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

Blog # 247 Copyright 2013 26 May 2013

Perspective. ‘Land lease lifestyle communities, a.k.a. manufactured home communities & earlier, ‘mobile home parks’, are the real estate component of manufactured housing.’

Purpose. ‘Primary research, resources, & op/ed communication means among land lease lifestyle community owners/operators nationwide; plus, national advocacy awareness.’

I.

Manufactured Housing Dichotomy Contrary to Reason

II.

Triple Threat to Manufactured Housing Trumps Obama’s Press – described Trifecta!

III.

Manufactured Housing’s ‘Perfect Storm’ is in the Offing…

IV.

Errata

V.

Purpose

***

Manufactured Housing Dichotomy Contrary to Reason

A dichotomy occurs when something is divided into two parts. For the purposes of this discussion, we’re referring to the HUD – Code manufactured housing reality, where we fabricate and market the Most Affordable Shelter Option Available Anywhere (Half the cost, per square foot, of contemporary site – built homes, not including underlying realty), on one hand; and, on the other, the Ability to Produce Super Quality, Exciting Design Homes Priced at a Quarter of a Million Dollars! What a disparate dichotomy!

But then, look what happens to this dichotomy when Marketing and Sales Functions do their part, and Home Finance comes into play.

Title I chattel (personal property) capital is the ‘choice of necessity’ for financing affordable manufactured homes sited within land lease lifestyle communities (a.k.a. manufactured home communities). For the most part, that type home financing has been ‘missing’ since the turn of this century; missing not for lack of capital resources, but ‘missing the mark’ at which many, if not most, prospective homebuyers, of manufactured homes, find themselves in today’s battered national economy. Contemporary chattel loan underwriting is understandably stringent; but as a consequence, is woefully underserving its’ traditional market of the past 60+ years.

Title II realty – secured capital is available to an increasing degree, as the overall U.S. housing industry slowly – but – steadily recovers from its’ debacle of 2008. And know what? It’s this type home finance that is most readily available to mortgage the quarter million dollar HUD – Code manufactured homes described earlier.

Bottom line? The folk who need affordable housing the most, have the least opportunity to secure financing for it; while those who’re fortunate enough to qualify for quarter million dollar homes, have little problem becoming mortgagors.

Hence, manufactured housing’s double dichotomy is contrary to reason; to wit: mortgage financing is, for the most part, unavailable to the lowest priced homes (buyers) produced by HUD – Code home manufacturers, especially when going into LLLCommunities. But mortgage financing is generally readily available to the highest priced homes (buyers) produced by HUD – Code home manufacturers, when being sited on developed realty conveyed fee simple. Go figure. It’s a conundrum of the first degree.

II.

Triple Threat to Manufactured Housing Trumps Obama’s Press – described Trifecta!

Ah yes, another definition to start this discussion. This time around however, the key word, trifecta, is being blatantly misused by this nation’s secular press as they report on three abuses of power being laid at the feet of the current administration.

Trifecta: “a wager in horseracing requiring correct choice of first, second, and third place in exact order to win.” The New American Webster College Dictionary.

Excuse me, but I’ve yet to see, let alone understand, how the Bengazi murder cover up, IRS targeting of conservative political groups, and Department of Justice’ wholesale accessing of Associated Press (‘AP’) telephone records, qualifies as anything but a triad, or triplet of missteps, but certainly not a ‘trifecta’, occurring during President Obama’s second term in office. And at this point, I don’t think the American public really cares which ‘offence’ comes in first, second, or third – as they’re equally onerous trampling of our rights ‘to know’, ‘enjoy privacy’, and ‘engage in free speech’.

So, does the HUD – Code manufactured housing have its’ own set of (three) challenges to be dealt with during the present time frame? You bet, and it’s certainly not a ‘trifecta’. For the purposes of this blog posting – and the luncheon presentation I’ll deliver in Urbana, IL. during IMHA’s annual meeting on 13 June, 2013, I’m describing them as the Triple Threat to Manufactured Housing! Want to attend? Phone (217) 528-3423 and talk to Bob Thieman, CAE.

Here are three titillating paragraphs recently mailed to all HUD – Code home manufacturers and independent (street) MHRetailer, as well as land lease lifestyle community owners/operators, throughout the Midwest:

• Everyone talks of the shortage of chattel (personal property) capital to finance home transactions within LLLCommunities; but that’s NOT the real problem ‘holding us back’. Come and hear the truth, and learn what you might do about the matter. That is, unless YOU don’t care what happens to the MHIndustry….

• According to the Uniform Manufactured Housing Act, agreed upon by the Uniform Law Commission last July, manufactured housing ‘vehicle titles’ are to become ‘a thing of the past’, the sooner the better – in their eyes. Consider the tax consequences and otherwise! Come and learn the ‘who’, ‘when’, ‘where’, ‘how’ & ‘why’ behind this imminent threat to manufactured housing – as we’ve known it for more than 60 years!

• We’ve come to think of HUD as a ‘way of (business) life’, where manufactured housing is concerned. Well, guess ‘who’ is working to supplant HUD and become our new federal regulator – and ‘why’, as well as ‘where’ & ‘how’? And if we’ve had difficulties getting HUD to ‘overtly support the marketing of the most affordable housing option in the U.S. today’ – a reality they understand and write about, but don’t go out of their way to support – think how much more difficult it will become with a new ‘unknown’ regulating our industry, particularly one with an ‘agenda’, e.g. like having fire sprinklers installed in every manufactured home….

Well; all that should get you to thinking, if not disturbing your complacency relative to the near and interim future of HUD – Code manufactured housing and LLLCommunities nationwide. What can YOU do about it? For starters, patronize IMHA’s annual meeting in Urbana on 12 & 13 June 2013 – to learn ‘the rest of the story’; OR, wait for a few weeks to read what we post in future blogs. That is, unless one or another of our national advocacy bodies, and you know we have two of them, decides to ‘really go public’ with the whisperings we’ve been hearing the past few months….

III.

Manufactured Housing’s ‘Perfect Storm’ is in the Offing…

What is manufactured housing’s Perfect Storm? Well, since it’s just now becoming apparent to some, we need to bide our time and comment a bit, as unique – in this case ‘once in three decades’ circumstances are coming together to ‘rock our boats’. One of the few hints I’m comfortable giving you, this time around – so as not to violate confidences, is to suggest researching the specific definition of the last word in this III blog title: offing. Thought I knew what the word meant beforehand, but was surprised when I checked. The specific definition eerily applies.

OK, here’s another tidbit. the Perfect Storm involves individuals, not things, places, products, or services. And perhaps matters we’ve taken for granted for many years, are about to change – markedly. Might happen today; but no, probably a bit further down the road. How far? Now there’s the unanswerable secondary question. It’s like watching weather personalities on TV. We view for information, enlightenment, even Warning; but given the ‘nature’ of weather; and in this case, people; well, the Perfect Storm could indeed happen tomorrow, maybe a few weeks or months from now, but certainly no longer than a year out! And No, this isn’t a consequence of the ‘Big Three C home manufacturers’ controlling MHI, or the few mega portfolio owners/operators dominating the NCC.

Will tell you this though. When that Perfect Storm is indeed on MHIndustry’s near horizon; you’ll likely read about it here first, maybe even in Jim Visser’s The Journal, or both places. So, as they say in radio talk: ‘Stay tuned!’ And it’s unlikely I’ll be the one to ‘Break the news’ to you. In fact, as I reflect on the matter, I believe Bruce Savage, former MHI staffer and present day freelance public relations consultant, is the only MHIndustry – savvy wordsmith remaining, who has the stones and cred to sound a Perfect Storm WARNING! In the meantime; want to hire Bruce to assist with communications and public relations work for your firm? Reach him via (202) 664-4512.

IV.

Errata

If you’re an Allen Letter professional journal subscriber, and received advance copies of the registration brochure, describing the upcoming 22nd International Networking Roundtable, know the hotel phone numbers listed on the back panel are INCORRECT. Here’re the correct phone numbers:

Hotel/Chicago Indian Lakes Resort in Bloomingdale, IL: (800) 334-3417. When phoning in your reservation, mention the ‘Networking Roundtable/GFA’
Need driving directions to the resort hotel? Phone (630) 529-0200

V.

Purpose

Did YOU notice? We’ve added a Purpose statement at the beginning of this blog posting. Why? In recognition of the emerging reality, among many land lease lifestyle community owners/operators, and an increasing number of MHIndustry ‘players’, a New Era is indeed upon us, Perfect Storm or no Perfect Storm. And it turns out this weekly blog posting is expected to ‘lead the way’ into it! We’re grateful you’re along for the ride. GFA

***

George Allen, CPM®, MHM®
Box # 47024, Indianapolis, IN. 46247
(317) 346-7156

Blog # 246 Copyright 2013 19 May 2013

Perspective. ‘Land lease lifestyle communities, a.k.a. manufactured home communities
& earlier, ‘mobile home parks’, are the real estate component of manufactured housing.’

I.

Meetings Mish Mash This Fall; or, ‘Nothing Else to Do’?

II.

Responses to Last Week’s Blog: ‘The 20 Year Itch!’

III.

Encouraging & Disturbing Words from Assn. Executives

***

I.

Meetings Mish Mash This Fall; or, ‘Nothing Else to Do’?

Spring and Fall are the most popular business meeting seasons. But it appears the HUD – Code manufactured housing industry, and its’ land lease lifestyle community (a.k.a. manufactured home community) counterpart, are going overboard this year (2013). Either there’s a super abundance of good information and industry news to share, or there’s a lot of folk with more time on their hands than work to do. The following paragraphs list the regional and national venues announced to date, so we’ll give you some tips as to where your time and energy might be best spent. For a more detailed breakout of said meeting information, read the June 2013 issue of the Allen Letter professional journal – for pricing, contact information, etc.. To subscribe, simply phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

August 5, 2013. Annual RV/MH Heritage Foundation Hall of Fame Induction Banquet at the museum and library facility in Elkhart, IN. (574) 293-2344 & (800) 378-8694. If you respect our RV/MH history and legacy, you’ll be present with me at this event! Several LLLCommunity owners/operators are in this year’s Class of Hall of Fame Inductees. Are you a faithful financial supporter of the foundation? We are! Become one!

September 18 – 20, 2013. 22nd annual International Networking Roundtable for land lease lifestyle community owners/operators returns to the Hilton/Chicago Indian Lakes Resort in Bloomingdale, IL. This is the only national trade show focused on the educational (20+ seminars & panels), networking, and realty deal – making interests and needs of LLLCommunity businessmen and women! There’ll likely be new Community Series Homes or CSH Models on display. Visit community-investor.com for a brochure!

September 29 – October 1, 2013. MHI’s annual meeting in San Diego, CA., includes a meeting of the National Communities Council division.

October 8 – 10, 2013. 3rd annual SECO Symposium in Forsyth, GA. (Just south of the Atlanta airport).Unique feature here is that Southeast LLLCommunity Owners are the ones who plan and host this annual event, ensuring all the topics are of lively and current interest to the land lease lifestyle community owners/operators who attend from throughout the Southeast USA. I certainly plan to participate – again.

October 15 – 17, 2013. WMA’s annual Convention & Expo in Reno, NV. While technically a California MHAssociation event, many of the participants come from states throughout the West, hence making it a de facto regional venue.

October 16 – 18, 2013. MHI’s National Communities Council Leadership Forum in downtown Chicago, IL. (Two meetings necessary in one month?)

November 5 & 6, 2013. London Computer’s annual Rent Manager conference in Florida. This is a private, by invitation event, but one patronized by a couple hundred users of this firm’s LLLCommunity accounting software.

November 5 – 8, 2013. Urban Land Institute’s Fall Meeting in Chicago, IL. This will also be when the Manufactured Housing Communities Council convenes.

