As filed with the Securities and Exchange Commission on May 27, 2014

Registration No. 333-     

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

Form S-11

FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF CERTAIN REAL ESTATE COMPANIES

 

REVEN HOUSING REIT, INC.

(Exact name of registrant as specified in its governing instruments)

7911 Herschel Avenue, Suite 201
La Jolla, California 92037
(858) 459-4000

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

 

Chad M. Carpenter
Chief Executive Officer
7911 Herschel Avenue, Suite 201
La Jolla, California 92037
(858) 459-4000

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

Copies to:

Joseph A. Herz, Esq. Chris Y. Chen, Esq. Greenberg Traurig, LLP 200 Park Avenue, 15 th Floor New York, New York 10166 Telephone: (212) 801-9200 Facsimile: (212) 801-6400		Barry I. Grossman, Esq. Lawrence A. Rosenbloom, Esq. Joshua Englard, Esq. Ellenoff Grossman & Schole LLP 1345 Avenue of the Americas, 11 th Floor New York, New York 10105 Telephone: (212) 370-1300 Facsimile: (646) 895-7204

 

Approximate date of commencement of proposed sale to public: As soon as practicable after the registration statement becomes effective.

If any of the Securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box: o

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering. o

If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. o

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

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

CALCULATION OF REGISTRATION FEE

Title of Securities to be Registered		Proposed Maximum Aggregate Offering Price (1)(2)				Amount of Registration Fee (1)
Common Stock, $0.001 par value per share		$	28,750,000			$	3,703

(1)

Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) of the Securities Act of 1933, as amended.

(2)

Includes shares that the underwriters have the option to purchase to cover over-allotments, if any.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

 

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The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale thereof is not permitted.

Preliminary Prospectus		Subject to Completion, dated May 27, 2014

     Shares
Common Stock

This is a public offering of Reven Housing REIT, Inc., an internally managed real estate company that acquires, owns and operates single-family homes as rental properties. We are offering      shares of our common stock, $0.001 par value per share, at $      per share. We expect to effect a     -for-     reverse stock split of our outstanding common stock prior to the effectiveness of the registration statement of which this prospectus forms a part.

We intend to elect and qualify to be taxed as a real estate investment trust, or REIT, for federal income tax purposes commencing with our taxable year ended December 31, 2014. To assist us in complying with certain federal income tax requirements applicable to REITs, among other purposes, our charter generally limits beneficial and constructive ownership by any person to no more than 9.8% in value or in number of shares, whichever is more restrictive, of our outstanding shares of common stock and no more than 9.8% in value or number of shares, whichever is more restrictive, of the aggregate outstanding shares of all classes and series of our capital stock. In addition, our charter contains various other restrictions on the ownership and transfer of our common stock. See “Description of Capital Stock — Restrictions on Ownership and Transfer” for a description of the ownership and transfer restrictions applicable to our common stock.

We intend to apply to list our common stock on the NASDAQ Capital Market under the symbol “RVEN.” Our common stock is currently quoted for trading on the OTCQB Marketplace, operated by the OTC Markets Group. The closing sales price as of May 21, 2014 was $0.50.

Investing in our common stock involves a high degree of risk. See “Risk Factors” beginning on page 16 of this prospectus for certain risk factors that you should consider before investing in our common stock.

Price to Public

Underwriting Discounts and Commissions

Proceeds, before Expenses, to Us (1)

Per Share

$

$

$

Total

$

$

$

We have granted the underwriters an option to purchase up to      additional shares of our common stock from us, at the public offering price, less underwriting discounts and commissions, within 45 days after the date of this prospectus to cover over-allotments, if any.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the shares of our common stock on             , 2014.

Maxim Group LLC

The date of this prospectus is            , 2014

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		Page
Prospectus Summary			1
Risk Factors			16
Cautionary Note Regarding Forward-Looking Statements			43
Use of Proceeds			45
Distribution Policy			46
Capitalization			51
Dilution			52
Management’s Discussion and Analysis of Financial Condition and Results of Operations			53
Industry Overview and Market Opportunity			59
Our Business and Investments			75
Investment Policies and Policies with Respect to Certain Activities			89
Management			91
Principal Stockholders			101
Certain Relationships and Related Party Transactions			103
Market Information and Related Stockholder Matters			105
Description of Capital Stock			106
Shares Eligible for Future Sale			110
Certain Provisions of Maryland Law and of our Charter and Bylaws			112
Operating Partnership and the Partnership Agreement			118
Material Federal Income Tax Considerations			122
ERISA Considerations			143
Underwriting			146
Legal Matters			150
Experts			150
Where You Can Find Additional Information			150
Index to Financial Statements			F-1

You should rely only on the information contained in this prospectus prepared by us. We and the underwriters have not authorized anyone to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We and the underwriters are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus and any free writing prospectus prepared by us is accurate only as of the respective dates of such documents or as of the date or dates which are specified therein. Our business, financial condition, liquidity, results of operations and prospects may have changed since those dates.

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Certain Terms Used in This Prospectus

Except where the context suggests otherwise, we define certain terms in this prospectus as follows:

“We,” “our,” “us” and “our company” refer to Reven Housing REIT, Inc., a Maryland corporation, together with its consolidated subsidiaries, including: (1) Reven Housing REIT OP, L.P., a Delaware limited partnership, or our operating partnership; (2) Reven Housing GP, LLC, a Delaware limited liability company that is our wholly owned subsidiary and the sole general partner of our operating partnership; (3) Reven Housing Georgia, LLC, a Delaware limited liability company that is a wholly owned subsidiary of our operating partnership; (4) Reven Housing Texas, LLC, a Delaware limited liability company that is a wholly owned subsidiary of our operating partnership; and Reven Housing REIT TRS, LLC, a Delaware limited liability company, or our TRS, that is a wholly owned subsidiary of our operating partnership and that we have elected to treat as a taxable REIT subsidiary.

Market, Industry and Other Data

We disclose estimates, forecasts and projections throughout this prospectus, in particular in the sections entitled “Prospectus Summary,” “Industry Overview and Market Opportunity” and “Our Business and Investments.” We have obtained substantially all of this information from a market study prepared for us in connection with this offering by The London Group Realty Advisors, or The London Group, a real estate analysis and strategic consulting firm. We have agreed to pay The London Group a total fee of $7,500 for that market study, all of which has been paid. Such information is included in this prospectus in reliance on The London Group’s authority as an expert on such matters. The estimates, forecasts and projections prepared by The London Group are based on data (including third-party data), significant assumptions, proprietary methodologies, and the experience and judgment of The London Group. No assurance can be given regarding the accuracy or appropriateness of the assumptions and judgments made, or the methodologies used, by The London Group. There is no assurance that any of the forecasted or projected outcomes will be achieved, and investors should not place undue reliance on them. Except as required by law, we are not obligated to, and do not intend to, update the statements in this prospectus to conform to actual outcomes or changes in our or The London Group’s expectations. See “Experts.”

In addition, we have obtained certain market and industry data from publicly available industry publications. These sources generally state that the information they provide has been derived from sources believed to be reliable, but that the accuracy and completeness of the information are not guaranteed. We believe that these data are generally reliable, but we have not independently verified this information.

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Industry Overview and Market Opportunity

Residential housing is the largest real estate asset class in the United States with approximately $19 trillion in assets, according to the 2013 third quarter release by the Federal Reserve. According to the U.S. Census Bureau, approximately one-third of this asset class has been rented and single-family homes currently comprise roughly one-third of all residential rental housing.

According to The London Group, the single-family rental market consisted of approximately 13 million homes prior to 2008 and has since increased to 14.6 million homes as more people are renting homes. Since 1995, the SFR market has consistently been approximately 10.5% of the total housing market. Out of the 14.6 million SFRs, an estimated 98.6% of these homes are currently owned by smaller investors and only 1.4% are owned by institutional investors. We believe the opportunity exists for us to aggregate part of the 98.6% from the smaller investors, which represents more than a $2 trillion market.

SFR properties have historically been acquired by entrepreneurial investors who operate on a relatively small scale, with a focus in their local markets. More recently, a new business model has emerged where the focus for companies such as ours is to operate in select markets, funded with institutional and/or public capital to create and expand portfolios of SFRs. We believe this business model (particularly when operated as a public vehicle) allows us to operate more efficiently and acquire more homes than with traditional funding sources, which required much higher rates of return on capital. We believe this approach enables owners and operators of SFRs to stabilize cash flow for investors while participating in the upside appreciation of homes as residential market conditions improve.

Our Competitive Advantages

We believe that our competitive advantages include the following:

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Our Business and Growth Strategies

Our objective is to be a leader in the single-family rental business as an institutional-quality operator on a national scale. Our focus is on cash flow and profitability while generating meaningful dividends from rental income and the potential for capital appreciation. We believe we can achieve this objective through the following strategies:

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Our Business Activities and Operations

Since we commenced our real estate investment activities in October 2012, we have acquired portfolios in Georgia and Texas. We currently own 168 homes in the Houston, Texas metropolitan area and 9 homes in the Atlanta, Georgia, metropolitan area. In addition, we evaluate new markets on an ongoing basis to identify investment opportunities that we believe can generate attractive risk-adjusted returns for our stockholders. Currently, we are evaluating markets in the following states for investment, each of which we believe meets our investment criteria: Arizona, California, Colorado, Florida, Illinois, Indiana, Kentucky, Nevada, North Carolina, Oklahoma, Tennessee, Utah and Virginia.

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States in Which We Own Single-Family Homes
(as of March 31, 2014)

The following table presents summary statistics of our single-family homes by Metropolitan Statistical Area, or MSA, and metro division, as of March 31, 2014. The table includes our entire portfolio of single-family homes.

Total Portfolio of Single-Family Homes — Summary Statistics
(as of March 31, 2014)

MSA/Metro Division		Number of Homes				Aggregate Investment				Average Investment Per Home				Percent Leased				Average Age (years)				Average Size (square feet)
Atlanta, GA			9			$	606,838			$	67,426				66	%			21				1,516
Houston, TX			168			$	13,556,140			$	80,691				95	%			45				1,435
Total/Weighted Average			177			$	14,162,978			$	80,017				95%				44				1,439

Recent Developments

Jacksonville, Florida — Portfolio Purchase Agreement .  On May 5, 2014, we entered into a purchase and sale agreement for the purchase of a portfolio of up to 49 single-family homes located in the Jacksonville, Florida, metropolitan area. The total contract purchase price for the 49 properties is $3,500,000, excluding closing costs and subject to certain adjustments. The properties collectively encompass an aggregate of 64,117 rental square feet, of which 46 properties are subject to one-year leases with tenants and the remaining three properties are vacant as of May 6, 2014. We intend to purchase the properties with cash on hand. The purchase and sale of the properties are subject to the satisfaction of certain closing conditions, and there can be no assurance that we will consummate the acquisition.

Memphis, Tennessee — Portfolio Purchase Agreement .  On April 24, 2014, we entered into a purchase and sale agreement for the purchase of a portfolio of up to 48 single-family homes located in Memphis, Tennessee. The total contract purchase price for the 48 properties is $3,800,000, excluding closing costs and subject to certain adjustments. The properties collectively encompass an aggregate of 86,103 rental square feet, of which 28 properties are subject to one-year leases with tenants, 15 properties are subject to month-to-month leases, and the remaining five properties are vacant as of May 6, 2014. We intend to purchase the properties with cash on hand. The purchase and sale of the properties are subject to the satisfaction of certain closing conditions, and there can be no assurance that we will consummate the acquisition.

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Houston, Texas — Portfolio Acquisition .  On October 4, 2013, Reven Housing Texas, LLC (our wholly owned subsidiary) entered into a purchase and sale agreement for the purchase of a portfolio of up to 170 single-family homes located in the Houston, Texas metropolitan area. On October 31, 2013, we closed and completed the purchase of 150 of the homes at a total cost of $11,971,797, including closing expenses. On January 31, 2014, we completed the purchase of an additional 18 homes under this same agreement for a total cost of $1,584,343, including closing expenses.

Proposed Reverse Stock Split .  On February 27, 2014, our Board of Directors and our stockholders approved a proposal to authorize our Board of Directors to effect a reverse stock split of our outstanding common stock if our Board of Directors in its discretion determines to effect a reverse stock split, by a ratio of not less than 1-for-12 and not more than 1-for-50, with a possible reduction in the number of shares of common stock that are authorized in our charter, depending on the exact ratio of the reverse stock split. We expect to effect a     -for-     reverse stock split of our outstanding common stock prior to the completion of this offering.

2014 Private Placement .  In April and May 2014, we conducted and completed a follow-on private placement of 43,000,000 shares of our common stock to King APEX Group Holdings IV Limited, a fund managed by Allied Fortune (HK) Management Ltd. (“Allied Fortune”), for aggregate gross proceeds of $8,600,000. Xiaofan Bai, a member of our Board of Directors, is the Director of Allied Fortune.

Our Investment Process

Our investment strategy is to acquire portfolios of tenant-occupied houses with cash and/or units of limited partnership interest in our operating partnership, or OP units, from investors who have accumulated homes and who are now looking for an exit strategy. We have developed and integrated the following proprietary processes in the implementation of our investment strategy.

Balanced Value Approach for Investing

Our acquisition strategy is based upon extensive research and utilizes a proprietary acquisitions algorithm that focuses on acquiring a balance of Class “A” and “B” portfolios of rented homes that have the potential for both increased yield and appreciation. Typically, Class “A” homes are homes that are generally larger and built after the year 2000, have a current rental yield of 12%+ with higher mid-term appreciation potential, and are generally in markets with the strongest economies and/or those that did not suffer recessionary effects to the extent experienced by other parts of the country. Class “B” homes are homes that are typically smaller and built before the year 2000, have a current rental yield of approximately 14% with lower mid-term appreciation potential, and are generally in markets with recovering economies. We invest in markets that demonstrate strong and/or improving economic performance which will support the potential for rent increases and home appreciation. When approaching a market, we focus on factors such as the strength of rental demand, rates of job growth, population growth and unemployment. Within markets that meet our investment criteria, we seek to identify the neighborhoods that offer the most attractive mix of rental demand and rental rates, which are often characterized by good access to transportation networks and employment centers, good schools and low levels of crime. We believe this “balanced value” approach towards investing will help our investments achieve sustainable profitability at all times and through all cycles. This balanced value approach is intended to offer stockholders diversification, distributions, appreciation, liquidity and a lower risk investment.

Sourcing and Evaluation of Assets for Acquisition

Our management team maintains a robust and growing network of relationships within the SFR industry that provides us with access to potential portfolios of properties that meet our investment criteria. We provide our sourcing network with specific investment criteria regarding the type of dwelling and specific home characteristics, location, condition of property, and price points so that efforts are concentrated solely on the properties that are potentially viable for investment by us. We are in regular communication with portfolio sourcing contacts and send out frequent and regular emails updating investment criteria to adapt to changes due to market fluctuations and/or other factors affecting our acquisitions model. All contacts and communications with them are logged in a central database to ensure we have current and correct sourcing information as we continually build and maintain our sourcing network.

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We believe the vast majority of SFR portfolios are available on an off-market basis due to the fragmentation of the SFR income-producing assets market, lack of institutional and other large buyers, and the local vs. national nature of the assets. We source potential SFR portfolios from a variety of sources in our network to optimize deal flow of our target assets, which sources include: residential brokers specializing in income-producing properties; Loopnet — online database of properties and brokers; Trulia — online database of properties and brokers; existing SFR funds attempting to liquidate holdings and/or realize profits on flips; property wholesalers — groups that acquire damaged homes and/or foreclosed homes in order to rehabilitate, rent, flip, and manage; Fannie Mae/Freddie Mac for tenant-occupied portfolios available for bid; national banks selling rented homes; homebuilders; SFR conferences; and other existing contacts.

Once a portfolio has been identified as appropriate for acquisition based on our investment criteria it is subjected to a rigorous evaluation process. This process includes a multi-tiered investment committee process ranging from pre-committee to final committee meetings. This process will ensure that all members of the investment committee agree with the findings from the due diligence period and that the portfolio in question is an appropriate investment for the company and its stockholders. The due diligence process includes case scenario financial modeling and sensitivity analysis, zip-code and neighborhood analysis, physical inspections by qualified engineers, broker price opinions (BPO) analysis to verify valuations are in line with or less than purchase price, title and legal review, and finally property manager vetting and qualification.

Proactive Asset Management

Each time we acquire a portfolio of assets, we prepare a business plan specific for the portfolio that provides clear instructions to, and parameters for, our asset management personnel. Michael P. Soni, our Senior Advisor of Investments, currently serves as our only asset manager. We expect to hire additional asset managers and other asset management personnel as we continue to expand our operations. The asset management team’s primary responsibility will be to execute those business plans. Our asset managers will utilize our property managers’ offices as required for meetings that will limit the need for regional offices and related expenses. Our asset managers will proactively manage the property managers to reduce expenses and implement customer retention plans to keep our tenants in place longer to reduce turnover, vacancy, and re-leasing costs which will ultimately increase stockholder returns. Our asset managers will review property management reports for each portfolio on a bi-monthly basis, prepare monthly asset management reports to ensure that the property managers adhere to the portfolio’s business plan, and provide recommendations that add value to the asset or portfolio. Asset managers will monitor occupancy, rent collection, expenses, insurance, maintenance and other cap-ex closely and will ensure that property managers take all necessary steps to operate within budget. They will also review all purchase offers received on any asset in our portfolio and in turn will provide the information along with the managers’ recommendations to senior management for consideration.

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Upon the closing of this public offering, we intend to implement an “UPREIT” operating partnership structure common to many of our peer companies such that we will own all of our assets and conduct substantially all of our operations through Reven Housing REIT OP, L.P., or our operating partnership, and its subsidiaries, including Reven Housing Georgia, LLC and Reven Housing Texas, LLC. Our wholly owned subsidiary, Reven Housing GP, LLC, will become the sole general partner of our operating partnership and the entity through which we will have the exclusive power to manage and conduct the business and affairs of our operating partnership.

The following chart illustrates our organizational structure, after giving effect to this offering:

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Restrictions on Ownership and Transfer

Due to limitations on the concentration of ownership of REIT stock imposed by the Internal Revenue Code of 1986, as amended, or the Code, subject to certain exceptions, our charter provides that no person may beneficially or constructively own, more than 9.8% in value or in number of shares, whichever is more restrictive, of our outstanding shares of common stock or more than 9.8% in value or number of shares, whichever is more restrictive, of the aggregate outstanding shares of all classes and series of our capital stock. See “Description of Capital Stock — Restrictions on Ownership and Transfer.”

Our charter also prohibits any person from, among other matters:

Our Board of Directors, in its sole discretion, may exempt (prospectively or retroactively) a person from the 9.8% ownership limits and other restrictions in our charter and may establish or increase an excepted holder percentage limit for such person if we obtain such representations and undertakings as our Board of Directors deems appropriate in order to conclude that granting the exemption and/or establishing or increasing the excepted holder percentage limit will not cause us to fail to qualify as a REIT.

Our charter also provides that any ownership or purported transfer of our stock in violation of the foregoing restrictions will result in the shares owned or transferred in such violation being automatically transferred to one or more charitable trusts for the benefit of a charitable beneficiary and the purported owner or transferee acquiring no rights in such shares, except that any transfer that results in the violation of the restriction relating to shares of our capital stock being beneficially owned by fewer than 100 persons will be null and void. If the transfer to the trust is ineffective for any reason to prevent a violation of the restriction, the transfer that would have resulted in such violation will also be null and void.

Distribution Policy

We intend to make quarterly cash dividends in arrears to holders of our common stock. We intend to pay a pro rata distribution with respect to the period commencing on the completion of this offering and ending     , based on $     per share for a full quarter. On an annualized basis, this would be $     per share, or an annual distribution rate of approximately      %, based on an assumed public offering price of $     per share. We intend to maintain our initial distribution rate for the     -month period ending      , unless actual results of operations, economic conditions or other factors differ materially from the assumptions used in our estimate. We estimate that      % of the cash we will distribute to our common stockholders for the    -month period ending     will be generated from our cash from operations and we currently estimate 100% of the distribution may represent a return of capital for tax purposes. In the event that we are unable to generate

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sufficient cash from operations to make distributions to shareholders, to the extent available, we may use the proceeds from this offering or from other sources to make such distributions. We intend to make distributions that will enable us to meet the distribution requirements applicable to REITs and to eliminate or minimize our obligation to pay income and excise taxes. Distributions declared by us will be authorized by our Board of Directors in its sole discretion out of funds legally available for such and will depend upon a number of factors, including restrictions under applicable law and the requirements for our qualification as a REIT for federal income tax purposes. See “Distribution Policy.”

Our Tax Status

We intend to elect and qualify to be taxed as a REIT for federal income tax purposes commencing with our taxable year ending December 31, 2014. We believe that we have been organized and have operated in a manner that will allow us to qualify as a REIT for federal income tax purposes commencing with such taxable year, and we intend to continue operating in such a manner. To qualify and maintain our qualification as a REIT, we must meet a number of organizational and operational requirements, including a requirement that we annually distribute to our stockholders at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gain. See “Material Federal Income Tax Considerations.”

Corporate Information

Our principal executive offices are located at 7911 Herschel Avenue, Suite 201, La Jolla, California 92037. Our main telephone number is (858) 459-4000. Our Internet website is www.revenhousingreit.com . Information on our website is not incorporated into or a part of this prospectus.

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follow-on private placement for the issuance of 43,000,000 shares of common stock for gross proceeds of $8,600,000. The pro forma consolidated statements of operations assume that each acquisition occurred on January 1, 2013. The consolidated statement of operations for December 31, 2013 is also adjusted for interest and amortization of discount on the Company’s convertible debt that was retired on September 27, 2013, as these capital costs will not be recurring.

The adjustments to our pro forma consolidated financial statements are based on available information and assumptions that we consider reasonable. Our pro forma consolidated financial statements do not purport to represent (1) the results of our operations that would have actually occurred had the acquisitions of the 150 and 18 home Houston portfolios occurred on January 1, 2013 or (2) an estimate of the results of our operations as of any future date or for any future period, as applicable.

Historical and Pro Forma Balance Sheet Information

Reven Housing REIT, Inc and Subsidiaries Historical and Pro Forma Condensed Consolidated Balance Sheets		Actuals December 31, 2012 (a) (Audited)				Actuals December 31, 2013 (a) (Audited)				Actuals March 31, 2014 (a) (Unaudited)				Pro Forma Adjustments				Pro Forma March 31, 2014 (Unaudited)
ASSETS
Investment in real estate, net of accumulated depreciation		$	342,010			$	12,502,435			$	13,987,278			$	—			$	13,987,278
Cash			5,763				2,134,510				366,696				8,396,784	(c)			8,763,480
Rents and other receivables			3,375				10,053				18,969				—				18,969
Escrow deposits and prepaid expenses			—				151,128				77,409				—				77,409
Deferred stock issuance costs			50,000				35,000				170,479				(22,797	) (c)			147,682
Total Assets		$	401,148			$	14,833,126			$	14,620,831			$	8,373,987			$	22,994,818
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses		$	119,978			$	347,179			$	285,515			$	—			$	285,515
Security deposits and accrued interest			14,770				156,985				177,520				—				177,520
Convertible notes payable, net of debt discount			283,019				—				—				—				—
Related party advance			266,877				—				—				—				—
Stock compensation payable			—				—				195,000				(195,000	) (b)			—
Total Liabilities			684,644				504,164				658,035				(195,000	)			463,035
Stockholders' Equity
Common stock			8,350				87,861				87,861				975	(b)			131,836
															43,000	(c)
Additional paid-in capital			349,513				15,953,180				15,953,180				194,025	(b)			24,478,192
															8,330,987	(c)
Accumulated deficit			(641,359	)			(1,712,079	)			(2,078,245	)			—				(2,078,245	)
Total Stockholders' Equity			(283,496	)			14,328,962				13,962,796				8,568,987				22,531,783
Total Liabilities and Stockholders' Equity		$	401,148			$	14,833,126			$	14,620,831			$	8,373,987			$	22,994,818

(a)

Reflects our historical consolidated balance sheets as of December 31, 2012, 2013 and March 31, 2014 included elsewhere within this prospectus.

(b)

Reflects issuance on April 4, 2014 of stock to board members for compensation through March 31, 2014.

(c)

Reflects issuance of 43,000,000 shares of common stock in follow on private placement for $8,600,000 of gross proceeds less capital raising costs of $226,013.

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Historical and Pro Forma Statement of Operations

Reven Housing REIT, Inc. and Subsidiaries Historical and Pro Forma Consolidated Statement of Operations		Actuals (a) Year ended December 31, 2012 (Audited)				Actuals (a) Year ended December 31, 2013 (Audited)				Pro Forma Adjustments								Pro Forma Year ended December 31, 2013 (Unaudited)				Actuals (a) Quarter ended March 31, 2013 (Unaudited)				Actuals (a) Quarter ended March 31, 2014 (Unaudited)
										Property Adjustments				Other Adjustments
										$	1,325,774	(b)		$	—
Rental income, net		$	6,750			$	342,243				217,000	(c)			—			$	1,885,017			$	20,273			$	480,595
Operating expenses:
Rental expenses			1,006				136,679				588,146	(b)			—				820,225				7,996				184,135
											95,400	(c)
General and administrative			132,261				366,071				—				—				366,071				39,541				440,849
Legal and accounting			396,797				195,156				—				—				195,156				34,976				122,277
Interest expense			13,258				77,004				—				(77,004	) (d)			—				25,942				—
Amortization of discount on notes payable			56,530				563,253				—				(563,253	) (e)			—				140,814				—
Depreciation expense			1,400				74,800				290,270	(b)			—				411,070				4,200				99,500
											46,000	(c)
Total operating expenses			601,252				1,412,963				1,019,816				(640,257	)			1,792,522				253,469				846,761
Income (loss) from continuing operations		$	(594,502	)		$	(1,070,720	)		$	522,958			$	640,257			$	92,495			$	(233,196	)		$	(366,166	)
Income from discontinued operations, net of taxes			334				—				—				—				—				—				—
Net income (loss)		$	(594,168	)		$	(1,070,720	)		$	522,958			$	640,257			$	92,495			$	(233,196	)		$	(366,166	)

Other Data:

Unaudited pro forma funds from operations (“FFO”), which is a non-GAAP measurement, for the year ended December 31, 2013 is as follows:

Reven Housing REIT, Inc. and Subsidiaries Reconciliation of Non-GAAP Pro Forma Financial Measures		Pro Forma Year ended December 31, 2013
Net income (loss)		$	92,495
Add back depreciation and amortization			411,070
Funds from operations		$	503,565

The National Association of Real Estate Investment Trusts (“NAREIT”) defines funds from operations (FFO) as net income, excluding gains (or losses) from sales of depreciable assets, plus depreciation and amortization of intangible assets. We calculate FFO in a manner consistent with the NAREIT definition. FFO should be considered as a supplemental measure of operating performance used by REITs. We believe the FFO is helpful to investors as one of several measures of the performance of a REIT. FFO excludes historical cost depreciation as an expense and may facilitate the comparison of REITs which have different cost basis. The items excluded from FFO are significant components in understanding our financial performance.

FFO does not represent cash flow from operations as defined by generally accepted accounting principles. FFO should not be considered as an alternative to net income, as a measure of operation performance or cash

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flows from operating, investing and financing activities, and is not an alternative to cash flow as a measure of liquidity. FFO, as calculated by us, may not be comparable to similarly entitled measures reported by other REITs.

Our management uses FFO as a supplemental measure to conduct and evaluate our business because there are certain limitations associated with using GAAP net income alone as the primary measure of our operating performance. Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time, while historically real estate values have risen or fallen with market conditions. Accordingly, we believe FFO provides a valuable alternative measurement tool to GAAP when presenting our operating results.

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We are an early entrant in an emerging industry, and the long-term viability of our business strategy on an institutional scale is unproven.

Large-scale institutional investment in single-family residential homes as investment properties for rent is a relatively recent phenomenon that has emerged out of the mortgage and housing crisis that began in late 2007. Previously, single-family homes were generally not viewed as a viable asset for investment on a large scale by institutional investors. Consequently, the long-term viability of single-family residential investment strategies at an institutional scale has not yet been proven. As an early entrant in this emerging industry, we are subject to the risk that single-family rental homes may not prove to be a viable long-term business strategy for a permanent capital vehicle at an institutional scale. If it turns out that our strategy is not a viable long-term business strategy at an institutional scale, we may not be able to generate meaningful cash flows, which would materially and adversely affect the viability of our business and stock price.

We do not have any experience operating as a REIT.

