x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2018
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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MARYLAND
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46-0633510
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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(Title of Each Class)
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(Name of exchange on which registered)
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Common stock, par value $0.01 per share
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New York Stock Exchange
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Large Accelerated Filer
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¨
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Accelerated Filer
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x
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Non-Accelerated Filer
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¨
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(Do not check if a smaller reporting company)
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Smaller Reporting Company
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¨
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Emerging Growth Company
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o
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•
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our ability to implement our business strategy;
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•
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our ability to make distributions to our stockholders;
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our ability to acquire single-family rental assets for our portfolio, including difficulties in identifying assets to acquire;
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the impact of changes to the supply of, value of and the returns on single-family rental assets;
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our ability to successfully integrate newly acquired properties into our portfolio of single-family rental properties;
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our ability to successfully operate HavenBrook Partners, LLC (“HavenBrook”) as a property manager and perform property management services for our single-family rental assets at the standard and/or the cost that we anticipate;
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our ability to transition property management for the single-family rental properties currently managed by third party property managers to HavenBrook;
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our ability to predict our costs;
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our ability to effectively compete with our competitors;
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our ability to apply the proceeds from financing activities or non-rental real estate owned asset sales to target single-family rental assets in a timely manner;
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our ability to sell non-rental real estate owned properties on favorable terms and on a timely basis or at all;
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the failure to identify unforeseen expenses or material liabilities associated with asset acquisitions through the due diligence process prior to such acquisitions;
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changes in the market value of our single-family rental properties and real estate owned;
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changes in interest rates;
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our ability to obtain and access financing arrangements on favorable terms or at all;
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our ability to maintain adequate liquidity;
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our ability to retain our engagement of AAMC;
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the failure of our third party vendors to effectively perform their obligations under their respective agreements with us;
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our failure to maintain our qualification as a REIT;
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our failure to maintain our exemption from registration under the Investment Company Act;
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the impact of adverse real estate, mortgage or housing markets;
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the impact of adverse legislative, regulatory or tax changes; and
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general economic and market conditions.
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On August 8, 2018, we completed the purchase of 3,236 SFR properties and an internal property manager in the HB Acquisition for an aggregate purchase price of $485.0 million.
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On March 30, 2017, we entered into an agreement to acquire up to 3,500 SFR properties (the “HOME Flow Transaction”) from entities sponsored by Amherst Holdings, LLC (“Amherst”), pursuant to which we acquired 3,465 SFR properties in three separate closings during 2017 for an aggregate purchase price of $528.7 million.
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On September 30, 2016, we completed the acquisition of 4,262 SFR properties (the “HOME SFR Transaction”) from two investment funds sponsored by Amherst for an aggregate purchase price of $652.3 million.
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On March 30, 2016, we completed the acquisition of 590 SFR properties located in five states from a third party seller for an aggregate purchase price of approximately $64.8 million.
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In addition, during the years ended December 31, 2018, 2017 and 2016, we acquired 70, 27 and 714 rental properties, respectively, on an individual basis.
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December 31, 2018
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December 31, 2017
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Rental:
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Leased
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13,546
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10,850
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Listed and ready for rent
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434
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591
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Unit turn
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428
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340
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Renovation
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136
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194
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Total rental properties
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14,544
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11,975
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Previous rentals identified for sale
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158
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69
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Legacy REO
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56
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197
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Total real estate held for use
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14,758
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12,241
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Held for sale
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687
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333
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Total real estate assets
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15,445
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12,574
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State
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Number of Properties
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Carrying
Value (1) (2)
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Average Age in Years
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Georgia
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4,361
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$
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481,297
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36
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Florida
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2,097
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311,603
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40
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Texas
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1,978
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289,111
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28
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Tennessee
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1,475
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209,306
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23
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North Carolina
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873
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118,345
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25
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Alabama
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723
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82,548
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41
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Indiana
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668
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85,006
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23
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Minnesota
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488
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74,017
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87
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Missouri
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424
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61,909
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39
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Oklahoma
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306
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44,267
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27
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All other rentals
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1,151
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171,124
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36
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Total rental properties
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14,544
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1,928,533
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35
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Previous rentals identified for sale
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158
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25,193
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47
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Legacy REO
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56
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12,360
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55
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Total real estate held for use
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14,758
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1,966,086
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35
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Held for sale
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687
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146,921
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49
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Total
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15,445
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$
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2,113,007
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35
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(1)
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The carrying value of an asset held for use is based on historical cost plus renovation costs, net of any accumulated depreciation and impairment. Assets held for sale are carried at the lower of the carrying amount or estimated fair value less costs to sell.
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(2)
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The carrying value of certain properties acquired on November 29, 2017 are included based upon the initial purchase price, certain of which are subject to potential purchase price adjustment provisions as set forth in the purchase and sale agreement. For additional information, see Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources - Potential purchase price adjustments under the HOME Flow Transaction.
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Acquisition Strategy Enables us to Continue Building a Portfolio that Targets Attractive Yields to Stockholders.
Through AAMC’s personnel and technical expertise, we have developed a disciplined market and asset selection approach and a valuation model that uses proprietary and market data to evaluate and project the performance of SFR assets. This valuation model has been built with multiple broad economic and geographic inputs as well as numerous property-level inputs to determine which properties will produce attractive yields and how much to pay for these properties to best achieve optimal results. These internally developed tools help us to evaluate the most attractive SFR portfolios for sale. We also leverage our property inspection, management and rental infrastructure and related data flows to identify and acquire attractive assets in the geographical locations into which we desire to grow. We intend to continue to build our internal property management infrastructure, which will allow us to focus on strategic geographical areas, develop regional experience to continually refine our acquisition strategy and achieve rental portfolio growth with properties marked by strong stabilized occupancy rates and optimal economic returns. We also believe that our focus on affordable housing provides us with a potential advantage, as we believe this is an underserved market segment that provides us with attractive yield and growth opportunities.
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Extensive Internal Property Management Infrastructure
. With our internal property manager and the support of our growing nationwide vendor networks, we believe that we are well positioned to operate and manage SFR properties across the United States at an attractive cost structure. The HB Acquisition has provided us with an excellent, experienced property management team with a successful track-record of internal property management operations and enables us to capitalize on additional opportunities to enhance our tenants’ experience and improve our operating efficiency for our entire portfolio. We believe that our new internal property management infrastructure provides us with a cost-efficient, scalable platform that will be a key factor in our success as we continue to grow.
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Depth of Management Experience.
We believe the experience and technical expertise of our management team is one of our key strengths. Our team has a broad and deep knowledge of the real estate market with decades of experience in real estate, mortgage trading, housing, financial services and asset management. Their experience in the real estate industry brings a wealth of understanding of the markets in which we operate and can help us build our portfolio in a manner that brings attractive potential returns to stockholders. Management and its supporting teams have expertise and extensive contacts that enable us to source SFR assets through access to auctions and sellers of SFR assets and obtain financing to optimize available leverage. Due to our management team's expertise, we have been able to strategically sell non-core assets to sustain a strong dividend while also using the liquidity generated from these sales to increase the size of our SFR portfolio. We believe that AAMC’s asset evaluation process and the experience and judgment of its executive management team in identifying, assessing, valuing and acquiring new SFR assets will help us to appropriately value the portfolios at the time of purchase and operate them profitably as we continue to grow.
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the financial soundness of institutions with which we plan to transact business and make recommendations with respect thereto;
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our risk exposure limits with respect to the dollar amounts of total exposure with a given institution; and
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investment accounts and trading accounts to be opened with banks, broker-dealers and financial institutions.
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No investment will be made that would cause us or any of our subsidiaries to fail to qualify as a REIT for U.S. federal income tax purposes;
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No investment will be made that would cause us to be required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”); and
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Until appropriate investments can be identified, we may invest available cash in interest-bearing and short-term investments that are consistent with (a) our intention to qualify as a REIT and (b) our exemption from registration as an investment company under the Investment Company Act.
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Base Management Fee
. AAMC is entitled to a quarterly base management fee equal to 1.5% of the product of (i) our average invested capital (as defined in the AMA) for the quarter
multiplied by
(ii) 0.25 while we have fewer than 2,500 SFR properties actually rented (“Rental Properties”). The base management fee percentage increases to 1.75% of average invested capital while we have between 2,500 and 4,499 Rental Properties and increases to 2.0% of average invested capital while we have 4,500 or more Rental Properties;
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Incentive Management Fee
. AAMC is entitled to a quarterly incentive management fee equal to 20% of the amount by which our return on invested capital (based on AFFO, defined as our net income attributable to holders of common stock calculated in accordance with GAAP
plus
real estate depreciation expense
minus
recurring capital expenditures on all of our real estate assets owned) exceeds an annual hurdle return rate of between 7.0% and 8.25% (depending on the 10-year treasury rate). The incentive management fee increases to 22.5% while we have between 2,500 and 4,499 Rental Properties and increases to 25% while we have 4,500 or more Rental Properties. We have the flexibility to pay up to 25% of any incentive management fee payment to AAMC in shares of our common stock; and
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Conversion Fee
. AAMC is entitled to a quarterly conversion fee equal to 1.5% of the market value of assets converted into leased single-family homes by us for the first time during the quarter.
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reporting requirements to the agent or lender,
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minimum adjusted tangible net worth requirements,
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minimum net asset requirements,
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limitations on the indebtedness,
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minimum levels of liquidity, including specified levels of unrestricted cash,
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limitations on sales and dispositions of properties collateralizing certain of the loan agreements,
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various restrictions on the use of cash generated by the operations of properties, and
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a minimum fixed charge coverage ratio.
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the complexities associated with the successful operation of HavenBrook as a property manager, including our inability to effectively perform the property management services at the level and/or the cost that we anticipate or as a result of a failure to allocate sufficient resources to meet our property management needs;
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the complexities associated with integrating personnel from HavenBrook and ASPS, including retaining key HavenBrook employees and hiring additional property management personnel as we grow;
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the complexities associated with integrating HavenBrook’s separate technology systems, property management policies and procedures, regulatory and legal compliance controls and financial reporting practices and controls into our business;
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potential unknown liabilities and unforeseen increased expenses associated with the HB Acquisition; and
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performance shortfalls as a result of the diversion of management’s attention caused by completing the HB Acquisition and integrating the companies’ operations.
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joblessness or unemployment rates that adversely affect the local economy;
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an oversupply of or a reduced demand for SFR properties for rent;
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a decline in employment or lack of employment growth;
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the inability or unwillingness of residents to pay rent increases or fulfill their lease obligations;
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a decline in rental rate, which may be accentuated since we expect to generally have rent terms of one to two years;
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rent control or rent stabilization laws or other laws regulating housing that could prevent us from raising rents to offset increases in operating costs;
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changes in interest rates and availability and terms of debt financing; and
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economic conditions that could cause an increase in our operating expenses such as increases in property taxes, utilities and routine maintenance.
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We would not be allowed a deduction for dividends paid to stockholders in computing our taxable income, thus becoming subject to federal income tax;
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We could be subject to increased state and local taxes; and
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Unless we are entitled to relief under certain federal income tax laws, we could not re-elect REIT status until the fifth calendar year after the year in which we failed to qualify as a REIT. In addition, if we fail to qualify as a REIT, we will no longer be required to make distributions.
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Actual receipt of an improper benefit or profit in money, property or services; or
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Active and deliberate dishonesty that is established by a final judgment and is material to the cause of action.
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•
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limitations on capital structure;
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•
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restrictions on specified investments;
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•
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restrictions on leverage or senior securities;
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•
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restrictions on unsecured borrowings;
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•
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prohibitions on transactions with affiliates; and
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•
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compliance with reporting, record keeping, voting, proxy disclosure and other rules and regulations that would significantly increase our operating expenses.
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•
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variations in our actual or anticipated results of operations, liquidity or financial condition;
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•
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the announcement of material transactions or the failure to consummate such transactions;
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•
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changes in, or the failure to meet, our financial estimates or those of securities analysts;
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•
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the amount and timing of any cash distributions;
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•
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actions or announcements by our competitors;
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•
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potential conflicts of interest, or the discontinuance of our strategic relationships, with AAMC and MSR;
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•
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failure of HavenBrook and MSR to provide effective and cost efficient property management services;
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•
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actual or anticipated accounting problems;
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•
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adverse market reaction to any increased indebtedness we incur in the future;
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•
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regulatory actions;
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•
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changes in the market outlook for the real estate, mortgage or housing markets;
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technology changes in our business;
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•
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changes in interest rates that lead purchasers of our common stock to demand a higher yield;
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future equity issuances by us, share resales by our stockholders or the perception that such issuances or resales may occur;
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•
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actions by our stockholders;
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•
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changes to our investment strategy;
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•
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speculation in the press or investment community;
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•
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general market, economic and political conditions, including an economic slowdown or dislocation in the global credit markets;
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failure to maintain the listing of our common stock on the New York Stock Exchange;
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•
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failure to qualify or maintain our qualification as a REIT;
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•
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failure to maintain our exemption from registration under the Investment Company Act;
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•
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changes in accounting principles;
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•
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passage of legislation or other regulatory developments that adversely affect us or our industry; and
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departure of AAMC’s, and therefore our, key personnel.
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2018
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2017
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||||||||||||||||||||
Quarter ended
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High
|
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Low
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Dividend
|
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High
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Low
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Dividend
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||||||||||||
March 31
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$
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11.93
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|
|
$
|
9.70
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|
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$
|
0.15
|
|
|
$
|
15.26
|
|
|
$
|
11.11
|
|
|
$
|
0.15
|
|
June 30
|
|
11.45
|
|
|
9.59
|
|
|
0.15
|
|
|
15.56
|
|
|
12.68
|
|
|
0.15
|
|
||||||
September 30
|
|
12.99
|
|
|
9.33
|
|
|
0.15
|
|
|
13.25
|
|
|
10.78
|
|
|
0.15
|
|
||||||
December 31
|
|
10.86
|
|
|
8.22
|
|
|
0.15
|
|
|
11.94
|
|
|
10.55
|
|
|
0.15
|
|
|
|
For the period from December 31, 2013 to December 31,
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||||||||||||||||||
Index
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
||||||||||
Front Yard Residential Corporation
|
|
$
|
70.35
|
|
|
$
|
53.41
|
|
|
$
|
51.38
|
|
|
$
|
56.04
|
|
|
$
|
47.73
|
|
S&P 500
|
|
111.39
|
|
|
110.58
|
|
|
121.13
|
|
|
144.65
|
|
|
135.63
|
|
|||||
Russell 2000
|
|
103.53
|
|
|
97.62
|
|
|
116.63
|
|
|
131.96
|
|
|
115.89
|
|
|||||
FTSE NAREIT All Equity REITs
|
|
128.03
|
|
|
131.64
|
|
|
143.00
|
|
|
155.41
|
|
|
149.12
|
|
|
|
For the Year Ended December 31,
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||||||||||||||||||
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Total revenue
|
|
$
|
183,013
|
|
|
$
|
94,171
|
|
|
$
|
56,758
|
|
|
$
|
248,098
|
|
|
$
|
423,298
|
|
Net (loss) income
|
|
(130,835
|
)
|
|
(185,454
|
)
|
|
(228,028
|
)
|
|
(46,005
|
)
|
|
188,853
|
|
|||||
(Loss) earnings per basic share
|
|
(2.44
|
)
|
|
(3.47
|
)
|
|
(4.18
|
)
|
|
(0.81
|
)
|
|
3.36
|
|
|||||
(Loss) earnings per diluted share
|
|
(2.44
|
)
|
|
(3.47
|
)
|
|
(4.18
|
)
|
|
(0.81
|
)
|
|
3.34
|
|
|||||
Dividend per share
|
|
0.60
|
|
|
0.60
|
|
|
0.75
|
|
|
1.83
|
|
|
2.03
|
|
|
|
As of December 31,
|
||||||||||||||||||
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Total assets
|
|
$
|
2,270,251
|
|
|
$
|
1,974,549
|
|
|
$
|
2,284,847
|
|
|
$
|
2,450,773
|
|
|
$
|
2,721,811
|
|
Repurchase and loan agreements
|
|
1,722,219
|
|
|
1,270,157
|
|
|
1,220,972
|
|
|
763,369
|
|
|
1,013,133
|
|
|||||
Other secured borrowings
|
|
—
|
|
|
—
|
|
|
144,099
|
|
|
502,599
|
|
|
336,698
|
|
•
|
On April 5, 2018, we amended and restated our loan and security agreement with Nomura Corporate Funding Americas, LLC (“Nomura”) to, among other things, (i) extend the termination date of the facility by two years to April 5, 2020, with a potential additional one-year extension to April 5, 2021, (ii) reduce the interest rate spread over one-month LIBOR by 0.25% to 3.00% and (iii) increase the advance rates on both non-stabilized properties and stabilized rental properties.
