10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2017

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

For the transition period from __________ to __________

Commission file number 333-207740

RESOURCE APARTMENT REIT III, Inc.

(Exact name of registrant as specified in its charter)

Maryland	47-4608249
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
1845 Walnut Street, 18th Floor, Philadelphia, PA, 19103
(Address of principal executive offices) (Zip code)
(215) 231-7050
(Registrant's telephone number, including area code)

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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 o		Accelerated filer                  o
Non-accelerated filer  o	(Do not check if a smaller reporting company)	Smaller reporting company þ
		Emerging growth company þ

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 7(a)(2)(B) of the Securities Act. þ

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

As of August 7, 2017, there were 616,466 outstanding shares of Class A common stock, 1,067,952 outstanding shares of Class T common stock, 25,014 outstanding shares of Class R common stock and 21,906 outstanding shares of Class I common stock of Resource Apartment REIT III, Inc.

RESOURCE APARTMENT REIT III, INC.

INDEX TO QUARTERLY REPORT

ON FORM 10-Q

		PAGE
PART I	FINANCIAL INFORMATION
ITEM 1.	Financial Statements
	Consolidated Balance Sheets - June 30, 2017 (unaudited) and December 31, 2016	4
	Consolidated Statements of Operations - For the Three and Six Months Ended June 30, 2017 and 2016 (unaudited)	5
	Consolidated Statement of Changes in Stockholder's Equity - June 30, 2017 (unaudited)	6
	Consolidated Statement of Cash Flows - For the Six Months Ended June 30, 2017 and 2016 (unaudited)	7
	Notes to Consolidated Financial Statements - June 30, 2017 (unaudited)	8
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	32
ITEM 4.	Controls and Procedures	32
PART II	OTHER INFORMATION
ITEM 1.	Legal Proceedings	34
ITEM 1A.	Risk Factors	34
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34
ITEM 3.	Defaults Upon Senior Securities	35
ITEM 6.	Exhibits	36
SIGNATURES		37

Forward-Looking Statements

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

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

• We are dependent on Resource REIT Advisor, LLC (our "Advisor") to select investments and conduct our operations. Our Advisor has a limited operating history and limited experience operating a public company. This limited experience makes our future performance difficult to predict.

• Our executive officers and some of our directors are also officers, directors, managers or key professionals of our Advisor, Resource Securities LLC (our "Dealer Manager") and other entities affiliated with Resource Real Estate, Inc. (our "Sponsor"). As a result, these individuals face conflicts of interest, including significant conflicts created by our Advisor’s compensation arrangements with us and other programs sponsored by our Sponsor and conflicts in allocating time among us and these other programs. These conflicts could result in action or inaction that is not in the best interests of our stockholders.

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

• Our Advisor and its affiliates receive fees in connection with transactions involving the acquisition and management of our investments. These fees are based on the cost of the investment, and not based on the quality of the investment or the quality of the services rendered to us. This may influence our Advisor to recommend riskier transactions to us.

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

• We may lack property diversification if we do not raise substantial funds in our initial public offering.

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

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

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

All forward-looking statements should be read in light of the risks described above and identified in the "Risk Factors" section of our Registration Statement on Form S-11 (File No. 333-207740) filed with the Securities and Exchange Commission, as the same may be amended and supplemented from time to time.

3

PART I. FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

RESOURCE APARTMENT REIT III, INC.

CONSOLIDATED BALANCE SHEETS

	June 30, 2017			December 31, 2016
	(unaudited)
ASSETS
Investments:
Rental properties, net	$	2,436,491		$	2,445,835
Identified intangible assets, net	—			27,870
	2,436,491			2,473,705
Cash	12,801,170			3,351,536
Restricted cash	5,765			7,733
Tenant receivables, net	1,000			788
Due from related parties	3,640			2,352
Contribution receivable	—			210,000
Prepaid expenses and other assets	1,185,077			100,485
Deferred offering costs	4,396,190			2,848,199
Total assets	$	20,829,333		$	8,994,798
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Mortgage note payable, net of deferred financing costs of $33,348 and $34,166	$	1,577,899		$	1,590,834
Accounts payable and accrued expenses	153,649			214,284
Due to related parties	6,501,390			3,616,713
Tenant prepayments	1,364			—
Security deposits	6,100			3,300
Distributions payable	18,862			25,174
Total liabilities	8,259,264			5,450,305
Stockholders’ equity:
Preferred stock, par value $0.01: 10,000,000 shares authorized, none issued and outstanding	—			—
Convertible stock, par value $0.01: 50,000 shares authorized, 50,000 and 50,000 issued and outstanding, respectively	500			500
Class A common stock, par value $0.01: 25,000,000 and 250,000,000 shares authorized, respectively, 616,086 and 384,195 issued and outstanding, respectively (including 6,100 shares declared as a stock dividend on April 25, 2017)	6,161			3,842
Class T common stock, par value $0.01: 25,000,000 and 750,000,000 shares authorized, respectively, 1,067,396 and 114,037 issued and outstanding, respectively (including 10,568 shares declared as a stock dividend on April 25, 2017)	10,674			1,140
Class R common stock, par value $0.01: 750,000,000 and 0 shares authorized, respectively, 0 and 0 issued and outstanding, respectively	—			—
Class I common stock, par value $0.01: 75,000,000 and 0 shares authorized, respectively, 0 and 0 issued and outstanding, respectively	—			—
Additional paid-in capital	14,359,063			4,380,126
Accumulated deficit	(1,806,329		)	(841,115		)
Total stockholders’ equity	12,570,069			3,544,493
Total liabilities and stockholders’ equity	$	20,829,333		$	8,994,798

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

4

RESOURCE APARTMENT REIT III, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

	Three Months Ended   June 30,						Six Months Ended   June 30,
	2017			2016			2017			2016
Revenues:
Rental income	$	51,713		$	—		$	101,154		$	—
Total revenues	51,713			—			101,154			—
Expenses:
Rental operating	19,511			—			40,601			—
Acquisition costs	83,233			—			83,233			—
Property management fees	2,580			—			4,762			—
Management fees - related parties	6,730			—			13,457			—
General and administrative	238,385			26,458			540,404			26,458
Depreciation and amortization expense	23,392			—			48,698			—
Total expenses	373,831			26,458			731,155			26,458
Loss before other income (expense)	(322,118		)	(26,458		)	(630,001		)	(26,458		)
Other income (expense):
Other income	—			—			1,500
Interest income	3,903			—			5,484			—
Interest expense	(13,039		)	—			(25,980		)	—
Net loss	$	(331,254	)	$	(26,458	)	$	(648,997	)	$	(26,458	)
Class A common stock:
Net loss attributable to Class A common stockholders	$	(140,820	)	$	(26,458	)	$	(323,547	)	$	(26,458	)
Net loss per Class A share, basic and diluted	$	(0.25	)	$	(1.04	)	$	(0.65	)	$	(1.15	)
Weighted average Class A common shares outstanding, basic and diluted	559,739			25,511			501,031			23,008
Class T common stock:
Net loss attributable to Class T common stockholders	$	(190,434	)	$	—		$	(325,450	)	$	—
Net loss per Class T share, basic and diluted	$	(0.27	)	$	—		$	(0.67	)	$	—
Weighted average Class T common shares outstanding, basic and diluted	696,020			—			486,845			—

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

5

RESOURCE APARTMENT REIT III, INC.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

FOR THE SIX MONTHS ENDED JUNE 30, 2017

(unaudited)

	Common Stock						Convertible Stock			Additional Paid-in Capital			Accumulated Deficit			Total
	Shares		Amount				Shares	Amount
	A Shares	T Shares	A Shares		T Shares
Balance, at January 1, 2017	384,195	114,037	$	3,842	$	1,140	50,000	$	500	$	4,380,126		$	(841,115	)	$	3,544,493
Issuance of common stock	219,259	936,581	2,192		9,366		—	—		11,023,757			—			11,035,315
Offering costs	—	—	—		—		—	—		(1,328,398		)	—			(1,328,398		)
Cash distributions declared	—	—	—		—		—	—		—			(64,650		)	(64,650		)
Stock dividends	10,956	14,993	110		150		—	—		251,307			(251,567		)	—
Common stock issued through distribution reinvestment plan	1,676	1,785	17		18		—	—		32,271			—			32,306
Net loss	—	—	—		—		—	—		—			(648,997		)	(648,997		)
Balance, at June 30, 2017	616,086	1,067,396	$	6,161	$	10,674	50,000	$	500	$	14,359,063		$	(1,806,329	)	$	12,570,069

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

6

RESOURCE APARTMENT REIT III, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

(unaudited)

	Six Months Ended June 30,
	2017			2016
Cash flows from operating activities:
Net loss	$	(648,997	)	$	(26,458	)
Adjustment to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	48,698			—
Amortization of deferred financing costs	818			—
Changes in operating assets and liabilities:
Restricted cash	1,968			—
Tenant receivable, net	(212		)	—
Due from related parties	(1,288		)	—
Prepaid expenses and other assets	(83,544		)	420
Due to related parties	751,834			23,288
Accounts payable and accrued expenses	(141,375		)	2,750
Security deposits	2,800			—
Net cash used in operating activities	(69,298		)	—
Cash flows from investing activities:
Deposit for property acquisition	(1,000,000		)	—
Capital expenditures	(11,484		)	—
Net cash used in investing activities	(1,011,484		)	—
Cash flows from financing activities:
Net proceeds from issuance of common stock	10,582,825			—
Payments on borrowings	(13,753		)	—
Distributions paid on common stock	(38,656		)	—
Net cash provided by financing activities	10,530,416			—
Net increase in cash	9,449,634			—
Cash at beginning of period	3,351,536			200,000
Cash at end of period	$	12,801,170		$	200,000

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

7

RESOURCE APARTMENT REIT III, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2017

(unaudited)

NOTE 1 - NATURE OF BUSINESS AND OPERATIONS

Resource Apartment REIT III, Inc. (the "Company") was organized in Maryland on July 15, 2015. The Company is offering up to $1.1 billion of shares of its common stock, consisting of up to $1.0 billion of shares in its primary offering and up to $100.0 million of shares pursuant to its distribution reinvestment plan (the "DRIP"). Through June 30, 2017, the Company offered shares of Class A and Class T common stock at prices of $10.00 per share and $9.47 per share, respectively. As of July 3, 2017, the Company ceased offering shares of Class A and Class T common stock in its primary offering. Commencing July 3, 2017, the Company is offering shares of Class R and Class I common stock at prices of $9.52 per share and $9.13 per share, respectively. The initial offering price for shares offered pursuant to the DRIP is $9.60 per share for Class A, $9.09 per share for Class T, $9.14 per share for Class R and $8.90 per share for Class I. The Company will determine its net asset value ("NAV") per share on a date no later than June 30, 2018 (the "NAV Pricing Date"). Commencing on the NAV Pricing Date, if the primary offering is ongoing, the Company will offer Class R and Class I shares in the primary offering at a price equal to the NAV per share for Class R and Class I shares, respectively, plus applicable selling commissions and dealer manager fees, and pursuant to the DRIP at a price equal to 96% of the new primary offering price. If the Company’s primary offering is not ongoing on the NAV Pricing Date, or on the date of any subsequent NAV pricing, it will offer Class A, Class T, Class R and Class I shares pursuant to the DRIP at a price equal to 96% of the most recently determined NAV per share. The Company will update its NAV at least annually following the NAV Pricing Date and further adjust the per share price in the primary offering and DRIP accordingly. The Company qualifies as an emerging growth company. As of June 30, 2017, the Company has raised aggregated offering proceeds of approximately $15.7 million from the sale of 601,207 Class A shares and 1,049,996 Class T shares of common stock.

On June 29, 2016, the Company satisfied the $2.0 million minimum offering amount for its initial public offering, excluding shares purchased by residents of Pennsylvania, New York and Washington. As a result, the Company has broken escrow and issued shares of common stock in the offering. The Company broke escrow in New York on October 11, 2016. Subscription payments received from residents of Pennsylvania and Washington will continue to be held in escrow until the Company has received aggregate subscriptions of at least $50.0 million and $20.0 million, respectively. Having raised the minimum offerings, the offering proceeds were released by the escrow agent to the Company and available for acquisition of properties and other purposes.

Resource REIT Advisor, LLC (formerly known as Resource Apartment Advisor III, LLC) (the "Advisor"), which is an indirect wholly-owned subsidiary of Resource America, Inc. ("RAI"), operating in the real estate, financial fund management and commercial finance sectors, contributed $200,000 to the Company in exchange for 20,000 shares of Class A common stock on August 10, 2015. On June 29, 2016, RAI purchased 222,222 shares of Class A common stock for $2.0 million in the offering. On August 5, 2016, the Advisor exchanged 5,000 shares of common stock for 50,000 shares of convertible stock. Under limited circumstances, these shares may be converted into shares of the Company's Class A common stock satisfying its obligation to pay the Advisor an incentive fee and diluting its stockholders’ interest in the Company.

RAI is a wholly-owned subsidiary of C-III Capital Partners, LLC ("C-III"), a leading commercial real estate services company engaged in a broad range of activities. C-III controls the Advisor, Resource Securities LLC ("Resource Securities"), the Company's dealer manager, and Resource Apartment Manager III, LLC, the Company's property manager. C-III also controls all of the shares of the Company's common stock held by RAI and the Advisor.

The Company’s objective is to take advantage of Resource Real Estate, Inc.’s (its "Sponsor") multifamily investing and lending platforms to invest in apartment communities in order to provide the investor with growing cash flow and increasing asset values. The Company intends to acquire underperforming apartments which it will renovate and stabilize in order to increase rents. To a lesser extent, the Company will also seek to originate and acquire commercial real estate debt secured by apartments having the same characteristics. The Company believes multiple opportunities exist within the apartment industry today and will continue to present themselves over the next few years to real estate investors who possess the following characteristics: (i) extensive experience in multifamily investing, (ii) strong management platforms specializing in operational and financial performance optimization, (iii) financial sophistication allowing them to benefit from complex opportunities, and (iv) the overall scale and breadth of a national real estate platform in both the equity and debt markets. At June 30, 2017 and December 31, 2016, the Company owned one apartment property located in Alexandria, Virginia. At June 30, 2017, the Company was under contract to

8

RESOURCE APARTMENT REIT III, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2017

(unaudited)

purchase its second property, a 220-unit apartment complex located in Jacksonville, Florida, and completed the transaction on July 31, 2017 (see Note 13).

The Company intends to elect and qualify to be taxed as a real estate investment trust ("REIT") for U.S. federal income tax purposes under the provisions of the Internal Revenue Code of 1986, as amended, commencing with its taxable year ending December 31, 2017. As such, to maintain its REIT qualification for U.S. federal income tax purposes, the Company is generally required to distribute at least 90% of its net income (excluding net capital gains) to its stockholders as well as comply with certain other requirements. Accordingly, once qualified as a REIT, the Company generally will not be subject to U.S. federal income taxes to the extent that it annually distributes all of its REIT taxable income to its stockholders. The Company also intends to operate its business in a manner that will permit it to maintain its exemption from registration under the Investment Company Act of 1940, as amended.

The consolidated financial statements and the information and tables contained in the notes thereto are unaudited. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"), pertaining to interim financial statements in Form 10-Q. However, in the opinion of management, these interim financial statements include all the necessary adjustments to fairly present the results of the interim periods presented. The consolidated balance sheet as of December 31, 2016 was derived from the audited consolidated financial statements as of and for the year ended December 31, 2016. The unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. The results of operations for the six months ended June 30, 2017 may not necessarily be indicative of the results of operations for the full year ending December 31, 2017.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying consolidated financial statements have been prepared in conformity with GAAP.

Principles of Consolidation

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

Subsidiaries

Resource Apartment REIT III Holdings, LLC

Resource Apartment REIT III OP, LP

RRE Payne Place Holdings, LLC

RRE Bay Club Holdings, LLC

All intercompany accounts have been eliminated in consolidation.

Use of Estimates

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

Real Estate Investments

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

9

RESOURCE APARTMENT REIT III, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

JUNE 30, 2017

(unaudited)

Buildings	27.5 years
Building improvements	3.0 to 27.5 years
Tenant improvements	Shorter of lease term or expected useful life
Lease intangibles	Weighted average remaining term of related lease

Impairment of Long Lived Assets

When circumstances indicate the carrying value of a property may not be recoverable, the Company will review the asset for impairment. This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition.

These estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors.

If impairment exists, due to the inability to recover the carrying value of a property, an impairment loss will be recorded to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held and used. For properties held for sale, the impairment loss is the adjustment to fair value less estimated cost to dispose of the asset. These assessments have a direct impact on net income because recording an impairment loss results in an immediate negative adjustment to net income. There were no impairment losses recorded on long lived assets during the three and six months ended June 30, 2017 and 2016.

Loans Held for Investment

The real estate loans receivable will be recorded at cost and reviewed for potential impairment at each balance sheet date. A loan receivable is considered impaired when it becomes probable, based on current information, that the Company will be unable to collect all amounts due according to the loan’s contractual terms. The amount of impairment, if any, is measured by comparing the recorded amount of the loan to the present value of the expected cash flows or the fair value of the collateral. If a loan is deemed to be impaired, the Company will record a reserve for loan losses through a charge to income for any shortfall. Failure to recognize impairment would result in the overstatement of the carrying values of the Company’s real estate loans receivable and an overstatement of the Company’s net income.

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

Interest income from loans receivable will be recognized based on the contractual terms of the debt instrument. Fees related to any buydown of the interest rate will be deferred as prepaid interest income and amortized over the term of the loan as an adjustment to interest income. Closing costs related to the purchase of a loan receivable will be amortized over the term of the loan and accreted as an adjustment against interest income.

Allocation of Purchase Price of Acquired Assets

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

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

10

RESOURCE APARTMENT REIT III, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

JUNE 30, 2017

(unaudited)

capitalized above-market or below-market lease values as an increase or reduction to rental income over the remaining non-cancelable terms of the respective leases, which the Company expects will range from one month to one year.

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

The Company also considers information obtained about each property as a result of its pre-acquisition due diligence, marketing and leasing activities in estimating the fair value of the tangible and intangible assets acquired. In estimating carrying costs, management also includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods. Management also estimates costs to execute similar leases including leasing commissions and legal and other related expenses to the extent that such costs have not already been incurred in connection with a new lease origination as part of the transaction.

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

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

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

Revenue Recognition

The Company recognizes minimum rent, including rental abatements and contractual fixed increases attributable to operating leases, on a straight-line basis over the term of the related lease and includes amounts expected to be received in later years in deferred rents. The Company records property operating expense reimbursements due from tenants for common area maintenance, real estate taxes and other recoverable costs in the period the related expenses are incurred.

Tenant Receivables

Tenant receivables are stated in the consolidated financial statements as amounts due from tenants net of an allowance for uncollectible receivables. Payment terms vary and receivables outstanding longer than the payment terms are considered past due. The Company determines its allowance by considering a number of factors, including the length of time receivables are past due, security deposits held, the Company’s previous loss history, the tenants’ current ability to pay their obligations to the Company, the condition of the general economy and the industry as a whole. The Company writes off receivables when they become uncollectible. At June 30, 2017 and December 31, 2016, there were no allowances for uncollectible receivables.

11

RESOURCE APARTMENT REIT III, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

JUNE 30, 2017

(unaudited)

Income Taxes

The Company intends to elect and qualify to be taxed as a REIT, commencing with its taxable year ending December 31, 2017. Accordingly, once qualified as a REIT, the Company will generally not be subject to corporate U.S. federal or state income tax to the extent that it makes qualifying distributions to its stockholders, and provided it satisfies on a continuing basis, through actual investment and operating results, the REIT requirements including certain asset, income, distribution and stock ownership tests. If the Company fails to qualify as a REIT, and does not qualify for certain statutory relief provisions, it will be subject to U.S. federal, state and local income taxes and may be precluded from qualifying as a REIT for the subsequent four taxable years following the year in which it lost its REIT qualification. Accordingly, the Company’s failure to qualify as a REIT could have a material adverse impact on its results of operations and amounts available for distribution to its stockholders.

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

The Company may elect to treat certain of its subsidiaries as taxable REIT subsidiaries ("TRSs"). In general, a TRS may hold assets and engage in activities that it cannot hold or engage in directly and generally may engage in any real estate or non-real estate-related business. A TRS is subject to U.S. federal, state and local corporate income taxes.

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

Earnings Per Share

Basic earnings per share are computed by dividing net income (loss) attributable to common stockholders for each period by the weighted-average common shares outstanding during the period for each share class. Diluted net income (loss) per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted to common stock. For the purposes of calculating earnings per share, all common shares and per share information in the financial statements have been retroactively adjusted for the effect of any stock dividends and stock splits.

In accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") No. 260-10-45, "Earnings Per Share", the Company uses the two-class method to calculate earnings per share. Basic earnings per share is calculated based on dividends declared and the rights of common shares and participating securities in any undistributed earnings, which represents net income remaining after deduction of dividends declared during the period. The undistributed earnings are allocated to all outstanding common shares based on their relative percentage of each class of shares to the total number of outstanding shares. The Company did not have any participating securities outstanding other than Class A common stock and Class T common stock during the periods presented (see Note 9).

Organization and Offering Costs

The Company incurs organization and offering costs in pursuit of its financing. Organization and offering costs (other than selling commissions and dealer manager fees) of the Company are initially being paid by the Advisor on behalf of the Company.

Pursuant to the advisory agreement between the Company and the Advisor, the Company is obligated to reimburse the Advisor for organization and other offering costs paid by the Advisor on behalf of the Company, up to an amount equal to 4.0% of gross offering proceeds as of the termination of the initial public offering if the Company raises less than $500 million in the primary portion of the initial public offering and 2.5% of gross offering proceeds as of the termination of the initial public offering if the Company raises $500 million or more in the primary portion of the initial public offering.

12

RESOURCE APARTMENT REIT III, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

JUNE 30, 2017

(unaudited)

Through June 30, 2017, the Company has charged approximately $360,624 to equity for the payment of offering costs consisting of accounting, advertising, allocated payroll, due diligence, marketing, legal, printing and similar costs. At June 30, 2017, the Advisor has advanced approximately $4.7 million of these costs on behalf of the Company, of which $4.3 million have been deferred at June 30, 2017. A portion of deferred offering costs will be charged to equity upon the sale of each share of common stock sold under the public offering. Such deferred costs will only become a liability of the Advisor to the extent that organization and offering costs incurred by us exceed 4% of the gross proceeds of the initial public offering. However, if the Company raises the maximum offering amount in the primary offering, organization and offering expenses (excluding selling commissions, the dealer manager fee and the distribution and stockholder servicing fee) are estimated to be approximately 1.0% of the gross proceeds of the initial public offering. When recorded by the Company, organization costs are expensed as incurred, which include all expenses incurred by the Company in connection with its formation, including but not limited to legal fees and other costs to incorporate. There can be no assurance that the Company's plans to raise capital will be successful. Prior to the Company breaking escrow, the Advisor incurred approximately $104,266 of formation and other operating expenses on the Company's behalf, which will not be reimbursed to the Advisor.

Outstanding Class T shares issued in the Company's primary offering are subject to a 1% annual distribution and shareholder servicing fee for five years from the date on which such share is issued. The Company will cease paying the distribution and shareholder servicing fee on each Class T share prior to the fifth anniversary of its issuance on the earliest of the following, should any of these events occur: (i) the date at which, in the aggregate, underwriting compensation from all sources equals 10% of the gross proceeds from the Company's primary offering (i.e., excluding proceeds from sales pursuant to the DRIP); (ii) the date on which the Company lists its common stock on a national securities exchange; and (iii) the date of a merger or other extraordinary transaction in which the Company is a party and in which the common stock is exchanged for cash or other securities. The Company cannot predict if or when any of these events will occur.

Outstanding Class R shares issued in the Company's primary offering are also subject to a 1% annual distribution and shareholder servicing fee.  The Company will cease paying the distribution and shareholder servicing fee with respect to Class R shares held in any particular account, and those Class R shares will convert into a number of Class I shares determined by multiplying each Class R share to be converted by the applicable "Conversion Rate," on the earlier of (i) the date after the termination of the primary offering at which, in the aggregate, underwriting compensation from all sources equals 10% of the gross proceeds from its primary offering; (ii) a listing of the Class I shares on a national securities exchange; (iii) a merger or consolidation of the company with or into another entity, or the sale or other disposition of all or substantially all of its assets; and (iv) the end of the month in which the total underwriting compensation (which consists of selling commissions, dealer manager fees and distribution and shareholder servicing fees) paid with respect to such Class R shares purchased in a primary offering is not less than 8.5% (or a lower limit, provided that, in the case of a lower limit, the agreement between the Resource Securities and the broker-dealer in effect at the time Class R shares were first issued to such account sets forth the lower limit and Resource Securities advises the Company's transfer agent of the lower limit in writing) of the gross offering price of those Class R shares purchased in such primary offering (excluding shares purchased through its distribution reinvestment plan).

The Company records distribution and shareholder servicing fees as a reduction to additional paid-in capital and the related liability in an amount equal to the maximum fees payable in relation to the Class T and Class R shares on the date the shares are issued. The liability will be relieved over time, as the fees are paid to the Dealer Manager, or adjusted if the fees are no longer payable pursuant to the conditions described above. For issued Class T shares, the Company has accrued an estimate of the total distribution and shareholder servicing fee of $497,173 for the full five year period at June 30, 2017 based on a total of 5% of the gross proceeds from all Class T shares sold, of which, the Company paid $16,782 cumulatively through June 30, 2017. There were no Class R shares issued and outstanding as of June 30, 2017.

