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

I.

The Recent & Distinct ‘Stirring’ Sensed by, & among, some HUD Code Housing Manufacturers, independent ‘street’ MHRetailers, even Landlease
Community Owners/operators. Is it our industry’s…

Life Being Renewed or a Death Rattle?

“Landlease communities are HOT!” opined the Business Development Manager (‘BDM’) working for one of the 21st Century Triple ‘C’ Firms, shipping specially – designed Community Series Homes (‘CSH’), for marketing to – and placement in, landlease communities nationwide. When I asked, “How so?”, his response was, half the shipments of new HUD Code homes, from most of his firm’s plants, are now CSH homes headed for vacant rental homesites within landlease (nee manufactured home) communities.

Phone calls to other BDMs, working for Clayton Homes, Cavco, Inc., and Champion – Yes, those are our industry’s 21st Century Triple ‘C’ Firms, confirmed the ‘stirring’ described in the opening paragraph. So much so, another indicator is the large number of HUD Code home manufacturers, nearly a dozen, attending this year’s International Networking Roundtable in San Antonio, TX., (14-16 September). That’s far more than have attended any previous Roundtable during the past 20 years! Even ‘park model RV’ manufacturers have registered for this annual opportunity to meet, market to, and sell their product lines into LLCommunities. But know who’s missing? Unfortunatly, the small to mid – sized, regional HUD Code home manufacturers! And that’s a shame, because there’s plenty of business to be had from the 200+/- gathered LLCommunity owners/operators.

If YOU don’t know about CSH homes, be present at the Roundtable this week, when Don Westphal, freelance consultant and CSH specialist, covers that subject in depth. And David Gorin, RV consultant, will explore the increased interest LLCommunity folk have in RV Parks and ‘park model RVs’. To participate, phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. And while you’re on the phone, ask for a ‘free’ list of the more than two dozen BDMs marketing new HUD Code CSH homes to LLCommunity owners/operators.

Independent ‘street’ MHRetailers recently rediscovered a valuable resource and voice in Rainmaker of Davenport, Iowa. While long a consultancy to this key segment of the manufactured housing industry, it’s only become apparent recently (More of that ‘stirring’ feeling.) how surviving home sales professionals are literally chomping at the bit, for a credible opportunity to refresh personal selling skills, improve their online marketing expertise, and frankly, to ‘Get Motivated to Sell – again!’ So, to address those needs, Rainmaker has planned a National Summit for independent ‘street’ MHRetailers and in – landlease community sales center operators, to occur in mid – November in Chicago. For more information, contact Bill and Chad Carr via (800) 336-0339. I certainly plan to participate and learn as well.

And, for the first time in decades, independent ‘street’ MHRetailers have an excellent e-book available ‘just for them’, describing HOW TO ‘drive more qualified traffic to ones’ home center and increase sales opportunities’! This e-book, titled Pillars of Promotion is based on firsthand Lessons Learned by Chris Nicely, former marketing executive with Clayton Homes. Do YOU have a copy yet? If not, phone (865) 385-9675 or pick up order literature at the aforementioned Roundtable this week.

Then there’re the landlease community owners/operators. No other segment of the HUD Code manufactured housing industry has experienced such extreme dichotomy between the ‘Haves & Have Nots’, where occupied rental homesites are concerned! An increasing number of mid to large – size properties, oft saddled with too high rents and low occupancy, have moved – and are continuing to move, from forbearance agreements, pursuant to CMBS (commercial mortgage – backed securities) loans-gone-bad during the past decade, into active foreclosure and REO (real estate owned) status. As in the late 1970s and 1980s, it’ll take a few years – maybe a decade, if reasonable, independent third party chattel financing doesn’t return soon, for these troubled assets to be remarketed, acquired, and returned to solvency!

In the meantime, ‘the other half’ this dichotomy – and actually a far greater number within the unique property type, especially where/when owned by veteran realty investors, are ‘doing just fine, thank you’, as they market, sell, and frequently self – finance, via one methodology or another, new and resale home transactions on – site. And it’s these financially healthy owners/operators, frequently enjoying excess cash flow by dint of having paid down or off mortgages, who oft shoulder additional management risk, and now buy new HUD Code homes at a discount, to fill vacant rental homesites, since the repo market has all but dried up, and there’s still no viable secondary market for the ‘sale and purchase’ of quality resale homes.

Who to talk to about the various self – finance methodologies in vogue these days? Again, be at this week’s Roundtable! Ken Rishel of Rishel Consulting will explain, one – on – one, the ins and outs of ‘captive finance’. Dick Ernst of CU Factory – built Housing will happily describe his firm’s chattel loan servicing capabilities. Matt Kerlin of 21st Mortgage Corporation will also be on hand, to walk you through their new program. And LLCommunity owner/operator Spencer Roane will share his firsthand experience and success, using a carefully crafted lease – option program. And if ‘rentals’ on – site are of interest, request the free reprint titled, ‘To Rent or Not to Rent?’ when you phone the above – listed MHIndustry HOTLINE number. And rumor has it, a freelance consultant (not me) may soon go on the road, carrying the ‘ways to self – finance’ message to state manufactured housing associations and portfolio owners/operators desiring such knowledge. If this interests you, let me know. And, by the way, last year’s ‘bestseller’, the Manufactured Housing $$$ Primer is still available, for $29.95 (postpaid) from PMN Publishing. Again, just phone the toll free HOTLINE.

OK, if by now, you don’t see where this industry wide ‘stirring’ is going, you’ve gotta be tone deaf. Sure, new home shipments continue to drop this year; but know what? Almost everyone described in the previous paragraphs is now ‘pulling out all the stops’ to stimulate new and resale home sales business, filling previously vacant rental homesites, and doing their part to keep the manufactured housing industry alive. How ‘bout YOU? What are YOU doing as your part in this timely, critical, ‘stirring’ scenario?

My participation in all this’? First and foremost, during three decades as manufactured housing’s observer cum blogger, landlease community newsletters publisher, and management consultant at large, I’ve long argued for our industry’s return to ’truly affordable housing’ for the American homebuyer – something, sadly, that hasn’t happened yet. No other type housing, in or out of the factory – built milieu, can do as good a job at ‘being affordable’, than HUD Code manufactured housing, when we set our minds, production, and marketing to do so! Second; PMN Publishing continues to make the handy, do – it – yourself, oddly – named ‘Ah Ha! & Uh Oh! new or resale home sales price & mortgage worksheet’ available FREE for the asking. For the first time in the history of manufactured housing, independent ‘street’ MHRetailers and sales centers within LLCommunities, can easily and accurately calculate ‘just how much home buying customer can truly afford’, based on individual or household Annual Gross Income or AGI, and if opening a sales center in a new local housing market, per postal zip code, know what price range homes will sell, based on the prevailing Area Median Income or AMI. For your FREE copy of this revolutionary form, use HOTLINE number cited earlier.

Death Rattle? I think not. I made that mistake – thinking such, way back in 1979, shortly after entering this business. Five years later, I was had of my own firm, and had cleared $2 million with my partners, on our first landlease community transaction. I’ve not looked back, or negatively at the industry and asset class since; neither should you! Come on, ‘Let’s get a – stirring together!’

II.

And don’t forget! This week’s Networking Roundtable is but the first stage of that Three Step Process, described in this industry blog more than a month ago, to ascertain ‘How to Save Our Industry!’ At the very least, and at this week’s event, we’ll see the ‘stirring’ anticipated national plans for the future of landlease community research and resources! Step II of the Process? Manufactured Housing Institute’s (‘MHI’) annual meeting in Phoenix, AZ., 2 – 4 October. Have YOU perused the meeting agenda? Will YOU be present to ensure our industry’s elected and salaried leaders keep the MHIndustry train on track to increased production and renewed profitability? And Step III of the process? If necessary, a National State of the Asset Class (‘NSAC’) caucus III during early 2012.

***
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

What’s in Your Career Remembrance File?

I.

“You just don’t take a mobile home and stick it in your pocket like you would a diamond bracelet,” says Peggy Vaughn, manager of Hickory Lake Mobile Village, in a news story titled: ‘Huge trailer’s not at home after being taken from (sales) lot.’

“In the wee hours Friday, a 16-foot-by-70 foot Fleetwood became a very mobile home when thieves hauled it off a retail lot near I-65 in Scott County. Friday’s theft of the pale-pink and white abode occurred with nary a sound, at least none loud enough to wake the neighbors.” Marcella Fleming, staff writer for the Indianapolis Star.

***

Following, are some choice pickins’ from my career remembrance file, mostly property management, manufactured housing, and landlease community related.

***

Let’s begin with this ‘How NOT to enforce Rules & Regulations, and encourage good resident relations’ gem. It was a posted ‘Notice to Residents’ I plucked from the laundry room bulletin board, in the old Eastwood Mobile Home Park, circa 1984.

ATTENTION: ‘All Park Resident Who Improperly Dispose of Their Trash or Use Our Dumpsters for Their Own Private Dumping Grounds.’

“You people are filthy, disgusting slobs who walk around without a single ounce of common – sense or a brain in your heads. Since I have been associated with this park, I have brought in 26 homeowners, doubled the rental occupancy, removed four long – bed dumpsters of trash, and have changed the clientele in our ‘rentals’ from scums and bums to decent, hard – working people.

It’s pretty evident I care about the environment you people live in, why the hell don’t you? These dumpsters are to be used for your trash only! Not old water heaters, washers and dryers, sheds, swing – sets, automobile parts, etc.

Any trash I find not disposed of properly, I will no longer give warnings, I will find (sic) you $25.00 per bag. Tell your children, tell your spouse, and tell your neighbors. If you see anyone disobeying (sic), tell me!” The ‘Park’ Manager

This travesty occurred before professional property management found it’s way into, what we today think of as, landlease communities. Hopefully we won’t see this sort of bullying ever again. And to that end, here’s the timely and helpful ‘Six Rs’ mnemonic device for Cultivating Good – to – Great Resident Relations! Good Resident Relations = More Resident Referrals = Great Resident Retention!*1

***

Don’t get me started relating memorable Mystery Shopping experiences, and the important Lessons Learned from them, unless you’ve got lotsa time on your hands.

Like the day I walked into a local apartment community’s Information Center. There, taped on the inside of a closet door that should have been closed, was a large poster featuring a big sleeping bear, with this caption underneath: JUST WAKE ME IN TIME FOR THE WEEKEND! Surefire commentary on the work ethic of that office. Hmm. Perhaps that’s why we were hired to ‘shop’ the leasing staff in the first place. Lesson? When was the last time YOU looked inside – and outside the closet doors in your Information Center(s)? Bet you’ll find some unsettling surprises. Read on….

At an independent ‘street’ MHRetailer’s sales center, a few years ago, I came across yet another large poster, this one picturing a life – sized hangman’s noose, along with this motivating caption: A REMNDER ABOUT HOW IMPORTANT SALES ARE AROUND HERE! Well, I suppose IF the message ‘works’, the poster is worth keeping around – but certainly NOT where customers can see it. When do ‘high pressure sales techniques’ ever equate to long term satisfied home buying customers? Hardly ever!

And how ‘bout this ‘unofficial’ notice I removed from the bulletin board in yet another landlease community Information Center: ‘NOTICE: This Department Requires No Physical Fitness Program! Everyone gets enough exercise jumping to conclusions, Flying off the handle, Running down the boss, Knifing friends in the back, Dodging responsibility, and Pushing their luck!’ Yes, that really happened – the poster removal, that is. So again, what’s on the bulletin board in your Information Center(s)? Go check!

