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, 2014

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

For the transition period from __________ to __________

Commission file number 333-184476

Resource Real Estate Opportunity REIT II, Inc.

(Exact name of registrant as specified in its charter)

Maryland	80-0854717
(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:

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	o	(Do not check if a smaller reporting company)	Smaller reporting company	þ

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.  The registrant is currently conducting an ongoing initial public offering of its shares of common stock pursuant to a Registration Statement on Form S-11, which shares are being sold at $10.00 per share, with discounts available for certain categories of purchasers.  There were 132,944 shares of common stock held by non-affiliates as of June 30, 2014, the last day of the registrant's most recently completed second fiscal quarter.

As of March 23, 2015, there were 12,653,262 outstanding shares of common stock of Resource Real Estate Opportunity REIT II, Inc.

Registrant incorporates by reference portions of the Resource Real Estate Opportunity REIT II, Inc. Definitive Proxy Statement for the 2015 Annual Meeting of Stockholders (Items 10, 11, 12, 13, and 14 of Part III).

RESOURCE REAL ESTATE OPPORTUNITY REIT II, INC.

INDEX TO ANNUAL REPORT

ON FORM 10-K

		PAGE
	Forward Looking Statements
PART I
Item 1.	Business	3
Item 1A.	Risk Factors	5
Item 1B.	Unresolved Staff Comments	5
Item 2.	Properties	5
Item 3.	Legal Proceedings	5
Item 4.	Mine Safety Disclosures	5
PART II
Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	6
Item 6	Selected Financial Data	8
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	8
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	18
Item 8.	Financial Statements and Supplementary Data	19
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	19
Item 9A.	Controls and Procedures	20
Item 9B.	Other Information	20
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	21
Item 11.	Executive Compensation	21
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters	21
Item 13.	Certain Relationships and Related Transactions, and Director Independence	21
Item 14.	Principal Accounting Fees and Services	21
PART IV.
Item 15.	Exhibits and Financial Statement Schedule	22
SIGNATURES		23

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.  Actual results may differ materially from those contemplated by such forward-looking statements.  Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.  We undertake no obligation to publicly revise or update these forward-looking statements to reflect events or circumstances after the date of this report, except as may be required under applicable law.

The following are some of the risks and uncertainties, although not all of the risks and uncertainties, that could cause our actual results to differ materially from those presented in our forward-looking statements:

• We have a limited operating history. As of December 31, 2014, we owned two multifamily properties. Because we have not identified any additional real estate assets to acquire with proceeds from our initial public offering we are considered a blind pool, and our stockholders will not have an opportunity to evaluate our investments before we make them, making an investment in us more speculative.

• We are dependent on our advisor to select investments and conduct our operations. Our advisor has no prior operating history and no prior experience operating a public company. This inexperience makes our future performance difficult to predict.

• Our executive officers and some of our directors are also officers, directors, managers or key professionals of our advisor, our dealer manager and other affiliated Resource Real Estate entities. As a result, they will face conflicts of interest, including significant conflicts created by our advisor’s compensation arrangements with us and other programs sponsored by Resource Real Estate and conflicts in allocating time among us and these other programs. These conflicts could result in action or inaction that is not in the best interests of our stockholders.

• We pay substantial fees to and expenses of our advisor, its affiliates and participating broker-dealers, which payments increase the risk that our stockholders will not earn a profit on their investment.

• Our advisor and its affiliates receive fees in connection with transactions involving the acquisition and management of our investments. These fees 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.

• There is no limit on the amount we can borrow to acquire a single real estate investment, but pursuant to our charter, we may not leverage our assets with debt financing such that our borrowings would exceed 300% of our net assets unless a majority of the members of our conflicts committee find substantial justification for borrowing a greater amount.

• We may lack property diversification if we do not raise a substantial amount of proceeds in our initial public offering.

• Our charter permits us to pay distributions from any source without limitation, including from offering proceeds, borrowings, sales of assets or waivers or deferrals of fees otherwise owed to our advisor. To the extent these distributions exceed our net income or net capital gain, a greater proportion of your distributions will generally represent a return of capital as opposed to current income or gain, as applicable.

• We may experience adverse business developments or conditions similar to those affecting certain programs sponsored by our sponsor, which could limit our ability to make distributions and could decrease the value of an investment in us.

• Disruptions in the financial markets and sluggish economic conditions could adversely affect our ability to implement our business strategy and generate returns to our stockholders.

• Our failure to qualify as a REIT for federal income tax purposes would reduce the amount of income we have available for distribution and limit our ability to make distributions to our stockholders.

• 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.

All forward-looking statements should be read in light of the risks described above and identified in the “Risk Factors” section of our Registration Statement on Form S-11 (File No. 333-184476) filed with the Securities and Exchange Commission (the “SEC”), as the same may be amended and supplemented from time to time.

PART I

ITEM 1. BUSINESS

General

Resource Real Estate Opportunity REIT II, Inc. is a Maryland corporation that was formed on September 28, 2012. As used herein, the terms “we,” “our” and “us” refer to Resource Real Estate Opportunity REIT II, Inc. and, as required by context RRE Opportunity OP II, LP, a Delaware limited partnership, and to its subsidiaries. We focus primarily on acquiring underperforming or distressed real estate and real estate loans. We intend to elect 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, 2014. Our objective is to invest in multifamily assets across the entire spectrum of investments in order to provide stockholders with growing cash flow and increasing asset values.

As of December 31, 2014, we owned two multifamily properties, as described further in “Item 2. Properties”. We intend to continue to purchase a diversified portfolio of underperforming U.S. commercial real estate and real estate-related debt, 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 II, LLC, which we refer to as our Advisor, an indirect wholly owned subsidiary of Resource America, Inc., or RAI, a publicly traded company (NASDAQ: REXI) operating in the real estate, financial fund management and commercial finance sectors. To provide its services, the Advisor draws upon RAI, its management team and their collective investment experience.

Our Offerings

On February 6, 2014, our Registration Statement on Form S-11 (File No. 333-184476), covering a public offering of up to 100,000,000 shares of common stock in our primary offering and 10,000,000 shares of common stock under our distribution reinvestment plan, was declared effective under the Securities Act of 1933, as amended (the "Securities Act"). We retained Resource Securities, an affiliate of our Advisor, as the dealer manager for our offering. We are offering 100,000,000 shares of common stock in our primary offering at an aggregate offering price of up to $1.0 billion, or $10 per share with discounts available to certain categories of purchasers. The 10,000,000 shares offered under our distribution reinvestment plan are initially being offered at an aggregate offering price of $95.0 million, or $9.50 per share. As of December 31, 2014, our Advisor has incurred organizational and offering costs on our behalf of approximately $3.0 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 will consist, at the time of acquisition, of commercial real estate assets, principally (i) underperforming multifamily rental properties which we will renovate and stabilize in order to increase rents, (ii) distressed real estate owned by financial institutions, usually as a result of foreclosure, and non-performing or distressed loans, including first- and second-priority mortgage loans and other loans which we will resolve, and (iii) performing loans, including first- and second-priority mortgage loans and other loans we originate or purchases either directly or with a co-investor or joint venture partner. We anticipate acquiring approximately 60% of our total assets in category (i) listed above, 20% of total assets in category (ii) listed above, and 20% of our total assets in category (iii) listed above. We believe multiple opportunities exist within the multifamily industry today and will continue to present themselves over the next few years to real estate investors who possess the following characteristics: (i) extensive experience in multifamily investing, (ii) strong management platforms specializing in operational and financial performance optimization, (iii) financial sophistication allowing them to benefit from complex opportunities and (iv) the overall scale and breadth of a national real estate platform in both the equity and debt markets. We seek to utilize our sponsor's dedicated multifamily investing and lending relationships to take advantage of the full range of opportunities across the entire multifamily spectrum of investments. If we are only able to raise an amount substantially less than our maximum offering, our plan of operation will be scaled down considerably and we would expect to acquire a limited number of assets. 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 that our Advisor, presents us with investment opportunities that allow us to meet the requirements to be treated as a REIT, under the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"), and to maintain our exclusion from regulation as an investment company under the Investment Company Act of 1940, our portfolio composition may vary from what we initially expect.

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Our Advisor, its predecessors and its affiliates have over 20 years of experience in acquiring, managing and disposing of real estate assets. We believe their extensive experience in underperforming and distressed real estate assets and multifamily rental properties along with their proven experience sponsoring a publicly traded REIT and their long standing contacts in the financial services industry distinguish us from our competitors.

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 certain significant proposed real estate property investments and 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 cost of our assets unless a majority of our Conflicts Committee 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 $1.2 million in us and as of December 31, 2014 it owned 134,944 shares of our common stock and 50,000 shares of our convertible stock. Under certain circumstances, the convertible shares may be converted into shares of our common stock.

We have a management agreement with Resource Real Estate Opportunity Manager II, LLC, an affiliate of our Advisor, or our Manager, to provide property management services, as applicable, for most, if not all, of the properties or other real estate related assets we acquire, provided our Advisor is able to control the operational management of such acquisitions. 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.

Resource Real Estate Management, Inc. d/b/a “Resource Residential,” an affiliate of RAI, is a property management company that as of December 31, 2014, managed over 75 multifamily rental properties in 24 states with over 20,000 units. Resource Residential has over 500 employees. Our Manager has subcontracted with Resource Residential 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.

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 them. 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.

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.

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Employees and Economic Dependency

We have no paid employees. The employees of our Advisor or 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, 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, Current Reports on Form 8-K and all amendments to those reports on our website,www.resourcereit2.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

Omitted as permitted under rules applicable to smaller reporting companies.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 2. PROPERTIES

As of December 31, 2014, we owned two multifamily properties encompassing approximately 467,247 rentable square feet. We acquired these properties from third parties unaffiliated with us or our Advisor. The following is a summary of our real estate properties as of December 31, 2014:

Multifamily Community Name	City and State	Number of Units	Date of Acquisition	Purchase Price (1)		Year of Construction	Average Unit Size (Sq. Ft.)	Physical Occupancy Rate (2)		Effective Monthly Revenue per Unit (3)		Mortgage Debt Secured by Property
Bear Creek	Dallas, Texas	152	6/4/2014	$	9,500,000	1980	856	95.4	%	$	771	$	7,465,000
Oak Hill	Fort Worth, Texas	360	12/19/2014	47,000,000		1999	952	93.1	%	1,133		31,075,000

(1) Purchase price excludes closing costs and acquisition expenses.

(2) Physical occupancy rate is defined as the units occupied as of December 31, 2014 divided by the total number of residential units

(3) Effective monthly rental revenue per unit has been calculated based on the leases in effect as of December 31, 2014, 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 does not include other charges for storage, parking, pets, cleaning, clubhouse or other miscellaneous amounts.

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 PROPERTIES

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 23, 2015, we had 12,653,262 shares of common stock outstanding held by a total of 3,123 stockholders. 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. Pursuant to our initial public offering, we are selling shares of our common stock to the public at a price of $10.00 per share and at a price of $9.50 per share pursuant to our distribution reinvestment plan. Unless and until our shares are listed on a national securities exchange, it is not expected that a public market for our shares will develop.

To assist Financial Industry Regulatory Authority, or FINRA, members and their associated persons that participated in our initial public offering, in meeting their customer account statement reporting obligations pursuant to applicable FINRA and National Association of Securities Dealers, or NASD, Conduct Rules, we disclose in each annual report distributed to stockholders a per-share estimated value of our common stock, the method by which it was developed, and the date of the data used to develop the estimated value. For this purpose, the estimated value of our shares of common stock is $10 per share as of December 31, 2014. The basis for this valuation is the primary public offering price of $10 per share (ignoring purchase price discounts for certain categories of purchasers). However, this estimated value is likely to be higher than the price at which you could resell your shares because (1) our public offering involved the payment of underwriting compensation and other directed selling efforts, which payments and efforts were likely to produce a higher sales price than could otherwise have been obtained, and (2) there is no public market for our shares. Moreover, this estimated value is likely to be higher than the amount you would receive per share if we were to liquidate at this time because of the up-front fees that we pay in connection with the issuance of our shares. On or before April 11, 2016, how we report our estimated value per share will change. Initially we will report the net investment amount of our shares, which will be based on the “amount available for investment/net investment amount” percentage shown in the estimated use of proceeds table in the prospectus for our initial public offering. This estimated per share value will be accompanied by any disclosures required under the FINRA and NASD Conduct Rules. No later than October 30, 2016, which date is 150 days following the second anniversary of the date we broke escrow in our initial public offering, we will provide a net asset value, or NAV, per share. In determining our NAV per share, we will follow the prescribed methodologies of Practice Guideline 2013-01, Valuations of Publicly Registered Non-Listed REITs, issued by the Investment Program Associate (“IPA”) in April 2013 (the “IPA Guidelines”). Once we announce an NAV per share we generally expect to update the NAV per share every 12 months.

Unregistered Sale of Equity Securities

All securities sold by us during the year ended December 31, 2014 were sold in an offering registered under the Securities Act.

Use of Proceeds of Registered Securities

On February 6, 2014, our Registration Statement on Form S-11 (File No. 333-184476), covering a public offering of up to 100,000,000 shares of common stock in our primary offering and 10,000,000 shares of common stock under our distribution reinvestment plan, was declared effective under the Securities Act. We retained Resource Securities, an affiliate of our Advisor, as the dealer manager for our offering. We are offering 100,000,000 shares of common stock in our primary offering at an aggregate offering price of up to $1.0 billion, or $10 per share with discounts available to certain categories of purchasers. The 10,000,000 shares offered under our distribution reinvestment plan are initially being offered at an aggregate offering price of $95.0 million, or $9.50 per share. As of December 31, 2014, our Advisor has incurred offering costs on our behalf of approximately $3.0 million.

As of December 31, 2014, a total of 4.8 million shares, including shares purchased by our Advisor, have been issued in connection with our public offering resulting in gross offering proceeds of $47.1 million. From the commencement of our public offering through December 31, 2014, we incurred selling commissions, dealer manager fees, other underwriting compensation and other organization and offering costs in the amounts set forth below. We generally paid selling commissions and dealer manager fees to our affiliated dealer manager, Resource Securities, for the sale of shares in our primary offering and Resource Securities reallowed all selling commissions and a portion of the dealer manager fees to participating broker-dealers. In addition, we reimburse our Advisor and Resource Securities for certain organizational and offering costs.

6

Type of Expense	Amount
Selling commissions	$	3,065,048
Dealer manager fees	1,362,620
Other organization and offering costs (excluding underwriting compensation)	734,492
Total expenses	$	5,162,160

From the commencement of our initial public offering through December 31, 2014, the net offering proceeds to us, after deducting the total expenses incurred as described above, were approximately $41.5 million. As of December 31, 2014, we have used the net proceeds from our ongoing initial public offering and debt financing to acquire approximately $56.5 million in real estate investments. Of the amount used for the purchase of these investments, approximately $2.8 million was paid to our Advisor as acquisition and advisory fees and acquisition expense reimbursements.

Redemption of Securities

Our board of directors has adopted a share redemption program that may enable stockholders to sell their shares to us after they have held them for at least one year, subject to the significant conditions and limitations of the program. In its sole discretion, our board of directors can amend, suspend or terminate the program upon 30 days’ notice without stockholder approval. Except for redemptions sought upon a stockholder’s death, qualifying disability or confinement to a long-term care facility and prior to the time we establish an NAV per share of our common stock, the purchase price for shares redeemed under the redemption program will be as follows:

• For those shares held by the redeeming stockholder for at least one year, 92.5% of the price paid to acquire the shares from us;

• For those shares held by the redeeming stockholder for at least two years, 95.0% of the price paid to acquire the shares from us;

• For those shares held by the redeeming stockholder for at least three years, 97.5% of the price paid to acquire the shares from us; and

• For those shares held by the redeeming stockholder for at least four years, 100% of the price paid to acquire the shares from us.

The purchase price per share for redemptions sought upon a stockholder’s death or qualifying disability or confinement to a long-term care facility, will be equal to the average issue price per share of the stockholder’s shares.

Notwithstanding the foregoing, until we establish an NAV per share, shares received as a stock distribution will be redeemed at a purchase price of $0.00. In addition, the purchase price per share will be adjusted for any stock combinations, splits, recapitalizations and the like with respect to the shares of common stock and reduced by the aggregate amount of net sale or refinance proceeds per share, if any, distributed to the redeeming stockholder prior to the redemption date.

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. 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. These limitations apply to all redemptions, including redemptions sought upon a stockholder’s death, qualifying disability or confinement to a long-term care facility.

During the year ended December 31, 2014, we did not redeem any of our securities as no securities were tendered for redemption.

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Distribution Information

For the year endedDecember 31, 2014, the Company paid aggregate distributions of $328,785, including $113,952 of distributions paid in cash and $214,833 of distributions reinvested in shares of common stock through the Company's distribution reinvestment plan. Distributions declared, distributions paid and cash flows provided by (used in) operating activities were as follows for year endedDecember 31, 2014:

	Distributions Paid												Distributions Declared				Sources of Distributions Paid
2014	Cash		Distributions Reinvested (DRIP)		Total		Cash Provided By (Used In ) Operating Activities - Quarter to Date			Cash Provided By (Used In ) Operating Activities - Year to Date			Total		Per Share		Amount Paid from Operating Activities/Percent of Total Distributions Paid	Amount Paid from Debt Financing/Percent of Total Distributions Paid
First Quarter	$	—	$	—	$	—	$	99		$	99		$	—	$	—	-/-	-/-
Second Quarter	$	—	$	—	$	—	$	2,174,915		$	2,175,014		$	60,250	$	0.00068493	-/-	-/-
Third Quarter	$	14,404	$	16,151	$	30,555	$	(585,334	)	$	1,589,680		$	—	$	—	$30,555/100%	-/-
Fourth Quarter	$	99,548	$	198,682	$	298,230	$	(3,163,691	)	$	(1,574,011	)	$	527,913	$	0.00095890	-/-	$298,230/100%
Total	$	113,952	$	214,833	$	328,785	$	(1,574,011	)				$	588,163

We intend to elect to be taxed as a REIT and to operate as a REIT beginning with our taxable year ended December 31, 2014. 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.

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 loss for the year ended December 31, 2014 was $3.8 million and net cash used in operating activities was $1.6 million. Our cumulative cash distributions paid and net loss from inception through December 31, 2014 were $328,785 and $3.9 million, respectively. We have funded our cumulative distributions, which includes net cash distributions and distributions reinvested by stockholders, with cash flow from operating activities 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 have and will continue to make distributions with respect to the shares of common stock in sole discretion of the board of directors. No distributions will be made with respect to shares of our convertible stock.

ITEM 6. SELECTED FINANCIAL DATA

Selected financial data has been omitted as permitted under rules applicable to smaller reporting companies.

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

AND RESULTS OF OPERATIONS (unaudited)

The following discussion and analysis should be read in conjunction with the accompanying financial statements of Resource Real Estate Opportunity REIT II, Inc. and the notes thereto.

Overview

We are a Maryland corporation that intends to invest in multifamily assets across the entire spectrum of investments in order to provide investors with growing cash flow and increasing asset values. Our targeted portfolio will consist, at the time of acquisition, of commercial real estate assets, principally (i) underperforming multifamily rental properties which we will renovate and stabilize in order to increase rents, (ii) distressed real estate owned by financial institutions, usually as a result of foreclosure, and non-performing or distressed loans, including first- and second-priority mortgage loans and other loans which we will resolve, and (iii) performing loans, including first- and second-priority mortgage loans and other loans we originate or purchase either directly or with a co-investor or joint venture partner. We anticipate acquiring approximately 60% of our total assets in category (i) listed above, 20% of total assets in category (ii) listed above, and 20% of our total assets in category (iii) listed above. We believe multiple opportunities exist within the multifamily industry today and will continue to present themselves over the next few years to real estate investors who possess the following characteristics: (i) extensive experience in multifamily investing, (ii) strong management platforms specializing in operational and financial performance optimization, (iii) financial sophistication allowing them to benefit from complex opportunities and (iv) the overall scale and breadth of a national real estate platform in both the equity and debt markets. If we are only able to raise an amount substantially less than our maximum offering, our plan of operation will be scaled down considerably and we would expect to acquire a limited number of assets. 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 that our Advisor presents us with investment opportunities that allow us to meet the requirements to be treated as a REIT, under the Internal Revenue Code, and to maintain our exclusion from regulation as an investment company under the Investment Company Act of 1940, our portfolio composition may vary from what we initially expect.

We commenced the public offering of our common stock in February 2014. We describe this offering in “Liquidity and Capital Resources,” below.

Results of Operations

We were formed on September 28, 2012.  We commenced active real estate operations on June 4, 2014 with the acquisition of our first multi-family property.  As of December 31, 2014, we owned two multifamily 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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Year ended December 31, 2014 Compared to the Year ended December 31, 2013

As a result of the timing of our commencement of our public offering and active real estate operations, comparative operating results are not relevant to a discussion of operations for the two periods represented. We expect revenue and expenses to increase in future periods as we acquire additional properties. The following table sets forth the results of our operations:

	Years Ended
	December 31,
	2014			2013
Revenues:
Rental income	$	991,543		$	—
Interest income	8,251			451
Total revenues	999,794			451
Expenses:
Rental operating	689,325			—
Acquisition costs	1,588,944			—
Management fees - related parties	127,496			—
General and administrative	1,472,181			—
Loss on disposal of assets	198,840			—
Depreciation and amortization expense	531,058			—
Total expenses	4,607,844			—
(Loss) income before other expense	(3,608,050		)	451
Other expense:
Interest expense	158,842			—
Net (loss) income	$	(3,766,892	)	$	451

Revenues. During the year ended December 31, 2014, our revenue was primarily from the rent of our multifamily properties.

Expenses.  Our operating expenses for the year ended December 31, 2014 were from the ongoing operations of our business and the acquisition of two operating properties. Accordingly, we incurred management fees, general and administrative expenses, and depreciation and amortization expenses.  

◦ General and administrative expenses related to the start up of early operations were $1.5 million, primarily related to the following:

◦ Company level expenses included $906,187 in payroll costs allocated to us by our Advisor, $144,225 of director and officer's insurance, $126,261 of director fees, and $165,564 of professional fees.

◦ Property level expenses of $90,766 were related to the operations of our two multifamily properties.

◦ Acquisition costs of $1.6 million related to the acquisition of our two multifamily properties with an aggregate purchase price of $56.5 million.

◦ Loss on disposal of assets of $198,840related to the disposition of existing appliance packages at Bear Creek.

◦ We recorded $158,842 of interest expense related to the mortgage loans and bridge loan secured to finance the property acquisitions, as well as amortization of deferred financing costs.

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Liquidity and Capital Resources

We are offering and selling to the public in our public offering up to $1.0 billion in shares of common stock, $0.01 par value per share, at $10 per share. We are also offering up to $95.0 million in shares of our common stock to be issued pursuant to our distribution reinvestment plan under which our stockholders may elect to have distributions reinvested in additional shares at $9.50 per share.

We anticipate deriving the capital required to purchase real estate investments and conduct our operations from the proceeds of our public offering and any future offerings we may conduct, from secured or unsecured financings from banks or other lenders, from proceeds from the sale of assets and from any undistributed funds from our operations. In addition, our Advisor has and will advance funds to us for certain accrued organization and offering costs. As of December 31, 2014, we had not identified any additional sources of financing or additional investments.

If we are unable to raise substantial funds in the offering, we will make fewer investments resulting in less diversification in terms of the type, number and size of investments we make and the value of an investment in us will fluctuate with the performance of the specific assets we acquire. Further, we will have certain fixed operating expenses, including certain expenses as a publicly offered REIT, regardless of whether we are able to raise substantial funds in our offering. Our inability to raise substantial funds would increase our fixed operating expenses as a percentage of gross income, reducing our net income and limiting our ability to make distributions. As of December 31, 2014, we had raised $46.7 million in our public offering.

We intend to allocate funds as necessary to aid our objective of preserving value for our investors by supporting the maintenance and viability of properties we acquire in the future. If such allocations 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 when we need them or upon acceptable terms.

We may obtain REIT-level financing through a line of credit from third-party financial institutions or other commercial lenders. Our assets will serve as collateral for this type of debt incurred to acquire real estate investments. In addition to debt financing at the REIT-level, we may also finance the acquisition costs of individual real estate investments, as well as the acquisition costs of all or a group of real estate investments acquired by us, by causing our subsidiaries to borrow directly from third-party financial institutions or other commercial lenders. Under these circumstances, our Advisor anticipates that certain properties acquired will serve as collateral for the debt we incur to acquire those particular properties and that we will seek to obtain nonrecourse financing for the acquisition of the properties. However, there is no guarantee that our Advisor will be successful in obtaining financing arrangements on a property-by-property basis and that the loans would be nonrecourse to us. Finally, we may also obtain seller financing with respect to specific assets that we acquire.

In addition to making investments in accordance with our investment objectives, we expect to use our capital resources to make payments to our Advisor and the dealer manager of our public offering, which is an affiliate of our Advisor. During our organization and offering stage, these payments will include payments to the dealer manager for selling commissions and the dealer manager fee and payments to the dealer manager and our Advisor for reimbursement of organization and offering expenses. However, our Advisor has agreed to reimburse us to the extent that selling commissions, the dealer manager fee and other organization and offering expenses incurred by us exceed 15% of our gross offering proceeds. During our acquisition and development stage, we expect to make payments to our Advisor in connection with the selection or purchase of real estate investments, the management of our assets and costs incurred by our Advisor in providing services to us. We describe these payments in more detail in Note 11 to our consolidated financial statements.

Capital Expenditures

We deployed a total of $109,264 during the year ended December 31, 2014 for capital expenditures primarily related to unit rehabilitations at Bear Creek, our first multifamily real estate investment. We have budgeted over the next two years an additional $3.2 million for additional capital expenditures at Bear Creek and $7.6 million for capital expenditures at Oak Hill.

Gross Offering Proceeds

As of December 31, 2014, we had an aggregate of 4,759,567 shares of $0.01 par value common stock outstanding, including the Advisor's additional purchase of 117,778 shares of common stock for $1.1 million, as follows:

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	Common
	Shares Issued	Gross Proceeds
Initial public offering	4,702,399	$	46,748,354
Shares issued through stock distributions	19,554	—
Shares issued through distribution reinvestment plan	22,614	214,833
Advisor's initial investment, net of 5,000 share conversion	15,000	150,000
	4,759,567	$	47,113,187

Mortgage Debt

The following is a summary of our mortgage notes payable:

	Balance Outstanding at		Maturity Date	Interest Rate		Average Monthly Debt Service		Interest Expense Incurred for the
Collateral	December 31, 2014							Year ended December 31, 2014
Bear Creek	$	7,465,000	7/1/2024	2.54	%	$	15,901	$	110,302
Oak Hill	31,075,000		1/1/2025	2.07	%	54,323		36,557
	$	38,540,000

On June 4, 2014, in connection with our acquisition of Bear Creek, we entered into a $7.5 million, 10-year secured mortgage loan with Berkadia Commercial Mortgage, LLC, (the "Bear Creek Mortgage Loan"), secured by Bear Creek. The Bear Creek Mortgage Loan, which matures on July 1, 2024, bears interest at a floating rate of one-month London InterBank Offered Rate, or LIBOR, plus 2.37%. As of December 31, 2014, the interest rate was 2.54%. Monthly payments are initially interest only. Beginning with the August 2018 payment, monthly payments will include interest and repayments of principal in the amount of approximately $23,432 per month.

On December 19, 2014, in connection with the acquisition of Oak Hill, we entered into a $31.1 million, secured mortgage loan with M&T Reality Capital Corporation (the "Oak Hill Mortgage Loan"), secured by the property. The Oak Hill Mortgage Loan, which matures on January 1, 2025, bears interest at a floating rate of one-month LIBOR plus 1.90%. As of December 31, 2014, the interest rate was 2.07%. Monthly payments are initially interest only. Beginning with the February 2017 payment, monthly payments will include interest and principal in the amount of approximately $109,047 per month.

On June 4, 2014, the Advisor provided us a $1.3 million bridge loan, (the "Bridge Loan"). We used the proceeds of the Bridge Loan to partially finance the acquisition of Bear Creek. The Bridge Loan, which was scheduled to mature on December 4, 2014, incurred interest at an annual rate of LIBOR plus 3.0%. As of December 31, 2014, we had repaid the Bridge Loan in full and paid $2,242 in interest.

