BHM 10-K & 10-Q changes, risk factors and insider trading

Inflation in the United States accelerated rapidly in the first half of 2023 and remained elevated throughout 2023 and 2024 and may continue to remain high in the future. While inflation has shown signs of moderating, it remains uncertain whether substantial inflation in the United States will be sustained over an extended period of time or have a significant effect on the United States or other economies. In addition, any tariffs imposed by the current administration or other countries may cause further inflationary pressures in the economy. Rising inflation could have an adverse impact on our operating expenses as well as our general and administrative expenses. For example, it is possible that the impact of the rate of inflation may not be adequately offset by annual rent escalations or the resetting of rents from our renewal and re-leasing activities, which may adversely affect our business, financial condition, results of operations, and cash flows. Compensation costs and professional service fees are also subject to the impact of inflation and are expected to increase proportionately with increasing market prices for such services. Consequently, inflation may increase our general and administrative expenses over time and may adversely impact our results of operations and cash flows.

While the Federal Reserve has held rates steady between July 2023 and September 2024 and reduced interest rates by 50-basisan aggregate of 100-basis points in September 2024, 25-basis points in Novemberduring 2024 and 25-basisby an aggregate of 75-basis points induring December 2024,2025, there can be no assurances that interest rates will not rise again. Our exposure to increases in interest rates in the short term is limited to our variable-rate borrowings. As of December 31, 2024,2025, we had interest rate caps and swaps which effectively limit our exposure to interest rate risk by providing a ceiling on the underlying floating interest rate for $155.6$100.7 million of our floating rate debt. However, the effect of inflation on interest rates could increase our financing costs over time, either through borrowings on floating-rate lines of credit or refinancing of our existing borrowings that may incur higher interest expenses related to the issuance of new debt.

WeAn areaspect employingof aour business model withhas a limited track record, which may make our business difficult to evaluate.

OurOne aspect of our business strategy involves purchasing, renovating, maintaining, and managing a large number of residential properties, including single-family properties, and leasing them to qualified residents. Until recently, the single-family rental business consisted primarily of private and individual investors in local markets and was managed individually or by small, non-institutional owners and property managers. Entry into this market by large, well-capitalized investors is a relatively recent trend, so few peer companies exist and none have yet established long-term track records that might assist us in predicting whether this aspect of our business model and investment strategy can be implemented and sustained over an extended period of time. It may be difficult for you to evaluate our potential future performance without the benefit of established long-term track records from companies implementing a similar business model. We may encounter unanticipated problems as we continue to refine our business model, which may adversely affect our results of operations and ability to make distributions to our stockholders and cause our stock price to decline significantly.

Various legislative and regulatory bodies have been focused on the shortage and increases in the cost of residential housing in the U.S. There has been vigorous and continuing political debate and discussion, in which we participate, with respect to residential housing laws and regulations, with particular focus on the single-family residential housing industry. SinceOn lateJanuary 2023,20, legislation2026, hasPresident beenTrump introducedsigned thatan could,executive iforder enacted,directing discouragefederal oragencies deterto take steps to limit the purchase of single-family properties by entities“large ownedinstitutional orinvestors”. controlledThe executive order provides an exception for the type of build-to-rent communities that are a focus of our investment strategy, and does not impose an outright ban on the acquisition of single-family properties by institutional investors.investors, Itnor isdoes unclearit whethercompel the sale of existing portfolios. For these orreasons, similarwe changescurrently willdo benot enactedanticipate and,the ifexecutive enacted,order, how soonnor any suchresulting changeslegislation couldor takeenforcement, effect. If enacted, such changes couldto have ana adversematerial impact on our businessbusiness. However, the scope and financialimpact results.of Inthe addition,executive order remains subject to further guidance from the current administration, and there can be no assurance that such guidance, and/or any other future legislative or regulatory changes will not be proposed or enactedenacted, including those governing the types of investments we are permitted to make, that could adversely affect our business and financial results.

In addition to general, regional, national, and international economic conditions, our operating performance will be impacted by the economic conditions in our markets. We base a substantial part of our business plan on our belief that property values and operating fundamentals for residential properties in our markets will continue to improve over the near to intermediate term. However, these markets have experienced substantial economic downturns in recent years and could experience similar or worse economic downturns in the future. Additionally, a significant outbreak of infectious disease in the human population or pandemic may result in a widespread health crisis adversely affecting the economies and financial markets of many countries, resulting in an economic downturn that could negatively affect our business, results of operations, and financial condition. See “—Our business, results of operations, financial condition, and cash flows may be adversely affected by pandemics and outbreaks of infectious disease, which may include COVID-19.” We can provide no assurance as to the extent property values and operating fundamentals in these markets will improve, if at all. If the recent economic downturn in these markets returns or if we fail to accurately predict the timing of economic improvement in these markets, the value of our properties could decline and our ability to execute our business plan may be adversely affected to a greater extent than if we owned a real estate portfolio that was more geographically diversified, which could adversely affect our financial condition, operating results, and ability to make distributions to our stockholders and cause the value of our Series A Preferred Stock, Series B Preferred Stock or Class A common stock to decline.

Certain of our competitors may be larger in certain of our markets and may have greater financial or other resources than we do. Some competitors may have a lower cost of funds and access to funding sources that may not be available to us. In addition, any potential competitor may have higher risk tolerances or different risk assessments and may not be subject to the operating constraints associated with maintaining qualification for taxation as a REIT, which could allow them to consider a wider variety of investments. Competition may result in fewer investments, higher prices, a broadly dispersed portfolio of properties that does not lend itself to efficiencies of concentration, acceptance of greater risk, lower yields and a narrower spread of yields over our financing costs. In addition, competition for desirable investments could delay the investment of our capital, which could adversely affect our results of operations and cash flows. As a result, there can be no assurance that we will be able to identify and finance investments that are consistent with our investment objectives or to achieve positive investment results, and our failure to accomplish any of the foregoing could have a material adverse effect on us and cause the value of our Series A Preferred Stock, Series B Preferred Stock or Class A common stock to decline.

We may at times have limited sources of capital other than proceeds from future mortgage debt financings for acquisition and/or development projects, cash generated from operating activities, our $200$50 million revolving credit facilities,facility, the net proceeds of offerings of our securities, and the proceeds from our DST Program.

We may at times have limited sources of capital other than proceeds from future mortgage debt financings for acquisition and/or development projects, cash generated from operating activities, our $200$50 million revolving credit facilities,facility, the net proceeds of offerings of our securities, and the proceeds from our DST Program to meet our primary liquidity requirements. As a result, we may not be able to pay our liabilities and obligations when they come due other than with the net proceeds of an offering. Depending on business conditions at the time we might not be able to effectuate an offering, which in either case may limit our ability to implement our business plan.

As of MarchFebruary 6,20, 2025,2026, our executive officers beneficially owned interests representing approximately 24.6%22.2% of the total economic interest in our Class A common stock and Class C common stock on a fully diluted basis, where “on a fully diluted basis” assumes that all outstanding OP Units, C-OP Units (as defined in the Partnership Agreement), LTIP Units and C-LTIP Units (as defined in the Partnership Agreement), whether vested or unvested, in each case are ultimately settled for shares of our common stock. In addition, as of MarchFebruary 6,20, 2025,2026, the aggregate voting power of our executive officers represented approximately 9.3%7.6% of the total voting power of our outstanding Class A common stock and Class C common stock. As a result of our executive officers’ significant ownership in our company, our executive officers will have significant influence over our affairs and could exercise such influence in a manner that is not in the best interests of our other stockholders, including with respect to matters submitted to our stockholders for approval such as the election of directors and any merger, consolidation or sale of all or substantially all of our assets. Our executive officers may have interests that differ from our other stockholders, and may accordingly vote in ways that may not be consistent with the interests of those other stockholders.

