following table presents the Company's annual amortization of the premium or discount for each of the next five 12-month periods ending June 30, and thereafter (in thousands):

2017	$	482
2018	401
2019	336
2020	331
2021	276
Thereafter	606
	$	2,432

The mortgage notes payable are recourse only with respect to the properties that secure the notes, subject to certain limited standard exceptions, as defined in each mortgage note. The Company has guaranteed the mortgage notes by executing a guarantee with respect to the properties.  These exceptions are referred to as “carveouts.”  In general, carveouts relate to damages suffered by the lender for a borrower’s failure to pay rents, insurance or condemnation proceeds to lender, failure to pay water, sewer and other public assessments or charges, failure to pay environmental compliance costs or to deliver books and records, in each case as required in the loan documents.  The exceptions also require the Company to guarantee payment of audit costs, lender’s enforcement of its rights under the loan documents and payment of the loan if the borrower voluntarily files for bankruptcy or seeks reorganization, or if a related party of the borrower does so with respect to the subsidiary. The Company has also guaranteed the completion and payment of costs of completion of no less than $7.0 million for renovations to The Estates at Johns Creek by July 1, 2018, of which $6.9 million were completed at June 30, 2016.

The mortgage obtained in connection with the acquisition of Yorba Linda in June 2015 includes a $7.5 million earn-out holdback which may be borrowed when certain debt service coverage and loan to value criteria are met. The Yorba Linda mortgage loan includes a net worth and liquidity covenant. The Company was in compliance with all covenants related to this loan at June 30, 2016. The loan also includes an additional debt service coverage covenant that is only required to be met as of December 31, 2017 and periods thereafter.

24

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

JUNE 30, 2016

(unaudited)

On December 20, 2013, the Company, through a wholly-owned subsidiary, entered into a loan ("Tech Center Loan") with PNC Bank, National Association.  The Company provided a repayment guarantee of all interest and scheduled monthly principal payments (excluding the final payment at maturity for the outstanding balance). In March 2016, the Company amended the loan, removing any additional borrowing capacity and requiring monthly principal repayments beginning April 1, 2016. The interest rate on the loan was also increased from one-month LIBOR plus 2.0% to one-month LIBOR plus 2.25%. On May 3, 2016, the existing loan was repaid in full and was refinanced with a different lender.

On December 27, 2013, the Company, through a wholly-owned subsidiary, entered into a loan ("Westside Loan") with U.S. Bank National Association for $29.7 million.  The Company may draw the remaining $6.7 million when certain debt service coverage and loan to value criteria are met. Amounts repaid on the loan may not be reborrowed. The Company provided a $6.5 million repayment guarantee. The Westside Loan includes a net worth, liquidity, leverage and debt service coverage covenants. The Company was in compliance with all covenants related to this loan at June 30, 2016.

Deferred financing costs incurred to obtain financing are amortized over the term of the related debt.  During the three months ended June 30, 2016 and June 30, 2015, $513,000 and $361,000, respectively, of amortization of deferred financing costs was included in interest expense. During the six months ended June 30, 2016 and June 30, 2015, $1,012,000 and $719,000, respectively, of amortization of deferred financing costs was included in interest expense. Accumulated amortization as of June 30, 2016 and December 31, 2015 was $2.7 million and $2.4 million, respectively.  Estimated amortization of the existing deferred financing costs for the next five 12-month periods ending June 30, and thereafter, is as follows (in thousands):

2017	$	1,402
2018	1,271
2019	1,089
2020	850
2021	469
Thereafter	639
	$	5,720

NOTE 9 - CREDIT FACILITY

The following table presents a summary of the Company's credit facility (in thousands, except percentages):

									Weighted Average Interest Rate
	Balance Outstanding at		Current Availability at		Balance Outstanding at	Maturity Date	Interest Rate Basis (1)	Current Interest Rate	Three months ended June 30,		Six Months Ended   June 30,
Lender	June 30, 2016				December 31, 2015				2016	2015	2016	2015
Bank of America	$	5,394	$	15,500	21,894	5/23/2017	LIBOR plus 3%	3.47%	3.40%	3.19%	3.43%	3.21%

(1) Variable rate based on one-month LIBOR of 0.4651% (as of June 30, 2016).

Draws under the secured revolving credit facility (the “Bank of America Credit Facility”) with Bank of America, N.A. (“Bank of America”) are secured by certain of the Company's properties with an aggregate value of $42.0 million as of June 30, 2016 and are guaranteed by the Company.  Weighted average borrowings for the three months ended June 30, 2016 and 2015 were $11.6 million and $9.2 million, respectively. Weighted average borrowings for the six months ended June 30, 2016 and 2015 were $13.3 million and $6.4 million, respectively.

      The Bank of America Credit Facility, as amended, matures on May 23, 2017, and may be extended to May 23, 2019 subject to satisfaction of certain conditions and payment of an extension fee equal to 0.25% of the amount committed under the Bank of America Credit Facility.  The Company is required to make monthly interest-only payments.  The Company also may prepay the Bank of America Credit Facility in whole or in part at any time without premium or penalty.

25

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

JUNE 30, 2016

(unaudited)

The operating partnership's obligations with respect to the Bank of America Credit Facility are guaranteed by the Company, pursuant to the terms of a guaranty dated as of December 2, 2011, or the Guaranty.  The Bank of America Credit Facility and the Guaranty contain restrictive covenants for maintaining a certain tangible net worth and a certain level of liquid assets, and for restricting the securing of additional debt as follows:

• the Company must maintain a minimum tangible net worth equal to the lesser of (i) 200% of the outstanding principal amount of the Bank of America Credit Facility and (ii) $20.0 million;

• the Company must also maintain unencumbered liquid assets with a market value of not less than the greater of (i) $5.0 million or (ii) 20% of the outstanding principal amount of the Bank of America Credit Facility; and

• the Company may not incur any additional secured or unsecured debt without Bank of America's prior written consent and approval, which consent and approval is not to be unreasonably withheld.

In addition to the covenants above, after 36 months from the date of an initial advance on any property, the property must satisfy debt service coverage requirements. This covenant will go into effect during the three months ended December 31, 2016.

The Company was in compliance with all loan covenants at June 30, 2016.

The Company has $169,000 and $389,000 of deferred finance costs included in prepaid expenses and other assets on the consolidated balance sheets related to the Bank of America Credit Facility as of June 30, 2016 and December 31, 2015, respectively, which is being amortized over the term of the debt. During the three months ended June 30, 2016 and 2015, $150,000 and $131,000, respectively, of amortization of deferred finance costs was included in interest expense related to this facility. During the six months ended June 30, 2016 and 2015, $220,000 and $187,000, respectively, of amortization of deferred finance costs was included in interest expense related to this facility. Estimated amortization of the existing deferred financing costs is $169,000 for the 12-month period ending June 30,2017 and none thereafter.

Principal payments required by the credit facility for the 12-month period ending June 30,2017 are approximately $5.4 million and none thereafter.

NOTE 10 - ACCUMULATED OTHER COMPREHENSIVE LOSS

The following table presents the changes in each component of the Company's accumulated other comprehensive loss for the six months ended June 30, 2016 (in thousands):

	Net unrealized loss on derivatives
January 1, 2016	$	(440	)
Reclassification adjustment for realized loss on designated derivative	72
Unrealized loss on designated derivatives	(23		)
June 30, 2016	$	(391	)

NOTE 11 - CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

In the ordinary course of its business operations, the Company has ongoing relationships with several related parties. 

Relationship with RAI

On May 22, 2016, RAI agreed to be acquired by C-III Capital Partners LLC ("C-III"), a leading commercial real estate services company engaged in a broad range of activities. The proposed merger is expected to close late in the third quarter of 2016 and is subject to approval by the stockholders of RAI, regulatory approvals and other customary closing conditions. Upon closing of the transaction, C-III will control our Advisor and will control all of the shares currently held by RAI.

Self-insurance funds held in escrow. Substantially all of the receivables from related parties represents escrow funds held by RAI for self insurance. The Company's properties participate in insurance pools with other properties directly and indirectly managed by RAI for both property insurance and general liability. RAI holds the escrow funds related to the insurance pools on its books. The pool for the property insurance covers losses up to $2.5 million and the pool for the general liability covers losses

26

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

JUNE 30, 2016

(unaudited)

up to the first $50,000 per incident. Catastrophic insurance would cover property losses in excess of the insurance pool up to $140.0 million. Therefore, unforeseen or catastrophic losses in excess of the Company's insured limits could have a material adverse effect on the Company's financial condition and operating results. In the three and six months ended June 30, 2016, the Company paid $1.7 million into the insurance pools.

Internal audit. RAI performs internal audit services for the Company.

Relationship with the Advisor

In September 2009, the Company entered into an advisory agreement (the “Advisory Agreement”) pursuant to which the Advisor provides the Company with investment management, administrative and related services.  The Advisory Agreement was amended in January 2010 and further amended in January 2011 and March 2015.  The Advisory Agreement has a one-year term and renews for an unlimited number of successive one-year terms upon the approval of the conflicts committee of the Company's board of directors.  The Company renewed the Advisory Agreement for another year on September 15, 2015. Under the Advisory Agreement, the Advisor receives fees and is reimbursed for its expenses as set forth below:

Acquisition fees. The Company pays the Advisor an acquisition fee of 2.0% of the cost of investments acquired on behalf of the Company, plus any capital expenditure reserves allocated, or the amount funded by the Company to acquire loans, including acquisition expenses and any debt attributable to such investments. 

Asset management fees. The Company pays the Advisor a monthly asset management fee equal to one-twelfth of 1.0% of the higher of the cost or the independently appraised value of each asset, without deduction for depreciation, bad debts or other non-cash reserves.  The asset management fee is based only on the portion of the costs or value attributable to the Company’s investment in an asset if the Company does not own all or a majority of an asset and does not manage or control the asset.  

Disposition fees. The Advisor earns a disposition fee in connection with the sale of a property equal to the lesser of one-half of the aggregate brokerage commission paid, or if none is paid, 2.75% of the contract sales price.

Debt financing fees. The Advisor earns a debt financing fee equal to 0.5% of the amount available under any debt financing obtained for which it provided substantial services.

Expense reimbursements and overhead allocation. The Company also pays directly or reimburses the Advisor for all of the expenses paid or incurred by the Advisor or its affiliates on behalf of the Company or in connection with the services provided to the Company in relation to its public offering, including its ongoing distribution reinvestment plan offering.  

Reimbursements also include expenses the Advisor incurs in connection with providing services to the Company, including the Company’s allocable share of costs for Advisor personnel and overhead, out of pocket expenses incurred in connection with the selection and acquisition of properties or other real estate related debt investments, whether or not the Company ultimately acquires the investment.  However, the Company will not reimburse the Advisor or its affiliates for employee costs in connection with services for which the Advisor earns acquisition or disposition fees.

Relationship with Resource Real Estate Opportunity Manager

The Manager manages the Company's real estate properties and real estate-related debt investments and coordinates the leasing of, and manages construction activities related to, some of the Company’s real estate properties pursuant to the terms of the management agreement with the Manager.

Property management fees. The Manager earns 4.5% of the gross receipts from the Company's properties, provided that for properties that are less than 75% occupied, the manager receives a minimum fee for the first 12 months of ownership for performing certain property management and leasing activities. 

Construction management fees. The Manager earns a construction management fee of 5.0% of actual aggregate costs to construct improvements, or to repair, rehab or reconstruct a property.

Debt servicing fees. The Manager earns a debt servicing fee of 2.75% on payments received from loans held by the Company for investment.  

27

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

JUNE 30, 2016

(unaudited)

Information technology fees and operating expense reimbursement. During the ordinary course of business, the Manager or other affiliates of RAI may pay certain shared operating expenses on behalf of the Company. 

Relationship with Other Related Parties

The Company has also made payment for legal services to the law firm of Ledgewood P.C. (“Ledgewood”).  Until 1996, the Chairman of RAI was of counsel to Ledgewood.  In connection with the termination of his affiliation with Ledgewood and its redemption of his interest, the Chairman continues to receive certain payments from Ledgewood.  Until March 2006, a current executive of RAI was the managing member of Ledgewood.  This executive remained of counsel to Ledgewood through June 2007, at which time he became an Executive Vice President of RAI.

The Company utilizes the services of a printing company, Graphic Images, LLC (“Graphic Images”), whose principal owner is the father of RAI’s Chief Financial Officer.  

The following table presents the Company's amounts payable to/receivable from related parties (in thousands):

	June 30, 2016		December 31, 2015
Due from related parties:
RAI and affiliates	$	2,004	$	1,421
Due to related parties:
Advisor:
Operating expense reimbursements	$	—	$	286
Resource Real Estate Opportunity Manager, LLC:
Property management fees	882		440
Other reimbursements	581		459
Other	14		—
	$	1,477	$	1,185

28

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

JUNE 30, 2016

(unaudited)

The following table presents the Company's fees earned/expenses paid to related parties (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
Fees earned / expenses paid to related parties:
Advisor:
Acquisition fees (1)	$	—	$	3,687	$	8	$	5,169
Asset management fees (2)	$	2,674	$	2,461	$	5,381	$	4,709
Disposition fees (3)	$	220	$	270	$	413	$	1,031
Debt financing fees (4)	$	—	$	474	$	—	$	670
Overhead allocation (5)	$	1,130	$	934	$	2,405	$	1,822
Internal audit (5)	$	—	$	7	$	—	$	14
Resource Real Estate Opportunity Manager LLC:
Property management fees (2)	$	1,315	$	1,131	$	2,605	$	2,238
Construction management fees (6)	$	250	$	483	$	492	$	839
Information technology fees (5)	$	107	$	83	$	216	$	166
Operating expense reimbursements (7)	$	62	$	76	$	130	$	143
Debt servicing fees (2)	$	10	$	20	$	14	$	25
Other:
Ledgewood (5)	$	20	$	83	$	30	$	144
Graphic Images (5)	$	60	$	19	$	60	$	22

(1) Included in Acquisition costs on the consolidated statements of operations and comprehensive loss.

(2) Included in Management fees on the consolidated statements of operations and comprehensive loss.

(3) Included in Net gains on dispositions of properties and joint venture interests on the consolidated statements of operations and comprehensive loss.

(4) Included in Mortgage notes payable, net, on the consolidated balance sheets.

(5) Included in General and administrative costs on the consolidated statements of operations and comprehensive loss.

(6) Included in Rental properties, net, on the consolidated balance sheets.

(7) Included in Rental operating expenses on the consolidated statements of operations and comprehensive loss.

29

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

JUNE 30, 2016

(unaudited)

NOTE 12 - EQUITY

Preferred Stock

The Company’s charter authorizes the Company to issue 10.0 million shares of its $0.01 par value preferred stock.  As of June 30, 2016 and December 31, 2015, no shares of preferred stock were issued and outstanding.

Common Stock

As of June 30, 2016, the Company had issued shares of its $0.01 par value common stock as follows (dollars in thousands):

	Shares Issued		Gross Proceeds
Shares issued through private offering	1,263,727		$	12,582
Shares issued through primary public offering (1)	62,485,461		622,077
Shares issued through stock distributions	2,132,266		—
Shares issued through distribution reinvestment plan	7,777,113		77,300
Shares issued in conjunction with the Advisor's initial investment, net of 4,500 share conversion	15,500		155
Total	73,674,067		$	712,114
Shares redeemed	(2,178,618	)
Total shares outstanding as of June 30, 2016	71,495,449

(1)    Includes 276,056 shares issued to the Advisor.

Convertible Stock

As of June 30, 2016 and December 31, 2015, the Company had 50,000 shares of $0.01 par value convertible stock outstanding of which the Advisor and affiliated persons own 49,063 shares and outside investors own 937 shares.  The convertible stock will convert into shares of the Company’s common stock upon the occurrence of (a) the Company having paid distributions to common stockholders that in the aggregate equal 100% of the price at which the Company originally sold the shares plus an amount sufficient to produce a 10% cumulative, non-compounded annual return on the shares at that price; or (b) if the Company lists its common stock on a national securities exchange and, on the 31st trading day after listing, the Company’s value based on the average trading price of its common stock since the listing, plus prior distributions, combine to meet the same 10% return threshold.

Each of these two events is a “Triggering Event.”  Upon a Triggering Event, the Company's convertible stock will, unless its advisory agreement has been terminated or not renewed on account of a material breach by its Advisor, generally be converted into a number of shares of common stock equal to 1/50,000 of the quotient of:

(A) the lesser of

(i) 25% of the amount, if any, by which

(1) the value of the Company as of the date of the event triggering the conversion plus the total distributions paid to its stockholders through such date on the then-outstanding shares of its common stock exceeds

(2) the sum of the aggregate issue price of those outstanding shares plus a 10% cumulative, non-compounded, annual return on the issue price of those outstanding shares as of the date of the event triggering the conversion, or

(ii) 15% of the amount, if any, by which

(1) the value of the Company as of the date of the event triggering the conversion plus the total distributions paid to its stockholders through such date on the then-outstanding shares of its common stock exceeds

30

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

JUNE 30, 2016

(unaudited)

(2) the sum of the aggregate issue price of those outstanding shares plus a 6% cumulative, non-compounded, annual return on the issue price of those outstanding shares as of the date of the event triggering the conversion, divided by

(B) the value of the Company divided by the number of outstanding shares of common stock, in each case, as of the date of the event triggering the conversion.      

Redemption of Securities

During the three and six months ended June 30, 2016, the Company redeemed 1,116,740 and 1,462,083 of its common shares, respectively. The Company will not redeem in excess of 5% of the weighted-average number of shares outstanding during the 12-month period immediately prior to the effective date of redemption. The Company's board of directors will determine at least quarterly whether it has sufficient excess cash to repurchase shares. Generally, the cash available for redemptions will be limited to proceeds from the Company's distribution reinvestment plan plus, if the Company has positive operating cash flow from the previous fiscal year, 1% of all operating cash flow from the previous year. All redemption requests tendered were honored during the three and six months ended June 30, 2016.

The Company's Board of Directors, in its sole discretion, may suspend, terminate or amend the Company's share redemption program without stockholder approval upon 30 days' notice if it determines that such suspension, termination or amendment is in the Company's best interest. The Company's board may also reduce the number of shares purchased under the share redemption program if it determines the funds otherwise available to fund the Company's share redemption program are needed for other purposes. These limitations apply to all redemptions, including redemptions sought upon a stockholder's death, qualifying disability or confinement to a long-term care facility.

Distributions

For the six months ended June 30, 2016, the Company paid aggregate distributions of $21.5 million, including $7.1 million of distributions paid in cash and $14.4 million of distributions reinvested in shares of common stock through the Company's distribution reinvestment plan, as follows (in thousands):

Record Date	Per Common Share	Distribution Date	Distributions Invested in Shares of Common Stock		Aggregate Cash Distribution		Total Aggregate Distribution
January 28, 2016	$0.05	January 29, 2016	$	2,423	$	1,151	$	3,574
February 26, 2016	0.05	February 29, 2016	2,418		1,167		3,585
March 30, 2016	0.05	March 31, 2016	2,415		1,172		3,587
April 28, 2016	0.05	April 29, 2016	2,414		1,181		3,595
May 27, 2016	0.05	June 3, 2016	2,380		1,226		3,606
June 29, 2016	0.05	June 30, 2016	2,357		1,208		3,565
	$0.30		$	14,407	$	7,105	$	21,512

NOTE 13 - FAIR VALUE MEASURES AND DISCLOSURES

In analyzing the fair value of its investments accounted for on a fair value basis, the Company follows the fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.  The Company determines fair value based on quoted prices when available or, if quoted prices are not available, through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the investment. The fair value of cash, tenant receivables and accounts payable, approximate their carrying value due to their short nature.  The hierarchy followed defines three levels of inputs that may be used to measure fair value:

31

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

JUNE 30, 2016

(unaudited)

Level 1 - Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date. 

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability.

Level 3 - Unobservable inputs that reflect the entity’s own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques.

The determination of where an asset or liability falls in the hierarchy requires significant judgment.  The Company evaluates its hierarchy disclosures each quarter; depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter.  However, the Company expects that changes in classifications between levels will be rare.

Rental properties obtained through a foreclosed note are measured at fair value on a non-recurring basis.  The fair value of rental properties is usually estimated based on information obtained from a number of sources, including information obtained about each property as a result of pre-acquisition due diligence, marketing and leasing activities.  The Company allocates the purchase price of properties to acquired tangible assets, consisting of land, buildings, fixtures and improvements, and identified intangible lease assets and liabilities, consisting of the value of above-market and below-market leases, as applicable, the value of in-place leases and the value of tenant relationships, based in each case on their fair values.

Derivatives (interest rate caps) which are reported at fair value in the consolidated balance sheets in prepaid expenses and other assets are valued by a third-party pricing agent using an income approach with models that use, as their primary inputs, readily observable market parameters. This valuation process considers factors including interest rate yield curves, time value, credit and volatility factors (Level 2).

The following table presents information about the Company's assets measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value (in thousands):

	Level 1		Level 2		Level 3		Total
June 30, 2016
Assets:
Interest rate caps	$	—	$	5	$	—	$	5
	$	—	$	5	$	—	$	5
December 31, 2015
Assets:
Interest rate caps	$	—	$	32	$	—	$	32
	$	—	$	32	$	—	$	32

32

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

JUNE 30, 2016

(unaudited)

The carrying and fair values of the Company’s loans held for investment, net, preferred equity investments, mortgage note payable-outstanding borrowings, mortgage note payable -included in other liabilities associated with rental properties held for sale and credit facilities were as follows (in thousands):

	June 30, 2016						December 31, 2015
	Carrying Amount			Estimated Fair Value			Carrying Amount			Estimated Fair Value
Loan held for investment, net	$	764		$	1,151		$	757		$	1,151
Preferred equity investment	$	—		$	—		$	3,886		$	3,908
Mortgage notes payable- outstanding borrowings	$	(541,561	)	$	(535,783	)	$	(595,384	)	$	(573,693	)
Mortgage note payable- included in other liabilities associated with rental properties held for sale	$	—		$	—		$	(16,443	)	$	(16,597	)
Credit facility	$	(5,394	)	$	(5,394	)	$	(21,894	)	$	(21,894	)

The fair values of the loan held for investment, net and preferred equity investment were estimated using rates available to the Company for debt with similar terms and remaining maturities (Level 3).

The carrying amount of the mortgage notes payable presented is the outstanding borrowings excluding premium or discount and deferred finance costs, net. The fair value of the mortgage notes payable was estimated using rates available to the Company for debt with similar terms and remaining maturities (Level 3).

The fair value of the credit facility equals the carrying amounts because the variable interest rate is considered a market rate (Level 3).

NOTE 14 - DERIVATIVES AND HEDGING ACTIVITIES

Risk Management Objective of Using Derivatives

The Company is exposed to certain risk arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its debt funding and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s investments and borrowings.

As a condition to certain of the Company’s financing facilities, from time to time the Company may be required to enter into certain derivative transactions as may be required by the lender. These transactions would generally be in line with the Company’s own risk management objectives and also served to protect the lender.

Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company entered into a total of eight interest rate caps that were designated as cash flow hedges during 2013, 2014, 2015 and 2016. Interest rate caps designated as cash flow hedges involve the receipt of variable amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an up-front premium.

33

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

JUNE 30, 2016

(unaudited)

The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the three and six months ended June 30, 2016 and the year ended December 31, 2015, such derivatives were used to hedge the variable cash flows, indexed to USD-LIBOR, associated with existing variable-rate loan agreements. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. During the three and six months ended June 30, 2016, the Company had a loss of $72,388 due to hedge ineffectiveness related to the sale of the Ivy at Clear Creek.

Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt.

As of June 30, 2016, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk (dollars in thousands):

Interest Rate Derivative	Number of Instruments	Notional Amount		Maturity Dates
Interest Rate Caps	8	$	119,863	January 1, 2018 to May 3, 2019

Tabular Disclosure of Fair Values of Derivative Instruments on the Balance Sheet

The following table presents the fair value of the Company’s derivative financial instruments as well as their classification in prepaid expenses and other assets on the Balance Sheet as of June 30, 2016 and December 31, 2015 (in thousands):

Asset Derivatives						Liability Derivatives
June 30, 2016			December 31, 2015			June 30, 2016			December 31, 2015
Balance Sheet	Fair Value		Balance Sheet	Fair Value		Balance Sheet	Fair Value		Balance Sheet	Fair Value
Interest rate caps	$	5	Interest rate caps	$	32	—	$	—	—	$	—

NOTE 15 - OPERATING EXPENSE LIMITATION

Under its charter, the Company must limit its total operating expenses to the lesser of 2% of its average invested assets or 25% of its net income for the four most recently completed fiscal quarters, unless the conflicts committee of the Company’s board of directors has determined that such excess expenses were justified based on unusual and non-recurring factors.  Operating expenses for the four quarters ended June 30, 2016 were in compliance with the charter imposed limitation.

NOTE 16 - SUBSEQUENT EVENTS

On July 8, 2016, the Company sold the Nesbit Palisades, located in Alpharetta, Georgia, for $45.5 million. In conjunction with the sale, the Company paid off the outstanding mortgage loan secured by the property. The Company expects to record a gain on the sale during the three months ended September 30, 2016.    

On July 21, 2016, the Company's Board of Directors declared a $0.05 per share cash distribution to its common stockholders of record at the close of business on each of the following record dates: July 28, 2016, August 30, 2016 and September 29, 2016. Such distributions were or are to be paid on July 29, 2016, August 31, 2016 and September 30, 2016. .

The Company has evaluated subsequent events and determined that no events have occurred, other than those disclosed above, which would require an adjustment to or additional disclosure in the consolidated financial statements.

34

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 accompanying financial statements of Resource Real Estate Opportunity REIT, Inc. and the notes thereto. See also “Cautionary Note Regarding Forward-Looking Statements” preceding Part I, as well as the notes to our financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations provided in our Annual Report on Form 10-K for the year ended December 31, 2015. As used herein, the terms “we,” “our” and “us” refer to Resource Real Estate Opportunity REIT, Inc., a Maryland corporation, and, as required by context, Resource Real Estate Opportunity OP, LP, a Delaware limited partnership, and to their subsidiaries.

Overview

We were formed on June 3, 2009.  We commenced active real estate operations on September 7, 2010 when we raised the minimum offering amount in our initial public offering.

We have acquired a diversified portfolio of discounted U.S. commercial real estate and real estate-related debt. Our targeted portfolio consists of commercial real estate assets, principally (i) multifamily rental properties purchased as non-performing or distressed loans or as real estate owned by financial institutions and (ii) multifamily rental properties to which we can add value with a capital infusion (referred to as “value add properties”). However, we are not limited in the types of real estate and real estate-related assets in which we may invest or whether we may invest in equity or debt secured by real estate and, accordingly, we may invest in other real estate assets or debt secured by real estate assets. At June 30, 2016, we held approximately 39% of our total assets in categories (i) and 61% of our total assets in category (ii).

We may make adjustments to our target portfolio based on real estate market conditions and investment opportunities. We will not forego a good investment because it does not precisely fit our expected portfolio composition. Thus, to the extent our Advisor presents us with investment opportunities that allow us to meet the requirements to be treated as a real estate investment trust, or REIT, under the Internal Revenue Code and to maintain our exclusion from regulation as an investment company pursuant to the Investment Company Act, our portfolio composition may vary from what we have initially disclosed.

The primary portion of our initial public offering commenced on June 16, 2010 and closed on December 13, 2013. We continue to offer shares to our existing stockholders pursuant to our distribution reinvestment plan. We describe these offerings further in “Liquidity and Capital Resources” below.

Results of Operations

 As of June 30, 2016, we owned interests in a total of 31 multifamily properties. During the three and six months ended June 30, 2016, we disposed of our interests in two and five properties, respectively. Since our inception, we have acquired interests in 48 multifamily properties, representing 13,532 units. As of June 30, 2016, we had sold our interests in 17 of those properties. Our management is not aware of any material trends or uncertainties, favorable, or unfavorable, other than national economic conditions affecting our targeted portfolio, the multifamily residential housing industry and real estate generally, which may reasonably be expected to have a material impact on either capital resources or the revenues or incomes to be derived from the operation of such assets or those that we expect to acquire.    

35

Three Months EndedJune 30, 2016 Compared to the Three Months EndedJune 30, 2015:

The following table sets forth the results of our operations (in thousands):

	Three Months Ended
	June 30,
	2016			2015
Revenues:
Rental income	$	30,357		$	28,250
Interest and dividend income	364			162
Total revenues	30,721			28,412
Expenses:
Rental operating - expenses	7,251			7,857
Rental operating- payroll	3,731			3,974
Rental operating- real estate taxes	3,401			3,438
Subtotal - Rental operating expenses	14,383			15,269
Acquisition costs	—			4,108
Management fees	4,032			3,719
General and administrative	2,980			3,359
Loss on disposal of assets	144			1,372
Provision for loan loss	—			130
Depreciation and amortization expense	10,945			12,059
Total expenses	32,484			40,016
Loss before other income (expense)	(1,763		)	(11,604		)
Other income (expense):
Net gains on dispositions of properties and joint venture interests	9,701			4,376
Interest expense	(5,582		)	(5,408		)
Insurance proceeds in excess of cost basis	71			160
Total other income (expense)	4,190			(872		)
Net income (loss)	2,427			(12,476		)
Net (income) loss attributable to noncontrolling interests	(25		)	192
Net income (loss) attributable to stockholders	$	2,402		$	(12,284	)

36

The following table presents the results of operations separated into two categories: the results of operations of the 29 properties that we owned for the entirety of both periods presented and all other properties (including company level expenses to aid in comparability) for the three months ended June 30, 2016 and 2015 (in thousands):

	For the three months ended									For the three months ended
	June 30, 2016									June 30, 2015
	Properties owned both periods			All other			Total			Properties owned both periods			All other			Total
Revenues:
Rental income	$	25,839		$	4,518		$	30,357		$	22,801		$	5,449		$	28,250
Interest and dividend income	4			360			364			5			157			162
Total revenues	25,843			4,878			30,721			22,806			5,606			28,412
Expenses:
Rental operating - expenses	6,247			1,004			7,251			6,391			1,466			7,857
Rental operating - payroll	3,263			468			3,731			3,311			663			3,974
Rental operating- real estate taxes	2,868			533			3,401			2,980			458			3,438
Subtotal- Rental operating expenses	12,378			2,005			14,383			12,682			2,587			15,269
Acquisition costs	—			—			—			1			4,107			4,108
Management fees	1,147			2,885			4,032			1,016			2,703			3,719
General and administrative	1,088			1,892			2,980			1,067			2,292			3,359
Loss on disposal of assets	117			27			144			219			1,153			1,372
Provision for loan loss	—			—			—			—			130			130
Depreciation and amortization expense	9,612			1,333			10,945			9,857			2,202			12,059
Total expenses	24,342			8,142			32,484			24,842			15,174			40,016
Income (loss) before other income (expense)	1,501			(3,264		)	(1,763		)	(2,036		)	(9,568		)	(11,604		)
Other income (expense):
Net gains on dispositions of properties and joint venture interests	—			9,701			9,701			—			4,376			4,376
Interest expense	(4,491		)	(1,091		)	(5,582		)	(4,342		)	(1,066		)	(5,408		)
Insurance proceeds in excess of cost basis	71			—			71			160			—			160
Total other income (expense)	(4,420		)	8,610			4,190			(4,182		)	3,310			(872		)
Net (loss) income	(2,919		)	5,346			2,427			(6,218		)	(6,258		)	(12,476		)
Net (income) loss attributable to noncontrolling interests	—			(25		)	(25		)	—			192			192
Net (loss) income attributable to stockholders	$	(2,919	)	$	5,321		$	2,402		$	(6,218	)	$	(6,066	)	$	(12,284	)

37

Revenues: The $3.0 million increase in rental income for the 29 properties we owned during both the three months ended June 30, 2016 and the three months ended June 30, 2015 reflects implementation of our investment strategy to increase monthly rental income after renovating and stabilizing operations and was primarily comprised of:

Multifamily Community Name	Rental Increase (in thousands)	Increase/(Decrease) In Occupancy	Increase In Effective Monthly Revenue Per Unit (in dollars)
Maxwell Townhomes	$306	22.0%	$98
Meridian Pointe	306	19.2%	91
The Estates at Johns Creek	264	2.0%	206
Calloway at Las Colinas	258	10.0%	65
The Nesbit Palisades	238	11.7%	73
The Westside Apartments	192	8.2%	72
Tech Center Square	177	17.3%	127
Verona Apartment Homes	148	5.2%	136
Trailpoint at The Woodlands	119	9.0%	48
Perimeter Circle	112	3.0%	168
Perimeter 5550	109	8.0%	137
Sunset Ridge	105	3.0%	87
Skyview Apartment Homes	101	5.0%	108
All other, net	603	25.3%	42
	$3,038

Interest and dividend income increased by $202,000 for the three months ended June 30, 2016 as compared to the three months ended June 30, 2015 due to an exit fee received in conjunction with the payoff of the Spring Hill investment on June 6, 2016.