WHEW! Tired of Fall meetings yet? And I’m confident No One will be present at all these venues – especially the last four listed, since they were scheduled atop one another. And this list doesn’t include state MHAssociation meetings planned for the same time frame, e.g. New York & Florida, for starters.

Here’s something else to ‘watch for’ during the months ahead: Where Else Will We See These Regional & National Meetings Listed? Probably nowhere! Why? One or more of the sponsoring trade groups, as a matter of policy (so they say) don’t mention, let alone promote, anyone else’s meetings but their own! Let’s watch and see if I’m Right or Wrong, about this, during the weeks and months ahead. But one thing for sure: Read this Blog Posting every week and YOU get all the MHIndustry & LLLCommunity information you need; supplemented by print publications, like the Allen Letter professional journal, & the Allen CONFIDENTIAL! Business newsletters.

***

II.

Responses to Last Week’s Blog: ‘The 20 Year Itch!’

Hopefully you read it. If not, maybe ‘stop here’, and scroll down through the blog archive that follows this posting at community-investor.com and read it. The following responses will make much more sense to you if you do….

“Glad to read you’re feeling well enough to reinvigorate your business – and ours. It is more important than ever, the statistics and research you publish, continue to be available. We cannot advance the (land lease lifestyle community) asset class, and move forward on initiatives discussed at the recent 2nd National MHRetailers Summit, without them! Continue to count me in your corner for any help you think I might provide.” JR

“Insightful as always and inspirational. Thank you for sharing it (blog posting) with me. I am very happy to hear you are feeling better, and this blog comes off with the energy I have come to know you for. I am looking forward to the upcoming Roundtable, and seeing you soon.” DL

“I am excited to see the Networking Roundtable date ‘later in the month’ in September and returning to Chicago. I plan on being there. And yes, I do recall the prayer times for our nation and its’ leaders (a tradition begun after the 9/11/2001 national tragedy). They’ve been a great addition to the event.” TN (And debut of a new LLLCommunity tradition is planned for this year’s 22nd annual Roundtable event. GFA)

“You have always been, and I am sure will continue, to be a great asset for our industry. Whatever direction you take, I and many others will be glad to follow.” JZ

“Good post George. I suspect ‘they’ will read between the lines! Let’s grab that brass ring!” SR

“I think it’s a good tact to keep things rolling status quo, since you are up for it. Maybe as wounds heal and new people are elected, there can be a better meeting of the minds.” JD

“I think you’ve raised the challenge here – the question I have, from a negotiating standpoint is, ‘What could _____ do to avoid a splinter group?’ You say new leadership; I say, ‘Then what?’ You’ve noted they consistently ‘steal pages from your book’ – not entirely surprising, when a savvy individual is out in front of a group, in terms of their (lesser) ability to move. The way I see it, you have a very good platform of research, publications and training; and what _____ could do, is take each one further, based on their resources, staffing, etc. That’s why I thought your offer to sell made sense. Now, with you still in the business, what’s their ‘best alternative to a negotiated agreement’?” PB

“Good post. Decision made. Go for it!” NB

Postscript.

As you can see and read, the discussion continues. Frankly, I was humbled, but not terribly surprised, that more than a dozen of my ‘friends in the MHBusiness’, ALL land lease lifestyle community ‘owners’, took the time to reach out and communicate their thoughts and ideas, regarding the subject matter of last week’s blog posting. I Thank them for that. Now? Frankly, my efforts are focused on planning and hosting the Best Networking Roundtable Ever, when we gather in Bloomingdale, IL., 18 – 20 September. Don’t wait to send in your registration! Last year we had some challenges accommodating everyone who wanted to attend; hopefully that won’t be a repeated situation this year. But YOU can ensure your ‘boat space’, as we say in the Marines, by registering NOW, for the Networking Roundtable and hotel accommodations. GFA

***

III.

Encouraging & Disturbing Words from Assn. Executives

FIRST, THE ENCOURAGING WORDS.

Relative to the Uniform Manufactured Housing Act – intended to supplant vehicle titles presently used as ‘proof of ownership’ for manufactured homes sited on leased land, as in a land lease lifestyle community:

“Don’t worry (George). The state MHAssociation execs have a solid handle on the Uniform Manufactured Housing Act. We killed it, so far, in (three states) already. The Uniform Law Commission, and others, thought they could pass it over our objections. Nope. These bills are DOA (dead on arrival) at state capitols around the country. Thanks to the good work of Marc Lifset, esquire, and others, keeping us up to date on progress.” A Midwest MHAssociation executive. (lightly edited)

SECOND, THE DISTURBING WORDS.

Relative to ‘Resisting elimination of the Federal HUD Program.’ Title of a recent op/ed piece, by Danny Ghorbani, in The Journal (May 2013)

“The total elimination of the federal manufactured housing program has been a longtime goal of an unusual convergence of industry competitors, special interests and certain regulators. Their reasons and motivations may vary, but the objective is the same – ending the federal superintendence of the industry that began in 1974. Without the federal program, though, the uniform, performance – based regulation, federal preemption and uniform federal enforcement, which together ensures the unique affordability of manufactured housing, particularly for lower and moderate – income American families, would vanish.”

In this article, Mr. Ghorbani cites attempts by this ‘unusual convergence of industry competitors, special interests, and regulators’, to which I’d add: at least on covert, in – house (excusing the pun) influencer, who’ve recently effected “…an attempted diversion of a Government Accountability Office (‘GAO’) investigation of the HUD program mandated by Congress.” How so? Danny, again, cites:

• A 15 year old study by (Get this!) the National Association of Homebuilders NAHB Research Center, in behalf of HUD’s Office of Policy Research & Development (‘PD&R’), to posit whether ‘changes at the state and local level (Read ‘building codes’) have changed the need for (federal) preemption today”, compared to 1974? Talk about a Red Herring diversion.

• Reports of ‘interviewers’ traveling the U.S. asking specially – selected manufactured housing producers, and others, ‘What would be the likely effect on your niche in the manufactured housing business, if HUD was/is relieved from regulatory oversight?” How would YOU like to be asked that question with no advance warning?

All this simply scratches the surface of what is going on now in our nation’s capitol, relative to the HUD – Code manufactured housing industry, and by extension – don’t forget, the land lease lifestyle community real estate asset class!

Again, to stay abreast of these ‘encouraging’ & ‘discouraging’ political and regulatory developments, read this blog posting faithfully every Sunday; and for ‘the rest of the story’, read the Allen Letter professional journal. Also request to be put on the Manufactured Housing Association for Regulatory Reform’s online, email distribution list via (202) 783-4087.

***

George Allen, CPM®Emeritus, MHM®Master
Consultant to the Factory – built Housing Industry,
The Land Lease Lifestyle Community Asset Class &
Affordable Housing Purists & Enthusiasts Nationwide
Box # 47024, Indianapolis, IN. 46247
(317) 346-7156

Blog # 241 Copyright 2013 14 April, posted 12 May 2013

Perspective. ‘Land lease lifestyle communities, a.k.a. manufactured home communities & earlier, ‘mobile home parks’, are the real estate component of manufactured housing.’

The 20 Year Itch!

How the (then) ‘mobile home park’ business model ‘established its pre – REIT groove’ in 1993; coasted along for two decades as the unique ‘manufactured home community’ income – producing property type; and now, seeks to ‘get its groove back’, as the enhanced public image, land lease lifestyle community real estate asset class – right up there among conventional apartment communities and other forms of multifamily commercial real estate.

Believe it or not, there was once a time, during the 1980s, when (then) mobile home park owners/operators had NO national networking and deal – making meetings, NO dedicated print media of any sort, NO operating performance statistical benchmark reports, and NO professional property management training and certification programs! All that changed pretty quickly though, as the 1990s began, and Wall Street ‘discovered’ mobile home parks cum manufactured home communities, as a highly desirable investment vehicle (excusing the pun, of course).*1

This epiphany had everything to do with the soon debut of manufactured home community real estate investment trusts or REITs, in 1994 & 1995 – though Wall Street, to this day, continues to appear uncomfortable referring to the realty asset class as anything but ‘manufactured housing REITs’ – a misleading nod towards the home fabricating segment of the manufactured housing industry. And WS still has difficulty understanding why income – producing properties, per se, are not ‘growth stocks’ of the sort they prefer to hawk.

In any event, enroute to effecting the above – referenced Initial Public Offerings or IPOs of stock, the REIT – destined firms agreed there was a need for better National Advocacy, in behalf of the asset class, than was available at the time via the sole national body representing HUD – Code manufactured housing. So, on 31 August 2013, 19 owners/operators of this unique property type, met for a strategic planning meeting in Indianapolis, IN. And one might accurately say, from that point forward, ‘the rest is history’, as the following Research & Resources matured along with the constantly consolidating realty asset class:

• The annual ALLEN REPORT while debuting during 1989, ‘hit its’ stride’ by 1994 & 1995, annually polling 500+/- property portfolio owners/operators for their Operating Expense Ratio (‘OER’) data, which along with the newly published Official Industry Standard Chart of Accounts, ‘put manufactured home community profitability performance ‘on the map’ where public (stockholder) interest in the asset class was concerned. That same year, J. Wiley & Sons’, Development, Marketing & Operation of Manufactured Home Communities debuted and sold out within six months of publication. And for the first time in 20 years, new properties were being developed, and existing ones were in high demand. This too short renascence, however, would peak in 1998, and then continually decline during the next 15 years.

• The monthly Allen Letter, since renamed the Allen Letter professional journal, while first published in 1991, distinguished itself as the sole trade media print publication to focus on the information and HOW TO needs of manufactured home community owners/operators nationwide. It served as the communication dispersion and camaraderie glue that ‘got the word out to owners/operators’ and united their thinking relative to industry issues and much more.

• Then there’s the International Networking Roundtable. Meeting for the first time, during the Spring of 1992; a year later, the second annual roundtable event spawned the aforementioned Indianapolis strategic planning meeting. Speaking of which, that ad hoc group of 19 owners/operators met a few more times, as an Industry Steering Committee or ISC, during 1993 and 1994, before being invited by the Manufactured Housing Institute, to merge and create a National Communities Council. Thus, on 1 January 1996, the NCC began its’ work in Arlington, VA., eventually becoming a division within MHI. And the annual Networking Roundtable continues to convene, with the 22nd one scheduled for 18 – 20 September at the Hilton/Chicago Indian Lakes Resort in Bloomingdale, IL. Phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 for an ‘invite’ to attend – if you’re a LLLCommunity owner/operator.

• During the next decade, several exciting and needed (at the time) manufactured home community – related innovations were created, to initially wax, but eventually wane, e.g. a national Recognition of Excellence Award program, and Community Attributes System or CAS. Why? Maybe right program(s) at wrong time(s) or vice a versa; maybe the NCC, having one leaderless year and no fewer than six salaried executive vice presidents heading the program during its’ 17 year history has yet to find long term traction; and yet again, maybe something else….

Be all that as it may be, what’s going on today? Well, that’s difficult to pin down without naming names, even picking at old scabs. But here’s what we do have in play. Still the above – referenced annual (24 years) ALLEN REPORT, a.k.a. ‘Who’s Who Among Land Lease Lifestyle Community Portfolio Owners/operators Throughout North America!’, by which we ‘keep score’ as to who owns and or fee manages the most rental homesites & RV sites, in North America. It’s how we know ELS, Inc., the Chicago – based mega – REIT, is the largest public owner of LLLCommunities in the entire world. And how RHP Properties recently, by acquiring ‘the remainder of the old ARC (former REIT) property portfolio’, has become the largest privately – owned operator of LLLCommunities in the entire world.

J. Wiley & Sons’ first text has been joined by a second: How to Find, Buy, Manage & Sell a Manufactured Home Community (Remains the only case bound text on this subject), and sixth edition of Land Lease Community Management, the instructional basis of the Manufactured Housing Manager®, or MHM®, professional property management training and certification program. While all three books are available via amazon.com, new, unused copies are available directly from the publisher via (317) 346-7156. And frankly; during the past three years, three additional paperback texts have been added to the number of trade references available to LLLCommunity owners/operators nationwide.