As of December 31, 2024,2025, we had approximately $177$115 million of mortgages payable and revolving credit facilities outstanding that are indexed to SOFR, and our future variable rate debt may bear interest at a rate derived from SOFR. SOFR is a relatively new reference rate. The publication of SOFR began in April 2018, and, therefore, it has a very limited history. The future performance of SOFR cannot be predicted based on the limited historical performance. Since the initial publication of SOFR, changes in SOFR have, on occasion, been more volatile than changes in other benchmark or market rates, such as United States dollar LIBOR. Additionally, any successor rate to SOFR may not have the same characteristics as SOFR or LIBOR. As a result, the amount of interest we may pay on future variable rate debt indexed to SOFR is difficult to predict.

Our Manager will be obligated to supply us with substantially all of our senior management team, including our chief executive officer, president, chief accounting officer and chief operating officer. Subject to investment, leverage and other guidelines or policies adopted by our Board, our Manager will have significant discretion regarding the implementation of our investment and operating policies and strategies. Accordingly, we believe that our success will depend significantly upon the experience, skill, resources, relationships and contacts of the senior officers and key personnel of our Manager and its affiliates. In particular, our success depends to a significant degree upon the contributions of Messrs. Kamfar, Ruddy, MacDonald, Babb, Vohs, DiFranco and Emala, all of whom are senior officers of our Manager. We will not have employment agreements with any of these key personnel and do not have key man life insurance on any of them. If any of Messrs. Kamfar, Ruddy, MacDonald, Babb, Vohs, DiFranco and Emala were to cease their affiliation with us or our Manager, our Manager may be unable to find suitable replacements, and our operating results could suffer. We believe that our future success will depend, in large part, upon our Manager’s ability to hire and retain highly skilled managerial, operational and marketing personnel. Competition for highly skilled personnel is intense, and our Manager may be unsuccessful in attracting and retaining such skilled personnel. If we lose or are unable to obtain the services of highly skilled personnel, our ability to implement our investment strategies could be delayed or hindered, and the value of your investment may decline.

Risks Related to Offerings of our Series A Preferred Stock and/or our Series B Preferred Stock

To the extent that our distributions represent a return of capital for tax purposes, stockholders may recognize an increased gain or a reduced loss upon subsequent sales (including cash redemptions) of their shares of Series A Preferred Stock or Series B Preferred Stock.

The dividends payable by us on the Series A Preferred Stock and Series B Preferred Stock may exceed our current and accumulated earnings and profits as determined for U.S. federal income tax purposes. If that were to occur, it would result in the amount of distributions that exceed our earnings and profits being treated first as a return of capital to the extent of the stockholder’s adjusted tax basis in the stockholder’s Series A Preferred Stock and Series B Preferred Stock and then, to the extent of any excess over the stockholder’s adjusted tax basis in the stockholder’s Series A Preferred Stock and Series B Preferred Stock, as capital gain. Any distribution that is treated as a return of capital will reduce the stockholder’s adjusted tax basis in the stockholder’s Series A Preferred Stock and Series B Preferred Stock, and subsequent sales (including cash redemptions) of such stockholder’s Series A Preferred Stock and Series B Preferred Stock will result in recognition of an increased taxable gain or reduced taxable loss due to the reduction in such adjusted tax basis.

Because we conduct substantially all of our operations through our Operating Partnership, our ability to pay dividends on our Series A Preferred Stock and Series B Preferred Stock will depend almost entirely on the distributions we receive from our Operating Partnership. We may not be able to pay dividends regularly on our Series A Preferred Stock or Series B Preferred Stock.

We may not be able to pay dividends on a regular quarterly basis in the future on our Series A Preferred Stock or our Series B Preferred Stock. We have contributed, and intend to continue to contribute in the future, the entire net proceeds from anythe offerings of all such series of our Seriespreferred A Preferred Stockstock to our Operating Partnership in exchange for Series A Preferred Units and Series B Preferred Units (as applicable) that have substantially the same economic terms as the Series A Preferred Stock.Stock and Series B Preferred Stock (respectively). Because we conduct substantially all of our operations through our Operating Partnership, our ability to pay dividends on the Series A Preferred Stock and Series B Preferred Stock will depend almost entirely on payments and distributions we receive on our interests in our Operating Partnership. If our Operating Partnership fails to operate profitably and to generate sufficient cash from operations (and the operations of its subsidiaries), we may not be able to pay dividends on the Series A Preferred Stock or Series B Preferred Stock. Furthermore, any new shares of preferred stock on parity with any such series of preferred stock will substantially increase the cash required to continue to pay cash dividends at stated levels. Any common stock or preferred stock that may be issued in the future to finance acquisitions, upon exercise of stock options or otherwise, would have a similar effect.

Your interests in our Series A Preferred Stock and/or Series B Preferred Stock could be subordinated and/or diluted by the incurrence of additional debt, the issuance of additional shares of preferred stock, including additional shares of Seriespreferred Astock, Preferredincluding Stock,additional shares of any or all of the foregoing series of preferred stock, and by other transactions.

As of December 31, 2024,2025, our total indebtedness was approximately $381.6$440.8 million, which includes $121.0 million outstanding under our revolving credit facilities.million. We may incur significant additional debt in the future. TheEach of the Series A Preferred Stock and the Series B Preferred Stock is subordinate to all of our existing and future debt and liabilities and those of our subsidiaries. Our future debt may include restrictions on our ability to pay dividends to preferred stockholders in the event of a default under the debt facilities or under other circumstances. In addition, our charter currently authorizes the issuance of up to 250,000,000 shares of preferred stock in one or more classes or series, of which 30,000,000 have been classified as shares of Series A Preferred Stock and 14,000,000 have been classified as shares of Series B Preferred Stock. As of December 31, 2024,2025, we had issued and outstanding 4,628,6816,288,703 shares of Series A Preferred Stock and no shares of Series B Preferred Stock. The issuance of additional preferred stock on parity with or senior to either or both of the Seriesforegoing Aseries Preferredof Stockpreferred stock or any other class or series of preferred stock would dilute the interests of the holders of shares of preferred stock of the applicable class or series, and any issuance of preferred stock senior to the Series A Preferred Stock or Series B Preferred Stock, or any other class or series of preferred stock, or any issuance of additional indebtedness, could affect our ability to pay dividends on, redeem or pay the liquidation preference on any or all of the foregoing class or series of preferred stock. We may issue preferred stock on parity with the Series A Preferred Stock and/or the Series B Preferred Stock without the consent of the holders of shares of Seriespreferred Astock Preferredof Stock.the applicable series. Other than the right of holders to cause us to redeem the Series A Preferred Stock and/or the Series B Preferred Stock upon a Change of Control (as defined below), none of the provisions relating to the Series A Preferred Stock, the Series B Preferred Stock or any other class or series of preferred stock relate to or limit our indebtedness or afford the holders of shares thereof protection in the event of a highly leveraged or other transaction, including a merger or the sale, lease or conveyance of all or substantially all our assets or business, that might adversely affect the holders of such shares.

In the event a holder of our Series A Preferred Stock or Series B Preferred Stock exercises their redemption optionoption, we may redeem such shares of Series A Preferred Stock and/ or Series B Preferred Stock either for cash, or for shares of our Class A common stock, or any combination thereof, in our sole discretion.

If we choose to redeem shares of our Series A Preferred Stock or Series B Preferred Stock for Class A common stock, the holder will receive shares of our common stock and therefore be subject to the risks of ownership thereof. Ownership of shares of our Series A Preferred Stock or Series B Preferred Stock will not give you the rights of holders of our Class A common stock. Until and unless you receive shares of our Class A common stock upon redemption, you will have only those rights applicable to holders of our Series A Preferred Stock.Stock or Series B Preferred Stock (as applicable).

The Series A Preferred Stock hasand the Series B Preferred Stock have not been rated.