Expenses: Our total rental operating expenses for the 29 properties we owned during both the three months ended June 30, 2016 and the three months ended June 30, 2015 decreased by $304,000 primarily due to lower insurance costs. Rental operating expenses for the all other category decreased by $582,000 primarily due to the sale of properties in 2015 and 2016.

Acquisition costs decreased by $4.1 million for the three months ended June 30, 2016 as compared to the three months ended June 30, 2015, as we purchased no properties during the three months ended June 30, 2016.

Management fees increased by $313,000 for the three months ended June 30, 2016 as compared to the three months ended June 30, 2015 primarily related to the increase in the asset management fee paid to the Advisor due to additional property acquisitions during 2015. In June 2015, we purchased two properties with a total purchase price of $167.0 million. The asset management fee is based on the higher of the cost or appraised value of real estate investments.

Loss on the disposal of assets decreased by $1.2 million for the three months ended June 30, 2016 as compared to the three months ended June 30, 2015 due to the timing of the replacement of appliances at our rental properties in conjunction with unit upgrades.     

Depreciation and amortization is comprised of the depreciation on our rental properties and amortization of intangible assets related to in-place leases which are amortized over a period of approximately six to eight months after acquisition. The increases (decreases) in the components of depreciation and amortization during the three months ended June 30, 2016, as compared to the three months ended June 30, 2015, were as follows (in thousands):

	Properties owned both periods		All other		Total
Depreciation	903		(518	)	385
Amortization of intangibles	(1,148	)	(351	)	(1,499	)
	(245	)	(869	)	(1,114	)

38

The overall decrease in depreciation and amortization for properties owned both periods was due to amortization no longer being taken on intangible assets. The decrease in depreciation and amortization in the all other category was due to the sale of our interests in six properties subsequent to June 30, 2015.

Net gains on dispositions of properties and joint venture interests included in other income (expense) increased by $5.3 million for the three months ended June 30, 2016 as compared to the three months ended June 30, 2015, which reflects the sale and deconsolidation of two properties during the three months ended June 30, 2016 as compared to the sale of one property, along with two immaterial adjustments on prior quarter sales, during the three months ended June 30, 2015, as follows (in thousands):

Multifamily Community	Location	Sale Date	Contract Sales Price		Gain on Sale
2016 Dispositions:
Affinity at Winter Park	Winter Park, Florida	June 9, 2016	$	17,500	5,605
Fieldstone	Woodland, Ohio	June 30, 2016	$	7,514	4,096
			$	25,014	$	9,701
2015 Dispositions:
The Alcove Apartments	Houston, Texas	January 26, 2015	$	11,050	(1		)
The Redford Apartments	Houston, Texas	February 27, 2015	$	32,959	(9		)
One Hundred Chevy Chase	Lexington, Kentucky	June 30, 2015	$	13,500	4,386
			$	57,509	$	4,376

Interest expense increased by $174,000 for the three months ended June 30, 2016 as compared to the three months ended June 30, 2015, as a result of the three additional mortgages either entered into or assumed during or after the three months ended June 30, 2015. Interest expense for the three months ended June 30, 2016 also includes $81,000 of amortization of deferred finance fees related to the sale of Affinity at Winter Park.

39

Six Months EndedJune 30, 2016 Compared to the Six Months EndedJune 30, 2015:

The following table sets forth the results of our operations (in thousands):

	Six Months Ended
	June 30,
	2016			2015
Revenues:
Rental income	$	60,748		$	55,821
Interest and dividend income	529			325
Total revenues	61,277			56,146
Expenses:
Rental operating - expenses	14,860			15,792
Rental operating- payroll	7,588			8,181
Rental operating- real estate taxes	7,027			6,456
Subtotal - Rental operating expenses	29,475			30,429
Acquisition costs	—			5,809
Management fees	8,087			7,180
General and administrative	6,495			6,881
Loss on disposal of assets	286			2,481
Provision for loan loss	—			130
Depreciation and amortization expense	22,339			22,356
Total expenses	66,682			75,266
Loss before other income (expense)	(5,405		)	(19,120		)
Other income (expense):
Net gains on dispositions of properties and joint venture interests	27,456			33,551
Interest expense	(11,355		)	(10,275		)
Insurance proceeds in excess of cost basis	211			407
Total other income (expense)	16,312			23,683
Net income	10,907			4,563
Net (income) loss attributable to noncontrolling interests	(6,306		)	181
Net income attributable to stockholders	$	4,601		$	4,744

40

The following table presents the results of operations separated into two categories: the results of operations of the 27 properties that we owned for the entirety of both periods presented and all other properties (including company level expenses to aid in comparability) for the six months ended June 30, 2016 and 2015 (in thousands):

	For the six months ended									For the six months ended
	June 30, 2016									June 30, 2015
	Properties owned both periods			All other			Total			Properties owned both periods			All other			Total
Revenues:
Rental income	$	47,482		$	13,266		$	60,748		$	41,820		$	14,001		$	55,821
Interest and dividend income	1			528			529			2			323			325
Total revenues	47,483			13,794			61,277			41,822			14,324			56,146
Expenses:
Rental operating - expenses	12,018			2,842			14,860			11,471			4,321			15,792
Rental operating - payroll	6,029			1,559			7,588			6,310			1,871			8,181
Rental operating- real estate taxes	5,388			1,639			7,027			5,271			1,185			6,456
Subtotal- Rental operating expenses	23,435			6,040			29,475			23,052			7,377			30,429
Acquisition costs	—			—			—			—			5,809			5,809
Management fees	2,109			5,978			8,087			1,865			5,315			7,180
General and administrative	1,947			4,548			6,495			1,875			5,006			6,881
Loss on disposal of assets	230			56			286			398			2,083			2,481
Provision for loan loss	—			—			—			—			130			130
Depreciation and amortization expense	18,015			4,324			22,339			17,620			4,736			22,356
Total expenses	45,736			20,946			66,682			44,810			30,456			75,266
Income (loss) before other income (expense)	1,747			(7,152		)	(5,405		)	(2,988		)	(16,132		)	(19,120		)
Other income (expense):
Net gains on dispositions of properties and joint venture interests	—			27,456			27,456			—			33,551			33,551
Interest expense	(8,228		)	(3,127		)	(11,355		)	(8,120		)	(2,155		)	(10,275		)
Insurance proceeds in excess of cost basis	211			—			211			407			—			407
Total other income (expense)	(8,017		)	24,329			16,312			(7,713		)	31,396			23,683
Net (loss) income	(6,270		)	17,177			10,907			(10,701		)	15,264			4,563
Net (income) loss attributable to noncontrolling interests	—			(6,306		)	(6,306		)	—			181			181
Net (loss) income attributable to stockholders	$	(6,270	)	$	10,871		$	4,601		$	(10,701	)	$	15,445		$	4,744

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Revenues: The $5.7 million increase in rental income for the 27 properties we owned during both the six months ended June 30, 2016 and the six months ended June 30, 2015 reflects implementation of our investment strategy to increase monthly rental income and occupancy rates after renovating and stabilizing operations and was primarily comprised of:

Multifamily Community Name	Rental Increase (in thousands)	Increase/(Decrease) In Occupancy	Increase In Effective Monthly Revenue Per Unit (in dollars)
Maxwell Townhomes	$680	25.5%	103
Meridian Pointe	644	20.3%	101
The Nesbit Palisades	501	11.5%	93
The Westside Apartments	445	9.6%	86
The Estates at Johns Creek	418	0.3%	186
Calloway at Las Colinas	342	4.9%	63
Tech Center Square	302	14.0%	117
Trailpoint at the Woodlands	283	10.6%	57
Verona Apartment Homes	259	3.2%	135
Skyview Apartment Homes	205	3.5%	123
Perimeter Circle	201	2.5%	154
Perimeter 5550	189	8.8%	97
Chisholm Place	165	8.3%	100
Retreat at Rocky Ridge	157	9.3%	54
Sunset Ridge	135	(0.9)%	88
Retreat at Shawnee	123	4.8%	28
Williamsburg	107	0.6%	15
All other, net	506	12.5%	33
	$5,662

Interest and dividend income increased by $204,000 for the six months ended June 30, 2016 as compared to the six months ended June 30, 2015 due to an exit fee received in conjunction with the payoff of the Spring Hill investment on June 6, 2016.

Expenses: Our total rental operating expenses for the 27 properties we owned during both the six months ended June 30, 2016 and the six months ended June 30, 2015 increased by $383,000 and was comprised primarily of increased casualty losses. Rental operating expenses for the all other category decreased by $1.3 million primarily due to the sale of properties in 2015 and 2016.

Acquisition costs decreased by $5.8 million for the six months ended June 30, 2016 as compared to the six months ended June 30, 2015 as we purchased no properties during the six months ended June 30, 2016.

Management fees increased by $907,000 for the six months ended June 30, 2016 as compared to the six months ended June 30, 2015 primarily related to the increase in the asset management fee paid to the Advisor due to additional property acquisitions during 2015. In June 2015, we purchased two properties with a total purchase price of $167.0 million. The asset management fee is based on the higher of the cost or appraised value of real estate investments.

Loss on the disposal of assets decreased by $2.2 million for the six months ended June 30, 2016 as compared to the six months ended June 30, 2015 due to the timing of the replacement of appliances at our rental properties in conjunction with unit upgrades.     

Depreciation and amortization is comprised of the depreciation on our rental properties and amortization of intangible assets related to in-place leases which are amortized over a period of approximately six to eight months after acquisition. The increases (decreases) in the components of depreciation and amortization during the six months ended June 30, 2016, as compared to the six months ended June 30, 2015, were as follows (in thousands):

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	Properties owned both periods		All other		Total
Depreciation	2,295		439		2,734
Amortization of intangibles	(1,900	)	(851	)	(2,751	)
	395		(412	)	(17	)

The overall increase in depreciation for properties owned both periods is due to the additional $25.6 million in capital improvements made during the periods in accordance with our planned renovations.

Net gains on dispositions of properties and joint venture interests included in other income (expense) decreased by $6.1 million for the six months ended June 30, 2016 as compared to the six months ended June 30, 2015, due to the sale of five properties during the six months ended June 30, 2016 as compared to the sale of five properties during the six months ended June 30, 2015, as follows (in thousands):

Multifamily Community	Location	Sale Date	Contract Sales Price		Gain on Sale
2016 Dispositions:
The Ivy at Clear Creek	Houston, Texas	February 17, 2016	$	19,400	$	6,792
Champion Farms	Louisville, Kentucky	January 29, 2016	7,590		1,066
Conifer Place	Norcross, Georgia	January 27, 2016	42,500		9,897
Affinity at Winter Park	Winter Park, Florida	June 9, 2016	17,500		5,605
Fieldstone	Woodland, Ohio	June 30, 2016	7,514		4,096
			$	94,504	$	27,456
2015 Dispositions:
The Alcove Apartments	Houston, Texas	January 26, 2015	$	11,050	$	3,784
107th Avenue Apartments	Omaha, Nebraska	January 29, 2015	250		50
The Redford Apartments	Houston, Texas	February 27, 2015	32,959		15,303
Cityside Apartments	Houston, Texas	March 2, 2015	24,500		10,028
One Hundred Chevy Chase	Lexington, Kentucky	June 30, 2015	13,500		4,386
			$	82,259	$	33,551

The gain on sale of Conifer Place includes $6.2 million which is attributable to noncontrolling interests.

Interest expense increased by $1.1 million for the six months ended June 30, 2016 as compared to the six months ended June 30, 2015, as a result of the five additional mortgages either entered into or assumed during or after the six months ended June 30, 2015. Interest expense for the six months ended June 30, 2016 also includes $133,000 of amortization of deferred finance fees and $72,000 realized loss on the change in the fair value of the interest rate cap related to the sale of the Ivy at Clear Creek, as well as $81,000 of amortization of deferred finance fees related to the sale of Affinity at Winter Park.

Liquidity and Capital Resources

We have derived the capital required to purchase real estate investments and conduct our operations from the proceeds of our private and public offerings, secured financings from banks, proceeds from the sale of real estate, and cash flows generated by our real estate and real estate-related investments.

We have allocated a portion of the funds we raised in our initial public offering to preserve capital for our investors by supporting the maintenance and viability of the properties we have acquired and those properties that we may acquire in the future.  If these allocated amounts and any other available income become insufficient to cover our operating expenses and liabilities, it may be necessary to obtain additional funds by borrowing, refinancing properties or liquidating our investment in one or more properties, debt investments or other assets we may hold.  We cannot assure you that we will be able to access additional funds upon acceptable terms when we need them.

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Capital Expenditures

We deployed a total of $13.3 million during the six months ended June 30, 2016 for capital expenditures. The properties in which we deployed the most capital during the six months ended June 30, 2016 ended are listed separately and the capital expenditures made on all other properties are aggregated in "All other properties" below (in thousands):

	Capital deployed during the six months ended		Remaining capital budgeted
Property	June 30, 2016
South Lamar Village	$	1,524	$	1,409
Heritage Pointe	1,458		5,507
Yorba Linda	1,356		8,211
Calloway at Las Colinas	1,255		3,644
The Estates At Johns Creek	1,020		879
All other properties	6,678		13,331
	$	13,291

Initial Public Offering

The primary portion of our initial public offering closed on December 13, 2013.  On December 26, 2013, the unsold primary offering shares were deregistered and, on December 30, 2013, the registration of the shares issuable pursuant to the distribution reinvestment plan was continued pursuant to a Registration Statement on Form S-3. A new Registration Statement on Form S-3 was filed in May 2016 to continue the distribution reinvestment plan offering.

We continue to offer up to $120.0 million of shares of common stock pursuant to our distribution reinvestment plan under which our stockholders may elect to have distributions reinvested in additional shares at $10.83 per share. 

Gross offering proceeds

As of June 30, 2016,shares of our $0.01 par value common stock have been issued as follows (dollars in thousands):

	Shares Issued		Gross Proceeds
Shares issued through private offering	1,263,727		$	12,582
Shares issued through primary public offering (1)	62,485,461		622,077
Shares issued through stock distributions	2,132,266		—
Shares issued through distribution reinvestment plan	7,777,113		77,300
Shares issued in conjunction with the Advisor's initial investment, net of 4,500 share conversion	15,500		155
Total	73,674,067		$	712,114
Shares redeemed	(2,178,618	)
Total shares outstanding at June 30, 2016	71,495,449

(1)    Includes 276,056 shares issued to the Advisor.

Credit Facility

The following is a summary of our credit facility:

											Weighted Average Interest Rate
	Balance Outstanding at		Current Availability at		Balance Outstanding at		Maturity Date	Interest Rate Basis	Current Interest Rate		Three months ended June 30,				Six Months Ended June 30,
Lender	June 30, 2016				December 31, 2015						2016		2015		2016		2015
Bank of America	$	5,394	$	15,500	$	21,894	5/23/2017	LIBOR plus 3%	3.47	%	3.40	%	3.19	%	3.43	%	3.21	%

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Draws under the Bank of America Credit Facility are secured by certain of our properties with an aggregate value of $42.0 million and are guaranteed by us. We were in compliance with all covenants under this facility as of June 30, 2016.

Mortgage Debt

	June 30, 2016										December 31, 2015
Collateral	Outstanding Borrowings		Premium (Discount)			Deferred finance costs, net			Carrying Value		Outstanding Borrowings		Premium (Discount)			Deferred finance costs, net			Carrying Value
Vista Apartment Homes	$	15,398	$	—		$	(197	)	$	15,201	$	15,573	$	—		$	(216	)	$	15,357
Cannery Lofts	8,065		—			(116		)	7,949		8,148		—			(131		)	8,017
Deerfield	10,439		—			(142		)	10,297		10,517		—			(159		)	10,358
Ivy at Clear Creek	—		—			—			—		8,431		—			(136		)	8,295
Trailpoint at the Woodlands	18,852		—			(240		)	18,612		19,013		—			(257		)	18,756
Verona Apartment Homes	22,176		—			(148		)	22,028		22,402		—			(179		)	22,223
Skyview Apartment Homes	17,907		—			(123		)	17,784		18,089		—			(148		)	17,941
The Nesbit Palisades	20,298		—			(290		)	20,008		20,298		—			(309		)	19,989
Maxwell Townhomes	13,728		—			(152		)	13,576		13,850		—			(167		)	13,683
Fieldstone	—		—			—			—		15,332		—			(37		)	15,295
Pinehurst	4,040		—			—			4,040		4,111		—			—			4,111
Pheasant Run	6,250		71			(15		)	6,306		6,250		100			(20		)	6,330
Retreat of Shawnee	12,993		124			(33		)	13,084		13,090		164			(44		)	13,210
Conifer Place	—		—			—			—		27,074		—			—			27,074
Evergreen at Coursey Place	27,330		112			(107		)	27,335		27,548		123			(120		)	27,551
Pines of York	15,134		(331		)	(63		)	14,740		15,267		(363		)	(69		)	14,835
The Estates at Johns Creek	50,000		—			(465		)	49,535		50,000		—			(526		)	49,474
Chisholm Place	11,587		—			(153		)	11,434		11,587		—			(163		)	11,424
Perimeter Circle	17,478		—			(172		)	17,306		17,657		—			(202		)	17,455
Perimeter 5550	13,795		—			(143		)	13,652		13,935		—			(167		)	13,768
Aston at Cinco Ranch	23,572		—			(299		)	23,273		23,772		—			(328		)	23,444
Sunset Ridge 1	19,913		295			(234		)	19,974		20,121		329			(261		)	20,189
Sunset Ridge 2	2,975		40			(30		)	2,985		3,002		45			(34		)	3,013
Calloway at Las Colinas	35,414		—			(339		)	35,075		35,740		—			(372		)	35,368
South Lamar Village	12,560		—			(158		)	12,402		12,682		—			(184		)	12,498
Heritage Pointe	26,280		—			(348		)	25,932		26,280		—			(370		)	25,910
Yorba Linda	67,500		—			(761		)	66,739		67,500		—			(860		)	66,640
Villages at Bonita Glen	27,089		2,121			(364		)	28,846		27,265		2,276			(391		)	29,150
Stone Ridge	5,288		—			(142		)	5,146		5,350		—			(153		)	5,197
The Westside Apartments	23,000		—			(273		)	22,727		23,000		—			(351		)	22,649
Tech Center Square	12,500		—			(213		)	12,287		12,500		—			(159		)	12,341
	$	541,561	$	2,432		$	(5,720	)	$	538,273	$	595,384	$	2,674		$	(6,513	)	$	591,545

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For maturity dates, related interest rates, monthly debt service, and monthly escrow payments, see Note 8.

At June 30, 2016, the weighted average interest rate of all our outstanding indebtedness was 3.56%.

Based on current lending market conditions, we expect that the debt financing we incur, on a total portfolio basis, will not exceed 50% to 55% of the cost of our real estate investments (before deducting depreciation or other non-cash reserves) plus the value of our other assets (50% as of June 30, 2016). We may also increase the amount of debt financing we use with respect to an investment over the amount originally incurred if the value of the investment increases subsequent to our acquisition and if credit market conditions permit us to do so. Our charter limits us from incurring debt such that our total liabilities may not exceed 75% of the cost (before deducting depreciation or other non-cash reserves) of our tangible assets, although we may exceed this limit under certain circumstances. We expect that our primary liquidity source for acquisitions and long-term funding will include proceeds from dispositions and, to the extent we co-invest with other entities, capital from any future joint venture partners. We may also pursue a number of potential other funding sources, including mortgage loans, portfolio level credit lines and government financing.

Operating Costs

In addition to making investments in accordance with our investment objectives, we expect to use our capital resources to make payments to our Advisor. During our operating stage, we expect to continue to make payments to our Advisor for the management of our assets and costs incurred by our Advisor in providing services to us. We describe these payments in more detail in Note 11 of the notes to our consolidated financial statements.

Under our charter, we are required to limit our total operating expenses to the greater of 2% of our average invested assets or 25% of our net income for the four most recently completed fiscal quarters, as these terms are defined in our charter, unless the conflicts committee of our board of directors has determined that such excess expenses were justified based on unusual and non-recurring factors. Operating expense reimbursements for the four fiscal quarters ended June 30, 2016 did not exceed the charter imposed limitation.

Distributions

For the six months ended June 30, 2016, we paid aggregate distributions of $21.5 million, including $7.1 million of distributions paid in cash and $14.4 million of distributions reinvested in shares of common stock through our distribution reinvestment plan, as follows (in thousands, except per share data):

Record Date	Per Common Share	Distribution Date	Distributions Invested in Shares of Common Stock		Net Cash Distribution		Total Aggregate Distribution
January 28, 2016	$0.05	January 29, 2016	$	2,423	$	1,151	$	3,574
February 26, 2016	0.05	February 29, 2016	2,418		1,167		3,585
March 30, 2016	0.05	March 31, 2016	2,415		1,172		3,587
April 28, 2016	0.05	April 29, 2016	2,414		1,181		3,595
May 27, 2016	0.05	June 3, 2016	2,380		1,226		3,606
June 29, 2016	0.05	June 30, 2016	2,357		1,208		3,565
	$0.30		$	14,407	$	7,105	$	21,512

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Distributions declared, distributions paid and cash flows used in operating activities were as follows for the three and six months ended June 30, 2016 (dollars in thousands):     

	Distributions Paid										Distributions Declared			Sources of Distributions Paid
2016	Cash		Distributions Reinvested (DRIP)		Total		Cash Provided By Operating Activities- QTD		Cash Provided By Operating Activities- YTD		Total		Per Share	Amount Paid from Operating Activities/Percent of Total Distributions Paid	Amount Paid from Debt Financing/Percent of Total Distributions Paid	Amount Paid from Dispositions/Percent of Total Distributions Paid
First Quarter	$	3,490	$	7,256	$	10,746	$	4,884	$	4,884	$	10,746	$0.05	$4,884 / 45%	—	$5,862/ 55%
Second Quarter	$	3,615	$	7,151	$	10,766	$	3,788	$	8,672	$	10,766	$0.05	$3,788 / 35%	—	$6,978 / 65%

Our net income attributable to common stockholders' for the six months ended June 30, 2016 was $4.6 million and net cash provided by operating activities of continuing operations was $7.5 million. Our cumulative cash distributions and net loss attributable to common shareholders from inception through June 30, 2016 were $113.2 million and $95.9 million, respectively. We have funded our cumulative distributions, which includes net cash distributions and distributions reinvested by stockholders, with cash flows from operating activities, proceeds from disposal of real estate and proceeds from debt financing. To the extent that we pay distributions from sources other than our cash flow from operating activities or proceeds from asset sales, we will have fewer funds available for investment in commercial real estate and real estate-related debt, the overall return to our stockholders may be reduced and subsequent investors may experience dilution.

Funds from Operations, Modified Funds from Operations and Adjusted Funds from Operations

Funds from operations, or FFO, is a non-GAAP financial performance measure that is widely recognized as a measure of REIT operating performance.  We use FFO as defined by the National Association of Real Estate Investment Trusts to be net income (loss), computed in accordance with GAAP excluding extraordinary items, as defined by GAAP, and gains (or losses) from sales of property (including deemed sales and settlements of pre-existing relationships), plus depreciation and amortization on real estate assets, and after related adjustments for unconsolidated partnerships, joint ventures and subsidiaries and noncontrolling interests.  We believe that FFO is helpful to our investors and our management as a measure of operating performance because it excludes real estate-related depreciation and amortization, gains and losses from property dispositions, and extraordinary items, and as a result, when compared year to year, reflects the impact on operations from trends in occupancy rates, rental rates, operating costs, development activities, general and administrative expenses, and interest costs, which are not immediately apparent from net income.  Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate and intangibles diminishes predictably over time.  Since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered the presentation of operating results for real estate companies that use historical cost accounting alone to be insufficient.  As a result, our management believes that the use of FFO, together with the required GAAP presentations, is helpful for our investors in understanding our performance.  Factors that impact FFO include start-up costs, fixed costs, delay in buying assets, lower yields on cash held in accounts, income from portfolio properties and other portfolio assets, interest rates on acquisition financing and operating expenses.  In addition, FFO will be affected by the types of investments in our targeted portfolio which will consist of, but are not limited to: (i) multifamily rental properties purchased as non-performing or distressed loans or as real estate owned by financial institutions and (ii) multifamily rental properties to which we can add value with a capital infusion (referred to as “value add properties”).

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Since FFO was promulgated, GAAP has adopted several new accounting pronouncements, such that management and many investors and analysts have considered the presentation of FFO alone to be insufficient. Accordingly, in addition to FFO, we use modified funds from operations, or MFFO, as defined by the Investment Program Association, or IPA.  MFFO excludes from FFO the following items:

(1) acquisition fees and expenses;

(2) straight-line rent amounts, both income and expense;

(3) amortization of above- or below-market intangible lease assets and liabilities;

(4) amortization of discounts and premiums on debt investments;

(5) impairment charges;

(6) gains or losses from the early extinguishment of debt;

(7) gains or losses on the extinguishment or sales of hedges, foreign exchange, securities and other derivatives holdings except where the trading of such instruments is a fundamental attribute of our operations;

(8) gains or losses related to fair-value adjustments for derivatives not qualifying for hedge accounting, including interest rate and foreign exchange derivatives;

(9) gains or losses related to consolidation from, or deconsolidation to, equity accounting;

(10) gains or losses related to contingent purchase price adjustments; and

(11) adjustments related to the above items for unconsolidated entities in the application of equity accounting.

We believe that MFFO is helpful in assisting management assess the sustainability of operating performancein future periods and, in particular, after our acquisition stage is complete, primarily because it excludes acquisition expenses that affect property operations only in the period in which the property is acquired. Thus, MFFO provides helpful information relevant to evaluating our operating performance in periods in which there is no acquisition activity.    

As explained below, management’s evaluation of our operating performance excludes the items considered in the calculation based on the following economic considerations.  Many of the adjustments in arriving at MFFO are not applicable to us.  Nevertheless, we explain below the reasons for each of the adjustments made in arriving at our MFFO definition:

• Acquisition expenses. In evaluating investments in real estate, including both business combinations and investments accounted for under the equity method of accounting, management’s investment models and analysis differentiate costs to acquire the investment from the operations derived from the investment. Prior to 2009, acquisition costs for both of these types of investments were capitalized under GAAP; however, beginning in 2009, acquisition costs related to business combinations are expensed.  Both of these acquisition costs will continue to be funded from the proceeds of debt financing and proceeds from property dispositions and not from operations.  We believe by excluding expensed acquisition costs, MFFO provides useful supplemental information that is comparable for each type of real estate investment and is consistent with management’s analysis of the investing and operating performance of our properties.  Acquisition expenses include those paid to our Advisor or third parties.

• Adjustments for straight-line rents and amortization of discounts and premiums on debt investments.  In the proper application of GAAP, rental receipts and discounts and premiums on debt investments are allocated to periods using various systematic methodologies. This application will result in income recognition that could be significantly different than underlying contract terms. By adjusting for these items, MFFO provides useful supplemental information on the realized economic impact of lease terms and debt investments and aligns results with management’s analysis of operating performance.

• Adjustments for amortization of above or below market intangible lease assets.  Similar to depreciation and amortization of other real estate related assets that are excluded from FFO, GAAP implicitly assumes that the value of intangibles diminishes predictably over time and that these charges be recognized currently in revenue.  Since real estate values and market lease rates in the aggregate have historically risen or fallen with market conditions, management believes that by excluding these charges, MFFO provides useful supplemental information on the performance of the real estate.

• Impairment charges, gains or losses related to fair-value adjustments for derivatives not qualifying for hedge accounting and gains or losses related to contingent purchase price adjustments.  Each of these items relates to a fair value adjustment, which is based on the impact of current market fluctuations and underlying assessments of general market conditions and specific performance of the holding which may not be directly attributable to current operating performance.  As these gains or losses relate to underlying long-term assets and liabilities, management

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believes MFFO provides useful supplemental information by focusing on the changes in our core operating fundamentals rather than changes that may reflect anticipated gains or losses. In particular, because GAAP impairment charges are not allowed to be reversed if the underlying fair values improve or because the timing of impairment charges may lag the onset of certain operating consequences, we believe MFFO provides useful supplemental information related to current consequences, benefits and sustainability related to rental rate, occupancy and other core operating fundamentals.

• Adjustment for gains or losses related to early extinguishment of hedges, debt, consolidation or deconsolidation and contingent purchase price.  Similar to extraordinary items excluded from FFO, these adjustments are not related to continuing operations.  By excluding these items, management believes that MFFO provides supplemental information related to sustainable operations that will be more comparable between other reporting periods and to other real estate operators.

By providing MFFO, we believe we are presenting useful information that also assists investors and analysts in the assessment of the sustainability of our operating performance after our acquisition stage is completed.  We also believe that MFFO is a recognized measure of sustainable operating performance by the real estate industry.  MFFO is useful in comparing the sustainability of our operating performance after our acquisition stage is completed with the sustainability of the operating performance of other real estate companies that are not as involved in acquisition activities or as affected by other MFFO adjustments.  However, investors are cautioned that MFFO should only be used to assess the sustainability of our operating performance after our acquisition stage is completed, as it excludes acquisition costs that have a negative effect on our operating performance and the reported book value of our common stock and stockholders’ equity during the periods in which properties are acquired.

As an opportunity REIT, a core element of our investment strategy and operations is the acquisition of distressed and value-add properties and the rehabilitation and renovation of such properties in an effort to create additional value in such properties.  As part of our operations, we intend to realize gains from such value-add efforts through the strategic disposition of such properties after we have added value through the execution of our business plan.  As we do not intend to hold any of our properties for a specific amount of time, we intend to take advantage of opportunities to realize gains from our value-add efforts on a regular basis during the course of our operations as such opportunities become available, in all events subject to the rules regarding "prohibited transactions" of real estate investment trusts of the Internal Revenue Code.  Therefore, we also use adjusted funds from operations, or AFFO, in addition to FFO and MFFO when evaluating our operations.  We calculate AFFO by adding/subtracting gains/losses realized on sales of our properties from MFFO.  We believe that AFFO presents useful information that assists investors and analysts in the assessment of our operating performance as it is reflective of the impact that regular, strategic property dispositions have on our continuing operations.

Neither FFO, MFFO nor AFFO should be considered as an alternative to net income attributable to common stockholders, nor as an indication of our liquidity, nor are any of these measures indicative of funds available to fund our cash needs, including our ability to fund distributions.  In particular, as we may continue to acquire properties as part of our ongoing operations, acquisition costs and other adjustments that are increases to MFFO and AFFO are, and may continue to be, a significant use of cash.  Accordingly, FFO, MFFO and AFFO should be reviewed in connection with other GAAP measurements.  Our FFO, MFFO and AFFO as presented may not be comparable to amounts calculated by other REITs.

49

The following section presents our calculation of FFO, MFFO and AFFO and provides additional information related to our operations (in thousands, except per share amounts).  Amounts reported in the table below include adjustments attributable to noncontrolling interests.

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2015			2016			2015
Net income (loss) attributable to stockholders – GAAP	$	2,402		$	(12,284	)	$	4,601		$	4,744
Net gains on dispositions of properties and joint venture interests	(9,701		)	(4,376		)	(21,233		)	(33,551		)
Depreciation expense	10,917			10,118			22,059			18,753
FFO attributable to common stockholders	3,618			(6,542		)	5,427			(10,054		)
Adjustments for straight-line rents (1)	14			16			—			16
Amortization of intangible lease assets	4			1,504			220			2,972
Realized loss on change in fair value of interest rate cap	—			—			72			—
Debt premium amortization	(122		)	(128		)	(242		)	(253		)
Acquisition costs	—			4,108			—			5,809
MFFO attributable to common stockholders	$	3,514		$	(1,042	)	$	5,477		$	(1,510	)
Net gains on dispositions of properties and joint venture interests	9,701			4,376			21,233			33,551
AFFO attributable to common stockholders	$	13,215		$	3,334		$	26,710		$	32,041
Basic and diluted income per common share - GAAP	$	0.03		$	(0.18	)	$	0.06		$	0.07
FFO per common share	$	0.05		$	(0.09	)	$	0.08		$	(0.14	)
MFFO per common share	$	0.05		$	(0.01	)	$	0.08		$	(0.02	)
AFFO per common share	$	0.18		$	0.05		$	0.37		$	0.46
Weighted average shares outstanding	72,005			70,107			71,862			69,798

(1)    Adjustment to prior periods to conform to current period presentation.

