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Samuel Landy

Thank you very much, Craig. UMH is pleased to deliver another quarter and year of increased FFO per share, double digit community NOI growth, and a new all-time high sales record. Normalized FFO for the quarter was $0.24 per share as compared to $0.23 per share last year, representing an increase of 4%. Normalized FFO for the year was $0.93 per share as compared to $0.86 last year, representing an increase of 8%.
We are very proud of these results, and we look forward to delivering another great year on all fronts in 2025 and beyond. We have opportunistically raised equity at prices at or near our 52-week high. This capital will be invested accretively into our platform. UMH has a long-term value add business plan. Our past work generates our current income, and FFO does not fully reflect the tremendous effort we are putting into our future results.
Are approximately 2,400 acres of vacant land, 3,300 vacant sites, 500 new homes and inventory in various stages of setup with an additional 200 on the way are all part of our efforts to generate future income and ensure that we have sites available to continue our income and earnings growth. We are balancing growth with earnings accretion and have been successfully delivering on both fronts.
At any given time, UMH has $100 million or more invested that is not yet producing accretive returns. Our results are strong, but we continue to work to achieve even better results. Additionally, we have opportunistically tapped the equity market through our common ATM and raised a substantial amount of capital that has not yet been invested.
As the capital raised is invested in new acquisitions, rental homes, and expansions, our earnings per share should continue to grow. Our same property operating results continue to grow. Our value ed strategy allows us to drive substantial improvements in occupancy, revenue, and value over time. Not only are our operating results strong, but our business plan accomplishes an important social mission of upgrading and adding to the current supply of affordable housing.
In the fourth quarter, same property income increased by 8% and same property NOI increased by 8%. Same property income for the year increased by 9% and same property NOI increased by $11.5 million resulting in an increase of 10%. These increases were driven by an increase in occupancy of 216 units, resulting in an increase of 70 basis points. In 2025, we anticipate similar, if not improved, same property operating results. We anticipate further occupancy growth as we rent and sell our in-place inventory and more aggressively procure homes throughout the year.
Additionally, we anticipate continuing to achieve our 5% rent increases throughout the portfolio. Our rental home program had another good year. We added 565 homes to our portfolio. We now own 10,300 rental homes, of which 94% are currently occupied. Our annual rental home turnover is only approximately 20%. Our repairs and maintenance expenses per home were approximately $400 per home per year. We anticipate adding another 800 homes or more in 2025.
We are proud that our sales division broke our all-time sales record for the third consecutive year. Gross sales this year were $33.5 million as compared to $31.2 million last year, representing an increase of 8%. We sold 258 used homes at an average price of $50,000 and 136 new homes at an average price of $151,000. Our gross sales margin for the year was 35%. We financed approximately 59% of our home sales. We now have $89.2 million in loans at an average rate of 7%.
Our sales division has the opportunity to grow further as we have several high-end expansions that opened in the second half of 2024 or are scheduled to open in the first half of 2025. Also, we are hopeful that the new administration will revise the financing laws so that we can get more potential buyers approved for financing. This could convert existing renters that have a strong payment history to homeowners. That development could create a meaningful increase in our home sales.
We are optimistic that we will be active in the acquisition market in 2025. We anticipate that this prolonged high-interest rate environment may result in communities being available at more reasonable prices in 2025. We are well positioned to execute on these opportunities when they arise. Our acquisition pipeline has grown. We now have four communities under contract which contain 457 sites, of which approximately 90% are occupied.
The purchase price of these communities is $39.1 million or $85,000 per site. The pipeline contains 191 sites in Maryland, which we anticipate closing in early 2025 and 266 sites in New Jersey. The blended Cap rate on these communities is approximately 5.5%. We are optimistic that compelling acquisitions are becoming available. In 2024 we completed 190 expansion sites. As I mentioned above, these sites should allow us to further grow our sales results in 2025 and beyond.
We anticipate obtaining approvals for 500 or more sites in 2025 and building 300 to 400 sites. Additionally, we expect to open Pine Ridge, a joint venture property which is a 113-site greenfield development community in Honeybrook Pennsylvania.
In the second quarter of 2025 Greenfield developments and expansions take time to build and generate returns but greatly add to the long-term value of the company. UMH has a 56-year history in the manufactured housing industry. Our asset class is highly coveted, and our portfolio of communities is irreplaceable and valuable. Over the past 15, and 10 years, UMH is the top performing manufactured housing rate. Our total shareholder return in 2024 was approximately 30%. Over five years it's 51%, and over 10 years it is 234%.
We have a proven track record of executing our business plan. Since 2020, UMH has increased the dividend by approximately 19%. Our business plan has positioned us with 3,300 vacant sites and 2,400 acres of vacant land to continue our organic growth. This organic growth should allow us to generate similar earnings growth and operating results for the years to come.
Additionally, with our strong balance sheet, we are prepared to execute on compelling acquisitions as they become available. And now Anna will provide you with greater detail on the results for the quarter.

