Craig Allen - Chief Financial Officer Chad Daffer - Chief Executive Officer.

David Walrod - Jones Trading Patrick Marsh - Alex.Brown.

Good day, ladies and gentlemen. At this time, I would like to welcome everyone to America First Multifamily Investors, L.P. NASDAQ ticker symbol ATAX First Quarter 2017 Earnings Conference Call. During the presentation all participants will be in a listen-only mode.

After the speakers' remarks, you will be invited to participate in a question-and-answer session. As a reminder, this conference call is being recorded. At this time, I would like to turn the conference call over to Craig Allen, Chief Financial Officer of the company. Sir, please begin..

Thank you. Welcome to ATAX's first quarter 2017 earnings conference call. During the course of this conference call, comments we make regarding ATAX, which are not historical facts are forward-looking statements and are subject to risk and uncertainties that could cause the actual future events or results to differ materially from these statements.

Such forward-looking statements are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the use of words like, may, should, expect, plan, intent, focus and other similar terms.

You are cautioned that these forward-looking statements speak only as of today's date. Changes in economic, business, competitive, regulatory and other factors could cause our actual results to differ materially from those expressed or implied by the projections or forward-looking statements made today.

For more detailed information about these factors and other risks that may impact our business, please review the periodic reports and other documents filed from time-to-time by ATAX with the Securities and Exchange Commission.

Our internal projections and beliefs upon which we base our expectations may change, but we will not necessarily inform you if they do. Today's discussion will include non-GAAP measures and will be explained during the call.

We want to make you aware that ATAX is operating under the SEC Regulations FD and encourage you to make full advantage of the question-and-answer session. Thank you for your participation and your interest in ATAX.

During our call today, we are going to start with Chad Daffer, our Chief Executive Officer who will discuss overview of the Partnership and execution of the strategy at ATAX during the first quarter 2017.

I will come back and discuss a little bit about the highlights of our first quarter 2017 financial results and then we will have some closing remarks from Chad before we take questions-and-answers. I will now pass the call over to Chad Daffer, ATAX's CEO..

Thank you, Craig. Welcome all to the first quarter 2017 ATAX earnings call. As Craig mentioned, I’d like to highlight a few of the significant transactions from the first quarter and then we will talk about the financial performance of the Partnership then open it up for questions.

ATAX investments in March of this year, ATAX invested $60 million in six multifamily housing revenue bonds continuing our efforts in strategic growth of the portfolio. Mortgage revenue bond portfolio was collateralized with individual multifamily housing assets located in 17 states across the United States.

With growth of the portfolio of over $1 billion in assets, we have maintained our focus on disciplined credit underwriting and work with the best and brightest borrower developers in the housing industry.

Significant milestone of $1 billion in the first quarter with our assets on the balance sheet and our continued effort to grow the Bent Tree housing efforts, ATAX closed another one of eight Bent Tree projects, invested in corporation with development partner is an ongoing part of the growth pipeline of the high quality assets we are currently underwriting additional Vantage projects in multiple markets in the south of Mid-Atlanta.

In the area of risk mitigation, securitization and less use of leverage we have discussed in the past ATAX use both fixed rate and variable rate tender option bond financing programs, as well as taxes and bonds securitization to provide leverage to the portfolio and enhance yields -- invested yields.

In February, ATAX closed on 19 single asset trusts totaling a $106 million. Locking in 10-year fixed rate financing generating leverage, taxes and returns in the midteens for our investors. The proceeds of this transaction we will use to pay-off our line of credit and provide additional liquidity to fund the cash need to the Partnerships.

As part of our continued effort dating back to fall of 2014 ATAX closed on the fee simple sale of Northern View apartments. The property is located across the campus from Northern Kentucky University, due to location ATAX has purchased the LP and GP interest in the affordable housing property with the goal of converting said property.

From buy bed rental execution, excuse me, from buy the unit rental execution to a buy the bed student housing rental property, ATAX team work in corporation with Burlington Capital Real Estate for the completion of rehab and stabilization of the property prior to closing. This transaction generated pre-tax gain on sales of over $7 to our investor.

