10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2017

OR

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

For the transition period from____________to__________

Commission file number: 000-55776

RW HOLDINGS NNN REIT, INC.

(Exact name of registrant as specified in its charter)

Maryland	47-4156046
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
3080 Bristol Street, Suite 550, Costa Mesa, CA	92626
(Address of principal executive offices)	(Zip Code)

(855) 742-4862

(Registrant’s telephone number, including area code:)

Rich Uncles NNN REIT, Inc.

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  x  No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

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

Large accelerated filer ¨	Accelerated filer  ¨
Non-accelerated filer ¨	Smaller reporting company  x
(Do not check if a smaller reporting company)
	Emerging growth company  x

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

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

As of August 10, 2017 there were 6,863,449 shares of Common Stock outstanding.

RW HOLDINGS NNN REIT, INC.

FORM 10-Q

June 30, 2017

INDEX

PART I -	FINANCIAL INFORMATION		3
	Item 1.	Unaudited Condensed Consolidated Financial Statements	3
		Condensed Consolidated Balance Sheets – June 30, 2017 and December 31, 2016	3
		Condensed Consolidated Statements of Operations – Three and Six Months Ended June 30, 2017 and 2016	4
		Condensed Consolidated Statement of Stockholders’ Equity – Six Months Ended June 30, 2017	5
		Condensed Consolidated Statements of Cash Flows - Six Months Ended June 30, 2017 and 2016	6
		Notes to the Condensed Consolidated Financial Statements	7
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33
	Item 4.	Controls and Procedures	34
PART II -	OTHER INFORMATION		34
	Item 1.	Legal Proceedings	34
	Item 1A.	Risk Factors	34
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
	Item 3.	Defaults upon Senior Securities	36
	Item 4.	Mine Safety Disclosures	36
	Item 5.	Other Information	36
	Item 6.	Exhibits	36
SIGNATURES			37

2

PART I — FINANCIAL INFORMATION

ITEM 1 – Unaudited Condensed Consolidated Financial Statements

RW HOLDINGS NNN REIT, INC.

Condensed Consolidated Balance Sheets

(Unaudited)

	June 30, 2017			December 31, 2016
ASSETS
Real estate investments:
Land	$	16,182,071		$	5,369,238
Building and improvements		61,597,935			24,243,072
Tenant origination and absorption costs		6,581,896			3,632,731
Total investments in real estate property		84,361,902			33,245,041
Accumulated depreciation and amortization		(1,649,463	)		(493,185	)
Total investments in real estate property, net		82,712,439			32,751,856
Investment in Rich Uncles REIT I		3,555,268			3,523,809
Real estate investments, net		86,267,707			36,275,665
Cash and cash equivalents		2,544,784			3,431,769
Restricted cash		1,859,899			245,604
Tenant receivables		557,482			114,320
Above-market leases, net		729,816			148,577
Due from affiliates		42,925			108,433
Purchase and other deposits		1,625,100			500,000
Prepaid expenses and other assets		949,566			478,192
TOTAL ASSETS	$	94,577,279		$	41,302,560
LIABILITIES AND STOCKHOLDERS' EQUITY
Mortgage notes payable, net	$	25,975,486		$	7,113,701
Unsecured credit facility, net		9,232,184			10,156,685
Accounts payable, accrued expenses and other liabilities		1,622,708			470,236
Below-market leases, net		502,326			150,767
Due to affiliates		278,611			383,422
Interest rate swap derivatives		104,633			-
Investor deposits		-			582,516
Share repurchases payable		310,676			17,467
TOTAL LIABILITIES		38,026,624			18,874,794
Redeemable common stock		138,429			196,660
Preferred stock, $0.001 par value, 50,000,000 shares authorized, no shares issued and outstanding		-			-
Common stock $0.001 par value, 200,000,000 shares authorized, 6,184,560 and 2,458,881 shares issued and outstanding as of June 30, 2017 and December 31, 2016, respectively.		6,186			2,458
Additional paid-in-capital		59,545,077			23,643,435
Cumulative distributions and net losses		(3,139,037	)		(1,414,787	)
TOTAL STOCKHOLDERS' EQUITY		56,412,226			22,231,106
Commitments and contingencies (Note 8)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	94,577,279		$	41,302,560

See accompanying notes to the Condensed Consolidated Financial Statements

3

PART I – FINANCIAL INFORMATION (continued)

ITEM 1 – Unaudited Condensed Consolidated Financial Statements (continued)

RW HOLDINGS NNN REIT, INC.

Condensed Consolidated Statements of Operations

(Unaudited)

	Three Months Ended June 30						Six Months Ended June 30
	2017			2016			2017			2016
Revenue:
Rental income	$	1,366,901		$	41,466		$	2,063,595		$	41,466
Tenant recoveries		362,141			-			525,646			-
Total revenue		1,729,042			41,466			2,589,241			41,466
Expenses:
Fees to affiliates (Note 7)		196,856			481,688			308,154			481,688
General and administrative		831,179			6,290			2,018,023			6,380
Depreciation and amortization		725,419			33,489			1,156,278			33,489
Interest expense		438,168			40,650			570,005			40,650
Property expenses (Note 7)		375,963			-			555,741			-
Acquisition costs		-			73,028			-			73,028
Total expenses		2,567,585			635,145			4,608,201			635,235
Less:  Expenses reimbursed/fees waived by Sponsor or affiliates (Note 7)		(722,118	)		-			(1,437,969	)		-
Net expenses		1,845,467			635,145			3,170,232			635,235
Other income:
Interest income		613			-			888			-
Equity in earnings from Rich Uncles REIT I		159,399			-			167,356			-
Total other income		160,012			-			168,244			-
Net income (loss)	$	43,587		$	(593,679	)	$	(412,747	)	$	(593,769	)
Net income (loss) per share, basic and diluted	$	0.01		$	(29.68	)	$	(0.09	)	$	(29.69	)
Weighted-average number of common shares outstanding, basic and diluted		5,295,203			20,000			4,381,066			20,000
Dividends declared per common share	$	0.175		$	-		$	0.350		$	-

See accompanying notes to the Condensed Consolidated Financial Statements

4

PART I – FINANCIAL INFORMATION (continued)

ITEM 1 – Unaudited Condensed Consolidated Financial Statements (continued)

RW HOLDINGS NNN REIT, INC.

Condensed Consolidated Statement of Stockholders' Equity

For the six months ended June 30, 2017

(unaudited)

	Common Stock						Additional Paid-in			Cumulative Distributions and Net			Total Stockholders'
	Shares			Amounts			Capital			Losses			Equity
Balance, December 31, 2016		2,458,881		$	2,458		$	23,643,435		$	(1,414,787	)	$	22,231,106
Issuance of common stock		3,793,737			3,794			37,933,579			-			37,937,373
Offering costs		-			-			(1,138,121	)		-			(1,138,121	)
Distributions declared		-			-			-			(1,311,503	)		(1,311,503	)
Stock compensation expense		6,500			6			64,994			-			65,000
Repurchase of common stock		(74,558	)		(72	)		(723,832	)		-			(723,904	)
Net loss		-			-			-			(412,747	)		(412,747	)
Reclassifications to redeemable common stock		-			-			(234,978	)		-			(234,978	)
Balance, June 30, 2017		6,184,560		$	6,186		$	59,545,077		$	(3,139,037	)	$	56,412,226

See accompanying notes to the Condensed Consolidated Financial Statements

5

PART I – FINANCIAL INFORMATION (continued)

ITEM 1 – Unaudited Condensed Consolidated Financial Statements (continued)

RW HOLDINGS NNN REIT, INC.

Consolidated Statements of Cash Flows

(Unaudited)

	Six months ended
	June 30, 2017			June 30, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(412,747	)	$	(593,769	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		1,156,278			33,489
Stock compensation expense		65,000			-
Deferred rents		(176,513	)		2,452
Amortization of deferred financing costs		36,504			1,186
Amortization of above-market lease		35,248			1,389
Amortization of below-market leases		(13,758	)		-
Unrealized losses (gain) on interest rate swap valuation		104,633			-
Equity in earnings from investment in Rich Uncles REIT I		(167,356	)		-
Distributions from investment in Rich Uncles REIT I		135,896			-
Change in operating assets and liabilities:
Tenant receivables		(272,112	)		-
Due from affiliates		79,219			-
Prepaid expenses and other assets		(5,576	)		-
Accounts payable, accrued expenses and other liabilities		635,109			34,275
Due to affiliates		231,737			577,418
Net cash provided by operating activities		1,431,562			56,440
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of real estate investments		(49,134,241	)		(15,731,000	)
Payment of acquisition fees to affiliate		(1,771,482	)		-
Refundable purchase deposits		(1,500,000	)		-
Additions to real estate investments		(193,191	)		-
Investment in Rich Uncles REIT I		-			(2,000,000	)
Net cash used in investing activities		(52,598,914	)		(17,731,000	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings from unsecured credit facility		33,140,000			11,000,000
Repayments of unsecured credit facility		(34,065,618	)		-
Proceeds from mortgage notes payable		19,454,988			7,319,700
Principal payments on mortgage notes payable		(86,898	)		-
Refundable loan deposits		(125,100	)		-
Payments of deferred financing costs		(541,691	)		(171,166	)
Proceeds from issuance of common stock and investor deposits		36,295,673			-
Payments of offering costs		(1,200,469	)		-
Payments to redeem common stock		(723,904	)		-
Distributions paid to common stockholders		(252,319	)		-
Net cash provided by financing activities		51,894,662			18,148,534
NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		727,310			473,974
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD		3,677,373			200,815
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD	$	4,404,683		$	674,789
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest	$	350,750		$	10,589
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES
Transfers of redeemable common stock	$	234,978		$	7,500
Distributions paid to common stockholders through common stock issuances pursuant to the distribution reinvestment plan	$	1,059,184		$	-
Purchase deposits applied to acquisition of real estate	$	500,000		$	-
Increase in share repurchases payable	$	293,209		$	17,467
Payable to seller for acquisition of real estate investment	$	117,803		$	-

See accompanying notes to the Condensed Consolidated Financial Statements

6

PART I – FINANCIAL INFORMATION (continued)

ITEM 1 – Unaudited Condensed Consolidated Financial Statements (continued)

RW HOLDINGS NNN REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2017

(unaudited)

NOTE 1. BUSINESS AND ORGANIZATION

RW Holdings NNN REIT, Inc. (the “Company”) was incorporated on May 14, 2015 as a Maryland corporation. The Company was originally incorporated under the name Rich Uncles Real Estate Investment Trust, Inc., but amended its name on October 19, 2015 to Rich Uncles NNN REIT, Inc. and again on August 14, 2017 to RW Holdings NNN REIT, Inc. As of June 30, 2017, the Company has the authority to issue 250,000,000 shares of stock, consisting of 200,000,000 shares of common stock, $0.001 par value per share, and 50,000,000 shares of preferred stock, $0.001 par value per share. Pursuant to its securities offering registered with the Securities and Exchange Commission (“SEC”), the Company sells its shares directly to investors at a purchase price of $10.00 per share, with a minimum investment in shares of $500. The Company was formed to primarily invest, directly or indirectly through investments in real estate owning entities, in single-tenant income-producing corporate properties located in the United States, which are leased to creditworthy tenants under long-term net leases. The Company’s goal is to generate current income for investors and long-term capital appreciation in the value of its properties.

The Company holds its investments in real property through special purpose wholly owned limited liability companies or through Rich Uncles NNN Operating Partnership, LP, a Delaware limited partnership (the “Operating Partnership”). The Operating Partnership was formed on January 28, 2016. The Company is the sole general partner of, and owns a 99% partnership interest in, the Operating Partnership. Rich Uncles NNN LP, LLC, a Delaware limited liability company formed on May 13, 2016, owns the remaining 1% partnership interest in the Operating Partnership and is the sole limited partner. Rich Uncles NNN LP, LLC is wholly owned by the Company.

The Company is externally managed by its advisor, Rich Uncles NNN REIT Operator, LLC (the “Advisor”), a Delaware limited liability company wholly owned by the Company’s sponsor, Rich Uncles, LLC (the “Sponsor”), a Delaware limited liability company whose members include Harold Hofer, Howard Makler, and Ray Wirta. On June 24, 2015 and December 31, 2015, the Company issued 10,000 shares of its common stock to the Sponsor, respectively, for a purchase price of $10.00 per share.

On July 15, 2015, the Company filed a registration statement on Form S-11 with the Securities and Exchange Commission (the “SEC”) to register an initial public offering of its common stock to offer a maximum of $900,000,000 in shares of common stock for sale to the public (the “Primary Offering”). The Company also registered a maximum of $100,000,000 of common stock pursuant to the Company’s distribution reinvestment plan (the “Registered DRP Offering” and, together with the Primary Offering, the “Registered Offering”). The SEC declared the Company’s registration statement effective on June 1, 2016. The Company had no significant operations prior to our purchase of real estate properties in June 2016.

On July 20, 2016, the Company began offering shares to the public and through June 30, 2017, the Company had sold 6,231,455 shares of common stock in the Registered Offering, including 118,418 shares of common stock sold under its Registered DRP Offering, for aggregate gross offering proceeds of $62,314,551.

7

PART I – FINANCIAL INFORMATION (continued)

ITEM 1 – Unaudited Condensed Consolidated Financial Statements (continued)

RW HOLDINGS NNN REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2017

(unaudited)

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information as contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“Codification”), and in conjunction with rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the unaudited Condensed Consolidated Financial Statements do not include certain information and footnote disclosures required by GAAP for audited financial statements. In the opinion of management, the unaudited Condensed Consolidated Financial Statements reflect all adjustments which are of a normal and recurring nature, necessary for a fair and consistent presentation of the financial position and the results for the interim period presented. Operating results for the three and six months ended June 30, 2017 are not necessarily indicative of the results that may be expected for the year ended December 31, 2017. The accompanying unaudited interim financial information should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2016 as filed with the SEC.

The unaudited Condensed Consolidated Financial Statements include the accounts of the Company, the Operating Partnership, and directly wholly owned subsidiaries. All significant intercompany balances and transactions are eliminated in consolidation.

Reclassifications

Certain amounts in the Company’s prior period consolidated financial statements have been reclassified to conform to the current period presentation. These reclassifications have not changed the results of operations of prior periods.

Other Comprehensive Income

For all periods presented, other comprehensive income (loss) is the same as net income (loss).

Derivative Instruments

The Company enters into derivative instruments for risk management purposes to hedge its exposure to cash flow variability caused by changing interest rates on its variable rate mortgage notes payable. The Company records these derivative instruments at fair value in the accompanying consolidated balance sheets. The Company’s mortgage derivative instruments have not been designated as effective hedges and therefore the changes in fair value are recorded as gain or loss on derivative instruments in the accompanying consolidated statement of operations.

Equity in Earnings

The Company’s investment in Rich Uncles REIT I (“REIT I”) represented an approximate 4.36% and 4.39% ownership interest as of June 30, 2017 and December 31, 2016, respectively. Through March 31, 2017, the Company had recorded its share of equity in the earnings (losses) of REIT I based on estimates of REIT I’s results of operations. In July 2017, REIT I’s financial statements for the year ended December 31, 2016 were prepared and audited. The Company’s equity in earnings (losses) of REIT I for the year ended December 31, 2016 should have been equity in earnings of $30,038 rather than equity in losses of $79,271 which was recorded. The Company’s equity pick up for the three months ended March 31, 2017 should have been equity in earnings of $18,813 rather than the equity in earnings of $7,957 which was recorded. For the three months ended June 30, 2017, the Company recorded equity in earnings from REIT I of $159,399, which included $120,165 related to periods prior to April 1, 2017 as described above. For the six months ended June 30, 2017, the Company recorded equity in earnings from REIT I of $167,356, which included $109,309 related to periods prior to January 1, 2017 as described above.

The following is summarized financial information for REIT I:

	Three months ended June 30,					Six months ended June 30,
	2017		2016			2017		2016
Total revenue	$	3,507,951	$	1,440,457		$	6,234,218	$	2,245,359
Net income (loss)	$	937,414	$	(1,268,078	)	$	1,331,862	$	(2,400,993	)

Use of Estimates

The preparation of the unaudited Condensed Consolidated Financial Statements and the accompanying notes thereto in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited Condensed Consolidated Financial Statements and accompanying notes. Actual results may differ from those estimates.

8

PART I – FINANCIAL INFORMATION (continued)

ITEM 1 – Unaudited Condensed Consolidated Financial Statements (continued)

RW HOLDINGS NNN REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2017

(unaudited)

Recent Accounting Pronouncements

New Accounting Standards Issued and Adopted

In January 2017, the FASB issued Accounting Standards Update (“ASU”) No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”) which clarified the definition of a business. The update added further guidance that assists preparers in evaluating whether a transaction will be an acquisition of an asset or a business. The Company expects that most of its acquisitions will qualify as an asset acquisition and therefore acquisition costs are capitalized as part of the cost of the acquired properties. The Company adopted the standard as of October 1, 2016. For periods prior to the adoption of ASU 2017-01, the Company’s financial statements will not be comparable because acquisitions of property qualified as a business and therefore acquisition costs were expensed.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows. ASU 2016-15 addresses certain issues where diversity in practice was identified. It amends existing guidance, which is principles based and often requires judgment to determine the appropriate classification of cash flows as operating, investing or financing activities. In addition, ASU 2016-15 clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. On January 1, 2017, we early adopted this standard in its entirety on a retrospective basis and determined that the only clarification to significantly impact the Company was the classification of distributions received from our equity method investment in Rich Uncles REIT I. The update allows for the election to classify distributions received from equity method investments based on either a cumulative earnings approach or a nature of distribution approach. We have elected the nature of the distribution approach, in which cash flows generated from the operations of an unconsolidated entity are classified as a return on investment (cash inflow from operating activities) and cash flows that were generated from property sales, debt refinancing or sales of our investments are classified as a return of investment (cash inflow from investing activities). We adopted this approach based on the information available to us to determine the nature of the underlying activity that generated the distributions from unconsolidated entities.

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”). ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and restricted cash. Therefore, amounts generally described as restricted cash should be included with cash and cash equivalents when reconciling the beginning of period and end of period total amounts shown on the statement of cash flows, and transfers between cash and cash equivalents and restricted cash are no longer presented within the statement of cash flows. ASU 2016-18 is effective for annual periods beginning after December 15, 2017, including interim periods within those fiscal years. The Company elected to early adopt ASU 2016-18 for the reporting period ended December 31, 2016 and the standard was applied retrospectively for all periods presented. As a result of the adoption of ASU 2016-18, the Company no longer presents the change within restricted cash in the consolidated statement of cash flows.

New Accounting Standards Recently Issued and Not Yet Adopted

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). ASU 2014-09 requires an entity to recognize the revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services.  ASU 2014-09 supersedes the revenue requirements in Revenue Recognition (Topic 605) and most industry-specific guidance throughout the Industry Topics of the Codification.  ASU 2014-09 does not apply to lease contracts within the scope of Leases (Topic 840).  ASU 2014-09 was to be effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and is to be applied retrospectively, with early application not permitted.  In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which defers the effective date of ASU 2014-09 by one year. Early adoption is permitted but not before the original effective date. As the primary source of revenue for the Company is generated through leasing arrangements, which are scoped out of this standard, the Company does not expect the adoption of ASU 2014-09 to have a significant impact on its consolidated financial statements.

9

PART I – FINANCIAL INFORMATION (continued)

ITEM 1 – Unaudited Condensed Consolidated Financial Statements (continued)

RW HOLDINGS NNN REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2017

(unaudited)

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). The amendments in ASU 2016-02 change the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU 2016-02 is effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption of ASU 2016-02 is permitted. The new standard for lease accounting requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The Company is currently evaluating the impact of adopting the new leases standard on its consolidated financial statements.

NOTE 3. REAL PROPERTY

As of June 30, 2017, the Company’s real estate portfolio consisted of fourteen properties in seven states consisting of eight retail, five office and one industrial property. The following table provides summary information regarding the Company’s real estate as of June 30, 2017:

Property	Location	Acquisition Date	Property Type	Land, Buildings and Improvements		Tenant Origination and Absorption Costs		Accumulated Depreciation and Amortization			Total Investment in Real Estate Property, Net
Accredo	Orlando, FL	6/15/2016	Office	$	9,850,055	$	1,053,638	$	(512,437	)	$	10,391,256
Walgreens	Stockbridge, GA	6/21/2016	Retail		4,147,948		705,423		(341,623	)		4,511,748
Dollar General	Litchfield, ME	11/4/2016	Retail		1,281,812		116,302		(25,152	)		1,372,962
Dollar General	Wilton, ME	11/4/2016	Retail		1,543,776		140,653		(32,190	)		1,652,239
Dollar General	Thompsontown, PA	11/4/2016	Retail		1,199,860		106,730		(24,167	)		1,282,423
Dollar General	Mt. Gilead, OH	11/4/2016	Retail		1,174,188		111,847		(23,171	)		1,262,864
Dollar General	Lakeside, OH	11/4/2016	Retail		1,112,872		100,857		(23,780	)		1,189,949
Dollar General	Castalia, OH	11/4/2016	Retail		1,102,086		86,408		(23,105	)		1,165,389
Dana	Cedar Park, TX	12/27/2016	Industrial		8,392,906		1,210,874		(265,729	)		9,338,051
Northrop Grumman	Melbourne, FL	3/7/2017	Office		12,382,991		1,341,198		(228,383	)		13,495,806
exp US Services	Maitland, FL	3/27/2017	Office		5,920,121		388,248		(63,332	)		6,245,037
Harley	Bedford, TX	4/13/2017	Retail		13,178,286		-		(64,063	)		13,114,222
Wyndham	Summerlin, NV	6/22/2017	Office		9,447,270		669,232		(12,106	)		10,104,396
Williams Sonoma	Summerlin, NV	6/22/2017	Office		7,045,835		550,486		(10,225	)		7,586,097
				$	77,780,006	$	6,581,896	$	(1,649,463	)	$	82,712,439

10

PART I – FINANCIAL INFORMATION (continued)

ITEM 1 – Unaudited Condensed Consolidated Financial Statements (continued)

RW HOLDINGS NNN REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2017

(unaudited)

Current Acquisitions

During the six months ended June 30, 2017, the Company acquired the following properties:

Property	Acquisition Date	Land		Buildings and Improvements		Tenant Origination and Absorption Costs		Above- Market Lease		Below- Market Lease			Total
Northrop Grumman	3/7/2017	$	1,191,024	$	11,191,967	$	1,341,199	$	-	$	-		$	13,724,190
exp US Services	3/27/2017		785,801		5,134,320		388,248		616,486		-			6,924,855
Harley	4/13/2017		1,145,196		12,033,090		-		-		-			13,178,286
Wyndham	6/22/2017		4,144,069		5,303,201		669,232		-		-			10,116,502
Williams Sonoma	6/22/2017		3,546,744		3,499,091		550,486		-		(364,554	)		7,231,767
		$	10,812,834	$	37,161,669	$	2,949,165	$	616,486	$	(364,554	)	$	51,175,600

Purchase price	$	51,175,600
Purchase deposits applied		(500,000	)
Acquisition fees to affiliates		(1,483,571	)
Payable to seller for acquisition of real estate		(117,803	)
Refund from escrow		60,015
Cash paid for acquisition of real estate	$	49,134,241

The purchase price allocations reflected in the accompanying unaudited Condensed Consolidated Financial Statements is based upon estimates and assumptions that are subject to change that may impact the fair value of the assets and liabilities above (including real estate investments, other assets and accrued liabilities). The noncancellable lease term of the properties acquired during the six months ended June 30, 2017 are as follows:

Property	Lease Expiration
Northrop Grumman	5/31/2021
exp US Services	11/30/2026
Harley	4/12/2042
Wyndham	2/29/2025
Williams Sonoma	10/31/2022

The Company recorded these acquisitions as asset acquisitions and capitalized $1,038,776 and $1,723,251 of acquisition fees and costs for the three and six months ended June 30, 2017, respectively. During the three and six months ended June 30, 2017, the Company recognized $965,368 and $1,066,814, respectively, of total revenue related to these properties.

11

PART I – FINANCIAL INFORMATION (continued)

ITEM 1 – Unaudited Condensed Consolidated Financial Statements (continued)

RW HOLDINGS NNN REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2017

(unaudited)

Operating Leases

As of June 30, 2017, our portfolio’s asset concentration (greater than 10% of total assets) was as follows:

Property and Location	Net Carrying Value		Percentage of Total Assets
Accredo, FL	$	10,391,256		10.99	%
Northrop Grumman, FL	$	13,495,806		14.27	%
Harley, TX	$	13,114,222		13.87	%
Wyndham, NV	$	10,104,396		10.68	%

At June 30, 2017 and December 31, 2016, tenant receivables included $201,026 and $29,975, respectively, of straight-line rent.

As of June 30, 2017, the future minimum contractual rent payments due under the Company’s non-cancelable operating leases are as follows:

July 1, 2017 through December 31, 2017	$	2,870,956
2018		6,732,550
2019		6,884,632
2020		7,035,980
2021		5,563,272
2022		4,556,702
Thereafter		20,331,662
	$	53,975,754

Revenue Concentration

For the six months ended June 30, 2017, our portfolio’s revenue concentration (greater than 10% total revenue) was as follows:

Property and Location	Revenue		Percentage of Total Revenue
Accredo, FL	$	531,744		20.54	%
Dana, TX	$	465,089		17.97	%
Northrop, FL	$	459,047		17.73	%
Harley, TX	$	326,102		12.60	%

12

PART I – FINANCIAL INFORMATION (continued)

ITEM 1 – Unaudited Condensed Consolidated Financial Statements (continued)

RW HOLDINGS NNN REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2017

(unaudited)

As of June 30, 2017, our portfolio’s tenant concentration (greater than 10% of annualized base rent) was as follows:

Property and Location	Effective Annualized Base Rent*		Percentage of Annualized Base Rent
Accredo, FL	$	899,010		13.56	%
Dana, TX	$	665,917		10.05	%
Northrop, FL	$	1,162,274		17.53	%
exp US Services, FL	$	681,077		10.27	%
Harley, TX	$	900,000		13.58	%
Wyndham, NV	$	798,827		12.05	%

*Effective Annualized Base Rent is calculated based on the monthly base rent at June 30, 2017 for twelve months.

As of June 30, 2017, no other tenant accounted for more than 10% of annualized base rent.

Intangibles

As of June 30, 2017, the Company’s intangibles were as follows:

	Tenant Origination and Absorption Costs			Above-Market Leases			Below-Market Leases
Cost	$	6,581,896		$	783,115		$	(516,164	)
Accumulated amortization		(608,394	)		(53,299	)		13,838
Net amount	$	5,973,502		$	729,816		$	(502,326	)

Amortization of intangible assets over the next five years is expected to be as follows:

	Tenant Origination and Absorption Costs		Above-Market Leases		Below-Market Leases
July 1, 2017 through December 31, 2017	$	559,234	$	48,523	$	(44,772	)
2018		1,118,468		97,045		(89,544	)
2019		1,118,468		97,045		(89,544	)
2020		1,118,468		97,045		(89,544	)
2021		702,209		78,994		(89,544	)
2022		412,034		63,719		(69,853	)
Thereafter		944,621		247,445		(29,525	)
	$	5,973,502	$	729,816	$	(502,326	)
Weighted-Average Remaining Amortization Period		6.33 years		8.43 years		5.80 years

13

PART I – FINANCIAL INFORMATION (continued)

ITEM 1 – Unaudited Condensed Consolidated Financial Statements (continued)

RW HOLDINGS NNN REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2017

(unaudited)

NOTE 4. DEBT

Mortgage Notes Payable

As of June 30, 2017, the Company’s mortgage notes payable consisted of the following:

Collateral	Principal Amount		Deferred Loan Costs, net			Net Balance		Contractual Interest Rate (1)	Effective Interest Rate (1)		Loan Maturity
Accredo/Walgreens properties	$	7,200,707	$	(142,659	)	$	7,058,048	3.95%		3.95%	7/1/2021
Dana property		4,747,013		(134,248	)		4,612,765	4.56%		4.56%	4/1/2023
Six Dollar General properties (2)		3,976,515		(171,369	)		3,805,146	4.69%		4.69%	4/1/2022
Wyndham property (3)		5,970,000		(115,276	)		5,854,724	One-month LIBOR + 2.05%		4.34%	6/5/2027
Williams Sonoma property (3)		4,740,000		(95,197	)		4,644,803	One-month LIBOR + 2.05%		4.05%	6/5/2022
	$	26,634,235	$	(658,749	)	$	25,975,486

(1) Contractual interest rate represents the interest rate in effect under the mortgage note payable as of June 30, 2017. Effective interest rate is calculated as the actual interest rate in effect as of June 30, 2017 (consisting of the contractual interest rate and the effect of the interest rate swap, if applicable). For further information regarding the Company’s derivative instruments, see Note 5.

(2) The loan is cross-collateralized with all six Dollar General properties owned by the Company and one Dollar General property owned by REIT I. The deeds of trust for the Company’s six Dollar General properties and the deed of trust for the REIT I Dollar General property contain cross-collateralization and cross default provisions. At June 30, 2017, the outstanding principal balance of the loan on REIT I’s one Dollar General property was $636,916.