Anna Chew

Thank you, Sam. Normalized FSO, which excludes amortization and non-recurring items, was $19.2 million or [$0.24] per diluted share for the fourth quarter of 2024 compared to $15.4 million or $0.23 per diluted share for 2023, resulting in a 4% per share increase. For the full year 2024, normalized FSO was $69.5 million or $0.93 per diluted share compared to $54.5 million or $0.86 per diluted share for 2023, resulting in an 8% per share increase.
We were able to obtain this increase in normalized FFO despite our operating results being impacted by our investments in growing the company to value-add acquisitions and developments and increasing expenses due to inflation. Rental and related income for the quarter was $53.3 million compared to $49.2 million a year ago, representing an increase of 8%. For the full year, rental and related income increased from $189.7 million in 2023 to $207 million in 2024, an increase of 9%.
This increase was primarily due to the increases in rental rates, same property occupancy, and additional rental homes. Community operating expenses increased 8% during the quarter and 7% for the year. This increase was mainly due to increases in payroll and payroll costs, real estate taxes, insurance, professional fees, waste removal, water expenses, and sewer expenses.
Despite the increase in community operating expenses, community NOI increased by 8% for the quarter, from $28.7 million in 2023 to $31.1 million in 2024 and increased by 10% for the full year, from $108.4 million in 2023 to $119.7 million in 2024. Our same property results continue to meet our expectations. Same property income increased by 8% for the quarter and 9% for the year, generating same property NOI growth of 8% for the quarter and 10% for the year.
From a liquidity standpoint, we ended the year with $99.7 million in cash and cash equivalents and $260 million available on our credit facility. We also had $138 million available on our revolving lines of credit for the financing of home sales and the purchase of inventory, and $55 million available on our lines of credit secured by rental homes and rental home leases.
As we turned to our capital structure at year end, we had approximately $615 million in debt, of which $486 million was community level mortgage debt, $28 million was loans payable, and $101 million was at 4.72% series A bonds. 99% of our total debt is fixed rate. The weighted average interest rate on our mortgage debt was 4.18% at year-end compared to 4.17% at year-end last year. The weighted average maturity on our mortgage debt was 4.4 years at year end and 5.3 years at year end last year. The weighted average interest rate on our short-term borrowings was 6.54% as compared to 6.98% last year.
In total, the weighted average interest rate on our total debt was slightly lower at 4.38% at year-end compared to 4.63% at year-end last year. As of year-end, we had 23 mortgages totalling $115.2 million due within the next 12 months, of which 10 mortgages totalling $45.9 million are due in the first and second quarters of 2025.
We are in the process of refinancing these mortgages with Fannie Mae. We believe that proceeds from these refinancings will exceed their current balances. At year end, UMH had a total of $321 million in perpetual preferred equity. Our preferred stock combined with an equity market capitalization of over $1.5 billion and our $615 million in debt, results in total market capitalization of approximately $2.5 billion at year end as compared to $2 billion last year, generating an increase of 23%.
During the year, we issued and sold 12.5 million shares of common stock through our common ATM programs, generating net proceeds of approximately $220.6 million. The company also received $10.2 million including dividends reinvested through the. In addition, we issued and sold 1.2 million shares of our Series D preferred stock during 2024 through the preferred ATM program, generating net proceeds of approximately $28 million.
Subsequent to year end, we issued 270,000 shares of common stock through our common ATM program, generating net proceeds of approximately $4.8 million. In addition, we issued 49,000 shares of our Series D preferred stock through our preferred ATM program, generating net proceeds of approximately $1.1 million.
From a credit standpoint, we ended the year with net debt to total market capitalization of 20.8%, net debt with securities to total market capitalization of 19.5%, net debt to adjusted EBITDA of 4.5 times, and net debt less securities to adjusted EBITDA of 4.3 times. Interest coverage was 3.4 times, and six charge coverage was 2.2 times.
Additionally, we had $31.9 million in our we securities portfolio, all of which is unencumbered. The portfolio represents only approximately 1.6% of our underappreciated assets. We are committed to not increasing our investments in our meat securities portfolio and have in fact continued to sell certain positions. We are well positioned to continue to grow the company internally and externally and are introducing 2025 normalized FFO guidance in a range of $0.96 to $1.04 per share or a dollar per share at the midpoint.
And now let me turn it over to Eugene before we open it up for questions.

