George Allen / EducateMHC Blog Mobile Home & Land Lease Community Advocate & Expert

December 27, 2010

New Lions, Old Story, Affordability Conundrum, Social Engineering…

Filed under: Uncategorized — George Allen @ 6:11 am

New Lions, Old Story, Affordability Conundrum, Social Engineering, More


“It’s not the deal. It’s what a man does next that makes him great – or not!” Anonymous. No slight intended toward distaff property owners in the landlease community business, but frankly, there’re precious few of them. Back to the quotation. When I heard it recently, my thoughts turned to a significant ‘changing of the guard’ taking place among male portfolio owners/operators during 2010, and into early 2011.

On one hand, a few have retired, several expired, still others have been or are being forced from leadership roles, and some are moving on to other interests outside manufactured housing and LLCommunity milieus. All have been deal – makers; but few of them, sad to say, leave great personal or corporate legacies to distinguish their tenure. Fortunately however, there’ve been a few significant exceptions.

On the other hand, many have already observed a fresh pride of New Lions on the industry and asset class leadership horizon – not to be confused with the pride of Young Lions identified each year in the ALLEN REPORT. Historically, Young Lions have been the most aggressive of LLCommunity portfolio builders in years past, and without exception, entrepreneur businessmen. This bevy of New Lions however, with but a couple anomalies, are not sole proprietors or general partners, but salaried property management executives saddled with heady leadership responsibility within existing portfolio firms. Identity hint. They’re readily visible within trade bodies such as MHI’s National Communities Council (‘NCC’) division; ULI’s Manufactured Housing Communities Council (‘MHCC’); and involved in at least one initiative to seek out and secure new or renewed sources of chattel (personal property) financing for new and resale home sales transactions effected on – site in LLCommunties.

This is where the ‘greatness’ challenge resurfaces. Sure, portfolio consolidation continues throughout the asset class throughout North America, but with precious few new firms being formed – from scratch, during the past few years. And there may well be ‘a positive bump in the numbers this year’, as REO (bank ‘real estate owned’) properties find new owners. But what will these ‘salaried property management executives’ do to accomplish what most of their entrepreneur predecessors were unable to do? Maybe achieve and maintain greatness! But then, perhaps ‘greatness’ isn’t their challenge at all; but rather, simply protecting that bottom line and little more. Can’t fault that. Guess we’ll have to wait and watch what happens during the next 12 months and longer, to clearly see ‘…what a man does next that makes him great – or not!’


“Forget what people are saying, watch what is happening!” opines Vermont –based MHIndustry consultant Marty Lavin, esquire. This quote graces every email message Marty sends to friends and associates in and outside manufactured housing and landlease community environs.

Got to thinking about it the other day, and know what? He’s right! Without much effort, I can think of a half dozen examples where and how his truism plays out in the manufactured housing and LLCommunity ‘double dual industry’.*1 Here’s just one contemporary example: the flurry of press & association ‘talk’ about The CAMPAIGN! Surely you know what I mean! The proposal, made by ‘the four women from New Jersey’ (i.e., before ULI’s MHCC, our industry’s de facto Think Tank, at it’s Fall meeting in Washington, DC. The CAMPAIGN, is a proposal to plan and effect regional new home displays, supplemented with Infomercial seminars, in partnership with Big Box retail stores! Goal? To ‘sell more HUD Code homes’ by putting our best (design & product) foot forward in a very public way, to counter ‘image issues’ and frankly, Tell Our Story Our Way! There were news stories about this exciting initiative in every print and online trade press publication but one. Action to date? Little that this industry observer has seen or heard, beyond ‘putting some numbers together’, in the event someone has the brass to step forward and ‘try it one time’. And our HUD Code home manufacturers continue to wonder why the home buying public does not beat a path to their door!?

Again, as Marty is wont to say: ‘Forget what people are saying, watch what is happening!” In this case? ‘The rhetoric has ceased and nothing is happening!’ Shame on us as an industry!