|
•
|
In conjunction with the HB Acquisition, Berkadia Commercial Mortgage LLC (“Berkadia”) provided $508.7 million of financing (the “FYR SFR Loan Agreement”) as part of the Federal Home Loan Mortgage Corporation’s (“Freddie Mac”) affordable single-family rental pilot program. The FYR SFR Loan Agreement was subsequently purchased by Freddie Mac. The FYR SFR Loan Agreement is non-amortizing, bears interest at a fixed rate of 4.65% and has a 10-year term, maturing September 1, 2028. This financing includes 2,798 of the RHA Acquired Properties as well as 2,015 other properties already owned by us and previously financed on our existing warehouse
|
•
|
On September 4, 2018, we amended and restated our repurchase agreement with Credit Suisse (“CS”) to, among other things, modify the interest rate from the CS cost of funds rate plus a fixed spread of 2.75% to one-month LIBOR plus a fixed spread of 3.00%, resulting in a net lower cost of financing for us.
|
•
|
On October 16, 2018, we entered into two interest rate caps to limit the maximum LIBOR rate under two loan agreements with an aggregate outstanding balance of $172.4 million to one-month LIBOR of 2.30%, resulting in a maximum interest rate of 4.40% for each loan.
|
•
|
On December 7, 2018, we entered into a loan agreement (the “MS Loan Agreement”) to refinance $489.3 million of borrowings of HOME SFR Borrower, LLC (“HOME Borrower”), including increasing the borrowings against the collateral properties to $505.0 million while reducing the advance rate from 75% to 70%. We believe this increase in funding is indicative of the increases in fair value of our homes that is not represented in the historical cost carrying value. The MS Loan Agreement has a maturity date of December 7, 2023 but can be prepaid without penalty at any time after December 7, 2021. This refinancing also reduced the interest rate from one-month LIBOR plus 3.285% to one-month LIBOR plus 1.80%. In conjunction with our entry into the MS Loan Agreement, we entered into an interest rate cap to limit the maximum LIBOR rate under the MS Loan Agreement to 2.50%, resulting in a maximum interest rate of 4.30%.
|
|
Held for Use
|
|
Held for Sale
|
|
Total Portfolio
|
|||||||||
December 31, 2018
|
Stabilized
|
|
Non-Stabilized
|
|
Total
|
|
|
|||||||
Rental properties:
|
|
|
|
|
|
|
|
|
|
|||||
Leased
|
13,546
|
|
|
—
|
|
|
13,546
|
|
|
423
|
|
|
13,969
|
|
Listed and ready for rent
|
409
|
|
|
25
|
|
|
434
|
|
|
8
|
|
|
442
|
|
Unit turn
|
428
|
|
|
—
|
|
|
428
|
|
|
18
|
|
|
446
|
|
Renovation
|
—
|
|
|
136
|
|
|
136
|
|
|
2
|
|
|
138
|
|
Total rental properties
|
14,383
|
|
|
161
|
|
|
14,544
|
|
|
|
|
|
||
Previous rentals identified for sale
|
—
|
|
|
158
|
|
|
158
|
|
|
188
|
|
|
346
|
|
Legacy REO
|
—
|
|
|
56
|
|
|
56
|
|
|
48
|
|
|
104
|
|
|
14,383
|
|
|
375
|
|
|
14,758
|
|
|
687
|
|
|
15,445
|
|
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|||||
Rental properties:
|
|
|
|
|
|
|
|
|
|
|||||
Leased
|
10,850
|
|
|
—
|
|
|
10,850
|
|
|
—
|
|
|
10,850
|
|
Listed and ready for rent
|
550
|
|
|
41
|
|
|
591
|
|
|
—
|
|
|
591
|
|
Unit turn
|
320
|
|
|
20
|
|
|
340
|
|
|
—
|
|
|
340
|
|
Renovation
|
—
|
|
|
194
|
|
|
194
|
|
|
—
|
|
|
194
|
|
Total rental properties
|
11,720
|
|
|
255
|
|
|
11,975
|
|
|
|
|
|
||
Previous rentals identified for sale
|
—
|
|
|
69
|
|
|
69
|
|
|
40
|
|
|
109
|
|
Legacy REO
|
—
|
|
|
197
|
|
|
197
|
|
|
293
|
|
|
490
|
|
|
11,720
|
|
|
521
|
|
|
12,241
|
|
|
333
|
|
|
12,574
|
|
|
|
Year Ended December 31,
|
|||||||
|
|
2018
|
|
2017
|
|
2016
|
|||
Beginning count of real estate assets
|
|
12,574
|
|
|
10,533
|
|
|
6,516
|
|
Acquisitions
|
|
3,306
|
|
|
3,492
|
|
|
5,566
|
|
Dispositions
|
|
(448
|
)
|
|
(1,710
|
)
|
|
(2,668
|
)
|
Mortgage loan conversions to REO, net
(1)
|
|
10
|
|
|
248
|
|
|
1,112
|
|
Other additions
|
|
3
|
|
|
11
|
|
|
7
|
|
Ending count of real estate assets
|
|
15,445
|
|
|
12,574
|
|
|
10,533
|
|
(1)
|
Subsequent to the foreclosure sale, we may be notified that the foreclosure sale was invalidated for certain reasons.
|
|
|
Year Ended December 31,
|
|||||||
|
|
2018
|
|
2017
|
|
2016
|
|||
Mortgage Loans
|
|
|
|
|
|
|
|||
Beginning count of mortgage loans
|
|
111
|
|
|
3,474
|
|
|
7,036
|
|
Resolutions and dispositions (1)
|
|
(27
|
)
|
|
(3,115
|
)
|
|
(2,450
|
)
|
Mortgage loan conversions to REO, net (2)
|
|
(10
|
)
|
|
(248
|
)
|
|
(1,112
|
)
|
Ending count of mortgage loans
|
|
74
|
|
|
111
|
|
|
3,474
|
|
(1)
|
We generally liquidate our mortgage loan assets through sales to third party purchasers, short sales, refinancing or foreclosure sales.
|
(2)
|
Subsequent to the foreclosure sale, we may be notified that the foreclosure sale was invalidated for certain reasons.
|
•
|
Base Management Fee
. AAMC is entitled to a quarterly base management fee equal to 1.5% of the product of (i) our average invested equity capital for the quarter
multiplied by
(ii) 0.25, while we have fewer than 2,500 Rental Properties. The base management fee percentage increases to 1.75% of average invested capital while we have between 2,500 and 4,499 Rental Properties and increases to 2.0% of average invested capital while we have 4,500 or more Rental Properties;
|
•
|
Incentive Management Fee
. AAMC is entitled to a quarterly incentive management fee equal to 20% of the amount by which our return on invested capital (based on AFFO, defined as our net income attributable to holders of common stock calculated in accordance with GAAP
plus
real estate depreciation expense
minus
recurring capital expenditures on all of our real estate assets owned) exceeds an annual hurdle return rate of between 7.0% and 8.25% (or
1.75%
and
2.06%
per quarter), depending on the
10
-year treasury rate. To the we have an aggregate shortfall in its return rate over the previous seven quarters, that aggregate return rate shortfall gets added to the normal quarterly return hurdle for the next quarter before AAMC is entitled to an incentive management fee. The incentive management fee increases to 22.5% while we have between 2,500 and 4,499 Rental Properties and increases to 25% while we have 4,500 or more Rental Properties; and
|
•
|
Conversion Fee
. AAMC is entitled to a quarterly conversion fee equal to 1.5% of the market value of assets converted into leased single-family homes by us for the first time during the quarter.
|
i.
|
Change in unrealized gain on mortgage loans
. Upon conversion of loans to REO, we mark the properties to the most recent market value. The difference between the carrying value of the asset at the time of conversion and the most recent market value, based on broker price opinions (“BPOs”), was recorded in our statement of operations as change in unrealized gain on mortgage loans. In addition, change in unrealized gain on mortgage loans includes the adjustment of the carrying value of our remaining mortgage loans to estimated fair value at each reporting date, which may be based on (i) market information, to the extent available and as adjusted for factors specific to individual mortgage loans, or (ii) as determined by AAMC's proprietary discounted cash flow model. Lastly, upon the liquidation of a mortgage loan or REO property, we reclassify previously accumulated unrealized gains to realized gains.
|
ii.
|
Net realized gain on mortgage loans.
We record net realized gains or losses, including the reclassification of previously accumulated net unrealized gains, upon the liquidation of a loan, which may consist of short sale, third party sale of the underlying property, refinancing or full debt pay-off of the loan. We expect the timeline to liquidate loans will vary significantly by loan, which could result in fluctuations in revenue recognition and operating performance from period to period. Additionally, the proceeds from loan liquidations may vary significantly depending on the resolution methodology. We generally expect to collect proceeds of loan liquidations in cash and, thereafter, have no continuing involvement with the asset.
|
iii.
|
Net realized gain on sales of real estate.
REO properties that do not meet our investment criteria are sold out of our taxable REIT subsidiary. The realized gain or loss recognized in the financial statements reflects the net amount of realized and unrealized gains on sold REOs from the time of acquisition to sale completion.
|
i.
|
Residential property operating expenses.
Residential property operating expenses are expenses associated with our ownership and operation of residential properties, including costs such as expenses towards repairs, utility expenses on vacant properties, turnover costs, property taxes, insurance and HOA dues.
|
ii.
|
Property management expenses.
Property management expenses include certain personnel costs of internal property management employees, fees paid to external property managers and other costs incurred in the oversight and management of our portfolio of homes.
|
iii.
|
Depreciation and amortization.
Depreciation and amortization is a non-cash expense associated with the ownership of real estate and generally remains consistent over the life of an asset since we depreciate our properties on a straight-line basis. Depreciation and amortization also includes the amortization of our in-place lease intangible assets and lease commissions, which generally are amortized for periods of one year or less. The level of amortization of in-place lease intangible assets will vary depending upon our acquisition activity.
|
iv.
|
Acquisition and integration costs.
Acquisition and integration costs include expenses associated with acquisitions as well as duplicative or non-recurring costs associated with the internalization of our property management function. We expect the majority of our asset acquisitions will not meet the definition of a business; therefore, we expect that the majority of acquisition costs will be capitalized into the cost basis of such assets.
|
v.
|
Impairment.
Impairment represents the amount by which we estimate the carrying amount of a property will not be recoverable.
|
vi.
|
Mortgage loan servicing costs.
Mortgage loan servicing costs are primarily for servicing fees, foreclosure fees and advances of residential property insurance.
|
vii.
|
Interest expense.
Interest expense consists of the costs to borrow money in connection with our debt financing of our portfolios.
|
i.
|
Share-based compensation.
Share-based compensation is a non-cash expense related to the restricted stock units and stock options issued pursuant to our authorized share-based compensation plans.
|
viii.
|
General and administrative.
General and administrative expenses consist of the costs related to the general operation and overall administration of our business, including compensation and benefits of certain HavenBrook employees. In addition, general administrative expenses include expense reimbursements to AAMC, which include the compensation and benefits of the General Counsel dedicated to us and certain out-of-pocket expenses incurred by AAMC on our behalf.
|
ix.
|
Management fees to AAMC.
Management fees paid to AAMC consist of a base management fee of 2% of our invested capital (as defined in the AMA), a conversion fee for assets that are converted to SFR properties during each quarter and an incentive management fee calculated as 25% of our return on invested capital that exceeds a minimum threshold for each period.
|
|
Year ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
Change in unrealized gain on mortgage loans due to:
|
|
|
|
||||
Conversion of mortgage loans to REO, net
|
$
|
2,344
|
|
|
$
|
15,067
|
|
Change in fair value, net
|
313
|
|
|
1,514
|
|
||
Reclassification to realized gain or loss
|
(35,041
|
)
|
|
(207,437
|
)
|
||
Total change in unrealized gain on mortgage loans
|
(32,384
|
)
|
|
(190,856
|
)
|
||
Net realized (loss) gain on mortgage loans
|
(938
|
)
|
|
84,024
|
|
||
Net realized gain on sales of real estate
|
33,177
|
|
|
76,913
|
|
||
Net loss on real estate and mortgage loans
|
$
|
(145
|
)
|
|
$
|
(29,919
|
)
|
•
|
First, we recognized an aggregate of $15.0 million in unrealized gains upon conversion of mortgage loans to REO for the year ended December 31, 2017 compared to $46.0 million for the year ended December 31, 2016. During the year ended December 31, 2017, we converted a net of 248 mortgage loans to REO status compared to a net of 1,112 mortgage loans converted to REO status during the year ended December 31, 2016;
|
•
|
Second, we recognized an aggregate change in unrealized gains of $1.5 million from the net change in the fair value of loans for the year ended December 31, 2017 compared to an aggregate change in unrealized gains of $(8.0) million during the year ended December 31, 2016. During the year ended December 31, 2017, the fair value of our mortgage loans was impacted primarily by our disposition of the substantial majority of our mortgage loans at fair value; and
|
•
|
Third, we reclassified an aggregate of $207.4 million from unrealized gains on mortgage loans to realized gains on real estate and mortgage loans, reflecting real estate sold and the resolution or sale of NPLs for the year ended December 31, 2017. This compares to an aggregate of $233.9 million reclassified from unrealized gains on mortgage loans to realized gains for the year ended December 31, 2016.