Furthermore, the Allen Letter professional journal, continues to be published monthly, along with the higher – priced, limited distribution business newsletter, the Allen CONFIDENTIAL! And the information – conveying nature of these two publications is eclipsed only by the education (22 sessions), interpersonal networking, and deal – making opportunities offered by the aforementioned annual Networking Roundtable effected every Fall.

So, what’s wrong with this status quo? Why a ‘20 year itch’ to take national advocacy and these asset class sophistications up another notch? More than one reason actually.

First and foremost. Though MHI’s NCC division has been in business for 17 years now, its’ number of direct dues – paying members continues to languish around the 100 mark. And if MHI’s proposed bylaw changes, distributed during the institute’s annual Legislative Conference during February 2013, are implemented as presented, the council could lose (‘NCC’) name identity, in lieu of ‘LLLCommunity members simply being members of MHI’. And, ask yourself, ‘What tangible council accomplishments can one identify as having been effected during the past two, make that several, years?’ Answer?

And right up there near the top (reason), is – or was, a unique, once in a lifetime or career opportunity for MHI ‘to bring everything extraneous to NCC, ‘in house’, so to speak; OR, risk the probable creation of a new and separate national, not for profit entity, to continue statistical Research and ongoing Resource servicing, in behalf of the LLLCommunity asset class, that’s evolved as ‘a profit center business model’ during the past 33+ years.

A succinct way to put this whole matter, described in the previous dozen plus paragraphs, in Summary, is to recall 1) we didn’t have any of these niceties during the 1980s; 2) they (Advocacy, Research, Resources) budded nicely during the ‘Go Go’ REIT years of the 1990s – until we lost our access to chattel financing at the turn of the century; and now that we’re a decade into the New Millennium, 3) we have/had this rare opportunity to (either) unite and blossom as a bona fide real estate asset class within the auspices of MHI/NCC – if we can get our act together, stop the territorial bickering, and stop trying to recreate the wheel that’s brought us this far together already! OR, as was articulated in the previous paragraph; what other alternative is there, ‘if not within the MHI/NCC structure’, 4) create an altogether new, realty – based, national trade entity along the lines of the National Apartment Association, Building Owners & Managers Association, Community Associations Institute, even a subset of the National Association of Realtors.

What’s it going to take – in either case, to succeed? LEADERSHIP. Leadership CAPABLE of looking beyond ‘the way we’ve always done things’ (at least for the past 17 years), to see the upsides of having land lease lifestyle community owners/operators selecting and working toward their own destiny within and alongside, but not ‘behind’, the HUD – Code manufactured housing industry. Leadership EXPERIENCED at taking on assignments and actually ‘getting the job done’! Leadership MOTIVATED to do what’s Best for the entire realty asset class, and not just one group, or another, of owners/operators, maybe based on property and or portfolio size! Do we have such LEADERS available today?

Frankly, I have NO interest in debating this matter with anyone, especially individuals who don’t have ‘skin in the game’ as LLLCommunity owners/operators. Certain former PMs and would be journalist gadflies need not respond. And Yes, if you are a LLLCommunity owner/operator, I’d like very much to hear and read your opinions and suggestions relative to these timely and historic matters. WHY? Read the next paragraph carefully. Then reach out to me via GFA c/o Box # 47024, Indianapolis, IN. 46247 or gfa7156@aol.com, or the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

I’m not going anywhere soon! I’m healthy – following heart surgery and loss of 30 pounds. I’m happy. And I’ve recommitted myself to serving the 1) statistical Research & 2) ongoing Resource servicing, of all my land lease lifestyle community owner/operators peers throughout the U.S. and Canada! And even though I’ve been unsuccessful ‘selling off’ GFA Management, Inc., dba PMN Publishing business interests’, so I could retire, I have no immediate plans to found a new, national, not for profit trade body to supplement national Advocacy efforts of MHI’s NCC – even though that might yet prove to be the best route to take, for LLLCommunity owners/operators ‘Large & Small’. Are we clear so far? If so, Good. If not; I really don’t know how to make those points any clearer. Continuing. There has not been an open meeting of all NCC members since the ‘October 2012 ambush of two direct, dues – paying MHI members’, in San Antonio, TX.; and the next NCC meeting isn’t scheduled until MHI’s annual gathering in La Jolla this Fall (2013), and that’s still five months away. Perhaps a better way to address this ’20 year itch’, within the NCC, relating to asset class Advocacy, Research, & Resources, would be to effect a change in leadership, instead of announcing plans to waste time and resources duplicating what’s already in place, relative to Research & Resources, and working well for LLLCommunity owners/operators Large & Small, nationwide…. What do you think?

*****

George Allen, CPM & MHM
Consultant to the Factory – built Housing Industry,
The Land Lease Lifestyle Community Asset Class &
Affordable Housing Purists & Enthusiasts Nationwide

End Notes.

1. And how did the segue from mobile home park to manufactured home community come about? Simple. When textbook publisher was preparing to bring the first published work, about this unique, income – producing property type, to market (prior to 1994), it was dismayed to learn there were no fewer than three monikers afoot, around the U.S., describing this business model. So, following surveys via the now defunct Manufactured Home Merchandiser magazine, the MHIndustry, pretty much as a whole, ‘voted’ to move away from trailer court and mobile home park, to manufactured home community – though a few individuals held out for the hybrid term – manufactured housing community. And, for the next 20 or so years, ‘the rest is history’.

Blog # 245 Copyright 2013 5 May 2013

Perspective. ‘Land lease lifestyle communities, a.k.a. manufactured home communities & earlier, ‘mobile home parks’, are the real estate component of manufactured housing.’

I.

WHAT YOU MISSED!

II.

‘More Than a Baker’s Dozen Excellent Reasons’ to Attend the 22nd Networking Roundtable in Bloomingdale, IL. @ 18 – 20 September 2013!’

III.

NOW AVAILABLE for the asking!

***

I.

WHAT YOU MISSED!

There’s a sea change a – coming to the manufactured housing industry; and for many. it’s already here!!!!!

During the past 35 years, factory – built housing has experienced emergence and maturity of its’ HUD era; period of the ‘hudulars’, a ‘land – and – home package’ hiatus; and of late, an emphasis on land lease lifestyle community (a.k.a. manufactured home community) infill! And during the same 3 ½ decades, among the estimated 50,000 LLLCommunities nationwide, we’ve witnessed three waves of realty investment consolidation, resulting in 500+/- property portfolios; and, the stark operational necessity (i.e. read ‘survival’) to sell, and often self – finance, new and resale housing transactions on – site, to maintain rental homesite occupancy. Furthermore, we now find ourselves in the midst of an unprecedented period of federally and state – mandated compliance with pervasive housing finance regulations pertaining to chattel (personal property) capital lending.

This regulatory sea change has to do with one’s familiarity and compliance with the S.A.F.E. Act; and, Consumer Finance Protection Bureau or CFPB rules and regulations pertaining to the Red Flag Rule, Safeguard Rule, Disposal Act, the Patriot Act, OFAC, Anti – Money Laundering, EEOC, FACTA, TILA, ECOA, RESPA, MDIA, FCRA, Debt Collection & Servicing, Privacy, UDAA, Escrow funds, Risk Based Pricing, Leasing, HOePA, and more.

So, ‘WHAT DID YOU MISS this past week?’ Independent (street) MHRetailers and land lease lifestyle community owners/operators, who routinely sell homes on – site in 20 or more states, convened in Davenport, Iowa, for the 2nd National Retailer Summit. This seminal biennial event, planned and hosted by consultant Bill Carr, is a valuable service to the manufactured housing industry and LLLCommunity asset class at large! No one else, corporate or trade association – wise, comes close to providing an opportunity and venue, for these two disparate – yet – now – linked – thru – diversity segments of the HUD – Code manufactured housing industry; to caucus and share Lessons Learned regarding the nature of various financing business models; and, how to be fully compliant with the plethora of state and federal regulations pertaining to chattel finance of new and resale manufactured homes. To maybe secure an ‘invite’ to the 3rd National Retailer Summit, phone (800) 336-0339 and talk to Bill Carr. He was assisted during this National Retailer Summit by Ken & Donna Rishel of Rishel Consulting, and yours truly. Speaking of the Rishels. If you haven’t participated in one of their chattel finance workshops, you should. Find out more by phoning (217) 971-3968.

What was covered? Well, for a complete summary, you’ll have to read the June issue of the Allen Letter professional journal. Phone the MHIndustry’s HOTLINE: (877) MFD-HSNG or 633-4764 to subscribe @ only $134.95/year for 12 monthly issues.

In the meantime, here’s a brief overview of major topics covered during the 2nd National Retailer Summit:

• Identification & review of 18 distinct, but appropriate, financing business models

• Use of Sales Transaction Analysis Forms to document & articulate profitability

• Review of all the aforementioned federal regulations under the CFPB’s authority

• Captive Finance as alternative to traditional independent retail financing of homes

• Introduction to Private Investor Financing of manufactured homes in communities

• Role of matrix and underwriting guidelines to guide one’s home financing efforts

• Review of differing perspectives between MHRetailers & LLLCommunity owners, relative to ‘making $ deals now’ mentality vs. ‘annuity income over time’

How can YOU afford NOT to have been present at such a valuable Open Discussion Learning Opportunity? Hopefully we’ll see you at the next go – round, probably in late October or early November this Fall.

A personal pique, is that NO national MHIndustry advocacy body to date, offers this sort of Open Forum, to and for members, whereby timely and needed practical guidance – in this instance, regarding chattel finance regulatory compliance, is shared! GFA

II.

‘More than A Baker’s Dozen of Excellent Reasons’ to Attend the 22nd Networking Roundtable in Bloomingdale, IL @ 18-20 September 2013!

Here’re Reasons Why Land Lease Lifestyle Community Owners/operators Regard the Annual Networking Roundtable to be the Asset Class’ Preeminent Educational, Interpersonal Networking, & Deal – making Event…

• 20+ contemporary topic & panel presentations in two days; Yes, 20+!

• Maximum interpersonal networking during nine social & meal events

• An Investor’s Symposium for would – be buyers of LLLCommunities

• Inspect & order new Community Series Homes from those exhibited

• Best Deal – making Opportunities ever, for LLLCommunity owners

• Experience a mix of old (circa 2001) & new asset class traditions….

• Learn the key role of our RV/MH Hall of Fame, museum & library

• Learn to create your Brand Marketing Platform, using social media

• Receive 3 new plastic Training Aid cards: ‘5RPs @ Marketing-Sales’

• Meet& Learn from a dozen or more real estate mortgage originators!

• Be exposed to every form of public & private chattel capital finance!

• Consider RV business and sites, to diversity your business model

• Meet Green Hill Financial, Corporate Shield, & other new $ players!

• Time for a Chattel Capital Fund ‘by & for’ LLLCommunity owners?

The brochures for the 22nd annual International Networking Roundtable will initially be distributed with the June 2013 issue of the Allen Letter professional journal, and will also be available on the website: community-investor.com OR, phone the above – referenced MHIndustry’s HOTLINE!

Remember; 18 – 20 September 2013, in Bloomingdale, IL. See you there!

III.

NOW AVAILABLE for the asking!

Land Lease Lifestyle Community’s Official Industry Standard Chart of (Operating Expense) Accounts
&
Operating Expense Ratios, or OERs!

Veteran LLLCommunity owners/operators have been using the 1992 era Official Industry Standard Chart of (Operating Expense) Accounts, and accompanying Operating Expense Ratios or OERs, for decades. Well, with recent input from ARA MHC Group, a Denver, Colorado – based real estate brokerage specializing in this realty asset class, we’ve recently updated the helpful chart, finally dropping references to the Texas A & M data, and Horner group information, and adding ‘stats’ provided by ARA MHC Group.

