What changed in this filing

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Item 1A. Risk Factors

2026-02-27 compared with 2025-03-20 · 161 added, 139 removed, 978 unchanged (23% of the section changed)

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Many of our costs, such as operating expenses and general and administrative expenses, interest expense and real estate acquisition and construction costs, could be adversely impacted by periods of heightened inflation.

Inflation in the United States remained elevated throughout 2023 and 2024 and may continue to remain high in the future.

Inflation in the United States accelerated rapidly in the first half of 2023 and remained elevated throughout 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.

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-basis points in September 2024, 25-basis points in November 2024 and 25-basis points in December 2024, there can be no assurances that interest rates will not rise again.

While the Federal Reserve reduced interest rates by an aggregate of 100-basis points during 2024 and by an aggregate of 75-basis points during 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.

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As a result, our business, financial condition, results of operations, cash flows, liquidity and ability to satisfy our debt service obligations and to pay dividends and distributions to security holders could be adversely affected over time.

Development, redevelopment, and construction risks could affect our profitability.

Development and redevelopment are subject to numerous risks, including the following:

● we may be unable to obtain, or experience delays in obtaining, necessary zoning, occupancy, or other required governmental or third-party permits and authorizations, which could result in increased costs or the delay or abandonment of opportunities;

● we may incur costs that exceed our original estimates due to increased material, labor, or other factors and costs, such as those resulting from litigation, program changes, inflation, interest rate increases, the implementation of tariffs, or supply chain disruptions;

● we may be unable to complete construction and lease-up of a residential community on schedule, including as a result of global supply chain disruptions, resulting in increased construction and financing costs and a decrease in expected rental revenues;

● occupancy rates and rents at a residential community may fail to meet our expectations for a number of reasons, including changes in market and economic conditions beyond our control and the development of competing communities;

● we may be unable to obtain financing, including construction loans, with favorable terms, or at all, which may cause us to delay or abandon an opportunity;

● we may abandon opportunities that we have already begun to explore, or stop projects we have already commenced, for a number of reasons, including changes in local market conditions or increases in construction or financing costs, and, as a result, we may fail to recover costs already incurred in exploring those opportunities;

● we may incur liabilities to third parties during the development or redevelopment process, and we may be faced with claims for construction defects after a property has been developed;

● we may face opposition from local community or political groups with respect to the development, construction, or operations at a particular site;

● health and safety incidents or other accidents on site may occur during development;

● unexpected events or circumstances may arise during the development or redevelopment process that affect the timing of completion and the cost and profitability of the development or redevelopment;

● loss of a key member of a development team could adversely affect our ability to deliver developments and redevelopments on time and within our budget;

● government restrictions, standards or regulations intended to reduce greenhouse gas emissions and potential climate change impacts may increase in the future in the form of restrictions or additional requirements on development in certain areas;

● environmental, social, governance and other sustainability matters and our responses to these matters could impact development.

Some of these development risks may be heightened given current uncertain and potentially volatile market conditions.

If market volatility causes economic conditions to remain unpredictable or to trend downwards, we may not achieve our expected returns on residential communities under development and we could lose some or all of our investments in those properties.

In addition, the lead time required to develop, construct, and lease-up a development property may increase, which could adversely impact our projected returns or result in a termination of the development project.

The construction of real estate projects entails unique risks, including risks that the project will fail to conform to building plans, specifications, and timetables.

These failures could be caused by labor strikes, weather, government regulations, and other conditions beyond our control.

In addition, we may become liable for underinsured injuries and accidents occurring during the construction process.

Our current portfolio primarily consists of interests in residential properties, located primarily in markets in the Sunbelt and Western United States.

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If there is a downturn in the economy or an oversupply of or decrease in demand for residential properties in these markets, our business could be materially adversely affected to a greater extent than if we owned a real estate portfolio that was more diversified in terms of both geography and industry focus.

We are employing a business model with a limited track record, which may make our business difficult to evaluate.

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.

An aspect of our business model has a limited track record, which may make our business difficult to evaluate.

One aspect of our business strategy involves managing a large number of 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.

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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.

Since late 2023, legislation has been introduced that could, if enacted, discourage or deter the purchase of single-family properties by entities owned or controlled by

institutional investors.

