10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

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

For the fiscal year ended December 31, 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)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Name of exchange on which registered
None	None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.01 per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(a) of the Act. Yes o No þ

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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

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 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

There is no established market for the Registrant's shares of common stock. On March 28, 2017, the board of directors of the Registrant approved an estimated value per share of the Registrant’s common stock of $10.94. For a full description of the methodologies used to calculate the Registrant’s estimated value per share as of December 31, 2016, see Part II, Item 5, “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities - Market Information.” There were approximately 71,181,418 shares of common stock held by non-affiliates at June 30, 2016, the last business day of the registrant's most recently completed second fiscal quarter.

As of March 21, 2017, there were 72,434,577 outstanding shares of common stock of Resource Real Estate Opportunity REIT, Inc.

Registrant incorporates by reference portions of the Resource Real Estate Opportunity REIT, Inc. Definitive Proxy Statement for the 2017 Annual Meeting of Stockholders (Items 10, 11, 12, 13, and 14 of Part III).

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

INDEX TO ANNUAL REPORT

ON FORM 10-K

		PAGE
	Forward Looking Statements
PART 1
Item 1.	Business	3
Item 1A.	Risk Factors	6
Item 1B.	Unresolved Staff Comments	31
Item 2.	Properties	32
Item 3.	Legal Proceedings	34
Item 4.	Mine Safety Disclosures	34
PART II
Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	35
Item 6	Selected Financial Data	43
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	44
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	65
Item 8.	Financial Statements and Supplementary Data	65
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	65
Item 9A.	Controls and Procedures	65
Item 9B.	Other Information	66
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	67
Item 11.	Executive Compensation	67
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters	67
Item 13.	Certain Relationships and Related Transactions, and Director Independence	67
Item 14.	Principal Accounting Fees and Services	67
PART IV.
Item 15.	Exhibits and Financial Statement Schedules	68
SIGNATURES		70

Forward-Looking Statements

Certain statements included in this Annual Report on Form 10-K 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.  Such statements are subject to the risks and uncertainties more particularly described in Item 1A of this Annual Report on Form 10-K. These risks and uncertainties could cause actual results to differ materially.  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 I

ITEM 1. BUSINESS

General

Resource Real Estate Opportunity REIT, Inc. is a Maryland corporation that was formed on June 3, 2009. As used herein, the terms “we,” “our” and “us” refer to Resource Real Estate Opportunity REIT, Inc., a Maryland corporation, and Resource Real Estate Opportunity OP, LP, a Delaware limited partnership, and to its subsidiaries. We focus primarily on acquiring under performing or distressed real estate and real estate loans that are being sold at discounted prices. We have elected to be taxed as a real estate investment trust, or REIT, and to operate as a REIT beginning with our taxable year ended December 31, 2010. Our objectives are to preserve stockholder capital, realize growth in the value of our investments, increase cash distributions through increased cash flow from operations or asset sales, and enable stockholders to realize a return on their investments. As of December 31, 2016, we owned 31 multifamily properties, as described further in “Item 2. Properties” below, and one performing loan. In the future, we may reinvest proceeds from property sales to purchase discounted U.S. commercial real estate and real estate-related debt that has been specifically discounted due to the effects of macro-economic events and high levels of leverage on U.S. commercial real estate, including properties that may benefit from extensive renovations that may increase their long-term values.

We are externally managed by Resource Real Estate Opportunity Advisor, LLC, which we refer to as our Advisor, an indirect wholly owned subsidiary of Resource America, Inc. ("RAI"). To provide its services, the Advisor draws upon RAI, its management team and their collective investment experience.

On September 8, 2016, RAI was acquired by C-III Capital Partners LLC ("C-III"), a leading commercial real estate services company engaged in a broad range of activities. C-III controls our Advisor, and Resource Real Estate Opportunity Manager, LLC, our property manager. C-III also controls all of the shares of our common stock held by RAI.

Our Offerings

On September 15, 2009, we commenced a private placement offering to accredited investors for the sale of up to 5,000,000 shares of common stock at a price of $10 per share, with discounts available to certain categories of purchasers.  The offering, which closed on June 9, 2010, resulted in aggregate gross proceeds of $12.8 million, ($11.3 million, net of syndication costs) and resulted in the issuance of 1,283,727 common shares, including 20,000 shares purchased by our Advisor. Also, in conjunction with the private offering, we offered 5,000 shares of convertible stock at a price of $1 per share.  Investors acquired 937 shares of the convertible stock; the Advisor purchased the remaining 4,063 shares.

On June 16, 2010, we commenced our initial primary public offering of up to 75,000,000 shares and a public offering of up to an additional 7,500,000 shares pursuant to our distribution reinvestment plan. An affiliate of our Advisor, Resource Securities, Inc., or Resource Securities, served as the dealer manager. We offered shares of our common stock in our primary offering for $10 per share, with discounts available to certain categories of investors. 

The primary portion of our initial public offering closed on December 13, 2013, having raised aggregate gross proceeds of $633.1 million through the issuance of 63,647,084 shares of our common stock, including 276,056 shares purchased by our Advisor and 1,161,623 shares sold pursuant to our distribution reinvestment plan.  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 shares pursuant to our distribution reinvestment plan at a purchase price equal to our current estimated value per share. During the years ended December 31, 2016, 2015, and 2014, we issued in total an additional 7,916,445 shares through our distribution reinvestment plan for gross proceeds of $80.4 million.

Our Business Strategy

Our business strategy has a particular focus on multifamily assets, although we may also purchase interests in other types of commercial property assets consistent with our investment objectives. 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 December 31, 2016, we currently hold approximately 35% of our total assets in category (i) and 65% of our total assets in category (ii). We may make adjustments to our portfolio based on real estate market conditions and

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investment opportunities. We will not forego a potential investment because it does not precisely fit our expected portfolio composition. We continually monitor the portfolio of optimized, renovated properties seeking sales opportunities that will maximize our return. We generally expect to reinvest the return of capital from such sales and to distribute gains from such sales to our stockholders in the form of distributions.

We anticipate providing our stockholders with a liquidity event or events by some combination of the following: (i) liquidating all, or substantially all, of our assets and distributing the net proceeds to stockholders, or (ii) listing our shares for trading on a national securities exchange. Our Board of Directors anticipates evaluating a liquidity event no later than six years after termination of our primary offering (which occurred in December 2013), subject to prevailing market conditions. In making the decision to liquidate or apply for listing of our shares, our directors will determine whether liquidating our assets or listing our shares will result in a greater value for our stockholders. If we do not begin the process of liquidating our assets or listing our shares by December 2019, or otherwise determined a future date for such action, upon the request of stockholders holding 10% or more of our outstanding shares of common stock, our charter requires that we hold a stockholders meeting to vote on a proposal for our orderly liquidation unless a majority of our Board of Directors and a majority of our independent directors vote to defer the meeting beyond December 2019.

Our Operating Policies and Strategies

Our Advisor has the primary responsibility for the selection of investments, the negotiation of the acquisition of these investments, and financing, asset-management and disposition decisions. A majority of our Board of Directors and a majority of the Conflicts Committee, which includes only our three independent directors, approve all proposed real estate property investments and certain significant real estate-related debt investments. Our Board of Directors meets regularly to monitor the execution of our investment strategies and our progress in achieving our investment objectives.

We may use leverage for our acquisitions in the form of both REIT level financing and individual investment financing. Such financing, both at the REIT level and at the individual investment level, may also be obtained from the seller of an investment. Although there is no limit on the amount we can borrow to acquire a single real estate investment, we may not leverage our assets with debt financing such that our total liabilities exceed 75% of the aggregate value of our assets unless a majority of our independent directors finds substantial justification for borrowing a greater amount.

Our Advisor and our Property Manager

Our Advisor manages our day-to-day operations and our portfolio of real estate investments, and provides asset management, marketing, investor relations, and other administrative services on our behalf, all subject to the supervision of our Board of Directors. Our Advisor has invested approximately $2.5 million in us and as of December 31, 2016, it owned 276,056 shares of our common stock and 31,769 shares of our convertible stock. Under certain circumstances, the convertible shares may be converted into shares of our common stock. As of December 31, 2016, our Advisor has granted 21,210 shares of its convertible stock to employees of RAI and its subsidiaries and affiliates. Of these shares, 2,353 have been forfeited and returned to the Advisor as of December 31, 2016. The outstanding shares vest ratably over three years, and 17,361 of these shares have vested as of December 31, 2016.

We have a management agreement with Resource Real Estate Opportunity Manager, LLC, an affiliate of our Advisor, or our Manager, to provide property management services, as applicable, for most of the properties or other real estate related assets, in each case where our Advisor is able to control the operational management of such properties. Our Manager may subcontract with an affiliate or third party to provide day-to-day property management, construction management and/or other property specific functions as applicable for the properties it manages. Our Manager also manages our real estate-related debt investments.

Resource Property Management, LLC, d/b/a “Resource Residential,” an affiliate of RAI, is a property management company that our Manager has subcontracted with to manage most of the real estate assets that we own. The senior managers and employees of Resource Residential, acting through our Manager, assist in providing property management as well as construction management services to us. Resource Residential is a subsidiary of US Residential Group LLC ("USRG"), a Dallas-based property manager that is a wholly owned subsidiary of C-III.

Distributions

During the year ended December 31, 2014, we paid aggregate distributions of $32.9 million, including $10.0 million of distributions paid in cash and $22.9 million of distributions reinvested in shares of our common stock through our distribution reinvestment plan.During the year ended December 31, 2015, we paid aggregate distributions of $42.2 million, including $13.2 million of distributions paid in cash and $29.0 million of distributions reinvested in shares of our common stock through our distribution reinvestment plan. During the year endedDecember 31, 2016, we paid aggregate distributions of $43.0 million,

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including $14.5 million of distributions paid in cash and $28.5 million of distributions reinvested through our distribution reinvestment plan, as follows (in thousands, except per share data):

Record Date	Per Common Share		Distribution Date	Distribution 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
July 28, 2016	0.05		July 29, 2016	2,359		1,215		3,574
August 30, 2016	0.05		August 31, 2016	2,363		1,222		3,585
September 29, 2016	0.05		September 30, 2016	2,351		1,220		3,571
October 28, 2016	0.05		October 31, 2016	2,348		1,234		3,582
November 29, 2016	0.05		November 30, 2016	2,343		1,249		3,592
December 29, 2016	0.05		December 30, 2016	2,326		1,263		3,589
	$	0.60		$	28,497	$	14,508	$	43,005

Cash distributions paid since our inception were as follows (in thousands, except per share data):

Fiscal Year Paid	Per Common Share		Distribution invested in shares of Common Stock		Net Cash Distribution		Total Aggregate Distribution
2012	$	0.15	$	1,052	$	841	$	1,893
2013	0.41		9,984		4,757		14,741
2014	0.48		22,898		9,959		32,857
2015	0.60		28,959		13,257		42,216
2016	0.60		28,497		14,508		43,005
	$	2.24	$	91,390	$	43,322	$	134,712

Since our formation, we have also declared a total of seven quarterly stock distributions of 0.015 shares each, two quarterly stock distributions of 0.0075 shares each, one quarterly stock distribution of 0.00585 shares each, and two quarterly stock distributions of 0.005 shares each of our common stock outstanding. In connection with these stock distributions, we have increased our accumulated deficit by $21.3 million in the aggregate as of December 31, 2016.

Competition

We believe that the current market for properties that meet our investment objectives is extremely competitive and many of our competitors have greater resources than we do. We believe that our multifamily communities are suitable for their intended purposes and adequately covered by insurance. There are a number of comparable properties located in the same submarkets that might compete with our properties. We compete with numerous other entities engaged in real estate investment activities, including individuals, corporations, banks and insurance company investment accounts, other REITs, real estate limited partnerships, the U.S. government and other entities, to acquire, manage and sell real estate properties and real estate related assets. Many of our expected competitors enjoy significant competitive advantages that result from, among other things, a lower cost of capital and enhanced operating efficiencies. In addition, the number of entities and the amount of funds competing for suitable investments may increase.

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Environmental

As an owner of real estate, we are subject to various environmental laws of federal, state and local governments. Compliance with existing laws has not had a material adverse effect on our financial condition or results of operations, and management does not believe it will have such an impact in the future. However, we cannot predict the impact of unforeseen environmental contingencies or new or changed laws or regulations on properties in which we hold an interest, or on properties that may be acquired directly or indirectly in the future.

Employees and Economic Dependency

We have no paid employees. The employees of our Advisor and its affiliates provide management, acquisition, advisory and certain administrative services for us. We are dependent on our Advisor and its affiliates for certain services that are essential to us, including the identification, evaluation, negotiation, purchase and disposition of properties and other investments; management of the daily operations of our portfolio; and other general and administrative responsibilities. In the event that these affiliated companies are unable to provide the respective services, we will be required to obtain such services from other sources.

Access to Company Information

We electronically file our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, proxy statement, Current Reports on Form 8-K and all amendments to those reports with the United States Securities and Exchange Commission (“SEC”). The public may read and copy any of the reports that are filed with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at (800)-SEC-0330. The SEC maintains an Internet site at www.sec.gov that contains reports, proxy and information statements and other information regarding issuers that file electronically.

We make available free of charge, the Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, proxy statement, Current Reports on Form 8-K and all amendments to those reports on our website, www.resourcereit.com, or by responding to requests addressed to our investor relations group. These reports are available as soon as reasonably practicable after such material is electronically filed or furnished to the SEC.

ITEM 1A.     RISK FACTORS

Below are some of the risks and uncertainties that could cause our actual results to differ materially from those presented in our forward-looking statements. The risks and uncertainties described below are not the only ones we face but do represent those risks and uncertainties that we believe are material to our business, operating results, prospects, and financial condition. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also harm our business.

Risks Related to an Investment in Us

There is no established public trading market for our shares; therefore, it will be difficult for you to sell your shares.

There is no current established public market for our shares and we currently have no plans to list our shares on a national securities exchange. Our charter limits your ability to transfer orsell your shares unless the prospective stockholder meets the applicable suitability and minimum purchase standards. Our charter also prohibits the ownership of more than 9.8% of our stock, unless exempted by our Board of Directors, which may inhibit large investors from desiring to purchase your shares. Moreover, our share redemption program includes numerous restrictions that limit your ability to sell your shares to us, and our Board of Directors may amend, suspend or terminate our share redemption program upon 30 days’ notice and without stockholder approval. Therefore, it will be difficult for you to sell your shares promptly or at all. If you are able to sell your shares, you would likely have to sell them at a substantial discount to their public offering price. It is also likely that your shares would not be accepted as the primary collateral for a loan. You should purchase our shares only as a long-term investment because of the illiquid nature of the shares.

Because of the concentration of a significant portion of our assets in three geographic areas, any adverse economic, real estate or business conditions in these areas could affect our operating results and our ability to make distributions to our stockholders.

As of December 31, 2016, our real estate investments in Texas, California and Georgia represented approximately 33%, 18% and 13% of the net book value of our rental properties, respectively. As a result, the geographic concentration of our portfolio makes it particularly susceptible to adverse economic developments in the Texas, California and Georgia real estate markets. Any adverse economic or real estate developments in these markets, such as business layoffs or downsizing, industry slowdowns,

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relocations of businesses, changing demographics and other factors, or any decrease in demand for multifamily rentals resulting from the local business climate, could adversely affect our operating results and our ability to make distributions to stockholders.

Because we are dependent upon our Advisor and its affiliates to conduct our operations, any adverse changes in the financial health of our Advisor or its affiliates or our relationship with them could hinder our operating performance and the return on our stockholders’ investment.

We are dependent on our Advisor to manage our operations and our portfolio of real estate assets. Our Advisor has a limited operating history and it depends largely upon the fees and other compensation that it receives from us in connection with the purchase, management and sale of assets to conduct its operations. Any adverse changes in the financial condition of our Advisor or our relationship with our Advisor could hinder its ability to successfully manage our operations and our portfolio of investments.

Our ability to achieve our investment objectives and to conduct our operations is dependent upon the performance of our Advisor, which is a subsidiary of our sponsor and its parent company, RAI. Our sponsor’s business is sensitive to trends in the general economy, as well as the commercial real estate and credit markets. To the extent that any decline in our sponsor’s revenues and operating results impacts the performance of our Advisor, our results of operations, and financial condition could also suffer.

The loss of or the inability to hire additional or replacement key real estate and debt finance professionals at Resource Real Estate, Inc. could delay or hinder implementation of our investment strategies, which could limit our ability to make distributions and decrease the value of your investment.

Our success depends to a significant degree upon the contributions of Alan Feldman, our Chief Executive Officer, and Kevin Finkel, our President, each of whom would be difficult to replace. Messrs. Feldman and Finkel may not remain associated with Resource Real Estate, Inc. (a subsidiary of RAI). If either of these persons were to cease their association with us, our operating results could suffer. We do not intend to maintain key person life insurance on any person.

We believe that our future success depends, in large part, upon Resource Real Estate and its affiliates’ ability to retain highly skilled managerial, operational and marketing professionals. Competition for such professionals is intense, and Resource Real Estate and its affiliates may be unsuccessful in attracting and retaining such skilled individuals. If Resource Real Estate loses or is unable to obtain the services of highly skilled professionals, our ability to implement our investment strategies could be delayed or hindered and the value of your investment may decline.

If we make distributions from sources other than our cash flow from operations, we will have fewer funds available for the acquisition of properties and your overall return may be reduced.

We will declare distributions when our Board of Directors determines we have sufficient cash flow. We generally expect to fund distributions from interest and rental income on investments, the maturity, payoff or settlement of investments and from strategic sales of loans, debt securities, properties and other assets. However, we may set distribution rates at levels we believe we will be able to cover with anticipated future cash flows from operating activities. In order to make these cash distributions, we may be required to use alternative funding sources.

Our organizational documents permit us to make distributions from any source. If we fund distributions from borrowings, sales of properties or offering proceeds, we will have less funds available for the acquisition of real estate and real estate-related assets and your overall return may be reduced. Further, to the extent distributions exceed our cash flow from operations, a stockholder’s basis in our stock will be reduced and, to the extent distributions exceed a stockholder’s basis, the stockholder may recognize capital gain. There is no limit on the amount we can fund distributions from sources other than from cash flows from operations.

During the year ended December 31, 2014, we paid aggregate distributions of $32.9 million, including $10.0 million of distributions paid in cash and $22.9 million of distributions reinvested in shares of our common stock through our distribution reinvestment plan.During the year ended December 31, 2015, we paid aggregate distributions of $42.2 million, including $13.2 million of distributions paid in cash and $29.0 million of distributions reinvested in shares of our common stock through our distribution reinvestment plan. During the year ended December 31, 2016, we paid aggregate cash distributions of $43.0 million including $14.5 million of distributions paid in cash and $28.5 million of distributions reinvested in our shares through our distribution reinvestment plan. Our net loss attributable to common stockholders for the year ended December 31, 2016 was $4.1 million and net cash provided by operating activities was $11.1 million. Our cumulative cash distributions and net loss attributable to common stockholders from inception through December 31, 2016 are $134.7 million and $104.6 million, respectively. We have funded our cumulative distributions, which includes net cash distributions and distributions reinvested by stockholders, with cash flow from operations, proceeds from disposal of real estate, and proceeds from debt financing. During 2016, distributions were

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funded as follows: 25.9% from operating activities and 74.1% from the proceeds of property dispositions. To the extent that we pay distributions from sources other than our cash flow from operating activities or gains 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.

The value of a share of our common stock has been diluted as a result of our payment of stock distributions and will be further diluted if we make additional stock distributions.

We have issued stock distributions to our stockholders and may continue to issue such stock distributions in the future. We seek to purchase assets that may have limited operating cash flows. While our objective is to acquire assets that appreciate in value, there can be no assurance that assets we acquire will appreciate in value. Therefore, investors who purchased shares early in our offering, as compared with later investors, received more shares for the same cash investment as a result of any stock distributions. Because they own more shares, upon a sale or liquidation of the company, these early investors will receive more sales proceeds or liquidating distributions relative to their invested capital compared to later investors. Furthermore, unless our assets appreciate in an amount sufficient to offset the dilutive effect of the prior stock distributions, the value per share for investors who purchased our stock later in the offering will be below the value per share of earlier investors.

Future interest rate increases in response to inflation may inhibit our ability to conduct our business and acquire or dispose of real property or real estate-related debt investments at attractive prices and your overall return may be reduced.

While we expect a significant amount of our leases to be short-term multifamily leases that will not be affected by inflation, we will be exposed to inflation risk with respect to income from any long-term leases on real property and from related real estate debt investments as these may constitute a source of our cash flows from operations. Although inflation has been generally low in recent years, high inflation may in the future tighten credit and increase prices. Further, if interest rates rise, such as during an inflationary period, the cost of acquisition capital to purchasers may also rise, which could adversely impact our ability to dispose of our assets at attractive sales prices. Should we be required to acquire, hold or dispose of our assets during a period of inflation, our overall return may be reduced.

Our rights and the rights of our stockholders to recover claims against our independent directors are limited, which could reduce your and our recovery against them if they negligently cause us to incur losses.

Maryland law provides that a director has no liability in that capacity if he performs his duties in good faith, in a manner he reasonably believes to be in our best interests and with the care that an ordinarily prudent person in a like position would use under similar circumstances. Our charter provides that no independent director shall be liable to us or our stockholders for monetary damages and that we will generally indemnify them for losses unless they are grossly negligent or engage in willful misconduct. As a result, you and we may have more limited rights against our independent directors than might otherwise exist under common law, which could reduce our and your recovery from these persons if they act in a negligent manner. In addition, we may be obligated to fund the defense costs incurred by our independent directors (as well as by our other directors, officers, employees (if we ever have employees) and agents) in some cases, which would decrease the cash otherwise available for distributions to you. The SEC takes the position that indemnification against liabilities arising under the Securities Act is against public policy and unenforceable.

We may change our targeted investments, our policies and our operations without stockholder consent.

We expect to allocate a majority of our portfolio to investments in multifamily rental properties and debt secured by multifamily rental properties, but we may also purchase investments in condominium, office, retail, industrial, mixed-use, hospitality and healthcare properties and other real estate asset classes throughout the United States. Also, we are not restricted as to the following:

• where we may acquire real estate investments;

• the amounts that may be invested in properties as compared with the amounts that we may invest in real estate-related debt investments or mortgage loans, each of which may be leveraged and will have differing risks and profit potential; or

• the amounts that may be invested in any one real estate investment (the greater the amounts invested in one asset, the greater the potential adverse effect on us if that asset is unprofitable).

Though this is our current target portfolio, we may make adjustments to our target portfolio based on real estate market conditions and investment opportunities, and we may change our targeted investments and investment guidelines at any time without the consent of our stockholders, which could result in our making investments that are different from, and possibly riskier

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than, the investments we currently intend to acquire. A change in our targeted investments or investment guidelines could adversely affect the value of our common stock and our ability to make distributions to you.

Our Board of Directors determines our major policies, including our policies regarding financing, growth, debt capitalization, REIT qualification and distributions. Our Board of Directors may amend or revise these and other policies without a vote of the stockholders. Under Maryland General Corporation Law and our charter, our stockholders have a right to vote only on limited matters. Our Board of Directors’ broad discretion in setting policies and our stockholders’ inability to exert control over those policies increases the uncertainty and risks you face as a stockholder.

Because the offering price in our distribution reinvestment plan offering exceeds our net tangible book value per share, investors in the offering will experience immediate dilution in the net tangible book value of their shares.

We are currently offering shares pursuant to our distribution reinvestment plan at $10.94 per share. Our current offering price exceeds our net tangible book value per share. Our net tangible book value per share is a rough approximation of value calculated as total book value of assets (exclusive of certain intangible items, including deferred financing costs) minus total liabilities, divided by the total number of shares of common stock outstanding. It assumes that the value of real estate assets diminishes predictably over time as shown through the depreciation and amortization of real estate investments. Real estate values have historically risen or fallen with market conditions. Net tangible book value is used generally as a conservative measure of net worth that we do not believe reflects our estimated value per share. It is not intended to reflect the value of our assets upon an orderly liquidation of the company in accordance with our investment objectives. Our net tangible book value reflects dilution in value of our common stock from the issue price as a result of (i) operating losses, which reflect accumulated depreciation and amortization of real estate investments, (ii) fees paid in connection with our initial public offering, including selling commissions and marketing fees re-allowed by our dealer manager to participating broker dealers, and (iii) stock distributions we have made. As of December 31, 2016, our net tangible book value per share was $5.09.

The actual value of shares that we repurchase under our share redemption program may be substantially less than what we pay.

Under our share redemption program, shares currently may be repurchased at varying prices depending on (a) the purchase price paid for the shares and (b) whether the redemptions are sought upon a stockholder’s death, “qualifying disability” (as defined in the program), or confinement to a long-term care facility. The current maximum price that may be paid under the program is $10.94 per share. This redemption price is likely to differ from the price at which a stockholder could resell his or her shares for the reasons discussed in the risk factor above. Thus, when we repurchase shares of our common stock at $10.94 per share, the actual value of the shares that we repurchase will be less, and the repurchase will be dilutive to our remaining stockholders. Even at lower repurchase prices, the actual value of the shares may be substantially less than what we pay and the repurchase may be dilutive to our remaining stockholders.

We face risks associated with security breaches through cyber-attacks, cyber intrusions or otherwise, as well as other significant disruptions of our information technology, or IT, networks and related systems.

We will face risks associated with security breaches, whether through cyber-attacks or cyber intrusions over the Internet, malware, computer viruses, attachments to e-mails, persons inside our organization or persons with access to systems inside our organization, and other significant disruptions of our IT networks and related systems. The risk of a security breach or disruption,particularly through cyber-attack or cyber intrusion, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. Our IT networks and related systems are essential to the operation of our business and our ability to perform day-today operations (including managing our building systems), and, in some cases, may be critical to the operations of certain of our tenants. There can be no assurance that our efforts to maintain the security and integrity of these types of IT networks and related systems will be effective or that attempted security breaches or disruptions would not be successful or damaging. A security breach or other significant disruption involving our IT networks and related systems could adversely impact our financial condition, results of operations, cash flows, and our ability to satisfy our debt service obligations and to pay distributions to our stockholders.

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Risks Related to Conflicts of Interest

Our Advisor and its affiliates, including all of our executive officers, two of our directors and other key real estate professionals face conflicts of interest caused by their compensation arrangements with us, which could result in actions that are not in the long-term best interests of our stockholders.

All of our executive officers and two of our directors are also officers, directors, managers or key professionals of our Advisor, and other affiliated Resource Real Estate and/or C-III entities. Our Advisor and its affiliates receive substantial fees from us. These fees could influence our Advisor’s advice to us as well as the judgment of affiliates of our Advisor. Among other matters, these compensation arrangements could affect their judgment with respect to:

• the continuation, renewal or enforcement of our agreements with our Advisor and its affiliates, including the advisory agreement and the management agreement;

• sales of properties and other investments, which may entitle our Advisor to disposition fees and the possible issuance to our Advisor of shares of our common stock through the conversion of our convertible stock;

• acquisitions of properties and investments in loans, which entitle our Advisor to acquisition and asset management fees, and, in the case of acquisitions or investments from other Resource Real Estate-sponsored programs, might entitle affiliates of our Advisor to disposition fees in connection with its services for the seller;

• borrowings to acquire properties and other investments, which borrowings will increase the acquisition, debt financing, and asset management fees payable to our Advisor;

• whether and when we seek to list our common stock on a national securities exchange, which listing could entitle our Advisor to the issuance of shares of our common stock through the conversion of our convertible stock;

• whether we internalize our management, which may entail significant payments to affiliates of our Advisor; and

• whether and when we seek to sell the company or its assets, which sale could entitle our Advisor to disposition fees and to the issuance of shares of our common stock through the conversion of our convertible stock.

The fees our Advisor receives in connection with the acquisition and management of assets are based on the cost of the investment, and not based on the quality of the investment or the quality of the services rendered to us. This may influence our Advisor to recommend riskier transactions to us.

Our Advisor will face conflicts of interest relating to the acquisition of assets and such conflicts may not be resolved in our favor, which could limit our ability to make distributions and reduce your overall investment return.

We rely on our sponsor and other key real estate professionals at our Advisor to identify suitable investment opportunities for us. The executive officers and several of the other key real estate professionals at our Advisor are also the key real estate professionals at the advisors to other Resource Real Estate-sponsored programs and joint ventures. As such, Resource Real Estate-sponsored programs and joint ventures rely on many of the same real estate professionals as will future programs. Many investment opportunities that are suitable for us may also be suitable for other Resource Real Estate programs and joint ventures. When these real estate professionals direct an investment opportunity to any Resource Real Estate-sponsored program or joint venture, they, in their sole discretion, will offer the opportunity to the program or joint venture for which the investment opportunity is most suitable based on the investment objectives, portfolio and criteria of each program or joint venture. For so long as we are externally advised, our charter provides that it shall not be a proper purpose of the corporation for us to purchase real estate or any significant asset related to real estate unless our Advisor has recommended the investment to us. Thus, the real estate professionals of our Advisor could direct attractive investment opportunities to other entities. Such events could result in us investing in properties that provide less attractive returns, which may reduce our ability to make distributions to you.

Our Advisor will face conflicts of interest relating to joint ventures that we may form with affiliates of our Advisor, which conflicts could result in a disproportionate benefit to the other joint venture partners at our expense.

If approved by our conflicts committee, we may enter into joint venture agreements with other Resource Real Estate-sponsored programs or affiliated entities for the acquisition, development or improvement of properties or other investments. Our Advisor and the advisors to the other Resource Real Estate-sponsored programs have the same executive officers and key employees; and these persons will face conflicts of interest in determining which Resource Real Estate program or investor should enter into any particular joint venture agreement. These persons may also face a conflict in structuring the terms of the relationship between our interests and the interests of the Resource Real Estate-affiliated co-venturer and in managing the joint venture. Any joint venture agreement or transaction between us and a Resource Real Estate-affiliated co-venturer will not have the benefit of arm’s length negotiation of the type normally conducted between unrelated co-venturers. The Resource Real Estate-affiliated co-venturer

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may have economic or business interests or goals that are or may become inconsistent with our business interests or goals. These co-venturers may thus benefit to our and your detriment.

Our Advisor, the real estate professionals assembled by our Advisor, their affiliates and our officers face competing demands relating to their time, and this may cause our operations and your investment to suffer.

We rely on our Advisor, the real estate professionals our Advisor has assembled and their affiliates and officers for the day-to-day operation of our business. Our Advisor, its real estate professionals and affiliates, including our officers and employees, have interests in other Resource Real Estate programs and engage in other business activities. As a result of their interests in other Resource Real Estate programs and the fact that they have engaged in and they will continue to engage in other business activities, they face conflicts of interest in allocating their time among us, our Advisor and other Resource Real Estate-sponsored programs and other business activities in which they are involved. Should our Advisor breach its fiduciary duty to us by inappropriately devoting insufficient time or resources to our business, the returns on our investments may suffer.

Our executive officers and two of our directors face conflicts of interest related to their positions in our Advisor and its affiliates, including our property manager, which could hinder our ability to implement our business strategy and to generate returns to you.

Our executive officers and two of our directors are also executive officers, directors, managers and key professionals of our Advisor, our property manager and other affiliated Resource Real Estate and/or C-III entities. Their loyalties to these other entities could result in actions or inactions that breach their fiduciary duties to us and are detrimental to our business, which could harm the implementation of our business strategy and our investment and leasing opportunities. If we do not successfully implement our business strategy, we may be unable to generate the cash needed to make distributions to you and to maintain or increase the value of our assets.

Payment of substantial fees and expenses to our Advisor and its affiliates reduces cash available for investment and distribution

and increases the risk that you will not be able to recover the amount of your investment in our shares.

Our Advisor and its affiliates perform services for us in connection with the selection and acquisition of our investments, the management and leasing of our properties and the administration of our other investments. We pay them substantial fees for these services, which result in immediate dilution to the value of your investment and reduce the amount of cash available for investment or distribution to stockholders.

We also pay significant fees to our Advisor and its affiliates during our operational stage. Those fees include property management and debt servicing fees, asset management fees and obligations to reimburse our advisor and its affiliates for expenses they incur in connection with their providing services to us, including certain personnel services.

We may also pay significant fees during our listing/liquidation stage. The subordinated incentive fee that we will pay to our Advisor upon our investors receiving an agreed upon return on their investment is structured in the form of convertible stock. Our Advisor has exchanged 4,500 shares of our common stock for 45,000 shares of our convertible stock. As of December 31, 2016, our Advisor and affiliated persons owned 49,063 shares of our convertible stock, outside investors owned a total of 937 shares of our convertible stock and a total of 50,000 shares of convertible stock were issued and outstanding.

Under limited circumstances, these shares may be converted into shares of our common stock satisfying our obligation to pay our Advisor an incentive fee and diluting our stockholders’ interest in us. Our convertible stock will convert into shares of common stock on one of two events. First, it will convert if we have paid distributions to common stockholders such that aggregate distributions are equal to 100% of the price at which we sold our outstanding shares of common stock plus an amount sufficient to produce a 10% cumulative, non-compounded, annual return at that price. Alternatively, the convertible stock will convert if we list our shares of common stock on a national securities exchange and, on the 31st trading day after listing, the value of our company based on the average trading price of our shares of common stock since the listing, plus prior distributions, combine to meet the same 10% return threshold for our common stockholders. Each of these two events is a “Triggering Event.”

Upon a Triggering Event, our convertible stock will, unless our advisory agreement with our advisor has been terminated or not renewed on account of a material breach by our 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

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• (1) the value of the company as of the date of the event triggering the conversion plus the total distributions paid to our stockholders through such date on the then outstanding shares of our 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 our stockholders through such date on the then outstanding shares of our 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.

However, if our advisory agreement expires without renewal or is terminated (other than because of a material breach by our Advisor) prior to a Triggering Event, then upon a Triggering Event the holder of the convertible stock will be entitled to a prorated portion of the number of shares of common stock determined by the foregoing calculation, where such proration is based on the percentage of time we were advised by our Advisor. As a result, following conversion, the holder of the convertible stock will be entitled to a portion of amounts distributable to our stockholders, which such amounts distributable to the holder could be significant.

Our Advisor can influence whether our common stock is listed for trading on a national securities exchange. Accordingly, our Advisor can influence the conversion of the convertible stock issued to it and the resulting dilution of other stockholders’ interests.

These fees and other potential payments increase the risk that the amount available for distribution to common stockholders upon a liquidation of our portfolio would be less than the purchase price of the shares in this offering. Substantial consideration paid to our Advisor and its affiliates also increases the risk that you will not be able to resell your shares at a profit, even if our shares are listed on a national securities exchange.

Risks Related to Our Corporate Structure

Our charter limits the number of shares a person may own, which may discourage a takeover that could otherwise result in a premium price to our stockholders.

Our charter, with certain exceptions, authorizes our directors to take such actions as are necessary and desirable to preserve our qualification as a REIT. To help us comply with the REIT ownership requirements of the Internal Revenue Code, our charter prohibits a person from directly or constructively owning more than 9.8% of our outstanding shares, unless exempted by our Board of Directors. This restriction may have the effect of delaying, deferring or preventing a change in control of us, including an extraordinary transaction (such as a merger, tender offer or sale of all, or substantially all, of our assets) that might provide a premium price for holders of our common stock.

Our charter permits our Board of Directors to issue stock with terms that may subordinate the rights of our common stockholders or discourage a third party from acquiring us in a manner that could result in a premium price to our stockholders.

Our Board of Directors may increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class or series that we have authority to issue and classify or reclassify any unissued common stock or preferred stock and establish the preferences, conversion or other rights, voting powers, restrictions, limitations as to distributions, qualifications and terms or conditions of redemption of any such stock. Our board of directors could authorize the issuance of preferred stock with terms and conditions that could have priority as to distributions and amounts payable upon liquidation over the rights of the holders of our common stock. Such preferred stock could also have the effect of delaying, deferring or preventing a change in control of us, including an extraordinary transaction (such as a merger, tender offer or sale of all, or substantially all, of our assets) that might

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provide a premium price to holders of our common stock. A majority of our independent directors who do not have an interest in the transaction must approve any issuance of preferred stock.

Your investment return may be reduced if we are required to register as an investment company under the Investment Company Act; if we or our subsidiaries become an unregistered investment company, we could not continue our business.

Neither we nor any of our subsidiaries intend to register as investment companies under the Investment Company Act of 1940, as amended (the “Investment Company Act”). If we or our subsidiaries were obligated to register as investment companies, we would have to comply with a variety of substantive requirements under the Investment Company Act that impose, among other things:

• limitations on capital structure;

• restrictions on specified investments;

• prohibitions on transactions with affiliates; and

• compliance with reporting, record keeping, voting, proxy disclosure and other rules and regulations that would significantly increase our operating expenses.

Under the relevant provisions of Section 3(a)(1) of the Investment Company Act, an investment company is any issuer that:

• pursuant to Section 3(a)(1)(A), is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities (the “primarily engaged test”); or

• pursuant to Section 3(a)(1)(C), is engaged or proposes to engage in the business of investing, reinvesting, owning, holding or trading in securities and owns or proposes to acquire “investment securities” having a value exceeding 40% of the value of such issuer’s total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis (the “40% test”). “Investment securities” excludes U.S. government securities and securities of majority-owned subsidiaries that are not themselves investment companies and are not relying on the exception from the definition of investment company under Section 3(c)(1) or Section 3(c)(7) (relating to private investment companies).

We believe that we and our operating partnership will not be required to register as an investment company. With respect to the 40% test, most of the entities through which we and our operating partnership will own our assets are majority-owned subsidiaries that will not themselves be investment companies and will not be relying on the exceptions from the definition of investment company under Section 3(c)(1) or Section 3(c)(7).

With respect to the primarily engaged test, we and our operating partnership are holding companies and do not intend to invest or trade in securities ourselves. Rather, through the majority-owned subsidiaries of our operating partnership, we and our operating partnership are primarily engaged in the non-investment company businesses of these subsidiaries, namely the business of purchasing or otherwise acquiring real estate and real estate-related assets.

If any of the subsidiaries of our operating partnership fail to meet the 40% test, we believe they will usually, if not always, be able to rely on Section 3(c)(5)(C) of the Investment Company Act for an exception from the definition of an investment company. (Otherwise, they should be able to rely on the exceptions for private investment companies pursuant to Section 3(c)(1) and Section 3(c)(7) of the Investment Company Act.) As reflected in no-action letters, the SEC staff’s position on Section 3(c)(5)(C) generally requires that an issuer maintain at least 55% of its assets in “mortgages and other liens on and interests in real estate,” or qualifying assets; at least 80% of its assets in qualifying assets plus real estate-related assets; and no more than 20% of the value of its assets in other than qualifying assets and real estate-related assets, which we refer to as miscellaneous assets. To constitute a qualifying asset under this 55% requirement, a real estate interest must meet various criteria based on no-action letters. We expect that any of the subsidiaries of our operating partnership relying on Section 3(c)(5)(C) will invest at least 55% of its assets in qualifying assets, and approximately an additional 25% of its assets in other types of real estate-related assets. If any subsidiary relies on Section 3(c)(5)(C), we expect to rely on guidance published by the SEC staff or on our analyses of guidance published with respect to types of assets to determine which assets are qualifying real estate assets and real estate-related assets.

To maintain compliance with the Investment Company Act, our subsidiaries may be unable to sell assets we would otherwise want them to sell and may need to sell assets we would otherwise wish them to retain. In addition, our subsidiaries may have to acquire additional assets that they might not otherwise have acquired or may have to forego opportunities to make investments that we would otherwise want them to make and would be important to our investment strategy. Moreover, the SEC or its staff may issue interpretations with respect to various types of assets that are contrary to our views and current SEC staff interpretations are subject to change, which increases the risk of non-compliance and the risk that we may be forced to make adverse changes to our portfolio. In this regard, we note that in 2011 the SEC issued a concept release indicating that the SEC and its staff were reviewing interpretive issues relating to Section 3(c)(5)(C) and soliciting views on the application of

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Section 3(c)(5)(C) to companies engaged in the business of acquiring mortgages and mortgage-related instruments. If we were required to register as an investment company but failed to do so, we would be prohibited from engaging in our business and criminal and civil actions could be brought against us. In addition, our contracts would be unenforceable unless a court required enforcement and a court could appoint a receiver to take control of us and liquidate our business.

Rapid changes in the values of our assets may make it more difficult for us to maintain our qualification as a REIT or our exception from the definition of an investment company under the Investment Company Act.

If the market value or income potential of our qualifying real estate assets changes as compared to the market value or income potential of our non-qualifying assets, or if the market value or income potential of our assets that are considered “real estate-related assets” under the Investment Company Act or REIT qualification tests changes as compared to the market value or income potential of our assets that are not considered “real estate-related assets” under the Investment Company Act or REIT qualification tests, whether as a result of increased interest rates, prepayment rates or other factors, we may need to modify our investment portfolio in order to maintain our REIT qualification or exception from the definition of an investment company. If the decline in asset values or income occurs quickly, this may be especially difficult, if not impossible, to accomplish. This difficulty may be exacerbated by the illiquid nature of many of the assets that we may own. We may have to make investment decisions that we otherwise would not make absent REIT and Investment Company Act considerations.

You may not be able to sell your shares under our share redemption program and, if you are able to sell your shares under the program, you may not be able to recover the amount of your investment in our shares.

Our Board of Directors has approved the share redemption program, but may amend, suspend or terminate our share redemption program upon 30 days’ notice and without stockholder approval. Our Board of Directors may reject any request for redemption of shares. Further, there are many limitations on your ability to sell your shares pursuant to the share redemption program. Any stockholder requesting repurchase of their shares pursuant to our share redemption program will be required to certify to us that such stockholder acquired the shares by either (1) a purchase directly from us or (2) a transfer 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 stockholder’s immediate or extended family, (ii) a transfer to a custodian, trustee or other fiduciary for the account of the stockholder or his or her immediate or extended family in connection with an estate planning transaction, including by bequest or inheritance upon death or (iii) operation of law.

In addition, our share redemption program contains other restrictions and limitations. Shares will be redeemed on a quarterly basis, pro rata among all stockholders requesting redemption in such quarter, with a priority given to redemptions upon the death or qualifying disability of a stockholder or redemptions sought upon a stockholder’s confinement to a long-term care facility; next, to stockholders who demonstrate, in the discretion of our Board of Directors, another involuntary, exigent circumstance, such as bankruptcy; next, to stockholders subject to a mandatory distribution requirement under such stockholder’s IRA; and, finally, to other redemption requests. You must hold your shares for at least one year prior to seeking redemption under the share redemption program, except that our Board of Directors may waive this one-year holding requirement with respect to redemptions sought upon the death or qualifying disability of a stockholder or redemptions sought upon a stockholder’s confinement to a long-term care facility or for other exigent circumstances and that if a stockholder is redeeming all of his or her shares the Board of directors may waive the one-year holding requirement with respect to shares purchased pursuant to the distribution reinvestment plan. We will not redeem more than 5% of the weighted average number of shares outstanding during the twelve-month period immediately prior to the date of redemption. Our board of directors will determine from time to time, and at least quarterly, whether we have sufficient excess cash to repurchase shares. Generally, the cash available for redemption will be limited to proceeds from our distribution reinvestment plan plus 1% of the operating cash flow from the previous fiscal year (to the extent positive).

Other than redemptions following the death or qualifying disability of a stockholder or redemptions sought upon a stockholder’s confinement to a long-term care facility, the purchase price for such shares we repurchase under our proposed redemption program equaled the greater of (a) 100% of the average issue price per share for all of your shares (as adjusted for any stock distributions, stock combinations, splits, recapitalizations and the like with respect to our common stock) or (b) 100% of the estimated value per share. Accordingly, you may receive less by selling your shares back to us than you would receive if our investments were sold for their estimated values and such proceeds were distributed in our liquidation.

Your interest in us will be diluted if we issue additional shares, which could reduce the overall value of your investment.

Our stockholders do not have preemptive rights to any shares we issue in the future. Our charter authorizes us to issue 1,010,050,000 shares of capital stock, of which 1,000,000,000 shares are designated as common stock, 50,000 shares are designated as convertible stock and 10,000,000 are designated as preferred stock. Our board of directors may increase the number of authorized shares of capital stock without stockholder approval. Our board may also elect to (1) sell additional equity securities in future public or private offerings; (2) issue shares of our common stock upon the exercise of the options we may grant to our independent

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directors or to our Advisor's or our Manager's employees; (3) issue shares to our Advisor, its successors or assigns, in payment of an outstanding obligation or as consideration in a related-party transaction; (4) issue shares of common stock upon the conversion of our convertible stock; or (5) issue shares of our common stock to sellers of properties we acquire in connection with an exchange of limited partnership interests of our operating partnership. To the extent we issue additional equity interests, your percentage ownership interest in us will be diluted. Further, depending upon the terms of such transactions, most notably the offering price per share, which may be less than the price paid per share in any public offering, and the value of our properties, existing stockholders may also experience a dilution in the book value of their investment in us.

If we are unable to obtain funding for future capital needs, cash distributions to our stockholders could be reduced and the value of our investments could decline.

If we need additional capital in the future to improve or maintain our properties or for any other reason, we may have to obtain financing from sources beyond our cash flow from operations, such as borrowings, sales of assets or future equity offerings. These sources of funding may not be available on attractive terms or at all. If we cannot procure additional funding for capital improvements, our investments may generate lower cash flows or decline in value, or both, which would limit our ability to make distributions to you and could reduce the value of your investment.

Our board of directors could opt into certain provisions of the Maryland General Corporation Law in the future, which may discourage others from trying to acquire control of us and may prevent our stockholders from receiving a premium price for their stock in connection with a business combination.

Under Maryland law, “business combinations” between a Maryland corporation and certain interested stockholders or affiliates of interested stockholders are prohibited for five years after the most recent date on which the interested stockholder becomes an interested stockholder. These business combinations include a merger, consolidation, share exchange, or, in circumstances specified in the statute, an asset transfer or issuance or reclassification of equity securities. Also under Maryland law, control shares of a Maryland corporation acquired in a control share acquisition have no voting rights except to the extent approved by a vote of two-thirds of the votes entitled to be cast on the matter. Shares owned by the acquirer, an officer of the corporation or an employee of the corporation who is also a director of the corporation are excluded from the vote on whether to accord voting rights to the control shares. Should our board opt into these provisions of Maryland law, it may discourage others from trying to acquire control of us and increase the difficulty of consummating any offer. Similarly, provisions of Title 3, Subtitle 8 of the Maryland General Corporation Law could provide similar anti-takeover protection.

Because Maryland law permits our board to adopt certain anti-takeover measures without stockholder approval, investors may be less likely to receive a “control premium” for their shares.

In 1999, the State of Maryland enacted legislation that enhances the power of Maryland corporations to protect themselves from unsolicited takeovers. Among other things, the legislation permits our board, without stockholder approval, to amend our charter to:

• stagger our board of directors into three classes;

• require a two-thirds stockholder vote for removal of directors;

• provide that only the board can fix the size of the board;

• provide that all vacancies on the board, however created, may be filled only by the affirmative vote of a majority of the remaining directors in office; and

• require that special stockholder meetings may only be called by holders of a majority of the voting shares entitled to be cast at the meeting.

Under Maryland law, a corporation can opt to be governed by some or all of these provisions if it has a class of equity securities registered under the Exchange Act, and has at least three independent directors. Our charter does not prohibit our board from opting into any of the above provisions permitted under Maryland law. Becoming governed by any of these provisions could discourage an extraordinary transaction (such as a merger, tender offer or sale of all or substantially all of our assets) that might provide a premium price for holders of our securities.

If we internalize our management functions, we could incur significant costs associated with being self-managed and may not be able to retain or replace key personnel; and we may have increased exposure to litigation as a result of internalizing our management functions.

We may internalize management functions provided by our Advisor, our Manager and their respective affiliates by acquiring assets and personnel from our advisor, our property manager or their affiliates. In the event we were to acquire our advisor or our property manager, we cannot be sure of the terms relating to any such acquisition.

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If we internalize, we would no longer bear the costs of the various fees and expenses we expect to pay to our Advisor and to our Manager under their respective agreements; however, our direct expenses would increase due to the inclusion of general and administrative costs, including legal, accounting, and other expenses related to corporate governance, SEC reporting and compliance. We would also incur the compensation and benefits costs of our officers and other employees and consultants that are now paid by our advisor, our property manager or their affiliates. We cannot reasonably estimate the amount of fees to our advisor, property manager and other affiliates we would save, and the costs we would incur, if we acquired these entities. If the expenses we assume as a result of an internalization are higher than the expenses we avoid paying to our advisor, our property manager and their affiliates, our net income per share and funds from operations per share would be lower than they otherwise would have been had we not acquired these entities, potentially decreasing the amount of funds available for distribution.

Additionally, if we internalize our management functions, we would employ personnel and would be subject to potential liabilities commonly faced by employers, such as workers’ disability and compensation claims, potential labor disputes and other employee-related liabilities and grievances. Also, there can be no assurances that we will be successful in retaining key personnel at our advisor or property manager in the event of an internalization transaction. In addition, we could have difficulty integrating the functions currently performed by our advisor, our property manager and their affiliates. Currently, the officers and employees of our Advisor, our Manager, and their affiliates perform asset management, property management, and general and administrative functions, including accounting and financial reporting, for multiple entities. We may fail to properly identify the appropriate mix of personnel and capital needs to operate as a stand-alone entity. An inability to manage an internalization transaction effectively could result in our incurring additional costs and/or experiencing deficiencies in our disclosures controls and procedures or our internal control over financial reporting. Such deficiencies could cause us to incur additional costs and our management’s attention could be diverted from effectively managing our properties and overseeing other real estate-related assets.

In addition, in recent years, internalization transactions have been the subject of stockholder litigation. Stockholder litigation can be costly and time-consuming, and there can be no assurance that any litigation expenses we might incur would not be significant or that the outcome of litigation would be favorable to us. Any amounts we are required to expend defending any such litigation will reduce the amount of funds available for investment by us in properties or other investments.

Risks Related to Investments in Real Estate

Economic and regulatory changes that impact the real estate market generally may decrease the value of our investments and weaken our operating results.

The properties we acquire and their performance are subject to the risks typically associated with real estate, including:

• downturns in national, regional and local economic conditions;

• competition;

• adverse local conditions, such as oversupply or reduction in demand and changes in real estate zoning laws that may reduce the desirability of real estate in an area;

• vacancies, changes in market rental rates and the need to periodically repair, renovate and re-let space;

• changes in the supply of or the demand for similar or competing properties in an area;

• changes in interest rates and the availability of permanent mortgage financing, which may render the sale of a property or loan difficult or unattractive;

• changes in governmental regulations, including those involving tax, real estate usage, environmental and zoning laws; and

• periods of high interest rates and tight money supply.

Any of the above factors, or a combination thereof, could result in a decrease in the value of our investments, which would have an adverse effect on our results of operations, reduce the cash available for distributions and the return on your investment.

We are subject to the risks associated with acquiring discounted real estate assets.

We are subject to the risks generally incident to the ownership of discounted real estate assets. Such assets may be purchased at a discount from historical cost due to substantial deferred maintenance, abandonment, undesirable locations or markets, or poorly structured financing of the real estate or debt instruments underlying the assets, which has since lowered their value. Further, instability in the financial markets may limit the availability of lines of credit and the degree to which people and entities have access to cash to pay rents or debt service on the underlying assets. Such illiquidity would have the effect of increasing

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vacancies, increasing bankruptcies and weakening interest rates commercial entities can charge consumers, which can all decrease the value of already discounted real estate assets. Should economic conditions worsen, an inability of the underlying real estate assets to produce income may weaken our return on our investments, which in turn, may weaken your return on investment.

Further, irrespective of the instability the financial markets may have on the return produced by discounted real estate assets, the evolving efforts to correct the instability make the valuation of such assets highly unpredictable. Though we have purchased, and may continue to purchase, real estate assets at a discount from historical cost, the fluctuation in market conditions make judging the future performance of such assets difficult. There is a risk that we may not purchase real estate assets at absolute discounted rates and that such assets may continue to decline in value.

Residents of multifamily rental properties or tenants of other property classes we intend to acquire as discounted real estate assets that have experienced personal financial problems or a downturn in their business may delay enforcement of our rights, and we may incur substantial costs attempting to protect our investment.

The discounted real estate assets may involve investments in residential or commercial leases with residents or tenants who have experienced a downturn in their residential or business leases and with residents or tenants that have experienced difficulties with their personal financial situations such as a job loss, bankruptcy or bad credit rating, resulting in their failure to make timely rental payments or their default under their leases or debt instruments. In the event of any default by residents or tenants at our properties, we may experience delays in enforcing our rights and may incur substantial costs attempting to protect our investment.

The bankruptcy or insolvency of any resident or tenant also may adversely affect the income produced by our properties. If any resident or tenant becomes a debtor in a case under the U.S. Bankruptcy Code, our actions may be restricted by the bankruptcy court and our financial condition and results of operations could be adversely affected.

The operating costs of our properties will not necessarily decrease if our income decreases.

Certain expenses associated with ownership and operation of a property may be intentionally increased to enhance the short- and long-term success of the property in the form of capital gain and current income, such as:

• increased staffing levels;

• enhanced technology applications; and

• increased marketing efforts.

Certain expenses associated with the ownership and operation of a property are not necessarily reduced by events that adversely affect the income from the property, such as:

• real estate taxes;

• insurance costs; and

• maintenance costs.

For example, if the leased property loses tenants or rents are reduced, then those costs described in the preceding sentence are not necessarily reduced. As a result, our cost of owning and operating leased properties may, in the future, exceed the income the property generates even though the property’s income exceeded its costs at the time it was acquired. This would decrease the amount of cash available to us to distribute to you and could negatively affect your return on investment.

We will be subject to the risks associated with acquiring bank-owned properties, commonly referred to as REO (“real estate owned” by a bank after foreclosure).

We will be subject to the risks generally incident to the acquisition and ownership of REO. An investment in REO assets may be riskier than traditional real estate transactions. For example, such additional risks may include:

• REO assets often will require certain additional planned capital expenditures to repair and maintain the property in order to prepare the property for sale, due to the previous owners’ inadequate maintenance of the property;

• REO assets may result in the purchaser discovering additional latent defects with the property requiring additional unplanned expenditures not initially budgeted for as part of the redevelopment and repositioning capital expenditures; and

• the timing and closing of an REO acquisition may be delayed and we may incur additional costs because of the bank’s lack of adequate staff assigned to the bank’s REO portfolio or the deliberate process of following the bank’s specific rules and requirements for obtaining its approval prior to closing the transaction.

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The risks associated with REO may adversely affect our results of operations, reduce the cash available for distributions and the return on your investment.

We will compete with third parties in acquiring, managing and selling properties and other investments, which could reduce our profitability and the return on your investment.

We believe that the current market for properties that meet our investment objectives is extremely competitive and many of our competitors have greater resources than we do. We will compete with numerous other entities engaged in real estate investment activities, including individuals, corporations, banks and insurance company investment accounts, other REITs, real estate limited partnerships, the U.S. government and other entities, to acquire, manage and sell real estate and real estate-related assets. Many of our expected competitors enjoy significant competitive advantages that result from, among other things, a lower cost of capital and enhanced operating efficiencies. In addition, the number of entities and the amount of funds competing for suitable investments may increase.     

Competition with these entities may result in the following:

• greater demand for the acquisition of real estate and real estate-related assets, which results in increased prices we must pay for our real estate and real estate-related assets;

• delayed investment of our capital;

• decreased availability of financing to us; or

• reductions in the size or desirability of the potential tenant base for one or more properties that we lease.

If such events occur, you may experience a lower return on your investment.

Our joint venture partner could take actions that decrease the value of an investment to us and lower our stockholders’ overall return.

We are a party to a joint venture through which we own one of our properties. We may also purchase and renovate additional properties in joint ventures or in partnerships, co‑tenancies or other co‑ownership arrangements. Such investments involve risks not otherwise present with other methods of investment, including, for example, the following risks:

• that our co‑venturer, co‑tenant or partner in an investment could become insolvent or bankrupt;

• that such co‑venturer, co‑tenant or partner may at any time have economic or business interests or goals that are or that become inconsistent with our business interests or goals; or

• that such co‑venturer, co‑tenant or partner may be in a position to take action contrary to our instructions or requests or contrary to our policies or objectives.

Any of the above might subject a property to liabilities in excess of those contemplated and thus reduce our returns on that investment and therefore your return on investment.

Properties that have significant vacancies, especially discounted real estate assets, may experience delays in leasing up or could be difficult to sell, which could diminish our return on these properties.

A property may incur vacancies either by the expiration of tenant leases or the continued default of tenants under their leases. Further, our potential investments in value-add multifamily rental properties or other types of discounted properties may have significant vacancies at the time of acquisition. If vacancies continue for a prolonged period of time beyond the expected lease-up stage that we anticipate will follow any redevelopment or repositioning efforts, we may suffer reduced revenues resulting in less cash available for distributions. In addition, the resale value of the property could be diminished because the market value of a particular property depends principally upon the value of the cash flow generated by the leases associated with that property. Such a reduction on the resale value of a property could also reduce your return on investment.

We may have difficulty re-leasing underperforming or discounted properties because of the location or reputation of the property.

The nature of discounted real estate assets carries the risk that the properties underlying certain real estate investments may be located in areas of slow, stagnant, or declining economic growth. Such areas may experience high levels of crime and unemployment. In addition to the risks these conditions impose on the current tenants and owners of properties underlying the real estate investments, these conditions may harm the reputation of the property making it difficult to attract future more productive tenants and owners to the areas where the properties are located. The inability to re-lease or re-sell property abandoned, foreclosed upon, or purchased in these areas may result in an unproductive use of our resources and could negatively affect our performance and your return on investment.

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Because we rely on our Manager, its affiliates and third parties to manage the day-to-day affairs of any properties we acquire, should the staff of a particular property perform poorly, our operating results for that property will similarly be hindered and our net income may be reduced.

We depend upon the performance of our property managers to effectively manage our properties and real estate-related assets. Rising vacancies across real estate properties have resulted in increased pressure on real estate investors and their property managers to maintain adequate occupancy levels. In order to do so, we may have to offer inducements, such as free rent and resident amenities, to compete for residents. Poor performance by those sales, leasing and other management staff members operating a particular property will necessarily translate into poor results of operations for that particular property. Should our Manager, its affiliates or third parties fail to identify problems in the day-to-day management of a particular property or fail to take the appropriate corrective action in a timely manner, our operating results may be hindered and our net income reduced.

If we are unable to sell a property for the price, on the terms or within the time frame we desire, it could limit our ability to pay cash distributions to you.

Many factors that are beyond our control affect the real estate market and could affect our ability to sell properties for the price, on the terms or within the time frame that we desire. These factors include general economic conditions, the availability of financing, interest rates and other factors, including supply and demand. Because real estate investments are relatively illiquid, we have a limited ability to vary our portfolio in response to changes in economic or other conditions. Further, before we can sell a property on the terms we want, it may be necessary to expend funds to correct defects or to make improvements. However, we can give no assurance that we will have the funds available to correct such defects or to make such improvements. We may be unable to sell our properties at a profit. Our inability to sell properties at the time and on the terms we want could reduce our cash flow and limit our ability to make distributions to you and could reduce the value of your investment.

Government entities, community associations and contractors may cause unforeseen delays and increase costs to redevelop and reposition value-add properties that we may acquire, which may reduce our net income and cash available for distributions to you.

We may seek to or be required to incur substantial capital obligations to redevelop or reposition existing properties that we acquire at a discount as a result of neglect of the previous owners or tenants of the properties and to sell the properties. Our Advisor and its key real estate professionals will do their best to acquire properties that do not require excessive redevelopment or modifications and that do not contain hidden defects or problems. There could, however, be unknown and excessive costs, expenses and delays associated with a discounted property’s redevelopment, repositioning or value-add upgrades. We will be subject to risks relating to the uncertainties associated with rezoning for redevelopment and other concerns of governmental entities, community associations and our construction manager’s ability to control costs and to build in conformity with plans and the established timeframe. We will pay a construction management fee to a construction manager, which may be our Manager or its affiliates, if new capital improvements are required.

If we are unable to increase rental rates or sell the redeveloped property at a price consistent with our value-add projections due to local market or economic conditions to offset the cost of the redevelopment or repositioning the property, the return on your investment may suffer. To the extent we acquire discounted properties in major metropolitan areas where the local government has imposed rent controls, we may be prohibited from increasing the rental rates to a level sufficient to cover the particular property’s redevelopment costs and expenses.

Costs of responding to both known and previously undetected environmental contamination and hazardous conditions may decrease our cash flows and limit our ability to make distributions.

Real property and the operations conducted on real property are subject to federal, state and local laws and regulations relating to protection of the environment and human health. We could be subject to liability in the form of fines, penalties or damages for noncompliance with these laws and regulations. These laws and regulations generally govern wastewater discharges, air emissions, the operation and removal of underground and above-ground storage tanks, the use, storage, treatment, transportation and disposal of solid and hazardous materials, the remediation of contamination associated with the release or disposal of solid and hazardous materials, the presence of toxic building materials, and other health and safety-related concerns.

Some of these laws and regulations may impose joint and several liability on the tenants, current or previous owners or operators of real property for the costs to investigate or remediate contaminated properties, whether the contamination occurred prior to purchase, or whether the acts causing the contamination were legal. These costs could be substantial. Such laws often impose liability whether or not the owner or operator knew of, or was responsible for, the presence of such hazardous or toxic substances. Our tenants’ operations, the condition of properties at the time we buy them, operations in the vicinity of our properties, such as the presence of underground storage tanks, or activities of unrelated third parties may affect our properties.

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Environmental laws also may impose liens on a property or restrictions on the manner in which a property may be used or businesses may be operated, and these restrictions may require substantial expenditures or prevent us from entering into leases with prospective tenants that may be impacted by such laws. Environmental laws provide for sanctions for noncompliance and may be enforced by governmental agencies or, in certain circumstances, by private parties. Certain environmental laws and common law principles could be used to impose liability for the release of and exposure to hazardous substances, including asbestos-containing materials and lead-based paint. Third parties may seek recovery from real property owners or operators for personal injury or property damage associated with exposure to released hazardous substances.