(3) The loans on each of the Williams Sonoma and Wyndham properties (collectively, the Property) located in Summerlin, Nevada were originated by Nevada State Bank (Bank). The loans are collateralized by a deed of trust and a security agreement with assignment of rents and fixture filing. In addition, the individual loans are subject to a cross collateralization and cross default agreement whereby any default under, or failure to comply with the terms of any one or both of the loans is an event of default under the terms of both loans. The value of the Property must be in an amount sufficient to maintain a loan to value ratio of no more than 60%. If the loan to value ratio is ever less than 60%, the borrower shall, upon the Bank’s written demand, reduce the principal balance of the loans so that the loan to value ratio is no more than 60%.

Unsecured Credit Facility

On June 7, 2016, the Operating Partnership (“Borrower”), entered into a credit agreement (the “Unsecured Credit Agreement”) with Pacific Mercantile Bank (“Lender”). Pursuant to the Unsecured Credit Agreement, the Borrower has a $12,000,000 unsecured credit facility with an interest rate equal to 1% over an independent index, that is the highest rate on corporate loans posted by at least 75% of the thirty (30) largest banks in the United States, known as The Wall Street Journal Prime Rate, as published in the Wall Street Journal. Payments under the Unsecured Credit Agreement are interest only and are due on the 15^th day of each month. The Unsecured Credit Agreement initially had a maturity date of June 15, 2017. On May 12, 2017, the maturity date of the Unsecured Credit Agreement was extended to October 28, 2017. The effective interest rate for borrowings under the Unsecured Credit Agreement during the six months ended June 30, 2017 was 4.98%.

The Unsecured Credit Agreement is guaranteed in the amount of $12,000,000 by the Company, Rich Uncles NNN LP, LLC, Harold Hofer, Howard Makler and Ray Wirta and trusts affiliated with the aforementioned individuals. The guarantees are to be released once the Company has book equity of $60,000,000.

We are negotiating the extension of the maturity date of the Unsecured Credit Agreement and we expect to complete this process prior to its current October 28, 2017 maturity date.

14

PART I – FINANCIAL INFORMATION (continued)

ITEM 1 – Unaudited Condensed Consolidated Financial Statements (continued)

RW HOLDINGS NNN REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2017

(unaudited)

All Debt Agreements

Pursuant to the terms of the mortgage notes payable and the Unsecured Credit Agreement, the Company and/or the Operating Partnership are subject to certain financial loan covenants. The Company and/or the Operating Partnership was in compliance with all financial covenants of these loan agreement as of August 9, 2017.

The following summarizes the future principal repayment of the Company’s mortgage notes payable and unsecured credit facility as of June 30, 2017:

	Mortgage Note Payable		Unsecured Credit Facility		Total
Remaining 2017	$	226,844	$	9,232,184	$	9,459,028
2018		465,064		-		465,064
2019		482,054		-		482,054
2020		498,925		-		498,925
2021		7,068,308		-		7,068,308
2022		8,234,746		-		8,234,746
2023		9,658,294		-		9,658,295
Total principal	$	26,634,235	$	9,232,184	$	35,866,420

The following is a reconciliation of the components of interest expense for the three and six months ended June 30, 2017 and 2016:

	Three Months Ended June 30, 2016				Six Months Ended June 30, 2016
	2017		2016		2017		2016
Mortgage notes payable
Interest expense (1)	$	184,179	$	10,589	$	265,837	$	10,589
Amortization of deferred financing costs		24,998		1,155		35,386		1,155
Unrealized loss (gain) on interest rate swaps (see Note 5)		104,633		-		104,633		-
Unsecured credit facility
Interest expense		103,877		28,875		143,031		28,875
Amortization of deferred financing costs		481		31		1,118		31
Forfeited loan fee		20,000		-		20,000		-
Total interest expense	$	438,168	$	40,650	$	570,005	$	40,650

(1) As of June 30, 2017, no payments had yet been made with respect to the Company’s interest rate swaps. Accrued interest payable of $2,533 at June 30, 2017 represented the unsettled portion of the interest rate swaps for the period from origination of the interest note swap through June 30, 2017. The Company had  no swap agreements as of June 30, 2016.

15

PART I – FINANCIAL INFORMATION (continued)

ITEM 1 – Unaudited Condensed Consolidated Financial Statements (continued)

RW HOLDINGS NNN REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2017

(unaudited)

NOTE 5. INTEREST RATE SWAP DERIVATIVES

The primary goal of the Company’s risk management practices related to interest rate risk is to prevent changes in interest rates from adversely impacting the Company’s ability to achieve its investment return objectives. The Company does not enter into derivatives for speculative purposes.

The Company enters into interest rate swaps as a fixed rate payer to mitigate its exposure to rising interest rates on its variable rate mortgage notes payable. The value of interest rate swaps is primarily impacted by interest rates, market expectations about interest rates, and the remaining life of the applicable instrument. In general, increases in interest rates, or anticipated increases in interest rates, will increase the value of the fixed rate payer position and decrease the value of the variable rate payer position. As the remaining life of the interest rate swap decreases, the value of both positions will generally move towards zero.

During June 2017, the Company (or wholly owned limited liability company subsidiaries) entered into interest rate swap agreements with amortizing notational amounts relating to two of its mortgage notes payable. The following table summarizes the notional amount and other information related to the Company’s interest rate swaps as of June 30, 2017. The notional amount is an indication of the extent of the Company’s involvement in each instrument at that time, but does not represent exposure to credit, interest rate or market risks:

	June 30, 2017
Derivative Instruments	Number of Instruments	Notional Amount (i)		Reference Rate as of 6/30/2016	Weighted Average Fixed Pay Rate			Weighted Average Remaining Term
Interest Rate Swap Derivatives	2	$	10,710,000	One-month LIBOR + applicable spread/Fixed at 4.05%-4.34%		4.21	%	8.3 years

(i) The notional amount of the Company’s swaps decrease each month to correspond to the outstanding principal balance on the related mortgage. The maximum notional amount is shown above. The minimum notional amount (outstanding principal balance at the maturity date) as of June 30, 2017 was $9,083,700.

The following table sets forth the fair value of the Company’s derivative instruments as well as their classification in the consolidated balance sheets as of June 30, 2017.

		June 30, 2017
Derivative Instrument	Balance Sheet Location	Number of Instruments	Fair Value
Interest Rate Swaps	Liability – Interest rate swap derivatives, at fair value	2	$	(104,633	)

The change in fair value of a derivative instrument that is not designated as a cash flow hedge is recorded as interest expense in the accompanying consolidated statements of operations. None of the Company’s derivatives at June 30, 2017 were designated as hedging instruments; therefore the net realized loss recognized on interest rate swaps of $104,633 was recorded as an increase in interest expense for both the three and six months ended June 30, 2017.

16

PART I – FINANCIAL INFORMATION (continued)

ITEM 1 – Unaudited Condensed Consolidated Financial Statements (continued)

RW HOLDINGS NNN REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2017

(unaudited)

NOTE 6. FAIR VALUE DISCLOSURES

The fair value for certain financial instruments is derived using valuation techniques that involve significant management judgment. The price transparency of financial instruments is a key determinant of the degree of judgment involved in determining the fair value of the Company’s financial instruments. Financial instruments for which actively quoted prices or pricing parameters are available and for which markets contain orderly transactions will generally have a higher degree of price transparency than financial instruments for which markets are inactive or consist of non-orderly trades. The Company evaluates several factors when determining if a market is inactive or when market transactions are not orderly. The following is a summary of the methods and assumptions used by management in estimating the fair value of each class of financial instrument for which it is practicable to estimate the fair value:

Cash and cash equivalents, restricted cash, tenant receivables, due from affiliates, purchase and other deposits, prepaid expenses and other assets, accounts payable, accrued expenses and other liabilities and due to affiliates:  These balances approximate their fair values due to the short maturities of these items.

Derivative Instruments: The Company’s derivative instruments are presented at fair value in the accompanying consolidated balance sheet. The valuation of these instruments is determined using a proprietary model that utilizes observable inputs. As such, the Company classifies these inputs as Level 2 inputs. The proprietary model uses the contractual terms of the derivatives, including the period to maturity, as well as observable market-based inputs, including interest rate curves and volatility. The fair values of interest rate swaps are estimated using the market standard methodology of netting the discounted fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on an expectation of interest rates (forward curves) derived from observable market interest rate curves. In addition, credit valuation adjustments, which consider the impact of any credit risks to the contracts, are incorporated in the fair values to account for potential nonperformance risk.

Unsecured Credit Facility: The fair value of the Company’s Unsecured Credit Facility approximates its carrying value as the interest rates and other terms are comparable to those available in the market place for a similar credit facility.

Mortgage notes payable:  The fair value of the Company’s mortgage notes payable is estimated using a discounted cash flow analysis based on management’s estimates of current market interest rates for instruments with similar characteristics, including remaining loan term, loan-to-value ratio, type of collateral and other credit enhancements. Additionally, when determining the fair value of liabilities in circumstances in which a quoted price in an active market for an identical liability is not available, the Company measures fair value using (i) a valuation technique that uses the quoted price of the identical liability when traded as an asset or quoted prices for similar liabilities or similar liabilities when traded as assets or (ii) another valuation technique that is consistent with the principles of fair value measurement, such as the income approach or the market approach. The Company classifies these inputs as Level 3 inputs.

The following were the face value, carrying amount and fair value of the Company’s mortgage notes payable as of June 30, 2017 and December 31, 2016:

June 30, 2017						December 31,2016
Face value		Carrying value		Fair value		Face Value		Carrying Value		Fair Value
$	26,634,235	$	25,975,486	$	26,716,448	$	7,266,145	$	7,113,701	$	7,266,145

Disclosures of the fair values of financial instruments are based on pertinent information available to the Company as of June 30, 2017 and require a significant amount of judgment. The actual value could be materially different from the Company’s estimate of value.

17

PART I – FINANCIAL INFORMATION (continued)

ITEM 1 – Unaudited Condensed Consolidated Financial Statements (continued)

RW HOLDINGS NNN REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2017

(unaudited)

During the six months ended June 30, 2017, the Company measured the following assets and liabilities at fair value (in thousands):

Recurring Basis	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Interest rate swap liabilities	$	107,166	$	-	$	107,166	$	-

NOTE 7. RELATED PARTY TRANSACTIONS

The Company has entered into an agreement (the “Advisory Agreement”) with the Advisor. This agreement entitles the Advisor to specified fees upon the provision of certain services with regard to the investment of funds in real estate investments, the management of those investments, among other services, and the disposition of investments, as well as entitles the Advisor to reimbursement of organization and offering costs incurred by the Advisor or Sponsor on behalf of the Company, such as expenses related to the Registered Offering, and certain costs incurred by the Advisor or Sponsor in providing services to the Company. In addition, the Advisor is entitled to certain other fees, including an incentive fee upon achieving certain performance goals, as detailed in the Advisory Agreement. The Sponsor also serves as the sponsor for Rich Uncles REIT I. During the six months ended June 30, 2017 and 2016, no other business transactions occurred between the Company and Rich Uncles REIT I, other than described below or elsewhere herein, and those relating to the Company’s investment in Rich Uncles REIT I.

Pursuant to the terms of the agreement, summarized below are the related party costs incurred by the Company for the three and six months ended June 30, 2017:

	Three months ended			Six months ended							Three months ended		Six months ended
	June 30, 2017						June 30, 2017				June 30, 2016				December 31, 2016
	Incurred			Incurred			Receivable		Payable		Incurred		Incurred		Receivable		Payable
Expensed
Acquisition fees	$	-		$	-		$	-	$	-	$	474,122	$	474,122	$	-	$	-
Asset management fees (2)		196,856			308,154			-		260,692		7,566		7,566		-		29,577
Fees to affiliates		196,856			308,154							481,688		481,688
Property management fees*		622			622			-		622		-		-		-		-
Expense reimbursements from Sponsor (1)		(672,904	)		(1,360,930	)		643		-		-		-		79,862		-
Waiver of asset management fees (2)		(49,214	)		(77,039	)		-		-		-		-		-		-
Capitalized
Acquisition fees		882,971			1,483,571			13,711		-		-		-		-		274,200
Financing fees		-			87,450			-		-		-		-		-		-
Additional paid-in-capital
Reimbursable organizational and offering expenses (3)		529,991			1,138,121			-		17,297		-		-		-		79,645
Other
Costs reimbursable from Rich Uncles REIT I (4)		-			-			28,571		-		-		-		28,571		-
	$	888,322		$	1,579,949		$	42,925	$	278,611	$	481,688	$	481,688	$	108,433	$	383,422

* Property management fees are presented as property operating expenses.

18

PART I – FINANCIAL INFORMATION (continued)

ITEM 1 – Unaudited Condensed Consolidated Financial Statements (continued)

RW HOLDINGS NNN REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2017

(unaudited)

(1) The Company records payroll costs related to Company employees that answer questions from prospective shareholders. The Sponsor has agreed to reimburse the Company for these investor relations payroll costs which the Sponsor considers to be offering expenses in accordance with the Advisory Agreement.

(2) To the extent the Advisor elects, in its sole discretion to defer all or any portion of its monthly asset management fee, the Advisor will be deemed to have waived, not deferred, that portion up to 0.025% of the total investment value of the Company’s assets.  For the three and six months ended June 30, 2017, the Advisor waived $49,214 and $77,039, respectively, of asset management fees, which are not subject to future recoupment by the Advisor. No asset management fees were waived for the three or six months ended June 30, 2016.

(3) As of June 30, 2017, the Sponsor had incurred $4,452,858 of organizational and offering costs on behalf of the Company. However, the Company is only obligated to reimburse the Sponsor for such organizational and offering expenses to the extent of 3% of gross offering proceeds. The payable related to this obligation is reflected in “Due to affiliates” in the consolidated balance sheets.

(4) The Company incurred $28,571 of costs in conjunction with due diligence for a property acquisition which is owed to the Company from Rich Uncles REIT I and reflected in “Due from affiliates” in the consolidated balance sheets.

Organizational and Offering Expenses

Pursuant to the Advisory Agreement, the Company is obligated to reimburse the Sponsor or its affiliates for organizational and offering expenses (as defined by the Sponsor) paid by the Sponsor on behalf of the Company. The Company will reimburse the Sponsor for organizational and offering expenses up to 3.0% of gross offering proceeds. The Sponsor and affiliates will be responsible for any organizational and offering expenses to the extent they exceed 3.0% of gross offering proceeds. As of June 30, 2017, the Sponsor has incurred organizational and offering expenses in excess of 3.0% of the gross offering proceeds received by the Company. To the extent the Company has more gross offering proceeds from future shareholders, the Company will be obligated to reimburse the Sponsor. As the amount of future gross offering proceeds is uncertain, the amount the Company is obligated to reimburse to the Sponsor is uncertain. As of June 30, 2017, the Company has reimbursed the Sponsor $1,858,140 in organizational and offering expenses. The Company’s maximum liability for organizational and offering costs through June 30, 2017 was $1,875,437, of which $17,297 was payable as of June 30, 2017 and is included in “Due to Affiliates” in the consolidated balance sheet.

Investor relations payroll expense reimbursement from Sponsor

The Company employs investor personnel that answer inquiries from potential investors regarding the Company and/or its prospectus. The payroll expense associated with the investor relations personnel is reimbursed by the Sponsor. The Sponsor considers these payroll costs to be offering expenses. The total amount of such payroll expense reimbursements was $672,904 and $1,360,930 for the three and six months ended June 30, 2017.

Acquisition Fees

The Company shall pay the Advisor a fee in an amount equal 3.0% of Company’s contract purchase price of its properties, as defined, as acquisition fees. The total of all acquisition fees and acquisition expenses shall be reasonable, and shall not exceed 6.0% of the contract price of the property.  However, a majority of the directors (including a majority of the independent directors) not otherwise interested in the transaction may approve fees in excess of these limits if they determine the transaction to be commercially competitive, fair and reasonable to the Company. Acquisition fees incurred during the three and six months ended June 30, 2017 were $882,971 and $1,483,571.

19

PART I – FINANCIAL INFORMATION (continued)

ITEM 1 – Unaudited Condensed Consolidated Financial Statements (continued)

RW HOLDINGS NNN REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2017

(unaudited)

Asset Management Fee

The Company shall pay to the Advisor as compensation for the advisory services rendered to the Company, a monthly fee in an amount equal to 0.1% of the Company’s Average Invested Assets, as defined (the “Asset Management Fee”), as of the end of the preceding month. The Asset Management Fee shall be payable monthly on the last day of such month, or the first business day following the last day of such month. The Asset Management Fee, which must be reasonable in the determination of the Company’s independent directors at least annually, 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 Fee not paid as to any fiscal year shall be deferred without interest and may be paid in such other fiscal year as the Advisor shall determine.

Additionally, to the extent the Advisor elects, in its sole discretion, to defer all or any portion of its monthly Asset Management Fee, the Advisor will be deemed to have waived, not deferred, that portion of its monthly Asset Management Fee that is up to 0.025% of the total investment value of the Company’s assets. The total amount of Asset Management Fees incurred in the three and six months ended June 30, 2017 were $196,856 and $308,154, respectively, of which $49,214 and $77,039, respectively, was waived. Asset Management Fees payable at June 30, 2017 were $260,692.

Financing Coordination Fee

Other than with respect to any mortgage or other financing related to a property concurrent with its acquisition, if the Advisor or an affiliate provides a substantial amount of the services (as determined by a majority of the Company’s independent directors) in connection with the post-acquisition financing or refinancing of any debt that the Company obtains relative to a property, then the Company shall pay to the Advisor or such affiliate a financing coordination fee equal to 1.0% of the amount of such financing. Financing coordination fees incurred during the three and six months ended June 30, 2017 were $0 and $87,450, respectively.

Property Management Fees

If the Advisor or any of its affiliates provides a substantial amount of the property management services (as determined by a majority of the Company’s independent directors) for the Company’s properties, then the Company shall pay to the Advisor or such affiliate a property management fee equal to 1.5% of gross revenues from the properties managed. The Company also will reimburse the Advisor and any of its affiliates for property-level expenses that such person pays or incurs on behalf of the Company, including salaries, bonuses and benefits of persons employed by such person, except for the salaries, bonuses and benefits of persons who also serve as one of the Company’s executive officers or as an executive officer of such person. The Advisor or its affiliate may subcontract the performance of its property management duties to third parties and pay all or a portion of its property management fee to the third parties with whom it contracts for these services. For the three and six months ended June 30, 2017, Property Management Fees were $622 and $622. There were no property management fees incurred during the three and six months ended June 30, 2016.

Disposition Fees

For substantial assistance in connection with the sale of properties, the Company shall pay to its Advisor or one of its affiliates 3.0% of the contract sales price, as defined, of each property sold; provided, however, that if, in connection with such disposition, commissions are paid to third parties unaffiliated with our Advisor or its affiliates, the disposition fees paid to our Advisor, our Sponsor, their affiliates and unaffiliated third parties may not exceed the lesser of the competitive real estate commission or 6% of the contract sales price. There were no disposition fees incurred during the three and six months ended June 30, 2017 nor 2016.

20

PART I – FINANCIAL INFORMATION (continued)

ITEM 1 – Unaudited Condensed Consolidated Financial Statements (continued)

RW HOLDINGS NNN REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2017

(unaudited)

Leasing Commission Fees

If a property or properties of the Company becomes unleased and the Advisor or any of its affiliates provides a substantial amount of the services (as determined by a majority of the Company’s independent directors) in connection with the Company’s leasing of the property or properties to unaffiliated third parties, then the Company shall pay to the Advisor or such affiliate leasing commissions equal to 6.0% of the rents due pursuant to such lease for the first ten years of the lease term; provided, however (i) if the term of the lease is less than ten years, such commission percentage will apply to the full term of the lease and (ii) any rents due under a renewal of a lease of an existing tenant upon expiration of the initial lease agreement (including any extensions provided for thereunder) shall accrue a commission of 3.0% in lieu of the aforementioned 6.0% commission. To the extent that an unaffiliated real estate broker assists in such leasing services, any compensation paid by the Company to the Advisor or any of its affiliates will be reduced by the amount paid to such unaffiliated real estate broker. There were no leasing commission fees incurred during the three and six months ended June 30, 2017 nor 2016.

Other Operating Expense Reimbursement

Under the prospectus, total operating expenses of the Company are limited to the greater of 2% of average invested assets or 25% of net income for the four most recently completed fiscal quarters (2%/25% Limitation). If the Company exceeds the 2%/25% Limitation, the Advisor must reimburse the Company the amount by which the aggregate total operating expenses exceeds the limitation, or the Company must obtain a waiver from the Company’s conflicts committee. For purposes of determining the 2%/25% Limitation amount, “average invested assets” means the average monthly book value of the Company’s assets invested directly or indirectly in equity interests and loans secured by real estate during the 12-month period before deducting depreciation, reserves for bad debts or other non-cash reserves. “Total operating expenses” means all expenses paid or incurred by the Company, as determined by GAAP, that are in any way related to the Company’s operation including Asset Management 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, listing and registration of shares of the Company’s common stock; (b) interest payments; (c) taxes; (d) non-cash expenditures such as depreciation, amortization and bad debt reserves; (e) reasonable incentive fees based upon increases in NAV per share; (f) acquisition fees and acquisition expenses (including expenses, relating to potential investments that the Company does not close); and (h) disposition fees on the sale of real property and other expenses connected with the acquisition, disposition and ownership of real estate interests or other property (other than disposition fees on the sale of assets other than real property), including the costs of insurance premiums, legal services, maintenance, repair and improvement of real property.

Operating expense reimbursements for the four fiscal quarters ended June 30, 2017 exceeded the 2%/25% Limitation. The Company’s conflicts committee approved the operating expenses above the 2%/25% Limitation, as they determined that the relationship of the Company’s operating expenses to average invested assets were justified for the four fiscal quarters ended June 30, 2017 given the costs of operating a public company and the early stage of the Company’s operations.

NOTE 8. COMMITMENTS AND CONTINGENCIES

Economic Dependency

The Company depends on its Sponsor and its Advisor for certain services that are essential to the Company, including the sale of the Company’s shares of common stock, the identification, evaluation, negotiation, origination, acquisition and disposition of investments; management of the daily operations of the Company’s investment portfolio; and other general and administrative responsibilities. In the event that these companies are unable to provide the respective services, the Company will be required to obtain such services from other sources.

21

PART I – FINANCIAL INFORMATION (continued)

ITEM 1 – Unaudited Condensed Consolidated Financial Statements (continued)

RW HOLDINGS NNN REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2017

(unaudited)

Environmental

As an owner of real estate, the Company is subject to various environmental laws of federal, state and local governments. Although there can be no assurance, the Company is not aware of any environmental liability that could have a material adverse effect on its financial condition or results of operations. However, changes in applicable environmental laws and regulations, the uses and conditions of properties in the vicinity of the Company’s properties, the activities of its tenants and other environmental conditions of which the Company is unaware with respect to the property could result in future environmental liabilities.

Tenant Improvements

Pursuant to lease agreements, the Company has an obligation to pay for $2,113,737 in site and tenant improvements to be incurred at June 30, 2017. At June 30, 2017, the Company had $1,520,292 of restricted cash held to fund the improvements.

Legal Matters

From time to time, the Company may become party to legal proceedings that arise in the ordinary course of its business. Other than the below, the Company is not a party to any legal proceeding, nor is the Company aware of any pending or threatened litigation that could have a material adverse effect on the Company’s business, operating results, cash flows or financial condition should such litigation be resolved unfavorably.

The U.S. Securities and Exchange Commission (the “SEC”) is conducting an investigation related to the advertising and sale of securities by the Company in connection with the Registered Offering. The investigation is a non-public factfinding inquiry. It is neither an allegation of wrongdoing nor a finding that violations of law have occurred. In connection with the investigation, the Company and certain affiliates have received and responded to subpoenas from the SEC requesting documents and other information related to the Company and the Registered Offering. The SEC’s investigation is ongoing. The Company has cooperated and intends to continue to cooperate with the SEC in this matter. The Company is unable to predict the likely outcome of the investigation or determine its potential impact, if any, on the Company.

NOTE 9. SUBSEQUENT EVENTS

The Company evaluates subsequent events up until the date the Condensed Consolidated Financial Statements are issued.

Distributions

On July 11, 2017, the Company’s board of directors declared dividends based on daily record dates for the period June 1, 2017 through June 30, 2017 at a rate of $0.0019444 per share per day, or $344,139, on the outstanding shares of the Company’s common stock, which the Company paid on July 11, 2017. Of the $344,139 dividend, $278,380 was reinvested through the Company’s dividend reinvestment plan.

On August 10, 2017, the Company’s board of directors declared dividends based on daily record dates for the period July 1, 2017 through July 31, 2017 at a rate of $0.0018817 per share per day, or $371,708, on the outstanding shares of the Company’s common stock, which the Company paid on August 10, 2017. Of the $371,708 dividend, $303,083 was reinvested through the Company’s dividend reinvestment plan. 

22

PART I – FINANCIAL INFORMATION (continued)

ITEM 1 – Unaudited Condensed Consolidated Financial Statements (continued)

RW HOLDINGS NNN REIT, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2017

(unaudited)

Offering Status

Through August 10, 2017, the Company had sold 6,958,810 shares of common stock in the Registered Offering, for aggregate gross offering proceeds of $69,588,103, including 176,548 shares of common stock sold under its Registered DRP Offering for aggregate gross offering proceeds of $1,765,478.

Acquisitions

On July 20, 2017, through a wholly owned subsidiary, the Company acquired a 51,800 square foot industrial property in Richmond, VA, which it leases to Neighborcare Pharmacy of Virginia, LLC, a wholly owned subsidiary of Omnicare, Inc., a wholly owned subsidiary of CVS Health Corporation (“Omnicare”). The lease is guaranteed by Omnicare, Inc. The seller is not affiliated with the Company or the Advisor. The contract purchase price for the Omnicare property was $7,400,000 plus acquisition fees and closing costs of $281,862.

Debt Financing

On July 17, 2017, the Company obtained a $6,000,000 mortgage loan through a nonaffiliated lender. The loan is secured by the Northrop Grumman property. The mortgage loan has a fixed interest rate of 4.4% per annum and matures on March 2, 2021.

Redeemable common stock

For the period from July 1, 2017 through August 9, 2017, the Company redeemed 133,661 shares for $1,296,476.

Amendments to Charter

On August 11, 2017, the board of directors approved and adopted amendments to its charter, which became effective August 14, 2017, to increase the authorized number of shares of the Company’s common stock, $0.001 par value per share, from 200,000,000 to 400,000,000, and to rename and redesignate the authorized shares of the Company’s common stock, $0.001 par value per share, as “Class C” common stock, $0.001 par value per share. On August 11, 2017, the board of directors also approved and adopted Articles Supplementary, effective August 14, 2017, to reclassify and designate 100,000,000 shares of Class C common stock, $0.001 par value per share, as “Class S” common stock, $0.001 par value per share. The foregoing actions are intended to facilitate an offering by the Company of shares of Class S common stock exclusively to non-U.S. persons as defined under Rule 903 promulgated under the Securities Act of 1933 (the “Securities Act”) pursuant to an exemption from the registration requirements of the Securities Act under and in accordance with Regulation S of the Securities Act (the “Class S Offering”). Shares of the Company’s Class S common stock have similar features and rights as shares of the Company’s Class C common stock, including with respect to voting and liquidation, except that shares of Class S common stock offered in the Class S Offering may be sold through brokers or other persons who may be paid upfront and deferred selling commissions and fees.

Also on August 11, 2017, the board of directors approved and adopted a further amendment to the Company’s charter, which became effective August 14, 2017, to change the name of the Company from “Rich Uncles NNN REIT, Inc.” to “RW Holdings NNN REIT, Inc.”

In addition, on August 11, 2017, the board of directors approved, pursuant to Section 7.7.10 of Article 7 of the Company’s charter, an increase in the “Common Shares Ownership Limit”, as such term is defined therein, from 8.0% to 9.8% of the outstanding shares of common stock of the Company. On August 14, 2017, the Company filed a Certificate of Notice reflecting the change in the Common Shares Ownership Limit with the State Department of Assessments and Taxation of Maryland.

Amendments to Advisory Agreement

On August 11, 2017, the board of directors, and all members of the Conflicts Committee of the Board, which comprises all of its independent directors, approved the Company’s entry into a Second Amended and Restated Advisory Agreement (the “Restated Advisory Agreement”) by and among the Company, the Advisor and the Sponsor.