Eugene Landy

We have a mission to provide the nation with high quality affordable housing. We have made strides in executing this mission through the acquisition and rehabilitation of older communities, the development of expansion sites, and new communities, and our financing of home sales. We have the best quality affordable housing at our price point.
UMH is a leader in the manufacturing housing industry. We have worked with MHI and our manufacturers to improve our product and provide housing solutions in both rural and urban settings. We have championed the duplex manufactured home which allows us to increase density and provide affordable housing in more expensive markets.
We have also worked with GAF to [pilot] a solar home where solar shingle, unlike solar panels, are installed at the factory. This will ultimately reduce our monthly payment, thereby giving them more discretionary income. Installing singles at the factory greatly reduces the cost. Additionally, we are working on obtaining long-term patient capital through our opportunity zone fund and our joint venture with [N Been].
There are many opportunities available, but they take time to upgrade, develop, and fill. With the availability of long-term patient capital, we are able to continue to upgrade our existing communities while increasing the pace of development and value add deals and growing nature's future acquisition pipeline.
Our country needs an affordable housing solution. We are working diligently to do more to help provide this housing and position manufactured housing as the preferred solution to the problem. We've done a lot over the past 56 years, but we have a lot more to do with a strong balance sheet and growth opportunities. 2025 should be an exciting year for UMH.

Question and Answer Session

Operator

Thank you.
(Operator Instructions)
Our first question comes from Gurav Mehta with Alliance Global Partners. Please go ahead.

Gaurav Mehta

Thank you. Good morning. I wanted to, go back to your comments. I think you men mentioned four acquisitions on the contract. I wanted to get some more colour on those acquisitions, how those acquisitions are sourced, and is there any value add up opportunity in those acquisitions.

Brett Taft

Yeah, Brett Taft here. So yeah, as you mentioned, we've got communities under contract now. Previously we had two communities under contract. So, we've increased that pipeline by two communities, both located in New Jersey. Those communities contain 266 sites. They are 100% occupied. The purchase price on those is $24.6 million or about $92,000 a site. Those two communities are obviously stabilized given the high occupancy rates. We do have some upside there in turning over a portion of the homes and increasing the rents to the market because they are New Jersey.
Additionally, there's an opportunity for sales profits as we remove some of the older homes in the community, which there's not too many. We'll also be able to increase our brokerage income there through reselling tenant homes. The two communities, the two additional communities are in Maryland. They're the same two communities we've had under contract for a while now. We've been working through some diligence matters with the seller.
We believe we're close to the end of that. Process and those should close in the second quarter. So, these four communities, $39.2 million total should close in the first half of the year. Things can change and we'll see where we land, but we're happy to grow the pipeline. We're looking at a lot of additional opportunities and think we're going to find more deals that meet our growth criteria. You also mentioned value add component.
The only deal with a real value adds component there is one of the two Maryland properties. It's about 70% occupied. There are 45 vacant sites. We'll implement our typical strategy upgrading the community, paving the roads, making sure the infrastructure and the amenities are in place, and then we'll put our rental home program in and drive occupancy growth.

Gaurav Mehta

Okay, thank you. Second question I wanted to ask on the mortgage. I think you said you're looking to refinance with, Fannie Mae for mortgages coming due in the first half of 25. Just wanted to get some more colour on what kind of interest rate should we expect on those refinancing.