We have no operating history as a REIT. Our Board of Directors and executive officers will have overall responsibility for the management of our company. While certain of our officers and directors have extensive experience in real estate marketing, development, management, and finance, they had not previously engaged in operating a business in accordance with the requirements of the Code for achieving and maintaining qualification as a REIT prior to joining us. We cannot assure you that the past experience of our Board of Directors and executive officers will be sufficient to successfully operate our company as a REIT. Our failure to qualify and maintain REIT status would have an adverse effect on the cash available for distribution to our stockholders, as well as our business, results of operations, financial condition and cash flows.

We have many competitors and may not be able to adequately compete in the SFR market.

Recently, several institutional investors have begun acquiring single-family homes on a large scale. Traditionally, foreclosed properties and loans secured by properties in pre-foreclosure were sold individually to private home buyers and small-scale investors. The sale of these assets in portfolios and the entry into this market of large, well-capitalized institutional investors are relatively recent trends, which we expect to intensify in the near future. Other REITs and investment funds have recently deployed, or are expected to deploy in the near future, significant amounts of capital in the single-family housing sector and may have investment objectives that overlap with ours. In acquiring our target assets, we will compete with a variety of well-capitalized real estate investors, including pension funds, individual home buyers, banks, insurance companies, public and private real estate investors, such as REITs, real estate limited partnerships and other entities engaged in real estate investment activities. We also face competition from new home builders, investors and speculators, as well as homeowners renting their properties. Most of our competitors are larger and have greater financial, technical, leasing, marketing and other resources than we do. Some competitors may enjoy significant competitive advantages that result from, among other things, having substantially more available capital, having a lower cost of capital and enhanced operating efficiencies. At this time, neither we nor any other company has established a market-leading position, and, even if we succeed in becoming an industry leader, there can be no assurance that it will confer any long-term competitive advantage or positive financial results.

Our long-term growth will depend significantly upon future acquisitions of single-family homes that meet our acquisition criteria.

The acquisition of single-family homes (which is the central element of our growth strategy) entails various risks, including the risks that we may overvalue a home or portfolio of homes, our homes may not perform as we expect, our tenants may default and our cost estimates for restoring an acquired home may prove inaccurate, and we may be unable to quickly and efficiently renew leases of our acquired homes upon their expiration. If any of these should occur, it may have a material adverse effect on our business, results of operations, financial condition and cash flows. In addition, we cannot assure you of the continued availability of acquisition opportunities in our markets at attractive pricing levels. If such opportunities are not available, our revenue and growth potential may be adversely affected.

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Our single-family homes may be unable to compete successfully for tenants.

Our single-family homes compete for tenants with other single-family homes and multi-family housing options, such as apartments and condominiums. Some of our competitors may offer more attractive properties or lower rents than we do, and they may attract the high-quality tenants to whom we seek to lease our properties. Additionally, some competing housing options may qualify for governmental subsidies that may make such options more affordable and therefore more attractive than our properties. Competition for tenants could reduce our occupancy and rental rates and adversely affect our business, results of operations, financial condition and cash flows and our ability to pay distributions to our stockholders.

We have not identified specific acquisitions or other uses for a significant portion of the net proceeds from this offering. Therefore, you will be unable to evaluate the allocation of the net proceeds from this offering or the economic merits of our investments before making an investment decision to purchase our common stock.

We have broad authority to invest the net proceeds from this offering in any real estate investments that we may identify in the future, and we may use those proceeds to make investments with which you may not agree. You will be unable to evaluate the economic merit of acquiring such properties and will be relying on our ability to select attractive investments. We also have broad discretion in implementing policies regarding tenant creditworthiness, and you will not have the opportunity to evaluate our tenants. In addition, our investment policies may be amended or revised from time to time at the discretion of our Board of Directors, without a vote of our stockholders. These factors will increase the uncertainty, and thus the risk, of investing in our common stock.

Although we intend to use the net proceeds from this offering to acquire portfolios of 100% leased single-family home rental properties, we cannot assure you that we will be able to do so. Our failure to apply the net proceeds from this offering effectively or find suitable assets to acquire in a timely manner or on acceptable terms could result in losses or returns that are substantially below expectations.

Prior to the full deployment of the net proceeds of this offering as described above, we may invest the undeployed net proceeds in interest-bearing, short-term, investment-grade securities or money market accounts that are consistent with our intention to qualify as a REIT. We expect that these initial investments will provide a lower net return than we expect to receive from the investments described above. We may not be successful in completing any investments we identify and the single-family homes we acquire may not produce our anticipated, or any, positive returns.

We intend to rapidly expand our scale of operations and make acquisitions even if the rental and housing markets are not as favorable as they had been in 2012 when we first began our real estate operations, which could adversely impact anticipated yields.

Our long-term growth depends on the availability of acquisition opportunities in our current markets and other markets at attractive pricing levels. In many markets housing prices have already begun returning to more normalized levels from the low prices we saw in recent years due to the downturn in the housing market, and we expect that in the future housing prices will continue to rise or stabilize at its current levels, and therefore future acquisitions may be more costly and result in lower yields. See “Industry Overview and Market Opportunity.” There are many factors that may result in future acquisitions becoming more expensive and possibly less attractive than recent past and present opportunities, including:

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We will continue acquiring properties as long as we believe such properties offer an attractive total return opportunity. Accordingly, future acquisitions may have lower yield characteristics than recent past and present opportunities, and if such future acquisitions are funded through equity issuances, the yield and cash available for distribution per share will be reduced and the market price of our common stock may decline.

Our limited asset class and geographic diversification increases the risk of loss.

Our portfolio is not fully diversified into a wide variety of properties or holdings. All of our real estate assets are of a single asset class (namely SFRs) and are currently located only in the Atlanta, Georgia, metropolitan area and the Houston, Texas, metropolitan area. Accordingly, any adverse effects on the SFR sector specifically or the real estate industry in general or limited to such geographic markets, may have a disproportionate negative effect on our company and the value of our common stock. Additionally, we do not have geographic or product diversification or concentration as an investment objective. As a result, we could have (i) exposure to a limited number of regional and even local markets; and/or (ii) a limited number of real estate-related investments. The aggregate yields generated by our company may be negatively affected by adverse regional or local economic conditions in these geographic markets.

We are dependent on our executive officers and dedicated personnel, and the departure of any of our key personnel could materially and adversely affect us.

We rely on a small number of persons to carry out our business and investment strategies. Any member of our senior management may cease to provide services to us at any time. The loss of the services of any of our key management personnel, or our inability to recruit and retain qualified personnel in the future, could have an adverse effect on our business and financial results. As we expand, we will continue to need to attract and retain qualified additional senior management but may not be able to do so on acceptable terms or at all.

Our success depends, in part, upon our ability to hire and retain highly skilled managerial, investment and operational personnel, and the past performance of our senior management may not be indicative of future results.

The implementation of our business plan may require that we employ additional qualified personnel. Competition for highly skilled managerial, investment, financial and operational personnel is intense, and we cannot assure our stockholders that we will be successful in attracting and retaining such skilled personnel. If we are unable to hire and retain qualified personnel as required, our growth and operating results could be adversely affected.

Our dependence upon local, third-party service providers may harm our financial results or reputation if the third parties fail to perform.

We use local, third-party vendors and service providers to provide certain services for our properties. For example, we regularly rely on third-party property management companies, home improvement professionals and leasing agents to provide services to many of our properties. Selecting, managing and supervising these third-party service providers require significant resources and expertise. We do not have exclusive or long-term contractual relationships with any of these third-party providers, and we can provide no assurance that we will have uninterrupted or unlimited access to their services. If we do not select, manage and supervise appropriate third parties to provide these services, our reputation and financial results may suffer. Notwithstanding our efforts to implement and enforce strong policies and practices regarding service providers, we may not successfully detect and prevent fraud, incompetence or theft by our third-party service providers. In addition, any removal or termination of third-party service providers would require us to seek new vendors or providers, which would create delays and adversely affect our operations. Poor performance by third-party service providers will reflect poorly on us and could significantly damage our reputation among desirable tenants. In the event of fraud or misconduct by a third party, we could also be exposed to material liability and be held responsible for damages, fines and/or penalties.

Short-term leases of residential property may expose us to the effects of declining market rents.

We anticipate that a majority of our leases to tenant-occupants will be for a term of one year. As these leases permit the tenants to leave at the end of the lease term without penalty, we anticipate our rental revenues may be affected by declines in market rents more quickly than if our leases were for longer terms.

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Short-term leases may result in high turnover, which involves costs such as restoring the properties, marketing costs and lower occupancy levels. Because we have a limited operating history, our tenant turnover rate and related cost estimates may be less accurate than if we had more operating data upon which to base these estimates.

We depend on the accuracy and completeness of information from third parties, and inaccuracies in such information could adversely affect profitability.

In connection with making and managing our investments, we rely heavily upon information supplied by third parties, including the information contained in tenant applications, property appraisals or other indicators of property value, title information and employment and income documentation. If any of this information is intentionally or negligently misrepresented and the misrepresentation is not detected prior to making an investment or execution of a lease, the value of the investment may be significantly less than expected. Whether a misrepresentation is made by seller of a property, the rental applicant, another third party or one of our own employees, we generally bear the risk of loss associated with the misrepresentation. Although we may have rights against persons and entities who made or knew or should have known about the misrepresentation, it will likely be difficult to recover any monetary losses that we have suffered as a result of their actions.

We may be unable to secure funds for future tenant or other capital improvements, which could limit our ability to attract or replace tenants.

When tenants do not renew their leases or otherwise vacate their space, we often are required to expend funds for property restoration and leasing commissions in order to re-lease the property. If we have not established sufficient reserves for such expenditures, we will have to obtain financing from other sources. We may also have future financing needs for other capital improvements to restore our properties. If we need to secure financing for capital improvements in the future but are unable to secure such financing or are unable to secure financing on terms we feel are acceptable, we may be unable to make capital improvements or we may be required to defer such improvements. If this happens, it may cause our properties to suffer from a greater risk of obsolescence or a decline in value, or a greater risk of decreased cash flow as a result of fewer potential tenants being attracted to the property or existing tenants not renewing their leases. If we do not have access to sufficient funding in the future, we may not be able to make necessary capital improvements to our properties, and our properties’ ability to generate revenue may be significantly impaired.

Our revenue and expenses are not directly correlated, and, because a large percentage of our costs and expenses are fixed and some variable expenses may not decrease over time, we may not be able to adapt our cost structure to offset any declines in our revenue.

Many of the expenses associated with our business, such as acquisition costs, restoration and maintenance costs, homeowner’s association, or HOA, fees, personal and real property taxes, insurance, compensation and other general expenses are fixed and would not necessarily decrease proportionally with any decrease in revenue. Our assets also require a significant amount of ongoing capital expenditure. Our expenses, including capital expenditures, will be affected by, among other things, any inflationary increases, and cost increases may exceed the rate of inflation in any given period. Certain expenses incurred on a per-unit basis are recurring in nature, such as HOA fees, taxes, insurance and restoration and maintenance costs, which may not decrease on a per-unit basis as our portfolio grows through additional property acquisitions. By contrast, our revenue is affected by many factors beyond our control, such as the availability and price of alternative rental housing and economic conditions in our markets. As a result, we may not be able to fully, or partially, offset any increase in our expenses with a corresponding increase in our revenues. In addition, state and local regulations may require us to maintain our properties, even if the cost of maintenance is greater than the value of the property or any potential benefit we may receive from renting the property.

If we cannot obtain financing, our growth may be limited.

To qualify as a REIT, we will be required to distribute at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gain, each year to our stockholders. As a result, our ability to retain earnings to fund acquisitions or other capital expenditures

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will be limited. As of the date of this prospectus, all of our assets were purchased with available cash. However, over time, we may determine that it is appropriate to use leverage as a component of our financing strategy in an effort to increase our return potential. We can provide no assurance that we will be able to obtain debt financing on favorable terms or at all.

Recent events in the financial markets have had an adverse impact on the credit markets, and, as a result, credit has become significantly more expensive and difficult to obtain, if available at all. Some lenders are imposing more stringent credit terms and there has been and may continue to be a general reduction in the amount of credit available. Many banks are either unable or unwilling to provide new asset-based lending. Tightening credit markets may have an adverse effect on our ability to obtain financing on favorable terms, thereby increasing financing costs and/or requiring us to accept financing with increasing restrictions. If adverse conditions in the credit markets — in particular with respect to single-family home finance — materially deteriorate, our business could be materially and adversely affected. Our long-term ability to grow through additional investments will be limited if we cannot obtain additional financing. Market conditions may make it difficult to obtain financing, and we cannot assure you that we will be able to obtain debt or equity financing or that we will be able to obtain it on favorable terms.

We anticipate being involved in a variety of litigation.

Although we have not been subject to any litigation to date, we anticipate being involved in a range of court proceedings in the ordinary course of business as we continue to operate our business. These actions may include eviction proceedings and other landlord-tenant disputes, challenges to title and ownership rights (including actions brought by prior owners alleging wrongful foreclosure by their lender or loan servicer) and issues with local housing officials arising from the condition or maintenance of a property. While we intend to vigorously defend any non-meritorious action or challenge, no assurance can be given that we will not incur significant expense relating to these matters or that they will not require significant management attention and adversely affect us.

The estimates, forecasts and projections relating to our markets prepared by The London Group are based upon numerous assumptions and may not prove to be accurate.

This prospectus contains estimates, forecasts and projections relating to our primary markets that were prepared for us for use in connection with this offering by The London Group Realty Advisors, or The London Group, a real estate analysis and strategic consulting firm. See “Industry Overview and Market Opportunity.” The estimates, forecasts and projections relate to, among other things, replacement cost, home value indices, payroll employment growth, median household income, housing permits and household formation. No assurance can be given that these estimates are, or that the forecasts and projections will prove to be, accurate. These estimates, forecasts and projections are based on data (including third-party data), significant assumptions, proprietary methodologies and the experience and judgment of The London Group. No assurance can be given regarding the accuracy or appropriateness of the assumptions and judgments made, or the methodologies used, by The London Group. The application of alternative assumptions, judgments or methodologies could result in materially less favorable estimates, forecasts and projections than those contained in this prospectus. Other real estate experts have different views regarding these forecasts and projections that may be more positive or negative, including in terms of the timing, magnitude and direction of future changes.

The forecasts and projections are forward-looking statements and involve risks and uncertainties that may cause actual results to be materially different from the projections. The London Group has made these forecasts and projections based on studying the historical and current performance of the residential housing market and applying The London Group’s qualitative knowledge about the residential housing market. The future is difficult to predict, particularly given that the economy and housing markets can be cyclical, subject to changing consumer and market psychology, and governmental policies related to mortgage regulations and interest rates. There will usually be differences between projected and actual outcomes, because events and circumstances frequently do not occur as expected, and the differences may be material. Accordingly, the forecasts and projections included in this prospectus might not occur or might occur to a different extent or at a different time. For the foregoing reasons, neither we nor The London Group can provide any assurance that the estimates, forecasts and projections contained in this prospectus are accurate, actual outcomes may vary

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significantly from those contained or implied by the forecasts and projections, and you should not place undue reliance on these estimates, forecasts and projections. Except as required by law, we are not obligated to, and do not intend to, update the statements in this prospectus to conform to actual outcomes or changes in our or The London Group’s expectations.

Our underwriting criteria and evaluation of properties involves a number of assumptions that may prove inaccurate, which may cause us to overpay for our properties or incur significant costs to operate a property.

In determining whether a particular property or portfolio of properties meets our investment criteria, we make a number of assumptions, including assumptions related to estimated time of possession, annual operating costs, market rental rates and potential rent amounts, time from purchase to leasing and tenant default rates. These assumptions may prove inaccurate, causing us to pay too much for properties we acquire, overvalue our properties or our properties not to perform as we expect, and adjustments to the assumptions we make in evaluating potential purchases may result in fewer properties qualifying under our investment criteria. Improvements in the market prices for single-family homes in our target markets or decreases in the available inventory could also reduce the supply of properties that meet our investment criteria. Reductions in the supply of properties that meet our investment criteria may adversely affect our operating results and ability to implement our business plan.

Certain of our older properties may contain lead-based paint, which we may be required to remove or could expose us to liability, either of which would adversely affect our operating results.

The existence of lead paint is especially a concern in residential units and can cause health problems, particularly for children. A structure built prior to 1978 may contain lead-based paint and may present a potential exposure to lead; however, structures built after 1978 are not likely to contain lead-based paint. Federal and state laws impose certain disclosure requirements and restrict and regulate renovation activities on housing built before 1978. Violation of these restrictions could result in fines or criminal liability, and we could be subject to liability arising from lawsuits alleging personal injury or related claims. Although we attempt to comply with all such regulations, we have not conducted tests on our properties to determine the presence of lead-based paint and we cannot guarantee that we will not incur any material liabilities as a result of the presence of lead paint in our properties.

Operating our business on a larger scale could result in substantial increases in our expenses.

One of our goals is to implement our single-family rental business nationally. Our business model assumes that we can successfully use our vertically integrated platform to acquire and manage single-family homes on a larger scale than we have done to date without a directly proportional increase in our expenses. As our business grows in size and complexity, we can provide no assurance that our management platform will ultimately prove to be “scalable,” we will be able to achieve economies of scale or we will be able to manage additional properties in our current markets, successfully enter new markets or grow our business without incurring significant additional expenses.

Debt service obligations could adversely affect our operating results, may require us to sell properties and could adversely affect our ability to make or sustain distributions to our stockholders and the market price of our common stock.

We may finance future activities with indebtedness and we may be more likely to do so as our business grows. We may borrow for a number of reasons, such as financing acquisitions, capital expenditures or distributions necessary to qualify as a REIT. Our governing documents contain no limitations on the amount of debt that we may incur. As a result, we may incur substantial debt at our parent company and or at our subsidiary levels in the future.

Incurring debt could subject us to many risks, including the risks that:

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If we do not have sufficient funds to repay any debt we incur when it matures, we may need to refinance the debt or raise additional equity. If, at the time of any refinancing, prevailing interest rates or other factors result in higher interest rates on refinancing, increases in interest expense could adversely affect our cash flows and, consequently, cash available for distribution to our stockholders. To the extent we are required to raise additional equity to satisfy such debt, existing stockholders would see their interests diluted. If we are unable to refinance our debt or raise additional equity on acceptable terms, we may be forced to dispose of substantial numbers of properties on disadvantageous terms, potentially resulting in losses. To the extent we cannot meet any future debt service obligations, we will risk losing some or all of our properties that may be pledged to secure our obligations to foreclosure. Any unsecured debt agreements we enter into may contain specific cross-default provisions with respect to specified other indebtedness, giving the unsecured lenders the right to declare a default if we are in default under other loans in some circumstances.

Our financial results in the period or periods immediately following completion of this offering may not be reflective of our earning potential and may cause our stock price to decline.

Our financial results in the fiscal periods immediately following completion of this offering may not be representative of our future potential. Prior to the full deployment of the net proceeds from this offering, we may invest the undeployed net proceeds in interest-bearing, short-term, investment-grade securities or money market accounts that are consistent with our intention to qualify as a REIT. We expect that these initial investments will provide a lower net return than we expect to receive from the investments described in this prospectus. In addition, since we expect to experience rapid growth following this offering, we will have a greater percentage of our portfolio invested in assets in the process of stabilization than we would expect to have as a more mature operation. It will take time and significant cash resources to restore, reposition and lease these properties in the process of stabilization. As a result, newly acquired properties, that are not leased at the time of acquisition, will not begin generating revenue for some period of time following this offering and will reduce our overall financial performance. In addition, future equity or debt financings may impact our financial results in the fiscal periods following such financings for the same reasons listed above.

Security breaches and other disruptions could compromise our information and expose us to liability, which would cause our business and reputation to suffer.

In the ordinary course of our business we acquire and store sensitive data, including intellectual property, our proprietary business information and personally identifiable information of our prospective and current tenants, our employees and third-party service providers on our networks and website. The secure processing and maintenance of this information is critical to our operations and business strategy. Despite our security measures, our information technology and infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or other disruptions. Any such breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lost or stolen. Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, regulatory penalties, disruption to our operations and the services we provide to customers or damage our reputation, which could adversely affect our results of operations and competitive position.

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Risks Related to the Single-Family Rental Housing Market

If rents in our markets do not increase sufficiently to keep pace with rising costs of operations, our cash available for distribution will decline.

The success of our business model will substantially depend on conditions in the single-family rental market in our geographic markets. Our asset acquisitions are premised on assumptions about, among other things, occupancy and rent levels, and if those assumptions prove to be inaccurate our cash flows will be lower than expected. When we first began executing our business plan, rental rates and occupancy levels benefited from macroeconomic trends affecting the U.S. economy and residential real estate markets in particular, including:

In recent periods, however, we have seen a reversal of these trends in the residential rental market. Eventually, the continued strengthening of the U.S. economy and job growth, coupled with government programs designed to keep homeowners in their homes and/or other factors, may contribute to trends that favor homeownership rather than renting. A softening of the rental market in our markets would reduce our rental revenue.

Acquiring properties during periods when the single-family home sector is experiencing substantial inflows of capital and intense competition may result in inflated purchase prices and increase the likelihood that our properties will not appreciate in value and may, instead, decrease in value.

The allocation of substantial amounts of capital for investment in the single-family home sector and significant competition for income producing real estate may inflate the purchase prices for such assets. To the extent we purchased or in the future purchase real estate in such an environment, it is possible that the value of our properties may not appreciate and may, instead, decrease in value, perhaps significantly, below the amount we paid for such properties. In addition to macroeconomic and local economic factors, technical factors, such as a decrease in the amount of capital allocated to the single-family home sector and the number of investors participating in the sector, could cause the value of our properties to decline.

We may engage in expedited transactions that increase the risk of loss.

Our underwriting guidelines require a thorough analysis of many factors, including, among others, the underlying property’s financial performance and condition, geographic market assessment and future prospects of the property within the market. Investment analyses and decisions by us may frequently be required to be undertaken on an expedited basis to take advantage of investment opportunities. In such cases, the information available to us at the time of making an investment decision may be limited, and we may not have access to detailed information regarding the investment property, such as physical characteristics, environmental matters, zoning regulations or other local conditions affecting an investment property. If we make the decision to purchase a property prior to the full completion of one or more of these analyses, we may fail to identify certain risks that we would otherwise have identified and suffer significant losses as a result. Therefore, no assurance can be given that we will have knowledge of all circumstances that may adversely affect an investment. Additionally, we expect to rely upon independent consultants in connection with its evaluation of proposed investments, and no assurance can be given as to the accuracy or completeness of the information provided by such independent consultants or to our right of recourse against them in the event errors or omissions do occur.

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Properties acquired as part of portfolios or in bulk may subject us to a variety of risks.

All of our properties have been, and we expect that a substantial portion of any future property acquisitions will be, purchased as portfolios in bulk from owners of portfolios of single-family homes. To the extent the management and leasing of such properties have not been consistent with our property management and leasing standards, we may be subject to a variety of risks, including risks relating to the condition of the properties, the credit quality and employment stability of the tenants and compliance with applicable laws, among others. In addition, financial and other information provided to us regarding such portfolios during our due diligence may not be accurate, and we may not discover such inaccuracies until it is too late to seek remedies against such sellers. To the extent we timely pursue such remedies, we may not be able to successfully prevail against the seller in an action seeking damages for such inaccuracies.

We may be unable to keep or attract tenants.

We may not be able to retain current, or attract new, tenants for the properties we may acquire. We may make substantial concessions in terms of rent and lease incentives, and construct tenant improvements, to attract new tenants or keep existing tenants. The operating results and financial viability of any property could be substantially and materially affected by any inability to retain and attract tenants. Additionally, there is the risk that tenants may break their leases before those leases expire. Any of such properties may not be able to retain or increase its current occupancy at projected rents. If that occurs, our operations and our ability to make distributions to stockholders may be adversely affected.

Lease terminations or tenant defaults could reduce our income and limit our ability to make distributions.

The success of our investments will materially depend on the financial stability of our tenants. The inability of tenants to meet their rental obligations would lower our net income. A default by a significant number of tenants on their lease payments would cause us to lose the revenue associated with such leases and require us to find an alternative source of revenue to meet operating expenses. We may fail to, or may not be able to, discover factors that would indicate a heightened level of uncertainty with respect to tenant defaults when performing due diligence on prospective investments. Tenant defaults increase the risk that we, and our stockholders, could suffer a loss. As of March 31, 2014, we had eight tenants that were behind in their rent.

If a tenant defaults or goes bankrupt, we may experience delays in enforcing our rights as landlord and may incur substantial costs in protecting our investment and re-letting the property. If a defaulting tenant does not cooperate in vacating the property, we would have to engage in time-consuming and costly prosecution and enforcement of eviction proceedings, during which time there would be no rental revenues from such unit and no likely recovery of damages from the defaulting tenant. These events could limit our ability to make distributions to stockholders and decrease the value of our common stock.

If and when residents of our portfolio properties decide not to renew their leases upon expiration, we may be unable to relet such residents’ properties. Even if the residents do renew or we can relet the properties, the terms of renewal or reletting may be less favorable than current lease terms. If we are unable to promptly renew the leases or relet the properties, or if the rental rates upon renewal or reletting are significantly lower than expected rates, then our results of operations and financial condition will be adversely affected.

A number of our properties are part of HOAs, and we and our tenants are subject to the rules and regulations of such HOAs, which may be arbitrary or restrictive. Violations of such rules may subject us to additional fees, penalties and litigation with such HOAs which would be costly.

Approximately 42% of our properties are located within HOAs, which are private entities that regulate the activities of owners and occupants of, and levy assessments on, properties in a residential subdivision. HOAs in which we own properties may have or may enact onerous or arbitrary rules that restrict our ability to restore, market or lease our properties or require us to restore or maintain such properties at standards or costs that are in excess of our planned budgets. Such rules may include requirements for landscaping, limitations on signage promoting a property for lease or sale or the requirement that specific construction materials be used in restorations. Some HOAs also impose limits on the number of property owners who may rent their homes, which, if met or exceeded, would cause us to incur additional costs to sell the property and opportunity costs

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of lost rental revenue. Furthermore, many HOAs impose restrictions on the conduct of occupants of homes and the use of common areas, and we may have tenants who violate HOA rules and for which we may be liable as the property owner. Additionally, the boards of directors of the HOAs in which we own property may not make important disclosures about the properties or may block our access to HOA records, initiate litigation, restrict our ability to sell our properties, impose assessments or arbitrarily change the HOA rules. We may be unaware of or unable to review or comply with HOA rules before purchasing a property, and any such excessively restrictive or arbitrary regulations may cause us to sell such property at a loss, prevent us from renting such property or otherwise reduce our cash flow from such property, which would have an adverse effect on our returns on these properties.

We are subject to tenant relief laws and may be subject to rent control laws, which will negatively impact our rental revenue.

As an owner of rental properties, we expect that we will regularly be seeking to evict tenants who are not paying their rent or are otherwise in material violation of the terms of their lease. Eviction activities will result in additional legal costs and require the time and attention of our management. The eviction process is typically subject to numerous legal requirements and mandatory “cure” policies, which may increase our costs and delay our ability to gain possession of and stabilize a property. Additionally, state and local landlord-tenant laws may impose legal duties on us to assist tenants in relocating to new housing, or restrict our ability to recover certain costs or charge tenants for damage tenants cause to our property. Because such laws vary by state and locality, we will need to be familiar with and take appropriate steps to comply with applicable landlord-tenant laws in the jurisdictions in which we operate, and we will need to incur supervisory and legal expenses to ensure such compliance. To the extent that we do not comply with state or local laws, we may be subjected to civil litigation filed by individuals, a class of plaintiffs or by state or local law enforcement. We may be required to pay our adversaries’ litigation fees and expenses if judgment is entered against us in such litigation or if we settle such litigation.

Furthermore, rent control laws may affect our rental revenue. Especially in times of recession and economic slowdown, rent control initiatives can receive significant political support. If rent control becomes applicable to certain of our properties, the effects on both our rental revenue and the value of such properties could be material and adverse.

Class action, tenants’ rights and consumer rights litigation may result in increased expenses and harm our results.

There are numerous tenants’ rights and consumer rights organizations that operate in our markets, and, as we grow in scale, we may attract attention from some of these organizations and become a target of legal demands or litigation. With the increased market for single-family rentals arising from former homeowners who may have lost their properties, some of these organizations may shift their litigation, lobbying, fundraising and grass roots organizing activities to focus on landlord-tenant issues, including issues relating to the Fair Housing Act, or FHA, and its state law counterparts. While we intend to conduct our business lawfully and in compliance with applicable landlord-tenant and consumer laws, such organizations might work in conjunction with trial and pro bono lawyers in one state or multiple states to attempt to bring claims against us on a class action basis for damages or injunctive relief. We cannot anticipate what form such legal actions might take if initiated or what remedies they may seek. Additionally, these organizations may lobby local county and municipal attorneys or state attorneys general to pursue enforcement or litigation against us or may lobby state and local legislatures to pass new laws and regulations to constrain our business operations. If they are successful in any such endeavors, they could limit our business operations and may impose on us significant litigation expenses, including settlements to avoid continued litigation or judgments for damages or injunctions.

