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

MHARR Sez; YOU Say; &, How to Access 500+ Landlease Community Portfolio Owners by U.S. Mail!

Dawning of a New (MHI post – production) Era? Might well be! Read on….

Your (Networking Roundtable) Topics of Choice? Make it Your Program!

How to Access 500 Landlease Community Portfolio Owners by Direct Mail

FOREWORD

This blog posting was supposed to be about treating prospective and actual (HUD Code) homebuyers fairly and with respect. Planned to begin it, by citing one of Five Action Areas agreed upon by 100 landlease community owners/operators during the 1st National State of the Asset Class (‘NSAC’) caucus, 27 February 2008, in Tampa, FL., to wit:

“A Value Proposition. Ensuring fair interplay of housing product pricing, financing (terms) and value, along with right site rental rate, and more….”

Then, segue to Randy Rowe’s ‘Five Part Market Share Recovery Plan for the Manufactured Housing Industry & the Landlease Community Real Estate Asset Class’, delivered at 19th annual International Networking Roundtable in Phoenix, AZ., September 2010, where he challenged nearly 200 participants, in part, to:

‘Ensure on – site sale and financing of new and resale homes, within landlease communities, is in sync with site – built housing offerings, and apartment rental rates, in the same local housing market.’

Then spend the remainder of the blog, challenging businessmen and women in the MHBusiness to make these 2008 & 2010 challenges REALITY during 2012, by….

Well, that’s ‘the rest of the story’ that awaits a future blog posting; to describe, in what will likely be ‘troubling detail’ to some – if not many, reading it, ‘How to Effect a True Value Proposition for Our Prospective and Actual HUD Code homebuyers & owners!’

Instead, we divert our collective attention to a necessary & timely detour into MHPolitic.

I.

Dawning of a New (MHI post – production) Era?

“As the troubles of the HUD Code industry, in Washington, D.C., continue and deepen, it’s become increasingly apparent, the industry’s post – production sector (i.e. independent MHRetailers; LLCommunity owners; home installers, lenders & insurers) hold The Key to altering the status quo, and arming the industry with a strong, aggressive, focused, and effective (new or altered) national representation, based on a common front comprised of independent, POST – PRODUCTION and PRODUCTION national (advocacy) associations.” (Lightly edited for effect. GFA)

So begins Danny Ghorbani’s column ‘MHARR Viewpoint’, in the January 2012 issue of The Journal. Then follows, a detailed, though sometimes flawed recitation of semi – historic events, miscues, and industry issues the writer believes has brought his readers to this pivotal point in manufactured housing industry history. But, as one considered and insightful response, from a Post – Production businessman, counters…

“His (Danny’s) comments about preventing the ramifications of the S.A.F.E. Act and Dodd – Frank are absurd. Between thee and me, the MHIndustry ‘perfected’ mortgage fraud long before the ‘suits’ on Wall Street figured it out!* The retailer business model of ‘capturing customers’ and doing everything they could to discourage ‘shopping around, forced retailers to also act as loan originators.” (* By eight years, some say!)

On the other hand, one particular paragraph in Ghorbani’s lengthy diatribe cum
‘industry turnaround plan’, is in this veteran industry observer’s opinion, ‘right on the mark’, and might well in time, (Now?) be prophetic! Here it is…

“Given the manufactured housing industry lies between the site – built housing and recreational vehicle (‘RV’) industries, and manufactured housing (is) a federally – regulated industry (requiring) effective national representation for its’ two fundamental sectors, it’s a mystery why the HUD Code industry has not adopted the same type national representation structure as those two industries. That structure…is comprised of independent national production and post – production associations for both site – builders (i.e. National Association of Home Builders & National Association of Realtors) and the RV industry (i.e. Recreational Vehicle Industry Association & Recreational Vehicle Dealers Association). The same type functional structure, with two independent national (advocacy) associations, would work far better for the HUD Code industry than the current dysfunctional arrangement. (Furthermore) under such a structure, the two national (advocacy) associations could/would work cooperatively on ‘national issues of joint interest’ through a coordinating council comprised of three or four members selected by each body.” (Again, lightly edited for effect and clarity. GFA)

So, where do matters go from here? In large part, that depends on what some or many of the 500+ MHIndustry executives and LLCommunity owners/operators, who read this blog each week, decide is best for their individual and collective business futures, defined in terms of ‘survival’ or ‘success’. To that end, in last week’s blog posting, I encouraged the 150+ businessmen and women, who’d already committed to join me for the national MHInitiative® (nee NSAC caucus # 3) gathering on 2/27/2012; to instead, support MHI and its’ NCC division, with their participation in that advocacy body’s annual legislative conference in Washington, DC., @ 26 – 28 February 2012. Bottom line measure there and then? Will ‘How to Save Our Industry?!’ be on MHI’s meeting agenda during that time frame, at said conference? You will only know if you attend. And if it’s not? Well, such an obvious omission, will send a clear message to all. For MHI conference information, phone (703) 558-0678 and ask for Lisa Brechtel.

As far as The Journal’s columnist is concerned, here’s how he concludes what will likely be viewed, in time, as one of the most pivotal pieces of trade journalism in the nigh 70 year (to date) history of HUD Code manufactured housing Production, and Post – Production segments:

“…a journey of a thousand miles begins with one step. The question is whether the post – production sector can overcome its’ attachment to a familiar but unacceptable status quo, and take that difficult but essential first step in a new, better and much – needed direction.” (No editing needed here. GFA)

What say you? I’ll look to seeing you at the MHI/NCC meeting in Washington, DC. (actually Arlington, VA), 26 – 28 February 2012, and you can tell me then – or beforehand, even afterwards.

***

Your (Networking Roundtable) Topics of Choice for this year’s event?

Now here’s a unique, first – time – in – this – blog opportunity for you. Every year, for the past 20 years, landlease community owners/operators, from sole proprietors to REIT executives have gathered for an annual International Networking Roundtable, usually at a resort in CA, AZ, FL, IL, TX, or CT. Well, this Fall, 12 – 14 September, we’ll be in San Diego, CA. And this is where you come in…

Every year at this time, I start putting together an agenda containing two dozen timely, often cutting edge topics, that relate to the LLCommunity real estate asset class, along with identifying the ‘best presenters’ for each of the selected agenda topics. While I already have nearly a dozen such subjects in mind this time around (e.g. Subcontracting Home Remodeling or Do It Yourself?), I’m OPEN to additional ideas for timely and interesting topics, along with speaker recommendations and their respective contact information.

So, have some topics in mind, and maybe some presenters? Reach me via mail: GFA c/o Box # 47024, Indpls, IN. 46247 or via MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764, and via email: gfa7156@aol.com As they say, ‘the more the merrier!’ And hey, it’s OK to recommend yourself, if you’ve got something worthwhile to share with LLCommunity owners/operators from throughout North America. Want an ‘invite’ to attend the 21st annual Roundtable this Fall? Contact me with your request to attend as a landlease community owner/operator or event sponsor.

***

How to Access 500 Landlease Community Portfolio Owners by Direct Mail!

Let’s start with the basics. Given there’re approximately 50,000 LLCommunities throughout the U.S., and 85 percent are properties with 100 and fewer rental homesites apiece; leaving 15 percent, by and large, integral to 500+/- property portfolios; where according to the 23rd annual ALLEN REPORT, the average portfolio contains 27 LLCommunities, with an average property size is 219 rental homesites.

Now, with that said, if you’re a lender – either chattel or realty – secured, an insurance agency, someone wanting to build a LLCommunity portfolio, or even wanting to divest some properties, this is the ONLY comprehensive direct mail method to contact these folk. Seriously. There’s lots of ‘lists’ out and about, but many if not most, are comprised of contacts gleaned from Yellow Page telephone directories around the U.S. Not this one! For the past 30 years I’ve made it a point to identify all sole proprietors, partnerships, corporations, and REITs who own and or fee manage a minimum of five LLCommunities and or 500+ rental homesites. Today there are 500+/- such ‘players’.

PMN Publishing exercises this exclusive and highly confidential list monthly, to research stats for the aforementioned annual ALLEN REPORT, introduce portfolio owners/operators to new products and services, as well as enhance the marketing of landlease communities ‘for sale’, etc. All addressees are decision – makers, relative to their properties; and the list is 99% accurate, as all outgoing direct mail pieces are sent first class.

Would YOU like to access this unique direct mail marketing opportunity? It’s simple, though a telephone call to the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 beforehand is advisable. In essence, prepare 600 pieces of direct mail, with the 600 envelopes ‘stuffed, sealed, and stamped – using first class stamps only, NO metering’. Then UPS the 600 piece ‘mailing’ to PMN Publishing c/o 170 E. Commerce Dr., Franklin, IN. 46131., with a corporate check, in the amount of $1,000.00 (access fee), made out to GFA Management, Inc.. Why 600 pieces? Because we automatically include another 100 ‘players’ who haven’t quite eclipsed the aforementioned ‘cutting score’ of five properties and or 500 rental sites.

Success rate? Depends on what you’re selling – or attempting to buy, and how well you communicate with the landlease community recipients of your direct mail piece. We’ve heard of responses as low as 5 percent, but many as high as 20 percent. In both instances, that’s higher than the national average for direct mail campaigns.

***

George Allen, CPM®Emeritus, MHM® Master
Consultant to the Factory – built Housing Industry &
The Landlease Community Real Estate Asset Class
Box # 47024, Indianapolis, IN. 46247

So, What’s Happened this past Week?

Gist of the 2012 Louisville MHShow, inside & mostly outside it…

I.

Outside the MHShow…

Still NO reply to ‘the 12/29/2011 letter of inquiry’ to MHARR & MHI chairmen! See copy attached to BEBA (Blast Email Blog Alert) announcing this blog posting. Are you, like me, experiencing that ‘growing up in a mushroom farm feeling’ of being kept in the dark as we await a new load of compost – and worse, to be dumped on us?

National Summit (of independent ‘street’ MHRetailers & in – LLCommunity salescenter operators) planners and aficionados met for 2 ½ hours at the Crown Plaza Hotel outside the Louisville MHShow Exhibit Hall, discussing how to enhance working relationship(s) between these key segments of the MHIndustry. Result? In my view, the eventual solution will have to address two mutually exclusive perspectives: 1) landlease community owners/operators sorely need freelance new home marketing and sales consultants NOT heretofore tainted, and still enamored, with a flawed HUD Code manufactured housing fabrication & distribution business model, i.e. build and ship per home manufacturer’s choice, not per customer’s needs or wants, and counting of ‘shipments’ rather than ‘homes sold’. AND, 2) independent ‘street’ MHRetailers are encouraged, once again, to market, sell, finance, and site new and resale manufactured homes into small to mid – sized landlease communities throughout the U.S. – even learning, once again, to buy and operate some of these unique, income – producing properties themselves! Want to participate in this unfolding business model enlightenment and redirection? Contact Chad Carr @ (800) 336-0339.

