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WILHELMINA INTERNTL Message Board

ethison 289 posts  |  Last Activity: 5 hours ago Member since: Oct 3, 2007
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  • Reply to

    Some work for Davis

    by veichten Jul 18, 2014 11:46 AM
    ethison ethison Jul 18, 2014 2:16 PM Flag

    Adding a few thoughts.
    1. RAS also has an expertise in evaluating multi family properties as they have lent hundreds of millions against them both as conduit lenders and as bridge and mez lenders. Seeing how the properties perfomed though one of the worst few economic years since the Great Depression gives them a bit of a cat bird seat and unique perspective too.
    2. IRT is buying stable established properties with 90%++ occupancy, which is why they are able to quickly put such cheap long term fixed rate financing on the properties.
    3. The IRT stock is being bought by institutional investors. These folks are not dumb. They believe in irt's plan.
    4. These $15 to $25 million dollar properties are not highly liquid. There are not an endless number of buyers that can actually close. IRT is not hung up on any one or two properties, but is rather buying into a set of characteristics. If for some reason a deal doesn't happen, on to the next one.
    5. Sellers know more than buyers. That is usually the case in all transactions. That's why buyers put down a refundable deposit and must do complete due diligence on each and every property.
    6. RAS is not collecting endless fees from IRT. The structure is such that RAS gets a nice bit of the upside if all goes right. I originally thought that IRT was set up for RAS to take advantage of many opportunities to gather easy money from IRT. I was wrong.
    7. In most cases IRT is buying properties one by one rather than portfolios of properties. While the properties might be well run and have good supers etc etc, there are some real economies of scale that can come into play when part of a bigger group. An example IRT gave was they same $500,000 per year on insurance when the properties were put onto RAS's umbrella policy. After all, RAS owns 12,000 apartments, so they get cheap pricing. Also Rait Residential uses some unique pricing programs that individual property owners can't afford.

  • The final prospectus shows that on 7/15 IRT closed on two mortgages totaling $27.4 million. These were on two properties they recently purchased, but had not yet put the long term financing in place. Some of that money will likely pay down the line of credit, the rest will be quickly invested in more properties.

  • Wells Fargo CEO was just quoted saying the country is in danger of becoming a country of renters. Guess what? RAS & IRT have a apartments to rent them:-)

  • 7.75% with no strings attached.
    That's $100 million more to play with.
    Read the filing. Total filing is for $150 million.
    No dilution to common. Should that have been the front of the headline? No dilution?

  • Reply to

    Some work for Davis

    by veichten Jul 18, 2014 11:46 AM
    ethison ethison Jul 20, 2014 11:02 AM Flag

    Perfectly valid point. Adding further, many sellers are partnership and completely rely on property managers. There is no active management on the part of the owners, and is probably disagreements and frustration on the part of some owners in being unable to get out of their illiquid investment........IRT to the resucue with upreit structure.

  • Reply to

    Some work for Davis

    by veichten Jul 18, 2014 11:46 AM
    ethison ethison Jul 18, 2014 3:08 PM Flag

    7. They save $500,000 per year on insurance.... This is related to the OK properties, which were acquired with less two years left on their 5.5% financing. Unless the world changes dramatically in the next two years, RAS will be able to refi at much cheaper interest rates.

  • Reply to

    100% of the NYSE volume for RAS was...

    by wandering_mistrial May 3, 2014 12:09 AM
    ethison ethison May 3, 2014 3:45 PM Flag

    Who doesn't matter. Why is obvious......to make money. There is nothing wrong with shorting.....just a bet, no different than going long.
    I assume the complaint some folks have is that there are games played to try to make it look like there are trades that misleading to make it appear that the price is going down to flush out the weak and fearful. Further, some complain because lies are sometimes told about the financial health of a company in order to scare longs, or would be longs....... Guess what, there are longs that do all of those things too. RAS is probably more susceptible to many of the short games because of the huge GAAP losses..........and it has been a long long road back from the lows of 2008/2009......lots of wheeling and dealing......new issues, new debt, new convertible debt, preferred shares.....

