Repeat pull from proven relationships plus room left

UMH Properties, Inc. (UMH) — this company's answers

The model's full reasoning — Q3 2018 call → NOWe need answer YES/NO based on transcript. Need determine if management describes existing counterparties (customers/accounts/partners/members/programs) already served and proven, currently on their own initiative taking/committing to meaningfully more than before, and that these relationships remain lightly penetrated. Need both halves. Let's parse transcript. Company UMH Properties, manufactured home communities. They have rental home program, sales of homes. Management discusses growth: "We currently have 6,215 rentals, of which 93.3% are occupied. Demand for rentals is very strong in all our markets. We are on track to meet our annual goal of installing and renting 800 new homes this year. So far this year, we have added 608 rental homes to our portfolio." This is expansion of rental homes within existing communities? They add rental homes to fill vacant sites. Are these existing customers? Actually rental homes are new units placed in communities, rented to new tenants. Not necessarily existing customers taking more. But could be existing communities? The question asks counterparties the company has already served and proven itself with — existing customers, accounts, partners, members, or programs — currently taking more. Here, maybe "rental home program" is a program. They are adding rental homes. But is that existing customers? No, new renters. However, they also have sales: "Sales for the quarter were $4.7 million, as compared to $2.8 million last year, representing an increase of 67%. Year to date sales have increased 34%. And we have already surpassed our total 2017 sales. For the 9 months this year, we have sold 204 homes at an average price of $54,000, as compared to 169 at an average price of $49,000 dollars in the prior year period." This is sales to homebuyers. Are these existing customers? Possibly existing renters buying homes? They mention "It's a great starter home and then people move up and they buy houses" - so rental program generates new sales. But do they explicitly say existing renters are buying? Not directly. They say "Demand for rentals is very strong" and "Sales demand is as strong as it has been since prior to the recession." They attribute sales increase to ability to discuss monthly payments, rising incomes, etc. Not specifically existing customers expanding.

← Back to the full UMH analysis