Poor tenant selection and defaults by our tenants may negatively affect our financial performance and reputation.

Our success will depend, in large part, upon our ability to attract and retain qualified tenants for our properties. This will depend, in turn, upon our ability to screen applicants, identify good tenants and avoid tenants who may default. We will inevitably make mistakes in our selection of tenants, and we may rent to

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tenants whose default on our leases or failure to comply with the terms of the lease or HOA regulations negatively affect our financial performance, reputation and the quality and value of our properties. For example, tenants may default on payment of rent, make unreasonable and repeated demands for service or improvements, make unsupported or unjustified complaints to regulatory or political authorities, make use of our properties for illegal purposes, damage or make unauthorized structural changes to our properties which may not be fully covered by security deposits, refuse to leave the property when the lease is terminated, engage in domestic violence or similar disturbances, disturb nearby residents with noise, trash, odors or eyesores, fail to comply with HOA regulations, sub-let to less desirable individuals in violation of our leases or permit unauthorized persons to live with them. In addition, defaulting tenants will often be effectively judgment-proof. The process of evicting a defaulting tenant from a family residence can be adversarial, protracted and costly. Furthermore, some tenants facing eviction may damage or destroy the property. Damage to our properties may significantly delay re-leasing after eviction, necessitate expensive repairs or impair the rental revenue or value of the property, resulting in a lower than expected rate of return. In addition, we will incur turnover costs associated with re-leasing the properties, such as marketing expense and brokerage commissions, and will not collect revenue while the property is vacant. Although we will attempt to work with tenants to prevent such damage or destruction, there can be no assurance that we will be successful in all or most cases. Such tenants will not only cause us not to achieve our financial objectives for the properties in which they live, but may subject us to liability, and may damage our reputation with our other tenants and in the communities where we do business.

Declining real estate values and impairment charges could adversely affect our earnings and financial condition.

We intend to review the carrying value of our long-lived assets for impairment whenever events or changes in circumstances, such as adverse market conditions, indicate that their carrying amount may not be recoverable. If our evaluation indicates that we may be unable to recover the carrying value of a material portion of our real estate investments, an impairment loss will be recorded to the extent that the carrying value exceeds the estimated fair value of the properties. These losses would have a direct impact on our net income, because recording an impairment loss results in an immediate negative adjustment to net income. They would also be reflected as a decrease in assets on our balance sheet. The evaluation of anticipated cash flows is highly subjective and is based in part on assumptions regarding future occupancy, rental rates and capital requirements that could differ materially from actual results in future periods. A deteriorating real estate market may cause us to reevaluate the assumptions used in our impairment analysis. Impairment charges could adversely affect our financial condition, results of operations, cash available for distribution and market price of our common stock.

Risks Related to the Real Estate Industry Generally

There are significant risks involved with any investment in real estate.

The performance of our investments, and the performance of our company and our ability to make distributions, is subject to those risks typically associated with investments in real estate. Any change in operating expenses and tax rates could adversely affect operating results or render the sale, financing, or refinancing of a portfolio of properties difficult or unattractive. Certain expenditures associated with the properties will be fixed (principally real estate taxes and maintenance costs) and will be payable even if the properties do not generate sufficient income, which could have a negative impact on us. No assurance can be given that certain assumptions as to future costs of operating any of our properties will be accurate, since such matters will depend on events and factors beyond our control. These factors include, among others:

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A worsening of current financial market conditions or events negatively impacting the U.S. banking system could adversely affect our operations and our ability to make distributions.

Uninsured or underinsured losses relating to real property may adversely affect our returns.

We attempt to ensure that all of the properties we acquire are adequately insured to cover casualty losses. However, there are certain losses, including losses from floods, fires, earthquakes, acts of war, acts of terrorism or riots, that may not always be insured against or that are not generally fully insured against because it is not deemed economically feasible or prudent to do so. In addition, changes in the cost or availability of insurance could expose us to uninsured casualty losses. In the event that any of the properties we acquire incurs a casualty loss that is not fully covered by insurance, the value of our assets will be reduced by the amount of any such uninsured loss, and we could experience a significant loss of capital invested and potential revenues in these properties and could potentially remain obligated under any recourse debt associated with the property. Inflation, changes in building codes and ordinances, environmental considerations and other factors might also keep us from using insurance proceeds to replace or restore a property after it has been damaged or destroyed. Under those circumstances, the insurance proceeds we receive might be inadequate to restore our economic position on the damaged or destroyed property. Any such losses could adversely affect us and the market price of our common stock. In addition, we may have no source of funding to repair or reconstruct the damaged property, and we cannot assure you that any such sources of funding will be available to us for such purposes in the future.

Due diligence on properties may not reveal all conditions that may adversely affect the value of our investments.

We perform due diligence on each investment prior to its acquisition. Regardless of the thoroughness of the due diligence process, not all circumstances affecting the value of an investment can be ascertained through the due diligence process. If the due diligence materials provided to us are inaccurate, if we do not sufficiently investigate or follow up on matters brought to our attention as part of the due diligence process, or if the due diligence process fails to detect material facts that impact the value determination, we may acquire an investment that results in significant losses to us or may overpay for an investment, which would cause our financial results to suffer.

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Contingent or unknown liabilities could adversely affect our financial condition.

Our acquisition activities are subject to many risks. We may acquire properties that are subject to unknown or contingent liabilities, including liabilities for or with respect to liens attached to properties, unpaid real estate taxes, utilities or HOA charges for which a prior owner remains liable, clean-up or remediation of environmental conditions or code violations, claims of vendors or other persons dealing with the acquired properties and tax liabilities, among other things. In each case, our acquisition may be without any, or with only limited, recourse with respect to unknown or contingent liabilities or conditions. As a result, if any such liability were to arise relating to our properties, or if any adverse condition exists with respect to our properties that is in excess of our insurance coverage, we might have to pay substantial sums to settle or cure it, which could adversely affect us. The properties we acquire may also be subject to covenants, conditions or restrictions that restrict the use or ownership of such properties, including prohibitions on leasing or requirements to obtain the approval of HOAs prior to leasing. We may not discover such restrictions during the acquisition process and such restrictions may adversely affect our ability to operate such properties as we intend.

In addition, purchases of single-family homes acquired as part of a portfolio or in bulk purchases typically involve few or no representations or warranties with respect to the properties and may allow us limited or no recourse against the sellers of such properties. Such properties also often have unpaid tax, utility and HOA liabilities for which we may be obligated but fail to anticipate.

Costs of complying with governmental laws and regulations may reduce our income and cash available for distributions.

Real property and the operations conducted on real property are subject to federal, state and local laws and regulations relating to, among other things, environmental protection, human health and safety and access by persons with disabilities. We could be subject to liability in the form of fines or damages for noncompliance with these laws and regulations, even if we did not cause the events(s) resulting in liability.

Environmental Laws Generally.   Environmental laws and regulations generally govern wastewater discharges, air emissions, the operation and removal of underground and above-ground storage tanks, the use, storage, treatment, transportation and disposal of solid hazardous materials, the remediation of contaminated property associated with the disposal of solid and hazardous materials and other health and safety-related concerns. Some of these laws and regulations may impose joint and several liability on tenants, owners or operators of real property for the costs to investigate or remediate contaminated properties, regardless of fault, whether the acts causing the contamination were legal, regardless of whether the contamination was present prior to a purchaser’s acquisition of a property, and whether an owner knew of such contamination. The conditions of investments at the time we acquire them, operations in the vicinity of our investments, such as the presence of underground tanks, or activities of unrelated third parties may affect the value or performance of our investments.

Hazardous Substances.   The presence of hazardous substances on owned real estate owned by us, or the failure to properly remediate these substances, may hinder our ability to sell, rent or pledge investments as collateral for future borrowings. Any material expenditures, fines, or damages that we must pay will reduce our ability to make distributions to stockholders and may reduce the value of an investment in our common stock.

Other Regulations.   We may be required to operate our properties in compliance with fire and safety regulations, building codes and other land use regulations, as they may be adopted by governmental agencies and bodies and become applicable to our properties. We may be required to make substantial capital expenditures to comply with those requirements, and these expenditures could adversely affect our performance and ability to make distributions to stockholders.

We may obtain only limited warranties when we purchase a property and would have only limited recourse in the event our due diligence did not identify any issues that lower the value of our property.

The seller of a property often sells such property in its “as is” condition on a “where is” basis and “with all faults” without any warranties of merchantability or fitness for a particular use or purpose. In addition, purchase and sale agreements may contain only limited warranties, representations and

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indemnifications that will only survive for a limited period after the closing. The purchase of properties with limited warranties increases the risk that we may lose some or all of our invested capital in the property, as well as the loss of rental revenue from that property.

We may have difficulty selling real estate investments, and our ability to distribute all or a portion of the net proceeds from such sales to our stockholders may be limited.

Real estate investments are relatively illiquid, and, as a result, we may have a limited ability to sell our properties should the need arise. When we sell our properties, we may not realize gains on such sales. We may elect not to distribute any proceeds from the sales of properties to our stockholders; for example, we may use such proceeds to:

Our ability to sell our properties may also be limited by our need to avoid the 100% prohibited transactions tax that is imposed on gain recognized by a REIT from the sale of property characterized as dealer property. In order to ensure that we avoid such characterization, we may be required to hold our properties for a minimum period of time and comply with certain other requirements in the Code or dispose of our properties through our TRS, which will be subject to federal and state income taxation as a corporation.

Increases in property taxes could adversely affect the value of a property or our ability to hold the property long enough to realize the desired return on its investment.

Property taxes may increase as tax rates change and as the properties are assessed or reassessed by taxing authorities. As the owner of real estate properties, we will be responsible for payment of the taxes to the applicable government authorities. If real property taxes increase, we may or may not be able to raise rents to offset such increased taxes. Because such changes in property taxes are difficult to predict when a property is acquired, the financial results projected at the time of our investment may be realized during the period of our ownership and, therefore, cash flows and property values could be materially and negatively affected in a manner that we cannot foresee. If we fail to pay any such taxes, the applicable taxing authority may place a lien on the property and the property may be subject to a tax sale.

Our properties may be or become subject to condemnation or eminent domain proceedings.

A governmental authority could bring an eminent domain or inverse condemnation action against a property. Such an action could have a material adverse effect on the financial viability and marketability of that property, and, as a result, the results of our operations and our ability to make distributions to stockholders.

Risks Related to Our Organization and Structure

Provisions of our charter may limit the ability of a third party to acquire control of us by authorizing our Board of Directors to issue additional securities.

Our Board of Directors may, without stockholder approval, approve an amendment to our charter to increase or decrease the aggregate number of our shares or the number of shares of any class or series that we have the authority to issue and to classify or reclassify any unissued shares of our common or preferred stock, and set the preferences, rights and other terms of the classified or reclassified shares. As a result, our Board of Directors may authorize the issuance of additional shares or establish a series of common or preferred stock that may have the effect of delaying or preventing a change in control of our company, including transactions at a premium over the market price of our shares, even if stockholders believe that a change in control is in

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their interest. These provisions, along with the restrictions on ownership and transfer contained in our charter and certain provisions of Maryland law described below, could discourage unsolicited acquisition proposals or make it more difficult for a third party to gain control of us, which could adversely affect the market price of our securities. See “Certain Provisions of Maryland Law and of Our Charter and Bylaws.”

Provisions of Maryland law may limit the ability of a third party to acquire control of us by requiring our Board of Directors or stockholders to approve proposals to acquire our company or effect a change in control.

Certain provisions of the Maryland General Corporation Law, or the MGCL, applicable to Maryland corporations may have the effect of inhibiting a third party from making a proposal to acquire us or of impeding a change in control under circumstances that otherwise could provide our stockholders with the opportunity to realize a premium over the then-prevailing market price of their shares, including:

By resolution of our Board of Directors, we have opted out of the business combination provisions of the MGCL and provided that any business combination between us and any other person is exempt from the business combination provisions of the MGCL, provided that the business combination is first approved by our Board of Directors (including a majority of directors who are not affiliates or associates of such persons). In addition, pursuant to a provision in our bylaws, we have opted out of the control share provisions of the MGCL. However, our Board of Directors may by resolution elect to opt in to the business combination provisions of the MGCL, and we may, by amendment to our bylaws, opt in to the control share provisions of the MGCL at any time in the future, whether before or after an acquisition of control shares. See “Certain Provisions of Maryland Law and of Our Charter and Bylaws — Business Combinations” and “Certain Provisions of Maryland Law and of Our Charter and Bylaws — Control Share Acquisitions.”

Certain provisions of the MGCL permit our Board of Directors, without stockholder approval and regardless of what is currently provided in our charter or bylaws, to implement certain corporate governance provisions, some of which (for example, a classified board) are not currently applicable to us. These provisions may have the effect of limiting or precluding a third party from making an unsolicited acquisition

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proposal for us or of delaying, deferring or preventing a change in control of us under circumstances that otherwise could be in the best interests of our stockholders. Our charter contains a provision whereby we elect, at such time as we become eligible to do so, to be subject to the provisions of Title 3, Subtitle 8 of the MGCL relating to the filling of vacancies on our Board of Directors. See “Certain Provisions of Maryland Law and of Our Charter and Bylaws — Subtitle 8.”

Our rights and the rights of our stockholders to take action against our directors and officers are limited, which could limit your recourse in the event of actions not in your best interests.

Under Maryland law, generally, a director will not be liable if he or she performs his or her duties in good faith, in a manner he or she reasonably believes to be in our best interests and with the care that an ordinarily prudent person in a like position would use under similar circumstances. In addition, our charter limits the liability of our directors and officers to us and our stockholders for money damages, except for liability resulting from:

Our charter authorizes us to obligate ourselves to, and our bylaws require us to, indemnify our directors and officers for actions taken by them in those capacities to the maximum extent permitted by Maryland law. Our bylaws require us to indemnify each director and officer, to the maximum extent permitted by Maryland law, in the defense of any proceeding to which he or she is made, or threatened to be made, a party to, or witness in, by reason of his or her service to us. In addition, we may be obligated to advance the defense costs incurred by our directors and officers. As a result, we and our stockholders may have more limited rights against our directors and officers than might otherwise exist absent the current provisions in our charter and bylaws or that might exist with other companies. See “Certain Provisions of Maryland Law and of Our Charter and Bylaws — Limitation of Directors’ and Officers’ Liability and Indemnification.”

Our charter contains provisions that make removal of our directors difficult, and the employment agreements we have with some of our executives contain severance provisions that make termination of their employment under certain circumstances expensive for us, which could make it difficult for our stockholders to effect changes to our Board of Directors and our management.

Our charter provides that a director may be removed only for cause (as defined in our charter) and then only by the affirmative vote of holders of shares entitled to cast at least two-thirds of all the votes entitled to be cast generally in the election of directors. Our charter also provides that vacancies on our Board of Directors may be filled only by a majority of the remaining directors in office, even if less than a quorum. These requirements prevent stockholders from removing directors except for cause and with a substantial affirmative vote and from replacing directors with their own nominees and may prevent a change in control of our company that is in the best interests of our stockholders.

We have entered into employment agreements with each of our executive officers containing severance provisions that could make it difficult and costly for us to terminate their employment. For additional information, see “Management — Employment Agreements.”

Our Board of Directors may change our investment strategy, financing strategy or leverage policies, or any of our other major policies, without the consent of stockholders.

Our Board of Directors determines our major strategies and policies, including policies and guidelines relating to our acquisitions and divestitures, asset allocation, leverage, financing, growth, operations, indebtedness and distributions to stockholders. Our Board of Directors may amend or revise these and other policies and guidelines from time to time without the vote or consent of our stockholders, which could result in our acquiring properties that are different from, and possibly riskier than, the types of single-family residential real estate and related investments described in this prospectus. Accordingly, our stockholders will have limited control over changes in our policies, and those changes could adversely affect our business, results of operations, financial condition and cash flows and our ability to make distributions to our stockholders.

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We may structure acquisitions of property in exchange for OP units on terms that could limit our liquidity or our flexibility.

We may acquire properties by issuing OP units in exchange for a property owner contributing property to the operating partnership. If we enter into such transactions, in order to induce the contributors of such properties to accept OP units, rather than cash, in exchange for their properties, it may be necessary for us to provide them additional incentives. For instance, our operating partnership’s limited partnership agreement provides that any holder of units may exchange limited partnership units for cash equal to the value of an equivalent number of shares of our common stock or, at our option, for shares of our common stock on a one-for-one basis. We may, however, enter into additional contractual arrangements with contributors of property under which we would agree to repurchase a contributor’s units for shares of our common stock or cash, at the option of the contributor, at set times. If the contributor required us to repurchase units for cash pursuant to such a provision, it would limit our liquidity and thus our ability to use cash to make other investments, satisfy other obligations or make distributions to stockholders. Moreover, if we were required to repurchase units for cash at a time when we did not have sufficient cash to fund the repurchase, we might be required to sell one or more properties to raise funds to satisfy this obligation. Furthermore, we might agree that if distributions the contributor received as a limited partner in our operating partnership did not provide the contributor with a defined return, then upon redemption of the contributor’s units we would pay the contributor an additional amount necessary to achieve that return. Such a provision could further negatively impact our liquidity and flexibility. Finally, in order to allow a contributor of a property to defer taxable gain on the contribution of property to our operating partnership, we might agree not to sell a contributed property for a defined period of time or until the contributor exchanged the contributor’s units for cash or shares. Such an agreement would prevent us from selling those properties, even if market conditions made such a sale favorable to us.

If our operating partnership fails to qualify as a partnership for federal income tax purposes, we could fail to qualify as a REIT and suffer other adverse consequences.

We believe that our operating partnership is organized and will be operated in a manner so as to be treated as a partnership and not an association or a publicly traded partnership taxable as a corporation, for U.S. federal income tax purposes. As a partnership, our operating partnership will not be subject to U.S. federal income tax on its income. Instead, each of the partners will be allocated its share of our operating partnership’s income. No assurance can be provided, however, that the IRS will not challenge our operating partnership’s status as a partnership for U.S. federal income tax purposes, or that a court would not sustain such a challenge. If the IRS were successful in treating our operating partnership as an association or publicly traded partnership taxable as a corporation for U.S. federal income tax purposes, we would fail to meet the gross income tests and certain of the asset tests applicable to REITs and, accordingly, would not qualify as a REIT. Also, the failure of the operating partnership to qualify as a partnership would cause it to become subject to U.S. federal corporate income tax, which would reduce significantly the amount of its cash available for distribution to its partners, including us.

Risks Related to Qualification and Operation as a REIT

Failure to qualify as a REIT could adversely affect our operations and our ability to make distributions.

We intend to elect to be treated as a REIT for U.S. federal income tax purposes. However, there can be no assurance that we will be successful in obtaining and maintaining REIT status. Our ability to qualify as a REIT will depend on our satisfaction of numerous requirements (some on an annual and quarterly basis) established under highly technical and complex provisions of the Code, for which there may be only limited judicial or administrative interpretations. Qualification and maintenance of REIT status involves the determination of various factual matters and circumstances not entirely within our control. No assurance can be given that legislation, new regulations, administrative interpretations or court decisions will not change the tax laws with respect to qualification as a REIT or the U.S. federal income tax consequences of that qualification.

If we were to fail to qualify as a REIT for any taxable year, we would be subject to U.S. federal income tax on our taxable income at corporate rates (currently 35%). In addition, we would generally be disqualified

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from treatment as a REIT for the four taxable years following the year in which we lose our REIT status. Losing our REIT status would reduce our net earnings available for investment or distribution to stockholders because of the additional tax liability. In addition, distributions to stockholders would no longer be deductible in computing our taxable income and we would no longer be required to make distributions. To the extent that distributions had been made in anticipation of our qualifying as a REIT, we might be required to borrow funds or liquidate some investments in order to pay the applicable corporate income tax. In addition, although we intend to elect for qualification as a REIT, it is possible that future economic, market, legal, tax, or other considerations may cause our Board of Directors to determine that it is no longer in our best interest to be qualified as a REIT and recommend that we do not proceed with our proposed REIT election or otherwise revoke our REIT election.

To qualify as a REIT, we must meet annual distribution requirements, which may result in us distributing amounts that may otherwise be used for our operations.

To obtain the favorable tax treatment accorded to REITs, we normally will be required each year to distribute to our stockholders at least 90% of our REIT taxable income, determined without regard to the deduction for distributions paid and by excluding net capital gains. We will be subject to U.S. federal income tax on our undistributed taxable income and net capital gain and to a 4% nondeductible excise tax on any amount by which distributions we pay with respect to any calendar year are less than the sum of 85% of our ordinary income, 95% of our capital gain net income and 100% of our undistributed income from prior years. These requirements could cause us to distribute amounts that otherwise would be spent on acquisitions of properties and it is possible that we might be required to borrow funds or sell assets to fund these distributions. It is possible that we might not always be able to continue to make distributions sufficient to meet the annual distribution requirements required to maintain our REIT status, avoid corporate tax on undistributed income and/or avoid the 4% excise tax.

From time to time, we may generate taxable income greater than our taxable income for financial reporting purposes, or differences in timing between the recognition of taxable income and the actual receipt of cash may occur. If we do not have other funds available in these situations, we could be required to borrow funds on unfavorable terms, sell investments at disadvantageous prices or distribute amounts that would otherwise be invested in future acquisitions to make distributions sufficient to enable us to pay out enough of our taxable income to satisfy the REIT distribution requirement and to avoid corporate income tax and the 4% excise tax in a particular year. These alternatives could increase our costs or reduce our equity. Thus, compliance with the REIT requirements may hinder our ability to grow, which could adversely affect our value.

Distributions to tax-exempt investors may be classified as unrelated business taxable income.

Neither ordinary nor capital gain distributions with respect to our common stock nor gain from the sale of common stock should generally constitute unrelated business taxable income to a tax-exempt investor. However, there are certain exceptions to this rule. In particular:

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The prohibited transactions tax may limit our ability to dispose of our properties.

A REIT’s net income from prohibited transactions is subject to a 100% tax. In general, prohibited transactions are sales or other dispositions of property other than foreclosure property held primarily for sale to customers in the ordinary course of business. We may be subject to the prohibited transactions tax in an amount equal to 100% of net gain upon a disposition of real property. Although a safe harbor to the characterization of the sale of real property by a REIT as a prohibited transaction is available, we cannot assure you that we will be able to comply with the safe harbor or that we will avoid owning property that may be characterized as held primarily for sale to customers in the ordinary course of business. Consequently, we may choose not to engage in certain sales of our properties or may conduct such sales through a taxable REIT subsidiary (our TRS), which would be subject to federal and state income taxation as a corporation. For example, if we decide to acquire properties opportunistically to restore in anticipation of immediate resale, we will need to conduct that activity through our TRS to avoid the 100% prohibited transactions tax. No assurance can be given, however, that the U.S. Internal Revenue Service (the IRS) will respect the transaction by which any such properties are contributed to our TRS, and, even if the contribution transaction is respected, our TRS may incur a significant tax liability as a result of any such sales.

We may pay taxable dividends of our common stock and cash, in which case stockholders may sell shares of our common stock to pay tax on such dividends, placing downward pressure on the market price of our common stock.

We may distribute taxable dividends that are payable in cash and common stock at the election of each stockholder. The IRS has issued private letter rulings to other REITs treating certain distributions that are paid partly in cash and partly in stock as taxable dividends that would satisfy the REIT annual distribution requirement and qualify for the dividends paid deduction for federal income tax purposes. Those rulings may be relied upon only by taxpayers to whom they were issued, but we could request a similar ruling from the IRS. Accordingly, it is unclear whether and to what extent we will be able to make taxable dividends payable in cash and common stock.

If we made a taxable dividend payable in cash and common stock, taxable stockholders receiving such dividends will be required to include the full amount of the dividend as ordinary income to the extent of our current and accumulated earnings and profits, as determined for federal income tax purposes. As a result, stockholders may be required to pay income tax with respect to such dividends in excess of the cash dividends received. If a U.S. stockholder sells the common stock that it receives as a dividend in order to pay this tax, the sales proceeds may be less than the amount included in income with respect to the dividend, depending on the market price of our common stock at the time of the sale. Furthermore, with respect to certain non-U.S. stockholders, we may be required to withhold federal income tax with respect to such dividends, including in respect of all or a portion of such dividend that is payable in common stock. If we made a taxable dividend payable in cash and our common stock and a significant number of our stockholders determine to sell shares of our common stock in order to pay taxes owed on dividends, it may be viewed as economically equivalent to a dividend reduction and put downward pressure on the market price of our common stock. We do not currently intend to pay taxable dividends in the form of our common stock and cash, although we may choose to do so in the future.

Our ownership of our TRS is subject to limitations, and our transactions with our TRS will cause us to be subject to a 100% penalty tax on certain income or deductions if those transactions are not conducted on arm’s-length terms.

Overall, no more than 25% of the value of a REIT’s assets may consist of stock or securities of one or more taxable REIT subsidiaries. In addition, the Code limits the deductibility of interest paid or accrued by a taxable REIT subsidiary to its parent REIT to assure that the taxable REIT subsidiary is subject to an appropriate level of corporate taxation. The Code also imposes a 100% excise tax on REITs for certain transactions between a taxable REIT subsidiary and its parent REIT that are not conducted on an arm’s-length basis. Furthermore, we monitor the value of our respective investments in our TRS for the purpose of ensuring compliance with taxable REIT subsidiary ownership limitations and structure our transactions with our TRS on terms that we believe are arm’s length to avoid incurring the 100% excise tax described above.

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There can be no assurance, however, that we will be able to comply with the 25% REIT subsidiaries limitation or to avoid application of the 100% excise tax.

You may be restricted from acquiring or transferring certain amounts of our common stock.

The stock ownership restrictions of the Code for REITs and the 9.8% stock ownership limits in our charter may inhibit market activity in our capital stock and restrict our business combination opportunities.

In order to qualify as a REIT for each taxable year after 2014, five or fewer individuals, as defined in the Code, may not own, beneficially or constructively, more than 50% in value of our issued and outstanding stock at any time during the last half of a taxable year. Attribution rules in the Code determine if any individual or entity beneficially or constructively owns our capital stock under this requirement. Additionally, at least 100 persons must beneficially own our capital stock during at least 335 days of a taxable year for each taxable year after 2014. To help insure that we meet these tests, our charter restricts the acquisition and ownership of shares of our capital stock.

Our charter, with certain exceptions, authorizes our directors to take such actions as are necessary and desirable to preserve our qualification as a REIT. Unless exempted by our Board of Directors, our charter prohibits any person from beneficially or constructively owning more than 9.8% in value or number of shares, whichever is more restrictive, of our outstanding shares of common stock or more than 9.8% in value or number of shares, whichever is more restrictive, of the aggregate outstanding shares of all classes and series of our capital stock. Our Board of Directors may not grant an exemption from these restrictions to any proposed transferee whose ownership in excess of 9.8% of the value of our outstanding shares would result in our failing to qualify as a REIT. These restrictions on ownership and transfer will not apply, however, if our Board of Directors determines that it is no longer in our best interest to continue to qualify as a REIT or that compliance with the restrictions is no longer necessary in order for us to qualify as a REIT.

Complying with REIT requirements may cause us to forgo otherwise attractive opportunities.

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

Complying with the REIT requirements may force us to liquidate otherwise attractive investments.

To qualify as a REIT, we must ensure that at the end of each calendar quarter, at least 75% of the value of our assets consists of cash, cash items, government securities and qualified REIT real estate assets. The remainder of our investments (other than governmental securities and qualified real estate assets) generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer. In addition, in general, no more than 5% of the value of our assets (other than government securities and qualified real estate assets) can consist of the securities of any one issuer, and no more than 25% of the value of our total securities can be represented by securities of one or more taxable REIT subsidiaries. If we fail to comply with these requirements at the end of any calendar quarter, we must correct such failure within 30 days after the end of the calendar quarter to avoid losing our REIT status and suffering adverse tax consequences. As a result, we may be required to liquidate otherwise attractive investments.

Dividends payable by REITs do not qualify for the reduced tax rates available for some dividends.

The maximum tax rate applicable to “qualified dividend income” payable to U.S. stockholders that are taxed at individual rates is 20%. Dividends payable by REITs, however, generally are not eligible for the reduced rates on qualified dividend income. The more favorable rates applicable to regular corporate qualified dividends could cause investors who are taxed at individual rates to perceive investments in REITs to be relatively less attractive than investments in the stocks of non-REIT corporations that pay dividends, which could adversely affect the value of the shares of REITs, including our common stock.

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Liquidation of assets may jeopardize our REIT status.

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

Qualifying as a REIT involves highly technical and complex provisions of the Code.