  • ethison by ethison May 30, 2014 4:30 PM Flag

    Interesting trading pattern. modest volume throughout the day. Big blocks at day's end. several days of this activity. Of course today is month end. Done with May (sell in May and go away) now RAS faces it's dividend announcement and quarter end 6/30............

  • ethison ethison Jun 9, 2014 8:57 PM Flag

    Oh, I got problems, but that's not one of mine;-)
    Where would this board be without DF? Hardly any fun at all.

  • ethison ethison Jun 10, 2014 5:00 PM Flag

    Studies do say that the more assets under management, the higher the management compensation...........

  • Reply to

    Interest coverage

    by ethison Jun 10, 2014 9:58 PM
    ethison ethison Jun 10, 2014 10:02 PM Flag

    Do you think RAS would make a bridge loan with less than 1.0 coverage? A negative cash flow loan? Maybe a property with high vacancy rates at the time of the loan?

  • Reply to

    A 'short' history of RAS

    by kazua1observer May 8, 2014 9:11 AM
    ethison ethison May 8, 2014 10:03 AM Flag

    RAS is a controlled risk. it is not going to suddenly go up 25% overnight.

  • And I'm counting on you to keep the conversation going.

  • Reply to

    Questions for Scott

    by ethison Apr 30, 2014 8:06 PM
    ethison ethison May 13, 2014 5:08 PM Flag

    Wow, zero. I love the sound of that number. let me say it again....zero.
    I can see where they will get refi business through the Urban relationship. I can see where Urban can help fill the 4 properties they own. Maybe they can create a new REIT by shoving together players that have invested in retail malls, strip malls etc etc and now they want to diversify away from just one location. As long as RAS doesn't need to invest significant cash in a retail related REIT....I'm all for it............maybe just contribute their 4 properties after Urban has them filled.
    I know the building RAIT is in. Very convenient for commuters.
    I should have invested a day to come and listen and ask questions.

  • Reply to

    This month: June, 2014 (plus a little)

    by davisfoulger Jun 2, 2014 10:09 AM
    ethison ethison Jun 6, 2014 3:37 PM Flag

    Actually, best odds ever. I will put all my money on the table that IRT will close on another property sometime this month................bingo......I win............ They closed on a $20.5 million property yesterday:-)
    Just call me.......mr. 20/20 hindsight. 20/25 foresight.....

  • There are a number of issues that I would love for Scott to address during the CC.
    1. When is the next securitization. I believe they had previously mentioned the third quarter.
    2. Tell us about the four properties acquired after 12/31/13.
    3. How will you use the huge and growing pile of cash RAS now holds.
    4. How did the net interest margin grow so dramatically.

  • Reply to

    IRT has one more property to refinance

    by ethison Jun 29, 2014 11:00 PM
    ethison ethison Jul 2, 2014 8:47 AM Flag

    Now we are past quarter end. IRT will put financing on last property and probably buy two more properties in the coming weeks.
    Cash fully and optimally deployed...............IRT will soon be ready to double the number of properties under management again........HERE WE GROW AGAIN!

  • So, when RAS lends on bridge loans the leverage is typically 75% LTV non-recourse. All the properties are long ago leased up and are in some form of transition. I am wondering what the interest coverage is at the time the loan is made and what the typical coverage would be after the property has transitioned. The bridge loans are typically 3 to 5 years, so one must assume that it probably takes 2-4 years to transition these properties.

  • Reply to

    ARI run up to 17.50 and paying 9.5% dividend

    by stablestock Jul 2, 2014 12:27 PM
    ethison ethison Jul 2, 2014 3:32 PM Flag

    Do you really trust Leon Black?

  • Reply to

    IRT raising about $65 million

    by ethison Jul 14, 2014 4:55 PM
    ethison ethison Jul 14, 2014 5:20 PM Flag

    Some details regarding the offering, but more interestingly the properties they are lining up to buy after the new capital is raised.
    One under contract that requires IRT to be satisfied with an issue or two before closing.
    One big one that appears to be an upreit.
    One more in Indianapolis with no occupancy details.......presumably too low at the moment......that would be three in that market. Hopefully some economies of scale can kick-in.
    Also, soon to close financing on the last property bought......3.95% fixed rate non-recourse for ten years interest only. Once again, the cheap money continues to flow!

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