The presence of hazardous substances, or the failure to properly manage or remediate these substances, may hinder our ability to sell, rent or pledge such property as collateral for future borrowings. Any material expenditures, fines, penalties, or damages we must pay will reduce our ability to make distributions and may reduce the value of your investment.

Properties acquired by us may have toxic mold that could result in substantial liabilities to us.

Litigation and concern about indoor exposure to certain types of toxic molds has been increasing as the public becomes aware that exposure to mold can cause a variety of health effects and symptoms, including allergic reactions. It is impossible to eliminate all mold and mold spores in the indoor environment. Although we will attempt to acquire properties and loans secured by properties that do not contain toxic mold, there can be no assurance that none of the properties acquired by us will contain toxic mold. The difficulty in discovering indoor toxic mold growth could lead to an increased risk of lawsuits by affected persons and the risk that the cost to remediate toxic mold will exceed the value of the property. There is a risk that we may acquire properties that contain toxic mold and such properties may negatively affect our performance and your return on investment.

Uninsured losses relating to real property or excessively expensive premiums for insurance coverage could reduce our cash flows and the return on your investment.

There are types of losses, generally catastrophic in nature, such as losses due to wars, acts of terrorism, earthquakes, floods, hurricanes, pollution or environmental matters that are uninsurable or not economically insurable, or may be insured subject to limitations, such as large deductibles or co-payments. Insurance risks associated with potential acts of terrorism could sharply increase the premiums we pay for coverage against property and casualty claims. Additionally, mortgage lenders in some cases have begun to insist that commercial property owners purchase coverage against terrorism as a condition for providing mortgage loans. Such insurance policies may not be available at reasonable costs, if at all, which could inhibit our ability to finance or refinance our properties. In such instances, we may be required to provide other financial support, either through financial assurances or self-insurance, to cover potential losses. We may not have adequate coverage for such losses. If any of our properties incurs a casualty loss that is not fully insured, the value of our assets will be reduced by any such uninsured loss. In addition, other than any working capital reserve or other reserves we may establish, we have no source of funding to repair or reconstruct any uninsured property. Also, to the extent we must pay unexpectedly large amounts for insurance, we could suffer reduced earnings that would result in lower distributions.

Our costs associated with and the risk of failing to comply with the Americans with Disabilities Act, the Fair Housing Act and other tax credit programs may adversely affect cash available for distributions.

Our properties are generally expected to be subject to the Americans with Disabilities Act of 1990, as amended (the "Disabilities Act").  Under the Disabilities Act, all places of public accommodation are required to comply with federal requirements related to access and use by disabled persons.  The Disabilities Act has separate compliance requirements for “public accommodations” and “commercial facilities” that generally require that buildings and services be made accessible and available to people with disabilities.  The Disabilities Act’s requirements could require removal of access barriers and could result in the imposition of injunctive relief, monetary penalties or, in some cases, an award of damages.  We will attempt to acquire properties that comply with the Disabilities Act or place the burden on the seller or other third party to ensure compliance with such laws.  However, we cannot assure you that we will be able to acquire properties or allocate responsibilities in this manner.  If we cannot, our funds used for compliance with these laws may affect cash available for distributions and the amount of distributions to you.

The multifamily rental properties we acquire must comply with Title III of the Disabilities Act, to the extent that such properties are “public accommodations” or “commercial facilities” as defined by the Disabilities Act. Compliance with the Disabilities Act could require removal of structural barriers to handicapped access in certain public areas of our apartment communities where such removal is readily achievable.  The Disabilities Act does not, however, consider residential properties, such as multifamily rental properties, to be public accommodations or commercial facilities, except to the extent portions of such facilities, such as the leasing office, are open to the public.

We also must comply with the Fair Housing Amendment Act of 1988 (“FHAA”), which requires that multifamily rental properties first occupied after March 13, 1991 be accessible to handicapped residents and visitors.  Compliance with the FHAA

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could require removal of structural barriers to handicapped access in a community, including the interiors of apartment units covered under the FHAA. Recently there has been heightened scrutiny of multifamily rental properties for compliance with the requirements of the FHAA and the Disabilities Act and an increasing number of substantial enforcement actions and private lawsuits have been brought against multifamily rental properties to ensure compliance with these requirements.  Noncompliance with the FHAA and the Disabilities Act could result in the imposition of fines, awards of damages to private litigants, payment of attorneys’ fees and other costs to plaintiffs, substantial litigation costs and substantial costs of remediation.

Certain of our properties may be subject to the low income housing tax credits, historic preservation tax credits or other similar tax credit rules at the federal, state or municipal level. The application of these tax credit rules is extremely complicated and noncompliance with these rules may have adverse consequences for us. Noncompliance with applicable tax regulations may result in the loss of future or other tax credits and the fractional recapture of these tax credits already taken. Accordingly, noncompliance with these tax credit rules and related restrictions may adversely affect our ability to distribute any cash to our investors.

Our properties may be dispersed geographically and across various markets and sectors.

We may acquire and operate properties in different locations throughout the United States and in different markets and sectors. The success of our properties will depend largely on our ability to hire various managers and service providers in each area, market and sector where the properties are located or situated. It may be more challenging to manage a diverse portfolio. Failure to meet such challenges could reduce the value of your investment.

Newly constructed and existing multifamily rental properties or other properties that compete with any properties we may acquire in any particular location could adversely affect the operating results of our properties and our cash available for distribution.

We may acquire properties in locations that experience increases in construction of multifamily rental or other properties that compete with our properties. This increased competition and construction could:

• make it more difficult for us to find residents to lease units in our apartment communities;

• force us to lower our rental prices in order to lease units in our apartment communities; or

• substantially reduce our revenues and cash available for distribution.

Our efforts to upgrade multifamily rental properties to increase occupancy and raise rental rates through redevelopment and repositioning may fail, which may reduce our net income and the cash available for distributions to you.

The success of our ability to upgrade any multifamily rental properties that we may acquire and realize capital gains and current income for you on these investments materially depends upon the status of the economy where the multifamily rental property is located. Our revenues will be lower if the rental market cannot bear the higher rental rate that accompanies the upgraded multifamily rental property due to job losses or other economic hardships. Should the local market be unable to substantiate a higher rental rate for a multifamily rental property that we upgraded, we may not realize the premium rental we had assumed by a given upgrade and we may realize reduced rental income or a reduced gain or even loss upon the sale of the property. These events could cause us to reduce the cash available for distributions.

Repositioning risks could affect our profitability.

A component of our strategy is to renovate and reposition multifamily communities in order to effect long-term growth. Our renovation and repositioning activities generally entail certain risks, including the following:

• funds may be expended and management’s time devoted to projects that may not be completed due to a variety of factors, including without limitation, the inability to obtain necessary governmental approvals;

• construction costs of a renovation or repositioning project may exceed original estimates, possibly making the project economically unfeasible or the economic return on a repositioned property less than anticipated;

• increased material and labor costs, problems with subcontractors, or other costs due to errors and omissions which occur in the renovation process;

• projects may be delayed due to required governmental approvals, adverse weather conditions, labor shortages or other unforeseen complications;

• occupancy rates and rents at a repositioned property may be less than anticipated; and

• the operating expenses at a repositioned property may be higher than anticipated.

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These risks may reduce the funds available for distribution to our stockholders. Further, the renovation and repositioning of properties is also subject to the general risks associated with real estate investments.

A concentration of our investments in any one property sector may leave our profitability vulnerable to a downturn or slowdown in such sector.

All of our investments are in the multifamily sector.  Vacancy rates in multifamily rental properties and other commercial real estate properties may be related to jobless rates. As a result, we are subject to risks inherent in investments in a single type of property.  The potential effects on our revenues, and as a result, on cash available for distribution, resulting from increased jobless rates as well as a general downturn or slowdown in multifamily properties could be more pronounced than if we had more fully diversified our investments.

Increased competition and the increased affordability of single-family and multifamily homes and condominiums for sale or rent could limit our ability to retain residents, lease apartment units or increase or maintain rents.

The multifamily rental properties that we own will most likely compete with numerous housing alternatives in attracting residents, including single-family and multifamily homes and condominiums. Due to the current economic conditions, competitive housing in a particular area and the increasing affordability of single-family and multifamily homes and condominiums to buy caused by relatively low mortgage interest rates and generous federal and state government programs to promote home ownership could adversely affect our ability to fully occupy any multifamily rental properties we may acquire. Further, single-family homes and condominiums available for rent could also adversely affect our ability to retain our residents, lease apartment units and increase or maintain rental rates.

Short-term multifamily leases expose us to the effects of declining market rent, which could adversely impact our ability to make cash distributions.

We expect that substantially all of our apartment leases will be for a term of one year or less. Because these leases generally permit the residents to leave at the end of the lease term or earlier in certain situations, such as when a resident loses his/her job, without penalty, our rental revenues may be impacted by declines in market rents more quickly than if our leases were for longer terms.

If we acquire condominium properties or mixed-use properties that combine hotel, multifamily or condominiums, a fire or other accident could occur in a single unit that causes the entire building to be uninhabitable.

We may experience greater risks in the condominium and mixed-use property investments because there could be a higher likelihood of an accident occurring in a building containing numerous individuals where we do not have the same ability to monitor or review the building as other property classes. A fire or other accident in a single unit could in turn cause the entire building to be uninhabitable. Even if there is insurance on the building, it may not be enough to cover all of the losses as a result of a fire or other accident.

Risks Related to Investments in Real Estate-Related Debt Assets

Our investments in real estate-related debt investments are subject to the risks typically associated with real estate.

Our investments in mortgage, mezzanine or other real estate loans will generally be directly or indirectly secured by a lien on real property (or the equity interests in an entity that owns real property) that, upon the occurrence of a default on the loan, could result in our acquiring ownership of the property. We will not know whether the values of the properties ultimately securing our loans will remain at the levels existing on the dates of origination of those loans. If the values of the underlying properties drop, our risk will increase because of the lower value of the security associated with such loans. In this manner, real estate values could impact the values of our loan investments. Our investments in other real estate-related debt investments may be similarly affected by real estate property values. Therefore, our real estate-related debt investments are subject to the risks typically associated with real estate, which are described above under the heading “-Risks Related to Investments in Real Estate.”

If we make or invest in mortgage, mezzanine, bridge or other real estate loans, our loans will be subject to interest rate fluctuations that will affect our returns as compared to market interest rates; accordingly, the value of our stockholders’ investment would be subject to fluctuations in interest rates.

If we make or invest in fixed rate, long‑term loans and interest rates rise, the loans could yield a return that is lower than then‑current market rates. If interest rates decrease, we will be adversely affected to the extent that loans are prepaid because we may not be able to reinvest the proceeds at as high of an interest rate. If we invest in variable‑rate loans and interest rates decrease,

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our revenues will also decrease. For these reasons, if we invest in mortgage, mezzanine, bridge or other real estate loans, our returns on those loans and the value of our stockholders’ investment will be subject to fluctuations in interest rates.

Delays in liquidating defaulted mortgage loans could reduce our investment returns.

If we make or invest in mortgage loans and there are defaults under those mortgage loans, we may not be able to repossess and sell the underlying properties quickly. The resulting time delay could reduce the value of our investment in the defaulted mortgage loans. An action to foreclose on a property securing a mortgage loan is regulated by state statutes and regulations and is subject to many of the delays and expenses of other lawsuits if the defendant raises defenses or counterclaims. In the event of default by a mortgagor, these restrictions, among other things, may impede our ability to foreclose on or sell the mortgaged property or to obtain proceeds sufficient to repay all amounts due to us on the mortgage loan.

Government action may reduce recoveries on defaulted loans.

Legislative or regulatory initiatives by federal, state or local legislative bodies or administrative agencies, if enacted or adopted, could delay foreclosure, provide new defenses to foreclosure or otherwise impair our ability to foreclose on real estate-related debt investments in default. Various jurisdictions have considered or are currently considering such actions, and the nature or extent of the limitation on foreclosure that may be enacted cannot be predicted. Bankruptcy courts could, if this legislation is enacted, reduce the amount of the principal balance on a mortgage loan that is secured by a lien on the mortgaged property, reduce the interest rate, extend the term to maturity or otherwise modify the terms of a bankrupt borrower’s mortgage loan.

Property owners filing for bankruptcy may adversely affect us.

The filing of a petition in bankruptcy automatically stops or “stays” any actions to enforce the terms of all debt of the debtor, including a mortgage loan. The length of the stay and the costs associated with it will generally have an adverse impact on our profitability. Further, the bankruptcy court may take other actions that prevent us from foreclosing on the property. Any bankruptcy proceeding will, at a minimum, delay us in achieving our investment objectives and may adversely affect our profitability.

Investment in non‑conforming and non‑investment-grade loans may involve increased risk of loss.

Loans we may acquire may not conform to conventional loan criteria applied by traditional lenders and may not be rated or may be rated as non‑investment grade. Non-investment-grade ratings for these loans typically result from the overall leverage of the loans, the lack of a strong operating history for the properties underlying the loans, the borrowers’ credit history, the properties’ underlying cash flow or other factors. As a result, loans we acquire may have a higher risk of default and loss than conventional loans. Any loss we incur may reduce distributions to stockholders and adversely affect the value of our common stock.

Our investments in subordinated loans may be subject to losses.

We may acquire subordinated loans. In the event a borrower defaults on a subordinated loan and lacks sufficient capacity to cure the default, we may suffer a loss of principal or interest. In the event a borrower declares bankruptcy, we may not have full recourse to the assets of the borrower, or the assets of the borrower may not be sufficient to satisfy the loan. If a borrower defaults on our loan or on debt senior to our loan, or in the event of a borrower bankruptcy, our loan will be satisfied only after the senior debt is paid in full. Where debt senior to our loan exists, the presence of intercreditor arrangements may limit our ability to amend our loan documents, assign our loans, accept prepayments, exercise our remedies (through “standstill periods”), and control decisions made in bankruptcy proceedings relating to borrowers.

Investments in non-performing real estate assets involve greater risks than investments in stabilized, performing assets and make our future performance more difficult to predict.

Traditional performance metrics of real estate assets are generally not as reliable for non-performing real estate assets as they are for performing real estate assets. Non-performing properties, for example, do not have stabilized occupancy rates. Similarly, non-performing loans do not have a consistent stream of loan servicing or interest payments. In addition, for non-performing loans, often there is greater uncertainty that the face amount of the note will be paid in full.

In addition, we may pursue more than one strategy to create value in a non-performing real estate investment. With respect to a property, these strategies may include development, redevelopment, or lease-up of such property. With respect to a loan, these strategies may include negotiating with the borrower for a reduced payoff, restructuring the terms of the loan or enforcing our rights as lender under the loan and foreclosing on the collateral securing the loan.

The factors described above make it challenging to evaluate non-performing investments.

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Delays in restructuring or liquidating non‑performing real estate securities could reduce the return on our stockholders’ investment.

Real estate securities may become non‑performing after acquisition for a wide variety of reasons. Such non‑performing real estate investments may require a substantial amount of workout negotiations or restructuring, which may entail, among other things, a substantial reduction in the interest rate and a substantial write‑down of such loan or asset. However, even if a restructuring is successfully accomplished, upon maturity of such real estate security, replacement “takeout” financing may not be available. We may find it necessary or desirable to foreclose on some of the collateral securing one or more of our investments. Inter-creditor provisions may substantially interfere with our ability to do so. Even if foreclosure is an option, the foreclosure process can be lengthy and expensive. Borrowers often resist foreclosure actions by asserting numerous claims, counterclaims and defenses, including, without limitation, lender liability claims and defenses, in an effort to prolong the foreclosure action. In some states, foreclosure actions can take up to several years or more to litigate. At any time during the foreclosure proceedings, the borrower may file for bankruptcy, which would have the effect of staying the foreclosure action and further delaying the foreclosure process. Foreclosure litigation tends to create a negative public image of the collateral property and may result in disrupting ongoing leasing and management of the property. Foreclosure actions by senior lenders may substantially affect the amount that we may earn or recover from an investment.

We depend on debtors for our revenue, and, accordingly, our revenue and our ability to make distributions to our stockholders will be dependent upon the success and economic viability of such debtors.

The success of our real estate-related debt investments such as loans and debt and derivative securities materially depend on the financial stability of the debtors underlying such investments. The inability of a single major debtor or a number of smaller debtors to meet their payment obligations could result in reduced revenue or losses. In the event of a debtor default or bankruptcy, we may experience delays in enforcing our rights as a creditor, and such rights may be subordinated to the rights of other creditors. These events could negatively affect the cash available for distribution to our stockholders and the value of our stockholders’ investment.

Prepayments can adversely affect the yields on our investments.

Prepayments on debt instruments, where permitted under the debt documents, are influenced by changes in current interest rates and a variety of economic, geographic and other factors beyond our control, and consequently, such prepayment rates cannot be predicted with certainty. If we are unable to invest the proceeds of such prepayments received, the yield on our portfolio will decline. Under certain interest rate and prepayment scenarios, we may fail to recoup fully our cost of acquisition of certain investments.

Our investments in real estate-related debt securities and preferred and common equity securities will be subject to the specific risks relating to the particular issuer of the securities and may involve greater risk of loss than secured debt financings.

Subject to certain REIT asset and income tests, we may make equity investments in REITs and other real estate companies. We may target a public company that owns commercial real estate or real estate-related assets when we believe its stock is trading at a discount to that company’s net asset value. We may eventually seek to acquire or gain a controlling interest in the companies that we target. We do not expect our noncontrolling equity investments in other public companies to represent a substantial portion of our assets at any one time. We may also invest in debt securities and preferred equity securities issued by REITs and other real estate companies. Our investments in debt securities and preferred and common equity securities will involve special risks relating to the particular issuer of the securities, including the financial condition and business outlook of the issuer. Issuers that are REITs and other real estate companies are subject to the inherent risks associated with real estate and real estate-related debt investments. Furthermore, debt securities and preferred and common equity securities may involve greater risk of loss than secured debt financings due to a variety of factors, including that such investments are generally unsecured and may also be subordinated to other obligations of the issuer. As a result, investments in debt securities and preferred and common equity securities are subject to risks of (i) limited liquidity in the secondary trading market, (ii) substantial market price volatility resulting from changes in prevailing interest rates, (iii) subordination to the prior claims of banks and other senior lenders to the issuer, (iv) the operation of mandatory sinking fund or call/redemption provisions during periods of declining interest rates that could cause the issuer to reinvest redemption proceeds in lower yielding assets, (v) the possibility that earnings of the issuer may be insufficient to meet its debt service and distribution obligations and (vi) the declining creditworthiness and potential for insolvency of the issuer during periods of rising interest rates and economic downturn. These risks may adversely affect the value of outstanding debt securities and preferred and common equity securities and the ability of the issuers thereof to make principal, interest or distribution payments to us.

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Any credit ratings assigned to our investments will be subject to ongoing evaluations and revisions, and we cannot assure you that those ratings will not be downgraded.

Some of our investments may be rated by Moody’s Investors Service, Fitch Ratings or Standard & Poor's. Any credit ratings on our investments are subject to ongoing evaluation by credit rating agencies, and we cannot assure you that any such ratings will not be changed or withdrawn by a rating agency in the future if, in its judgment, circumstances warrant. If rating agencies assign a lower-than-expected rating or reduce or withdraw, or indicate that they may reduce or withdraw, their ratings of our investments in the future, the value of these investments could significantly decline, which would adversely affect the value of our investment portfolio and could result in losses upon disposition or the failure of borrowers to satisfy their debt service obligations to us. In addition, changes to the methodology and assumptions in rating commercial mortgage-backed securities by rating agencies may decrease the amount or availability of new issue commercial mortgage-backed securities rated in the highest investment grade rating category.

Risks Associated with Debt Financing

We have incurred, and may continue to incur, mortgage indebtedness and other borrowings, which increases our risk of loss due to foreclosure.

We have obtained, and may continue to obtain, lines of credit and long-term financing that may be secured by our properties and other assets. In some instances, we may acquire real properties by financing a portion of the price of the properties and mortgaging or pledging some or all of the properties purchased as security for that debt. We have also incurred, and may continue to incur, mortgage debt on properties that we already own in order to obtain funds to acquire additional properties. In addition, we may borrow as necessary or advisable to ensure that we maintain our qualification as a REIT for federal income tax purposes, including borrowings to satisfy the REIT requirement that we distribute at least 90% of our annual REIT taxable income to our stockholders (computed without regard to the dividends paid deduction and excluding net capital gain). We, however, can give you no assurance that we will be able to obtain such borrowings on satisfactory terms.

If we do mortgage a property and there is a shortfall between the cash flow from that property and the cash flow needed to service mortgage debt on that property, then the amount of cash available for distributions to stockholders may be reduced. In addition, incurring mortgage debt increases the risk of loss of a property since defaults on indebtedness secured by a property may result in lenders initiating foreclosure actions. In that case, we could lose the property securing the loan that is in default, reducing the value of your investment. For tax purposes, a foreclosure of any of our properties would be treated as a sale of the property for a purchase price equal to the outstanding balance of the debt secured by the mortgage. If the outstanding balance of the debt secured by the mortgage exceeds our tax basis in the property, we would recognize taxable income on foreclosure even though we would not necessarily receive any cash proceeds. We may give full or partial guaranties to lenders of mortgage debt on behalf of the entities that own our properties. When we give a guaranty on behalf of an entity that owns one of our properties, we will be responsible to the lender for satisfaction of the debt if it is not paid by such entity. If any mortgages contain cross-collateralization or cross-default provisions, a default on a single property could affect multiple properties.

We may also obtain recourse debt to finance our acquisitions and meet our REIT distribution requirements. If we have insufficient income to service our recourse debt obligations, our lenders could institute proceedings against us to foreclose upon our assets. If a lender successfully forecloses upon any of our assets, our ability to pay cash distributions to our stockholders will be limited and you could lose all or part of your investment.

High mortgage interest rates may make it difficult for us to finance or refinance properties, which could reduce the number of properties we can acquire, our net income and the amount of cash distributions we can make.

If mortgage debt is unavailable at reasonable interest rates, we may not be able to finance the purchase of properties. If we place mortgage debt on properties, we run the risk of being unable to refinance the properties when the loans become due, or of being unable to refinance on favorable terms. If interest rates are higher when we refinance the properties, our income could be reduced. If any of these events occur, our cash flow would be reduced. This, in turn, would reduce cash available for distribution to you and may hinder our ability to raise more capital by issuing more stock or by borrowing more money.

We may not be able to access financing sources on attractive terms, which could adversely affect our ability to execute our business plan.

We may finance our assets over the long term through a variety of means, including credit facilities, issuance of commercial mortgage-backed securities, and other structured financings. Our ability to execute this strategy will depend on various conditions

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in the markets for financing in this manner that are beyond our control, including lack of liquidity and greater credit spreads. We cannot be certain that these markets will remain an efficient source of long‑term financing for our assets. If our strategy is not viable, we will have to find alternative forms of long‑term financing for our assets. This could subject us to more recourse indebtedness and the risk that debt service on less efficient forms of financing would require a larger portion of our cash flows, thereby reducing cash available for distribution to our stockholders and funds available for operations, as well as for future business opportunities.

Disruptions in the financial and real estate markets could adversely affect the multifamily property sector’s ability to obtain financing from Fannie Mae and Freddie Mac, which could adversely impact us.

Fannie Mae and Freddie Mac are major sources of financing for the multifamily sector. Until recently, Fannie Mae and Freddie Mac had reported substantial losses and required significant amounts of additional capital. These losses coupled with the credit market’s poor perception of Fannie Mae and Freddie Mac, add to the considerable uncertainty surrounding the capital structure of both Fannie Mae and Freddie Mac. In response to the deteriorating financial condition of Fannie Mae and Freddie Mac and the credit market disruption that began in 2007, the U.S. Congress and Treasury undertook a series of actions to stabilize these government-sponsored enterprises and the financial markets. Pursuant to legislation enacted in 2008, the U.S. government placed both Fannie Mae and Freddie Mac under its conservatorship. Despite additional funding for both government-sponsored entities, the U.S. government has stated that it remains committed to reducing their portfolios. In August 2012, the U.S. Treasury modified its investment in Fannie Mae and Freddie Mac to accelerate the reduction of Fannie Mae’s and Freddie Mac’s investment portfolios and to require a sweep of all quarterly profits generated by Fannie Mae and Freddie Mac. In May 2014, the U.S. Senate Banking Committee approved legislation to wind down Fannie Mae and Freddie Mac and redesign the U.S. mortgage finance system, which legislation has to date not been acted on in the broader Senate. If new U.S. government legislation or regulations (i) heighten Fannie Mae’s and Freddie Mac’s underwriting standards, (ii) adversely affect interest rates and (iii) continue to reduce the amount of capital they can make available to the multifamily sector, it could reduce or remove entirely a vital resource for multifamily financing. Any potential reduction in loans, guarantees and credit enhancement arrangements from Fannie Mae and Freddie Mac could jeopardize the effectiveness of the multifamily sector’s available financing and decrease the amount of available liquidity and credit that could be used to acquire and diversify our portfolio of multifamily assets as well as dispose of our multifamily assets upon our liquidation.

Lenders may require us to enter into restrictive covenants relating to our operations, which could limit our ability to make distributions to our stockholders.

When providing financing, a lender may impose restrictions on us that affect our distribution and operating policies and our ability to incur additional debt. Loan documents we enter into may contain covenants that limit our ability to further mortgage the property, discontinue insurance coverage or replace our Advisor. These or other limitations may limit our flexibility and our ability to achieve our operating plans.

Increases in interest rates could increase the amount of our debt payments and limit our ability to pay distributions to our stockholders.

We expect that we will incur additional indebtedness in the future. Increases in interest rates may increase our interest costs, which would reduce our cash flows and our ability to pay distributions. In addition, if we need to repay existing debt during periods of higher interest rates, we might have to sell one or more of our investments in order to repay the debt, which sale at that time might not permit realization of the maximum return on such investments.

We have broad authority to incur debt, and high debt levels could hinder our ability to make distributions and decrease the value of your investment.

Although, based on current lending market conditions, we do not expect to incur debt financing that would cause our total liabilities to exceed approximately 55% to 65% of the aggregate value of our assets, our charter limits our leverage to 300% of our net assets, and we may exceed this limit with the approval of the conflicts committee of our board of directors. High debt levels would cause us to incur higher interest charges and higher debt service payments and may also be accompanied by restrictive covenants. These factors could limit the amount of cash we have available to distribute and could result in a decline in the value of your investment.

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Federal Income Tax Risks

Our failure to continue to qualify as a REIT would subject us to federal income tax and reduce cash available for distribution to stockholders.

We elected to be taxed as a REIT under the Internal Revenue Code commencing with our taxable year ended December 31, 2010. We intend to continue to operate in a manner so as to continue to qualify as a REIT for federal income tax purposes. Qualification as a REIT involves the application of highly technical and complex Internal Revenue Code provisions for which only a limited number of judicial and administrative interpretations exist. Even an inadvertent or technical mistake could jeopardize our REIT status. Our continued qualification as a REIT will depend on our satisfaction of certain asset, income, organizational, distribution, stockholder ownership and other requirements on a continuing basis. Moreover, new tax legislation, administrative guidance or court decisions, in each instance potentially with retroactive effect, could make it more difficult or impossible for us to continue to qualify as a REIT. If we fail to continue to qualify as a REIT in any taxable year, we would be subject to federal and applicable state and local income tax on our taxable income at corporate rates, in which case we might be required to borrow or liquidate some investments in order to pay the applicable tax. Losing our REIT status would reduce our net income available for investment or distribution to you because of the additional tax liability. In addition, distributions to you would no longer qualify for the dividends-paid deduction and we would no longer be required to make distributions. Furthermore, if we fail to qualify as a REIT in any taxable year for which we have elected to be taxed as a REIT, we would generally be unable to elect REIT status for the four taxable years following the year in which our REIT status is lost.

Complying with REIT requirements may force us to borrow funds to make distributions to you or otherwise depend on external sources of capital to fund such distributions.

To continue to qualify as a REIT, we are required to distribute annually at least 90% of our taxable income, subject to certain adjustments, to our stockholders. To the extent that we satisfy the distribution requirement, but distribute less than 100% of our taxable income, we will be subject to federal corporate income tax on our undistributed taxable income. In addition, we may elect to retain and pay income tax on our net long-term capital gain. In that case, if we so elect, a stockholder would be taxed on its proportionate share of our undistributed long-term gain and would receive a credit or refund for its proportionate share of the tax we paid. A stockholder, including a tax-exempt or foreign stockholder, would have to file a federal income tax return to claim that credit or refund. Furthermore, we will be subject to a 4% nondeductible excise tax if the actual amount that we distribute to our stockholders in a calendar year is less than a minimum amount specified under federal tax laws.

From time-to-time, we may generate taxable income greater than our net income (loss) for GAAP. In addition, our taxable income may be greater than our cash flow available for distribution to you as a result of, among other things, investments in assets that generate taxable income in advance of the corresponding cash flow from the assets (for instance, if a borrower defers the payment of interest in cash pursuant to a contractual right or otherwise).

If we do not have other funds available in the situations described in the preceding paragraphs, we could be required to borrow funds on unfavorable terms, sell investments at disadvantageous prices or find another alternative source of funds to make distributions sufficient to enable us to distribute enough of our taxable income to satisfy the REIT distribution requirement and to avoid corporate income tax and the 4% excise tax in a particular year. These alternatives could increase our costs or reduce our equity.

Because of the distribution requirement, it is unlikely that we will be able to fund all future capital needs, including capital needs in connection with investments, from cash retained from operations. As a result, to fund future capital needs, we likely will have to rely on third-party sources of capital, including both debt and equity financing, which may or may not be available on favorable terms or at all. Our access to third-party sources of capital will depend upon a number of factors, including our current and potential future earnings and cash distributions.

Despite our qualification for taxation as a REIT for federal income tax purposes, we may be subject to other tax liabilities that reduce our cash flow and our ability to make distributions to you.

Despite our qualification for taxation as a REIT for federal income tax purposes, we may be subject to certain federal, state and local taxes on our income and assets, including taxes on any undistributed income or property. Any of these taxes would decrease cash available for distribution to you. For instance:

• In order to continue to qualify as a REIT, we must distribute annually at least 90% of our REIT taxable income (which is determined without regard to the dividends paid deduction or net capital gain for this purpose) to you.

• To the extent that we satisfy the distribution requirement but distribute less than 100% of our REIT taxable income, we will be subject to federal corporate income tax on the undistributed income.

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• We will be subject to a 4% nondeductible excise tax on the amount, if any, by which distributions we pay in any calendar year are less than the sum of 85% of our ordinary income, 95% of our capital gain net income and 100% of our undistributed income from prior years.

• If we have net income from the sale of foreclosure property that we hold primarily for sale to customers in the ordinary course of business or other non-qualifying income from foreclosure property, we must pay a tax on that income at the highest corporate income tax rate.

• If we sell an asset, other than foreclosure property, that we hold primarily for sale to customers in the ordinary course of business and do not qualify for a safe harbor in the Internal Revenue Code, our gain would be subject to the 100% “prohibited transaction” tax.

• Any domestic taxable REIT subsidiary, or TRS, of ours will be subject to federal corporate income tax on its income, and on any non-arm’s-length transactions between us and any TRS, for instance, excessive rents charged to a TRS could be subject to a 100% tax.

• We may be subject to tax on income from certain activities conducted as a result of taking title to collateral.

• We may be subject to state or local income, property and transfer taxes, such as mortgage recording taxes.

Complying with REIT requirements may cause us to forego otherwise attractive opportunities or liquidate otherwise attractive investments.

To continue to qualify as a REIT for federal income tax purposes, we must continually satisfy tests concerning, among other things, the sources of our income, the nature and diversification of our assets, the amounts we distribute to stockholders and the ownership of our stock. As discussed above, we may be required to make distributions to stockholders at disadvantageous times or when we do not have funds readily available for distribution. Additionally, we may be unable to pursue investments that would be otherwise attractive to us in order to satisfy the requirements for qualifying as a REIT.

We must also ensure that at the end of each calendar quarter, at least 75% of the value of our assets consists of cash, cash items, government securities and qualified real estate assets, including certain mortgage loans and mortgage-backed securities. The remainder of our investment in securities (other than government securities and qualified real estate assets) generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer. In addition, in general, no more than 5% of the value of our assets can consist of the securities of any one issuer (other than government securities and qualified real estate assets) and no more than 25% of the value of our gross assets (20% for tax years after 2017) may be represented by securities of one or more TRSs. Finally, for the taxable years after 2015, no more than 25% of our assets may consist of debt investments that are issued by “publicly offered REITs” and would not otherwise be treated as qualifying real estate assets. If we fail to comply with these requirements at the end of any calendar quarter, we must correct such failure within 30 days after the end of the calendar quarter to avoid losing our REIT status and suffering adverse tax consequences, unless certain relief provisions apply. As a result, compliance with the REIT requirements may hinder our ability to operate solely on the basis of profit maximization and may require us to liquidate investments from our portfolio, or refrain from making, otherwise attractive investments. These actions could have the effect of reducing our income and amounts available for distribution to stockholders.

Our acquisition of debt or securities investments may cause us to recognize income for federal income tax purposes even though no cash payments have been received on the debt investments.

We may acquire debt or securities investments in the secondary market for less than their face amount. The amount of such discount will generally be treated as a “market discount” for federal income tax purposes. If these debt or securities investments provide for “payment-in-kind” interest, we may recognize “original issue discount,” or OID, for federal income tax purposes. Moreover, we may acquire distressed debt investments that are subsequently modified by agreement with the borrower. If the amendments to the outstanding debt constitute “significant modifications” under the applicable Treasury Regulations, the modified debt may be considered to have been reissued to us in a debt-for-debt exchange with the borrower. In that event, if the debt is considered to be “publicly traded” for federal income tax purposes, the modified debt in our hands may be considered to have been issued with OID to the extent the fair market value of the modified debt is less than the principal amount of the outstanding debt. In the event the debt is not considered to be “publicly traded” for federal income tax purposes, we may be required to recognize taxable income to the extent that the principal amount of the modified debt exceeds our cost of purchasing it. Also, certain loans that we originate and later modify and certain previously modified debt we acquire in the secondary market may be considered to have been issued with the OID at the time it was modified.

In general, we will be required to accrue OID on a debt instrument as taxable income in accordance with applicable federal income tax rules even though no cash payments may be received on such debt instrument on a current basis.

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In the event a borrower with respect to a particular debt instrument encounters financial difficulty rendering it unable to pay stated interest as due, we may nonetheless be required to continue to recognize the unpaid interest as taxable income. Similarly, we may be required to accrue interest income with respect to subordinate mortgage-backed securities at the stated rate regardless of when their corresponding cash payments are received.

In order to meet the REIT distribution requirements, it might be necessary for us to arrange for short-term, or possibly long-term borrowings, or to pay distributions in the form of our shares or other taxable in-kind distributions of property. We may need to borrow funds at times when the market conditions are unfavorable. Such borrowings could increase our costs and reduce the value of your investment. In the event in-kind distributions are made, your tax liabilities associated with an investment in our common stock for a given year may exceed the amount of cash we distribute to our stockholders during such year.

Complying with REIT requirements may limit our ability to hedge effectively.

The REIT provisions of the Internal Revenue Code may limit our ability to hedge our operations effectively. Our aggregate gross income from non-qualifying hedges, fees and certain other non-qualifying sources cannot exceed 5% of our annual gross income. As a result, we might have to limit our use of advantageous hedging techniques or implement those hedges through a TRS. Any hedging income earned by a TRS would be subject to federal, state and local income tax at regular corporate rates. This could increase the cost of our hedging activities or expose us to greater risks associated with interest rate or other changes than we would otherwise incur.

Liquidation of assets may jeopardize our REIT qualification.

To continue to qualify as a REIT, we must comply with requirements regarding our assets and our sources of income. If we are compelled to liquidate our investments to satisfy our obligations to our lenders, we may be unable to comply with these requirements, ultimately jeopardizing our qualification as a REIT, or we may be subject to a 100% prohibited transaction tax on any resulting gain if we sell assets that are treated as dealer property or inventory.

The prohibited transactions tax may limit our ability to engage in transactions, including disposition of assets and certain methods of securitizing loans, which would be treated as sales for federal income tax purposes.

A REIT’s net income from prohibited transactions is subject to a 100% tax. In general, prohibited transactions are sales or other dispositions of dealer property, other than foreclosure property, but including loans held primarily for sale to customers in the ordinary course of business. We might be subject to the prohibited transaction tax if we were to dispose of or securitize loans in a manner that is treated as a sale of the loans, for federal income tax purposes. In order to avoid the prohibited transactions tax, we may choose not to engage in certain sales of loans and may limit the structures we use for any securitization financing transactions, even though such sales or structures might otherwise be beneficial to us. Additionally, we may be subject to the prohibited transaction tax upon a disposition of real property. Although a safe-harbor exception to prohibited transaction treatment is available, we cannot assure you that we can comply with such safe harbor or that we will avoid owning property that may be characterized as held primarily for sale to customers in the ordinary course of our trade or business. Consequently, we may choose not to engage in certain sales of real property or may conduct such sales through a TRS.

It may be possible to reduce the impact of the prohibited transaction tax by conducting certain activities through a TRS. However, to the extent that we engage in such activities through a TRS, the income associated with such activities will be subject to a corporate income tax. In addition, the IRS may attempt to ignore or otherwise recast such activities in order to impose a prohibited transaction tax on us, and there can be no assurance that such recast will not be successful.

We also may not be able to use secured financing structures that would create taxable mortgage pools, other than in a TRS or through a subsidiary REIT.

We may recognize substantial amounts of REIT taxable income, which we would be required to distribute to you, in a year in which we are not profitable under GAAP principles or other economic measures.

We may recognize substantial amounts of REIT taxable income in years in which we are not profitable under GAAP or other economic measures as a result of the differences between GAAP and tax accounting methods. For instance, certain of our assets will be marked-to-market for GAAP purposes but not for tax purposes, which could result in losses for GAAP purposes that are not recognized in computing our REIT taxable income. Additionally, we may deduct our capital losses only to the extent of our capital gains in computing our REIT taxable income for a given taxable year. Consequently, we could recognize substantial amounts of REIT taxable income and would be required to distribute such income to you, in a year in which we are not profitable under GAAP or other economic measures.

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We may distribute our common stock in a taxable distribution, in which case our stockholder may sell shares of our common stock to pay tax on such distributions, and our stockholders may receive less in cash than the amount of the dividend that is taxable.

We may make taxable distributions that are payable in cash and common stock. The IRS has issued private letter rulings to other REITs treating certain distributions that are paid partly in cash and partly in stock as taxable distributions that would satisfy the REIT annual distribution requirement and qualify for the dividends paid deduction for federal income tax purposes. Those rulings may be relied upon only by taxpayers to whom they were issued, but we could request a similar ruling from the IRS. Accordingly, it is unclear whether and to what extent we will be able to make taxable distributions payable in cash and common stock. If we made a taxable dividend payable in cash and common stock, taxable stockholders receiving such distributions will be required to include the dividend as taxable income to the extent of our current and accumulated earnings and profits, as determined for federal income tax purposes. As a result, stockholders may be required to pay income tax with respect to such distributions in excess of the cash distributions received. If a U.S. stockholder sells the common stock that it receives as a dividend in order to pay this tax, the sales proceeds may be less than the amount recorded in earnings with respect to the dividend, depending on the market price of our common stock at the time of the sale. Furthermore, with respect to certain non-U.S. stockholders, we may be required to withhold U.S. federal income tax with respect to such dividends, including in respect of all or a portion of such dividend that is payable in common stock.

REIT distribution requirements could adversely affect our ability to execute our business plan.

We generally must distribute annually at least 90% of our REIT taxable income (which is determined without regard to the dividends paid deduction or net capital gain for this purpose) in order to continue to qualify as a REIT. We intend to make distributions to our stockholders to comply with the REIT requirements of the Internal Revenue Code and to avoid corporate income tax and the 4% excise tax. We may be required to make distributions to stockholders at times when it would be more advantageous to reinvest cash in our business or when we do not have funds readily available for distribution. Thus, compliance with the REIT requirements may hinder our ability to operate solely on the basis of maximizing profits.

Our qualification as a REIT could be jeopardized as a result of an interest in joint ventures or investment funds.

We may hold certain limited partner or non-managing member interests in partnerships or limited liability companies that are joint ventures or investment funds. If a partnership or limited liability company in which we own an interest takes or expects to take actions that could jeopardize our qualification as a REIT or require us to pay tax, we may be forced to dispose of our interest in such entity. In addition, it is possible that a partnership or limited liability company could take an action which could cause us to fail a REIT gross income or asset test, and that we would not become aware of such action in time to dispose of our interest in the partnership or limited liability company or take other corrective action on a timely basis. In that case, we could fail to continue to qualify as a REIT unless we are able to qualify for a statutory REIT “savings” provision, which may require us to pay a significant penalty tax to maintain our REIT qualification.

Distributions paid by REITs do not qualify for the reduced tax rates that apply to other corporate distributions.

The maximum tax rate for “qualified dividends” paid by corporations to non-corporate stockholders is currently 20%. Distributions paid by REITs, however, generally are taxed at ordinary income rates (subject to a maximum rate of 39.6% for non-corporate stockholders), rather than the preferential rate applicable to qualified dividends.

Legislative or regulatory tax changes could adversely affect us or stockholders.

At any time, the federal income tax laws can change. Laws and rules governing REITs or the administrative interpretations of those laws may be amended. Any of those new laws or interpretations may take effect retroactively and could adversely affect us or stockholders.

Retirement Plan Risks

If the fiduciary of an employee benefit plan subject to ERISA (such as a profit sharing, Section 401(k) or pension plan) or an owner of a retirement arrangement subject to Section 4975 of the Internal Revenue Code (such as an IRA) fails to meet the fiduciary and other standards under ERISA or the Internal Revenue Code as a result of an investment in our stock, the fiduciary could be subject to penalties and other sanctions.

There are special considerations that apply to employee benefit plans subject to ERISA (such as profit sharing, Section 401(k) or pension plans) and other retirement plans or accounts subject to Section 4975 of the Internal Revenue Code (such as an

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IRA) that are investing in our shares. Fiduciaries and IRA owners investing the assets of such a plan or account in our common stock should satisfy themselves that:

• the investment is consistent with their fiduciary and other obligations under ERISA and the Internal Revenue Code;

• the investment is made in accordance with the documents and instruments governing the plan or IRA, including the plan’s or account’s investment policy;

• the investment satisfies the prudence and diversification requirements of Sections 404(a)(1)(B) and 404(a)(1)(C) of ERISA and other applicable provisions of ERISA and the Internal Revenue Code;

• the investment in our shares, for which no public market currently exists, is consistent with the liquidity needs of the plan or IRA;

• the investment will not produce an unacceptable amount of “unrelated business taxable income” for the plan or IRA;

• our stockholders will be able to comply with the requirements under ERISA and the Internal Revenue Code to value the assets of the plan or IRA annually; and

• the investment will not constitute a prohibited transaction under Section 406 of ERISA or Section 4975 of the Internal Revenue Code.

Failure to satisfy the fiduciary standards of conduct and other applicable requirements of ERISA and the Internal Revenue Code may result in the imposition of civil and criminal penalties and could subject the fiduciary to claims for damages or for equitable remedies, including liability for investment losses. In addition, if an investment in our shares constitutes a prohibited transaction under ERISA or the Internal Revenue Code, the fiduciary or IRA owner who authorized or directed the investment may be subject to the imposition of excise taxes with respect to the amount invested. In addition, the investment transaction must be undone. In the case of a prohibited transaction involving an IRA owner, the IRA may be disqualified as a tax-exempt account and all of the assets of the IRA may be deemed distributed and subjected to tax. ERISA plan fiduciaries and IRA owners should consult with counsel before making an investment in our common stock.

If our assets are deemed to be plan assets, the Advisor and we may be exposed to liabilities under Title I of ERISA and the Internal Revenue Code.

In some circumstances where an ERISA plan holds an interest in an entity, the assets of the entity are deemed to be ERISA plan assets unless an exception applies. This is known as the “look-through rule.” Under those circumstances, the obligations and other responsibilities of plan sponsors, plan fiduciaries and plan administrators, and of parties in interest and disqualified persons, under Title I of ERISA or Section 4975 of the Internal Revenue Code, may be applicable, and there may be liability under these and other provisions of ERISA and the Internal Revenue Code. We believe that our assets should not be treated as plan assets because the shares should qualify as “publicly-offered securities” that are exempt from the look-through rules under applicable Treasury Regulations. We note, however, that because certain limitations are imposed upon the transferability of shares so that we may qualify as a REIT, and perhaps for other reasons, it is possible that this exemption may not apply. If that is the case, and if the Advisor or we are exposed to liability under ERISA or the Internal Revenue Code, our performance and results of operations could be adversely affected. Prior to making an investment in us, you should consult with your legal and other advisors concerning the impact of ERISA and the Internal Revenue Code on your investment and our performance.

If you invest in our shares through an IRA or other retirement plan, you may be limited in your ability to withdraw required minimum distributions.

If you establish an IRA or other retirement plan through which you invest in our shares, federal law may require you to withdraw required minimum distributions ("RMDs") from such plan in the future. Our share redemption program limits the amount of redemptions that can be made in a given year. Additionally, you will not be eligible to have your shares redeemed until you have held your shares for at least one year. As a result, you may not be able to have your shares redeemed at a time in which you need liquidity to satisfy the RMD requirements under your IRA or other retirement plan. Even if you are able to have your shares redeemed, such redemption may be at a price less than the price at which the shares were initially purchased, depending on how long you have held your shares. If you fail to withdraw RMDs from your IRA or other retirement plan, you may be subject to certain tax penalties.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

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ITEM 2.     PROPERTIES

Real Estate Investments

As of December 31, 2016, we owned interests in 31 multifamily properties. The following is a summary of our real estate properties (dollars in thousands):

Multifamily Community Name		City and State	Number of Units	Date of Acquisition (1)	Purchase Price (2)		Year of Construction	Average Unit Size (Sq. Ft.)	Physical Occupancy Rate (3)	Effective Monthly Revenue per Unit (4)
Vista Apartment Homes	(5)(6)	Philadelphia, PA	133	6/17/2011	$	12,000	1961	876	95.5%	$	1,517
Cannery Lofts	(7) (8)	Dayton, OH	156	5/13/2011	7,100		1838	1,030	98.1%	1,175
Williamsburg		Cincinnati, OH	976	6/20/2012	41,250		1966	1,099	88.3%	956
Mosaic		Oklahoma City, OK	216	12/6/2012	2,050		1974	721	81.9%	647
Deerfield	(9)	Hermantown, MN	166	3/21/2012	10,300		1993	1,539	98.2%	1,360
Retreat at Rocky Ridge		Hoover, AL	206	4/18/2013	8,500		1986	869	90.3%	900
Trailpoint at the Woodlands		Houston, TX	271	6/24/2013	27,200		1981	859	91.9%	1,142
The Westside Apartments		Plano, TX	412	7/25/2013	32,200		1984	862	91.5%	1,203
Tech Center Square		Newport News, VA	208	9/9/2013	18,250		1985	803	88.9%	1,107
Verona Apartment Homes		Littleton, CO	276	9/30/2013	30,600		1985	744	91.7%	1,306
Skyview Apartment Homes		Westminster, CO	224	9/30/2013	24,250		1985	748	94.6%	1,246
Maxwell Townhomes		San Antonio, TX	314	12/16/2013	22,500		1982	1,015	95.2%	1,154
Meridian Pointe		Burnsville, MN	339	12/20/2013	33,149		1988	982	86.4%	1,279
Evergreen at Coursey Place	(10)	Baton Rouge, LA	352	1/28/2014	15,499		2003	999	89.8%	1,197
Pinehurst	(11)	Kansas City, MO	146	1/28/2014	3,588		1983	816	95.2%	825
Pheasant Run	(11)	Lee's Summit, MO	160	1/28/2014	4,277		1985	700	97.5%	854
Retreat at Shawnee	(11)	Shawnee, KS	342	1/28/2014	5,369		1984	674	97.7%	745
Stone Ridge	(12)	Columbia, SC	188	1/28/2014	5,176		1974	1026	93.1%	799
Pines of York	(13)	Yorktown, VA	248	1/28/2014	8,087		1974	987	92.3%	1,053
The Estates at Johns Creek		Alpharetta, GA	403	3/28/2014	70,500		1999	1457	90.3%	1,806
Chisholm Place		Plano, TX	142	5/5/2014	15,000		1981	1149	95.8%	1,357
Perimeter Circle		Atlanta, GA	194	5/19/2014	29,500		1995	961	91.8%	1,487
Perimeter 5550		Atlanta, GA	165	5/19/2014	22,250		1995	906	94.6%	1,317
Aston at Cinco Ranch		Katy, TX	228	6/26/2014	32,300		2000	1015	90.8%	1,392
Sunset Ridge		San Antonio, TX	324	9/4/2014	35,000		1949	861	83.6%	1,261
Calloway at Las Colinas		Irving, TX	536	9/29/2014	48,500		1984	850	92.7%	1,122
South Lamar Village		Austin, TX	208	2/26/2015	24,000		1981	729	81.7%	1,352
Heritage Pointe		Gilbert, AZ	458	3/19/2015	36,000		1986	697	90.4%	865
Yorba Linda		Yorba Linda, CA	400	6/1/2015	118,000		1986	995	92.0%	1,843
Point Bonita Apartment Homes		Chula Vista, CA	295	6/16/2015	49,050		1979	716	92.2%	1,479
Providence in the Park		Arlington, TX	524	12/22/2016	63,200		1997	893	96.8%	1,164
			9,210

(1) The date of acquisition reflects the date we acquired the note or the initial joint venture interest, where applicable.

(2) Purchase price excludes closing costs and acquisition expenses. For properties acquired through foreclosure, the purchase price reflects the contract purchase price of the note.

(3) Physical occupancy rate is defined as the units occupied as of December 31, 2016 divided by the total number of residential units

(4) Effective monthly rental revenue per unit has been calculated based on the leases in effect as of December 31, 2016, adjusted for any tenant concessions, such as free rent. Effective monthly rental revenue per unit only includes base rents for occupied units, including affordable housing payments and subsidies. It includes other charges for storage, parking, pets, cleaning, clubhouse or other miscellaneous amounts.

(5) In addition to its apartment units, Vista Apartment Homes contains five commercial spaces, one of which is occupied, and a number of antennae on the roof of the property that generate additional income.

(6) Vista Apartment Homes originally served as the collateral for a non-performing promissory note that we purchased on June 17, 2011. The contract purchase price for the note was $12.0 million, excluding closing costs. On August 2, 2011, we were the successful bidder at a sheriff's sale and formally received title to the property.

(7) In addition to its apartment units, Cannery Lofts contains 12 commercial spaces, nine of which are occupied, and one parking garage with parking spaces available to rent.

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(8) Cannery Lofts originally served as the collateral for a non-performing note that we purchased on May 13, 2011. On December 21, 2011, we entered into a settlement agreement with the borrower whereby the borrower agreed to a consensual foreclosure of the Cannery Note. We formally received title to the property on June 6, 2012.

(9) Deerfield originally served as the collateral for a non-performing note that we purchased on March 21, 2012. On July 19, 2012, we were the successful bidder at a foreclosure sale and we formally received title to the property on January 22, 2013.

(10) Joint venture interests in this property were originally purchased as a part of the Paladin acquisition in January 2014. The remaining interests in this joint venture were acquired on March 31, 2014.

(11) Joint venture interests in this property were originally purchased as a part of the Paladin acquisition in January 2014. The remaining interests in this joint venture were acquired on July 1, 2014.

(12) Joint venture interests in this property were originally purchased as a part of the Paladin acquisition in January 2014. Purchase price includes allocated portion of total Paladin purchase price.

(13) Joint venture interests in this property were originally purchased as a part of the Paladin acquisition in January 2014. The remaining interests in this joint venture were acquired on November 25, 2014.

Paladin Acquisition - 2014

On July 18, 2013, Resource Real Estate Opportunity OP, LP (the “Operating Partnership”), our operating partnership, entered into an Agreement and Plan of Merger with RRE Charlemagne Holdings, LLC, a wholly-owned subsidiary of the Operating Partnership (“Merger Sub”), Paladin, and Paladin Realty Income Properties, L.P. (“Paladin OP”), whose sole general partner was Paladin, pursuant to which Paladin OP was to merge with and into Merger Sub (the “Merger”), with Merger Sub surviving as a wholly-owned subsidiary of the Operating Partnership.

On January 28, 2014, the parties completed the Merger resulting in the acquisition by the Operating Partnership of interests in 11 joint ventures that owned a total of 10 multifamily communities with more than 2,500 rentable units and two office properties that contained more than 75,000 rentable square feet. The Operating Partnership also acquired, as part of the Merger, a promissory note in the principal amount of $3.5 million issued by a consolidated joint venture which was eliminated in consolidation. This promissory note was secured by the co-venturer’s interests in such joint venture. The promissory note was repaid in 2015. The consideration for the Merger was $51.2 million exclusive of transaction costs.

As of December 31, 2016, we have purchased the remaining interests in five of the joint ventures and we have sold our interests in five of the other joint ventures, with the following joint venture interest remaining:    

Joint Venture	Ownership %	Apartment Complex	Number of Units	Property Location
DT Stone Ridge, LLC	83.4%	Stone Ridge	188	Columbia, SC

The following chart shows the geographic breakdown of our multifamily rental properties as of December 31, 2016 (based on net book value):

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ITEM 3.     LEGAL PROCEEDINGS

From time to time, we are party to legal proceedings, which arise in the ordinary course of our business. We are not currently involved in any legal proceedings of which the outcome is reasonably likely to have a material adverse effect on our results of operations or financial condition, nor are we aware of any such legal proceedings contemplated by governmental authorities.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

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PART II.

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Stockholder Information

As of March 21, 2017, we had 72,434,577 shares of common stock outstanding held by a total of 16,846 stockholders.

Market Information

There is no established public trading market for our common stock. Therefore, there is a risk that a stockholder may not be able to sell our stock at a time or price acceptable to the stockholder.

Estimated Value Per Share

On March 28, 2017, our board of directors approved an estimated value per share of the Company’s common stock of $10.94 based on the estimated market value of the Company’s portfolio of investments as of December 31, 2016. There have been no material changes between December 31, 2016 and the date of this filing that would impact the overall estimated value per share. We are providing this estimated value per share to assist broker-dealers that participated in our public offerings in meeting their customer account statement reporting obligations under National Association of Securities Dealers Conduct Rule 2340 as required by the Financial Industry Regulatory Authority (“FINRA”). This valuation was performed in accordance with the provisions of Practice Guideline 2013-01, Valuations of Publicly Registered Non-Listed REITs, issued by the Investment Program Association (“IPA”) in April 2013 (the “IPA Valuation Guidelines”).

Our conflicts committee, composed solely of all of our independent directors, is responsible for the oversight of the valuation process, including the review and approval of the valuation process and methodology used to determine the estimated value per share, the consistency of the valuation and appraisal methodologies with real estate industry standards and practices and the reasonableness of the assumptions used in the valuations and appraisals. With the approval of the conflicts committee, we engaged Duff & Phelps, LLC (“Duff & Phelps”) to provide a calculation of the range in estimated value per share of our common stock as of December 31, 2016. Duff & Phelps held discussions with senior management of our Advisor and conducted appraisals, investigations, research, review and analysis as it deemed necessary. Duff & Phelps based this range in estimated value per share upon its estimates of the “as is” market values of our interests in 31 multifamily properties and one debt and one preferred equity investment. Duff & Phelps made adjustments to the aggregate estimated values of our investments to reflect balance sheet assets and liabilities provided by our management, which are disclosed in this Annual Report on Form 10-K before calculating a range of estimated values based on the number of outstanding shares of our common stock as of December 31, 2016. The valuation report that Duff & Phelps prepared (the “Valuation Report”) summarized the key inputs and assumptions involved in the appraisal of each of our investments. Duff & Phelps’s valuation was designed to follow the prescribed methodologies of the IPA Valuation Guidelines. The methodologies and assumptions used to determine the estimated value of our investments are described further below.

Upon the conflicts committee’s receipt and review of the Valuation Report and in light of other factors considered by our conflicts committee and the conflicts committee’s own extensive knowledge of our assets and liabilities, the conflicts committee concluded that the range in estimated value per share of $10.24 to $11.70, with an approximate midpoint value of $10.94 per share, as indicated in the Valuation Report, was appropriate. Upon recommendation by the Advisor, the Conflicts Committee recommended to our board of directors that it adopt $10.94 as the estimated value per share of our common stock, which approximates the midpoint value. Our board of directors unanimously agreed to accept the recommendation of the conflicts committee and approved $10.94 as the estimated value per share of our common stock, which determination is ultimately and solely the responsibility of the board of directors.

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The following table summarizes the material components of the December 31, 2016 net asset value (in thousands, except per share amounts):

	Net Asset Value as of 12/31/16			Net Asset Value as of 12/31/16 (per share)
Investments	$	1,301,538		$	18.08
Cash	114,842			1.59
Other Assets	13,890			0.19
Mortgage Notes Payable and Credit Facility	(622,240		)	(8.64		)
Other Liabilities	(20,484		)	(0.28		)
Net asset value	$	787,546		$	10.94

The following table sets forth the calculation of our estimated net asset value per share as of December 31, 2016, as well as the calculation of our prior estimated net asset value per share as of December 31, 2015:

	December 31, 2016 Net Asset Value per Share			December 31, 2015 Net Asset Value per Share (1)			Change in Estimated Value per Share
Investments	$	18.08		$	17.85		$	0.23
Cash	1.59			1.09			0.50
Other Assets	0.19			0.19			—
Mortgage Notes Payable and Credit Facility	(8.64		)	(8.00		)	(0.64		)
Other Liabilities	(0.28		)	(0.30		)	0.02
	$	10.94		$	10.83		$	0.11

(1) For information relating to the December 31, 2015 net asset value per share and the assumptions and methodologies used by Duff and Phelps and our management, see our Annual Report on Form 10-K filed on March 31, 2016.

As with any valuation methodology, the methodologies used are based upon a number of estimates and assumptions that may not be accurate or complete. Different parties with different assumptions and estimates could derive a different estimated value per share, and these differences could be significant. In particular, due in part to (i) the high concentration of our total assets in real estate, and (ii) the number of shares of our common stock outstanding, even modest changes in key assumptions made in appraising our real estate properties could have a very significant impact on the estimated value of our shares. The estimated value per share is not audited and does not represent the fair value of our assets less the fair value of our liabilities according to U.S. generally accepted accounting principles (“GAAP”), nor does it represent a liquidation value of our assets and liabilities or the amount that our shares of common stock would trade at on a national securities exchange. The estimated value per share does not reflect a discount for the fact that we are externally managed, nor does it reflect a real estate portfolio premium/discount versus the sum of the individual property values. The estimated value per share also does not take into account estimated disposition costs and fees for real estate properties, debt prepayment penalties that could apply upon the prepayment of certain of our debt obligations or the impact of restrictions on the assumption of debt.

Methodology

Our goal in calculating an estimated value per share is to arrive at a value that is reasonable and supportable using what we deem to be appropriate valuation and appraisal methodologies and assumptions and a process that is in accordance with the IPA Valuation Guidelines. The following is a summary of the valuation and appraisal methodologies used to calculate the estimated value per share:

Real Estate

Independent Valuation Firm

Duff & Phelpswas recommended by the Advisor, and approved by the conflicts committee. Duff & Phelps is engaged in the business of appraising commercial real estate properties and is not affiliated with us or the Advisor. Neither we, the Advisor or any of its affiliates have engaged Duff & Phelps for any other types of services during the two years prior to the date of this

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filing. Duff & Phelps and its affiliates may from time to time in the future perform other commercial real estate, appraisal and valuation services for us and our affiliates in transactions related to the properties that are the subjects of the appraisals, so long as such other services do not adversely affect the independence of the applicable Duff & Phelps appraiser as certified in the applicable appraisal reports.

The compensation Duff & Phelps received for its appraisal of our real estate properties was based on the scope of work and was not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of us, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of the appraisal. The appraisal was performed in accordance with the Code of Ethics & Standards of Professional Appraisal Practice of the Appraisal Institute and the Uniform Standards of Professional Appraisal Practice, or USPAP, the real estate appraisal industry standards created by The Appraisal Foundation. The Valuation Report was reviewed, approved and signed by an individual with the professional designation of MAI (Member of the Appraisal Institute). The use of the Valuation Report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. In preparing the Valuation Report, Duff & Phelps did not, and was not requested to, solicit third party indications of interest for our common stock in connection with possible purchase thereof or the acquisition of all or any part of us.

Duff & Phelps collected all reasonably available material information that it deemed relevant in estimating the market value of our real estate properties and other investments. In conducting its investigations and analyses, Duff & Phelps took into account customary and accepted financial and commercial procedures and considerations as it deemed relevant. Although Duff & Phelps reviewed information supplied or otherwise made available by us or the Advisor for reasonableness, each assumed and relied upon the accuracy and completeness of all such information and of all information supplied or otherwise made available to it by any other party and did not independently verify any such information. Duff & Phelps relied on our management or the Advisor to advise it promptly if any information previously provided became inaccurate or was required to be updated during the period of its review.

In performing its analysis of our real estate properties and other investments, Duff & Phelps made numerous other assumptions as of various points in time with respect to industry performance, general business, economic and regulatory conditions and other matters, many of which are beyond its control and our control, as well as certain factual matters. For example, unless specifically informed to the contrary, Duff & Phelps assumed that we had clear and marketable title to each real estate property appraised, that no title defects existed, that no hazardous materials had been present or were present previously, that no deed restrictions existed, and that the properties were responsibly owned and managed by competent property management. Furthermore, Duff & Phelps’s analyses, opinions and conclusions were necessarily based upon market, economic, financial and other circumstances and conditions existing as of or prior to the date of the appraisals, and any material change in such circumstances and conditions may affect Duff & Phelps’s analyses and conclusions. The Valuation Report contains other assumptions, qualifications and limitations that qualify the analysis, opinions and conclusions set forth therein. Furthermore, the prices at which our real estate properties may actually be sold could differ from their appraised values. The Valuation Report, including the analyses, opinions and conclusions set forth in such report, is qualified by the assumptions, qualifications and limitations set forth in the Valuation Report.