***

Like to receive holiday and birthday cards? Anyone who subscribes to the Allen Letter professional journal knows, every year we rank the ‘manufactured housing – themed Christmas cards’ we receive in December, then feature the winning card in the January issue of the newsletter. And we’ve received some doozies over the years…like one that pictured ‘half a doublewide’ being pulled down the highway, with the center (mating) side wide open, displaying holiday decorations and gifts. And another one, a singlesection manufactured home being towed through the sky by Santa’s reindeer. Cute.

Well, here’s a true Christmas card story you’ve not heard before. Remember colorful, outspoken, iconic, St. Charles, MO., MHRetailer Bob Bross? I’ve long counted him as one of my best friends in the MHBusiness! Well, he’s retired now. But in his heyday, and he certainly had a few (heydays, that is), he was known to save holiday greeting cards received one year, then recycle them the next year. How so? By crossing out the original sender’s name inside the saved cards, then affixing his firm’s address label above the crossed – out signature. Then he’d enclose the recycled card within a tri – folded sheet of his company’s letterhead stationery, bearing this message: “PLEASE DON’T FUSS ABOUT THE ENCLOSED CARD. CONSIDERING THE LOUSY BUSINESS CIRCUMSTANCES OF THE PAST YEAR, YOU’RE LUCKY TO GET THIS ONE!” Seriously. That’s vintage Bob Bross.

One year, Bob added this message to the recycled cards: “Being in the manufactured housing industry brings to mind a friend, who spent years of effort and thousands of dollars to cure his bad breath problem, only to find out that no one liked him anyway!”

Someday, ask me to share Bob’s collection of eight ‘After the Party’ standardized excuses and explanations, containing blank spaces where sender (offender) inserts offended parties’ names, e.g. ‘Dear _____________________. I regret telling the firemen it was you who turned in the false alarm. But of course I had no way of knowing they would be such bad sports about it. Those fire hoses sure have a lot of pressure, don’t they? And the water was so cold!’ (Signed) Your friend ____________________.

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Speaking of (studio) cards. The best one ever, for enticing apartment renters to consider buying new manufactured homes to move into a landlease community, is this one, used ‘for years’ by Country Village.

Top of the front panel features caricature heads of a happy young couple, along with a similar sketch at the bottom, but of a top – hatted villain dressed in black. The verse in between the caricatures goes like this:

‘There was a young couple named Trent, who spent all their money on RENT.
They’d scrimp and they’d save, but their landlord (the knave), walked off with the Trent’s LAST RED CENT!’

Next card panel, inside, again shows the same happy young couple, and reads: ‘The Moral is: Rent is Money Spent. (Don’t be like the Trents). Invest in a Home that You OWN…

And the final, inside double panel of the colorful studio card, features an artist’s rendering of the property’s clubhouse, followed by a list of the property’s amenities, and a sketch map showing how to find one’s way to Country Village. An idea worth trying? I certainly think so….

***

15 years ago, Ed Zeman, of Zeman MHC (LLCommunity portfolio owner/operator) in Chicago, crafted this (slightly edited) list of ‘Top 10 Things (an investor) Hears From a Landlease Community Owner During Negotiations to Buy Their Property’:

• All the lot rent is always in by the first of the month, no one is ever late here!

• My rent (rate) is way under market, so there’s plenty of room for rent increases.

• This local housing market is really hot. Those 25 vacant lots could be filled in no time, and you should sell 50 homes next year. This is best community in the area!

• Rental mobile homes are a great source of revenue. We never have a problem with them, and all our residents are carefully screened!

• What’s the big deal about my underground oil tanks and lines, the wetlands next door, asbestos in my clubhouse, and the flood plain and landfill this community was built on? No one’s ever said anything about that before now.

• My community is worth more. This place can be a real money – maker, and those REITs are banging on my door wanting to buy it!

• This is the best well water anywhere, and the EPA never has a problem with our sewage treatment plant. In fact, the plant operates so good you could drink the discharged effluent.

• There are no maintenance expenses, since my son and I do everything!

• The 50 acres next door is not zoned for manufactured homes, but it could easily be rezoned. I have a verbal OK about that.

• (After six months of discussion) I think I’ll wait until the capital gains tax rate is reduced.

***

So, what’s in your career remembrance file? An inquiring blog readership would like to know. Take a look and send me some gems to share in the future….
II.

‘Biggest & Best Ever!’

What do 40 Texans, four state manufactured housing association executives, two dozen women executives, all our landlease community asset class’ REITs, and best of the privately – owned portfolio owners/operators, as well as a Cavco, Inc., Community Series Home (‘CSH’) have in common? They’ll be at the 20th annual International Networking Roundtable in San Antonio, TX., when it kicks off Wednesday afternoon, at 4PM, with a Marcus & Millichap ‘State of the Landlease Community Real Estate Asset Class’ presentation, followed by showcasing dozens of these properties ‘for sale’! And then ‘the fun’- the superb education, interpersonal networking, and deal – making begins….

Yes, that’s where things stand two weeks before this annual seminal venue begins. More HUD Code housing manufacturers (e.g. Clayton, Champion, Cavco, Palm Harbor, Fleetwood, Athens Park, and others) will be in attendance than ever before! Why? In the words of one manufacturer’s Business Development Manager (‘BDM’), when thus queried: “Communities are back. Communities are hot!” And that they are.

So, if you’re reading this blog, and own one or more landlease communities, and either sell new and used homes on – site, or are thinking of doing so, YOU need to be at the Networking Roundtable to meet these home manufacturers – and much much more! Need capital to acquire and or refinance landlease communities and homes? All the major realty – secured and chattel (personal property) mortgage lenders and brokers will be present this year.

See brochure attached to the BEBA (Blast Email Blog Alert) accompanying this week’s blog posting, or phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. But I need to warn you. Our max number of registrants is 200, and we were at 175 on the first of September. So, don’t be left out, register today!

III.

Last week, this blog announced the release of Chris Nicely’s new online book, describing HOW TO effectively market and sell HUD Code manufactured homes at independent ‘street’ MHRetail salescenter, and on – site in landlease communities. An
e-book, it’s titled Pillars of Promotion, and contains ‘six proven tactics that drive more qualified traffic, and increase (home) sales opportunities!’ Well, a bunch of blog floggers (readers) responded, buying copies. Did YOU? Price is $49.95; BUT he’ll sell it to you for less, if you’re a dues – paying member of any state or national manufactured housing trade association. To order, phone (865) 385-9675. Tell him ‘George sent me!’ Thanks.

IV.

This blog was the first national MHTrade news media to provide preliminary details about the upcoming National Summit for independent ‘street’ MHRetailers & in – landlease community home sales center operators. The event date is 13 – 15 November, and location will be in the Chicago area. I met with the organizers, Chad and Bill Carr, of Rainmaker Consulting, for three hours last week, and gotta say, ‘I came away impressed’ with what they plan to do to ‘motivate, educate, & rejuvenate MHRetailers’ who’ll be gathering from throughout the U.S. and Canada. At the very least, if you market, sell, and or self – finance new and resale manufactured homes these days, get your name on the list to receive additional information when it’s available. Call (800) 336-0339. Think about it. Attend this mid – November National Summit, and leave with new, exciting, proven practices; plan implementation during December; then, kick off the New Year 2012, with a ‘higher altitude attitude’ and a new game (business) plan designed to increase and sustain your new (and resale) home sales volume during the months ahead!

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End Note.

1. For more on ’mnemonic devices’, read George Allen’s Collection of Figurative Language & Figures of Speech, PMN Publishing, Franklin, IN., 2011. Available for $19.95 postpaid, by phoning (317) 346-7156. A handy, and at times humorous, reference tool for any amateur writer or journalist in your firm or family, or among your friends.

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

Independent Street MHRetailers & In – Landlease Community Home Sales

“Do YOU view them as ‘oil & water siblings, separated at birth – never the twain to meet’? Or as ‘one in the same, cut from the same cloth’, but NOW maybe ripe for sharing knowledge that sells homes, while eschewing nefarious ‘tricks of the trailer trade’? And finally, are they willing to embrace contemporary housing marketing and sales techniques, including the establishment of a functioning and accountable secondary manufactured housing resale market?” Edited introduction to last weeks blog posting.

I.

The above subtitle questions were last week’s BEBA (Blast Email Blog Alert) reader provocateur. And did we ever get responses! Here’s an outline based on the observations and commentary YOU sent us; then fleshed out in paragraphs to follow:

Independent street MHRetailers, ‘pro & con’ and recent (not past) trend(s)

In – landlease communities, are new and resale home sales & self – finance necessary evils to fill vacant rental homesites, and or a practical means of ‘adding value’, while complicating one’s disposition strategy and property’s refinance potential?

Consequences of increased federal and state financial regulatory control and supervision of MHRetailers & landlease community owners/operators engaged in self – finance of new and resale home sales transactions.

Still awaiting on a secondary market for resale homes!

Where to go from here, relative to manufactured housing marketing and sales training, communication, resources, and more?

II

Independent street MHRetailers, ‘pro & con’ and recent (not past) trend(s)

While not a documentable fact, many MHIndustry aficionados estimate we’ve lost 9/10ths of the independent street MHRetailers in business during manufactured housing’s most recent, albeit brief heyday, culminating in 1998 with 372,843 new HUD Code home shipments in the U.S. Why? Take your pick of reasons: chasing market share (Think ‘land & home packages’) head to head with stick builders; loss of independent third party chattel (personal property) financing for our homes; and, wholesale acquisition of independent salescenters by cash flush (at the time) HUD Code manufacturers (i.e. Converted to ‘company stores’) During the same period of time, per Danny Ghorbani of the MHARR, we’ve also seen 300 of 400 housing factories close.

PRO. Independent street MHRetailers “…are on the front line of battling business problems every day. They create all the jobs in this industry – for the manufacturers, lenders, suppliers and associations – not the other way around. (Some) have survived these last three years of financial turmoil, with most having been through several downturns over the last 40 years or more.” CC

CON. “Many, if not most, retailers (street dealers) are out of business because they ‘killed the goose that was laying the golden egg’ with their selfish, short – sighted financing shenanigans (i.e. down payment games, fraudulent credit applications and income – reporting antics) or because they couldn’t operate unless they locked the customer in their office to pressure them and keep them from buying elsewhere. What are LLCommunity owners to learn from people like that?” And “Even when lenders caught them, they really just got a slap on the wrist and a warning. Everyone was so concerned about volume and profit, no one thought about the long term consequences, which we are now suffering.” Latter quote (edited) per Jim Carmichael.

TREND. Most landlease community owners/operators, particularly portfolio ones, are convinced MHRetailers have forgotten how to market and sell new manufactured homes into their properties. As a result, the majority of larger LLCommunities, particularly property portfolio owners/operators, now routinely sell and often self – finance new and resale homes on – site. In the meantime, this question begs answer: Will independent street MHRetailers ever return in significant number? Most pundits say ‘Not until independent third party chattel finance returns in volume.’ Others just say ‘No.’ How ‘bout you?

III.

In – landlease communities, are new and resale home sales & self – finance methodologies necessary evils to fill vacant rental homesites, and or a practical means of ‘adding value’, while complicating one’s disposition strategy, and a property’s refinance potential?

PRO. Real estate broker Jim Carmichael penned the following lines a few years ago. Landlease community owners/operators “…must become dealers if they want to increase and control their occupancy levels. Just like a street retailer with a couple park models, sales people and service operations. The (business) model is that of a residential developer when they are building a new subdivision. The good news is you control tenant and housing quality. The bad news is the asset totally changes.”

CON. Hmm. “How does this change the asset class? Once you have a successful dealership in the community and vacancy is back to less than 5%, you decide to sell (the property). Instead of ‘many investors’ driving prices (up), there will only be a few players who can take on the complicated operations now part of the asset. The community (ground leases) will have a value, and the home sales (and finance) business(es), as well as ‘rental units’, all have different values. They are also totally interdependent on each other. So, potentially, a limited pool of buyers will dictate the market, thereby (maybe) driving prices down.”