Anna Chew

Well, we are using Fannie Mae and we are in discussions with Fannie Mae. As a matter of fact, we're in the due diligence process in that respect. Based on the current. Interest rates, we believe that we will be under 6%, probably in the 5.5 to 5.3/4 range, and we believe that the proceeds from it have, is more than our current balances, so we will be able to take additional capital out of those refinancings.

Samuel Landy

Sam here, I just want to mention when we refinance these properties, we get appraisals and appraisals prove everything we always say. You take every dollar we paid for a community, every dollar. We put into it, and 10 years later. They double in value. Add to that.
I looked at one of the communities being refinanced where we had built a 10 lot expansion years ago, but back then the expansion lots cost approximately $50,000 per lot, and we were adding sales profits, earning sales profits, so the net cost of those lots was, significantly less than $50,000 and today those lots appraised at $102,000 per lot.

Richard Anderson

Okay thanks. Last question I have is on G&A. I wanted to get some more colour. Was there any non-recurring, items in the 4G&A that you guys reported?

Anna Chew

It on in the G&A, yes, it did increase for the fourth quarter. That was primarily due to additional bonuses that we accrued for because of our good operating results. Over the year, we record the amount that's based upon again, current earnings and current operations, but at year end. And what we do is we look at the whole picture and see how much we need. In total, I think G&A did go up about 8%. So therefore, we believe that that is probably the going rate into next year around there anyway, 7% to 8%, depending on, of course, on inflation and other things that we do.

Richard Anderson

Okay thank you that's all I had.

Operator

And the next question comes from Rob Stevenson with Janney. Please go ahead.

Robert Stevenson

Good morning, guys. Anna, what are the big swing factors that cause you to report the high end versus the low end of your 2025 guidance range?

Anna Chew

I will give that to Jim. Jim,

Jim Lykins

I would say the big two are home sales and acquisitions.

Robert Stevenson

Okay, so at the top end, you do more than the four that you guys have talked that Brett talked about before, and then, you'd also be doing more home sales than what you did in 2024.

Brett Taft

Exactly. Okay, just to add on the home sales comment, over the past few years we've invested a lot of money into our expansions which are now opening. They're getting a lot of positive traction, and you know there's always a variable in the pace and the timing of sales. So, we've got the opportunity in Maryland at Cinnamon Woods, I believe it's 60 lots which we've just opened. Those should be highly profitable sales. The question is how many and how quickly do we gain traction.
Holiday Village in Nashville, which 2 years ago we had a new expansion open. We sold 36 new homes, $5 million in volume. That was an exceptional year. It was so good that we ran out of lots. So, you know that really wasn't totally reflected in the 2024 numbers, but the good news is we're opening a new phase right now with another 70 lots. So, we've got the opportunity to substantially improve sales at that location.
You look at Duck River estates down in Columbia, Tennessee, an outstanding location, only a few vacant lots right now, but we're in construction on another phase. That'll be, I believe it's 95 lots. So, I could keep going down this list, but the point being there's a lot of expansions opening. It's hard to exactly predict what sales are going to be. They could completely exceed our expectations, or it could be 10% growth over 2024.

Robert Stevenson

I guess along those same lines you've got still a significant occupancy upside at your 5 southernmost assets in Alabama, Georgia, and South Carolina. What type of monthly leasing velocity have you seen there and how has that been trending over the last 6 months or so?

Brett Taft

Yeah, we've been doing very well at those communities. I would say Alabama's probably got 40 vacant sites left to fill. We believe that at the first property down there, Deer Run we expect those sites to be full this year. The second property that we opened in Alabama, we ran into some Zoning and site plan issues. We're through those problems now and we're rapidly infilling that property over the last 3 months of the year.
I believe we've filled 20 units, but again, now we're at the point where we're bringing new inventory in, getting it set up, and have a few capital improvements we need to complete before we can, really work on filling the rest of that property. South Carolina, the first asset we acquired is basically full. There're a few vacant sites, but it's really just rental home turnover.
The second property we're again working on infrastructure improvements so we can keep putting homes in. So I'd say demand and velocity is extremely strong. It's just a function of when can we complete these improvements, when can we get the homes, and, ultimately once we have the homes in place and set up, they're renting as rapidly as we can get them in.