Following quotation is from a short article titled, ‘The Affordability Conundrum’, featured in the December 2010 issue of MULTIFAMILY EXECUTIVE magazine. “Ron Terwilliger, former chairman of Dallas – based multifamily builder and owner Trammell Crowe Residential (‘TCR’) and creator of ULI’s J. Ronald Terwilliger Center for Workforce Housing, noted earlier this year that 19 million Americans spend at least 50 percent of their income on housing.” P.36.

Alas; but is that 50 percent factoid the true, whole and accurate story? Without clarification from Mr. Terwilliger there’s no way to know for sure! Here’s why…

First off, the ’50 percent’ reference springs from the well known ‘affordable’ Housing Expense Factor (‘HEF’) concept, whereby a certain percentage – varying among lenders, but usually between 25 & 30 percent – or more, defines the maximum amount of income citizens (should) pay for housing, whether owned or rented. But variable limits is just ‘half the problem’! The other, oft ignored half, is simply and tellingly, ‘What comprises targeted or actual income percentage citizens pay for housing’, owned or rented?

For example; are the aforementioned 25, 30, or even 50 percentiles ‘fully loaded’ (As they should be, in this writer’s opinion) with loan principal & interest, taxes and insurance (i.e. PITI) and household/utility expenses, but not including telephone expenses; OR, are those very same percentages ‘bareboned’, to include just P&I, leaving the home buyer/renter to still have to pay Taxes & Insurance, and household/utility expenses, but not including telephone expenses, ‘above and beyond’ what’s included in the (latter) stripped – down (.i.e. ‘barebones’) payment factor? Percentile composition makes a big, big difference!

Bottom lines? The Ideal, from an admittedly conservative, ‘affordable housing’ perspective is for said guideline AND applied percentile to be fully loaded 25 or 30 percentiles. Consequence? Probably less house for the buck allocated from one’s monthly or annual income! Reality, however, often finds lip service being paid to the 25 or 30 percentile guidelines, using them to peg just P&I. But when T&I and household/utility expenses, but not including telephone expenses, are added to such a percentile base, it’s easy to see how the ‘total percentage’ mushrooms to the ‘risky housing’ 50 percent or more cited by Mr. Terwilliger.

What’s to be learned from this? Simple. When housing industry spokespersons, like Mr. Terwilliger, set forth the type statement published in the referenced trade publication, they owe it to their listeners and readers to clarify, as in the previous three paragraphs, just what they mean when they describe ‘affordable housing’ using this one, or more, of four commonly recognized measures of housing affordability.*2


Following paragraphs, quoted from ‘The Courage of Marine Corps Leadership on DA,DT’ (‘Don’t Ask, Don’t Tell’), printed in American Thinker magazine, was penned and published prior to the Senate vote repealing DADT on 20 December 2010.

“Despite recent attempts to socially engineer our military, the bulk of the fighting and dying continues to be done, as through the ages, by young men. The bonds of men in combat cannot be replicated in any other activity, though our society likes to think they can. We loosely use the word ‘combat’ on the gridiron or in the courtroom. Those who have served in combat will tell you there is no physical or emotional challenge equivalent to actual combat. Those bonds between warriors, that brotherhood, that philia, cannot be replicated outside combat. Most warriors will tell you that without brotherhood, a unit in combat cannot be effective.”

“In combat, loss of effectiveness can mean failure of the mission. Defeat is anathema to the warrior. Failure increases the risk of death, injury, or capture of both soldiers and non – combatants.”

“Into this ageless formula for military success, the Pentagon and the Congress want to insert Eros, or erotic love, by ending the awkward ‘Don’t Ask, Don’t Tell’ policy for homosexuals serving in the military. These REMFs (pejorative acronym for desk – bound staff officers) have never had to duck and cover as the rounds or RPGs go whistling by. They have followed the lead of a completely inexperienced commander in chief and his Hollywood – raised chairman of the joint Chief of Staff to satisfy a constituency that is unaware and unappreciative of the sacrifices our young men and women make on their behalf.”