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP.  The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of our assets, liabilities, revenues and cost and expenses, and related disclosure of contingent assets and liabilities.  On an on-going basis, we evaluate our estimates, including those related to certain accrued liabilities.  We base our estimates on historical experience and on various other assumptions that we believe reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.  Actual results may differ from these estimates under different assumptions or conditions.

For a discussion of our critical accounting policies and estimates, see the discussion in our Annual Report on Form 10-K for the year ended December 31, 2015 under “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies.”

Off-Balance Sheet Arrangements

As of December 31, 2015, we were obligated to fund up to an additional $1.1 million for the Spring Hill preferred equity investment in increments of $150,000 upon request as long as no triggering event had occurred. However, this investment was repaid in full on June 6, 2016 and we are no longer obligated to fund additional sums. We did not have any other off-balance sheet arrangements or obligations.

50

Subsequent Events

On July 8, 2016, we sold the Nesbit Palisades, located in Alpharetta, Georgia, for $45.5 million. In conjunction with the sale, we paid off the outstanding mortgage loan secured by the property. We expect to record a gain on the sale during the three months ended September 30, 2016.

On July 21, 2016, our Board of Directors declared a $0.05 per share cash distribution to its common stockholders of record at the close of business on each of the following record dates: July 28, 2016, August 30, 2016 and September 29, 2016. Such distributions were or are to be paid on July 29, 2016, August 31, 2016 and September 30, 2016.

We have evaluated subsequent events and determined that no events have occurred, other than those disclosed above, which would require an adjustment to or additional disclosure in the consolidated financial statements.

51

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risk from our financial instruments primarily from changes in market interest rates. We do not have exposure to any other significant market risks. We monitor interest rate risk as an integral part of our overall risk management, which recognizes the unpredicatability of financial markets and seeks to reduce the potentially adverse effect on our results of operations. Our operating results are affected by changes in interest rates, primarily changes in LIBOR as a result of borrowings under our credit facility and outstanding mortgage loans.

We enter into derivative financial instruments to manage exposures that arise from business activities that result in the payment of future known and uncertain cash amounts, the value of which are determined by interest rates. Our objectives in using interest rate derivatives are to add stability to interest expense and to manage our exposure to interest rate movements. To accomplish this objective, we entered into a total of eight interest rate caps that were designated as cash flow hedges during 2013, 2014, 2015 and 2016. Interest rate caps designated as cash flow hedges involve the receipt of variable amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an up-front premium.

As of June 30, 2016 and December 31, 2015, we had $218.2 million and $282.0 million, respectively, in variable rate debt outstanding. If interest rates on the variable rate debt had been 100 basis points higher during the six months ended June 30, 2016 and the year ended December 31, 2015, our annual interest expense would have increased by approximately $2.5 millionand $2.2 million, respectively.

In addition, changes in interest rates affect the fair value of our fixed rate mortgage notes payable. Fixed rate mortgage notes payable with an aggregate carrying value of $328.8 million and $351.6 million at June 30, 2016 and December 31, 2015, respectively, had an estimated aggregate fair value of $342.0 million and $359.7 million, respectively, computed using rates available to us for debt with similar terms and remaining maturities. If interest rates had been 100 basis points higher as of June 30, 2016 and December 31, 2015, the fair value of this fixed rate debt would have decreased by $12.8 million and $14.0 million, respectively.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As of the end of the period covered by this report, management, including our principal executive officer and principal financial officer, carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based upon, and as of the date of, that evaluation, our principal executive officer and principal financial officer concluded that the disclosure controls and procedures were effective as of the end of the period covered by this quarterly report to ensure that information required to be disclosed in the reports we file and submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in applicable SEC rules and forms, including providing a reasonable level of assurance that information required to be disclosed by us in such reports is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting that occurred during the quarter ended June 30, 2016 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

52

PART II.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Unregistered Sale of Equity Securities

All securities sold by us during the six months ended June 30, 2016 were sold in an offering registered under the Securities Act of 1933, as amended (the "Securities Act").

Redemption of Securities

During the three months ended June 30, 2016, we redeemed shares of our common stock as follows:

Period	Total Number of Shares Redeemed (1)	Average Price Paid per Share	Total Number of Shares Purchased as Part of a Publicly Announced Plan or Program (2)	Approximate Dollar Value of Shares Available That May Yet Be Redeemed Under the Program
April 2016	47,331	$10.83	47,331	(2)
May 2016	—	$—	—	(2)
June 2016	1,069,409	$10.83	1,069,409	(2)
	1,116,740

(1) All redemptions of equity securities in the three months endedJune 30, 2016 were made pursuant to our share redemption program. All redemption requests tendered were honored during the three months ended June 30, 2016.

(2) The share redemption program commenced on June 16, 2010 and was subsequently amended on September 29, 2011.

(3) We currently limit the dollar value and number of shares that may be redeemed under the program as described below.

We will not redeem in excess of 5% of the weighted-average number of shares outstanding during the 12-month period immediately prior to the effective date of redemption. Our board of directors will determine at least quarterly whether it has sufficient excess cash to redeem shares. Generally, the cash available for redemptions will be limited to proceeds from our distribution reinvestment plan plus, if we have positive operating cash flow from the previous fiscal year, 1% of all operating cash flow from the previous year.

Our share redemption program, including redemptions sought upon a stockholder's death or disability or upon confinement of a stockholder to a long-term care facility, will be available only for stockholders who purchase their shares directly from us or the transferees mentioned below, and is not intended to provide liquidity to any stockholder who acquired his or her shares by purchase from another stockholder. In connection with a request for redemption, the stockholder or his or her estate, heir or beneficiary will be required to certify to us that the stockholder acquired the shares to be repurchased either (1) directly from us or (2) from the original investor by way of (i) a bona fide gift not for value to, or for the benefit of, a member of the investor's immediate or extended family (including the investor's spouse, parents, siblings, children or grandchildren and including relatives by marriage), (ii) through a transfer to a custodian, trustee or other fiduciary for the account of the investor or members of the investor's immediate or extended family in connection with an estate planning transaction, including by bequest or inheritance upon death or (iii) operation of law.

Our board of directors, in its sole discretion, may suspend, terminate or amend our share redemption program without stockholder approval upon 30 days' notice if it determines that such suspension, termination or amendment is in our best interest. Our board may also reduce the number of shares purchased under the share redemption program if it determines the funds otherwise available to fund our share redemption program are needed for other purposes. These limitations apply to all redemptions, including redemptions sought upon the stockholder's death, qualifying disability or confinement to a long-term care facility.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

(a) There have been no defaults with respect to any of our indebtedness.

(b) Not applicable.

53

ITEM 6. EXHIBITS

Exhibit No.	Description
2.1	Agreement and Plan of Merger, dated July 18, 2013, by and among Paladin Realty Income Properties, Inc., Paladin Realty Income Properties, L.P., Resource Real Estate Opportunity OP, LP, and RRE Charlemagne Holdings, LLC (incorporated by reference to the Company’s Post-Effective Amendment No. 13 to the Registration Statement on Form S-11 (No. 333-163411) filed September 16, 2013)
2.2	Second Amendment to Agreement and Plan of Merger, dated September 13, 2013, by and among Paladin Realty Income Properties, Inc., Paladin Realty Income Properties, L.P., Resource Real Estate Opportunity OP, LP, and RRE Charlemagne Holdings, LLC (incorporated by reference to the Company’s Post-Effective Amendment No. 13 to the Registration Statement on Form S-11 (No. 333-163411) filed September 16, 2013)
2.3	Third Amendment to Agreement and Plan of Merger, dated December 16, 2013, by and among Paladin Realty Income Properties, Inc., Paladin Realty Income Properties, L.P., Resource Real Estate Opportunity OP, LP, and RRE Charlemagne Holdings, LLC (incorporated by reference to Post-Effective Amendment No. 15 to the Company's Registration Statement on Form S-11 (No. 333-160463) filed December 30, 2013)
3.1	Amended and Restated Articles of Incorporation (incorporated by reference to Pre-Effective Amendment No. 3 to the Company’s Registration Statement on Form S-11 (No. 333-160463) filed February 9, 2010)
3.2	Bylaws (incorporated by reference to Pre-Effective Amendment No. 3 to the Company’s Registration Statement on Form S-11 (No. 333-160463) filed February 9, 2010)
4.1	Form of Distribution Reinvestment Plan Enrollment Form (incorporated by reference to the Company’s Registration Statement on Form S-3 (No. 333-211721) filed May 31, 2016)
4.2	Statement regarding restrictions on transferability of shares of common stock (to appear on stock certificate or to be sent upon request and without charge to stockholders issued shares without certificates) (incorporated by reference to Pre-Effective Amendment No. 2 to the Company’s Registration Statement on Form S-11 (No. 333-160463) filed November 12, 2009)
4.3	Second Amended and Restated Distribution Reinvestment Plan (incorporated by reference to the Company’s Registration Statement on Form S-3 (No. 333-211721) filed May 31, 2016)

31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer pursuant to Section 1350 18 U.S.C., as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Financial Officer pursuant to Section 1350 18 U.S.C., as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.1	Amended and Restated Share Redemption Program (incorporated by reference to the Company's Quarterly Report on Form 10-Q filed November 14, 2011)
101.1	Interactive Data Files

54

SIGNATURES

Pursuant to the requirements of Section 12 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.

		RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.
August 15, 2016	By:	/s/ Alan F. Feldman
		ALAN F. FELDMAN
		Chief Executive Officer
		(Principal Executive Officer)
August 15, 2016	By:	/s/ Steven R. Saltzman
		STEVEN R. SALTZMAN
		Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)

55

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Alan F. Feldman, certify that:

1) I have reviewed this quarterly report on Form 10-Q for the quarter ended June 30, 2016 of Resource Real Estate Opportunity REIT, Inc.;

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

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

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

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

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

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

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

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

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

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

	RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.
August 15, 2016	By:	/s/ Alan F. Feldman
		Alan F. Feldman
		Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Steven R. Saltzman, certify that:

1) I have reviewed this quarterly report on Form 10-Q for the quarter ended June 30, 2016 of Resource Real Estate Opportunity REIT, Inc.;

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

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

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

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

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

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

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

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

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

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

	RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.
August 15, 2016	By:	/s/ Steven R. Saltzman
		Steven R. Saltzman
		Chief Financial Officer
		(Principal Financial Officer)

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 Resource Real Estate Opportunity REIT, Inc. (“the Company”) on Form 10-Q for the quarter ended June 30, 2016 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Alan F. Feldman, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(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.

	RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.
August 15, 2016	By:	/s/ Alan F. Feldman
		Alan F. Feldman
		Chief Executive Officer
		(Principal Executive Officer)

EX-32.2

EXHIBIT 32.2

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 Resource Real Estate Opportunity REIT, Inc. (“the Company”) on Form 10-Q for the quarter ended June 30, 2016 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Steven R. Saltzman, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(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.

	RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.
August 15, 2016	By:	/s/ Steven R. Saltzman
		Steven R. Saltzman
		Chief Financial Officer
		(Principal Financial Officer)

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Aug. 05, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	Resource Real Estate Opportunity REIT, Inc.
Entity Central Index Key	0001466225
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Document Type	10-Q
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding		71,713,289

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Investments:
Rental properties, net	$ 849,696	$ 916,498
Other investments	764	4,643
Identified intangible assets, net	154	374
Assets held for sale - rental properties, net	26,602	69,350
Total investments	877,216	990,865
Cash	82,192	78,442
Restricted cash	6,422	9,987
Due from related parties	2,004	1,421
Tenant receivables, net	141	211
Deposits	191	230
Prepaid expenses and other assets	4,824	2,227
Goodwill	711	1,231
Other assets associated with rental properties held for sale	0	81
Total assets	973,701	1,084,695
Liabilities:
Mortgage notes payable, net	538,273	591,545
Credit facility	5,394	21,894
Accounts payable	5,351	1,583
Accrued expenses and other liabilities	5,944	7,932
Accrued real estate taxes	5,321	6,856
Due to related parties	1,477	1,185
Tenant prepayments	922	1,212
Security deposits	2,553	2,626
Other liabilities associated with rental properties held for sale	0	16,763
Total liabilities	565,235	651,596
Equity:
Preferred stock (par value $.01; 10,000,000 shares authorized, none issued)	0	0
Common stock (par value $.01; 1,000,000,000 shares authorized; 73,674,067 and 72,333,652 shares issued, respectively; and 71,495,449 and 71,617,117 shares outstanding, respectively)	715	716
Convertible stock (“promote shares”; par value $.01; 50,000 shares authorized, issued and outstanding)	1	1
Additional paid-in capital	636,992	638,335
Accumulated other comprehensive loss	(391)	(440)
Accumulated deficit	(230,277)	(213,366)
Total stockholders’ equity	407,040	425,246
Noncontrolling interests	1,426	7,853
Total equity	408,466	433,099
Total liabilities and equity	$ 973,701	$ 1,084,695

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, authorized (in shares)	10,000,000	10,000,000
Preferred stock, issued (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized (in shares)	1,000,000,000	1,000,000,000
Common stock, issued (in shares)	73,674,067	72,333,652
Common stock, outstanding (in shares)	71,495,449	71,617,117
Convertible stock ('promote shares'), par value (in dollars per share)	$ 0.01	$ 0.01
Convertible stock ('promote shares'), authorized (in shares)	50,000	50,000
Convertible stock ('promote shares'), issued (in shares)	50,000	50,000
Convertible stock ('promote shares'), outstanding (in shares)	50,000	50,000

XML

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Revenues:
Rental income	$ 30,357	$ 28,250	$ 60,748	$ 55,821
Interest and dividend income	364	162	529	325
Total revenues	30,721	28,412	61,277	56,146
Expenses:
Rental operating - expenses	7,251	7,857	14,860	15,792
Rental operating - payroll	3,731	3,974	7,588	8,181
Rental operating - real estate taxes	3,401	3,438	7,027	6,456
Subtotal - Rental operating expenses	14,383	15,269	29,475	30,429
Acquisition costs	0	4,108	0	5,809
Management fees	4,032	3,719	8,087	7,180
General and administrative	2,980	3,359	6,495	6,881
Loss on disposal of assets	144	1,372	286	2,481
Provision for loan loss	0	130	0	130
Depreciation and amortization expense	10,945	12,059	22,339	22,356
Total expenses	32,484	40,016	66,682	75,266
Loss before other income (expense)	(1,763)	(11,604)	(5,405)	(19,120)
Other income (expense):
Net gains on dispositions of properties and joint venture interests	9,701	4,376	27,456	33,551
Interest expense	(5,582)	(5,408)	(11,355)	(10,275)
Insurance proceeds in excess of cost basis	71	160	211	407
Total other income (expense)	4,190	(872)	16,312	23,683
Net income (loss)	2,427	(12,476)	10,907	4,563
Net (income) loss attributable to noncontrolling interests	(25)	192	(6,306)	181
Net income (loss) attributable to stockholders	2,402	(12,284)	4,601	4,744
Net income	2,427	(12,476)	10,907	4,563
Other comprehensive (loss) income:
Reclassification adjustment for realized loss on derivative due to sale	0	0	72	0
Designated derivatives, fair value adjustments	(7)	(41)	(23)	(125)
Total other comprehensive (loss) income	(7)	(41)	49	(125)
Comprehensive income (loss)	2,420	(12,517)	10,956	4,438
Comprehensive (income) loss attributable to noncontrolling interests	(25)	192	(6,306)	181
Total comprehensive income (loss) attributable to stockholders	$ 2,395	$ (12,325)	$ 4,650	$ 4,619
Weighted average common shares outstanding (in shares)	72,005	70,107	71,862	69,798
Basic and diluted loss per common share:
Net income (loss) per common share (in dollars per share)	$ 0.03	$ (0.18)	$ 0.06	$ 0.07

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - 6 months ended Jun. 30, 2016 - USD ($) $ in Thousands	Total	Total Stockholders’ Equity	Common Stock	Convertible Stock	Additional Paid-in Capital	Accumulated Other Comprehensive (Loss) Income	Accumulated Deficit	Noncontrolling interests
Beginning balance at Dec. 31, 2015	$ 433,099	$ 425,246	$ 716	$ 1	$ 638,335	$ (440)	$ (213,366)	$ 7,853
Beginning balance (in shares) at Dec. 31, 2015	71,617,117		71,617,000	50,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issued through distribution reinvestment plan	$ 14,407	14,407	$ 13		14,394
Common stock issued through distribution reinvestment plan (in shares)	1,300,000		1,340,000
Distributions on common stock	$ (21,512)	(21,512)					(21,512)
Common stock redemptions	$ (15,751)	(15,751)	$ (14)		(15,737)
Common stock redemptions (in shares)	(1,462,083)		(1,462,000)
Other comprehensive income	$ 49	49				49
Deconsolidation of subsidiaries	(3,613)							(3,613)
Distribution to noncontrolling interests	(9,120)							(9,120)
Net income	10,907	4,601					4,601	6,306
Ending balance at Jun. 30, 2016	$ 408,466	$ 407,040	$ 715	$ 1	$ 636,992	$ (391)	$ (230,277)	$ 1,426
Ending balance (in shares) at Jun. 30, 2016	71,495,449		71,495,000	50,000

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Cash flows from operating activities:
Net income	$ 10,907	$ 4,563
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Loss on disposal of assets	286	2,481
Casualty losses	80	0
Provision for loan loss	0	130
Net gains on dispositions of properties and joint venture interests	(27,456)	(33,551)
Depreciation and amortization	22,339	22,356
Amortization of deferred financing costs	1,232	906
Amortization of fair value adjustment of debt	(242)	(374)
Realized loss on change in fair value of interest rate cap	72	0
Accretion of discount and direct loan fees and costs	(22)	(17)
Changes in operating assets and liabilities, net of acquisitions:
Restricted cash	1,711	906
Tenant receivables, net	3	168
Deposits	6	(38)
Prepaid expenses and other assets	(788)	(17)
Due to/from related parties, net	(611)	(1,101)
Accounts payable and accrued expenses	44	(1,286)
Tenant prepayments	(237)	(172)
Security deposits	157	55
Net cash provided by (used in) operating activities	7,481	(4,991)
Cash flows from investing activities:
Proceeds from disposal of properties and joint venture interests, net of closing costs	56,444	55,051
Property acquisitions	0	(96,953)
Insurance proceeds received for casualty losses	178	0
Acquisition of preferred equity interest	(408)	0
Sale of preferred equity interest	4,300	0
Capital expenditures	(13,291)	(17,465)
Restricted cash	1,191	(690)
Principal payments received on loans held for investment	9	591
Net cash provided by (used in) investing activities	48,423	(59,466)
Cash flows from financing activities:
Redemptions of common stock	(15,751)	(1,849)
Payment of deferred financing costs	(170)	(402)
Increase in borrowings on mortgages	12,296	26,280
Principal payments on borrowings on mortgages	(15,804)	(2,926)
Proceeds from borrowings on credit facility	12,500	30,918
Payments on credit facility	(29,000)	(20,288)
Distributions paid on common stock	(7,105)	(6,496)
Contributions of noncontrolling interests	0	151
Purchase of interest rate caps	0	(91)
Distributions to noncontrolling interests	(9,120)	0
Net cash (used in) provided by financing activities	(52,154)	25,297
Net increase (decrease) in cash	3,750	(39,160)
Cash at beginning of period	78,442	140,129
Cash at end of period	$ 82,192	$ 100,969

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NATURE OF BUSINESS AND OPERATIONS

6 Months Ended

Jun. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

NATURE OF BUSINESS AND OPERATIONS

NOTE 1 - NATURE OF BUSINESS AND OPERATIONS

Resource Real Estate Opportunity REIT, Inc. (the “Company”) was organized in Maryland on June 3, 2009 to purchase a diversified portfolio of discounted U.S. commercial real estate and real estate-related assets in order to generate gains to stockholders from the potential appreciation in the value of the assets and to generate current income for stockholders by distributing cash flow from the Company’s investments. Resource Real Estate Opportunity Advisor, LLC (the “Advisor”), an indirect wholly-owned subsidiary of Resource America, Inc. (“RAI”), a publicly traded company (NASDAQ: REXI) operating in the real estate, financial fund management and commercial finance sectors, has been engaged to manage the day-to-day operations of the Company. 

Through its private offering and primary public offering, which concluded on December 13, 2013, the Company raised aggregate gross offering proceeds of $645.8 million, which resulted in the issuance of 64.9 million shares of common stock, including 276,056 shares purchased by the Advisor and 1.2 million shares sold in the Company's distribution reinvestment plan. During the years ended December 31, 2015 and 2014, the Company issued 5.3 million additional shares for $51.9 million pursuant to its distribution reinvestment plan. During the six months ended June 30, 2016, the Company additionally issued 1.3 million shares for $14.4 million pursuant to its distribution reinvestment plan. The Company's distribution reinvestment plan offering is ongoing.

The Company has acquired, and may continue to acquire, real estate-related debt and equity. The Company has a particular focus on acquiring and operating multifamily assets, and it has targeted, and intends to continue to target, this asset class while also possibly acquiring interests in other types of commercial property assets consistent with its investment objectives.  The Company’s targeted portfolio consists of commercial real estate assets, principally (i) multifamily rental properties purchased as non-performing or distressed loans or as real estate that was foreclosed upon and sold by financial institutions and (ii) multifamily rental properties to which the Company can add value with a capital infusion (referred to as “value add properties”).  However, the Company is not limited in the types of real estate assets in which it may invest and, accordingly, it may invest in other real estate-related assets either directly or together with a co-investor or joint venture partner.

The Company is organized and conducts its operations in a manner intended to allow it to qualify as a real estate investment trust (“REIT”) for U.S. federal income tax purposes under Subchapter M of the Internal Revenue Code of 1986, as amended.  The Company also operates its business in a manner intended to maintain its exemption from registration under the Investment Company Act of 1940, as amended.

The consolidated financial statements and the information and tables contained in the notes to the consolidated financial statements are unaudited. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). However, in the opinion of management, these interim financial statements include all the necessary adjustments to fairly present the results of the interim periods presented. The consolidated balance sheet as of December 31, 2015 was derived from the audited consolidated financial statements as of and for the year ended December 31, 2015. The unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. The results of operations for the six months ended June 30, 2016 may not necessarily be indicative of the results of operations for the full year ending December 31, 2016.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summary of the significant accounting policies consistently applied in the preparation of the accompanying consolidated financial statements follows:

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries as follows:

Subsidiary	Apartment Complex	Number of Units	Property Location
RRE Opportunity Holdings, LLC	N/A	N/A	N/A
Resource Real Estate Opportunity OP, LP	N/A	N/A	N/A
RRE Charlemagne Holdings, LLC	N/A	N/A	N/A

RRE Iroquois, LP (“Vista”)	Vista Apartment Homes	133	Philadelphia, PA
RRE Iroquois Holdings, LLC	N/A	N/A	N/A
RRE Cannery Holdings, LLC (“Cannery”)	Cannery Lofts	156	Dayton, OH
RRE Williamsburg Holdings, LLC (“Williamsburg”)	Williamsburg	976	Cincinnati, OH
WPL Holdings, LLC	N/A (a)	N/A	Cincinnati, OH
RRE Park Forest Holdings, LLC ("Park Forest")	Mosaic	216	Oklahoma City, OK
RRE Deerfield Holdings, LLC ("Deerfield")	Deerfield	166	Hermantown, MN
RRE Autumn Wood Holdings, LLC ("Autumn Wood")	Retreat at Rocky Ridge	206	Hoover, AL
RRE Village Square Holdings, LLC ("Village Square")	Trailpoint at the Woodlands	271	Houston, TX
RRE Brentdale Holdings, LLC ("Brentdale")	The Westside Apartments	412	Plano, TX
RRE Jefferson Point Holdings, LLC ("Jefferson Point")	Tech Center Square	208	Newport News, VA
RRE Centennial Holdings, LLC ("Centennial")	Verona Apartment Homes	276	Littleton, CO
RRE Pinnacle Holdings, LLC ("Pinnacle")	Skyview Apartment Homes	224	Westminster, CO
RRE Jasmine Holdings, LLC ("Jasmine")	The Nesbit Palisades	437	Alpharetta, GA
RRE River Oaks Holdings, LLC ("River Oaks")	Maxwell Townhomes	314	San Antonio, TX
RRE Nicollet Ridge Holdings, LLC ("Nicollet Ridge")	Meridian Pointe	339	Burnsville, MN
RRE Addison Place Holdings, LLC ("Addison Place")	The Estates at Johns Creek	403	Alpharetta, GA
PRIP Coursey, LLC ("Evergreen at Coursey Place")	Evergreen at Coursey Place (b)	352	Baton Rouge, LA
PRIP 500, LLC ("Pinehurst")	Pinehurst (b)	146	Kansas City, MO
PRIP 1102, LLC ("Pheasant Run")	Pheasant Run (b)	160	Lee's Summit, MO
PRIP 11128, LLC ("Retreat at Shawnee")	Retreat at Shawnee (b)	342	Shawnee, KS
PRIP Stone Ridge, LLC ("Stone Ridge")	N/A (b)	N/A	N/A
PRIP Pines, LLC ("Pines of York")	Pines of York (b)	248	Yorktown, VA
RRE Chisholm Place Holdings LLC ("Chisholm Place")	Chisholm Place	142	Plano, TX
RRE Berkeley Run Holdings, LLC ("Berkley Run")	Perimeter Circle	194	Atlanta, GA
RRE Berkeley Trace Holdings LLC ("Berkley Trace")	Perimeter 5550	165	Atlanta, GA
RRE Merrywood Holdings, LLC ("Merrywood")	Aston at Cinco Ranch	228	Katy, TX
RRE Sunset Ridge Holdings, LLC ("Sunset Ridge")	Sunset Ridge	324	San Antonio, TX
RRE Parkridge Place Holdings, LLC ("Parkridge Place")	Calloway at Las Colinas	536	Irving, TX
RRE Woodmoor Holdings, LLC ("Woodmoor")	South Lamar Village	208	Austin, TX
RRE Gilbert Holdings, LLC ("Springs at Gilbert")	Heritage Pointe	458	Gilbert, AZ
RRE Bonita Glen Holdings, LLC ("Bonita")	Villages at Bonita Glen	295	Chula Vista, CA
RRE Yorba Linda Holdings, LLC ("Yorba Linda")	Yorba Linda	400	Yorba Linda, CA
		8,935
Subsidiaries related to disposed investments:
RRE Crestwood Holdings, LLC (“Crestwood”)	(c)	N/A	N/A
RRE 107th Avenue Holdings, LLC (“107th Avenue”)	(c)	N/A	N/A
RRE Westhollow Holdings, LLC (“Westhollow”)	(c)	N/A	N/A
RRE Campus Club Holdings, LLC (“Campus Club”)	(c)	N/A	N/A
RRE Bristol Holdings, LLC (“Bristol”)	(c)	N/A	N/A
RRE Skyview Holdings, LLC ("Skyview")	(c)	N/A	N/A
RRE Foxwood Holdings, LLC ("Foxwood")	(c)	N/A	N/A
RRE Flagstone Holdings, LLC ("Flagstone")	(c)	N/A	N/A
RRE Kenwick Canterbury Holdings, LLC ("Kenwick & Canterbury")	(c)	N/A	N/A
RRE Armand Place Holdings, LLC ("Armand")	(d)	N/A	N/A

PRIP 5060/6310, LLC ("Governor Park")	(b)(c)	N/A	N/A
PRIP 3700, LLC ("Champion Farms")	(b)(d)	N/A	N/A
PRIP 6700, LLC ("Hilltop Village")	(b)(c)	N/A	N/A
PRIP 3383, LLC ("Conifer Place")	(b)(d)	N/A	N/A
RRE Nob Hill Holdings, LLC ("Nob Hill")	(d)	N/A	N/A
RRE Spring Hill Holdings, LLC ("Spring Hill")	(e)	N/A	N/A
PRIP 10637, LLC ("Fieldstone")	(b)(d)	N/A	N/A

N/A - Not Applicable

(a) - Subsidiary holds a portion of the Williamsburg parking lot    

(b) - Wholly-owned subsidiary of RRE Charlemagne Holdings, LLC

(c) - Underlying investment sold prior to 2016

(d) - Underlying investment sold in 2016

(e) - Underlying investment resolved in 2016

All intercompany accounts and transactions have been eliminated in consolidation.

The consolidated financial statements reflect the Company's accounts and the accounts of the Company's majority-owned and/or controlled subsidiaries. The Company follows the provisions of Accounting Standards Codification (“ASC”) Topic 810, “Consolidation,” and accordingly consolidates entities that are variable interest entities (“VIEs”) where it has determined that it is the primary beneficiary of such entities. Once it has been determined that the Company holds a variable interest in a VIE, management performs a qualitative analysis to determine (i) if the Company has the power to direct the matters that most significantly impact the VIE's financial performance; and (ii) if the Company has the obligation to absorb the losses of the VIE that could potentially be significant to the VIE or the right to receive the benefits of the VIE that could potentially be significant to the VIE. If the Company's interest possesses both of these characteristics, the Company is deemed to be the primary beneficiary and would be required to consolidate the VIE. The Company will continually assess its involvement with VIEs and re-evaluate the requirement to consolidate them. For consolidated entities (including VIEs of which the Company is the primary beneficiary), noncontrolling interests are presented and disclosed as a separate component of stockholders' equity (not as a liability or other item outside of stockholders' equity). Consolidated net income (loss) includes the noncontrolling interests’ share of income (loss). All changes in the Company’s ownership interest in a subsidiary are accounted for as stockholders' equity transactions if the Company retains its controlling financial interest in the subsidiary. The portions of these entities that the Company does not own are presented as noncontrolling interests as of the dates and for the periods presented in the consolidated financial statements. The consolidated financial statements include the accounts of the Company's majority-owned and/or controlled subsidiaries, which are VIEs, as follows:

Subsidiary	Ownership %	Apartment Complex	Number of Units	Property Location
Springhurst Housing Partners, LLC (1)	70.0%	Champion Farms	N/A	Louisville, KY
Glenwood Housing Partners I, LLC (2)	83.0%	Fieldstone	N/A	Woodlawn, OH
FPA/PRIP Conifer, LLC (3)	42.5%	Conifer Place	N/A	Norcross, GA
DT Stone Ridge, LLC	83.4%	Stone Ridge	188	Columbia, SC

(1) On January 29, 2016, the Company sold its joint venture interest in Champion Farms to its joint venture partner. As such, the Company deconsolidated the entity as of January 29, 2016. The Company has no continuing involvement with this joint venture. (See Note 6)

(2) On June 30, 2016, the Company sold its joint venture interest in Fieldstone to its joint venture partner. As such, the Company deconsolidated the entity as of June 30, 2016. The Company has no continuing involvement with this joint venture. (See Note 6)

(3) On January 27, 2016, the Company and its joint venture partner sold the Conifer Place Apartments, which resulted in the deconsolidation of the entity as of January 27, 2016. (See Note 6)

The Company's preferred equity investment was a VIE for which the Company had determined it was not the primary beneficiary; therefore, the Company did not consolidate the entity. The Company was not considered the primary beneficiary of the preferred equity investee because it did not possess the unilateral power to direct the key activities of investee that were considered most significant.  Additional information with respect to the preferred equity investment is disclosed in Note 5.

Use of Estimates

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

Assets Held for Sale

The Company presents the assets and liabilities of any rental properties which qualify as held for sale, separately in the consolidated balance sheets. Real estate assets held for sale are measured at the lower of carrying amount or fair value less cost to sell. Both the real estate and the corresponding liabilities are presented separately in the consolidated balance sheets. Subsequent to classification of an asset as held for sale, no further depreciation is recorded. At December 31, 2015, the Company had three rental properties included in assets held for sale. At June 30, 2016, the Company had one rental property included in assets held for sale.