The foregoing is a summary of the standard assumptions, qualifications and limitations that generally apply to the Valuation Report.

Real Estate Valuation

Duff & Phelps estimated the “as is” market value of each of our real estate properties owned as of December 31, 2016, using various methodologies, including the direct capitalization approach, discounted cash flow analyses and sales comparison approach, and relied primarily on the direct capitalization approach for our stabilized properties and discounted cash flow analyses for our unstabilized properties. The sales comparison approach was utilized as a secondary approach to value. The direct capitalization approach applies a current market capitalization rate to the properties’ net operating income. The capitalization rate was based on recent national overall capitalization rates, and the net operating income (NOI) was estimated based on Duff & Phelps’s expertise in appraising commercial real estate. The direct capitalization approach was utilized for 11 of our properties that have finished renovations and stabilized their operations. Discounted cash flow analyses focus on the operating cash flows expected from the properties and the anticipated proceeds of hypothetical sales at the end of assumed holding periods, which are then discounted to their present value. Discounted cash flow analyses were utilized for 19 of our properties that were recently acquired and either not yet stabilized or are currently undergoing renovations. One property was valued at its purchase price as it was purchased shortly before December 31, 2016. Real estate is currently carried in our financial statements at its amortized cost basis. Duff & Phelps performed its appraisals as of December 31, 2016.

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The following summarizes the range of overall capitalization rates used to arrive at the estimated market values of our 11 stabilized properties:

	Range in Values	Weighted Average Basis
Overall Capitalization Rate	5.50% to 7.50%	6.46%

The following summarizes the range of terminal capitalization rates and discount rates used to arrive at the estimated market values of 17 unstabilized properties and two stabilized properties that are currently undergoing renovations:

	Range in Values	Weighted Average Basis
Terminal Capitalization Rate	5.00% to 6.00%	5.40%
Discount Rate	6.50% to 7.75%	6.97%

While we believe that Duff & Phelps’ assumptions and inputs are reasonable, a change in these assumptions and inputs would significantly impact the calculation of the appraised value of our real estate properties and other assets and, thus, its estimated value per share. As of December 31, 2016, the majority of our real estate assets have non-stabilized occupancies. Appraisals may provide a sense of the value of the investment, but any appraisal of the property will be based on numerous estimates, judgments and assumptions that significantly affect the appraised value of the underlying property. An appraisal of a non-stabilized property, in particular, involves a high degree of subjectivity due to higher vacancy levels and uncertainties with respect to future market rental rates and timing of lease-up and stabilization. Accordingly, different assumptions may materially change the appraised value of the property.

The total appraised value of our real estate properties using the appraisal methodologies described above was $1.3 billion compared to a total of purchase price and capital expenditures, through December 31, 2016, of $965.9 million.

The table below illustrates the impact on the estimated value per share if the overall capitalization rates, terminal capitalization rates or discount rates were adjusted by 25 basis points, and assuming all other factors remain unchanged, with respect to the real estate properties referenced in the table above. Additionally, the table below illustrates the impact on the estimated value per share if the overall capitalization rates, terminal capitalization rates or discount rates were adjusted by 5% in accordance with the IPA Valuation Guidelines, assuming all other factors remain unchanged. The table is only hypothetical to illustrate possible results if only one change in assumptions was made, with all other factors held constant. Further, each of these assumptions could change by more than 25 basis points or 5%.

	Change in Estimated Value per Share
	Increase of 25 Basis Points	Decrease of 25 Basis Points	Increase of 5%	Decrease of 5%
Overall Capitalization Rate	$10.77	$11.11	$10.73	$12.10
Terminal Capitalization Rate	$10.41	$11.52	$10.37	$11.56
Discount Rate	$10.88	$10.99	$10.85	$11.11

Debt and Preferred Equity Investments

Duff & Phelps estimated the market value of our debt and preferred equity investments, which totaled approximately $950,605, or less than 1% of our assets, by making mark-to-market adjustments to the outstanding balances owed to us under these investments as of December 31, 2016.

Other Assets and Liabilities

Duff & Phelps made adjustments to the aggregate estimated values of our investments to reflect balance sheet assets and liabilities provided by our management, which are disclosed in this Annual Report on Form 10-K.

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Limitations of Estimated Value Per Share

As mentioned above, we are providing this estimated value per share to assist broker dealers that participated in our public offering in meeting their customer account statement reporting obligations. This valuation was performed in accordance with the provisions of the IPA Valuation Guidelines. The estimated value per share set forth above will first appear on the March 31, 2017 customer account statements that will be mailed in April 2017. As with any valuation methodology, the methodologies used are based upon a number of estimates and assumptions that may not be accurate or complete. Different parties with different assumptions and estimates could derive a different estimated value per share, and this difference could be significant. The estimated value per share is not audited and does not represent the fair value of our assets or liabilities according to GAAP.

Accordingly, with respect to the estimated value per share, we can give no assurance that:

• a stockholder would be able to resell his or her shares at the estimated value per share;

• a stockholder would ultimately realize distributions per share equal to our estimated value per share upon liquidation of our assets and settlement of its liabilities or a sale of our company;

• our shares of common stock would trade at the estimated value per share on a national securities exchange;

• a third party would offer the estimated value per share in an arm’s-length transaction to purchase all or substantially all of our shares of common stock;

• another independent third-party appraiser or third-party valuation firm would agree with the our estimated value per share; or

• the methodology used to calculate our estimated value per share would be acceptable to FINRA or for compliance with ERISA reporting requirements.

Further, the estimated value per share as of December 31, 2016 is based on the estimated value of our investments as of December 31, 2016. We did not make any adjustments to the valuation for the impact of other transactions occurring subsequent to December 31, 2016, including, but not limited to, (i) the issuance of common stock under the distribution reinvestment plan, (ii) net operating income earned and distributions declared, (iii) the redemption of shares and (iv) the potential conversion of convertible stock into common stock. The value of our shares will fluctuate over time in response to developments related to individual assets in our portfolio and the management of those assets and in response to the real estate and finance markets. Because of, among other factors, our high concentration of total assets in real estate and the number of shares of our common stock outstanding, any change in the value of individual assets in the portfolio, particularly changes affecting our real estate properties, could have a very significant impact on the value of our shares. The estimated value per share does not reflect a discount for the fact that we are externally managed, nor does it reflect a real estate portfolio premium/discount versus the sum of the individual property values. The estimated value per share also does not take into account estimated disposition costs and fees for real estate properties, debt prepayment penalties that could apply upon the prepayment of certain of our debt obligations or the impact of restrictions on the assumption of debt.

Distribution Reinvestment Plan

In accordance with our distribution reinvestment plan, participants in the distribution reinvestment plan acquire shares of common stock under the plan at a price equal to the estimated value per share of our common stock. Commencing on the next distribution reinvestment plan purchase date, which is on March 31, 2017, participants will acquire shares of our common stock under the plan at a price equal to $10.94 per share.

As provided under the distribution reinvestment plan, for a participant to terminate participation effective for a particular distribution, we must have received notice of termination from the participant at least ten business days prior to the last day of the month to which the distribution relates. If a participant wishes to terminate participation in the distribution reinvestment plan effective for the April 28, 2017 purchase date, participants must notify the Company in writing of such decision, and we must receive the notice by the close of business on April 14, 2017, which is ten business days prior to the last day of April 2017, as provided under the distribution reinvestment plan.

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Notice of termination should be sent by facsimile to 877-894-1124 or by mail to c/o Resource Real Estate Opportunity REIT, Inc., P.O. Box 219169, Kansas City, Missouri 64121.

Share Redemption Program

The redemption price for shares eligible for redemption will be the greater of (a) 100% of the average issue price per share for all of the stockholder’s shares (as adjusted for any stock distributions, stock combinations, splits, recapitalizations and the like) or (b) 100% of the estimated value per share.

On March 28, 2017, our board of directors approved an estimated value per share of our common stock of $10.94. As a result, the price at which shares will now be redeemed under the share redemption program is $10.94. For a stockholder’s shares to be eligible for redemption in June 2017 or to withdraw a redemption request, we must receive a written notice from the stockholder or from an authorized representative of the stockholder in good order and on a form approved by the Company by June 15, 2017.

The complete share redemption program plan document is filed as an exhibit to our Quarterly Report on Form 10-Q filed with the SEC on November 14, 2011 and is available at the SEC’s website at http://www.sec.gov.

Unregistered Sale of Equity Securities

All securities sold by us during the year ended December 31, 2016 were sold in an offering registered under the Securities Act.

Redemption of Securities

During the quarter ended December 31, 2016, we redeemed shares 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
October 2016	—	$—	—	(3)
November 2016	—	—	—	(3)
December 2016	270,079	10.83	270,079	(3)
	270,079

(1)    All purchases of our equity securities by us in the three months ended December 31, 2016 were made pursuant to our share redemption program.

(2)    We announced the commencement of the program on June 16, 2010, and it was subsequently amended on September 29, 2011.

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

There are several limitations on our ability to repurchase shares under the program:      

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 we have sufficient excess cash to repurchase shares. Generally, the cash available for redemption will be limited to proceeds from our distribution reinvestment plan plus, if we had positive operating cash flow from the previous fiscal year, 1% of all operating cash flow from the previous fiscal 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.

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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 a stockholder's death, qualifying disability or confinement to a long-term care facility.

All redemption requests tendered were honored for the year endedDecember 31, 2016.

Distribution Information

During the year ended December 31, 2014, we paid aggregate distributions of $32.9 million, including $10.0 million of distributions paid in cash and $22.9 million of distributions reinvested in shares of our common stock through our distribution reinvestment plan.During the year ended December 31, 2015, we paid aggregate distributions of $42.2 million, including $13.2 million of distributions paid in cash and $29.0 million of distributions reinvested in shares of our common stock through our distribution reinvestment plan. During the year endedDecember 31, 2016, we paid aggregate distributions of $43.0 million, including $14.5 million of distributions paid in cash and $28.5 million of distributions reinvested in shares of common stock through our distribution reinvestment plan, as follows:

Record Date	Per Common Share	Distribution Date	Distribution 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
July 28, 2016	0.05	July 29, 2016	2,359		1,215		3,574
August 30, 2016	0.05	August 31, 2016	2,363		1,222		3,585
September 29, 2016	0.05	September 30, 2016	2,351		1,220		3,571
October 28, 2016	0.05	October 31, 2016	2,348		1,234		3,582
November 29, 2016	0.05	November 30, 2016	2,343		1,249		3,592
December 29, 2016	0.05	December 30, 2016	2,326		1,263		3,589
	$0.60		$	28,497	$	14,508	$	43,005

Sources of distributions were as follows for the year endedDecember 31, 2016 (in thousands):

	For the Year Ended
	December 31, 2016
Sources of Distributions:
Dispositions	31,875		74.1	%
Operating activities	11,130		25.9	%
	$	43,005	100	%

We have elected to be taxed as a REIT and to operate as a REIT beginning with our taxable year ended December 31, 2010. To maintain our qualification as a REIT, we will be required to make aggregate annual distributions to our common stockholders of at least 90% of our REIT taxable income (computed without regard to the dividends paid deduction and excluding net capital gain). Our Board of Directors may authorize distributions in excess of those required for us to maintain REIT status depending on our financial condition and such other factors as our Board of Directors deems relevant.

41

Our Board of Directors considers many factors before authorizing a cash distribution, including current and projected cash flow from operations, capital expenditure needs, general financial conditions and REIT qualification requirements. To the extent permitted by Maryland law, we may borrow funds, issue new securities or sell assets to make and cover our declared distributions, all or a portion of which could be deemed a return of capital. We may also fund such distributions from advances from our Advisor or sponsor or from our Advisor's deferral of its asset management fee, although we have no present intention to do so. Our organizational documents do not limit the amount of distributions we can fund from sources other than from cash flows from operations.

Our net income attributable to common stockholders for the year ended December 31, 2016 was $4.1 million and net cash provided by operating activities was $11.1 million. Our cumulative cash distributions and net loss attributable to common stockholders from inception through December 31, 2016 are $134.7 million and $104.6 million, respectively. We have funded our cumulative distributions, which includes net cash distributions and distributions reinvested by stockholders, with cash flow from operating activities, proceeds from disposals of real estate assets and proceeds from debt financing. To the extent that we pay distributions from sources other than our cash flow from operating activities or gains 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.

We have not established a minimum distribution level, and our charter does not require that we make distributions to our stockholders. We will make distributions with respect to the shares of common stock in our sole discretion. No distributions will be made with respect to shares of our convertible stock.

Convertible Stock Grants by our Advisor

As of December 31, 2016, our Advisor has granted 21,210 shares of its convertible stock to employees of RAI and its subsidiaries and affiliates. Of these shares, 2,353 have been forfeited and returned to the Advisor as of December 31, 2016. The outstanding shares vest ratably over three years, and 17,361 of these shares have vested as of December 31, 2016.

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ITEM 6.     SELECTED FINANCIAL DATA

The following selected financial data should be read together with our "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Item 7 of this report and our consolidated financial statements, including the notes, found elsewhere herein.

The following table sets forth selected operating and balance sheet data (in thousands, except per share data):

	As of and for the years ended December 31,
Statement of operations data:	2016			2015			2014			2013			2012
Revenues:
Rental income	$	117,745		$	117,687		$	99,910		$	40,790		$	14,232
Gain on foreclosures	—			—			—			3,459			2,906
Interest and dividend income	622			638			359			262			197
Gain on bargain purchase	—			—			—			—			1,712
Total revenues	118,367			118,325			100,269			44,511			19,047
Total expenses	131,262			149,626			144,465			65,518			27,443
Loss before other income (expense)	(12,895		)	(31,301		)	(44,196		)	(21,007		)	(8,396		)
Other income (expense):
Net gains on dispositions of properties and joint venture interests	45,057			36,041			10,484			—			—
Interest expense	(22,776		)	(22,080		)	(14,911		)	(951		)	(546		)
Insurance proceeds in excess of cost basis	985			407			425			—			12
Total other income (expense)	23,266			14,368			(4,002		)	(951		)	(534		)
Discontinued operations:
(Loss) income from discontinued operations	—			—			—			(701		)	298
Net gains on dispositions of properties	—			—			—			3,173			—
Income from discontinued operations, net	—			—			—			2,472			298
Income (loss) from continuing operations	10,371			(16,933		)	(48,198		)	(21,958		)	(8,930		)
Income (loss) from discontinued operations	—			—			—			2,472			298
Net income (loss)	10,371			(16,933		)	(48,198		)	(19,486		)	(8,632		)
Net (income) loss attributable to noncontrolling interests	(6,306		)	38			2,021			—			—
Net income (loss) attributable to common stockholders	$	4,065		$	(16,895	)	$	(46,177	)	$	(19,486	)	$	(8,632	)
Basic and diluted earnings (loss) per share attributable to common stockholders:
Continuing operations	$	0.06		$	(0.24	)	$	(0.68	)	$	(0.56	)	$	(0.60	)
Discontinued operations	—			—			—			0.06			0.02
Net income (loss)	$	0.06		$	(0.24	)	$	(0.68	)	$	(0.50	)	$	(0.58	)
Dividends declared per common share	$	0.60		$	0.60		$	0.45		$	0.37		$	0.23
Balance sheet data:
Total assets	$	1,034,985		$	1,084,695		$	972,556		$	675,721		$	182,488
Borrowings	$	622,152		$	613,439		$	483,901		$	146,014		$	9,610
Total stockholders' equity attributable to common stockholders	$	390,593		$	425,246		$	460,133		$	517,047		$	165,029
Total equity	$	392,019		$	433,099		$	468,354		$	517,047		$	165,029

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis relates to our financial statements and should be read in conjunction with the financial statements of Resource Real Estate Opportunity REIT, Inc. and notes thereto appearing elsewhere in this report.  Statements contained in this “Management's Discussion and Analysis of Financial Condition and Results of Operations” that are not historical facts may be forward-looking statements. See also “Forward-Looking Statements” preceding Part I.

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 December 31, 2016, we held approximately 35% of our total assets in category (i) and 65% 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 December 31, 2016, we owned interests in a total of 31 multifamily properties. We also owned one performing loan. During the year ended December 31, 2016, we acquired an interest in one multifamily property and we disposed of our interests in six multifamily properties. Since our inception, we have acquired interests in 49 multifamily properties, representing 14,056 units. As of December 31, 2016, we had sold our interests in 18 of these 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.

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

	Years Ended
	December 31,
	2016			2015			2014
Revenues:
Rental income	$	117,745		$	117,687		$	99,910
Interest and dividend income	622			638			359
Total revenues	118,367			118,325			100,269
Expenses:
Rental operating - expenses	27,608			34,167			34,759
Rental operating - payroll	14,790			16,769			14,784
Rental operating - real estate taxes	12,668			13,154			9,611
Subtotal - Rental operating expenses	55,066			64,090			59,154
Acquisition costs	1,582			5,811			9,833
Management fees	15,724			15,453			11,544
General and administrative	13,083			12,776			10,855
Loss on disposal of assets	1,576			3,093			5,308
Provision for loan loss	—			130			—
Depreciation and amortization expense	44,231			48,273			47,771
Total expenses	131,262			149,626			144,465
Loss before other income (expense)	(12,895		)	(31,301		)	(44,196		)
Other income (expense):
Net gains on dispositions of properties and joint venture interests	45,057			36,041			10,484
Interest expense	(22,776		)	(22,080		)	(14,911		)
Insurance proceeds in excess of cost basis	985			407			425
Total other income (expense)	23,266			14,368			(4,002		)
Net income (loss)	$	10,371		$	(16,933	)	$	(48,198	)
Net (income) loss attributable to noncontrolling interests	(6,306		)	38			2,021
Net income (loss) attributable to common stockholders	$	4,065		$	(16,895	)	$	(46,177	)

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Year EndedDecember 31, 2016 Compared to the Year EndedDecember 31, 2015

The following table presents the results of operations separated into two categories, the results of operations of the 26 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 years ended December 31, 2016 and 2015 (in thousands):

	For the year ended									For the year ended
	December 31, 2016									December 31, 2015
	Properties owned both periods			All other			Total			Properties owned both periods			All other			Total
Revenues:
Rental income	$	91,642		$	26,103		$	117,745		$	81,829		$	35,858		$	117,687
Interest and dividend income	3			619			622			3			635			638
Total revenues	91,645			26,722			118,367			81,832			36,493			118,325
Expenses:
Rental operating - expenses	22,266			5,342			27,608			23,460			10,707			34,167
Rental operating - payroll	11,725			3,065			14,790			11,873			4,896			16,769
Rental operating - real estate taxes	9,716			2,952			12,668			9,645			3,509			13,154
Subtotal - Rental operating expenses	43,707			11,359			55,066			44,978			19,112			64,090
Acquisition costs	61			1,521			1,582			—			5,811			5,811
Management fees	4,084			11,640			15,724			3,639			11,814			15,453
General and administrative	3,589			9,494			13,083			4,056			8,720			12,776
Loss on disposal of assets	639			937			1,576			869			2,224			3,093
Provision for loan loss	—			—			—			—			130			130
Depreciation and amortization expense	35,611			8,620			44,231			33,505			14,768			48,273
Total expenses	87,691			43,571			131,262			87,047			62,579			149,626
Income (loss) before other income (expense)	3,954			(16,849		)	(12,895		)	(5,215		)	(26,086		)	(31,301		)
Other income (expense):
Net gains on dispositions of properties and joint venture interests	—			45,057			45,057			—			36,041			36,041
Interest expense	(17,261		)	(5,515		)	(22,776		)	(15,834		)	(6,246		)	(22,080		)
Insurance proceeds in excess of cost basis	985			—			985			407			—			407
Total other income (expense)	(16,276		)	39,542			23,266			(20,642		)	3,709			(16,933		)
Net (loss) income	(12,322		)	22,693			10,371			(20,642		)	3,709			(16,933		)
Net (income) loss attributable to noncontrolling interests	—			(6,306		)	(6,306		)	—			38			38
Net (loss) income attributable to common stockholders	$	(12,322	)	$	16,387		$	4,065		$	(20,642	)	$	3,747		$	(16,895	)

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Revenues: The $9.8 million increase in rental income for the 26 properties that we owned during both the year ended December 31, 2016 and December 31, 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)
Meridian Pointe	$	1,005	4.15	%	$	237
Maxwell Townhomes	973		4.68	%	$	231
Estates at John's Creek	896		3.55	%	$	141
Calloway at Las Colinas	876		6.94	%	$	71
The Westside Apartments	697		(0.75	)%	$	159
Verona Apartment Homes	584		11.62	%	$	38
Tech Center Square	521		(1.36	)%	$	256
Perimeter Circle	409		(0.11	)%	$	193
Skyview Apartment Homes	402		3.49	%	$	119
Perimeter 5550	374		(0.04	)%	$	202
All other, net	3,076
	$	9,813

Expenses:  Our total rental operating expense for the 26 properties owned during both the year ended December 31, 2016 and the year ended December 31, 2015 decreased by $1.3 million primarily due to reductions in casualty losses due to two large fires that occurred in 2015. Rental operating expenses in the all other category decreased by $7.8 million primarily due to the sale of properties in 2015 and 2016.

Acquisition costs decreased by $4.2 million for the year ended December 31, 2016 as compared to the year ended December 31, 2015. During the year ended December 31, 2015, we acquired four multifamily properties, as compared to the acquisition of one property during the year ended December 31, 2016. Included in acquisition costs for the years ended December 31, 2016 and 2015 are $1.4 million and $5.2 million, respectively, in fees paid to related parties.

Management fees increased by $271,000 for the year ended December 31, 2016 as compared to the year ended December 31, 2015 primarily related to the increase in asset management fees paid to the Advisor due to increased property values during 2015 and 2016. Additionally, 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.

General and administrative expenses increased by $307,000 for the year ended December 31, 2016 as compared to the year ended December 31, 2015 primarily due to a $1.4 million increase in expenses allocated by the Advisor, offset by a decrease in expenses for properties sold during the year ended December 31, 2016.

Loss on disposal of assets decreased by $1.5 million for the year ended December 31, 2016 as compared to the year ended December 31, 2015 primarily 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 year ended December 31, 2016, as compared to the year ended December 31, 2015, were as follows:

	Properties owned both periods			All other			Total
Depreciation	$	4,008		$	(1,918	)	$	2,090
Amortization of intangibles	(1,902		)	(4,230		)	(6,132		)
	$	2,106		$	(6,148	)	$	(4,042	)

The overall increase in depreciation for properties owned during both periods was due to the additional $28.0 million in capital improvements made during the years ended December 31, 2016 and 2015 in accordance with our planned

47

renovations. The decrease in depreciation and amortization in the all other category was due to the sale of our interests in six properties during 2016 and a reduction to the amortization of in-place leases for properties purchased in 2015.

Net gains on dispositions of properties and joint venture interests included in other income (expense) increased by $9.0 million due to the sale of six properties during the year ended December 31, 2016 as compared to the sale of six properties during the year ended December 31, 2015, as follows (in thousands):

Multifamily Community	Location	Sale Date	Contract Sales price		Net Gains on Dispositions of Properties and Joint Venture Interests
2016 Dispositions:
Conifer Place (1)	Norcoss, Georgia	January 27, 2016	$	42,500	$	9,897
Champion Farms	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
Fieldstone	Woodland, Ohio	June 30, 2016	7,514		4,096
The Nesbit Palisades	Alpharetta, Georgia	July 8, 2016	45,500		17,601
			$	140,004	$	45,057
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
The Reserve at Mt. Moriah	Memphis, Tennessee	September 18, 2015	5,425		2,490
			$	87,684	$	36,041

(1)    The net gain on dispositions of properties and joint venture interests related to Conifer Place includes $6.4 million which is attributable to noncontrolling interests.

Interest expense increased by $696,000 for the year ended December 31, 2016 as compared to the year ended December 31, 2015. The sales of Nesbit Palisades, Ivy at Clear Creek, and Affinity at Winter Park resulted in an acceleration of $504,000 of amortization of deferred financing costs and a loss of $105,000 due to a change in the fair value of interest rate caps. Additionally, interest expense for year ended December 31, 2016 includes $791,000 of extinguishment of loan costs related to refinancing of Tech Center Square, The Westside Apartments, Verona Apartment Homes, Cannery Lofts, Pinehurst, and Skyview Apartment Homes. These increases were offset by the net decrease in interest expense due to the sale of properties in 2015 and 2016.

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Year EndedDecember 31, 2015 Compared to the Year EndedDecember 31, 2014

The following table presents the results of operations separated into two categories: the results of operations of the 16 properties we owned for the entirety of both periods presented and all other properties (including company level expenses to aid in comparability) for the years ended December 31, 2015 and 2014 (in thousands):

	For the year ended									For the year ended
	December 31, 2015									December 31, 2014
	Properties owned both periods			All other			Total			Properties owned both periods			All other			Total
Revenues:
Rental income	$	50,751		$	66,936		$	117,687		$	45,714		$	54,196		$	99,910
Interest and dividend income	2			636			638			5			354			359
Total revenues	50,753			67,572			118,325			45,719			54,550			100,269
Expenses:
Rental operating - expenses	15,713			18,454			34,167			16,381			18,378			34,759
Rental operating - payroll	7,790			8,979			16,769			7,461			7,323			14,784
Rental operating - real estate taxes	4,840			8,314			13,154			4,719			4,892			9,611
Subtotal - rental operating expenses	28,343			35,747			64,090			28,561			30,593			59,154
Acquisition costs	—			5,811			5,811			—			9,833			9,833
Management fees	2,263			13,190			15,453			1,999			9,545			11,544
General and administrative	2,667			10,109			12,776			2,552			8,303			10,855
Loss on disposal of assets	861			2,232			3,093			2,558			2,750			5,308
Provision for loan loss	—			130			130			—			—			—
Depreciation and amortization expense	19,339			28,934			48,273			20,768			27,003			47,771
Total expenses	53,473			96,153			149,626			56,438			88,027			144,465
Loss before other income (expense)	(2,720		)	(28,581		)	(31,301		)	(10,719		)	(33,477		)	(44,196		)
Other income (expense):
Net gains on dispositions of properties and joint venture interests	—			36,041			36,041			—			10,484			10,484
Interest expense	(5,827		)	(16,253		)	(22,080		)	(5,553		)	(9,358		)	(14,911		)
Insurance proceeds in excess of cost basis	—			407			407			56			369			425
Total other income (expense)	(5,827		)	20,195			14,368			(16,216		)	(20,746		)	(36,962		)
Net loss	(8,547		)	(8,386		)	(16,933		)	(16,216		)	(31,982		)	(48,198		)
Net loss attributable to noncontrolling interests	—			38			38			—			2,021			2,021
Net loss attributable to common stockholders	$	(8,547	)	$	(8,348	)	$	(16,895	)	$	(16,216	)	$	(29,961	)	$	(46,177	)

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Revenues: The $5.0 million increase in rental income for the 16 properties that we owned during both the years ended December 31, 2015 and 2014 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)
The Westside Apartments	$	725	3.7	%	$	126
The Nesbit Palisades	628		(0.5	)%	$	143
Retreat at Rocky Ridge	489		16.4	%	$	83
Maxwell Townhomes	484		4.6	%	$	111
Williamsburg	420		1.2	%	$	28
Skyview Apartment Homes	410		4.3	%	$	124
Verona Apartment Homes	372		(0.1	)%	$	135
Trailpoint at the Woodlands	351		1.8	%	$	108
Ivy at Clear Creek	350		4.4	%	$	83
Affinity at Winter Park	330		8.3	%	$	91
All other, net	478
	$	5,037

The $12.7 million increase in the all other category includes $27.4 million of revenue from the operations of 18 properties purchased from January 2014 to December 2015 offset by a decrease of $14.7 million related to the eight properties that were sold during the same period.

Expenses:  Our total rental operating expense increased by $4.9 million for the year ended December 31, 2015 as compared to the year ended December 31, 2014. Total rental operating expenses for the 16 properties owned during both the year ended December 31, 2015 and the year ended December 31, 2014 decreased by $218,000, and was comprised primarily of insurance costs and uncapitalizable construction related expenses at these properties. Total rental operating expenses in the all other category increased by $5.2 million primarily due to a $3.4 million increase in real estate taxes related to the acquisition of additional properties and a $1.7 million increase in payroll related costs.

Acquisition costs decreased by $4.0 million for the year ended December 31, 2015 as compared to the year ended December 31, 2014. In the year ended December 31, 2014, we acquired 0.018 multifamily properties, including the Paladin acquisition, as compared to the acquisition of four properties during the year ended December 31, 2015. Included in acquisition costs for the years ended December 31, 2015 and 2014 are $5.2 million and $8.5 million, respectively, in fees paid to related parties.

Management fees increased by $3.9 million for the year ended December 31, 2015 as compared to the year ended December 31, 2014 primarily due to the $3.0 million increase in the asset management fee paid to the Advisor due to recent acquisitions. The asset management fee is based on the higher of the cost or appraised value of real estate investments.

General and administrative expenses increased by $1.9 million for the year ended December 31, 2015 as compared to the year ended December 31, 2014 primarily due to a $1.8 million increase in payroll-related expenses due to the increase in the number of assets managed by our Advisor.

In May 2015, we agreed to receive $130,000 less than the book value of one of our loans held for investment. As a result, we recorded a provision for loan loss related to this payoff. There were no such charges during the year ended December 31, 2014.

Loss on disposal of assets decreased by $2.2 million for the year ended December 31, 2015 as compared to the year ended December 31, 2014 due to the timing of the replacement of appliances at our rental properties in conjunction with unit upgrades.

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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 year ended December 31, 2015, as compared to the year ended December 31, 2014, were as follows:

	Properties owned both periods			All other			Total
Depreciation	$	3,553		$	5,563		$	9,116
Amortization of intangibles	(4,982		)	(3,632		)	(8,614		)
	$	(1,429	)	$	1,931		$	502

Net gains on dispositions of properties and joint venture interests included in other income (expense) increased by $25.6 million due to the sale of six properties during the year ended December 31, 2015 as compared to the sale of four properties during the year ended December 31, 2014, as follows (in thousands):

Multifamily Community	Location	Sale Date	Contract Sales price		Net Gains on Dispositions of Properties and Joint Venture Interests
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
The Reserve at Mt. Moriah	Memphis, Tennessee	September 18, 2015	5,425		2,490
			$	87,684	$	36,041
2014 Dispositions:
Governor Park	San Diego, California	March 6, 2014	$	456	$	—
Campus Club	Tampa, Florida	June 16, 2014	10,500		2,602
Hilltop Village	Kansas City, Missouri	July 1, 2014	—		(493		)
Arcadia at Westheimer	Houston, Texas	September 19, 2014	18,100		8,375
			$	29,056	$	10,484

Interest expense increased by $7.2 million for the year ended December 31, 2015 as compared to the year ended December 31, 2014 as a result of 22 additional mortgages either entered into or assumed during or after the year ended December 31, 2014.

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 flow generated by our real estate and real estate-related investments.

We initially 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 $28.0 million during the year endedDecember 31, 2016 for capital expenditures. The properties in which we deployed the most capital during the year endedDecember 31, 2016 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 year ended		Remaining capital budgeted
Property	December 31, 2016
Yorba Linda	$	3,930	$	5,861
Heritage Pointe	2,666		4,226
South Lamar Village	2,491		1,142
Point Bonita	2,205		3,471
Calloway at Las Colinas	2,081		2,976
All other properties	14,651		16,220
	$	28,024

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 $10.94 per share, which is our current value per share.

Gross Offering Proceeds

As of December 31, 2016,an aggregate of 75.0 million 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	9,078,068		91,389
Shares issued in conjunction with the Advisor's initial investment, net of 4,500 share conversion	15,500		155
Total	74,975,022		$	726,203
Shares redeemed and retired	(2,968,433	)
Total shares outstanding as of December 31, 2016	72,006,589

(1)    Includes 276,056 shares held by the Advisor.

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Credit Facility

The following is a summary of our credit facility:

	Balance Outstanding at		Current Availability at		Balance Outstanding at					Weighted Average Interest Rate for the Year Ended
Lender	December 31, 2016				December 31, 2015		Maturity Date	Interest Rate Basis	Current Interest Rate	December 31, 2016	December 31, 2015
Bank of America	$	—	$	13,280	$	21,894	5/23/2017	LIBOR plus 3%	3.77%	3.44%	3.26%

On December 2, 2011, through our operating partnership, we entered into a secured revolving credit facility, or the Bank of America Credit Facility, with Bank of America, N.A.  On May 23, 2013, we amended the Bank of America Credit Facility to increase the amount we may borrow under the Credit Facility from $25.0 million to $50.0 million, or the Facility Amount. Draws under the Bank of America Credit Facility are secured by one of our properties with an aggregate value of $33.2 million and are guaranteed by us. We are able to draw up to 40% of the aggregate value of the property securing the facility. 

      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. We are required to make monthly interest-only payments.  We also may prepay the Bank of America Credit Facility in whole or in part at any time without premium or penalty. For the years ended December 31, 2016and2015, we had weighted average borrowings of $6.8 millionand$13.8 million, respectively, under the Bank of America Credit Facility.

Our operating partnership’s obligations with respect to the Bank of America Credit Facility are guaranteed by us, 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:

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

• we 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

• we 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.

We are currently in compliance with all such covenants. Although we expect to remain in compliance with these covenants for the duration of the term of the Bank of America Credit Facility, depending upon our future operating performance, property and financing transactions and general economic conditions, we cannot assure you that we will continue to be in compliance.

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Mortgage Debt

During the year ended December 31, 2016, we borrowed an additional $109.0 million through additional mortgages on our rental properties.

The following table presents a summary of our mortgage notes payable, net (in thousands, except percentages):

	December 31, 2016										December 31, 2015
	Outstanding borrowings		Premium (Discount)			Deferred finance costs, net			Carrying Value		Outstanding borrowings		Premium (Discount)			Deferred finance costs, net			Carrying Value
Collateral
Vista Apartment Homes	$	15,225	$	—		$	(178	)	$	15,047	$	15,573	$	—		$	(216	)	$	15,357
Cannery Lofts	13,100		—			(197		)	12,903		8,148		—			(131		)	8,017
Deerfield	10,359		—			(125		)	10,234		10,517		—			(159		)	10,358
Ivy at Clear Creek	—		—			—			—		8,431		—			(136		)	8,295
Trailpoint at the Woodlands	18,690		—			(222		)	18,468		19,013		—			(257		)	18,756
Verona Apartment Homes	32,970		—			(532		)	32,438		22,402		—			(179		)	22,223
Skyview Apartment Homes	28,400		—			(462		)	27,938		18,089		—			(148		)	17,941
The Nesbit Palisades	—		—			—			—		20,298		—			(309		)	19,989
Maxwell Townhomes	13,602		—			(137		)	13,465		13,850		—			(167		)	13,683
Fieldstone	—		—			—			—		15,332		—			(37		)	15,295
Pinehurst	7,350		—			(154		)	7,196		4,111		—			—			4,111
Pheasant Run	6,250		43			(9		)	6,284		6,250		100			(20		)	6,330
Retreat of Shawnee	12,893		85			(23		)	12,955		13,090		164			(44		)	13,210
Conifer Crossing	—		—			—			—		27,074		—			—			27,074
Evergreen at Coursey Place	27,107		100			(96		)	27,111		27,548		123			(120		)	27,551
Pines of York	14,999		(299		)	(56		)	14,644		15,267		(363		)	(69		)	14,835
Estates at Johns Creek	49,596		—			(405		)	49,191		50,000		—			(526		)	49,474
Chisholm Place	11,587		—			(143		)	11,444		11,587		—			(163		)	11,424
Perimeter Circle	17,298		—			(143		)	17,155		17,657		—			(202		)	17,455
Perimeter 5550	13,651		—			(118		)	13,533		13,935		—			(167		)	13,768
Aston at Cinco Ranch	23,367		—			(268		)	23,099		23,772		—			(328		)	23,444
Sunset Ridge 1	19,699		259			(205		)	19,753		20,121		329			(261		)	20,189
Sunset Ridge 2	2,948		35			(26		)	2,957		3,002		45			(34		)	3,013
Calloway at Las Colinas	35,083		—			(306		)	34,777		35,740		—			(372		)	35,368
South Lamar Village	12,435		—			(131		)	12,304		12,682		—			(184		)	12,498
Heritage Pointe	26,280		—			(327		)	25,953		26,280		—			(370		)	25,910
Yorba Linda	67,500		—			(661		)	66,839		67,500		—			(860		)	66,640
Point Bonita Apartment Homes	26,907		1,966			(338		)	28,535		27,265		2,276			(391		)	29,150
Stone Ridge	5,227		—			(130		)	5,097		5,350		—			(153		)	5,197
The Westside Apartments	36,820		—			(448		)	36,372		23,000		—			(351		)	22,649
Tech Center Square	12,375		—			(196		)	12,179		12,500		—			(159		)	12,341
Williamsburg	53,995		—			(828		)	53,167		—		—			—			—
Retreat at Rocky Ridge	11,375		—			(261		)	11,114		—		—			—			—
	$	627,088	$	2,189		$	(7,125	)	$	622,152	$	595,384	$	2,674		$	(6,513	)	$	591,545

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The following table presents additional information about our mortgage notes payable, net, as of December 31, 2016 (in thousands, except percentages):

Collateral	Maturity Date	Margin over LIBOR		Annual Interest Rate			Average Monthly Debt Service		Average Monthly Escrow
Vista Apartment Homes	1/1/2022	2.29	%	3.06	%	(1)(5)	$	67	$	16
Cannery Lofts	11/1/2023	2.54	%	3.31	%	(1)(3)(6)	46		40
Deerfield	11/1/2020	—		4.66	%	(2)(5)	54		29
Trailpoint at the Woodlands	11/1/2023	2.41	%	3.18	%	(1)(4)	74		67
Verona Apartment Homes	10/1/2026	2.36	%	3.13	%	(1)(3)(6)	116		38
Skyview Apartment Homes	10/1/2026	2.36	%	3.13	%	(1)(3)(6)	100		22
Maxwell Townhomes	1/1/2022	—		4.32	%	(2)(5)	71		63
Pinehurst	11/1/2023	2.42	%	3.19	%	(1)(3)(6)	30		15
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
Estates at Johns Creek	7/1/2020	—		3.38	%	(2)(5)	221		102
Chisholm Place	6/1/2024	2.39	%	3.16	%	(1)(3)	43		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	1.88	%	2.65	%	(1)(3)	98		44
Yorba Linda	6/1/2020	1.75	%	2.52	%	(1)(3)	180		—
Point Bonita Apartment Homes	10/1/2023	—		5.33	%	(2)(5)	152		38
Stone Ridge	12/1/2022	1.86	%	2.63	%	(1)(5)	21		17
The Westside Apartments	9/1/2026	2.12	%	2.89	%	(1)(3)(6)	137		68
Tech Center Square	6/1/2023	2.58	%	3.35	%	(1)(5)(6)	55		25
Williamsburg	1/1/2024	2.38	%	3.15	%	(1)(3)(7)	202		123
Retreat at Rocky Ridge	1/1/2024	2.46	%	3.23	%	(1)(3)(7)	43		22

(1) Variable rate based on one-month LIBOR (0.77167% as of December 31, 2016).

(2) Fixed rate.

(3) Monthly interest-only payment required.

(4) Monthly fixed principal plus interest payment required.

(5) Fixed monthly principal and interest payment required.

(6) Refinanced during the year ended December 31, 2016.

(7) New debt placed during the year ended December 31, 2016.

At December 31, 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 55% to 65% of the cost of our real estate investments (before deducting depreciation or other non-cash reserves) plus the value of our other assets (54% as of December 31, 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.

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On December 20, 2013, we, through a wholly-owned subsidiary, entered into a loan, (the "Tech Center Loan") with PNC Bank, National Association.  Draws under the Tech Center Loan were secured by the assets of Tech Center Square Apartments (formerly known as the Jefferson Point Apartments). We provided a repayment guarantee of all interest and scheduled monthly principal payments (excluding the final payment at maturity for the outstanding balance.) In November 2014 and March 2016, we amended the Tech Center Loan. On May 3, 2016, the existing loan was repaid in full and was refinanced with a different lender. The Tech Center Loan had included covenants but are no longer required due to the refinance.

On December 27, 2013, we, through a wholly-owned subsidiary, entered into a loan, (the "Westside Loan") with U.S. Bank National Association.  Draws under the Westside Loan were secured by the assets of Westside Apartments. We provided a $6.5 million repayment guarantee. The Westside Loan was to mature on December 27, 2017, and may have been extended to December 27, 2019 subject to satisfaction of certain conditions and payment of an extension fee equal to 0.25% of the amount committed under the Westside Loan. In June 2015, we amended the Westside Loan. On September 1, 2016, the existing loan was repaid in full and was refinanced with a different lender. The Westside Loan had included covenants but are no longer required due to the refinance.

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. We make payments to our Advisor in connection with the acquisition of real estate investments and 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 16 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 December 31, 2016 did not exceed the charter imposed limitation.

Distributions

During the year ended December 31, 2014, we paid aggregate distributions of $32.9 million, including $10.0 million of distributions paid in cash and $22.9 million of distributions reinvested in shares of our common stock through our distribution reinvestment plan.During the year ended December 31, 2015, we paid aggregate distributions of $42.2 million, including $13.2 million of distributions paid in cash and $29.0 million of distributions reinvested in shares of our common stock through our distribution reinvestment plan. For the year endedDecember 31, 2016, we paid aggregate distributions of $43.0 million, including $14.5 million of distributions paid in cash and $28.5 million of distributions reinvested in shares of our common stock through our distribution reinvestment plan, as follows:

Record Date	Per Common Share		Distribution Date	Distribution 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
July 28, 2016	0.05		July 29, 2016	2,359		1,215		3,574
August 30, 2016	0.05		August 31, 2016	2,363		1,222		3,585
September 29, 2016	0.05		September 30, 2016	2,351		1,220		3,571
October 28, 2016	0.05		October 31, 2016	2,348		1,234		3,582
November 29, 2016	0.05		November 30, 2016	2,343		1,249		3,592
December 29, 2016	0.05		December 30, 2016	2,326		1,263		3,589
	$	0.60		$	28,497	$	14,508	$	43,005

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Distributions paid, distributions declared, and sources of distributions paid were as follows for the year ended December 31, 2016 (dollars in thousands):

	Distributions Paid										Distributions Declared			Sources of Distributions Paid
														Operating Activities	Debt Financing	Dispositions
2016	Cash		Distributions Reinvested (DRIP)		Total		Cash Provided By Operating Activities- QTD		Cash Provided By Operating Activities- YTD		Total		Per Share	Amount Paid/Percent of Total	Amount Paid/Percent of Total	Amount Paid/Percent of Total
First Quarter	$	3,490	$	7,256	$	10,746	$	4,884	$	4,884	$	10,746	$0.15	$4,884 / 45%	—	$5,862 / 55%
Second Quarter	$	3,615	$	7,151	$	10,766	$	2,597	$	7,481	$	10,766	$0.15	$2,597 / 24%	—	$8,169 / 76%
Third Quarter	$	3,657	$	7,073	$	10,730	$	742	$	8,223	$	10,730	$0.15	$742 / 7%	—	$9,988 / 93%
Fourth Quarter	$	3,746	$	7,017	$	10,763	$	2,907	$	11,130	$	10,763	$0.15	$2,907 / 27%	—	$7,856 / 73%
	$	14,508	$	28,497	$	43,005

Cash distributions paid since inception were as follows (in thousands, except per share data):

Fiscal Year Paid	Per Common Share		Distribution invested in shares of Common Stock		Net Cash Distribution		Total Aggregate Distribution
2012	$	0.15	$	1,052	$	841	$	1,893
2013	0.41		9,984		4,757		14,741
2014	0.48		22,898		9,959		32,857
2015	0.60		28,959		13,257		42,216
2016	0.60		28,497		14,508		43,005
	$	2.24	$	91,390	$	43,322	$	134,712

Since our formation, we have issued a total of seven quarterly stock distributions of 0.015 shares each, two quarterly stock distributions of 0.0075 shares each, one quarterly stock distribution of 0.00585 shares each, and two quarterly stock distributions of 0.005 shares each of its common stock outstanding. In connection with these stock distributions, we have increased our accumulated deficit by $21.3 million as of December 31, 2016.

Our net income attributable to common shareholders for the year ended December 31, 2016 was $4.1 million and net cash provided by operating activities was $11.1 million. Our cumulative cash distributions and net loss attributable to common stockholders from inception through December 31, 2016 were $134.7 million and $104.6 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 the 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 gains 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 attributable to common stockholders

Funds from operations attributable to common stockholders, 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

57

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”).

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 attributable to common stockholders, 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

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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 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 attributable to common stockholders, 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 (loss) 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.

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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 tables below include adjustments attributable to noncontrolling interests.

	Years Ended December 31,
	2016			2015			2014
Net income (loss) attributable to common stockholders – GAAP	$	4,065		$	(16,895	)	$	(46,177	)
Net gains on dispositions of properties and joint venture interests (2)	(38,834		)	(36,041		)	(10,484		)
Depreciation expense (3)	43,943			40,808			31,296
FFO attributable to common stockholders	9,174			(12,128		)	(25,365		)
Adjustments for straight-line rents	105			(176		)	—
Amortization of intangible lease assets (4)	228			6,360			13,913
Realized loss on change in fair value of interest rate cap	105			—			—
Loss on extinguishment of debt	791			—			—
Debt premium amortization (5)	(485		)	(602		)	(388		)
Acquisition costs	1,582			5,811			9,833
MFFO attributable to common stockholders	11,500			(735		)	(2,007		)
Net gains on dispositions of properties and joint venture interests (2)	38,834			36,041			10,484
AFFO attributable to common stockholders	$	50,334		$	35,306		$	8,477
Basic and diluted net loss per common share - GAAP	$	0.06		$	(0.24	)	$	(0.68	)
FFO per share	$	0.13		$	(0.17	)	$	(0.37	)
MFFO per share	$	0.16		$	(0.01	)	$	(0.03	)
AFFO per share	$	0.70		$	0.50		$	0.12
Weighted average shares outstanding (1)	71,787			70,397			68,008

(1) Excludes any dilution from the potential conversion of convertible stock as the actual number of shares that will be issuable upon conversion, if any, is indeterminable at December 31, 2016, 2015, and 2014.

(2) Net gains on dispositions of properties and joint venture interests for the year ended December 31, 2016 excludes $6.2 million attributable to noncontrolling interests.

(3) Depreciation expense excludes amounts attributable to noncontrolling interests of $60,000, $1.1 million, and $1.5 million for the years ended December 31, 2016, 2015, and 2014, respectively.

(4) Amortization of intangible lease assets excludes amounts attributable to noncontrolling interests of $1.1 million for the year ended December 31, 2014. There were no noncontrolling interest adjustments for the years ended December 31, 2016 and 2015.

(5) Debt premium amortization excludes amounts attributable to noncontrolling interests of $178,000 and $215,000 for the years ended December 31, 2015, and 2014, respectively. There was no noncontrolling interest adjustment for the year ended December 31, 2016.

Critical Accounting Policies

We consider these policies critical because they involve significant management judgments and assumptions, they require estimates about matters that are inherently uncertain, and they are important for understanding and evaluating our reported financial results. These judgments affect the reported amounts of our assets and liabilities and our disclosure of contingent assets and liabilities on the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. With different estimates or assumptions, materially different amounts could be reported in our financial statements. Additionally, other companies may utilize different estimates that may impact the comparability of our results of operations to those of companies in similar businesses.

Real Estate Assets

Depreciation

We make subjective assessments as to the useful lives of our depreciable assets. These assessments have a direct impact on our net income, because, if we were to shorten the expected useful lives of our investments in real estate, we would depreciate

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these investments over fewer years, resulting in more depreciation expense and lower net income on an annual basis throughout the expected useful lives of these investments. We consider the period of future benefit of an asset to determine its appropriate useful life. The estimated useful lives of our assets by class are as follows:

Buildings	27.5 years
Building improvements	3-27.5 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. The Manager, an affiliate of the Advisor, earns a construction management fee of 5.0% 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.

Real Estate Purchase Price Allocation

We record 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. We amortize 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, which we expect will range from one month to ten years.

We measure 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 vacant. Management's estimates of value are expected to be 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.

We consider information obtained about each property as a result of our preacquisition due diligence, marketing and leasing activities in estimating the fair value of the tangible and intangible assets acquired. In estimating carrying costs, management also includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods. Management 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 total amount of other intangible assets acquired will be further allocated to in-place lease values and customer relationship intangible values based on management's evaluation of the specific characteristics of each tenant's lease and our overall relationship with that respective tenant. Characteristics to be considered by management in allocating these values include the nature and extent of our existing business relationships with a tenant, growth prospects for developing new business 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.

We amortize the value of in-place leases to expense over the initial term of the respective leases. The value of customer relationship intangibles will be amortized to expense over the initial term and, 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 would be charged to expense in that period.

Estimates of the fair values of the tangible and intangible assets will require us to estimate market lease rates, property operating expenses, carrying costs during lease-up periods, discount rates, market absorption periods, and the number of years the property will be held for investment. The use of inappropriate estimates would result in an incorrect assessment of our purchase price allocation, which would impact the amount of our net income.

Valuation of Real Estate Assets

We continually monitor events and changes in circumstances that could indicate that the carrying amounts of our real estate and related intangible assets may not be recoverable. When indicators of potential impairment suggest that the carrying value of real estate and related intangible assets may not be recoverable, we will assess the recoverability of the assets by estimating whether we will recover the carrying value of the asset through its undiscounted future cash flows and its eventual disposition. If

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based on this analysis we do not believe that we will be able to recover the carrying value of the asset, we will record an impairment loss to the extent that the carrying value exceeds the estimated fair value of the asset.

Projections of future cash flows require us to estimate the expected future operating income and expenses related to an asset as well as market and other trends. The use of inappropriate assumptions in our future cash flows analysis would result in an incorrect assessment of our assets' future cash flows and fair values and could result in the overstatement of the carrying values of our real estate assets and an overstatement of our net income.

For properties held and used, an impairment loss will be recorded to the extent that the carrying value of a property exceeds the estimated fair value of the property.  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

Real estate loans held for investment are recorded at cost and reviewed for potential impairment at each balance sheet date. A loan held for investment is considered impaired when it becomes probable, based on current information, that we will be unable to collect all amounts due according to the loan's contractual terms. 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 the fair value of the collateral. If a loan was deemed to be impaired, we would record a reserve for loan losses through a charge to income for any shortfall. Failure to recognize impairment would result in the overstatement of the carrying values of our real estate loans receivable and an overstatement of our net income.

Preferred Equity Investment

We recorded our 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.

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

Discontinued Operations

Prior to January 1, 2014, assuming no significant continuing involvement by us after the sale, the sale of a property was considered a discontinued operation.

In April 2014, the Financial Accounting Standards Board ("FASB") issued authoritative guidance to change the criteria for reporting discontinued operations. Under the new guidance, only disposals representing a strategic shift in a company's operations and financial results should be reported as discontinued operations, with expanded disclosures. In addition, disclosure of the pre-tax income attributable to a disposal of a significant part of an organization that does not qualify as a discontinued operation is required. We have adopted this guidance and such guidance became effective for us as of January 1, 2014.

Goodwill

We record 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

We recognize 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 we will include amounts expected to be received in later years in deferred rents. We record property operating expense reimbursements due from tenants for common area maintenance, real estate taxes and other recoverable costs in the period in which the related expenses are incurred.

We make estimates of the collectability of our tenant receivables in relation to base rents, including straight-line rentals, expense reimbursements and other revenue or income. We specifically analyze accounts receivable and historical bad debts, customer creditworthiness, current economic trends and changes in customer payment terms when evaluating the adequacy of the

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allowance for doubtful accounts. In addition, with respect to tenants in bankruptcy, we will make estimates of the expected recovery of pre-petition and post-petition claims in assessing the estimated collectability of the related receivable. In some cases, the ultimate resolution of these claims can exceed one year. These estimates have a direct impact on our net income because a higher bad debt reserve results in less net income.

Interest income from performing loans receivable is recognized based on the contractual terms of the loan agreement. Fees related to any buy-down of the interest rate will be deferred as prepaid interest income and amortized over the term of the loan as an adjustment to interest income. Closing costs related to the purchase of a performing loan held for investment will be amortized using effective yield method over the term of the loan and accreted as an adjustment against interest income.

Adoption of New Accounting Standards

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. On December 15, 2016, we adopted ASU No. 2014-15 and the adoption had no impact on our consolidated financial statements.    

In January 2015, FASB issued Accounting Standards Update ("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. On January 1, 2016, we adopted ASU No. 2015-01 and the adoption had no impact on our consolidated financial statements.

In February 2015, FASB issued ASU No. 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, we adopted ASU No. 2015-02 and the adoption did not have a significant impact on our consolidated financial statements.

In April 2015, FASB issued ASU No. 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. On January 1, 2016, we adopted ASU No. 2015-03. Upon adoption, we 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. We had 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 No. 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. On January 1, 2016, we adopted ASU No. 2015-15. Upon adoption, deferred finance costs related to our credit facility were reclassified to prepaid expenses and other assets.     

In September 2015, FASB issued ASU No. 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. On January 1, 2016, we adopted ASU No. 2015-16 and the adoption had no impact on our 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 beginning January 1, 2018, including interim periods in 2018, and allows for both retrospective and prospective methods of adoption. In

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accordance with the our plan for the adoption of ASU 2014-09, we have identified revenue streams and are performing an in-depth review to identify the related performance obligations and to evaluate the impact on our consolidated financial statements and internal accounting processes and controls. As the majority of our revenue is derived from lease contracts, we do not expect that the adoption of ASU 2014-09 or related amendments and modifications issued by the FASB will have a material impact on our 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 annual period beginning January 1, 2019. We are evaluating this guidance; however, we do not expect the adoption of ASU No. 2016-02 to have a significant impact on our 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 annual period beginning January 1, 2019. We are evaluating this guidance; however, we do not expect the adoption of ASU No. 2016-13 to have a significant impact on our consolidated financial statements.

In August 2016, FASB issued ASU No. 2016-15, "Classification of Certain Cash Receipts and Cash Payments", which addresses eight specific cash flow issues with the objective of reducing existing diversity in practice.  ASU No. 2016-25 will be effective beginning January 1, 2018. Early application is permitted. We are evaluating this guidance; however, we do not expect the adoption of ASU No. 2016-15 to have a significant impact on our consolidated cash flows.

In January 2017, FASB issued ASU No. 2017-01, "Business Combinations (Topic 850): Clarifying the Definition of Business", which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of businesses.  ASU No. 2017-01 will be effective beginning January 1, 2018. Early application is permitted. We are evaluating this guidance and assessing the impact of this guidance on our consolidated financial statements.

In January 2017, FASB issued ASU No. 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment", which alters the current goodwill impairment testing procedures to eliminate Step 2. ASU No. 2017-04 will be effective beginning December 15, 2019. Early application is permitted. We are evaluating this guidance and assessing the impact of this guidance on our consolidated financial statements.

Contractual Obligations

The following table presents our scheduled contractual obligations required for the next five years and thereafter as of December 31, 2016 (dollars in thousands):

	Payments due by period
	Total		Less than 1 Year		1-3 Years		3-5 Years		More than 5 Years
Long-Term Debt Obligations	$	627,088	$	12,978	$	71,364	$	250,072	$	292,674
Interest on Long-Term Debt Obligations	119,142		22,084		41,159		30,623		25,276
Operating Lease Obligations	299		80		96		72		51
	$	746,529	$	35,142	$	112,619	$	280,767	$	318,001

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 has 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.

Subsequent Events

On January 20, 2017, we obtained $47.0 million in financing, secured by Providence in the Park.

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On January 27, 2017, 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: January 30, 2017, February 27, 2017, and March 30, 2017. Such distributions were or are to be paid on January 31, February 28, and March 31, 2017.

On March 20, 2017, we entered into an agreement to sell Mosaic, located in Oklahoma City, Oklahoma for $6.1 million with an expected closing in May 2017. We expect to record a gain on sale during the three months ended June 30, 2017.

On March 27, 2017, the Company's board of directors approved $7.5 million of redemption requests from investors.

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.    

ITEM 7A.    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 unpredictability 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 13 interest rate caps that were designated as cash flow hedges. 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 December 31, 2016 and December 31, 2015, we had $340.9 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 years endedDecember 31, 2016 and 2015, our annual interest expense would have increased by approximately $2.5 million and $2.2 million, respectively.

In addition, changes in interest rates affect the fair value of our fixed rate mortgage notes payable. As of December 31, 2016 and December 31, 2015, we had $286.2 million and $351.6 million, respectively, in fixed rate debt outstanding. As of December 31, 2016 and December 31, 2015, this fixed rate debt had fair values of $293.5 million and $359.7 million, respectively. Fair values are 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 December 31, 2016 and December 31, 2015, the fair value of this fixed rate debt would have decreased by $10.3 million and $14.0 million, respectively.

ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See the Index to Financial Statements at page F-1 of this Annual Report on Form 10-K.

ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

There were no disagreements with our independent registered public accountants during the year endedDecember 31, 2016.

ITEM 9A.    CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our periodic reports under the Securities Exchange Act of 1934, as amended, or the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

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Under the supervision of our principal executive officer and principal financial officer, we have carried out an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are effective.

Management's Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2016. In making this assessment, management used the criteria set forth in the 2013 version of the Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based upon this assessment, management believes that our internal control over financial reporting is effective as of December 31, 2016.

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 December 31, 2016 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

On March 28, 2017, David E. Bloom, our Senior Vice President, offered our Board of Directors his resignation as an officer of our company. Mr. Bloom’s decision was based on his determination that he will be unable to devote the necessary time and attention to company matters, and was not a result of any disagreements with us on any matter relating to our operations, policies or practices.

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PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Code of Conduct and Ethics

We have adopted a Code of Conduct and Ethics that applies to all of our executive officers and directors, including but not limited to, our chief executive officer and chief financial officer. Our Code of Conduct and Ethics may be found at http://www.resourcereit.com, on the Prospectus/SEC Filings page.

The other information required by this Item is incorporated by reference from our 2017 Proxy Statement.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this Item is incorporated by reference from our 2017 Proxy Statement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this Item is incorporated by reference from our 2017 Proxy Statement.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this Item is incorporated by reference from our 2017 Proxy Statement.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The information required by this Item is incorporated by reference from our 2017 Proxy Statement.

67

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

The following documents are filed as part of this Annual Report on Form 10-K:

(a) Financial Statements

1. See the Index to Consolidated Financial Statements at page F-1 of this report.

(b) Financial Statement Schedules

i. Schedule III Real Estate and Accumulated Depreciation

ii. Schedule IV - Mortgage Loans on Real Estate

(c) 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)
10.1	Third Amended and Restated Advisory Agreement (incorporated by reference to Post-Effective Amendment No. 2 to the Company’s Registration Statement on Form S-11 (No. 333-160463) filed March 3, 2011)
10.2	Management Agreement (incorporated by reference to Pre-Effective Amendment No. 1 to the Company’s Registration Statement on Form S-11 (No. 333-160463) filed September 15, 2009)
10.3	Amendment to Third Amended and Restated Advisory Agreement dated March 24, 2015 between Resource Real Estate Opportunity REIT, Inc. and Resource Real Estate Opportunity Advisor, LLC (incorporated by reference to the Company's Annual Report on Form 10-K filed March 31, 2015)
10.4	Renewal Agreement, dated September 15, 2016, between Resource Real Estate Opportunity REIT, Inc. and Resource Real Estate Opportunity Advisor, LLC

68

21.1	Subsidiaries of the Company
23.1	Consent of Grant Thornton LLP
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)
99.2	Consent of Duff & Phelps, LLC
101.1	Interactive Data Files

69

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.
March 30, 2017	By:	/s/ Alan F. Feldman
		ALAN F. FELDMAN
		Chief Executive Officer and Director

Pursuant to the requirements of the Securities Act of 1933, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ Geoffrey H. Woodward	Director	March 30, 2017
GEOFFREY H. WOODWARD
/s/ Andrew Ceitlin	Director	March 30, 2017
ANDREW CEITLIN
/s/ Gary Lichtenstein	Director	March 30, 2017
GARY LICHTENSTEIN
/s/ Lee F. Shlifer	Director	March 30, 2017
LEE F. SHLIFER
/s/ Alan F. Feldman	Chief Executive Officer and Director	March 30, 2017
ALAN F. FELDMAN	(Principal Executive Officer)
/s/ Steven R. Saltzman	Chief Financial Officer, Senior Vice President	March 30, 2017
STEVEN R. SALTZMAN	and Treasurer (Principal Financial Officer and Principal Accounting Officer)

70

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Financial Statements	Page
Report of Independent Registered Public Accounting Firm	F-1
Consolidated Balance Sheets at December 31, 2016 and 2015	F-2
Consolidated Statements of Operations and Comprehensive Income (Loss) for the Years Ended December 31, 2016, 2015, and 2014	F-3
Consolidated Statements of Changes in Stockholders' Equity for the Years Ended December 31, 2016, 2015, and 2014	F-4
Consolidated Statements of Cash Flows for the Years Ended December 31, 2016, 2015, and 2014	F-5
Notes to Consolidated Financial Statements - December 31, 2016	F-7

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

Resource Real Estate Opportunity REIT, Inc.