Upcoming FOCUS Group, 1/26 & 27/2012, in Tampa, Florida, likely to draw largest group of landlease community owners in 20 years! Maximum attendance cap has been surpassed, as property owners from 15 states have committed to participate; and interestingly, all but three property owners are younger than 50 years of age, and slightly more than half are second generation ‘players’! And you should see their agenda….

23rd annual ALLEN REPORT is now in circulation, as it was mailed this past week as a lagniappe (‘freebie’), enclosed with the January 2012 issue of the Allen Letter professional journal. Chock full of interesting and useful asset class statistics, trends, and nearly 20 new portfolio owners/operators added to this year’s rankings. To subscribe to the newsletter, phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. The ALLEN REPORT will eventually be available for purchase as a separate document, but not for awhile. Many Thanks to those of you who donated to underwrite most of the cost of this year’s seminal LLCommunity report.

MHInitiative®? ‘Everyone deserves another chance!’ That’s the rationale for postponing the popular national call to, once and for all, discuss and plan ‘How to Save Our Industry?!’ on 2/27/2012. More than 125 of you (out of 500) reading this blog, had already committed, 1 ½ months early, to support the MHInitiative® (nee National State of the Asset Class or NSAC caucuses: 1/27/2008 & 1/27/2009) with your participation in said brainstorming and networking session, likely in Florida. For that commitment, I’m very grateful! And despite the aforementioned ‘stonewalling’, by MHARR & MHI elected leaders, we ALL should attend the Manufactured Housing Institute’s legislative meeting in Washington, DC., (also) scheduled for 26 – 28 February 2012. Furthermore, if you own/operate one or more landlease (nee manufactured home) communities, plan to attend the National Communities Council (‘NCC’) division meeting between 2:30 & 4PM, the afternoon of 27 February. I certainly plan to be there. Let’s listen to what our elected leaders have in mind relative to ‘How to Save Our Industry?!’ Depending on what we hear, we’ll know what to do going forward. To register, phone Lisa Brechtel @ (703) 558-0666.

Manufactured Housing Manager® Class of January 2012 was a complete success! More than half the landlease community owners/operators present, were from Ohio. The rest from GA, MO, & KY, with two special guests from CA and OH; in one case, a possible ‘instructor in training’ for future MHM® classes. This graduating class of MHM®s brings us a step closer to having 1,000 certified property managers owning/operating LLCommunities throughout the U.S. and Canada. Interested in facilitating this professional property management training and certification program at your company or state association? Phone (317) 346-7156. Only costs $250.00 per MHM

January Contest. Many state MHAssociation execs received the following email message this past week: “We want to know YOUR top 3 ways to keep your park full of tenants. We know some people struggle with keeping their parks full, so we would like to hear your tips. If you have a full park, tell us how you keep it that way. If you win (the January Contest) you’ll receive a custom mobile home park T-shirt from Frank & Dave’s Trailer Wear department.” Is this for real? Assuming so, and taking aim at the use of defunct trade lingo, I responded with this short satire: ‘Top three ways to keep a ‘park full of tenants’? Let’s see. Using your lingo, that could mean anything from an RV park to a city park. If the latter, and located near a major city, invite members of the Occupy Protest Movement to move into the park, and require them to pay for the privilege; OR, if an RV park…depends on whether a transient or destination park; and, when you think a tenant become a resident. OH, I get it, you’re talking about where trailers park. Like along an interstate highway, where there’re rest areas for tractors and their trailers.’ GFA

II.

Inside the MHShow

Fleetwood Homes exhibit enjoyed a steady stream of homebuying landlease community customers interested in the firm’s line of Community Series Home or CSH models! During the book signing session Wednesday afternoon, I autographed and gave away nearly 100 copies of Landlease Communities, Manufactured Home Communities, Mobile Home Parks, trailer Courts & Camps, and Affordable Housing. Do YOU have a copy yet? Available for only $24.95 (including shipping and handling) by phoning the aforementioned MHIndustry HOTLINE. And, if you’re unfamiliar with the CSH line of homes, or want to buy one or more to fill vacant rental homesites in your landlease community(ies), phone Fleetwood’s Business Development Manager (‘BDM’) Steve Quick at (615) 202-0245. You know, the ‘sad thing’ about this? Fleetwood Homes, to date, seems to be one of the few, if not only HUD Code home manufacturer taking the landlease community owner/operator ‘new home’ market seriously. There certainly were precious few of them on display at this MHShow. Talk about ‘missed opportunities’. No wonder, as an industry, we’re only shipping 50,000 new homes per year! It’s commonly believed filling 250,000 vacant rental homesites, nationwide, in 50,000+/- landlease communities, is the market of the immediate and foreseeable future. When will the rest of the HUD Code home manufacturers finally Get On Board!?

A cute but inspiring story. While at the Louisville MHShow, you likely saw Landon and his brother Hunter, two pre – teen boys, ‘walking the home exhibits with their parents’. I was told each owns a manufactured home – as an investment, in their individual self – directed IRA. Well, they do; and they’re downright serious about their housing investments; serious enough, that each young man carries his own business card. Hunter’s identifies him as an Investment Manager; Landon’s describes him as a Portfolio Manager. Their Mission Statement? ‘We Buy, Sell & Lease Properties!’ As my old college professor, Dr. Grigolia, used to say, ‘Now how bout them apples?’

A special meeting with one of the Big Four + 1 chattel lenders. Have you participated in a meeting where you truly felt history was being made? My first such epiphany occurred on 8/31/1993, when 19 of us convened in Indianapolis, IN., to form the Industry Steering Committee (ISC’) predecessor to MHI’s present day National Communities Council division. Well a similar feeling prevailed during a meeting inside the exhibit hall at this year’s MHShow in ‘Luavul’. Wednesday afternoon, Spencer Roane from Pentagon Properties, and Dr. David Funk from Capstone Investments, and yours truly, sat down executives from one of our industry’s august chattel lenders. Purpose of said meeting? To learn about and critique a new, common sense $$$ program, not yet named, designed to enable small to mid – sized landlease community owners to sell and self – finance more new manufactured homes on – site in their properties! Details aren’t available for this week’s blog posting, as changes pursuant to our meeting are now being made. So, keep reading here for more information as it’s released. Only hint being that it has the potential of being a WIN, WIN, WIN, WIN proposition for all four parties involved! Remind you of another chattel initiative you’ve read about of late, with four key participants: a HUD Code home manufacturer; an independent third party chattel lender; pre – qualified landlease community owners/operators; and prospective, qualified homebuyer/rental homesite lessees interested a new home – where price and down payment make sense; loan terms are fair and reasonable; and, rental homesite rent is in sync with other multifamily rental properties in the same local housing market, and ‘package price’ is less than what it takes to acquire a home owned fee simple there as well!

There’s more that could be covered here, but these have been some of the more important highlights. For example; do you really want to read of a new lender’s proposal to offer 30 year chattel mortgages, when only a decade ago, many a homeowner realized, after 20 years of making house payments, they owed more money on their home than it was worth – so often walked away from it. Surely we don’t want to repeat this sad history again, as we’re on the cusp of finally deciding ‘How to Save Our Industry?!’

***

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

Stimulus Spur Response to date? NO, but look what’s coming…

At this writing (8 January 2012), it’s been 2 ½ weeks since identical Letters of Inquiry were mailed to the elected respective chairmen of the Manufactured Housing Association for Regulatory Reform (‘MHARR’) & Manufactured Housing Institute (‘MHI’), our two national MHAdvocacy bodies, domiciled in or near the nation’s capitol. So far, NO response of any kind from either executive! But that’s OK for now. Why? Look what’s scheduled to occur during the Louisville MHShow in Kentucky, 11 – 13 January 2012, that has little to do with the actions (Inactions?) of both bodies:

• Visit and buy a Community Series Home, a.k.a. CSH model, showcased by Fleetwood Homes! The firm is hosting a Special Guest appearance & book – signing @ 2 to 4PM, 11 January 2011 at their Louisville MHShow exhibit. Also meet your Business Development Manager (‘BDM’) Steve Quick! (615) 202-0245. Additional CSH homes on display at the Louisville MHShow? If not, ask exhibiting HUD Code manufacturer, ‘Why not showcase more CSH homes?’!

• Nearly sold – out Manufactured Housing Manager®, a.k.a. MHM®, property management training & certification class, all day 12 January at the Comfort Inn on Phillips Lane. Only $250.00 per person. Today, nearly 1,000 MHMs® own and manage landlease communities throughout the U.S. & Canada! To sign – up, phone (317) 346-7156. Landlease Community Management is classroom text.

• Joe Stegmayer, MHI’s elected chairman, to address show attendees at 11AM on Thursday, 12 January 2012. I can’t be present, as I’ll be teaching the MHM class; but would ask him publicly, 1) ‘Why no response to my letter of inquiry?’ AND, 2) ‘What plans, if any, will MHI present, at their 2/27/2012 annual legislative meeting in Washington, DC, regarding ‘How to Save Our Industry?!’ As is often said, ‘Inquiring minds really want to know!’ Do YOU? If so, then ASK!

• A special meeting by ONE of the ‘Big Four + 1’ independent third party chattel lending sources, to plan am aggressive national marketing strategy for three existing, and an exciting new, capital lending programs – designed specifically for landlease community owners/operators! This new program likely one of the ‘proverbial lights at the end of our 12 year long shipment nadir tunnel’. It’s no accident, features of the program mirror a generic $$$ model to be discussed at…

• Yet another meeting, to refine and plan the debut of the new Four Participant $$$ Business Model, for manufactured housing chattel financing, involving: 1) HUD Code home manufacturers, 2) one or more independent third party chattel lenders, 3) single property and small portfolio owners of landlease communities, and – for the first time in manufactured housing history – 4) would be home (buyers) owners/site lessees, worthy of ‘affordable home value propositions’ (i.e. Right & fair mix of home price, loan terms and site rent rate!) from the first three participants in the new $$$ business model! This could be the ‘game changer’ we’ve been awaiting, to regain market share, measured by new home sales cum shipments. Interested in participating? More than two dozen blog floggers (readers) are already on board! For information, read January issue of the Allen Letter professional journal, where this new business model is profiled. This issue also contains the widely – referenced (23rd annual) ALLEN REPORT, a.k.a. ‘’Who’s Who Among Landlease community Owners/operators Throughout North America!’. Phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 to subscribe @ only $134.95/year (12 monthly issues). Credit card orders welcome. Did YOU know? The Allen Letter professional journal is the sole remaining print trade publication covering what’s ‘really happening’ throughout the manufactured housing industry & landlease community real estate asset class!