We continue evaluate the six additional real estate assets in the portfolio for the highest best use and appropriate time to exit and we will look forward to speaking with you all in the months to come.

Our continued effort on ATAX preferred stock tax, in the first quarter of ’17 we closed two additional institutional investors in the amount of $16 million, increasing the total investment over the past 12 months to the total of $57 million.

We anticipate the balance of the available preferred stock to close $43 million in the months to come providing additional low cost non-boarding, non-dilutive source of capital to the Partnership. At this time, I would like to have ATAX CFO, Craig Allen discuss the first quarter Partnership performance..

Thank you, Chad. I just want to review some of the significant transactions that Chad spoke about just recently here. We did buy a six mortgage revenue bonds during Q1 for about $60 million. As Chad mentioned, we did sell an MF property located in the Kentucky for $13.8 million.

The amount of the proceed the gross sale price, excuse me, the gross gain on sale is about $3.2 million, net of income taxes and Tier 2 income to the general partner and before direct and indirect expenses. Chad spoke a little bit about our investment in the Vantage product. We contributed about $9.5 million in Q1 to that effort.

Also we refinance two short-term lines of credit. We had a $20 million short-term line of credit with Bankers Trust and that was paid off in the first quarter.

Secondly, we had $40 million of an acquisition unsecured line of credits with Bankers Trust as well and both of these lines of credit were fine -- were paid off through longer term fixed rate financings. In addition, in the first quarter, we securitize approximately $107 million in Term AB debt financing.

Again that -- there were approximately 19 Term AB Trusts that we entered into at a fixed rate -- fixed term with no mark-to-market and no collateral posting.

Series A Preferred Units, we issued two additional -- we have two additional investments in preferred units during the quarter approximate about $16.1 million and again, just as a reminder, that's 3% mezzanine capital that is non-cumulative, non-voting and non-convertible.

We have about $43 million yet to be able to fill through the preferred investments program. At March 31st we have approximately $639 million in mortgage revenue bonds and about $99 million in our MF properties segment. Total assets at March 31st, it was the first time in ATAX’s history that we've exceeded $1 billion in total assets.

Since December 31, 2016 we’ve seen an 8.47% increase in total assets. Mortgage revenue bonds had increased about $8.6 million from $680 million to $739 million at March 31st of this year. To give you an idea how we've increased our investment in mortgage revenue bonds in the past.

On December 31, 2012, 35.1% of our asset base was comprised of mortgage revenue bonds. On December 31, 2016 that increased to 72% and now in December -- and now in March of 2017 were approximately 74% of total mortgage revenue bonds versus our asset base.

Our total revenue for the quarter -- first quarter 2017 was $16 million, an increase of about 7.4% over the first quarter of 2016. Our net income basic and diluted was $0.10 per unit in Q1 of 2017 versus $0.04 in Q1 of 2016, an increase of about 150% quarter-over-quarter.

Our book value per unit and as we've mentioned on previous calls, our book value per unit can swing dramatically based upon our marks, as we record those marks and affect the curing value quarter-to-quarter.

March 31, 2017 our book value per unit was $4.95, an increase of about 7.5% over the end of year 2016 when the book value per unit was about $4.65.

As I mentioned, the equity can be impacted by the marks, also its sensitive to changing interest rates and obviously we have seen some improvement in Q1 due to the transactional activity in 2016 and some effect of the Northern View sale in Q1 of 2017.

Our CAD or cash available for distribution was $0.14 per unit in Q1 of this year versus $0.10 in Q1 of 2016, so we have about a 40% increase in our CAD. What I like to do then, some of the positive effects are -- that we’ve talked about already.

Obviously, changes in interest rates can be have some impact on our CAD, increased revenue can have some impact and in this case it was a positive impact, MF property sales and then the availability of low cost non-dilutive financing that we’ve talked about as well at this point.

What I like to do is just spend a couple minutes on some of the subsequent events. We've had a couple since March 31, 2017 that we've made you aware of in the 10 Q as well. But we have an increase of $10 million in our unsecured line of credit and we now have $50 million in our unsecured line with Bankers Trust.

