0001640334-16-001451.txt : 20160727 0001640334-16-001451.hdr.sgml : 20160727 20160727172240 ACCESSION NUMBER: 0001640334-16-001451 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 31 CONFORMED PERIOD OF REPORT: 20160331 FILED AS OF DATE: 20160727 DATE AS OF CHANGE: 20160727 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CH REAL ESTATE II, INC CENTRAL INDEX KEY: 0001541719 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 273005341 STATE OF INCORPORATION: UT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 333-179424 FILM NUMBER: 161787684 BUSINESS ADDRESS: STREET 1: 175 SOUTH MAIN STREET, SUITE 1500 CITY: SALT LAKE CITY STATE: UT ZIP: 84111 BUSINESS PHONE: 801-739-8234 MAIL ADDRESS: STREET 1: 175 SOUTH MAIN STREET, SUITE 1500 CITY: SALT LAKE CITY STATE: UT ZIP: 84111 10-Q 1 chre_10q.htm FORM 10-Q chre_10q.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

x

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2016

 

¨

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ___________ to ___________

 

Commission File Number 333-179424

 

CH REAL ESTATE II, INC.

(Exact name of registrant as specified in its charter)

 

Utah

90-1030909

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

 

175 South Main Street, Suite 1500

Salt Lake City, UT 84111

(Address of principal executive offices, including zip code)

 

(801) 739-8234

(Registrant's telephone number, including area code)

 

n/a

(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ¨ No x

 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). 
Yes ¨ No x

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

 

Large accelerated filer

¨

Accelerated filer

¨

Non-accelerated filer

¨

Smaller reporting company

x

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No x
 

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

 

As of July 18, 2016, the issuer had 10,000,000 outstanding shares of common stock, no par value.

 

 
 
 
 

CH REAL ESTATE II, INC.

FORM 10-Q

 

For the Quarterly Period Ended March 31, 2016

 

INDEX

 

Page

PART I – FINANCIAL INFORMATION

Item 1

Financial Statements (unaudited)

3

Condensed Balance Sheets

3

Condensed Statements of Operations

4

Condensed Statements of Cash Flows

5

Notes to Condensed Financial Statements

6

 

Item 2

Management's Discussion and Analysis of Financial Condition and Results of Operations

9

 

Item 3

Quantitative and Qualitative Disclosures About Market Risk

13

 

Item 4

Controls and Procedures

13

 

 

 

 

 

PART II – OTHER INFORMATION

 

 

 

 

 

Item 5

Legal Proceedings

14

 

Item 6

Exhibits

14

 

Signatures

15

 

 
2
 

 

PART I – FINANCIAL INFORMATION

 

ITEM 1.  FINANCIAL STATEMENTS

    

CH Real Estate II, Inc.

Condensed Balance Sheets

 

 

 

March 31,

 

 

December 31,

 

 

 

2016

 

 

2015

 

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash

 

$8,801

 

 

$14,900

 

Loans receivable, net

 

 

79,965

 

 

 

124,930

 

 

 

 

 

 

 

 

 

 

Total current assets

 

 

88,766

 

 

 

139,830

 

 

 

 

 

 

 

 

 

 

Total assets

 

$88,766

 

 

$139,830

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Deferred Income

 

$2,087

 

 

$665

 

Payables, related parties

 

 

179,199

 

 

 

153,184

 

 

 

 

 

 

 

 

 

 

Total current liabilities

 

 

181,286

 

 

 

153,849

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

181,286

 

 

 

153,849

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders' equity

 

 

 

 

 

 

 

 

Common stock, 100,000,000 shares authorized, no par value, 10,000,000 shares issued and outstanding, respectively

 

 

82,500

 

 

 

82,500

 

Accumulated deficit

 

 

(175,020)

 

 

(96,519)

 

 

 

 

 

 

 

 

 

Total shareholders' equity

 

 

(92,520)

 

 

(14,019)

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders' equity

 

$88,766

 

 

$139,830

 

 

See the accompanying notes to the unaudited financial statements.

 

 
3
 

  

CH Real Estate II, Inc.

Condensed Statements of Operations

 

 

 

 

For the Three Months Ended

 

 

 

 

March 31,

 

 

 

 

2016

 

 

2015

 

 

 

 

(unaudited)

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

Interest income

 

 

 

5,321

 

 

 

-

 

Total revenue

 

 

 

5,321

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

General and administrative expenses

 

 

 

82,808

 

 

 

6,867

 

 

 

 

 

 

 

 

 

 

 

Total operating expenses

 

 

 

82,808

 

 

 

6,867

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

 

 

(77,487)

 

 

(6,867)

 

 

 

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

 

 

 

Interest income (expense), net

 

 

 

(1,014)

 

 

(2,247)

Total other income (expense), net

 

 

 

(1,014)

 

 

(2,247)

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

 

$(78,501)

 

$(9,114)

 

 

 

 

 

 

 

 

 

 

Basic and diluted net loss per share

 

 

 

(0.00)

 

 

(0.00)

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

 

 

 

 

 

 

 

-basicanddiluted

 

 

 

10,000,000

 

 

 

10,000,000

 

 

See the accompanying notes to the unaudited financial statements.

 

 
4
 

 

CH Real Estate II, Inc.