|
|
Maturity Date
|
|
|
Interest Rate
|
|
|
Amount Outstanding
|
|
Maximum Borrowing Capacity
|
|
Amount of Available Funding
|
|
Book Value of Collateral
|
||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
CS Repurchase Agreement
|
11/15/2019
|
|
|
1-month LIBOR + 3.00%
|
|
|
$
|
193,654
|
|
|
$
|
250,000
|
|
|
$
|
56,346
|
|
|
$
|
224,934
|
|
Nomura Loan Agreement
|
4/5/2020
|
(1)
|
|
1-month LIBOR + 3.00%
|
|
|
30,497
|
|
|
250,000
|
|
|
219,503
|
|
|
48,388
|
|
||||
HOME II Loan Agreement
|
11/9/2019
|
(2)
|
|
1-month LIBOR + 2.10%
|
(3)
|
|
83,270
|
|
|
83,270
|
|
|
—
|
|
|
100,461
|
|
||||
HOME III Loan Agreement
|
11/9/2019
|
(2)
|
|
1-month LIBOR + 2.10%
|
(3)
|
|
89,150
|
|
|
89,150
|
|
|
—
|
|
|
111,542
|
|
||||
HOME IV Loan Agreement (A)
|
12/9/2022
|
|
|
4.00%
|
|
|
114,201
|
|
|
114,201
|
|
|
—
|
|
|
145,461
|
|
||||
HOME IV Loan Agreement (B)
|
12/9/2022
|
|
|
4.00%
|
|
|
114,590
|
|
|
114,590
|
|
|
—
|
|
|
146,479
|
|
||||
Term Loan Agreement
|
4/6/2022
|
|
|
5.00%
|
|
|
100,000
|
|
|
100,000
|
|
|
—
|
|
|
114,401
|
|
||||
FYR SFR Loan Agreement
|
9/1/2028
|
|
|
4.65%
|
|
|
508,700
|
|
|
508,700
|
|
|
—
|
|
|
585,563
|
|
||||
MS Loan Agreement
|
12/7/2023
|
|
|
1-month LIBOR + 1.80%
|
(4)
|
|
504,986
|
|
|
504,986
|
|
|
—
|
|
|
609,619
|
|
||||
|
|
|
|
|
|
|
1,739,048
|
|
|
$
|
2,014,897
|
|
|
$
|
275,849
|
|
|
$
|
2,086,848
|
|
|
Less: unamortized loan discounts
|
|
|
|
|
|
|
(4,896
|
)
|
|
|
|
|
|
|
|||||||
Less: deferred debt issuance costs
|
|
|
|
|
|
|
(11,933
|
)
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
$
|
1,722,219
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
CS Repurchase Agreement
|
11/16/2018
|
|
|
CS cost of funds + 2.75%
|
|
|
$
|
189,173
|
|
|
$
|
350,000
|
|
|
$
|
160,827
|
|
|
$
|
281,722
|
|
Nomura Loan Agreement
|
4/5/2018
|
|
|
1-month LIBOR + 3.25%
|
|
|
102,785
|
|
|
250,000
|
|
|
147,215
|
|
|
169,521
|
|
||||
MSR Loan Agreement
|
11/9/2018
|
|
|
1-month LIBOR + 3.285%
|
|
|
489,259
|
|
|
489,259
|
|
|
—
|
|
|
622,065
|
|
||||
HOME II Loan Agreement
|
11/9/2019
|
|
|
1-month LIBOR + 2.10%
|
|
|
83,270
|
|
|
83,270
|
|
|
—
|
|
|
103,324
|
|
||||
HOME III Loan Agreement
|
11/9/2019
|
|
|
1-month LIBOR + 2.10%
|
|
|
89,150
|
|
|
89,150
|
|
|
—
|
|
|
114,698
|
|
||||
HOME IV Loan Agreement (A)
|
12/9/2022
|
|
|
4.00%
|
|
|
114,201
|
|
|
114,201
|
|
|
—
|
|
|
149,698
|
|
||||
HOME IV Loan Agreement (B)
|
12/9/2022
|
|
|
4.00%
|
|
|
114,590
|
|
|
114,590
|
|
|
—
|
|
|
150,718
|
|
||||
Term Loan Agreement
|
4/6/2022
|
|
|
5.00%
|
|
|
100,000
|
|
|
100,000
|
|
|
—
|
|
|
116,250
|
|
||||
|
|
|
|
|
|
|
1,282,428
|
|
|
$
|
1,590,470
|
|
|
$
|
308,042
|
|
|
$
|
1,707,996
|
|
|
Less: unamortized loan discounts
|
|
|
|
|
|
|
(6,158
|
)
|
|
|
|
|
|
|
|||||||
Less: deferred debt issuance costs
|
|
|
|
|
|
|
(6,113
|
)
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
$
|
1,270,157
|
|
|
|
|
|
|
|
(1)
|
Represents initial maturity date. Does not include a potential additional
one
-year extension to April 5, 2021.
|
(2)
|
Represents initial maturity date. We have the option to extend the maturity date for up to
three
successive
one
-year extensions.
|
(3)
|
The interest rate is capped at
4.40%
under an interest rate cap derivative.
|
(4)
|
The interest rate is capped at
4.30%
under an interest rate cap derivative.
|
•
|
In connection with the seller financing related to the HOME SFR Transaction, we entered into a loan agreement (the “MSR Loan Agreement”) between HOME Borrower, the sellers and MSR Lender, LLC, as agent. On December 7, 2018, the MSR Loan Agreement was repaid in full by a portion of the proceeds of the MS Loan Agreement described below. In connection with the repayment of the MSR Loan Agreement, we recognized a loss on extinguishment of
$1.7 million
, which includes the write-off of
$1.1 million
of unamortized deferred financing costs and
$0.6 million
of excess interest payments.
|
•
|
In connection with the seller financing related to the first closing under the HOME Flow Transaction on March 30, 2017, HOME Borrower II entered into the HOME II Loan Agreement with entities sponsored by Amherst. On November 13, 2017, HOME Borrower II entered into an amended and restated loan agreement, which was acquired by Metropolitan Life Insurance Company (“MetLife”). HOME Borrower II has the option to extend the HOME II Loan Agreement beyond the initial maturity date for
three
successive
one
-year extensions, provided, among other things, that there is no event of default under the HOME II Loan Agreement on each maturity date. The HOME II Loan Agreement is cross-defaulted and cross-collateralized with the HOME III Loan Agreement.
|
•
|
In connection with the seller financing related to the second closing under the HOME Flow Transaction on June 29, 2017, HOME Borrower III entered into the HOME III Loan Agreement with entities sponsored by Amherst. On November 13, 2017, HOME Borrower III entered into an amended and restated loan agreement, which was acquired by MetLife. HOME Borrower III has the option to extend the HOME III Loan Agreement beyond the initial maturity date for
three
successive
one
-year extensions, provided, among other things, that there is no event of default under the HOME III Loan Agreement on each maturity date. The HOME III Loan Agreement is cross-defaulted and cross-collateralized with the HOME II Loan Agreement.
|
•
|
In connection with the seller financing related to the third and final closing under the HOME Flow Transaction on November 29, 2017, HOME Borrower IV entered into the two separate loan agreements with entities sponsored by Amherst (collectively, the “HOME IV Loan Agreements”). The HOME IV Loan Agreements were acquired by MetLife on November 29, 2017.
|
•
|
reporting requirements to the agent or lender,
|
•
|
minimum adjusted tangible net worth requirements,
|
•
|
minimum net asset requirements,
|
•
|
limitations on the indebtedness,
|
•
|
minimum levels of liquidity, including specified levels of unrestricted cash,
|
•
|
limitations on sales and dispositions of properties collateralizing certain of the loan agreements,
|
•
|
various restrictions on the use of cash generated by the operations of properties, and
|
•
|
a minimum fixed charge coverage ratio.
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Balance outstanding at end of period
|
$
|
1,739,048
|
|
|
$
|
1,282,428
|
|
|
$
|
1,226,972
|
|
Maximum month-end balance outstanding during the period
|
1,739,048
|
|
|
1,316,240
|
|
|
1,233,187
|
|
|||
Weighted average balance
|
1,444,816
|
|
|
1,157,532
|
|
|
887,392
|
|
|||
Amount of available funding at end of period
|
275,849
|
|
|
308,042
|
|
|
112,287
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net cash used in operating activities
|
|
$
|
(35,930
|
)
|
|
$
|
(48,151
|
)
|
|
$
|
(113,133
|
)
|
Net cash (used in) provided by investing activities
|
|
(429,553
|
)
|
|
621,206
|
|
|
567,528
|
|
|||
Net cash provided by (used in) financing activities
|
|
385,155
|
|
|
(540,790
|
)
|
|
(462,440
|
)
|
|||
Total cash flows
|
|
$
|
(80,328
|
)
|
|
$
|
32,265
|
|
|
$
|
(8,045
|
)
|
|
|
|
Amount Due during the Years ending December 31,
|
|
|
||||||||||||||
|
Total
|
|
2019
|
|
2020 - 2021
|
|
2022 - 2023
|
|
Thereafter
|
||||||||||
Operating leases
|
$
|
2,649
|
|
|
$
|
1,310
|
|
|
$
|
1,339
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Borrowings (1)
|
1,739,048
|
|
|
193,654
|
|
|
30,497
|
|
|
1,006,197
|
|
|
508,700
|
|
|||||
Interest (2)
|
433,421
|
|
|
78,456
|
|
|
137,010
|
|
|
105,924
|
|
|
112,031
|
|
|||||
|
$
|
2,175,118
|
|
|
$
|
273,420
|
|
|
$
|
168,846
|
|
|
$
|
1,112,121
|
|
|
$
|
620,731
|
|
(1)
|
Maturities include applicable extensions.
|
(2)
|
Assumes interest rates as of
December 31, 2018
remain in effect for the remaining term of the borrowings. Actual payments could vary.
|
Exhibit Number
|
|
Description
|
|
Separation Agreement, dated as of December 21, 2012, between Front Yard Residential Corporation f/k/a Altisource Residential Corporation and Altisource Portfolio Solutions S.A. (incorporated by reference to Exhibit 2.1 of the Registrant's Current Report on Form 8-K filed with the Commission on December 28, 2012).
|
|
|
Membership Interest Purchase and Sale Agreement, dated September 30, 2016, between MSR I, LP and Front Yard Residential, L.P. f/k/a Altisource Residential, L.P. (incorporated by reference to Exhibit 2.1 of the registrant's Current Report on Form 8-K filed on October 3, 2016).
|
|
|
Purchase and Sale Agreement, dated September 30, 2016, between Firebird SFE I, LLC and Front Yard Residential f/k/a Altisource Residential, L.P. (incorporated by reference to Exhibit 2.2 of the registrant's Current Report on Form 8-K filed on October 3, 2016).
|
|
|
Purchase and Sale Agreement, dated March 30, 2017, among Vaca Morada Partners, LP, MSR II, LP and Front Yard Residential, L.P. f/k/a Altisource Residential, L.P. (incorporated by reference to Exhibit 2.1 of the Registrant's Current Report on Form 8-K filed on April 5, 2017).
|
|
|
First Amendment to the Purchase and Sale Agreement, dated June 29, 2017, among Vaca Morada Partners, LP, MSR II, LP and Front Yard Residential, L.P. f/k/a Altisource Residential, L.P. (incorporated by reference to Exhibit 2.1 of the Registrant's Current Report on Form 8-K filed on July 6, 2017).
|
|
|
Second Amendment to the Purchase and Sale Agreement, dated November 29, 2017, among Vaca Morada Partners, LP, MSR II, LP and Front Yard Residential, L.P. f/k/a Altisource Residential, L.P. (incorporated by reference to Exhibit 2.1 of the Registrant's Current Report on Form 8-K filed on December 5, 2017).
|
|
|
Purchase Agreement, dated as of August 8, 2018, by and among FYR SFR Purchaser, LLC, RHA 1 Inc., RHA 2 Inc., RHA 3 Inc., HavenBrook Partners, LLC, Rental Home Associates LLC and each of the unitholders of HavenBrook Partners, LLC (incorporated by reference to Exhibit 2.1 of the Registrant’s Current Report on Form 8-K filed on August 9, 2018).
|
|
|
Articles of Restatement of Altisource Residential Corporation (incorporated by reference to Exhibit 3.3 of the Registrant's Current Report on Form 8-K filed on April 8, 2013).
|
|
|
Articles of Amendment of Front Yard Residential Corporation (incorporated by reference to Exhibit 3.1 of the registrant's Current Report on Form 8-K filed on February 9, 2018).
|
|
|
Amended and Restated By-laws of Front Yard Residential Corporation (incorporated by reference to Exhibit 3.2 of the Registrant's Current Report on Form 8-K filed with the Commission on February 9, 2018).
|
|
|
Support Services Agreement, dated as of December 21, 2012, between Front Yard Residential Corporation f/k/a Altisource Residential Corporation and Altisource Solutions S.à r.l. (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed with the Commission on December 28, 2012).
|
|
|
Master Services Agreement, dated as of December 21, 2012, between Front Yard Residential Corporation f/k/a Altisource Residential Corporation and Altisource Solutions S.à r.l. (incorporated by reference to Exhibit 10.4 of the Registrant’s Current Report on Form 8-K filed with the Commission on December 28, 2012).
|
|
10.3
†
|
|
Front Yard Residential Corporation f/k/a Altisource Residential Corporation Conversion Option Plan (incorporated by reference to Exhibit 10.8 of the Registrant’s Current Report on Form 8-K filed with the Commission on December 28, 2012).
|
|
Front Yard Residential Corporation f/k/a Altisource Residential Corporation Special Conversion Option Plan (incorporated by reference to Exhibit 10.9 of the Registrant’s Current Report on Form 8-K filed with the Commission on December 28, 2012).
|
|
|
Master Repurchase Agreement and related Annexes, dated as of December 22, 2014, between Credit Suisse Securities (USA) LLC and ARNS, Inc. (incorporated by reference to Exhibit 10.22 of the Registrant’s Annual Report on Form 10-K filed with the Commission on March 2, 2015).
|
|
|
Flow Servicing Agreement, dated as of January 24, 2015, between Fay Servicing, LLC and Front Yard Residential L.P. f/k/a Altisource Residential, L.P. (incorporated by reference to Exhibit 10.25 of the Registrant’s Annual Report on Form 10-K filed with the Commission on March 2, 2015).
|
|
Servicing Agreement, dated as of January 29, 2015, between Front Yard Residential, L.P. f/k/a Altisource Residential, L.P. and Servis One, Inc. d/b/a BSI Financial Services (incorporated by reference to Exhibit 10.26 of the Registrant’s Annual Report on Form 10-K filed with the Commission on March 2, 2015).
|
|
|
Asset Management Agreement, dated March 31, 2015, among Front Yard Residential Corporation f/k/a Altisource Residential Corporation, Altisource Residential, L.P. and Altisource Asset Management Corporation (incorporated by reference to Exhibit 10.1 of the Registrant's Current Report on Form 8-K filed with the Commission on April 2, 2015).
|
|
|
Amendment to Asset Management Agreement, dated April 7, 2015, among Front Yard Residential Corporation f/k/a Altisource Residential Corporation, Altisource Residential, L.P. and Altisource Asset Management Corporation (incorporated by reference to Exhibit 10.1 of the Registrant's Current Report on Form 8-K filed with the Commission on April 13, 2015).
|
|
|
Guaranty, dated as of April 10, 2015 made by Front Yard Residential Corporation f/k/a Altisource Residential Corporation in favor of Nomura Corporate Funding Americas, LLC (incorporated by reference to Exhibit 10.2 of the Registrant’s Quarterly Report on Form 10-Q filed with the Commission on May 7, 2015).
|
|
|
Second Amended and Restated Loan and Security Agreement, dated as of April 5, 2018, among Nomura Corporate Funding Americas, LLC, and ARLP REO I, LLC, on behalf of itself and with respect to QRS Series of ARLP REO I, LLC and TRS Series of ARLP REO I, LLC, ARLP REO II, LLC, on behalf of itself and with respect to QRS Series of ARLP REO II, LLC and TRS Series of ARLP REO II, LLC, ARLP REO III, LLC, on behalf of itself and with respect to QRS Series of ARLP REO III, LLC and TRS Series of ARLP REO III, LLC, ARLP REO IV, LLC, on behalf of itself and with respect to QRS Series of ARLP REO IV, LLC and TRS Series of ARLP REO IV, LLC, ARLP REO V, LLC, on behalf of itself and with respect to QRS Series of ARLP REO V, LLC and TRS Series of ARLP REO V, LLC, ARLP REO VI, LLC, on behalf of itself and with respect to QRS Series of ARLP REO VI, LLC and TRS Series of ARLP REO VI, LLC, ARLP REO VII, LLC, on behalf of itself and with respect to QRS Series of ARLP REO VII, LLC and TRS Series of ARLP REO VII, LLC and ARLP REO 400, LLC, on behalf of itself and with respect to QRS Series of ARLP REO 400, LLC and TRS Series of ARLP REO 400, LLC and ARLP REO 500, LLC, on behalf of itself and with respect to QRS Series of ARLP REO 500, LLC and TRS Series of ARLP REO 500, LLC and each other Delaware limited liability company that is organized in series that may be subsequently added as a party to the Agreement under a Joinder Agreement (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed with the Commission on April 11, 2018).