Blank column space has been left on the recently revised chart, to facilitate adding even more OER data, hopefully from one or another of the national real estate brokerages also specializing in marketing LLLCommunities nationwide. Anyone listening out there?

Want a FREE copy of this recently revised Official Industry Standard Chart of Accounts & OERs? Simply phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or633-4764 and ask for it. Copies are also being distributed, as lagniappes, with the May issue of the Allen Letter professional journal.

***

George Allen, CPM & MHM
Box # 47024, Indpls, IN. 46247
(317) 346-7156

Blog # 244 Copyright 2013 28 April 2013

Perspective. ‘Land lease lifestyle communities, a.k.a. manufactured home communities & earlier, ‘mobile home parks’, are the real estate component of manufactured housing.’

I.

Manufactured Homes & Land Lease Lifestyle Communities,
the Archetype For All Affordable Housing

II.

Others Benefit from This; Why Not Your Firm???

III.

And the Talk Goes On, but That’s ‘All it is’ So Far…

IV.

Soft Underbelly (vulnerability) of Social Media!

V.

Did You Realize? 2013 is 20th Anniversary of….

I.

Manufactured Homes & Land Lease Lifestyle Communities,
The Archetype of Affordable Housing

Allowing for differences in business practices and ‘barriers to affordable housing’, among local markets, HUD – Code manufactured homes in land lease lifestyle communities (a.k.a. manufactured home communities), charging site rent in sync with other forms of multifamily rental housing (e.g. Usually 1/3rd the amount of monthly rent charged for a 3BR2B conventional apartment), continues to be the Sole Archetype (prototype) for Truly Affordable Housing in the United States today!

FOR EXAMPLE. Anyone earning the recent national Annual Median Income, or AMI, of $51,000, can afford a small new or modest resale manufactured home, given favorable loan terms, and modest site rent in most all age LLLCommunities! The Key to Success, is NOT to exceed the commonly – accepted 30% of AMI Housing Expense Factor, wherein household utility expenses, but not telecom charges, are included, along with PITI within said HEF. SPECIFICLLY: $51,000 AMI X .3 HEF = $15,300 available for housing payment & household expenses; X .75 (75%) to separate out ‘available for’ PITI payment amount alone, = $11,475; divided by 12 months = $956.24/month, less $300/month for site rent = $656.25 available for monthly house payment or PITI (principal, interest, taxes, insurance). This calculation in accords with the ‘Ah Ha! & Uh Oh! Worksheet’, available FREE by phoning the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

Where else can one go in the U.S. today, to buy a home, which will likely appreciate in value over time – if well cared for and sited in a good location; and pay site rent to live in a multifamily community professionally managed – not having to be subsidized by the government and one’s fellow citizens? Nowhere!

II.

Others Benefit from This; Why Not Your Firm???

Following passages are excerpted from a recent briefing effected for the board of directors of a manufactured housing and land lease lifestyle community – related firm. As you read thru these informative excerpts, ask yourself, ‘Would this material be of interest and helpful to officers, senior executives, even board of directors of our firm? If so, give me a call at the MHIndustry HOTLINE: (877) MFD-HSNG or 633.4764 to schedule a briefing.

‘So, what’s with this ‘land lease lifestyle community’ lingo anyway? Well, it’s tacit and timely industry cum public recognition this unique, income – producing property type, heretofore known as ‘manufactured home communities’, now routinely site six or more different housing types on the rental homesites contained therein….’

‘There are an estimated 50,000+/- LLLCommunities nationwide, with 85% of that number containing fewer than 100 rental homesites apiece. And that 85% drops to 78% in Sunbelt states like Florida and California. Unfortunately, we’ll not firm up those inventory number percentages anytime soon, for several reasons….’

‘In 1987, the real estate consulting firm Deloitte Haskins + Sells, in their newsletter, Roulac’s Strategic Real Estate, identified the ’25 Largest Mobile Home Park Owners (by spaces owned). A year later, Roulac’s list ceased publication, and the first ALLEN REPORT (a.k.a. ‘Who’s Who Among LLLCommunity Portfolio Owners/operators Throughout North America!’) debuted, immediately bumping the number of ‘portfolio firms’ from 25 to 100! Why the fourfold increase in number of ‘players’ nationwide? Three reasons: The first wave of consolidation was well underway, characterized by limited partnership syndicators, taking advantage of a major tax break that had lasted until 1986….’

‘From early to late 1990s, consolidation continued, and for awhile, it appeared ‘everyone’ would become a real estate investment trust or REIT. That did not happen. Only six were ever formed, three survive today. What happened? Too high expectations by WS analysts, who erroneously viewed LLLCommunities as ‘growth stocks’, insisting dividends grow quarter after quarter after quarter. NOT. And increased regulation….’

‘Since year 2000? NO more lasting REITs (e.g. loss of ARC – twice now, & American Land Lease); NO more chattel capital, to speak of, from independent, third party chattel lenders – but that’s not the whole story. Equity partner ownership takes center stage, first with Hometown America, then Green Courte Partners (Anyone know the single unique commonality among the firms ELS, Inc. (the REIT), Hometown America, Green Courte Partners & American Land Lease? Answer: _______________)’

‘According to the 24th annual ALLEN REPORT, 500+/- LLLCommunity portfolio owners/operators today, own an average of 22 properties apiece (With ELS, Inc., at the top, with 382 properties and an average property size of 369 rental homesites, with 60+/-% of those being for RVs).’

‘And here are the four Current Business Challenges & Trends Sorely Affecting LLLCommunities Nationwide…’

Yes, this briefing content is chock full of historical notes, industry trends, even the challenges and opportunities we face today. So, do you think your management team would benefit from being better informed and made knowledgeable of ‘where we’ve been’, ‘where we are today’, and ‘where we might well be headed’ during the next ten years or so? If so, again give me a call and schedule a presentation. GFA (317) 346-7156

III.

And the Talk Goes On, but That’s ‘All it is’ So Far…

“My comments on exiting HUD were solicited by George (Allen), and were on that point. Do I think we should exit HUD? I am not sure, but do see some wonderful advantages – FREEDOM being the most important. I also see some uglies – POOR STANDARDIZATION being the most prevalent.” NB

What I’ll say at this point in time is, WE SHOULD ALL BE GRATEFUL for the ACTIVE NATIONAL ADVOCACY ROLE the Manufactured Housing Association for Regulatory Reform (MHARR) is playing in keeping several emerging issues ‘front and center’ among businessmen and women deeply concerned about the present and future of their manufactured housing and land lease lifestyle community enterprises. For example:

I continue to be amazed how little public dialogue is taking place regarding provisions of the Uniform Manufactured Housing Act, proposed by the Uniform Law Commission @ July 2012. Nary a word about the matter last week, at the MHCongress in Las Vegas. Isn’t anyone else concerned about probable negative consequences (Maybe higher taxes on the homes) of doing away with the titling of manufactured homes inside and outside LLLCommunities? The excuse I hear, from more than one national leader, is ‘This is a state matter.’ OK, I’ll concede that; but shouldn’t there be information and guidance ‘trickling down’ from our national advocacy body to state MHAssociations? Not saying it isn’t happening; but I’m a dues – paying member of two such trade bodies, and I’m ‘hearing & reading nothing’. By the way; ‘Why the de – titling initiative in the first place/” So certain large national bank(s) can feel more comfortable originating non – chattel mortgages on new and resale manufactured homes.

Then there’s this whole matter of ‘HUD vs. No HUD’ regulatory oversight of manufactured housing, going forward. Reread the direct quote that introduced this portion of this week’s blog posting. NB simply ‘scratches the surface’ of the pros and cons relative to this timely, potentially paradigm shift effect on HUD – Code manufactured housing as we know it today. Tell me; do you really think, if HUD is taken out of the picture, we’ll be left, as an industry, to function (i.e. self – regulate) on our own? Not for a minute! The gist of this ‘capitol move’ has to do with forces outside, but near our industry, wanting to step in and exert their own brand of influence and control over the manner in which we build and site our brand of factory – built housing. And here we are, for the most part, sitting quietly by, while fate appears to take us in a direction over which we’re exerting little to no control. Think I exaggerate? Guess you’ll have to wait and see. Frankly, as I’ve written before here (In ‘Hey HUD! Help Out!’), I’d like to see HUD actively promote HUD – Code manufactured housing as affordable housing.

Earlier I lauded MHARR for keeping grassroots manufactured housing and LLLCommunity businessmen and women, like thee and me, informed. Well, how many of you read MHARR’s announcement, 23 April, to this effect: “The House Financial Services Committee cannot legally accept testimony from Richard Cordray, on the Consumer Financial Protection Bureau’s (CFPB) semi – annual report until he is validly appointed as the bureau’s director”, said Rep. Jeb Hensarling (R-TX), the committee’s chairman. However, the committee will continue to conduct rigorous oversight of the CFPB. Do you catch the drift of the first statement? Hopefully you do. Again; who else is keeping us (YOU) informed about such matters potentially affecting our business interests? Get on MHARR’s online email distribution list by phoning (202) 783-4087.

IV.

Soft Underbelly (vulnerability) of Social Media!

The following two passages are quoted directly from the March/April 2013 edition of Sales & Marketing magazine, and warrant your close attention – and probably action, within your firm!

“Many social media enthusiasts are convincing businesses, governments, and nonprofits, to use social media based on blind faith, supported by soft metrics that, for all intents and purposes, is (simply) old marketing guised as newfound engagement. Just because a business is embracing new technology doesn’t mean it is creating meaningful, productive or measureable experiences.” P.6

– and this –

How so? “A study conducted by Satmetrix in mid – 2012, revealed less than half the companies it surveyed, tracked and followed up on customer feedback in social media. An astonishing 28 percent do NOT track or respond, leaving customers to question their value to the businesses they support. That lack of acknowledgment or engagement leaves the door wide open to competitive courtship….

Acquisition of customers through social networks is only part of the story. The brilliance of social networks is the opportunity to transform negative experiences into positive outcomes. Conversations inspire opportunities for product refinement, or innovation to create remarkable experiences from the onset.” P.7

For more information on this disturbing subject, read the new J. Wiley & Sons release: ‘What’s the Future of Business? Changing the Way Businesses Create Experiences’ by Brian Solis, 2013.

BOTTOM LINE. Are your employees tracking and responding to customer inquiries? How do YOU know for sure? One way is to engage in Mystery Shopping. Do so in – house, with a corporate staff individual trained to do so – online, via telephone, and best of all, via on – site interview of home sales and site – leasing staffers. Need guidance? Call the aforementioned MHIndustry HOTLINE and request a FREE copy of the Mystery Shopping firm in use throughout the MHIndustry & LLLCommunity environments since the early 1990s – and updated over the years. OR, hire us @ $500.00 per property (plus travel expenses) to perform a complete three part Mystery Shopping audit and written report, with photos, of each of your under – performing land lease lifestyle communities. Use the same MHIndustry HOTLINE.

V.

Did You Realize? 2013 is 20th Anniversary of…

Camaraderie and national advocacy among land lease lifestyle community owners/operators nationwide! Yep; on 31 August 1993, 19 LLLCommunity owners/operators, from throughout the U.S. convened at an airport hotel in Indianapolis, IN., for a daylong Strategic Planning Meeting. This was just before the first portfolio of LLLCommunities started the second REIT wave (First one was in the mid – 1980s…think UMH Properties, Inc.) in 1994. These owners/operators decided to take control of their collective business future, first by ensuring far better National Advocacy in behalf of the real estate asset class, then pursue projects which would lead to better operations, marketing, positioning, even improved image of the unique, income – producing property type.