We have not sought to obtain a rating for the Series A Preferred Stock or the Series B Preferred Stock. No assurance can be given, however, that one or more rating agencies might not independently determine to issue such ratings or that such a rating, if issued, would not adversely affect the market price of the Seriesapplicable Aseries Preferredof Stock.preferred stock. In addition, we may elect in the future to obtain a rating of the Series A Preferred Stock or the Series B Preferred Stock, which could adversely impact the market price of the applicable series. Ratings only reflect the views of the rating agency or agencies issuing the ratings and such ratings could be revised downward, placed on negative outlook or withdrawn entirely at the discretion of the issuing rating agency if in its judgment circumstances so warrant. While ratings do not reflect market prices or the suitability of a security for a particular investor, such downward revision or withdrawal of a rating could have an adverse effect on the market price of the Series A Preferred Stock or the Series B Preferred Stock. It is also possible that the Series A Preferred Stock and/or the Series B Preferred Stock will never be rated.

Dividend payments on each of the Series A Preferred Stock and the Series B Preferred Stock are not guaranteed.

Although dividends on each of the Series A Preferred Stock and the Series B Preferred Stock are cumulative, our Board must approve the actual payment of such distributions. Our Board can elect at any time or from time to time, and for an indefinite duration, not to pay any or all accrued distributions. Our Board could do so for any reason, and may be prohibited from doing so in the following instances:

●poor historical or projectedproject cash flows;

●the need to make paymentspayment on our indebtedness;

We intend to use the net proceeds from any offerings of the Series A Preferred Stock and/or the Series B Preferred Stock to fund future investments and for other general corporate and working capital purposes, but any such offerings will not be conditioned upon the closing of pending property investments and we will have broad discretion to determine alternative uses of proceeds.

We intend to use a portion of the net proceeds from any offerings of our Series A Preferred Stock and/or our Series B Preferred Stock to fund future investments and for other general corporate and working capital purposes. However, any such offerings will not be conditioned upon the closing of definitive agreements to acquire or invest in any properties. We will have broad discretion in the application of the net proceeds from such offerings, and holders of our Series A Preferred Stock and our Series B Preferred Stock will not have the opportunity as part of their investment decision to assess whether the net proceeds are being used appropriately. Because of the number and variability of factors that will determine our use of the net proceeds from such offerings, their ultimate use may vary substantially from their currently intended use, and result in investments that are not accretive to our results from operations.

In causing our subsidiaries to obtain certain nonrecourse loans, we may provide standard carve-out guaranties. These guaranties are generally only applicable if and when the borrower directly, or indirectly through agreement with an affiliate, joint venture partner or other third party, voluntarily files a bankruptcy or similar liquidation or reorganization action or takes other actions that are fraudulent or improper (commonly referred to as “bad boy” guaranties). We also may enter into recourse guaranties with respect to future mortgages, or provide credit support to development projects through completion guaranties, which also could increase risk of repayment. In some circumstances, pursuant to guarantees to which we are a party or that we may enter into in the future, our obligations pursuant to such “bad boy” carve-out guaranties and other guaranties may be triggered by a Change of Control, because, among other things, such an event may result indirectly in a change of control of the applicable borrower. Because a Change of Control while any Series A Preferred Stock or Series B Preferred Stock is outstanding also triggers a right of redemption for cash by the holders thereof, the effect of a Change of Control could negatively impact our liquidity and overall financial condition, and could negatively impact the ability of holders of shares of our Series A Preferred Stock or Series B Preferred Stock to receive dividends or other amounts on their shares of such Series A Preferred Stock or Series B Preferred Stock.

There is a risk of delay in our redemption of Series A Preferred Stock or Series B Preferred Stock and we may fail to redeem such securities as required by their terms.

Substantially all of the investments we presently hold and the investments we expect to acquire in the future are, and will be, illiquid. The illiquidity of our investments may make it difficult for us to obtain cash quickly if a need arises. If we are unable to obtain sufficient liquidity prior to a redemption date, we may be forced to, among other things, engage in a partial redemption or to delay a required redemption. If this were to occur, the market price of shares of the Series A Preferred Stock or the Series B Preferred Stock might be adversely affected, and stockholders entitled to a redemption payment may not receive payment.

The Series A Preferred Stock and the Series B Preferred Stock will bear a risk of early redemption by us.

We may voluntarily redeem some or all of the Series A Preferred Stock, and/or some or all of the Series B Preferred Stock, for cash or equal value of shares of our Class A common stock, two years after the issuance date. Any such redemptions may occur at a time that is unfavorable to holders of such preferred stock. We may have an incentive to voluntarily redeem shares of Series A Preferred Stock and/or Series B Preferred Stock, if market conditions allow us to issue other preferred stock or debt securities at an interest or distribution rate that is lower than the distribution rate on the applicable series of preferred stock. Given the potential for early redemption of the Series A Preferred Stock and Series B Preferred Stock, holders of such shares may face an increased reinvestment risk, which is the risk that the return on an investment purchased with proceeds from the sale or redemption of the Series A Preferred Stock or Series B Preferred Stock may be lower than the return previously obtained from the investment in such shares.

Our ability to redeem the Series A Preferred Stock or Series B Preferred Stock may subject investors to certain risks, including reinvestment risk and volatility risk.

Beginning two years following the date of original issuance of the shares of Series A Preferred Stock or Series B Preferred Stock to be redeemed, we may voluntarily redeem some or all of such Series A Preferred Stock or Series B Preferred Stock for cash or shares of our Class A common stock, in our sole discretion. Any redemption of Series A Preferred Stock or Series B Preferred Stock may occur at a time that is unfavorable to holders of the Series A Preferred Stock or the Series B Preferred Stock. We may have an incentive to redeem the Series A Preferred Stock or the Series B Preferred Stock voluntarily if market conditions allow us to issue other preferred stock or debt securities at an interest or distribution rate that is lower than the distribution rate on the Series A Preferred Stock or the Series B Preferred Stock. Given the potential for early redemption of the Series A Preferred Stock and the Series B Preferred Stock, holders of such shares may face an increased reinvestment risk, which is the risk that the return on an investment purchased with proceeds from the sale or redemption of the Series A Preferred Stock or the Series B Preferred Stock may be lower than the return previously obtained from the investment in such shares. The trading price of the Class A common stock, for which the Series A Preferred Stock or the Series B Preferred Stock may be redeemed, may be volatile and may expose investors to additional volatility risk.

Holders of Series A Preferred Stock and/or Series B Preferred Stock should not expect us to redeem all or any such shares on the date they first become redeemable or on any particular date after they become redeemable.

Except in limited circumstances related to our ability to maintain our qualification as a REIT or a special optional redemption in connection with a Change of Control, Series A Preferred Stock and/or Series B Preferred Stock may be redeemed by us at our option, either in whole or in part, only on or after two years from the issuance date. Any decision we make at any time to propose a redemption of any such series of preferred stock will depend upon, among other things, our evaluation of our capital position and general market conditions at the time. It is likely that we would choose to exercise our optional redemption right only when prevailing interest rates have declined, which would adversely affect the ability of holders of shares of the applicable series of preferred stock to reinvest proceeds from the redemption in a comparable investment with an equal or greater yield to the yield on such series of preferred stock had their shares not been redeemed. In addition, there is no penalty or premium payable on redemption, and the market price of the shares of such series of preferred stock may not exceed the liquidation preference at the time the shares become redeemable for any reason.

Holders of the Series A Preferred Stock and Series B Preferred Stock will be subject to inflation risk.

Inflation is the reduction in the purchasing power of money resulting from the increase in the price of goods and services. Inflation risk is the risk that the inflation-adjusted, or “real,” value of an investment in preferred stock or the income from that investment will be worth less in the future. As inflation occurs, the real value of the Series A Preferred Stock and the Series B Preferred Stock, and dividends payable on such sharesshares, decline.

Holders of the Series A Preferred Stock and Series B Preferred Stock have extremely limited voting rights.

