10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2017

OR

☐ 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 000-55782

INPOINT COMMERCIAL REAL ESTATE INCOME, INC.

(Exact name of registrant as specified in its charter)

Maryland	32-0506267
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

2901 Butterfield Road Oak Brook, Illinois	60523
(Address of principal executive offices)	(Zip Code)

(800) 826-8228

(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 the filing requirements for the past 90 days.    Yes ☒    No ☐

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

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

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐ (Do not check if a smaller reporting company)	Smaller Reporting Company	☒
Emerging Growth Company	☒

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.  ☒

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

As of November 8, 2017, there were 1,328,175 shares of the Registrant’s Class P Common Stock outstanding.

TABLE OF CONTENTS

PART I FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Balance Sheets as of September 30, 2017 (unaudited) and December 31, 2016	1
	Unaudited Consolidated Statements of Operations for the three and nine-months ended September 30, 2017 and 2016	2
	Unaudited Consolidated Statement of Changes in Stockholders’ Equity for the nine-months ended September 30, 2017	3
	Unaudited Consolidated Statements of Cash Flows for the nine-months ended September 30, 2017 and 2016	4
	Notes to Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	22
Item 4.	Controls and Procedures	24
PART II OTHER INFORMATION
Item 1.	Legal Proceedings	24
Item 1A.	Risk Factors	24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 3.	Defaults Upon Senior Securities	24
Item 4.	Mine Safety Disclosures	24
Item 5.	Other Information	24
Item 6.	Exhibits	25
Signatures		26

INPOINT COMMERCIAL REAL ESTATE INCOME, INC.

CONSOLIDATED BALANCE SHEETS

	September 30, 2017 (unaudited)			December 31, 2016
ASSETS
Cash and cash equivalents	$	2,612,271		$	511,854
Real estate securities at fair value		26,518,460			5,433,480
Commercial mortgage loans at cost, net of allowance for loan loss of $0		7,500,000			—
Deferred offering costs		1,510,598			967,448
Accrued interest receivable		39,872			13,652
Prepaid expenses		10,214			—
Other assets		569			—
Total assets	$	38,191,984		$	6,926,434
LIABILITIES AND EQUITY
Liabilities:
Repurchase agreements—real estate securities		8,936,000			—
Due to related parties		1,510,780			995,716
Loan fees payable		50,000			—
Interest payable		846			—
Distributions payable		170,017			33,230
Accrued expenses		162,324			19,167
Income taxes payable		48,677			—
Total liabilities		10,878,644			1,048,113
Stockholders’ Equity:
Class P common stock, $0.001 par value, 450,000,000 shares authorized, 1,130,077 and 237,700 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively		1,130			238
Additional paid in capital (net of offering costs of $1,708,089 and $0 at September 30, 2017 and December 31, 2016, respectively)		28,290,650			5,942,262
Distributions in excess of earnings		(978,440	)		(64,179	)
Total stockholders’ equity		27,313,340			5,878,321
Total liabilities and stockholders’ equity	$	38,191,984		$	6,926,434

The accompanying notes are an integral part of these consolidated financial statements 

1

INPOINT COMMERCIAL REAL ESTATE INCOME, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

	Three-months ended September 30,					Nine-months ended September 30,
	2017			2016		2017			2016
Interest income:
Interest income		303,636			—		553,680			—
Less: Interest expense		(49,302	)		—		(101,039	)		—
Net interest income		254,334			—		452,641			—
Operating expenses:
Administration expense		28,750			—		86,250			—
Directors compensation		20,100			—		60,700			—
Professional service fees		98,215			—		328,549			—
Other expenses		37,880			—		67,690			—
Total operating expenses		184,945			—		543,189			—
Other income (loss):
Unrealized gain (loss) in value of real estate securities		(49,612	)		—		21,301			—
Total other income (loss)		(49,612	)		—		21,301			—
Net income (loss) before income taxes		19,777			—		(69,247	)		—
Income tax provision		55,677			—		55,677			—
Net loss	$	(35,900	)	$	—	$	(124,924	)	$	—
Net loss per share basic and diluted	$	(0.04	)	$	—	$	(0.23	)	$	—
Weighted average number of shares outstanding, basic and diluted		910,390			—		546,430			—

The accompanying notes are an integral part of these consolidated financial statements  

2

INPOINT COMMERCIAL REAL ESTATE INCOME, INC.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

Nine-months ended September 30, 2017

(unaudited)

	Common Stock
	Number of Shares		Par Value		Additional Paid in Capital			Distributions in Excess of Earnings			Total Stockholders’ Equity
Balance as of December 31, 2016		237,700	$	238	$	5,942,262		$	(64,179	)	$	5,878,321
Proceeds from offering		892,377		892		24,056,477			—			24,057,369
Offering costs		—		—		(1,708,089	)		—			(1,708,089	)
Net loss		—		—		—			(124,924	)		(124,924	)
Distributions declared		—		—		—			(789,337	)		(789,337	)
Balance as of September 30, 2017		1,130,077	$	1,130	$	28,290,650		$	(978,440	)	$	27,313,340

The accompanying notes are an integral part of these consolidated financial statements

3

INPOINT COMMERCIAL REAL ESTATE INCOME, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

	For the nine-months ended September 30,
	2017			2016
Cash flows from operating activities
Net loss		(124,924	)		—
Adjustments to reconcile net loss to cash provided by operations:
Net unrealized gain on real estate securities		(21,301	)		—
Amortization of bond premium		139,821			—
Changes in assets and liabilities:
Accrued interest receivable		(26,220	)		—
Prepaid expenses		(10,214	)		—
Interest payable		846			—
Loan fees payable		50,000			—
Accrued expenses		143,157			—
Income taxes payable		48,677			—
Due to related parties		(28,086	)		—
Other assets		(569	)		—
Net cash provided by operating activities	$	171,187		$	—
Cash flows from investing activities:
Origination of commercial loans		(7,500,000	)		—
Purchase of real estate securities		(26,203,500	)		—
Real estate securities redeemed		5,000,000			—
Net cash used in investing activities	$	(28,703,500	)	$	—
Cash flows from financing activities:
Proceeds from issuance of common stock		24,057,369			—
Payment of offering costs		(1,708,089	)		—
Proceeds from repurchase agreements		54,228,000			—
Principal repayments of repurchase agreements		(45,292,000	)		—
Distributions paid		(652,550	)		—
Net cash provided by financing activities	$	30,632,730		$	—
Net change in cash and cash equivalents		2,100,417			—
Cash and cash equivalents beginning of period		511,854			—
Cash and cash equivalents end of period	$	2,612,271		$	—
Supplemental disclosure of cash flow information:
Change in deferred offering costs and accrued offering expenses, included in due to related parties	$	543,150		$	—
Cash paid for interest	$	100,193		$	—
Distributions payable	$	170,017		$	—

The accompanying notes are an integral part of these consolidated financial statements

4

InPoint Commercial Real Estate Income, Inc.

Notes to Consolidated Financial Statements

September 30, 2017

(unaudited)

Note 1 – Organization and Business Operations

InPoint Commercial Real Estate Income, Inc. (the “Company”) was incorporated in Maryland on September 13, 2016 to originate, acquire and manage a diversified portfolio of commercial real estate (“CRE”) investments primarily comprised of (i) CRE debt, including first mortgage loans, subordinate mortgage and mezzanine loans, and participations in such loans and (ii) CRE securities, such as commercial mortgage-backed securities (“CMBS”), senior unsecured debt of publicly traded real estate investment trusts (“REITs”), and collateralized debt obligation notes. The Company may also invest in select equity investments in single-tenant, net leased properties. Substantially all of the Company’s business is conducted through InPoint REIT Operating Partnership, LP (the “OP”), a Delaware limited partnership. The Company is the sole general partner and directly or indirectly holds all of the limited partner interests in the OP.

The Company is externally managed by Inland InPoint Advisor, LLC (the “Advisor”), a Delaware limited liability company formed in August 2016 that is a wholly-owned indirect subsidiary of Inland Real Estate Investment Corporation, a member of The Inland Real Estate Group of Companies, Inc. The Advisor is responsible for coordinating the management of the day-to-day operations and originating, acquiring and managing the Company’s CRE investment portfolio, subject to the supervision of the Company’s board of directors. The Advisor performs its duties and responsibilities as the Company’s fiduciary pursuant to an advisory agreement dated October 25, 2016 between the Company and the Advisor (the “Advisory Agreement”).

The Advisor has delegated certain of its duties to SPCRE InPoint Advisors, LLC (the “Sub-Advisor”), a Delaware limited liability company formed in September 2016 that is a wholly-owned subsidiary of Sound Point CRE Management, LP, pursuant to a sub-advisory agreement between the Advisor and the Sub-Advisor. Among other duties, the Sub-Advisor has the authority to identify, negotiate, acquire and originate the Company’s investments and provide portfolio management, disposition, property management and leasing services to the Company. Notwithstanding such delegation to the Sub-Advisor or affiliates of the Sub-Advisor or Advisor, the Advisor retains ultimate responsibility for the performance of all the matters entrusted to it under the Advisory Agreement, including those duties which the Advisor has not delegated to the Sub-Advisor such as (i) valuation of the Company’s assets and calculation of the Company’s net asset value; (ii) management of the Company’s day-to-day operations, including the hiring and supervising of its employees, if any; (iii) preparation of stockholder reports and communications and arrangement of the Company’s annual stockholder meeting; and (iv) advising the Company regarding its initial qualification as a REIT for U.S. federal income tax purposes and monitoring its ongoing compliance with the REIT qualification requirements thereafter.

Note 2 – Summary of Significant Accounting Policies

Basis of Accounting

The accompanying consolidated financial statements and related footnotes have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) and require management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of income and expenses during the reported periods. Actual results could differ from such estimates.

5

InPoint Commercial Real Estate Income, Inc.

Notes to Consolidated Financial Statements (continued)

September 30, 2017

(unaudited)

Principles of Consolidation

The Company consolidates all entities that the Company controls through either majority ownership or voting rights. The accompanying consolidated financial statements include the accounts of the Company and the OP. All intercompany accounts and transactions have been eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a variable interest entity (“VIE”) for which the Company is the primary beneficiary. The Company has determined the OP is a VIE of which the Company is the primary beneficiary. Substantially all of the Company’s assets and liabilities are held by the OP.

Cash and Cash Equivalents

Cash and cash equivalents include funds on deposit with financial institutions, including demand deposits with financial institutions with original maturities of three months or less. The account balance may exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance coverage limits and, as a result, there could be a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage limits. The Company believes that the risk will not be significant, as the Company does not anticipate the financial institutions’ non-performance.

Real Estate Securities at Fair Value

The Company’s real estate securities are comprised of CMBS and are accounted for in accordance with ASC Topic 320, Investments — Debt and Equity Securities (“ASC 320”). The Company has chosen to make a fair value option election pursuant to ASC Topic 825, Financial Instruments (“ASC 825”) for its securities and, therefore, its real estate securities are recorded at fair market value on the consolidated balance sheets. The periodic changes in fair market value are recorded in current period earnings on the consolidated statements of operations as a component of net unrealized gain (loss) in value of real estate securities. These investments generally meet the requirements to be classified as available-for-sale under ASC 320, which requires the securities to be carried at fair value on the balance sheet with changes in fair value recorded to other comprehensive income on the Company’s consolidated statement of changes in stockholders’ equity. Electing the fair value option permits the Company to record changes in fair value of its investments in the consolidated statements of operations which, in management’s view, more appropriately reflects the results of operations for a particular reporting period.

The Company records its transactions in securities on a trade date basis and recognizes realized gains and losses on securities transactions on an identified cost basis.

Commercial Mortgage Loans Held for Investment and Allowance for Loan Losses

Commercial mortgage loans are held for investment purposes and are anticipated to be held until maturity. Accordingly, they are carried at cost, net of unamortized loan fees and origination costs, and premiums or discounts. Commercial mortgage loans that are deemed to be impaired will be carried at amortized cost less a specific allowance for loan losses. Interest income is recorded on the accrual basis and related discounts, premiums and net deferred fees or costs on investments are amortized over the life of the investment using the effective interest method. Amortization is reflected as an adjustment to interest income in the Company’s consolidated statements of operations. Upon measurement of impairment, the Company records an allowance for loan losses to reduce the carrying value of the loan with a corresponding charge through the provision for loan losses on the Company’s consolidated statements of operations.

The allowance for loan losses reflects management's estimate of loan losses inherent in the loan portfolio as of the balance sheet date. The Company uses a uniform process for determining its allowance for loan losses. The allowance for loan losses includes an asset-specific component and may include a general, formula-based component when the portfolio is determined to be of sufficient size to warrant such a reserve.

The asset-specific reserve component relates to reserves for losses on individual impaired loans. The Company considers a loan to be impaired when, based upon current information and events, it believes that it is probable that the Company will be unable to collect all amounts due under the contractual terms of the loan agreement. This assessment is made on an individual loan basis each quarter

6

InPoint Commercial Real Estate Income, Inc.

Notes to Consolidated Financial Statements (continued)

September 30, 2017

(unaudited)

based on such factors as payment status, lien position, borrower financial resources and investment in collateral, collateral type, project economics and geographic location, as well as national and regional economic factors. A reserve is established for an impaired loan when the present value of payments expected to be received, observable market prices or the estimated fair value of the collateral (for loans that are dependent on the collateral for repayment) is lower than the carrying value of that loan.

For collateral dependent impaired loans, impairment is measured using the estimated fair value of collateral less the estimated cost to sell. Valuations are performed or obtained at the time a loan is determined to be impaired and designated non-performing, and they are updated if circumstances indicate that a significant change in value has occurred. The Advisor generally will use the income approach through internally developed valuation models to estimate the fair value of the collateral for such loans. In more limited cases, the Advisor will obtain external "as is" appraisals for loan collateral, generally when third party participations exist.

General reserves are recorded when (i) available information as of each balance sheet date indicates that it is probable a loss has occurred in the portfolio and (ii) the amount of the loss can be reasonably estimated. The Company’s policy is to estimate loss rates based on actual losses experienced, if any, or based on historical realized losses experienced in the industry if the Company has not experienced any losses. Current collateral and economic conditions affecting the probability and severity of losses are taken into account when establishing the allowance for loan losses.

The Company performs a comprehensive analysis of its loan portfolio and assigns risk ratings to loans that incorporate management's current judgments about their credit quality based on all known and relevant internal and external factors that may affect collectability. The Company considers, among other things, payment status, lien position, borrower financial resources and investment in collateral, collateral type, project economics and geographic location, as well as national and regional economic factors. This methodology results in loans being segmented by risk classification into risk rating categories that are associated with estimated probabilities of default and principal loss. Ratings range from "1" to "5" with "1" representing the lowest risk of loss and "5" representing the highest risk of loss.

Loans are generally placed on non-accrual status when principal or interest payments are past due 90 days or more or when there is reasonable doubt that principal or interest will be collected in full. Accrued and unpaid interest is generally reversed against interest income in the period the loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management's judgment regarding the borrower's ability to make pending principal and interest payments. Non-accrual loans are restored to accrual status when past due principal and interest is paid and, in management's judgment, are likely to remain current. The Company may make exceptions to placing a loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection.

As of September 30, 2017 and December 31, 2016, the Company had $7,500,000 and $0 of commercial mortgage loans held for investment, respectively. The Company has not recorded any allowance for loan losses as the Company did not consider a loan loss to be probable.

Interest Income

Interest income on CMBS, which includes accretion of discounts and amortization of premiums on such CMBS, is recognized over the life of the investment using the effective interest method. Management estimates, at the time of purchase, the future expected cash flows and determines the effective interest rate based on these estimated cash flows and the Company’s purchase price. As needed, these estimated cash flows are updated and a revised yield is computed based on the current amortized cost of the investment. In estimating these cash flows, there are a number of assumptions that are subject to uncertainties and contingencies, including the rate and timing of principal payments (prepayments, repurchases, defaults and liquidations), the pass through or coupon rate and interest rate fluctuations. In addition, management must use its judgment to estimate interest payment shortfalls due to delinquencies on the underlying mortgage loans. These uncertainties and contingencies are difficult to predict and are subject to future events that may impact management’s estimates and the Company’s interest income.

7

InPoint Commercial Real Estate Income, Inc.

Notes to Consolidated Financial Statements (continued)

September 30, 2017

(unaudited)

Fair Value Measurements

The Company estimates fair value using available market information and valuation methodologies it believes to be appropriate for these purposes. The Company defines fair value based on the price that would be received upon sale of an asset or the exit price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 825 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value. The fair value hierarchy consists of three broad levels, which are described below:

• Level I - Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

• Level II - Inputs (other than quoted prices included in Level I) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

• Level III - Unobservable inputs which reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

The determination of where an asset or liability falls in the above hierarchy requires judgment and factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company evaluates its hierarchy disclosures each quarter and depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter.

Real estate securities are valued utilizing both observable and unobservable market inputs. These factors include projected future cash flows, ratings, subordination levels, vintage, remaining lives, credit issues, recent trades of similar real estate securities and the spreads used in the prior valuation. The Company obtains current market spread information where available and uses this information in evaluating and validating the market price of all real estate securities. Depending upon the significance of the fair value inputs used in determining these fair values, these real estate securities are classified in either Level II or Level III of the fair value hierarchy. As of September 30, 2017 and December 31, 2016, the Company received third-party quotes on each real estate security used in determining the fair value, all of which have been classified as Level II due to the observable nature of all significant inputs.

Organization and Offering Expenses

On October 25, 2016, the Company commenced an ongoing private offering (the “Offering”) of up to $500,000,000 in Class P Shares of common stock (the “Class P Shares”), pursuant to a private placement memorandum dated October 25, 2016. The purchase price per Class P Share is equal to $25.00 (the “Transaction Price”) plus applicable selling commissions, dealer manager fees and organization and offering expenses, resulting in a total purchase price of $27.38 per Class P Share if maximum selling commissions, dealer manager fees and organization and offering expenses are paid. Inland Securities Corporation (the “Dealer Manager”), an affiliate of the Advisor, is the dealer manager for the Offering.

Organization and offering expenses include all expenses incurred in connection with the Offering. Organization and offering expenses (other than selling commissions and the dealer manager fee) of the Company may be paid by the Advisor, Sub-Advisor, the Dealer Manager, or their respective affiliates on behalf of the Company and subsequently reimbursed by the Company. Offering expenses are deferred and a payable to the Advisor or Sub-Advisor until shares are sold in the Offering, at which point the expense reimbursement is paid from additional paid-in capital. These expenses include but are not limited to: (i) reimbursing the Dealer Manager and participating broker-dealers for bona fide out-of-pocket, itemized and detailed due diligence expenses incurred by these entities, (ii) expenses for printing and mailing, charges of transfer agents, registrars, trustees, escrow holders, depositaries and experts, and (iii) expenses of qualifying the sale of the shares under federal and state laws, including taxes and fees and accountants’ and attorneys’ fees and expenses.