Gaurav Mehta

Okay, that's helpful. And then you guys talked about adding 800 new rental homes in 2025 to the portfolio. What is the average price per rental home you're buying today and how's that cost changing given the elevated levels of inflation and changes to material labour costs?

Brett Taft

Yeah, prices have actually been relatively consistent over the last year. We're, invoicing around $60,000 to $65,000 in some cases less than that based on winter discounts. We've got to $15,000 in setup. So, we're in that $70,000 to $75,000 for your typical single wide rental home. In certain cases, we're renting multi-section homes. Those are on the books for probably about $90,000 a home, but they're generating higher rents.
So that's where it's been. We were optimistic that home prices will not change too much if you go back to, the middle to end of COVID, prices have come down from there, so we're still well below that peak, and we are hopeful that it doesn't get up there again, but only time will tell.

Gaurav Mehta

Okay. And then the last one for me, how much more does it cost to put the solar shingles on one of these homes than traditional shingles that Gene was talking about?

Eugene Landy

This is absolutely amazing. To put a solar in a manufactured home in a park is over $25,000 and to put it in in the factory when you build it is under $15,000. On top of that, it is simply amazing. To see the process and that it takes less than 45 minutes to put a roof on a house. And this is a remarkable what we can do with the factory-built housing.

Gaurav Mehta

And does that number already include any type of federal or local rebates, etc. Is that net or is there benefits to you guys on top of that?

Eugene Landy

I'm not here. Go ahead. Yeah, the roof is not going to be owned by UMH in the beginning, a third-party company will own the roofing shingles. The Tenants utility bill is going to go down because of the solar roof. And UMH will be paid a small amount for use of the roof, but the big, benefit is reducing the residents' monthly utility costs through solar. The second step of this, at some point, the technology is not there today, but at some point, the factory can install the battery.
And they can install the battery at the factory at a lower cost than doing it anywhere else. And then they can install the car charger at the factory at a lower cost than doing it anywhere else. So ultimately, and it may be three years from today. I don't know when it will be, but ultimately the factory home will have a solar roof, and the owner of that shingle gets. All of the rebates, not us. It'll have a factory solar roof, a factory battery, and a factory car charger.
So that at our houses someone could park their car in the driveway, plug into their solar car charger at night because the electric coming from the battery, and charge their car at a lower fuel cost than anywhere else. So that's the ultimate objective at this moment, I think it's. 20 homes are being delivered with the solar shingle, and that's where we are.

Gaurav Mehta

Okay, so your cost on those homes isn't going up to $75,000 to $80,000. That $15,000 for the factory done stuff is being paid for by Solar run or one of those type of companies out there, and that cost is not basically hitting you guys in terms of the cost of the rental unit.
Can I get it all right, Brett?

Brett Taft

That is absolutely correct, yes.

Gaurav Mehta

Okay, so no cost no cost differential to you, that's a third party. Okay, that's helpful.
Thank you. Appreciate the time this morning, guys.

Operator

And the next question comes from Rich Anderson with Wedbush. Please go ahead.

Richard Anderson

Thanks, and good morning. So, 565 rentals added in 2024, a target of 800.
What gives you the confidence that you can see that type of acceleration on the on the rental side?

Brett Taft

Yeah, Brett here. So, if you go back to 2023 when we had adequate inventory, we were able to rent close to 1,000 homes and, including sales, it was, I think it was around 100 total homes moved from our inventory last year given the challenges we had in 2023. Obtaining the homes, getting them set up, utility issues, carrying costs related to interest on floor plan, etc.
We were just a little bit more conservative in the first quarter, which really sets us up for occupancy gains throughout the year. So, this year right now we have about, including our joint venture, 680 homes in inventory or on order, I'm sorry, we've got about 490 of those already delivered to our communities.
About 390 of those were delivered within the last six months, so we already have a better starting inventory place than we did. These homes are located in strong markets where they, generally rent as soon as they're fully set up and [COed] and ready for occupancy. So, we anticipate faster growth in the rental home program in the first half than we saw last year, and we will more aggressively order homes as we're occupying homes at these strong demand locations. Brett.

Richard Anderson

What is the chance that some of those 5 or 600 homes that are sitting in inventory don't get rented but get sold.