Qualification as a REIT involves the application of highly technical and complex Code provisions for which only limited judicial and administrative authorities exist. Even a technical or inadvertent violation could jeopardize our proposed REIT qualification. Our qualification as a REIT will depend on our satisfaction of certain asset, income, organizational, distribution, stockholder ownership and other requirements on a continuing basis. In addition, our ability to satisfy the requirements to qualify as a REIT depends in part on the actions of third parties over which we have no control or only limited influence, including in cases where we own an equity interest in an entity that is classified as a partnership for U.S. federal income tax purposes.

Foreign investors may be subject to FIRPTA on the sale of common stock if we are unable to qualify as a domestically controlled REIT.

A foreign person disposing of a U.S. real property interest, including shares of a U.S. corporation whose assets consist principally of U.S. real property interests, is generally subject to a tax known as the Foreign Investment in Real Property Tax Act (“FIRPTA”) on the gain recognized on the disposition. FIRPTA does not apply, however, to the disposition of stock in a REIT if the REIT is a domestically controlled REIT. A domestically controlled REIT is a REIT in which, at all times during a specified testing period, less than 50% in value of its shares is held directly or indirectly by non-U.S. holders. There can be no assurance that we will qualify as a domestically controlled REIT. If we were to fail to so qualify, gain realized by a foreign investor on a sale of our common stock would be subject to FIRPTA unless our common stock was traded on an established securities market and the foreign investor did not at any time during a specified testing period directly or indirectly own more than five percent of the value of our outstanding common stock. We are not currently traded on an established securities market.

We may be subject to adverse legislative or regulatory tax changes that could reduce the market price of our common stock.

At any time, the federal income tax laws governing REITs or the administrative interpretations of those laws may be amended. We cannot predict when or if any new federal income tax law, regulation or administrative interpretation, or any amendment to any existing federal income tax law, regulation or administrative interpretation, will be adopted, promulgated or become effective, and any such law, regulation, or interpretation may take effect retroactively. We and our stockholders could be adversely affected by any such change in the federal income tax laws, regulations or administrative interpretations.

Risks Related to This Offering and Ownership of Our Common Stock

The availability and timing of our anticipated cash distributions are uncertain.

We are generally required to distribute to our stockholders at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gain, each year in order for us to qualify as a REIT under the Code, which requirement we currently intend to satisfy through quarterly cash distributions of all or substantially all of our REIT taxable income in such year, subject to certain adjustments. Although we intend to pay quarterly cash dividends at the level described in the “Distribution Policy” section of this prospectus, our ability to make distributions may be adversely affected by a number of factors, including the risk factors described in this prospectus.

We intend to maintain our initial distribution rate for the 12-month period ending     , however, ultimately our Board of Directors will determine the amount and timing of any distributions. In making such determinations, our directors will consider all relevant factors, including the amount of cash available for distribution, capital expenditures, general operational requirements and restrictions under applicable law. We

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bear all expenses incurred by our operations, and the funds generated by our operations, after deducting these expenses, may not be sufficient to cover desired levels of distributions to our stockholders. In addition, our Board of Directors, in its discretion, may retain any portion of such cash in excess of our REIT taxable income for working capital. We cannot assure you how long it may take to generate sufficient available cash flow to fund distributions, nor can we assure you that sufficient cash will be available to make distributions to you. With a limited operating history, we may be unable to make, maintain or increase distributions over time.

There are many factors that can affect the availability and timing of cash distributions to stockholders. Because we may receive rents and income from our properties at various times during our fiscal year, distributions paid may not reflect our income earned in that particular distribution period. The amount of cash available for distribution will be affected by many factors, including without limitation, the amount of time it takes for us to deploy the net proceeds from this offering into our target assets, the amount of income we will earn from those investments, the amount of our operating expenses and many other variables. Actual cash available for distribution may vary substantially from our expectations.

While we intend to fund the payment of quarterly distributions to our stockholders entirely from distributable cash flows, we may fund our quarterly distributions to our stockholders from a combination of available net cash flows, equity capital and proceeds from borrowings. In the event we are unable to consistently fund future quarterly distributions to our stockholders entirely from distributable cash flows, the value of our shares may be negatively impacted.

Certain of our existing stockholders affiliated with Mr. Xiaofan Bai have substantial influence over our company, and their interests may not be aligned with the interests of our other stockholders.

Prior to this offering, three of our stockholders affiliated with Mr. Xiaofan Bai collectively own approximately 89.5% of our outstanding voting securities, and together with the shares held directly by Mr. Xiaofan Bai, represent approximately 89.6% of our outstanding voting securities. These three stockholders are private equity funds managed and controlled by Mr. Xiaofan Bai, a member of our Board of Directors. Although this ownership interest will decrease to     % as a result of this offering, assuming that we raise the full amount offered hereby, it will still represent a significant concentration of ownership in our company. As a result, Mr. Bai has significant influence over our business, including decisions regarding mergers, consolidations and the sale of all or substantially all of our assets, election of directors, and other significant corporate actions. This concentration of ownership may also have the effect of discouraging, delaying or preventing a future change of control, which could deprive our stockholders of an opportunity to receive a premium for their shares as part of a sale of our company and might reduce the price of our shares. In addition, Ms. Guojuan Cheng, a member of our Board of Directors, is the mother of Mr. Xiaofan Bai and the aunt of Mr. Xiaohang Bai, a member of our Board of Directors, and Mr. Xiaofan Bai and Mr. Xiaohang Bai are cousins.

The NASDAQ or another nationally recognized stock exchange may not list our securities, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.

We intend to apply to list our common stock on the NASDAQ Capital Market under the symbol “RVEN.” There can be no assurance that our listing application will be accepted by the NASDAQ Capital Market. Even if our listing application is accepted, in order to remain listed, we will be required to meet the continued listing requirements of the NASDAQ Capital Market or, in the alternative, any other nationally recognized exchange to which we may apply. We may be unable to satisfy these listing requirements, and there is no guarantee that our common stock will remain listed on a nationally recognized exchange. If after listing, our common stock is delisted from the NASDAQ Capital Market or any other nationally recognized stock exchange, we could face significant material adverse consequences, including:

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An active trading market for our common stock may never develop following this offering.

Prior to this offering, trading in our common stock on the OTCQB Marketplace has been limited and sporadic. An active trading market for our common stock may never develop or be sustained, which may affect your ability to sell your common stock and could depress the market price of your common stock. We intend to apply to list our common stock on the NASDAQ under the symbol “RVEN.” There can be no assurance that our listing application will be accepted by the NASDAQ. Listing on the NASDAQ would not ensure that an actual market will develop for our common stock. As a result, no assurances can be given that you will be able to readily sell your common stock at a price equal to or above the price you paid.

There can be no assurance that we will ever provide liquidity to our investors through a sale of our company.

Potential investors are cautioned that no assurances can be given that any form of merger, combination, or sale of our company or any of our real estate assets will take place following this offering, or that any merger, combination, or sale, even if consummated, would provide liquidity or a profit for our investors following this offering. You should not invest in our company with the expectation that we will be able to sell our company or any of our assets in order to provide liquidity or a profit for our investors.

The trading and price of our common stock may be volatile and could decline substantially following this offering.

The offering price to the public will be determined through negotiations between us and the representative of the underwriters and may bear no relationship to the price at which the common stock will trade upon completion of this offering. Further, the stock markets, including the NASDAQ, have experienced significant price and volume fluctuations. As a result, the market price of our common stock is likely to be similarly volatile, and investors in our common stock may experience a decrease in the value of their shares, including decreases unrelated to our operating performance or prospects. The price of our common stock could be subject to wide fluctuations in response to a number of factors, including those listed in this “Risk Factors” section of this prospectus, and others such as:

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If the market price of our common stock declines significantly, you may be unable to resell your shares at or above the public offering price. We cannot assure you that the market price of our common stock will not fluctuate or decline significantly.

There may be limitations on the effectiveness of our internal controls, and a failure of our control systems to prevent error or fraud may materially harm our company.

Proper systems of internal controls over financial reporting are critical to the operation of a public company. As we are a start-up company that has been operating as a public company for a relatively short period of time, we are at the early stages of establishing, and we may be unable to effectively establish, such systems. Specifically, we have limited segregation of duties within our accounting functions due to our having only two employees and believed this limited segregation of duties to be a significant deficiency in our internal controls over financial reporting. Due to our size and nature, segregation of all duties may not always be possible and may not be economically feasible, although we intend to hire internal financial and accounting personnel as our company grows. Failure to effectively establish such systems would leave us without the ability to reliably assimilate and compile financial information about our company and significantly impair our ability to prevent error and detect fraud, all of which would have a negative impact on our company from many perspectives.

Moreover, we do not expect that internal controls over financial reporting, even if established, will prevent all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Failure of our control systems to prevent error or fraud could materially adversely impact us.

Exercise of stock options and outstanding warrants will dilute your percentage of ownership and could cause our stock price to decline.

As of May 23, 2014, we have outstanding warrants to purchase an aggregate of 5,271,760 shares of common stock. The warrants are exercisable at $0.20 per share and were issued to the investors in our October 2012 and January 2013 convertible note financings. Exercise of any of these warrants would result in our issuing a significant number of additional shares of common stock. Additionally, we may issue stock options, restricted stock award, and other stock-based award of up to 32,025,000 shares of common stock under our Amended and Restated 2012 Incentive Compensation Plan (the “2012 Plan”). In the future, we may grant additional stock options, warrants and convertible securities. The exercise, conversion or exchange of stock options, warrants or convertible securities will dilute the percentage ownership of our other stockholders. Sales of a substantial number of shares of our common stock could cause the price of our common stock to decline and could impair our ability to raise capital by selling additional securities.

Reports published by analysts, including projections in those reports that exceed our actual results, could adversely affect our common stock price and trading volume.

Securities research analysts, including those affiliated with our underwriters, may establish and publish their own periodic projections for our business. These projections may vary widely and may not accurately predict the results we actually achieve. Our stock price may decline if our actual results do not match the projections of these securities research analysts. Similarly, if one or more of the analysts who write reports on us downgrades our stock or publishes inaccurate or unfavorable research about our business, our stock price could decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, our stock price or trading volume could decline. If no analysts commence coverage of us, the trading price for our stock and the trading volume could be adversely affected.

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You will experience immediate and substantial dilution from the purchase of our common stock sold in this offering.

The per-share offering price to public of our common stock is higher than what our net tangible book value per share will be immediately after this offering. Accordingly, purchasers of our common stock in this offering will incur immediate dilution of approximately $    , or     %, per share, based on the price set forth on the front cover page of this prospectus.

Future sales of our common stock or other securities convertible into our common stock could cause the market price of our common stock to decline and could result in the dilution of your shares.

Our Board of Directors is authorized, without your approval, to cause us to issue additional shares of our common stock (including equity or debt securities convertible into common stock) or to raise capital through the issuance of preferred stock, options, warrants and other rights, on terms and for consideration as our Board of Directors in its sole discretion may determine. Sales of substantial amounts of our common stock could cause the market price of our common stock to decrease significantly. To the extent the proceeds of any future equity offering are invested in residential assets that have less favorable yield characteristics than our then-existing portfolio, our stockholders will suffer dilution in their yield and distributable cash per share. We cannot predict the effect, if any, of future sales of our common stock, or the availability of our common stock for future sales, on the market price of our common stock. Sales of substantial amounts of our common stock, or the perception that such sales could occur, may adversely affect the market price of our common stock.

Each of our officers and directors and any other holder(s) of 1.5% or more of the outstanding shares of our common stock as of the date of this prospectus (and all holders of securities exercisable for or convertible into shares of our common stock) has entered into a lock-up agreement with respect to shares of our common stock and securities exchangeable or exercisable for shares of our common stock, restricting the direct or indirect sale of such securities for 270 days after the date of this prospectus without the prior written consent of the representatives of the underwriters of this offering. We have agreed not to waive or otherwise modify this agreement without the prior written consent of the representatives of the underwriters of this offering. The representatives of the underwriters of this offering may, at any time, release, or authorize us to release, as the case may be, all or a portion of our common stock subject to the foregoing lock-up provisions. If the restrictions under the lock-up agreements are waived, shares of our common stock may become available for sale into the market, subject to applicable law, which could reduce the market price for our common stock.

If our shares of common stock became subject to the penny stock rules, it would become more difficult to trade our shares.

The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or authorized for quotation on certain automated quotation systems, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. If we do not achieve or maintain a listing on NASDAQ and if the price of our common stock is less than $5.00, our common stock will be deemed a penny stock. The penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document containing specified information. In addition, the penny stock rules require that before effecting any transaction in a penny stock not otherwise exempt from those rules, a broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive (i) the purchaser’s written acknowledgement of the receipt of a risk disclosure statement; (ii) a written agreement to transactions involving penny stocks; and (iii) a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our common stock, and therefore stockholders may have difficulty selling their shares.

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Future offerings of debt securities, which would rank senior to our common stock upon our bankruptcy or liquidation, and future offerings of equity securities that may be senior to our common stock for the purposes of dividend and liquidating distributions, may adversely affect the market price of our common stock.

In the future, we may attempt to increase our capital resources by making offerings of debt securities or additional offerings of equity securities. Upon bankruptcy or liquidation, holders of our debt securities and shares of preferred stock and lenders with respect to other borrowings will receive a distribution of our available assets prior to the holders of our common stock. Our preferred stock, if issued, could have a preference on liquidating distributions or a preference on dividend payments or both that could limit our ability to pay a dividend or other distribution to the holders of our common stock. Our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control. As a result, we cannot predict or estimate the amount, timing or nature of our future offerings, and purchasers of our common stock in this offering bear the risk of our future offerings reducing the market price of our common stock and diluting their ownership interest in our company.

An increase in market interest rates may have an adverse effect on the market price of our common stock and our ability to make distributions to our stockholders.

One of the factors that investors may consider in deciding whether to buy or sell shares of our common stock is our distribution rate as a percentage of our share price, relative to market interest rates. If market interest rates increase, prospective investors may demand a higher distribution rate on shares of our common stock or seek alternative investments paying higher distributions or interest. As a result, interest rate fluctuations and capital market conditions can affect the market price of shares of our common stock. For instance, if interest rates rise without an increase in our distribution rate, the market price of shares of our common stock could decrease because potential investors may require a higher distribution yield on shares of our common stock as market rates on our interest-bearing instruments such as bonds rise. In addition, to the extent we have variable rate debt, rising interest rates would result in increased interest expense on our variable rate debt, thereby adversely affecting our cash flow and our ability to service our indebtedness and make distributions to our stockholders.

ERISA imposes additional obligations on us.

In considering an investment in our common stock, trustees, custodians, investment managers, and fiduciaries of retirement and other plans subject to the fiduciary responsibility provisions of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or the prohibited transaction provisions of Section 4975 of the Code (including IRAs), should consider among other things: (i) whether an investment in the common stock is in accordance with plan documents and satisfies the diversification requirements of Section 404(a) of ERISA, if applicable; (ii) whether an investment in the common stock will result in unrelated business taxable income to the plan; (iii) whether the investment is prudent under Section 404(a) of ERISA, if applicable; and (iv) whether we or any of our affiliates is a fiduciary or party in interest to the plan. Fiduciaries and other persons responsible for the investment of certain governmental and church plans that are subject to any provision of federal, state, or local law that is substantially similar to the fiduciary responsibility provisions of Title I of ERISA or the prohibited transaction provisions of Section 4975 of the Code that are considering the purchase of the common stock should consider the applicability of the provisions of such similar law and whether the common stock would be an appropriate investment under such similar law. The responsible fiduciary must take into account all of the facts and circumstances of the plan and of the investment when determining if a particular investment satisfies its fiduciary responsibility under ERISA. Other investors must consider the potential impact that benefit plan investments could have on our operations. See “Material U.S. Federal Income Tax Considerations” and “ERISA Considerations.”

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The forward-looking statements are based on our beliefs, assumptions and expectations of future events, taking into account all information currently available to us. Forward-looking statements are not guarantees of future events or of our performance. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us. Some of these events and factors are described in this prospectus under the headings “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Our Business and Investments.” If a change occurs, our business, financial condition, liquidity, cash flows and results of operations may vary materially from those expressed in or implied by our forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made. New risks and uncertainties arise over time, and it is not possible for us to predict the occurrence of those matters or the manner in which they may affect us. Except as required by law, we are not obligated to, and do not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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DISTRIBUTION POLICY

We intend to pay regular quarterly dividends to holders of our common stock. We intend to pay a pro rata initial dividend with respect to the period commencing on the completion of this offering and ending     , based on $      per share for a full quarter. On an annualized basis, this would be $      per share (of which we currently estimate 100% may represent a return of capital for tax purposes), or an annual distribution rate of approximately     %, based on an assumed public offering price of $      . We estimate that     % of the cash we will distribute to our common stockholders for the      months ending      will be generated from our cash from operations. In the event that we are unable to generate sufficient cash from operations to make our anticipated distributions to shareholders, to the extent available, we may use the proceeds from this offering or from other sources to make such distributions.

Our intended initial annual distribution rate has been established based on our estimate of cash available for distribution for the      months ending     , which we have calculated based on adjustments to our pro forma net income for the      months ended      (after giving effect to the offering). This estimate was based on our pro forma operating results and does not take into account our growth strategy, nor does it take into account any unanticipated expenditures we may have to make or any debt we may have to incur. In estimating our cash available for distribution for the      months ending      , we have made certain assumptions as reflected in the table and footnotes below.

Although we believe we will have sufficient cash available to us for distribution for the      months following the closing of this offering, it is possible that we will use a portion of the proceeds from this offering or other investment capital to make such distributions.

Our estimate of cash available for distribution does not include the effect of any changes in our working capital resulting from changes in our working capital accounts. Our estimate also does not reflect the amount of cash estimated to be used for investing activities for acquisitions or other activities, other than a reserve for recurring capital expenditures and amounts estimated for leasing commissions and tenant improvements for renewing space.

Because we have made the assumptions set forth above and in the footnotes below in estimating cash available for distribution, we do not intend this estimate to be a projection or forecast of our actual results of operations or our liquidity, and we have estimated cash available for distribution for the sole purpose of determining the amount of our initial annual distribution rate. Our estimate of cash available for distribution should not be considered as an alternative to cash flow from operating activities (computed in accordance with accounting principles generally accepted in the United States of America (“GAAP”)) or as an indicator of our liquidity or our ability to pay dividends or make other distributions. In addition, the methodology upon which we made the adjustments described below is not necessarily intended to be a basis for determining future dividends or other distributions.

We intend to maintain our initial distribution rate for the     -month period ending      , unless actual results of operations, economic conditions or other factors differ materially from the assumptions used in our estimate. Dividends and other distributions made by us will be authorized by our Board of Directors in its sole discretion out of funds legally available for distribution to our stockholders and will be dependent upon a number of factors. The timing, form and amount of distributions we make to our stockholders will be at the discretion of our Board of Directors and will depend upon our financial condition, cash flows, liquidity, FFO, results of operations, economic conditions, the requirements for taxation as a REIT, compliance with covenants to which we may be contractually subject to, applicable provisions of Maryland corporate law and such other factors as our board of directors deems relevant. We believe that our estimate of cash available for distribution constitutes a reasonable basis for setting the initial distribution rate; however, there is a risk that the estimate will not prove accurate, and actual distributions may therefore be significantly different from the expected distributions.

There is a risk that our estimated dividends will not be made or sustained as contemplated or that our Board of Directors will change our distribution policy in the future and that we cease making such distributions. Any dividends or other distributions we pay in the future will depend upon our actual results of operations, economic conditions, any debt service requirements and other factors (including those described above) that could differ materially from our expectations. Our actual results of operations will be affected by a

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number of factors, including the revenue we receive from our portfolio, our operating expenses, interest expense, the ability of our tenants to meet their obligations and unanticipated expenditures. For more information regarding risk factors that could materially adversely affect our actual results of operations, please see “Risk Factors.”

Federal income tax law requires that a REIT distribute annually at least 90% of its REIT taxable income, excluding net capital gains, and that it pay tax at regular corporate rates to the extent that it annually distributes less than 100% of its REIT taxable income including capital gains. In addition, a REIT will be required to pay a 4% nondeductible excise tax on the amount, if any, by which the distributions it makes in a calendar year are less than the sum of 85% of its ordinary income, 95% of its capital gain net income and 100% of its undistributed income from prior years. For more information, please see “Material U.S. Federal Income Tax Considerations.” We anticipate that our estimated cash available for distribution will be sufficient to enable us to meet the annual distribution requirements applicable to REITs and to avoid or minimize the imposition of corporate and excise taxes. However, under some circumstances, we may be required to pay distributions in excess of cash available for distribution in order to meet these distribution requirements or to avoid or minimize the imposition of tax and we may need to borrow funds to make some distributions.

Our charter allows us to issue preferred stock that could have a preference on distributions. We currently have no intention to issue any preferred stock, but, if we do, the distribution preference on the preferred stock could limit our ability to make distributions to the holders of our common stock.

The following table describes our pro forma net income (loss) for the twelve months ended December 31, 2013, and the adjustments we have made thereto in order to estimate (subject to the assumptions and risks set forth in this section and elsewhere in this prospectus) our initial cash available for distribution for the twelve months ended December 31, 2014:

Pro forma net income, for the twelve months ended December 31, 2013		$	92,495
Add: Pro forma real estate depreciation and amortization			411,070
Add (Deduct) December 31, 2014 operating activity adjustments			—
Estimated cash flow from operating activities for the twelve months ended December 31, 2014		$	503,565
Total estimated initial annual distributions to stockholders		$
Estimated initial annual distributions per share
Payout ratio based on our share of estimated cash available for distribution			%

Historical and Pro Forma Financial Information

The following unaudited historical and pro forma information should be read in conjunction with our consolidated financial statements as of March 31, 2014 and December 31, 2013 included elsewhere in this prospectus.

The following unaudited pro forma condensed consolidated balance sheet as of March 31, 2014 and consolidated statement of operations for the year ended December 31, 2013 have been prepared to give effect to our acquisition of the 18 home Houston portfolio on January 31, 2014 and the 150 home Houston portfolio on October 31, 2013. The pro forma condensed consolidated balance sheet shows the effect of our subsequent follow-on private placement for the issuance of 43,000,000 shares of common stock for gross proceeds of $8,600,000. The pro forma consolidated statements of operations assume that each acquisition occurred on January 1, 2013. The consolidated statement of operations for December 31, 2013 is also adjusted for interest and amortization of discount on the Company’s convertible debt that was retired on September 27, 2013, as these capital costs will not be recurring.

The adjustments to our pro forma consolidated financial statements are based on available information and assumptions that we consider reasonable. Our pro forma consolidated financial statements do not purport to represent (1) the results of our operations that would have actually occurred had the acquisitions of the 150 and 18 home Houston portfolios occurred on January 1, 2013 or (2) an estimate of the results of our operations as of any future date or for any future period, as applicable.

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Historical and Pro Forma Balance Sheet Information

Reven Housing REIT, Inc and Subsidiaries Historical and Pro Forma Condensed Consolidated Balance Sheets		Actuals December 31, 2012 (a) (Audited)				Actuals December 31, 2013 (a) (Audited)				Actuals March 31, 2014 (a) (Unaudited)				Pro Forma Adjustments				Pro Forma March 31, 2014 (Unaudited)
ASSETS
Investment in real estate, net of accumulated depreciation		$	342,010			$	12,502,435			$	13,987,278			$	—			$	13,987,278
Cash			5,763				2,134,510				366,696				8,396,784	(c)			8,763,480
Rents and other receivables			3,375				10,053				18,969				—				18,969
Escrow deposits and prepaid expenses			—				151,128				77,409				—				77,409
Deferred stock issuance costs			50,000				35,000				170,479				(22,797	) (c)			147,682
Total Assets		$	401,148			$	14,833,126			$	14,620,831			$	8,373,987			$	22,994,818
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses		$	119,978			$	347,179			$	285,515			$	—			$	285,515
Security deposits and accrued interest			14,770				156,985				177,520				—				177,520
Convertible notes payable, net of debt discount			283,019				—				—				—				—
Related party advance			266,877				—				—				—				—
Stock compensation payable			—				—				195,000				(195,000	) (b)			—
Total Liabilities			684,644				504,164				658,035				(195,000	)			463,035
Stockholders' Equity
Common stock			8,350				87,861				87,861				975	(b)			131,836
															43,000	(c)
Additional paid-in capital			349,513				15,953,180				15,953,180				194,025	(b)			24,478,192
															8,330,987	(c)
Accumulated deficit			(641,359	)			(1,712,079	)			(2,078,245	)			—				(2,078,245	)
Total Stockholders' Equity			(283,496	)			14,328,962				13,962,796				8,568,987				22,531,783
Total Liabilities and Stockholders' Equity		$	401,148			$	14,833,126			$	14,620,831			$	8,373,987			$	22,994,818

(a)

Reflects our historical consolidated balance sheets as of December 31, 2012, 2013 and March 31, 2014 included elsewhere within this prospectus.

(b)

Reflects issuance on April 4, 2014 of stock to board members for compensation through March 31, 2014.

(c)

Reflects issuance of 43,000,000 shares of common stock in follow on private placement for $8,600,000 of gross proceeds less capital raising costs of $226,013.

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Historical and Pro Forma Statement of Operations

Reven Housing REIT, Inc. and Subsidiaries Historical and Pro Forma Consolidated Statement of Operations		Actuals (a) Year ended December 31, 2012 (Audited)				Actuals (a) Year ended December 31, 2013 (Audited)				Pro Forma Adjustments								Pro Forma Year ended December 31, 2013 (Unaudited)				Actuals (a) Quarter ended March 31, 2013 (Unaudited)				Actuals (a) Quarter ended March 31, 2014 (Unaudited)
										Property Adjustments				Other Adjustments
										$	1,325,774	(b)		$	—
Rental income, net		$	6,750			$	342,243				217,000	(c)			—			$	1,885,017			$	20,273			$	480,595
Operating expenses:
Rental expenses			1,006				136,679				588,146	(b)			—				820,225				7,996				184,135
											95,400	(c)
General and administrative			132,261				366,071				—				—				366,071				39,541				440,849
Legal and accounting			396,797				195,156				—				—				195,156				34,976				122,277
Interest expense			13,258				77,004				—				(77,004	) (d)			—				25,942				—
Amortization of discount on notes payable			56,530				563,253				—				(563,253	) (e)			—				140,814				—
Depreciation expense			1,400				74,800				290,270	(b)			—				411,070				4,200				99,500
											46,000	(c)
Total operating expenses			601,252				1,412,963				1,019,816				(640,257	)			1,792,522				253,469				846,761
Income (loss) from continuing operations		$	(594,502	)		$	(1,070,720	)		$	522,958			$	640,257			$	92,495			$	(233,196	)		$	(366,166	)
Income from discontinued operations, net of taxes			334				—				—				—				—				—				—
Net income (loss)		$	(594,168	)		$	(1,070,720	)		$	522,958			$	640,257			$	92,495			$	(233,196	)		$	(366,166	)

Other Data:

Unaudited pro forma funds from operations (“FFO”), which is a non-GAAP measurement, for the year ended December 31, 2013 is as follows:

Reven Housing REIT, Inc. and Subsidiaries Reconciliation of Non-GAAP Pro Forma Financial Measures		Pro Forma Year ended December 31, 2013
Net income (loss)		$	92,495
Add back depreciation and amortization			411,070
Funds from operations		$	503,565

The National Association of Real Estate Investment Trusts (“NAREIT”) defines funds from operations (FFO) as net income, excluding gains (or losses) from sales of depreciable assets, plus depreciation and amortization of intangible assets. We calculate FFO in a manner consistent with the NAREIT definition. FFO should be considered as a supplemental measure of operating performance used by REITs. We believe the FFO is helpful to investors as one of several measures of the performance of a REIT. FFO excludes historical cost depreciation as an expense and may facilitate the comparison of REITs which have different cost basis. The items excluded from FFO are significant components in understanding our financial performance.

FFO does not represent cash flow from operations as defined by generally accepted accounting principles. FFO should not be considered as an alternative to net income, as a measure of operation performance or cash

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flows from operating, investing and financing activities, and is not an alternative to cash flow as a measure of liquidity. FFO, as calculated by us, may not be comparable to similarly entitled measures reported by other REITs.

Our management uses FFO as a supplemental measure to conduct and evaluate our business because there are certain limitations associated with using GAAP net income alone as the primary measure of our operating performance. Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time, while historically real estate values have risen or fallen with market conditions. Accordingly, we believe FFO provides a valuable alternative measurement tool to GAAP when presenting our operating results.