The Company is obligated to reimburse the Advisor, the Sub-Advisor and their respective affiliates, as applicable, for organization and offering expenses paid by them on behalf of the Company to the extent organization and offering expenses (excluding selling commissions and the dealer manager fee) incurred by the Company in the Offering do not exceed the organization and offering expenses paid by investors in connection with the sale of Class P Shares in the Offering. As a result, these expenses are only a liability

8

InPoint Commercial Real Estate Income, Inc.

Notes to Consolidated Financial Statements (continued)

September 30, 2017

(unaudited)

of the Company to the extent aggregate organization and offering expensesdo not exceed the organization and offering expenses paid by investors in connection with the sale of Class P Shares in the Offering, determined at the end of the Offering.

Repurchase Agreements – Real Estate Securities

The Company enters into Master Repurchase Agreements (each, an “MRA”) that allow the Company to sell real estate securities while providing a fixed repurchase price for the same real estate securities in the future. The repurchase contracts on each security under an MRA generally mature in 30 to 90 days and terms are adjusted for current market rates as necessary. Repurchase agreements are being accounted for as secured borrowings since the Company maintains effective control of the financed assets. Under the MRAs, the respective lender retains the right to mark the underlying collateral to fair value. A reduction in the value of pledged assets would require the Company to provide additional collateral or fund margin calls. The Company intends to maintain a level of liquidity that will enable the Company to meet margin calls. In addition, the MRAs are generally subject to certain financial covenants. The Company was in compliance with all financial covenant requirements as of September 30, 2017.

Income Taxes

The Company intends to qualify as a REIT under the Internal Revenue Code of 1986, as amended, for federal income tax purposes commencing with the tax year ending December 31, 2017. If the Company qualifies for taxation as a REIT, the Company generally will not be subject to federal income tax to the extent it distributes its REIT taxable income, subject to certain adjustments, to its stockholders. Subsequently, if the Company fails to qualify as a REIT in any taxable year, the Company will be subject to federal income tax on its taxable income at regular corporate tax rates. Even if the Company qualifies for taxation as a REIT, the Company may be subject to certain state and local taxes on its income, property or net worth and federal income and excise taxes on its undistributed income.

The Company had no uncertain tax positions as of September 30, 2017 and December 31, 2016. The Company expects no significant increases or decreases in uncertain tax positions due to changes in tax positions within one year of September 30, 2017 or December 31, 2016. The Company had no interest or penalties relating to income taxes recognized in the consolidated statements of operations for the three and nine-months ended September 30, 2017 or 2016. As of September 30, 2017, returns for the calendar year 2016 remain subject to examination by U.S. and various state and local tax jurisdictions.

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences and are attributable to (1) differences between the financial statement carrying amounts and their respective tax bases, and (2) net operating losses. A valuation allowance is established for uncertainties relating to realization of deferred tax assets. As of December 31, 2016, the Company had a deferred tax asset of $10,832, related to organization and start-up costs, which are capitalized for income tax purposes, and a current net operating loss, and an unrealized loss in value of real estate securities. A valuation allowance in the amount of $10,832 was recorded due to current uncertainty of realization.

As of September 30, 2017, the Company has reversed deferred tax assets and the valuation allowance related to its activities. As a REIT, the Company is not expected to pay federal income tax at the REIT level, but instead a dividends paid deduction will generally offset its taxable income. As a result, while the Company will still be permitted to use net operating losses to offset its REIT taxable income, the Company generally does not expect to pay taxes on its REIT taxable income, and therefore does not expect to be able to realize such deferred tax assets.

For the three and nine months ended September 30, 2017, the Company has incurred $55,677 in current income tax expense in a consolidated taxable REIT subsidiary.  This tax is comprised of $42,841 in federal and $12,836 in state income tax expense.  The majority of this expense was related to the receipt of a one-time prepayment penalty interest received on the early pay-off of one investment.

Distributions Payable

Distributions payable represent distributions declared as of the balance sheet date which are payable to stockholders.

9

InPoint Commercial Real Estate Income, Inc.

Notes to Consolidated Financial Statements (continued)

September 30, 2017

(unaudited)

Per Share Data

The Company calculates basic and diluted earnings per share by dividing net income attributable to the Company for the period by the weighted-average number of shares of common stock outstanding for that period.

Accounting Pronouncements Recently Issued but Not Yet Effective

In June 2016, the Financial Accounting Standards Board issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”), which changes how entities measure credit losses for financial assets carried at amortized cost. ASU 2016-13 eliminates the requirement that a credit loss must be probable before it can be recognized and instead requires an entity to recognize the current estimate of all expected credit losses. ASU 2016-13 is effective for SEC filers for reporting periods beginning after December 15, 2019. The amendments may be adopted early for reporting periods beginning after December 15, 2018. The Company is currently evaluating the impact ASU 2016-13 will have on its allowance for loan losses estimate.

Note 3 – Real Estate Securities

The following is a summary of the Company’s real estate securities as of September 30, 2017:

	Collateral Type	Interest Rate	Maturity Date	Par Value		Fair Value
CMBS 1	Hospitality	LIBOR + 4.6500%	November/2018	$	5,400,000	$	5,439,960
CMBS 2	Retail	LIBOR + 3.4000%	July/2019		5,078,500		5,078,500
CMBS 3	Hospitality	LIBOR + 0.9200%	August/2019		16,000,000		16,000,000
Total				$	26,478,500	$	26,518,460

The Company classified its CMBS as available-for-sale as of September 30, 2017. These investments are reported at fair value in the consolidated balance sheets with changes in fair value recorded in other income or loss in the consolidated statements of operations. The following table shows the amortized cost, unrealized gains/losses and fair value of the Company’s CMBS investments as of September 30, 2017:

	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
CMBS 1	$	5,423,898	$	16,062	$	—	$	5,439,960
CMBS 2		5,078,500		—		—		5,078,500
CMBS 3		16,000,000		—		—		16,000,000
Total	$	26,502,398	$	16,062	$	—	$	26,518,460

The following is a summary of the Company’s real estate securities as of December 31, 2016:

	Collateral Type	Number of Investments		Interest Rate	Maturity Date	Par Value		Fair Value
CMBS 1	Hospitality		1	LIBOR + 4.6500%	November/2018	$	5,400,000	$	5,433,480

The Company classified its CMBS as available-for-sale as of December 31, 2016. These investments are reported at fair value in the consolidated balance sheets with changes in fair value recorded in other income or loss in the consolidated statements of operations. The following table shows the amortized cost, unrealized gains/losses and fair value of the Company’s CMBS investments as of December 31, 2016:

	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
CMBS 1	$	5,438,719	$	—	$	(5,239	)	$	5,433,480

As of September 30, 2017, the Company held three CMBS with a total carrying value of $26,518,460 with a total unrealized gain of $16,062. As of December 31, 2016, the Company held one CMBS with a carrying value of $5,433,480 with an unrealized loss of $5,239.  No position had an unrealized loss for a period greater than 12 months. The Company did not have any realized gains or losses during the nine-month periods ended September 30, 2017 and 2016.

10

InPoint Commercial Real Estate Income, Inc.

Notes to Consolidated Financial Statements (continued)

September 30, 2017

(unaudited)

Note 4 – Commercial Mortgage Loans Held for Investment

The following is a summary of the Company’s commercial mortgage loans held for investment as of September 30, 2017:  

	Number of Loans		Principal Balance		Unamortized (fees)/costs, net		Carrying Value		Weighted Average Coupon			Weighted Average Years to Maturity
Mezzanine loan		1	$	7,500,000	$	—	$	7,500,000		9.20	%		10.0

As of December 31, 2016, the Company had no commercial mortgage loans held for investment.

Credit Characteristics

As part of the Company’s process for monitoring the credit quality of its loans, it performs a quarterly asset review of the loan portfolio and assigns risk ratings to each of its loans. Risk factors include payment status, lien position, borrower financial resources and investment in collateral, collateral type, project economics and geographic location, as well as national and regional economic factors. To determine the likelihood of loss, the loans are rated on a 5-point scale as follows:

Investment Grade	Investment Grade Definition
1	Investment exceeding fundamental performance expectations and/or capital gain expected. Trends and risk factors since time of investment are favorable.
2	Performing consistent with expectations and a full return of principal and interest expected. Trends and risk factors are neutral to favorable.
3	Performing loan requiring closer monitoring.  Trends and risk factors show some deterioration. Collection of principal and interest is still expected.
4	Underperforming investment with the potential of some interest loss but still expecting a positive return on investment. Trends and risk factors are negative.
5	Underperforming investment with expected loss of interest and some principal.

All commercial mortgage loans are assigned an initial risk rating of 2. The Company originated its first commercial mortgage loan held for investment during the period ended September 30, 2017 and assigned a risk rating of 2 to the loan as of September 30, 2017. The Company has not recorded any allowance for loan losses as the Company did not consider a loan loss to be probable.

Note 5 – Repurchase Agreements—Real Estate Securities

As of September 30, 2017, the Company had entered into one MRA and had two outstanding repurchase agreements, as described in the table below.  The Company had not entered into any MRAs and did not have any outstanding repurchase agreements as of December 31, 2016.

							Weighted Average
Counterparty	Amount Outstanding		Accrued Interest Payable		Collateral Pledged		Interest Rate			Days to Maturity
Counterparty 1	$	8,936,000	$	846	$	11,400,000		2.29113	%		27

Note 6 – Stockholders Equity

During the nine-month period ended September 30, 2017, the Company issued 892,377 shares of Class P common stock at an average price of $26.96 per share with total net proceeds of $22,349,280 after selling costs of $1,708,089. In addition, the Company incurred $543,150 in reimbursable deferred offering costs that are payable to the Advisor and Sub-Advisor from future stock issuance.

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InPoint Commercial Real Estate Income, Inc.

Notes to Consolidated Financial Statements (continued)

September 30, 2017

(unaudited)

Distributions Declared

The table below sets forth the distributions declared for Class P Shares during the nine-month period ended September 30, 2017.

	Distributions Declared Per Share
Date Declared	Distribution Period	Daily Distribution Amount		Date of Payment
February 22, 2017	March 1, 2017 through March 31, 2017	$	0.005260274	April 3, 2017
February 22, 2017	April 1, 2017 through April 30, 2017	$	0.005260274	May 1, 2017
February 22, 2017	May 1, 2017 through May 31, 2017	$	0.005260274	June 1, 2017
May 31, 2017	June 1, 2017 through June 30, 2017	$	0.005260274	July 5, 2017
May 31, 2017	July 1, 2017 through July 31, 2017	$	0.005260274	August 1, 2017
May 31, 2017	August 1, 2017 through August 31, 2017	$	0.005260274	September 1, 2017
August 9, 2017	September 1, 2017 through September 30, 2017	$	0.005260274	October 2, 2017
August 9, 2017	October 1, 2017 through October 31, 2017	$	0.005260274	November 1, 2017
August 9, 2017	November 1, 2017 through November 30, 2017	$	0.005260274	On or before December 7, 2017

Distributions Paid

The table below sets forth the distributions paid in cash with respect to the Class P Shares during the nine-month period ended September 30, 2017.

Distribution Period	Payment Date	Distribution Amount
December 2016	January 3, 2017	$	33,230
January 2017	February 1, 2017		40,572
February 2017	March 1, 2017		40,661
March 2017	April 3, 2017		52,273
April 2017	May 1, 2017		59,276
May 2017	June 1, 2017		71,450
June 2017	July 5, 2017		82,179
July 2017	August 1, 2017		120,455
August 2017	September 1, 2017		152,454
Total		$	652,550

During the nine-month period ended September 30, 2017, the Company declared distributions of $789,337 and paid cash distributions of $652,550. As of September 30, 2017, distributions declared but not yet paid amounted to $170,017. There were no distributions declared or paid during the nine-month period ended September 30, 2016, as the Company did not begin operations until October 2016.

Note 7 – Net Loss Per Share

The following table is a summary of the basic and diluted net loss per share computation for the three and nine-month periods ended September 30, 2017 and 2016:

	Three-month period ended September 30,					Nine-month period ended September 30,
	2017			2016		2017			2016
Net loss	$	(35,900	)	$	—	$	(124,924	)	$	—
Weighted average shares outstanding, basic and diluted		910,390			—		546,430			—
Net loss per share, basic and diluted	$	(0.04	)	$	—	$	(0.23	)	$	—

12

InPoint Commercial Real Estate Income, Inc.

Notes to Consolidated Financial Statements (continued)

September 30, 2017

(unaudited)

Note 8 – Commitments and Contingencies

Litigation and Regulatory Matters

In the ordinary course of business, the Company may become subject to litigation, claims and regulatory matters. The Company has no knowledge of material legal or regulatory proceedings pending or known to be contemplated against the Company at this time.

Note 9 – Transactions with Related Parties

As of September 30, 2017, the Advisor had invested $1.0 million in the Company through the purchase of 40,040 shares of Class P common stock. The purchase price per Class P Share for the Advisor’s investment was the Transaction Price, with no payment of selling commissions, dealer manager fees or organization and offering expenses. The Advisor has agreed pursuant to its subscription agreement that, for so long as it or its affiliate is serving as the Advisor, (i) it will not sell or transfer at least 8,000 of the Class P Shares that it has purchased, accounting for $200,000 of its investment, to an unaffiliated third party; (ii) it will not be eligible to submit a request for these 40,040 Class P Shares pursuant to the Company’s share repurchase program prior to the fifth anniversary of the date on which such shares were purchased; and (iii) repurchase requests made for these shares will only be accepted (a) on the last business day of a calendar quarter, (b) after all repurchase requests from all other stockholders for such quarter have been accepted and (c) to the extent that such repurchases do not cause total repurchases in the quarter in which they are being repurchased to exceed that quarter’s repurchase cap.

As of September 30, 2017, Sound Point Capital Management, LP (“Sound Point”), an affiliate of the Sub-Advisor, had invested $3.0 million in the Company through the purchase of 120,000 shares of Class P common stock. The purchase price per Class P Share for this investment was the Transaction Price, with no payment of selling commissions, dealer manager fees or organization and offering expenses. Sound Point has agreed pursuant to its subscription agreement that, for so long as the Sub-Advisor or its affiliate is serving as the Sub-Advisor, (i) it will not be eligible to submit a request for the repurchase of these 120,000 shares pursuant to the Company’s share repurchase program prior to the fifth anniversary of the date on which such shares were purchased; and (ii) repurchase requests made for these shares will only be accepted (a) on the last business day of a calendar quarter, (b) after all repurchase requests from all other stockholders for such quarter have been accepted and (c) to the extent that such repurchases do not cause total repurchases in the quarter in which they are being repurchased to exceed that quarter’s repurchase cap.

The following table summarizes the Company’s related party transactions for the nine-month periods ended September 30, 2017 and 2016:

	Nine-month period ended September 30,				Payable as of September 30,
	2017		2016		2017		2016
Organization and offering expense reimbursement(1)	$	836,839	$	—	$	1,510,598	$	—
Selling commissions and dealer manager fee(2)		1,414,400		—	-			—
Advisory fee(3)	-			—	-			—
Operating expense reimbursement(4)		215,225		—		182		—
Total	$	2,466,464	$	—	$	1,510,780	$	—

(1) The Company reimburses the Advisor, the Sub-Advisor and their respective affiliates for costs and other expenses related to the Offering, provided that aggregate reimbursements of such costs and expenses shall not exceed the organization and offering expenses paid by investors in connection with the sale of Class P Shares in the Offering. Offering costs are offset against stockholders’ equity when paid. Unpaid amounts are recorded as deferred offering costs and included in due to related parties in these consolidated balance sheets.

(2) The Dealer Manager, an affiliate of the Advisor, receives selling commissions up to 5%, and a dealer manager fee up to 3%, of the Transaction Price for each Class P Share sold in the Offering, the majority of which is paid to third-party broker-dealers.

(3) The Company pays the Advisor an advisory fee comprised of (1) a fixed component and (2) a performance component. The fixed component of the advisory fee is paid quarterly in arrears in an amount equal to 1/4th of 1.5% of the average aggregate value of the Company’s assets over such quarter, where the value of each asset shall be the value determined in accordance with the Company’s valuation policies or, if such value has not yet been determined, the book value of the asset. If, in any given calendar quarter ending on or prior to December 31, 2017, the modified funds from operations (“MFFO”), which is a non-GAAP supplemental financial performance measure, is less than the aggregate distributions payable to stockholders for such

13

InPoint Commercial Real Estate Income, Inc.

Notes to Consolidated Financial Statements (continued)

September 30, 2017

(unaudited)

quarter, then a portion of the fixed component of the advisory fee otherwise payable with respect to that quarter shall be deferred in an amount equal to the distributions payable for that quarter minus the MFFO for that quarter, provided that such deferred amount shall not exceed 25% of the fixed component of the advisory fee otherwise payable with respect to that quarter. Deferred portions of the fixed component of the advisory fee will be paid to the Advisor to the extent that MFFO exceeds distributions paid or payable to stockholders for a future calendar quarter, but only to the extent of such excess. The performance component of the advisory fee is calculated and paid annually with respect to the Class P Shares, such that for any year in which the Company’s total return per Class P Share exceeds 7% per annum, the Advisor will receive 20% of the excess total return allocable to the Class P Shares; provided that in no event will the performance component of the advisory fee exceed 15% of the aggregate total return allocable to Class P Shares for such year. The Advisor has waived the advisory fee for the nine-month period ended September 30, 2017.

(4) The Company reimburses the Advisor or its affiliates for out-of-pocket expenses that it incurs in connection with providing services to the Company, provided that the Company does not reimburse overhead costs, including rent and utilities or personnel costs (including salaries, bonuses, benefits and severance payments).

Note 10 – Fair Value of Financial Instruments

The following table presents the Company’s financial instruments carried at fair value in the consolidated balance sheets by its level in the fair value hierarchy (see Note 2 – Summary of Significant Accounting Policies) as of September 30, 2017:

	Total		Level I		Level II		Level III
Real estate securities	$	26,518,460		—	$	26,518,460		—

Note 11 – Subsequent Events

The Company has evaluated subsequent events through November 9, 2017, the date the financial statements were issued, and determined that there have not been any events that have occurred that would require adjustments to disclosures in the consolidated financial statements except for the following transactions:

Sale of Common Stock

As of November 8, 2017, the Company had 1,328,175 shares of common stock outstanding and had raised proceeds from the Offering since September 30, 2017 and since inception as follows:

Source of Capital	October 1, 2017 through November 8, 2017		Total
Class P Shares	$	5,359,127	$	35,358,996

Distributions Declared

The table below sets forth the distributions declared for Class P Shares.