Rental Properties

The Company records acquired rental properties at fair value on their respective acquisition date. The Company considers the period of future benefit of an asset to determine its appropriate useful life and depreciates the rental properties using the straight line method.  The Company anticipates the estimated useful lives of its assets by class as follows:

Buildings	27.5 years
Building improvements	3.0 to 27.5 years
Tenant improvements	Shorter of lease term or expected useful life

Improvements and replacements in excess of $1,000 are capitalized when they extend the useful life of the asset. Resource Real Estate Opportunity Manager, LLC (the “Manager”), an affiliate of the Advisor, earns a construction management fee of 5% of actual aggregate costs to construct improvements, or to repair, rehab or reconstruct a property. These costs are capitalized along with the related asset. Costs of repairs and maintenance are expensed as incurred.

Impairment of Long Lived Assets

When circumstances indicate the carrying value of a property may not be recoverable, the Company reviews the asset for permanent impairment.  This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition.  The review also considers factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors.

An impairment loss will be recorded to the extent that the carrying value exceeds the estimated fair value of a property to be held and used.  For properties held for sale, the impairment loss would be the adjustment to fair value less the estimated cost to dispose of the asset.  There were no impairment charges during the three and six months ended June 30, 2016 and 2015.

Loans Held for Investment, Net

The Company records acquired performing loans held for investment at cost and reviews them for potential impairment at each balance sheet date.  The Company considers a loan to be impaired if one of two conditions exists.  The first condition is if, based on current information and events, management believes it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement.  The second condition is if the loan is deemed to be a troubled-debt restructuring (“TDR”) where a concession has been given to a borrower in financial difficulty.  A TDR may not have an associated specific loan loss allowance if the principal and interest amount is considered recoverable based on current market conditions, expected collateral performance and/or guarantees made by the borrowers.

The amount of impairment, if any, is measured by comparing the recorded amount of the loan to the present value of the expected cash flows or, as a practical expedient, the fair value of the collateral.  If a loan is deemed to be impaired, the Company records a reserve for loan losses through a charge to income for any shortfall.    

Interest income from performing loans held for investment is recognized based on the contractual terms of the loan agreement.  Fees related to any buy down of the interest rate are deferred as prepaid interest income and amortized over the term of the loan as an adjustment to interest income.  The initial investment made in a purchased performing loan includes the amount paid to the seller plus fees.  The initial investment frequently differs from the related loan’s principal amount at the date of the purchase.  The difference is recognized as an adjustment of the yield over the life of the loan.  Closing costs related to the purchase of a performing loan held for investment are amortized over the term of the loan and accreted as an adjustment to interest income.

The Company may acquire real estate loans at a discount due to the credit quality of such loans and the respective borrowers under such loans.  Revenues from these loans are recorded under the effective interest method.  Under this method, an effective interest rate (“EIR”) is applied to the cost basis of the real estate loan held for investment.  The EIR that is calculated when the loan held for investment is acquired remains constant and is the basis for subsequent impairment testing and income recognition.  However, if the amount and timing of future cash collections are not reasonably estimable, the Company accounts for the real estate receivable on the cost recovery method.  Under the cost recovery method of accounting, no income is recognized until the basis of the loan held for investment has been fully recovered.

Preferred Equity Investment

The Company recorded its preferred equity investments at amortized cost. Investments carried at amortized cost were evaluated for impairment at each reporting date. When an investment was impaired and that impairment was considered other than temporary, the amount of the loss accrual was calculated by comparing the carrying amount of the investment to its estimated fair value. This investment was repaid in full on June 6, 2016 (See Note 5).

Dividend income was recognized when earned based on the contractual terms of the preferred equity agreement. 

Allocation of the Purchase Price of Acquired and Foreclosed Assets

The cost of rental properties acquired directly as fee interests and through foreclosing on a loan are allocated to net tangible and intangible assets based on their relative fair values.  The Company allocates the purchase price of properties to acquired tangible assets, consisting of land, buildings, fixtures and improvements, and to identified intangible lease assets and liabilities, consisting of the value of above-market and below-market leases, as applicable, the value of in-place leases and the value of tenant relationships. Fair value estimates are based on information obtained from a number of sources, including information obtained about each property as a result of pre-acquisition due diligence, marketing and leasing activities.  In addition, the Company may obtain independent appraisal reports. The information in the appraisal reports along with the aforementioned information available to the Company's management is used in allocating the purchase price. The independent appraisers have no involvement in management's allocation decisions other than providing market information.

In allocating the purchase price, management also includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up period.  Management also estimates costs to execute similar leases, including leasing commissions and legal and other related expenses, to the extent that such costs have not already been incurred in connection with a new lease origination as part of the transaction.

The Company records above-market and below-market in-place lease values for acquired properties based on the present value (using an interest rate that reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of the lease.  The Company amortizes any capitalized above-market or below-market lease values as an increase or reduction to rental income over the remaining non-cancelable terms of the respective leases.    

The Company measures the aggregate value of other intangible assets acquired based on the difference between (i) the property valued with existing in-place leases adjusted to market rental rates and (ii) the property valued as if it were vacant.  Management’s estimates of value are made using methods similar to those used by independent appraisers (e.g., discounted cash flow analysis).  Factors to be considered by management in its analysis include an estimate of carrying costs during hypothetical expected lease-up periods considering current market conditions and costs to execute similar leases.

The total amount of other intangible assets acquired is further allocated to customer relationship intangible values based on management’s evaluation of the specific characteristics of each tenant’s lease and the Company’s overall relationship with that respective tenant.  Characteristics to be considered by management in allocating these values include the nature and extent of the Company’s existing relationships with the tenant, the tenant’s credit quality and expectations of lease renewals (including those existing under the terms of the lease agreement), among other factors.

The Company amortizes the value of in-place leases to expense over the average remaining term of the respective leases.  The value of customer relationship intangibles are amortized to expense over the initial term and any renewal periods in the respective leases, but in no event will the amortization periods for the intangible assets exceed the remaining depreciable life of the building.  Should a tenant terminate its lease, the unamortized portion of the in-place lease value and customer relationship intangibles associated with that tenant would be charged to expense in that period.

The determination of the fair value of assets and liabilities acquired requires the use of significant assumptions with regard to current market rental rates, discount rates and other variables.  The use of inappropriate estimates would result in an incorrect assessment of the purchase price allocations, which could impact the amount of the Company’s reported net income.  Initial purchase price allocations are subject to change until all information is finalized, which is generally within one year of the acquisition date.

Goodwill

The Company records the excess of the cost of an acquired entity over the difference between the amounts assigned to assets acquired (including identified intangible assets) and liabilities assumed as goodwill. Goodwill is not amortized but is tested for impairment at a level of reporting referred to as a reporting unit during the fourth quarter of each calendar year, or more frequently if events or changes in circumstances indicate that the asset might be impaired.

Revenue Recognition

The Company recognizes minimum rent, including rental abatements and contractual fixed increases attributable to operating leases, on a straight-line basis over the term of the related lease and includes amounts expected to be received in later years in deferred rents.  

The future minimum rental payments to be received from noncancelable operating leases for residential rental properties are $51.2 million and $346,000 for the 12 month periods ending June 30,2017 and 2018, respectively, and none thereafter. The future minimum rental payments to be received from noncancelable operating leases for commercial rental properties and antenna rentals are $362,000, $253,000, $169,000, $120,000, $11,000, and $0 for the 12 month periods ending June 30,2017, 2018, 2019, 2020, 2021, and thereafter, respectively.

Revenue is primarily derived from the rental of residential housing units, however, included within rental income are other income such as pet fees, parking fees, and late fees, as well as property operating expense reimbursements due from tenants for common area maintenance, real estate taxes and other recoverable costs. The Company records the ancillary charges in the period they are earned or received and records the reimbursements in the period in which the related expenses are incurred. Total other income included within rental income was $2.8 million and $2.5 million for the three months ended June 30, 2016 and 2015, respectively. Total other income included within rental income was $5.6 million and $4.5 million for the six months ended June 30, 2016 and 2015, respectively.

Tenant Receivables

Tenant receivables are stated in the financial statements as amounts due from tenants net of an allowance for uncollectible receivables.  Payment terms vary and receivables outstanding longer than the payment terms are considered past due.  The Company determines its allowance by considering a number of factors, including the length of time receivables are past due, security deposits held, the Company’s previous loss history, the tenants’ current ability to pay their obligations to the Company, the condition of the general economy and the industry as a whole.  The Company writes off receivables when they become uncollectible.  At June 30, 2016 and December 31, 2015, there were allowances for uncollectible receivables of $4,399 and $24,100, respectively.

Income Taxes

To maintain its REIT qualification for U.S. federal income tax purposes, the Company is generally required to distribute at least 90% of its taxable net income (excluding net capital gains) to its stockholders as well as comply with other requirements, including certain asset, income and stock ownership tests.  As a REIT, the Company is not subject to federal corporate income tax to the extent that it distributes 100% of its REIT taxable income each year.  If the Company fails to qualify as a REIT, and does not qualify for certain statutory relief provisions, it is subject to U.S. federal, state and local income taxes and may be precluded from qualifying as a REIT for the subsequent four taxable years following the year in which it fails its REIT qualification.  Accordingly, the Company’s failure to qualify as a REIT could have a material adverse impact on its results of operations and amounts available for distribution to its stockholders.

The dividends-paid deduction of a REIT for qualifying dividends to its stockholders is computed using the Company’s taxable income as opposed to net income reported on the financial statements.  Generally, taxable income differs from net income reported on the financial statements because the determination of taxable income is based on tax provisions and not financial accounting principles.

The Company may elect to treat certain of its subsidiaries as taxable REIT subsidiaries (“TRS”). In general, the Company’s TRSs may hold assets and engage in activities that the Company cannot hold or engage in directly and generally may engage in any real estate or non-real estate-related business.  A TRS is subject to U.S. federal, state and local corporate income taxes.  As of June 30, 2016 and December 31, 2015, the Company had no TRSs.

The Company evaluates the benefits from tax positions taken or expected to be taken in its tax return. Only the largest amount of benefits from tax positions that will more likely than not be sustainable upon examination are recognized by the Company.  The Company does not have any unrecognized tax benefits, nor interest and penalties, recorded in its consolidated financial statements and does not anticipate significant adjustments to the total amount of unrecognized tax benefits within the next 12 months.

The Company is subject to examination by the U.S. Internal Revenue Service and by the taxing authorities in other states in which the Company has significant business operations.  The Company is not currently undergoing any examinations by taxing authorities. The Company is not subject to IRS examination for tax return years 2011 and prior.

Earnings Per Share

Basic earnings per share are calculated on the basis of the weighted-average number of common shares outstanding during the year. Basic earnings per share are computed by dividing income available to common stockholders by the weighted-average common shares outstanding during the period.  Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted to common stock.  None of the 50,000 shares of convertible stock (discussed in Note 12) are included in the diluted earnings per share calculations because the necessary conditions for conversion have not been satisfied as of June 30, 2016 (were such date to represent the end of the contingency period).

Reclassifications

Certain amounts in the prior year financial statements have been reclassified to conform to the current-year presentation. The Company has reclassified $428,000 and $956,000 of payroll expenses from General and Administrative to Rental Operating for the three and six months ended June 30, 2015, respectively. The impact of the reclassifications made to prior year amounts are not material and did not affect net income.

In accordance with the adoption of Financial Accounting Standards Board ("FASB") Accounting Standards Update (“ASU”) 2015-03, "Simplifying the Presentation of Debt Issuance Costs", the Company has reclassified $6.5 million of unamortized debt issuance costs at December 31, 2015 from assets to liabilities as a direct reduction of the related mortgage notes payable. In addition, deferred finance costs related to the Company's credit facility were reclassified to prepaid and other assets (See Note 9).

Adoption of New Accounting Standards

In January 2015, FASB issued ASU No. 2015-01, "Income Statement - Extraordinary and Unusual Items (Subtopic 225-20), Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items". The amendments in ASU No. 2015-01 eliminate from GAAP the concept of extraordinary items. Although the amendment will eliminate the requirements for reporting entities to consider whether an underlying event or transaction is extraordinary, the presentation and disclosure guidance for items that are unusual in nature or occur infrequently will be retained and will be expanded to include items that are both unusual in nature and infrequently occurring. ASU No. 2015-01 was effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. On January 1, 2016, the Company adopted ASU No. 2015-01 and the adoption had no impact on the Company's consolidated financial statements.

In February 2015, FASB issued ASU 2015-02, "Consolidation (Topic 810): Amendments to the Consolidation Analysis", which makes certain changes to both the variable interest model and the voting model, including changes to (1) the identification of variable interests (fees paid to a decision maker or service provider), (2) the variable interest entity characteristics for a limited partnership or similar entity and (3) the primary beneficiary determination. On January 1, 2016, the Company adopted ASU 2015-02 and the adoption did not have a significant impact on the Company's consolidated financial statements.

In April 2015, FASB issued ASU 2015-03, "Simplifying the Presentation of Debt Issuance Costs", which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected. Upon adoption, the Company applied the new guidance on a retrospective basis and adjusted the balance sheet of each individual period presented to reflect the period-specific effects of applying the new guidance. This guidance was effective and was adopted by the Company on January 1, 2016. The Company has reclassified $6.5 million of unamortized debt issuance costs at December 31, 2015 from assets to liabilities as a direct reduction of the related mortgage notes payable.

In August 2015, FASB issued ASU 2015-15, "Interest - Imputation of Interest", which clarifies that debt issuance costs associated with line of credit arrangements may continue to be accounted for as assets and not as a direct deduction from the carrying amount of the debt liabilities. This guidance was effective and was adopted by the Company on January 1, 2016. Deferred finance costs related to the Company's credit facility were reclassified to prepaid and other assets (See Note 9).     

In September 2015, FASB issued ASU 2015-16, "Simplifying the Accounting for Measurement-Period Adjustments", which eliminates the requirement to retroactively revise comparative financial information for prior periods presented in financial statements due to changes in provisional amounts recorded for acquisitions in subsequent periods. Upon adoption, disclosure of the amounts recorded in current-period earnings that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized at the acquisition date are required. ASU 2015-16 was effective and adopted by the Company on January 1, 2016 and the adoption had no impact on its consolidated financial statements.

Accounting Standards Issued But Not Yet Effective

In May 2014, FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers”, which will replace most existing revenue recognition guidance in GAAP.  The core principle of ASU No. 2014-09 is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services.  ASU No. 2014-09 requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. ASU No. 2014-09 will be effective for the Company beginning January 1, 2018, including interim periods in 2018, and allows for both retrospective and prospective methods of adoption. The Company is in the process of determining the method of adoption and assessing the impact of this guidance on the Company’s consolidated financial position, results of operations and cash flows.

In August 2014, FASB issued ASU No. 2014-15, "Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern." Under the new guidance, an entity should evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. The guidance will be effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The adoption of the new requirements is not expected to have a material impact on the Company's consolidated financial statements.

In February 2016, FASB issued ASU No. 2016-02, "Leases (Topic 842)", which requires lessees to recognize at the commencement date for all leases, with the exception of short-term leases, (a) a lease liability, which is a lessee‘s obligation to make lease payments arising from a lease, measured on a discounted basis, and (b) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU No. 2016-02 will be effective for the Company beginning January 1, 2019. The Company is evaluating this guidance; however, it does not expect the adoption of ASU No. 2016-02 to have a significant impact on its consolidated financial statements.

In June 2016, FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses”, which requires measurement and recognition of expected credit losses for financial assets held. ASU No. 2016-13 will be effective for the Company beginning January 1, 2019. The Company is evaluating this guidance; however, it does not expect the adoption of ASU No. 2016-13 to have a significant impact on its consolidated financial statements.

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SUPPLEMENTAL CASH FLOW INFORMATION

6 Months Ended

Jun. 30, 2016

Supplemental Cash Flow Elements [Abstract]

SUPPLEMENTAL CASH FLOW INFORMATION

NOTE 3 - SUPPLEMENTAL CASH FLOW INFORMATION

The following table presents the Company's supplemental cash flow information (in thousands):

	Six Months Ended
	June 30,
	2016		2015
Non-cash financing and investing activities:
Stock issued from the distribution reinvestment plan	$	14,407	$	14,432
Deferred financing costs and escrow deposits funded directly by mortgage note and revolving credit facility	—		10,709
Non-cash activity related to sales:
Deconsolidation of mortgage note payable	31,539		—
Deconsolidation of rental properties, net	35,152		—
Noncontrolling interest of deconsolidated subsidiary	3,613		—
Mortgage notes payable settled through sale of property	35,422		—
Sale of property used to settle mortgage notes payable	35,422		—
Assets and liabilities assumed in acquisitions:
Debt assumed	—		40,185
Other liabilities assumed	—		99
Rental properties, net	—		40,284
Cash paid during the period for:
Interest	$	10,538	$	9,388

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RENTAL PROPERTIES, NET

6 Months Ended

Jun. 30, 2016

Real Estate Investments, Net [Abstract]

RENTAL PROPERTIES, NET

NOTE 4 - RENTAL PROPERTIES, NET

The following table presents the Company’s investments in rental properties (in thousands):

	June 30, 2016			December 31, 2015
Land	$	169,019		$	180,533
Building and improvements	734,028			775,239
Furniture, fixtures and equipment	29,064			28,928
Construction in progress	3,903			2,949
	936,014			987,649
Less: accumulated depreciation	(86,318		)	(71,151		)
	$	849,696		$	916,498

Depreciation expense for the three and six months ended June 30, 2016 was $10.9 million and $22.1 million, respectively, and for the three and six months ended June 30, 2015 was $10.6 million and $19.4 million, respectively.

During the three months ended June 30, 2016, the Company entered into an agreement to sell one rental property, the Nesbit Palisades, with a net book value of $26.6 million. The Company confirmed the intent and ability to sell this property in its present condition and this property qualified for held for sale accounting treatment upon meeting all applicable criteria prior to June 30, 2016, at which time depreciation ceased. As such, the assets associated with this property were separately classified and included as assets held for sale on the Company's consolidated balance sheet at June 30, 2016. However, the sale of this property did not qualify for discontinued operations, and, therefore, the operations for all periods presented continue to be classified within continuing operations on the Company's consolidated statements of operations. The Company completed the sale of the Nesbit Palisades on July 8, 2016 (see Note 16).

During the three months ended December 31, 2015, the Company entered into agreements to sell two rental properties, Conifer Place and Ivy at Clear Creek, with a net book value of $43.9 million. The Company confirmed the intent and ability to sell both properties in their present condition and both properties qualified for held for sale accounting treatment upon meeting all applicable criteria prior to December 31, 2015, at which time depreciation ceased. As such, the assets associated with these properties were separately classified and included as assets held for sale on the Company's consolidated balance sheet at December 31, 2015. However, the sale of these properties did not qualify for discontinued operations, and, therefore, the operations for all periods presented continue to be classified within continuing operations on the Company's consolidated statements of operations. The Company completed the sales of both Conifer Place and Ivy at Clear Creek during the three months ended March 31, 2016 (see Note 6).

In December 2015, the Company agreed to sell its 70% interest in the joint venture that owns Champion Farms Apartments to its joint venture partner. The sale was completed in January 2016. As such, all assets and liabilities of the consolidated entity were reclassified to held for sale as of December 31, 2015 in the consolidated balance sheet. In January 2016, the Company deconsolidated the entity (see Note 6).

Loss on disposal of assets. During the three and six months ended June 30, 2016, the Company recorded losses of $144,000 and $286,000, respectively. During the three and six months ended June 30, 2015, the Company recorded losses of $1.4 millionand $2.5 million, respectively, all due to the replacement of appliances at its rental properties in conjunction with unit upgrades.

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OTHER INVESTMENTS

6 Months Ended

Jun. 30, 2016

Investments, Debt and Equity Securities [Abstract]

OTHER INVESTMENTS

NOTE 5 - OTHER INVESTMENTS

The following table presents the Company's components of other investments (in thousands):

	June 30, 2016		December 31, 2015
Loan held for investment, net	$	764	$	757
Preferred equity investment, net	—		3,886
	$	764	$	4,643

Preferred equity investment:

On November 12, 2014, the Company, through its wholly owned subsidiary, RRE Spring Hill Holdings, LLC, made a $3.5 million preferred equity investment in Spring Hill Investors Limited Partner, LLC (the “Investment Vehicle”) and became the Preferred Member. An unaffiliated limited liability company, Presidium AMC Spring Hill Venture, LLC, ("Presidium"), a Texas limited liability company, owns the common equity and acts as the managing member of the Investment Vehicle. In October 2015 and March 2016, the Company funded an additional $800,000 in total.

The Company was paid a dividend equal to 12% of the total amount invested, 7% of which was paid monthly and of which the remaining amount accrued and was to be paid when the property cash flow allowed for the repayment. This investment was repaid in full on June 6, 2016. In conjunction with the payoff, the Company received an exit fee of $230,000, which is included in interest income in the Company's consolidated statement of operations.

Loan held for investment:    

On March 15, 2011, the Company purchased, at a discount, two non-performing promissory notes (the "Oberlin Note” and the "Heatherwood Note”) and two performing promissory notes (the "Peterson Note” and the "Trail Ridge Note”), collectively referred to as the “Notes”, each of which was secured by a first priority mortgage on multifamily rental apartment communities. The contract purchase price for the Notes was a total of $3.1 million, excluding closing costs. The Oberlin, Peterson and Heatherwood Notes were resolved in prior years.

The following table presents the aging of the Company’s loan held for investment, net (in thousands):

	June 30, 2016		December 31, 2015
Current	$	764	$	757
Delinquent:
30−89 days	—		—
90−180 days	—		—
Greater than 180 days	—		—
	$	764	$	757

The following table presents information about the credit quality of the Company’s loan held for investment, net (in thousands):

	June 30, 2016		December 31, 2015
Performing	$	764	$	757
Nonperforming	—		—
Total	$	764	$	757

The following table presents details of the balance and terms of the Company's loan held for investment, at June 30, 2016 and December 31, 2015 (in thousands):

	Unpaid Principal Balance		Unamortized Discount			Deferred expenses, net		Net book value		Maturity Date	Interest Rate	Average monthly payment
Loan- Trail Ridge
June 30, 2016:	$	969	$	(212	)	$	7	$	764	10/28/2021	7.5%	$	8
December 31, 2015:	$	981	$	(231	)	$	7	$	757

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DISPOSITION OF PROPERTIES AND DECONSOLIDATION OF INTERESTS

6 Months Ended

Jun. 30, 2016

Discontinued Operations and Disposal Groups [Abstract]

DISPOSITION OF PROPERTIES AND DECONSOLIDATION OF INTERESTS

NOTE 6 - DISPOSITION OF PROPERTIES AND DECONSOLIDATION OF INTERESTS

The following table presents details of the Company's disposition and deconsolidation activity during the three and six months ended June 30, 2016 and 2015 (in thousands):

					Gain on Sale
Multifamily Community	Location	Sale Date	Contract Sales Price		Three months ended June 30, 2016			Six months ended June 30, 2016
2016 Dispositions:
Conifer Place (1)	Norcross, Georgia	January 27, 2016	$	42,500	$	—		$	9,897
Champion Farms (2)	Louisville, Kentucky	January 29, 2016	7,590		—			1,066
The Ivy at Clear Creek	Houston, Texas	February 17, 2016	19,400		—			6,792
Affinity at Winter Park	Winter Park, Florida	June 9, 2016	17,500		5,605			5,605
Fieldstone (3)	Woodland, Ohio	June 30, 2016	7,514		4,096			4,096
					$	9,701		$	27,456
2015 Dispositions:					Three months ended June 30, 2015			Six months ended June 30, 2015
The Alcove Apartments	Houston, Texas	January 26, 2015	$	11,050	$	(1	)	$	3,784
107th Avenue Apartments	Omaha, Nebraska	January 29, 2015	250		—			50
The Redford Apartments	Houston, Texas	February 27, 2015	32,959		(9		)	15,303
Cityside Apartments	Houston, Texas	March 2, 2015	24,500		—			10,028
One Hundred Chevy Chase	Lexington, Kentucky	June 30, 2015	13,500		4,386			4,386
					$	4,376		$	33,551

(1)    On January 27, 2016, the Company and its joint venture partner sold the Conifer Place Apartments, which resulted in the deconsolidation of the entity as of January 27, 2016. Gain on sale includes $6.2 million attributable to noncontrolling interests.

(2)    On January 29, 2016, the Company sold its joint venture interest in Champion Farms to its joint venture partner. As such, the Company deconsolidated the entity as of January 29, 2016. The Company has no continuing involvement with this joint venture.

(3)    On June 30, 2016, the Company sold its joint venture interest in Fieldstone to its joint venture partner. As such, the Company deconsolidated the entity as of June 30, 2016. The Company has no continuing involvement with this joint venture.

The following table presents the Company's revenues and net income (loss) attributable to properties sold, which includes gain on sale, for the three and six months ended June 30, 2016 and 2015 (in thousands):

	Revenues Attributable to Properties Sold					Net Income (Loss) Attributable to Properties Sold
Multifamily Community	Three months ended June 30, 2016			Six months ended June 30, 2016		Three months ended June 30, 2016			Six months ended June 30, 2016
2016 Dispositions:
Conifer Place(1)	$	—		$	365	$	—		$	9,942
Champion Farms	—			220		—			1,125
The Ivy at Clear Creek	—			386		(1		)	6,627
Affinity at Winter Park	463			1,008		5,742			5,748
Fieldstone	789			1,548		4,243			4,325
	$	1,252		$	3,527	$	9,984		$	27,767
2015 Dispositions:	Three months ended June 30, 2015			Six months ended June 30, 2015		Three months ended June 30, 2015			Six months ended June 30, 2015
The Alcove Apartments	$	1		$	199	$	4		$	3,810
107th Avenue Apartments	—			3		—			50
The Redford Apartments	(40		)	1,274		(67		)	15,670
Cityside Apartments	7			701		—			10,310
One Hundred Chevy Chase	443			832		4,329			4,108
	$	411		$	3,009	$	4,266		$	33,948

(1)    On January 27, 2016, the Company and its joint venture partner sold the Conifer Place Apartments, which resulted in the deconsolidation of the entity as of January 27, 2016. Net income attributable to properties sold presented in table includes $6.3 million attributable to noncontrolling interests.

The following table presents a rollforward of the Company's activity in goodwill for the six months ended June 30, 2016 (in thousands):

Balance, January 1, 2016	$	1,231
Sale of Conifer, Champion, and Fieldstone	(520		)
Balance, June 30, 2016	$	711

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IDENTIFIED INTANGIBLE ASSETS, NET

6 Months Ended

Jun. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

IDENTIFIED INTANGIBLE ASSETS, NET

NOTE 7 - IDENTIFIED INTANGIBLE ASSETS, NET

Identified intangible assets, net, consist of apartment unit rental and antennae leases. As of June 30, 2016, all identified intangible assets related to apartment unit rental leases have been fully amortized. The net carrying value of the acquired in-place leases totaled $154,000 and $374,000 as of June 30, 2016 and December 31, 2015, respectively, net of accumulated amortization of $25.1 million and $28.4 million, respectively.  The weighted-average remaining life of the acquired apartment unit rental leases was zero months and one month as of June 30, 2016 and December 31, 2015, respectively.  Expected amortization for the antennae leases at the Vista Apartment Homes is $16,000 annually through 2025.  Amortization of the apartment unit rental and antennae leases for the three and six months ended June 30, 2016 was $4,000 and $220,000, respectively. Amortization of the apartment unit rental and antennae leases for the three and six months ended June 30, 2015 was $1.5 million and $3.0 million, respectively.

The following table presents the Company's expected amortization for the antennae leases for the next five 12-month periods ending June 30, and thereafter (in thousands): 

2017	$	16
2018	16
2019	16
2020	16
2021	16
Thereafter	74
	$	154

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MORTGAGE NOTES PAYABLE, NET

6 Months Ended

Jun. 30, 2016

Debt Disclosure [Abstract]

MORTGAGE NOTES PAYABLE, NET

NOTE 8 - MORTGAGE NOTES PAYABLE, NET

The following table presents a summary of the Company's mortgage notes payable, net (in thousands):

	June 30, 2016										December 31, 2015
Collateral	Outstanding Borrowings		Premium (Discount)			Deferred finance costs, net			Carrying Value		Outstanding Borrowings		Premium (Discount)			Deferred finance costs, net			Carrying Value
Vista Apartment Homes	$	15,398	$	—		$	(197	)	$	15,201	$	15,573	$	—		$	(216	)	$	15,357
Cannery Lofts	8,065		—			(116		)	7,949		8,148		—			(131		)	8,017
Deerfield	10,439		—			(142		)	10,297		10,517		—			(159		)	10,358
Ivy at Clear Creek	—		—			—			—		8,431		—			(136		)	8,295
Trailpoint at the Woodlands	18,852		—			(240		)	18,612		19,013		—			(257		)	18,756
Verona Apartment Homes	22,176		—			(148		)	22,028		22,402		—			(179		)	22,223
Skyview Apartment Homes	17,907		—			(123		)	17,784		18,089		—			(148		)	17,941
The Nesbit Palisades	20,298		—			(290		)	20,008		20,298		—			(309		)	19,989
Maxwell Townhomes	13,728		—			(152		)	13,576		13,850		—			(167		)	13,683
Fieldstone	—		—			—			—		15,332		—			(37		)	15,295
Pinehurst	4,040		—			—			4,040		4,111		—			—			4,111
Pheasant Run	6,250		71			(15		)	6,306		6,250		100			(20		)	6,330
Retreat of Shawnee	12,993		124			(33		)	13,084		13,090		164			(44		)	13,210
Conifer Place	—		—			—			—		27,074		—			—			27,074
Evergreen at Coursey Place	27,330		112			(107		)	27,335		27,548		123			(120		)	27,551
Pines of York	15,134		(331		)	(63		)	14,740		15,267		(363		)	(69		)	14,835
The Estates at Johns Creek	50,000		—			(465		)	49,535		50,000		—			(526		)	49,474
Chisholm Place	11,587		—			(153		)	11,434		11,587		—			(163		)	11,424
Perimeter Circle	17,478		—			(172		)	17,306		17,657		—			(202		)	17,455
Perimeter 5550	13,795		—			(143		)	13,652		13,935		—			(167		)	13,768
Aston at Cinco Ranch	23,572		—			(299		)	23,273		23,772		—			(328		)	23,444
Sunset Ridge 1	19,913		295			(234		)	19,974		20,121		329			(261		)	20,189
Sunset Ridge 2	2,975		40			(30		)	2,985		3,002		45			(34		)	3,013
Calloway at Las Colinas	35,414		—			(339		)	35,075		35,740		—			(372		)	35,368
South Lamar Village	12,560		—			(158		)	12,402		12,682		—			(184		)	12,498
Heritage Pointe	26,280		—			(348		)	25,932		26,280		—			(370		)	25,910
Yorba Linda	67,500		—			(761		)	66,739		67,500		—			(860		)	66,640
Villages at Bonita Glen	27,089		2,121			(364		)	28,846		27,265		2,276			(391		)	29,150
Stone Ridge	5,288		—			(142		)	5,146		5,350		—			(153		)	5,197
The Westside Apartments	23,000		—			(273		)	22,727		23,000		—			(351		)	22,649
Tech Center Square	12,500		—			(213		)	12,287		12,500		—			(159		)	12,341
	$	541,561	$	2,432		$	(5,720	)	$	538,273	$	595,384	$	2,674		$	(6,513	)	$	591,545

The following table presents additional information about the Company's mortgage notes payable, net (in thousands, except percentages):

Collateral	Maturity Date	Annual Interest Rate		Average Monthly Debt Service	Average Monthly Escrow
Vista Apartment Homes	1/1/2022	2.76%	(1)(5)	$65	$16
Cannery Lofts	9/1/2020	3.77%	(1)(5)	40	26
Deerfield	11/1/2020	4.66%	(2)(5)	54	29
Trailpoint at the Woodlands	11/1/2023	2.88%	(1)(4)	69	67
Verona Apartment Homes	1/1/2019	3.60%	(2)(5)	106	41
Skyview Apartment Homes	1/1/2019	3.60%	(2)(5)	85	21
The Nesbit Palisades	7/1/2024	2.42%	(1)(3)	59	54
Maxwell Townhomes	1/1/2022	4.32%	(2)(5)	71	63
Pinehurst	1/1/2017	2.97%	(1)(6)	23	12
Pheasant Run	10/1/2017	5.95%	(2)(3)	31	15
Retreat of Shawnee	2/1/2018	5.58%	(2)(5)	78	28
Evergreen at Coursey Place	8/1/2021	5.07%	(2)(5)	154	48
Pines of York	12/1/2021	4.46%	(2)(5)	80	37
The Estates at Johns Creek	7/1/2020	3.38%	(2)(3)	220	102
Chisholm Place	6/1/2024	2.86%	(1)(3)	39	38
Perimeter Circle	7/1/2019	3.42%	(2)(5)	81	53
Perimeter 5550	7/1/2019	3.42%	(2)(5)	64	41
Aston at Cinco Ranch	10/1/2021	4.34%	(2)(5)	120	63
Sunset Ridge 1	11/1/2020	4.58%	(2)(5)	113	91
Sunset Ridge 2	11/1/2020	4.54%	(2)(5)	16	—
Calloway at Las Colinas	12/1/2021	3.87%	(2)(5)	171	113
South Lamar Village	8/1/2019	3.64%	(2)(5)	59	46
Heritage Pointe	4/1/2025	2.35%	(1)(3)	89	44
Yorba Linda	6/1/2020	2.22%	(1)(3)	158	—
Villages at Bonita Glen	10/1/2023	5.33%	(2)(5)	152	38
Stone Ridge	12/1/2022	2.33%	(1)(5)	21	17
The Westside Apartments	12/27/2017	2.42%	(1)(3)	61	—
Tech Center Square	6/1/2023	3.05%	(1)(5)	53	25

(1) Variable rate based on one-month LIBOR of 0.4651% (as of June 30, 2016) plus a fixed margin.