The voting rights of holders of shares of Series A Preferred Stock and Series B Preferred Stock will be extremely limited. Our common stock is the only class or series of our stock carrying full voting rights. Holders of Series A Preferred Stock or Series B Preferred Stock will have certain limited voting rights with respect to amendments to our charter that alter only the contract rights set forth therein of either (a) thesuch Seriesseries Aof Preferredpreferred Stock,stock alone, or (b) of any preferred stock (i) ranking on parity with thesuch Seriesseries Aof Preferredpreferred Stockstock with respect to dividend rights and rights upon our liquidation, dissolution or winding up, and (ii) upon which like voting rights have been conferred. Other than in these limited circumstances, holders of Series A Preferred Stock and Series B Preferred Stock will generally not have voting rights.

The amount of the liquidation preference is fixed and holders of Series A Preferred Stock and Series B Preferred Stock will have no right to receive any greater payment.

The payment due upon liquidation is fixed at the liquidation preference of $25.00 per share of Series A Preferred Stock and Series B Preferred Stock, plus an amount equal to all accrued and unpaid dividends thereon, to and including the date of payment, whether or not authorized or declared. If, in the case of our liquidation, there are remaining assets to be distributed after payment of this amount, holders of Series A Preferred Stock and Series B Preferred Stock will have no right to receive or to participate in these amounts.

Our charter, including the articles supplementary establishing each of the Series A Preferred Stock and Series B Preferred Stock, contains restrictions upon ownership and transfer of such preferred stock which may impair the ability of holders to acquire such preferred stock and the shares of our Class A common stock into which shares thereof may be converted, at the Company’s option, pursuant to the redemption at the option of the holder under certain circumstances.

Our charter, including the articles supplementary establishing each of the Series A Preferred Stock and the Series B Preferred Stock, contains restrictions on ownership and transfer of theeach Seriessuch Aseries Preferredof Stock,preferred stock, which restrictions are intended to assist us in maintaining our qualification as a REIT for U.S. federal income tax purposes. For example, to assist us in qualifying as a REIT, the articles supplementary establishing each of the Series A Preferred Stock and Series B Preferred Stock prohibits anyone from owning, or being deemed to own by virtue of the applicable constructive ownership provisions of the Code, more than 9.8% in value or number of shares, whichever is more restrictive, of the outstanding Series A Preferred Stock or Series B Preferred Stock. You should consider these ownership limitations prior to a purchase of shares of ourany Seriessuch Aseries Preferredof Stock.preferred stock.

Our ability to pay dividends on or redeem shares of the Series A Preferred Stock and the Series B Preferred Stock is limited by the laws of Maryland. Under applicable Maryland law, a Maryland corporation generally may not make a distribution (including a dividend or redemption) if, after giving effect to the distribution, the corporation would not be able to pay its debts as the debts become due in the usual course of business, or the corporation’s total assets would be less than the sum of its total liabilities plus, unless the corporation’s charter provides otherwise, the amount that would be needed, if the corporation were dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of stockholders whose preferential rights are superior to those receiving the distribution. Accordingly, we generally may not make a distribution on Series A Preferred Stock or the Series B Preferred Stock if, after giving effect to the distribution, we would not be able to pay our debts as they become due in the usual course of business or our total assets would be less than the sum of our total liabilities plus, unless the terms of such class or series provide otherwise, the amount that would be needed to satisfy the preferential rights upon dissolution of the holders of shares of any class or series of preferred stock then outstanding, if any, with preferences senior to those of the Series A Preferred Stock or the Series B Preferred Stock. Any dividends or redemption payments may be delayed or prohibited.

If our Class A common stock is no longer listed on the NYSE American or another national securities exchange, we will be required to terminate any continuous offering(s) of Series A Preferred Stock and/or Series B Preferred Stock.

The Series A Preferred Stock and Series B Preferred Stock are “covered securities” and therefore are not subject to registration under the state securities, or “Blue Sky,” regulations in the various states in which itthey may be sold due to itstheir seniority to our Class A common stock, which is listed on the NYSE American. If our Class A common stock is no longer listed on the NYSE American or another appropriate exchange, we will be required to register any offering of Series A Preferred Stock or Series B Preferred Stock in any state in which such offering was subsequently made. This would require the termination of any continuous offering(s) of Series A Preferred Stock and/or Series B Preferred Stock and could result in our raising an amount of gross proceeds that is substantially less than the amount of the gross proceeds we expect to raise if the maximum offering amounts are sold. This would reduce our ability to make additional investments and limit the diversification of our portfolio.

There is currently no public trading market for our Series A Preferred Stock or Series B Preferred Stock, and one may never exist; therefore, your ability to dispose of your shares will likely be limited.

There is no public market for our Series A Preferred Stock or our Series B Preferred Stock, and we currently have no plan to list the Series A Preferred Stock or the Series B Preferred Stock on a securities exchange or to include such shares for quotation on any national securities market. Additionally, our charter contains restrictions on the ownership and transfer of our securities, including our Series A Preferred Stock and our Series B Preferred Stock, and these restrictions may inhibit the ability to sell shares of our Series A Preferred Stock or our Series B Preferred Stock, promptly or at all. Beginning immediately upon original issuance of any share of Series A Preferred Stock or Series B Preferred Stock, the holder thereof may require us to redeem, and beginning two years from the date of original issuance, we may redeem, any such share, in each case with the redemption price payable, in our sole discretion, in cash or in equal value of shares of our Class A common stock, based on the closing price per share of our Class A common stock for the single trading day prior to the date of redemption. If we opt to pay the redemption price in shares of our common stock, holders of shares of Series A Preferred Stock or Series B Preferred Stock may receive publicly traded shares, as we currently expect to continue listing our Class A common stock on the NYSE American.

You will not have the opportunity to evaluate our future investments prior to purchasing shares of our Series A Preferred Stock or our Series B Preferred Stock.

Other than the investments disclosed in any applicable prospectus or prospectus supplement prior to your investment, you will not have the opportunity to evaluate the economic merits, transaction terms or other financial or operational data concerning our future investments that we have not yet identified prior to purchasing shares of our Series A Preferred Stock or Series B Preferred Stock. You must rely on the Manager and our Board to implement our investment policies, to evaluate our investment opportunities and to structure the terms of our investments. We may invest in any asset class, including those that present greater risk than residential assets. Because you cannot evaluate our future investments in advance of purchasing shares of our Series A Preferred Stock or Series B Preferred Stock, an offering of our Series A Preferred Stock or our Series B Preferred Stock may entail more risk than other types of offerings. This additional risk may hinder your ability to achieve your own personal investment objectives related to portfolio diversification, risk-adjusted investment returns and other objectives.

The use of the sources described above for distributions and the ultimate repayment of any liabilities incurred, as well as the payment of distributions in excess of our FFO, could adversely impact our ability to pay distributions in future periods, decrease the amount of cash we have available for operations and new investments and reduce your overall return and adversely impact and dilute the value of your investment in shares of our Series A Preferred Stock or Series B Preferred Stock. To the extent distributions in excess of current and accumulated earnings and profits (i) do not exceed a stockholder’s adjusted basis in our stock, such distributions will not be taxable to a stockholder, but rather a stockholder’s adjusted basis in our stock will be reduced; and (ii) exceed a stockholder’s adjusted tax basis in our stock, such distributions will be included in income as long-term capital gain if the stockholder has held its shares for more than one year and otherwise as short-term capital gain.

There may not be a broad market for our Class A common stock, which may cause our Class A common stock to trade at a discount and make it difficult for you to sell the Class A common stock for which your Series A Preferred Stock or Series B Preferred Stock may be redeemable at our option.