Now that you’ve read those sobering paragraphs, and know the DADT policy has been reversed, reflect on the serious, at times fatal, distraction this levels on the young men and women we know and respect, who’ve voluntarily placed their very lives on the line, to serve and protect you and me as American citizens.


Lest you missed it at the end of last week’s blog posting, this is your final reminder that paid Allen Letter professional journal subscribers prior to December 31, 2010, will be the last to receive the annual (22nd) ALLEN REPORT for free! After January 1, 2011, the ‘per copy’ price for the much expanded 22nd annual ALLEN REPORT (now includes appendices & more) will be $450.00 per copy! So, if not already a paid subscriber to the monthly newsletter (@ $134.95/year), consider becoming one this week: 27 – 31 December 2010, by subscribing via this website ( or phoning the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or (317) 346-7156. Leave a message if necessary and we’ll phone you back. This way, you’ll save $315.05. and tap into the LLCommunity asset class singular statistical resource document!

End Notes.

1. I pen ‘double dual industry’ in recognition of the facts that HUD Code manufactured housing, as an industry, is comprised of ‘manufacturing’ and ‘distribution’ elements; while the LLCommunities, as an asset class, encompass raw land ‘development’ and existing income – producing property ‘investment’.

2. 30% Housing Expense Factor (‘HEF’), Housing Opportunity Index (‘HOI’), Housing Wage (‘HW’), & ‘One Who Believes…’ From HOUSING AFFORDOGRAPHY, ‘Study of Affordable Housing Formulae & Measures of Housing Affordability’, George Allen, Realtor®, CPM®Emeritus, MHM, PMN Publishing, Indianapolis, IN., 2008.

George Allen, Realtor®, CPM®Emeritus, MHM
Consultant to the Factory – built Housing Industry &
The Landlease Community Real Estate Asset Class
Box # 47024 Indianapolis, IN. 46247 (317) 346-7156

December 19, 2010

A Different Christmas Eve Story Than You’ve Ever Heard Before!

Filed under: Uncategorized — George Allen @ 6:57 am

A Much Different Christmas Story Than You’ve Ever Read Before

‘Twas the night before Christmas; he lived all alone, in a one bedroom house made of plaster and stone.

I had come down the chimney with presents to give, and to see just who in this home did live.

I looked all about, a strange sight I did see, no tinsel, no presents, not even a tree

No stocking by mantle, just boots filled with sand, on the wall hung pictures of far distant lands.

With medals and badges, awards of all kinds, a sober thought came through my mind.

For this house was different, dark and dreary; I found the home of a soldier, once I could see clearly.

The soldier lay sleeping, silent, alone, curled up on the floor in this one bedroom home

The face was so gentle, the room in such disorder, not how I pictured a United States soldier.

Was this the hero of whom I’d just read? Curled up on a poncho, the floor for a bed?

I realized the families I’d see this night, owed their lives to these soldiers, who were willing to fight.

Soon round the world, children would play, and grownups would celebrate, a bright Christmas day.

They all enjoyed freedom each month of the year, because of soldiers, like the one lying here.

I couldn’t help wonder how many lay alone, on a cold Christmas Eve, in a land far from home.

The very thought brought a tear to my eye; I dropped to my knees and started to cry.

The soldier awakened, and I heard a rough voice, “Santa don’t cry, this life is my choice. I fight for freedom and don’t ask for more; my life is my God, my Country, my Corps.”

The soldier rolled over and drifted to sleep. I couldn’t control it, so continued to weep.

I kept watch for hours, so silent and still, and we both shivered from the cold night’s chill.

I didn’t want to leave on that cold, dark night, this guardian of honor so willing to fight.

Then the soldier rolled over, with a voice soft and pure, whispered, “Carry on Santa, it’s Christmas day, all is secure.”