Adoption of New Accounting Standards

 Accounting Standards Issued But Not Yet Effective

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

13

RESOURCE APARTMENT REIT III, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

JUNE 30, 2017

(unaudited)

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

In February 2016, FASB issued ASU No. 2016-02, "Leases", which is intended to improve financial reporting about leasing transactions and requires organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. ASU No. 2016-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is continuing to evaluate this guidance; however, it does not expect the adoption of ASU No. 2016-02 to have a significant impact on its consolidated financial statements.

In June 2016, FASB issued ASU No. 2016-03 "Financial Instruments - Credit Losses", which requires measurement and recognition of expected credit losses for financial assets held. The standard update is effective for the Company beginning January 1, 2019. The Company is continuing to evaluate this guidance; however, it does not expect the adoption of ASU No. 2016-03 to have a significant impact on its consolidated financial statements.

In August 2016, FASB issued ASU No. 2016-15 "Classification of Certain Cash Receipts and Cash Payments", which addresses eight specific cash flow issues with the objective of reducing existing diversity in practice.  The guidance is effective for the Company as of January 1, 2018. Early application is permitted. The adoption of the new requirements is not expected to have a material impact on the Company's consolidated statement of cash flows.

In November 2016, FASB issued ASU No. 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash," which provides guidance on the classification of restricted cash in the statement of cash flows. ASU No. 2016-18 is effective for the Company's fiscal year beginning January 1, 2018 and the Company does not expect the adoption of ASU No. 2016-18 to have a material effect on its consolidated financial statements and disclosures.

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

NOTE 3 - SUPPLEMENTAL CASH FLOW INFORMATION

    The following table presents supplemental cash flow information:

	Six Months Ended June 30,
	2017		2016
Non-cash operating, financing and investing activities:
Offering costs payable	$	1,796,886	$	1,514,089
Cash distributions on common stock declared but not yet paid	18,862		—
Stock issued from distribution reinvestment plan	32,306		—
Stock dividend issued	251,567		—
Subscription of common stock	—		2,000,000
Cash paid during the year for:
Interest	$	20,986	$	—

NOTE 4 - ACQUISITIONS

On August 19, 2016, the Company, through its wholly-owned subsidiary, purchased a multifamily community located in Alexandria, Virgina ("Payne Place"). Payne Place, constructed in 1950, contains 11 units and amenities, including but not limited to storage lockers and a patio with a barbeque area. Payne Place encompasses 6,730 rentable square feet. At June 30, 2017, Payne Place was 100% leased.

14

RESOURCE APARTMENT REIT III, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

JUNE 30, 2017

(unaudited)

Payne Place was acquired for a purchase price of $2.5 million, excluding closing costs. In connection with the acquisition, the Company incurred an acquisition fee of $52,864 to its Advisor pursuant to the advisory agreement and $14,200 of acquisition costs reimbursable to related parties.

In order to finalize the fair values of the acquired assets and liabilities, the Company obtained a third-party appraisal. The valuation for Payne Place was finalized as of December 31, 2016.

The table below summarized the acquisition and the respective fair value assigned:

Multifamily Community Name	City and State	Date of Acquisition	Contractual Purchase Price (1)		Land		Building and Improvements		Furniture, Fixtures and Equipment		Intangible Assets		Other Liabilities			Fair Value Assigned
Payne Place	Alexandria, Virginia	8/19/2016	$	2,500,000	$	1,419,898	$	1,016,451	$	13,710	$	49,941	$	(6,327	)	$	2,493,673

(1) Contractual purchase price excludes closing costs, acquisition expenses, and other immaterial settlement date adjustments and pro-rations.

Total revenues, rental operating expenses, acquisition costs and property management fees included on the consolidated statements of operations for the three and six months ended June 30, 2017 are attributable to Payne Place.

NOTE 5 - RENTAL PROPERTY, NET

At June 30, 2017, the Company owned one property. The following table presents the Company's investment in rental properties:

	June 30, 2017			December 31, 2016
Land	$	1,419,898		$	1,419,898
Building and improvements	1,021,675			1,018,051
Furniture, fixtures and equipment	24,812			21,317
Construction in progress	4,365			—
	2,470,750			2,459,266
Less: accumulated depreciation	(34,259		)	(13,431		)
Total rental property, net	$	2,436,491		$	2,445,835

Depreciation expense for the three and six months ended June 30, 2017 was $10,504 and $20,828, respectively. There was no depreciation expense for the same periods in 2016.

NOTE 6 - IDENTIFIED INTANGIBLE ASSETS, NET

Identified intangible assets, net, consist of in-place rental leases. The value of in-place leases at June 30, 2017 and December 31, 2016 was $0 and $27,870, respectively. Accumulated amortization at June 30, 2017 and December 31, 2016 was $49,941 and $22,071, respectively. Amortization expense for the three months ended June 30, 2017 and 2016 was $12,888 and $0, respectively. Amortization expense for the six months ended June 30, 2017 and 2016 was $27,870 and $0, respectively. At June 30, 2017, the in-place leases were fully amortized. At December 31, 2016, the weighted average remaining life of the rental leases was five months.

NOTE 7 - MORTGAGE NOTES PAYABLE

On December 15, 2016, the Company, through a wholly owned subsidiary, entered into a $1.6 million secured mortgage loan with JPMorgan Chase Bank, N.A., secured by Payne Place (the "Payne Place Loan"). The Payne Place Loan, which matures on January 1, 2047, bears interest at a fixed rate of 3.11% for the first three years. On January 1, 2020, the interest rate converts to a variable rate based on the six month London Interbank Offered Rate ("LIBOR") plus 2.25%, with an all-in rate floor of 2.50% and ceiling of 9.50%. Monthly payments include interest and principal in the amount of approximately $7,000 per month. Any remaining principal balance and all accrued and unpaid interest and fees will be due at maturity. The Company may prepay the Payne Place Loan in full at any time or in part from time to time: (1) during the first year of the loan upon payment of a prepayment premium equal to 3% of the amount prepaid; (2) during the second year of the loan upon payment of a prepayment premium equal

15

RESOURCE APARTMENT REIT III, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

JUNE 30, 2017

(unaudited)

to 2% of the amount prepaid; (3) during the third year of the loan upon payment of a prepayment premium equal to 1% of the amount prepaid; and (4) after the third year of the loan with no prepayment premium.

The Payne Place Loan is guaranteed by RAI until the Company achieves the following: (a) owns a minimum of five apartment complexes; (b) has a minimum net worth of $50.0 million; (c) has liquidity of no less than $5.0 million; and (d) has an aggregate portfolio leverage of no more than 65%.

The following is a summary of the Company's mortgage note payable as of June 30, 2017 and December 31, 2016:

	Outstanding Borrowings		Deferred Financing Costs, net			Carrying Value		Outstanding borrowings		Deferred Financing Costs, net			Carrying Value		Average Monthly Debt Service		Average Monthly Escrow
Collateral	June 30, 2017							December 31, 2016
Payne Place	$	1,611,247	$	(33,348	)	$	1,577,899	$	1,625,000	$	(34,166	)	$	1,590,834	$	6,948	$	1,933

Annual principal payments on the mortgage note payable for each of the next five 12-month periods ending June 30, and thereafter, are as follows:

2018	$	33,743
2019	34,807
2020	35,905
2021	37,038
2022	38,206
Thereafter	1,431,548
	$	1,611,247

Deferred financing costs incurred to obtain financing are amortized over the term of the related debt. During the three months ended June 30, 2017 and 2016, amortization of deferred financing costs of $490 and $0, respectively, was included in interest expense. During the six months ended June 30, 2017 and 2016, amortization of deferred financing costs of $818 and $0, respectively, was included in interest expense. Accumulated amortization at June 30, 2017 and December 31, 2016 was $818 and $2,775, respectively. Estimated amortization of the existing deferred financing costs for the next five 12-month periods ending June 30, are as follows:

2018	$	1,935
2019	1,894
2020	1,851
2021	1,807
2022	1,761
Thereafter	24,100
	$	33,348

At June 30, 2017 and December 31, 2016, the Company had $5,765 and $7,733, respectively, of restricted cash

related to escrow deposits held by the mortgage lender for real estate taxes.

NOTE 8 - CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

The Company is externally managed and advised by the Advisor. Pursuant to the terms of the Advisory Agreement, the Advisor provides the Company with its management team, including its officers, along with appropriate support personnel. The Advisor will be reimbursed for the Company’s allocable share of costs for Advisor personnel, including allocable personnel salaries and benefits. Each of the Company’s officers is an employee of the Sponsor, which is the Advisor's parent company and a wholly-owned subsidiary of RAI. The Company does not expect to have any employees. The Advisor is not obligated to dedicate any specific portion of its time or its employees' time to the Company’s business. The Advisor and any employees of the Sponsor acting on behalf of the Advisor are at all times subject to the supervision and oversight of the Company’s board of directors and have only such functions and authority as the Company delegates to it. Effective April 28, 2017, the Company renewed the advisory

16

RESOURCE APARTMENT REIT III, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

JUNE 30, 2017

(unaudited)

agreement with the Advisor through April 27, 2018. The terms of the agreement are identical to those of the advisory agreement in effect through April 27, 2017.

During the course of the offering, the Advisor will provide offering-related services to the Company and will advance funds to the Company for both operating costs and organization and offering costs. These amounts will be reimbursed to the Advisor from the proceeds from the offering, subject to the aforementioned limits on organization and offering expense reimbursements, although there can be no assurance that the Company’s plans to raise capital will be successful. As of June 30, 2017, the Advisor has advanced organization and offering costs on a cumulative basis on behalf of the Company of approximately $4.7 million.

Relationship with the Advisor

The Advisory Agreement has a one-year term and may be renewed for an unlimited number of successive one-year terms upon the approval of the Conflicts Committee of the Company's board of directors. Under the Advisory Agreement, the Advisor will receive fees and will be reimbursed for its expenses as set forth below:

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

Asset management fees. The Advisor earns a monthly asset management fee equal to 0.083% (one-twelfth of 1.0%) of the cost of each asset at the end of each month, without deduction for depreciation, bad debts or other non-cash reserves. The asset management fee is based only on the portion of the costs or value attributable to the Company’s investment in an asset if the Company does not own all of an asset and does not manage or control the asset.

Disposition fees. The Advisor will earn a disposition fee in connection with the sale of a property equal to the lesser of one-half of the aggregate brokerage commission paid, or if none is paid, 2.0% of the contract sales price.

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

Expense reimbursements. The Company also will pay directly or reimburse the Advisor for all of the expenses paid or incurred by the Advisor or its affiliates on behalf of the Company or in connection with the services provided to the Company in relation to its public offering, including its distribution reinvestment plan offering. This includes all organization and offering costs of up to 4.0% of gross offering proceeds if the Company raises less than $500.0 million in the primary offering and 2.5% of gross offering proceeds if the Company raises more than $500.0 million in the primary offering. Reimbursements also include expenses the Advisor incurs in connection with providing services to the Company, including the Company’s allocable share of costs for Advisor personnel and overhead, out-of-pocket expenses incurred in connection with the selection and acquisition of properties or other real estate related debt investments, whether or not the Company ultimately acquires the investment. However, the Company will not reimburse the Advisor or its affiliates for employee costs in connection with services for which the Advisor earns acquisition or disposition fees. Prior to the Company breaking escrow, the Advisor incurred approximately $104,266 of formation and other operating expenses the Company's behalf, which will not be reimbursed to the Advisor.

On August 18, 2016, the Advisor provided a $555,000 bridge loan (the "Bridge Loan") to the Company. The Company used the proceeds of the Bridge Loan to partially finance the acquisition of Payne Place. The Bridge Loan incurred interest at an annual rate of LIBOR plus 3.00%. On November 1, 2016, the Company repaid the outstanding balance of the Bridge Loan and accrued interest. Interest expense associated with Bridge Loan for the year ended December 31, 2016 was $2,921.

Relationship with Resource Apartment Manager III, LLC

Resource Apartment Manager III, LLC (the "Manager"), an affiliate of the Advisor, will manage real estate properties and real estate-related debt investments and will coordinate the leasing of and will manage construction activities related to the Company’s real estate property pursuant to the terms of the management agreement with the Manager.

Property management fees. The Manager will earn a property management fee equal to 4.5% of actual gross cash receipts from the operations of real property investments that it manages and an oversight fee on any real property investments that are managed by third parties. Property management fees are deducted directly from the property's operating account by the property manager. Any property management fees paid to unaffiliated third party property managers in excess of 4.5% of actual gross receipts will be reimbursed to the Company by the Advisor. At June 30, 2017 and December 31, 2016, the Advisor owes the Company $2,342 and $1,041, respectively, for property management fees in excess of the 4.5% cap paid to the unaffiliated third party property manager.

17

RESOURCE APARTMENT REIT III, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

JUNE 30, 2017

(unaudited)

Construction management fees. The Manager will earn a construction management fee equal to 5.0% of actual aggregate costs to construct improvements to a property.

Debt servicing fees. The Manager will earn a debt servicing fee equal to 2.75% of gross receipts from real estate-related debt investments.

Expense reimbursement. During the ordinary course of business, the Manager or other affiliates of RAI may pay certain shared operating expenses on behalf of the Company. The Company is obligated to reimburse the Manager or other affiliates for such shared operating expenses.

Relationship with Resource Securities

Resource Securities, an affiliate of the Advisor, serves as the Company’s dealer manager and is responsible for marketing the Company’s shares during the public offering.

Dealer manager fee and selling commissions. Pursuant to the terms of the amended and restated dealer manager agreement with Resource Securities, the Company generally pays Resource Securities a selling commission of up to 3.5% of gross offering proceeds from the sale of Class R shares and a dealer manager fee of up to 3.0% of gross offering proceeds from the sale of Class R shares (but the aggregate of such fees shall not exceed 5.5% of gross offering proceeds). The Company generally pays Resource Securities a dealer manager fee of up to 1.5% of gross offering proceeds from the sale of the Class I shares. Prior to July 3, 2017, the Company paid Resource Securities of selling commissions up to 7.0% of gross primary offering proceeds from the sale of Class A shares and up to 2.0% of gross primary offering proceeds from the sale of Class T shares and a dealer manager fee of up to 3.0% of gross primary offering proceeds from the sale of either Class A or Class T shares. Resource Securities allows all selling commissions earned and a portion of the dealer manager fee as a marketing fee to participating broker-dealers. No selling commissions or dealer manager fees are earned by Resource Securities in connection with sales under the distribution reinvestment plan. Additionally, the Company may reimburse Resource Securities for bona fide due diligence expenses. No selling commissions or dealer manager fees were paid in connection with the sales of Class A shares to the Advisor or RAI.

Distribution and shareholder servicing fee. Resource Securities is paid an annual fee of 1.0% of the purchase price (or, once reported, the NAV) per share of Class T common stock sold in the primary offering for five years from the date on which each share is issued up to a total of 5.0%. Resource Securities is also paid an annual fee of 1.0% of the purchase price (or, once reported, the NAV) per share of Class R common stock sold in the primary offering.  The Company will cease paying the distribution and shareholder servicing fee with respect to Class R shares held in any particular account, and those Class R shares will convert into a number of Class I shares determined by multiplying each Class R share to be converted by the applicable "Conversion Rate," on the earlier of (i) the date after the termination of the primary offering at which, in the aggregate, underwriting compensation from all sources equals 10.0% of the gross proceeds from the primary offering; (ii) a listing of the Class I shares on a national securities exchange; (iii) a merger or consolidation of the Company with or into another entity, or the sale or other disposition of all or substantially all of our assets; and (iv) the end of the month in which the total underwriting compensation (which consists of selling commissions, dealer manager fees and distribution and shareholder servicing fees) paid with respect to such Class R shares purchased in a primary offering is not less than 8.5% (or a lower limit, provided that, in the case of a lower limit, the agreement between Resource Securities and the broker-dealer in effect at the time Class R shares were first issued to such account sets forth the lower limit and Resource Securities advises the Company’s transfer agent of the lower limit in writing) of the gross offering price of those Class R shares purchased in such primary offering (excluding shares purchased through the distribution reinvestment plan).

The differences between the Class A, Class T, Class R and Class I shares relate to the fees and selling commissions payable with respect to each class and the differing distribution amounts and expense allocations due to differing ongoing fees and expenses. The per share amount of distributions on Class T and Class R shares will likely be lower than the distributions on the Class A and Class I shares for so long as the distribution and shareholder servicing fee applies because this fee is a class-specific expense. The following table summarizes the differences in fees and selling commissions between the classes of common stock:

18

RESOURCE APARTMENT REIT III, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

JUNE 30, 2017

(unaudited)

	Class A Share	Class T Share		Class R Share		Class I Share
Initial Offering Price	$10.00	$9.47		$9.52		$9.13
Selling Commissions Paid by Company (per shares)	7.0%	2.0%		3.5%	(1)	None
Dealer Manager Fee (per share)	3.0%	3.0%		3.0%	(1)	1.5%
Annual Distributions and Shareholder Servicing Fee	None	1.0%	(2)	1.0%	(3)	None
Initial Offering Price Under the DRIP	$9.60	$9.09		$9.14		$8.90

⁽¹⁾  The aggregate amount paid to Resource Securities for selling commissions and dealer manager fees shall not exceed 5.5% of gross offering proceeds.

⁽²⁾  Each outstanding Class T share issued in the primary offering is subject to an annual distribution and shareholder servicing fee for five years from the date on which such share is issued. The Company will cease paying the distribution and shareholder servicing fee on each Class T share prior to the fifth anniversary of its issuance on the earliest of the following, should any of these events occur: (i) the date at which, in the aggregate, underwriting compensation from all sources equals 10% of the gross proceeds from the Company's primary offering (i.e., excluding proceeds from sales pursuant to the DRIP); (ii) the date on which the Company lists its common stock on a national securities exchange; and (iii) the date of a merger or other extraordinary transaction in which the Company is a party and in which the common stock is exchanged for cash or other securities. The Company cannot predict if or when any of these events will occur.

⁽³⁾  The Company will cease paying the distribution and shareholder servicing fee with respect to Class R shares held in any particular account, and those Class R shares will convert into a number of Class I shares determined by multiplying each Class R share to be converted by the applicable "Conversion Rate," on the earlier of (i) the date after the termination of the primary offering at which, in the aggregate, underwriting compensation from all sources equals 10.0% of the gross proceeds from the primary offering; (ii) a listing of the Class I shares on a national securities exchange; (iii) a merger or consolidation of the Company with or into another entity, or the sale or other disposition of all or substantially all of our assets; and (iv) the end of the month in which the total underwriting compensation (which consists of selling commissions, dealer manager fees and distribution and shareholder servicing fees) paid with respect to such Class R shares purchased in a primary offering is not less than 8.5% (or a lower limit, provided that, in the case of a lower limit, the agreement between Resource Securities and the broker-dealer in effect at the time Class R shares were first issued to such account sets forth the lower limit and Resource Securities advises the Company’s transfer agent of the lower limit in writing) of the gross offering price of those Class R shares purchased in such primary offering (excluding shares purchased through the distribution reinvestment plan). The Company cannot predict if or when any of these events will occur.

Relationship with RAI

Self-insurance funds held in escrow. The receivable from related parties includes escrow funds held by RAI and C-III for self-insurance, which, if unused, will be returned to the Company. The Company's property participates in insurance pools with other properties directly and indirectly managed by RAI and C-III for both property insurance and general liability. RAI and C-III hold the deposits in escrow to fund future insurance claims. The insurance pool covers losses up to $2.5 million and the pool for the general liability covers losses up to the first $50,000 per incident. Catastrophic insurance would cover losses in excess of the insurance pool up to $250.0 million and $51.0 million, respectively. Therefore, unforeseen or catastrophic losses in excess of the Company's insured limits could have a material adverse effect on the Company's financial condition and operating results. During the three and six month ended June 30, 2017, the Company paid $0 and $419 into the insurance pools.

Internal audit fees. RAI performs internal audit services for the Company. The 2017 annual fee for the services provided is $12,500.

RAI co-guarantees the mortgage on Payne Place with the Company until such time as the Company achieves the following: (a) owns a minimum of five apartment complexes; (b) has a minimum net worth of $50.0 million; (c) has liquidity of no less than $5.0 million; and (d) has an aggregate portfolio leverage of no more than 65% (see Note 7 for further details).

The fees earned/expenses incurred and the amounts payable to such related parties are summarized in the following table:

19

RESOURCE APARTMENT REIT III, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

JUNE 30, 2017

(unaudited)

	June 30, 2017		December 31, 2016
Due from related parties:
Advisor	$	2,342	$	1,041
RAI and affiliate - insurance funds held in escrow	1,298		1,311
	$	3,640	$	2,352
Due to related parties:
Advisor:
Acquisition related reimbursements	$	1,079	$	14,050
Asset management fees	—		2
Organization and offering costs	4,706,053		2,848,317
Operating expense reimbursements (including prepaid expenses)	1,309,879		682,661
	$	6,017,011	$	3,545,030
RAI:
Internal Audit Fee	$	750	$	8,250
Operating expense reimbursements	3,238		—
	$	3,988	$	8,250
Resource Securities:
Selling commissions and dealer-manager fees	$	—	$	10,363
Distribution and shareholder servicing fee	480,391		53,015
	$	480,391	$	63,378
Other	$	—	$	55
			—
	$	6,501,390	$	3,616,713

	Three Months Ended   June 30,				Six Months Ended   June 30,
	2017		2016		2017		2016
Fees earned / expenses incurred:
Advisor
Asset management fees (1)	$	6,730	$	—	$	13,457	$	—
Organization and offering costs (2)	$	1,010,962	$	—	$	1,857,736	$	—
Operating expense reimbursement (3)	$	162,526	$	26,458	$	314,205	$	26,458
Resource Securities
Selling commissions and dealer-manager fees (4)	$	403,514	$	—	$	636,033	$	—
Distribution and shareholder servicing fee (4)	$	291,316	$	—	$	443,471	$	—

(1) Included in Management fees on the consolidated statements of operations.

(2) Included in Deferred offering costs and Stockholders' equity on the consolidated balance sheets.

(3) Included in General and administrative on the consolidated statements of operations and excludes third party costs that are advanced by the Advisor.

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

NOTE 9 - EARNINGS PER SHARE

The following table presents a reconciliation of basic and diluted earnings per share for the periods presented as follows:

20

RESOURCE APARTMENT REIT III, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

JUNE 30, 2017

(unaudited)

	Three Months Ended   June 30,						Six Months Ended   June 30,
	2017			2016			2017			2016
Net loss	$	(331,254	)	$	(26,458	)	$	(648,997	)	$	(26,458	)
Less: Class A common stock cash distributions declared	30,709			—			38,400			—
Less: Class T common stock cash distributions declared	22,858			—			26,250			—
Undistributed net loss attributable to common stockholders	$	(384,821	)	$	(26,458	)	$	(713,647	)	$	(26,458	)
Class A common stock:
Undistributed net loss attributable to Class A common stockholders	$	(171,529	)	$	(26,458	)	$	(361,947	)	$	(26,458	)
Class A common stock cash distributions declared	30,709			—			38,400			—
Net loss attributable to Class A common stockholders	$	(140,820	)	$	(26,458	)	$	(323,547	)	$	(26,458	)
Net loss per Class A common share, basic and diluted	$	(0.25	)	$	(1.04	)	$	(0.65	)	$	(1.15	)
Weighted-average number of Class A common shares outstanding, basic and diluted	559,739			25,511			501,031			23,008
Class T common stock:
Undistributed net loss attributable to Class T common stockholders	$	(213,292	)	$	—		$	(351,700	)	$	—
Class T common stock cash distributions declared	22,858			—			26,250			—
Net loss attributable to Class T common stockholders	$	(190,434	)	$	—		$	(325,450	)	$	—
Net loss per Class T common share, basic and diluted	$	(0.27	)	$	—		$	(0.67	)	$	—
Weighted-average number of Class T common shares outstanding, basic and diluted	696,020			—			486,845			—

Diluted earnings per share take into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted to common stock. None of the 50,000 shares of convertible stock (see Note 10) are included in the diluted earnings per share calculations because the necessary conditions for conversion have not been satisfied as of June 30, 2017 (were such date to represent the end of the contingency period). Due to reported losses for the three and six months ended June 30, 2017, common shares potentially issuable to settle accrued distributions are excluded from the calculation of diluted earnings per share calculations, as their inclusion would be anti-dilutive.

NOTE 10 - EQUITY

Preferred Stock

The Company’s charter authorizes the Company to issue 10 million shares of its $0.01 par value preferred stock. At June 30, 2017, no shares of preferred stock were issued or outstanding.

Convertible Stock

The Company’s charter authorizes the Company to issue 50,000 shares of its $0.01 par value convertible stock. On August 5, 2016, the board of directors approved the issuance of 50,000 convertible shares in exchange of 5,000 shares of Class A common stock. At June 30, 2017, the Company had 50,000 shares of $0.01 par value convertible stock outstanding, which are owned by the Advisor. The convertible stock will convert into shares of the Company’s Class A common stock upon the occurrence of (a) the Company having paid distributions to common stockholders that in the aggregate equal 100% of the price at which the Company originally sold the shares plus an amount sufficient to produce a 6% cumulative, non-compounded annual return on the shares at that price; or (b) if the Company lists its common stock on a national securities exchange or the Company consummates a merger pursuant to which consideration received by the stockholders is securities of another issuer that are listed on a national securities exchange.

