10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

þ	QUARTERLYREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended June 30, 2018

OR

o	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 000-55428

STEADFAST APARTMENT REIT, INC.

(Exact Name of Registrant as Specified in Its Charter)

Maryland	36-4769184
(State or Other Jurisdiction of	(I.R.S. Employer
Incorporation or Organization)	Identification No.)

18100 Von Karman Avenue, Suite 500
Irvine, California	92612
(Address of Principal Executive Offices)	(Zip Code)

(949) 852-0700

(Registrant’s Telephone Number, Including Area Code)

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 þ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filed, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated filer o	Accelerated filer o
Non-Accelerated filer þ	Smaller reporting company o
Emerging growth company þ

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. þ

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

As of August 3, 2018, there were 51,370,650 shares of the Registrant’s common stock issued and outstanding.

STEADFAST APARTMENT REIT, INC.

INDEX

	Page
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements	2
Consolidated Balance Sheets as of June 30, 2018 (unaudited) and December 31, 2017	2
Consolidated Statements of Operations for the three and six months ended June 30, 2018 and 2017 (unaudited)	3
Consolidated Statements of Stockholders’ Equity for the year ended December 31, 2017 and for the six months ended June 30, 2018 (unaudited)	4
Consolidated Statements of Cash Flows for the six months ended June 30, 2018 and 2017 (unaudited)	5
Condensed Notes to Consolidated Financial Statements as of June 30, 2018 (unaudited)	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3. Quantitative and Qualitative Disclosures About Market Risk	49
Item 4. Controls and Procedures	50
PART II — OTHER INFORMATION
Item 1. Legal Proceedings	51
Item 1A. Risk Factors	51
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	51
Item 3. Defaults Upon Senior Securities	52
Item 4. Mine Safety Disclosures	52
Item 5. Other Information	52
Item 6. Exhibits	53
Signatures	54

1

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

STEADFAST APARTMENT REIT, INC.

CONSOLIDATED BALANCE SHEETS

	June 30, 2018			December 31, 2017
	(Unaudited)
ASSETS
Assets:
Real Estate:
Land	$	164,113,072		$	164,113,072
Building and improvements	1,400,950,596			1,394,779,659
Total real estate, cost	1,565,063,668			1,558,892,731
Less accumulated depreciation and amortization	(182,779,645		)	(147,726,630		)
Total real estate, net	1,382,284,023			1,411,166,101
Cash and cash equivalents	20,342,021			27,298,855
Restricted cash	12,737,041			11,368,850
Rents and other receivables	1,646,631			1,722,065
Other assets	4,180,791			2,812,186
Total assets	$	1,421,190,507		$	1,454,368,057
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Accounts payable and accrued liabilities	$	27,011,977		$	27,612,665
Notes Payable, net:
Mortgage notes payable, net	948,896,621			948,557,074
Revolving credit facilities, net	44,901,833			44,848,788
Total notes payable, net	993,798,454			993,405,862
Distributions payable	3,792,428			3,886,730
Due to affiliates	2,372,932			2,760,555
Total liabilities	1,026,975,791			1,027,665,812
Commitments and contingencies (Note 9)
Redeemable common stock	—			36,397,062
Stockholders’ Equity:
Preferred stock, $0.01 par value per share; 100,000,000 shares authorized, no shares issued and outstanding	—			—
Common stock, $0.01 par value per share; 999,999,000 shares authorized, 51,262,810 and 50,842,640 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively	512,628			508,426
Convertible stock, $0.01 par value per share; 1,000 shares authorized, issued and outstanding as of June 30, 2018 and December 31, 2017, respectively	10			10
Additional paid-in capital	676,854,459			633,186,743
Cumulative distributions and net losses	(283,152,381		)	(243,389,996		)
Total stockholders’ equity	394,214,716			390,305,183
Total liabilities and stockholders’ equity	$	1,421,190,507		$	1,454,368,057

See accompanying notes to consolidated financial statements.

2

PART I — FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

STEADFAST APARTMENT REIT, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Revenues:
Rental income	$	37,749,899		$	36,355,539		$	74,550,233		$	71,858,687
Tenant reimbursements and other	4,725,267			4,465,330			9,291,959			8,666,957
Total revenues	42,475,166			40,820,869			83,842,192			80,525,644
Expenses:
Operating, maintenance and management	10,439,849			9,994,030			20,414,684			19,444,888
Real estate taxes and insurance	5,962,503			5,326,357			11,647,883			11,558,404
Fees to affiliates	5,826,703			5,725,587			11,623,381			11,364,558
Depreciation and amortization	17,629,793			16,725,862			35,065,143			34,124,387
Interest expense	10,231,952			8,417,150			19,324,835			16,299,864
General and administrative expenses	1,330,544			1,589,944			2,730,538			3,103,456
Acquisition costs	—			1,000			—			2,185
Total expenses	51,421,344			47,779,930			100,806,464			95,897,742
Net loss	$	(8,946,178	)	$	(6,959,061	)	$	(16,964,272	)	$	(15,372,098	)
Loss per common share — basic and diluted	$	(0.17	)	$	(0.14	)	$	(0.33	)	$	(0.31	)
Weighted average number of common shares outstanding — basic and diluted	51,186,141			50,215,167			51,081,717			50,068,960
Distributions declared per share	$	0.224		$	0.224		$	0.446		$	0.446

See accompanying notes to consolidated financial statements.

3

PART I — FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

STEADFAST APARTMENT REIT, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE YEAR ENDED DECEMBER 31, 2017 AND

FOR THE SIX MONTHS ENDED JUNE 30, 2018 (Unaudited)

	Common Stock					Convertible Stock			Additional Paid-In Capital			Cumulative Distributions & Net Losses			Total Stockholders’ Equity
	Shares		Amount			Shares	Amount
BALANCE, December 31, 2016	49,698,486		$	496,985		1,000	$	10	$	625,996,383		$	(164,445,092	)	$	462,048,286
Issuance of common stock	1,583,829		15,838			—	—		23,322,254			—			23,338,092
Transfers to redeemable common stock	—		—			—	—		(10,025,412		)	—			(10,025,412		)
Repurchase of common stock	(439,675	)	(4,397		)	—	—		(6,186,340		)	—			(6,190,737		)
Distributions declared	—		—			—	—		—			(45,321,063		)	(45,321,063		)
Amortization of stock-based compensation	—		—			—	—		79,858			—			79,858
Net loss	—		—			—	—		—			(33,623,841		)	(33,623,841		)
BALANCE, December 31, 2017	50,842,640		508,426			1,000	10		633,186,743			(243,389,996		)	390,305,183
Issuance of common stock	766,782		7,668			—	—		11,462,272			—			11,469,940
Commissions on sales of common stock and related dealer manager fees to affiliates	—		—			—	—		32,414			—			32,414
Transfers from redeemable common stock	—		—			—	—		37,028,102			—			37,028,102
Repurchase of common stock	(346,612	)	(3,466		)	—	—		(4,882,750		)	—			(4,886,216		)
Distributions declared	—		—			—	—		—			(22,798,113		)	(22,798,113		)
Amortization of stock-based compensation	—		—			—	—		27,678			—			27,678
Net loss	—		—			—	—		—			(16,964,272		)	(16,964,272		)
BALANCE, June 30, 2018	51,262,810		$	512,628		1,000	$	10	$	676,854,459		$	(283,152,381	)	$	394,214,716

See accompanying notes to consolidated financial statements.

4

PART I — FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

STEADFAST APARTMENT REIT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended June 30,
	2018			2017
Cash Flows from Operating Activities:
Net loss	$	(16,964,272	)	$	(15,372,098	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	35,065,143			34,124,387
Loss on disposal of buildings and improvements	188,369			111,138
Amortization of deferred financing costs	493,241			509,689
Amortization of stock-based compensation	27,678			33,756
Change in fair value of interest rate cap agreements	(578,894		)	395,654
Amortization of loan discount	177,491			177,492
Insurance claim recoveries	(143,972		)	(143,248		)
Changes in operating assets and liabilities:
Rents and other receivables	75,434			(399,047		)
Other assets	(789,711		)	1,332,254
Accounts payable and accrued liabilities	1,373,613			(1,521,376		)
Due to affiliates	(146,735		)	(1,508,595		)
Net cash provided by operating activities	18,777,385			17,740,006
Cash Flows from Investing Activities:
Additions to real estate investments	(7,808,428		)	(16,327,840		)
Proceeds from insurance claims	143,972			143,248
Net cash used in investing activities	(7,664,456		)	(16,184,592		)
Cash Flows from Financing Activities:
Principal payments on mortgage notes payable	(278,140		)	(132,157		)
Borrowings from revolving credit facilities	—			10,000,000
Payments of commissions on sale of common stock	(114,741		)	(117,537		)
Distributions to common stockholders	(11,422,475		)	(10,741,043		)
Repurchase of common stock	(4,886,216		)	(2,477,614		)
Net cash used in financing activities	(16,701,572		)	(3,468,351		)
Net decrease in cash, cash equivalents and restricted cash	(5,588,643		)	(1,912,937		)
Cash, cash equivalents and restricted cash, beginning of the period	38,667,705			38,815,266
Cash, cash equivalents and restricted cash, end of the period	$	33,079,062		$	36,902,329

5

PART I — FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

STEADFAST APARTMENT REIT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(Unaudited)

	Six Months Ended June 30,
	2018			2017
Supplemental Disclosures of Cash Flow Information:
Interest paid	$	18,585,763		$	14,968,071
Supplemental Disclosures of Noncash Flow Transactions:
Decrease in distributions payable	$	(94,302	)	$	(66,389	)
Distributions paid to common stockholders through common stock issuances pursuant to the distribution reinvestment plan	$	11,469,940		$	11,670,654
(Decrease) increase in redeemable common stock	$	(36,397,062	)	$	2,071,096
(Decrease) increase in redemptions payable	$	(631,040	)	$	309,371
Decrease in accounts payable and accrued liabilities from additions to real estate investments	$	(1,343,261	)	$	(1,606,909	)
Decrease in due to affiliates from additions to real estate investments	$	(93,733	)	$	(138,176	)
Decrease in due to affiliates for commissions on sale of common stock	$	(147,155	)	$	(117,537	)

See accompanying notes to consolidated financial statements.

6

PART I — FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

STEADFAST APARTMENT REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2018

(unaudited)

1.Organization and Business

Steadfast Apartment REIT, Inc. (the “Company”) was formed on August 22, 2013, as a Maryland corporation that elected to qualify as a real estate investment trust (“REIT”) commencing with the taxable year ended December 31, 2014. On September 3, 2013, the Company was initially capitalized with the sale of 13,500 shares of common stock to Steadfast REIT Investments, LLC (the “Sponsor”) at a purchase price of $15.00 per share for an aggregate purchase price of $202,500. Steadfast Apartment Advisor, LLC (the “Advisor”), a Delaware limited liability company formed on August 22, 2013, invested $1,000 in the Company in exchange for 1,000 shares of non-participating, non-voting convertible stock (the “Convertible Stock”) as described in Note 6 (Stockholders’ Equity).

The Company owns and operates a diverse portfolio of multifamily properties located in targeted markets throughout the United States. As of June 30, 2018, the Company owned 34 multifamily properties comprising a total of 11,601 apartment homes. For more information on the Company’s real estate portfolio, see Note 3 (Real Estate).

Public Offering

On December 30, 2013, the Company commenced its initial public offering to offer a maximum of 66,666,667 shares of common stock for sale to the public at an initial price of $15.00 per share (with discounts available for certain categories of purchasers) (the “Primary Offering”). The Company also registered up to 7,017,544 shares of common stock for sale pursuant to the Company’s distribution reinvestment plan (the “DRP,” and together with the Primary Offering, the “Public Offering”) at an initial price of $14.25 per share. The Company terminated its Public Offering on March 24, 2016, but continues to offer shares of common stock pursuant to the DRP. As of the termination of the Public Offering, the Company had sold 48,625,651 shares of common stock in the Public Offering for gross proceeds of $724,849,631, including 1,011,561 shares of common stock issued pursuant to the DRP for gross offering proceeds of $14,414,752. As of June 30, 2018, the Company had issued 52,180,957 shares of common stock for gross offering proceeds of $777,095,941, including 4,566,930 shares of common stock issued pursuant to the DRP for gross offering proceeds of $66,661,062.

On March 24, 2016, the Company’s board of directors determined an estimated value per share of the Company’s common stock of $14.46 as of December 31, 2015. On February 14, 2017, the Company’s board of directors determined an estimated value per share of the Company’s common stock of $14.85 as of December 31, 2016. On March 14, 2018, the Company’s board of directors determined an estimated value per share of the Company’s common stock of $15.18 as of December 31, 2017. In connection with the determination of an estimated value per share, the Company’s board of directors determined a price per share for the DRP of $14.46, $14.85 and $15.18, effective May 1, 2016, March 1, 2017 and April 1, 2018, respectively. The Company’s board of directors may again, from time to time, in its sole discretion, change the price at which the Company offers shares pursuant to the DRP to reflect changes in the Company’s estimated value per share and other factors that the Company’s board of directors deems relevant. 

The business of the Company is externally managed by the Advisor, pursuant to the Advisory Agreement dated December 13, 2013, by and among the Company, Steadfast Apartment REIT Operating Partnership, L.P. (the “Operating Partnership”) and the Advisor (as amended, the “Advisory Agreement”). The Advisory Agreement is subject to annual renewal by the Company’s board of directors. The current term of the Advisory Agreement expires on December 13, 2018. Subject to certain restrictions and limitations, the Advisor manages the Company’s day-to-day operations, manages the Company’s portfolio of properties and real estate-related assets, sources and presents investment opportunities to the Company’s board of directors and provides investment management services on the Company’s behalf. The Advisor has also entered into an Advisory Services Agreement with Crossroads Capital Advisors, LLC (“Crossroads Capital Advisors”), whereby Crossroads Capital Advisors provides certain advisory services to the Company on behalf of the Advisor. The Company retained Stira Capital Markets Group, LLC (formerly known as Steadfast Capital Markets Group, LLC) (the “Dealer Manager”), an affiliate of the Sponsor, to serve as the dealer manager for the Public Offering. The Dealer Manager was responsible for marketing the

7

PART I — FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

STEADFAST APARTMENT REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2018

(unaudited)

Company’s shares of common stock offered pursuant to the Public Offering. The Advisor, along with the Dealer Manager, provides offering services, marketing, investor relations and other administrative services on the Company’s behalf. 

Substantially all of the Company’s business is conducted through the Operating Partnership. The Company is the sole general partner of the Operating Partnership. The Company and Steadfast Apartment REIT Limited Partner, LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Company, entered into a Limited Partnership Agreement (the “Partnership Agreement”) on September 3, 2013.

As the Company accepted subscriptions for shares of its common stock, the Company transferred substantially all of the net offering proceeds from its Public Offering to the Operating Partnership as a contribution in exchange for partnership interests and the Company’s percentage ownership in the Operating Partnership increased proportionately. The Partnership Agreement provides that the Operating Partnership is operated in a manner that will enable the Company to (1) satisfy the requirements for being classified as a REIT for tax purposes, (2) avoid any federal income or excise tax liability and (3) ensure that the Operating Partnership will not be classified as a “publicly traded partnership” for purposes of Section 7704 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), which classification could result in the Operating Partnership being taxed as a corporation. In addition to the administrative and operating costs and expenses incurred by the Operating Partnership in acquiring and operating real properties, the Operating Partnership pays all of the Company’s administrative costs and expenses, and such expenses are treated as expenses of the Operating Partnership.

The Company commenced its real estate operations on May 22, 2014, upon acquiring a fee simple interest in a multifamily property located in Spring Hill, Tennessee.

2.Summary of Significant Accounting Policies

There have been no significant changes to the Company’s accounting policies since it filed its audited financial statements in its Annual Report on Form 10-K for the year ended December 31, 2017, other than the adoption of Accounting Standards Update (“ASU”) 2016-18, as further described below. For further information about the Company’s accounting policies, refer to the Company’s consolidated financial statements and notes thereto for the year ended December 31, 2017, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 16, 2018. 

Principles of Consolidation and Basis of Presentation

The consolidated financial statements include the accounts of the Company, the Operating Partnership and its subsidiaries. All significant intercompany balances and transactions are eliminated in consolidation. The financial statements of the Company’s subsidiaries are prepared using accounting policies consistent with those of the Company.

The accompanying unaudited consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information as contained within the Financial Accounting Standards Board (“FASB”), Accounting Standards Codification (“ASC”) and the rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by GAAP for audited financial statements. In the opinion of management, the financial statements for the unaudited interim periods presented include all adjustments that are of a normal and recurring nature and necessary for a fair and consistent presentation of the results of such periods. Operating results for the three and six months endedJune 30, 2018, are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. The unaudited consolidated financial statements herein should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.

8

PART I — FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

STEADFAST APARTMENT REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2018

(unaudited)

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates.

Fair Value Measurements

Under GAAP, the Company is required to measure certain financial instruments at fair value on a recurring basis. In addition, the Company is required to measure other assets and liabilities at fair value on a non-recurring basis (e.g., carrying value of impaired real estate loans receivable and long-lived assets). Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The GAAP fair value framework uses a three-tiered approach. Fair value measurements are classified and disclosed in one of the following three categories:

• Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities;

• Level 2: quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and

• Level 3: prices or valuation techniques where little or no market data is available that requires inputs that are both significant to the fair value measurement and unobservable.

When available, the Company utilizes quoted market prices from an independent third-party source to determine fair value and will classify such items in Level 1 or Level 2. In instances where the market is not active, regardless of the availability of a nonbinding quoted market price, observable inputs might not be relevant and could require the Company to make a significant adjustment to derive a fair value measurement. Additionally, in an inactive market, a market price quoted from an independent third party may rely more on models with inputs based on information available only to that independent third party. When the Company determines the market for a financial instrument owned by the Company to be illiquid or when market transactions for similar instruments do not appear orderly, the Company uses several valuation sources (including internal valuations, discounted cash flow analysis and quoted market prices) and will establish a fair value by assigning weights to the various valuation sources.

The following describes the valuation methodologies used by the Company to measure fair value, including an indication of the level in the fair value hierarchy in which each asset or liability is generally classified.

Interest rate cap agreements - The Company has entered into certain interest rate cap agreements. These derivatives are recorded at fair value. Fair value was based on a model-driven valuation using the associated variable rate curve and an implied market volatility, both of which were observable at commonly quoted intervals for the full term of the interest rate cap agreements. Therefore, the Company’s interest rate cap agreements were classified within Level 2 of the fair value hierarchy and are included in other assets in the accompanying consolidated balance sheets. Changes in the fair value of the interest rate cap agreements are recorded as interest expense in the accompanying consolidated statements of operations.

9

PART I — FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

STEADFAST APARTMENT REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2018

(unaudited)

The following tables reflect the Company’s assets required to be measured at fair value on a recurring basis on the consolidated balance sheets:

	June 30, 2018
	Fair Value Measurements Using
	Level 1		Level 2		Level 3
Assets:
Interest rate cap agreements	$	—	$	926,303	$	—

	December 31, 2017
	Fair Value Measurements Using
	Level 1		Level 2		Level 3
Assets:
Interest rate cap agreements	$	—	$	347,409	$	—

Changes in assumptions or estimation methodologies can have a material effect on these estimated fair values. In this regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, may not be realized in an immediate settlement of the instrument.

Fair Value of Financial Instruments

The accompanying consolidated balance sheets include the following financial instruments: cash and cash equivalents, restricted cash, rents and other receivables, accounts payable and accrued liabilities, distributions payable, due to affiliates and notes payable.

The Company considers the carrying value of cash and cash equivalents, restricted cash, rents and other receivables, accounts payable and accrued liabilities and distributions payable to approximate the fair value of these financial instruments based on the short duration between origination of the instruments and their expected realization. The fair value of amounts due to affiliates is not determinable due to the related party nature of such amounts. The Company has determined that its notes payable, net are classified as Level 3 within the fair value hierarchy.

The fair value of the notes payable, net is estimated using a discounted cash flow analysis using borrowing rates available to the Company for debt instruments with similar terms and maturities. As of June 30, 2018 and December 31, 2017, the fair value of the notes payable was $1,009,694,569 and $1,011,004,179, respectively, compared to the carrying value of $993,798,455 and $993,405,862, respectively.

Distribution Policy

The Company elected to be taxed as, and currently qualifies as, a REIT commencing with the taxable year ended December 31, 2014. To maintain its qualification as a REIT, the Company intends to make distributions each taxable year equal to at least 90% of its REIT taxable income (which is determined without regard to the dividends-paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP). Distributions declared during the six months ended June 30, 2018, were based on daily record dates and calculated at a rate of $0.002466 per share per day during the period from January 1, 2018 through June 30, 2018.

Distributions to stockholders are determined by the board of directors of the Company and are dependent upon a number of factors relating to the Company, including funds available for the payment of distributions, financial condition, the timing of property acquisitions, capital expenditure requirements and annual distribution requirements in order for the Company to qualify as a REIT under the Internal Revenue Code. During the three and six months endedJune 30, 2018, the Company

10

PART I — FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

STEADFAST APARTMENT REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2018

(unaudited)

declared distributions totaling $0.224 and $0.446 per share of common stock, respectively. During the three and six months endedJune 30, 2017, the Company declared distributions totaling $0.224 and $0.446 per share of common stock, respectively.

Per Share Data

Basic loss per share attributable to common stockholders for all periods presented are computed by dividing net loss by the weighted average number of shares of the Company’s common stock outstanding during the period. Diluted loss per share is computed based on the weighted average number of shares of the Company’s common stock and all potentially dilutive securities, if any. Distributions declared per common share assume each share was issued and outstanding each day during the period. Nonvested shares of the Company’s restricted common stock and convertible stock give rise to potentially dilutive shares of the Company’s common stock but such shares were excluded from the computation of diluted earnings per share because such shares were anti-dilutive during the period.

Segment Disclosure

The Company has determined that it has one reportable segment with activities related to investing in multifamily properties. The Company’s investments in real estate are in different geographic regions, and management evaluates operating performance on an individual asset level. However, as each of the Company’s assets has similar economic characteristics, tenants and products and services, its assets have been aggregated into one reportable segment.

Reclassifications

Certain amounts in the Company’s prior period consolidated unaudited financial statements were reclassified to conform to the current period presentation. These reclassifications did not change the results of operations of prior periods. On January 1, 2018, the Company adopted ASU 2016-18, as further described below. As a result, the Company no longer presents transfers between cash and restricted cash in the consolidated statements of cash flows. Instead, restricted cash is included with cash and cash equivalents when reconciling the beginning of the period and end of the period total amounts shown on the consolidated statements of cash flows.

Recent Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). ASU 2014-09 requires an entity to recognize the revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. ASU 2014-09 supersedes the revenue requirements in Revenue Recognition (Topic 605) and most industry-specific guidance throughout the Industry Topics of the Codification. ASU 2014-09 does not apply to lease contracts within the scope of Leases (Topic 840). In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606), which delayed the effective date of ASU 2014-09 by one year, which will result in ASU 2014-09 being effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and is to be applied retrospectively. Early adoption is permitted, but can be no earlier than the original public entity effective date of fiscal years, and interim periods within those years, beginning after December 15, 2016. The Company selected the modified retrospective transition method with a cumulative effect recognized as of the date of adoption and adopted ASU 2014-09 effective January 1, 2018. The Company identified limited sources of revenues from non-lease components, and the Company did not experience a material impact on its revenue recognition in the consolidated financial statements upon adoption. Additionally, there was no impact to the Company’s recognition of rental revenue, as rental revenue from leasing arrangements was specifically excluded from ASU 2014-09.

In February 2016, the FASB issued ASU 2016-02, Leases (“ASU 2016-02”), amending the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU 2016-02 requires a modified retrospective transition approach. ASU 2016-02 will be effective in the first quarter of 2019 and allows for early adoption. The Company is evaluating the impact of ASU 2016-02 on its leases both as it relates to the Company acting as a lessor and as a lessee. Based on the preliminary results of its evaluation, as it relates to the

11

PART I — FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

STEADFAST APARTMENT REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2018

(unaudited)

former, the Company does not expect any material impact on the recognition of leases in the consolidated financial statements because under ASU 2016-02, lessors will continue to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases, and operating leases. As it relates to the latter, the Company does not expect a material impact on the recognition of leases in the consolidated financial statements because the quantity of leased equipment by the Company is limited. The Company is finalizing its evaluation of ASU 2016-02 and plans to adopt ASU 2016-02 on January 1, 2019.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230), Restricted Cash (“ASU 2016-18”), thatrequires that a statement of cash flows explains the change during the period in the total of cash, cash equivalents, restricted cash and restricted cash equivalents. Therefore, amounts generally described as restricted cash should be included with cash and cash equivalents when reconciling the beginning of period and end of period total amounts shown on the statement of cash flows. ASU 2016-18 is effective for annual periods beginning after December 15, 2017, and interim periods within those years. Early adoption is permitted. The Company adopted ASU 2016-18 on January 1, 2018 and applied it retrospectively. As a result of adopting ASU 2016-18, the Company began presenting restricted cash along with cash and cash equivalents in its consolidated statements of cash flows.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805)(“ASU 2017-01”): Clarifying the definition of business, that clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of businesses. ASU 2017-01 provides a screen to determine when a set is not a business. If the screen is not met, it (1) requires that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and (2) removes the evaluation of whether a market participant could replace the missing elements. ASU 2017-01 is effective for annual reporting periods beginning after December 15, 2017, and interim periods within those years. Early adoption is permitted. The Company adopted ASU 2017-01 as of January 1, 2017. The Company did not experience a material impact from adopting ASU 2017-01.

In February 2017, the FASB issued ASU 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (“Subtopic 610-20”): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets (“ASU 2017-05”), that clarifies that a financial asset is within the scope of Subtopic 610-20 if it meets the definition of an in substance nonfinancial asset and defines the term in substance nonfinancial asset. ASU 2017-05 also clarifies that nonfinancial assets within the scope of Subtopic 610-20 may include nonfinancial assets transferred within a legal entity to a counterparty. Subtopic 610-20, which was issued in May 2014 as part of ASU 2014-09 (discussed above), provides guidance for recognizing gains and losses from the transfer of nonfinancial assets in contracts with noncustomers. An entity is required to apply amendments in ASU 2017-05 at the same time it applies the amendments in ASU 2014-09. ASU 2017-05 requires retrospective application and is effective for fiscal years beginning after December 15, 2017, including interim reporting periods within those fiscal years. The Company adopted ASU 2017-05 on January 1, 2018. The Company did not experience a material impact from adopting ASU 2017-05.

In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting (“ASU 2017-09”). The FASB issued ASU 2017-09 to provide clarity and reduce both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, Compensation - Stock Compensation, to a change to the terms or conditions of a share-based payment award. The amendments in ASU 2017-09 provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. ASU 2017-09 requires prospective application and is effective for annual periods beginning after December 15, 2017, including interim periods within those fiscal years. The Company adopted ASU 2017-09 on January 1, 2018. The Company did not experience a material impact from adopting ASU 2017-09.

In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements (“ASU 2018-11”). The FASB issued ASU 2018-11 to clarify ASU 2016-02. The amendments in ASU 2018-11 provide entities with an additional (and optional) transition method to adopt the new leases standard. Under this new transition method, an entity initially applies ASU 2016-02 at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the

12

PART I — FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

STEADFAST APARTMENT REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2018

(unaudited)

period of adoption. ASU 2018-11 also provides lessors with a practical expedient, by class of underlying asset, to not separate nonlease components from the associated lease component and, instead, to account for those components as a single component if the nonlease components otherwise would be accounted for under the new revenue guidance (Topic 606) and both of the following are met: (1) the timing and pattern of transfer of the nonlease components and associated lease componentare the same, and (2) the lease component, if accounted for separately, would be classified as an operating lease. If the nonlease components associated with the lease component are the predominant component of the combined component, an entity is required to account for the combined component in accordance with Topic 606. Otherwise, the entity must account for the combined component as an operating lease in accordance with Topic 842. For entities that have not adopted Topic 842 before the issuance of ASU 2018-11, the effective date and transition requirements for ASU 2018-11 related to separating components of a contract are the same as the effective date and transition requirements in ASU 2016-02.

3.Real Estate

As of June 30, 2018, the Company owned 34 multifamily properties comprising a total of 11,601 apartment homes. The total contract acquisition price of the Company’s real estate portfolio was $1,499,381,750. As of June 30, 2018 and December 31, 2017, the Company’s portfolio was approximately 94.4% and 93.1% occupied and the average monthly rent was $1,153 and $1,137, respectively.

As of June 30, 2018 and December 31, 2017, accumulated depreciation and amortization related to the Company’s consolidated real estate properties were as follows:

	June 30, 2018
	Assets
	Land		Building and Improvements			Total Real Estate
Investments in real estate	$	164,113,072	$	1,400,950,596		$	1,565,063,668
Less: Accumulated depreciation and amortization	—		(182,779,645		)	(182,779,645		)
Net investments in real estate and related lease intangibles	$	164,113,072	$	1,218,170,951		$	1,382,284,023

	December 31, 2017
	Assets
	Land		Building and Improvements			Total Real Estate
Investments in real estate	$	164,113,072	$	1,394,779,659		$	1,558,892,731
Less: Accumulated depreciation and amortization	—		(147,726,630		)	(147,726,630		)
Net investments in real estate and related lease intangibles	$	164,113,072	$	1,247,053,029		$	1,411,166,101

Depreciation and amortization expense was $17,629,793 and $35,065,143 for the three and six months endedJune 30, 2018, and $16,725,862 and $34,124,387 for the three and six months endedJune 30, 2017, respectively.

Depreciation of the Company’s buildings and improvements was $17,629,793 and $35,065,143 for the three and six months endedJune 30, 2018, and $16,725,862 and $33,114,275 for the three and six months endedJune 30, 2017, respectively.

No amortization of the Company’s tenant origination and absorption costs was recognized for the three and six months endedJune 30, 2018. Amortization of the Company’s tenant origination and absorption costs was $0 and $1,010,112 for the three and six months endedJune 30, 2017. Tenant origination and absorption costs had a weighted-average amortization period

13

PART I — FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

STEADFAST APARTMENT REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2018

(unaudited)

as of the date of acquisition of less than one year. As of March 31, 2017, all tenant origination and absorption costs were fully amortized and written off.

Operating Leases

As of June 30, 2018, the Company’s real estate portfolio comprised 11,601 residential apartment homes and was 96.6% leased by a diverse group of residents. The residential lease terms consist of lease durations equal to twelve months or less.

Some residential leases contain provisions to extend the lease agreements, options for early termination after paying a specified penalty and other terms and conditions as negotiated. The Company retains substantially all of the risks and benefits of ownership of the real estate assets leased to tenants. Generally, upon the execution of a lease, the Company requires security deposits from tenants in the form of a cash deposit. Amounts required as security deposits vary depending upon the terms of the respective leases and the creditworthiness of the tenant, but generally are not significant amounts. Therefore, exposure to credit risk exists to the extent that a receivable from a tenant exceeds the amount of its security deposit. Security deposits received in cash related to tenant leases are included in accounts payables and accrued liabilities in the accompanying consolidated balance sheets and totaled $3,928,861 and $3,613,649 as of June 30, 2018 and December 31, 2017, respectively.

As of June 30, 2018 and 2017, no tenant represented over 10% of the Company’s annualized base rent.

4.Other Assets

As of June 30, 2018 and December 31, 2017, other assets consisted of:

	June 30, 2018		December 31, 2017
Prepaid expenses	$	480,347	$	1,411,353
Interest rate cap agreements	926,303		347,409
Other deposits	2,774,141		1,053,424
Other assets	$	4,180,791	$	2,812,186

14

PART I — FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

STEADFAST APARTMENT REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2018

(unaudited)

5.Debt

Mortgage Notes Payable

The following is a summary of mortgage notes payable, net secured by real property as of June 30, 2018 and December 31, 2017.

	June 30, 2018
			Interest Rate Range				Weighted Average Interest Rate
Type	Number of Instruments	Maturity Date Range	Minimum		Maximum			Principal Outstanding
Variable rate(1)	29	12/1/2021 - 9/1/2026	1-Mo LIBOR + 1.61%		1-Mo LIBOR + 2.48%		4.11%	$	888,205,584
Fixed rate	2	7/1/2025 - 5/1/2054	4.34	%	4.60	%	4.51%	67,685,572
Mortgage notes payable, gross	31						4.12%	955,891,156
Discount, net(2)								(2,098,347		)
Deferred financing costs, net(3)								(4,896,188		)
Mortgage notes payable, net								$	948,896,621

	December 31, 2017
			Interest Rate Range				Weighted Average Interest Rate
Type	Number of Instruments	Maturity Date Range	Minimum		Maximum			Principal Outstanding
Variable rate(1)	29	12/1/2021 - 9/1/2026	1-Mo LIBOR + 1.61%		1-Mo LIBOR + 2.48%		3.58%	$	888,345,717
Fixed rate	2	7/1/2025 - 5/1/2054	4.34	%	4.60	%	4.51%	67,823,579
Mortgage notes payable, gross	31						3.63%	956,169,296
Discount, net(2)								(2,275,838		)
Deferred financing costs, net(3)								(5,336,384		)
Mortgage notes payable, net								$	948,557,074

___________

(1) See Note 10 (Derivative Financial Instruments) for a discussion of the interest rate cap agreements used to manage the exposure to interest rate movement on the Company’s variable rate loans.

(2) Accumulated amortization related to the debt discount as of June 30, 2018 and December 31, 2017 was $623,192 and $445,701, respectively.

(3) Accumulated amortization related to deferred financing costs as of June 30, 2018 and December 31, 2017 was $2,674,851 and $2,234,655, respectively.

15

PART I — FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

STEADFAST APARTMENT REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2018

(unaudited)

Refinancing Transactions

On November 29, 2017, threeof the Company’s wholly-owned subsidiaries refinanced their existing loans under the Company’s revolving credit facility for an aggregate principal amount of $93,825,000 and entered into new loan agreements (each a “Tranche 1 Loan Agreement”), with PNC Bank, National Association (“PNC Bank”) for an aggregate principal amount of $100,752,000, (the “November Refinancing Transactions”). Additionally, on December 29, 2017, another three of the Company’s wholly-owned subsidiaries refinanced their existing loans under the revolving credit facility for an aggregate principal amount of $92,475,000 and entered into new loan agreements (each a “Tranche 2 Loan Agreement” and, together with the Tranche 1 Loan Agreement, the “Loan Agreements”) with PNC Bank for an aggregate principal amount of $97,080,000, (the “December Refinancing Transactions,” and, together with the November Refinancing Transactions, the “Refinancing Transactions”).

In the Refinancing Transactions, each Loan Agreement was made pursuant to the Freddie Mac Capital Markets Execution Program (“CME”), as evidenced by a multifamily note. Pursuant to the CME, PNC Bank originates the mortgage loan and then transfers the loan to the Federal Home Loan Mortgage Corporation (“Freddie Mac”). Each Loan Agreement refinanced in November and December provides for a term loan with a maturity of December 1, 2024 or January 1, 2025, respectively, unless the maturity date is accelerated in accordance with its terms. Each loan refinanced in November and December accrues interest at the one-month London Interbank Offered Rate (“LIBOR”) plus 1.94% or 1.88%, respectively. The entire outstanding principal balance and any accrued and unpaid interest on each of the loans are due on the maturity date. Interest and principal payments on the loans are payable monthly in arrears on specified dates as set forth in each loan agreement. Monthly payments are due and payable on the first day of each month commencing on January 1, or February 1, 2018, as applicable.

Revolving Credit Facility

On August 26, 2015, the Company entered into a revolving credit facility (the “Credit Facility”) with PNC Bank, in an amount not to exceed $200,000,000, which provided for advances to purchase properties or refinance existing properties from time to time (subject to certain debt service and loan to value requirements). The Credit Facility had a maturity date of September 1, 2020, subject to extension (the “Maturity Date”). The maximum amount available to be drawn under the Credit Facility could have been increased up to $350,000,000 at any time during the period from January 1, 2016 to 12 months prior to the Maturity Date, as further described in the Credit Agreement (the “Credit Agreement”) entered into by certain of the Company’s wholly-owned subsidiaries with PNC Bank in connection with property acquisitions. For each advance drawn under the Credit Facility, an Addition Fee, as defined in the Credit Agreement, was incurred. Advances made under the Credit Facility were secured by the property for which such advances were used (each a “Loan” and collectively the “Loans”), as evidenced by the Credit Agreement, Multifamily Loan and Security Agreement (the “Loan and Security Agreement”), the Multifamily Revolving Credit Note (the “Note”) and a Multifamily Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing (the “Mortgage”) and a Guaranty from the Company (the “Guaranty,” together with the Credit Agreement, the Loan and Security Agreement, the Note and the Mortgage, the “Loan Documents”). Each Loan was purchased from PNC Bank by Freddie Mac. As of June 30, 2018, the Company had no outstanding balance under the Credit Facility. The Company is in the process of terminating the Credit Facility.

Interest on the outstanding principal balances of the Loans accrued at the one-month LIBOR plus (1) the servicing spread of 0.05% and (2) the net spread, based on the debt service coverage ratio, of between 1.80% and 2.10%, as further described in the applicable Notes. Monthly interest payments were due and payable on the first day of each month until the Maturity Date. The entire outstanding principal balance and any accrued and unpaid interest on the Loans were due and payable in full on the Maturity Date. In addition to monthly interest payments, an unused commitment fee equal to 0.1% of the average daily difference between (1) the amount outstanding and (2) the maximum facility available was due and payable monthly. Additionally, an unused capacity fee equal to 1.0% of the average daily difference between the amount of the (1) maximum facility available and (2) the outstanding borrowing tranches, each as defined in the Credit Agreement, was due and payable monthly. Upon the second anniversary of each advance pursuant to the Credit Facility, a seasoning fee equal to 0.25% of such advance was due and payable monthly. The seasoning fee would increase by 0.25% on each subsequent anniversary until the Maturity Date.