The Restated Advisory Agreement amends and restates the Amended and Restated Advisory Agreement by and among the Company, the Advisor and the Sponsor, dated as of January 17, 2017, in order to reflect, in addition to certain ministerial and conforming changes, (1) amendments to the description of the Advisor’s duties, (2) an expansion of the definition of “Large Investors” to encompass investors with aggregate subscriptions or purchases for at least $1 million in one or more securities offerings sponsored by the Sponsor and to allow the Company to include as Large Investors clients of one or more financial advisors whose clients collectively meet the foregoing requirement, (3) revisions to the terms of certain compensation payable to the Advisor, including rebates paid by the Advisor to Large Investors with respect to the asset management fee, subordinated participation fee and liquidation fee, and a reduction in the applicable percentage used to calculate the subordinated participation fee from 40% to 30%, and (4) conforming edits throughout the Restated Advisory Agreement in connection with the designation and reclassification of the Company’s Class C common stock and Class S common stock described above.

Class S Dividend Reinvestment Plan and Class S Share Repurchase Program

On August 11, 2017, the board of directors approved and adopted, in connection with the Class S Offering described above, (i) a Dividend Reinvestment Plan (the “Class S DRP”) applicable to shares of the Company’s Class S common stock, and (ii) a Share Repurchase Program (the “Class S Repurchase Program”) applicable to shares of the Company’s Class S common stock. The Class S DRP provides any holder of Class S common stock who elects to participate the ability to reinvest dividends and other distributions declared and paid in respect of such participant’s Class S shares to the purchase of additional Class S shares for such participant. The Class S Repurchase Program provides eligible holders of Class S common stock purchased from time to time in the Class S Offering with limited, interim liquidity by enabling them to present for repurchase all or a portion of their Class S shares to the Company. Holders of Class S common stock are required to hold their Class S shares for a minimum of one year before they can participate in the program. The Company will repurchase Class S shares based on the then-applicable NAV per share and the Class S share repurchase will be limited to 2% of the Company’s aggregate applicable NAV per month, up to 5% of its aggregate NAV per quarter, with respect to such Class S shares.

ITEM 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following “Management’s Discussion and Analysis of Financial Condition and Results of Operations” should be read in conjunction with the Company’s Condensed Consolidated Financial Statements and the Notes thereto contained in Part I of this Quarterly Report on Form 10-Q. See also “Forward Looking Statements” below. As used herein, “we,” “us,” and “our” refer to RW Holdings NNN REIT, Inc.

Forward-Looking Statements

Certain statements contained in this Quarterly Report on Form 10-Q of RW Holdings NNN REIT, Inc. (the “Company”), other than historical facts, may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We intend for all such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act, as applicable by law. Such statements include, in particular, statements about our plans, strategies, and prospects and are subject to certain risks and uncertainties, as well as known and unknown risks, which could cause actual results to differ materially from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of our performance in future periods. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “may,” “would,” “could,” “should,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “continue,” or other similar words. Forward-looking statements that were true at the time made may ultimately prove to be incorrect or false. We caution readers not to place undue reliance on forward-looking statements, which reflect our management’s view only as of the date this Quarterly Report on Form 10-Q is filed with the Securities and Exchange Commission (the “SEC”). Additionally, we undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results.

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

23

PART I – FINANCIAL INFORMATION (continued)

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

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

• We may be unable to renew leases, lease vacant space or re-lease space as leases expire on favorable terms or at all.

• We are subject to risks associated with tenant, geographic and industry concentrations with respect to our properties.

• Our properties, intangible assets and other assets may be subject to impairment charges.

• We could be subject to unexpected costs or unexpected liabilities that may arise from potential dispositions and may be unable to dispose of properties on advantageous terms.

• We are subject to competition in the acquisition and disposition of properties and in the leasing of our properties and we may be unable to acquire, dispose of, or lease properties on advantageous terms.

• We could be subject to risks associated with bankruptcies or insolvencies of tenants or from tenant defaults generally.

• We have substantial indebtedness, which may affect our ability to pay distributions, and expose us to interest rate fluctuation risk and the risk of default under our debt obligations.

• We may be affected by the incurrence of additional secured or unsecured debt.

• We may not be able to attain profitability.

• Cash for distributions to investors will be from net rental income (including sales of properties) or waiver or deferral of reimbursements to our Sponsor or fees paid to our Advisor.

• We may not generate cash flows sufficient to pay our distributions to stockholders or meet our debt service obligations.

• We may be affected by risks resulting from losses in excess of insured limits.

• We may fail to qualify as a REIT for U.S. federal income tax purposes.

• We are dependent upon our Advisor which has the right to terminate the advisory agreement upon 60 days’ written notice without cause or penalty.

The forward-looking statements contained in this Quarterly Report on Form 10-Q should be read in light of the risk factors identified above and the additional risks and uncertainties described in Part II, Item 1A of this Quarterly Report on Form 10-Q, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 and Item IA of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017.

Management’s discussion and analysis of financial condition and results of operations is based upon our unaudited Condensed Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of these financial statements requires our management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On a regular basis, we evaluate these estimates. These estimates are based on management’s historical industry experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.

Management’s Overview

We were formed on May 14, 2015 as a Maryland corporation. We believe that we were organized and have operated in a manner that enabled us to qualify as a REIT for federal income tax purposes beginning with our taxable year ended December 31, 2016 and we intend to continue to operate so as to remain qualified as a REIT for federal income tax purposes thereafter. If we meet the REIT qualification requirements, we generally will not be subject to federal income tax on the income that we distribute to our stockholders each year. If we fail to qualify for taxation as a REIT in any year after electing REIT status, our income will be taxed at regular corporate rates, and we may be precluded from qualifying for treatment as a REIT for the four-year period following our failure to qualify. Such an event could materially and adversely affect our net income and cash available for distributions to our stockholders.

We consider our Company to be a perpetual-life investment vehicle because we have no finite date for liquidation and no intention to list our shares of common stock for trading on a national securities exchange or over-the-counter trading market. Although we have registered a fixed amount of shares for the Registered Offering (as defined below), we intend to effectively conduct a continuous offering of an unlimited amount of our shares of common stock over an unlimited time period by conducting an uninterrupted series of additional public offerings, subject to regulatory approval of our filings for such additional offerings, and one or more private offerings of shares of our common stock. This perpetual-life structure is aligned with our overall objective of investing in real estate assets with a long-term view towards making regular cash distributions and generating capital appreciation.

24

PART I – FINANCIAL INFORMATION (continued)

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Subject to certain restrictions and limitations, our business is externally managed by our advisor, Rich Uncles NNN REIT Operator, LLC (our “Advisor”), a limited liability company wholly owned by our sponsor, Rich Uncles LLC (our “Sponsor”), pursuant to the Amended and Restated Advisory Agreement between us, our Advisor and our Sponsor (the “Advisory Agreement”). Our Advisor manages our operations and will manage our portfolio of core real estate properties and real estate related assets. Our Advisor also provides asset-management and other administrative services on our behalf. Our Advisor is paid certain fees as set forth in Note 7 to the Condensed Consolidated Financial Statements.

We have investor relations personnel, but all expenses are reimbursed by our Sponsor as part of the organizational and offering services they provide to us to manage our organization and the securities offerings and to provide administrative investor relations. However, our Sponsor is then entitled to include the reimbursement of such expenses as part of our reimbursement to them of organization and offering costs, but reimbursement shall not exceed an amount equal to 3% of gross offering proceeds.

On June 24, 2015, our Sponsor purchased 10,000 shares of common stock for $100,000 and became the initial stockholder. Our Sponsor purchased another 10,000 shares of common stock on December 31, 2015 for $100,000.

On July 15, 2015, we filed a registration statement on Form S-11 with the SEC to register an initial public offering to offer a maximum of 90 million in shares of common stock for sale to the public (the “Primary Offering”). We also registered a maximum of 10,000,000 shares of common stock pursuant to our distribution reinvestment plan (the “Registered DRP Offering” and together with the Primary Offering, the “Registered Offering”). The SEC declared our registration effective on June 1, 2016 and we commenced the sale of our shares to the public on July 20, 2016 at an initial offering price of $10.00 per shares. On August 11, 2017, our Board of Directors approved amendments to our charter to rename and redesignate our common stock as “Class C” common stock, which we will offer and sell in the Registered Offering. Commencing in August 2017, we plan to sell our shares of Class C common stock in the Registered Offering only to U.S. Persons as defined under Rule 903 promulgated under the Securities Act of 1933 (the “Securities Act”). We do not retain a broker-dealer to offer our shares of Class C common stock. Rather, we offer these shares directly to the public.

Also on August 11, 2017, our Board of Directors approved amendments to our charter to reclassify and designate a portion of the shares of common stock as “Class S” common stock. This reclassification of the Company’s common stock is intended to facilitate an offering by us of up to an additional 100,000,000 shares of Class S common stock exclusively to non-U.S. Person as defined under rule 903 promulgated under the Securities Act pursuant to an exemption from the registration requirements of the Securities Act under and in accordance with Regulation S of the Securities Act (the “Class S Offering” and, together with the Registered Offering, the “Offerings”). The Class S common stock has similar features and rights as the Class C common stock, including with respect to voting and liquidation, except that the Class S common stock offered in the Class S Offering may be sold through brokers or other persons who may be paid upfront and deferred selling commissions and fees.

We expect to use substantially all of the net proceeds from the Offerings to acquire and manage a portfolio of real estate investments. We intend to invest primarily in single tenant income-producing corporate properties which are leased to creditworthy tenants under long-term net leases. While our focus is on single tenant net leased properties, we plan to diversify our portfolio by geography, investment size and investment risk with the goal of acquiring a portfolio of income-producing real estate investments that provides attractive and stable returns to our stockholders. Although we are not limited as to the form our investments may take, our investments in real estate will generally constitute acquiring fee title or interest in entities that own and operate real estate. We will make acquisitions of our real estate investments directly through Rich Uncles NNN Operating Partnership, LP, a Delaware limited liability company (the “Operating Partnership”) or indirectly through limited liability companies or limited partnerships, including through other REITs, or through investments in joint ventures, partnerships, tenants-in-common, co-tenancies or other co-ownership agreements with other owners of properties, affiliates of our advisor or other persons.

Our investment objectives and policies may be amended or changed at any time by our board of directors. Although we have no plans at this time to change any of our investment objectives, our board of directors may change any and all such investment objectives, including our focus on single tenant properties, if it believes such changes are in the best interest of our stockholders.

Our Advisor will make recommendations on all investments to our board of directors. All proposed real estate investments must be approved by at least a majority of our board of directors.

As of June 30, 2017, the Company owned 14 properties in 7 states consisting of retail, office and industrial properties and an approximate 4.36% interest in an affiliated REIT. The net book value of these investments at June 30, 2017 was $86,267,707.

The Company

We are a publicly registered, non-exchange traded company dedicated to providing stockholders with dependable monthly dividends. The Company believes it is qualified and operates as a real estate investment trust, or REIT, which requires it to annually distribute at least 90% of its taxable income (excluding net capital gains) in the form of dividends to its stockholders. The Company’s monthly dividends are supported by the cash flow generated from real estate owned under long-term, net lease agreements with local, regional, and national commercial tenants.

25

PART I – FINANCIAL INFORMATION (continued)

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

At August 9, 2017, we owned a diversified portfolio:

· Of fifteen properties, of which eight properties are retail properties which represent 31.28% of the portfolio, of which five properties are office properties which represent 52.12% of the portfolio, and of which two properties are industrial properties which represents 16.60% of the portfolio (expressed as a percentage of annualized rental revenue);

· Fully leased with an occupancy rate of 100.0%;

· Leased to ten different commercial tenants doing business in nine separate industries;

· Located in 8 states;

· With approximately 516,656 square feet of aggregate leasable space;

· With an average leasable space per property of approximately 34,444 square feet; approximately 17,425 square feet per retail property, approximately 55,998 square feet per office property, and 48,633 square feet per industrial property; and

· With a balance of outstanding debt of approximately $35.8 million.

Of the fifteen properties in the portfolio, all, or 100.0%, are single-tenant properties. At August 9, 2017, all fifteen properties were leased with a weighted average remaining lease term (excluding rights to extend a lease at the option of the tenant) of approximately 7.9 years, based on rental income.

Investment Strategy

Our investment strategy is to acquire single-tenant retail, office, and industrial real estate leased to creditworthy tenants on long-term leases. Our ideal portfolio is comprised of 40% office, 40% industrial, and 20% retail, with greater than 50% of our real estate leased to investment grade tenants as determined by one of the big three credit rating agencies (Standard & Poor’s, Moody’s or Fitch Group). When identifying new properties for investment, we generally focus on acquiring high-quality real estate that tenants consider important to the successful operation of their business. We generally seek to acquire real estate that has the following characteristics:

· Properties that are freestanding, and commercially-zoned with a single tenant;

· Properties that are located in significant markets, which markets are identified and ranked based on several key demographic and real estate specific metrics such as population growth, income, unemployment, job growth, GDP growth, rent growth, and vacancy rates;

· Properties that are located in strategic locations critical to generating revenue for the tenants that occupy them (i.e., the tenants need the properties in which they operate in order to conduct their businesses);

· Properties that are located within attractive demographic areas relative to the business of our tenants and are generally fungible and have good visibility and easy access to major thoroughfares;

· Properties with rental or lease payments that approximate or are lower than market rents; and

· Properties that can be purchased with the simultaneous execution or assumption of long-term, net lease agreements, offering both current income and the potential for future rent increases.

26

PART I – FINANCIAL INFORMATION (continued)

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

See Note 1 to the Condensed Consolidated Financial Statements for further information on our business and organization.

Liquidity and Capital Resources

The Company’s proceeds from shares sold have been, and will continue to be, primarily for (i) property acquisitions; (ii) capital expenditures; and (iii) payment of principal on its outstanding indebtedness. Our cash needs for the purchase of real estate properties and other real estate investments will be funded primarily from the sale of our shares or from debt proceeds.

At June 30, 2017, the outstanding principal balance of the Company’s mortgage notes payable was $26,634,235 and the Company’s outstanding balance on the Company’s unsecured credit facility with Pacific Mercantile Bank was $9,232,184. This unsecured credit facility has a maturity date of October 28, 2017. We are negotiating the extension of the maturity date of this credit facility and we expect to complete this process prior its current October 28, 2017 maturity date. See Note 4 to the Condensed Consolidated Financial Statements for additional information regarding our outstanding indebtedness.

Portfolio Information

Our real estate investments were as follows:

	As of
	June 30, 2017		December 31, 2016		June 30, 2016
Number of Properties:
Retail		8		7		1
Office		5		1		1
Industrial		1		1		-
Total		14		9		2
Leasable Square Feet:
Retail		139,403		68,443		15,120
Office		279,988		63,000		63,000
Industrial		45,465		45,465		-
Total		464,856		176,908		78,120

Cash Flow Summary

The following table summarizes our cash flow activity for the six months ended June 30:

	2017			2016
Net cash provided by operating activities	$	1,431,562		$	56,440
Net cash used in investing activities	$	(52,598,914	)	$	(17,731,000	)
Net cash provided by financing activities	$	51,894,662		$	18,148,534

Cash Flows from Operating Activities

As of June 30, 2017, we owned fourteen properties and an investment in an affiliated REIT. During the six months ended June 30, 2017, net cash provided by operating activities was $1,431,562. We expect that our cash flows from operating activities will increase in future periods as a result of anticipated future acquisitions of real estate and the related operations from such investments.

As of June 30, 2016, we owned two properties and an investment in an affiliated REIT. During the six months ended June 30, 2016, net cash provided by operating activities was $56,440.

27

PART I – FINANCIAL INFORMATION (continued)

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Cash Flows from Investing Activities

Net cash used in investing activities was $52,598,914 for the six months ended June 30, 2017 and consisted of the following:

· $49,134,241 for the acquisition of five properties;

· $1,771,482 for payment of acquisition fees to affiliate;

· $1,500,000 for refundable purchase deposits; and

· $193,191 of additions to real estate investments.

Net cash used in investing activities was $17,731,000 for the six months ended June 30, 2016 and consisted of the following:

· $15,731,000 for the acquisition of three properties; and;

· $2,000,000 for investment in Rich Uncles REIT I.

Cash Flows from Financing Activities

Net cash provided by financing activities was $51,894,662 for the six months ended June 30, 2017 and consisted primarily of the following:

· $36,295,673 of proceeds from issuance of common stock and investor deposits offset by payments of offering costs of $1,200,469;

· $33,140,000 from borrowings from our unsecured credit facility and payments on our unsecured credit facility of $34,065,618;

· Proceeds from mortgage notes payable of $19,454,988, offset by principal payments of $86,898 and deferred financing costs of $541,691;

· $723,904 used to repurchase of shares under the share repurchase plan;

· $252,319 of cash distributions ($1,311,503 of total distributions of which $1,059,184 was reinvested through the Company’s dividend reinvestment program); and

· $125,100 of refundable loan deposits.

Net cash provided by financing activities was $18,148,534 for the six months ended June 30, 2016 and consisted primarily of the following:

· $11,000,000 from borrowings from our unsecured credit facility; and

· Proceeds from mortgage notes payable of $7,319,700 offset by $0 principal payments and deferred financing costs of $171,166.

Capital Resources

Generally, cash needs for property acquisitions, debt payments, capital expenditures, and other investments will be funded by the Offerings and bank borrowings, and to a lesser extent, by internally generated funds. Cash needs for operating and interest expenses and distributions will generally be funded by internally generated funds. If available, future sources of capital include proceeds from the Offerings, secured or unsecured borrowings from banks or other lenders, proceeds from the sale of properties, as well as undistributed funds from operations.

Results of Operations

Our results of operations through June 30, 2017 are not indicative of those expected in future periods as we are continuing to raise capital through the Offerings and acquire additional properties.

The Company owned nine properties and an approximate 4.36% interest in an affiliated REIT at December 31, 2016. The Company acquired five additional properties in 2017 with three of those within the three months ended June 30, 2017. We expect that rental income, tenant reimbursements, depreciation and amortization expense, interest expense and asset management fees to affiliates to each increase in future periods as a result of owning the five properties acquired in 2017 for an entire period and anticipated future acquisitions of real estate investments.

Comparison of the Three and Six Months ended June 30, 2017 to the Three and Six Months ended June 30, 2016

Rental Income

Rental income for the three and six months ended June 30, 2017 was $1,366,901 and $2,063,595, respectively, and $41,466 and $41,466 for the three and six months ended June 30, 2016, respectively. The annualized rental income of the properties owned as of June 30, 2017 was $6,628,868.

28

PART I – FINANCIAL INFORMATION (continued)

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Tenant Recoveries 

Tenant recoveries were $362,141 and $525,646 for the three and six months ended June 30, 2017, respectively, and $0 and $0 for the three and six months ended June 30, 2016. Pursuant to most of our lease agreements, tenants are required to pay all or a portion of the property operating expenses.

Fees to Affiliate

Expensed acquisition fees and management fees to affiliate for the three and six months ended June 30, 2017 were $196,856 and $308,154, respectively, and $481,688 and $481,688 for the three and six months ended June 30, 2016, respectively. Upon adopting ASU 2017-01 on October 1, 2016, acquisition fees were capitalized. Therefore, the 2017 acquisition fees were capitalized.

The asset management fees are equal to 1.2% per annum of the Company’s Average Invested Assets. Of the asset management fees, $49,214 and $77,039 of such fees were waived for the three and six months ended June 30, 2017, respectively. No asset management fees were waived for the three and six months ended June 30, 2016.

There were no disposition fees to affiliate in the three and six months ended June 30, 2017 or 2016.

Property management fees to affiliates for the three and six months ended June 30, 2017 were $622 and $622, respectively. There were no property management fees to affiliate in the three and six months ended June 30, 2016.

General and Administrative

General and administrative expenses for the three and six months ended June 30, 2017 were $831,179 and $2,018,022, respectively and for the three and six months ended June 30, 2016 were $6,290 and $6,380, respectively.

Depreciation and Amortization

Depreciation and amortization expense for the three and six months ended June 30, 2017 was $725,419 and $1,156,278, respectively, and for the three and six months ended June 30, 2016, was $33,489 and $33,489, respectively. The purchase price of the acquired properties is allocated to tangible assets, identifiable intangibles and assumed liabilities and depreciated or amortized over their estimated useful lives.

Interest Expense

Interest expense for the three and six months ended June 30, 2017 was $438,168 and $570,005, respectively and for the three and six months ended June 30, 2016 was $40,650 and $40,650, respectively. See Note 5 for the detail of the components of interest expense.

Property Expenses

Property expenses for the three and six months ended June 30, 2017 were $375,963 and $555,741, respectively, and for the three and six months ended June 30, 2016, were $0 and $0, respectively. These expenses primarily relate to property taxes and repairs and maintenance expenses.

Other Income

Interest income for the three and six months ended June 30, 2017 was $613 and $888, respectively. Interest income for the three and six months ended June 30, 2016 was $0 and $0, respectively.

29

PART I – FINANCIAL INFORMATION (continued)

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Equity in earnings from Rich Uncles REIT I for the three and six months ended June 30, 2017 was $159,399 and $167,356, respectively. This represents the Company’s 4.36% interest in the operations of Rich Uncles REIT I and includes the recognition of certain amounts related to previous periods as described in Note 2. See Note 2. There were no equity in earnings for the three and six months ended June 30, 2016 as the Company made its initial investment in Rich Uncles REIT I on June 28, 2016.

New Accounting Pronouncements

See Note 2 to the Notes to the Condensed Consolidated Financial Statements.

Organizational and Offering Costs

Our organizational and offering costs are paid by our Sponsor on our behalf. Offering costs include all expenses incurred in connection with the Offerings, including investor relations payroll expenses. Other organizational and offering costs include all expenses incurred in connection with our formation, including, but not limited to legal fees, federal and state filing fees, and other costs to incorporate.

During the Offerings, we are obligated to reimburse our Sponsor for organizational and offering costs related to the Offerings paid by them on our behalf provided such reimbursement would not exceed 3% of gross offering proceeds raised in the Offerings as of the date of the reimbursement.

As of June 30, 2017, the Company had not incurred any organizational and offering costs related to the Offering as all such costs had been funded by our Sponsor. As a result, these organizational and offering costs related to the Offering are not recorded in our financial statements as of June 30, 2017 other than to the extent of 3% of the gross offering proceeds. As of June 30, 2017, the Sponsor had incurred $4,452,858 of organizational and offering costs on behalf of the Company and the Company has reimbursed the Sponsor $1,858,140 in organizational and offering expenses. The Company’s maximum liability for organizational and offering costs through June 30, 2017 was $1,875,437, of which $17,297 was payable as of June 30, 2017 and is included in “Due to Affiliates” in the consolidated balance sheet.

See Note 7 to the Condensed Consolidated Financial Statements for additional information.

Distributions

During our offering stage, when we may raise capital more quickly than we acquire income producing assets, and from time to time during our operational state, we way not pay distributions from our cash flow from operating activities, in which case distributions may be paid in whole or in part from the waiver or deferral of fees otherwise due to our Advisor, if so elected by our Advisor. Historically, the sources of cash used to pay our distributions have been from net rental income received and the waiver and deferral of management fees. 

Distributions declared, distributions paid and cash flow used in operations were as follows):

									Cash flows
			Total						Provided by (used in)
	Total		distributions						provided by
	distributions		declared per		Distributions paid				Operating
Period	declared		share		Cash		Reinvested		Activities
First Quarter 2016	$	-	$	-	$	-	$	-	$	(91	)
Second Quarter 2016		-		-		-		-		56,530
Third Quarter 2016		12,078		0.175		4,852		7,226		(103,690	)
Fourth Quarter 2016 (1)		159,083		0.175		41,313		117,770		(42,365	)
First Quarter 2017		486,862		0.175		100,126		386,736		182,764
Second Quarter 2017		824,641		0.175		152,193		672,448		1,248,798
Totals	$	1,482,664	$	0.700	$	298,484	$	1,184,180	$	1,341,946

(1) Includes the reclassification of $37,554 of distributions received in the fourth quarter of 2016 from our investment in Rich Uncles REIT I as a result of retroactively adopting ASU 2016-15.

30

PART I – FINANCIAL INFORMATION (continued)

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Distributions are paid on a monthly basis. In general, distributions for record dates as of the end of a given month are paid on or about the 10th of the following month. Distributions were declared and paid based on daily record dates at rates per share per day as follows:

Distribution Period	Rate per Share per Day		Declaration Date	Payment Date
June 15 (date of purchase of first property)-30	$	0.00180556	July 5, 2016	July 11, 2016
July 1-31	$	0.00174731	August 10, 2016	August 11, 2016
August 1-31	$	0.00174731	September 7, 2016	September 12, 2016
September 1-30	$	0.00194440	October 7, 2016	October 11, 2016
October 1-31	$	0.00188170	November 9, 2016	November 10, 2016
November 1-30	$	0.00194440	December 12, 2016	December 12, 2016
December 1-31	$	0.00188170	January 10, 2017	January 10, 2017
January 1-31	$	0.00188170	February 10, 2017	February 10, 2017
February 1-28	$	0.00208333	March 10, 2017	March 10, 2017
March 1-31	$	0.00188170	April 10, 2017	April 10, 2017
April 1-30	$	0.00194440	May 10, 2017	May 10, 2017
May 1-31	$	0.00188170	June 10, 2017	June 10, 2017
June 1-30	$	0.00194440	July 11, 2017	July 11, 2017
July 1-31	$	0.00188170	August 10, 2017	August 10, 2017

Going forward, we expect our board of directors to continue to declare cash distributions based on daily record dates and to pay these distributions on a monthly basis, and after our offering stage to continue to declare distributions based on a single record date as of the end of the month, and to pay these distributions on a monthly basis. Cash distributions will be determined by our board of directors based on our financial condition and such other factors as our board of directors deems relevant. We have not established a minimum dividend or distribution level, and our charter does not require that we make dividends or distributions to our stockholders other than as necessary to meet REIT qualification requirements.

Properties

As of June 30, 2017, we owned fourteen properties encompassing 464,856 rentable square feet in seven states and an investment in an affiliated REIT. We have been in the offering state of our life cycle and will continue to acquire assets that adhere to our investment criteria with proceeds from the sale of our shares and financing proceeds. More detail about our properties can be found in Note 3 to the Condensed Consolidated Financial Statements.

Recent Market Conditions

Beginning in late 2007, domestic and international financial markets experienced significant disruptions that severely impacted the availability of credit and contributed to rising costs associated with obtaining credit. Financial conditions affecting commercial real estate have improved and continue to improve, as low treasury rates and increased lending from banks, insurance companies and commercial mortgage backed securities (“CMBS”) conduits have increased lending activity. Nevertheless, the debt market remains sensitive to the macro environment, such as Federal Reserve policy, market sentiment or regulatory factors affecting the banking and CMBS industries. While we expect that financial conditions will remain favorable, if they were to deteriorate we may experience more stringent lending criteria, which may affect our ability to finance certain property acquisitions or refinance any debt at maturity. Additionally, for properties for which we are able to obtain financing, the interest rates and other terms on such loans may be unacceptable. We expect to manage the current mortgage lending environment by considering alternative lending sources, including securitized debt, fixed rate loans, borrowings on a line of credit, short-term variable rate loans, assumed mortgage loans in connection with property acquisitions, interest rate lock or swap agreements, or any combination of the foregoing.

31

PART I – FINANCIAL INFORMATION (continued)

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Commercial real estate fundamentals continue to strengthen, as a moderate pace of job creation has supported gains in office absorption, retail sales and warehouse distribution. Although commercial property construction activity has increased, it remains near historic lows; as a result, incremental demand growth has helped to reduce vacancy rates and support modest rental growth. Improving fundamentals have resulted in gains in property values.

Election as a REIT

We believe we will qualify and intend to elect to be taxed as a REIT for federal income tax purposes under the Code beginning with the taxable year ended December 31, 2016. To qualify and maintain status as a REIT, we must meet certain requirements relating to our organization, sources of income, nature of assets, distributions of income to our stockholders and recordkeeping. As a REIT, we generally would not be subject to federal income tax on taxable income that we distribute to our stockholders so long as we distribute at least 90% of our annual taxable income (computed without regard to the dividends paid deduction and excluding net capital gains).

If we fail to qualify as a REIT for any reason in a taxable year and applicable relief provisions do not apply, we will be subject to tax, including any applicable alternative minimum tax, on our taxable income at regular corporate rates. We will not be able to deduct distributions paid to our stockholders in any year in which we fail to qualify as a REIT. We also will be disqualified for the four taxable years following the year during which qualification is lost, unless we are entitled to relief under specific statutory provisions. Such an event could materially adversely affect our net income and net cash available for distribution to stockholders. However, we believe that we are organized and operate in such a manner as to qualify for treatment as a REIT for federal income tax purposes. No provision for federal income taxes has been made in our accompanying Condensed Consolidated Financial Statements. We will be subject to certain state and local taxes related to the operations of properties in certain locations. We are subject to certain state and local taxes related to the operations of properties in certain locations, which have been provided for in our accompanying Condensed Consolidated Financial Statements.

Critical Accounting Policies and Estimates

Our accounting policies have been established to conform with GAAP. The preparation of financial statements in conformity with GAAP requires us to use judgment in the application of accounting policies, including making estimates and assumptions. These judgments affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. If our judgment or interpretation of the facts and circumstances relating to various transactions had been different, it is possible that different accounting policies would have been applied, thus resulting in a different presentation of the financial statements. Additionally, other companies may utilize different estimates that may impact comparability of our results of operations to those of companies in similar businesses. A discussion of the accounting policies that management considers critical in that they involve significant management judgments, assumptions and estimates is included in our Annual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC. There have been no significant changes to our policies during 2017, except as disclosed in Note 2 of the Notes to the Condensed Consolidated Financial Statements.