Yes; an appropriate 20th anniversary celebration is in order, and being planned, to commemorate this important event in the history of LLLCommunities1 It’ll take place 18 – 20 September, during the 22nd annual Networking Roundtable at the Hilton/Chicago Indian Lakes Resort in Bloomingdale, IL. (suburb of Chicago & near the O’Hare airport). All 18 living owners/operators (Ron Richardson died last year) have been invited. Two have formally retired, but there’re about ten who’re still actively involved in their respective MHBusiness interests. Should be a very special time for all. Will YOU be present? To ensure an ‘invite’, again call the aforementioned MHIndustry HOTLINE or email me via gfa7156@aol.com

***

George Allen, CPM®Emeritus, MHM®Master
Consultant to the Factory – built Housing Industry,
The Land Lease Lifestyle Community Asset Class &
Affordable Housing Purists & Enthusiasts Nationwide
Box # 47024, Indpls, IN. 46247
(317) 346-7156

Blog # 243 Copyright 2013 21 April 2013

Perspective. ‘Land lease lifestyle communities, a.k.a. manufactured home communities & earlier, ‘mobile home parks’, are the real estate component of manufactured housing.

I.

A Potpourri of this year’s MHCongress in Las Vegas

II.

LEST WE FORGET (ALREADY)

III.

Preview of ‘Things to Come’ in Next Week’s Posting

***

I.

A Potpourri of this year’s MHCongress in Las Vegas

Attendance was up this time around, MHI Chairman Nathan Smith tells me, by more than 100 registrants. Seemed enthusiasm was ‘up’ as well. Now, all WE need is a significant uptick in the annual new home shipment number of new HUD – Code manufactured homes!

Matt Follett makes historic pitch for INSPIRE Communities (‘Enriching American Lives Through Affordable Housing Communities’) as maybe, within two to three years, the next real estate investment trust (REIT) from the land lease lifestyle community realty asset class!

“Gee George, where were you on Tuesday (@ NCC Forum)? Wanting to learn from you, is the reason I signed – up in the first place! But had to listen to execs from the big firms again.” Those were the two most frequent remarks I heard from folk, as I visited the MHCongress exhibits on Wednesday. The occasional third question? “Were there any bona fide owners of LLLCommunities presenting this year?” Hmm.

Michael L. Glass is now the National Director of Marcus & Millichap’s 21 land lease lifestyle community marketing specialists nationwide. (216) 264-2000. Be sure to attend his firm’s annual Investors’ Symposium, from 4 – 6PM, on Wednesday, 18 September 2013, at the Hilton/Chicago Indian Lakes Resort in Bloomingdale, IL. Phone the MHIndustry’s HOTLINE: (877)MFD-HSNG or 633-4764 for information and to register.

NCC Forum attendees hear promise of more attention to land lease lifestyle community owners/operators’ needs in the future, including an increased emphasis on statistical research.

MHIndustry veterans miss showman Gub Mix as Awards Luncheon emcee!

Cavco360 Finance Program debuted as means to ‘Recycle Your LLLCommunity Investment’ For info, contact (312) 346-1874 and talk to Stephen Wheeler at HAS-Capital.

An increasing number of firms use the annual MHCongress and International Networking Roundtable, to bring their boards of directors, regional property managers, even investors, together to experience ‘these events’ and meet privately to pursue their own agenda. ROC USA® and a Canadian – based owner of LLLCommunities were just two such firms this time around.

Sure, there’s much more I could share with you, but much of that will find its’ way into print during the next few weeks as we pen and publish the Allen CONFIDENTIAL! and Allen Letter professional journal ‘business newsletters’ during the next couple weeks. Be especially alert to the newly updated (first time since about 1993) Industry Standard Chart of (operating expense) Accounts, along with some new Operating Expense Ratio (OER) percentages provided by ARA MHC Group out of Denver, CO. Copies of the new one pager will be attached as an enclosure to the first publication, and as a lagniappe in the second one. You don’t want to miss updating your OER statistical reference tool! If not already a newsletter subscriber, phone the above – referenced MHIndustry HOTLINE to do so.

II.

LEST WE FORGET (ALREADY)

The following quotes are from the ebook, The New Robber Barons, by Janet M. Tavakoli. Pretty sobering stuff….

From ‘Blame the Victims and Enrich the Perpetrators’, 1/13/2011. “While there were instances of fraud by borrowers, the key drivers of our housing crisis were fraud perpetrated by mortgage lenders and securities fraud – by some of our most revered financial institutions – that provided money to fuel fraudulent mortgage lending.”

“After the largest bank bailout in world history, we have a national epidemic of foreclosure fraud. In cases where foreclosures are being delayed, banks are walking away from abandoned homes and sticking local taxpayers with the bill to clean up the mess they left behind.”

From ‘GSAMP: Garbage Sold at Mythical Prices’. “In 2007, the state of Ohio kicked the California – based New Century mortgage lending carpetbaggers out of the state and barred New Century from doing business after despicable practices. A complaint of alleged fraud on the part of Goldman Sachs detailed its close relationships with Countrywide, New Century, and Fremont. The complaint showed Goldman knew of ‘an accelerating meltdown for subprime lenders such as New Century and Fremont.’ Despite known serious loan problems, Goldman continued to securitize the loans and sell them in packages of residential mortgage backed securities.’

From ‘Countrywide Broke the Law’. “…allegations of suspect practices from mortgage lenders, including Countrywide, now owned by Bank of America, were revealed. According to a former Countrywide employee: ‘approximately 90% of all reduced documentation loans (a.k.a. ‘liars’ loans) sold out of a Chicago office, had inflated incomes, and one of Countrywide’s (mortgage brokerage arms) routinely doubled the amount of the potential borrower’s income…so borrowers could qualify for loans they could not afford.” Illinois Attorney General Lisa Madigan told First Business Morning News: “Countrywide broke the law, homeowners did not.”

“Despite evidence of widespread interconnected mortgage lending, securitization, and foreclosure wrong – doing and fraud, there are no meaningful felony indictments.”

As most of us in the manufactured housing industry, and as owners/operators of land lease lifestyle communities, well know, chattel loan origination has not returned to anywhere near what it was back in our latest heyday, 1998. And only time will truly tell, if and when it ever does. But in the meantime, it’s helpful, albeit painful, to remind ourselves of what happened, not just to HUD – Code manufactured housing, but to our Big Sister industry, the site – built housing business, about which much of the preceding paragraphs describe. It’s no small wonder we suffer the financial regulatory measures rampant today; and it’s no less a mystery as to why our national economy continues to flounder. Is there a solution in sight? Depends on who you ask, and what aspect of housing finance one explores. But for the time being, we have to make do with what we do and don’t have available to work with in our business environs.

III.

Preview of ‘Things to Come’ in Next Week’s Posting

Interested in reading what a board of directors hears, when briefed about the land lease lifestyle community real estate asset class? Well that’ll be spelled out in detail for you next week in this blog posting. We’ll even take a long look back at the August 1988 edition of Roulac’s Strategic Real Estate newsletter’s final ‘Largest Mobile Home Park Owners in 1987’ listing, the precursor to the ALLEN REPORT annually researched and published since then (#22 @ 2013). You’ll find it interesting to learn how many of the 25 firms on said list, continue to exist to this day, 26 years later!

Do YOU realize there’re no fewer than FIVE ‘MHIndustry & LLLCommunity’ – related meetings vying for our participation, during six weeks this Fall (2013)? That’s right; the 22nd annual Networking Roundtable for land lease lifestyle community owners/operators leads off, 16 – 18 September, in the Chicago suburb of Bloomingdale; followed two weeks later by MHI’s annual meeting in San Diego; then the annual SECO (Southeast Community Owners) Symposium in GA; a leadership conference, hosted by MHI’s National Communities Council, in downtown Chicago in mid – October; and finally, the Urban Land Institute’s meeting (of the Manufactured Housing Communities Council) in early November, also in downtown Chicago. Whew? Can anyone out there afford the time and money, to patronize all five events? I sure can’t. Anyway; more details forthcoming, to help you plan your Fall travels.

And I’ve just gotta tell you. The hinted – at 3”X5” plastic cards describing the

• 5 – RPs of Marketing & Selling New Homes INTO a Land Lease Lifestyle Community!

• 5 – RPs for Marketing & Selling New & Resale Homes WITHIN a Land Lease Lifestyle Community!

• 5 – RPs for Marketing& Leasing Rental Homesites WITHIN a Land Lease Lifestyle Community!

Have been manufactured, delivered, and are ready for distribution to participants at this year’s 22nd annual Networking Roundtable, 18 – 20 September, at the Hilton/Chicago Indian Lakes Resort in Bloomingdale, IL. And not only that, we’re making good progress converting the widely used ‘Ah Ha! & Uh Oh! Worksheet’ (for estimating ‘risky’ &’affordable’ Price Points for new & resale homes in and outside LLLCommunities) into a handy, easy to use slide chart. If ready by September, this too will be distributed as a FREE training aid to every Roundtable participant!

***

George Allen, CPM & MHM
Consultant to the Factory – built Housing Industry,
The Land Lease Lifestyle Community Asset Class &
Affordable Housing Purists & Enthusiasts Nationwide
Box # 47024, Indianapolis, IN. 46247
(317) 346-7156

Blog # 242 Copyright 2013 14 April 2013

Perspective. ‘Land lease lifestyle communities, a.k.a. manufactured home communities
& earlier, ‘mobile home parks’, are the real estate component of manufactured housing.

I.

Neal Haney – IMHO, ‘Gets it Really Right!’

II.

Ned Beach Parses the ‘HUD/no HUD’ Issue

III.

Where to Find BOFUS in Vegas this week

IV.

Next Week: ‘New Era Dawns for LLLCommunity Owners’

***

I.

Neal Haney, IMHO, ‘Gets it Really Right!’

Manufactured Housing Communities of Arizona’s perennial president, Neal T. Haney (land lease lifestyle community fee – management company executive par excellence), writing in the March – April 2013 issue of Today & Tomorrow takes his readers on a reflective ride 12 years back into manufactured housing/land lease lifestyle community history, with a swift return to the changed present, and his hope for our collective future.

“I recently read an article that appeared in this newsletter 12 years ago. There were two main thoughts. One dealt with the changes taking place in our industry. And since that article, changes have indeed taken place. For example, many (home) manufacturers in business 12 years ago are gone. Those who remain have closed many of their facilities and have the lowest production levels in more than 30 years. LLLCommunities that enjoyed occupancy levels over 95% now struggle to keep occupancies at 80%. The government, both federal and state, continue to impose new regulations and additional costs detrimental to the MHIndustry. It’s been a tough 10 years.”

The other thought? “But the good news is things continue to change. LLLCommunities are more conscientious at providing facilities and services specific to their unique client base. By eliminating unneeded or unwanted facilities and services, operating costs are maintained at a lower level. Home manufacturers now recognize the number of vacant rental homesites needing to be filled. And they’re now working with community owners, to provide homes appropriate to smaller sites, and within a price range that allows us to truly refer to them as ‘affordable housing’.”

“At a national meeting five years ago, I heard a speaker sounding the death knell for our industry and asset class. I think instead, we are actually seeing a rebirth of the industry that’ll take us back to days when we were considered ‘a quality lifestyle at affordable prices’.” NH. (Moderately edited. GFA)

Lest you take Neal’s remarks lightly, know he’s been plying this trade for more than 30 years, as a successful entrepreneur businessman; and frankly, he’s one of but a very few of my ‘go to’ MHIndustry/LLLCommunity professionals in Arizona!

***

I.

Ned Beach Parses the ‘HUD/no HUD’ Issue

OK, I’m letting the ‘cat outa the bag a little here’, by introducing you to my long time correspondent, Ned Beach; retired – but – still – knowledgeable & articulate, regarding the HUD – Code manufactured housing industry.