One look at my watch, and I knew he was right. “Merry Christmas my friend, and to all a good night.”



Next week’s blog posting returns to serious matters affecting the manufactured housing industry and landlease community asset class, going into year 2011. Don’t miss it! GFA

Hint. A very special edition of the 22nd annual ALLEN REPORT, a.k.a. ‘Who’s Who Among LLCommunity Portfolio Owners/operators Throughout North America!’ will be distributed during January 2011, to subscribers to the Allen Letter professional journal. Will you be a recipient of what might be the last ALLEN REPORT researched and published? To ensure you are, phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 to subscribe today! Price per standalone copy of report is $450.00 postpaid.


George Allen, Realtor®, CPM®Emeritus, MHM
Consultant to the Factory – built Housing Industry &
The Landlease Community Real Estate Asset Class
Box # 47024, Indianapolis, IN. 46247
(317) 346-7156.

December 12, 2010

And, ‘He-r-e’s Grayson & Friends; Many of You Feel My Pain; & 4 Good Reason to be in Louisville, KY @ 11 – 14 January 2011!

Filed under: Uncategorized — George Allen @ 10:57 am

And, ‘He-r-e’s Grayson & Friends!’
Many of You Feel My Pain…
Four Good Reasons to be in Louisville, KY., 11-14 January, 2011.


For ‘rest of the story’, read Allen Letter professional journal each month! *1


Two weeks ago, in the blog posting titled, ‘Whose Responsibility is Housing Affordability?’, reference was made to Gary W. Pomeroy’s 1970s classic text, How to Successfully Sell New and Resale Manufactured Homes. In that book, the author wrote about Grayson Schwepfinger’s ‘use of a rather unique system of qualifying the customer’ by ‘locking all the homes on a sales center…forcing prospects to come to the office’, where they are pre – qualified by Urgency, Income & Need before seeing any homes.’ (p.26). Well, how’d you like to read more of Schwep’s wisdom on the subject? He sent me the following lengthy email message on 1 December; so, here’re some rare gems (lightly edited) right from that ol (manufactured housing sales) warhorse’s pen…

‘First off, you mentioned very few salespeople really look at whether the customer can truly afford the home they are being sold. Well, one of our clients, New Jersey – domiciled REIT, UMH Properties, pulls a credit report on every prospective homebuyer, and not only confirms their ability to buy, but also does a character check to ensure they are indeed the quality potential resident they’re looking for. If the prospect doesn’t pass both tests, they instruct the salesperson to refuse the offer to purchase the home.’

‘You described one way (Use of the new ‘Ah Ha! & Uh Oh!’ worksheet) to calculate ‘affordable’ and ‘risky’ price points for new and resale homes. Well, 40 years ago, I went to the chattel lenders and asked how they computed whether or not a customer can afford to purchase a home. They showed me a form they used – and continue to use to this day. First, they take all the monthly income the prospect is making. This includes any standard job income, plus any other additional income that is long – lasting and received on a monthly basis, such as child support. In most areas, they figure the total commitment to monthly payments should not exceed 40% of this monthly total, then subtract all the current monthly debts (e.g. furniture, credit card, car payments, and homesite rental fee) from that amount. The amount left is what lenders will allow the homebuyer to spend (invest) in monthly housing payments. For example: $3,000.00 income/month X 40% = $1,200.00 (-) $633+/- (for car, credit card, rent, etc. payments) = $567.00/month available for P&I (principal & interest) payments on home mortgage.’