Commitments and Contingencies

We may be subject to certain commitments and contingencies with regard to certain transactions. See Note 8 to the Condensed Consolidated Financial Statements for further detail.

Related-Party Transactions and Agreements

We have entered into an agreement with our Advisor whereby we have agreed to pay certain fees to, or reimburse certain expenses of, our Advisor or its affiliates, such as acquisition fees and expenses, organization and offering costs, asset management fees, and reimbursement of certain operating costs. See Note 7 to the Condensed Consolidated Financial Statements and the Company’s 2016 Annual Report on Form 10-K for a further explanation of the various related-party transactions, agreements and fees.

32

PART I – FINANCIAL INFORMATION (continued)

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Subsequent Events

Certain events occurred subsequent to June 30, 2017 through the filing date of this Quarterly Report on Form 10-Q. See Note 8 to the Condensed Consolidated Financial Statements for further explanation.

Recent Accounting Pronouncements

See Note 2 to the Condensed Consolidated Financial Statements for further explanation.

Off-Balance Sheet Arrangements

As of June 30, 2017, we had no material off-balance sheet arrangements that had or are reasonably likely to have a current or future effect on our financial condition, results of operations, liquidity or capital resources.

ITEM 3. Quantitative and Qualitative Disclosure about Market Risk

We are exposed to the effects of interest rate changes as a result of borrowings used to maintain liquidity and to fund the acquisition and refinancing of our real estate investment portfolio and operations. Our profitability and the value of our real estate investments may be adversely affected during any period as a result of interest rate changes. Our interest rate risk management objectives are to limit the impact of interest rate changes on earnings, prepayment penalties and cash flows and to lower overall borrowing costs. We may manage interest rate risk by maintaining a ratio of fixed rate, long-term debt such that variable rate exposure is kept at an acceptable level or we may utilize a variety of financial instruments, including interest rate caps, floors, and swap agreements, in order to limit the effects of changes in interest rates on our operations. When we use these types of derivatives to hedge the risk of interest-earning assets or interest-bearing liabilities, we may be subject to certain risks, including the risk that losses on a hedge position will reduce the funds available for the payment of distributions to our stockholders and that the losses may exceed the amount we invested in the instruments.

As of June 30, 2017, the fair value of our debt was $26,716,448 and the outstanding principal balance of our debt was $26,634,235. The fair value estimate of our debt is calculated using a discounted cash flow analysis utilizing rates we would expect to pay for debt of a similar type and remaining maturity if the loans were originated as of June 30, 2017. With respect to our fixed rate instruments, we do not expect that fluctuations in interest rates, and the resulting change in fair value of our fixed rate instruments, would have a significant impact on our ongoing operations.

Conversely, movements in interest rates on our variable rate debt would change our future earnings and cash flows, but not significantly affect the fair value of those instruments. However, changes in required risk premium would result in changes in the fair value of variable rate instruments. As of June 30, 2017, we were exposed to market risks related to fluctuations in interest rates on $10,710,000 of variable rate debt outstanding, after giving consideration to the impact of interest rate swap agreements on approximately $10,710,000 of our variable rate debt. Based on interest rates as of June 30, 2017, if interest rates were 100 basis points higher during the 12 months ending June 30, 2017, interest expense on our variable rate debt would increase by $106,800. As of June 30, 2017, one-month LIBOR was 1.22% and if this index was reduced to 0% during the 12 months ending June 30, 2017, interest expense on our variable rate debt would decrease by $130,711.

The weighted average interest rates of our fixed rate debt and variable rate debt as of June 30, 2017 were 4.27% and 4.27% respectively. The weighted-average interest rate represents the actual interest rate in effect as of June 30, 2017 (consisting of the contractual interest rate and the effect of interest rate swaps and floors, if applicable), using interest rate indices as of June 30, 2017, were applicable.

33

PART I – FINANCIAL INFORMATION (continued)

ITEM 4. Controls and Procedures

Disclosure Controls and Procedures

As of the end of the period covered by this report, management, including our principal executive officer and principal financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures. 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 processed, recorded, summarized and reported within the time periods specified I the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Based upon, and as of the date of, the evaluation, our principal executive officer and principal financial officer concluded that the disclosure controls and procedures were not effective as of June 30, 2017 because of material weaknesses in our internal control over financial reporting described in Item 9A of our Annual Report on Form 10-K for the year ended December 31, 2016.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) that occurred during the three months ended June 30, 2017 that have materially affected, or are reasonably likely to affect our internal control over financial reporting.

Remediation Plan

In connection with the audit of our consolidated financial statements for the year ended December 31, 2016, material weaknesses in our internal control over financial reporting were identified as previously disclosed in Item 9A of our Annual Report on Form 10-K for the year ended December 31, 2016. The material weaknesses identified related to (1) the lack of sufficient qualified resources to be able to produce accurate and complete financial statements and disclosures in a timely manner and (2) lack of established processes relating to the preparation and review of analyses and reconciliations necessary to execute a timely financial close resulting in accurate financial information. Management, and our Board of Directors, is committed to remediating the material weaknesses through hiring additional qualified resources, continued training of personnel, improving the structure and timeliness of our accounting close process and continuing to enhance our financial review controls. Accordingly, management is in the process of developing and implementing a plan to remediate the deficiencies in internal control described in our Annual Report on Form 10-K. Specifically:

-Management has begun an evaluation of the resources required to be able to produce accurate and complete financial statements and disclosures in a timely manner.

-Management has begun to establish processes related to the preparation and review of analyses and reconciliations necessary to execute a timely financial close resulting in accurate financial information.

We intend to execute our remediation plan as soon as feasible. We will test the effectiveness of the new controls and after they operate effectively for a sufficient period of time, we will consider the material weaknesses remediated. There is no assurance, however, that the new controls will remediate the material weaknesses or ensure that the Company’s internal control over financial reporting will be effective in the future. If we are unable to remediate these material weaknesses, we may not be able to timely file our periodic reports with the SEC which will have a material adverse effect on our ability to provide accurate financial information.

PART II – OTHER INFORMATION

Item 1.         Legal Proceedings

The information disclosed under Legal Matters in Note 8 to the Condensed Consolidated Financial Statements is incorporated herein by reference.

Item 1A.      Risk Factors

There have been no material changes to the risk factors set forth under “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2016, and Quarterly Report on Form 10-Q for the quarter ended March 31, 2017.

34

PART II – OTHER INFORMATION (continued)

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

During the six months ended June 30, 2017, we issued 6,500 shares to the Company’s directors for their services as board members. Such issuance was made in reliance on the exemption from registration under Rule 4(a)(2) of the Securities Act. During the six months ended June 30, 2017, we did not otherwise sell or issue any equity securities in any transaction that was not registered under the Securities Act.

Use of Proceeds from Registered Securities

On June 1, 2016, our Registration Statement on Form S-11 (File No. 333-205684) (the “Registration Statement”), covering an initial public offering to offer a maximum of 90,000,000 shares of common stock for sale to the public (the “Primary Offering”), was declared effective under the Securities Act. Pursuant to the Registration Statement, we also registered a maximum of 10,000,000 shares of common stock pursuant to our distribution reinvestment plan (the “DRP Offering” and together with the Primary Offering, the “Registered Offering”).

The Registered Offering commenced on July 20, 2016 and will terminate on June 29, 2018. We expect to sell the shares of common stock offered in the Registered Offering over this two-year period. We intend to continue to offer shares beyond June 29, 2018 and in order to do so it will be necessary to file a new registration statement with the SEC to continue offering shares. We will also need to renew the Registration Statement or file a new registration statement in many states to continue the Registered Offering. We may terminate the Registered Offering at any time. Our board of directors will adjust the $10.00 per share initial offering price of the shares of common stock offered and sold pursuant to the Registered Offering during the course of the Registered Offering as described in the Registration Statement, as amended.

As of June 30, 2017, we had sold 6,231,455 shares of common stock in the Registered Offering for gross proceeds of $62,314,551, including 118,418 shares of common stock sold under our Registered DRP Offering. See Note 7 to the Notes to the Condensed Consolidated Financial Statements for information regarding certain reimbursements paid to our Sponsor and our Advisor.

Net proceeds available for investment after the payment of the organizational and offering costs described above were approximately $60,639,114. A portion of these proceeds, along with proceeds from debt financing, were used to make approximately $82.7 million of investments in real estate properties, including the purchase price of our investments, deposits paid for future acquisitions, acquisition fees and expenses, and costs of leveraging each real estate investment.

See Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations —Distributions for a description of the sources that have been used to fund our distributions.

Issuer Redemptions of Equity Securities

During the three months ended June 30, 2017, we fulfilled repurchase requests and repurchased shares of our common stock pursuant to our share repurchase program as follows:

	Total number of Shares Requested to be Repurchased (1)		Total Number of Shares Repurchased During the Month		Average Price Paid per Share		Dollar Value of Shares Available That May Be Repurchased Under the Program (2)
January 2017		1,788		1,800	$	9.70	$	201,582
February 2017		18,511		1,788	$	9.70	$	309,282
March 2017		17,457		18,511	$	9.70	$	152,073
April 2017		21,152		17,457	$	9.70	$	115,774
May 2017		13,919		21,152	$	9.70	$	221,886
June 2017		32,028		13,919	$	9.70	$	138,429

(1) We generally repurchase shares approximately 5 days following the end of the applicable month in which requests were received.

35

PART II – OTHER INFORMATION (continued)

(2) Maximum amount that may be repurchased is limited to 5% of the weighted average outstanding shares in the prior 12 months less the actual shares repurchased during same twelve month period. The dollar value is as of the last day of the month presented. The dollar value is calculated as (1)  the maximum number of shares that can be repurchased (5% of the weighted average number of shares outstanding during the prior twelve months (or a shorter period if the Company has not been selling shares for twelve months) reduced by the number of shares already repurchased multiplied by (2) the repurchase price (which is 97% of  the $10.00 per share offering price for shares held by the stockholder for less than a year (which would be all of the shares through June 30, 2017)). Repurchase price is increased if the shares have been held for a year or more, two years or more and three years or more. Furthermore, once the Company has published its NAV, the NAV per share is used in the calculation in place of the per share offering price. If the Company determines that sufficient funds aren’t available to fund the share repurchase program, it has the ability to repurchase the number of shares that it believes it has sufficient funds to repurchase. In addition, the Company’s board of directors may amend, suspend or terminate the share repurchase program without stockholder approval upon 30 days’ notice.  The Company’s board of directors may amend, suspend or terminate the share repurchase program due to changes in law or regulation, or if the board of directors becomes aware of undisclosed material information that it believes should be publicly disclosed before shares are repurchased.

We currently intend to determine our NAV and NAV per share annually in January of each year as of December 31 of the prior year, beginning in January 2018 and calculated as of December 31, 2017. In addition, we may update our NAV at any time between our annual calculations of NAV to reflect significant events that we have determined have had a material impact on NAV. We will report the NAV per share of our common stock (a) in a Current Report on Form 8-K or in our annual or quarterly reports, all publicly filed with the SEC, or (b) in a separate written notice to the stockholders. During our primary offering stage, we would also include this information in a prospectus supplement or post-effective amendment to the registration statement, as required under federal securities laws. We will also provide information about our NAV per share on our website (such information may be provided by means of a link to our public filings on the SEC’s website, www.sec.gov) and on our toll-free information line: (1-855-742-4862). In the event that our NAV and NAV per share change during the year, we will publish our new NAV per share no later than ten business days prior to the second-to-last business day of the month in which such adjustment occurs.

Item 3.         Defaults Upon Senior Securities

No events occurred during the six months ended June 30, 2017 that would require a response to this item.

Item 4.        Mine Safety Disclosures

Not applicable.

Item 5.        Other Information

No events occurred during the six months ended June 30, 2017 that would require a response to this item.

Item 6.        Exhibits

The exhibits listed on the Exhibit Index (following the signatures section of this Quarterly Report on Form 10-Q) are included herewith, or incorporated herein by reference.

36

SIGNATURES

Pursuant to the requirements Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.

RW Holdings NNN REIT, Inc.
(Registrant)
By:	/s/ HAROLD HOFER
Name:	Harold Hofer
Title:	Chief Executive Officer
By:	/s/ JEAN HO
Name:	Jean Ho
Title:	Chief Financial Officer (principal financial officer and accounting officer)

Date: August 15, 2017

37

EXHIBIT INDEX

The following exhibits are included, or incorporated by reference, in this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2017 (and are numbered in accordance with Item 601 of Regulation S-K).

Exhibit	Description
3.1	Articles of Amendment and Restatement of the Articles of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Pre-Effective Amendment No. 8 to the Registration Statement on Form S-11 (File No. 333-205684) filed with the Securities and Exchange Commission on May 23, 2016)
3.2*	Articles of Amendment to the Articles of Incorporation of the Company to increase the authorized number of shares of the Company’s stock
3.3*	Articles of Amendment to the Articles of Incorporation of the Company to change the name and designation of the Company’s stock
3.4*	Articles of Amendment to the Articles of Incorporation of the Company to change the name of the Company to RW Holdings NNN REIT, Inc.
3.5*	Articles Supplementary of the Company reclassifying 100,000,000 unissued shares of Class C common stock as Class S common stock
3.6	Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-11 (File No. 333-205684) filed with the Securities and Exchange Commission on July 15, 2015)
4.1	Form of Subscription Agreement (incorporated by reference to Appendix A to the Post-Effective Amendment to the Company’s Registration Statement (File No. 333-205684) filed with the Securities and Exchange Commission on April 28, 2017)
4.2	Dividend Reinvestment Plan (incorporated by reference to Appendix B to the Post-Effective Amendment to the Company’s Registration Statement (File No. 333-205684) filed with the Securities and Exchange Commission on April 28, 2017)
4.3	Share Repurchase Program (incorporated by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K (File No. 333-205684) filed with the Securities and Exchange Commission on January 19, 2017
31.1*	Certification of the Principal Executive Officer of the Company pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of the Principal Financial Officer of the Company pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Certification of the Principal Executive Officer and Principal Financial Officer of the Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL INSTANCE DOCUMENT
101.SCH	XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT
101.CAL	XBRL TAXONOMY EXTENSION CALCULATION LINKBASE
101.DEF	XBRL TAXONOMY EXTENSION DEFINITION LINKBASE
101.LAB	XBRL TAXONOMY EXTENSION LABELS LINKBASE
101.PRE	XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE
*	Filed herewith.
**	Furnished herewith.

38

EX-3.2

Exhibit 3.2

RICH UNCLES NNN REIT, INC.

ARTICLES OF AMENDMENT

Rich Uncles NNN REIT, Inc., a Maryland corporation (the “Corporation”), hereby certifies to the State Department of Assessments and Taxation of Maryland that:

FIRST: The charter of the Corporation (the “Charter”) is hereby amended by deleting therefrom in its entirety the first two sentences of Section 7.1 of Article 7 and inserting in lieu thereof two new sentences to read as follows:

The Corporation has authority to issue 450,000,000 shares of stock, consisting of 400,000,000 shares of common stock, $0.001 par value per share (“Common Stock”), and 50,000,000 shares of preferred stock, $0.001 par value per share (“Preferred Stock”). The aggregate par value of all authorized shares of stock having par value is $450,000.

SECOND: The total number of shares of stock which the Corporation had authority to issue immediately prior to the foregoing amendment of the Charter was 250,000,000 shares of stock, consisting of 200,000,000 shares of common stock, $0.001 par value per share, and 50,000,000 shares of preferred stock, $0.001 par value per share. The aggregate par value of all authorized shares of stock having par value was $250,000.

THIRD: The total number of shares of stock which the Corporation has authority to issue pursuant to the foregoing amendment of the Charter is 450,000,000 shares of stock, consisting of 400,000,000 shares of common stock, $0.001 par value per share, and 50,000,000 shares of preferred stock, $0.001 par value per share. The aggregate par value of all authorized shares of stock having par value is $450,000.

FOURTH: The information required by Section 2-607(b)(2)(i) of the Maryland General Corporation Law (the “MGCL”) is not changed by the foregoing amendment of the Charter.

FIFTH: The foregoing amendment of the Charter was approved by a majority of the entire Board of Directors of the Corporation as required by law and was limited to a change expressly authorized to be made without any action by the stockholders of the Corporation by the Charter and Section 2-105(a)(13) of the MGCL.

The undersigned officer of the Corporation acknowledges these Articles of Amendment to be the corporate act of the Corporation and, as to all matters or facts required to be verified under oath, the undersigned officer acknowledges that, to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties for perjury.

.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the Corporation has caused these Articles of Amendment to be signed in its name and on its behalf by its Chief Executive Officer and attested to by its Secretary on this 11^th day of August, 2017.

ATTEST: RICH UNCLES NNN REIT, INC.

By:	/s/ Jean Ho	By:	/s/ Harold Hofer
	Name: Jean Ho		Name: Harold Hofer
	Title: Secretary		Title: Chief Executive Officer

[Signature Page to Articles of Amendment (Increase of Authorized Common Stock)]

EX-3.3

Exhibit 3.3

RICH UNCLES NNN REIT, INC.

ARTICLES OF AMENDMENT

THIS IS TO CERTIFY THAT:

FIRST: The charter (the “Charter”) of Rich Uncles NNN REIT, Inc., a Maryland corporation (the “Corporation”), is hereby amended to change the name and designation of the common stock, $0.001 par value per share, of the Corporation to Class C Common Stock, $0.001 par value per share. All references in the Charter to “Common Stock” and “Common Shares” are hereby changed to “Class C Common Stock and “Class C Common Shares”, respectively.

SECOND: The foregoing amendment to the Charter has been approved by a majority of the entire Board of Directors of the Corporation and is limited to a change expressly permitted by Section 2-605(a)(2) of the Maryland General Corporation Law to be made without action by the stockholders.

THRID: The undersigned officer of the Corporation acknowledges these Articles of Amendment to be the corporate act of the Corporation and, as to all matters or facts required to be verified under oath, the undersigned officer acknowledges that, to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties for perjury.

- signature page follows-

IN WITNESS WHEREOF, the Corporation has caused these Articles of Amendment to be signed in its name and on its behalf by its Chief Executive Officer and attested to by its Secretary on this 11^th day of August, 2017.

ATTEST: RICH UNCLES NNN REIT, INC.

By:	/s/ Jean Ho	By:	/s/ Harold Hofer
	Name: Jean Ho		Name: Harold Hofer
	Title: Secretary		Title: Chief Executive Officer

[Signature Page to Articles of Amendment (Name and Designation of Common Stock)]

EX-3.4

Exhibit 3.4 

RICH UNCLES NNN REIT, INC.

ARTICLES OF AMENDMENT

Rich Uncles NNN REIT, Inc., a Maryland corporation (the “Corporation”), hereby certifies to the State Department of Assessments and Taxation of Maryland that:

FIRST: Article SECOND of the charter of the Corporation (the “Charter”) is hereby amended to change the name of the Corporation to:

RW Holdings NNN REIT, Inc.

SECOND: The foregoing amendment to the Charter was approved by a majority of the entire Board of Directors of the Corporation and was limited to a change expressly authorized by Section 2-605(a)(1) of the Maryland General Corporation Law without action by the stockholders.

THIRD: The undersigned officer of the Corporation acknowledges these Articles of Amendment to be the corporate act of the Corporation and, as to all matters or facts required to be verified under oath, the undersigned officer acknowledges that, to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties for perjury.

-Signature Page Follows-

IN WITNESS WHEREOF, the Corporation has caused these Articles of Amendment to be signed in its name and on its behalf by its Chief Executive Officer and attested to by its Secretary on this 11^th day of August, 2017.

ATTEST: RICH UNCLES NNN REIT, INC.

By:	/s/ Jean Ho	By:	/s/ Harold Hofer
	Name: Jean Ho		Name: Harold Hofer
	Title: Secretary		Title: Chief Executive Officer

[Signature Page to Articles of Amendment (Change of Corporate Name)]

EX-3.5

Exhibit 3.5

RICH UNCLES NNN REIT, INC.

ARTICLES SUPPLEMENTARY

Rich Uncles NNN REIT, Inc., a Maryland corporation (the “Corporation”), hereby certifies to the State Department of Assessments and Taxation of Maryland that:

FIRST: Under a power contained in Article 7 of the charter of the Corporation (the “Charter”), the Board of Directors of the Corporation (the “Board”), by duly adopted resolutions, reclassified and designated 100,000,000 authorized but unissued shares of Class C Common Stock, $0.001 par value per share, of the Corporation (the “Class C Common Shares”), as shares of Class S Common Stock, $0.001 par value per share with the following preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications, and terms and conditions of redemption, which, upon any restatement of the Charter, shall become part of Article 7 of the Charter, with any necessary or appropriate renumbering or relettering of the sections or subsections hereof. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Charter.

Class S Common Shares

Section 1. Designation and Number. A class of stock of the Corporation, designated as “Class S Common Stock” (the “Class S Common Shares”), is hereby established. The total number of authorized Class S Common Shares shall be one-hundred million (100,000,000).

Section 2. Preferences and Rights. Except as set forth in Sections 3 and 4, the Class S Common Shares shall have identical preferences, rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications, and terms and conditions of redemption as the Class C Common Shares.

Section 3. Distributions. Holders of the then outstanding Class S Common Shares shall be entitled to receive, when and as authorized by the Board and declared by the Corporation, out of funds legally available for the payment thereof, dividends and other distributions. Dividends and other distributions shall be made with respect to the Class S Common Shares at the same time as those made with respect to the Class C Common Shares. The dividends and other distributions with respect to Class S Common Shares may vary from dividends and other distributions with respect to each other class of stock of the Corporation to reflect, among other things, differences among the net asset values per share of each such class or series and to such extent and for such purposes as the Board may deem appropriate. The dividends and other distributions with respect to Class S Common Shares may vary among the holders of Class S Common Shares to account for differences in the fees and expenses that may be payable to selling agents with respect to such Class S Common Shares.

Section 4. Voting Rights. Each outstanding Class S Common Share shall entitle the holder thereof to one vote on each matter submitted to a vote at a meeting of stockholders. Except as may be provided otherwise in the Charter, and subject to the express terms of any class or series of shares of Preferred Stock, each holder of a Class S Common Share shall vote together with the holders of all Class C Common Shares. The holders of Class S Common Shares shall have exclusive voting rights on any amendment to the Charter (including the terms of the Class S Common Shares set forth herein) that would alter only the contract rights of the Class S Common Shares and no holders of any other class or series of shares of stock of the Corporation shall be entitled to vote thereon. The holders of Class S Common Shares shall have no right to vote on any amendment to the Charter (including the terms of the Class C Common Shares) that would alter only the contract rights of the Class C Common Shares.

Section 5. Application of the Charter. All provisions of the Charter applicable to the Class C Common Shares, including, without limitation, the provisions of Section 5.11, Section 5.12, Articles 6, Article 7, Section 8.5, Section 8.9, Section 8.10 and Section 9.1, shall apply to the same extent to the Class S Common Shares.

Section 6. Status of Redeemed Shares. Any Class S Common Shares that shall at any time have been redeemed or otherwise acquired by the Corporation shall, after such redemption or acquisition, have the status of authorized but unissued Class S Common Shares.

SECOND: The Class S Common Shares have been classified and designated by the Board under the authority contained in the Charter.

THIRD: These Articles Supplementary have been approved by the Board in the manner and by the vote required by law.

FOURTH: The undersigned acknowledges these Articles Supplementary to be the corporate act of the Corporation and, as to all matters or facts required to be verified under oath, the undersigned acknowledges that, to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties of perjury.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the Corporation has caused these Articles Supplementary to be signed in its name and on its behalf by its Chief Executive Officer and attested to by its Secretary on this 11^th day of August, 2017.

ATTEST: RICH UNCLES NNN REIT, INC.

By:	/s/ Jean Ho	By:	/s/ Harold Hofer
	Name: Jean Ho		Name: Harold Hofer
	Title: Secretary		Title: Chief Executive Officer

[Signature Page to Articles Supplementary]

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Harold Hofer, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of the registrant, RW Holdings NNN REIT, Inc.;

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

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

4. The registrant’s other certifying officer 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)) 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) Intentionally omitted;

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

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

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

Date: August 15, 2017	/s/ HAROLD HOFER
	Name:	Harold Hofer
	Title:	Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jean Ho, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of the registrant, RW Holdings NNN REIT, Inc.;

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

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

4. The registrant’s other certifying officer 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)) 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) Intentionally omitted;

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

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

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

Date: August 15, 2017	/s/ JEAN HO
	Name:	Jean Ho
	Title:	Chief Financial Officer
		(Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATIONS OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. § 1350)

Each of the undersigned officers of RW Holdings NNN REIT, Inc. (the “Company”) hereby certifies, for purposes of Section 1350 of Chapter 63 of Title 18 of the United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his or her knowledge:

(i) the accompanying Quarterly Report on Form 10-Q of the Company for the period ended June 30, 2017 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and

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

	/s/ HAROLD HOFER
	Name:	Harold Hofer
	Title:	Chief Executive Officer (Principal Executive Officer)
	/s/ JEAN HO
	Name:	Jean Ho
Date: August 15, 2017	Title:	Chief Financial Officer (Principal Financial Officer)

The foregoing certification is being furnished with the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2017 pursuant to 18 U.S.C. § 1350. It is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and it is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing, except to the extent the Company specifically incorporates this certification by reference.