16

PART I — FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

STEADFAST APARTMENT REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2018

(unaudited)

Revolving Line of Credit

On May 18, 2016, the Company entered into a line of credit facility (the “Line of Credit”) with PNC Bank in an amount not to exceed $65,000,000. The Line of Credit provides for advances (each, an “LOC Loan” and collectively, the “LOC Loans”) solely for the purpose of financing the costs in connection with acquisitions and development of real estate projects and for general corporate purposes (subject to certain debt service and loan to value requirements). The Line of Credit has a maturity date of May 17, 2019, subject to extension (the “LOC Maturity Date”), as further described in the loan agreement (the “LOC Loan Agreement”) entered into by certain of the Company’s wholly-owned subsidiaries with PNC Bank in connection with the acquisition of the Landings of Brentwood Property (the “Mortgaged Property”). Advances made under the Line of Credit are secured by the Mortgaged Property, as evidenced by the LOC Loan Agreement, the Revolving Credit Loan Note (the “LOC Note”), the Deed of Trust and a Guaranty from the Company (the “LOC Guaranty,” together with the LOC Loan Agreement and the LOC Note, the “LOC Loan Documents”).

The Company has the option to select the interest rate in respect of the outstanding unpaid principal amount of the LOC Loans from the following options (the “Interest Rate Options”): (1) the sum of the Base Rate (as defined in the LOC Loan Agreement) plus 0.60%, or (2) a rate per annum fixed for the applicable LIBOR Interest Period (as defined in the LOC Loan Agreement) equal to the sum of LIBOR plus 1.60%. The Company may select different Interest Rate Options and different LIBOR Interest Periods to apply simultaneously to the LOC Loans comprising of different Borrowing Tranches (as defined in the LOC Loan Agreement) and may convert to or renew one or more Interest Rate Options with respect to all or any portion of the LOC Loans comprising any borrowing tranche provided that there may not be at any time outstanding more than eight borrowing tranches. Monthly interest payments are due and payable in arrears on the first day of each month and on the LOC Maturity Date. The entire outstanding principal balance and any accrued and unpaid interest on the LOC Loans are due and payable in full on the LOC Maturity Date. As of June 30, 2018, the interest rate on the LOC Loans was 3.69%. In addition to monthly interest payments, the Company will pay PNC Bank a non-refundable commitment fee equal to (a) the average daily difference between (i) the maximum principal amount of the LOC Loans minus (ii) the aggregate outstanding principal amount of all advances multiplied by (b) 0.15%. The commitment fee shall be payable in arrears on the first day of each calendar quarter until the LOC Maturity Date.

As of June 30, 2018 and December 31, 2017, the advances obtained and certain financing costs incurred under the Line of Credit, which is included in revolving credit facilities, net, in the accompanying consolidated balance sheets, are summarized in the following table.

	Amount of Advance as of
	June 30, 2018			December 31, 2017
Principal balance on revolving line of credit, gross(1)	$	45,000,000		$	45,000,000
Deferred financing costs, neton revolving line of credit(2)	(98,167		)	(151,212		)
Revolving credit facilities, net	$	44,901,833		$	44,848,788

___________

(1) Landings of Brentwood is pledged as collateral for repayment of amounts advanced under the Line of Credit.

(2) Accumulated amortization related to deferred financing costs in respect of the Line of Credit as of June 30, 2018 and December 31, 2017, was $226,833 and $173,788, respectively.

17

PART I — FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

STEADFAST APARTMENT REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2018

(unaudited)

Maturity and Interest

The following is a summary of the Company’s aggregate maturities as of June 30, 2018:

					Maturities During the Years Ending December 31,
Contractual Obligations	Total		Remainder of 2018		2019		2020		2021		2022		Thereafter
Principal payments on outstanding debt (1)	$	1,000,891,156	$	2,002,471	$	49,892,887	$	8,291,825	$	49,620,891	$	61,398,874	$	829,684,208

______________

(1) Projected principal payments on outstanding debt obligations are based on the terms of the notes payable agreements. Amounts exclude the amortization of deferred financing costs and debt discount associated with the notes payable.

The Company’s notes payable contain customary financial and non-financial debt covenants. As of June 30, 2018, the Company was in compliance with all debt covenants.

For the three and six months ended June 30, 2018, the Company incurred interest expense of $10,231,952 and $19,324,835, respectively. Interest expense for the three and six months ended June 30, 2018, includes amortization of deferred financing costs of $246,966 and $493,241, net unrealized gains from the change in fair value of interest rate cap agreements of $131,281 and $578,894, amortization of loan discount of $88,746 and $177,491, and Credit Facility commitment fees of $7,479 and $14,877, respectively.

For the three and six months endedJune 30, 2017, the Company incurred interest expense of $8,417,150 and $16,299,864, respectively. Interest expense for the three and six months endedJune 30, 2017, includes amortization of deferred financing costs of $255,957 and $509,689, net unrealized losses from the change in fair value of interest rate cap agreements of $140,652 and $395,654 and Credit Facility commitment fees of $10,942 and $24,312, respectively.

Interest expense of $3,229,175 and $2,581,941 was payable as of June 30, 2018 and December 31, 2017, respectively, and is included in accounts payable and accrued liabilities in the accompanying consolidated balance sheets.

6.Stockholders’ Equity

General

Under the Company’s Articles of Amendment and Restatement (the “Charter”), the total number of shares of capital stock authorized for issuance is 1,100,000,000 shares, consisting of 999,999,000 shares of common stock with a par value of $0.01 per share, 1,000 shares of convertible stock with a par value of $0.01 per share and 100,000,000 shares designated as preferred stock with a par value of $0.01 per share.

Common Stock

The shares of the Company’s common stock entitle the holders to one vote per share on all matters upon which stockholders are entitled to vote, to receive dividends and other distributions as authorized by the Company’s board of directors in accordance with the Maryland General Corporation Law and to all rights of a stockholder pursuant to the Maryland General Corporation Law. The common stock has no preferences or preemptive, conversion or exchange rights.

On September 3, 2013, the Company issued 13,500 shares of common stock to the Sponsor for $202,500. From inception through March 24, 2016, the date of the termination of the Public Offering, the Company had issued 48,625,651 shares of common stock in its Public Offering for offering proceeds of $640,012,497, including 1,011,561 shares of common stock issued pursuant to the DRP for total proceeds of $14,414,752, net of offering costs of $84,837,134. Following the termination of the Public Offering, the Company continues to offer shares pursuant to the DRP. As of June 30, 2018, the Company had issued

18

PART I — FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

STEADFAST APARTMENT REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2018

(unaudited)

52,180,957 shares of common stock for offering proceeds of $692,258,807, including 4,566,930 shares of common stock issued pursuant to the DRP for total proceeds of $66,661,062, net of offering costs of $84,837,134. The offering costs primarily consisted of selling commissions and dealer manager fees.

As further discussed in Note 8 (Incentive Award Plan and Independent Director Compensation), the shares of restricted common stock vest and become non-forfeitable in four equal annual installments beginning on the date of grant and ending on the third anniversary of the date of grant or will become fully vested and become non-forfeitable on the earlier to occur of (1) the termination of the independent director’s service as a director due to his or her death or disability or (2) a change in control of the Company.

The issuance and vesting activity for the six months endedJune 30, 2018, and year ended December 31, 2017, for the restricted stock issued to the Company’s independent directors as compensation for services in connection with the independent directors’ re-election to the board of directors at the Company’s annual meeting is as follows:

	Six Months Ended June 30, 2018	Year Ended December 31, 2017
Nonvested shares at the beginning of the period	7,497	9,997
Granted shares	—	4,998
Vested shares	—	(7,498	)
Nonvested shares at the end of the period	7,497	7,497

Additionally, the weighted average fair value of restricted common stock issued to the Company’s independent directors for the six months endedJune 30, 2018 and year ended December 31, 2017 is as follows:

Grant Year	Weighted Average Fair Value
2017		$14.85
2018	n/a

Included in general and administrative expenses is $13,839 and $27,678 for the three and six months ended June 30, 2018, and $13,887 and $33,756 for the three and six months endedJune 30, 2017, respectively, for compensation expense related to the issuance of restricted common stock. As of June 30, 2018, the compensation expense related to the issuance of the restricted common stock not yet recognized was $61,329. The weighted average remaining term of the restricted common stock was approximately 0.8 years as of June 30, 2018. As of June 30, 2018, no shares of restricted common stock issued to the independent directors have been forfeited.

Convertible Stock

The Company issued 1,000 shares of Convertible Stock to the Advisor for $1,000. The Convertible Stock will convert into shares of common stock if and when: (A) the Company has made total distributions on the then-outstanding shares of its common stock equal to the original issue price of those shares plus an aggregate 6.0% cumulative, non-compounded, annual return on the original issue price of those shares, (B) the Company lists its common stock for trading on a national securities exchange or (C) the Advisory Agreement is terminated or not renewed (other than for “cause” as defined in the Advisory Agreement). In the event of a termination or non-renewal of the Advisory Agreement for cause, all of the shares of the Convertible Stock will be repurchased for $1.00. In general, each share of Convertible Stock will convert into a number of shares of common stock equal to 1/1000 of the quotient of (A) 15% of the excess of (1) the Company’s “enterprise value” plus the aggregate value of distributions paid to date on the then outstanding shares of the Company’s common stock over (2) the aggregate purchase price paid by stockholders for those outstanding shares of common stock plus an aggregated 6.0% cumulative, non-compounded, annual return on the original issue price of those outstanding shares, divided by (B) the

19

PART I — FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

STEADFAST APARTMENT REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2018

(unaudited)

Company’s enterprise value divided by the number of outstanding shares of common stock on an as-converted basis, in each case calculated as of the date of the conversion.

Preferred Stock

The Charter also provides the Company’s board of directors with the authority to issue one or more classes or series of preferred stock, and prior to the issuance of such shares of preferred stock, the board of directors shall have the power from time to time to classify or reclassify, in one or more series, any unissued shares and designate the preferences, rights and privileges of such shares of preferred stock. The Company’s board of directors is authorized to amend the Charter without the approval of the stockholders to increase the aggregate number of authorized shares of capital stock or the number of shares of any class or series that the Company has authority to issue. As of June 30, 2018 and December 31, 2017, no shares of the Company’s preferred stock were issued and outstanding.

Distribution Reinvestment Plan

The Company’s board of directors has approved the DRP through which common stockholders may elect to reinvest an amount equal to the distributions declared on their shares of common stock in additional shares of the Company’s common stock in lieu of receiving cash distributions. The purchase price per share under the DRP was initially $14.25. On March 14, 2018, February 14, 2017 and March 24, 2016, the Company’s board of directors determined a price per share for the DRP of $15.18, $14.85 and $14.46, effective April 1, 2018, March 1, 2017 and May 1, 2016, respectively, in connection with the determination of an estimated value per share of the Company’s common stock.

The Company’s board of directors may again, in its sole discretion, from time to time, change this price based upon changes in the Company’s estimated value per share and other factors that the Company’s board of directors deems relevant.

No sales commissions or dealer manager fees are payable on shares sold through the DRP. The Company’s board of directors may amend, suspend or terminate the DRP at its discretion at any time upon ten days’ notice to the Company’s stockholders. Following any termination of the DRP, all subsequent distributions to stockholders will be made in cash.

Share Repurchase Plan and Redeemable Common Stock

The Company’s share repurchase plan may provide an opportunity for stockholders to have their shares of common stock repurchased by the Company, subject to certain restrictions and limitations. No shares can be repurchased under the Company’s share repurchase plan until after the first anniversary of the date of purchase of such shares; provided, however, that this holding period shall not apply to repurchases requested within two years after the death or disability of a stockholder.

From March 29, 2016, the date the Company first published an estimated value per share, until April 14, 2018, the purchase price for shares repurchased under the Company’s share repurchase plan was as follows:

Share Purchase Anniversary	Repurchase Price on Repurchase Date(1)
Less than 1 year	No Repurchase Allowed
1 year	92.5% of Estimated Value per Share(4)
2 years	95.0% of Estimated Value per Share(4)
3 years	97.5% of Estimated Value per Share(4)
4 years	100.0% of Estimated Value per Share(4)
In the event of a stockholder’s death or disability(2)	Average Issue Price for Shares(3)

On March 14, 2018, the board of directors of the Company determined to amend the terms of the Company’s share repurchase plan effective as of April 15, 2018 to (1) limit the amount of shares repurchased pursuant to the Company’s share repurchase plan each quarter to $2,000,000 and (2) revise the repurchase price to an amount equal to 93% of the most recently publicly disclosed estimated value per share. Pursuant to the amended share repurchase program, the new share repurchase

20

PART I — FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

STEADFAST APARTMENT REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2018

(unaudited)

price is $14.12 per share, which represents 93% of the estimated value per share of $15.18. The share repurchase price is further reduced based on how long the stockholder has held the shares as follows:

Share Purchase Anniversary	Repurchase Price on Repurchase Date(1)
Less than 1 year	No Repurchase Allowed
1 year	92.5% of the Share Repurchase Price(4)
2 years	95.0% of the Share Repurchase Price(4)
3 years	97.5% of the Share Repurchase Price(4)
4 years	100.0% of the Share Repurchase Price(4)
In the event of a stockholder’s death or disability(2)	Average Issue Price for Shares(3)

________________

(1) As adjusted for any stock dividends, combinations, splits, recapitalizations or any similar transaction with respect to the shares of common stock. Repurchase price includes the full amount paid for each share, including all sales commissions and dealer manager fees.

(2) The required one-year holding period does not apply to repurchases requested within two years after the death or disability of a stockholder.

(3) The purchase price per share for shares repurchased upon the death or disability of a stockholder will be equal to the average issue price per share for all of the stockholder’s shares.

(4) The “Share Repurchase Price” equals 93% of the Estimated Value per Share. The “Estimated Value Per Share” is the most recently publicly disclosed estimated value per share determined by the Company’s board of directors.

The purchase price per share for shares repurchased pursuant to the Company’s share repurchase plan will be further reduced by the aggregate amount of net proceeds per share, if any, distributed to the Company’s stockholders prior to the Repurchase Date (defined below) as a result of the sale of one or more of the Company’s assets that constitutes a return of capital as a result of such sales.

Repurchases of shares of the Company’s common stock are made quarterly upon written request to the Company at least 15 days prior to the end of the applicable quarter. Repurchase requests are honored approximately 30 days following the end of the applicable quarter (“Repurchase Date”). Stockholders may withdraw their repurchase request at any time up to three business days prior to the Repurchase Date. During the three and six months endedJune 30, 2018, the Company repurchased a total of 144,440 and 346,610 shares with a total repurchase value of $2,000,000 and $4,886,216 and received requests for repurchases of 231,575 and 541,527 shares with a total repurchase value of $3,212,937 and $7,475,664, respectively. During the three and six months endedJune 30, 2017, the Company repurchased a total of 102,257 and 178,022 shares with a total repurchase value of $1,424,416 and $2,477,614 and received requests for repurchases of 95,640 and 197,827 shares with a total repurchase value of $1,362,567 and $2,785,983, respectively.

As of June 30, 2018 and June 30, 2017, the Company had 142,393 and 95,640 shares of outstanding and unfulfilled repurchase requests, respectively, and recorded $2,000,000 and $1,362,567 in accounts payable and accrued liabilities on the accompanying consolidated balance sheets related to these unfulfilled repurchase requests, respectively. The Company repurchased the shares of common stock represented by the outstanding repurchase requests as of June 30, 2018 and 2017, of $2,000,000 and $1,362,567 on the July 31, 2018 and July 31, 2017 Repurchase Dates, respectively.

The Company cannot guarantee that the funds set aside for the share repurchase plan will be sufficient to accommodate all repurchase requests made in any quarter. In the event that the Company does not have sufficient funds available to repurchase all of the shares of the Company’s common stock for which repurchase requests have been submitted in any quarter, priority will be given to repurchase requests in the case of the death or disability of a stockholder. If the Company repurchases less than

21

PART I — FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

STEADFAST APARTMENT REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2018

(unaudited)

all of the shares subject to a repurchase request in any quarter, with respect to any shares which have not been repurchased, the Company will treat the shares that have not been repurchased as a request for repurchase in the following quarter pursuant to the limitations of the share repurchase plan and when sufficient funds are available, unless the stockholder withdraws the request for repurchase. Such pending requests will be honored among all requests for repurchases in any given repurchase period as follows: first, pro rata as to repurchases sought upon a stockholder’s death or disability; and, next, pro rata as to other repurchase requests.

The Company is not obligated to repurchase shares of its common stock under the share repurchase plan. The share repurchase plan limits the number of shares to be repurchased in any calendar year to (1) 5% of the weighted average number of shares of common stock outstanding during the prior calendar year and (2) those that could be funded from the net proceeds from the sale of shares under the DRP in the prior calendar year, plus such additional funds as may be reserved for that purpose by the Company’s board of directors. Such sources of funds could include cash on hand, cash available from borrowings and cash from liquidations of securities investments as of the end of the applicable month, to the extent that such funds are not otherwise dedicated to a particular use, such as working capital, cash distributions to stockholders or purchases of real estate assets. The Company’s board of directors has further limited the amount of shares that may be repurchased pursuant to the share repurchase plan to $2,000,000 per quarter. There is no fee in connection with a repurchase of shares of the Company’s common stock pursuant to the Company’s share repurchase plan.

The Company’s board of directors may, in its sole discretion, further amend, suspend or terminate the share repurchase plan at any time upon 30 days’ notice to its stockholders if it determines that the funds available to fund the share repurchase plan are needed for other business or operational purposes or that amendment, suspension or termination of the share repurchase plan is in the best interest of the Company’s stockholders. Therefore, a stockholder may not have the opportunity to make a repurchase request prior to any potential termination of the Company’s share repurchase plan. The share repurchase plan will terminate in the event that a secondary market develops for the Company’s shares of common stock.

Pursuant to the share repurchase plan, for the three and six months endedJune 30, 2018, the Company reclassified $0 and $37,028,102, net of $2,000,000 and $4,886,216 of fulfilled redemption requests, respectively, from temporary equity to permanent equity, which is included as additional paid-in capital on the accompanying consolidated balance sheets. For the three and six months endedJune 30, 2017, the Company reclassified $4,458,910 and $2,071,096, net of $1,424,416 and $2,477,614 of fulfilled redemption requests, respectively, from permanent equity to temporary equity, which is included as redeemable common stock on the accompanying consolidated balance sheets.

Distributions

The Company’s long-term policy is to pay distributions solely from cash flow from operations. However, because the Company may receive income from interest or rents at various times during the Company’s fiscal year and because the Company may need cash flow from operations during a particular period to fund capital expenditures and other expenses, the Company expects that from time to time during the Company’s operational stage, the Company will declare distributions in anticipation of cash flow that the Company expects to receive during a later period, and the Company expects to pay these distributions in advance of its actual receipt of these funds. The Company’s board of directors has the authority under its organizational documents, to the extent permitted by Maryland law, to fund distributions from sources such as borrowings, offering proceeds or advances and the deferral of fees and expense reimbursements by the Advisor, in its sole discretion. The Company has not established a limit on the amount of proceeds it may use to fund distributions from sources other than cash flow from operations. If the Company pays distributions from sources other than cash flow from operations, the Company will have fewer funds available and stockholders’ overall return on their investment in the Company may be reduced.

To maintain the Company’s qualification as a REIT, the Company must make aggregate annual distributions to its stockholders of at least 90% of its REIT taxable income (which is computed without regard to the dividends-paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP). If the Company meets the REIT qualification requirements, the Company generally will not be subject to federal income tax on the income that the Company distributes to its stockholders each year.

22

PART I — FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

STEADFAST APARTMENT REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2018

(unaudited)

Distributions Declared

The Company’s board of directors approved a cash distribution that accrued at a rate of $0.002466 per day for each share of the Company’s common stock during the three and six months endedJune 30, 2018, which, if paid over a 365-day period is equivalent to a 6.0% annualized distribution rate based on a purchase price of $15.00 per share of the Company’s common stock. During the three and six months endedJune 30, 2017, a cash distribution accrued at a rate of $0.002466 per day for each share, which, if paid over a 365-day period, is equivalent to a 6.0% annualized distribution rate based on a purchase price of $15.00 per share of the Company’s common stock. The distributions declared accrue daily to stockholders of record as of the close of business on each day and are payable in cumulative amounts on or before the third day of each calendar month with respect to the prior month. There is no guarantee that the Company will continue to pay distributions at this rate or at all.

Distributions declared for the three and six months endedJune 30, 2018, were $11,485,650 and $22,798,113, including $5,698,302 and $11,369,398, or 375,382 and 757,274 shares of common stock, respectively, attributable to the DRP.

Distributions declared for the three and six months endedJune 30, 2017 were $11,267,096 and $22,345,308, including $5,825,338 and $11,599,095, or 392,278 and 784,708 shares of common stock, respectively, attributable to the DRP.

As of June 30, 2018 and December 31, 2017, $3,792,428 and $3,886,730 of distributions declared were payable, which included $1,870,368 and $1,970,910, or 123,213 shares and 132,721 shares of common stock, attributable to the DRP, respectively.

Distributions Paid

For the three and six months endedJune 30, 2018, the Company paid cash distributions of $5,824,954 and $11,422,475, which related to distributions declared for each day in the period from March 1, 2018 through May 31, 2018 and December 1, 2017 through May 31, 2018, respectively. Additionally, for the three and six months endedJune 30, 2018, 382,875 shares and 766,783 shares of common stock were issued pursuant to the DRP for gross offering proceeds of $5,768,910 and $11,469,940, respectively. For the three and six months endedJune 30, 2018, the Company paid total distributions of $11,593,864 and $22,892,415, respectively.

For the three and six months endedJune 30, 2017, the Company paid cash distributions of $5,485,359 and $10,741,043, which related to distributions declared for each day in the period from March 1, 2017 through May 31, 2017 and December 1, 2016 through May 31, 2017, respectively. Additionally, for the three and six months endedJune 30, 2017, 396,184 shares and 793,146 shares of common stock were issued pursuant to the DRP for gross offering proceeds of $5,883,326 and $11,670,654, respectively. For the three and six months endedJune 30, 2017, the Company paid total distributions of $11,368,685 and $22,411,697, respectively.

7.Related Party Arrangements

The Company has entered into the Advisory Agreement with the Advisor and a Dealer Manager Agreement with the Dealer Manager. Pursuant to the Advisory Agreement and Dealer Manager Agreement, the Company is or was obligated to pay the Advisor and the Dealer Manager specified fees upon the provision of certain services related to the Public Offering, the investment of funds in real estate and real estate-related investments and the management of the Company’s investments and for other services (including, but not limited to, the disposition of investments). Subject to the limitations described below, the Company is also obligated to reimburse the Advisor and its affiliates for organization and offering costs incurred by the Advisor and its affiliates on behalf of the Company, as well as acquisition and origination expenses and certain operating expenses incurred on behalf of the Company or incurred in connection with providing services to the Company.

23

PART I — FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

STEADFAST APARTMENT REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2018

(unaudited)

Amounts attributable to the Advisor and its affiliates incurred for the three and six months endedJune 30, 2018 and 2017, and amounts attributable to the Advisor and its affiliates that are payable (prepaid) as of June 30, 2018 and December 31, 2017, are as follows:

	Incurred For the					Incurred For the					Payable (prepaid) as of
	Three Months Ended June 30,					Six Months Ended June 30,
	2018		2017			2018		2017			June 30, 2018		December 31, 2017
Consolidated Statements of Operations:
Expensed
Investment management fees(1)	$	4,281,765	$	4,224,789		$	8,544,018	$	8,424,929		$	1,212	$	—
Acquisition expenses(2)	—		(1,185		)	—		—			—		—
Loan coordination fees(1)	—		—			—		—			—		728,100
Property management:
Fees(1)	1,221,040		1,173,907			2,412,207		2,316,254			409,191		396,722
Reimbursement of onsite personnel(3)	3,653,858		3,441,832			7,216,593		6,881,265			1,262,827		766,894
Other fees(1)	323,898		326,891			667,156		623,375			38,009		41,950
Other fees - property operations(3)	22,994		23,301			46,643		50,008			—		—
Other fees - G&A(4)	10,388		11,056			19,687		32,201			—		—
Other operating expenses(4)	279,690		451,937			541,101		893,703			152,068		76,515
Insurance proceeds(5)	—		(72,213		)	—		(172,213		)	—		—
Property insurance(6)	379,095		54,163			758,189		94,432			—		(172,717		)
Consolidated Balance Sheets:
Capitalized
Capital expenditures(7)	1,673		19,516			7,295		19,516			—		—
Construction management:
Fees(7)	51,659		329,541			188,102		881,468			35,938		125,159
Reimbursement of labor costs(7)	267,796		682,153			500,387		1,703,447			58,503		62,876
Additional paid-in capital
Selling commissions	—		—			—		—			415,184		562,339
	$	10,493,856	$	10,665,688		$	20,901,378	$	21,748,385		$	2,372,932	$	2,587,838

_____________________

(1) Included in fees to affiliates in the accompanying consolidated statements of operations.

(2) Included in acquisition costs in the accompanying consolidated statements of operations.

(3) Included in operating, maintenance and management in the accompanying consolidated statements of operations.

(4) Included in general and administrative expenses in the accompanying consolidated statements of operations.

(5) Included in tenant reimbursements and other in the accompanying consolidated statements of operations.

24

PART I — FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

STEADFAST APARTMENT REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2018

(unaudited)

(6) Property related insurance expense and the amortization of the prepaid insurance deductible account are included in general and administrative expenses in the accompanying consolidated statements of operations. The amortization of the prepaid property insurance is included in operating, maintenance and management expenses in the accompanying consolidated statements of operations. The prepaid insurance is included in other assets in the accompanying consolidated balance sheets upon payment.

(7) Included in building and improvements in the accompanying consolidated balance sheets.

Investment Management Fee

The Company pays the Advisor a monthly investment management fee equal to one-twelfth of 1.0% of the cost of the Company’s investments in real properties and real estate-related assets or the Company’s proportionate share thereof in the case of investments made through joint ventures. Such fee is calculated including acquisition fees, acquisition expenses and any debt attributable to such investments.

Acquisition Fees and Expenses

The Company pays the Advisor an acquisition fee equal to 1.0% of the cost of investment, which includes the amount actually paid or budgeted to fund the acquisition, origination, development, construction or improvement (i.e. value-enhancement) of any real property or real estate-related asset acquired. In addition to acquisition fees, the Company reimburses the Advisor for amounts directly incurred by the Advisor and amounts the Advisor pays to third parties in connection with the selection, evaluation, acquisition and development of a property or acquisition of real estate-related assets, whether or not the Company ultimately acquires the property or the real estate-related assets.

The Charter limits the Company’s ability to pay acquisition fees if the total of all acquisition fees and expenses relating to the purchase would exceed 4.5% of the contract purchase price. Under the Charter, a majority of the Company’s board of directors, including a majority of the independent directors, is required to approve any acquisition fees (or portion thereof) that would cause the total of all acquisition fees and expenses relating to an acquisition to exceed 4.5% of the contract purchase price. In connection with the purchase of securities, the acquisition fee may be paid to an affiliate of the Advisor that is registered as a Financial Industry Regulatory Authority, Inc. (“FINRA”) member broker-dealer if applicable FINRA rules would prohibit the payment of the acquisition fee to a firm that is not a registered broker-dealer. 

Loan Coordination Fee

The Company pays the Advisor or its affiliate a loan coordination fee equal to 1.0% of the initial amount of the new debt financed or outstanding debt assumed in connection with the acquisition, development, construction, improvement or origination of a property or a real estate-related asset. In addition, in connection with any financing or the refinancing of any debt (in each case, other than identified at the time of the acquisition of a property or a real estate-related asset), the Company pays the Advisor or its affiliate a loan coordination fee equal to 0.75% of the amount of debt financed or refinanced.

Property Management Fees and Expenses

The Company has entered into property management agreements (each, a “Property Management Agreement”) with Steadfast Management Company, Inc., an affiliate of the Sponsor (the “Property Manager”), in connection with the management of each of the Company’s properties. At June 30, 2018, the property management fee payable with respect to each property under the Property Management Agreements ranged from 2.50% to 3.0% of the annual gross revenue collected at the property, as determined by the Advisor and approved by a majority of the Company’s board of directors, including a majority of the independent directors. Each Property Management Agreement has an initial one-year term and will continue thereafter on a month-to-month basis unless either party gives 60-days’ prior notice of its desire to terminate the Property Management Agreement, provided that the Company may terminate the Property Management Agreement at any time upon a determination of gross negligence, willful misconduct or bad acts of the Property Manager or its employees or upon an uncured breach of the Property Management Agreement upon 30 days’ prior written notice to the Property Manager.

25

PART I — FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

STEADFAST APARTMENT REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2018

(unaudited)

In addition to the property management fee, the Property Management Agreements also specify certain other fees payable to the Property Manager for benefit administration, information technology infrastructure, licenses, support and training services and capital expenditures. The Company also reimburses the Property Manager for the salaries and related benefits of on-site property management employees.

Construction Management Fees and Expenses 

The Company has entered into construction management agreements (each a “Construction Management Agreement”) with Pacific Coast Land & Construction, Inc., an affiliate of the Sponsor (the “Construction Manager”), in connection with capital improvements and renovation or value-enhancement projects for certain properties the Company acquires. The construction management fee payable with respect to each property under the Construction Management Agreements ranges from 8.0% to 12.0% of the costs of the improvements for which the Construction Manager has planning and oversight authority. Generally, each Construction Management Agreement can be terminated by either party with 30 days prior written notice to the other party. Construction management fees are capitalized to the respective real estate properties in the period in which they are incurred as such costs relate to capital improvements and renovations for apartment homes taken out of service while they undergo the planned renovation.

The Company may also reimburse the Construction Manager for the salaries and related benefits of certain of its employees for time spent working on capital improvements and renovations.

Property Insurance

The Company deposits amounts with an affiliate of the Sponsor to fund a prepaid insurance deductible account to cover the cost of required insurance deductibles across all properties of the Company and other affiliated entities. Upon filing a major claim, proceeds from the insurance deductible account may be used by the Company or another affiliate of the Sponsor. In addition, the Company deposits amounts with an affiliate of the Sponsor to cover the cost of property and property related insurance across certain properties of the Company.

Other Operating Expense Reimbursement

In addition to the various fees paid to the Advisor, the Company is obligated to pay directly or reimburse all expenses incurred by the Advisor in providing services to the Company, including the Company’s allocable share of the Advisor’s overhead, such as rent, employee costs, utilities and information technology costs. The Company will not reimburse the Advisor for employee costs in connection with services for which the Advisor or its affiliates receive acquisition fees or disposition fees or for the salaries the Advisor pays to the Company’s executive officers.

The Charter limits the Company’s total operating expenses during any four fiscal quarters to the greater of 2% of the Company’s average invested assets or 25% of the Company’s net income for the same period (the “2%/25% Limitation”). The Company may reimburse the Advisor, at the end of each fiscal quarter, for operating expenses incurred by the Advisor; provided, however, that the Company shall not reimburse the Advisor at the end of any fiscal quarter for operating expenses that exceed the 2%/25% Limitation unless the independent directors have determined that such excess expenses were justified based on unusual and non-recurring factors. The Advisor must reimburse the Company for the amount by which the Company’s operating expenses for the preceding four fiscal quarters then ended exceed the 2%/25% Limitation, unless approved by the independent directors. For purposes of determining the 2%/25% Limitation amount, “average invested assets” means the average monthly book value of the Company’s assets invested directly or indirectly in equity interests and loans secured by real estate during the 12-month period before deducting depreciation, bad debts reserves or other non-cash reserves. “Total operating expenses” means all expenses paid or incurred by the Company that are in any way related to the Company’s operation, including the Company’s allocable share of Advisor overhead and investment management fees, but excluding (a) the expenses of raising capital such as organization and offering expenses, legal, audit, accounting, underwriting, brokerage, listing, registration and other fees, printing and other such expenses and taxes incurred in connection with the issuance, distribution, transfer, listing and registration of shares of the Company’s common stock; (b) interest payments; (c) taxes; (d) non-cash expenditures such as depreciation, amortization and bad debt reserves; (e) reasonable incentive fees based on the gain in the sale of the Company’s assets; (f) acquisition fees and acquisition expenses (including expenses relating to potential

26

PART I — FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

STEADFAST APARTMENT REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2018

(unaudited)

acquisitions that the Company does not close); (g) real estate commissions on the resale of investments; and (h) other expenses connected with the acquisition, disposition, management and ownership of investments (including the costs of foreclosure, insurance premiums, legal services, maintenance, repair and improvement of real property).

As of June 30, 2018, the Company’s total operating expenses, as defined above, did not exceed the 2%/25% Limitation.

Disposition Fee

If the Advisor or its affiliates provide a substantial amount of services in connection with the sale of a property or real estate-related asset as determined by a majority of the Company’s independent directors, the Company will pay the Advisor or its affiliates one-half of the brokerage commissions paid, but in no event to exceed 1% of the sales price of each property or real estate-related asset sold. To the extent the disposition fee is paid upon the sale of any assets other than real property, it will be included as an operating expense for purposes of the 2%/25% Limitation. In connection with the sale of securities, the disposition fee may be paid to an affiliate of the Advisor that is registered as a FINRA member broker-dealer if applicable FINRA rules would prohibit the payment of the disposition fee to a firm that is not a registered broker-dealer. As of June 30, 2018, the Company had not sold or otherwise disposed of any properties or any real estate-related assets. Accordingly, the Company had not incurred any disposition fees as of June 30, 2018. 

Selling Commissions and Dealer Manager Fees

The Company paid the Dealer Manager up to 7% and 3% of the gross offering proceeds from the Primary Offering as selling commissions and dealer manager fees, respectively. The Dealer Manager reallowed 100% of sales commissions earned to participating broker-dealers. The Dealer Manager could also reallow to any participating broker-dealer a portion of the dealer manager fee that was attributable to that participating broker-dealer for certain marketing costs of that participating broker-dealer. The Dealer Manager negotiated the reallowance of the dealer manager fee on a case-by-case basis with each participating broker-dealer subject to various factors associated with the cost of the marketing program. The Company allowed a participating broker-dealer to elect to receive the 7% selling commission at the time of sale or elect to have the selling commission paid on a trailing basis. A participating broker-dealer that elected to receive a trailing selling commission is paid as follows: 3% at the time of sale and the remaining 4% paid ratably (1% per year) on each of the first four anniversaries of the sale. A reduced sales commission and dealer manager fee was paid in connection with volume discounts and certain other categories of sales. No sales commission or dealer manager fee was paid with respect to shares of common stock issued pursuant to the DRP. The Company terminated the Public Offering on March 24, 2016, and as of June 30, 2018 and December 31, 2017, expects to pay trailing selling commissions of $415,184 and $562,339, respectively, which were charged to additional paid-in capital and included within amounts due to affiliates in the accompanying consolidated balance sheets.

8.Incentive Award Plan and Independent Director Compensation

The Company has adopted an incentive award plan (the “Incentive Award Plan”) that provides for the grant of equity awards to its employees, directors and consultants and those of the Company’s affiliates. The Incentive Award Plan authorizes the grant of non-qualified and incentive stock options, restricted stock awards, restricted stock units, stock appreciation rights, dividend equivalents and other stock-based awards or cash-based awards.

Under the Company’s independent directors’ compensation plan, which is a sub-plan of the Incentive Award Plan, each of the Company’s independent directors received 3,333 shares of restricted common stock once the Company raised $2,000,000 in gross offering proceeds in the Public Offering. Each subsequent independent director that joins the Company’s board of directors receives 3,333 shares of restricted common stock upon election to the Company’s board of directors. In addition, on the date following an independent director’s re-election to the Company’s board of directors, he or she receives 1,666 shares of restricted common stock. One-fourth of the shares of restricted common stock generally vest and become non-forfeitable upon issuance and the remaining portion will vest in three equal annual installments beginning on the date of grant and ending on the third anniversary of the date of grant; provided, however, that the restricted stock will become fully vested and become non-

27

PART I — FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

STEADFAST APARTMENT REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2018

(unaudited)

forfeitable on the earlier to occur of (1) the termination of the independent director’s service as a director due to his or her death or disability or (2) a change in control of the Company. These awards entitle the holders to participate in distributions.

The Company recorded stock-based compensation expense of $13,839 and $27,678 for the three and six months endedJune 30, 2018 and $13,887 and $33,756 for the three and six months endedJune 30, 2017, respectively, related to the independent directors’ restricted common stock.

In addition to the stock awards, the Company pays each of its independent directors an annual retainer of $55,000, prorated for any partial term (the audit committee chairperson receives an additional $10,000 annual retainer, prorated for any partial term). In addition, the independent directors are paid for attending meetings as follows: (i) $2,500 for each board meeting attended in person, (ii) $1,500 for each committee meeting attended in person in such director’s capacity as a committee member, (iii) $1,000 for each board meeting attended via teleconference (not to exceed $4,000 for any one set of meetings attended on any given day). All directors also receive reimbursement of reasonable out of pocket expenses incurred in connection with attendance at meetings of the board of directors. Director compensation is an operating expense of the Company that is subject to the operating expense reimbursement obligation of the Advisor discussed in Note 7 (Related Party Arrangements). The Company recorded an operating expense of $61,750 and $117,500 for the three and six months endedJune 30, 2018, and $58,750 and $120,500 for the three and six months endedJune 30, 2017, related to the independent directors’ annual retainer and attending board meetings, which is included in general and administrative expenses in the accompanying consolidated statements of operations. As of June 30, 2018 and December 31, 2017, $61,750 and $55,750, respectively, related to the independent directors’ annual retainer and board meetings attendance is included in accounts payable and accrued liabilities in the consolidated balance sheets.

9.Commitments and Contingencies

Economic Dependency

The Company is dependent on the Advisor for certain services that are essential to the Company, including the identification, evaluation, negotiation, purchase and disposition of real estate and real estate-related investments; management of the daily operations of the Company’s real estate and real estate-related investment portfolio; and other general and administrative responsibilities. In the event that the Advisor is unable to provide such services, the Company will be required to obtain such services from other sources. The Company may not be able to retain services from such other sources on favorable terms or at all.

Concentration of Credit Risk

The geographic concentration of the Company’s portfolio makes it particularly susceptible to adverse economic developments in the Atlanta, Georgia, Dallas/Fort Worth, Texas and Nashville, Tennessee apartment markets. Any adverse economic or real estate developments in these markets, such as business layoffs or downsizing, relocations of businesses, increased competition from other apartment communities, decrease in demand for apartments or any other changes, could adversely affect the Company’s operating results and its ability to make distributions to stockholders.