21

RESOURCE APARTMENT REIT III, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

JUNE 30, 2017

(unaudited)

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

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

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

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

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

Common Stock

The Company’s charter authorizes the issuance of 1 billion shares of common stock with a par value of $0.01 per share, of which, the Company previously allocated 250 million shares of its $0.01 par value common stock as Class A common stock and 750 million shares of its $0.01 par value common stock as Class T common stock. As of June 30, 2017, there were 616,086 shares of Class A common stock and 1,067,396 shares of Class T common stock issued and outstanding.

On June 28, 2017, the Company amended its charter to authorize 750 million shares of its $0.01 par value common stock as Class R common stock, 75 million shares of its $0.01 par value common stock as Class I common stock, 25 million shares of its $0.01 par value common stock as Class A common stock and 25 million shares of its $0.01 par value common stock as Class T common stock. As of July 3, 2017, the Company ceased offering shares of Class A and Class T common stock in its primary offering. As of July 3, 2017, the Company commenced the offering of Class R and Class I common stock in its public offering.

Distributions

Cash Distributions

During the six months ended June 30, 2017, the Company's board of directors declared a cash distribution on the outstanding shares of all classes of its common stock based on daily record dates for the period from March 31, 2017 through July 30, 2017, which were paid on April 28, 2017, May 31, 2017, June 30, 2017 and July 31, 2017. The distributions declared for these periods were calculated based on stockholders of record each day during these periods at a rate of (i) $0.000547945 per share per day less (ii) the applicable daily distribution and shareholder servicing fees accrued for and allocable to any class of common stock. Distributions are generally paid to stockholders on the last business day of the month for which the distribution has accrued. Distributions reinvested pursuant to the distribution reinvestment plan are reinvested in shares of the same class as the shares on which distributions are made.

The table below provides information regarding distributions declared and paid to stockholders during the three and six months ended June 30, 2017:

	Three Months Ended June 30, 2017						Six Months Ended June 30, 2017
	Class A		Class T		Total		Class A		Class T		Total
Distributions declared	$	30,709	$	22,858	$	53,567	$	38,400	$	26,250	$	64,650
Distributions reinvested in shares of common stock paid	$	9,637	$	11,577	$	21,214	$	16,087	$	16,219	$	32,306
Cash distributions paid	17,686		4,541		22,227		32,562		6,094		38,656
Total distributions paid	$	27,323	$	16,118	$	43,441	$	48,649	$	22,313	$	70,962

22

RESOURCE APARTMENT REIT III, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

JUNE 30, 2017

(unaudited)

At June 30, 2017, the Company had accrued $18,862 for the cash distributions paid on July 31, 2017, which is reported in distributions payable in the consolidated balance sheet.

Stock Dividends

On April 25, 2017, the Company's board of directors authorized a stock dividend for the second quarter of 2017, in the amount of 0.01 shares of common stock on each outstanding share of common stock to all common stockholders of record as of the close of business on July 1, 2017. Stock dividends are issued in the same class of shares as the shares for which such stockholder received the stock dividend. The Company issued this stock dividend on July 14, 2017. In accordance with the accounting guidance for stock dividends, these shares were reflected as being issued in the consolidated balance sheets at June 30, 2017.

NOTE 11 - FAIR VALUE MEASURES AND DISCLOSURES

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

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

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

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

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

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

The carrying and fair values of the Company’s mortgage note payable, which was not carried at fair value on the consolidated balance sheets at June 30, 2017 and December 31, 2016, were as follows (in thousands):

	June 30, 2017				December 31, 2016
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Mortgage note payable	$	1,611,247	$	1,415,677	$	1,625,000	$	1,625,000

The carrying amount of the mortgage notes payable presented is the outstanding borrowings excluding premium or discount and deferred finance costs, net. At June 30, 2017, the fair value of mortgage note payable was estimated using a discounted cash flow model and rates available to the Company for debt with similar terms and remaining maturity. At December 31, 2016, the carrying value of the mortgage note payable was estimated to be the fair value due to the recent issuance of the mortgage obtained (Level 3).

23

RESOURCE APARTMENT REIT III, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

JUNE 30, 2017

(unaudited)

NOTE 12 - OPERATING EXPENSE LIMITATION

Under its charter, commencing September 30, 2017, the Company must limit its total operating expenses to the greater of 2% of its average invested assets or 25% of its net income for the four most recently completed fiscal quarters, unless the conflicts committee of the Company’s board of directors has determined that such excess expenses were justified based on unusual and non-recurring factors.

NOTE 13 - SUBSEQUENT EVENTS

On July 27, 2017, the Company's board of directors declared cash distributions on the outstanding shares of all classes of the Company's common stock based on daily record dates from July 31, 2017 through August 30, 2017, from August 31, 2017 through September 28, 2017 and from September 29, 2017 through October 30, 2017, which distributions the Company expects to pay on August 31, 2017, September 29, 2017 and October 31, 2017, respectively. Distributions for these periods have been or will be calculated based on stockholders of record each day during these periods at a rate of (i) $0.001434521 per share per day less (ii) the applicable daily distribution and shareholder servicing fees accrued for and allocable to any class of common stock divided by the number of shares of common stock of such class outstanding as of the close of business of each respective record date.

On July 31, 2017, the Company, through its wholly-owned subsidiary, purchased a multifamily community located in Jacksonville, Florida ("Bay Club"). Bay Club, constructed in 1990, contains 220 units and amenities, including private garages for each unit, a clubhouse, pool, fitness center and business center. The Bay Club property is currently 96% leased. In connection with the transaction, the Company made an earnest money deposit of $1.0 million, which is included in prepaid expenses and other assets on the consolidated balance sheet at June 30, 2017.

Bay Club was acquired for a purchase price of $28.3 million, excluding closing costs. The Company funded the purchase with a combination of offering proceeds and proceeds from a seven-year, $21.5 million secured mortgage loan with CBRE Capital Markets, Inc., an unaffiliated lender, secured by Bay Club (the "Bay Club Mortgage Loan"). The Bay Club Mortgage Loan matures on July 31, 2024. The Bay Club Mortgage Loan bears interest at a rate of LIBOR plus 1.87%, with a maximum interest rate of 5.75%. Monthly payments are interest only for the first 24 months. Beginning on August 1, 2019, the Company will pay both principal and interest based on 30 year amortization. Any remaining principal balance and all accrued and unpaid interest and fees will be due at maturity. The Company may prepay the Bay Club Mortgage Loan in full at any time (1) after July 31, 2019 and until April 30, 2024 upon payment of a prepayment premium equal to 1% of the principal amount prepaid; and (2) after April 30, 2024 with no prepayment premium. The non-recourse carveouts under the loan documents for the Bay Club Mortgage Loan are guaranteed by the Company.

The Company has evaluated subsequent events through the filing of these financial statements and determined no events have occurred, other than those discussed above that would require adjustments to or additional disclosure in the consolidated financial statements.

24

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (unaudited)

The following discussion and analysis should be read in conjunction with the accompanying financial statements of Resource Apartment REIT III, Inc. and the notes thereto. See also "Cautionary Note Regarding Forward-Looking Statements" preceding Part I, as well as the notes to our financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations provided in our Annual Report on Form 10-K for the year ended December 31, 2016. As used herein, the terms "we," "our" and "us" refer to Resource Apartment REIT III, Inc., a Maryland corporation, and, as required by context, Resource Apartment REIT III OP, LP, a Delaware limited partnership, and to their subsidiaries.

Overview

Resource Apartment REIT III, Inc. is a Maryland corporation that intends to take advantage of its sponsor's multifamily investing and lending platforms to invest in apartment communities in order to provide stockholders with growing cash flow and increasing asset values. We intend to acquire underperforming apartments which we will renovate and stabilize in order to increase rents. To a lesser extent, we will also seek to originate and acquire commercial real estate debt secured by apartments. We cannot predict, however, the ultimate allocation of net proceeds from our initial public offering between property acquisitions and debt investments at this time because this allocation will depend, in part, on market conditions and opportunities and on the amount of financing that we are able to obtain with respect to the types of assets in which we seek to invest. If we are not able to raise a substantial amount of offering proceeds, our plan of operation will be scaled down considerably, and we would expect to acquire a limited number of assets. We may make adjustments to our target portfolio based on real estate market conditions and investment opportunities. We will not forego a good investment because it does not precisely fit our expected portfolio composition. Thus, to the extent that Resource REIT Advisor, LLC (formerly known as Resource Apartment Advisor III, LLC) (our "Advisor") presents us with attractive investment opportunities that allow us to meet the real estate investment trust ("REIT") requirements under the Internal Revenue Code of 1986, as amended, our portfolio composition may vary from what we initially expect.

Results of Operations

We were formed on July 15, 2015. We commenced active real estate operations on August 19, 2016 with the acquisition of our first multifamily property. As such, we had limited operating results during the three and six months ended June 30, 2016. At June 30, 2017, we owned one multifamily property. Our management is not aware of any material trends or uncertainties, favorable or unfavorable, other than national economic conditions affecting our targeted portfolio or the U.S. apartment community industry, which may reasonably be expected to have a material impact on either capital resources or the revenues or incomes to be derived from the operation of such assets or those that we expect to acquire.

The following table sets forth the results of our operations for the three and six months ended June 30, 2017 and 2016:

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Revenues:
Rental income	$	51,713		$	—		$	101,154		$	—
Total revenues	51,713			—			101,154			—
Expenses:
Rental operating	19,511			—			40,601			—
Property management fees	2,580			—			4,762			—
Management fees - related parties	6,730			—			13,457			—
General and administrative	238,385			26,458			540,404			26,458
Depreciation and amortization expense	23,392			—			48,698			—
Total expenses	373,831			26,458			731,155			26,458
Loss before other income (expense)	(322,118		)	(26,458		)	(630,001		)	(26,458		)
Other income (expense):
Other income	—			—			1,500			—
Interest income	3,903			—			5,484			—
Interest expense	(13,039		)	—			(25,980		)	—
Net loss	$	(331,254	)	$	(26,458	)	$	(648,997	)	$	(26,458	)

25

During the three and six month ended June 30, 2017 and 2016, we incurred the following general and administrative expenses:

	Three Months Ended June 30,					Six Months Ended June 30,
	2017			2016		2017			2016
Allocated payroll and benefits	$	128,011		$	—	$	251,409		$	—
Directors' fees	31,015			—		66,098			—
Allocated rent	22,481			—		47,491			—
Professional fees	24,303			26,038		74,679			26,038
Travel and entertainment	10,283			—		13,788			—
Insurance	(37,267		)	324		(7,323		)	324
IT related expenses	41,993			96		71,476			96
Other	17,566			—		22,786			—
	$	238,385		$	26,458	$	540,404		$	26,458

As a result of the timing of the commencement of our public offering and our active real estate operations, comparative operating results are not relevant to a discussion of operations for the two periods represented. During the three months ended June 30, 2017, we received an insurance refund of $67,544 which offset the insurance expense of $30,277 and $60,221 for the three and six months ended June 30, 2017. We expect revenues and expenses to increase in future periods as we acquire additional investments.

Liquidity and Capital Resources

We are offering and selling to the public in our public offering up to $1.1 billion in shares of common stock, consisting of up to $1.0 billion of shares in our primary offering and up to $100.0 million of shares pursuant to our distribution reinvestment plan ("DRIP"). Through June 30, 2017, we offered shares of Class A and Class T common stock in our primary offering at prices of $10.00 per share and $9.47 per share, respectively. As of July 3, 2017, we ceased offering shares of Class A and Class T common stock in our primary offering. Commencing July 3, 2017, we are offering shares of Class R and Class I common stock in our primary offering at prices of $9.52 per share and $9.13 per share, respectively. The initial offering price for shares offered pursuant to the DRIP is $9.60 per share for Class A, $9.09 per share for Class T, $9.14 per share for Class R and $8.90 per share for Class I.

We anticipate deriving the capital required to purchase real estate investments and conduct our operations from the proceeds of our initial public offering and any future offerings we may conduct, from secured or unsecured financings from banks or other lenders and from proceeds from the sale of assets. In addition, our Advisor has and will advance funds to us for certain accrued organization and offering costs. As of June 30, 2017, we have purchased one property using both offering proceeds and debt financing.

If we are unable to raise substantial funds in the offering, we will make fewer investments resulting in less diversification in terms of the type, number and size of investments we make and the value of an investment in us will fluctuate with the performance of the specific assets we acquire. Further, we will have certain fixed operating expenses, including certain expenses as a publicly offered REIT, regardless of whether we are able to raise substantial funds in our offering. Our inability to raise substantial funds would increase our fixed operating expenses as a percentage of gross income, reducing our net income and limiting our ability to make distributions. As of June 30, 2017, we have raised approximately $15.7 million in our public offering.

We intend to make reserve allocations as necessary to aid our objective of preserving capital for our investors by supporting the maintenance and viability of properties we acquire in the future. If reserves and any other available income become insufficient to cover our operating expenses and liabilities, it may be necessary to obtain additional funds by borrowing, refinancing properties or liquidating our investment in one or more properties, debt investments or other assets we may hold. We cannot assure you that we will be able to access additional funds when we need them or upon acceptable terms.

On December 15, 2016, we, through a wholly owned subsidiary, entered into a 30-year secured mortgage loan with JPMorgan Chase Bank, N.A., an unaffiliated lender, for borrowings of approximately $1.6 million secured by Payne Place (the "Payne Place Mortgage Loan"). The Payne Place Mortgage Loan matures on January 1, 2047. The Payne Place Mortgage Loan bears interest at an initial fixed rate of 3.11% until January 1, 2020. Beginning January 1, 2020, the loan will bear interest at a rate of LIBOR plus 2.25%. Monthly payments include repayments of principal and interest. Any remaining principal balance and all

26

accrued and unpaid interest and fees will be due at maturity. We may prepay the Payne Place Mortgage Loan in full at any time or in part from time to time: (1) during the first year of the loan upon payment of a prepayment premium equal to 3% of the amount prepaid; (2) during the second year of the loan upon payment of a prepayment premium equal to 2% of the amount prepaid; (3) during the third year of the loan upon payment of a prepayment premium equal to 1% of the amount prepaid; and (4) after the third year of the loan with no prepayment premium. The Payne Place Mortgage Loan is guaranteed by us and RAI.

Although there is no limit on the amount we can borrow to acquire a single real estate investment, we may not leverage our assets with debt financing such that our borrowings are in excess of 300% of our net assets unless a majority of our independent directors find substantial justification for borrowing a greater amount. Examples of such a substantial justification include, without limitation, obtaining funds for the following: (i) to repay existing obligations, (ii) to pay sufficient distributions to maintain REIT status, or (iii) to buy an asset where an exceptional acquisition opportunity presents itself and the terms of the debt agreement and the nature of the asset are such that the debt does not increase the risk that we would become unable to meet our financial obligations as they became due. On a total portfolio basis, however, based on current lending market conditions, we expect to leverage our assets in an amount equal to 55% to 60% of the cost of our assets.

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

Organization and Offering Costs

We incur organization and offering costs in pursuit of our financing. Our organization and offering costs (other than selling commissions, the dealer manager fees and distribution and shareholder servicing fees) are initially being paid by the Advisor on our behalf. Organization costs include all expenses that we incur in connection with our formation, including but not limited to legal fees and other costs to incorporate.

Pursuant to the Advisory Agreement, we will be obligated to reimburse the Advisor for organization and offering costs paid by the Advisor on our behalf, up to an amount equal to 4.0% of gross offering proceeds as of the termination of this offering if we raise less than $500.0 million in the primary offering, and 2.5% of gross offering proceeds as of the termination of this offering if we raise $500.0 million or more in the primary offering. However, if we raise the maximum offering amount in the primary offering, we expect organization and offering expenses (other than selling commissions, the dealer manager fee and the distribution and shareholder servicing fee) to be approximately $10.0 million or 1% of gross offering proceeds. These organization and offering expenses include all actual expenses (other than selling commissions, the dealer manager fee and the distribution and shareholder servicing fee), including reimbursements to our Advisor for the portion of named executive officer salaries allocable to activities related to this offering, to be incurred on our behalf and paid by us in connection with the offering.

Through June 30, 2017, we have charged approximately $361,000 to equity for the payment of offering costs consisting of accounting, advertising, allocated payroll, due diligence, marketing, legal, printing and similar costs. At June 30, 2017, the Advisor has incurred approximately $4.7 million of these costs on our behalf, of which approximately $4.3 million has been deferred at June 30, 2017. A portion of deferred offering costs will be charged to equity upon the sale of each share of common stock sold under the public offering. Such costs will only become a liability of the Advisor to the extent that organization and offering expenses (excluding selling commissions, dealer manager fees and and the distribution and shareholder servicing fee) incurred by us exceed 4.0% of the gross proceeds of the initial public offering if we raise less than $500.0 million or 2.5% of gross proceeds of the initial public offering if we raise $500.0 million or more. If, however, we raise the maximum offering amount in the primary offering, organization and offering expenses (excluding selling commissions, dealer manager fees and the distribution and shareholder servicing fee) are estimated to be approximately 1.0% of the gross proceeds of the initial public offering. When recorded by us, organization costs are expensed as incurred, which include all expenses incurred by us in connection with our formation, including but not limited to legal fees and other costs to incorporate. There can be no assurance that our plans to raise capital will be successful.

Outstanding Class T shares issued in our primary offering are subject to a 1.0% annual distribution and shareholder servicing fee for five years from the date on which such share is issued. We will cease paying the distribution and shareholder

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servicing fee on each Class T share prior to the fifth anniversary of its issuance on the earliest of the following, should any of these events occur: (i) the date at which, in the aggregate, underwriting compensation from all sources equals 10% of the gross proceeds from our primary offering (i.e., excluding proceeds from sales pursuant to our DRIP); (ii) the date on which we list our common stock on a national securities exchange; and (iii) the date of a merger or other extraordinary transaction in which we are a party and in which our common stock is exchanged for cash or other securities. We cannot predict if or when any of these events will occur.

Outstanding Class R shares issued in our primary offering are also subject to a 1% annual distribution and shareholder servicing fee.  We will cease paying the distribution and shareholder servicing fee with respect to Class R shares held in any particular account, and those Class R shares will convert into a number of Class I shares determined by multiplying each Class R share to be converted by the applicable "Conversion Rate," on the earlier of (i) the date after the termination of the primary offering at which, in the aggregate, underwriting compensation from all sources equals 10% of the gross proceeds from our primary offering; (ii) a listing of the Class I shares on a national securities exchange; (iii) a merger or consolidation of the company with or into another entity, or the sale or other disposition of all or substantially all of our assets; and (iv) the end of the month in which the total underwriting compensation (which consists of selling commissions, dealer manager fees and distribution and shareholder servicing fees) paid with respect to such Class R shares purchased in a primary offering is not less than 8.5% (or a lower limit, provided that, in the case of a lower limit, the agreement between the Dealer Manager and the broker-dealer in effect at the time Class R shares were first issued to such account sets forth the lower limit and the Dealer Manager s advises our transfer agent of the lower limit in writing) of the gross offering price of those Class R shares purchased in such primary offering (excluding shares purchased through our distribution reinvestment plan).

We record the distribution and stockholder serving fees as a reduction to additional paid-in capital and the related liability in an amount equal to the maximum fees payable in relation to the Class T and Class R shares on the date the shares are issued. The liability will be relieved over time, as the fees are paid to the Dealer Manager, or it will be adjusted if the fees are no longer payable pursuant to the conditions described above. For issued Class T shares, we have accrued an estimate of the total distribution and shareholder servicing fee of $497,173 for the full five year period at June 30, 2017, of which, we paid $16,782 cumulatively through June 30, 2017. There were no Class R shares issued and outstanding as of June 30, 2017.

Acquisition and Asset Management Costs

In addition to making investments in accordance with our investment objectives, we expect to use our capital resources to make payments to our Advisor. During our acquisition stage, we expect to make payments to our Advisor in connection with the acquisition of real estate investments. In addition, we expect to continue to make payments to our Advisor for the management of our assets and costs incurred by our Advisor in providing services to us.

Operating Expenses

At the end of each fiscal quarter, commencing with the quarter ending September 30, 2017, our Advisor must reimburse us the amount by which our aggregate total operating expenses for the four fiscal quarters then ended exceed the greater of 2% of our average invested assets or 25% of our net income, unless the conflicts committee of our board of directors has determined that such excess expenses were justified based on unusual and non-recurring factors. "Average invested assets" means the average monthly book value of our assets invested, directly or indirectly, in equity interests in and loans secured by real estate during the 12-month period before deducting depreciation, bad debts or other non-cash reserves. "Total operating expenses" means all expenses paid or incurred by us, as determined under accounting principles generally accepted in the United States ("GAAP"), that are in any way related to our operation, including advisory fees, but excluding (i) the expenses of raising capital such as organization and offering expenses, legal, audit, accounting, underwriting, brokerage, listing, registration and other fees, printing and other such expenses and taxes incurred in connection with the issuance, distribution, transfer, registration and stock exchange listing of our stock; (ii) interest payments; (iii) taxes; (iv) non-cash expenditures such as depreciation, amortization and bad debt reserves; (v) incentive fees paid in accordance with the NASAA Statement of Policy Regarding Real Estate Investment Trusts (the "NASAA REIT Guidelines"); (vi) acquisition fees and expenses (including expenses relating to potential investments that we do not close); (vii) real estate commissions on the sale of property; and (viii) other fees and expenses connected with the acquisition, disposition, management and ownership of real estate interests, loans or other property (such as the costs of foreclosure, insurance premiums, legal services, maintenance, repair and improvement of property).

Distributions

Cash Distributions

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For the three and six months ended June 30, 2017, we declared and paid aggregate distributions, which were paid from offering proceeds as follows:

	Three Months Ended   June 30, 2017						Six Months Ended   June 30, 2017
	Class A		Class T		Total		Class A		Class T		Total
Distributions declared	$	30,709	$	22,858	$	53,567	$	38,400	$	26,250	$	64,650
Distributions reinvested in shares of common stock paid	$	9,637	$	11,577	$	21,214	$	16,087	$	16,219	$	32,306
Cash distributions paid	17,686		4,541		22,227		32,562		6,094		38,656
Total distributions paid	$	27,323	$	16,118	$	43,441	$	48,649	$	22,313	$	70,962

At June 30, 2017, the Company had accrued $18,862 for the cash distributions paid on July 31, 2017, which is reported in distributions payable in the consolidated balance sheet and included in the distributions declared above.

Distributions declared, distributions paid and cash flows used in operating activities were as follows for the six months ended June 30, 2017:

	Distributions Paid									Distributions Declared			Sources of Distributions Paid
2017	Cash		Dividends Reinvested (DRIP)		Total		Cash Used in Operating Activities			Total		Per Share(1)	Amount Paid from Operating Activities/ Percent of Total Distributions Paid	Amount Paid from Offering Proceeds/ Percent of Total Distributions Paid
First quarter	$	16,429	$	11,092	$	27,521	$	(4,598	)	$	11,083	$0.015	- / -	$	27,521	/100%
Second quarter	22,227		21,214		43,441		(1,064,700		)	53,567		$0.051	- / -	$	43,441	/100%
Total	$	38,656	$	32,306	$	70,962	$	(1,069,298	)	$	64,650

(1) Distributions for Class T shareholders were reduced for the distribution and shareholder servicing fee.

Cash distributions paid since inception were as follows:

Fiscal Year Paid	Per Share (1)	Distributions Reinvested in Shares of Common Stock		Net Cash Distributions		Total Aggregate Distributions
2016	$.000547945 per day	$	4,380	$	11,524	$	15,904
2017	$.000547945 per day	32,306		38,656		70,962
		$	36,686	$	50,180	$	86,866

(1) Distributions for Class T shareholders were reduced for the distribution and shareholder servicing fee.

Our net loss attributable to common stockholders for the six months ended June 30, 2017 was $648,997 and net cash used in operating activities was $69,298. Our cumulative cash distributions and net loss attributable to common stockholders from inception through June 30, 2017 are $86,866 and $1.4 million, respectively. We have funded our cumulative distributions, which include net cash distributions and distributions reinvested by stockholders, with proceeds from our public offering. To the extent that we pay distributions from sources other than our cash flow from operating activities, we will have fewer funds available for investment in commercial real estate and real estate-related debt, the overall return to our stockholders may be reduced and subsequent investors may experience dilution.

Stock Dividends

On April 25, 2017, the Company's board of directors authorized a stock dividend for the second quarter of 2017, in the amount of 0.01 shares of common stock on each outstanding share of common stock to all common stockholders of record as of the close of business on July 1, 2017. Stock dividends are issued in the same class of shares as the shares for which such stockholder received the stock dividend. The Company issued this stock dividend on July 14, 2017. In accordance with the accounting guidance for stock dividends, these shares were reflected as being issued in the consolidated balance sheets at June 30, 2017.

