Securities Available for Sale at Fair Value

6 Months Ended

Mar. 31, 2016

Investments, Debt and Equity Securities [Abstract]

Securities Available for Sale at Fair Value

NOTE 4 – SECURITIES AVAILABLE FOR SALE AT FAIR VALUE

The Company’s Securities Available for Sale at Fair Value consists primarily of marketable common and preferred stock of other REITs with a fair value of $68,646,996 as of March 31, 2016. The Company generally limits its investment in marketable securities to no more than approximately 10% of its undepreciated assets. The REIT securities portfolio provides the Company with additional liquidity and additional 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, 2016, the Company sold or redeemed securities with a cost of $6,529,117 and recognized a Gain on Sale of Securities Transactions of $887,342. The Company also made purchases of $13,132,910 in Securities Available for Sale at Fair Value. Of this amount, the Company made total purchases of 34,666 common shares of UMH Properties, Inc. (UMH), a related REIT, through UMH’s Dividend Reinvestment and Stock Purchase Plan for a total cost of $331,425, or a weighted average cost of $9.56 per share. The Company owned a total of 946,537 UMH common shares as of March 31, 2016 at a total cost of $8,859,522 and a fair value of $9,389,643. The Company owns 200,000 shares of UMH’s 8.25% Series A Cumulative Redeemable Preferred Stock at a total cost of $5,000,000 and a fair value of $5,148,000. The Company owns 100,000 shares of UMH’s 8.00% Series B Cumulative Redeemable Preferred Stock at a total cost of $2,500,000 and a fair value of $2,620,000.

The Company had total net unrealized holding gains on its securities portfolio of $2,060,363 as of March 31, 2016. The Company held five securities that had unrealized losses as of March 31, 2016 totaling $182,269. The Company considers 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. The Company normally holds REIT securities long-term and has the ability and intent to hold these securities to recovery. The following is a summary of the securities that the Company has determined to be temporarily impaired as of March 31, 2016:

	Less than 12 Months					12 Months or Longer
			Unrealized					Unrealized
Description of Securities		Fair Value		Losses			Fair Value		Losses
Preferred stock	$	982,300	$	(13,540	)	$	-0-	$	-0-
Common stock		18,414,900		(163,312	)		996,993		(5,417	)
Total	$	19,397,200	$	(176,852	)	$	996,993	$	(5,417	)

The following is a summary of the range of losses:

Number of Individual Securities		Fair Value		Unrealized Losses			Range of Loss
5	$	20,394,193	$	(182,269	)	0-5		%