(2) Fixed rate.

(3) Monthly interest-only payment currently required.

(4) Monthly fixed principal plus interest payment required.

(5) Fixed monthly principal and interest payment required.

(6) On January 1, 2016, this loan automatically extended for one year at a variable rate based on one-month LIBOR plus a fixed margin.

Loans assumed as part of the Villages at Bonita Glen, South Lamar Village, Paladin (Fieldstone, Pinehurst, Pheasant Run, Retreat of Shawnee, Conifer Place, Evergreen at Coursey Place, Pines of York), Sunset Ridge and Maxwell acquisitions were recorded at their fair values. The premium or discount is amortized over the remaining term of the loans and included in interest expense. For the three months ended June 30, 2016 and 2015, interest expense was reduced by $122,000 and $184,000, respectively, for the amortization of the premium or discount. For the six months ended June 30, 2016 and 2015, interest expense was reduced by $242,000 and $374,000, respectively, for the amortization of the premium or discount.    

All mortgage notes are collateralized by a first mortgage lien on the assets of the respective property as named in the table above. The amount outstanding on the mortgages may be prepaid in full during the entire term with a prepayment penalty on the majority of mortgages held.

As of June 30, 2016 and December 31, 2015, the Company had $6.4 million and $10.0 million of restricted cash related to escrow deposits held by mortgage lenders for real estate taxes, insurance and capital reserves.

The following table presents the Company's annual principal payments on the mortgage notes payable, excluding the amortization of the premium or discount, for each of the next five 12-month periods ending June 30, and thereafter (in thousands):

2017	$	11,469
2018	49,794
2019	46,963
2020	114,707
2021	89,006
Thereafter	229,622
	$	541,561

The following table presents the Company's annual amortization of the premium or discount for each of the next five 12-month periods ending June 30, and thereafter (in thousands):

2017	$	482
2018	401
2019	336
2020	331
2021	276
Thereafter	606
	$	2,432

The mortgage notes payable are recourse only with respect to the properties that secure the notes, subject to certain limited standard exceptions, as defined in each mortgage note. The Company has guaranteed the mortgage notes by executing a guarantee with respect to the properties.  These exceptions are referred to as “carveouts.”  In general, carveouts relate to damages suffered by the lender for a borrower’s failure to pay rents, insurance or condemnation proceeds to lender, failure to pay water, sewer and other public assessments or charges, failure to pay environmental compliance costs or to deliver books and records, in each case as required in the loan documents.  The exceptions also require the Company to guarantee payment of audit costs, lender’s enforcement of its rights under the loan documents and payment of the loan if the borrower voluntarily files for bankruptcy or seeks reorganization, or if a related party of the borrower does so with respect to the subsidiary. The Company has also guaranteed the completion and payment of costs of completion of no less than $7.0 million for renovations to The Estates at Johns Creek by July 1, 2018, of which $6.9 million were completed at June 30, 2016.

The mortgage obtained in connection with the acquisition of Yorba Linda in June 2015 includes a $7.5 million earn-out holdback which may be borrowed when certain debt service coverage and loan to value criteria are met. The Yorba Linda mortgage loan includes a net worth and liquidity covenant. The Company was in compliance with all covenants related to this loan at June 30, 2016. The loan also includes an additional debt service coverage covenant that is only required to be met as of December 31, 2017 and periods thereafter.

On December 20, 2013, the Company, through a wholly-owned subsidiary, entered into a loan ("Tech Center Loan") with PNC Bank, National Association.  The Company provided a repayment guarantee of all interest and scheduled monthly principal payments (excluding the final payment at maturity for the outstanding balance). In March 2016, the Company amended the loan, removing any additional borrowing capacity and requiring monthly principal repayments beginning April 1, 2016. The interest rate on the loan was also increased from one-month LIBOR plus 2.0% to one-month LIBOR plus 2.25%. On May 3, 2016, the existing loan was repaid in full and was refinanced with a different lender.

On December 27, 2013, the Company, through a wholly-owned subsidiary, entered into a loan ("Westside Loan") with U.S. Bank National Association for $29.7 million.  The Company may draw the remaining $6.7 million when certain debt service coverage and loan to value criteria are met. Amounts repaid on the loan may not be reborrowed. The Company provided a $6.5 million repayment guarantee. The Westside Loan includes a net worth, liquidity, leverage and debt service coverage covenants. The Company was in compliance with all covenants related to this loan at June 30, 2016.

Deferred financing costs incurred to obtain financing are amortized over the term of the related debt.  During the three months ended June 30, 2016 and June 30, 2015, $513,000 and $361,000, respectively, of amortization of deferred financing costs was included in interest expense. During the six months ended June 30, 2016 and June 30, 2015, $1,012,000 and $719,000, respectively, of amortization of deferred financing costs was included in interest expense. Accumulated amortization as of June 30, 2016 and December 31, 2015 was $2.7 million and $2.4 million, respectively.  Estimated amortization of the existing deferred financing costs for the next five 12-month periods ending June 30, and thereafter, is as follows (in thousands):

2017	$	1,402
2018	1,271
2019	1,089
2020	850
2021	469
Thereafter	639
	$	5,720

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CREDIT FACILITY

6 Months Ended

Jun. 30, 2016

Line of Credit Facility [Abstract]

CREDIT FACILITY

NOTE 9 - CREDIT FACILITY

The following table presents a summary of the Company's credit facility (in thousands, except percentages):

									Weighted Average Interest Rate
	Balance Outstanding at		Current Availability at		Balance Outstanding at	Maturity Date	Interest Rate Basis (1)	Current Interest Rate	Three months ended June 30,		Six Months Ended   June 30,
Lender	June 30, 2016				December 31, 2015				2016	2015	2016	2015
Bank of America	$	5,394	$	15,500	21,894	5/23/2017	LIBOR plus 3%	3.47%	3.40%	3.19%	3.43%	3.21%

(1) Variable rate based on one-month LIBOR of 0.4651% (as of June 30, 2016).

Draws under the secured revolving credit facility (the “Bank of America Credit Facility”) with Bank of America, N.A. (“Bank of America”) are secured by certain of the Company's properties with an aggregate value of $42.0 million as of June 30, 2016 and are guaranteed by the Company.  Weighted average borrowings for the three months ended June 30, 2016 and 2015 were $11.6 million and $9.2 million, respectively. Weighted average borrowings for the six months ended June 30, 2016 and 2015 were $13.3 million and $6.4 million, respectively.

      The Bank of America Credit Facility, as amended, matures on May 23, 2017, and may be extended to May 23, 2019 subject to satisfaction of certain conditions and payment of an extension fee equal to 0.25% of the amount committed under the Bank of America Credit Facility.  The Company is required to make monthly interest-only payments.  The Company also may prepay the Bank of America Credit Facility in whole or in part at any time without premium or penalty.

The operating partnership's obligations with respect to the Bank of America Credit Facility are guaranteed by the Company, pursuant to the terms of a guaranty dated as of December 2, 2011, or the Guaranty.  The Bank of America Credit Facility and the Guaranty contain restrictive covenants for maintaining a certain tangible net worth and a certain level of liquid assets, and for restricting the securing of additional debt as follows:

• the Company must maintain a minimum tangible net worth equal to the lesser of (i) 200% of the outstanding principal amount of the Bank of America Credit Facility and (ii) $20.0 million;

• the Company must also maintain unencumbered liquid assets with a market value of not less than the greater of (i) $5.0 million or (ii) 20% of the outstanding principal amount of the Bank of America Credit Facility; and

• the Company may not incur any additional secured or unsecured debt without Bank of America's prior written consent and approval, which consent and approval is not to be unreasonably withheld.

In addition to the covenants above, after 36 months from the date of an initial advance on any property, the property must satisfy debt service coverage requirements. This covenant will go into effect during the three months ended December 31, 2016.

The Company was in compliance with all loan covenants at June 30, 2016.

The Company has $169,000 and $389,000 of deferred finance costs included in prepaid expenses and other assets on the consolidated balance sheets related to the Bank of America Credit Facility as of June 30, 2016 and December 31, 2015, respectively, which is being amortized over the term of the debt. During the three months ended June 30, 2016 and 2015, $150,000 and $131,000, respectively, of amortization of deferred finance costs was included in interest expense related to this facility. During the six months ended June 30, 2016 and 2015, $220,000 and $187,000, respectively, of amortization of deferred finance costs was included in interest expense related to this facility. Estimated amortization of the existing deferred financing costs is $169,000 for the 12-month period ending June 30,2017 and none thereafter.

Principal payments required by the credit facility for the 12-month period ending June 30,2017 are approximately $5.4 million and none thereafter.

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ACCUMULATED OTHER COMPREHENSIVE LOSS

6 Months Ended

Jun. 30, 2016

Equity [Abstract]

ACCUMULATED OTHER COMPREHENSIVE LOSS

NOTE 10 - ACCUMULATED OTHER COMPREHENSIVE LOSS

The following table presents the changes in each component of the Company's accumulated other comprehensive loss for the six months ended June 30, 2016 (in thousands):

	Net unrealized loss on derivatives
January 1, 2016	$	(440	)
Reclassification adjustment for realized loss on designated derivative	72
Unrealized loss on designated derivatives	(23		)
June 30, 2016	$	(391	)

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

6 Months Ended

Jun. 30, 2016

Related Party Transactions [Abstract]

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

NOTE 11 - CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

In the ordinary course of its business operations, the Company has ongoing relationships with several related parties. 

Relationship with RAI

On May 22, 2016, RAI agreed to be acquired by C-III Capital Partners LLC ("C-III"), a leading commercial real estate services company engaged in a broad range of activities. The proposed merger is expected to close late in the third quarter of 2016 and is subject to approval by the stockholders of RAI, regulatory approvals and other customary closing conditions. Upon closing of the transaction, C-III will control our Advisor and will control all of the shares currently held by RAI.

Self-insurance funds held in escrow. Substantially all of the receivables from related parties represents escrow funds held by RAI for self insurance. The Company's properties participate in insurance pools with other properties directly and indirectly managed by RAI for both property insurance and general liability. RAI holds the escrow funds related to the insurance pools on its books. The pool for the property insurance covers losses up to $2.5 million and the pool for the general liability covers losses up to the first $50,000 per incident. Catastrophic insurance would cover property losses in excess of the insurance pool up to $140.0 million. Therefore, unforeseen or catastrophic losses in excess of the Company's insured limits could have a material adverse effect on the Company's financial condition and operating results. In the three and six months ended June 30, 2016, the Company paid $1.7 million into the insurance pools.

Internal audit. RAI performs internal audit services for the Company.

Relationship with the Advisor

In September 2009, the Company entered into an advisory agreement (the “Advisory Agreement”) pursuant to which the Advisor provides the Company with investment management, administrative and related services.  The Advisory Agreement was amended in January 2010 and further amended in January 2011 and March 2015.  The Advisory Agreement has a one-year term and renews for an unlimited number of successive one-year terms upon the approval of the conflicts committee of the Company's board of directors.  The Company renewed the Advisory Agreement for another year on September 15, 2015. Under the Advisory Agreement, the Advisor receives fees and is reimbursed for its expenses as set forth below:

Acquisition fees. The Company pays the Advisor an acquisition fee of 2.0% of the cost of investments acquired on behalf of the Company, plus any capital expenditure reserves allocated, or the amount funded by the Company to acquire loans, including acquisition expenses and any debt attributable to such investments. 

Asset management fees. The Company pays the Advisor a monthly asset management fee equal to one-twelfth of 1.0% of the higher of the cost or the independently appraised value of each asset, without deduction for depreciation, bad debts or other non-cash reserves.  The asset management fee is based only on the portion of the costs or value attributable to the Company’s investment in an asset if the Company does not own all or a majority of an asset and does not manage or control the asset.  

Disposition fees. The Advisor earns a disposition fee in connection with the sale of a property equal to the lesser of one-half of the aggregate brokerage commission paid, or if none is paid, 2.75% of the contract sales price.

Debt financing fees. The Advisor earns a debt financing fee equal to 0.5% of the amount available under any debt financing obtained for which it provided substantial services.

Expense reimbursements and overhead allocation. The Company also pays directly or reimburses the Advisor for all of the expenses paid or incurred by the Advisor or its affiliates on behalf of the Company or in connection with the services provided to the Company in relation to its public offering, including its ongoing distribution reinvestment plan offering.  

Reimbursements also include expenses the Advisor incurs in connection with providing services to the Company, including the Company’s allocable share of costs for Advisor personnel and overhead, out of pocket expenses incurred in connection with the selection and acquisition of properties or other real estate related debt investments, whether or not the Company ultimately acquires the investment.  However, the Company will not reimburse the Advisor or its affiliates for employee costs in connection with services for which the Advisor earns acquisition or disposition fees.

Relationship with Resource Real Estate Opportunity Manager

The Manager manages the Company's real estate properties and real estate-related debt investments and coordinates the leasing of, and manages construction activities related to, some of the Company’s real estate properties pursuant to the terms of the management agreement with the Manager.

Property management fees. The Manager earns 4.5% of the gross receipts from the Company's properties, provided that for properties that are less than 75% occupied, the manager receives a minimum fee for the first 12 months of ownership for performing certain property management and leasing activities. 

Construction management fees. The Manager earns a construction management fee of 5.0% of actual aggregate costs to construct improvements, or to repair, rehab or reconstruct a property.

Debt servicing fees. The Manager earns a debt servicing fee of 2.75% on payments received from loans held by the Company for investment.  

Information technology fees and operating expense reimbursement. During the ordinary course of business, the Manager or other affiliates of RAI may pay certain shared operating expenses on behalf of the Company. 

Relationship with Other Related Parties

The Company has also made payment for legal services to the law firm of Ledgewood P.C. (“Ledgewood”).  Until 1996, the Chairman of RAI was of counsel to Ledgewood.  In connection with the termination of his affiliation with Ledgewood and its redemption of his interest, the Chairman continues to receive certain payments from Ledgewood.  Until March 2006, a current executive of RAI was the managing member of Ledgewood.  This executive remained of counsel to Ledgewood through June 2007, at which time he became an Executive Vice President of RAI.

The Company utilizes the services of a printing company, Graphic Images, LLC (“Graphic Images”), whose principal owner is the father of RAI’s Chief Financial Officer.  

The following table presents the Company's amounts payable to/receivable from related parties (in thousands):

	June 30, 2016		December 31, 2015
Due from related parties:
RAI and affiliates	$	2,004	$	1,421
Due to related parties:
Advisor:
Operating expense reimbursements	$	—	$	286
Resource Real Estate Opportunity Manager, LLC:
Property management fees	882		440
Other reimbursements	581		459
Other	14		—
	$	1,477	$	1,185

The following table presents the Company's fees earned/expenses paid to related parties (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
Fees earned / expenses paid to related parties:
Advisor:
Acquisition fees (1)	$	—	$	3,687	$	8	$	5,169
Asset management fees (2)	$	2,674	$	2,461	$	5,381	$	4,709
Disposition fees (3)	$	220	$	270	$	413	$	1,031
Debt financing fees (4)	$	—	$	474	$	—	$	670
Overhead allocation (5)	$	1,130	$	934	$	2,405	$	1,822
Internal audit (5)	$	—	$	7	$	—	$	14
Resource Real Estate Opportunity Manager LLC:
Property management fees (2)	$	1,315	$	1,131	$	2,605	$	2,238
Construction management fees (6)	$	250	$	483	$	492	$	839
Information technology fees (5)	$	107	$	83	$	216	$	166
Operating expense reimbursements (7)	$	62	$	76	$	130	$	143
Debt servicing fees (2)	$	10	$	20	$	14	$	25
Other:
Ledgewood (5)	$	20	$	83	$	30	$	144
Graphic Images (5)	$	60	$	19	$	60	$	22

(1) Included in Acquisition costs on the consolidated statements of operations and comprehensive loss.

(2) Included in Management fees on the consolidated statements of operations and comprehensive loss.

(3) Included in Net gains on dispositions of properties and joint venture interests on the consolidated statements of operations and comprehensive loss.

(4) Included in Mortgage notes payable, net, on the consolidated balance sheets.

(5) Included in General and administrative costs on the consolidated statements of operations and comprehensive loss.

(6) Included in Rental properties, net, on the consolidated balance sheets.

(7) Included in Rental operating expenses on the consolidated statements of operations and comprehensive loss.

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EQUITY

6 Months Ended

Jun. 30, 2016

Equity [Abstract]

EQUITY

NOTE 12 - EQUITY

Preferred Stock

The Company’s charter authorizes the Company to issue 10.0 million shares of its $0.01 par value preferred stock.  As of June 30, 2016 and December 31, 2015, no shares of preferred stock were issued and outstanding.

Common Stock

As of June 30, 2016, the Company had issued shares of its $0.01 par value common stock as follows (dollars in thousands):

	Shares Issued		Gross Proceeds
Shares issued through private offering	1,263,727		$	12,582
Shares issued through primary public offering (1)	62,485,461		622,077
Shares issued through stock distributions	2,132,266		—
Shares issued through distribution reinvestment plan	7,777,113		77,300
Shares issued in conjunction with the Advisor's initial investment, net of 4,500 share conversion	15,500		155
Total	73,674,067		$	712,114
Shares redeemed	(2,178,618	)
Total shares outstanding as of June 30, 2016	71,495,449

(1)    Includes 276,056 shares issued to the Advisor.

Convertible Stock

As of June 30, 2016 and December 31, 2015, the Company had 50,000 shares of $0.01 par value convertible stock outstanding of which the Advisor and affiliated persons own 49,063 shares and outside investors own 937 shares.  The convertible stock will convert into shares of the Company’s common stock upon the occurrence of (a) the Company having paid distributions to common stockholders that in the aggregate equal 100% of the price at which the Company originally sold the shares plus an amount sufficient to produce a 10% cumulative, non-compounded annual return on the shares at that price; or (b) if the Company lists its common stock on a national securities exchange and, on the 31st trading day after listing, the Company’s value based on the average trading price of its common stock since the listing, plus prior distributions, combine to meet the same 10% return threshold.

Each of these two events is a “Triggering Event.”  Upon a Triggering Event, the Company's convertible stock will, unless its advisory agreement has been terminated or not renewed on account of a material breach by its Advisor, generally be converted into a number of shares of common stock equal to 1/50,000 of the quotient of:

(A) the lesser of

(i) 25% of the amount, if any, by which

(1) the value of the Company as of the date of the event triggering the conversion plus the total distributions paid to its stockholders through such date on the then-outstanding shares of its common stock exceeds

(2) the sum of the aggregate issue price of those outstanding shares plus a 10% cumulative, non-compounded, annual return on the issue price of those outstanding shares as of the date of the event triggering the conversion, or

(ii) 15% of the amount, if any, by which

(1) the value of the Company as of the date of the event triggering the conversion plus the total distributions paid to its stockholders through such date on the then-outstanding shares of its common stock exceeds

(2) the sum of the aggregate issue price of those outstanding shares plus a 6% cumulative, non-compounded, annual return on the issue price of those outstanding shares as of the date of the event triggering the conversion, divided by

(B) the value of the Company divided by the number of outstanding shares of common stock, in each case, as of the date of the event triggering the conversion.      

Redemption of Securities

During the three and six months ended June 30, 2016, the Company redeemed 1,116,740 and 1,462,083 of its common shares, respectively. The Company will not redeem in excess of 5% of the weighted-average number of shares outstanding during the 12-month period immediately prior to the effective date of redemption. The Company's board of directors will determine at least quarterly whether it has sufficient excess cash to repurchase shares. Generally, the cash available for redemptions will be limited to proceeds from the Company's distribution reinvestment plan plus, if the Company has positive operating cash flow from the previous fiscal year, 1% of all operating cash flow from the previous year. All redemption requests tendered were honored during the three and six months ended June 30, 2016.

The Company's Board of Directors, in its sole discretion, may suspend, terminate or amend the Company's share redemption program without stockholder approval upon 30 days' notice if it determines that such suspension, termination or amendment is in the Company's best interest. The Company's board may also reduce the number of shares purchased under the share redemption program if it determines the funds otherwise available to fund the Company's share redemption program are needed for other purposes. These limitations apply to all redemptions, including redemptions sought upon a stockholder's death, qualifying disability or confinement to a long-term care facility.

Distributions

For the six months ended June 30, 2016, the Company paid aggregate distributions of $21.5 million, including $7.1 million of distributions paid in cash and $14.4 million of distributions reinvested in shares of common stock through the Company's distribution reinvestment plan, as follows (in thousands):

Record Date	Per Common Share	Distribution Date	Distributions Invested in Shares of Common Stock		Aggregate Cash Distribution		Total Aggregate Distribution
January 28, 2016	$0.05	January 29, 2016	$	2,423	$	1,151	$	3,574
February 26, 2016	0.05	February 29, 2016	2,418		1,167		3,585
March 30, 2016	0.05	March 31, 2016	2,415		1,172		3,587
April 28, 2016	0.05	April 29, 2016	2,414		1,181		3,595
May 27, 2016	0.05	June 3, 2016	2,380		1,226		3,606
June 29, 2016	0.05	June 30, 2016	2,357		1,208		3,565
	$0.30		$	14,407	$	7,105	$	21,512

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FAIR VALUE MEASURES AND DISCLOSURES

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

FAIR VALUE MEASURES AND DISCLOSURES

NOTE 13 - FAIR VALUE MEASURES AND DISCLOSURES

In analyzing the fair value of its investments accounted for on a fair value basis, the Company follows the fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.  The Company determines fair value based on quoted prices when available or, if quoted prices are not available, through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the investment. The fair value of cash, tenant receivables and accounts payable, approximate their carrying value due to their short nature.  The hierarchy followed defines three levels of inputs that may be used to measure fair value:

Level 1 - Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date. 

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability.

Level 3 - Unobservable inputs that reflect the entity’s own assumptions about the assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques.

The determination of where an asset or liability falls in the hierarchy requires significant judgment.  The Company evaluates its hierarchy disclosures each quarter; depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter.  However, the Company expects that changes in classifications between levels will be rare.

Rental properties obtained through a foreclosed note are measured at fair value on a non-recurring basis.  The fair value of rental properties is usually estimated based on information obtained from a number of sources, including information obtained about each property as a result of pre-acquisition due diligence, marketing and leasing activities.  The Company allocates the purchase price of properties to acquired tangible assets, consisting of land, buildings, fixtures and improvements, and identified intangible lease assets and liabilities, consisting of the value of above-market and below-market leases, as applicable, the value of in-place leases and the value of tenant relationships, based in each case on their fair values.

Derivatives (interest rate caps) which are reported at fair value in the consolidated balance sheets in prepaid expenses and other assets are valued by a third-party pricing agent using an income approach with models that use, as their primary inputs, readily observable market parameters. This valuation process considers factors including interest rate yield curves, time value, credit and volatility factors (Level 2).

The following table presents information about the Company's assets measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value (in thousands):

	Level 1		Level 2		Level 3		Total
June 30, 2016
Assets:
Interest rate caps	$	—	$	5	$	—	$	5
	$	—	$	5	$	—	$	5
December 31, 2015
Assets:
Interest rate caps	$	—	$	32	$	—	$	32
	$	—	$	32	$	—	$	32

The carrying and fair values of the Company’s loans held for investment, net, preferred equity investments, mortgage note payable-outstanding borrowings, mortgage note payable -included in other liabilities associated with rental properties held for sale and credit facilities were as follows (in thousands):

	June 30, 2016						December 31, 2015
	Carrying Amount			Estimated Fair Value			Carrying Amount			Estimated Fair Value
Loan held for investment, net	$	764		$	1,151		$	757		$	1,151
Preferred equity investment	$	—		$	—		$	3,886		$	3,908
Mortgage notes payable- outstanding borrowings	$	(541,561	)	$	(535,783	)	$	(595,384	)	$	(573,693	)
Mortgage note payable- included in other liabilities associated with rental properties held for sale	$	—		$	—		$	(16,443	)	$	(16,597	)
Credit facility	$	(5,394	)	$	(5,394	)	$	(21,894	)	$	(21,894	)

The fair values of the loan held for investment, net and preferred equity investment were estimated using rates available to the Company for debt with similar terms and remaining maturities (Level 3).

The carrying amount of the mortgage notes payable presented is the outstanding borrowings excluding premium or discount and deferred finance costs, net. The fair value of the mortgage notes payable was estimated using rates available to the Company for debt with similar terms and remaining maturities (Level 3).

The fair value of the credit facility equals the carrying amounts because the variable interest rate is considered a market rate (Level 3).

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DERIVATIVES AND HEDGING ACTIVITIES

6 Months Ended

Jun. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVES AND HEDGING ACTIVITIES

NOTE 14 - DERIVATIVES AND HEDGING ACTIVITIES

Risk Management Objective of Using Derivatives

The Company is exposed to certain risk arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its debt funding and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s investments and borrowings.

As a condition to certain of the Company’s financing facilities, from time to time the Company may be required to enter into certain derivative transactions as may be required by the lender. These transactions would generally be in line with the Company’s own risk management objectives and also served to protect the lender.

Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company entered into a total of eight interest rate caps that were designated as cash flow hedges during 2013, 2014, 2015 and 2016. Interest rate caps designated as cash flow hedges involve the receipt of variable amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an up-front premium.

The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the three and six months ended June 30, 2016 and the year ended December 31, 2015, such derivatives were used to hedge the variable cash flows, indexed to USD-LIBOR, associated with existing variable-rate loan agreements. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. During the three and six months ended June 30, 2016, the Company had a loss of $72,388 due to hedge ineffectiveness related to the sale of the Ivy at Clear Creek.

Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt.

As of June 30, 2016, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk (dollars in thousands):

Interest Rate Derivative	Number of Instruments	Notional Amount		Maturity Dates
Interest Rate Caps	8	$	119,863	January 1, 2018 to May 3, 2019

Tabular Disclosure of Fair Values of Derivative Instruments on the Balance Sheet

The following table presents the fair value of the Company’s derivative financial instruments as well as their classification in prepaid expenses and other assets on the Balance Sheet as of June 30, 2016 and December 31, 2015 (in thousands):

Asset Derivatives						Liability Derivatives
June 30, 2016			December 31, 2015			June 30, 2016			December 31, 2015
Balance Sheet	Fair Value		Balance Sheet	Fair Value		Balance Sheet	Fair Value		Balance Sheet	Fair Value
Interest rate caps	$	5	Interest rate caps	$	32	—	$	—	—	$	—

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OPERATING EXPENSE LIMITATION

6 Months Ended

Jun. 30, 2016

OPERATING EXPENSE LIMITATION WAIVER [Abstract]

OPERATING EXPENSE LIMITATION

NOTE 15 - OPERATING EXPENSE LIMITATION

Under its charter, the Company must limit its total operating expenses to the lesser of 2% of its average invested assets or 25% of its net income for the four most recently completed fiscal quarters, unless the conflicts committee of the Company’s board of directors has determined that such excess expenses were justified based on unusual and non-recurring factors.  Operating expenses for the four quarters ended June 30, 2016 were in compliance with the charter imposed limitation.

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SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2016

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 16 - SUBSEQUENT EVENTS

On July 8, 2016, the Company sold the Nesbit Palisades, located in Alpharetta, Georgia, for $45.5 million. In conjunction with the sale, the Company paid off the outstanding mortgage loan secured by the property. The Company expects to record a gain on the sale during the three months ended September 30, 2016.    

On July 21, 2016, the Company's Board of Directors declared a $0.05 per share cash distribution to its common stockholders of record at the close of business on each of the following record dates: July 28, 2016, August 30, 2016 and September 29, 2016. Such distributions were or are to be paid on July 29, 2016, August 31, 2016 and September 30, 2016. .

The Company has evaluated subsequent events and determined that no events have occurred, other than those disclosed above, which would require an adjustment to or additional disclosure in the consolidated financial statements.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries as follows:

Subsidiary	Apartment Complex	Number of Units	Property Location
RRE Opportunity Holdings, LLC	N/A	N/A	N/A
Resource Real Estate Opportunity OP, LP	N/A	N/A	N/A
RRE Charlemagne Holdings, LLC	N/A	N/A	N/A

RRE Iroquois, LP (“Vista”)	Vista Apartment Homes	133	Philadelphia, PA
RRE Iroquois Holdings, LLC	N/A	N/A	N/A
RRE Cannery Holdings, LLC (“Cannery”)	Cannery Lofts	156	Dayton, OH
RRE Williamsburg Holdings, LLC (“Williamsburg”)	Williamsburg	976	Cincinnati, OH
WPL Holdings, LLC	N/A (a)	N/A	Cincinnati, OH
RRE Park Forest Holdings, LLC ("Park Forest")	Mosaic	216	Oklahoma City, OK
RRE Deerfield Holdings, LLC ("Deerfield")	Deerfield	166	Hermantown, MN
RRE Autumn Wood Holdings, LLC ("Autumn Wood")	Retreat at Rocky Ridge	206	Hoover, AL
RRE Village Square Holdings, LLC ("Village Square")	Trailpoint at the Woodlands	271	Houston, TX
RRE Brentdale Holdings, LLC ("Brentdale")	The Westside Apartments	412	Plano, TX
RRE Jefferson Point Holdings, LLC ("Jefferson Point")	Tech Center Square	208	Newport News, VA
RRE Centennial Holdings, LLC ("Centennial")	Verona Apartment Homes	276	Littleton, CO
RRE Pinnacle Holdings, LLC ("Pinnacle")	Skyview Apartment Homes	224	Westminster, CO
RRE Jasmine Holdings, LLC ("Jasmine")	The Nesbit Palisades	437	Alpharetta, GA
RRE River Oaks Holdings, LLC ("River Oaks")	Maxwell Townhomes	314	San Antonio, TX
RRE Nicollet Ridge Holdings, LLC ("Nicollet Ridge")	Meridian Pointe	339	Burnsville, MN
RRE Addison Place Holdings, LLC ("Addison Place")	The Estates at Johns Creek	403	Alpharetta, GA
PRIP Coursey, LLC ("Evergreen at Coursey Place")	Evergreen at Coursey Place (b)	352	Baton Rouge, LA
PRIP 500, LLC ("Pinehurst")	Pinehurst (b)	146	Kansas City, MO
PRIP 1102, LLC ("Pheasant Run")	Pheasant Run (b)	160	Lee's Summit, MO
PRIP 11128, LLC ("Retreat at Shawnee")	Retreat at Shawnee (b)	342	Shawnee, KS
PRIP Stone Ridge, LLC ("Stone Ridge")	N/A (b)	N/A	N/A
PRIP Pines, LLC ("Pines of York")	Pines of York (b)	248	Yorktown, VA
RRE Chisholm Place Holdings LLC ("Chisholm Place")	Chisholm Place	142	Plano, TX
RRE Berkeley Run Holdings, LLC ("Berkley Run")	Perimeter Circle	194	Atlanta, GA
RRE Berkeley Trace Holdings LLC ("Berkley Trace")	Perimeter 5550	165	Atlanta, GA
RRE Merrywood Holdings, LLC ("Merrywood")	Aston at Cinco Ranch	228	Katy, TX
RRE Sunset Ridge Holdings, LLC ("Sunset Ridge")	Sunset Ridge	324	San Antonio, TX
RRE Parkridge Place Holdings, LLC ("Parkridge Place")	Calloway at Las Colinas	536	Irving, TX
RRE Woodmoor Holdings, LLC ("Woodmoor")	South Lamar Village	208	Austin, TX
RRE Gilbert Holdings, LLC ("Springs at Gilbert")	Heritage Pointe	458	Gilbert, AZ
RRE Bonita Glen Holdings, LLC ("Bonita")	Villages at Bonita Glen	295	Chula Vista, CA
RRE Yorba Linda Holdings, LLC ("Yorba Linda")	Yorba Linda	400	Yorba Linda, CA
		8,935
Subsidiaries related to disposed investments:
RRE Crestwood Holdings, LLC (“Crestwood”)	(c)	N/A	N/A
RRE 107th Avenue Holdings, LLC (“107th Avenue”)	(c)	N/A	N/A
RRE Westhollow Holdings, LLC (“Westhollow”)	(c)	N/A	N/A
RRE Campus Club Holdings, LLC (“Campus Club”)	(c)	N/A	N/A
RRE Bristol Holdings, LLC (“Bristol”)	(c)	N/A	N/A
RRE Skyview Holdings, LLC ("Skyview")	(c)	N/A	N/A
RRE Foxwood Holdings, LLC ("Foxwood")	(c)	N/A	N/A
RRE Flagstone Holdings, LLC ("Flagstone")	(c)	N/A	N/A
RRE Kenwick Canterbury Holdings, LLC ("Kenwick & Canterbury")	(c)	N/A	N/A
RRE Armand Place Holdings, LLC ("Armand")	(d)	N/A	N/A

PRIP 5060/6310, LLC ("Governor Park")	(b)(c)	N/A	N/A
PRIP 3700, LLC ("Champion Farms")	(b)(d)	N/A	N/A
PRIP 6700, LLC ("Hilltop Village")	(b)(c)	N/A	N/A
PRIP 3383, LLC ("Conifer Place")	(b)(d)	N/A	N/A
RRE Nob Hill Holdings, LLC ("Nob Hill")	(d)	N/A	N/A
RRE Spring Hill Holdings, LLC ("Spring Hill")	(e)	N/A	N/A
PRIP 10637, LLC ("Fieldstone")	(b)(d)	N/A	N/A

N/A - Not Applicable

(a) - Subsidiary holds a portion of the Williamsburg parking lot    

(b) - Wholly-owned subsidiary of RRE Charlemagne Holdings, LLC

(c) - Underlying investment sold prior to 2016

(d) - Underlying investment sold in 2016

(e) - Underlying investment resolved in 2016

All intercompany accounts and transactions have been eliminated in consolidation.