Environmental

As an owner of real estate, the Company is subject to various environmental laws of federal, state and local governments. The Company is not aware of any environmental liability that could have a material adverse effect on its financial condition or results of operations. However, changes in applicable environmental laws and regulations, the uses and conditions of properties in the vicinity of the Company’s properties, the activities of its tenants and other environmental conditions of which the Company is unaware with respect to the properties could result in future environmental liabilities.

Legal Matters

From time to time, the Company is subject, or party, to legal proceedings that arise in the ordinary course of its business. Management is not aware of any legal proceedings of which the outcome is reasonably likely to have a material adverse effect

28

PART I — FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

STEADFAST APARTMENT REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2018

(unaudited)

on the Company’s results of operations or financial condition nor is the Company aware of any such legal proceedings contemplated by government agencies.

10.Derivative Financial Instruments

The Company uses interest rate derivatives with the objective of managing exposure to interest rate movements thereby minimizing the effect of interest rate changes and the effect they could have on future cash flows. Interest rate cap agreements are used to accomplish this objective. The following table provides the terms of the Company’s interest rate derivative instruments that were in effect at June 30, 2018 and December 31, 2017:

June 30, 2018
Type	Maturity Date Range	Based on	Number of Instruments	Notional Amount		Variable Rate	Weighted Average Rate Cap	Fair Value
Interest Rate Cap	7/1/2018 - 1/1/2021	One-Month LIBOR	28	$	878,428,100	2.09%	3.27%	$	926,303

December 31, 2017
Type	Maturity Date Range	Based on	Number of Instruments	Notional Amount		Variable Rate	Weighted Average Rate Cap	Fair Value
Interest Rate Cap	6/1/2018 - 1/1/2021	One-Month LIBOR	29	$	888,368,100	1.56%	3.17%	$	347,409

The interest rate cap agreements are not designated as effective cash flow hedges. Accordingly, the Company records any changes in the fair value of the interest rate cap agreements as interest expense. The change in the fair value of the interest rate cap agreements for the three and six months endedJune 30, 2018, resulted in an unrealized gain of $131,281 and $578,894 and for the three and six months endedJune 30, 2017, resulted in an unrealized loss of $140,652 and $395,654, respectively, which is included in interest expense in the accompanying consolidated statements of operations. No interest rate cap agreements were acquired during the six months ended June 30, 2018 and 2017. The fair value of the interest rate cap agreements of $926,303 and $347,409 as of June 30, 2018 and December 31, 2017, respectively, is included in other assets on the accompanying consolidated balance sheets.

11.Subsequent Events

Distributions Paid

On July 2, 2018, the Company paid distributions of $3,792,428, which related to distributions declared for each day in the period from June 1, 2018 through June 30, 2018 and consisted of cash distributions paid in the amount of $1,922,060 and $1,870,368 in shares issued pursuant to the DRP.

On August 1, 2018, the Company paid distributions of $3,927,609, which related to distributions declared for each day in the period from July 1, 2018 through July 31, 2018 and consisted of cash distributions paid in the amount of $1,999,429 and $1,928,180 in shares issued pursuant to the DRP.

Shares Repurchased

On July 31, 2018, the Company repurchased 142,393 shares of its common stock for a total repurchase value of $2,000,000, or $14.05 per share, pursuant to the Company’s share repurchase program.

29

PART I — FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

STEADFAST APARTMENT REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2018

(unaudited)

Distributions Declared

On August 7, 2018, the Company’s board of directors approved and authorized a daily distribution to stockholders of record as of the close of business on each day of the period commencing on October 1, 2018 and ending on December 31, 2018. The distributions will be equal to $0.002466 per share of the Company’s common stock. The distributions for each record date in October 2018, November 2018 and December 2018 will be paid in November 2018, December 2018 and January 2019, respectively. The distributions will be payable to stockholders from legally available funds therefor.

Refinancings

The Credit Facility

On July 31, 2018, (the “Closing Date”), 16 indirect wholly-owned subsidiaries of the Company terminated the existing mortgage loans with their lenders for an aggregate principal amount of $479,318,649 and entered into a Master Credit Facility Agreement (“MCFA”) with Berkeley Point Capital LLC (“Facility Lender”) for an aggregate principal amount of $551,669,000. The MFCA provides for three tranches: (i) a fixed rate loan in the aggregate principal amount of $331,001,400 that accrues interest at 4.43% per annum; (ii) a fixed rate loan in the aggregate principal amount of $131,917,250 that accrues interest at 4.57%; and (iii) a variable rate loan in the aggregate principal amount of $82,750,350 that accrues interest at the one-month LIBOR plus 1.70%. The loans have a maturity date of August 1, 2028, unless the maturity date is accelerated in accordance with the terms of the loan documents. Interest only payments are payable monthly through August 1, 2025, with interest and principal payments due monthly thereafter. The Company paid $1,930,842 in the aggregate in loan origination fees to the Facility Lender in connection with the refinancings, and the Advisor earned a loan coordination fee of $2,758,345.

The CME Refinancing

On the Closing Date, five indirect wholly-owned subsidiaries of the Company terminated the existing mortgage loans with their lenders for an aggregate principal amount of $131,318,742 and entered into new loan agreements with PNC Bank for an aggregate principal amount of $160,850,000. Each loan agreement provides for a term loan (each a “CME Loan” and, collectively the “CME Loans”) with a maturity date of August 1, 2028, unless the maturity date is accelerated with the loan terms. Each CME Loan accrues interest at a fixed rate of 4.43% per annum (the “Interest Rate”). The entire outstanding principal balance and any accrued and unpaid interest on each of the CME Loans are due on the maturity date. Interest only payments on the CME Loans are payable monthly in arrears on specified dates as set forth in each loan agreement and interest and principal payments are due beginning September 1, 2023. Monthly payments are due and payable on the first day of each month, commencing September 1, 2018. The Company paid $643,400 in the aggregate in loan origination fees to PNC Bank in connection with the refinancings, and the Advisor earned a loan coordination fee of $804,250.

Restricted Stock Grant

On August 8, 2018, the Company granted 1,666 shares of restricted common stock to each of its three independent directors upon their re-election to the Company’s board of directors at the 2018 annual meeting of stockholders.

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PART I — FINANCIAL INFORMATION (continued)

Item2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the accompanying unaudited consolidated financial statements of Steadfast Apartment REIT, Inc. and the notes thereto. As used herein, the terms “we,” “our” and “us” refer to Steadfast Apartment REIT, Inc., a Maryland corporation, and, as required by context, Steadfast Apartment REIT Operating Partnership, L.P., a Delaware limited partnership, which we refer to as our “operating partnership,” and to their subsidiaries.

Forward-Looking Statements

Certain statements included in this Quarterly Report on Form 10-Q that are not historical facts (including any statements concerning investment objectives, other plans and objectives of management for future operations or economic performance, or assumptions or forecasts related thereto) are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These statements are only predictions. We caution that forward-looking statements are not guarantees. Actual events or our investments and results of operations could differ materially from those expressed or implied in any forward-looking statements. Forward-looking statements are typically identified by the use of terms such as “may,” “should,” “expect,” “could,” “intend,” “plan,” “anticipate,” “estimate,” “believe,” “continue,” “predict,” “potential” or the negative of such terms and other comparable terminology.

The forward-looking statements included herein are based upon our current expectations, plans, estimates, assumptions and beliefs that involve numerous risks and uncertainties. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, our actual results and performance could differ materially from those set forth in the forward-looking statements. Factors that could have a material adverse effect on our operations and future prospects include, but are not limited to:

• the fact that we have a limited operating history and commenced operations on May 22, 2014;

• the fact that we have had a net loss for each quarterly and annual period since inception; 

• changes in economic conditions generally and the real estate and debt markets specifically; 

• our ability to secure resident leases for our multifamily properties at favorable rental rates; 

• risks inherent in the real estate business, including resident defaults, potential liability relating to environmental matters and the lack of liquidity of real estate investments; 

• the fact that we pay fees and expenses to our advisor and its affiliates that were not negotiated on an arm’s length basis and the fact that the payment of these fees and expenses increases the risk that our stockholders will not earn a profit on their investment in us; 

• our ability to retain our executive officers and other key personnel of our advisor, our property manager and other affiliates of our advisor; 

• our ability to generate sufficient cash flows to pay distributions for our stockholders;

• legislative or regulatory changes (including changes to the laws governing the taxation of real estate investment trusts, or REITs); 

• the availability of capital; 

• changes in interest rates; and 

• changes to generally accepted accounting principles, or GAAP.

Any of the assumptions underlying forward-looking statements could be inaccurate. You are cautioned not to place undue reliance on any forward-looking statements included in this quarterly report. All forward-looking statements are made as of the date of this quarterly report and the risk that actual results will differ materially from the expectations expressed in this quarterly report will increase with the passage of time. Except as otherwise required by the federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements after the date of this quarterly report, whether as a result of new information, future events, changed circumstances or any other reason. In light of the significant

31

PART I — FINANCIAL INFORMATION (continued)

uncertainties inherent in the forward-looking statements included in this quarterly report, the inclusion of such forward-looking statements should not be regarded as a representation by us or any other person that the objectives and plans set forth in this quarterly report will be achieved.

All forward looking statements included herein should be read in light of the factors identified in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2017, filed with the Securities and Exchange Commission, or the SEC, on March 16, 2018.

Overview

We were formed on August 22, 2013, as a Maryland corporation that elected to be taxed as, and currently qualifies as, a REIT. As described in more detail below, we own and manage a diverse portfolio of real estate investments, primarily in the multifamily sector, located in the United States.

On December 30, 2013, we commenced our initial public offering of up to 66,666,667 shares of common stock at an initial price of $15.00 per share and up to 7,017,544 shares of common stock pursuant to our distribution reinvestment plan at an initial price of $14.25 per share. On March 24, 2016, we terminated our initial public offering. As of March 24, 2016, we had sold 48,625,651 shares of common stock for gross offering proceeds of $724,849,631, including 1,011,561 shares of common stock issued pursuant to our distribution reinvestment plan for gross offering proceeds of $14,414,752. Following the termination of our initial public offering, we have continued to offer shares of our common stock pursuant to our distribution reinvestment plan. As of June 30, 2018, we had sold 52,180,957 shares of common stock for gross proceeds of $777,095,941, including 4,566,930 shares of common stock issued pursuant to our distribution reinvestment plan for gross offering proceeds of $66,661,062.

On March 24, 2016, our board of directors determined an estimated value per share of our common stock of $14.46 as of December 31, 2015. On February 14, 2017, our board of directors determined an estimated value per share of our common stock of $14.85 as of December 31, 2016. On March 14, 2018, our board of directors determined an estimated value per share of our common stock of $15.18 as of December 31, 2017. In connection with the determination of an estimated value per share, our board of directors determined a price per share for the dividend reinvestment plan of $14.46, $14.85 and $15.18, effective May 1, 2016, March 1, 2017 and April 1, 2018, respectively. In the future, our board of directors may, in its sole discretion and from time to time, change the price at which we offer shares pursuant to our distribution reinvestment plan to reflect changes in our estimated value per share and other factors that our board of directors deems relevant.

Subject to certain restrictions and limitations, Steadfast Apartment Advisor, LLC, which we refer to as our “advisor,” manages our day-to-day operations and our portfolio of properties and real estate-related assets. Our advisor sources and presents investment opportunities to our board of directors. Our advisor also provides investment management, marketing, investor relations and other administrative services on our behalf.

Substantially all of our business is conducted through Steadfast Apartment REIT Operating Partnership, L.P., our operating partnership. We are the sole general partner of our operating partnership and one of our wholly-owned subsidiaries is the only limited partner of our operating partnership. As we accepted subscriptions for shares of common stock, we transferred substantially all of the net proceeds of the initial public offering to our operating partnership as a capital contribution. The limited partnership agreement of our operating partnership provides that our operating partnership will be operated in a manner that will enable us to (1) satisfy the requirements for being classified as a REIT for federal income tax purposes, (2) avoid any federal income or excise tax liability and (3) ensure that our operating partnership will not be classified as a “publicly traded partnership” for purposes of Section 7704 of the Internal Revenue Code of 1986, as amended, or the Internal Revenue Code, which classification could result in our operating partnership being taxed as a corporation, rather than as a disregarded entity. In addition to the administrative and operating costs and expenses incurred by our operating partnership in acquiring and operating our investments, our operating partnership will pay all of our administrative costs and expenses, and such expenses will be treated as expenses of our operating partnership.

We elected to be taxed as a REIT under the Internal Revenue Code commencing with our taxable year ended December 31, 2014. As a REIT, we generally will not be subject to federal income tax to the extent that we distribute qualifying dividends to our stockholders. If we fail to qualify as a REIT in any taxable year, we would be subject to federal income tax on our taxable income at regular corporate rates and would not be permitted to qualify for treatment as a REIT for federal income tax purposes for four years following the year in which qualification is lost, unless the Internal Revenue Service grants us relief under certain statutory provisions. Failing to qualify as a REIT could materially and adversely affect our net income and results of operations.

32

PART I — FINANCIAL INFORMATION (continued)

Market Outlook

The economy in the United States has improved since the last recession; however, there is no assurance that economic conditions will continue to improve or will not worsen in the future. We believe economic and demographic trends will benefit our existing portfolio and that we have unique future investment opportunities, particularly in the multifamily sector. Home ownership rates are near all-time lows. Demographic and economic factors favor the flexibility of rental housing and discourage the potential financial burden associated with home ownership. Additionally, Millennials and Baby Boomers, the two largest demographic groups comprising roughly half of the total population in the United States, are increasingly choosing rental housing over home ownership. Demographic studies suggest that Baby Boomers are downsizing their suburban homes and relocating to multifamily apartments. Millennials are renting multifamily apartments due to high levels of student debt and increased credit standards in order to qualify for a home mortgage. According to the Federal Reserve Bank of New York, aggregate student debt has surpassed automotive, home equity lines of credit and credit card debt. Millennials are also getting married and having children later and are choosing to live in apartment communities until their mid-30s. Today, 30% of Millennials are still living with their parents or are still in school. When they get a job, Millennials will likely rent moderate income apartments based upon an average income of $45,000 to $65,000. Our plan is to provide rental housing for these generational groups as they age. We believe these factors will continue to contribute to the demand for multifamily housing.

Our Real Estate Portfolio

As of June 30, 2018, we owned the 34 multifamily apartment communities listed below:

									Average Monthly Occupancy(1)				Average Monthly Rent(2)
	Property Name	Location	Purchase Date	Number of Units	Contract Purchase Price		Mortgage Debt Outstanding(3)		Jun 30, 2018		Dec 31, 2017		Jun 30, 2018		Dec 31, 2017
1	Villages at Spring Hill Apartments	Spring Hill, TN	5/22/2014	176	$	14,200,000	$	9,890,573	92.0	%	93.8	%	$	1,024	$	1,076
2	Harrison Place Apartments	Indianapolis, IN	6/30/2014	307	27,864,250		19,442,241		95.1	%	93.5	%	959		942
3	Club at Summer Valley	Austin, TX	8/28/2014	260	21,500,000		14,980,413		93.5	%	94.6	%	883		926
4	Terrace Cove Apartment Homes	Austin, TX	8/28/2014	304	23,500,000		16,373,939		90.8	%	91.4	%	916		880
5	The Residences on McGinnis Ferry	Suwanee, GA	10/16/2014	696	98,500,000		73,426,253		95.3	%	88.6	%	1,265		1,272
6	The 1800 at Barrett Lakes	Kennesaw, GA	11/20/2014	500	49,000,000		34,203,543		92.0	%	91.4	%	1,019		973
7	The Oasis	Colorado Springs, CO	12/19/2014	252	40,000,000		27,892,770		94.8	%	92.9	%	1,336		1,344
8	Columns on Wetherington	Florence, KY	2/26/2015	192	25,000,000		17,413,001		96.9	%	91.7	%	1,107		1,061
9	Preston Hills at Mill Creek	Buford, GA	3/10/2015	464	51,000,000		35,578,600		93.1	%	92.5	%	1,130		1,136
10	Eagle Lake Landing Apartments	Speedway, IN	3/27/2015	277	19,200,000		13,332,450		94.9	%	93.5	%	873		837
11	Reveal on Cumberland	Fishers, IN	3/30/2015	220	29,500,000		21,580,564		97.3	%	93.2	%	1,111		1,072
12	Randall Highlands Apartments	North Aurora, IL	3/31/2015	146	32,115,000		22,302,046		97.3	%	90.4	%	1,821		1,747
13	Heritage Place Apartments	Franklin, TN	4/27/2015	105	9,650,000		7,024,017		96.2	%	96.2	%	1,126		1,052
14	Rosemont at East Cobb	Marietta, GA	5/21/2015	180	16,450,000		11,412,830		96.7	%	90.6	%	981		966
15	Ridge Crossings Apartments	Hoover, AL	5/28/2015	720	72,000,000		50,238,191		95.1	%	93.5	%	952		946
16	Bella Terra at City Center	Aurora, CO	6/11/2015	304	37,600,000		26,188,628		94.7	%	94.4	%	1,150		1,120

33

PART I — FINANCIAL INFORMATION (continued)

									Average Monthly Occupancy(1)				Average Monthly Rent(2)
	Property Name	Location	Purchase Date	Number of Units	Contract Purchase Price		Mortgage Debt Outstanding(3)		Jun 30, 2018		Dec 31, 2017		Jun 30, 2018		Dec 31, 2017
17	Hearthstone at City Center	Aurora, CO	6/25/2015	360	$	53,400,000	$	37,219,442	93.6	%	94.2	%	$	1,211	$	1,178
18	Arbors at Brookfield	Mauldin, SC	6/30/2015	702	66,800,000		45,150,628		93.0	%	92.7	%	898		881
19	Carrington Park	Kansas City, MO	8/19/2015	298	39,480,000		29,500,676		92.6	%	94.6	%	1,004		1,049
20	Delano at North Richland Hills	North Richland Hills, TX	8/26/2015	263	38,500,000		29,769,905		95.8	%	94.7	%	1,405		1,391
21	Meadows at North Richland Hills	North Richland Hills, TX	8/26/2015	252	32,600,000		25,418,956		96.4	%	95.6	%	1,305		1,290
22	Kensington by the Vineyard	Euless, TX	8/26/2015	259	46,200,000		34,075,348		94.6	%	93.1	%	1,529		1,515
23	Monticello by the Vineyard	Euless, TX	9/23/2015	354	52,200,000		41,123,131		96.9	%	96.6	%	1,329		1,331
24	The Shores	Oklahoma City, OK	9/29/2015	300	36,250,000		24,085,572		91.7	%	90.7	%	989		972
25	Lakeside at Coppell	Coppell, TX	10/7/2015	315	60,500,000		45,203,329		97.8	%	92.1	%	1,710		1,652
26	Meadows at River Run	Bolingbrook, IL	10/30/2015	374	58,500,000		43,307,490		95.5	%	92.2	%	1,357		1,340
27	PeakView at T-Bone Ranch	Greeley, CO	12/11/2015	224	40,300,000		28,095,779		94.2	%	94.6	%	1,283		1,242
28	Park Valley Apartments	Smyrna, GA	12/11/2015	496	51,400,000		44,661,905		93.8	%	92.3	%	972		958
29	PeakView by Horseshoe Lake	Loveland, CO	12/18/2015	222	44,200,000		33,668,358		95.0	%	95.5	%	1,392		1,381
30	Stoneridge Farms	Smyrna, TN	12/30/2015	336	47,750,000		—		94.3	%	94.9	%	1,171		1,139
31	Fielder’s Creek	Englewood, CO	3/23/2016	217	32,400,000		—		95.4	%	94.5	%	1,178		1,171
32	Landings of Brentwood	Brentwood, TN	5/18/2016	724	110,000,000		—		94.1	%	96.0	%	1,167		1,175
33	1250 West Apartments	Marietta, GA	8/12/2016	468	55,772,500		41,685,882		92.1	%	91.2	%	1,021		958
34	Sixteen50 @ Lake Ray Hubbard	Rockwall, TX	9/29/2016	334	66,050,000		44,650,161		96.1	%	94.3	%	1,507		1,527
				11,601	$	1,499,381,750	$	948,896,621	94.4	%	93.1	%	$	1,153	$	1,137

________________

(1) As of June 30, 2018, our portfolio was approximately 96.6% leased, calculated using the number of occupied and contractually leased units divided by total units.

(2) Average monthly rent is based upon the effective rental income after considering the effect of vacancies, concessions and write-offs.

(3) Mortgage debt outstanding is net of deferred financing costs and loan discount associated with the loans for each individual property listed above but excludes the principal balance of $45,000,000 and associated deferred financing costs of $98,167 related to the line of credit at the company level.

Critical Accounting Policies

The preparation of our financial statements requires significant management judgments, assumptions and estimates about matters that are inherently uncertain. These judgments affect the reported amounts of assets and liabilities and our disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. With different estimates or assumptions, materially different amounts could be reported in our financial statements. Additionally, other companies may utilize different estimates that may impact the comparability of our results of

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PART I — FINANCIAL INFORMATION (continued)

operations to those of companies in similar businesses. A discussion of the accounting policies that management considers critical in that they involve significant management judgments, assumptions and estimates is included in our Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC on March 16, 2018. There have been no significant changes to our accounting policies during the period covered by this report, except as discussed in Note 2 (Summary of Significant Accounting Policies) to our condensed consolidated unaudited financial statements in this quarterly report.

Income Taxes

We elected to be taxed as, and currently qualify as, a REIT under the Internal Revenue Code and have operated as such commencing with the taxable year ended December 31, 2014. To qualify as a REIT, we must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of our annual REIT taxable income to our stockholders (which is computed without regard to the dividends-paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP). As a REIT, we generally will not be subject to federal income tax to the extent we distribute qualifying dividends to our stockholders. If we fail to qualify as a REIT in any taxable year, we would be subject to federal income tax on our taxable income at regular corporate income tax rates and generally would not be permitted to qualify for treatment as a REIT for federal income tax purposes for the four taxable years following the year during which qualification is lost, unless the Internal Revenue Service grants us relief under certain statutory provisions. Such an event could materially adversely affect our net income and net cash available for distribution to stockholders. However, we believe we are organized and operate in such a manner as to qualify for treatment as a REIT.

We follow the income tax guidance under GAAP to recognize, measure, present and disclose in our consolidated financial statements uncertain tax positions that we have taken or expect to take on a tax return. As of June 30, 2018 and December 31, 2017, we did not have any liabilities for uncertain tax positions that we believe should be recognized in our consolidated financial statements. We have not been assessed interest or penalties by any major tax jurisdictions. Our evaluation was performed for the tax years ended December 31, 2017, 2016, 2015 and 2014.

Distributions

Our board of directors has declared daily distributions that are paid on a monthly basis. We expect to continue paying monthly distributions unless our results of operations, our general financial condition, general economic conditions or other factors prohibit us from doing so. We may declare distributions in excess of our cash flow from operations. As a result, our distribution rate and payment frequency may vary from time to time. However, to qualify as a REIT for tax purposes, we must make distributions equal to at least 90% of our “REIT taxable income” each year.

Distributions declared (1) accrue daily to our stockholders of record as of the close of business on each day, (2) are payable in cumulative amounts on or before the third day of each calendar month with respect to the prior month and (3) were calculated at a rate of $0.002466 per share per day during the period from January 1, 2018 through June 30, 2018, which if paid over a 365-day period is equivalent to a 6.0% annualized distribution rate based on a purchase price of $15.00 per share of common stock.

The distributions declared and paid during the first and second fiscal quarters of 2018, along with the amount of distributions reinvested pursuant to the distribution reinvestment plan were as follows:

					Distributions Paid(3)						Sources of Distributions Paid
Period	Distributions Declared(1)		Distributions Declared Per Share(1)(2)		Cash		Reinvested		Total		Cash Flow From Operations		Notes Payable		Net Cash Provided by Operating Activities
First Quarter 2018	$	11,312,463	$	0.222	$	5,597,521	$	5,701,030	$	11,298,551	$	7,087,026	$	4,211,525	$	7,087,026
Second Quarter 2018	11,485,650		0.224		5,824,954		5,768,910		11,593,864		11,593,864		—		11,690,359
	$	22,798,113	$	0.446	$	11,422,475	$	11,469,940	$	22,892,415	$	18,680,890	$	4,211,525	$	18,777,385

____________________

(1) Distributions during the three and six months endedJune 30, 2018, were based on daily record dates and calculated at a rate of $0.002466 per share per day.

(2) Assumes each share was issued and outstanding each day during the periods presented.

(3) Distributions are paid on a monthly basis. Distributions for all record dates of a given month are paid approximately three days following month end.

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PART I — FINANCIAL INFORMATION (continued)

For the three and six months endedJune 30, 2018, we paid aggregate distributions of $11,593,864 and $22,892,415, including $5,824,954 and $11,422,475 of distributions paid in cash and 382,875 and 766,783 shares of our common stock issued pursuant to our distribution reinvestment plan for $5,768,910 and $11,469,940, respectively. For the three and six months endedJune 30, 2018, our net loss was $8,946,178 and $16,964,272, we had funds from operations, or FFO, of $8,683,615 and $18,100,871 and net cash provided by operations of $11,690,359 and $18,777,385, respectively. For the three and six months endedJune 30, 2018, we funded $11,593,864 and $18,680,890, or 100% and 82%, and $0 and $4,211,525, or 0% and 18%, of total distributions paid, including shares issued pursuant to our distribution reinvestment plan, from net cash provided by operating activities and from proceeds from the refinancing of our credit facility, respectively. Since inception, of the $128,468,143 in total distributions paid through June 30, 2018, including shares issued pursuant to our distribution reinvestment plan, 73% of such amounts were funded from cash flow from operations, 11% were funded from proceeds from our revolving line of credit and the refinancing of our credit facility and 16% were funded from net public offering proceeds. For information on how we calculate FFO and the reconciliation of FFO to net loss, see “—Funds from Operations and Modified Funds from Operations.”

Our long-term policy is to pay distributions solely from cash flow from operations. Because we may receive income from interest or rents at various times during our fiscal year and because we may need cash flow from operations during a particular period to fund capital expenditures and other expenses, we expect that from time to time during our operational stage, we will declare distributions in anticipation of cash flow that we expect to receive during a later period, and we expect to pay these distributions in advance of our actual receipt of these funds. In these instances, our board of directors has the authority under our organizational documents, to the extent permitted by Maryland law, to fund distributions from sources such as borrowings, offering proceeds or advances and the deferral of fees and expense reimbursements by our advisor, in its sole discretion. We have not established a limit on the amount of proceeds we may use from sources other than cash flow from operations to fund distributions. If we pay distributions from sources other than cash flow from operations, we will have fewer funds available for investments.

Inflation

Substantially all of our multifamily property leases are for a term of one year or less. In an inflationary environment, this may allow us to realize increased rents upon renewal of existing leases or the beginning of new leases. Short-term leases generally will minimize our risk from the adverse effects of inflation, although these leases generally permit residents to leave at the end of the lease term and therefore will expose us to the effects of a decline in market rents. In a deflationary rent environment, we may be exposed to declining rents more quickly under these shorter term leases.

With respect to other commercial properties, we expect in the future to include provisions in our leases designed to protect us from the impact of inflation. These provisions include reimbursement billings for operating expense pass-through charges, real estate tax and insurance reimbursements, or in some cases annual reimbursement of operating expenses above a certain allowance.

As of June 30, 2018, we had not entered into any material leases as a lessee.

REIT Compliance

To qualify as a REIT for tax purposes, we are required to distribute at least 90% of our REIT taxable income (which is computed without regard to the dividends-paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP) to our stockholders. We must also meet certain asset and income tests, as well as other requirements. We monitor the operations and transactions that may potentially impact our REIT status. If we fail to qualify as a REIT in any taxable year, we would be subject to federal income tax (including any applicable alternative minimum tax) on our taxable income at regular corporate rates.

Liquidity and Capital Resources

We use secured borrowings, and intend to use in the future secured and unsecured borrowings. At June 30, 2018, our debt was approximately 56% of the value of our properties, as determined by the most recent valuations performed by an independent third-party appraiser as of December 31, 2017. Going forward, we expect that our borrowings will be approximately 55% to 60% of the value of our properties (after debt amortization) and other real estate-related assets. Under our Articles of Amendment and Restatement, or our charter, we are prohibited from borrowing in excess of 300% of the value

36

PART I — FINANCIAL INFORMATION (continued)

of our net assets, which generally approximates to 75% of the aggregate cost of our assets, though we may exceed this limit only under certain circumstances.

In addition to making investments in accordance with our investment objectives, we use our capital resources to make certain payments to our advisor and its affiliates. During our organization and offering stage, we made payments to the dealer manager for sales commissions and the dealer manager fees and payments to our advisor for reimbursement of certain organization and offering expenses. Currently, during our operating stage, we make payments to our advisor in connection with the acquisition of investments, the management of our assets and costs incurred by our advisor in providing services to us.

Our principal demand for funds will be to fund value-enhancement and other capital improvement projects, to pay operating expenses and interest on our outstanding indebtedness and to make distributions to our stockholders. Over time, we intend to generally fund our cash needs, other than asset acquisitions, from operations. Otherwise, we expect that our principal sources of working capital will include:

• current unrestricted cash balance, which was $20,342,021 as of June 30, 2018;

• various forms of secured and unsecured financing;

• borrowings under master repurchase agreements;

• equity capital from joint venture partners; and

• proceeds from our distribution reinvestment plan.

Over the short term, we believe that our sources of capital, specifically our cash balances, cash flow from operations, our ability to raise equity capital from joint venture partners and our ability to obtain various forms of secured and unsecured financing, including financing pursuant to our line of credit described below, will be adequate to meet our liquidity requirements and capital commitments.

Over the longer term, in addition to the same sources of capital we will rely on to meet our short-term liquidity requirements, we may also conduct additional public or private offerings of our securities. We expect these resources will be adequate to fund our operating activities, debt service and distributions, and will be sufficient to fund our ongoing operating activities as well as providing capital for investment in future development and other joint ventures along with potential forward purchase commitments.

On May 18, 2016, we entered into a secured revolving line of credit facility with PNC Bank, National Association, or PNC Bank, in an amount not to exceed $65,000,000. The line of credit provides for advances solely for the purpose of financing the costs in connection with acquisitions and development of real estate projects and for general corporate purposes (subject to certain debt service and loan to value requirements). The line of credit has a maturity date of May 17, 2019, subject to extension, as further described in the loan agreement entered into by certain of our wholly-owned subsidiaries with PNC Bank in connection with the acquisition of the Landings of Brentwood property. As of June 30, 2018, $45,000,000 was outstanding on our line of credit. We have the option to select the interest rate in respect of the outstanding unpaid principal amount of the line of credit loans from the following options (1) the sum of the Base Rate (as defined in the loan agreement) plus 0.60% or (2) a rate per annum fixed for the applicable LIBOR Interest Period (as defined in the loan agreement) equal to the sum of the London Interbank Offered Rate (LIBOR) plus 1.60%. Monthly interest payments are due and payable in arrears on the first day of each month until the line of credit maturity date. The entire outstanding principal balance and any accrued and unpaid interest on the line of credit loans are due and payable in full on the line of credit maturity date. For additional information on our line of credit, see Note 5 (Debt) to the unaudited consolidated financial statements contained in this quarterly report. We continue to evaluate possible other sources of capital, including, without limitation, entering into additional credit facilities. There can be no assurance that we will be able to obtain any such financing on favorable terms, if at all.

Cash Flows Provided by Operating Activities

As of June 30, 2018, we owned 34 multifamily properties. During the six months ended June 30, 2018, net cash provided by operating activities was $18,777,385, compared to $17,740,006 for the six months endedJune 30, 2017. The change in net cash provided by operating activities is primarily due to increases in net loss, accounts payable, amounts due to affiliates and depreciation, partially offset by decreases in other assets and the change in the fair value of interest rate cap agreements. We expect to continue to generate cash flows from operations as we stabilize the operations of our property portfolio and complete our value-enhancement program.

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PART I — FINANCIAL INFORMATION (continued)

Cash Flows Used in Investing Activities

During the six months ended June 30, 2018, net cash used in investing activities was $7,664,456, compared to $16,184,592 during the six months endedJune 30, 2017. The decrease in net cash used in investing activities was primarily the result of fewer capital improvements to real estate investments during the six months ended June 30, 2018, compared to the six months endedJune 30, 2017. Net cash used in investing activities during the six months ended June 30, 2018, consisted of the following:

• $7,808,428 of cash used for improvements to real estate investments; and

• $143,972 of cash provided by proceeds from insurance claims.

Cash Flows from Financing Activities

During the six months ended June 30, 2018, net cash used in financing activities was $16,701,572, compared to $3,468,351 during the six months endedJune 30, 2017. The increase in net cash used in financing activities was due to a decrease in proceeds from borrowings on credit facilities from $10,000,000 during the six months endedJune 30, 2017, to $0 during the six months ended June 30, 2018, as well as an increase in the repurchase of common stock from $2,477,614 during the six months endedJune 30, 2017, to $4,886,216 during the six months ended June 30, 2018. Net cash used in financing activities during the six months ended June 30, 2018, consisted of the following:

• $114,741 of payments of commissions on sales of common stock and related dealer manager fees;

• $278,140 of principal payments on mortgage notes payable;

• $4,886,216 of cash paid for the repurchase of common stock; and

• $11,422,475 of net cash distributions to our stockholders, after giving effect to distributions reinvested by stockholders of $11,469,940.

Contractual Commitments and Contingencies

We use secured debt, and intend to use in the future secured and unsecured debt. We believe that the careful use of borrowings will help us achieve our diversification goals and potentially enhance the returns on our investments. At June 30, 2018, our debt was approximately 56% of the value of our properties, as determined by the most recent valuations performed by an independent third-party appraiser as of December 31, 2017. Going forward, we expect that our borrowings will be approximately 55% to 60% of the value of our properties (after debt amortization) and other real estate-related assets. Under our charter, we are prohibited from borrowing in excess of 300% of our net assets, which generally approximates to 75% of the aggregate cost of our assets unless such excess is approved by a majority of the independent directors and disclosed to stockholders, along with a justification for such excess, in our next quarterly report. In such event, we will monitor our debt levels and take action to reduce any such excess as practicable. Our aggregate borrowings are reviewed by our board of directors at least quarterly. As of June 30, 2018, our aggregate borrowings were not in excess of 300% of the value of our net assets.

In addition to using our capital resources for investing purposes and meeting our debt obligations, we expect to use our capital resources to make certain payments to our advisor in connection with the management of our asset portfolio and costs incurred by our advisor in providing services to us.

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PART I — FINANCIAL INFORMATION (continued)

As of June 30, 2018, we had indebtedness totaling an aggregate principal amount of $993,798,454, including the net discount on a note payable of $2,098,347 and the net deferred financing costs of $4,994,355. The following is a summary of our contractual obligations as of June 30, 2018:

			Payments due by period
Contractual Obligations	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Interest payments on outstanding debt obligations(1)	$	274,020,788	$	20,855,927	$	80,435,029	$	75,171,997	$	97,557,835
Principal payments on outstanding debt obligations(2)	1,000,891,156		2,002,471		58,184,712		111,019,765		829,684,208
Total	$	1,274,911,944	$	22,858,398	$	138,619,741	$	186,191,762	$	927,242,043

________________

(1) Projected interest payments on outstanding debt obligations are based on the outstanding principal amounts and interest rates in effect at June 30, 2018. We incurred interest expense of $10,231,952 and $19,324,835 during the three and six months endedJune 30, 2018, including amortization of deferred financing costs totaling $246,966 and $493,241, net unrealized gains from the change in fair value of interest rate cap agreements of $131,281 and $578,894, amortization of loan discount of $88,746 and $177,491, and credit facility commitment fees of $7,479 and $14,877, respectively.

(2) Projected principal payments on outstanding debt obligations are based on the terms of the notes payable agreements. Amounts exclude the amortization of the debt discount and net deferred financing costs associated with certain notes payable.

Our debt obligations contain customary financial and non-financial debt covenants. As of June 30, 2018, and December 31, 2017, we were in compliance with all debt covenants.

Results of Operations

Overview

The discussion that follows is based on our consolidated results of operations for the three and six months endedJune 30, 2018 and 2017. The ability to compare one period to another is affected by the implementation of our value-enhancement strategy. As of June 30, 2018 and 2017, we owned 34 multifamily properties. The increase in rents and occupancy are the primary cause of the increase in operating income and expenses, as further discussed below.

Our results of operations for the three and six months endedJune 30, 2018 and 2017, are not indicative of those expected in future periods. For the three and six months endedJune 30, 2018, we continued to perform value-enhancements projects, which may have an impact on our future results of operations. In general, we expect that our revenues and expenses related to our portfolio will increase in future periods as a result of organic rent increases and anticipated value-enhancement projects.

To provide additional insight into our operating results, we are also providing a detailed analysis of same-store versus non-same-store NOI. For more information on NOI and a reconciliation of NOI (a non-GAAP financial measure) to net loss, see “—Net Operating Income.”

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PART I — FINANCIAL INFORMATION (continued)

Consolidated Results of Operations for the Three Months Ended June 30, 2018, Compared to the Three Months Ended June 30, 2017

The following table summarizes the consolidated results of operations for the three months ended June 30, 2018 and 2017:

	For the Three Months Ended June 30,
	2018			2017			Change $			Change %
Total revenues	$	42,475,166		$	40,820,869		$	1,654,297		4	%
Operating, maintenance and management	(10,439,849		)	(9,994,030		)	(445,819		)	4	%
Real estate taxes and insurance	(5,962,503		)	(5,326,357		)	(636,146		)	12	%
Fees to affiliates	(5,826,703		)	(5,725,587		)	(101,116		)	2	%
Depreciation and amortization	(17,629,793		)	(16,725,862		)	(903,931		)	5	%
Interest expense	(10,231,952		)	(8,417,150		)	(1,814,802		)	22	%
General and administrative expenses	(1,330,544		)	(1,589,944		)	259,400			(16	)%
Acquisition costs	—			(1,000		)	1,000			(100	)%
Net loss	$	(8,946,178	)	$	(6,959,061	)	$	(1,987,117	)	29	%
NOI(1)	$	24,341,208		$	23,795,988		$	545,220		2	%
FFO(2)	$	8,683,615		$	9,766,801		$	(1,083,186	)	(11	)%
MFFO(2)	$	8,552,334		$	9,908,453		$	(1,356,119	)	(14	)%

______________

(1) NOI is a non-GAAP financial measure used by investors and our management to evaluate and compare the performance of our properties and to determine trends in earnings. However, the usefulness of NOI is limited because it excludes general and administrative costs, interest expense, interest income and other expense, acquisition costs, certain fees to affiliates, depreciation and amortization expense and gains or losses from the sale of our properties and other gains and losses as stipulated by GAAP, the level of capital expenditures and leasing costs, all of which are significant economic costs. For additional information on how we calculate NOI and a reconciliation of NOI to net loss, see “—Net Operating Income.”