XML

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2017	Aug. 10, 2017
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q2
Entity Registrant Name	RW Holdings NNN REIT, Inc.
Entity Central Index Key	0001645873
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		6,863,449

XML

Condensed Consolidated Balance Sheets - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Real estate investments:
Land	$ 16,182,071	$ 5,369,238
Building and improvements	61,597,935	24,243,072
Tenant origination and absorption costs	6,581,896	3,632,731
Total investments in real estate property	84,361,902	33,245,041
Accumulated depreciation and amortization	(1,649,463)	(493,185)
Total investments in real estate property, net	82,712,439	32,751,856
Investment in Rich Uncles REIT I	3,555,268	3,523,809
Real estate investments, net	86,267,707	36,275,665
Cash and cash equivalents	2,544,784	3,431,769
Restricted cash	1,859,899	245,604
Tenant receivables	557,482	114,320
Above-market leases, net	729,816	148,577
Due from affiliates	42,925	108,433
Purchase and other deposits	1,625,100	500,000
Prepaid expenses and other assets	949,566	478,192
TOTAL ASSETS	94,577,279	41,302,560
LIABILITIES AND STOCKHOLDERS' EQUITY
Mortgage notes payable, net	25,975,486	7,113,701
Unsecured credit facility, net	9,232,184	10,156,685
Accounts payable, accrued expenses and other liabilities	1,622,708	470,236
Below-market leases, net	502,326	150,767
Due to affiliates	278,611	383,422
Interest rate swap derivatives	104,633	0
Investor deposits	0	582,516
Share repurchases payable	310,676	17,467
TOTAL LIABILITIES	38,026,624	18,874,794
Redeemable common stock	138,429	196,660
Preferred stock, $0.001 par value, 50,000,000 shares authorized, no shares issued and outstanding	0	0
Common stock $0.001 par value, 200,000,000 shares authorized, 6,184,560 and 2,458,881 shares issued and outstanding as of June 30, 2017 and December 31, 2016, respectively.	6,186	2,458
Additional paid-in-capital	59,545,077	23,643,435
Cumulative distributions and net losses	(3,139,037)	(1,414,787)
TOTAL STOCKHOLDERS' EQUITY	56,412,226	22,231,106
Commitments and contingencies (Note 8)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 94,577,279	$ 41,302,560

XML

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2017	Dec. 31, 2016
Preferred Stock, Par or Stated Value Per Share	$ 0.001	$ 0.001
Preferred Stock, Shares Authorized	50,000,000	50,000,000
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Common Stock, Par or Stated Value Per Share	$ 0.001	$ 0.001
Common Stock, Shares Authorized	200,000,000	200,000,000
Common Stock, Shares, Issued	6,184,560	2,458,881
Common Stock, Shares, Outstanding	6,184,560	2,458,881

XML

Condensed Consolidated Statements of Operations - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Revenue:
Rental income	$ 1,366,901	$ 41,466	$ 2,063,595	$ 41,466
Tenant recoveries	362,141	0	525,646	0
Total revenue	1,729,042	41,466	2,589,241	41,466
Expenses:
Fees to affiliates (Note 7)	196,856	481,688	308,154	481,688
General and administrative	831,179	6,290	2,018,023	6,380
Depreciation and amortization	725,419	33,489	1,156,278	33,489
Interest expense	438,168	40,650	570,005	40,650
Property expenses (Note 7)	375,963	0	555,741	0
Acquisition costs	0	73,028	0	73,028
Total expenses	2,567,585	635,145	4,608,201	635,235
Less: Expenses reimbursed/fees waived by Sponsor or affiliates (Note 7)	(722,118)	0	(1,437,969)	0
Net expenses	1,845,467	635,145	3,170,232	635,235
Other income:
Interest income	613	0	888	0
Equity in earnings from Rich Uncles REIT I	159,399	0	167,356	0
Total other income	160,012	0	168,244	0
Net income (loss)	$ 43,587	$ (593,679)	$ (412,747)	$ (593,769)
Net income (loss) per share, basic and diluted	$ 0.01	$ (29.68)	$ (0.09)	$ (29.69)
Weighted-average number of common shares outstanding, basic and diluted	5,295,203	20,000	4,381,066	20,000
Dividends declared per common share	$ 0.175	$ 0	$ 0.350	$ 0

XML

Condensed Consolidated Statement of Stockholders' Equity - 6 months ended Jun. 30, 2017 - USD ($)	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]
Balance at Dec. 31, 2016	$ 22,231,106	$ 2,458	$ 23,643,435	$ (1,414,787)
Balance (in shares) at Dec. 31, 2016		2,458,881
Issuance of common stock	37,937,373	$ 3,794	37,933,579	0
Issuance of common stock (in shares)		3,793,737
Offering costs	(1,138,121)	$ 0	(1,138,121)	0
Distributions declared	(1,311,503)	0	0	(1,311,503)
Stock compensation expense	65,000	$ 6	64,994	0
Stock compensation expense (in shares)		6,500
Repurchase of common stock	(723,904)	$ (72)	(723,832)	0
Repurchase of common stock (in shares)		(74,558)
Net loss	(412,747)	$ 0	0	(412,747)
Reclassifications to redeemable common stock	(234,978)	0	(234,978)	0
Balance at Jun. 30, 2017	$ 56,412,226	$ 6,186	$ 59,545,077	$ (3,139,037)
Balance (in shares) at Jun. 30, 2017		6,184,560

XML

Consolidated Statements of Cash Flows - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (412,747)	$ (593,769)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	1,156,278	33,489
Stock compensation expense	65,000	0
Deferred rents	(176,513)	2,452
Amortization of deferred financing costs	36,504	1,186
Amortization of above-market lease	35,248	1,389
Amortization of below-market leases	(13,758)	0
Unrealized losses (gain) on interest rate swap valuation	104,633	0
Equity in earnings from investment in Rich Uncles REIT I	(167,356)	0
Distributions from investment in Rich Uncles REIT I	135,896	0
Change in operating assets and liabilities:
Tenant receivables	(272,112)	0
Due from affiliates	79,219	0
Prepaid expenses and other assets	(5,576)	0
Accounts payable, accrued expenses and other liabilities	635,109	34,275
Due to affiliates	231,737	577,418
Net cash provided by operating activities	1,431,562	56,440
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of real estate investments	(49,134,241)	(15,731,000)
Payment of acquisition fees to affiliate	(1,771,482)	0
Refundable purchase deposits	(1,500,000)	0
Additions to real estate investments	(193,191)	0
Investment in Rich Uncles REIT I	0	(2,000,000)
Net cash used in investing activities	(52,598,914)	(17,731,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings from unsecured credit facility	33,140,000	11,000,000
Repayments of unsecured credit facility	(34,065,618)	0
Proceeds from mortgage notes payable	19,454,988	7,319,700
Principal payments on mortgage notes payable	(86,898)	0
Refundable loan deposits	(125,100)	0
Payments of deferred financing costs	(541,691)	(171,166)
Proceeds from issuance of common stock and investor deposits	36,295,673	0
Payments of offering costs	(1,200,469)	0
Payments to redeem common stock	(723,904)	0
Distributions paid to common stockholders	(252,319)	0
Net cash provided by financing activities	51,894,662	18,148,534
NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	727,310	473,974
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD	3,431,769	200,815
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD	2,544,784	674,789
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest	350,750	10,589
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES
Transfers of redeemable common stock	234,978	7,500
Distributions paid to common stockholders through common stock issuances pursuant to the distribution reinvestment plan	1,059,184	0
Purchase deposits applied to acquisition of real estate	500,000	0
Increase in share repurchases payable	293,209	17,467
Payable to seller for acquisition of real estate investment	$ 117,803	$ 0

XML

BUSINESS AND ORGANIZATION

6 Months Ended

Jun. 30, 2017

Accounting Policies [Abstract]

Business Description and Basis of Presentation [Text Block]

NOTE 1. BUSINESS AND ORGANIZATION

RW Holdings NNN REIT, Inc. (the “Company”) was incorporated on May 14, 2015 as a Maryland corporation. The Company was originally incorporated under the name Rich Uncles Real Estate Investment Trust, Inc., but amended its name on October 19, 2015 to Rich Uncles NNN REIT, Inc. and again on August 14, 2017 to RW Holdings NNN REIT, Inc. As of June 30, 2017, the Company has the authority to issue 250,000,000 shares of stock, consisting of 200,000,000 shares of common stock, $0.001 par value per share, and 50,000,000 shares of preferred stock, $0.001 par value per share. Pursuant to its securities offering registered with the Securities and Exchange Commission (“SEC”), the Company sells its shares directly to investors at a purchase price of $10.00 per share, with a minimum investment in shares of $500. The Company was formed to primarily invest, directly or indirectly through investments in real estate owning entities, in single-tenant income-producing corporate properties located in the United States, which are leased to creditworthy tenants under long-term net leases. The Company’s goal is to generate current income for investors and long-term capital appreciation in the value of its properties.

The Company holds its investments in real property through special purpose wholly owned limited liability companies or through Rich Uncles NNN Operating Partnership, LP, a Delaware limited partnership (the “Operating Partnership”). The Operating Partnership was formed on January 28, 2016. The Company is the sole general partner of, and owns a 99% partnership interest in, the Operating Partnership. Rich Uncles NNN LP, LLC, a Delaware limited liability company formed on May 13, 2016, owns the remaining 1% partnership interest in the Operating Partnership and is the sole limited partner. Rich Uncles NNN LP, LLC is wholly owned by the Company.

The Company is externally managed by its advisor, Rich Uncles NNN REIT Operator, LLC (the “Advisor”), a Delaware limited liability company wholly owned by the Company’s sponsor, Rich Uncles, LLC (the “Sponsor”), a Delaware limited liability company whose members include Harold Hofer, Howard Makler, and Ray Wirta. On June 24, 2015 and December 31, 2015, the Company issued 10,000 shares of its common stock to the Sponsor, respectively, for a purchase price of $10.00 per share.

On July 15, 2015, the Company filed a registration statement on Form S-11 with the Securities and Exchange Commission (the “SEC”) to register an initial public offering of its common stock to offer a maximum of $900,000,000 in shares of common stock for sale to the public (the “Primary Offering”). The Company also registered a maximum of $100,000,000 of common stock pursuant to the Company’s distribution reinvestment plan (the “Registered DRP Offering” and, together with the Primary Offering, the “Registered Offering”). The SEC declared the Company’s registration statement effective on June 1, 2016. The Company had no significant operations prior to our purchase of real estate properties in June 2016.

On July 20, 2016, the Company began offering shares to the public and through June 30, 2017, the Company had sold 6,231,455 shares of common stock in the Registered Offering, including 118,418 shares of common stock sold under its Registered DRP Offering, for aggregate gross offering proceeds of $62,314,551.

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2017

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information as contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“Codification”), and in conjunction with rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the unaudited Condensed Consolidated Financial Statements do not include certain information and footnote disclosures required by GAAP for audited financial statements. In the opinion of management, the unaudited Condensed Consolidated Financial Statements reflect all adjustments which are of a normal and recurring nature, necessary for a fair and consistent presentation of the financial position and the results for the interim period presented. Operating results for the three and six months ended June 30, 2017 are not necessarily indicative of the results that may be expected for the year ended December 31, 2017. The accompanying unaudited interim financial information should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2016 as filed with the SEC.

The unaudited Condensed Consolidated Financial Statements include the accounts of the Company, the Operating Partnership, and directly wholly owned subsidiaries. All significant intercompany balances and transactions are eliminated in consolidation.

Reclassifications

Certain amounts in the Company’s prior period consolidated financial statements have been reclassified to conform to the current period presentation. These reclassifications have not changed the results of operations of prior periods.

 

Other Comprehensive Income

For all periods presented, other comprehensive income (loss) is the same as net income (loss).

Derivative Instruments

The Company enters into derivative instruments for risk management purposes to hedge its exposure to cash flow variability caused by changing interest rates on its variable rate mortgage notes payable. The Company records these derivative instruments at fair value in the accompanying consolidated balance sheets. The Company’s mortgage derivative instruments have not been designated as effective hedges and therefore the changes in fair value are recorded as gain or loss on derivative instruments in the accompanying consolidated statement of operations.

Equity in Earnings

The Company’s investment in Rich Uncles REIT I (“REIT I”) represented an approximate 4.36% and 4.39% ownership interest as of June 30, 2017 and December 31, 2016, respectively. Through March 31, 2017, the Company had recorded its share of equity in the earnings (losses) of REIT I based on estimates of REIT I’s results of operations. In July 2017, REIT I’s financial statements for the year ended December 31, 2016 were prepared and audited. The Company’s equity in earnings (losses) of REIT I for the year ended December 31, 2016 should have been equity in earnings of $30,038 rather than equity in losses of $79,271 which was recorded. The Company’s equity pick up for the three months ended March 31, 2017 should have been equity in earnings of $18,813 rather than the equity in earnings of $7,957 which was recorded. For the three months ended June 30, 2017, the Company recorded equity in earnings from REIT I of $159,399, which included $120,165 related to periods prior to April 1, 2017 as described above. For the six months ended June 30, 2017, the Company recorded equity in earnings from REIT I of $167,356, which  included $109,309 related to periods prior to January 1, 2017 as described above.

The following is summarized financial information for REIT I:

 

	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017		2016
Total revenue	$	3,507,951	$	1,440,457	$	6,234,218	$	2,245,359
Net income (loss)	$	937,414	$	(1,268,078)	$	1,331,862	$	(2,400,993)

Use of Estimates

The preparation of the unaudited Condensed Consolidated Financial Statements and the accompanying notes thereto in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited Condensed Consolidated Financial Statements and accompanying notes. Actual results may differ from those estimates.

Recent Accounting Pronouncements

New Accounting Standards Issued and Adopted

In January 2017, the FASB issued Accounting Standards Update (“ASU”) No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”) which clarified the definition of a business. The update added further guidance that assists preparers in evaluating whether a transaction will be an acquisition of an asset or a business. The Company expects that most of its acquisitions will qualify as an asset acquisition and therefore acquisition costs are capitalized as part of the cost of the acquired properties. The Company adopted the standard as of October 1, 2016. For periods prior to the adoption of ASU 2017-01, the Company’s financial statements will not be comparable because acquisitions of property qualified as a business and therefore acquisition costs were expensed.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows. ASU 2016-15 addresses certain issues where diversity in practice was identified. It amends existing guidance, which is principles based and often requires judgment to determine the appropriate classification of cash flows as operating, investing or financing activities. In addition, ASU 2016-15 clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. On January 1, 2017, we early adopted this standard in its entirety on a retrospective basis and determined that the only clarification to significantly impact the Company was the classification of distributions received from our equity method investment in Rich Uncles REIT I. The update allows for the election to classify distributions received from equity method investments based on either a cumulative earnings approach or a nature of distribution approach. We have elected the nature of the distribution approach, in which cash flows generated from the operations of an unconsolidated entity are classified as a return on investment (cash inflow from operating activities) and cash flows that were generated from property sales, debt refinancing or sales of our investments are classified as a return of investment (cash inflow from investing activities). We adopted this approach based on the information available to us to determine the nature of the underlying activity that generated the distributions from unconsolidated entities.

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”). ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and restricted cash. Therefore, amounts generally described as restricted cash should be included with cash and cash equivalents when reconciling the beginning of period and end of period total amounts shown on the statement of cash flows, and transfers between cash and cash equivalents and restricted cash are no longer presented within the statement of cash flows. ASU 2016-18 is effective for annual periods beginning after December 15, 2017, including interim periods within those fiscal years. The Company elected to early adopt ASU 2016-18 for the reporting period ended December 31, 2016 and the standard was applied retrospectively for all periods presented. As a result of the adoption of ASU 2016-18, the Company no longer presents the change within restricted cash in the consolidated statement of cash flows.

New Accounting Standards Recently Issued and Not Yet Adopted

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). ASU 2014-09 requires an entity to recognize the revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services.  ASU 2014-09 supersedes the revenue requirements in Revenue Recognition (Topic 605) and most industry-specific guidance throughout the Industry Topics of the Codification.  ASU 2014-09 does not apply to lease contracts within the scope of Leases (Topic 840).  ASU 2014-09 was to be effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and is to be applied retrospectively, with early application not permitted.  In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which defers the effective date of ASU 2014-09 by one year. Early adoption is permitted but not before the original effective date. As the primary source of revenue for the Company is generated through leasing arrangements, which are scoped out of this standard, the Company does not expect the adoption of ASU 2014-09 to have a significant impact on its consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). The amendments in ASU 2016-02 change the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU 2016-02 is effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption of ASU 2016-02 is permitted. The new standard for lease accounting requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The Company is currently evaluating the impact of adopting the new leases standard on its consolidated financial statements.

XML

REAL PROPERTY

6 Months Ended

Jun. 30, 2017

Real Estate [Abstract]

Real Estate Disclosure [Text Block]

NOTE 3. REAL PROPERTY

As of June 30, 2017, the Company’s real estate portfolio consisted of fourteen properties in seven states consisting of eight retail, five office and one industrial property. The following table provides summary information regarding the Company’s real estate as of June 30, 2017:

Property	Location	Acquisition  Date	Property  Type	Land,  Buildings and  Improvements		Tenant Origination  and  Absorption Costs		Accumulated Depreciation and Amortization		Total Investment  in Real  Estate  Property, Net
Accredo	Orlando, FL	6/15/2016	Office	$	9,850,055	$	1,053,638	$	(512,437)	$	10,391,256
Walgreens	Stockbridge, GA	6/21/2016	Retail		4,147,948		705,423		(341,623)		4,511,748
Dollar General	Litchfield, ME	11/4/2016	Retail		1,281,812		116,302		(25,152)		1,372,962
Dollar General	Wilton, ME	11/4/2016	Retail		1,543,776		140,653		(32,190)		1,652,239
Dollar General	Thompsontown, PA	11/4/2016	Retail		1,199,860		106,730		(24,167)		1,282,423
Dollar General	Mt. Gilead, OH	11/4/2016	Retail		1,174,188		111,847		(23,171)		1,262,864
Dollar General	Lakeside, OH	11/4/2016	Retail		1,112,872		100,857		(23,780)		1,189,949
Dollar General	Castalia, OH	11/4/2016	Retail		1,102,086		86,408		(23,105)		1,165,389
Dana	Cedar Park, TX	12/27/2016	Industrial		8,392,906		1,210,874		(265,729)		9,338,051
Northrop Grumman	Melbourne, FL	3/7/2017	Office		12,382,991		1,341,198		(228,383)		13,495,806
exp US Services	Maitland, FL	3/27/2017	Office		5,920,121		388,248		(63,332)		6,245,037
Harley	Bedford, TX	4/13/2017	Retail		13,178,286		-		(64,063)		13,114,222
Wyndham	Summerlin, NV	6/22/2017	Office		9,447,270		669,232		(12,106)		10,104,396
Williams Sonoma	Summerlin, NV	6/22/2017	Office		7,045,835		550,486		(10,225)		7,586,097
				$	77,780,006	$	6,581,896	$	(1,649,463)	$	82,712,439

Current Acquisitions

During the six months ended June 30, 2017, the Company acquired the following properties:

Property	Acquisition Date	Land		Buildings and Improvements		Tenant Origination and Absorption Costs		Above- Market Lease		Below- Market Lease		Total
Northrop Grumman	3/7/2017	$	1,191,024	$	11,191,967	$	1,341,199	$	-	$	-	$	13,724,190
exp US Services	3/27/2017		785,801		5,134,320		388,248		616,486		-		6,924,855
Harley	4/13/2017		1,145,196		12,033,090		-		-		-		13,178,286
Wyndham	6/22/2017		4,144,069		5,303,201		669,232		-		-		10,116,502
Williams Sonoma	6/22/2017		3,546,744		3,499,091		550,486		-		(364,554)		7,231,767
		$	10,812,834	$	37,161,669	$	2,949,165	$	616,486	$	(364,554)	$	51,175,600

Purchase price	$	51,175,600
Purchase deposits applied		(500,000)
Acquisition fees to affiliates		(1,483,571)
Payable to seller for acquisition of real estate		(117,803)
Refund from escrow		60,015
Cash paid for acquisition of real estate	$	49,134,241

The purchase price allocations reflected in the accompanying unaudited Condensed Consolidated Financial Statements is based upon estimates and assumptions that are subject to change that may impact the fair value of the assets and liabilities above (including real estate investments, other assets and accrued liabilities). The noncancellable lease term of the properties acquired during the six months ended June 30, 2017 are as follows:

Property	Lease Expiration
Northrop Grumman	5/31/2021
exp US Services	11/30/2026
Harley	4/12/2042
Wyndham	2/29/2025
Williams Sonoma	10/31/2022

The Company recorded these acquisitions as asset acquisitions and capitalized $1,038,776 and $1,723,251 of acquisition fees and costs for the three and six months ended June 30, 2017, respectively. During the three and six months ended June 30, 2017, the Company recognized $965,368 and $1,066,814, respectively, of total revenue related to these properties.

Operating Leases

As of June 30, 2017, our portfolio’s asset concentration (greater than 10% of total assets) was as follows:

Property and Location	Net Carrying Value		Percentage of Total Assets
Accredo, FL	$	10,391,256		10.99	%
Northrop Grumman, FL	$	13,495,806		14.27	%
Harley, TX	$	13,114,222		13.87	%
Wyndham, NV	$	10,104,396		10.68	%

At June 30, 2017 and December 31, 2016, tenant receivables included $201,026 and $29,975, respectively, of straight-line rent.

As of June 30, 2017, the future minimum contractual rent payments due under the Company’s non-cancelable operating leases are as follows:

July 1, 2017 through December 31, 2017	$	2,870,956
2018		6,732,550
2019		6,884,632
2020		7,035,980
2021		5,563,272
2022		4,556,702
Thereafter		20,331,662
	$	53,975,754

Revenue Concentration

For the six months ended June 30, 2017, our portfolio’s revenue concentration (greater than 10% total revenue) was as follows:

Property and Location	Revenue		Percentage of  Total Revenue
Accredo, FL	$	531,744		20.54	%
Dana, TX	$	465,089		17.97	%
Northrop, FL	$	459,047		17.73	%
Harley, TX	$	326,102		12.60	%

As of June 30, 2017, our portfolio’s tenant concentration (greater than 10% of annualized base rent) was as follows:

Property and Location	Effective  Annualized  Base Rent*		Percentage of  Annualized Base  Rent
Accredo, FL	$	899,010		13.56	%
Dana, TX	$	665,917		10.05	%
Northrop, FL	$	1,162,274		17.53	%
exp US Services, FL	$	681,077		10.27	%
Harley, TX	$	900,000		13.58	%
Wyndham, NV	$	798,827		12.05	%

*Effective Annualized Base Rent is calculated based on the monthly base rent at June 30, 2017 for twelve months.

As of June 30, 2017, no other tenant accounted for more than 10% of annualized base rent.

Intangibles

As of June 30, 2017, the Company’s intangibles were as follows:

	Tenant Origination and Absorption Costs		Above-Market Leases		Below-Market Leases
Cost	$	6,581,896	$	783,115	$	(516,164)
Accumulated amortization		(608,394)		(53,299)		13,838
Net amount	$	5,973,502	$	729,816	$	(502,326)

Amortization of intangible assets over the next five years is expected to be as follows:

	Tenant Origination and  Absorption  Costs		Above-Market  Leases		Below-Market  Leases
July 1, 2017 through December 31, 2017	$	559,234	$	48,523	$	(44,772)
2018		1,118,468		97,045		(89,544)
2019		1,118,468		97,045		(89,544)
2020		1,118,468		97,045		(89,544)
2021		702,209		78,994		(89,544)
2022		412,034		63,719		(69,853)
Thereafter		944,621		247,445		(29,525)
	$	5,973,502	$	729,816	$	(502,326)
Weighted-Average Remaining Amortization Period		6.33 years		8.43 years		5.80 years

XML

DEBT

6 Months Ended

Jun. 30, 2017

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

NOTE 4. DEBT

Mortgage Notes Payable

As of June 30, 2017, the Company’s mortgage notes payable consisted of the following:

Collateral	Principal Amount		Deferred Loan Costs, net		Net Balance		Contractual Interest Rate (1)	Effective Interest Rate (1)		Loan Maturity
Accredo/Walgreens properties	$	7,200,707	$	(142,659)	$	7,058,048	3.95%		3.95%	7/1/2021
Dana property		4,747,013		(134,248)		4,612,765	4.56%		4.56%	4/1/2023
Six Dollar General properties (2)		3,976,515		(171,369)		3,805,146	4.69%		4.69%	4/1/2022
Wyndham property (3)		5,970,000		(115,276)		5,854,724	One-month LIBOR + 2.05%		4.34%	6/5/2027
Williams Sonoma property (3)		4,740,000		(95,197)		4,644,803	One-month LIBOR + 2.05%		4.05%	6/5/2022
	$	26,634,235	$	(658,749)	$	25,975,486

(1) Contractual interest rate represents the interest rate in effect under the mortgage note payable as of June 30, 2017. Effective interest rate is calculated as the actual interest rate in effect as of June 30, 2017 (consisting of the contractual interest rate and the effect of the interest rate swap, if applicable). For further information regarding the Company’s derivative instruments, see Note 5.

(2) The loan is cross-collateralized with all six Dollar General properties owned by the Company and one Dollar General property owned by REIT I. The deeds of trust for the Company’s six Dollar General properties and the deed of trust for the REIT I Dollar General property contain cross-collateralization and cross default provisions. At June 30, 2017, the outstanding principal balance of the loan on REIT I’s one Dollar General property was $636,916.

(3) The loans on each of the Williams Sonoma and Wyndham properties (collectively, the Property) located in Summerlin, Nevada were originated by Nevada State Bank (Bank). The loans are collateralized by a deed of trust and a security agreement with assignment of rents and fixture filing. In addition, the individual loans are subject to a cross collateralization and cross default agreement whereby any default under, or failure to comply with the terms of any one or both of the loans is an event of default under the terms of both loans. The value of the Property must be in an amount sufficient to maintain a loan to value ratio of no more than 60%. If the loan to value ratio is ever less than 60%, the borrower shall, upon the Bank’s written demand, reduce the principal balance of the loans so that the loan to value ratio is no more than 60%.

Unsecured Credit Facility

On June 7, 2016, the Operating Partnership (“Borrower”), entered into a credit agreement (the “Unsecured Credit Agreement”) with Pacific Mercantile Bank (“Lender”). Pursuant to the Unsecured Credit Agreement, the Borrower has a $12,000,000 unsecured credit facility with an interest rate equal to 1% over an independent index, that is the highest rate on corporate loans posted by at least 75% of the thirty (30) largest banks in the United States, known as The Wall Street Journal Prime Rate, as published in the Wall Street Journal. Payments under the Unsecured Credit Agreement are interest only and are due on the 15^th day of each month. The Unsecured Credit Agreement initially had a maturity date of June 15, 2017. On May 12, 2017, the maturity date of the Unsecured Credit Agreement was extended to October 28, 2017. The effective interest rate for borrowings under the Unsecured Credit Agreement during the six months ended June 30, 2017 was 4.98%.

The Unsecured Credit Agreement is guaranteed in the amount of $12,000,000 by the Company, Rich Uncles NNN LP, LLC, Harold Hofer, Howard Makler and Ray Wirta and trusts affiliated with the aforementioned individuals. The guarantees are to be released once the Company has book equity of $60,000,000.

We are negotiating the extension of the maturity date of the Unsecured Credit Agreement and we expect to complete this process prior to its current October 28, 2017 maturity date.

All Debt Agreements

Pursuant to the terms of the mortgage notes payable and the Unsecured Credit Agreement, the Company and/or the Operating Partnership are subject to certain financial loan covenants. The Company and/or the Operating Partnership was in compliance with all financial covenants of these loan agreement as of August 9, 2017.

The following summarizes the future principal repayment of the Company’s mortgage notes payable and unsecured credit facility as of June 30, 2017:

	Mortgage Note Payable		Unsecured Credit Facility		Total
Remaining 2017	$	226,844	$	9,232,184	$	9,459,028
2018		465,064		-		465,064
2019		482,054		-		482,054
2020		498,925		-		498,925
2021		7,068,308		-		7,068,308
2022		8,234,746		-		8,234,746
2023		9,658,294		-		9,658,295
Total principal	$	26,634,235	$	9,232,184	$	35,866,420

The following is a reconciliation of the components of interest expense for the three and six months ended June 30, 2017 and 2016:

	Three Months Ended June 30, 2016				Six Months Ended June 30, 2016
	2017		2016		2017		2016
Mortgage notes payable
Interest expense (1)	$	184,179	$	10,589	$	265,837	$	10,589
Amortization of deferred financing costs		24,998		1,155		35,386		1,155
Unrealized loss (gain) on interest rate swaps (see Note 5)		104,633		-		104,633		-
Unsecured credit facility
Interest expense		103,877		28,875		143,031		28,875
Amortization of deferred financing costs		481		31		1,118		31
Forfeited loan fee		20,000		-		20,000		-
Total interest expense	$	438,168	$	40,650	$	570,005	$	40,650

(1) As of June 30, 2017, no payments had yet been made with respect to the Company’s interest rate swaps. Accrued interest payable of $2,533 at June 30, 2017 represented the unsettled portion of the interest rate swaps for the period from origination of the interest note swap through June 30, 2017. The Company had no swap agreements as of June 30, 2016.

XML

INTEREST RATE SWAP DERIVATIVES

6 Months Ended

Jun. 30, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities Disclosure [Text Block]

NOTE 5. INTEREST RATE SWAP DERIVATIVES

The primary goal of the Company’s risk management practices related to interest rate risk is to prevent changes in interest rates from adversely impacting the Company’s ability to achieve its investment return objectives. The Company does not enter into derivatives for speculative purposes.

The Company enters into interest rate swaps as a fixed rate payer to mitigate its exposure to rising interest rates on its variable rate mortgage notes payable. The value of interest rate swaps is primarily impacted by interest rates, market expectations about interest rates, and the remaining life of the applicable instrument. In general, increases in interest rates, or anticipated increases in interest rates, will increase the value of the fixed rate payer position and decrease the value of the variable rate payer position. As the remaining life of the interest rate swap decreases, the value of both positions will generally move towards zero.

During June 2017, the Company (or wholly owned limited liability company subsidiaries) entered into interest rate swap agreements with amortizing notational amounts relating to two of its mortgage notes payable. The following table summarizes the notional amount and other information related to the Company’s interest rate swaps as of June 30, 2017. The notional amount is an indication of the extent of the Company’s involvement in each instrument at that time, but does not represent exposure to credit, interest rate or market risks:

	June 30, 2017
Derivative Instruments	Number of Instruments	Notional Amount (i)		Reference Rate as of 6/30/2016	Weighted Average Fixed Pay Rate			Weighted Average Remaining Term
Interest Rate Swap Derivatives	2	$	10,710,000	One-month LIBOR + applicable spread/Fixed at 4.05%-4.34%		4.21	%	8.3 years

(i) The notional amount of the Company’s swaps decrease each month to correspond to the outstanding principal balance on the related mortgage. The maximum notional amount is shown above. The minimum notional amount (outstanding principal balance at the maturity date) as of June 30, 2017 was $9,083,700.

The following table sets forth the fair value of the Company’s derivative instruments as well as their classification in the consolidated balance sheets as of June 30, 2017.

		June 30, 2017
Derivative Instrument	Balance Sheet Location	Number of Instruments	Fair Value
Interest Rate Swaps	Liability – Interest rate swap derivatives, at fair value	2	$	(104,633)

The change in fair value of a derivative instrument that is not designated as a cash flow hedge is recorded as interest expense in the accompanying consolidated statements of operations. None of the Company’s derivatives at June 30, 2017 were designated as hedging instruments; therefore the net realized loss recognized on interest rate swaps of $104,633 was recorded as an increase in interest expense for both the three and six months ended June 30, 2017.

XML

FAIR VALUE DISCLOSURES

6 Months Ended

Jun. 30, 2017

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

NOTE 6. FAIR VALUE DISCLOSURES

The fair value for certain financial instruments is derived using valuation techniques that involve significant management judgment. The price transparency of financial instruments is a key determinant of the degree of judgment involved in determining the fair value of the Company’s financial instruments. Financial instruments for which actively quoted prices or pricing parameters are available and for which markets contain orderly transactions will generally have a higher degree of price transparency than financial instruments for which markets are inactive or consist of non-orderly trades. The Company evaluates several factors when determining if a market is inactive or when market transactions are not orderly. The following is a summary of the methods and assumptions used by management in estimating the fair value of each class of financial instrument for which it is practicable to estimate the fair value:

Cash and cash equivalents, restricted cash, tenant receivables, due from affiliates, purchase and other deposits, prepaid expenses and other assets, accounts payable, accrued expenses and other liabilities and due to affiliates:  These balances approximate their fair values due to the short maturities of these items.