The short-term debt financing that we use for acquisition of mortgage revenue bonds. Also land -- we have a piece of land that's approximately $3 million that we anticipate closing in St. Petersburg, Florida in Q2 2017. At this time, I’d like to turn it back to Chad for some closing remarks before we take questions from you..

Thank you, Craig. With the close of Q1, improvements that we have seen in our topline revenues, earnings and cash available for distribution of $0.14 in the first quarter.

The opportunities that we are seeing in the marketplace from our developer borrower clients, we will continue to stay focus on possible changes coming out of the new administration in DC and remain very optimistic about the balance of 2017.

I’d like to thank everyone for their continued support of ATAX and I’d like to take questions from the folks on the phone here at this time. Thank you..

[Operator Instructions] Our first question comes from the line of David Walrod from Jones Trading. Your line is open..

Good afternoon..

Good afternoon, David..

Hi, David..

Just wanted to ask a couple questions, can you talk about your pipeline for the multifamily property sales and then on the St.

Petersburg sales specifically, have you disclosed any gains that might associated with that sale?.

First question, pipeline, our pipeline is solid. It’s on hold as it relates to the LifeTech properties that are being proposed for 2017, because of the uncertainly in the LifeTech market based on the proposed changes in the corporate tax law. We probably -- we have done $100 million in the first quarter.

That’s probably above as much as we did in all of ’16. We have got a nice pipeline but until we can -- we see that there is some movement in the LifeTech pricing market with our developer clients. That portion of our business will be on hold. I don’t think we have lost any of it due to competitive loans -- plan to finance. I think it’s just on hold.

We have good dialogue with them.

Handful of the biggest and brightest developers across the country and we continue to discuss options to structure around our flagship market, but I just don’t see right now based on our conversations with these developers anything moving in front of a clear side marketplace and how they are going to price the credits going forward.

Lot of things has been proposed. I think the developers that have the ability to go to the side lines and wait for clarity in pricing we will do so subject to any new developments. So that part of our business is on hold.

We still have a solid pipeline of C-3 Rehab business that we are underwriting and looking to generate additional growth in the portfolio and then we have probably a half dozen of the Vantage product that we are evaluating other side in the south of Mid-Atlantic for probably two or three closing yet this year.

So two of the three are still solid, I still think that we will do probably $200 million to $250 million in first mortgage bond origination. We will probably do $50 million plus or minus in Vantage.

So we are still $250 million to $300 million with our existing platform and our existing relationships, that’s consistent with what we have seen in the years past subject to a fractured LifeTech market. Your second question has to do with the sale of the raw land in Florida. That property is set to close here later this week.

It’s basically going to be a loss. There is not a real material gain or loss on the sale of that asset. We have identified it as a development site in years past. For a number of reasons we chose not to move forward and we have moved out of that position with the sale of the asset, so….

Okay. That’s all….

… your interest and coming and join us. I think you did a great job in understanding our business and hopefully we can continue to discuss, we can share this information with our investors going forward..

I appreciate that. Thank you.

specifically though, on the -- with the multifamily properties that you have, but you sold the one in Kentucky this past quarter, is there anything tied-up there in regards to potential properties that you would be existing?.

I think we started this discussion David back in the fall of 2014 with the effort to reposition our balance sheet moving out of our alternative bucket assets, our real estate own assets and allocating those ones back to our core discipline which is the multifamily mortgage revenue bonds.

We have the -- I have the privilege of time and people to reposition assets and pick the top of the cycle, you can’t pick the top, but the appropriate time based on what we saw and activity in the market for sales. Right now we have got six assets in that portfolio.

We are always evaluating potential sales or restructuring depending on we feel the highest and best use of those assets would be not only short-term but long-term for our investors. The sale of an asset that we have talked about that we are looking to move out of for all the obvious reasons.

We still think that there should be some decent upsize and acquisition. The legacy assets that you look at in the portfolio, we are ready to make a decision on, only they are going to rehab them, reposition them, they need a little bit of tenure love and care and then look at probably repositioning in a new trust possibly going forward in the fall.