Operating Properties

As of December 31, 2014, our wholly-owned interests in multifamily properties were as follows:

Subsidiary	Apartment Complex	Number of Units	Property Location
RRE Bear Creek Holdings, LLC, or Bear Creek	Bear Creek	152	Dallas, TX
RRE Oak Hill Holdings, LLC, or Oak Hill	Oak Hill	360	Fort Worth, TX
		512

As both of our multifamily properties are located in the Dallas-Fort Worth area, our portfolio is currently particularly susceptible to adverse economic developments in this real estate market. Any adverse economic or real estate developments in this market, 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 negatively affect our liquidity and adversely affect our ability to fund our ongoing operations.

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Organization and Offering Costs

Our Advisor has advanced funds to us for certain organization and offering costs.  We reimburse the Advisor for all of the expenses paid or incurred by our Advisor or its affiliates on our behalf or in connection with the services provided to us in relation to our ongoing public offering.  This includes all organization and offering costs of other than selling commission and dealer manager fees, but only to the extent that such reimbursement will not cause organization and offering expenses (other than selling commissions and the dealer manager fee) to exceed 2.5% of gross offering proceeds as of the date of such reimbursement.  As of December 31, 2014, the Advisor has advanced a total of $3.0 million for organization and offering costs and received $734,493 in reimbursements.    

Acquisition and Asset Management Costs

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

Operating Expenses

Under our charter, commencing with the four fiscal quarters ending June 30, 2015, our Advisor must reimburse us the amount by which our aggregate total operating expenses for the four fiscal quarters then ended exceed the greater of 2% of our average invested assets or 25% of our net income, unless the conflicts committee has determined that such excess expenses were justified based on unusual and non-recurring factors. “Average invested assets” means the average monthly book value of our assets invested, directly or indirectly, in equity interests in and loans secured by real estate during the 12-month period before deducting depreciation, bad debts or other non-cash reserves. “Total operating expenses” means all expenses paid or incurred by us, as determined under Generally Accepted Accounting Principles ("GAAP"), that are in any way related to our operation, including advisory fees, but excluding (a) the expenses of raising capital such as organization and offering expenses, legal, audit, accounting, underwriting, brokerage, listing, registration and other fees, printing and other such expenses and taxes incurred in connection with the issuance, distribution, transfer, registration and stock exchange listing of our stock; (b) interest payments; (c) taxes; (d) non-cash expenditures such as depreciation, amortization and bad debt reserves; (e) reasonable incentive fees based on the gain in the sale of our assets; and (f) acquisition fees, acquisition expenses (including expenses relating to potential investments that we do not close), disposition fees on the resale of property and other expenses connected with the acquisition, disposition and ownership of real estate interests, loans or other property (including the costs of foreclosure, insurance premiums, legal services, maintenance, repair and improvement of property).

Distributions     

For the year endedDecember 31, 2014, the Company paid aggregate distributions of $328,785, including $113,952 of distributions paid in cash and $214,833 of distributions reinvested in shares of common stock through the Company's distribution reinvestment plan, as follows:

Authorization Date	Per Common Share		Record Date	Distribution Date	Distributions invested in shares of Common Stock		Net Cash Distributions		Total Aggregate Distributions
June 5, 2014	$	0.00068493	July 31, 2014	August 1, 2014	$	5,065	$	5,560	$	10,625
June 5, 2014	0.00068493		August 31, 2014	September 2, 2014	11,086		8,844		19,930
June 5, 2014	0.00068493		September 30, 2014	October 1, 2014	18,497		11,197		29,694
October 6, 2014	0.00082192		October 30, 2014	October 31, 2014	27,143		13,970		41,113
October 30, 2014	0.00068493		November 26, 2014	November 28, 2014	31,213		15,113		46,326
November 13, 2014	0.00164384		December 30, 2014	December 31, 2014	121,829		59,268		181,097
					$	214,833	$	113,952	$	328,785

On November 13, 2014, our Board of Directors authorized cash distributions of $259,379 ($0.00164384 per common share) to stockholders of record for every day in the period from December 31, 2014 through January 29, 2015, which distributions were paid on January 30, 2015.

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On June 5, 2014, our Board of Directors authorized a stock distribution of 0.00625 shares of common stock, or 0.625% of each outstanding share of common stock to the stockholders of record at the close of business on June 30, 2014. Such stock distribution was issued on July 14, 2014.

On August 14, 2014, our Board of Directors authorized a stock distribution of 0.01 shares of common stock, or 1.0% of each outstanding share of common stock to the stockholders of record at the close of business on September 30, 2014. Such stock distribution was issued on October 15, 2014.

On November 19, 2014, our Board of Directors authorized a stock distribution of 0.008333 shares of common stock, $0.01 par value per share, or 0.8333% of each outstanding share of common stock to the stockholders of record at the close of business on December 31, 2014. Such distribution was issued January 15, 2015.

Funds from Operations and Modified Funds from Operations

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

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

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We believe that MFFO is helpful in assisting management assess the sustainability of operating performancein future periods and, in particular, after our offering and acquisition stages are complete, primarily because it excludes acquisition expenses that affect property operations only in the period in which the property is acquired.  Although MFFO includes other adjustments, the exclusion of acquisition expenses is the most significant adjustment to us at the present time, as we are currently in our offering and acquisition stage.  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 have been and will continue to be funded from the proceeds of our offering and not from operations.  We believe by excluding expensed acquisition costs, MFFO provides useful supplemental information that is comparable for each type of real estate investment and is consistent with management’s analysis of the investing and operating performance of our properties.  Acquisition expenses include those paid to our Advisor or third parties.

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

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

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

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Neither FFO nor MFFO should be considered as an alternative to net income (loss), 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 are currently in the acquisition phase of our life cycle, 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 and MFFO should be reviewed in connection with other GAAP measurements.  Our FFO and MFFO as presented may not be comparable to amounts calculated by other REITs.

The following section presents our calculation of FFO and MFFO and provides additional information related to our operations. As a result of the timing of the commencement of our initial public offering and our active real estate operations and the general and administrative expenses incurred in connection with these events. FFO and MFFO are not relevant to a discussion comparing operations for the two periods presented.  We expect revenues and expenses to increase in future periods as we acquire additional investments.

	Years Ended
	December 31,
	2014			2013
Net (loss) income – GAAP	$	(3,766,892	)	$	451
Depreciation expense	179,695			—
FFO	(3,587,197		)	451
Adjustments for straight-line rents	(705		)	—
Amortization of intangible lease assets	351,363			—
Acquisition costs	1,588,944			—
MFFO	$	(1,647,595	)	$	451
Basic and diluted income (loss) per common share - GAAP	$	(2.24	)	$	0.02
FFO per share	$	(2.14	)	$	0.02
MFFO per share	$	(0.98	)	$	0.02
Weighted average shares outstanding	1,666,473			19,849

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 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

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.

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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 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 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 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.

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 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.

The specific timing of a sale will be measured against various criteria related to the terms of the transaction and any continuing involvement associated with the property. If the criteria for profit recognition under the full-accrual method are not met, we will defer gain recognition and account for the continued operations of the property by applying the percentage-of-completion, reduced profit, deposit, installment or cost recovery methods, as appropriate, until the appropriate criteria are met.

17

Interest income from performing loans receivable are 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 June 2014, the Financial Accounting Standards Board ("FASB") issued authoritative guidance to change the criteria for reporting development stage entities. Under the new guidance, the requirement to present inception-to-date information on the statement of operations, cash flows and statement of equity has been eliminated. In addition, financial statements no longer need to be labeled as those of a development stage entity, disclosure of a description of the development stage activities in which the entity is engaged is no longer required, and disclosing in the first year the company is no longer a development stage entity and that in prior years it had been in the development stage is also no longer required. Our early adoption of this guidance, as of January 1, 2014, did not have a material impact on our consolidated financial position, results of operations or cash flows.

Accounting Standards Issued But Not Yet Effective

In May 2014, FASB issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers" ("ASU No. 2014-09"), 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 us beginning January 1, 2017, including interim periods in 2017, and allows for both retrospective and prospective methods of adoption. We are in the process of determining the method of adoption and assessing the impact of ASU No. 2014-09 on our consolidated financial position, results of operations and cash flows.

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" (“ASU No. 2015-01”). The amendments in ASU No. 2015-01 eliminate from GAAP the concept of extraordinary items. Although the amendment will eliminate the requirements for reporting entities to consider whether an underlying event or transaction is extraordinary, the presentation and disclosure guidance for items that are unusual in nature or occur infrequently will be retained and will be expanded to include items that are both unusual in nature and infrequently occurring. ASU No. 2015-01 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. We do not expect the adoption of ASU No. 2015-01 to have a significant impact on our financial statements.

Off-Balance Sheet Arrangements

As of December 31, 2014 and 2013, we did not have any off-balance sheet arrangements or obligations.

Subsequent Events

On January 26, 2015, our Board of Directors authorized cash distributions to the stockholders of record at the close of business each day in the period commencing January 30, 2015 through March 30, 2015 equal to a daily amount of $0.00164384 per share of common stock, payable on February 27, 2015 and March 31, 2015.

On February 19, 2015, our Board of Directors authorized a stock distribution of 0.005 shares of common stock, or 0.5% of each outstanding share of common stock, to the stockholders of record at the close of business on March 31, 2015. Such distribution is to be issued on April 15, 2015.

On March 30, 2015, we, through our operating partnership, purchased a 216 unit multifamily community located in Atlanta, Georgia from an unaffiliated seller for $32.5 million.

On March 24, 2015, our Board of Directors authorized cash distributions to the stockholders of record at the close of business each day in the period commencing March 31, 2015 through and including June 29, 2015 equal to a daily amount of $0.000164384 per share of common stock, payable on April 30, 2015, May 29, 2015 and June 30, 2015.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Omitted as permitted under rules applicable to smaller reporting companies.

18

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.

19

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, 2014.

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As of the end of the period covered by this report, management, including our chief executive officer and chief financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Based upon, and as of the date of, the evaluation, our chief executive officer and chief financial officer concluded that the disclosure controls and procedures were effective as of the end of the period covered by this report to ensure that information required to be disclosed in the reports we file and submit under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is recorded, processed, summarized and reported as and when required. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file and submit under the Exchange Act, is accumulated and communicated to our management, including our chief executive officer and our chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

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. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2014. 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, 2014.

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting that occurred in the quarter ended December 31, 2014 that has materially affected, or is reasonable likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

20

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.resourcereit2.com, on the Prospectus/SEC Filings page.

The other information required by this Item is incorporated by reference from our 2015 Proxy Statement.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this Item is incorporated by reference from our 2015 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 2015 Proxy Statement.

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

The information required by this Item is incorporated by reference from our 2015 Proxy Statement.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The information required by this Item is incorporated by reference from our 2015 Proxy Statement.

21

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
3.1	Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’s Pre-Effective Amendment No. 3 to the Registration Statement on Form S-11 (No. 333-184476) filed December 20, 2013)
3.2	Bylaws (incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-11 (No. 333-184476) filed October 17, 2012)
4.1	Form of Subscription Agreement, (incorporated by reference to Appendix A to the prospectus included in the Company’s Pre-Effective Amendment no. 1 to Post-Effective Amendment no. 3 to the Registration Statement on Form S-11 (No. 333-184476) filed March 13, 2014)
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 the Company’s Registration Statement on Form S-11 (No. 333-184476) filed October 17, 2012)
4.3	Amended and Restated Distribution Reinvestment Plan (incorporated by reference to Appendix B to the prospectus included in the Company’s Pre-Effective Amendment no. 1 to Post-Effective Amendment no. 3 to the Registration Statement on Form S-11 (No. 333-184476) filed March 13, 2014)
4.4	Amended and Restated Escrow Agreement (incorporated by reference to Exhibit 4.4 to the Company’s Pre-Effective Amendment no. 4 to the Registration Statement on Form S-11 (No. 333-184476) filed January 24, 2014)
10.1	Amended and Restated Advisory Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Pre-Effective Amendment no. 4 to the Registration Statement on Form S-11 (No. 333-184476) filed January 24, 2014)
10.2	Dealer Manager Agreement, including Form of Selected Dealer Agreement and Form of Placement Agreement (incorporated by reference to Exhibit 1.1 to the Company’s Post-Effective Amendment no. 2 to the Registration Statement on Form S-11 (No. 333-184476) filed October 28, 2014)
10.3	Management Agreement by and among Resource Real Estate Opportunity REIT II, Inc., RRE Opportunity OP II, LP and Resource Real Estate Opportunity Manager II, LLC, dated December 20, 2013.
10.4	Multifamily Loan and Security Agreement by and between RRE Bear Creek Holdings, LLC and Berkadia Commercial Mortgage LLC, dated June 4, 2014 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed August 14, 2014)
10.5	Promissory Note by Resource Real Estate Opportunity REIT II, Inc. in favor of Resource Real Estate Opportunity Advisor II, LLC, dated June 4, 2014 (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed August 14, 2014)
10.6	First Amendment to Amended and Restated Advisory Agreement between Resource Real Estate Opportunity REIT II, Inc. and Resource Real Estate Opportunity Advisor II, LLC, dated October 6, 2014 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed November 14, 2014)
10.7	Agreement of Purchase and Sale between Orion-Fort Worth Associates LLC and RRE Opportunity OP II, LP, dated December 2, 2014 (incorporated by reference to Exhibit 10.6 to the Company’s Post-Effective Amendment no. 3 to the Registration Statement on Form S-11 (No. 333-184476) filed February 27, 2015)

22

10.8	Multifamily Loan and Security Agreement (Non-Recourse) by and between RRE Oak Hill Holdings, LLC and M&T Realty Capital Corporation, dated December 19, 2014 (incorporated by reference to Exhibit 10.7 to the Company’s Post-Effective Amendment no. 3 to the Registration Statement on Form S-11 (No. 333-184476) filed February 27, 2015)
10.9	Multifamily Note by RRE Oak Hill Holdings, LLC in favor of M&T Realty Capital Corporation, dated December 19, 2014 (incorporated by reference to Exhibit 10.8 to the Company’s Post-Effective Amendment no. 3 to the Registration Statement on Form S-11 (No. 333-184476) filed February 27, 2015)
10.10	Second Amendment to Amended and Restated Advisory Agreement between Resource Real Estate Opportunity REIT II, Inc. and Resource Real Estate Opportunity Advisor II, LLC, dated March 24, 2015
21.1	Subsidiaries of the Company (incorporated by reference to Exhibit 21.1 to the Company’s Post-Effective Amendment no. 3 to the Registration Statement on Form S-11 (No. 333-184476) filed February 27, 2015)
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	Second Amended and Restated Share Redemption Program (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed February 27, 2015)
101.1	The following information from the Company's Quarterly Report on Form 10-K for the year ended December 31, 2014, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Operations and Comprehensive (Loss) Income; (iii) Consolidated Statement of Changes in Stockholders' Equity; and (iv) Consolidated Statements of Cash Flows

SIGNATURES

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	RESOURCE REAL ESTATE OPPORTUNITY REIT II, INC.
March 30, 2015	By:           /s/ Alan F. Feldman
	Alan F. Feldman
	Chief Executive Officer
	(Principal Executive Officer)
March 30, 2015	By:           /s/ Steven R. Saltzman
	Steven R. Saltzman
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

23

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Financial Statements	Page
Report of Independent Registered Public Accounting Firm	F- 1
Consolidated Balance Sheets at December 31, 2014 and 2013	F- 2
Consolidated Statements of Operations and Comprehensive Loss for the Years Ended December 31, 2014 and 2013	F- 3
Consolidated Statements of Changes in Stockholders' Equity for the Years Ended December 31, 2014 and 2013	F- 4
Consolidated Statements of Cash Flows for the Years Ended December 31, 2014 and 2013	F- 5
Notes to Consolidated Financial Statements - December 31, 2014	F- 6

24

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

Resource Real Estate Opportunity REIT II, Inc.:

We have audited the accompanying consolidated balance sheets of Resource Real Estate Opportunity REIT II, Inc. (a Maryland corporation) and subsidiaries (collectively, the “Company”) as of December 31, 2014 and 2013 and the related consolidated statements of operations and comprehensive loss, changes in stockholders' equity and cash flows for each of the two years in the period ended December 31, 2014. 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 II, Inc. and subsidiaries as of December 31, 2014 and 2013, and the results of their operations and their cash flows for each of the two years in the period ended December 31, 2014 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, 2015

PART I. FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

RESOURCE REAL ESTATE OPPORTUNITY REIT II, INC.

CONSOLIDATED BALANCE SHEETS

	December 31, 2014			December 31, 2013
ASSETS
Investments:
Rental properties, net	$	54,703,305		$	—
Identified intangible assets, net	1,176,061			—
	55,879,366			—
Cash	15,780,579			200,644
Restricted cash	725,305			—
Tenant receivables	5,746			—
Due from related parties	34,025			—
Subscriptions receivable	3,819,991			—
Prepaid expenses and other assets	774,338			—
Deferred offering costs	3,618,954			—
Deferred financing costs, net	581,783			—
Total assets	$	81,220,087		$	200,644
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Mortgage notes payable	$	38,540,000		$	—
Accounts payable and accrued expenses	857,897			—
Due to related parties	3,851,263			—
Tenant prepayments	30,704			—
Security deposits	68,696			—
Distribution payable	259,379			—
Total liabilities	43,607,939			—
Stockholders’ equity:
Preferred stock (par value $.01, 10,000,000 shares authorized, none issued and outstanding)	—			—
Convertible stock (par value $.01; 50,000 shares authorized, 50,000 issued and outstanding)	500			500
Common stock (par value $.01; 1,000,000,000 shares authorized, 4,759,567 and 15,000 issued and outstanding, respectively)	47,596			150
Additional paid-in capital	42,148,473			199,350
Accumulated other comprehensive loss	(34,468		)	—
Accumulated (deficit) earnings	(4,549,953		)	644
Total stockholders’ equity	37,612,148			200,644
Total liabilities and stockholders’ equity	$	81,220,087		$	200,644

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

F- 2

RESOURCE REAL ESTATE OPPORTUNITY REIT II, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

	Years Ended
	December 31,
	2014			2013
Revenues:
Rental income	$	991,543		$	—
Interest income	8,251			451
Total revenues	999,794			451
Expenses:
Rental operating	689,325			—
Acquisition costs	1,588,944			—
Management fees - related parties	127,496			—
General and administrative	1,472,181			—
Loss on disposal of assets	198,840			—
Depreciation and amortization expense	531,058			—
Total expenses	4,607,844			—
(Loss) income before other expense	(3,608,050		)	451
Other expense:
Interest expense	158,842			—
Net (loss) income	(3,766,892		)	451
Other comprehensive loss:
Designated derivative, fair value adjustment	(34,468		)	—
Comprehensive (loss) income	$	(3,801,360	)	$	451
Weighted average common shares outstanding	1,680,062			19,849
Basic and diluted (loss) earnings per common share	$	(2.24	)	$	0.02

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

F- 3

RESOURCE REAL ESTATE OPPORTUNITY REIT II, INC.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013

	Common Stock					Convertible Stock			Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Retained Earnings/ (Accumulated Deficit)
	Shares		Amount			Shares	Amount											Total
Balance at January 1, 2013	20,000		$	200		—	$	—	$	199,800		—			$	193		$	200,193
Conversion of common stock to convertible stock	(5,000	)	(50		)	50,000	500		(450		)	—			—			—
Net income	—		—			—	—		—			—			451			451
Balance at December 31, 2013	15,000		150			50,000	500		199,350			—			644			200,644
Issuance of stock	4,702,399		47,024			—	—		46,701,330			—			—			46,748,354
Distributions of common stock	19,554		196			—	—		195,346			—			(195,542		)	—
Syndication costs	—		—			—	—		(5,162,160		)	—			—			(5,162,160		)
Common stock issued through distribution reinvestment plan	22,614		226			—	—		214,607			—			(214,833		)	—
Distributions declared	—		—			—	—		—			—			(373,330		)	(373,330		)
Designated derivative, fair value adjustment	—		—			—	—		—			(34,468		)	—			(34,468		)
Net loss	—		—			—	—		—			—			(3,766,892		)	(3,766,892		)
Balance, at December 31, 2014	4,759,567		$	47,596		50,000	$	500	$	42,148,473		$	(34,468	)	$	(4,549,953	)	$	37,612,148

The accompanying notes are an integral part of this consolidated financial statement.

F- 4

RESOURCE REAL ESTATE OPPORTUNITY REIT II, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Years Ended   December 31,
	2014			2013
Cash flows from operating activities:
Net (loss) income	$	(3,766,892	)	$	451
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Loss on disposal of assets	198,840			—
Depreciation and amortization	531,058			—
Amortization of deferred financing costs	9,581			—
Changes in operating assets and liabilities:
Restricted cash	(725,305		)	—
Tenant receivables, net	(5,746		)	—
Due from related party	(34,025		)	—
Prepaid expenses and other assets	(642,278		)	—
Due to related parties	2,384,199			—
Accounts payable and accrued expenses	452,781			—
Tenant prepayments	17,379			—
Security deposits	6,397			—
Net cash (used in) provided by operating activities	(1,574,011		)	451
Cash flows from investing activities
Property acquisitions	(56,434,350		)	—
Capital expenditures	(109,264		)	—
Net cash used in investing activities	(56,543,614		)	—
Cash flows from financing activities:
Proceeds from issuance of common stock	42,928,363			—
Payment of deferred financing costs	(591,364		)	—
Deferred offering costs	(1,815,856		)	—
Increase in borrowings	39,862,000			—
Repayments on borrowings	(1,322,000		)	—
Purchase of interest rate caps	(87,470		)	—
Distributions paid on common stock	(113,952		)	—
Syndication costs	(5,162,161		)	—
Net cash provided by financing activities	73,697,560			—
Net increase in cash	15,579,935			451
Cash at beginning of period	200,644			200,193
Cash at end of period	$	15,780,579		$	200,644

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

F- 5

RESOURCE REAL ESTATE OPPORTUNITY REIT II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2014

NOTE 1 - NATURE OF BUSINESS AND OPERATIONS

Resource Real Estate Opportunity REIT II, Inc. (the “Company”) was organized in Maryland on September 28, 2012. The Company is offering up to 100,000,000 shares of common stock in its primary initial public offering for $10 per share, with volume discounts available to investors who purchase $1.0 million or more of shares through the same participating broker-dealer. Discounts are also available for other categories of investors. The Company is also offering up to 10,000,000 shares pursuant to the Company’s distribution reinvestment plan at a purchase price initially equal to $9.50 per share. The Company has adopted a fiscal year ending December 31. On February 6, 2014, the Securities and Exchange Commission (the “SEC”) declared effective the Company's Registration Statement on Form S-11, as amended (Commission File No. 333-184476) (the “Registration Statement”), relating to the offering of up to 110,000,000 shares of the Company’s common stock, including shares offered pursuant to the Company's distribution reinvestment plan.

Resource Real Estate Opportunity Advisor II, LLC (the "Advisor”) is a wholly owned subsidiary of Resource Real Estate, Inc. (the "Sponsor") and an indirect wholly owned subsidiary of Resource America, Inc. (“RAI”), a publicly traded company (NASDAQ: REXI) operating in the real estate, financial fund management and commercial finance sectors. The Advisor acts as the Company's external advisor and manages the Company's day-to-day operations and its portfolio of real estate investments and provides asset-management, marketing, investor relations and other administrative services on the Company's behalf, all subject to the supervision of the Company's Board of Directors. On October 9, 2012, the Advisor contributed $200,000 to the Company in exchange for 20,000 shares of common stock. On December 20, 2013, the Advisor received 50,000 shares of convertible stock in exchange for 5,000 shares of the Company’s common stock. The Advisor purchased an additional 117,778 shares of common stock in 2014 for $1.1 million.

On June 2, 2014, the Company satisfied the $2.0 million minimum offering amount for its initial public offering, broke escrow and issued shares of common stock in the offering. The Company subsequently raised the minimum New York offering amount of $2.5 million on June 4, 2014. On October 21, 2014, the Company raised the minimum Ohio offering amount of $20.0 million; and on January 8, 2015, the Company raised the minimum Pennsylvania offering amount of $50.0 million. As of December 31, 2014, a total of 4,759,567 shares, including shares purchased by the Advisor and shares issued through the distribution reinvestment plan, have been issued in connection with the Company's public offering resulting in gross offering proceeds of $47.1 million. As of December 31, 2014, the Company had issued 22,614 shares for $214,833 pursuant to its distribution reinvestment plan.

The Company’s objective is to take advantage of the Sponsor's dedicated multifamily investing and lending platforms to invest in multifamily assets across the entire spectrum of investments in order to provide stockholders with growing cash flow and increasing asset values. The Company’s targeted portfolio will consist, at the time of acquisition, of commercial real estate assets, principally (i) underperforming multifamily rental properties which the Company will renovate and stabilize in order to increase rents, (ii) distressed real estate owned by financial institutions, usually as a result of foreclosure, and non-performing or distressed loans, including first- and second-priority mortgage loans and other loans which the Company will resolve, and (iii) performing loans, including first- and second-priority mortgage loans and other loans the Company originates or purchases either directly or with a co-investor or joint venture partner.

The Company intends to elect and qualify to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes under the provisions of the Internal Revenue Code of 1986, as amended, commencing with its taxable year ended December 31, 2014. As such, to maintain its REIT qualification for U.S. federal income tax purposes, the Company is generally required to distribute at least 90% of its net income (excluding net capital gains) to its stockholders as well as comply with certain other requirements. Accordingly, the Company generally will not be subject to U.S. federal income taxes to the extent that it annually distributes at least 90% of its REIT taxable income to its stockholders. The Company also intends to operate its business in a manner that will permit it to maintain its exemption from registration under the Investment Company Act of 1940, as amended.

F- 6

RESOURCE REAL ESTATE OPPORTUNITY REIT II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

DECEMBER 31, 2014

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

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

Subsidiary	Apartment Complex	Number of Units	Property Location
RRE Opportunity Holdings II, LLC	N/A	N/A	N/A
RRE Opportunity OP II, LP	N/A	N/A	N/A
RRE Bear Creek Holdings, LLC ("Bear Creek")	Bear Creek	152	Dallas, TX
RRE Oak Hill Holdings, LLC ("Oak Hill")	Oak Hill	360	Fort Worth, TX

N/A - Not Applicable

All intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of the consolidated financial statements in conformity with Generally Accepted Accounting Principles ("GAAP") requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

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, 2014, the Company had $15.8 million of deposits at various banks, $14.8 million of which was greater than the insurance limit of the Federal Deposit Insurance Corporation. No losses have been experienced on such deposits.

Real Estate Investments

The Company records acquired real estate at fair value. The Company considers the period of future benefit of an asset to determine its appropriate useful life. The Company's estimated useful lives of its assets by class are as follows:

Buildings	27.5 years
Building improvements	3.0 to 27.5 years
Tenant improvements	Expected useful life
Lease intangibles	Remaining term of related lease

Impairment of Long Lived Assets

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

If impairment exists, due to the inability to recover the carrying value of a property, an impairment loss 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 is the adjustment to fair value less estimated cost to dispose of the asset. These assessments have a direct impact on net income because recording an impairment loss results in an immediate negative adjustment to net income. There were no impairments as of December 31, 2014.

Allocation of Purchase Price of Acquired Assets

Upon the acquisition of real properties, the Company allocates the purchase price of properties to acquired tangible assets, consisting of land, buildings, fixtures and improvements, identified intangible lease assets, consisting of the value of above-market

F- 7

RESOURCE REAL ESTATE OPPORTUNITY REIT II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

DECEMBER 31, 2014

and below-market leases, as applicable, the value of in-place leases, the value of tenant relationships, and liabilities, based in each case on their fair values.

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.

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 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.

The Company also considers information obtained about each property as a result of its pre-acquisition due diligence, marketing and leasing activities in estimating the fair value of the tangible and intangible assets acquired. In estimating carrying costs, management includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods. 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 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 considered by management in allocating these values include the nature and extent of the Company’s existing business relationships with the 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.