We have audited the accompanying consolidated balance sheets of Resource Real Estate Opportunity REIT, Inc. (a Maryland corporation) and subsidiaries (the “Company”) as of December 31, 2016 and 2015, and the related consolidated statements of operations and comprehensive income (loss), changes in stockholders' equity and cash flows for each of the three years in the period ended December 31, 2016. Our audits of the basic consolidated financial statements included the financial statement schedules listed in the index appearing under Item 15(b). These financial statements and financial statement schedules are the responsibility of the Company's management.Our responsibility is to express an opinion on these financial statements and financial statement schedules based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company's internal control over financial reporting.Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.Accordingly, we express no such opinion.An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.We believe that our audits provide a reasonable basis for our opinion. 

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Resource Real Estate Opportunity REIT, Inc. and subsidiaries as of December 31, 2016 and 2015, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2016 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the related financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

/s/ GRANT THORNTON LLP

Philadelphia, Pennsylvania

March 30, 2017

F-1

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands)

	December 31,
	2016			2015
ASSETS
Investments:
Rental properties, net	$	902,454		$	916,498
Other investments	769			4,643
Identified intangible assets, net	1,855			374
Assets held for sale - rental properties, net	—			69,350
Total investments	905,078			990,865
Cash	114,842			78,442
Restricted cash	10,277			9,987
Due from related parties	1,375			1,421
Tenant receivables, net	89			211
Deposits	262			230
Prepaid expenses and other assets	2,351			2,227
Goodwill	711			1,231
Other assets associated with rental properties held for sale	—			81
Total assets	$	1,034,985		$	1,084,695
LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net	$	622,152		$	591,545
Credit facility	—			21,894
Accounts payable	1,125			1,583
Accrued expenses and other liabilities	6,738			7,932
Accrued real estate taxes	7,262			6,856
Due to related parties	2,055			1,185
Tenant prepayments	1,069			1,212
Security deposits	2,565			2,626
Other liabilities associated with rental properties held for sale	—			16,763
Total liabilities	$	642,966		$	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; 74,975,022 and 72,333,652 shares issued, respectively; and 72,006,589 and 71,617,117 shares outstanding, respectively)	720			716
Convertible stock (“promote shares”; par value $.01; 50,000 shares authorized, issued and outstanding)	1			1
Additional paid-in capital	642,523			638,335
Accumulated other comprehensive loss	(345		)	(440		)
Accumulated deficit	(252,306		)	(213,366		)
Total stockholders’ equity	390,593			425,246
Noncontrolling interests	1,426			7,853
Total equity	$	392,019		$	433,099
Total liabilities and equity	$	1,034,985		$	1,084,695

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

F-2

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(in thousands, except per share data)

	Years Ended
	December 31,
	2016			2015			2014
Revenues:
Rental income	$	117,745		$	117,687		$	99,910
Interest and dividend income	622			638			359
Total revenues	118,367			118,325			100,269
Expenses:
Rental operating - expenses	27,608			34,167			34,759
Rental operating - payroll	14,790			16,769			14,784
Rental operating - real estate taxes	12,668			13,154			9,611
Subtotal - Rental operating expenses	55,066			64,090			59,154
Acquisition costs	1,582			5,811			9,833
Management fees	15,724			15,453			11,544
General and administrative	13,083			12,776			10,855
Loss on disposal of assets	1,576			3,093			5,308
Provision for loan loss	—			130			—
Depreciation and amortization expense	44,231			48,273			47,771
Total expenses	131,262			149,626			144,465
Loss before other income (expense)	(12,895		)	(31,301		)	(44,196		)
Other income (expense):
Net gains on dispositions of properties and joint venture interests	45,057			36,041			10,484
Interest expense	(22,776		)	(22,080		)	(14,911		)
Insurance proceeds in excess of cost basis	985			407			425
Total other income (expense)	23,266			14,368			(4,002		)
Net income (loss)	$	10,371		$	(16,933	)	$	(48,198	)
Net (income) loss attributable to noncontrolling interests	(6,306		)	38			2,021
Net income (loss) attributable to common stockholders	$	4,065		$	(16,895	)	$	(46,177	)
Net income (loss)	$	10,371		$	(16,933	)	$	(48,198	)
Other comprehensive income (loss):
Reclassification adjustment for realized loss on derivative due to sale	105			—			—
Designated derivatives, fair value adjustments	(10		)	(174		)	(286		)
Total other comprehensive income (loss)	95			(174		)	(286		)
Comprehensive income (loss)	10,466			(17,107		)	(48,484		)
Comprehensive (income) loss attributable to noncontrolling interests	(6,306		)	38			2,021
Total comprehensive income (loss) attributable to stockholders	$	4,160		$	(17,069	)	$	(46,463	)
Weighted average common shares outstanding	71,787			70,397			68,008
Basic and diluted income (loss) per common share:
Net income (loss) per common share	$	0.06		$	(0.24	)	$	(0.68	)

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

F-3

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2016, 2015, AND 2014

(in thousands)

	Common Stock					Convertible Stock			Additional Paid-in Capital			Accumulated Other Comprehensive Income (Loss)			Accumulated Deficit			Total Stockholders’ Equity			Noncontrolling interests			Total Equity
	Shares		Amount			Shares	Amount
Balance at January 1, 2014	66,667		$	668		50	$	1	$	590,591		$	20		$	(74,233	)	$	517,047		$	—		$	517,047
Common stock issued through distribution reinvestment plan	2,410		24			—	—		22,874			—			—			22,898			—			22,898
Distributions on common stock	333		3			—	—		3,330			—			(3,333		)	—			—			—
Distributions declared	—		—			—	—		—			—			(30,635		)	(30,635		)	—			(30,635		)
Common stock redemptions	(156	)	(2		)	—	—		(1,445		)	—			59			(1,388		)	—			(1,388		)
Other comprehensive loss	—		—			—	—		—			(286		)	—			(286		)	—			(286		)
Noncontrolling interests retained in the Paladin merger	—		—			—	—		—			—			—			—			18,901			18,901
Distributions to noncontrolling interests	—		—			—	—		—			—			—			—			(119		)	(119		)
Acquisitions of noncontrolling interests	—		—			—	—		(1,326		)	—			—			(1,326		)	(8,540		)	(9,866		)
Net loss	—		—			—	—		—			—			(46,177		)	(46,177		)	(2,021		)	(48,198		)
Balance at December 31, 2014	69,254		693			50	1		614,024			(266		)	(154,319		)	460,133			8,221			468,354
Common stock issued through distribution reinvestment plan	2,865		28			—	—		28,931			—			—			28,959			—			28,959
Distributions declared	—		—			—	—		—			—			(42,216		)	(42,216		)	—			(42,216		)
Common stock redemptions	(502	)	(5		)	—	—		(5,101		)	—			64			(5,042		)	—			(5,042		)
Other comprehensive loss	—		—			—	—		—			(174		)	—			(174		)	—			(174		)
Contributions from noncontrolling interests	—		—			—	—		—			—			—			—			151			151
Acquisitions of noncontrolling interests	—		—			—	—		481			—			—			481			(481		)	—
Net loss	—		—			—	—		—			—			(16,895		)	(16,895		)	(38		)	(16,933		)
Balance at December 31, 2015	71,617		716			50	1		638,335			$	(440	)	(213,366		)	425,246			7,853			433,099
Common stock issued through distribution reinvestment plan	2,642		26			—	—		28,471			—			—			28,497			—			28,497
Distributions declared	—		—			—	—		—			—			(43,005		)	(43,005		)	—			(43,005		)
Common stock redemptions	(2,252	)	(22		)	—	—		(24,283		)	—			—			(24,305		)	—			(24,305		)
Other comprehensive income	—		—			—	—		—			95			—			95			—			95
Deconsolidation of subsidiaries	—		—			—	—		—			—			—			—			(3,613		)	(3,613		)
Distribution to noncontrolling interests	—		—			—	—		—			—			—			—			(9,120		)	(9,120		)
Net income	—		—			—	—		—			—			4,065			4,065			6,306			10,371
Balance at December 31, 2016	72,007		$	720		50	$	1	$	642,523		$	(345	)	$	(252,306	)	$	390,593		$	1,426		$	392,019

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

F-4

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Years Ended
	December 31,
	2016			2015			2014
Cash flows from operating activities:
Net income (loss)	$	10,371		$	(16,933	)	$	(48,198	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Loss on disposal of assets	1,576			3,093			5,308
Casualty (gains) losses	(680		)	782			—
Provision for loan loss	—			130			—
Loss on extinguishment of debt	791			—			—
Net gains on disposition of properties and joint venture interests	(45,057		)	(36,041		)	(10,484		)
Depreciation and amortization	44,231			48,273			47,771
Amortization of deferred financing costs	2,120			1,839			1,365
Amortization of debt premium (discount)	(485		)	(779		)	(598		)
Realized loss on change in fair value of interest rate cap	105			—			—
Accretion of discount and direct loan fees and costs	(39		)	(39		)	(28		)
Changes in operating assets and liabilities, net of acquisitions:
Restricted cash	(1,428		)	(1,942		)	(2,332		)
Tenant receivables, net	55			313			161
Deposits	(65		)	3			(775		)
Prepaid expenses and other assets	489			886			363
Due to/from related parties, net	869			(722		)	(1,236		)
Accounts payable and accrued expenses	(1,720		)	583			5,289
Tenant prepayments	(102		)	(40		)	554
Security deposits	99			91			(127		)
Net cash provided by (used in) operating activities from continuing operations	11,130			(503		)	(2,967		)
Cash flows from investing activities:
Proceeds from disposal of properties and joint venture interests, net of closing costs	80,173			60,258			27,082
Property acquisitions	(63,126		)	(96,953		)	(229,041		)
Ownership acquisitions, net of cash received	—			—			(58,720		)
Insurance proceeds received for casualty losses	3,171			794			—
Acquisition of preferred equity interest	(408		)	(408		)	(3,460		)
Resolution of preferred equity interest	4,300			—			—
Capital expenditures	(28,024		)	(43,018		)	(37,384		)
Restricted cash	1,572			(766		)	1,981
Principal payments received on loans held for investment	21			601			227
Net cash used in investing activities of continuing operations	(2,321		)	(79,492		)	(299,315		)

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

F-5

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS - (Continued)

(in thousands)

	Years Ended
	December 31,
	2016			2015			2014
Cash flows from financing activities:
Redemptions of common stock	(24,305		)	(5,042		)	(1,389		)
Payment of deferred financing costs	(3,200		)	(402		)	(4,155		)
Borrowings on mortgages	194,870			31,473			182,213
Principal repayments on mortgages	(93,990		)	(6,150		)	(3,027		)
Borrowings on credit facility	12,500			33,918			85,520
Repayments on credit facility	(34,394		)	(22,288		)	(76,975		)
Purchase of interest rate caps	(262		)	(95		)	(110		)
Distributions paid on common stock	(14,508		)	(13,257		)	(9,958		)
Contributions of noncontrolling interests	—			151			—
Distributions to noncontrolling interests	(9,120		)	—			(119		)
Net cash provided by financing activities of continuing operations	27,591			18,308			172,000
Net cash provided by (used in) continuing operations	36,400			(61,687		)	(130,282		)
Cash flows from discontinued operations:
Net cash provided by operating activities	—			—			88
Net cash provided by discontinued operations	—			—			88
Net increase (decrease) in cash	36,400			(61,687		)	(130,194		)
Cash at beginning of year	78,442			140,129			270,323
Cash at end of year	$	114,842		$	78,442		$	140,129

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

F-6

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2016

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”) has been engaged to manage the day-to-day operations of the Company. 

On September 8, 2016, RAI was acquired by C-III Capital Partners LLC ("C-III"), a leading commercial real estate services company engaged in a broad range of activities. C-III controls our Advisor and Resource Real Estate Opportunity Manager, LLC (the "Manager"), the Company's property manager; C-III also controls all of the shares of common stock held by RAI.

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, 2016, 2015 and 2014, the Company issued a total of 7.9 million, in aggregate, additional shares for $80.4 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.

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 accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). 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	N/A
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

F-7

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

DECEMBER 31, 2016

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 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, 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 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")	Point Bonita Apartment Homes	295	Chula Vista, CA
RRE Yorba Linda Holdings, LLC ("Yorba Linda")	Yorba Linda	400	Yorba Linda, CA
RRE Providence Holdings, LLC ("Providence in the Park")	Providence in the Park	524	Arlington, TX
		9,022
Subsidiaries related to disposed investments:
RRE Crestwood Holdings, LLC (“Crestwood”)	(c)(g)	N/A	N/A
PRIP 5060/6310, LLC ("Governor Park")	(c)(g)	N/A	N/A
RRE Campus Club Holdings, LLC (“Campus Club”)	(c)	N/A	N/A
PRIP 6700, LLC ("Hilltop Village")	(c)(g)	N/A	N/A
RRE Westhollow Holdings, LLC (“Westhollow”)	(c)	N/A	N/A
RRE Flagstone Holdings, LLC ("Flagstone")	(d)(g)	N/A	N/A
RRE 107th Avenue Holdings, LLC (“107th Avenue”)	(d)(g)	N/A	N/A
RRE Bristol Holdings, LLC (“Bristol”)	(d)(g)	N/A	N/A
RRE Skyview Holdings, LLC ("Skyview")	(d)(g)	N/A	N/A
RRE Kenwick Canterbury Holdings, LLC ("Kenwick & Canterbury")	(d)	N/A	N/A
RRE Foxwood Holdings, LLC ("Foxwood")	(d)(g)	N/A	N/A
PRIP 3383, LLC ("Conifer Place")	(b)(e)	N/A	N/A
PRIP 3700, LLC ("Champion Farms")	(b)(e)	N/A	N/A
RRE Armand Place Holdings, LLC ("Armand")	(e)(g)	N/A	N/A
RRE Spring Hill Holdings, LLC ("Spring Hill")	(f)	N/A	N/A
RRE Nob Hill Holdings, LLC ("Nob Hill")	(e)	N/A	N/A
PRIP 10637, LLC ("Fieldstone")	(b)(e)	N/A	N/A
RRE Jasmine Holdings, LLC ("Jasmine")	(e)	N/A	N/A

F-8

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

DECEMBER 31, 2016

N/A - Not Applicable

(a) Subsidiary transferred its interest in a portion of the Williamsburg parking lot to RRE Williamsburg Holdings, LLC in 2016.

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

(c) Underlying investment sold prior to 2015.

(d) Underlying investment sold in 2015.

(e) Underlying investment sold in 2016.

(f) Underlying investment resolved in 2016.

(g) Subsidiary was dissolved prior to December 31, 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 9).    

(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 9).

(3) On January 27, 2016, the Company and its joint venture partner sold Conifer Place, which resulted in the deconsolidation of the entity as of January 27, 2016. (See Note 9).

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.  This investment was repaid in full on June 6, 2016 and the Company has no further continuing involvement with this investment. Additional information with respect to the preferred equity investment is disclosed in Note 6.

Segment Reporting

The Company does not evaluate performance on a relationship specific or transactional basis and does not distinguish its principal business or group its operations on a geographical basis for purposes of measuring performance. Accordingly, the Company believes it has a single operating segment for reporting purposes in accordance with GAAP.

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

DECEMBER 31, 2016

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. The Company had zero and three rental properties, respectively, included in assets held for sale as of December 31, 2016 and 2015.

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 had been reported as held for sale in the December 31, 2015 consolidated balance sheet.

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 have a useful life greater than or equal to one year. 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. These costs are capitalized along with the related asset. Costs of repairs and maintenance are expensed as incurred.

Concentration of Credit Risk

Financial instruments, which potentially subject the Company to concentration of credit risk, consist of periodic temporary deposits of cash. At December 31, 2016, the Company had $125.7 million of deposits at various banks, $112.0 million of which were over the insurance limit of the Federal Deposit Insurance Corporation. No losses have been experienced on such deposits.

As of December 31, 2016, the Company's real estate investments in Texas, Georgia, and California represented approximately 33%, 13%, and 18% of the net book value of its rental property assets, respectively. As a result, the geographic concentration of the Company's portfolio makes it particularly susceptible to adverse economic developments in the Texas, Georgia, and California real estate markets. Any adverse economic or real estate developments in these markets, such as business layoffs or downsizing, industry slowdowns, relocations of businesses, changing demographics and other factors, or any decrease in demand for multifamily rentals resulting from the local business climate, could adversely affect the Company's operating results and its ability to make distributions to stockholders.

Contractual Obligations

The Company leases parking space and equipment under leases with varying expiration dates through 2023.  As of December 31, 2016, the total payments due under these obligations were $299,000.

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 the property for properties to be held and used.  For properties held for sale, the impairment loss would be the adjustment to fair value less the

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RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

DECEMBER 31, 2016

estimated cost to dispose of the asset. There were no impairment losses recorded on long lived assets during the years ended December 31, 2016, 2015 and 2014.

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 investment, included in other investments on the consolidated balance sheets, 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 6).

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.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

DECEMBER 31, 2016

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. The Company tested goodwill as of December 31, 2016 and found no indications of impairment.

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 $56.0 million and $368,000 for the years ending December 31, 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 $325,000, $216,000, $148,000, $80,000, and $15,000 for the years ending December 31, 2017, 2018, 2019, 2020, and 2021, respectively, and none thereafter.

Revenue is primarily derived from the rental of residential housing units, however, included within rental income is 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 $10.8 million, $10.3 million and $7.8 million for the years endedDecember 31, 2016, 2015 and 2014, respectively.

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RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

DECEMBER 31, 2016

Tenant Receivables

Tenant receivables are stated in the financial statements at 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 December 31, 2016 and 2015, there were allowances for uncollectible receivables of $5,200 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 any of its subsidiaries as a taxable REIT subsidiary (“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 December 31, 2016 and 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 2012 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 take 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 16) are included in the diluted earnings per share calculations because the necessary conditions for conversion have not been satisfied as of December 31, 2016 (were such date to represent the end of the contingency period).  For the purposes of calculating earnings per share, all common shares and per common share information in the financial statements have been adjusted retroactively for the effect of seven1.5% stock distributions, two0.75% stock distributions, one0.585% stock distribution and two0.5% stock distributions issued to stockholders. Common stock shares issued on the consolidated balance sheets have also been adjusted retroactively for the effect of these 12 distributions.

Reclassifications

Certain amounts in the prior year financial statements have been reclassified to conform to the current-year presentation. The impact of the reclassifications made to prior year amounts are not material and did not affect net income (loss).

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

DECEMBER 31, 2016

In accordance with the adoption of Financial Accounting Standards Board ("FASB") Accounting Standards Update (“ASU”) No. 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, respectively, 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 from deferred financing costs to prepaid expenses and other assets (See Note 13).

Adoption of New Accounting Standards

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. On December 15, 2016, the Company adopted ASU No. 2014-15 and the adoption had no impact on the Company's consolidated financial statements.

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. 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 No. 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 No. 2015-02 and the adoption did not have a significant impact on the Company's consolidated financial statements.

In April 2015, FASB issued ASU No. 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. On January 1, 2016, the Company adopted ASU No. 2015-03. 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. The Company had 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 No. 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. On January 1, 2016, the Company adopted ASU No. 2015-15. Upon adoption, deferred finance costs related to the Company's credit facility were reclassified to prepaid expenses and other assets (See Note 13).     

In September 2015, FASB issued ASU No. 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. On January 1, 2016, the Company adopted ASU No. 2015-16 and the adoption had no impact on the Company's 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. In accordance with the Company’s plan for the adoption of ASU 2014-09, the Company has identified revenue streams and is performing an in-depth review to identify the related performance obligations and to evaluate the impact on the Company’s

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

DECEMBER 31, 2016

consolidated financial statements and internal accounting processes and controls. As the majority of the Company’s revenue is derived from lease contracts, the Company does not expect that the adoption of ASU 2014-09 or related amendments and modifications issued by the FASB will have a material impact on its 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 the Company's 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 the Company's consolidated financial statements.

In August 2016, FASB issued ASU No. 2016-15, "Classification of Certain Cash Receipts and Cash Payments", which addresses eight specific cash flow issues with the objective of reducing existing diversity in practice.  ASU No. 2016-25 will be effective for the Company beginning January 1, 2018. Early application is permitted. The Company is evaluating this guidance; however, it does not expect the adoption of ASU No. 2016-15 to have a significant impact on its consolidated cash flows.

In January 2017, FASB issued ASU No. 2017-01, "Business Combinations (Topic 850): Clarifying the Definition of Business", which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of businesses.  ASU No. 2017-01 will be effective for the Company beginning January 1, 2018. Early application is permitted. The Company is evaluating this guidance and assessing the impact of this guidance on its consolidated financial statements.

In January 2017, FASB issued ASU No. 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment", which alters the current goodwill impairment testing procedures to eliminate Step 2. ASU No. 2017-04 will be effective for the Company beginning December 15, 2019. Early application is permitted. The Company is evaluating this guidance and assessing the impact of this guidance on its consolidated financial statements.

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RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

DECEMBER 31, 2016

NOTE 3 – SUPPLEMENTAL CASH FLOW INFORMATION

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

	Years Ended
	December 31,
	2016		2015		2014
Non-cash financing and investing activities:
Stock issued from distribution reinvestment plan	$	28,497	$	28,959	$	22,898
Stock distributions issued	—		—		3,333
Deferred financing costs and escrow deposits funded directly by mortgage notes and credit facility	2,619		11,167		4,404
Accrual for construction in progress	1,343		896		947
Non-cash activity related to sales:
Deconsolidation of subsidiary and removal of related mortgage notes payable and noncontrolling interest	35,152		—		—
Mortgage notes payable settled directly with proceeds from sale of rental property	55,720		—		—
Assets and liabilities assumed in acquisitions:
Mortgage notes payable and other liabilities assumed in acquisition of rental property	—		40,284		176,935
Cash paid during the period for:
Interest	$	20,297	$	20,752	$	12,832

NOTE 4 – RESTRICTED CASH

Restricted cash represents escrow deposits with lenders to be used to pay real estate taxes, insurance, and capital improvement. The following table presents a summary of the components of the Company's restricted cash (in thousands):

	December 31,
	2016		2015
Real estate taxes	$	6,853	$	5,395
Insurance	1,854		1,657
Capital improvements	1,570		2,935
Total	$	10,277	$	9,987

In addition, the Company had unrestricted cash designated for capital expenditures of $101.6 million and $64.1 million for the years ended December 31, 2016 and 2015, respectively.

F-16

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

DECEMBER 31, 2016

NOTE 5 – RENTAL PROPERTIES, NET

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

	December 31,
	2016			2015
Land	$	176,418		$	180,533
Building and improvements	795,665			775,239
Furniture, fixtures and equipment	32,198			28,928
Construction in progress	5,983			2,949
	1,010,264			987,649
Less: accumulated depreciation	(107,810		)	(71,151		)
	$	902,454		$	916,498

Depreciation expense for the years endedDecember 31, 2016, 2015, and 2014 was $44.0 million, $41.9 million, and $32.8 million, respectively.

During the three months ended December 31, 2015, the Company entered into agreements to sell two rental properties, with an aggregate total net book value of $43.9 million. The Company confirmed the intent and ability to sell all of the properties in their present condition and all properties qualified for held for sale accounting treatment upon meeting all applicable criteria on or 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 anticipated 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 these two rental properties during the three months ended March 31, 2016 (see Note 9).

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 sheets.

Carrying amounts of major classes of assets and liabilities included in held for sale related to Champion Farms at December 31, 2015 were as follows (in thousands):

Assets:
Rental properties, net	$	25,436
Restricted cash	$	54
Tenant receivables, net	2
Prepaid expenses and other assets	25
Subtotal - other assets associated with rental properties held for sale	$	81
Liabilities:
Mortgage note payable, net	$	16,443
Accounts payable	44
Accrued expenses and other liabilities	176
Tenant prepayments	57
Security deposits	43
Subtotal- other liabilities associated with rental properties held for sale	$	16,763

Included in the consolidated balance sheet at December 31, 2015 was $7.9 million of noncontrolling interests, of which $5.7 million related to interests held for sale.

F-17

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

DECEMBER 31, 2016

NOTE 6 − LOAN HELD FOR INVESTMENT, NET

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 Note and Peterson Note were resolved in prior years.

On August 18, 2011, the Company was the successful bidder at a foreclosure sale of the property collateralizing the Heatherwood Note. Possession of the Heatherwood Apartments was obtained in February 2012 and the property was subsequently sold in April 2013. On April 18, 2013, in connection with the sale of the Heatherwood Apartments, the Company originated an $800,000 mortgage loan (the "Heatherwood Sale Note") to the purchaser of the Heatherwood Apartments on the same date. In May 2015, the Company agreed to accept $583,000 from the borrower and apply $58,000 of escrow balances in full satisfaction of the loan. As such, the Company recorded a provision for loan loss of $130,000 during the year ended December 31, 2015 related to this payoff.

The following table presents the aging of the Trail Ridge Note, the Company’s remaining loan held for investment (in thousands), which is included in other investments on the consolidated balance sheets:

	December 31,
	2016		2015
Current	$	769	$	757
Delinquent:
30−89 days	—		—
90−180 days	—		—
Greater than 180 days	—		—
	$	769	$	757

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

	December 31,
	2016		2015
Loans:
Performing	$	769	$	757
Nonperforming	—		—
Total	$	769	$	757

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

	December 31,
	2016			2015
Unpaid principal balance	$	960		$	981
Unamortized discount	(198		)	(231		)
Deferred expenses, net	7			7
Net book value	$	769		$	757
Maturity date	10/28/2021
Interest rate	7.5		%
Average monthly payment	$	8

F-18

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

DECEMBER 31, 2016

The Company has evaluated the loan for impairment and determined that, as of December 31, 2016, it was not impaired.  There were no allowances for credit losses as of both December 31, 2016 and 2015. There were $0 and $130,000 of charge-offs for the years ended December 31, 2016 and 2015, respectively.

NOTE 7 − 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. Presidium AMC Spring Hill Venture, LLC, (“Presidium”), a Texas limited liability company, owned the common equity and acted as the managing member of the Investment Vehicle. In October 2015 and March 2016, the Company increased its investment by a total of $800,000. The Company was obligated to fund up to an additional $1.1 million in increments of $150,000 as long as no triggering event had occurred.

The Investment Vehicle was the sole member of Spring Hill Investors GP, LLC, which was the general partner of Spring Hill Investors, LP, the owner of a 606-unit multifamily residential apartment community commonly known as Spring Hill Apartments (“Spring Hill”) and located in Dallas, Texas. The Company’s preferred equity investment was predominately utilized for capital improvements and deferred maintenance projects.

The Company was paid a dividend equal to 12% of the total amount invested, of which 7% was paid monthly and

the remaining amount accrued and was to be paid when the property cash flow allowed for the repayment. The mandatory redemption date for the investment was to be the earliest of (i) April 2017 or (ii) any earlier date that the mortgage loan secured by Spring Hill Apartments becomes due and payable as a result of the acceleration of the loan maturity date by the lender, or (iii) the date on which a defeasance is effected pursuant to the loan documents. The outstanding balance as of December 31, 2015 was $3.9 million, which is included in other investments on the consolidated balance sheets.

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 and dividend income in the Company's consolidated statement of operations.

NOTE 8 – ACQUISITIONS AND FORECLOSURES

Real Estate Investments

As of December 31, 2016, the Company owned 31 properties, including six of the 12 properties purchased on January 28, 2014 as part of the Paladin Realty Income Properties, Inc. (“Paladin”) portfolio acquisition, discussed below. The Company recognized goodwill on the Paladin transaction as the excess of purchase price over the fair value of the property acquired. The Company estimated the fair values of certain of the acquired assets and liabilities based on preliminary valuations at the date of purchase. The Company has received final appraisals for all recent acquisitions.

The table below summarizes these acquisitions and the respective fair values assigned, excluding non-wholly owned properties acquired through the Paladin merger (dollars in thousands):

Multifamily Community Name	City and State	Date of Acquisition	Contractual Purchase Price (1)			Land		Building and Improvements		Furniture, Fixtures and Equipment		Intangible Assets		Other Assets		Liabilities			Fair Valued Assigned
Providence in the Park	Arlington, TX	12/22/2016	$	63,200		$	7,398	$	53,270	$	822	$	1,710	$	83	$	(214	)	$	63,069
Point Bonita Apartment Homes	Chula Vista, CA	6/16/2015	49,050			17,208		32,651		506		1,130		9		(30,008		)	21,496
Yorba Linda	Yorba Linda, CA	6/1/2015	118,000			39,322		76,124		590		1,964		76		(232		)	117,844
Heritage Pointe	Gilbert, AZ	3/19/2015	36,000			8,487		25,867		716		931		—		(152		)	35,849
South Lamar Village	Austin, TX	2/26/2015	24,000			5,586		17,493		291		629		—		(12,961		)	11,038
Pines of York	Yorktown, VA	1/28/2014	8,087		(2)	4,464		16,340		400		715		416		(15,447		)	6,888
Calloway at Las Colinas	Irving, TX	9/29/2014	48,500			6,707		39,543		825		1,425		9		(636		)	47,873

F-19

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

DECEMBER 31, 2016

Sunset Ridge	San Antonio, TX	9/4/2014	35,000		15,425	18,615	514	931	—	(24,737	)	10,748
Pinehurst	Kansas City, MO	1/28/2014	3,588	(3)	1,250	8,241	200	290	142	(4,548	)	5,575
Pheasant Run	Lee's Summit, MO	1/28/2014	4,277	(3)	800	10,798	300	317	172	(6,559	)	5,828
Retreat at Shawnee	Shawnee, KS	1/28/2014	5,369	(3)	3,200	14,550	500	608	186	(14,088	)	4,956
Aston at Cinco Ranch	Katy, TX	6/26/2014	32,300		5,831	25,247	307	915	—	(377	)	31,923
Perimeter 5550	Atlanta, GA	5/19/2014	22,250		4,002	17,600	194	453	—	(110	)	22,139
Perimeter Circle	Atlanta, GA	5/19/2014	29,500		4,723	23,969	219	588	—	(156	)	29,343
Chisholm Place	Plano, TX	5/5/2014	15,000		1,981	12,383	198	438	—	(96	)	14,904
Evergreen at Coursey	Baton Rouge, LA	1/28/2014	15,499	(4)	3,430	38,041	530	1,080	680	(28,844	)	14,917
The Estates at Johns Creek	Alpharetta, GA	3/28/2014	70,500		6,353	62,249	509	1,389	49	(392	)	70,157
Meridian Pointe	Burnsville, MN	12/20/2013	33,149		4,134	26,992	1,016	1,008	36	(107	)	33,079
Maxwell Townhomes	San Antonio, TX	12/16/2013	22,500		3,830	17,510	491	669	48	(14,363	)	8,185
The Nesbit Palisades	Alpharetta, GA	10/25/2013	25,050		7,582	16,023	587	859	37	(161	)	24,927
Verona Apartment Homes	Littleton, CO	9/30/2013	30,600		5,702	23,609	198	1,090	24	(190	)	30,433
Skyview Apartment Homes	Westminster, CO	9/30/2013	24,250		2,923	20,301	97	928	20	(147	)	24,122
Tech Center Square	Newport News, VA	9/9/2013	18,250		3,951	13,048	584	667	23	(59	)	18,214
The Westside Apartments	Plano, TX	7/25/2013	32,200		5,785	24,418	798	1,199	52	(317	)	31,935
Affinity at Winter Park	Winter Park, FL	6/27/2013	10,100		2,512	6,459	523	606	50	(61	)	10,089
Trailpoint at the Woodlands	Spring, TX	6/24/2013	27,200		3,785	22,014	697	704	40	(170	)	27,070
Retreat at Rocky Ridge	Hoover, AL	4/18/2013	8,500		1,616	6,418	30	436	2	(89	)	8,413
Ivy at Clear Creek	Houston, TX	3/28/2013	11,750		1,877	9,175	28	670	8	(127	)	11,631
Deerfield	Hermantown MN	3/21/2012	10,300	(5)	1,660	11,110	500	423	1	(4	)	13,690
Mosaic	Oklahoma City, OK	12/6/2012	2,050		1,000	2,609	30	123	14	(14	)	3,762
Williamsburg Apartments	Cincinnati, OH	6/20/2012	41,250		3,223	35,111	1,007	1,909	49	(274	)	41,025
Cannery Lofts	Dayton, OH	5/13/2011	7,100	(6)	160	7,913	200	609	35	—		8,917
Vista Apartment Homes	Philadelphia, PA	6/17/2011	12,000	(7)	1,163	9,913	—	535	530	(141	)	12,000

(1) Contractual purchase price excludes closing costs, acquisition expenses, and other immaterial settlement date adjustments and pro-rations. For properties acquired through foreclosure, the purchase price reflects the contract purchase price of the note.

(2) The Company originally acquired a 90% interest in the joint venture that owned Pines of York on January 28, 2014. On November 25, 2014, the Company purchased the remaining 10% ownership interest of its joint venture partner, bringing the Company's ownership percentage to 100%.

(3) The Company originally acquired a 97.5% interest in each of the joint ventures that owned Pinehurst, Pheasant Run and Retreat at Shawnee on January 28, 2014. On July 1, 2014, the Company purchased the remaining 2.5% ownership interest of its joint venture partner in each entity, bringing the Company's ownership percentage in each entity to 100%.

(4) The Company originally acquired a 51.7% interest in the joint venture that owned Evergreen at Coursey on January 28, 2014. On March 31, 2014, the Company purchased the remaining 48.3% ownership interest of its joint venture partner, bringing the Company's ownership percentage to 100%.

F-20

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

DECEMBER 31, 2016

(5) Deerfield originally served as the collateral for a non-performing note that the Company purchased on March 21, 2012. On July 19, 2012, the Company was the successful bidder at a foreclosure sale and formally received title to the property on January 22, 2013. The date of acquisition reflects the date the Company acquired the note.

(6) Cannery Lofts originally served as the collateral for a non-performing note that the Company purchased on May 13, 2011. On December 21, 2011, the Company entered into a settlement agreement with the borrower and, subsequently, the Company foreclosed and formally received title to the property on June 6, 2012. The date of acquisition reflects the date the Company acquired the note.

(7) Vista Apartment Homes, formerly known as Iroquois Apartments, originally served as the collateral for a non-performing promissory note that the Company purchased on June 17, 2011. On August 2, 2011, the Company was the successful bidder at a sheriff's sale and formally received title to the property.

Acquisitions

The Company acquired one property during the year endedDecember 31, 2016. In order to finalize the fair values of the acquired assets and liabilities, a third-party appraisal was obtained for the property acquired. The Company has up to 12 months from the date of acquisition to finalize the valuation for this property. The valuation has been finalized as of December 31, 2016.

Yorba Linda Acquisition -2015

The supplemental pro forma financial information set forth below is based upon historical financial statements giving effect to the Yorba Linda acquisition as of the beginning of the period presented (in thousands):

	For the Year Ended
	December 31, 2014
	(unaudited)
Revenues	108,005
Net loss attributable to common stockholders	(50,043		)
Basic and diluted net loss per share	$	(0.74	)

Paladin Acquisition -2014

On July 18, 2013, Resource Real Estate Opportunity OP, LP (the “Operating Partnership”), the operating partnership of the Company, entered into an Agreement and Plan of Merger with RRE Charlemagne Holdings, LLC, a wholly-owned subsidiary of the Operating Partnership (“Merger Sub”), Paladin, and Paladin Realty Income Properties, L.P. (“Paladin OP”), whose sole general partner was Paladin, pursuant to which Paladin OP was to merge with and into Merger Sub (the “Merger”), with Merger Sub surviving as a wholly-owned subsidiary of the Operating Partnership.

On January 28, 2014, the parties completed the Merger resulting in the acquisition by the Operating Partnership of interests in 11 joint ventures that owned a total of 10 multifamily communities with more than 2,500 rentable units and two office properties that contained more than 75,000 rentable square feet. The Operating Partnership also acquired, as part of the Merger, a promissory note in the principal amount of $3.5 million issued by a consolidated joint venture which was eliminated in consolidation. This promissory note was secured by the co-venturer’s interests in such joint venture and was repaid in full on November 17, 2015. The consideration for the Merger was $51.2 million exclusive of transaction costs. The names of each community, location and the Company's joint venture ownership interests on the date of acquisition are presented below:    

Multifamily Community Name	City and State	Ownership % at Date of Acquisition
Champion Farms	Louisville, KY	70.0%
Fieldstone	Woodlawn, OH	83.0%
Pinehurst	Kansas City, MO	97.5%
Pheasant Run	Lee's Summit, MO	97.5%
Retreat at Shawnee	Shawnee, KS	97.5%
Hilltop Village	Kansas City, MO	49.0%
Conifer Place	Norcross, GA	42.5%
Stone Ridge	Columbia, SC	68.5%
Evergreen at Coursey Place	Baton Rouge, LA	51.7%
Pines of York	Yorktown, VA	90.0%
Governor Park (sold March 6, 2014)	San Diego, CA	47.65%

F-21

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

DECEMBER 31, 2016

On March 6, 2014, the Company, through a wholly-owned subsidiary, sold its 47.65% membership interest in one of the Paladin joint ventures, FPA/PRIP Governor Park, LLC ("Governor Park"), to its joint venture partner, FPA Governor Park Associates, LLC for $456,000. The sale price approximated the fair value, therefore no gain or loss was recognized on the transaction.

The allocation of the purchase price for the interests in the 11 Paladin joint ventures, which was completed during the year ended December 31, 2014, is included below (in thousands):

Multifamily Community Name	Land		Building and Improvements		Intangible Assets		Fair Value of Property		Other Assets		Liabilities			Noncontrolling Interest			Total Company Equity		Goodwill		Allocation of Purchase Price
Champion Farms	$	3,168	$	23,464	$	579	$	27,211	$	575	$	(17,015	)	$	(3,231	)	$	7,540	$	171	$	7,711
Fieldstone	1,420		18,472		648		20,540		661		(16,462		)	(806		)	3,933		130		4,063
Pinehurst	1,250		8,241		290		9,781		332		(4,548		)	(139		)	5,426		72		5,498
Pheasant Run	800		10,798		317		11,915		472		(6,559		)	(146		)	5,682		76		5,758
Retreat at Shawnee	3,200		14,550		608		18,358		686		(14,088		)	(124		)	4,832		117		4,949
Hilltop Village	800		4,289		195		5,284		267		(4,612		)	(479		)	460		33		493
Conifer Place	5,040		28,712		1,007		34,759		749		(28,776		)	(3,869		)	2,863		219		3,082
Stone Ridge	1,300		4,612		326		6,238		985		(178		)	(2,218		)	4,827		42		4,869
Evergreen at Coursey Place	3,430		38,041		1,080		42,551		1,210		(28,844		)	(7,200		)	7,717		268		7,985
Pines of York	4,464		16,340		715		21,519		816		(15,446		)	(689		)	6,200		136		6,336
	$	24,872	$	167,519	$	5,765	$	198,156	$	6,753	$	(136,528	)	$	(18,901	)	$	49,480	$	1,264	$	50,744
Governor Park (sold March 6, 2014)																					456
Total purchase price																					$	51,200

On March 31, 2014, the Company purchased the remaining 48.3% ownership interest in Evergreen at Coursey Place ("Coursey Place") from its joint venture partner for $7.5 million. A summary of the transaction is as follows (in thousands):

Purchase price	$	7,500
Noncontrolling interest assumed	$	7,200
Losses attributable to noncontrolling interest	(191		)
Distribution to noncontrolling interest	(116		)
Adjusted noncontrolling interest balance	6,893
Adjustment to additional paid in capital	$	(607	)

On July 1, 2014, the Company purchased the remaining 2.5% ownership interest in Pinehurst, Pheasant Run and Retreat at Shawnee from its joint venture partner for a total of $1.1 million. A summary of the transactions is as follows (in thousands):

	Pinehurst			Pheasant Run			Retreat at Shawnee
Purchase price	$	570		$	515		$	15
Noncontrolling interests assumed	139			146			124
Losses attributable to noncontrolling interests	(7		)	(8		)	(15		)
Adjusted noncontrolling interest balance	132			138			109
Adjustment to additional paid in capital	$	(438	)	$	(377	)	$	94

F-22

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

DECEMBER 31, 2016

In the years ended December 31, 2015 and 2014, the Company contributed $356,000 and $1.1 million, respectively, to the joint venture partnership that owns Stone Ridge. The joint venture partner did not contribute its pro-rata share, which resulted in a reduction of its partnership interest. As a result, the Company obtained an additional 5.7% and 9.2%, respectively, interest in the joint venture, increasing its ownership interest to 83.4% at December 31, 2015.

In November 2014, the Company purchased the remaining 10% ownership interest in Pines of York from its joint venture partner for $900,000. A summary of the transaction is as follows (in thousands):

	Pines of York
Purchase price	$	900
Noncontrolling interests assumed	690
Losses attributable to noncontrolling interests	(98		)
Adjusted noncontrolling interest balance	592
Adjustment to additional paid in capital	$	(308	)

The tables below present the total revenues, net loss, and acquisition costs of the Company's acquisitions during the year ended December 31, 2016, 2015, and 2014 (dollars in thousands):

Multifamily Community	Total Revenues		Net Loss			Acquisition Costs
2016 Acquisitions:
Providence in the Park	$	193	$	(781	)	$	(1,509	)
Various properties	—		—			(73		)	(1	)
	$	193	$	(781	)	$	(1,582	)

Multifamily Community	Total Revenues		Net Loss			Acquisition Costs
2015 Acquisitions:
South Lamar Village	$	2,086	$	(1,580	)	$	(692	)
Heritage Pointe	3,019		(2,173		)	(1,005		)
Yorba Linda	4,584		(3,405		)	(2,761		)
Point Bonita Apartment Homes	2,431		(2,144		)	(1,353		)
	$	12,120	$	(9,302	)	$	(5,811	)

Multifamily Community	Total Revenues		Net Loss			Acquisition Costs
2014 Acquisitions:
South Lamar Village (2)	$	—	$	—		$	(66	)
Calloway at Las Colinas	1,445		(1,234		)	(1,290		)
Sunset Ridge	1,214		(1,216		)	(968		)
Aston at Cinco Ranch	1,718		(1,144		)	(832		)
Perimeter 5550	1,172		(1,024		)	(606		)
Perimeter Circle	1,501		(1,272		)	(748		)
Chisholm Place	1,196		(1,042		)	(494		)
The Estates at Johns Creek	4,828		(3,287		)	(1,720		)
Paladin Properties	22,645		(10,190		)	(3,109		)
	$	35,719	$	(20,409	)	$	(9,833	)

(1) Acquisition fees paid in 2016 related to additional investments in properties to fund additional capital reserves.

(2) Acquisition that was completed during the first quarter of fiscal 2015.

F-23

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

DECEMBER 31, 2016

NOTE 9 - MEASUREMENT PERIOD ADJUSTMENTS

The Company obtains third party appraisals for all of its acquisitions. If the appraisals are not finalized in the period in which the property or interest was acquired, a measurement period adjustment is recorded. For the Estates at Johns Creek acquisition, which was completed in the three months ended March 31, 2014, the measurement period adjustments were finalized during the three months ended June 30, 2014. For the Paladin acquisition, which was completed in the three months ended March 31, 2014, the measurement period adjustments were finalized during the three months ended December 31, 2014. There were no measurement period adjustments needed for the years ended December 31, 2016 and 2015.     

Changes in the Paladin and the Estates at Johns Creek acquisitions are reflected in the tables below (in thousands):

Paladin

	January 28, 2014 (As initially reported)			Measurement period adjustment (1)			January 28, 2014 (As adjusted)
Land	$	44,292		$	(19,420	)	$	24,872
Building	149,155			18,364			167,519
Personal property	—			3,530			3,530
Intangible assets	5,861			(96		)	5,765
Other assets	3,231			(9		)	3,222
Goodwill	6,412			(5,148		)	1,264
Liabilities	(140,970		)	4,442			(136,528		)
Total net identifiable net assets	$	67,981		$	1,663		$	69,644

(1) Remaining balance ($1.7 million) of measurement period adjustments impacted the noncontrolling interest balance.

The results of operations for the three months ended June 30, 2014 include an additional $867,000 of depreciation and amortization that would have been included in the three months ended March 31, 2014 had the final appraisals for the Paladin properties been received and recorded during that period.

Estates at Johns Creek

	March 28, 2014 (As initially reported)		Measurement period adjustment			March 28, 2014 (As adjusted)
Land	$	18,137	$	(11,784	)	$	6,353
Building	51,843		10,406			62,249
Personal property	—		509			509
Intangible assets	520		869			1,389
Total net identifiable net assets	$	70,500	$	—		$	70,500

The measurement period adjustment for the Estates at Johns Creek had no impact on depreciation and amortization for the three months ended March 31, 2014.

F-24

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

DECEMBER 31, 2016

NOTE 10 – DISPOSITION OF PROPERTIES AND DECONSOLIDATION OF INTERESTS

The following table presents details of our disposition and deconsolidation activity during the years ended December 31, 2016, 2015, and 2014 (in thousands):

Multifamily Community	Location	Sale Date	Contract Sales price		Net Gains on Dispositions of Properties and Joint Venture Interests			Revenues Attributable to Properties Sold		Net Income (Loss) Attributable to Properties Sold
2016 Dispositions:
Conifer Place (1)	Norcoss, Georgia	January 27, 2016	$	42,500	$	9,897		$	365	$	9,942
Champion Farms	Louisville, Kentucky	January 29, 2016	7,590		1,066			220		1,125
The Ivy at Clear Creek	Houston, Texas	February 17, 2016	19,400		6,792			386		6,629
Affinity at Winter Park	Winter Park, Florida	June 9, 2016	17,500		5,605			1,010		5,757
Fieldstone	Woodland, Ohio	June 30, 2016	7,514		4,096			1,548		4,325
The Nesbit Palisades	Alpharetta, Georgia	July 8, 2016	45,500		17,601			2,615		17,739
			$	140,004	$	45,057		$	6,144	$	45,517
2015 Dispositions:
The Alcove Apartments	Houston, Texas	January 26, 2015	$	11,050	$	3,784		$	199	$	3,819
107th Avenue Apartments	Omaha, Nebraska	January 29, 2015	250		50			3		50
The Redford Apartments	Houston, Texas	February 27, 2015	32,959		15,303			1,274		15,652
Cityside Apartments	Houston, Texas	March 2, 2015	24,500		10,028			701		10,290
One Hundred Chevy Chase	Lexington, Kentucky	June 30, 2015	13,500		4,386			828		4,027
The Reserve at Mt. Moriah	Memphis, Tennessee	September 18, 2015	5,425		2,490			1,135		2,202
			$	87,684	$	36,041		$	4,140	$	36,040
2014 Dispositions:
Governor Park	San Diego, California	March 6, 2014	$	456	$	—		$	—	$	—
Campus Club	Tampa, Florida	June 16, 2014	10,500		2,602			849		2,723
Hilltop Village (2)	Kansas City, Missouri	July 1, 2014	—		(493		)	352		(707		)
Arcadia at Westheimer	Houston, Texas	September 19, 2014	18,100		8,375			2,667		8,407
			$	29,056	$	10,484		$	3,868	$	10,423

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

(2)    Net income (loss) attributable to properties sold presented includes $112,000 attributable to noncontrolling interests.

NOTE 11 – IDENTIFIED INTANGIBLE ASSETS, NET

Identified intangible assets, net, relate to in-place apartment unit rental and antennae leases. The value of the acquired in-place leases totaled $1.9 million and $374,000 as of December 31, 2016 and 2015, respectively, net of accumulated amortization of $24.3 million and $28.4 million, respectively.  The weighted-average remaining life of the acquired apartment unit rental leases is seven months and one month as of December 31, 2016 and 2015, respectively. Expected amortization for the antennae leases at the Vista Apartment Homes is $16,000 annually through 2025.  Amortization of the rental and antennae leases for the years endedDecember 31, 2016, 2015, and 2014 was $228,000, $6.4 million, and $15.0 million, respectively.

F-25

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

DECEMBER 31, 2016

Expected amortization for the rental and antennae leases for the next five years ending December 31, and thereafter, is as follows (in thousands): 

2017	$	1,726
2018	16
2019	16
2020	16
2021	16
Thereafter	65
	$	1,855

NOTE 12 – GOODWILL

The following table presents a rollforward of the Company's activity in goodwill for the years ended December 31, 2016 and 2015 (in thousands):

Balance, January 1, 2015	$	1,231
Activity - 2015	—
Balance, December 31, 2015	$	1,231
Activity - 2016: Sale of Conifer Place, Champion Farms, and Fieldstone	(520		)
Balance, December 31, 2016	$	711

F-26

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

DECEMBER 31, 2016

NOTE 13 – MORTGAGE NOTES PAYABLE, NET

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

	December 31, 2016										December 31, 2015
	Outstanding borrowings		Premium (Discount)			Deferred finance costs, net			Carrying Value		Outstanding borrowings		Premium (Discount)			Deferred finance costs, net			Carrying Value
Collateral
Vista Apartment Homes	$	15,225	$	—		$	(178	)	$	15,047	$	15,573	$	—		$	(216	)	$	15,357
Cannery Lofts	13,100		—			(197		)	12,903		8,148		—			(131		)	8,017
Deerfield	10,359		—			(125		)	10,234		10,517		—			(159		)	10,358
Ivy at Clear Creek	—		—			—			—		8,431		—			(136		)	8,295
Trailpoint at the Woodlands	18,690		—			(222		)	18,468		19,013		—			(257		)	18,756
Verona Apartment Homes	32,970		—			(532		)	32,438		22,402		—			(179		)	22,223
Skyview Apartment Homes	28,400		—			(462		)	27,938		18,089		—			(148		)	17,941
The Nesbit Palisades	—		—			—			—		20,298		—			(309		)	19,989
Maxwell Townhomes	13,602		—			(137		)	13,465		13,850		—			(167		)	13,683
Fieldstone	—		—			—			—		15,332		—			(37		)	15,295
Pinehurst	7,350		—			(154		)	7,196		4,111		—			—			4,111
Pheasant Run	6,250		43			(9		)	6,284		6,250		100			(20		)	6,330
Retreat of Shawnee	12,893		85			(23		)	12,955		13,090		164			(44		)	13,210
Conifer Crossing	—		—			—			—		27,074		—			—			27,074
Evergreen at Coursey Place	27,107		100			(96		)	27,111		27,548		123			(120		)	27,551
Pines of York	14,999		(299		)	(56		)	14,644		15,267		(363		)	(69		)	14,835
Estates at Johns Creek	49,596		—			(405		)	49,191		50,000		—			(526		)	49,474
Chisholm Place	11,587		—			(143		)	11,444		11,587		—			(163		)	11,424
Perimeter Circle	17,298		—			(143		)	17,155		17,657		—			(202		)	17,455
Perimeter 5550	13,651		—			(118		)	13,533		13,935		—			(167		)	13,768
Aston at Cinco Ranch	23,367		—			(268		)	23,099		23,772		—			(328		)	23,444
Sunset Ridge 1	19,699		259			(205		)	19,753		20,121		329			(261		)	20,189
Sunset Ridge 2	2,948		35			(26		)	2,957		3,002		45			(34		)	3,013
Calloway at Las Colinas	35,083		—			(306		)	34,777		35,740		—			(372		)	35,368
South Lamar Village	12,435		—			(131		)	12,304		12,682		—			(184		)	12,498
Heritage Pointe	26,280		—			(327		)	25,953		26,280		—			(370		)	25,910
Yorba Linda	67,500		—			(661		)	66,839		67,500		—			(860		)	66,640
Point Bonita Apartment Homes	26,907		1,966			(338		)	28,535		27,265		2,276			(391		)	29,150
Stone Ridge	5,227		—			(130		)	5,097		5,350		—			(153		)	5,197
The Westside Apartments	36,820		—			(448		)	36,372		23,000		—			(351		)	22,649
Tech Center Square	12,375		—			(196		)	12,179		12,500		—			(159		)	12,341
Williamsburg	53,995		—			(828		)	53,167		—		—			—			—
Retreat at Rocky Ridge	11,375		—			(261		)	11,114		—		—			—			—
	$	627,088	$	2,189		$	(7,125	)	$	622,152	$	595,384	$	2,674		$	(6,513	)	$	591,545

F-27

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

DECEMBER 31, 2016

The following table presents additional information about the Company's mortgage notes payable, net, at December 31, 2016 (in thousands, except percentages):

Collateral	Maturity Date	Margin over LIBOR	Annual Interest Rate			Average Monthly Debt Service		Average Monthly Escrow
Vista Apartment Homes	1/1/2022	2.29%	3.06	%	(1)(5)	$	67	$	16
Cannery Lofts	11/1/2023	2.54%	3.31	%	(1)(3)(6)	46		40
Deerfield	11/1/2020	—	4.66	%	(2)(5)	54		29
Trailpoint at the Woodlands	11/1/2023	2.41%	3.18	%	(1)(4)	74		67
Verona Apartment Homes	10/1/2026	2.36%	3.13	%	(1)(3)(6)	116		38
Skyview Apartment Homes	10/1/2026	2.36%	3.13	%	(1)(3)(6)	100		22
Maxwell Townhomes	1/1/2022	—	4.32	%	(2)(5)	71		63
Pinehurst	11/1/2023	2.42%	3.19	%	(1)(3)(6)	30		15
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
Estates at Johns Creek	7/1/2020	—	3.38	%	(2)(5)	221		102
Chisholm Place	6/1/2024	2.39%	3.16	%	(1)(3)	43		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	1.88%	2.65	%	(1)(3)	98		44
Yorba Linda	6/1/2020	1.75%	2.52	%	(1)(3)	180		—
Point Bonita Apartment Homes	10/1/2023	—	5.33	%	(2)(5)	152		38
Stone Ridge	12/1/2022	1.86%	2.63	%	(1)(5)	21		17
The Westside Apartments	9/1/2026	2.12%	2.89	%	(1)(3)(6)	137		68
Tech Center Square	6/1/2023	2.58%	3.35	%	(1)(5)(6)	55		25
Williamsburg	1/1/2024	2.38%	3.15	%	(1)(3)(7)	202		123
Retreat at Rocky Ridge	1/1/2024	2.46%	3.23	%	(1)(3)(7)	43		22

(1) Variable rate based on one-month LIBOR of 0.77167% (as of December 31, 2016) plus applicable 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) Refinanced during the year ended December 31, 2016.

(7) New debt placed during the year ended December 31, 2016.

Loans assumed as part of the Point Bonita Apartment Homes, South Lamar Village, Paladin, Sunset Ridge and Maxwell Townhomes acquisitions were recorded at fair value. The premium or discount is amortized over the remaining term of the loans and included in interest expense. For the years ended December 31, 2016, 2015, and 2014, interest expense was reduced by $485,000, $779,000, and $598,000 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. Each property's fair values assigned at acquisition are summarized in Note 7. 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.

F-28

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

DECEMBER 31, 2016

As of December 31, 2016 and 2015, the Company had $10.3 million and $10.0 million of restricted cash related to escrow deposits held by mortgage lenders for real estate taxes, insurance and capital reserves.

Annual principal payments on the mortgage notes payable for each of the next five years ending December 31 and thereafter are as follows (in thousands):

2017	$	12,978
2018	20,456
2019	50,908
2020	150,951
2021	99,121
Thereafter	292,674
	$	627,088

     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 of renovations to The Estates at Johns Creek by July 1, 2018, of which $7.0 million were completed at December 31, 2016. The Company is in the process of releasing the guaranty.

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 loan includes a net worth and liquidity covenant. The Company was in compliance with all covenants at December 31, 2016. The loan also includes an additional debt service coverage covenant that is only required to be met as of December 31, 2017 and for 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.  Draws under the Tech Center Loan were secured by the assets of Tech Center Square (formerly known as the Jefferson Point Apartments). The Company provided a repayment guarantee of all interest and scheduled monthly principal payments (excluding the final payment at maturity for the outstanding balance.) The Company paid certain closing costs in connection with the Tech Center Loan including loan fees totaling $75,000. 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% 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. Draws under the Westside Loan were secured by the assets of The Westside Apartments. The Company could draw the remaining $6.7 million when certain debt service coverage and loan to value criteria were met. Amounts repaid on the loan could not be reborrowed. The Company had provided a $6.5 million repayment guarantee. The Company paid certain closing costs in connection with the Westside Loan, including loan fees totaling $222,000. On September 1, 2016, the existing loan was repaid in full and was refinanced with a different lender.

In addition to Tech Center Square Apartments and The Westside Apartments, the Company refinanced the loans on Verona Apartment Homes, Skyview Apartment Homes, Pinehurst, and Cannery Lofts during the year ended December 31, 2016. As a result, $791,000 of loss on extinguishment of debt was included in interest expense on the consolidated statement of operations for the year ended December 31, 2016.

On December 22, 2016, the Company, through a wholly-owned subsidiary, entered into a loan ("Williamsburg Loan") with Berkadia Commercial Mortgage for $54.0 million. The Williamsburg Loan is secured by the assets of Williamsburg. The Williamsburg Loan matures on January 1, 2024 and is pre-payable after the first year of its term upon payment of an amount equal to 1% of the outstanding principal balance. The loan has an interest-only period of two years. The interest rate on the loan is one-month LIBOR plus 2.38%.

F-29

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

DECEMBER 31, 2016

On December 23, 2016, the Company, through a wholly-owned subsidiary, entered into a loan ("Rocky Ridge Loan") with CBRE Capital Markets for $11.4 million. The Rocky Ridge Loan is secured by the assets of Retreat at Rocky Ridge. The Rocky Ridge Loan matures on January 1, 2024 and is pre-payable after the first year of its term upon payment of an amount equal to 1% of the outstanding principal balance. The loan has an interest-only period of two years. The interest rate on the loan is one-month LIBOR plus 2.46%.

Deferred financing costs incurred to obtain financing are amortized over the term of the related debt. During the years ended December 31, 2016, 2015, and 2014, $1.8 million, $1.5 million, and $1.1 million, respectively, of amortization of deferred financing costs were included in interest expense. Accumulated amortization as of December 31, 2016 and 2015 was $2.6 million and $2.4 million, respectively.

Estimated amortization of the existing deferred financing costs for the next five years ending December 31, are as follows (in thousands):

2017	$	1,414
2018	1,353
2019	1,251
2020	972
2021	719
Thereafter	1,416
	$	7,125

NOTE 14 – CREDIT FACILITY

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

	Balance Outstanding at		Current Availability at		Balance Outstanding at						Weighted Average Interest Rate for the Year Ended
Lender	December 31, 2016				December 31, 2015		Maturity Date	Interest Rate Basis	Current Interest Rate (1)		December 31, 2016		December 31, 2015
Bank of America	$	—	$	13,280	$	21,894	5/23/2017	LIBOR plus 3%	3.77	%	3.44	%	3.26	%

(1) Variable rate based on one-month LIBOR of 0.77167% (as of December 31, 2016).

On December 2, 2011, the Company, through the Operating Partnership, entered into a secured revolving credit facility (the “Bank of America Credit Facility”) with Bank of America, N.A. (“Bank of America”).  On May 23, 2013, the Company amended the Bank of America Credit Facility to increase the amount it may borrow from $25 million to $50 million (the “Facility Amount”). Draws under the Bank of America Credit Facility are secured by one of the Company's properties with an aggregate value (lower of acquisition cost or appraised value) of $33.2 million and are guaranteed by the Company. The Company is able to draw up to 40% of the aggregate value of the property securing the facility.  The Company paid certain closing costs in connection with the Bank of America Credit Facility.

      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.  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. For the years ended December 31, 2016and 2015, the Company had weighted average borrowings of$6.8 millionand$13.8 millionunder the Bank of America Credit Facility.

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:

F-30

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

DECEMBER 31, 2016

• the Company must maintain a minimum tangible net worth equal to at least (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 went into effect during the year ended December 31, 2016. The Company was in compliance with all covenants at December 31, 2016.  

Deferred financing costs incurred to obtain financing are amortized over the term of the related debt. During the years ended December 31, 2016, 2015, and 2014, $321,000, $327,000, and $225,000, respectively, of amortization of deferred financing costs were included in interest expense. Accumulated amortization as of December 31, 2016 and 2015 was $857,000 and $763,000, respectively. Estimated amortization of the existing deferred financing costs is $68,500 for the 12-month period ending December 31, 2017 and none thereafter.

As of December 31, 2016, there are no principal payments required by the credit facility for the 12-month period ending December 31, 2017 or any period thereafter.

NOTE 15 - ACCUMULATED OTHER COMPREHENSIVE LOSS

The following table presents the changes in each component of the Company's accumulated other comprehensive loss for the years ended December 31, 2016, 2015, and 2014 (dollars in thousands):

Balance, January 1, 2014	$	20
Unrealized loss on designated derivatives	(286		)
Balance, December 31, 2014	(266		)
Unrealized loss on designated derivatives	(174		)
Balance, December 31, 2015	(440		)
Reclassification adjustment for realized loss on designated derivatives	105
Unrealized loss on designated derivatives	(10		)
Balance, December 31, 2016	$	(345	)

NOTE 16 – 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 September 8, 2016, RAI was acquired by C-III. As a result, C-III now controls the Advisor and all of the shares currently held by the Advisor.

Self-insurance funds held in escrow. Substantially all of the receivables from related parties represent insurance deposits held in escrow by Resource Real Estate ("RRE") for self insurance which, if unused, will be returned to the Company. The Company's properties participate in insurance pools with other properties directly and indirectly managed by RAI for both the property insurance and general liability. RRE holds the deposits in escrow to fund future insurance claims. 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 of each general liability incident. Catastrophic insurance would cover losses in excess of the property insurance and general liability pools up to $140.0 million and $51.0 million, respectively. 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. During the years ended December 31, 2016 and 2015, the Company paid $1.8 million and $1.6 million into the insurance pools.

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

F-31

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

DECEMBER 31, 2016

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, 2016. 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 of 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. 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.  This includes all organization and offering costs of up to 2.5% of gross offering proceeds.

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 the 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 information technology fees and operating expenses on behalf of the Company. 