• Meet Dennis Duling, of Legiance Investments, at their exhibitor’s booth in ‘Luavul’. This is the ‘new firm on the MHScene’, that upon surrender of title to an abandoned home on – site in a landlease community, will rehab it to your satisfaction – at their expense (using monies obtained from their investors), then lease – option it to a qualified occupant, per your pre – approval. From that point forward, they retain the lease – option payments each month and pay you site rent; or, if you prefer, you collect the monies and send them their residual. All negotiable. Interested in learning more? (626) 653-2728. This is not an endorsement of Legiance’s business model; just letting YOU know of it! GFA

• A White Paper (Recall independent ‘street’ MHRetailers & in – landlease community sales center operators National Summit) planning session Friday morning, to take this new partnership to the next level of implementation. If YOU want to input, and maybe participate, contact Chad Carr @ (800) 336-0339 ASAP

• Private meeting of MHInitiative® supporters, relative to possible 2/27/2012 working session in Florida, to plan ‘How to Save Our Industry!?’; OR, an alternative plan of action for the time being. To input, phone aforementioned MHIndustry HOTLINE or email: gfa7156@aol.com Frankly, if MHInitiative® – or some other significant MHARR/MHI ‘leadership initiative’ doesn’t occur this year; in my opinion, there’s little chance the MHIndustry will survive, as we know it today, the previous ‘$$$ planning meeting’ announcements contained herein, notwithstanding.

• And finally, at this writing, there’re rumors of a veteran MHIndustry executive (Not me!) meeting privately, with like – minded individuals, to formulate plans for the creation of a viable secondary market for HUD Code manufactured homes. Interested in being part of this? Let me know via aforementioned MHIndustry HOTLINE. I’ll pass your contact information onto that individual. This is a gutsy and much needed move, that should have been effected ‘years ago’; and now, is an integral part of What Must Be Done for the MHIndustry to survive, let alone regain its’ rightful ‘affordable housing’ market share in the U.S.

WOW! How can you afford not to be present at this year’s Louisville MHShow? There’ll be more than 27 new HUD Code, modular, and ‘park model RV’ homes on display, along with more than 78 product and service exhibitors! Registered yet? No ‘prob’. You can do that, for FREE, right at the Kentucky Fair Grounds Exhibit Hall, during the show (Begins @ 9AM, 11 January); or phone (717) 587-3350, and tell Dennis Hill, ‘George Allen told me to call!’

And while you’re in ‘Luavul’ for the MHShow, look me up (except on January 12th, when I’ll be teaching the MHM® certification class) and say ‘Hi!’ And for those who pick up a ‘print copy’ of this blog posting, at the Lousiville MHShow, who’d like to have your name added to our BEBA (Blast Email Blog Alert) list, emailed each Sunday bearing future postings of this nature, let me know by phone or otherwise! Or go to the web site: community-investor.com, and left click on the BLOG prompt shown there.

This weekly blog posting, as you know, has become Much More than an information source and rallying point, for 500 + MHIndustry senior executives and LLCommunity owners/operators. It’s become the weekly business barometer of all things MH & LLCommunity! So, continue to send your input re matters presented here, along with ‘new news’ you believe I need to know and report. In the meantime, here’s wishing you and yours, a Happy and Prosperous New Year 2012! And don’t forget, the 23rd annual ALLEN REPORT is now available FREE to Allen Letter professional journal subscribers! GFA

***

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

2012. A Year of New Beginnings? Let’s Plan It So…

I.

Manufactured Housing Wisdom Honed by Experience

The following vignette (‘a short literary essay’) was penned at my request, by a 40 year successful business owner veteran of the manufactured housing industry and landlease community real estate asset class. I requested it for my education and your enlightenment. It deserves as broad circulation, among our peers, as we can give it. And while I have permission to disclose the author’s identity, have decided the message contained herein, is best delivered, and stands well, on its’ innate wisdom and timeliness, sans his personality and reputation. GFA

“There is no (chattel, personal property) financing today because the (independent third party) lenders can not make any money. I think the reason they can not make any money is generally misunderstood.

It is not, for the most part, bad underwriting, or less than honest ‘dealers’. It is because we have a bad business model. We say we are in the housing industry, but we have always treated it like a car sales lot. And the new car lot model worked fairly well, because the ‘dealer’ made a market in selling new homes. But the used car lot model did not work so well, because the ‘dealer’ did not make a market for used homes.

People were supposed to live in these homes forever; or if not, they were supposed to bring them back to the dealer and trade them in for a new model. Heaven forbid if they wanted to live in another area, or buy a stick – built house, because the dealer did not make a market for the sale of a ‘used home’. And, guess what? If a real estate agent wanted to sell the home, many landlease community owners would run them off. Who was left to make a market for the resale of our homes? No one. How could we be so stupid. And yet today, I still do not hear anyone talking about the importance of having a secondary market for our homes, or the bad effect it has had on the value of our home, or the effect it has on repossessions.

I once asked a Realtor® friend of mine. “Why do we have more repossessions than you have in your business?” He was shocked I did not know the answer. He told me a stick – built house, properly priced, in an average neighborhood, in normal economic conditions and listed with a Realtor®, was sold for cash within ninety days. A foreclosure takes 120 – 180 days. Thus, most troubled owners’ homes are sold before they become foreclosures. How much would our repossessions decrease if we had a similar marketplace? How much would the value of our homes increase with a similar marketplace? What would be the likelihood of attracting lenders?”

Preceding paragraphs lightly edited for effect and to improve readability. GFA

***

II.

Getting Ready for MHInitiative® in 2012

This blog column has purposely been quiet during the past several weeks, on the subject of whether there’ll be an MHInitiative® national gathering of manufactured housing and landlease community businessmen and women on 27 February 2012. And at this writing, a final decision has yet to be made. But it is appropriate, even necessary, to let the more than 500 MHIndustry & LLCommunity business owners and managers, who receive this weekly blog posting, know the status of this important matter.

To begin with, and as review for those unfamiliar with the MHInitiative®, here’s what it’s about….

The proword and concept replaces and succeeds the well known and popular National State of the Asset Class (‘NSAC’) caucuses held 2/27/2008 in FL. and 2/27/2009 in IN.

In the first instance, 100+/- landlease community owners/operators, from throughout the U.S., gathered in the clubhouse at FountainView, in Tampa, FL. By the end of the first NSAC caucus, owners/operators present agreed on Five Action Areas to guide their business future during years ahead – and these principles continue in effect to this day, five years later! For a detailed description of the Five Action Areas, read Landlease Communities, Manufactured Home Communities, Mobile Home Parks, Trailer Courts & Camps, and Affordable Housing, available from PMN Publishing.*1

In the next instance, 100+/- HUD Code home manufacturers and landlease community owners/operators gathered at the RV/MH Heritage Foundation’s Hall of Fame, Museum & Library facility in Elkhart, IN. At that venue, executives from those segments of the manufactured housing industry endeavored to answer this question: ‘How to Sell More Homes into Landlease Communities Nationwide?’ Answers? Agreement on the need for a new line of homes for community in – fill, i.e. the Community Series Home or CSH (replacing behemoth Developer Series Home of the late 1990s); and, to market them via a new job title/description, the Business Development Manager or BDM.*2

Why no NSAC caucus in 2010 and 2011? Several apt reasons.

• First, NSAC caucuses were not planned and facilitated to supplant any routinely scheduled MHIndustry or LLCommunity national event. In fact, the executive vice president of the Manufactured Housing Institute was present at each caucus, lending support to the different foci at each of the two national gatherings.

• Second; it was hoped, early on, elected and salaried leaders of the industry and asset class’ national advocacy organizations would ‘read the handwriting on the wall’, and assume leadership role in like manner during 2010 and 2011. As everyone ‘in the MHBusiness’ now knows, that certainly didn’t happen!

• Third; and please excuse the personal nature of this reason: I decided in 2010 to begin ‘retiring’ from active involvement in MHIndustry & LLCommunity matters, like the NSAC caucus described. But now, as you may or may not know, I’ve put those plans on hold for the next several years, to give the National Center for Manufactured Housing Studies, time to assume my research and work load.

TODAY? Annual shipment volume of new HUD Code manufactured homes continues, for a third year and now maybe a fourth, at a 60 year nadir of only 50,000+/- homes, compared to 372,843 new HUD Code homes shipped in 1998! And this sorry state of affairs, with little to no relief in sight; and no new national initiative(s) in place, to ‘talk through the matter, with a vision and plan to meet the perennial marketing – sales – production challenge’, is how we’re beginning year 2012.

And, frankly, a similar scenario exists for the chattel finance imbroglio (‘a complicated situation’), now faced on several (capital availability, mortgagor worthiness, & regulatory compliance) fronts.

So, what’s a grassroots, ‘skin in the game’ business owner, male or female, to do? Continue to, figuratively speaking, ‘sit on our hands’ and wait for the normal course (economic cycle) of events to finally (re)turn in favor of our type affordable housing and lifestyle? If that’s what YOU truly believe, then read no further into this blog posting! Because, if you’re not interested in being part of the solution to the aforesaid challenge and opportunity, you’re more than likely, part of the ongoing problem.

Where does this leave us today, 1 January 2012? All I can tell you, for now, is I’ve sent a letter to the board chairmen of both national manufactured housing advocacy organizations, asking what each body and elected leader plans to do during year 2012 to, frankly, ‘Save Our Industry!?’

In one instance in particular, I’m interested in learning of the institute’s topics agenda for their annual legislative conference scheduled for 2/27/2012 (Note the date), and whether ‘Save Our Industry!?’ is specifically included therein. And also, whether a new executive vice president will be named before or during that 2/27/2012 meeting in Washington, DC. I’ll let you know of any response(s) I receive, to said letters, in weekly blog postings and newsletters to come….