TRENDS. For the majority of landlease communities (85% of the national inventory containing fewer than 100 rental homesites apiece) it’s ‘business as usual’, with the typical Mom & Pop owner/operator selling an occasional home, maybe carrying a personal note for the buyer, even renting a few units (apartments) from time to time. However, property portfolio owners/operators were quick to realize their very profitability, even their future, depended on their ability to effectively sell, and often self – finance new and resale mobile and manufactured homes, park model RVs, even modular homes on – site to fill rental homesites vacated by more than 250,000+/- repossessed homes circa year 2000. And by coincidence, it’s this same quarter million figure that’s estimated to be the number of vacant rental homesites in landlease communities in the U.S. today! So there’s a great deal of work to be done.

Result of all this? Today, according to past two years of ALLEN REPORTS, 500+/- known portfolio owners/operators landlease communities were carrying $3 ½ billion in chattel ‘paper’ by the end of 2009, and $5.2 billion by the end of 2010. What’s the total for this 2011? Read the 23rd annual ALLEN REPORT in January 2012, when it’s published as a Signature Series Resource Document enclosed with the Allen Letter professional journal. To ensure you receive a copy of that dynamic duo, phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

In the midst of the above – described, on – site sales and self – finance reality, landlease community owners/operators took control of their future, by convening National State of the Asset Class (‘NSAC’) caucuses in 2008 in Tampa, FL. (Where they agreed on Five Action Areas to guide future business efforts), and 2009 in Elkhart, IN., where they met, for the first time in manufactured housing history, with their home fabrication counterparts. There they agreed to new home design features, which led to the branding of Community Series Homes (in contrast with the Developer Series Homes of the late 1990s), marketed and sold by Business Development Managers (‘BDM’), a new job title for the manufacturing segment of the industry. For a description of the typical CSH product, contact Don Westphal @ (248) 651-5518.

IV.

Consequences of increased federal and state financial regulatory control and supervision of MHRetailers and landlease community owners/operators engaged in self – finance of new and resale home sales transactions

In the first instance, since there are far fewer independent street MHRetailers today than a decade ago; those surviving, some even thriving, have learned to adjust to increased financial regulatory overview – or, consider themselves ‘far enough below the radar’ of state and federal review to worry much about it.

Portfolio owners/operators of landlease communities however, are another story altogether. They have far more to lose, monetarily, if caught in violation of S.A.F.E. Act provisions in their state, or regulations pursuant to the Dodd – Frank bill. It’s been interesting to watch those actively engaged in self – finance on – site, segue from one methodology to another, during the past several years. Many started out using the classic ‘buy here – pay here’ approach, then shifted some of their mortgage servicing responsibility to others via ‘captive finance’. In the meantime, others ‘seeing the handwriting on the wall’ opted to ‘return to the 1970s business model’ and lease manufactured homes, as apartment units, on – site; and yet others have become firm believers in carefully worded and executed lease – options.

Is there a clear roadmap out there, for navigating this constantly changing financial regulatory scene? No. For example, read this rambling but illustrative passage from a veteran LLCommunity owner: “…the S.A.F.E. Act has put a great deal on us to do things right. Just because someone is doing ‘something’, doesn’t mean they’re doing it right, or others should copy what they’re doing. I’ve heard community owners say they continue to use Retail Installment Contracts or Promissory Notes to seller – finance manufactured homes, despite what the S.A.F.E. Act says, and assume they either won’t get caught or will only get their hand slapped if they do. I’ve heard others say they use lease – option contracts which provide for the tenant (buyer) to buy the manufactured home for $1.00 at the end of the lease – despite IRS ruling that the sales price must be approximately equal to the Fair Market Value of the asset at that time.” SR Go figure…

V.

Still awaiting a secondary market for resale homes!

If memory serves me right, the Manufactured Housing Institute (‘MHI’), under the leadership of Barry McCabe, before he retired, took a good hard look at this matter, at their annual meeting in New Orleans, Louisiana, maybe five or more years ago. Well, we’re still waiting for a secondary market for resale homes to materialize, to take shape. Because, until that happens, we have no efficient, effective, intrastate and interstate home value preservation means of freeing up homeowner equity for them to buy their next new manufactured home from us!

What comprises a secondary market for resale homes? Well, part of the national marketing piece is already in place via MHVillage. Most landlease community owners/operators, as well as homeowner/site lessees, already are either somewhat familiar with the system, or use it regularly. Visit www.mhvillage.com or (800) 397-2158. But that’s but only the visible present day tip of a figurative iceberg that needs to materialize and float our way.

Multilist service. Though discriminatory denial of access to Realtor® mulitlist services has softened since a recent U.S. Supreme Court ruling, National Association of Realtors (‘NAR’) affiliated state and local realty boards have not ‘flung open their doors’, welcoming manufactured housing listings, including those in landlease communities.

Valuation. As long as federal government GSEs (government – sponsored enterprises), independent third party chattel lenders, and lending institutions continue to opt for ‘book (replacement) values’, in preference to estimating home values ascertained via market ‘comparable sales’, our unique, affordable, manufactured housing product, in and outside landlease communities, will continue to trend toward value depreciation, rather than appreciation or increase. Believe it.

Escrow closings. The sooner we treat our homebuyers/borrowers like folk buying/mortgaging site – built new and resale homes, the sooner HUD Code manufactured housing will be treated, across the board, like HOUSING per se.

Licensure. In most manufactured housing sales environments, this is a touchy subject. But it relates to the previous point. There’s little harm, rather a lot of positives, to educating ‘street’ and on – site sales staffs in the basics of real estate, along with state regulations. If YOU were a would – be manufactured housing purchaser, wouldn’t you feel a whole lot more confident meeting with and buying from a trained and licensed professional, rather than someone with less invested in your home buying experience?

VI.

Where to go from here, relative to manufactured housing marketing and sales training, communication, resources and more?

First; an attempt to answer the primary question posed in the subtitle of this week’s blog posting. Can we indeed bring independent street MHRetailers & in – landlease community home sales, as disparate but akin manufactured housing marketing and sales environments as they are, together to work as the much needed new team to effectively and fairly sell new and resale homes? I think so, if both sides are willing to learn ‘the good lessons’ from one another, even tips from housing ‘brethren’ outside factory – built housing circles. A couple cases, resources, and upcoming opportunities in point.

More than a decade ago, Hometown America recruited a top housing marketer from outside the HUD Code manufactured housing industry. He continues with the firm today, and is widely recognized as bringing conventional housing marketing and sales techniques to that firm, realizing unparalleled success along the way; methods now copied by other property portfolio owners/operators.

Note. If you’re a property portfolio owner/operator reading this blog posting, and wonder why I’m not citing your firm as an example here, it’s because I need to sit in on some of your sales training sessions, then Mystery Shop your landlease communities, to ensure you’re not only ‘talking the (sales) talk’, but ‘walking the (sales) talk’ as well. GFA @ (317) 346-7156. Professional Mystery Shopping of LLCommunities = $500.00 each.

Chris Nicely, longtime marketing executive with Clayton Homes, now an independent consultant, has released the first How To book in decades, describing means to effectively market and sell HUD Code manufactured homes in ‘street’ retail salescenters and on – site in landlease communities! It’s an e-book, titled Pillars of Promotion. In it Nicely describes “six proven tactics that will drive more qualified traffic and increase sales opportunities.” Price is $49.95, actually $10.00 less, if you’re a dues – paying member of any state or national manufactured housing trade association. To order, phone (865) 385-9675 or chrisnicely1@gmail.com

Another relatively new, but now widely used, tool for individuals marketing and selling new and resale homes of any type, is the ‘Ah Ha! & Uh Oh!’ Formulae. This single page worksheet is used by MHRetailers and LLCommunity owners/operators, to estimate maximum recommended ‘affordable’ & ‘risky’ purchase prices – as well as max mortgage amounts – for new and resale, privately – owned homes of any type, whether sited on realty owned fee simple with said home, or on a leased rental homesite within a landlease community! Seriously. Such a practical computational tool was not available to home manufacturers, MHRetailers, and landlease community salescenters before 2008. The procedure begins with either a prospective homebuyer or household’s Annual Gross Income (‘AGI’), or local housing market’s Area Median Income (‘AMI’) – latter ascertained by inputting one’s local housing market’s postal zip code at zipskinny.com For a FREE sample of this revolutionary form, phone the above – referenced MHIndustry HOTLINE today. Why is this form revolutionary? Using it, one never again has to rely on the advice of a manufactured housing factory marketing representative to suggest what home price points will sell in one’s present or intended local housing market; and, no more will salespersons accidentally ‘sell more house than their customer can afford’, based on their Annual Gross Income, or the local housing market’s Area Median Income.

Finally; for those reading this, who’re truly excited about the possibility of ushering in a new era of independent street MHRetailer & in – landlease community home sales cooperation, objectivity and professionalism, there’s a helpful and timely ‘bright light on the horizon’! A National Summit is being planned for 13 – 15 November, in Chicago, where top – notch, successful independent street MHRetailers and in – landlease community home sales pros, will be sharing their ‘insider secrets’ to sustaining home sales and maintaining profits during the past decade. The only way you’re going to get off ‘dead center’, to rejuvenate your MHRetail sales business model, whether street – oriented or in – community, is to network with, and learn from, marketing and sales pros and peers willing to share and discuss ‘what works’! Want more information on this first – ever national summit meeting opportunity? Contact Bill or Chad Carr of Rainmaker Consulting at (800) 336-0339. I plan to be present, how ‘bout you?

***

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

Apartment Industry ‘Reinvents the Wheel’ of Good Fortune!

As ‘micro (apartment) units’ grab multifamily trade press news headlines, ‘park model RVs’, a.k.a. Accessory Dwelling Units (‘ADUs’) & ‘Granny Flats’ sit on the sideline waiting to be discovered by homebuyers & renters!

I.

Multifamily Executive magazine, in its’ August 2011 issue, ran an article titled, ‘How Low Can You Go?’, and subtitled: ‘With sustainability and affordability on the brain, multifamily developers are pushing (design) boundaries with radical new ideas in micro – unit construction’. P.34.

What’s a micro unit? Redefines ‘efficiency’ in efficiency apartments, where “…the loft – inspired, one – and two – bedroom units range in size from 270 to 425 square feet, complete with a kitchen and bath.” (&) “…two – bathroom (sic) apartment floor plans at a diminutive 764 square feet” in size.

But STOP! Don’t those descriptions also describe factory – built housing’s ‘park model RV’ product line, where loft – inspired, one bedroom units range in size from 300 to 375 square feet, complete with kitchenette and bath, (&) two bedroom units up to 400 square feet in size, complete with kitchen and bath? As an additional point of apt reference, the smallest singlesection HUD Code manufactured home, shipped by Cavco Industries, Inc., is only 500 square feet in size! Talk about ‘reinventing the wheel’.

Impetus for micro units? According to Daniel Gehman, a principal with California – based architecture and design firm TCA, “…micro units could see a renaissance in the rental market as construction activity heats up and developers look to pull yield out of ever – decreasing urban infill acreages.” Read ‘high density lifestyle’.

Hmm. Here’s the high density lifestyle tipping point between micro (apartment) units and park model RVs. Condo owners and apartment renters are forced to share halls, walls, floors, ceilings, and ambient noise with neighbors, in a bee – in – a – honeycomb existence; OR, as homeowner and lessee, enjoy freedom from neighbor proximity and intrusion, enjoy outdoor scenery through windows on all four sides of their home, and enjoy two means of egress, not just one!

Micro unit design goal? According to Michael Ytterberg, principal of Pennsylvania – based BLT Architects, “…amenities are becoming so critically important: The reality is everyone is being squeezed. But we certainly seem to be able to cram a hell of a lot into a small area that still feels commodious.” Really? One wonders if architect Michael has actually ever lived in a micro unit? If so, bet he’d soon prefer a similar – sized park model RV with two doors and windows on all four sides!

The generation factor. “…next – gen renters…embrace open – space design that allows for smaller kitchens without boxy cabinets and living spaces defined by function and furniture rather than the formality of walled – in boundaries, (and) such tiny living spaces A) are more affordable and B) create less carbon stress on the environment makes for an easier sell to prospects numbed by the McMansion culture….” And according to Rohit Arnold, a principal of the KTCY Group, “It’s suddenly cool again to have galley kitchens without any cabinets.” That might be true of Echo Boom renters, still single, but probably doesn’t ring true for retirees opting out of McMansions into park model RVs, with a car port and storage shed attached to one side and a screened – in porch on the other.

Interested in learning more about ‘park model RVs’, built to ANSI 119.5 code?
Phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764, and request a list of RV manufacturers. For that matter, if you’d like a ‘free’ list of Business Development Managers (BDM’), who work for HUD Code home manufacturers producing specially – designed Community Series Homes (‘CSH’) for landlease (nee manufactured housing) community in – fill, especially on functionally obsolete rental homesites, call the same number or (317) 346-7156, and request a BDM list. On the reverse side of the BDM list is a description and picture of CSH a home. Furthermore, if you’d like to see and inspect a CSH ‘display home’ firsthand, attend the 20th annual International Networking Roundtable, 14 – 16 September, at the Hyatt Regency Hill Country Resort & Spa, in San Antonio, TX.

II.

Speaking of the 20th annual International Networking Roundtable (‘INR’), registrations to date number many more than 100, in fact we’re closing in on our 200 person maximum! If you intend to participate this year, but haven’t registered, don’t delay. Complete the INR brochure attached to the BEBA (Blast Email Blog Alert) accompanying this blog posting, then email or fax (317/346-7156) it back to us TODAY.

What’s especially exciting is the number of landlease (nee manufactured home) community owners/operators who’ve signed – up that haven’t attended any previous Roundtable event. In addition, several state manufactured housing association executives, from across the U.S., have registered. Our hope is they’ll take some of the exciting and contemporary agenda topics back home with them, and plan New York Housing Association – like Super Symposiums during 2012, inviting some of our 20+ speakers to share their timely and oft critical messages with their members! For further information, phone (317) 346-7156.

*****
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.

‘Why I Belong!’, but Chafe All the Way to & from Association Meetings

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‘Then There Were Twelve’ in October Meeting Hell!

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‘Another New Book in Town, for Authors & Aspiring Writers!

I.

“When a large landlease community (portfolio) owner recently acquired one of our state’s trophy properties, the (on – site) manager was told their firm does not support state (manufactured housing) associations!” a state MHAssociation exec

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“Gosh! Should have taken a swipe at (MHI’s) exorbitant ($500) registration fee (for annual meeting in October). Makes the (September) Roundtable look like a bargain basement event ($395).” An NCC member.

So read a couple remarks, about manufactured housing trade associations, gleaned from recent emails from by colleagues ‘in the business’. It’s been awhile since I’ve addressed the multifaceted, and sometimes controversial, topic of manufactured housing trade association support and performance.

Let’s begin with an article I penned 12 years ago, titled ‘Why I Belong…’ During the past dozen years, it’s been reprinted and distributed frequently, especially by state trade associations endeavoring to build their membership rolls. If you’d like a FREE copy, simply phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

The gist of ‘Why I Belong…’ is nearly two dozen features (i.e. Good reasons to join and participate in your state trade association!); which are in turn grouped into four areas of emphasis: activities, information, publications, and benefits.

Activities. Depending on the socio – political climate in one’s state at the time, the scope and priority of association activities swings from lobbying, legislative, and regulatory – related matters of the serious sort, all the way to the best of informal, interpersonal networking available anywhere in one’s local and regional housing market. But non – joiners, like those alluded to in the above opening quote of this blog posting, can be extraordinarily difficult to recruit off the bench to become team players, when their abilities, views, and personal/corporate chemistry are unknown. This handicap is critical when top performance is needed in those occasional business games (conflicts) having potential negative impact on everyone in the same line of business. So, what to do about these folk? Go visit them on their turf, or when they ‘come to town’ to visit their local business. But don’t do it alone. A contact team should be comprised of like business owners, at least one of which should be an association board member; and possibly the association exec, with membership application in hand. It works. Been there; done that!

Information. I find this grouping inseparable from aforementioned ‘activities’ and not yet described ‘publications’ aspects of manufactured housing trade association existence. During the past three decades I’ve interacted with most state trade bodies, and have yet to find one that does an even marginal job researching and publishing contemporary data and statistics demonstrating the economic impact of manufactured housing and landlease (nee manufactured home) communities on their respective state’s economic well being. Such ‘information’ directs and focuses an association’s activities (e.g. pro or con particular legislative initiatives, and aids membership recruiting), IF said association publishes online and print publications worthy of reading by members. For example, in 1998, the IMHA/RVIC prepared and distributed Indiana’s Recreational Vehicle & Manufactured Housing Industries, ‘An $8 Billion Building Block for Indiana’s Economic Success’. At the time, this brief but attractive and chart – filled report was impressive and helpful. Has it been updated since? No. And how ‘bout landlease community ‘stats’? It’s taken 30 years to build the body of knowledge we use now. What happens to all this when I retire during the next year or two? (Come to the Roundtable next month to learn of one alternative. GFA)

Publications. OK, I’ll admit it. This is a favorite personal hobby horse. Sure, print publications are more difficult and expensive to prepare, publish and distribute, than online versions. However; how many state manufactured housing trade associations have really ‘taken the time & made the effort’ to determine how much of their decline in membership, these past ten years, can be attributed to reduced communication in this admittedly difficult economic business climate? I don’t have a definitive answer to that challenge, but wish I did. Of this I am certain though; among landlease communities, large properties and portfolios are well suited to use electronic media. But, among the 85 percent majority of LLCommunities nationwide (i.e. Those with fewer than 100 rental homesites apiece), these generally eschew the ever – changing technological business equipment bandwagon, characterized by hardware obsolescence and ever – evolving software, aggravated by personnel attrition. Does your state MHAssociation still regularly publish a print publication? If not, it should it? And frankly, the sale of ads in any such publication not only offsets printing and mailing costs, but can put extra dollars into the association treasury as well.

Benefits. This one is all over the spectrum. Some state manufactured housing associations negotiate group access to insurance programs, express shipping services, travel planning agencies, and much more. Other state associations, particularly the smaller ones, simply don’t go there. Should they? In my opinion, Yes – but only services clearly desired by members, and once contracted, well – coordinated with a fresh and aggressive new member recruiting program. Otherwise, benefit programs have a tendency to lie unused on the shelf, just like tired association and board members. And, when you get right down to it, the aforementioned activities, information, and publication aspects of trade association activity are benefits as well! Where else can one go to ‘talk shop’ with one’s peers about the finer points of the manufactured housing and landlease community business? And information. Our industry/asset class, in my opinion, does a generally lousy job providing timely information we can use, especially on the state level; and that what which we do have, is best shared with members and non – members alike, via a seriously depleted online and print trade press.

In summary, and on a personal note. My firm makes it a point to belong to state manufactured housing associations, and local chambers of commerce, wherever we have lively business interests; right now, in two states. This way we generally, though at times imperfectly and slowly, know ‘what’s going on’ where we do business. And, in the case of the local Chamber of Commerce, as members, we’re always the only landlease community whose literature (brochures and business cards) are in full view wherever the chamber has a presence! And when we attend chamber functions and socials, we – by association – raise our image, as we rub shoulders with the businessmen and women of the local housing market we serve. Have never figured out why more LLCommunity owners/operators don’t avail themselves of this supremely effective way of showcasing our properties, as well as generating leads and prospects. But one just can’t sit there and wait for the business to come. Like Tom Peters wrote years ago, it’s all about getting up off your duff and practicing ‘Management By Walking Around!’

Trade associations on the national scene? Quite a bit, maybe too much, has been opined in that direction of late. And sadly, no matter what’s said or printed past, present or future, it’s highly doubtful, at least in this industry observer’s opinion, anything is going to change anytime soon! Why? The ‘big vs. small business’, ‘anti – regulatory vs. conciliatory’, and ‘all – inclusive’ vs. ‘diverse bodies’ manufactured housing views and association loyalties run deep, very deep. It’ll take one very charismatic, widely popular, successful business leader, to effect lasting and significant, much needed change, or wholesale displacement of myopic territorial posturing, from the top all the way down.

As a somewhat related aside, I was reflecting recently how a couple of the truisms, in the ‘Scintillatingly Salient – but – Salacious Secrets to Business Management Consulting Success’ chapter of my Chapbook of Business & Management Wisdom, result from more than 30 years of trade association interaction, e.g.

‘When participating in national business and trade association activities and politics, possess sufficient resources and support to participate independently, or wind – up being the ever – present, obvious, and tiresome suck – up.’ Two corollaries. First; if a freelance consultant turning out worthy work (books, training, etc.) participate in national meetings to protect one’s proprietary materials from trade association ‘insider’ imitators. And second; go nowhere (e.g. national meetings) without covering one’s travel expenses – and more, with billable work from clients in the geographical area where the event is being held! Believe it. On the average, it costs $1,000 to $2,000 to attend most national gatherings, that’s a fair amount of billable time to have to cover.

‘Don’t rely on trade association executives for steady, if any, billable work! References maybe. Some are among the most multi – faced (that’s because they’re more than two – faced) folk on earth; others might become loyal supporters – especially when they want free information and seminars. They’re ego managers who clearly know who signs their paycheck.’ Corollary. Be aware – and beware, state association executives who’re ‘national association loyalists’. If or when you run afoul, rightly or wrongly, of ‘the national powers that be – or those who believe they’re powerful’, there’s often a trickle down effect among state hangers – on. It’s what I have long reasoned to be, for no invitation to address members in a few states (CA, FL,MI, OH, KY & GA – until recently) during the past three decades. But that’s OK; for it’s better to know who one’s detractors are, than to always wonder….

What have been your recent experiences within and outside state manufactured housing and landlease community – oriented trade associations? How do YOU think state execs can improve on, even reverse, the present general malaise existing among manufactured housing associations nationwide? There’s one anecdote, out and about these days, of an association exec, having been told his six figure salary was at risk, went out and in the space of a week or two, recruited enough new dues – paying members to short circuit that cost – cutting measure. And there’s a relatively new exec, loose in New England, who near single – handedly has turned the fortunes of her association positive, in little more than a year! And yet another exec who’s made an art of serving members’ education and information needs by planning and facilitating annual Super Symposiums, even hosting Manufactured Housing Manager (‘MHM’) professional property management training and certification classes! What has your state exec done for YOU of late? An inquiring blog readership would like to know.

***

II.

Yes, now there’re no fewer than 12 manufactured housing and landlease community – related meetings scheduled during the month of October 2012! That’s a one day meeting every 2 ½ days. Whew! Again, if you’d like a complete list of what’s probably soon to become a true Bakers’ Dozen (i.e. ‘13’) meetings in October, get hold of the September 2011 issue of the Allen Letter professional journal, by phoning the aforementioned MHIndustry HOTLINE or (317) 346-7156.

***

III.

Last week we introduced blog floggers (readers) to Landlease Communities, Manufactured Home Communities, Mobile Home Parks, Trailer Courts & Camps, and Affordable Housing. Book sales are already brisk at $24.95 each, post paid! And several portfolio owners/operators have ordered copies for all their properties (e.g. five or more copies @ only $20.00 per copy, and PMN Publishing will absorb the postage and handling fees). To order, or for more info, call the MHIndustry HOTLINE or (317) 346-7156.