The Company amortizes the value of in-place leases to expense over the remaining term of the respective leases. The value of customer relationship intangibles is amortized to expense over the initial term and any renewal periods in the respective leases, but in no event do 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.

The determination of the fair value of the assets and liabilities acquired requires the use of significant assumptions with regard to current market rental rates, discount rates and other variables. These estimates are subject to change until all information is finalized, which is generally within one year of the acquisition date.

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RESOURCE REAL ESTATE OPPORTUNITY REIT II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

DECEMBER 31, 2014

Derivatives and Hedging Activities

Risk Management Objective of Using Derivatives

The Company is exposed to certain risks 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 of the Company’s mortgage loan, 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 serve 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 interest rate caps that were designated as cash flow hedges during 2014. 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 year ended December 31, 2014, such derivatives were used to hedge the variable cash flows, indexed to USD- London InterBank Offered Rate ("LIBOR"), associated with an existing variable-rate loan agreement. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. During the year ended December 31, 2014, the Company did not record any 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.

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 Company records property operating expense reimbursements due from tenants for common area maintenance, real estate taxes and other recoverable costs in the period the related expenses are incurred.

The specific timing of a sale is measured against various criteria related to the terms of the transaction and any continuing involvement associated with the property. If the criteria for profit recognition under the full-accrual method are not met, the Company defers the gain recognition and accounts for the continued operations of the property by applying the percentage-of-completion, reduced profit, deposit, installment or cost recovery methods, as appropriate, until the appropriate criteria are met.

The future minimum rental payments to be received from noncancelable operating leases are $3.7 million and $85,000 for the years ending December 31, 2015 and 2016, and none thereafter.

Tenant Receivables

The Company makes estimates of the collectability of its tenant receivables related to base rents, including straight-line rentals, expense reimbursements and other revenue or income. The Company specifically analyzes accounts receivable and historical bad debts, tenant creditworthiness, current economic trends when evaluating the adequacy of the allowance for doubtful accounts. In addition, with respect to tenants in bankruptcy, the Company makes 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.

F- 9

RESOURCE REAL ESTATE OPPORTUNITY REIT II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

DECEMBER 31, 2014

Income Taxes

The Company intends to elect and qualify to be taxed as a REIT, commencing with its taxable year ended December 31, 2014. Accordingly, the Company will generally not be subject to corporate U.S. federal or state income tax to the extent that it makes qualifying distributions to its stockholders, and provided it satisfies on a continuing basis, through actual investment and operating results, the REIT requirements including certain asset, income, distribution and stock ownership tests. If the Company fails to qualify as a REIT, and does not qualify for certain statutory relief provisions, it will be 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 lost 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. Taxable income, generally, will differ from net income reported on the financial statements because the determination of taxable income is based on tax provisions and not financial accounting principles.

The Company may elect to treat certain of its subsidiaries as taxable REIT subsidiaries (“TRSs”). In general, the Company’s TRS may hold assets and engage in activities that it 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.

While a TRS may generate net income, a TRS can declare dividends to the Company which will be included in the Company’s taxable income and necessitate a distribution to its stockholders. Conversely, if the Company retains earnings at a TRS level, no distribution is required and the Company can increase book equity of the consolidated entity.

Earnings Per Share

Basic earnings per share is calculated on the basis of weighted-average number of common shares outstanding during the year. Basic earnings per share is computed by dividing income available to common shareholders by the weighted-average common shares outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted to common stock. Due to reported losses for the periods presented, the convertible shares (discussed in Note 12) are not included in the diluted earnings per share calculation. All common shares and per common share information in the financial statements have been adjusted retroactively for the effect of one 0.625% stock distribution, issued on July 14, 2014, one 1.00% stock distribution, issued October 15, 2014, and one 0.83333% stock distribution, issued on January 15, 2015.

Organization and Offering Costs

The Company incurs organizational, accounting, and offering costs in connection with its ongoing initial public offering. Organization and offering costs (other than selling commissions and dealer-manager fees) of the Company are initially paid by the Advisor on behalf of the Company. Offering costs are discussed in more detail below under the heading "Deferred Offering Costs." Organization costs are expensed as incurred and include all expenses to be incurred by the Company in connection with the formation of the Company, including but not limited to legal fees and other costs to incorporate the Company.

Pursuant to the Amended and Restated Advisory Agreement between the Company and the Advisor dated January 9, 2014 (the “Advisory Agreement”), the Company is obligated to reimburse the Advisor for organizational and offering costs it incurs on the Company's behalf, but only to the extent that such reimbursements will not cause organizational and offering expenses (other than selling commissions and the dealer manager fees) to exceed 2.5% of the gross offering proceeds raised in the offering, when recorded by the Company. As of December 31, 2014, a total of $2.3 million in reimbursable organizational and offering costs incurred on behalf of the Company by the Advisor has yet to be reimbursed by the Company. These costs are included in due to related parties on the consolidated balance sheet as of December 31, 2014.

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RESOURCE REAL ESTATE OPPORTUNITY REIT II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

DECEMBER 31, 2014

Deferred Offering Costs

Through December 31, 2014, the Company has incurred $4.4 million for the payment of public offering costs consisting of accounting, advertising, allocated payroll, due diligence, marketing, legal and similar costs. As of December 31, 2014, the Advisor has advanced $3.0 million of these costs on behalf of the Company. A portion of these costs was charged to equity upon the sale of each share of common stock sold under the public offering. Similarly, a portion of the proceeds received from the sales of shares in the Company's public offering was paid to the Advisor to reimburse it for the amount incurred on behalf of the Company. Deferred offering costs represent the portion of the total costs incurred that have not been charged to equity to date. As of December 31, 2014, the Company has reimbursed $734,493 of deferred offering costs to the Advisor. Upon completion of the public offering, any excess deferred offering costs in excess of the limit on organization and offering costs discussed above, will be charged back to the Advisor.

New Accounting Standards

In June 2014, the Financial Accounting Standards Board ("FASB") issued authoritative guidance to change the criteria for reporting development stage entities. Under the new guidance, the requirement to present inception-to-date information on the statement of operations, cash flows and statement of equity has been eliminated. In addition, financial statements no longer need to be labeled as those of a development stage entity, disclosure of a description of the development stage activities in which the entity is engaged is no longer required, and disclosing in the first year the company is no longer a development stage entity and that in prior years it had been in the development stage is also no longer required. The Company's early adoption of this guidance, as of January 1, 2014, did not have a material impact on its consolidated financial position, results of operations or cash flows.

Accounting Standards Issued But Not Yet Effective

In May 2014, FASB issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers” ("ASU No. 2014-09"), 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, 2017, including interim periods in 2017, and allows for both retrospective and prospective methods of adoption. The Company is in the process of determining the method of adoption and assessing the impact of ASU No. 2014-09 on the Company's consolidated financial position, results of operations and cash flows.

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" (“ASU No. 2015-01”). The amendments in ASU No. 2015-01 eliminate from GAAP the concept of extraordinary items. Although the amendment will eliminate the requirements for reporting entities to consider whether an underlying event or transaction is extraordinary, the presentation and disclosure guidance for items that are unusual in nature or occur infrequently will be retained and will be expanded to include items that are both unusual in nature and infrequently occurring. ASU No. 2015-01 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The Company does not expect the adoption of ASU No. 2015-01 to have a significant impact on its financial statements.

F- 11

RESOURCE REAL ESTATE OPPORTUNITY REIT II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

DECEMBER 31, 2014

NOTE 3 - SUPPLEMENTAL CASH FLOW INFORMATION

The following table presents supplemental cash flow information:

	Years Ended
	December 31,
	2014		2013
Non-cash financing and investing activities:
Increase in subscription receivables	$	3,819,991	$	—
Cash distributions on common stock declared but not yet paid	259,379		—
Stock issued from distribution reinvestment plan	195,542		—
Stock distributions issued	214,833		—
Deferred offering costs	1,803,098		—
Due to related parties	1,467,064		—
Cash paid during the period for:
Interest	$	133,036	$	—

NOTE 4 - RESTRICTED CASH

Restricted cash represents escrow deposits with lenders to be used to pay real estate taxes, insurance, and capital improvement. A summary of the components of restricted cash follows:

	December 31, 2014		December 31, 2013
Real estate taxes	$	128,871	$	—
Insurance	157,600		—
Capital improvements	438,834		—
Total	$	725,305	$	—

NOTE 5 - RENTAL PROPERTIES, NET

The Company’s investments in rental properties consisted of the following:

	December 31, 2014			December 31, 2013
Land	$	6,723,368		$	—
Building and improvements	47,546,786			—
Furniture, fixtures and equipment	612,846			—
	54,883,000			—
Less: accumulated depreciation	(179,695		)	—
	$	54,703,305		$	—

Depreciation expense for the years endedDecember 31, 2014 and 2013 was $179,695 and $0, respectively.

NOTE 6 - ACQUISITIONS

As of December 31, 2014, the Company owned two properties. The table below summarizes these acquisitions and the respective fair values assigned:

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RESOURCE REAL ESTATE OPPORTUNITY REIT II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

DECEMBER 31, 2014

Multifamily Community Name	City and State	Date of Acquisition	Purchase Price (1)		Land		Building and Improvements		Furniture, Fixture and Equipment		Intangible Assets		Other Liabilities			Fair Valued Assigned
Bear Creek	Dallas, TX	6/4/2014	$	9,500,000	$	1,888,982	$	7,060,815	$	198,840	$	351,363	$	(84,732	)	$	9,415,268
Oak Hill	Fort Worth, TX	12/19/2014	47,000,000		4,834,386		40,485,971		503,582		1,176,061		(59,977		)	46,940,023

(1) Purchase price excludes closing costs and acquisition expenses.

On June 4, 2014, the Company acquired its first investment, a 152-unit, multifamily apartment community located in Dallas, Texas known as Bear Creek, for $9.5 million, excluding closing costs. The Company paid an acquisition fee of $264,239, or 2% of the purchase price (including closing costs and any amounts reserved for capital expenditures), to the Advisor.

The following table reflects the fair value of the net assets acquired:

Rental property:
Land	$	1,888,982
Buildings	7,060,815
Personal property	198,840
	9,148,637
Acquired intangibles - in-place leases	351,363
Accrued real estate taxes	(69,085		)
Prepaid rents	(163		)
Security deposits	(15,484		)
Fair value assigned	$	9,415,268

On December 19, 2014, the Company acquired a 360-unit, multifamily apartment community located in Fort Worth, Texas known as Oak Hill, for $47.0 million, excluding closing costs. The Company paid an acquisition fee of $1.1 million, or 2% of the purchase price (including closing costs and any amounts reserved for capital expenditures), to the Advisor.

The following table reflects the fair value of the net assets acquired:

Rental property:
Land	$	4,834,386
Buildings	40,485,971
Personal property	503,582
	45,823,939
Acquired intangibles - in-place leases	1,176,061
Accrued real estate taxes	—
Prepaid rents	(13,162		)
Security deposits	(46,815		)
Fair value assigned	$	46,940,023

The table below summarizes the total revenues, net loss, and acquisition costs of the Company's 2014 acquisitions:

F- 13

RESOURCE REAL ESTATE OPPORTUNITY REIT II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

DECEMBER 31, 2014

		Years Ended
		December 31,
Multifamily Community		2014			2013
Bear Creek
	Total Revenues	$	821,576		$	—
	Net Loss	(748,500		)	—
	Acquisition Costs	329,709			—
Oak Hill
	Total Revenues	$	170,097		$	—
	Net Loss	(82,184		)	—
	Acquisition Costs	1,259,235			—

NOTE 7 - IDENTIFIED INTANGIBLE ASSETS, NET

Identified intangible assets, net, consist of rental leases. The value of acquired in-place leases totaled $1.5 millionand$-0-as ofDecember 31, 2014and 2013, respectively, less accumulated amortization of$351,363and$-0-, respectively. The weighted average remaining life of the rental leases iseight monthsas ofDecember 31, 2014. Expected amortization for the rental leases for the next 12 monthsis$1.2 million. For theyear endedDecember 31, 2014, amortization expense totaled$351,363. There was no amortization expense foryear endedDecember 31, 2013.

NOTE 8 - MORTGAGE NOTES PAYABLE

The following is a summary of the Company's mortgage notes payable as of December 31, 2014:

	Balance Outstanding at		Maturity Date	Interest Rate		Average Monthly Debt Service		Interest Expense Incurred for the
Collateral	December 31, 2014			December 31, 2014				Year ended December 31, 2014
Bear Creek	$	7,465,000	7/1/2024	2.54	%	$	15,901	$	110,302
Oak Hill	31,075,000		1/1/2025	2.07	%	54,323		36,557
	$	38,540,000

On June 4, 2014, in connection with the acquisition of Bear Creek, the Company entered into a $7.5 million, 10-year secured mortgage loan with Berkadia Commercial Mortgage, LLC (the "Bear Creek Mortgage Loan"), secured by the property. The Bear Creek Mortgage Loan, which matures on July 1, 2024, bears interest at a floating rate of one-month LIBOR plus 2.37%. As of December 31, 2014, the interest rate was 2.54%. Monthly payments are initially interest only. Beginning with the August 2018 payment, monthly payments will include interest and principal in the amount of approximately $23,432 per month.

On December 19, 2014, in connection with the acquisition of Oak Hill, the Company entered into a $31.1 million, secured mortgage loan with M&T Reality Capital Corporation (the "Oak Hill Mortgage Loan"), secured by the property. The Oak Hill Mortgage Loan, which matures on January 1, 2025, bears interest at a floating rate of one-month LIBOR plus 1.90%. As of December 31, 2014, the interest rate was 2.07%. Monthly payments are initially interest only. Beginning with the February 2017 payment, monthly payments will include interest and principal in the amount of approximately $109,047 per month.

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

2015	$	—
2016	—
2017	590,509
2018	680,324
2019	730,909
Thereafter	36,538,258
	$	38,540,000

F- 14

RESOURCE REAL ESTATE OPPORTUNITY REIT II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

DECEMBER 31, 2014

NOTE 9 – DEFERRED FINANCING COSTS

Deferred financing costs incurred to obtain financing are amortized over the term of the related debt. As of December 31, 2014 and December 31, 2013, there were $9,581 and $-0-, respectively, of accumulated amortization of deferred financing costs. Amortization of deferred financing costs for the next five years ending December 31, and thereafter, are as follows:

2015	$	58,112
2016	62,137
2017	61,607
2018	60,653
2019	59,547
Thereafter	279,727
	$	581,783

NOTE 10 – ACCUMULATED OTHER COMPREHENSIVE LOSS

The following table presents the changes in accumulated other comprehensive loss for the year ended December 31, 2014:

	Net unrealized loss on derivatives
January 1, 2014	$	—
Unrealized loss on designated hedge	(34,468		)
December 31, 2014	$	(34,468	)

NOTE 11 – RELATED PARTY TRANSACTIONS

Pursuant to the terms of the Advisory Agreement, the Advisor provides the Company with its management team, including its officers, along with appropriate support personnel. The Advisor will be reimbursed for the Company’s allocable share of costs for Advisor personnel, including allocable personnel salaries and benefits. Each of the Company’s officers is an employee of the Sponsor or one of its affiliates. The Company does not have any employees. The Advisor is not obligated to dedicate any specific portion of its time or the time of its personnel to the Company’s business. The Advisor is at all times subject to the supervision and oversight of the Company’s Board of Directors and has only such functions and authority as the Company delegates to it.

During the course of the offering, the Advisor will provide offering-related services to the Company and will advance funds to the Company for both operating costs and organization and offering costs. These amounts will be reimbursed to the Advisor from the proceeds from the offering, although there can be no assurance that the Company’s plans to raise capital will be successful. As of December 31, 2014, the Advisor has incurred costs on a cumulative basis on behalf of the Company of approximately $3.0 million.

Relationship with the Advisor

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. Under the Advisory Agreement, the Advisor receives fees and is reimbursed for its expenses as set forth below:

Acquisition fees. The Advisor earns 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 Advisor earns a monthly asset management fee equal to one-twelfth of 1.0% of the cost of each asset, without deduction for depreciation, bad debts or other non-cash reserves. The asset management fee is based only on

F- 15

RESOURCE REAL ESTATE OPPORTUNITY REIT II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

DECEMBER 31, 2014

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, 2.0% of the contract sales price. No properties were sold during the year ended December 31, 2014 and, therefore, no disposition fees were earned.

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 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.

On June 4, 2014, the Advisor provided a $1.3 million bridge loan (the “Bridge Loan”) to the Company. The Company used the proceeds of the Bridge Loan to partially finance the acquisition of Bear Creek. The Bridge Loan, which was scheduled to mature on December 4, 2014, incurred interest at an annual rate of LIBOR plus 3.0%. The Company repaid the Bridge Loan in full on June 30, 2014 and paid $2,242 in interest during the year ended December 31, 2014.    

Relationship with RAI

The receivable from related party includes escrow funds held by RAI for self insurance. The Company's properties participate in an insurance pool with other properties directly and indirectly managed by RAI. RAI holds the escrow funds related to the insurance pool on its books. The insurance pool covers losses up to $2.5 million. Catastrophic insurance would cover losses in excess of the insurance pool up to $85 million. Therefore, unforeseen or catastrophic losses in excess of the Company's insured limits could have a material adverse effect on the Company's financial condition and operating results.

Relationship with Resource Real Estate Opportunity Manager II

Resource Real Estate Opportunity Manager II, LLC (the “Manager”), an affiliate of the Advisor, manages real estate properties and real estate-related debt investments and coordinates the leasing of, and manages construction activities related to the Company’s real estate property pursuant to the terms of the management agreement with the Manager.

Property management fees. The Manager earns a property management fee equal to 4.5% of actual gross cash receipts from the operations of real property investments.

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. No construction management fees were earned during the year endedDecember 31, 2014.

Debt servicing fees. The Manager earns a debt servicing fee of 2.75% on payments received from loans held by the Company for investment. No debt servicing fees were earned during the year endedDecember 31, 2014.

Expense reimbursement. During the ordinary course of business, the Manager or other affiliates of RAI may pay certain shared operating expenses on behalf of the Company.

Relationship with Resource Securities

Resource Securities, Inc. (“Resource Securities”), an affiliate of the Advisor, serves as the Company’s dealer-manager and is responsible for marketing the Company’s shares during the primary portion of its public offering. Pursuant to the terms of the dealer-manager agreement with Resource Securities, the Company pays Resource Securities a selling commission of up to 7% of gross primary offering proceeds and a dealer-manager fee of up to 3% of gross primary offering proceeds. Resource Securities reallows all selling commissions earned and a portion of the dealer-manager fee as a marketing fee to participating broker-dealers.

F- 16

RESOURCE REAL ESTATE OPPORTUNITY REIT II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

DECEMBER 31, 2014

No selling commissions or dealer-manager fees are earned by Resource Securities in connection with sales under the distribution reinvestment plan. Additionally, the Company may reimburse Resource Securities for bona fide due diligence expenses.

Relationship with Other Related Parties

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

The amounts receivable/payable and the fees earned/expenses incurred by such related parties are summarized in the following tables:

	December 31, 2014		December 31, 2013
Due from related parties:
Resource Securities	$	3,944	$	—
RAI - self-insurance funds held in escrow	30,081		—
	$	34,025	$	—
Due to related parties:
Advisor
Asset management fees	$	28,456	—
Organization and offering costs	2,272,325		$	—
Operating expense reimbursements	1,145,784		—
Manager
Property management fees	6,391		—
Expense reimbursements	39,592		—
Resource Securities
Selling commissions and dealer-manager fees	358,715		—
	$	3,851,263	$	—
Graphic Images (1)	$	81,424	$	—

(1) Included in Accrued expenses on the consolidated balance sheets.

F- 17

RESOURCE REAL ESTATE OPPORTUNITY REIT II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

DECEMBER 31, 2014

	Years Ended
	December 31,
	2014		2013
Fees earned / expenses incurred:
Advisor
Acquisition fees (1)	$	1,354,551	$	—
Asset management fees (2)	$	88,253	$	—
Debt financing fees (3)	$	192,700	$	—
Organization and offering costs (4)	$	3,006,819	$	—
Operating expense reimbursement (5)	$	1,115,426	$	—
Interest expense (6)	$	2,242	$	—
Manager
Property management fees (2)	$	39,242	$	—
Operating expense reimbursements (7)	$	54,123	$	—
Resource Securities
Selling commissions and dealer-manager fees (8)	$	4,399,256	$	—
Other
Graphic Images	$	364,972	$	—

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

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

(3)    Included in Deferred financing costs, net on the consolidated balance sheets.

(4)     Included in Deferred offering costs on the consolidated balance sheets.

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

(6)    Included in Interest expense on the consolidated statements of operations and comprehensive (loss) income.

(7)     Included in Due to Related Parties on the consolidated balance sheets.

(8)     Included in Stockholders' equity on the consolidated balance sheets.

F- 18

RESOURCE REAL ESTATE OPPORTUNITY REIT II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

DECEMBER 31, 2014

NOTE 12 – EQUITY

Preferred Stock

The Company’s charter authorizes the Company to issue 10,000,000 shares of its $0.01 par value preferred stock. As of December 31, 2014, no shares of preferred stock were issued or outstanding.

Convertible Stock

As of December 31, 2014, the Company had 50,000 shares of $0.01 par value convertible stock outstanding, which are owned by the Advisor. 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 7% 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 or after the 31st trading day following the 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 7% return threshold.

Common Stock

As of December 31, 2014, the Company had an aggregate of 4,759,567 shares of $0.01 par value common stock outstanding, including the Advisor's additional purchase of 117,778 shares of common stock for $1.1 million, as follows:

	Shares Issued	Gross Proceeds
Initial public offering	4,702,399	$	46,748,354
Shares issued through stock distributions	19,554	—
Shares issued through distribution reinvestment plan	22,614	214,833
Advisor's initial investment, net of 5,000 share conversion	15,000	150,000
	4,759,567	$	47,113,187

Distributions

For the year endedDecember 31, 2014, the Company paid aggregate distributions of $328,785, including $113,952 of distributions paid in cash and $214,833 of distributions reinvested in shares of common stock through the Company's distribution reinvestment plan, as follows:

Authorization Date	Per Common Share		Record Date	Distribution Date	Distributions invested in shares of Common Stock		Net Cash Distributions		Total Aggregate Distributions
June 5, 2014	$	0.00068493	July 31, 2014	August 1, 2014	$	5,065	$	5,560	$	10,625
June 5, 2014	0.00068493		August 31, 2014	September 2, 2014	11,086		8,844		19,930
June 5, 2014	0.00068493		September 30, 2014	October 1, 2014	18,497		11,197		29,694
October 6, 2014	0.00082192		October 30, 2014	October 31, 2014	27,143		13,970		41,113
October 30, 2014	0.00068493		November 26, 2014	November 28, 2014	31,213		15,113		46,326
November 13, 2014	0.00164384		December 30, 2014	December 31, 2014	121,829		59,268		181,097
					$	214,833	$	113,952	$	328,785

On November 13, 2014, the Company's Board of Directors authorized cash distributions of $259,379 ($0.00164384 per common share) to stockholders of record for every day in the period from December 31, 2014 through January 29, 2015, which distributions were paid on January 30, 2015.

F- 19

RESOURCE REAL ESTATE OPPORTUNITY REIT II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

DECEMBER 31, 2014

On June 5, 2014, the Company's Board of Directors authorized a stock distribution of 0.00625 shares of common stock, or 0.625% of each outstanding share of common stock to the stockholders of record at the close of business on June 30, 2014. Such stock distribution was issued on July 14, 2014.

On August 14, 2014, the Company's Board of Directors authorized a stock distribution of 0.01 shares of common stock, or 1.0% of each outstanding share of common stock to the stockholders of record at the close of business on September 30, 2014. Such stock distribution was issued on October 15, 2014.

On November 19, 2014, the Company's Board of Directors authorized a stock distribution of 0.008333 shares of the Company's common stock, $0.01 par value per share, or 0.8333% of each outstanding share of common stock to the stockholders of record at the close of business on December 31, 2014. Such distribution was issued January 15, 2015.

NOTE 13 - FAIR VALUE MEASURES AND DISCLOSURES

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

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

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

F- 20

RESOURCE REAL ESTATE OPPORTUNITY REIT II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

DECEMBER 31, 2014

	Level 1		Level 2		Level 3		Total
December 31, 2014
Assets:
Interest rate caps	$	—	$	53,002	$	—	$	53,002
	$	—	$	53,002	$	—	$	53,002
	Level 1		Level 2		Level 3		Total
December 31, 2013
Assets:
Interest rate caps	$	—	$	—	$	—	$	—
	$	—	$	—	$	—	$	—

The carrying amount and fair value of the Company’s mortgage notes payable are as follows:

	December 31, 2014
	Carrying Amount		Fair Value
Mortgage notes payable	$	38,540,000	$	38,540,000

Since the interest rate is variable, the fair value of the mortgage notes payable is equal to the carrying amount.

F- 21

RESOURCE REAL ESTATE OPPORTUNITY REIT II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

DECEMBER 31, 2014

NOTE 14 - DERIVATIVES AND HEDGING ACTIVITIES

As of December 31, 2014, the Company had the following outstanding interest rate derivatives that were designated as a cash flow hedges of interest rate risk:

Interest Rate Derivative	Number of Instruments	Notional Amount		Maturity Dates
Interest rate cap	2	$	38,540,000	November 1, 2018 and January 1, 2018

Tabular Disclosure of Fair Value of Derivative Instrument on the Balance Sheet

The table below presents the fair value of the Company’s derivative financial instruments, which is included in prepaid expenses and other assets on the consolidated balance sheet as of December 31, 2014:

Asset Derivatives						Liabilities Derivatives
December 31, 2014			December 31, 2013			December 31, 2014			December 31, 2013
Balance Sheet	Fair Value		Balance Sheet	Fair Value		Balance Sheet	Fair Value		Balance Sheet	Fair Value
Interest rate cap	$	53,002	Interest rate cap	$	—	NA	$	—	NA	$	—

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 2015, the Company estimates that $552 will be reclassified as an increase to interest expense. 

NOTE 15 - OPERATING EXPENSE LIMITATION

As defined under the Company's charter, commencing four fiscal quarters ending June 30, 2015, the Advisor must reimburse the Company the amount by which the aggregate total operating expenses for the four fiscal quarters then ended exceed the greater of 2% of the average invested assets or 25% of net income, unless the conflicts committee has determined that such excess expenses were justified based on unusual and non-recurring factors. “Average invested assets” means the average monthly book value of assets invested, directly or indirectly, in equity interests in and loans secured by real estate during the 12-month period before deducting depreciation, bad debts or other non-cash reserves. “Total operating expenses” means all expenses paid or incurred by the Company, as determined under GAAP, that are in any way related to operations, including advisory fees, but excluding (a) the expenses of raising capital such as organization and offering expenses, legal, audit, accounting, underwriting, brokerage, listing, registration and other fees, printing and other such expenses and taxes incurred in connection with the issuance, distribution, transfer, registration and stock exchange listing of stock; (b) interest payments; (c) taxes; (d) non-cash expenditures such as depreciation, amortization and bad debt reserves; (e) reasonable incentive fees based on the gain in the sale of assets; and (f) acquisition fees, acquisition expenses (including expenses relating to potential investments that do not close), disposition fees on the resale of property and other expenses connected with the acquisition, disposition and ownership of real estate interests, loans or other property (including the costs of foreclosure, insurance premiums, legal services, maintenance, repair and improvement of property).

F- 22

RESOURCE REAL ESTATE OPPORTUNITY REIT II, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

DECEMBER 31, 2014

NOTE 16 – SUBSEQUENT EVENTS

On January 26, 2015, the Company's Board of Directors authorized cash distributions to the stockholders of record at the close of business each day in the period commencing January 30, 2015 through March 30, 2015 equal to a daily amount of $0.00164384 per share of common stock, payable on February 27, 2015 and March 31, 2015.

On February 19, 2015, the Company's Board of Directors authorized a stock distribution of 0.005 shares of the Company's common stock, or 0.5% of each outstanding share of common stock, to the stockholders of record at the close of business on March 31, 2015. Such distribution is to be issued on April 15, 2015.

On March 30, 2015, the Company, through its operating partnership, purchased a 216 unit multifamily community located in Atlanta, Georgia from an unaffiliated seller for $32.5 million.