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Funds from Operations and Modified Funds from Operations

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

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

(1) acquisition fees and expenses;

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

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

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

(5) impairment charges;

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

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

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

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

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

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

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

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

• Acquisition expenses. In evaluating investments in real estate, including both business combinations and investments accounted for under the equity method of accounting, management’s investment models and analysis

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differentiate costs to acquire the investment from the operations derived from the investment. Prior to 2009, acquisition costs for both of these types of investments were capitalized under GAAP; however, beginning in 2009, acquisition costs related to business combinations are expensed. We believe by excluding expensed acquisition costs, MFFO provides useful supplemental information that is comparable for each type of real estate investment and is consistent with management’s analysis of the investing and operating performance of our properties. Acquisition expenses include those paid to our Advisor or third parties.

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

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

• Impairment charges, gains or losses related to fair-value adjustments for derivatives not qualifying for hedge accounting and gains or losses related to contingent purchase price adjustments. Each of these items relates to a fair value adjustment, which is based on the impact of current market fluctuations and underlying assessments of general market conditions and specific performance of the holding which may not be directly attributable to current operating performance. As these gains or losses relate to underlying long-term assets and liabilities, management believes MFFO provides useful supplemental information by focusing on the changes in our core operating fundamentals rather than changes that may reflect anticipated gains or losses. In particular, because GAAP impairment charges are not allowed to be reversed if the underlying fair values improve or because the timing of impairment charges may lag the onset of certain operating consequences, we believe MFFO provides useful supplemental information related to current consequences, benefits and sustainability related to rental rate, occupancy and other core operating fundamentals.

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

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

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

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The following section presents our calculation of FFO and MFFO and provides additional information related to our operations:

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Net (loss) income attributable to common stockholders - GAAP	$	(331,254	)	$	(26,458	)	$	(648,997	)	$	(26,458	)
Depreciation expense	10,504			—			20,828			—
FFO attributable to common stockholders	(320,750		)	(26,458		)	(628,169		)	(26,458		)
Adjustments for straight-line rents	(781		)	—			1,943			—
Amortization of intangible lease assets	12,888			—			27,870			—
Acquisition costs	83,233			—			83,233			—
MFFO attributable to common stockholders	$	(225,410	)	$	(26,458	)	$	(515,123	)	$	(26,458	)

Critical Accounting Policies

For a discussion of our critical accounting policies and estimates, see the discussion in our Annual Report on Form 10-

K for the year ended December 31, 2016 under "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies."

Subsequent Events

We have evaluated subsequent events and determined that no events have occurred, which would require an adjustment to or additional disclosure in the consolidated financial statements, except for the following:

On July 27, 2017, our board of directors declared cash distributions on the outstanding shares of all classes of our common stock based on daily record dates from July 31, 2017 through October 30, 2017, which distributions we expect to pay on August 31, 2017, September 29, 2017 and October 31, 2017, respectively. Distributions for this period have been or will be calculated based on stockholders of record each day during these periods at a rate of (i) $0.001434521 per share per day less (ii) the applicable daily distribution and shareholder servicing fees accrued for and allocable to any class of common stock divided by the number of shares of common stock of such class outstanding as of the close of business of each respective record date.

On July 31, 2017, we, through our wholly-owned subsidiary, purchased a multifamily community located in Jacksonville, Florida ("Bay Club"). Bay Club, constructed in 1990, contains 220 units and amenities, including private garages for each unit, a clubhouse, pool, fitness center and business center. The Bay Club property is currently 96% leased.

Bay Club was acquired for a purchase price of $28.3 million, excluding closing costs. We funded the purchase with a combination of offering proceeds and proceeds from a seven-year, $21.5 million secured mortgage loan with CBRE Capital Markets, Inc., an unaffiliated lender, secured by Bay Club (the "Bay Club Mortgage Loan"). The Bay Club Mortgage Loan matures on July 31, 2024. The Bay Club Mortgage Loan bears interest at a rate of LIBOR plus 1.87%, with a maximum interest rate of 5.75%. Monthly payments are interest only for the first 24 months. Beginning on August 1, 2019, we will pay both principal and interest based on 30 year amortization. Any remaining principal balance and all accrued and unpaid interest and fees will be due at maturity. We may prepay the Bay Club Mortgage Loan in full at any time (1) after July 31, 2019 and until April 30, 2024 upon payment of a prepayment premium equal to 1% of the principal amount prepaid; and (2) after April 30, 2024 with no prepayment premium. The non-recourse carveouts under the loan documents for the Bay Club Mortgage Loan are guaranteed by us.

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Quantitative and qualitative disclosures about market risk have been omitted as permitted under rules applicable to smaller reporting companies.

ITEM 4.    CONTROLS AND PROCEDURES

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Disclosure Controls and Procedures

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

Under the supervision of our principal executive officer and principal financial officer, we have carried out an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are effective as of June 30, 2017.

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting that occurred during the quarter ended June 30, 2017 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II.                      OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

From time to time, we may become party to legal proceedings, which arise in the ordinary course of our business. We

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

ITEM 1A.    RISK FACTORS

Risk factors have been omitted as permitted under rules applicable to smaller reporting companies.

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

Unregistered Sales of Equity Securities

During the period covered by this report, we did not sell any unregistered securities.

Use of Proceeds

On April 28, 2016, our Registration Statement on Form S-11 (File No. 333-207740), covering our initial public offering of up to $1.1 billion in shares of common stock, was declared effective under the Securities Act of 1933. We retained our Resource Securities LLC (our "Dealer Manager") as the dealer manager for our offering.

We are offering up to $1.1 billion of shares of our common stock, consisting of up to $1.0 billion of shares in our primary offering and up to $100.0 million of shares pursuant to our DRIP. Through June 30, 2017, we offered shares of Class A and Class T common stock in our primary offering at prices of $10.00 per share and $9.47 per share, respectively. As of July 3, 2017, we ceased offering shares of Class A and Class T common stock in our primary offering. Commencing July 3, 2017, we are offering shares of Class R and Class I common stock in our primary offering at prices of $9.52 per share and $9.13 per share, respectively. The initial offering price for shares offered pursuant to the DRIP is $9.60 per share for Class A common stock, $9.09 per share for Class T common stock, $9.14 per share for Class R common stock and $8.90 per share for Class I common stock. As of June 30, 2017, our Advisor has incurred costs on our behalf of approximately $4.7 million.

At June 30, 2017, a total of 601,207 Class A shares, including shares purchased by both our Advisor and RAI, and 1,049,996 Class T shares have been issued in connection with our public offering resulting in gross offering proceeds of approximately $15.7 million. From the commencement of our public offering through June 30, 2017, we incurred selling commissions, dealer manager fees, other underwriting compensation and other organization and offering costs in the amounts set forth below. We generally paid selling commissions and dealer manager fees to our Dealer Manager for the sale of shares in our primary offering and our Dealer Manager reallowed all selling commissions and a portion of the dealer manager fees to participating broker-dealers. In addition, we reimburse our Advisor and Dealer Manager for certain organizational and offering costs.

Type of Expense	Amount
Selling commissions	$	415,375
Dealer manager fees	407,416
Distribution and shareholder servicing fee (1)	497,173
Other organization and offering costs (2)	360,624
Total expenses	$	1,680,588

(1) Outstanding Class T shares issued in the Company's primary offering are subject to a 1% annual distribution and shareholder servicing fee for five years from the date on which each share is issued. Such fees are not paid from offering proceeds and do not reduce the amount of net offering proceeds to us. Since commencement of our initial public offering through June 30, 2017, we incurred $497,173 of distribution and shareholder servicing fees. At June 30, 2017, $480,391 of these fees are unpaid and included on our consolidated balance sheets in accounts payable and accrued expenses.

(2) At June 30, 2017, this amount is included in Due to Related Parties on the consolidated balance sheets.

From the commencement of our initial public offering through June 30, 2017, the net offering proceeds to us, after deducting the total expenses incurred as described above, excluding the distribution and shareholder servicing fee as such fees do not reduce the net offering proceeds to us, were approximately $14.5 million. As of June 30, 2017, we have used the net proceeds from our ongoing initial public offering and debt financing to acquire approximately $2.5 million in real estate investments.  Of

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the amount used for the purchase of these investments, approximately $53,000 was paid to our Advisor as acquisition fees and $14,200 was paid to other affiliates for acquisition expense reimbursements.

Share Redemption Program

Our common stock is currently not listed on a national securities exchange and we will not seek to list our common stock unless and until such time as our board of directors determines that the listing of our common stock would be in the best interests of our stockholders. In order to provide stockholders with the benefit of some interim liquidity, our board of directors has adopted a share repurchase program that enables our stockholders to sell their shares back to us after they have held them for at least one year, subject to significant conditions and limitations. The terms of our share repurchase program are more flexible in cases involving the death or disability of a stockholder. We may reject any request for repurchase of shares. Repurchases of shares of our common stock, when requested, generally will be made quarterly. We will limit the number of shares repurchased during any calendar year to 5.0% of the number of shares of our common stock outstanding on December 31 of the previous calendar year. In addition, we are only authorized to repurchase shares using proceeds from our DRIP plus 1.0% of the operating cash flow from the previous fiscal year (to the extent positive) and any additional operating funds, if any, as our Board in its sole discretion may reserve for this purpose. Due to these limitations, we cannot guarantee that we will be able to accommodate all repurchase requests.

Unless the shares of our common stock are being repurchased in connection with a stockholder’s death or qualifying disability, the purchase price for shares repurchased under our share repurchase program will be as set forth below until June 30, 2018 (the "NAV Pricing Date"). Prior to the NAV Pricing Date, and unless the shares are being repurchased in connection with a stockholder’s death or qualifying disability, we will initially repurchase shares at a price equal to, or at a discount from, the purchase price paid for the shares being repurchased as follows:

Share Purchase Anniversary	Redemption Price as a Percentage of Purchase Price
Less than 1 year	No Repurchase Allowed
1 year	92.5%
2 years	95.0%

Notwithstanding the foregoing, until the NAV Pricing Date, shares received as a stock dividend will be redeemed at a purchase price of $0.00. In addition, the purchase price per share will be adjusted for any stock combinations, splits, recapitalizations and the like with respect to the shares of common stock and reduced by the aggregate amount of net sale or refinance proceeds per share, if any, distributed to the stockholder prior to the repurchase date. Shares repurchased in connection with a stockholder’s death or qualifying disability will be repurchased at a price per share equal to 100% of the amount the stockholder paid for each share, or, once we have established an estimated NAV per share, 100% of such amount, as determined by our board of directors, subject to any special distributions previously made to our stockholders. Shares repurchased in connection with a stockholder’s other exigent circumstances, such as bankruptcy, within one year from the purchase date, will be repurchased at a price per share equal to the price per share we would pay had the stockholder held the shares for one year from the purchase date, and at all other times in accordance with the terms described above. A stockholder must have beneficially held the shares for at least one year prior to offering them for sale to us through our share repurchase program, unless the shares are being repurchased in connection with a stockholder’s death, qualifying disability, or certain other exigent circumstances. Our Board of Directors reserves the right, in its sole discretion, at any time and from time to time, to waive the one-year holding period requirement in the event of the death or qualifying disability of a stockholder, other involuntary exigent circumstances such as bankruptcy, or a mandatory distribution requirement under a stockholder’s IRA.

During the period covered by this report, we did not repurchase any of our securities as no securities were eligible for repurchase.

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES

a. Not applicable

b. Not applicable

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ITEM 6.    EXHIBITS

Exhibit No.	Description
3.1	Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 to Pre-Effective Amendment No. 3 to the Company’s Registration Statement on Form S-11 (No. 333-207740) filed April 11, 2016)
3.2	Bylaws (incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-11 (No. 333-207740) filed November 2, 2015)
3.3	Articles of Amendment (incorporated by reference to Exhibit 3.3 to Pre-Effective Amendment No. 1 to Post-Effective Amendment No. 5 to the Company’s Registration Statement on Form S-11 (No. 333-207740) filed June 28, 2017)
3.4	Articles Supplementary for the Class R shares of common stock  (incorporated by reference to Exhibit 3.4 to Pre-Effective Amendment No. 1 to Post-Effective Amendment No. 5 to the Company’s Registration Statement on Form S-11 (No. 333-207740) filed June 28, 2017)
3.5	Articles Supplementary for the Class I shares of common stock (incorporated by reference to Exhibit 3.5 to Pre-Effective Amendment No. 1 to Post-Effective Amendment No. 5 to the Company’s Registration Statement on Form S-11 (No. 333-207740) filed June 28, 2017)
4.1	Form of Subscription Agreement (incorporated by reference to Exhibit 4.1 to Pre-Effective Amendment No. 1 to Post-Effective Amendment No. 5 to the Company’s Registration Statement on Form S-11 (No. 333-207740) filed June 28, 2017)
4.2	Statement regarding restrictions on transferability of shares of common stock (to appear on stock certificate or to be sent upon request and without charge to stockholders issued shares without certificates) (incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-11 (No. 333-207740) filed November 2, 2015)
4.3	Amended and Restated Distribution Reinvestment Plan (incorporated by reference to Exhibit 4.3 to Pre-Effective Amendment No. 1 to Post-Effective Amendment No. 5 to the Company’s Registration Statement on Form S-11 (No. 333-207740) filed June 28, 2017)
4.4	Escrow Agreement among the Company, Resource Securities, Inc. and UMB Bank, N.A., dated April 28, 2016 (incorporated by reference to Exhibit 4.4 to the Company’s Quarterly Report on Form 10-Q filed November 14, 2016)
10.1	Agreement of Purchase and Sale by and between MREI III Bay Club, LLC and Resource Apartment OP III, LP, dated June 12, 2017 (incorporated by reference to Exhibit 10.7 to Pre-Effective Amendment No. 1 to Post-       Effective Amendment No. 5 to the Company’s Registration Statement on Form S-11 (No. 333-207740) filed June 28, 2017)
10.2	Amended and Restated Dealer Manager Agreement, including Form of Selected Dealer Agreement and Form of Placement Agreement, dated July 3, 2017
10.3	Amendment to Selected Dealer Agreement, effective July 3, 2017, by and among Resource Apartment REIT III, Inc., Ameriprise Financial Services, Inc., Resource Securities, Inc., Resource REIT Advisor, LLC, and      Resource Real Estate, Inc.
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer pursuant to Section 1350 18 U.S.C., as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Financial Officer pursuant to Section 1350 18 U.S.C., as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.1	Share Redemption Program (incorporated by reference to Exhibit 99.1 to the Company’s Registration Statement on Form S-11 (No. 333-207740) filed November 2, 2015)
101.1	Interactive Data Files

36

SIGNATURES

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

	RESOURCE APARTMENT REIT III, INC.
August 11, 2017	By:           /s/ Alan F. Feldman
	Alan F. Feldman
	Chief Executive Officer
	(Principal Executive Officer)
August 11, 2017	By:           /s/ Steven R. Saltzman
	Steven R. Saltzman
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

37

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Alan F. Feldman, certify that:

1) I have reviewed this quarterly report on Form 10-Q for the quarter ended June 30, 2017 of Resource Apartment REIT III, Inc.;

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

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

4) The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) [Language omitted in accordance with SEC Release No. 34-47986] 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) [Paragraph omitted in accordance with SEC transition instructions contained in SEC Release No. 34-47986];

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

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

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

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

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

		RESOURCE APARTMENT REIT III, INC.
August 11, 2017	By:	/s/ Alan F. Feldman
		Alan F. Feldman
		Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Steven R. Saltzman, certify that:

1) I have reviewed this quarterly report on Form 10-Q for the quarter ended June 30, 2017 of Resource Apartment REIT III, Inc.;

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

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

4) The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) [Language omitted in accordance with SEC Release No. 34-47986] 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) [Paragraph omitted in accordance with SEC transition instructions contained in SEC Release No. 34-47986];

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

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

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

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

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

		RESOURCE APARTMENT REIT III, INC.
August 11, 2017	By:	/s/ Steven R. Saltzman
		Steven R. Saltzman
		Chief Financial Officer
		(Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Resource Apartment REIT III, Inc. (the "Company”) on Form 10-Q for the quarter ended June 30, 2017 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Alan F. Feldman, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

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

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

		RESOURCE APARTMENT REIT III, INC.
August 11, 2017	By:	/s/ Alan F. Feldman
		Alan F. Feldman
		Chief Executive Officer
		(Principal Executive Officer)

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Resource Apartment REIT III, Inc. (the "Company”) on Form 10-Q for the quarter ended June 30, 2017 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Steven. R. Saltzman, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

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

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

		RESOURCE APARTMENT REIT III, INC.
August 11, 2017	By:	/s/ Steven R. Saltzman
		Steven R. Saltzman
		Chief Financial Officer
		(Principal Financial Officer)

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2017	Aug. 07, 2017
Document and Entity Information [Abstract]
Entity Registrant Name	Resource Apartment REIT III, Inc.
Entity Central Index Key	0001652926
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Document Type	10-Q
Document Period End Date	Jun. 30, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q2
Amendment Flag	false
Class A common stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding, Class A		616,466
Class T common stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding, Class A		1,067,952
Class R Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding, Class A		25,014
Class I Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding, Class A		21,906

XML

Consolidated Balance Sheets - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Investments:
Rental properties, net	$ 2,436,491	$ 2,445,835
Identified intangible assets, net	0	27,870
Investments	2,436,491	2,473,705
Cash	12,801,170	3,351,536
Restricted cash	5,765	7,733
Tenant receivables, net	1,000	788
Due from related parties	3,640	2,352
Contribution receivable	0	210,000
Prepaid expense	1,185,077	100,485
Deferred offering costs	4,396,190	2,848,199
Total assets	20,829,333	8,994,798
Liabilities:
Mortgage note payable, net of deferred financing costs of $33,348 and $34,166	1,577,899	1,590,834
Accounts payable and accrued expenses	153,649	214,284
Due to related parties	6,501,390	3,616,713
Tenant prepayments	1,364	0
Security deposits	6,100	3,300
Distributions payable	18,862	25,174
Total liabilities	8,259,264	5,450,305
Stockholder's equity:
Preferred stock	0	0
Additional paid-in capital	14,359,063	4,380,126
Accumulated deficit	(1,806,329)	(841,115)
Total stockholder's equity	12,570,069	3,544,493
Total liabilities and stockholder's equity	20,829,333	8,994,798
Convertible Stock
Stockholder's equity:
Preferred stock	500	500
Class A common stock
Stockholder's equity:
Common stock	6,161	3,842
Class T common stock
Stockholder's equity:
Common stock	10,674	1,140
Class R Common Stock
Stockholder's equity:
Common stock	0	0
Class I Common Stock
Stockholder's equity:
Common stock	$ 0	$ 0

XML

Consolidated Balance Sheets (Parentheticals) - USD ($)	Apr. 25, 2017	Jun. 30, 2017	Jun. 28, 2017	Dec. 31, 2016
Deferred financing costs		$ 33,348		$ 34,166
Preferred stock, par value (in dollars per share)		$ 0.01		$ 0.01
Preferred stock, shares authorized (in shares)		10,000,000		10,000,000
Preferred stock, shares issued (in shares)		0		0
Preferred stock, shares outstanding (in shares)		0		0
Common stock, par value (in dollars per share)		$ 0.01
Common stock, shares authorized (in shares)		1,000,000,000
Convertible Stock
Preferred stock, par value (in dollars per share)		$ 0.01		$ 0.01
Preferred stock, shares authorized (in shares)		50,000		50,000
Preferred stock, shares issued (in shares)		50,000		50,000
Preferred stock, shares outstanding (in shares)		50,000		50,000
Class A common stock
Common stock, par value (in dollars per share)		$ 0.01	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)		25,000,000	25,000,000	250,000,000
Common stock, shares issued (in shares)		616,086		384,195
Common stock, shares outstanding (in shares)		616,086		384,195
Authorized stock dividend of common stock (in shares)	6,100
Class T common stock
Common stock, par value (in dollars per share)		$ 0.01	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)		25,000,000	25,000,000	750,000,000
Common stock, shares issued (in shares)		1,067,396		114,037
Common stock, shares outstanding (in shares)		1,067,396		114,037
Authorized stock dividend of common stock (in shares)	10,568
Class R Common Stock
Common stock, par value (in dollars per share)		$ 0.01	$ 0.01	$ 0
Common stock, shares authorized (in shares)		750,000,000	750,000,000	0
Common stock, shares issued (in shares)		0		0
Common stock, shares outstanding (in shares)		0		0
Class I Common Stock
Common stock, par value (in dollars per share)		$ 0.01	$ 0.01	$ 0
Common stock, shares authorized (in shares)		75,000,000	75,000,000	0
Common stock, shares issued (in shares)		0		0
Common stock, shares outstanding (in shares)		0		0

XML

Consolidated Statements of Operations - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Revenues:
Rental income	$ 51,713	$ 0	$ 101,154	$ 0
Total revenues	51,713	0	101,154	0
Expenses:
Rental operating	19,511	0	40,601	0
Acquisition costs	83,233	0	83,233	0
Property management fees	2,580	0	4,762	0
Management fees - related parties	6,730	0	13,457	0
General and administrative	238,385	26,458	540,404	26,458
Depreciation and amortization expense	23,392	0	48,698	0
Total expenses	373,831	26,458	731,155	26,458
Loss before other income (expense)	(322,118)	(26,458)	(630,001)	(26,458)
Other income (expense):
Other income	0	0	1,500
Interest income	3,903	0	5,484	0
Interest expense	(13,039)	0	(25,980)	0
Net loss	(331,254)	(26,458)	(648,997)	(26,458)
Class A common stock
Other income (expense):
Net loss attributable to common stockholders	$ (140,820)	$ (26,458)	$ (323,547)	$ (26,458)
Basic and diluted net loss per common share (in dollars per share)	$ (0.25)	$ (1.04)	$ (0.65)	$ (1.15)
Weighted-average number of shares outstanding, basic and diluted (in shares)	559,739	25,511	501,031	23,008
Class T common stock
Other income (expense):
Net loss attributable to common stockholders	$ (190,434)	$ 0	$ (325,450)	$ 0
Basic and diluted net loss per common share (in dollars per share)	$ (0.27)	$ 0.00	$ (0.67)	$ 0.00
Weighted-average number of shares outstanding, basic and diluted (in shares)	696,020	0	486,845	0

XML

Consolidated Statement of Changes in Stockholders' Equity - 6 months ended Jun. 30, 2017 - USD ($)	Total	Class A common stock	Class T common stock	Common Stock Class A common stock	Common Stock Class T common stock	Convertible Stock Convertible Stock	Additional Paid-in Capital	Accumulated Deficit
Beginning balance at Dec. 31, 2016	$ 3,544,493			$ 3,842	$ 1,140	$ 500	$ 4,380,126	$ (841,115)
Beginning balance (in shares) at Dec. 31, 2016		384,195	114,037	384,195	114,037	50,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock	11,035,315			$ 2,192	$ 9,366		11,023,757
Issuance of common stock (in shares)		616,086.02	1,067,395.79	219,259	936,581
Offering costs	(1,328,398)						(1,328,398)
Cash distributions declared	(64,650)	$ (38,400)	$ (26,250)					(64,650)
Stock dividends (in shares)				10,956	14,993
Stock dividends	0			$ 110	$ 150		251,307	(251,567)
Common stock issued through distribution reinvestment plan (in shares)				1,676	1,785
Common stock issued through distribution reinvestment plan	32,306	$ 16,087	$ 16,219	$ 17	$ 18		32,271
Net loss	(648,997)							(648,997)
Ending balance at Jun. 30, 2017	$ 12,570,069			$ 6,161	$ 10,674	$ 500	$ 14,359,063	$ (1,806,329)
Ending balance (in shares) at Jun. 30, 2017		616,086	1,067,396	616,086	1,067,396	50,000

XML

Consolidated Statement of Cash Flows - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Cash flows from operating activities:
Net loss	$ (648,997)	$ (26,458)
Adjustment to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization expense	48,698	0
Amortization of deferred financing costs	818	0
Changes in operating assets and liabilities:
Restricted cash	1,968	0
Tenant receivable, net	(212)	0
Due from related parties	(1,288)	0
Prepaid expenses and other assets	(83,544)	420
Due to related parties	751,834	23,288
Accounts payable and accrued expenses	(141,375)	2,750
Security deposits	2,800	0
Net cash used in operating activities	(69,298)	0
Cash flows from investing activities:
Deposit for property acquisition	(1,000,000)	0
Capital expenditures	(11,484)	0
Net cash used in investing activities	(1,011,484)	0
Cash flows from financing activities:
Net proceeds from issuance of common stock	10,582,825	0
Payments on borrowings	(13,753)	0
Distributions paid on common stock	(38,656)	0
Net cash provided by financing activities	10,530,416	0
Net increase in cash	9,449,634	0
Cash at beginning of period	3,351,536	200,000
Cash at end of period	$ 12,801,170	$ 200,000

XML

Nature of Business and Operations

6 Months Ended

Jun. 30, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Business and Operations

NATURE OF BUSINESS AND OPERATIONS

Resource Apartment REIT III, Inc. (the "Company") was organized in Maryland on July 15, 2015. The Company is offering up to $1.1 billion of shares of its common stock, consisting of up to $1.0 billion of shares in its primary offering and up to $100.0 million of shares pursuant to its distribution reinvestment plan (the "DRIP"). Through June 30, 2017, the Company offered shares of Class A and Class T common stock at prices of $10.00 per share and $9.47 per share, respectively. As of July 3, 2017, the Company ceased offering shares of Class A and Class T common stock in its primary offering. Commencing July 3, 2017, the Company is offering shares of Class R and Class I common stock at prices of $9.52 per share and $9.13 per share, respectively. The initial offering price for shares offered pursuant to the DRIP is $9.60 per share for Class A, $9.09 per share for Class T, $9.14 per share for Class R and $8.90 per share for Class I. The Company will determine its net asset value ("NAV") per share on a date no later than June 30, 2018 (the "NAV Pricing Date"). Commencing on the NAV Pricing Date, if the primary offering is ongoing, the Company will offer Class R and Class I shares in the primary offering at a price equal to the NAV per share for Class R and Class I shares, respectively, plus applicable selling commissions and dealer manager fees, and pursuant to the DRIP at a price equal to 96% of the new primary offering price. If the Company’s primary offering is not ongoing on the NAV Pricing Date, or on the date of any subsequent NAV pricing, it will offer Class A, Class T, Class R and Class I shares pursuant to the DRIP at a price equal to 96% of the most recently determined NAV per share. The Company will update its NAV at least annually following the NAV Pricing Date and further adjust the per share price in the primary offering and DRIP accordingly. The Company qualifies as an emerging growth company. As of June 30, 2017, the Company has raised aggregated offering proceeds of approximately $15.7 million from the sale of 601,207 Class A shares and 1,049,996 Class T shares of common stock.

