Asset acquisitions and dispositions

Real estate assets

Acquisitions, including those accounted for as business combinations

On March 30, 2017, we entered into an agreement to acquire up to 3,500 SFR properties (the “HOME Flow Transaction”) from entities (the “Sellers”) sponsored by Amherst Holdings, LLC (“Amherst”) in multiple closings. Through the second quarter of 2017, we have consummated two closings under the HOME Flow Transaction.

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In the first closing on March 30, 2017, our indirect wholly owned subsidiary, HOME SFR Borrower II, LLC (“HOME Borrower II”), acquired 757 SFR properties for an aggregate purchase price of $106.5 million, which is subject to potential purchase price adjustments as described in Note 7. The purchase price was funded with approximately $79.9 million in a seller financing arrangement (the “HOME II Loan Agreement,” see Note 6), representing 75% of the aggregate purchase price, as well as $26.6 million of cash on hand. We capitalized $1.5 million of acquisition fees and costs related to this portfolio acquisition pursuant to ASU 2017-01. The value of in-place leases was estimated at $2.4 million based upon the costs we would have incurred to lease the properties and is being amortized over the weighted average remaining life of the leases of approximately seven months as of the acquisition date. The Company has allocated the purchase price to land, building, site improvements and furniture, fixtures and equipment based on the relative fair value of the properties acquired.

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In the second closing on June 29, 2017, our indirect wholly owned subsidiary, HOME SFR Borrower III, LLC (“HOME Borrower III”), acquired 751 SFR properties for an aggregate purchase price of $117.1 million, which is subject to potential purchase price adjustments as described in Note 7. The purchase price was funded with approximately $87.8 million in a seller financing arrangement (the “HOME III Loan Agreement,” see Note 6), representing 75% of the aggregate purchase price, as well as $29.3 million of cash on hand. We capitalized $1.3 million of acquisition fees and costs related to this portfolio acquisition pursuant to ASU 2017-01. The value of in-place leases was estimated at $2.0 million based upon the costs we would have incurred to lease the properties and is being amortized over the weighted average remaining life of the leases of approximately nine months as of the acquisition date. As of June 30, 2017, the Company has estimated its allocation of the purchase price to land, building, site improvements and furniture, fixtures and equipment.

Following the above closings, as of June 30, 2017, we were committed to purchase up to 1,992 additional stabilized rental properties from the Sellers, 1,250 of which are subject to the Sellers' good faith efforts to offer such properties for sale (see Note 7).

During the three and six months ended June 30, 2017, we acquired 17 residential properties under our mini-bulk and one-by-one acquisition programs for an aggregate purchase price of $1.8 million.

On March 30, 2016, we completed the acquisition of 590 SFR properties located in five states from an unrelated third party for an aggregate purchase price of approximately $64.8 million. We recognized acquisition fees and costs related to this portfolio acquisition of $0.6 million. The value of in-place leases was estimated at $0.7 million based upon the costs we would have incurred to lease the properties and is being amortized over the weighted average remaining life of the leases of approximately seven months as of the acquisition date.

During the three and six months ended June 30, 2016, we acquired 291 and 404 residential properties, respectively, under our one-by-one acquisition program for an aggregate purchase price of $30.0 million and $40.1 million, respectively.

Dispositions

During the three and six months ended June 30, 2017, we sold 522 and 935 REO properties, respectively, and recorded $20.8 million and $40.8 million, respectively, of net realized gains on real estate.

During the three and six months ended June 30, 2016, we sold 910 and 1,596 residential properties, respectively, and recorded $39.1 million and $68.5 million, respectively, of net realized gains on real estate.

Mortgage loan assets

Dispositions

During the three and six months ended June 30, 2017, we sold 2,104 and 2,660 of our mortgage loans held for sale to third party purchasers. In connection with these sales, we recorded $40.2 million and $68.5 million, respectively, of net realized gains on mortgage loans held for sale.

During the three and six months ended June 30, 2016, we sold 895 and 1,973, respectively, of our mortgage loans held for sale to third party purchasers. In connection with these sales, we recorded $16.0 million and $50.1 million, respectively, of net realized gains on mortgage loans held for sale.

As of June 30, 2017, we have sold the substantial majority of our mortgage loan portfolio and had 442 remaining mortgage loans. We anticipate additional sales of our remaining mortgage loans, and we anticipate that the proceeds generated from any such transactions would be utilized, in part, to continue to facilitate our strategy to grow our SFR portfolio through the purchase of additional SFR properties.

Resolutions

During the three and six months ended June 30, 2017, we resolved 33 and 111 mortgage loans, respectively, primarily through short sales, refinancing and foreclosure sales. In connection with these resolutions, we recorded $10 thousand and $7.3 million, respectively, of net realized gains on mortgage loans.

During the three and six months ended June 30, 2016, we resolved 122 and 291 mortgage loans, respectively, primarily through short sales, refinancing and foreclosure sales. In connection with these resolutions, we recorded $8.2 million and $20.9 million, respectively, of net realized gains on mortgage loans.

Transfers of mortgage loans to real estate owned

During the three and six months ended June 30, 2017, we transferred an aggregate of 66 and 261 mortgage loans, respectively, to REO at an aggregate fair value based on broker price opinions (“BPOs”) of $12.2 million and $40.9 million, respectively. Such transfers occur when the foreclosure sale is complete. In connection with these transfers to REO, we recorded $5.0 million and $14.5 million, respectively, in change in unrealized gain on mortgage loans that resulted from marking the properties to their most current market value.

During the three and six months ended June 30, 2016, we transferred an aggregate of 308 and 668 mortgage loans, respectively, to REO at an aggregate fair value based on BPOs of $59.4 million and $124.3 million, respectively. Such transfers occur when the foreclosure sale is complete. In connection with these transfers to REO, we recorded $12.5 million and $24.1 million, respectively, in change in unrealized gains on mortgage loans.

Due diligence costs

During the three and six months ended June 30, 2017, we recognized $0.1 million and $0.3 million, respectively, of due diligence costs, primarily related to potential acquisitions that were ultimately not consummated. During the three and six months ended June 30, 2016, we recognized $0.4 million and $0.6 million, respectively, of due diligence costs. These due diligence costs are included in our condensed consolidated statement of operations as acquisition fees and costs.