GFA Note. But ‘here’s a potential rub’. The above calculation, if still the manner in which some, if not all, third party lenders estimate how much monthly P&I payment a new homebuyer can afford, they may be unintentionally setting borrowers up for unexpected and undue economic pressure, if not ultimate failure. How so? Nowhere in this methodology, that I’ve seen, are escrowed T&I (taxes & insurance) and monthly household utility expenses, not including telephone expenses, included in the overall housing expense proposition! Frankly, ‘if included’, the $567.00/month P&I mortgage payment estimate would necessarily be reduced to something in the neighborhood of $342.00., in order for the PITI mortgage payment and household expenses, to be indeed be ‘affordable’, rather than inherently ‘risky’! This is the same dynamic, oft ignored, difference between ‘affordable’ & ‘risky’ monthly housing payments, the new ‘Ah Ha! & Uh Oh! worksheet clearly demonstrates. *2

Grayson continues. Once home buying prospect is qualified, ‘what I do is show them what the lender will allow them to spend on a new home, e.g. $567.00. Then I ask how much of that amount they would be willing to invest each month. So, I now have identified not only what they are able to pay, but also what they are willing to pay. By doing it this way, I don’t get their ego in the way. What I mean is, suppose I early on, ask how much they want to pay by the month, and they tell me they would go as high as $600.00/month. If I now sell them a home for $600.00/month, then turn the agreement in to the lender for approval, it’s going to be turned down, since it’s over the calculated limit. I now have two problems. First, the deal has been turned down. Second, is having to go back to the prospect, and tell them they are not approved for anything over maybe $500.00. At this point, I stand a good chance of their ego getting in the way, and they tell me the lender doesn’t know what they’re talking about. So, they leave my sales center or LLCommunity in a huff, go to another sales outlet, and begin by telling them not to show them anything that costs more than $500.00/month.’

Schwep NOTEs. If you’d like FREE copies (one blank & one filled – in sample) of the form Grayson developed, over the years, to apply the above – described income qualification methodology, simply email your request to And, given the present day finance regulatory climate, ensure your on – site staff is appropriately trained and licensed. For information on this subject, phone Schwep @ (610) 533-4969.


And here’re guidelines a CPA LLCommunity portfolio owner/operator uses to qualify would be homebuyers, at one or another of his/her properties:
30% of gross pay must cover all housing costs (e.g. site rent, house payment, taxes, insurance, finance fee); and, or max of 60% of net pay must cover housing costs just listed. JD
Yet another blog flogger (‘promote & publicize’ what’s right about manufactured housing and landlease communities!) weighs in on this timely subject with this insightful commentary. “On the surface, the key determinant, as to whether or not the home seller really cares about the prospective homebuyer’s ability to make ongoing house payments, is whether, or not, the seller indeed has ‘skin in the game’. Since home finance is a long term endeavor, that ‘skin’ must be based on a 10 – 15 year planning horizon. When people, who run businesses, allow others (e.g. employees) to disregard that important fact, by allowing short term gains at the expense of long term security, they set in motion a sure – fire formula for failure!” Spencer Roane. (Lightly edited. GFA)


It turns out, many of you feel my pain, over the uncertainty about not knowing how year 2011 is going to begin, progress, and end, relative to the many asset class – specific products and services created and supplied to LLCommunity owners/operators, by GFA Management, Inc., dba PMN Publishing, during the past several decades. Thank You for writing, phoning, and emailing. Here’re a couple typical email responses…

“George, I have found solice in your blogs! And, on a different subject, I must admit the Solstice Communities angle is refreshingly imaginative.” NB By the way, did YOU visit after reading last week’s blog posting? If not, strongly recommend you do so now…

“I’d hate to think you’d be one more casualty of this industry’s new reality. You’re the glue that we need to continue as one voice. Seems, with your experience and willingness to help all of us who need a voice on the national front, the home manufacturers might consider you as a liaison to the rest of us who need to keep in touch with the most up to date training and products they offer. Community owners need a figurehead t turn to, as I have turned to you in the past for advice. Our strength to survive this downturn is as a group, and your leadership for those of us in the community business, is needed more than ever. I would also nominate you for our voice in Washington, to those who do not have the firsthand knowledge you do. My hope is you and your leadership will stay with us long after we all come out of this day to day struggle. What a loss your silence would be to us all.” DR (Lightly edited. GFA)