Condensed Statements of Cash Flows

 

 

 

For the Three Months Ended

 

 

 

March 31,

 

 

 

2016

 

 

2015

 

 

 

(unaudited)

 

 

(unaudited)

 

Cash flows used in operating activities:

 

 

 

 

 

 

Net income (loss)

 

$(78,501)

 

$(9,114)

Adjustments to reconcile net income (loss) to net cash (used in) provided by operations:

 

 

 

 

 

 

 

 

Non cash interest expense related party

 

 

1,014

 

 

 

2,247

 

 

 

 

 

 

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

-

 

 

 

357,751

 

Loans receivable bad debt provision

 

 

44,965

 

 

 

 

 

Deffered revenue

 

 

1,423

 

 

 

-

 

Net cash provided by (used in) operating activities

 

 

(31,099)

 

 

350,884

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Advances from related parties

 

 

25,000

 

 

 

-

 

Payments to related parties

 

 

-

 

 

 

(203,233)

Net cash provided by (used in) financing activities

 

 

25,000

 

 

 

(203,233)

 

 

 

 

 

 

 

 

 

Net increase (decrease) in cash

 

 

(6,099)

 

 

147,651

 

 

 

 

 

 

 

 

 

 

Cash at beginning of period

 

 

14,900

 

 

 

10,583

 

 

 

 

 

 

 

 

 

 

Cash at end of period

 

$8,801

 

 

$158,234

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash paid for interest

 

$-

 

 

$-

 

 

 

 

 

 

 

 

 

 

Cash paid for taxes

 

$-

 

 

$-

 

 

See accompanying notes to the unaudited financial statements.

 

 
5
 

 

CH REAL ESTATE II, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS 

(Unaudited)

 

Note 1: The Company

 

The Company and Nature of Business

 

CH Real Estate II, Inc. (the "Company") was incorporated in the State of Utah on April 14, 2011, as the successor to operations as CH Real Estate, which was organized in the State of Utah on June 29, 2010. CH Real Estate II, Inc. is a real estate investment and development company.

 

Investment: The Company purchases Notes and Deeds of Trust from unrelated third parties, so-called hard money loans, secured by the property against which the loans are made. The Company typically receives 15% to 18% return on these investments.

 

Development: The Company engages in purchasing properties for the purpose of keeping them as rental properties, and/or remodeling them and selling them at a profit.

 

Extension Income: The Company purchases Notes and Deeds of Trust from unrelated third parties. At times, these third parties request to extend the Notes on these properties. The Company charges an extension fee to extend the note

 

Basis of Presentation

 

The condensed interim financial information of the Company as of March 31, 2016 and for the three month period ended March 31, 2016 and 2015 is unaudited, and the balance sheet as of December 31, 2015 is derived from audited financial statements. The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial statements. Accordingly, they omit or condense footnotes and certain other information normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles. In the opinion of management, all adjustments that are necessary for a fair presentation of the financial information for the interim periods reported have been made. All such adjustments are of a normal recurring nature. The results of operations for the three months ended March 31, 2016 are not necessarily indicative of the results that can be expected for the entire year ending December 31, 2016. The unaudited financial statements should be read in conjunction with the Company's annual financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015. In particular, the Company's significant accounting policies were presented as Note 2 to the financial statements in that Annual Report.

 

Going Concern

 

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. As of March 31, 2016, the Company had an accumulated deficit of $175,020. This condition, in addition to operating losses in prior years, raise substantial doubt about the Company's ability to continue as a going concern.

 

In view of the matters described in the preceding paragraph, recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheets is dependent upon continued operations and the ability to succeed in its future operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence. The Company intends to continue to serve its customers as remodeler, landlord, and financing provider. There is no assurance that we will be successful in achieving any or all of these objectives.

 

 
6
 

 

Emerging Growth Company

 

We are an "emerging growth company" under the federal securities laws and will be subject to reduced public company reporting requirements. In addition, Section 107 of the JOBS Act also provides that an "emerging growth company" can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an "emerging growth company" can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We are choosing to take advantage of the extended transition period for complying with new or revised accounting standards. As a result, our financial statements may not be comparable to those of companies that comply with public company effective dates.

 

Note 2: Loans Receivable and Interest Income

 

On October 30, 2015, the Company used $35,000 of its cash funds to purchase a Note and Deed of Trust from DoHardMoney.com. The Note and Deed of Trust related to a residential property in WonderLake, Illinois, and the borrower was obligated to repay the $35,000 in principal, plus fifteen percent (15%) interest per annum, within 150 days. On July 5, 2016 the borrower extended the term of this note to three months by paying a extension fee of $1,929. The prepaid interest of $2,178 on this loan which deposited in December, 2015. The Company earned interest income totaling $892 related to this note during 2015 and $1,286 during the three months ended March 31, 2016.

 

On December 17, 2015, the Company used $89,930 of its cash funds to purchase a Note and Deed of Trust from DoHardMoney.com. The Note and Deed of Trust related to a residential property in Waxhaw, North Carolina, and the borrower was obligated to repay the $89,930 in principal, plus eighteen percent (18%) interest per annum, within 150 days. As this note is currently in default, the Company reserved $44,965 or 50% of the principal balance of this note as of March 31, 2016. The expense related to this reserve is included in general and administrative expenses on the statement of operations. The prepaid interest of $6,745 on this loan was deposited in January, 2016. The Company earned interest income totaling $621 related to this note during 2015 and $4,036 during the three months ended March 31, 2016.

 

Note 3: Construction in Progress

 

The Company engages in purchasing properties for the purpose of keeping them as rental properties, and/or remodeling them and selling them at a profit. Construction in progress consists of properties the companies has purchased which our currently being renovated. The Company did not hold, purchase or renovate any properties during the quarter ending March 31, 2016.