On March 24, 2015, the Company's Board of Directors authorized a cash distribution to the stockholders of record at the close of business each day in the period commencing March 31, 2015 through and including June 29, 2015 equal to a daily amount of $0.000164384 per share of common stock, payable on April 30, 2015, May 29, 2015 and June 30, 2015.

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

F- 23

Resource Real Estate Opportunity REIT II, Inc.   

SCHEDULE III

Real Estate and Accumulated Depreciation

December 31, 2014

Column A	Column B		Column C		Column D			Column E		Column F			Column G	Column H
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
Real estate owned:
Residential	$	—	$	9,148,637	$	(94,229	)	$	9,054,408	$	(179,695	)	1980	6/4/2014
Dallas, Texas
Residential	—		45,823,939		4,653			45,828,592		—			1999	12/19/2014
Fort Worth, Texas
	$	—	$	54,972,576	$	(89,576	)	$	54,883,000	$	(179,695	)

	Years Ended   December 31,
	2014			2013
Investments in real estate:
Balance at beginning of the year	$	—		$	—
Additions during the period:	—			—
Acquisitions	54,972,576			—
Improvements, etc.	109,264			—
Dispositions during the period:	(198,840		)	—
Balance at end of year	$	54,883,000		$	—
Accumulated Depreciation:
Balance at beginning of year	$	—		$	—
Additions charged to expenses	179,695			—
Balance at the end of year	$	179,695		$	—

EX-10.3

Exhibit 10.3

MANAGEMENT AGREEMENT

THIS MANAGEMENT AGREEMENT (this “Agreement”), is made and entered into this 20^th day of December, 2013 (the “Effective Date”), by and among RESOURCE REAL ESTATE OPPORTUNITY REIT II, INC., a Maryland corporation (the “Company”), RRE OPPORTUNITY OP II, LP, a Delaware limited partnership (the “OP”) and RESOURCE REAL ESTATE OPPORTUNITY MANAGER II, LLC, a Delaware limited liability company (“Manager”).

R E C I T A L S

The OP was organized to acquire, own, operate, lease and manage real estate properties and real estate related debt investments on behalf of the Company. Owner (as defined below) intends to retain Manager to manage real estate properties and real estate related debt investments and to coordinate the leasing of, and manage construction activities related to, some of the real estate properties for the benefit of the Company under the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the premises and the mutual promises and covenants herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

ARTICLE I

DEFINITIONS

Except as otherwise specified or as context may otherwise require, the following terms have the respective meanings set forth below for all purposes of this Agreement, and the definitions of such terms are equally applicable both to the singular and plural forms thereof:

1.01.Advisor. Advisor means Resource Real Estate Opportunity Advisor II, LLC, a Delaware limited liability company, or its successor as advisor of the Company.

1.02Budget. A composite of, for each Project, (i) an operations budget, which shall be an estimate of receipts and expenditures for the operation of each Project (on a monthly cash basis) during a Fiscal Year, and (ii) a capital budget, which shall be an estimate of capital replacements, substitutions of and additions relating to each Project for a Fiscal Year and for a five Fiscal Year period. The Budget shall include leasing parameters for the Projects.

1.03.Conflicts Committee. The Conflicts Committee is defined in the articles of incorporation, as amended, of the Company.

1.04Construction Management Fee. The Construction Management Fee is defined in Section 3.03 below.

1.05.Debt Investments. Debt Investments means, collectively, the real estate related debt investments, including, but not limited to, non-performing or distressed loans, including first- and second-priority mortgage loans, mezzanine loans, B-Notes and other loans, in which Owner now owns a direct or indirect interest or hereafter acquires a direct or indirect interest.

1.06.Depository. An FDIC insured bank designated by Owner.

1.07.Depository Account. A trust fund account for the benefit of Owner established and maintained in an FDIC insured or guaranteed account to be opened by the Owner. Manager may open a separate Depository Account for each Project.

1.08.Disbursement Account. A trust account for the benefit of Owner, opened by Manager with an FDIC insured bank to pay for “Operating Expenses” as defined in Section 4.01(b). Manager may open a separate Disbursement Account for each Project.

1.09.Fiscal/Budget Year. The year beginning on January 1^st and ending on December 31^st.

1.10.Gross Receipts. The entire amount of all receipts, determined on a cash basis, from (a) tenant rentals collected pursuant to tenant leases of apartment units, office, retail or other space, for each month during the term hereof; provided that there shall be excluded from tenant rentals any tenant security deposits (except as provided below); (b) cleaning, tenant security and damage deposits forfeited by tenants in such period; (c) laundry and vending machines income; (d) any and all other receipts from the operation of the Projects received and relating to the period in question; (e) proceeds from rental interruption insurance, but not any other insurance proceeds or proceeds from third-party damage claims, and (f) any other sums and charges collected in connection with termination of the tenant leases. Gross Receipts also does not include the proceeds of (i) any sale, exchange, refinancing, condemnation, or other disposition of all or any part of any Project, (ii) any loans to Owner whether or not secured by all or any part of a Project, (iii) any capital expenditures or funds deposited to cover costs of operations made by Owner, and (iv) any insurance policy (other than rental interruption insurance or proceeds from third-party damage claims).

1.11.Lease. Lease means, unless the context otherwise requires, any lease or sublease made by Owner as landlord or by its predecessor.

1.12.Loan Servicing Fee. The Loan Servicing Fee is defined in Section 3.02 below.

1.13.Management Fee. The Management Fee is defined in Section 3.01 below.

1.14.Owner. Owner means the Company, the OP, and any joint venture, limited liability company or other affiliate of the Company or the OP, owned wholly or partially by the Company or the OP, that owns, in whole or in part, on behalf of the Company, one or more Projects or Debt Investments.

1.15.Project. Project means each multifamily rental property or other real estate property in which Owner now owns a direct or indirect equity interest or hereafter acquires a direct or indirect equity interest.

1.16.Project Personnel. Those persons employed by Manager with Owner’s prior approval to carry out Manager’s obligations under this Agreement (including, but not limited to, a Project Manager, Assistant Manager, Maintenance Supervisor, maintenance personnel, and other personnel necessary to the operation and maintenance of any Project as specified in the Budget).

2

1.17.Security Deposit Account. A trust account for the benefit of Owner established by Owner and maintained in an FDIC insured bank to hold tenant security deposits. Manager may open a separate Security Deposit Account for each Project.

1.18.Term. The Term of this Agreement shall commence on the date hereof, and shall terminate on the one-year anniversary thereof; provided, however, that unless this Agreement has been earlier terminated, the Term shall be automatically extended for additional one (1) year periods, on a year-to-year basis, commencing on the day immediately following the then-scheduled end of the Term. Notwithstanding the foregoing, either Owner or Manager may terminate this Agreement by giving thirty (30) days notice in writing to the other party without reason, and either party may also terminate this Agreement for cause as specified by Sections 7.02 and 7.04 below.

1.19.Working Capital Reserve. Twenty Thousand Dollars ($20,000) per Projectof Working Capital reserve shall be maintained by Manager in the Disbursement Account during the term hereof, used in connection with the operation of the Projects in accordance with the terms hereof and restored per the terms of Sections 4.03 hereof.

ARTICLE II

DUTIES AND RIGHTS OF MANAGER

2.01.     Appointment of Manager. For and in consideration of the compensation hereinafter provided, Manager shall, and the Owner hereby grants to Manager the right to manage the Projects and Debt Investments, and to supervise and direct the leasing, management and operation of the Projects. Such engagement shall not commence with respect to any particular Project or Debt Investment until Owner, in its sole discretion, has the ability to appoint or hire the Manager. Further, Owner may elect to exclude any Project or Debt Investment from the terms of this Agreement upon written notice to Manager delivered by Owner within ten (10) days following the later of (i) Owner’s acquisition of a direct or indirect equity interest in such Project or Debt Investment or (ii) the date on which Owner, in its sole discretion, has the ability to appoint or hire the Manager with respect to such Project or Debt Investment.  Owner has the right to include any previously excluded Project or Debt Investment ten (10) days following delivery of written notice from Owner to Manager.  Manager hereby accepts such appointment on the terms and conditions hereinafter set forth.

All services performed by Manager under this Agreement shall be performed as an independent contractor of the Owner. All obligations or expenses incurred hereunder, for the benefit of the Projects and all purchases of or contracts for sales or services in bulk or volume that Manager may obtain for discount or convenience in connection with its operation of other apartment projects, shall be for the account of, on behalf of, and at the expense of the Owner (reasonably allocated between all benefited Projects) except as otherwise specifically provided herein. The Owner shall not be obligated to reimburse Manager for expenses for: (i) office equipment or office supplies of Manager (unless incurred solely for the Projects or Debt Investments), (ii) any overhead expenses of Manager incurred with respect to any offices located at any place other than on the Projects, (iii) costs relating to accounting services performed hereunder, (iv) any salaries of employees of Manager not accounted for in the approved Budget and its supporting payroll schedule, or (v) any travel expenses of employees of Manager in supervising the on-site Project Personnel and the operation of the Projects, unless approved in advance in writing by the Owner.

3

2.02. Dealings with Advisor. Unless Owner specifically informs Manager to the contrary, Advisor may perform any of the obligations or exercise any of the rights of Owner under this Agreement; provided that any actions that Advisor takes on behalf of Owner pursuant hereto are subject to the terms of the agreements between Advisor and Owner, and this Section 2.02 does not expand or modify the authority of Advisor to act on behalf of Owner.

2.03.General Operation. Subject to the limitations imposed by the Budget from time to time, Manager shall manage the Projects and Debt Investments in the same manner as is customary and usual in management of comparable investments, and shall provide such services as are customarily provided by operators and servicers of high quality projects and investments of comparable class and standing.

Manager has received copies of agreements of limited partnership, joint venture partnership agreements and operating agreements of Owner and its affiliates as well as the articles of incorporation, bylaws, and registration statement on Form S-11 (no. 333-184476) of the Company, including all prospectus supplements and post-effective amendments thereto (collectively, the “Ownership Agreements”) and is familiar with the terms thereof. Advisor agrees to obtain and review copies of all mortgages on all properties and inform Manager of any restrictions relating to property use thereof. Manager will use reasonable care to avoid any act or omission which, in the performance of its duties hereunder, in any way conflicts with the terms of the Ownership Agreements or the mortgages in the absence of the express direction of the Conflicts Committee, and Manager shall promptly notify Owner if any such conflict arises.

In addition to the other obligations of Manager set forth herein, Manager shall render the following services and perform the following duties for Owner in connection with the Projects and Debt Investments in a commercially diligent and efficient manner: (a) maintain businesslike relations with tenants whose service requests shall be received, considered, recorded and acted upon in systematic fashion in order to show the action taken with respect to each; (b) collect all monthly rentals due from tenants and rent from users of recreational facilities in the Project, if any; (c) request, demand, collect, and receive any and all charges or rents which become due to Owner, and at Owner’s expense and the Company’s direction, coordinate and oversee such legal action as may be necessary or desirable to collect rent and/or evict tenants delinquent in payment of monthly rental or other charges (security deposits, late charges, etc.) as more particularly described in Section 2.10 below; (d) prepare or cause to be prepared for execution by the Owner (and/or the Company, as applicable) all forms, reports and returns, if any, required to be filed by or on behalf of the Owner under applicable federal, state or local laws and any other requirements relating to the employment of personnel (anything contained herein to the contrary notwithstanding, however, Manager shall not be obligated to prepare any of Owner’s or the Company’s state or federal income tax returns; (e) use all reasonable efforts at all times during the term of this Agreement to operate and maintain the Projects according to the highest standards achievable consistent with the operation of comparable quality units; (f) advertise when necessary, within the constraints of the Budget, the availability of units for rental and display “for rent” or other similar signs upon the Projects, it being understood that Manager may install one or more signs on or about the Project stating that the Project is under management of Manager and may use, in a tasteful manner, Manager’s name and logo in any display advertising of the Project; (g) sign, renew and cancel tenant leases for the Project as agent for Owner, in compliance with standards established by Owner and approved by Owner, on the lease form provided by Manager, and on terms based upon criteria approved from time to time by Owner and based upon Manager’s recommendations, and (h) monitor the performance of the Debt Investments, including (i) collecting amounts owed to the Owner, (ii) reviewing on an as-needed basis the properties serving, directly or indirectly, as collateral for the Debt Investments, the owners of those properties and the markets in general and (iii) maintaining escrow accounts, monitoring advances, monitoring loan covenants and reviewing insurance compliance.

4

It is understood and agreed, however, that Manager shall not, and does not, provide security services to the Projects. Should the Owner choose to do so, the Owner may direct that Manager, on Owner’s behalf, separately contract with a non-affiliated company (a “Security Company”) providing alarm systems, patrol and/or similar services (“Security Services”). Manager shall have no duty to supervise or control performance of Security Services for any Security Company but Manager shall, if requested by Owner, evaluate and report its findings to Owner, as directed. Without limiting the provisions of Section 6.03 of this Agreement, Owner shall indemnify, defend, protect and hold Manager harmless for, from and against any loss, liability, cost, expense, damage claim or cause of action, including, without limitation, attorneys’ fees, court costs and other litigation expenses and costs, arising from any personal injury, loss of property or other matter occurring on or about any Project, relating to the acts or omissions of a Security Company, any claimed inadequacy of Security Services, the failure to provide Security Services or any other matter relating to the security of any Project. The indemnification obligations of Owner in this Section 2.03 shall survive the expiration or earlier termination of this Agreement.

2.04.Budget.

(a)Manager will submit to Owner for Owner’s approval, an initial capital and operating budget for each Project (the “Initial Budget”) for the first fiscal year (or partial fiscal year as appropriate) within 14 days after a Project is included under this Agreement. Manager shall submit to Owner for Owner’s approval no later than sixty (60) days prior to the beginning of each successive Fiscal Year the Budget for the ensuing Fiscal Year. Manager shall provide Owner with such information regarding the Budget as may be, from time to time, reasonably requested by Owner. Upon receipt of the Budget from Manager, the Company shall promptly deliver the Budget to Owner. Owner shall approve or object to the Budget. Manager may proceed under the terms of the proposed Budget for items that are not objected to and may take any action with respect to items not approved if the expenditure is (i) less than Two Thousand Five Hundred Dollars ($2,500), (ii) is, in the Manager’s reasonable judgment, required to avoid personal injury, significant property damage, a default under any loan encumbering the Project, a violation of applicable law or the suspension of a service or (iii) non-discretionary items such as real estate taxes, insurance or utilities. In the event that the items that are objected to are operational expenditures (but not including real estate taxes, insurance, utilities and similar items that cannot be controlled by Manager), as opposed to capital expenditures, Manager shall be entitled to oversee and supervise the operation of each Project using the prior year’s budget for that Project until the approval is obtained. If the Budget for that Project is not approved, upon the request of Owner, Manager will prepare and deliver to Owner, a revised Budget for the Fiscal Year.

(b)Together with submission of the annual Budget, Manager shall submit to Owner for approval by Owner an operating plan for the general operation of the Projects for the subsequent Fiscal Year, including a proposed list of improvements to the Projects, general insurance plan, marketing plan and plan for the general operation and maintenance of the Projects (the “Operating Plan”). Upon the request of Owner, Manager will prepare and deliver to Owner, a revised Operating Plan for the Fiscal Year.

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(c)In the event there shall be a substantial discrepancy between the actual results of operations for any month and the estimated results of operations for such month as set forth in the Budget or the Operating Plan for any Project, Manager shall, upon request, furnish to Owner within fifteen (15) days after the expiration of such month a written explanation as to why the discrepancy occurred. If substantial variations have occurred or are anticipated by Manager during the course of any Fiscal Year, Manager, upon Owner’s reasonable request, shall prepare and submit to Owner a revised Budget and/or Operating Plan covering the remainder of the Fiscal Year.

2.05.Project Personnel. Manager shall use reasonable and prudent efforts to investigate, hire, train, instruct, pay, promote, discharge and supervise the work of all its employees involved with the management of the Projects. Since it is acknowledged that the Projects may need fulltime resident managers on site, it is agreed that a Project Employee (including his/her spouse and dependent children) may live rent-free in an apartment unit designated by Owner, and receive, in addition, salary and normal benefits approved in advance and accounted for in the Budget. All Project Personnel shall be employees of Manager.

Owner shall immediately reimburse Manager each pay period for the total aggregate compensation, including salary, and other related costs and fringe benefits, payable with respect to the Project Personnel who shall be accounted for in the approved Budget and supporting payroll schedule, any temporary employees working at each Project, the Project’s proportionate share of all costs relating to roving maintenance and similar personnel, but only to the extent reflected in the approved Budget. The term “fringe benefits” as used herein shall mean and include the employer’s contribution of F.I.C.A., unemployment compensation and other employment taxes, worker’s compensation, group life and accident and health insurance premiums, 401K contributions, performance bonuses, and disability and other similar benefits paid or payable by the Manager to its employees in other projects operated by Manager, but only to the extent reflected in the approved Budget.

2.06.Contracts and Supplies. Except as otherwise provided herein, Manager, as sub-agent for Owner and at Owner’s expense, and without compensation directly or indirectly to Manager, except as expressly set forth herein, shall enter into written agreements with (i) concessionaires, licensees, or other intended users of the facilities of the Projects, (ii) contractors furnishing services to the Projects, including, but not limited to, utilities, janitorial, trash collection, cleaning, vermin extermination, furnace and air conditioning maintenance, security protection, pest control, landscape and irrigation system maintenance, repair, maintenance, and replacement of elements of the buildings, recreational facilities or common areas (to the extent such work cannot reasonably and less expensively be done by Project Personnel), and any other services that are reasonably necessary to the maintenance and operation of first-class projects comparable to the Projects (herein called “Customary Services”). Manager shall place purchase orders as and when necessary to assure timely and adequate availability of such equipment, tools, appliances, materials and supplies as are necessary to properly maintain and operate the Projects. Notwithstanding the foregoing, all contracts (and renewals thereof) entered into by Manager, unless Manager has obtained Owner’s prior written consent, must be: (a) cancelable without penalty upon not more than thirty (30) days notice: and (b) have terms of one (1) year or less, and (c) require the provider of such Customary Services pursuant to such contract to comply with Owner’s insurance requirements. Manager shall obtain competitive bids annually for any such contracts and, in connection therewith, shall investigate the competency and history of all potential bidders; develop and submit detailed specifications for work to be performed; solicit and obtain such bids; conduct an analysis of bid results; and shall submit all bids to Owner for review and approval, together with Manager’s recommendation with respect thereto. Manager shall continually inspect the Projects and ensure that all contract specifications are being properly administered, and conduct periodic complete walk-throughs of the Projects with specific Customary Service providers as often as reasonably

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necessary. Manager shall use reasonable efforts to purchase all goods, supplies or services at the lowest cost reasonably available from reputable sources in the metropolitan areas where the Projects are located. In making any contract or purchase, Manager shall use reasonable efforts to obtain favorable discounts for Owner and all discounts, rebates or commissions under any contract or purchase order made hereunder shall inure to the benefit of Owner. Manager shall make payments under any such contract or purchase order to enable Owner to take advantage of any such discount if Owner provides sufficient funds therefor.

2.07.Alterations, Repairs and Maintenance.

(a)Manager shall make or install, or cause to be made and installed at Owner’s expense and in the name of Owner, all necessary or desirable repairs, interior and exterior cleaning, painting and decorating, plumbing, alterations, replacements, improvements and other normal maintenance and repair work on and to the Projects as are customarily made by Manager in the operation of first-class apartment projects; provided that no unbudgeted expenditure may be made for such purposes without the prior approval of Owner, except emergency repairs involving manifest danger to life or property, or when necessary to avoid criminal or civil liability, or for the safety of the tenants, or to avoid the suspension of any necessary service to the Projects (“Emergency Repairs”). Emergency Repairs may be made by the Manager without prior approval and irrespective of the cost limitations imposed by Section 2.04(a), provided that in each such instance, Manager shall, before causing any such Emergency Repairs to be made, use reasonable efforts under the circumstances to notify Owner of that repair. All such work shall be performed by Project Personnel unless it is not reasonable for them to do so due to the expertise, time constraints, or other considerations involved, and/or because having them do so is more expensive.

(b)In accordance with the terms of the approved Budget or upon written demand and/or approval (except in the case of emergency) of Owner, from time to time during the term hereof Manager shall, at Owner’s expense, make all required capital improvements, replacements or repairs to the Projects. Subject to obtaining Owner’s prior written approval in regard to sums necessary to cover costs of unbudgeted capital improvements, Manager shall first use any excess funds in the Depository Account that are not committed to operating expenses, and then shall use funds furnished by Owner for that purpose. The award of a contract for a capital improvement exceeding $5,000 in cost shall be approved by Owner.

2.08.Licenses and Permits. Manager shall apply for, obtain, and maintain, in the name and at the expense of Owner, all licenses and permits (including deposits and bonds) required of Owner or Manager in connection with the management and operation of the Project. Owner shall execute and deliver any and all applications and other documents and to otherwise cooperate to the fullest extent with Manager in applying for, obtaining and maintaining such licenses and permits.

2.09.Compliance with Laws. Manager shall use all reasonable efforts to cause all such acts and things to be done in and about the Projects as are required by this Agreement or by any laws, regulations and requirements of any federal, state or municipal government having jurisdiction respecting the use or manner of use of the Projects or the maintenance or operation thereof.

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2.10.Legal Proceedings. Manager shall institute, in its own name or in the name of Owner and/or the Company or the OP (as applicable), all legal actions or proceedings that Manager deems reasonable in order to collect rent, or other income from the Projects pursuant to the Leases and to evict and dispossess tenants or other persons in possession, or to otherwise cancel, terminate, or enforce any lease, license, concession or Customary Service contract for the breach thereof by the tenant, licensee, concessionaire, or contractor. All decisions with respect to settlement or case management shall be made only after consultation with and approval by Owner. In each such instance where expenses related to such action are expected to exceed $2,000.00, Manager shall, before taking or causing to be taken any such action, use reasonable efforts under the circumstances to notify Owner of the need for this action, and obtain Owner’s approval. Manager shall promptly notify Owner of any order, rule, or determination or notice of violation of any law or order of any governmental authority.

2.11.Debts of Owner. In the performance of its duties as Manager, Manager shall act solely on behalf of Owner in Manager's capacity as an independent contractor. All debts and liabilities to third persons incurred by Manager pursuant to this Agreement and in the course of its operation and management of the Projects shall be the debts and liabilities of Owner only, and Manager shall not be liable for (and is hereby indemnified with respect to) any such debts or liabilities, except to the extent Manager has exceeded its authority hereunder. Manager shall have no responsibility to make payments on any indebtedness incurred directly by Owner whether or not secured by the Projects or any portion thereof. Without limiting the provisions of Section 6.03 of this Agreement, Owner shall indemnify, defend, protect and hold Manager harmless for, from and against any loss, liability, cost, expense, damage claim or cause of action, including, but not limited to attorneys’ fees, court costs and other litigation expenses and costs, arising from any debt, liability or payment for which Manager is being exculpated pursuant to this Section 2.11. The indemnification obligation of Owner in this Section 2.11 shall survive the expiration or earlier termination of this Agreement.

ARTICLE III

MANAGEMENT FEES

3.01Management Fee. In addition to the other reimbursements to Manager provided for elsewhere in this Agreement, Owner shall, on a monthly basis, pay to Manager for its property management services with respect to the Projects a Management Fee equal to 4.5% of Gross Receipts (or a prorated portion for the first month if the Commencement Date occurs on other than the first day of the month); provided, however, that (i) for Projects that are less than 75% occupied upon the Owner’s taking of possession of such Project or (ii) to the extent that the Owner’s business plan for such Project includes a reduction of the occupancy of such Project to less than 75% during the first 12 months after the Owner’s taking of possession of such Project, Manager will receive a minimum Management Fee for the first 12 months of ownership in an amount equal to $40 per unit for multifamily rental properties or $0.05 per square foot for other types of properties per month. If this Agreement is terminated anytime other than last day of a calendar month, other than for cause, Manager shall be entitled to receive the Management Fee on a pro rated basis for the month this Agreement is terminated. 

3.02Loan Servicing Fee. In addition to the Management Fee and the other reimbursements to Manager provided for elsewhere in this Agreement, Owner shall, on a monthly basis, pay to Manager for its management services with respect to Debt Investments a Loan Servicing Fee equal to 2.75% of gross interest received from these investments.

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3.03Construction Management Fee. If Manager is requested by Owner to provide construction management services for new capital improvements (and not maintenance or repairs), Owner shall pay a construction management fee to Manager equal to 5.0% of actual aggregate cost of the redevelopment construction. The payment of the Construction Management Fee shall be subject to the limitations on acquisition fees and expenses contained in the Company’s charter.

3.04Other Fees. With the prior approval and direction of Owner, Manager may obtain services and materials, including, but not limited to, advertising, consulting, computer hardware and software, forms for use at the Projects, contract services, accounting and bookkeeping services and building materials, through the organization subsidiaries or affiliates of Manager for the benefit of the Projects and Debt Investments, provided the quality of service and the price thereof is competitive with comparable prices and services offered by third parties, and the costs therefore shall be reimbursed by Owner. All discounts, rebates and other savings realized as a result of such services being supplied by an affiliate of Manager shall inure solely to the benefit of Owner. In addition, the following overhead costs shall be reimbursed by Owner: (x) a $350 per month per Project IT Fee for use of Manager’s IT Help Desk and computer training services and (y) a $350 per month per Project Support Fee for use of Manager’s regional management personnel for training and preparation, review and advisory services relating to third party contracts.

3.05Place of Payment. All sums payable by Owner to Manager hereunder shall be payable to Manager at 1845 Walnut Street, 18th Floor, Philadelphia, Pennsylvania 19103, unless the Manager shall from time to time specify a different address in writing.

ARTICLE IV

PROCEDURE FOR HANDLING RECEIPTS AND OPERATING CAPITAL

4.01.Bank Deposits. (a) All monies received by Manager for or on behalf of Owner shall be deposited into the “Depository Account” which shall be an interest bearing account designated by Owner in Owner’s name. Manager shall account for such funds consistent with the system of accounting for the Projects and Debt Investments approved by Owner. All funds on deposit shall be and remain under the sole and exclusive control of Owner, subject to the provisions hereof.

(b) A “Disbursement Account” shall also be established to pay the normal and reasonable expenses incident to the operation and maintenance of the Projects. The Disbursement Account shall be under the signatory control of the Manager.

4.02.Security Deposits. Manager shall comply with all applicable laws with respect to security deposits. All security deposits and other funds received by Manager shall be promptly deposited in the Security Deposit Account and at all times be the property of Owner, subject to Owner’s obligation to refund the same to tenants if and when required by the leases.

4.03.Transfer and Disbursement Account. Upon written request of Manager with supporting documentation, Owner shall weekly wire funds from the Depository Account into the Disbursement Account in the amount of disbursements to be made on behalf of the Project approved by Owner. Manager shall write checks from the Disbursement Account to pay for (i) costs and expenses of maintaining, operating, leasing, and supervising the operation of the Projects, in accordance with the approved Budget and (ii) security deposit reimbursement to tenants to the extent they are entitled reimbursement under the leases, or payment of rent, damages, or other purposes for which security deposits may be used pursuant to the leases.

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4.04.Authorized Signatories. In addition to any signatory designated by Owner, any persons from time to time designated by Manager, and approved in writing by Owner, shall be authorized signatories on the Disbursement Account, and shall have authority to make disbursements from such Disbursement Account for the purpose of fulfilling Manager’s obligations hereunder. Funds over Five Thousand Dollars ($5,000.00) may be withdrawn from the Disbursement Account in accordance with this Article IV, only upon the signature of at least two (2) individuals who have been granted that authority by Manager and funds over Twenty Five Thousand Dollars ($25,000) may be withdrawn from the Disbursement Account in accordance with this Article IV only upon the additional prior written approval of Owner, excluding property taxes. All persons who are authorized signatories or who in any way handle funds for the Projects (on-site or off-site) shall be insured for dishonesty in the minimum account of $500,000.00 per occurrence or loss with not more than a $5,000.00 deductible. A certificate confirming such insurance naming Manager, the Company, the OP and Owner as named insureds and confirming that it will not be modified or cancelled without at least thirty (30) days prior written notice to Owner shall be delivered to Owner within 10 days after the date hereof. Any expense relating to such bonds shall be paid by Manager without reimbursement.