It is unclear whether these or similar changes will be enacted and, if enacted, how soon any such changes could take effect.

If enacted, such changes could have an adverse impact on our business and financial results.

In addition, there can be no assurance that any other future legislative or regulatory changes will not be proposed or enacted that could adversely affect our business and financial results.

On January 20, 2026, President Trump signed an executive order directing federal agencies to take steps to limit the purchase of single-family properties by “large institutional investors”.

The 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, nor does it compel the sale of existing portfolios.

For these reasons, we currently do not anticipate the executive order, nor any resulting legislation or enforcement, to have a material impact on our business.

However, the scope and impact of the executive order remains subject to further guidance from the current administration, and there can be no assurance that such guidance, and/or any future legislative or regulatory changes will not be proposed or enacted, including those governing the types of investments we are permitted to make, that could adversely affect our business and financial results.

A significant number of our residential properties are part of HOAs and we and our residents are subject to the rules and regulations of such HOAs, which are subject to change and which may be arbitrary or restrictive, and violations of such rules may subject us to additional fees and penalties and litigation with such HOAs, which would be costly.

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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 common stock to decline.

We may not be able to effectively control the timing and costs relating to the renovation and maintenance of our properties, which may adversely affect our operating results and ability to make distributions to our stockholders.

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In addition, such downturns could result in reduced demand for residential rental properties, which may reduce home prices and make home purchases more affordable as an alternative to renting, which also may materially adversely reduce the demand for residential rental properties;

● tariffs imposed by the current administration and/or other countries may cause further inflationary pressures in the economy, uncertainty and volatility of debt and equity markets, and a slowdown in the U.S.

and global economies.

Such tariffs are likely to increase construction costs and further reduce already constrained new supply starts, which could adversely impact the timing of actual completion and/or stabilization of our build-to-rent communities, including potential delays due to supply shortages and labor shortages;

● the rate of household formation or population growth in our target markets or a continued or exacerbated economic slow-down experienced by the local economies where our properties are located or by the real estate industry generally may result in changes in supply of or demand for our residential rental properties;

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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 common stock to decline.

Our investments will be dependent on tenants for revenue, and tenant failure to pay in a timely manner could reduce our revenues from rents, resulting in the decline in the value of your investment.

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If we do not attain and maintain effective internal control over financial reporting or implement controls sufficient to provide reasonable assurance with respect to the preparation and fair presentation of our financial statements, we could be unable to file accurate financial reports on a timely basis, and our reputation, results of operations and stock price could be materially adversely affected.

We 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 million revolving credit facilities, 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 $50 million revolving credit facility, the net proceeds of offerings of our securities, and the proceeds from our DST Program.

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.

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The ownership by our executive officers of interests representing a significant portion of our common stock on a fully diluted basis could allow our executive officers to exert significant influence over our company in a manner that may not be in the best interests of our other stockholders.

As of March 6, 2025, our executive officers beneficially owned interests representing approximately 24.6% 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 March 6, 2025, the aggregate voting power of our executive officers represented approximately 9.3% of the total voting power of our outstanding Class A common stock and Class C common stock.

As of February 20, 2026, our executive officers beneficially owned interests representing approximately 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 February 20, 2026, the aggregate voting power of our executive officers represented approximately 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.

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In addition, if we are unable to service our debt payments, our lenders may foreclose on our interests in the real property that secures the loans we have entered into.

As of December 31, 2024, we had approximately $177 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.

As of December 31, 2025, we had approximately $115 million of mortgages payable 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.

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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.

Kamfar, Ruddy, MacDonald, 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.

Kamfar, Ruddy, MacDonald, 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.

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Moreover, even if we ultimately succeed in recovering from Bluerock Residential or New LLC any amounts for which we were held liable by such third parties, any indemnification received may be insufficient to fully offset the financial impact of such liabilities, or we may be temporarily required to bear these losses while seeking recovery from Bluerock Residential and/or New LLC, which may have a material adverse effect on our business, financial condition and results of operations.

Risks Related to Offerings of our Series A 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.

The dividends payable by us on the Series A Preferred Stock may exceed our current and accumulated earnings and profits as determined for U.S.

Risks Related to Offerings of our Series A Preferred Stock and/or our 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 then, to the extent of any excess over the stockholder’s adjusted tax basis in the stockholder’s Series A 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 subsequent sales (including cash redemptions) of such stockholder’s Series A 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 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.