	Distributions Declared Per Share
Date Declared	Distribution Period	Daily Distribution Amount		Date of Payment
November 8, 2017	December 1, 2017 through December 31, 2017	$	0.005260274	On or before January 7, 2018
November 8, 2017	January 1, 2018 through January 31, 2018	$	0.005260274	On or before February 7, 2018
November 8, 2017	February 1, 2018 through February 28, 2018	$	0.005260274	On or before March 7, 2018
November 8, 2017	March 1, 2018 through March 31, 2018	$	0.005260274	On or before April 7, 2018

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Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

Certain statements in this Quarterly Report on Form 10-Q constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Words such as “may,” “could,” “should,” “expect,” “intend,” “plan,” “goal,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “variables,” “potential,” “continue,” “expand,” “maintain,” “create,” “strategies,” “likely,” “will,” “would” and variations of these terms and similar expressions, or the negative of these terms or similar expressions, are intended to identify forward-looking statements.

These forward-looking statements are not historical facts but reflect the intent, belief or current expectations of the management of InPoint Commercial Real Estate Income, Inc. (which we refer to herein as the “Company,” “we,” “our” or “us”) based on their knowledge and understanding of the business and industry, the economy and other future conditions. These statements are not guarantees of future performance, and we caution stockholders not to place undue reliance on forward-looking statements. Actual results may differ materially from those expressed or forecasted in the forward-looking statements due to a variety of risks, uncertainties and other factors, including but not limited to the factors described below:

• Market disruptions may adversely impact many aspects of our operating results and operating condition;

• If we cannot generate sufficient cash flow from operations to fully fund distributions, some or all of our distributions may be paid from other sources, including from the proceeds from sales of our Class P common stock (our “Class P Shares”), which will reduce the amount of cash we ultimately have to invest in assets;

• There is no current public trading market for our Class P Shares, and we do not expect that such a market will ever develop. Therefore, repurchase of shares by us will likely be the only way for stockholders to dispose of their shares and even if our stockholders are able to sell their shares by our share repurchase program, or otherwise, they may not be able to recover the amount of their investment in our shares;

• Our charter generally limits the total amount we may borrow to 300% of our net assets, equivalent to 75% of the costs of our assets;

• Inland InPoint Advisor, LLC (our “Advisor”) and SPCRE InPoint Advisors, LLC (our “Sub-Advisor”) may face conflicts of interest in allocating personnel and resources between its affiliates;

• We do not have arm’s-length agreements with our Advisor, our Sub-Advisor or any other affiliates of our Advisor or Sub-Advisor; and

• If we fail to qualify as a real estate investment trust (“REIT”), our operations and distributions to stockholders will be adversely affected.

Forward-looking statements in this Quarterly Report on Form 10-Q reflect our management’s view only as of the date of this Quarterly Report, and may ultimately prove to be incorrect or false. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results except as required by applicable law. We intend for these forward-looking statements to be covered by the applicable safe harbor provisions created by Section 27A of the Securities Act and Section 21E of the Exchange Act.

The following discussion and analysis relates to the three and nine-months ended September 30, 2017 and 2016 and as of September 30, 2017 and December 31, 2016. You should read the following discussion and analysis along with our consolidated financial statements and the related notes included in this report.

Overview

We are a Maryland corporation formed on September 13, 2016 to originate, acquire and manage a diversified portfolio of commercial real estate (“CRE”) investments primarily comprised of (i) CRE debt, including first mortgage loans, subordinate mortgage and mezzanine loans, and participations in such loans and (ii) CRE securities, such as commercial mortgage-backed securities (“CMBS”), senior unsecured debt of publicly traded REITs, and collateralized debt obligation notes. We may also invest in select equity investments in single-tenant, net leased properties. Substantially all of our business is conducted through our operating partnership, of which we are the sole general partner.  We are externally managed by Inland InPoint Advisor, LLC, an indirect subsidiary of Inland Real Estate Investment Corporation. Our Advisor has engaged SPCRE InPoint Advisors, LLC, a subsidiary of Sound Point CRE Management, LP, to perform certain services on behalf of the Advisor for us.

15

We intend to operate in a manner that will allow us to qualify as a REIT for U.S. federal income tax purposes commencing with the taxable year ending December 31, 2017. Among other requirements, REITs are required to distribute to stockholders at least 90% of their annual REIT taxable income (computed without regard to the dividends-paid deduction and excluding net capital gain).

On October 25, 2016, we commenced a private offering (the “Offering”) of up to $500,000,000 in our Class P Shares, pursuant to a private placement memorandum dated October 25, 2016. The purchase price per Class P Share currently equals $25.00 (the “Transaction Price”) plus applicable selling commissions, dealer manager fees and organization and offering expenses, resulting in a total purchase price of $27.38 per Class P Share if maximum selling commissions, dealer manager fees and organization and offering expenses are paid. Inland Securities Corporation (our “Dealer Manager”), an affiliate of our Advisor, is our dealer manager for the Offering. As of November 8, 2017, we had received and accepted investors’ subscriptions for and issued 1,328,175 Class P Shares in the Offering, resulting in gross proceeds of $35,358,996. As of November 8, 2017, $464,641,004 of Class P Shares remained to be sold in the Offering.

Significant Accounting Policies and Use of Estimates

A summary of our significant accounting policies is set forth in Note 2 - “Summary of Significant Accounting Policies” which is included in our notes to consolidated financial statements included in this Quarterly Report on Form 10-Q.

Portfolio

We began operations in October 2016 and our objective is to originate, acquire and manage an investment portfolio of CRE debt and CRE securities that is diversified based on the type and location of collateral securing the underlying CRE debt and CRE securities.  We anticipate our investment portfolio will be less diversified and have higher concentrations in asset class, collateral type and geographic location until our capital raise reaches levels that will allow for the diversification.

Real Estate Securities

As of September 30, 2017 and December 31, 2016, our portfolio of real estate securities consisted of three and one investments in CMBS, respectively. Our CMBS investments had a fair value of $26,518,460 and $5,433,480 as of September 30, 2017 and December 31, 2016, respectively. The increase in the size of our portfolio of real estate securities is due to investing capital received from the Offering and increased leverage arising from a Master Repurchase Agreement (the “MRA”).

As of September 30, 2017 and December 31, 2016, our CMBS investments had a weighted average coupon of 3.4% and 5.4% and a remaining life of 1.7 and 1.9 years, respectively.  As of September 30, 2017, 60% of our real estate securities portfolio based on fair value was rated AAA and 40% was rated BB- from at least one national rating agency.  As of December 31, 2016, 100% of our portfolio based on fair value had a rating by a national rating agency of BB.  The change in the ratings was due to the purchase of additional assets as we invested capital received from the Offering.  Our credit process evaluates the underlying quality of the loans securing the CMBS at the time of purchase and we continually review the credit performance while we own the CMBS. Ratings by national rating agencies are subject to change and may not be continuously updated, and therefore we do not place reliance on these ratings.

Commercial Mortgage Loans Held for Investment

As of September 30, 2017, our portfolio of commercial mortgage loans held for investment consisted of one mezzanine loan which was secured by office buildings. The loan had a carrying value of $7,500,000 and a rate of 9.20%.  There were no commercial mortgage loans held for investment as of December 31, 2016. The increase in the size of our portfolio is due to investing capital received from the Offering.

Allowance for Loan Losses

The Company originated its first commercial loan held for investment during the three-month period ended September 30, 2017. As of September 30, 2017, the Company has not recorded any allowance for loan losses as the loan in the portfolio was not impaired and was performing in compliance with the contractual terms. See Note 2 - “Summary of Significant Accounting Policies” which is included in our notes to consolidated financial statements included in this Quarterly Report on Form 10-Q for further description of our allowance for loan loss policy.

16

Results of Operations

Comparison of the Three-Months Ended September 30, 2017 to the Three-Months Ended September 30, 2016

We began operations in October 2016 and had no operations for the three-month period ended September 30, 2016.

Net Interest Income

Net interest income is generated on our interest-earning assets less related interest-bearing liabilities. The following table presents the average balance of interest-earning assets less related interest-bearing liabilities, associated interest income and expense and corresponding yield earned and incurred for the periods indicated.

	Three-Month Period Ended September 30,
	2017								2016
	Average Carrying Value (1)			Interest Income/ Expense (2)		Weighted Average Yield/Financing Cost (3)			Average Carrying Value (1)			Interest Income/ Expense (2)		Weighted Average Yield/Financing Cost (3)
Interest-earning assets:
Real estate securities	$	14,808,318		$	299,803		7.9	%	$	—		$	—		—	%
Commercial mortgage loans		163,043			3,833		9.2	%	$	—		$	—		—	%
Total/Weighted Average	$	14,971,361		$	303,636		7.9	%	$	—		$	—		—	%
Interest-bearing liabilities:
Repurchase agreements—securities	$	5,579,033		$	49,302		3.5	%	$	—		$	—		—	%
Total/Weighted Average	$	5,579,033		$	49,302		3.5	%	$	—		$	—		—	%
Net interest income/spread				$	254,334		4.5	%				$	—		—	%
Average leverage %(4)		59.4	%							—	%
Weighted average levered yield(5)							10.6	%							—	%

(1) Based on amortized cost for real estate securities and principal amount for repurchase agreements.  Amounts are calculated based on the average daily balance.

(2) Includes the effect of amortization of premium or accretion of discount.

(3) Calculated as interest income or expense divided by average carrying value.

(4) Calculated by dividing total average interest-bearing liabilities by total average equity (total average interest-earning assets less total average liabilities).

(5) Calculated by taking the sum of (i) the net interest spread multiplied by the average leverage and (ii) the weighted average yield on interest-earning assets.

For the three-month period ended September 30, 2017, our investment portfolio had an average carrying value of $15.0 million and a weighted average interest rate of 7.9%.  We financed the CMBS, in part, with repurchase agreements with an average balance of $5.6 million and an average financing cost of 3.5%.  Our net interest income was $254,334 and had a weighted average levered yield of 10.6%.

Operating expenses

Operating expenses for the three-months ended September 30, 2017 and 2016 consisted of the following:

	Three-Months Ended September 30,
	2017		2016
Administration expense	$	28,750	$	—
Directors compensation		20,100		—
Professional service fees		98,215		—
Other expenses		37,880		—
Total operating expenses	$	184,945	$	—

Total operating expenses for the three-months ended September 30, 2017 and 2016 were $184,945 and $0, respectively.

17

Other Income

For the three-month periods ended September 30, 2017 and 2016, our real estate securities decreased in value by $49,612 and $0, respectively. The changes in valuation were unrealized and were the result of the changes in market conditions that affected the price of our securities.

Net Loss

For the three-months ended September 30, 2017 and 2016, our net loss was $35,900 and $0, or $0.04 and $0 per share (basic and diluted), respectively.

Comparison of the Nine-Months Ended September 30, 2017 to the Nine-Months Ended September 30, 2016

We began operations in October 2016 and had no operations for the nine-month period ended September 30, 2016.

Net Interest Income

Net interest income is generated on our interest-earning assets less related interest-bearing liabilities. The following table presents the average balance of interest-earning assets less related interest-bearing liabilities, associated interest income and expense and corresponding yield earned and incurred for the periods indicated.

	Nine-Month Period Ended September 30,
	2017								2016
	Average Carrying Value (1)			Interest Income/ Expense (2)		Weighted Average Yield/Financing Cost (3)			Average Carrying Value (1)			Interest Income/ Expense (2)		Weighted Average Yield/Financing Cost (3)
Interest-earning assets:
Real estate securities	$	11,109,986		$	549,847		6.5	%	$	—		$	—		—	%
Commercial mortgage loans		54,945			3,833		9.2	%	$	—		$	—		—	%
Total/Weighted Average	$	11,164,931		$	553,680		6.5	%	$	—		$	—		—	%
Interest-bearing liabilities:
Repurchase agreements—securities	$	4,501,974		$	101,039		3.0	%	$	—		$	—		—	%
Total/Weighted Average	$	4,501,974		$	101,039		3.0	%	$	—		$	—		—	%
Net interest income/spread				$	452,640		3.6	%				$	—		—	%
Average leverage %(4)		67.6	%							—	%
Weighted average levered yield (5)							8.9	%							—	%

(1) Based on amortized cost for real estate securities and principal amount for repurchase agreements.  Amounts are calculated based on the average daily balance.

(2) Includes the effect of amortization of premium or accretion of discount.

(3) Calculated as interest income or expense divided by average carrying value.

(4) Calculated by dividing total average interest-bearing liabilities by total average equity (total average interest-earning assets less total average liabilities).

(5) Calculated by taking the sum of (i) the net interest spread multiplied by the average leverage and (ii) the weighted average yield on interest-earning assets.

For the nine-month period ended September 30, 2017, our investment portfolio had an average carrying value of $11.2 million and a weighted average interest rate of 6.5%.  We financed the CMBS, in part, with repurchase agreements with an average balance of $4.5 million and an average financing cost of 3.0%.  Our net interest income was $452,640 and had a weighted average levered yield of 8.9%.

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Operating expenses

Operating expenses for the nine-months ended September 30, 2017 and 2016 consisted of the following:

	Nine-Months Ended September 30,
	2017		2016
Administration expense	$	86,250	$	—
Directors compensation		60,700		—
Professional service fees		328,549		—
Other expenses		67,690		—
Total operating expenses	$	543,189	$	—

Total operating expenses for the nine-months ended September 30, 2017 and 2016 were $543,189 and $0, respectively.

Other Income

For the nine-month periods ended September 30, 2017 and 2016, our real estate securities increased in value by $21,301 and $0, respectively. The changes in valuation were unrealized and were the result of the changes in market conditions that affected the price of our securities.

Net Loss

For the nine-months ended September 30, 2017 and 2016, our net loss was $124,924 and $0, or $0.23 and $0 per share (basic and diluted), respectively.

Non-GAAP Financial Measures

Funds from Operations and Modified Funds from Operations

We use Funds from Operations (“FFO”), a widely accepted metric, to evaluate our performance. FFO provides a supplemental measure to compare our performance and operations to other REITs. Due to certain unique operating characteristics of real estate companies, the National Association of Real Estate Investment Trusts (“NAREIT”) has promulgated a standard known as FFO, which it believes more accurately reflects the operating performance of a REIT. As defined by NAREIT, FFO means net income computed in accordance with generally accepted accounting principles (“GAAP”), excluding gains (or losses) from sales of operating property, plus depreciation and amortization and after adjustments for unconsolidated entities. In addition, NAREIT has further clarified the FFO definition to add-back impairment write-downs of depreciable real estate or of investments in unconsolidated entities that are driven by measurable decreases in the fair value of depreciable real estate and to exclude the earnings impacts of cumulative effects of accounting changes. We have adopted the NAREIT definition for computing FFO.

Our business plan is to operate as a mortgage REIT with our portfolio consisting of CRE debt and CRE securities. We will typically have no FFO adjustments to our net income or loss computed in accordance with GAAP. Although we have the ability to acquire real property, we have not acquired any at this time and as such have not had any FFO adjustments to our net income or loss computed in accordance with GAAP.

Under GAAP, acquisition related costs are treated as operating expenses reducing our income. Publicly registered, non-listed REITs typically engage in a significant amount of acquisition activity in the early years of their operations, and thus incur significant acquisition related costs during these initial years. Although other start up entities may engage in significant acquisition activity during their initial years, REITs such as us that are not listed on an exchange are unique in that they typically have a limited timeframe during which they acquire a significant number of investments and thus incur significant acquisition related costs. Due to the above factors and other unique features of publicly registered, non-listed REITs, the Investment Program Association (“IPA”), an industry trade group, published a standardized measure known as Modified Funds from Operations (“MFFO”), which the IPA has promulgated as a supplemental measure for publicly registered non-listed REITs and which may be another appropriate supplemental measure to reflect the operating performance of a non-listed REIT.

The IPA defines MFFO as FFO adjusted for acquisition fees and expenses, amounts relating to straight line rents and amortization of premiums on debt investments, non-recurring impairments of real estate-related investments, mark-to-market adjustments included in net income, non-recurring 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.

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We define MFFO in accordance with the concepts established by the IPA and adjust FFO for certain items, such as amortization of premium and discounts on real estate securities. We purchase real estate securities at a premium or discount to par value, and in accordance with GAAP, record the amortization of premium/accretion of the discount to interest income. We believe that excluding the amortization of premiums and discounts provides better insight to the expected contractual cash flows.  In addition, we adjust FFO for unrealized gains or losses on real estate securities. Any mark-to-market or fair value adjustments are based on general market or overall industry conditions and may be temporary in nature.

Because MFFO may be a recognized measure of operating performance within the non-listed REIT industry, MFFO and the adjustments used to calculate it may be useful in order to evaluate our performance against other non-listed REITs. Like FFO, MFFO is not equivalent to our net income or loss as determined under GAAP, as detailed in the table below, and MFFO may not be a useful measure of the impact of long-term operating performance on value if we continue to acquire a significant amount of investments.

Our presentation of FFO and MFFO may not be comparable to other similarly titled measures presented by other REITs. We believe that the use of FFO and MFFO provides a more complete understanding of our operating performance to stockholders 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. Neither FFO nor MFFO is intended to be an alternative to “net income” or to “cash flows from operating activities” as determined by GAAP as a measure of our capacity to pay distributions. Management uses FFO and MFFO to compare our operating performance to that of other REITs and to assess our operating performance.

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

Our FFO and MFFO are calculated as follows:

	Nine-months ended September 30,
	2017			2016
Net loss	$	(124,924	)	$	—
Funds from operations	$	(124,924	)	$	—
Amortization of premiums on real estate securities		139,821			—
Unrealized gain (loss) on real estate securities		(21,301	)		—
Modified funds from operations	$	(6,404	)	$	—

Liquidity and Capital Resources

Liquidity is a measurement of our ability to meet potential cash requirements, including ongoing commitments to pay distributions to our stockholders, fund investments, originate loans, repay borrowings, and other general business needs including the payment of our operating and administrative expenses. Our primary sources of funds for liquidity consist of the net proceeds from the Offering, net cash provided by operating activities, proceeds from repurchase agreements and other financing arrangements and future issuances of equity and/or debt securities.

We currently believe that we have sufficient liquidity and capital resources available for all anticipated uses, including the acquisition of additional investments, required debt service and the payment of distributions to stockholders.