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CAPITALIZATION

The following table sets forth our cash and cash equivalents and capitalization as of March 31, 2014 (1) on a historical basis and (2) as adjusted to give effect to the sale by us of      shares of our common stock in this offering at an assumed offering price to public of $     per share, less the underwriting discounts and commissions and other estimated offering expenses payable by us. You should read this table together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes included elsewhere in this prospectus. All share and per share information below does not reflect our proposed     -for-     reverse stock split (which we intend to complete prior to the consummation of the offering).

		March 31, 2014
		Historical				As Adjusted
Cash and cash equivalents		$	366,696			$
Debt		$	—			$	—
Equity:
Stockholders’ equity
Common stock, $0.001 par value; 600,000,000 shares authorized, 87,860,880 shares issued and outstanding, historical and      shares issued and outstanding, as adjusted (1)		$	87,861			$
Preferred stock, $0.001 par value; 25,000,000 shares authorized, no shares issued and outstanding, historical and as adjusted			—
Additional paid-in capital			15,953,180
Accumulated deficit			(2,078,245	)
Stockholders’ equity		$	13,962,796			$
Total equity		$	14,620,831			$
Total capitalization		$	14,620,831			$

(1)

Includes 975,000 shares of our common stock issued to our non-employee directors pursuant to our Amended and Restated 2012 Incentive Compensation Plan.

The number of shares of our common stock to be outstanding after this offering is based on shares of our common stock outstanding as of May 23, 2014, and excludes the following:

•

shares of our common stock that we may issue and sell upon the exercise of the underwriters’ over-allotment option;

•

32,025,000 shares of our common stock reserved for future issuance under our 2012 Plan as of May 23, 2014; and

•

5,271,760 shares of our common stock issuable upon the exercise of warrants outstanding as of May 23, 2014 at an exercise price of $0.20 per share.

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DILUTION

Our net tangible book value as of March 31, 2014 was approximately $      million, or $      per share of our common stock. Net tangible book value per share represents the amount of our consolidated total tangible assets minus our consolidated total liabilities, divided by the shares of our common stock that were outstanding on the date of calculation. Our as adjusted net tangible book value on March 31, 2014 would have been approximately $      million, or $      per share, after giving effect to the sale by us of      shares of our common stock in this offering at an assumed initial price to public of $      per share, less the underwriting discounts and commissions and other estimated offering expenses payable by us. This amount represents an immediate increase in net tangible book value of $      per share to our existing stockholders and an immediate dilution in as adjusted net tangible book value of $      per share to new investors who purchase our common stock in this offering at an assumed initial price to public of $      per share. All share and per share information below does not reflect our proposed     -for-     reverse stock split (which we intend to complete prior to the consummation of the offering).

The following table shows this immediate per-share dilution:

Initial price to public per share		$
Net tangible book value per share as of March 31, 2014, before giving effect to this offering (1)		$
Increase in net tangible book value per share attributable to this offering		$
As adjusted net tangible book value per share as of March 31, 2014, after giving effect to this offering		$
Dilution in as adjusted net tangible book value per share to new investors (2)		$

(1)

Includes our common stock outstanding as of March 31, 2014.

(2)

Dilution is determined by subtracting as adjusted net tangible book value per share after giving effect to this offering from the initial price to the public per share paid by a new investor for our common stock.

If the underwriters’ option to purchase additional shares in this offering is exercised in full, the percentage of shares of our common stock held by existing stockholders will be reduced to      % of the total number of shares of our common stock outstanding after this offering, and the number of shares held by new investors will increase to      shares, or      % of the total number of shares of our common stock outstanding after this offering.

The total number of shares of our common stock reflected in the discussion and table above is based on shares of our common stock outstanding as of May 23, 2014, and excludes the following:

•

shares of our common stock that we may issue and sell upon the exercise of the underwriters’ over-allotment option;

•

32,025,000 shares of our common stock reserved for future issuance under our 2012 Plan as of May 23, 2014; and

•

5,271,760 shares of our common stock issuable upon the exercise of warrants outstanding as of May 23, 2014 at an exercise price of $0.20 per share.

To the extent that any outstanding warrants are exercised, options or other stock-based awards are issued under our 2012 Plan, or we issue additional shares of common stock in the future, there will be further dilution to investors participating in this offering. If all of these warrants were exercised, then our existing stockholders, including the holders of these warrants, would own    % and our new investors would own      % of the total number of shares of our common stock outstanding upon the closing of this offering. In such event, the total consideration paid by our existing stockholders, including the holders of these warrants, would be approximately $      million, or      %, the total consideration paid by our new investors would be $      million, or     %, the average price per share paid by our existing stockholders would be $      , and the average price per share paid by our new investors would be $      .

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On April 1, 2014, we converted from a Colorado corporation to a Maryland corporation pursuant to applicable state conversion statutes to better position our company to qualify and operate as a REIT. In connection with our conversion to a Maryland corporation, we adopted our current charter and bylaws in accordance with the laws of the State of Maryland.

Upon the closing of this public offering, we intend to implement an “UPREIT” operating partnership structure common to many of our peer companies such that we will own all of our assets and conduct substantially all of our operations through Reven Housing REIT OP, L.P., or our operating partnership, and its subsidiaries, including Reven Housing Georgia, LLC and Reven Housing Texas, LLC. Our wholly owned subsidiary, Reven Housing GP, LLC, will become the sole general partner of our operating partnership and the entity through which we will have the exclusive power to manage and conduct the business and affairs of our operating partnership.

Recent Acquisitions and Financings

On September 27, 2013, we entered into a stock purchase agreement with King APEX Group II, Ltd. and King APEX Group III, Ltd., which are funds managed by Allied Fortune (HK) Management Ltd (“Allied Fortune”), a Hong Kong-based funds management company, in connection with a private placement of up to 125,000,000 shares of our common stock at a price of $0.20 per share, for aggregate gross proceeds of up to $25 million. Upon the completion of the private placement, we consummated the sales of a total of 75,000,000 shares for a gross purchase price of $15 million. Cash proceeds after offering expenses were $14,539,082, plus an additional non-cash expense of $50,000 representing additional deferred costs relating to the private placement resulting in net proceeds to us of $14,489,082.

On October 4, 2013, Reven Housing Texas, LLC (our wholly owned subsidiary) entered into a purchase and sale agreement for the purchase of a portfolio of up to 170 single-family homes located in the Houston, Texas metropolitan area. On October 31, 2013, we closed and completed the purchase of 150 of the homes at a total cost of $11,971,797, including closing expenses. On January 31, 2014, we completed the purchase of an additional 18 homes under this same agreement for a total cost of $1,584,343, including closing expenses.

In April and May 2014, we conducted and completed a follow-on private placement of 43,000,000 shares of our common stock to King APEX Group Holdings IV Limited, a fund managed by Allied Fortune, for aggregate gross proceeds of $8,600,000. Xiaofan Bai, a member of our Board of Directors, is the Director of Allied Fortune.

The following table represents our investment in the homes as of March 31, 2014:

		Number of Homes				Land				Residential Homes				Total Investment
Purchased during 2012:
Georgia			5			$	67,019			$	276,391			$	343,410
Total at December 31, 2012			5				67,019				276,391				343,410
Purchased during 2013:
Georgia			4				52,631				210,797				263,428
Texas			150				2,394,359				9,577,438				11,971,797
Total at December 31, 2013			159				2,514,009				10,064,626				12,578,635
Purchased during 2014:
Texas			18				319,500				1,264,843				1,584,343
Total at March 31, 2014			177			$	2,833,509			$	11,329,469			$	14,162,978

We plan to continue to acquire and manage single-family homes with a focus on long term earnings growth and appreciation in asset value. As our first significant portfolio acquisition was completed on October 31, 2013, we anticipate that our revenue will increase significantly in 2014 as it will be our first full year of meaningful operations under our new business plan.

Our ability to identify and acquire single-family properties that meet our investment criteria will be affected by home prices in our markets, the inventory of properties available through our acquisition channels,

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competition for our target assets, our capital available for investment, and the cost of that capital. We believe the housing market environment in our markets remains attractive for single-family property acquisitions and rentals. Pricing for housing in certain markets remains attractive and demand for housing is growing. At the same time, we continue to face relatively steady competition for new properties and residents from local operators and institutional managers. Housing prices across all of our markets have appreciated over the past year. Despite these gains, we believe housing in certain of our markets continues to provide attractive acquisition opportunities and remains inexpensive relative to replacement cost and affordability metrics.

We anticipate continued strong rental demand for single-family homes. While new building activity has begun to increase, it remains below historical averages and we believe substantial under-investment in residential housing over the past years will create upward pressure on home prices and rents as demand exceeds supply.

Results of Operations

Our results of operations and financial condition will be affected by numerous factors, many of which are beyond our control. The key factors we expect to impact our results of operations and financial condition include our pace and costs of acquisitions, rental rates, the varying costs of external property management, occupancy levels, rates of resident turnover, turnover costs, changes in homeownership rates, changes in homeowners’ association fees, insurance costs, real estate taxes, our expense ratios, and our capital structure.

Three Months Ended March 31, 2014 Compared to the Three Months Ended March 31, 2013

Comparisons of our quarterly results of operations for March 31, 2014 to March 31, 2013 presented in our condensed consolidated financial statements are not generally meaningful as we did not have substantial rental operations during the three months ended March 31, 2013. Operations and activity did not increase significantly until the fourth quarter of 2013 when we purchased an additional 150 homes, and raised equity through our private placement activities as mentioned above.

For the quarter ended March 31, 2014, our company had total rental income of $480,595 and rental expenses of $184,135, resulting in net operating income from rentals of $296,460. General and administrative expenses totaled $440,849. Legal and accounting totaled $122,277. Depreciation on our home investments totaled $99,500. This resulted in a net loss of $366,166. Included in the general and administrative expenses was $195,000 representing the value of stock granted to our company’s board of directors for compensation for their services through March 31, 2014. The stock subject to this grant was issued on April 4, 2014.

For the quarter ended March 31, 2013, our company had total rental income of $20,273. Rental expenses were $7,996, resulting in net operating income from rentals of $12,277. Legal and accounting expenses totaled $34,976, general and administrative expenses were $39,541. Interest expense on convertible notes payable was $25,942. Amortization of discount on the convertible notes payable totaled $140,814. Depreciation expense was $4,200. As a result, we had a net loss of $233,196 for the quarter ended March 31, 2013.

Fiscal Year Ended December 31, 2013 Compared to Fiscal Year Ended December 31, 2012

Comparisons of 2013 results of operations to 2012 presented in our consolidated financial statements are not generally meaningful as we did not have substantial rental operations in 2012. Operations and activity did not increase significantly until the fourth quarter of 2013 when we purchased an additional 150 homes, and raised equity through our private placement activities as described above.

For the year ended December 31, 2013, our company had total rental income of $342,243 and rental expenses of $136,679, resulting in net operating income from rentals of $205,564. General and administrative expenses totaled $366,071. Legal and accounting totaled $195,156. Interest expense on the retirement of our convertible notes payable was $77,004. Depreciation on our home investments totaled $74,800. Amortization of discount on notes payable was $563,253. This resulted in a net loss of $1,070,720. As the convertible notes were paid off or converted on September 27, 2013, we do not expect to incur future amortization charges relating to note discounts in 2014.

For the year ended December 31, 2012, our company had total rental income of $6,750. Rental expenses were $1,006, resulting in net operating income from rentals of $5,744. Legal and accounting expenses totaled

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$396,797, general and administrative expenses were $132,261. Legal and accounting expenses were paid primarily for services necessary for our company’s change of operations and for developing documents necessary to pursue future acquisitions and capital activities. Interest, depreciation and amortization of discount on notes payable totaled $71,188. Income from discontinued operations was $334. As a result, we had a net loss of $594,168 for the year ended December 31, 2012.

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Property Acquisitions

Our company accounts for its acquisitions of real estate in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805, Accounting for Business Combinations, Goodwill, and Other Intangible Assets, which requires the purchase price of acquired properties be allocated to the acquired tangible assets and liabilities, consisting of land, building, and identified intangible assets, consisting of the value of above-market and below-market leases, the value of in-place leases, unamortized lease origination costs and security deposits, based in each case on their fair values.

Our company allocates the purchase price to tangible assets of an acquired property (which includes land and building) based on the estimated fair values of those tangible assets, assuming the property was vacant. Fair value for land and building is based on the purchase price for these properties. We also consider information obtained about each property as a result of our pre-acquisition due diligence, marketing and leasing activities in estimating the fair values of the tangible and intangible assets and liabilities acquired.

The total value allocable to intangible assets acquired, which consists of unamortized lease origination costs and in-place leases (including an above-market or below-market component of an acquired in-place lease), are allocated based on management’s evaluation of the specific characteristics of each tenant’s lease and the company’s overall relationship with that respective tenant. Characteristics considered by management in allocating these values include the nature and extent of the existing business relationships with the tenant, growth prospects for developing new business with the tenant, the remaining term of the lease and the tenant’s credit quality, among other factors. For acquisitions made in 2012 and 2013, management has determined that no value is required to be allocated to intangible assets, as the leases assumed are short-term with values that are insignificant.

Land, Buildings and Improvements

Land, buildings and improvements are recorded at cost and depreciated over estimated useful lives of approximately 27.5 years using the straight-line method. Maintenance and repair costs are charged to operations as incurred.

Our company assesses the impairment of long-lived assets, whenever events or changes in business circumstances indicate that carrying amounts of the assets may not be fully recoverable. When such events occur, management determines whether there has been impairment by comparing the asset’s carrying value with its fair value, as measured by the anticipated undiscounted net cash flows of the asset. Should impairment exist, the asset is written down to its estimated fair value. We have not recognized any impairment losses through March 31, 2014.

Warrant Issuance and Note Conversion Feature

Our company accounts for the proceeds from the issuance of convertible notes payable with detachable stock purchase warrants and embedded conversion features in accordance with FASB ASC 470-20, Debt with Conversion and Other Options. Under FASB ASC 470-20, the proceeds from the issuance of a debt instrument with detachable stock purchase warrants shall be allocated to the two elements based on the relative fair values of the debt instrument without the warrants and of the warrants themselves at the time of issuance. The portion of the proceeds allocated to the warrants is accounted for as additional paid-in capital and the remaining proceeds are allocated to the debt instrument which resulted in a discount to debt which is amortized and charged as interest expense over the term of the note agreement. Additionally, pursuant to FASB ASC 470-20, the intrinsic value of the embedded conversion feature of the convertible notes payable is included in the discount to debt and amortized and charged to interest expense over the life of the note agreement.

Income Taxes

We intend to elect to be taxed as a REIT, as defined in the Internal Revenue Code, commencing with our taxable year ended December 31, 2014. However, no assurance can be given that we will qualify or remain qualified as a REIT. In the event we qualify and elect to be taxed as a REIT, we will not be subject to federal income tax provided that our distributions to our stockholders equal or exceed our REIT taxable income and satisfy all other requirements under the Internal Revenue Code.

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However, qualification and taxation as a REIT depend upon our ability to meet the various qualification tests imposed under the Internal Revenue Code related to the percentage of income that we earn from specified sources, the percentage of our assets that fall within specified categories, the diversity of our capital stock ownership, and the percentage of our earnings that we distribute. Accordingly, no assurance can be given that we will be organized or be able to operate in a manner so as to qualify or remain qualified as a REIT. If we fail to qualify as a REIT in any taxable year, we will be subject to federal and state income tax (including any applicable alternative minimum tax) on our taxable income at regular corporate tax rates, and we may be ineligible to qualify as a REIT for four subsequent tax years. Even if we qualify as a REIT, we may be subject to certain state or local income taxes.

The tax benefit of uncertain tax positions is recognized only if it is “more likely than not” that the tax position will be sustained, based solely on its technical merits, with the taxing authority having full knowledge of relevant information. The measurement of a tax benefit for an uncertain tax position that meets the “more likely than not” threshold is based on a cumulative probability model under which the largest amount of tax benefit recognized is the amount with a greater than 50% likelihood of being realized upon ultimate settlement with the taxing authority, having full knowledge of all the relevant information. As of December 31, 2012 and 2013 and as of March 31, 2014, we had no unrecognized tax benefits. We do not anticipate a significant change in the total amount of unrecognized tax benefits during 2014.

New Accounting Pronouncements

We have adopted all recently issued accounting pronouncements. The adoption of the accounting pronouncements, including those not yet effective, is not anticipated to have a material effect on our financial position or results of operations.

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INDUSTRY OVERVIEW AND MARKET OPPORTUNITY

Unless otherwise indicated, all information in this Industry Overview and Market Opportunity section is derived from a market study prepared for us in connection with this offering by The London Group Realty Advisors, a real estate analysis and strategic consulting firm. All backup data and exhibits are on file at the offices of The London Group Realty Advisors. You should read the following discussion together with the information under the caption “Risk Factors.”

Residential Housing Industry Overview

Residential housing is the largest real estate asset class in the United States with a size of approximately $19 trillion, according to the 2013 Third Quarter release by the Federal Reserve. According to the U.S. Census Bureau, approximately one-third of this asset class has historically been rented. Single-family homes currently comprise approximately one-third of all residential rental housing.

The following chart provides information about the inventory of U.S. housing as of February 2014.

U.S. Housing Inventory
February 2014

Source: The London Group Realty Advisors, Claritas

Market Opportunity

The U.S. housing market enjoyed nearly a decade of strong home price appreciation from the late 1990s through June 2006. Due to excessive lending at subpar underwriting standards, a significant home price correction occurred from late 2006 through early 2012. As measured by the S&P Case Shiller U.S. National Home Price Index, the peak occurred in June 2006 (189.93) and reached a low in March 2012 (124.2) — a decrease of 35%. As of September 2013, home prices throughout the nation have recovered 22% of value, which is representative of home values in early 2004.

In a number of markets, the cost of newly constructed housing is higher than the price of existing homes. Moreover, The London Group believes that there will continue to be a supply of homes at distressed values, particularly in markets that are experiencing slower economic growth relative to the rest of the nation, such as Detroit, Las Vegas, New Orleans, Cleveland and Jacksonville. These housing markets experience a higher level of distressed housing inventory with foreclosures, short-sales and non-performing loans. While many markets are well on their way to total recovery, The London Group believes there is still an opportunity to acquire a significant volume of single-family properties at relatively low prices in select markets.

We believe our market opportunity to acquire leased portfolios of single-family rentals is a sustainable opportunity because there are currently 14.6 million single-family homes that are currently being rented in the U.S. Since 1995 the SFR market has consistently been approximately 10.5% of the total housing market.

The single-family rental market consisted of approximately 13 million homes prior to 2008 and has since increased to 14.6 million homes as more people are renting homes.

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Historical SFR Share as % of Total US Households since 1995

Source: The London Group Realty Advisors

Out of the 14.6 million SFR’s, an estimated 98.6% of these homes are currently owned by smaller investors and only 1.4% are owned by institutional investors. We believe the opportunity exists for us to aggregate part of the 98.6% from the smaller investors into the public company which represents over a $2 trillion market.

Source: The London Group Realty Advisors

In the past, SFR properties were acquired by entrepreneurial investors who operated on a small scale, concentrating in their local markets. Most recently, a new business model has emerged where the focus for companies such as us is to operate in select markets, funded with institutional and/or public capital to create and expand portfolios of SFRs. We believe this business model (particularly when operated as a public vehicle) allows us to operate more efficiently and acquire more homes than with traditional funding sources, which required much higher rates of return on capital. This multi-faceted approach enables owners and operators of SFRs to stabilize cash flow for investors while also participating in the upside appreciation of homes as residential market conditions improve.

The ability to purchase single-family homes at relatively low prices is a valuation advantage. In the past 10 years, despite the most recent economic downturn, apartments have become the preferred target asset class for real estate investment. This is verified by the decline in cap rates and growth in rents (after adjusted for inflation), which suggest a continuous increase in multifamily values.

The opportunity to acquire and invest in a single-family rental portfolio offers stable income and return on capital, while allowing investors to diversify from other income producing assets, such as multifamily apartments.

Supply of Single-Family Housing

From the housing peak in 2006 through early 2012, the housing sector experienced a total valuation loss of nearly $7 trillion according to S&P Case Shiller U.S. National Home Price Index and the U.S. Census Bureau. The collapse of the housing market resulted in homeowners throughout the nation saddled with “negative equity” in their homes.

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The distressed housing market resulted in an unprecedented number of foreclosures throughout the nation. According to CoreLogic, there were approximately 4.7 million completed foreclosures in the U.S. from September 2008 through December 2013.

Recently, the housing market has strengthened, even approaching total recovery in the coastal markets. The number of seriously delinquent loans (90 days or more past due or in the process of foreclosure) is down 25% from December 2012 to December 2013. However, the number of seriously delinquent loans is still significant at 1.98 million loans in December 2013. In addition, the pace of completed foreclosures averaged 45,000 per month in the Fourth Quarter of 2013. The following chart demonstrates the composition of the 5.6 million residential loans in the U.S. that are currently non-performing.

Non-Performing Residential Mortgage Loans
December 2013
Total Non-Performing Loans: 5.6 million

Source: The London Group Realty Advisors, Mortgage Bankers Association National Delinquency Survey Q4 2013

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The following chart details the U.S. single-family mortgage delinquency and foreclosure units. As of the fourth quarter of 2013, there are approximately 2.6 million delinquent home mortgages and an estimated 1.16 million units representing the current foreclosure inventory.

U.S. Single Family Residential Mortgage Delinquency and
Foreclosure Units
(Q4 1990 – Q4 2013)

Source: The London Group Realty Advisors, Mortgage Bankers Association - 4th Quarter National Delinquency Survey

The main reason for the slow housing recovery has been the slow pace of job creation in the years following the recent global economic downturn. The slow pace is partly owed to the tremendous loss of jobs which occurred during the economic downturn, and the subsequent slow pace of recovery. From January 2008 through February 2010, the economy lost 8.7 million jobs. As of December 2013, 89% or 7.7 million jobs have been recovered. Additionally, an estimated 979,000 jobs are needed to return to peak employment before the economic downturn (January 2008 job level). Moreover, approximately 7.1 million jobs are needed to accommodate the population growth and those who entered the workforce since January 2008. The U.S. economy is also going through a structural evolution where companies are able to downsize, achieve higher levels of efficiency, outsource and use technology to replace jobs. These phenomena will forever change the economy and the result may be that higher unemployment and underemployment rates may linger for many years. The following chart demonstrates the jobs loss and recovery since January 2008.

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U.S. Total Payroll Employment and Population Growth
2008 – 2010 Recession

Source: Bureau of Labor Statistics

The preponderance of foreclosures and seriously delinquent loans is mostly owed to income levels insufficient to afford a home mortgage. Therefore, loan delinquency levels cannot be fully resolved without a more robust job recovery.

According to the Mortgage Bankers Association, the serious delinquency rate — the percentage of loans that are 90 days or more past due or in the process of foreclosure — was 5.41% as of the fourth quarter of 2013. At this current level of distress, this group of seriously delinquent loans represents approximately 2.5 million loans, which is a significant opportunity for acquiring single-family homes.

In summary, the housing market is on the path to recovery on a nationwide basis. That recovery has benefitted certain markets more than others. But by and large, the era of purchasing housing that are truly distressed is over. However, it is apparent that significant acquisition targets still exist for opportunistic investors to purchase homes at significantly lower price points, often below replacement, and then reposition this inventory in the rental pool. This opportunity exists in markets that are either undervalued because of an oversupply of housing or in markets that are still in need of rental housing because of strong job growth.

Rental Market Demand Overview

According to the U.S. Census, there were 76.5 million family households in 2012. The Census also estimates that 32%, or 24.5 million, family households have children under the age of 18. While a portion of this demographic owns their home, this is still a sizeable pool of potential renters for single-family homes.

The following chart demonstrates the historical increase in rental rates and occupancy for single-family and multifamily units nationwide. Occupancy rates have increased from 31.1% in 2005 to 34.6% in 2012. Total inventory of rentals has increased by 11.3% since 2005. Rents have increased from $728 in 2005 to $884 in 2012, which reflects an increase of 21.4% since 2005. This data demonstrates the rise, and strength, of the rental market despite the economic turmoil that ensued during this period.

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Single Family and Multifamily Rental Occupancy and Rental Rate

Source: The London Group Realty Advisors, U.S. Census Bureau

Single-Family Rental Demand

Many homeowners who have been displaced during the most recent housing downturn have turned to SFRs because this rental product exhibits similar characteristics and qualities as their previous owned home. Displaced households, or families that are struggling financially, seek to maintain the quality of life they associate with living in a single-family home.

Renting has also become a compelling long-term option for families who cannot afford the otherwise expensive home buying process ( e.g. , large down payments required by lenders). These households are realizing that a quality of life can be achieved by renting a single-family home instead of carrying an expensive amortizing mortgage that requires principal payments and raises their monthly expenditures.

The tenant target for multifamily rental product is different from single-family rental homes. Multifamily is typically designed for those who are at the early or later stages of the lifecycle — principally singles, couples without children, roommates and empty nesters or seniors that are downsizing. Single-family home rentals cater to the population in the middle of their lifecycle such as families with children or multiple generations under one roof who require more space. This segment is focused on providing a quality of life for a larger family, which includes more space, neighborhood safety and quality of schools.

The following graphic demonstrates the increase in single-family rentals. At the end of 2012, there were an estimated 14.6 single-family rentals, which represent approximately 35% of total rental units in the U.S.

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Relative Size of the Single Family Rental Market

Source: The London Group Realty Advisors, U.S. Census Bureau

There are two main factors that have contributed to the increased demand for rental properties: home mortgage financing and household displacement. Both of these factors are likely to have longer-term impacts on the rental market, particularly for single-family home rentals.

Constraints on Home Mortgage Financing

The most recent economic downturn resulted in a “reset” of housing market fundamentals. Lenders significantly pulled back on making new loans to homebuyers as prices began to correct. Only buyers with the highest credit scores and significant positive equity were able to qualify for a loan (either refinance or new purchase). Today’s lending standards are also just as stringent, as indicated by the following factors:

Displaced Owners Forced to Rent

The most recent economic downturn displaced many homeowners and forced them into rental status. This was a direct result of job loss. Nationwide, 8.7 million jobs were lost from January 2008 through February 2010. This is more than five times the amount of jobs lost in the early 1990s recession (1.6 million jobs).

The pace of recovery has also been slow. It has been more than four years since the statistical end of the recession in June 2009, yet the U.S. has still recovered only 89% of the 8.7 million jobs lost over the prior six year period. For comparison purposes, the U.S. recovered 100% of the jobs lost in the early 1990s in 21 months.

The volatility and slow growth in the job market is changing how Americans live. Many former homeowners, or prospective homeowners, have become long-term renters because of their financial outlook and uncertain job prospects. This is demonstrated in the U.S. homeownership rate, as shown in the following chart. Homeownership peaked in 2004 at 69.2% and has since decreased to 65.2%.

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National Homeownership Rate

Source: The London Group Realty Advisors, U.S. Bureau of Labor Statistics

A portion of those displaced are likely to become permanent renters. This population consists of households that are struggling with longer-term unemployment. It will be a difficult task for these unemployed workers to find employment again. As such, long-term rental housing offers flexibility and the ability to adapt to changing financial circumstances.

Single-Family Home Prices

The economy has mostly recovered and steady employment gains have been made, resulting in stabilization and a valuation increase throughout the national housing market. Appreciation rates have been strong, particularly in the west and northeast coastal markets. Most Midwest and Sunbelt markets, however, have lagged due primarily to continued excessive supply. The following chart demonstrates the magnitude of the decrease in home prices and the rebound in pricing in the key markets where we are active.

Changes in Home Values

Source: The London Group Realty Advisors, S&P Case-Shiller

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Atlanta Market Economic Overview

The Atlanta MSA is comprised of twenty-nine counties and is the ninth-largest MSA in the United States by population, according to the Census Bureau’s 2012 Statistical Abstract of the United States. According to the U.S. Census Bureau’s 2012 American Community Survey, the Atlanta MSA includes 5.4 million people. Atlanta is projected to achieve population growth which averages 1.2% annually from 2013 through 2018, which is slightly above the projected national average of 0.70% annually for the same period (Nielsen Claritas 2013).

Annual Employment Growth and Unemployment Rate

Employment growth has been positive in Atlanta. An estimated 35,500 jobs were added in 2011, 43,900 jobs were added in 2012, and 59,400 jobs were added in 2013. By comparison, the metro area lost a total of 183,500 jobs between 2008 and 2010. The unemployment rate declined from 10.2% in 2010 to 8.7% in 2012 and 7.9% in 2013. The national unemployment rate was 7.4% in 2013. The London Group forecasts employment in Atlanta to grow by an average of 52,000 jobs annually from 2014 through 2018, or annual growth of 2.2%. In comparison, The London Group forecasts annual employment growth nationally of 1.65% through 2018 (2.3 million jobs annually).