We may not be able to pay dividends on a regular quarterly basis in the future on our Series A Preferred Stock.

We intend to contribute the entire net proceeds from any offerings of our Series A Preferred Stock to our Operating Partnership in exchange for Series A Preferred Units that have substantially the same economic terms as the Series A Preferred Stock.

Because we conduct substantially all of our operations through our Operating Partnership, our ability to pay dividends on the Series A 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.

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 the offerings of all such series of our preferred stock 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 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.

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 could be subordinated and/or diluted by the incurrence of additional debt, the issuance of additional shares of preferred stock, including additional shares of Series A Preferred Stock, and by other transactions.

As of December 31, 2024, our total indebtedness was approximately $381.6 million, which includes $121.0 million outstanding under our revolving credit facilities.

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 preferred stock, including additional shares of any or all of the foregoing series of preferred stock, and by other transactions.

As of December 31, 2025, our total indebtedness was approximately $440.8 million.

We may incur significant additional debt in the future.

The Series A Preferred Stock is subordinate to all of our existing and future debt and liabilities and those of our subsidiaries.

Each 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.

As of December 31, 2024, we had issued and outstanding 4,628,681 shares of Series A Preferred Stock.

The issuance of additional preferred stock on parity with or senior to the Series A Preferred 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 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 without the consent of the holders of shares of Series A Preferred Stock.

Other than the right of holders to cause us to redeem the Series A Preferred Stock upon a Change of Control (as defined below), none of the provisions relating to the Series A 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 exercises their redemption option we may redeem such shares of Series A 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 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 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.

The Series A Preferred Stock has not been rated.

We have not sought to obtain a rating for the Series A 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 Series A Preferred Stock.

In addition, we may elect in the future to obtain a rating of the Series A Preferred Stock, which could adversely impact the market price of the applicable series.

As of December 31, 2025, we had issued and outstanding 6,288,703 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 foregoing series of preferred 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 preferred stock of 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 option, 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 or Series B Preferred Stock (as applicable).

The Series A Preferred Stock and 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.

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.

It is also possible that the Series A Preferred Stock will never be rated.

Dividend payments on the Series A Preferred Stock are not guaranteed.

Although dividends on the Series A Preferred Stock are cumulative, our Board must approve the actual payment of such distributions.

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 projected cash flows;

● the need to make payments on our indebtedness;

● poor historical or project cash flows;

● the need to make payment on our indebtedness;

● concluding that payment of distributions on any or all such series of preferred stock would cause us to breach the terms of any indebtedness or other instrument or agreement;

● determining that the payment of distributions would violate applicable law regarding unlawful distributions to stockholders.

We intend to use the net proceeds from any offerings of the Series A 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 to fund future investments and for other general corporate and working capital purposes.

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 will not have the opportunity as part of their investment decision to assess whether the net proceeds are being used appropriately.

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.

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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 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 to receive dividends or other amounts on their shares of Series A Preferred Stock.

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

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.

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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 might be adversely affected, and stockholders entitled to a redemption payment may not receive payment.

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

We may voluntarily redeem some or all of the Series A Preferred Stock, for cash or equal value of shares of our Class A common stock, two years after the issuance date.

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, 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, 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 may be lower than the return previously obtained from the investment in such shares.

Our ability to redeem the Series A 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 to be redeemed, we may voluntarily redeem some or all of such Series A Preferred Stock for cash or shares of our Class A common stock, in our sole discretion.

Any redemption of Series A Preferred Stock may occur at a time that is unfavorable to holders of the Series A Preferred Stock.

We may have an incentive to redeem the Series A 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.

The trading price of the Class A common stock, for which the Series A Preferred Stock may be redeemed, may be volatile and may expose investors to additional volatility risk.

Holders of Series A 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 may be redeemed by us at our option, either in whole or in part, only on or after two years from the issuance date.

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.

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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 will be subject to inflation risk.

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 dividends payable on such shares decline.

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

The voting rights of holders of shares of Series A Preferred Stock will be extremely limited.

As inflation occurs, the real value of the Series A Preferred Stock and the Series B Preferred Stock, and dividends payable on such shares, 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 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) the Series A Preferred Stock, or (b) of any preferred stock (i) ranking on parity with the Series A Preferred Stock 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 will generally not have voting rights.

