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

ACTIVISTS, HACKTIVISTS, MHACTIVISTS

The Manufactured Housing Industry Needs More MHActivists

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Cellphone, Cable, Airline, and Manufactured Housing In Common

I.

“Traditionally, hacktivists will overwhelm a targeted website with nuisance requests, temporary cutting off access to the site. Sometimes they will deface the site’s home page.” Quoted from USA TODAY. So that’s a hacktivist.

“Hmm.” Kinda causes one to wonder if our own brand of MHActivist, buy with a positive, constructive agenda, afoot in the presently moribund world of HUD Code manufactured housing, might be ‘just what the doctor ordered’, since we’re not seeing much, in the way of remedial action, from almost anyone else, even among elected and salaried industry leaders these days. Simply reacting to the S.A.F.E. Act, and anticipated provisions of the Dodd-Frank bill, are not what’s being talked about here; rather, what it’s going to take; no, better yet, ‘What a few individuals are doing to get the manufactured housing industry back on track as this country’s preeminent supplier of truly affordable, quality housing for its’ citizenry!’

After all, a recently published study by a national Think Tank included ‘manufactured housing’ as one of ten dying industries in this country, right there along with the video rental business. Are we gonna take that perception ‘lying down’? For many, ‘Apparently so’; but for a few others?

There are indeed signs, albeit small and sometimes fleeting ones, that some MHActivists are starting to come out of the proverbial woodwork. Here’re a few I’ve been watching and documenting for awhile….

• A chattel finance service consultant (Wish I could tell you there’s more than one, but sadly, there isn’t!) who has been bold enough, during the past two years, to ‘lead the way’ teaching landlease (nee manufactured home) community owners/operators to self – finance home sales transactions on – site in their properties via, originally, buy ‘here – pay here’, and later ‘captive finance’ methodologies. Today, some of that momentum has shifted toward lease purchase (maybe spawning, finally, yet another finance service consultant), even the on – site rental of apartment (i.e. manufactured home) units – just like we did back in the late 1970s. In the meantime, however, this sole MHActivist has been willing to step out, and at least attempt to bring reason to multifaceted interpretations arising from aforementioned federal finance regulatory measures.

• Possibility of a new, national not for profit platform, to ensure continued research and resource needs, as well as communication, networking, and education requirements of landlease community owners/operators, will indeed be met and fulfilled during decades to come. Creating something new like this, out of whole cloth, in trying economic times is no mean fete. Here too, it takes MHActivism, of the first degree, along with cooperation and financial support from the target audience to be served.

• New wave of trade press media. Less than a decade ago, the manufactured housing industry was awash in monthly print publications. Today, there’re but two left, one advertiser – supported (Though publisher is attempting to wring subscriber dollars from decades long readers) and two subscriber – supported business newsletters. But the Good News is the manufactured housing industry is now well – served by a daily online news outlet (See MHMSM.com) or ezine, two financial service newsletters on line (one free and one subscriber – supported), and an independent, weekly blog posting at this website.

• Know what? There’s at least one manufactured housing sales MHActivist out and about these days. That’s right. One Business Development Manager (‘BDM’) out of the two dozen named in Elkhart, IN., at the second NSAC caucus (National State of the Asset Class) on 2/27/10. Today, that BDM is aggressively marketing Community Series Homes (‘CSH’) to landleasse community owners/operators throughout the U.S.! What’s sad about this example of MHActivism, is should be at least two dozen of them at work these days filling the estimated 250,000+/- vacant rental homesites in landlease communities throughout the U.S.

There’re indeed more MHActivists out and about these days, but are difficult to identify.

So, what are YOU doing, in the way of MHActivism, to ensure the continuation, even rejuvenation of the HUD Code manufactured housing industry; contrary to the death knell predicted by that aforementioned Think Tank? OR, are YOU simply ‘along for the ride’, and will just look for another job when this one runs out. Geesh! Hope that’s not the case!
II.

Cellphone, Cable, Airline & Manufactured Housing In Common

In another recent issue of USA TODAY, one editorial was titled: ‘Going over your limits? Cellphone companies don’t want to tell you’. Therein was a paragraph that, to me anyway, read spookedly like it was describing how our industry, the manufactured housing business, too oft relates to its’ homebuying customers:

“It’s hard to fathom why companies so dependent on public perception would take such an anticonsumer stance. Unless maybe, they’re taking advice from the cable or airline industries. Or unless making it easy for customers to exceed their limits is a lucrative part of their business models.”