(2) GAAP basis accounting for real estate assets utilizes historical cost accounting and assumes real estate values diminish over time. In an effort to overcome the difference between real estate values and historical cost accounting for real estate assets the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT, established the measurement tool of FFO. Since its introduction, FFO has become a widely used non-GAAP financial measure among REITs. Additionally, we use modified funds from operations, or MFFO, as defined by the Institute for Portfolio Alternatives (formerly known as the Investment Program Association), or the IPA, as a supplemental measure to evaluate our operating performance. MFFO is based on FFO but includes certain adjustments we believe are necessary due to changes in accounting and reporting under GAAP since the establishment of FFO. Neither FFO nor MFFO should be considered as alternatives to net loss or other measurements under GAAP as indicators of our operating performance, nor should they be considered as alternatives to cash flow from operating activities or other measurements under GAAP as indicators of liquidity. For additional information on how we calculate FFO and MFFO and a reconciliation of FFO and MFFO to net loss, see “—Funds From Operations and Modified Funds From Operations.”

Net loss

For the three months ended June 30, 2018, we had a net loss of $8,946,178, compared to a net loss of $6,959,061 for the three months ended June 30, 2017. The increase in net loss of $1,987,117 over the comparable prior year period was due to the increase in operating, maintenance and management expenses of $445,819, the increase in real estate taxes and insurance of $636,146, the increase in depreciation and amortization expense of $903,931, the increase in interest expense of $1,814,802, and the increase in fees to affiliates of $101,116, partially offset by the decrease in general and administrative expenses of $259,400, the increase in total revenues of $1,654,297, and the decrease in acquisition costs of $1,000.

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PART I — FINANCIAL INFORMATION (continued)

Total revenues

Total revenues were $42,475,166 for the three months ended June 30, 2018, compared to $40,820,869 for the three months ended June 30, 2017. The increase of $1,654,297 was primarily due to increases in average monthly occupancy and average monthly rents as a result of ordinary monthly rent increases and monthly rent increases driven by our value-enhancement projects. Average monthly occupancy increased from 93.3% as of June 30, 2017, to 94.4% as of June 30, 2018, and average monthly rents per unit increased from $1,124 as of June 30, 2017, to $1,153 as of June 30, 2018. We expect rental income and tenant reimbursements to increase in future periods as a result of ordinary monthly rent increases, improved occupancy and the implementation of our value-enhancement strategy.

Operating, maintenance and management expenses

Operating, maintenance and management expenses for the three months ended June 30, 2018, were $10,439,849, compared to $9,994,030 for the three months ended June 30, 2017. The increase of $445,819 was primarily due to increases in repairs, maintenance, turnover and payroll costs during the three months ended June 30, 2018, compared to the three months ended June 30, 2017. We expect that these amounts will decrease as a percentage of total revenues as we implement operational efficiencies at our multifamily properties.

Real estate taxes and insurance

Real estate taxes and insurance expenses were $5,962,503 for the three months ended June 30, 2018, compared to $5,326,357 for the three months ended June 30, 2017. The increase of $636,146 was primarily due to a reduction in tax credits, as a result of successful challenges relating to prior year real estate tax appeals. We expect these amounts may increase in future periods as a result of municipal property tax rate increases as well as increases in the assessed value of our property portfolio.

Fees to affiliates

Fees to affiliates were $5,826,703 for the three months ended June 30, 2018, compared to $5,725,587 for the three months ended June 30, 2017. The increase of $101,116 was primarily due to an increase in investment management fees as a result of the increase in the cost of investment from additions to our real estate assets, as well as an increase in property management fees as a result of the increase in revenue. We expect fees to affiliates related to the on-going management of our real estate portfolio to increase in future periods as a result of increased investment management fees from anticipated increases in the cost of investments and increased property management fees from anticipated increases in future rental income.

Depreciation and amortization

Depreciation and amortization expenses were $17,629,793 for the three months ended June 30, 2018, compared to $16,725,862 for the three months ended June 30, 2017. The increase of $903,931 was primarily due to the net increase in depreciable and amortizable assets of $17,899,771 since June 30, 2017, due to capital improvements. We expect these amounts to increase slightly in future periods as a result of anticipated future enhancements to our real estate portfolio.

Interest expense

Interest expense for the three months ended June 30, 2018, was $10,231,952, compared to $8,417,150 for the three months ended June 30, 2017. The increase of $1,814,802 was primarily due to the increase in the notes payable, net balance of $11,482,279 since June 30, 2017, due to financing incurred in connection with the refinancing of six multifamily properties since June 30, 2017, and increases in LIBOR from June 30, 2017 to June 30, 2018, that impacted the interest on our variable rate loans. Included in interest expense is the amortization of deferred financing costs of $246,966 and $255,957, the unrealized (gain) loss on derivative instruments of $(131,281) and $140,652, and credit facility commitment fees of $7,479 and $10,942 for the three months ended June 30, 2018 and 2017, respectively. We expect interest expense in future periods to vary based on our level of future borrowings, which will depend on the availability and cost of debt financing and the opportunity to acquire real estate and real estate-related investments meeting our investment objectives.

General and administrative expenses

General and administrative expenses for the three months ended June 30, 2018, were $1,330,544, compared to $1,589,944 for the three months ended June 30, 2017. These general and administrative costs consisted primarily of legal fees, insurance premiums, audit fees, other professional fees and independent director compensation. The decrease of $259,400 was due to decreases in legal, state tax, insurance and overhead expenses over the three months ended June 30, 2017. We expect general and administrative expenses to decrease as a percentage of total revenues.

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PART I — FINANCIAL INFORMATION (continued)

Acquisition costs

There were no acquisition costs for the three months ended June 30, 2018. Acquisition costs were $1,000 for the three months ended June 30, 2017. We do not expect to incur significant acquisition costs in future periods as we have invested all of the proceeds from our initial public offering.

Consolidated Results of Operations for the Six Months EndedJune 30, 2018, Compared to the Six Months EndedJune 30, 2017

The following table summarizes the consolidated results of operations for the six months ended June 30, 2018 and 2017:

	For the Six Months Ended June 30,
	2018			2017			Change $			Change %
Total revenues	$	83,842,192		$	80,525,644		$	3,316,548		4	%
Operating, maintenance and management	(20,414,684		)	(19,444,888		)	(969,796		)	5	%
Real estate taxes and insurance	(11,647,883		)	(11,558,404		)	(89,479		)	1	%
Fees to affiliates	(11,623,381		)	(11,364,558		)	(258,823		)	2	%
Depreciation and amortization	(35,065,143		)	(34,124,387		)	(940,756		)	3	%
Interest expense	(19,324,835		)	(16,299,864		)	(3,024,971		)	19	%
General and administrative expenses	(2,730,538		)	(3,103,456		)	372,918			(12	)%
Acquisition costs	—			(2,185		)	2,185			(100	)%
Net loss	$	(16,964,272	)	$	(15,372,098	)	$	(1,592,174	)	10	%
NOI(1)	$	48,326,499		$	46,237,992		$	2,088,507		5	%
FFO(2)	$	18,100,871		$	18,752,289		$	(651,418	)	(3	)%
MFFO(2)	$	17,521,977		$	19,150,128		$	(1,628,151	)	(9	)%

______________

(1) See “—Net Operating Income” below for a reconciliation of NOI to net loss.

(2) See “—Funds From Operations and Modified Funds From Operations” below for a reconciliation of FFO and MFFO to net loss.

Net loss

For the six months endedJune 30, 2018, we had a net loss of $16,964,272, compared to $15,372,098 for the six months endedJune 30, 2017. The increase in net loss of $1,592,174 over the comparable prior year period was primarily due to the increase in interest expense of $3,024,971, the increase in operating, maintenance and management expenses of $969,796, the increase in real estate taxes and insurance of $89,479, the increase in depreciation and amortization expense of $940,756, and the increase in fees to affiliates of $258,823, partially offset by the increase in total revenues of $3,316,548, the decrease in general and administrative expenses of $372,918, and the decrease in acquisition costs of $2,185. 

Total revenues

Total revenues were $83,842,192 for the six months endedJune 30, 2018, compared to $80,525,644 for the six months endedJune 30, 2017. The increase of $3,316,548 was primarily due to increases in average monthly occupancy and average monthly rents as a result of ordinary monthly rent increases and monthly rent increases driven by our value-enhancement projects. Average monthly occupancy increased from 93.3% as of June 30, 2017, to 94.4% as of June 30, 2018, and average monthly rents per unit increased from $1,124 as of June 30, 2017, to $1,153 as of June 30, 2018. We expect rental income and tenant reimbursements to increase in future periods as a result of ordinary monthly rent increases and the continuing implementation of our value-enhancement strategy.

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PART I — FINANCIAL INFORMATION (continued)

Operating, maintenance and management expenses

Operating, maintenance and management expenses were $20,414,684 for the six months endedJune 30, 2018, compared to $19,444,888 for the six months endedJune 30, 2017. The increase of $969,796 was primarily due to increases in repairs and maintenance, turnover and utility costs during the six months endedJune 30, 2018, compared to the six months endedJune 30, 2017. We expect that these amounts will decrease as a percentage of total revenues as we implement operational efficiencies at our multifamily properties.

Real estate taxes and insurance

Real estate taxes and insurance expenses were $11,647,883 for the six months endedJune 30, 2018, compared to $11,558,404 for the six months endedJune 30, 2017. The increase of $89,479 was due to a reduction in tax credits, as a result of successful challenges relating to prior year real estate tax appeals. We expect these amounts may increase in future periods as a result of municipal property tax rate increases as well as increases in the assessed value of our property portfolio.

Fees to affiliates

Fees to affiliates were $11,623,381 for the six months endedJune 30, 2018, compared to $11,364,558 for the six months endedJune 30, 2017. The increase of $258,823 was primarily due to an increase in investment management fees as a result of the increase in cost of investment from additions to our real estate assets as well as an increase in property management fees as a result of the increase in revenue. We expect fees to affiliates related to the on-going management of our real estate portfolio to increase in future periods as a result of increased investment management fees from anticipated increases in the cost of investments and increased property management fees from anticipated increases in future rental income.

Depreciation and amortization

Depreciation and amortization expenses were $35,065,143 for the six months endedJune 30, 2018, compared to $34,124,387 for the six months endedJune 30, 2017. The increase of $940,756 was primarily due to the net increase in depreciable and amortizable assets of $17,899,771 since June 30, 2017, due to capital improvements. We expect these amounts to increase slightly in future periods as a result of anticipated future enhancements to our real estate portfolio.

Interest expense

Interest expense for the six months endedJune 30, 2018, was $19,324,835, compared to $16,299,864 for the six months endedJune 30, 2017. The increase of $3,024,971 was primarily due to the increase in the notes payable, net balance of $11,482,279 since June 30, 2017, due to financing incurred in connection with the refinancing of six multifamily properties and increases in LIBOR from June 30, 2017 to June 30, 2018, that impacted the interest on our variable rate loans. Included in interest expense is the amortization of deferred financing costs of $493,241 and $509,689, unrealized (gain) loss on derivative instruments of $(578,894) and $395,654, amortization of loan discount of $177,491 and $177,492, and credit facility commitment fees of $14,877 and $24,312 for the six months endedJune 30, 2018 and 2017, respectively. Our interest expense in future periods will vary based on our level of future borrowings, which will depend on the availability and cost of debt financing and the opportunity to acquire real estate and real estate-related investments meeting our investment objectives.

General and administrative expenses

General and administrative expenses for the six months endedJune 30, 2018, were $2,730,538, compared to $3,103,456 for the six months endedJune 30, 2017. These general and administrative costs consisted primarily of legal fees, insurance premiums, audit fees, other professional fees and independent director compensation. The decrease of $372,918 was primarily due to the decrease in overhead costs and legal expenses during the six months endedJune 30, 2018, compared the six months endedJune 30, 2017. We expect general and administrative expenses to decrease as a percentage of total revenues in future periods.

Acquisition costs

Acquisition costs for the six months endedJune 30, 2018, were $0, compared to $2,185 for the six months endedJune 30, 2017. Acquisition costs were consistent, with no meaningful changes from the six months endedJune 30, 2017. We do not expect to incur significant acquisition costs in future periods as we have invested all of the proceeds from our initial public offering.

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PART I — FINANCIAL INFORMATION (continued)

Property Operations for the Three Months Ended June 30, 2018, Compared to the Three Months Ended June 30, 2017

For purposes of evaluating comparative operating performance, we categorize our properties as “same-store” or “non-same-store.” A “same-store” property is a property that was owned at April 1, 2017. A “non-same-store” property is a property that was acquired, placed into service or disposed of after April 1, 2017. As of June 30, 2018, 34 properties were categorized as same-store properties.

The following table presents the same-store and non-same-store results from operations for the three months ended June 30, 2018 and 2017:

	For the Three Months Ended June 30,
	2018		2017		Change $		Change %
Same-store properties:
Revenues	$	42,288,498	$	40,617,173	$	1,671,325	4.1	%
Operating expenses	17,947,290		16,821,185		1,126,105		6.7	%
Net operating income	24,341,208		23,795,988		545,220		2.3	%
Non-same-store properties:
Net operating income	—		—		—
Total Net operating income(1)	$	24,341,208	$	23,795,988	$	545,220

________________

(1) See “—Net Operating Income” below for a reconciliation of NOI to net loss.

Net Operating Income

Same-store net operating income for the three months ended June 30, 2018, was $24,341,208, compared to $23,795,988 for the three months ended June 30, 2017. The 2.3%increase in same-store net operating income was a result of a 4.1%increase in same-store rental revenues partially offset by a 6.7%increase in same-store operating expenses.

Revenues

Same-store revenues for the three months ended June 30, 2018, were $42,288,498, compared to $40,617,173 for the three months ended June 30, 2017. The 4.1%increase in same-store revenues was primarily due to average rent increases at the same-store properties from $1,124 as of June 30, 2017, to $1,153 as of June 30, 2018, as a result of ordinary monthly rent increases and monthly rent increases driven by our value-enhancement projects. In addition, same-store occupancy increased from 93.3% as of June 30, 2017, to 94.4% as of June 30, 2018.

Operating Expenses

Same-store operating expenses for the three months ended June 30, 2018, were $17,947,290, compared to $16,821,185 for the three months ended June 30, 2017. The increase in same-store operating expenses was primarily attributable to higher real estate tax expense and utility costs during the three months ended June 30, 2018, compared to the three months ended June 30, 2017.

Net Operating Income

NOI is a non-GAAP financial measure of performance. NOI is used by investors and our management to evaluate and compare the performance of our properties, to determine trends in earnings and to compute the fair value of our properties as it is not affected by (1) the cost of funds, (2) acquisition costs, (3) non-operating fees to affiliates, (4) the impact of depreciation and amortization expenses as well as gains or losses from the sale of operating real estate assets that are included in net income computed in accordance with GAAP or (5) general and administrative expenses and other gains and losses that are specific to us. The cost of funds is eliminated from net income (loss) because it is specific to our particular financing capabilities and constraints. The cost of funds is also eliminated because it is dependent on historical interest rates and other costs of capital as well as past decisions made by us regarding the appropriate mix of capital which may have changed or may change in the

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PART I — FINANCIAL INFORMATION (continued)

future. Acquisition costs and non-operating fees to affiliates are eliminated because they do not reflect continuing operating costs of the property owner.

Depreciation and amortization expenses as well as gains or losses from the sale of operating real estate assets are eliminated because they may not accurately represent the actual change in value in our multifamily properties that result from use of the properties or changes in market conditions. While certain aspects of real property do decline in value over time in a manner that is reasonably captured by depreciation and amortization, the value of the properties as a whole have historically increased or decreased as a result of changes in overall economic conditions instead of from actual use of the property or the passage of time. Gains and losses from the sale of real property vary from property to property and are affected by market conditions at the time of sale which will usually change from period to period. These gains and losses can create distortions when comparing one period to another or when comparing our operating results to the operating results of other real estate companies that have not made similarly timed purchases or sales. We believe that eliminating these costs from net income is useful because the resulting measure captures the actual revenue generated and actual expenses incurred in operating our properties as well as trends in occupancy rates, rental rates and operating costs.

However, the usefulness of NOI is limited because it excludes general and administrative costs, interest expense, interest income and other expense, acquisition costs, certain fees to affiliates, depreciation and amortization expense and gains or losses from the sale of properties, and other gains and losses as stipulated by GAAP, the level of capital expenditures and leasing costs necessary to maintain the operating performance of our properties, all of which are significant economic costs. NOI may fail to capture significant trends in these components of net income which further limits its usefulness.

NOI is a measure of the operating performance of our properties but does not measure our performance as a whole. NOI is therefore not a substitute for net income (loss) as computed in accordance with GAAP. This measure should be analyzed in conjunction with net income (loss) computed in accordance with GAAP and discussions elsewhere in “—Results of Operations” regarding the components of net income (loss) that are eliminated in the calculation of NOI. Other companies may use different methods for calculating NOI or similarly entitled measures and, accordingly, our NOI may not be comparable to similarly entitled measures reported by other companies that do not define the measure exactly as we do.

The following is a reconciliation of our NOI to net loss for the three and six months endedJune 30, 2018 and 2017 computed in accordance with GAAP:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2018			2017			2018			2017
Net loss	$	(8,946,178	)	$	(6,959,061	)	$	(16,964,272	)	$	(15,372,098	)
Fees to affiliates(1)	4,281,765			4,224,789			8,544,018			8,424,929
Depreciation and amortization	17,629,793			16,725,862			35,065,143			34,124,387
Interest expense	10,231,952			8,417,150			19,324,835			16,299,864
General and administrative expenses	1,330,544			1,589,944			2,730,538			3,103,456
Acquisition costs	—			1,000			—			2,185
Other gains(2)	(186,668		)	(203,696		)	(373,763		)	(344,731		)
Net operating income	$	24,341,208		$	23,795,988		$	48,326,499		$	46,237,992

____________________

(1) Fees to affiliates for the three and six months endedJune 30, 2018, exclude property management fees of $1,221,040 and $2,412,207 and other fees of $323,898 and $667,156, respectively, that are included in NOI. Fees to affiliates for the three and six months endedJune 30, 2017, exclude property management fees of $1,173,907 and $2,316,254 and other fees of $326,891 and $623,375, respectively, that are included in NOI.

(2) Other gains for the three and six months endedJune 30, 2018 and 2017, includes non-recurring insurance claim recoveries that are not included in NOI.

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PART I — FINANCIAL INFORMATION (continued)

Funds from Operations and Modified Funds from Operations

Due to certain unique operating characteristics of real estate companies, as discussed below, NAREIT, an industry trade group, has promulgated a measure known as funds from operations, or FFO, which we believe to be an appropriate supplemental measure to reflect the operating performance of a REIT. The use of FFO is recommended by the REIT industry as a supplemental performance measure. FFO is not equivalent to our net income (loss) as determined under GAAP.

We define FFO, a non-GAAP financial measure, consistent with the standards established by the White Paper on FFO approved by the Board of Governors of NAREIT, as revised in February 2004, or the White Paper. The White Paper defines FFO as net income (loss) computed in accordance with GAAP, excluding gains or losses from sales of property and non-cash impairment charges of real estate related investments, plus real estate related depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. In particular, we believe it is appropriate to disregard impairment charges, as this is a fair value adjustment that is largely based on market fluctuations and assessments regarding general market conditions which can change over time. An asset will only be evaluated for impairment if certain impairment indications exist and if the carrying, or book value, exceeds the total estimated undiscounted future cash flows (including net rental and lease revenues, net proceeds on the sale of the property, and any other ancillary cash flows at a property or group level under GAAP) from such asset. Investors should note, however, that determinations of whether impairment charges have been incurred are based partly on anticipated operating performance, because estimated undiscounted future cash flows from a property, including estimated future net rental and lease revenues, net proceeds on the sale of the property, and certain other ancillary cash flows, are taken into account in determining whether an impairment charge has been incurred. While impairment charges are excluded from the calculation of FFO as described above, investors are cautioned that due to the fact that impairments are based on estimated future undiscounted cash flows and the relatively limited term of our operations, it could be difficult to recover any impairment charges. Our FFO calculation complies with NAREIT’s policy described above.

The historical accounting convention used for real estate assets requires straight-line depreciation of buildings and improvements, which implies that the value of real estate assets diminishes predictably over time, especially if such assets are not adequately maintained or repaired and renovated as required by relevant circumstances and/or as requested or required by lessees for operational purposes in order to maintain the value disclosed. We believe that since real estate values historically rise and fall with market conditions, including inflation, interest rates, the business cycle, unemployment and consumer spending, presentations of operating results for a REIT using historical accounting for depreciation may be less informative. Historical accounting for real estate involves the use of GAAP. Any other method of accounting for real estate such as the fair value method cannot be construed to be any more accurate or relevant than the comparable methodologies of real estate valuation found in GAAP. Nevertheless, we believe that the use of FFO, which excludes the impact of real estate related depreciation and amortization, provides a more complete understanding of our performance to investors and to management, and when compared year over year, reflects the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses, and interest costs, which may not be immediately apparent from net income. However, FFO, and MFFO as described below, should not be construed to be more relevant or accurate than the current GAAP methodology in calculating net income or in its applicability in evaluating our operating performance. The method utilized to evaluate the value and performance of real estate under GAAP should be construed as a more relevant measure of operational performance and considered more prominently than the non-GAAP FFO and MFFO measures and the adjustments to GAAP in calculating FFO and MFFO.

Changes in the accounting and reporting promulgations under GAAP (for acquisition fees and expenses from a capitalization/depreciation model to an expensed-as-incurred model) that were put into effect in 2009 and other changes to GAAP accounting for real estate subsequent to the establishment of NAREIT’s definition of FFO have prompted an increase in cash-settled expenses, specifically acquisition fees and expenses for all industries as items that are expensed under GAAP, that are typically accounted for as operating expenses. Management believes these fees and expenses do not affect our overall long-term operating performance. Publicly registered, non-listed REITs typically have a significant amount of acquisition activity and are substantially more dynamic during their initial years of investment and operation. While other start-up entities may also experience significant acquisition activity during their initial years, we believe that public, non-listed REITs, like us, are unique in that they have a limited life with targeted exit strategies within a relatively limited time frame after acquisition activity ceases. Our board of directors will determine to pursue a liquidity event when it believes that the then-current market conditions are favorable. However, our board of directors does not anticipate evaluating a liquidity event (i.e., listing of our common stock on a national exchange, a merger or sale of our company or another similar transaction) until five years after the completion of our offering stage. Thus, as a limited life REIT, we will not continuously purchase assets and will have a limited life.

Due to the above factors and other unique features of publicly registered, non-listed REITs, the IPA, an industry trade group, has standardized a measure known as MFFO, which the IPA has recommended as a supplemental measure for publicly

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PART I — FINANCIAL INFORMATION (continued)

registered non-listed REITs and which we believe to be another appropriate supplemental measure to reflect the operating performance of a public, non-listed REIT having the characteristics described above. MFFO is not equivalent to our net income or loss as determined under GAAP, and MFFO may not be a useful measure of the impact of long-term operating performance on value if we do not continue to operate with a limited life and targeted exit strategy, as currently intended. We believe that, because MFFO excludes costs that we consider more reflective of investing activities and other non-operating items included in FFO and also excludes acquisition fees and expenses that are not capitalized, as discussed below, and affect our operations only in periods in which properties are acquired, MFFO can provide, on a going forward basis, an indication of the sustainability (that is, the capacity to continue to be maintained) of our operating performance after the period in which we are acquiring our properties and once our portfolio is in place. By providing MFFO, we believe we are presenting useful information that assists investors and analysts to better assess the sustainability of our operating performance after our offering has been completed and our properties have been acquired. We also believe that MFFO is a recognized measure of sustainable operating performance by the non-listed REIT industry. Further, we believe MFFO is useful in comparing the sustainability of our operating performance after our offering and acquisitions are completed with the sustainability of the operating performance of other real estate companies that are not as involved in acquisition activities. Investors are cautioned that MFFO should only be used to assess the sustainability of our operating performance after our offering has been completed and properties have been acquired, as it excludes acquisition costs that have a negative effect on our operating performance during the periods in which properties are acquired.

We define MFFO, a non-GAAP financial measure, consistent with the IPA’s Guideline 2010-01, Supplemental Performance Measure for Publicly Registered, Non-Listed REITs: Modified Funds from Operations, or the Practice Guideline, issued by the IPA in November 2010. The Practice Guideline defines MFFO as FFO further adjusted for the following items, as applicable, included in the determination of GAAP net income: acquisition fees and expenses; amounts relating to deferred rent receivables and amortization of above and below market leases and liabilities (which are adjusted in order to reflect such payments from a GAAP accrual basis to a cash basis of disclosing the rent and lease payments); accretion of discounts and amortization of premiums on debt investments; mark-to-market adjustments included in net income; nonrecurring gains or losses included in net income from the extinguishment or sale of debt, hedges, foreign exchange, derivatives or securities holdings where trading of such holdings is not a fundamental attribute of the business plan, unrealized gains or losses resulting from consolidation from, or deconsolidation to, equity accounting, and after adjustments for consolidated and unconsolidated partnerships and joint ventures, with such adjustments calculated to reflect MFFO on the same basis. The accretion of discounts and amortization of premiums on debt investments, nonrecurring unrealized gains and losses on hedges, foreign exchange, derivatives or securities holdings, unrealized gains and losses resulting from consolidations, as well as other listed cash flow adjustments are adjustments made to net income in calculating the cash flows provided by operating activities and, in some cases, reflect gains or losses which are unrealized and may not ultimately be realized. While we rely on our advisor for managing interest rate, hedge and foreign exchange risk, we do not retain an outside consultant to review all our hedging agreements. Inasmuch as interest rate hedges are not a fundamental part of our operations, we believe it is appropriate to exclude such non-recurring gains and losses in calculating MFFO, as such gains and losses are not reflective of on-going operations.

Our MFFO calculation complies with the IPA’s Practice Guideline described above, except with respect to certain acquisition fees and expenses as discussed below. In calculating MFFO, we exclude acquisition related expenses, amortization of above and below market leases, fair value adjustments of derivative financial instruments, deferred rent receivables and the adjustments of such items related to noncontrolling interests. Historically under GAAP, acquisition fees and expenses were characterized as operating expenses in determining operating net income. However, following the recent publication of ASU 2017-01, Business Combinations (Topic 805): Clarifying the definition of business (“ASU 2017-01”), acquisition fees and expenses are capitalized and depreciated under certain conditions. We elected to early adopt ASU 2017-01. For any future acquisitions, ASU 2017-01 requires a substantial part of acquisition fees and expenses being capitalized and therefore not excluded from the calculation of MFFO but captured as depreciation in calculating FFO. These expenses are paid in cash by us. All paid and accrued acquisition fees and expenses will have negative effects on returns to investors, the potential for future distributions, and cash flows generated by us, unless earnings from operations or net sales proceeds from the disposition of other properties are generated to cover the purchase price of the property, these fees and expenses and other costs related to such property. In the event that proceeds from our offering of shares are not available to fund our reimbursement of acquisition fees and expenses incurred by our advisor, such fees and expenses will need to be reimbursed to our advisor from other sources, including debt, operational earnings or cash flow, net proceeds from the sale of properties, or from ancillary cash flows. The acquisition of properties, and the corresponding acquisition fees and expenses, is the key operational feature of our business plan to generate operational income and cash flow to fund distributions to our stockholders. Further, under GAAP, certain contemplated non-cash fair value and other non-cash adjustments are considered operating non-cash adjustments to net income in determining cash flow from operating activities. In addition, we view fair value adjustments of derivatives and gains and

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PART I — FINANCIAL INFORMATION (continued)

losses from dispositions of assets as non-recurring items or items which are unrealized and may not ultimately be realized, and which are not reflective of on-going operations and are therefore typically adjusted for when assessing operating performance.

Our management uses MFFO and the adjustments used to calculate MFFO in order to evaluate our performance against other public, non-listed REITs which have limited lives with short and defined acquisition periods and targeted exit strategies shortly thereafter. As noted above, MFFO may not be a useful measure of the impact of long-term operating performance on value if we do not continue to operate in this manner. We believe that our use of MFFO and the adjustments used to calculate MFFO allow us to present our performance in a manner that reflects certain characteristics that are unique to public, non-listed REITs, such as their limited life, limited and defined acquisition period and targeted exit strategy, and hence that the use of such measures is useful to investors. By excluding expensed acquisition costs, that are not capitalized, the use of MFFO provides information consistent with management’s analysis of the operating performance of the properties. Additionally, fair value adjustments, which are based on the impact of current market fluctuations and underlying assessments of general market conditions, but can also result from operational factors such as rental and occupancy rates, may not be directly related or attributable to our current operating performance. By excluding such changes that may reflect anticipated and unrealized gains or losses, we believe MFFO provides useful supplemental information.

Presentation of this information is intended to provide useful information to investors as they compare the operating performance to that of other public, non-listed REITs, although it should be noted that not all public, non-listed REITs calculate FFO and MFFO the same way, so comparisons with other public, non-listed REITs may not be meaningful. Furthermore, FFO and MFFO are not necessarily indicative of cash flow available to fund cash needs and should not be considered as an alternative to net income (loss) or income (loss) from continuing operations as an indication of our performance, as an alternative to cash flows from operations as an indication of our liquidity, or indicative of funds available to fund our cash needs, including our ability to make distributions to our stockholders. FFO and MFFO should be reviewed in conjunction with GAAP measurements as an indication of our performance. MFFO has limitations as a performance measure in an offering such as ours where the price of a share of common stock is a stated value and there is no regular net asset value determinations during the offering stage and for a period thereafter. MFFO is useful in assisting management and investors in assessing the sustainability of operating performance in future operating periods, and in particular, after the offering and acquisition stages are complete and net asset value is disclosed. MFFO is not a useful measure in evaluating net asset value because impairments are taken into account in determining net asset value but not in determining MFFO.

Neither the SEC, NAREIT nor any other regulatory body has passed judgment on the acceptability of the adjustments that we use to calculate FFO or MFFO. In the future, the SEC, NAREIT or another regulatory body may decide to standardize the allowable adjustments across the non-listed REIT industry and in response to such standardization we may have to adjust our calculation and characterization of FFO or MFFO accordingly.

Our calculation of FFO and MFFO is presented in the following table for the three and six months endedJune 30, 2018 and 2017:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2018			2017			2018			2017
Reconciliation of net loss to MFFO:
Net loss	$	(8,946,178	)	$	(6,959,061	)	$	(16,964,272	)	$	(15,372,098	)
Depreciation of real estate assets	17,629,793			16,725,862			35,065,143			33,114,275
Amortization of lease-related costs	—			—			—			1,010,112
FFO	8,683,615			9,766,801			18,100,871			18,752,289
Acquisition fees and expenses(1)(2)	—			1,000			—			2,185
Unrealized (gain) loss on derivative instruments	(131,281		)	140,652			(578,894		)	395,654
MFFO	$	8,552,334		$	9,908,453		$	17,521,977		$	19,150,128

________________

(1) By excluding expensed acquisition costs that are not capitalized, management believes MFFO provides useful supplemental information that is comparable for each type of real estate investment and is consistent with management’s analysis of the investing and operating performance of our properties. Acquisition fees and expenses include payments to our advisor or third parties. Historically under GAAP, acquisition fees and expenses were considered operating expenses and as expenses included in the determination of net income (loss) and income (loss)

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PART I — FINANCIAL INFORMATION (continued)

from continuing operations, both of which are performance measures under GAAP. Following the recent publication of ASU 2017-01, acquisition fees and expenses are capitalized and depreciated under certain conditions. We elected to early adopt ASU 2017-01 but did not experience a material impact from adopting this new guidance. All paid and accrued acquisition fees and expenses will have negative effects on returns to investors, the potential for future distributions, and cash flows generated by us, unless earnings from operations or net sales proceeds from the disposition of properties are generated to cover the purchase price of the property, these fees and expenses and other costs related to the property. In the event that proceeds from our public offering are not available to fund our reimbursement of acquisition fees and expenses incurred by our advisor, such fees and expenses will need to be reimbursed to the advisor from other sources, including debt, operational earnings or cash flow, net proceeds from the sale of properties, or from ancillary cash flows. The acquisition of properties, and the corresponding acquisition fees and expenses, is the key operational feature of our business plan to generate operational income and cash flow to fund distributions to its stockholders.

(2) No acquisition fees and expenses were incurred for the three and six months ended June 30, 2018. Acquisition fees and expenses for the three and six months endedJune 30, 2017, include acquisition expenses of $1,000 and $2,185, respectively, that did not meet the criteria for capitalization under ASU 2017-01 and are recorded in acquisition costs in the accompanying consolidated statements of operations.

FFO and MFFO may be used to fund all or a portion of certain capitalizable items that are excluded from FFO and MFFO, such as tenant improvements, building improvements and deferred leasing costs.

Off-Balance Sheet Arrangements

As of June 30, 2018, we had no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Related-Party Transactions and Agreements

We have entered into agreements with our advisor and its affiliates, whereby we pay certain fees to, or reimburse certain expenses of, our advisor or its affiliates for acquisition and advisory fees and expenses, financing coordination fees, organization and offering costs, sales commissions, dealer manager fees, asset and property management fees and expenses, leasing fees and reimbursement of certain operating costs. Refer to Note 7 (Related Party Arrangements) to the unaudited consolidated financial statements included in this quarterly report for a discussion of the various related-party transactions, agreements and fees.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We may be exposed to the effects of interest rate changes as a result of borrowings used to maintain liquidity and to fund the acquisition, expansion and refinancing of our real estate investment portfolio and operations. We may be also exposed to the effects of changes in interest rates as a result of the acquisition and origination of mortgage, mezzanine, bridge and other loans. Our profitability and the value of our investment portfolio may be adversely affected during any period as a result of interest rate changes. Our interest rate risk management objectives are to limit the impact of interest rate changes on earnings, prepayment penalties and cash flows and to lower overall borrowing costs. We have managed and will continue to manage interest rate risk by maintaining a ratio of fixed rate, long-term debt such that floating rate exposure is kept at an acceptable level. In addition, we may utilize a variety of financial instruments, including interest rate caps, collars, floors and swap agreements, in order to limit the effects of changes in interest rates on our operations. When we use these types of derivatives to hedge the risk of interest-earning assets or interest-bearing liabilities, we may be subject to certain risks, including the risk that losses on a hedge position will reduce the funds available for payments to holders of our common stock and that the losses may exceed the amount we invested in the instruments.

We borrow funds and make investments at a combination of fixed and variable rates. Interest rate fluctuations will generally not affect our future earnings or cash flows on our fixed rate debt unless such instruments mature or are otherwise terminated. However, interest rate changes will affect the fair value of our fixed rate instruments. At June 30, 2018, the fair value of our fixed rate debt was $66,526,948 and the carrying value of our fixed rate debt was $67,393,062. The fair value estimate of our fixed rate debt was estimated using a discounted cash flow analysis utilizing rates we would expect to pay for debt of a similar type and remaining maturity if the loans were originated at June 30, 2018. As we expect to hold our fixed rate instruments to

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PART I — FINANCIAL INFORMATION (continued)

maturity and the amounts due under such instruments would be limited to the outstanding principal balance and any accrued and unpaid interest, we do not expect that fluctuations in interest rates, and the resulting change in fair value of our fixed rate instruments, would have a significant impact on our operations.

Conversely, movements in interest rates on our variable rate debt will change our future earnings and cash flows, but not significantly affect the fair value of those instruments. However, changes in required risk premiums will result in changes in the fair value of floating rate instruments. At June 30, 2018, the fair value of our variable rate debt was $943,167,621 and the carrying value of our variable rate debt was $926,405,392. Based on interest rates as of June 30, 2018, if interest rates are 100 basis points higher during the 12 months ending June 30, 2019, interest expense on our variable rate debt would increase by $9,451,516 and if interest rates are 100 basis points lower during the 12 months ending June 30, 2019, interest expense on our variable rate debt would decrease by $9,450,462.

At June 30, 2018, the weighted-average interest rate of our fixed rate debt and variable rate debt was 4.51% and 4.09%, respectively. The weighted-average interest rate of our blended fixed and variable rates was 4.12% at June 30, 2018. The weighted-average interest rate represents the actual interest rate in effect at June 30, 2018 (consisting of the contractual interest rate), using interest rate indices as of June 30, 2018, where applicable.

We may also be exposed to credit risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. If the fair value of a derivative contract is positive, the counterparty will owe us, which creates credit risk for us. If the fair value of a derivative contract is negative, we will owe the counterparty and, therefore, do not have credit risk. We will seek to minimize the credit risk in derivative instruments by entering into transactions with high-quality counterparties. As of June 30, 2018, we did not have counterparty risk on our interest rate cap agreements as the underlying variable rates for each of our interest rate cap agreements as of June 30, 2018 were not in excess of the capped rates. See also Note 10 (Derivative Financial Instruments) to the unaudited consolidated financial statements included in this quarterly report.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms, and that such information is accumulated and communicated to us, including our chief executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, as ours are designed to do, and we necessarily are required to apply our judgment in evaluating whether the benefits of the controls and procedures that we adopt outweigh their costs.

As required by Rules 13a-15(b) and 15d-15(b) of the Exchange Act, an evaluation as of June 30, 2018, was conducted under the supervision and with the participation of our management, including our chief executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, our chief executive officer and principal financial officer concluded that our disclosure controls and procedures, as of June 30, 2018, were effective at the reasonable assurance level.

Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2018, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

50

PART II — OTHER INFORMATION

PART II

Item 1. Legal Proceedings

From time to time we are party to legal proceedings that arise in the ordinary course of our business. Management is not aware of any legal proceedings of which the outcome is reasonably likely to have a material adverse effect on our results of operations or financial condition, nor are we aware of any such legal proceedings contemplated by government agencies.

Item 1A. Risk Factors

There have been no material changes to the risk factors contained in Part I, Item 1A set forth in our Annual Report on Form 10-K filed with the SEC on March 16, 2018.