Derivative Instruments: The Company’s derivative instruments are presented at fair value in the accompanying consolidated balance sheet. The valuation of these instruments is determined using a proprietary model that utilizes observable inputs. As such, the Company classifies these inputs as Level 2 inputs. The proprietary model uses the contractual terms of the derivatives, including the period to maturity, as well as observable market-based inputs, including interest rate curves and volatility. The fair values of interest rate swaps are estimated using the market standard methodology of netting the discounted fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on an expectation of interest rates (forward curves) derived from observable market interest rate curves. In addition, credit valuation adjustments, which consider the impact of any credit risks to the contracts, are incorporated in the fair values to account for potential nonperformance risk.

Unsecured Credit Facility: The fair value of the Company’s Unsecured Credit Facility approximates its carrying value as the interest rates and other terms are comparable to those available in the market place for a similar credit facility.

Mortgage notes payable:  The fair value of the Company’s mortgage notes payable is estimated using a discounted cash flow analysis based on management’s estimates of current market interest rates for instruments with similar characteristics, including remaining loan term, loan-to-value ratio, type of collateral and other credit enhancements. Additionally, when determining the fair value of liabilities in circumstances in which a quoted price in an active market for an identical liability is not available, the Company measures fair value using (i) a valuation technique that uses the quoted price of the identical liability when traded as an asset or quoted prices for similar liabilities or similar liabilities when traded as assets or (ii) another valuation technique that is consistent with the principles of fair value measurement, such as the income approach or the market approach. The Company classifies these inputs as Level 3 inputs.

The following were the face value, carrying amount and fair value of the Company’s mortgage notes payable as of June 30, 2017 and December 31, 2016:

June 30, 2017						December 31,2016
Face value		Carrying value		Fair value		Face Value		Carrying Value		Fair Value
$	26,634,235	$	25,975,486	$	26,716,448	$	7,266,145	$	7,113,701	$	7,266,145

Disclosures of the fair values of financial instruments are based on pertinent information available to the Company as of June 30, 2017 and require a significant amount of judgment. The actual value could be materially different from the Company’s estimate of value.

During the six months ended June 30, 2017, the Company measured the following assets and liabilities at fair value (in thousands):

Recurring Basis	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Interest rate swap liabilities	$	107,166	$	-	$	107,166	$	-

XML

RELATED PARTY TRANSACTIONS

6 Months Ended

Jun. 30, 2017

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

NOTE 7. RELATED PARTY TRANSACTIONS

The Company has entered into an agreement (the “Advisory Agreement”) with the Advisor. This agreement entitles the Advisor to specified fees upon the provision of certain services with regard to the investment of funds in real estate investments, the management of those investments, among other services, and the disposition of investments, as well as entitles the Advisor to reimbursement of organization and offering costs incurred by the Advisor or Sponsor on behalf of the Company, such as expenses related to the Registered Offering, and certain costs incurred by the Advisor or Sponsor in providing services to the Company. In addition, the Advisor is entitled to certain other fees, including an incentive fee upon achieving certain performance goals, as detailed in the Advisory Agreement. The Sponsor also serves as the sponsor for Rich Uncles REIT I. During the six months ended June 30, 2017 and 2016, no other business transactions occurred between the Company and Rich Uncles REIT I, other than described below or elsewhere herein, and those relating to the Company’s investment in Rich Uncles REIT I.

Pursuant to the terms of the agreement, summarized below are the related party costs incurred by the Company for the three and six months ended June 30, 2017:

	Three months ended		Six months ended						Three months ended		Six months ended
	June 30, 2017				June 30, 2017				June 30, 2016				December 31, 2016
	Incurred		Incurred		Receivable		Payable		Incurred		Incurred		Receivable		Payable
Expensed
Acquisition fees	$	-	$	-	$	-	$	-	$	474,122	$	474,122	$	-	$	-
Asset management fees (2)		196,856		308,154		-		260,692		7,566		7,566		-		29,577
Fees to affiliates		196,856		308,154						481,688		481,688
Property management fees*		622		622		-		622		-		-		-		-
Expense reimbursements from Sponsor (1)		(672,904)		(1,360,930)		643		-		-		-		79,862		-
Waiver of asset management fees (2)		(49,214)		(77,039)		-		-		-		-		-		-
Capitalized
Acquisition fees		882,971		1,483,571		13,711		-		-		-		-		274,200
Financing fees		-		87,450		-		-		-		-		-		-
Additional paid-in-capital
Reimbursable organizational and offering expenses (3)		529,991		1,138,121		-		17,297		-		-		-		79,645
Other
Costs reimbursable from Rich Uncles REIT I (4)		-		-		28,571		-		-		-		28,571		-
	$	888,322	$	1,579,949	$	42,925	$	278,611	$	481,688	$	481,688	$	108,433	$	383,422

* Property management fees are presented as property operating expenses.

(1) The Company records payroll costs related to Company employees that answer questions from prospective shareholders. The Sponsor has agreed to reimburse the Company for these investor relations payroll costs which the Sponsor considers to be offering expenses in accordance with the Advisory Agreement.

(2) To the extent the Advisor elects, in its sole discretion to defer all or any portion of its monthly asset management fee, the Advisor will be deemed to have waived, not deferred, that portion up to 0.025% of the total investment value of the Company’s assets.  For the three and six months ended June 30, 2017, the Advisor waived $49,214 and $77,039, respectively, of asset management fees, which are not subject to future recoupment by the Advisor. No asset management fees were waived for the three or six months ended June 30, 2016.

(3) As of June 30, 2017, the Sponsor had incurred $4,452,858 of organizational and offering costs on behalf of the Company. However, the Company is only obligated to reimburse the Sponsor for such organizational and offering expenses to the extent of 3% of gross offering proceeds. The payable related to this obligation is reflected in “Due to affiliates” in the consolidated balance sheets.

(4) The Company incurred $28,571 of costs in conjunction with due diligence for a property acquisition which is owed to the Company from Rich Uncles REIT I and reflected in “Due from affiliates” in the consolidated balance sheets.

Organizational and Offering Expenses

Pursuant to the Advisory Agreement, the Company is obligated to reimburse the Sponsor or its affiliates for organizational and offering expenses (as defined by the Sponsor) paid by the Sponsor on behalf of the Company. The Company will reimburse the Sponsor for organizational and offering expenses up to 3.0% of gross offering proceeds. The Sponsor and affiliates will be responsible for any organizational and offering expenses to the extent they exceed 3.0% of gross offering proceeds. As of June 30, 2017, the Sponsor has incurred organizational and offering expenses in excess of 3.0% of the gross offering proceeds received by the Company. To the extent the Company has more gross offering proceeds from future shareholders, the Company will be obligated to reimburse the Sponsor. As the amount of future gross offering proceeds is uncertain, the amount the Company is obligated to reimburse to the Sponsor is uncertain. As of June 30, 2017, the Company has reimbursed the Sponsor $1,858,140 in organizational and offering expenses. The Company’s maximum liability for organizational and offering costs through June 30, 2017 was $1,875,437, of which $17,297 was payable as of June 30, 2017 and is included in “Due to Affiliates” in the consolidated balance sheet.

Investor relations payroll expense reimbursement from Sponsor

The Company employs investor personnel that answer inquiries from potential investors regarding the Company and/or its prospectus. The payroll expense associated with the investor relations personnel is reimbursed by the Sponsor. The Sponsor considers these payroll costs to be offering expenses. The total amount of such payroll expense reimbursements was $672,904 and $1,360,930 for the three and six months ended June 30, 2017.

Acquisition Fees

The Company shall pay the Advisor a fee in an amount equal 3.0% of Company’s contract purchase price of its properties, as defined, as acquisition fees. The total of all acquisition fees and acquisition expenses shall be reasonable, and shall not exceed 6.0% of the contract price of the property.  However, a majority of the directors (including a majority of the independent directors) not otherwise interested in the transaction may approve fees in excess of these limits if they determine the transaction to be commercially competitive, fair and reasonable to the Company. Acquisition fees incurred during the three and six months ended June 30, 2017 were $882,971 and $1,483,571.

Asset Management Fee

The Company shall pay to the Advisor as compensation for the advisory services rendered to the Company, a monthly fee in an amount equal to 0.1% of the Company’s Average Invested Assets, as defined (the “Asset Management Fee”), as of the end of the preceding month. The Asset Management Fee shall be payable monthly on the last day of such month, or the first business day following the last day of such month. The Asset Management Fee, which must be reasonable in the determination of the Company’s independent directors at least annually, 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 Fee not paid as to any fiscal year shall be deferred without interest and may be paid in such other fiscal year as the Advisor shall determine.

Additionally, to the extent the Advisor elects, in its sole discretion, to defer all or any portion of its monthly Asset Management Fee, the Advisor will be deemed to have waived, not deferred, that portion of its monthly Asset Management Fee that is up to 0.025% of the total investment value of the Company’s assets. The total amount of Asset Management Fees incurred in the three and six months ended June 30, 2017 were $196,856 and $308,154, respectively, of which $49,214 and $77,039, respectively, was waived. Asset Management Fees payable at June 30, 2017 were $260,692.

Financing Coordination Fee

Other than with respect to any mortgage or other financing related to a property concurrent with its acquisition, if the Advisor or an affiliate provides a substantial amount of the services (as determined by a majority of the Company’s independent directors) in connection with the post-acquisition financing or refinancing of any debt that the Company obtains relative to a property, then the Company shall pay to the Advisor or such affiliate a financing coordination fee equal to 1.0% of the amount of such financing. Financing coordination fees incurred during the three and six months ended June 30, 2017 were $0 and $87,450, respectively.

Property Management Fees

If the Advisor or any of its affiliates provides a substantial amount of the property management services (as determined by a majority of the Company’s independent directors) for the Company’s properties, then the Company shall pay to the Advisor or such affiliate a property management fee equal to 1.5% of gross revenues from the properties managed. The Company also will reimburse the Advisor and any of its affiliates for property-level expenses that such person pays or incurs on behalf of the Company, including salaries, bonuses and benefits of persons employed by such person, except for the salaries, bonuses and benefits of persons who also serve as one of the Company’s executive officers or as an executive officer of such person. The Advisor or its affiliate may subcontract the performance of its property management duties to third parties and pay all or a portion of its property management fee to the third parties with whom it contracts for these services. For the three and six months ended June 30, 2017, Property Management Fees were $622 and $622. There were no property management fees incurred during the three and six months ended June 30, 2016.

Disposition Fees

For substantial assistance in connection with the sale of properties, the Company shall pay to its Advisor or one of its affiliates 3.0% of the contract sales price, as defined, of each property sold; provided, however, that if, in connection with such disposition, commissions are paid to third parties unaffiliated with our Advisor or its affiliates, the disposition fees paid to our Advisor, our Sponsor, their affiliates and unaffiliated third parties may not exceed the lesser of the competitive real estate commission or 6% of the contract sales price. There were no disposition fees incurred during the three and six months ended June 30, 2017 nor 2016.

Leasing Commission Fees

If a property or properties of the Company becomes unleased and the Advisor or any of its affiliates provides a substantial amount of the services (as determined by a majority of the Company’s independent directors) in connection with the Company’s leasing of the property or properties to unaffiliated third parties, then the Company shall pay to the Advisor or such affiliate leasing commissions equal to 6.0% of the rents due pursuant to such lease for the first ten years of the lease term; provided, however (i) if the term of the lease is less than ten years, such commission percentage will apply to the full term of the lease and (ii) any rents due under a renewal of a lease of an existing tenant upon expiration of the initial lease agreement (including any extensions provided for thereunder) shall accrue a commission of 3.0% in lieu of the aforementioned 6.0% commission. To the extent that an unaffiliated real estate broker assists in such leasing services, any compensation paid by the Company to the Advisor or any of its affiliates will be reduced by the amount paid to such unaffiliated real estate broker. There were no leasing commission fees incurred during the three and six months ended June 30, 2017 nor 2016.

Other Operating Expense Reimbursement

Under the prospectus, total operating expenses of the Company are limited to the greater of 2% of average invested assets or 25% of net income for the four most recently completed fiscal quarters (2%/25% Limitation). If the Company exceeds the 2%/25% Limitation, the Advisor must reimburse the Company the amount by which the aggregate total operating expenses exceeds the limitation, or the Company must obtain a waiver from the Company’s conflicts committee. For purposes of determining the 2%/25% Limitation amount, “average invested assets” means the average monthly book value of the Company’s assets invested directly or indirectly in equity interests and loans secured by real estate during the 12-month period before deducting depreciation, reserves for bad debts or other non-cash reserves. “Total operating expenses” means all expenses paid or incurred by the Company, as determined by GAAP, that are in any way related to the Company’s operation including Asset Management 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, listing and registration of shares of the Company’s common stock; (b) interest payments; (c) taxes; (d) non-cash expenditures such as depreciation, amortization and bad debt reserves; (e) reasonable incentive fees based upon increases in NAV per share; (f) acquisition fees and acquisition expenses (including expenses, relating to potential investments that the Company does not close); and (h) disposition fees on the sale of real property and other expenses connected with the acquisition, disposition and ownership of real estate interests or other property (other than disposition fees on the sale of assets other than real property), including the costs of insurance premiums, legal services, maintenance, repair and improvement of real property.

Operating expense reimbursements for the four fiscal quarters ended June 30, 2017 exceeded the 2%/25% Limitation. The Company’s conflicts committee approved the operating expenses above the 2%/25% Limitation, as they determined that the relationship of the Company’s operating expenses to average invested assets were justified for the four fiscal quarters ended June 30, 2017 given the costs of operating a public company and the early stage of the Company’s operations.

XML

COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2017

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

NOTE 8. COMMITMENTS AND CONTINGENCIES

Economic Dependency

The Company depends on its Sponsor and its Advisor for certain services that are essential to the Company, including the sale of the Company’s shares of common stock, the identification, evaluation, negotiation, origination, acquisition and disposition of investments; management of the daily operations of the Company’s investment portfolio; and other general and administrative responsibilities. In the event that these companies are unable to provide the respective services, the Company will be required to obtain such services from other sources.

Environmental

As an owner of real estate, the Company is subject to various environmental laws of federal, state and local governments. Although there can be no assurance, the Company is not aware of any environmental liability that could have a material adverse effect on its financial condition or results of operations. However, changes in applicable environmental laws and regulations, the uses and conditions of properties in the vicinity of the Company’s properties, the activities of its tenants and other environmental conditions of which the Company is unaware with respect to the property could result in future environmental liabilities.

Tenant Improvements

Pursuant to lease agreements, the Company has an obligation to pay for $2,113,737 in site and tenant improvements to be incurred at June 30, 2017. At June 30, 2017, the Company had $1,520,292 of restricted cash held to fund the improvements.

Legal Matters

From time to time, the Company may become party to legal proceedings that arise in the ordinary course of its business. Other than the below, the Company is not a party to any legal proceeding, nor is the Company aware of any pending or threatened litigation that could have a material adverse effect on the Company’s business, operating results, cash flows or financial condition should such litigation be resolved unfavorably.

The U.S. Securities and Exchange Commission (the “SEC”) is conducting an investigation related to the advertising and sale of securities by the Company in connection with the Registered Offering. The investigation is a non-public factfinding inquiry. It is neither an allegation of wrongdoing nor a finding that violations of law have occurred. In connection with the investigation, the Company and certain affiliates have received and responded to subpoenas from the SEC requesting documents and other information related to the Company and the Registered Offering. The SEC’s investigation is ongoing. The Company has cooperated and intends to continue to cooperate with the SEC in this matter. The Company is unable to predict the likely outcome of the investigation or determine its potential impact, if any, on the Company.

XML

SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2017

Subsequent Events [Abstract]

Subsequent Events [Text Block]

NOTE 9. SUBSEQUENT EVENTS

The Company evaluates subsequent events up until the date the Condensed Consolidated Financial Statements are issued.

Distributions

On July 11, 2017, the Company’s board of directors declared dividends based on daily record dates for the period June 1, 2017 through June 30, 2017 at a rate of $0.0019444 per share per day, or $344,139, on the outstanding shares of the Company’s common stock, which the Company paid on July 11, 2017. Of the $344,139 dividend, $278,380 was reinvested through the Company’s dividend reinvestment plan.

On August 10, 2017, the Company’s board of directors declared dividends based on daily record dates for the period July 1, 2017 through July 31, 2017 at a rate of $0.0018817 per share per day, or $371,708, on the outstanding shares of the Company’s common stock, which the Company paid on August 10, 2017. Of the $371,708 dividend, $303,083 was reinvested through the Company’s dividend reinvestment plan.

Offering Status

Through August 10, 2017, the Company had sold 6,958,810 shares of common stock in the Registered Offering, for aggregate gross offering proceeds of $69,588,103, including 176,548 shares of common stock sold under its Registered DRP Offering for aggregate gross offering proceeds of $1,765,478.

Acquisitions

On July 20, 2017, through a wholly owned subsidiary, the Company acquired a 51,800 square foot industrial property in Richmond, VA, which it leases to Neighborcare Pharmacy of Virginia, LLC, a wholly owned subsidiary of Omnicare, Inc., a wholly owned subsidiary of CVS Health Corporation (“Omnicare”). The lease is guaranteed by Omnicare, Inc. The seller is not affiliated with the Company or the Advisor. The contract purchase price for the Omnicare property was $7,400,000 plus acquisition fees and closing costs of $281,862.

Debt Financing

On July 17, 2017, the Company obtained a $6,000,000 mortgage loan through a nonaffiliated lender. The loan is secured by the Northrop Grumman property. The mortgage loan has a fixed interest rate of 4.4% per annum and matures on March 2, 2021.

Redeemable common stock

For the period from July 1, 2017 through August 9, 2017, the Company redeemed 133,661 shares for $1,296,476.

Amendments to Charter

On August 11, 2017, the board of directors approved and adopted amendments to its charter, which became effective August 14, 2017, to increase the authorized number of shares of the Company’s common stock, $0.001 par value per share, from 200,000,000 to 400,000,000, and to rename and redesignate the authorized shares of the Company’s common stock, $0.001 par value per share, as “Class C” common stock, $0.001 par value per share. On August 11, 2017, the board of directors also approved and adopted Articles Supplementary, effective August 14, 2017, to reclassify and designate 100,000,000 shares of Class C common stock, $0.001 par value per share, as “Class S” common stock, $0.001 par value per share. The foregoing actions are intended to facilitate an offering by the Company of shares of Class S common stock exclusively to non-U.S. persons as defined under Rule 903 promulgated under the Securities Act of 1933 (the “Securities Act”) pursuant to an exemption from the registration requirements of the Securities Act under and in accordance with Regulation S of the Securities Act (the “Class S Offering”). Shares of the Company’s Class S common stock have similar features and rights as shares of the Company’s Class C common stock, including with respect to voting and liquidation, except that shares of Class S common stock offered in the Class S Offering may be sold through brokers or other persons who may be paid upfront and deferred selling commissions and fees.

Also on August 11, 2017, the board of directors approved and adopted a further amendment to the Company’s charter, which became effective August 14, 2017, to change the name of the Company from “Rich Uncles NNN REIT, Inc.” to “RW Holdings NNN REIT, Inc.”

In addition, on August 11, 2017, the board of directors approved, pursuant to Section 7.7.10 of Article 7 of the Company’s charter, an increase in the “Common Shares Ownership Limit”, as such term is defined therein, from 8.0% to 9.8% of the outstanding shares of common stock of the Company. On August 14, 2017, the Company filed a Certificate of Notice reflecting the change in the Common Shares Ownership Limit with the State Department of Assessments and Taxation of Maryland.

Amendments to Advisory Agreement

On August 11, 2017, the board of directors, and all members of the Conflicts Committee of the Board, which comprises all of its independent directors, approved the Company’s entry into a Second Amended and Restated Advisory Agreement (the “Restated Advisory Agreement”) by and among the Company, the Advisor and the Sponsor.

The Restated Advisory Agreement amends and restates the Amended and Restated Advisory Agreement by and among the Company, the Advisor and the Sponsor, dated as of January 17, 2017, in order to reflect, in addition to certain ministerial and conforming changes, (1) amendments to the description of the Advisor’s duties, (2) an expansion of the definition of “Large Investors” to encompass investors with aggregate subscriptions or purchases for at least $1 million in one or more securities offerings sponsored by the Sponsor and to allow the Company to include as Large Investors clients of one or more financial advisors whose clients collectively meet the foregoing requirement, (3) revisions to the terms of certain compensation payable to the Advisor, including rebates paid by the Advisor to Large Investors with respect to the asset management fee, subordinated participation fee and liquidation fee, and a reduction in the applicable percentage used to calculate the subordinated participation fee from 40% to 30%, and (4) conforming edits throughout the Restated Advisory Agreement in connection with the designation and reclassification of the Company’s Class C common stock and Class S common stock described above.

Class S Dividend Reinvestment Plan and Class S Share Repurchase Program

On August 11, 2017, the board of directors approved and adopted, in connection with the Class S Offering described above, (i) a Dividend Reinvestment Plan (the “Class S DRP”) applicable to shares of the Company’s Class S common stock, and (ii) a Share Repurchase Program (the “Class S Repurchase Program”) applicable to shares of the Company’s Class S common stock. The Class S DRP provides any holder of Class S common stock who elects to participate the ability to reinvest dividends and other distributions declared and paid in respect of such participant’s Class S shares to the purchase of additional Class S shares for such participant. The Class S Repurchase Program provides eligible holders of Class S common stock purchased from time to time in the Class S Offering with limited, interim liquidity by enabling them to present for repurchase all or a portion of their Class S shares to the Company. Holders of Class S common stock are required to hold their Class S shares for a minimum of one year before they can participate in the program. The Company will repurchase Class S shares based on the then-applicable NAV per share and the Class S share repurchase will be limited to 2% of the Company’s aggregate applicable NAV per month, up to 5% of its aggregate NAV per quarter, with respect to such Class S shares.

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2017

Accounting Policies [Abstract]

Consolidation, Policy [Policy Text Block]

Basis of Presentation and Principles of Consolidation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information as contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“Codification”), and in conjunction with rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the unaudited Condensed Consolidated Financial Statements do not include certain information and footnote disclosures required by GAAP for audited financial statements. In the opinion of management, the unaudited Condensed Consolidated Financial Statements reflect all adjustments which are of a normal and recurring nature, necessary for a fair and consistent presentation of the financial position and the results for the interim period presented. Operating results for the three and six months ended June 30, 2017 are not necessarily indicative of the results that may be expected for the year ended December 31, 2017. The accompanying unaudited interim financial information should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2016 as filed with the SEC.

The unaudited Condensed Consolidated Financial Statements include the accounts of the Company, the Operating Partnership, and directly wholly owned subsidiaries. All significant intercompany balances and transactions are eliminated in consolidation.

Reclassification, Policy [Policy Text Block]

Reclassifications

Certain amounts in the Company’s prior period consolidated financial statements have been reclassified to conform to the current period presentation. These reclassifications have not changed the results of operations of prior periods.

Comprehensive Income, Policy [Policy Text Block]

Other Comprehensive Income

For all periods presented, other comprehensive income (loss) is the same as net income (loss).

Derivatives, Reporting of Derivative Activity [Policy Text Block]

Derivative Instruments

The Company enters into derivative instruments for risk management purposes to hedge its exposure to cash flow variability caused by changing interest rates on its variable rate mortgage notes payable. The Company records these derivative instruments at fair value in the accompanying consolidated balance sheets. The Company’s mortgage derivative instruments have not been designated as effective hedges and therefore the changes in fair value are recorded as gain or loss on derivative instruments in the accompanying consolidated statement of operations.

Equity Method Investments [Policy Text Block]

Equity in Earnings

The Company’s investment in Rich Uncles REIT I (“REIT I”) represented an approximate 4.36% and 4.39% ownership interest as of June 30, 2017 and December 31, 2016, respectively. Through March 31, 2017, the Company had recorded its share of equity in the earnings (losses) of REIT I based on estimates of REIT I’s results of operations. In July 2017, REIT I’s financial statements for the year ended December 31, 2016 were prepared and audited. The Company’s equity in earnings (losses) of REIT I for the year ended December 31, 2016 should have been equity in earnings of $30,038 rather than equity in losses of $79,271 which was recorded. The Company’s equity pick up for the three months ended March 31, 2017 should have been equity in earnings of $18,813 rather than the equity in earnings of $7,957 which was recorded. For the three months ended June 30, 2017, the Company recorded equity in earnings from REIT I of $159,399, which included $120,165 related to periods prior to April 1, 2017 as described above. For the six months ended June 30, 2017, the Company recorded equity in earnings from REIT I of $167,356, which  included $109,309 related to periods prior to January 1, 2017 as described above.

The following is summarized financial information for REIT I:

 

	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017		2016
Total revenue	$	3,507,951	$	1,440,457	$	6,234,218	$	2,245,359
Net income (loss)	$	937,414	$	(1,268,078)	$	1,331,862	$	(2,400,993)

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

The preparation of the unaudited Condensed Consolidated Financial Statements and the accompanying notes thereto in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited Condensed Consolidated Financial Statements and accompanying notes. Actual results may differ from those estimates.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

New Accounting Standards Issued and Adopted

In January 2017, the FASB issued Accounting Standards Update (“ASU”) No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”) which clarified the definition of a business. The update added further guidance that assists preparers in evaluating whether a transaction will be an acquisition of an asset or a business. The Company expects that most of its acquisitions will qualify as an asset acquisition and therefore acquisition costs are capitalized as part of the cost of the acquired properties. The Company adopted the standard as of October 1, 2016. For periods prior to the adoption of ASU 2017-01, the Company’s financial statements will not be comparable because acquisitions of property qualified as a business and therefore acquisition costs were expensed.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows. ASU 2016-15 addresses certain issues where diversity in practice was identified. It amends existing guidance, which is principles based and often requires judgment to determine the appropriate classification of cash flows as operating, investing or financing activities. In addition, ASU 2016-15 clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. On January 1, 2017, we early adopted this standard in its entirety on a retrospective basis and determined that the only clarification to significantly impact the Company was the classification of distributions received from our equity method investment in Rich Uncles REIT I. The update allows for the election to classify distributions received from equity method investments based on either a cumulative earnings approach or a nature of distribution approach. We have elected the nature of the distribution approach, in which cash flows generated from the operations of an unconsolidated entity are classified as a return on investment (cash inflow from operating activities) and cash flows that were generated from property sales, debt refinancing or sales of our investments are classified as a return of investment (cash inflow from investing activities). We adopted this approach based on the information available to us to determine the nature of the underlying activity that generated the distributions from unconsolidated entities.

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”). ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and restricted cash. Therefore, amounts generally described as restricted cash should be included with cash and cash equivalents when reconciling the beginning of period and end of period total amounts shown on the statement of cash flows, and transfers between cash and cash equivalents and restricted cash are no longer presented within the statement of cash flows. ASU 2016-18 is effective for annual periods beginning after December 15, 2017, including interim periods within those fiscal years. The Company elected to early adopt ASU 2016-18 for the reporting period ended December 31, 2016 and the standard was applied retrospectively for all periods presented. As a result of the adoption of ASU 2016-18, the Company no longer presents the change within restricted cash in the consolidated statement of cash flows.

New Accounting Standards Recently Issued and Not Yet Adopted

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). ASU 2014-09 requires an entity to recognize the revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services.  ASU 2014-09 supersedes the revenue requirements in Revenue Recognition (Topic 605) and most industry-specific guidance throughout the Industry Topics of the Codification.  ASU 2014-09 does not apply to lease contracts within the scope of Leases (Topic 840).  ASU 2014-09 was to be effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and is to be applied retrospectively, with early application not permitted.  In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which defers the effective date of ASU 2014-09 by one year. Early adoption is permitted but not before the original effective date. As the primary source of revenue for the Company is generated through leasing arrangements, which are scoped out of this standard, the Company does not expect the adoption of ASU 2014-09 to have a significant impact on its consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). The amendments in ASU 2016-02 change the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU 2016-02 is effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption of ASU 2016-02 is permitted. The new standard for lease accounting requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The Company is currently evaluating the impact of adopting the new leases standard on its consolidated financial statements.

