Quarterly report pursuant to Section 13 or 15(d)

INVESTMENT IN UNDIVIDED INTEREST IN REAL ESTATE

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INVESTMENT IN UNDIVIDED INTEREST IN REAL ESTATE
3 Months Ended
Mar. 31, 2018
Real Estate [Abstract]  
INVESTMENT IN UNDIVIDED INTEREST IN REAL ESTATE

NOTE 8– INVESTMENT IN UNDIVIDED INTEREST IN REAL ESTATE

 

On May 9, 2017, the Company and LLC1 purchased certain real property from an unaffiliated party. The Company and LLC1 have agreed that the Company purchased and owns 49% of the building and LLC1 purchased and owns 51% of the building. The contracted purchase price for the building was $2,420,000 and the total amount paid at closing was $2,501,783 including, fees, insurance, interest and real estate taxes. The Company paid for their building interest by delivering cash at closing of $209,971 and being a co-borrower on a note in the amount of $2,057,000, of which the Company has agreed with LLC1 to pay $1,007,930.

 

The allocated portion of the results in an equity method investment in a privately-held, related party, company are included in the Company’s consolidated statements of operations. For the three months ended March 31, 2018, a net loss of $2,305 is included in “Other income (expense), net”. As of March 31, 2018, the carrying value of our investment in undivided interest in real estate was $1,222,598.

 

The unaudited condensed balance sheet as of March 31, 2018 and the unaudited condensed statement of operation for the three months ended March 31, 2018, for the real property is as follows:

 

Current assets:    
Cash and cash equivalents   $ 5,626  
Accounts receivable, net     3,000  
Prepaid expenses and other current assets     56,255  
Total current assets     64,480  
 Land and Building, net     2,386,956  
Other assets, net     55,693  
Total assets   $ 2,505,529  
         
Current portion of mortgage payable   $ 38,353  
Other current liabilities     38,448  
Total current liabilities     76,801  
Mortgage payable, long-term     1,994,886  
Total liabilities     2,071,687  
Total equity     433,842  
Total liabilities and equity   $ 2,505,529  

 

Rental income   $ 63,211  
Expenses:        
Property taxes     6,646  
Depreciation and amortization     11,446  
Insurance     2,033  
Repairs and maintenance     5,349  
Other     10,087  
Interest expense     32,355  
Total expenses     67,916  
Net loss   $ (4,705 )