Business description of NexPoint-Residential-Trust-Inc

NEXPOINT RESIDENTIAL TRUST, INC.

Form 10-K

Year Ended December 31, 2015

INDEX

				Page
				ii



Item 1.				1
Item 1A.				13
Item 1B.				33
Item 2.				33
Item 3.				35
Item 4.				35



Item 5.				35
Item 6.				37
Item 7.				38
Item 7A.				52
Item 8.				53
Item 9.				53
Item 9A.				53
Item 9B.				54



Item 10.				54
Item 11.				54
Item 12.				54
Item 13.				54
Item 14.				54



Item 15.				54
				F-1

This annual report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties. In particular, statements relating to our liquidity and capital resources, the performance of our properties and results of operations contain forward-looking statements. Furthermore, all of the statements regarding future financial performance (including market conditions and demographics) are forward-looking statements. We caution investors that any forward-looking statements presented in this annual report are based on management’s beliefs and assumptions made by, and information currently available to, management. When used, the words “anticipate,” “believe,” “expect,” “intend,” “may,” “might,” “plan,” “estimate,” “project,” “should,” “will,” “would,” “result” and similar expressions that do not relate solely to historical matters are intended to identify forward-looking statements. You can also identify forward-looking statements by discussions of strategy, plans or intentions.

Forward-looking statements are subject to risks, uncertainties and assumptions and may be affected by known and unknown risks, trends, uncertainties and factors that are beyond our control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. We caution you therefore against relying on any of these forward-looking statements.

Some of the risks and uncertainties that may cause our actual results, performance, liquidity or achievements to differ materially from those expressed or implied by forward-looking statements include, among others, the following:

unfavorable changes in market and economic conditions in the United States and globally and in the specific markets where our properties are located;

risks associated with ownership of real estate;

limited ability to dispose of assets because of the relative illiquidity of real estate investments;

intense competition in the real estate market that, combined with low residential mortgage rates that could encourage potential renters to purchase residences rather than lease them, may limit our ability to acquire or lease and re-lease property or increase or maintain rent;

risks associated with our ability to issue additional debt or equity securities in the future;

failure of acquisitions and development projects to yield anticipated results;

risks associated with our strategy of acquiring value-enhancement multifamily properties, which involves greater risks than more conservative investment strategies;

the lack of experience of NexPoint Real Estate Advisors, L.P. (our “Adviser”) in operating under the constraints imposed by REIT requirements;

loss of key personnel;

the risk that we may not replicate the historical results achieved by other entities managed or sponsored by affiliates of our Adviser, members of our Adviser’s management team or by Highland Capital Management, L.P. (our “Sponsor” or “Highland”) or its affiliates;

risks associated with our Adviser’s ability to terminate the Advisory Agreement;

our ability to change our major policies, operations and targeted investments without stockholder consent;

the substantial fees and expenses we will pay to our Adviser and its affiliates;

risks associated with the potential internalization of our management functions;

the risk that we may compete with other entities affiliated with our Sponsor or property manager for tenants;

conflicts of interest and competing demands for time faced by our Adviser, our Sponsor and their officers and employees;

our dependence on information systems;

lack of or insufficient amounts of insurance;

contingent or unknown liabilities related to properties or businesses that we have acquired or may acquire;

high costs associated with the investigation or remediation of environmental contamination, including asbestos, lead-based paint, chemical vapor, subsurface contamination and mold growth;

the risk that our environmental assessments may not identify all potential environmental liabilities and our remediation actions may be insufficient;

high costs associated with the compliance with various accessibility, environmental, building and health and safety laws and regulations, such as the ADA and FHA;

risks associated with our high concentrations of investments in the Southeastern and Southwestern United States;

risks associated with limited warranties we may obtain when purchasing properties;

exposure to decreases in market rents due to our short-term leases;

risks associated with operating through joint ventures and funds;

Business description of NexPoint-Residential-Trust-Inc from last 10-k form