Brett Taft

There's definitely a good chance that a lot of those homes and inventory get sold. Again, same strategy, we would go and continue to replace those homes, and if somebody wants to come in and buy it, we will sell it to them. If somebody wants to rent it, we will rent it to them. We do anticipate growing sales last year given some of the expansions we've opened that we discussed earlier on the call, I would think that sales of new homes should be in the 200 new homes next year. I think we did about 130 last year.
136 we expect growing sales, but again, I think that we're going to see a lot more of our growth through the rental program at our high demand locations which have, historically proven that they're able to do this. Again, going back to 2023. We had one community that rented 100 homes. We had several other communities that rented 60 or 70. Those properties do still have vacancy and do still have strong demand and are doing a good job keeping their occupancy rates up on the existing rental programs. So, not promising.
We'll hit those exact numbers again, but we do believe that we'll be able to get 800 new homes in this year on the rental front and hopefully sell 200 new homes. Okay.
And then, we talked. (multiple speakers)

Richard Anderson

No, go ahead. We talked, a month or so ago about some of the changes in you referred to, maybe an ability to sell more homes with the new administration in place and so on.
I'm wondering, what your thought is about the ability to sell more, perhaps relaxing Dodd-Frank or whatever driver that might be. Do you feel like the economics are better or worse as a home renter or a home seller from your lens, or is it a kind of a wash and you just like the optionality?

Samuel Landy

Well, the important point is UMH has over 50-year history operating communities, and we have, absolutely proven that communities with factory-built homes for sale or rent work. It's that simple. We're the most efficient provider of housing because the factories provide a great product at a low price and then we provide a great community at a fair price. And there are people who only need housing on a one- or three-year basis. They see themselves as temporary.
Those are always going to be renters and because we opened the door to those. People right previously that door was closed to them. Previously the original model of manufactured home communities. Was you own the home and rented the lot. So, that whole group of people was not a potential customer. We've. Brought 10,300 of those people in as customers.
Now sales continue because as somebody lives in a rental and says, you Know this is a great community and this is where I want to live and the House, they appreciate the value, you build equity. In the house as this occurs, we get more and more sales and we've done a great job putting our communities near each other and our marketing and all those increasing sales, but add to that, the possible changes. In the finance laws, if it happens, would create a dramatic increase in home sales.

Richard Anderson

Okay, do you, when you're talking to your rental residents, is there a very clear, percentage of those people that are renting that would love to own but simply can't? I mean, do you get that that very palpable.
Sort of indication within your portfolio.

Samuel Landy

Well, we do convert resident owned homes to rentals today, they build equity in their house. They only get the rent increase on the lot rent, not on the full home rent, so they reduce the rent increase by basically 50% by owning the home. I don't talk to enough residents to give you an actual survey, but my-- the ultimate objective is 100 to 300 and maybe more of those 15-year-old homes each year could be sold to the existing resident. And we'd continue to still grow the rental home portfolio by 800 units with 800 new rentals.

Richard Anderson

Okay, that's really interesting. I would be really curious of that 10,300 of rental homes, if you ever were to do a survey, how many of them are happy as renters or would rather be an owner? That would be interesting data for me, I guess. But anyway, just a comment. Thanks very much, great quarter. I appreciate it.
Thank you.

Operator

And the next question comes from Craig Kucera with Lucid Capital Markets. Please go ahead.

Craig Kucera

Yeah, hey, good morning, guys. Your leverage has significantly dropped over the past couple of years, and I'd be curious to hear, is there a target that UMH is looking to work toward, or is it just been a matter of taking advantage of the capital markets?

Anna Chew

Craig. We are, as we've always been a conservative company. Our net debt to total market cap is usually in the 30% to 40% range. We did take advantage of the capital markets, but don't forget, every year, we are a growing company. Based on our business plan, we need between $120 to $150 million a year. So therefore, we opportunistically raise additional capital, which we believe that we will use.
Additionally, we did have $115 million in debt coming due, so we wanted to make sure that we have the capital, not only to pay down our debt, but also for to grow our company. So we did have additional, ATM proceeds last year, which is fine, which is great because we will be using it this year.