 

Note 4: Income Taxes

 

The current provision reflects current income taxes. As of March 31, 2016, the Company had federal and state net operating loss carryforwards of approximately $175,020. The provision (benefit) for income taxes for the period ended March 31, 2016 was offset by a full valuation allowance. As of December 31, 2015, the Company's net operating loss carryforward was $96,519. The federal and state net operating loss carryforwards will expire at various dates beginning in 2031, if not utilized. The Company's deferred tax assets as of March 31, 2016 and December 31, 2015 were $77,038 and $42,468 respectively. The potential income tax benefit of these losses have been offset by a full valuation allowance

 

Utilization of the net operating loss carryforwards and credits may be subject to a substantial annual limitation due to ownership change limitations provided by the Internal Revenue Code of 1986, as amended, and similar state provisions. The annual limitation may result in the expiration of net operating losses and credits before utilization.

 

The Company is currently open to audit under the statute of limitations by the Internal Revenue Service for the year ending December 31, 2012 through 2015. The Company recognizes interest and penalties related to income taxes in income tax expense. The Company had incurred no penalties and interest for the periods ended March 31, 2016 and December 31, 2015.

 

 
7
 


Note 5: Related Party Transactions

At inception, the Company issued 9,600,000 shares of restricted common stock to the majority shareholder for initial funding, in the amount of $2,500.

 

The Company does not have employment contracts with its sole officer and director, who is the majority shareholder. The sole officer and director of the Company is involved in other business activities and may, in the future, become involved in additional business opportunities that become available. A conflict may arise in selecting between the Company and other business interests. The Company has not formulated a policy for the resolution of such conflicts.

 

We depend on our sole officer and director, to provide the Company with the necessary funds to implement our business plan, as necessary. The Company does not have a funding commitment or any written agreement for our future required cash needs.

 

The majority shareholder has advanced funds, as necessary. These advances are considered temporary in nature and are payable on demand. There is no formal document describing the terms of this arrangement (maturity date and interest rates). As of March 31, 2016 and December 31, 2015, the loan balance was $154,493 and $129,492 respectively. The Company currently is accruing interest on the loan balance at a rate of 3% per annum. The total accrued interest is $24,705 and $23,692 as of March 31, 2016 and December 31, 2015, respectively.

 

The Company does not own or lease property or lease office space. The office space used by the Company was arranged by the sole officer and director of the Company to use at no charge.

 

The above amount is not necessarily indicative of the amount that would have been incurred had a comparable transaction been entered into with independent parties.

 

Note 6: Equity

 

The Company has been authorized to issue 100,000,000 common shares, no par value. Common shares are entitled to one vote per share.

 

As described above, on June 29, 2010, the Company issued 9,600,000 shares of its common stock to the officer and director of the Company in exchange for $2,500.

 

In March 2011, the Company received $15,500 in cash for the issuance of 77,500 shares of common stock at $.20 per share for gross proceeds in the amount of $15,500.

 

In March 2011, the Company issued 322,500 shares to consultants for services rendered. Shares were valued at the then fair market value of $.20 per share, for a total value of $64,500, which was expensed as stock-based compensation.

 

The Company has no options or warrants issued or outstanding and no preferred shares have been issued.

 

Note 6: Subsequent Events

 

On July 5, 2016 the borrower for the residential property in WonderLake, Illinois, extended the term of this note to three months by paying an extension fee of $1,929.  

 
8
 

 

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may" "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential" or "continue," the negative of such terms, or other comparable terminology. These statements are only predictions. Actual events or results may differ materially from those in the forward-looking statements as a result of various important factors. Although we believe that the expectations reflected in the forward-looking statements are reasonable, they should not be regarded as a representation by CH Real Estate II, Inc., or any other person, that such expectations will be achieved. The business and operations of CH Real Estate II, Inc. are subject to substantial risks, which increase the uncertainty inherent in the forward-looking statements contained in this report.

 

Results of Operations

 

Overview of Earnings for the period ended March 31, 2016

 

The Company's total revenue for the three month period ended March 31, 2016 consisted of interest income totaling $5,321. The Company incurred operating expenses of $82,809 during the period ended March 31, 2016, consisting of $44,965 of bad debt provision expense and the remainder primary relating to professional fees. The Company had a net loss of $78,501 for the period ended March 31, 2016.

 

Overview of Earnings for the period ended March 31, 2015

 

The Company had no revenues for the three month period ended March 31, 2015. The Company incurred operating expenses of $6,867 during the period ended March 31, 2015 and interest expense of $2,247. The Company had a net loss of $9,114 for the period ended March 31, 2015.

 

Plan of Operations

 

Although the Company intends to primarily engage in the purchase, improvement, and disposition of real property, it may also purchase hard money loans with maturity dates of less than a year that are secured by real property and earn above-market interest (in excess of twelve percent (12%) per annum). The Company generally does not perform a formal appraisal of the value of the security, and the Company identifies such Notes via referral from DoHardMoney.com, a company in the business of making hard money loans secured by real estate and managed by an individual that has been our Chief Executive Officer's real estate agent for several years. DoHardMoney.com has their own underwriting standards, with the results reviewed by the Company upon referral of the loan. DoHardMoney.com's underwriting procedure typically includes the following:

 

 

·

The loan to after-repair-value of property should be around 65%

 

·

Three qualified realtors informally value the property

 

·

Borrower Background Check for criminal record

 

·

Verify down payment source if applicable

 

·

Receive borrower's loan application short form

 

·

Review borrower credit scores and history

 

 
9
 

 

 

·

Review borrower's purchase contract for property

 

·

Verify borrower's company information and verification

 

·

Review borrower's submitted contractor bids for property rehabilitation/repair

 

·

Review Title Report and insurance

 

·

Review 24 month chain of title

 

·

Review hazard insurance

 

The Company does not perform any additional due diligence with respect to loan referrals from DoHardMoney.com other than a review of DoHardMoney.com's underwriting results, and the Company makes its decision to purchase a Note referred by DoHardMoney.com based on that review.