Our bylaws designate the Circuit Court for Baltimore City, Maryland as the sole and exclusive forum for certain actions and proceedings that may be initiated by our stockholders.

Our bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Circuit Court for Baltimore City, Maryland, or, if that Court does not have jurisdiction, the U.S. District Court for the District of Maryland, Baltimore Division, will be the sole and exclusive forum for: (i) any derivative action or proceeding brought on behalf of our company, (ii) any action asserting a claim of breach of any duty owed by any of our directors or officers or employees to us or to our stockholders, (iii) any action asserting a claim against us or any of our directors or officers or employees arising pursuant to any provision of the Maryland General Corporation Law, or the MGCL, or our charter or bylaws or (iv) any action asserting a claim against us or any of our directors or officers or employees that is governed by the internal affairs doctrine. Any person or entity purchasing or otherwise acquiring or holding any interest in our shares shall be deemed to have notice of and to have consented to these provisions of our bylaws, as they may be amended from time to time. Our board of directors, without stockholder approval, adopted this provision of the bylaws so that we can respond to such litigation more efficiently and reduce the costs associated with our responses to such litigation, particularly litigation that might otherwise be brought in multiple forums. This exclusive forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that the stockholder believes is favorable for disputes with us or our directors, officers, agents or employees, if any, and may discourage lawsuits against us and our directors, officers, agents or employees, if any. Alternatively, if a court were to find this provision of our bylaws inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings notwithstanding that the MGCL expressly provides that the charter or bylaws of a Maryland corporation may require that any internal corporate claim be brought only in courts sitting in one or more specified jurisdictions, we may incur additional costs that we do not currently anticipate associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial condition and results of operations.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

During the three months ended June 30, 2018, we did not sell any equity securities that were not registered under the Securities Act of 1933, or the Securities Act.

51

PART II — OTHER INFORMATION (continued)

During the three months ended June 30, 2018, we fulfilled repurchase requests and repurchased shares of our common stock pursuant to our share repurchase plan as follows:

	Total Number of Shares Requested to be Repurchased(1)	Total Number of Shares Repurchased	Average Price Paid per Share(2)(3)		Approximate Dollar Value of Shares Available That May Yet Be Repurchased Under the Program
April 2018	121,062	—	$	—	(4)
May 2018	18,284	144,440	13.85		(4)
June 2018	92,228	—	—		(4)
	231,574	144,440

____________________

(1) We generally repurchase shares approximately 30 days following the end of the applicable quarter in which requests were received. At June 30, 2018, we had $2,000,000, representing 142,393 shares of outstanding and unfulfilled repurchase requests, all of which were fulfilled on July 31, 2018.

(2) During the three months ended June 30, 2018, we repurchased shares at prices determined as follows:

• 92.5% of the share repurchase price for stockholders who have held their shares for at least one year;

• 95.0% of the share repurchase price for stockholders who have held their shares for at least two years;

• 97.5% of the share repurchase price for stockholders who have held their shares for at least three years; and

• 100% of the share repurchase price for stockholders who have held their shares for at least four years.

The share repurchase price shall be 93% of the most recently determined estimated value per share. Notwithstanding the above, the repurchase price for repurchases sought upon a stockholder’s death, “qualifying disability” or “determination of incompetence” will be the amount the respective stockholder paid to acquire the shares from us.

(3) From inception through June 30, 2018, our share repurchases have been funded exclusively from the net proceeds we received from the sale of shares under our distribution reinvestment plan.

(4) The number of shares that may be repurchased pursuant to the share repurchase plan is limited to: (1) 5% of the weighted-average number of shares outstanding during the prior calendar year and (2) those that can be funded from net proceeds we received from the sale of shares under the distribution reinvestment plan during the prior calendar year, plus such additional funds as may be reserved for that purpose by our board of directors. Our board of directors has further limited the amount of shares that may be repurchased pursuant to our share repurchase plan to $2,000,000 per quarter.

Item 3. Defaults Upon Senior Securities

None.

Item4.  Mine Safety Disclosures

Not applicable.

Item5.  Other Information

None.

52

PART II — OTHER INFORMATION (continued)

Item 6.Exhibits

EXHIBIT LIST

Exhibit	Description
3.1	Articles of Amendment and Restatement of Steadfast Apartment REIT, Inc. (incorporated by reference to Exhibit 3.1 to Pre-Effective Amendment No. 3 to the Registrant’s Registration Statement on Form S-11, filed December 16, 2013, Commission File No. 333-191049)
3.2	Bylaws of Steadfast Apartment REIT, Inc. (incorporated by reference to Exhibit 3.2 to the Registrant’s Registration Statement on Form S-11, filed September 6, 2013, Commission File No. 333-191049)
4.1	Form of Distribution Reinvestment Plan (incorporated by reference to Appendix B to the prospectus, dated April 15, 2015, of the Registrant)
4.2	Form of Redemption Request Form (incorporated by reference to Appendix D to the prospectus, dated April 15, 2015, of the Registrant)
4.3	Form of Application for Transfer (incorporated by reference to Appendix E to the prospectus, dated April 15, 2015, of the Registrant)
4.5	Amended and Restated Distribution Reinvestment Plan (incorporated by reference to Exhibit 4.1 to Post-Effective Amendment No. 12 to Form S-11 on Form S-3, filed April 5, 2016, Commission File No. 333-191049
4.6	Account Update Form (incorporated by reference to Appendix A to Post-Effective Amendment No. 12 to Form S-11 on Form S-3, filed April 5, 2016, Commission File No. 333-191049)
31.1*	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**	Certification of Principal Executive Officer pursuant to 18 U.S.C. 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002
32.2**	Certification of Principal Financial Officer pursuant to 18 U.S.C. 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002

______________

*

Filed herewith.

**

In accordance with Item 601(b)(32) of Regulation S-K, this Exhibit is not deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

53

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.

		Steadfast Apartment REIT, Inc.
Date:	August 9, 2018	By:	/s/ Rodney F. Emery
			Rodney F. Emery
			Chief Executive Officer and Chairman of the Board
			(Principal Executive Officer)
Date:	August 9, 2018	By:	/s/ Kevin J. Keating
			Kevin J. Keating
			Chief Financial Officer and Treasurer
			(Principal Financial and Accounting Officer)

54

EX-31.1

EXHIBIT 31.1

Certification of Principal Executive Officer Pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, Rodney F. Emery, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Steadfast Apartment REIT, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a 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 this 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. The registrant’s other certifying officer and I are 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 controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us 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 our 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 our 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; and

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 (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our 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: August 9, 2018

By:	/s/ Rodney F. Emery
	Rodney F. Emery
	Chief Executive Officer and Chairman of the Board (Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

Certification of Principal Financial and Accounting Officer Pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, Kevin J. Keating, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Steadfast Apartment REIT, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a 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 this 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. The registrant’s other certifying officer and I are 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 controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us 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 our 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 our 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; and

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 (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our 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: August 9, 2018

By:	/s/ Kevin J. Keating
	Kevin J. Keating
	Chief Financial Officer (Principal Financial and Accounting Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

     Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and in connection with the Quarterly Report on Form 10-Q of Steadfast Apartment REIT, Inc. (the “Company”) for the period ended June 30, 2018, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, the Principal Executive Officer of the Company, certifies, to his knowledge, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; 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: August 9, 2018

By:	/s/ Rodney F. Emery
	Rodney F. Emery
	Chief Executive Officer and Chairman of the Board (Principal Executive Officer)

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

     Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and in connection with the Quarterly Report on Form 10-Q of Steadfast Apartment REIT, Inc. (the “Company”) for the period ended June 30, 2018, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, the Principal Financial and Accounting Officer of the Company, certifies, to his knowledge, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; 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: August 9, 2018

By:	/s/ Kevin J. Keating
	Kevin J. Keating
	Chief Financial Officer (Principal Financial and Accounting Officer)

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Aug. 03, 2018
Document and Entity Information
Entity Registrant Name	Steadfast Apartment REIT, Inc.
Entity Central Index Key	0001585219
Document Type	10-Q
Document Period End Date	Jun. 30, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		51,370,650
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2

XML

Consolidated Balance Sheets - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Real Estate:
Land	$ 164,113,072	$ 164,113,072
Building and improvements	1,400,950,596	1,394,779,659
Total real estate, cost	1,565,063,668	1,558,892,731
Less accumulated depreciation and amortization	(182,779,645)	(147,726,630)
Total real estate, net	1,382,284,023	1,411,166,101
Cash and cash equivalents	20,342,021	27,298,855
Restricted cash	12,737,041	11,368,850
Rents and other receivables	1,646,631	1,722,065
Other assets	4,180,791	2,812,186
Total assets	1,421,190,507	1,454,368,057
Liabilities:
Accounts payable and accrued liabilities	27,011,977	27,612,665
Notes Payable, net:
Mortgage notes payable, net	948,896,621	948,557,074
Revolving credit facilities, net	44,901,833	44,848,788
Total notes payable, net	993,798,454	993,405,862
Distributions payable	3,792,428	3,886,730
Due to affiliates	2,372,932	2,760,555
Total liabilities	1,026,975,791	1,027,665,812
Commitments and contingencies (Note 9)
Redeemable common stock	0	36,397,062
Stockholders’ Equity:
Preferred stock, $0.01 par value per share; 100,000,000 shares authorized, no shares issued and outstanding	0	0
Additional paid-in capital	676,854,459	633,186,743
Cumulative distributions and net losses	(283,152,381)	(243,389,996)
Total stockholders’ equity	394,214,716	390,305,183
Total liabilities and stockholders’ equity	1,421,190,507	1,454,368,057
Common Stock [Member]
Notes Payable, net:
Distributions payable	3,792,428	3,886,730
Stockholders’ Equity:
Common/Convertible stock, $0.01 par value per share	512,628	508,426
Convertible Stock [Member]
Stockholders’ Equity:
Common/Convertible stock, $0.01 par value per share	$ 10	$ 10

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2018	Dec. 31, 2017
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	100,000,000	100,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common Stock [Member]
Stock, par value (in dollars per share)	$ 0.01	$ 0.01
Stock, shares authorized (in shares)	999,999,000	999,999,000
Stock, shares issued (in shares)	51,262,810	50,842,640
Stock, shares outstanding (in shares)	51,262,810	50,842,640
Convertible Stock [Member]
Stock, par value (in dollars per share)	$ 0.01	$ 0.01
Stock, shares authorized (in shares)	1,000	1,000
Stock, shares issued (in shares)	1,000	1,000
Stock, shares outstanding (in shares)	1,000	1,000

XML

Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Revenues:
Rental income	$ 37,749,899	$ 36,355,539	$ 74,550,233	$ 71,858,687
Tenant reimbursements and other	4,725,267	4,465,330	9,291,959	8,666,957
Total revenues	42,475,166	40,820,869	83,842,192	80,525,644
Expenses:
Operating, maintenance and management	10,439,849	9,994,030	20,414,684	19,444,888
Real estate taxes and insurance	5,962,503	5,326,357	11,647,883	11,558,404
Fees to affiliates	5,826,703	5,725,587	11,623,381	11,364,558
Depreciation and amortization	17,629,793	16,725,862	35,065,143	34,124,387
Interest expense	10,231,952	8,417,150	19,324,835	16,299,864
General and administrative expenses	1,330,544	1,589,944	2,730,538	3,103,456
Acquisition costs	0	1,000	0	2,185
Total expenses	51,421,344	47,779,930	100,806,464	95,897,742
Net loss	$ (8,946,178)	$ (6,959,061)	$ (16,964,272)	$ (15,372,098)
Loss per common share - basic and diluted (in dollars per share)	$ (0.17)	$ (0.14)	$ (0.33)	$ (0.31)
Weighted average number of common shares outstanding - basic and diluted (in shares)	51,186,141	50,215,167	51,081,717	50,068,960
Distributions declared per share (in dollars per share)	$ 0.224	$ 0.224	$ 0.446	$ 0.446

XML

Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)	Total	Common Stock [Member]	Stock [Member] Common Stock [Member]	Stock [Member] Convertible Stock [Member]	Additional Paid-in Capital [Member]	Cumulative Distributions & Net Losses [Member]
BALANCE, beginning of period (in shares) at Dec. 31, 2016			49,698,486	1,000
BALANCE, beginning of period at Dec. 31, 2016	$ 462,048,286		$ 496,985	$ 10	$ 625,996,383	$ (164,445,092)
Increase (decrease) in Stockholders' Equity
Issuance of common stock (in shares)			1,583,829
Issuance of common stock	23,338,092		$ 15,838		23,322,254
Transfers from redeemable common stock	10,025,412				10,025,412
Redemption of common stock (in shares)			(439,675)
Repurchase of common stock	(6,190,737)		$ (4,397)		(6,186,340)
Distributions declared	(45,321,063)					(45,321,063)
Amortization of stock-based compensation	79,858				79,858
Net loss	(33,623,841)					(33,623,841)
BALANCE, end of period (in shares) at Dec. 31, 2017			50,842,640	1,000
BALANCE, end of period at Dec. 31, 2017	390,305,183		$ 508,426	$ 10	633,186,743	(243,389,996)
Increase (decrease) in Stockholders' Equity
Issuance of common stock (in shares)			766,782
Issuance of common stock	11,469,940		$ 7,668		11,462,272
Commissions on sales of common stock and related dealer manager fees to affiliates	(32,414)				(32,414)
Transfers from redeemable common stock	37,028,102				37,028,102
Redemption of common stock (in shares)			(346,612)
Repurchase of common stock	(4,886,216)		$ (3,466)		(4,882,750)
Distributions declared	(22,798,113)	$ (22,798,113)				(22,798,113)
Amortization of stock-based compensation	27,678				27,678
Net loss	(16,964,272)					(16,964,272)
BALANCE, end of period (in shares) at Jun. 30, 2018			51,262,810	1,000
BALANCE, end of period at Jun. 30, 2018	$ 394,214,716		$ 512,628	$ 10	$ 676,854,459	$ (283,152,381)

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Cash Flows from Operating Activities:
Net loss	$ (8,946,178)	$ (6,959,061)	$ (16,964,272)	$ (15,372,098)	$ (33,623,841)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	17,629,793	16,725,862	35,065,143	34,124,387
Loss on disposal of buildings and improvements			188,369	111,138
Amortization of deferred financing costs	246,966	255,957	493,241	509,689
Amortization of stock-based compensation			27,678	33,756
Change in fair value of interest rate cap agreements			(578,894)	395,654
Amortization of loan discount			177,491	177,492
Insurance claim recoveries			(143,972)	(143,248)
Changes in operating assets and liabilities:
Rents and other receivables			75,434	(399,047)
Other assets			(789,711)	1,332,254
Accounts payable and accrued liabilities			1,373,613	(1,521,376)
Due to affiliates			(146,735)	(1,508,595)
Net cash provided by operating activities			18,777,385	17,740,006
Cash Flows from Investing Activities:
Additions to real estate investments			(7,808,428)	(16,327,840)
Proceeds from insurance claims			143,972	143,248
Net cash used in investing activities			(7,664,456)	(16,184,592)
Cash Flows from Financing Activities:
Principal payments on mortgage notes payable			(278,140)	(132,157)
Borrowings from revolving credit facilities			0	10,000,000
Payments of commissions on sale of common stock			(114,741)	(117,537)
Distributions to common stockholders	(5,824,954)	(5,485,359)	(11,422,475)	(10,741,043)
Repurchase of common stock			(4,886,216)	(2,477,614)
Net cash used in financing activities			(16,701,572)	(3,468,351)
Net decrease in cash, cash equivalents and restricted cash			(5,588,643)	(1,912,937)
Cash, cash equivalents and restricted cash, beginning of the period			38,667,705	38,815,266	38,815,266
Cash, cash equivalents and restricted cash, end of the period	$ 33,079,062	$ 36,902,329	33,079,062	36,902,329	$ 38,667,705
Supplemental Disclosures of Cash Flow Information:
Interest paid			18,585,763	14,968,071
Supplemental Disclosures of Noncash Flow Transactions:
Decrease in distributions payable			(94,302)	(66,389)
Distributions paid to common stockholders through common stock issuances pursuant to the distribution reinvestment plan			11,469,940	11,670,654
(Decrease) increase in redeemable common stock			(36,397,062)	2,071,096
(Decrease) increase in redemptions payable			(631,040)	309,371
Decrease in accounts payable and accrued liabilities from additions to real estate investments			(1,343,261)	(1,606,909)
Decrease in due to affiliates from additions to real estate investments			(93,733)	(138,176)
Decrease in due to affiliates for commissions on sale of common stock			$ (147,155)	$ (117,537)

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Organization and Business

6 Months Ended

Jun. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Business

Organization and Business

Steadfast Apartment REIT, Inc. (the “Company”) was formed on August 22, 2013, as a Maryland corporation that elected to qualify as a real estate investment trust (“REIT”) commencing with the taxable year ended December 31, 2014. On September 3, 2013, the Company was initially capitalized with the sale of 13,500 shares of common stock to Steadfast REIT Investments, LLC (the “Sponsor”) at a purchase price of $15.00 per share for an aggregate purchase price of $202,500. Steadfast Apartment Advisor, LLC (the “Advisor”), a Delaware limited liability company formed on August 22, 2013, invested $1,000 in the Company in exchange for 1,000 shares of non-participating, non-voting convertible stock (the “Convertible Stock”) as described in Note 6 (Stockholders’ Equity).

The Company owns and operates a diverse portfolio of multifamily properties located in targeted markets throughout the United States. As of June 30, 2018, the Company owned 34 multifamily properties comprising a total of 11,601 apartment homes. For more information on the Company’s real estate portfolio, see Note 3 (Real Estate).

Public Offering

On December 30, 2013, the Company commenced its initial public offering to offer a maximum of 66,666,667 shares of common stock for sale to the public at an initial price of $15.00 per share (with discounts available for certain categories of purchasers) (the “Primary Offering”). The Company also registered up to 7,017,544 shares of common stock for sale pursuant to the Company’s distribution reinvestment plan (the “DRP,” and together with the Primary Offering, the “Public Offering”) at an initial price of $14.25 per share. The Company terminated its Public Offering on March 24, 2016, but continues to offer shares of common stock pursuant to the DRP. As of the termination of the Public Offering, the Company had sold 48,625,651 shares of common stock in the Public Offering for gross proceeds of $724,849,631, including 1,011,561 shares of common stock issued pursuant to the DRP for gross offering proceeds of $14,414,752. As of June 30, 2018, the Company had issued 52,180,957 shares of common stock for gross offering proceeds of $777,095,941, including 4,566,930 shares of common stock issued pursuant to the DRP for gross offering proceeds of $66,661,062.

On March 24, 2016, the Company’s board of directors determined an estimated value per share of the Company’s common stock of $14.46 as of December 31, 2015. On February 14, 2017, the Company’s board of directors determined an estimated value per share of the Company’s common stock of $14.85 as of December 31, 2016. On March 14, 2018, the Company’s board of directors determined an estimated value per share of the Company’s common stock of $15.18 as of December 31, 2017. In connection with the determination of an estimated value per share, the Company’s board of directors determined a price per share for the DRP of $14.46, $14.85 and $15.18, effective May 1, 2016, March 1, 2017 and April 1, 2018, respectively. The Company’s board of directors may again, from time to time, in its sole discretion, change the price at which the Company offers shares pursuant to the DRP to reflect changes in the Company’s estimated value per share and other factors that the Company’s board of directors deems relevant. 

The business of the Company is externally managed by the Advisor, pursuant to the Advisory Agreement dated December 13, 2013, by and among the Company, Steadfast Apartment REIT Operating Partnership, L.P. (the “Operating Partnership”) and the Advisor (as amended, the “Advisory Agreement”). The Advisory Agreement is subject to annual renewal by the Company’s board of directors. The current term of the Advisory Agreement expires on December 13, 2018. Subject to certain restrictions and limitations, the Advisor manages the Company’s day-to-day operations, manages the Company’s portfolio of properties and real estate-related assets, sources and presents investment opportunities to the Company’s board of directors and provides investment management services on the Company’s behalf. The Advisor has also entered into an Advisory Services Agreement with Crossroads Capital Advisors, LLC (“Crossroads Capital Advisors”), whereby Crossroads Capital Advisors provides certain advisory services to the Company on behalf of the Advisor. The Company retained Stira Capital Markets Group, LLC (formerly known as Steadfast Capital Markets Group, LLC) (the “Dealer Manager”), an affiliate of the Sponsor, to serve as the dealer manager for the Public Offering. The Dealer Manager was responsible for marketing the Company’s shares of common stock offered pursuant to the Public Offering. The Advisor, along with the Dealer Manager, provides offering services, marketing, investor relations and other administrative services on the Company’s behalf. 

Substantially all of the Company’s business is conducted through the Operating Partnership. The Company is the sole general partner of the Operating Partnership. The Company and Steadfast Apartment REIT Limited Partner, LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Company, entered into a Limited Partnership Agreement (the “Partnership Agreement”) on September 3, 2013.

As the Company accepted subscriptions for shares of its common stock, the Company transferred substantially all of the net offering proceeds from its Public Offering to the Operating Partnership as a contribution in exchange for partnership interests and the Company’s percentage ownership in the Operating Partnership increased proportionately. The Partnership Agreement provides that the Operating Partnership is operated in a manner that will enable the Company to (1) satisfy the requirements for being classified as a REIT for tax purposes, (2) avoid any federal income or excise tax liability and (3) ensure that the Operating Partnership will not be classified as a “publicly traded partnership” for purposes of Section 7704 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), which classification could result in the Operating Partnership being taxed as a corporation. In addition to the administrative and operating costs and expenses incurred by the Operating Partnership in acquiring and operating real properties, the Operating Partnership pays all of the Company’s administrative costs and expenses, and such expenses are treated as expenses of the Operating Partnership.

The Company commenced its real estate operations on May 22, 2014, upon acquiring a fee simple interest in a multifamily property located in Spring Hill, Tennessee.

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

There have been no significant changes to the Company’s accounting policies since it filed its audited financial statements in its Annual Report on Form 10-K for the year ended December 31, 2017, other than the adoption of Accounting Standards Update (“ASU”) 2016-18, as further described below. For further information about the Company’s accounting policies, refer to the Company’s consolidated financial statements and notes thereto for the year ended December 31, 2017, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 16, 2018. 

Principles of Consolidation and Basis of Presentation

The consolidated financial statements include the accounts of the Company, the Operating Partnership and its subsidiaries. All significant intercompany balances and transactions are eliminated in consolidation. The financial statements of the Company’s subsidiaries are prepared using accounting policies consistent with those of the Company.

The accompanying unaudited consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information as contained within the Financial Accounting Standards Board (“FASB”), Accounting Standards Codification (“ASC”) and the rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by GAAP for audited financial statements. In the opinion of management, the financial statements for the unaudited interim periods presented include all adjustments that are of a normal and recurring nature and necessary for a fair and consistent presentation of the results of such periods. Operating results for the three and six months endedJune 30, 2018, are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. The unaudited consolidated financial statements herein should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates.

Fair Value Measurements

Under GAAP, the Company is required to measure certain financial instruments at fair value on a recurring basis. In addition, the Company is required to measure other assets and liabilities at fair value on a non-recurring basis (e.g., carrying value of impaired real estate loans receivable and long-lived assets). Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The GAAP fair value framework uses a three-tiered approach. Fair value measurements are classified and disclosed in one of the following three categories:

• Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities;

• Level 2: quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and

• Level 3: prices or valuation techniques where little or no market data is available that requires inputs that are both significant to the fair value measurement and unobservable.

When available, the Company utilizes quoted market prices from an independent third-party source to determine fair value and will classify such items in Level 1 or Level 2. In instances where the market is not active, regardless of the availability of a nonbinding quoted market price, observable inputs might not be relevant and could require the Company to make a significant adjustment to derive a fair value measurement. Additionally, in an inactive market, a market price quoted from an independent third party may rely more on models with inputs based on information available only to that independent third party. When the Company determines the market for a financial instrument owned by the Company to be illiquid or when market transactions for similar instruments do not appear orderly, the Company uses several valuation sources (including internal valuations, discounted cash flow analysis and quoted market prices) and will establish a fair value by assigning weights to the various valuation sources.

The following describes the valuation methodologies used by the Company to measure fair value, including an indication of the level in the fair value hierarchy in which each asset or liability is generally classified.

Interest rate cap agreements - The Company has entered into certain interest rate cap agreements. These derivatives are recorded at fair value. Fair value was based on a model-driven valuation using the associated variable rate curve and an implied market volatility, both of which were observable at commonly quoted intervals for the full term of the interest rate cap agreements. Therefore, the Company’s interest rate cap agreements were classified within Level 2 of the fair value hierarchy and are included in other assets in the accompanying consolidated balance sheets. Changes in the fair value of the interest rate cap agreements are recorded as interest expense in the accompanying consolidated statements of operations.

The following tables reflect the Company’s assets required to be measured at fair value on a recurring basis on the consolidated balance sheets:

	June 30, 2018
	Fair Value Measurements Using
	Level 1		Level 2		Level 3
Assets:
Interest rate cap agreements	$	—	$	926,303	$	—

	December 31, 2017
	Fair Value Measurements Using
	Level 1		Level 2		Level 3
Assets:
Interest rate cap agreements	$	—	$	347,409	$	—

Changes in assumptions or estimation methodologies can have a material effect on these estimated fair values. In this regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, may not be realized in an immediate settlement of the instrument.

Fair Value of Financial Instruments

The accompanying consolidated balance sheets include the following financial instruments: cash and cash equivalents, restricted cash, rents and other receivables, accounts payable and accrued liabilities, distributions payable, due to affiliates and notes payable.

The Company considers the carrying value of cash and cash equivalents, restricted cash, rents and other receivables, accounts payable and accrued liabilities and distributions payable to approximate the fair value of these financial instruments based on the short duration between origination of the instruments and their expected realization. The fair value of amounts due to affiliates is not determinable due to the related party nature of such amounts. The Company has determined that its notes payable, net are classified as Level 3 within the fair value hierarchy.

The fair value of the notes payable, net is estimated using a discounted cash flow analysis using borrowing rates available to the Company for debt instruments with similar terms and maturities. As of June 30, 2018 and December 31, 2017, the fair value of the notes payable was $1,009,694,569 and $1,011,004,179, respectively, compared to the carrying value of $993,798,455 and $993,405,862, respectively.

Distribution Policy

The Company elected to be taxed as, and currently qualifies as, a REIT commencing with the taxable year ended December 31, 2014. To maintain its qualification as a REIT, the Company intends to make distributions each taxable year equal to at least 90% of its REIT taxable income (which is determined without regard to the dividends-paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP). Distributions declared during the six months ended June 30, 2018, were based on daily record dates and calculated at a rate of $0.002466 per share per day during the period from January 1, 2018 through June 30, 2018.

Distributions to stockholders are determined by the board of directors of the Company and are dependent upon a number of factors relating to the Company, including funds available for the payment of distributions, financial condition, the timing of property acquisitions, capital expenditure requirements and annual distribution requirements in order for the Company to qualify as a REIT under the Internal Revenue Code. During the three and six months endedJune 30, 2018, the Company declared distributions totaling $0.224 and $0.446 per share of common stock, respectively. During the three and six months endedJune 30, 2017, the Company declared distributions totaling $0.224 and $0.446 per share of common stock, respectively.

Per Share Data

Basic loss per share attributable to common stockholders for all periods presented are computed by dividing net loss by the weighted average number of shares of the Company’s common stock outstanding during the period. Diluted loss per share is computed based on the weighted average number of shares of the Company’s common stock and all potentially dilutive securities, if any. Distributions declared per common share assume each share was issued and outstanding each day during the period. Nonvested shares of the Company’s restricted common stock and convertible stock give rise to potentially dilutive shares of the Company’s common stock but such shares were excluded from the computation of diluted earnings per share because such shares were anti-dilutive during the period.

Segment Disclosure

The Company has determined that it has one reportable segment with activities related to investing in multifamily properties. The Company’s investments in real estate are in different geographic regions, and management evaluates operating performance on an individual asset level. However, as each of the Company’s assets has similar economic characteristics, tenants and products and services, its assets have been aggregated into one reportable segment.

Reclassifications

Certain amounts in the Company’s prior period consolidated unaudited financial statements were reclassified to conform to the current period presentation. These reclassifications did not change the results of operations of prior periods. On January 1, 2018, the Company adopted ASU 2016-18, as further described below. As a result, the Company no longer presents transfers between cash and restricted cash in the consolidated statements of cash flows. Instead, restricted cash is included with cash and cash equivalents when reconciling the beginning of the period and end of the period total amounts shown on the consolidated statements of cash flows.

Recent Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). ASU 2014-09 requires an entity to recognize the revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. ASU 2014-09 supersedes the revenue requirements in Revenue Recognition (Topic 605) and most industry-specific guidance throughout the Industry Topics of the Codification. ASU 2014-09 does not apply to lease contracts within the scope of Leases (Topic 840). In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606), which delayed the effective date of ASU 2014-09 by one year, which will result in ASU 2014-09 being effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and is to be applied retrospectively. Early adoption is permitted, but can be no earlier than the original public entity effective date of fiscal years, and interim periods within those years, beginning after December 15, 2016. The Company selected the modified retrospective transition method with a cumulative effect recognized as of the date of adoption and adopted ASU 2014-09 effective January 1, 2018. The Company identified limited sources of revenues from non-lease components, and the Company did not experience a material impact on its revenue recognition in the consolidated financial statements upon adoption. Additionally, there was no impact to the Company’s recognition of rental revenue, as rental revenue from leasing arrangements was specifically excluded from ASU 2014-09.

In February 2016, the FASB issued ASU 2016-02, Leases (“ASU 2016-02”), amending the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU 2016-02 requires a modified retrospective transition approach. ASU 2016-02 will be effective in the first quarter of 2019 and allows for early adoption. The Company is evaluating the impact of ASU 2016-02 on its leases both as it relates to the Company acting as a lessor and as a lessee. Based on the preliminary results of its evaluation, as it relates to the former, the Company does not expect any material impact on the recognition of leases in the consolidated financial statements because under ASU 2016-02, lessors will continue to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases, and operating leases. As it relates to the latter, the Company does not expect a material impact on the recognition of leases in the consolidated financial statements because the quantity of leased equipment by the Company is limited. The Company is finalizing its evaluation of ASU 2016-02 and plans to adopt ASU 2016-02 on January 1, 2019.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230), Restricted Cash (“ASU 2016-18”), thatrequires that a statement of cash flows explains the change during the period in the total of cash, cash equivalents, restricted cash and restricted cash equivalents. Therefore, amounts generally described as restricted cash should be included with cash and cash equivalents when reconciling the beginning of period and end of period total amounts shown on the statement of cash flows. ASU 2016-18 is effective for annual periods beginning after December 15, 2017, and interim periods within those years. Early adoption is permitted. The Company adopted ASU 2016-18 on January 1, 2018 and applied it retrospectively. As a result of adopting ASU 2016-18, the Company began presenting restricted cash along with cash and cash equivalents in its consolidated statements of cash flows.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805)(“ASU 2017-01”): Clarifying the definition of business, that clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of businesses. ASU 2017-01 provides a screen to determine when a set is not a business. If the screen is not met, it (1) requires that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and (2) removes the evaluation of whether a market participant could replace the missing elements. ASU 2017-01 is effective for annual reporting periods beginning after December 15, 2017, and interim periods within those years. Early adoption is permitted. The Company adopted ASU 2017-01 as of January 1, 2017. The Company did not experience a material impact from adopting ASU 2017-01.

In February 2017, the FASB issued ASU 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (“Subtopic 610-20”): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets (“ASU 2017-05”), that clarifies that a financial asset is within the scope of Subtopic 610-20 if it meets the definition of an in substance nonfinancial asset and defines the term in substance nonfinancial asset. ASU 2017-05 also clarifies that nonfinancial assets within the scope of Subtopic 610-20 may include nonfinancial assets transferred within a legal entity to a counterparty. Subtopic 610-20, which was issued in May 2014 as part of ASU 2014-09 (discussed above), provides guidance for recognizing gains and losses from the transfer of nonfinancial assets in contracts with noncustomers. An entity is required to apply amendments in ASU 2017-05 at the same time it applies the amendments in ASU 2014-09. ASU 2017-05 requires retrospective application and is effective for fiscal years beginning after December 15, 2017, including interim reporting periods within those fiscal years. The Company adopted ASU 2017-05 on January 1, 2018. The Company did not experience a material impact from adopting ASU 2017-05.

In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting (“ASU 2017-09”). The FASB issued ASU 2017-09 to provide clarity and reduce both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, Compensation - Stock Compensation, to a change to the terms or conditions of a share-based payment award. The amendments in ASU 2017-09 provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. ASU 2017-09 requires prospective application and is effective for annual periods beginning after December 15, 2017, including interim periods within those fiscal years. The Company adopted ASU 2017-09 on January 1, 2018. The Company did not experience a material impact from adopting ASU 2017-09.

In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements (“ASU 2018-11”). The FASB issued ASU 2018-11 to clarify ASU 2016-02. The amendments in ASU 2018-11 provide entities with an additional (and optional) transition method to adopt the new leases standard. Under this new transition method, an entity initially applies ASU 2016-02 at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. ASU 2018-11 also provides lessors with a practical expedient, by class of underlying asset, to not separate nonlease components from the associated lease component and, instead, to account for those components as a single component if the nonlease components otherwise would be accounted for under the new revenue guidance (Topic 606) and both of the following are met: (1) the timing and pattern of transfer of the nonlease components and associated lease componentare the same, and (2) the lease component, if accounted for separately, would be classified as an operating lease. If the nonlease components associated with the lease component are the predominant component of the combined component, an entity is required to account for the combined component in accordance with Topic 606. Otherwise, the entity must account for the combined component as an operating lease in accordance with Topic 842. For entities that have not adopted Topic 842 before the issuance of ASU 2018-11, the effective date and transition requirements for ASU 2018-11 related to separating components of a contract are the same as the effective date and transition requirements in ASU 2016-02.

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Real Estate

6 Months Ended

Jun. 30, 2018

Real Estate [Abstract]

Real Estate

Real Estate

As of June 30, 2018, the Company owned 34 multifamily properties comprising a total of 11,601 apartment homes. The total contract acquisition price of the Company’s real estate portfolio was $1,499,381,750. As of June 30, 2018 and December 31, 2017, the Company’s portfolio was approximately 94.4% and 93.1% occupied and the average monthly rent was $1,153 and $1,137, respectively.

As of June 30, 2018 and December 31, 2017, accumulated depreciation and amortization related to the Company’s consolidated real estate properties were as follows:

	June 30, 2018
	Assets
	Land		Building and Improvements			Total Real Estate
Investments in real estate	$	164,113,072	$	1,400,950,596		$	1,565,063,668
Less: Accumulated depreciation and amortization	—		(182,779,645		)	(182,779,645		)
Net investments in real estate and related lease intangibles	$	164,113,072	$	1,218,170,951		$	1,382,284,023

	December 31, 2017
	Assets
	Land		Building and Improvements			Total Real Estate
Investments in real estate	$	164,113,072	$	1,394,779,659		$	1,558,892,731
Less: Accumulated depreciation and amortization	—		(147,726,630		)	(147,726,630		)
Net investments in real estate and related lease intangibles	$	164,113,072	$	1,247,053,029		$	1,411,166,101

Depreciation and amortization expense was $17,629,793 and $35,065,143 for the three and six months endedJune 30, 2018, and $16,725,862 and $34,124,387 for the three and six months endedJune 30, 2017, respectively.

Depreciation of the Company’s buildings and improvements was $17,629,793 and $35,065,143 for the three and six months endedJune 30, 2018, and $16,725,862 and $33,114,275 for the three and six months endedJune 30, 2017, respectively.

No amortization of the Company’s tenant origination and absorption costs was recognized for the three and six months endedJune 30, 2018. Amortization of the Company’s tenant origination and absorption costs was $0 and $1,010,112 for the three and six months endedJune 30, 2017. Tenant origination and absorption costs had a weighted-average amortization period as of the date of acquisition of less than one year. As of March 31, 2017, all tenant origination and absorption costs were fully amortized and written off.

Operating Leases

As of June 30, 2018, the Company’s real estate portfolio comprised 11,601 residential apartment homes and was 96.6% leased by a diverse group of residents. The residential lease terms consist of lease durations equal to twelve months or less.

Some residential leases contain provisions to extend the lease agreements, options for early termination after paying a specified penalty and other terms and conditions as negotiated. The Company retains substantially all of the risks and benefits of ownership of the real estate assets leased to tenants. Generally, upon the execution of a lease, the Company requires security deposits from tenants in the form of a cash deposit. Amounts required as security deposits vary depending upon the terms of the respective leases and the creditworthiness of the tenant, but generally are not significant amounts. Therefore, exposure to credit risk exists to the extent that a receivable from a tenant exceeds the amount of its security deposit. Security deposits received in cash related to tenant leases are included in accounts payables and accrued liabilities in the accompanying consolidated balance sheets and totaled $3,928,861 and $3,613,649 as of June 30, 2018 and December 31, 2017, respectively.

As of June 30, 2018 and 2017, no tenant represented over 10% of the Company’s annualized base rent.

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Other Assets

6 Months Ended

Jun. 30, 2018

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Other Assets

Other Assets

As of June 30, 2018 and December 31, 2017, other assets consisted of:

	June 30, 2018		December 31, 2017
Prepaid expenses	$	480,347	$	1,411,353
Interest rate cap agreements	926,303		347,409
Other deposits	2,774,141		1,053,424
Other assets	$	4,180,791	$	2,812,186

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Debt

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Debt

Debt

Mortgage Notes Payable

The following is a summary of mortgage notes payable, net secured by real property as of June 30, 2018 and December 31, 2017.