Annual Employment Growth and Unemployment Rate
Atlanta, GA MSA

Source: The London Group Realty Advisors, Bureau of Labor Statistics

Metro Economy

The Atlanta economy includes the state capital and a large presence of colleges and universities, numerous Fortune 500 companies, and one of the busiest airports in the world. Atlanta also has one of the fastest growing tech sectors with 13,000 companies and nearly 200,000 employees. The Joint Development Authority of Metropolitan Atlanta reports that Atlanta has the second largest telecom presence nationally with over 44,000 employed in this cluster.

Median Household Income

The median household income in Atlanta decreased in 2009 and 2010. However, the median household income experienced a 3.8% and 4.4% year over year growth rate in 2012 and 2013, respectively. Based on this growth, The London Group forecasts the median household income in Atlanta will increase to $60,702 by 2016, which is a 2.1% average annual increase.

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Median Household Income Atlanta, GA MSA

Source: The London Group Realty Advisors, U.S. Census Bureau

Atlanta Housing Market Overview

According to the U.S. Census Bureau, 2012 American Community Survey, the total market size of housing stock in Atlanta is estimated to be $197 billion, or approximately 2.2 million homes. Household formations are once again increasing as indicated by building permit growth for new single-family homes and multifamily units. Total housing permits in the Atlanta MSA peaked in 2004 at 74,256 permits and declined to a bottom of only 6,567 permits in 2009. Since 2009, housing permits have increased to 14,395 in 2012 and 24,337 in 2013. The year-over-year annual increase in permits was 66% in 2012 and 69% in 2013.

Annual Housing Permits Atlanta, GA MSA

 
Source: The London Group Realty Advisors, Real Estate Center at Texas A&M University

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Home values dropped modestly from 2011 to 2012, but were down 40% at the market bottom in 2012 from the 2007 peak. Since the bottom, the market has recovered 23% of value. The homeownership rate has consistently been in decline since reaching 68.9% in 2009. The current homeownership rate is 60.1%, which suggests an increase in rental demand. As a result, we believe that there remains opportunity in the Atlanta market to continue to acquire, restore, lease and manage single-family homes.

Supply and Demand Dynamics

Annual housing permit issuance reached a low in 2009 as the market slipped further into economic downturn. While housing permits growth has resumed, the composition of housing is different. Approximately 36% of permits in 2012 and 39% of permits in 2013 were for multifamily. This compares to a ratio of 22% multifamily permits in the 2000 – 2006 period. This new composition of housing growth suggests an increase in rental demand, which correlates with a declining rate of homeownership in the Atlanta MSA. The London Group forecasts annual housing permits to surpass 30,000 permits per year for 2014 to 2016.

Homeownership Level

The following table demonstrates the decline in the homeownership rate in the Atlanta MSA. The homeownership rate reached a recent high of 68.9% in 2009, which has now declined to a low of 60.1%. It is likely that the homeownership could decline further due to the larger proportion of annual multifamily housing permits in 2012 and 2013.

Homeownership Rate Atlanta, GA MSA

Source: The London Group Realty Advisors, U.S. Census Bureau

Single-Family Rental and Vacancy Rates

Average single-family home rental rates in Atlanta have increased annually since 2011. Additionally, the vacancy rate has decreased from 16.6% in 2009 to 10.2% in 2013.

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Single Family Rental and Vacancy Rates in Atlanta, GA MSA

Source: The London Group Realty Advisors, Zillow

Houston Market Economic Overview

The Houston MSA is comprised of nine counties and is the sixth-largest MSA in the United States by population, according to the Census Bureau’s 2012 Statistical Abstract of the United States. According to the U.S. Census Bureau’s 2012 American Community Survey, the Houston MSA includes 6.2 million people. Houston is projected to average population growth of 1.7% annually from 2013 through 2018, which is slightly above the projected national average of 0.70% annually for the same period (Nielsen Claritas 2013).

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Annual Employment Growth and Unemployment Rate

Employment growth has been positive in Houston. An estimated 64,600 jobs were added in 2011, 99,300 jobs were added in 2012, and 94,900 jobs were added in 2013. By comparison, the metro area only lost a total of 74,000 jobs between 2009 and 2010. The unemployment rate declined from 8.5% in 2010 to 6.8% in 2012 and 6.2% in 2013. The national unemployment rate was 7.4% in 2013. The London Group forecasts employment in Houston to grow by an average of more than 90,000 jobs annually from 2014 through 2018, or annual growth of 3.2%. In comparison, The London Group forecasts annual employment growth nationally of 1.65% through 2018 (2.3 million jobs annually).

Annual Employment Growth and Unemployment Rate
Houston, TX MSA

Source: The London Group Realty Advisors, Bureau of Labor Statistics

Metro Economy

The Houston economy enjoys a significant presence of industrial firms, particularly the business sectors of energy, manufacturing, aeronautics and transportation. Houston is home to the second most Fortune 500 companies, only behind New York City. It is also a leader in the health care and oil sectors. The Port of Houston ranks first in the U.S. in terms of international waterborne tonnage handled and second in total cargo tonnage handled.

In 2013, Houston led the nation in job creation according to the U.S. Bureau of Labor and Statistics. Houston was also the first nation to recover all of its job losses after the most recent economic downturn.

Houston is also recognized as having historically built a sufficient, or even excessive, amount of housing. This is principally due to its relaxed zoning laws and limited restrictions on development, which allows housing construction to easily proceed. This keeps housing prices relatively affordable. The London Group forecasts Houston developers will continue to build housing that will keep pace with demand and temper housing price increases.

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Median Household Income

The median household income in Houston decreased in 2009 and 2010. However, the median household income experienced a 1.8% and 3.8% year over year growth rate in 2012 and 2013, respectively. Based on this growth, The London Group forecasts the median household income in Houston will increase to $62,125 by 2016, which is a 2.0% average annual increase.

Median Household Income Houston, TX MSA

Source: The London Group Realty Advisors, U.S. Census Bureau

Houston Housing Market Overview

According to the U.S. Census Bureau, 2012 American Community Survey, the total market size of housing stock in Houston is estimated to be $182 billion, or approximately 2.4 million homes. Household formations are once again increasing as indicated by building permit growth for new single-family homes and multifamily units. Total housing permits in the Houston MSA peaked in 2006 at 71,716 permits and declined to a bottom of 27,326 permits in 2009. Since 2009, housing permits have increased to 43,286 in 2012 and 51,417 in 2013. The year-over-year annual increase in permits was 38% in 2012 and 19% in 2013.

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Annual Housing Permits Houston TX MSA

Source: The London Group Realty Advisors, Real Estate Center at Texas A&M University

Home values dropped only 4% during the most recent housing downturn. Since the bottom, home values have appreciated 18%. The homeownership rate has consistently been in decline since reaching 65.6% in 2007. The current homeownership rate is 59.5%, which suggests an increase in rental demand. As a result, we believe that there remains opportunity in the Houston market to continue to acquire, restore, lease and manage single-family homes.

Supply and Demand Dynamics

Annual housing permit issuance reached a low in 2009 as the national economy was in a recession. While housing permits growth has resumed, the composition of housing is different. Approximately 34% of permits in 2012 and 33% of permits in 2013 were for multifamily. This compares to a ratio of 22% multifamily permits in the 2000 – 2006 period. This new composition of housing growth suggests an increase in rental demand, which correlates with a declining rate of homeownership in the Houston MSA. The London Group forecasts annual housing permits to surpass 50,000 permits per year for 2014 to 2016, which is a direct reflection of Houston being one of the top job creation markets.

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Homeownership Level

The following table demonstrates the decline in the homeownership rate in the Houston MSA. The homeownership rate reached a recent high of 64.5% in 2009, which has now declined to a low of 59.5%.

Homeownership Rate Houston, TX MSA

Source: The London Group Realty Advisors, U.S. Census Bureau

Single-Family Rental and Vacancy Rates

Average monthly single-family home rental rates in Houston have increased annually since 2011. Additionally, the vacancy rate has decreased from 16.2% in 2010 to 10.5% in 2013.

Single Family Rental and Vacancy Rates in Houston, TX MSA

Source: The London Group Realty Advisors, Zillow

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OUR BUSINESS AND INVESTMENTS

Our Company

We are an internally managed Maryland corporation that engages in the acquisition, ownership and operation of portfolios of leased single-family homes in the United States. We operate our portfolio properties as single-family rentals, or SFRs, and we generate most of our revenue from rental income from the existing tenants of the SFRs we have acquired. We intend to elect and qualify to be taxed as a real estate investment trust, or REIT, for federal income tax purposes commencing with our taxable year ended December 31, 2014.

As of the date of this prospectus, we have invested an aggregate of approximately $14.2 million and own 168 homes in the Houston, Texas, metropolitan area, 150 of which were acquired in October 2013 and 18 of which were acquired in January 2014; and 9 homes in the Atlanta, Georgia, metropolitan area, of which 5 were acquired in October 2012 and 4 were acquired in January 2013. We intend to expand our acquisitions in other select markets in the United States that fit our strict investment criteria as we continue to evaluate new investment opportunities in different markets. Our portfolio properties are currently 96% leased, of which 145 are subject to one year leases, 25 are subject to month-to-month leases and 7 are vacant and being marketed for leasing. All of our portfolio properties to date have been acquired from available cash and are not subject to any liens or security interests.

Our principal objective is to generate cash flow and distribute resulting profits to our stockholders in the form of distributions, while gaining home price appreciation, or HPA, at the same time through the ownership of our portfolio properties. With this objective in mind, we have developed our primary business strategy of acquiring portfolios of stabilized or leased SFRs at a discount to replacement cost. We believe the execution of this strategy will allow us to generate immediate and steady cash flow from the rental income from the SFRs that we acquire while potentially gaining significant HPA over time. HPA is a metric most of our competitors use to project total returns. We believe cash flow is a better metric to project returns because cash flow is realized once we receive it and HPA is unrealized until the assets are sold. We expect that the available cash flow generated from the rental income of our SFRs will allow us to pay all of our operating costs for the operation of our portfolio properties and distribute profits to our stockholders in the form of quarterly dividends as our company grows.

Our History and Structure

In 2012, Chad M. Carpenter, our Chairman of the Board, President and Chief Executive Officer, recognized that an opportunity existed in which portfolios of leased homes with positive cash flow could be acquired at a significant discount to replacement costs. To capitalize on this opportunity, Mr. Carpenter acquired a majority of the issued and outstanding shares of our common stock in July 2012 and founded Reven Housing REIT. Since then, we have been engaged in our current business of acquiring, owning and operating portfolios of leased single-family homes as rental properties.

Our company was originally incorporated on April 26, 1995, in the State of Colorado under the name “Colorado Security Patrol Inc.” to provide a variety of security services on both a residential and commercial basis, although our company was not successful in generating sufficient revenues from this business. On March 12, 2007, our company filed an amendment to its Articles of Incorporation changing its name to “Bureau of Fugitive Recovery, Inc.” and expanded its operations to include the tracking and apprehension of offenders who had failed to appear in court or had otherwise had their bail bonds revoked. After Mr. Carpenter’s acquisition of a majority of our company and the implementation of our current business plan, we changed our company’s name to “Reven Housing REIT, Inc.” from “Bureau of Fugitive Recovery, Inc.” on August 9, 2012.

On April 1, 2014, we converted from a Colorado corporation to a Maryland corporation pursuant to applicable state conversion statutes to better position our company to qualify and operate as a REIT. In connection with our conversion to a Maryland corporation, we adopted our current charter and bylaws in accordance with the laws of the State of Maryland.

Upon the closing of this public offering, we intend to implement an “UPREIT” operating partnership structure common to many of our peer companies such that we will own all of our assets and conduct substantially all of our operations through Reven Housing REIT OP, L.P., or our operating partnership, and its

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subsidiaries, including Reven Housing Georgia, LLC and Reven Housing Texas, LLC. Our wholly owned subsidiary, Reven Housing GP, LLC, will become the sole general partner of our operating partnership and the entity through which we will have the exclusive power to manage and conduct the business and affairs of our operating partnership.

Our Competitive Advantages

We believe that our competitive advantages include the following:

Our Business Strategy

Our business strategy of acquiring stabilized or leased portfolios of single-family homes and operating them as rental properties allows us to focus on generating positive cash flow and distributing the resulting profits to our stockholders. Our business strategy differentiates us from most of our competitors because they are buying empty homes individually as opposed to purchasing rented homes in bulk or are focused on generating home price appreciation. In the institutional investment sector, our strategy is generally known as a core strategy while most of our competitors are executing opportunistic strategies. We believe that core strategies generally involve less risk than opportunistic strategies due to the stabilized and cash flow nature of the SFRs acquisition and are more in line with the strategies of public REITs in other asset classes. We believe our business strategy is efficient and cost effective because we do not need a large staff or incur significant overhead costs to grow and execute our business plan.

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Extensive Sourcing Network

Our management team has cultivated and developed a wide network of industry relationships over the years, which we believe provides our company with a distinct competitive advantage to source a greater number of off-market transactions. Through this network, we have been able to source attractive portfolio acquisitions, and we believe they may provide us with additional attractive privately negotiated acquisition opportunities that in some cases may not be available to other market participants. We believe that this can result in more favorable pricing for acquisitions than if we were bidding on fully marketed deals. Our acquisitions team is in regular communication with sourcing contacts and sends out frequent and regular emails to update our underwriting criteria and to account for changes in current market and economic conditions. We provide agents and investors with specific acquisition criteria regarding the type of dwelling, location, condition of property, and price points so that they can concentrate their efforts exclusively on properties that meet our criteria. We maintain a database of potential sourcing contacts that is updated on a regular basis.

Our Business and Growth Strategies

Our objective is to be a leader in the single-family rental business as an institutional-quality operator on a national scale. Our focus is on cash flow and profitability while generating meaningful distributions from rental income and the potential for capital appreciation. We believe we can achieve this objective through the following strategies:

Disciplined Investment Strategy and Institutional Platform

We intend to grow by acquiring portfolios of single-family homes with cash flow in place in portfolios in select markets throughout the United States where economic forecasts are favorable for our business. Such forecasts include increasing rental rate growth and home price appreciation, increasing population migration and increasing job growth. Other factors that are as important are decreasing unemployment rates, decreasing cap rates and vacancies. We have strict investment criteria and detailed due diligence policies for each acquisition with formal investment committee meetings for review and approvals which creates an institutional culture and platform.

Create a Diversified Stabilized Portfolio

We currently own leased portfolios in the Atlanta, Georgia, and Houston, Texas metropolitan areas and intend to expand into other select markets in the United States that fit our strict investment criteria. These targeted markets include selected cities in Arizona, California, Colorado, Florida, Illinois, Indiana, Kentucky, Nevada, North Carolina, Oklahoma, Tennessee, Utah and Virginia. We believe that our planned expansion into these markets will help us achieve a diversified portfolio.

Keep a Low Cost and Efficient Overhead Structure

Our business strategy and platform allow us to maintain a lean, qualified team, keeping overhead costs down while efficiently managing vendors on an outsourced basis through active oversight and reporting. Unlike many of our competitors, we do not require nor maintain a large staff for acquisitions because we acquire investments through purchases of portfolios, not individual homes. Similarly, because we target and acquire homes that are leased and are otherwise in rent-ready condition, we do not require nor maintain a large staff for asset management or significant resources for renovating the homes. Additionally, by outsourcing property management functions to qualified and locally based property managers, we can focus our capital, resources and efforts that would otherwise be used to build in-house property management on operations and growth.

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Locally-Based Property Management

Property management is a critical part of our business, and we believe this important function is a low margin and local business given the disparate nature of our assets and the unique characteristics of each home and the markets in which they are located. We believe that keeping maintenance and other operating costs under strict control and supervision is paramount to generating acceptable rental yields and maximizing the price appreciation of our assets. As such, we outsource our property management functions to independent, qualified, locally based property management teams who are experienced and familiar with the local markets in which they operate. We in turn manage the outsourced property managers to operate within our policies, procedures and budgets. By outsourcing the property management function of our business, our executives can better utilize their efforts, time and resources to focus on acquisitions and asset management rather than building a low-margin in-house property management arm, which we believe will allow us to achieve higher returns for our stockholders. We believe this is an efficient strategy for us at this stage of our development and furthers our growth.

Real-Time Reporting for Operations

We intend to develop a proprietary cloud-based management information system that will enable comprehensive tracking, management and control of all required functions within a cost-efficient and scalable mobile and tablet user environment. We have invested considerable time and resources in the evaluation and development of these systems as we believe that these tools will facilitate effective and efficient management of disparate assets, scale our platform, provide us with a unique and sustainable competitive advantage and sustain operating margins as we continue to grow. We believe corporate and in-field workflows and processes will be simple and highly automated, ensuring rapid adoption and compliance among employees and third-party service providers such as property management firms. This will enable rapid response to property and tenant issues, while providing executive-level visibility into all operational details on a real time basis. The system will also enable management to comply with strict regulatory compliance and governance requirements and will empower field personnel to respond autonomously within established corporate and budgetary parameters.

Our Business Activities and Operations

Since we commenced investment activities in October 2012, we have acquired portfolios in Georgia and Texas. We currently own 168 homes in the Houston, Texas metropolitan area and 9 homes in the Atlanta, Georgia, metropolitan area. In addition, we evaluate new markets on an ongoing basis to identify investment opportunities that we believe can generate attractive risk-adjusted returns for our stockholders. Currently, we are evaluating markets in the following states for investment, each of which we believe meets our investment criteria: Arizona, California, Colorado, Florida, Illinois, Indiana, Kentucky, Nevada, North Carolina, Oklahoma, Tennessee, Utah and Virginia.

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States in Which We Own Single-Family Homes
(as of March 31, 2014)

The following table presents summary statistics of our entire portfolio of single-family homes by MSA and metro division as of March 31, 2014.

Total Portfolio of Single-Family Homes — Summary Statistics
(as of March 31, 2014)

MSA/Metro Division		Number of Homes				Aggregate Investment				Average Investment Per Home				Percent Leased				Average Age (years)				Average Size (square feet)
Atlanta, GA			9			$	606,838			$	67,426				66	%			21				1,516
Houston, TX			168			$	13,556,140			$	80,691				95	%			45				1,435
Total/Weighted Average			177			$	14,162,97 8			$	80,017				95%				44				1,439

Our Investment Process

Our investment strategy is to acquire portfolios of tenant-occupied houses with cash and/or OP units, from investors who have accumulated homes and who are now looking for an exit strategy. The evaluation and execution of our portfolio acquisitions are subject to the review and approval by our investment committee, which operates under the oversight of our Board of Directors and is currently comprised of Chad M. Carpenter, our Chairman and Chief Executive Officer, Xiaofan (Fred) Bai, a member of our Board of Directors, Xiahang (Jake) Bai, a member of our Board of Directors, Thad L. Meyer, our Chief Financial Officer and Chief Operating Officer, and Michael P. Soni, our Senior Advisor of Investments. We have developed and integrated the following proprietary processes in the implementation of our investment strategy.

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Balanced Value Approach for Investing

Our acquisition strategy is based upon extensive research and utilizes a proprietary acquisitions algorithm that focuses on acquiring a balance of Class “A” and “B” portfolios of rented homes that have the potential for both increased yield and appreciation. Typically, Class “A” homes are homes that are generally larger and built after the year 2000, have a current rental yield of 12%+ with higher mid-term appreciation potential, and are generally in markets with the strongest economies and/or those that did not suffer recessionary effects to the extent experienced by other parts of the country. Class “B” homes are homes that are typically smaller and built before the year 2000, have a current rental yield of approximately 14% with lower mid-term appreciation potential, and are generally in markets with recovering economies. We invest in markets that demonstrate strong and/or improving economic performance which will support the potential for rent increases and home appreciation. When approaching a market, we focus on factors such as the strength of rental demand, rates of job growth, population growth and unemployment. Within markets that meet our investment criteria, we seek to identify the neighborhoods that offer the most attractive mix of rental demand and rental rates, which are often characterized by good access to transportation networks and employment centers, good schools and low levels of crime. We believe this “balanced value” approach towards investing will help our investments achieve sustainable profitability at all times and through all cycles. This balanced value approach is intended to offer stockholders diversification, distributions, appreciation, liquidity and a lower risk investment.

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Local Market Monitor currently monitors the 315 major real estate markets in the United States. We focus on markets that have the following characteristics:

Phoenix, AZ		Atlanta, GA		Memphis, TN
Tucson, AZ		Chicago, IL		Nashville, TN
Central California		Indianapolis, IN		Dallas, TX
Los Angeles, CA		Louisville, KY		Fort Worth-Arlington, TX
Denver, CO		Las Vegas, NV		Houston, TX
Fort Lauderdale, FL		Charlotte, NC		Irving, TX
Jacksonville, FL		Raleigh, NC		San Antonio, TX
Miami, FL		Virginia Beach, NC		Salt Lake City, UT
Orlando, FL		Oklahoma City, OK		Richmond, VA
Tampa, FL		Tulsa, OK

Using the 3-year aggregate home value forecast from Local Market Monitor, we sort markets (as listed above) based on projected growth. Those markets that have higher projected growth are perceived to be lower risk, and yield a lower cap rate per class, than those markets that have lower or no growth projection over the next three years.

Since we target only tenant-occupied properties, we focus on submarkets where we expect that the majority of tenants will fit this profile. In the event that they do not, we will replace them with our targeted tenant profile on lease renewal.

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Our zip code analysis focuses on the following metrics:

Sourcing and Evaluation of Assets for Acquisition

Our management executives and investment professionals maintain existing relationships and continually develop new relationships in our network of contacts providing us access to potential portfolios of properties that meet our investment criteria. We provide contacts in our sourcing network with our specific investment criteria regarding the type of dwelling and specific home characteristics, location, condition of property, and price points so that efforts are concentrated solely on the properties that are potentially viable for investment by us. We are in regular communication with portfolio sourcing contacts and send out frequent and regular emails updating investment criteria to adapt to changes due to market fluctuations or other factors affecting our acquisitions model. All contacts and communications with them are logged in a central database to ensure we have current and correct sourcing information as we continually build and maintain our sourcing network. We believe the vast majority of SFR portfolios are available on an off-market basis due to the fragmentation of the SFR income-producing asset market, lack of institutional and other large buyers, and the local vs. national nature of the assets.

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Once a portfolio has been identified as appropriate for acquisition based on our investment criteria it is subjected to a rigorous evaluation process. This process includes a multi-tiered investment committee process ranging from pre-committee to final committee meetings. This process will ensure that all members of the investment committee agree with the findings from the due diligence period and that the portfolio in question is an appropriate investment for the company and its stockholders. The due diligence process includes case scenario financial modeling and sensitivity analysis, zip-code and neighborhood analysis, physical inspections by qualified engineers, BPO analysis to verify valuations are in line with or less than purchase price, title and legal review, and finally property manager vetting and qualification.

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Proactive Asset Management

Each time we acquire a portfolio of assets, we prepare a business plan specific for the portfolio that provides clear instructions to, and parameters for, our asset management personnel. Michael P. Soni, our Senior Advisor of Investments, currently serves as our only asset manager. We expect to hire additional asset managers and other asset management personnel as we continue to expand our operations. The asset management team’s primary responsibility will be to execute those business plans. Our asset managers will utilize our property managers’ offices as required for meetings that will limit the need for regional offices and related expenses. Our asset managers will proactively manage the property managers to reduce expenses and implement customer retention plans to keep our tenants in place for longer periods to reduce turns, vacancy, re-letting costs and increase stockholder returns. We also intend to hire third-party tax advisors to review and, if appropriate, appeal property tax bills every year to effectively manage our property tax expense.

The principal responsibilities of our asset management personnel will include:

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Property Management

We generally outsource our property management function to the existing property managers that are in place when we acquire a portfolio of assets. In obtaining these services, we first determine that these property managers can provide the services we need and operate under our oversight and within the budget of the business plan developed specifically for that portfolio. For their services, we currently pay our property managers a small percentage of gross revenue of the properties they manage plus leasing fees. Property managers assist us in executing the business plan we have developed for each portfolio they manage. The business plan includes occupancy goals, rental rates and increase goals, specific property level objectives and return expectations, clear and concise improvement, operational and disposition plans, annual budget and leasing plan.

The principal responsibilities of our property managers include:

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Management Information Systems and Technology

We intend to develop a proprietary cloud-based management information system that will enable comprehensive tracking, management and control of all required functions within a cost-efficient and scalable mobile and tablet user environment. We have invested considerable time and resources in the evaluation and development of these systems as we believe that these tools will facilitate effective and efficient management of disparate assets, scale its platform, and provide us with a unique and sustainable competitive advantage and sustain operating margins as we continue to grow. Corporate and in-field workflows and processes will be simple and highly automated, ensuring rapid adoption and compliance among employees and third-party service providers such as property management firms. This will enable rapid response to property and tenant issues, while providing executive-level visibility into all operational details on a real time basis. The system will also enable management to comply with strict regulatory compliance and governance requirements and will empower field personnel to respond autonomously within established corporate and budgetary parameters. Corporate email and business productivity tools will be deployed under SaaS (software-as-a-service) licensing arrangements to eliminate hardware and maintenance costs while improving performance and reliability.

We are in the process of evaluating several property management systems that can migrate and back up property data directly from local property managers, including enterprise management systems that are fully integrated, web-based and can centralize accounting and property management data in a single database. Such a system if and when implemented will enable us to view and track every aspect of our portfolio management in real time through a transparent system and provide a more efficient, streamlined and automated workflow. In addition, we are evaluating software for electronic payment processing, online procurement, automated invoice processing, property marketing websites, online services including rent payments, online leasing, integrated utility billing, automated rental pricing, online resident screening and call center support.

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Risk Management

We face various forms of risk in our business ranging from broad economic, housing market and interest rate risks, to more specific factors, such as credit risk related to our tenants, re-leasing of properties and competition for properties. We believe that the systems and processes developed by our experienced executive team since commencing our real estate investment operations in July 2012 will allow us to monitor, manage and ultimately navigate these risks.

Insurance

We maintain property and liability insurance coverage related to our SFR properties, and workers’ compensation coverage for our employees. We believe the policy specifications and insured limits under our insurance program are appropriate and adequate for our business and properties given the relative risk of loss, the cost of the coverage and industry practice. However, our insurance coverage is subject to substantial deductibles and carveouts, and we will be self-insured up to the amount of such deductibles and carveouts.

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So long as we qualify as a REIT, we generally will not be subject to federal income tax on our REIT taxable income that we distribute currently to our stockholders. If we fail to qualify as a REIT in any taxable year and do not qualify for certain statutory relief provisions, we will be subject to federal income tax at regular corporate rates and may be precluded from qualifying as a REIT for the subsequent four taxable years following the year during which we fail to qualify as a REIT. Even if we qualify as a REIT, we may be subject to certain federal, state and local taxes on our income or property. In addition, our TRS will be subject to federal, state and local taxes on its income or property.

Investment Company Act of 1940

We intend to conduct our operations so that neither we nor any of our subsidiaries are required to register as an investment company under the Investment Company Act of 1940, as amended, or the 1940 Act.

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INVESTMENT POLICIES AND POLICIES WITH RESPECT TO CERTAIN ACTIVITIES

The following is a discussion of our investment policies and our policies with respect to certain other activities, including financing matters and conflicts of interest. These policies may be amended or revised from time to time at the discretion of our Board of Directors, without stockholder approval. Any change to any of these policies by our Board of Directors, however, would be made only after a thorough review and analysis of that change, in light of then-existing business and other circumstances, and then only if, in the exercise of its business judgment, our Board of Directors believes that it is advisable to do so in our best interests. We intend to disclose any changes in our investment policies in periodic reports that we file or furnish under the Exchange Act. We cannot assure you that our investment objective will be attained.

Investments in Real Estate

Upon the closing of this offering, we expect to conduct substantially all of our investment activities through our operating partnership and its subsidiaries. We invest principally in single-family homes and other assets related to the single-family housing sector in select markets in the United States that we believe exhibit housing, economic, demographic, employment and other characteristics that make investments in single-family homes as investment properties for rental attractive.

We will conduct our investment activities in a manner that is consistent with the requirements applicable to REITs for federal income tax purposes. We pursue our investment objective through the ownership by our operating partnership of our assets. Our management team identifies and negotiates acquisition and other investment opportunities, subject to the oversight of our Board of Directors. Investments are also subject to our policy not to be treated as an investment company under the 1940 Act.

We do not have a specific policy to acquire assets primarily for capital gain or primarily for income, although we generally target properties that we believe will generate income in the near term. No limits have been set on the concentration of our investments in any one geographic location or property type. We currently anticipate that our real estate investments will continue to be concentrated in single-family homes. We anticipate that, over time, our real estate investments will become more diversified in terms of geographic market, but we expect our assets to be concentrated in certain markets that exhibit the characteristics that support our business and investment strategy.