Cash Flow Analysis

	Nine-Months Ended September 30,
	2017		2016
Net cash provided by operating activities	$	171,187	$	—
Net cash used in investing activities	$	28,703,500	$	—
Net cash provided by financing activities	$	30,632,730	$	—

We held cash and cash equivalents of $2,612,271 and $511,854 as of September 30, 2017 and December 31, 2016, respectively. Our cash and cash equivalents increased due to normal fluctuations and were primarily related to the net proceeds from the Offering and from the net proceeds from our repurchase agreements that were not used to purchase investments.

20

Our operating activities generated net cash of $171,187 and $0 for thenine-month period ended September 30, 2017 and 2016, respectively.  We began operations in October2016 and as such had no cash flows from operating activities for the nine-month period ended September 30, 2016.

Our investing activities used $28,703,500 and $0 for the nine-month periods ended September 30, 2017 and 2016, respectively, for the purchase of real estate securities and origination of commercial mortgage loans.

Our financing activities provided net cash of $30,632,730 and $0 for the nine-month periods ended September 30, 2017 and 2016, respectively. The contributions came from $8,936,000 in net proceeds from our repurchase agreement financing and $22,349,280 in net proceeds from the issuance of our common stock.

Repurchase Agreements – Real Estate Securities

We enter into MRAs that allow us to sell real estate securities while providing a fixed repurchase price for the same real estate securities in the future. The repurchase agreements on each security under an MRA generally mature in 30 to 90 days, and terms are adjusted for current market rates as necessary. Repurchase agreements are being accounted for as secured borrowings since we maintain effective control of the financed assets. Under the MRAs, the respective lender retains the right to mark the underlying collateral to fair value. A reduction in the value of pledged assets would require us to provide additional collateral or fund margin calls. We intend to maintain a level of liquidity that will enable us to meet margin calls. In addition, the MRAs are subject to certain financial covenants. We were in compliance with these covenants as of September 30, 2017. We had not entered into any MRAs as of December 31, 2016 and, as such, had no financial covenant requirements.

As of September 30, 2017, we had entered into one MRA and had two outstanding repurchase agreements, as described in the following table:

							Weighted Average
Counterparty	Amount Outstanding		Accrued Interest Payable		Collateral Pledged		Interest Rate			Days to Maturity
Counterparty 1	$	8,936,000	$	846	$	11,400,000		2.29113	%		27

Distributions Declared

The table below sets forth the distributions declared for Class P Shares during the nine-month period ended September 30, 2017.

	Distributions Declared Per Share
Date Declared	Distribution Period	Daily Distribution Amount		Date of Payment
February 22, 2017	March 1, 2017 through March 31, 2017	$	0.005260274	April 3, 2017
February 22, 2017	April 1, 2017 through April 30, 2017	$	0.005260274	May 1, 2017
February 22, 2017	May 1, 2017 through May 31, 2017	$	0.005260274	June 1, 2017
May 31, 2017	June 1, 2017 through June 30, 2017	$	0.005260274	July 5, 2017
May 31, 2017	July 1, 2017 through July 31, 2017	$	0.005260274	August 1, 2017
May 31, 2017	August 1, 2017 through August 31, 2017	$	0.005260274	September 1, 2017
August 9, 2017	September 1, 2017 through September 30, 2017	$	0.005260274	October 2, 2017
August 9, 2017	October 1, 2017 through October 31, 2017	$	0.005260274	November 1, 2017
August 9, 2017	November 1, 2017 through November 30, 2017	$	0.005260274	On or before December 7, 2017

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Distributions Paid

The table below sets forth the distributions paid in cash with respect to our Class P Shares during the nine-month period ended September 30, 2017.

Distribution Period	Payment Date	Distribution Amount
December 2016	January 3, 2017	$	33,230
January 2017	February 1, 2017		40,572
February 2017	March 1, 2017		40,661
March 2017	April 3, 2017		52,273
April 2017	May 1, 2017		59,276
May 2017	June 1, 2017		71,450
June 2017	July 5, 2017		82,179
July 2017	August 1, 2017		120,455
August 2017	September 1, 2017		152,454
Total		$	652,550

Contractual Obligations and Commitments

We had no contractual obligations as of December 31, 2016. Our contractual obligations, excluding expected interest payments, as of September 30, 2017 are summarized as follows:

	Less than 1 Year		1 to 3 Years		3 to 5 Years		More than 5 Years		Total
Borrowings under repurchase agreements	$	8,936,000		—		—		—	$	8,936,000
Total	$	8,936,000		—		—		—	$	8,936,000

Critical Accounting Policies

Disclosures discussing all critical accounting policies are set forth in our Registration Statement on Form 10, as filed with the Securities and Exchange Commission on May 2, 2017, as amended, under the heading “Summary of Critical Accounting Policies.” There have been no changes to our critical accounting policies during the three months and nine months ended September 30, 2017.

Off-Balance Sheet Arrangements

We currently have no off-balance sheet arrangements that are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Subsequent Events

For information related to subsequent events, reference is made to Note 11 – “Subsequent Events” which is included in our September 30, 2017 notes to consolidated financial statements included in this Quarterly Report on Form 10-Q.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Credit Risk

Our investments are subject to a high degree of credit risk. Credit risk is the exposure to loss from loan defaults. Default rates are subject to a wide variety of factors, including, but not limited to, borrower financial condition, property performance, property management, supply/demand factors, construction trends, consumer behavior, regional economics, interest rates, the strength of the U.S. economy, and other factors beyond our control. All loans are subject to a certain probability of default. We manage credit risk through the underwriting process, acquiring our investments at the appropriate discount to face value, if any, and establishing loss assumptions. We also carefully monitor the performance of the loans, as well as external factors that may affect their value.

Interest Rate Risk

Our market risk arises primarily from interest rate risk relating to interest rate fluctuations. Many factors including governmental monetary and tax policies, domestic and international economic and political considerations and other factors that are beyond our

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control contribute to interest rate risk. To meet our short and long-term liquidity requirements, we may borrow funds at fixed and variable rates. Our interest rate risk management objectives are to limit the impact of interest rate changes in earnings and cash flows and to lower our overall borrowing costs. To achieve these objectives, from time to time, we may enter into interest rate hedge contracts such as swaps, collars and treasury lock agreements in order to mitigate our interest rate risk with respect to various debt instruments. While hedging activities may insulate us against adverse changes in interest rates, they may also limit our ability to participate in benefits of lower interest rates with respect to our portfolio of investments with fixed interest rates. During thenine-month periods ended September 30, 2017 and 2016, we did not engage in interest rate hedging activities. We do not hold or issue derivative contracts for trading or speculative purposes. We do not have any foreign denominated investments, and thus, we are not exposed to foreign currency fluctuations.

As of September 30, 2017, and December 31, 2016, our investment portfolio included three and one variable rate investments, respectively, based on LIBOR for various terms. Borrowings under our MRA were short-term and at a variable rate. The following table quantifies the potential changes in interest income net of interest expense should interest rates increase by 50 or 100 basis points or decrease by 25 basis points, assuming that our current balance sheet was to remain constant and no actions were taken to alter our existing interest rate sensitivity:

	Estimated Percentage Change in Interest Income Net of Interest Expense
Change in Rates	September 30, 2017			December 31, 2016
(-) 25 Basis Points		(3.17	)%		(4.67	)%
Base Interest Rate		0.00	%		0.00	%
(+) 50 Basis Points		6.33	%		9.35	%
(+) 100 Basis Points		12.67	%		18.69	%

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Item 4.  Controls and Procedures

Controls and Procedures

Our management has evaluated, with the participation of our principal executive and principal financial officers, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, the principal executive and principal financial officers have concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Control over Financial Reporting

There were no changes to our internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) or Rule 15d-15(f)) during the three months ended September 30, 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II - Other Information

Item 1.  Legal Proceedings

In the ordinary course of business, we may become subject to litigation, claims and regulatory matters. We have no knowledge of material legal or regulatory proceedings pending or known to be contemplated against us at this time.

Item 1A.  Risk Factors

Not applicable as we are a smaller reporting company.

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

Recent Sales of Unregistered Equity Securities

On October 25, 2016, we commenced the Offering of up to $500,000,000 in our Class P Shares. The Class P Shares are being offered and sold pursuant to an exemption from the registration requirements of the Securities Act, in accordance with Rule 506(b) of Regulation D, and in compliance with any applicable state securities laws. During the three-month period ended September 30, 2017, we received and accepted investors’ subscriptions for and issued 515,219 Class P Shares in the Offering resulting in gross offering proceeds of $13,877,109. During the period from September 30, 2017 to November 8, 2017, we received and accepted investors’ subscriptions for and issued 198,098 Class P Shares in the Offering resulting in gross offering proceeds of $5,359,127. As of November 8, 2017, we have issued 1,328,175 Class P Shares resulting in gross offering proceeds of $35,358,996 and had $464,641,004 of Class P Shares remaining to be sold in the Offering.

Except as set forth above, we have not sold any securities which were not registered under the Securities Act during the period covered by this report.

Repurchases of Common Stock

As of the date of this Quarterly Report on Form 10-Q, we have not repurchased any shares of our common stock.

Item 3.  Defaults Upon Senior Securities

None.

Item 4.  Mine Safety Disclosures

Not Applicable.

Item 5.  Other Information

Not Applicable.

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Item 6.  Exhibits

The representations, warranties and covenants made by us in any agreement filed as an exhibit to this Form 10-Q are made solely for the benefit of the parties to the agreement, including, in some cases, for the purpose of allocating risk among the parties to the agreement, and should not be deemed to be representations, warranties or covenants to, or with, you. Moreover, these representations, warranties and covenants should not be relied upon as accurately describing or reflecting the current state of our affairs.

The exhibits filed in response to Item 601 of Regulation S-K are listed on the Exhibit Index attached hereto and are incorporated herein by reference.

Exhibit No.	Description
3.1	Articles of Amendment and Restatement of InPoint Commercial Real Estate Income, Inc. (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form 10 (File No. 000-55782) filed on May 2, 2017 (the “Form 10”))
3.2	Bylaws of InPoint Commercial Real Estate Income, Inc. (incorporated by reference to Exhibit 3.2 to the Form 10)
31.1*	Certification of the Principal Executive Officer of the Company, pursuant to Securities Exchange Act Rule 13a-14 and 15d-14 as adopted pursuant to Section 302 of the Sarbanes‑Oxley Act of 2002
31.2*	Certification of the Principal Financial Officer of the Company, pursuant to Securities Exchange Act Rule 13a-14 and 15d-14 as adopted pursuant to Section 302 of the Sarbanes‑Oxley Act of 2002
32.1*	Certification of the Principal Executive Officer of the Company pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002
32.2*	Certification of the Principal Financial Officer of the Company pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002
101	The following financial information from our Quarterly Report on Form 10-Q for the period ended September 30, 2017, filed with the Securities and Exchange Commission on November 9, 2017 is formatted in Extensible Business Reporting Language (“XBRL”): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Operations; (iii) Consolidated Statement of Changes in Stockholders’ Equity; (iv) Consolidated Statements of Cash Flows; and (v) Notes to Consolidated Financial Statements (tagged as blocks of text)

*Filed as part of this Quarterly Report on Form 10-Q

25

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

INPOINT COMMERCIAL REAL ESTATE INCOME, INC.
By:	/s/ Mitchell A. Sabshon
Name:	Mitchell A. Sabshon
Title:	Chief Executive Officer and Chairman
	(principal executive officer)
Date:	November 9, 2017
By:	/s/ Catherine L. Lynch
Name:	Catherine L. Lynch
Title:	Chief Financial Officer
	(principal financial officer)
Date:	November 9, 2017

26

EX-31.1

EXHIBIT 31.1

Certification of Principal Executive Officer

I, Mitchell A. Sabshon, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of InPoint Commercial Real Estate Income, 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.

By:	/s/ Mitchell A. Sabshon
Name:	Mitchell A. Sabshon
Title:	Chief Executive Officer and Chairman
Date:	November 9, 2017

EX-31.2

EXHIBIT 31.2

Certification of Principal Financial Officer

I, Catherine L. Lynch, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of InPoint Commercial Real Estate Income, 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.

By:	/s/ Catherine L. Lynch
Name:	Catherine L. Lynch
Title:	Chief Financial Officer
Date:	November 9, 2017

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

In connection with the Quarterly Report on Form 10-Q of InPoint Commercial Real Estate Income, Inc. (the “Company”) for the quarterly period ended September 30, 2017, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Mitchell A. Sabshon, Chief Executive Officer of the Company, certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

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.

By:	/s/ Mitchell A. Sabshon
Name:	Mitchell A. Sabshon
Title:	Chief Executive Officer and Chairman
Date:	November 9, 2017

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.  A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

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

In connection with the Quarterly Report on Form 10-Q of InPoint Commercial Real Estate Income, Inc. (the “Company”) for the quarterly period ended September 30, 2017, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Catherine L. Lynch, Chief Financial Officer of the Company, certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of her knowledge:

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.

By:	/s/ Catherine L. Lynch
Name:	Catherine L. Lynch
Title:	Chief Financial Officer
Date:	November 9, 2017

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.  A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2017	Nov. 08, 2017
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q3
Trading Symbol	ck0001690012
Entity Registrant Name	InPoint Commercial Real Estate Income, Inc.
Entity Central Index Key	0001690012
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		1,328,175

XML

CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
ASSETS
Cash and cash equivalents	$ 2,612,271	$ 511,854
Real estate securities at fair value	26,518,460	5,433,480
Commercial mortgage loans at cost, net of allowance for loan loss of $0	7,500,000	0
Deferred offering costs	1,510,598	967,448
Accrued interest receivable	39,872	13,652
Prepaid expenses	10,214
Other assets	569
Total assets	38,191,984	6,926,434
Liabilities:
Repurchase agreements—real estate securities	8,936,000
Due to related parties	1,510,780	995,716
Loan fees payable	50,000
Interest payable	846
Distributions payable	170,017	33,230
Accrued expenses	162,324	19,167
Income taxes payable	48,677
Total liabilities	10,878,644	1,048,113
Stockholders’ Equity:
Class P common stock, $0.001 par value, 450,000,000 shares authorized, 1,130,077 and 237,700 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively	1,130	238
Additional paid in capital (net of offering costs of $1,708,089 and $0 at September 30, 2017 and December 31, 2016, respectively)	28,290,650	5,942,262
Distributions in excess of earnings	(978,440)	(64,179)
Total stockholders’ equity	27,313,340	5,878,321
Total liabilities and stockholders’ equity	$ 38,191,984	$ 6,926,434

XML

CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Statement Of Financial Position [Abstract]
Allowance for loan loss	$ 0	$ 0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	450,000,000	450,000,000
Common stock, shares, issued	1,130,077	237,700
Common stock, shares, outstanding	1,130,077	237,700
Additional paid in capital, offering costs	$ 1,708,089	$ 0

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CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2017
Interest income:
Interest income	$ 303,636	$ 553,680
Less: Interest expense	(49,302)	(101,039)
Net interest income	254,334	452,641
Operating expenses:
Administration expense	28,750	86,250
Directors compensation	20,100	60,700
Professional service fees	98,215	328,549
Other expenses	37,880	67,690
Total operating expenses	184,945	543,189
Other income (loss):
Unrealized gain (loss) in value of real estate securities	(49,612)	21,301
Total other income (loss)	(49,612)	21,301
Net income (loss) before income taxes	19,777	(69,247)
Income tax provision	55,677	55,677
Net loss	$ (35,900)	$ (124,924)
Net loss per share basic and diluted	$ (0.04)	$ (0.23)
Weighted average number of shares outstanding, basic and diluted	910,390	546,430

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CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (unaudited) - 9 months ended Sep. 30, 2017 - USD ($)	Total	Common Stock	Additional Paid in Capital	Distributions in Excess of Earnings
Balance at Dec. 31, 2016	$ 5,878,321	$ 238	$ 5,942,262	$ (64,179)
Balance, shares at Dec. 31, 2016		237,700
Proceeds from offering	24,057,369	$ 892	24,056,477
Proceeds from offering, shares		892,377
Offering costs	(1,708,089)		(1,708,089)
Net loss	(124,924)			(124,924)
Distributions declared	(789,337)			(789,337)
Balance at Sep. 30, 2017	$ 27,313,340	$ 1,130	$ 28,290,650	$ (978,440)
Balance, shares at Sep. 30, 2017		1,130,077

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CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2017
Cash flows from operating activities
Net loss	$ (124,924)
Adjustments to reconcile net loss to cash provided by operations:
Net unrealized gain on real estate securities	(21,301)
Amortization of bond premium	139,821
Changes in assets and liabilities:
Accrued interest receivable	(26,220)
Prepaid expenses	(10,214)
Interest payable	846
Loan fees payable	50,000
Accrued expenses	143,157
Income taxes payable	48,677
Due to related parties	(28,086)
Other assets	(569)
Net cash provided by operating activities	171,187
Cash flows from investing activities:
Origination of commercial loans	(7,500,000)
Purchase of real estate securities	(26,203,500)
Real estate securities redeemed	5,000,000
Net cash used in investing activities	(28,703,500)
Cash flows from financing activities:
Proceeds from issuance of common stock	24,057,369
Payment of offering costs	(1,708,089)
Proceeds from repurchase agreements	54,228,000
Principal repayments of repurchase agreements	(45,292,000)
Distributions paid	(652,550)
Net cash provided by financing activities	30,632,730
Net change in cash and cash equivalents	2,100,417
Cash and cash equivalents beginning of period	511,854
Cash and cash equivalents end of period	2,612,271
Supplemental disclosure of cash flow information:
Change in deferred offering costs and accrued offering expenses, included in due to related parties	543,150
Cash paid for interest	100,193
Distributions payable	$ 170,017

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Organization and Business Operations

9 Months Ended

Sep. 30, 2017

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Organization and Business Operations

Note 1 – Organization and Business Operations

InPoint Commercial Real Estate Income, Inc. (the “Company”) was incorporated in Maryland on September 13, 2016 to originate, acquire and manage a diversified portfolio of commercial real estate (“CRE”) investments primarily comprised of (i) CRE debt, including first mortgage loans, subordinate mortgage and mezzanine loans, and participations in such loans and (ii) CRE securities, such as commercial mortgage-backed securities (“CMBS”), senior unsecured debt of publicly traded real estate investment trusts (“REITs”), and collateralized debt obligation notes. The Company may also invest in select equity investments in single-tenant, net leased properties. Substantially all of the Company’s business is conducted through InPoint REIT Operating Partnership, LP (the “OP”), a Delaware limited partnership. The Company is the sole general partner and directly or indirectly holds all of the limited partner interests in the OP.

