Real estate assets, net

3 Months Ended

Mar. 31, 2014

Real Estate [Abstract]

Real estate assets, net

Real estate assets, net

Acquisitions

During the three months ended March 31, 2014, Residential did not acquire any REO properties as part of their portfolio acquisitions. During the three months ended March 31, 2013, Residential acquired six residential properties. These REO properties were acquired as part of the loan portfolio acquisitions described in Note 2. The aggregate purchase price attributable to these acquired REO properties was $0.3 million.

Real estate held for use

As of March 31, 2014, Residential had 852 REO properties held for use. Of these properties, 35 of these properties had been rented, 17 were being listed for rent and 48 were in various stages of renovation. With respect to the remaining 752 REO properties, we will make a final determination whether each property meets Residential’s rental profile after (a) applicable state redemption periods have expired, (b) the foreclosure sale has been ratified (c) Residential has recorded the deed for the property, (d) utilities have been activated and (e) Residential has secured access for interior inspection. A majority of the REO properties are subject to state regulations which require Residential to await the expiration of a redemption period before a foreclosure can be finalized and title transferred to Residential. Residential includes these redemption periods in its portfolio pricing which generally reduces the price Residential pays for the mortgage loans. Once the redemption period expires, Residential immediately proceeds to record the new deed, take possession of the property, activate utilities, and start the inspection process in order to make its final determination. As of March 31, 2013, Residential had seven REO properties held for use, all of which were in the process of our determining whether these properties would meet our rental profile. If a REO property meets Residential's rental profile we determine the extent of renovations that are needed to generate an optimal rent and maintain consistency of renovation specifications for future branding. If we determine that the REO property will not meet Residential's rental profile, we list the property for sale, in many instances after renovations are made to optimize the sale proceeds.

Real estate held for sale

As of March 31, 2014, Residential classified 44 properties having carrying value of $4.2 million as real estate held for sale as they do not meet its residential rental property investment criteria. As of March 31, 2013, Residential had no real estate held for sale. None of these properties have any operations; therefore, we are not presenting discontinued operations related to these properties.

Dispositions

During the three months ended March 31, 2014, Residential disposed of two residential properties. Residential did not dispose of any residential properties during the three months ended March 31, 2013