Eugene Landy

Our goal is to build at least 1,000 homes a year, and I'd like to see UMHs do 2000 homes a year. And if it costs $100,000 for the home installed and 150, 100, the total cost is $200,000 or even call it $250. So, it's $200 million to do 1,000 homes, and we'd like to do even more. So, with the capital in the business and it takes a long time to build these communities and to get the community filled and to get the rents where it's very productive, but we've been doing it a long time and we're going to continue to do it.
And we're going to continue to grow the company both equity capital, preferred capital, and debt capital. And if I can add one thing, the country is doing one thing in housing very well, and that's the government sponsored entities. What Anna said is we can get long term financing of our communities at below 6% in this market at this time, and that's simply amazing.
(inaudible) That are in different categories, offices, hotels, they don't have the advantage of the government sponsored entities and they're paying 234 points higher than we have access to the capital market, the debt market, so it's a big advantage to our sector and to UMH.

Craig Koster

Okay, great.

Craig Kucera

Changing gears, Bratt, I think your operating expense budget typically is about 5% to 7% on the same sort of basis. Is that still the expectation in 2025 or is there may be going to be a little bit more ex-access because of the very snowy winter and snow removal costs or any colour that'd be appreciated.

Brett Taft

Yeah, I would say, 5% to 7% is still the right range. Honestly 5% would be phenomenal. I think it's probably in the 6% to 7% range given, what you mentioned with Storm, snow removal, etc. I'd also add there's a few other items that are in our 8% in the fourth quarter, professional fees related to some various projects and tax appeals and things like that that increased, which we don't expect to happen next year. So, you know we feel pretty comfortable for the full year 2025 we will be in that call it 6% to 7% range. 5% would be great. There's probably going to be some other additional inflationary pressure on our operations.

Craig Kucera

Got it. That's appreciated. Let's talk about UMH finance for a second. Just given what's happened with home prices, are you seeing any change in the typical buyer versus a few years ago, are they may be better credits or higher income than they were that have been completely pushed out of maybe potentially buying a single-family home, or has credit and income been relatively constant over the last few years?

Samuel Landy

No, my belief is the widening of the affordability [gap] plus the fact that we're building these great expansions, putting in, extremely high-end homes better than any homes of the past, results.
In higher credit quality, higher down payments, you can see the percentage that pay cash for the homes. So as Conventional as conventional home sales are currently a little bit blocked, but if people can sell their existing home, you're going to see more and more of them downsize and buy a house from us all cash.
And those are going to be our highest end homes that, $250,000 or $300,000 with a lot of rents of about $750 per month. And that it's kind of more like 2006 when we were selling. The biggest, most expensive houses to people downsizing, and I see that. Occurring, for the next five years. Well, we have available. Expansion lots.

Craig Kucera

Great. Just one more for me. I'd be curious if you had any conversations with the manufactured housing builders about how tariffs might impact their business, are they worried about input costs, or maybe would there be any supply chain issues?

Samuel Landy

Brett, do you have anything there? I don't know of anything.

Brett Taft

All I can really say there is that in speaking with and ordering homes from our manufacturers we haven't experienced any issues yet.
Backlogs are still in that call it eight week range, some of them a little bit further out than that. So, to this point there haven't been any major problems. I'm sure it's something our manufacturers are worried about, but we'll update you as we get more information there.
Okay, great, thanks.

Operator

And the next question comes from John Massocca with B Riley. Please go ahead.

John Massocca

Good morning. So, with the acquisitions, I know you kind of get the cap rate, but what's kind of the stabilized return you're looking for across that entire pipeline?

Brett Taft

Yeah, so looking out over call it five years, we should be yielding in the 6.5% to 7% range on these properties.

John Massocca

Okay, appreciate the colour and then on the in-place portfolio, any change in kind of bad debt expense in for you or even anything you're seeing into this year thus far?

Anna Chew

Not at all. We still maintain approximately a 1% write-off, so we're very happy with our experience in that regard.

John Massocca

Okay. And then, how should we kind of think about, headline occupancy as you keep adding new homes to the portfolio I guess is the level we kind of saw in 4Q, indicative of where things should go just given.
It is kind of new vacancy being added portfolio every quarter if you will, because you're putting in new sites and you're putting in new rental units, etc. Or is there potential for that, vacancy number to shrink even further?