|
|
10.12
†
|
|
Front Yard Residential Corporation f/k/a Altisource Residential Corporation 2016 Equity Incentive Plan. (incorporated by reference to Exhibit 10.29 of the Registrant’s Annual Report on Form 10-K filed with the Commission on March 1, 2017)
|
10.13
†
|
|
Form of Stock Option Award Agreement under the 2016 Equity Incentive Plan (incorporated by reference to Exhibit 10.6 of the Registrant’s Quarterly Report on Form 10-Q filed with the Commission on November 7, 2016).
|
10.14
†
|
|
Form of Restricted Stock Unit Award Agreement under the 2016 Equity Incentive Plan (incorporated by reference to Exhibit 10.7 of the Registrant’s Quarterly Report on Form 10-Q filed with the Commission on November 7, 2016).
|
|
Agreement between Front Yard Residential Corporation f/k/a Altisource Residential Corporation and RESI Shareholders Group, dated May 10, 2016 (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed with the Commission on May 11, 2016).
|
|
|
Property Management Services Agreement, dated September 30, 2016, by and between HOME SFR Borrower, LLC and Main Street Renewal, LLC (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed with the Commission on October 3, 2016).
|
|
|
Side Letter, dated September 30, 2016, by and between HOME SFR Borrower, LLC and Main Street Renewal, LLC (incorporated by reference to Exhibit 10.2 of the Registrant’s Current Report on Form 8-K filed with the Commission on October 3, 2016).
|
|
|
Amendment and Waiver Agreement, dated September 30, 2016, by and among Front Yard Residential Corporation f/k/a Altisource Residential Corporation and Altisource Solutions S.à r.l. (incorporated by reference to Exhibit 10.3 of the Registrant’s Current Report on Form 8-K filed with the Commission on October 3, 2016).
|
|
|
Loan Agreement, dated September 30, 2016, among Home SFR Borrower, LLC, as Borrower, MSR I, L.P., as a Lender, MSR II, L.P., as a Lender, and MSR Lender LLC, as Agent (incorporated by reference to Exhibit 10.4 of the Registrant’s Current Report on Form 8-K filed with the Commission on October 3, 2016).
|
|
|
Amended and Restated Loan Agreement, dated October 7, 2016, between Home SFR Borrower, LLC, as Borrower, and MSR Lender LLC, as Lender (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed with the Commission on October 14, 2016).
|
|
Third Amended and Restated Master Repurchase Agreement, dated November 18, 2016, by and among Credit Suisse First Boston Mortgage Capital LLC, Credit Suisse AG, acting through its Cayman Islands Branch, Alpine Securitization LTD and other Buyers joined thereto from time to time, Altisource Residential, L.P., ARLP Repo Seller S, LLC, ARLP Repo Seller L, LLC and ARNS, Inc., ARLP Trust, ARLP Trust 3 on behalf of itself and each of its series, ARLP Trust 4, ARLP Trust 5 on behalf of itself and each of its series, ARLP Trust 6 on behalf of itself and each of its series, ARLP Securitization Trust, Series 2014-1 on behalf of itself and each of its series, ARLP Securitization Trust, Series 2014-2 on behalf of itself and each of its series, RESI SFR Sub, LLC and RESI REO Sub, LLC, and the Altisource Residential Corporation (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed with the Commission on November 23, 2016).
|
|
|
Third Amended and Restated Guaranty made by Front Yard Residential Corporation f/k/a Altisource Residential Corporation in favor of Credit Suisse First Boston Mortgage Capital LLC, for the benefit of Credit Suisse AG, acting through its Cayman Islands Branch, Alpine Securitization LTD and other Buyers joined thereto from time to time, dated November 18, 2016 (incorporated by reference to Exhibit 10.2 of the Registrant’s Current Report on Form 8-K filed with the Commission on November 23, 2016).
|
|
|
Loan Agreement, dated March 30, 2017, among Home SFR Borrower II, LLC, as Borrower, Vaca Morada Partners, LP, as a Lender, MSR II, LP, as a Lender, and Amherst SFR Lender, LLC, as Agent (incorporated by reference to Exhibit 10.1 of the Registrant's Current Report on Form 8-K filed on April 5, 2017).
|
|
|
Credit and Security Agreement, dated April 6, 2017, between RESI TL1 Borrower, LLC; American Money Management Corporation, as Agent; and each Lender named a party thereto (incorporated by reference to Exhibit 10.1 of the Registrant's Current Report on Form 8-K filed on April 12, 2017).
|
|
|
Loan Agreement, dated June 29, 2017, among Home SFR Borrower III, LLC, as Borrower, Vaca Morada Partners, LP, as a Lender, MSR II, LP, as a Lender, and Amherst SFR Lender, LLC, as Agent (incorporated by reference to Exhibit 10.1 of the Registrant's Current Report on Form 8-K filed on July 6, 2017).
|
|
|
Amended and Restated Loan Agreement, dated November 13, 2017, by and among Home SFR Borrower II, LLC, as Borrower, Vaca Morada Partners, LP, as a Lender, MSR II, L.P., as a Lender, and Amherst SFR Lender LLC, as Agent (incorporated by reference to Exhibit 10.1 of the Registrant's Current Report on Form 8-K filed on November 17, 2017).
|
|
|
Amended and Restated Loan Agreement, dated November 13, 2017, by and among Home SFR Borrower III, LLC, as Borrower, Vaca Morada Partners, LP, as a Lender, MSR II, L.P., as a Lender, and Amherst SFR Lender LLC, as Agent (incorporated by reference to Exhibit 10.2 of the Registrant's Current Report on Form 8-K filed on November 17, 2017).
|
|
|
Loan Agreement (Tranche 3A), dated November 29, 2017, among Home SFR Borrower IV, LLC, as Borrower, Vaca Morada Partners, LP, as a Lender, MSR II, LP, as a Lender, and Amherst SFR Lender, LLC, as Agent (incorporated by reference to Exhibit 10.1 of the Registrant's Current Report on Form 8-K filed on December 5, 2017).
|
|
|
Loan Agreement (Tranche 3B), dated November 29, 2017, among Home SFR Borrower IV, LLC, as Borrower, Vaca Morada Partners, LP, as a Lender, MSR II, LP, as a Lender, and Amherst SFR Lender, LLC, as Agent (incorporated by reference to Exhibit 10.2 of the Registrant's Current Report on Form 8-K filed on December 5, 2017).
|
|
|
Omnibus Amendment to Master Services Agreement, Waiver Agreement, Services Letter and Fee Letter, dated as of the August 8, 2018, by and between Front Yard Residential Corporation f/k/a/ Altisource Residential Corporation and Altisource S.à r.l., as successor in interest to Altisource Solutions S.à r.l. (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed on August 9, 2018).
|
|
|
Loan Agreement, dated as of August 8, 2018, by and between FYR SFR Borrower, LLC, as Borrower, and Berkadia Commercial Mortgage LLC, as Lender (incorporated by reference to Exhibit 10.2 of the Registrant’s Current Report on Form 8-K filed on August 9, 2018).
|
|
|
Loan Agreement, dated as of December 7, 2018, by and among Home SFR Borrower, LLC, as Borrower, and Morgan Stanley Bank, N.A.
and the other lenders from time to time party hereto, as Lenders, Morgan Stanley Mortgage Capital Holdings, LLC , as Administrative Agent and Wells Fargo Bank, N.A., as paying agent and calculation agent (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed on December 13, 2018).
|
|
|
Amendment to Property Management Services Agreement, dated as of December 7, 2018, by and between Main Street Renewal LLC and HOME SFR Borrower, LLC (incorporated by reference to Exhibit 10.2 of the Registrant’s Current Report on Form 8-K filed on December 13, 2018).
|
|
21
*
|
|
Schedule of Subsidiaries
|
23.1
*
|
|
Consent of Ernst and Young LLP
|
23.2
*
|
|
Consent of Deloitte & Touche LLP
|
24
*
|
|
Power of Attorney (incorporated by reference to the signature page of this Annual Report on Form 10-K).
|
31.1
*
|
|
Certification of CEO Pursuant to Section 302 of the Sarbanes-Oxley Act
|
31.2
*
|
|
Certification of CFO Pursuant to Section 302 of the Sarbanes-Oxley Act
|
32.1
*
|
|
Certification of CEO Pursuant to Section 906 of the Sarbanes-Oxley Act
|
32.2
*
|
|
Certification of CFO Pursuant to Section 906 of the Sarbanes-Oxley Act
|
101.INS*
|
|
XBRL Instance Document
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF*
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB*
|
|
XBRL Extension Labels Linkbase
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
Front Yard Residential Corporation
|
February 27, 2019
|
By:
|
/s/ George G. Ellison
|
|
|
George G. Ellison
Chief Executive Officer |
February 27, 2019
|
By:
|
/s/ Robin N. Lowe
|
|
|
Robin N. Lowe
Chief Financial Officer |
Signature
|
|
Title
|
|
Date
|
/s/ Rochelle R. Dobbs
|
|
Chair of the Board of Directors
|
|
February 27, 2019
|
Rochelle R. Dobbs
|
|
|
|
|
/s/ Michael A. Eruzione
|
|
Director
|
|
February 27, 2019
|
Michael A. Eruzione
|
|
|
|
|
/s/ Wade J. Henderson
|
|
Director
|
|
February 27, 2019
|
Wade J. Henderson
|
|
|
|
|
/s/ George W. McDowell
|
|
Director
|
|
February 27, 2019
|
George W. McDowell
|
|
|
|
|
/s/ David B. Reiner
|
|
Director
|
|
February 27, 2019
|
David B. Reiner
|
|
|
|
|
/s/ George G. Ellison
|
|
Director and Chief Executive Officer (Principal Executive Officer)
|
|
February 27, 2019
|
George G. Ellison
|
|
|
|
|
/s/ Robin N. Lowe
|
|
Chief Financial Officer (Principal Financial Officer
and Principal Accounting Officer)
|
|
February 27, 2019
|
Robin N. Lowe
|
|
|
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
Assets:
|
|
|
|
||||
Real estate held for use:
|
|
|
|
||||
Land
|
$
|
395,532
|
|
|
$
|
322,062
|
|
Rental residential properties
|
1,667,939
|
|
|
1,381,110
|
|
||
Real estate owned
|
40,496
|
|
|
64,036
|
|
||
Total real estate held for use
|
2,103,967
|
|
|
1,767,208
|
|
||
Less: accumulated depreciation
|
(137,881
|
)
|
|
(73,655
|
)
|
||
Total real estate held for use, net
|
1,966,086
|
|
|
1,693,553
|
|
||
Real estate assets held for sale
|
146,921
|
|
|
75,718
|
|
||
Mortgage loans at fair value
|
8,072
|
|
|
11,477
|
|
||
Cash and cash equivalents
|
44,186
|
|
|
113,666
|
|
||
Restricted cash
|
36,974
|
|
|
47,822
|
|
||
Accounts receivable, net
|
11,591
|
|
|
19,555
|
|
||
Goodwill
|
13,376
|
|
|
—
|
|
||
Prepaid expenses and other assets
|
43,045
|
|
|
12,758
|
|
||
Total assets
|
$
|
2,270,251
|
|
|
$
|
1,974,549
|
|
Liabilities:
|
|
|
|
||||
Repurchase and loan agreements
|
$
|
1,722,219
|
|
|
$
|
1,270,157
|
|
Accounts payable and accrued liabilities
|
72,672
|
|
|
55,639
|
|
||
Payable to AAMC
|
3,968
|
|
|
4,151
|
|
||
Total liabilities
|
1,798,859
|
|
|
1,329,947
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 8)
|
—
|
|
|
—
|
|
||
|
|
|
|
||||
Equity:
|
|
|
|
||||
Common stock, $0.01 par value, 200,000,000 authorized shares; 53,630,204 and 53,447,950 shares issued and outstanding as of December 31, 2018 and 2017, respectively
|
536
|
|
|
534
|
|
||
Additional paid-in capital
|
1,184,132
|
|
|
1,181,327
|
|
||
Accumulated deficit
|
(700,623
|
)
|
|
(537,259
|
)
|
||
Accumulated other comprehensive loss
|
(12,653
|
)
|
|
—
|
|
||
Total equity
|
471,392
|
|
|
644,602
|
|
||
Total liabilities and equity
|
$
|
2,270,251
|
|
|
$
|
1,974,549
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Rental revenues
|
$
|
183,013
|
|
|
$
|
123,597
|
|
|
$
|
48,563
|
|
Change in unrealized gain on mortgage loans
|
—
|
|
|
(190,856
|
)
|
|
(195,909
|
)
|
|||
Net realized gain on mortgage loans
|
—
|
|
|
84,024
|
|
|
85,990
|
|
|||
Net realized gain on sales of real estate
|
—
|
|
|
76,913
|
|
|
117,617
|
|
|||
Interest income
|
—
|
|
|
493
|
|
|
497
|
|
|||
Total revenues
|
183,013
|
|
|
94,171
|
|
|
56,758
|
|
|||
Expenses:
|
|
|
|
|
|
||||||
Residential property operating expenses
|
63,987
|
|
|
62,759
|
|
|
66,466
|
|
|||
Property management expenses
|
13,189
|
|
|
8,982
|
|
|
3,701
|
|
|||
Depreciation and amortization
|
80,961
|
|
|
61,601
|
|
|
27,027
|
|
|||
Acquisition and integration costs
|
33,607
|
|
|
778
|
|
|
9,339
|
|
|||
Impairment
|
12,734
|
|
|
40,108
|
|
|
57,913
|
|
|||
Mortgage loan servicing costs
|
1,521
|
|
|
10,683
|
|
|
34,595
|
|
|||
Interest expense
|
77,035
|
|
|
59,582
|
|
|
53,868
|
|
|||
Share-based compensation
|
3,024
|
|
|
4,139
|
|
|
1,287
|
|
|||
General and administrative
|
13,817
|
|
|
10,994
|
|
|
10,556
|
|
|||
Management fees to AAMC
|
14,743
|
|
|
17,301
|
|
|
19,175
|
|
|||
Total expenses
|
314,618
|
|
|
276,927
|
|
|
283,927
|
|
|||
Net loss on real estate and mortgage loans
|
(145
|
)
|
|
—
|
|
|
—
|
|
|||
Operating loss
|
(131,750
|
)
|
|
(182,756
|
)
|
|
(227,169
|
)
|
|||
Casualty losses, net
|
(552
|
)
|
|
(6,021
|
)
|
|
—
|
|
|||
Insurance recoveries
|
588
|
|
|
3,349
|
|
|
—
|
|
|||
Other income (expense)
|
925
|
|
|
—
|
|
|
(750
|
)
|
|||
Loss before income taxes
|
(130,789
|
)
|
|
(185,428
|
)
|
|
(227,919
|
)
|
|||
Income tax expense
|
46
|
|
|
26
|
|
|
109
|
|
|||
Net loss
|
$
|
(130,835
|
)
|
|
$
|
(185,454
|
)
|
|
$
|
(228,028
|
)
|
|
|
|
|
|
|
||||||
Loss per share of common stock – basic:
|
|
|
|
|
|
||||||
Loss per basic share
|
$
|
(2.44
|
)
|
|
$
|
(3.47
|
)
|
|
$
|
(4.18
|
)
|
Weighted average common stock outstanding – basic