 

The Company intends to use its cash flows from operations to partially retire liabilities, beginning with outstanding interest on its related party debt and then principal on that debt, as well as to purchase additional properties. As management expects that the Company will make further purchases of real property during the next year, it expects that the Company's current cash funds and cash flow from operations will only fund its operations for the next six months. The Company intends to seek additional capital from its founder and raise additional capital through private equity financing and/or debt financing if possible.

 

During our startup phase of operations, we will seek to initially raise approximately $115,000 in additional capital by offering our common stock to business associates through private sales exempt from registration, and the capital raise thereby will be used to acquire additional properties, depending upon management's analysis of the amount by which the subject properties are determined to be priced below their intrinsic values, and/or retire existing debt with the founder if we are unable to locate any such properties. If appropriate "undervalued" properties are located, we anticipate that we will be able to purchase two such properties using all $115,000 in startup capital. Our ability to do so within the projected 18-month startup phase is wholly dependent upon the real estate market and our identification of properties priced enough below their intrinsic values to justify the expenses associated with purchasing, maintaining, repairing/improving, and selling such properties. If the Company is unable to generate capital to fund operations or raise additional capital through the sale of equity, but it does locate properties that it determines offer an attractive risk-reward ratio, it will be forced to borrow funds from its founder or from outside sources on terms it considers less attractive. The startup phase of our operations will be complete when we have generated $50,000 in net profits from our operations.

 

During our second phase of operations, or our repayment and growth phase, we will need approximately $250,000 in available cash funds, which will be used first to retire existing debt and then to purchase additional properties as available funds permit. We anticipate generating such funds through our startup operations and through additional equity and/or debt raises. Assuming we have $50,000 in available cash funds generated during our startup phase, and have retired existing debt, we anticipate that we will be able to purchase two additional properties. We hope to earn enough from the disposition of these properties to enable us to hire a full-time real estate investor, who will assist us in locating more properties that meet our investment profile.

 

Our third and final phase will target debt-free growth and will be funded exclusively through cash flow from existing operations or through one or more public or private equity offerings. During this last phase, we will increase our inventory of properties and staff used to locate, improve and market those properties and will expand into other markets outside of Utah.

 

 
10
 

 

During the next twelve months, the Company anticipates that it will incur minimal operating expenses aside from the accounting and EDGAR filing expenses associated with being a public company. At the present time, we have not made any arrangements to raise additional cash. We may seek to obtain the funds we need through a public offering, private placement of securities or loans. Other than as described in this paragraph, we have no other financing plans at this time.

 

Liquidity and Capital Resources

 

As of March 31, 2016, the Company had cash and cash equivalents of $8,801 with which to continue its operations. The cash flows provided from (used in) operations were ($31,099) and $350,884 for the periods ended March 31, 2016 and 2015. The Company's management believes that it is in position to fund its operation for the near term. The Company intends to seek financing via private equity investment and debt financing if necessary. Such equity investment would necessarily require the issuance of additional capital stock. We have not identified any potential lenders other than our founder who has loaned us funds in the past. We believe we can currently satisfy our cash requirements for the next twelve months with our current cash and expected revenues. Additionally, we may secure additional funds, for our growth, through our private placement of common stock. Management plans to increase the number of properties for the purpose of achieving a stream of revenue through rental properties. We believe that this plan will sustain future operational growth.

 

Completion of our plan of operation is subject to attaining adequate and continued revenue. We cannot assure investors that adequate rents and proceeds from out real estate transactions will be generated. In the absence of our anticipated rents and proceeds from sales, we believe that we will be able to proceed with our plan of operations. Even without significant revenues within the next twelve months, based on our current cash position, we anticipate being able to continue with our present activities. Although we believe we currently are adequately financed, we may require additional financing for sales and marketing objectives to achieve our goal of sustained profit, revenue and growth.

 

In the event we are not successful in reaching our sustained revenue targets, we anticipate that depending on market conditions and our plan of operations, we could incur operating losses in the future. We base this expectation, in part, on the fact that we may not be able to generate enough gross profit from our property transactions to cover our operating expenses. Consequently, there remains the possibility that the Company may not continue to operate as a going concern in the long term. As described in our market risks, we are subject to many factors. Some of which involve factors outside of management's controls, including interest rates, our ability to attain adequate financing for our property purchases, our ability to hire and retain skills necessary for the repairs of our assets, as well as other factors. Additionally, we benefit from the current market conditions of a high inventory of real estate properties and few buyers, resulting in what we believe is a below normal market price. We do expect market conditions to change, which will affect our profitability as the market becomes more competitive.

 

We have been funded solely by our majority shareholder for our initial purchase. These funds were necessary for our purchase. We do not have any agreement or written commitment for continued support in our efforts to grow our business plan.

 

Management believes that current revenue generated and recent investment commitment provides the opportunity for the Company to continue as a going concern and fund the strategic plan.

 

Subsequent Events

 

On July 5, 2016 the borrower for the residential property in WonderLake, Illinois, extended the term of this note to three months by paying an extension fee of $1,929.

 

 
11
 

 

Going Concern

 

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. As of March 31, 2016, the Company had an accumulated deficit of $175,020. This condition, in addition to operating losses in prior years, raise substantial doubt about the Company's ability to continue as a going concern.