So of the six assets and a couple legacy assets, that’s an ongoing effort to pick the appropriate time and structure to exit those positions, okay..

Okay..

I wouldn’t be surprised if you see one or couple of them be owned by new entity here as we approach it..

Great.

As far as the Series A Preferred, do you -- would you still target having that $100 placed by say in the next couple quarters?.

We were -- we just -- we did two trades this is in a first quarter. We told about $16 million. One of them was a second bite of the apple for an existing institutional investor.

We currently have $43 million outstanding for the $100 million offering, of which two of the three that are looking to close on those hopefully in the second quarter or third quarter. One is -- two of them are renewing, adding to their position and one of them it’s a new position for them.

So we fully anticipate to be complete on the preferred offering by the end of the third quarter and hopefully soon..

Great. My final question, it looks like your G&A expenses just pick up a little bit in the fourth quarter and the first quarter relative to previous quarters.

Should we think about these levels as a current run rate or was there some kind of non-recurring or one-time expenses in that figure?.

One-time..

There are -- we are going to testing, I am going to give you my perspective on it then I will let Craig talk into greater detail. Remember the G&A is a portion of the line item that comes into that as part of our administrative expense on the portfolio. As the portfolio grows an asset so will that line item.

Remember as part of the Limited Partnership agreement the admin fee of 45 basis points is how we cover the costs of operating the ongoing surveillance and asset management of the portfolio. So that’s part of that. Always keep that in mind.

The other part -- the other two moving parts that are going to be somewhat volatile will be the interest rate expense and the related expense for brokerage fees as we move in and out of assets in the portfolio. There were some three considerations as I look at it and I keep mindful. Craig, would you like to add anything to that..

Yeah. David, besides the components that Chad spoke, there are some one-time items in there as well too and some of those are related to asset sales, and those direct and indirect expenses that may result from the asset sales.

I think another notable component is, as we've increased the mortgage revenue bond asset purchases we have also levered those purchases as well too and I know Chad mentioned little bit about interest expense.

But interest expense will also be ticking up slightly as we have purchased the mortgage revenue bonds not only in Q4 of 2016, but we had substantial acquisitions in Q1 of 2017 as well too.

So there are some, what I would call controllable, you have your controllable expenses like would be your normal G&A, your salaries, wages, benefits, things of that nature. You would have some that are dictated by the LPA, the assets administration expense and then you have some other mixed, some variables, some fixed.

So, I think, you have a lot going on. And I think it's a little bit -- when you look at history, David, it’s a little bit distorted by the fact that we've had significant growth and some sales over the last two quarters..

Okay. That’s all my questions. Thanks for your time..

Thank you, David..

Thanks, David..

Thank you. Our next question or comment comes from the line of [ph] David Roffchild (23:48). Your line is open..

Thank you. I am an individual investor.

On the CAD of $8.3 million, does that includes the profits you made from the sale of the property in Kentucky, correct?.

Yes. It does. That’s correct..

So, if you back out the capital gain profit there, you're not quite, I guess, based on operating cash flow, you're not really covering the $0.10 dividend yet, are you?.

Well, we look at CAD and we look at not only in dollars but in per unit each quarter as a combination of interest income, of any gains or losses that may have on assets that we sell, because those are just a normal part of our transactional activity and we may be coming in and out of assets on a regular basis, so we look at that CAD of $8.3 million as being all recurring with a couple different components.

And in previous quarters, we’ve talked about, there may be something -- there may be some lumpiness if you will based upon the activity not only the purchases that we make but the sales that we choose to make as well too. So from the two components, we always talk about covering our CAD if you will.

We have successfully covered our CAD not only in 2016 but through Q1 of 2017 as well too..

Okay. With the capital gains in there included, okay..

Yeah. That’s correct. I think your analysis is accurate so that the -- if you look at reoccurring and non- reoccurring you are going to have capital gains on some of the sale of the underlying assets, you are also going to have reoccurring off -- the income off the portfolio themselves.

