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UMH Properties Inc. Message Board

  • maverick7572000 maverick7572000 Nov 21, 2007 11:26 AM Flag

    ecnrp - question about industry

    I would like your opinion if you are at liberty to comment.

    Manufactured housing had restricted lending all along (high interest rates, shorter term mortgages) and had difficulty competing with traditional homes when mortgages had little underwriting standards. Now that traditional underwriting is greatly tightened, I would think it would make manufactured housing communities more competitive with traditional homes than it has been for the last several years. Do you agree?

    Along with the mortgage crisis, SUI has fallen significantly yet their YTD and recent quarter's cash flow, revenues, etc, are inline with last year's and cover the dividends. The stock market seems to be anticipating either extreme difficulty getting people into manufactured home communities due to mortgage/lending issues, or significant defaults among existing residents, like what is being experienced among subprime mortgages in traditional homes. I do not think either will be the case given that financing and underwriting have historically been different than traditional mortgages. Am I missing something here?

    Your comments, if you can share them, are appreciated.

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    • "We are experiencing increased demand in the rental market and are in the process of meeting that demand. Several of our communities are currently under expansion, which should be completed by year end. UMH maintains substantial cash and borrowing power should further opportunities arise."
      This is why I bought this stock over ten years ago.
      The current lending envirement should improve the odds
      that rentals should work. This will continue to be the sweet
      spot of the buisines.

    • not the person you're looking for, but i just checked the rate at my local yokel bank (truly local- a rarity). the apr on a 7/1 for manufactured housing is 9.5% with a starting rate of 8.1% but it can go up 2% per year with a max increase of 8% (to 16%!). I think those are really tough #'s to make in today's market for folks with limited income even when the purchase price is fairly low. last year lots of banks would have just looked at income and the current payment. Now I'm sure they look to see if you can pay assuming the int rate goes up 4% or so (just 3 years after loan inception). I think that sinks the growth prospects for our company. I may sell for a tax loss even though i think they'll do better in upcoming quarters.

      • 1 Reply to vtstatsguy
      • Thanks. Mfg housing financing has been high rate with short terms for most of this decade. Not sure if the current financing environment as it affects UMH/SUI/etc is significantly different today than it was a year ago or two years ago - that is why I asked! There are some subtleties involved, thus it would be good to hear from Mr. Landy.

        UMH, SUI, etc are not significant growth plays by any means. They should be blocking and tackling type stocks, and valuation matters very much to that type of stock.

 
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