|
53,552,109
|
|
|
53,493,523
|
|
|
54,490,979
|
|
|||
Loss per share of common stock – diluted:
|
|
|
|
|
|
||||||
Loss per diluted share
|
$
|
(2.44
|
)
|
|
$
|
(3.47
|
)
|
|
$
|
(4.18
|
)
|
Weighted average common stock outstanding – diluted
|
53,552,109
|
|
|
53,493,523
|
|
|
54,490,979
|
|
|||
|
|
|
|
|
|
||||||
Dividends declared per common share
|
$
|
0.60
|
|
|
$
|
0.60
|
|
|
$
|
0.75
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net loss
|
$
|
(130,835
|
)
|
|
$
|
(185,454
|
)
|
|
$
|
(228,028
|
)
|
|
|
|
|
|
|
||||||
Other comprehensive loss:
|
|
|
|
|
|
||||||
Change in fair value of interest rate caps
|
(13,028
|
)
|
|
—
|
|
|
—
|
|
|||
Losses from interest rate caps reclassified into earnings from accumulated other comprehensive loss
|
375
|
|
|
—
|
|
|
—
|
|
|||
Net other comprehensive loss
|
(12,653
|
)
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
Comprehensive loss
|
$
|
(143,488
|
)
|
|
$
|
(185,454
|
)
|
|
$
|
(228,028
|
)
|
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Accumulated Deficit
|
|
Accumulated Other Comprehensive Loss
|
|
Total Equity
|
|||||||||||||
|
|
Number of Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
December 31, 2015
|
|
55,581,005
|
|
|
$
|
556
|
|
|
$
|
1,202,418
|
|
|
$
|
(50,617
|
)
|
|
$
|
—
|
|
|
$
|
1,152,357
|
|
Issuance of common stock, including stock option exercises
|
|
44,995
|
|
|
1
|
|
|
58
|
|
|
—
|
|
|
—
|
|
|
59
|
|
|||||
Repurchases of common stock
|
|
(1,958,369
|
)
|
|
(20
|
)
|
|
(21,518
|
)
|
|
—
|
|
|
—
|
|
|
(21,538
|
)
|
|||||
Dividends on common stock ($0.75 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(41,069
|
)
|
|
—
|
|
|
(41,069
|
)
|
|||||
Share-based compensation
|
|
—
|
|
|
—
|
|
|
1,287
|
|
|
—
|
|
|
—
|
|
|
1,287
|
|
|||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(228,028
|
)
|
|
—
|
|
|
(228,028
|
)
|
|||||
December 31, 2016
|
|
53,667,631
|
|
|
537
|
|
|
1,182,245
|
|
|
(319,714
|
)
|
|
—
|
|
|
863,068
|
|
|||||
Issuance of common stock, including stock option exercises
|
|
150,613
|
|
|
1
|
|
|
104
|
|
|
—
|
|
|
—
|
|
|
105
|
|
|||||
Repurchases of common stock
|
|
(370,294
|
)
|
|
(4
|
)
|
|
(5,161
|
)
|
|
—
|
|
|
—
|
|
|
(5,165
|
)
|
|||||
Dividends on common stock ($0.60 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(32,091
|
)
|
|
—
|
|
|
(32,091
|
)
|
|||||
Share-based compensation
|
|
—
|
|
|
—
|
|
|
4,139
|
|
|
—
|
|
|
—
|
|
|
4,139
|
|
|||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(185,454
|
)
|
|
—
|
|
|
(185,454
|
)
|
|||||
December 31, 2017
|
|
53,447,950
|
|
|
534
|
|
|
1,181,327
|
|
|
(537,259
|
)
|
|
—
|
|
|
644,602
|
|
|||||
Issuance of common stock, including stock option exercises
|
|
212,219
|
|
|
2
|
|
|
106
|
|
|
—
|
|
|
—
|
|
|
108
|
|
|||||
Repurchases of common stock
|
|
(29,965
|
)
|
|
—
|
|
|
(325
|
)
|
|
—
|
|
|
—
|
|
|
(325
|
)
|
|||||
Dividends on common stock ($0.60 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(32,529
|
)
|
|
—
|
|
|
(32,529
|
)
|
|||||
Share-based compensation
|
|
—
|
|
|
—
|
|
|
3,024
|
|
|
—
|
|
|
—
|
|
|
3,024
|
|
|||||
Change in fair value of cash flow hedging derivatives
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,653
|
)
|
|
(12,653
|
)
|
|||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(130,835
|
)
|
|
—
|
|
|
(130,835
|
)
|
|||||
December 31, 2018
|
|
53,630,204
|
|
|
$
|
536
|
|
|
$
|
1,184,132
|
|
|
$
|
(700,623
|
)
|
|
$
|
(12,653
|
)
|
|
$
|
471,392
|
|
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Operating activities:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(130,835
|
)
|
|
$
|
(185,454
|
)
|
|
$
|
(228,028
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
||||||
Change in unrealized gain on mortgage loans
|
32,384
|
|
|
190,856
|
|
|
195,909
|
|
|||
Net realized loss (gain) on mortgage loans
|
938
|
|
|
(84,024
|
)
|
|
(85,990
|
)
|
|||
Net realized gain on sales of real estate
|
(33,177
|
)
|
|
(76,913
|
)
|
|
(117,617
|
)
|
|||
Depreciation and amortization
|
80,961
|
|
|
61,601
|
|
|
27,027
|
|
|||
Impairment
|
12,734
|
|
|
40,108
|
|
|
57,913
|
|
|||
Accretion of interest on re-performing mortgage loans
|
—
|
|
|
—
|
|
|
(142
|
)
|
|||
Share-based compensation
|
3,024
|
|
|
4,139
|
|
|
1,287
|
|
|||
Amortization of deferred financing costs and loan discounts
|
6,099
|
|
|
7,443
|
|
|
12,519
|
|
|||
Casualty losses, net
|
552
|
|
|
6,021
|
|
|
—
|
|
|||
Insurance recoveries
|
(588
|
)
|
|
(3,349
|
)
|
|
—
|
|
|||
Change in fair value of interest rate cap derivatives in profit or loss
|
1,311
|
|
|
—
|
|
|
—
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable, net
|
2,498
|
|
|
(2,024
|
)
|
|
1,650
|
|
|||
Receivable from AAMC
|
—
|
|
|
—
|
|
|
2,180
|
|
|||
Prepaid expenses and other assets
|
(24,380
|
)
|
|
(4,875
|
)
|
|
(4,530
|
)
|
|||
Accounts payable and accrued liabilities
|
12,732
|
|
|
(565
|
)
|
|
19,423
|
|
|||
Payable to AAMC
|
(183
|
)
|
|
(1,115
|
)
|
|
5,266
|
|
|||
Net cash used in operating activities
|
(35,930
|
)
|
|
(48,151
|
)
|
|
(113,133
|
)
|
|||
Investing activities:
|
|
|
|
|
|
||||||
Investment in real estate
|
(475,760
|
)
|
|
(135,101
|
)
|
|
(299,556
|
)
|
|||
Investment in renovations
|
(32,790
|
)
|
|
(38,067
|
)
|
|
(53,394
|
)
|
|||
Investment in HavenBrook
|
(11,399
|
)
|
|
—
|
|
|
—
|
|
|||
Payment of real estate tax advances
|
(283
|
)
|
|
(4,233
|
)
|
|
(23,479
|
)
|
|||
Proceeds from mortgage loan resolutions and dispositions
|
6,045
|
|
|
527,195
|
|
|
543,099
|
|
|||
Receipt of mortgage loan payments
|
307
|
|
|
7,238
|
|
|
22,870
|
|
|||
Proceeds from dispositions of real estate
|
81,739
|
|
|
264,174
|
|
|
378,043
|
|
|||
Proceeds of casualty insurance
|
2,588
|
|
|
—
|
|
|
—
|
|
|||
Investment in derivative financial instrument
|
—
|
|
|
—
|
|
|
(55
|
)
|
|||
Net cash (used in) provided by investing activities
|
(429,553
|
)
|
|
621,206
|
|
|
567,528
|
|
|||
Financing activities:
|
|
|
|
|
|
||||||
Proceeds from exercise of stock options
|
108
|
|
|
243
|
|
|
83
|
|
|||
Payment of tax withholdings on share-based compensation plan awards
|
—
|
|
|
(138
|
)
|
|
(24
|
)
|
|||
Repurchase of common stock
|
(325
|
)
|
|
(5,165
|
)
|
|
(21,538
|
)
|
|||
Dividends on common stock
|
(32,261
|
)
|
|
(32,162
|
)
|
|
(38,286
|
)
|
|||
Repayments of other secured debt
|
—
|
|
|
(144,971
|
)
|
|
(361,544
|
)
|
|||
Proceeds from repurchase and loan agreements
|
1,116,000
|
|
|
112,317
|
|
|
793,392
|
|
|||
Repayments of repurchase and loan agreements
|
(659,381
|
)
|
|
(462,808
|
)
|
|
(823,192
|
)
|
|||
Payment of deferred financing costs and loan discounts
|
(10,656
|
)
|
|
(8,106
|
)
|
|
(11,331
|
)
|
|||
Premium paid for interest rate cap derivatives
|
(28,330
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash provided by (used in) financing activities
|
385,155
|
|
|
(540,790
|
)
|
|
(462,440
|
)
|
|||
Net change in cash, cash equivalents and restricted cash
|
(80,328
|
)
|
|
32,265
|
|
|
(8,045
|
)
|
|||
Cash, cash equivalents and restricted cash as of beginning of the period
|
161,488
|
|
|
129,223
|
|
|
137,268
|
|
|||
Cash, cash equivalents and restricted cash as of end of the period
|
$
|
81,160
|
|
|
$
|
161,488
|
|
|
$
|
129,223
|
|
|
|
|
|
|
|
Front Yard Residential Corporation
Consolidated Statements of Cash Flows (continued)
(In thousands)
|
|||||||||||
|
Year Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||||||
Cash paid for:
|
|
|
|
|
|
||||||
Interest
|
$
|
69,628
|
|
|
$
|
52,885
|
|
|
$
|
39,838
|
|
Income taxes
|
58
|
|
|
28
|
|
|
180
|
|
|||
|
|
|
|
|
|
||||||
Non-cash investing and financing activities:
|
|
|
|
|
|
||||||
Seller financing of assets acquired
|
$
|
—
|
|
|
$
|
401,211
|
|
|
$
|
489,259
|
|
Transfer of mortgage loans to real estate owned, net
|
4,935
|
|
|
40,436
|
|
|
206,987
|
|
|||
Transfer of mortgage loans at fair value to mortgage loans held for sale
|
—
|
|
|
451,317
|
|
|
195,461
|
|
|||
Change in accrued capital expenditures
|
526
|
|
|
2,245
|
|
|
(3,212
|
)
|
|||
Changes in receivables from mortgage loan dispositions, payments and real estate tax advances to borrowers, net
|
(333
|
)
|
|
(6,152
|
)
|
|
(4,945
|
)
|
|||
Changes in receivables from real estate owned dispositions
|
(2,341
|
)
|
|
(13,456
|
)
|
|
(4,377
|
)
|
|||
Change in other comprehensive loss from cash flow hedges
|
(12,653
|
)
|
|
—
|
|
|
—
|
|
|||
Dividends declared but not paid
|
8,541
|
|
|
8,275
|
|
|
8,341
|
|
•
|
Level 1
- Quoted prices in active markets for identical assets or liabilities.
|
•
|
Level 2
- Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.
|
•
|
Level 3
- Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
•
|
Upon conversion of loans to REO, we mark the properties to the most recent market value. The difference between the carrying value of the asset at the time of conversion and the most recent market value, based on BPOs.
|
•
|
The carrying value of each loan is adjusted in each reporting period to the estimated fair value, which may be based on (i) market information, to the extent available and as adjusted for factors specific to individual mortgage loans, or (ii) as determined by AAMC's proprietary discounted cash flow model.
|
•
|
Upon the liquidation of a mortgage loan or REO property, we reclassify previously accumulated unrealized gains to realized gains.
|
Purchase price allocable to RHA entities, including underlying properties
|
|
$
|
471,400
|
|
Purchase price allocable to HavenBrook
|
|
13,600
|
|
|
Gross purchase price
|
|
485,000
|
|
|
Less: net purchase price adjustments at closing (1)
|
|
(3,644
|
)
|
|
Net purchase price
|
|
$
|
481,356
|
|
(1)
|
Purchase price adjustments at closing relate primarily to (i) properties sold by RHA subsequent to negotiation of the purchase price and prior to closing and (ii) working capital balances of each acquired entity.
|
Cash
|
$
|
88,489
|
|
Net proceeds of borrowings
|
462,794
|
|
|
Less: financing related to assets previously acquired
|
(69,927
|
)
|
|
Net purchase price
|
$
|
481,356
|
|
Land
|
|
$
|
82,739
|
|
Rental residential properties
|
|
282,914
|
|
|
Real estate assets held for sale
|
|
94,946
|
|
|
Cash and cash equivalents
|
|
9,255
|
|
|
Restricted cash
|
|
4,780
|
|
|
Accounts receivable, net
|
|
1,778
|
|
|
Goodwill
|
|
13,376
|
|
|
In-place lease intangible assets (1) (2)
|
|
6,462
|
|
|
Other assets (2)
|
|
1,784
|
|
|
Total assets acquired
|
|
498,034
|
|
|
|
|
|
||
Accounts payable and accrued liabilities
|
|
16,678
|
|
|
Total liabilities assumed
|
|
16,678
|
|
|
|
|
|
||
Total allocation of purchase price
|
|
$
|
481,356
|
|
(1)
|
The value of in-place leases is being amortized over the weighted average remaining life of the leases, which was approximately
eight
months as of the acquisition date.
|
(2)
|
Included in prepaid expenses and other assets in the consolidated balance sheet.
|
|
Year ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
Unaudited pro forma revenues
|
$
|
213,307
|
|
|
$
|
141,977
|
|
Unaudited pro forma net loss
|
$
|
(137,695
|
)
|
|
$
|
(212,990
|
)
|
Pro forma loss per basic common share
|
$
|
(2.57
|
)
|
|
$
|
(3.98
|
)
|
Weighted average common stock outstanding - basic
|
53,630,204
|
|
|
53,493,523
|
|
||
Pro forma loss per diluted common share
|
$
|
(2.57
|
)
|
|
$
|
(3.98
|
)
|
Weighted average common stock outstanding - diluted
|
53,630,204
|
|
|
53,493,523
|
|
|
Year ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
Revenues from consolidated statements of operations
|
$
|
183,013
|
|
|
$
|
94,171
|
|
Add: historical revenues not reflected in consolidated statements of operations
|
30,294
|
|
|
47,806
|
|
||
Unaudited pro forma revenues
|
$
|
213,307
|
|
|
$
|
141,977
|
|
|
|
|
|
||||
Net loss from consolidated statements of operations
|
$
|
(130,835
|
)
|
|
$
|
(185,454
|
)
|
Plus: historical net loss not reflected in consolidated statements of operations
|
(9,785
|
)
|
|
(18,825
|
)
|
||
Adjustment for pro forma depreciation and amortization
|
9,016
|
|
|
3,531
|
|
||
Adjustment for pro forma interest expense
|
(6,091
|
)
|
|
(12,242
|
)
|
||
Unaudited pro forma net loss
|
$
|
(137,695
|
)
|
|
$
|
(212,990
|
)
|
•
|
In the first closing on March 30, 2017, our wholly owned subsidiary, HOME SFR Borrower II, LLC (“HOME Borrower II”), acquired
757
SFR properties for an aggregate purchase price of
$106.5 million
. The purchase price was initially funded with approximately
$79.9 million
in a seller financing arrangement (the “HOME II Loan Agreement,” see
Note 7
), representing
75%
of the aggregate purchase price, as well as
$26.6 million
of cash on hand. We capitalized
$1.5 million
of acquisition costs related to this portfolio acquisition. The value of in-place leases was estimated at
$2.4 million
based on the costs we would have incurred to lease the properties and was amortized over the weighted average remaining life of the leases of approximately
seven months
as of the acquisition date.