As most blog floggers (readers) of this weekly posting know, I recently introduced the timely and heady topic: ‘What effect would it have on your business interests, model, etc., if HUD was soon and completely removed from federal regulatory oversight of the manufactured housing industry?’ This is not a casual, pipe – dream question! Frankly, it’s being asked of (home) manufacturing executives, suppliers, etc., across the U.S. by a team of interviewers. And here’s ‘the rub’. This question is being asked – and answered – with little to no aforethought, on the part of those being queried and answering. Indeed; at first blush, the ‘question & probable kneejerk answer’ appear a God – send, i.e. ‘Regulatory freedom after 37 years! Yea!’ BUT, is that really the case? Maybe not.

Remember last week’s blog posting on this topic? In it, a sober and reasoned response to said question was offered by Danny Ghorbani of the Manufactured Housing Association for Regulatory Reform or MHARR. He used the simile of a three – legged stool to make his point(s) there’re at least three interrelated reasons why HUD’s disappearance from its’ regulatory role, where manufactured housing is concerned, would be a very bad day for the industry. If you don’t recall why, suggest you reread the earlier blog posting, here at community-investor.com, to learn and understand the reasons.

In the meantime, Ned Beach, a retired manufactured housing executive, who’s long functioned as an informal sounding board for me; and other MHIndustry folk, recently sat back and gave this ‘HUD/no HUD’ issue some reasoned thought, tempered by long experience ‘in the business’. Here’re Ned’s thoughts on the subject:

“The effect(s) of closing the MH/HUD relationship today would be difficult; but would likely turn the fabrication of housing into something akin to what the NAHB has already accomplished relative to pre – fab, modular, and other (factory – built) specialty products. National codes would become the guidelines, to which manufactured housing would be built. For example, years ago, John Slater, an excellent engineer and working member of our industry, developed housing products meeting the ‘real’ building codes, able to be manufactured in plants, and transported to sites to be installed on pillar foundations. As we found out in the modular business, we didn’t need a national code to be able to meet the needs and requirements of towns, cities, counties, and states, in our chosen markets; we simply complied with them.”

“A downside to local code compliance, is not enjoying any, or at least as much, ‘experimental’ methodology, from which new, better and more economical processes, products and methods would or could be developed. This no different from dealing with the inflexible HUD ‘performance’ requirements. For those of us still in touch with the MHIndustry, we know a lumber shortage crisis is upon us. However, the local codes generally do not allow for much economical substitutes.”

“Could the MHIndustry survive and succeed without HUD oversight? Absolutely! But like many others ‘things’ about the leaders of our industry, ‘We don’t like change!’. So, could land lease lifestyle communities develop 30 year leases, with five year rent rate adjustment points, in order to be attractive to long term home financing? Yes. So can MHRetailers adjust and become builder/contractors, accepting responsibility for a new ‘land and home’ project, and derive income from the project at large? (Yes – but beware of repeating errors experienced at the turn of the century when MHRetailers attempted to compete head – to – head with site – builders). So can factories also learn to build to local building codes, homes that can be installed anywhere, and sized and designed for the need, especially where (functionally obsolete) rental homesites in land lease lifestyle communities are concerned. And the last question: Can we be competitive with other types of housing? Yes, if we work at it. And therein lies the show stopper: Do we want to survive and thrive as an industry; or continue to die on the vine, as we have been doing these past five plus years?” Relate that final question to the HUD/no HUD issue of the day!”

“Good post, George, got the juices a – flowing!” (Moderately edited. GFA)

***

III.

Where to Find BOFUS in Vegas this week

To date, more than a dozen of you have inquired as to how we might connect at the MHCongress in Las Vegas this coming week. While I arrive Tuesday afternoon, to attend no fewer than three corporate receptions and Lou Vela’s state dinner, BOFUS will be on the exhibit hall floor most of the day Wednesday – except for two formal ‘State of the MHIndustry & LLLCommunity Asset Class’ presentations I’ll be making, one mid – morning, and one mid – afternoon. And late Wednesday afternoon, two more gala receptions, and Security Mortgage’s ‘by invitation only ‘ special dinner soiree. Flying home early Thursday morning – with lots to write about in the next blog posting!

When we do hook up, probably mid – day Wednesday, before and after the annual Awards Luncheon, REMEMBER to ASK me FOR your TOAST! You’ll be glad you did.

So, what else is going on these days? Well, on 24 & 26 April, I’ll be in Chicago finalizing plans for the 22nd International Networking Roundtable at the Hilton/Chicago Indian Hills Resort, 18 – 20 September. Have you marked this on your planning calendar yet? If you’re a land lease lifestyle community owner/operator, you already know this is the single seminal annual event designed solely for your educational, interpersonal networking, deal – making needs! Themes this year? Two. Celebrating our collective legacy as land lease lifestyle community owners/operators, via special presentation by the staff from the RV/MH Heritage Foundation’s Hall of Fame, Museum & Library, in Elkhart, IN., and, 20 years of national advocacy thru the eyes of one of the 8/31/1993 founders and early chairman of the NCC division, Gary McDaniel. Also, in support of ‘selling & self – financing new & resale homes on – site’, we plan to have Community Home Series or CSH model homes on display again this year. IMPORTANT. To ensure YOU receive an ‘invite’ to this ‘by invitation only’ event for LLLCommunity owners/operators, phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or email: gfa7156@aol.com Why is this so important? We promote this event three ways: direct mail to all 500+/- portfolio owners/operators of LLLCommunities, to subscribers to the Allen Letter professional journal, and via names of previous year roundtable registrants. So, if you’re not on one or more of those three lists, you likely won’t receive an invitation to attend. So ‘call or write and let us know of your interest!’

29 & 30 April. As many as 20 land lease lifestyle community owners/operators will convene, in Davenport, Iowa, with Bill Carr of Rainmaker Associates, to spend time working together on this common interest: ‘Selling and self – financing new and resale manufactured homes on – site in this unique, income – producing property type’ – with an emphasis on mortgage financing and being in compliance with all state and federal regulations thereto pertaining. Hey; I’ll certainly be participating; how ‘bout YOU? For more information, contact Bill directly via (800) 336-0339.

***

IV.

Next Week: ‘New Era Dawns for LLLCommunity Owners’

Read all about it – if & when the timing is right. Next week? Maybe, maybe not. In any event, I appreciate your continued patience and support!

Interestingly however – and this has been pointed out repeatedly of late, by land lease lifestyle community owner/operator peers; the longer we await the inevitable dawning of a new era for our asset class; obvious clique nepotism and council inactivity effectively sunset the demoralizing ‘business as usual’ catharsis we’ve suffered these past few years.

***

George Allen, CPM & MHM
Box # 47024, Indianapolis, IN. 46247
(317) 346-7156

Blog # 240 Copyright 2013 7 April 2013

Perspective. ‘Land lease lifestyle communities, a.k.a. manufactured home communities & earlier, ‘mobile home parks’, are the real estate component of manufactured housing.’

Trends
Past, Present, & the Future of Manufactured Housing

I.

TRENDS PAST

Since shortly after the dawning of the new millennium (2000), annual new manufactured housing shipments plunged to historic lows of 50,000+/- per year, and have remained there for the past five years. Even the fabrication of modular homes (at times called ‘hudulars’) and Park Model RVs, have not moved the industry off this record – setting nadir. Hundreds of housing factories have closed and more than a thousand independent ‘street’ MHRetailers have disappeared from the manufactured housing business scene.

Furthermore, independent, third party chattel capital lenders appear to have also disappeared from the HUD – Code manufactured housing scene; but reality, it’s the paucity of qualified borrowers for those funds that cripples the industry. Just about the only bright spot, among these post cum present trends, has been the now routine selling and self – financing, and sometime leasing, of new and resale homes on – site within land lease lifestyle communities. But not all LLLCommunities; mainly those among the 500 property portfolios domiciled throughout the U.S. and Canada.

The foregoing is what we’re living with today, along with a myriad of additional, albeit other minor trends, like: smaller, less vibrant state manufactured housing associations; weaker, thinly staffed national advocacy bodies; and a near wholesale retreat from professional property management training and certification. Today; seeing a new HUD – Code manufactured home being transported down the highway enroute to its’ point of installation, is about as rare an occasion as seeing the circus come to town.

II.

TRENDS PRESENT

Favoring the Big over the Small (business entity), on one hand predates Past Trends identified in the previous paragraphs, but at the same time has become a heady Present Trend whose consequences have yet to be fully played out on the national scene. The following paragraph was penned by a blog flogger (reader) in response to a recent posting:

”Herein lies the problem – big fish want to get bigger and eat the small ones. Going separate (ways) can allow for good operators to survive, but I doubt the MHIndustry would be what it could be. I shared your, and my, trading of thoughts with a banker friend. Interestingly, he likened it to the BIG banks loving all the regulation, because it hurt us little folk to keep up. You’d think they’d hate it (regulation) as much as we, the little community bank guys, because they do not compete in the small world anyway, and the regs cost a bunch to survive and keep informed. Have you thought to separate out land lease lifestyle communities? Gotta bet the medium and small operators would follow.” NB

More and more, small to mid – sized land lease lifestyle community owners/operators are having to fend for themselves, no longer counting on any particular national entity to do so for them. This is evidenced by national task forces being recently formed to study key issues, e.g. home finance alternatives within the LLLCommunity asset class; and, how to best ensure – going forward – that LLLCommunity owners/operators nationwide continue to benefit from statistical Research and ongoing Resource servicing. And then there’re the regional symposiums, which have grown in popularity, during the past decade, as MHIndustry businessmen and women seek meaty seminar programs featuring useful substance, rather than just sales pitch pabulum and lesser fare.

Then there’s the Uniform Manufactured Housing Act, passed during mid – 2012, by the Uniform Law Commission. Some are already equating its’ recommendations to ‘Throwing the (affordable housing) baby out with the bathwater (vehicle titling of manufactured homes). To date, none of the proponents of this model regulatory legislation have bothered to consider the potentially dire consequences of replacing vehicular type titling of manufactured homes with some sort of quasi realty ownership document that large banks find attractive enough to encourage them to start lending on this housing type. Likely long term consequence? ‘Easier access to conventional home loans = loss of manufactured housing affordability through higher taxes!’

And finally, how would YOU answer this question: “What would be the effect on your niche in the manufactured housing business if HUD was/is relieved from regulatory oversight of this industry, for the first time in 37years?” Think about it? Interviewers are traveling the county today, asking that question of home manufacturing and LLLCommunity executives. Danny Ghorbani of the Manufactured Housing Association for Regulatory Reform, or MHARR, puts it this way:

The HUD federal program is a stable three – legged stool, comprised of three essential elements: 1) uniform, performance – based federal standards, 2) federal preemption relative to local building codes, and 3) uniform federal enforcement. Together, they ensure maintaining affordable manufactured housing; meeting the housing needs of lower and moderate – income American families; and ultimately, guide the success of the manufactured housing industry. Without any one of these elements, which only a federally – based program can provide, manufactured housing, as an affordable homeownership option for consumers, would soon die the death of a thousand cuts, as thousands of local housing jurisdictions would pile – on, with their own costly mandates and requirements.

Thus, lose this code and lose all uniformity, federal preemption, even building guidelines based on how a home should perform – all at the likely expense of product credibility, affordability, and universal acceptance! Are we, as an industry, ready for this? I don’t think so; but how many have really taken the time to think through the process and its’ logical consequences? Not many.

III.

TRENDS FUTURE

I’m not sure I’m up to taking on this challenge at this point in time. First off; the annual MHCongress is only a few weeks away, and there, some of us might learn of initiatives and tweaks affecting TRENDS FUTURE. Besides; have you read or heard of anyone else taking on the aforementioned PRESENT TRENDS of 1) adopting or not adopting the Uniform Manufactured Housing Act proposed by the Uniform Law Commission; or, for that matter, 2) even let us – out here amidst the grassroots of the HUD Code manufactured housing industry, know there’s a movement afoot to have HUD removed from regulatory oversight, where our industry is concerned? The answers to those two questions? NO & NO! Why? Ask them, not me.