Four Good Reasons to be in Louisville, KY., 11 – 14 January 2011. Have you ever been to the Louisville MHShow (nee Midwest Manufactured Housing Show)? If so, you know there was no such venue earlier this year (January 2010). Well, there’s certainly going to be a MHShow this time around! And here’re four good reasons for you to consider attending:

11 January 2011. The day long Manufactured Housing Manager (‘MHM’) professional property management training and certification program will take place in a hotel meeting room near the entrance to the Kentucky State Fairgrounds, where the Louisville MHShow begins the next day. Today, nearly 1,000 MHMs own and or manage landlease communities throughout the U.S. and Canada! Take this opportunity, for only $250.00/MHM candidate, to participate and earn your MHM certification. You’ll receive a copy of the text Landlease Community Management, monograph of contemporary LLCommunity ‘How To’ writings, formal MHM certificate, and gold MHM lapel pin. Class is taught by a CPM® member of the Institute of Real Estate Management®, and 30 year owner/operator of Midwest LLCommunities. For information, and or register for this program, limited to 20 participants, phone (317) 346-7156.

12 January 2011. The first day of the Louisville MHShow, at the Kentucky State Fair Grounds in Louisville, KY. If you’re ‘in the MHBusiness in the Midwest’ YOU owe it to yourself to be present for at least two of the three days – to tour and buy new homes from the dozens on display, especially Community Series Homes, and participate in the LLCommunity – focused seminars the next day…

13 January 2011. While the Louisville MHShow continues in the Exhibit Hall, no fewer than four LLCommunity – focused FREE seminars will occur in an adjacent meeting room. Don Westphal will hold forth on the design and features of Community Series Homes (‘CSH’) – providing a list of such homes on display in the Exhibit Hall. Then Ken Rishel will answer questions relative to the variety of self – finance programs popular with LLCommunity owners/operators selling and ‘carrying the paper’ on new and resale home transactions in their properties. George Allen will describe How To Calculate ‘affordable’ & ‘risky’, new & resale price points for homes within one’s LLCommunity or sited on scattered building sites; and, how to know – ahead of time – what priced homes will sell best, in any local housing market in the U.S.! The four sessions will end with Tony Kovachs describing the best ways to use social media and online marketing, to sell homes within and outside LLCommunities! Ed Hicks will also be present, describing an upcoming seminar he’s hosting relative to the FHA 207(m) Program. To register for the Louisville MHShow, phone (707) 587-3350. When you phone, tell’em ‘George sent me!’ Seriously.

14 January 2011. Last day of the Louisville MHShow.

Another GFA NOTE. Also be aware, there’s the possibility of a special FOCUS Group meeting, probably 12 January, that’ll be ‘by invitation only’, for LLCommunity owners/operators seriously interested in perpetuating LLCommunity products and services, e.g. newsletters, annual directories, statistical reports, property management training & certification, networking/deal-making opportunities, etc.. This meeting, if it occurs, will be held during the Louisville MHShow, but at a nearby hotel meeting room, has been requested by LLCommunity owners responding, to what’s covered in Part II of this blog posting. To ensure you’re on the LLCommunityowner/operator invitation list, phone (317) 346-7156.

End Notes.

1. Sample issue and subscription via (317) 346-7156 or see *2 following.

2. ‘Ah Ha! & Uh Oh!’ price point calculation worksheet is available FREE by phoning the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

George Allen, Realtor®, CPM®Emeritus, MHM
Consultant to the Factory – built Housing Industry &
The Landlease Community Real Estate Asset Class
Box # 47024
Indianapolis, IN. 46247
(317) 346-7156

December 5, 2010

Solstice Communities; Housing Affordability; & Consequences of Illiquidity

Filed under: Uncategorized — George Allen @ 11:29 am

Meet SOLSTICE Communities!
What YOU Said About ‘Housing Affordability’ Responsibility!
Lack of Liquidity Kills Again & Again!