ARTICLE V

ACCOUNTING

5.01.Books of Accounts. Manager shall maintain adequate and separate books and records for the Projects and Debt Investments with the entries supported by sufficient documentation to ascertain their accuracy with respect to the Projects and Debt Investments. Owner agrees to provide to Manager any financial or other information reasonably requested by Manager to carry out its services hereunder. Manager shall maintain such books and records at the Manager’s office, at the Projects or at a designated office readily accessible to the Company, the OP and/or Owner. Manager shall ensure such control over accounting and financial transactions as is commercially reasonably necessary to protect the Owner’s assets from theft, error or fraudulent activity by Manager’s employees. Manager shall bear losses arising from such instances, including, without limitation, the following: (a) theft of assets by Manager’s employees, principals or officers or those individuals associated or affiliated with Manager; (b) overpayment or duplicate payment of invoices arising from either gross negligence or willful misconduct, unless credit is subsequently received; (c) overpayment of labor costs arising from either the gross negligence or willful misconduct of Manager, unless credit is subsequently received by the Owner; (d)  overpayment resulting from payment from suppliers to Manager’s employees or associates arising from the purchase of goods or services for the Projects; and (e) unauthorized use of facilities by Manager or Manager’s employees or associates.

5.02.Financial Reports. No later than the fifteenth (15^th) calendar day following the close of each month and calendar quarter, Manager shall furnish to Owner a report of all significant transactions occurring during the prior month as described on Exhibit A attached hereto. Manager also shall deliver to Owner within a reasonable time after (i) the close of a calendar year and (ii) the termination of this Agreement, a balance sheet for the Projects and Debt Investments. This report shall show all collections, delinquencies, uncollectible items, vacancies and other matters pertaining to the management, operation and maintenance of the Projects and Debt Investments during the month. Upon the termination of this Agreement, Manager shall deliver to Owner all reports described on Exhibit A within thirty (30) calendar days of the effective date of termination. The statement of income and expenses, the balance sheet and all other financial statements and reports shall be prepared on an accrual basis in accordance with, to the extent possible, generally accepted accounting principals (except that footnote disclosures are not required). Manager may, but shall not be required, to, obtain audited financial statements for the Projects. Upon request by Owner,

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Manager shall also comply with all reporting requirements relating to the operation of the Projects required under any mortgage or deed of trust affecting the Projects. Notwithstanding the foregoing, Owner reserves the right to reasonably request that the financial reports be provided in a different format at no additional cost.

5.03.    Supporting Documentation. As additional support to the quarterly financial statement, unless otherwise directed by Owner, and at the expense of Owner, Manager shall maintain and make available at Manager’s office or at the Projects or at a designated office readily accessible to the Company, the OP and/or Owner, copies of the following: (a) all bank statements, bank deposit slips, bank debit and credit memos, canceled checks and bank reconciliations; (b) detailed cash receipts and disbursement records; (c) detailed trial balance for receivables and payables and billed and unbilled revenue items; (d) rent roll of tenants; (e) paid invoices (or copies thereof); (f) summaries of any adjusting journal entries; (g) supporting documentation for payroll, payroll taxes and employee benefits; (h) appropriate details of accrued expenses and property records; (i) information regarding the operation of the Projects necessary for preparation of the tax returns for the Owner; and (j) market study of competition (quarterly only). In addition, Manager shall deliver quarterly to Owner with the quarterly financial statement, copies of the documents described in (a) (statements and reconciliations only), (b), (c), (d) and (h) above. Manager shall deliver a copy of the document described in (j) to Owner upon receipt of a written request.

ARTICLE VI

GENERAL COVENANTS

6.01.Operating Expenses. The Company and the OP shall cause Owner to be solely responsible for the costs and expenses of maintaining and operating the Projects in accordance with the provisions of this Agreement, and shall pay all such costs and expenses, to the extent contemplated by this Agreement or incurred in accordance with the Budget, except if such costs and/or expenses are (i) attributable to costs arising from gross negligence or willful misconduct of Manager or Manager’s associates and/or employees; or (ii) cost of insurance purchased by Manager for its own account.

6.02.Right of Inspection and Review. Owner, the Company and the OP and their accountants, attorneys, and agents shall have the right to enter upon any part of the Projects at all reasonable times during the term of this Agreement for the purpose of examining or inspecting the Projects or examining or making extracts of books and records of the Projects, but any inspection shall be done with as little disruption to the business of the Projects as possible during normal office hours and with reasonable notice.

6.03.    Indemnification and Hold Harmless.

(a)Indemnification and Hold Harmless By Owner. Owner shall indemnify, hold harmless and defend Manager (and Manager’s partners, directors, shareholders, officer, employees and agents), with counsel reasonably satisfactory to both the Manager and the Owner’s insurer, for, from and against any and all liabilities, claims, causes of action, losses, demands and expenses whatsoever including, but not limited to attorneys’ fees, court costs and other litigation expenses and costs arising out of or in connection with the ownership, maintenance or operation of the Projects, Debt Investments or this Agreement, including but not limited to claims involving security services as to which Manager is acting under the express or implied directions of Owner, and the loss of use of property following and resulting from damage or destruction (collectively “Claims”), except to the extent arising directly from the negligence or misconduct of Manager. Owner’s Liability Insurance (as defined in Section 8.01 below) will be required to cover all actions of Manager where the Owner’s insurer agrees to provide Owner and Manager a defense

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(whether or not such defense is provided with a reservation of rights by the insurer) in accordance with the terms of such insurance policy. The indemnification by Owner contained in this Section 6.03 is separate and in addition to any other indemnification obligations of Owner contained in this Agreement.

(b)Indemnification By Manager. Manager shall indemnify Owner and the Company, the OP and Advisor (and their respective directors, shareholders, members, trustees, agents, employees and officers) with counsel reasonably satisfactory to both the Owner and the Manager’s insurer, for, from and against any and all Claims, which arise out of the gross negligence or willful misconduct of Manager.

(c)Survival of Covenants. The indemnification and hold harmless obligations of the parties in this Section 6.03 shall survive the expiration or earlier termination of this Agreement.

6.04.Covenants Concerning Payment of Operating Expenses. If there are not sufficient funds in the Depository Account to move to the Disbursement Account in order to make any payment of operating expenses, Manager shall immediately notify Owner in writing. Owner will deposit funds within fifteen (15) days of written notification into the Disbursement Account. Owner further recognizes that the Projects may be operated in conjunction with other projects and that costs may be allocated or shared between such projects on a more efficient and less expensive method of operation in an effort to save costs and operate the Projects in a more efficient manner.

ARTICLE VII

DEFAULTS; TERMINATION RIGHTS

7.01.Default by Manager. Manager shall be deemed to be in breach hereunder in the event Manager shall fail to keep, observe or perform any covenant, agreement, term or provision of this Agreement to be kept, observed or performed by Manager, and such breach shall continue for a period of thirty (30) days after notice thereof by Owner to Manager, or if such breach cannot be cured within thirty (30) days, then such additional period as shall be reasonable, provided that Manager is capable of curing same and is diligently proceeding to cure such breach, and provided further that if such breach is a failure to pay money, such, cure period shall be five (5) days after notice from Owner with no additional period thereafter.

7.02.Remedies of Owner. Upon the occurrence of a breach by Manager as specified in Section 7.01 hereof, Owner shall be entitled to immediately terminate this Agreement and Owner shall have the right to pursue any other remedy it may have at law or in equity. Following such a termination, Owner shall have no further obligation to pay any fee due hereunder. Notwithstanding such termination, Manager shall not be relieved of any liability arising as a result of Manager’s default and the resulting termination of this Agreement.

7.03.Defaults by Owner. Owner shall be deemed to be in breach hereunder in the event Owner shall fail to keep, observe or perform any covenant, agreement, term or provision of this Agreement to be kept, observed or performed by Owner, and such breach shall continue for a period of thirty (30) days after written notice thereof by Manager to Owner, or if such breach cannot be cured within thirty (30) days, then such additional period as shall be reasonable provided Owner is capable of curing same and is diligently proceeding to cure such breach, provided that such breach is a failure to pay money, such cure period shall be five (5) days after written notice from Manager with no additional period thereafter.

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7.04.Remedies of Manager. Upon the occurrence of a breach by Owner as specified in Section 7.03 hereof, Manager shall be entitled to immediately terminate this Agreement and upon any such termination by Manager pursuant to this Section 7.04, Manager shall have the right to pursue any other remedy it may have at law or in equity, it being expressly understood that following such a termination, Manager shall have no further obligation to perform any of its obligations hereunder other than pursuant to Section 7.05 below, however, notwithstanding such termination, Owner shall continue to be obligated to pay and perform all of its obligations which have accrued as of the date of termination.

7.05.Expiration of Term. Upon the expiration of the Term hereof pursuant to Section 7.07 hereof, or the earlier termination hereof pursuant to either of Section 7.01 or 7.03, Manager shall deliver to Owner all funds, including tenant security deposits, but save and except such sums that are due and owing to Manager hereunder and the books and records of Owner then in the possession or control of Manager. Within thirty (30) days following expiration or termination, Manager shall deliver to Owner a final accounting, in writing, with respect to the operations of the Projects. This provision shall survive the expiration or earlier termination of this Agreement.

7.06.Termination of Advisory Agreement. Notwithstanding anything to the contrary contained herein, unless the holder of a mortgage on a Project otherwise determines to keep this Agreement in effect, this Agreement shall automatically terminate upon Manager receiving written notification from Advisor or Owner that Owner has terminated the Advisory Agreement. Upon such termination, the parties hereto shall have no further obligation to the other, unless otherwise specifically set forth herein.

7.07Termination of a Project or Debt Investment. This Agreement shall automatically terminate as to any specific Project or Debt Investment upon its sale or other transfer of ownership to a person other than Owner or an affiliate of Owner. In the event that Owner forecloses or otherwise takes title to the real property underlying a Debt Investment, the underlying property will automatically become a Project under this Agreement, unless the property is excluded pursuant to Section 2.01 of this Agreement, and Manager will thereafter be entitled to receive a Management Fee instead of a Loan Servicing Fee with respect thereto.

ARTICLE VIII

INSURANCE

8.01Owner's Liability Insurance. During the term of this Agreement and all renewals thereof, Owner shall, at Owner's expense, carry and maintain primary commercial general liability insurance on an "occurrence" basis, naming Manager as an additional insured, with limits of not less than Five Million Dollars ($5,000,000.00) per occurrence (the "Owner's Liability Insurance"). Owner shall name Manager as an additional insured on Owner’s Liability Insurance. If the Owner's Liability Insurance has a deductible, or similar clause, Owner shall be responsible for paying any losses that are not covered by the Owner's Liability Insurance because of said deductible or similar clause.

8.02.Insurance Carried by Manager. Manager shall maintain the following insurance during the term of this Agreement, as approved by Owner:

(a)Workers’ Compensation Insurance complying with the laws of the State in which the work is to be performed covering all its employees whether or not working at or in connection with a Project, as a Project Personnel expense under Section 2.05 above;

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(b)Employers’ Liability Insurance with minimum liability limits of $1,000,000 Bodily Injury by Accident per accident, $1,000,000 Bodily Injury by Disease per person and $1,000,000 Bodily Injury by Disease policy limit, at Manager’s expense as part of its overhead;

(c)Commercial General Liability Insurance with minimum limits of $1,000,000 Combined Single Limit for Bodily Injury and Property Damage, each occurrence/$2,000,000 General Aggregate, at Manager’s expense as part of its overhead;

(d)Automobile Liability Insurance covering owned, non-owned and hired automobiles and automobile equipment with minimum limit of $1,000,000 for injury or death of any one person, for any occurrence and property damage, at Manager’s expense as part of its overhead; and

(e)Employees Dishonesty Insurance as described in Section 4.04 above, at Manager’s expense as part of its overhead.

Insurers providing the coverage to Owner and Manager described in this Article VIII shall have a Best’s rating of A-VII or better. Owner reserves the right to approve the insurer’s form and content of Manager’s insurance policies. All policies will contain severability of interest provisions. Within thirty (30) days of the date of this Agreement, Owner shall provide to Manager, and Manager shall provide to Owner, Certificates of Insurance evidencing insurance. Such certificates will be endorsed to provide thirty (30) days prior written notice to Manager of any material change or cancellation of coverage.

8.03.Owner's Liability Insurance shall be Primary. In connection with claims by third parties, as between Owner's Liability Insurance and Manager's Liability Insurance, Owner's Liability Insurance shall be considered the primary coverage. No claim shall be made by Owner or its insurance company under or with respect to any insurance maintained by Manager except in the event that Owner's Liability Insurance is exhausted or in the event such claim is caused solely by the gross negligence (except actions or policies specifically approved or required by Owner) or willful misconduct (except actions or policies specifically approved or required by Owner) on the part of Manager or Manager's employees.Owner shall have its insurance carrier accept and endorse these coverage requirements.

8.04.Waiver of Subrogation. Each insurance policy maintained by Owner or by Manager as required herein shall contain a waiver of subrogation clause, so that no insurer shall have any claim over or against Owner or Manager, as the case may be, by way of subrogation or otherwise, with respect to any claims that are insured under such policy. All insurance relating to each Project shall be only for the benefit of the party securing said insurance and all others named as insureds. Owner and Manager hereby release each other from all rights of recovery under or through subrogation or otherwise for any and all losses and damages to the extent of such insurance coverage and agree that no insurer shall have a right to recover any amounts paid with respect to any claim against Owner or Manager by subrogation, assignment or otherwise.

8.05.Handling Claims. Manager shall report to Owner promptly in writing all accidents and claims of which it is aware for damage and injury relating to the ownership, operation, and maintenance of the Projects and any damage or destruction to the Projects coming to the attention of Manager. Manager shall not settle on Owner's behalf any claims with Owner’s insurers or any third-party claimant without Owner’s prior consent.

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8.06.Environmental Matters.

(a)Manager shall not knowingly place or cause to be placed on, in, under or around the Projects, any Hazardous Substances (as defined below). Manager shall take all commercially reasonable steps to cause any tenants who do same to remove such Hazardous Substances in a timely manner. Without limiting the provisions of Section 6.03 of this Agreement, Owner agrees to defend, indemnify, and hold harmless Manager and its partners, officers, employees and agents, for, from and against any and all actions, administrative proceedings, causes of action, charges, claims, commissions, costs, damages, decrees, demands, duties, expenses, fees, fines, judgments, liabilities, losses, obligations, orders, penalties, recourses, remedies, responsibilities, rights, suits and undertakings of every nature and kind whatsoever, including, but not limited to, attorneys' fees, court costs and other litigation expenses and costs, from the presence of Hazardous Substances on, under or about the Project, except to the extent that the Hazardous Substances are present as a result of the gross negligence or willful misconduct of Manager or the breach of Manager’s obligations pursuant to the first sentence of this Section 8.06. Without limiting the generality of the foregoing, the indemnification provided by this paragraph specifically shall cover costs incurred in connection with any investigation of site conditions or any remediation, removal or restoration work required by any federal, state or local governmental agency because of the presence of Hazardous Substances in, on, under or about the Project, except to the extent that the Hazardous Substances are present as a result of the gross negligence or willful misconduct of Manager or the breach of Manager’s obligations pursuant to the first sentence of this Section 8.06. For purposes of this section, “Hazardous Substances” shall mean (i) all substances defined as hazardous materials, hazardous wastes, hazardous substances, or extremely hazardous waste under any applicable federal, state, or local law or regulation, and (ii) mold, mold contamination, mold spores, bacterial contaminants and/or any and all substances or materials related thereto. The indemnification obligation of Owner in this Section 8.06 shall survive the expiration or earlier termination of this Agreement.

(b)Without limiting the indemnifications set forth in Section 8.06(a) above, Owner and Manager further agree that Owner is solely responsible for any and all conditions at the Projects that could give rise to bodily injury or property damage claims stemming from the presence of mold, mold contamination, mold spores, bacterial contaminants and/or any and all substances or materials related thereto. Manager shall endeavor to inform Owner of the availability and cost of insurance to cover any and all conditions at the Projects that could give rise to bodily injury or property damage claims stemming from the presence of mold, mold contamination, mold spores, bacterial contaminants and/or any and all substances or materials related thereto, but the decision of whether or not to purchase insurance relating to such risk is solely that of Owner, and Manager shall have no obligation or liability whatsoever therefor. Owner’s failure to purchase or consider insurance alternatives for such risk shall not in any manner alter Manager’s obligations or liabilities hereunder.

ARTICLE IX

MISCELLANEOUS PROVISIONS

9.01.Governing Law. This Agreement shall be governed by and construed and interpreted in accordance with the laws of the Commonwealth of Pennsylvania.

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9.02.Notices. Any notice or communication hereunder must be in writing, and may be given either by personal delivery or by private courier with an acknowledged receipt or by registered or certified mail, and if given by registered or certified mail, the notice shall be deemed to have been given and received three (3) business days after a registered or certified letter containing such notice, properly addressed, with postage prepaid, is deposited in the United States mail; and if given otherwise than by registered mail, it shall be deemed to have been given when delivered to and received by the party to whom it is addressed. Such notices or communications shall be given to the parties hereto at the addresses set forth opposite the names of the respective parties on the signature page hereof. Any party hereto may at any time by giving ten (10) days written notice to the other party hereto designate any other address in substitution of the foregoing address to which such notice or communication shall be given.

9.03.Severability. If any term, covenant or condition of this Agreement or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Agreement or such other documents, or the application of such term, covenant or condition to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term, covenant or condition of this Agreement or such other documents shall be valid and shall be enforced to the fullest extent permitted by law.

9.04.No Joint Venture or Partnership. Owner and Manager hereby agree that nothing contained herein or in any document executed in connection herewith shall be construed as making any combination of Manager, Owner, the Company and the OP joint venturers or partners.

9.05.Modification; Termination. This Agreement terminates any and all prior management agreements among Owner and Manager, related to the Projects and Debt Investments, and any amendment, modification, termination or release of this Agreement may be affected only by a written instrument executed by Manager and Owner.

9.06.Attorneys’ Fees. Should either party employ an attorney or attorneys to enforce any of the provisions hereof or to protect its interest in any manner arising under this Agreement, or to recover damages for the breach of this Agreement, the prevailing party in such action shall be entitled to recover all reasonable costs, damages and expenses, including attorneys’ and experts’ fees, and costs expended or incurred in connection therewith.

9.07.Total Agreement. This Agreement is a total and complete integration of any and all agreements existing among Manager and Owner and supersedes any prior oral or written agreements, promises or representations between them.

9.08.Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their permitted successors and assigns. This Agreement is not assignable by Manager without Owner’s consent.

[SIGNATURES CONTAINED ON FOLLOWING PAGE]

16

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

ADDRESS	OWNER
	RRE OPPORTUNITY OP II, LP
	BY: RESOURCE REAL ESTATE OPPORTUNITY REIT II, INC.,
	as general partner of RRE Opportunity OP II, LP
1845 Walnut Street	By: /s/ Alan F. Feldman
18th Floor	Name: Alan F. Feldman
Philadelphia,PA 19103	Title: Chief Executive Officer
	RESOURCE REAL ESTATE OPPORTUNITY REIT II, INC.
1845 Walnut Street	By: /s/ Alan F. Feldman
18th Floor	Name: Alan F. Feldman
Philadelphia,PA 19103	Title: Chief Executive Officer
ADDRESS	ADVISOR
	RESOURCE REAL ESTATE OPPORTUNITY ADVISOR II, LLC
1845 Walnut Street	By: /s/ Kevin M. Finkel
18th Floor	Name: Kevin M. Finkel
Philadelphia,PA 19103	Title: President
ADDRESS	MANAGER
	RESOURCE REAL ESTATE OPPORTUNITY MANAGER II, LLC
1845 Walnut Street	By: /s/ Kevin M. Finkel
18th Floor	Name: Kevin M. Finkel
Philadelphia,PA 19103	Title: President

17

Exhibit A

I.MONTHLY REPORTING REQUIREMENTS

Manager must provide the following by the 15^th day of every calendar month:

• Operating Statements on an accrual basis in both traditional P&L format (to GAAP Net Income) and Owner approved format (to NOI, Net Cash Flow, and Ending Cash), showing MTD and YTD in Actual/Budget/Variance column format

• accrual basis variance analysis, with tenant-level detail for income, TI, and leasing expenses

• Check Register for the current month

• VOID Check register

• Balance Sheets on an accrual basis

• Rent Roll and Vacancy reports

• Aged Accounts Receivable trial balance

• Security Deposit detail ledger

• General Ledger reports on an accrual basis

• All above information in no more than three (3) hardcopies, with financial statements in a electronic format

• Copy of Bank Statement(s) and reconciliation(s)

• Copies of invoices for individual capital expenditures exceeding $5,000

• Ending trial balance on an accrual basis

• Net activity trial balance on an accrual basis

II.QUARTERLY REPORTING REQUIREMENTS

In addition to the monthly requirements (above), the Manager must provide the following by the 15^th day of every calendar month following each calendar quarter end:

• QTD Operating Statements in Actual/Budget/Variance column forma

18

EX-10.10

Exhibit 10.10

SECOND AMENDMENT TO

AMENDED AND RESTATED ADVISORY AGREEMENT

This SECOND AMENDMENT TO AMENDED AND RESTATED ADVISORY AGREEMENT (the “Amendment”), dated March 24, 2015, is between Resource Real Estate Opportunity REIT II, Inc., a Maryland corporation (the “Company”), and Resource Real Estate Opportunity Advisor II, LLC, a Delaware limited liability company (the “Advisor”).

WHEREAS, the Company and the Advisor previously entered that certain Amended and Restated Advisory Agreement dated January 9, 2014, as amended by the First Amendment to the Amended and Restated Advisory Agreement dated October 6, 2014 and as renewed by that certain Renewal Agreement dated December 20, 2014 (the “Agreement”).

WHEREAS, the Company and the Advisor desire to further amend the Agreement to clarify the calculation of asset management fees.

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the parties hereto, intending to be legally bound hereby, do hereby agree as follows:

1.Defined Terms. Any term used herein that is not otherwise defined herein shall have the meaning ascribed to such term as provided in the Agreement.

2.Amendment to Section 8.02. Pursuant to Section 17.05 of the Agreement, the Company and the Advisor hereby agree that Section 8.02 of the Agreement shall be amended and restated in its entirety as follows:

8.02 Asset Management Fees. The Company shall pay the Advisor as compensation for the services described in Section 3.03 hereof a monthly fee (the “Asset Management Fee”) in an amount equal to one-twelfth of 1.0% of the Cost of Investments, as of the end of the current month subject to the following adjustments:

(a) For any month in which a Property, Loan or other Permitted Investment is disposed of, the Company shall prorate the portion of the Asset Management Fee related to that specific Property, Loan, or other Permitted Investment by using a numerator equal to the number of days owned during the month of disposal, divided by a denominator equal to the total number of days in such month and add the resulting amount to the fee due for such month; and

(b) For any month in which a Property, Loan or other Permitted Investment is acquired, the Company shall prorate the portion of the Asset Management Fee related to that specific Property, Loan, or other Permitted Investment by using a numerator equal to the number of days in the month less the number of days owned during the month (including the full day of closing), divided by a denominator equal to the total number of days in such month and deduct the resulting amount from the fee due for such month.

The Advisor shall submit a monthly invoice to the Company, accompanied by a computation of the Asset Management Fee for the applicable period. Generally, the Asset Management Fee payable to the Advisor for any month shall be paid on the last day of such month, or within the first three business days following the last day of such month. As an example, the Asset Management Fee calculated with respect to the Property, Loans, or other Permitted Investments owned at the end of the month of January shall be due and payable between January 31 and the third business day of February in any year.

The Asset Management Fee may or may not be taken, in whole or in part, as to any year in the sole discretion of the Advisor. All or any portion of the Asset Management Fees not taken as to any fiscal year shall be deferred without interest and may be paid in such other fiscal year as the Advisor shall determine.

3.Continuing Effect. Except as otherwise set forth in this Amendment, the terms of the Agreement shall continue in full force and effect and shall not be deemed to have otherwise been amended, modified, revised or altered.

4.Counterparts. The parties agree that this Amendment has been or may be executed in several counterparts, each of which shall be deemed an original, and all counterparts shall together constitute one and the same instrument.

[SIGNATURES CONTAINED ON FOLLOWING PAGE]

IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as of the date first written above.

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

EX-21.1

Exhibit 21.1

Subsidiaries of the Registrant

Subsidiaries

RRE Opportunity Holdings II, LLC

RRE Opportunity OP II, LP

RRE Bear Creek Holdings, LLC

RRE Oak Hill Holdings, LLC

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

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, 2014 of Resource Real Estate Opportunity REIT II, Inc.;

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

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

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

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

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

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

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

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

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

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

		RESOURCE REAL ESTATE OPPORTUNITY REIT II, INC.
March 30, 2015	By:	/s/ Alan F. Feldman
		Alan F. Feldman
		Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF EXECUTIVE 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, 2014 of Resource Real Estate Opportunity REIT II, Inc.;

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

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

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

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

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

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

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

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

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

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

		RESOURCE REAL ESTATE OPPORTUNITY REIT II, INC.
March 30, 2015	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 II, Inc. (“the Company”) on Form 10-K for the year ended December 31, 2014 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 II, INC.
March 30, 2015	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 II, Inc. (“the Company”) on Form 10-K for the year ended December 31, 2014 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 II, INC.
March 30, 2015	By:	/s/ Steven R. Saltzman
		Steven R. Saltzman
		Chief Financial Officer
		(Principal Financial Officer)

XML

Supplemental Cash Flow Information (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Non-cash financing and investing activities:
Increase in subscription receivables	$ 3,819,991	$ 0
Distribution payable	259,379	0
Stock issued from distribution reinvestment plan	195,542	0
Stock distributions issued	214,833	0
Deferred offering costs	1,803,098	0
Due to related parties	1,467,064	0
Cash paid during the period for:
Interest	$ 133,036	$ 0

XML

Equity - Narrative (Details) (USD $)	12 Months Ended	0 Months Ended
	Dec. 31, 2014	Jun. 05, 2014	Nov. 13, 2014	Nov. 19, 2014	Dec. 31, 2013	Dec. 31, 2012	Aug. 14, 2014
Class of Stock [Line Items]
Preferred stock, shares authorized (in shares)	10,000,000				10,000,000
Preferred stock, par value (in dollars per share)	$ 0.01				$ 0.01
Preferred stock, shares issued (in shares)	0				0
Preferred stock, shares outstanding (in shares)	0				0
Common stock, shares outstanding (in shares)	4,759,567				15,000
Common stock, par value (in dollars per share)	$ 0.01				$ 0.01
Common stock	$ 47,596				$ 150
Distributions declared	328,785
Net Cash Distributions	113,952
Common stock issued through distribution reinvestment plan	0
Common Stock, Authorized Stock Distribution, Par Value Per Share				$ 0.01
Advisor [Member]
Class of Stock [Line Items]
Common stock, shares outstanding (in shares)	117,778
Common stock	1,100,000
Convertible Stock [Member]
Class of Stock [Line Items]
Common stock, shares outstanding (in shares)	50,000				50,000	0
Common stock, par value (in dollars per share)	$ 0.01				$ 0.01
Common stock conversion terms, percent of paid distributions equal to price at which shares were originally sold	100.00%
Percent annual return on shares at price equal to distributions paid	7.00%
Common stock	500				500
Convertible Stock [Member] | Advisor [Member]
Class of Stock [Line Items]
Common stock, shares outstanding (in shares)	50,000
Common stock, par value (in dollars per share)	$ 0.01
Record Date of June 30, 2014 [Member]
Class of Stock [Line Items]
Authorized stock distribution		0.00625
Authorized stock distribution, percent of common stock outstanding		0.625%
Record Date of September 30, 2014 [Member]
Class of Stock [Line Items]
Distributions declared		29,694
Net Cash Distributions		11,197
Authorized stock distribution							0.01
Authorized stock distribution, percent of common stock outstanding							1.00%
Common Stock, Dividends, Per Share, Cash Paid		$ 0.00068493
Record Date, Every Day in the Period from December 31, 2014, through January 29, 2015 [Member]
Class of Stock [Line Items]
Net Cash Distributions			259,379
Common Stock, Dividends, Per Share, Cash Paid			$ 0.00164384
Record Date of December 31, 2014 [Member]
Class of Stock [Line Items]
Authorized stock distribution				0.008333
Authorized stock distribution, percent of common stock outstanding				0.8333%
Retained Earnings [Member]
Class of Stock [Line Items]
Common stock issued through distribution reinvestment plan	(214,833)
Retained Earnings [Member] | Record Date of September 30, 2014 [Member]
Class of Stock [Line Items]
Common stock issued through distribution reinvestment plan		$ (18,497)

XML

Mortgage Notes Payable - Annual Principal Payments on Mortgage Notes Payable (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Debt Disclosure [Abstract]
2015	$ 0
2016	0
2017	590,509
2018	680,324
2019	730,909
Thereafter	36,538,258
Mortgage notes payable	$ 38,540,000	$ 0

XML

Equity - Schedule of Common Stock (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Class of Stock [Line Items]
Shares Issued	4,759,567	15,000
Gross Proceeds	$ 47,113,187
Shares Issued Through Distribution Reinvestment Plan, Gross Proceeds	46,748,354
Initial public offering [Member]
Class of Stock [Line Items]
Shares Issued	4,702,399
Gross Proceeds	46,748,354
Stock Distribution [Member]
Class of Stock [Line Items]
Shares Issued	19,554
Gross Proceeds	0
Distribution reinvestment plan [Member]
Class of Stock [Line Items]
Shares Issued	22,614
Shares Issued Through Distribution Reinvestment Plan, Gross Proceeds	214,833
Advisor's initial investment [Member]
Class of Stock [Line Items]
Shares Issued	15,000
Gross Proceeds	$ 150,000
Conversion of stock	5,000

XML

Identified Intangible Assets, Net (Details) (Acquired in-place leases [Member], USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Acquired in-place leases [Member]
Finite-Lived Intangible Assets [Line Items]
Acquired in-place leases, net	$ 1,500,000	$ 0
Acquired in-place leases, accumulated amortization	351,363	0
Weighted-average remaining life of rental leases	8 months
Expected amortization for the rental leases for the next year	1,200,000
Amortization	$ 351,363

XML

Related Party Transactions (Tables)

12 Months Ended

Dec. 31, 2014

Related Party Transactions [Abstract]

Fees Earned/Expenses Incurred and Amounts Payable to Related Parties

The amounts receivable/payable and the fees earned/expenses incurred by such related parties are summarized in the following tables:

	December 31, 2014		December 31, 2013
Due from related parties:
Resource Securities	$	3,944	$	—
RAI - self-insurance funds held in escrow	30,081		—
	$	34,025	$	—
Due to related parties:
Advisor
Asset management fees	$	28,456	—
Organization and offering costs	2,272,325		$	—
Operating expense reimbursements	1,145,784		—
Manager
Property management fees	6,391		—
Expense reimbursements	39,592		—
Resource Securities
Selling commissions and dealer-manager fees	358,715		—
	$	3,851,263	$	—
Graphic Images (1)	$	81,424	$	—

(1) Included in Accrued expenses on the consolidated balance sheets.