The only thing I’ll pen about TRENDS FUTURE, has to do with industry and realty asset class representation on the national level. The Good News is MHARR & MHI are working together in three key areas, relative to securing additional private and public chattel capital sources. The not so good news, is institute members at large, some state MHAssociation executives, and small to mid – sized land lease lifestyle community owners/operators are frustrated at what’s perceived to be ‘marginal effectiveness’ in the national advocacy arena; the ill – advised wholesale change recommendations to the institute’s bylaws – and unintended consequences thereof (e.g. less dues revenue to states); and, nothing but ‘promises of action’, for two years now, from and to the LLLCommunity side of the house, even less to other post – manufacturing segments of the industry

Sure, there’s more I’m inclined to share with you on this topic. But the problem is; whenever I speak or write of practical solutions on the near horizon, or better ways to address what isn’t being accomplished now, some very territorial individuals immediately take issue with suggestions there’re better ways to achieve certain ends that the MHIndustry and LLLCommunity asset class have been missing or ignoring to date. No, I don’t feel like getting into an argument or discussion about the matter(s) just now; rather, as I’ve learned time and again, during the past 33 years as a successful entrepreneur businessman, I’ll wait and pick the right time and place to announce these new and rejuvenated opportunities to sell more homes and promote our unique lifestyle.

IV.

Bofus in Vegas!

Bofus can hardly wait to get there! Already we’ve been invited to two private dinners and no fewer than five late afternoon and early evening receptions. And, in my case, since my name and topic (‘How to Sell More Homes INTO and WITHIN Land Lease Lifestyle Communities!’) have been yanked from the MHCongress program schedule, I’ve lined up two ‘paid’ speaking engagements, one for a corporate board of directors and one for a firm’s employees in attendance at this event. So, along with visiting exhibits, attending a couple select seminar offerings, and engaging in that Vegas pastime, ‘people watching’, there’ll be plenty to do on the 16th, 17th, & 18th of April.

When you see me walking around the MHCongress, come up and ask me – or Bofus, for your Toast; you’ll be glad you did so.

***

George Allen, CPM®Emeritus, MHM®Master
Consultant to the Factory – built Housing Industry,
The Land Lease Lifestyle Community Asset Class &
Affordable Housing Purists & Enthusiasts Nationwide
Box # 47024, Indianapolis, IN. 46247
(317) 346-7156

Blog # 239 Copyright 2013 31 March 2013

Perspective. “Land lease lifestyle communities, a.k.a. manufactured home communities & earlier, ‘mobile home park’s, are the real estate component of manufactured housing.”

I.

If We Can’t Get the Job Done (i.e. ‘Restore Financing!’);
Someone, It Appears, Is Ready Now, to do it for (to) us!

II.

‘The New Normal! 50,000+/- New HUD – Code Homes Shipped Per Year! Really? Not Everyone Agrees….

III.

More about Bofus in Las Vegas

I.

If We Can’t Get the Job Done (i.e. Restore Financing!’);
Someone, It Appears, Is Ready Now, to do it for (to) us!

‘Those 21 Words are Likely a Bellwether of What’s in Store for the Manufactured Housing Industry & Land Lease Lifestyle Community Asset Class, if We Continue to Sit On Our Hands and Do Nothing Substantial….’

So, did you take my advice and get yourself a copy of CFED’s 2013 report titled: TOWARD A SUSTAINABLE AND RESPONSIBLE EXPANSION OF AFFORDABLE MORTGAGES FOR MANUFACTURED HOMES? I hope so, because the following paragraphs contain my ‘take’ on this 50 page document. And I’d like to hear yours….

First off; there were nearly no manufactured housing industry or land lease lifestyle community asset class ‘players’ (i.e. businessmen and women, lenders, trade association executives) involved in researching, compiling results, and agreeing on points put forth in this 50 page document. How can the Corporation for Enterprise Development, in good conscience, publish a report of this nature without input from the very folk who stand to be affected by its’ findings and recommendations? Only passing mention is made of ROC USA™ and its’ involvement, via the I’M HOME network, in this Ford Foundation – sponsored project.

Here are the questions this report endeavors to answer. Wherever the words ‘real estate – secured’ are inserted, know they were NOT in the report proper, but added by this blogger for clarification:

• To what extend and from what sources can low and moderate – income (LMI) household obtain MH single – family (real estate – secured) loans?

• How well do manufactured housing (real estate – secured) loans perform, and how does their performance compare with that of mortgage loans for site – built home? (Some readers, like me, opine the report preparers’ statistics gathering, compilation and reporting is questionable, i.e. not identifying and including defaulted loans in performance results)

• As there products or underwriting features that are correlated with more successful (real estate – secured) loan performance?

“The Project’s long – term goal is to expand access to and availability of, affordable (real estate – secured) financing to low – and moderate – income (‘LMI’) owners and buyers of manufactured homes…”

While eight ‘main findings’ are listed early in this report, a couple bear mentioning:

• “Manufactured home (real estate – secured) mortgage performance is comparable to general mortgage performance, and certain manufactured housing (real estate- secured) mortgage portfolios outperform comparable general mortgage portfolios.” That would be encouraging and helpful news, once we’re convinced the number and value of defaulted loans, occurring prior to compilation of statistics for this report, have indeed been included, and lead to this rosy conclusion.

• “Data shortcomings are widespread and a serious barrier to understanding the factors that contribute to loan performance….” Interestingly, none (OK, maybe one) of the independent, third party chattel capital lenders, approached to contribute loan performance data to this report did so. “The resulting dataset totals $1.7 billion in (real estate – secured) loan volume at origination.” What wasn’t researched was the more than $5 billion in chattel mortgages estimated, in the 24th ALLEN REPORT, to be held among 500+/- land lease lifestyle community portfolio owners/operators nationwide AND chattel mortgages, held by the aforementioned independent, third party lenders. Why not researched? In the case of LLLCommunity owners/operators, we simply weren’t asked; in the latter instance? Well, one wag has suggested, “Work in it (chattel lending) to make a high interest buck, until it changes to a new titling of the home.” OUCH! Do you suppose this could be true? I think not, but one now has to consider the matter when….

Like in CFED’s earlier report, REAL VALUE, REAL HOME, tucked away within the report, are these telling lines:

“A major recent development is expected to transform this picture (i.e. “:…allow home owners to convert the title on their manufactured home from personal property to real property….”). In July 2012, the Uniform Law Commission unanimously adopted a Uniform Manufactured Housing Act that would give all manufactured housing owners and buyers the option of titling their homes as real property.” Surprised? You shouldn’t be. This initiative has been in the works for the past several years; now is time to take the matter seriously. Of course, none of this is state law yet – except in New Hampshire.

The stated and desired consequence of title conversion? “The market for (real estate – secured) mortgages for manufactured homes can be expected to grow significantly with more homes titled as real property, and because of consistency across states, that is sought by lenders and investors, including secondary markets.”

Unintended consequences of this conversion? Significant increases in the taxes owners of manufactured housing will have to pay on their homes, particularly those sited on leased land, as in land lease lifestyle communities. While this might be a boon for local, county tax assessors, it could signal the end of LLLCommunties as we know them today, particularly those catering to folk in dire need of affordable housing! They’re no longer going to be able to afford to live in their LLLCommunity, and who will the property’s owners/operators attract to live there, if/when new real estate – secured property taxes take supplant the last affordable housing feature available to this citizenry?

And, it’s widely recognized there’s a dire shortage of affordable housing throughout the U.S. today; so the last thing we need now, is a new mechanism that only exacerbates that sorry situation.

*****

II.

‘the New Normal! 50,000+/- New HUD – Code Homes Shipped Per Year! Really? Not Everyone Agrees….

“The manufactured housing industry cannot survive very long if annual shipments (of new HUD – Code homes) remains below 100,000 per year for very long.” So says one of the most veteran (40 years) and respected (member, the RV/MH Hall of Fame) in the MHIndustry today.

Let’s begin with what I saw and didn’t see at last week’s MHShow in Tunica, Mississippi. And let me say right up front, this was the first time I’d attended that particular, as one attendee referred to it, ‘regional dealer show’ (i.e. a tad bit shy on the number of land lease lifestyle community owners/operators present). Here goes….

Ever been to The Tunica Show? I was pleasantly surprised to see no fewer than 70 new HUD – Code homes on display; clearly, more ‘affordable models’ than what was observed at the Louisville MHShow in January. And yes, there were some Community Series Homes or CSH Models present, but guess what, NOT a SINGLE ONE of them was labeled as such. Go figure….Tells me, these home manufacturers still haven’t learned, or maybe it’s simply ‘accepted the fact’, that land lease lifestyle community sales and sitings will be commonplace for the foreseeable future. And until they do, in this region and otherwise, it’ll be darn difficult to get off that 50,000+/- new HUD – Code homes shipped per year.

And then there were the more than 70 exhibitors displaying their wares and promoting their services. Saw quite a few vendors I hadn’t seen before at other MHShows, and that’s a good thing. The seminars? Ask someone other than me. Having such educational sessions, is certainly an improvement over ‘having none’, as was the case not many years ago; but maybe having nonstop daylong seminars two days in a row has swung the pendulum too far the other direction.

I was pleased to learn that CSL Lending (that’s short for ‘common sense lending’) is broadening its’ chattel finance market to include new homes sited within land lease lifestyle communities. There’re outa Marietta, GA. (205) 331-5700. Ask for Aaron Waters. And Randy Pyle, of Blevins, is already putting together a ‘Security Package for Land Lease Lifestyle Communities’ presentation for the 22nd annual Networking Roundtable in Chicago, IL., 18 – 20 September 2013. Then there was Joshua Dobbs. A young Marine, recently home from Afghanistan, who’s been hired by the rejuvenated Robert Sage Careers, to recruit candidates, and find placements for mid – level jobs within HUD – Code manufacturing plants and land lease lifestyle community property portfolios. Reach him via joshualeedobbs@gmail.com And finally, next time you’re in the Tunica area, make it a point to ‘eat where the locals eat’, at The Hollywood Café, ‘Home of the Fried Dill Pickle’. Technically, it’s located in Robinsonville, Mississippi, and is in a building constructed in the mid to late 1800s, and used mainly for a country store.

III.

More about Bofus in Las Vegas

‘So, how’s Bofus to find ways to improve business acumen? Meet privately with individuals who’re good listeners and have right and helpful ideas and solutions, based on individual effort, long experience, and passionate motivation. And barring that, know who to send Bofus to, to get such business knowledge’

For example, what’s it going to take nationally and regionally, to improve land lease lifestyle community Advocacy, statistical Research, and ongoing Resource distribution? Bofus surely would like to know the answer to that question.

For starters, meet privately with individuals who are already personally and corporately committed to serving the Advocacy, Research and Resource needs of LLLCommunity owners/operators nationwide. Only the first part of that will be found among the inner workings of one or another national trade entity, their recent ‘plans for great things’ notwithstanding. If Bofus isn’t already a direct, dues – paying member of one or another of those bodies, do so.

Where Research and Resources are concerned, a.k.a. Signature Series Resource Documents or SSRDs, monthly installments of same are already in place! If Bofus isn’t familiar with what follows, make it a point to meet with and learn from those who do such ‘resource research’, to wit:

• Annual ALLEN REPORT, a.k.a. ‘Who’s Who Among Land Lease Lifestyle Community Portfolio Owners/operators Throughout North America!’ Without this seminal report (24 to date), we’d have no idea who the portfolio ‘players’ are throughout the U.S. and Canada. And while only 20%, on the average, of the 500+/- known portfolio owners/operators are actually named each year, most of the 500 participate in the survey that makes up the ALLEN REPORT.

