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Investment in Unconsolidated Entities (Tables)
 9 Months Ended
Sep. 30, 2024
Equity Method Investments and Joint Ventures [Abstract]  
Equity Method Investments
A summary of the Company’s investments in unconsolidated entities is as follows (in thousands):
September 30, 2024December 31, 2023
GBTM Sendera, LLC$21,985 $19,866 
EJB River Holdings, LLC12,812 10,867 
Rainwater Crossing Single-Family, LLC12,714 — 
TMGB Magnolia Ridge, LLC11,005 — 
BHome Mortgage, LLC840 1,255 
GB Challenger, LLC(1)
— 52,666 
Total investment in unconsolidated entities $59,356 $84,654 
(1)Effective February 1, 2024, the Company sold its ownership interest in GB Challenger, LLC for approximately $64.0 million in cash.
Investment in Unconsolidated Entities
A summary of the Company’s investments in unconsolidated entities is as follows (in thousands):
September 30, 2024December 31, 2023
GBTM Sendera, LLC$21,985 $19,866 
EJB River Holdings, LLC12,812 10,867 
Rainwater Crossing Single-Family, LLC12,714 — 
TMGB Magnolia Ridge, LLC11,005 — 
BHome Mortgage, LLC840 1,255 
GB Challenger, LLC(1)
— 52,666 
Total investment in unconsolidated entities $59,356 $84,654 
(1)Effective February 1, 2024, the Company sold its ownership interest in GB Challenger, LLC for approximately $64.0 million in cash.

Sale of GB Challenger Ownership Interest
Effective February 1, 2024, the Company sold its ownership interest in GB Challenger, LLC (“Challenger”) to the entity that already held the controlling interest in Challenger for approximately $64.0 million in cash. A gain on this sale of $10.7 million is included in other income, net in the condensed consolidated statements of income.

Rainwater Crossing Single-Family, LLC Joint Venture
In February 2024, GRBK Edgewood, LLC (“GRBK Edgewood”) established a joint venture (“JV”), Rainwater Crossing Single-Family, LLC (“Rainwater Crossing”), with Rainwater Single Family S-CORP to develop a tract of land in Celina, Texas. Both parties hold a 50% ownership interest in Rainwater Crossing. The Company evaluated the JV agreements and determined that Rainwater Crossing is a VIE and the Company has a variable interest in this entity, but the Company is not its primary beneficiary. Specifically, the Company determined that it does not direct the activities that most significantly impact the entity’s economic performance as key decisions are subject to the approval of a management committee where both members are equally represented. Therefore, the Company’s investment in Rainwater Crossing is treated as an unconsolidated investment under the equity method of accounting and is included in investments in unconsolidated entities in the Company’s condensed consolidated balance sheets.

As of September 30, 2024, the Company’s maximum exposure to loss as a result from its involvement with Rainwater Crossing was approximately $24.9 million, representing its $12.7 million investment and the Company’s remaining commitment to contribute to the joint venture $12.2 million in quarterly payments through March 31, 2029. The Company is also required to fund the remaining development costs related to this project.

TMGB Magnolia Ridge, LLC Joint Venture

In September 2024, TMGB Magnolia Ridge, LLC (“Magnolia Ridge”) was formed by GRBK Edgewood and TM Magnolia Ridge, LLC (“TM Magnolia Ridge”) with the purpose to acquire and develop a tract of land in Denton County, Texas. Both parties hold a 50% ownership interest in Magnolia Ridge.

During the three months ended September 30, 2024, Magnolia Ridge received two initial contributions of $11.0 million from its two members, GBRK Edgewood and TM Magnolia Ridge. Per the Magnolia Ridge company agreement, GRBK Edgewood and TM Magnolia Ridge share equally in the profits and losses of Magnolia Ridge, with the exception of certain customary fees.

Following the analysis of the above facts and provisions of the Magnolia Ridge company agreement, the Company has determined that Magnolia Ridge is a JV to be evaluated under the voting interest model. Therefore, the Company’s investment in Magnolia Ridge is treated as an unconsolidated investment under the equity method of accounting and is included in investments in unconsolidated entities in the Company’s condensed consolidated balance sheets.

As of September 30, 2024, the Company’s maximum exposure to loss as a result of its involvement with Magnolia Ridge, was $33.5 million representing the Company’s investment in Magnolia Ridge of $11.0 million and up to a $22.5 million completion guarantee on the JV’s revolving loan to fund its development activities.
A summary of the unaudited condensed financial information of the unconsolidated entities as of September 30, 2024 and December 31, 2023 that are accounted for by the equity method is as follows (in thousands):
September 30, 2024December 31, 2023
Assets:
Cash$9,309 $23,549 
Accounts receivable707 4,207 
Bonds and notes receivable12,211 2,838 
Loans held for sale, at fair value2,901 7,452 
Inventory101,678 182,550 
Other assets2,043 6,425 
Total assets$128,849 $227,021 
Liabilities:
Accounts payable$4,453 $7,151 
Accrued expenses and other liabilities1,976 10,265 
Notes payable16,071 49,701 
Total liabilities22,500 67,117 
Owners’ equity:
Green Brick57,262 80,968 
Others49,087 78,936 
Total owners’ equity106,349 159,904 
Total liabilities and owners’ equity$128,849 $227,021 
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Revenues$6,498 $66,782 $44,315 $199,852 
Costs and expenses4,499 66,844 34,686 179,990 
Net earnings (loss) of unconsolidated entities$1,999 $(62)$9,629 $19,862 
Company’s share in net earnings of unconsolidated entities$992 $1,345 $4,770 $11,265 

A summary of the Company’s share in net earnings by unconsolidated entity is as follows (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
EJB River Holdings, LLC655 770 1,945 1,844 
BHome Mortgage, LLC337 646 1,896 1,980 
GB Challenger, LLC(1)
$— $(71)$929 $7,441 
Total net earnings (loss) from unconsolidated entities$992 $1,345 $4,770 $11,265