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

6 Months Ended

Jun. 30, 2017

Accounting Policies [Abstract]

Equity Method Investments [Table Text Block]

The following is summarized financial information for REIT I:

 

	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017		2016
Total revenue	$	3,507,951	$	1,440,457	$	6,234,218	$	2,245,359
Net income (loss)	$	937,414	$	(1,268,078)	$	1,331,862	$	(2,400,993)

XML

REAL PROPERTY (Tables)

6 Months Ended

Jun. 30, 2017

Real Estate [Abstract]

Schedule of Real Estate Properties [Table Text Block]

As of June 30, 2017, the Company’s real estate portfolio consisted of fourteen properties in seven states consisting of eight retail, five office and one industrial property. The following table provides summary information regarding the Company’s real estate as of June 30, 2017:

Property	Location	Acquisition  Date	Property  Type	Land,  Buildings and  Improvements		Tenant Origination  and  Absorption Costs		Accumulated Depreciation and Amortization		Total Investment  in Real  Estate  Property, Net
Accredo	Orlando, FL	6/15/2016	Office	$	9,850,055	$	1,053,638	$	(512,437)	$	10,391,256
Walgreens	Stockbridge, GA	6/21/2016	Retail		4,147,948		705,423		(341,623)		4,511,748
Dollar General	Litchfield, ME	11/4/2016	Retail		1,281,812		116,302		(25,152)		1,372,962
Dollar General	Wilton, ME	11/4/2016	Retail		1,543,776		140,653		(32,190)		1,652,239
Dollar General	Thompsontown, PA	11/4/2016	Retail		1,199,860		106,730		(24,167)		1,282,423
Dollar General	Mt. Gilead, OH	11/4/2016	Retail		1,174,188		111,847		(23,171)		1,262,864
Dollar General	Lakeside, OH	11/4/2016	Retail		1,112,872		100,857		(23,780)		1,189,949
Dollar General	Castalia, OH	11/4/2016	Retail		1,102,086		86,408		(23,105)		1,165,389
Dana	Cedar Park, TX	12/27/2016	Industrial		8,392,906		1,210,874		(265,729)		9,338,051
Northrop Grumman	Melbourne, FL	3/7/2017	Office		12,382,991		1,341,198		(228,383)		13,495,806
exp US Services	Maitland, FL	3/27/2017	Office		5,920,121		388,248		(63,332)		6,245,037
Harley	Bedford, TX	4/13/2017	Retail		13,178,286		-		(64,063)		13,114,222
Wyndham	Summerlin, NV	6/22/2017	Office		9,447,270		669,232		(12,106)		10,104,396
Williams Sonoma	Summerlin, NV	6/22/2017	Office		7,045,835		550,486		(10,225)		7,586,097
				$	77,780,006	$	6,581,896	$	(1,649,463)	$	82,712,439

Schedule Of Real Estate Property Acquisitions [Table Text Block]

During the six months ended June 30, 2017, the Company acquired the following properties:

Property	Acquisition Date	Land		Buildings and Improvements		Tenant Origination and Absorption Costs		Above- Market Lease		Below- Market Lease		Total
Northrop Grumman	3/7/2017	$	1,191,024	$	11,191,967	$	1,341,199	$	-	$	-	$	13,724,190
exp US Services	3/27/2017		785,801		5,134,320		388,248		616,486		-		6,924,855
Harley	4/13/2017		1,145,196		12,033,090		-		-		-		13,178,286
Wyndham	6/22/2017		4,144,069		5,303,201		669,232		-		-		10,116,502
Williams Sonoma	6/22/2017		3,546,744		3,499,091		550,486		-		(364,554)		7,231,767
		$	10,812,834	$	37,161,669	$	2,949,165	$	616,486	$	(364,554)	$	51,175,600

Schedule Of Real Estate Investment Property Purchase Price [Table Text Block]

Purchase price	$	51,175,600
Purchase deposits applied		(500,000)
Acquisition fees to affiliates		(1,483,571)
Payable to seller for acquisition of real estate		(117,803)
Refund from escrow		60,015
Cash paid for acquisition of real estate	$	49,134,241

Schedule Of Lease Expiration Date [Table Text Block]

The noncancellable lease term of the properties acquired during the six months ended June 30, 2017 are as follows:

Property	Lease Expiration
Northrop Grumman	5/31/2021
exp US Services	11/30/2026
Harley	4/12/2042
Wyndham	2/29/2025
Williams Sonoma	10/31/2022

Schedule Of Portfolios Asset Concentration [Table Text Block]

As of June 30, 2017, our portfolio’s asset concentration (greater than 10% of total assets) was as follows:

Property and Location	Net Carrying Value		Percentage of Total Assets
Accredo, FL	$	10,391,256		10.99	%
Northrop Grumman, FL	$	13,495,806		14.27	%
Harley, TX	$	13,114,222		13.87	%
Wyndham, NV	$	10,104,396		10.68	%

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

As of June 30, 2017, the future minimum contractual rent payments due under the Company’s non-cancelable operating leases are as follows:

July 1, 2017 through December 31, 2017	$	2,870,956
2018		6,732,550
2019		6,884,632
2020		7,035,980
2021		5,563,272
2022		4,556,702
Thereafter		20,331,662
	$	53,975,754

Schedule Of Portfolios Revenue Concentration [Table Text Block]

For the six months ended June 30, 2017, our portfolio’s revenue concentration (greater than 10% total revenue) was as follows:

Property and Location	Revenue		Percentage of  Total Revenue
Accredo, FL	$	531,744		20.54	%
Dana, TX	$	465,089		17.97	%
Northrop, FL	$	459,047		17.73	%
Harley, TX	$	326,102		12.60	%

Schedule of Rent Expense [Table Text Block]

As of June 30, 2017, our portfolio’s tenant concentration (greater than 10% of annualized base rent) was as follows:

Property and Location	Effective  Annualized  Base Rent*		Percentage of  Annualized Base  Rent
Accredo, FL	$	899,010		13.56	%
Dana, TX	$	665,917		10.05	%
Northrop, FL	$	1,162,274		17.53	%
exp US Services, FL	$	681,077		10.27	%
Harley, TX	$	900,000		13.58	%
Wyndham, NV	$	798,827		12.05	%

*Effective Annualized Base Rent is calculated based on the monthly base rent at June 30, 2017 for twelve months.

Schedule of Finite-Lived Intangible Assets [Table Text Block]

As of June 30, 2017, the Company’s intangibles were as follows:

	Tenant Origination and Absorption Costs		Above-Market Leases		Below-Market Leases
Cost	$	6,581,896	$	783,115	$	(516,164)
Accumulated amortization		(608,394)		(53,299)		13,838
Net amount	$	5,973,502	$	729,816	$	(502,326)

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

Amortization of intangible assets over the next five years is expected to be as follows:

	Tenant Origination and  Absorption  Costs		Above-Market  Leases		Below-Market  Leases
July 1, 2017 through December 31, 2017	$	559,234	$	48,523	$	(44,772)
2018		1,118,468		97,045		(89,544)
2019		1,118,468		97,045		(89,544)
2020		1,118,468		97,045		(89,544)
2021		702,209		78,994		(89,544)
2022		412,034		63,719		(69,853)
Thereafter		944,621		247,445		(29,525)
	$	5,973,502	$	729,816	$	(502,326)
Weighted-Average Remaining Amortization Period		6.33 years		8.43 years		5.80 years

XML

DEBT (Tables)

6 Months Ended

Jun. 30, 2017

Debt Disclosure [Abstract]

Schedule of Debt [Table Text Block]

As of June 30, 2017, the Company’s mortgage notes payable consisted of the following:

Collateral	Principal Amount		Deferred Loan Costs, net		Net Balance		Contractual Interest Rate (1)	Effective Interest Rate (1)		Loan Maturity
Accredo/Walgreens properties	$	7,200,707	$	(142,659)	$	7,058,048	3.95%		3.95%	7/1/2021
Dana property		4,747,013		(134,248)		4,612,765	4.56%		4.56%	4/1/2023
Six Dollar General properties (2)		3,976,515		(171,369)		3,805,146	4.69%		4.69%	4/1/2022
Wyndham property (3)		5,970,000		(115,276)		5,854,724	One-month LIBOR + 2.05%		4.34%	6/5/2027
Williams Sonoma property (3)		4,740,000		(95,197)		4,644,803	One-month LIBOR + 2.05%		4.05%	6/5/2022
	$	26,634,235	$	(658,749)	$	25,975,486

(1) Contractual interest rate represents the interest rate in effect under the mortgage note payable as of June 30, 2017. Effective interest rate is calculated as the actual interest rate in effect as of June 30, 2017 (consisting of the contractual interest rate and the effect of the interest rate swap, if applicable). For further information regarding the Company’s derivative instruments, see Note 5.

(2) The loan is cross-collateralized with all six Dollar General properties owned by the Company and one Dollar General property owned by REIT I. The deeds of trust for the Company’s six Dollar General properties and the deed of trust for the REIT I Dollar General property contain cross-collateralization and cross default provisions. At June 30, 2017, the outstanding principal balance of the loan on REIT I’s one Dollar General property was $636,916.

(3) The loans on each of the Williams Sonoma and Wyndham properties (collectively, the Property) located in Summerlin, Nevada were originated by Nevada State Bank (Bank). The loans are collateralized by a deed of trust and a security agreement with assignment of rents and fixture filing. In addition, the individual loans are subject to a cross collateralization and cross default agreement whereby any default under, or failure to comply with the terms of any one or both of the loans is an event of default under the terms of both loans. The value of the Property must be in an amount sufficient to maintain a loan to value ratio of no more than 60%. If the loan to value ratio is ever less than 60%, the borrower shall, upon the Bank’s written demand, reduce the principal balance of the loans so that the loan to value ratio is no more than 60%.

Schedule of Maturities of Long-term Debt [Table Text Block]

The following summarizes the future principal repayment of the Company’s mortgage notes payable and unsecured credit facility as of June 30, 2017:

	Mortgage Note Payable		Unsecured Credit Facility		Total
Remaining 2017	$	226,844	$	9,232,184	$	9,459,028
2018		465,064		-		465,064
2019		482,054		-		482,054
2020		498,925		-		498,925
2021		7,068,308		-		7,068,308
2022		8,234,746		-		8,234,746
2023		9,658,294		-		9,658,295
Total principal	$	26,634,235	$	9,232,184	$	35,866,420

Schedule Of Interest Expenses Reconciliation [Table Text Block]

The following is a reconciliation of the components of interest expense for the three and six months ended June 30, 2017 and 2016:

	Three Months Ended June 30, 2016				Six Months Ended June 30, 2016
	2017		2016		2017		2016
Mortgage notes payable
Interest expense (1)	$	184,179	$	10,589	$	265,837	$	10,589
Amortization of deferred financing costs		24,998		1,155		35,386		1,155
Unrealized loss (gain) on interest rate swaps (see Note 5)		104,633		-		104,633		-
Unsecured credit facility
Interest expense		103,877		28,875		143,031		28,875
Amortization of deferred financing costs		481		31		1,118		31
Forfeited loan fee		20,000		-		20,000		-
Total interest expense	$	438,168	$	40,650	$	570,005	$	40,650

(1) As of June 30, 2017, no payments had yet been made with respect to the Company’s interest rate swaps. Accrued interest payable of $2,533 at June 30, 2017 represented the unsettled portion of the interest rate swaps for the period from origination of the interest note swap through June 30, 2017. The Company had no swap agreements as of June 30, 2016.

XML

INTEREST RATE SWAP DERIVATIVES (Tables)

6 Months Ended

Jun. 30, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments [Table Text Block]

The following table summarizes the notional amount and other information related to the Company’s interest rate swaps as of June 30, 2017. The notional amount is an indication of the extent of the Company’s involvement in each instrument at that time, but does not represent exposure to credit, interest rate or market risks:

	June 30, 2017
Derivative Instruments	Number of Instruments	Notional Amount (i)		Reference Rate as of 6/30/2016	Weighted Average Fixed Pay Rate			Weighted Average Remaining Term
Interest Rate Swap Derivatives	2	$	10,710,000	One-month LIBOR + applicable spread/Fixed at 4.05%-4.34%		4.21	%	8.3 years

(i) The notional amount of the Company’s swaps decrease each month to correspond to the outstanding principal balance on the related mortgage. The maximum notional amount is shown above. The minimum notional amount (outstanding principal balance at the maturity date) as of June 30, 2017 was $9,083,700.

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block]

The following table sets forth the fair value of the Company’s derivative instruments as well as their classification in the consolidated balance sheets as of June 30, 2017.

		June 30, 2017
Derivative Instrument	Balance Sheet Location	Number of Instruments	Fair Value
Interest Rate Swaps	Liability – Interest rate swap derivatives, at fair value	2	$	(104,633)

XML

FAIR VALUE DISCLOSURES (Tables)

6 Months Ended

Jun. 30, 2017

Fair Value Disclosures [Abstract]

Schedule of Carrying Values and Estimated Fair Values of Debt Instruments [Table Text Block]

The following were the face value, carrying amount and fair value of the Company’s mortgage notes payable as of June 30, 2017 and December 31, 2016:

June 30, 2017						December 31,2016
Face value		Carrying value		Fair value		Face Value		Carrying Value		Fair Value
$	26,634,235	$	25,975,486	$	26,716,448	$	7,266,145	$	7,113,701	$	7,266,145

Fair Value Measurements, Recurring and Nonrecurring [Table Text Block]

During the six months ended June 30, 2017, the Company measured the following assets and liabilities at fair value (in thousands):

Recurring Basis	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Interest rate swap liabilities	$	107,166	$	-	$	107,166	$	-

XML

RELATED PARTY TRANSACTIONS (Tables)

6 Months Ended

Jun. 30, 2017

Related Party Transactions [Abstract]

Schedule of Related Party Transactions [Table Text Block]

Pursuant to the terms of the agreement, summarized below are the related party costs incurred by the Company for the three and six months ended June 30, 2017:

	Three months ended		Six months ended						Three months ended		Six months ended
	June 30, 2017				June 30, 2017				June 30, 2016				December 31, 2016
	Incurred		Incurred		Receivable		Payable		Incurred		Incurred		Receivable		Payable
Expensed
Acquisition fees	$	-	$	-	$	-	$	-	$	474,122	$	474,122	$	-	$	-
Asset management fees (2)		196,856		308,154		-		260,692		7,566		7,566		-		29,577
Fees to affiliates		196,856		308,154						481,688		481,688
Property management fees*		622		622		-		622		-		-		-		-
Expense reimbursements from Sponsor (1)		(672,904)		(1,360,930)		643		-		-		-		79,862		-
Waiver of asset management fees (2)		(49,214)		(77,039)		-		-		-		-		-		-
Capitalized
Acquisition fees		882,971		1,483,571		13,711		-		-		-		-		274,200
Financing fees		-		87,450		-		-		-		-		-		-
Additional paid-in-capital
Reimbursable organizational and offering expenses (3)		529,991		1,138,121		-		17,297		-		-		-		79,645
Other
Costs reimbursable from Rich Uncles REIT I (4)		-		-		28,571		-		-		-		28,571		-
	$	888,322	$	1,579,949	$	42,925	$	278,611	$	481,688	$	481,688	$	108,433	$	383,422

* Property management fees are presented as property operating expenses.

(1) The Company records payroll costs related to Company employees that answer questions from prospective shareholders. The Sponsor has agreed to reimburse the Company for these investor relations payroll costs which the Sponsor considers to be offering expenses in accordance with the Advisory Agreement.

(2) To the extent the Advisor elects, in its sole discretion to defer all or any portion of its monthly asset management fee, the Advisor will be deemed to have waived, not deferred, that portion up to 0.025% of the total investment value of the Company’s assets.  For the three and six months ended June 30, 2017, the Advisor waived $49,214 and $77,039, respectively, of asset management fees, which are not subject to future recoupment by the Advisor. No asset management fees were waived for the three or six months ended June 30, 2016.

(3) As of June 30, 2017, the Sponsor had incurred $4,452,858 of organizational and offering costs on behalf of the Company. However, the Company is only obligated to reimburse the Sponsor for such organizational and offering expenses to the extent of 3% of gross offering proceeds. The payable related to this obligation is reflected in “Due to affiliates” in the consolidated balance sheets.

(4) The Company incurred $28,571 of costs in conjunction with due diligence for a property acquisition which is owed to the Company from Rich Uncles REIT I and reflected in “Due from affiliates” in the consolidated balance sheets.

XML

BUSINESS AND ORGANIZATION (Details Textual) - USD ($)		1 Months Ended			6 Months Ended	12 Months Ended
	Aug. 10, 2017	Jul. 20, 2016	Oct. 19, 2015	Jun. 24, 2015	Jun. 30, 2017	Dec. 31, 2016	Jul. 15, 2015
Business And Organisation [Line Items]
Authority To Issue of Common Stock			250,000,000
Minimum Investment in Shares Value			$ 500
Common Stock, Shares Authorized			200,000,000		200,000,000	200,000,000
Common Stock, Par or Stated Value Per Share			$ 0.001		$ 0.001	$ 0.001
Preferred Stock, Shares Authorized			50,000,000		50,000,000	50,000,000
Preferred Stock, Par or Stated Value Per Share			$ 0.001		$ 0.001	$ 0.001
Share Price			$ 10.00
Limited Liability Company (LLC) or Limited Partnership (LP), Managing Member or General Partner, Ownership Interest						99.00%
Limited Liability Company (LLC) or Limited Partnership (LP), Members or Limited Partners, Ownership Interest						1.00%
Stock Issued During Period, Shares, New Issues	6,958,810	6,231,455
Stock Issued During Period, Value, New Issues	$ 69,588,103	$ 62,314,551			$ 37,937,373
Distribution Reinvestment Plan [Member]
Business And Organisation [Line Items]
Stock Issued During Period, Shares, New Issues		118,418
IPO [Member]
Business And Organisation [Line Items]
Common Stock, Value, Subscriptions							$ 900,000,000
DRP Offering [Member]
Business And Organisation [Line Items]
Common Stock, Value, Subscriptions							$ 100,000,000
Sponsor [Member]
Business And Organisation [Line Items]
Stock Issued During Period, Shares, New Issues				10,000
Shares Issued, Price Per Share				$ 10.00

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Total revenue	$ 1,729,042	$ 41,466	$ 2,589,241	$ 41,466
Net income (loss)	43,587	(593,679)	(412,747)	(593,769)
Rich Uncles REIT I [Member]
Total revenue	3,507,951	1,440,457	6,234,218	2,245,359
Net income (loss)	$ 937,414	$ (1,268,078)	$ 1,331,862	$ (2,400,993)

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) - USD ($)	3 Months Ended			6 Months Ended		12 Months Ended
	Jun. 30, 2017	Mar. 31, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Income (Loss) from Equity Method Investments	$ 159,399	$ 120,165	$ 0	$ 167,356	$ 0	$ 109,309
Rich Uncles Real Estate Investment Trust 1 [Member]
Percentage of Ownership Interest				4.36%		4.39%
Income (Loss) from Equity Method Investments	$ 0	18,813				$ 30,038
Rich Uncles Real Estate Investment Trust 1 [Member] | Scenario, Previously Reported [Member]
Income (Loss) from Equity Method Investments		$ 7,957				$ 79,271

XML

REAL PROPERTY (Details) - USD ($)	6 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Real Estate [Line Items]
Land, building and improvements	$ 77,780,006
Tenant origination and absorption costs	6,581,896	$ 3,632,731
Accumulated depreciation and amortization	(1,649,463)	(493,185)
Total real estate investments, net	$ 82,712,439	$ 32,751,856
Accredo [Member]
Real Estate [Line Items]
Real Estate, Acquisition, Property Location	Orlando, FL
Walgreens [Member]
Real Estate [Line Items]
Real Estate, Acquisition, Property Location	Stockbridge, GA
Dollar General One [Member]
Real Estate [Line Items]
Real Estate, Acquisition, Property Location	Litchfield, ME
Dollar GeneralTwo [Member]
Real Estate [Line Items]
Real Estate, Acquisition, Property Location	Wilton, ME
Dollar General Three [Member]
Real Estate [Line Items]
Real Estate, Acquisition, Property Location	Thompsontown, PA
Dollar General Four [Member]
Real Estate [Line Items]
Real Estate, Acquisition, Property Location	Mt. Gilead, OH
Dollar General Five [Member]
Real Estate [Line Items]
Real Estate, Acquisition, Property Location	Lakeside, OH
Dollar General Six [Member]
Real Estate [Line Items]
Real Estate, Acquisition, Property Location	Castalia, OH
Dana [Member]
Real Estate [Line Items]
Real Estate, Acquisition, Property Location	Cedar Park, TX
Northrop [Member]
Real Estate [Line Items]
Real Estate, Acquisition, Property Location	Melbourne, FL
Ex Us Services [Member]
Real Estate [Line Items]
Real Estate, Acquisition, Property Location	Maitland, FL
Harley [Member]
Real Estate [Line Items]
Real Estate, Acquisition, Property Location	Bedford, TX
Wyndham [Member]
Real Estate [Line Items]
Real Estate, Acquisition, Property Location	Summerlin, NV
Wiiliams Sonoma [Member]
Real Estate [Line Items]
Real Estate, Acquisition, Property Location	Summerlin, NV
Office Building [Member] | Accredo [Member]
Real Estate [Line Items]
Land, building and improvements	$ 9,850,055
Tenant origination and absorption costs	1,053,638
Accumulated depreciation and amortization	(512,437)
Total real estate investments, net	10,391,256
Office Building [Member] | Northrop [Member]
Real Estate [Line Items]
Land, building and improvements	12,382,991
Tenant origination and absorption costs	1,341,198
Accumulated depreciation and amortization	(228,383)
Total real estate investments, net	13,495,806
Office Building [Member] | Ex Us Services [Member]
Real Estate [Line Items]
Land, building and improvements	5,920,121
Tenant origination and absorption costs	388,248
Accumulated depreciation and amortization	(63,332)
Total real estate investments, net	6,245,037
Office Building [Member] | Harley [Member]
Real Estate [Line Items]
Land, building and improvements	13,178,286
Tenant origination and absorption costs	0
Accumulated depreciation and amortization	(64,063)
Total real estate investments, net	13,114,222
Office Building [Member] | Wyndham [Member]
Real Estate [Line Items]
Land, building and improvements	9,447,270
Tenant origination and absorption costs	669,232
Accumulated depreciation and amortization	(12,106)
Total real estate investments, net	10,104,396
Office Building [Member] | Wiiliams Sonoma [Member]
Real Estate [Line Items]
Land, building and improvements	7,045,835
Tenant origination and absorption costs	550,486
Accumulated depreciation and amortization	(10,225)
Total real estate investments, net	7,586,097
Retail Site [Member] | Walgreens [Member]
Real Estate [Line Items]
Land, building and improvements	4,147,948
Tenant origination and absorption costs	705,423
Accumulated depreciation and amortization	(341,623)
Total real estate investments, net	4,511,748
Retail Site [Member] | Dollar General One [Member]
Real Estate [Line Items]
Land, building and improvements	1,281,812
Tenant origination and absorption costs	116,302
Accumulated depreciation and amortization	(25,152)
Total real estate investments, net	1,372,962
Retail Site [Member] | Dollar GeneralTwo [Member]
Real Estate [Line Items]
Land, building and improvements	1,543,776
Tenant origination and absorption costs	140,653
Accumulated depreciation and amortization	(32,190)
Total real estate investments, net	1,652,239
Retail Site [Member] | Dollar General Three [Member]
Real Estate [Line Items]
Land, building and improvements	1,199,860
Tenant origination and absorption costs	106,730
Accumulated depreciation and amortization	(24,167)
Total real estate investments, net	1,282,423
Retail Site [Member] | Dollar General Four [Member]
Real Estate [Line Items]
Land, building and improvements	1,174,188
Tenant origination and absorption costs	111,847
Accumulated depreciation and amortization	(23,171)
Total real estate investments, net	1,262,864
Retail Site [Member] | Dollar General Five [Member]
Real Estate [Line Items]
Land, building and improvements	1,112,872
Tenant origination and absorption costs	100,857
Accumulated depreciation and amortization	(23,780)
Total real estate investments, net	1,189,949
Retail Site [Member] | Dollar General Six [Member]
Real Estate [Line Items]
Land, building and improvements	1,102,086
Tenant origination and absorption costs	86,408
Accumulated depreciation and amortization	(23,105)
Total real estate investments, net	1,165,389
Industrial [Member] | Dana [Member]
Real Estate [Line Items]
Land, building and improvements	8,392,906
Tenant origination and absorption costs	1,210,874
Accumulated depreciation and amortization	(265,729)
Total real estate investments, net	$ 9,338,051

XML

REAL PROPERTY (Details 1) - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Real Estate [Line Items]
Payments to Acquire Real Estate	$ 49,134,241	$ 15,731,000
Northrop Grumman [Member]
Real Estate [Line Items]
Payments to Acquire Real Estate	13,724,190
exp US Services [Member]
Real Estate [Line Items]
Payments to Acquire Real Estate	6,924,855
Harley [Member]
Real Estate [Line Items]
Payments to Acquire Real Estate	13,178,286
Wyndham [Member]
Real Estate [Line Items]
Payments to Acquire Real Estate	10,116,502
Wiiliams Sonoma [Member]
Real Estate [Line Items]
Payments to Acquire Real Estate	7,231,767
Land [Member]
Real Estate [Line Items]
Payments to Acquire Real Estate	10,812,834
Land [Member] | Northrop Grumman [Member]
Real Estate [Line Items]
Payments to Acquire Real Estate	1,191,024
Land [Member] | exp US Services [Member]
Real Estate [Line Items]
Payments to Acquire Real Estate	785,801
Land [Member] | Harley [Member]
Real Estate [Line Items]
Payments to Acquire Real Estate	1,145,196
Land [Member] | Wyndham [Member]
Real Estate [Line Items]
Payments to Acquire Real Estate	4,144,069
Land [Member] | Wiiliams Sonoma [Member]
Real Estate [Line Items]
Payments to Acquire Real Estate	3,546,744
Buildings and Improvements [Member]
Real Estate [Line Items]
Payments to Acquire Real Estate	37,161,669
Buildings and Improvements [Member] | Northrop Grumman [Member]
Real Estate [Line Items]
Payments to Acquire Real Estate	11,191,967
Buildings and Improvements [Member] | exp US Services [Member]
Real Estate [Line Items]
Payments to Acquire Real Estate	5,134,320
Buildings and Improvements [Member] | Harley [Member]
Real Estate [Line Items]
Payments to Acquire Real Estate	12,033,090
Buildings and Improvements [Member] | Wyndham [Member]
Real Estate [Line Items]
Payments to Acquire Real Estate	5,303,201
Buildings and Improvements [Member] | Wiiliams Sonoma [Member]
Real Estate [Line Items]
Payments to Acquire Real Estate	3,499,091
Above Market Leases [Member]
Real Estate [Line Items]
Payments to Acquire Real Estate	616,486
Above Market Leases [Member] | Northrop Grumman [Member]
Real Estate [Line Items]
Payments to Acquire Real Estate	0
Above Market Leases [Member] | exp US Services [Member]
Real Estate [Line Items]
Payments to Acquire Real Estate	616,486
Above Market Leases [Member] | Harley [Member]
Real Estate [Line Items]
Payments to Acquire Real Estate	0
Above Market Leases [Member] | Wyndham [Member]
Real Estate [Line Items]
Payments to Acquire Real Estate	0
Above Market Leases [Member] | Wiiliams Sonoma [Member]
Real Estate [Line Items]
Payments to Acquire Real Estate	0
Below Market Leases [Member]
Real Estate [Line Items]
Payments to Acquire Real Estate	(364,554)
Below Market Leases [Member] | Northrop Grumman [Member]
Real Estate [Line Items]
Payments to Acquire Real Estate	0
Below Market Leases [Member] | exp US Services [Member]
Real Estate [Line Items]
Payments to Acquire Real Estate	0
Below Market Leases [Member] | Harley [Member]
Real Estate [Line Items]
Payments to Acquire Real Estate	0
Below Market Leases [Member] | Wyndham [Member]
Real Estate [Line Items]
Payments to Acquire Real Estate	0
Below Market Leases [Member] | Wiiliams Sonoma [Member]
Real Estate [Line Items]
Payments to Acquire Real Estate	(364,554)
Tenant origination and absorption costs [Member]
Real Estate [Line Items]
Payments to Acquire Real Estate	2,949,165
Tenant origination and absorption costs [Member] | Northrop Grumman [Member]
Real Estate [Line Items]
Payments to Acquire Real Estate	1,341,199
Tenant origination and absorption costs [Member] | exp US Services [Member]
Real Estate [Line Items]
Payments to Acquire Real Estate	388,248
Tenant origination and absorption costs [Member] | Harley [Member]
Real Estate [Line Items]
Payments to Acquire Real Estate	0
Tenant origination and absorption costs [Member] | Wyndham [Member]
Real Estate [Line Items]
Payments to Acquire Real Estate	669,232
Tenant origination and absorption costs [Member] | Wiiliams Sonoma [Member]
Real Estate [Line Items]
Payments to Acquire Real Estate	$ 550,486

XML

REAL PROPERTY (Details 2) - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Purchase price	$ 51,175,600
Purchase deposits applied	(500,000)
Acquisition fees to affiliates	(1,483,571)
Payable to seller for acquisition of real estate	(117,803)	$ 0
Refund from escrow	60,015
Cash paid for acquisition of real estate	$ 49,134,241	$ 15,731,000

XML

REAL PROPERTY (Details 3)	6 Months Ended
	Jun. 30, 2017
Northrop Grumman [Member]
Lease Expiration Date	May 31, 2021
exp US Services [Member]
Lease Expiration Date	Nov. 30, 2026
Harley [Member]
Lease Expiration Date	Apr. 12, 2042
Wyndham [Member]
Lease Expiration Date	Feb. 28, 2025
Wiiliams Sonoma [Member]
Lease Expiration Date	Oct. 31, 2022

XML

REAL PROPERTY (Details 4) - USD ($)		6 Months Ended
		Jun. 30, 2017	Dec. 31, 2016
Real Estate Investments, Net		$ 86,267,707	$ 36,275,665
Accredo, FL [Member]
Real Estate Investments, Net		10,391,256
Revenue		531,744
Effective Annual Base Rent	[1]	$ 899,010
Accredo, FL [Member] | Portfolio Asstes [Member]
Concentration Risk, Percentage		10.99%
Accredo, FL [Member] | Portfolio Revenue [Member]
Concentration Risk, Percentage		20.54%
Accredo, FL [Member] | Sales Revenue, Net [Member]
Concentration Risk, Percentage		13.56%
Dana, TX [Member]
Revenue		$ 465,089
Effective Annual Base Rent	[1]	$ 665,917
Dana, TX [Member] | Portfolio Revenue [Member]
Concentration Risk, Percentage		17.97%
Dana, TX [Member] | Sales Revenue, Net [Member]
Concentration Risk, Percentage		10.05%
Northrop Grumman, FL [Member]
Real Estate Investments, Net		$ 13,495,806
Revenue		459,047
Effective Annual Base Rent	[1]	$ 1,162,274
Northrop Grumman, FL [Member] | Portfolio Asstes [Member]
Concentration Risk, Percentage		14.27%
Northrop Grumman, FL [Member] | Portfolio Revenue [Member]
Concentration Risk, Percentage		17.73%
Northrop Grumman, FL [Member] | Sales Revenue, Net [Member]
Concentration Risk, Percentage		17.53%
exp US Services, FL [Member]
Effective Annual Base Rent	[1]	$ 681,077
exp US Services, FL [Member] | Sales Revenue, Net [Member]
Concentration Risk, Percentage		10.27%
Harley, TX [Member]
Real Estate Investments, Net		$ 13,114,222
Revenue		326,102
Effective Annual Base Rent	[1]	$ 900,000
Harley, TX [Member] | Portfolio Asstes [Member]
Concentration Risk, Percentage		13.87%
Harley, TX [Member] | Portfolio Revenue [Member]
Concentration Risk, Percentage		12.60%
Harley, TX [Member] | Sales Revenue, Net [Member]
Concentration Risk, Percentage		13.58%
Wyndham, NV [Member]
Real Estate Investments, Net		$ 10,104,396
Effective Annual Base Rent	[1]	$ 798,827
Wyndham, NV [Member] | Portfolio Asstes [Member]
Concentration Risk, Percentage		10.68%
Wyndham, NV [Member] | Sales Revenue, Net [Member]
Concentration Risk, Percentage		12.05%

[1] Effective Annualized Base Rent is calculated based on the monthly base rent at June 30, 2017 for twelve months.