The amount of the liquidation preference is fixed and holders of Series A 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, 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 will have no right to receive or to participate in these amounts.

Our charter, including the articles supplementary establishing the Series A 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 the Series A Preferred Stock, contains restrictions on ownership and transfer of the Series A Preferred Stock, which restrictions are intended to assist us in maintaining our qualification as a REIT for U.S.

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) such series of preferred stock alone, or (b) of any preferred stock (i) ranking on parity with such series of preferred stock 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 each such series of 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 the Series A 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.

You should consider these ownership limitations prior to a purchase of shares of our Series A Preferred Stock.

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 any such series of preferred stock.

Our ability to pay dividends or redeem shares is limited by the requirements of Maryland law.

Our ability to pay dividends on or redeem shares of the Series A Preferred Stock is limited by the laws of Maryland.

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 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.

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.

The Series A 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 it may be sold due to its 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 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 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.

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 they may be sold due to their 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, and one may never exist;

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, and we currently have no plan to list the Series A 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 these restrictions may inhibit the ability to sell shares of our Series A Preferred Stock, promptly or at all.

Beginning immediately upon original issuance of any share of Series A 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 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.

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.

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.

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, an offering of our Series A Preferred Stock may entail more risk than other types of offerings.

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.

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Using certain of these sources may result in a liability to us, which would require a future repayment.

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.

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 may be redeemable at our option.

Our Class A common stock for which the shares of our Series A 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.

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.

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● domestic and international economic factors unrelated to our performance.

Accordingly, an actual or active market for our Class A common stock may not be maintained, the prices at which shares of our Class A common stock trade may fluctuate significantly, the market for our Class A common stock may not be liquid, the holders of our Class A common stock may be unable to sell their shares of our Class A common stock, and the prices that may be obtained following the sale of our Class A common stock upon the redemption of your Series A Preferred Stock may not reflect the underlying value of our assets and business.

Shares of Series A Preferred Stock may be redeemed for shares of our Class A common stock, which rank junior to the Series A Preferred Stock with respect to dividends and upon liquidation.

The holders of shares of Series A Preferred Stock may require us to redeem such shares, 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.

Accordingly, an actual or active market for our Class A common stock may not be maintained, the prices at which shares of our Class A common stock trade may fluctuate significantly, the market for our Class A common stock may not be liquid, the holders of our Class A common stock may be unable to sell their shares of our Class A common stock, and the prices that may be obtained following the sale of our Class A common stock upon the redemption of your Series A Preferred Stock or Series B Preferred Stock may not reflect the underlying value of our assets and business.

Shares of Series A Preferred Stock or Series B Preferred Stock may be redeemed for shares of our Class A common stock, which rank junior to the Series A Preferred Stock and Series B Preferred Stock with respect to dividends and upon liquidation.

The holders of shares of Series A Preferred Stock or Series B Preferred Stock may require us to redeem such shares, 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.

We may opt to pay the redemption price in shares of our Class A common stock.

The rights of the holders of shares of Series A Preferred Stock rank senior to the rights of the holders of shares of our common stock as to dividends and payments upon liquidation.

Unless full cumulative dividends on shares of our Series A Preferred Stock for all past dividend periods have been declared and paid (or set apart for payment), we will not declare or pay dividends with respect to any shares of our common stock for any period.

Upon liquidation, dissolution or winding up of our company, the holders of shares of our Series A Preferred Stock are entitled to receive a liquidation preference of $25.00 per share, plus an amount equal to all accrued and unpaid dividends, in each case prior and in preference to any distribution to the holders of shares of our common stock or any other class of our equity securities.

We will be able to call shares of Series A Preferred Stock for redemption under certain circumstances without the consent of the holder.

We will have the ability to call the outstanding shares of Series A Preferred Stock after two years from the date of original issuance of such shares of Series A Preferred Stock.

At that time, we will have the right to redeem, at our option, the outstanding shares of Series A Preferred Stock, in whole or in part, at 100% of the Stated Value per share, plus an amount equal to any accrued and unpaid dividends.

Our requirement to redeem the Series A Preferred Stock in the event of a Change of Control may, in either case, deter a change of control transaction otherwise in the best interests of our stockholders.