On June 29, 2016, the Company satisfied the $2.0 million minimum offering amount for its initial public offering, excluding shares purchased by residents of Pennsylvania, New York and Washington. As a result, the Company has broken escrow and issued shares of common stock in the offering. The Company broke escrow in New York on October 11, 2016. Subscription payments received from residents of Pennsylvania and Washington will continue to be held in escrow until the Company has received aggregate subscriptions of at least $50.0 million and $20.0 million, respectively. Having raised the minimum offerings, the offering proceeds were released by the escrow agent to the Company and available for acquisition of properties and other purposes.

Resource REIT Advisor, LLC (formerly known as Resource Apartment Advisor III, LLC) (the "Advisor"), which is an indirect wholly-owned subsidiary of Resource America, Inc. ("RAI"), operating in the real estate, financial fund management and commercial finance sectors, contributed $200,000 to the Company in exchange for 20,000 shares of Class A common stock on August 10, 2015. On June 29, 2016, RAI purchased 222,222 shares of Class A common stock for $2.0 million in the offering. On August 5, 2016, the Advisor exchanged 5,000 shares of common stock for 50,000 shares of convertible stock. Under limited circumstances, these shares may be converted into shares of the Company's Class A common stock satisfying its obligation to pay the Advisor an incentive fee and diluting its stockholders’ interest in the Company.

RAI is a wholly-owned subsidiary of C-III Capital Partners, LLC ("C-III"), a leading commercial real estate services company engaged in a broad range of activities. C-III controls the Advisor, Resource Securities LLC ("Resource Securities"), the Company's dealer manager, and Resource Apartment Manager III, LLC, the Company's property manager. C-III also controls all of the shares of the Company's common stock held by RAI and the Advisor.

The Company’s objective is to take advantage of Resource Real Estate, Inc.’s (its "Sponsor") multifamily investing and lending platforms to invest in apartment communities in order to provide the investor with growing cash flow and increasing asset values. The Company intends to acquire underperforming apartments which it will renovate and stabilize in order to increase rents. To a lesser extent, the Company will also seek to originate and acquire commercial real estate debt secured by apartments having the same characteristics. The Company believes multiple opportunities exist within the apartment industry today and will continue to present themselves over the next few years to real estate investors who possess the following characteristics: (i) extensive experience in multifamily investing, (ii) strong management platforms specializing in operational and financial performance optimization, (iii) financial sophistication allowing them to benefit from complex opportunities, and (iv) the overall scale and breadth of a national real estate platform in both the equity and debt markets. At June 30, 2017 and December 31, 2016, the Company owned one apartment property located in Alexandria, Virginia. At June 30, 2017, the Company was under contract to purchase its second property, a 220-unit apartment complex located in Jacksonville, Florida, and completed the transaction on July 31, 2017 (see Note 13).

The Company intends to elect and qualify to be taxed as a real estate investment trust ("REIT") for U.S. federal income tax purposes under the provisions of the Internal Revenue Code of 1986, as amended, commencing with its taxable year ending December 31, 2017. As such, to maintain its REIT qualification for U.S. federal income tax purposes, the Company is generally required to distribute at least 90% of its net income (excluding net capital gains) to its stockholders as well as comply with certain other requirements. Accordingly, once qualified as a REIT, the Company generally will not be subject to U.S. federal income taxes to the extent that it annually distributes all of its REIT taxable income to its stockholders. The Company also intends to operate its business in a manner that will permit it to maintain its exemption from registration under the Investment Company Act of 1940, as amended.

The consolidated financial statements and the information and tables contained in the notes thereto are unaudited. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"), pertaining to interim financial statements in Form 10-Q. However, in the opinion of management, these interim financial statements include all the necessary adjustments to fairly present the results of the interim periods presented. The consolidated balance sheet as of December 31, 2016 was derived from the audited consolidated financial statements as of and for the year ended December 31, 2016. The unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. The results of operations for the six months ended June 30, 2017 may not necessarily be indicative of the results of operations for the full year ending December 31, 2017.

XML

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2017

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying consolidated financial statements have been prepared in conformity with GAAP.

Principles of Consolidation

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

Subsidiaries

Resource Apartment REIT III Holdings, LLC

Resource Apartment REIT III OP, LP

RRE Payne Place Holdings, LLC

RRE Bay Club Holdings, LLC

All intercompany accounts have been eliminated in consolidation.

Use of Estimates

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

Real Estate Investments

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

Buildings	27.5 years
Building improvements	3.0 to 27.5 years
Tenant improvements	Shorter of lease term or expected useful life
Lease intangibles	Weighted average remaining term of related lease

Impairment of Long Lived Assets

When circumstances indicate the carrying value of a property may not be recoverable, the Company will review the asset for impairment. This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition.

These estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors.

If impairment exists, due to the inability to recover the carrying value of a property, an impairment loss will be recorded to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held and used. For properties held for sale, the impairment loss is the adjustment to fair value less estimated cost to dispose of the asset. These assessments have a direct impact on net income because recording an impairment loss results in an immediate negative adjustment to net income. There were no impairment losses recorded on long lived assets during the three and six months ended June 30, 2017 and 2016.

Loans Held for Investment

The real estate loans receivable will be recorded at cost and reviewed for potential impairment at each balance sheet date. A loan receivable is considered impaired when it becomes probable, based on current information, that the Company will be unable to collect all amounts due according to the loan’s contractual terms. The amount of impairment, if any, is measured by comparing the recorded amount of the loan to the present value of the expected cash flows or the fair value of the collateral. If a loan is deemed to be impaired, the Company will record a reserve for loan losses through a charge to income for any shortfall. Failure to recognize impairment would result in the overstatement of the carrying values of the Company’s real estate loans receivable and an overstatement of the Company’s net income.

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

Interest income from loans receivable will be recognized based on the contractual terms of the debt instrument. Fees related to any buydown of the interest rate will be deferred as prepaid interest income and amortized over the term of the loan as an adjustment to interest income. Closing costs related to the purchase of a loan receivable will be amortized over the term of the loan and accreted as an adjustment against interest income.

Allocation of Purchase Price of Acquired Assets

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

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

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

The Company also considers information obtained about each property as a result of its pre-acquisition due diligence, marketing and leasing activities in estimating the fair value of the tangible and intangible assets acquired. In estimating carrying costs, management also includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods. Management also estimates costs to execute similar leases including leasing commissions and legal and other related expenses to the extent that such costs have not already been incurred in connection with a new lease origination as part of the transaction.

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

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

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

Revenue Recognition

The Company recognizes minimum rent, including rental abatements and contractual fixed increases attributable to operating leases, on a straight-line basis over the term of the related lease and includes amounts expected to be received in later years in deferred rents. The Company records property operating expense reimbursements due from tenants for common area maintenance, real estate taxes and other recoverable costs in the period the related expenses are incurred.

Tenant Receivables

Tenant receivables are stated in the consolidated financial statements as amounts due from tenants net of an allowance for uncollectible receivables. Payment terms vary and receivables outstanding longer than the payment terms are considered past due. The Company determines its allowance by considering a number of factors, including the length of time receivables are past due, security deposits held, the Company’s previous loss history, the tenants’ current ability to pay their obligations to the Company, the condition of the general economy and the industry as a whole. The Company writes off receivables when they become uncollectible. At June 30, 2017 and December 31, 2016, there were no allowances for uncollectible receivables.

Income Taxes

The Company intends to elect and qualify to be taxed as a REIT, commencing with its taxable year ending December 31, 2017. Accordingly, once qualified as a REIT, the Company will generally not be subject to corporate U.S. federal or state income tax to the extent that it makes qualifying distributions to its stockholders, and provided it satisfies on a continuing basis, through actual investment and operating results, the REIT requirements including certain asset, income, distribution and stock ownership tests. If the Company fails to qualify as a REIT, and does not qualify for certain statutory relief provisions, it will be subject to U.S. federal, state and local income taxes and may be precluded from qualifying as a REIT for the subsequent four taxable years following the year in which it lost its REIT qualification. Accordingly, the Company’s failure to qualify as a REIT could have a material adverse impact on its results of operations and amounts available for distribution to its stockholders.

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

The Company may elect to treat certain of its subsidiaries as taxable REIT subsidiaries ("TRSs"). In general, a TRS may hold assets and engage in activities that it cannot hold or engage in directly and generally may engage in any real estate or non-real estate-related business. A TRS is subject to U.S. federal, state and local corporate income taxes.

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

Earnings Per Share

Basic earnings per share are computed by dividing net income (loss) attributable to common stockholders for each period by the weighted-average common shares outstanding during the period for each share class. Diluted net income (loss) per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted to common stock. For the purposes of calculating earnings per share, all common shares and per share information in the financial statements have been retroactively adjusted for the effect of any stock dividends and stock splits.

In accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") No. 260-10-45, "Earnings Per Share", the Company uses the two-class method to calculate earnings per share. Basic earnings per share is calculated based on dividends declared and the rights of common shares and participating securities in any undistributed earnings, which represents net income remaining after deduction of dividends declared during the period. The undistributed earnings are allocated to all outstanding common shares based on their relative percentage of each class of shares to the total number of outstanding shares. The Company did not have any participating securities outstanding other than Class A common stock and Class T common stock during the periods presented (see Note 9).

Organization and Offering Costs

The Company incurs organization and offering costs in pursuit of its financing. Organization and offering costs (other than selling commissions and dealer manager fees) of the Company are initially being paid by the Advisor on behalf of the Company.

Pursuant to the advisory agreement between the Company and the Advisor, the Company is obligated to reimburse the Advisor for organization and other offering costs paid by the Advisor on behalf of the Company, up to an amount equal to 4.0% of gross offering proceeds as of the termination of the initial public offering if the Company raises less than $500 million in the primary portion of the initial public offering and 2.5% of gross offering proceeds as of the termination of the initial public offering if the Company raises $500 million or more in the primary portion of the initial public offering.

Through June 30, 2017, the Company has charged approximately $360,624 to equity for the payment of offering costs consisting of accounting, advertising, allocated payroll, due diligence, marketing, legal, printing and similar costs. At June 30, 2017, the Advisor has advanced approximately $4.7 million of these costs on behalf of the Company, of which $4.3 million have been deferred at June 30, 2017. A portion of deferred offering costs will be charged to equity upon the sale of each share of common stock sold under the public offering. Such deferred costs will only become a liability of the Advisor to the extent that organization and offering costs incurred by us exceed 4% of the gross proceeds of the initial public offering. However, if the Company raises the maximum offering amount in the primary offering, organization and offering expenses (excluding selling commissions, the dealer manager fee and the distribution and stockholder servicing fee) are estimated to be approximately 1.0% of the gross proceeds of the initial public offering. When recorded by the Company, organization costs are expensed as incurred, which include all expenses incurred by the Company in connection with its formation, including but not limited to legal fees and other costs to incorporate. There can be no assurance that the Company's plans to raise capital will be successful. Prior to the Company breaking escrow, the Advisor incurred approximately $104,266 of formation and other operating expenses on the Company's behalf, which will not be reimbursed to the Advisor.

Outstanding Class T shares issued in the Company's primary offering are subject to a 1% annual distribution and shareholder servicing fee for five years from the date on which such share is issued. The Company will cease paying the distribution and shareholder servicing fee on each Class T share prior to the fifth anniversary of its issuance on the earliest of the following, should any of these events occur: (i) the date at which, in the aggregate, underwriting compensation from all sources equals 10% of the gross proceeds from the Company's primary offering (i.e., excluding proceeds from sales pursuant to the DRIP); (ii) the date on which the Company lists its common stock on a national securities exchange; and (iii) the date of a merger or other extraordinary transaction in which the Company is a party and in which the common stock is exchanged for cash or other securities. The Company cannot predict if or when any of these events will occur.

Outstanding Class R shares issued in the Company's primary offering are also subject to a 1% annual distribution and shareholder servicing fee.  The Company will cease paying the distribution and shareholder servicing fee with respect to Class R shares held in any particular account, and those Class R shares will convert into a number of Class I shares determined by multiplying each Class R share to be converted by the applicable "Conversion Rate," on the earlier of (i) the date after the termination of the primary offering at which, in the aggregate, underwriting compensation from all sources equals 10% of the gross proceeds from its primary offering; (ii) a listing of the Class I shares on a national securities exchange; (iii) a merger or consolidation of the company with or into another entity, or the sale or other disposition of all or substantially all of its assets; and (iv) the end of the month in which the total underwriting compensation (which consists of selling commissions, dealer manager fees and distribution and shareholder servicing fees) paid with respect to such Class R shares purchased in a primary offering is not less than 8.5% (or a lower limit, provided that, in the case of a lower limit, the agreement between the Resource Securities and the broker-dealer in effect at the time Class R shares were first issued to such account sets forth the lower limit and Resource Securities advises the Company's transfer agent of the lower limit in writing) of the gross offering price of those Class R shares purchased in such primary offering (excluding shares purchased through its distribution reinvestment plan).

The Company records distribution and shareholder servicing fees as a reduction to additional paid-in capital and the related liability in an amount equal to the maximum fees payable in relation to the Class T and Class R shares on the date the shares are issued. The liability will be relieved over time, as the fees are paid to the Dealer Manager, or adjusted if the fees are no longer payable pursuant to the conditions described above. For issued Class T shares, the Company has accrued an estimate of the total distribution and shareholder servicing fee of $497,173 for the full five year period at June 30, 2017 based on a total of 5% of the gross proceeds from all Class T shares sold, of which, the Company paid $16,782 cumulatively through June 30, 2017. There were no Class R shares issued and outstanding as of June 30, 2017.

Adoption of New Accounting Standards

 Accounting Standards Issued But Not Yet Effective

In May 2014, FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers", which will replace most existing revenue recognition guidance in GAAP. The core principle of ASU No. 2014-09 is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. ASU No. 2014-09 requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. ASU No. 2014-09 will be effective for the Company beginning January 1, 2018, including interim periods in 2018, and allows for both retrospective and prospective methods of adoption. In accordance with the Company’s plan for the adoption of ASU 2014-09, the Company has identified revenue streams and is performing an in-depth review to identify the related performance obligations and to evaluate the impact on the Company’s consolidated financial statements and internal accounting processes and controls. As the majority of the Company’s revenue is derived from lease contracts, the Company does not expect that the adoption of ASU 2014-09 or related amendments and modifications issued by the FASB will have a material impact on its consolidated financial statements.

In February 2016, FASB issued ASU No. 2016-02, "Leases", which is intended to improve financial reporting about leasing transactions and requires organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. ASU No. 2016-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is continuing to evaluate this guidance; however, it does not expect the adoption of ASU No. 2016-02 to have a significant impact on its consolidated financial statements.

In June 2016, FASB issued ASU No. 2016-03 "Financial Instruments - Credit Losses", which requires measurement and recognition of expected credit losses for financial assets held. The standard update is effective for the Company beginning January 1, 2019. The Company is continuing to evaluate this guidance; however, it does not expect the adoption of ASU No. 2016-03 to have a significant impact on its consolidated financial statements.

In August 2016, FASB issued ASU No. 2016-15 "Classification of Certain Cash Receipts and Cash Payments", which addresses eight specific cash flow issues with the objective of reducing existing diversity in practice.  The guidance is effective for the Company as of January 1, 2018. Early application is permitted. The adoption of the new requirements is not expected to have a material impact on the Company's consolidated statement of cash flows.

In November 2016, FASB issued ASU No. 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash," which provides guidance on the classification of restricted cash in the statement of cash flows. ASU No. 2016-18 is effective for the Company's fiscal year beginning January 1, 2018 and the Company does not expect the adoption of ASU No. 2016-18 to have a material effect on its consolidated financial statements and disclosures.

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

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Supplemental Cash Flow Information

6 Months Ended

Jun. 30, 2017

Supplemental Cash Flow Elements [Abstract]

Supplemental Cash Flow Information

SUPPLEMENTAL CASH FLOW INFORMATION

    The following table presents supplemental cash flow information:

	Six Months Ended June 30,
	2017		2016
Non-cash operating, financing and investing activities:
Offering costs payable	$	1,796,886	$	1,514,089
Cash distributions on common stock declared but not yet paid	18,862		—
Stock issued from distribution reinvestment plan	32,306		—
Stock dividend issued	251,567		—
Subscription of common stock	—		2,000,000
Cash paid during the year for:
Interest	$	20,986	$	—

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Acquisitions

6 Months Ended

Jun. 30, 2017

Business Combinations [Abstract]

Acquisitions

ACQUISITIONS

On August 19, 2016, the Company, through its wholly-owned subsidiary, purchased a multifamily community located in Alexandria, Virgina ("Payne Place"). Payne Place, constructed in 1950, contains 11 units and amenities, including but not limited to storage lockers and a patio with a barbeque area. Payne Place encompasses 6,730 rentable square feet. At June 30, 2017, Payne Place was 100% leased.

Payne Place was acquired for a purchase price of $2.5 million, excluding closing costs. In connection with the acquisition, the Company incurred an acquisition fee of $52,864 to its Advisor pursuant to the advisory agreement and $14,200 of acquisition costs reimbursable to related parties.

In order to finalize the fair values of the acquired assets and liabilities, the Company obtained a third-party appraisal. The valuation for Payne Place was finalized as of December 31, 2016.

The table below summarized the acquisition and the respective fair value assigned:

Multifamily Community Name	City and State	Date of Acquisition	Contractual Purchase Price (1)		Land		Building and Improvements		Furniture, Fixtures and Equipment		Intangible Assets		Other Liabilities			Fair Value Assigned
Payne Place	Alexandria, Virginia	8/19/2016	$	2,500,000	$	1,419,898	$	1,016,451	$	13,710	$	49,941	$	(6,327	)	$	2,493,673

(1) Contractual purchase price excludes closing costs, acquisition expenses, and other immaterial settlement date adjustments and pro-rations.

Total revenues, rental operating expenses, acquisition costs and property management fees included on the consolidated statements of operations for the three and six months ended June 30, 2017 are attributable to Payne Place.

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Rental Properties, Net

6 Months Ended

Jun. 30, 2017

Real Estate [Abstract]

Rental Properties, Net

RENTAL PROPERTY, NET

At June 30, 2017, the Company owned one property. The following table presents the Company's investment in rental properties:

	June 30, 2017			December 31, 2016
Land	$	1,419,898		$	1,419,898
Building and improvements	1,021,675			1,018,051
Furniture, fixtures and equipment	24,812			21,317
Construction in progress	4,365			—
	2,470,750			2,459,266
Less: accumulated depreciation	(34,259		)	(13,431		)
Total rental property, net	$	2,436,491		$	2,445,835

Depreciation expense for the three and six months ended June 30, 2017 was $10,504 and $20,828, respectively. There was no depreciation expense for the same periods in 2016.

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Identified Intangible Assets, Net

6 Months Ended

Jun. 30, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Identified Intangible Assets, Net

IDENTIFIED INTANGIBLE ASSETS, NET

Identified intangible assets, net, consist of in-place rental leases. The value of in-place leases at June 30, 2017 and December 31, 2016 was $0 and $27,870, respectively. Accumulated amortization at June 30, 2017 and December 31, 2016 was $49,941 and $22,071, respectively. Amortization expense for the three months ended June 30, 2017 and 2016 was $12,888 and $0, respectively. Amortization expense for the six months ended June 30, 2017 and 2016 was $27,870 and $0, respectively. At June 30, 2017, the in-place leases were fully amortized. At December 31, 2016, the weighted average remaining life of the rental leases was five months.

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Mortgage Notes Payable

6 Months Ended

Jun. 30, 2017

Debt Disclosure [Abstract]

Debt Disclosure

MORTGAGE NOTES PAYABLE

On December 15, 2016, the Company, through a wholly owned subsidiary, entered into a $1.6 million secured mortgage loan with JPMorgan Chase Bank, N.A., secured by Payne Place (the "Payne Place Loan"). The Payne Place Loan, which matures on January 1, 2047, bears interest at a fixed rate of 3.11% for the first three years. On January 1, 2020, the interest rate converts to a variable rate based on the six month London Interbank Offered Rate ("LIBOR") plus 2.25%, with an all-in rate floor of 2.50% and ceiling of 9.50%. Monthly payments include interest and principal in the amount of approximately $7,000 per month. Any remaining principal balance and all accrued and unpaid interest and fees will be due at maturity. The Company may prepay the Payne Place Loan in full at any time or in part from time to time: (1) during the first year of the loan upon payment of a prepayment premium equal to 3% of the amount prepaid; (2) during the second year of the loan upon payment of a prepayment premium equal to 2% of the amount prepaid; (3) during the third year of the loan upon payment of a prepayment premium equal to 1% of the amount prepaid; and (4) after the third year of the loan with no prepayment premium.

The Payne Place Loan is guaranteed by RAI until the Company achieves the following: (a) owns a minimum of five apartment complexes; (b) has a minimum net worth of $50.0 million; (c) has liquidity of no less than $5.0 million; and (d) has an aggregate portfolio leverage of no more than 65%.

The following is a summary of the Company's mortgage note payable as of June 30, 2017 and December 31, 2016:

	Outstanding Borrowings		Deferred Financing Costs, net			Carrying Value		Outstanding borrowings		Deferred Financing Costs, net			Carrying Value		Average Monthly Debt Service		Average Monthly Escrow
Collateral	June 30, 2017							December 31, 2016
Payne Place	$	1,611,247	$	(33,348	)	$	1,577,899	$	1,625,000	$	(34,166	)	$	1,590,834	$	6,948	$	1,933

Annual principal payments on the mortgage note payable for each of the next five 12-month periods ending June 30, and thereafter, are as follows:

2018	$	33,743
2019	34,807
2020	35,905
2021	37,038
2022	38,206
Thereafter	1,431,548
	$	1,611,247

Deferred financing costs incurred to obtain financing are amortized over the term of the related debt. During the three months ended June 30, 2017 and 2016, amortization of deferred financing costs of $490 and $0, respectively, was included in interest expense. During the six months ended June 30, 2017 and 2016, amortization of deferred financing costs of $818 and $0, respectively, was included in interest expense. Accumulated amortization at June 30, 2017 and December 31, 2016 was $818 and $2,775, respectively. Estimated amortization of the existing deferred financing costs for the next five 12-month periods ending June 30, are as follows:

2018	$	1,935
2019	1,894
2020	1,851
2021	1,807
2022	1,761
Thereafter	24,100
	$	33,348

At June 30, 2017 and December 31, 2016, the Company had $5,765 and $7,733, respectively, of restricted cash

related to escrow deposits held by the mortgage lender for real estate taxes.

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Certain Relationships and Related Party Transactions

6 Months Ended

Jun. 30, 2017

Related Party Transactions [Abstract]

Related Party Transactions

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

The Company is externally managed and advised by the Advisor. Pursuant to the terms of the Advisory Agreement, the Advisor provides the Company with its management team, including its officers, along with appropriate support personnel. The Advisor will be reimbursed for the Company’s allocable share of costs for Advisor personnel, including allocable personnel salaries and benefits. Each of the Company’s officers is an employee of the Sponsor, which is the Advisor's parent company and a wholly-owned subsidiary of RAI. The Company does not expect to have any employees. The Advisor is not obligated to dedicate any specific portion of its time or its employees' time to the Company’s business. The Advisor and any employees of the Sponsor acting on behalf of the Advisor are at all times subject to the supervision and oversight of the Company’s board of directors and have only such functions and authority as the Company delegates to it. Effective April 28, 2017, the Company renewed the advisory agreement with the Advisor through April 27, 2018. The terms of the agreement are identical to those of the advisory agreement in effect through April 27, 2017.

During the course of the offering, the Advisor will provide offering-related services to the Company and will advance funds to the Company for both operating costs and organization and offering costs. These amounts will be reimbursed to the Advisor from the proceeds from the offering, subject to the aforementioned limits on organization and offering expense reimbursements, although there can be no assurance that the Company’s plans to raise capital will be successful. As of June 30, 2017, the Advisor has advanced organization and offering costs on a cumulative basis on behalf of the Company of approximately $4.7 million.

Relationship with the Advisor

The Advisory Agreement has a one-year term and may be renewed for an unlimited number of successive one-year terms upon the approval of the Conflicts Committee of the Company's board of directors. Under the Advisory Agreement, the Advisor will receive fees and will be reimbursed for its expenses as set forth below:

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

Asset management fees. The Advisor earns a monthly asset management fee equal to 0.083% (one-twelfth of 1.0%) of the cost of each asset at the end of each month, without deduction for depreciation, bad debts or other non-cash reserves. The asset management fee is based only on the portion of the costs or value attributable to the Company’s investment in an asset if the Company does not own all of an asset and does not manage or control the asset.