The consolidated financial statements reflect the Company's accounts and the accounts of the Company's majority-owned and/or controlled subsidiaries. The Company follows the provisions of Accounting Standards Codification (“ASC”) Topic 810, “Consolidation,” and accordingly consolidates entities that are variable interest entities (“VIEs”) where it has determined that it is the primary beneficiary of such entities. Once it has been determined that the Company holds a variable interest in a VIE, management performs a qualitative analysis to determine (i) if the Company has the power to direct the matters that most significantly impact the VIE's financial performance; and (ii) if the Company has the obligation to absorb the losses of the VIE that could potentially be significant to the VIE or the right to receive the benefits of the VIE that could potentially be significant to the VIE. If the Company's interest possesses both of these characteristics, the Company is deemed to be the primary beneficiary and would be required to consolidate the VIE. The Company will continually assess its involvement with VIEs and re-evaluate the requirement to consolidate them. For consolidated entities (including VIEs of which the Company is the primary beneficiary), noncontrolling interests are presented and disclosed as a separate component of stockholders' equity (not as a liability or other item outside of stockholders' equity). Consolidated net income (loss) includes the noncontrolling interests’ share of income (loss). All changes in the Company’s ownership interest in a subsidiary are accounted for as stockholders' equity transactions if the Company retains its controlling financial interest in the subsidiary. The portions of these entities that the Company does not own are presented as noncontrolling interests as of the dates and for the periods presented in the consolidated financial statements. The consolidated financial statements include the accounts of the Company's majority-owned and/or controlled subsidiaries, which are VIEs, as follows:

Subsidiary	Ownership %	Apartment Complex	Number of Units	Property Location
Springhurst Housing Partners, LLC (1)	70.0%	Champion Farms	N/A	Louisville, KY
Glenwood Housing Partners I, LLC (2)	83.0%	Fieldstone	N/A	Woodlawn, OH
FPA/PRIP Conifer, LLC (3)	42.5%	Conifer Place	N/A	Norcross, GA
DT Stone Ridge, LLC	83.4%	Stone Ridge	188	Columbia, SC

(1) On January 29, 2016, the Company sold its joint venture interest in Champion Farms to its joint venture partner. As such, the Company deconsolidated the entity as of January 29, 2016. The Company has no continuing involvement with this joint venture. (See Note 6)

(2) On June 30, 2016, the Company sold its joint venture interest in Fieldstone to its joint venture partner. As such, the Company deconsolidated the entity as of June 30, 2016. The Company has no continuing involvement with this joint venture. (See Note 6)

(3) On January 27, 2016, the Company and its joint venture partner sold the Conifer Place Apartments, which resulted in the deconsolidation of the entity as of January 27, 2016. (See Note 6)

The Company's preferred equity investment was a VIE for which the Company had determined it was not the primary beneficiary; therefore, the Company did not consolidate the entity. The Company was not considered the primary beneficiary of the preferred equity investee because it did not possess the unilateral power to direct the key activities of investee that were considered most significant.

Use of Estimates

Use of Estimates

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

Assets Held for Sale

Assets Held for Sale

The Company presents the assets and liabilities of any rental properties which qualify as held for sale, separately in the consolidated balance sheets. Real estate assets held for sale are measured at the lower of carrying amount or fair value less cost to sell. Both the real estate and the corresponding liabilities are presented separately in the consolidated balance sheets. Subsequent to classification of an asset as held for sale, no further depreciation is recorded.

Rental Properties

Rental Properties

The Company records acquired rental properties at fair value on their respective acquisition date. The Company considers the period of future benefit of an asset to determine its appropriate useful life and depreciates the rental properties using the straight line method.  The Company anticipates the estimated useful lives of its assets by class as follows:

Buildings	27.5 years
Building improvements	3.0 to 27.5 years
Tenant improvements	Shorter of lease term or expected useful life

Improvements and replacements in excess of $1,000 are capitalized when they extend the useful life of the asset. Resource Real Estate Opportunity Manager, LLC (the “Manager”), an affiliate of the Advisor, earns a construction management fee of 5% of actual aggregate costs to construct improvements, or to repair, rehab or reconstruct a property. These costs are capitalized along with the related asset. Costs of repairs and maintenance are expensed as incurred.

Impairment of Long-Lived Assets

Impairment of Long Lived Assets

When circumstances indicate the carrying value of a property may not be recoverable, the Company reviews the asset for permanent impairment.  This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition.  The review also considers factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors.

An impairment loss will be recorded to the extent that the carrying value exceeds the estimated fair value of a property to be held and used.  For properties held for sale, the impairment loss would be the adjustment to fair value less the estimated cost to dispose of the asset. 

Loans Held for Investment, Net

Loans Held for Investment, Net

The Company records acquired performing loans held for investment at cost and reviews them for potential impairment at each balance sheet date.  The Company considers a loan to be impaired if one of two conditions exists.  The first condition is if, based on current information and events, management believes it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement.  The second condition is if the loan is deemed to be a troubled-debt restructuring (“TDR”) where a concession has been given to a borrower in financial difficulty.  A TDR may not have an associated specific loan loss allowance if the principal and interest amount is considered recoverable based on current market conditions, expected collateral performance and/or guarantees made by the borrowers.

The amount of impairment, if any, is measured by comparing the recorded amount of the loan to the present value of the expected cash flows or, as a practical expedient, the fair value of the collateral.  If a loan is deemed to be impaired, the Company records a reserve for loan losses through a charge to income for any shortfall.    

Interest income from performing loans held for investment is recognized based on the contractual terms of the loan agreement.  Fees related to any buy down of the interest rate are deferred as prepaid interest income and amortized over the term of the loan as an adjustment to interest income.  The initial investment made in a purchased performing loan includes the amount paid to the seller plus fees.  The initial investment frequently differs from the related loan’s principal amount at the date of the purchase.  The difference is recognized as an adjustment of the yield over the life of the loan.  Closing costs related to the purchase of a performing loan held for investment are amortized over the term of the loan and accreted as an adjustment to interest income.

The Company may acquire real estate loans at a discount due to the credit quality of such loans and the respective borrowers under such loans.  Revenues from these loans are recorded under the effective interest method.  Under this method, an effective interest rate (“EIR”) is applied to the cost basis of the real estate loan held for investment.  The EIR that is calculated when the loan held for investment is acquired remains constant and is the basis for subsequent impairment testing and income recognition.  However, if the amount and timing of future cash collections are not reasonably estimable, the Company accounts for the real estate receivable on the cost recovery method.  Under the cost recovery method of accounting, no income is recognized until the basis of the loan held for investment has been fully recovered.

Preferred Equity Investment

Preferred Equity Investment

The Company recorded its preferred equity investments at amortized cost. Investments carried at amortized cost were evaluated for impairment at each reporting date. When an investment was impaired and that impairment was considered other than temporary, the amount of the loss accrual was calculated by comparing the carrying amount of the investment to its estimated fair value. This investment was repaid in full on June 6, 2016 (See Note 5).

Dividend income was recognized when earned based on the contractual terms of the preferred equity agreement.

Allocation of Purchase Price of Acquired and Foreclosed Assets

Allocation of the Purchase Price of Acquired and Foreclosed Assets

The cost of rental properties acquired directly as fee interests and through foreclosing on a loan are allocated to net tangible and intangible assets based on their relative fair values.  The Company allocates the purchase price of properties to acquired tangible assets, consisting of land, buildings, fixtures and improvements, and to identified intangible lease assets and liabilities, consisting of the value of above-market and below-market leases, as applicable, the value of in-place leases and the value of tenant relationships. Fair value estimates are based on information obtained from a number of sources, including information obtained about each property as a result of pre-acquisition due diligence, marketing and leasing activities.  In addition, the Company may obtain independent appraisal reports. The information in the appraisal reports along with the aforementioned information available to the Company's management is used in allocating the purchase price. The independent appraisers have no involvement in management's allocation decisions other than providing market information.

In allocating the purchase price, management also includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up period.  Management also estimates costs to execute similar leases, including leasing commissions and legal and other related expenses, to the extent that such costs have not already been incurred in connection with a new lease origination as part of the transaction.

The Company records above-market and below-market in-place lease values for acquired properties based on the present value (using an interest rate that reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of the lease.  The Company amortizes any capitalized above-market or below-market lease values as an increase or reduction to rental income over the remaining non-cancelable terms of the respective leases.    

The Company measures the aggregate value of other intangible assets acquired based on the difference between (i) the property valued with existing in-place leases adjusted to market rental rates and (ii) the property valued as if it were vacant.  Management’s estimates of value are made using methods similar to those used by independent appraisers (e.g., discounted cash flow analysis).  Factors to be considered by management in its analysis include an estimate of carrying costs during hypothetical expected lease-up periods considering current market conditions and costs to execute similar leases.

The total amount of other intangible assets acquired is further allocated to customer relationship intangible values based on management’s evaluation of the specific characteristics of each tenant’s lease and the Company’s overall relationship with that respective tenant.  Characteristics to be considered by management in allocating these values include the nature and extent of the Company’s existing relationships with the tenant, the tenant’s credit quality and expectations of lease renewals (including those existing under the terms of the lease agreement), among other factors.

The Company amortizes the value of in-place leases to expense over the average remaining term of the respective leases.  The value of customer relationship intangibles are amortized to expense over the initial term and any renewal periods in the respective leases, but in no event will the amortization periods for the intangible assets exceed the remaining depreciable life of the building.  Should a tenant terminate its lease, the unamortized portion of the in-place lease value and customer relationship intangibles associated with that tenant would be charged to expense in that period.

The determination of the fair value of assets and liabilities acquired requires the use of significant assumptions with regard to current market rental rates, discount rates and other variables.  The use of inappropriate estimates would result in an incorrect assessment of the purchase price allocations, which could impact the amount of the Company’s reported net income.  Initial purchase price allocations are subject to change until all information is finalized, which is generally within one year of the acquisition date.

Goodwill

Goodwill

The Company records the excess of the cost of an acquired entity over the difference between the amounts assigned to assets acquired (including identified intangible assets) and liabilities assumed as goodwill. Goodwill is not amortized but is tested for impairment at a level of reporting referred to as a reporting unit during the fourth quarter of each calendar year, or more frequently if events or changes in circumstances indicate that the asset might be impaired.

Revenue Recognition

Revenue Recognition

The Company recognizes minimum rent, including rental abatements and contractual fixed increases attributable to operating leases, on a straight-line basis over the term of the related lease and includes amounts expected to be received in later years in deferred rents.  

The future minimum rental payments to be received from noncancelable operating leases for residential rental properties are $51.2 million and $346,000 for the 12 month periods ending June 30,2017 and 2018, respectively, and none thereafter. The future minimum rental payments to be received from noncancelable operating leases for commercial rental properties and antenna rentals are $362,000, $253,000, $169,000, $120,000, $11,000, and $0 for the 12 month periods ending June 30,2017, 2018, 2019, 2020, 2021, and thereafter, respectively.

Revenue is primarily derived from the rental of residential housing units, however, included within rental income are other income such as pet fees, parking fees, and late fees, as well as property operating expense reimbursements due from tenants for common area maintenance, real estate taxes and other recoverable costs. The Company records the ancillary charges in the period they are earned or received and records the reimbursements in the period in which the related expenses are incurred.

Tenant Receivables

Tenant Receivables

Tenant receivables are stated in the financial statements as amounts due from tenants net of an allowance for uncollectible receivables.  Payment terms vary and receivables outstanding longer than the payment terms are considered past due.  The Company determines its allowance by considering a number of factors, including the length of time receivables are past due, security deposits held, the Company’s previous loss history, the tenants’ current ability to pay their obligations to the Company, the condition of the general economy and the industry as a whole.  The Company writes off receivables when they become uncollectible. 

Income Taxes

Income Taxes

To maintain its REIT qualification for U.S. federal income tax purposes, the Company is generally required to distribute at least 90% of its taxable net income (excluding net capital gains) to its stockholders as well as comply with other requirements, including certain asset, income and stock ownership tests.  As a REIT, the Company is not subject to federal corporate income tax to the extent that it distributes 100% of its REIT taxable income each year.  If the Company fails to qualify as a REIT, and does not qualify for certain statutory relief provisions, it is subject to U.S. federal, state and local income taxes and may be precluded from qualifying as a REIT for the subsequent four taxable years following the year in which it fails its REIT qualification.  Accordingly, the Company’s failure to qualify as a REIT could have a material adverse impact on its results of operations and amounts available for distribution to its stockholders.

The dividends-paid deduction of a REIT for qualifying dividends to its stockholders is computed using the Company’s taxable income as opposed to net income reported on the financial statements.  Generally, taxable income differs from net income reported on the financial statements because the determination of taxable income is based on tax provisions and not financial accounting principles.

The Company may elect to treat certain of its subsidiaries as taxable REIT subsidiaries (“TRS”). In general, the Company’s TRSs may hold assets and engage in activities that the Company cannot hold or engage in directly and generally may engage in any real estate or non-real estate-related business.  A TRS is subject to U.S. federal, state and local corporate income taxes.  As of June 30, 2016 and December 31, 2015, the Company had no TRSs.

The Company evaluates the benefits from tax positions taken or expected to be taken in its tax return. Only the largest amount of benefits from tax positions that will more likely than not be sustainable upon examination are recognized by the Company.  The Company does not have any unrecognized tax benefits, nor interest and penalties, recorded in its consolidated financial statements and does not anticipate significant adjustments to the total amount of unrecognized tax benefits within the next 12 months.

The Company is subject to examination by the U.S. Internal Revenue Service and by the taxing authorities in other states in which the Company has significant business operations.

Earnings Per Share

Earnings Per Share

Basic earnings per share are calculated on the basis of the weighted-average number of common shares outstanding during the year. Basic earnings per share are computed by dividing income available to common stockholders by the weighted-average common shares outstanding during the period.  Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted to common stock.

Reclassifications

Reclassifications

Certain amounts in the prior year financial statements have been reclassified to conform to the current-year presentation. The Company has reclassified $428,000 and $956,000 of payroll expenses from General and Administrative to Rental Operating for the three and six months ended June 30, 2015, respectively. The impact of the reclassifications made to prior year amounts are not material and did not affect net income.

Adoption of New Accounting Standards

Adoption of New Accounting Standards

In January 2015, FASB issued ASU No. 2015-01, "Income Statement - Extraordinary and Unusual Items (Subtopic 225-20), Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items". The amendments in ASU No. 2015-01 eliminate from GAAP the concept of extraordinary items. Although the amendment will eliminate the requirements for reporting entities to consider whether an underlying event or transaction is extraordinary, the presentation and disclosure guidance for items that are unusual in nature or occur infrequently will be retained and will be expanded to include items that are both unusual in nature and infrequently occurring. ASU No. 2015-01 was effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. On January 1, 2016, the Company adopted ASU No. 2015-01 and the adoption had no impact on the Company's consolidated financial statements.

In February 2015, FASB issued ASU 2015-02, "Consolidation (Topic 810): Amendments to the Consolidation Analysis", which makes certain changes to both the variable interest model and the voting model, including changes to (1) the identification of variable interests (fees paid to a decision maker or service provider), (2) the variable interest entity characteristics for a limited partnership or similar entity and (3) the primary beneficiary determination. On January 1, 2016, the Company adopted ASU 2015-02 and the adoption did not have a significant impact on the Company's consolidated financial statements.

In April 2015, FASB issued ASU 2015-03, "Simplifying the Presentation of Debt Issuance Costs", which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected. Upon adoption, the Company applied the new guidance on a retrospective basis and adjusted the balance sheet of each individual period presented to reflect the period-specific effects of applying the new guidance. This guidance was effective and was adopted by the Company on January 1, 2016. The Company has reclassified $6.5 million of unamortized debt issuance costs at December 31, 2015 from assets to liabilities as a direct reduction of the related mortgage notes payable.

In August 2015, FASB issued ASU 2015-15, "Interest - Imputation of Interest", which clarifies that debt issuance costs associated with line of credit arrangements may continue to be accounted for as assets and not as a direct deduction from the carrying amount of the debt liabilities. This guidance was effective and was adopted by the Company on January 1, 2016. Deferred finance costs related to the Company's credit facility were reclassified to prepaid and other assets (See Note 9).     

In September 2015, FASB issued ASU 2015-16, "Simplifying the Accounting for Measurement-Period Adjustments", which eliminates the requirement to retroactively revise comparative financial information for prior periods presented in financial statements due to changes in provisional amounts recorded for acquisitions in subsequent periods. Upon adoption, disclosure of the amounts recorded in current-period earnings that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized at the acquisition date are required. ASU 2015-16 was effective and adopted by the Company on January 1, 2016 and the adoption had no impact on its consolidated financial statements.

Accounting Standards Issued But Not Yet Effective

In May 2014, FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers”, which will replace most existing revenue recognition guidance in GAAP.  The core principle of ASU No. 2014-09 is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services.  ASU No. 2014-09 requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. ASU No. 2014-09 will be effective for the Company beginning January 1, 2018, including interim periods in 2018, and allows for both retrospective and prospective methods of adoption. The Company is in the process of determining the method of adoption and assessing the impact of this guidance on the Company’s consolidated financial position, results of operations and cash flows.

In August 2014, FASB issued ASU No. 2014-15, "Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern." Under the new guidance, an entity should evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. The guidance will be effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The adoption of the new requirements is not expected to have a material impact on the Company's consolidated financial statements.

In February 2016, FASB issued ASU No. 2016-02, "Leases (Topic 842)", which requires lessees to recognize at the commencement date for all leases, with the exception of short-term leases, (a) a lease liability, which is a lessee‘s obligation to make lease payments arising from a lease, measured on a discounted basis, and (b) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU No. 2016-02 will be effective for the Company beginning January 1, 2019. The Company is evaluating this guidance; however, it does not expect the adoption of ASU No. 2016-02 to have a significant impact on its consolidated financial statements.

In June 2016, FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses”, which requires measurement and recognition of expected credit losses for financial assets held. ASU No. 2016-13 will be effective for the Company beginning January 1, 2019. The Company is evaluating this guidance; however, it does not expect the adoption of ASU No. 2016-13 to have a significant impact on its consolidated financial statements.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

6 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

Wholly Owned Subsidiaries Information

The consolidated financial statements include the accounts of the Company's majority-owned and/or controlled subsidiaries, which are VIEs, as follows:

Subsidiary	Ownership %	Apartment Complex	Number of Units	Property Location
Springhurst Housing Partners, LLC (1)	70.0%	Champion Farms	N/A	Louisville, KY
Glenwood Housing Partners I, LLC (2)	83.0%	Fieldstone	N/A	Woodlawn, OH
FPA/PRIP Conifer, LLC (3)	42.5%	Conifer Place	N/A	Norcross, GA
DT Stone Ridge, LLC	83.4%	Stone Ridge	188	Columbia, SC

(1) On January 29, 2016, the Company sold its joint venture interest in Champion Farms to its joint venture partner. As such, the Company deconsolidated the entity as of January 29, 2016. The Company has no continuing involvement with this joint venture. (See Note 6)

(2) On June 30, 2016, the Company sold its joint venture interest in Fieldstone to its joint venture partner. As such, the Company deconsolidated the entity as of June 30, 2016. The Company has no continuing involvement with this joint venture. (See Note 6)

(3) On January 27, 2016, the Company and its joint venture partner sold the Conifer Place Apartments, which resulted in the deconsolidation of the entity as of January 27, 2016. (See Note 6)

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries as follows:

Subsidiary	Apartment Complex	Number of Units	Property Location
RRE Opportunity Holdings, LLC	N/A	N/A	N/A
Resource Real Estate Opportunity OP, LP	N/A	N/A	N/A
RRE Charlemagne Holdings, LLC	N/A	N/A	N/A

RRE Iroquois, LP (“Vista”)	Vista Apartment Homes	133	Philadelphia, PA
RRE Iroquois Holdings, LLC	N/A	N/A	N/A
RRE Cannery Holdings, LLC (“Cannery”)	Cannery Lofts	156	Dayton, OH
RRE Williamsburg Holdings, LLC (“Williamsburg”)	Williamsburg	976	Cincinnati, OH
WPL Holdings, LLC	N/A (a)	N/A	Cincinnati, OH
RRE Park Forest Holdings, LLC ("Park Forest")	Mosaic	216	Oklahoma City, OK
RRE Deerfield Holdings, LLC ("Deerfield")	Deerfield	166	Hermantown, MN
RRE Autumn Wood Holdings, LLC ("Autumn Wood")	Retreat at Rocky Ridge	206	Hoover, AL
RRE Village Square Holdings, LLC ("Village Square")	Trailpoint at the Woodlands	271	Houston, TX
RRE Brentdale Holdings, LLC ("Brentdale")	The Westside Apartments	412	Plano, TX
RRE Jefferson Point Holdings, LLC ("Jefferson Point")	Tech Center Square	208	Newport News, VA
RRE Centennial Holdings, LLC ("Centennial")	Verona Apartment Homes	276	Littleton, CO
RRE Pinnacle Holdings, LLC ("Pinnacle")	Skyview Apartment Homes	224	Westminster, CO
RRE Jasmine Holdings, LLC ("Jasmine")	The Nesbit Palisades	437	Alpharetta, GA
RRE River Oaks Holdings, LLC ("River Oaks")	Maxwell Townhomes	314	San Antonio, TX
RRE Nicollet Ridge Holdings, LLC ("Nicollet Ridge")	Meridian Pointe	339	Burnsville, MN
RRE Addison Place Holdings, LLC ("Addison Place")	The Estates at Johns Creek	403	Alpharetta, GA
PRIP Coursey, LLC ("Evergreen at Coursey Place")	Evergreen at Coursey Place (b)	352	Baton Rouge, LA
PRIP 500, LLC ("Pinehurst")	Pinehurst (b)	146	Kansas City, MO
PRIP 1102, LLC ("Pheasant Run")	Pheasant Run (b)	160	Lee's Summit, MO
PRIP 11128, LLC ("Retreat at Shawnee")	Retreat at Shawnee (b)	342	Shawnee, KS
PRIP Stone Ridge, LLC ("Stone Ridge")	N/A (b)	N/A	N/A
PRIP Pines, LLC ("Pines of York")	Pines of York (b)	248	Yorktown, VA
RRE Chisholm Place Holdings LLC ("Chisholm Place")	Chisholm Place	142	Plano, TX
RRE Berkeley Run Holdings, LLC ("Berkley Run")	Perimeter Circle	194	Atlanta, GA
RRE Berkeley Trace Holdings LLC ("Berkley Trace")	Perimeter 5550	165	Atlanta, GA
RRE Merrywood Holdings, LLC ("Merrywood")	Aston at Cinco Ranch	228	Katy, TX
RRE Sunset Ridge Holdings, LLC ("Sunset Ridge")	Sunset Ridge	324	San Antonio, TX
RRE Parkridge Place Holdings, LLC ("Parkridge Place")	Calloway at Las Colinas	536	Irving, TX
RRE Woodmoor Holdings, LLC ("Woodmoor")	South Lamar Village	208	Austin, TX
RRE Gilbert Holdings, LLC ("Springs at Gilbert")	Heritage Pointe	458	Gilbert, AZ
RRE Bonita Glen Holdings, LLC ("Bonita")	Villages at Bonita Glen	295	Chula Vista, CA
RRE Yorba Linda Holdings, LLC ("Yorba Linda")	Yorba Linda	400	Yorba Linda, CA
		8,935
Subsidiaries related to disposed investments:
RRE Crestwood Holdings, LLC (“Crestwood”)	(c)	N/A	N/A
RRE 107th Avenue Holdings, LLC (“107th Avenue”)	(c)	N/A	N/A
RRE Westhollow Holdings, LLC (“Westhollow”)	(c)	N/A	N/A
RRE Campus Club Holdings, LLC (“Campus Club”)	(c)	N/A	N/A
RRE Bristol Holdings, LLC (“Bristol”)	(c)	N/A	N/A
RRE Skyview Holdings, LLC ("Skyview")	(c)	N/A	N/A
RRE Foxwood Holdings, LLC ("Foxwood")	(c)	N/A	N/A
RRE Flagstone Holdings, LLC ("Flagstone")	(c)	N/A	N/A
RRE Kenwick Canterbury Holdings, LLC ("Kenwick & Canterbury")	(c)	N/A	N/A
RRE Armand Place Holdings, LLC ("Armand")	(d)	N/A	N/A

PRIP 5060/6310, LLC ("Governor Park")	(b)(c)	N/A	N/A
PRIP 3700, LLC ("Champion Farms")	(b)(d)	N/A	N/A
PRIP 6700, LLC ("Hilltop Village")	(b)(c)	N/A	N/A
PRIP 3383, LLC ("Conifer Place")	(b)(d)	N/A	N/A
RRE Nob Hill Holdings, LLC ("Nob Hill")	(d)	N/A	N/A
RRE Spring Hill Holdings, LLC ("Spring Hill")	(e)	N/A	N/A
PRIP 10637, LLC ("Fieldstone")	(b)(d)	N/A	N/A

N/A - Not Applicable

(a) - Subsidiary holds a portion of the Williamsburg parking lot    

(b) - Wholly-owned subsidiary of RRE Charlemagne Holdings, LLC

(c) - Underlying investment sold prior to 2016

(d) - Underlying investment sold in 2016

(e) - Underlying investment resolved in 2016

Estimated Useful Lives of Assets

The Company anticipates the estimated useful lives of its assets by class as follows:

Buildings	27.5 years
Building improvements	3.0 to 27.5 years
Tenant improvements	Shorter of lease term or expected useful life

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SUPPLEMENTAL CASH FLOW INFORMATION (Tables)

6 Months Ended

Jun. 30, 2016

Supplemental Cash Flow Elements [Abstract]

Schedule of Supplemental Cash Flow Information

The following table presents the Company's supplemental cash flow information (in thousands):

	Six Months Ended
	June 30,
	2016		2015
Non-cash financing and investing activities:
Stock issued from the distribution reinvestment plan	$	14,407	$	14,432
Deferred financing costs and escrow deposits funded directly by mortgage note and revolving credit facility	—		10,709
Non-cash activity related to sales:
Deconsolidation of mortgage note payable	31,539		—
Deconsolidation of rental properties, net	35,152		—
Noncontrolling interest of deconsolidated subsidiary	3,613		—
Mortgage notes payable settled through sale of property	35,422		—
Sale of property used to settle mortgage notes payable	35,422		—
Assets and liabilities assumed in acquisitions:
Debt assumed	—		40,185
Other liabilities assumed	—		99
Rental properties, net	—		40,284
Cash paid during the period for:
Interest	$	10,538	$	9,388

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RENTAL PROPERTIES, NET (Tables)

6 Months Ended

Jun. 30, 2016

Real Estate Investments, Net [Abstract]

Summary of Investments in Rental Properties

The following table presents the Company’s investments in rental properties (in thousands):

	June 30, 2016			December 31, 2015
Land	$	169,019		$	180,533
Building and improvements	734,028			775,239
Furniture, fixtures and equipment	29,064			28,928
Construction in progress	3,903			2,949
	936,014			987,649
Less: accumulated depreciation	(86,318		)	(71,151		)
	$	849,696		$	916,498

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OTHER INVESTMENTS (Tables)

6 Months Ended

Jun. 30, 2016

Investments, Debt and Equity Securities [Abstract]

Components of Investments

The following table presents the Company's components of other investments (in thousands):

	June 30, 2016		December 31, 2015
Loan held for investment, net	$	764	$	757
Preferred equity investment, net	—		3,886
	$	764	$	4,643

Aging of Loan Held for Investment

The following table presents the aging of the Company’s loan held for investment, net (in thousands):

	June 30, 2016		December 31, 2015
Current	$	764	$	757
Delinquent:
30−89 days	—		—
90−180 days	—		—
Greater than 180 days	—		—
	$	764	$	757

Schedule of Credit Quality of Loan Held for Investment, Net

The following table presents information about the credit quality of the Company’s loan held for investment, net (in thousands):

	June 30, 2016		December 31, 2015
Performing	$	764	$	757
Nonperforming	—		—
Total	$	764	$	757

Terms of Loan Held for Investment

The following table presents details of the balance and terms of the Company's loan held for investment, at June 30, 2016 and December 31, 2015 (in thousands):

	Unpaid Principal Balance		Unamortized Discount			Deferred expenses, net		Net book value		Maturity Date	Interest Rate	Average monthly payment
Loan- Trail Ridge
June 30, 2016:	$	969	$	(212	)	$	7	$	764	10/28/2021	7.5%	$	8
December 31, 2015:	$	981	$	(231	)	$	7	$	757

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DISPOSITION OF PROPERTIES AND DECONSOLIDATION OF INTERESTS (Tables)

6 Months Ended

Jun. 30, 2016

Discontinued Operations and Disposal Groups [Abstract]

Summary of Disposition Activity

The following table presents details of the Company's disposition and deconsolidation activity during the three and six months ended June 30, 2016 and 2015 (in thousands):

					Gain on Sale
Multifamily Community	Location	Sale Date	Contract Sales Price		Three months ended June 30, 2016			Six months ended June 30, 2016
2016 Dispositions:
Conifer Place (1)	Norcross, Georgia	January 27, 2016	$	42,500	$	—		$	9,897
Champion Farms (2)	Louisville, Kentucky	January 29, 2016	7,590		—			1,066
The Ivy at Clear Creek	Houston, Texas	February 17, 2016	19,400		—			6,792
Affinity at Winter Park	Winter Park, Florida	June 9, 2016	17,500		5,605			5,605
Fieldstone (3)	Woodland, Ohio	June 30, 2016	7,514		4,096			4,096
					$	9,701		$	27,456
2015 Dispositions:					Three months ended June 30, 2015			Six months ended June 30, 2015
The Alcove Apartments	Houston, Texas	January 26, 2015	$	11,050	$	(1	)	$	3,784
107th Avenue Apartments	Omaha, Nebraska	January 29, 2015	250		—			50
The Redford Apartments	Houston, Texas	February 27, 2015	32,959		(9		)	15,303
Cityside Apartments	Houston, Texas	March 2, 2015	24,500		—			10,028
One Hundred Chevy Chase	Lexington, Kentucky	June 30, 2015	13,500		4,386			4,386
					$	4,376		$	33,551

(1)    On January 27, 2016, the Company and its joint venture partner sold the Conifer Place Apartments, which resulted in the deconsolidation of the entity as of January 27, 2016. Gain on sale includes $6.2 million attributable to noncontrolling interests.