Upon the occurrence of a Change of Control (as defined below) with respect to the Series A Preferred Stock, we will be required to redeem all outstanding shares of the Series A Preferred Stock, in whole, within 60 days after the first date on which such Change of Control occurred, in cash at a redemption price of $25.00 per share of Series A Preferred Stock;

The rights of the holders of shares of Series A Preferred Stock and Series B Preferred Stock rank senior to the rights of the holders of shares of our common stock as to dividends and payments upon liquidation.

Unless full cumulative dividends on shares of our Series A Preferred Stock and Series B Preferred Stock for all past dividend periods have been declared and paid (or set apart for payment), we will not declare or pay dividends with respect to any shares of our common stock for any period.

Upon liquidation, dissolution or winding up of our company, the holders of shares of our Series A Preferred Stock and Series B Preferred Stock are entitled to receive a liquidation preference of $25.00 per share, plus an amount equal to all accrued and unpaid dividends, in each case prior and in preference to any distribution to the holders of shares of our common stock or any other class of our equity securities.

We will be able to call shares of Series A Preferred Stock and Series B Preferred Stock for redemption under certain circumstances without the consent of the holder.

We will have the ability to call the outstanding shares of each of the Series A Preferred Stock and the Series B Preferred Stock after two years from the date of original issuance of such shares.

At that time, we will have the right to redeem, at our option, the outstanding shares of Series A Preferred Stock and/or Series B Preferred Stock, in whole or in part, at 100% of the Stated Value per share, plus an amount equal to any accrued and unpaid dividends.

Our requirement to redeem the Series A Preferred Stock and the Series B Preferred Stock in the event of a Change of Control may, in either case, deter a change of control transaction otherwise in the best interests of our stockholders.

Upon the occurrence of a Change of Control (as defined below) with respect to either the Series A Preferred Stock or the Series B Preferred Stock, we will be required to redeem all outstanding shares of the Series A Preferred Stock or Series B Preferred Stock (as applicable), in whole, within 60 days after the first date on which such Change of Control occurred, in cash at a redemption price of $25.00 per share of Series A Preferred Stock or Series B Preferred Stock;

plus an amount equal to all accrued and unpaid dividends, if any, to and including the redemption date.

The mandatory redemption feature of each share of the Series A Preferred Stock in connection with a Change of Control may each have the effect of inhibiting a third party from making an acquisition proposal for us, or of delaying, deferring or preventing a change of control of us, under circumstances that otherwise could provide the holders of our common stock and/or Series A Preferred Stock with the opportunity for liquidity or the opportunity to realize a premium over the then-current market price or that stockholders may otherwise believe is in their best interests.

A “Change of Control” is when after the initial issuance of the Series A Preferred Stock any of the following has occurred and is continuing:

The mandatory redemption feature of each share of the Series A Preferred Stock or Series B Preferred Stock in connection with a Change of Control may each have the effect of inhibiting a third party from making an acquisition proposal for us, or of delaying, deferring or preventing a change of control of us, under circumstances that otherwise could provide the holders of our common stock, Series A Preferred Stock and/or Series B Preferred Stock with the opportunity for liquidity or the opportunity to realize a premium over the then-current market price or that stockholders may otherwise believe is in their best interests.

A “Change of Control” is when, after the initial issuance of (i) the Series A Preferred Stock (for purposes of the Series A Preferred Stock), or (ii) the Series B Preferred Stock (for purposes of the Series B Preferred Stock), any of the following has occurred and is continuing:

● a “person” or “group” within the meaning of Section 13(d) of the Exchange Act, other than our Company, its subsidiaries, and its and their employee benefit plans, has become the direct or indirect “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of our common equity representing more than 50% of the total voting power of all outstanding shares of our common equity that are entitled to vote generally in the election of directors, with the exception of (A) the formation of a holding company, or (B) immediately prior to such transaction, such person or group, together with its or their related entities, including, without limitation, any trust established for the benefit of such person or any member of such group or any family member thereof (collectively, an “Ownership Group”), owned sufficient interests in the Operating Partnership such that the exercise by all or any members of such Ownership Group of the Common Unit Redemption Right (as defined in Section 8.04(a) of the Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership, as amended) with respect to such interests would result in all or any members of such Ownership Group (individually or collectively) becoming the direct or indirect beneficial owner of our common equity representing more than 50% of the total voting power of all outstanding shares of Voting Stock;