	June 30, 2018
			Interest Rate Range				Weighted Average Interest Rate
Type	Number of Instruments	Maturity Date Range	Minimum		Maximum			Principal Outstanding
Variable rate(1)	29	12/1/2021 - 9/1/2026	1-Mo LIBOR + 1.61%		1-Mo LIBOR + 2.48%		4.11%	$	888,205,584
Fixed rate	2	7/1/2025 - 5/1/2054	4.34	%	4.60	%	4.51%	67,685,572
Mortgage notes payable, gross	31						4.12%	955,891,156
Discount, net(2)								(2,098,347		)
Deferred financing costs, net(3)								(4,896,188		)
Mortgage notes payable, net								$	948,896,621

	December 31, 2017
			Interest Rate Range				Weighted Average Interest Rate
Type	Number of Instruments	Maturity Date Range	Minimum		Maximum			Principal Outstanding
Variable rate(1)	29	12/1/2021 - 9/1/2026	1-Mo LIBOR + 1.61%		1-Mo LIBOR + 2.48%		3.58%	$	888,345,717
Fixed rate	2	7/1/2025 - 5/1/2054	4.34	%	4.60	%	4.51%	67,823,579
Mortgage notes payable, gross	31						3.63%	956,169,296
Discount, net(2)								(2,275,838		)
Deferred financing costs, net(3)								(5,336,384		)
Mortgage notes payable, net								$	948,557,074

___________

(1) See Note 10 (Derivative Financial Instruments) for a discussion of the interest rate cap agreements used to manage the exposure to interest rate movement on the Company’s variable rate loans.

(2) Accumulated amortization related to the debt discount as of June 30, 2018 and December 31, 2017 was $623,192 and $445,701, respectively.

(3) Accumulated amortization related to deferred financing costs as of June 30, 2018 and December 31, 2017 was $2,674,851 and $2,234,655, respectively.

Refinancing Transactions

On November 29, 2017, threeof the Company’s wholly-owned subsidiaries refinanced their existing loans under the Company’s revolving credit facility for an aggregate principal amount of $93,825,000 and entered into new loan agreements (each a “Tranche 1 Loan Agreement”), with PNC Bank, National Association (“PNC Bank”) for an aggregate principal amount of $100,752,000, (the “November Refinancing Transactions”). Additionally, on December 29, 2017, another three of the Company’s wholly-owned subsidiaries refinanced their existing loans under the revolving credit facility for an aggregate principal amount of $92,475,000 and entered into new loan agreements (each a “Tranche 2 Loan Agreement” and, together with the Tranche 1 Loan Agreement, the “Loan Agreements”) with PNC Bank for an aggregate principal amount of $97,080,000, (the “December Refinancing Transactions,” and, together with the November Refinancing Transactions, the “Refinancing Transactions”).

In the Refinancing Transactions, each Loan Agreement was made pursuant to the Freddie Mac Capital Markets Execution Program (“CME”), as evidenced by a multifamily note. Pursuant to the CME, PNC Bank originates the mortgage loan and then transfers the loan to the Federal Home Loan Mortgage Corporation (“Freddie Mac”). Each Loan Agreement refinanced in November and December provides for a term loan with a maturity of December 1, 2024 or January 1, 2025, respectively, unless the maturity date is accelerated in accordance with its terms. Each loan refinanced in November and December accrues interest at the one-month London Interbank Offered Rate (“LIBOR”) plus 1.94% or 1.88%, respectively. The entire outstanding principal balance and any accrued and unpaid interest on each of the loans are due on the maturity date. Interest and principal payments on the loans are payable monthly in arrears on specified dates as set forth in each loan agreement. Monthly payments are due and payable on the first day of each month commencing on January 1, or February 1, 2018, as applicable.

Revolving Credit Facility

On August 26, 2015, the Company entered into a revolving credit facility (the “Credit Facility”) with PNC Bank, in an amount not to exceed $200,000,000, which provided for advances to purchase properties or refinance existing properties from time to time (subject to certain debt service and loan to value requirements). The Credit Facility had a maturity date of September 1, 2020, subject to extension (the “Maturity Date”). The maximum amount available to be drawn under the Credit Facility could have been increased up to $350,000,000 at any time during the period from January 1, 2016 to 12 months prior to the Maturity Date, as further described in the Credit Agreement (the “Credit Agreement”) entered into by certain of the Company’s wholly-owned subsidiaries with PNC Bank in connection with property acquisitions. For each advance drawn under the Credit Facility, an Addition Fee, as defined in the Credit Agreement, was incurred. Advances made under the Credit Facility were secured by the property for which such advances were used (each a “Loan” and collectively the “Loans”), as evidenced by the Credit Agreement, Multifamily Loan and Security Agreement (the “Loan and Security Agreement”), the Multifamily Revolving Credit Note (the “Note”) and a Multifamily Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing (the “Mortgage”) and a Guaranty from the Company (the “Guaranty,” together with the Credit Agreement, the Loan and Security Agreement, the Note and the Mortgage, the “Loan Documents”). Each Loan was purchased from PNC Bank by Freddie Mac. As of June 30, 2018, the Company had no outstanding balance under the Credit Facility. The Company is in the process of terminating the Credit Facility.

Interest on the outstanding principal balances of the Loans accrued at the one-month LIBOR plus (1) the servicing spread of 0.05% and (2) the net spread, based on the debt service coverage ratio, of between 1.80% and 2.10%, as further described in the applicable Notes. Monthly interest payments were due and payable on the first day of each month until the Maturity Date. The entire outstanding principal balance and any accrued and unpaid interest on the Loans were due and payable in full on the Maturity Date. In addition to monthly interest payments, an unused commitment fee equal to 0.1% of the average daily difference between (1) the amount outstanding and (2) the maximum facility available was due and payable monthly. Additionally, an unused capacity fee equal to 1.0% of the average daily difference between the amount of the (1) maximum facility available and (2) the outstanding borrowing tranches, each as defined in the Credit Agreement, was due and payable monthly. Upon the second anniversary of each advance pursuant to the Credit Facility, a seasoning fee equal to 0.25% of such advance was due and payable monthly. The seasoning fee would increase by 0.25% on each subsequent anniversary until the Maturity Date.

Revolving Line of Credit

On May 18, 2016, the Company entered into a line of credit facility (the “Line of Credit”) with PNC Bank in an amount not to exceed $65,000,000. The Line of Credit provides for advances (each, an “LOC Loan” and collectively, the “LOC Loans”) solely for the purpose of financing the costs in connection with acquisitions and development of real estate projects and for general corporate purposes (subject to certain debt service and loan to value requirements). The Line of Credit has a maturity date of May 17, 2019, subject to extension (the “LOC Maturity Date”), as further described in the loan agreement (the “LOC Loan Agreement”) entered into by certain of the Company’s wholly-owned subsidiaries with PNC Bank in connection with the acquisition of the Landings of Brentwood Property (the “Mortgaged Property”). Advances made under the Line of Credit are secured by the Mortgaged Property, as evidenced by the LOC Loan Agreement, the Revolving Credit Loan Note (the “LOC Note”), the Deed of Trust and a Guaranty from the Company (the “LOC Guaranty,” together with the LOC Loan Agreement and the LOC Note, the “LOC Loan Documents”).

The Company has the option to select the interest rate in respect of the outstanding unpaid principal amount of the LOC Loans from the following options (the “Interest Rate Options”): (1) the sum of the Base Rate (as defined in the LOC Loan Agreement) plus 0.60%, or (2) a rate per annum fixed for the applicable LIBOR Interest Period (as defined in the LOC Loan Agreement) equal to the sum of LIBOR plus 1.60%. The Company may select different Interest Rate Options and different LIBOR Interest Periods to apply simultaneously to the LOC Loans comprising of different Borrowing Tranches (as defined in the LOC Loan Agreement) and may convert to or renew one or more Interest Rate Options with respect to all or any portion of the LOC Loans comprising any borrowing tranche provided that there may not be at any time outstanding more than eight borrowing tranches. Monthly interest payments are due and payable in arrears on the first day of each month and on the LOC Maturity Date. The entire outstanding principal balance and any accrued and unpaid interest on the LOC Loans are due and payable in full on the LOC Maturity Date. As of June 30, 2018, the interest rate on the LOC Loans was 3.69%. In addition to monthly interest payments, the Company will pay PNC Bank a non-refundable commitment fee equal to (a) the average daily difference between (i) the maximum principal amount of the LOC Loans minus (ii) the aggregate outstanding principal amount of all advances multiplied by (b) 0.15%. The commitment fee shall be payable in arrears on the first day of each calendar quarter until the LOC Maturity Date.

As of June 30, 2018 and December 31, 2017, the advances obtained and certain financing costs incurred under the Line of Credit, which is included in revolving credit facilities, net, in the accompanying consolidated balance sheets, are summarized in the following table.

	Amount of Advance as of
	June 30, 2018			December 31, 2017
Principal balance on revolving line of credit, gross(1)	$	45,000,000		$	45,000,000
Deferred financing costs, neton revolving line of credit(2)	(98,167		)	(151,212		)
Revolving credit facilities, net	$	44,901,833		$	44,848,788

___________

(1) Landings of Brentwood is pledged as collateral for repayment of amounts advanced under the Line of Credit.

(2) Accumulated amortization related to deferred financing costs in respect of the Line of Credit as of June 30, 2018 and December 31, 2017, was $226,833 and $173,788, respectively.

Maturity and Interest

The following is a summary of the Company’s aggregate maturities as of June 30, 2018:

					Maturities During the Years Ending December 31,
Contractual Obligations	Total		Remainder of 2018		2019		2020		2021		2022		Thereafter
Principal payments on outstanding debt (1)	$	1,000,891,156	$	2,002,471	$	49,892,887	$	8,291,825	$	49,620,891	$	61,398,874	$	829,684,208

______________

(1) Projected principal payments on outstanding debt obligations are based on the terms of the notes payable agreements. Amounts exclude the amortization of deferred financing costs and debt discount associated with the notes payable.

The Company’s notes payable contain customary financial and non-financial debt covenants. As of June 30, 2018, the Company was in compliance with all debt covenants.

For the three and six months ended June 30, 2018, the Company incurred interest expense of $10,231,952 and $19,324,835, respectively. Interest expense for the three and six months ended June 30, 2018, includes amortization of deferred financing costs of $246,966 and $493,241, net unrealized gains from the change in fair value of interest rate cap agreements of $131,281 and $578,894, amortization of loan discount of $88,746 and $177,491, and Credit Facility commitment fees of $7,479 and $14,877, respectively.

For the three and six months endedJune 30, 2017, the Company incurred interest expense of $8,417,150 and $16,299,864, respectively. Interest expense for the three and six months endedJune 30, 2017, includes amortization of deferred financing costs of $255,957 and $509,689, net unrealized losses from the change in fair value of interest rate cap agreements of $140,652 and $395,654 and Credit Facility commitment fees of $10,942 and $24,312, respectively.

Interest expense of $3,229,175 and $2,581,941 was payable as of June 30, 2018 and December 31, 2017, respectively, and is included in accounts payable and accrued liabilities in the accompanying consolidated balance sheets.

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Stockholders' Equity

6 Months Ended

Jun. 30, 2018

Equity [Abstract]

Stockholders' Equity

Stockholders’ Equity

General

Under the Company’s Articles of Amendment and Restatement (the “Charter”), the total number of shares of capital stock authorized for issuance is 1,100,000,000 shares, consisting of 999,999,000 shares of common stock with a par value of $0.01 per share, 1,000 shares of convertible stock with a par value of $0.01 per share and 100,000,000 shares designated as preferred stock with a par value of $0.01 per share.

Common Stock

The shares of the Company’s common stock entitle the holders to one vote per share on all matters upon which stockholders are entitled to vote, to receive dividends and other distributions as authorized by the Company’s board of directors in accordance with the Maryland General Corporation Law and to all rights of a stockholder pursuant to the Maryland General Corporation Law. The common stock has no preferences or preemptive, conversion or exchange rights.

On September 3, 2013, the Company issued 13,500 shares of common stock to the Sponsor for $202,500. From inception through March 24, 2016, the date of the termination of the Public Offering, the Company had issued 48,625,651 shares of common stock in its Public Offering for offering proceeds of $640,012,497, including 1,011,561 shares of common stock issued pursuant to the DRP for total proceeds of $14,414,752, net of offering costs of $84,837,134. Following the termination of the Public Offering, the Company continues to offer shares pursuant to the DRP. As of June 30, 2018, the Company had issued 52,180,957 shares of common stock for offering proceeds of $692,258,807, including 4,566,930 shares of common stock issued pursuant to the DRP for total proceeds of $66,661,062, net of offering costs of $84,837,134. The offering costs primarily consisted of selling commissions and dealer manager fees.

As further discussed in Note 8 (Incentive Award Plan and Independent Director Compensation), the shares of restricted common stock vest and become non-forfeitable in four equal annual installments beginning on the date of grant and ending on the third anniversary of the date of grant or will become fully vested and become non-forfeitable on the earlier to occur of (1) the termination of the independent director’s service as a director due to his or her death or disability or (2) a change in control of the Company.

The issuance and vesting activity for the six months endedJune 30, 2018, and year ended December 31, 2017, for the restricted stock issued to the Company’s independent directors as compensation for services in connection with the independent directors’ re-election to the board of directors at the Company’s annual meeting is as follows:

	Six Months Ended June 30, 2018	Year Ended December 31, 2017
Nonvested shares at the beginning of the period	7,497	9,997
Granted shares	—	4,998
Vested shares	—	(7,498	)
Nonvested shares at the end of the period	7,497	7,497

Additionally, the weighted average fair value of restricted common stock issued to the Company’s independent directors for the six months endedJune 30, 2018 and year ended December 31, 2017 is as follows:

Grant Year	Weighted Average Fair Value
2017		$14.85
2018	n/a

Included in general and administrative expenses is $13,839 and $27,678 for the three and six months ended June 30, 2018, and $13,887 and $33,756 for the three and six months endedJune 30, 2017, respectively, for compensation expense related to the issuance of restricted common stock. As of June 30, 2018, the compensation expense related to the issuance of the restricted common stock not yet recognized was $61,329. The weighted average remaining term of the restricted common stock was approximately 0.8 years as of June 30, 2018. As of June 30, 2018, no shares of restricted common stock issued to the independent directors have been forfeited.

Convertible Stock

The Company issued 1,000 shares of Convertible Stock to the Advisor for $1,000. The Convertible Stock will convert into shares of common stock if and when: (A) the Company has made total distributions on the then-outstanding shares of its common stock equal to the original issue price of those shares plus an aggregate 6.0% cumulative, non-compounded, annual return on the original issue price of those shares, (B) the Company lists its common stock for trading on a national securities exchange or (C) the Advisory Agreement is terminated or not renewed (other than for “cause” as defined in the Advisory Agreement). In the event of a termination or non-renewal of the Advisory Agreement for cause, all of the shares of the Convertible Stock will be repurchased for $1.00. In general, each share of Convertible Stock will convert into a number of shares of common stock equal to 1/1000 of the quotient of (A) 15% of the excess of (1) the Company’s “enterprise value” plus the aggregate value of distributions paid to date on the then outstanding shares of the Company’s common stock over (2) the aggregate purchase price paid by stockholders for those outstanding shares of common stock plus an aggregated 6.0% cumulative, non-compounded, annual return on the original issue price of those outstanding shares, divided by (B) the Company’s enterprise value divided by the number of outstanding shares of common stock on an as-converted basis, in each case calculated as of the date of the conversion.

Preferred Stock

The Charter also provides the Company’s board of directors with the authority to issue one or more classes or series of preferred stock, and prior to the issuance of such shares of preferred stock, the board of directors shall have the power from time to time to classify or reclassify, in one or more series, any unissued shares and designate the preferences, rights and privileges of such shares of preferred stock. The Company’s board of directors is authorized to amend the Charter without the approval of the stockholders to increase the aggregate number of authorized shares of capital stock or the number of shares of any class or series that the Company has authority to issue. As of June 30, 2018 and December 31, 2017, no shares of the Company’s preferred stock were issued and outstanding.

Distribution Reinvestment Plan

The Company’s board of directors has approved the DRP through which common stockholders may elect to reinvest an amount equal to the distributions declared on their shares of common stock in additional shares of the Company’s common stock in lieu of receiving cash distributions. The purchase price per share under the DRP was initially $14.25. On March 14, 2018, February 14, 2017 and March 24, 2016, the Company’s board of directors determined a price per share for the DRP of $15.18, $14.85 and $14.46, effective April 1, 2018, March 1, 2017 and May 1, 2016, respectively, in connection with the determination of an estimated value per share of the Company’s common stock.

The Company’s board of directors may again, in its sole discretion, from time to time, change this price based upon changes in the Company’s estimated value per share and other factors that the Company’s board of directors deems relevant.

No sales commissions or dealer manager fees are payable on shares sold through the DRP. The Company’s board of directors may amend, suspend or terminate the DRP at its discretion at any time upon ten days’ notice to the Company’s stockholders. Following any termination of the DRP, all subsequent distributions to stockholders will be made in cash.

Share Repurchase Plan and Redeemable Common Stock

The Company’s share repurchase plan may provide an opportunity for stockholders to have their shares of common stock repurchased by the Company, subject to certain restrictions and limitations. No shares can be repurchased under the Company’s share repurchase plan until after the first anniversary of the date of purchase of such shares; provided, however, that this holding period shall not apply to repurchases requested within two years after the death or disability of a stockholder.

From March 29, 2016, the date the Company first published an estimated value per share, until April 14, 2018, the purchase price for shares repurchased under the Company’s share repurchase plan was as follows:

Share Purchase Anniversary	Repurchase Price on Repurchase Date(1)
Less than 1 year	No Repurchase Allowed
1 year	92.5% of Estimated Value per Share(4)
2 years	95.0% of Estimated Value per Share(4)
3 years	97.5% of Estimated Value per Share(4)
4 years	100.0% of Estimated Value per Share(4)
In the event of a stockholder’s death or disability(2)	Average Issue Price for Shares(3)

On March 14, 2018, the board of directors of the Company determined to amend the terms of the Company’s share repurchase plan effective as of April 15, 2018 to (1) limit the amount of shares repurchased pursuant to the Company’s share repurchase plan each quarter to $2,000,000 and (2) revise the repurchase price to an amount equal to 93% of the most recently publicly disclosed estimated value per share. Pursuant to the amended share repurchase program, the new share repurchase price is $14.12 per share, which represents 93% of the estimated value per share of $15.18. The share repurchase price is further reduced based on how long the stockholder has held the shares as follows:

Share Purchase Anniversary	Repurchase Price on Repurchase Date(1)
Less than 1 year	No Repurchase Allowed
1 year	92.5% of the Share Repurchase Price(4)
2 years	95.0% of the Share Repurchase Price(4)
3 years	97.5% of the Share Repurchase Price(4)
4 years	100.0% of the Share Repurchase Price(4)
In the event of a stockholder’s death or disability(2)	Average Issue Price for Shares(3)

________________

(1) As adjusted for any stock dividends, combinations, splits, recapitalizations or any similar transaction with respect to the shares of common stock. Repurchase price includes the full amount paid for each share, including all sales commissions and dealer manager fees.

(2) The required one-year holding period does not apply to repurchases requested within two years after the death or disability of a stockholder.

(3) The purchase price per share for shares repurchased upon the death or disability of a stockholder will be equal to the average issue price per share for all of the stockholder’s shares.

(4) The “Share Repurchase Price” equals 93% of the Estimated Value per Share. The “Estimated Value Per Share” is the most recently publicly disclosed estimated value per share determined by the Company’s board of directors.

The purchase price per share for shares repurchased pursuant to the Company’s share repurchase plan will be further reduced by the aggregate amount of net proceeds per share, if any, distributed to the Company’s stockholders prior to the Repurchase Date (defined below) as a result of the sale of one or more of the Company’s assets that constitutes a return of capital as a result of such sales.

Repurchases of shares of the Company’s common stock are made quarterly upon written request to the Company at least 15 days prior to the end of the applicable quarter. Repurchase requests are honored approximately 30 days following the end of the applicable quarter (“Repurchase Date”). Stockholders may withdraw their repurchase request at any time up to three business days prior to the Repurchase Date. During the three and six months endedJune 30, 2018, the Company repurchased a total of 144,440 and 346,610 shares with a total repurchase value of $2,000,000 and $4,886,216 and received requests for repurchases of 231,575 and 541,527 shares with a total repurchase value of $3,212,937 and $7,475,664, respectively. During the three and six months endedJune 30, 2017, the Company repurchased a total of 102,257 and 178,022 shares with a total repurchase value of $1,424,416 and $2,477,614 and received requests for repurchases of 95,640 and 197,827 shares with a total repurchase value of $1,362,567 and $2,785,983, respectively.

As of June 30, 2018 and June 30, 2017, the Company had 142,393 and 95,640 shares of outstanding and unfulfilled repurchase requests, respectively, and recorded $2,000,000 and $1,362,567 in accounts payable and accrued liabilities on the accompanying consolidated balance sheets related to these unfulfilled repurchase requests, respectively. The Company repurchased the shares of common stock represented by the outstanding repurchase requests as of June 30, 2018 and 2017, of $2,000,000 and $1,362,567 on the July 31, 2018 and July 31, 2017 Repurchase Dates, respectively.

The Company cannot guarantee that the funds set aside for the share repurchase plan will be sufficient to accommodate all repurchase requests made in any quarter. In the event that the Company does not have sufficient funds available to repurchase all of the shares of the Company’s common stock for which repurchase requests have been submitted in any quarter, priority will be given to repurchase requests in the case of the death or disability of a stockholder. If the Company repurchases less than all of the shares subject to a repurchase request in any quarter, with respect to any shares which have not been repurchased, the Company will treat the shares that have not been repurchased as a request for repurchase in the following quarter pursuant to the limitations of the share repurchase plan and when sufficient funds are available, unless the stockholder withdraws the request for repurchase. Such pending requests will be honored among all requests for repurchases in any given repurchase period as follows: first, pro rata as to repurchases sought upon a stockholder’s death or disability; and, next, pro rata as to other repurchase requests.

The Company is not obligated to repurchase shares of its common stock under the share repurchase plan. The share repurchase plan limits the number of shares to be repurchased in any calendar year to (1) 5% of the weighted average number of shares of common stock outstanding during the prior calendar year and (2) those that could be funded from the net proceeds from the sale of shares under the DRP in the prior calendar year, plus such additional funds as may be reserved for that purpose by the Company’s board of directors. Such sources of funds could include cash on hand, cash available from borrowings and cash from liquidations of securities investments as of the end of the applicable month, to the extent that such funds are not otherwise dedicated to a particular use, such as working capital, cash distributions to stockholders or purchases of real estate assets. The Company’s board of directors has further limited the amount of shares that may be repurchased pursuant to the share repurchase plan to $2,000,000 per quarter. There is no fee in connection with a repurchase of shares of the Company’s common stock pursuant to the Company’s share repurchase plan.

The Company’s board of directors may, in its sole discretion, further amend, suspend or terminate the share repurchase plan at any time upon 30 days’ notice to its stockholders if it determines that the funds available to fund the share repurchase plan are needed for other business or operational purposes or that amendment, suspension or termination of the share repurchase plan is in the best interest of the Company’s stockholders. Therefore, a stockholder may not have the opportunity to make a repurchase request prior to any potential termination of the Company’s share repurchase plan. The share repurchase plan will terminate in the event that a secondary market develops for the Company’s shares of common stock.

Pursuant to the share repurchase plan, for the three and six months endedJune 30, 2018, the Company reclassified $0 and $37,028,102, net of $2,000,000 and $4,886,216 of fulfilled redemption requests, respectively, from temporary equity to permanent equity, which is included as additional paid-in capital on the accompanying consolidated balance sheets. For the three and six months endedJune 30, 2017, the Company reclassified $4,458,910 and $2,071,096, net of $1,424,416 and $2,477,614 of fulfilled redemption requests, respectively, from permanent equity to temporary equity, which is included as redeemable common stock on the accompanying consolidated balance sheets.

Distributions

The Company’s long-term policy is to pay distributions solely from cash flow from operations. However, because the Company may receive income from interest or rents at various times during the Company’s fiscal year and because the Company may need cash flow from operations during a particular period to fund capital expenditures and other expenses, the Company expects that from time to time during the Company’s operational stage, the Company will declare distributions in anticipation of cash flow that the Company expects to receive during a later period, and the Company expects to pay these distributions in advance of its actual receipt of these funds. The Company’s board of directors has the authority under its organizational documents, to the extent permitted by Maryland law, to fund distributions from sources such as borrowings, offering proceeds or advances and the deferral of fees and expense reimbursements by the Advisor, in its sole discretion. The Company has not established a limit on the amount of proceeds it may use to fund distributions from sources other than cash flow from operations. If the Company pays distributions from sources other than cash flow from operations, the Company will have fewer funds available and stockholders’ overall return on their investment in the Company may be reduced.

To maintain the Company’s qualification as a REIT, the Company must make aggregate annual distributions to its stockholders of at least 90% of its REIT taxable income (which is computed without regard to the dividends-paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP). If the Company meets the REIT qualification requirements, the Company generally will not be subject to federal income tax on the income that the Company distributes to its stockholders each year.

Distributions Declared

The Company’s board of directors approved a cash distribution that accrued at a rate of $0.002466 per day for each share of the Company’s common stock during the three and six months endedJune 30, 2018, which, if paid over a 365-day period is equivalent to a 6.0% annualized distribution rate based on a purchase price of $15.00 per share of the Company’s common stock. During the three and six months endedJune 30, 2017, a cash distribution accrued at a rate of $0.002466 per day for each share, which, if paid over a 365-day period, is equivalent to a 6.0% annualized distribution rate based on a purchase price of $15.00 per share of the Company’s common stock. The distributions declared accrue daily to stockholders of record as of the close of business on each day and are payable in cumulative amounts on or before the third day of each calendar month with respect to the prior month. There is no guarantee that the Company will continue to pay distributions at this rate or at all.

Distributions declared for the three and six months endedJune 30, 2018, were $11,485,650 and $22,798,113, including $5,698,302 and $11,369,398, or 375,382 and 757,274 shares of common stock, respectively, attributable to the DRP.

Distributions declared for the three and six months endedJune 30, 2017 were $11,267,096 and $22,345,308, including $5,825,338 and $11,599,095, or 392,278 and 784,708 shares of common stock, respectively, attributable to the DRP.

As of June 30, 2018 and December 31, 2017, $3,792,428 and $3,886,730 of distributions declared were payable, which included $1,870,368 and $1,970,910, or 123,213 shares and 132,721 shares of common stock, attributable to the DRP, respectively.

Distributions Paid

For the three and six months endedJune 30, 2018, the Company paid cash distributions of $5,824,954 and $11,422,475, which related to distributions declared for each day in the period from March 1, 2018 through May 31, 2018 and December 1, 2017 through May 31, 2018, respectively. Additionally, for the three and six months endedJune 30, 2018, 382,875 shares and 766,783 shares of common stock were issued pursuant to the DRP for gross offering proceeds of $5,768,910 and $11,469,940, respectively. For the three and six months endedJune 30, 2018, the Company paid total distributions of $11,593,864 and $22,892,415, respectively.

For the three and six months endedJune 30, 2017, the Company paid cash distributions of $5,485,359 and $10,741,043, which related to distributions declared for each day in the period from March 1, 2017 through May 31, 2017 and December 1, 2016 through May 31, 2017, respectively. Additionally, for the three and six months endedJune 30, 2017, 396,184 shares and 793,146 shares of common stock were issued pursuant to the DRP for gross offering proceeds of $5,883,326 and $11,670,654, respectively. For the three and six months endedJune 30, 2017, the Company paid total distributions of $11,368,685 and $22,411,697, respectively.

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Related Party Arrangements

6 Months Ended

Jun. 30, 2018

Related Party Transactions [Abstract]

Related Party Arrangements

Related Party Arrangements

The Company has entered into the Advisory Agreement with the Advisor and a Dealer Manager Agreement with the Dealer Manager. Pursuant to the Advisory Agreement and Dealer Manager Agreement, the Company is or was obligated to pay the Advisor and the Dealer Manager specified fees upon the provision of certain services related to the Public Offering, the investment of funds in real estate and real estate-related investments and the management of the Company’s investments and for other services (including, but not limited to, the disposition of investments). Subject to the limitations described below, the Company is also obligated to reimburse the Advisor and its affiliates for organization and offering costs incurred by the Advisor and its affiliates on behalf of the Company, as well as acquisition and origination expenses and certain operating expenses incurred on behalf of the Company or incurred in connection with providing services to the Company.

Amounts attributable to the Advisor and its affiliates incurred for the three and six months endedJune 30, 2018 and 2017, and amounts attributable to the Advisor and its affiliates that are payable (prepaid) as of June 30, 2018 and December 31, 2017, are as follows:

	Incurred For the					Incurred For the					Payable (prepaid) as of
	Three Months Ended June 30,					Six Months Ended June 30,
	2018		2017			2018		2017			June 30, 2018		December 31, 2017
Consolidated Statements of Operations:
Expensed
Investment management fees(1)	$	4,281,765	$	4,224,789		$	8,544,018	$	8,424,929		$	1,212	$	—
Acquisition expenses(2)	—		(1,185		)	—		—			—		—
Loan coordination fees(1)	—		—			—		—			—		728,100
Property management:
Fees(1)	1,221,040		1,173,907			2,412,207		2,316,254			409,191		396,722
Reimbursement of onsite personnel(3)	3,653,858		3,441,832			7,216,593		6,881,265			1,262,827		766,894
Other fees(1)	323,898		326,891			667,156		623,375			38,009		41,950
Other fees - property operations(3)	22,994		23,301			46,643		50,008			—		—
Other fees - G&A(4)	10,388		11,056			19,687		32,201			—		—
Other operating expenses(4)	279,690		451,937			541,101		893,703			152,068		76,515
Insurance proceeds(5)	—		(72,213		)	—		(172,213		)	—		—
Property insurance(6)	379,095		54,163			758,189		94,432			—		(172,717		)
Consolidated Balance Sheets:
Capitalized
Capital expenditures(7)	1,673		19,516			7,295		19,516			—		—
Construction management:
Fees(7)	51,659		329,541			188,102		881,468			35,938		125,159
Reimbursement of labor costs(7)	267,796		682,153			500,387		1,703,447			58,503		62,876
Additional paid-in capital
Selling commissions	—		—			—		—			415,184		562,339
	$	10,493,856	$	10,665,688		$	20,901,378	$	21,748,385		$	2,372,932	$	2,587,838

_____________________

(1) Included in fees to affiliates in the accompanying consolidated statements of operations.

(2) Included in acquisition costs in the accompanying consolidated statements of operations.

(3) Included in operating, maintenance and management in the accompanying consolidated statements of operations.

(4) Included in general and administrative expenses in the accompanying consolidated statements of operations.

(5) Included in tenant reimbursements and other in the accompanying consolidated statements of operations.

(6) Property related insurance expense and the amortization of the prepaid insurance deductible account are included in general and administrative expenses in the accompanying consolidated statements of operations. The amortization of the prepaid property insurance is included in operating, maintenance and management expenses in the accompanying consolidated statements of operations. The prepaid insurance is included in other assets in the accompanying consolidated balance sheets upon payment.

(7) Included in building and improvements in the accompanying consolidated balance sheets.

Investment Management Fee

The Company pays the Advisor a monthly investment management fee equal to one-twelfth of 1.0% of the cost of the Company’s investments in real properties and real estate-related assets or the Company’s proportionate share thereof in the case of investments made through joint ventures. Such fee is calculated including acquisition fees, acquisition expenses and any debt attributable to such investments.

Acquisition Fees and Expenses

The Company pays the Advisor an acquisition fee equal to 1.0% of the cost of investment, which includes the amount actually paid or budgeted to fund the acquisition, origination, development, construction or improvement (i.e. value-enhancement) of any real property or real estate-related asset acquired. In addition to acquisition fees, the Company reimburses the Advisor for amounts directly incurred by the Advisor and amounts the Advisor pays to third parties in connection with the selection, evaluation, acquisition and development of a property or acquisition of real estate-related assets, whether or not the Company ultimately acquires the property or the real estate-related assets.

The Charter limits the Company’s ability to pay acquisition fees if the total of all acquisition fees and expenses relating to the purchase would exceed 4.5% of the contract purchase price. Under the Charter, a majority of the Company’s board of directors, including a majority of the independent directors, is required to approve any acquisition fees (or portion thereof) that would cause the total of all acquisition fees and expenses relating to an acquisition to exceed 4.5% of the contract purchase price. In connection with the purchase of securities, the acquisition fee may be paid to an affiliate of the Advisor that is registered as a Financial Industry Regulatory Authority, Inc. (“FINRA”) member broker-dealer if applicable FINRA rules would prohibit the payment of the acquisition fee to a firm that is not a registered broker-dealer. 

Loan Coordination Fee

The Company pays the Advisor or its affiliate a loan coordination fee equal to 1.0% of the initial amount of the new debt financed or outstanding debt assumed in connection with the acquisition, development, construction, improvement or origination of a property or a real estate-related asset. In addition, in connection with any financing or the refinancing of any debt (in each case, other than identified at the time of the acquisition of a property or a real estate-related asset), the Company pays the Advisor or its affiliate a loan coordination fee equal to 0.75% of the amount of debt financed or refinanced.

Property Management Fees and Expenses

The Company has entered into property management agreements (each, a “Property Management Agreement”) with Steadfast Management Company, Inc., an affiliate of the Sponsor (the “Property Manager”), in connection with the management of each of the Company’s properties. At June 30, 2018, the property management fee payable with respect to each property under the Property Management Agreements ranged from 2.50% to 3.0% of the annual gross revenue collected at the property, as determined by the Advisor and approved by a majority of the Company’s board of directors, including a majority of the independent directors. Each Property Management Agreement has an initial one-year term and will continue thereafter on a month-to-month basis unless either party gives 60-days’ prior notice of its desire to terminate the Property Management Agreement, provided that the Company may terminate the Property Management Agreement at any time upon a determination of gross negligence, willful misconduct or bad acts of the Property Manager or its employees or upon an uncured breach of the Property Management Agreement upon 30 days’ prior written notice to the Property Manager.

In addition to the property management fee, the Property Management Agreements also specify certain other fees payable to the Property Manager for benefit administration, information technology infrastructure, licenses, support and training services and capital expenditures. The Company also reimburses the Property Manager for the salaries and related benefits of on-site property management employees.

Construction Management Fees and Expenses 

The Company has entered into construction management agreements (each a “Construction Management Agreement”) with Pacific Coast Land & Construction, Inc., an affiliate of the Sponsor (the “Construction Manager”), in connection with capital improvements and renovation or value-enhancement projects for certain properties the Company acquires. The construction management fee payable with respect to each property under the Construction Management Agreements ranges from 8.0% to 12.0% of the costs of the improvements for which the Construction Manager has planning and oversight authority. Generally, each Construction Management Agreement can be terminated by either party with 30 days prior written notice to the other party. Construction management fees are capitalized to the respective real estate properties in the period in which they are incurred as such costs relate to capital improvements and renovations for apartment homes taken out of service while they undergo the planned renovation.

The Company may also reimburse the Construction Manager for the salaries and related benefits of certain of its employees for time spent working on capital improvements and renovations.

Property Insurance

The Company deposits amounts with an affiliate of the Sponsor to fund a prepaid insurance deductible account to cover the cost of required insurance deductibles across all properties of the Company and other affiliated entities. Upon filing a major claim, proceeds from the insurance deductible account may be used by the Company or another affiliate of the Sponsor. In addition, the Company deposits amounts with an affiliate of the Sponsor to cover the cost of property and property related insurance across certain properties of the Company.

Other Operating Expense Reimbursement

In addition to the various fees paid to the Advisor, the Company is obligated to pay directly or reimburse all expenses incurred by the Advisor in providing services to the Company, including the Company’s allocable share of the Advisor’s overhead, such as rent, employee costs, utilities and information technology costs. The Company will not reimburse the Advisor for employee costs in connection with services for which the Advisor or its affiliates receive acquisition fees or disposition fees or for the salaries the Advisor pays to the Company’s executive officers.

The Charter limits the Company’s total operating expenses during any four fiscal quarters to the greater of 2% of the Company’s average invested assets or 25% of the Company’s net income for the same period (the “2%/25% Limitation”). The Company may reimburse the Advisor, at the end of each fiscal quarter, for operating expenses incurred by the Advisor; provided, however, that the Company shall not reimburse the Advisor at the end of any fiscal quarter for operating expenses that exceed the 2%/25% Limitation unless the independent directors have determined that such excess expenses were justified based on unusual and non-recurring factors. The Advisor must reimburse the Company for the amount by which the Company’s operating expenses for the preceding four fiscal quarters then ended exceed the 2%/25% Limitation, unless approved by the independent directors. For purposes of determining the 2%/25% Limitation amount, “average invested assets” means the average monthly book value of the Company’s assets invested directly or indirectly in equity interests and loans secured by real estate during the 12-month period before deducting depreciation, bad debts reserves or other non-cash reserves. “Total operating expenses” means all expenses paid or incurred by the Company that are in any way related to the Company’s operation, including the Company’s allocable share of Advisor overhead and investment management fees, but excluding (a) the expenses of raising capital such as organization and offering expenses, legal, audit, accounting, underwriting, brokerage, listing, registration and other fees, printing and other such expenses and taxes incurred in connection with the issuance, distribution, transfer, listing and registration of shares of the Company’s common stock; (b) interest payments; (c) taxes; (d) non-cash expenditures such as depreciation, amortization and bad debt reserves; (e) reasonable incentive fees based on the gain in the sale of the Company’s assets; (f) acquisition fees and acquisition expenses (including expenses relating to potential acquisitions that the Company does not close); (g) real estate commissions on the resale of investments; and (h) other expenses connected with the acquisition, disposition, management and ownership of investments (including the costs of foreclosure, insurance premiums, legal services, maintenance, repair and improvement of real property).

As of June 30, 2018, the Company’s total operating expenses, as defined above, did not exceed the 2%/25% Limitation.

Disposition Fee

If the Advisor or its affiliates provide a substantial amount of services in connection with the sale of a property or real estate-related asset as determined by a majority of the Company’s independent directors, the Company will pay the Advisor or its affiliates one-half of the brokerage commissions paid, but in no event to exceed 1% of the sales price of each property or real estate-related asset sold. To the extent the disposition fee is paid upon the sale of any assets other than real property, it will be included as an operating expense for purposes of the 2%/25% Limitation. In connection with the sale of securities, the disposition fee may be paid to an affiliate of the Advisor that is registered as a FINRA member broker-dealer if applicable FINRA rules would prohibit the payment of the disposition fee to a firm that is not a registered broker-dealer. As of June 30, 2018, the Company had not sold or otherwise disposed of any properties or any real estate-related assets. Accordingly, the Company had not incurred any disposition fees as of June 30, 2018. 