The Company is externally managed by Inland InPoint Advisor, LLC (the “Advisor”), a Delaware limited liability company formed in August 2016 that is a wholly-owned indirect subsidiary of Inland Real Estate Investment Corporation, a member of The Inland Real Estate Group of Companies, Inc. The Advisor is responsible for coordinating the management of the day-to-day operations and originating, acquiring and managing the Company’s CRE investment portfolio, subject to the supervision of the Company’s board of directors. The Advisor performs its duties and responsibilities as the Company’s fiduciary pursuant to an advisory agreement dated October 25, 2016 between the Company and the Advisor (the “Advisory Agreement”).

The Advisor has delegated certain of its duties to SPCRE InPoint Advisors, LLC (the “Sub-Advisor”), a Delaware limited liability company formed in September 2016 that is a wholly-owned subsidiary of Sound Point CRE Management, LP, pursuant to a sub-advisory agreement between the Advisor and the Sub-Advisor. Among other duties, the Sub-Advisor has the authority to identify, negotiate, acquire and originate the Company’s investments and provide portfolio management, disposition, property management and leasing services to the Company. Notwithstanding such delegation to the Sub-Advisor or affiliates of the Sub-Advisor or Advisor, the Advisor retains ultimate responsibility for the performance of all the matters entrusted to it under the Advisory Agreement, including those duties which the Advisor has not delegated to the Sub-Advisor such as (i) valuation of the Company’s assets and calculation of the Company’s net asset value; (ii) management of the Company’s day-to-day operations, including the hiring and supervising of its employees, if any; (iii) preparation of stockholder reports and communications and arrangement of the Company’s annual stockholder meeting; and (iv) advising the Company regarding its initial qualification as a REIT for U.S. federal income tax purposes and monitoring its ongoing compliance with the REIT qualification requirements thereafter.

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2017

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 2 – Summary of Significant Accounting Policies

Basis of Accounting

The accompanying consolidated financial statements and related footnotes have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) and require management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of income and expenses during the reported periods. Actual results could differ from such estimates.

Principles of Consolidation

The Company consolidates all entities that the Company controls through either majority ownership or voting rights. The accompanying consolidated financial statements include the accounts of the Company and the OP. All intercompany accounts and transactions have been eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a variable interest entity (“VIE”) for which the Company is the primary beneficiary. The Company has determined the OP is a VIE of which the Company is the primary beneficiary. Substantially all of the Company’s assets and liabilities are held by the OP.

Cash and Cash Equivalents

Cash and cash equivalents include funds on deposit with financial institutions, including demand deposits with financial institutions with original maturities of three months or less. The account balance may exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance coverage limits and, as a result, there could be a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage limits. The Company believes that the risk will not be significant, as the Company does not anticipate the financial institutions’ non-performance.

Real Estate Securities at Fair Value

The Company’s real estate securities are comprised of CMBS and are accounted for in accordance with ASC Topic 320, Investments — Debt and Equity Securities (“ASC 320”). The Company has chosen to make a fair value option election pursuant to ASC Topic 825, Financial Instruments (“ASC 825”) for its securities and, therefore, its real estate securities are recorded at fair market value on the consolidated balance sheets. The periodic changes in fair market value are recorded in current period earnings on the consolidated statements of operations as a component of net unrealized gain (loss) in value of real estate securities. These investments generally meet the requirements to be classified as available-for-sale under ASC 320, which requires the securities to be carried at fair value on the balance sheet with changes in fair value recorded to other comprehensive income on the Company’s consolidated statement of changes in stockholders’ equity. Electing the fair value option permits the Company to record changes in fair value of its investments in the consolidated statements of operations which, in management’s view, more appropriately reflects the results of operations for a particular reporting period.

The Company records its transactions in securities on a trade date basis and recognizes realized gains and losses on securities transactions on an identified cost basis.

Commercial Mortgage Loans Held for Investment and Allowance for Loan Losses

Commercial mortgage loans are held for investment purposes and are anticipated to be held until maturity. Accordingly, they are carried at cost, net of unamortized loan fees and origination costs, and premiums or discounts. Commercial mortgage loans that are deemed to be impaired will be carried at amortized cost less a specific allowance for loan losses. Interest income is recorded on the accrual basis and related discounts, premiums and net deferred fees or costs on investments are amortized over the life of the investment using the effective interest method. Amortization is reflected as an adjustment to interest income in the Company’s consolidated statements of operations. Upon measurement of impairment, the Company records an allowance for loan losses to reduce the carrying value of the loan with a corresponding charge through the provision for loan losses on the Company’s consolidated statements of operations.

The allowance for loan losses reflects management's estimate of loan losses inherent in the loan portfolio as of the balance sheet date. The Company uses a uniform process for determining its allowance for loan losses. The allowance for loan losses includes an asset-specific component and may include a general, formula-based component when the portfolio is determined to be of sufficient size to warrant such a reserve.

The asset-specific reserve component relates to reserves for losses on individual impaired loans. The Company considers a loan to be impaired when, based upon current information and events, it believes that it is probable that the Company will be unable to collect all amounts due under the contractual terms of the loan agreement. This assessment is made on an individual loan basis each quarter based on such factors as payment status, lien position, borrower financial resources and investment in collateral, collateral type, project economics and geographic location, as well as national and regional economic factors. A reserve is established for an impaired loan when the present value of payments expected to be received, observable market prices or the estimated fair value of the collateral (for loans that are dependent on the collateral for repayment) is lower than the carrying value of that loan.

For collateral dependent impaired loans, impairment is measured using the estimated fair value of collateral less the estimated cost to sell. Valuations are performed or obtained at the time a loan is determined to be impaired and designated non-performing, and they are updated if circumstances indicate that a significant change in value has occurred. The Advisor generally will use the income approach through internally developed valuation models to estimate the fair value of the collateral for such loans. In more limited cases, the Advisor will obtain external "as is" appraisals for loan collateral, generally when third party participations exist.

General reserves are recorded when (i) available information as of each balance sheet date indicates that it is probable a loss has occurred in the portfolio and (ii) the amount of the loss can be reasonably estimated. The Company’s policy is to estimate loss rates based on actual losses experienced, if any, or based on historical realized losses experienced in the industry if the Company has not experienced any losses. Current collateral and economic conditions affecting the probability and severity of losses are taken into account when establishing the allowance for loan losses.

The Company performs a comprehensive analysis of its loan portfolio and assigns risk ratings to loans that incorporate management's current judgments about their credit quality based on all known and relevant internal and external factors that may affect collectability. The Company considers, among other things, payment status, lien position, borrower financial resources and investment in collateral, collateral type, project economics and geographic location, as well as national and regional economic factors. This methodology results in loans being segmented by risk classification into risk rating categories that are associated with estimated probabilities of default and principal loss. Ratings range from "1" to "5" with "1" representing the lowest risk of loss and "5" representing the highest risk of loss.

Loans are generally placed on non-accrual status when principal or interest payments are past due 90 days or more or when there is reasonable doubt that principal or interest will be collected in full. Accrued and unpaid interest is generally reversed against interest income in the period the loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management's judgment regarding the borrower's ability to make pending principal and interest payments. Non-accrual loans are restored to accrual status when past due principal and interest is paid and, in management's judgment, are likely to remain current. The Company may make exceptions to placing a loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection.

As of September 30, 2017 and December 31, 2016, the Company had $7,500,000 and $0 of commercial mortgage loans held for investment, respectively. The Company has not recorded any allowance for loan losses as the Company did not consider a loan loss to be probable.

Interest Income

Interest income on CMBS, which includes accretion of discounts and amortization of premiums on such CMBS, is recognized over the life of the investment using the effective interest method. Management estimates, at the time of purchase, the future expected cash flows and determines the effective interest rate based on these estimated cash flows and the Company’s purchase price. As needed, these estimated cash flows are updated and a revised yield is computed based on the current amortized cost of the investment. In estimating these cash flows, there are a number of assumptions that are subject to uncertainties and contingencies, including the rate and timing of principal payments (prepayments, repurchases, defaults and liquidations), the pass through or coupon rate and interest rate fluctuations. In addition, management must use its judgment to estimate interest payment shortfalls due to delinquencies on the underlying mortgage loans. These uncertainties and contingencies are difficult to predict and are subject to future events that may impact management’s estimates and the Company’s interest income.

Fair Value Measurements

The Company estimates fair value using available market information and valuation methodologies it believes to be appropriate for these purposes. The Company defines fair value based on the price that would be received upon sale of an asset or the exit price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 825 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value. The fair value hierarchy consists of three broad levels, which are described below:

• Level I - Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

• Level II - Inputs (other than quoted prices included in Level I) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

• Level III - Unobservable inputs which reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

The determination of where an asset or liability falls in the above hierarchy requires judgment and factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company evaluates its hierarchy disclosures each quarter and depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter.

Real estate securities are valued utilizing both observable and unobservable market inputs. These factors include projected future cash flows, ratings, subordination levels, vintage, remaining lives, credit issues, recent trades of similar real estate securities and the spreads used in the prior valuation. The Company obtains current market spread information where available and uses this information in evaluating and validating the market price of all real estate securities. Depending upon the significance of the fair value inputs used in determining these fair values, these real estate securities are classified in either Level II or Level III of the fair value hierarchy. As of September 30, 2017 and December 31, 2016, the Company received third-party quotes on each real estate security used in determining the fair value, all of which have been classified as Level II due to the observable nature of all significant inputs.

Organization and Offering Expenses

On October 25, 2016, the Company commenced an ongoing private offering (the “Offering”) of up to $500,000,000 in Class P Shares of common stock (the “Class P Shares”), pursuant to a private placement memorandum dated October 25, 2016. The purchase price per Class P Share is equal to $25.00 (the “Transaction Price”) plus applicable selling commissions, dealer manager fees and organization and offering expenses, resulting in a total purchase price of $27.38 per Class P Share if maximum selling commissions, dealer manager fees and organization and offering expenses are paid. Inland Securities Corporation (the “Dealer Manager”), an affiliate of the Advisor, is the dealer manager for the Offering.

Organization and offering expenses include all expenses incurred in connection with the Offering. Organization and offering expenses (other than selling commissions and the dealer manager fee) of the Company may be paid by the Advisor, Sub-Advisor, the Dealer Manager, or their respective affiliates on behalf of the Company and subsequently reimbursed by the Company. Offering expenses are deferred and a payable to the Advisor or Sub-Advisor until shares are sold in the Offering, at which point the expense reimbursement is paid from additional paid-in capital. These expenses include but are not limited to: (i) reimbursing the Dealer Manager and participating broker-dealers for bona fide out-of-pocket, itemized and detailed due diligence expenses incurred by these entities, (ii) expenses for printing and mailing, charges of transfer agents, registrars, trustees, escrow holders, depositaries and experts, and (iii) expenses of qualifying the sale of the shares under federal and state laws, including taxes and fees and accountants’ and attorneys’ fees and expenses.

The Company is obligated to reimburse the Advisor, the Sub-Advisor and their respective affiliates, as applicable, for organization and offering expenses paid by them on behalf of the Company to the extent organization and offering expenses (excluding selling commissions and the dealer manager fee) incurred by the Company in the Offering do not exceed the organization and offering expenses paid by investors in connection with the sale of Class P Shares in the Offering. As a result, these expenses are only a liability of the Company to the extent aggregate organization and offering expenses do not exceed the organization and offering expenses paid by investors in connection with the sale of Class P Shares in the Offering, determined at the end of the Offering.

Repurchase Agreements – Real Estate Securities

The Company enters into Master Repurchase Agreements (each, an “MRA”) that allow the Company to sell real estate securities while providing a fixed repurchase price for the same real estate securities in the future. The repurchase contracts on each security under an MRA generally mature in 30 to 90 days and terms are adjusted for current market rates as necessary. Repurchase agreements are being accounted for as secured borrowings since the Company maintains effective control of the financed assets. Under the MRAs, the respective lender retains the right to mark the underlying collateral to fair value. A reduction in the value of pledged assets would require the Company to provide additional collateral or fund margin calls. The Company intends to maintain a level of liquidity that will enable the Company to meet margin calls. In addition, the MRAs are generally subject to certain financial covenants. The Company was in compliance with all financial covenant requirements as of September 30, 2017.

Income Taxes

The Company intends to qualify as a REIT under the Internal Revenue Code of 1986, as amended, for federal income tax purposes commencing with the tax year ending December 31, 2017. If the Company qualifies for taxation as a REIT, the Company generally will not be subject to federal income tax to the extent it distributes its REIT taxable income, subject to certain adjustments, to its stockholders. Subsequently, if the Company fails to qualify as a REIT in any taxable year, the Company will be subject to federal income tax on its taxable income at regular corporate tax rates. Even if the Company qualifies for taxation as a REIT, the Company may be subject to certain state and local taxes on its income, property or net worth and federal income and excise taxes on its undistributed income.

The Company had no uncertain tax positions as of September 30, 2017 and December 31, 2016. The Company expects no significant increases or decreases in uncertain tax positions due to changes in tax positions within one year of September 30, 2017 or December 31, 2016. The Company had no interest or penalties relating to income taxes recognized in the consolidated statements of operations for the three and nine-months ended September 30, 2017 or 2016. As of September 30, 2017, returns for the calendar year 2016 remain subject to examination by U.S. and various state and local tax jurisdictions.

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences and are attributable to (1) differences between the financial statement carrying amounts and their respective tax bases, and (2) net operating losses. A valuation allowance is established for uncertainties relating to realization of deferred tax assets. As of December 31, 2016, the Company had a deferred tax asset of $10,832, related to organization and start-up costs, which are capitalized for income tax purposes, and a current net operating loss, and an unrealized loss in value of real estate securities. A valuation allowance in the amount of $10,832 was recorded due to current uncertainty of realization.

As of September 30, 2017, the Company has reversed deferred tax assets and the valuation allowance related to its activities. As a REIT, the Company is not expected to pay federal income tax at the REIT level, but instead a dividends paid deduction will generally offset its taxable income. As a result, while the Company will still be permitted to use net operating losses to offset its REIT taxable income, the Company generally does not expect to pay taxes on its REIT taxable income, and therefore does not expect to be able to realize such deferred tax assets.

For the three and nine months ended September 30, 2017, the Company has incurred $55,677 in current income tax expense in a consolidated taxable REIT subsidiary.  This tax is comprised of $42,841 in federal and $12,836 in state income tax expense.  The majority of this expense was related to the receipt of a one-time prepayment penalty interest received on the early pay-off of one investment.

Distributions Payable

Distributions payable represent distributions declared as of the balance sheet date which are payable to stockholders.

Per Share Data

The Company calculates basic and diluted earnings per share by dividing net income attributable to the Company for the period by the weighted-average number of shares of common stock outstanding for that period.

Accounting Pronouncements Recently Issued but Not Yet Effective

In June 2016, the Financial Accounting Standards Board issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”), which changes how entities measure credit losses for financial assets carried at amortized cost. ASU 2016-13 eliminates the requirement that a credit loss must be probable before it can be recognized and instead requires an entity to recognize the current estimate of all expected credit losses. ASU 2016-13 is effective for SEC filers for reporting periods beginning after December 15, 2019. The amendments may be adopted early for reporting periods beginning after December 15, 2018. The Company is currently evaluating the impact ASU 2016-13 will have on its allowance for loan losses estimate.

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Real Estate Securities

9 Months Ended

Sep. 30, 2017

Investments Debt And Equity Securities [Abstract]

Real Estate Securities

Note 3 – Real Estate Securities

The following is a summary of the Company’s real estate securities as of September 30, 2017:

	Collateral Type	Interest Rate	Maturity Date	Par Value		Fair Value
CMBS 1	Hospitality	LIBOR + 4.6500%	November/2018	$	5,400,000	$	5,439,960
CMBS 2	Retail	LIBOR + 3.4000%	July/2019		5,078,500		5,078,500
CMBS 3	Hospitality	LIBOR + 0.9200%	August/2019		16,000,000		16,000,000
Total				$	26,478,500	$	26,518,460

The Company classified its CMBS as available-for-sale as of September 30, 2017. These investments are reported at fair value in the consolidated balance sheets with changes in fair value recorded in other income or loss in the consolidated statements of operations. The following table shows the amortized cost, unrealized gains/losses and fair value of the Company’s CMBS investments as of September 30, 2017:

	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
CMBS 1	$	5,423,898	$	16,062	$	—	$	5,439,960
CMBS 2		5,078,500		—		—		5,078,500
CMBS 3		16,000,000		—		—		16,000,000
Total	$	26,502,398	$	16,062	$	—	$	26,518,460

The following is a summary of the Company’s real estate securities as of December 31, 2016:

	Collateral Type	Number of Investments		Interest Rate	Maturity Date	Par Value		Fair Value
CMBS 1	Hospitality		1	LIBOR + 4.6500%	November/2018	$	5,400,000	$	5,433,480

The Company classified its CMBS as available-for-sale as of December 31, 2016. These investments are reported at fair value in the consolidated balance sheets with changes in fair value recorded in other income or loss in the consolidated statements of operations. The following table shows the amortized cost, unrealized gains/losses and fair value of the Company’s CMBS investments as of December 31, 2016:

	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
CMBS 1	$	5,438,719	$	—	$	(5,239	)	$	5,433,480

As of September 30, 2017, the Company held three CMBS with a total carrying value of $26,518,460 with a total unrealized gain of $16,062. As of December 31, 2016, the Company held one CMBS with a carrying value of $5,433,480 with an unrealized loss of $5,239.  No position had an unrealized loss for a period greater than 12 months. The Company did not have any realized gains or losses during the nine-month periods ended September 30, 2017 and 2016.

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Commercial Mortgage Loans Held for Investment

9 Months Ended

Sep. 30, 2017

Mortgage Loans On Real Estate [Abstract]

Commercial Mortgage Loans Held for Investment

Note 4 – Commercial Mortgage Loans Held for Investment

The following is a summary of the Company’s commercial mortgage loans held for investment as of September 30, 2017:  

	Number of Loans		Principal Balance		Unamortized (fees)/costs, net		Carrying Value		Weighted Average Coupon			Weighted Average Years to Maturity
Mezzanine loan		1	$	7,500,000	$	—	$	7,500,000		9.20	%		10.0

As of December 31, 2016, the Company had no commercial mortgage loans held for investment.