	Years Ended
	December 31,
	2014		2013
Fees earned / expenses incurred:
Advisor
Acquisition fees (1)	$	1,354,551	$	—
Asset management fees (2)	$	88,253	$	—
Debt financing fees (3)	$	192,700	$	—
Organization and offering costs (4)	$	3,006,819	$	—
Operating expense reimbursement (5)	$	1,115,426	$	—
Interest expense (6)	$	2,242	$	—
Manager
Property management fees (2)	$	39,242	$	—
Operating expense reimbursements (7)	$	54,123	$	—
Resource Securities
Selling commissions and dealer-manager fees (8)	$	4,399,256	$	—
Other
Graphic Images	$	364,972	$	—

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

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

(3)    Included in Deferred financing costs, net on the consolidated balance sheets.

(4)     Included in Deferred offering costs on the consolidated balance sheets.

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

(6)    Included in Interest expense on the consolidated statements of operations and comprehensive (loss) income.

(7)     Included in Due to Related Parties on the consolidated balance sheets.

(8)     Included in Stockholders' equity on the consolidated balance sheets.

XML

Fair Value Measures and Disclosures (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Additional Fair Value Elements [Abstract]
Carrying Amount - Mortgage notes payable	$ 38,540,000	$ 0
Fair Value - Mortgage notes payable	38,540,000
Fair Value, Measurements, Recurring [Member]
Assets, Fair Value Disclosure [Abstract]
Assets, Fair Value Disclosure	53,002	0
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Assets, Fair Value Disclosure [Abstract]
Assets, Fair Value Disclosure	0	0
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Assets, Fair Value Disclosure [Abstract]
Assets, Fair Value Disclosure	53,002	0
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Assets, Fair Value Disclosure [Abstract]
Assets, Fair Value Disclosure	0	0
Interest Rate Cap [Member] | Fair Value, Measurements, Recurring [Member]
Assets, Fair Value Disclosure [Abstract]
Derivative Asset	53,002	0
Interest Rate Cap [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Assets, Fair Value Disclosure [Abstract]
Derivative Asset	0	0
Interest Rate Cap [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Assets, Fair Value Disclosure [Abstract]
Derivative Asset	53,002	0
Interest Rate Cap [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Assets, Fair Value Disclosure [Abstract]
Derivative Asset	$ 0	$ 0

XML

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2014

Accounting Policies [Abstract]

Schedule of Wholly-Owned Subsidiaries

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 II, LLC	N/A	N/A	N/A
RRE Opportunity OP II, LP	N/A	N/A	N/A
RRE Bear Creek Holdings, LLC ("Bear Creek")	Bear Creek	152	Dallas, TX
RRE Oak Hill Holdings, LLC ("Oak Hill")	Oak Hill	360	Fort Worth, TX

N/A - Not Applicable

Real Estate Investments

The Company's estimated useful lives of its assets by class are as follows:

Buildings	27.5 years
Building improvements	3.0 to 27.5 years
Tenant improvements	Expected useful life
Lease intangibles	Remaining term of related lease

XML

Deferred Financing Costs (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Amortization of deferred financing costs	$ 9,581	$ 0
2015	58,112
2016	62,137
2017	61,607
2018	60,653
2019	59,547
Thereafter	279,727
Deferred financing costs, net	$ 581,783	$ 0

XML

Acquisitions - Summary of Acquisitions (Details) (USD $)	0 Months Ended
	Jun. 04, 2014	Dec. 19, 2014
Bear Creek Apartments [Member]
Business Acquisition [Line Items]
Purchase Price	$ 9,500,000
Land	1,888,982
Building and Improvements	7,060,815
Furniture, Fixture and Equipment	198,840
Intangible Assets	351,363
Other Liabilities	(84,732)
Fair value assigned	9,415,268
Oak Hill [Member]
Business Acquisition [Line Items]
Purchase Price		47,000,000
Land		4,834,386
Building and Improvements		40,485,971
Furniture, Fixture and Equipment		503,582
Intangible Assets		1,176,061
Other Liabilities		(59,977)
Fair value assigned		$ 46,940,023

XML

Nature of Business and Operations (Details) (USD $)	12 Months Ended	0 Months Ended
	Dec. 31, 2014	Dec. 20, 2013	Oct. 09, 2012	Jun. 02, 2014	Jun. 04, 2014	Oct. 21, 2014	Jan. 08, 2015	Dec. 31, 2013
Class of Stock [Line Items]
Common stock, shares authorized (in shares)	1,000,000,000							1,000,000,000
Issuance of stock	$ 46,748,354
Common stock, shares issued (in shares)	4,759,567							15,000
Advisor [Member]
Class of Stock [Line Items]
Issuance of stock	1,100,000		200,000
Issuance of stock (in shares)	117,778		20,000
Common stock exchanged (in shares)		5,000
Convertible Stock [Member]
Class of Stock [Line Items]
Common stock, shares authorized (in shares)	50,000							50,000
Issuance of stock	0
Issuance of stock (in shares)	0
Common stock, shares issued (in shares)	50,000							50,000
Convertible Stock [Member] | Advisor [Member]
Class of Stock [Line Items]
Issuance of stock (in shares)		50,000
Offering pursuant to Registration Statement
Class of Stock [Line Items]
Common stock, shares authorized (in shares)	110,000,000
Initial public offering [Member]
Class of Stock [Line Items]
Common stock, shares authorized (in shares)	100,000,000
Common stock, initial public offering price (in dollars per share)	$ 10
Minimum purchase to receive volume discount	1,000,000
Minimum offering amount				2,000,000.0
Common stock, shares issued (in shares)	4,702,399
Gross offering proceeds	47,100,000
Initial public offering [Member] | New York [Member]
Class of Stock [Line Items]
Minimum offering amount					2,500,000.0
Initial public offering [Member] | Ohio [Member]
Class of Stock [Line Items]
Minimum offering amount						20,000,000.0
Initial public offering [Member] | Pennsylvania [Member] | Subsequent Event [Member]
Class of Stock [Line Items]
Minimum offering amount							50,000,000.0
Distribution reinvestment plan [Member]
Class of Stock [Line Items]
Common stock, shares authorized (in shares)	10,000,000
Common stock, initial public offering price (in dollars per share)	$ 9.50
Issuance of stock	$ 214,833
Common stock, shares issued (in shares)	22,614

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Related Party Transactions - Narrative (Details) (USD $)	12 Months Ended		0 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Jun. 04, 2014
Related Party Transaction [Line Items]
Interest paid	$ 133,036	$ 0
Insurance pool, loss limit	2,500,000
Catastrophic insurance, losses in excess of insurance pool, limit	85,000,000
Advisor [Member]
Related Party Transaction [Line Items]
Term of Advisory Agreement	1 year
Acquisition fee			2.00%
Monthly asset management fee, percent	0.08333%
Disposition fee, percent	2.00%
Debt financing fee, percent	0.50%
Maximum reimbursement of organizational and offering costs, percent of offering proceeds	2.50%
Advisor [Member] | Bridge Loan [Member]
Related Party Transaction [Line Items]
Proceeds from related party bridge loan			1,300,000
Advisor [Member] | LIBOR [Member] | Bridge Loan [Member]
Related Party Transaction [Line Items]
Basis spread on variable interest rate			3.00%
Interest paid	$ 2,242
Manager [Member]
Related Party Transaction [Line Items]
Property management fee, percent	4.50%
Construction management fee, percent	5.00%
Debt servicing fee, percent	2.75%
Resource Securities [Member]
Related Party Transaction [Line Items]
Selling commission, percent	7.00%
Dealer-manager fee, percent	3.00%

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Subsequent Events (Details) (Subsequent Event [Member], USD $) In Thousands, except Share data, unless otherwise specified	0 Months Ended
	Mar. 24, 2015	Mar. 19, 2015	Jan. 26, 2015	Feb. 19, 2015
Subsequent Event [Line Items]
Common Stock, Dividends, Per Share, Declared	$ 0.000164384		$ 0.00164384
Number of units		216
Purchase Price		$ 32,500
Record Date of March 31, 2015 [Member]
Subsequent Event [Line Items]
Authorized stock distribution				0.005
Authorized stock distribution, percent of common stock outstanding				0.50%

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Mortgage Notes Payable - Summary of Mortgage Notes Payable (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Jun. 04, 2014	Dec. 19, 2014
Debt Instrument [Line Items]
Balance outstanding	$ 38,540,000	$ 0
Mortgages [Member] | Bear Creek [Member]
Debt Instrument [Line Items]
Balance outstanding	7,465,000		7,500,000
Interest Rate	2.54%
Average Monthly Debt Service	15,901
Interest Expense	110,302
Mortgages [Member] | Oak Hill Mortgage Loan [Member]
Debt Instrument [Line Items]
Balance outstanding	31,075,000			31,100,000
Interest Rate	2.07%
Average Monthly Debt Service	54,323
Interest Expense	$ 36,557

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Supplemental Cash Flow Information

12 Months Ended

Dec. 31, 2014

Supplemental Cash Flow Elements [Abstract]

Supplemental Cash Flow Information

NOTE 3 - SUPPLEMENTAL CASH FLOW INFORMATION

The following table presents supplemental cash flow information:

	Years Ended
	December 31,
	2014		2013
Non-cash financing and investing activities:
Increase in subscription receivables	$	3,819,991	$	—
Cash distributions on common stock declared but not yet paid	259,379		—
Stock issued from distribution reinvestment plan	195,542		—
Stock distributions issued	214,833		—
Deferred offering costs	1,803,098		—
Due to related parties	1,467,064		—
Cash paid during the period for:
Interest	$	133,036	$	—

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Schedule III Real Estate and Accumulated Depreciation - Schedule of Real Estate Owned (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	$ 0
Initial cost to Company	54,972,576
Cost capitalized subsequent to acquisition	(89,576)
Gross Amount at which carried at close of period	54,883,000	0	0
Accumulated Depreciation	(179,695)	0	0
Residential, Dallas, Texas [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	0
Initial cost to Company	9,148,637
Cost capitalized subsequent to acquisition	(94,229)
Gross Amount at which carried at close of period	9,054,408
Accumulated Depreciation	(179,695)
Residential, Fort Worth, Texas [Member]
SEC Schedule III, Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	0
Initial cost to Company	45,823,939
Cost capitalized subsequent to acquisition	4,653
Gross Amount at which carried at close of period	45,828,592
Accumulated Depreciation	$ 0

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Acquisitions - Bear Creek (Details) (USD $)	0 Months Ended
	Jun. 04, 2014
Advisor [Member]
Business Acquisition [Line Items]
Acquisition fee	2.00%
Bear Creek Apartments [Member]
Business Acquisition [Line Items]
Number of units	152
Purchase price, excluding closing costs	9,500,000
Rental property:
Land	1,888,982
Buildings	7,060,815
Personal property	198,840
Rental property	9,148,637
Acquired intangibles - in-place leases	351,363
Accrued real estate taxes	(69,085)
Prepaid rents	(163)
Security deposits	(15,484)
Fair value assigned	9,415,268
Bear Creek Apartments [Member] | Advisor [Member]
Business Acquisition [Line Items]
Acquisition fee, percent	264,239
Acquisition fee	2.00%

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Acquisitions (Tables)

12 Months Ended

Dec. 31, 2014

Business Combinations [Abstract]

Summary of Acquisitions and Assigned Fair Values

The table below summarizes these acquisitions and the respective fair values assigned:

Multifamily Community Name	City and State	Date of Acquisition	Purchase Price (1)		Land		Building and Improvements		Furniture, Fixture and Equipment		Intangible Assets		Other Liabilities			Fair Valued Assigned
Bear Creek	Dallas, TX	6/4/2014	$	9,500,000	$	1,888,982	$	7,060,815	$	198,840	$	351,363	$	(84,732	)	$	9,415,268
Oak Hill	Fort Worth, TX	12/19/2014	47,000,000		4,834,386		40,485,971		503,582		1,176,061		(59,977		)	46,940,023

(1) Purchase price excludes closing costs and acquisition expenses.

Fair Value of Net Assets Acquired

The following table reflects the fair value of the net assets acquired:

Rental property:
Land	$	1,888,982
Buildings	7,060,815
Personal property	198,840
	9,148,637
Acquired intangibles - in-place leases	351,363
Accrued real estate taxes	(69,085		)
Prepaid rents	(163		)
Security deposits	(15,484		)
Fair value assigned	$	9,415,268

On December 19, 2014, the Company acquired a 360-unit, multifamily apartment community located in Fort Worth, Texas known as Oak Hill, for $47.0 million, excluding closing costs. The Company paid an acquisition fee of $1.1 million, or 2% of the purchase price (including closing costs and any amounts reserved for capital expenditures), to the Advisor.

The following table reflects the fair value of the net assets acquired:

Rental property:
Land	$	4,834,386
Buildings	40,485,971
Personal property	503,582
	45,823,939
Acquired intangibles - in-place leases	1,176,061
Accrued real estate taxes	—
Prepaid rents	(13,162		)
Security deposits	(46,815		)
Fair value assigned	$	46,940,023

The table below summarizes the total revenues, net loss, and acquisition costs of the Company's 2014 acquisitions:

		Years Ended
		December 31,
Multifamily Community		2014			2013
Bear Creek
	Total Revenues	$	821,576		$	—
	Net Loss	(748,500		)	—
	Acquisition Costs	329,709			—
Oak Hill
	Total Revenues	$	170,097		$	—
	Net Loss	(82,184		)	—
	Acquisition Costs	1,259,235			—

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Rental Properties, Net (Tables)

12 Months Ended

Dec. 31, 2014

Real Estate [Abstract]

Schedule of Investments in Rental Properties

The Company’s investments in rental properties consisted of the following:

	December 31, 2014			December 31, 2013
Land	$	6,723,368		$	—
Building and improvements	47,546,786			—
Furniture, fixtures and equipment	612,846			—
	54,883,000			—
Less: accumulated depreciation	(179,695		)	—
	$	54,703,305		$	—

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Equity - Schedule of Dividend Distributions (Details) (USD $)	12 Months Ended	0 Months Ended
	Dec. 31, 2014	Jun. 05, 2014	Oct. 06, 2014	Oct. 30, 2014	Nov. 13, 2014
Class of Stock [Line Items]
Distributions invested in shares of Common Stock	$ 0
Net Cash Distributions	113,952
Total Aggregate Distributions	328,785
Record Date of June 5, 2014 [Member]
Class of Stock [Line Items]
Per Common Share		$ 0.00068493
Net Cash Distributions		5,560
Total Aggregate Distributions		10,625
Record Date of August 31, 2014 [Member]
Class of Stock [Line Items]
Per Common Share		$ 0.00068493
Net Cash Distributions		8,844
Total Aggregate Distributions		19,930
Record Date of September 30, 2014 [Member]
Class of Stock [Line Items]
Per Common Share		$ 0.00068493
Net Cash Distributions		11,197
Total Aggregate Distributions		29,694
Record Date of October 30, 2014 [Member]
Class of Stock [Line Items]
Per Common Share			$ 0.00082192
Net Cash Distributions			13,970
Total Aggregate Distributions			41,113
Record Date of November 26, 2014 [Member]
Class of Stock [Line Items]
Per Common Share				$ 0.00068493
Net Cash Distributions				15,113
Total Aggregate Distributions				46,326
Record Date of December 30, 2014 [Member]
Class of Stock [Line Items]
Per Common Share					$ 0.00164384
Net Cash Distributions					59,268
Total Aggregate Distributions					181,097
Retained Earnings [Member]
Class of Stock [Line Items]
Distributions invested in shares of Common Stock	214,833
Retained Earnings [Member] | Record Date of June 5, 2014 [Member]
Class of Stock [Line Items]
Distributions invested in shares of Common Stock		5,065
Retained Earnings [Member] | Record Date of August 31, 2014 [Member]
Class of Stock [Line Items]
Distributions invested in shares of Common Stock		11,086
Retained Earnings [Member] | Record Date of September 30, 2014 [Member]
Class of Stock [Line Items]
Distributions invested in shares of Common Stock		18,497
Retained Earnings [Member] | Record Date of October 30, 2014 [Member]
Class of Stock [Line Items]
Distributions invested in shares of Common Stock			27,143
Retained Earnings [Member] | Record Date of November 26, 2014 [Member]
Class of Stock [Line Items]
Distributions invested in shares of Common Stock				31,213
Retained Earnings [Member] | Record Date of December 30, 2014 [Member]
Class of Stock [Line Items]
Distributions invested in shares of Common Stock					$ 121,829

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Acquisitions - Oak Hill (Details) (USD $)	0 Months Ended
	Jun. 04, 2014	Dec. 19, 2014
Advisor [Member]
Business Acquisition [Line Items]
Acquisition fee	2.00%
Oak Hill [Member]
Business Acquisition [Line Items]
Number of units		360
Purchase price, excluding closing costs		$ 47,000,000
Rental property:
Land		4,834,386
Buildings		40,485,971
Personal property		503,582
Rental property		45,823,939
Acquired intangibles - in-place leases		1,176,061
Accrued real estate taxes		0
Prepaid rents		(13,162)
Security deposits		(46,815)
Fair value assigned		46,940,023
Oak Hill [Member] | Advisor [Member]
Business Acquisition [Line Items]
Acquisition fee, percent		$ 1,100,000
Acquisition fee		2.00%

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Mortgage Notes Payable (Tables)

12 Months Ended

Dec. 31, 2014

Debt Disclosure [Abstract]

Summary of Mortgage Notes Payable

The following is a summary of the Company's mortgage notes payable as of December 31, 2014:

	Balance Outstanding at		Maturity Date	Interest Rate		Average Monthly Debt Service		Interest Expense Incurred for the
Collateral	December 31, 2014			December 31, 2014				Year ended December 31, 2014
Bear Creek	$	7,465,000	7/1/2024	2.54	%	$	15,901	$	110,302
Oak Hill	31,075,000		1/1/2025	2.07	%	54,323		36,557
	$	38,540,000

Annual Principal Payments on Mortgage Notes Payable for Next Five Years

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

2015	$	—
2016	—
2017	590,509
2018	680,324
2019	730,909
Thereafter	36,538,258
	$	38,540,000

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Deferred Financing Costs (Tables)

12 Months Ended

Dec. 31, 2014

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of Deferred Financing Costs

Amortization of deferred financing costs for the next five years ending December 31, and thereafter, are as follows:

2015	$	58,112
2016	62,137
2017	61,607
2018	60,653
2019	59,547
Thereafter	279,727
	$	581,783

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2014

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

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

Subsidiary	Apartment Complex	Number of Units	Property Location
RRE Opportunity Holdings II, LLC	N/A	N/A	N/A
RRE Opportunity OP II, LP	N/A	N/A	N/A
RRE Bear Creek Holdings, LLC ("Bear Creek")	Bear Creek	152	Dallas, TX
RRE Oak Hill Holdings, LLC ("Oak Hill")	Oak Hill	360	Fort Worth, TX

N/A - Not Applicable

All intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of the consolidated financial statements in conformity with Generally Accepted Accounting Principles ("GAAP") requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

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, 2014, the Company had $15.8 million of deposits at various banks, $14.8 million of which was greater than the insurance limit of the Federal Deposit Insurance Corporation. No losses have been experienced on such deposits.

Real Estate Investments

The Company records acquired real estate at fair value. The Company considers the period of future benefit of an asset to determine its appropriate useful life. The Company's estimated useful lives of its assets by class are as follows:

Buildings	27.5 years
Building improvements	3.0 to 27.5 years
Tenant improvements	Expected useful life
Lease intangibles	Remaining term of related lease

Impairment of Long Lived Assets

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

If impairment exists, due to the inability to recover the carrying value of a property, an impairment loss 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 is the adjustment to fair value less estimated cost to dispose of the asset. These assessments have a direct impact on net income because recording an impairment loss results in an immediate negative adjustment to net income. There were no impairments as of December 31, 2014.

Allocation of Purchase Price of Acquired Assets

Upon the acquisition of real properties, the Company allocates the purchase price of properties to acquired tangible assets, consisting of land, buildings, fixtures and improvements, identified intangible lease assets, consisting of the value of above-market and below-market leases, as applicable, the value of in-place leases, the value of tenant relationships, and liabilities, based in each case on their fair values.

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.

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 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.

The Company also considers information obtained about each property as a result of its pre-acquisition due diligence, marketing and leasing activities in estimating the fair value of the tangible and intangible assets acquired. In estimating carrying costs, management includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods. 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 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 considered by management in allocating these values include the nature and extent of the Company’s existing business relationships with the 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.

The Company amortizes the value of in-place leases to expense over the remaining term of the respective leases. The value of customer relationship intangibles is amortized to expense over the initial term and any renewal periods in the respective leases, but in no event do 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.

The determination of the fair value of the assets and liabilities acquired requires the use of significant assumptions with regard to current market rental rates, discount rates and other variables. These estimates are subject to change until all information is finalized, which is generally within one year of the acquisition date.

Derivatives and Hedging Activities

Risk Management Objective of Using Derivatives

The Company is exposed to certain risks 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 of the Company’s mortgage loan, 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 serve 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 interest rate caps that were designated as cash flow hedges during 2014. 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 year ended December 31, 2014, such derivatives were used to hedge the variable cash flows, indexed to USD- London InterBank Offered Rate ("LIBOR"), associated with an existing variable-rate loan agreement. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. During the year ended December 31, 2014, the Company did not record any 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.

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 Company records property operating expense reimbursements due from tenants for common area maintenance, real estate taxes and other recoverable costs in the period the related expenses are incurred.

The specific timing of a sale is measured against various criteria related to the terms of the transaction and any continuing involvement associated with the property. If the criteria for profit recognition under the full-accrual method are not met, the Company defers the gain recognition and accounts for the continued operations of the property by applying the percentage-of-completion, reduced profit, deposit, installment or cost recovery methods, as appropriate, until the appropriate criteria are met.

The future minimum rental payments to be received from noncancelable operating leases are $3.7 million and $85,000 for the years ending December 31, 2015 and 2016, and none thereafter.

Tenant Receivables

The Company makes estimates of the collectability of its tenant receivables related to base rents, including straight-line rentals, expense reimbursements and other revenue or income. The Company specifically analyzes accounts receivable and historical bad debts, tenant creditworthiness, current economic trends when evaluating the adequacy of the allowance for doubtful accounts. In addition, with respect to tenants in bankruptcy, the Company makes 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.

Income Taxes

The Company intends to elect and qualify to be taxed as a REIT, commencing with its taxable year ended December 31, 2014. Accordingly, the Company will generally not be subject to corporate U.S. federal or state income tax to the extent that it makes qualifying distributions to its stockholders, and provided it satisfies on a continuing basis, through actual investment and operating results, the REIT requirements including certain asset, income, distribution and stock ownership tests. If the Company fails to qualify as a REIT, and does not qualify for certain statutory relief provisions, it will be 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 lost 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. Taxable income, generally, will differ from net income reported on the financial statements because the determination of taxable income is based on tax provisions and not financial accounting principles.

The Company may elect to treat certain of its subsidiaries as taxable REIT subsidiaries (“TRSs”). In general, the Company’s TRS may hold assets and engage in activities that it 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.

While a TRS may generate net income, a TRS can declare dividends to the Company which will be included in the Company’s taxable income and necessitate a distribution to its stockholders. Conversely, if the Company retains earnings at a TRS level, no distribution is required and the Company can increase book equity of the consolidated entity.

Earnings Per Share

Basic earnings per share is calculated on the basis of weighted-average number of common shares outstanding during the year. Basic earnings per share is computed by dividing income available to common shareholders by the weighted-average common shares outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted to common stock. Due to reported losses for the periods presented, the convertible shares (discussed in Note 12) are not included in the diluted earnings per share calculation. All common shares and per common share information in the financial statements have been adjusted retroactively for the effect of one 0.625% stock distribution, issued on July 14, 2014, one 1.00% stock distribution, issued October 15, 2014, and one 0.83333% stock distribution, issued on January 15, 2015.

Organization and Offering Costs

The Company incurs organizational, accounting, and offering costs in connection with its ongoing initial public offering. Organization and offering costs (other than selling commissions and dealer-manager fees) of the Company are initially paid by the Advisor on behalf of the Company. Offering costs are discussed in more detail below under the heading "Deferred Offering Costs." Organization costs are expensed as incurred and include all expenses to be incurred by the Company in connection with the formation of the Company, including but not limited to legal fees and other costs to incorporate the Company.

Pursuant to the Amended and Restated Advisory Agreement between the Company and the Advisor dated January 9, 2014 (the “Advisory Agreement”), the Company is obligated to reimburse the Advisor for organizational and offering costs it incurs on the Company's behalf, but only to the extent that such reimbursements will not cause organizational and offering expenses (other than selling commissions and the dealer manager fees) to exceed 2.5% of the gross offering proceeds raised in the offering, when recorded by the Company. As of December 31, 2014, a total of $2.3 million in reimbursable organizational and offering costs incurred on behalf of the Company by the Advisor has yet to be reimbursed by the Company. These costs are included in due to related parties on the consolidated balance sheet as of December 31, 2014.