Relationship with Other Related Parties

The Company has also made payments 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, but as of September 8, 2016 is no longer the Chairman of RAI. Until March 2006, an executive of RAI was the managing member of Ledgewood.  This executive

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RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

DECEMBER 31, 2016

remained of counsel to Ledgewood through June 2007, at which time he became an Executive Vice President of RAI, but as of September 8, 2016 is no longer an executive 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 fees earned / expenses paid and the amounts payable to such related parties are summarized in the following tables (in thousands):

	As of December 31,
	2016		2015
Receivables from related parties:
RAI and affiliates	$	1,375	$	1,421
Payables to related parties:
Advisor:
Operating expense reimbursements	$	1,285	$	286
Manager:
Property management fees	456		440
Operating expense reimbursements	314		459
	$	2,055	$	1,185

	Years Ended
	December 31,
	2016		2015		2014
Fees earned / expenses paid to related parties:
Advisor:
Acquisition fees (1)	$	1,452	$	5,179	$	8,591
Asset management fees (2)	10,484		10,240		7,262
Disposition fees (3)	686		1,140		422
Debt financing fees (4)	532		697		1,623
Overhead allocation (5)	5,621		3,733		2,227
Internal audit fees (5)	44		41		—
Manager :
Property management fees (2)	$	5,137	$	4,748	$	3,661
Construction management fees (6)	926		1,895		1,685
Information technology fees (5)	418		365		306
Operating expense reimbursements (7)	245		278		276
Debt servicing fees (2)	15		33		8
Other:
Ledgewood	$	121	$	169	$	143
Graphic Images	91		59		37

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

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

(3) Included in Net gains on dispositions of properties and joint venture interests on the consolidated statements of operations and comprehensive income (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 income (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 income (loss). Amount excludes the allocated payroll expenses described in Note 20- Operating Expenses.

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RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

DECEMBER 31, 2016

NOTE 17 – 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 December 31, 2016 and 2015, no shares of preferred stock were issued and outstanding.

Common Stock

As of December 31, 2016, the Company had issued an aggregate of 74,975,022 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	9,078,068		91,389
Shares issued in conjunction with the Advisor's initial investment, net of 4,500 share conversion	15,500		155
Total	74,975,022		$	726,203
Shares redeemed and retired	(2,968,433	)
Total shares outstanding as of December 31, 2016	72,006,589

(1)    Includes 276,056 shares held by the Advisor.

Convertible Stock

As of December 31, 2016 and 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

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RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

DECEMBER 31, 2016

(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 year ended December 31, 2016, the Company redeemed shares of its outstanding common stock as follows (in thousands, except per share data):

Period	Total Number of Shares Redeemed	Average Price Paid per Share
January 2016	150	$10.59
February 2016	—	—
March 2016	196	$10.59
April 2016	47	$10.83
May 2016	—	—
June 2016	1,069	$10.83
July 2016	—	—
August 2016	—	—
September 2016	520	$10.83
October 2016	—	—
November 2016	—	—
December 2016	270	$10.83
	2,252

All redemption requests tendered were honored during the year endedDecember 31, 2016.

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.

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.

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RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

DECEMBER 31, 2016

Distributions

For the year endedDecember 31, 2016, the Company paid aggregate distributions of $43.0 million, including $14.5 million of distributions paid in cash and $28.5 million of distributions reinvested in shares of common stock through the Company's 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		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
July 28, 2016	0.05		July 29, 2016	2,359		1,215		3,574
August 30, 2016	0.05		August 31, 2016	2,363		1,222		3,585
September 29, 2016	0.05		September 30, 2016	2,351		1,220		3,571
October 28, 2016	0.05		October 31, 2016	2,348		1,234		3,582
November 29, 2016	0.05		November 30, 2016	2,343		1,249		3,592
December 29, 2016	0.05		December 30, 2016	2,326		1,263		3,589
	$	0.60		$	28,497	$	14,508	$	43,005

Since its formation, the Company has declared a total of seven quarterly stock distributions of 0.015 shares each, two quarterly stock distributions of 0.0075 shares each, one quarterly stock distribution of 0.00585 shares each, and two quarterly stock distributions of 0.005 shares each of its common stock outstanding.

NOTE 18 – 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.

Derivatives (interest rate caps), which are reported at fair value in the consolidated balance sheets, 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)

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RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

DECEMBER 31, 2016

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 as follows (in thousands):

	Level 1		Level 2		Level 3		Total
December 31, 2016
Assets:
Interest rate caps	$	—	$	242	$	—	$	242
	$	—	$	242	$	—	$	242
December 31, 2015
Assets:
Interest rate caps	$	—	$	32	$	—	$	32
	$	—	$	32	$	—	$	32

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

	December 31, 2016						December 31, 2015
	Carrying Amount			Fair Value			Carrying Amount			Fair Value
Loan held for investment, net	$	769		$	1,104		$	757		$	1,151
Preferred equity investment	—			—			3,886			3,908
Mortgage notes payable- outstanding borrowings	(627,088		)	(620,578		)	(595,384		)	(573,693		)
Mortgage notes payable- included in other liabilities associated with rental properties held for sale	—			—			(16,443		)	(16,597		)
Credit facility	—			—			(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 a discounted cash flows model and 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 amount because the variable interest rate is considered a market rate (Level 3).

NOTE 19 – 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 service to protect the lender.

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RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

DECEMBER 31, 2016

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 13 interest rate caps that were designated as cash flow hedges. 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 years end December 31, 2016 and 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 year ended December 31, 2016, the Company had a loss of $104,941 due to hedge ineffectiveness related to the sales of Nesbit Palisades and Ivy at Clear Creek. During the year ended December 31, 2015, the Company recorded no hedge ineffectiveness in earnings.

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. During the next 12 months, the Company estimates that an additional $147,928will be reclassified as an increase to interest expense.

As of December 31, 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		Maturity Dates
Interest Rate Caps	13	$	270,475	January 1, 2018 to October 1, 2020

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

The table below presents the fair value of the Company’s derivative financial instruments on the consolidated balance sheets as of December 31, 2016 and 2015 (in thousands):

Asset Derivatives						Liability Derivatives
December 31, 2016			December 31, 2015			December 31, 2016			December 31, 2015
Balance Sheet	Fair Value		Balance Sheet	Fair Value		Balance Sheet	Fair Value		Balance Sheet	Fair Value
Prepaid expenses and other assets	$	242	Prepaid expenses and other assets	$	32	—	$	—	—	$	—

NOTE 20 – OPERATING EXPENSES

Under its charter, the Company must limit its total operating expenses to the greater 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 December 31, 2016 were in compliance with the charter imposed limitation.

Allocated payroll expense associated with a portion of the compensation paid by the Advisor or its affiliates to the Company’s executive officers was included in general and administrative in the consolidated statements of operations and comprehensive income (loss) and was reimbursed to the Advisor during the years ended December 31, 2016, 2015 and 2014.

Allocated payroll expense from the Manager is included in rental operating expenses in the consolidated statements of operations and comprehensive income (loss). Allocated payroll for the years ended December 31, 2016, 2015, and 2014 was $2.0 million, $1.9 million, and $1.6 million, respectively.

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RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

DECEMBER 31, 2016

NOTE 21 – INSURANCE PROCEEDS IN EXCESS OF COST BASIS

For the year ended December 31, 2016, there were $985,000 of insurance proceeds in excess of cost basis included on the consolidated statements of operations and comprehensive income (loss). The Company received $735,000 of proceeds from insurers, net of expenses, due to incidents at Deerfield, The Westside Apartments, and Chisholm Place in 2016 and $250,000 of proceeds from insurers, net of expenses, due to incidents at Verona Apartment Homes, Skyview Apartment Homes, Meridian Pointe, and Stone Ridge in 2015.

For the year ended December 31, 2015, there were $407,000 of insurance proceeds in excess of cost basis included on the consolidated statements of operations and comprehensive income (loss). The Company received $247,000 of proceeds due to prior owners from insurers, net of expenses, due to an incident at Stone Ridge in 2013 and $160,000 of proceeds from insurers, net of expenses, due to an incident at Chisholm Place in 2014.

For the year ended December 31, 2014, there were $425,000 of insurance proceeds in excess of cost basis included on the consolidated statements of operations and comprehensive income (loss). The Company received $369,000 of proceeds due to prior owners from insurers, net of expenses, due to an incident at Stone Ridge in 2013 and $56,000 of proceeds from insurers, net of expenses, due to an incident at Mosaic in 2013.     

NOTE 22 – QUARTERLY FINANCIAL DATA (UNAUDITED)

The following tables present the Company's operating results by quarter (in thousands, except share data):

Quarterly Results for 2016	March 31			June 30			September 30		December 31
	(unaudited)			(unaudited)			(unaudited)		(unaudited)
Revenues	$	30,556		$	30,721		$	28,575	$	28,515
Net income (loss)	8,480			2,427			9,637		(10,173		)
Less: net (income) loss attributable to noncontrolling interests	(6,281		)	(25		)	—		—
Net income (loss) attributable to common stockholders	2,199			2,402			9,637		(10,173		)
Net income (loss) per common share	$	0.03		$	0.03		$	0.14	$	(0.14	)

Quarterly Results for 2015	March 31			June 30			September 30			December 31
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Revenues	$	27,734		$	28,412		$	30,845		$	31,334
Net income (loss)	17,039			(12,476		)	(10,662		)	(10,834		)
Less: net (income) loss attributable to noncontrolling interests	(11		)	192			43			(186		)
Net income (loss) attributable to common stockholders	17,028			(12,284		)	(10,619		)	(11,020		)
Net income (loss) per common share	$	0.25		$	(0.18	)	$	(0.15	)	$	(0.16	)

NOTE 23 – SUBSEQUENT EVENTS

On January 20, 2017, the Company obtained $47.0 million in financing, secured by Providence in the Park.

On January 27, 2017, 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: January 30, 2017, February 27, 2017, and March 30, 2017. Such distributions were or are to be paid on January 31, February 28, and March 31, 2017.

On March 20, 2017, the Company entered into an agreement to sell Mosaic, located in Oklahoma City, Oklahoma for $6.1 million with an expected closing in May 2017. The Company expects to record a gain on sale during the three months ended June 30, 2017.

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RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

DECEMBER 31, 2016

On March 27, 2017, the Company's board of directors approved $7.5 million of redemption requests from investors.

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.

F-40

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC. SCHEDULE III Real Estate and Accumulated Depreciation December 31, 2016 (in thousands)
Column A	Column B		Column C		Column D			Column E		Column F			Column G	Column H	Column I
Description	Encumbrances		Initial cost to Company		Cost capitalized subsequent to acquisition			Gross Amount at which carried at close of period		Accumulated Depreciation			Date of Construction	Date Acquired	Life on which depreciation in latest income is computed
			Buildings and Land Improvements		Improvements Carrying Costs			Buildings and Land Improvements Total
Real estate owned:
Residential	$	15,225	$	11,076	$	4,388		$	15,464	$	(3,952	)	1961	6/17/2011	3 - 27.5 years
Philadelphia, PA
Residential	13,100		8,273		1,567			9,840		(2,126		)	1838	5/13/2011	3 - 27.5 years
Dayton, OH
Residential	53,995		39,341		12,216			51,557		(13,365		)	1966	6/20/2012	3 - 27.5 years
Cincinnati, OH
Residential	—		1,961		4,124			6,085		(1,625		)	1974	12/6/2012	3 - 27.5 years
Oklahoma City, OK
Residential	10,359		9,620		5,185			14,805		(2,492		)	1993	1/22/2013	3 - 27.5 years
Hermantown, MN
Residential	11,375		8,064		3,482			11,546		(2,103		)	1986	4/18/2013	3 - 27.5 years
Hoover, AL
Residential	18,690		26,496		4,087			30,583		(4,963		)	1981	6/24/2013	3 - 27.5 years
Houston, TX
Residential	36,820		31,001		5,044			36,045		(5,082		)	1984	7/25/2013	3 - 27.5 years
Plano, TX
Residential	12,375		17,583		2,562			20,145		(2,961		)	1985	9/9/2013	3 - 27.5 years
Newport News, VA
Residential	32,970		23,321		9,769			33,090		(3,986		)	1985	9/30/2013	3 - 27.5 years
Littleton, CO
Residential	28,400		29,509		(2,122		)	27,387		(3,547		)	1985	9/30/2013	3 - 27.5 years
Westminster, CO
Residential	13,602		21,831		5,809			27,640		(4,353		)	1982	12/16/2013	3 - 27.5 years
San Antonio, TX
Residential (2)	—		32,142		4,218			36,360		(4,369		)	1988	12/20/2013	3 - 27.5 years
Burnsville, MN
Residential (1)	5,227		5,912		2,897			8,809		(1,562		)	1974	1/28/2014	3 - 27.5 years
Columbia, SC
Residential	49,596		69,111		7,796			76,907		(8,495		)	1999	3/28/2014	3 - 27.5 years
Alpharetta, GA

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC. SCHEDULE III Real Estate and Accumulated Depreciation December 31, 2016 (in thousands) (Continued)
Column A	Column B	Column C	Column D	Column E	Column F		Column G	Column H	Column I
Description	Encumbrances	Initial cost to Company	Cost capitalized subsequent to acquisition	Gross Amount at which carried at close of period	Accumulated Depreciation		Date of Construction	Date Acquired	Life on which depreciation in latest income is computed
		Buildings and Land Improvements	Improvements Carrying Costs	Buildings and Land Improvements Total
Residential	27,107	42,001	817	42,818	(5,149	)	2003	5/5/2014	3 - 27.5 years
Baton Rouge, LA
Residential	11,587	14,562	721	15,283	(1,640	)	1981	5/5/2014	3 - 27.5 years
Plano, TX
Residential	17,298	28,911	2,564	31,475	(3,098	)	1995	5/19/2014	3 - 27.5 years
Atlanta, GA
Residential	13,651	21,796	2,603	24,399	(2,392	)	1995	5/19/2014	3 - 27.5 years
Atlanta, GA
Residential	23,367	31,385	2,929	34,314	(3,395	)	2000	6/26/2014	3 - 27.5 years
Katy, TX
Residential	12,893	18,250	1,128	19,378	(2,671	)	1984	7/1/2014	3 - 27.5 years
Shawnee, KS
Residential	6,250	11,898	527	12,425	(1,751	)	1985	7/1/2014	3 - 27.5 years
Lee's Summit, MO
Residential	7,350	9,691	751	10,442	(1,488	)	1983	7/1/2014	3 - 27.5 years
Kansas City, MO
Residential	22,647	34,554	5,238	39,792	(3,148	)	1949	9/4/2014	3 - 27.5 years
San Antonio, TX
Residential	35,083	47,075	5,289	52,364	(4,622	)	1984	9/29/2014	3 - 27.5 years
Irving, TX
Residential	14,999	21,204	396	21,600	(2,326	)	1974	11/25/2014	3 - 27.5 years
Yorktown, VA
Residential	12,435	23,370	4,230	27,600	(1,859	)	1981	2/26/2015	3 - 27.5 years
Austin, TX
Residential	26,280	35,070	4,061	39,131	(2,389	)	1986	3/19/2015	3 - 27.5 years
Gilbert, AZ
Residential	67,500	116,036	3,787	119,823	(4,901	)	1986	6/1/2015	3 - 27.5 years
Orange County, CA
Residential	26,907	50,365	2,066	52,431	(2,000	)	1988	6/16/2015	3 - 27.5 years
Chula Vista, CA

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC. SCHEDULE III Real Estate and Accumulated Depreciation December 31, 2016 (in thousands) (Continued)
Column A	Column B		Column C		Column D			Column E		Column F			Column G	Column H	Column I
Description	Encumbrances		Initial cost to Company		Cost capitalized subsequent to acquisition			Gross Amount at which carried at close of period		Accumulated Depreciation			Date of Construction	Date Acquired	Life on which depreciation in latest income is computed
			Buildings and Land Improvements		Improvements Carrying Costs			Buildings and Land Improvements Total
Residential	—		61,490		(764		)	60,726		$	—		1997	12/22/2016	3 - 27.5 years
Arlington, TX
	$	627,088	$	902,899	$	107,365		$	1,010,264	$	(107,810	)

	Years Ended
	December 31,
	2016			2015			2014
Investments in Rental Properties:
Balance, beginning of the period	$	1,063,211		$	857,151		$	406,149
Acquisitions	61,490			224,841			436,626
Improvements, etc.	28,024			43,018			37,384
Dispositions during the period	(142,461		)	(61,799		)	(23,008		)
Balance, close of the period (3)	$	1,010,264		$	1,063,211		$	857,151
Accumulated depreciation:
Balance, beginning of the period	$	(77,363	)	$	(45,133	)	$	(15,776	)
Sales	12,737			9,031			2,962
Disposals	819			652			478
Depreciation	(44,003		)	(41,913		)	(32,797		)
Balance, close of the period (3)	$	(107,810	)	$	(77,363	)	$	(45,133	)

`

(1)    Acquired an interest in the property on 1/28/2014 with the Paladin merger.

(2)    Rental property held as collateral for the Company's secured credit facility.

(3)    Includes properties held for sale at 12/31/2015

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.

SCHEDULE IV

Mortgage Loans on Real Estate

December 31, 2016

(dollars in thousands)

Column A	Column B	Column C	Column D	Column E	Column F		Column G		Column H
Description	Interest rate	Final maturity date	Periodic payment term	Prior liens	Face amount of mortgages		Carrying amount of mortgages		Principal amount of loans subject to delinquent principal or interest
Residential Columbia City, IN	Fixed interest rate of 7.5%	10/28/2021	N/A	N/A	$	1,058	$	769	$	—
					$	1,058	$	769	$	—

	Year Ended
	December 31, 2016
Balance, beginning of the period	$	757
Interest accretion	33
Principal reductions	(21		)
Balance, end of the period	$	769

EX-10.4

Exhibit 10.4

RENEWAL AGREEMENT

THIS RENEWAL AGREEMENT, dated as of September 15, 2016 (the “Agreement”), is entered into between Resource Real Estate Opportunity REIT, Inc., a Maryland corporation (the “Company”), and Resource Real Estate Opportunity Advisor, LLC a Delaware limited liability company (the “Advisor”).

WHEREAS, the Company and the Advisor were initially parties to the Advisory Agreement dated September 14, 2009, which agreement had an initial one-year term, subject to an unlimited number of successive one-year renewals;

WHEREAS, on January 12, 2010, June 16, 2010 and January 11, 2011 the parties entered into the First, Second and Third Amended and Restated Advisory Agreements, respectively;

WHEREAS, the Company and the Advisor are currently parties to the Third Amended and Restated Advisory Agreement, dated as of January 11, 2011, as amended by the Amendment to the Third Amended and Restated Advisory Agreement, dated as of March 24, 2015 (collectively, the “ThirdAdvisory Agreement”);

WHEREAS, since September 2009, the Company and the Advisor have annually agreed to renew the advisory agreement in effect for an additional one-year term, first through September 14, 2010, September 14, 2011, September 14, 2012, September 14, 2013, September 14, 2014, September 14, 2015 and then through September 14, 2016;

WHEREAS, the Company desires to continue to avail itself of the knowledge, experience, sources of information, advice, assistance and certain facilities available to the Advisor and to have the Advisor undertake the duties and responsibilities set forth in the Third Advisory Agreement, on behalf of, and subject to the supervision of, the board of directors of the Company (the “Board”); and

WHEREAS, the Advisor is willing to continue to undertake to render such services, subject to the supervision of the Board.

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements contained herein, the parties hereto agree as follows:

1. Term. In accordance with the provisions of Section 13.01 of the Third Advisory Agreement, the term of the Third Advisory Agreement is hereby renewed for an additional one-year term, and notwithstanding the language in Section 13.01 of the Third Advisory Agreement is acknowledged and agreed by the Parties to be a one-year term commencing September 15, 2016 and ending September 14, 2017.

2. Ratification; Effect on Third Advisory Agreement. The Third Advisory Agreement shall remain in full force and effect and is hereby confirmed in all respects. On and after the date hereof, each reference in the Third Advisory Agreement to “this Agreement,” “herein,” “hereof,” or words of similar import will mean and be a reference to the Third Advisory Agreement as renewed hereby.

3. Modification. This Agreement shall not be changed, modified, terminated, or discharged, in whole or in part, except by an instrument in writing signed by both parties hereto, or their respective successors or assignees.

4. Construction; Consent to Jurisdiction.This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to principles of conflicts of laws. Any suit involving any dispute or matter arising under this Agreement may only be brought in the federal or state courts located in the State of Delaware. Each of the parties hereto consents to the exercise of personal jurisdiction by such courts with respect to all such proceedings. EACH OF THE PARTIES HERETO HEREBY KNOWINGLY AND VOLUNTARILY WAIVES ANY AND ALL RIGHTS TO A JURY TRIAL, TO THE FULLEST EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST, IN ANY PROCEEDING, CLAIM, COUNTER-CLAIM OR OTHER ACTION INVOLVING ANY DISPUTE OR MATTER ARISING UNDER THIS AGREEMENT.

5. Execution in Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original as against any party whose signature appears thereon, and all of which shall together constitute one and the same instrument. This Agreement shall become binding when the counterparts hereof, taken together, bear the signatures of all of the parties reflected hereon as the signatories.

[signature page follows]

IN WITNESS WHEREOF, the parties hereto have executed this Renewal Agreement as of the date and year first above written.

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC.
By:	/s/ Alan F. Feldman
	Alan F. Feldman, Chief Executive Officer
RESOURCE REAL ESTATE OPPORTUNITY ADVISOR, LLC
By:	/s/ Kevin M. Finkel
	Kevin M. Finkel, President

EX-21.1

Exhibit 21.1

Subsidiaries of the Registrant

Subsidiaries

RRE Opportunity Holdings, LLC

Resource Real Estate Opportunity OP, LP

RRE Westhollow Holdings, LLC

RRE Iroquois, LP

RRE Iroquois Holdings, LLC

RRE Campus Club Holdings, LLC

RRE Cannery Holdings, LLC

RRE Williamsburg Holdings, LLC

WPL Holdings, LLC

RRE Park Forest Holdings, LLC

RRE Deerfield Holdings, LLC

RRE Kenwick & Canterbury Holdings, LLC

RRE Autumn Wood Holdings, LLC

RRE Village Square Holdings, LLC

RRE Nob Hill Holdings, LLC

RRE Brentdale Holdings, LLC

RRE Jefferson Point Holdings, LLC

RRE Centennial Holdings, LLC

RRE Pinnacle Holdings, LLC

RRE Jasmine Holdings, LLC

RRE River Oaks Holdings, LLC

RRE Nicollet Ridge Holdings, LLC

RRE Charlemagne Holdings, LLC

RRE Addison Place, LLC

PRIP Coursey, LLC

PRIP 3700, LLC

PRIP 10637, LLC

PRIP 500, LLC

PRIP 1102, LLC

PRIP 11128, LLC

PRIP 3383, LLC

PRIP Stone Ridge, LLC

PRIP Pines, LLC

RRE Chisholm Place Holdings LLC

RRE Berkeley Run Holdings, LLC

RRE Berkeley Trace Holdings LLC

RRE Merrywood LLC

RRE Sunset Ridge Holdings, LLC

RRE Parkridge Place Holdings, LLC

RRE Spring Hill Holdings, LLC

RRE Woodmoor Holdings, LLC

RRE Gilbert Holdings, LLC

RRE Bonita Glen Holdings, LLC

RRE Yorba Linda Holdings, LLC

RRE Providence Holdings, LLC

The subsidiaries listed above are all organized in the State of Delaware.

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have issued our report dated March 30, 2017, with respect to the consolidated financial statements and schedules included in the Annual Report of Resource Real Estate Opportunity REIT, Inc. on Form 10-K for the year ended December 31, 2016. We consent to the incorporation by reference of said report in the registration statement of Resource Real Estate Opportunity REIT, Inc. on Form S-3 (File No. 333-211721).

/s/ GRANT THORNTON LLP

Philadelphia, Pennsylvania

March 30, 2017

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 annual report on Form 10-K for the year ended December 31, 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.
March 30, 2017	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 annual report on Form 10-K for the year ended December 31, 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.
March 30, 2017	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 Annual Report of Resource Real Estate Opportunity REIT, Inc. (“the Company”) on Form 10-K for the year ended December 31, 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.
March 30, 2017	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 Annual Report of Resource Real Estate Opportunity REIT, Inc. (“the Company”) on Form 10-K for the year ended December 31, 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.
March 30, 2017	By:	/s/ Steven R. Saltzman
		Steven R. Saltzman
		Chief Financial Officer
		(Principal Financial Officer)

EX-99.2

CONSENT OF INDEPENDENT VALUATION EXPERT

We hereby consent to the reference to our name and description of our role in the valuation process of Resource Real Estate Opportunity REIT, Inc. ("the Company") being included or incorporated by reference in the Company's registration statement on Form S-3 (File No. 333-211721) and the related prospectus, included therein, by being filed on an Annual Report on Form 10-K, to be filed on the date hereof. In giving this consent, we do not admit that we are within the category of persons whose consent is required by Section 7 of the Securities Act of 1933, as amended.

/s/ Duff & Phelps, LLC

Duff & Phelps, LLC

March 30, 2017

XML

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2016	Mar. 21, 2017	Jun. 30, 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 Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Document Type	10-K
Document Period End Date	Dec. 31, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	FY
Amendment Flag	false
Entity Common Stock, Shares Outstanding		72,434,577
Public Float			$ 0

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Investments:
Rental properties, net	$ 902,454	$ 916,498
Other Investments	769	4,643
Identified intangible assets, net	1,855	374
Assets held for sale - rental properties, net	0	69,350
Total investments	905,078	990,865
Cash	114,842	78,442
Restricted cash	10,277	9,987
Due from related parties	1,375	1,421
Tenant receivables, net	89	211
Deposits	262	230
Prepaid expenses and other assets	2,351	2,227
Goodwill	711	1,231
Other assets associated with rental properties held for sale	0	81
Total assets	1,034,985	1,084,695
Liabilities:
Mortgage notes payable, net	622,152	591,545
Credit facility	0	21,894
Accounts payable	1,125	1,583
Accrued expenses and other liabilities	6,738	7,932
Accrued real estate taxes	7,262	6,856
Due to related parties	2,055	1,185
Tenant prepayments	1,069	1,212
Security deposits	2,565	2,626
Other liabilities associated with rental properties held for sale	0	16,763
Total liabilities	642,966	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; 74,975,022 and 72,333,652 shares issued, respectively; and 72,006,589 and 71,617,117 shares outstanding, respectively)	720	716
Convertible stock (“promote shares”; par value $.01; 50,000 shares authorized, issued and outstanding)	1	1
Additional paid-in capital	642,523	638,335
Accumulated other comprehensive loss	(345)	(440)
Accumulated deficit	(252,306)	(213,366)
Total stockholders’ equity	390,593	425,246
Noncontrolling interests	1,426	7,853
Total equity	392,019	433,099
Total liabilities and equity	$ 1,034,985	$ 1,084,695

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 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)	74,975,022	72,333,652
Common stock, outstanding (in shares)	72,006,589	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 INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Revenues:
Rental income	$ 117,745	$ 117,687	$ 99,910
Interest and dividend income	622	638	359
Total revenues	118,367	118,325	100,269
Expenses:
Rental operating - expenses	27,608	34,167	34,759
Rental operating - payroll	14,790	16,769	14,784
Rental operating - real estate taxes	12,668	13,154	9,611
Subtotal - Rental operating expenses	55,066	64,090	59,154
Acquisition costs	1,582	5,811	9,833
Management fees	15,724	15,453	11,544
General and administrative	13,083	12,776	10,855
Loss on disposal of assets	1,576	3,093	5,308
Provision for loan loss	0	130	0
Depreciation and amortization expense	44,231	48,273	47,771
Total expenses	131,262	149,626	144,465
Loss before other income (expense)	(12,895)	(31,301)	(44,196)
Other income (expense):
Net gains on dispositions of properties and joint venture interests	45,057	36,041	10,484
Interest expense	(22,776)	(22,080)	(14,911)
Insurance proceeds in excess of cost basis	985	407	425
Total other income (expense)	23,266	14,368	(4,002)
Net income (loss)	10,371	(16,933)	(48,198)
Net (income) loss attributable to noncontrolling interests	(6,306)	38	2,021
Net income (loss) attributable to common stockholders	4,065	(16,895)	(46,177)
Net Loss	10,371	(16,933)	(48,198)
Other comprehensive income (loss):
Reclassification adjustment for realized loss on derivative due to sale	105	0	0
Designated derivatives, fair value adjustments	(10)	(174)	(286)
Other comprehensive loss	95	(174)	(286)
Comprehensive income (loss)	10,466	(17,107)	(48,484)
Comprehensive (income) loss attributable to noncontrolling interests	(6,306)	38	2,021
Total comprehensive income (loss) attributable to stockholders	$ 4,160	$ (17,069)	$ (46,463)
Weighted average common shares outstanding (in shares)	71,787	70,397	68,008
Basic and diluted income (loss) per common share:
Net loss per common share (in dollars per share)	$ 0.06	$ (0.24)	$ (0.68)

XML

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Total Stockholders’ Equity	Common Stock	Convertible Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit	Noncontrolling interests
Beginning balance at Dec. 31, 2013	$ 517,047	$ 517,047	$ 668	$ 1	$ 590,591	$ 20	$ (74,233)	$ 0
Beginning balance (in shares) at Dec. 31, 2013			66,667,000	50,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issued through distribution reinvestment plan	22,898	22,898	$ 24		22,874
Common stock issued through distribution reinvestment plan (in shares)			2,410,000
Distributions on common stock			$ 3		3,330		(3,333)
Distributions on common stock (in shares)			333,000
Distributions declared	(30,635)	(30,635)					(30,635)
Common stock redemptions	(1,388)	(1,388)	$ (2)		(1,445)		59
Common stock redemptions (in shares)			(156,000)
Other comprehensive income (loss)	(286)	(286)				(286)
Noncontrolling interests retained in the Paladin merger	18,901							18,901
Distributions to noncontrolling interests	(119)							(119)
Acquisitions of noncontrolling interests	(9,866)	(1,326)			(1,326)			(8,540)
Net Loss	(48,198)	(46,177)					(46,177)	(2,021)
Ending balance at Dec. 31, 2014	468,354	460,133	$ 693	$ 1	614,024	(266)	(154,319)	8,221
Ending balance (in shares) at Dec. 31, 2014			69,254,000	50,000
Beginning balance at Dec. 31, 2013	517,047	517,047	$ 668	$ 1	590,591	20	(74,233)	0
Beginning balance (in shares) at Dec. 31, 2013			66,667,000	50,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issued through distribution reinvestment plan	$ 80,400
Common stock issued through distribution reinvestment plan (in shares)	7,900,000
Ending balance at Dec. 31, 2016	$ 392,019	390,593	$ 720	$ 1	642,523	(345)	(252,306)	1,426
Ending balance (in shares) at Dec. 31, 2016	72,006,589		72,007,000	50,000
Beginning balance at Dec. 31, 2014	$ 468,354	460,133	$ 693	$ 1	614,024	(266)	(154,319)	8,221
Beginning balance (in shares) at Dec. 31, 2014			69,254,000	50,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issued through distribution reinvestment plan	28,959	28,959	$ 28		28,931
Common stock issued through distribution reinvestment plan (in shares)			2,865,000
Distributions declared	(42,216)	(42,216)					(42,216)
Common stock redemptions	(5,042)	(5,042)	$ (5)		(5,101)		64
Common stock redemptions (in shares)			(502,000)
Other comprehensive income (loss)	(174)	(174)				(174)
Contributions from noncontrolling interests	151							151
Acquisitions of noncontrolling interests	0	481			481			(481)
Net Loss	(16,933)	(16,895)					(16,895)	(38)
Ending balance at Dec. 31, 2015	$ 433,099	425,246	$ 716	$ 1	638,335	(440)	(213,366)	7,853
Ending 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	$ 28,497	28,497	$ 26		28,471
Common stock issued through distribution reinvestment plan (in shares)			2,642,000
Distributions declared	(43,005)	(43,005)					(43,005)
Common stock redemptions	$ (24,305)	(24,305)	$ (22)		(24,283)
Common stock redemptions (in shares)	(2,252,000)		(2,252,000)
Other comprehensive income (loss)	$ 95	95				95
Deconsolidation of subsidiaries	(3,613)							(3,613)
Distributions to noncontrolling interests	(9,120)							(9,120)
Net Loss	10,371	4,065					4,065	6,306
Ending balance at Dec. 31, 2016	$ 392,019	$ 390,593	$ 720	$ 1	$ 642,523	$ (345)	$ (252,306)	$ 1,426
Ending balance (in shares) at Dec. 31, 2016	72,006,589		72,007,000	50,000

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Cash flows from operating activities:
Net income (loss)	$ 10,371	$ (16,933)	$ (48,198)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Loss on disposal of assets	1,576	3,093	5,308
Casualty (gains) losses	(680)	782	0
Provision for loan loss	0	130	0
Loss on extinguishment of debt	791	0	0
Net gains on disposition of properties and joint venture interests	(45,057)	(36,041)	(10,484)
Depreciation and amortization	44,231	48,273	47,771
Amortization of deferred financing costs	2,120	1,839	1,365
Amortization of debt premium (discount)	(485)	(779)	(598)
Realized loss on change in fair value of interest rate cap	105	0	0
Accretion of discount and direct loan fees and costs	(39)	(39)	(28)
Changes in operating assets and liabilities, net of acquisitions:
Restricted cash	(1,428)	(1,942)	(2,332)
Tenant receivables, net	55	313	161
Deposits	(65)	3	(775)
Prepaid expenses and other assets	489	886	363
Due to/from related parties, net	869	(722)	(1,236)
Accounts payable and accrued expenses	(1,720)	583	5,289
Tenant prepayments	(102)	(40)	554
Security deposits	99	91	(127)
Net cash provided by (used in) operating activities from continuing operations	11,130	(503)	(2,967)
Cash flows from investing activities:
Proceeds from disposal of properties and joint venture interests, net of closing costs	80,173	60,258	27,082
Property acquisitions	(63,126)	(96,953)	(229,041)
Ownership acquisitions, net of cash received	0	0	(58,720)
Insurance proceeds received for casualty losses	3,171	794	0
Acquisition of preferred equity interest	(408)	(408)	(3,460)
Resolution of preferred equity interest	4,300	0	0
Capital expenditures	(28,024)	(43,018)	(37,384)
Restricted cash	1,572	(766)	1,981
Principal payments received on loans held for investment	21	601	227
Net cash used in investing activities of continuing operations	(2,321)	(79,492)	(299,315)
Cash flows from financing activities:
Redemptions of common stock	(24,305)	(5,042)	(1,389)
Payment of deferred financing costs	(3,200)	(402)	(4,155)
Borrowings on mortgages	194,870	31,473	182,213
Principal repayments on mortgages	(93,990)	(6,150)	(3,027)
Borrowings on credit facility	12,500	33,918	85,520
Repayments on credit facility	(34,394)	(22,288)	(76,975)
Purchase of interest rate caps	(262)	(95)	(110)
Distributions paid on common stock	(14,508)	(13,257)	(9,958)
Contributions of noncontrolling interests	0	151	0
Distributions to noncontrolling interests	(9,120)	0	(119)
Net cash provided by financing activities of continuing operations	27,591	18,308	172,000
Net cash provided by (used in) continuing operations	36,400	(61,687)	(130,282)
Cash flows from discontinued operations:
Net cash provided by operating activities			88
Net cash provided by discontinued operations			88
Net increase (decrease) in cash	36,400	(61,687)	(130,194)
Cash at beginning of year	78,442	140,129	270,323
Cash at end of year	$ 114,842	$ 78,442	$ 140,129

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NATURE OF BUSINESS AND OPERATIONS

12 Months Ended

Dec. 31, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

NATURE OF BUSINESS AND OPERATIONS

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”) has been engaged to manage the day-to-day operations of the Company. 

On September 8, 2016, RAI was acquired by C-III Capital Partners LLC ("C-III"), a leading commercial real estate services company engaged in a broad range of activities. C-III controls our Advisor and Resource Real Estate Opportunity Manager, LLC (the "Manager"), the Company's property manager; C-III also controls all of the shares of common stock held by RAI.

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, 2016, 2015 and 2014, the Company issued a total of 7.9 million, in aggregate, additional shares for $80.4 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.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2016

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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 accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). 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	N/A
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 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, 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 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")	Point Bonita Apartment Homes	295	Chula Vista, CA
RRE Yorba Linda Holdings, LLC ("Yorba Linda")	Yorba Linda	400	Yorba Linda, CA
RRE Providence Holdings, LLC ("Providence in the Park")	Providence in the Park	524	Arlington, TX
		9,022
Subsidiaries related to disposed investments:
RRE Crestwood Holdings, LLC (“Crestwood”)	(c)(g)	N/A	N/A
PRIP 5060/6310, LLC ("Governor Park")	(c)(g)	N/A	N/A
RRE Campus Club Holdings, LLC (“Campus Club”)	(c)	N/A	N/A
PRIP 6700, LLC ("Hilltop Village")	(c)(g)	N/A	N/A
RRE Westhollow Holdings, LLC (“Westhollow”)	(c)	N/A	N/A
RRE Flagstone Holdings, LLC ("Flagstone")	(d)(g)	N/A	N/A
RRE 107th Avenue Holdings, LLC (“107th Avenue”)	(d)(g)	N/A	N/A
RRE Bristol Holdings, LLC (“Bristol”)	(d)(g)	N/A	N/A
RRE Skyview Holdings, LLC ("Skyview")	(d)(g)	N/A	N/A
RRE Kenwick Canterbury Holdings, LLC ("Kenwick & Canterbury")	(d)	N/A	N/A
RRE Foxwood Holdings, LLC ("Foxwood")	(d)(g)	N/A	N/A
PRIP 3383, LLC ("Conifer Place")	(b)(e)	N/A	N/A
PRIP 3700, LLC ("Champion Farms")	(b)(e)	N/A	N/A
RRE Armand Place Holdings, LLC ("Armand")	(e)(g)	N/A	N/A
RRE Spring Hill Holdings, LLC ("Spring Hill")	(f)	N/A	N/A
RRE Nob Hill Holdings, LLC ("Nob Hill")	(e)	N/A	N/A
PRIP 10637, LLC ("Fieldstone")	(b)(e)	N/A	N/A
RRE Jasmine Holdings, LLC ("Jasmine")	(e)	N/A	N/A

N/A - Not Applicable

(a) Subsidiary transferred its interest in a portion of the Williamsburg parking lot to RRE Williamsburg Holdings, LLC in 2016.

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

(c) Underlying investment sold prior to 2015.

(d) Underlying investment sold in 2015.

(e) Underlying investment sold in 2016.

(f) Underlying investment resolved in 2016.

(g) Subsidiary was dissolved prior to December 31, 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 9).    

(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 9).

(3) On January 27, 2016, the Company and its joint venture partner sold Conifer Place, which resulted in the deconsolidation of the entity as of January 27, 2016. (See Note 9).

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.  This investment was repaid in full on June 6, 2016 and the Company has no further continuing involvement with this investment. Additional information with respect to the preferred equity investment is disclosed in Note 6.

Segment Reporting

The Company does not evaluate performance on a relationship specific or transactional basis and does not distinguish its principal business or group its operations on a geographical basis for purposes of measuring performance. Accordingly, the Company believes it has a single operating segment for reporting purposes in accordance with GAAP.

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. The Company had zero and three rental properties, respectively, included in assets held for sale as of December 31, 2016 and 2015.

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 had been reported as held for sale in the December 31, 2015 consolidated balance sheet.

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 have a useful life greater than or equal to one year. 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. These costs are capitalized along with the related asset. Costs of repairs and maintenance are expensed as incurred.

Concentration of Credit Risk

Financial instruments, which potentially subject the Company to concentration of credit risk, consist of periodic temporary deposits of cash. At December 31, 2016, the Company had $125.7 million of deposits at various banks, $112.0 million of which were over the insurance limit of the Federal Deposit Insurance Corporation. No losses have been experienced on such deposits.

As of December 31, 2016, the Company's real estate investments in Texas, Georgia, and California represented approximately 33%, 13%, and 18% of the net book value of its rental property assets, respectively. As a result, the geographic concentration of the Company's portfolio makes it particularly susceptible to adverse economic developments in the Texas, Georgia, and California real estate markets. Any adverse economic or real estate developments in these markets, such as business layoffs or downsizing, industry slowdowns, relocations of businesses, changing demographics and other factors, or any decrease in demand for multifamily rentals resulting from the local business climate, could adversely affect the Company's operating results and its ability to make distributions to stockholders.

Contractual Obligations

The Company leases parking space and equipment under leases with varying expiration dates through 2023.  As of December 31, 2016, the total payments due under these obligations were $299,000.

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 the property for properties 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 losses recorded on long lived assets during the years ended December 31, 2016, 2015 and 2014.

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 investment, included in other investments on the consolidated balance sheets, 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 6).

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. The Company tested goodwill as of December 31, 2016 and found no indications of impairment.

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 $56.0 million and $368,000 for the years ending December 31, 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 $325,000, $216,000, $148,000, $80,000, and $15,000 for the years ending December 31, 2017, 2018, 2019, 2020, and 2021, respectively, and none thereafter.

Revenue is primarily derived from the rental of residential housing units, however, included within rental income is 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 $10.8 million, $10.3 million and $7.8 million for the years endedDecember 31, 2016, 2015 and 2014, respectively.

Tenant Receivables

Tenant receivables are stated in the financial statements at 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 December 31, 2016 and 2015, there were allowances for uncollectible receivables of $5,200 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 any of its subsidiaries as a taxable REIT subsidiary (“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 December 31, 2016 and 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 2012 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 take 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 16) are included in the diluted earnings per share calculations because the necessary conditions for conversion have not been satisfied as of December 31, 2016 (were such date to represent the end of the contingency period).  For the purposes of calculating earnings per share, all common shares and per common share information in the financial statements have been adjusted retroactively for the effect of seven1.5% stock distributions, two0.75% stock distributions, one0.585% stock distribution and two0.5% stock distributions issued to stockholders. Common stock shares issued on the consolidated balance sheets have also been adjusted retroactively for the effect of these 12 distributions.

Reclassifications

Certain amounts in the prior year financial statements have been reclassified to conform to the current-year presentation. The impact of the reclassifications made to prior year amounts are not material and did not affect net income (loss).

In accordance with the adoption of Financial Accounting Standards Board ("FASB") Accounting Standards Update (“ASU”) No. 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, respectively, 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 from deferred financing costs to prepaid expenses and other assets (See Note 13).

Adoption of New Accounting Standards

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. On December 15, 2016, the Company adopted ASU No. 2014-15 and the adoption had no impact on the Company's consolidated financial statements.

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. 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 No. 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 No. 2015-02 and the adoption did not have a significant impact on the Company's consolidated financial statements.

In April 2015, FASB issued ASU No. 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. On January 1, 2016, the Company adopted ASU No. 2015-03. 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. The Company had 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 No. 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. On January 1, 2016, the Company adopted ASU No. 2015-15. Upon adoption, deferred finance costs related to the Company's credit facility were reclassified to prepaid expenses and other assets (See Note 13).     

In September 2015, FASB issued ASU No. 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. On January 1, 2016, the Company adopted ASU No. 2015-16 and the adoption had no impact on the Company's 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. In accordance with the Company’s plan for the adoption of ASU 2014-09, the Company has identified revenue streams and is performing an in-depth review to identify the related performance obligations and to evaluate the impact on the Company’s consolidated financial statements and internal accounting processes and controls. As the majority of the Company’s revenue is derived from lease contracts, the Company does not expect that the adoption of ASU 2014-09 or related amendments and modifications issued by the FASB will have a material impact on its 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 the Company's 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 the Company's consolidated financial statements.

In August 2016, FASB issued ASU No. 2016-15, "Classification of Certain Cash Receipts and Cash Payments", which addresses eight specific cash flow issues with the objective of reducing existing diversity in practice.  ASU No. 2016-25 will be effective for the Company beginning January 1, 2018. Early application is permitted. The Company is evaluating this guidance; however, it does not expect the adoption of ASU No. 2016-15 to have a significant impact on its consolidated cash flows.

In January 2017, FASB issued ASU No. 2017-01, "Business Combinations (Topic 850): Clarifying the Definition of Business", which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of businesses.  ASU No. 2017-01 will be effective for the Company beginning January 1, 2018. Early application is permitted. The Company is evaluating this guidance and assessing the impact of this guidance on its consolidated financial statements.

In January 2017, FASB issued ASU No. 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment", which alters the current goodwill impairment testing procedures to eliminate Step 2. ASU No. 2017-04 will be effective for the Company beginning December 15, 2019. Early application is permitted. The Company is evaluating this guidance and assessing the impact of this guidance on its consolidated financial statements.

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SUPPLEMENTAL CASH FLOW INFORMATION

12 Months Ended

Dec. 31, 2016

Supplemental Cash Flow Elements [Abstract]

SUPPLEMENTAL CASH FLOW INFORMATION

SUPPLEMENTAL CASH FLOW INFORMATION

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

	Years Ended
	December 31,
	2016		2015		2014
Non-cash financing and investing activities:
Stock issued from distribution reinvestment plan	$	28,497	$	28,959	$	22,898
Stock distributions issued	—		—		3,333
Deferred financing costs and escrow deposits funded directly by mortgage notes and credit facility	2,619		11,167		4,404
Accrual for construction in progress	1,343		896		947
Non-cash activity related to sales:
Deconsolidation of subsidiary and removal of related mortgage notes payable and noncontrolling interest	35,152		—		—
Mortgage notes payable settled directly with proceeds from sale of rental property	55,720		—		—
Assets and liabilities assumed in acquisitions:
Mortgage notes payable and other liabilities assumed in acquisition of rental property	—		40,284		176,935
Cash paid during the period for:
Interest	$	20,297	$	20,752	$	12,832

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RESTRICTED CASH

12 Months Ended

Dec. 31, 2016

Cash and Cash Equivalents [Abstract]

Restricted Cash

RESTRICTED CASH

Restricted cash represents escrow deposits with lenders to be used to pay real estate taxes, insurance, and capital improvement. The following table presents a summary of the components of the Company's restricted cash (in thousands):

	December 31,
	2016		2015
Real estate taxes	$	6,853	$	5,395
Insurance	1,854		1,657
Capital improvements	1,570		2,935
Total	$	10,277	$	9,987

In addition, the Company had unrestricted cash designated for capital expenditures of $101.6 million and $64.1 million for the years ended December 31, 2016 and 2015, respectively.

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RENTAL PROPERTIES, NET

12 Months Ended

Dec. 31, 2016

Real Estate Investments, Net [Abstract]

RENTAL PROPERTIES, NET

RENTAL PROPERTIES, NET

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

	December 31,
	2016			2015
Land	$	176,418		$	180,533
Building and improvements	795,665			775,239
Furniture, fixtures and equipment	32,198			28,928
Construction in progress	5,983			2,949
	1,010,264			987,649
Less: accumulated depreciation	(107,810		)	(71,151		)
	$	902,454		$	916,498

Depreciation expense for the years endedDecember 31, 2016, 2015, and 2014 was $44.0 million, $41.9 million, and $32.8 million, respectively.

During the three months ended December 31, 2015, the Company entered into agreements to sell two rental properties, with an aggregate total net book value of $43.9 million. The Company confirmed the intent and ability to sell all of the properties in their present condition and all properties qualified for held for sale accounting treatment upon meeting all applicable criteria on or 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 anticipated 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 these two rental properties during the three months ended March 31, 2016 (see Note 9).

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 sheets.

Carrying amounts of major classes of assets and liabilities included in held for sale related to Champion Farms at December 31, 2015 were as follows (in thousands):

Assets:
Rental properties, net	$	25,436
Restricted cash	$	54
Tenant receivables, net	2
Prepaid expenses and other assets	25
Subtotal - other assets associated with rental properties held for sale	$	81
Liabilities:
Mortgage note payable, net	$	16,443
Accounts payable	44
Accrued expenses and other liabilities	176
Tenant prepayments	57
Security deposits	43
Subtotal- other liabilities associated with rental properties held for sale	$	16,763

Included in the consolidated balance sheet at December 31, 2015 was $7.9 million of noncontrolling interests, of which $5.7 million related to interests held for sale.

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LOANS HELD FOR INVESTMENT, NET

12 Months Ended

Dec. 31, 2016

LOANS HELD FOR INVESTMENT, NET [Abstract]

LOANS HELD FOR INVESTMENT, NET

LOAN HELD FOR INVESTMENT, NET

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 Note and Peterson Note were resolved in prior years.

On August 18, 2011, the Company was the successful bidder at a foreclosure sale of the property collateralizing the Heatherwood Note. Possession of the Heatherwood Apartments was obtained in February 2012 and the property was subsequently sold in April 2013. On April 18, 2013, in connection with the sale of the Heatherwood Apartments, the Company originated an $800,000 mortgage loan (the "Heatherwood Sale Note") to the purchaser of the Heatherwood Apartments on the same date. In May 2015, the Company agreed to accept $583,000 from the borrower and apply $58,000 of escrow balances in full satisfaction of the loan. As such, the Company recorded a provision for loan loss of $130,000 during the year ended December 31, 2015 related to this payoff.

The following table presents the aging of the Trail Ridge Note, the Company’s remaining loan held for investment (in thousands), which is included in other investments on the consolidated balance sheets:

	December 31,
	2016		2015
Current	$	769	$	757
Delinquent:
30−89 days	—		—
90−180 days	—		—
Greater than 180 days	—		—
	$	769	$	757

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

	December 31,
	2016		2015
Loans:
Performing	$	769	$	757
Nonperforming	—		—
Total	$	769	$	757

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

	December 31,
	2016			2015
Unpaid principal balance	$	960		$	981
Unamortized discount	(198		)	(231		)
Deferred expenses, net	7			7
Net book value	$	769		$	757
Maturity date	10/28/2021
Interest rate	7.5		%
Average monthly payment	$	8

The Company has evaluated the loan for impairment and determined that, as of December 31, 2016, it was not impaired.  There were no allowances for credit losses as of both December 31, 2016 and 2015. There were $0 and $130,000 of charge-offs for the years ended December 31, 2016 and 2015, respectively.

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PREFERRED EQUITY INVESTMENT

12 Months Ended

Dec. 31, 2016

Equity Method Investments and Joint Ventures [Abstract]

Preferred Equity Investment

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. Presidium AMC Spring Hill Venture, LLC, (“Presidium”), a Texas limited liability company, owned the common equity and acted as the managing member of the Investment Vehicle. In October 2015 and March 2016, the Company increased its investment by a total of $800,000. The Company was obligated to fund up to an additional $1.1 million in increments of $150,000 as long as no triggering event had occurred.

The Investment Vehicle was the sole member of Spring Hill Investors GP, LLC, which was the general partner of Spring Hill Investors, LP, the owner of a 606-unit multifamily residential apartment community commonly known as Spring Hill Apartments (“Spring Hill”) and located in Dallas, Texas. The Company’s preferred equity investment was predominately utilized for capital improvements and deferred maintenance projects.

The Company was paid a dividend equal to 12% of the total amount invested, of which 7% was paid monthly and

the remaining amount accrued and was to be paid when the property cash flow allowed for the repayment. The mandatory redemption date for the investment was to be the earliest of (i) April 2017 or (ii) any earlier date that the mortgage loan secured by Spring Hill Apartments becomes due and payable as a result of the acceleration of the loan maturity date by the lender, or (iii) the date on which a defeasance is effected pursuant to the loan documents. The outstanding balance as of December 31, 2015 was $3.9 million, which is included in other investments on the consolidated balance sheets.

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 and dividend income in the Company's consolidated statement of operations.

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ACQUISITIONS AND FORECLOSURES

12 Months Ended

Dec. 31, 2016

Business Combinations [Abstract]

ACQUISITIONS AND FORECLOSURES

ACQUISITIONS AND FORECLOSURES

Real Estate Investments

As of December 31, 2016, the Company owned 31 properties, including six of the 12 properties purchased on January 28, 2014 as part of the Paladin Realty Income Properties, Inc. (“Paladin”) portfolio acquisition, discussed below. The Company recognized goodwill on the Paladin transaction as the excess of purchase price over the fair value of the property acquired. The Company estimated the fair values of certain of the acquired assets and liabilities based on preliminary valuations at the date of purchase. The Company has received final appraisals for all recent acquisitions.

The table below summarizes these acquisitions and the respective fair values assigned, excluding non-wholly owned properties acquired through the Paladin merger (dollars in thousands):

Multifamily Community Name	City and State	Date of Acquisition	Contractual Purchase Price (1)			Land		Building and Improvements		Furniture, Fixtures and Equipment		Intangible Assets		Other Assets		Liabilities			Fair Valued Assigned
Providence in the Park	Arlington, TX	12/22/2016	$	63,200		$	7,398	$	53,270	$	822	$	1,710	$	83	$	(214	)	$	63,069
Point Bonita Apartment Homes	Chula Vista, CA	6/16/2015	49,050			17,208		32,651		506		1,130		9		(30,008		)	21,496
Yorba Linda	Yorba Linda, CA	6/1/2015	118,000			39,322		76,124		590		1,964		76		(232		)	117,844
Heritage Pointe	Gilbert, AZ	3/19/2015	36,000			8,487		25,867		716		931		—		(152		)	35,849
South Lamar Village	Austin, TX	2/26/2015	24,000			5,586		17,493		291		629		—		(12,961		)	11,038
Pines of York	Yorktown, VA	1/28/2014	8,087		(2)	4,464		16,340		400		715		416		(15,447		)	6,888
Calloway at Las Colinas	Irving, TX	9/29/2014	48,500			6,707		39,543		825		1,425		9		(636		)	47,873

Sunset Ridge	San Antonio, TX	9/4/2014	35,000		15,425	18,615	514	931	—	(24,737	)	10,748
Pinehurst	Kansas City, MO	1/28/2014	3,588	(3)	1,250	8,241	200	290	142	(4,548	)	5,575
Pheasant Run	Lee's Summit, MO	1/28/2014	4,277	(3)	800	10,798	300	317	172	(6,559	)	5,828
Retreat at Shawnee	Shawnee, KS	1/28/2014	5,369	(3)	3,200	14,550	500	608	186	(14,088	)	4,956
Aston at Cinco Ranch	Katy, TX	6/26/2014	32,300		5,831	25,247	307	915	—	(377	)	31,923
Perimeter 5550	Atlanta, GA	5/19/2014	22,250		4,002	17,600	194	453	—	(110	)	22,139
Perimeter Circle	Atlanta, GA	5/19/2014	29,500		4,723	23,969	219	588	—	(156	)	29,343
Chisholm Place	Plano, TX	5/5/2014	15,000		1,981	12,383	198	438	—	(96	)	14,904
Evergreen at Coursey	Baton Rouge, LA	1/28/2014	15,499	(4)	3,430	38,041	530	1,080	680	(28,844	)	14,917
The Estates at Johns Creek	Alpharetta, GA	3/28/2014	70,500		6,353	62,249	509	1,389	49	(392	)	70,157
Meridian Pointe	Burnsville, MN	12/20/2013	33,149		4,134	26,992	1,016	1,008	36	(107	)	33,079
Maxwell Townhomes	San Antonio, TX	12/16/2013	22,500		3,830	17,510	491	669	48	(14,363	)	8,185
The Nesbit Palisades	Alpharetta, GA	10/25/2013	25,050		7,582	16,023	587	859	37	(161	)	24,927
Verona Apartment Homes	Littleton, CO	9/30/2013	30,600		5,702	23,609	198	1,090	24	(190	)	30,433
Skyview Apartment Homes	Westminster, CO	9/30/2013	24,250		2,923	20,301	97	928	20	(147	)	24,122
Tech Center Square	Newport News, VA	9/9/2013	18,250		3,951	13,048	584	667	23	(59	)	18,214
The Westside Apartments	Plano, TX	7/25/2013	32,200		5,785	24,418	798	1,199	52	(317	)	31,935
Affinity at Winter Park	Winter Park, FL	6/27/2013	10,100		2,512	6,459	523	606	50	(61	)	10,089
Trailpoint at the Woodlands	Spring, TX	6/24/2013	27,200		3,785	22,014	697	704	40	(170	)	27,070
Retreat at Rocky Ridge	Hoover, AL	4/18/2013	8,500		1,616	6,418	30	436	2	(89	)	8,413
Ivy at Clear Creek	Houston, TX	3/28/2013	11,750		1,877	9,175	28	670	8	(127	)	11,631
Deerfield	Hermantown MN	3/21/2012	10,300	(5)	1,660	11,110	500	423	1	(4	)	13,690
Mosaic	Oklahoma City, OK	12/6/2012	2,050		1,000	2,609	30	123	14	(14	)	3,762
Williamsburg Apartments	Cincinnati, OH	6/20/2012	41,250		3,223	35,111	1,007	1,909	49	(274	)	41,025
Cannery Lofts	Dayton, OH	5/13/2011	7,100	(6)	160	7,913	200	609	35	—		8,917
Vista Apartment Homes	Philadelphia, PA	6/17/2011	12,000	(7)	1,163	9,913	—	535	530	(141	)	12,000

(1) Contractual purchase price excludes closing costs, acquisition expenses, and other immaterial settlement date adjustments and pro-rations. For properties acquired through foreclosure, the purchase price reflects the contract purchase price of the note.

(2) The Company originally acquired a 90% interest in the joint venture that owned Pines of York on January 28, 2014. On November 25, 2014, the Company purchased the remaining 10% ownership interest of its joint venture partner, bringing the Company's ownership percentage to 100%.

(3) The Company originally acquired a 97.5% interest in each of the joint ventures that owned Pinehurst, Pheasant Run and Retreat at Shawnee on January 28, 2014. On July 1, 2014, the Company purchased the remaining 2.5% ownership interest of its joint venture partner in each entity, bringing the Company's ownership percentage in each entity to 100%.

(4) The Company originally acquired a 51.7% interest in the joint venture that owned Evergreen at Coursey on January 28, 2014. On March 31, 2014, the Company purchased the remaining 48.3% ownership interest of its joint venture partner, bringing the Company's ownership percentage to 100%.

(5) Deerfield originally served as the collateral for a non-performing note that the Company purchased on March 21, 2012. On July 19, 2012, the Company was the successful bidder at a foreclosure sale and formally received title to the property on January 22, 2013. The date of acquisition reflects the date the Company acquired the note.

(6) Cannery Lofts originally served as the collateral for a non-performing note that the Company purchased on May 13, 2011. On December 21, 2011, the Company entered into a settlement agreement with the borrower and, subsequently, the Company foreclosed and formally received title to the property on June 6, 2012. The date of acquisition reflects the date the Company acquired the note.

(7) Vista Apartment Homes, formerly known as Iroquois Apartments, originally served as the collateral for a non-performing promissory note that the Company purchased on June 17, 2011. On August 2, 2011, the Company was the successful bidder at a sheriff's sale and formally received title to the property.

Acquisitions

The Company acquired one property during the year endedDecember 31, 2016. In order to finalize the fair values of the acquired assets and liabilities, a third-party appraisal was obtained for the property acquired. The Company has up to 12 months from the date of acquisition to finalize the valuation for this property. The valuation has been finalized as of December 31, 2016.

Yorba Linda Acquisition -2015

The supplemental pro forma financial information set forth below is based upon historical financial statements giving effect to the Yorba Linda acquisition as of the beginning of the period presented (in thousands):

	For the Year Ended
	December 31, 2014
	(unaudited)
Revenues	108,005
Net loss attributable to common stockholders	(50,043		)
Basic and diluted net loss per share	$	(0.74	)

Paladin Acquisition -2014

On July 18, 2013, Resource Real Estate Opportunity OP, LP (the “Operating Partnership”), the operating partnership of the Company, entered into an Agreement and Plan of Merger with RRE Charlemagne Holdings, LLC, a wholly-owned subsidiary of the Operating Partnership (“Merger Sub”), Paladin, and Paladin Realty Income Properties, L.P. (“Paladin OP”), whose sole general partner was Paladin, pursuant to which Paladin OP was to merge with and into Merger Sub (the “Merger”), with Merger Sub surviving as a wholly-owned subsidiary of the Operating Partnership.

On January 28, 2014, the parties completed the Merger resulting in the acquisition by the Operating Partnership of interests in 11 joint ventures that owned a total of 10 multifamily communities with more than 2,500 rentable units and two office properties that contained more than 75,000 rentable square feet. The Operating Partnership also acquired, as part of the Merger, a promissory note in the principal amount of $3.5 million issued by a consolidated joint venture which was eliminated in consolidation. This promissory note was secured by the co-venturer’s interests in such joint venture and was repaid in full on November 17, 2015. The consideration for the Merger was $51.2 million exclusive of transaction costs. The names of each community, location and the Company's joint venture ownership interests on the date of acquisition are presented below:    

Multifamily Community Name	City and State	Ownership % at Date of Acquisition
Champion Farms	Louisville, KY	70.0%
Fieldstone	Woodlawn, OH	83.0%
Pinehurst	Kansas City, MO	97.5%
Pheasant Run	Lee's Summit, MO	97.5%
Retreat at Shawnee	Shawnee, KS	97.5%
Hilltop Village	Kansas City, MO	49.0%
Conifer Place	Norcross, GA	42.5%
Stone Ridge	Columbia, SC	68.5%
Evergreen at Coursey Place	Baton Rouge, LA	51.7%
Pines of York	Yorktown, VA	90.0%
Governor Park (sold March 6, 2014)	San Diego, CA	47.65%

On March 6, 2014, the Company, through a wholly-owned subsidiary, sold its 47.65% membership interest in one of the Paladin joint ventures, FPA/PRIP Governor Park, LLC ("Governor Park"), to its joint venture partner, FPA Governor Park Associates, LLC for $456,000. The sale price approximated the fair value, therefore no gain or loss was recognized on the transaction.