Credit Characteristics

As part of the Company’s process for monitoring the credit quality of its loans, it performs a quarterly asset review of the loan portfolio and assigns risk ratings to each of its loans. Risk factors include payment status, lien position, borrower financial resources and investment in collateral, collateral type, project economics and geographic location, as well as national and regional economic factors. To determine the likelihood of loss, the loans are rated on a 5-point scale as follows:

Investment Grade	Investment Grade Definition
1	Investment exceeding fundamental performance expectations and/or capital gain expected. Trends and risk factors since time of investment are favorable.
2	Performing consistent with expectations and a full return of principal and interest expected. Trends and risk factors are neutral to favorable.
3	Performing loan requiring closer monitoring.  Trends and risk factors show some deterioration. Collection of principal and interest is still expected.
4	Underperforming investment with the potential of some interest loss but still expecting a positive return on investment. Trends and risk factors are negative.
5	Underperforming investment with expected loss of interest and some principal.

All commercial mortgage loans are assigned an initial risk rating of 2. The Company originated its first commercial mortgage loan held for investment during the period ended September 30, 2017 and assigned a risk rating of 2 to the loan as of September 30, 2017. The Company has not recorded any allowance for loan losses as the Company did not consider a loan loss to be probable.

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Repurchase Agreements-Real Estate Securities

9 Months Ended

Sep. 30, 2017

Banking And Thrift [Abstract]

Repurchase Agreements-Real Estate Securities

Note 5 – Repurchase Agreements—Real Estate Securities

As of September 30, 2017, the Company had entered into one MRA and had two outstanding repurchase agreements, as described in the table below.  The Company had not entered into any MRAs and did not have any outstanding repurchase agreements as of December 31, 2016.

							Weighted Average
Counterparty	Amount Outstanding		Accrued Interest Payable		Collateral Pledged		Interest Rate			Days to Maturity
Counterparty 1	$	8,936,000	$	846	$	11,400,000		2.29113	%		27

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Shareholders Equity

9 Months Ended

Sep. 30, 2017

Equity [Abstract]

Stockholders Equity

Note 6 – Stockholders Equity

During the nine-month period ended September 30, 2017, the Company issued 892,377 shares of Class P common stock at an average price of $26.96 per share with total net proceeds of $22,349,280 after selling costs of $1,708,089. In addition, the Company incurred $543,150 in reimbursable deferred offering costs that are payable to the Advisor and Sub-Advisor from future stock issuance.

Distributions Declared

The table below sets forth the distributions declared for Class P Shares during the nine-month period ended September 30, 2017.

	Distributions Declared Per Share
Date Declared	Distribution Period	Daily Distribution Amount		Date of Payment
February 22, 2017	March 1, 2017 through March 31, 2017	$	0.005260274	April 3, 2017
February 22, 2017	April 1, 2017 through April 30, 2017	$	0.005260274	May 1, 2017
February 22, 2017	May 1, 2017 through May 31, 2017	$	0.005260274	June 1, 2017
May 31, 2017	June 1, 2017 through June 30, 2017	$	0.005260274	July 5, 2017
May 31, 2017	July 1, 2017 through July 31, 2017	$	0.005260274	August 1, 2017
May 31, 2017	August 1, 2017 through August 31, 2017	$	0.005260274	September 1, 2017
August 9, 2017	September 1, 2017 through September 30, 2017	$	0.005260274	October 2, 2017
August 9, 2017	October 1, 2017 through October 31, 2017	$	0.005260274	November 1, 2017
August 9, 2017	November 1, 2017 through November 30, 2017	$	0.005260274	On or before December 7, 2017

Distributions Paid

The table below sets forth the distributions paid in cash with respect to the Class P Shares during the nine-month period ended September 30, 2017.

Distribution Period	Payment Date	Distribution Amount
December 2016	January 3, 2017	$	33,230
January 2017	February 1, 2017		40,572
February 2017	March 1, 2017		40,661
March 2017	April 3, 2017		52,273
April 2017	May 1, 2017		59,276
May 2017	June 1, 2017		71,450
June 2017	July 5, 2017		82,179
July 2017	August 1, 2017		120,455
August 2017	September 1, 2017		152,454
Total		$	652,550

During the nine-month period ended September 30, 2017, the Company declared distributions of $789,337 and paid cash distributions of $652,550. As of September 30, 2017, distributions declared but not yet paid amounted to $170,017. There were no distributions declared or paid during the nine-month period ended September 30, 2016, as the Company did not begin operations until October 2016.

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Net Loss Per Share

9 Months Ended

Sep. 30, 2017

Earnings Per Share [Abstract]

Net Loss Per Share

Note 7 – Net Loss Per Share

The following table is a summary of the basic and diluted net loss per share computation for the three and nine-month periods ended September 30, 2017 and 2016:

	Three-month period ended September 30,					Nine-month period ended September 30,
	2017			2016		2017			2016
Net loss	$	(35,900	)	$	—	$	(124,924	)	$	—
Weighted average shares outstanding, basic and diluted		910,390			—		546,430			—
Net loss per share, basic and diluted	$	(0.04	)	$	—	$	(0.23	)	$	—

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2017

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 8 – Commitments and Contingencies

Litigation and Regulatory Matters

In the ordinary course of business, the Company may become subject to litigation, claims and regulatory matters. The Company has no knowledge of material legal or regulatory proceedings pending or known to be contemplated against the Company at this time.

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Transactions with Related Parties

9 Months Ended

Sep. 30, 2017

Related Party Transactions [Abstract]

Transactions with Related Parties

Note 9 – Transactions with Related Parties

As of September 30, 2017, the Advisor had invested $1.0 million in the Company through the purchase of 40,040 shares of Class P common stock. The purchase price per Class P Share for the Advisor’s investment was the Transaction Price, with no payment of selling commissions, dealer manager fees or organization and offering expenses. The Advisor has agreed pursuant to its subscription agreement that, for so long as it or its affiliate is serving as the Advisor, (i) it will not sell or transfer at least 8,000 of the Class P Shares that it has purchased, accounting for $200,000 of its investment, to an unaffiliated third party; (ii) it will not be eligible to submit a request for these 40,040 Class P Shares pursuant to the Company’s share repurchase program prior to the fifth anniversary of the date on which such shares were purchased; and (iii) repurchase requests made for these shares will only be accepted (a) on the last business day of a calendar quarter, (b) after all repurchase requests from all other stockholders for such quarter have been accepted and (c) to the extent that such repurchases do not cause total repurchases in the quarter in which they are being repurchased to exceed that quarter’s repurchase cap.

As of September 30, 2017, Sound Point Capital Management, LP (“Sound Point”), an affiliate of the Sub-Advisor, had invested $3.0 million in the Company through the purchase of 120,000 shares of Class P common stock. The purchase price per Class P Share for this investment was the Transaction Price, with no payment of selling commissions, dealer manager fees or organization and offering expenses. Sound Point has agreed pursuant to its subscription agreement that, for so long as the Sub-Advisor or its affiliate is serving as the Sub-Advisor, (i) it will not be eligible to submit a request for the repurchase of these 120,000 shares pursuant to the Company’s share repurchase program prior to the fifth anniversary of the date on which such shares were purchased; and (ii) repurchase requests made for these shares will only be accepted (a) on the last business day of a calendar quarter, (b) after all repurchase requests from all other stockholders for such quarter have been accepted and (c) to the extent that such repurchases do not cause total repurchases in the quarter in which they are being repurchased to exceed that quarter’s repurchase cap.

The following table summarizes the Company’s related party transactions for the nine-month periods ended September 30, 2017 and 2016:

	Nine-month period ended September 30,				Payable as of September 30,
	2017		2016		2017		2016
Organization and offering expense reimbursement(1)	$	836,839	$	—	$	1,510,598	$	—
Selling commissions and dealer manager fee(2)		1,414,400		—	-			—
Advisory fee(3)	-			—	-			—
Operating expense reimbursement(4)		215,225		—		182		—
Total	$	2,466,464	$	—	$	1,510,780	$	—

(1) The Company reimburses the Advisor, the Sub-Advisor and their respective affiliates for costs and other expenses related to the Offering, provided that aggregate reimbursements of such costs and expenses shall not exceed the organization and offering expenses paid by investors in connection with the sale of Class P Shares in the Offering. Offering costs are offset against stockholders’ equity when paid. Unpaid amounts are recorded as deferred offering costs and included in due to related parties in these consolidated balance sheets.

(2) The Dealer Manager, an affiliate of the Advisor, receives selling commissions up to 5%, and a dealer manager fee up to 3%, of the Transaction Price for each Class P Share sold in the Offering, the majority of which is paid to third-party broker-dealers.

(3) The Company pays the Advisor an advisory fee comprised of (1) a fixed component and (2) a performance component. The fixed component of the advisory fee is paid quarterly in arrears in an amount equal to 1/4th of 1.5% of the average aggregate value of the Company’s assets over such quarter, where the value of each asset shall be the value determined in accordance with the Company’s valuation policies or, if such value has not yet been determined, the book value of the asset. If, in any given calendar quarter ending on or prior to December 31, 2017, the modified funds from operations (“MFFO”), which is a non-GAAP supplemental financial performance measure, is less than the aggregate distributions payable to stockholders for such quarter, then a portion of the fixed component of the advisory fee otherwise payable with respect to that quarter shall be deferred in an amount equal to the distributions payable for that quarter minus the MFFO for that quarter, provided that such deferred amount shall not exceed 25% of the fixed component of the advisory fee otherwise payable with respect to that quarter. Deferred portions of the fixed component of the advisory fee will be paid to the Advisor to the extent that MFFO exceeds distributions paid or payable to stockholders for a future calendar quarter, but only to the extent of such excess. The performance component of the advisory fee is calculated and paid annually with respect to the Class P Shares, such that for any year in which the Company’s total return per Class P Share exceeds 7% per annum, the Advisor will receive 20% of the excess total return allocable to the Class P Shares; provided that in no event will the performance component of the advisory fee exceed 15% of the aggregate total return allocable to Class P Shares for such year. The Advisor has waived the advisory fee for the nine-month period ended September 30, 2017.

(4) The Company reimburses the Advisor or its affiliates for out-of-pocket expenses that it incurs in connection with providing services to the Company, provided that the Company does not reimburse overhead costs, including rent and utilities or personnel costs (including salaries, bonuses, benefits and severance payments).

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Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2017

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Note 10 – Fair Value of Financial Instruments

The following table presents the Company’s financial instruments carried at fair value in the consolidated balance sheets by its level in the fair value hierarchy (see Note 2 – Summary of Significant Accounting Policies) as of September 30, 2017:

	Total		Level I		Level II		Level III
Real estate securities	$	26,518,460		—	$	26,518,460		—

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Subsequent Events

9 Months Ended

Sep. 30, 2017

Subsequent Events [Abstract]

Subsequent Events

Note 11 – Subsequent Events

The Company has evaluated subsequent events through November 9, 2017, the date the financial statements were issued, and determined that there have not been any events that have occurred that would require adjustments to disclosures in the consolidated financial statements except for the following transactions:

Sale of Common Stock

As of November 8, 2017, the Company had 1,328,175 shares of common stock outstanding and had raised proceeds from the Offering since September 30, 2017 and since inception as follows:

Source of Capital	October 1, 2017 through November 8, 2017		Total
Class P Shares	$	5,359,127	$	35,358,996

Distributions Declared

The table below sets forth the distributions declared for Class P Shares.

	Distributions Declared Per Share
Date Declared	Distribution Period	Daily Distribution Amount		Date of Payment
November 8, 2017	December 1, 2017 through December 31, 2017	$	0.005260274	On or before January 7, 2018
November 8, 2017	January 1, 2018 through January 31, 2018	$	0.005260274	On or before February 7, 2018
November 8, 2017	February 1, 2018 through February 28, 2018	$	0.005260274	On or before March 7, 2018
November 8, 2017	March 1, 2018 through March 31, 2018	$	0.005260274	On or before April 7, 2018

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2017

Accounting Policies [Abstract]

Basis of Accounting

Basis of Accounting

The accompanying consolidated financial statements and related footnotes have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) and require management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of income and expenses during the reported periods. Actual results could differ from such estimates.

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Principles of Consolidation

Principles of Consolidation

The Company consolidates all entities that the Company controls through either majority ownership or voting rights. The accompanying consolidated financial statements include the accounts of the Company and the OP. All intercompany accounts and transactions have been eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a variable interest entity (“VIE”) for which the Company is the primary beneficiary. The Company has determined the OP is a VIE of which the Company is the primary beneficiary. Substantially all of the Company’s assets and liabilities are held by the OP.

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash and cash equivalents include funds on deposit with financial institutions, including demand deposits with financial institutions with original maturities of three months or less. The account balance may exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance coverage limits and, as a result, there could be a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage limits. The Company believes that the risk will not be significant, as the Company does not anticipate the financial institutions’ non-performance.

Real Estate Securities at Fair Value

Real Estate Securities at Fair Value

The Company’s real estate securities are comprised of CMBS and are accounted for in accordance with ASC Topic 320, Investments — Debt and Equity Securities (“ASC 320”). The Company has chosen to make a fair value option election pursuant to ASC Topic 825, Financial Instruments (“ASC 825”) for its securities and, therefore, its real estate securities are recorded at fair market value on the consolidated balance sheets. The periodic changes in fair market value are recorded in current period earnings on the consolidated statements of operations as a component of net unrealized gain (loss) in value of real estate securities. These investments generally meet the requirements to be classified as available-for-sale under ASC 320, which requires the securities to be carried at fair value on the balance sheet with changes in fair value recorded to other comprehensive income on the Company’s consolidated statement of changes in stockholders’ equity. Electing the fair value option permits the Company to record changes in fair value of its investments in the consolidated statements of operations which, in management’s view, more appropriately reflects the results of operations for a particular reporting period.

The Company records its transactions in securities on a trade date basis and recognizes realized gains and losses on securities transactions on an identified cost basis.

Commercial Mortgage Loans Held for Investment and Allowance for Loan Losses

Commercial Mortgage Loans Held for Investment and Allowance for Loan Losses

Commercial mortgage loans are held for investment purposes and are anticipated to be held until maturity. Accordingly, they are carried at cost, net of unamortized loan fees and origination costs, and premiums or discounts. Commercial mortgage loans that are deemed to be impaired will be carried at amortized cost less a specific allowance for loan losses. Interest income is recorded on the accrual basis and related discounts, premiums and net deferred fees or costs on investments are amortized over the life of the investment using the effective interest method. Amortization is reflected as an adjustment to interest income in the Company’s consolidated statements of operations. Upon measurement of impairment, the Company records an allowance for loan losses to reduce the carrying value of the loan with a corresponding charge through the provision for loan losses on the Company’s consolidated statements of operations.

The allowance for loan losses reflects management's estimate of loan losses inherent in the loan portfolio as of the balance sheet date. The Company uses a uniform process for determining its allowance for loan losses. The allowance for loan losses includes an asset-specific component and may include a general, formula-based component when the portfolio is determined to be of sufficient size to warrant such a reserve.

The asset-specific reserve component relates to reserves for losses on individual impaired loans. The Company considers a loan to be impaired when, based upon current information and events, it believes that it is probable that the Company will be unable to collect all amounts due under the contractual terms of the loan agreement. This assessment is made on an individual loan basis each quarter based on such factors as payment status, lien position, borrower financial resources and investment in collateral, collateral type, project economics and geographic location, as well as national and regional economic factors. A reserve is established for an impaired loan when the present value of payments expected to be received, observable market prices or the estimated fair value of the collateral (for loans that are dependent on the collateral for repayment) is lower than the carrying value of that loan.

For collateral dependent impaired loans, impairment is measured using the estimated fair value of collateral less the estimated cost to sell. Valuations are performed or obtained at the time a loan is determined to be impaired and designated non-performing, and they are updated if circumstances indicate that a significant change in value has occurred. The Advisor generally will use the income approach through internally developed valuation models to estimate the fair value of the collateral for such loans. In more limited cases, the Advisor will obtain external "as is" appraisals for loan collateral, generally when third party participations exist.

General reserves are recorded when (i) available information as of each balance sheet date indicates that it is probable a loss has occurred in the portfolio and (ii) the amount of the loss can be reasonably estimated. The Company’s policy is to estimate loss rates based on actual losses experienced, if any, or based on historical realized losses experienced in the industry if the Company has not experienced any losses. Current collateral and economic conditions affecting the probability and severity of losses are taken into account when establishing the allowance for loan losses.

The Company performs a comprehensive analysis of its loan portfolio and assigns risk ratings to loans that incorporate management's current judgments about their credit quality based on all known and relevant internal and external factors that may affect collectability. The Company considers, among other things, payment status, lien position, borrower financial resources and investment in collateral, collateral type, project economics and geographic location, as well as national and regional economic factors. This methodology results in loans being segmented by risk classification into risk rating categories that are associated with estimated probabilities of default and principal loss. Ratings range from "1" to "5" with "1" representing the lowest risk of loss and "5" representing the highest risk of loss.

Loans are generally placed on non-accrual status when principal or interest payments are past due 90 days or more or when there is reasonable doubt that principal or interest will be collected in full. Accrued and unpaid interest is generally reversed against interest income in the period the loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management's judgment regarding the borrower's ability to make pending principal and interest payments. Non-accrual loans are restored to accrual status when past due principal and interest is paid and, in management's judgment, are likely to remain current. The Company may make exceptions to placing a loan on non-accrual status if the loan has sufficient collateral value and is in the process of collection.

As of September 30, 2017 and December 31, 2016, the Company had $7,500,000 and $0 of commercial mortgage loans held for investment, respectively. The Company has not recorded any allowance for loan losses as the Company did not consider a loan loss to be probable.

Interest Income

Interest Income

Interest income on CMBS, which includes accretion of discounts and amortization of premiums on such CMBS, is recognized over the life of the investment using the effective interest method. Management estimates, at the time of purchase, the future expected cash flows and determines the effective interest rate based on these estimated cash flows and the Company’s purchase price. As needed, these estimated cash flows are updated and a revised yield is computed based on the current amortized cost of the investment. In estimating these cash flows, there are a number of assumptions that are subject to uncertainties and contingencies, including the rate and timing of principal payments (prepayments, repurchases, defaults and liquidations), the pass through or coupon rate and interest rate fluctuations. In addition, management must use its judgment to estimate interest payment shortfalls due to delinquencies on the underlying mortgage loans. These uncertainties and contingencies are difficult to predict and are subject to future events that may impact management’s estimates and the Company’s interest income.

Fair Value Measurements

Fair Value Measurements

The Company estimates fair value using available market information and valuation methodologies it believes to be appropriate for these purposes. The Company defines fair value based on the price that would be received upon sale of an asset or the exit price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 825 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value. The fair value hierarchy consists of three broad levels, which are described below:

• Level I - Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

• Level II - Inputs (other than quoted prices included in Level I) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

• Level III - Unobservable inputs which reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

The determination of where an asset or liability falls in the above hierarchy requires judgment and factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company evaluates its hierarchy disclosures each quarter and depending on various factors, it is possible that an asset or liability may be classified differently from quarter to quarter.