|
•
|
In the second closing on June 29, 2017, our wholly owned subsidiary, HOME SFR Borrower III, LLC (“HOME Borrower III”), acquired
751
SFR properties for an aggregate purchase price of
$117.1 million
. The purchase price was initially funded with approximately
$87.8 million
in a seller financing arrangement (the “HOME III Loan Agreement,” see
Note 7
), representing
75%
of the aggregate purchase price, as well as
$29.3 million
of cash on hand. We capitalized
$1.3 million
of acquisition costs related to this portfolio acquisition. The value of in-place leases was estimated at
$2.0 million
and was amortized over the weighted average remaining life of the leases of approximately
nine months
as of the acquisition date.
|
•
|
In the third and final closing on November 29, 2017, our wholly owned subsidiary, HOME SFR Borrower IV, LLC (“HOME Borrower IV”) acquired
1,957
SFR properties for an aggregate purchase price of
$305.1 million
. The purchase price was funded with approximately
$228.8 million
in two separate seller financing arrangements (the “HOME IV Loan Agreements,” see
Note 7
), representing
75%
of the aggregate purchase price, as well as
$76.3 million
of cash on hand. We capitalized
$1.9 million
of acquisition costs related to this portfolio acquisition. The value of in-place leases was estimated at
$5.9 million
and was amortized over the weighted average remaining life of the leases of approximately
seven
months as of the acquisition date. In accordance with the related purchase and sale agreement, certain of the properties are subject to potential purchase price adjustments, which will be based on the rental rates achieved for the properties within
24
months after the closing date. Because such future rental rates are unknown, we are unable to predict the ultimate adjustments, if any, that will be made to the initial aggregate purchase price at this time (see
Note 8
).
|
|
|
HOME Borrower II
|
|
HOME Borrower III
|
|
HOME Borrower IV
|
||||||
Land
|
|
$
|
20,668
|
|
|
$
|
22,549
|
|
|
$
|
58,957
|
|
Rental residential properties (1)
|
|
84,942
|
|
|
93,802
|
|
|
242,110
|
|
|||
Prepaid expenses and other assets (2)
|
|
2,380
|
|
|
2,018
|
|
|
5,894
|
|
|||
Total allocation of purchase price
|
|
$
|
107,990
|
|
|
$
|
118,369
|
|
|
$
|
306,961
|
|
(1)
|
Includes building, site improvements and furniture, fixtures and equipment.
|
(2)
|
Represent estimated lease-in-place intangible asset.
|
Estimated fair value of assets acquired:
|
|
|
|
|
||
Land
|
|
|
|
$
|
123,793
|
|
Rental residential properties
|
|
|
|
499,307
|
|
|
Real estate owned
|
|
|
|
19,437
|
|
|
Prepaid expenses and other assets (1)
|
|
|
|
9,809
|
|
|
Total allocation of purchase price
|
|
|
|
$
|
652,346
|
|
|
|
|
|
|
||
Source of funds:
|
|
|
|
|
||
Cash on hand
|
|
|
|
$
|
163,087
|
|
Debt financing (Note 7)
|
|
|
|
489,259
|
|
|
Total purchase price
|
|
|
|
$
|
652,346
|
|
(1)
|
Represent estimated lease-in-place intangible asset.
|
|
|
Year ended December 31, 2016
|
||
Unaudited pro forma revenues
|
|
$
|
97,735
|
|
Unaudited pro forma net loss
|
|
(230,449
|
)
|
|
Loss per share of common stock - basic:
|
|
|
||
Loss per basic share
|
|
$
|
(4.23
|
)
|
Weighted average common stock outstanding - basic
|
|
54,490,979
|
|
|
Loss per share of common stock - diluted:
|
|
|
||
Loss per diluted share
|
|
$
|
(4.23
|
)
|
Weighted average common stock outstanding - diluted
|
|
54,490,979
|
|
|
|
Year ended December 31, 2016
|
||
Revenues from consolidated statements of operations
|
|
$
|
56,758
|
|
Add: historical revenues of acquired properties not reflected in consolidated statements of operations
|
|
40,977
|
|
|
Unaudited pro forma revenues
|
|
$
|
97,735
|
|
|
|
|
||
Net loss from consolidated statements of operations
|
|
$
|
(228,028
|
)
|
Plus: historical net income of acquired properties not reflected in consolidated statements of operations
|
|
25,578
|
|
|
Less: pro forma real estate depreciation and amortization
|
|
(11,363
|
)
|
|
Less: pro forma interest expense
|
|
(14,016
|
)
|
|
Less: pro forma management fees
|
|
(2,620
|
)
|
|
Unaudited pro forma net loss
|
|
$
|
(230,449
|
)
|
|
Year ended December 31, 2018
|
|
Year ended December 31, 2017
|
|
Year ended December 31, 2016
|
||||||
Acquisition costs
|
$
|
7,209
|
|
|
$
|
778
|
|
|
$
|
9,339
|
|
Integration costs
|
3,148
|
|
|
—
|
|
|
—
|
|
|||
ASPS transition fee (1)
|
18,000
|
|
|
—
|
|
|
—
|
|
|||
Main Street Renewal, LLC transition fee (1)
|
5,250
|
|
|
—
|
|
|
—
|
|
|||
Total acquisition and integration costs
|
$
|
33,607
|
|
|
$
|
778
|
|
|
$
|
9,339
|
|
(1)
|
Refer to
Note 8
for further information on these fees.
|
|
Year ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
Change in unrealized gain on mortgage loans due to:
|
|
|
|
||||
Conversion of mortgage loans to REO, net
|
$
|
2,344
|
|
|
$
|
15,067
|
|
Change in fair value, net
|
313
|
|
|
1,514
|
|
||
Reclassification to realized gain or loss
|
(35,041
|
)
|
|
(207,437
|
)
|
||
Total change in unrealized gain on mortgage loans
|
(32,384
|
)
|
|
(190,856
|
)
|
||
Net realized (loss) gain on mortgage loans
|
(938
|
)
|
|
84,024
|
|
||
Net realized gain on sales of real estate
|
33,177
|
|
|
76,913
|
|
||
Net loss on real estate and mortgage loans
|
$
|
(145
|
)
|
|
$
|
(29,919
|
)
|
December 31, 2018
|
Held for Use
|
|
Held for Sale
|
|
Total Portfolio
|
|||
Rental Properties:
|
|
|
|
|
|
|||
Leased
|
13,546
|
|
|
423
|
|
|
13,969
|
|
Listed and ready for rent
|
434
|
|
|
8
|
|
|
442
|
|
Unit turn
|
428
|
|
|
18
|
|
|
446
|
|
Renovation
|
136
|
|
|
2
|
|
|
138
|
|
Total rental properties
|
14,544
|
|
|
|
|
|
|
|
Previous rentals identified for sale
|
158
|
|
|
188
|
|
|
346
|
|
Legacy REO
|
56
|
|
|
48
|
|
|
104
|
|
|
14,758
|
|
|
687
|
|
|
15,445
|
|
December 31, 2017
|
|
|
|
|
|
|||
Rental Properties:
|
|
|
|
|
|
|||
Leased
|
10,850
|
|
|
—
|
|
|
10,850
|
|
Listed and ready for rent
|
591
|
|
|
—
|
|
|
591
|
|
Unit turn
|
340
|
|
|
—
|
|
|
340
|
|
Renovation
|
194
|
|
|
—
|
|
|
194
|
|
Total rental properties
|
11,975
|
|
|
|
|
|
||
Previous rentals identified for sale
|
69
|
|
|
40
|
|
|
109
|
|
Legacy REO
|
197
|
|
|
293
|
|
|
490
|
|
|
12,241
|
|
|
333
|
|
|
12,574
|
|
2019
|
|
$
|
106,134
|
|
2020
|
|
6,547
|
|
|
2021
|
|
780
|
|
|
2022
|
|
—
|
|
|
2023 and thereafter
|
|
—
|
|
|
|
|
$
|
113,461
|
|
|
|
Number of Loans
|
|
Fair Value and Carrying Value
|
|
Unpaid Principal Balance
|
|
Market Value of Underlying Properties (1)
|
|||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|||||||
Current
|
|
20
|
|
|
$
|
1,827
|
|
|
$
|
2,701
|
|
|
$
|
4,353
|
|
60
|
|
1
|
|
|
115
|
|
|
148
|
|
|
180
|
|
|||
90
|
|
17
|
|
|
649
|
|
|
6,019
|
|
|
5,418
|
|
|||
Foreclosure
|
|
36
|
|
|
5,481
|
|
|
12,376
|
|
|
16,097
|
|
|||
Mortgage loans at fair value
|
|
74
|
|
|
$
|
8,072
|
|
|
$
|
21,244
|
|
|
$
|
26,048
|
|
|
|
|
|
|
|
|
|
|
|||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|||||||
Current
|
|
17
|
|
|
$
|
1,528
|
|
|
$
|
2,380
|
|
|
$
|
3,156
|
|
30
|
|
1
|
|
|
51
|
|
|
139
|
|
|
70
|
|
|||
60
|
|
3
|
|
|
304
|
|
|
344
|
|
|
630
|
|
|||
90
|
|
23
|
|
|
720
|
|
|
7,674
|
|
|
6,498
|
|
|||
Foreclosure
|
|
67
|
|
|
8,874
|
|
|
18,813
|
|
|
20,820
|
|
|||
Mortgage loans at fair value
|
|
111
|
|
|
$
|
11,477
|
|
|
$
|
29,350
|
|
|
$
|
31,174
|
|
(1)
|
The market value of the underlying properties are estimated based on BPOs.
|
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
|
Carrying Value
|
|
Quoted Prices in Active Markets
|
|
Observable Inputs Other Than Level 1 Prices
|
|
Unobservable Inputs
|
||||||||
December 31, 2018
|
|
|
|
|
|
|
|
||||||||
Recurring basis (assets)
|
|
|
|
|
|
|
|
||||||||
Mortgage loans at fair value
|
$
|
8,072
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,072
|
|
Interest rate cap derivatives (1)
|
14,367
|
|
|
—
|
|
|
14,367
|
|
|
—
|
|
||||
Not recognized on consolidated balance sheets at fair value (liabilities)
|
|
|
|
|
|
|
|
||||||||
Repurchase and loan agreements
|
1,722,219
|
|
|
—
|
|
|
1,734,152
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
December 31, 2017
|
|
|
|
|
|
|
|
||||||||
Recurring basis (assets)
|
|
|
|
|
|
|
|
||||||||
Mortgage loans at fair value
|
$
|
11,477
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,477
|
|
Not recognized on consolidated balance sheets at fair value (liabilities)
|
|
|
|
|
|
|
|
||||||||
Repurchase and loan agreements
|
1,270,157
|
|
|
—
|
|
|
1,276,315
|
|
|
—
|
|
(1)
|
Included within prepaid expenses and other assets in the consolidated balance sheets.
|
|
Year ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
Mortgage loans, beginning of the year
|
$
|
11,477
|
|
|
$
|
568,480
|
|
Net gain on mortgage loans
|
3,157
|
|
|
7,684
|
|
||
Mortgage loan dispositions, resolutions and payments
|
(1,774
|
)
|
|
(526,670
|
)
|
||
Real estate tax advances to borrowers
|
230
|
|
|
3,763
|
|
||
Selling costs on loans held for sale
|
(83
|
)
|
|
(1,344
|
)
|
||
Transfer of mortgage loans at fair value to real estate owned, net
|
(4,935
|
)
|
|
(40,436
|
)
|
||
Mortgage loans, end of the year
|
$
|
8,072
|
|
|
$
|
11,477
|
|
|
|
|
|
||||
Change in unrealized gain on mortgage loans held at the end of the period
|
$
|
(358
|
)
|
|
$
|
(5,911
|
)
|
Input
|
|
December 31, 2018
|
|
December 31, 2017
|
Equity discount rate
|
|
17.0%
|
|
17.0%
|
Debt to asset ratio
|
|
65.0%
|
|
65.0%
|
Cost of funds
|
|
3.5% over 1 month LIBOR
|
|
3.5% over 1 month LIBOR
|
Annual change in home pricing index
|
|
-0.55% to 16.79%
|
|
-1.71% to 9.07%
|
Loan resolution probabilities — modification
|
|
0% to 5.9%
|
|
0% to 5.9%
|
Loan resolution probabilities — liquidation
|
|
38.8% to 100%
|
|
49.5% to 100%
|
Loan resolution probabilities — paid in full
|
|
0% to 61.2%
|
|
0% to 47.4%
|
Loan resolution timelines (in years)
|
|
0.1 to 6.1
|
|
0.1 to 5.3
|
Value of underlying properties
|
|
$50,000 to $2,500,000
|
|
$45,000 to $2,250,000
|
|
Maturity Date
|
|
|
Interest Rate
|
|
|
Amount Outstanding
|
|
Maximum Borrowing Capacity
|
|
Amount of Available Funding
|
|
Book Value of Collateral
|
||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
CS Repurchase Agreement
|
11/15/2019
|
|
|
1-month LIBOR + 3.00%
|
|
|
$
|
193,654
|
|
|
$
|
250,000
|
|
|
$
|
56,346
|
|
|
$
|
224,934
|
|
Nomura Loan Agreement
|
4/5/2020
|
(1)
|
|
1-month LIBOR + 3.00%
|
|
|
30,497
|
|
|
250,000
|
|
|
219,503
|
|
|
48,388
|
|
||||
HOME II Loan Agreement
|
11/9/2019
|
(2)
|
|
1-month LIBOR + 2.10%
|
(3)
|
|
83,270
|
|
|
83,270
|
|
|
—
|
|
|
100,461
|
|
||||
HOME III Loan Agreement
|
11/9/2019
|
(2)
|
|
1-month LIBOR + 2.10%
|
(3)
|
|
89,150
|
|
|
89,150
|
|
|
—
|
|
|
111,542
|
|
||||
HOME IV Loan Agreement (A)
|
12/9/2022
|
|
|
4.00%
|
|
|
114,201
|
|
|
114,201
|
|
|
—
|
|
|
145,461
|
|
||||
HOME IV Loan Agreement (B)
|
12/9/2022
|
|
|
4.00%
|
|
|
114,590
|
|
|
114,590
|
|
|
—
|
|
|
146,479
|
|
||||
Term Loan Agreement
|
4/6/2022
|
|
|
5.00%
|
|
|
100,000
|
|
|
100,000
|
|
|
—
|
|
|
114,401
|
|
||||
FYR SFR Loan Agreement
|
9/1/2028
|
|
|
4.65%
|
|
|
508,700
|
|
|
508,700
|
|
|
—
|
|
|
585,563
|
|
||||
MS Loan Agreement
|
12/7/2023
|
|
|
1-month LIBOR + 1.80%
|
(4)
|
|
504,986
|
|
|
504,986
|
|
|
—
|
|
|
609,619
|
|
||||
|
|
|
|
|
|
|
1,739,048
|
|
|
$
|
2,014,897
|
|
|
$
|
275,849
|
|
|
$
|
2,086,848
|
|
|
Less: unamortized loan discounts
|
|
|
|
|
|
|
(4,896
|
)
|
|
|
|
|
|
|
|||||||
Less: deferred debt issuance costs
|
|
|
|
|
|
|
(11,933
|
)
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
$
|
1,722,219
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
CS Repurchase Agreement
|
11/16/2018
|
|
|
CS cost of funds + 2.75%
|
|
|
$
|
189,173
|
|
|
$
|
350,000
|
|
|
$
|
160,827
|
|
|
$
|
281,722
|
|
Nomura Loan Agreement
|
4/5/2018
|
|
|
1-month LIBOR + 3.25%
|
|
|
102,785
|
|
|
250,000
|
|
|
147,215
|
|
|
169,521
|
|
||||
MSR Loan Agreement
|
11/9/2018
|
|
|
1-month LIBOR + 3.285%
|
|
|
489,259
|
|
|
489,259
|
|
|
—
|
|
|
622,065
|
|
||||
HOME II Loan Agreement
|
11/9/2019
|
|
|
1-month LIBOR + 2.10%
|
|
|
83,270
|
|
|
83,270
|
|
|
—
|
|
|
103,324
|
|
||||
HOME III Loan Agreement
|
11/9/2019
|
|
|
1-month LIBOR + 2.10%
|
|
|
89,150
|
|
|
89,150
|
|
|
—
|
|
|
114,698
|
|
||||
HOME IV Loan Agreement (A)
|
12/9/2022
|
|
|
4.00%
|
|
|
114,201
|
|
|
114,201
|
|
|
—
|
|
|
149,698
|
|
||||
HOME IV Loan Agreement (B)
|
12/9/2022
|
|
|
4.00%
|
|
|
114,590
|
|
|
114,590
|
|
|
—
|
|
|
150,718
|
|
||||
Term Loan Agreement
|
4/6/2022
|
|
|
5.00%
|
|
|
100,000
|
|
|
100,000
|
|
|
—
|
|
|
116,250
|
|
||||
|
|
|
|
|
|
|
1,282,428
|
|
|
$
|
1,590,470
|
|
|
$
|
308,042
|
|
|
$
|
1,707,996
|
|
|
Less: unamortized loan discounts
|
|
|
|
|
|
|
(6,158
|
)
|
|
|
|
|
|
|
|||||||
Less: deferred debt issuance costs
|
|
|
|
|
|
|
(6,113
|
)
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
$
|
1,270,157
|
|
|
|
|
|
|
|
(1)
|
Represents initial maturity date. Does not include a potential
one
-year extension to April 5, 2021.