Our Class A common stock for which the shares of our Series A Preferred Stock and Series B Preferred Stock may be redeemable at our option trades on the NYSE American under the symbol “BHM.” Listing on the NYSE American or another national securities exchange does not ensure an actual or active market for our Class A common stock. The market price of our Class A common stock may fluctuate widely as a result of a number of factors, many of which are outside of our control. In addition, the stock market is subject to fluctuations in share prices and trading volumes that affect the market prices of the shares of many companies. These fluctuations in the stock market may materially and adversely affect the market price of our Class A common stock. Among the factors that could affect the market price of our common stock are:

We were incorporated as a Maryland corporation on December 16, 2021. We own and operate a portfolio of institutional residential properties including single-family homes,apartments, build-to-rent communities, single-family homes, and other residential communities located in attractive markets with a focus on the knowledge-economy and high-quality of life growth markets of the Sunbelt and Western United States. Our current investment strategy is focused on growing our portfolio of residential communities. Our principal objective is to generate attractive risk-adjusted returns on investments where we believe we can drive growth in funds from operations and net asset value by acquiring residential units, developing residential communities, and through Value-Add renovations. Our Value-Add strategy focuses on repositioning lower-quality, less current assets to drive rent growth and expand margins to increase net operating income and maximize our return on investment.

As of December 31, 2024,2025, we held twenty-threetwenty-five real estate investments, consisting of fourteennineteen consolidated investmentsinvestments, and ninefive preferred equity investments, and loanone investments.unconsolidated real estate fund investment. The twenty-threetwenty-four consolidated and preferred equity investments represent an aggregate of 5,0875,572 residential units, comprised of 3,4534,423 consolidated units, of which 170370 units are under development,development or in lease-up, and 1,6341,149 units through preferred equity and loan investments, which includes planned units and those under development. As of December 31, 2024,2025, our consolidated operating investments were approximately 91.6%90.9% occupied; excluding units classified as held for sale and down/renovation units, our consolidated operating investments were approximately 94.0%93.0% occupied.

Acquisition of Residential Communities through Delaware Statutory Trusts

We closed on the following sales: four8 units in the Golden Pacific portfolio, 28 units in the ILE portfolio, eleven19 units in the Indy-Springfield portfolio, twenty-three24 units in the Peak JV 2 portfolio, and sixty48 units in the Peak JV 3 portfolio, pursuant to the terms and conditions of multiple separate purchase and sales agreements. The ninety-eight127 units were all previously classified as held for sale and sold for an aggregate of approximately $15.3$23.5 million, subject to certain closing costs, prorations and adjustments typical in such real estate transactions,transactions. andAfter deducting the paydown of existing mortgage indebtedness encumbering 27 units in the ILE portfolio of approximately $4.9 million, the sales of the 127 units generated net proceeds of approximately $14.4$16.6 million and a gain on sales of approximately $1.8$1.7 million. The gain on sales is included in (impairment) and gain on sale of real estate investments, net on our consolidated statements of operations and comprehensive income (loss).

At December 31, 2025 and 2024, we classified an aggregate of 107 units and 167 unitsunits, respectively, as held for sale inon our consolidated balance sheets, andwith forall units reported in our scattered single-family homes segment. For the yearyears ended December 31, 2025 and 2024, we recorded an impairment of $2.1 million and $3.3 millionmillion, respectively, related to held for sale units which is included in (impairment) and gain on sale and (impairment) of real estate investments, net inon our consolidated statements of operations and comprehensive income.income (loss). The 167107 units classified as held for sale areat allDecember reported31, in our scattered single-family homes segment and2025 are included in the following portfolios: 812 units of Golden Pacific, 27 units of ILE, 3718 units of Indy-Springfield, 328 units of Peak JV 2, and all 9042 units of Peak JV 3. These units were identified based on submarket analysis and individual unit-level operational review. Real estate assets classified as held for sale are reported at the lower of their carrying value or estimated fair value less costs to sell and are presented separately within operating real estate held for sale, net on our consolidated balance sheets.

During the year ended December 31, 2024,2025, we issued 4,198,5661,704,028 shares of 6.0% Series A Redeemable Preferred Stock (the “Series A Preferred Stock”) at $25.00 per share (the “Stated Value”) under a continuous registered offering with net proceeds of approximately $92.9$36.5 million after (i) commissions, dealer manager fees andfees, sales discounts of approximately $10.6 million, and (ii) costs related to establishing the offering of Series A Preferred Stock of approximately $1.5 million.Stock. As of December 31, 2024,2025, we had issued a total of 4,635,2416,337,313 shares of Series A Preferred Stock with total net proceeds of approximately $101.1$137.6 million after commissions, dealer manager fees, sales discounts and offering costs. DuringAdditionally, theas year endedof December 31, 2024,2025, we, at the request of holders, had redeemed 6,560a total of 10,960 shares of Series A Preferred Stock through the issuance of 9,10318,653 shares of Class A common stock.stock and redeemed a total of 37,650 shares of Series A Preferred Stock for $0.9 million in cash.

In November 2023, we announced the payment of additional contingent special daily dividends with respect to our Series A Preferred Stock. This dividend was aggregated with the regular monthly dividend so as to effect a dividend rate of two percent over the average 10-Year Daily Treasury Par Yield Curve Rate with a floor of 6% annually, calculated and paid monthly. Commencing in November 2023, the Series A Preferred Stock additional contingent special dividend was declared for each month for which the Board declared the regular monthly dividend of $0.125 per outstanding share of Series A Preferred Stock. In May 2024, we announced the payment of an enhanced special dividend replacingwith therespect additionalto contingentour specialSeries dailyA dividend.Preferred Stock. The enhanced special dividend is aggregated with the regular monthly dividend so as to effect a dividend rate of the average one-month Term SOFR rate plus two percent, subject to a 6.5% minimum and an 8.5% maximum annual rate, calculated and paid monthly. Commencing in May 2024, the Series A Preferred enhanced special dividend was declared for each month for which the Board declared the regular monthly dividend of $0.125 per outstanding share of Series A Preferred Stock.

Our total stockholders’ equity decreased $8.0$10.4 million from $147.4$139.1 million as of December 31, 20232024 to $139.4$128.7 million as of December 31, 2024.2025. The decrease in our total stockholders’ equity is primarily attributable to $2.2net millionloss relatedattributable to thecommon acquisitionstockholders of noncontrolling$11.5 interests,million, preferredcommon stock dividends declared of $4.0$2.0 million, and ana net adjustment of $2.3$0.5 million for noncontrolling interest ownership in the Operating Partnership,ownership, partially offset by the acquisitions of noncontrolling interests for $2.7 million, Class A common stock issuances of $0.6 million, net of forfeitures, and comprehensive income of $0.4$0.2 million.

Note 3 “Acquisition of Real Estate”; Note 4 “Sale of Real Estate Assets and Held for Sale Real Estate Assets”; Note 5 “Investments in Real Estate”; Note 6 “Notes and Interest Receivable”; Note 7 “Investment in Unconsolidated Real Estate Fund”; and Note 78 “Preferred Equity Investments,” to our Consolidated Financial Statements provide discussion of our various purchases and sales of consolidated investments, and our loan and preferred equity investments. These transactions have resulted in material changes to the presentation of our financial statements.

The following is a summary of our preferred equity and loan investments as of December 31, 20242025:

Rental and other property revenues increased $ 7.6$19.5 million, or 18%,40%, to $48.6$68.1 million for the year ended December 31, 20242025 as compared to $41.0$48.6 million for the same prior year period. The increase was primarily due to: (i) the acquisition of 2942,149 units at Villasseven atresidential Huffmeistercommunities, duringwhich thewas firstpartially quarteroffset 2024,by 200sales of 176 units at Avenueone atresidential Timberlincommunity Parkand during225 the third quarter 2024, 408single-family units atin Amiraour atportfolio Westlysince andJanuary 350 units at Allure at Southpark during the fourth quarter1, 2024, and (ii) rental rate improvement from our active management and organic market rent growth. The increase was partially offset by the sale of 176 units at Navigator Villas and 151 single-family units in our portfolio since January 1, 2023. Our average rent per occupied unit increased $69, or 4.4%, to $1,638 as compared to $1,569 during the prior year period. Average occupancy decreased 10 basis points from 91.8% to 91.7% on a year over year basis.