In the meantime, the MHInitiative® sits on the sideline, waiting to see what our elected and salaried leaders have in mind, if anything, to ‘Save Our Industry!?’ during year 2012.

III.

Dumming Down or Over Stimulation of Our Citizenry?

On line communication, digital journalism, information overload, planned obsolescence, abstractionitis and acronymitis. Symptoms of an emerging culture where everyone is overly interconnected, and one in which we no longer have or take time to think critically and to analyze?

“Scientists at the University of California in San Diego calculated that in 2008
(a year after the original iPhone was released) Americans consumed 34 gigabytes of information per day, the equivalent of 100,000 words – or 350 percent more than we consumed on a given day in 1980.”*3 Think about it. How many computers, laptops, netbooks, and various electronic communication devices do you have in your home, office & car? Together, Carolyn and I have no fewer than a dozen such interconnected gadgets.

“The old business model is broken, and digital journalism has to figure out how to keep up with itself without sacrificing ethical and professional standards.” Columbia Journalism Review, Nov/Dec 2011, p.22. Not to mention ‘lack of permanence’ (for future reference), as there’re fewer and fewer hard (print) copies of newspapers, magazines, newsletters, and books.

And the most recent ‘shocker’, that longhand writing or cursive, will no longer to be taught in public schools. After all, everyone now has a handheld electronic communication device of some sort, and we simply text and or email everything to be said, often preferring this means over verbalizing, even with friends and family.

Bottom line to these recent phenomenon’s? A significant lack of downtime (and offline) that’s “…lowering our ability to think critically and to analyze. Others claim such distraction causes loss of IQ points, and it can take up to 25 minutes to regain our focus after an e – mail or phone call.”*4 Yet another study estimates ‘distraction’ is costing the U.S. economy around $650 billion a year in lost productivity.

Another way of looking at what amounts to be a significant cultural shift, is the negative influence distraction has on creativity. Recalling that creativity consists of five stages: preparation, incubation, insight, evaluation, and elaboration; social scientists now believe three, if not four of these key stages are simply incompatible with the constant influx of new and varied information routinely found online. “What creativity needs most of all, is time for the mind to percolate, to mix old ideas together in new ways, and to find connections no one else has found. For this, the mind must be left to itself.” *5

So, if you buy into these ‘over stimulation & dumming down’ consequences of modern day communication technology, what should you be doing to carve out some downtime, and ensure a creative milieu for yourself? Me? I’ve gone back to playing the piano early most mornings, to clear and prepare my mind for creative thinking; and, scheduling at least a half or full hour each day, away from telephones and computers, to simply read and reflect (i.e. percolate & incubate) relative to matters personal and business. Know what? It works. I find myself looking forward to those oasis moments, where and when I refresh, even nourish that part of me needing to think new thoughts and chart paths for my personal and business lives. Try it; I’ll bet you wind up liking it – the rest of your life!

***
End Notes

1. Order book, for $24.95 + shipping & handling, by phoning PMN Publishing via the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

2. For a FREE copy of the one page list of Business Development Managers, with a comprehensive description of Community Series Homes specifications on the reverse side, phone the above – referenced MHIndustry HOTLINE

3. ‘Inner Space’ by Frank Bures writing in Poets & Writers magazine, Jan/Feb 2012

4. Ibid, p.48

5. Ibid, p.48

***

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

‘God Forgive Me When I Whine’

A Inspiring Message from the Telephone Doctor, Nancy Friedman

Quoted from her ‘Monthly Communications Article’ for December 2012. This is the poem with which Nancy closes every keynote address:

Today, upon a bus, I saw a lovely girl with golden hair,
I envied her, she seemed so gay and wished I were as fair; When suddenly she rose to leave, I saw her hobble down the aisle;
She had one leg, and used a crutch, and as she passed – a smile.
O God, forgive me when I whine.
I have two legs. The world is mine.

And then I stopped to buy some sweets,
The lad who sold them had such charm, I talked with him – he seemed so glad –
If I were late, ‘twould do no harm.
And as I left he said to me: “I thank you. You have been so kind. It’s nice to talk with folks like you. You See,” he said, “I’m blind.”
O God forgive me when I whine.
I have two eyes. The world is mine.

Later, walking down the street, I saw a child with eyes of blue,
He stood and watched the others play;
I seemed he knew not what to do.
I stopped a moment, then I said: “Why don’t you join the others, dear?”
He looked ahead without a word, and then I knew – he could not hear.
O God forgive me when I whine.
I have two ears. The world is mine.

With legs to take me where I’d go
With eyes to see the sunset’s glow – With ears to hear what I would know.
O God, forgive me when I whine.
I’m blessed indeed. The world is mine.

Author Unknown.

Who’s the Telephone Doctor? A longtime specialist in customer service, with emphasis on telephone etiquette and effective performance. She’s been interviewed by Oprah Winfrey, and retained as a featured speaker and instructor by many Fortune 500 firms. I first met her a couple decades ago, when she addressed MHRetailers gathered at what was then known as the Midwest Manufactured Housing Show, now the Louisville MHShow (11 – 13 January 2012). Contact her via (314) 291-1012 or nancyf@telephonedoctor.com

***

Other ( $ Business – related) Topics of Interest

I.

Government National Mortgage Association (‘GNMA’) ‘Opens Window of Opportunity Regarding FHA Title I Securitization’

As YOU likely know, until more capital finds its’ way, from independent third party chattel financing lenders, to the HUD Code manufactured housing industry, we’ll continue limping along, as we have for the past three years, at only 50,000+/- new home shipments per year, compared to the 372,843 new homes shipped during 1998!

One hang-up has been GNMA’s requirement of a minimum net worth of $10,000,000 for issuers (of FHA Title I loans) and a reserve of 10% of all outstanding Title I MH loans, a.k.a. the ’10 – 10 rule’. GNMA now encourages lenders, or what some refer to as the ‘post – production sector’ of the MHIndustry, “…to directly provide GNMA with information that would support and justify a lower net worth level, including, possibly, information supporting a sliding scale net worth requirement tied to business volume….” This quoted from an MHARR memo dated 12/19/2011. For more information, phone (202) 783-4087.

If you’re one of those individuals, or head a finance firm interested in participating in this market, but are presently excluded by dint of the above – referenced 10 – 10 rule, directly contact:

Theodore W. Tozer, president, GNMA @ 550 12th St., SW, Washington, DC. 20024

Gregory A. Keith, Sr. VP, GNMA @ 550 12th St., SW, Washington, DC. 20024

II.

And on yet another, closely related and equally timely topic

Here’s your only opportunity to submit comments to the Consumer Finance Protection Bureau (‘CFPB’), on or before 17 February 2012, concerning interim regulations published in the Federal Register, on 19 December, regarding transfer of regulatory responsibility of the S.A.F.E. Act from HUD to the CFPB, under the Dodd – Frank law, effective 30 December 2011.

A copy of the interim rule can be obtained via www.regulations.gov (enter keyword “CFPB-2011-0023”).

Why do so? The CFPB is interested in learning, from YOU, of elements of the interim rule that are ‘outdated, unduly burdensome, or unnecessary’. Like I wrote; this is your only opportunity to identify and bring those onerous $ regulatory provisions to their attention. If you have serious concerns, and don’t respond; well, learn to live with those outdated, unduly burdensome, unnecessary and onerous $ regulations during 2012!

***

January Opportunities for LLCommunity Owners/operators

11 January 2012. Visit Fleetwood Homes’ Community Series Homes (‘CSH’) exhibited during the Louisville MHShow (nee Midwest Manufactured Housing Show), at the Kentucky State Fair Grounds, 11 – 13 January. I’ll be present at Fleetwood Homes CSH exhibit mid – afternoon, 11 January, to ‘talk CSH design’ with YOU. Might even be a surprise in store for those who stop by to visit. To register, phone (770) 587-3350. And while you’re touring other homes exhibited at this year’s MHShow, ask, “Why no Community Series Home here for me to buy and put into my landlease community?” Seriously!

12 January 2012. Get Certified! As a Manufactured Housing Manager® or MHM®, at the Comfort Inn on Philips Lane (road at the Kentucky State Fairgrounds entrance) between 8AM & 4PM. Pre – registration @ $250.00 required! This is the only national professional property management training and certification program designed for the landlease community owners, operators, and resident managers! Nearly 1,000 MHMs have been certified to date. Again, pre – registration is a must, so phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 ASAP. Why? Class limited to 20 individuals and we’re halfway there already. Participants receive a copy of the Landlease Community Management $75.00 textbook as part of their registration fee.

26 & 27 January. FOCUS Group, for LLCommunity owners only. Convenes in Tampa, FL., at Lamplighter on the River. If you’d like to be considered for an invitation to participate, phone (317) 346-7156 ASAP. Why? FOCUS Group is limited to 20 LLCommunity owners and senior executives, and we already have 16 committed to participate. Plan to arrive mid – afternoon on the 26th, stay at same quality hotel, enjoy a special networking dinner that evening, and spend from 8AM until 2PM, on the 27th, ‘working through’ a five topic agenda – based on suggestions submitted beforehand by registrants. Cost? Meeting expenses are totaled and invoiced, on a pro rata basis, after the FOCUS Group meeting. There is no other venue like this in the realty asset class! It’s been convening for 20 years, and at one time or another, most of the major and most successful landlease community owners/operators have participated.

And that’s not all! There’s also a January meeting scheduled pursuant to maybe introducing a new chattel finance program for owners of individual and small portfolio landlease communities engaged in one or another form of self – finance to consummate on – site home sales transactions; in effect, creating a new, four – legged $ business model involving:

1) HUD Code home manufacturers routinely designing and shipping Community Series Homes (a.k.a. ‘CSH’) into landlease communities, or desiring to do so; and willing to offer a discounted wholesale price to pre – qualified landlease communities and or their principal owners.

2) Independent third party lender(s) intent on ‘doing more business’ with pre – qualified landlease communities and or their principal owners.

3) Sole proprietors, partnerships, and corporate owners of pre – qualified landlease communities and small portfolios

4) Prospective homebuyers/site lessees in search of and deserving a ‘value proposition’ where the amount of home they buy and mortgage, is in accords with what they can truly afford, and the participating LLCommunity’s homesite rent rate is truly in sync with other forms of multifamily rental housing in the same local housing market.