Real estate securities are valued utilizing both observable and unobservable market inputs. These factors include projected future cash flows, ratings, subordination levels, vintage, remaining lives, credit issues, recent trades of similar real estate securities and the spreads used in the prior valuation. The Company obtains current market spread information where available and uses this information in evaluating and validating the market price of all real estate securities. Depending upon the significance of the fair value inputs used in determining these fair values, these real estate securities are classified in either Level II or Level III of the fair value hierarchy. As of September 30, 2017 and December 31, 2016, the Company received third-party quotes on each real estate security used in determining the fair value, all of which have been classified as Level II due to the observable nature of all significant inputs.

Organization And Offering Expenses

Organization and Offering Expenses

On October 25, 2016, the Company commenced an ongoing private offering (the “Offering”) of up to $500,000,000 in Class P Shares of common stock (the “Class P Shares”), pursuant to a private placement memorandum dated October 25, 2016. The purchase price per Class P Share is equal to $25.00 (the “Transaction Price”) plus applicable selling commissions, dealer manager fees and organization and offering expenses, resulting in a total purchase price of $27.38 per Class P Share if maximum selling commissions, dealer manager fees and organization and offering expenses are paid. Inland Securities Corporation (the “Dealer Manager”), an affiliate of the Advisor, is the dealer manager for the Offering.

Organization and offering expenses include all expenses incurred in connection with the Offering. Organization and offering expenses (other than selling commissions and the dealer manager fee) of the Company may be paid by the Advisor, Sub-Advisor, the Dealer Manager, or their respective affiliates on behalf of the Company and subsequently reimbursed by the Company. Offering expenses are deferred and a payable to the Advisor or Sub-Advisor until shares are sold in the Offering, at which point the expense reimbursement is paid from additional paid-in capital. These expenses include but are not limited to: (i) reimbursing the Dealer Manager and participating broker-dealers for bona fide out-of-pocket, itemized and detailed due diligence expenses incurred by these entities, (ii) expenses for printing and mailing, charges of transfer agents, registrars, trustees, escrow holders, depositaries and experts, and (iii) expenses of qualifying the sale of the shares under federal and state laws, including taxes and fees and accountants’ and attorneys’ fees and expenses.

The Company is obligated to reimburse the Advisor, the Sub-Advisor and their respective affiliates, as applicable, for organization and offering expenses paid by them on behalf of the Company to the extent organization and offering expenses (excluding selling commissions and the dealer manager fee) incurred by the Company in the Offering do not exceed the organization and offering expenses paid by investors in connection with the sale of Class P Shares in the Offering. As a result, these expenses are only a liability of the Company to the extent aggregate organization and offering expenses do not exceed the organization and offering expenses paid by investors in connection with the sale of Class P Shares in the Offering, determined at the end of the Offering.

Repurchase Agreements – Real Estate Securities

Repurchase Agreements – Real Estate Securities

The Company enters into Master Repurchase Agreements (each, an “MRA”) that allow the Company to sell real estate securities while providing a fixed repurchase price for the same real estate securities in the future. The repurchase contracts on each security under an MRA generally mature in 30 to 90 days and terms are adjusted for current market rates as necessary. Repurchase agreements are being accounted for as secured borrowings since the Company maintains effective control of the financed assets. Under the MRAs, the respective lender retains the right to mark the underlying collateral to fair value. A reduction in the value of pledged assets would require the Company to provide additional collateral or fund margin calls. The Company intends to maintain a level of liquidity that will enable the Company to meet margin calls. In addition, the MRAs are generally subject to certain financial covenants. The Company was in compliance with all financial covenant requirements as of September 30, 2017.

Income Taxes

Income Taxes

The Company intends to qualify as a REIT under the Internal Revenue Code of 1986, as amended, for federal income tax purposes commencing with the tax year ending December 31, 2017. If the Company qualifies for taxation as a REIT, the Company generally will not be subject to federal income tax to the extent it distributes its REIT taxable income, subject to certain adjustments, to its stockholders. Subsequently, if the Company fails to qualify as a REIT in any taxable year, the Company will be subject to federal income tax on its taxable income at regular corporate tax rates. Even if the Company qualifies for taxation as a REIT, the Company may be subject to certain state and local taxes on its income, property or net worth and federal income and excise taxes on its undistributed income.

The Company had no uncertain tax positions as of September 30, 2017 and December 31, 2016. The Company expects no significant increases or decreases in uncertain tax positions due to changes in tax positions within one year of September 30, 2017 or December 31, 2016. The Company had no interest or penalties relating to income taxes recognized in the consolidated statements of operations for the three and nine-months ended September 30, 2017 or 2016. As of September 30, 2017, returns for the calendar year 2016 remain subject to examination by U.S. and various state and local tax jurisdictions.

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences and are attributable to (1) differences between the financial statement carrying amounts and their respective tax bases, and (2) net operating losses. A valuation allowance is established for uncertainties relating to realization of deferred tax assets. As of December 31, 2016, the Company had a deferred tax asset of $10,832, related to organization and start-up costs, which are capitalized for income tax purposes, and a current net operating loss, and an unrealized loss in value of real estate securities. A valuation allowance in the amount of $10,832 was recorded due to current uncertainty of realization.

As of September 30, 2017, the Company has reversed deferred tax assets and the valuation allowance related to its activities. As a REIT, the Company is not expected to pay federal income tax at the REIT level, but instead a dividends paid deduction will generally offset its taxable income. As a result, while the Company will still be permitted to use net operating losses to offset its REIT taxable income, the Company generally does not expect to pay taxes on its REIT taxable income, and therefore does not expect to be able to realize such deferred tax assets.

For the three and nine months ended September 30, 2017, the Company has incurred $55,677 in current income tax expense in a consolidated taxable REIT subsidiary.  This tax is comprised of $42,841 in federal and $12,836 in state income tax expense.  The majority of this expense was related to the receipt of a one-time prepayment penalty interest received on the early pay-off of one investment.

Distributions Payable

Distributions Payable

Distributions payable represent distributions declared as of the balance sheet date which are payable to stockholders.

Per Share Data

Per Share Data

The Company calculates basic and diluted earnings per share by dividing net income attributable to the Company for the period by the weighted-average number of shares of common stock outstanding for that period.

Accounting Pronouncements Recently Issued but Not Yet Effective

Accounting Pronouncements Recently Issued but Not Yet Effective

In June 2016, the Financial Accounting Standards Board issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”), which changes how entities measure credit losses for financial assets carried at amortized cost. ASU 2016-13 eliminates the requirement that a credit loss must be probable before it can be recognized and instead requires an entity to recognize the current estimate of all expected credit losses. ASU 2016-13 is effective for SEC filers for reporting periods beginning after December 15, 2019. The amendments may be adopted early for reporting periods beginning after December 15, 2018. The Company is currently evaluating the impact ASU 2016-13 will have on its allowance for loan losses estimate.

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Real Estate Securities (Tables)

9 Months Ended

Sep. 30, 2017

Investments Debt And Equity Securities [Abstract]

Summary of Company’s Real Estate Securities

The following is a summary of the Company’s real estate securities as of September 30, 2017:

	Collateral Type	Interest Rate	Maturity Date	Par Value		Fair Value
CMBS 1	Hospitality	LIBOR + 4.6500%	November/2018	$	5,400,000	$	5,439,960
CMBS 2	Retail	LIBOR + 3.4000%	July/2019		5,078,500		5,078,500
CMBS 3	Hospitality	LIBOR + 0.9200%	August/2019		16,000,000		16,000,000
Total				$	26,478,500	$	26,518,460

The following is a summary of the Company’s real estate securities as of December 31, 2016:

	Collateral Type	Number of Investments		Interest Rate	Maturity Date	Par Value		Fair Value
CMBS 1	Hospitality		1	LIBOR + 4.6500%	November/2018	$	5,400,000	$	5,433,480

Summary of Amortized Cost, Unrealized Gains/Losses and Fair Value of Investments

The following table shows the amortized cost, unrealized gains/losses and fair value of the Company’s CMBS investments as of September 30, 2017:

	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
CMBS 1	$	5,423,898	$	16,062	$	—	$	5,439,960
CMBS 2		5,078,500		—		—		5,078,500
CMBS 3		16,000,000		—		—		16,000,000
Total	$	26,502,398	$	16,062	$	—	$	26,518,460

The following table shows the amortized cost, unrealized gains/losses and fair value of the Company’s CMBS investments as of December 31, 2016:

	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
CMBS 1	$	5,438,719	$	—	$	(5,239	)	$	5,433,480

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Commercial Mortgage Loans Held for Investment (Tables)

9 Months Ended

Sep. 30, 2017

Mortgage Loans On Real Estate [Abstract]

Summary of Commercial Loans Held for Investment

The following is a summary of the Company’s commercial mortgage loans held for investment as of September 30, 2017:  

	Number of Loans		Principal Balance		Unamortized (fees)/costs, net		Carrying Value		Weighted Average Coupon			Weighted Average Years to Maturity
Mezzanine loan		1	$	7,500,000	$	—	$	7,500,000		9.20	%		10.0

Summary of Investment Grade of Loans Loss

As part of the Company’s process for monitoring the credit quality of its loans, it performs a quarterly asset review of the loan portfolio and assigns risk ratings to each of its loans. Risk factors include payment status, lien position, borrower financial resources and investment in collateral, collateral type, project economics and geographic location, as well as national and regional economic factors. To determine the likelihood of loss, the loans are rated on a 5-point scale as follows:

Investment Grade	Investment Grade Definition
1	Investment exceeding fundamental performance expectations and/or capital gain expected. Trends and risk factors since time of investment are favorable.
2	Performing consistent with expectations and a full return of principal and interest expected. Trends and risk factors are neutral to favorable.
3	Performing loan requiring closer monitoring.  Trends and risk factors show some deterioration. Collection of principal and interest is still expected.
4	Underperforming investment with the potential of some interest loss but still expecting a positive return on investment. Trends and risk factors are negative.
5	Underperforming investment with expected loss of interest and some principal.

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Repurchase Agreements-Real Estate Securities (Tables)

9 Months Ended

Sep. 30, 2017

Banking And Thrift [Abstract]

Schedule of Outstanding Repurchase Agreements

As of September 30, 2017, the Company had entered into one MRA and had two outstanding repurchase agreements, as described in the table below.  The Company had not entered into any MRAs and did not have any outstanding repurchase agreements as of December 31, 2016.

							Weighted Average
Counterparty	Amount Outstanding		Accrued Interest Payable		Collateral Pledged		Interest Rate			Days to Maturity
Counterparty 1	$	8,936,000	$	846	$	11,400,000		2.29113	%		27

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Shareholders Equity (Tables)

9 Months Ended

Sep. 30, 2017

Equity [Abstract]

Schedule of Distributions Declared

The table below sets forth the distributions declared for Class P Shares during the nine-month period ended September 30, 2017.

	Distributions Declared Per Share
Date Declared	Distribution Period	Daily Distribution Amount		Date of Payment
February 22, 2017	March 1, 2017 through March 31, 2017	$	0.005260274	April 3, 2017
February 22, 2017	April 1, 2017 through April 30, 2017	$	0.005260274	May 1, 2017
February 22, 2017	May 1, 2017 through May 31, 2017	$	0.005260274	June 1, 2017
May 31, 2017	June 1, 2017 through June 30, 2017	$	0.005260274	July 5, 2017
May 31, 2017	July 1, 2017 through July 31, 2017	$	0.005260274	August 1, 2017
May 31, 2017	August 1, 2017 through August 31, 2017	$	0.005260274	September 1, 2017
August 9, 2017	September 1, 2017 through September 30, 2017	$	0.005260274	October 2, 2017
August 9, 2017	October 1, 2017 through October 31, 2017	$	0.005260274	November 1, 2017
August 9, 2017	November 1, 2017 through November 30, 2017	$	0.005260274	On or before December 7, 2017

Schedule of Distributions Paid

The table below sets forth the distributions paid in cash with respect to the Class P Shares during the nine-month period ended September 30, 2017.

Distribution Period	Payment Date	Distribution Amount
December 2016	January 3, 2017	$	33,230
January 2017	February 1, 2017		40,572
February 2017	March 1, 2017		40,661
March 2017	April 3, 2017		52,273
April 2017	May 1, 2017		59,276
May 2017	June 1, 2017		71,450
June 2017	July 5, 2017		82,179
July 2017	August 1, 2017		120,455
August 2017	September 1, 2017		152,454
Total		$	652,550

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Net Loss Per Share (Tables)

9 Months Ended

Sep. 30, 2017

Earnings Per Share [Abstract]

Summary of Basic and Diluted Net Loss Per Share

The following table is a summary of the basic and diluted net loss per share computation for the three and nine-month periods ended September 30, 2017 and 2016:

	Three-month period ended September 30,					Nine-month period ended September 30,
	2017			2016		2017			2016
Net loss	$	(35,900	)	$	—	$	(124,924	)	$	—
Weighted average shares outstanding, basic and diluted		910,390			—		546,430			—
Net loss per share, basic and diluted	$	(0.04	)	$	—	$	(0.23	)	$	—

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Transactions with Related Parties (Tables)

9 Months Ended

Sep. 30, 2017

Related Party Transactions [Abstract]

Summary of Related Party Transactions

The following table summarizes the Company’s related party transactions for the nine-month periods ended September 30, 2017 and 2016:

	Nine-month period ended September 30,				Payable as of September 30,
	2017		2016		2017		2016
Organization and offering expense reimbursement(1)	$	836,839	$	—	$	1,510,598	$	—
Selling commissions and dealer manager fee(2)		1,414,400		—	-			—
Advisory fee(3)	-			—	-			—
Operating expense reimbursement(4)		215,225		—		182		—
Total	$	2,466,464	$	—	$	1,510,780	$	—

(1) The Company reimburses the Advisor, the Sub-Advisor and their respective affiliates for costs and other expenses related to the Offering, provided that aggregate reimbursements of such costs and expenses shall not exceed the organization and offering expenses paid by investors in connection with the sale of Class P Shares in the Offering. Offering costs are offset against stockholders’ equity when paid. Unpaid amounts are recorded as deferred offering costs and included in due to related parties in these consolidated balance sheets.

(2) The Dealer Manager, an affiliate of the Advisor, receives selling commissions up to 5%, and a dealer manager fee up to 3%, of the Transaction Price for each Class P Share sold in the Offering, the majority of which is paid to third-party broker-dealers.

(3) The Company pays the Advisor an advisory fee comprised of (1) a fixed component and (2) a performance component. The fixed component of the advisory fee is paid quarterly in arrears in an amount equal to 1/4th of 1.5% of the average aggregate value of the Company’s assets over such quarter, where the value of each asset shall be the value determined in accordance with the Company’s valuation policies or, if such value has not yet been determined, the book value of the asset. If, in any given calendar quarter ending on or prior to December 31, 2017, the modified funds from operations (“MFFO”), which is a non-GAAP supplemental financial performance measure, is less than the aggregate distributions payable to stockholders for such quarter, then a portion of the fixed component of the advisory fee otherwise payable with respect to that quarter shall be deferred in an amount equal to the distributions payable for that quarter minus the MFFO for that quarter, provided that such deferred amount shall not exceed 25% of the fixed component of the advisory fee otherwise payable with respect to that quarter. Deferred portions of the fixed component of the advisory fee will be paid to the Advisor to the extent that MFFO exceeds distributions paid or payable to stockholders for a future calendar quarter, but only to the extent of such excess. The performance component of the advisory fee is calculated and paid annually with respect to the Class P Shares, such that for any year in which the Company’s total return per Class P Share exceeds 7% per annum, the Advisor will receive 20% of the excess total return allocable to the Class P Shares; provided that in no event will the performance component of the advisory fee exceed 15% of the aggregate total return allocable to Class P Shares for such year. The Advisor has waived the advisory fee for the nine-month period ended September 30, 2017.

(4) The Company reimburses the Advisor or its affiliates for out-of-pocket expenses that it incurs in connection with providing services to the Company, provided that the Company does not reimburse overhead costs, including rent and utilities or personnel costs (including salaries, bonuses, benefits and severance payments).

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Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2017

Fair Value Disclosures [Abstract]

Financial Instruments Carried at Fair Value in Consolidated Balance Sheets

The following table presents the Company’s financial instruments carried at fair value in the consolidated balance sheets by its level in the fair value hierarchy (see Note 2 – Summary of Significant Accounting Policies) as of September 30, 2017:

	Total		Level I		Level II		Level III
Real estate securities	$	26,518,460		—	$	26,518,460		—

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Subsequent Events (Tables)

9 Months Ended

Sep. 30, 2017

Subsequent Events [Abstract]

Schedule of Common Stock Outstanding and Proceeds from Offering

As of November 8, 2017, the Company had 1,328,175 shares of common stock outstanding and had raised proceeds from the Offering since September 30, 2017 and since inception as follows:

Source of Capital	October 1, 2017 through November 8, 2017		Total
Class P Shares	$	5,359,127	$	35,358,996

Schedule of Distributions Declared

The table below sets forth the distributions declared for Class P Shares.