● consummation of any share exchange, consolidation or merger of our Company or any other transaction or series of transactions pursuant to which our common stock will be converted into cash, securities or other property, (1) other than any such transaction where the shares of our common stock outstanding immediately prior to such transaction constitute, or are converted into or exchanged for, a majority of the common stock of the surviving person or any direct or indirect parent company of the surviving person immediately after giving effect to such transaction, and (2) expressly excluding any such transaction preceded by our Company’s acquisition of the capital stock of another company for cash, securities or other property, whether directly or indirectly through one of our subsidiaries, as a precursor to such transactions;

● at least a majority of our Board ceases to be constituted of directors who were either (A) a member of our Board on October 6, 2022, for purposes of the Series A Preferred Stock, or (B) who became a member of our Board subsequent to such applicable date and whose appointment, election or nomination for election by our stockholders was duly approved by a majority of the Continuing Directors on our Board at the time of such approval, either by a specific vote or by approval of the proxy statement issued by our Company on behalf of our Board in which such individual is named as nominee for director (“Continuing Directors”).

In addition, if we experience a Change of Control, there can be no assurance that we would have sufficient financial resources available to satisfy our obligations to redeem the Series A Preferred Stock, and any guarantees or indebtedness that may be required to be repaid or repurchased as a result of such event.

Our failure to redeem the Series A Preferred Stock could have material adverse consequences for us and the holders of the Series A Preferred Stock.

We established the offering price for the Series A Preferred Stock pursuant to negotiations among us and our affiliated dealer manager;

as a result, the actual value of an investment in the Series A Preferred Stock may be substantially less than the amount paid.

The selling price of the Series A Preferred Stock was determined pursuant to negotiations among us and the dealer manager, which is an affiliate of Bluerock, based upon the following primary factors at the time of the offering:

● at least a majority of our Board ceases to be constituted of directors who were either (A) a member of our Board on October 6, 2022, or (B) who became a member of our Board subsequent to such applicable date and whose appointment, election or nomination for election by our stockholders was duly approved by a majority of the Continuing Directors on our Board at the time of such approval, either by a specific vote or by approval of the proxy statement issued by our Company on behalf of our Board in which such individual is named as nominee for director (“Continuing Directors”).

In addition, if we experience a Change of Control, there can be no assurance that we would have sufficient financial resources available to satisfy our obligations to redeem the Series A Preferred Stock or the Series B Preferred Stock, and any guarantees or indebtedness that may be required to be repaid or repurchased as a result of such event.

Our failure to redeem the Series A Preferred Stock or the Series B Preferred Stock could have material adverse consequences for us and the holders of the Series A Preferred Stock or Series B Preferred Stock.

We established the offering price for each of the Series A Preferred Stock and the Series B Preferred Stock pursuant to negotiations among us and our affiliated dealer manager;

as a result, the actual value of an investment in the Series A Preferred Stock or the Series B Preferred Stock may be substantially less than the amount paid.

The selling prices of each of the Series A Preferred Stock and the Series B Preferred Stock was determined pursuant to negotiations among us and the dealer manager, which is an affiliate of Bluerock, based upon the following primary factors at the time of the offering:

the economic conditions in and future prospects for the industry in which we compete;

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and market valuations of public companies considered comparable to our Company.

Because the offering price is not based upon any independent valuation, the offering price is not indicative of the proceeds that an investor in the Series A Preferred Stock would receive upon liquidation.

Your percentage of ownership may become diluted if we issue new shares of stock or other securities, and issuances of additional preferred stock or other securities by us may further subordinate the rights of the holders of our common stock (which you may become upon receipt of redemption payments in shares of our Class A common stock for any of your shares of Series A Preferred Stock).

Under the terms of our Series A Preferred Stock, we may make redemption payments in shares of our Class A common stock.

Because the offering price is not based upon any independent valuation, the offering price is not indicative of the proceeds that an investor in the Series A Preferred Stock or the Series B Preferred Stock would receive upon liquidation.

Under the terms of our Series A Preferred Stock and our Series B Preferred Stock, we may make redemption payments in shares of our Class A common stock.