Disposition fees. The Advisor will earn a disposition fee in connection with the sale of a property equal to the lesser of one-half of the aggregate brokerage commission paid, or if none is paid, 2.0% of the contract sales price.

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

Expense reimbursements. The Company also will pay directly or reimburse the Advisor for all of the expenses paid or incurred by the Advisor or its affiliates on behalf of the Company or in connection with the services provided to the Company in relation to its public offering, including its distribution reinvestment plan offering. This includes all organization and offering costs of up to 4.0% of gross offering proceeds if the Company raises less than $500.0 million in the primary offering and 2.5% of gross offering proceeds if the Company raises more than $500.0 million in the primary offering. Reimbursements also include expenses the Advisor incurs in connection with providing services to the Company, including the Company’s allocable share of costs for Advisor personnel and overhead, out-of-pocket expenses incurred in connection with the selection and acquisition of properties or other real estate related debt investments, whether or not the Company ultimately acquires the investment. However, the Company will not reimburse the Advisor or its affiliates for employee costs in connection with services for which the Advisor earns acquisition or disposition fees. Prior to the Company breaking escrow, the Advisor incurred approximately $104,266 of formation and other operating expenses the Company's behalf, which will not be reimbursed to the Advisor.

On August 18, 2016, the Advisor provided a $555,000 bridge loan (the "Bridge Loan") to the Company. The Company used the proceeds of the Bridge Loan to partially finance the acquisition of Payne Place. The Bridge Loan incurred interest at an annual rate of LIBOR plus 3.00%. On November 1, 2016, the Company repaid the outstanding balance of the Bridge Loan and accrued interest. Interest expense associated with Bridge Loan for the year ended December 31, 2016 was $2,921.

Relationship with Resource Apartment Manager III, LLC

Resource Apartment Manager III, LLC (the "Manager"), an affiliate of the Advisor, will manage real estate properties and real estate-related debt investments and will coordinate the leasing of and will manage construction activities related to the Company’s real estate property pursuant to the terms of the management agreement with the Manager.

Property management fees. The Manager will earn a property management fee equal to 4.5% of actual gross cash receipts from the operations of real property investments that it manages and an oversight fee on any real property investments that are managed by third parties. Property management fees are deducted directly from the property's operating account by the property manager. Any property management fees paid to unaffiliated third party property managers in excess of 4.5% of actual gross receipts will be reimbursed to the Company by the Advisor. At June 30, 2017 and December 31, 2016, the Advisor owes the Company $2,342 and $1,041, respectively, for property management fees in excess of the 4.5% cap paid to the unaffiliated third party property manager.

Construction management fees. The Manager will earn a construction management fee equal to 5.0% of actual aggregate costs to construct improvements to a property.

Debt servicing fees. The Manager will earn a debt servicing fee equal to 2.75% of gross receipts from real estate-related debt investments.

Expense reimbursement. During the ordinary course of business, the Manager or other affiliates of RAI may pay certain shared operating expenses on behalf of the Company. The Company is obligated to reimburse the Manager or other affiliates for such shared operating expenses.

Relationship with Resource Securities

Resource Securities, an affiliate of the Advisor, serves as the Company’s dealer manager and is responsible for marketing the Company’s shares during the public offering.

Dealer manager fee and selling commissions. Pursuant to the terms of the amended and restated dealer manager agreement with Resource Securities, the Company generally pays Resource Securities a selling commission of up to 3.5% of gross offering proceeds from the sale of Class R shares and a dealer manager fee of up to 3.0% of gross offering proceeds from the sale of Class R shares (but the aggregate of such fees shall not exceed 5.5% of gross offering proceeds). The Company generally pays Resource Securities a dealer manager fee of up to 1.5% of gross offering proceeds from the sale of the Class I shares. Prior to July 3, 2017, the Company paid Resource Securities of selling commissions up to 7.0% of gross primary offering proceeds from the sale of Class A shares and up to 2.0% of gross primary offering proceeds from the sale of Class T shares and a dealer manager fee of up to 3.0% of gross primary offering proceeds from the sale of either Class A or Class T shares. Resource Securities allows all selling commissions earned and a portion of the dealer manager fee as a marketing fee to participating broker-dealers. No selling commissions or dealer manager fees are earned by Resource Securities in connection with sales under the distribution reinvestment plan. Additionally, the Company may reimburse Resource Securities for bona fide due diligence expenses. No selling commissions or dealer manager fees were paid in connection with the sales of Class A shares to the Advisor or RAI.

Distribution and shareholder servicing fee. Resource Securities is paid an annual fee of 1.0% of the purchase price (or, once reported, the NAV) per share of Class T common stock sold in the primary offering for five years from the date on which each share is issued up to a total of 5.0%. Resource Securities is also paid an annual fee of 1.0% of the purchase price (or, once reported, the NAV) per share of Class R common stock sold in the primary offering.  The Company will cease paying the distribution and shareholder servicing fee with respect to Class R shares held in any particular account, and those Class R shares will convert into a number of Class I shares determined by multiplying each Class R share to be converted by the applicable "Conversion Rate," on the earlier of (i) the date after the termination of the primary offering at which, in the aggregate, underwriting compensation from all sources equals 10.0% of the gross proceeds from the primary offering; (ii) a listing of the Class I shares on a national securities exchange; (iii) a merger or consolidation of the Company with or into another entity, or the sale or other disposition of all or substantially all of our assets; and (iv) the end of the month in which the total underwriting compensation (which consists of selling commissions, dealer manager fees and distribution and shareholder servicing fees) paid with respect to such Class R shares purchased in a primary offering is not less than 8.5% (or a lower limit, provided that, in the case of a lower limit, the agreement between Resource Securities and the broker-dealer in effect at the time Class R shares were first issued to such account sets forth the lower limit and Resource Securities advises the Company’s transfer agent of the lower limit in writing) of the gross offering price of those Class R shares purchased in such primary offering (excluding shares purchased through the distribution reinvestment plan).

The differences between the Class A, Class T, Class R and Class I shares relate to the fees and selling commissions payable with respect to each class and the differing distribution amounts and expense allocations due to differing ongoing fees and expenses. The per share amount of distributions on Class T and Class R shares will likely be lower than the distributions on the Class A and Class I shares for so long as the distribution and shareholder servicing fee applies because this fee is a class-specific expense. The following table summarizes the differences in fees and selling commissions between the classes of common stock:

	Class A Share	Class T Share		Class R Share		Class I Share
Initial Offering Price	$10.00	$9.47		$9.52		$9.13
Selling Commissions Paid by Company (per shares)	7.0%	2.0%		3.5%	(1)	None
Dealer Manager Fee (per share)	3.0%	3.0%		3.0%	(1)	1.5%
Annual Distributions and Shareholder Servicing Fee	None	1.0%	(2)	1.0%	(3)	None
Initial Offering Price Under the DRIP	$9.60	$9.09		$9.14		$8.90

⁽¹⁾  The aggregate amount paid to Resource Securities for selling commissions and dealer manager fees shall not exceed 5.5% of gross offering proceeds.

⁽²⁾  Each outstanding Class T share issued in the primary offering is subject to an annual distribution and shareholder servicing fee for five years from the date on which such share is issued. The Company will cease paying the distribution and shareholder servicing fee on each Class T share prior to the fifth anniversary of its issuance on the earliest of the following, should any of these events occur: (i) the date at which, in the aggregate, underwriting compensation from all sources equals 10% of the gross proceeds from the Company's primary offering (i.e., excluding proceeds from sales pursuant to the DRIP); (ii) the date on which the Company lists its common stock on a national securities exchange; and (iii) the date of a merger or other extraordinary transaction in which the Company is a party and in which the common stock is exchanged for cash or other securities. The Company cannot predict if or when any of these events will occur.

⁽³⁾  The Company will cease paying the distribution and shareholder servicing fee with respect to Class R shares held in any particular account, and those Class R shares will convert into a number of Class I shares determined by multiplying each Class R share to be converted by the applicable "Conversion Rate," on the earlier of (i) the date after the termination of the primary offering at which, in the aggregate, underwriting compensation from all sources equals 10.0% of the gross proceeds from the primary offering; (ii) a listing of the Class I shares on a national securities exchange; (iii) a merger or consolidation of the Company with or into another entity, or the sale or other disposition of all or substantially all of our assets; and (iv) the end of the month in which the total underwriting compensation (which consists of selling commissions, dealer manager fees and distribution and shareholder servicing fees) paid with respect to such Class R shares purchased in a primary offering is not less than 8.5% (or a lower limit, provided that, in the case of a lower limit, the agreement between Resource Securities and the broker-dealer in effect at the time Class R shares were first issued to such account sets forth the lower limit and Resource Securities advises the Company’s transfer agent of the lower limit in writing) of the gross offering price of those Class R shares purchased in such primary offering (excluding shares purchased through the distribution reinvestment plan). The Company cannot predict if or when any of these events will occur.

Relationship with RAI

Self-insurance funds held in escrow. The receivable from related parties includes escrow funds held by RAI and C-III for self-insurance, which, if unused, will be returned to the Company. The Company's property participates in insurance pools with other properties directly and indirectly managed by RAI and C-III for both property insurance and general liability. RAI and C-III hold the deposits in escrow to fund future insurance claims. The insurance pool covers losses up to $2.5 million and the pool for the general liability covers losses up to the first $50,000 per incident. Catastrophic insurance would cover losses in excess of the insurance pool up to $250.0 million and $51.0 million, respectively. Therefore, unforeseen or catastrophic losses in excess of the Company's insured limits could have a material adverse effect on the Company's financial condition and operating results. During the three and six month ended June 30, 2017, the Company paid $0 and $419 into the insurance pools.

Internal audit fees. RAI performs internal audit services for the Company. The 2017 annual fee for the services provided is $12,500.

RAI co-guarantees the mortgage on Payne Place with the Company until such time as the Company achieves the following: (a) owns a minimum of five apartment complexes; (b) has a minimum net worth of $50.0 million; (c) has liquidity of no less than $5.0 million; and (d) has an aggregate portfolio leverage of no more than 65% (see Note 7 for further details).

The fees earned/expenses incurred and the amounts payable to such related parties are summarized in the following table:

	June 30, 2017		December 31, 2016
Due from related parties:
Advisor	$	2,342	$	1,041
RAI and affiliate - insurance funds held in escrow	1,298		1,311
	$	3,640	$	2,352
Due to related parties:
Advisor:
Acquisition related reimbursements	$	1,079	$	14,050
Asset management fees	—		2
Organization and offering costs	4,706,053		2,848,317
Operating expense reimbursements (including prepaid expenses)	1,309,879		682,661
	$	6,017,011	$	3,545,030
RAI:
Internal Audit Fee	$	750	$	8,250
Operating expense reimbursements	3,238		—
	$	3,988	$	8,250
Resource Securities:
Selling commissions and dealer-manager fees	$	—	$	10,363
Distribution and shareholder servicing fee	480,391		53,015
	$	480,391	$	63,378
Other	$	—	$	55
			—
	$	6,501,390	$	3,616,713

	Three Months Ended   June 30,				Six Months Ended   June 30,
	2017		2016		2017		2016
Fees earned / expenses incurred:
Advisor
Asset management fees (1)	$	6,730	$	—	$	13,457	$	—
Organization and offering costs (2)	$	1,010,962	$	—	$	1,857,736	$	—
Operating expense reimbursement (3)	$	162,526	$	26,458	$	314,205	$	26,458
Resource Securities
Selling commissions and dealer-manager fees (4)	$	403,514	$	—	$	636,033	$	—
Distribution and shareholder servicing fee (4)	$	291,316	$	—	$	443,471	$	—

(1) Included in Management fees on the consolidated statements of operations.

(2) Included in Deferred offering costs and Stockholders' equity on the consolidated balance sheets.

(3) Included in General and administrative on the consolidated statements of operations and excludes third party costs that are advanced by the Advisor.

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

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Earnings Per Share

6 Months Ended

Jun. 30, 2017

Earnings Per Share [Abstract]

Earnings Per Share

EARNINGS PER SHARE

The following table presents a reconciliation of basic and diluted earnings per share for the periods presented as follows:

	Three Months Ended   June 30,						Six Months Ended   June 30,
	2017			2016			2017			2016
Net loss	$	(331,254	)	$	(26,458	)	$	(648,997	)	$	(26,458	)
Less: Class A common stock cash distributions declared	30,709			—			38,400			—
Less: Class T common stock cash distributions declared	22,858			—			26,250			—
Undistributed net loss attributable to common stockholders	$	(384,821	)	$	(26,458	)	$	(713,647	)	$	(26,458	)
Class A common stock:
Undistributed net loss attributable to Class A common stockholders	$	(171,529	)	$	(26,458	)	$	(361,947	)	$	(26,458	)
Class A common stock cash distributions declared	30,709			—			38,400			—
Net loss attributable to Class A common stockholders	$	(140,820	)	$	(26,458	)	$	(323,547	)	$	(26,458	)
Net loss per Class A common share, basic and diluted	$	(0.25	)	$	(1.04	)	$	(0.65	)	$	(1.15	)
Weighted-average number of Class A common shares outstanding, basic and diluted	559,739			25,511			501,031			23,008
Class T common stock:
Undistributed net loss attributable to Class T common stockholders	$	(213,292	)	$	—		$	(351,700	)	$	—
Class T common stock cash distributions declared	22,858			—			26,250			—
Net loss attributable to Class T common stockholders	$	(190,434	)	$	—		$	(325,450	)	$	—
Net loss per Class T common share, basic and diluted	$	(0.27	)	$	—		$	(0.67	)	$	—
Weighted-average number of Class T common shares outstanding, basic and diluted	696,020			—			486,845			—

Diluted earnings per share take into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted to common stock. None of the 50,000 shares of convertible stock (see Note 10) are included in the diluted earnings per share calculations because the necessary conditions for conversion have not been satisfied as of June 30, 2017 (were such date to represent the end of the contingency period). Due to reported losses for the three and six months ended June 30, 2017, common shares potentially issuable to settle accrued distributions are excluded from the calculation of diluted earnings per share calculations, as their inclusion would be anti-dilutive.

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Equity

6 Months Ended

Jun. 30, 2017

Equity [Abstract]

Equity

EQUITY

Preferred Stock

The Company’s charter authorizes the Company to issue 10 million shares of its $0.01 par value preferred stock. At June 30, 2017, no shares of preferred stock were issued or outstanding.

Convertible Stock

The Company’s charter authorizes the Company to issue 50,000 shares of its $0.01 par value convertible stock. On August 5, 2016, the board of directors approved the issuance of 50,000 convertible shares in exchange of 5,000 shares of Class A common stock. At June 30, 2017, the Company had 50,000 shares of $0.01 par value convertible stock outstanding, which are owned by the Advisor. The convertible stock will convert into shares of the Company’s Class A common stock upon the occurrence of (a) the Company having paid distributions to common stockholders that in the aggregate equal 100% of the price at which the Company originally sold the shares plus an amount sufficient to produce a 6% cumulative, non-compounded annual return on the shares at that price; or (b) if the Company lists its common stock on a national securities exchange or the Company consummates a merger pursuant to which consideration received by the stockholders is securities of another issuer that are listed on a national securities exchange.

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

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

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

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

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

Common Stock

The Company’s charter authorizes the issuance of 1 billion shares of common stock with a par value of $0.01 per share, of which, the Company previously allocated 250 million shares of its $0.01 par value common stock as Class A common stock and 750 million shares of its $0.01 par value common stock as Class T common stock. As of June 30, 2017, there were 616,086 shares of Class A common stock and 1,067,396 shares of Class T common stock issued and outstanding.

On June 28, 2017, the Company amended its charter to authorize 750 million shares of its $0.01 par value common stock as Class R common stock, 75 million shares of its $0.01 par value common stock as Class I common stock, 25 million shares of its $0.01 par value common stock as Class A common stock and 25 million shares of its $0.01 par value common stock as Class T common stock. As of July 3, 2017, the Company ceased offering shares of Class A and Class T common stock in its primary offering. As of July 3, 2017, the Company commenced the offering of Class R and Class I common stock in its public offering.

Distributions

Cash Distributions

During the six months ended June 30, 2017, the Company's board of directors declared a cash distribution on the outstanding shares of all classes of its common stock based on daily record dates for the period from March 31, 2017 through July 30, 2017, which were paid on April 28, 2017, May 31, 2017, June 30, 2017 and July 31, 2017. The distributions declared for these periods were calculated based on stockholders of record each day during these periods at a rate of (i) $0.000547945 per share per day less (ii) the applicable daily distribution and shareholder servicing fees accrued for and allocable to any class of common stock. Distributions are generally paid to stockholders on the last business day of the month for which the distribution has accrued. Distributions reinvested pursuant to the distribution reinvestment plan are reinvested in shares of the same class as the shares on which distributions are made.

The table below provides information regarding distributions declared and paid to stockholders during the three and six months ended June 30, 2017:

	Three Months Ended June 30, 2017						Six Months Ended June 30, 2017
	Class A		Class T		Total		Class A		Class T		Total
Distributions declared	$	30,709	$	22,858	$	53,567	$	38,400	$	26,250	$	64,650
Distributions reinvested in shares of common stock paid	$	9,637	$	11,577	$	21,214	$	16,087	$	16,219	$	32,306
Cash distributions paid	17,686		4,541		22,227		32,562		6,094		38,656
Total distributions paid	$	27,323	$	16,118	$	43,441	$	48,649	$	22,313	$	70,962

At June 30, 2017, the Company had accrued $18,862 for the cash distributions paid on July 31, 2017, which is reported in distributions payable in the consolidated balance sheet.

Stock Dividends

On April 25, 2017, the Company's board of directors authorized a stock dividend for the second quarter of 2017, in the amount of 0.01 shares of common stock on each outstanding share of common stock to all common stockholders of record as of the close of business on July 1, 2017. Stock dividends are issued in the same class of shares as the shares for which such stockholder received the stock dividend. The Company issued this stock dividend on July 14, 2017. In accordance with the accounting guidance for stock dividends, these shares were reflected as being issued in the consolidated balance sheets at June 30, 2017.

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Fair Value Measures and Disclosures

6 Months Ended

Jun. 30, 2017

Fair Value Disclosures [Abstract]

Fair Value Disclosures

FAIR VALUE MEASURES AND DISCLOSURES

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

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

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

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

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

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

The carrying and fair values of the Company’s mortgage note payable, which was not carried at fair value on the consolidated balance sheets at June 30, 2017 and December 31, 2016, were as follows (in thousands):

	June 30, 2017				December 31, 2016
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Mortgage note payable	$	1,611,247	$	1,415,677	$	1,625,000	$	1,625,000

The carrying amount of the mortgage notes payable presented is the outstanding borrowings excluding premium or discount and deferred finance costs, net. At June 30, 2017, the fair value of mortgage note payable was estimated using a discounted cash flow model and rates available to the Company for debt with similar terms and remaining maturity. At December 31, 2016, the carrying value of the mortgage note payable was estimated to be the fair value due to the recent issuance of the mortgage obtained (Level 3).

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Operating Expense Limitation

6 Months Ended

Jun. 30, 2017

Other Income and Expenses [Abstract]

Operating Expense Limitation

OPERATING EXPENSE LIMITATION

Under its charter, commencing September 30, 2017, the Company must limit its total operating expenses to the greater of 2% of its average invested assets or 25% of its net income for the four most recently completed fiscal quarters, unless the conflicts committee of the Company’s board of directors has determined that such excess expenses were justified based on unusual and non-recurring factors.

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Subsequent Events

6 Months Ended

Jun. 30, 2017

Subsequent Events [Abstract]

Subsequent Events

SUBSEQUENT EVENTS

On July 27, 2017, the Company's board of directors declared cash distributions on the outstanding shares of all classes of the Company's common stock based on daily record dates from July 31, 2017 through August 30, 2017, from August 31, 2017 through September 28, 2017 and from September 29, 2017 through October 30, 2017, which distributions the Company expects to pay on August 31, 2017, September 29, 2017 and October 31, 2017, respectively. Distributions for these periods have been or will be calculated based on stockholders of record each day during these periods at a rate of (i) $0.001434521 per share per day less (ii) the applicable daily distribution and shareholder servicing fees accrued for and allocable to any class of common stock divided by the number of shares of common stock of such class outstanding as of the close of business of each respective record date.

On July 31, 2017, the Company, through its wholly-owned subsidiary, purchased a multifamily community located in Jacksonville, Florida ("Bay Club"). Bay Club, constructed in 1990, contains 220 units and amenities, including private garages for each unit, a clubhouse, pool, fitness center and business center. The Bay Club property is currently 96% leased. In connection with the transaction, the Company made an earnest money deposit of $1.0 million, which is included in prepaid expenses and other assets on the consolidated balance sheet at June 30, 2017.

Bay Club was acquired for a purchase price of $28.3 million, excluding closing costs. The Company funded the purchase with a combination of offering proceeds and proceeds from a seven-year, $21.5 million secured mortgage loan with CBRE Capital Markets, Inc., an unaffiliated lender, secured by Bay Club (the "Bay Club Mortgage Loan"). The Bay Club Mortgage Loan matures on July 31, 2024. The Bay Club Mortgage Loan bears interest at a rate of LIBOR plus 1.87%, with a maximum interest rate of 5.75%. Monthly payments are interest only for the first 24 months. Beginning on August 1, 2019, the Company will pay both principal and interest based on 30 year amortization. Any remaining principal balance and all accrued and unpaid interest and fees will be due at maturity. The Company may prepay the Bay Club Mortgage Loan in full at any time (1) after July 31, 2019 and until April 30, 2024 upon payment of a prepayment premium equal to 1% of the principal amount prepaid; and (2) after April 30, 2024 with no prepayment premium. The non-recourse carveouts under the loan documents for the Bay Club Mortgage Loan are guaranteed by the Company.

The Company has evaluated subsequent events through the filing of these financial statements and determined no events have occurred, other than those discussed above that would require adjustments to or additional disclosure in the consolidated financial statements.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2017

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying consolidated financial statements have been prepared in conformity with GAAP.

Principles of Consolidation

Principles of Consolidation

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

Subsidiaries

Resource Apartment REIT III Holdings, LLC

Resource Apartment REIT III OP, LP

RRE Payne Place Holdings, LLC

RRE Bay Club Holdings, LLC

All intercompany accounts have been eliminated in consolidation.

Use of Estimates

Use of Estimates

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

Real Estate Investments

Real Estate Investments

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

Buildings	27.5 years
Building improvements	3.0 to 27.5 years
Tenant improvements	Shorter of lease term or expected useful life
Lease intangibles	Weighted average remaining term of related lease

Impairment of Long Lived Assets

Impairment of Long Lived Assets

When circumstances indicate the carrying value of a property may not be recoverable, the Company will review the asset for impairment. This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition.

These estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors.

If impairment exists, due to the inability to recover the carrying value of a property, an impairment loss will be recorded to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held and used. For properties held for sale, the impairment loss is the adjustment to fair value less estimated cost to dispose of the asset. These assessments have a direct impact on net income because recording an impairment loss results in an immediate negative adjustment to net income. There were no impairment losses recorded on long lived assets during the three and six months ended June 30, 2017 and 2016.

Loans Held for Investment

Loans Held for Investment

The real estate loans receivable will be recorded at cost and reviewed for potential impairment at each balance sheet date. A loan receivable is considered impaired when it becomes probable, based on current information, that the Company will be unable to collect all amounts due according to the loan’s contractual terms. The amount of impairment, if any, is measured by comparing the recorded amount of the loan to the present value of the expected cash flows or the fair value of the collateral. If a loan is deemed to be impaired, the Company will record a reserve for loan losses through a charge to income for any shortfall. Failure to recognize impairment would result in the overstatement of the carrying values of the Company’s real estate loans receivable and an overstatement of the Company’s net income.

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

Interest income from loans receivable will be recognized based on the contractual terms of the debt instrument. Fees related to any buydown of the interest rate will be deferred as prepaid interest income and amortized over the term of the loan as an adjustment to interest income. Closing costs related to the purchase of a loan receivable will be amortized over the term of the loan and accreted as an adjustment against interest income.

Allocation of Purchase Price of Acquired Assets

Allocation of Purchase Price of Acquired Assets

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

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

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

The Company also considers information obtained about each property as a result of its pre-acquisition due diligence, marketing and leasing activities in estimating the fair value of the tangible and intangible assets acquired. In estimating carrying costs, management also includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods. Management also estimates costs to execute similar leases including leasing commissions and legal and other related expenses to the extent that such costs have not already been incurred in connection with a new lease origination as part of the transaction.

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

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

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

Revenue Recognition

Revenue Recognition

The Company recognizes minimum rent, including rental abatements and contractual fixed increases attributable to operating leases, on a straight-line basis over the term of the related lease and includes amounts expected to be received in later years in deferred rents. The Company records property operating expense reimbursements due from tenants for common area maintenance, real estate taxes and other recoverable costs in the period the related expenses are incurred.

