Brett Taft: Yes. So we closely monitor this and we really haven’t seen any material change in collections. Overall collections for the third quarter are above 98%, which is where they usually are. Our monthly collections are right in line with where they typically are at this point in the month. So we don’t see an issue at this point but we are closely monitoring it. Anywhere where there could potentially be a problem we’re really staying on top of those. But again, overall 98%-plus collections. And again, we don’t see anything at the moment that points us to believe that will change anytime soon.
Samuel Landy: It’s an important time to note that the affordability gap continues to widen and the widening of that affordability gap makes our product that much more in demand for waiting lists, for people who can pay, the rent for people doing everything in their power to pay their rent on time. When we began the turnaround property program where we buy and renovate communities and add rentals we said that that took three years. The pace we’re going on the southern communities indicates that pace may reduce to 1.5 years, because nobody else can do what we do which is create a rental dwelling unit for as little as $130,000. So that gap between what it cost other people to provide the housing and what it cost us to provide the housing, results in us being able to charge lower rents, strong demand.
Our drone videos will show you — our newest drone video shows you how close our community is to the industrial warehouse, which is just a natural fit. And the warehouse needs workers. We provide the housing for the workers. And so we don’t have receivables, because people — workforce housing is definitely needed.
John Massocca: Okay. And then maybe as you think about the work that’s done on the properties, where are you seeing — how is kind of costs trending there whether it be kind of labor cost or materials? Have there been any kind of letup in those operating costs due to changes in where kind of macro inflation is going?
Brett Taft: Yes. On the payroll front, we saw the majority of our cost increases last year. That’s both through wages and making sure that we’re fully staffed. So we’re comfortable, with where those numbers are. And I really think that’s evidenced by our expense growth of 5.6% for the nine months. Materials costs are increasing about in line with inflation, and we expect that to be the trend going forward as well. But that being said, we’re very proud of our 8.4% revenue growth for the year on the same-property front, 5.6% expense growth and 10.4% NOI growth. I think it’s important to note that the 900 rentals that we’ve set up and installed this year, are not fully reflected in our first nine-month numbers. Our rent roll for November is significantly higher. And overall our revenue is on a going forward basis what’s in place right now, about $7 million higher than what was reported for the nine months.
John Massocca: I think in terms of like asking rents versus kind of market rents at a particular community I mean, how does that translate on a percentage basis some of those things that aren’t in maybe the same-store pool?
Samuel Landy: We only raise the existing rents to residents approximately 5%. We price the new rents based on, what it costs to set up the house and what our market — what market rents are. So, new rents are coming in closer to $1,000 per month.
Brett Taft: Absolutely. And it really depends on the market and the home that we’re renting. We’ve got multi-section homes that are renting for $1,200 $1,300 $1,400 in some cases, a little bit higher. But your typical 3-bedroom 2-bath single-wide unit is in that $1,000 range.
John Massocca: Okay. That’s very helpful. And that’s it for me. Thank you very much.
Samuel Landy: Thank you.
Operator: The next question is from James Gordon with Gordon Investments. Please go ahead.
Q – Unidentified Analyst: Gentlemen I wonder if someone would comment, a little bit in depth on your sales of the preferred stock at the market. There’s a couple of questions that concern me. Until recently, when loan rates started to drop, you’re getting less and less in your aftermarket sales on your preferred stock. We’re selling at a yield. It looked like the company would be saddled on these shares anyway on a quasi-permanent basis at about 7.5% interest. First of all, there’s several questions. Is there a yield that you guys will not sell at that you’ll close the ATM and not sell the preferred or will you just keep selling it? Two, it seems to me that with respect to all the shares you’re selling, the company is kind of on a treadmill dilution here.
And I’m kind of puzzled about it. I know you have a great need for capital. I know you men are very good stewards of capital, but we’re in a very funding environment with interest rates. And I’m wondering whether this is very expensive equity that you’re selling the cost of this equity. And so my other question is that you’ve done some computations as to what your returns are your spreads over your preferred stock. You’re paying 7.5, let’s say when the price was lower. What is the spread that you’re earning on the stock? How can you tell us or can you explain to us what is your thought process here and this continued selling particularly on the preferred?
Eugene Landy: Let me start and I have to start with what a serious problem the United States has for affordable housing the amount of the shortage. It is the number two problem of the country. And you’ll see as Congress goes in session for the rest of the year, this is going to be the most talked about but of course the first thing is war and peace. And whatever we do that’s number one. But as far as problems that we can do something to solve housing is critical and this nation has been able to produce whatever we need whether it’s food. Everything in the world and then somehow we’ve gotten in a position where there’s a 4 million home shortage in the country and that shortage is growing. Because of the fight against inflation, the other builders are cutting back instead of building.
They’re building 20% 25% less homes. And the affordable part of the housing market is simply closed to people and it can’t be. People are entitled to shelter. They want to raise their families and they have to have a place to live. And so we’re at the highest levels of the government and with the Congress of working on a solution to the problem. And that solution which the President is recognized has appointed a special person to be in this sector that manufactured housing and the unique communities we build and the price we come out with is simply amazing. I mean we say very lightly that we’re at $1,000 a month of rent, three bedrooms and two baths and $1,700 a month to get two bedrooms and one bath, which isn’t sufficient housing in a conventional environment.