Interest income from loan investments amounted to $1.6$0.6 million for the year ended December 31, 20242025 as compared to $0.1$1.6 million for the same prior year period due to the full payoff of three new loan investments,investments onesince the third quarter of which was fully paid off during the year ended December 31, 2024.

Property operating expenses increased $ 4.9$9.1 million, or 26%,38%, to $24.1$33.2 million for the year ended December 31, 20242025 as compared to $19.2$24.1 million for the same prior year period. The increase was primarily due to: (i) the acquisition of 2942,149 units at Villasseven atresidential Huffmeistercommunities, during the first quarter 2024, 200 units at Avenue at Timberlin Park during the third quarter 2024, 408 units at Amira at Westly and 350 units at Allure at Southpark during the fourth quarter 2024, and (ii) an increase in turnover expense subsequent to initial renovation completed on units in previous years. The increasewhich was partially offset by the salesales of 176 units at Navigatorone Villasresidential community and 151225 single-family units in our portfolio since January 1, 2023.2024.

Property management and asset management fees expense were $ 4.7$5.4 million for the year ended December 31, 20242025 as compared to $4.4$4.7 million in the same prior year period. Property management fees are based on a stated percentage of property revenues and asset management fees are based on a stated percentage of capital contributions or assets under management, where applicable.

General and administrative expenses amounted to $10.6$11.2 million for the year ended December 31, 20242025 as compared to $8.0$10.6 million for the same prior year period. Of the $10.6$11.2 million total expense for the year ended December 31, 2024,2025, $6.2$6.6 million related to direct costs incurred by us, while the remaining $4.4$4.0 million related to the operating expense reimbursement to our Manager, which included rent, utilities, accounting and legal services, and IT expenses. The expense reimbursement to our Manager included an increase of $2.1 million related to accounting and legal services compared to the same prior year period. Prior to the fourth quarter 2023, the Manager elected to not seek reimbursement for legal and accounting services during our first year of operations. Commencing with the operating expense reimbursement for the first quarter 2024, we paid the operating expense reimbursement to the Manager entirely in cash; prior to the first quarter 2024, we paid the full operating expense reimbursement to the Manager through the issuance of C-LTIP Units.

Weather-relatedAcquisition lossesand other transaction costs amounted to $0.2$0.4 million for the year ended December 31, 20242025 as compared to zero$0.3 million for the same prior year period. TheAcquisition 2024costs expensecan primarilyvary relatesgreatly, toand hurricanethe damagecosts incurred in Texas.any given period may be significantly different in future periods.

Depreciation and amortization expenses were $19.9$29.4 million for the year ended December 31, 20242025 as compared to $16.2$19.9 million for the same prior year period, with the increase primarily due to the acquisition of Villasseven atresidential Huffmeistercommunities duringsince theJanuary first quarter 2024, Avenue at Timberlin Park during the third quarter 2024, and Amira at Westly and Allure at Southpark during the fourth quarter1, 2024. The increase was partially offset by (i) the salesales of Navigatorone Villasresidential community and single-family units in our portfolio since January 1, 2023.2024 and (ii) in-place leases being fully amortized at one residential community prior to 2025.

Other income and expense amounted to incomeexpense of $6.6$9.5 million for the year ended December 31, 20242025 as compared to income of $0.6$6.6 million for the same prior year period. This was primarily due to (i) a $11.5$10.1 million increasedecrease in gain on sales of real estate investments and a $2.8$1.2 million increase in interestimpairment incomeon fromreal ourestate, short-term cash investments. These income sources were partially offset by(ii) a $5.0$5.9 million net increase in interest expense primarily attributable to a decrease in the fair value of the interest rate caps and swaps and an increase in the outstanding debt to $440.8 million at December 31, 2025 as compared to $381.6 million at December 31, 2024, (iii) a decrease in preferred returns of $3.2 million as our preferred equity investments decreased to $35.7 million at December 31, 2025 as compared to $82.2 million at December 31, 2024 as compareddue to $166.7the millionredemption atand/or Decembersale 31,of 2023,five preferred equity investments partially offset by two new preferred equity investments, and (iv) a $3.4$0.5 million increase in impairmentother on real estate.expenses.

As of MarchJune 31,30, 2026, our total indebtedness was approximately $428.5$433.5 million, and we may incur significant additional debt in the future. The Preferred Stock is subordinate to all our existing and future debt and liabilities and those of our subsidiaries. Our future debt may include restrictions on our ability to pay dividends to preferred stockholders in the event of a default under the debt facilities or under other circumstances. In addition, our charter currently authorizes the issuance of up to 250,000,000 shares of preferred stock in one or more classes or series, and as of MarchJune 31,30, 2026, the number of preferred shares outstanding was as follows: 6,473,0636,457,698 shares of Series A Preferred Stock and 104,288351,304 shares of Series B Preferred Stock. The issuance of additional preferred stock on parity with or senior to the Preferred Stock would dilute the interests of the holders of shares of Preferred Stock, and any issuance of preferred stock senior to the Preferred Stock, or any issuance of additional indebtedness, could affect our ability to pay dividends on, redeem or pay the liquidation preference on the Preferred Stock. We may issue preferred stock on parity with the Preferred Stock without the consent of the holders of the Preferred Stock. Other than the right of holders to cause us to redeem the Preferred Stock upon a change of control, none of the provisions relating to the Preferred Stock relate to or limit our indebtedness or afford the holders of shares thereof protection in the event of a highly leveraged or other transaction, including a merger or the sale, lease or conveyance of all or substantially all our assets or business, that might adversely affect the holders of such shares.

As of MarchJune 31,30, 2026, we held twenty-four real estate investments, consisting of eighteen consolidated investments, five preferred equity investments, and one unconsolidated real estate fund investment. The twenty-three consolidated and preferred equity investments represent an aggregate of 5,4515,420 residential units, comprised of 4,3024,271 consolidated units, of which 380410 units are under development or in lease-up, and 1,149 units through preferred equity investments, which includes planned units and those under development. As of MarchJune 31,30, 2026, our consolidated operating investments were approximately 92.0%90.2% occupied; excluding units classified as held for sale and down/renovation units, our consolidated operating investments were approximately 93.6%92.3% occupied.

During the threefirst monthshalf ended March 31,of 2026, economic uncertainty and stock market volatility continued due to a number of factors, including persistent inflation, interest rate uncertainty, concerns about tariffs, supply chain or trade disruptions and geopolitical conflict. While these factors did not have a significant adverse impact on us during the threefirst monthshalf ended March 31,of 2026, they may adversely impact us in the future. Inflation and its related impacts, including increased prices for services and goods and higher interest rates and wages, and any policy interventions by the U.S. government, could negatively impact our residents’ ability to pay rents and our results of operations. Substantially all our leases are for a term of one year or less, which we believe mitigates our exposure to inflation, by permitting us to set rents commensurate with inflation (subject to rent regulations to the extent they apply and assuming our current or prospective residents will accept and can pay commensurate increased rents, of which there can be no assurance). Inflation could outpace any increases in rent and adversely affect us. We may not be able to mitigate the effects of inflation and related impacts, and the duration and extent of any prolonged periods of inflation, and any such related adverse effects on our results of operations and financial condition are unknown at this time. Inflation may also cause increased volatility in financial markets, which could affect our ability to access the capital markets or impact the cost or timing at which we are able to do so. Inflation may also increase the costs to complete our development projects, including costs of materials, labor and services from third-party contractors and suppliers. Higher construction costs could adversely impact our investments in real estate assets and our expected yields on development projects. We continue to monitor increases in inflation and rising interest rates and resulting economic changes in credit and capital markets, as well as direct and indirect impacts resulting from the uncertainty related to, or changes to, the overall regulatory and economic environment and from geopolitical conditions and the effects of international conflicts on global markets.