And so as you look at, if you want to look at the CAD on an ongoing basis and make some assumptions in your earnings model, here is the back of the envelope and I am sure you have already done this. You are going to look at balance sheet and see the uninvested cash. You are going to look at the preferred stock that is yet to be placed.

You are going to look at the lines of credit. You are going to make some assumptions on liquidity advances that relates to sale of assets and securitization proceeds for the investment. What assumptions you make on those line items that will be for cash available for investment.

Make those assumptions and then look to deploy that capital into our core discipline of multifamily.

Make some assumptions on the weighted average coupon of that portfolio of new assets and that will be your earnings on an unleveraged basis going forward and that’s -- that will help you try get your hands around on a looking forward basis what can might look like in Q2, Q3, Q4, Q1 of next year and so.

That’s the back of the envelope on available for investment and how you can look to see that. Based on the assumptions you made, are we moving towards a reoccurring CAD coverage discussion at some point in the future. I think myself along with many others could argue if that’s the case..

Okay. And then…..

I think one other things that I would add to that is, in -- we keep talking being able to achieve or make our CAD. In 2015 and 2016 we'd been successful doing that, based upon the first quarter results of 2017, again we remain optimistic about 2017, but we continue to focus on achieving that $0.50 CAD number each year.

Again that's our strategic direction and everything that we’ve talked about today has that in mind. Thank you..

Okay. That’s very helpful. The other question is on my K-1 this year, I have always assumed you guys are around 85%, 90% tax free. It seem like there is a little more taxable components like K-1 in previous years and my….

Yeah. There is-- I mean, there is some good news to that and that we are about 91% to 92% tax exempt on the interest income that we earned from the fund.

The additional taxable or the dividend income that has been created this year has come from sales that have happened of our amateur MF property portfolio and we have a company that is a C Corporation that is 100% owned by ATAX and these properties are held in that C Corporation.

Once we sell these properties at gain then we pay tax at that C Corporation. The only way to move money then from that C Corp. to ATAX and use those proceeds and reinvest those proceeds is through dividend. So it's an internal dividend but for tax purposes nonetheless that dividend is considered to be taxable.

So the good news, I guess, it's good news and some interesting news for K-1 holders, but it is ultimately good news is, is that additional little bit of taxable income in 2016 was generated through capital gains. Those capital gains were then reinvested in tax-exempt mortgage revenue bonds at the ATAX level..

Okay. Thank you..

You’re welcome..

Thank you. Our next question or comment comes from the line of Patrick Marsh from Alex.Brown. Your line is open..

Hi, Chad. Hi, Craig..

Hi, Patrick. Thanks for calling..

Good. Good. One of the things I noticed in the last couple of quarter is you guys have been doing a lot of the Term AB financing, even moving a lot of your term financing into that structure and now so much at the agency level. So I have two questions.

First one is, can you kind of go into a little bit of the benefit as to why you’ve been moving your assets and financing into that structure.

And the second part of the question is, going forward you continue to plan to use that for new acquisitions, as well as when your debts start to roll off?.

No. That’s good question, Patrick. Thank you. Yeah. It’s -- there is multiple answers that has to do with cost of borrowing, has to with risk mitigation, has to do with what we think on interest rates going forward. We undertook an effort a few years back to is, everyone on sales are included, we are concerned about the rising interest rate environment.

We are heavily weighted with variable rate bond financing through taxes and bond secured. Our friends in the street, we address that with a fixed rate 10-year term bond financing program that would take the variable rate risk out of the risk profile of the platform for the use of leverage.

In doing that we come from a tax exit bond securitization like seven-day floating variable rate mode to the 10-year fixed rate mode, it’s not subject to mark-to-market and we are still achieving tax exempted leverage returns in the midteens. So it definitely has helped in our risk profile from a rising interest rate environment.

That said, at sale cost in order to mitigate that risk in the form of interest rate losses, obviously, the short end of the curve is a [inaudible] (31:51) plus the cost of the stack and we are going to move out the curve on the 10-year term.

We are going to increase our cost of interest rate expense, therefore lowering our leverage returns to the investors. We think it’s the appropriate move from a risk profile perspective. This is -- this fund and the ATAX is about getting singles or maybe double every once in a while on a low risk profile.