This new four – legged business model also presupposes serious conversation, and eventual evolution – the sooner the better – of a functioning, supportive secondary market for the marketing, sale, even financing of resale manufactured homes within and outside landlease communities. For more details on these evolving manufactured housing chattel finance and secondary market programs, read the January 2012 edition of the Allen Letter professional journal. You know, the one that contains the 23rd annual ALLEN REPORT, a.k.a. ‘Who’s Who Among Landlease Community Portfolio Owners/operators Throughout North America!’ Not yet a subscriber? Phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or this website: www.community-investor.com TODAY.

***

George Allen, CPM®Emeritus, MHM®Master. Box # 47024, Indianapolis, IN. 46247

My Gift to Every Combat Veteran & Their Family & Friends

“Greater love hath no man than this, that a man lay down his life for his friends.”*1

Recently came across some searing quotes in a true story, describing the combat experiences of Sergeant Dakota Meyer, the first living Marine recipient of the Congressional Medal of Honor since the Vietnam War.*2 Not only did these passages stir personal memories of a lonely Christmas 43 years ago in Vietnam, but they set the stage to review a new book – or two, that in my opinion, should be required reading for every young man and woman, as well as their family members and close friends, before departing for a combat theatre.

“When you leave the (defensive) perimeter, you don’t know what’s going to happen, regardless of what war you’re fighting in,” Sergeant Major Kellogg said, “Once you get to a point where you make the decision – ‘I’m probably going to die, so let the party begin’ – once you say in your mind you aren’t getting out of there, you fight harder and harder.” P.16 This so true view begs this question, ‘How does one return home and leave such a mindset behind?’

“I lost a lot of Afghans that day,” Meyer said. “And I’ll tell you right now – they were just as close to me as those Marines were. At the end of the day, I don’t care if they’re Afghans, Iraqis, Marines or Army; it didn’t matter. They’re in the same shit you are, and they want to go home and see their family just as bad as you do.” P.18 Then these questions, ‘When they return home, how do they leave such experiences behind – or do they, or even, should they?’

“Being a Marine is a way of life,” Meyer said. “It isn’t just a word, and it’s not just about the uniform; it’s about brotherhood. Brotherhood means that when you turn around, they’re there, through thick and thin. If you can’t take care of your brothers, what can you do in life?” p.20 That’s why I’m grateful for my military heritage. To this day, Marines JD Richards, Spanos, Dietz, my brother Mark, and others, all ‘Have my back!’

With that said, Karl Marlantes’ new book, What It Is Like to Go to War, while probably not for everyone – particularly those who abhor war and the killing that goes with it; is indeed, a ‘necessary read’ for we who appreciate our freedom and lifestyle as American citizens, as well as our men and women of combat, who protect and preserve those highly valued qualities in our behalf.

Some may remember the Marlantes’ first book, Matterhorn. While couched as historical fiction, it is in truth, a wholly accurate and graphic account of small unit infantry combat in the Republic of Vietnam during the late 1960s. Having been there, at the same time in the I Corps theatre of operations, as then Marine lieutenant Marlantes, I’m familiar with incidents he describes, to tell his story. And it was through reading that book I became convinced ‘he well knows about what he writes’ in What It Is Like to Go To War. Here’re a couple passages, from the beginning and near the end of this book, that touched me, as they will you – or a friend or relative, in personal and special ways:

“The Marine Corps taught me how to kill, but it didn’t teach me (how) to deal with killing.” P.3. And, “The returning warrior needs to heal more than his mind and body. He needs to heal his soul.” P.196. For those who’ve read my short story, ‘Making Amends’, know the culmination of my healing didn’t occur until Christmas Eve 2005, 43 years following my return from the Republic of Vietnam as a Marine lieutenant. That’s when I met Catherine, the manager of a pharmacy in Indianapolis. At a critical point in our first conversation, and as it turned out – our very lives, we shared what happened to us – from widely different perspectives, during 1968 and 1969, relative to that conflict. And as I wrote in that vignette, “We talked. I cried. She atoned.”

Well, author Marlantes makes this matter of dealing with the personal aftermath of armed conflict crystal clear, in this introduction to chapter # 9, titled ‘Home’.

“Returning from the initiatory space of the battlefield to the normal world is every bit as mysterious a journey as entering the Temple of Mars (war). The world you left behind has changed and you have changed. You know parts of yourself that you, and those you’ve lived with all your life, never knew before. You’ve been evil, and you’ve been good, and you’ve been beyond evil and good. You’ve split your mind from your heart, and you’ve split your heart with grief and your mind with fear. Ultimately, you’ve been in touch with the infinite, and now you are trying to reconcile yourself to the mundane. The warrior of the future will need to know how to enter and exit both worlds, if not with ease, then at lest without permanently disintegrating his or her personality.” P.176.

This is why every combat veteran, past and present; as well as their family and close friends, should read Marlantes’ new bok. And there’s much more within its’ 256 pages; everything from the act of killing, feelings of guilt, numbness and violence, ‘the enemy within’, lying, loyalty, heroism, ‘the club’, and much more. One simply cannot read this book and walk away unaffected, whether for personal reasons – or just as important, how one henceforth relates to friends and relatives, who’ve gone off to war and likely returned less and more than whole.

If you’d like a copy of ‘Making Amends’, request it via (317) 346-7156 or gfa7156@aol.com George Allen c/o Box # 47024, Indpls, IN. 46247

End Notes:
1. John 15:13, and 2)‘Marine Braves the Jaws of Death Five Times’, by Cpl. Reece Lodder, USMC, Soldier of Fortune magazine, December 2011, pp. 14 – 20.

Valuing the Income Stream of Your Landlease Community

&

The Higher the Site Rent, the Less Home Buyers Can Buy

&

No More on Radical Change for Now; Maybe Next Week!

I.

Two Ways to Estimate the Value of Your LLCommunity’s Income Stream

There’s a longhand way to estimate the capitalized annual net rental income value of any traditional landlease (nee manufactured home) community; and, there’s a shorthand approach for average quality properties alone. Both are income capitalization income valuation methodologies. And for the record, remember; there are two additional traditional income – producing property valuation methodologies: replacement value and market value; neither of which will be dealt with in the following few paragraphs.

Given an ‘average’ LLCommunity with 200 fully developed, rentable, occupied home sites; charging $200/month site rent; experiencing 80% physical occupancy; 40% overall Operating Expense Ratio or OER; and worthy of a 10 cap (i.e. 10% income capitalization rate, ideally based on like property sales in the same local housing market, recently sold); what is the approximate value of that property’s net rental income stream – not considering the sale and or rental of homes, if any, on – site?

The classic longhand method would be to estimate the property’s maximum net rental income stream value first, if viewing as a potential buyer or investor; then ‘run the numbers’ reflecting present physical occupancy level; then, to be even more precise, considering economic occupancy. Here’re three representative sets of numbers:

• 200 sites X $200/mth rent X 12 months X .60 (reciprocal of 40% OER), divided by .10 cap rate, = $2,880,000.00 estimated net rental income stream value of LLCommunity with every site occupied and paying rent.

• 200 sites X .80 (physical occupancy) X $200 X 12 months X .60, divided by .10 cap rate = $2,304,000.00 estimated net rental income stream under present conditions, or $576,000.00 less value than if/when fully occupied.

• 200 sites X .75 (economic occupancy, i.e. # renters actually paying rent) X $200 X 12 months X .60, divided by .10 cap rate = $2,160,000 estimated net rental income stream under present ‘collection conditions’, or $720,000 less value.

Keep in mind; with exceptions of first, the 200 rental homesite count (though that could change), and then 12 months/year (Always best to annualize these calculations), all other factors are ‘variables’ requiring research and documentation before using in the afore – described longhand valuation formula. Two examples: the 40% OER, while widely accepted as the Industry Standard for landlease communities*1, must be ascertained for the subject property; and the ‘cap rate’, while calculated different ways, is often a function of a property’s net operating income (‘NOI’) divided by its’ value (e.g. NOI & sale price at ‘closing’, in the case of a ‘comp’ or nearby comparable property recently sold)*2.

Then there’s a shorthand approach to the afore – described three applications of the net rental income stream valuation formula. Widely known as the New Rule of 72, this methodology is simple, direct, and applies ONLY to average quality landlease communities. Same ‘givens’ as used in previous examples: 200 rental home sites & 200/month site rent, 80% physical occupancy = 160 sites (& 75% economic occupancy = 150 sites), 40% Industry Standard OER, and 10% ‘cap rate’ for an average quality LLCommunity.

• 200 sites X $200 X 72 = $2,880,000.00 estimated net rental income stream value

• 180 sites X $200 X 72 = $2,304,000.00 estimated net rental income stream value

• 175 sites X $200 X 72 = $2,160,000.00 estimated net rental income stream value

It doesn’t get much simpler than that. What is the value of your landlease community’s net rental income stream today? What should it be? What are YOU doing to get it there? For a FREE wallet card containing the long and shorthand valuation methodologies just demonstrated, phone the MHIndustry HOTLINE provided in end note # 1.

Has this question crossed your mind: ‘If this is the New Rule of 72, what’s the Old Rule of 72?’ Fair enough. It’s a simple, longstanding formula used to calculate ‘How long it takes to double the value of an investment at a set ROI (i.e. return on investment).’ For example, the whole number ‘72’ divided by an ROI percentage, e.g. of ‘20%’, equals 3.6 years. Now you know, both the Old & New Rules of 72!

II.

The Higher the Site Rent, the Less Home Buyers Can Buy!

The following paragraphs are quoted from the January 2012 issue of the Allen Letter professional journal. This information is so important and timely, we don’t want to wait even two weeks to get the updated information and figures into your hands and head.

Longtime blog floggers (readers) and Allen Letter subscribers are already familiar with the game changer ‘Ah Ha! & Uh Oh! Worksheet’ created four years ago. What’s it do? “Estimate(s) maximum recommended ‘affordable’ & ‘risky’ purchase prices for new & resale, privately – owned homes of any type, sited on realty owned fee simple with home, or leased – as in a landlease community!” Quoted from form’s heading. In other words, given a prospective homebuyer or household’s Annual Gross Income (‘AGI’); or, the Area Median Income (‘AMI’) for any zip coded local housing market in the U.S., this single piece of paper, with its’ step – by – step center description column and four columnar ‘$ examples’, i.e. home – & – realty ‘affordable’ & ‘risky’ purchase; and, home – in – LLCommunity ‘affordable’ & ‘ risky’ purchase, clearly demonstrates the ‘most home a consumer should buy’, given their annual gross (or market’s median) income, from both ‘affordable’ & ‘risky’ perspectives! No other tool in today’s housing market and realty profession comes close to what this form does for homebuyers and rental homesite lessees, as well as those marketing, selling and financing new and resale homes!