The allocation of the purchase price for the interests in the 11 Paladin joint ventures, which was completed during the year ended December 31, 2014, is included below (in thousands):

Multifamily Community Name	Land		Building and Improvements		Intangible Assets		Fair Value of Property		Other Assets		Liabilities			Noncontrolling Interest			Total Company Equity		Goodwill		Allocation of Purchase Price
Champion Farms	$	3,168	$	23,464	$	579	$	27,211	$	575	$	(17,015	)	$	(3,231	)	$	7,540	$	171	$	7,711
Fieldstone	1,420		18,472		648		20,540		661		(16,462		)	(806		)	3,933		130		4,063
Pinehurst	1,250		8,241		290		9,781		332		(4,548		)	(139		)	5,426		72		5,498
Pheasant Run	800		10,798		317		11,915		472		(6,559		)	(146		)	5,682		76		5,758
Retreat at Shawnee	3,200		14,550		608		18,358		686		(14,088		)	(124		)	4,832		117		4,949
Hilltop Village	800		4,289		195		5,284		267		(4,612		)	(479		)	460		33		493
Conifer Place	5,040		28,712		1,007		34,759		749		(28,776		)	(3,869		)	2,863		219		3,082
Stone Ridge	1,300		4,612		326		6,238		985		(178		)	(2,218		)	4,827		42		4,869
Evergreen at Coursey Place	3,430		38,041		1,080		42,551		1,210		(28,844		)	(7,200		)	7,717		268		7,985
Pines of York	4,464		16,340		715		21,519		816		(15,446		)	(689		)	6,200		136		6,336
	$	24,872	$	167,519	$	5,765	$	198,156	$	6,753	$	(136,528	)	$	(18,901	)	$	49,480	$	1,264	$	50,744
Governor Park (sold March 6, 2014)																					456
Total purchase price																					$	51,200

On March 31, 2014, the Company purchased the remaining 48.3% ownership interest in Evergreen at Coursey Place ("Coursey Place") from its joint venture partner for $7.5 million. A summary of the transaction is as follows (in thousands):

Purchase price	$	7,500
Noncontrolling interest assumed	$	7,200
Losses attributable to noncontrolling interest	(191		)
Distribution to noncontrolling interest	(116		)
Adjusted noncontrolling interest balance	6,893
Adjustment to additional paid in capital	$	(607	)

On July 1, 2014, the Company purchased the remaining 2.5% ownership interest in Pinehurst, Pheasant Run and Retreat at Shawnee from its joint venture partner for a total of $1.1 million. A summary of the transactions is as follows (in thousands):

	Pinehurst			Pheasant Run			Retreat at Shawnee
Purchase price	$	570		$	515		$	15
Noncontrolling interests assumed	139			146			124
Losses attributable to noncontrolling interests	(7		)	(8		)	(15		)
Adjusted noncontrolling interest balance	132			138			109
Adjustment to additional paid in capital	$	(438	)	$	(377	)	$	94

In the years ended December 31, 2015 and 2014, the Company contributed $356,000 and $1.1 million, respectively, to the joint venture partnership that owns Stone Ridge. The joint venture partner did not contribute its pro-rata share, which resulted in a reduction of its partnership interest. As a result, the Company obtained an additional 5.7% and 9.2%, respectively, interest in the joint venture, increasing its ownership interest to 83.4% at December 31, 2015.

In November 2014, the Company purchased the remaining 10% ownership interest in Pines of York from its joint venture partner for $900,000. A summary of the transaction is as follows (in thousands):

	Pines of York
Purchase price	$	900
Noncontrolling interests assumed	690
Losses attributable to noncontrolling interests	(98		)
Adjusted noncontrolling interest balance	592
Adjustment to additional paid in capital	$	(308	)

The tables below present the total revenues, net loss, and acquisition costs of the Company's acquisitions during the year ended December 31, 2016, 2015, and 2014 (dollars in thousands):

Multifamily Community	Total Revenues		Net Loss			Acquisition Costs
2016 Acquisitions:
Providence in the Park	$	193	$	(781	)	$	(1,509	)
Various properties	—		—			(73		)	(1	)
	$	193	$	(781	)	$	(1,582	)

Multifamily Community	Total Revenues		Net Loss			Acquisition Costs
2015 Acquisitions:
South Lamar Village	$	2,086	$	(1,580	)	$	(692	)
Heritage Pointe	3,019		(2,173		)	(1,005		)
Yorba Linda	4,584		(3,405		)	(2,761		)
Point Bonita Apartment Homes	2,431		(2,144		)	(1,353		)
	$	12,120	$	(9,302	)	$	(5,811	)

Multifamily Community	Total Revenues		Net Loss			Acquisition Costs
2014 Acquisitions:
South Lamar Village (2)	$	—	$	—		$	(66	)
Calloway at Las Colinas	1,445		(1,234		)	(1,290		)
Sunset Ridge	1,214		(1,216		)	(968		)
Aston at Cinco Ranch	1,718		(1,144		)	(832		)
Perimeter 5550	1,172		(1,024		)	(606		)
Perimeter Circle	1,501		(1,272		)	(748		)
Chisholm Place	1,196		(1,042		)	(494		)
The Estates at Johns Creek	4,828		(3,287		)	(1,720		)
Paladin Properties	22,645		(10,190		)	(3,109		)
	$	35,719	$	(20,409	)	$	(9,833	)

(1) Acquisition fees paid in 2016 related to additional investments in properties to fund additional capital reserves.

(2) Acquisition that was completed during the first quarter of fiscal 2015.

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MEASUREMENT PERIOD ADJUSTMENTS

12 Months Ended

Dec. 31, 2016

Accounting Changes and Error Corrections [Abstract]

MEASUREMENT PERIOD ADJUSTMENTS

MEASUREMENT PERIOD ADJUSTMENTS

The Company obtains third party appraisals for all of its acquisitions. If the appraisals are not finalized in the period in which the property or interest was acquired, a measurement period adjustment is recorded. For the Estates at Johns Creek acquisition, which was completed in the three months ended March 31, 2014, the measurement period adjustments were finalized during the three months ended June 30, 2014. For the Paladin acquisition, which was completed in the three months ended March 31, 2014, the measurement period adjustments were finalized during the three months ended December 31, 2014. There were no measurement period adjustments needed for the years ended December 31, 2016 and 2015.     

Changes in the Paladin and the Estates at Johns Creek acquisitions are reflected in the tables below (in thousands):

Paladin

	January 28, 2014 (As initially reported)			Measurement period adjustment (1)			January 28, 2014 (As adjusted)
Land	$	44,292		$	(19,420	)	$	24,872
Building	149,155			18,364			167,519
Personal property	—			3,530			3,530
Intangible assets	5,861			(96		)	5,765
Other assets	3,231			(9		)	3,222
Goodwill	6,412			(5,148		)	1,264
Liabilities	(140,970		)	4,442			(136,528		)
Total net identifiable net assets	$	67,981		$	1,663		$	69,644

(1) Remaining balance ($1.7 million) of measurement period adjustments impacted the noncontrolling interest balance.

The results of operations for the three months ended June 30, 2014 include an additional $867,000 of depreciation and amortization that would have been included in the three months ended March 31, 2014 had the final appraisals for the Paladin properties been received and recorded during that period.

Estates at Johns Creek

	March 28, 2014 (As initially reported)		Measurement period adjustment			March 28, 2014 (As adjusted)
Land	$	18,137	$	(11,784	)	$	6,353
Building	51,843		10,406			62,249
Personal property	—		509			509
Intangible assets	520		869			1,389
Total net identifiable net assets	$	70,500	$	—		$	70,500

The measurement period adjustment for the Estates at Johns Creek had no impact on depreciation and amortization for the three months ended March 31, 2014.

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DISPOSITION OF PROPERTIES AND DECONSOLIDATION OF INTERESTS

12 Months Ended

Dec. 31, 2016

Discontinued Operations and Disposal Groups [Abstract]

DISPOSITION OF PROPERTIES AND DECONSOLIDATION OF INTERESTS

DISPOSITION OF PROPERTIES AND DECONSOLIDATION OF INTERESTS

The following table presents details of our disposition and deconsolidation activity during the years ended December 31, 2016, 2015, and 2014 (in thousands):

Multifamily Community	Location	Sale Date	Contract Sales price		Net Gains on Dispositions of Properties and Joint Venture Interests			Revenues Attributable to Properties Sold		Net Income (Loss) Attributable to Properties Sold
2016 Dispositions:
Conifer Place (1)	Norcoss, Georgia	January 27, 2016	$	42,500	$	9,897		$	365	$	9,942
Champion Farms	Louisville, Kentucky	January 29, 2016	7,590		1,066			220		1,125
The Ivy at Clear Creek	Houston, Texas	February 17, 2016	19,400		6,792			386		6,629
Affinity at Winter Park	Winter Park, Florida	June 9, 2016	17,500		5,605			1,010		5,757
Fieldstone	Woodland, Ohio	June 30, 2016	7,514		4,096			1,548		4,325
The Nesbit Palisades	Alpharetta, Georgia	July 8, 2016	45,500		17,601			2,615		17,739
			$	140,004	$	45,057		$	6,144	$	45,517
2015 Dispositions:
The Alcove Apartments	Houston, Texas	January 26, 2015	$	11,050	$	3,784		$	199	$	3,819
107th Avenue Apartments	Omaha, Nebraska	January 29, 2015	250		50			3		50
The Redford Apartments	Houston, Texas	February 27, 2015	32,959		15,303			1,274		15,652
Cityside Apartments	Houston, Texas	March 2, 2015	24,500		10,028			701		10,290
One Hundred Chevy Chase	Lexington, Kentucky	June 30, 2015	13,500		4,386			828		4,027
The Reserve at Mt. Moriah	Memphis, Tennessee	September 18, 2015	5,425		2,490			1,135		2,202
			$	87,684	$	36,041		$	4,140	$	36,040
2014 Dispositions:
Governor Park	San Diego, California	March 6, 2014	$	456	$	—		$	—	$	—
Campus Club	Tampa, Florida	June 16, 2014	10,500		2,602			849		2,723
Hilltop Village (2)	Kansas City, Missouri	July 1, 2014	—		(493		)	352		(707		)
Arcadia at Westheimer	Houston, Texas	September 19, 2014	18,100		8,375			2,667		8,407
			$	29,056	$	10,484		$	3,868	$	10,423

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

(2)    Net income (loss) attributable to properties sold presented includes $112,000 attributable to noncontrolling interests.

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IDENTIFIED INTANGIBLE ASSETS, NET

12 Months Ended

Dec. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

IDENTIFIED INTANGIBLE ASSETS, NET

IDENTIFIED INTANGIBLE ASSETS, NET

Identified intangible assets, net, relate to in-place apartment unit rental and antennae leases. The value of the acquired in-place leases totaled $1.9 million and $374,000 as of December 31, 2016 and 2015, respectively, net of accumulated amortization of $24.3 million and $28.4 million, respectively.  The weighted-average remaining life of the acquired apartment unit rental leases is seven months and one month as of December 31, 2016 and 2015, respectively. Expected amortization for the antennae leases at the Vista Apartment Homes is $16,000 annually through 2025.  Amortization of the rental and antennae leases for the years endedDecember 31, 2016, 2015, and 2014 was $228,000, $6.4 million, and $15.0 million, respectively.

Expected amortization for the rental and antennae leases for the next five years ending December 31, and thereafter, is as follows (in thousands): 

2017	$	1,726
2018	16
2019	16
2020	16
2021	16
Thereafter	65
	$	1,855

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GOODWILL

12 Months Ended

Dec. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

GOODWILL

The following table presents a rollforward of the Company's activity in goodwill for the years ended December 31, 2016 and 2015 (in thousands):

Balance, January 1, 2015	$	1,231
Activity - 2015	—
Balance, December 31, 2015	$	1,231
Activity - 2016: Sale of Conifer Place, Champion Farms, and Fieldstone	(520		)
Balance, December 31, 2016	$	711

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MORTGAGE NOTES PAYABLE, NET

12 Months Ended

Dec. 31, 2016

Debt Disclosure [Abstract]

MORTGAGE NOTES PAYABLE, NET

MORTGAGE NOTES PAYABLE, NET

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

	December 31, 2016										December 31, 2015
	Outstanding borrowings		Premium (Discount)			Deferred finance costs, net			Carrying Value		Outstanding borrowings		Premium (Discount)			Deferred finance costs, net			Carrying Value
Collateral
Vista Apartment Homes	$	15,225	$	—		$	(178	)	$	15,047	$	15,573	$	—		$	(216	)	$	15,357
Cannery Lofts	13,100		—			(197		)	12,903		8,148		—			(131		)	8,017
Deerfield	10,359		—			(125		)	10,234		10,517		—			(159		)	10,358
Ivy at Clear Creek	—		—			—			—		8,431		—			(136		)	8,295
Trailpoint at the Woodlands	18,690		—			(222		)	18,468		19,013		—			(257		)	18,756
Verona Apartment Homes	32,970		—			(532		)	32,438		22,402		—			(179		)	22,223
Skyview Apartment Homes	28,400		—			(462		)	27,938		18,089		—			(148		)	17,941
The Nesbit Palisades	—		—			—			—		20,298		—			(309		)	19,989
Maxwell Townhomes	13,602		—			(137		)	13,465		13,850		—			(167		)	13,683
Fieldstone	—		—			—			—		15,332		—			(37		)	15,295
Pinehurst	7,350		—			(154		)	7,196		4,111		—			—			4,111
Pheasant Run	6,250		43			(9		)	6,284		6,250		100			(20		)	6,330
Retreat of Shawnee	12,893		85			(23		)	12,955		13,090		164			(44		)	13,210
Conifer Crossing	—		—			—			—		27,074		—			—			27,074
Evergreen at Coursey Place	27,107		100			(96		)	27,111		27,548		123			(120		)	27,551
Pines of York	14,999		(299		)	(56		)	14,644		15,267		(363		)	(69		)	14,835
Estates at Johns Creek	49,596		—			(405		)	49,191		50,000		—			(526		)	49,474
Chisholm Place	11,587		—			(143		)	11,444		11,587		—			(163		)	11,424
Perimeter Circle	17,298		—			(143		)	17,155		17,657		—			(202		)	17,455
Perimeter 5550	13,651		—			(118		)	13,533		13,935		—			(167		)	13,768
Aston at Cinco Ranch	23,367		—			(268		)	23,099		23,772		—			(328		)	23,444
Sunset Ridge 1	19,699		259			(205		)	19,753		20,121		329			(261		)	20,189
Sunset Ridge 2	2,948		35			(26		)	2,957		3,002		45			(34		)	3,013
Calloway at Las Colinas	35,083		—			(306		)	34,777		35,740		—			(372		)	35,368
South Lamar Village	12,435		—			(131		)	12,304		12,682		—			(184		)	12,498
Heritage Pointe	26,280		—			(327		)	25,953		26,280		—			(370		)	25,910
Yorba Linda	67,500		—			(661		)	66,839		67,500		—			(860		)	66,640
Point Bonita Apartment Homes	26,907		1,966			(338		)	28,535		27,265		2,276			(391		)	29,150
Stone Ridge	5,227		—			(130		)	5,097		5,350		—			(153		)	5,197
The Westside Apartments	36,820		—			(448		)	36,372		23,000		—			(351		)	22,649
Tech Center Square	12,375		—			(196		)	12,179		12,500		—			(159		)	12,341
Williamsburg	53,995		—			(828		)	53,167		—		—			—			—
Retreat at Rocky Ridge	11,375		—			(261		)	11,114		—		—			—			—
	$	627,088	$	2,189		$	(7,125	)	$	622,152	$	595,384	$	2,674		$	(6,513	)	$	591,545

The following table presents additional information about the Company's mortgage notes payable, net, at December 31, 2016 (in thousands, except percentages):

Collateral	Maturity Date	Margin over LIBOR	Annual Interest Rate			Average Monthly Debt Service		Average Monthly Escrow
Vista Apartment Homes	1/1/2022	2.29%	3.06	%	(1)(5)	$	67	$	16
Cannery Lofts	11/1/2023	2.54%	3.31	%	(1)(3)(6)	46		40
Deerfield	11/1/2020	—	4.66	%	(2)(5)	54		29
Trailpoint at the Woodlands	11/1/2023	2.41%	3.18	%	(1)(4)	74		67
Verona Apartment Homes	10/1/2026	2.36%	3.13	%	(1)(3)(6)	116		38
Skyview Apartment Homes	10/1/2026	2.36%	3.13	%	(1)(3)(6)	100		22
Maxwell Townhomes	1/1/2022	—	4.32	%	(2)(5)	71		63
Pinehurst	11/1/2023	2.42%	3.19	%	(1)(3)(6)	30		15
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
Estates at Johns Creek	7/1/2020	—	3.38	%	(2)(5)	221		102
Chisholm Place	6/1/2024	2.39%	3.16	%	(1)(3)	43		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	1.88%	2.65	%	(1)(3)	98		44
Yorba Linda	6/1/2020	1.75%	2.52	%	(1)(3)	180		—
Point Bonita Apartment Homes	10/1/2023	—	5.33	%	(2)(5)	152		38
Stone Ridge	12/1/2022	1.86%	2.63	%	(1)(5)	21		17
The Westside Apartments	9/1/2026	2.12%	2.89	%	(1)(3)(6)	137		68
Tech Center Square	6/1/2023	2.58%	3.35	%	(1)(5)(6)	55		25
Williamsburg	1/1/2024	2.38%	3.15	%	(1)(3)(7)	202		123
Retreat at Rocky Ridge	1/1/2024	2.46%	3.23	%	(1)(3)(7)	43		22

(1) Variable rate based on one-month LIBOR of 0.77167% (as of December 31, 2016) plus applicable 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) Refinanced during the year ended December 31, 2016.

(7) New debt placed during the year ended December 31, 2016.

Loans assumed as part of the Point Bonita Apartment Homes, South Lamar Village, Paladin, Sunset Ridge and Maxwell Townhomes acquisitions were recorded at fair value. The premium or discount is amortized over the remaining term of the loans and included in interest expense. For the years ended December 31, 2016, 2015, and 2014, interest expense was reduced by $485,000, $779,000, and $598,000 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. Each property's fair values assigned at acquisition are summarized in Note 7. 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 December 31, 2016 and 2015, the Company had $10.3 million and $10.0 million of restricted cash related to escrow deposits held by mortgage lenders for real estate taxes, insurance and capital reserves.

Annual principal payments on the mortgage notes payable for each of the next five years ending December 31 and thereafter are as follows (in thousands):

2017	$	12,978
2018	20,456
2019	50,908
2020	150,951
2021	99,121
Thereafter	292,674
	$	627,088

     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 of renovations to The Estates at Johns Creek by July 1, 2018, of which $7.0 million were completed at December 31, 2016. The Company is in the process of releasing the guaranty.

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 loan includes a net worth and liquidity covenant. The Company was in compliance with all covenants at December 31, 2016. The loan also includes an additional debt service coverage covenant that is only required to be met as of December 31, 2017 and for 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.  Draws under the Tech Center Loan were secured by the assets of Tech Center Square (formerly known as the Jefferson Point Apartments). The Company provided a repayment guarantee of all interest and scheduled monthly principal payments (excluding the final payment at maturity for the outstanding balance.) The Company paid certain closing costs in connection with the Tech Center Loan including loan fees totaling $75,000. 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% 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. Draws under the Westside Loan were secured by the assets of The Westside Apartments. The Company could draw the remaining $6.7 million when certain debt service coverage and loan to value criteria were met. Amounts repaid on the loan could not be reborrowed. The Company had provided a $6.5 million repayment guarantee. The Company paid certain closing costs in connection with the Westside Loan, including loan fees totaling $222,000. On September 1, 2016, the existing loan was repaid in full and was refinanced with a different lender.

In addition to Tech Center Square Apartments and The Westside Apartments, the Company refinanced the loans on Verona Apartment Homes, Skyview Apartment Homes, Pinehurst, and Cannery Lofts during the year ended December 31, 2016. As a result, $791,000 of loss on extinguishment of debt was included in interest expense on the consolidated statement of operations for the year ended December 31, 2016.

On December 22, 2016, the Company, through a wholly-owned subsidiary, entered into a loan ("Williamsburg Loan") with Berkadia Commercial Mortgage for $54.0 million. The Williamsburg Loan is secured by the assets of Williamsburg. The Williamsburg Loan matures on January 1, 2024 and is pre-payable after the first year of its term upon payment of an amount equal to 1% of the outstanding principal balance. The loan has an interest-only period of two years. The interest rate on the loan is one-month LIBOR plus 2.38%.

On December 23, 2016, the Company, through a wholly-owned subsidiary, entered into a loan ("Rocky Ridge Loan") with CBRE Capital Markets for $11.4 million. The Rocky Ridge Loan is secured by the assets of Retreat at Rocky Ridge. The Rocky Ridge Loan matures on January 1, 2024 and is pre-payable after the first year of its term upon payment of an amount equal to 1% of the outstanding principal balance. The loan has an interest-only period of two years. The interest rate on the loan is one-month LIBOR plus 2.46%.

Deferred financing costs incurred to obtain financing are amortized over the term of the related debt. During the years ended December 31, 2016, 2015, and 2014, $1.8 million, $1.5 million, and $1.1 million, respectively, of amortization of deferred financing costs were included in interest expense. Accumulated amortization as of December 31, 2016 and 2015 was $2.6 million and $2.4 million, respectively.

Estimated amortization of the existing deferred financing costs for the next five years ending December 31, are as follows (in thousands):

2017	$	1,414
2018	1,353
2019	1,251
2020	972
2021	719
Thereafter	1,416
	$	7,125

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CREDIT FACILITY

12 Months Ended

Dec. 31, 2016

Line of Credit Facility [Abstract]

CREDIT FACILITY

CREDIT FACILITY

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

	Balance Outstanding at		Current Availability at		Balance Outstanding at						Weighted Average Interest Rate for the Year Ended
Lender	December 31, 2016				December 31, 2015		Maturity Date	Interest Rate Basis	Current Interest Rate (1)		December 31, 2016		December 31, 2015
Bank of America	$	—	$	13,280	$	21,894	5/23/2017	LIBOR plus 3%	3.77	%	3.44	%	3.26	%

(1) Variable rate based on one-month LIBOR of 0.77167% (as of December 31, 2016).

On December 2, 2011, the Company, through the Operating Partnership, entered into a secured revolving credit facility (the “Bank of America Credit Facility”) with Bank of America, N.A. (“Bank of America”).  On May 23, 2013, the Company amended the Bank of America Credit Facility to increase the amount it may borrow from $25 million to $50 million (the “Facility Amount”). Draws under the Bank of America Credit Facility are secured by one of the Company's properties with an aggregate value (lower of acquisition cost or appraised value) of $33.2 million and are guaranteed by the Company. The Company is able to draw up to 40% of the aggregate value of the property securing the facility.  The Company paid certain closing costs in connection with the Bank of America Credit Facility.

      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.  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. For the years ended December 31, 2016and 2015, the Company had weighted average borrowings of$6.8 millionand$13.8 millionunder the Bank of America Credit Facility.

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 at least (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 went into effect during the year ended December 31, 2016. The Company was in compliance with all covenants at December 31, 2016.  

Deferred financing costs incurred to obtain financing are amortized over the term of the related debt. During the years ended December 31, 2016, 2015, and 2014, $321,000, $327,000, and $225,000, respectively, of amortization of deferred financing costs were included in interest expense. Accumulated amortization as of December 31, 2016 and 2015 was $857,000 and $763,000, respectively. Estimated amortization of the existing deferred financing costs is $68,500 for the 12-month period ending December 31, 2017 and none thereafter.

As of December 31, 2016, there are no principal payments required by the credit facility for the 12-month period ending December 31, 2017 or any period thereafter.

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ACCUMULATED OTHER COMPREHENSIVE LOSS

12 Months Ended

Dec. 31, 2016

Equity [Abstract]

ACCUMULATED OTHER COMPREHENSIVE LOSS

ACCUMULATED OTHER COMPREHENSIVE LOSS

The following table presents the changes in each component of the Company's accumulated other comprehensive loss for the years ended December 31, 2016, 2015, and 2014 (dollars in thousands):

Balance, January 1, 2014	$	20
Unrealized loss on designated derivatives	(286		)
Balance, December 31, 2014	(266		)
Unrealized loss on designated derivatives	(174		)
Balance, December 31, 2015	(440		)
Reclassification adjustment for realized loss on designated derivatives	105
Unrealized loss on designated derivatives	(10		)
Balance, December 31, 2016	$	(345	)

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2016

Related Party Transactions [Abstract]

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

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 September 8, 2016, RAI was acquired by C-III. As a result, C-III now controls the Advisor and all of the shares currently held by the Advisor.

Self-insurance funds held in escrow. Substantially all of the receivables from related parties represent insurance deposits held in escrow by Resource Real Estate ("RRE") for self insurance which, if unused, will be returned to the Company. The Company's properties participate in insurance pools with other properties directly and indirectly managed by RAI for both the property insurance and general liability. RRE holds the deposits in escrow to fund future insurance claims. 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 of each general liability incident. Catastrophic insurance would cover losses in excess of the property insurance and general liability pools up to $140.0 million and $51.0 million, respectively. 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. During the years ended December 31, 2016 and 2015, the Company paid $1.8 million and $1.6 million into the insurance pools.

Internal audit fees. 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, 2016. 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 of 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. 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.  This includes all organization and offering costs of up to 2.5% of gross offering proceeds.

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 the 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 information technology fees and operating expenses on behalf of the Company. 

Relationship with Other Related Parties

The Company has also made payments 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, but as of September 8, 2016 is no longer the Chairman of RAI. Until March 2006, an 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, but as of September 8, 2016 is no longer an executive 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 fees earned / expenses paid and the amounts payable to such related parties are summarized in the following tables (in thousands):

	As of December 31,
	2016		2015
Receivables from related parties:
RAI and affiliates	$	1,375	$	1,421
Payables to related parties:
Advisor:
Operating expense reimbursements	$	1,285	$	286
Manager:
Property management fees	456		440
Operating expense reimbursements	314		459
	$	2,055	$	1,185

	Years Ended
	December 31,
	2016		2015		2014
Fees earned / expenses paid to related parties:
Advisor:
Acquisition fees (1)	$	1,452	$	5,179	$	8,591
Asset management fees (2)	10,484		10,240		7,262
Disposition fees (3)	686		1,140		422
Debt financing fees (4)	532		697		1,623
Overhead allocation (5)	5,621		3,733		2,227
Internal audit fees (5)	44		41		—
Manager :
Property management fees (2)	$	5,137	$	4,748	$	3,661
Construction management fees (6)	926		1,895		1,685
Information technology fees (5)	418		365		306
Operating expense reimbursements (7)	245		278		276
Debt servicing fees (2)	15		33		8
Other:
Ledgewood	$	121	$	169	$	143
Graphic Images	91		59		37

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

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

(3) Included in Net gains on dispositions of properties and joint venture interests on the consolidated statements of operations and comprehensive income (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 income (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 income (loss). Amount excludes the allocated payroll expenses described in Note 20- Operating Expenses.

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EQUITY

12 Months Ended

Dec. 31, 2016

Equity [Abstract]

EQUITY

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 December 31, 2016 and 2015, no shares of preferred stock were issued and outstanding.

Common Stock

As of December 31, 2016, the Company had issued an aggregate of 74,975,022 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	9,078,068		91,389
Shares issued in conjunction with the Advisor's initial investment, net of 4,500 share conversion	15,500		155
Total	74,975,022		$	726,203
Shares redeemed and retired	(2,968,433	)
Total shares outstanding as of December 31, 2016	72,006,589

(1)    Includes 276,056 shares held by the Advisor.

Convertible Stock

As of December 31, 2016 and 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 year ended December 31, 2016, the Company redeemed shares of its outstanding common stock as follows (in thousands, except per share data):

Period	Total Number of Shares Redeemed	Average Price Paid per Share
January 2016	150	$10.59
February 2016	—	—
March 2016	196	$10.59
April 2016	47	$10.83
May 2016	—	—
June 2016	1,069	$10.83
July 2016	—	—
August 2016	—	—
September 2016	520	$10.83
October 2016	—	—
November 2016	—	—
December 2016	270	$10.83
	2,252

All redemption requests tendered were honored during the year endedDecember 31, 2016.

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.

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 year endedDecember 31, 2016, the Company paid aggregate distributions of $43.0 million, including $14.5 million of distributions paid in cash and $28.5 million of distributions reinvested in shares of common stock through the Company's 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		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
July 28, 2016	0.05		July 29, 2016	2,359		1,215		3,574
August 30, 2016	0.05		August 31, 2016	2,363		1,222		3,585
September 29, 2016	0.05		September 30, 2016	2,351		1,220		3,571
October 28, 2016	0.05		October 31, 2016	2,348		1,234		3,582
November 29, 2016	0.05		November 30, 2016	2,343		1,249		3,592
December 29, 2016	0.05		December 30, 2016	2,326		1,263		3,589
	$	0.60		$	28,497	$	14,508	$	43,005

Since its formation, the Company has declared a total of seven quarterly stock distributions of 0.015 shares each, two quarterly stock distributions of 0.0075 shares each, one quarterly stock distribution of 0.00585 shares each, and two quarterly stock distributions of 0.005 shares each of its common stock outstanding.

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FAIR VALUE MEASURES AND DISCLOSURES

12 Months Ended

Dec. 31, 2016

Fair Value Disclosures [Abstract]

FAIR VALUE MEASURES AND DISCLOSURES

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.

Derivatives (interest rate caps), which are reported at fair value in the consolidated balance sheets, 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 as follows (in thousands):

	Level 1		Level 2		Level 3		Total
December 31, 2016
Assets:
Interest rate caps	$	—	$	242	$	—	$	242
	$	—	$	242	$	—	$	242
December 31, 2015
Assets:
Interest rate caps	$	—	$	32	$	—	$	32
	$	—	$	32	$	—	$	32

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

	December 31, 2016						December 31, 2015
	Carrying Amount			Fair Value			Carrying Amount			Fair Value
Loan held for investment, net	$	769		$	1,104		$	757		$	1,151
Preferred equity investment	—			—			3,886			3,908
Mortgage notes payable- outstanding borrowings	(627,088		)	(620,578		)	(595,384		)	(573,693		)
Mortgage notes payable- included in other liabilities associated with rental properties held for sale	—			—			(16,443		)	(16,597		)
Credit facility	—			—			(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 a discounted cash flows model and 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 amount because the variable interest rate is considered a market rate (Level 3).

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DERIVATIVES AND HEDGING ACTIVITIES

12 Months Ended

Dec. 31, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVES AND HEDGING ACTIVITIES

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 service 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 13 interest rate caps that were designated as cash flow hedges. 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 years end December 31, 2016 and 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 year ended December 31, 2016, the Company had a loss of $104,941 due to hedge ineffectiveness related to the sales of Nesbit Palisades and Ivy at Clear Creek. During the year ended December 31, 2015, the Company recorded no hedge ineffectiveness in earnings.

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. During the next 12 months, the Company estimates that an additional $147,928will be reclassified as an increase to interest expense.

As of December 31, 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		Maturity Dates
Interest Rate Caps	13	$	270,475	January 1, 2018 to October 1, 2020

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

The table below presents the fair value of the Company’s derivative financial instruments on the consolidated balance sheets as of December 31, 2016 and 2015 (in thousands):

Asset Derivatives						Liability Derivatives
December 31, 2016			December 31, 2015			December 31, 2016			December 31, 2015
Balance Sheet	Fair Value		Balance Sheet	Fair Value		Balance Sheet	Fair Value		Balance Sheet	Fair Value
Prepaid expenses and other assets	$	242	Prepaid expenses and other assets	$	32	—	$	—	—	$	—

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OPERATING EXPENSES

12 Months Ended

Dec. 31, 2016

Operating Expenses [Abstract]

OPERATING EXPENSES

OPERATING EXPENSES

Under its charter, the Company must limit its total operating expenses to the greater 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 December 31, 2016 were in compliance with the charter imposed limitation.

Allocated payroll expense associated with a portion of the compensation paid by the Advisor or its affiliates to the Company’s executive officers was included in general and administrative in the consolidated statements of operations and comprehensive income (loss) and was reimbursed to the Advisor during the years ended December 31, 2016, 2015 and 2014.

Allocated payroll expense from the Manager is included in rental operating expenses in the consolidated statements of operations and comprehensive income (loss). Allocated payroll for the years ended December 31, 2016, 2015, and 2014 was $2.0 million, $1.9 million, and $1.6 million, respectively.

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INSURANCE PROCEEDS IN EXCESS OF COST BASIS

12 Months Ended

Dec. 31, 2016

INSURANCE PROCEEDS IN EXCESS OF COST BASIS [Abstract]

INSURANCE PROCEEDS IN EXCESS OF COST BENEFIT

INSURANCE PROCEEDS IN EXCESS OF COST BASIS

For the year ended December 31, 2016, there were $985,000 of insurance proceeds in excess of cost basis included on the consolidated statements of operations and comprehensive income (loss). The Company received $735,000 of proceeds from insurers, net of expenses, due to incidents at Deerfield, The Westside Apartments, and Chisholm Place in 2016 and $250,000 of proceeds from insurers, net of expenses, due to incidents at Verona Apartment Homes, Skyview Apartment Homes, Meridian Pointe, and Stone Ridge in 2015.

For the year ended December 31, 2015, there were $407,000 of insurance proceeds in excess of cost basis included on the consolidated statements of operations and comprehensive income (loss). The Company received $247,000 of proceeds due to prior owners from insurers, net of expenses, due to an incident at Stone Ridge in 2013 and $160,000 of proceeds from insurers, net of expenses, due to an incident at Chisholm Place in 2014.

For the year ended December 31, 2014, there were $425,000 of insurance proceeds in excess of cost basis included on the consolidated statements of operations and comprehensive income (loss). The Company received $369,000 of proceeds due to prior owners from insurers, net of expenses, due to an incident at Stone Ridge in 2013 and $56,000 of proceeds from insurers, net of expenses, due to an incident at Mosaic in 2013.

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QUARTERLY FINANCIAL DATA (UNAUDITED)

12 Months Ended

Dec. 31, 2016

Quarterly Financial Information Disclosure [Abstract]

Quarterly Financial Data (Unaudited)

QUARTERLY FINANCIAL DATA (UNAUDITED)

The following tables present the Company's operating results by quarter (in thousands, except share data):

Quarterly Results for 2016	March 31			June 30			September 30		December 31
	(unaudited)			(unaudited)			(unaudited)		(unaudited)
Revenues	$	30,556		$	30,721		$	28,575	$	28,515
Net income (loss)	8,480			2,427			9,637		(10,173		)
Less: net (income) loss attributable to noncontrolling interests	(6,281		)	(25		)	—		—
Net income (loss) attributable to common stockholders	2,199			2,402			9,637		(10,173		)
Net income (loss) per common share	$	0.03		$	0.03		$	0.14	$	(0.14	)

Quarterly Results for 2015	March 31			June 30			September 30			December 31
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Revenues	$	27,734		$	28,412		$	30,845		$	31,334
Net income (loss)	17,039			(12,476		)	(10,662		)	(10,834		)
Less: net (income) loss attributable to noncontrolling interests	(11		)	192			43			(186		)
Net income (loss) attributable to common stockholders	17,028			(12,284		)	(10,619		)	(11,020		)
Net income (loss) per common share	$	0.25		$	(0.18	)	$	(0.15	)	$	(0.16	)

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SUBSEQUENT EVENTS

12 Months Ended

Dec. 31, 2016

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

On January 20, 2017, the Company obtained $47.0 million in financing, secured by Providence in the Park.

On January 27, 2017, 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: January 30, 2017, February 27, 2017, and March 30, 2017. Such distributions were or are to be paid on January 31, February 28, and March 31, 2017.

On March 20, 2017, the Company entered into an agreement to sell Mosaic, located in Oklahoma City, Oklahoma for $6.1 million with an expected closing in May 2017. The Company expects to record a gain on sale during the three months ended June 30, 2017.

On March 27, 2017, the Company's board of directors approved $7.5 million of redemption requests from investors.

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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SCHEDULE III Real Estate and Accumulated Depreciation

12 Months Ended

Dec. 31, 2016

SEC Schedule III, Real Estate and Accumulated Depreciation Disclosure [Abstract]

SCHEDULE III Real Estate and Accumulated Depreciation

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC. SCHEDULE III Real Estate and Accumulated Depreciation December 31, 2016 (in thousands)
Column A	Column B		Column C		Column D			Column E		Column F			Column G	Column H	Column I
Description	Encumbrances		Initial cost to Company		Cost capitalized subsequent to acquisition			Gross Amount at which carried at close of period		Accumulated Depreciation			Date of Construction	Date Acquired	Life on which depreciation in latest income is computed
			Buildings and Land Improvements		Improvements Carrying Costs			Buildings and Land Improvements Total
Real estate owned:
Residential	$	15,225	$	11,076	$	4,388		$	15,464	$	(3,952	)	1961	6/17/2011	3 - 27.5 years
Philadelphia, PA
Residential	13,100		8,273		1,567			9,840		(2,126		)	1838	5/13/2011	3 - 27.5 years
Dayton, OH
Residential	53,995		39,341		12,216			51,557		(13,365		)	1966	6/20/2012	3 - 27.5 years
Cincinnati, OH
Residential	—		1,961		4,124			6,085		(1,625		)	1974	12/6/2012	3 - 27.5 years
Oklahoma City, OK
Residential	10,359		9,620		5,185			14,805		(2,492		)	1993	1/22/2013	3 - 27.5 years
Hermantown, MN
Residential	11,375		8,064		3,482			11,546		(2,103		)	1986	4/18/2013	3 - 27.5 years
Hoover, AL
Residential	18,690		26,496		4,087			30,583		(4,963		)	1981	6/24/2013	3 - 27.5 years
Houston, TX
Residential	36,820		31,001		5,044			36,045		(5,082		)	1984	7/25/2013	3 - 27.5 years
Plano, TX
Residential	12,375		17,583		2,562			20,145		(2,961		)	1985	9/9/2013	3 - 27.5 years
Newport News, VA
Residential	32,970		23,321		9,769			33,090		(3,986		)	1985	9/30/2013	3 - 27.5 years
Littleton, CO
Residential	28,400		29,509		(2,122		)	27,387		(3,547		)	1985	9/30/2013	3 - 27.5 years
Westminster, CO
Residential	13,602		21,831		5,809			27,640		(4,353		)	1982	12/16/2013	3 - 27.5 years
San Antonio, TX
Residential (2)	—		32,142		4,218			36,360		(4,369		)	1988	12/20/2013	3 - 27.5 years
Burnsville, MN
Residential (1)	5,227		5,912		2,897			8,809		(1,562		)	1974	1/28/2014	3 - 27.5 years
Columbia, SC
Residential	49,596		69,111		7,796			76,907		(8,495		)	1999	3/28/2014	3 - 27.5 years
Alpharetta, GA

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC. SCHEDULE III Real Estate and Accumulated Depreciation December 31, 2016 (in thousands) (Continued)
Column A	Column B	Column C	Column D	Column E	Column F		Column G	Column H	Column I
Description	Encumbrances	Initial cost to Company	Cost capitalized subsequent to acquisition	Gross Amount at which carried at close of period	Accumulated Depreciation		Date of Construction	Date Acquired	Life on which depreciation in latest income is computed
		Buildings and Land Improvements	Improvements Carrying Costs	Buildings and Land Improvements Total
Residential	27,107	42,001	817	42,818	(5,149	)	2003	5/5/2014	3 - 27.5 years
Baton Rouge, LA
Residential	11,587	14,562	721	15,283	(1,640	)	1981	5/5/2014	3 - 27.5 years
Plano, TX
Residential	17,298	28,911	2,564	31,475	(3,098	)	1995	5/19/2014	3 - 27.5 years
Atlanta, GA
Residential	13,651	21,796	2,603	24,399	(2,392	)	1995	5/19/2014	3 - 27.5 years
Atlanta, GA
Residential	23,367	31,385	2,929	34,314	(3,395	)	2000	6/26/2014	3 - 27.5 years
Katy, TX
Residential	12,893	18,250	1,128	19,378	(2,671	)	1984	7/1/2014	3 - 27.5 years
Shawnee, KS
Residential	6,250	11,898	527	12,425	(1,751	)	1985	7/1/2014	3 - 27.5 years
Lee's Summit, MO
Residential	7,350	9,691	751	10,442	(1,488	)	1983	7/1/2014	3 - 27.5 years
Kansas City, MO
Residential	22,647	34,554	5,238	39,792	(3,148	)	1949	9/4/2014	3 - 27.5 years
San Antonio, TX
Residential	35,083	47,075	5,289	52,364	(4,622	)	1984	9/29/2014	3 - 27.5 years
Irving, TX
Residential	14,999	21,204	396	21,600	(2,326	)	1974	11/25/2014	3 - 27.5 years
Yorktown, VA
Residential	12,435	23,370	4,230	27,600	(1,859	)	1981	2/26/2015	3 - 27.5 years
Austin, TX
Residential	26,280	35,070	4,061	39,131	(2,389	)	1986	3/19/2015	3 - 27.5 years
Gilbert, AZ
Residential	67,500	116,036	3,787	119,823	(4,901	)	1986	6/1/2015	3 - 27.5 years
Orange County, CA
Residential	26,907	50,365	2,066	52,431	(2,000	)	1988	6/16/2015	3 - 27.5 years
Chula Vista, CA

RESOURCE REAL ESTATE OPPORTUNITY REIT, INC. SCHEDULE III Real Estate and Accumulated Depreciation December 31, 2016 (in thousands) (Continued)
Column A	Column B		Column C		Column D			Column E		Column F			Column G	Column H	Column I
Description	Encumbrances		Initial cost to Company		Cost capitalized subsequent to acquisition			Gross Amount at which carried at close of period		Accumulated Depreciation			Date of Construction	Date Acquired	Life on which depreciation in latest income is computed
			Buildings and Land Improvements		Improvements Carrying Costs			Buildings and Land Improvements Total
Residential	—		61,490		(764		)	60,726		$	—		1997	12/22/2016	3 - 27.5 years
Arlington, TX
	$	627,088	$	902,899	$	107,365		$	1,010,264	$	(107,810	)

	Years Ended
	December 31,
	2016			2015			2014
Investments in Rental Properties:
Balance, beginning of the period	$	1,063,211		$	857,151		$	406,149
Acquisitions	61,490			224,841			436,626
Improvements, etc.	28,024			43,018			37,384
Dispositions during the period	(142,461		)	(61,799		)	(23,008		)
Balance, close of the period (3)	$	1,010,264		$	1,063,211		$	857,151
Accumulated depreciation:
Balance, beginning of the period	$	(77,363	)	$	(45,133	)	$	(15,776	)
Sales	12,737			9,031			2,962
Disposals	819			652			478
Depreciation	(44,003		)	(41,913		)	(32,797		)
Balance, close of the period (3)	$	(107,810	)	$	(77,363	)	$	(45,133	)

`

(1)    Acquired an interest in the property on 1/28/2014 with the Paladin merger.

(2)    Rental property held as collateral for the Company's secured credit facility.

(3)    Includes properties held for sale at 12/31/2015

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SCHEDULE IV Mortgage Loans on Real Estate

12 Months Ended

Dec. 31, 2016

Mortgage Loans on Real Estate [Abstract]

SCHEDULE IV Mortgage Loans on Real Estate

SCHEDULE IV

Mortgage Loans on Real Estate

December 31, 2016

(dollars in thousands)

Column A	Column B	Column C	Column D	Column E	Column F		Column G		Column H
Description	Interest rate	Final maturity date	Periodic payment term	Prior liens	Face amount of mortgages		Carrying amount of mortgages		Principal amount of loans subject to delinquent principal or interest
Residential Columbia City, IN	Fixed interest rate of 7.5%	10/28/2021	N/A	N/A	$	1,058	$	769	$	—
					$	1,058	$	769	$	—

	Year Ended
	December 31, 2016
Balance, beginning of the period	$	757
Interest accretion	33
Principal reductions	(21		)
Balance, end of the period	$	769

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2016

Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). 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	N/A
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 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, 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 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")	Point Bonita Apartment Homes	295	Chula Vista, CA
RRE Yorba Linda Holdings, LLC ("Yorba Linda")	Yorba Linda	400	Yorba Linda, CA
RRE Providence Holdings, LLC ("Providence in the Park")	Providence in the Park	524	Arlington, TX
		9,022
Subsidiaries related to disposed investments:
RRE Crestwood Holdings, LLC (“Crestwood”)	(c)(g)	N/A	N/A
PRIP 5060/6310, LLC ("Governor Park")	(c)(g)	N/A	N/A
RRE Campus Club Holdings, LLC (“Campus Club”)	(c)	N/A	N/A
PRIP 6700, LLC ("Hilltop Village")	(c)(g)	N/A	N/A
RRE Westhollow Holdings, LLC (“Westhollow”)	(c)	N/A	N/A
RRE Flagstone Holdings, LLC ("Flagstone")	(d)(g)	N/A	N/A
RRE 107th Avenue Holdings, LLC (“107th Avenue”)	(d)(g)	N/A	N/A
RRE Bristol Holdings, LLC (“Bristol”)	(d)(g)	N/A	N/A
RRE Skyview Holdings, LLC ("Skyview")	(d)(g)	N/A	N/A
RRE Kenwick Canterbury Holdings, LLC ("Kenwick & Canterbury")	(d)	N/A	N/A
RRE Foxwood Holdings, LLC ("Foxwood")	(d)(g)	N/A	N/A
PRIP 3383, LLC ("Conifer Place")	(b)(e)	N/A	N/A
PRIP 3700, LLC ("Champion Farms")	(b)(e)	N/A	N/A
RRE Armand Place Holdings, LLC ("Armand")	(e)(g)	N/A	N/A
RRE Spring Hill Holdings, LLC ("Spring Hill")	(f)	N/A	N/A
RRE Nob Hill Holdings, LLC ("Nob Hill")	(e)	N/A	N/A
PRIP 10637, LLC ("Fieldstone")	(b)(e)	N/A	N/A
RRE Jasmine Holdings, LLC ("Jasmine")	(e)	N/A	N/A

N/A - Not Applicable

(a) Subsidiary transferred its interest in a portion of the Williamsburg parking lot to RRE Williamsburg Holdings, LLC in 2016.

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

(c) Underlying investment sold prior to 2015.

(d) Underlying investment sold in 2015.

(e) Underlying investment sold in 2016.

(f) Underlying investment resolved in 2016.

(g) Subsidiary was dissolved prior to December 31, 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 9).    

(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 9).

(3) On January 27, 2016, the Company and its joint venture partner sold Conifer Place, which resulted in the deconsolidation of the entity as of January 27, 2016. (See Note 9).

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.  This investment was repaid in full on June 6, 2016 and the Company has no further continuing involvement with this investment. Additional information with respect to the preferred equity investment is disclosed in Note 6.

Segment Reporting

Segment Reporting

The Company does not evaluate performance on a relationship specific or transactional basis and does not distinguish its principal business or group its operations on a geographical basis for purposes of measuring performance. Accordingly, the Company believes it has a single operating segment for reporting purposes in accordance with GAAP.

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. The Company had zero and three rental properties, respectively, included in assets held for sale as of December 31, 2016 and 2015.

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 had been reported as held for sale in the December 31, 2015 consolidated balance sheet.

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 have a useful life greater than or equal to one year. 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. These costs are capitalized along with the related asset. Costs of repairs and maintenance are expensed as incurred.

Concentration of Credit Risk

Concentration of Credit Risk

Financial instruments, which potentially subject the Company to concentration of credit risk, consist of periodic temporary deposits of cash. At December 31, 2016, the Company had $125.7 million of deposits at various banks, $112.0 million of which were over the insurance limit of the Federal Deposit Insurance Corporation. No losses have been experienced on such deposits.

As of December 31, 2016, the Company's real estate investments in Texas, Georgia, and California represented approximately 33%, 13%, and 18% of the net book value of its rental property assets, respectively. As a result, the geographic concentration of the Company's portfolio makes it particularly susceptible to adverse economic developments in the Texas, Georgia, and California real estate markets. Any adverse economic or real estate developments in these markets, such as business layoffs or downsizing, industry slowdowns, relocations of businesses, changing demographics and other factors, or any decrease in demand for multifamily rentals resulting from the local business climate, could adversely affect the Company's operating results and its ability to make distributions to stockholders.

Contractual Obligations

Contractual Obligations

The Company leases parking space and equipment under leases with varying expiration dates through 2023.  As of December 31, 2016, the total payments due under these obligations were $299,000.

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 the property for properties 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 losses recorded on long lived assets during the years ended December 31, 2016, 2015 and 2014.

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 investment, included in other investments on the consolidated balance sheets, 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 6).

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

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. The Company tested goodwill as of December 31, 2016 and found no indications of impairment.

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 $56.0 million and $368,000 for the years ending December 31, 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 $325,000, $216,000, $148,000, $80,000, and $15,000 for the years ending December 31, 2017, 2018, 2019, 2020, and 2021, respectively, and none thereafter.

Revenue is primarily derived from the rental of residential housing units, however, included within rental income is 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 $10.8 million, $10.3 million and $7.8 million for the years endedDecember 31, 2016, 2015 and 2014, respectively.

Tenant Receivables

Tenant Receivables

Tenant receivables are stated in the financial statements at 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 December 31, 2016 and 2015, there were allowances for uncollectible receivables of $5,200 and $24,100, respectively.

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 any of its subsidiaries as a taxable REIT subsidiary (“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 December 31, 2016 and 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 2012 and prior.

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 take 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 16) are included in the diluted earnings per share calculations because the necessary conditions for conversion have not been satisfied as of December 31, 2016 (were such date to represent the end of the contingency period).  For the purposes of calculating earnings per share, all common shares and per common share information in the financial statements have been adjusted retroactively for the effect of seven1.5% stock distributions, two0.75% stock distributions, one0.585% stock distribution and two0.5% stock distributions issued to stockholders. Common stock shares issued on the consolidated balance sheets have also been adjusted retroactively for the effect of these 12 distributions.

Reclassifications

Reclassifications

Certain amounts in the prior year financial statements have been reclassified to conform to the current-year presentation. The impact of the reclassifications made to prior year amounts are not material and did not affect net income (loss).

In accordance with the adoption of Financial Accounting Standards Board ("FASB") Accounting Standards Update (“ASU”) No. 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, respectively, 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 from deferred financing costs to prepaid expenses and other assets (See Note 13).

Adoption of New Accounting Standards

Adoption of New Accounting Standards

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. On December 15, 2016, the Company adopted ASU No. 2014-15 and the adoption had no impact on the Company's consolidated financial statements.

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. 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 No. 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 No. 2015-02 and the adoption did not have a significant impact on the Company's consolidated financial statements.

In April 2015, FASB issued ASU No. 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. On January 1, 2016, the Company adopted ASU No. 2015-03. 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. The Company had 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 No. 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. On January 1, 2016, the Company adopted ASU No. 2015-15. Upon adoption, deferred finance costs related to the Company's credit facility were reclassified to prepaid expenses and other assets (See Note 13).     

In September 2015, FASB issued ASU No. 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. On January 1, 2016, the Company adopted ASU No. 2015-16 and the adoption had no impact on the Company's 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. In accordance with the Company’s plan for the adoption of ASU 2014-09, the Company has identified revenue streams and is performing an in-depth review to identify the related performance obligations and to evaluate the impact on the Company’s consolidated financial statements and internal accounting processes and controls. As the majority of the Company’s revenue is derived from lease contracts, the Company does not expect that the adoption of ASU 2014-09 or related amendments and modifications issued by the FASB will have a material impact on its 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 the Company's 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 the Company's consolidated financial statements.

In August 2016, FASB issued ASU No. 2016-15, "Classification of Certain Cash Receipts and Cash Payments", which addresses eight specific cash flow issues with the objective of reducing existing diversity in practice.  ASU No. 2016-25 will be effective for the Company beginning January 1, 2018. Early application is permitted. The Company is evaluating this guidance; however, it does not expect the adoption of ASU No. 2016-15 to have a significant impact on its consolidated cash flows.

In January 2017, FASB issued ASU No. 2017-01, "Business Combinations (Topic 850): Clarifying the Definition of Business", which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of businesses.  ASU No. 2017-01 will be effective for the Company beginning January 1, 2018. Early application is permitted. The Company is evaluating this guidance and assessing the impact of this guidance on its consolidated financial statements.

In January 2017, FASB issued ASU No. 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment", which alters the current goodwill impairment testing procedures to eliminate Step 2. ASU No. 2017-04 will be effective for the Company beginning December 15, 2019. Early application is permitted. The Company is evaluating this guidance and assessing the impact of this guidance on its consolidated financial statements.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 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 9).    

(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 9).

(3) On January 27, 2016, the Company and its joint venture partner sold Conifer Place, which resulted in the deconsolidation of the entity as of January 27, 2016. (See Note 9).

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	N/A
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 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, 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 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")	Point Bonita Apartment Homes	295	Chula Vista, CA
RRE Yorba Linda Holdings, LLC ("Yorba Linda")	Yorba Linda	400	Yorba Linda, CA
RRE Providence Holdings, LLC ("Providence in the Park")	Providence in the Park	524	Arlington, TX
		9,022
Subsidiaries related to disposed investments:
RRE Crestwood Holdings, LLC (“Crestwood”)	(c)(g)	N/A	N/A
PRIP 5060/6310, LLC ("Governor Park")	(c)(g)	N/A	N/A
RRE Campus Club Holdings, LLC (“Campus Club”)	(c)	N/A	N/A
PRIP 6700, LLC ("Hilltop Village")	(c)(g)	N/A	N/A
RRE Westhollow Holdings, LLC (“Westhollow”)	(c)	N/A	N/A
RRE Flagstone Holdings, LLC ("Flagstone")	(d)(g)	N/A	N/A
RRE 107th Avenue Holdings, LLC (“107th Avenue”)	(d)(g)	N/A	N/A
RRE Bristol Holdings, LLC (“Bristol”)	(d)(g)	N/A	N/A
RRE Skyview Holdings, LLC ("Skyview")	(d)(g)	N/A	N/A
RRE Kenwick Canterbury Holdings, LLC ("Kenwick & Canterbury")	(d)	N/A	N/A
RRE Foxwood Holdings, LLC ("Foxwood")	(d)(g)	N/A	N/A
PRIP 3383, LLC ("Conifer Place")	(b)(e)	N/A	N/A
PRIP 3700, LLC ("Champion Farms")	(b)(e)	N/A	N/A
RRE Armand Place Holdings, LLC ("Armand")	(e)(g)	N/A	N/A
RRE Spring Hill Holdings, LLC ("Spring Hill")	(f)	N/A	N/A
RRE Nob Hill Holdings, LLC ("Nob Hill")	(e)	N/A	N/A
PRIP 10637, LLC ("Fieldstone")	(b)(e)	N/A	N/A
RRE Jasmine Holdings, LLC ("Jasmine")	(e)	N/A	N/A

N/A - Not Applicable

(a) Subsidiary transferred its interest in a portion of the Williamsburg parking lot to RRE Williamsburg Holdings, LLC in 2016.

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

(c) Underlying investment sold prior to 2015.

(d) Underlying investment sold in 2015.

(e) Underlying investment sold in 2016.

(f) Underlying investment resolved in 2016.

(g) Subsidiary was dissolved prior to December 31, 2016

Schedule of 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)

12 Months Ended

Dec. 31, 2016

Supplemental Cash Flow Elements [Abstract]

Summary of Supplemental Cash Flow Information

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

	Years Ended
	December 31,
	2016		2015		2014
Non-cash financing and investing activities:
Stock issued from distribution reinvestment plan	$	28,497	$	28,959	$	22,898
Stock distributions issued	—		—		3,333
Deferred financing costs and escrow deposits funded directly by mortgage notes and credit facility	2,619		11,167		4,404
Accrual for construction in progress	1,343		896		947
Non-cash activity related to sales:
Deconsolidation of subsidiary and removal of related mortgage notes payable and noncontrolling interest	35,152		—		—
Mortgage notes payable settled directly with proceeds from sale of rental property	55,720		—		—
Assets and liabilities assumed in acquisitions:
Mortgage notes payable and other liabilities assumed in acquisition of rental property	—		40,284		176,935
Cash paid during the period for:
Interest	$	20,297	$	20,752	$	12,832

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RESTRICTED CASH (Tables)

12 Months Ended

Dec. 31, 2016

Cash and Cash Equivalents [Abstract]

Schedule of Restricted Cash and Cash Equivalents

The following table presents a summary of the components of the Company's restricted cash (in thousands):

	December 31,
	2016		2015
Real estate taxes	$	6,853	$	5,395
Insurance	1,854		1,657
Capital improvements	1,570		2,935
Total	$	10,277	$	9,987

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RENTAL PROPERTIES, NET (Tables)

12 Months Ended

Dec. 31, 2016

Real Estate Investments, Net [Abstract]

Schedule of Investments in Rental Properties

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

	December 31,
	2016			2015
Land	$	176,418		$	180,533
Building and improvements	795,665			775,239
Furniture, fixtures and equipment	32,198			28,928
Construction in progress	5,983			2,949
	1,010,264			987,649
Less: accumulated depreciation	(107,810		)	(71,151		)
	$	902,454		$	916,498

Schedule of Assets and Liabilities

Carrying amounts of major classes of assets and liabilities included in held for sale related to Champion Farms at December 31, 2015 were as follows (in thousands):

Assets:
Rental properties, net	$	25,436
Restricted cash	$	54
Tenant receivables, net	2
Prepaid expenses and other assets	25
Subtotal - other assets associated with rental properties held for sale	$	81
Liabilities:
Mortgage note payable, net	$	16,443
Accounts payable	44
Accrued expenses and other liabilities	176
Tenant prepayments	57
Security deposits	43
Subtotal- other liabilities associated with rental properties held for sale	$	16,763

The following table presents details of our disposition and deconsolidation activity during the years ended December 31, 2016, 2015, and 2014 (in thousands):

Multifamily Community	Location	Sale Date	Contract Sales price		Net Gains on Dispositions of Properties and Joint Venture Interests			Revenues Attributable to Properties Sold		Net Income (Loss) Attributable to Properties Sold
2016 Dispositions:
Conifer Place (1)	Norcoss, Georgia	January 27, 2016	$	42,500	$	9,897		$	365	$	9,942
Champion Farms	Louisville, Kentucky	January 29, 2016	7,590		1,066			220		1,125
The Ivy at Clear Creek	Houston, Texas	February 17, 2016	19,400		6,792			386		6,629
Affinity at Winter Park	Winter Park, Florida	June 9, 2016	17,500		5,605			1,010		5,757
Fieldstone	Woodland, Ohio	June 30, 2016	7,514		4,096			1,548		4,325
The Nesbit Palisades	Alpharetta, Georgia	July 8, 2016	45,500		17,601			2,615		17,739
			$	140,004	$	45,057		$	6,144	$	45,517
2015 Dispositions:
The Alcove Apartments	Houston, Texas	January 26, 2015	$	11,050	$	3,784		$	199	$	3,819
107th Avenue Apartments	Omaha, Nebraska	January 29, 2015	250		50			3		50
The Redford Apartments	Houston, Texas	February 27, 2015	32,959		15,303			1,274		15,652
Cityside Apartments	Houston, Texas	March 2, 2015	24,500		10,028			701		10,290
One Hundred Chevy Chase	Lexington, Kentucky	June 30, 2015	13,500		4,386			828		4,027
The Reserve at Mt. Moriah	Memphis, Tennessee	September 18, 2015	5,425		2,490			1,135		2,202
			$	87,684	$	36,041		$	4,140	$	36,040
2014 Dispositions:
Governor Park	San Diego, California	March 6, 2014	$	456	$	—		$	—	$	—
Campus Club	Tampa, Florida	June 16, 2014	10,500		2,602			849		2,723
Hilltop Village (2)	Kansas City, Missouri	July 1, 2014	—		(493		)	352		(707		)
Arcadia at Westheimer	Houston, Texas	September 19, 2014	18,100		8,375			2,667		8,407
			$	29,056	$	10,484		$	3,868	$	10,423

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

(2)    Net income (loss) attributable to properties sold presented includes $112,000 attributable to noncontrolling interests.

