REVEN HOUSING REIT, INC. (NASDAQ:RVEN) Files An 8-K Entry into a Material Definitive AgreementItem 1.01 Entry into a Material Definitive Agreement.
On December 29, 2017, Reven Housing Alabama, LLC (the “Borrower” or “Company”), a Delaware limited liability company and a wholly-owned subsidiary of Reven Housing REIT, Inc., a Maryland corporation (the “Registrant”), issued a Promissory Note Secured by a Mortgage and Security Agreement (the “Note”) to SouthPoint Bank, an Alabama corporation (“Lender”), in the principal amount of $3,793,920 (the “Principal Amount”). Principal and accrued interest are payable monthly based on a 20-year amortization period with the remaining unpaid principal due on January 5, 2023 (the “Maturity Date”). Interest accrues and is payable monthly on the Loan at the rate equal to four and one-quarter percent (4.25%) per annum until maturity. The Note is secured by those certain Mortgage, Assignments of Leases and Rents, Security Agreements and Fixture Filings dated December 29, 2017 executed by Borrower for the benefit of Lender (the “Mortgage and Security Agreement”).
The Note and the Mortgage and Security Agreement contain customary terms and conditions, including, without limitation, customary events of default and acceleration upon default, including defaults in the payment of principal or interest, defaults in compliance with the covenants and bankruptcy or other insolvency events.
Additionally, in connection with the Loan, Registrant entered into that certain Guarantee, dated December 29, 2017, with Lender (the “Guarantee”). The Guarantee provides that if Borrower were to default under the Loan, the Registrant would pay any amounts due to the Lender.
Item 2.01 Completion of Acquisition or Disposition of Assets.
Birmingham 50 Purchase and Sale Agreement
On September 6, 2017, the Company entered into a Single Family Homes Real Estate Purchase and Sale Agreement (the “Birmingham 50 Agreement”) with A&J Investments, LLC, an Alabama limited liability company, and MFJ, LLC, an Alabama limited liability company (collectively the “Birmingham 50 Sellers”), as amended, for the Company’s purchase of a portfolio of up to 50 single-family homes located in the Birmingham, Alabama, metropolitan area. On December 29, 2017, the Company closed on the purchase of 48 homes in the portfolio. The Seller is unaffiliated with the Company.
The contract purchase price for the 48 acquired properties was approximately $3,127,708, exclusive of closing costs and was subject to a credit of $352,875 for deferred maintenance. The Company funded the purchase with proceeds from the loan mentioned In Item 1.01 above.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information reported under Item 1.01 above regarding the description of the Loan and the material terms and conditions related thereto is incorporated herein by reference.
About REVEN HOUSING REIT, INC. (NASDAQ:RVEN)
Reven Housing REIT, Inc. is a holding company. The Company is an internally managed real estate investment trust. It is engaged in the acquisition, ownership and operation of portfolios of leased single family homes in the United States. Its objective is to generate cash flow and distribute resulting profits to its stockholders in the form of distributions, while gaining home price appreciation at the same time through the ownership of its portfolio properties. It operates its portfolio properties as single family rentals (SFRs), and generates its revenue from rental income from the existing tenants of the SFRs. As of December 31, 2015, it owned a total of 527 homes, of which 256 homes were in the Jacksonville, Florida metropolitan area; 168 homes were in the Houston, Texas metropolitan area; 94 homes were in the Memphis, Tennessee metropolitan area (with two of the Memphis homes located across the border in Mississippi), and nine homes were in the Atlanta, Georgia metropolitan area.