 

In view of the matters described in the preceding paragraph, recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheets is dependent upon continued operations and the ability to succeed in its future operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence. The Company intends to continue to serve its customers as remodeler, landlord, and financing provider. There is no assurance that we will be successful in achieving any or all of these objectives

 

Emerging Growth Company

 

We are an "emerging growth company" under the federal securities laws and will be subject to reduced public company reporting requirements. In addition, Section 107 of the JOBS Act also provides that an "emerging growth company" can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an "emerging growth company" can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We are choosing to take advantage of the extended transition period for complying with new or revised accounting standards. As a result, our financial statements may not be comparable to those of companies that comply with public company effective dates.

 

Critical Accounting Policies

 

Our financial statements are based on the application of accounting principles generally accepted in the United States ("GAAP"). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue, and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use if estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.

 

The Company's significant accounting policies were presented as Note 2 to the consolidated financial statements in our Annual Report. While all these significant accounting policies impact our financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. Management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on our consolidated results of operations, financial position or liquidity for the periods presented in this report.

 

Off Balance Sheet Arrangements

 

We have no off-balance sheet arrangements.

 

Recent Accounting Pronouncements

 

From time to time, new accounting pronouncements are issued by FASB that are adopted by the Company as of the specified effective date. If not discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company's financial statements upon adoption.

 

 
12
 

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

As the Company is a "smaller reporting company," this item is not applicable.

 

ITEM 4. CONTROLS AND PROCEDURES

  

Evaluation of Disclosure Controls and Procedures

 

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit to the Securities and Exchange Commission under the Exchange Act, is recorded, processed, summarized, and reported within the time periods specified by the Securities and Exchange Commission's rules and forms, and that information is accumulated and communicated to our management, including our principal executive and principal financial officer (whom we refer to in this periodic report as our Certifying Officer), as appropriate to allow timely decisions regarding required disclosure. The Company's Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the period ended March 31, 2016 covered by this Form 10-Q. Based upon such evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company's disclosure controls and procedures were not effective as required under Rules 13a-15(e) and 15d-15(e) under the Exchange Act.

 

Changes in Internal Control over Financial Reporting

 

There was no change in our internal control over financial reporting that occurred in the first quarter of 2016 that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.

 

 
13
 

 

PART II – OTHER INFORMATION

 

 

ITEM 5. LEGAL PROCEEDING

  

None. 

 

ITEM 6. LEGAL EXHIBITS

  

The following exhibits are filed as a part of this report:

 

 
14
 

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

CH Real Estate II, Inc.

 

Date: July 27, 2016

By:

/s/ Curt Hansen

Curt Hansen

Chief Executive Officer

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

July 27, 2016

By:

/s/ Curt Hansen

Curt Hansen

Chief Executive Officer,

Principal Financial Officer

Principle Accounting Officer, and Chairman of the Board of Directors

 

July 27, 2016

By:

/s/ Mike Hansen

Mike Hansen

Member of the Board of Directors

 

 

 

15

 

EX-31.1 2 chre_ex311.htm CERTIFICATION chre_ex311.htm

EXHIBIT 31.1

 

 CERTIFICATION

 

I, Curt Hansen, President, Chief Executive Officer and Chief Financial Officer of CH REAL ESTATE II, INC., certify that: 

 

 

1.

I have reviewed this Quarterly Report on Form 10-Q of CH REAL ESTATE II, INC.;

 
2.

Based on my knowledge, this report does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by annual report;

 
3.

Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 
4.

I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d- 15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a)

designed such disclosure controls and procedures, or caused such disclosure control and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

 
b)

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 
c)

evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;

 
d)

disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

 
5.

I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

 
a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process summarize and report financial information; and

 
b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 
Date: July 27, 2016By:

/s/ Curt Hansen

Curt Hansen, President,

Chief Executive Officer and Chief Financial Officer

 

EX-31.2 3 chre_ex312.htm CERTIFICATION chre_ex312.htm

EXHIBIT 31.2

 

CERTIFICATION PURSUANT TO 

18 U.S.C. SECTION 1350 

AS ADOPTED PURSUANT TO 

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of CH REAL ESTATE II, INC. (the "Company") on Form 10-Q for the quarter ended March 31, 2016 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned, in the capacities and on the dates indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

 

1.

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: July 27, 2016By:

/s/ Curt Hansen

Curt Hansen, President,

Chief Executive Officer and Chief Financial Officer

 