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LOANS HELD FOR INVESTMENT, NET (Tables)

12 Months Ended

Dec. 31, 2016

LOANS HELD FOR INVESTMENT, NET [Abstract]

Aging of Loans Held for Investment

The following table presents the aging of the Trail Ridge Note, the Company’s remaining loan held for investment (in thousands), which is included in other investments on the consolidated balance sheets:

	December 31,
	2016		2015
Current	$	769	$	757
Delinquent:
30−89 days	—		—
90−180 days	—		—
Greater than 180 days	—		—
	$	769	$	757

Credit Quality of Loans Held for Investment

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

	December 31,
	2016		2015
Loans:
Performing	$	769	$	757
Nonperforming	—		—
Total	$	769	$	757

Terms of Loans Held for Investment

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

	December 31,
	2016			2015
Unpaid principal balance	$	960		$	981
Unamortized discount	(198		)	(231		)
Deferred expenses, net	7			7
Net book value	$	769		$	757
Maturity date	10/28/2021
Interest rate	7.5		%
Average monthly payment	$	8

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ACQUISITIONS AND FORECLOSURES (Tables)

12 Months Ended

Dec. 31, 2016

Business Combinations [Abstract]

Summary of Fair Value and Purchase Price Allocation

The table below summarizes these acquisitions and the respective fair values assigned, excluding non-wholly owned properties acquired through the Paladin merger (dollars in thousands):

Multifamily Community Name	City and State	Date of Acquisition	Contractual Purchase Price (1)			Land		Building and Improvements		Furniture, Fixtures and Equipment		Intangible Assets		Other Assets		Liabilities			Fair Valued Assigned
Providence in the Park	Arlington, TX	12/22/2016	$	63,200		$	7,398	$	53,270	$	822	$	1,710	$	83	$	(214	)	$	63,069
Point Bonita Apartment Homes	Chula Vista, CA	6/16/2015	49,050			17,208		32,651		506		1,130		9		(30,008		)	21,496
Yorba Linda	Yorba Linda, CA	6/1/2015	118,000			39,322		76,124		590		1,964		76		(232		)	117,844
Heritage Pointe	Gilbert, AZ	3/19/2015	36,000			8,487		25,867		716		931		—		(152		)	35,849
South Lamar Village	Austin, TX	2/26/2015	24,000			5,586		17,493		291		629		—		(12,961		)	11,038
Pines of York	Yorktown, VA	1/28/2014	8,087		(2)	4,464		16,340		400		715		416		(15,447		)	6,888
Calloway at Las Colinas	Irving, TX	9/29/2014	48,500			6,707		39,543		825		1,425		9		(636		)	47,873

Sunset Ridge	San Antonio, TX	9/4/2014	35,000		15,425	18,615	514	931	—	(24,737	)	10,748
Pinehurst	Kansas City, MO	1/28/2014	3,588	(3)	1,250	8,241	200	290	142	(4,548	)	5,575
Pheasant Run	Lee's Summit, MO	1/28/2014	4,277	(3)	800	10,798	300	317	172	(6,559	)	5,828
Retreat at Shawnee	Shawnee, KS	1/28/2014	5,369	(3)	3,200	14,550	500	608	186	(14,088	)	4,956
Aston at Cinco Ranch	Katy, TX	6/26/2014	32,300		5,831	25,247	307	915	—	(377	)	31,923
Perimeter 5550	Atlanta, GA	5/19/2014	22,250		4,002	17,600	194	453	—	(110	)	22,139
Perimeter Circle	Atlanta, GA	5/19/2014	29,500		4,723	23,969	219	588	—	(156	)	29,343
Chisholm Place	Plano, TX	5/5/2014	15,000		1,981	12,383	198	438	—	(96	)	14,904
Evergreen at Coursey	Baton Rouge, LA	1/28/2014	15,499	(4)	3,430	38,041	530	1,080	680	(28,844	)	14,917
The Estates at Johns Creek	Alpharetta, GA	3/28/2014	70,500		6,353	62,249	509	1,389	49	(392	)	70,157
Meridian Pointe	Burnsville, MN	12/20/2013	33,149		4,134	26,992	1,016	1,008	36	(107	)	33,079
Maxwell Townhomes	San Antonio, TX	12/16/2013	22,500		3,830	17,510	491	669	48	(14,363	)	8,185
The Nesbit Palisades	Alpharetta, GA	10/25/2013	25,050		7,582	16,023	587	859	37	(161	)	24,927
Verona Apartment Homes	Littleton, CO	9/30/2013	30,600		5,702	23,609	198	1,090	24	(190	)	30,433
Skyview Apartment Homes	Westminster, CO	9/30/2013	24,250		2,923	20,301	97	928	20	(147	)	24,122
Tech Center Square	Newport News, VA	9/9/2013	18,250		3,951	13,048	584	667	23	(59	)	18,214
The Westside Apartments	Plano, TX	7/25/2013	32,200		5,785	24,418	798	1,199	52	(317	)	31,935
Affinity at Winter Park	Winter Park, FL	6/27/2013	10,100		2,512	6,459	523	606	50	(61	)	10,089
Trailpoint at the Woodlands	Spring, TX	6/24/2013	27,200		3,785	22,014	697	704	40	(170	)	27,070
Retreat at Rocky Ridge	Hoover, AL	4/18/2013	8,500		1,616	6,418	30	436	2	(89	)	8,413
Ivy at Clear Creek	Houston, TX	3/28/2013	11,750		1,877	9,175	28	670	8	(127	)	11,631
Deerfield	Hermantown MN	3/21/2012	10,300	(5)	1,660	11,110	500	423	1	(4	)	13,690
Mosaic	Oklahoma City, OK	12/6/2012	2,050		1,000	2,609	30	123	14	(14	)	3,762
Williamsburg Apartments	Cincinnati, OH	6/20/2012	41,250		3,223	35,111	1,007	1,909	49	(274	)	41,025
Cannery Lofts	Dayton, OH	5/13/2011	7,100	(6)	160	7,913	200	609	35	—		8,917
Vista Apartment Homes	Philadelphia, PA	6/17/2011	12,000	(7)	1,163	9,913	—	535	530	(141	)	12,000

(1) Contractual purchase price excludes closing costs, acquisition expenses, and other immaterial settlement date adjustments and pro-rations. For properties acquired through foreclosure, the purchase price reflects the contract purchase price of the note.

(2) The Company originally acquired a 90% interest in the joint venture that owned Pines of York on January 28, 2014. On November 25, 2014, the Company purchased the remaining 10% ownership interest of its joint venture partner, bringing the Company's ownership percentage to 100%.

(3) The Company originally acquired a 97.5% interest in each of the joint ventures that owned Pinehurst, Pheasant Run and Retreat at Shawnee on January 28, 2014. On July 1, 2014, the Company purchased the remaining 2.5% ownership interest of its joint venture partner in each entity, bringing the Company's ownership percentage in each entity to 100%.

(4) The Company originally acquired a 51.7% interest in the joint venture that owned Evergreen at Coursey on January 28, 2014. On March 31, 2014, the Company purchased the remaining 48.3% ownership interest of its joint venture partner, bringing the Company's ownership percentage to 100%.

(5) Deerfield originally served as the collateral for a non-performing note that the Company purchased on March 21, 2012. On July 19, 2012, the Company was the successful bidder at a foreclosure sale and formally received title to the property on January 22, 2013. The date of acquisition reflects the date the Company acquired the note.

(6) Cannery Lofts originally served as the collateral for a non-performing note that the Company purchased on May 13, 2011. On December 21, 2011, the Company entered into a settlement agreement with the borrower and, subsequently, the Company foreclosed and formally received title to the property on June 6, 2012. The date of acquisition reflects the date the Company acquired the note.

(7) Vista Apartment Homes, formerly known as Iroquois Apartments, originally served as the collateral for a non-performing promissory note that the Company purchased on June 17, 2011. On August 2, 2011, the Company was the successful bidder at a sheriff's sale and formally received title to the property.

The allocation of the purchase price for the interests in the 11 Paladin joint ventures, which was completed during the year ended December 31, 2014, is included below (in thousands):

Multifamily Community Name	Land		Building and Improvements		Intangible Assets		Fair Value of Property		Other Assets		Liabilities			Noncontrolling Interest			Total Company Equity		Goodwill		Allocation of Purchase Price
Champion Farms	$	3,168	$	23,464	$	579	$	27,211	$	575	$	(17,015	)	$	(3,231	)	$	7,540	$	171	$	7,711
Fieldstone	1,420		18,472		648		20,540		661		(16,462		)	(806		)	3,933		130		4,063
Pinehurst	1,250		8,241		290		9,781		332		(4,548		)	(139		)	5,426		72		5,498
Pheasant Run	800		10,798		317		11,915		472		(6,559		)	(146		)	5,682		76		5,758
Retreat at Shawnee	3,200		14,550		608		18,358		686		(14,088		)	(124		)	4,832		117		4,949
Hilltop Village	800		4,289		195		5,284		267		(4,612		)	(479		)	460		33		493
Conifer Place	5,040		28,712		1,007		34,759		749		(28,776		)	(3,869		)	2,863		219		3,082
Stone Ridge	1,300		4,612		326		6,238		985		(178		)	(2,218		)	4,827		42		4,869
Evergreen at Coursey Place	3,430		38,041		1,080		42,551		1,210		(28,844		)	(7,200		)	7,717		268		7,985
Pines of York	4,464		16,340		715		21,519		816		(15,446		)	(689		)	6,200		136		6,336
	$	24,872	$	167,519	$	5,765	$	198,156	$	6,753	$	(136,528	)	$	(18,901	)	$	49,480	$	1,264	$	50,744
Governor Park (sold March 6, 2014)																					456
Total purchase price																					$	51,200

On March 31, 2014, the Company purchased the remaining 48.3% ownership interest in Evergreen at Coursey Place ("Coursey Place") from its joint venture partner for $7.5 million. A summary of the transaction is as follows (in thousands):

Purchase price	$	7,500
Noncontrolling interest assumed	$	7,200
Losses attributable to noncontrolling interest	(191		)
Distribution to noncontrolling interest	(116		)
Adjusted noncontrolling interest balance	6,893
Adjustment to additional paid in capital	$	(607	)

On July 1, 2014, the Company purchased the remaining 2.5% ownership interest in Pinehurst, Pheasant Run and Retreat at Shawnee from its joint venture partner for a total of $1.1 million. A summary of the transactions is as follows (in thousands):

	Pinehurst			Pheasant Run			Retreat at Shawnee
Purchase price	$	570		$	515		$	15
Noncontrolling interests assumed	139			146			124
Losses attributable to noncontrolling interests	(7		)	(8		)	(15		)
Adjusted noncontrolling interest balance	132			138			109
Adjustment to additional paid in capital	$	(438	)	$	(377	)	$	94

A summary of the transaction is as follows (in thousands):

	Pines of York
Purchase price	$	900
Noncontrolling interests assumed	690
Losses attributable to noncontrolling interests	(98		)
Adjusted noncontrolling interest balance	592
Adjustment to additional paid in capital	$	(308	)

Schedule of Supplemental Pro Forma Financial Information

The supplemental pro forma financial information set forth below is based upon historical financial statements giving effect to the Yorba Linda acquisition as of the beginning of the period presented (in thousands):

	For the Year Ended
	December 31, 2014
	(unaudited)
Revenues	108,005
Net loss attributable to common stockholders	(50,043		)
Basic and diluted net loss per share	$	(0.74	)

Schedule of Acquisitions

The names of each community, location and the Company's joint venture ownership interests on the date of acquisition are presented below:    

Multifamily Community Name	City and State	Ownership % at Date of Acquisition
Champion Farms	Louisville, KY	70.0%
Fieldstone	Woodlawn, OH	83.0%
Pinehurst	Kansas City, MO	97.5%
Pheasant Run	Lee's Summit, MO	97.5%
Retreat at Shawnee	Shawnee, KS	97.5%
Hilltop Village	Kansas City, MO	49.0%
Conifer Place	Norcross, GA	42.5%
Stone Ridge	Columbia, SC	68.5%
Evergreen at Coursey Place	Baton Rouge, LA	51.7%
Pines of York	Yorktown, VA	90.0%
Governor Park (sold March 6, 2014)	San Diego, CA	47.65%

The tables below present the total revenues, net loss, and acquisition costs of the Company's acquisitions during the year ended December 31, 2016, 2015, and 2014 (dollars in thousands):

Multifamily Community	Total Revenues		Net Loss			Acquisition Costs
2016 Acquisitions:
Providence in the Park	$	193	$	(781	)	$	(1,509	)
Various properties	—		—			(73		)	(1	)
	$	193	$	(781	)	$	(1,582	)

Multifamily Community	Total Revenues		Net Loss			Acquisition Costs
2015 Acquisitions:
South Lamar Village	$	2,086	$	(1,580	)	$	(692	)
Heritage Pointe	3,019		(2,173		)	(1,005		)
Yorba Linda	4,584		(3,405		)	(2,761		)
Point Bonita Apartment Homes	2,431		(2,144		)	(1,353		)
	$	12,120	$	(9,302	)	$	(5,811	)

Multifamily Community	Total Revenues		Net Loss			Acquisition Costs
2014 Acquisitions:
South Lamar Village (2)	$	—	$	—		$	(66	)
Calloway at Las Colinas	1,445		(1,234		)	(1,290		)
Sunset Ridge	1,214		(1,216		)	(968		)
Aston at Cinco Ranch	1,718		(1,144		)	(832		)
Perimeter 5550	1,172		(1,024		)	(606		)
Perimeter Circle	1,501		(1,272		)	(748		)
Chisholm Place	1,196		(1,042		)	(494		)
The Estates at Johns Creek	4,828		(3,287		)	(1,720		)
Paladin Properties	22,645		(10,190		)	(3,109		)
	$	35,719	$	(20,409	)	$	(9,833	)

(1) Acquisition fees paid in 2016 related to additional investments in properties to fund additional capital reserves.

(2) Acquisition that was completed during the first quarter of fiscal 2015.

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MEASUREMENT PERIOD ADJUSTMENTS (Tables)

12 Months Ended

Dec. 31, 2016

Accounting Changes and Error Corrections [Abstract]

Schedule of Measurement Period Adjustments

Changes in the Paladin and the Estates at Johns Creek acquisitions are reflected in the tables below (in thousands):

Paladin

	January 28, 2014 (As initially reported)			Measurement period adjustment (1)			January 28, 2014 (As adjusted)
Land	$	44,292		$	(19,420	)	$	24,872
Building	149,155			18,364			167,519
Personal property	—			3,530			3,530
Intangible assets	5,861			(96		)	5,765
Other assets	3,231			(9		)	3,222
Goodwill	6,412			(5,148		)	1,264
Liabilities	(140,970		)	4,442			(136,528		)
Total net identifiable net assets	$	67,981		$	1,663		$	69,644

(1) Remaining balance ($1.7 million) of measurement period adjustments impacted the noncontrolling interest balance.

The results of operations for the three months ended June 30, 2014 include an additional $867,000 of depreciation and amortization that would have been included in the three months ended March 31, 2014 had the final appraisals for the Paladin properties been received and recorded during that period.

Estates at Johns Creek

	March 28, 2014 (As initially reported)		Measurement period adjustment			March 28, 2014 (As adjusted)
Land	$	18,137	$	(11,784	)	$	6,353
Building	51,843		10,406			62,249
Personal property	—		509			509
Intangible assets	520		869			1,389
Total net identifiable net assets	$	70,500	$	—		$	70,500

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DISPOSITION OF PROPERTIES AND DECONSOLIDATION OF INTERESTS (Tables)

12 Months Ended

Dec. 31, 2016

Discontinued Operations and Disposal Groups [Abstract]

Results of Discontinued Operations

Carrying amounts of major classes of assets and liabilities included in held for sale related to Champion Farms at December 31, 2015 were as follows (in thousands):

Assets:
Rental properties, net	$	25,436
Restricted cash	$	54
Tenant receivables, net	2
Prepaid expenses and other assets	25
Subtotal - other assets associated with rental properties held for sale	$	81
Liabilities:
Mortgage note payable, net	$	16,443
Accounts payable	44
Accrued expenses and other liabilities	176
Tenant prepayments	57
Security deposits	43
Subtotal- other liabilities associated with rental properties held for sale	$	16,763

The following table presents details of our disposition and deconsolidation activity during the years ended December 31, 2016, 2015, and 2014 (in thousands):

Multifamily Community	Location	Sale Date	Contract Sales price		Net Gains on Dispositions of Properties and Joint Venture Interests			Revenues Attributable to Properties Sold		Net Income (Loss) Attributable to Properties Sold
2016 Dispositions:
Conifer Place (1)	Norcoss, Georgia	January 27, 2016	$	42,500	$	9,897		$	365	$	9,942
Champion Farms	Louisville, Kentucky	January 29, 2016	7,590		1,066			220		1,125
The Ivy at Clear Creek	Houston, Texas	February 17, 2016	19,400		6,792			386		6,629
Affinity at Winter Park	Winter Park, Florida	June 9, 2016	17,500		5,605			1,010		5,757
Fieldstone	Woodland, Ohio	June 30, 2016	7,514		4,096			1,548		4,325
The Nesbit Palisades	Alpharetta, Georgia	July 8, 2016	45,500		17,601			2,615		17,739
			$	140,004	$	45,057		$	6,144	$	45,517
2015 Dispositions:
The Alcove Apartments	Houston, Texas	January 26, 2015	$	11,050	$	3,784		$	199	$	3,819
107th Avenue Apartments	Omaha, Nebraska	January 29, 2015	250		50			3		50
The Redford Apartments	Houston, Texas	February 27, 2015	32,959		15,303			1,274		15,652
Cityside Apartments	Houston, Texas	March 2, 2015	24,500		10,028			701		10,290
One Hundred Chevy Chase	Lexington, Kentucky	June 30, 2015	13,500		4,386			828		4,027
The Reserve at Mt. Moriah	Memphis, Tennessee	September 18, 2015	5,425		2,490			1,135		2,202
			$	87,684	$	36,041		$	4,140	$	36,040
2014 Dispositions:
Governor Park	San Diego, California	March 6, 2014	$	456	$	—		$	—	$	—
Campus Club	Tampa, Florida	June 16, 2014	10,500		2,602			849		2,723
Hilltop Village (2)	Kansas City, Missouri	July 1, 2014	—		(493		)	352		(707		)
Arcadia at Westheimer	Houston, Texas	September 19, 2014	18,100		8,375			2,667		8,407
			$	29,056	$	10,484		$	3,868	$	10,423

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

(2)    Net income (loss) attributable to properties sold presented includes $112,000 attributable to noncontrolling interests.

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IDENTIFIED INTANGIBLE ASSETS, NET (Tables)

12 Months Ended

Dec. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Expected Amortization of Rental and Antennae Leases

Expected amortization for the rental and antennae leases for the next five years ending December 31, and thereafter, is as follows (in thousands): 

2017	$	1,726
2018	16
2019	16
2020	16
2021	16
Thereafter	65
	$	1,855

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GOODWILL (Tables)

12 Months Ended

Dec. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

The following table presents a rollforward of the Company's activity in goodwill for the years ended December 31, 2016 and 2015 (in thousands):

Balance, January 1, 2015	$	1,231
Activity - 2015	—
Balance, December 31, 2015	$	1,231
Activity - 2016: Sale of Conifer Place, Champion Farms, and Fieldstone	(520		)
Balance, December 31, 2016	$	711

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MORTGAGE NOTES PAYABLE, NET (Tables)

12 Months Ended

Dec. 31, 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):

	December 31, 2016										December 31, 2015
	Outstanding borrowings		Premium (Discount)			Deferred finance costs, net			Carrying Value		Outstanding borrowings		Premium (Discount)			Deferred finance costs, net			Carrying Value
Collateral
Vista Apartment Homes	$	15,225	$	—		$	(178	)	$	15,047	$	15,573	$	—		$	(216	)	$	15,357
Cannery Lofts	13,100		—			(197		)	12,903		8,148		—			(131		)	8,017
Deerfield	10,359		—			(125		)	10,234		10,517		—			(159		)	10,358
Ivy at Clear Creek	—		—			—			—		8,431		—			(136		)	8,295
Trailpoint at the Woodlands	18,690		—			(222		)	18,468		19,013		—			(257		)	18,756
Verona Apartment Homes	32,970		—			(532		)	32,438		22,402		—			(179		)	22,223
Skyview Apartment Homes	28,400		—			(462		)	27,938		18,089		—			(148		)	17,941
The Nesbit Palisades	—		—			—			—		20,298		—			(309		)	19,989
Maxwell Townhomes	13,602		—			(137		)	13,465		13,850		—			(167		)	13,683
Fieldstone	—		—			—			—		15,332		—			(37		)	15,295
Pinehurst	7,350		—			(154		)	7,196		4,111		—			—			4,111
Pheasant Run	6,250		43			(9		)	6,284		6,250		100			(20		)	6,330
Retreat of Shawnee	12,893		85			(23		)	12,955		13,090		164			(44		)	13,210
Conifer Crossing	—		—			—			—		27,074		—			—			27,074
Evergreen at Coursey Place	27,107		100			(96		)	27,111		27,548		123			(120		)	27,551
Pines of York	14,999		(299		)	(56		)	14,644		15,267		(363		)	(69		)	14,835
Estates at Johns Creek	49,596		—			(405		)	49,191		50,000		—			(526		)	49,474
Chisholm Place	11,587		—			(143		)	11,444		11,587		—			(163		)	11,424
Perimeter Circle	17,298		—			(143		)	17,155		17,657		—			(202		)	17,455
Perimeter 5550	13,651		—			(118		)	13,533		13,935		—			(167		)	13,768
Aston at Cinco Ranch	23,367		—			(268		)	23,099		23,772		—			(328		)	23,444
Sunset Ridge 1	19,699		259			(205		)	19,753		20,121		329			(261		)	20,189
Sunset Ridge 2	2,948		35			(26		)	2,957		3,002		45			(34		)	3,013
Calloway at Las Colinas	35,083		—			(306		)	34,777		35,740		—			(372		)	35,368
South Lamar Village	12,435		—			(131		)	12,304		12,682		—			(184		)	12,498
Heritage Pointe	26,280		—			(327		)	25,953		26,280		—			(370		)	25,910
Yorba Linda	67,500		—			(661		)	66,839		67,500		—			(860		)	66,640
Point Bonita Apartment Homes	26,907		1,966			(338		)	28,535		27,265		2,276			(391		)	29,150
Stone Ridge	5,227		—			(130		)	5,097		5,350		—			(153		)	5,197
The Westside Apartments	36,820		—			(448		)	36,372		23,000		—			(351		)	22,649
Tech Center Square	12,375		—			(196		)	12,179		12,500		—			(159		)	12,341
Williamsburg	53,995		—			(828		)	53,167		—		—			—			—
Retreat at Rocky Ridge	11,375		—			(261		)	11,114		—		—			—			—
	$	627,088	$	2,189		$	(7,125	)	$	622,152	$	595,384	$	2,674		$	(6,513	)	$	591,545

The following table presents additional information about the Company's mortgage notes payable, net, at December 31, 2016 (in thousands, except percentages):

Collateral	Maturity Date	Margin over LIBOR	Annual Interest Rate			Average Monthly Debt Service		Average Monthly Escrow
Vista Apartment Homes	1/1/2022	2.29%	3.06	%	(1)(5)	$	67	$	16
Cannery Lofts	11/1/2023	2.54%	3.31	%	(1)(3)(6)	46		40
Deerfield	11/1/2020	—	4.66	%	(2)(5)	54		29
Trailpoint at the Woodlands	11/1/2023	2.41%	3.18	%	(1)(4)	74		67
Verona Apartment Homes	10/1/2026	2.36%	3.13	%	(1)(3)(6)	116		38
Skyview Apartment Homes	10/1/2026	2.36%	3.13	%	(1)(3)(6)	100		22
Maxwell Townhomes	1/1/2022	—	4.32	%	(2)(5)	71		63
Pinehurst	11/1/2023	2.42%	3.19	%	(1)(3)(6)	30		15
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
Estates at Johns Creek	7/1/2020	—	3.38	%	(2)(5)	221		102
Chisholm Place	6/1/2024	2.39%	3.16	%	(1)(3)	43		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	1.88%	2.65	%	(1)(3)	98		44
Yorba Linda	6/1/2020	1.75%	2.52	%	(1)(3)	180		—
Point Bonita Apartment Homes	10/1/2023	—	5.33	%	(2)(5)	152		38
Stone Ridge	12/1/2022	1.86%	2.63	%	(1)(5)	21		17
The Westside Apartments	9/1/2026	2.12%	2.89	%	(1)(3)(6)	137		68
Tech Center Square	6/1/2023	2.58%	3.35	%	(1)(5)(6)	55		25
Williamsburg	1/1/2024	2.38%	3.15	%	(1)(3)(7)	202		123
Retreat at Rocky Ridge	1/1/2024	2.46%	3.23	%	(1)(3)(7)	43		22

(1) Variable rate based on one-month LIBOR of 0.77167% (as of December 31, 2016) plus applicable 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) Refinanced during the year ended December 31, 2016.

(7) New debt placed during the year ended December 31, 2016.

Schedule of Annual Principal Payments on the Mortgage Notes Payable

Annual principal payments on the mortgage notes payable for each of the next five years ending December 31 and thereafter are as follows (in thousands):

2017	$	12,978
2018	20,456
2019	50,908
2020	150,951
2021	99,121
Thereafter	292,674
	$	627,088

Estimated Amortization Of Deferred Financing Costs

Estimated amortization of the existing deferred financing costs for the next five years ending December 31, are as follows (in thousands):

2017	$	1,414
2018	1,353
2019	1,251
2020	972
2021	719
Thereafter	1,416
	$	7,125

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CREDIT FACILITY (Tables)

12 Months Ended

Dec. 31, 2016

Line of Credit Facility [Abstract]

Summary of Credit Facilities

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

	Balance Outstanding at		Current Availability at		Balance Outstanding at						Weighted Average Interest Rate for the Year Ended
Lender	December 31, 2016				December 31, 2015		Maturity Date	Interest Rate Basis	Current Interest Rate (1)		December 31, 2016		December 31, 2015
Bank of America	$	—	$	13,280	$	21,894	5/23/2017	LIBOR plus 3%	3.77	%	3.44	%	3.26	%

(1) Variable rate based on one-month LIBOR of 0.77167% (as of December 31, 2016).

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ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables)

12 Months Ended

Dec. 31, 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 years ended December 31, 2016, 2015, and 2014 (dollars in thousands):

Balance, January 1, 2014	$	20
Unrealized loss on designated derivatives	(286		)
Balance, December 31, 2014	(266		)
Unrealized loss on designated derivatives	(174		)
Balance, December 31, 2015	(440		)
Reclassification adjustment for realized loss on designated derivatives	105
Unrealized loss on designated derivatives	(10		)
Balance, December 31, 2016	$	(345	)

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS (Tables)

12 Months Ended

Dec. 31, 2016

Related Party Transactions [Abstract]

Summary of Fees Earned From/Expenses Paid to Related Parties

The fees earned / expenses paid and the amounts payable to such related parties are summarized in the following tables (in thousands):

	As of December 31,
	2016		2015
Receivables from related parties:
RAI and affiliates	$	1,375	$	1,421
Payables to related parties:
Advisor:
Operating expense reimbursements	$	1,285	$	286
Manager:
Property management fees	456		440
Operating expense reimbursements	314		459
	$	2,055	$	1,185

	Years Ended
	December 31,
	2016		2015		2014
Fees earned / expenses paid to related parties:
Advisor:
Acquisition fees (1)	$	1,452	$	5,179	$	8,591
Asset management fees (2)	10,484		10,240		7,262
Disposition fees (3)	686		1,140		422
Debt financing fees (4)	532		697		1,623
Overhead allocation (5)	5,621		3,733		2,227
Internal audit fees (5)	44		41		—
Manager :
Property management fees (2)	$	5,137	$	4,748	$	3,661
Construction management fees (6)	926		1,895		1,685
Information technology fees (5)	418		365		306
Operating expense reimbursements (7)	245		278		276
Debt servicing fees (2)	15		33		8
Other:
Ledgewood	$	121	$	169	$	143
Graphic Images	91		59		37

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

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

(3) Included in Net gains on dispositions of properties and joint venture interests on the consolidated statements of operations and comprehensive income (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 income (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 income (loss). Amount excludes the allocated payroll expenses described in Note 20- Operating Expenses.

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EQUITY (Tables)

12 Months Ended

Dec. 31, 2016

Equity [Abstract]

Schedule of Shares Issued

As of December 31, 2016, the Company had issued an aggregate of 74,975,022 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	9,078,068		91,389
Shares issued in conjunction with the Advisor's initial investment, net of 4,500 share conversion	15,500		155
Total	74,975,022		$	726,203
Shares redeemed and retired	(2,968,433	)
Total shares outstanding as of December 31, 2016	72,006,589

(1)    Includes 276,056 shares held by the Advisor.

Schedule of Redeemed Shares

During the year ended December 31, 2016, the Company redeemed shares of its outstanding common stock as follows (in thousands, except per share data):

Period	Total Number of Shares Redeemed	Average Price Paid per Share
January 2016	150	$10.59
February 2016	—	—
March 2016	196	$10.59
April 2016	47	$10.83
May 2016	—	—
June 2016	1,069	$10.83
July 2016	—	—
August 2016	—	—
September 2016	520	$10.83
October 2016	—	—
November 2016	—	—
December 2016	270	$10.83
	2,252

Schedule of Distributions

For the year endedDecember 31, 2016, the Company paid aggregate distributions of $43.0 million, including $14.5 million of distributions paid in cash and $28.5 million of distributions reinvested in shares of common stock through the Company's 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		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
July 28, 2016	0.05		July 29, 2016	2,359		1,215		3,574
August 30, 2016	0.05		August 31, 2016	2,363		1,222		3,585
September 29, 2016	0.05		September 30, 2016	2,351		1,220		3,571
October 28, 2016	0.05		October 31, 2016	2,348		1,234		3,582
November 29, 2016	0.05		November 30, 2016	2,343		1,249		3,592
December 29, 2016	0.05		December 30, 2016	2,326		1,263		3,589
	$	0.60		$	28,497	$	14,508	$	43,005

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FAIR VALUE MEASURES AND DISCLOSURES (Tables)

12 Months Ended

Dec. 31, 2016

Fair Value Disclosures [Abstract]

Schedule of Assets at Fair Value Measured on 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 as follows (in thousands):

	Level 1		Level 2		Level 3		Total
December 31, 2016
Assets:
Interest rate caps	$	—	$	242	$	—	$	242
	$	—	$	242	$	—	$	242
December 31, 2015
Assets:
Interest rate caps	$	—	$	32	$	—	$	32
	$	—	$	32	$	—	$	32

Schedule of Carrying Value and Fair Value Amounts

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

	December 31, 2016						December 31, 2015
	Carrying Amount			Fair Value			Carrying Amount			Fair Value
Loan held for investment, net	$	769		$	1,104		$	757		$	1,151
Preferred equity investment	—			—			3,886			3,908
Mortgage notes payable- outstanding borrowings	(627,088		)	(620,578		)	(595,384		)	(573,693		)
Mortgage notes payable- included in other liabilities associated with rental properties held for sale	—			—			(16,443		)	(16,597		)
Credit facility	—			—			(21,894		)	(21,894		)

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DERIVATIVES AND HEDGING ACTIVITIES (Tables)

12 Months Ended

Dec. 31, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Outstanding Interest Rate Derivatives

As of December 31, 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		Maturity Dates
Interest Rate Caps	13	$	270,475	January 1, 2018 to October 1, 2020

Fair Value and Balance Sheet Location of Derivatives

The table below presents the fair value of the Company’s derivative financial instruments on the consolidated balance sheets as of December 31, 2016 and 2015 (in thousands):

Asset Derivatives						Liability Derivatives
December 31, 2016			December 31, 2015			December 31, 2016			December 31, 2015
Balance Sheet	Fair Value		Balance Sheet	Fair Value		Balance Sheet	Fair Value		Balance Sheet	Fair Value
Prepaid expenses and other assets	$	242	Prepaid expenses and other assets	$	32	—	$	—	—	$	—

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QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables)

12 Months Ended

Dec. 31, 2016

Quarterly Financial Information Disclosure [Abstract]

Quarterly Financial Information

The following tables present the Company's operating results by quarter (in thousands, except share data):

Quarterly Results for 2016	March 31			June 30			September 30		December 31
	(unaudited)			(unaudited)			(unaudited)		(unaudited)
Revenues	$	30,556		$	30,721		$	28,575	$	28,515
Net income (loss)	8,480			2,427			9,637		(10,173		)
Less: net (income) loss attributable to noncontrolling interests	(6,281		)	(25		)	—		—
Net income (loss) attributable to common stockholders	2,199			2,402			9,637		(10,173		)
Net income (loss) per common share	$	0.03		$	0.03		$	0.14	$	(0.14	)

Quarterly Results for 2015	March 31			June 30			September 30			December 31
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Revenues	$	27,734		$	28,412		$	30,845		$	31,334
Net income (loss)	17,039			(12,476		)	(10,662		)	(10,834		)
Less: net (income) loss attributable to noncontrolling interests	(11		)	192			43			(186		)
Net income (loss) attributable to common stockholders	17,028			(12,284		)	(10,619		)	(11,020		)
Net income (loss) per common share	$	0.25		$	(0.18	)	$	(0.15	)	$	(0.16	)

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NATURE OF BUSINESS AND OPERATIONS (Details) - USD ($) $ in Thousands	12 Months Ended			36 Months Ended	54 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2016	Dec. 13, 2013
Securities Financing Transaction [Line Items]
Shares issued and sold, distribution reinvestment plan (in shares)				7,900,000	1,200,000
Common stock issued through distribution reinvestment plan	$ 28,497	$ 28,959	$ 22,898	$ 80,400
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
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 - Narrative (Details)	3 Months Ended	12 Months Ended
	Dec. 31, 2015 USD ($) Property	Dec. 31, 2016 USD ($) Distribution Property shares	Dec. 31, 2015 USD ($) Property	Dec. 31, 2014 USD ($)
Assets Held for Sale [Abstract]
Number of properties held for sale | Property	2	0	3
Rental Properties [Abstract]
Minimum amount of improvements and replacements that are capitalized when extending the useful life of an asset		$ 1,000
Concentration of Credit Risk [Abstract]
Deposits at various banks		125,700,000
Deposits at various banks, amount over the insurance limit of the Federal Deposit Insurance Corporation		112,000,000
Payments due under lease obligations		299,000
Asset Impairment Charges [Abstract]
Asset impairment charges		$ 0	$ 0	$ 0
Allocation of Purchase Price of Acquired and Foreclosed Assets [Abstract]
Initial purchase price allocation subject to change, period		1 year
Revenue Recognition [Abstract]
Other operating income		$ 10,800,000	10,300,000	$ 7,800,000
Tenant Receivable [Abstract]
Allowance for uncollectable receivables	$ 24,100	$ 5,200	24,100
Income Taxes [Abstract]
Number of years entity may be precluded from REIT qualifications (in years)		4 years
Earnings Per Share [Abstract]
Shares not included in diluted earnings per share (in shares) | shares		50,000
Number of stock distributions (in distributions) | Distribution		12
Reclassifications [Abstract]
Debt issuance costs	6,513,000	$ 7,125,000	6,513,000
Accounting Standards Update 2015-03 | Assets
Reclassifications [Abstract]
Debt issuance costs	(6,500,000)		(6,500,000)
Accounting Standards Update 2015-03 | Liabilities
Reclassifications [Abstract]
Debt issuance costs	$ 6,500,000		$ 6,500,000
Common Stock | Dividend distribution one
Earnings Per Share [Abstract]
Number of stock distributions (in distributions) | Distribution		7
Common stock dividend rate		1.50%
Common Stock | Dividend distribution two
Earnings Per Share [Abstract]
Number of stock distributions (in distributions) | Distribution		2
Common stock dividend rate		0.75%
Common Stock | Dividend distribution three
Earnings Per Share [Abstract]
Number of stock distributions (in distributions) | Distribution		1
Common stock dividend rate		0.585%
Common Stock | Dividend distribution four
Earnings Per Share [Abstract]
Number of stock distributions (in distributions) | Distribution		2
Common stock dividend rate		0.50%
Residential rental properties
Revenue Recognition [Abstract]
Future minimum rental payments to be received from noncancelable operating leases in 12 months		$ 56,000,000
Future minimum rental payments to be received from noncancelable operating leases in two years		368,000
Future minimum rental payments to be received thereafter		0
Commercial rental properties and antenna rentals
Revenue Recognition [Abstract]
Future minimum rental payments to be received from noncancelable operating leases in 12 months		325,000
Future minimum rental payments to be received from noncancelable operating leases in two years		216,000
Future minimum rental payments to be received in the next three years		148,000
Future minimum rental payments to be received in the next four years		80,000
Future minimum rental payments to be received in the next five years		$ 15,000
Geographic concentration risk | TEXAS
Concentration of Credit Risk [Abstract]
Percentage of real estate investments		33.00%
Geographic concentration risk | GEORGIA
Concentration of Credit Risk [Abstract]
Percentage of real estate investments		13.00%
Geographic concentration risk | CALIFORNIA
Concentration of Credit Risk [Abstract]
Percentage of real estate investments		18.00%
Resource Real Estate Opportunity Manager, LLC
Rental Properties [Abstract]
Construction management fee percentage		5.00%
Champion Farms
Assets Held for Sale [Abstract]
Total ownership interest		70.00%
Improvements and Replacements
Rental Properties [Abstract]
Estimated useful lives		1 year

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Principles of Consolidation (Details)	Dec. 31, 2016 Unit
Subsidiary or Equity Method Investee [Line Items]
Number of Units	9,022
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 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, 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 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
RRE Providence Holdings, LLC (Providence in the Park)
Subsidiary or Equity Method Investee [Line Items]
Number of Units	524
Champion Farms
Subsidiary or Equity Method Investee [Line Items]
Ownership %	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%

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Rental Property Useful Lives (Details)	12 Months Ended
	Dec. 31, 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

XML

SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Non-cash financing and investing activities:
Stock issued from distribution reinvestment plan	$ 28,497	$ 28,959	$ 22,898
Stock distributions issued	0	0	3,333
Deferred financing costs and escrow deposits funded directly by mortgage notes and credit facility	2,619	11,167	4,404
Accrual for construction in progress	1,343	896	947
Deconsolidation of subsidiary and removal of related mortgage notes payable and noncontrolling interest	35,152
Mortgage notes payable settled directly with proceeds from sale of rental property	55,720
Assets and liabilities assumed in acquisitions:
Mortgage notes payable and other liabilities assumed in acquisition of rental property	0	40,284	176,935
Cash paid during the period for:
Interest	$ 20,297	$ 20,752	$ 12,832

XML

RESTRICTED CASH - Narrative (Details) - USD ($) $ in Millions	Dec. 31, 2016	Dec. 31, 2015
Cash and Cash Equivalents [Abstract]
Unrestricted cash designated for capital expenditures	$ 101.6	$ 64.1

XML

RESTRICTED CASH - Schedule of Restricted Cash (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash	$ 10,277	$ 9,987
Real estate taxes
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash	6,853	5,395
Insurance
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash	1,854	1,657
Capital improvements
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash	$ 1,570	$ 2,935

XML

RENTAL PROPERTIES, NET - Investments (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Real Estate Investments, Net [Abstract]
Land	$ 176,418	$ 180,533
Building and improvements	795,665	775,239
Furniture, fixtures and equipment	32,198	28,928
Construction in progress	5,983	2,949
Rental properties, gross	1,010,264	987,649
Less: accumulated depreciation	(107,810)	(71,151)
Rental properties, net	$ 902,454	$ 916,498

XML

RENTAL PROPERTIES, NET - Champion Farms (Details) - Champion Farms $ in Thousands	Dec. 31, 2015 USD ($)
Assets:
Rental properties, net	$ 25,436
Restricted cash	54
Tenant receivables, net	2
Prepaid expenses and other assets	25
Subtotal - other assets associated with rental properties held for sale	81
Liabilities:
Mortgage note payable, net	16,443
Accounts payable	44
Accrued expenses and other liabilities	176
Tenant prepayments	57
Security deposits	43
Subtotal- other liabilities associated with rental properties held for sale	$ 16,763

XML

RENTAL PROPERTIES, NET - Narrative (Details) $ in Thousands	3 Months Ended	12 Months Ended
	Dec. 31, 2015 USD ($) Property	Dec. 31, 2016 USD ($) Property	Dec. 31, 2015 USD ($) Property	Dec. 31, 2014 USD ($)
Real Estate Investments, Net [Abstract]
Depreciation expense		$ 44,000	$ 41,900	$ 32,800
Number of properties held for sale | Property	2	0	3
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Noncontrolling interests	$ 7,853	$ 1,426	$ 7,853
Interests held for sale	69,350	$ 0	69,350
Champion Farms
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Total ownership interest		70.00%
Noncontrolling interests
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Interests held for sale	5,700		5,700
Held-for-sale, not discontinued operations
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net book value	$ 43,900		$ 43,900

XML

LOANS HELD FOR INVESTMENT, NET - Narrative (Details)	1 Months Ended		12 Months Ended
	May 31, 2015 USD ($)	Mar. 15, 2011 USD ($) Loan	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Apr. 18, 2013 USD ($)
Financing Receivable, Allowance for Credit Losses [Line Items]
Number of nonperforming promissory notes | Loan		2
Number of performing promissory notes | Loan		2
Purchase price of promissory note		$ 3,100,000
Loan made to purchaser			$ 960,000	$ 981,000
Provision for loan loss			0	130,000	$ 0
Charge-offs			$ 0	130,000
Heatherwood Apartments
Financing Receivable, Allowance for Credit Losses [Line Items]
Loan made to purchaser						$ 800,000
Proceeds from loans	$ 583,000
Escrow balance	$ 58,000
Provision for loan loss				$ 130,000

XML

LOANS HELD FOR INVESTMENT, NET - Loans Held for Investments (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Loans Held for Investment [Line Items]
Total loans held for investment, net	$ 769	$ 757
Current
Loans Held for Investment [Line Items]
Loans held for investment, Current	769	757
30−89 days
Loans Held for Investment [Line Items]
Loans held for investment, Delinquent	0	0
90−180 days
Loans Held for Investment [Line Items]
Loans held for investment, Delinquent	0	0
Greater than 180 days
Loans Held for Investment [Line Items]
Loans held for investment, Delinquent	$ 0	$ 0

XML

LOANS HELD FOR INVESTMENT, NET - Recorded Investment, Credit Quality Indicator (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Financing Receivable, Recorded Investment [Line Items]
Other investments	$ 769	$ 757
Performing
Financing Receivable, Recorded Investment [Line Items]
Other investments	769	757
Nonperforming
Financing Receivable, Recorded Investment [Line Items]
Other investments	$ 0	$ 0

XML

LOANS HELD FOR INVESTMENT, NET - Terms of Loans Held for Investment (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
LOANS HELD FOR INVESTMENT, NET [Abstract]
Unpaid Principal Balance	$ 960	$ 981
Unamortized Discount	(198)	(231)
Deferred (fees) expenses, net	7	7
Net book value	$ 769	$ 757
Interest Rate	7.50%
Average monthly payment	$ 8

XML

PREFERRED EQUITY INVESTMENT (Details) $ in Thousands			1 Months Ended	12 Months Ended
	Jun. 06, 2016 USD ($)	Nov. 12, 2014 USD ($) Unit	Oct. 31, 2015 USD ($)	Dec. 31, 2016 USD ($) Unit	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)
Schedule of Equity Method Investments [Line Items]
Payment to fund investment				$ 408	$ 408	$ 3,460
Number of units in community | Unit				9,022
Spring Hills Investors Limited Partner, LLC
Schedule of Equity Method Investments [Line Items]
Payment to fund investment		$ 3,500	$ 800
Contractual obligation		1,100
Incremental payment		$ 150
Dividend receivable rate		12.00%
Monthly dividend receivable rate		7.00%
Spring Hills Investors Limited Partner, LLC | Multifamily Community
Schedule of Equity Method Investments [Line Items]
Number of units in community | Unit		606
Other Investments
Schedule of Equity Method Investments [Line Items]
Outstanding principal investment					$ 3,900
Interest Income
Schedule of Equity Method Investments [Line Items]
Exit fee proceeds	$ 230

XML

ACQUISITIONS AND FORECLOSURES - Real Estate Investments (Details) $ in Thousands	Dec. 22, 2016 USD ($)	Jun. 16, 2015 USD ($)	Jun. 01, 2015 USD ($)	Mar. 19, 2015 USD ($)	Feb. 26, 2015 USD ($)	Sep. 29, 2014 USD ($)	Sep. 04, 2014 USD ($)	Jun. 26, 2014 USD ($)	May 19, 2014 USD ($)	May 05, 2014 USD ($)	Mar. 28, 2014 USD ($)	Jan. 28, 2014 USD ($)	Dec. 20, 2013 USD ($)	Dec. 16, 2013 USD ($)	Oct. 25, 2013 USD ($)	Sep. 30, 2013 USD ($)	Sep. 09, 2013 USD ($)	Jul. 25, 2013 USD ($)	Jun. 27, 2013 USD ($)	Jun. 24, 2013 USD ($)	Apr. 18, 2013 USD ($)	Mar. 28, 2013 USD ($)	Dec. 06, 2012 USD ($)	Jun. 20, 2012 USD ($)	Mar. 21, 2012 USD ($)	Jun. 17, 2011 USD ($)	May 13, 2011 USD ($)	Dec. 31, 2016 Property	Nov. 30, 2014	Nov. 25, 2014	Jul. 01, 2014	Mar. 31, 2014
Business Acquisition [Line Items]
Number of properties | Property																												31
Fair value of the net assets acquired:
Land												$ 24,872
Building and Improvements												167,519
Intangible Assets												$ 5,765
Providence in the Park
Fair value of the net assets acquired:
Contractual Purchase Price	$ 63,200
Land	7,398
Building and Improvements	53,270
Furniture, Fixtures and Equipment	822
Intangible Assets	1,710
Other Assets	83
Liabilities	(214)
Fair Valued Assigned	$ 63,069
Point Bonita Apartment Homes
Fair value of the net assets acquired:
Contractual Purchase Price		$ 49,050
Land		17,208
Building and Improvements		32,651
Furniture, Fixtures and Equipment		506
Intangible Assets		1,130
Other Assets		9
Liabilities		(30,008)
Fair Valued Assigned		$ 21,496
Yorba Linda
Fair value of the net assets acquired:
Contractual Purchase Price			$ 118,000
Land			39,322
Building and Improvements			76,124
Furniture, Fixtures and Equipment			590
Intangible Assets			1,964
Other Assets			76
Liabilities			(232)
Fair Valued Assigned			$ 117,844
Heritage Pointe
Fair value of the net assets acquired:
Contractual Purchase Price				$ 36,000
Land				8,487
Building and Improvements				25,867
Furniture, Fixtures and Equipment				716
Intangible Assets				931
Other Assets				0
Liabilities				(152)
Fair Valued Assigned				$ 35,849
South Lamar Village
Fair value of the net assets acquired:
Contractual Purchase Price					$ 24,000
Land					5,586
Building and Improvements					17,493
Furniture, Fixtures and Equipment					291
Intangible Assets					629
Other Assets					0
Liabilities					(12,961)
Fair Valued Assigned					$ 11,038
Pines of York
Business Acquisition [Line Items]
Ownership percentage acquired during period																													10.00%
Total ownership interest												90.00%																		100.00%
Fair value of the net assets acquired:
Contractual Purchase Price												$ 8,087
Land												4,464
Building and Improvements												16,340
Furniture, Fixtures and Equipment												400
Intangible Assets												715
Other Assets												416
Liabilities												(15,447)
Fair Valued Assigned												$ 6,888
Calloway at Las Colinas
Fair value of the net assets acquired:
Contractual Purchase Price						$ 48,500
Land						6,707
Building and Improvements						39,543
Furniture, Fixtures and Equipment						825
Intangible Assets						1,425
Other Assets						9
Liabilities						(636)
Fair Valued Assigned						$ 47,873
Sunset Ridge
Fair value of the net assets acquired:
Contractual Purchase Price							$ 35,000
Land							15,425
Building and Improvements							18,615
Furniture, Fixtures and Equipment							514
Intangible Assets							931
Other Assets							0
Liabilities							(24,737)
Fair Valued Assigned							$ 10,748
Pinehurst
Business Acquisition [Line Items]
Total ownership interest												97.50%
Fair value of the net assets acquired:
Contractual Purchase Price												$ 3,588
Land												1,250
Building and Improvements												8,241
Furniture, Fixtures and Equipment												200
Intangible Assets												290
Other Assets												142
Liabilities												(4,548)
Fair Valued Assigned												$ 5,575
Pheasant Run
Business Acquisition [Line Items]
Total ownership interest												97.50%
Fair value of the net assets acquired:
Contractual Purchase Price												$ 4,277
Land												800
Building and Improvements												10,798
Furniture, Fixtures and Equipment												300
Intangible Assets												317
Other Assets												172
Liabilities												(6,559)
Fair Valued Assigned												$ 5,828
Retreat at Shawnee
Business Acquisition [Line Items]
Total ownership interest												97.50%
Fair value of the net assets acquired:
Contractual Purchase Price												$ 5,369
Land												3,200
Building and Improvements												14,550
Furniture, Fixtures and Equipment												500
Intangible Assets												608
Other Assets												186
Liabilities												(14,088)
Fair Valued Assigned												$ 4,956
Aston at Cinco Ranch
Fair value of the net assets acquired:
Contractual Purchase Price								$ 32,300
Land								5,831
Building and Improvements								25,247
Furniture, Fixtures and Equipment								307
Intangible Assets								915
Other Assets								0
Liabilities								(377)
Fair Valued Assigned								$ 31,923
Perimeter 5550
Fair value of the net assets acquired:
Contractual Purchase Price									$ 22,250
Land									4,002
Building and Improvements									17,600
Furniture, Fixtures and Equipment									194
Intangible Assets									453
Other Assets									0
Liabilities									(110)
Fair Valued Assigned									22,139
Perimeter Circle
Fair value of the net assets acquired:
Contractual Purchase Price									29,500
Land									4,723
Building and Improvements									23,969
Furniture, Fixtures and Equipment									219
Intangible Assets									588
Other Assets									0
Liabilities									(156)
Fair Valued Assigned									$ 29,343
Chisholm Place
Fair value of the net assets acquired:
Contractual Purchase Price										$ 15,000
Land										1,981
Building and Improvements										12,383
Furniture, Fixtures and Equipment										198
Intangible Assets										438
Other Assets										0
Liabilities										(96)
Fair Valued Assigned										$ 14,904
Evergreen at Coursey Place
Business Acquisition [Line Items]
Ownership percentage acquired during period																																48.30%
Total ownership interest												51.70%																				100.00%
Fair value of the net assets acquired:
Contractual Purchase Price												$ 15,499
Land												3,430
Building and Improvements												38,041
Furniture, Fixtures and Equipment												530
Intangible Assets												1,080
Other Assets												680
Liabilities												(28,844)
Fair Valued Assigned												$ 14,917
The Estates at Johns Creek
Fair value of the net assets acquired:
Contractual Purchase Price											$ 70,500
Land											6,353
Building and Improvements											62,249
Furniture, Fixtures and Equipment											509
Intangible Assets											1,389
Other Assets											49
Liabilities											(392)
Fair Valued Assigned											$ 70,157
Meridian Pointe
Fair value of the net assets acquired:
Contractual Purchase Price													$ 33,149
Land													4,134
Building and Improvements													26,992
Furniture, Fixtures and Equipment													1,016
Intangible Assets													1,008
Other Assets													36
Liabilities													(107)
Fair Valued Assigned													$ 33,079
Maxwell Townhomes
Fair value of the net assets acquired:
Contractual Purchase Price														$ 22,500
Land														3,830
Building and Improvements														17,510
Furniture, Fixtures and Equipment														491
Intangible Assets														669
Other Assets														48
Liabilities														(14,363)
Fair Valued Assigned														$ 8,185
The Nesbit Palisades
Fair value of the net assets acquired:
Contractual Purchase Price															$ 25,050
Land															7,582
Building and Improvements															16,023
Furniture, Fixtures and Equipment															587
Intangible Assets															859
Other Assets															37
Liabilities															(161)
Fair Valued Assigned															$ 24,927
Verona Apartment Homes
Fair value of the net assets acquired:
Contractual Purchase Price																$ 30,600
Land																5,702
Building and Improvements																23,609
Furniture, Fixtures and Equipment																198
Intangible Assets																1,090
Other Assets																24
Liabilities																(190)
Fair Valued Assigned																30,433
Skyview Apartment Homes
Fair value of the net assets acquired:
Contractual Purchase Price																24,250
Land																2,923
Building and Improvements																20,301
Furniture, Fixtures and Equipment																97
Intangible Assets																928
Other Assets																20
Liabilities																(147)
Fair Valued Assigned																$ 24,122
Tech Center Square
Fair value of the net assets acquired:
Contractual Purchase Price																	$ 18,250
Land																	3,951
Building and Improvements																	13,048
Furniture, Fixtures and Equipment																	584
Intangible Assets																	667
Other Assets																	23
Liabilities																	(59)
Fair Valued Assigned																	$ 18,214
The Westside Apartments
Fair value of the net assets acquired:
Contractual Purchase Price																		$ 32,200
Land																		5,785
Building and Improvements																		24,418
Furniture, Fixtures and Equipment																		798
Intangible Assets																		1,199
Other Assets																		52
Liabilities																		(317)
Fair Valued Assigned																		$ 31,935
Affinity at Winter Park
Fair value of the net assets acquired:
Contractual Purchase Price																			$ 10,100
Land																			2,512
Building and Improvements																			6,459
Furniture, Fixtures and Equipment																			523
Intangible Assets																			606
Other Assets																			50
Liabilities																			(61)
Fair Valued Assigned																			$ 10,089
Trailpoint at the Woodlands
Fair value of the net assets acquired:
Contractual Purchase Price																				$ 27,200
Land																				3,785
Building and Improvements																				22,014
Furniture, Fixtures and Equipment																				697
Intangible Assets																				704
Other Assets																				40
Liabilities																				(170)
Fair Valued Assigned																				$ 27,070
Retreat at Rocky Ridge
Fair value of the net assets acquired:
Contractual Purchase Price																					$ 8,500
Land																					1,616
Building and Improvements																					6,418
Furniture, Fixtures and Equipment																					30
Intangible Assets																					436
Other Assets																					2
Liabilities																					(89)
Fair Valued Assigned																					$ 8,413
Ivy at Clear Creek
Fair value of the net assets acquired:
Contractual Purchase Price																						$ 11,750
Land																						1,877
Building and Improvements																						9,175
Furniture, Fixtures and Equipment																						28
Intangible Assets																						670
Other Assets																						8
Liabilities																						(127)
Fair Valued Assigned																						$ 11,631
Deerfield
Fair value of the net assets acquired:
Contractual Purchase Price																									$ 10,300
Land																									1,660
Building and Improvements																									11,110
Furniture, Fixtures and Equipment																									500
Intangible Assets																									423
Other Assets																									1
Liabilities																									(4)
Fair Valued Assigned																									$ 13,690
Mosaic
Fair value of the net assets acquired:
Contractual Purchase Price																							$ 2,050
Land																							1,000
Building and Improvements																							2,609
Furniture, Fixtures and Equipment																							30
Intangible Assets																							123
Other Assets																							14
Liabilities																							(14)
Fair Valued Assigned																							$ 3,762
Williamsburg Apartments
Fair value of the net assets acquired:
Contractual Purchase Price																								$ 41,250
Land																								3,223
Building and Improvements																								35,111
Furniture, Fixtures and Equipment																								1,007
Intangible Assets																								1,909
Other Assets																								49
Liabilities																								(274)
Fair Valued Assigned																								$ 41,025
Cannery Lofts
Fair value of the net assets acquired:
Contractual Purchase Price																											$ 7,100
Land																											160
Building and Improvements																											7,913
Furniture, Fixtures and Equipment																											200
Intangible Assets																											609
Other Assets																											35
Liabilities																											0
Fair Valued Assigned																											$ 8,917
Vista Apartment Homes
Fair value of the net assets acquired:
Contractual Purchase Price																										$ 12,000
Land																										1,163
Building and Improvements																										9,913
Furniture, Fixtures and Equipment																										0
Intangible Assets																										535
Other Assets																										530
Liabilities																										(141)
Fair Valued Assigned																										$ 12,000
Pinehurst, Pheasant Run and Retreat at Shawnee
Business Acquisition [Line Items]
Ownership percentage acquired during period																															2.50%
Total ownership interest												97.50%																			100.00%

XML

ACQUISITIONS AND FORECLOSURES - Acquisitions and Paladin Acquisition (Details) ft² in Thousands, $ in Thousands			12 Months Ended
	Mar. 06, 2014 USD ($)	Jan. 28, 2014 USD ($) ft² Unit Property community	Dec. 31, 2016 USD ($) Property	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Nov. 30, 2014 USD ($)	Nov. 25, 2014	Jul. 01, 2014 USD ($)	Mar. 31, 2014 USD ($)
Business Acquisition [Line Items]
Number of real estate properties acquired | Property			1
Valuation period			12 months
Number of properties | Property			31
Number of multifamily communities | community		10
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Land		$ 24,872
Building and Improvements		167,519
Intangible Assets		5,765
Fair Value of Property		198,156
Other Assets		6,753
Liabilities		(136,528)
Noncontrolling Interest		(18,901)
Total Company Equity		49,480
Goodwill		1,264	$ 711	$ 1,231	$ 1,231
Allocation of Purchase Price		50,744
Total purchase price			$ 51,200
Paladin
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Land		24,872
Intangible Assets		5,765
Fair Value of Property		69,644
Other Assets		3,222
Goodwill		$ 1,264
Paladin | Resource Real Estate Opportunity OP, LP
Business Acquisition [Line Items]
Number of properties | Property		11
Number of rentable units, more than (in units) | Unit		2,500
Net rentable area, more than (in square feet) | ft²		75
Acquisition of notes receivable		$ 3,500
Consideration for merger, net of transaction costs		$ 51,200
Champion Farms
Business Acquisition [Line Items]
Ownership % at Date of Acquisition		70.00%
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Land		$ 3,168
Building and Improvements		23,464
Intangible Assets		579
Fair Value of Property		27,211
Other Assets		575
Liabilities		(17,015)
Noncontrolling Interest		(3,231)
Total Company Equity		7,540
Goodwill		171
Allocation of Purchase Price		$ 7,711
Fieldstone
Business Acquisition [Line Items]
Ownership % at Date of Acquisition		83.00%
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Land		$ 1,420
Building and Improvements		18,472
Intangible Assets		648
Fair Value of Property		20,540
Other Assets		661
Liabilities		(16,462)
Noncontrolling Interest		(806)
Total Company Equity		3,933
Goodwill		130
Allocation of Purchase Price		$ 4,063
Pinehurst
Business Acquisition [Line Items]
Ownership % at Date of Acquisition		97.50%
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Land		$ 1,250
Building and Improvements		8,241
Intangible Assets		290
Fair Value of Property		9,781
Other Assets		332
Liabilities		(4,548)
Noncontrolling Interest		(139)						$ (139)
Total Company Equity		5,426
Goodwill		72
Allocation of Purchase Price		$ 5,498
Pheasant Run
Business Acquisition [Line Items]
Ownership % at Date of Acquisition		97.50%
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Land		$ 800
Building and Improvements		10,798
Intangible Assets		317
Fair Value of Property		11,915
Other Assets		472
Liabilities		(6,559)
Noncontrolling Interest		(146)						(146)
Total Company Equity		5,682
Goodwill		76
Allocation of Purchase Price		$ 5,758
Retreat at Shawnee
Business Acquisition [Line Items]
Ownership % at Date of Acquisition		97.50%
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Land		$ 3,200
Building and Improvements		14,550
Intangible Assets		608
Fair Value of Property		18,358
Other Assets		686
Liabilities		(14,088)
Noncontrolling Interest		(124)						$ (124)
Total Company Equity		4,832
Goodwill		117
Allocation of Purchase Price		$ 4,949
Hilltop Village
Business Acquisition [Line Items]
Ownership % at Date of Acquisition		49.00%
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Land		$ 800
Building and Improvements		4,289
Intangible Assets		195
Fair Value of Property		5,284
Other Assets		267
Liabilities		(4,612)
Noncontrolling Interest		(479)
Total Company Equity		460
Goodwill		33
Allocation of Purchase Price		$ 493
Conifer Place
Business Acquisition [Line Items]
Ownership % at Date of Acquisition		42.50%
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Land		$ 5,040
Building and Improvements		28,712
Intangible Assets		1,007
Fair Value of Property		34,759
Other Assets		749
Liabilities		(28,776)
Noncontrolling Interest		(3,869)
Total Company Equity		2,863
Goodwill		219
Allocation of Purchase Price		$ 3,082
Stone Ridge
Business Acquisition [Line Items]
Ownership % at Date of Acquisition		68.50%
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Land		$ 1,300
Building and Improvements		4,612
Intangible Assets		326
Fair Value of Property		6,238
Other Assets		985
Liabilities		(178)
Noncontrolling Interest		(2,218)
Total Company Equity		4,827
Goodwill		42
Allocation of Purchase Price		$ 4,869
Evergreen at Coursey Place
Business Acquisition [Line Items]
Ownership % at Date of Acquisition		51.70%							100.00%
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Land		$ 3,430
Building and Improvements		38,041
Intangible Assets		1,080
Fair Value of Property		42,551
Other Assets		1,210
Liabilities		(28,844)
Noncontrolling Interest		(7,200)							$ (7,200)
Total Company Equity		7,717
Goodwill		268
Allocation of Purchase Price		$ 7,985
Pines of York
Business Acquisition [Line Items]
Ownership % at Date of Acquisition		90.00%					100.00%
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Land		$ 4,464
Building and Improvements		16,340
Intangible Assets		715
Fair Value of Property		21,519
Other Assets		816
Liabilities		(15,446)
Noncontrolling Interest		(689)				$ (690)
Total Company Equity		6,200
Goodwill		136
Allocation of Purchase Price		$ 6,336
Governor Park
Business Acquisition [Line Items]
Ownership % at Date of Acquisition		47.65%
Governor Park
Business Acquisition [Line Items]
Sale of membership interest, percent sold	47.65%
Proceeds from sale of membership interest	$ 456
Office building | Paladin | Resource Real Estate Opportunity OP, LP
Business Acquisition [Line Items]
Number of properties | Property		2
Multifamily Community | Paladin | Resource Real Estate Opportunity OP, LP
Business Acquisition [Line Items]
Number of properties | Property		12	6
Multifamily Community | Corporate joint venture | Paladin | Resource Real Estate Opportunity OP, LP
Business Acquisition [Line Items]
Number of properties | Property		11

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ACQUISITIONS AND FORECLOSURES - Pro Forma Financial Information (Details) - Yorba Linda $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2014 USD ($) $ / shares
Business Acquisition [Line Items]
Revenues	$ 108,005
Net loss attributable to common stockholders	$ (50,043)
Basic and diluted net loss per share (in dollars per share) | $ / shares	$ (0.74)

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ACQUISITIONS AND FORECLOSURES - Evergreen at Coursey Place (Details) - USD ($) $ in Thousands		3 Months Ended								12 Months Ended
	Mar. 31, 2014	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Jan. 28, 2014
Business Acquisition [Line Items]
Noncontrolling interest assumed													$ 18,901
Losses attributable to noncontrolling interest		$ 0	$ 0	$ 25	$ 6,281	$ 186	$ (43)	$ (192)	$ 11	$ 6,306	$ (38)	$ (2,021)
Distribution to noncontrolling interest										(9,120)		$ (119)
Adjustment to additional paid in capital										$ (3,613)
Evergreen at Coursey Place
Business Acquisition [Line Items]
Ownership percentage acquired during period	48.30%
Purchase price	$ 7,500
Noncontrolling interest assumed	7,200												$ 7,200
Losses attributable to noncontrolling interest	(191)
Distribution to noncontrolling interest	(116)
Adjusted noncontrolling interest balance	6,893
Adjustment to additional paid in capital	$ (607)

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ACQUISITIONS AND FORECLOSURES - Pinehurst, Pheasant Run and Retreat at Shawnee (Details) - USD ($) $ in Thousands		3 Months Ended								12 Months Ended
	Jul. 01, 2014	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Jan. 28, 2014
Business Acquisition [Line Items]
Noncontrolling interest assumed													$ 18,901
Losses attributable to noncontrolling interest		$ 0	$ 0	$ 25	$ 6,281	$ 186	$ (43)	$ (192)	$ 11	$ 6,306	$ (38)	$ (2,021)
Adjustment to additional paid in capital										$ (3,613)
Pinehurst, Pheasant Run and Retreat at Shawnee
Business Acquisition [Line Items]
Ownership percentage acquired during period	2.50%
Purchase price	$ 1,100
Pinehurst
Business Acquisition [Line Items]
Purchase price	570
Noncontrolling interest assumed	139												139
Losses attributable to noncontrolling interest	(7)
Adjusted noncontrolling interest balance	132
Adjustment to additional paid in capital	(438)
Pheasant Run
Business Acquisition [Line Items]
Purchase price	515
Noncontrolling interest assumed	146												146
Losses attributable to noncontrolling interest	(8)
Adjusted noncontrolling interest balance	138
Adjustment to additional paid in capital	(377)
Retreat at Shawnee
Business Acquisition [Line Items]
Purchase price	15
Noncontrolling interest assumed	124												$ 124
Losses attributable to noncontrolling interest	(15)
Adjusted noncontrolling interest balance	109
Adjustment to additional paid in capital	$ 94

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ACQUISITIONS AND FORECLOSURES - Joint Venture Partnership That Owns Stone Ridge (Details) - Joint venture partnership that owns Stone Ridge - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Business Acquisition [Line Items]
Purchase price	$ 356	$ 1,100
Additional ownership interest obtained	5.70%	9.20%
Total ownership interest	83.40%

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ACQUISITIONS AND FORECLOSURES - Pines of York (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended								12 Months Ended
	Nov. 30, 2014	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Jan. 28, 2014
Business Acquisition [Line Items]
Noncontrolling interest assumed													$ 18,901
Losses attributable to noncontrolling interest		$ 0	$ 0	$ 25	$ 6,281	$ 186	$ (43)	$ (192)	$ 11	$ 6,306	$ (38)	$ (2,021)
Adjustment to additional paid in capital										$ (3,613)
Pines of York
Business Acquisition [Line Items]
Ownership percentage acquired during period	10.00%
Purchase price	$ 900
Noncontrolling interest assumed	690												$ 689
Losses attributable to noncontrolling interest	(98)
Adjusted noncontrolling interest balance	592
Adjustment to additional paid in capital	$ (308)

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ACQUISITIONS AND FORECLOSURES - Revenues, Losses and Acquisition Costs (Details) - USD ($) $ in Thousands		3 Months Ended								12 Months Ended
		Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Business Acquisition [Line Items]
Total Revenues		$ 28,515	$ 28,575	$ 30,721	$ 30,556	$ 31,334	$ 30,845	$ 28,412	$ 27,734	$ 118,367	$ 118,325	$ 100,269
Net Loss		$ (10,173)	$ 9,637	$ 2,427	$ 8,480	$ (10,834)	$ (10,662)	$ (12,476)	$ 17,039	10,371	(16,933)	(48,198)
Providence in the Park
Business Acquisition [Line Items]
Total Revenues										193
Net Loss										(781)
Acquisition Costs										(1,509)
Various Properties
Business Acquisition [Line Items]
Total Revenues	[1]									0
Net Loss	[1]									0
Acquisition Costs	[1]									(73)
South Lamar Village
Business Acquisition [Line Items]
Total Revenues											2,086	0	[2]
Net Loss											(1,580)	0	[2]
Acquisition Costs											(692)	(66)	[2]
Heritage Pointe
Business Acquisition [Line Items]
Total Revenues											3,019
Net Loss											(2,173)
Acquisition Costs											(1,005)
Yorba Linda
Business Acquisition [Line Items]
Total Revenues											4,584
Net Loss											(3,405)
Acquisition Costs											(2,761)
Point Bonita Apartment Homes
Business Acquisition [Line Items]
Total Revenues											2,431
Net Loss											(2,144)
Acquisition Costs											(1,353)
Calloway at Las Colinas
Business Acquisition [Line Items]
Total Revenues												1,445
Net Loss												(1,234)
Acquisition Costs												(1,290)
Sunset Ridge
Business Acquisition [Line Items]
Total Revenues												1,214
Net Loss												(1,216)
Acquisition Costs												(968)
Aston at Cinco Ranch
Business Acquisition [Line Items]
Total Revenues												1,718
Net Loss												(1,144)
Acquisition Costs												(832)
Perimeter 5550
Business Acquisition [Line Items]
Total Revenues												1,172
Net Loss												(1,024)
Acquisition Costs												(606)
Perimeter Circle
Business Acquisition [Line Items]
Total Revenues												1,501
Net Loss												(1,272)
Acquisition Costs												(748)
Chisholm Place
Business Acquisition [Line Items]
Total Revenues												1,196
Net Loss												(1,042)
Acquisition Costs												(494)
The Estates at Johns Creek
Business Acquisition [Line Items]
Total Revenues												4,828
Net Loss												(3,287)
Acquisition Costs												(1,720)
Paladin
Business Acquisition [Line Items]
Total Revenues												22,645
Net Loss												(10,190)
Acquisition Costs												(3,109)
Multifamily Community
Business Acquisition [Line Items]
Total Revenues										193	12,120	35,719
Net Loss										(781)	(9,302)	(20,409)
Acquisition Costs										$ (1,582)	$ (5,811)	$ (9,833)

[1] Multifamily CommunityTotal Revenues Net Loss Acquisition Costs 2016 Acquisitions: Providence in the Park$193$(781)$(1,509) Various properties — — (73)(1 ) $193 $(781) $(1,582)

[2] (1)Acquisition fees paid in 2016 related to additional investments in properties to fund additional capital reserves.(2)Acquisition that was completed during the first quarter of fiscal 2015.