|
(2)
|
Represents initial maturity date. We have the option to extend the maturity date for up to
three
successive
one
-year extensions.
|
(3)
|
The interest rate is capped at
4.40%
under an interest rate cap derivative. See
Note 11
.
|
(4)
|
The interest rate is capped at
4.30%
under an interest rate cap derivative. See
Note 11
.
|
•
|
In connection with the seller financing related to the HOME SFR Transaction, we entered into a loan agreement (the “MSR Loan Agreement”) between HOME Borrower, the sellers and MSR Lender, LLC, as agent. On December 7, 2018, the MSR Loan Agreement was repaid in full by a portion of the proceeds of the MS Loan Agreement described below. In connection with the repayment of the MSR Loan Agreement, we recognized a loss on extinguishment of
$1.7 million
, which includes the write-off of
$1.1 million
of unamortized deferred financing costs and
$0.6 million
of excess interest payments.
|
•
|
In connection with the seller financing related to the first closing under the HOME Flow Transaction on March 30, 2017, HOME Borrower II entered into the HOME II Loan Agreement with entities sponsored by Amherst. On November 13, 2017, HOME Borrower II entered into an amended and restated loan agreement, which was acquired by Metropolitan Life Insurance Company (“MetLife”). HOME Borrower II has the option to extend the HOME II Loan Agreement beyond the initial maturity date for
three
successive
one
-year extensions, provided, among other things, that there is no event of default under the HOME II Loan Agreement on each maturity date. The HOME II Loan Agreement is cross-defaulted and cross-collateralized with the HOME III Loan Agreement.
|
•
|
In connection with the seller financing related to the second closing under the HOME Flow Transaction on June 29, 2017, HOME Borrower III entered into the HOME III Loan Agreement with entities sponsored by Amherst. On November 13, 2017, HOME Borrower III entered into an amended and restated loan agreement, which was acquired by MetLife. HOME Borrower III has the option to extend the HOME III Loan Agreement beyond the initial maturity date for
three
successive
one
-year extensions, provided, among other things, that there is no event of default under the HOME III Loan Agreement on each maturity date. The HOME III Loan Agreement is cross-defaulted and cross-collateralized with the HOME II Loan Agreement.
|
•
|
In connection with the seller financing related to the third and final closing under the HOME Flow Transaction on November 29, 2017, HOME Borrower IV entered into the two separate loan agreements with entities sponsored by Amherst (collectively, the “HOME IV Loan Agreements”). The HOME IV Loan Agreements were acquired by MetLife on November 29, 2017.
|
•
|
reporting requirements to the agent or lender,
|
•
|
minimum adjusted tangible net worth requirements,
|
•
|
minimum net asset requirements,
|
•
|
limitations on the indebtedness,
|
•
|
minimum levels of liquidity, including specified levels of unrestricted cash,
|
•
|
limitations on sales and dispositions of properties collateralizing certain of the loan agreements,
|
•
|
various restrictions on the use of cash generated by the operations of properties, and
|
•
|
a minimum fixed charge coverage ratio.
|
2019
|
|
$
|
193,654
|
|
2020
|
|
—
|
|
|
2021
|
|
30,497
|
|
|
2022
|
|
501,211
|
|
|
2023 and thereafter
|
|
1,013,686
|
|
|
|
|
$
|
1,739,048
|
|
2019
|
|
$
|
1,310
|
|
2020
|
|
977
|
|
|
2021
|
|
362
|
|
|
2022
|
|
—
|
|
|
2023 and thereafter
|
|
—
|
|
|
|
|
$
|
2,649
|
|
•
|
Base Management Fee
. AAMC is entitled to a quarterly base management fee equal to
1.5%
of the product of (i) our average invested capital (as defined in the AMA) for the quarter
multiplied by
(ii)
0.25
, while we have fewer than
2,500
SFR properties actually rented (“Rental Properties”). The base management fee percentage increases to
1.75%
of invested capital while we have between
2,500
and
4,499
Rental Properties and increases to
2.0%
of invested capital while we have
4,500
or more Rental Properties;
|
•
|
Incentive Management Fee
. AAMC is entitled to a quarterly incentive management fee equal to
20%
of the amount by which our return on invested capital (based on AFFO defined as our net income attributable to holders of common stock calculated in accordance with GAAP
plus
real estate depreciation expense
minus
recurring capital expenditures on all of our real estate assets owned) exceeds an annual hurdle return rate of between
7.0%
and
8.25%
(or
1.75%
and
2.06%
per quarter), depending on the
10
-year treasury rate. To the extent we have an aggregate shortfall in its return rate over the previous seven quarters, that aggregate return rate shortfall gets added to the normal quarterly return hurdle for the next quarter before AAMC is entitled to an incentive management fee. The incentive management fee increases to
22.5%
while we have between
2,500
and
4,499
Rental Properties and increases to
25%
while we have
4,500
or more Rental Properties; and
|
•
|
Conversion Fee
. AAMC is entitled to a quarterly conversion fee equal to
1.5%
of the market value of the SFR homes leased by us for the first time during the applicable quarter.
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Base management fees (1)
|
|
$
|
14,567
|
|
|
$
|
16,010
|
|
|
$
|
17,334
|
|
Conversion fees (1)
|
|
176
|
|
|
1,291
|
|
|
1,841
|
|
|||
Expense reimbursements (2)
|
|
1,183
|
|
|
859
|
|
|
816
|
|
(1)
|
Included in management fees to AAMC in the consolidated statements of operations.
|
(2)
|
Included in general and administrative expenses in the consolidated statements of operations.
|
|
Number of Options
|
|
Weighted Average Exercise Price per Share
|
|||
December 31, 2015
|
204,968
|
|
|
$
|
2.30
|
|
Granted
|
695,187
|
|
|
10.04
|
|
|
Exercised
|
(34,464
|
)
|
|
1.71
|
|
|
Forfeited or canceled
|
(2,714
|
)
|
|
5.47
|
|
|
December 31, 2016
|
862,977
|
|
|
8.55
|
|
|
Granted
|
567,227
|
|
|
14.30
|
|
|
Exercised
|
(49,126
|
)
|
|
2.16
|
|
|
December 31, 2017
|
1,381,078
|
|
|
11.14
|
|
|
Exercised
|
(40,722
|
)
|
|
2.62
|
|
|
Forfeited or canceled
|
(62,364
|
)
|
|
5.05
|
|
|
December 31, 2018
|
1,277,992
|
|
|
$
|
11.71
|
|
|
Year ended December 31,
|
||
|
2017
|
|
2016
|
Risk free interest rate (1)
|
2.05%
|
|
1.38%
|
Common stock dividend yield
|
4.20%
|
|
5.98%
|
Expected volatility (2)
|
36.67%
|
|
38.47%
|
(1)
|
Represents the interest rate as of the grant date on US treasury bonds having the same life as the estimated life of the stock option grants.
|
(2)
|
Based on our historical stock price volatility.
|
|
|
Number of Shares
|
|
Weighted Average Grant Date Fair Value
|
|||
December 31, 2015
|
|
9,924
|
|
|
$
|
18.14
|
|
Granted
|
|
274,760
|
|
|
9.94
|
|
|
Vested (1)
|
|
(10,531
|
)
|
|
17.20
|
|
|
Forfeited
|
|
(7,255
|
)
|
|
9.84
|
|
|
December 31, 2016
|
|
266,898
|
|
|
9.97
|
|
|
Granted
|
|
271,633
|
|
|
14.30
|
|
|
Vested (1)
|
|
(101,487
|
)
|
|
9.96
|
|
|
Canceled
|
|
(17,802
|
)
|
|
11.80
|
|
|
December 31, 2017
|
|
419,242
|
|
|
12.70
|
|
|
Granted
|
|
555,454
|
|
|
9.78
|
|
|
Vested (1)
|
|
(171,497
|
)
|
|
12.41
|
|
|
Forfeited
|
|
(36,708
|
)
|
|
12.76
|
|
|
December 31, 2018
|
|
766,491
|
|
|
$
|
10.65
|
|
|
Year ended December 31, 2018
|
Risk free interest rate (1)
|
2.72%
|
Common stock dividend yield (2)
|
0.00%
|
Expected volatility (3)
|
32.88%
|
(1)
|
Represents the interest rate as of the grant date on US treasury bonds having the same life as the estimated life of the grants.
|
(2)
|
Because the vesting of market-based restricted stock awards include accumulated dividends and the awards accrue dividend equivalent payments, no dividend yield assumption was included in the grant date fair value calculation.
|
(3)
|
Based on our historical stock price volatility.