The original ‘Ah Ha! & Uh Oh! Worksheet’ used as a formula starting point, $36,000 AGI and AMI. While this was characteristic of many Midwest local housing markets four years ago, it really was too low for widespread application, even though users are encouraged to use appropriate AGI, when a prospective homebuyer ‘walks in the home sales center door’, or AMI, when considering a new local housing market for opening a new home sales center. In any event, a new, slightly revised edition of the ‘Ah Ha! & Uh Oh! Worksheet ‘begins’ with an AGI/AMI of $51,229, the approximate national AMI for years 2010 & 2011. How does this new and higher figure ‘pencil out’ when running the numbers through this multipurpose form? For the purposes of this week’s blog posting, we’ll deal only with the ‘affordable’ & ‘risky’ perspectives of home buying and rental homesite leasing in typical landlease (nee manufactured home) communities.

“ ‘As Rental Homesite Rates Rise, the Price/Value of Homeowner/site lessees’ Home Goes Down!’ No real surprise there. That’s a well recognized logical truism around the MHBusiness. Here are the numbers! Given the above – referenced starting point of $51,229 AMI or AGI, and three rental homesite rates at $133/month, #333/month, and $533/month; and using said ‘Ah Ha! & Uh Oh! Worksheet’, here’re the corresponding maximum ‘affordable home prices/values for those three site rent rates consecutively: $98,649 max, slipping down to $75,000., then down further to only $50,968. In other words, for every $200 in rent increase (between $133 & $333 & 533), the maximum ‘affordable’ home price/value plummets by about $24,000! Bottom line? Given that $51,229 is the approximate national AMI, and average national rental homesite rate is near $333/month, then a $75,000 price/value new or resale manufactured home is affordable and ‘doable’ in the average landlease community! However, if site rent is increased to $533/month in a market where AMI is anywhere near $51,229, that homeowner/site lessee who could have bought a $75,000 home, I now only able to purchase one for $50,968 – assuming he/she does to in an ‘affordable’ fashion, and NOT as a ‘risky’ deal characteristic of the late 1990s. FYI. The ‘risky’ home price/value figures here, for $333/month & $533/month site rents are $101,666 and $80,210 respectively. Impressive yes, but remember: The ‘risky’ route is no picnic, as the utility bills included in the ‘affordable’ PITI (i.e. principal, interest, taxes, insurance) monthly house payment, still have to be paid each month, but now ‘in addition to’ the home loan payment of just PITI alone.” Quoted from the Allen Letter professional journal (1/2012)

Want a FREE copy of the aforementioned and slightly revised ‘Ah Ha! & Uh Oh! Worksheet’? Simply phone the MHIndustry HOTLINE listed in end note # 1.

III.

No More on Radical Change for Now; Maybe Next Week!

Will tell you this much though. Email and telephone responses to last week’s blog posting: ‘More Than One Way to Implement Radical Change…’ was near immediate, pouring into my laptop and our offices within one half hour after I completed the posting process. And so far, with one exception (A reader/writer misunderstood, thinking I was ‘looking for a job’ – Which I Am Not!), many of YOU out there, are fed up with the perennial inter association politicking, bickering and marginalized industry advocacy in our nation’s capitol (Think S.A.F.E. Act & Dodd – Frank regulatory ‘surprises’ in 2010 & 2011); and on the landlease community side of the house, apparent inactivity, lack of direction, and paucity of communication with direct dues – paying members. Hence, widespread but tacit support for Radical Change of some sort….

Again, I am not looking for a job! Rather, I’m seeking a practical and lasting means to continue producing, preserving, and carrying forward the sort of practical knowledge contained in parts I & II of this week’s blog posting.

***

End Notes.

1. For a FREE copy of the Industry Standard Chart of (Operating Expense) Accounts, along with appropriate line item OERs, phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764, and request it.

2. Capitalization rate. Also referred to as cap rate or income yield. The lower the cap rate (e.g. 8% cap rate is lower than 12% cap rate), the higher the risk to the investor (i.e. To realize his/her ROI, or return on & of, a higher priced investment), hence a higher asking price. From Dictionary of Real Estate.

George Allen, CPM®Emeritus, MHM®Master
Consultant to the Factory – built Housing Industry &
The Landlease Community Real Estate Asset Class
Box # 47024, Indianapolis, IN. 46247
(317) 346-7156 & gfa7156@aol.com

More Than One Way to Implement Radical Change…

I.

As a Major Paradigm Shift, Belatedly Effecting National Advocacy Change,

&

Now’s time for this 60 year ‘double dual industry’, broadly comprised of

1) manufactured housing fabrication & distribution segments, and

2) landlease community developers, investors & managers,

to maybe ‘leave the MHI home’ and go their separate ways. Can YOU think of any other U.S. industry, where the product manufacturing and sales business model shares the same national political and regulatory advocacy presence with their commercial, wholesale, and retail customers? No? And that forced intimacy, as we know from history, makes for a fertile breeding ground for collusion on one hand (Think questionable chattel lending practices circa 1978 & 98) and conflicts of interest (Relative to land zoning perspectives), on the other!

Or simply,

The pronouncement of a ‘third choice’ national advocacy alternative for manufactured housing purists, landlease community owners, and everyone else in today’s MHIndustry and LLCommunity asset class.

***

Nature of paradigm shift, radical change, third choice advocacy alternative?

First; one more time, review the present day status quo and previously recommended Radical Change at the Manufactured Housing Institute, proposed and described here, during the past several weeks:

• “A Congressional hearing takes place in late November 2011 in Virginia, and there’s no salaried spokesperson or advocate testifying in behalf of the Manufactured Housing Institute. MHI’s annual meeting takes place in Phoenix, AZ., earlier this Fall. Since then, there’s been little communication to direct, dues – paying members by its’ National Communities Council division, including follow – up of matters (e.g. CAS Task Force & more…) discussed at said meeting. And during a recent conference call with state manufactured housing executives, MHI’s chairman indicated there’s no rush to find a replacement for Thayer Long. That’s a brief summary of this industry observer’s ‘grassroots constituency view’ of manufactured housing (MHI) and landlease community (NCC) national advocacy to date. In other words, National Advocacy Choice # 1 = Maintain the status quo.” (Edited. GFA) Also probably why, for the first time since this weekly blog appeared 170 editions ago, some of its’ more than 500 readers have started calling and writing, asking, ‘Will MHI will be in business by year end 2012; and, whether they should pay dues this next year?’

• “…on 13 November 2011, this weekly blog posting proposed a Radical Change at the Manufactured Housing Institute. To wit, “Finally merge a renamed Manufactured Housing Association for Regulatory Reform (a.k.a. MHARR) with MHI, yes indeed, and make Danny Ghorbani executive – in – charge of all home manufacturing/distribution matters, and yours truly, George Allen, executive – in – charge of all landlease community owner/operator affairs!” In other words, this National Advocacy Radical Change = Choice # 2. (Edited. GFA). As a related aside, one has to wonder what the answer(s), and advocacy results, might have been, IF indeed, MHI’s elected leaders had made a serious overture to Mssrs. Ghorbani & Allen.

Since there’s been no recent encouragement from MHI’s elected and salaried leaders, that status quo choice # 1 will markedly improve during the weeks and months ahead; and, there’s been no interest expressed in pursuing National Advocacy Change, Choice # 2, by the same parties (With one marked exception), the stage is effectively set, and door opened wide, to introduce National Advocacy Radical Change, Choice # 3.

National Advocacy Radical Change, Choice # 3?

HUD Code home manufacturers who design and market a line of modular homes, might join the Building Systems Council (‘BSC’) of the National Association of Homebuilders (‘NAHB’). This is not without precedent. Champion Homes’ Genesis (modular homes) division already belongs; and, Clayton Homes, as well as Palm Harbor Homes (now part of the Cavco Industries family of companies) are past members of NAHB’s BSC. However, this alternative would leave ‘HUD Code only’ firms adrift and alone. A better alternative, in my opinion, would be for all HUD Code manufactured housing producers, large and small, to affiliate en masse, with a renamed Manufactured Housing Association for Regulatory Reform (‘MHARR’), to henceforth effect a stronger and united national advocacy presence relative to all manufactured housing PRODUCTION matters politic, and regulatory affairs.

Who knows? Maybe after 11 long years, we might see the Manufactured Housing Improvement Act of 2000 (a.k.a. ‘MHIA@2000’) finally fully implemented over HUD’s perennial resistance to our industry’s heretofore conflicted status quo national advocacy efforts.

&

At the same time, either reorganize the Manufactured Housing Institute as a national POST PRODUCTION advocacy body, sans all HUD Code home manufacturers, henceforth focused on the needs and wants of ALL other segments of the manufactured housing industry, possibly including the landlease community real estate asset class.

OR, if indeed, the timing and motivating circumstances are now right and compelling,

Birth a new realty – based national advocacy ( & more) body, similar to the NAR, IREM, BOMA, NAA, NMHC, CA, CIREI, C of RE, REEA, NAREA, etc., to represent and advocate in behalf of 50,000+/- landlease communities, and their owners/operators, nationwide. And while at it, broaden that new body’s scope of products and services to include statistical research and reporting; weekly online and monthly print communication with members; viable and economical professional property management training and certification; an annual International Networking Roundtable event; periodic, confidential FOCUS Group meetings for top executives; as well as, preparation and distribution of key resource documents and directories long utilized, though heretofore prepared commercially, by individual and portfolio landlease community owners/operators nationwide. This would indeed be the welcome, needed, and long awaited dawning of a new and exciting day, decade, and future for landlease (nee manufactured home) community developers, investors, professional property managers, even the asset class’ homeowner/rental home site lessees!

The remaining segments, including state manufactured housing associations? That’d be a matter, as suggested earlier, best addressed by the reorganized MHI; or if need be, the new landlease community national advocacy and research/resource body.