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This condition, in addition to operating losses in prior years, raise substantial doubt about the Company's ability to continue as a going concern.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">In view of the matters described in the preceding paragraph, recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheets is dependent upon continued operations and the ability to succeed in its future operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence. The Company intends to continue to serve its customers as remodeler, landlord, and financing provider. There is no assurance that we will be successful in achieving any or all of these objectives.</font></p> <p style="margin: 0pt; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">The condensed interim financial information of the Company as of March 31, 2016 and for the three month period ended March 31, 2016 and 2015 is unaudited, and the balance sheet as of December 31, 2015 is derived from audited financial statements. The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial statements. Accordingly, they omit or condense footnotes and certain other information normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles. In the opinion of management, all adjustments that are necessary for a fair presentation of the financial information for the interim periods reported have been made. All such adjustments are of a normal recurring nature. The results of operations for the three months ended March 31, 2016 are not necessarily indicative of the results that can be expected for the entire year ending December 31, 2016. The unaudited financial statements should be read in conjunction with the Company's annual financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015. In particular, the Company's significant accounting policies were presented as Note 2 to the financial statements in that Annual Report.</font></p> <p style="margin: 0pt; text-align: justify"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">CH Real Estate II, Inc. (the &#34;Company&#34;) was incorporated in the State of Utah on April 14, 2011, as the successor to operations as CH Real Estate, which was organized in the State of Utah on June 29, 2010. CH Real Estate II, Inc. is a real estate investment and development company.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b>Investment</b>: The Company purchases Notes and Deeds of Trust from unrelated third parties, so-called hard money loans, secured by the property against which the loans are made. The Company typically receives 15% to 18% return on these investments.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b>Development</b>: The Company engages in purchasing properties for the purpose of keeping them as rental properties, and/or remodeling them and selling them at a profit.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><font style="font: 10pt Times New Roman, Times, Serif">&#160;</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b>Extension Income</b>: The Company purchases Notes and Deeds of Trust from unrelated third parties. 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Document and Entity Information - shares
3 Months Ended
Mar. 31, 2016
Jul. 18, 2016
Document And Entity Information [Abstract]    
Entity Registrant Name CH REAL ESTATE II, INC  
Entity Central Index Key 0001541719  
Entity Current Reporting Status Yes  
Entity Voluntary Filers No  
Current Fiscal Year End Date --12-31  
Entity Filer Category Smaller Reporting Company  
Entity Well-known Seasoned Issuer No  
Entity Common Stock, Shares Outstanding   10,000,000
Document Type 10-Q  
Document Period End Date Mar. 31, 2016  
Amendment Flag false  
Document Fiscal Year Focus 2015  
Document Fiscal Period Focus Q1  
XML 11 R2.htm IDEA: XBRL DOCUMENT v3.5.0.2
CONDENSED BALANCE SHEETS - USD ($)
Mar. 31, 2016
Dec. 31, 2015
Current assets    
Cash $ 8,801 $ 14,900
Loans receivable, net 79,965 124,930
Total current assets 88,766 139,830
Total assets 88,766 139,830
Current liabilities    
Deferred Income 2,088 665
Payables, related parties 179,199 153,184
Total current liabilities 181,287 153,849
Total liabilities 181,287 153,849
Shareholders' equity    
Common stock, 100,000,000 shares authorized, no par value, 10,000,000 shares issued and outstanding, respectively 82,500 82,500
Accumulated deficit (175,020) (96,519)
Total shareholders' equity (92,500) (14,019)
Total liabilities and shareholders' equity $ 88,766 $ 139,830
XML 12 R3.htm IDEA: XBRL DOCUMENT v3.5.0.2
CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares
Mar. 31, 2016
Dec. 31, 2015
Condensed Balance Sheets Parenthetical    
Common stock, shares authorized 1,000,000,000 1,000,000,000
Common stock, no par value (in dollars per share)
Common stock, shares issued 10,000,000 10,000,000
Common stock, shares outstanding 10,000,000 10,000,000
XML 13 R4.htm IDEA: XBRL DOCUMENT v3.5.0.2
CONDENSED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Condensed Statements Of Operations    
Interest income $ 5,321
Total revenue 5,321
Operating expenses    
General and administrative expenses 82,809 6,867
Total operating expenses 82,809 6,867
Income (loss) from operations (77,487) (6,867)
Other income (expense)    
Interest income (expense), net (1,014) (2,247)
Total other income (expense), net (1,014) (2,247)
Net income (loss) $ (78,501) $ (9,114)
Basic and diluted net loss per share $ (0.00) $ (0.00)
Weighted average shares outstanding- basic and diluted 10,000,000 10,000,000
XML 14 R5.htm IDEA: XBRL DOCUMENT v3.5.0.2
CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Cash flows used in operating activities:    
Net income (loss) $ (78,501) $ (9,114)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operations:    
Non cash interest expense related party 1,014 2,247
Changes in operating assets and liabilities:    
Accounts receivable, net 357,751
Loan receivable bad debt provision 44,965  
Deferred revenue 1,423
Net cash provided by (used in) operating activities (31,099) 350,884
Cash flows from financing activities:    
Advances from related parties 25,000
Payments to related parties (203,233)
Net cash provided by (used in) financing activities 25,000 (203,233)
Net increase (decrease) in cash (6,099) 147,651
Cash at beginning of period 14,900 10,583
Cash at end of period 8,801 158,234
Supplemental disclosure of cash flow information:    
Cash paid for interest
Cash paid for taxes
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The Company
3 Months Ended
Mar. 31, 2016
Notes to Financial Statements  
Note 1 - The Company

The Company and Nature of Business

 

CH Real Estate II, Inc. (the "Company") was incorporated in the State of Utah on April 14, 2011, as the successor to operations as CH Real Estate, which was organized in the State of Utah on June 29, 2010. CH Real Estate II, Inc. is a real estate investment and development company.

 

Investment: The Company purchases Notes and Deeds of Trust from unrelated third parties, so-called hard money loans, secured by the property against which the loans are made. The Company typically receives 15% to 18% return on these investments.

 

Development: The Company engages in purchasing properties for the purpose of keeping them as rental properties, and/or remodeling them and selling them at a profit.