Although the dollar amounts of such payments are unknown, the number of shares to be issued in connection with such payments may fluctuate based on the price of our Class A common stock.

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The issuance of shares of our Class A common stock upon such redemption payments also may have the effect of reducing our net income per share (or decreasing our net loss per share).

In addition, the existence of Series A Preferred Stock may encourage short selling by market participants because the existence of redemption payments could depress the market price of shares of our Class A common stock.

In addition, the existence of Series A Preferred Stock or Series B Preferred Stock may encourage short selling by market participants because the existence of redemption payments could depress the market price of shares of our Class A common stock.

Our Board is authorized, without stockholder approval, to cause us to issue additional shares of our common stock or to raise capital through the issuance of additional preferred stock (including equity or debt securities convertible into preferred stock), options, warrants and other rights, on such terms and for such consideration as our Board in its sole discretion may determine.

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Our Board, in its sole discretion, may determine the value of any common stock or other equity or debt securities issued in consideration of residential properties or services provided, or to be provided, to us.

Our charter also authorizes our Board, without stockholder approval, to designate and issue one or more classes or series of preferred stock in addition to the Series A Preferred Stock (including equity or debt securities convertible into preferred stock) and to set or change the voting, conversion or other rights, preferences, restrictions, limitations as to dividends or other distributions and qualifications or terms or conditions of redemption of each class or series of shares so issued.

Our charter also authorizes our Board, without stockholder approval, to designate and issue one or more classes or series of preferred stock in addition to the Series A Preferred Stock and the Series B Preferred Stock (including equity or debt securities convertible into preferred stock) and to set or change the voting, conversion or other rights, preferences, restrictions, limitations as to dividends or other distributions and qualifications or terms or conditions of redemption of each class or series of shares so issued.

If any additional preferred stock is publicly offered, the terms and conditions of such preferred stock (including any equity or debt securities convertible into preferred stock) will be set forth in a registration statement registering the issuance of such preferred stock or equity or debt securities convertible into preferred stock.

Because our Board has the power to establish the preferences and rights of each class or series of preferred stock, it may afford the holders of any series or class of preferred stock preferences, powers, and rights senior to the rights of holders of common stock or the Series A Preferred Stock.

If we ever create and issue additional preferred stock or equity or debt securities convertible into preferred stock with a distribution preference over common stock or the Series A Preferred Stock, payment of any distribution preferences of such new outstanding preferred stock would reduce the amount of funds available for the payment of distributions on our common stock and our Series A Preferred Stock.

If we ever create and issue additional preferred stock or equity or debt securities convertible into preferred stock with a distribution preference over common stock, the Series A Preferred Stock, or the Series B Preferred Stock, payment of any distribution preferences of such new outstanding preferred stock would reduce the amount of funds available for the payment of distributions on our common stock, our Series A Preferred Stock, and our Series B Preferred Stock.

Further, holders of preferred stock are normally entitled to receive a preference payment if we liquidate, dissolve, or wind up before any payment is made to the common stockholders, likely reducing the amount common stockholders would otherwise receive upon such an occurrence.

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We may issue common stock, convertible debt or preferred stock pursuant to a subsequent public offering or a private placement, or to sellers of properties we directly or indirectly acquire instead of, or in addition to, cash consideration.

Investors purchasing Series A Preferred Stock in an offering of our Series A Preferred Stock who do not participate in any future stock issuances will experience dilution in the percentage of the issued and outstanding stock they own.

In addition, depending on the terms and pricing of any additional offerings and the value of our investments, you also may experience dilution in the book value and fair market value of, and the amount of distributions paid on, your shares of Series A Preferred Stock and Class A common stock, if any.

Holders of the Series A Preferred Stock have no control over changes in our policies and operations.

Investors purchasing Series A Preferred Stock in an offering of our Series A Preferred Stock, or Series B Preferred Stock in an offering of our Series B Preferred Stock, who do not participate in any future stock issuances will experience dilution in the percentage of the issued and outstanding stock they own.

Holders of the Series A Preferred Stock and the Series B Preferred Stock have no control over changes in our policies and operations.

Our Board determines our major policies, including with regard to investment objectives, financing, growth, debt capitalization, REIT qualification and distributions.

Our Board may amend or revise these and other policies without a vote of the stockholders.

