11% Yield, Tax Efficient, And Monthly Pay: Greystone Housing

Core Viewpoint - Greystone Housing Impact Investors LP (GHI) has a unique business model focused on generating income through Mortgage Revenue Bonds (MRBs) and the development of multifamily buildings, with a current yield of 11.5% [1][11] Company Overview - GHI employs two core strategies: investing in MRBs, which are government-issued loans for affordable housing construction, and partnering with developers for multifamily building projects [1][11] - The partnership structure allows GHI to pass tax-exempt interest benefits from MRBs to shareholders [1] Financial Performance - In Q2 2024, GHI reported Cash Available for Distribution (CAD) of $0.27, down from a distribution of $0.37, indicating that CAD did not cover the distribution in the first half of the year [2][4] - Total revenues for GHI were $28.303 million, with total expenses of $14.343 million, resulting in a net income of $21.287 million [5] Property Sales and Development - GHI's property sales have been inconsistent, with no properties sold in the first half of 2024, which raises concerns about cash flow [2][4] - The company has a pipeline of properties, with four operating and several under construction, which may lead to increased sales in the future [7][9] Market Conditions - High interest rates have negatively impacted the real estate market, making it difficult for GHI to sell properties at favorable prices [4][8] - A potential decline in interest rates could improve GHI's earnings and cash flow from both MRBs and property sales [10][11] Investment Outlook - GHI is positioned to benefit from a shift towards risk-averse investing, particularly as the economy struggles, which may increase demand for its mortgage revenue bond portfolio [11] - The company aims to provide strong double-digit yields, leveraging its unique income-generating strategies [11]