 

Extension Income: The Company purchases Notes and Deeds of Trust from unrelated third parties. At times, these third parties request to extend the Notes on these properties. The Company charges an extension fee to extend the note

 

Basis of Presentation

 

The condensed interim financial information of the Company as of March 31, 2016 and for the three month period ended March 31, 2016 and 2015 is unaudited, and the balance sheet as of December 31, 2015 is derived from audited financial statements. The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial statements. Accordingly, they omit or condense footnotes and certain other information normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles. In the opinion of management, all adjustments that are necessary for a fair presentation of the financial information for the interim periods reported have been made. All such adjustments are of a normal recurring nature. The results of operations for the three months ended March 31, 2016 are not necessarily indicative of the results that can be expected for the entire year ending December 31, 2016. The unaudited financial statements should be read in conjunction with the Company's annual financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015. In particular, the Company's significant accounting policies were presented as Note 2 to the financial statements in that Annual Report.

 

Going Concern

 

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. As of March 31, 2016, the Company had an accumulated deficit of $175,020. This condition, in addition to operating losses in prior years, raise substantial doubt about the Company's ability to continue as a going concern.

 

In view of the matters described in the preceding paragraph, recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheets is dependent upon continued operations and the ability to succeed in its future operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence. The Company intends to continue to serve its customers as remodeler, landlord, and financing provider. There is no assurance that we will be successful in achieving any or all of these objectives.

 

Emerging Growth Company

 

We are an "emerging growth company" under the federal securities laws and will be subject to reduced public company reporting requirements. In addition, Section 107 of the JOBS Act also provides that an "emerging growth company" can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an "emerging growth company" can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We are choosing to take advantage of the extended transition period for complying with new or revised accounting standards. As a result, our financial statements may not be comparable to those of companies that comply with public company effective dates.

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Loans Receivable and Interest Income
3 Months Ended
Mar. 31, 2016
Notes to Financial Statements  
Note 2 - Loans Receivable and Related Interest

On October 30, 2015, the Company used $35,000 of its cash funds to purchase a Note and Deed of Trust from DoHardMoney.com. The Note and Deed of Trust related to a residential property in WonderLake, Illinois, and the borrower was obligated to repay the $35,000 in principal, plus fifteen percent (15%) interest per annum, within 150 days. On July 5, 2016 the borrower extended the term of this note to three months by paying a extension fee of $1,929. The prepaid interest of $2,178 on this loan which deposited in December, 2015. The Company earned interest income totaling $892 related to this note during 2015 and $1,286 during the three months ended March 31, 2016.

 

On December 17, 2015, the Company used $89,930 of its cash funds to purchase a Note and Deed of Trust from DoHardMoney.com. The Note and Deed of Trust related to a residential property in Waxhaw, North Carolina, and the borrower was obligated to repay the $89,930 in principal, plus eighteen percent (18%) interest per annum, within 150 days. As this note is currently in default, the Company reserved $44,965 or 50% of the principal balance of this note as of March 31, 2016. The expense related to this reserve is included in general and administrative expenses on the statement of operations. The prepaid interest of $6,745 on this loan was deposited in January, 2016. The Company earned interest income totaling $621 related to this note during 2015 and $4,036 during the three months ended March 31, 2016.

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Construction in Progress
3 Months Ended
Mar. 31, 2016
Notes to Financial Statements  
Note 3 - Construction in Progress

The Company engages in purchasing properties for the purpose of keeping them as rental properties, and/or remodeling them and selling them at a profit. Construction in progress consists of properties the companies has purchased which our currently being renovated. The Company did not hold, purchase or renovate any properties during the quarter ending March 31, 2016.

XML 18 R9.htm IDEA: XBRL DOCUMENT v3.5.0.2
Income Taxes
3 Months Ended
Mar. 31, 2016
Notes to Financial Statements  
Note 4 - Income Taxes

The current provision reflects current income taxes. As of March 31, 2016, the Company had federal and state net operating loss carryforwards of approximately $175,020. The provision (benefit) for income taxes for the period ended March 31, 2016 was offset by a full valuation allowance. As of December 31, 2015, the Company's net operating loss carryforward was $96,519. The federal and state net operating loss carryforwards will expire at various dates beginning in 2031, if not utilized. The Company's deferred tax assets as of March 31, 2016 and December 31, 2015 were $77,038 and $42,468 respectively. The potential income tax benefit of these losses have been offset by a full valuation allowance

 

Utilization of the net operating loss carryforwards and credits may be subject to a substantial annual limitation due to ownership change limitations provided by the Internal Revenue Code of 1986, as amended, and similar state provisions. The annual limitation may result in the expiration of net operating losses and credits before utilization.

 

The Company is currently open to audit under the statute of limitations by the Internal Revenue Service for the year ending December 31, 2012 through 2015. The Company recognizes interest and penalties related to income taxes in income tax expense. The Company had incurred no penalties and interest for the periods ended March 31, 2016 and December 31, 2015.

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Related Party Transactions
3 Months Ended
Mar. 31, 2016
Notes to Financial Statements  
Note 5 - Related Party Transactions

At inception, the Company issued 9,600,000 shares of restricted common stock to the majority shareholder for initial funding, in the amount of $2,500.

 

The Company does not have employment contracts with its sole officer and director, who is the majority shareholder. The sole officer and director of the Company is involved in other business activities and may, in the future, become involved in additional business opportunities that become available. A conflict may arise in selecting between the Company and other business interests. The Company has not formulated a policy for the resolution of such conflicts.

 

We depend on our sole officer and director, to provide the Company with the necessary funds to implement our business plan, as necessary. The Company does not have a funding commitment or any written agreement for our future required cash needs.

 

The majority shareholder has advanced funds, as necessary. These advances are considered temporary in nature and are payable on demand. There is no formal document describing the terms of this arrangement (maturity date and interest rates). As of March 31, 2016 and December 31, 2015, the loan balance was $154,493 and $129,492 respectively. The Company currently is accruing interest on the loan balance at a rate of 3% per annum. The total accrued interest is $24,705 and $23,692 as of March 31, 2016 and December 31, 2015, respectively.