Purchase and Sale of Investments

We expect to invest in our properties primarily for generation of current income and long-term capital appreciation. Although we do not currently intend to sell our properties, we may deliberately and strategically dispose of assets in the future and redeploy funds into new acquisitions and development opportunities that align with our strategic objectives.

Issuance of Additional Securities

If our Board of Directors determines that obtaining additional capital would be advantageous to us, we may, without stockholder approval, issue debt or equity securities, including preferred stock and including causing our operating partnership to issue additional units, retain earnings (subject to the distribution requirements applicable to REITs for federal income tax purposes) or pursue a combination of these methods. As long as our operating partnership is in existence, the proceeds of all equity capital raised by us will be contributed to our operating partnership in exchange for additional common or preferred units, which will dilute the ownership interests of the other limited partners.

We may offer shares of our common stock or other debt or equity securities in exchange for cash, real estate assets or other investment targets and to repurchase or otherwise re-acquire shares of our common stock or other debt or equity securities. We may issue preferred stock from time to time, in one or more classes or series, as authorized by our Board of Directors without the need for stockholder approval. We have not adopted a specific policy governing the issuance of senior securities at this time.

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Repurchase of Our Securities

We may repurchase shares of our common stock from time to time.

Reporting Policies

We file annual and periodic reports, proxy statements and other information, including audited financial statements, with the SEC. We will continue to make our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements and amendments to those reports or statements available free of charge on our website at www.revenhousingreit.com , under “Investor Relations — SEC Filings,” as soon as reasonably practicable after we file these materials with, or furnish them to, the SEC.

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MANAGEMENT

Executive Officers and Directors

Our Board of Directors consists of six directors. Of these six directors, we believe that five, constituting a majority, are considered “independent” with independence being determined in accordance with the listing standards established by the NASDAQ Capital Market.

Set forth below are the names, ages and positions of our directors and executive officers as of the date of this prospectus.

Name		Age		Position
Chad M. Carpenter		48		President, Chief Executive Officer, Chairman of the Board of Directors
Thad L. Meyer		53		Chief Financial Officer, Chief Operating Officer, Secretary
Jon Haahr		60		Director
Xiaofan Bai		31		Director
Xiaohang Bai		25		Director
Siyu Lan		36		Director
Guojuan Cheng		57		Director

Set forth below is biographical information for each of our directors and executive officers.

Chad M. Carpenter has served as our President and Chief Executive Officer and as a member of our Board of Directors since July 2, 2012, and as the Chairman of our Board of Directors since August 29, 2012. Mr. Carpenter also served as our Chief Financial Officer from July 2, 2012 to December 26, 2013 and as our Secretary from July 2, 2012 to July 5, 2012. He has also served as the Chief Executive Officer of our subsidiaries, Reven Housing Georgia, LLC and Reven Housing Texas, LLC, since October 26, 2012 and October 9, 2013, respectively. Mr. Carpenter is the Chief Executive Officer and a member of the Board of Directors of Reven Capital, LLC (“Reven Capital”), a private real estate investment firm focused on opportunistic investing, positions he has held since he founded Reven Capital in January 2009. Mr. Carpenter oversees all aspects of Reven Capital’s operations and chairs all investment committees and boards for each of its funds. Prior to founding Reven Capital, Mr. Carpenter served in various executive officer capacities, including Chief Executive Officer and Chief Financial Officer, and a member of the investment committee of Equastone, LLC (“Equastone”) since he co-founded the company in 1994. Equastone was primarily engaged in the investment of office properties in the western and southern regions of the United States. Mr. Carpenter has been involved in over $2 billion in real estate transactions, with over 25 years of experience in real estate, investing, fund management, operations and brokerage across multiple property types. In addition, Mr. Carpenter has experience with international investments and the acquisition of distressed debt and related foreclosure. He is a frequent speaker on the topic of real estate investing and real estate capital markets. In 2005, Mr. Carpenter was selected as one of Real Estate Southern California’s “40 Under 40.” In 2007, he was a finalist for the Ernst & Young Entrepreneur of the Year Award in San Diego and was also chosen as one of the “20 Rising Stars of Real Estate” globally by Institutional Investor News. Mr. Carpenter also currently serves on the Board of Directors of Western Residential Opportunity Fund, LLC, and he was a member of the Board of Directors of Dahc Investments, Inc. from January 2009 to December 2012. Mr. Carpenter holds a Bachelor of Arts degree in Economics from the University of Southern California. We believe that Mr. Carpenter’s experience as president and chief executive officer of Reven Housing REIT, Inc. and his many years of industry experience qualify him to be a member of our Board of Directors.

Jon K. Haahr has served as a member of our Board of Directors since July 5, 2012. Mr. Haahr is senior managing principal of Silver Portal Capital, LLC, an investment and merchant bank focusing exclusively on the real estate sector. In this role, Mr. Haahr provides strategic and financial advice and capital formation services to real estate clients with interests in a wide range of commercial, healthcare and hospitality properties. Prior to founding Silver Portal in 2001, Mr. Haahr was co-head and managing director of real estate investment banking for Wachovia Securities from 1999 to 2000. Mr. Haahr founded and managed the Real Estate and Lodging Group at EVEREN Securities, Inc., the successor firm to Kemper Securities, from 1991 to 2000. Mr. Haahr also served on the board of directors of Clarion Partners Property Trust Inc. from June 2010 to July 2013 and as non-executive chairman of the board of directors of Genea Energy Partners,

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Inc. from April 2011 to August 2011. Other past board directorships include Great Lakes REIT, Inc. (NYSE: GL) and Arlington Hospitality, Inc. (NASDAQ: HOST). He also previously served as a Trustee of the James A. Graaskamp Center for Real Estate School at the University of Wisconsin in Madison. Mr. Haahr maintains a number of industry affiliations, including the Urban Land Institute, an industry association representing community builders and Pension Real Estate Association, an industry association for institutional real estate investors. Mr. Haahr is a certified public accountant and holds a Bachelor of Arts in Economics from Iowa State University in Ames and a Master of Business Administration from the University of Iowa in Iowa City. We believe that Mr. Haahr’s real estate investment banking experience, his prior experience on the board of directors of public and private companies, and his certified public accountant designation qualify him to be a member of our Board of Directors.

Xiaofan Bai was appointed to our Board of Directors on September 27, 2013. He is currently the Director of Allied Fortune (HK) Management Ltd, which is a fund and asset management company focusing primarily in the real estate sector. In this role, Mr. Bai oversees all aspects of Allied Fortune’s operations and manages its investment funds and real assets. Prior to founding Allied Fortune in 2012, Mr. Bai was the Senior Investment Manager in China Pacific Insurance Co., the third largest insurance company in China, from June 2011 to May 2012. Mr. Bai previously worked for the real estate investment banking team at Macquarie Bank, where he participated in deals in Australia, Hong Kong, China, Japan and the USA and was primarily responsible for due diligence, corporate valuation, negotiation and other investment banking activities. From March 2009 to April 2011, Mr. Bai worked in the Proprietary Trading Department of ShenYinWanGuo Securities Co., which was the first securities company in China to have a shareholding structure. Mr. Bai holds a Bachelor’s Degree in Finance and a Master’s Degree in Accounting, both from the University of Sydney. We believe that Mr. Bai’s extensive professional experience in investment banking, asset management and corporate management qualify him to be a member of our Board of Directors.

Guojuan Cheng was appointed to our Board of Directors on September 27, 2013. Ms. Cheng worked for the Bank of China as a loan manager from March 1988 to October 2011. She has extensive expertise in corporate financing, corporate lending and relationship management. Ms. Cheng initiated and executed a large number of corporate lending deals for the Bank of China. Ms. Cheng holds a Bachelor’s Degree in Commerce from Shanghai University. We believe that Ms. Cheng’s extensive professional experience in banking and finance qualify her to be a member of our Board of Directors.

Siyu Lan was appointed to our Board of Directors on September 27, 2013. Ms. Lan has served as the Chief Financial Officer of Allied Fortune (HK) Management Ltd since August 2013. In this role, Ms. Lan oversees all company accounting practices and directs financial strategy, planning and forecasts. Prior to joining Allied Fortune, Ms. Lan worked for China Development Bank as a senior loan officer from March 2009 to June 2012. She has extensive experience in corporate lending, risk management, asset valuation and management accounting. Ms. Lan holds a Master of Accounting from the University of Sydney and an Investment & Finance degree from Macquarie University Australia. We believe that Ms. Lan’s extensive professional experience in risk management and accounting qualify her to be a member of our Board of Directors.

Xiaohang Bai was appointed to our Board of Directors on September 27, 2013. Mr. Bai has served as the Chief Investment Officer of Allied Fortune (HK) Management Ltd since August 2013. In this role, Mr. Bai leads the research team on global equities and provides professional skills in asset management. Mr. Bai specializes in real estate stock investment and investment fund management. Mr. Bai is a FRM Part II candidate. He holds a Bachelor of Science degree in Finance from the Shanghai University of International Business and Economics and a Master of Science degree in Finance from Clark University. We believe that Mr. Bai’s extensive professional experience relating to investments in global equities, especially in the real estate sector, qualify him to be a member of our Board of Directors.

Thad L. Meyer has served as our Secretary since October 30, 2013, as our Chief Financial Officer since December 26, 2013, and as our Chief Operating Officer since April 17, 2014. Mr. Meyer is President of Alliance Turnaround Management, Inc., a position he has held since November 2002. Alliance Turnaround Management is a problem resolution firm that specializes in distressed real estate opportunities. Since February 2009, Mr. Meyer has also served as the Chief Financial Officer of Reven Capital. From March 2011

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to April 2013, Mr. Meyer served as principal and Chief Operating Officer of Southern California Investors, Inc., a firm specializing in the acquisition, improvement and sale of distressed single-family homes. Additionally, from November 2004 to February 2009, Mr. Meyer served as the Chief Financial Officer of Equastone. Mr. Meyer is a Certified Public Accountant, Certified Turnaround Professional, and a California Real Estate Broker. Mr. Meyer holds a Bachelor of Science degree in Accounting from Colorado State University.

Family Relationships

Ms. Cheng is the mother of Mr. Xiaofan Bai and the aunt of Mr. Xiaohang Bai, and Mr. Xiaofan Bai and Mr. Xiaohang Bai are cousins. There are no other family relationships between any of our directors and executive officers.

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administration of our Amended and Restated 2012 Incentive Compensation Plan, and reviews compensation received by directors for service on our Board of Directors and its committees. Our Board of Directors has determined that each of the members of our Compensation Committee satisfies the NASDAQ Capital Market’s independence standards.

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee, which is composed of     ,     , and     and for which      currently serves as the Chairman, assists our Board of Directors in identifying and recommending candidates to fill vacancies on our Board of Directors and for election by the stockholders, recommending committee assignments for directors, overseeing our Board of Directors’ annual evaluation of the performance of our Board of Directors, its committees and individual directors, and developing and recommending to our Board of Directors appropriate corporate governance policies, practices and procedures for our Company. Our Board of Directors has determined that each of the members of our Nominating and Corporate Governance Committee satisfies the NASDAQ Capital Market’s independence standards.

Code of Ethics

Our Board of Directors has adopted a code of ethics that applies to all of our employees, including our principal executive officer, principal financial officer and principal accounting officer or controller, or persons performing similar functions. Among other matters, our code of ethics is designed to deter wrongdoing and to promote the following:

Any waiver of the code of ethics for our executive officers, directors or employees may be made only by our Board of Directors or a committee of our Board of Directors and will be promptly disclosed as required by law or stock exchange regulations.

Limitations on Liabilities and Indemnification of Directors and Officers

For information concerning limitations of liability and indemnification applicable to our directors, executive officers and, in certain circumstances, employees, see “Certain Provisions of Maryland Law and of Our Charter and Bylaws — Limitation of Directors’ and Officers’ Liability and Indemnification.”

Directors’ and Officers’ Liability Insurance

We expect to obtain directors’ and officers’ liability insurance insuring our directors and officers against liability for acts or omissions in their capacities as directors or officers upon the completion of this offering. We have entered into indemnification agreements with key officers and directors, and such persons shall also have indemnification rights under applicable laws, and our charter and bylaws. For additional information, see “Certain Provisions of Maryland Law and of Our Charter and Bylaws — Limitation of Directors’ and Officers’ Liability and Indemnification.”

Interests in Our Investments

We are permitted to make or acquire investments in which our directors, officers or stockholders or any of our or their respective affiliates have direct or indirect pecuniary interests. However, any such transaction in which our directors or any of their respective affiliates has any interest would be subject to the restrictions and procedures described below.

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Board Leadership Structure

Mr. Carpenter has served as our Chief Executive Officer since July 2012 and as our chairman of the board since August 2012. While we do not have a formal policy on whether the Chairman and Chief Executive Officer positions should be separate or combined, our Board of Directors has determined that at this time it is appropriate for the Chairman and the Chief Executive Officer to be the same individual. The Board of Directors has also determined, for the reasons set forth herein, that a lead independent director is not necessary and has not appointed one at this time. In making these determinations, the Board of Directors considered the relative size of the Company, the size of the Board of Directors and the fact that all remaining members of the Board of Directors are independent Directors. The Board believes that having a combined role, considering the Company’s size, enhances the ability to provide insight and direction on important strategic initiatives to both management and the Board, and to ensure that they act with a common purpose. We also believe that our overall corporate governance policies and practices adequately address any governance concerns raised by the dual Chief Executive Officer and Chairman role. Separating the roles would potentially result in less effective management and governance processes through undesirable duplication of work and, in worst case, lead to a blurring of the current clear lines of accountability and responsibility.

Role of the Board in Risk Oversight

One of the key functions of our Board of Directors is informed oversight of our risk management process. Our Board of Directors will administer this oversight function directly, with support from its three standing committees: the Audit Committee, the Nominating and Corporate Governance committee and the Compensation Committee, each of which will address risks specific to its respective areas of oversight. In particular, our Audit Committee has the responsibility to consider and discuss our major financial risk exposures and the steps our management has taken to monitor and control these exposures, including guidelines and policies to govern the process by which risk assessment and management is undertaken. The Audit Committee also monitors compliance with legal and regulatory requirements, in addition to oversight of the performance of our internal audit function. Our Nominating and Corporate Governance Committee will monitor all current and proposed property investments, evaluate the performance of such investments, monitor the effectiveness of our corporate governance guidelines, including whether they are able to prevent illegal or improper liability-creating conduct. Our Compensation Committee assesses and monitors whether any of our compensation policies and programs has the potential to encourage excessive risk-taking.

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Executive Compensation

SUMMARY COMPENSATION TABLE

Name and Principal Position		Year				Salary				Bonus				Stock Awards				Option Awards				Nonequity Incentive Plan Compensation				Nonqualified Deferred Compensation Earnings				All Other Compensation				Total
Chad M. Carpenter, President, CEO, and Chairman (1)			2013			$	60,000				—				—				—				—				—				—			$	60,000
			2012				—				—				—				—				—				—				—				—
Thad L. Meyer, CFO, COO, and Secretary (2)			2013			$	9,000				—				—				—				—				—				—			$	9,000
			2012				—				—				—				—				—				—				—				—
Michael P. Soni, Former Secretary (3)			2013				—				—				—				—				—				—			$	118,549			$	118,549
			2012				—				—				—				—				—				—			$	27,500			$	27,500

(1)

Mr. Carpenter has served as our President, CEO and director since July 2, 2012, and as Chairman since August 29, 2012. Mr. Carpenter also served as our CFO from July 2, 2012 to December 26, 2013 and as our Secretary from July 2, 2012 to July 5, 2012. Mr. Carpenter received no compensation until September 2013, when the salary provisions of his employment agreement were triggered based on our company reaching the benchmark of at least $10 million of capital raised (net of taxes and expenses). Mr. Carpenter has been receiving monthly salary payments of $20,000 since October 1, 2013 in accordance with that agreement.

(2)

Mr. Meyer has served as our Secretary since October 30, 2013, as our CFO since December 26, 2013, and as our COO since April 17, 2014. Mr. Meyer did not receive any compensation or payments in 2012. We recently entered into an employment agreement with Mr. Meyer, which is filed as an exhibit to the registration statement of which this prospectus is a part. Mr. Meyer has been receiving monthly salary payments of $17,500 since January 1, 2014. Prior to Mr. Meyer joining our company as Secretary and CFO, Alliance Turnaround Management, Inc., a company of which Mr. Meyer is the owner and President, provided certain consulting services to us and was paid $66,295 in fees in 2013 and $13,515 in fees in 2012. These fees paid to Alliance Turnaround were not executive compensation and therefore are not included in the Summary Compensation Table. For more details regarding these consulting services provided to us, see the disclosure regarding Alliance Turnaround Management, Inc., in “Certain Relationships and Related Party Transactions” below.

(3)

Mr. Soni was our Secretary from July 5, 2012 until October 30, 2013. During the fiscal year ended December 31, 2013, we paid an aggregate of $118,549 in consulting fees to Mr. Soni. During the fiscal year ended December 31, 2012, we paid an aggregate of $27,500 in consulting fees to Mr. Soni. Other than such consulting fees, Mr. Soni did not receive any compensation or payments in 2012 or 2013. We do not have an employment agreement with Mr. Soni. Mr. Soni has been receiving monthly consulting payments since November 1, 2013 on a time and materials basis at a rate of $3,076.92 per week.

Executive Officers

Except as described above regarding the payment of certain consulting fees to Michael P. Soni when he served as our Secretary, we have not paid any salaries or other compensation to any of our executive officers from our inception until September 2013. Pursuant to his employment agreement as described below, effective as of the date we received at least $10 million of investment capital (net of taxes and expenses), Mr. Carpenter became entitled to begin receiving an annual base salary of $240,000. We reached that benchmark in September 2013, and Mr. Carpenter received $60,000 in salary payments in 2013 pursuant to his employment agreement. Other than Mr. Carpenter’s salary and the compensation that we pay Thad L. Meyer in connection with his services as our Chief Financial Officer, Chief Operating Officer and Secretary, we do not expect to pay any other such salaries or compensation in the foreseeable future until such time as we are able to secure significant financing or profitability. In addition, we had not granted any options or other equity awards as of December 31, 2013, and therefore there are no outstanding equity awards at fiscal year-end for fiscal 2013. As such, as of the date of this prospectus we have no information to report in the form of the Outstanding Equity Awards at Fiscal Year-End Table.

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Summary of the Amended and Restated 2012 Incentive Compensation Plan

In December 2013, we adopted, and our stockholders approved, the 2012 Plan, pursuant to which 33,000,000 shares of our common stock are reserved for issuance as grants of options or other awards to officers, directors, employees, consultants and other persons who provide services to us or any related entity. Under the 2012 Plan, options may be granted at an exercise price greater than or equal to the market value at the date of the grant, and for owners of 10% or more of the voting shares, at an exercise price of not less than 110% of the market value. Awards are exercisable over a period of time as determined by a committee designated by the Board of Directors, but in no event longer than ten years. We have granted 975,000 shares under the 2012 Plan as of the date of this prospectus.

The principal terms, conditions and features of the 2012 Plan are summarized below. This summary is qualified by reference to the full text of the plan found in the exhibits to this prospectus.

General; Types of Awards; Number of Shares

The 2012 Plan provides for the grant of options to purchase shares of common stock, restricted stock, stock appreciation rights (“SARs”) and restricted stock units (rights to receive, in cash or stock, the market value of one share of our common stock). Incentive stock options (“ISOs”) may be granted only to employees. A total of 33,000,000 shares of our common stock are reserved for issuance upon exercise of awards granted under the 2012 Plan. The 2012 Plan will terminate as to grants of awards after 10 years from the effective date, unless it is terminated earlier by our Board of Directors.

Administration

The 2012 Plan is administered by our Compensation Committee of our Board of Directors (the “Administrator”) as provided in the 2012 Plan. Our Compensation Committee will have the authority to select the eligible participants to whom awards will be granted, to determine the types of awards and the number of shares covered and to set the terms, conditions and provisions of such awards, to cancel or suspend awards under certain conditions, and to accelerate the exercisability of awards. Our Compensation Committee will be authorized to interpret the 2012 Plan, to establish, amend, and rescind any rules and regulations relating to the 2012 Plan, to correct defects and reconcile inconsistencies, to determine the terms of agreements entered into with recipients under the 2012 Plan, and to make all other determinations that may be necessary or advisable for the administration of the 2012 Plan.

Eligibility

Options and other awards may be granted under the 2012 Plan to directors, officers, employees and consultants of our company and any of our subsidiaries, provided that the services of such consultants are not in connection with the offer or sale of securities in a capital-raising transaction and do not directly or indirectly promote or maintain a market for our securities. At the date of this prospectus, all of our officers, directors and employees would have been eligible to receive awards under the 2012 Plan.

Stock Option and SAR Grants

The exercise price per share of our common stock purchasable upon exercise of any stock option or SAR will be determined by our Compensation Committee, but cannot in any event be less than 100% of the fair market value of our common stock on the date the award is granted. Our Compensation Committee will determine the term of each stock option or SAR (subject to a maximum term of 10 years) and each option or SAR will be exercisable pursuant to a vesting schedule determined by our Compensation Committee. The grants and the terms of ISOs will be restricted to the extent required for qualification as ISOs by the U.S. Internal Revenue Code of 1986, as amended. Subject to approval of our Compensation Committee, options or SARs may be exercised by payment of the exercise price in cash, shares of common stock or pursuant to a “cashless exercise” through a broker-dealer under an arrangement approved by our Compensation Committee. Our Compensation Committee may require the grantee to pay to us any applicable withholding taxes that we are required to withhold with respect to the grant or exercise of any option. The withholding tax may be paid in cash or, subject to applicable law, our Compensation Committee may permit the grantee to satisfy these obligations by the withholding or delivery of shares of our common stock. We may withhold from any shares of our common stock that may be issued pursuant to an option or from any cash amounts otherwise due from us to the recipient of the option an amount equal to such taxes.

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Restricted Stock Grants

Restricted shares may be sold or awarded for consideration determined by our Compensation Committee, including cash, full-recourse promissory notes, as well as past and future services. Any award of restricted shares will be subject to a vesting schedule determined by our Compensation Committee. Any restricted shares that are not vested will be subject to rights of repurchase, rights of first refusal or other restrictions as determined by our Compensation Committee. In general, holders of restricted shares will have the same voting, dividend and other rights as our other stockholders.

Adjustments

In the event of any change affecting shares of our common stock by reason of any stock dividend or split, recapitalization, merger, consolidation, spin-off, combination or exchange of shares or other similar corporate change, or any distribution to stockholders other than cash dividends, our Compensation Committee will make substitutions or adjustments in the aggregate number of shares that may be distributed under the 2012 Plan, and in the number and types of shares subject to, and the exercise prices under, outstanding awards granted under the 2012 Plan, in accordance with Section 10 and other provisions of the 2012 Plan.

Transferability

Unless otherwise permitted by the 2012 Plan and approved by our Compensation Committee as permitted by the 2012 Plan, no award will be assignable or otherwise transferable by the grantee other than by will or the laws of descent and distribution and, during the grantee’s lifetime, an award may be exercised only by the grantee.

Amendment and Termination

Our Board of Directors may amend the 2012 Plan in any and all respects without stockholder approval, except as such stockholder approval may be required under applicable law or pursuant to the listing requirements of any national market system or securities exchange on which our equity securities may be listed or quoted.

Unless sooner terminated by our Board of Directors, the 2012 Plan will terminate as to further grants of awards on August 29, 2022.

Tax Aspects Regarding Options

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If the grantee disposes of the shares within two years of the grant of the ISO or within one year of exercise of the ISO, the disposition is a “disqualifying disposition,” and the grantee will have taxable ordinary income in the year of the disqualifying disposition equal to the lesser of (a) the difference between the fair market value of the shares and the exercise price of the shares at the time of option exercise, or (b) the difference between the sales price of the shares and the exercise price of the shares. Any gain realized from the time of option exercise to the time of the disqualifying disposition would be long-term or short-term capital gain, depending on whether the shares were sold more than one year or up to and through one year respectively, after the ISO was exercised.

We are not entitled to a deduction as a result of the grant or exercise of an ISO. If the grantee has ordinary income taxable as compensation as a result of a disqualifying disposition, we will then be entitled to a deduction in the same amount as the grantee recognizes ordinary income.

Awards under the 2012 Stock Incentive Plan

Awards under the 2012 Plan will be made by our Compensation Committee. Our Compensation Committee and our Board of Directors have approved the grant of 975,000 shares under the 2012 Plan as of the date of this prospectus. Our Compensation Committee does not currently have plans to grant additional stock options or other awards to any individual or group of individuals under the 2012 Plan.

Equity Compensation Plan Information

As of the date of this prospectus, we have not granted any options under our 2012 Plan nor have we granted any non-Plan options. We have granted 975,000 shares in restricted stock awards of shares of our common stock under our 2012 Plan. As of the date of this prospectus, 32,025,000 shares of our common stock initially reserved for issuance under our 2012 Plan remain available for future issuance to employees, directors, consultants, and other service providers. The following table sets forth certain information as of December 31, 2013 about our 2012 Plan and the non-Plan options.

Plan Category		(a) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (1)				(b) Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights				(c) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected In Column (a))
Equity compensation plans approved by security holders			—			$	N/A				33,000,000
Equity compensation plans not approved by security holders			—			$	N/A				-0-
Total			—			$	N/A				33,000,000

Voting Agreement

In connection with the private placement of our common stock in September 2013 (the “September 2013 Private Placement”), our company, the investors party to the related Stock Purchase Agreement, and Chad M. Carpenter (the “Founder”), entered into a voting agreement (the “Voting Agreement”), pursuant to which they agreed to vote their shares to elect four members of our Board of Directors as designated by the majority-in-interest of the investors (the “Investor Designees”) and two members of our Board of Directors as designated by the Founder (the “Founder Designees”). The Voting Agreement further provides that one of the Founder Designees shall be our Chief Executive Officer. The Voting Agreement will terminate upon the earlier of: (i) the closing date of our first public offering of shares of our common stock; (ii) upon the approval by our Board of Directors to apply for listing of our common stock on the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market, the NYSE Euronext or the New York Stock Exchange; or (iii) the agreement by the Founder and a majority-in-interest of the investors. Mr. Xiaofan Bai, Mr. Xiaohang Bai, Ms. Lan and Ms. Cheng are currently serving on the Board of Directors as the Investor Designees, and Mr. Carpenter and Mr. Haahr are currently serving on the Board of Directors as the Founder Designees. On May 23, 2014, the Board of Directors approved our application to list our common stock on the NASDAQ Capital Market, and accordingly, the Voting Agreement was terminated pursuant to such board approval.

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Employment Agreements

Chad M. Carpenter

On March 4, 2013, we entered into an employment agreement with Chad M. Carpenter in connection with Mr. Carpenter’s services as our Chief Executive Officer. Mr. Carpenter has served as our President, Chief Executive Officer, Chief Financial Officer and a member of our Board of Directors since July 2012 when Mr. Carpenter joined our company and is currently also the Chairman of our Board of Directors.

The employment agreement provides for an initial term of 5 years and automatically renews for successive 2-year terms, unless we or Mr. Carpenter elects not to renew. Under the employment agreement, effective as of the date we have received at least $10 million of capital (net of taxes and expenses), Mr. Carpenter is entitled to begin receiving an annual base salary of $240,000. As of September 2013, we reached that benchmark, and Mr. Carpenter began receiving salary payments pursuant to the employment agreement. Mr. Carpenter will be entitled to bonuses ranging from 50% to 200% of his base salary based on the satisfaction of performance criteria to be established by the Board of Directors. Mr. Carpenter will also be entitled to participate in any benefit plans or other incentive plans that may be offered by us to employees and executives and will be eligible to receive stock options and other equity awards under our 2012 Plan as determined by the Board. In the event that Mr. Carpenter’s employment is terminated by us without cause, Mr. Carpenter leaves for good reason as specified in the employment agreement or the employment agreement is not extended by us without cause or by Mr. Carpenter for good reason, then Mr. Carpenter will be entitled to receive a severance payment equal to 2 times the sum of his annual base salary and target bonus plus a lump-sum payment equal to the greater of 1% of the value of our company at the time of notice of termination or $2,000,000, less any gross amounts received or realized by Mr. Carpenter in respect of any stock options or equity awards granted to him during the term his employment (the “Severance Payment”). Mr. Carpenter will also be entitled to the Severance Payment if his employment is terminated by us without cause or by Mr. Carpenter for good reason during the 18-month period following a change in control of our company. Furthermore, we have agreed to reimburse Mr. Carpenter for actual expenses incurred in connection with the organization and start up of our business as a housing REIT and any additional expenses incurred during the term of his employment. In addition, on each anniversary of Mr. Carpenter’s employment, our Compensation Committee shall undertake a compensation review of comparable public companies in order to determine the amount of any increases to Mr. Carpenter’s base salary, based on competitive compensation of chief executive officers at such comparable public companies, which amount should be consistent with at least the fiftieth (50%) percentile of such comparable compensation.