Provided below is a summary of our investment activity during the threesix months ended MarchJune 31,30, 2026.

We acquired, with full ownership interest, an additional 1040 units at Parkside at Summers Corner located in Summerville, South Carolina for an aggregate purchase price of $2.6$10.3 million. Units are to be acquired in tranches as construction is completed, and as of MarchJune 31,30, 2026, we had acquired 2252 of the total 100 units we have committed to purchase.

We closed on the following sales: 1035 units in the Ballast portfolio, 1947 units in the Golden Pacific portfolio, 2529 units in the ILE portfolio, 68 units in the Indy-Springfield portfolio, 2931 units in the Peak JV 2 portfolio, and the remaining 42 units in the Peak JV 3 portfolio, pursuant to the terms and conditions of multiple separate purchase and sale agreements. The 131192 units, including 92 units classified as held for sale as of December 31, 2025, were all previously classified as held for sale and sold for an aggregate of approximately $22.0$39.8 million, subject to certain closing costs, prorations and adjustments typical in such real estate transactions. After deducting the paydown of existing mortgage indebtedness encumbering 2527 units in the ILE portfolio of approximately $3.5$3.8 million, the sales of the 131192 units generated net proceeds of approximately $17.2$33.0 million and a gain on sales of approximately $0.6$0.9 million. The gain on sales is included in gain on sale of real estate investments, net on our consolidated statements of operations and comprehensive income (loss).

We increased our original capital commitment for preferred equity interests in Canvas at Wildwood by $1.5 million, increasing our total investment to $16.1 million. As of MarchJune 31,30, 2026, we had funded $28.0$40.0 million of our $48.8 million aggregate commitment to fund capital for preferred equity interests in Archer at RiverBlue, Canvas at Wildwood, River Ford, and Sanford Marketplace.

AtAs Marchof 31,June 30, 2026 and December 31, 2025, we classified an aggregate of 5881 units and 107 units, respectively, as held for sale on our consolidated balance sheets, with all units reported in our scattered single-family homes segment. The 5881 units classified as held for sale at MarchJune 31,30, 2026 are included in the following portfolios: 1916 units of Ballast, 2245 units of Golden Pacific, 18 unitunits of ILE, 1210 units of Indy-Springfield, and 42 units of Peak JV 2. AtAs Marchof 31,June 30, 2025, we classified an aggregate of 13894 units as held for sale, with all units reported in our scattered single-family homes segment. For the three and six months ended MarchJune 31,30, 2026 and 2025, we recorded impairments of $0.6$0.5 million and $0.1 million, and $1.1 million and $0.2 million, respectively, related to held for sale units which is included in impairment of real estate investments on our consolidated statements of operations and comprehensive income (loss).

During the three months ended March 31, 2026, we issued 190,200 sharesAs of SeriesJune A Preferred Stock pursuant to the Series A Preferred Offering with net proceeds of approximately $4.2 million after commissions, dealer manager fees, sales discounts and costs related to establishing the offering of Series A Preferred Stock. Additionally, as of March 31,30, 2026, we, at the request of holders, had redeemed a total of 10,960 shares of Series A Preferred Stock through the issuance of 18,653 shares of Class A common stock and redeemed a total of 43,49058,855 shares of Series A Preferred Stock for $1.0$1.4 million in cash.

As of MarchJune 31,30, 2026, we had issued 104,288351,304 shares of Series B Preferred Stock pursuant to the Series B Preferred Offering with net proceeds of approximately $1.5$6.9 million after commissions, dealer manager fees, sales discounts and costs related to establishing the offering of Series B Preferred Stock. As of MarchJune 31,30, 2026, we had not redeemed any shares of Series B Preferred Stock.

Our total stockholders’ equity decreased $3.9$7.8 million from $128.7 million as of December 31, 2025 to $124.8$120.9 million as of MarchJune 31,30, 2026. The decrease in our total stockholders’ equity is primarily attributable to net loss attributable to common stockholders of $3.4$6.9 million and common stock dividends declared of $0.5$1.0 million.

The following is a summary of our consolidated real estate investments as of MarchJune 31,30, 2026:

The following is a summary of our consolidated operational results by reportable segment for the three and six months ended MarchJune 31,30, 2026 and 2025 ($ in thousands, except average rental rates):

The following is a summary of our preferred equity and loan investments as of MarchJune 31,30, 2026:

Three Months Ended MarchJune 31,30, 2026 Compared to Three Months Ended MarchJune 31,30, 2025

Rental and other property revenues increased $3.8$2.6 million, or 24%,16%, to $19.7$19.3 million for the three months ended MarchJune 31,30, 2026 as compared to $15.9$16.7 million for the same prior year period. The increase was primarily due to: (i) the acquisition of 897 units at three residential communities, which was partially offset by the sales of 258280 single-family units in our portfolio since JanuaryApril 1, 2025,2025. We also benefitted from a 2.2% increase in average occupancy in our residential communities, which was 94.9% during the three months ended June 30, 2026, compared to 92.7% during the second quarter of 2025. This was partially offset by a 5.9% decrease in average occupancy in our single-family homes, which was 84.6% during the three months ended June 30, 2026, compared to 90.5% during the second quarter of 2025. The decrease in average occupancy in our single-family homes was lower due to units at Ballast and (ii)Golden rentalPacific rateintentionally improvementheld fromvacant ourin activepreparation managementfor and organic market rent growth.sale.

Interest income from loan investments amounted to zero for the three months ended MarchJune 31,30, 2026 as compared to $0.5$0.1 million for the same prior year period due to the full payoff of twoa loan investmentsinvestment sincein the firstsecond quarter of 2025.

Property operating expenses increased $1.4$1.6 million, or 18%,20%, to $9.1$9.8 million for the three months ended MarchJune 31,30, 2026 as compared to $7.7$8.2 million for the same prior year period. The increase was primarily due to the acquisition of 897 units at three residential communities, which was partially offset by sales of 258280 single-family units in our portfolio since JanuaryApril 1, 2025.

Property management and asset management fee expenses were $1.6$1.3 million for the three months ended MarchJune 31,30, 2026 as compared to $1.3 million in the same prior year period. Property management fees are based on a stated percentage of property revenues and asset management fees are based on a stated percentage of capital contributions or assets under management, where applicable.

General and administrative expenses amounted to $3.1$2.5 million for the three months ended MarchJune 31,30, 2026 as compared to $3.1$2.7 million for the same prior year period. Of the $3.1$2.5 million total expense in the firstsecond quarter 2026, $2.1$1.5 million relates to direct costs incurred by us, while the remaining $1.0 million relates to the operating expense reimbursement to our Manager, which includes rent, utilities, accounting and legal services, and IT expenses.

Management fees to related party amounted to $2.7 million for the three months ended MarchJune 31,30, 2026 as compared to $2.5$2.6 million for the same prior year period. The increase was due to an increase in equity primarily from our Series A and Series B Preferred Offerings. For the firstsecond quarter of 2026, we will pay $0.2 million of the base management fee in C-LTIP Units with the remainder in cash.

Acquisition and other transaction costs were minimal$0.6 million for the three months ended MarchJune 31,30, 2026 and amounted to $0.1 million for the same prior year period. Acquisition costs can vary greatly, and the costs incurred in any given period may be significantly different in future periods.periods Weather-related losses amounted to $0.2 million for the three months ended June 30, 2026 as compared to less than $0.1 million for the same prior year period. The 2026 expense relates to damage at two of our scattered single-family home investments.

Impairment of real estate investments amounted to $0.6$0.5 million for the three months ended MarchJune 31,30, 2026 as compared to $0.1 million for the same prior year period. An impairment loss is recognized when we determine that the carrying value of operating and/or held for sale real estate, and related intangible assets, exceeds their estimated fair value. Impairment amounts recorded during the three months ended MarchJune 31,30, 2026 and 2025 relate to held for sale single-family units.

