Company: BHM
Filing Date: 2025-03-20
Form Type: 424B3
Source: 0001104659-25-026164
Chunk: 184

Company: Bluerock Homes Trust, Inc.
Filing Date: 2025-03-20
Form: 424B3
Chunk 184
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observable valuation inputs in the determination of fair value. However, given the significance of the unobservable inputs, the fair values of AFS debt securities are classified in Level 3 of the fair value hierarchy. Refer to Note 11 for further information regarding fair value measurements.

Real Estate Assets

Real Estate Purchase Price Allocations

Upon
acquisition, the Company evaluates its acquired residential properties for purposes of determining whether a transaction should be accounted
for as an asset acquisition or business combination. Purchases of residential properties are treated as asset acquisitions and, as such,
are recorded at their purchase price, including acquisition costs, which is allocated to land and building based upon their relative fair
values at the date of acquisition. Acquisition costs typically include legal fees, broker commissions and title fees, as well as other
closing costs. In making estimates of fair values for purposes of allocating the purchase price of acquired properties, the Company utilizes
various sources including its own market knowledge obtained from historical transactions, published market data, and independent appraisers.
In this regard, the Company also utilizes information obtained from county tax assessment records to assist in the determination of the
fair value of the land and building.

Estimates
of the fair values of the tangible assets, identifiable intangibles and assumed liabilities require the Company to make significant assumptions
to estimate market lease rates, property operating expenses, carrying costs during lease-up periods, discount rates, market absorption
periods, prevailing interest rates and the number of years the property will be held for investment. The use of inappropriate assumptions
could result in an incorrect valuation of acquired tangible assets, identifiable intangible assets and assumed liabilities, which could
impact the amount of the Company’s net income (loss). Differences in the amount attributed to the fair value estimate of the various
assets acquired can be significant based upon the assumptions made in calculating these estimates.

<div align='center'>F-9</div>

Table of Contents

Capital Additions, Depreciation and Amortization The Company capitalizes costs incurred in connection with its capital additions activities, including redevelopment, development and construction projects, other tangible improvements, and replacements of existing components. Repair and maintenance and tenant turnover costs are expensed as incurred. Repair and maintenance and tenant turnover costs include all costs that do not extend the useful life of the real estate asset. Accordingly, many factors are considered as part of the Company’s evaluation processes with no one factor necessarily determinative. Depreciation and amortization expense are computed on the straight-line method over the asset’s estimated