Thad L. Meyer

On April 17, 2014, we entered into an employment agreement with Thad L. Meyer in connection with Mr. Meyer’s services as our Chief Financial Officer, Chief Operating Officer, and Secretary. Mr. Meyer has served as our Secretary since October 30, 2013, as Chief Financial Officer since December 26, 2013, and as Chief Operating Officer since April 17, 2014.

The employment agreement provides for an initial term of five years and automatically renews for successive two-year terms, unless we or Mr. Meyer elects not to renew. Under the employment agreement, Mr. Meyer is entitled to receive an annual base salary of $210,000. Mr. Meyer will be entitled to bonuses ranging from 50% to 200% of his base salary based on the satisfaction of performance criteria to be established by the Compensation Committee of the Board of Directors. Mr. Meyer will also be entitled to participate in any benefit plans or other incentive plans that may be offered by us to employees and executives and will be eligible to receive stock options and other equity awards under our 2012 Plan as determined by the Board. In the event that Mr. Meyer’s employment is terminated by us without cause or Mr. Meyer leaves for good reason as specified in the employment agreement, then Mr. Meyer will be entitled to receive a severance payment equal to the sum of his annual base salary and target bonus (the “Severance Payment”). Mr. Meyer will also be entitled to the Severance Payment if his employment is terminated by us without cause or by Mr. Meyer for good reason during the 12-month period following a change in control of our company. Furthermore, we have agreed to reimburse Mr. Meyer for all reasonable expenses actually paid or incurred by him during the term of his employment in the course of and pursuant to the business of our company. The employment agreement also binds Mr. Meyer to a standard non-competition covenant for the term of the agreement plus the one-year period immediately following termination of his employment.

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PRINCIPAL STOCKHOLDERS

The table below sets forth the beneficial ownership of our common stock, as of May 23, 2014, by:

•

All of our current directors and executive officers, individually;

•

All of our current directors and executive officers, as a group; and

•

All persons who beneficially own more than 5% of our outstanding common stock.

The beneficial ownership of each person was calculated based on 131,835,880 shares of our common stock outstanding as of May 23, 2014. The SEC has defined “beneficial ownership” to mean more than ownership in the usual sense. For example, a person has beneficial ownership of a share not only if he owns it in the usual sense, but also if he has the power (solely or shared) to vote, sell or otherwise dispose of the share. Beneficial ownership also includes the number of shares that a person has the right to acquire within 60 days of May 23, 2014, pursuant to the exercise of options or warrants or the conversion of notes, debentures or other indebtedness, but excludes stock appreciation rights. Two or more persons might count as beneficial owners of the same share. The inclusion herein of any shares listed as beneficially owned does not constitute an admission of beneficial ownership. Each person named in the table has sole voting and investment power with respect to all of the shares of our common stock shown as beneficially owned by such person, except as otherwise set forth in the notes to the table. Unless otherwise noted, the address of the following persons listed below is c/o Reven Housing REIT, Inc., 7911 Herschel Avenue, Suite 201, La Jolla, California 92037.

Name and Address of Beneficial Owner		Number of Shares Beneficially Owned				Percentage Beneficially Owned Prior to the Offering (1)				Percentage Beneficially Owned After the Offering (2)
5% Owners:
King Apex Group Holdings II Limited (3)			37,500,000				28.4	%
King Apex Group Holdings III Limited (3)			37,500,000				28.4	%
King Apex Group Holdings IV Limited (3)			43,000,000				32.6	%
Executive Officers and Directors:
Chad M. Carpenter (4)			11,578,060				8.6	%
Jon Haahr (5)			625,000				*
Xiaofan Bai (6)			118,187,500				89.6	%
Xiaohang Bai			87,500				*
Siyu Lan			37,500				*
Guojuan Cheng			37,500				*
Thad L. Meyer			10,000				*
All executive officers and directors as a group (7 persons) (4)			130,563,060				96.6	%

*

Less than one percent.

(1)

Assumes 131,835,880 shares of common stock are outstanding prior to the offering.

(2)

Assumes      shares of common stock are outstanding immediately following completion of the offering.

(3)

Address is 28/C, 500 Zhangyang Road, Shanghai, China.

(4)

Includes 3,260,880 shares underlying common stock purchase warrants held by Mr. Carpenter exercisable as of January 1, 2014 and 10,000 shares owned by Mr. Carpenter’s minor children.

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Reven Capital, LLC

We sub-lease our office space on a month-to-month basis at a cost of $3,000 per month (which is at the same rate as the underlying lease) from Reven Capital, LLC, which is wholly owned by Chad M. Carpenter, our Chairman of the Board, President, Chief Executive Officer and a shareholder. In addition, Reven Capital, LLC has previously advanced operating expenses for our company, which totaled $266,877 for the fiscal year ended 2012 and $148,438 for the fiscal year ended 2013. These amounts were due on demand, unsecured and non-interest bearing and were paid off in total in 2013.

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MARKET INFORMATION AND RELATED STOCKHOLDER MATTERS

Market Information

Our common stock has been quoted on the OTCQB quotation platform since December 2010. From December 2010 to August 2012, our common stock was quoted on the OTCQB under the symbol “BRFG”. Since August 2012, our common stock has been quoted under the symbol “RVEN”. There had been no trading of our common stock until December 2012. However, we consider our common stock to be “thinly traded” and any reported sale prices may not be a true market-based valuation of the common stock.

Our stockholders have authorized our Board of Directors to effect a reverse stock split of our outstanding common stock at a specific ratio within a range of not less than 1-for-12 and not more than 1-for-50. All share and per share information in the table below does not reflect the reverse stock split (which we intend to complete prior to the consummation of the offering).

The following table sets forth the quarterly high and low sales prices of our common shares as reported on the OTCQB for the periods indicated.

		High				Low
2014:
First Quarter		$	0.55			$	0.38
Second Quarter (through May 21, 2014)		$	0.55			$	0.50
2013:
First Quarter		$	1.00			$	1.00
Second Quarter		$	1.00			$	0.35
Third Quarter		$	0.40			$	0.35
Fourth Quarter		$	0.47			$	0.38
2012:
First Quarter			N/A				N/A
Second Quarter			N/A				N/A
Third Quarter			N/A				N/A
Fourth Quarter		$	1.02			$	1.02

The closing sales price of our common shares as of May 21, 2014 was $0.50.

Holders of Record

As of May 21, 2014, there were approximately 84 holders of record of our common stock.

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each such class or series. These actions can be taken without stockholder approval, unless stockholder approval is required by applicable law, the terms of any other class or series of our stock or the rules of any stock exchange or automated quotation system on which our stock may be then listed or quoted.

Power to Increase or Decrease Authorized Stock and Issue Additional Shares of Our Common and Preferred Stock

Our charter authorizes our Board of Directors, with the approval of a majority of the entire Board of Directors, to approve an amendment to our charter to increase or decrease the aggregate number of authorized shares of stock or the number of authorized shares of stock of any class or series without stockholder approval. We believe that the power of our Board of Directors to increase or decrease the number of authorized shares of stock and to classify or reclassify unissued shares of our common stock or preferred stock and thereafter to cause us to issue such shares of stock will provide us with increased flexibility in structuring possible future financings and acquisitions and in meeting other needs which might arise. The additional classes or series, as well as the additional shares of stock, will be available for issuance without further action by our stockholders, unless such action is required by applicable law, the terms of any other class or series of stock or the rules of any stock exchange or automated quotation system on which our securities may be listed or traded. Although our Board of Directors does not intend to do so, it could authorize us to issue a class or series that could, depending upon the terms of the particular class or series, delay, defer or prevent a transaction or a change in control of our company that might involve a premium price for our stockholders or otherwise be in their best interests.

Restrictions on Ownership and Transfer

In order to qualify as a REIT under the Code, our shares of stock must be beneficially owned by 100 or more persons during at least 335 days of a taxable year of 12 months (other than the first year for which an election to be a REIT has been made) or during a proportionate part of a shorter taxable year. Also, not more than 50% of the value of our outstanding shares of capital stock may be owned, directly or indirectly, by five or fewer individuals (as defined in the Code to include certain entities) during the last half of a taxable year (other than the first year for which an election to be a REIT has been made).

Because our Board of Directors believes it is at present in our best interests for us to qualify as a REIT, our charter, subject to certain exceptions, contains restrictions on the ownership and transfer of shares of our stock that are intended to assist us in complying with these requirements, among other purposes. Our charter provides that, subject to certain exceptions, no person may beneficially or constructively own more than 9.8% in value or in number of shares, whichever is more restrictive, of our outstanding shares of common stock or more than 9.8% in value or number of shares, whichever is more restrictive, of the aggregate outstanding shares of all classes and series of our capital stock.

Our charter also prohibits any person from:

Our Board of Directors, in its sole discretion, may exempt (prospectively or retroactively) a person from the 9.8% ownership limits and other restrictions in our charter and may establish or increase an excepted holder percentage limit for such person if we obtain such representations and undertakings as our Board of Directors deems appropriate in order to conclude that granting the exemption and/or establishing or increasing the excepted holder percentage limit will not cause us to fail to qualify as a REIT. Our Board of Directors may require a ruling from the IRS or an opinion of counsel, in either case in form and substance satisfactory to our Board of Directors, in its sole discretion, in order to determine or ensure our status as a REIT.

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Any attempted transfer of shares of our capital stock which, if effective, would violate any of the restrictions described above will result in the number of shares of our capital stock causing the violation (rounded up to the nearest whole share) to be automatically transferred to a trust for the exclusive benefit of one or more charitable beneficiaries, except that any transfer that results in the violation of the restriction relating to shares of our capital stock being beneficially owned by fewer than 100 persons will be null and void. In either case, the proposed transferee will not acquire any rights in those shares. The automatic transfer will be deemed to be effective as of the close of business on the business day prior to the date of the purported transfer or other event that results in the transfer to the trust. Shares held in the trust will be issued and outstanding shares. The proposed transferee will not benefit economically from ownership of any shares held in the trust, will have no rights to dividends or other distributions and will have no rights to vote or other rights attributable to the shares held in the trust. The trustee of the trust will have all voting rights and rights to dividends or other distributions with respect to shares held in the trust. These rights will be exercised for the exclusive benefit of the charitable beneficiary. Any dividend or other distribution paid prior to our discovery that shares have been transferred to the trust will be paid by the recipient to the trustee upon demand. Any dividend or other distribution authorized but unpaid will be paid when due to the trustee. Any dividend or other distribution paid to the trustee will be held in trust for the charitable beneficiary. Subject to Maryland law, the trustee will have the authority (1) to rescind as void any vote cast by the proposed transferee prior to our discovery that the shares have been transferred to the trust and (2) to recast the vote in accordance with the desires of the trustee acting for the benefit of the charitable beneficiary. However, if we have already taken irreversible corporate action, then the trustee will not have the authority to rescind and recast the vote.

Within 20 days of receiving notice from us that shares of our stock have been transferred to the trust, the trustee will sell the shares to a person, designated by the trustee, whose ownership of the shares will not violate the above ownership and transfer limitations. Upon the sale, the interest of the charitable beneficiary in the shares sold will terminate and the trustee will distribute the net proceeds of the sale to the proposed transferee and to the charitable beneficiary as follows. The proposed transferee will receive the lesser of (1) the price paid by the proposed transferee for the shares or, if the proposed transferee did not give value for the shares in connection with the event causing the shares to be held in the trust ( e.g. , a gift, devise or other similar transaction), the market price (as defined in our charter) of the shares on the day of the event causing the shares to be held in the trust and (2) the price per share received by the trustee (net of any commissions and other expenses of sale) from the sale or other disposition of the shares. The trustee may reduce the amount payable to the proposed transferee by the amount of dividends and other distributions that have been paid to the proposed transferee and are owed by the proposed transferee to the trustee. Any net sale proceeds in excess of the amount payable to the proposed transferee will be paid immediately to the charitable beneficiary. If, prior to our discovery that shares of our stock have been transferred to the trust, the shares are sold by the proposed transferee, then (1) the shares shall be deemed to have been sold on behalf of the trust and (2) to the extent that the proposed transferee received an amount for the shares that exceeds the amount he or she was entitled to receive, the excess must be paid to the trustee upon demand.

In addition, shares of our stock held in the trust will be deemed to have been offered for sale to us, or our designee, at a price per share equal to the lesser of (1) the price per share in the transaction that resulted in the transfer to the trust (or, in the case of a devise or gift, the market price at the time of the devise or gift) and (2) the market price on the date we, or our designee, accept the offer, which we may reduce by the amount of dividends and distributions that have been paid to the proposed transferee and are owed by the proposed transferee to the trustee. We will have the right to accept the offer until the trustee has sold the shares. Upon a sale to us, the interest of the charitable beneficiary in the shares sold will terminate and the trustee will distribute the net proceeds of the sale to the proposed transferee.

If a transfer to a charitable trust, as described above, would be ineffective for any reason to prevent a violation of the 9.8% ownership limits or our being “closely held” under Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year) or our otherwise failing to qualify to be taxed as a REIT, then our charter provides that the transfer that would have resulted in a violation will be null and void, and the proposed transferee will acquire no rights in those shares.

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Any person who acquires or attempts or intends to acquire beneficial or constructive ownership of shares of our capital stock that will or may violate any of the foregoing restrictions on ownership and transfer, or any person who would have owned shares of our capital stock that resulted in a transfer of shares to a charitable trust, is required to give written notice immediately to us, or in the case of a proposed or attempted transaction, to give at least 15 days’ prior written notice, and provide us with such other information as we may request in order to determine the effect of the transfer on our status as a REIT.

Every owner of 5% or more (or any lower percentage as required by the Code or the regulations promulgated thereunder) of the outstanding shares of our capital stock, within 30 days after the end of each taxable year, is required to give us written notice, stating his or her name and address, the number of shares of each class and series of shares of our capital stock that he or she beneficially owns and a description of the manner in which the shares are held. Each of these owners must provide us with additional information that we may request in order to determine the effect, if any, of his or her beneficial ownership on our status as a REIT and to ensure compliance with the ownership limits. In addition, each stockholder will upon demand be required to provide us with information that we may request in order to determine our status as a REIT and to comply with the requirements of any taxing authority or governmental authority or to determine our compliance and ensure compliance with the ownership limits.

Any certificate representing shares of our capital stock, and any notices delivered in lieu of certificates with respect to the issuance or transfer of uncertificated shares, if any, will bear a legend referring to the restrictions described above. We do not expect to issue certificates representing shares of our capital stock.

The foregoing restrictions on ownership and transfer will not apply if our Board of Directors determines that it is no longer in our best interests to attempt to qualify, or to continue to qualify, as a REIT or that compliance with the restrictions is no longer necessary in order for us to qualify as a REIT.

These ownership limitations could delay, defer or prevent a transaction or a change in control that might involve a premium price for shares of our common stock or otherwise be in the best interest of our stockholders.

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We have currently satisfied the preceding requirements and as a result, pursuant to Rule 144, our stockholders are eligible to sell their initial shares pursuant to Rule 144 if they and we meet the other conditions of Rule 144 set forth above.

Lock-Up Periods

For a description of certain lock-up periods, see “Underwriting.”

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CERTAIN PROVISIONS OF MARYLAND LAW AND OF OUR CHARTER AND BYLAWS

The following summary of certain provisions of Maryland law and of our charter and bylaws does not purport to be complete and is subject to and qualified in its entirety by reference to the Maryland General Corporation Law and to our charter and bylaws. Copies of our charter and bylaws are filed as exhibits to the registration statement of which this prospectus is a part. See “Where You Can Find Additional Information.”

Our Board of Directors

Our charter and bylaws provide that the number of directors of our company will not be less than the minimum number required under the MGCL, which is one, and, unless our bylaws are amended, not more than fifteen, and the number of directors of our company may be increased or decreased pursuant to our bylaws by a vote of the majority of our entire Board of Directors. Our charter provides that, at such time as we become eligible to elect to be subject to Title 3, Subtitle 8 of the MGCL and subject to the rights of holders of one or more classes or series of stock, any vacancy may be filled only by a majority of the remaining directors, even if the remaining directors do not constitute a quorum, and any director elected to fill a vacancy will serve for the remainder of the full term of the directorship in which such vacancy occurred and until a successor is elected and qualifies.

Pursuant to our charter and bylaws, each member of our Board of Directors is elected by our stockholders to serve until the next annual meeting of stockholders and until his or her successor is duly elected and qualifies. Holders of shares of our common stock will have no right to cumulative voting in the election of directors, and directors will be elected by a plurality of all the votes cast in the election of directors. Consequently, at each annual meeting of stockholders, the holders of a majority of the shares of our common stock will be able to elect all of our directors.

Removal of Directors

In general, our charter provides that, subject to the rights of holders of one or more classes or series of preferred stock to elect or remove one or more directors, a director may be removed only for cause (as defined in our charter) and only by the affirmative vote of holders of shares entitled to cast at least two-thirds of the votes entitled to be cast generally in the election of directors. Except as described below, this provision, when coupled with the exclusive power of our Board of Directors to fill vacant directorships, may preclude stockholders from removing incumbent directors except for cause and by a substantial affirmative vote and filling the vacancies created by such removal with their own nominees.

Business Combinations

Under the MGCL, certain “business combinations” (including a merger, consolidation, share exchange or, in circumstances specified in the statute, an asset transfer or issuance or reclassification of equity securities) between a Maryland corporation and an interested stockholder (i.e., any person (other than the corporation or any subsidiary) who beneficially owns 10% or more of the voting power of the corporation’s outstanding voting stock after the date on which the corporation first had 100 or more beneficial owners of its stock, or an affiliate or associate of the corporation who, at any time within the two-year period immediately prior to the date in question, was the beneficial owner of 10% or more of the voting power of the then outstanding stock of the corporation after the date on which the corporation first had 100 or more beneficial owners of its stock) or an affiliate of an interested stockholder, are prohibited for five years after the most recent date on which the interested stockholder became an interested stockholder. Thereafter, any such business combination between the Maryland corporation and an interested stockholder generally must be recommended by the board of directors of such corporation and approved by the affirmative vote of at least (1) 80% of the votes entitled to be cast by holders of outstanding shares of voting stock of the corporation and (2) two-thirds of the votes entitled to be cast by holders of voting stock of the corporation other than shares held by the interested stockholder with whom (or with whose affiliate) the business combination is to be effected or held by an affiliate or associate of the interested stockholder, unless, among other conditions, the corporation’s common stockholders receive a minimum price (as defined in the MGCL) for their shares and the consideration is received in cash or in the same form as previously paid by the interested stockholder for its shares. A person is not an interested stockholder under the statute if the board of directors approved in

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advance the transaction by which the person otherwise would have become an interested stockholder. The board of directors may provide that its approval is subject to compliance with any terms and conditions determined by it.

As permitted by the MGCL, our Board of Directors has adopted a resolution exempting any business combination between us and any other person from the provisions of this statute, provided that the business combination is first approved by our Board of Directors (including a majority of directors who are not affiliates or associates of such persons). However, our Board of Directors may repeal or modify this resolution at any time in the future, in which case the applicable provisions of this statute will become applicable to business combinations between us and interested stockholders.

Control Share Acquisitions

The MGCL provides that holders of “control shares” of a Maryland corporation acquired in a “control share acquisition” have no voting rights except to the extent approved by the affirmative vote of at least two-thirds of the votes entitled to be cast on the matter, excluding votes cast by (1) the person who makes or proposes to make a control share acquisition, (2) an officer of the corporation or (3) an employee of the corporation who is also a director of the corporation. “Control shares” are voting shares of stock which, if aggregated with all other such shares of stock owned by the acquirer or in respect of which the acquirer is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquirer to exercise voting power in electing directors within one of the following ranges of voting power: (1) one-tenth or more but less than one-third; (2) one-third or more but less than a majority; or (3) a majority or more of all voting power. Control shares do not include shares the acquiring person is then entitled to vote as a result of having previously obtained stockholder approval. A “control share acquisition” means the acquisition of issued and outstanding control shares, subject to certain exceptions.

A person who has made or proposes to make a control share acquisition, upon satisfaction of certain conditions (including an undertaking to pay expenses), may compel the board of directors to call a special meeting of stockholders to be held within 50 days of demand to consider the voting rights of the shares. If no request for a meeting is made, the corporation may itself present the question at any stockholders meeting.

If voting rights are not approved at the meeting or if the acquiring person does not deliver an acquiring person statement as required by the statute, then, subject to certain conditions and limitations, the corporation may redeem any or all of the control shares (except those for which voting rights have previously been approved) for fair value determined, without regard to the absence of voting rights for the control shares, as of the date of the last control share acquisition by the acquirer or of any meeting of stockholders at which the voting rights of such shares are considered and not approved. If voting rights for control shares are approved at a stockholders meeting and the acquirer becomes entitled to vote a majority of the shares entitled to vote, all other stockholders may exercise appraisal rights. The fair value of the shares as determined for purposes of such appraisal rights may not be less than the highest price per share paid by the acquirer in the control share acquisition.

The control share acquisition statute does not apply to, among other things: (1) shares acquired in a merger, consolidation or share exchange if the corporation is a party to the transaction; or (2) acquisitions approved or exempted by the charter or bylaws of the corporation.

Our bylaws contain a provision exempting from the control share acquisition statute any acquisition by any person of shares of our stock. There can be no assurance that such provision will not be amended or eliminated at any time in the future.

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Subtitle 8

Subtitle 8 of Title 3 of the MGCL permits a Maryland corporation with a class of equity securities registered under the Exchange Act and at least three independent directors to elect to be subject, by provision in its charter or bylaws or a resolution of its board of directors and notwithstanding any contrary provision in the charter or bylaws, to any or all of five provisions of the MGCL which provide, respectively, that:

Through provisions in our charter and bylaws unrelated to Subtitle 8, we will (1) require the affirmative vote of holders of shares entitled to cast at least two-thirds of all the votes entitled to be cast generally in the election of directors to remove a director from our Board of Directors, which removal will be allowed only for cause, (2) vest in our Board of Directors the exclusive power to fix the number of directorships, and (3) require, unless called by the Chairman of our Board of Directors, our President, our Chief Executive Officer or our Board of Directors, the request of stockholders entitled to cast not less than a majority of all the votes entitled to be cast at the meeting to call a special meeting. Our charter provides that, at such time as we become eligible to make the election provided for under Subtitle 8, vacancies on our Board of Directors may be filled only by the affirmative vote of a majority of the remaining directors then in office, and directors elected to fill a vacancy will serve for the remainder of the full term of the directorship in which the vacancy occurred. Our Board of Directors is not currently classified. In the future, our Board of Directors may elect, without stockholder approval, to classify our Board of Directors or elect to be subject to any of the other provisions of Subtitle 8.

Meetings of Stockholders

Pursuant to our bylaws, an annual meeting of our stockholders for the purpose of the election of directors and the transaction of any business will be held on a date and at the time and place set by our Board of Directors. Each of our directors is elected by our stockholders to serve until the next annual meeting and until his or her successor is duly elected and qualifies under Maryland law. In addition, our Chairman, our Chief Executive Officer, our President or our Board of Directors may call a special meeting of our stockholders. Subject to the provisions of our bylaws, a special meeting of our stockholders to act on any matter that may properly be considered by our stockholders will also be called by our Secretary upon the written request of stockholders entitled to cast a majority of all the votes entitled to be cast at the meeting on such matter, accompanied by the information required by our bylaws. Our Secretary will inform the requesting stockholders of the reasonably estimated cost of preparing and mailing or delivering the notice of meeting (including our proxy materials), and the requesting stockholder must pay such estimated cost before our Secretary may prepare and mail the notice of the special meeting.

Charter Amendments and Extraordinary Transactions

Under the MGCL, a Maryland corporation generally cannot dissolve, amend its charter, merge or consolidate with, or convert into, another entity, sell all or substantially all of its assets or engage in a share exchange unless the action is declared advisable by the board of directors and approved by the affirmative vote of stockholders entitled to cast at least two-thirds of the votes entitled to be cast on the matter unless a lesser percentage (but not less than a majority of all of the votes entitled to be cast on the matter) is set forth in the corporation’s charter. Our charter provides that we generally may not dissolve, merge or consolidate with, or convert into, another entity, sell all or substantially all of our assets or engage in a statutory share exchange unless the action is declared advisable by our Board of Directors and approved by the affirmative

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vote of stockholders entitled to cast a majority of all the votes entitled to be cast on the matter. In addition, our charter generally provides that charter amendments requiring stockholder approval must be declared advisable by our Board of Directors and approved by the affirmative vote of stockholders entitled to cast a majority of all of the votes entitled to be cast on the matter. However, our charter’s provisions regarding the removal of directors may be amended only if such amendment is declared advisable by our Board of Directors and approved by the affirmative vote of stockholders entitled to cast not less than two-thirds of all the votes entitled to be cast on the matter. In addition, because operating assets may be held by a corporation’s subsidiaries, as in our situation, one of our subsidiaries may be able to merge or transfer all or substantially all of its assets without the approval of our stockholders.

Bylaws Amendments

Except as described below, our Board of Directors has the exclusive power to adopt, alter or repeal any provision of our bylaws and to make new bylaws.

Advance Notice of Director Nominations and New Business

Our bylaws provide that, with respect to an annual meeting of stockholders, nominations of individuals for election to our Board of Directors and the proposal of other business to be considered by our stockholders at an annual meeting of stockholders may be made only (1) pursuant to our notice of the meeting, (2) by or at the direction of our Board of Directors or (3) by a stockholder who was a stockholder of record both at the time of giving of notice and at the time of the meeting, who is entitled to vote at the meeting on the election of the individual so nominated or such other business and who has complied with the advance notice procedures set forth in our bylaws, including a requirement to provide certain information about the stockholder and its affiliates and the nominee or business proposal, as applicable.

With respect to special meetings of stockholders, only the business specified in our notice of meeting may be brought before the meeting. Nominations of individuals for election to our Board of Directors may be made at a special meeting of stockholders at which directors are to be elected only (1) by or at the direction of our Board of Directors or (2) provided that the special meeting has been properly called for the purpose of electing directors, by a stockholder who was a stockholder of record both at the time of giving of notice and at the time of the meeting, who is entitled to vote at the meeting on the election of each individual so nominated and who has complied with the advance notice provisions set forth in our bylaws, including a requirement to provide certain information about the stockholder and its affiliates and the nominee.

Anti-Takeover Effect of Certain Provisions of Maryland Law and Our Charter and Bylaws

Our charter and bylaws and the MGCL contain provisions that may delay, defer or prevent a change in control or other transaction that might involve a premium price for our common stock or otherwise be in the best interests of our stockholders, including:

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Likewise, if the resolution opting out of the business combination provisions of the MGCL were repealed or the provision in the bylaws opting out of the control share acquisition provisions of the MGCL were rescinded, these provisions of the MGCL could have similar anti-takeover effects.

Forum Selection Clause

Our bylaws provide that, unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum for (a) any derivative action or proceeding brought on our behalf, (b) any action asserting a claim of breach of any duty owed by us or by any of our directors or officers or other employees to us or to our stockholders, (c) any action asserting a claim against us or any of our directors or officers or other employees arising pursuant to any provision of the MGCL or our charter or bylaws or (d) any action asserting a claim against us or any of our directors or officers or other employees that is governed by the internal affairs doctrine shall be, in each case, the Circuit Court for Baltimore City, Maryland, or, if that Court does not have jurisdiction, the United States District Court for the District of Maryland, Baltimore Division.

Limitation of Directors’ and Officers’ Liability and Indemnification

The MGCL permits a Maryland corporation to include in its charter a provision limiting the liability of its directors and officers to the corporation and its stockholders for money damages, except for liability resulting from (1) actual receipt of an improper benefit or profit in money, property or services or (2) active and deliberate dishonesty that is established by a final judgment and which is material to the cause of action. Our charter contains a provision that eliminates such liability to the maximum extent permitted by Maryland law.

The MGCL requires a corporation (unless its charter provides otherwise, which our charter does not) to indemnify a director or officer who has been successful, on the merits or otherwise, in the defense of any proceeding to which he or she is made, or threatened to be made, a party by reason of his or her service in that capacity. The MGCL permits a corporation to indemnify its present and former directors and officers, among others, against judgments, penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding to which they may be made, or threatened to be made, a party by reason of their service in those or other capacities unless it is established that:

However, under the MGCL, a Maryland corporation may not indemnify for an adverse judgment in a suit by or in the right of the corporation or for a judgment of liability on the basis that personal benefit was improperly received, unless in either case a court orders indemnification if it determines that the director or officer is fairly and reasonably entitled to indemnification, and then only for expenses. In addition, the MGCL permits a Maryland corporation to advance reasonable expenses to a director or officer upon its receipt of:

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