XML

REAL PROPERTY (Details 5)	Jun. 30, 2017 USD ($)
July 1, 2017 through December 31, 2017	$ 2,870,956
2018	6,732,550
2019	6,884,632
2020	7,035,980
2021	5,563,272
2022	4,556,702
Thereafter	20,331,662
Operating Leases, Future Minimum Payments Receivable	$ 53,975,754

XML

REAL PROPERTY (Details 6)	Jun. 30, 2017 USD ($)
Tenant origination and absorption costs [Member]
Cost	$ 6,581,896
Accumulated amortization	(608,394)
Net amount	5,973,502
Above market lease [Member]
Cost	783,115
Accumulated amortization	(53,299)
Net amount	729,816
Below-market lease intangibles [Member]
Cost	(516,164)
Accumulated amortization	13,838
Net amount	$ (502,326)

XML

REAL PROPERTY (Details 7)	6 Months Ended
	Jun. 30, 2017 USD ($)
Above market lease intangibles [Member]
Real Estate [Line Items]
July 1, 2017 through December 31, 2017	$ 48,523
2018	97,045
2019	97,045
2020	97,045
2021	78,994
2022	63,719
Thereafter	247,445
Finite-Lived Intangible Assets, Net	$ 729,816
Weighted-Average Remaining Amortization Period	8 years 5 months 5 days
Tenant origination and absorption costs intangibles [Member]
Real Estate [Line Items]
July 1, 2017 through December 31, 2017	$ 559,234
2018	1,118,468
2019	1,118,468
2020	1,118,468
2021	702,209
2022	412,034
Thereafter	944,621
Finite-Lived Intangible Assets, Net	$ 5,973,502
Weighted-Average Remaining Amortization Period	6 years 3 months 29 days
Below-market lease intangibles [Member]
Real Estate [Line Items]
Weighted-Average Remaining Amortization Period	5 years 9 months 18 days
July 1, 2017 through December 31, 2017	$ (44,772)
2018	(89,544)
2019	(89,544)
2020	(89,544)
2021	(89,544)
2022	(69,853)
Thereafter	(29,525)
Finite-Lived Intangible Assets, Net	$ (502,326)

XML

REAL PROPERTY (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Real Estate [Line Items]
Acquisition Costs, Period Cost	$ 0	$ 73,028	$ 0	$ 73,028
Real Estate Revenue, Net	1,366,901	$ 41,466	2,063,595	$ 41,466
Accounts and Notes Receivable, Net	201,026		201,026		$ 29,975
Accredo and Walgreens acquisitions [Member]
Real Estate [Line Items]
Acquisition Costs, Period Cost	1,038,776		1,723,251
Real Estate Revenue, Net	$ 965,368		$ 1,066,814

XML

DEBT (Details)	6 Months Ended
	Jun. 30, 2017 USD ($)
Mortgage Notes Payable [Member]
Debt Instrument [Line Items]
Principal Amount	$ 26,634,235
Deferred Financing Costs, Net	(658,749)
Net Balance	25,975,486
Mortgage Note Payable One [Member]
Debt Instrument [Line Items]
Principal Amount	7,200,707
Deferred Financing Costs, Net	(142,659)
Net Balance	$ 7,058,048
Contractual Interest Rate	3.95%	[1]
Effective Interest Rate	3.95%	[1]
Loan Maturity	Jul. 01, 2021
Mortgage Note Payable Two [Member]
Debt Instrument [Line Items]
Principal Amount	$ 4,747,013
Deferred Financing Costs, Net	(134,248)
Net Balance	$ 4,612,765
Contractual Interest Rate	4.56%	[1]
Effective Interest Rate	4.56%	[1]
Loan Maturity	Apr. 01, 2023
Mortgage Note Payable Three [Member]
Debt Instrument [Line Items]
Principal Amount	$ 3,976,515	[2]
Deferred Financing Costs, Net	(171,369)	[2]
Net Balance	$ 3,805,146	[2]
Contractual Interest Rate	4.69%	[1],[2]
Effective Interest Rate	4.69%	[1],[2]
Loan Maturity	Apr. 01, 2022
Mortgage Note Payable Four [Member]
Debt Instrument [Line Items]
Principal Amount	$ 5,970,000	[3]
Deferred Financing Costs, Net	(115,276)	[3]
Net Balance	$ 5,854,724	[3]
Contractual Interest Rate	4.34%	[1],[3]
Debt Instrument, Description of Variable Rate Basis	One-month LIBOR + 2.05%	[1],[3]
Effective Interest Rate	4.34%	[1],[3]
Loan Maturity	Jun. 05, 2027
Mortgage Note Payable Five [Member]
Debt Instrument [Line Items]
Principal Amount	$ 4,740,000	[3]
Deferred Financing Costs, Net	(95,197)	[3]
Net Balance	$ 4,644,803	[3]
Contractual Interest Rate	4.05%	[1],[3]
Debt Instrument, Description of Variable Rate Basis	One-month LIBOR + 2.05%	[1],[3]
Effective Interest Rate	4.05%	[1],[3]
Loan Maturity	Jun. 05, 2022

[1] Contractual interest rate represents the interest rate in effect under the mortgage note payable as of June 30, 2017. Effective interest rate is calculated as the actual interest rate in effect as of June 30, 2017 (consisting of the contractual interest rate and the effect of the interest rate swap, if applicable). For further information regarding the Company’s derivative instruments, see Note 5.

[2] The loan is cross-collateralized with all six Dollar General properties owned by the Company and one Dollar General property owned by REIT I. The deeds of trust for the Company’s six Dollar General properties and the deed of trust for the REIT I Dollar General property contain cross-collateralization and cross default provisions. At June 30, 2017, the outstanding principal balance of the loan on REIT I’s one Dollar General property was $636,916.

[3] The loans on each of the Williams Sonoma and Wyndham properties (collectively, the Property) located in Summerlin, Nevada were originated by Nevada State Bank (Bank). The loans are collateralized by a deed of trust and a security agreement with assignment of rents and fixture filing. In addition, the individual loans are subject to a cross collateralization and cross default agreement whereby any default under, or failure to comply with the terms of any one or both of the loans is an event of default under the terms of both loans. The value of the Property must be in an amount sufficient to maintain a loan to value ratio of no more than 60%. If the loan to value ratio is ever less than 60%, the borrower shall, upon the Bank’s written demand, reduce the principal balance of the loans so that the loan to value ratio is no more than 60%.

XML

DEBT (Details 1)	Jun. 30, 2017 USD ($)
Debt Instrument [Line Items]
Remaining 2017	$ 9,459,028
2018	465,064
2019	482,054
2020	498,925
2021	7,068,308
2022	8,234,746
2023	9,658,295
Total principal	35,866,420
Mortgage note payable [Member]
Debt Instrument [Line Items]
Remaining 2017	226,844
2018	465,064
2019	482,054
2020	498,925
2021	7,068,308
2022	8,234,746
2023	9,658,294
Total principal	26,634,235
Unsecured Credit Facility [Member]
Debt Instrument [Line Items]
Remaining 2017	9,232,184
2018	0
2019	0
2020	0
2021	0
2022	0
2023	0
Total principal	$ 9,232,184

XML

DEBT (Details 2) - USD ($)		3 Months Ended		6 Months Ended
		Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Interest expense		$ 438,168	$ 40,650	$ 570,005	$ 40,650
Unrealized loss (gain) on interest rate swaps (see Note 5)		104,633		104,633
Unsecured Debt [Member]
Interest expense		103,877	28,875	143,031	28,875
Amortization of deferred financing costs		481	31	1,118	31
Forfeited loan fee		20,000	0	20,000	0
Secured Debt [Member]
Interest expense	[1]	184,179	10,589	265,837	10,589
Amortization of deferred financing costs		24,998	1,155	35,386	1,155
Unrealized loss (gain) on interest rate swaps (see Note 5)		$ 104,633	$ 0	$ 104,633	$ 0

[1] As of June 30, 2017, no payments had yet been made with respect to the Company’s interest rate swaps. Accrued interest payable of $2,533 at June 30, 2017 represented the unsettled portion of the interest rate swaps for the period from origination of the interest note swap through June 30, 2017. The Company had no swap agreements as of June 30, 2016.

XML

DEBT (Details Textual) - USD ($)	6 Months Ended
	Jun. 30, 2017	Dec. 31, 2016	Jun. 07, 2016
Debt Instrument [Line Items]
Interest Payable	$ 2,533
Stockholders' Equity Attributable to Parent	$ 56,412,226	$ 22,231,106
Loans To Assets Ratio	60.00%
Long-term Debt, Gross	$ 35,866,420
RICH UNCLES NNN REIT, INC. [Member]
Debt Instrument [Line Items]
Stockholders' Equity Attributable to Parent	60,000,000
Unsecured Debt [Member]
Debt Instrument [Line Items]
Long-term Debt, Gross	9,232,184
Mortgages [Member] | Dollar General Big Spring [Member]
Debt Instrument [Line Items]
Long-term Debt, Gross	$ 636,916
Pacific Mercantile Bank [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity			$ 12,000,000
Pacific Mercantile Bank [Member] | Unsecured Debt [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity			$ 12,000,000
Unsecured Credit Agreement [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Interest Rate Description	an interest rate equal to 1% over an independent index, that is the highest rate on corporate loans posted by at least 75% of the thirty (30) largest banks in the United States, known as The Wall Street Journal Prime Rate, as published in the Wall Street Journal.
Line of Credit Facility, Interest Rate at Period End	4.98%
Line of Credit Facility, Expiration Date	Jun. 15, 2017

XML

INTEREST RATE SWAP DERIVATIVES (Details) - Interest Rate Swap [Member]		6 Months Ended
		Jun. 30, 2017 USD ($)	Jun. 30, 2016
Derivatives, Fair Value [Line Items]
Number of Instruments		2
Reference Rate			One-month LIBOR + applicable spread/Fixed at 4.05%-4.34%
Weighted Average Fixed Pay Rate		4.21%
Weighted Average Remaining Term		8 years 3 months 18 days
Maximum [Member]
Derivatives, Fair Value [Line Items]
Notional Amount	[1]	$ 10,710,000

[1] The notional amount of the Company’s swaps decrease each month to correspond to the outstanding principal balance on the related mortgage. The maximum notional amount is shown above. The minimum notional amount (outstanding principal balance at the maturity date) as of June 30, 2017 was $9,083,700.

XML

INTEREST RATE SWAP DERIVATIVES (Details 1)	6 Months Ended
	Jun. 30, 2017 USD ($)	Dec. 31, 2016 USD ($)
Derivatives, Fair Value [Line Items]
Fair Value	$ 104,633	$ 0
Interest Rate Swap [Member]
Derivatives, Fair Value [Line Items]
Balance Sheet Location	Liability – Interest rate swap derivatives, at fair value
Number of Instruments	2
Fair Value	$ (104,633)

XML

INTEREST RATE SWAP DERIVATIVES (Details Textual)	3 Months Ended	6 Months Ended
	Jun. 30, 2017 USD ($)	Jun. 30, 2017 USD ($)
Derivatives, Fair Value [Line Items]
Unrealized Gain (Loss) on Derivatives	$ 104,633	$ 104,633
Interest Rate Swap [Member] | Minimum [Member]
Derivatives, Fair Value [Line Items]
Derivative Liability, Notional Amount	$ 9,083,700	$ 9,083,700

XML

FAIR VALUE DISCLOSURES (Details) - Mortgage note payable [Member] - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items]
Face value	$ 26,634,235	$ 7,266,145
Net Balance	25,975,486	7,113,701
Fair value	$ 26,716,448	$ 7,266,145

XML

FAIR VALUE DISCLOSURES (Details 1) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items]
Interest rate swap liabilities	$ 104,633	$ 0
Interest Rate Swap [Member]
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items]
Interest rate swap liabilities	(104,633)
Fair Value, Measurements, Recurring [Member] | Interest Rate Swap [Member]
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items]
Interest rate swap liabilities	107,166
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Interest Rate Swap [Member]
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items]
Interest rate swap liabilities	0
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Interest Rate Swap [Member]
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items]
Interest rate swap liabilities	107,166
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Interest Rate Swap [Member]
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items]
Interest rate swap liabilities	$ 0

XML

RELATED PARTY TRANSACTIONS (Details) - USD ($)		3 Months Ended				6 Months Ended
		Jun. 30, 2017		Jun. 30, 2016		Jun. 30, 2017		Jun. 30, 2016		Dec. 31, 2016
Related Party Transaction [Line Items]
Expenses incurred To Related Parties		$ 888,322		$ 481,688		$ 1,579,949		$ 481,688
Due from Related Parties		42,925				42,925				$ 108,433
Due to Affiliates		278,611				278,611				383,422
Additional Paid-in Capital [Member]
Related Party Transaction [Line Items]
Due from Related Parties	[1]	0				0				0
Due to Affiliates	[1]	17,297				17,297				79,645
Acquisition Fee [Member]
Related Party Transaction [Line Items]
Expenses incurred To Related Parties		0		474,122		0		474,122
Due from Related Parties		0				0				0
Due to Affiliates		0				0				0
Incurred To Related Parties		(882,971)				(1,483,571)
Asset Management Fees [Member]
Related Party Transaction [Line Items]
Expenses incurred To Related Parties	[2]	196,856		7,566		308,154		7,566
Due from Related Parties	[2]	0				0				0
Due to Affiliates	[2]	260,692				260,692				29,577
Fees to affiliates [Member]
Related Party Transaction [Line Items]
Expenses incurred To Related Parties		196,856		481,688		308,154		481,688
Property Management Fees [Member]
Related Party Transaction [Line Items]
Expenses incurred To Related Parties	[3]	622		0		622		0
Due from Related Parties	[3]	0				0				0
Due to Affiliates	[3]	622				622				0
Expense reimbursements from Sponsor [Member]
Related Party Transaction [Line Items]
Expenses incurred To Related Parties	[4]			0				0
Due from Related Parties	[4]	643				643				79,862
Due to Affiliates	[4]	0				0				0
Incurred To Related Parties	[4]	(672,904)				(1,360,930)
Waiver of Assets Management Fees [Member]
Related Party Transaction [Line Items]
Expenses incurred To Related Parties		49,214		0	[2]	77,039		0	[2]
Due from Related Parties	[2]	0				0				0
Due to Affiliates	[2]	0				0				0
Incurred To Related Parties		(49,214)	[2]	0		(77,039)	[2]	0
Capitalized Acquisition Fees [Member]
Related Party Transaction [Line Items]
Expenses incurred To Related Parties		882,971		0		1,483,571		0
Due from Related Parties		13,711				13,711				0
Due to Affiliates		0				0				274,200
Capitalized Financing Fees [Member]
Related Party Transaction [Line Items]
Expenses incurred To Related Parties		0		0		87,450		0
Due from Related Parties		0				0				0
Due to Affiliates		0				0				0
Reimbursable Organizational and Offering Expenses [Member]
Related Party Transaction [Line Items]
Expenses incurred To Related Parties	[1]	529,991		0		1,138,121		0
Due to Affiliates		17,297				17,297
Costs reimbursable from Rich Uncles REIT I [Member]
Related Party Transaction [Line Items]
Expenses incurred To Related Parties	[5]	0		$ 0		0		$ 0
Due from Related Parties	[5]	28,571				28,571				28,571
Due to Affiliates	[5]	$ 0				$ 0				$ 0

[1] As of June 30, 2017, the Sponsor had incurred $4,452,858 of organizational and offering costs on behalf of the Company. However, the Company is only obligated to reimburse the Sponsor for such organizational and offering expenses to the extent of 3% of gross offering proceeds. The payable related to this obligation is reflected in “Due to affiliates” in the consolidated balance sheets.

[2] To the extent the Advisor elects, in its sole discretion to defer all or any portion of its monthly asset management fee, the Advisor will be deemed to have waived, not deferred, that portion up to 0.025% of the total investment value of the Company’s assets. For the three and six months ended June 30, 2017, the Advisor waived $49,214 and $77,039, respectively, of asset management fees, which are not subject to future recoupment by the Advisor. No asset management fees were waived for the three or six months ended June 30, 2016.

[3] Property management fees are presented as property operating expenses.

[4] The Company records payroll costs related to Company employees that answer questions from prospective shareholders. The Sponsor has agreed to reimburse the Company for these investor relations payroll costs which the Sponsor considers to be offering expenses in accordance with the Advisory Agreement.

[5] The Company incurred $28,571 of costs in conjunction with due diligence for a property acquisition which is owed to the Company from Rich Uncles REIT I and reflected in “Due from affiliates” in the consolidated balance sheets.

XML

RELATED PARTY TRANSACTIONS (Details Textual) - USD ($)		3 Months Ended				6 Months Ended
		Jun. 30, 2017		Jun. 30, 2016		Jun. 30, 2017		Jun. 30, 2016		Dec. 31, 2016
Related Party Transaction [Line Items]
Due to Related Parties		$ 278,611				$ 278,611				$ 383,422
Property Management Fees Percentage						1.50%
Operating Expenses Reimbursement, Maximum Limit Reimbursements						Under the prospectus, total operating expenses of the Company are limited to the greater of 2% of average invested assets or 25% of net income for the four most recently completed fiscal quarters (2%/25% Limitation).
Related Party Transaction, Expenses from Transactions with Related Party		888,322		$ 481,688		$ 1,579,949		$ 481,688
Advisor [Member]
Related Party Transaction [Line Items]
Acquisition Fees Description						The Company shall pay the Advisor a fee in an amount equal 3.0% of Companys contract purchase price of its properties, as defined, as acquisition fees. The total of all acquisition fees and acquisition expenses shall be reasonable, and shall not exceed 6.0% of the contract price of the property.
Financing Coordination Fees Percentage						1.00%
Disposition Fees Description						the Company shall pay to its Advisor or one of its affiliates 3.0% of the contract sales price, as defined, of each property sold; provided, however, that if, in connection with such disposition, commissions are paid to third parties unaffiliated with our Advisor or its affiliates, the disposition fees paid to our Advisor, our Sponsor, their affiliates and unaffiliated third parties may not exceed the lesser of the competitive real estate commission or 6% of the contract sales price.
Leasing Commission Fees Description						the Company shall pay to the Advisor or such affiliate leasing commissions equal to 6.0% of the rents due pursuant to such lease for the first ten years of the lease term; provided, however (i) if the term of the lease is less than ten years, such commission percentage will apply to the full term of the lease and (ii) any rents due under a renewal of a lease of an existing tenant upon expiration of the initial lease agreement (including any extensions provided for thereunder) shall accrue a commission of 3.0% in lieu of the aforementioned 6.0% commission.
Reimbursable Organizational and Offering Expenses [Member]
Related Party Transaction [Line Items]
Due to Related Parties		17,297				$ 17,297
Accrual organization and offering cost		1,858,140				1,858,140
Related Party Transaction, Expenses from Transactions with Related Party	[1]	529,991		0		$ 1,138,121		0
Reimbursable Organizational and Offering Expenses [Member] | Sponsor [Member]
Related Party Transaction [Line Items]
Gross Offering Proceeds Percentage						3.00%
Waiver Of Assets Management Fees [Member]
Related Party Transaction [Line Items]
Due to Related Parties	[2]	0				$ 0				0
Asset Management Fees Waive Percentage						0.025%
Monthly Asset Management Fees Waive Percentage						0.025%
Related Party Transaction, Other Revenues from Transactions with Related Party		49,214	[2]	0		$ 77,039	[2]	0
Related Party Transaction, Expenses from Transactions with Related Party		49,214		0	[2]	77,039		0	[2]
Rich Uncles REIT I [Member]
Related Party Transaction [Line Items]
Accrual organization and offering cost, Related Party		4,452,858				4,452,858
Related Party Transaction, Expenses from Transactions with Related Party						28,571
Sponsor Reimbursement [Member]
Related Party Transaction [Line Items]
Related Party Transaction, Other Revenues from Transactions with Related Party		672,904				1,360,930
Acquisition Fees [Member]
Related Party Transaction [Line Items]
Due to Related Parties		0				0				0
Related Party Transaction, Other Revenues from Transactions with Related Party		882,971				1,483,571
Related Party Transaction, Expenses from Transactions with Related Party		0		474,122		0		474,122
Asset Management Fees [Member]
Related Party Transaction [Line Items]
Due to Related Parties	[2]	260,692				260,692				29,577
Related Party Transaction, Expenses from Transactions with Related Party	[2]	196,856		7,566		308,154		7,566
Financing Coordination Fees [Member]
Related Party Transaction [Line Items]
Related Party Transaction, Expenses from Transactions with Related Party		0				87,450
Property Management Fees [Member]
Related Party Transaction [Line Items]
Due to Related Parties	[3]	622				622				$ 0
Related Party Transaction, Expenses from Transactions with Related Party	[3]	$ 622		$ 0		$ 622		$ 0

[1] As of June 30, 2017, the Sponsor had incurred $4,452,858 of organizational and offering costs on behalf of the Company. However, the Company is only obligated to reimburse the Sponsor for such organizational and offering expenses to the extent of 3% of gross offering proceeds. The payable related to this obligation is reflected in “Due to affiliates” in the consolidated balance sheets.

[2] To the extent the Advisor elects, in its sole discretion to defer all or any portion of its monthly asset management fee, the Advisor will be deemed to have waived, not deferred, that portion up to 0.025% of the total investment value of the Company’s assets. For the three and six months ended June 30, 2017, the Advisor waived $49,214 and $77,039, respectively, of asset management fees, which are not subject to future recoupment by the Advisor. No asset management fees were waived for the three or six months ended June 30, 2016.

[3] Property management fees are presented as property operating expenses.

XML

COMMITMENTS AND CONTINGENCIES (Details Textual) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
COMMITMENTS AND CONTINGENCIES [Line Items]
Other Commitment	$ 2,113,737
Restricted Cash and Cash Equivalents	$ 1,859,899	$ 245,604

XML

SUBSEQUENT EVENTS (Details Textual)					1 Months Ended				6 Months Ended
	Aug. 11, 2017 $ / shares shares	Aug. 10, 2017 USD ($) $ / shares shares	Aug. 09, 2017 USD ($) shares	Jul. 11, 2017 USD ($) $ / shares	Aug. 09, 2017 USD ($) shares	Jul. 20, 2017 USD ($) a	Jul. 17, 2017 USD ($)	Jul. 20, 2016 USD ($) shares	Jun. 30, 2017 USD ($) $ / shares shares	Jun. 30, 2016 USD ($)	Aug. 14, 2017 $ / shares shares	Dec. 31, 2016 $ / shares shares	Oct. 19, 2015 $ / shares shares
Subsequent Event [Line Items]
Dividends									$ 1,311,503
Stock Issued During Period, Shares, New Issues | shares		6,958,810						6,231,455
Stock Issued During Period, Value, New Issues		$ 69,588,103						$ 62,314,551	37,937,373
Payments to Acquire Real Estate									$ 49,134,241	$ 15,731,000
Stock Issued During Period, Shares, Dividend Reinvestment Plan | shares		176,548
Stock Issued During Period, Value, Dividend Reinvestment Plan		$ 1,765,478
Common Stock, Shares Authorized | shares									200,000,000			200,000,000	200,000,000
Common Stock, Par or Stated Value Per Share | $ / shares									$ 0.001			$ 0.001	$ 0.001
Subsequent Event [Member]
Subsequent Event [Line Items]
Dividends				$ 344,139
Stock Issued During Period, Shares, New Issues | shares			0
Stock Issued During Period, Value, New Issues			$ 0
Area of Real Estate Property | a						51,800
Payments to Acquire Real Estate						$ 7,400,000
Stock Issued During Period, Value, Dividend Reinvestment Plan		$ 303,083		$ 278,380
Dividends Payable, Amount Per Share Per Day | $ / shares		$ 0.0018817		$ 0.0019444
Dividends Payable		$ 371,708		$ 344,139
Business Acquisition, Transaction Costs						$ 281,862
Common Shares Ownership Limit Percentage,Minimum	8.00%
Common Shares Ownership Limit Percentage ,Maximum	9.80%
Advisory Agreements Amended Terms	The Restated Advisory Agreement amends and restates the Amended and Restated Advisory Agreement by and among the Company, the Advisor and the Sponsor, dated as of January 17, 2017, in order to reflect, in addition to certain ministerial and conforming changes, (1) amendments to the description of the Advisors duties, (2) an expansion of the definition of Large Investors to encompass investors with aggregate subscriptions or purchases for at least $1 million in one or more securities offerings sponsored by the Sponsor and to allow the Company to include as Large Investors clients of one or more financial advisors whose clients collectively meet the foregoing requirement, (3) revisions to the terms of certain compensation payable to the Advisor, including rebates paid by the Advisor to Large Investors with respect to the asset management fee, subordinated participation fee and liquidation fee, and a reduction in the applicable percentage used to calculate the subordinated participation fee from 40% to 30%, and (4) conforming edits throughout the Restated Advisory Agreement in connection with the designation and reclassification of the Companys Class C common stock and Class S common stock described above.
Common Stock Class S Offering Plans, Description	Holders of Class S common stock are required to hold their Class S shares for a minimum of one year before they can participate in the program. The Company will repurchase Class S shares based on the then-applicable NAV per share and the Class S share repurchase will be limited to 2% of the Companys aggregate applicable NAV per month, up to 5% of its aggregate NAV per quarter, with respect to such Class S shares.
Subsequent Event [Member] | Conventional Mortgage Loan [Member]
Subsequent Event [Line Items]
Debt Instrument, Interest Rate, Stated Percentage							4.40%
Debt Instrument, Maturity Date							Mar. 02, 2021
Proceeds from Issuance of Long-term Debt							$ 6,000,000
Subsequent Event [Member] | Redeemable Common Stock [Member]
Subsequent Event [Line Items]
Stock Issued During Period, Shares, New Issues | shares					133,661
Stock Issued During Period, Value, New Issues					$ 1,296,476
Subsequent Event [Member] | Common Class C [Member]
Subsequent Event [Line Items]
Common Stock, Shares Authorized | shares	400,000,000
Common Stock, Par or Stated Value Per Share | $ / shares	$ 0.001
Subsequent Event [Member] | Common Class S [Member]
Subsequent Event [Line Items]
Common Stock, Shares Authorized | shares											100,000,000
Common Stock, Par or Stated Value Per Share | $ / shares											$ 0.001