We don’t take -- we try not to speculate on any type of derivatives. We try not to -- we try to mitigate interest rate risk at our cost and be in a position to have a highly predictable distribution to our investor on a tax exempt basis. So it’s all the function of risk. It’s the function of cost and where we think the curve is going going forward.

I think interest rates personally -- I think interest rates will trade will be range down and trade within a pretty tight end through the balance of this year.

We will continue to bifurcate our efforts knowing that as we have X amount of variable rate risk that has been capped through the use of interest caps and protecting ourselves for quick change in the interest rate environment on the short end of the curve and then we will try and take a portion of that portfolio and put it on the long end of the curve at a much lower risk profile at the higher cost.

So the great thing about the Term AB structure is that it’s an alternative plan of execution on a fixed rate mode that is not subject to mark-to-market and it’s a great way to manage that interest rate risk through structuring around it on a long -- on a 10-year tenure. So we will continue to do it.

I think it just another area and are quicker of how we try to -- maybe risk little bit leverage return to our investors..

Great. And a question….

If you take a look at the portfolio we are about 50/50 between variable and fixed on the core portfolio or housing bond portfolio and of that 50% of the debt, the variable rates starts about 85% that has currently capped with interest rate caps that are in place and we are always actively managing to roll down the curve on the two lower the stripe price on those caps in order to greater mitigate that interest rate volatility..

That’s all. Thanks..

Sounds good..

Thank you, Patrick..

Thank you. Our next question or comment comes from the line of [ph] John Bond (34:36), private investor. Your line is open..

Hi, guys. Great quarter. Individual investor here.

My quick back of the envelope calculation was that the gain on the CAD from the sale of the MF property was somewhere about $0.07 or $0.08, is that correct, isn’t correct?.

No. That’s a little bit high, John. I think, that number is going to be close to the $0.045 to the low $0.05 range..

Okay..

Again, we had about a $3.2 million gain before some direct and indirect expenses of the sale. So it’s -- depending on how the rounding goes. I mean, it could be somewhere right around -- it’s probably right around $0.05, again, high 40.04 to low $0.05..

So you just about -- met the CAD right there, we are all here because of the CAD, is there any way that we can get some visibility with the appreciation in the portfolio to try to estimate what the potential CAD increase would be for sale and as an indirect question from there, is there any way to try to calculate, what dictates the increase in CAD from a sale and all of that reoccurring and did you saw property to loss, is that a reduction from CAD, I mean, how the property sale impact CAD in accordance with the Board of Directors thinking? Thank you..

No. We are trying….

Sure..

I will take a portion of this and I will let Craig way in as well. A number of different questions there and no particular hold importance.

When we evaluate the sale or restructuring of an asset in the real estate portfolio, it has to do with our underwriting either a restructuring of this capital structure and a sale up to a friendly developer either core property developer through the issuance of a private activity bond or through the sale to the C-3 developer through the issuance of C-3 bond.

What we think we will be able to retain and leverage returns over the life of that position. We have added into what we think the marketplace is on that asset on a fee sample sale given where we are at in the real estate cycle. And so those right to the highest and best use type of discussion.

You want to pay me now or do you want to pay me later and hopefully we are not -- hopefully we have not have any big losers not gone with as of late but we have been forcing up to be in the right asset class, very strong market for a number of years.

So we want to -- we always try and take a look at is a better to restructure and securitize and put it in the bond portfolio so been it over time or is it better based on what we see in the asset than what we see in the market as people wanting to come in and pay higher price point than what we evaluate the asset at.

I wish I could say that there was a magic bullet, it’s just aren’t been on the underlying asset and they say better to do it now or do it later and it’s that simple. And it’s much easier to do in strong market as I mentioned before.

The second part of your decision, your question, I should say, has to do with loss -- recognize losses or gains on sale of fee simple real estate and/or alternative investments and even in the case if we have a bond we have been fortunate enough not to sale any bond at a loss in history but I’ll let Craig to walk you through the accounting treatment on the sale and a potential gain or loss on the sale of that asset.