Brett Taft

Yeah, so what I would say is that there's definitely potential for this existing pool of assets and the vacancy number to shrink further. Overall occupancy in 2024 increased by 216 sites. This is the same property now brought occupancy to 88%. If we fill 800 new rental homes, sell 200 new homes, I would expect an increase in overall occupancy of 600 to 700 units. You're always going to have some turnover.
You're always going to have some obsolescence in our portfolio, so we will be removing some homes as well, which is why there's that gap there. And just thinking about it a little further, 262 units would be about 100 basis point improvement, so you know that would bring us up into the low 90% range.
Now we are out there looking for value add acquisitions that do have some more vacancy that would give us more vacant lots to fill and grow income in the future. So, this pool of assets, I would say there's definitely occupancy upside, but again, I wouldn't be surprised if we do some acquisitions that bring the overall weighted occupancy rate down.

Anna Chew

Now I was just going to say we believe the same store will continue to go up. It's just the overall based upon our business plan of buying value add communities.

John Massocca

Okay, and then now with that in mind, how should we think about the split in future acquisitions between on balance sheet and JV? I mean, I guess how value add would an asset need to be for it to be better structured in a joint venture?

Samuel Landy

In a sense, we don't know that the answer to that question. I'll tell you why. We have a joint venture with Nuveen for development, which works extremely well for both. Both us and Nuveen. And one of those properties, my belief is already profitable. Both us and Nuveen. And one of those properties, my belief is already profitable.
We hesitate to do more new development at this moment until more, we're adding earning more sales income and more rental profits. Once these three development deals are profitable, next time we might consider doing six because it won't negatively impact our earnings as great as six would today. And then on turnaround properties, we created the opportunity zone fund.
If we succeed in getting that law amended, so any investment in in affordable housing in an op opportunity zone would Not pay the capital gains tax at the end of 10 years, then we could do many more turnaround properties in the opportunity zone without hurting UMH's earnings. So, it goes back to our number one goal. Keep increasing FFO per share.
So, we're in a position to. Increase the dividend. Weigh every acquisition with that thought in mind. But those two vehicles, the new Green joint venture and the opportunity zone fund, give us the opportunity to Increase development and rehabilitation without going away from our main goal.

John Massocca

Yeah, it makes sense. And then last one for me, any update on the kind of single-family housing developments that that were kind of potentially in the pipeline, either the one in New Jersey or any other kind of opportunities that were out there?

Samuel Landy

Craig Koster, you want to cover that.?

Craig Koster

Sure, we recently entered into a preliminary agreement with a leading national luxury home builder regarding the potential formation of a JV to develop 131 acres in Bonn, New Jersey, adjacent to one of our existing communities.
We're the parties are currently engaged in the 90 day due diligence period during which we intend to commence preliminary discussions for approvals with the municipality. If the parties elect to proceed, then the potential JV partner would seek preliminary subdivision and site plan approval over the next two years, and they would be responsible for the cost of doing so. If the approvals are obtained, the joint venture would then be formally established.
The JV partner would construct the roads, the infrastructure, the site improvements, and then sell the improved lots to an affiliate of the joint venture partner. Would construct these luxury single family homes to sell to purchasers. UMH would contribute the real property to the JV and receive a percentage of the gross sales price of each of the homes. It's anticipated to be 20% minus certain deductions.

John Massocca

Okay, was very detailed. I appreciate it, and that's for me.

Eugene Landy

Well, if I could add one more thing, the nation needs 4 million houses. If it needs 4 million houses with because the shortage, we must have 4 million lots. The builders in this country, they tremendous size and they build a lot of lots, but you're talking about a need for land, the need for approved sites. UMH has how many acres.
We have 2,400 acres that we hope eventually to use that for residential development and either use it for our own manufactured housing or if it's more valuable for single family development, it will be used for that. But the nation has a shortage of land and we have always bought land and they.
That is adjacent to our existing communities. We've done that for many years, and we have a very nice portfolio of land that we're now putting to work.

Operator

This concludes our question and answer session. I would like to turn the conference back over to Samuel Landy for any closing remarks.

Samuel Landy

Thank you. Operator. I would like to thank the participants on this call for their continued support and. Interest. In our company. As always, Jean, Anna Brett and I are available. For any follow-up questions. We look forward to reporting back to you in May with our. First quarter of. 2025 results. Thank you.

Operator

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