Holders of shares of Series A Preferred Stock will generally have no voting rights under our charter, except with respect to any amendment of our charter that would alter only the contract rights, as expressly set forth therein, of either (a) the Series A Preferred Stock alone, or (b) of any preferred stock (i) ranking on parity with the Series A Preferred Stock 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 will have no voting rights.

Holders of shares of Series A Preferred Stock or Series B Preferred Stock will generally have no voting rights under our charter, except with respect to any amendment of our charter that would alter only the contract rights, as expressly set forth therein, of either (a) the Series A Preferred Stock or the Series B Preferred Stock (as applicable) alone, or (b) of any preferred stock (i) ranking on parity with the Series A Preferred Stock or the Series B Preferred Stock (as applicable) 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 have no voting rights.

Risks Related to Our Status as a REIT

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Our Board may amend our charter from time to time to increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class or series that we have authority to issue and may classify or reclassify any unissued common stock or preferred stock into other classes or series of stock and establish the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms or conditions of redemption of any such stock.

Our Board has authorized a total of 250,000,000 shares of preferred stock for issuance, of which, 30,000,000 have been classified as shares of Series A Preferred Stock.

As of December 31, 2024, there are issued and outstanding 4,628,681 shares of Series A Preferred Stock, which are senior to our common stock with respect to priority of dividend payments and rights upon liquidation, dissolution or winding up.

Our Board has authorized a total of 250,000,000 shares of preferred stock for issuance, 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, 2025, there are issued and outstanding 6,288,703 shares of Series A Preferred Stock and no shares issued and outstanding of Series B Preferred Stock, which are both senior to our common stock with respect to priority of dividend payments and rights upon liquidation, dissolution or winding up.

Our Board could also classify for issuance up to 206,000,000 of the remaining authorized shares of preferred stock with terms and conditions that could have priority as to distributions and amounts payable upon liquidation over the rights of the holders of our common stock.

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In addition, to the extent we make distributions to stockholders with sources other than cash flow from operations, the amount of cash that is available for investment in real estate assets will be reduced, which will in turn negatively impact our ability to achieve our investment objectives and limit our ability to make future distributions.

We will incur increased costs as a result of operating as a public company.

If we fail to maintain proper and effective internal controls, our ability to produce accurate and timely financial statements could be impaired, which could result in sanctions or other penalties that would harm our business.

We currently qualify as an emerging growth company.

To the extent that we no longer qualify we will be subject to additional regulatory requirements which will likely be time-consuming and costly.

We are subject to the reporting requirements of the Securities Exchange Act of 1934 (the “Exchange Act”), the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), and the rules and regulations of the New York Stock Exchange American (the “NYSE American”).

Our financial results historically were included within the consolidated results of Bluerock Residential, and until the Distribution occurred, we were not directly subject to reporting and other requirements of the Exchange Act and Section 404 of the Sarbanes-Oxley Act.

We currently qualify as an “emerging growth company.” For so long as we remain an emerging growth company, we will be exempt from Section 404(b) of the Sarbanes-Oxley Act, which requires auditor attestation to the effectiveness of internal control over financial reporting.

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If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock, and our stock price may be more volatile.

We will, however, be immediately subject to Section 404(a) of the Sarbanes-Oxley Act, which will require, among other things, annual management assessments of the effectiveness of our internal control over financial reporting beginning in our second annual report filed after the Distribution.

We are, however, subject to Section 404(a) of the Sarbanes-Oxley Act, which requires, among other things, annual management assessments of the effectiveness of our internal control over financial reporting.

In addition, as of the expiration of our emerging growth company status, we will be broadly subject to enhanced reporting and other requirements under the Exchange Act and Sarbanes-Oxley Act, which will require, among other things, a report by our independent registered public accounting firm addressing such annual management assessments.

These and other obligations will place significant demands on our management, administrative and operational resources, including accounting and information technology resources.

To comply with these requirements, we anticipate that we will need to further upgrade our systems, including duplicating computer hardware infrastructure, implement additional financial and management controls, reporting systems and procedures, and hire additional accounting, finance and information technology staff.

To comply with these requirements, we anticipate that we will or may need to implement additional financial and management controls, reporting systems and procedures, and hire additional accounting, finance and information technology staff.

Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors