A.M. Steinbeck

Real-Estate Veteran Sees a Rare Opportunity to Buy Quality REITs - Barron's

The Cohen article in Barrons was written prior to SPG cutting their dividend. There's no way REITs can continue to support such large dividends.

M/I Homes: Common Share Price Perplexing

With a name like algo, I would expect a better understanding of the math involved. I didn't mix apples and oranges. I dismissed the income/expense and cash flow portion as irrelevant to my argument.

The statement that they could sell houses to reduce debt infers that they're not trying to sell houses now. Because, from what I’m seeing, they’re depleting their cash reserve by $25M per quarter.

Additionally, the $289,000 average sales price does not just "go to reduce debt" - first they have to pay for the materials and labor and then after the 15% gross margin - the $30M a quarter in SG&A.

I didn't claim they had a cash flow problem - although they've burned through the $100M in cash they raised from the pref-A, over the past year, and don't seem to able to raise more. If payables get large enough, and they can't sell houses fast enough, they could get forced into bankruptcy by suppliers (the same way Kara Homes was). But that wasn't my argument. My question was or should I say, the puzzle is, the pref-A and the bonds trading off by degrees of magnitude while the common rallies.