1. Organization and Description of Business NexPoint Residential Trust, Inc. (the Company, we, our) was incorporated in Maryland on September 19, 2014, and has elected to be taxed as a real estate investment trust (REIT). The Company is focused on value-add multifamily investments primarily located in the Southeastern and Southwestern United States. Substantially all of the Companys business is conducted through NexPoint Residential Trust Operating Partnership, L.P. (the OP), the Companys operating partnership. The Company owns its properties (the Portfolio) through the OP and its wholly owned taxable REIT subsidiary (TRS). The OP owns approximately 99.9% of the Portfolio; the TRS owns approximately 0.1% of the Portfolio. The Companys wholly owned subsidiary, NexPoint Residential Trust Operating Partnership GP, LLC (the OP GP), is the sole general partner of the OP. As of March 31, 2019, there were 23,819,402 common units in the OP (OP Units) outstanding, of which 23,746,169, or 99.7%, were owned by the Company and 73,233, or 0.3%, were owned by a noncontrolling limited partner (see Note 10). The Company is externally managed by NexPoint Real Estate Advisors, L.P. (the Adviser), through an agreement dated March 16, 2015, as amended, and renewed on February 13, 2019 for a one-year term set to expire on March 16, 2020 (the Advisory Agreement), by and among the Company, the OP and the Adviser. The Adviser conducts substantially all of the Companys operations and provides asset management services for its real estate investments. The Company expects it will only have accounting employees while the Advisory Agreement is in effect. All of the Companys investment decisions are made by the Adviser, subject to general oversight by the Advisers investment committee and the Companys board of directors (the Board). The Adviser is wholly owned by NexPoint Advisors, L.P., which is an affiliate of Highland Capital Management, L.P. (the Sponsor or Highland). The Companys investment objectives are to maximize the cash flow and value of properties owned, acquire properties with cash flow growth potential, provide quarterly cash distributions and achieve long-term capital appreciation for its stockholders through targeted management and a value-add program. Consistent with the Companys policy to acquire assets for both income and capital gain, the Company intends to hold at least majority interests in its properties for long-term appreciation and to engage in the business of directly or indirectly acquiring, owning, and operating well-located multifamily properties with a value-add component in large cities and suburban submarkets of large cities primarily in the Southeastern and Southwestern United States consistent with its investment objectives. Economic and market conditions may influence the Company to hold properties for different periods of time. From time to time, the Company may sell a property if, among other deciding factors, the sale would be in the best interest of its stockholders.