Selling Commissions and Dealer Manager Fees

The Company paid the Dealer Manager up to 7% and 3% of the gross offering proceeds from the Primary Offering as selling commissions and dealer manager fees, respectively. The Dealer Manager reallowed 100% of sales commissions earned to participating broker-dealers. The Dealer Manager could also reallow to any participating broker-dealer a portion of the dealer manager fee that was attributable to that participating broker-dealer for certain marketing costs of that participating broker-dealer. The Dealer Manager negotiated the reallowance of the dealer manager fee on a case-by-case basis with each participating broker-dealer subject to various factors associated with the cost of the marketing program. The Company allowed a participating broker-dealer to elect to receive the 7% selling commission at the time of sale or elect to have the selling commission paid on a trailing basis. A participating broker-dealer that elected to receive a trailing selling commission is paid as follows: 3% at the time of sale and the remaining 4% paid ratably (1% per year) on each of the first four anniversaries of the sale. A reduced sales commission and dealer manager fee was paid in connection with volume discounts and certain other categories of sales. No sales commission or dealer manager fee was paid with respect to shares of common stock issued pursuant to the DRP. The Company terminated the Public Offering on March 24, 2016, and as of June 30, 2018 and December 31, 2017, expects to pay trailing selling commissions of $415,184 and $562,339, respectively, which were charged to additional paid-in capital and included within amounts due to affiliates in the accompanying consolidated balance sheets.

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Incentive Award Plan and Independent Director Compensation

6 Months Ended

Jun. 30, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Incentive Award Plan and Independent Director Compensation

Incentive Award Plan and Independent Director Compensation

The Company has adopted an incentive award plan (the “Incentive Award Plan”) that provides for the grant of equity awards to its employees, directors and consultants and those of the Company’s affiliates. The Incentive Award Plan authorizes the grant of non-qualified and incentive stock options, restricted stock awards, restricted stock units, stock appreciation rights, dividend equivalents and other stock-based awards or cash-based awards.

Under the Company’s independent directors’ compensation plan, which is a sub-plan of the Incentive Award Plan, each of the Company’s independent directors received 3,333 shares of restricted common stock once the Company raised $2,000,000 in gross offering proceeds in the Public Offering. Each subsequent independent director that joins the Company’s board of directors receives 3,333 shares of restricted common stock upon election to the Company’s board of directors. In addition, on the date following an independent director’s re-election to the Company’s board of directors, he or she receives 1,666 shares of restricted common stock. One-fourth of the shares of restricted common stock generally vest and become non-forfeitable upon issuance and the remaining portion will vest in three equal annual installments beginning on the date of grant and ending on the third anniversary of the date of grant; provided, however, that the restricted stock will become fully vested and become non-forfeitable on the earlier to occur of (1) the termination of the independent director’s service as a director due to his or her death or disability or (2) a change in control of the Company. These awards entitle the holders to participate in distributions.

The Company recorded stock-based compensation expense of $13,839 and $27,678 for the three and six months endedJune 30, 2018 and $13,887 and $33,756 for the three and six months endedJune 30, 2017, respectively, related to the independent directors’ restricted common stock.

In addition to the stock awards, the Company pays each of its independent directors an annual retainer of $55,000, prorated for any partial term (the audit committee chairperson receives an additional $10,000 annual retainer, prorated for any partial term). In addition, the independent directors are paid for attending meetings as follows: (i) $2,500 for each board meeting attended in person, (ii) $1,500 for each committee meeting attended in person in such director’s capacity as a committee member, (iii) $1,000 for each board meeting attended via teleconference (not to exceed $4,000 for any one set of meetings attended on any given day). All directors also receive reimbursement of reasonable out of pocket expenses incurred in connection with attendance at meetings of the board of directors. Director compensation is an operating expense of the Company that is subject to the operating expense reimbursement obligation of the Advisor discussed in Note 7 (Related Party Arrangements). The Company recorded an operating expense of $61,750 and $117,500 for the three and six months endedJune 30, 2018, and $58,750 and $120,500 for the three and six months endedJune 30, 2017, related to the independent directors’ annual retainer and attending board meetings, which is included in general and administrative expenses in the accompanying consolidated statements of operations. As of June 30, 2018 and December 31, 2017, $61,750 and $55,750, respectively, related to the independent directors’ annual retainer and board meetings attendance is included in accounts payable and accrued liabilities in the consolidated balance sheets.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Economic Dependency

The Company is dependent on the Advisor for certain services that are essential to the Company, including the identification, evaluation, negotiation, purchase and disposition of real estate and real estate-related investments; management of the daily operations of the Company’s real estate and real estate-related investment portfolio; and other general and administrative responsibilities. In the event that the Advisor is unable to provide such services, the Company will be required to obtain such services from other sources. The Company may not be able to retain services from such other sources on favorable terms or at all.

Concentration of Credit Risk

The geographic concentration of the Company’s portfolio makes it particularly susceptible to adverse economic developments in the Atlanta, Georgia, Dallas/Fort Worth, Texas and Nashville, Tennessee apartment markets. Any adverse economic or real estate developments in these markets, such as business layoffs or downsizing, relocations of businesses, increased competition from other apartment communities, decrease in demand for apartments or any other changes, could adversely affect the Company’s operating results and its ability to make distributions to stockholders.

Environmental

As an owner of real estate, the Company is subject to various environmental laws of federal, state and local governments. The Company is not aware of any environmental liability that could have a material adverse effect on its financial condition or results of operations. However, changes in applicable environmental laws and regulations, the uses and conditions of properties in the vicinity of the Company’s properties, the activities of its tenants and other environmental conditions of which the Company is unaware with respect to the properties could result in future environmental liabilities.

Legal Matters

From time to time, the Company is subject, or party, to legal proceedings that arise in the ordinary course of its business. Management is not aware of any legal proceedings of which the outcome is reasonably likely to have a material adverse effect on the Company’s results of operations or financial condition nor is the Company aware of any such legal proceedings contemplated by government agencies.

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Derivative Financial Instruments

6 Months Ended

Jun. 30, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Derivative Financial Instruments

The Company uses interest rate derivatives with the objective of managing exposure to interest rate movements thereby minimizing the effect of interest rate changes and the effect they could have on future cash flows. Interest rate cap agreements are used to accomplish this objective. The following table provides the terms of the Company’s interest rate derivative instruments that were in effect at June 30, 2018 and December 31, 2017:

June 30, 2018
Type	Maturity Date Range	Based on	Number of Instruments	Notional Amount		Variable Rate	Weighted Average Rate Cap	Fair Value
Interest Rate Cap	7/1/2018 - 1/1/2021	One-Month LIBOR	28	$	878,428,100	2.09%	3.27%	$	926,303

December 31, 2017
Type	Maturity Date Range	Based on	Number of Instruments	Notional Amount		Variable Rate	Weighted Average Rate Cap	Fair Value
Interest Rate Cap	6/1/2018 - 1/1/2021	One-Month LIBOR	29	$	888,368,100	1.56%	3.17%	$	347,409

The interest rate cap agreements are not designated as effective cash flow hedges. Accordingly, the Company records any changes in the fair value of the interest rate cap agreements as interest expense. The change in the fair value of the interest rate cap agreements for the three and six months endedJune 30, 2018, resulted in an unrealized gain of $131,281 and $578,894 and for the three and six months endedJune 30, 2017, resulted in an unrealized loss of $140,652 and $395,654, respectively, which is included in interest expense in the accompanying consolidated statements of operations. No interest rate cap agreements were acquired during the six months ended June 30, 2018 and 2017. The fair value of the interest rate cap agreements of $926,303 and $347,409 as of June 30, 2018 and December 31, 2017, respectively, is included in other assets on the accompanying consolidated balance sheets.

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Subsequent Events

6 Months Ended

Jun. 30, 2018

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

Distributions Paid

On July 2, 2018, the Company paid distributions of $3,792,428, which related to distributions declared for each day in the period from June 1, 2018 through June 30, 2018 and consisted of cash distributions paid in the amount of $1,922,060 and $1,870,368 in shares issued pursuant to the DRP.

On August 1, 2018, the Company paid distributions of $3,927,609, which related to distributions declared for each day in the period from July 1, 2018 through July 31, 2018 and consisted of cash distributions paid in the amount of $1,999,429 and $1,928,180 in shares issued pursuant to the DRP.

Shares Repurchased

On July 31, 2018, the Company repurchased 142,393 shares of its common stock for a total repurchase value of $2,000,000, or $14.05 per share, pursuant to the Company’s share repurchase program.

Distributions Declared

On August 7, 2018, the Company’s board of directors approved and authorized a daily distribution to stockholders of record as of the close of business on each day of the period commencing on October 1, 2018 and ending on December 31, 2018. The distributions will be equal to $0.002466 per share of the Company’s common stock. The distributions for each record date in October 2018, November 2018 and December 2018 will be paid in November 2018, December 2018 and January 2019, respectively. The distributions will be payable to stockholders from legally available funds therefor.

Refinancings

The Credit Facility

On July 31, 2018, (the “Closing Date”), 16 indirect wholly-owned subsidiaries of the Company terminated the existing mortgage loans with their lenders for an aggregate principal amount of $479,318,649 and entered into a Master Credit Facility Agreement (“MCFA”) with Berkeley Point Capital LLC (“Facility Lender”) for an aggregate principal amount of $551,669,000. The MFCA provides for three tranches: (i) a fixed rate loan in the aggregate principal amount of $331,001,400 that accrues interest at 4.43% per annum; (ii) a fixed rate loan in the aggregate principal amount of $131,917,250 that accrues interest at 4.57%; and (iii) a variable rate loan in the aggregate principal amount of $82,750,350 that accrues interest at the one-month LIBOR plus 1.70%. The loans have a maturity date of August 1, 2028, unless the maturity date is accelerated in accordance with the terms of the loan documents. Interest only payments are payable monthly through August 1, 2025, with interest and principal payments due monthly thereafter. The Company paid $1,930,842 in the aggregate in loan origination fees to the Facility Lender in connection with the refinancings, and the Advisor earned a loan coordination fee of $2,758,345.

The CME Refinancing

On the Closing Date, five indirect wholly-owned subsidiaries of the Company terminated the existing mortgage loans with their lenders for an aggregate principal amount of $131,318,742 and entered into new loan agreements with PNC Bank for an aggregate principal amount of $160,850,000. Each loan agreement provides for a term loan (each a “CME Loan” and, collectively the “CME Loans”) with a maturity date of August 1, 2028, unless the maturity date is accelerated with the loan terms. Each CME Loan accrues interest at a fixed rate of 4.43% per annum (the “Interest Rate”). The entire outstanding principal balance and any accrued and unpaid interest on each of the CME Loans are due on the maturity date. Interest only payments on the CME Loans are payable monthly in arrears on specified dates as set forth in each loan agreement and interest and principal payments are due beginning September 1, 2023. Monthly payments are due and payable on the first day of each month, commencing September 1, 2018. The Company paid $643,400 in the aggregate in loan origination fees to PNC Bank in connection with the refinancings, and the Advisor earned a loan coordination fee of $804,250.

Restricted Stock Grant

On August 8, 2018, the Company granted 1,666 shares of restricted common stock to each of its three independent directors upon their re-election to the Company’s board of directors at the 2018 annual meeting of stockholders.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Principles of Consolidation

The consolidated financial statements include the accounts of the Company, the Operating Partnership and its subsidiaries. All significant intercompany balances and transactions are eliminated in consolidation. The financial statements of the Company’s subsidiaries are prepared using accounting policies consistent with those of the Company.

Basis of Presentation

The accompanying unaudited consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information as contained within the Financial Accounting Standards Board (“FASB”), Accounting Standards Codification (“ASC”) and the rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by GAAP for audited financial statements. In the opinion of management, the financial statements for the unaudited interim periods presented include all adjustments that are of a normal and recurring nature and necessary for a fair and consistent presentation of the results of such periods. Operating results for the three and six months endedJune 30, 2018, are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. The unaudited consolidated financial statements herein should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.

Use of Estimates

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates.

Fair Value Measurements

Fair Value Measurements

Under GAAP, the Company is required to measure certain financial instruments at fair value on a recurring basis. In addition, the Company is required to measure other assets and liabilities at fair value on a non-recurring basis (e.g., carrying value of impaired real estate loans receivable and long-lived assets). Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The GAAP fair value framework uses a three-tiered approach. Fair value measurements are classified and disclosed in one of the following three categories:

• Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities;

• Level 2: quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and

• Level 3: prices or valuation techniques where little or no market data is available that requires inputs that are both significant to the fair value measurement and unobservable.

When available, the Company utilizes quoted market prices from an independent third-party source to determine fair value and will classify such items in Level 1 or Level 2. In instances where the market is not active, regardless of the availability of a nonbinding quoted market price, observable inputs might not be relevant and could require the Company to make a significant adjustment to derive a fair value measurement. Additionally, in an inactive market, a market price quoted from an independent third party may rely more on models with inputs based on information available only to that independent third party. When the Company determines the market for a financial instrument owned by the Company to be illiquid or when market transactions for similar instruments do not appear orderly, the Company uses several valuation sources (including internal valuations, discounted cash flow analysis and quoted market prices) and will establish a fair value by assigning weights to the various valuation sources.

The following describes the valuation methodologies used by the Company to measure fair value, including an indication of the level in the fair value hierarchy in which each asset or liability is generally classified.

Interest rate cap agreements - The Company has entered into certain interest rate cap agreements. These derivatives are recorded at fair value. Fair value was based on a model-driven valuation using the associated variable rate curve and an implied market volatility, both of which were observable at commonly quoted intervals for the full term of the interest rate cap agreements. Therefore, the Company’s interest rate cap agreements were classified within Level 2 of the fair value hierarchy and are included in other assets in the accompanying consolidated balance sheets. Changes in the fair value of the interest rate cap agreements are recorded as interest expense in the accompanying consolidated statements of operations.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The accompanying consolidated balance sheets include the following financial instruments: cash and cash equivalents, restricted cash, rents and other receivables, accounts payable and accrued liabilities, distributions payable, due to affiliates and notes payable.

The Company considers the carrying value of cash and cash equivalents, restricted cash, rents and other receivables, accounts payable and accrued liabilities and distributions payable to approximate the fair value of these financial instruments based on the short duration between origination of the instruments and their expected realization. The fair value of amounts due to affiliates is not determinable due to the related party nature of such amounts. The Company has determined that its notes payable, net are classified as Level 3 within the fair value hierarchy.

The fair value of the notes payable, net is estimated using a discounted cash flow analysis using borrowing rates available to the Company for debt instruments with similar terms and maturities.

Distribution Policy

Distribution Policy

The Company elected to be taxed as, and currently qualifies as, a REIT commencing with the taxable year ended December 31, 2014. To maintain its qualification as a REIT, the Company intends to make distributions each taxable year equal to at least 90% of its REIT taxable income (which is determined without regard to the dividends-paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP). Distributions declared during the six months ended June 30, 2018, were based on daily record dates and calculated at a rate of $0.002466 per share per day during the period from January 1, 2018 through June 30, 2018.

Distributions to stockholders are determined by the board of directors of the Company and are dependent upon a number of factors relating to the Company, including funds available for the payment of distributions, financial condition, the timing of property acquisitions, capital expenditure requirements and annual distribution requirements in order for the Company to qualify as a REIT under the Internal Revenue Code.

Per Share Data

Per Share Data

Basic loss per share attributable to common stockholders for all periods presented are computed by dividing net loss by the weighted average number of shares of the Company’s common stock outstanding during the period. Diluted loss per share is computed based on the weighted average number of shares of the Company’s common stock and all potentially dilutive securities, if any. Distributions declared per common share assume each share was issued and outstanding each day during the period. Nonvested shares of the Company’s restricted common stock and convertible stock give rise to potentially dilutive shares of the Company’s common stock but such shares were excluded from the computation of diluted earnings per share because such shares were anti-dilutive during the period.

Segment Disclosure

Segment Disclosure

The Company has determined that it has one reportable segment with activities related to investing in multifamily properties. The Company’s investments in real estate are in different geographic regions, and management evaluates operating performance on an individual asset level. However, as each of the Company’s assets has similar economic characteristics, tenants and products and services, its assets have been aggregated into one reportable segment.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). ASU 2014-09 requires an entity to recognize the revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. ASU 2014-09 supersedes the revenue requirements in Revenue Recognition (Topic 605) and most industry-specific guidance throughout the Industry Topics of the Codification. ASU 2014-09 does not apply to lease contracts within the scope of Leases (Topic 840). In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606), which delayed the effective date of ASU 2014-09 by one year, which will result in ASU 2014-09 being effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and is to be applied retrospectively. Early adoption is permitted, but can be no earlier than the original public entity effective date of fiscal years, and interim periods within those years, beginning after December 15, 2016. The Company selected the modified retrospective transition method with a cumulative effect recognized as of the date of adoption and adopted ASU 2014-09 effective January 1, 2018. The Company identified limited sources of revenues from non-lease components, and the Company did not experience a material impact on its revenue recognition in the consolidated financial statements upon adoption. Additionally, there was no impact to the Company’s recognition of rental revenue, as rental revenue from leasing arrangements was specifically excluded from ASU 2014-09.

In February 2016, the FASB issued ASU 2016-02, Leases (“ASU 2016-02”), amending the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU 2016-02 requires a modified retrospective transition approach. ASU 2016-02 will be effective in the first quarter of 2019 and allows for early adoption. The Company is evaluating the impact of ASU 2016-02 on its leases both as it relates to the Company acting as a lessor and as a lessee. Based on the preliminary results of its evaluation, as it relates to the former, the Company does not expect any material impact on the recognition of leases in the consolidated financial statements because under ASU 2016-02, lessors will continue to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases, and operating leases. As it relates to the latter, the Company does not expect a material impact on the recognition of leases in the consolidated financial statements because the quantity of leased equipment by the Company is limited. The Company is finalizing its evaluation of ASU 2016-02 and plans to adopt ASU 2016-02 on January 1, 2019.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230), Restricted Cash (“ASU 2016-18”), thatrequires that a statement of cash flows explains the change during the period in the total of cash, cash equivalents, restricted cash and restricted cash equivalents. Therefore, amounts generally described as restricted cash should be included with cash and cash equivalents when reconciling the beginning of period and end of period total amounts shown on the statement of cash flows. ASU 2016-18 is effective for annual periods beginning after December 15, 2017, and interim periods within those years. Early adoption is permitted. The Company adopted ASU 2016-18 on January 1, 2018 and applied it retrospectively. As a result of adopting ASU 2016-18, the Company began presenting restricted cash along with cash and cash equivalents in its consolidated statements of cash flows.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805)(“ASU 2017-01”): Clarifying the definition of business, that clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of businesses. ASU 2017-01 provides a screen to determine when a set is not a business. If the screen is not met, it (1) requires that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and (2) removes the evaluation of whether a market participant could replace the missing elements. ASU 2017-01 is effective for annual reporting periods beginning after December 15, 2017, and interim periods within those years. Early adoption is permitted. The Company adopted ASU 2017-01 as of January 1, 2017. The Company did not experience a material impact from adopting ASU 2017-01.

In February 2017, the FASB issued ASU 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (“Subtopic 610-20”): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets (“ASU 2017-05”), that clarifies that a financial asset is within the scope of Subtopic 610-20 if it meets the definition of an in substance nonfinancial asset and defines the term in substance nonfinancial asset. ASU 2017-05 also clarifies that nonfinancial assets within the scope of Subtopic 610-20 may include nonfinancial assets transferred within a legal entity to a counterparty. Subtopic 610-20, which was issued in May 2014 as part of ASU 2014-09 (discussed above), provides guidance for recognizing gains and losses from the transfer of nonfinancial assets in contracts with noncustomers. An entity is required to apply amendments in ASU 2017-05 at the same time it applies the amendments in ASU 2014-09. ASU 2017-05 requires retrospective application and is effective for fiscal years beginning after December 15, 2017, including interim reporting periods within those fiscal years. The Company adopted ASU 2017-05 on January 1, 2018. The Company did not experience a material impact from adopting ASU 2017-05.

In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting (“ASU 2017-09”). The FASB issued ASU 2017-09 to provide clarity and reduce both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, Compensation - Stock Compensation, to a change to the terms or conditions of a share-based payment award. The amendments in ASU 2017-09 provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. ASU 2017-09 requires prospective application and is effective for annual periods beginning after December 15, 2017, including interim periods within those fiscal years. The Company adopted ASU 2017-09 on January 1, 2018. The Company did not experience a material impact from adopting ASU 2017-09.

In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements (“ASU 2018-11”). The FASB issued ASU 2018-11 to clarify ASU 2016-02. The amendments in ASU 2018-11 provide entities with an additional (and optional) transition method to adopt the new leases standard. Under this new transition method, an entity initially applies ASU 2016-02 at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. ASU 2018-11 also provides lessors with a practical expedient, by class of underlying asset, to not separate nonlease components from the associated lease component and, instead, to account for those components as a single component if the nonlease components otherwise would be accounted for under the new revenue guidance (Topic 606) and both of the following are met: (1) the timing and pattern of transfer of the nonlease components and associated lease componentare the same, and (2) the lease component, if accounted for separately, would be classified as an operating lease. If the nonlease components associated with the lease component are the predominant component of the combined component, an entity is required to account for the combined component in accordance with Topic 606. Otherwise, the entity must account for the combined component as an operating lease in accordance with Topic 842. For entities that have not adopted Topic 842 before the issuance of ASU 2018-11, the effective date and transition requirements for ASU 2018-11 related to separating components of a contract are the same as the effective date and transition requirements in ASU 2016-02.

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Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Schedule of Assets Required to be Measured at Fair Value on a Recurring Basis

The following tables reflect the Company’s assets required to be measured at fair value on a recurring basis on the consolidated balance sheets:

	June 30, 2018
	Fair Value Measurements Using
	Level 1		Level 2		Level 3
Assets:
Interest rate cap agreements	$	—	$	926,303	$	—

	December 31, 2017
	Fair Value Measurements Using
	Level 1		Level 2		Level 3
Assets:
Interest rate cap agreements	$	—	$	347,409	$	—

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Real Estate (Tables)

6 Months Ended

Jun. 30, 2018

Real Estate [Abstract]

Schedule of Accumulated Depreciation and Amortization Related to Consolidated Real Estate Properties and Related Intangibles

As of June 30, 2018 and December 31, 2017, accumulated depreciation and amortization related to the Company’s consolidated real estate properties were as follows:

	June 30, 2018
	Assets
	Land		Building and Improvements			Total Real Estate
Investments in real estate	$	164,113,072	$	1,400,950,596		$	1,565,063,668
Less: Accumulated depreciation and amortization	—		(182,779,645		)	(182,779,645		)
Net investments in real estate and related lease intangibles	$	164,113,072	$	1,218,170,951		$	1,382,284,023

	December 31, 2017
	Assets
	Land		Building and Improvements			Total Real Estate
Investments in real estate	$	164,113,072	$	1,394,779,659		$	1,558,892,731
Less: Accumulated depreciation and amortization	—		(147,726,630		)	(147,726,630		)
Net investments in real estate and related lease intangibles	$	164,113,072	$	1,247,053,029		$	1,411,166,101

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Other Assets (Tables)

6 Months Ended

Jun. 30, 2018

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of Other Assets

As of June 30, 2018 and December 31, 2017, other assets consisted of:

	June 30, 2018		December 31, 2017
Prepaid expenses	$	480,347	$	1,411,353
Interest rate cap agreements	926,303		347,409
Other deposits	2,774,141		1,053,424
Other assets	$	4,180,791	$	2,812,186

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Debt (Tables)

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Summary of Mortgage Notes Payable Secured by Real Property

The following is a summary of mortgage notes payable, net secured by real property as of June 30, 2018 and December 31, 2017.

	June 30, 2018
			Interest Rate Range				Weighted Average Interest Rate
Type	Number of Instruments	Maturity Date Range	Minimum		Maximum			Principal Outstanding
Variable rate(1)	29	12/1/2021 - 9/1/2026	1-Mo LIBOR + 1.61%		1-Mo LIBOR + 2.48%		4.11%	$	888,205,584
Fixed rate	2	7/1/2025 - 5/1/2054	4.34	%	4.60	%	4.51%	67,685,572
Mortgage notes payable, gross	31						4.12%	955,891,156
Discount, net(2)								(2,098,347		)
Deferred financing costs, net(3)								(4,896,188		)
Mortgage notes payable, net								$	948,896,621

	December 31, 2017
			Interest Rate Range				Weighted Average Interest Rate
Type	Number of Instruments	Maturity Date Range	Minimum		Maximum			Principal Outstanding
Variable rate(1)	29	12/1/2021 - 9/1/2026	1-Mo LIBOR + 1.61%		1-Mo LIBOR + 2.48%		3.58%	$	888,345,717
Fixed rate	2	7/1/2025 - 5/1/2054	4.34	%	4.60	%	4.51%	67,823,579
Mortgage notes payable, gross	31						3.63%	956,169,296
Discount, net(2)								(2,275,838		)
Deferred financing costs, net(3)								(5,336,384		)
Mortgage notes payable, net								$	948,557,074

___________

(1) See Note 10 (Derivative Financial Instruments) for a discussion of the interest rate cap agreements used to manage the exposure to interest rate movement on the Company’s variable rate loans.

(2) Accumulated amortization related to the debt discount as of June 30, 2018 and December 31, 2017 was $623,192 and $445,701, respectively.

(3) Accumulated amortization related to deferred financing costs as of June 30, 2018 and December 31, 2017 was $2,674,851 and $2,234,655, respectively.

Summary of Advances Obtained and Certain Financing Costs Incurred Under the Credit Facility

As of June 30, 2018 and December 31, 2017, the advances obtained and certain financing costs incurred under the Line of Credit, which is included in revolving credit facilities, net, in the accompanying consolidated balance sheets, are summarized in the following table.

	Amount of Advance as of
	June 30, 2018			December 31, 2017
Principal balance on revolving line of credit, gross(1)	$	45,000,000		$	45,000,000
Deferred financing costs, neton revolving line of credit(2)	(98,167		)	(151,212		)
Revolving credit facilities, net	$	44,901,833		$	44,848,788

___________

(1) Landings of Brentwood is pledged as collateral for repayment of amounts advanced under the Line of Credit.

(2) Accumulated amortization related to deferred financing costs in respect of the Line of Credit as of June 30, 2018 and December 31, 2017, was $226,833 and $173,788, respectively.

Summary of Aggregate Maturities

The following is a summary of the Company’s aggregate maturities as of June 30, 2018:

					Maturities During the Years Ending December 31,
Contractual Obligations	Total		Remainder of 2018		2019		2020		2021		2022		Thereafter
Principal payments on outstanding debt (1)	$	1,000,891,156	$	2,002,471	$	49,892,887	$	8,291,825	$	49,620,891	$	61,398,874	$	829,684,208

______________

(1) Projected principal payments on outstanding debt obligations are based on the terms of the notes payable agreements. Amounts exclude the amortization of deferred financing costs and debt discount associated with the notes payable.

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Stockholders' Equity (Tables)

6 Months Ended

Jun. 30, 2018

Equity [Abstract]

Schedule of Restricted Stock Issued to Independent Directors as Compensation for Services

The issuance and vesting activity for the six months endedJune 30, 2018, and year ended December 31, 2017, for the restricted stock issued to the Company’s independent directors as compensation for services in connection with the independent directors’ re-election to the board of directors at the Company’s annual meeting is as follows:

	Six Months Ended June 30, 2018	Year Ended December 31, 2017
Nonvested shares at the beginning of the period	7,497	9,997
Granted shares	—	4,998
Vested shares	—	(7,498	)
Nonvested shares at the end of the period	7,497	7,497

Additionally, the weighted average fair value of restricted common stock issued to the Company’s independent directors for the six months endedJune 30, 2018 and year ended December 31, 2017 is as follows:

Grant Year	Weighted Average Fair Value
2017		$14.85
2018	n/a

Schedule of Share Repurchase Plan Following Estimated Value Per Share of Common Stock is Published

From March 29, 2016, the date the Company first published an estimated value per share, until April 14, 2018, the purchase price for shares repurchased under the Company’s share repurchase plan was as follows:

Share Purchase Anniversary	Repurchase Price on Repurchase Date(1)
Less than 1 year	No Repurchase Allowed
1 year	92.5% of Estimated Value per Share(4)
2 years	95.0% of Estimated Value per Share(4)
3 years	97.5% of Estimated Value per Share(4)
4 years	100.0% of Estimated Value per Share(4)
In the event of a stockholder’s death or disability(2)	Average Issue Price for Shares(3)

On March 14, 2018, the board of directors of the Company determined to amend the terms of the Company’s share repurchase plan effective as of April 15, 2018 to (1) limit the amount of shares repurchased pursuant to the Company’s share repurchase plan each quarter to $2,000,000 and (2) revise the repurchase price to an amount equal to 93% of the most recently publicly disclosed estimated value per share. Pursuant to the amended share repurchase program, the new share repurchase price is $14.12 per share, which represents 93% of the estimated value per share of $15.18. The share repurchase price is further reduced based on how long the stockholder has held the shares as follows:

Share Purchase Anniversary	Repurchase Price on Repurchase Date(1)
Less than 1 year	No Repurchase Allowed
1 year	92.5% of the Share Repurchase Price(4)
2 years	95.0% of the Share Repurchase Price(4)
3 years	97.5% of the Share Repurchase Price(4)
4 years	100.0% of the Share Repurchase Price(4)
In the event of a stockholder’s death or disability(2)	Average Issue Price for Shares(3)

________________

(1) As adjusted for any stock dividends, combinations, splits, recapitalizations or any similar transaction with respect to the shares of common stock. Repurchase price includes the full amount paid for each share, including all sales commissions and dealer manager fees.

(2) The required one-year holding period does not apply to repurchases requested within two years after the death or disability of a stockholder.

(3) The purchase price per share for shares repurchased upon the death or disability of a stockholder will be equal to the average issue price per share for all of the stockholder’s shares.

(4) The “Share Repurchase Price” equals 93% of the Estimated Value per Share. The “Estimated Value Per Share” is the most recently publicly disclosed estimated value per share determined by the Company’s board of directors.

Schedule of Share Repurchase Plan Prior to Estimated Value Per Share of Common Stock is Published

From March 29, 2016, the date the Company first published an estimated value per share, until April 14, 2018, the purchase price for shares repurchased under the Company’s share repurchase plan was as follows:

Share Purchase Anniversary	Repurchase Price on Repurchase Date(1)
Less than 1 year	No Repurchase Allowed
1 year	92.5% of Estimated Value per Share(4)
2 years	95.0% of Estimated Value per Share(4)
3 years	97.5% of Estimated Value per Share(4)
4 years	100.0% of Estimated Value per Share(4)
In the event of a stockholder’s death or disability(2)	Average Issue Price for Shares(3)

On March 14, 2018, the board of directors of the Company determined to amend the terms of the Company’s share repurchase plan effective as of April 15, 2018 to (1) limit the amount of shares repurchased pursuant to the Company’s share repurchase plan each quarter to $2,000,000 and (2) revise the repurchase price to an amount equal to 93% of the most recently publicly disclosed estimated value per share. Pursuant to the amended share repurchase program, the new share repurchase price is $14.12 per share, which represents 93% of the estimated value per share of $15.18. The share repurchase price is further reduced based on how long the stockholder has held the shares as follows:

Share Purchase Anniversary	Repurchase Price on Repurchase Date(1)
Less than 1 year	No Repurchase Allowed
1 year	92.5% of the Share Repurchase Price(4)
2 years	95.0% of the Share Repurchase Price(4)
3 years	97.5% of the Share Repurchase Price(4)
4 years	100.0% of the Share Repurchase Price(4)
In the event of a stockholder’s death or disability(2)	Average Issue Price for Shares(3)

________________

(1) As adjusted for any stock dividends, combinations, splits, recapitalizations or any similar transaction with respect to the shares of common stock. Repurchase price includes the full amount paid for each share, including all sales commissions and dealer manager fees.

(2) The required one-year holding period does not apply to repurchases requested within two years after the death or disability of a stockholder.

(3) The purchase price per share for shares repurchased upon the death or disability of a stockholder will be equal to the average issue price per share for all of the stockholder’s shares.

(4) The “Share Repurchase Price” equals 93% of the Estimated Value per Share. The “Estimated Value Per Share” is the most recently publicly disclosed estimated value per share determined by the Company’s board of directors.

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Related Party Arrangements (Tables)

6 Months Ended

Jun. 30, 2018

Related Party Transactions [Abstract]

Schedule of Amounts Attributable to the Advisor and its Affiliates

Amounts attributable to the Advisor and its affiliates incurred for the three and six months endedJune 30, 2018 and 2017, and amounts attributable to the Advisor and its affiliates that are payable (prepaid) as of June 30, 2018 and December 31, 2017, are as follows:

	Incurred For the					Incurred For the					Payable (prepaid) as of
	Three Months Ended June 30,					Six Months Ended June 30,
	2018		2017			2018		2017			June 30, 2018		December 31, 2017
Consolidated Statements of Operations:
Expensed
Investment management fees(1)	$	4,281,765	$	4,224,789		$	8,544,018	$	8,424,929		$	1,212	$	—
Acquisition expenses(2)	—		(1,185		)	—		—			—		—
Loan coordination fees(1)	—		—			—		—			—		728,100
Property management:
Fees(1)	1,221,040		1,173,907			2,412,207		2,316,254			409,191		396,722
Reimbursement of onsite personnel(3)	3,653,858		3,441,832			7,216,593		6,881,265			1,262,827		766,894
Other fees(1)	323,898		326,891			667,156		623,375			38,009		41,950
Other fees - property operations(3)	22,994		23,301			46,643		50,008			—		—
Other fees - G&A(4)	10,388		11,056			19,687		32,201			—		—
Other operating expenses(4)	279,690		451,937			541,101		893,703			152,068		76,515
Insurance proceeds(5)	—		(72,213		)	—		(172,213		)	—		—
Property insurance(6)	379,095		54,163			758,189		94,432			—		(172,717		)
Consolidated Balance Sheets:
Capitalized
Capital expenditures(7)	1,673		19,516			7,295		19,516			—		—
Construction management:
Fees(7)	51,659		329,541			188,102		881,468			35,938		125,159
Reimbursement of labor costs(7)	267,796		682,153			500,387		1,703,447			58,503		62,876
Additional paid-in capital
Selling commissions	—		—			—		—			415,184		562,339
	$	10,493,856	$	10,665,688		$	20,901,378	$	21,748,385		$	2,372,932	$	2,587,838

_____________________

(1) Included in fees to affiliates in the accompanying consolidated statements of operations.

(2) Included in acquisition costs in the accompanying consolidated statements of operations.

(3) Included in operating, maintenance and management in the accompanying consolidated statements of operations.

(4) Included in general and administrative expenses in the accompanying consolidated statements of operations.

(5) Included in tenant reimbursements and other in the accompanying consolidated statements of operations.

(6) Property related insurance expense and the amortization of the prepaid insurance deductible account are included in general and administrative expenses in the accompanying consolidated statements of operations. The amortization of the prepaid property insurance is included in operating, maintenance and management expenses in the accompanying consolidated statements of operations. The prepaid insurance is included in other assets in the accompanying consolidated balance sheets upon payment.

(7) Included in building and improvements in the accompanying consolidated balance sheets.

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Derivative Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Interest Rate Derivatives

The following table provides the terms of the Company’s interest rate derivative instruments that were in effect at June 30, 2018 and December 31, 2017:

June 30, 2018
Type	Maturity Date Range	Based on	Number of Instruments	Notional Amount		Variable Rate	Weighted Average Rate Cap	Fair Value
Interest Rate Cap	7/1/2018 - 1/1/2021	One-Month LIBOR	28	$	878,428,100	2.09%	3.27%	$	926,303

December 31, 2017
Type	Maturity Date Range	Based on	Number of Instruments	Notional Amount		Variable Rate	Weighted Average Rate Cap	Fair Value
Interest Rate Cap	6/1/2018 - 1/1/2021	One-Month LIBOR	29	$	888,368,100	1.56%	3.17%	$	347,409

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Organization and Business - Narrative (Details)	Sep. 03, 2013 USD ($) $ / shares shares	Aug. 22, 2013 USD ($) shares	Jun. 30, 2018 apartment	Jun. 30, 2018 residential_unit	Jun. 30, 2018 multifamily_property	Jun. 30, 2018 $ / shares	Mar. 14, 2018 $ / shares	Dec. 31, 2016 $ / shares	Dec. 31, 2015 $ / shares
Initial capitalization
Share price (in dollars per share)							$ 15.18
Residential Real Estate [Member]
Initial capitalization
Number of multifamily properties | multifamily_property					34
Number of apartment homes			11,601	11,601
Common Stock [Member]
Initial capitalization
Share price (in dollars per share)						$ 15.00		$ 14.85	$ 14.46
Sponsor [Member] | Common Stock [Member]
Initial capitalization
Issuance of common stock (in shares) | shares	13,500
Share price (in dollars per share)	$ 15
Issuance of common stock | $	$ 202,500
Advisor [Member] | Convertible Stock [Member]
Initial capitalization
Issuance of common stock (in shares) | shares		1,000
Issuance of common stock | $		$ 1,000

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Organization and Business - Narrative - Public Offering (Details) - USD ($)		6 Months Ended	27 Months Ended	31 Months Ended
	Dec. 30, 2013	Jun. 30, 2018	Mar. 24, 2016	Mar. 24, 2016	Apr. 01, 2018	Mar. 14, 2018	Dec. 31, 2017	Mar. 01, 2017	Dec. 31, 2016	May 01, 2016	Dec. 31, 2015
Public Offering Information
Registration statement, price per share (in dollars per share)						$ 15.18
Common Stock [Member]
Public Offering Information
Registration statement, price per share (in dollars per share)		$ 15.00							$ 14.85		$ 14.46
Common Stock [Member] | IPO [Member]
Public Offering Information
Issuance of common stock (in shares)		52,180,957	48,625,651	48,625,651
Proceeds from issuance of common stock		$ 777,095,941	$ 724,849,631	$ 640,012,497
Common Stock [Member] | Primary Offering [Member]
Public Offering Information
Maximum number of shares authorized for sale under registration statement (in shares)	66,666,667
Registration statement, price per share (in dollars per share)	$ 15
Common Stock [Member] | Distribution Reinvestment Plan [Member]
Public Offering Information
Maximum number of shares authorized for sale under registration statement (in shares)	7,017,544
Registration statement, price per share (in dollars per share)	$ 14.25				$ 15.18		$ 15.18	$ 14.85		$ 14.46
Issuance of common stock (in shares)		4,566,930	1,011,561
Proceeds from issuance of common stock		$ 66,661,062	$ 14,414,752

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Summary of Significant Accounting Policies - Schedule of Assets Required to be Measured at Fair Value on a Recurring Basis (Details) - Interest Rate Cap [Member] - Fair Value, Measurements, Recurring [Member] - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Level 1 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Interest rate cap agreements	$ 0	$ 0
Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Interest rate cap agreements	926,303	347,409
Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Interest rate cap agreements	$ 0	$ 0

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Summary of Significant Accounting Policies - Narrative - Fair Value of Financial Instruments (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying value	$ 948,896,621	$ 948,557,074
Estimate of Fair Value Measurement [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Notes payable, fair value	1,009,694,569	1,011,004,179
Reported Value Measurement [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying value	$ 993,798,455	$ 993,405,862

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Summary of Significant Accounting Policies - Narrative - Distribution Policy (Details) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Accounting Policies [Abstract]
Common share, distribution rate per share per day, declared (in dollars per share)			$ 0.002466
Distributions declared per common share (in dollars per share)	$ 0.224	$ 0.224	$ 0.446	$ 0.446

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Summary of Significant Accounting Policies - Narrative - Segment Disclosure (Details)	6 Months Ended
	Jun. 30, 2018 segment
Accounting Policies [Abstract]
Number of reportable segments	1

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Real Estate - Narrative (Details)	3 Months Ended			6 Months Ended		12 Months Ended
	Jun. 30, 2018 USD ($) apartment	Jun. 30, 2017 USD ($)	Mar. 31, 2017	Jun. 30, 2018 USD ($) apartment	Jun. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)	Jun. 30, 2018 residential_unit	Jun. 30, 2018 multifamily_property
Real Estate [Line Items]
Purchase price				$ 1,499,381,750
Average percentage of real estate portfolio occupied				94.40%		93.10%
Average monthly collected rent				$ 1,153		$ 1,137
Depreciation and amortization	$ 17,629,793	$ 16,725,862		35,065,143	$ 34,124,387
Building and Building Improvements [Member]
Real Estate [Line Items]
Depreciation	$ 17,629,793	16,725,862		$ 35,065,143	33,114,275
Tenant Origination and Absorption Costs [Member]
Real Estate [Line Items]
Amortization of intangible assets		$ 0			$ 1,010,112
Tenant Origination and Absorption Costs [Member] | Maximum [Member]
Real Estate [Line Items]
Weighted average amortization period of tenant origination and absorption costs			1 year
Residential Real Estate [Member]
Real Estate [Line Items]
Number of multifamily properties | multifamily_property								34
Units	11,601			11,601			11,601
Average percentage of real estate portfolio occupied				96.60%

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Real Estate - Schedule of Accumulated Depreciation and Amortization Related to Consolidated Real Estate Properties and Related Intangibles (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Real Estate [Line Items]
Investments in real estate	$ 1,565,063,668	$ 1,558,892,731
Less: Accumulated depreciation and amortization	(182,779,645)	(147,726,630)
Total real estate, net	1,382,284,023	1,411,166,101
Land [Member]
Real Estate [Line Items]
Investments in real estate	164,113,072	164,113,072
Less: Accumulated depreciation and amortization	0	0
Total real estate, net	164,113,072	164,113,072
Building and Improvements [Member]
Real Estate [Line Items]
Investments in real estate	1,400,950,596	1,394,779,659
Less: Accumulated depreciation and amortization	(182,779,645)	(147,726,630)
Total real estate, net	$ 1,218,170,951	$ 1,247,053,029

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Real Estate - Narrative - Operating Leases (Details)	6 Months Ended		12 Months Ended
	Jun. 30, 2018 apartment tenant	Jun. 30, 2017 tenant	Dec. 31, 2017 USD ($)	Jun. 30, 2018 residential_unit	Jun. 30, 2018 USD ($)
Real Estate Properties [Line Items]
Average percentage of real estate portfolio occupied	94.40%		93.10%
Tenant [Member] | Customer Concentration Risk [Member]
Real Estate Properties [Line Items]
Number of tenants | tenant	0	0
Accounts Payable and Accrued Liabilities [Member]
Real Estate Properties [Line Items]
Security deposit liability | $			$ 3,613,649		$ 3,928,861
Maximum [Member]
Real Estate Properties [Line Items]
Operating lease term	12 months
Residential Real Estate [Member]
Real Estate Properties [Line Items]
Units	11,601			11,601
Average percentage of real estate portfolio occupied	96.60%

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Other Assets (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Prepaid expenses	$ 480,347	$ 1,411,353
Interest rate cap agreements	926,303	347,409
Other deposits	2,774,141	1,053,424
Other assets	$ 4,180,791	$ 2,812,186

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Debt - Summary of Mortgage Notes Payable Secured by Real Property (Details)	6 Months Ended
	Jun. 30, 2018 USD ($) instrument	Jun. 30, 2017	Dec. 31, 2017 USD ($) instrument
Debt Instrument [Line Items]
Total notes payable, net	$ 993,798,454		$ 993,405,862
Notes Payable to Banks [Member]
Debt Instrument [Line Items]
Number of Instruments | instrument	31		31
Weighted Average Interest Rate	4.12%		3.63%
Principal Outstanding	$ 955,891,156		$ 956,169,296
Discount, net	(2,098,347)		(2,275,838)
Deferred financing costs, net	(4,896,188)		(5,336,384)
Total notes payable, net	948,896,621		948,557,074
Accumulated amortization of debt discount	(623,192)		(445,701)
Accumulated amortization of deferred financing costs	$ 2,674,851		$ 2,234,655
Notes Payable to Banks [Member] | Variable Rate Member]
Debt Instrument [Line Items]
Number of Instruments | instrument	29		29
Weighted Average Interest Rate	4.11%		3.58%
Principal Outstanding	$ 888,205,584		$ 888,345,717
Notes Payable to Banks [Member] | Variable Rate Member] | Minimum [Member] | LIBOR [Member]
Debt Instrument [Line Items]
Variable rate	1.61%	1.61%
Notes Payable to Banks [Member] | Variable Rate Member] | Maximum [Member] | LIBOR [Member]
Debt Instrument [Line Items]
Variable rate	2.48%	2.48%
Notes Payable to Banks [Member] | Fixed Rate [Member]
Debt Instrument [Line Items]
Number of Instruments | instrument	2		2
Weighted Average Interest Rate	4.51%		4.51%
Principal Outstanding	$ 67,685,572		$ 67,823,579
Notes Payable to Banks [Member] | Fixed Rate [Member] | Minimum [Member]
Debt Instrument [Line Items]
Fixed rate	4.34%		4.34%
Notes Payable to Banks [Member] | Fixed Rate [Member] | Maximum [Member]
Debt Instrument [Line Items]
Fixed rate	4.60%		4.60%

XML

Debt - Narrative (Details)			3 Months Ended		6 Months Ended		12 Months Ended
	Nov. 29, 2017 USD ($) Subsidiary	May 18, 2016 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)	Dec. 29, 2017 USD ($) Subsidiary	Aug. 26, 2015 USD ($)
Debt Instrument [Line Items]
Revolving credit facilities			$ 44,901,833		$ 44,901,833		$ 44,848,788
Interest expense			10,231,952	$ 8,417,150	19,324,835	$ 16,299,864
Amortization of deferred financing costs			246,966	255,957	493,241	509,689
Change in fair value of interest rate cap agreements					(578,894)	395,654
Amortization of loan discount					177,491	177,492
Credit facility commitment fees			7,479	10,942	14,877	24,312
Accounts Payable and Accrued Liabilities [Member]
Debt Instrument [Line Items]
Interest payable			3,229,175		3,229,175		$ 2,581,941
Interest Rate Cap [Member]
Debt Instrument [Line Items]
Change in fair value of interest rate cap agreements			$ (131,281)	$ 140,652	$ (578,894)	$ 395,654
November Refinancing Transactions [Member] | LIBOR [Member]
Debt Instrument [Line Items]
Variable rate							1.94%
December Refinancing Transactions [Member] | LIBOR [Member]
Debt Instrument [Line Items]
Variable rate							1.88%
Revolving Credit Facility [Member] | Line of Credit, PNC Bank [Member]
Debt Instrument [Line Items]
Line of credit facility, borrowing capacity		$ 65,000,000
Interest rate			3.69%		3.69%
Unused commitment fee percentage		0.15%
Line of Credit [Member] | Line of Credit, PNC Bank [Member] | Base Rate [Member]
Debt Instrument [Line Items]
Variable rate		0.60%
Line of Credit [Member] | Line of Credit, PNC Bank [Member] | LIBOR [Member]
Debt Instrument [Line Items]
Variable rate		1.60%
Notes Payable to Banks [Member]
Debt Instrument [Line Items]
Amortization of loan discount			$ 88,746		$ 177,491
Line of Credit [Member] | Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Line of credit facility, borrowing capacity									$ 200,000,000
Line of credit facility, borrowing capacity, accordion feature									$ 350,000,000
Unused commitment fee percentage					0.10%
Additional unused commitment fee percentage					1.00%
Seasoning fee percentage					0.25%
Seasoning fee percentage, increase on each subsequent anniversary					0.25%
Line of Credit [Member] | Revolving Credit Facility [Member] | LIBOR [Member]
Debt Instrument [Line Items]
Servicing rate			0.05%		0.05%
Line of Credit [Member] | Revolving Credit Facility [Member] | LIBOR [Member] | Minimum [Member]
Debt Instrument [Line Items]
Variable rate					1.80%
Line of Credit [Member] | Revolving Credit Facility [Member] | LIBOR [Member] | Maximum [Member]
Debt Instrument [Line Items]
Variable rate					2.10%
PNC Bank [Member] | Revolving Credit Facility [Member] | November Refinancing Transactions [Member]
Debt Instrument [Line Items]
Line of credit facility, borrowing capacity	$ 100,752,000
PNC Bank [Member] | Subsidiaries [Member] | Revolving Credit Facility [Member] | November Refinancing Transactions [Member]
Debt Instrument [Line Items]
Number of subsidiaries refinanced under revolving credit facility | Subsidiary	3
Repayments of debt	$ 93,825,000
PNC Bank [Member] | Subsidiaries [Member] | Revolving Credit Facility [Member] | Loan Agreement [Member]
Debt Instrument [Line Items]
Number of subsidiaries refinanced under revolving credit facility | Subsidiary								3
Line of credit facility, borrowing capacity								$ 92,475,000
PNC Bank [Member] | Subsidiaries [Member] | Revolving Credit Facility [Member] | December Refinancing Transactions [Member]
Debt Instrument [Line Items]
Line of credit facility, borrowing capacity								$ 97,080,000

XML

Debt - Summary of Advances Obtained and Certain Financing Costs Incurred Under the Credit Facility (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Line of Credit Facility [Line Items]
Revolving credit facilities	$ 44,901,833	$ 44,848,788
Line of Credit [Member]
Line of Credit Facility [Line Items]
Deferred financing costs, net	(98,167)	(151,212)
Accumulated amortization of deferred financing costs	226,833	173,788
Line of Credit [Member] | Residential Real Estate [Member]
Line of Credit Facility [Line Items]
Revolving credit facilities	$ 45,000,000	$ 45,000,000

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Debt - Summary of Aggregate Maturities (Details)	Jun. 30, 2018 USD ($)
Debt Disclosure [Abstract]
Total	$ 1,000,891,156
Remainder of 2018	2,002,471
2019	49,892,887
2020	8,291,825
2021	49,620,891
2022	61,398,874
Thereafter	$ 829,684,208

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Stockholders' Equity - Narrative - General (Details) - $ / shares	Jun. 30, 2018	Dec. 31, 2017
Class of Stock [Line Items]
Common and preferred shares authorized (in shares)	1,100,000,000
Preferred stock, shares authorized (in shares)	100,000,000	100,000,000
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common Stock [Member]
Class of Stock [Line Items]
Common stock, shares authorized (in shares)	999,999,000	999,999,000
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Convertible Stock [Member]
Class of Stock [Line Items]
Common stock, shares authorized (in shares)	1,000	1,000
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01

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Stockholders' Equity - Narrative - Common Stock (Details)			3 Months Ended		6 Months Ended		12 Months Ended	27 Months Ended	31 Months Ended
	Aug. 13, 2015	Sep. 03, 2013 USD ($) shares	Jun. 30, 2018 USD ($) shares	Jun. 30, 2017 USD ($) shares	Jun. 30, 2018 USD ($) vote shares	Jun. 30, 2017 USD ($) shares	Dec. 31, 2017 $ / shares shares	Mar. 24, 2016 USD ($) shares	Mar. 24, 2016 USD ($) shares
Class of Stock [Line Items]
Stock issued during period, dividend reinvestment plan (in shares) | shares			382,875	396,184
Commissions on sales of common stock and related dealer manager fees to affiliates					$ 32,414
Share-based compensation expense					$ 27,678	$ 33,756
Restricted Stock [Member]
Class of Stock [Line Items]
Shares granted (in shares) | shares					0		4,998
Share based compensation expense					$ 61,329
Weighted-average remaining term					9 months 12 days
Forfeited shares (in shares) | shares					0
Common Stock [Member]
Class of Stock [Line Items]
Number of votes per share | vote					1
Stock issued during period, dividend reinvestment plan (in shares) | shares					766,783	793,146
Common Stock [Member] | Independent Directors Compensation Plan [Member] | Restricted Stock [Member]
Class of Stock [Line Items]
Shares granted, grant date fair value (in dollars per share) | $ / shares							$ 14.85
Number of equal annual vesting installments	4 years
Share-based compensation expense			$ 13,839	$ 13,887	$ 27,678	$ 33,756
Common Stock [Member] | Independent Directors Compensation Plan [Member] | Restricted Stock [Member] | General and Administrative Expense [Member]
Class of Stock [Line Items]
Share-based compensation expense			$ 13,839	$ 13,887	$ 27,678	$ 33,756
Common Stock [Member] | IPO [Member]
Class of Stock [Line Items]
Issuance of common stock (in shares) | shares					52,180,957			48,625,651	48,625,651
Proceeds from issuance of common stock					$ 777,095,941			$ 724,849,631	$ 640,012,497
Net proceeds from the issuance of common stock					$ 692,258,807
Common Stock [Member] | Distribution Reinvestment Plan [Member]
Class of Stock [Line Items]
Issuance of common stock (in shares) | shares					4,566,930			1,011,561
Proceeds from issuance of common stock					$ 66,661,062			$ 14,414,752
Stock issued during period, dividend reinvestment plan (in shares) | shares					4,566,930				1,011,561
Net proceeds from issuance of common stock, dividend reinvestment plan					$ 66,661,062				$ 14,414,752
Commissions on sales of common stock and related dealer manager fees to affiliates					$ 84,837,134
Common Stock [Member] | Sponsor [Member]
Class of Stock [Line Items]
Issuance of common stock (in shares) | shares		13,500
Issuance of common stock		$ 202,500

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Stockholders' Equity - Schedule of Restricted Stock Issued to Independent Directors as Compensation for Services (Details) - Restricted Stock [Member] - $ / shares	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Nonvested shares at the beginning of the year (in shares)	7,497	9,997
Granted shares (in shares)	0	4,998
Vested shares (in shares)	0	(7,498)
Nonvested shares at the end of the year (in shares)	7,497	7,497
Independent Directors Compensation Plan [Member] | Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Shares granted, grant date fair value (in dollars per share)		$ 14.85

XML

Stockholders' Equity - Narrative - Convertible Stock (Details) - Advisor [Member] - Convertible Stock [Member] - USD ($)		6 Months Ended
	Aug. 22, 2013	Jun. 30, 2018
Class of Stock [Line Items]
Issuance of common stock (in shares)	1,000
Issuance of common stock	$ 1,000
Aggregate percentage of cumulative, non-compounded, annual return on the original issue price added to total distributions qualifying for conversion of stock		6.00%
Convertible stock redemption price (in dollars per share)		$ 1.00
Convertible stock, percentage applied to the excess of enterprise value, including distributions to date		15.00%
Private Placement [Member]
Class of Stock [Line Items]
Issuance of common stock (in shares)		1,000
Issuance of common stock		$ 1,000

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Stockholders' Equity - Narrative - Preferred Stock (Details)	6 Months Ended
	Jun. 30, 2018 class shares	Dec. 31, 2017 shares
Equity [Abstract]
Preferred stock, number of classes or series the Board of Directors is authorized to classify or reclassify | class	1
Preferred stock, number of classes or series the Board of Directors is authorized to issue | class	1
Preferred stock, shares issued (in shares) | shares	0	0
Preferred stock, shares outstanding (in shares) | shares	0	0

XML

Stockholders' Equity - Narrative - Distribution Reinvestment Plan (Details) - USD ($)	3 Months Ended		6 Months Ended		31 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Mar. 24, 2016	Apr. 01, 2018	Mar. 14, 2018	Dec. 31, 2017	Mar. 01, 2017	Dec. 31, 2016	May 01, 2016	Dec. 31, 2015	Dec. 30, 2013
Class of Stock [Line Items]
Stock issued during period, dividend reinvestment plan (in shares)	382,875	396,184
Share price (in dollars per share)							$ 15.18
Common Stock [Member]
Class of Stock [Line Items]
Stock issued during period, dividend reinvestment plan (in shares)			766,783	793,146
Share price (in dollars per share)	$ 15.00		$ 15.00							$ 14.85		$ 14.46
Distribution Reinvestment Plan [Member]
Class of Stock [Line Items]
Sales commissions or dealer manager fees payable on shares sold under the plan	$ 0		$ 0
Notice period for termination of plan			10 days
Distribution Reinvestment Plan [Member] | Common Stock [Member]
Class of Stock [Line Items]
Stock issued during period, dividend reinvestment plan (in shares)			4,566,930		1,011,561
Net proceeds from issuance of common stock, dividend reinvestment plan			$ 66,661,062		$ 14,414,752
Share price (in dollars per share)						$ 15.18		$ 15.18	$ 14.85		$ 14.46		$ 14.25

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Stockholders' Equity - Narrative - Share Repurchase Plan and Redeemable Common Stock (Details)		3 Months Ended		6 Months Ended		12 Months Ended
	Mar. 14, 2018 USD ($) $ / shares	Jun. 30, 2018 USD ($) $ / shares shares	Jun. 30, 2017 USD ($) shares	Jun. 30, 2018 USD ($) asset $ / shares shares	Jun. 30, 2017 USD ($) shares	Dec. 31, 2017 USD ($) shares	Dec. 31, 2016 $ / shares	Dec. 31, 2015 $ / shares
Class of Stock [Line Items]
Authorized amount, per quarter	$ 2,000,000
Stock Repurchase Plan, Percentage of Weighted-Average Number of Shares Outstanding, Limit on Repurchase	93.00%
Stock Repurchase Program, Estimated Share Price | $ / shares	$ 14.12
Transfers to redeemable common stock				$ (37,028,102)		$ (10,025,412)
Share price (in dollars per share) | $ / shares	$ 15.18
Common Stock [Member]
Class of Stock [Line Items]
Share price (in dollars per share) | $ / shares		$ 15.00		$ 15.00			$ 14.85	$ 14.46
Share Repurchase Plan [Member]
Class of Stock [Line Items]
Number of company assets sold that constitute a return of capital as a result of such sale. | asset				1
Written request period for repurchase of shares				15 days
Payment period following the repurchase date for honoring repurchase requests				30 days
Minimum number of days prior to repurchase date a repurchase request may be withdrawn				3 days
Shares redeemed (in shares) | shares				144,440
Total redemption value		$ 2,000,000
Stock requested for redemption (in shares) | shares		231,575
Stock requested for redemption, amount		$ 3,212,937
Notice period for amendment, suspension, or termination of share repurchase plan.				30 days
Share Repurchase Plan [Member] | Common Stock [Member]
Class of Stock [Line Items]
Number of shares that can be repurchased under Company's share repurchase plan after first anniversary of date of purchase of shares (in shares) | shares		0		0
Share repurchase plan, maximum period of time allowed from date of death or disability of shareholder to request holding period exemption for shares to be repurchased				2 years
Shares redeemed (in shares) | shares			102,257	346,610	178,022
Fulfilled redemption requests		$ 2,000,000	$ 1,424,416	$ 4,886,216	$ 2,477,614
Stock requested for redemption (in shares) | shares			95,640	541,527	197,827
Stock requested for redemption, amount			$ 1,362,567	$ 7,475,664	$ 2,785,983
Shares of outstanding and unfulfilled redemption requests (in shares) | shares		142,393		142,393		95,640
Maximum percentage of weighted average shares outstanding in prior calendar period that may be repurchased in current calendar period				5.00%
Fee charged to repurchase shares				$ 0
Transfers to redeemable common stock		$ 0	$ 4,458,910	(37,028,102)	2,071,096
Share Repurchase Plan [Member] | Common Stock [Member] | Accounts Payable and Accrued Liabilities [Member]
Class of Stock [Line Items]
Stock requested for redemption, amount				$ 2,000,000	$ 1,362,567
Share Repurchase Plan As Amended [Member] | Common Stock [Member]
Class of Stock [Line Items]
Share Repurchase Plan, Holding Period of Shares Repurchased				1 year

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Stockholders' Equity - Schedule of Share Repurchase Plan Prior to Estimated Value Per Share of Common Stock is Published (Details) (Details) - Share Repurchase Plan Pre Published Valuation [Member] - Common Stock [Member]	Mar. 29, 2016
Class of Stock [Line Items]
Less than 1 year	0.00%
1 year	92.50%
2 years	95.00%
3 years	97.50%
4 years	100.00%

XML

Stockholders' Equity - Schedule of Share Repurchase Plan Following Estimated Value Per Share of Common Stock is Published (Details) (Details) - Share Repurchase Plan Post Published Valuation [Member] - Common Stock [Member]	Mar. 30, 2016
Class of Stock [Line Items]
Less than 1 year	0.00%
1 year	92.50%
2 years	95.00%
3 years	97.50%
4 years	100.00%

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Stockholders' Equity - Narrative - Distributions Declared (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017	Mar. 14, 2018	Dec. 31, 2016	Dec. 31, 2015
Class of Stock [Line Items]
Common share, distribution rate per share per day, declared (in dollars per share)			$ 0.002466
Share price (in dollars per share)						$ 15.18
Distributions declared			$ 22,798,113		$ 45,321,063
Dividends payable	$ 3,792,428		$ 3,792,428		3,886,730
Common Stock [Member]
Class of Stock [Line Items]
Common share, distribution rate per share per day, declared (in dollars per share)				$ 0.002466
Common stock distribution rate percentage			6.00%
Share price (in dollars per share)	$ 15.00		$ 15.00				$ 14.85	$ 14.46
Distributions declared	$ 11,485,650	$ 11,267,096	$ 22,798,113	$ 22,345,308
Dividends, common stock, distribution reinvestment plan	$ 5,698,302	$ 5,825,338	$ 11,369,398	$ 11,599,095
Dividends, common stock, distribution reinvestment plan (in shares)	375,382	392,278	757,274	784,708
Dividends payable	$ 3,792,428		$ 3,792,428		$ 3,886,730
Dividends payable, DRP			$ 1,870,368	$ 1,970,910
Dividends payable, DRP (in shares)			123,213	132,721

XML

Stockholders' Equity - Narrative - Distributions Paid (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Class of Stock [Line Items]
Payments of ordinary dividends, common stock	$ 5,824,954	$ 5,485,359	$ 11,422,475	$ 10,741,043
Stock issued during period, dividend reinvestment plan (in shares)	382,875	396,184
Proceeds from issuance of common stock, dividend reinvestment plan	$ 5,768,910	$ 5,883,326
Distributions paid, common stock, including distribution reinvestment plan	$ 11,593,864	$ 11,368,685	$ 22,892,415	$ 22,411,697
Common Class A [Member]
Class of Stock [Line Items]
Stock issued during period, dividend reinvestment plan (in shares)			766,783	793,146
Proceeds from issuance of common stock, dividend reinvestment plan			$ 11,469,940	$ 11,670,654

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Related Party Arrangements - Schedule of Amounts Attributable to the Advisor and its Affiliates - Amounts Incurred and Payable (Details) - Advisor [Member] - Advisor and its Affiliates [Member] - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Related Party Transaction [Line Items]
Incurred in the period	$ 10,493,856	$ 10,665,688	$ 20,901,378	$ 21,748,385
Payable at end of period	2,372,932		2,372,932		$ 2,587,838
Investment Management Fees [Member] | Fees to Affiliates [Member]
Related Party Transaction [Line Items]
Incurred in the period	4,281,765	4,224,789	8,544,018	8,424,929
Payable at end of period	1,212		1,212		0
Acquisition Expenses [Member] | Acquisition Costs [Member]
Related Party Transaction [Line Items]
Incurred in the period	0	(1,185)	0	0
Payable at end of period	0		0		0
Loan Coordination Fees [Member] | Fees to Affiliates [Member]
Related Party Transaction [Line Items]
Incurred in the period	0	0	0	0
Payable at end of period	0		0		728,100
Property Management, Fees [Member] | Fees to Affiliates [Member]
Related Party Transaction [Line Items]
Incurred in the period	1,221,040	1,173,907	2,412,207	2,316,254
Payable at end of period	409,191		409,191		396,722
Property Management, Reimbursement of Onsite Personnel [Member] | Reimbursement of onsite personnel [Member]
Related Party Transaction [Line Items]
Incurred in the period	3,653,858	3,441,832	7,216,593	6,881,265
Payable at end of period	1,262,827		1,262,827		766,894
Property Management, Other Fees [Member] | Fees to Affiliates [Member]
Related Party Transaction [Line Items]
Incurred in the period	323,898	326,891	667,156	623,375
Payable at end of period	38,009		38,009		41,950
Property Management, Other Fees - Property Operations [Member] | Fees to Affiliates [Member]
Related Party Transaction [Line Items]
Incurred in the period	22,994	23,301	46,643	50,008
Payable at end of period	0		0		0
Property Management, Other Fees - G&A [Member] | General and Administrative Expense [Member]
Related Party Transaction [Line Items]
Incurred in the period	10,388	11,056	19,687	32,201
Payable at end of period	0		0		0
Other Operating Expenses [Member] | General and Administrative Expense [Member]
Related Party Transaction [Line Items]
Incurred in the period	279,690	451,937	541,101	893,703
Payable at end of period	152,068		152,068		76,515
Insurance Proceeds from Related Party [Member] | General and Administrative Expense [Member]
Related Party Transaction [Line Items]
Incurred in the period	0	72,213	0	172,213
Payable at end of period	0		0		0
Property insurance [Member]
Related Party Transaction [Line Items]
Incurred in the period	379,095	54,163	758,189	94,432
Payable at end of period	0		0		172,717
Capital Expenditures [Member]
Related Party Transaction [Line Items]
Incurred in the period	1,673	19,516	7,295	19,516
Payable at end of period	0		0		0
Construction Management Fees [Member]
Related Party Transaction [Line Items]
Incurred in the period	51,659	329,541	188,102	881,468
Payable at end of period	35,938		35,938		125,159
Construction Management Reimbursement [Member]
Related Party Transaction [Line Items]
Incurred in the period	267,796	682,153	500,387	1,703,447
Payable at end of period	58,503		58,503		62,876
Selling Commissions [Member] | Additional Paid-in Capital [Member]
Related Party Transaction [Line Items]
Incurred in the period	0	$ 0	0	$ 0
Payable at end of period	$ 415,184		$ 415,184		$ 562,339

XML

Related Party Arrangements - Narrative - Investment Management Fee (Details)	6 Months Ended
	Jun. 30, 2018
Advisor [Member] | Investment Management Fee [Member]
Related Party Transaction [Line Items]
Monthly investment management fee, percentage	0.0833%

XML

Related Party Arrangements - Narrative - Acquisition Fees and Expenses (Details) - Advisor [Member] - Advisor [Member] - Acquisition Fees and Expenses [Member]	6 Months Ended
	Jun. 30, 2018
Related Party Transaction [Line Items]
Acquisition fee, percent	1.00%
Acquisition fee payable without board approval as a percent of total contract price	4.50%

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Related Party Arrangements - Narrative - Loan Coordination Fee (Details) - Advisor [Member] - Advisor [Member] - Loan Coordination Fee [Member]	6 Months Ended
	Jun. 30, 2018
Related Party Transaction [Line Items]
Loan coordination fee, acquisitions	1.00%
Loan coordination fee, other than acquisitions	0.75%

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Related Party Arrangements - Narrative - Property Management Fees and Expenses (Details) - Property Management Fees and Expenses [Member] - Steadfast Management Company [Member] - Property Manager [Member]	6 Months Ended
	Jun. 30, 2018
Related Party Transaction [Line Items]
Term of agreement	1 year
Number of uncured days needed to terminate agreement	60 days
Notice needed to terminate agreement	30 days
Minimum [Member]
Related Party Transaction [Line Items]
Property management fee, percent fee	2.50%
Maximum [Member]
Related Party Transaction [Line Items]
Property management fee, percent fee	3.00%

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Related Party Arrangements - Narrative - Construction Management Fee (Details) - Pacific Coast Land & Construction, Inc. [Member] - Affiliated Entity [Member] - Construction Management Fee [Member]	6 Months Ended
	Jun. 30, 2018
Related Party Transaction [Line Items]
Construction management agreement, notice of termination of contract, period	30 days
Minimum [Member]
Related Party Transaction [Line Items]
Construction management fee, percent	8.00%
Maximum [Member]
Related Party Transaction [Line Items]
Construction management fee, percent	12.00%

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Related Party Arrangements - Narrative - Other Operating Expense Reimbursements (Details) - Advisor [Member] - Advisor [Member] - Other Operating Expense Reimbursement [Member]	6 Months Ended
	Jun. 30, 2018 quarter
Related Party Transaction [Line Items]
Operating expense limitation, number of rolling quarters	4
Operating expenses limitation as a percentage of average invested assets	2.00%
Operating expenses limitation as a percentage of net income	25.00%
Average invested assets, calculation period	12 months

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Related Party Arrangements - Narrative - Disposition Fee (Details) - Advisor [Member] - Advisor [Member] - Disposition Fee [Member]	6 Months Ended
	Jun. 30, 2018 USD ($)
Related Party Transaction [Line Items]
Disposition fee, maximum percent of brokerage commission paid threshold	50.00%
Property sale disposition fee, maximum percentage of total sale price	1.00%
Operating expenses limitation as a percentage of average invested assets	2.00%
Operating expenses limitation as a percentage of net income	25.00%
Disposition fees incurred	$ 0

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Related Party Arrangements - Narrative - Selling Commissions and Dealer Manager Fees (Details) - USD ($)	6 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Steadfast Capital Markets Group, LLC [Member] | Dealer Manager [Member] | Sales Commissions [Member] | Primary Offering [Member]
Related Party Transaction [Line Items]
Sales commission, percentage of gross offering proceeds	7.00%
Sales commission, percentage of gross offering proceeds, at time of sale	3.00%
Sales commission, percentage of gross offering proceeds, remaining after sale	4.00%
Sales commission, percentage of gross offering proceeds, ratable on each of the first five anniversaries	1.00%
selling commissions on gross offering proceeds from sales of common stock	P4Y
Steadfast Capital Markets Group, LLC [Member] | Dealer Manager [Member] | Dealer Manager Fees [Member] | Primary Offering [Member]
Related Party Transaction [Line Items]
Dealer manager fees, percentage of gross offering proceeds	3.00%
Steadfast Capital Markets Group, LLC [Member] | Dealer Manager [Member] | Sales Commissions and Dealer Manager Fees [Member] | Distribution Reinvestment Plan [Member]
Related Party Transaction [Line Items]
Sales commissions or dealer manager fees paid	$ 0
Advisor [Member] | Advisor and its Affiliates [Member]
Related Party Transaction [Line Items]
Amount payable	2,372,932	$ 2,587,838
Additional Paid-in Capital [Member] | Advisor [Member] | Advisor and its Affiliates [Member] | Sales Commissions Paid [Member]
Related Party Transaction [Line Items]
Amount payable	$ 415,184	$ 562,339

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Incentive Award Plan and Independent Director Compensation (Details) - USD ($)		3 Months Ended		6 Months Ended
	Aug. 13, 2015	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Amortization of stock-based compensation				$ 27,678	$ 33,756
Operating expenses		$ 51,421,344	$ 47,779,930	100,806,464	95,897,742
Director Annual Retainer Expense [Member] | Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Amount payable		61,750		61,750		$ 55,750
Common Stock [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Proceeds from issuance of common stock				2,000,000
Independent Directors Compensation Plan [Member] | Restricted Stock [Member] | Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of equal annual vesting installments	4 years
Amortization of stock-based compensation		13,839	13,887	27,678	33,756
Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Annual amount				55,000
Annual amount, additional due audit committee chairperson				10,000
Board meeting attendance fee				2,500
Committee meeting attendance fee				1,500
Teleconference attendance fee				1,000
Teleconference attendance fee, daily maximum				4,000
Operating expenses		$ 61,750	$ 58,750	$ 117,500	$ 120,500
Directors [Member] | Independent Directors Compensation Plan [Member] | Restricted Stock [Member] | IPO [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares received under plan (in shares)				3,333
Shares entitled to be received upon re-election to Board of Directors (in shares)				1,666
Shares of restricted stock vesting percentage				25.00%
Number of equal annual vesting installments				3 years

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Derivative Financial Instruments - Schedule of Interest Rate Derivatives (Details) - Interest Rate Cap [Member]	Jun. 30, 2018 USD ($) instrument	Dec. 31, 2017 USD ($) instrument
Derivative [Line Items]
Fair Value		$ 347,409
Cash Flow Hedging [Member] | Not Designated as Hedging Instrument [Member]
Derivative [Line Items]
Number of Instruments | instrument	28	29
Notional Amount	$ 878,428,100	$ 888,368,100
Weighted Average Rate Cap	3.27%	3.17%
Fair Value	$ 926,303	$ 347,409
Cash Flow Hedging [Member] | Not Designated as Hedging Instrument [Member] | One-Month LIBOR [Member]
Derivative [Line Items]
Variable Rate	2.09%	1.56%

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Derivative Financial Instruments - Narrative (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Derivative [Line Items]
Unrealized gain (loss)			$ 578,894	$ (395,654)
Interest Rate Cap [Member]
Derivative [Line Items]
Unrealized gain (loss)	$ 131,281	$ (140,652)	578,894	(395,654)
Fair value of interest rate cap agreements					$ 347,409
Interest Rate Cap [Member] | Deferred Financing Costs and Other Assets, Net [Member]
Derivative [Line Items]
Fair value of interest rate cap agreements	926,303		926,303
Interest Rate Cap [Member] | Interest Expense [Member]
Derivative [Line Items]
Unrealized gain (loss)	$ 131,281	$ (140,652)	$ 578,894	$ (395,654)

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Subsequent Events (Details)						3 Months Ended		6 Months Ended
	Aug. 08, 2018 shares	Aug. 07, 2018 $ / shares	Aug. 01, 2018 USD ($)	Jul. 31, 2018 USD ($) Subsidiary tranche $ / shares shares	Jul. 02, 2018 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2018 USD ($) $ / shares	Jun. 30, 2017 USD ($)
Subsequent Event [Line Items]
Distributions paid, common stock, including distribution reinvestment plan						$ 11,593,864	$ 11,368,685	$ 22,892,415	$ 22,411,697
Payments of ordinary dividends, common stock						$ 5,824,954	$ 5,485,359	$ 11,422,475	$ 10,741,043
Common share, distribution rate per share per day, declared (in dollars per share) | $ / shares								$ 0.002466
Subsequent Event [Member]
Subsequent Event [Line Items]
Distributions paid, common stock, including distribution reinvestment plan			$ 3,927,609		$ 3,792,428
Stock Repurchased During Period, Shares | shares				142,393
Stock Repurchased During Period, Value				$ 2,000,000
Treasury Stock Acquired, Average Cost Per Share | $ / shares				$ 14.05
Common share, distribution rate per share per day, declared (in dollars per share) | $ / shares		$ 0.002466
Subsequent Event [Member] | Dividend Paid [Member]
Subsequent Event [Line Items]
Payments of ordinary dividends, common stock			1,999,429		1,922,060
Shares issued pursuant to DRP			$ 1,928,180		$ 1,870,368
Restricted Stock [Member] | Independent Directors Compensation Plan [Member] | Directors [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | shares	1,666
Revolving Credit Facility [Member] | Master Credit Facility Agreement [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Loan Coordination Advisory Fee, Amount				$ 2,758,345
Revolving Credit Facility [Member] | Master Credit Facility Agreement [Member] | Berkeley Point Capital LLC [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Line of credit facility, borrowing capacity				$ 551,669,000
Number of Tranches | tranche				3
Debt Instrument, Fee Amount				$ 1,930,842
Revolving Credit Facility [Member] | Master Credit Facility Agreement [Member] | Berkeley Point Capital LLC [Member] | Subsidiaries [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Number of subsidiaries refinanced under revolving credit facility | Subsidiary				16
Repayments of debt				$ 479,318,649
Revolving Credit Facility [Member] | Master Credit Facility Agreement Tranche 1 [Member] | Berkeley Point Capital LLC [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Line of credit facility, borrowing capacity				$ 331,001,400
Fixed rate				4.43%
Revolving Credit Facility [Member] | Master Credit Facility Agreement Tranche 2 [Member] | Berkeley Point Capital LLC [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Line of credit facility, borrowing capacity				$ 131,917,250
Fixed rate				4.57%
Revolving Credit Facility [Member] | Master Credit Facility Agreement Tranche 3 [Member] | Berkeley Point Capital LLC [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Line of credit facility, borrowing capacity				$ 82,750,350
Revolving Credit Facility [Member] | Master Credit Facility Agreement Tranche 3 [Member] | LIBOR [Member] | Berkeley Point Capital LLC [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Variable rate				1.70%
Revolving Credit Facility [Member] | CME Loan [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Loan Coordination Advisory Fee, Amount				$ 804,250
Revolving Credit Facility [Member] | CME Loan [Member] | Berkeley Point Capital LLC [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Debt Instrument, Fee Amount				643,400
Revolving Credit Facility [Member] | CME Loan [Member] | PNC Bank [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Line of credit facility, borrowing capacity				$ 160,850,000
Fixed rate				4.43%
Revolving Credit Facility [Member] | CME Loan [Member] | PNC Bank [Member] | Subsidiaries [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Number of subsidiaries refinanced under revolving credit facility | Subsidiary				5
Repayments of debt				$ 131,318,742