Tenant Receivables

Tenant Receivables

Tenant receivables are stated in the consolidated financial statements as amounts due from tenants net of an allowance for uncollectible receivables. Payment terms vary and receivables outstanding longer than the payment terms are considered past due. The Company determines its allowance by considering a number of factors, including the length of time receivables are past due, security deposits held, the Company’s previous loss history, the tenants’ current ability to pay their obligations to the Company, the condition of the general economy and the industry as a whole. The Company writes off receivables when they become uncollectible. At June 30, 2017 and December 31, 2016, there were no allowances for uncollectible receivables.

Income Taxes

Income Taxes

The Company intends to elect and qualify to be taxed as a REIT, commencing with its taxable year ending December 31, 2017. Accordingly, once qualified as a REIT, the Company will generally not be subject to corporate U.S. federal or state income tax to the extent that it makes qualifying distributions to its stockholders, and provided it satisfies on a continuing basis, through actual investment and operating results, the REIT requirements including certain asset, income, distribution and stock ownership tests. If the Company fails to qualify as a REIT, and does not qualify for certain statutory relief provisions, it will be subject to U.S. federal, state and local income taxes and may be precluded from qualifying as a REIT for the subsequent four taxable years following the year in which it lost its REIT qualification. Accordingly, the Company’s failure to qualify as a REIT could have a material adverse impact on its results of operations and amounts available for distribution to its stockholders.

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

The Company may elect to treat certain of its subsidiaries as taxable REIT subsidiaries ("TRSs"). In general, a TRS may hold assets and engage in activities that it cannot hold or engage in directly and generally may engage in any real estate or non-real estate-related business. A TRS is subject to U.S. federal, state and local corporate income taxes.

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

Earnings Per Share

Earnings Per Share

Basic earnings per share are computed by dividing net income (loss) attributable to common stockholders for each period by the weighted-average common shares outstanding during the period for each share class. Diluted net income (loss) per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted to common stock. For the purposes of calculating earnings per share, all common shares and per share information in the financial statements have been retroactively adjusted for the effect of any stock dividends and stock splits.

In accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") No. 260-10-45, "Earnings Per Share", the Company uses the two-class method to calculate earnings per share. Basic earnings per share is calculated based on dividends declared and the rights of common shares and participating securities in any undistributed earnings, which represents net income remaining after deduction of dividends declared during the period. The undistributed earnings are allocated to all outstanding common shares based on their relative percentage of each class of shares to the total number of outstanding shares. The Company did not have any participating securities outstanding other than Class A common stock and Class T common stock during the periods presented (see Note 9).

Organization and Offering Costs

Organization and Offering Costs

The Company incurs organization and offering costs in pursuit of its financing. Organization and offering costs (other than selling commissions and dealer manager fees) of the Company are initially being paid by the Advisor on behalf of the Company.

Pursuant to the advisory agreement between the Company and the Advisor, the Company is obligated to reimburse the Advisor for organization and other offering costs paid by the Advisor on behalf of the Company, up to an amount equal to 4.0% of gross offering proceeds as of the termination of the initial public offering if the Company raises less than $500 million in the primary portion of the initial public offering and 2.5% of gross offering proceeds as of the termination of the initial public offering if the Company raises $500 million or more in the primary portion of the initial public offering.

Through June 30, 2017, the Company has charged approximately $360,624 to equity for the payment of offering costs consisting of accounting, advertising, allocated payroll, due diligence, marketing, legal, printing and similar costs. At June 30, 2017, the Advisor has advanced approximately $4.7 million of these costs on behalf of the Company, of which $4.3 million have been deferred at June 30, 2017. A portion of deferred offering costs will be charged to equity upon the sale of each share of common stock sold under the public offering. Such deferred costs will only become a liability of the Advisor to the extent that organization and offering costs incurred by us exceed 4% of the gross proceeds of the initial public offering. However, if the Company raises the maximum offering amount in the primary offering, organization and offering expenses (excluding selling commissions, the dealer manager fee and the distribution and stockholder servicing fee) are estimated to be approximately 1.0% of the gross proceeds of the initial public offering. When recorded by the Company, organization costs are expensed as incurred, which include all expenses incurred by the Company in connection with its formation, including but not limited to legal fees and other costs to incorporate. There can be no assurance that the Company's plans to raise capital will be successful. Prior to the Company breaking escrow, the Advisor incurred approximately $104,266 of formation and other operating expenses on the Company's behalf, which will not be reimbursed to the Advisor.

Outstanding Class T shares issued in the Company's primary offering are subject to a 1% annual distribution and shareholder servicing fee for five years from the date on which such share is issued. The Company will cease paying the distribution and shareholder servicing fee on each Class T share prior to the fifth anniversary of its issuance on the earliest of the following, should any of these events occur: (i) the date at which, in the aggregate, underwriting compensation from all sources equals 10% of the gross proceeds from the Company's primary offering (i.e., excluding proceeds from sales pursuant to the DRIP); (ii) the date on which the Company lists its common stock on a national securities exchange; and (iii) the date of a merger or other extraordinary transaction in which the Company is a party and in which the common stock is exchanged for cash or other securities. The Company cannot predict if or when any of these events will occur.

Outstanding Class R shares issued in the Company's primary offering are also subject to a 1% annual distribution and shareholder servicing fee.  The Company will cease paying the distribution and shareholder servicing fee with respect to Class R shares held in any particular account, and those Class R shares will convert into a number of Class I shares determined by multiplying each Class R share to be converted by the applicable "Conversion Rate," on the earlier of (i) the date after the termination of the primary offering at which, in the aggregate, underwriting compensation from all sources equals 10% of the gross proceeds from its primary offering; (ii) a listing of the Class I shares on a national securities exchange; (iii) a merger or consolidation of the company with or into another entity, or the sale or other disposition of all or substantially all of its assets; and (iv) the end of the month in which the total underwriting compensation (which consists of selling commissions, dealer manager fees and distribution and shareholder servicing fees) paid with respect to such Class R shares purchased in a primary offering is not less than 8.5% (or a lower limit, provided that, in the case of a lower limit, the agreement between the Resource Securities and the broker-dealer in effect at the time Class R shares were first issued to such account sets forth the lower limit and Resource Securities advises the Company's transfer agent of the lower limit in writing) of the gross offering price of those Class R shares purchased in such primary offering (excluding shares purchased through its distribution reinvestment plan).

The Company records distribution and shareholder servicing fees as a reduction to additional paid-in capital and the related liability in an amount equal to the maximum fees payable in relation to the Class T and Class R shares on the date the shares are issued. The liability will be relieved over time, as the fees are paid to the Dealer Manager, or adjusted if the fees are no longer payable pursuant to the conditions described above. For issued Class T shares, the Company has accrued an estimate of the total distribution and shareholder servicing fee of $497,173 for the full five year period at June 30, 2017 based on a total of 5% of the gross proceeds from all Class T shares sold, of which, the Company paid $16,782 cumulatively through June 30, 2017. There were no Class R shares issued and outstanding as of June 30, 2017.

Adoption of New Accounting Standards

Adoption of New Accounting Standards

 Accounting Standards Issued But Not Yet Effective

In May 2014, FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers", which will replace most existing revenue recognition guidance in GAAP. The core principle of ASU No. 2014-09 is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. ASU No. 2014-09 requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. ASU No. 2014-09 will be effective for the Company beginning January 1, 2018, including interim periods in 2018, and allows for both retrospective and prospective methods of adoption. In accordance with the Company’s plan for the adoption of ASU 2014-09, the Company has identified revenue streams and is performing an in-depth review to identify the related performance obligations and to evaluate the impact on the Company’s consolidated financial statements and internal accounting processes and controls. As the majority of the Company’s revenue is derived from lease contracts, the Company does not expect that the adoption of ASU 2014-09 or related amendments and modifications issued by the FASB will have a material impact on its consolidated financial statements.

In February 2016, FASB issued ASU No. 2016-02, "Leases", which is intended to improve financial reporting about leasing transactions and requires organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. ASU No. 2016-02 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is continuing to evaluate this guidance; however, it does not expect the adoption of ASU No. 2016-02 to have a significant impact on its consolidated financial statements.

In June 2016, FASB issued ASU No. 2016-03 "Financial Instruments - Credit Losses", which requires measurement and recognition of expected credit losses for financial assets held. The standard update is effective for the Company beginning January 1, 2019. The Company is continuing to evaluate this guidance; however, it does not expect the adoption of ASU No. 2016-03 to have a significant impact on its consolidated financial statements.

In August 2016, FASB issued ASU No. 2016-15 "Classification of Certain Cash Receipts and Cash Payments", which addresses eight specific cash flow issues with the objective of reducing existing diversity in practice.  The guidance is effective for the Company as of January 1, 2018. Early application is permitted. The adoption of the new requirements is not expected to have a material impact on the Company's consolidated statement of cash flows.

In November 2016, FASB issued ASU No. 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash," which provides guidance on the classification of restricted cash in the statement of cash flows. ASU No. 2016-18 is effective for the Company's fiscal year beginning January 1, 2018 and the Company does not expect the adoption of ASU No. 2016-18 to have a material effect on its consolidated financial statements and disclosures.

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

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Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2017

Accounting Policies [Abstract]

Estimated Useful Life of Assets

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

Buildings	27.5 years
Building improvements	3.0 to 27.5 years
Tenant improvements	Shorter of lease term or expected useful life
Lease intangibles	Weighted average remaining term of related lease

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Supplemental Cash Flow Information (Tables)

6 Months Ended

Jun. 30, 2017

Supplemental Cash Flow Elements [Abstract]

Schedule of Supplemental Cash Flow Information

The following table presents supplemental cash flow information:

	Six Months Ended June 30,
	2017		2016
Non-cash operating, financing and investing activities:
Offering costs payable	$	1,796,886	$	1,514,089
Cash distributions on common stock declared but not yet paid	18,862		—
Stock issued from distribution reinvestment plan	32,306		—
Stock dividend issued	251,567		—
Subscription of common stock	—		2,000,000
Cash paid during the year for:
Interest	$	20,986	$	—

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Acquisitions (Tables)

6 Months Ended

Jun. 30, 2017

Business Combinations [Abstract]

Summary of Acquisitions and Fair Value Assigned

The table below summarized the acquisition and the respective fair value assigned:

Multifamily Community Name	City and State	Date of Acquisition	Contractual Purchase Price (1)		Land		Building and Improvements		Furniture, Fixtures and Equipment		Intangible Assets		Other Liabilities			Fair Value Assigned
Payne Place	Alexandria, Virginia	8/19/2016	$	2,500,000	$	1,419,898	$	1,016,451	$	13,710	$	49,941	$	(6,327	)	$	2,493,673

(1) Contractual purchase price excludes closing costs, acquisition expenses, and other immaterial settlement date adjustments and pro-rations.

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Rental Properties, Net (Tables)

6 Months Ended

Jun. 30, 2017

Real Estate [Abstract]

Summary of Investment in Rental Property

The following table presents the Company's investment in rental properties:

	June 30, 2017			December 31, 2016
Land	$	1,419,898		$	1,419,898
Building and improvements	1,021,675			1,018,051
Furniture, fixtures and equipment	24,812			21,317
Construction in progress	4,365			—
	2,470,750			2,459,266
Less: accumulated depreciation	(34,259		)	(13,431		)
Total rental property, net	$	2,436,491		$	2,445,835

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Mortgage Notes Payable (Tables)

6 Months Ended

Jun. 30, 2017

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments

The following is a summary of the Company's mortgage note payable as of June 30, 2017 and December 31, 2016:

	Outstanding Borrowings		Deferred Financing Costs, net			Carrying Value		Outstanding borrowings		Deferred Financing Costs, net			Carrying Value		Average Monthly Debt Service		Average Monthly Escrow
Collateral	June 30, 2017							December 31, 2016
Payne Place	$	1,611,247	$	(33,348	)	$	1,577,899	$	1,625,000	$	(34,166	)	$	1,590,834	$	6,948	$	1,933

Schedule of Maturities of Long-term Debt

Annual principal payments on the mortgage note payable for each of the next five 12-month periods ending June 30, and thereafter, are as follows:

2018	$	33,743
2019	34,807
2020	35,905
2021	37,038
2022	38,206
Thereafter	1,431,548
	$	1,611,247

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure

Estimated amortization of the existing deferred financing costs for the next five 12-month periods ending June 30, are as follows:

2018	$	1,935
2019	1,894
2020	1,851
2021	1,807
2022	1,761
Thereafter	24,100
	$	33,348

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Certain Relationships and Related Party Transactions (Tables)

6 Months Ended

Jun. 30, 2017

Related Party Transactions [Abstract]

Schedule of Related Party Transactions

	Class A Share	Class T Share		Class R Share		Class I Share
Initial Offering Price	$10.00	$9.47		$9.52		$9.13
Selling Commissions Paid by Company (per shares)	7.0%	2.0%		3.5%	(1)	None
Dealer Manager Fee (per share)	3.0%	3.0%		3.0%	(1)	1.5%
Annual Distributions and Shareholder Servicing Fee	None	1.0%	(2)	1.0%	(3)	None
Initial Offering Price Under the DRIP	$9.60	$9.09		$9.14		$8.90

⁽¹⁾  The aggregate amount paid to Resource Securities for selling commissions and dealer manager fees shall not exceed 5.5% of gross offering proceeds.

⁽²⁾  Each outstanding Class T share issued in the primary offering is subject to an annual distribution and shareholder servicing fee for five years from the date on which such share is issued. The Company will cease paying the distribution and shareholder servicing fee on each Class T share prior to the fifth anniversary of its issuance on the earliest of the following, should any of these events occur: (i) the date at which, in the aggregate, underwriting compensation from all sources equals 10% of the gross proceeds from the Company's primary offering (i.e., excluding proceeds from sales pursuant to the DRIP); (ii) the date on which the Company lists its common stock on a national securities exchange; and (iii) the date of a merger or other extraordinary transaction in which the Company is a party and in which the common stock is exchanged for cash or other securities. The Company cannot predict if or when any of these events will occur.

⁽³⁾  The Company will cease paying the distribution and shareholder servicing fee with respect to Class R shares held in any particular account, and those Class R shares will convert into a number of Class I shares determined by multiplying each Class R share to be converted by the applicable "Conversion Rate," on the earlier of (i) the date after the termination of the primary offering at which, in the aggregate, underwriting compensation from all sources equals 10.0% of the gross proceeds from the primary offering; (ii) a listing of the Class I shares on a national securities exchange; (iii) a merger or consolidation of the Company with or into another entity, or the sale or other disposition of all or substantially all of our assets; and (iv) the end of the month in which the total underwriting compensation (which consists of selling commissions, dealer manager fees and distribution and shareholder servicing fees) paid with respect to such Class R shares purchased in a primary offering is not less than 8.5% (or a lower limit, provided that, in the case of a lower limit, the agreement between Resource Securities and the broker-dealer in effect at the time Class R shares were first issued to such account sets forth the lower limit and Resource Securities advises the Company’s transfer agent of the lower limit in writing) of the gross offering price of those Class R shares purchased in such primary offering (excluding shares purchased through the distribution reinvestment plan). The Company cannot predict if or when any of these events will occur.

The fees earned/expenses incurred and the amounts payable to such related parties are summarized in the following table:

	June 30, 2017		December 31, 2016
Due from related parties:
Advisor	$	2,342	$	1,041
RAI and affiliate - insurance funds held in escrow	1,298		1,311
	$	3,640	$	2,352
Due to related parties:
Advisor:
Acquisition related reimbursements	$	1,079	$	14,050
Asset management fees	—		2
Organization and offering costs	4,706,053		2,848,317
Operating expense reimbursements (including prepaid expenses)	1,309,879		682,661
	$	6,017,011	$	3,545,030
RAI:
Internal Audit Fee	$	750	$	8,250
Operating expense reimbursements	3,238		—
	$	3,988	$	8,250
Resource Securities:
Selling commissions and dealer-manager fees	$	—	$	10,363
Distribution and shareholder servicing fee	480,391		53,015
	$	480,391	$	63,378
Other	$	—	$	55
			—
	$	6,501,390	$	3,616,713

	Three Months Ended   June 30,				Six Months Ended   June 30,
	2017		2016		2017		2016
Fees earned / expenses incurred:
Advisor
Asset management fees (1)	$	6,730	$	—	$	13,457	$	—
Organization and offering costs (2)	$	1,010,962	$	—	$	1,857,736	$	—
Operating expense reimbursement (3)	$	162,526	$	26,458	$	314,205	$	26,458
Resource Securities
Selling commissions and dealer-manager fees (4)	$	403,514	$	—	$	636,033	$	—
Distribution and shareholder servicing fee (4)	$	291,316	$	—	$	443,471	$	—

(1) Included in Management fees on the consolidated statements of operations.

(2) Included in Deferred offering costs and Stockholders' equity on the consolidated balance sheets.

(3) Included in General and administrative on the consolidated statements of operations and excludes third party costs that are advanced by the Advisor.

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

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2017

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The following table presents a reconciliation of basic and diluted earnings per share for the periods presented as follows:

	Three Months Ended   June 30,						Six Months Ended   June 30,
	2017			2016			2017			2016
Net loss	$	(331,254	)	$	(26,458	)	$	(648,997	)	$	(26,458	)
Less: Class A common stock cash distributions declared	30,709			—			38,400			—
Less: Class T common stock cash distributions declared	22,858			—			26,250			—
Undistributed net loss attributable to common stockholders	$	(384,821	)	$	(26,458	)	$	(713,647	)	$	(26,458	)
Class A common stock:
Undistributed net loss attributable to Class A common stockholders	$	(171,529	)	$	(26,458	)	$	(361,947	)	$	(26,458	)
Class A common stock cash distributions declared	30,709			—			38,400			—
Net loss attributable to Class A common stockholders	$	(140,820	)	$	(26,458	)	$	(323,547	)	$	(26,458	)
Net loss per Class A common share, basic and diluted	$	(0.25	)	$	(1.04	)	$	(0.65	)	$	(1.15	)
Weighted-average number of Class A common shares outstanding, basic and diluted	559,739			25,511			501,031			23,008
Class T common stock:
Undistributed net loss attributable to Class T common stockholders	$	(213,292	)	$	—		$	(351,700	)	$	—
Class T common stock cash distributions declared	22,858			—			26,250			—
Net loss attributable to Class T common stockholders	$	(190,434	)	$	—		$	(325,450	)	$	—
Net loss per Class T common share, basic and diluted	$	(0.27	)	$	—		$	(0.67	)	$	—
Weighted-average number of Class T common shares outstanding, basic and diluted	696,020			—			486,845			—

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Equity Equity (Tables)

6 Months Ended

Jun. 30, 2017

Equity [Abstract]

Dividends Declared

The table below provides information regarding distributions declared and paid to stockholders during the three and six months ended June 30, 2017:

	Three Months Ended June 30, 2017						Six Months Ended June 30, 2017
	Class A		Class T		Total		Class A		Class T		Total
Distributions declared	$	30,709	$	22,858	$	53,567	$	38,400	$	26,250	$	64,650
Distributions reinvested in shares of common stock paid	$	9,637	$	11,577	$	21,214	$	16,087	$	16,219	$	32,306
Cash distributions paid	17,686		4,541		22,227		32,562		6,094		38,656
Total distributions paid	$	27,323	$	16,118	$	43,441	$	48,649	$	22,313	$	70,962

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Fair Value Measures and Disclosures (Tables)

6 Months Ended

Jun. 30, 2017

Fair Value Disclosures [Abstract]

Fair Value, by Balance Sheet Grouping

The carrying and fair values of the Company’s mortgage note payable, which was not carried at fair value on the consolidated balance sheets at June 30, 2017 and December 31, 2016, were as follows (in thousands):

	June 30, 2017				December 31, 2016
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Mortgage note payable	$	1,611,247	$	1,415,677	$	1,625,000	$	1,625,000

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Nature of Business and Operations (Details)				6 Months Ended
	Aug. 05, 2016 shares	Jun. 29, 2016 USD ($) shares	Aug. 10, 2015 USD ($) shares	Jun. 30, 2017 USD ($) property $ / shares shares	Jul. 31, 2017 unit	Jul. 03, 2017 $ / shares	Dec. 31, 2016 property	Jun. 30, 2016 USD ($)
Class of Stock [Line Items]
Value of shares of common stock offered				$ 1,100,000,000
Percentage of the new primary offering price				96.00%
Consideration received on to date				$ 15,700,000
Issuance of common stock				11,035,315
Gross offering proceeds threshold for commencement of operations		$ 2,000,000
Subscription of common stock				$ 0				$ 2,000,000
Number of properties owned | property				1
Alexandria, Virginia
Class of Stock [Line Items]
Number of properties owned | property				1			1
Advisor
Class of Stock [Line Items]
Issuance of common stock			$ 200,000
Issuance of stock (in shares) | shares			20,000
Common stock exchanged (in shares) | shares	5,000
Class A common stock
Class of Stock [Line Items]
Number of shares issued in transaction to date | shares				601,206.55
Issuance of stock (in shares) | shares				616,086.02
Class A common stock | Resource America, Inc.
Class of Stock [Line Items]
Issuance of common stock		$ 2,000,000
Issuance of stock (in shares) | shares		222,222
Class A common stock | PENNSYLVANIA
Class of Stock [Line Items]
Subscription of common stock				$ 50,000,000
Class A common stock | WASHINGTON
Class of Stock [Line Items]
Subscription of common stock				$ 20,000,000
Class T common stock
Class of Stock [Line Items]
Number of shares issued in transaction to date | shares				1,049,996.30
Issuance of stock (in shares) | shares				1,067,395.79
Convertible Common Stock | Advisor
Class of Stock [Line Items]
Issuance of stock (in shares) | shares	50,000
Initial public offering
Class of Stock [Line Items]
Value of shares of common stock offered				$ 1,000,000,000
Initial public offering | Class A common stock
Class of Stock [Line Items]
Common stock, initial offering price (in dollars per share) | $ / shares				$ 10
Initial public offering | Class T common stock
Class of Stock [Line Items]
Common stock, initial offering price (in dollars per share) | $ / shares				9.47
Initial public offering | Class R Common Stock
Class of Stock [Line Items]
Common stock, initial offering price (in dollars per share) | $ / shares				9.52
Initial public offering | Class I Common Stock
Class of Stock [Line Items]
Common stock, initial offering price (in dollars per share) | $ / shares				$ 9.13
Distribution reinvestment plan
Class of Stock [Line Items]
Value of shares of common stock offered				$ 100,000,000
Distribution reinvestment plan | Class A common stock
Class of Stock [Line Items]
Common stock, initial offering price (in dollars per share) | $ / shares				$ 9.60
Distribution reinvestment plan | Class T common stock
Class of Stock [Line Items]
Common stock, initial offering price (in dollars per share) | $ / shares				9.09
Distribution reinvestment plan | Class R Common Stock
Class of Stock [Line Items]
Common stock, initial offering price (in dollars per share) | $ / shares				9.14
Distribution reinvestment plan | Class I Common Stock
Class of Stock [Line Items]
Common stock, initial offering price (in dollars per share) | $ / shares				$ 8.90
Subsequent event | Initial public offering | Class R Common Stock
Class of Stock [Line Items]
Common stock, initial offering price (in dollars per share) | $ / shares						$ 9.52
Subsequent event | Initial public offering | Class I Common Stock
Class of Stock [Line Items]
Common stock, initial offering price (in dollars per share) | $ / shares						$ 9.13
Bay Club | Subsequent event
Class of Stock [Line Items]
Number of units in real estate property | unit					220

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Summary of Significant Accounting Policies (Details) - USD ($)		3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2017	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Property, Plant and Equipment [Line Items]
Impairment of long-lived assets		$ 0	$ 0	$ 0	$ 0
Allowance for uncollectible receivables	$ 0	0		0		$ 0
Deferred offering costs	360,624			1,328,398
Advisor
Property, Plant and Equipment [Line Items]
Cumulative advances from related party	4,700,000	4,700,000		4,700,000
Advisor
Property, Plant and Equipment [Line Items]
Cumulative advances from related party	$ 4,700,000	$ 4,700,000		4,700,000
Deferred cash or noncash				4,300,000
Formation and other operating expenses				$ 104,266		$ 104,266
Advisor | Initial public offering
Property, Plant and Equipment [Line Items]
Approximate reimbursement of organization and offering expenses to be reimbursed, option one				4.00%
Offering proceeds, threshold, option one (less than)				$ 500,000,000
Approximate reimbursement of organization and offering expenses to be reimbursed, option two				2.50%
Offering proceeds, threshold, option two (more than)				$ 500,000,000
Advisor | Initial public offering and DRIP
Property, Plant and Equipment [Line Items]
Approximate reimbursement of organization and offering expenses to be reimbursed, option two				1.00%
Minimum
Property, Plant and Equipment [Line Items]
Remaining term of lease				1 month
Maximum
Property, Plant and Equipment [Line Items]
Remaining term of lease				1 year
Buildings
Property, Plant and Equipment [Line Items]
Real estate investments, useful life				27 years 6 months
Building improvements | Minimum
Property, Plant and Equipment [Line Items]
Real estate investments, useful life				3 years
Building improvements | Maximum
Property, Plant and Equipment [Line Items]
Real estate investments, useful life				27 years 6 months
Class T common stock
Property, Plant and Equipment [Line Items]
Annual fee, percentage of purchase price of common stock sold				1.00%
Annual distribution and shareholder servicing fee, term				5 years
Triggering event to cease payment, percentage of gross proceeds	10.00%	10.00%		10.00%
Common stock, shares issued (in shares)	1,067,396	1,067,396		1,067,396		114,037
Common stock, shares outstanding (in shares)	1,067,396	1,067,396		1,067,396		114,037
Class T common stock | Resource Securities
Property, Plant and Equipment [Line Items]
Annual fee, percentage of purchase price of common stock sold				1.00%
Class R Common Stock
Property, Plant and Equipment [Line Items]
Annual fee, percentage of purchase price of common stock sold				1.00%
Triggering event to cease payment, percentage of gross proceeds	10.00%	10.00%		10.00%
Underwriting compensation as percentage of Class R gross offering price (as a percentage)				8.50%
Common stock, shares issued (in shares)	0	0		0		0
Common stock, shares outstanding (in shares)	0	0		0		0
Class R Common Stock | Resource Securities
Property, Plant and Equipment [Line Items]
Annual fee, percentage of purchase price of common stock sold				1.00%
Triggering event to cease payment, percentage of gross proceeds	10.00%	10.00%		10.00%
Underwriting compensation as percentage of Class R gross offering price (as a percentage)				8.50%
Distribution and shareholder servicing fee | Resource Securities
Property, Plant and Equipment [Line Items]
Accrued estimate of distribution and shareholder servicing fee		$ 291,316	$ 0	$ 443,471	$ 0
Distribution and shareholder servicing fee | Class T common stock | Resource Securities
Property, Plant and Equipment [Line Items]
Accrued estimate of distribution and shareholder servicing fee				$ 497,173
Percentage of shares sold				5.00%
Payment of distribution and shareholder service fee				$ 16,782