It’s about time! Not really; it’s about lifestyle, rebranding, and challenging an entire investment realty asset class – to ‘take to the high road’, from this day forward, toward stellar corporate image; impeccable reputation building; and superior, all around, on the job sales, leasing and resident relations performance and curb appeal!

With that said, meet SOLSTICE Communities! A dictionary definition of SOLSTICE suggests a ‘turning point’ or culmination; and that’s what SOLSTICE communities is all about; the culmination of all that’s good – to – great about the landlease (nee manufactured home) community lifestyle; and, by example, a turning point challenge to all other property portfolios of this income – producing property type!

Here’s what the totally new website, launched 1 December 2010, has to say…

“DISCOVER America’s best places to retire, at Solstice Communities! With more than 25 retirement communities across the country. Solstice offers free – spirited, vacation – style 55+ living that’s anything but retiring.”

To learn more about this rebranded, manufactured housing industry pace setter, go to


Here’s what YOU said about ‘housing affordability’ responsibility in response to last week’s blog posting at this website:

“Great blog!!!!! Thanks; I am gong to use this (housing affordability) discussion at our next sales meeting. KL

“Well crafted, and you are right. Morally, we should have stuck with the old 25% rule (i.e. No more than 25% of a homebuyer or household’s annual income to go for housing) that presaged the FHA 235 program, where it was possible to max out at 43%. Indeed, we (manufactured housing industry) are our own worst enemy!” (lightly edited. GFA) NB

“Very interesting; an obvious dichotomy (i.e. ‘subdivision into two parts’) for the (manufactured housing) sales person, Greed versus Ethics; how novel. We have seen this before in so many industries, and I am sure we will see it again. Sure is a compelling story for the ‘packaged deal’, and need for an industry wide movement to embrace a new approach to doing (manufactured housing) business!” RT. (Parenthesis added for emphasis. GFA)

“Well written article with many valid points. Unfortunately, it will again fall on deaf ears because, as you know full well, this entire (manufactured housing) industry, from day one, has been built – and is now being destroyed, by one simple Latin phrase: Caveat emptor! (‘Let the buyer beware!’) Success, in the minds of most, now depends on finding the next stupid (home) buyer and the next stupid (chattel) lender. ‘There must be some still out there!’ is their battle cry.” DR

So astute reader, is this observer’s remarks indeed ‘a bona fide reality check’ or ‘gross, unwarranted exaggeration’ about how we sell and finance new and resale homes throughout the MHIndustry today? Are YOU ready to ‘take the pledge’? To sell and finance new and resale homes at prices points truly affordable to prospective homebuyers and households, based on their annual gross income (‘AGI’) or a local housing market’s annual median income (‘AMI’)!

And with that in mind, reader commentary continues…

“As someone who really likes the ‘Ah Ha! & Uh Oh!’ formulae (For estimating maximum recommended ‘affordable’ & ‘risky’ purchase prices for new and resale, privately – owned homes of any type, sited on realty owned fee simple with home, or leased, as in a landlease community!), and given the importance of this week’s topic, there’s one more following point. One might say the reason ‘affordability’ is an issue at all, is because of the near complete lack of an exit strategy for homeowners and lenders, akin to site – built (i.e. ‘realty – secured’) housing.” Even if a homebuyer ‘overbuys’, in the latter instance, value appreciation and presence of a secondary home sales market, driven pretty much by Realtors®, one can generally exit their housing experience with a profit (notwithstanding dismal housing regional housing markets of the past few years). But what about the manufactured housing world? Reality for us; there’s no functioning secondary home sales market characterized by value appraisals based on market comparables and not replacement (book) values, availability of widespread multilisting services, existence of escrow ‘closings’, readily available third party chattel financing, nor even a cadre of trained, licensed salespersons.