The matter frankly, is almost as simple and straightforward as just described. Probably the biggest considerations, next to deciding on a national headquarters location, will be, ‘What to do with the annual Manufactured Housing Congress in Las Vegas, Nevada, each Spring?’ And, ‘How to best handle Washington, DC., lobbying in behalf of landlease communities and non – manufacturing segments of the manufactured housing industry?’ Yes, there’ll be a myriad of additional details to address, while implementing this paradigm shift, radical change, third choice national advocacy alternative. But what other ‘real choice’ do we have today? The status quo? Really?

With that said, what’s the next step in this radical change process?

*****

SUGGESTION. Print off & SAVE this ‘Radical Change Implementation’ blog posting for reference, during the weeks, maybe months ahead.

And remember, your input on this timely matter, and others, is requested, respected, and greatly appreciated! Correspond in confidence via: gfa7156@aol.com or phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or write to GFA c/o Box # 47024, Indpls, IN. 46247.

*****

II.

Maybe More Chattel $ for in – Community Home Deals

Remember awhile back, when the BEBA (Blast Email Blog Alert) message introducing that week’s blog posting, hinted at a new source of chattel capital for in – landlease community new home sales transactions? Well, progress is being made in that direction and to that end. Hopefully, in a few weeks or longer, we’ll announce the nature and launch of this new radical change (improvement) partnership, addressing the need to self – finance new home transactions and stimulate factory production and shipments.

*****

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

Two New Trends; & a Watershed Year for MHAdvocacy?

I.

Two New Trends to Watch….

The manufactured housing industry and its’ counterpart, the landlease community real estate asset class, have been awash in new tends and retread trends, for much of the past decade. Why? HUD Code annual shipment levels of new homes have slipped precipitously from 372,843 in 1998 to only 50,000+/- in 2008, 2009, 2010, and 2011; taking landlease (nee manufactured home) community occupancy, in part, along on the slide. These new and retread trends include, but are not limited to…

• Percentage of new multisection manufactured homes has decreased as volume of new singlesection manufactured homes has increased

• Percentage of land – and – home packages (i.e. manufactured homes installed on building sites conveyed fee simple) has decreased, and volume of landlease community infill homes has increased

• (Larger) Developer Series Homes characteristic of manufactured housing’s 1990s heyday, have been supplanted by smaller Community Series Homes or ‘CSH’, to support landlease community infill.

• Landlease community occupancy declines as ‘(home) deals of convenience’ are repossessed, and other residents’ lives suffer during the national economic slump

• Landlease community (property owner) self – finance methodologies of ‘buy here – pay here’ (circa 1970s) and ‘captive finance’ (circa 2000s), now supplemented with the lease – option alternative, and increasing presence of ‘rental units’ (both circa 1970s practices), as the S.A.F.E. Act and Dodd – Frank Bill underscore importance of chattel lender (LLCommunity owner) compliance with strict financial regulations.

• Manufactured home communities now called landlease communities, as two traditional housing types (e.g. pre – HUD Code ‘mobile homes’ & HUD Code manufactured homes) are joined on – site by increasing numbers of modular homes, park model RVs, ‘RVs for a season’, even stick – built homes designed and constructed to look like neighboring HUD Code homes.

Again, this is a partial list of contemporary trends that could be listed here, but you get the idea. So, what’s happening anew now? Two new trends to watch….

TREND # 1. Quiet tenant and social activism within, and on the perimeter of, the manufactured housing industry and landlease community real estate asset class.

Four trend indicators were described by Ms. Carla Burr on 29 November 2011 in Danville, VA., at a Hearing on the State of Manufactured Housing, before the Subcommittee on Insurance, Housing, and Community Opportunity, of the Financial Services Committee, House of Representatives (Congress), cited by her as being

“…promising signs to support affordable housing through manufactured housing.”:

• “The establishment of the Manufactured Home Owners Association of America (‘MHOAA’), of which I am a member. Nearly 20 state organizations exist representing community residents. The goal is to have all 50 states organized to become member states.”

• “The Corporation for Enterprise Development (‘CFED’) developed the Innovations in Manufactured Homes Initiative (‘I’M HOME’) to ensure families who purchase manufactured homes reap benefits from the homeownership experience that enable them to live safely, securely and affordably and to build wealth.”

• “Resident Owned Communities USA (‘ROC-USA®’) has put together the financing and the technical assistance to enable residents of communities to buy the land, and run the community cooperatively. If I could, I would buy my plot of land in a heartbeat! This would convert my home to real estate and my taxes would change from personal property to real property; the high lot rental would be eliminated, thereby putting more money in my pocket.”

• “Next Step ™ is building a national network of nonprofit affordable housing developers to replace pre – HUD Code manufactured homes with new ENERGY STAR manufactured homes through a partnership with my fellow panelist, Clayton Homes.”

STOP HERE, and reread that four part description of this ‘quiet tenant and social activism trend’ already affecting the manufactured housing industry and landlease community real estate asset class.

NOW ASK YOURSELF these questions:

• Has MOAA come to my local housing market yet? Are there aspects of my present landlease community operation that would attract this sort of activism cum landlord – tenant legislation? Are my rental homesite rates in sync with other multifamily rental properties in my local housing market? Do I know for sure? To find out, phone me via MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

• Should I be learning more about the CFED & ‘I’M HOME’ programs. What are my national and state advocacy bodies (i.e. Manufactured Housing Institute & its’ National Communities Council division, for starters) telling me about these; and are they opportunities or threats? Phone MHI @ (703) 558-0400 & NCC @ (703) 558-0666 to request information.. Not a direct, dues – paying member? Become one!

• Is tenant or resident ownership of my/our landlease community(ies) a viable and or desirable consideration at this time, or in the foreseeable future? To learn more about the ROC-USA program, contact MHI member Paul Bradley via (603) 856-0709.

• And, what is Next Step ™ all about? For the manufactured housing perspective on this subject, ask Kevin Clayton @ (865) 380-3000

Lest you think, for even one minute, that any of the preceding is wishy washy consumer posturing, read the following from Ms. Burr’s testimony at the Congressional hearing:

“I love my home. I just made a mistake when I moved into a manufactured housing community, or park. (While) about 2/3 of manufactured homes are placed on land owned or controlled by the home buyer, but (sic) 1/3 of the homes are placed on land leased. Nationwide, there are 50,000 (landlease) communities. Some are wonderful with respectful land owners who maintain high quality and keep prices affordable.”

HOWEVER

“Then there are communities like mine. Established in 1972, there are 499 homes in my (Virginia) community. Unfortunately, many of us feel trapped. We each spent tens of thousands of dollars to buy our homes, yet the lot rent has increased exorbitantly. Next year, my lot rent is going to be $919.00 a month. Seven years ago, the lot rent was about $400.00. We have no control over the lot rent. If we don’t want to pay it, one would expect we could pick up our homes and move, but that is out of the question. Moving my home would cost about $20,000. There is also simply nowhere to move. There are no (landlease) communities near me and I cannot afford to buy land.”

Pretty sobering picture of the near rapacious state some large income – producing properties have gotten themselves into of late.

But the bigger question is, ‘How does’ and or ‘how will’ this quiet tenant and social activism trend potentially affect your manufactured housing business and or landlease community operation? You owe it to yourself and your business interests to ponder….

TREND # 2. This is a two part complementary trend, where 1) ‘Park model’ production might spell manufactured housing survival in the short term, and factory – built housing industry success in the long term. And, 2) Is ‘RV park development and investment’ the landlease community business model of the future? Appears to be so, for now, in local housing markets where new oil/gas resources are being accessed and readied for market.

In the first instance, the following quotes are from a story titled ‘Cavco Industries Expands Reach to Industry Shows Across the U.S.’, in the December 2011 issue of Woodall’s Campground Management newspaper.

“…with its’ recent acquisition of Fleetwood Homes and Palm Harbor Homes, Cavco now has more production facilities than any other company in the park model business.”

“Combine multiple factory locations with Cavco’s increasing innovations in park model designs, which now include off – grid solar – power park models…and its’ easy to see how Cavco has managed to achieve at least modest sales growth at a time in which most companies continue to struggle with the recession.” For that matter, who isn’t building park models these days?

“…Cavco has derived much of its’ park model business from campgrounds…the company is also seeing renewed signs of interest from consumers who want to purchase a park model and have it set up in a campground for use as a weekend retreat or vacation cottage.”

What’s not pointed out in the article, for an obvious reason*1, among knowledgeable housing professionals, is that an increasing number of park models (a.k.a. ‘park model RVs’ mentioned earlier in this blog) are being sited in landlease communities as seasonal, and in many instances, year round housing. For that matter, in Sunbelt regions, entire landlease communities (a.k.a. RV parks) are comprised of park models and other types of recreational vehicles.

But now, for the first time outside Sunbelt regions, RV parks are being approved for land development in areas where oil/gas resources are being tapped in Canada and the U.S., to address our nation’s energy challenge, on the one hand; and, severe worker housing shortages on the other. It’s generally easier and cheaper to build high density (Given 400 square foot smaller size of ‘park model RVs,’ than much larger manufactured homes, CSH models notwithstanding) RV parks, than landlease communities characterized by five homes per acre.

Will this landlease (RV parks) community trend continue to grow, and more importantly, expand into other, non oil/gas resource areas? Too early to tell just yet. But some veterans in the MHBusiness already point out how ‘mobile homes’ of the 1960s were similar in size to today’s park model RVs – earning then, the ‘most affordable housing alternative’ sobriquet for the manufactured housing industry. Are today’s home buying consumers, however, ready to buy such small housing en masse. It’s highly doubtful. But the estimate remains; there’re 250,000+/- vacant rental homesites throughout the U.S. at this time, among the estimated 50,000+/- landlease communities. And frankly, the likely majority of this quarter million sites is functionally obsolete (i.e. too small a footprint, in size, to site today’s behemoth multisection manufactured homes, even many of the smaller, specially – designed singlesection Community Series Homes. SO, ‘park models’, ‘park model RVs’, ‘granny flats’, even ‘accessory dwelling units’ or ADUs (per HUD), irregardless of how one refers to them, represent a viable, contemporary factory – built housing alternative, despite the one aforementioned caveat.*1

End Note 1. Factory – built structures of 400 square feet in size, or smaller, not subject to the infamous HUD (building) Code.

***

II.

Year 2012; a Watershed Year for Manufactured Housing?

(Go ahead, look up ‘watershed’. What follows will make more sense to you)

No big pronouncement in the paragraphs to follow, simply a restatement of where we’ve been in terms of national industry advocacy, and what our two choices are to date, with a hint of one more choice to come.