XML

Supplemental Cash Flow Information (Details) - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Non-cash operating, financing and investing activities:
Offering costs payable	$ (1,796,886)	$ (1,514,089)
Cash distributions on common stock declared but not yet paid	18,862	0	$ 25,174
Stock issued from distribution reinvestment plan	32,306	0
Stock dividend issued	251,567	0
Subscription of common stock	0	2,000,000
Interest	$ 20,986	$ 0

XML

Acquisitions - Summary and Narrative (Details)		3 Months Ended		6 Months Ended
	Aug. 19, 2016 USD ($) ft² property	Jun. 30, 2017 USD ($) property	Jun. 30, 2016 USD ($)	Jun. 30, 2017 USD ($) property	Jun. 30, 2016 USD ($)	Dec. 31, 2016 property
Business Acquisition [Line Items]
Number of properties owned | property		1		1
Acquisition costs		$ 83,233	$ 0	$ 83,233	$ 0
Alexandria, Virginia
Business Acquisition [Line Items]
Number of properties owned | property		1		1		1
Payne Place
Business Acquisition [Line Items]
Acquisition costs reimbursable to related parties	$ 14,200
Payne Place | Alexandria, Virginia
Business Acquisition [Line Items]
Number of properties owned | property	11
Area of land (in square footage) | ft²	6,730
Percentage of area leased				100.00%
Contractual Purchase Price	$ 2,500,000
Land	1,419,898
Building and Improvements	1,016,451
Furniture, Fixtures and Equipment	13,710
Intangible Assets	49,941
Other Liabilities	(6,327)
Fair Value Assigned	2,493,673
Advisor | Payne Place
Business Acquisition [Line Items]
Acquisition costs	$ 52,864

XML

Rental Properties, Net (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2017 USD ($) property	Jun. 30, 2016 USD ($)	Jun. 30, 2017 USD ($) property	Jun. 30, 2016 USD ($)	Dec. 31, 2016 USD ($)
Real Estate [Abstract]
Number of properties owned | property	1		1
Land	$ 1,419,898		$ 1,419,898		$ 1,419,898
Building and improvements	1,021,675		1,021,675		1,018,051
Furniture, fixtures and equipment	24,812		24,812		21,317
Construction in progress	4,365		4,365		0
Rental property, at cost	2,470,750		2,470,750		2,459,266
Less: accumulated depreciation	(34,259)		(34,259)		(13,431)
Total rental property, net	2,436,491		2,436,491		$ 2,445,835
Depreciation expense	$ 10,504	$ 0	$ 20,828	$ 0

XML

Identified Intangible Assets, Net (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Finite-Lived Intangible Assets [Line Items]
Amortization of intangible assets	$ 12,888	$ 0	$ 27,870	$ 0
In-place leases
Finite-Lived Intangible Assets [Line Items]
Value of in-place leases, net of accumulated amortization	0		0		$ 27,870
Accumulated amortization	$ 49,941		$ 49,941		$ 22,071
Weighted average remaining life of rental leases					5 months

XML

Mortgage Notes Payable (Details)	3 Months Ended	6 Months Ended
	Jun. 30, 2017 USD ($)	Jun. 30, 2017 USD ($) apartment_complex	Dec. 31, 2016 USD ($)	Dec. 15, 2016 USD ($)
Debt Instrument [Line Items]
Outstanding borrowings	$ 1,611,247	$ 1,611,247
Restricted cash related to escrow deposits	5,765	$ 5,765	$ 7,733
LIBOR
Debt Instrument [Line Items]
Interest rate		2.25%
Mortgages | Payne Place
Debt Instrument [Line Items]
Outstanding borrowings	$ 1,611,247	$ 1,611,247	$ 1,625,000	$ 1,600,000
Annual interest rate	3.11%	3.11%
Average monthly debt service	$ 6,948
Prepayment premium, year one (as a percentage)		3.00%
Prepayment premium, year two (as a percentage)		2.00%
Prepayment premium, year three (as a percentage)		1.00%
Minimum | LIBOR
Debt Instrument [Line Items]
Interest rate		2.50%
Maximum | LIBOR
Debt Instrument [Line Items]
Interest rate		9.50%
Resource America, Inc. | Mortgages | Payne Place
Debt Instrument [Line Items]
Number of apartment complexes owned | apartment_complex		5
Minimum net worth	50,000,000	$ 50,000,000
Liquidity (no less than)	$ 5,000,000	$ 5,000,000
Aggregate portfolio leverage, percentage (no more than)		65.00%

XML

Mortgage Notes Payable Summary of Mortgage Notes Payable (Details) - USD ($)	3 Months Ended
	Jun. 30, 2017	Dec. 31, 2016	Dec. 15, 2016
Debt Instrument [Line Items]
Outstanding Borrowings	$ 1,611,247
Deferred Financing Costs, net	(33,348)	$ (34,166)
Mortgages | Payne Place
Debt Instrument [Line Items]
Outstanding Borrowings	1,611,247	1,625,000	$ 1,600,000
Deferred Financing Costs, net	(33,348)	(34,166)
Carrying Value	1,577,899	$ 1,590,834
Average Monthly Debt Service	6,948
Average Monthly Escrow	$ 1,933

XML

Mortgage Notes Payable Annual Principal Payments on Mortgage Notes Payable (Details)	Jun. 30, 2017 USD ($)
Debt Disclosure [Abstract]
2018	$ 33,743
2019	34,807
2020	35,905
2021	37,038
2022	38,206
Thereafter	1,431,548
Total principal payments	$ 1,611,247

XML

Mortgage Notes Payable Amortization of Deferred Financing Costs (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]
Amortization of deferred financing costs			$ 818	$ 0
Accumulated amortization of deferred financing costs	$ 818		818		$ 2,775
2018	1,935		1,935
2019	1,894		1,894
2020	1,851		1,851
2021	1,807		1,807
2022	1,761		1,761
Thereafter	24,100		24,100
Deferred financing costs	33,348		33,348		$ 34,166
Interest Expense
Related Party Transaction [Line Items]
Amortization of deferred financing costs	$ 490	$ 0	$ 818	$ 0

XML

Certain Relationships and Related Party Transactions - Narrative (Details)		3 Months Ended	6 Months Ended	12 Months Ended
	Aug. 18, 2016 USD ($)	Jun. 30, 2017 USD ($) $ / shares	Jun. 30, 2017 USD ($) apartment_complex $ / shares	Dec. 31, 2016 USD ($)	Jun. 30, 2016 USD ($)
Related Party Transaction [Line Items]
Due from related parties		$ 3,640	$ 3,640	$ 2,352	$ 2,352
Insurance pool (up to)			2,500,000
General liability coverage (up to)		$ 50,000	50,000
Catastrophic insurance (up to)			250,000,000
Payment into the insurance pools			$ 51,000,000
LIBOR
Related Party Transaction [Line Items]
Interest rate			2.25%
Class R Common Stock
Related Party Transaction [Line Items]
Annual fee, percentage of purchase price of common stock sold			1.00%
Underwriting compensation as percentage of Class R gross offering price (as a percentage)			8.50%
Class T common stock
Related Party Transaction [Line Items]
Annual fee, percentage of purchase price of common stock sold			1.00%
Annual distribution and shareholder servicing fee, term			5 years
Initial public offering | Class R Common Stock
Related Party Transaction [Line Items]
Common stock, initial offering price (in dollars per share) | $ / shares		$ 9.52	$ 9.52
Initial public offering | Class I Common Stock
Related Party Transaction [Line Items]
Common stock, initial offering price (in dollars per share) | $ / shares		9.13	9.13
Initial public offering | Class A common stock
Related Party Transaction [Line Items]
Common stock, initial offering price (in dollars per share) | $ / shares		10	10
Initial public offering | Class T common stock
Related Party Transaction [Line Items]
Common stock, initial offering price (in dollars per share) | $ / shares		9.47	9.47
Distribution reinvestment plan | Class R Common Stock
Related Party Transaction [Line Items]
Common stock, initial offering price (in dollars per share) | $ / shares		9.14	9.14
Distribution reinvestment plan | Class I Common Stock
Related Party Transaction [Line Items]
Common stock, initial offering price (in dollars per share) | $ / shares		8.90	8.90
Distribution reinvestment plan | Class A common stock
Related Party Transaction [Line Items]
Common stock, initial offering price (in dollars per share) | $ / shares		9.60	9.60
Distribution reinvestment plan | Class T common stock
Related Party Transaction [Line Items]
Common stock, initial offering price (in dollars per share) | $ / shares		$ 9.09	$ 9.09
Advisor
Related Party Transaction [Line Items]
Cumulative advances from related party		$ 4,700,000	$ 4,700,000
Term of advisory agreement			1 year
Acquisition fee			2.00%
Monthly asset management fee			0.083%
Disposition fee			2.00%
Disposition fee, as a percentage of the aggregate brokerage commission paid			50.00%
Debt financing fee			0.50%
Formation and other operating expenses			$ 104,266	104,266
Advisor | Bridge Loan
Related Party Transaction [Line Items]
Mortgage note payable, net of deferred financing costs of $33,838 and $34,166	$ 555,000
Interest expense				2,921
Advisor | Bridge Loan | LIBOR
Related Party Transaction [Line Items]
Interest rate	3.00%
Advisor | Initial public offering
Related Party Transaction [Line Items]
Approximate reimbursement of organization and offering expenses to be reimbursed, option one			4.00%
Offering proceeds, threshold, option one (less than)			$ 500,000,000
Approximate reimbursement of organization and offering expenses to be reimbursed, option two			2.50%
Offering proceeds, threshold, option two (more than)			$ 500,000,000
Manager
Related Party Transaction [Line Items]
Property management fee			4.50%
Due from related parties		2,342	$ 2,342	$ 1,041	$ 1,041
Construction management fee			5.00%
Debt servicing fee			2.75%
Resource Securities | Class R Common Stock
Related Party Transaction [Line Items]
Selling commission			3.50%
Dealer manager fee			3.00%
Annual fee, percentage of purchase price of common stock sold			1.00%
Underwriting compensation as percentage of Class R gross offering price (as a percentage)			8.50%
Resource Securities | Class I Common Stock
Related Party Transaction [Line Items]
Dealer manager fee			1.50%
Resource Securities | Class A common stock
Related Party Transaction [Line Items]
Selling commission			7.00%
Dealer manager fee			3.00%
Resource Securities | Class T common stock
Related Party Transaction [Line Items]
Selling commission			2.00%
Dealer manager fee			3.00%
Annual fee, percentage of purchase price of common stock sold			1.00%
Period of time to receive annual fee from the date each share is issued			5 years
Percentage of purchase price of common stock sold, total			5.00%
Resource America, Inc.
Related Party Transaction [Line Items]
Payment into the insurance pools		0	$ 419
Resource America, Inc. | Internal Audit Fee
Related Party Transaction [Line Items]
Professional Fees			$ 12,500
Mortgages | Payne Place | Resource America, Inc.
Related Party Transaction [Line Items]
Number of apartment complexes owned | apartment_complex			5
Minimum net worth		50,000,000	$ 50,000,000
Liquidity (no less than)		$ 5,000,000	$ 5,000,000
Aggregate portfolio leverage, percentage (no more than)			65.00%
Maximum | LIBOR
Related Party Transaction [Line Items]
Interest rate			9.50%
Maximum | Resource Securities | Class R Common Stock
Related Party Transaction [Line Items]
Selling commission			5.50%

XML

Certain Relationships and Related Party Transactions - Differences in Fees and Selling Commissions (Details)	6 Months Ended
	Jun. 30, 2017 $ / shares
Class T common stock
Related Party Transaction [Line Items]
Annual fee, percentage of purchase price of common stock sold	1.00%
Triggering event to cease payment, percentage of gross proceeds	10.00%
Class R Common Stock
Related Party Transaction [Line Items]
Annual fee, percentage of purchase price of common stock sold	1.00%
Triggering event to cease payment, percentage of gross proceeds	10.00%
Initial public offering | Class A common stock
Related Party Transaction [Line Items]
Common stock, initial offering price (in dollars per share)	$ 10
Initial public offering | Class T common stock
Related Party Transaction [Line Items]
Common stock, initial offering price (in dollars per share)	9.47
Initial public offering | Class R Common Stock
Related Party Transaction [Line Items]
Common stock, initial offering price (in dollars per share)	9.52
Initial public offering | Class I Common Stock
Related Party Transaction [Line Items]
Common stock, initial offering price (in dollars per share)	9.13
Distribution reinvestment plan | Class A common stock
Related Party Transaction [Line Items]
Common stock, initial offering price (in dollars per share)	9.60
Distribution reinvestment plan | Class T common stock
Related Party Transaction [Line Items]
Common stock, initial offering price (in dollars per share)	9.09
Distribution reinvestment plan | Class R Common Stock
Related Party Transaction [Line Items]
Common stock, initial offering price (in dollars per share)	9.14
Distribution reinvestment plan | Class I Common Stock
Related Party Transaction [Line Items]
Common stock, initial offering price (in dollars per share)	$ 8.90
Resource Securities | Class A common stock
Related Party Transaction [Line Items]
Selling Commissions Paid by Company (per shares)	7.00%
Dealer Manager Fee (per share)	3.00%
Resource Securities | Class T common stock
Related Party Transaction [Line Items]
Selling Commissions Paid by Company (per shares)	2.00%
Dealer Manager Fee (per share)	3.00%
Annual fee, percentage of purchase price of common stock sold	1.00%
Resource Securities | Class R Common Stock
Related Party Transaction [Line Items]
Selling Commissions Paid by Company (per shares)	3.50%
Dealer Manager Fee (per share)	3.00%
Annual fee, percentage of purchase price of common stock sold	1.00%
Triggering event to cease payment, percentage of gross proceeds	10.00%
Resource Securities | Class I Common Stock
Related Party Transaction [Line Items]
Dealer Manager Fee (per share)	1.50%
Maximum | Resource Securities | Class R Common Stock
Related Party Transaction [Line Items]
Selling Commissions Paid by Company (per shares)	5.50%

XML

Certain Relationships and Related Party Transactions - Schedule of Fees Earned and Expenses Incurred (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]
Due from related parties	$ 3,640	$ 2,352	$ 3,640	$ 2,352	$ 2,352
Due to related parties	6,501,390	3,616,713	6,501,390	3,616,713	3,616,713
Other
Related Party Transaction [Line Items]
Due to related parties	0	55	0	55
Manager
Related Party Transaction [Line Items]
Due from related parties	2,342	1,041	2,342	1,041	$ 1,041
RAI
Related Party Transaction [Line Items]
Due to related parties	3,988	8,250	3,988	8,250
RAI | RAI - insurance funds held in escrow
Related Party Transaction [Line Items]
Due from related parties	1,298	1,311	1,298	1,311
RAI | Internal Audit Fee
Related Party Transaction [Line Items]
Due to related parties	750	8,250	750	8,250
RAI | RCP Expense Reimbursements
Related Party Transaction [Line Items]
Due to related parties	3,238	0	3,238	0
Resource Securities
Related Party Transaction [Line Items]
Due to related parties	480,391	63,378	480,391	63,378
Resource Securities | Selling commissions and dealer-manager fees
Related Party Transaction [Line Items]
Due to related parties	0	10,363	0	10,363
Fees earned / expenses incurred:	403,514	0	636,033	0
Resource Securities | Distribution and shareholder servicing fee
Related Party Transaction [Line Items]
Due to related parties	480,391	53,015	480,391	53,015
Fees earned / expenses incurred:	291,316	0	443,471	0
Advisor
Related Party Transaction [Line Items]
Due to related parties	6,017,011	3,545,030	6,017,011	3,545,030
Advisor | Acquisition related reimbursements
Related Party Transaction [Line Items]
Due to related parties	1,079	14,050	1,079	14,050
Advisor | Asset management fees
Related Party Transaction [Line Items]
Due to related parties	0	2	0	2
Fees earned / expenses incurred:	6,730	0	13,457	0
Advisor | Organization and offering costs
Related Party Transaction [Line Items]
Due to related parties	4,706,053	2,848,317	4,706,053	2,848,317
Fees earned / expenses incurred:	1,010,962	0	1,857,736	0
Advisor | Operating expense reimbursement
Related Party Transaction [Line Items]
Due to related parties	1,309,879	682,661	1,309,879	682,661
Fees earned / expenses incurred:	$ 162,526	$ 26,458	$ 314,205	$ 26,458

XML

Earnings Per Share (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Net loss	$ (331,254)	$ (26,458)	$ (648,997)	$ (26,458)
Undistributed net loss attributable to common stockholders	$ (384,821)	(26,458)	(713,647)	(26,458)
Common stock cash distributions declared (in shares)			$ 64,650
Incremental common shares attributable to dilutive effect of conversion of preferred stock (in shares)			0
Preferred stock, shares issued (in shares)	0		0		0
Convertible Stock
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Preferred stock, shares issued (in shares)	50,000		50,000		50,000
Class A common stock
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Undistributed net loss attributable to common stockholders	$ (171,529)	(26,458)	$ (361,947)	(26,458)
Common stock cash distributions declared (in shares)	30,709	0	38,400	0
Net loss attributable to common stockholders	$ (140,820)	$ (26,458)	$ (323,547)	$ (26,458)
Net los per common share, basic and diluted (USD per share)	$ (0.25)	$ (1.04)	$ (0.65)	$ (1.15)
Weighted-average number of shares outstanding, basic and diluted (in shares)	559,739	25,511	501,031	23,008
Class T common stock
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Undistributed net loss attributable to common stockholders	$ (213,292)	$ 0	$ (351,700)	$ 0
Common stock cash distributions declared (in shares)	22,858	0	26,250	0
Net loss attributable to common stockholders	$ (190,434)	$ 0	$ (325,450)	$ 0
Net los per common share, basic and diluted (USD per share)	$ (0.27)	$ 0.00	$ (0.67)	$ 0.00
Weighted-average number of shares outstanding, basic and diluted (in shares)	696,020	0	486,845	0

XML

Equity (Details)			6 Months Ended
	Apr. 25, 2017 shares	Aug. 05, 2016 shares	Jun. 30, 2017 USD ($) event $ / shares shares	Jun. 28, 2017 $ / shares shares	Dec. 31, 2016 USD ($) $ / shares shares	Jun. 30, 2016 USD ($)
Class of Stock [Line Items]
Preferred stock, shares authorized (in shares)			10,000,000		10,000,000
Preferred stock, par value (in dollars per share) | $ / shares			$ 0.01		$ 0.01
Preferred stock, shares issued (in shares)			0		0
Preferred stock, shares outstanding (in shares)			0		0
Common stock, conversion terms, percent of paid distributions equal to price at which shares were originally sold			100.00%
Percent of annual return on shares at price equal to distributions paid			6.00%
Number of triggering events | event			2
Conversion basis			0.00002
Triggering event, option one			15.00%
Percentage of non-compounded annual return, option one			6.00%
Common stock, shares authorized (in shares)			1,000,000,000
Common stock, par value (in dollars per share) | $ / shares			$ 0.01
Dividends declared, daily accrual amount (in dollars per share) | $ / shares			$ 0.000547945
Distributions payable | $			$ 18,862		$ 25,174	$ 0
Convertible Stock
Class of Stock [Line Items]
Preferred stock, shares authorized (in shares)			50,000		50,000
Preferred stock, par value (in dollars per share) | $ / shares			$ 0.01		$ 0.01
Preferred stock, shares issued (in shares)			50,000		50,000
Issuance of convertible shares (in shares)		50,000
Preferred stock, shares outstanding (in shares)			50,000		50,000
Class A common stock
Class of Stock [Line Items]
Number of shares exchanged		5,000
Common stock, shares authorized (in shares)			25,000,000	25,000,000	250,000,000
Common stock, par value (in dollars per share) | $ / shares			$ 0.01	$ 0.01	$ 0.01
Issuance of stock (in shares)			616,086.02
Common stock, shares outstanding (in shares)			616,086		384,195
Authorized stock dividend of common stock (in shares)	6,100
Class T common stock
Class of Stock [Line Items]
Common stock, shares authorized (in shares)			25,000,000	25,000,000	750,000,000
Common stock, par value (in dollars per share) | $ / shares			$ 0.01	$ 0.01	$ 0.01
Issuance of stock (in shares)			1,067,395.79
Common stock, shares outstanding (in shares)			1,067,396		114,037
Authorized stock dividend of common stock (in shares)	10,568
Common Stock
Class of Stock [Line Items]
Authorized stock dividend of common stock (in shares)	0.01
Class R Common Stock
Class of Stock [Line Items]
Common stock, shares authorized (in shares)			750,000,000	750,000,000	0
Common stock, par value (in dollars per share) | $ / shares			$ 0.01	$ 0.01	$ 0
Common stock, shares outstanding (in shares)			0		0
Class I Common Stock
Class of Stock [Line Items]
Common stock, shares authorized (in shares)			75,000,000	75,000,000	0
Common stock, par value (in dollars per share) | $ / shares			$ 0.01	$ 0.01	$ 0
Common stock, shares outstanding (in shares)			0		0

XML

Equity Schedule of Distributions (Details) - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2017
Class of Stock [Line Items]
Distributions declared	$ 53,567	$ 64,650
Distributions Reinvested in Shares of Common Stock	21,214	32,306
Net Cash Distributions	22,227	38,656
Total Aggregate Distributions	43,441	70,962
Class A common stock
Class of Stock [Line Items]
Distributions declared	30,709	38,400
Distributions Reinvested in Shares of Common Stock	9,637	16,087
Net Cash Distributions	17,686	32,562
Total Aggregate Distributions	27,323	48,649
Class T common stock
Class of Stock [Line Items]
Distributions declared	22,858	26,250
Distributions Reinvested in Shares of Common Stock	11,577	16,219
Net Cash Distributions	4,541	6,094
Total Aggregate Distributions	$ 16,118	$ 22,313

XML

Fair Value Measures and Disclosures (Details) - Mortgages - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Reported Value Measurement
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mortgage note payable	$ 1,611,247	$ 1,625,000
Estimate of Fair Value Measurement
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mortgage note payable	$ 1,415,677	$ 1,625,000

XML

Operating Expense Limitation (Details)	6 Months Ended
	Jun. 30, 2017
Other Income and Expenses [Abstract]
Limitation on total operating expenses, percentage of average invested assets for the four most recently completed fiscal quarters	2.00%
Limitation on total operating expenses, percentage of net income for the four most recently completed fiscal quarters	25.00%

XML

Subsequent Events (Details)			6 Months Ended
	Jul. 31, 2017 USD ($) unit	Jul. 27, 2017 $ / shares	Jun. 30, 2017 USD ($) $ / shares
Subsequent Event [Line Items]
Distribution per share per day | $ / shares			$ 0.000547945
Subsequent event
Subsequent Event [Line Items]
Distribution per share per day | $ / shares		$ 0.001434521
Bay Club | Subsequent event
Subsequent Event [Line Items]
Number of units in real estate property | unit	220
Percentage of building leased (as a percentage)	96.00%
Consideration transferred	$ 28,300,000
Bay Club Mortgage Loan | Mortgages | Subsequent event
Subsequent Event [Line Items]
Debt instrument term	7 years
Debt face amount	$ 21,500,000.0
Periodic interest payments, period	24 months
Periodic principal and interest payments, period	30 years
LIBOR
Subsequent Event [Line Items]
Spread over interest rate			2.25%
LIBOR | Bay Club Mortgage Loan | Mortgages | Subsequent event
Subsequent Event [Line Items]
Spread over interest rate	1.87%
Prepayment premium if loan prepayed within first five years (as a percentage)	1.00%
Maximum | Bay Club Mortgage Loan | Mortgages | Subsequent event
Subsequent Event [Line Items]
Effective rate	5.75%
Maximum | LIBOR
Subsequent Event [Line Items]
Spread over interest rate			9.50%
Prepaid Expenses and Other Current Assets | Bay Club
Subsequent Event [Line Items]
Earnest money deposit			$ 1,000,000