	Distributions Declared Per Share
Date Declared	Distribution Period	Daily Distribution Amount		Date of Payment
November 8, 2017	December 1, 2017 through December 31, 2017	$	0.005260274	On or before January 7, 2018
November 8, 2017	January 1, 2018 through January 31, 2018	$	0.005260274	On or before February 7, 2018
November 8, 2017	February 1, 2018 through February 28, 2018	$	0.005260274	On or before March 7, 2018
November 8, 2017	March 1, 2018 through March 31, 2018	$	0.005260274	On or before April 7, 2018

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Summary of Significant Accounting Policies - Additional Information (Detail)		3 Months Ended		9 Months Ended		12 Months Ended
	Oct. 25, 2016 $ / shares shares	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2017 USD ($) Rating	Sep. 30, 2016 USD ($) Rating	Sep. 30, 2017 USD ($)	Dec. 31, 2016 USD ($)
Summary Of Significant Accounting Policies Disclosures [Line Items]
Cash and cash equivalents, description				Cash and cash equivalents include funds on deposit with financial institutions, including demand deposits with financial institutions with original maturities of three months or less.
Commercial mortgage loans held for investment		$ 7,500,000		$ 7,500,000		$ 7,500,000	$ 0
Allowance for loan losses		0		0		0	0
Uncertain tax positions		0		0		0	0
Uncertain tax positions, period increase (decrease)						$ 0	0
Uncertain tax positions, income tax interest or penalties		0	$ 0	0	$ 0
Deferred tax assets							10,832
Deferred tax assets, valuation allowance							$ 10,832
Current income tax expense		55,677		55,677
Current federal income tax expense		42,841		42,841
Current state income tax expense		$ 12,836		$ 12,836
Class P Common Stock
Summary Of Significant Accounting Policies Disclosures [Line Items]
Shares issued excluding issuance cost price per share | $ / shares	$ 25.00
Shares issued, price per share | $ / shares	$ 27.38
Minimum | MRA
Summary Of Significant Accounting Policies Disclosures [Line Items]
Repurchase agreement maturity term on real estate securities				30 days
Maximum | MRA
Summary Of Significant Accounting Policies Disclosures [Line Items]
Repurchase agreement maturity term on real estate securities				90 days
Maximum | Class P Common Stock
Summary Of Significant Accounting Policies Disclosures [Line Items]
Common stock private placement offering | shares	500,000,000
Commercial Mortgage Loans
Summary Of Significant Accounting Policies Disclosures [Line Items]
Risk rating to loan loss | Rating				2
Commercial Mortgage Loans | Minimum
Summary Of Significant Accounting Policies Disclosures [Line Items]
Risk rating to loan loss | Rating					1
Commercial Mortgage Loans | Maximum
Summary Of Significant Accounting Policies Disclosures [Line Items]
Risk rating to loan loss | Rating					5

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Real Estate Securities - Summary of Company's Real Estate Securities (Details)	9 Months Ended	12 Months Ended
	Sep. 30, 2017 USD ($) Investment	Dec. 31, 2016 USD ($) Investment
Schedule Of Available For Sale Securities [Line Items]
Par Value	$ 26,478,500
Fair Value	$ 26,518,460
Number of Investments | Investment	3
CMBS 1
Schedule Of Available For Sale Securities [Line Items]
Collateral Type	Hospitality	Hospitality
Maturity Date	2018-11	2018-11
Par Value	$ 5,400,000	$ 5,400,000
Fair Value	$ 5,439,960	$ 5,433,480
Number of Investments | Investment		1
CMBS 1 | LIBOR
Schedule Of Available For Sale Securities [Line Items]
Interest Rate	4.65%	4.65%
CMBS 2
Schedule Of Available For Sale Securities [Line Items]
Collateral Type	Retail
Maturity Date	2019-07
Par Value	$ 5,078,500
Fair Value	$ 5,078,500
CMBS 2 | LIBOR
Schedule Of Available For Sale Securities [Line Items]
Interest Rate	3.40%
CMBS 3
Schedule Of Available For Sale Securities [Line Items]
Collateral Type	Hospitality
Maturity Date	2019-08
Par Value	$ 16,000,000
Fair Value	$ 16,000,000
CMBS 3 | LIBOR
Schedule Of Available For Sale Securities [Line Items]
Interest Rate	0.92%

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Real Estate Securities - Summary of Amortized Cost, Unrealized Gains/Losses and Fair Value of Investments (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	$ 26,502,398
Unrealized Gains	16,062
Real estate securities at fair value	26,518,460	$ 5,433,480
CMBS 1
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	5,423,898	5,438,719
Unrealized Gains	16,062
Unrealized Losses		(5,239)
Real estate securities at fair value	5,439,960	$ 5,433,480
CMBS 2
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	5,078,500
Real estate securities at fair value	5,078,500
CMBS 3
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	16,000,000
Real estate securities at fair value	$ 16,000,000

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Real Estate Securities - Additional Information (Details)	9 Months Ended
	Sep. 30, 2017 USD ($) Investment	Sep. 30, 2016 USD ($)	Dec. 31, 2016 USD ($) Investment
Schedule Of Available For Sale Securities [Line Items]
Number of investments | Investment	3
Carrying value of investments	$ 26,518,460		$ 5,433,480
Unrealized gain	$ 16,062
Number of positions in unrealized loss for a period greater than 12 months | Investment	0
Realized gains or losses	$ 0	$ 0
CMBS 1
Schedule Of Available For Sale Securities [Line Items]
Number of investments | Investment			1
Carrying value of investments	5,439,960		$ 5,433,480
Unrealized gain	$ 16,062
Unrealized loss			$ 5,239

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Commercial Mortgage Loans Held for Investment - Summary of Commercial Mortgage Loans held for Investment (Details)	9 Months Ended
	Sep. 30, 2017 USD ($) Loan	Dec. 31, 2016 USD ($)
Mortgage Loans On Real Estate [Abstract]
Number of Loans | Loan	1
Principal Balance	$ 7,500,000
Carrying Value	$ 7,500,000	$ 0
Weighted Average Coupon	9.20%
Weighted Average Years to Maturity	10 years

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Commercial Mortgage Loans Held for Investment - Additional Information (Details)	9 Months Ended
	Sep. 30, 2017 USD ($) Rating	Dec. 31, 2016 USD ($)
Mortgage Loans On Real Estate [Line Items]
Commercial mortgage loans held for investment	$ 7,500,000	$ 0
Allowance for loan losses	$ 0	$ 0
Commercial Mortgage Loans
Mortgage Loans On Real Estate [Line Items]
Risk rating to loans | Rating	2

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Commercial Mortgage Loans Held for Investment - Summary of Investment Grade of Loans Loss (Details) - Commercial Mortgage Loans	9 Months Ended
	Sep. 30, 2017
Investment Grade One
Financing Receivable Recorded Investment [Line Items]
Description of Investment Grade	Investment exceeding fundamental performance expectations and/or capital gain expected. Trends and risk factors since time of investment are favorable.
Investment Grade Two
Financing Receivable Recorded Investment [Line Items]
Description of Investment Grade	Performing consistent with expectations and a full return of principal and interest expected. Trends and risk factors are neutral to favorable.
Investment Grade Three
Financing Receivable Recorded Investment [Line Items]
Description of Investment Grade	Performing loan requiring closer monitoring. Trends and risk factors show some deterioration. Collection of principal and interest is still expected.
Investment Grade Four
Financing Receivable Recorded Investment [Line Items]
Description of Investment Grade	Underperforming investment with the potential of some interest loss but still expecting a positive return on investment. Trends and risk factors are negative.
Investment Grade Five
Financing Receivable Recorded Investment [Line Items]
Description of Investment Grade	Underperforming investment with expected loss of interest and some principal.

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Repurchase Agreements-Real Estate Securities - Additional Information (Details) - Agreement	9 Months Ended	12 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Payables And Accruals [Abstract]
Number of outstanding repurchase agreements	2	0
Number of master repurchase agreements	1	0

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Repurchase Agreements-Real Estate Securities - Schedule of Outstanding Repurchase Agreements (Details)	9 Months Ended
	Sep. 30, 2017 USD ($)
Assets Sold Under Agreements To Repurchase [Line Items]
Amount Outstanding	$ 8,936,000
Accrued Interest Payable	846
Counterparty 1
Assets Sold Under Agreements To Repurchase [Line Items]
Amount Outstanding	8,936,000
Accrued Interest Payable	846
Collateral Pledged	$ 11,400,000
Weighted Average Interest Rate	2.29113%
Weighted Average Days to Maturity	27 days

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Stockholders Equity - Additional Information (Details) - USD ($)	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Class Of Stock [Line Items]
Proceeds from issuance of common stock	$ 24,057,369
Common stock. selling costs	1,708,089
Deferred offering costs	1,510,598		$ 967,448
Cash distributions paid	652,550
Distributions declared but not yet paid	$ 170,017		$ 33,230
Class P Common Stock
Class Of Stock [Line Items]
Common stock, shares issued	892,377
Common stock issued, average price per share	$ 26.96
Proceeds from issuance of common stock	$ 22,349,280
Common stock. selling costs	1,708,089
Deferred offering costs	543,150
Distribution Amount	652,550
Distributions declared but not yet paid	170,017
Class P Common Stock | Dividend Declared
Class Of Stock [Line Items]
Distribution Amount	789,337	$ 0
Cash distributions paid	$ 652,550	$ 0

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Stockholders Equity - Schedule of Distributions Declared (Details) - Common Stock - $ / shares				9 Months Ended
	Aug. 09, 2017	May 31, 2017	Feb. 22, 2017	Sep. 30, 2017
March 1, 2017 through March 31, 2017
Dividends Payable [Line Items]
Date Declared			Feb. 22, 2017
Distribution Period				March 1, 2017 through March 31, 2017
Daily Distribution Amount			$ 0.005260274
Date of Payment			Apr. 03, 2017
April 1, 2017 through April 30, 2017
Dividends Payable [Line Items]
Date Declared			Feb. 22, 2017
Distribution Period				April 1, 2017 through April 30, 2017
Daily Distribution Amount			$ 0.005260274
Date of Payment			May 01, 2017
May 1, 2017 through May 31, 2017
Dividends Payable [Line Items]
Date Declared			Feb. 22, 2017
Distribution Period				May 1, 2017 through May 31, 2017
Daily Distribution Amount			$ 0.005260274
Date of Payment			Jun. 01, 2017
June 1, 2017 through June 30, 2017
Dividends Payable [Line Items]
Date Declared		May 31, 2017
Distribution Period				June 1, 2017 through June 30, 2017
Daily Distribution Amount		$ 0.005260274
Date of Payment		Jul. 05, 2017
July 1, 2017 through July 31, 2017
Dividends Payable [Line Items]
Date Declared		May 31, 2017
Distribution Period				July 1, 2017 through July 31, 2017
Daily Distribution Amount		$ 0.005260274
Date of Payment		Aug. 01, 2017
August 1, 2017 through August 31, 2017
Dividends Payable [Line Items]
Date Declared		May 31, 2017
Distribution Period				August 1, 2017 through August 31, 2017
Daily Distribution Amount		$ 0.005260274
Date of Payment		Sep. 01, 2017
September 1, 2017 through September 30, 2017
Dividends Payable [Line Items]
Date Declared	Aug. 09, 2017
Distribution Period				September 1, 2017 through September 30, 2017
Daily Distribution Amount	$ 0.005260274
Date of Payment	Oct. 02, 2017
October 1, 2017 through October 31, 2017
Dividends Payable [Line Items]
Date Declared	Aug. 09, 2017
Distribution Period				October 1, 2017 through October 31, 2017
Daily Distribution Amount	$ 0.005260274
Date of Payment	Nov. 01, 2017
November 1, 2017 through November 30, 2017
Dividends Payable [Line Items]
Date Declared	Aug. 09, 2017
Distribution Period				November 1, 2017 through November 30, 2017
Daily Distribution Amount	$ 0.005260274
Date of Payment	On or before December 7, 2017

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Stockholders Equity - Schedule of Distributions Paid (Details) - Class P Common Stock	9 Months Ended
	Sep. 30, 2017 USD ($)
Dividends Payable [Line Items]
Distribution Amount	$ 652,550
December 2016
Dividends Payable [Line Items]
Distribution Period	2016-12
Date of Payment	Jan. 03, 2017
Distribution Amount	$ 33,230
January 2017
Dividends Payable [Line Items]
Distribution Period	2017-01
Date of Payment	Feb. 01, 2017
Distribution Amount	$ 40,572
February 2017
Dividends Payable [Line Items]
Distribution Period	2017-02
Date of Payment	Mar. 01, 2017
Distribution Amount	$ 40,661
March 2017
Dividends Payable [Line Items]
Distribution Period	2017-03
Date of Payment	Apr. 03, 2017
Distribution Amount	$ 52,273
April 2017
Dividends Payable [Line Items]
Distribution Period	2017-04
Date of Payment	May 01, 2017
Distribution Amount	$ 59,276
May 2017
Dividends Payable [Line Items]
Distribution Period	2017-05
Date of Payment	Jun. 01, 2017
Distribution Amount	$ 71,450
June 2017
Dividends Payable [Line Items]
Distribution Period	2017-06
Date of Payment	Jul. 05, 2017
Distribution Amount	$ 82,179
July 2017
Dividends Payable [Line Items]
Distribution Period	2017-07
Date of Payment	Aug. 01, 2017
Distribution Amount	$ 120,455
August 2017
Dividends Payable [Line Items]
Distribution Period	2017-08
Date of Payment	Sep. 01, 2017
Distribution Amount	$ 152,454

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Net Loss Per Share - Summary of Basic and Diluted Net Loss Per Share (Details) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2017
Earnings Per Share [Abstract]
Net loss	$ (35,900)	$ (124,924)
Weighted average number of shares outstanding, basic and diluted	910,390	546,430
Net loss per share basic and diluted	$ (0.04)	$ (0.23)

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Transactions with Related Parties - Additional Information (Details) - USD ($)	9 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Related Party Transaction [Line Items]
Proceeds from issuance of common stock	$ 24,057,369
Common stock, shares, issued	1,130,077	237,700
Class P Common Stock
Related Party Transaction [Line Items]
Proceeds from issuance of common stock	$ 22,349,280
Advisor | Class P Common Stock
Related Party Transaction [Line Items]
Proceeds from issuance of common stock	$ 1,000,000
Common stock, shares, issued	40,040
Payment of selling commissions	$ 0
Payment of dealer manager fees	0
Payment of organization and offering expenses	$ 0
Subscription agreement, minimum number of shares to be held	8,000
Subscription agreement, value of minimum number of shares to be held	$ 200,000
Description of subscription agreement	The Advisor has agreed pursuant to its subscription agreement that, for so long as it or its affiliate is serving as the Advisor, (i) it will not sell or transfer at least 8,000 of the Class P Shares that it has purchased, accounting for $200,000 of its investment, to an unaffiliated third party; (ii) it will not be eligible to submit a request for these 40,040 Class P Shares pursuant to the Company’s share repurchase program prior to the fifth anniversary of the date on which such shares were purchased; and (iii) repurchase requests made for these shares will only be accepted (a) on the last business day of a calendar quarter, (b) after all repurchase requests from all other stockholders for such quarter have been accepted and (c) to the extent that such repurchases do not cause total repurchases in the quarter in which they are being repurchased to exceed that quarter’s repurchase cap
Sub-Advisor | Class P Common Stock
Related Party Transaction [Line Items]
Proceeds from issuance of common stock	$ 3,000,000
Common stock, shares, issued	120,000
Payment of selling commissions	$ 0
Payment of dealer manager fees	0
Payment of organization and offering expenses	$ 0
Description of subscription agreement	Sound Point has agreed pursuant to its subscription agreement that, for so long as the Sub-Advisor or its affiliate is serving as the Sub-Advisor, (i) it will not be eligible to submit a request for the repurchase of these 120,000 shares pursuant to the Company’s share repurchase program prior to the fifth anniversary of the date on which such shares were purchased; and (ii) repurchase requests made for these shares will only be accepted (a) on the last business day of a calendar quarter, (b) after all repurchase requests from all other stockholders for such quarter have been accepted and (c) to the extent that such repurchases do not cause total repurchases in the quarter in which they are being repurchased to exceed that quarter’s repurchase cap.

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Transactions with Related Parties - Summary of Related Party Transactions (Details) - USD ($)	9 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Related Party Transaction [Line Items]
Total, payable	$ 1,510,780	$ 995,716
Advisor
Related Party Transaction [Line Items]
Organization and offering expense reimbursement	836,839
Selling commissions and dealer manager fee	1,414,400
Operating expense reimbursement	215,225
Total	2,466,464
Organization and offering expense reimbursement, payable	1,510,598
Operating expense reimbursement, payable	182
Total, payable	$ 1,510,780

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Transactions with Related Parties - Summary of Related Party Transactions (Parenthetical) (Details) - Advisor	9 Months Ended
	Sep. 30, 2017
Related Party Transaction [Line Items]
Percentage of average aggregate value of assets	1.50%
Percentage of maximum fixed component of advisory fee	25.00%
Percentage of minimum total return per share	7.00%
Percentage of excess total return	20.00%
Percentage of aggregate total return	15.00%
Maximum
Related Party Transaction [Line Items]
Percentage of selling commission	5.00%
Percentage of dealer manager fee	3.00%

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Fair Value of Financial Instruments - Financial Instruments Carried at Fair Value in Consolidated Balance Sheets (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Real estate securities at fair value	$ 26,518,460	$ 5,433,480
Fair Value Measurements, Recurring | Real Estate Securities
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Real estate securities at fair value	26,518,460
Fair Value Measurements, Recurring | Real Estate Securities | Level II
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Real estate securities at fair value	$ 26,518,460

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Subsequent Events - Additional Information (Details) - shares	Nov. 08, 2017	Sep. 30, 2017	Dec. 31, 2016
Subsequent Event [Line Items]
Common stock, shares, outstanding		1,130,077	237,700
Subsequent Event
Subsequent Event [Line Items]
Common stock, shares, outstanding	1,328,175

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Subsequent Events - Schedule of Common Stock Outstanding and Proceeds from Offering (Details) - USD ($)	1 Months Ended	9 Months Ended	12 Months Ended
	Nov. 08, 2017	Sep. 30, 2017	Nov. 08, 2017
Subsequent Event [Line Items]
Proceeds from issuance of common stock		$ 24,057,369
Class P Common Stock
Subsequent Event [Line Items]
Proceeds from issuance of common stock		$ 22,349,280
Class P Common Stock | Subsequent Event
Subsequent Event [Line Items]
Proceeds from issuance of common stock	$ 5,359,127		$ 35,358,996

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Subsequent Events - Schedule of Distributions Declared (Details) - Subsequent Event - Class P Common Stock	Nov. 08, 2017 $ / shares
December 1, 2017 through December 31, 2017
Subsequent Event [Line Items]
Date Declared	Nov. 08, 2017
Distribution Period	December 1, 2017 through December 31, 2017
Daily Distribution Amount	$ 0.005260274
Date of Payment	On or before January 7, 2018
January 1, 2018 through January 31, 2018
Subsequent Event [Line Items]
Date Declared	Nov. 08, 2017
Distribution Period	January 1, 2018 through January 31, 2018
Daily Distribution Amount	$ 0.005260274
Date of Payment	On or before February 7, 2018
February 1, 2018 through February 28, 2018
Subsequent Event [Line Items]
Date Declared	Nov. 08, 2017
Distribution Period	February 1, 2018 through February 28, 2018
Daily Distribution Amount	$ 0.005260274
Date of Payment	On or before March 7, 2018
March 1, 2018 through March 31, 2018
Subsequent Event [Line Items]
Date Declared	Nov. 08, 2017
Distribution Period	March 1, 2018 through March 31, 2018
Daily Distribution Amount	$ 0.005260274
Date of Payment	On or before April 7, 2018