Deferred Offering Costs

Through December 31, 2014, the Company has incurred $4.4 million for the payment of public offering costs consisting of accounting, advertising, allocated payroll, due diligence, marketing, legal and similar costs. As of December 31, 2014, the Advisor has advanced $3.0 million of these costs on behalf of the Company. A portion of these costs was charged to equity upon the sale of each share of common stock sold under the public offering. Similarly, a portion of the proceeds received from the sales of shares in the Company's public offering was paid to the Advisor to reimburse it for the amount incurred on behalf of the Company. Deferred offering costs represent the portion of the total costs incurred that have not been charged to equity to date. As of December 31, 2014, the Company has reimbursed $734,493 of deferred offering costs to the Advisor. Upon completion of the public offering, any excess deferred offering costs in excess of the limit on organization and offering costs discussed above, will be charged back to the Advisor.

New Accounting Standards

In June 2014, the Financial Accounting Standards Board ("FASB") issued authoritative guidance to change the criteria for reporting development stage entities. Under the new guidance, the requirement to present inception-to-date information on the statement of operations, cash flows and statement of equity has been eliminated. In addition, financial statements no longer need to be labeled as those of a development stage entity, disclosure of a description of the development stage activities in which the entity is engaged is no longer required, and disclosing in the first year the company is no longer a development stage entity and that in prior years it had been in the development stage is also no longer required. The Company's early adoption of this guidance, as of January 1, 2014, did not have a material impact on its consolidated financial position, results of operations or cash flows.

Accounting Standards Issued But Not Yet Effective

In May 2014, FASB issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers” ("ASU No. 2014-09"), 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, 2017, including interim periods in 2017, and allows for both retrospective and prospective methods of adoption. The Company is in the process of determining the method of adoption and assessing the impact of ASU No. 2014-09 on the Company's consolidated financial position, results of operations and cash flows.

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" (“ASU No. 2015-01”). The amendments in ASU No. 2015-01 eliminate from GAAP the concept of extraordinary items. Although the amendment will eliminate the requirements for reporting entities to consider whether an underlying event or transaction is extraordinary, the presentation and disclosure guidance for items that are unusual in nature or occur infrequently will be retained and will be expanded to include items that are both unusual in nature and infrequently occurring. ASU No. 2015-01 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The Company does not expect the adoption of ASU No. 2015-01 to have a significant impact on its financial statements.

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Accumulated Other Comprehensive Loss (Tables)

12 Months Ended

Dec. 31, 2014

Equity [Abstract]

Schedule of Accumulated Other Comprehensive Loss

The following table presents the changes in accumulated other comprehensive loss for the year ended December 31, 2014:

	Net unrealized loss on derivatives
January 1, 2014	$	—
Unrealized loss on designated hedge	(34,468		)
December 31, 2014	$	(34,468	)

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Restricted Cash (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash	$ 725,305	$ 0
Real estate taxes [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash	128,871	0
Insurance [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash	157,600	0
Capital improvements [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash	$ 438,834	$ 0

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Related Party Transactions - Fees Earned/Expenses Incurred and Amounts Payable to Related Parties (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Related Party Transaction [Line Items]
Due from related party	$ 34,025	$ 0
Due to related parties	3,851,263	0
Graphic Images [Member]
Related Party Transaction [Line Items]
Due to related parties	81,424	0
Resource Securities [Member] | Selling commissions and dealer-manager fees [Member]
Related Party Transaction [Line Items]
Due to related parties	358,715	0
Fees earned / expenses incurred	4,399,256	0
RAI [Member] | Resource Securities [Member]
Related Party Transaction [Line Items]
Due from related party	3,944	0
RAI [Member] | Insurance funds held in escrow [Member]
Related Party Transaction [Line Items]
Due from related party	30,081	0
Advisor [Member] | Acquisition fees [Member]
Related Party Transaction [Line Items]
Fees earned / expenses incurred	1,354,551	0
Advisor [Member] | Asset management fees [Member]
Related Party Transaction [Line Items]
Due to related parties	28,456	0
Fees earned / expenses incurred	88,253	0
Advisor [Member] | Debt financing fees [Member]
Related Party Transaction [Line Items]
Fees earned / expenses incurred	192,700	0
Advisor [Member] | Organization and offering costs [Member]
Related Party Transaction [Line Items]
Due to related parties	2,272,325	0
Fees earned / expenses incurred	3,006,819	0
Advisor [Member] | Overhead allocation [Member]
Related Party Transaction [Line Items]
Fees earned / expenses incurred	1,115,426	0
Advisor [Member] | Operating expense reimbursements [Member]
Related Party Transaction [Line Items]
Due to related parties	1,145,784	0
Advisor [Member] | Interest expense [Member]
Related Party Transaction [Line Items]
Fees earned / expenses incurred	2,242	0
Manager [Member] | Property management fees [Member]
Related Party Transaction [Line Items]
Due to related parties	6,391	0
Fees earned / expenses incurred	39,242	0
Manager [Member] | Operating expense reimbursements [Member]
Related Party Transaction [Line Items]
Due to related parties	39,592	0
Fees earned / expenses incurred	54,123	0
Other [Member] | Graphic Images [Member]
Related Party Transaction [Line Items]
Fees earned / expenses incurred	$ 364,972	$ 0

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Consolidated Balance Sheets (USD $)	Dec. 31, 2014	Dec. 31, 2013
Investments:
Rental properties, net	$ 54,703,305	$ 0
Identified intangible assets, net	1,176,061	0
Investments	55,879,366	0
Cash	15,780,579	200,644
Restricted cash	725,305	0
Tenant receivables	5,746	0
Due from related parties	34,025	0
Subscriptions receivable	3,819,991	0
Prepaid expenses and other assets	774,338	0
Deferred offering costs	3,618,954	0
Deferred financing costs, net	581,783	0
Total assets	81,220,087	200,644
Liabilities:
Mortgage notes payable	38,540,000	0
Accounts payable and accrued expenses	857,897	0
Due to related parties	3,851,263	0
Tenant prepayments	30,704	0
Security deposits	68,696	0
Distribution payable	259,379	0
Total liabilities	43,607,939	0
Stockholders’ equity:
Preferred stock (par value $.01, 10,000,000 shares authorized, none issued and outstanding)	0	0
Common stock	47,596	150
Additional paid-in capital	42,148,473	199,350
Accumulated other comprehensive loss	(34,468)	0
Accumulated (deficit) earnings	(4,549,953)	644
Total stockholders’ equity	37,612,148	200,644
Total liabilities and stockholders’ equity	81,220,087	200,644
Convertible Stock [Member]
Stockholders’ equity:
Common stock	500	500
Total stockholders’ equity	$ 500	$ 500

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Acquisitions - Summary of Revenues, Net Losses and Acquisition Costs (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Business Acquisition [Line Items]
Total Revenues	$ 999,794	$ 451
Net Loss	(3,766,892)	451
Acquisition costs	1,588,944	0
Bear Creek Apartments [Member]
Business Acquisition [Line Items]
Total Revenues	821,576	0
Net Loss	(748,500)	0
Acquisition costs	329,709	0
Oak Hill [Member]
Business Acquisition [Line Items]
Total Revenues	170,097	0
Net Loss	(82,184)	0
Acquisition costs	$ 1,259,235	$ 0

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Consolidated Statements of Cash Flows (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Cash flows from operating activities:
Net (loss) income	$ (3,766,892)	$ 451
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Loss on disposal of assets	198,840	0
Depreciation and amortization	531,058	0
Amortization of deferred financing costs	9,581	0
Changes in operating assets and liabilities:
Restricted cash	(725,305)	0
Tenant receivables, net	(5,746)	0
Due from related party	(34,025)	0
Prepaid expenses and other assets	(642,278)	0
Due to related parties	2,384,199	0
Accounts payable and accrued expenses	452,781	0
Tenant prepayments	17,379	0
Security deposits	6,397	0
Net cash (used in) provided by operating activities	(1,574,011)	451
Cash flows from investing activities
Property acquisitions	(56,434,350)	0
Capital expenditures	(109,264)	0
Net cash used in investing activities	(56,543,614)	0
Cash flows from financing activities:
Proceeds from issuance of common stock	42,928,363	0
Payment of deferred financing costs	(591,364)	0
Deferred offering costs	(1,815,856)	0
Increase in borrowings	39,862,000	0
Repayments on borrowings	(1,322,000)	0
Purchase of interest rate caps	(87,470)	0
Distributions paid on common stock	(113,952)	0
Syndication costs	(5,162,161)	0
Net cash provided by financing activities	73,697,560	0
Net increase in cash	15,579,935	451
Cash at beginning of period	200,644	200,193
Cash at end of period	$ 15,780,579	$ 200,644

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Derivatives and Hedging Activities - Fair Value of Derivative Instruments and Balance Sheet Classification (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2015
Derivatives, Fair Value [Line Items]
Interest expense	$ 158,842	$ 0
Reclassification out of Accumulated Other Comprehensive Income [Member] | Scenario, Forecast [Member]
Derivatives, Fair Value [Line Items]
Interest expense			552
Interest Rate Cap [Member]
Derivatives, Fair Value [Line Items]
Asset Derivatives - Interest rate cap, Fair Value	53,002	0
Liabilities Derivatives - Interest rate cap, Fair Value	$ 0	$ 0

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Fair Value Measures and Disclosures (Tables)

12 Months Ended

Dec. 31, 2014

Fair Value Disclosures [Abstract]

Schedule of assets measured at fair value on a recurring basis

The following table presents information about the Company's assets measured at fair value on a recurring basis and

indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value as follows:

	Level 1		Level 2		Level 3		Total
December 31, 2014
Assets:
Interest rate caps	$	—	$	53,002	$	—	$	53,002
	$	—	$	53,002	$	—	$	53,002
	Level 1		Level 2		Level 3		Total
December 31, 2013
Assets:
Interest rate caps	$	—	$	—	$	—	$	—
	$	—	$	—	$	—	$	—

Schedule of carrying and fair values of assets and liabilities

The carrying amount and fair value of the Company’s mortgage notes payable are as follows:

	December 31, 2014
	Carrying Amount		Fair Value
Mortgage notes payable	$	38,540,000	$	38,540,000

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Subsequent Events

12 Months Ended

Dec. 31, 2014

Subsequent Events [Abstract]

Subsequent Events

SUBSEQUENT EVENTS

On January 26, 2015, the Company's Board of Directors authorized cash distributions to the stockholders of record at the close of business each day in the period commencing January 30, 2015 through March 30, 2015 equal to a daily amount of $0.00164384 per share of common stock, payable on February 27, 2015 and March 31, 2015.

On February 19, 2015, the Company's Board of Directors authorized a stock distribution of 0.005 shares of the Company's common stock, or 0.5% of each outstanding share of common stock, to the stockholders of record at the close of business on March 31, 2015. Such distribution is to be issued on April 15, 2015.

On March 30, 2015, the Company, through its operating partnership, purchased a 216 unit multifamily community located in Atlanta, Georgia from an unaffiliated seller for $32.5 million.

On March 24, 2015, the Company's Board of Directors authorized a cash distribution to the stockholders of record at the close of business each day in the period commencing March 31, 2015 through and including June 29, 2015 equal to a daily amount of $0.000164384 per share of common stock, payable on April 30, 2015, May 29, 2015 and June 30, 2015.

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

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Derivatives and Hedging Activities (Tables)

12 Months Ended

Dec. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of interest rate derivatives

As of December 31, 2014, the Company had the following outstanding interest rate derivatives that were designated as a cash flow hedges of interest rate risk:

Interest Rate Derivative	Number of Instruments	Notional Amount		Maturity Dates
Interest rate cap	2	$	38,540,000	November 1, 2018 and January 1, 2018

Schedule of fair value of derivative financial instruments

The table below presents the fair value of the Company’s derivative financial instruments, which is included in prepaid expenses and other assets on the consolidated balance sheet as of December 31, 2014:

Asset Derivatives						Liabilities Derivatives
December 31, 2014			December 31, 2013			December 31, 2014			December 31, 2013
Balance Sheet	Fair Value		Balance Sheet	Fair Value		Balance Sheet	Fair Value		Balance Sheet	Fair Value
Interest rate cap	$	53,002	Interest rate cap	$	—	NA	$	—	NA	$	—

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2014

Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation

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

Subsidiary	Apartment Complex	Number of Units	Property Location
RRE Opportunity Holdings II, LLC	N/A	N/A	N/A
RRE Opportunity OP II, LP	N/A	N/A	N/A
RRE Bear Creek Holdings, LLC ("Bear Creek")	Bear Creek	152	Dallas, TX
RRE Oak Hill Holdings, LLC ("Oak Hill")	Oak Hill	360	Fort Worth, TX

N/A - Not Applicable

All intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

Use of Estimates

The preparation of the consolidated financial statements in conformity with Generally Accepted Accounting Principles ("GAAP") requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

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, 2014, the Company had $15.8 million of deposits at various banks, $14.8 million of which was greater than the insurance limit of the Federal Deposit Insurance Corporation. No losses have been experienced on such deposits.

Real Estate Investments

Real Estate Investments

The Company records acquired real estate at fair value. The Company considers the period of future benefit of an asset to determine its appropriate useful life. The Company's estimated useful lives of its assets by class are as follows:

Buildings	27.5 years
Building improvements	3.0 to 27.5 years
Tenant improvements	Expected useful life
Lease intangibles	Remaining term of related lease

Impairment of Long Lived Assets

Impairment of Long Lived Assets

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

If impairment exists, due to the inability to recover the carrying value of a property, an impairment loss 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 is the adjustment to fair value less estimated cost to dispose of the asset. These assessments have a direct impact on net income because recording an impairment loss results in an immediate negative adjustment to net income. There were no impairments as of December 31, 2014.

Allocation of Purchase Price of Acquired Assets

Allocation of Purchase Price of Acquired Assets

Upon the acquisition of real properties, the Company allocates the purchase price of properties to acquired tangible assets, consisting of land, buildings, fixtures and improvements, identified intangible lease assets, consisting of the value of above-market and below-market leases, as applicable, the value of in-place leases, the value of tenant relationships, and liabilities, based in each case on their fair values.

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.

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 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.

The Company also considers information obtained about each property as a result of its pre-acquisition due diligence, marketing and leasing activities in estimating the fair value of the tangible and intangible assets acquired. In estimating carrying costs, management includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods. 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 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 considered by management in allocating these values include the nature and extent of the Company’s existing business relationships with the 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.

The Company amortizes the value of in-place leases to expense over the remaining term of the respective leases. The value of customer relationship intangibles is amortized to expense over the initial term and any renewal periods in the respective leases, but in no event do 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.

The determination of the fair value of the assets and liabilities acquired requires the use of significant assumptions with regard to current market rental rates, discount rates and other variables. These estimates are subject to change until all information is finalized, which is generally within one year of the acquisition date.

Derivatives and Hedging Activities

Derivatives and Hedging Activities

Risk Management Objective of Using Derivatives

The Company is exposed to certain risks 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 of the Company’s mortgage loan, 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 serve 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 interest rate caps that were designated as cash flow hedges during 2014. 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 year ended December 31, 2014, such derivatives were used to hedge the variable cash flows, indexed to USD- London InterBank Offered Rate ("LIBOR"), associated with an existing variable-rate loan agreement. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. During the year ended December 31, 2014, the Company did not record any 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.

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 Company records property operating expense reimbursements due from tenants for common area maintenance, real estate taxes and other recoverable costs in the period the related expenses are incurred.

The specific timing of a sale is measured against various criteria related to the terms of the transaction and any continuing involvement associated with the property. If the criteria for profit recognition under the full-accrual method are not met, the Company defers the gain recognition and accounts for the continued operations of the property by applying the percentage-of-completion, reduced profit, deposit, installment or cost recovery methods, as appropriate, until the appropriate criteria are met.

Tenant Receivables

Tenant Receivables

The Company makes estimates of the collectability of its tenant receivables related to base rents, including straight-line rentals, expense reimbursements and other revenue or income. The Company specifically analyzes accounts receivable and historical bad debts, tenant creditworthiness, current economic trends when evaluating the adequacy of the allowance for doubtful accounts. In addition, with respect to tenants in bankruptcy, the Company makes 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.

Income Taxes

Income Taxes

The Company intends to elect and qualify to be taxed as a REIT, commencing with its taxable year ended December 31, 2014. Accordingly, the Company will generally not be subject to corporate U.S. federal or state income tax to the extent that it makes qualifying distributions to its stockholders, and provided it satisfies on a continuing basis, through actual investment and operating results, the REIT requirements including certain asset, income, distribution and stock ownership tests. If the Company fails to qualify as a REIT, and does not qualify for certain statutory relief provisions, it will be 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 lost 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. Taxable income, generally, will differ from net income reported on the financial statements because the determination of taxable income is based on tax provisions and not financial accounting principles.

The Company may elect to treat certain of its subsidiaries as taxable REIT subsidiaries (“TRSs”). In general, the Company’s TRS may hold assets and engage in activities that it 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.

While a TRS may generate net income, a TRS can declare dividends to the Company which will be included in the Company’s taxable income and necessitate a distribution to its stockholders. Conversely, if the Company retains earnings at a TRS level, no distribution is required and the Company can increase book equity of the consolidated entity.

Earnings Per Share

Earnings Per Share

Basic earnings per share is calculated on the basis of weighted-average number of common shares outstanding during the year. Basic earnings per share is computed by dividing income available to common shareholders by the weighted-average common shares outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted to common stock. Due to reported losses for the periods presented, the convertible shares (discussed in Note 12) are not included in the diluted earnings per share calculation.

Organization and Offering Costs

Organization and Offering Costs

The Company incurs organizational, accounting, and offering costs in connection with its ongoing initial public offering. Organization and offering costs (other than selling commissions and dealer-manager fees) of the Company are initially paid by the Advisor on behalf of the Company. Offering costs are discussed in more detail below under the heading "Deferred Offering Costs." Organization costs are expensed as incurred and include all expenses to be incurred by the Company in connection with the formation of the Company, including but not limited to legal fees and other costs to incorporate the Company.

Pursuant to the Amended and Restated Advisory Agreement between the Company and the Advisor dated January 9, 2014 (the “Advisory Agreement”), the Company is obligated to reimburse the Advisor for organizational and offering costs it incurs on the Company's behalf, but only to the extent that such reimbursements will not cause organizational and offering expenses (other than selling commissions and the dealer manager fees) to exceed 2.5% of the gross offering proceeds raised in the offering, when recorded by the Company.

Deferred Offering Costs

Deferred Offering Costs

Through December 31, 2014, the Company has incurred $4.4 million for the payment of public offering costs consisting of accounting, advertising, allocated payroll, due diligence, marketing, legal and similar costs. As of December 31, 2014, the Advisor has advanced $3.0 million of these costs on behalf of the Company. A portion of these costs was charged to equity upon the sale of each share of common stock sold under the public offering. Similarly, a portion of the proceeds received from the sales of shares in the Company's public offering was paid to the Advisor to reimburse it for the amount incurred on behalf of the Company. Deferred offering costs represent the portion of the total costs incurred that have not been charged to equity to date. As of December 31, 2014, the Company has reimbursed $734,493 of deferred offering costs to the Advisor. Upon completion of the public offering, any excess deferred offering costs in excess of the limit on organization and offering costs discussed above, will be charged back to the Advisor.

New Accounting Standards

New Accounting Standards

In June 2014, the Financial Accounting Standards Board ("FASB") issued authoritative guidance to change the criteria for reporting development stage entities. Under the new guidance, the requirement to present inception-to-date information on the statement of operations, cash flows and statement of equity has been eliminated. In addition, financial statements no longer need to be labeled as those of a development stage entity, disclosure of a description of the development stage activities in which the entity is engaged is no longer required, and disclosing in the first year the company is no longer a development stage entity and that in prior years it had been in the development stage is also no longer required. The Company's early adoption of this guidance, as of January 1, 2014, did not have a material impact on its consolidated financial position, results of operations or cash flows.

Accounting Standards Issued But Not Yet Effective

In May 2014, FASB issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers” ("ASU No. 2014-09"), 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, 2017, including interim periods in 2017, and allows for both retrospective and prospective methods of adoption. The Company is in the process of determining the method of adoption and assessing the impact of ASU No. 2014-09 on the Company's consolidated financial position, results of operations and cash flows.

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" (“ASU No. 2015-01”). The amendments in ASU No. 2015-01 eliminate from GAAP the concept of extraordinary items. Although the amendment will eliminate the requirements for reporting entities to consider whether an underlying event or transaction is extraordinary, the presentation and disclosure guidance for items that are unusual in nature or occur infrequently will be retained and will be expanded to include items that are both unusual in nature and infrequently occurring. ASU No. 2015-01 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The Company does not expect the adoption of ASU No. 2015-01 to have a significant impact on its financial statements.

Fair Value Measures

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 values of cash, tenant receivables and accounts payable, approximate their carrying values 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.

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

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Nature of Business and Operations

12 Months Ended

Dec. 31, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Business and Operations

NOTE 1 - NATURE OF BUSINESS AND OPERATIONS

Resource Real Estate Opportunity REIT II, Inc. (the “Company”) was organized in Maryland on September 28, 2012. The Company is offering up to 100,000,000 shares of common stock in its primary initial public offering for $10 per share, with volume discounts available to investors who purchase $1.0 million or more of shares through the same participating broker-dealer. Discounts are also available for other categories of investors. The Company is also offering up to 10,000,000 shares pursuant to the Company’s distribution reinvestment plan at a purchase price initially equal to $9.50 per share. The Company has adopted a fiscal year ending December 31. On February 6, 2014, the Securities and Exchange Commission (the “SEC”) declared effective the Company's Registration Statement on Form S-11, as amended (Commission File No. 333-184476) (the “Registration Statement”), relating to the offering of up to 110,000,000 shares of the Company’s common stock, including shares offered pursuant to the Company's distribution reinvestment plan.

Resource Real Estate Opportunity Advisor II, LLC (the "Advisor”) is a wholly owned subsidiary of Resource Real Estate, Inc. (the "Sponsor") and an indirect wholly owned subsidiary of Resource America, Inc. (“RAI”), a publicly traded company (NASDAQ: REXI) operating in the real estate, financial fund management and commercial finance sectors. The Advisor acts as the Company's external advisor and manages the Company's day-to-day operations and its portfolio of real estate investments and provides asset-management, marketing, investor relations and other administrative services on the Company's behalf, all subject to the supervision of the Company's Board of Directors. On October 9, 2012, the Advisor contributed $200,000 to the Company in exchange for 20,000 shares of common stock. On December 20, 2013, the Advisor received 50,000 shares of convertible stock in exchange for 5,000 shares of the Company’s common stock. The Advisor purchased an additional 117,778 shares of common stock in 2014 for $1.1 million.

On June 2, 2014, the Company satisfied the $2.0 million minimum offering amount for its initial public offering, broke escrow and issued shares of common stock in the offering. The Company subsequently raised the minimum New York offering amount of $2.5 million on June 4, 2014. On October 21, 2014, the Company raised the minimum Ohio offering amount of $20.0 million; and on January 8, 2015, the Company raised the minimum Pennsylvania offering amount of $50.0 million. As of December 31, 2014, a total of 4,759,567 shares, including shares purchased by the Advisor and shares issued through the distribution reinvestment plan, have been issued in connection with the Company's public offering resulting in gross offering proceeds of $47.1 million. As of December 31, 2014, the Company had issued 22,614 shares for $214,833 pursuant to its distribution reinvestment plan.

The Company’s objective is to take advantage of the Sponsor's dedicated multifamily investing and lending platforms to invest in multifamily assets across the entire spectrum of investments in order to provide stockholders with growing cash flow and increasing asset values. The Company’s targeted portfolio will consist, at the time of acquisition, of commercial real estate assets, principally (i) underperforming multifamily rental properties which the Company will renovate and stabilize in order to increase rents, (ii) distressed real estate owned by financial institutions, usually as a result of foreclosure, and non-performing or distressed loans, including first- and second-priority mortgage loans and other loans which the Company will resolve, and (iii) performing loans, including first- and second-priority mortgage loans and other loans the Company originates or purchases either directly or with a co-investor or joint venture partner.

The Company intends to elect and qualify to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes under the provisions of the Internal Revenue Code of 1986, as amended, commencing with its taxable year ended December 31, 2014. As such, to maintain its REIT qualification for U.S. federal income tax purposes, the Company is generally required to distribute at least 90% of its net income (excluding net capital gains) to its stockholders as well as comply with certain other requirements. Accordingly, the Company generally will not be subject to U.S. federal income taxes to the extent that it annually distributes at least 90% of its REIT taxable income to its stockholders. The Company also intends to operate its business in a manner that will permit it to maintain its exemption from registration under the Investment Company Act of 1940, as amended.

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Consolidated Balance Sheets (Parentheticals) (USD $)	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	1,000,000,000	1,000,000,000
Common stock, shares issued (in shares)	4,759,567	15,000
Common stock, shares outstanding (in shares)	4,759,567	15,000
Convertible Stock [Member]
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	50,000	50,000
Common stock, shares issued (in shares)	50,000	50,000
Common stock, shares outstanding (in shares)	50,000	50,000	0

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Related Party Transactions

12 Months Ended

Dec. 31, 2014

Related Party Transactions [Abstract]

Related Party Transactions

RELATED PARTY TRANSACTIONS

Pursuant to the terms of the Advisory Agreement, the Advisor provides the Company with its management team, including its officers, along with appropriate support personnel. The Advisor will be reimbursed for the Company’s allocable share of costs for Advisor personnel, including allocable personnel salaries and benefits. Each of the Company’s officers is an employee of the Sponsor or one of its affiliates. The Company does not have any employees. The Advisor is not obligated to dedicate any specific portion of its time or the time of its personnel to the Company’s business. The Advisor is at all times subject to the supervision and oversight of the Company’s Board of Directors and has only such functions and authority as the Company delegates to it.

During the course of the offering, the Advisor will provide offering-related services to the Company and will advance funds to the Company for both operating costs and organization and offering costs. These amounts will be reimbursed to the Advisor from the proceeds from the offering, although there can be no assurance that the Company’s plans to raise capital will be successful. As of December 31, 2014, the Advisor has incurred costs on a cumulative basis on behalf of the Company of approximately $3.0 million.

Relationship with the Advisor

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. Under the Advisory Agreement, the Advisor receives fees and is reimbursed for its expenses as set forth below:

Acquisition fees. The Advisor earns 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 Advisor earns a monthly asset management fee equal to one-twelfth of 1.0% of the cost 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, 2.0% of the contract sales price. No properties were sold during the year ended December 31, 2014 and, therefore, no disposition fees were earned.

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 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.

On June 4, 2014, the Advisor provided a $1.3 million bridge loan (the “Bridge Loan”) to the Company. The Company used the proceeds of the Bridge Loan to partially finance the acquisition of Bear Creek. The Bridge Loan, which was scheduled to mature on December 4, 2014, incurred interest at an annual rate of LIBOR plus 3.0%. The Company repaid the Bridge Loan in full on June 30, 2014 and paid $2,242 in interest during the year ended December 31, 2014.    

Relationship with RAI

The receivable from related party includes escrow funds held by RAI for self insurance. The Company's properties participate in an insurance pool with other properties directly and indirectly managed by RAI. RAI holds the escrow funds related to the insurance pool on its books. The insurance pool covers losses up to $2.5 million. Catastrophic insurance would cover losses in excess of the insurance pool up to $85 million. Therefore, unforeseen or catastrophic losses in excess of the Company's insured limits could have a material adverse effect on the Company's financial condition and operating results.

Relationship with Resource Real Estate Opportunity Manager II

Resource Real Estate Opportunity Manager II, LLC (the “Manager”), an affiliate of the Advisor, manages real estate properties and real estate-related debt investments and coordinates the leasing of, and manages construction activities related to the Company’s real estate property pursuant to the terms of the management agreement with the Manager.

Property management fees. The Manager earns a property management fee equal to 4.5% of actual gross cash receipts from the operations of real property investments.

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. No construction management fees were earned during the year endedDecember 31, 2014.

Debt servicing fees. The Manager earns a debt servicing fee of 2.75% on payments received from loans held by the Company for investment. No debt servicing fees were earned during the year endedDecember 31, 2014.