• Then, in February, there’s the annual Official State of the MHIndustry & LLLCommunity Asset Class, comprised of Census Bureau data and information gleaned from the aforementioned ALLEN REPORT research.

• National Registry of Real Estate Lenders and Brokers, including the only published list of independent, third party chattel lenders, is distributed every March. The 15th annual edition identified 18 of the largest realty – secured lenders. Next to the ALLEN REPORT, this is the most requested of all SSRDs.

• ‘Who Ya Gonna Call During 2013?!’ is the only published list of freelance management consultants serving the MHIndustry & LLLCommunity Asset Class. The 14th edition of this valuable resource contains 40 names and will be distributed with the April issue of the Allen Letter professional journal.

• Next we have the Official Directory of Manufactured Print and Online Resources, plus social networking guidelines. The fourth edition of this is being researched at this time.

• Official Lexicon or Glossary of MHIndustry & LLLCommunity Terminology is updated and published each year as a lagniappe to the aforementioned newsletter and as an appendix in every text penned about the industry and asset class.

• Property Management Training & Certification Programs, once each year, are identified, described, and recommended in a special SSRD.
1.
• The highly popular Industry Briefing Sheet is not an annual update, but rather is updated whenever deemed necessary throughout the year. It contains all the benchmark statistics pertinent to the MHIndustry and LLLCommunity asset class.

• The annual Trade Advocacy Body Directory is the one time each year, MHIndustry and LLLCommunity aficionados see clearly who is representing them, as businessmen and women, and how well
.
• Annual Summary of Networking Roundtable proceedings is penned and published during the month following the seminal event. What makes is particularly unique is that all two dozen presenters are identified by name, topic, and their contact information is included.

• The quietest update, if you will, is the annual update of the Official MHIndustry Paradigm Shifts Timeline. Here it’s easy to see and track the business trends of the past 50 or more years.

• Finally, there’s the annual MHInitiative® (formerly the National State of the Asset Class or NSAC caucus. In the past, these have been one day gatherings of MHIndustry and or LLLCommunity execs coming together to a particular end. This annual MHInitiative® Summary is as important a SSRD as any other.

Point? Bofus has no excuse, when patronizing this year’s MHCongress, not to come away wiser and better informed than when he/she arrived. Don’t hesitate to get my attention when we meet or pass one another at the show. I’ve been hired to make at least two formal presentations, i.e. ‘State of the MHIndustry & LLLCommunity Asset Class’, but that still gives me plenty of time on the show floor to talk with you, Bofus, and whoever else happens along….It’s also possible to obtain all the above SSRDs for FREE, as a paid subscriber to the Allen Letter professional journal via the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

******

George Allen, CPM®Emeritus, MHM®Master
Consultant to the Factory – built Housing Industry,
The Land Lease Lifestyle Community Asset Class &
Affordable Housing Purists & Enthusiasts Nationwide
Box # 47024, Indianapolis, IN. 46247
(317) 346-7156

Blog # 238 Copyright 2013 24 March 2013

Perspective. ‘Land lease lifestyle communities, a.k.a. manufactured home communities & earlier, ‘mobile home parks’, are the real estate component of manufactured housing.’

Is There a Pattern Here? First; Responses to Blog # 237, & then….
I.
Responses to ‘The New Normal = 50,000 new homes per year?’!
“Great blog! I think you are right on target; especially your comments on some of the big asset class entities. The public ones (REITs) are only in the game for the short term results. This mirrors most corporate strategy these last few years. I think you pointed out in prior blogs, that 85% of land lease lifestyle communities are owned by small owners. Were they long term investors, or the quick buck and disappear types, all too prevalent today? The real question, in my opinion, is how do we get back to the long term investor model and get rid of the fast buck guys? P.S. Thanks for letting me vent.” GS (Lightly edited. GFA)

Response from GFA: Here’s an example of why it’s important to be careful with generalities. Truth of the matter is, during the past two decades, there’ve been six land lease lifestyle community – focused real estate investment trusts or REITs. UMH Properties (formerly United Mobile Homes) has been around since the mid – 1980s and is ‘going strong’, acquiring more LLLCommunities during the past two years than at any other time in its’ 30+/- year history. ELS, Inc. (formerly MHC, Inc.), Sam Zell’s REIT, has been around since 1994, or nearly 20 years; same with Sun Communities, Inc. The only short – lived REITs were Chateau Communities, Inc. (from 1994 – 2002), American Landlease. Inc. (Now part of the Green Courte property portfolio) from 1998 – 2008; and, ARC, Inc., just 2004 & 2005. This information from the 24th annual ALLEN REPORT, a.k.a. ‘Who’s Who Among LLLCommunity Owners/operators Throughout North America!’. This seminal report is available FREE, with a paid subscription to the Allen Letter professional journal, via the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764
&

“Ah, those ‘(four) elephants in the room’ are controlling (our industry and destiny), not the consumer and home provider. We have lost what we had in 1969 – 72, George. The market, back then, determined the viability (of our housing product). Not gubment and not associations.” NB
Ah, but as an industry, we squandered that Golden Opportunity, when cheap imitations of mobile homes fell apart while being transported down highways, forcing the U.S. government to step in, when we couldn’t or wouldn’t police ourselves, ‘giving us’ the infamous HUD Code in 1974, implemented in 1976. But to our industry’s credit, during the next 20 years, we made that ‘lemon (of regulatory oversight) into lemonade (with increasingly homelike structures)’, and turned this pre – emptive, performance – based, Federal building code to our favor, until the turn of this century; when everyone in the MHBusiness today knows, ‘the rest of that sorry $ story.’

II.
‘Net Promoter Scores’ No More & ‘Dealers Be Damned!’
Remember the hype from a couple years ago, at the annual MHCongress and elsewhere, when something called NPS or Net Promoter Score was all the rage? I sure do. My first brush with the concept came as I visited a HUD – Code manufactured housing plant, and was given a copy of Fred Reichheld’s book, titled ULTIMAE QUESTION, ‘Driving Good Profits and True Growth’ – Introducing NPS (&) How leading firms transform ordinary customers into promoters. At the time, that book was required reading by all employees, from the top down. And I well remember being impressed, by the book content, as well as the corporate commitment to NPS on the part of this major home producer.
Next brush with NPS came with the knowledge at least one of the largest portfolio owners/operators of land lease lifestyle communities, had also bought into the Net Provider Score concept; hook, line and sinker. And for awhile I guess they did. But do you ever hear about NPS anymore? Only when a freelance management consultant wants to pitch it.
Just what is/was NPS all about? Well, here’s my take on the subject, after having read the book and observed, from afar, at least two large companies’ attempts to implement and sustain the NPS program.
• “Companies need to ask just one question – the Ultimate Question – in a regular systematic, and timely fashion.” P.x. Then, track and publicize the answers to that question, put the information to work right away. Therein lies the pat to true growth.

• What is the Ultimate Question? “How likely is it you would recommend the company t a friend or colleague?”

• Then, “Grouping customers into three clusters: promoters, passives, and detractors, provides a simple, intuitive scheme that accurately predicts (future) customer behavior.” P.30

• An apt goal: “We are in the business of selling an experience that delights our customers.” P.155
And I guess my Ultimate Question to the HUD – Code home manufacturer and land lease lifestyle community portfolio owner/operator aficionados of the Net Promoter Score, is: ‘Are YOU succeeding in providing an experience that is delighting your homebuying and site renting customers?’
So, where is NPS today? From all indications, ‘Dead in the water’. Why do I write that? Because the emails I receive from clients and associates dealing with these two, and other NPS aficionado firms; and, recently, asking key employees where ‘they’ thought the concept is/was on their firm’s corporate radar screen, so to speak.
For example, this direct quote from a recent email between a land lease lifestyle community portfolio owner/operator and an NPS – oriented(?) corporate executive: “I too regret my experience with your plant was unsatisfactory enough to cause me to look elsewhere for my next home (purchases).”Later in the same message, “I again commend you for building a very nice Community Series Home (Where I personally think our industry is headed). Just suggest you start considering LLLCommunity owners like (independent ‘street’) MHRetailers rather than wholesale buyers, recognizing ’we expect the home we buy to be the one we saw on display’; and furthermore, encourage greater quality control at your plants.” SR (Lightly edited. GFA)
Is this a universal let down, throughout the HUD – Code manufactured housing industry, or a one – off, maybe two – off happenstance? Frankly, I have no way of knowing for sure.
I had hoped to explore this matter at the upcoming MHCongress in Las Vegas, during an early morning session that was 1) ‘on’ in early October; 2) ‘off’ in January; 3) ‘on’ again, in February; and 4) ‘off’ again, earlier this month. Why? Well, that’s another story to tell sometime in the future, and it will be told.
In the meantime, however, this non – MHCongress seminar: ‘How to Market & Sell More Homes INTO and WITHIN Land Lease Lifestyle Communities?!’ will be one of the key themes at the 22nd annual Networking Roundtable scheduled 11 – 13 September at the Indian Lakes Hilton Resort in the suburbs of Chicago. If YOU have thoughts, suggestions, ideas on ‘marketing & selling homes INTO and WITHIN LLLCommunities, that’d enrich the learning experience this Fall, make it a point to talk to me about it during the MHShow in Tunica, Mississippi this week – a group of us will be lunching together at the Hollywood Café at 11:30AM on Wednesday, 27 March. OR, talk to me before the MHCongress! Want an ‘invite’ to the Networking Roundtable? Simply phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.
And hey, if you’re still a committed NPS fan, I’d like to know it! How are you using it throughout your firm; what have been the measurable results; how long have you been on the program? And what are your Lessons Learned? Write to me GFA c/o Box # 47024, Indianapolis, IN. 46247 or email: gfa7156@aol.com

III.
Bofus does Vegas!
a unique opportunity awaits Bofus at the MHCongress next month

You going to MHI’s MHCongress in Las Vegas in mid – April? If not yet registered, but would like to participate, phone (703) 558-0678, and tell’em ‘George sent me!’. As a related aside; watch to see whether MHI , in turn, actively promotes the 22nd Networking Roundtable in Chicago, scheduled for early September. In any event, read more about what awaits Bofus in Las Vegas.
Bofus have a lot to gain if ‘ones cards are played right’ in the MH exhibit area. You see, Bofus comes to this annual event with different agendas. For example:
• Business sucks and Bofus’s in search of ways to make it better, the sooner the better, or get out of it altogether!

• What’s it going to take nationally, regionally to improve Advocacy, Research & Resources – wise, where manufactured housing and land lease lifestyle community owners/operators are concerned? Bofus wants to know!
These are but two of Bofus concerns, and there are indeed additional ones….
So, how does Bofus address these legitimate concerns? If you’ve read this closely, you already know the answer; if not, well, read next week’s blog posting for more hints and details….
IV.
TOWARD A SUSTAINABLE AND RESPONSIBLE EXPANSION OF AFFORDABLE MORTGAGES FOR MANUFACTURED HOMES
If you’re a LinkedIn fan, or regular commentator, you likely came across a lively discussion on the 2013, 50 page study just released by CFED (Corporation for Enterprise Development) with the above 12 words as its’ title.
I’ll review this interesting piece of work in next week’s blog posting (#239). A hint. The conclusion suggested by the study’s title is not nearly as rosy as it reads. How so? Another hint. The study, per se, is all about realty – secured home mortgages, very little is said/written about chattel (personal property) capital sources and loan performance. But a ‘way’ is suggested that, if enacted, will change the HUD – Code manufactured housing industry forever, and likely destroy the land lease lifestyle community income – producing property type as we know it today.
Can’t wait? Then google CFED and ask for access to the 2013 study with the above title.
***
George Allen, CPM®Emeritus, MHM®Master
Consultant to the Factory – built Housing Industry,
The Land Lease Lifestyle Community Asset Class &
Affordable Housing Purists & Enthusiasts Nationwide
Box # 47024, Indianapolis, IN. 46247 (317) 346-7156