Know what? There’s even more; and we’ll revisit this timely and strategic subject again next week. And guess who responded, at length, on this very topic? Grayson Schwepfinger. Yes, the manufactured housing industry pioneer quoted in the 1970s How to Sell Manufactured Housing text by Gary Pomeroy. As some of you know, particularly those who attend the annual International Networking Roundtable, ‘Schwep’ continues to be active in the manufactured housing and landlease community segments of our industry/asset class. So, don’t miss his observations about ‘whose responsibility for housing affordability’ in next week’s blog. And there’s even more, as a popular CPA portfolio owner/operator too speaks out on this subject and shares his/her methodology….

Have something YOU want to say? Respond to this blog via website or the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or (317) 346-7156.


Yes,’ lack of liquidity kills again – and again’! By now, you likely know “Palm Harbor Homes, Inc., announced on Monday, November 29, 2010, it and five of its’ domestic subsidiaries…filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. The Company is taking this action to provide liquidity and partner with Fleetwood Homes, Inc., a subsidiary of Cavco Industries, Inc., through a sale process pursuant to Section 363 of the Bankruptcy Code in order to support ongoing operations.” For additional information, phone (888) 220-3896.

And yet another Special Announcement, also driven by lack of liquidity, is in the offing. If you’re reading this blog posting and are not a paid subscriber to either or both the Allen Letter professional journal and the Allen CONFIDENTIAL!, you should consider doing so in the very near future.

Why? It’s been a thinly veiled secret for years; no, make that decades, that most of the services and products created by and associated with GFA Management, Inc., dba PMN Publishing, have been subsidized by one or more major portfolio owners/operators in the landlease community (‘LLCommunity’) asset class. Apparently, that all may be about to change by the end of this month, December 2010, when the subsidy ends.

If so, our present options are pretty bleak but straight forward:

1) Immediately start charging what’s necessary to keep GFA/PMN’s routinely delivered services and products financially ‘liquid’, e.g. Significantly increase subscription rates of aforementioned monthly newsletters; and, effective immediately, charge a premium, possibly $1,000.00, for the previously ‘free’ (in this case, 2011’s 22nd annual) ALLEN REPORT (a.k.a. ‘Who’s Who Among Landlease Community Portfolio Owners/operators in North America!’) – a highly unlikely happenstance, as most portfolio folk have grown accustomed to these bargain – priced (subsidized) resources.

2) Seek and identify an immediate replacement of the financial subsidy, to the amount of at least $3,000 per month. Interested? Let me know via (317) 346-7156. Am I hopeful? No. Wishful? Yes. But tough times make for hard finds.

3) Transfer or sell some or all the present half dozen GFA/PMN profit centers to another ‘for profit’ firm, or not for profit national platform – but here, ‘time’ is now the effective barrier to this happening.

4) Once operating funds run out, simply go out of business and fully retire. The obvious shortfall to this option, where my ‘friends in the LLCommunity business’ are concerned, is the complete loss of valuable resources, opportunities and contacts (e.g. 500+/- name exclusive North American data base of portfolio LLCommunity owners/operators) cultivated over the past three decades, and more…

Bottom line? To be candid, I did not see this day coming! I’d long hoped to gradually ease our way out of the LLCommunity consulting/publishing business; watching most or all that GFA/PMN created and grew, continue as an integral part of a manufactured housing – related, not for profit national platform. While that process indeed has barely begun, it’s now unlikely the funds (subsidy) will be in place, at the first of the year, to see that proposal through to a logical, practical, and agreeable conclusion. And in the midst of the doldrums the manufactured housing industry finds itself today, launching a new business enterprise, product or service, to pick up the financial slack (e.g. REO fee management), is simply impractical at this time!

At the very least, I’d appreciate your thoughts and suggestions on this topic. GFA

George Allen, Realtor®, CPM®Emeritus, MHM
Consultant to the Factory – built Housing Industry &
The Landlease Community Real Estate Asset Class
Box # 47024
Indianapolis, IN. 35247

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