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MEASUREMENT PERIOD ADJUSTMENTS (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2014	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Mar. 28, 2014	Jan. 28, 2014
Business Acquisition [Line Items]
Land						$ 24,872
Intangible assets						5,765
Other Assets						6,753
Goodwill		$ 711	$ 1,231	$ 1,231		1,264
Fair Value of Property						198,156
Paladin
Business Acquisition [Line Items]
Land						24,872
Building						167,519
Personal property						3,530
Intangible assets						5,765
Other Assets						3,222
Goodwill						1,264
Liabilities						(136,528)
Fair Value of Property						69,644
Additional depreciation and amortization	$ 867
The Estates at Johns Creek
Business Acquisition [Line Items]
Land					$ 6,353
Building					62,249
Personal property					509
Intangible assets					1,389
Fair Value of Property					70,500
As initially reported | Paladin
Business Acquisition [Line Items]
Land						44,292
Building						149,155
Personal property						0
Intangible assets						5,861
Other Assets						3,231
Goodwill						6,412
Liabilities						(140,970)
Fair Value of Property						67,981
As initially reported | The Estates at Johns Creek
Business Acquisition [Line Items]
Land					18,137
Building					51,843
Personal property					0
Intangible assets					520
Fair Value of Property					70,500
Measurement period adjustment | Paladin
Business Acquisition [Line Items]
Land						(19,420)
Building						18,364
Personal property						3,530
Intangible assets						(96)
Other Assets						(9)
Goodwill						(5,148)
Liabilities						4,442
Fair Value of Property						1,663
Remaining balance of measurement period adjustment						$ 1,700
Measurement period adjustment | The Estates at Johns Creek
Business Acquisition [Line Items]
Land					(11,784)
Building					10,406
Personal property					509
Intangible assets					869
Fair Value of Property					$ 0

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DISPOSITION OF PROPERTIES AND DECONSOLIDATION OF INTERESTS (Details) - USD ($) $ in Thousands																	3 Months Ended								12 Months Ended
	Jul. 08, 2016	Jun. 30, 2016	Jun. 09, 2016	Feb. 17, 2016	Jan. 29, 2016	Jan. 27, 2016	Sep. 18, 2015	Jun. 30, 2015	Mar. 02, 2015	Feb. 27, 2015	Jan. 29, 2015	Jan. 26, 2015	Sep. 19, 2014	Jul. 01, 2014	Jun. 16, 2014	Mar. 06, 2014	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net Income (Loss) Attributable to Properties Sold																	$ (10,173)	$ 9,637	$ 2,427	$ 8,480	$ (10,834)	$ (10,662)	$ (12,476)	$ 17,039	$ 10,371	$ (16,933)	$ (48,198)
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	(38)	(2,021)
Conifer Place
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Contract Sales price						$ 42,500
Net Gains on Dispositions of Properties and Joint Venture Interests						9,897
Revenues Attributable to Properties Sold						365
Net Income (Loss) Attributable to Properties Sold						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]
Contract Sales price					$ 7,590
Net Gains on Dispositions of Properties and Joint Venture Interests					1,066
Revenues Attributable to Properties Sold					220
Net Income (Loss) Attributable to Properties Sold					$ 1,125
Ivy at Clear Creek
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Contract Sales price				$ 19,400
Net Gains on Dispositions of Properties and Joint Venture Interests				6,792
Revenues Attributable to Properties Sold				386
Net Income (Loss) Attributable to Properties Sold				$ 6,629
Affinity at Winter Park
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Contract Sales price			$ 17,500
Net Gains on Dispositions of Properties and Joint Venture Interests			5,605
Revenues Attributable to Properties Sold			1,010
Net Income (Loss) Attributable to Properties Sold			$ 5,757
Fieldstone
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Contract Sales price		$ 7,514																	$ 7,514
Net Gains on Dispositions of Properties and Joint Venture Interests		4,096
Revenues Attributable to Properties Sold		1,548
Net Income (Loss) Attributable to Properties Sold		$ 4,325
The Nesbit Palisades
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Contract Sales price	$ 45,500
Net Gains on Dispositions of Properties and Joint Venture Interests	17,601
Revenues Attributable to Properties Sold	2,615
Net Income (Loss) Attributable to Properties Sold	$ 17,739
The Alcove Apartments
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Contract Sales price												$ 11,050
Net Gains on Dispositions of Properties and Joint Venture Interests												3,784
Revenues Attributable to Properties Sold												$ 199
Net Income (Loss) Attributable to Properties Sold																									3,819
107th Avenue Apartments
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Contract Sales price											$ 250
Net Gains on Dispositions of Properties and Joint Venture Interests											50
Revenues Attributable to Properties Sold											$ 3
Net Income (Loss) Attributable to Properties Sold																									50
The Redford Apartments
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Contract Sales price										$ 32,959
Net Gains on Dispositions of Properties and Joint Venture Interests										15,303
Revenues Attributable to Properties Sold										$ 1,274
Net Income (Loss) Attributable to Properties Sold																									15,652
Cityside Apartments
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Contract Sales price									$ 24,500
Net Gains on Dispositions of Properties and Joint Venture Interests									10,028
Revenues Attributable to Properties Sold									$ 701
Net Income (Loss) Attributable to Properties Sold																									10,290
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
Net Gains on Dispositions of Properties and Joint Venture Interests								4,386
Revenues Attributable to Properties Sold								$ 828
Net Income (Loss) Attributable to Properties Sold																									4,027
The Reserve at Mt. Moriah
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Contract Sales price							$ 5,425
Net Gains on Dispositions of Properties and Joint Venture Interests							2,490
Revenues Attributable to Properties Sold							$ 1,135
Net Income (Loss) Attributable to Properties Sold																									2,202
Governor Park
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Contract Sales price																$ 456
Net Gains on Dispositions of Properties and Joint Venture Interests																0
Revenues Attributable to Properties Sold																$ 0
Net Income (Loss) Attributable to Properties Sold																										0
Campus Club
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Contract Sales price															$ 10,500
Net Gains on Dispositions of Properties and Joint Venture Interests															2,602
Revenues Attributable to Properties Sold															$ 849
Net Income (Loss) Attributable to Properties Sold																										2,723
Hilltop Village
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Contract Sales price														$ 0
Net Gains on Dispositions of Properties and Joint Venture Interests														(493)
Revenues Attributable to Properties Sold														$ 352
Net Income (Loss) Attributable to Properties Sold																										(707)
Arcadia at Westheimer
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Contract Sales price													$ 18,100
Net Gains on Dispositions of Properties and Joint Venture Interests													8,375
Revenues Attributable to Properties Sold													$ 2,667
Net Income (Loss) Attributable to Properties Sold																										8,407
Multifamily Community
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Contract Sales price																	$ 140,004				$ 87,684				140,004	87,684	29,056
Net Gains on Dispositions of Properties and Joint Venture Interests																									45,057	36,041	10,484
Revenues Attributable to Properties Sold																									6,144	4,140	3,868
Net Income (Loss) Attributable to Properties Sold																									$ 45,517	36,040	$ 10,423
Multifamily Community | Noncontrolling interests
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net Income (Loss) Attributable to Properties Sold																										$ (112)

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IDENTIFIED INTANGIBLE ASSETS, NET - Narrative (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Finite-Lived Intangible Assets [Line Items]
Identified intangible assets, net	$ 1,855	$ 374
Weighted average remaining life	7 months	1 month
Amortization expense	$ 228	$ 6,400	$ 15,000
Acquired in-place leases
Finite-Lived Intangible Assets [Line Items]
Identified intangible assets, net	1,900	374
Accumulated amortization	24,300	$ 28,400
Antennae leases
Finite-Lived Intangible Assets [Line Items]
Annual expected amortization expense through 2025	$ 16

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IDENTIFIED INTANGIBLE ASSETS, NET - Rental and Antennae Leases (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
2017	$ 1,726
2018	16
2019	16
2020	16
2021	16
Thereafter	65
Total	$ 1,855	$ 374

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GOODWILL (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Goodwill [Roll Forward]
Beginning balance	$ 1,231	$ 1,231
Activity - 2015	(520)	0
Activity - 2016: Sale of Conifer Place, Champion Farms, and Fieldstone	(520)	0
Ending balance	$ 711	$ 1,231

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MORTGAGE NOTES PAYABLE, NET - Narrative (Details) - USD ($) $ in Thousands					1 Months Ended	2 Months Ended	12 Months Ended
	Dec. 23, 2016	Dec. 22, 2016	Dec. 27, 2013	Dec. 20, 2013	Mar. 31, 2016	Feb. 29, 2016	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Jun. 30, 2015
Participating Mortgage Loans [Line Items]
Restricted cash related to escrow deposits							$ 10,300	$ 10,000
Payments of closing costs							3,200	402	$ 4,155
Loss on extinguishment of debt							791	0	0
Amortization of deferred financing costs							2,120	1,839	1,365
Mortgage Notes Payable
Participating Mortgage Loans [Line Items]
Accumulated amortization, deferred finance costs							2,600	2,400
Payment guarantee
Participating Mortgage Loans [Line Items]
Guarantee of the completion and payment of costs of completion of renovations							7,000
Cost of renovations							7,000
Covenants included in mortgage for Yorba Linda
Participating Mortgage Loans [Line Items]
Loan amount										$ 7,500
Interest Expense | Mortgage Notes Payable
Participating Mortgage Loans [Line Items]
Amortization of deferred financing costs							1,800	1,500	1,100
Interest Expense | Rental properties
Participating Mortgage Loans [Line Items]
Amortization of fair value adjustment of debt							$ (485)	$ (779)	$ (598)
PNC Bank
Participating Mortgage Loans [Line Items]
Payments of closing costs				$ 75
US Bank
Participating Mortgage Loans [Line Items]
Loan amount			$ 29,700
Payments of closing costs			222
Current availability			6,700
US Bank | Payment guarantee
Participating Mortgage Loans [Line Items]
Guarantee of the completion and payment of costs of completion of renovations			$ 6,500
Berkadia Commercial Mortgage
Participating Mortgage Loans [Line Items]
Loan amount		$ 54,000
Debt instrument, percentage principal payment to initiate prepayment terms		1.00%
Interest period		2 years
CBRE Capital Market
Participating Mortgage Loans [Line Items]
Loan amount	$ 11,400
Debt instrument, percentage principal payment to initiate prepayment terms	1.00%
Interest period	2 years
LIBOR
Participating Mortgage Loans [Line Items]
Margin over LIBOR	2.46%	2.38%			2.25%	2.00%	0.77167%

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MORTGAGE NOTES PAYABLE, NET - Summary of Mortgage Notes Payable (Details) - USD ($) $ in Thousands			1 Months Ended	2 Months Ended	12 Months Ended
	Dec. 23, 2016	Dec. 22, 2016	Mar. 31, 2016	Feb. 29, 2016	Dec. 31, 2016	Dec. 31, 2015
Participating Mortgage Loans [Line Items]
Outstanding borrowings					$ 627,088	$ 595,384
Premium (Discount)					2,189	2,674
Deferred finance costs, net					(7,125)	(6,513)
Carrying Value					$ 622,152	591,545
LIBOR
Participating Mortgage Loans [Line Items]
Variable rate	2.46%	2.38%	2.25%	2.00%	0.77167%
Vista Apartment Homes
Participating Mortgage Loans [Line Items]
Outstanding borrowings					$ 15,225	15,573
Premium (Discount)					0	0
Deferred finance costs, net					(178)	(216)
Carrying Value					$ 15,047	15,357
Margin over LIBOR					2.29%
Annual Interest Rate					3.06%
Average Monthly Debt Service					$ 67
Average Monthly Escrow					16
Cannery Lofts
Participating Mortgage Loans [Line Items]
Outstanding borrowings					13,100	8,148
Premium (Discount)					0	0
Deferred finance costs, net					(197)	(131)
Carrying Value					$ 12,903	8,017
Margin over LIBOR					2.54%
Annual Interest Rate					3.31%
Average Monthly Debt Service					$ 46
Average Monthly Escrow					40
Deerfield
Participating Mortgage Loans [Line Items]
Outstanding borrowings					10,359	10,517
Premium (Discount)					0	0
Deferred finance costs, net					(125)	(159)
Carrying Value					$ 10,234	10,358
Annual Interest Rate					4.66%
Average Monthly Debt Service					$ 54
Average Monthly Escrow					29
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					18,690	19,013
Premium (Discount)					0	0
Deferred finance costs, net					(222)	(257)
Carrying Value					$ 18,468	18,756
Margin over LIBOR					2.41%
Annual Interest Rate					3.18%
Average Monthly Debt Service					$ 74
Average Monthly Escrow					67
Verona Apartment Homes
Participating Mortgage Loans [Line Items]
Outstanding borrowings					32,970	22,402
Premium (Discount)					0	0
Deferred finance costs, net					(532)	(179)
Carrying Value					$ 32,438	22,223
Margin over LIBOR					2.36%
Annual Interest Rate					3.13%
Average Monthly Debt Service					$ 116
Average Monthly Escrow					38
Skyview Apartment Homes
Participating Mortgage Loans [Line Items]
Outstanding borrowings					28,400	18,089
Premium (Discount)					0	0
Deferred finance costs, net					(462)	(148)
Carrying Value					$ 27,938	17,941
Margin over LIBOR					2.36%
Annual Interest Rate					3.13%
Average Monthly Debt Service					$ 100
Average Monthly Escrow					22
The Nesbit Palisades
Participating Mortgage Loans [Line Items]
Outstanding borrowings					0	20,298
Premium (Discount)					0	0
Deferred finance costs, net					0	(309)
Carrying Value					0	19,989
Maxwell Townhomes
Participating Mortgage Loans [Line Items]
Outstanding borrowings					13,602	13,850
Premium (Discount)					0	0
Deferred finance costs, net					(137)	(167)
Carrying Value					$ 13,465	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					7,350	4,111
Premium (Discount)					0	0
Deferred finance costs, net					(154)	0
Carrying Value					$ 7,196	4,111
Margin over LIBOR					2.42%
Annual Interest Rate					3.19%
Average Monthly Debt Service					$ 30
Average Monthly Escrow					15
Pheasant Run
Participating Mortgage Loans [Line Items]
Outstanding borrowings					6,250	6,250
Premium (Discount)					43	100
Deferred finance costs, net					(9)	(20)
Carrying Value					$ 6,284	6,330
Annual Interest Rate					5.95%
Average Monthly Debt Service					$ 31
Average Monthly Escrow					15
Retreat at Shawnee
Participating Mortgage Loans [Line Items]
Outstanding borrowings					12,893	13,090
Premium (Discount)					85	164
Deferred finance costs, net					(23)	(44)
Carrying Value					$ 12,955	13,210
Annual Interest Rate					5.58%
Average Monthly Debt Service					$ 78
Average Monthly Escrow					28
Conifer Crossing
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					27,107	27,548
Premium (Discount)					100	123
Deferred finance costs, net					(96)	(120)
Carrying Value					$ 27,111	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					14,999	15,267
Premium (Discount)					(299)	(363)
Deferred finance costs, net					(56)	(69)
Carrying Value					$ 14,644	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					49,596	50,000
Premium (Discount)					0	0
Deferred finance costs, net					(405)	(526)
Carrying Value					$ 49,191	49,474
Annual Interest Rate					3.38%
Average Monthly Debt Service					$ 221
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					(143)	(163)
Carrying Value					$ 11,444	11,424
Margin over LIBOR					2.39%
Annual Interest Rate					3.16%
Average Monthly Debt Service					$ 43
Average Monthly Escrow					38
Perimeter Circle
Participating Mortgage Loans [Line Items]
Outstanding borrowings					17,298	17,657
Premium (Discount)					0	0
Deferred finance costs, net					(143)	(202)
Carrying Value					$ 17,155	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					13,651	13,935
Premium (Discount)					0	0
Deferred finance costs, net					(118)	(167)
Carrying Value					$ 13,533	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					23,367	23,772
Premium (Discount)					0	0
Deferred finance costs, net					(268)	(328)
Carrying Value					$ 23,099	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					19,699	20,121
Premium (Discount)					259	329
Deferred finance costs, net					(205)	(261)
Carrying Value					$ 19,753	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					2,948	3,002
Premium (Discount)					35	45
Deferred finance costs, net					(26)	(34)
Carrying Value					$ 2,957	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					35,083	35,740
Premium (Discount)					0	0
Deferred finance costs, net					(306)	(372)
Carrying Value					$ 34,777	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					12,435	12,682
Premium (Discount)					0	0
Deferred finance costs, net					(131)	(184)
Carrying Value					$ 12,304	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					(327)	(370)
Carrying Value					$ 25,953	25,910
Margin over LIBOR					1.88%
Annual Interest Rate					2.65%
Average Monthly Debt Service					$ 98
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					(661)	(860)
Carrying Value					$ 66,839	66,640
Margin over LIBOR					1.75%
Annual Interest Rate					2.52%
Average Monthly Debt Service					$ 180
Average Monthly Escrow					0
Point Bonita Apartment Homes
Participating Mortgage Loans [Line Items]
Outstanding borrowings					26,907	27,265
Premium (Discount)					1,966	2,276
Deferred finance costs, net					(338)	(391)
Carrying Value					$ 28,535	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					5,227	5,350
Premium (Discount)					0	0
Deferred finance costs, net					(130)	(153)
Carrying Value					$ 5,097	5,197
Margin over LIBOR					1.86%
Annual Interest Rate					2.63%
Average Monthly Debt Service					$ 21
Average Monthly Escrow					17
The Westside Apartments
Participating Mortgage Loans [Line Items]
Outstanding borrowings					36,820	23,000
Premium (Discount)					0	0
Deferred finance costs, net					(448)	(351)
Carrying Value					$ 36,372	22,649
Margin over LIBOR					2.12%
Annual Interest Rate					2.89%
Average Monthly Debt Service					$ 137
Average Monthly Escrow					68
Tech Center Square
Participating Mortgage Loans [Line Items]
Outstanding borrowings					12,375	12,500
Premium (Discount)					0	0
Deferred finance costs, net					(196)	(159)
Carrying Value					$ 12,179	12,341
Margin over LIBOR					2.58%
Annual Interest Rate					3.35%
Average Monthly Debt Service					$ 55
Average Monthly Escrow					25
Williamsburg Apartments
Participating Mortgage Loans [Line Items]
Outstanding borrowings					53,995	0
Premium (Discount)					0	0
Deferred finance costs, net					(828)	0
Carrying Value					$ 53,167	0
Margin over LIBOR					2.38%
Annual Interest Rate					3.15%
Average Monthly Debt Service					$ 202
Average Monthly Escrow					123
Retreat at Rocky Ridge
Participating Mortgage Loans [Line Items]
Outstanding borrowings					11,375	0
Premium (Discount)					0	0
Deferred finance costs, net					(261)	0
Carrying Value					$ 11,114	$ 0
Margin over LIBOR					2.46%
Annual Interest Rate					3.23%
Average Monthly Debt Service					$ 43
Average Monthly Escrow					$ 22

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MORTGAGE NOTES PAYABLE, NET - Annual Principal Payments on the Mortgage Note Payable (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Debt Disclosure [Abstract]
2017	$ 12,978
2018	20,456
2019	50,908
2020	150,951
2021	99,121
Thereafter	292,674
Carrying Value	$ 627,088	$ 595,384

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MORTGAGE NOTES PAYABLE, NET - Amortization of Existing Deferred Financing Costs (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Debt Disclosure [Abstract]
2017	$ 1,414
2018	1,353
2019	1,251
2020	972
2021	719
Thereafter	1,416
Deferred financing costs, net	$ 7,125	$ 6,513

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CREDIT FACILITY - Summary of Credit Facilities (Details) - USD ($) $ in Thousands			1 Months Ended	2 Months Ended	12 Months Ended
	Dec. 23, 2016	Dec. 22, 2016	Mar. 31, 2016	Feb. 29, 2016	Dec. 31, 2016	Dec. 31, 2015
Line of Credit Facility [Line Items]
Balance Outstanding					$ 0	$ 21,894
LIBOR
Line of Credit Facility [Line Items]
Variable rate	2.46%	2.38%	2.25%	2.00%	0.77167%
Bank of America | Revolving credit facility
Line of Credit Facility [Line Items]
Balance Outstanding					$ 0	$ 21,894
Current Availability					$ 13,280
Current Interest Rate (1)					3.77%
Weighted Average Interest Rate					3.44%	3.26%
Variable rate					3.00%

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CREDIT FACILITY - Narrative (Details) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	May 23, 2013	May 22, 2013
Line of Credit Facility [Line Items]
Amortization of deferred financing costs	$ 2,120,000	$ 1,839,000	$ 1,365,000
Estimated amortization of deferred financing costs in year one	1,414,000
Revolving credit facility | BAML
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity				$ 50,000,000	$ 25,000,000.0
Line of credit facility collateral amount	$ 33,200,000
Line of credit facility, maximum borrowing capacity against secured collateral	40.00%
Extension fee percentage	0.25%
Weighted average borrowings	$ 6,800,000	13,800,000
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%
Term to satisfy debt service coverage requirements	36 months
BAML
Line of Credit Facility [Line Items]
Accumulated amortization, deferred finance costs	$ 857,000	763,000
Estimated amortization of deferred financing costs in year one	68,500
Interest Expense | BAML
Line of Credit Facility [Line Items]
Amortization of deferred financing costs	$ 321,000	$ 327,000	$ 225,000

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ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Accumulated Other Comprehensive Income [Rollforward]
Beginning balance	$ (440)
Reclassification adjustment for realized loss on designated derivatives	105
Ending balance	(345)	$ (440)
Net unrealized gain (loss) on derivatives
Accumulated Other Comprehensive Income [Rollforward]
Beginning balance	(440)	(266)	$ 20
Unrealized loss on designated derivatives	(10)	(174)	(286)
Ending balance	$ (345)	$ (440)	$ (266)

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS - Relationship with RAI (Details) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Related Party Transaction [Line Items]
Payment for insurance premiums	$ 1,800,000	$ 1,600,000
RAI
Related Party Transaction [Line Items]
Amount of losses covered by the insurance pool	2,500,000.0
General liability loss covered	50,000
Amount of property insurance covered by catastrophic insurance	140,000,000
Amount of general liability covered by catastrophic insurance	$ 51,000,000

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS - Relationship with the Advisor (Details) - Advisor	12 Months Ended
	Dec. 31, 2016
Related Party Transaction [Line Items]
Agreement term	1 year
Percentage acquisition fee paid to advisor	2.00%
Multiple for calculating monthly asset management fee	8.33%
Percentage annual asset management fee	1.00%
Disposition fee	50.00%
Disposition fee, as a percentage of the contract sales price	2.75%
Debt financing fee	0.50%
Maximum reimbursement limit on gross offering proceeds	2.50%

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS - Relationship with Resource Real Estate Opportunity Manager (Details) - Resource Real Estate Opportunity Manager, LLC	12 Months Ended
	Dec. 31, 2016
Related Party Transaction [Line Items]
Percentage earned on gross receipts	4.50%
Condition of occupancy percentage to receive minimum fee	75.00%
Period to receive minimum fee	12 months
Construction management fee percentage	5.00%
Debt servicing fee percentage	2.75%

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS - Schedule of Related Party Transactions (Details) - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Related Party Transaction [Line Items]
Receivables from related parties		$ 1,375	$ 1,421
Payables to related parties		2,055	1,185
RAI
Related Party Transaction [Line Items]
Receivables from related parties		1,375	1,421
Advisor | Operating expense reimbursements
Related Party Transaction [Line Items]
Payables to related parties		1,285	286
Advisor | Acquisition fees
Related Party Transaction [Line Items]
Fees earned / expenses paid to related parties	[1]	1,452	5,179	$ 8,591
Advisor | Asset management fees
Related Party Transaction [Line Items]
Fees earned / expenses paid to related parties	[2]	10,484	10,240	7,262
Advisor | Disposition fees
Related Party Transaction [Line Items]
Fees earned / expenses paid to related parties	[3]	686	1,140	422
Advisor | Debt financing fees
Related Party Transaction [Line Items]
Fees earned / expenses paid to related parties	[4]	532	697	1,623
Advisor | Overhead allocation
Related Party Transaction [Line Items]
Fees earned / expenses paid to related parties	[5]	5,621	3,733	2,227
Advisor | Internal audit fees
Related Party Transaction [Line Items]
Fees earned / expenses paid to related parties	[5]	44	41	0
Resource Real Estate Opportunity Manager, LLC | Operating expense reimbursements
Related Party Transaction [Line Items]
Payables to related parties		314	459
Fees earned / expenses paid to related parties	[6]	245	278	276
Resource Real Estate Opportunity Manager, LLC | Property management fees
Related Party Transaction [Line Items]
Payables to related parties		456	440
Fees earned / expenses paid to related parties	[2]	5,137	4,748	3,661
Resource Real Estate Opportunity Manager, LLC | Construction management fees
Related Party Transaction [Line Items]
Fees earned / expenses paid to related parties	[7]	926	1,895	1,685
Resource Real Estate Opportunity Manager, LLC | Information technology fees
Related Party Transaction [Line Items]
Fees earned / expenses paid to related parties	[5]	418	365	306
Resource Real Estate Opportunity Manager, LLC | Debt servicing fees
Related Party Transaction [Line Items]
Fees earned / expenses paid to related parties	[2]	15	33	8
Ledgewood
Related Party Transaction [Line Items]
Fees earned / expenses paid to related parties		121	169	143
Graphic Images
Related Party Transaction [Line Items]
Fees earned / expenses paid to related parties		$ 91	$ 59	$ 37

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

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

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

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

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

[6] (7)Included in Rental operating expenses on the consolidated statements of operations and comprehensive income (loss). Amount excludes the allocated payroll expenses described in Note 20- Operating Expenses.

[7] (6) Included in Rental Properties, net on the consolidated balance sheets.

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EQUITY - Preferred and Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands		12 Months Ended
		Dec. 31, 2016	Dec. 31, 2015
Securities Financing Transaction [Line Items]
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
Shares Issued (in shares)		74,975,022	72,333,652
Common stock, par value (in dollars per share)		$ 0.01	$ 0.01
Gross Proceeds		$ 726,203
Shares redeemed (in shares)		(2,968,433)
Total shares outstanding as of December 31 (in shares)		72,006,589
Private offering
Securities Financing Transaction [Line Items]
Shares Issued (in shares)		1,263,727
Gross Proceeds		$ 12,582
Private offering | Common Stock | Advisor
Securities Financing Transaction [Line Items]
Shares issued (in shares)		276,056
Public offering
Securities Financing Transaction [Line Items]
Shares Issued (in shares)	[1]	62,485,461
Gross Proceeds	[1]	$ 622,077
Stock dividends
Securities Financing Transaction [Line Items]
Shares Issued (in shares)		2,132,266
Gross Proceeds		$ 0
Distribution reinvestment plan
Securities Financing Transaction [Line Items]
Shares Issued (in shares)		9,078,068
Gross Proceeds, shares issued through distribution reinvestment plan		$ 91,389
Advisor
Securities Financing Transaction [Line Items]
Shares Issued (in shares)		15,500
Gross Proceeds		$ 155
Shares converted (in shares)		4,500

[1] (1) Includes 276,056 shares held by the Advisor.

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EQUITY - Convertible Stock (Details)	12 Months Ended
	Dec. 31, 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	10.00%
Aggregate percentage return	10.00%
Number of triggering events | Event	2
Triggering event - lessor of option one (as a percent)	25.00%
Triggering event - lessor of option two (as a percent)	15.00%
Percentage non-compounded annual return, option two	6.00%

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EQUITY - Redemption of Securities (Details) - $ / shares shares in Thousands	1 Months Ended						12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Apr. 30, 2016	Mar. 31, 2016	Jan. 31, 2016	Dec. 31, 2016
Equity [Abstract]
Shares redeemed (in shares)	270	520	1,069	47	196	150	2,252
Average Price Paid per Share (in dollars per share)	$ 10.83	$ 10.83	$ 10.83	$ 10.83	$ 10.59	$ 10.59
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 5%	5.00%						5.00%
Period of time shares are outstanding prior to the effective date of repurchase							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) $ / shares in Units, $ in Thousands													12 Months Ended			36 Months Ended
	Dec. 29, 2016 USD ($) $ / shares	Nov. 29, 2016 USD ($) $ / shares	Oct. 28, 2016 USD ($) $ / shares	Sep. 29, 2016 USD ($) $ / shares	Aug. 30, 2016 USD ($) $ / shares	Jul. 28, 2016 USD ($) $ / shares	Jun. 29, 2016 USD ($) $ / shares	May 27, 2016 USD ($) $ / shares	Apr. 28, 2016 USD ($) $ / shares	Mar. 30, 2016 USD ($) $ / shares	Feb. 26, 2016 USD ($) $ / shares	Jan. 28, 2016 USD ($) $ / shares	Dec. 31, 2016 USD ($) Distribution $ / shares shares	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Dec. 31, 2016 USD ($)
Securities Financing Transaction [Line Items]
Total Aggregate Distribution													$ 43,005
Aggregate Cash Distribution													$ 14,508
Per Common Share (in dollars per share) | $ / shares													$ 0.6000
Distributions Invested in Shares of Common Stock													$ 28,497	$ 28,959	$ 22,898	$ 80,400
Number of stock distributions (in distributions) | Distribution													12
1/28/2016
Securities Financing Transaction [Line Items]
Total Aggregate Distribution												$ 3,574
Aggregate Cash Distribution												$ 1,151
Per Common Share (in dollars per share) | $ / shares												$ 0.05
Distributions Invested in Shares of Common Stock												$ 2,423
2/26/2016
Securities Financing Transaction [Line Items]
Total Aggregate Distribution											$ 3,585
Aggregate Cash Distribution											$ 1,167
Per Common Share (in dollars per share) | $ / shares											$ 0.05
Distributions Invested in Shares of Common Stock											$ 2,418
3/30/2016
Securities Financing Transaction [Line Items]
Total Aggregate Distribution										$ 3,587
Aggregate Cash Distribution										$ 1,172
Per Common Share (in dollars per share) | $ / shares										$ 0.05
Distributions Invested in Shares of Common Stock										$ 2,415
4/28/2016
Securities Financing Transaction [Line Items]
Total Aggregate Distribution									$ 3,595
Aggregate Cash Distribution									$ 1,181
Per Common Share (in dollars per share) | $ / shares									$ 0.05
Distributions Invested in Shares of Common Stock									$ 2,414
5/27/2016
Securities Financing Transaction [Line Items]
Total Aggregate Distribution								$ 3,606
Aggregate Cash Distribution								$ 1,226
Per Common Share (in dollars per share) | $ / shares								$ 0.05
Distributions Invested in Shares of Common Stock								$ 2,380
6/29/2016
Securities Financing Transaction [Line Items]
Total Aggregate Distribution							$ 3,565
Aggregate Cash Distribution							$ 1,208
Per Common Share (in dollars per share) | $ / shares							$ 0.05
Distributions Invested in Shares of Common Stock							$ 2,357
7/28/2016
Securities Financing Transaction [Line Items]
Total Aggregate Distribution						$ 3,574
Aggregate Cash Distribution						$ 1,215
Per Common Share (in dollars per share) | $ / shares						$ 0.05
Distributions Invested in Shares of Common Stock						$ 2,359
8/30/2016
Securities Financing Transaction [Line Items]
Total Aggregate Distribution					$ 3,585
Aggregate Cash Distribution					$ 1,222
Per Common Share (in dollars per share) | $ / shares					$ 0.05
Distributions Invested in Shares of Common Stock					$ 2,363
9/29/2016
Securities Financing Transaction [Line Items]
Total Aggregate Distribution				$ 3,571
Aggregate Cash Distribution				$ 1,220
Per Common Share (in dollars per share) | $ / shares				$ 0.05
Distributions Invested in Shares of Common Stock				$ 2,351
10/28/2016
Securities Financing Transaction [Line Items]
Total Aggregate Distribution			$ 3,582
Aggregate Cash Distribution			$ 1,234
Per Common Share (in dollars per share) | $ / shares			$ 0.05
Distributions Invested in Shares of Common Stock			$ 2,348
11/29/2016
Securities Financing Transaction [Line Items]
Total Aggregate Distribution		$ 3,592
Aggregate Cash Distribution		$ 1,249
Per Common Share (in dollars per share) | $ / shares		$ 0.05
Distributions Invested in Shares of Common Stock		$ 2,343
12/29/2016
Securities Financing Transaction [Line Items]
Total Aggregate Distribution	$ 3,589
Aggregate Cash Distribution	$ 1,263
Per Common Share (in dollars per share) | $ / shares	$ 0.05
Distributions Invested in Shares of Common Stock	$ 2,326
Dividend distribution one | Common Stock
Securities Financing Transaction [Line Items]
Number of stock distributions (in distributions) | Distribution													7
Stock distributions (in shares) | shares													0.015
Dividend distribution two | Common Stock
Securities Financing Transaction [Line Items]
Number of stock distributions (in distributions) | Distribution													2
Stock distributions (in shares) | shares													0.0075
Dividend distribution three | Common Stock
Securities Financing Transaction [Line Items]
Number of stock distributions (in distributions) | Distribution													1
Stock distributions (in shares) | shares													0.00585
Dividend distribution four | Common Stock
Securities Financing Transaction [Line Items]
Number of stock distributions (in distributions) | Distribution													2
Stock distributions (in shares) | shares													0.005

XML

FAIR VALUE MEASURES AND DISCLOSURES - Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Assets:
Interest rate caps	$ 242	$ 32
Assets, Fair Value Disclosure	242	32
Level 1
Assets:
Interest rate caps	0	0
Assets, Fair Value Disclosure	0	0
Level 2
Assets:
Interest rate caps	242	32
Assets, Fair Value Disclosure	242	32
Level 3
Assets:
Interest rate caps	0	0
Assets, Fair Value Disclosure	$ 0	$ 0

XML

FAIR VALUE MEASURES AND DISCLOSURES - Schedule of Carrying and Fair Values (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Carrying Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loan held for investment, net	$ 769	$ 757
Preferred equity investment	0	3,886
Mortgage notes payable- outstanding borrowings	(627,088)	(595,384)
Mortgage notes payable- included in other liabilities associated with rental properties held for sale	0	(16,443)
Credit facility	0	(21,894)
Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loan held for investment, net	1,104	1,151
Preferred equity investment	0	3,908
Mortgage notes payable- outstanding borrowings	(620,578)	(573,693)
Mortgage notes payable- included in other liabilities associated with rental properties held for sale	0	(16,597)
Credit facility	$ 0	$ (21,894)

XML

DERIVATIVES AND HEDGING ACTIVITIES (Details)	12 Months Ended
	Dec. 31, 2016 USD ($) derivative	Dec. 31, 2015 USD ($)
Interest Rate Caps
Derivatives, Fair Value [Line Items]
Asset derivatives, fair value	$ 242,000	$ 32,000
Cash flow hedging
Derivatives, Fair Value [Line Items]
Loss due to hedge ineffectiveness		$ 0
Interest rate hedge to be reclassified during next 12 months	$ 147,928
Cash flow hedging | Interest Rate Caps
Derivatives, Fair Value [Line Items]
Number of Instruments | derivative	13
Notional	$ 270,475,000
Nesbit Palisades and Ivy at Clear Creek | Cash flow hedging
Derivatives, Fair Value [Line Items]
Loss due to hedge ineffectiveness	$ 104,941,000

XML

OPERATING EXPENSES (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2016 USD ($) Quarter	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)
Securities Financing Transaction [Line Items]
Rental operating - payroll	$ 14,790	$ 16,769	$ 14,784
Average invested assets	2.00%
Net income of operating expense	25.00%
Number of most recently completed fiscal quarters for which Company must limit its operating expenses | Quarter	4
Resource Real Estate Opportunity Manager, LLC
Securities Financing Transaction [Line Items]
Rental operating - payroll	$ 2,000	$ 1,900	$ 1,600

XML

INSURANCE PROCEEDS IN EXCESS OF COST BASIS (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Business Acquisition [Line Items]
Insurance proceeds in excess of cost basis	$ 985	$ 407	$ 425
Insurance proceeds received for casualty losses	3,171	794	0
Deerfield, The Westside Apartments, and Chisholm Place
Business Acquisition [Line Items]
Insurance proceeds received for casualty losses	735
Verona Apartment Homes, Skyview Apartment Homes, Meridian Pointe, and Stone Ridge
Business Acquisition [Line Items]
Insurance proceeds received for casualty losses	$ 250
Stone Ridge
Business Acquisition [Line Items]
Insurance proceeds received for casualty losses		247	369
Chisholm Place
Business Acquisition [Line Items]
Insurance proceeds received for casualty losses		$ 160
Mosaic Apartments
Business Acquisition [Line Items]
Insurance proceeds received for casualty losses			$ 56

XML

QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Quarterly Financial Information Disclosure [Abstract]
Revenues	$ 28,515	$ 28,575	$ 30,721	$ 30,556	$ 31,334	$ 30,845	$ 28,412	$ 27,734	$ 118,367	$ 118,325	$ 100,269
Net income (loss)	(10,173)	9,637	2,427	8,480	(10,834)	(10,662)	(12,476)	17,039	10,371	(16,933)	(48,198)
Less: net (income) loss attributable to noncontrolling interests	0	0	(25)	(6,281)	(186)	43	192	(11)	(6,306)	38	2,021
Net income (loss) attributable to common stockholders	$ (10,173)	$ 9,637	$ 2,402	$ 2,199	$ (11,020)	$ (10,619)	$ (12,284)	$ 17,028	$ 4,065	$ (16,895)	$ (46,177)
Net income (loss) per common share (in dollars per share)	$ (0.14)	$ 0.14	$ 0.03	$ 0.03	$ (0.16)	$ (0.15)	$ (0.18)	$ 0.25	$ 0.06	$ (0.24)	$ (0.68)

XML

SUBSEQUENT EVENTS (Details) - Subsequent event - USD ($) $ / shares in Units, $ in Millions	Jan. 27, 2017	Mar. 27, 2017	Mar. 20, 2017	Jan. 20, 2017
Subsequent Event [Line Items]
Declared divident per common share (USD per share)	$ 0.05
Redemption request		$ 7.5
Providence in the Park
Subsequent Event [Line Items]
Amount of financing				$ 47.0
Mosaic
Subsequent Event [Line Items]
Amount of financing			$ 6.1

XML

SCHEDULE III Real Estate and Accumulated Depreciation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2016
Real Estate and Accumulated Depreciation [Line Items]
Encumbrances				$ 627,088
Initial cost to Company				902,899
Cost capitalized subsequent to acquisition				107,365
Gross Amount at which carried at close of period	$ 1,063,211	$ 857,151	$ 406,149	1,010,264
Accumulated Depreciation	(77,363)	(45,133)	(15,776)	(107,810)
Investments in Rental Properties:
Balance, beginning of the period	1,063,211	857,151	406,149
Acquisitions	61,490	224,841	436,626
Improvements, etc.	28,024	43,018	37,384
Dispositions during the period	(142,461)	(61,799)	(23,008)
Balance, at close of period	1,010,264	1,063,211	857,151
Accumulated depreciation:
Balance, beginning of period	(77,363)	(45,133)	(15,776)
Sales	12,737	9,031	2,962
Disposals	819	652	478
Depreciation	(44,003)	(41,913)	(32,797)
Balance, end of period	(107,810)	$ (77,363)	$ (45,133)
Philadelphia, PA
Real Estate and Accumulated Depreciation [Line Items]
Encumbrances				15,225
Initial cost to Company				11,076
Cost capitalized subsequent to acquisition				4,388
Gross Amount at which carried at close of period	15,464			15,464
Accumulated Depreciation	(3,952)			(3,952)
Investments in Rental Properties:
Balance, at close of period	15,464
Accumulated depreciation:
Balance, end of period	$ (3,952)
Philadelphia, PA | Minimum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	3 years
Philadelphia, PA | Maximum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	27 years 6 months
Dayton, OH
Real Estate and Accumulated Depreciation [Line Items]
Encumbrances				13,100
Initial cost to Company				8,273
Cost capitalized subsequent to acquisition				1,567
Gross Amount at which carried at close of period	$ 9,840			9,840
Accumulated Depreciation	(2,126)			(2,126)
Investments in Rental Properties:
Balance, at close of period	9,840
Accumulated depreciation:
Balance, end of period	$ (2,126)
Dayton, OH | Minimum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	3 years
Dayton, OH | Maximum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	27 years 6 months
Cincinnati, OH
Real Estate and Accumulated Depreciation [Line Items]
Encumbrances				53,995
Initial cost to Company				39,341
Cost capitalized subsequent to acquisition				12,216
Gross Amount at which carried at close of period	$ 51,557			51,557
Accumulated Depreciation	(13,365)			(13,365)
Investments in Rental Properties:
Balance, at close of period	51,557
Accumulated depreciation:
Balance, end of period	$ (13,365)
Cincinnati, OH | Minimum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	3 years
Cincinnati, OH | Maximum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	27 years 6 months
Oklahoma City, OK
Real Estate and Accumulated Depreciation [Line Items]
Encumbrances				0
Initial cost to Company				1,961
Cost capitalized subsequent to acquisition				4,124
Gross Amount at which carried at close of period	$ 6,085			6,085
Accumulated Depreciation	(1,625)			(1,625)
Investments in Rental Properties:
Balance, at close of period	6,085
Accumulated depreciation:
Balance, end of period	$ (1,625)
Oklahoma City, OK | Minimum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	3 years
Oklahoma City, OK | Maximum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	27 years 6 months
Hermantown, MN
Real Estate and Accumulated Depreciation [Line Items]
Encumbrances				10,359
Initial cost to Company				9,620
Cost capitalized subsequent to acquisition				5,185
Gross Amount at which carried at close of period	$ 14,805			14,805
Accumulated Depreciation	(2,492)			(2,492)
Investments in Rental Properties:
Balance, at close of period	14,805
Accumulated depreciation:
Balance, end of period	$ (2,492)
Hermantown, MN | Minimum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	3 years
Hermantown, MN | Maximum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	27 years 6 months
Hoover, AL
Real Estate and Accumulated Depreciation [Line Items]
Encumbrances				11,375
Initial cost to Company				8,064
Cost capitalized subsequent to acquisition				3,482
Gross Amount at which carried at close of period	$ 11,546			11,546
Accumulated Depreciation	(2,103)			(2,103)
Investments in Rental Properties:
Balance, at close of period	11,546
Accumulated depreciation:
Balance, end of period	$ (2,103)
Hoover, AL | Minimum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	3 years
Hoover, AL | Maximum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	27 years 6 months
Houston, TX
Real Estate and Accumulated Depreciation [Line Items]
Encumbrances				18,690
Initial cost to Company				26,496
Cost capitalized subsequent to acquisition				4,087
Gross Amount at which carried at close of period	$ 30,583			30,583
Accumulated Depreciation	(4,963)			(4,963)
Investments in Rental Properties:
Balance, at close of period	30,583
Accumulated depreciation:
Balance, end of period	$ (4,963)
Houston, TX | Minimum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	3 years
Houston, TX | Maximum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	27 years 6 months
Plano, TX
Real Estate and Accumulated Depreciation [Line Items]
Encumbrances				36,820
Initial cost to Company				31,001
Cost capitalized subsequent to acquisition				5,044
Gross Amount at which carried at close of period	$ 36,045			36,045
Accumulated Depreciation	(5,082)			(5,082)
Investments in Rental Properties:
Balance, at close of period	36,045
Accumulated depreciation:
Balance, end of period	$ (5,082)
Plano, TX | Minimum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	3 years
Plano, TX | Maximum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	27 years 6 months
Newport News, VA
Real Estate and Accumulated Depreciation [Line Items]
Encumbrances				12,375
Initial cost to Company				17,583
Cost capitalized subsequent to acquisition				2,562
Gross Amount at which carried at close of period	$ 20,145			20,145
Accumulated Depreciation	(2,961)			(2,961)
Investments in Rental Properties:
Balance, at close of period	20,145
Accumulated depreciation:
Balance, end of period	$ (2,961)
Newport News, VA | Minimum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	3 years
Newport News, VA | Maximum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	27 years 6 months
Littleton, CO
Real Estate and Accumulated Depreciation [Line Items]
Encumbrances				32,970
Initial cost to Company				23,321
Cost capitalized subsequent to acquisition				9,769
Gross Amount at which carried at close of period	$ 33,090			33,090
Accumulated Depreciation	(3,986)			(3,986)
Investments in Rental Properties:
Balance, at close of period	33,090
Accumulated depreciation:
Balance, end of period	$ (3,986)
Littleton, CO | Minimum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	3 years
Littleton, CO | Maximum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	27 years 6 months
Westminster, CO
Real Estate and Accumulated Depreciation [Line Items]
Encumbrances				28,400
Initial cost to Company				29,509
Cost capitalized subsequent to acquisition				(2,122)
Gross Amount at which carried at close of period	$ 27,387			27,387
Accumulated Depreciation	(3,547)			(3,547)
Investments in Rental Properties:
Balance, at close of period	27,387
Accumulated depreciation:
Balance, end of period	$ (3,547)
Westminster, CO | Minimum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	3 years
Westminster, CO | Maximum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	27 years 6 months
San Antonio, TX
Real Estate and Accumulated Depreciation [Line Items]
Encumbrances				13,602
Initial cost to Company				21,831
Cost capitalized subsequent to acquisition				5,809
Gross Amount at which carried at close of period	$ 27,640			27,640
Accumulated Depreciation	(4,353)			(4,353)
Investments in Rental Properties:
Balance, at close of period	27,640
Accumulated depreciation:
Balance, end of period	$ (4,353)
San Antonio, TX | Minimum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	3 years
San Antonio, TX | Maximum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	27 years 6 months
Burnsville, MN
Real Estate and Accumulated Depreciation [Line Items]
Encumbrances				0
Initial cost to Company				32,142
Cost capitalized subsequent to acquisition				4,218
Gross Amount at which carried at close of period	$ 36,360			36,360
Accumulated Depreciation	(4,369)			(4,369)
Investments in Rental Properties:
Balance, at close of period	36,360
Accumulated depreciation:
Balance, end of period	$ (4,369)
Burnsville, MN | Minimum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	3 years
Burnsville, MN | Maximum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	27 years 6 months
Columbia, SC
Real Estate and Accumulated Depreciation [Line Items]
Encumbrances				5,227
Initial cost to Company				5,912
Cost capitalized subsequent to acquisition				2,897
Gross Amount at which carried at close of period	$ 8,809			8,809
Accumulated Depreciation	(1,562)			(1,562)
Investments in Rental Properties:
Balance, at close of period	8,809
Accumulated depreciation:
Balance, end of period	$ (1,562)
Columbia, SC | Minimum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	3 years
Columbia, SC | Maximum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	27 years 6 months
Alpharetta, GA
Real Estate and Accumulated Depreciation [Line Items]
Encumbrances				49,596
Initial cost to Company				69,111
Cost capitalized subsequent to acquisition				7,796
Gross Amount at which carried at close of period	$ 76,907			76,907
Accumulated Depreciation	(8,495)			(8,495)
Investments in Rental Properties:
Balance, at close of period	76,907
Accumulated depreciation:
Balance, end of period	$ (8,495)
Alpharetta, GA | Minimum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	3 years
Alpharetta, GA | Maximum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	27 years 6 months
Baton Rouge, LA
Real Estate and Accumulated Depreciation [Line Items]
Encumbrances				27,107
Initial cost to Company				42,001
Cost capitalized subsequent to acquisition				817
Gross Amount at which carried at close of period	$ 42,818			42,818
Accumulated Depreciation	(5,149)			(5,149)
Investments in Rental Properties:
Balance, at close of period	42,818
Accumulated depreciation:
Balance, end of period	$ (5,149)
Baton Rouge, LA | Minimum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	3 years
Baton Rouge, LA | Maximum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	27 years 6 months
Plano, TX
Real Estate and Accumulated Depreciation [Line Items]
Encumbrances				11,587
Initial cost to Company				14,562
Cost capitalized subsequent to acquisition				721
Gross Amount at which carried at close of period	$ 15,283			15,283
Accumulated Depreciation	(1,640)			(1,640)
Investments in Rental Properties:
Balance, at close of period	15,283
Accumulated depreciation:
Balance, end of period	$ (1,640)
Plano, TX | Minimum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	3 years
Plano, TX | Maximum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	27 years 6 months
Atlanta, GA
Real Estate and Accumulated Depreciation [Line Items]
Encumbrances				17,298
Initial cost to Company				28,911
Cost capitalized subsequent to acquisition				2,564
Gross Amount at which carried at close of period	$ 31,475			31,475
Accumulated Depreciation	(3,098)			(3,098)
Investments in Rental Properties:
Balance, at close of period	31,475
Accumulated depreciation:
Balance, end of period	$ (3,098)
Atlanta, GA | Minimum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	3 years
Atlanta, GA | Maximum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	27 years 6 months
Atlanta, GA
Real Estate and Accumulated Depreciation [Line Items]
Encumbrances				13,651
Initial cost to Company				21,796
Cost capitalized subsequent to acquisition				2,603
Gross Amount at which carried at close of period	$ 24,399			24,399
Accumulated Depreciation	(2,392)			(2,392)
Investments in Rental Properties:
Balance, at close of period	24,399
Accumulated depreciation:
Balance, end of period	$ (2,392)
Atlanta, GA | Minimum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	3 years
Atlanta, GA | Maximum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	27 years 6 months
Katy, TX
Real Estate and Accumulated Depreciation [Line Items]
Encumbrances				23,367
Initial cost to Company				31,385
Cost capitalized subsequent to acquisition				2,929
Gross Amount at which carried at close of period	$ 34,314			34,314
Accumulated Depreciation	(3,395)			(3,395)
Investments in Rental Properties:
Balance, at close of period	34,314
Accumulated depreciation:
Balance, end of period	$ (3,395)
Katy, TX | Minimum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	3 years
Katy, TX | Maximum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	27 years 6 months
Shawnee, KS
Real Estate and Accumulated Depreciation [Line Items]
Encumbrances				12,893
Initial cost to Company				18,250
Cost capitalized subsequent to acquisition				1,128
Gross Amount at which carried at close of period	$ 19,378			19,378
Accumulated Depreciation	(2,671)			(2,671)
Investments in Rental Properties:
Balance, at close of period	19,378
Accumulated depreciation:
Balance, end of period	$ (2,671)
Shawnee, KS | Minimum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	3 years
Shawnee, KS | Maximum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	27 years 6 months
Lee's Summit, MO
Real Estate and Accumulated Depreciation [Line Items]
Encumbrances				6,250
Initial cost to Company				11,898
Cost capitalized subsequent to acquisition				527
Gross Amount at which carried at close of period	$ 12,425			12,425
Accumulated Depreciation	(1,751)			(1,751)
Investments in Rental Properties:
Balance, at close of period	12,425
Accumulated depreciation:
Balance, end of period	$ (1,751)
Lee's Summit, MO | Minimum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	3 years
Lee's Summit, MO | Maximum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	27 years 6 months
Kansas City, MO
Real Estate and Accumulated Depreciation [Line Items]
Encumbrances				7,350
Initial cost to Company				9,691
Cost capitalized subsequent to acquisition				751
Gross Amount at which carried at close of period	$ 10,442			10,442
Accumulated Depreciation	(1,488)			(1,488)
Investments in Rental Properties:
Balance, at close of period	10,442
Accumulated depreciation:
Balance, end of period	$ (1,488)
Kansas City, MO | Minimum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	3 years
Kansas City, MO | Maximum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	27 years 6 months
San Antonio, TX
Real Estate and Accumulated Depreciation [Line Items]
Encumbrances				22,647
Initial cost to Company				34,554
Cost capitalized subsequent to acquisition				5,238
Gross Amount at which carried at close of period	$ 39,792			39,792
Accumulated Depreciation	(3,148)			(3,148)
Investments in Rental Properties:
Balance, at close of period	39,792
Accumulated depreciation:
Balance, end of period	$ (3,148)
San Antonio, TX | Minimum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	3 years
San Antonio, TX | Maximum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	27 years 6 months
Irving, TX
Real Estate and Accumulated Depreciation [Line Items]
Encumbrances				35,083
Initial cost to Company				47,075
Cost capitalized subsequent to acquisition				5,289
Gross Amount at which carried at close of period	$ 52,364			52,364
Accumulated Depreciation	(4,622)			(4,622)
Investments in Rental Properties:
Balance, at close of period	52,364
Accumulated depreciation:
Balance, end of period	$ (4,622)
Irving, TX | Minimum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	3 years
Irving, TX | Maximum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	27 years 6 months
Yorktown, VA
Real Estate and Accumulated Depreciation [Line Items]
Encumbrances				14,999
Initial cost to Company				21,204
Cost capitalized subsequent to acquisition				396
Gross Amount at which carried at close of period	$ 21,600			21,600
Accumulated Depreciation	(2,326)			(2,326)
Investments in Rental Properties:
Balance, at close of period	21,600
Accumulated depreciation:
Balance, end of period	$ (2,326)
Yorktown, VA | Minimum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	3 years
Yorktown, VA | Maximum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	27 years 6 months
Austin, TX
Real Estate and Accumulated Depreciation [Line Items]
Encumbrances				12,435
Initial cost to Company				23,370
Cost capitalized subsequent to acquisition				4,230
Gross Amount at which carried at close of period	$ 27,600			27,600
Accumulated Depreciation	(1,859)			(1,859)
Investments in Rental Properties:
Balance, at close of period	27,600
Accumulated depreciation:
Balance, end of period	$ (1,859)
Austin, TX | Minimum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	3 years
Austin, TX | Maximum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	27 years 6 months
Gilbert, AZ
Real Estate and Accumulated Depreciation [Line Items]
Encumbrances				26,280
Initial cost to Company				35,070
Cost capitalized subsequent to acquisition				4,061
Gross Amount at which carried at close of period	$ 39,131			39,131
Accumulated Depreciation	(2,389)			(2,389)
Investments in Rental Properties:
Balance, at close of period	39,131
Accumulated depreciation:
Balance, end of period	$ (2,389)
Gilbert, AZ | Minimum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	3 years
Gilbert, AZ | Maximum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	27 years 6 months
Orange County, CA
Real Estate and Accumulated Depreciation [Line Items]
Encumbrances				67,500
Initial cost to Company				116,036
Cost capitalized subsequent to acquisition				3,787
Gross Amount at which carried at close of period	$ 119,823			119,823
Accumulated Depreciation	(4,901)			(4,901)
Investments in Rental Properties:
Balance, at close of period	119,823
Accumulated depreciation:
Balance, end of period	$ (4,901)
Orange County, CA | Minimum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	3 years
Orange County, CA | Maximum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	27 years 6 months
Chula Vista, CA
Real Estate and Accumulated Depreciation [Line Items]
Encumbrances				26,907
Initial cost to Company				50,365
Cost capitalized subsequent to acquisition				2,066
Gross Amount at which carried at close of period	$ 52,431			52,431
Accumulated Depreciation	(2,000)			(2,000)
Investments in Rental Properties:
Balance, at close of period	52,431
Accumulated depreciation:
Balance, end of period	$ (2,000)
Chula Vista, CA | Minimum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	3 years
Chula Vista, CA | Maximum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	27 years 6 months
Arlington, TX
Real Estate and Accumulated Depreciation [Line Items]
Encumbrances				0
Initial cost to Company				61,490
Cost capitalized subsequent to acquisition				(764)
Gross Amount at which carried at close of period	$ 60,726			60,726
Accumulated Depreciation	0			$ 0
Investments in Rental Properties:
Balance, at close of period	60,726
Accumulated depreciation:
Balance, end of period	$ 0
Arlington, TX | Minimum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	3 years
Arlington, TX | Maximum
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	27 years 6 months

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SCHEDULE IV Mortgage Loans on Real Estate (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2016 USD ($)
Mortgage Loans on Real Estate [Line Items]
Face amount of mortgages	$ 1,058
Carrying amount of mortgages	769
Principal amount of loans subject to delinquent principal or interest	$ 0
Interest Rate	7.50%
Movement in Mortgage Loans on Real Estate [Roll Forward]
Balance, beginning of the period	$ 757
Interest accretion	33
Principal reductions	(21)
Balance, end of the period	769
Residential Columbia City, IN
Mortgage Loans on Real Estate [Line Items]
Face amount of mortgages	1,058
Carrying amount of mortgages	769
Principal amount of loans subject to delinquent principal or interest	$ 0
Interest Rate	7.50%