Well, this week, we’re debuting a booklet titled Collection of Figurative Language & Figures of Speech. The research for this book, containing no fewer than 80 different ‘figures of speech’ extends back more than two decades. The book is also a tribute to Margaret J. Allen (My mother, on her 94th birthday this past week), and is dedicated to my father. Longtime friends ‘in the MHBusiness’ will recognize the short (biographical sketch) story ‘Big George’ contained therein.

Anyway, this little gem of a reference is being marketed for only $19.95 postpaid. If you’re a lover of the English language, a published author, an aspiring writer, and or parent or relative or friend of someone who is, this would be a nice gift and helpful resource for them! Available only from PMN Publishing via (317) 346-7156.

***

IV.

Signed up to attend the 20th International Networking Roundtable yet? As of today (8/14/2011) the annual event, designed especially for landlease community owners/operators, is but a month away: 14 – 16 September 2011, at the Hyatt Regency Hill Country Resort & Spa on the West edge of San Antonio, TX. Already appears we’ll not have any ‘walk ins’ this year, as it appears we’ll be at our max of 200 registrants before we arrive! So, don’t be left out, phone the aforementioned MHIndustry HOTLINE today and request an agenda and registration form. Biggest pleasant surprise to date? The number of sponsors stepping forward to offset the costs of this year’s mega event, where we’ll be celebrating the 75th anniversary of the Manufactured Housing Institute, 20th anniversary of the Roundtable per se, and 15th anniversary of MHI’s National Communities Council! See YOU there!

***

George Allen, CPM®Emeritus, MHM®Master
Consultant to the Factory – built Housing Industry &
The Landlease Community Real Estate Asset Class

Friends of George Allen

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This Belongs in Every Landlease Community in the U.S.!

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‘Whattaya Expect?’

I.

Friends of George Allen. What do the Wellfield Botanical Gardens, RV/MH Museum & Library, Chubby Trout bar and grill, and Golden Egg restaurant have in common, besides being located in Elkhart, IN? They are places where ‘friends of George Allen’ gathered on 1 & 2 August to celebrate with this year’s Class of Inductees into the RV/MH Heritage Foundation’s prestigious Hall of Fame.

August 1st also marked Carolyn Allen’s return to manufactured housing’s business and social networking circles, following an absence of 6 ½ years, during which he cared for her Mother Flossie, who lived to be 98 ½ years old.

Accompanied by my younger brother Mark, who flew in from Cape May, New Jersey for the festivities, and following a three hour drive from Indianapolis, our first stop was in Elkhart, to visit the corporate offices of Heritage Financial. There we reunited with friends and landlease community portfolio owners Craig and Connie Fulmer, who took us for a walking tour of the city’s new Wellfield Botanical Gardens. This was a special treat; seeing how Elkhart’s business and philanthropic community are rejuvenating the city’s waterworks (Hence the name Wellfield) featuring a host of sponsored gardens; a large quilt centerpiece comprised entirely of flowers, fronted by a pond; even the functioning pump houses have been redecorated as period structures – one as an estate gatehouse surrounded by an English garden.

Arriving at the RV/MH Heritage Foundation’s museum, library and Hall of Fame facility, Carolyn and Mark were given a tour of the exhibit halls by Wisconsin Housing Alliance executive, and Hall of Fame member, Ross Kinzler, while I circulated, looking for ‘friends in the business’ I hadn’t seen in awhile.

Almost 400 ‘friends of ten Hall of Fame inductees’ gathered for this year’s banquet and celebration. At our two tables, with Carolyn, Mark and me, were our adult children Susan McCarty, co – owner of Spotlight Strategies in Franklin, IN., and her brother Adam, Certified Financial Planner with Capstone Investment Partners in Greenwood, IN. Ed Clayton, MHM, 25 year manager of our landlease community, along with his brother Jack, drove in from central Illinois. And Tim Newby, principal of Newby Management, and author of the Foreword to my new book, flew in from Ellenton, Florida. Dr. David Funk, head of the graduate real estate program at Cornell University traveled from Ithaca, New York; and John and Sonja Rogosich, CPM, drove in from Chicago.

Other key members of this intimate group were Ken and Donna Rishel, of Rishel Consulting, Springfield, IL; and Dennis Ohnstad, landlease community owner, and former MHRetailer, hailing from Champaign-Urbana, Il. Rick Roethke, principal of Barrington Investments, and his CEO Glen James drove up from Indianapolis. Landscape architect Don Westphal, like realty loan specialist Luis Vela, drove to Elkhart from Michigan. And Paul Bradley, head of ROC-USA, flew in from Concord, New Hampshire. Additional landlease community owners/operators present for the evening’s celebration were Jodi Kirincich, chairperson of Illinois MHA; Greg Pardiek recent past chairman of Indiana MHA; Hall of Fame member Mel Fath and his wife Thelma; and several others. Most of these individuals received free copies of my new book, debuting that evening, Landlease Communities, Manufactured Home Communities, Mobile Home Parks, Trailer Courts & Camps, and Affordable Housing, PMN Publishing, 2011. (See Part II. following)

Not important enough to specifically identify, but ‘telling’ nonetheless, were individuals usually present at the annual Hall of Fame Induction Banquet, but not in attendance this year. However, Danny Ghorbani, of the Manufactured Housing Association for Regulatory Reform (‘MHARR’) was on hand to celebrate member Jim Shea Jr’s (of Fairmont Homes) induction into the Hall of Fame. But there was no national support, of this nature, for two former MHRetailers and one Industry Person of the Year.

Following the banquet, and induction of the Class of 2011* into the RV/MH Hall of Fame, more than a dozen of us reconvened at the nearby Chubby Trout bar and grill, to celebrate and engage in enthusiastic interpersonal networking, highlighted with Mark’s ‘fish stories’, some ‘captive finance’ banter, trade association woes, and photos from our recent trip to San Diego, California, to see our grandson Travis graduate from USMC boot camp. Next morning, a dozen or so ‘friends’ gathered at the Golden Egg restaurant to further enjoy one another’s company – and some good country cooking.

Yes, for many reasons, that was a 24 hour celebration among friends, to long remember and appreciate. Visiting the Wellfield Botanical Gardens with the Fulmers, celebrating my three decade career with friends, and simply enjoying one another’s presence and camaraderie throughout. So, to those of you who made the effort to participate, my Sincerest Appreciation! And those of you who couldn’t make it? The 20th annual International Networking Roundtable (‘INR’) is on the horizon (14 – 16 September, in San Antonio, TX.). We’re already at 100+ and ‘counting’. Are you registered yet? Use the INR brochure, if you have one; or phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or (317) 346-7156 to do so by phone!

II.

This belongs in every landlease community in the U.S.! WHAT? The new book for landlease community owners/operators you just read about in Part I of this blog posting!

Landlease Communities, Manufactured Home Communities, Mobile Home Parks, Trailer Courts & Camps, and Affordable Housing was researched and penned for WHO? You, if you own and or operate even just one landlease (nee manufactured home) community! Some portfolio owners/operators have already placed orders to put a copy of this paperback in every one of their landlease communities! Why not do the same?

WHY buy? This is the first time in industry (i.e. manufactured housing) and realty asset class (i.e. landlease communities) history, a significant number of important events – from 1988 through 2011, relative to this unique type income – producing property have been collected, organized, and published as an historical retrospective. In addition, there’s an entire chapter dedicated to the ‘facts & figures’ every owner/operator needs to know! Furthermore, nearly all the dozen or so Signature Series Resource Documents (‘SSRD’) are included in the tome as well! Plus, a nod to the ‘affordable housing’ concept presently dormant – but hopefully stirring, throughout the HUD Code manufactured housing industry! And know what else? No fewer than 50 notable individuals, all from throughout the landlease community asset class, and its’ history, are identified and lauded in this book

HOW MUCH? Only $24.95 postpaid, for this 88 page paperback. WHEN & WHERE to order? Today, simply phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or (317) 346-7156. Credit card orders welcome!

Frankly, as this Part II blog subtitle suggests, ‘This (book) belongs in every landlease community in the U.S.!’ So again, consider ordering enough copies for your property or properties today! And while you’re at it, register to attend this year’s Triple Anniversary Networking Roundtable, 14 – 16 September 2011, at the Hyatt Regency Hill Country Resort Hotel on the west side of San Antonio, TX. When you phone, ask for a brochure, if you don’t presently have one.

III.

‘Whattaya Expect?’ A short and true story by Spencer Roane, owner of Pentagon Properties headquartered in Atlanta, GA., and present day industry expert regarding use of the self – finance ‘lease option’ in landlease communities. *2

“Last month, a lady at one of our landlease communities walked into the office, handed the keys to her ‘doublewide’ to our manager, and asked him to call her finance company and tell them to come get the house. This morning, I received an email note from another property owner describing a similar incident in one of his landlease communities. In both cases, the residents had excellent site rent payment histories. In both cases, finances had gotten a little tight, work needed to be done on the homes, but the homeowners realized they still had 70 percent of their original loan yet to pay, despite making payments throughout the past 15 years.

As similar scenes continue to play out in one landlease community after another, across the country, property owners shake their heads and wonder how anyone (lenders) could be dumb enough to structure such high – interest, 25 year term loans on depreciating assets; and slick enough, to sell millions of dollars of such loans to Wall Street investors; or someone dumb enough, to buy those ‘asset based securities’?

Unfortunately, that’s only the tip of the iceberg, regarding financing mistakes that have taken the manufactured housing industry from producing lots of homes, and having many independent, third party chattel lenders to choose from; to today, shipping very few new homes, with few – if any, lenders to choose from. ‘Back in the day’, most manufactured homes were sited and financed within landlease communities. If the lender needed to get a message to the borrower, he called the property office and asked someone to pass the word. If the borrower defaulted, the home was easily secured, efficiently rehabbed, and quickly resold.

Then someone decided, if financing manufactured homes on rental homesites was good business, financing such homes affixed to real estate conveyed fee simple, must really be good business! Unfortunately, it didn’t matter (to them) the real estate was on a gravel road across from the county dump. As soon as the homeowner changed phone numbers, the centrally – located, highly efficient call center became as useful as ‘a toter without granny gear’ (i.e. transporter sans slowest crawling gear). By the time the lender repossessed the manufactured home, everything but the shell of the house had ‘walked away’ – including appliances, A/C, light fixtures, sinks, lavatories, and toilets. The first move of the home then, was to a retailer’s rehab facility, where technicians attempted to work miracles on the ‘pigs ear’. Then came the mega challenge of selling the used home, as it sat among many sparkling new ones. Finally, along comes move number two, another 25 year loan, and yet another train wreck leaving the station.

No industry can survive without financing – but financing depreciating assets in the middle of nowhere, over 25 years, at excessively high interest rates, isn’t going to work with those (homebuyers or lenders) whose idea of long range planning extends only to next week. Most landlease community owners, however, are willing to work with lenders to create on – site financing programs that’re Win – Win – Win transactions for the lender, community owner, and home buyer – not to mention factories, transporters, installers, and service suppliers. Many community owners are even willing to guarantee the loans on homes in their properties; and, some will even fully collateralize default costs with liquid assets. Why not? These same community owners are often already financing their own manufactured homes on – site!

The S.A.F.E. Act, provisions of the Dodd-Frank bill, absence of independent third party chattel financing, presence of Community Series Homes (‘CSH’), marketing efforts of Business Development Mangers (‘BDM’), inability of prospective homebuyers to qualify for site – built home mortgages, reasonable rental homesite rates in landlease communities, and the increasing demand for truly affordable housing have, all together, created an unprecedented financing opportunity for chattel lenders willing to think ‘outside the (present day, malfunctioning) box’. For example: ‘Do business the old fashioned way!’ How? Reread last half of paragraph three above. What’s next? Get community owners and chattel lenders together, to come up with a financing program that’ll really move some manufactured homes!” SR (Anyone listening at MHI???)

Blogger’s note. If ‘chattel finance’ – or lack thereof, is indeed a hot button topic for YOU, be present at the aforementioned 20th annual Networking Roundtable in San Antonio @ 14-16 September, to discuss the matter with landlease community owners/operators and chattel lenders! Already, more than 100 executives are registered to attend, and while the majority is indeed landlease community owners/operators, chattel lenders and finance service firms too are signed – up, and (hopefully) prepared to listen and discuss. Then, two weeks later in early October, the Manufactured Housing Institute (‘MHI’) will host its’ annual meeting in Phoenix, AZ. So there we have the potential for a One – Two Punch, to effect needed traction on this strategic matter! And whether those two sessions wind up being for naught – or are indeed successful, know there’re preliminary plans afoot to convene in January or February 2012, for a third National State of the Asset Class (‘NSAC’) caucus, likely in Florida, to – for lack of a more apt description – ‘force the issue(s)’, one way or another! Let me know if YOU want to be part of the NSAC caucus planning process, as I’ll need the help (Already have some volunteers). In the meantime, get registered to attend the Networking Roundtable in September! MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or (317) 346-7156. To register for MHI’s annual meeting, phone (703) 558-0678 & ask for Thayer Long.

***
End Notes.

1. George Allen; Robert Azevedo; Leonard O. Brown; Harold (Hal’ Gerring (deceased); Bill Gorman (deceased);Larry Huttle; James Knott; John Martin; Mike Schneider; and, James F. Shea, Jr.

2. If you’d like a free reprint on this subject (‘lease options in landlease communities’), phone (317) 346-7156 and request it.

***

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

‘What I’ve Waited 33 Years to Say!’

(George Allen’s RV/MH Hall of Fame Induction Remarks, 1 August 2011, at RV/MH Heritage Foundation’s Museum & Library, in Elkhart, Indiana)

I.

Like the haircut? Two weeks ago, as Carolyn and I prepared to join our daughter Susan and her husband Drew, at their son Travis’ graduation from USMC boot camp in San Diego, CA., I decided to make an effort to look like the retired Marine Colonel I am, at least from the shoulders up, by getting a ‘high and tight’ military style haircut! What you see tonight is two weeks of gray fuzz growing back.

As I begin my remarks this evening, upon induction into the RV/MH Heritage Foundation’s prestigious Hall of Fame, I’ll keep that salient old ‘3 – Bs Rule of Public Speaking’ in mind; that is, to Be Brief, to Be Sincere, & to Be Seated! So first, some Brief and Sincere Thank You’s, followed by a few cherished memories…

I’ll start by expressing heartfelt gratitude to Carolyn, my wife and companion these past 48 years that we’ve been parents, grandparents, business partners, and now, great grandparents together! She deserves this induction honor as much, perhaps more so, than me, given what she’s had to put up with over the years.

And personal appreciation to John Rogosich, fellow Certified Property Manager and landlease community consultant, for nominating me for induction into our industry’s prestigious RV/MH Hall of Fame.

In like manner, I’m especially grateful to the many landlease community owners and operators, throughout the U.S. and Canada, I count as friends, clients, and associates – especially those gathered here tonight – for encouraging me, and supporting our firm’s work, in their behalf, these past 30 plus years!

Last but hardly least, a sincere and hearty ‘Thank You’ to three men who’ve never met.

Rollin Jackson launched my professional property management career, when he hired me as a regional apartment manager 33 years ago; then shortly thereafter, reassigned me to manage four large but troubled ‘mobile home parks’ he and his brothers owned in Indiana and Kentucky. In some ways, that two year ‘baptism by fire’ property management experience was similar to going into combat for the first time in Vietnam – only this time, no one got killed. And it taught me ‘the business’ well, setting the stage for my future as a real estate investor, property management consultant, and author.

Randy Rowe; good personal friend, long time encourager, industry trend spotter, and faithful supporter of our firm’s research and resources pertaining to landlease communities. Manufactured housing industry aficionados and landlease community owners, for the most part don’t know it, but they owe Randy Rowe one major debt of gratitude, for ensuring the impetus of this realty asset class’ body of knowledge, and the effective national advocacy it enjoys today!

Ed Clayton, certified Manufactured Housing Manager, our best and only landlease community manager, for my business partner and me, during these past 25 years! Ed manages our property ‘like he owns it’, and has become a friend, in addition to being a key employee.

Read much more about each of these outstanding individuals in the Dedication section of my new book, on sale at the RV/MH Hall of Fame*1, or from PMN Publishing*2, titled:

Landlease Communities, Manufactured Home Communities, Mobile Home Parks, Trailer Courts & Camps, and Affordable Housing, PMN Publishing, Indianapolis, IN., 2011.

As I bring these induction remarks to a close, I want to share a few brief pivotal points in my life…

Meeting and falling in love with Carolyn, at Eastern Baptist College, now Eastern University, in 1963. She looked really good then, even better today! I’d gone there to become a pastor, but obviously took a big detour. However, my faith as a Christian has under girded most of my personal relationships, our family life, as well as my business, writing, and military careers.

Next, stepping alive and whole, back onto U.S. soil in 1969, following a an exciting, demanding and traumatic 13 month combat tour of duty in the Republic of Vietnam, as a U.S. Marine engineer officer and company commander. That day, first in California and then in Philadelphia, was at the same time, a profoundly sobering and exhilarating experience I will never ever forget!

Memories of the births of daughter Susan and son Adam; and in time, their spouses and six children coming into our family, and now two great grandchildren, Hunter and Peyton. How very blessed we’ve been and continue to be!

My business partner and I buying our first ‘mobile home park’ in the early 1980s with $500,000 in borrowed cash, then selling it two years later for five times that amount. Exciting? You bet it was!

Writing and self – publishing my first book Mobile Home Park Management, way back in 1988 was a novel experience; then authoring and editing nine more books since then…

And, frankly, being here tonight, amidst friends and associates from throughout the MH & RV Industries. And certainly not to forget my brother Mark, another retired Colonel, who flew in from Cape May, New Jersey, to share this memorable evening with us.

Thank You All!, as I now deliver on that ‘third B’ and ‘Be Seated!’ GFA

NOTE to blog floggers (‘readers’): Probably too late for you to register to attend this
1 August 2011 gala affair, but ‘just in case’, phone either number listed in End Note # 1, and head towards Elkhart, IN!

II.

My Take on the Matter….

Earlier this month I was asked, by a consulting client, to summarize circumstances I believe deleveraged the manufactured housing industry enroute to the miserable shape it’s in today; and, what landlease community owners may have done, in my opinion, to screw up their own business model. I’ll begin with the (edited) paragraphs I penned, in response to that request; then conclude with a column paragraph published in the July issue of The Journal – followed by commentary.

“In my opinion, the Catch – 22 situation in which manufactured housing and landlease communities find themselves today, has two starting points.*3 The first, and not necessarily sequential event, occurred in the mid to late 1990s, when – as part of the property inventory consolidation trend – several new real estate investment trusts (‘REIT’s) chased Wall Street stock analyst expectations, and eventually pronouncements, that landlease (nee manufactured home) communities were indeed ‘growth stock performers’, NOI – wise.*4 But NOT! That’s when rampant (operating) cost cutting and rent increases began, soon spreading to some large, privately – owned property portfolios; and eventually, leading to the dire consequences (i.e. dropping occupancy and profitability) we see today, as more and more landlease communities suffer forbearance and or foreclosure proceedings.

At the same time if not before, HUD Code home manufacturers ‘seduced themselves’ into competing head – to – head with production site builders, in search of greater market share and profits; you know, the cash flow siren song of ‘bigger box = bigger bucks’. This business model shift, was for awhile, characterized by the now defunct ‘land – home package’ realty/home sales trend, and the eventual disappearance of 90 percent of independent MHRetailers nationwide. This latter phenom, likely due to too few sources of third party chattel finance for home sale transactions – another sad tale; plus, the gobbling – up of independent retail sales centers by cash flush manufacturers requiring more ‘company stores’, to overload local housing markets with inventory glut. Together, this absence of chattel finance sources and disappearance of MHRetailers, marked the near end of building and selling smaller ‘affordable’ singlesection (nee singlewide) and multisection (nee doublewide) manufactured homes for marketing and sale into landlease communities – the very business model that facilitated 1972’s 575,940 ‘mobile home’ shipments, and the industry’s too brief renascence in1998, when 372,843 new manufactured homes were shipped. Today, the manufactured housing industry ships but 50,000+/- new homes per year – in 2008, 2009, 2010, even fewer (likely) during 2011, given year to date performance.” GFA

Then there’s this one sentence summary paragraph, on different yes, but tangentially – related topics, from a column, penned by Danny Ghorbani, and published in The Journal (July 2011), and titled:

‘Saving Independent Retailers and Communities’:

“In MHARR’s view, retailers and community – based entities face a clear choice – continued dysfunction and decline, or a change to a new national level industry representation structure to lead the industry back to real prosperity.” Huh?

Most blog ‘floggers’ are business savvy and critical observers of all things manufactured housing and landlease community wise. So let’s parse what’s opined here. First, lumping MHRetailers and landlease community owners/operators together is a big mistake. They’re significantly different business models, hailing from different major segments of the manufactured housing industry and landlease community real estate asset class duo; MHRetailers are akin to the MHIndustry; and landlease community folk to real estate development and investment. Sure, there’s crossover – or at least there was (Reread the opening paragraphs of part II of this blog posting), a decade or so ago. Today? Many, if not most landlease community owners/operators, particularly property portfolio ‘players’, have become on – site MHRetailers by default; but much different from ‘street dealers’ of years past.

Continued dysfunction and decline? Dysfunction? Who?, What?, Where?, When?, Why?, & How? – the ‘Four Ws & H of basic trade and secular journalism’. No really illuminating answers provided in this paragraph or column! And decline? Sure, especially among MHRetailers; again, 90 percent of them are gone, some bought – out by HUD Code home manufacturers, others now contractors, but most ‘out of business’. And LLCommunity folk? In terms of national physical occupancy, yes, we’re slipping. BUT, show me a LLCommunity owner who didn’t overpay for his/her property acquisition (i.e. Didn’t ‘buy on the come’, as in ‘rent increases to come’ – that never did!), and or has paid down their mortgage, and I’ll show you a generally healthy business model that’s frequently selling, even self – financing new and resale homes on – site, to ‘get the rent meter’ a – running and to keep it running. How much so? Just among the 500+/- known portfolio owners/operators of this unique income – producing property type, $3.5 billion by the end of 2009, and in increase to $5.2 billion by year end 2010, according to the 22nd annual ALLEN REPORT. And these 500+/- ‘players’ control but only 15 percent of the national inventory of landlease communities! Surprised? You wouldn’t be, if your get your hands on an ALLEN REPORT every January….

So, with such flawed writing, and lack of justified logic, in the referenced summary paragraph and column, we’re to run off willy nilly to ‘create or change to a new national level industry representation structure’? I think not – at least not until a far better case is made for considering doing so! And enhancing association executive job security should not be part of making that particular case.

But the columnist’s flailings do raise this larger question: Are the manufactured housing industry and landlease community asset class ‘matters’, described in the earlier paragraphs of Part II of this blog posting, exacerbated, unaffected, or resolved, by dint of ‘us’ suffering the consequences of the perennial rivalry between national advocacy bodies in Washington, DC., and Arlington, VA? Are the ‘attacker’, a.k.a. the Manufactured Housing Association for Regulatory Reform (‘MHARR’) and the ‘ignore the bully – some say watchdog – and he’ll go away’ Manufactured Housing Institute (‘MHI’) loyalists really serving our collective business needs in the best possible way and to the greatest degree possible today? My answer? No!

Is/are there practical answer(s) to this dilemma, stalemate, conflict, rivalry? Whatever it is, it’s going to have to be Solomonesque, for sure. We’ve been down this ‘attempted unity’ road before, several times; and every time, unsuccessfully. The alternatives? Leave well enough alone – believing ‘Conflict (as in competition) is good for the soul, if not business’ (In our case, ‘our conflict’ allows federal legislators to ‘divide & conquer us’, so to speak, when it comes to our effectively confronting onerous legislation – like what’s on the Congressional horizon at present!); or, Combine the divergent cultures into one new entity (‘Do I hear screaming in the background?’); Reorganize into two distinct halves or major segments, based on business type (e.g.manufacturers/distribution & realty development/investment), but under one banner; or, (‘Shutter the thought!’) Start over completely! What say YOU? Me? I’ve already said enough for more than one day, one posting.

Danny got this conversation started (again); how ‘bout if we attempt to embellish or finish it? Let me know your thoughts by phone (317/346-7156), email (gfa7156@aol.com) or letter: GFA c/o Box # 47024, Indianapolis, IN. 46247.

III.

In case you don’t know it, October Hell continues to Heat Up! How so? We’re now up to 11 MHIndustry events scheduled during the month of October 2011, and I’m told there’re more a – coming. Whew! For a complete list of these trade events, read the August issue of the Allen Letter professional journal! Order by phoning the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Only $134.95 for a 12 month subscription; or, $250.00 for said subscription plus a copy of the 22nd annual ALLEN REPORT (a.k.a. ‘Who’s Who Among Landlease Community Portfolio Owners/operators Throughout North America!’). And while you’re at it, if not already registered for the Triple Anniversary International Networking Roundtable, occurring 14 – 16 September 2011 at the Hyatt Regency Hill Country Resort Hotel on the West edge of San Antonio, TX., do so soon! Why? We’re ‘more than halfway’ to our limit that can attend. Really hope to see YOU there!

IV.

Likely more details next week. But if you want to be the first on your block to own an advance copy of my newest book, debuts on 1 August 2011, at the aforementioned RV/MH Heritage Foundation’s annual Hall of Fame Induction Banquet, here’s the title, price, and ordering instructions:

Landlease Communities, Manufactured Home Communities, Mobile Home Parks, Trailer Courts & Camps, and Affordable Housing, George Allen, PMN Publishing, Franklin, IN., 2011. 88 pages.

There’re names, incidents, information, stats, and more in this book, you’ll refer to in seriousness and jest, for years to come. I’m finally penning material I’ve long wanted to publish. For example, and in addition to this soon release, later in August, PMN Publishing will sell my new writer’s reference booklet, titled Figurative Language & Figures of Speech. Now that was fun to finally put together.

Price of the Landlease Communities…book? Only $24.95 postpaid. See end note # 2 below. Wait till 3 August to phone though, or leave a message if calling sooner.

***

End Notes.

1. RV/MH Hall of Fame in Elkhart, IN. (800) 378-8694 & (574) 293-2344

2. PMN Publishing in Franklin, IN. (317) 346-7156. Book $24.95, including shipping and handling; $19.95 without shipping and handling fee.

3. Catch – 22 is a satirical, historical novel by Joseph Heller, first published in 1961, and set during latter days of WWII. The phrase ‘Catch – 22’ is oft used to describe ‘no – win’ and or ‘lose – lose’ situations or propositions where a person or entity indeed has choices, but no one choice leads to a net gain; a.k.a. ‘Darned if I do, Damned if I don’t.’

4. NOI = Net Operating Income, i.e. Gross (rent) receipts less operating expenses, but not debt service or mortgage payments.

George Allen, CPM®Emeritus, MHM®Master
Consultant to the Factory – built Housing Industry &

Too Late or Not Too Late? Part II, maybe III.

“These rent, income, and demographic trends are staring the (manufactured housing) industry in the face, and are tremendous cause for optimism – it is great to see you calling that out.”
&
“Your challenge in paragraph four (of blog # 148, on 10 July 2011) is well stated, and I will be interested to see who the takers are.”

***
These are two of the shorter, but typical responses, to paragraph IV of the above – referenced blog posting, that began with these words: “OK, enough ‘reading between the lines’ for the time being. Let’s talk internal politics for awhile.”

All we’re suggesting then and here, in consecutive blog postings, is there’re two, maybe three, opportunities this Fall and Winter, to get a handle on the present day circumstances of the (1) landlease community asset class and (2) manufactured housing industry, by collectively discussing, debating, brainstorming, and planning our very future, by dint of ‘How to Save the Manufactured Housing Industry!’

Here’re the two, maybe three opportunities, in some detail:

I.

Triple Anniversary International Networking Roundtable.

This event occurs 14 – 16 September in San Antonio, TX. Be present to celebrate the 75th birthday of the Manufactured Housing Institute (‘MHI’), 20th consecutive annual International Networking Roundtable, and 15th year of MHI’s National Communities Council division! In addition to nearly two dozen presenters and panels covering timely and cutting edge landlease community – related topics, there’ll be dozens of landlease communities showcased ‘for sale’, ten interpersonal networking events, and plenty of opportunities for deal – making. The final session of this year’s Roundtable will be your opportunity to help chart the future of the landlease (nee manufactured home) community asset class, relative to statistics research and publication, print and online communication among portfolio owners/operators, professional property management training and certification, as well as the continuation of a dozen or more Signature Series Resource Documents (‘SSRD’s) used by landlease community owners/operators throughout North America. For information, visit this website, or place an email (gfa7156@aol.com) or telephone request (MHIndustry HOTLINE: 877/MFD-HSNG or 633-4764) today. Attendance limited to 200 registrants.

Manufactured Housing Institute’s annual meeting.

This event occurs 2 – 4 October in Phoenix, AZ. Agenda? Following is taken directly from an email message to members, dated 18 July: “Annual Meeting to continue work on MHI’s priority areas: Financial Regulatory Implementation and Overhaul; S.A.F.E. Act Implementation; GSE Reform and Government’s Role in Housing; Tax Reform and Energy Issues.” Nary a word about any priority relative to reversing the present shipment nadir bedeviling the manufactured housing industry.

Same communiqué goes on to say: “It takes the collective experience and ideas from all members to achieve the highest level of success with these very important issues. Your involvement in the Annual Meeting is essential to the industry’s commitment to growth.” OK, I can buy into all that; but frankly, why not after the word ‘success’, say/write ‘in rejuvenating the marketing, sales and production germane to HUD Code manufactured housing!’ In a word, so to speak, if MHI isn’t going to take steps to ‘Save the manufactured housing industry!’, who is? Your response to this expose’?

And if you own/operate landlease communities in the U.S., for sure plan to attend the regular meeting of MHI’s National Communities Council division during this time frame! The NCC is ‘the national forum’ where, in this industry observer’s opinion, the national grassroots effort to ‘Save the Manufactured Housing Industry!’ should begin.
For more information, visit manufacturedhousing.org or phone (703) 558-0678. And while you’re at it, if a landlease community owner/operator, and not a direct, dues – paying member of MHI’s NCC division, do so – by phoning Lisa Brechtel @ (703) 558-0666. Tell her ‘George sent me!’

Third National State of the Asset Class caucus.

This event is not scheduled at this time, but will likely occur during January or February 2012, somewhere in Florida, preferably on – site in a large landlease community – to lend ambiance to efforts to ‘Save the Manufactured Housing Industry!’

There’s ‘two for two’ success precedent to having a third National State of the Asset Class (‘NSAC’) caucus. While many manufactured housing aficionados are well aware of what occurred on 2/27/08 & 2/27/09, it’s worth taking a moment and two short paragraphs to summarize proceedings:

• 100+/- landlease community owners/operators, from throughout the U.S. convened at the FountainView (all adult or retirement) landlease community in Tampa, FL. Result? Agreement on five ‘suggestions, strategies, and or action areas’: 1) Importance of effective and ongoing political influence, and landlease community advocacy at local, state and national levels; 2) Getting the word out! Timely dual need for a national manufactured housing ad campaign and productive local housing market – tailored promotions; 3) Value Proposition. Ensure a fair interplay of housing product pricing, financing and value, with site rental and more; 4) Measure Customer Satisfaction via resident relations indicators, volume of home sales and site leasing referrals, and degree of tenant retention! 5) Financing and servicing of new and resale home transactions on – site, and financing of landlease communities per se. When one stops and thinks about it, all five areas have seen their share of trade press publicity, if not accompanying action, since first codified three and a half years ago!

• 100+/- HUD Code home manufacturers and landlease community portfolio owners/operators convened at the RV/MH Heritage Foundation’s new Hall of Fame, museum & library facility in Elkhart, IN. End result? For the first time in manufactured housing industry history, manufacturers and landlease community owners/operators engaged in open and spirited dialog regarding ‘What type homes the latter needed to fill vacant rental homesites’, and ‘What the former were willing to do to accommodate said needs’. It was as simple as that. Results? During the following twelve months, several manufacturers designed and built Community Series Homes (i.e. inexpensive singlesection & smaller multisection) – different from the Developer Series Homes (i.e. Bigger Box = Bigger Bucks homes shipped shortly before and after year 2000) for direct siting and sale within landlease communities. And a new job title and description emerged, that of Business Development Manager or BDMs – manufacturer personnel expected to ‘walk and talk’ landlease communities, to increase those firms’ market share!

Enter a third NSAC caucus. Whatever you read these days, in the trade press, there’s an increasing chorus, among journalists, publishers, and some state and national leaders, that something ‘big’ or at least ‘substantial’ needs to be done to get the manufactured housing industry back on track, in terms of annual new home shipment volume, or watch the industry continue its’ slide into eventual oblivion.

By year end, the future of landlease community research and resources should be secure, as a new national not for profit platform materializes to ensure little to no change in the products and services already enjoyed by landlease community owners/operators form coast to coast, and in Canada.

The remaining issue will be, as it is now – unless greatly addressed during MHI’s aforementioned meeting in early October, is how to ‘Save the Manufactured Housing Industry!’ And given the scope of this challenge, there’s no way progress will be achieved in just one day. Preliminary plans call for a two day affair, so if interested in participating, plan on that. And it’ll be, most likely, consecutive weekdays in the middle of a month.

What’ll be covered? What sort of agenda? Well, that’s where you, blog floggers (readers) come in. Approximately 400 manufactured housing and landlease community folk receive a BEBA (Blast Email Blog Alert) every Sunday – like the one you received announcing this posting! Sometime in mid or late October, if need be, we’ll likely send you a questionnaire, soliciting your input as to topics and format for the third NSAC caucus. In the meantime, at the 20th Networking Roundtable, and prior to MHI’s annual meeting, if you agree with the premise of this blog posting (i.e. Save the Manufactured Housing Industry!), let your thoughts and opinions be known to salaried and elected leaders alike! Now is not the time to be shy about what you think it’ll take to get our industry back on track.

An interesting sidebar has been popping up of late, ever since we coined the concept: MHActivist, a few blog postings ago. More than one responder has commented that individuals participating in the serious exercises suggested in this week’s posting should be ‘stakeholders’ (i.e. business owners), and that we take steps to ensure plenty of grassroots (as opposed to, as they put it, Astroturf) businessmen and women are given opportunity to comment and participate. Well, starting with this posting, here’s your opportunity….

***

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

Too Late or Not Too Late?

Meeting Hell (October 2011) Heats Up Even More!

Paper & Print versus Computers & Floppy Discs…

I.

Too Late or Not Too Late?

It’s too late for you to sign – up to attend this week’s (7/20) Manufactured Housing Manager® or MHM® class in Horsehead, New York.

It’s not too late for you, however, to participate in MHM® Classes being formed in Indianapolis, IN., and Chicago, IL. during the next few months.