Go ahead, Craig..

Sure. Good questions, John. You had many end there, there were all good questions as it relates to CAD. So gain or loss the sale because it's considered to be just a normal card of our business and not a one-off or an extraordinary item, those do factor into our, not only the dollar value of CAD, but the per unit value of CAD as well too.

So gains would factor in there because it's a normal part of our recurring business, as well as losses. And again, as Chad mentioned, we've been fortunate not to have too many of those over our 30-year history, but if in fact we did realize a loss for some reason that would reduce -- it would reduce CAD.

So unfortunately we can't consider that an extraordinary item and exclude losses. Yet another more complicated question and I'll give you a generic way to look at this and your complicated question was, how you should look at CAD moving forward and how to calculate the increase or the decrease in CAD in future quarters.

We don’t provide forward guidance, but if I was to look at that, just take a look at what you estimate a pipeline might be and as Chad has mentioned in the couple $100 million take and assume rate of interest and assume cost of debt, and those are the components that, it's really -- what interest income do you think we will earn from transactions versus the expense that will cost to put the transaction on the books.

Again, a little bit more complicated question, but it's something that we focus on as we focus on the $0.50..

Okay.

It’s been like the bond business, is your business, because you guys are experts in that, but I mean, I considered it to be operating, but when you sell it -- when you sell a property that can be use kind of a capital transactions, so I as well as other investors when we try to look at projected CAD, say must you sell a certain amount of property to be able to meet your CAD or I mean, where does that kind of sits or it was some, I mean, under accounting guidelines you probably have to accrue for any losses on realize.

But gains you don't recognize those until you sell, would it be possible to have some sort of appraisal value net of selling commissions to try to get some estimate of what the unrealized gain this makes property sale if you -- if you choose the quarter here or they have to sell a property, we can’t have an idea of what the impact on CAD is?.

No. As much as I would like to be totally transparent and fully disclose on the -- what we are going to do with some of the assets in the portfolio, we have constrains on non-public information and the best I can share with you is what our history and [ph] ship (41:38) has done in the past, we have shared with investors that from 2014.

We are looking to liquidate positions in the alternative bucket. Move the proceeds and sale those assets into the core our discipline which is the multifamily housing revenue bonds. We are looking to move out of the real estate portfolio based on the current number of assets that are in there.

We feel that right now it’s better to a seller of fee simple real estate than a buyer to some degree and we will evaluate all those opportunities to either restructure sale like I’d shared with you before. Any type of evaluation of those assets will be attempted by way of our marks on the assets and the balance sheet.

You can look at those as you see fit, but as far as any third-party appraisals or disclosure of those types of data points just do not going to happen. I apologies it just now a better way for us to do business and still be complaint with our SEC non-public disclosure, so….

Fair enough. Last question, I mean, are there any….

Go ahead, John..

MF properties that you have got for sale, I am not talking about bonds, just the properties themselves, are there any in the pipeline for maybe second quarter as you go forward right now. I mean, I guess, revenues for sales are right priced.

But, I mean, is the win right here, are there any other MF properties you got on that, you got the pipeline right on that have set the goal?.

Please take a look at the section in the quarterly filing as it talks about the real estate position on the balance. I will let you know that there is always an ongoing evaluation of those assets and we are looking when the market comes to it and we think that it’s a better sale than a whole.

We will look to move aggressively to sale for the benefit of investors and hopefully, but already their hope is to capture very strong cycle in the sale side of the marketplace and even restructure bond.

And so as I shared before, I wouldn’t -- as I shared with David, by year end I hope that we can capture some of the strength in the multifamily marketplace and move out couple of these positions, but -- that’s granular as I can give you this time..

Thanks, guys. Great distribution rate. Great quarter guys. Look forward more to come and happy you whole here. Thank you. Bye..

Thank you so much..

Thank you..

[Operator Instructions] I am showing no additional questions in the queue at this time. I would like to thank everyone for participating in today’s conference. This concludes the program. You may now disconnect. Everyone have a wonderful day..