(2)    On January 29, 2016, the Company sold its joint venture interest in Champion Farms to its joint venture partner. As such, the Company deconsolidated the entity as of January 29, 2016. The Company has no continuing involvement with this joint venture.

(3)    On June 30, 2016, the Company sold its joint venture interest in Fieldstone to its joint venture partner. As such, the Company deconsolidated the entity as of June 30, 2016. The Company has no continuing involvement with this joint venture.

The following table presents the Company's revenues and net income (loss) attributable to properties sold, which includes gain on sale, for the three and six months ended June 30, 2016 and 2015 (in thousands):

	Revenues Attributable to Properties Sold					Net Income (Loss) Attributable to Properties Sold
Multifamily Community	Three months ended June 30, 2016			Six months ended June 30, 2016		Three months ended June 30, 2016			Six months ended June 30, 2016
2016 Dispositions:
Conifer Place(1)	$	—		$	365	$	—		$	9,942
Champion Farms	—			220		—			1,125
The Ivy at Clear Creek	—			386		(1		)	6,627
Affinity at Winter Park	463			1,008		5,742			5,748
Fieldstone	789			1,548		4,243			4,325
	$	1,252		$	3,527	$	9,984		$	27,767
2015 Dispositions:	Three months ended June 30, 2015			Six months ended June 30, 2015		Three months ended June 30, 2015			Six months ended June 30, 2015
The Alcove Apartments	$	1		$	199	$	4		$	3,810
107th Avenue Apartments	—			3		—			50
The Redford Apartments	(40		)	1,274		(67		)	15,670
Cityside Apartments	7			701		—			10,310
One Hundred Chevy Chase	443			832		4,329			4,108
	$	411		$	3,009	$	4,266		$	33,948

(1)    On January 27, 2016, the Company and its joint venture partner sold the Conifer Place Apartments, which resulted in the deconsolidation of the entity as of January 27, 2016. Net income attributable to properties sold presented in table includes $6.3 million attributable to noncontrolling interests.

Roll Forward of Goodwill Activity

The following table presents a rollforward of the Company's activity in goodwill for the six months ended June 30, 2016 (in thousands):

Balance, January 1, 2016	$	1,231
Sale of Conifer, Champion, and Fieldstone	(520		)
Balance, June 30, 2016	$	711

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IDENTIFIED INTANGIBLE ASSETS, NET (Tables)

6 Months Ended

Jun. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of Expected Amortization of Rental and Antennae Leases

xpected amortization for the antennae leases for the next five 12-month periods ending June 30, and thereafter (in thousands): 

2017	$	16
2018	16
2019	16
2020	16
2021	16
Thereafter	74
	$	154

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MORTGAGE NOTES PAYABLE, NET (Tables)

6 Months Ended

Jun. 30, 2016

Debt Disclosure [Abstract]

Summary of Mortgage Notes Payable

The following table presents a summary of the Company's mortgage notes payable, net (in thousands):

	June 30, 2016										December 31, 2015
Collateral	Outstanding Borrowings		Premium (Discount)			Deferred finance costs, net			Carrying Value		Outstanding Borrowings		Premium (Discount)			Deferred finance costs, net			Carrying Value
Vista Apartment Homes	$	15,398	$	—		$	(197	)	$	15,201	$	15,573	$	—		$	(216	)	$	15,357
Cannery Lofts	8,065		—			(116		)	7,949		8,148		—			(131		)	8,017
Deerfield	10,439		—			(142		)	10,297		10,517		—			(159		)	10,358
Ivy at Clear Creek	—		—			—			—		8,431		—			(136		)	8,295
Trailpoint at the Woodlands	18,852		—			(240		)	18,612		19,013		—			(257		)	18,756
Verona Apartment Homes	22,176		—			(148		)	22,028		22,402		—			(179		)	22,223
Skyview Apartment Homes	17,907		—			(123		)	17,784		18,089		—			(148		)	17,941
The Nesbit Palisades	20,298		—			(290		)	20,008		20,298		—			(309		)	19,989
Maxwell Townhomes	13,728		—			(152		)	13,576		13,850		—			(167		)	13,683
Fieldstone	—		—			—			—		15,332		—			(37		)	15,295
Pinehurst	4,040		—			—			4,040		4,111		—			—			4,111
Pheasant Run	6,250		71			(15		)	6,306		6,250		100			(20		)	6,330
Retreat of Shawnee	12,993		124			(33		)	13,084		13,090		164			(44		)	13,210
Conifer Place	—		—			—			—		27,074		—			—			27,074
Evergreen at Coursey Place	27,330		112			(107		)	27,335		27,548		123			(120		)	27,551
Pines of York	15,134		(331		)	(63		)	14,740		15,267		(363		)	(69		)	14,835
The Estates at Johns Creek	50,000		—			(465		)	49,535		50,000		—			(526		)	49,474
Chisholm Place	11,587		—			(153		)	11,434		11,587		—			(163		)	11,424
Perimeter Circle	17,478		—			(172		)	17,306		17,657		—			(202		)	17,455
Perimeter 5550	13,795		—			(143		)	13,652		13,935		—			(167		)	13,768
Aston at Cinco Ranch	23,572		—			(299		)	23,273		23,772		—			(328		)	23,444
Sunset Ridge 1	19,913		295			(234		)	19,974		20,121		329			(261		)	20,189
Sunset Ridge 2	2,975		40			(30		)	2,985		3,002		45			(34		)	3,013
Calloway at Las Colinas	35,414		—			(339		)	35,075		35,740		—			(372		)	35,368
South Lamar Village	12,560		—			(158		)	12,402		12,682		—			(184		)	12,498
Heritage Pointe	26,280		—			(348		)	25,932		26,280		—			(370		)	25,910
Yorba Linda	67,500		—			(761		)	66,739		67,500		—			(860		)	66,640
Villages at Bonita Glen	27,089		2,121			(364		)	28,846		27,265		2,276			(391		)	29,150
Stone Ridge	5,288		—			(142		)	5,146		5,350		—			(153		)	5,197
The Westside Apartments	23,000		—			(273		)	22,727		23,000		—			(351		)	22,649
Tech Center Square	12,500		—			(213		)	12,287		12,500		—			(159		)	12,341
	$	541,561	$	2,432		$	(5,720	)	$	538,273	$	595,384	$	2,674		$	(6,513	)	$	591,545

The following table presents additional information about the Company's mortgage notes payable, net (in thousands, except percentages):

Collateral	Maturity Date	Annual Interest Rate		Average Monthly Debt Service	Average Monthly Escrow
Vista Apartment Homes	1/1/2022	2.76%	(1)(5)	$65	$16
Cannery Lofts	9/1/2020	3.77%	(1)(5)	40	26
Deerfield	11/1/2020	4.66%	(2)(5)	54	29
Trailpoint at the Woodlands	11/1/2023	2.88%	(1)(4)	69	67
Verona Apartment Homes	1/1/2019	3.60%	(2)(5)	106	41
Skyview Apartment Homes	1/1/2019	3.60%	(2)(5)	85	21
The Nesbit Palisades	7/1/2024	2.42%	(1)(3)	59	54
Maxwell Townhomes	1/1/2022	4.32%	(2)(5)	71	63
Pinehurst	1/1/2017	2.97%	(1)(6)	23	12
Pheasant Run	10/1/2017	5.95%	(2)(3)	31	15
Retreat of Shawnee	2/1/2018	5.58%	(2)(5)	78	28
Evergreen at Coursey Place	8/1/2021	5.07%	(2)(5)	154	48
Pines of York	12/1/2021	4.46%	(2)(5)	80	37
The Estates at Johns Creek	7/1/2020	3.38%	(2)(3)	220	102
Chisholm Place	6/1/2024	2.86%	(1)(3)	39	38
Perimeter Circle	7/1/2019	3.42%	(2)(5)	81	53
Perimeter 5550	7/1/2019	3.42%	(2)(5)	64	41
Aston at Cinco Ranch	10/1/2021	4.34%	(2)(5)	120	63
Sunset Ridge 1	11/1/2020	4.58%	(2)(5)	113	91
Sunset Ridge 2	11/1/2020	4.54%	(2)(5)	16	—
Calloway at Las Colinas	12/1/2021	3.87%	(2)(5)	171	113
South Lamar Village	8/1/2019	3.64%	(2)(5)	59	46
Heritage Pointe	4/1/2025	2.35%	(1)(3)	89	44
Yorba Linda	6/1/2020	2.22%	(1)(3)	158	—
Villages at Bonita Glen	10/1/2023	5.33%	(2)(5)	152	38
Stone Ridge	12/1/2022	2.33%	(1)(5)	21	17
The Westside Apartments	12/27/2017	2.42%	(1)(3)	61	—
Tech Center Square	6/1/2023	3.05%	(1)(5)	53	25

(1) Variable rate based on one-month LIBOR of 0.4651% (as of June 30, 2016) plus a fixed margin.

(2) Fixed rate.

(3) Monthly interest-only payment currently required.

(4) Monthly fixed principal plus interest payment required.

(5) Fixed monthly principal and interest payment required.

(6) On January 1, 2016, this loan automatically extended for one year at a variable rate based on one-month LIBOR plus a fixed margin.

Annual Principal Payments on the Mortgage Notes Payable

nnual principal payments on the mortgage notes payable, excluding the amortization of the premium or discount, for each of the next five 12-month periods ending June 30, and thereafter (in thousands):

2017	$	11,469
2018	49,794
2019	46,963
2020	114,707
2021	89,006
Thereafter	229,622
	$	541,561

Schedule of Annual Amortization

nnual amortization of the premium or discount for each of the next five 12-month periods ending June 30, and thereafter (in thousands):

2017	$	482
2018	401
2019	336
2020	331
2021	276
Thereafter	606
	$	2,432

Estimated Amortization of Deferred Financing Costs

Estimated amortization of the existing deferred financing costs for the next five 12-month periods ending June 30, and thereafter, is as follows (in thousands):

2017	$	1,402
2018	1,271
2019	1,089
2020	850
2021	469
Thereafter	639
	$	5,720

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CREDIT FACILITY (Tables)

6 Months Ended

Jun. 30, 2016

Line of Credit Facility [Abstract]

Summary of the Revolving Credit Facilities

The following table presents a summary of the Company's credit facility (in thousands, except percentages):

									Weighted Average Interest Rate
	Balance Outstanding at		Current Availability at		Balance Outstanding at	Maturity Date	Interest Rate Basis (1)	Current Interest Rate	Three months ended June 30,		Six Months Ended   June 30,
Lender	June 30, 2016				December 31, 2015				2016	2015	2016	2015
Bank of America	$	5,394	$	15,500	21,894	5/23/2017	LIBOR plus 3%	3.47%	3.40%	3.19%	3.43%	3.21%

(1) Variable rate based on one-month LIBOR of 0.4651% (as of June 30, 2016).

Schedule of Principal Payments

rincipal payments required by the credit facility for the 12-month period ending June 30,2017 are approximately $5.4 million and none thereafter.

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ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables)

6 Months Ended

Jun. 30, 2016

Equity [Abstract]

Components of Accumulated Other Comprehensive Loss

The following table presents the changes in each component of the Company's accumulated other comprehensive loss for the six months ended June 30, 2016 (in thousands):

	Net unrealized loss on derivatives
January 1, 2016	$	(440	)
Reclassification adjustment for realized loss on designated derivative	72
Unrealized loss on designated derivatives	(23		)
June 30, 2016	$	(391	)

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS (Tables)

6 Months Ended

Jun. 30, 2016

Related Party Transactions [Abstract]

Fees Earned From/Expenses Paid to Related Parties

The following table presents the Company's amounts payable to/receivable from related parties (in thousands):

	June 30, 2016		December 31, 2015
Due from related parties:
RAI and affiliates	$	2,004	$	1,421
Due to related parties:
Advisor:
Operating expense reimbursements	$	—	$	286
Resource Real Estate Opportunity Manager, LLC:
Property management fees	882		440
Other reimbursements	581		459
Other	14		—
	$	1,477	$	1,185

The following table presents the Company's fees earned/expenses paid to related parties (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
Fees earned / expenses paid to related parties:
Advisor:
Acquisition fees (1)	$	—	$	3,687	$	8	$	5,169
Asset management fees (2)	$	2,674	$	2,461	$	5,381	$	4,709
Disposition fees (3)	$	220	$	270	$	413	$	1,031
Debt financing fees (4)	$	—	$	474	$	—	$	670
Overhead allocation (5)	$	1,130	$	934	$	2,405	$	1,822
Internal audit (5)	$	—	$	7	$	—	$	14
Resource Real Estate Opportunity Manager LLC:
Property management fees (2)	$	1,315	$	1,131	$	2,605	$	2,238
Construction management fees (6)	$	250	$	483	$	492	$	839
Information technology fees (5)	$	107	$	83	$	216	$	166
Operating expense reimbursements (7)	$	62	$	76	$	130	$	143
Debt servicing fees (2)	$	10	$	20	$	14	$	25
Other:
Ledgewood (5)	$	20	$	83	$	30	$	144
Graphic Images (5)	$	60	$	19	$	60	$	22

(1) Included in Acquisition costs on the consolidated statements of operations and comprehensive loss.

(2) Included in Management fees on the consolidated statements of operations and comprehensive loss.

(3) Included in Net gains on dispositions of properties and joint venture interests on the consolidated statements of operations and comprehensive loss.

(4) Included in Mortgage notes payable, net, on the consolidated balance sheets.

(5) Included in General and administrative costs on the consolidated statements of operations and comprehensive loss.

(6) Included in Rental properties, net, on the consolidated balance sheets.

(7) Included in Rental operating expenses on the consolidated statements of operations and comprehensive loss.

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EQUITY (Tables)

6 Months Ended

Jun. 30, 2016

Equity [Abstract]

Schedule of Shares Issued

As of June 30, 2016, the Company had issued shares of its $0.01 par value common stock as follows (dollars in thousands):

	Shares Issued		Gross Proceeds
Shares issued through private offering	1,263,727		$	12,582
Shares issued through primary public offering (1)	62,485,461		622,077
Shares issued through stock distributions	2,132,266		—
Shares issued through distribution reinvestment plan	7,777,113		77,300
Shares issued in conjunction with the Advisor's initial investment, net of 4,500 share conversion	15,500		155
Total	73,674,067		$	712,114
Shares redeemed	(2,178,618	)
Total shares outstanding as of June 30, 2016	71,495,449

(1)    Includes 276,056 shares issued to the Advisor.

Schedule of Distributions

For the six months ended June 30, 2016, the Company paid aggregate distributions of $21.5 million, including $7.1 million of distributions paid in cash and $14.4 million of distributions reinvested in shares of common stock through the Company's distribution reinvestment plan, as follows (in thousands):

Record Date	Per Common Share	Distribution Date	Distributions Invested in Shares of Common Stock		Aggregate Cash Distribution		Total Aggregate Distribution
January 28, 2016	$0.05	January 29, 2016	$	2,423	$	1,151	$	3,574
February 26, 2016	0.05	February 29, 2016	2,418		1,167		3,585
March 30, 2016	0.05	March 31, 2016	2,415		1,172		3,587
April 28, 2016	0.05	April 29, 2016	2,414		1,181		3,595
May 27, 2016	0.05	June 3, 2016	2,380		1,226		3,606
June 29, 2016	0.05	June 30, 2016	2,357		1,208		3,565
	$0.30		$	14,407	$	7,105	$	21,512

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FAIR VALUE MEASURES AND DISCLOSURES (Tables)

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

Assets Measured at Fair Value on a Recurring Basis

The following table presents information about the Company's assets measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value (in thousands):

	Level 1		Level 2		Level 3		Total
June 30, 2016
Assets:
Interest rate caps	$	—	$	5	$	—	$	5
	$	—	$	5	$	—	$	5
December 31, 2015
Assets:
Interest rate caps	$	—	$	32	$	—	$	32
	$	—	$	32	$	—	$	32

Carrying and Fair Values of Loan Held for Investment, Net, Preferred Equity Investment, Mortgage Notes Payable, and Revolving Credit Facility

The carrying and fair values of the Company’s loans held for investment, net, preferred equity investments, mortgage note payable-outstanding borrowings, mortgage note payable -included in other liabilities associated with rental properties held for sale and credit facilities were as follows (in thousands):

	June 30, 2016						December 31, 2015
	Carrying Amount			Estimated Fair Value			Carrying Amount			Estimated Fair Value
Loan held for investment, net	$	764		$	1,151		$	757		$	1,151
Preferred equity investment	$	—		$	—		$	3,886		$	3,908
Mortgage notes payable- outstanding borrowings	$	(541,561	)	$	(535,783	)	$	(595,384	)	$	(573,693	)
Mortgage note payable- included in other liabilities associated with rental properties held for sale	$	—		$	—		$	(16,443	)	$	(16,597	)
Credit facility	$	(5,394	)	$	(5,394	)	$	(21,894	)	$	(21,894	)

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DERIVATIVES AND HEDGING ACTIVITIES (Tables)

6 Months Ended

Jun. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Outstanding Interest Rate Derivatives

As of June 30, 2016, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk (dollars in thousands):

Interest Rate Derivative	Number of Instruments	Notional Amount		Maturity Dates
Interest Rate Caps	8	$	119,863	January 1, 2018 to May 3, 2019

Fair Value and Balance Sheet Location of Derivatives

The following table presents the fair value of the Company’s derivative financial instruments as well as their classification in prepaid expenses and other assets on the Balance Sheet as of June 30, 2016 and December 31, 2015 (in thousands):

Asset Derivatives						Liability Derivatives
June 30, 2016			December 31, 2015			June 30, 2016			December 31, 2015
Balance Sheet	Fair Value		Balance Sheet	Fair Value		Balance Sheet	Fair Value		Balance Sheet	Fair Value
Interest rate caps	$	5	Interest rate caps	$	32	—	$	—	—	$	—

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NATURE OF BUSINESS AND OPERATIONS - Narrative (Details) - USD ($) $ in Thousands	6 Months Ended	24 Months Ended	54 Months Ended
	Jun. 30, 2016	Dec. 31, 2015	Dec. 13, 2013
Securities Financing Transaction [Line Items]
Common stock issued through distribution reinvestment plan (in shares)	1,300,000	5,300,000	1,200,000
Common stock issued through distribution reinvestment plan	$ 14,407	$ 51,900
Public offering | Common Stock
Securities Financing Transaction [Line Items]
Proceeds from issuance of stock under private offering			$ 645,800
Issuance of common stock (in shares)			64,900,000
Public offering | Common Stock | Advisor
Securities Financing Transaction [Line Items]
Issuance of common stock (in shares)			276,056

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Principles of Consolidation (Details) - Unit	Jun. 30, 2016	Jun. 29, 2016	Jan. 28, 2016	Jan. 26, 2016	Dec. 31, 2015
Subsidiary or Equity Method Investee [Line Items]
Number of Units	8,935
RRE Iroquois, LP (“Vista”)
Subsidiary or Equity Method Investee [Line Items]
Number of Units	133
RRE Cannery Holdings, LLC (“Cannery”)
Subsidiary or Equity Method Investee [Line Items]
Number of Units	156
RRE Williamsburg Holdings, LLC (“Williamsburg”)
Subsidiary or Equity Method Investee [Line Items]
Number of Units	976
RRE Park Forest Holdings, LLC (Park Forest)
Subsidiary or Equity Method Investee [Line Items]
Number of Units	216
RRE Deerfield Holdings, LLC (Deerfield)
Subsidiary or Equity Method Investee [Line Items]
Number of Units	166
RRE Autumn Wood Holdings, LLC (Autumn Wood)
Subsidiary or Equity Method Investee [Line Items]
Number of Units	206
RRE Village Square Holdings, LLC (Village Square)
Subsidiary or Equity Method Investee [Line Items]
Number of Units	271
RRE Brentdale Holdings, LLC (Brentdale)
Subsidiary or Equity Method Investee [Line Items]
Number of Units	412
RRE Jefferson Point Holdings, LLC (Jefferson Point)
Subsidiary or Equity Method Investee [Line Items]
Number of Units	208
RRE Centennial Holdings, LLC (Centennial)
Subsidiary or Equity Method Investee [Line Items]
Number of Units	276
RRE Pinnacle Holdings, LLC (Pinnacle)
Subsidiary or Equity Method Investee [Line Items]
Number of Units	224
RRE Jasmine Holdings, LLC (Jasmine)
Subsidiary or Equity Method Investee [Line Items]
Number of Units	437
RRE River Oaks Holdings, LLC (River Oaks)
Subsidiary or Equity Method Investee [Line Items]
Number of Units	314
RRE Nicollet Ridge Holdings, LLC (Nicollet Ridge)
Subsidiary or Equity Method Investee [Line Items]
Number of Units	339
RRE Addison Place Holdings, LLC (Addison Place)
Subsidiary or Equity Method Investee [Line Items]
Number of Units	403
PRIP Coursey, LLC (Evergreen at Coursey Place)
Subsidiary or Equity Method Investee [Line Items]
Number of Units	352
PRIP 500, LLC (Pinehurst)
Subsidiary or Equity Method Investee [Line Items]
Number of Units	146
PRIP 1102, LLC (Pheasant Run)
Subsidiary or Equity Method Investee [Line Items]
Number of Units	160
PRIP 11128, LLC (Retreat at Shawnee)
Subsidiary or Equity Method Investee [Line Items]
Number of Units	342
PRIP Pines, LLC (Pines of York)
Subsidiary or Equity Method Investee [Line Items]
Number of Units	248
RRE Chisholm Place Holdings LLC (Chisholm Place)
Subsidiary or Equity Method Investee [Line Items]
Number of Units	142
RRE Berkeley Run Holdings, LLC (Berkley Run)
Subsidiary or Equity Method Investee [Line Items]
Number of Units	194
RRE Berkeley Trace Holdings LLC (Berkley Trace)
Subsidiary or Equity Method Investee [Line Items]
Number of Units	165
RRE Merrywood Holdings, LLC (Merrywood)
Subsidiary or Equity Method Investee [Line Items]
Number of Units	228
RRE Sunset Ridge Holdings, LLC (Sunset Ridge)
Subsidiary or Equity Method Investee [Line Items]
Number of Units	324
RRE Parkridge Place Holdings, LLC (Parkridge Place)
Subsidiary or Equity Method Investee [Line Items]
Number of Units	536
RRE Woodmoor Holdings, LLC (Woodmoor)
Subsidiary or Equity Method Investee [Line Items]
Number of Units	208
RRE Gilbert Holdings, LLC (Springs at Gilbert)
Subsidiary or Equity Method Investee [Line Items]
Number of Units	458
RRE Bonita Glen Holdings, LLC (Bonita)
Subsidiary or Equity Method Investee [Line Items]
Number of Units	295
RRE Yorba Linda Holdings, LLC (Yorba Linda)
Subsidiary or Equity Method Investee [Line Items]
Number of Units	400
Champion Farms
Subsidiary or Equity Method Investee [Line Items]
Ownership %			70.00%		70.00%
Fieldstone
Subsidiary or Equity Method Investee [Line Items]
Ownership %		83.00%
Conifer Place
Subsidiary or Equity Method Investee [Line Items]
Ownership %				42.50%
Stone Ridge
Subsidiary or Equity Method Investee [Line Items]
Number of Units	188
Ownership %	83.40%

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Rental Property Useful Lives (Details)	6 Months Ended
	Jun. 30, 2016
Buildings
Real Estate Properties [Line Items]
Estimated useful lives	27 years 6 months
Building improvements | Minimum
Real Estate Properties [Line Items]
Estimated useful lives	3 years
Building improvements | Maximum
Real Estate Properties [Line Items]
Estimated useful lives	27 years 6 months

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) shares in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2016 USD ($)	Jun. 30, 2015 USD ($)	Jun. 30, 2016 USD ($) Property shares	Jun. 30, 2015 USD ($)	Dec. 31, 2015 USD ($) Property
Assets Held for Sale [Abstract]
Number of rental properties held for sale (in property) | Property			1		3
Rental Properties [Abstract]
Capitalization threshold for improvements and replacements			$ 1,000
Asset Impairment Charges [Abstract]
Impairment charges	$ 0	$ 0	$ 0	$ 0
Allocation of Purchase Price of Acquired Assets [Abstract]
Initial purchase price allocation subject to change, period			1 year
Revenue Recognition [Abstract]
Future minimum rental payments, thereafter	0		$ 0
Total other income	2,800,000	2,500,000	5,600,000	4,500,000
Tenant Receivable [Abstract]
Allowance for uncollectable receivables	4,399		$ 4,399		$ 24,100
Income Taxes [Abstract]
Number of years entity may be precluded from REIT qualifications			4 years
Earnings Per Share [Abstract]
Antidilutive securities not included in the diluted earnings per share calculations (in shares) | shares			50
Reclassifications
Unamortized debt issuance costs	5,720,000		$ 5,720,000		6,513,000
Accounting Standards Update 2015-03 | Assets
Reclassifications
Unamortized debt issuance costs					(6,500,000)
Accounting Standards Update 2015-03 | Mortgage notes payable
Reclassifications
Unamortized debt issuance costs					$ 6,500,000
Operating leases for residential rental properties
Revenue Recognition [Abstract]
Future minimum rental payments, current	51,200,000		51,200,000
Future minimum rental payments, in two years	346,000		346,000
Commercial rental properties and antenna rentals
Revenue Recognition [Abstract]
Future minimum rental payments, current	362,000		362,000
Future minimum rental payments, in two years	253,000		253,000
Future minimum rental payments, in three years	169,000		169,000
Future minimum rental payments, in four years	120,000		120,000
Future minimum rental payments, in five years	11,000		11,000
Future minimum rental payments, thereafter	$ 0		$ 0
Manager
Rental Properties [Abstract]
Construction management fee			5.00%
Immaterial Error [Member] | General and Administrative Expense [Member]
Reclassifications
Payroll expense		(428,000)		(956,000)
Immaterial Error [Member] | Operating Expense [Member]
Reclassifications
Payroll expense		$ 428,000		$ 956,000

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SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Non-cash financing and investing activities:
Stock issued from the distribution reinvestment plan	$ 14,407	$ 14,432
Deferred financing costs and escrow deposits funded directly by mortgage note and revolving credit facility	0	10,709
Non-cash activity related to sales:
Deconsolidation of mortgage note payable	31,539	0
Deconsolidation of rental properties, net	35,152	0
Noncontrolling interest of deconsolidated subsidiary	3,613	0
Mortgage notes payable settled through sale of property	35,422	0
Sale of property used to settle mortgage notes payable	35,422	0
Assets and liabilities assumed in acquisitions:
Debt assumed	0	40,185
Other liabilities assumed	0	99
Rental properties, net	0	40,284
Cash paid during the period for:
Interest	$ 10,538	$ 9,388

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RENTAL PROPERTIES, NET (Details) $ in Thousands	3 Months Ended			6 Months Ended		12 Months Ended
	Jun. 30, 2016 USD ($) Property	Dec. 31, 2015 USD ($) Property	Jun. 30, 2015 USD ($)	Jun. 30, 2016 USD ($) Property	Jun. 30, 2015 USD ($)	Dec. 31, 2015 USD ($) Property	Jan. 28, 2016
Investments in rental properties [Abstract]
Land	$ 169,019	$ 180,533		$ 169,019		$ 180,533
Building and improvements	734,028	775,239		734,028		775,239
Furniture, fixtures and equipment	29,064	28,928		29,064		28,928
Construction in progress	3,903	2,949		3,903		2,949
Rental properties, gross	936,014	987,649		936,014		987,649
Less: accumulated depreciation	(86,318)	(71,151)		(86,318)		(71,151)
Rental properties, net	849,696	$ 916,498		849,696		$ 916,498
Depreciation expense	10,900		$ 10,600	22,100	$ 19,400
Gain (loss) on disposal of assets	$ (144)		$ (1,372)	$ (286)	$ (2,481)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of rental properties held for sale (in property) | Property				1		3
Champion Farms
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Ownership percentage		70.00%				70.00%	70.00%
The Nesbit Palisades
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of rental properties held for sale (in property) | Property	1
Contract Sales Price	$ 26,600			$ 26,600
Conifer Place and Ivy at Clear Creek
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of rental properties held for sale (in property) | Property		2
Contract Sales Price		$ 43,900				$ 43,900

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OTHER INVESTMENTS - Narrative (Details) $ in Thousands				6 Months Ended
	Jun. 06, 2016 USD ($)	Nov. 12, 2014 USD ($)	Mar. 15, 2011 USD ($) Loan	Jun. 30, 2016 USD ($)	Mar. 31, 2016 USD ($)	Jun. 30, 2015 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Payments to acquire preferred equity investment				$ 408		$ 0
Exit fee received	$ 230
Number of nonperforming promissory notes (in loan) | Loan			2
Number of performing promissory notes (in loan) | Loan			2
Purchase price of promissory note			$ 3,100
Spring Hills Investors Limited Partner, LLC
Accounts, Notes, Loans and Financing Receivable [Line Items]
Payments to acquire preferred equity investment		$ 3,500			$ 800
Dividend receivable rate		12.00%
Monthly dividend receivable rate		7.00%

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OTHER INVESTMENTS - Components of Investments (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Investments, Debt and Equity Securities [Abstract]
Loan held for investment, net	$ 764	$ 757
Preferred equity investment, net	0	3,886
Loans held for investment and preferred equity investments, net	$ 764	$ 4,643

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OTHER INVESTMENTS - Aging Schedule of Investments (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Loans Held for Investment [Line Items]
Financing receivable	$ 764	$ 757
Current
Loans Held for Investment [Line Items]
Financing receivable	764	757
30−89 days
Loans Held for Investment [Line Items]
Financing receivable	0	0
90−180 days
Loans Held for Investment [Line Items]
Financing receivable	0	0
Greater than 180 days
Loans Held for Investment [Line Items]
Financing receivable	$ 0	$ 0

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OTHER INVESTMENTS - Recorded Investment, Credit Quality Indicator (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Financing Receivable, Recorded Investment [Line Items]
Loan held for investment, net	$ 764	$ 757
Performing
Financing Receivable, Recorded Investment [Line Items]
Loan held for investment, net	764	757
Nonperforming
Financing Receivable, Recorded Investment [Line Items]
Loan held for investment, net	$ 0	$ 0

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OTHER INVESTMENTS - Terms of Loans Held for Investment (Details) - Trail Ridge - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Unpaid Principal Balance	$ 969	$ 981
Unamortized Discount	(212)	(231)
Deferred expenses, net	7	7
Net book value	$ 764	$ 757
Interest rate	7.50%
Average monthly payment	$ 8

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DISPOSITION OF PROPERTIES AND DECONSOLIDATION OF INTERESTS - Sales Activity (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
	Jan. 27, 2016	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Jun. 09, 2016	Feb. 17, 2016	Jan. 29, 2016	Mar. 02, 2015	Feb. 27, 2015	Jan. 29, 2015	Jan. 26, 2015
Conifer Place
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Contract Sales Price	$ 42,500
Six months ended June 30, 2016		$ 0		$ 9,897
Conifer Place | Noncontrolling interests
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Six months ended June 30, 2016	$ 6,200
Champion Farms
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Contract Sales Price								$ 7,590
Six months ended June 30, 2016		0		1,066
The Ivy at Clear Creek
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Contract Sales Price							$ 19,400
Six months ended June 30, 2016		0		6,792
Affinity at Winter Park
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Contract Sales Price						$ 17,500
Six months ended June 30, 2016		5,605		5,605
Fieldstone
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Contract Sales Price		7,514		7,514
Six months ended June 30, 2016		4,096		4,096
The Alcove Apartments
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Contract Sales Price												$ 11,050
Six months ended June 30, 2016			$ (1)		$ 3,784
107th Avenue Apartments
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Contract Sales Price											$ 250
Six months ended June 30, 2016			0		50
The Redford Apartments
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Contract Sales Price										$ 32,959
Six months ended June 30, 2016			(9)		15,303
Cityside Apartments
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Contract Sales Price									$ 24,500
Six months ended June 30, 2016			0		10,028
One Hundred Chevy Chase
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Contract Sales Price			13,500		13,500
Six months ended June 30, 2016			4,386		4,386
Multifamily residential apartment community
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Six months ended June 30, 2016		$ 9,701	$ 4,376	$ 27,456	$ 33,551

