ijudge,I believe the decline has come on the back of REU’s...

ijudge,

I believe the decline has come on the back of REU’s purchase of the lending company.

Due to the concerns and negative sentiment stemming from the US Housing market, most entities that are involved in lending funds to others are being negatively impacted – regardless of to whom they are lending to!

I have spoken to management of several occasions, they confirmed that they have no exposure to sub-prime borrowers, that all loans continue to perform well and key debt and real estate parameters (e.g. loan-to-value) remain robust. All current loans are against existing commercial properties producing cash flows, with no defaults to date.

Do not think currency is an issue either as they are fully hedged for the next seven years.

The Allco purchase should be good for REU also as it means they will be able to obtain cheaper financing then they would be able to on their own...positive in this tight credit environment.

I am a longterm holder however am interested to see the price action post30 Nov when REU commence their on-market buyback.

If a residential real estate investor looked that this stock they would purchase immediately...rare that one can borrow at say 8-9% and yield over 12.5% p.a (obviously EPS needs to hold up however not a bad positively geared investment)