 

The Company does not own or lease property or lease office space. The office space used by the Company was arranged by the sole officer and director of the Company to use at no charge.

 

The above amount is not necessarily indicative of the amount that would have been incurred had a comparable transaction been entered into with independent parties.

XML 20 R11.htm IDEA: XBRL DOCUMENT v3.5.0.2
Equity
3 Months Ended
Mar. 31, 2016
Notes to Financial Statements  
Note 6 - Equity

The Company has been authorized to issue 100,000,000 common shares, no par value. Common shares are entitled to one vote per share.

 

As described above, on June 29, 2010, the Company issued 9,600,000 shares of its common stock to the officer and director of the Company in exchange for $2,500.

 

In March 2011, the Company received $15,500 in cash for the issuance of 77,500 shares of common stock at $.20 per share for gross proceeds in the amount of $15,500.

 

In March 2011, the Company issued 322,500 shares to consultants for services rendered. Shares were valued at the then fair market value of $.20 per share, for a total value of $64,500, which was expensed as stock-based compensation.

 

The Company has no options or warrants issued or outstanding and no preferred shares have been issued.

XML 21 R12.htm IDEA: XBRL DOCUMENT v3.5.0.2
Subsequent Events
3 Months Ended
Mar. 31, 2016
Notes to Financial Statements  
Note 7 - Subsequent Events

On July 5, 2016 the borrower for the residential property in WonderLake, Illinois, extended the term of this note to three months by paying an extension fee of $1,929.

XML 22 R13.htm IDEA: XBRL DOCUMENT v3.5.0.2
The Company (Policies)
3 Months Ended
Mar. 31, 2016
Company Policies  
The Company and Nature of Business

CH Real Estate II, Inc. (the "Company") was incorporated in the State of Utah on April 14, 2011, as the successor to operations as CH Real Estate, which was organized in the State of Utah on June 29, 2010. CH Real Estate II, Inc. is a real estate investment and development company.

 

Investment: The Company purchases Notes and Deeds of Trust from unrelated third parties, so-called hard money loans, secured by the property against which the loans are made. The Company typically receives 15% to 18% return on these investments.

 

Development: The Company engages in purchasing properties for the purpose of keeping them as rental properties, and/or remodeling them and selling them at a profit.

 

Extension Income: The Company purchases Notes and Deeds of Trust from unrelated third parties. At times, these third parties request to extend the Notes on these properties. The Company charges an extension fee to extend the note.

Basis of Presentation

The condensed interim financial information of the Company as of March 31, 2016 and for the three month period ended March 31, 2016 and 2015 is unaudited, and the balance sheet as of December 31, 2015 is derived from audited financial statements. The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial statements. Accordingly, they omit or condense footnotes and certain other information normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles. In the opinion of management, all adjustments that are necessary for a fair presentation of the financial information for the interim periods reported have been made. All such adjustments are of a normal recurring nature. The results of operations for the three months ended March 31, 2016 are not necessarily indicative of the results that can be expected for the entire year ending December 31, 2016. The unaudited financial statements should be read in conjunction with the Company's annual financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015. In particular, the Company's significant accounting policies were presented as Note 2 to the financial statements in that Annual Report.

Going Concern

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. As of March 31, 2016, the Company had an accumulated deficit of $175,020. This condition, in addition to operating losses in prior years, raise substantial doubt about the Company's ability to continue as a going concern.

 

In view of the matters described in the preceding paragraph, recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheets is dependent upon continued operations and the ability to succeed in its future operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence. The Company intends to continue to serve its customers as remodeler, landlord, and financing provider. There is no assurance that we will be successful in achieving any or all of these objectives.

Emerging Growth Company

We are an "emerging growth company" under the federal securities laws and will be subject to reduced public company reporting requirements. In addition, Section 107 of the JOBS Act also provides that an "emerging growth company" can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an "emerging growth company" can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We are choosing to take advantage of the extended transition period for complying with new or revised accounting standards. As a result, our financial statements may not be comparable to those of companies that comply with public company effective dates.

XML 23 R14.htm IDEA: XBRL DOCUMENT v3.5.0.2
The Company (Details Narrative) - USD ($)
3 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Company Details Narrative    
Percentage of return on investments 15% to 18%  
Accumulated deficit $ (175,020) $ (96,519)
XML 24 R15.htm IDEA: XBRL DOCUMENT v3.5.0.2
Loans Receivable and Interest Income (Details Narrative) - Do Hard Money Com [Member] - Notes Receivable [Member] - USD ($)
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Illinois [Member]    
Interest income earned $ 1,286 $ 892
North Carolina [Member]    
Interest income earned 4,036 $ 621
Reserve principal balance $ 44,965  
Interest rate per annum 50.00%  
XML 25 R16.htm IDEA: XBRL DOCUMENT v3.5.0.2
Income Taxes (Details Narrative) - USD ($)
Mar. 31, 2016
Dec. 31, 2015
Income Taxes Details Narrative    
Net operating loss carryforward $ 175,020 $ 96,519
Deferred tax assets $ 77,038 $ 42,468
XML 26 R17.htm IDEA: XBRL DOCUMENT v3.5.0.2
Related Party Transactions (Details Narrative) - USD ($)
Mar. 31, 2016
Dec. 31, 2015
Related Party Transactions Details Narrative    
Loan balance $ 154,493 $ 129,492
Interest rate per annum on loan balance   3.00%
Accrued interest $ 24,705 $ 23,692
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