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DISPOSITION OF PROPERTIES AND DECONSOLIDATION OF INTERESTS - Revenue and Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net Income (Loss) Attributable to Properties Sold	$ 2,427	$ (12,476)	$ 10,907	$ 4,563
Noncontrolling interests
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net Income (Loss) Attributable to Properties Sold			6,306
Conifer Place
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Disposal Group, Including Discontinued Operation, Revenue	0		365
Net Income (Loss) Attributable to Properties Sold	0		9,942
Conifer Place | Noncontrolling interests
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net Income (Loss) Attributable to Properties Sold			6,300
Champion Farms
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Disposal Group, Including Discontinued Operation, Revenue	0		220
Net Income (Loss) Attributable to Properties Sold	0		1,125
The Ivy at Clear Creek
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Disposal Group, Including Discontinued Operation, Revenue	0		386
Net Income (Loss) Attributable to Properties Sold	(1)		6,627
Affinity at Winter Park
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Disposal Group, Including Discontinued Operation, Revenue	463		1,008
Net Income (Loss) Attributable to Properties Sold	5,742		5,748
Fieldstone
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Disposal Group, Including Discontinued Operation, Revenue	789		1,548
Net Income (Loss) Attributable to Properties Sold	4,243		4,325
The Alcove Apartments
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Disposal Group, Including Discontinued Operation, Revenue		1		199
Net Income (Loss) Attributable to Properties Sold		4		3,810
107th Avenue Apartments
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Disposal Group, Including Discontinued Operation, Revenue		0		3
Net Income (Loss) Attributable to Properties Sold		0		50
The Redford Apartments
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Disposal Group, Including Discontinued Operation, Revenue		(40)		1,274
Net Income (Loss) Attributable to Properties Sold		(67)		15,670
Cityside Apartments
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Disposal Group, Including Discontinued Operation, Revenue		7		701
Net Income (Loss) Attributable to Properties Sold		0		10,310
One Hundred Chevy Chase
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Disposal Group, Including Discontinued Operation, Revenue		443		832
Net Income (Loss) Attributable to Properties Sold		4,329		4,108
Multifamily residential apartment community
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Disposal Group, Including Discontinued Operation, Revenue	1,252	411	3,527	3,009
Net Income (Loss) Attributable to Properties Sold	$ 9,984	$ 4,266	$ 27,767	$ 33,948

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DISPOSITION OF PROPERTIES AND DECONSOLIDATION OF INTERESTS - Roll Forward of Activity in Goodwill (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2016 USD ($)
Goodwill [Roll Forward]
Beginning balance	$ 1,231
Sale of Conifer, Champion, and Fieldstone	(520)
Ending balance	$ 711

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IDENTIFIED INTANGIBLE ASSETS, NET - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]
Identified intangible assets, net	$ 154		$ 154		$ 374
Weighted average remaining life			0 months		1 month
Amortization expense	4	$ 1,500	$ 220	$ 3,000
Acquired in-place leases
Finite-Lived Intangible Assets [Line Items]
Identified intangible assets, net	154		154		$ 374
Accumulated amortization	25,100		25,100		$ 28,400
Antennae leases
Finite-Lived Intangible Assets [Line Items]
Annual expected amortization expense through 2025	$ 16		$ 16

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IDENTIFIED INTANGIBLE ASSETS, NET - Antennae Leases (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
2017	$ 16
2018	16
2019	16
2020	16
2021	16
Thereafter	74
Total	$ 154	$ 374

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MORTGAGE NOTES PAYABLE, NET - Summary (Details) - USD ($) $ in Thousands		1 Months Ended	2 Months Ended	6 Months Ended
	Jan. 01, 2016	Mar. 31, 2016	Feb. 29, 2016	Jun. 30, 2016	Dec. 31, 2015
Participating Mortgage Loans [Line Items]
Outstanding Borrowings				$ 541,561	$ 595,384
Premium (Discount)				2,432	2,674
Deferred finance costs, net				(5,720)	(6,513)
Carrying Value				$ 538,273	591,545
LIBOR
Participating Mortgage Loans [Line Items]
Basis spread on variable rate		2.25%	2.00%
Extension period of variable interest rate	1 year
Revolving credit facility | LIBOR
Participating Mortgage Loans [Line Items]
Basis spread on variable rate				0.4651%
Vista Apartment Homes
Participating Mortgage Loans [Line Items]
Outstanding Borrowings				$ 15,398	15,573
Premium (Discount)				0	0
Deferred finance costs, net				(197)	(216)
Carrying Value				$ 15,201	15,357
Annual Interest Rate				2.76%
Average Monthly Debt Service				$ 65
Average Monthly Escrow				16
Cannery Lofts
Participating Mortgage Loans [Line Items]
Outstanding Borrowings				8,065	8,148
Premium (Discount)				0	0
Deferred finance costs, net				(116)	(131)
Carrying Value				$ 7,949	8,017
Annual Interest Rate				3.77%
Average Monthly Debt Service				$ 40
Average Monthly Escrow				26
Deerfield
Participating Mortgage Loans [Line Items]
Outstanding Borrowings				10,439	10,517
Premium (Discount)				0	0
Deferred finance costs, net				(142)	(159)
Carrying Value				$ 10,297	10,358
Annual Interest Rate				4.66%
Average Monthly Debt Service				$ 54
Average Monthly Escrow				29
The Ivy at Clear Creek
Participating Mortgage Loans [Line Items]
Outstanding Borrowings				0	8,431
Premium (Discount)				0	0
Deferred finance costs, net				0	(136)
Carrying Value				0	8,295
Trailpoint at the Woodlands
Participating Mortgage Loans [Line Items]
Outstanding Borrowings				18,852	19,013
Premium (Discount)				0	0
Deferred finance costs, net				(240)	(257)
Carrying Value				$ 18,612	18,756
Annual Interest Rate				2.88%
Average Monthly Debt Service				$ 69
Average Monthly Escrow				67
Verona Apartment Homes
Participating Mortgage Loans [Line Items]
Outstanding Borrowings				22,176	22,402
Premium (Discount)				0	0
Deferred finance costs, net				(148)	(179)
Carrying Value				$ 22,028	22,223
Annual Interest Rate				3.60%
Average Monthly Debt Service				$ 106
Average Monthly Escrow				41
Skyview Apartment Homes
Participating Mortgage Loans [Line Items]
Outstanding Borrowings				17,907	18,089
Premium (Discount)				0	0
Deferred finance costs, net				(123)	(148)
Carrying Value				$ 17,784	17,941
Annual Interest Rate				3.60%
Average Monthly Debt Service				$ 85
Average Monthly Escrow				21
The Nesbit Palisades
Participating Mortgage Loans [Line Items]
Outstanding Borrowings				20,298	20,298
Premium (Discount)				0	0
Deferred finance costs, net				(290)	(309)
Carrying Value				$ 20,008	19,989
Annual Interest Rate				2.42%
Average Monthly Debt Service				$ 59
Average Monthly Escrow				54
Maxwell Townhomes
Participating Mortgage Loans [Line Items]
Outstanding Borrowings				13,728	13,850
Premium (Discount)				0	0
Deferred finance costs, net				(152)	(167)
Carrying Value				$ 13,576	13,683
Annual Interest Rate				4.32%
Average Monthly Debt Service				$ 71
Average Monthly Escrow				63
Fieldstone
Participating Mortgage Loans [Line Items]
Outstanding Borrowings				0	15,332
Premium (Discount)				0	0
Deferred finance costs, net				0	(37)
Carrying Value				0	15,295
Pinehurst
Participating Mortgage Loans [Line Items]
Outstanding Borrowings				4,040	4,111
Premium (Discount)				0	0
Deferred finance costs, net				0	0
Carrying Value				$ 4,040	4,111
Annual Interest Rate				2.97%
Average Monthly Debt Service				$ 23
Average Monthly Escrow				12
Pheasant Run
Participating Mortgage Loans [Line Items]
Outstanding Borrowings				6,250	6,250
Premium (Discount)				71	100
Deferred finance costs, net				(15)	(20)
Carrying Value				$ 6,306	6,330
Annual Interest Rate				5.95%
Average Monthly Debt Service				$ 31
Average Monthly Escrow				15
Retreat of Shawnee
Participating Mortgage Loans [Line Items]
Outstanding Borrowings				12,993	13,090
Premium (Discount)				124	164
Deferred finance costs, net				(33)	(44)
Carrying Value				$ 13,084	13,210
Annual Interest Rate				5.58%
Average Monthly Debt Service				$ 78
Average Monthly Escrow				28
Conifer Place
Participating Mortgage Loans [Line Items]
Outstanding Borrowings				0	27,074
Premium (Discount)				0	0
Deferred finance costs, net				0	0
Carrying Value				0	27,074
Evergreen at Coursey Place
Participating Mortgage Loans [Line Items]
Outstanding Borrowings				27,330	27,548
Premium (Discount)				112	123
Deferred finance costs, net				(107)	(120)
Carrying Value				$ 27,335	27,551
Annual Interest Rate				5.07%
Average Monthly Debt Service				$ 154
Average Monthly Escrow				48
Pines of York
Participating Mortgage Loans [Line Items]
Outstanding Borrowings				15,134	15,267
Premium (Discount)				(331)	(363)
Deferred finance costs, net				(63)	(69)
Carrying Value				$ 14,740	14,835
Annual Interest Rate				4.46%
Average Monthly Debt Service				$ 80
Average Monthly Escrow				37
The Estates at Johns Creek
Participating Mortgage Loans [Line Items]
Outstanding Borrowings				50,000	50,000
Premium (Discount)				0	0
Deferred finance costs, net				(465)	(526)
Carrying Value				$ 49,535	49,474
Annual Interest Rate				3.38%
Average Monthly Debt Service				$ 220
Average Monthly Escrow				102
Chisholm Place
Participating Mortgage Loans [Line Items]
Outstanding Borrowings				11,587	11,587
Premium (Discount)				0	0
Deferred finance costs, net				(153)	(163)
Carrying Value				$ 11,434	11,424
Annual Interest Rate				2.86%
Average Monthly Debt Service				$ 39
Average Monthly Escrow				38
Perimeter Circle
Participating Mortgage Loans [Line Items]
Outstanding Borrowings				17,478	17,657
Premium (Discount)				0	0
Deferred finance costs, net				(172)	(202)
Carrying Value				$ 17,306	17,455
Annual Interest Rate				3.42%
Average Monthly Debt Service				$ 81
Average Monthly Escrow				53
Perimeter 5550
Participating Mortgage Loans [Line Items]
Outstanding Borrowings				13,795	13,935
Premium (Discount)				0	0
Deferred finance costs, net				(143)	(167)
Carrying Value				$ 13,652	13,768
Annual Interest Rate				3.42%
Average Monthly Debt Service				$ 64
Average Monthly Escrow				41
Aston at Cinco Ranch
Participating Mortgage Loans [Line Items]
Outstanding Borrowings				23,572	23,772
Premium (Discount)				0	0
Deferred finance costs, net				(299)	(328)
Carrying Value				$ 23,273	23,444
Annual Interest Rate				4.34%
Average Monthly Debt Service				$ 120
Average Monthly Escrow				63
Sunset Ridge 1
Participating Mortgage Loans [Line Items]
Outstanding Borrowings				19,913	20,121
Premium (Discount)				295	329
Deferred finance costs, net				(234)	(261)
Carrying Value				$ 19,974	20,189
Annual Interest Rate				4.58%
Average Monthly Debt Service				$ 113
Average Monthly Escrow				91
Sunset Ridge 2
Participating Mortgage Loans [Line Items]
Outstanding Borrowings				2,975	3,002
Premium (Discount)				40	45
Deferred finance costs, net				(30)	(34)
Carrying Value				$ 2,985	3,013
Annual Interest Rate				4.54%
Average Monthly Debt Service				$ 16
Average Monthly Escrow				0
Calloway at Las Colinas
Participating Mortgage Loans [Line Items]
Outstanding Borrowings				35,414	35,740
Premium (Discount)				0	0
Deferred finance costs, net				(339)	(372)
Carrying Value				$ 35,075	35,368
Annual Interest Rate				3.87%
Average Monthly Debt Service				$ 171
Average Monthly Escrow				113
South Lamar Village
Participating Mortgage Loans [Line Items]
Outstanding Borrowings				12,560	12,682
Premium (Discount)				0	0
Deferred finance costs, net				(158)	(184)
Carrying Value				$ 12,402	12,498
Annual Interest Rate				3.64%
Average Monthly Debt Service				$ 59
Average Monthly Escrow				46
Heritage Pointe
Participating Mortgage Loans [Line Items]
Outstanding Borrowings				26,280	26,280
Premium (Discount)				0	0
Deferred finance costs, net				(348)	(370)
Carrying Value				$ 25,932	25,910
Annual Interest Rate				2.35%
Average Monthly Debt Service				$ 89
Average Monthly Escrow				44
Yorba Linda
Participating Mortgage Loans [Line Items]
Outstanding Borrowings				67,500	67,500
Premium (Discount)				0	0
Deferred finance costs, net				(761)	(860)
Carrying Value				$ 66,739	66,640
Annual Interest Rate				2.22%
Average Monthly Debt Service				$ 158
Average Monthly Escrow				0
Villages at Bonita Glen
Participating Mortgage Loans [Line Items]
Outstanding Borrowings				27,089	27,265
Premium (Discount)				2,121	2,276
Deferred finance costs, net				(364)	(391)
Carrying Value				$ 28,846	29,150
Annual Interest Rate				5.33%
Average Monthly Debt Service				$ 152
Average Monthly Escrow				38
Stone Ridge
Participating Mortgage Loans [Line Items]
Outstanding Borrowings				5,288	5,350
Premium (Discount)				0	0
Deferred finance costs, net				(142)	(153)
Carrying Value				$ 5,146	5,197
Annual Interest Rate				2.33%
Average Monthly Debt Service				$ 21
Average Monthly Escrow				17
The Westside Apartments
Participating Mortgage Loans [Line Items]
Outstanding Borrowings				23,000	23,000
Premium (Discount)				0	0
Deferred finance costs, net				(273)	(351)
Carrying Value				$ 22,727	22,649
Annual Interest Rate				2.42%
Average Monthly Debt Service				$ 61
Average Monthly Escrow				0
Tech Center Square
Participating Mortgage Loans [Line Items]
Outstanding Borrowings				12,500	12,500
Premium (Discount)				0	0
Deferred finance costs, net				(213)	(159)
Carrying Value				$ 12,287	$ 12,341
Annual Interest Rate				3.05%
Average Monthly Debt Service				$ 53
Average Monthly Escrow				$ 25

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MORTGAGE NOTES PAYABLE, NET - Annual Principal Payments (Details) $ in Thousands	Jun. 30, 2016 USD ($)
Debt Disclosure [Abstract]
2017	$ 11,469
2018	49,794
2019	46,963
2020	114,707
2021	89,006
Thereafter	229,622
Total	$ 541,561

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MORTGAGE NOTES PAYABLE, NET - Amortization of Fair Value Adjustments (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Debt Disclosure [Abstract]
2017	$ 482
2018	401
2019	336
2020	331
2021	276
Thereafter	606
Amortization of fair value adjustments	$ 2,432	$ 2,674

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MORTGAGE NOTES PAYABLE, NET - Deferred Financing Costs (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Debt Disclosure [Abstract]
2017	$ 1,402
2018	1,271
2019	1,089
2020	850
2021	469
Thereafter	639
Deferred financing costs, net	$ 5,720	$ 6,513

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MORTGAGE NOTES PAYABLE, NET - Narrative (Details) - USD ($)	1 Months Ended	2 Months Ended	3 Months Ended		6 Months Ended
	Mar. 31, 2016	Feb. 29, 2016	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015	Dec. 27, 2013
Guarantor Obligations [Line Items]
Restricted cash related to escrow deposits			$ 6,400,000		$ 6,400,000		$ 10,000,000
Renovations completed			734,028,000		734,028,000		775,239,000
Amortization of deferred financing costs					1,232,000	$ 906,000
Accumulated amortization, deferred finance costs			2,700,000		2,700,000		$ 2,400,000
U.S. Bank
Guarantor Obligations [Line Items]
Earn-out holdback allowed when criteria are met								$ 29,700,000
Amount available to draw			6,700,000		$ 6,700,000
LIBOR
Guarantor Obligations [Line Items]
Basis spread on variable rate	2.25%	2.00%
LIBOR | Revolving credit facility
Guarantor Obligations [Line Items]
Basis spread on variable rate					0.4651%
The Estates at Johns Creek
Guarantor Obligations [Line Items]
Renovations completed			6,900,000		$ 6,900,000
Payment guarantee | U.S. Bank
Guarantor Obligations [Line Items]
Guaranty for completion and payment of costs of completion (no less than)								$ 6,500,000
Payment guarantee | The Estates at Johns Creek
Guarantor Obligations [Line Items]
Guaranty for completion and payment of costs of completion (no less than)			7,000,000.0		7,000,000.0
Acquisitions of rental property | Interest expense
Guarantor Obligations [Line Items]
Increase (decrease) in interest expense due to fair value adjustments			(122,000)	$ (184,000)	(242,000)	(374,000)
Covenants included in mortgage for Yorba Linda
Guarantor Obligations [Line Items]
Earn-out holdback allowed when criteria are met			7,500,000		7,500,000
Mortgages | Interest expense
Guarantor Obligations [Line Items]
Amortization of deferred financing costs			$ 513,000	$ 361,000	$ 1,012,000	$ 719,000

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CREDIT FACILITY - Summary of Revolving Credit Facilities (Details) - USD ($) $ in Thousands	1 Months Ended	2 Months Ended	3 Months Ended		6 Months Ended
	Mar. 31, 2016	Feb. 29, 2016	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Line of Credit Facility [Line Items]
Credit facility			$ 5,394		$ 5,394		$ 21,894
LIBOR
Line of Credit Facility [Line Items]
Basis spread on variable rate	2.25%	2.00%
Revolving credit facility | LIBOR
Line of Credit Facility [Line Items]
Basis spread on variable rate					0.4651%
Revolving credit facility | Bank of America
Line of Credit Facility [Line Items]
Credit facility			5,394		$ 5,394		$ 21,894
Line of Credit Facility, Current Availability			$ 15,500		$ 15,500
Line of Credit Facility, Current Interest Rate			3.47%		3.47%
Line of Credit Facility, Weighted Average Interest Rate			3.40%	3.19%	3.43%	3.21%
Basis spread on variable rate					3.00%

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CREDIT FACILITY - Narrative (Details) - USD ($)		3 Months Ended		6 Months Ended
	Dec. 02, 2011	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Line of Credit Facility [Line Items]
Satisfaction of coverage requirements from date of advance, term	36 months
Deferred financing costs, net		$ 5,720,000		$ 5,720,000		$ 6,513,000
Amortization of deferred financing costs				1,232,000	$ 906,000
Estimated amortization of deferred financing costs, current		1,402,000		1,402,000
Estimated amortization of deferred financing costs, in two years		1,271,000		1,271,000
Principal payments required by the credit facility in the next 12 months		11,469,000		11,469,000
Revolving credit facility
Line of Credit Facility [Line Items]
Principal payments required by the credit facility in the next 12 months		5,400,000		5,400,000
Principal payments required by the credit facility, thereafter		0		0
Bank of America
Line of Credit Facility [Line Items]
Estimated amortization of deferred financing costs, current		169,000		169,000
Estimated amortization of deferred financing costs, thereafter		0		0
Bank of America | Interest expense
Line of Credit Facility [Line Items]
Amortization of deferred financing costs		150,000	$ 131,000	220,000	187,000
Bank of America | Prepaid expenses and other assets
Line of Credit Facility [Line Items]
Deferred financing costs, net		169,000		169,000		$ 389,000
Bank of America | Revolving credit facility
Line of Credit Facility [Line Items]
Line of credit facility collateral amount		42,000,000		42,000,000
Weighted average borrowings		$ 11,600,000	$ 9,200,000	$ 13,300,000	$ 6,400,000
Extension fee	0.25%
Minimum tangible net worth to maintain, percent of outstanding principal amount of credit facility	200.00%
Minimum tangible net worth to maintain	$ 20,000,000.0
Minimum unencumbered liquid assets to maintain, market value	$ 5,000,000.0
Minimum unencumbered liquid assets to maintain, market value, percent of outstanding principal amount of credit facility	20.00%

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ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Accumulated Other Comprehensive Income [Rollforward]
Beginning balance			$ 425,246
Reclassification adjustment for realized loss on derivative due to sale	$ 0	$ 0	72	$ 0
Ending balance	407,040		407,040
Net unrealized loss on derivatives
Accumulated Other Comprehensive Income [Rollforward]
Beginning balance			(440)
Unrealized loss on designated derivatives			(23)
Ending balance	$ (391)		$ (391)

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS - Narrative (Details) - USD ($)	1 Months Ended	3 Months Ended	6 Months Ended
	Mar. 31, 2015	Jun. 30, 2016	Jun. 30, 2016	Jun. 30, 2015
Related Party Transaction [Line Items]
Insurance pool, amount of general liability losses covered		$ 50,000	$ 50,000
Payment into insurance pools		1,700,000	1,700,000
Terms of agreement	1 year
RAI
Related Party Transaction [Line Items]
Insurance pool, amount of property losses covered		2,500,000.0	2,500,000.0
Catastrophic insurance, amount of losses covered		$ 140,000,000.0	$ 140,000,000.0
Advisor
Related Party Transaction [Line Items]
Terms of agreement, renewal period	1 year
Percentage acquisition fee paid to advisor	2.00%
Monthly asset management fee	0.083%
Percentage annual asset management fee	1.00%
Disposition fee				50.00%
Debt disposition fee, as a percentage of the contract sales price	2.75%
Debt financing fee	0.50%
Manager
Related Party Transaction [Line Items]
Property management fee			4.50%
Occupancy			75.00%
Term for which Manager receives minimum property management fee if properties are less than 75% occupied			12 months
Construction management fee			5.00%
Debt servicing fee			2.75%

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS - Schedule of Transactions (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Related Party Transaction [Line Items]
Due from related parties	$ 2,004		$ 2,004		$ 1,421
Due to related parties	1,477		1,477		1,185
RAI and affiliates | Insurance fund held in escrow
Related Party Transaction [Line Items]
Due from related parties	2,004		2,004		1,421
Advisor | Operating expense reimbursements
Related Party Transaction [Line Items]
Due to related parties	0		0		286
Advisor | Acquisition fees
Related Party Transaction [Line Items]
Fees earned / expenses paid to related parties	0	$ 3,687	8	$ 5,169
Advisor | Asset management fees
Related Party Transaction [Line Items]
Fees earned / expenses paid to related parties	2,674	2,461	5,381	4,709
Advisor | Disposition fees
Related Party Transaction [Line Items]
Fees earned / expenses paid to related parties	220	270	413	1,031
Advisor | Debt financing fees
Related Party Transaction [Line Items]
Fees earned / expenses paid to related parties	0	474	0	670
Advisor | Overhead allocation
Related Party Transaction [Line Items]
Fees earned / expenses paid to related parties	1,130	934	2,405	1,822
Advisor | Internal audit
Related Party Transaction [Line Items]
Fees earned / expenses paid to related parties	0	7	0	14
Resource Real Estate Opportunity Manager, LLC | Operating expense reimbursements
Related Party Transaction [Line Items]
Fees earned / expenses paid to related parties	62	76	130	143
Resource Real Estate Opportunity Manager, LLC | Property management fees
Related Party Transaction [Line Items]
Due to related parties	882		882		440
Fees earned / expenses paid to related parties	1,315	1,131	2,605	2,238
Resource Real Estate Opportunity Manager, LLC | Other reimbursements
Related Party Transaction [Line Items]
Due to related parties	581		581		459
Resource Real Estate Opportunity Manager, LLC | Construction management fees
Related Party Transaction [Line Items]
Fees earned / expenses paid to related parties	250	483	492	839
Resource Real Estate Opportunity Manager, LLC | Information technology fees
Related Party Transaction [Line Items]
Fees earned / expenses paid to related parties	107	83	216	166
Resource Real Estate Opportunity Manager, LLC | Debt servicing fees
Related Party Transaction [Line Items]
Fees earned / expenses paid to related parties	10	20	14	25
Other
Related Party Transaction [Line Items]
Due to related parties	14		14		$ 0
Ledgewood
Related Party Transaction [Line Items]
Fees earned / expenses paid to related parties	20	83	30	144
Graphic Images
Related Party Transaction [Line Items]
Fees earned / expenses paid to related parties	$ 60	$ 19	$ 60	$ 22

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EQUITY - Preferred Stock (Details) - $ / shares	Jun. 30, 2016	Dec. 31, 2015
Equity [Abstract]
Preferred stock, authorized (in shares)	10,000,000	10,000,000
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, issued (in shares)	0	0
Preferred stock, outstanding (in shares)	0	0

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EQUITY - Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Class of Stock [Line Items]
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Shares Issued (in shares)	73,674,067	72,333,652
Shares redeemed (in shares)	(2,178,618)
Total shares outstanding at end of period	71,495,449
Gross Proceeds	$ 712,114
Shares issued through private offering
Class of Stock [Line Items]
Shares Issued (in shares)	1,263,727
Gross Proceeds	$ 12,582
Shares issued through primary public offering
Class of Stock [Line Items]
Shares Issued (in shares)	62,485,461
Gross Proceeds	$ 622,077
Shares issued through primary public offering | Common Stock | Advisor
Class of Stock [Line Items]
Shares issued to the Advisor (in shares)	276,056
Shares issued through stock distributions
Class of Stock [Line Items]
Shares Issued (in shares)	2,132,266
Gross Proceeds	$ 0
Shares issued through distribution reinvestment plan
Class of Stock [Line Items]
Shares Issued (in shares)	7,777,113
Gross Proceeds, distribution reinvestment plan	$ 77,300
Advisor
Class of Stock [Line Items]
Shares Issued (in shares)	15,500
Shares converted (in shares)	4,500
Gross Proceeds	$ 155

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EQUITY - Convertible Stock (Details)	6 Months Ended
	Jun. 30, 2016 Event $ / shares shares	Dec. 31, 2015 $ / shares shares
Equity [Abstract]
Convertible stock shares outstanding (in shares)	50,000	50,000
Convertible stock, par value (in dollars per share) | $ / shares	$ 0.01	$ 0.01
Convertible stock held by advisor and affiliated persons (in shares)	49,063
Convertible stock held by outside investors (in shares)	937
Percentage on original share price	100.00%
Percentage non-compounded annual return, option one	10.00%
Aggregate percentage return	10.00%
Number of triggering events | Event	2
Conversion ratio	0.00002
Common stock, convertible, triggering event, if lesser of, option one	25.00%
Common stock, convertible, triggering event, if lesser of, option two	15.00%
Percentage non-compounded annual return, option two	6.00%

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EQUITY - Redemption of Securities (Details)	3 Months Ended	6 Months Ended
	Jun. 30, 2016 shares	Jun. 30, 2016 shares
Equity [Abstract]
Common share redemptions (in shares)	1,116,740	1,462,083
Percentage of weighted-average number of outstanding shares during the 12-month period immediately prior to the effective date of the redemption that company will not redeem in excess of (in excess of 5%)	5.00%	5.00%
Period of time shares are outstanding prior to the effective date of redemption		12 months
Cash available for redemption, percentage of previous fiscal year operating cash flow		1.00%
Number of days' notice required to suspend, terminate or amend share redemption program		30 days

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EQUITY - Distributions (Details) - USD ($) $ / shares in Units, $ in Thousands							6 Months Ended	24 Months Ended
	Jun. 30, 2016	Jun. 03, 2016	Apr. 29, 2016	Mar. 31, 2016	Feb. 29, 2016	Jan. 29, 2016	Jun. 30, 2016	Dec. 31, 2015
Securities Financing Transaction [Line Items]
Total Aggregate Distribution							$ 21,512
Aggregate Cash Distribution							7,105
Distributions Invested in Shares of Common Stock							$ 14,407	$ 51,900
Per Common Share (in dollars per share)							$ 0.3
Record date of January 28, 2016
Securities Financing Transaction [Line Items]
Total Aggregate Distribution						$ 3,574
Aggregate Cash Distribution						1,151
Distributions Invested in Shares of Common Stock						$ 2,423
Per Common Share (in dollars per share)						$ 0.05
Record date of February 26, 2016
Securities Financing Transaction [Line Items]
Total Aggregate Distribution					$ 3,585
Aggregate Cash Distribution					1,167
Distributions Invested in Shares of Common Stock					$ 2,418
Per Common Share (in dollars per share)					$ 0.05
Record date of March 30, 2016
Securities Financing Transaction [Line Items]
Total Aggregate Distribution				$ 3,587
Aggregate Cash Distribution				1,172
Distributions Invested in Shares of Common Stock				$ 2,415
Per Common Share (in dollars per share)				$ 0.05
Record date of April 28, 2016
Securities Financing Transaction [Line Items]
Total Aggregate Distribution			$ 3,595
Aggregate Cash Distribution			1,181
Distributions Invested in Shares of Common Stock			$ 2,414
Per Common Share (in dollars per share)			$ 0.050
Record date of May 27, 2016
Securities Financing Transaction [Line Items]
Total Aggregate Distribution		$ 3,606
Aggregate Cash Distribution		1,226
Distributions Invested in Shares of Common Stock		$ 2,380
Per Common Share (in dollars per share)		$ 0.050
Record date of June 29, 2016
Securities Financing Transaction [Line Items]
Total Aggregate Distribution	$ 3,565
Aggregate Cash Distribution	1,208
Distributions Invested in Shares of Common Stock	$ 2,357
Per Common Share (in dollars per share)	$ 0.050

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FAIR VALUE MEASURES AND DISCLOSURES - Assets Measured at Fair Value on a Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate caps	$ 5	$ 32
Assets, fair value	5	32
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate caps	0	0
Assets, fair value	0	0
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate caps	5	32
Assets, fair value	5	32
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate caps	0	0
Assets, fair value	$ 0	$ 0

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FAIR VALUE MEASURES AND DISCLOSURES - Schedule of Carrying and Fair Values (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Carrying Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loan held for investment, net	$ 764	$ 757
Preferred equity investment	0	3,886
Mortgage notes payable- outstanding borrowings	(541,561)	(595,384)
Mortgage note payable- included in other liabilities associated with rental properties held for sale	0	(16,443)
Credit facility	(5,394)	(21,894)
Estimated Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loan held for investment, net	1,151	1,151
Preferred equity investment	0	3,908
Mortgage notes payable- outstanding borrowings	(535,783)	(573,693)
Mortgage note payable- included in other liabilities associated with rental properties held for sale	0	(16,597)
Credit facility	$ (5,394)	$ (21,894)

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DERIVATIVES AND HEDGING ACTIVITIES (Details)	3 Months Ended	6 Months Ended
	Jun. 30, 2016 USD ($) derivative	Jun. 30, 2016 USD ($) derivative	Dec. 31, 2015 USD ($)
Interest Rate Caps
Derivatives, Fair Value [Line Items]
Asset Derivatives, Fair Value	$ 5,000	$ 5,000	$ 32,000
Cash flow hedges | The Ivy at Clear Creek
Derivatives, Fair Value [Line Items]
Loss due to hedge ineffectiveness	$ 72,388	$ 72,388
Cash flow hedges | Interest Rate Caps
Derivatives, Fair Value [Line Items]
Number of Instruments (over three years, in derivatives) | derivative	8	8
Notional Amount	$ 119,863,000	$ 119,863,000

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OPERATING EXPENSE LIMITATION WAIVER (Details)	6 Months Ended
	Jun. 30, 2016
OPERATING EXPENSE LIMITATION WAIVER [Abstract]
Percent of average invested assets	2.00%
Net income of operating expense, percent	25.00%
Operating expense limitation, term	1 year

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SUBSEQUENT EVENTS (Details) - USD ($) $ / shares in Units, $ in Millions	Jul. 21, 2016	Jul. 08, 2016	Jun. 30, 2016
The Nesbit Palisades
Subsequent Event [Line Items]
Contract Sales Price			$ 26.6
Subsequent event
Subsequent Event [Line Items]
Dividends declared (in dollars per share)	$ 0.05
Subsequent event | The Nesbit Palisades | Alpharetta, Georgia
Subsequent Event [Line Items]
Contract Sales Price		$ 45.5