A Congressional hearing takes place in late November, and there’s no salaried spokesperson or advocate present from the Manufactured Housing Institute. MHI’s annual meeting takes place in Phoenix, AZ., early this Fall. Since then, there’s been little communication to direct, dues – paying members by its’ National Communities Council division, including follow – up on matters discussed at said meeting. And during a recent conference call with state manufactured housing association executives, MHI’s chairman indicated there’s no rush to find a replacement for Thayer Long. That’s a brief summary of this industry observer’s ‘grassroots constituency view’ of national manufactured housing and landlease community advocacy to date. In other words, national advocacy choice # 1 = Maintain the status quo.

As YOU know, on 13 November 2011, this weekly blog posting proposed a Radical Change at the Manufactured Housing Institute. To wit, “Finally merge the Manufactured Housing Association for Regulatory Reform (a.k.a. MHARR) with MHI; yes indeed, and make Danny Ghorbani executive – in – charge of all home manufacturing/distribution matters, and yours truly, George Allen, executive – in – charge of all landlease community owner/operator affairs.!” That, in other words, is national advocacy choice # 2. Radical Change at the Manufactured Housing Institute.

Response to date? Same as we told you last week, dozens of telephone and emails (i.e. copies of original emails, sent to one or more of five leaders listed at the end of the 11/13/11 blog posting) expressing agreement and encouragement, from all segments of the manufactured housing industry and landlease community asset class – and one direct response from one of the those five ‘leaders’.

But that’s OK. Why? Two reasons. If and when MHIndustry business owners decide en masse they want to improve the manner by which their commercial interests are advocated in Washington, DC., it’ll happen! And, proposing a Radical Change at the Manufactured Housing Institute, for national consideration and discussion, sets the stage and opens the door to an Even More Radical Change not yet described. And when the time is right, that too will be pronounced!

***

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

Bound & Determined to Begin This Blog with Fun Information!

This may not be the newsiest summary you read this week, but there’s ‘takeaway’ value here to apply to your unique business interests; before we return to ‘What’s happening & Not been happening’ in the MHIndustry.

I.

Earlier this year I was hired by Marcus & Millichap (Our asset class’ largest national realty brokerage of landlease communities) to address their brokers about, you guessed it, landlease communities. I began my remarks with a recitation of some of the most unusual and interesting properties I’ve visited during the past three decades, along with some of my most unusual freelance consulting assignments.

First there was the landlease community – based nudist colony in central Canada; then two gypsy family – owned conclaves in South Carolina and Arizona; even a ‘biker hangout’ in central, Florida. Ever visit a several hundred site ghost LLCommunity, where every fully – developed rental homesite, complete with utility risers and paved off street parking, is vacant and overgrown with high grass and the like? Gives one an eerie feeling. And some say there are no $1,000.00 per site ‘deals’ to be had these days, like the LLCommunities I acquired in the early 1980s. Well, within the past six months, one 50 site, management – challenged property, 100% occupied with (mostly) rent paying homeowners, went for $40,000.00 cash. I’m confident there’re additional investment opportunities like that ‘out there’.

My most unusual management consulting assignments? An in – person damage assessment of several large landlease communities in Homestead, Florida, the day after Hurricane Andrew, 20 years ago. We have stunning photos to prove it; showing single section manufactured homes stacked atop one another like cord wood, and tall pine trees with 24” diameter trunks stripped of all their limbs and needles! Then there was the time I quietly terminated a volatile, but otherwise competent community manager, after he threatened to kill the tight – fisted, out of state property owner. How’d I do it? Got the manager a similar job, the next day, in another state, managing a 100% ‘rental home’ LLCommunity. And he remains on the job to this day.

Most unusual International Networking Roundtables during the past 20 years? There was a string of ‘em, beginning in 1999, in Colorado Springs. During the final night of the event at the Marriott Hotel, five feet of snow fell (Turned out to be the heaviest pre – season snowfall on record for the area!) paralyzing the city and transportation for three days. We all helped shovel snow, took our meals in the lobby of the hotel, and lived to tell about it! The very next year, 75 of us faced – down Hurricane Georges, at another Marriott Hotel, this time on Florida’s East coast, at Delray Beach. As the hurricane roared outdoors, we hardly noticed it inside, except for when swinging one’s feet out of bed in the morning, onto a water soaked carpet. The very next year, the Tragedy of 9/11 forced postponement of the Roundtable until November, with an even larger number of registrants showed up at the event in Chicago. Then, the following year in 2002, we had a commitment from President George W. Bush’s liaison staff, for him to maybe briefly visit the 11th annual Roundtable – acknowledging previous year’s Roundtable attendees convening despite the threat of international terrorism; this year’s event held on the Gulf coast in St. Petersburg Beach, Florida. At the time, President Bush was planning to be in town to play golf with his brother Jebb, then governor of Florida. Extra security was already in place at the host hotel, to accommodate a convention of Florida Judges. And we tentatively reserved the presidential suite at nearby Hotel Don Cesar. But, at the last minute, the first Afghanistan conflict heated up, and his trip to Florida was canceled; so, no very special appearance. Now there were four successive years to remember!

How ‘bout some Lessons Learned during the last the last four plus decades, as a young Marine officer, lumberyard supervisor, property manager, business entrepreneur, management consultant, newsletter writer, book author and MHIndustry publisher.

• KISS principle = Keep It Simple Stupid – or Sweetheart, depending on audience.
• 6 – P Rule of Planning: ‘Proper Prior Planning Prevents Poor Performance!’
• SMEAC. Military abbreviation for the management process: Situation, Mission, Execution, Administration & Logistics, Command & Communication.
• ‘Don’t expect anything of your men (Marines) you wouldn’t do yourself!’
• Use of homemade, laminated ‘wallet cards’ containing vital info & procedures
• ‘Praise in pubic, criticize in private; &, Ask, don’t tell, & keep ask out of trouble!’
• ‘Be firm but fair!’ in work environments, add ‘diplomatically’ in property mgmt’
• ‘No one really cares whether you succeed or fail in business, except you and your spouse or significant other!’
• Need to ‘hustle’ (new business) is challenging, fun, frustrating & rewarding; as ‘coasting’ allows time to reenergize & enjoy the fruit of one’s labors – for awhile.
• Definition of profit? The reward for taking risks!
• Maximum income & minimum expenses = best return of & on one’s investment!

For many more personal and business truisms, along with reproductions of several copyrighted Management Wisdom wallet cards, read Chapbook of Business & Management Wisdom, PMN Publishing, 2008. Don’t miss the chapter titled: ‘Scintillatingly Salient – but – Salacious Secrets to Business Management Consulting Success….’ Available via MHIndustry HOTLINE: (877) MFD-HSNG or 633.4764.

II.

Now, that update re status of critical MHIndustry matters parsed in recent blog postings:

• ‘Time for a Radical Change at the Manufactured Housing Institute’ debuted 13 November 2011. Everyone in the MHBusiness knows national manufactured housing advocacy is anemic at best, given the perennial ‘He said’ – ‘She said’ Abbott & Costello politico – comedy routine, betwixt MHI & MHARR. Said Radical Change Proposal put ‘all things manufactured housing production & distribution’ under Danny Ghorbani, and ‘all things landlease community’ under George Allen, ‘all in one national advocacy body’! Response to date? Substantial email and telephonic support of the proposal (See end note # 1), but abject silence from all but one industry leader! However, this was expected! How so? Just this past week, a staffer at one of the national advocacy bodies commented, ‘Oh we don’t pay any attention to the manufactured housing industry press’, or words to that effect. Surprised? I’m not. The offhand comment simply underscores an ongoing shortcoming.

Anyway, the aforementioned Radical Change Proposal, given continued disregard, simply clears the way for an even more far – reaching alternative, that will qualify, if and when made public, as the largest of all paradigm shifts in the history of the manufactured housing industry and landlease community real estate asset class! One might even be wont to say, ‘This is really the only option remaining for this industry, so set in its’ ways, it refuses to consider modifying its’ business model to remain viable and survive!’ Keep reading here….

• The MHInitiative® successor to the National State of the Asset Class (‘NSAC’) series of caucuses originating in 2008 and 2009. Not much to be said here now, about the tentative national meeting for manufactured housing industry businessmen and women owners, scheduled on or about 27 February 2012, ‘somewhere in the South.’ The original list of 100 MHInitiative® supporters continues to grow in number each week. It’s so obvious grassroots stakeholders, from all segments of the manufactured housing industry and landlease community real estate asset class are ‘more than anxious’ to caucus at a national brainstorming session among peers with ‘the most to lose, to identify one or more solutions to our industry and asset class’ present state of malaise. Are YOU one of these? If so, let me know via gfa7156@aol.com

• MHI’s ‘water sprinkler’ proposal to the Manufactured Housing Consensus Committee or MHCC. Despite exposes in this online media outreach, and reader communiqués to MHIndustry leaders; to the best of my knowledge, there’re
no regrets, no recall, no nothing, afoot to modify the proposal, that in the minds of many LLCommunity owners, potentially puts our properties and livelihoods at risk of increased liability and decreased marketability, when water sprinkler – equipped homes seek installation on vacant rental homesites in our LLCommunities oft served by water lines not designed, and perhaps incapable of servicing greater water pressure and volume requirements pursuant to fire suppression. This is likely the last word you’ll read here about the matter. It’s
now in your hands, if you own and or manage landlease communities.

• Demise of manufactured housing (vehicle) titles & possible supplanting with recorded (realty – type) deeds, may well result in higher homeowner taxes for landlease community residents, beginning in Illinois, Missouri, Ohio, Alabama, Mississippi, Virginia, and Maryland – the initial seven states targeted by the Uniform Law Commission. More information as details become available.

End Note. *1. These unsolicited quotes from blog floggers (readers) at this website:

“WOW! Good Stuff. I agree. This is a marvelous idea. Danny Ghorbani is the right man! You would be great as director of all (landlease) community owner affairs (except for your slanted view of MHRetailers). I would vote for and support this Radical Change (at the Manufactured Housing Institute).”

“As an active participant in our (manufactured housing) industry for almost 30 years, including membership and board and officer positions in the __________Manufactured Housing Association, and membership in MHI and its’ NCC, I feel the proposal by George Allen to merge MHI and MHARR should be given serious consideration. Mr. Allen’s experience with landlease communities would very nicely complement Mr. Ghorbani’s experience with manufacturers and national regulatory issues. I would be glad to elaborate on this endorsement if you like.”

***

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