|
|
|
December 31, 2018
|
|
Stock options outstanding
|
|
1,277,992
|
|
Possible future issuances under share-based compensation plans
|
|
799,778
|
|
|
|
2,077,770
|
|
Effective Date
|
|
Termination Date
|
|
Strike Rate
|
|
Benchmark Rate
|
|
Notional Amount
|
||
November 2, 2018
|
|
May 9, 2024
|
|
2.50%
|
|
One-month LIBOR
|
|
$
|
505,000
|
|
October 16, 2018
|
|
October 15, 2022
|
|
2.30%
|
|
One-month LIBOR
|
|
83,270
|
|
|
October 16, 2018
|
|
October 15, 2022
|
|
2.30%
|
|
One-month LIBOR
|
|
89,149
|
|
|
|
Asset Derivatives
|
||||||||
|
|
|
|
Fair Value as of December 31,
|
||||||
|
|
Balance Sheet Location
|
|
2018
|
|
2017
|
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
||||
Interest rate caps
|
|
Other assets
|
|
$
|
14,367
|
|
|
$
|
—
|
|
Total
|
|
|
|
$
|
14,367
|
|
|
$
|
—
|
|
|
|
Amount of Gain (Loss) Recognized in OCI on Derivative (effective portion)
|
|
Location of Gain (Loss) Reclassified from Accumulated OCI into Net Loss
|
|
Amount of Gain (Loss) Reclassified from Accumulated OCI into Net Loss (effective portion)
|
|
Total Amount of Interest Expense Presented in the Consolidated Statements of Operations
|
||||||||||||||||||||||||||||||
|
|
Year Ended December 31,
|
|
|
Year Ended December 31,
|
|
Year Ended December 31,
|
|||||||||||||||||||||||||||||||
|
|
2018
|
|
2017
|
|
2016
|
|
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||||||
Derivatives in cash flow hedging relationships
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Interest rate caps
|
|
$
|
(12,653
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Interest expense
|
|
$
|
(375
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
77,035
|
|
|
$
|
59,582
|
|
|
$
|
53,868
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Numerator
|
|
|
|
|
|
|
||||||
Net loss
|
|
$
|
(130,835
|
)
|
|
$
|
(185,454
|
)
|
|
$
|
(228,028
|
)
|
|
|
|
|
|
|
|
||||||
Denominator
|
|
|
|
|
|
|
||||||
Weighted average common stock outstanding – basic
|
|
53,552,109
|
|
|
53,493,523
|
|
|
54,490,979
|
|
|||
Weighted average common stock outstanding – diluted
|
|
53,552,109
|
|
|
53,493,523
|
|
|
54,490,979
|
|
|||
|
|
|
|
|
|
|
||||||
Loss per basic share
|
|
$
|
(2.44
|
)
|
|
$
|
(3.47
|
)
|
|
$
|
(4.18
|
)
|
Loss per diluted share
|
|
$
|
(2.44
|
)
|
|
$
|
(3.47
|
)
|
|
$
|
(4.18
|
)
|
|
|
Year Ended December 31,
|
|||||||
|
|
2018
|
|
2017
|
|
2016
|
|||
Denominator (in weighted-average shares)
|
|
|
|
|
|
|
|||
Stock options
|
|
71,430
|
|
|
157,214
|
|
|
151,756
|
|
Restricted stock
|
|
219,738
|
|
|
164,689
|
|
|
24,146
|
|
|
|
2018
|
||||||||||||||||||
|
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
|
Full Year
|
||||||||||
Total revenues
|
|
$
|
39,765
|
|
|
$
|
40,906
|
|
|
$
|
48,313
|
|
|
$
|
54,029
|
|
|
$
|
183,013
|
|
Net loss
|
|
(27,350
|
)
|
|
(21,336
|
)
|
|
(47,933
|
)
|
|
(34,216
|
)
|
|
(130,835
|
)
|
|||||
Loss per basic share of common stock
|
|
(0.51
|
)
|
|
(0.40
|
)
|
|
(0.89
|
)
|
|
(0.64
|
)
|
|
(2.44
|
)
|
|||||
Loss per diluted share of common stock
|
|
(0.51
|
)
|
|
(0.40
|
)
|
|
(0.89
|
)
|
|
(0.64
|
)
|
|
(2.44
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
2017
|
||||||||||||||||||
|
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
|
Full Year
|
||||||||||
Total revenues
|
|
$
|
29,338
|
|
|
$
|
13,410
|
|
|
$
|
23,665
|
|
|
$
|
27,758
|
|
|
$
|
94,171
|
|
Net loss
|
|
(49,357
|
)
|
|
(55,707
|
)
|
|
(42,916
|
)
|
|
(37,474
|
)
|
|
(185,454
|
)
|
|||||
Loss per basic share of common stock
|
|
(0.92
|
)
|
|
(1.04
|
)
|
|
(0.80
|
)
|
|
(0.70
|
)
|
|
(3.47
|
)
|
|||||
Loss per diluted share of common stock
|
|
(0.92
|
)
|
|
(1.04
|
)
|
|
(0.80
|
)
|
|
(0.70
|
)
|
|
(3.47
|
)
|
State
|
No. of Props
|
Type
|
Encum-
brances
|
Initial Cost to Company
|
Capitalized Costs Subsequent to Acquisition
|
Gross Amount at which Carried at Close of Period (2)
|
Accum Depr and Reserves (2)
|
WA Age (1)
|
Date Acquired
|
Life on which Depr is Calc
|
|||||||||||
Alabama
|
728
|
|
SFR
|
$
|
68,668
|
|
$
|
84,830
|
|
$
|
1,444
|
|
$
|
86,274
|
|
$
|
3,241
|
|
34.7
|
2013 - 2018
|
3-27.5 years
|
Arizona
|
52
|
|
SFR
|
6,965
|
|
9,613
|
|
1,656
|
|
11,269
|
|
875
|
|
40.6
|
2013 - 2017
|
3-27.5 years
|
|||||
Arkansas
|
6
|
|
SFR
|
493
|
|
487
|
|
443
|
|
930
|
|
336
|
|
35.1
|
2013 - 2014
|
3-27.5 years
|
|||||
California
|
119
|
|
SFR
|
18,667
|
|
21,473
|
|
12,527
|
|
34,000
|
|
5,114
|
|
41.2
|
2013 - 2014
|
3-27.5 years
|
|||||
Colorado
|
16
|
|
SFR
|
2,512
|
|
2,137
|
|
1,419
|
|
3,556
|
|
484
|
|
30.5
|
2013 - 2014
|
3-27.5 years
|
|||||
Connecticut
|
9
|
|
SFR
|
2,008
|
|
3,008
|
|
651
|
|
3,659
|
|
1,347
|
|
53.9
|
2013 - 2014
|
3-27.5 years
|
|||||
Delaware
|
1
|
|
SFR
|
—
|
|
138
|
|
59
|
|
197
|
|
50
|
|
20.0
|
2014
|
3-27.5 years
|
|||||
Dist. of Columbia
|
1
|
|
SFR
|
61
|
|
126
|
|
104
|
|
230
|
|
62
|
|
83.0
|
2013
|
3-27.5 years
|
|||||
Florida
|
2,553
|
|
SFR
|
355,354
|
|
389,243
|
|
44,860
|
|
434,103
|
|
22,625
|
|
42.1
|
2013 - 2018
|
3-27.5 years
|
|||||
Georgia
|
4,394
|
|
SFR
|
408,527
|
|
472,312
|
|
52,377
|
|
524,689
|
|
38,142
|
|
34.6
|
2013 - 2018
|
3-27.5 years
|
|||||
Hawaii
|
1
|
|
SFR
|
131
|
|
88
|
|
122
|
|
210
|
|
—
|
|
14.0
|
2013
|
3-27.5 years
|
|||||
Illinois
|
163
|
|
SFR
|
17,529
|
|
16,824
|
|
10,303
|
|
27,127
|
|
4,180
|
|
47.9
|
2013 - 2016
|
3-27.5 years
|
|||||
Indiana
|
674
|
|
SFR
|
68,164
|
|
85,161
|
|
8,475
|
|
93,636
|
|
7,912
|
|
22.8
|
2013 - 2017
|
3-27.5 years
|
|||||
Kansas
|
21
|
|
SFR
|
2,528
|
|
2,951
|
|
563
|
|
3,514
|
|
320
|
|
41.6
|
2013 - 2017
|
3-27.5 years
|
|||||
Kentucky
|
135
|
|
SFR
|
15,481
|
|
19,131
|
|
829
|
|
19,960
|
|
1,105
|
|
27.8
|
2013 - 2017
|
3-27.5 years
|
|||||
Louisiana
|
6
|
|
SFR
|
350
|
|
740
|
|
288
|
|
1,028
|
|
152
|
|
23.6
|
2013 - 2014
|
3-27.5 years
|
|||||
Maryland
|
129
|
|
SFR
|
15,748
|
|
13,264
|
|
11,700
|
|
24,964
|
|
2,645
|
|
37.5
|
2013 - 2014
|
3-27.5 years
|
|||||
Massachusetts
|
21
|
|
SFR
|
851
|
|
2,965
|
|
2,389
|
|
5,354
|
|
516
|
|
99.5
|
2013 - 2014
|
3-27.5 years
|
|||||
Michigan
|
20
|
|
SFR
|
2,059
|
|
1,759
|
|
1,312
|
|
3,071
|
|
537
|
|
40.6
|
2013 - 2014
|
3-27.5 years
|
|||||
Minnesota
|
490
|
|
SFR
|
63,347
|
|
75,407
|
|
1,254
|
|
76,661
|
|
2,109
|
|
84.9
|
2013 - 2018
|
3-27.5 years
|
|||||
Mississippi
|
271
|
|
SFR
|
30,460
|
|
40,869
|
|
304
|
|
41,173
|
|
2,154
|
|
18.7
|
2013 - 2017
|
3-27.5 years
|
|||||
Missouri
|
424
|
|
SFR
|
47,828
|
|
63,643
|
|
1,588
|
|
65,231
|
|
3,322
|
|
35.1
|
2013 - 2018
|
3-27.5 years
|
|||||
Nevada
|
11
|
|
SFR
|
853
|
|
837
|
|
873
|
|
1,710
|
|
151
|
|
30.0
|
2013 - 2014
|
3-27.5 years
|
|||||
New Jersey
|
22
|
|
SFR
|
1,904
|
|
2,482
|
|
2,058
|
|
4,540
|
|
471
|
|
70.2
|
2013 - 2014
|
3-27.5 years
|
|||||
New Mexico
|
17
|
|
SFR
|
1,219
|
|
1,117
|
|
1,009
|
|
2,126
|
|
284
|
|
28.6
|
2013 - 2014
|
3-27.5 years
|
|||||
New York
|
12
|
|
SFR
|
1,660
|
|
1,858
|
|
1,704
|
|
3,562
|
|
558
|
|
90.7
|
2013 - 2014
|
3-27.5 years
|
|||||
North Carolina
|
879
|
|
SFR
|
95,552
|
|
118,104
|
|
9,509
|
|
127,613
|
|
8,771
|
|
23.3
|
2013 - 2017
|
3-27.5 years
|
|||||
Ohio
|
266
|
|
SFR
|
30,594
|
|
40,290
|
|
2,372
|
|
42,662
|
|
2,123
|
|
38.1
|
2013 - 2017
|
3-27.5 years
|
|||||
Oklahoma
|
307
|
|
SFR
|
33,823
|
|
46,925
|
|
1,024
|
|
47,949
|
|
3,487
|
|
27.0
|
2013 - 2017
|
3-27.5 years
|
|||||
Oregon
|
2
|
|
SFR
|
180
|
|
149
|
|
188
|
|
337
|
|
24
|
|
34.9
|
2013
|
3-27.5 years
|
|||||
Pennsylvania
|
45
|
|
SFR
|
4,781
|
|
4,475
|
|
3,685
|
|
8,160
|
|
1,574
|
|
64.9
|
2013 - 2014
|
3-27.5 years
|
|||||
Rhode Island
|
16
|
|
SFR
|
1,136
|
|
1,413
|
|
1,249
|
|
2,662
|
|
269
|
|
57.5
|
2013 - 2014
|
3-27.5 years
|
|||||
South Carolina
|
62
|
|
SFR
|
5,556
|
|
5,208
|
|
3,118
|
|
8,326
|
|
1,157
|
|
21.6
|
2013 - 2016
|
3-27.5 years
|
|||||
Tennessee
|
1,480
|
|
SFR
|
177,680
|
|
217,110
|
|
6,860
|
|
223,970
|
|
13,388
|
|
22.5
|
2013 - 2017
|
3-27.5 years
|
|||||
Texas
|
2,016
|
|
SFR
|
237,704
|
|
297,327
|
|
20,472
|
|
317,799
|
|
23,819
|
|
27.8
|
2013 - 2017
|
3-27.5 years
|
|||||
Utah
|
16
|
|
SFR
|
956
|
|
1,541
|
|
1,177
|
|
2,718
|
|
336
|
|
50.8
|
2013 - 2014
|
3-27.5 years
|
|||||
Vermont
|
1
|
|
SFR
|
130
|
|
149
|
|
160
|
|
309
|
|
98
|
|
38.0
|
2014
|
3-27.5 years
|
|||||
Virginia
|
33
|
|
SFR
|
6,591
|
|
6,911
|
|
2,706
|
|
9,617
|
|
1,858
|
|
32.6
|
2013 - 2014
|
3-27.5 years
|
Washington
|
16
|
|
SFR
|
2,315
|
|
1,968
|
|
1,266
|
|
3,234
|
|
469
|
|
41.4
|
2013 - 2014
|
3-27.5 years
|
|||||
Wisconsin
|
10
|
|
SFR
|
806
|
|
537
|
|
621
|
|
1,158
|
|
216
|
|
57.2
|
2013 - 2014
|
3-27.5 years
|
|||||
Total (2)
|
15,445
|
|
|
$
|
1,731,171
|
|
$
|
2,054,570
|
|
$
|
214,718
|
|
$
|
2,269,288
|
|
$
|
156,281
|
|
35.0
|
|
|
(1)
|
Weighted average age is based on the age of the property weighted by gross amount at which carried at close of period.
|
(2)
|
The following table sets forth the activity of real estate assets and accumulated depreciation ($ in thousands):
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Real estate assets:
|
|
|
|
|
|
|
||||||
Beginning balance
|
|
$
|
1,873,860
|
|
|
$
|
1,604,648
|
|
|
$
|
1,048,142
|
|
Acquisitions through foreclosure
|
|
4,935
|
|
|
40,436
|
|
|
206,987
|
|
|||
Other acquisitions
|
|
469,087
|
|
|
525,983
|
|
|
778,173
|
|
|||
Improvements
|
|
33,316
|
|
|
40,312
|
|
|
50,182
|
|
|||
Cost of real estate sold
|
|
(111,910
|
)
|
|
(337,519
|
)
|
|
(478,836
|
)
|
|||
Ending balance (1)
|
|
$
|
2,269,288
|
|
|
$
|
1,873,860
|
|
|
$
|
1,604,648
|
|
|
|
|
|
|
|
|
||||||
Accumulated depreciation and reserves for impairment:
|
|
|
|
|
|
|
||||||
Beginning balance
|
|
$
|
104,589
|
|
|
$
|
62,601
|
|
|
$
|
61,716
|
|
Depreciation expense
|
|
67,175
|
|
|
48,989
|
|
|
20,840
|
|
|||
Impairment
|
|
12,651
|
|
|
38,764
|
|
|
56,384
|
|
|||
Casualty losses, net
|
|
552
|
|
|
3,564
|
|
|
—
|
|
|||
Real estate sold
|
|
(28,686
|
)
|
|
(49,329
|
)
|
|
(76,339
|
)
|
|||
Ending balance
|
|
$
|
156,281
|
|
|
$
|
104,589
|
|
|
$
|
62,601
|
|
Description (Face Value of Loan)
|
|
Loan Count
|
|
Interest Rate
|
|
Maturity
|
|
Carrying Amount of Mortgages
(1)
|
|
Principal Amount of Loans Subject to Delinquent Principal or Interest
|
|||||
$0-49,999
|
|
5
|
|
|
3.340% - 8.000%
|
|
01/01/2014 - 01/01/2053
|
|
$
|
197
|
|
|
$
|
31
|
|
$50,000-99,999
|
|
11
|
|
|
2.000% - 7.500%
|
|
05/01/2033 - 03/01/2054
|
|
363
|
|
|
392
|
|
||
$100,000-149,999
|
|
9
|
|
|
2.000% - 7.375%
|
|
01/01/2035 - 03/01/2057
|
|
442
|
|
|
795
|
|
||
$200,000-249,999
|
|
9
|
|
|
3.625% - 9.650%
|
|
02/01/2035 - 11/01/2047
|
|
311
|
|
|
1,791
|
|
||
$250,000+
|
|
40
|
|
|
2.000% - 7.625%
|
|
05/18/2022 - 04/01/2057
|
|
6,759
|
|
|
15,534
|
|
||
Total (2) (3)
|
|
74
|
|
|
|
|
|
|
$
|
8,072
|
|
|
$
|
18,543
|
|
(1)
|
The majority of the mortgage loans are significantly delinquent and have varying monthly payment requirements. For a complete description of the fair value measurements and the factors that may significantly affect the carrying value of our assets, please see
Note 6
to our consolidated financial statements.
|
(2)
|
The aggregate cost for federal income tax purposes is
$14.1 million
as of
December 31, 2018
.
|
(3)
|
The following table sets forth the activity of mortgage loans ($ in thousands):
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Mortgage loans at fair value at January 1, 2017
|
|
|
|
|
$
|
460,444
|
|
|
|
|||
Mortgage loans held for sale at January 1, 2017
|
|
|
|
|
108,036
|
|
|
|
||||
Beginning balance
|
|
$
|
11,477
|
|
|
568,480
|
|
|
$
|
960,534
|
|
|
Change in unrealized gain on mortgage loans
|
|
3,157
|
|
|
7,684
|
|
|
(409
|
)
|
|||
Cost of mortgage loans sold
|
|
(1,450
|
)
|
|
(521,170
|
)
|
|
(84,673
|
)
|
|||
Mortgage loan payments and escrow recoveries
|
|
(324
|
)
|
|
(5,500
|
)
|
|
(30,596
|
)
|
|||
Real estate tax advances to borrowers
|
|
230
|
|
|
3,763
|
|
|
18,013
|
|
|||
Transfer of mortgage loans to held for sale, net
|
|
—
|
|
|
—
|
|
|
(195,461
|
)
|
|||
Selling costs on loans held for sale
|
|
(83
|
)
|
|
(1,344
|
)
|
|
—
|
|
|||
Transfer of mortgage loans to real estate owned, net
|
|
(4,935
|
)
|
|
(40,436
|
)
|
|
(206,964
|
)
|
|||
Ending balance
|
|
$
|
8,072
|
|
|
$
|
11,477
|
|
|
$
|
460,444
|
|
1)
|
Registration Statement (Form S-8 No. 333-185945) of Altisource Residential Corporation
|
2)
|
Registration Statement (Form S-8 No. 333-189001) of Altisource Residential Corporation
|
3)
|
Registration Statement (Form S-8 No. 333-194113) of Altisource Residential Corporation
|
4)
|
Registration Statement (Form S-8 No. 333-212309) of Altisource Residential Corporation
|
Date:
|
February 27, 2019
|
By:
|
/s/
|
George G. Ellison
|
|
|
|
|
George G. Ellison
|
|
|
|
|
Chief Executive Officer
|
Date:
|
February 27, 2019
|
By:
|
/s/
|
Robin N. Lowe
|
|
|
|
|
Robin N. Lowe
|
|
|
|
|
Chief Financial Officer
|
Date:
|
February 27, 2019
|
By:
|
/s/
|
George G. Ellison
|
|
|
|
|
George G. Ellison
|
|
|
|
|
Chief Executive Officer
|
Date:
|
February 27, 2019
|
By:
|
/s/
|
Robin N. Lowe
|
|
|
|
|
Robin N. Lowe
|
|
|
|
|
Chief Financial Officer
|