Securities Available for Sale at Fair Value

6 Months Ended

Mar. 31, 2018

Investments, Debt and Equity Securities [Abstract]

Securities Available for Sale at Fair Value

NOTE 4 – SECURITIES AVAILABLE FOR SALE AT FAIR VALUE

Our Securities Available for Sale at Fair Value consists primarily of marketable common and preferred stock of other REITs with a fair value of $144,630,426 as of March 31, 2018. We generally limit our investment in marketable securities to no more than approximately 10% of our undepreciated assets (which is our total assets excluding accumulated depreciation). Total assets excluding accumulated depreciation were $1,748,202,329 as of March 31, 2018. We held $144,630,426 in marketable REIT securities as of March 31, 2018, representing 8.3% of our undepreciated assets. The REIT securities portfolio provides us with additional liquidity, diversification and income and serves as a proxy for real estate when more favorable risk adjusted returns are not available.

During the six months ended March 31, 2018, we sold or redeemed securities with a cost basis of $2,508,046 and recognized a Gain on Sale of Securities Transactions of $111,387. In addition, we recognized dividend income on our investment in securities of $2,885,821 and $5,748,465 for the three and six months ended March 31, 2018. We also made purchases of $61,068,920 in Securities Available for Sale at Fair Value. Of this amount, we made total purchases of 31,041 common shares of UMH Properties, Inc. (UMH), a related REIT, for a total cost of $408,759, or an average cost of $13.17 per share, which were purchased through UMH’s Dividend Reinvestment and Stock Purchase Plan. We owned a total of 1,159,357 UMH common shares as of March 31, 2018 at a total cost of $11,640,610 and a fair value of $15,546,972. We own 100,000 shares of UMH’s 8.00% Series B Cumulative Redeemable Preferred Stock at a total cost of $2,500,000 with a fair value of $2,655,000. The unrealized gain on our investment in UMH’s common and preferred stock as of March 31, 2018 was $4,061,363.

As of March 31, 2018, we had total net unrealized holding losses on our securities portfolio of $31,124,653. We consider many factors in determining whether a security is other than temporarily impaired, including the nature of the security and the cause, severity and duration of the impairment. We normally hold REIT securities long-term and have the ability and intent to hold these securities to recovery. The following is a summary of the securities that we have determined to be temporarily impaired as of March 31, 2018:

	Less than 12 Months					12 Months or Longer
			Unrealized					Unrealized
Description of Securities	Fair Value		Losses			Fair Value		Losses
Preferred stock	$	3,568,452	$	(1,375,222	)	$	-0-	$	-0-
Common stock		121,494,000		(33,979,327	)		-0-		-0-
Total	$	125,062,452	$	(35,354,549	)	$	-0-	$	-0-

The following is a summary of the range of losses:

Number of Individual Securities	Fair Value		Unrealized Losses			Range of Loss
3	$	4,096,452	$	(149,520	)		1%-5	%
3		35,565,000		(3,711,739	)		6%-10	%
3		47,527,000		(8,368,816	)		11%-20	%
3		37,874,000		(23,124,474	)		21%-50	%
12	$	125,062,452	$	(35,354,549	)