Expense reimbursement. During the ordinary course of business, the Manager or other affiliates of RAI may pay certain shared operating expenses on behalf of the Company.

Relationship with Resource Securities

Resource Securities, Inc. (“Resource Securities”), an affiliate of the Advisor, serves as the Company’s dealer-manager and is responsible for marketing the Company’s shares during the primary portion of its public offering. Pursuant to the terms of the dealer-manager agreement with Resource Securities, the Company pays Resource Securities a selling commission of up to 7% of gross primary offering proceeds and a dealer-manager fee of up to 3% of gross primary offering proceeds. Resource Securities reallows all selling commissions earned and a portion of the dealer-manager fee as a marketing fee to participating broker-dealers. No selling commissions or dealer-manager fees are earned by Resource Securities in connection with sales under the distribution reinvestment plan. Additionally, the Company may reimburse Resource Securities for bona fide due diligence expenses.

Relationship with Other Related Parties

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

The amounts receivable/payable and the fees earned/expenses incurred by such related parties are summarized in the following tables:

	December 31, 2014		December 31, 2013
Due from related parties:
Resource Securities	$	3,944	$	—
RAI - self-insurance funds held in escrow	30,081		—
	$	34,025	$	—
Due to related parties:
Advisor
Asset management fees	$	28,456	—
Organization and offering costs	2,272,325		$	—
Operating expense reimbursements	1,145,784		—
Manager
Property management fees	6,391		—
Expense reimbursements	39,592		—
Resource Securities
Selling commissions and dealer-manager fees	358,715		—
	$	3,851,263	$	—
Graphic Images (1)	$	81,424	$	—

(1) Included in Accrued expenses on the consolidated balance sheets.

	Years Ended
	December 31,
	2014		2013
Fees earned / expenses incurred:
Advisor
Acquisition fees (1)	$	1,354,551	$	—
Asset management fees (2)	$	88,253	$	—
Debt financing fees (3)	$	192,700	$	—
Organization and offering costs (4)	$	3,006,819	$	—
Operating expense reimbursement (5)	$	1,115,426	$	—
Interest expense (6)	$	2,242	$	—
Manager
Property management fees (2)	$	39,242	$	—
Operating expense reimbursements (7)	$	54,123	$	—
Resource Securities
Selling commissions and dealer-manager fees (8)	$	4,399,256	$	—
Other
Graphic Images	$	364,972	$	—

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

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

(3)    Included in Deferred financing costs, net on the consolidated balance sheets.

(4)     Included in Deferred offering costs on the consolidated balance sheets.

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

(6)    Included in Interest expense on the consolidated statements of operations and comprehensive (loss) income.

(7)     Included in Due to Related Parties on the consolidated balance sheets.

(8)     Included in Stockholders' equity on the consolidated balance sheets.

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Document and Entity Information (USD $)	12 Months Ended
	Dec. 31, 2014	Mar. 23, 2015	Jun. 30, 2014
Document and Entity Information [Abstract]
Entity Registrant Name	Resource Real Estate Opportunity REIT II, Inc.
Entity Central Index Key	0001559484
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	Smaller Reporting Company
Document Type	10-K
Document Period End Date	Dec. 31, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	FY
Amendment Flag	false
Entity Common Stock, Shares Outstanding		12,653,262
Entity Public Float			$ 0

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Equity

12 Months Ended

Dec. 31, 2014

Equity [Abstract]

Equity

EQUITY

Preferred Stock

The Company’s charter authorizes the Company to issue 10,000,000 shares of its $0.01 par value preferred stock. As of December 31, 2014, no shares of preferred stock were issued or outstanding.

Convertible Stock

As of December 31, 2014, the Company had 50,000 shares of $0.01 par value convertible stock outstanding, which are owned by the Advisor. 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 7% 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 or after the 31st trading day following the 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 7% return threshold.

Common Stock

As of December 31, 2014, the Company had an aggregate of 4,759,567 shares of $0.01 par value common stock outstanding, including the Advisor's additional purchase of 117,778 shares of common stock for $1.1 million, as follows:

	Shares Issued	Gross Proceeds
Initial public offering	4,702,399	$	46,748,354
Shares issued through stock distributions	19,554	—
Shares issued through distribution reinvestment plan	22,614	214,833
Advisor's initial investment, net of 5,000 share conversion	15,000	150,000
	4,759,567	$	47,113,187

Distributions

For the year endedDecember 31, 2014, the Company paid aggregate distributions of $328,785, including $113,952 of distributions paid in cash and $214,833 of distributions reinvested in shares of common stock through the Company's distribution reinvestment plan, as follows:

Authorization Date	Per Common Share		Record Date	Distribution Date	Distributions invested in shares of Common Stock		Net Cash Distributions		Total Aggregate Distributions
June 5, 2014	$	0.00068493	July 31, 2014	August 1, 2014	$	5,065	$	5,560	$	10,625
June 5, 2014	0.00068493		August 31, 2014	September 2, 2014	11,086		8,844		19,930
June 5, 2014	0.00068493		September 30, 2014	October 1, 2014	18,497		11,197		29,694
October 6, 2014	0.00082192		October 30, 2014	October 31, 2014	27,143		13,970		41,113
October 30, 2014	0.00068493		November 26, 2014	November 28, 2014	31,213		15,113		46,326
November 13, 2014	0.00164384		December 30, 2014	December 31, 2014	121,829		59,268		181,097
					$	214,833	$	113,952	$	328,785

On November 13, 2014, the Company's Board of Directors authorized cash distributions of $259,379 ($0.00164384 per common share) to stockholders of record for every day in the period from December 31, 2014 through January 29, 2015, which distributions were paid on January 30, 2015.

On June 5, 2014, the Company's Board of Directors authorized a stock distribution of 0.00625 shares of common stock, or 0.625% of each outstanding share of common stock to the stockholders of record at the close of business on June 30, 2014. Such stock distribution was issued on July 14, 2014.

On August 14, 2014, the Company's Board of Directors authorized a stock distribution of 0.01 shares of common stock, or 1.0% of each outstanding share of common stock to the stockholders of record at the close of business on September 30, 2014. Such stock distribution was issued on October 15, 2014.

On November 19, 2014, the Company's Board of Directors authorized a stock distribution of 0.008333 shares of the Company's common stock, $0.01 par value per share, or 0.8333% of each outstanding share of common stock to the stockholders of record at the close of business on December 31, 2014. Such distribution was issued January 15, 2015.

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Consolidated Statements of Operations and Comprehensive (Loss) Income (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Revenues:
Rental income	$ 991,543	$ 0
Interest income	8,251	451
Total revenues	999,794	451
Expenses:
Rental operating	689,325	0
Acquisition costs	1,588,944	0
Management fees - related parties	127,496	0
General and administrative	1,472,181	0
Loss on disposal of assets	198,840	0
Depreciation and amortization expense	531,058	0
Total expenses	4,607,844	0
(Loss) income before other expense	(3,608,050)	451
Other expense:
Interest expense	158,842	0
Net (loss) income	(3,766,892)	451
Other comprehensive loss:
Designated derivative, fair value adjustment	(34,468)	0
Comprehensive (loss) income	$ (3,801,360)	$ 451
Weighted average common shares outstanding (in shares)	1,680,062	19,849
Basic and diluted (loss) earnings per common share (in dollars per share)	$ (2.24)	$ 0.02

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Acquisitions

12 Months Ended

Dec. 31, 2014

Business Combinations [Abstract]

Acquisitions

NOTE 6 - ACQUISITIONS

As of December 31, 2014, the Company owned two properties. The table below summarizes these acquisitions and the respective fair values assigned:

Multifamily Community Name	City and State	Date of Acquisition	Purchase Price (1)		Land		Building and Improvements		Furniture, Fixture and Equipment		Intangible Assets		Other Liabilities			Fair Valued Assigned
Bear Creek	Dallas, TX	6/4/2014	$	9,500,000	$	1,888,982	$	7,060,815	$	198,840	$	351,363	$	(84,732	)	$	9,415,268
Oak Hill	Fort Worth, TX	12/19/2014	47,000,000		4,834,386		40,485,971		503,582		1,176,061		(59,977		)	46,940,023

(1) Purchase price excludes closing costs and acquisition expenses.

On June 4, 2014, the Company acquired its first investment, a 152-unit, multifamily apartment community located in Dallas, Texas known as Bear Creek, for $9.5 million, excluding closing costs. The Company paid an acquisition fee of $264,239, or 2% of the purchase price (including closing costs and any amounts reserved for capital expenditures), to the Advisor.

The following table reflects the fair value of the net assets acquired:

Rental property:
Land	$	1,888,982
Buildings	7,060,815
Personal property	198,840
	9,148,637
Acquired intangibles - in-place leases	351,363
Accrued real estate taxes	(69,085		)
Prepaid rents	(163		)
Security deposits	(15,484		)
Fair value assigned	$	9,415,268

On December 19, 2014, the Company acquired a 360-unit, multifamily apartment community located in Fort Worth, Texas known as Oak Hill, for $47.0 million, excluding closing costs. The Company paid an acquisition fee of $1.1 million, or 2% of the purchase price (including closing costs and any amounts reserved for capital expenditures), to the Advisor.

The following table reflects the fair value of the net assets acquired:

Rental property:
Land	$	4,834,386
Buildings	40,485,971
Personal property	503,582
	45,823,939
Acquired intangibles - in-place leases	1,176,061
Accrued real estate taxes	—
Prepaid rents	(13,162		)
Security deposits	(46,815		)
Fair value assigned	$	46,940,023

The table below summarizes the total revenues, net loss, and acquisition costs of the Company's 2014 acquisitions:

		Years Ended
		December 31,
Multifamily Community		2014			2013
Bear Creek
	Total Revenues	$	821,576		$	—
	Net Loss	(748,500		)	—
	Acquisition Costs	329,709			—
Oak Hill
	Total Revenues	$	170,097		$	—
	Net Loss	(82,184		)	—
	Acquisition Costs	1,259,235			—

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Rental Properties, Net

12 Months Ended

Dec. 31, 2014

Real Estate [Abstract]

Rental Properties, Net

NOTE 5 - RENTAL PROPERTIES, NET

The Company’s investments in rental properties consisted of the following:

	December 31, 2014			December 31, 2013
Land	$	6,723,368		$	—
Building and improvements	47,546,786			—
Furniture, fixtures and equipment	612,846			—
	54,883,000			—
Less: accumulated depreciation	(179,695		)	—
	$	54,703,305		$	—

Depreciation expense for the years endedDecember 31, 2014 and 2013 was $179,695 and $0, respectively.

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Schedule III Real Estate and Accumulated Depreciation

12 Months Ended

Dec. 31, 2014

SEC Schedule III, Real Estate and Accumulated Depreciation Disclosure [Abstract]

SEC Schedule III Real Estate and Accumulated Depreciation Disclosure [Text Block]

Column A	Column B		Column C		Column D			Column E		Column F			Column G	Column H
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
Real estate owned:
Residential	$	—	$	9,148,637	$	(94,229	)	$	9,054,408	$	(179,695	)	1980	6/4/2014
Dallas, Texas
Residential	—		45,823,939		4,653			45,828,592		—			1999	12/19/2014
Fort Worth, Texas
	$	—	$	54,972,576	$	(89,576	)	$	54,883,000	$	(179,695	)

	Years Ended   December 31,
	2014			2013
Investments in real estate:
Balance at beginning of the year	$	—		$	—
Additions during the period:	—			—
Acquisitions	54,972,576			—
Improvements, etc.	109,264			—
Dispositions during the period:	(198,840		)	—
Balance at end of year	$	54,883,000		$	—
Accumulated Depreciation:
Balance at beginning of year	$	—		$	—
Additions charged to expenses	179,695			—
Balance at the end of year	$	179,695		$	—

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Fair Value Measures and Disclosures

12 Months Ended

Dec. 31, 2014

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 values of cash, tenant receivables and accounts payable, approximate their carrying values 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.

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

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

	Level 1		Level 2		Level 3		Total
December 31, 2014
Assets:
Interest rate caps	$	—	$	53,002	$	—	$	53,002
	$	—	$	53,002	$	—	$	53,002
	Level 1		Level 2		Level 3		Total
December 31, 2013
Assets:
Interest rate caps	$	—	$	—	$	—	$	—
	$	—	$	—	$	—	$	—

The carrying amount and fair value of the Company’s mortgage notes payable are as follows:

	December 31, 2014
	Carrying Amount		Fair Value
Mortgage notes payable	$	38,540,000	$	38,540,000

Since the interest rate is variable, the fair value of the mortgage notes payable is equal to the carrying amount.

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Deferred Financing Costs

12 Months Ended

Dec. 31, 2014

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Deferred Financing Costs

DEFERRED FINANCING COSTS

Deferred financing costs incurred to obtain financing are amortized over the term of the related debt. As of December 31, 2014 and December 31, 2013, there were $9,581 and $-0-, respectively, of accumulated amortization of deferred financing costs. Amortization of deferred financing costs for the next five years ending December 31, and thereafter, are as follows:

2015	$	58,112
2016	62,137
2017	61,607
2018	60,653
2019	59,547
Thereafter	279,727
	$	581,783

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Operating Expense Limitation (Details)	12 Months Ended
	Dec. 31, 2014
Other Income and Expenses [Abstract]
Limitation on total operating expenses, percentage of average invested assets for the four most recently completed fiscal quarter	2.00%
Limitation on total operating expenses, percentage of net income for the four most recently completed fiscal quarter	25.00%

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Identified Intangible Assets, Net

12 Months Ended

Dec. 31, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Identified Intangible Assets, Net

IDENTIFIED INTANGIBLE ASSETS, NET

Identified intangible assets, net, consist of rental leases. The value of acquired in-place leases totaled $1.5 millionand$-0-as ofDecember 31, 2014and 2013, respectively, less accumulated amortization of$351,363and$-0-, respectively. The weighted average remaining life of the rental leases iseight monthsas ofDecember 31, 2014. Expected amortization for the rental leases for the next 12 monthsis$1.2 million. For theyear endedDecember 31, 2014, amortization expense totaled$351,363. There was no amortization expense foryear endedDecember 31, 2013.

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Mortgage Notes Payable

12 Months Ended

Dec. 31, 2014

Debt Disclosure [Abstract]

Mortgage Notes Payable

MORTGAGE NOTES PAYABLE

The following is a summary of the Company's mortgage notes payable as of December 31, 2014:

	Balance Outstanding at		Maturity Date	Interest Rate		Average Monthly Debt Service		Interest Expense Incurred for the
Collateral	December 31, 2014			December 31, 2014				Year ended December 31, 2014
Bear Creek	$	7,465,000	7/1/2024	2.54	%	$	15,901	$	110,302
Oak Hill	31,075,000		1/1/2025	2.07	%	54,323		36,557
	$	38,540,000

On June 4, 2014, in connection with the acquisition of Bear Creek, the Company entered into a $7.5 million, 10-year secured mortgage loan with Berkadia Commercial Mortgage, LLC (the "Bear Creek Mortgage Loan"), secured by the property. The Bear Creek Mortgage Loan, which matures on July 1, 2024, bears interest at a floating rate of one-month LIBOR plus 2.37%. As of December 31, 2014, the interest rate was 2.54%. Monthly payments are initially interest only. Beginning with the August 2018 payment, monthly payments will include interest and principal in the amount of approximately $23,432 per month.

On December 19, 2014, in connection with the acquisition of Oak Hill, the Company entered into a $31.1 million, secured mortgage loan with M&T Reality Capital Corporation (the "Oak Hill Mortgage Loan"), secured by the property. The Oak Hill Mortgage Loan, which matures on January 1, 2025, bears interest at a floating rate of one-month LIBOR plus 1.90%. As of December 31, 2014, the interest rate was 2.07%. Monthly payments are initially interest only. Beginning with the February 2017 payment, monthly payments will include interest and principal in the amount of approximately $109,047 per month.

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

2015	$	—
2016	—
2017	590,509
2018	680,324
2019	730,909
Thereafter	36,538,258
	$	38,540,000

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Accumulated Other Comprehensive Loss

12 Months Ended

Dec. 31, 2014

Equity [Abstract]

Accumulated Other Comprehensive Loss

ACCUMULATED OTHER COMPREHENSIVE LOSS

The following table presents the changes in accumulated other comprehensive loss for the year ended December 31, 2014:

	Net unrealized loss on derivatives
January 1, 2014	$	—
Unrealized loss on designated hedge	(34,468		)
December 31, 2014	$	(34,468	)

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Schedule III Real Estate and Accumulated Depreciation - Reconciliations (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
SEC Schedule III, Real Estate and Accumulated Depreciation Disclosure [Abstract]
SEC Schedule III, Real Estate, Other Additions	$ 0	$ 0
Investments in real estate:
Balance at beginning of the year	0	0
Acquisitions	54,972,576	0
Improvements, etc.	109,264	0
Dispositions during the period:	(198,840)	0
Balance at end of year	54,883,000	0
Accumulated Depreciation:
Balance at beginning of year	0	0
Additions charged to expenses	179,695	0
Balance at the end of year	$ 179,695	$ 0

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Equity (Tables)

12 Months Ended

Dec. 31, 2014

Equity [Abstract]

Schedule of Common Stock

As of December 31, 2014, the Company had an aggregate of 4,759,567 shares of $0.01 par value common stock outstanding, including the Advisor's additional purchase of 117,778 shares of common stock for $1.1 million, as follows:

	Shares Issued	Gross Proceeds
Initial public offering	4,702,399	$	46,748,354
Shares issued through stock distributions	19,554	—
Shares issued through distribution reinvestment plan	22,614	214,833
Advisor's initial investment, net of 5,000 share conversion	15,000	150,000
	4,759,567	$	47,113,187

Schedule of Dividends

For the year endedDecember 31, 2014, the Company paid aggregate distributions of $328,785, including $113,952 of distributions paid in cash and $214,833 of distributions reinvested in shares of common stock through the Company's distribution reinvestment plan, as follows:

Authorization Date	Per Common Share		Record Date	Distribution Date	Distributions invested in shares of Common Stock		Net Cash Distributions		Total Aggregate Distributions
June 5, 2014	$	0.00068493	July 31, 2014	August 1, 2014	$	5,065	$	5,560	$	10,625
June 5, 2014	0.00068493		August 31, 2014	September 2, 2014	11,086		8,844		19,930
June 5, 2014	0.00068493		September 30, 2014	October 1, 2014	18,497		11,197		29,694
October 6, 2014	0.00082192		October 30, 2014	October 31, 2014	27,143		13,970		41,113
October 30, 2014	0.00068493		November 26, 2014	November 28, 2014	31,213		15,113		46,326
November 13, 2014	0.00164384		December 30, 2014	December 31, 2014	121,829		59,268		181,097
					$	214,833	$	113,952	$	328,785

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Accumulated Other Comprehensive Loss (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Beginning balance	$ 0
Unrealized loss on designated hedge	(34,468)	0
Ending balance	$ (34,468)	$ 0

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Operating Expense Limitation

12 Months Ended

Dec. 31, 2014

Other Income and Expenses [Abstract]

Operating Expense Limitation

OPERATING EXPENSE LIMITATION

As defined under the Company's charter, commencing four fiscal quarters ending June 30, 2015, the Advisor must reimburse the Company the amount by which the aggregate total operating expenses for the four fiscal quarters then ended exceed the greater of 2% of the average invested assets or 25% of net income, unless the conflicts committee has determined that such excess expenses were justified based on unusual and non-recurring factors. “Average invested assets” means the average monthly book value of assets invested, directly or indirectly, in equity interests in and loans secured by real estate during the 12-month period before deducting depreciation, bad debts or other non-cash reserves. “Total operating expenses” means all expenses paid or incurred by the Company, as determined under GAAP, that are in any way related to operations, including advisory fees, but excluding (a) the expenses of raising capital such as organization and offering expenses, legal, audit, accounting, underwriting, brokerage, listing, registration and other fees, printing and other such expenses and taxes incurred in connection with the issuance, distribution, transfer, registration and stock exchange listing of stock; (b) interest payments; (c) taxes; (d) non-cash expenditures such as depreciation, amortization and bad debt reserves; (e) reasonable incentive fees based on the gain in the sale of assets; and (f) acquisition fees, acquisition expenses (including expenses relating to potential investments that do not close), disposition fees on the resale of property and other expenses connected with the acquisition, disposition and ownership of real estate interests, loans or other property (including the costs of foreclosure, insurance premiums, legal services, maintenance, repair and improvement of property).

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Supplemental Cash Flow Information (Tables)

12 Months Ended

Dec. 31, 2014

Supplemental Cash Flow Elements [Abstract]

Supplemental Cash Flow Information

The following table presents supplemental cash flow information:

	Years Ended
	December 31,
	2014		2013
Non-cash financing and investing activities:
Increase in subscription receivables	$	3,819,991	$	—
Cash distributions on common stock declared but not yet paid	259,379		—
Stock issued from distribution reinvestment plan	195,542		—
Stock distributions issued	214,833		—
Deferred offering costs	1,803,098		—
Due to related parties	1,467,064		—
Cash paid during the period for:
Interest	$	133,036	$	—

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Mortgage Notes Payable - Narrative (Details) (USD $)	0 Months Ended
	Jun. 04, 2014	Dec. 19, 2014	Dec. 31, 2014	Dec. 31, 2013
Debt Instrument [Line Items]
Mortgage notes payable			$ 38,540,000	$ 0
Mortgages [Member] | Bear Creek [Member]
Debt Instrument [Line Items]
Mortgage notes payable	7,500,000		7,465,000
Interest rate at period end			2.54%
Monthly required principal and interest payment	23,432
Mortgages [Member] | Bear Creek [Member] | LIBOR [Member]
Debt Instrument [Line Items]
Basis spread on variable interest rate	2.37%
Mortgages [Member] | Oak Hill Mortgage Loan [Member]
Debt Instrument [Line Items]
Mortgage notes payable		31,100,000	31,075,000
Interest rate at period end			2.07%
Monthly required principal and interest payment		$ 109,047
Mortgages [Member] | Oak Hill Mortgage Loan [Member] | LIBOR [Member]
Debt Instrument [Line Items]
Basis spread on variable interest rate		1.90%

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Rental Properties, Net (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Rental Properties, Net:
Land	$ 6,723,368	$ 0
Building and improvements	47,546,786	0
Furniture, fixtures and equipment	612,846	0
Rental properties, gross	54,883,000	0
Less: accumulated depreciation	(179,695)	0
Rental properties, net	54,703,305	0
Depreciation expense	$ 179,695	$ 0

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Consolidated Statement of Changes in Stockholders' Equity (USD $)	Total	Convertible Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Other Comprehensive Loss [Member]	Retained Earnings/(Accumulated Deficit) [Member]
Balance, beginning of period at Dec. 31, 2012	$ 200,193	$ 0	$ 200	$ 199,800	$ 0	$ 193
Balance, beginning of period (in shares) at Dec. 31, 2012		0	20,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Conversion of common stock to convertible stock	0	500	(50)	(450)
Conversion of common stock to convertible stock (in shares)		50,000	(5,000)
Designated derivative, fair value adjustment	0
Net (loss) income	451					451
Balance, end of period at Dec. 31, 2013	200,644	500	150	199,350	0	644
Balance, beginning of period (in shares) at Dec. 31, 2013	15,000	50,000	15,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of stock	46,748,354	0	47,024	46,701,330		0
Issuance of stock (in shares)		0	4,702,399
Distributions of common stock	0		196	195,346		(195,542)
Distributions of common stock (in shares)			19,554
Syndication costs	(5,162,160)			(5,162,160)
Common stock issued through distribution reinvestment plan	0		226	214,607		(214,833)
Common stock issued through dividend reinvestment plan (in shares)			22,614
Distributions declared	(373,330)					(373,330)
Designated derivative, fair value adjustment	(34,468)				(34,468)
Net (loss) income	(3,766,892)					(3,766,892)
Balance, end of period at Dec. 31, 2014	$ 37,612,148	$ 500	$ 47,596	$ 42,148,473	$ (34,468)	$ (4,549,953)
Balance, beginning of period (in shares) at Dec. 31, 2014	4,759,567	50,000	4,759,567

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Restricted Cash

12 Months Ended

Dec. 31, 2014

Cash and Cash Equivalents [Abstract]

Restricted Cash

NOTE 4 - RESTRICTED CASH

Restricted cash represents escrow deposits with lenders to be used to pay real estate taxes, insurance, and capital improvement. A summary of the components of restricted cash follows:

	December 31, 2014		December 31, 2013
Real estate taxes	$	128,871	$	—
Insurance	157,600		—
Capital improvements	438,834		—
Total	$	725,305	$	—

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Derivatives and Hedging Activities - Outstanding Interest Rate Derivatives (Details) (Interest Rate Cap [Member], USD $)	Dec. 31, 2014 derivative_contract
Interest Rate Cap [Member]
Derivatives, Fair Value [Line Items]
Number of Instruments	2
Notional Amount	$ 38,540,000

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Restricted Cash (Tables)

12 Months Ended

Dec. 31, 2014

Cash and Cash Equivalents [Abstract]

Summary of Components of Restricted Cash

A summary of the components of restricted cash follows:

	December 31, 2014		December 31, 2013
Real estate taxes	$	128,871	$	—
Insurance	157,600		—
Capital improvements	438,834		—
Total	$	725,305	$	—

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Summary of Significant Accounting Policies (Details) (USD $)	0 Months Ended		12 Months Ended	0 Months Ended	12 Months Ended
	Oct. 15, 2014	Jul. 14, 2014	Dec. 31, 2014	Jan. 15, 2015	Dec. 31, 2013	Mar. 19, 2015 unit
Property, Plant and Equipment [Line Items]
Deferred Offering Costs to Date			$ 4,400,000
Deposits Assets, Current			15,800,000
Cash, Uninsured Amount			14,800,000
Acquisitions, period to finalize valuation			1 year
Future minimum rental payments to be received from noncancelable operating leases, year ending June 30, 2015			3,700,000
Future minimum rental payments to be received from noncancelable operating leases, year ending June 30, 2016			85,000
Stock distribution	1.00%	0.625%
Due to related parties			3,851,263		0
Deferred offering costs			3,618,954		0
Subsequent Event [Member]
Property, Plant and Equipment [Line Items]
Number of Units						216
Stock distribution				0.83333%
Advisor [Member]
Property, Plant and Equipment [Line Items]
Maximum reimbursement of organizational and offering costs, percent of offering proceeds			2.50%
Organization and offering costs [Member] | Advisor [Member]
Property, Plant and Equipment [Line Items]
Due to related parties			2,272,325		0
Fees earned / expenses incurred			3,006,819		0
Payment of public offering costs [Member] | Advisor [Member]
Property, Plant and Equipment [Line Items]
Deferred offering costs			$ (734,493)
Buildings [Member]
Property, Plant and Equipment [Line Items]
Real estate investments, useful life			27 years 6 months
Building improvements [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Real estate investments, useful life			3 years
Building improvements [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Real estate investments, useful life			27 years 6 months
Bear Creek Apartments [Member]
Property, Plant and Equipment [Line Items]
Number of Units			152
RRE Oak Hill Holdings (Oak Hill) [Member]
Property, Plant and Equipment [Line Items]
Number of Units			360

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Derivatives and Hedging Activities

12 Months Ended

Dec. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives and Hedging Activities

DERIVATIVES AND HEDGING ACTIVITIES

As of December 31, 2014, the Company had the following outstanding interest rate derivatives that were designated as a cash flow hedges of interest rate risk:

Interest Rate Derivative	Number of Instruments	Notional Amount		Maturity Dates
Interest rate cap	2	$	38,540,000	November 1, 2018 and January 1, 2018

Tabular Disclosure of Fair Value of Derivative Instrument on the Balance Sheet

The table below presents the fair value of the Company’s derivative financial instruments, which is included in prepaid expenses and other assets on the consolidated balance sheet as of December 31, 2014:

Asset Derivatives						Liabilities Derivatives
December 31, 2014			December 31, 2013			December 31, 2014			December 31, 2013
Balance Sheet	Fair Value		Balance Sheet	Fair Value		Balance Sheet	Fair Value		Balance Sheet	Fair Value
Interest rate cap	$	53,002	Interest rate cap	$	—	NA	$	—	NA	$	—

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 2015, the Company estimates that $552 will be reclassified as an increase to interest expense.