Depreciation and amortization expenses were $8.9$7.9 million for the three months ended MarchJune 31,30, 2026 as compared to $7.5$7.2 million for the same prior year period, with the increase primarily due to the acquisition of threetwo residential communities since Januarythe 1,second quarter of 2025. The increase was partially offset by (i) the sales of single-family units in our portfolio since Januarythe 1,second quarter of 2025 and (ii) in-place leases being fully amortized at twothree residential communities prior to the second quarter of 2026.

Income tax expense amounted to $0.1 millionzero for the three months ended MarchJune 31,30, 2026 as compared to $0.3$0.6 million for the same prior year period. ThisThe decrease was primarily attributabledue to lower income tax expense recorded in the prior year period related to twoour preferred equity investments that were sold during 2025.investments.

Our ability to access capital on favorable terms as well as to use cash from operations to continue to meet our short-term liquidity needs could be affected by various risks and uncertainties, including the risks detailed in Part I, Item 1A titled “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2025 as filed with the SEC on February 27, 2026. While consolidated occupancy excluding units classified as held for sale and down/renovation units remains strong at 93.6%92.3% as of MarchJune 31,30, 2026, in future periods we may experience reduced levels of tenant retention, and reduced foot traffic and lease applications from prospective tenants.

In October 2024, we launched a program (collectively, the “DST Program”) to sponsor and raise capital in private placement offerings of beneficial interests in specific Delaware statutory trusts (each, a “DST”) holding real properties (each, a “DST Property”). We expect that the DST Program will give us the opportunity to expand and diversify our capital raise strategies by offering what we believe to be an attractive investment product for investors that may be seeking replacement properties to complete like-kind exchange transactions and create future pipeline acquisition opportunities. In conjunction with the DST Program, our Operating Partnership has issued certain non-interest bearing demand notes in relation to its role as the master tenant (the “Master Tenant”) under certain master leases (the “Master Leases”) related to the DST Program (the “Demand Notes”), which could be called upon if the net operating cash flow is insufficient to pay the rent required under the Master Leases (subject to limited deferral rights) or satisfy its other obligations under the Master Leases. As compensation for the Operating Partnership’s obligations under the Master Leases, we will share in the rent paid by the tenants of the underlying properties in accordance with the waterfall set forth in the applicable Master Lease. As of MarchJune 31,30, 2026, we had four DST Properties (Amira at Westly, District at Parkview, Skytop Apartments and Southern Pines Reserve) in our DST Program and raised net offering proceeds of $139.4$149.8 million, issued demand notes of $2.3 million, and had $308.0$305.8 million in total net real estate investments associated with the DST Program. The Amira at Westly DST and Skytop Apartments DST had been fully subscribed with equity from individual investors as of MarchJune 31,30, 2026.

The following table summarizes our contractual obligations, and estimated future required payments on these obligations, related to our mortgage notes secured by our properties as of MarchJune 31,30, 2026 (amounts in thousands). The revolving credit facility had no outstanding balance at the end of the period.

As of MarchJune 31,30, 2026, we had contractual commitments to fund future cash obligations in certain of our preferred equity investments in the aggregate of $20.8$8.8 million. In addition, we have two consolidated residential communities (Abode Wendell Falls and Harmony at Clear Creek) under construction comprised of an aggregate of 358 units. As of MarchJune 31,30, 2026, we estimate that the remaining costs associated with the completion of construction for these two residential communities will be approximately $111.3$107.9 million. We intend to finance these costs through a combination of available cash, proceeds from construction loans, and preferred equity capital contributions. We also committed to acquire an aggregate of 100 residential community units known as Parkside at Summers Corner. We expect acquisitions to occur in tranches as construction is completed, and as of MarchJune 31,30, 2026, 7848 units remain to be acquired, representing an aggregate purchase price of $20.0$12.3 million. During the second quarter of 2026, two of our scattered single-family home portfolios incurred weather-related losses related to hailstorms in Illinois and Missouri. An assessment of the damage is ongoing. As of June 30, 2026, we expect that the total cost to repair all damage, which primarily includes roof and siding replacement, will be approximately $1.5 million, of which $0.2 million was incurred and recognized during the second quarter. A portion of the future costs are expected to be recognized as repair costs in weather-related losses with the remainder capitalized within buildings and improvements.

On February 10, 2026, the Board authorized a new stock repurchase plan, effective March 1, 2026, for the repurchase, from time to time, of up to an aggregate of $10 million of our outstanding shares of Class A common stock, with such repurchases to be conducted in accordance with the requirements of Rule 10b-18 of the Exchange Act of 1934 (the “Exchange Act”) and subject to Rule 10b-5 of the Exchange Act. The repurchase plan has a term of one year and ends on February 28, 2027, and may be discontinued at any time. The extent to which we repurchase shares of our Class A common stock under the repurchase plan, and the timing of any such repurchases, depends on a variety of factors including general business and market conditions and other corporate considerations. We expect that any repurchases of our Class A common stock will be through open market transactions, subject to market conditions, certain price limitations and other conditions established under the plan. Open market repurchases will be structured to occur in conformity with the method, timing, price and volume requirements of Rule 10b-18 of the Exchange Act. As of MarchJune 31,30, 2026, we had not made any repurchases of our Class A common stock.

As we did in the threesix months ended MarchJune 31,30, 2026, we may also selectively sell consolidated operating assets at appropriate times, which would be expected to generate cash sources for both our short-term and long-term liquidity needs.

We may also meet our long-term liquidity needs through borrowings from a number of sources, either at the corporate or project level. In October 2024, we entered into a credit agreement related to our DST Program with KeyBank National Association and a syndicate of other lenders which provides for a revolving loan with a maximum commitment amount of $50 million. We believe this revolving credit facility will serve as our primary debt source that will continue to enable us to deploy our capital more efficiently and provide capital structure flexibility as we grow our asset base. The revolving credit facility contains certain financial and operating covenants. As of MarchJune 31,30, 2026, we were in compliance with all covenants under our credit facility. We will continue to monitor the debt markets, including Fannie Mae and Freddie Mac, and as market conditions permit, access borrowings that are advantageous to us.

We expect to maintain distributions paid on our Series A Preferred Stock and Series B Preferred Stock in accordance with the terms which require monthly dividends. While our distributions through MarchJune 31,30, 2026 have been paid from cash flow from operations and in accordance with our policy, distributions in the future may be paid from cash flow from operations, proceeds from the offering of our Series B Preferred Stock, proceeds from the DST Program, the sales of assets, and additional sources, such as from borrowings.

As of MarchJune 31,30, 2026, we have off-balance sheet arrangements that may have a material effect on our financial condition, revenues or expenses, results of operations, liquidity, capital resources or capital expenditures. As of MarchJune 31,30, 2026, we entered into five joint venture agreements which are classified as available-for-sale debt securities.

As of MarchJune 31,30, 2026, we held twenty-four real estate investments, consisting of eighteen consolidated investments, five preferred equity investments, and one unconsolidated real estate fund investment, with the twenty-three consolidated and preferred equity investments representing an aggregate of 5,4515,420 residential units. During the threesix months ended MarchJune 31,30, 2026, net cash used in operating activities was $8.5$5.7 million after net loss of $10.3$19.3 million was adjusted for the following:

During the threesix months ended MarchJune 31,30, 2026, net cash providedused byin investing activities was $6.4$3.4 million due to the following:

During the threesix months ended MarchJune 31,30, 2026, net cash usedprovided inby financing activities was $0.8$9.4 million due to the following:

The following table summarizes our total capital expenditures for the threesix months ended MarchJune 31,30, 2026 and 2025 (amounts in thousands):

The table below presents our calculation of FFO and CFFO for the three and six months ended MarchJune 31,30, 2026 and 2025 ($ in thousands):