&

It’s too late to Save the Manufactured Housing Industry!’ if you believe what’s been penned and published by more than one columnist, in one or another of the few remaining manufactured housing trade publications during July 2010.

But it’s not too late, however, to be part of an emerging grass roots national effort to ‘Save the Manufactured Housing Industry!’ How? For starters, read next week’s blog on the subject. Frankly, it’s taken extra time to sort through and organize the heavy, positive response to last week’s blog posting, introducing this very topic in the final paragraphs….

II.

Meeting Hell (October 2011) Heats Up Even More!

In the June 26th blog posting at this website, we described four national meetings scheduled to occur simultaneously throughout the month of October 2011. Well, during the past three weeks we’ve learned of no fewer than five more meetings, one national and four at the state level, also occurring during October 2011. Ready for this?

• October 2 – 4: MHI’s annual meeting in Phoenix, AZ. (703) 558-0678
• October 11 – 13: WMA’s (CA) annual meeting, Las Vegas, NV. ((916) 448-7002
• October 11 – 15: IREM’s Leadership Conference in Las Vegas. (312) 329-6000
• October 12 – 13: New York Housing Association’s meeting. (800) 721-4663
• October 16 – 18: London Computer’s ‘Rent Manager’ meeting. (513) 583-1482
• October 20: Massachusetts MHAssociation’s annual meeting.
• October 20, 2011. MHIS Fall meeting in Charleston, SC. (803) 771-9046X5
• October 25 – 28: Urban Land Institute & MHCC Meeting in CA. (727) 826-8868
• October 27 – 28: Arizona Housing Association’s convention. (480) 456-6530

Look for this already crowded meeting list to be lengthened during the next few weeks.

III.

Paper & Print versus Computers & Floppy discs…

The first book ever published was the Gutenberg Bible. Printed in the 1940s, 21 complete copies exist today; that’s 550 years after they were first published!

Are you or your firm into digital archiving, transferring records to digital storage? While a practice offering many benefits, and prevention of service setbacks like loss of records, know digital media will not last as long as printed matter. We’re already seeing the truth of that statement.

Think about it. Remember when floppy discs were new, indeed ‘floppy’ (Succeeded by rigid 3 ¾ X 3 ¾ plastic ones) and all the rage? Now you never see the truly floppy ones, and the rigid black-clear-white ones are rapidly disappearing from view, as more and more contemporary PCs appear on the market, without ports for them.

Gotta be asking yourself, ‘What’s to succeed CDs, DVDs, and flash and thumb drives during the next three to five year marketing cycle? What will you and your firm do with your digitized records then? Architects, doctors and hospitals (medical records repositories), law offices, financial firms, and government agencies are all asking this heady question – with no answers in sight! Already ‘historical records stored digitally, including recordings and documents relating to 9/11, have been ‘lost’ to this obsolescence creep.” Quoted from ‘Paper Never Forgets’, in Quick Printing magazine, 11/2010, p.13.

So, what’s a responsible businessman or woman to do? Until a ‘better answer’, long lasting solution comes along, we’re archiving these blog postings, short stories, newsletters, standard property management forms, and books, on ‘hard (print) copies’, to be stored in archival boxes. How ‘bout you?

*****

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

Reading Between the Lines!

‘There is an answer in here somewhere, for manufactured housing
& landlease (nee manufactured housing) communities!’

&

Don’t miss reading paragraph four (IV) of this blog posting!

I.

Several recent feature articles from four different business magazines, never once mention manufactured housing or landlease communities, but convey subtle messages applicable to our industry and asset class!

In ‘Homeownership Under Attack’, by Ken Trepeta, in June issue of RISMedia’s REAL ESTATE magazine, begins this way:

“…when you add up the various laws, proposed laws, regulations and proposed regulations, it is hard not to conclude homeownership is under attack. Regulators, legislators and members of the administration are proposing laws or changes affecting homeownership, acting as if their actions are being done in a vacuum. Many of the proposals, may even make partial sense when taken alone, but when taken as a whole, are devastating to homeownership and the housing industry.”

The writer describes provisions in the impending Dodd – Frank law that “… propose a Qualified Residential Mortgage (‘QRM’) requiring 20% or more in down payment for securitized loans…super strict debt – to – income ratios and credit standards that leave no margin, even for a single payment lost in the mail.” And a “…Qualified Mortgage (‘QM’) regulation (that) tightens credit standards even further, and has features that’ll cause one to question whether they can profitably lend money to anyone.” Sounding familiar yet?

Trepeta concludes “…it isn’t hard to conceive of a world where no one is willing to lend or securitize, except to a narrow group of consumers with perfect credit, W-2 income, no debt, and who can put more than 20% down. In 2010, according to National Association of Realtors data, that was only about 25% of home buyers.” Hmm. Where does this apparent ‘attack on homeownership’ leave landlease community owners/operators who, responding to the wholesale disappearance of MHRetailers (circa year 2000), have been marketing and selling new and resale homes on – site; and, when necessary, engaging in one or another form of self – finance, e.g. via ‘buy here – pay here’ & captive finance methodologies; or, most recently, lease options, and upon occasion, rental of manufactured homes as apartment units? Apparently we’re not in this morass alone.

II.

Then, in a short piece titled ‘Affordable Rents Shrink’, by Claire Easley, writing in Multifamily Executive magazine, we learn “Rental housing is home to 38 million U.S. households (according to National Low Income Housing Coalition or NLIHC).” While many rent by choice, numerous others find doing so, a matter of economic necessity.

With “The average renter wage in the U.S. estimated to be $13.52 per hour”, an amount short of what it takes to rent even a modest apartment, “the (large) number of renters spending more than 50% of their income on rent and utilities” demonstrates a severe and all time high cost burden, according to Harvard University’s Joint Center for Housing Studies (‘JCHS’) report: ‘America’s Rental Housing: Meeting Challenges, building on Opportunities”. Guess whether manufactured housing and or landlease communities are mentioned in that study, as a means of meeting said rental challenge, or an opportunity on which to build? Not.

Furthermore, “…just when it seems to be needed the most, the country’s rental stock is disappearing, with low – cost rentals faring the worst.” While here we sit, with a minimum of 250,000 vacant rental homesites in landlease communities throughout the U.S.! But then; to date, we can’t get more than a couple HUD Code home manufacturers truly motivated to fill these sites with affordable Community Series Homes! Go figure.

Geesh! This is indeed a timely opportunity to ‘get the word out’ about our industry and asset class. Last week’s blog described a precious few MHActivists presently afoot within manufactured housing and landlease community environs. Did I miss YOU, as an MHActivist? I hope so. And if so, write and let me know what YOU’re doing to position manufactured housing and landlease communities as viable answers to the aforementioned ‘attack on homeownership’, and in the immediately preceding paragraphs, a ‘practical means of meeting this nation’s rental challenge’!

III.

In the June issue of Multihousing Professional magazine, in an excerpt from a work penned by Carisa Chappel, multihousing (as in apartment and landlease communities) gets some attention. “The demand for multihousing continues to grow across the country, but one segment particularly under – served and attracting the attention of Fannie Mae, is the affordable housing market, according to the recently released White Paper: ‘Fannie Mae & Workforce Rental Housing’.”

‘Of the current 15.2 million rental units, only about 6.5 million are considered affordable housing for those earning less than half of their (local housing market’s) Area Median Income or AMI. The number of affordable units available for households earning less than 30 percent of AMI is significantly lower, at 2.4 million….” And, “Typically, 90 percent of Fannie Mae’s multifamily financing supports housing for renters earning at or below their region’s AMI.” Where do landlease communities fit in this mix? It’d be interesting to know. Perhaps I can find out before posting next week’s blog. Point? Once again – in this case – the multifamily housing rental market continues to move along, albeit not as well as in the past, with little to no sensitivity to the presence of landlease communities, and how many more bona fide ‘homeowners/rental homesite lessees’ might indeed play a greater role in addressing this housing shortage.

IV.

OK, enough ‘reading between the lines’ for the time being. Let’s talk internal politics for awhile.

Several blog postings ago, we challenged manufactured housing and landlease community leaders to caucus, in a public and grassroots manner; to, 1) get a handle on where we are today in the history of our industry/asset class; 2) ‘brainstorm’, or by whatever means works, articulate business plan(s) to invigorate housing production/distribution and property development/investment functions; and 3) commit to take necessary steps to get us off our 60 year, three years running (maybe four) nadir of 50,000 housing units shipped per year! Have YOU heard of any such plan of late? I haven’t. Is there an alternative? I believe there is, and it might, during the next few months, materialize in this fashion….

The 20th annual International Networking Roundtable (a.k.a. ‘Triple Anniversary Roundtable’, honoring MHI’s 75th birthday, Roundtable’s 20th session; and National Communities Council’s 15th year in operation!) will occur 14 – 16 September 2011, at the Hyatt Regency’s Hill Country Resort & Spa on the west edge of San Antonio, TX. Besides the 20+ presenters covering as many timely topics, there’ll be ample time for property and portfolio deal – making, as well as interpersonal networking. One of the most important things that’ll occur at this year’s event is scheduled for the final session on Friday: ‘What’s to become of the research & reporting, print & online communication, and property management education resources now enjoyed by 50,000+/- landlease community owners/operators nationwide?’ Registered to attend? We’re already approaching the midpoint of our 200 attendee limit, so don’t be left out. Register today! See contact information at the end of this blog posting.

A couple weeks later, from 2 – 4 October, at the beautiful Hilton Hotel Tapatio Cliffs in Phoenix, AZ., MHI will host its’ annual meeting. They’ll soon be publishing an agenda. Watch to see if time is set aside for an industry/asset class wide caucus during or after this event; or whether mention is even made of a need for such a ‘coming together’ of industry /asset class stakeholders from all segments of the industry. If not; well….

There’s precedent for the convening of national caucuses among manufactured housing and landlease community aficionados! Remember the first National State of the Asset Class (‘NSAC’) caucus at FountainView Landlease Community in Tampa, FL., on 2/27/2009? Were YOU among the 100+/- landlease community owners/operators present that day, crafting a Five Step Program in effect to this day? And the following year, on 2/27/2010, just as many manufactured housing and landlease community folk convened in Elkhart, IN., at the RV/MH Heritage Foundation’s Hall of Fame, Museum & Library facility, for the 2nd NSAC caucus. Were YOU present that day, when the Community Series Home concept was birthed, and dozens of Business Development Managers named to sell this new housing product to landlease community owners/operators?

Know what? There were preliminary plans for a 3rd NSAC caucus during February of this (2011) year, but these were put on hold when it was (wrongly) sensed our national elected and salaried leaders, at the time, would be carrying on that two year old initiative. Well, neither event happened!

This blog posting’s BEBA (Blast Email Blog Alert) now goes out to nearly 400 manufactured housing executives and landlease community owners/operators weekly. If you’re one of these blog floggers (readers), and believe a 3rd National State of the Asset Class should be scheduled, for the good and future of manufactured housing and the landlease community asset class, during February 2012, and probably in Florida – as Chicago can be a bit nasty, weatherwise, that time of year, let me know by phone: MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or (317) 346-7156, mail: GFA c/o Box # 47024, Indianapolis, IN. 46247; or email: gfa7156@aol.com If I receive a minimum of 50 sincere indications of support for the idea; planning a 3rd NSAC will begin during mid to late October 2011- at the same time the time a new research/resource team is compiling the 23rd annual ALLEN REPORT (a.k.a. ‘Who’s Who Among Landlease Community Portfolio Owners/operators Throughout North America!’), scheduled for publication 1 January 2012. What say YOU?

Want to be one of the stakeholders intent on preserving and rejuvenating manufactured housing and landlease communities into and beyond year 2012? If so, let me know ASAP!

***

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.