Anticonsumer stance? In the case of cellphone companies, the editorial describes their general reluctance to provide “…a real time alert to customers when they get near their usage limits.” And, of course, with cable TV and the airline industry, these days, you’re more than tone deaf if unaware of their poor customer service practices – just read Consumer Reports magazine and take a flight somewhere (e.g. in the latter instance, unless you’re flying Southwest, two flyers –husband & wife – can expect to spend at least $100.00 in extra ‘baggage’ fees on just one round trip between two cities as nearby as Chicago and Indianapolis!)

Manufactured housing? We continue to struggle with safe and secure installation of our product, as well as immediate, reliable, and satisfactory customer service ‘after the sale’. Oh sure, there’re pockets of sterling performance, for varying periods of time – usually dependent on personnel attrition, that make us ‘feel good about ourselves’ as an industry; but the bottom line is ‘we’re not known, in a positive way – yet’ for how we treat our homebuying customers over the long run.

Hmm. Harkening back to part I of this week’s blog posting, here’s one more major area where the manufactured housing industry would certainly benefit from the presence and actions of more than one MHActivist! Might that person be YOU?

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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

Alphabet Soup for the MHIndustry & LLCommunity Good

‘MHI MHARRvelous Dream’ Revisited; October 2011 to be Meeting Hell!

Why RVs ‘eat our lunch’ marketing wise; In Support of the MHI’s NCC!

BDMs & CSHs = Success or Failure? New Issue for LLCommunity folk

I.

MHI MHARRvelous Dream! Turns out MHMSM; you know – the nearly two year old online ezine at MHMSM.com, has a timely take on last week’s post at this website: ‘MHI (‘My’) MHARRvelous Dream’! Like many who make their living in one or more segments of the manufactured housing industry, the publication believes the time has come, once again, for the Manufactured Housing Association for Regulatory Reform (‘MHARR’) and Manufactured Housing Institute (‘MHI’) national advocacy bodies to work together! Once again? That’s right. If a novice in the MHIndustry and LLCommunity asset class, know many of us have seen these bodies ‘bury their bloody hatchets’ in the past, to pass or fight legislation. Think the Manufactured Housing Improvement Act of 2000, for starters. This time around, however, we need the ‘MHI MHARRvelous Dream’ to become Reality on several fronts: defeat of Dodd – Frank legislation, HUD’s full implementation of aforementioned MHIA @ 2000, even the veritable survival of the manufactured housing industry! For more information, visit MHMSM.com And remember; we can either ‘hang together’ during these trying times, or for certain, die separately. Me? I’m all for strength in numbers.

II.

Why October will be meeting hell! Do we already forget the mishmash of meetings this Spring, as MHI’s annual Manufactured Housing Congress competed for registrants, with at least two other states hosting regional manufactured housing shows? Oh yes, I know, it’s a free country, and everyone is fighting for every bit of business they can get – but scheduling meetings with overlapping dates, or in the cases following, ‘too many in one month’; well, everyone suffers!

October 2 – 4 will find MHI aficionados at the Pointe Hilton Tapatio Cliffs Resort in Phoenix, AZ., for the institute’s 75th anniversary annual meeting. Information, phone Greg Rinck @ (703) 558-0646.

October 11 – 13 will see WMA’s (Western Manufactured Housing Communities Association) members convening at the Southpoint Hotel and Casino in Las Vegas, NV for their annual meeting. For info, call (916) 448-7002.

October 16 – 18 are the dates of LCS’ (London Computer Systems) annual Rent Manager soiree; this time at the Belaggio Hotel and Casino in Las Vegas, NV. Call Nichole Sandy @ (513) 583-1482X243

October 25 – 28 will find members of the Urban Land Institute’s (‘ULI’) Manufactured Housing Communities Council (‘MHCC’) meeting in Los Angeles, CA. To join in the fun, contact David Lentz via (727) 826-8868.

So, let’s see. If I’m a landlease community owner/operator who lives in California, but owns one or more properties, I’ll begin my month at MHI’s annual meeting in Phoenix, AZ; return home for a few days before patronizing WMA’s meeting out in Las Vegas. And hey, might as well stay there, over the weekend, to participate in the Rent Manager program in the same city ‘next week’. And to cap off my month long goosing of the economy in the Western half the U.S., might as well stay home in CA., and ‘do’ the ULI MHCC meeting in Los Angeles. Hmm. What’s all this gonna cost me? Certainly a minimum of $1,500.00 per meeting, or a heady $6,000.00 if I attend all four; even more if domiciled on the East coast, owning properties ‘out West’. And keep in mind, this is also the time of year some states like to have their annual meeting as well. Whew! Sure hope business is very good, for me during October 2011.

III.

Why RVs ‘eat our lunch’ marketing wise. Recent headline from Woodall’s Campground Management newspaper (June 2011, page # 8): ‘Go RVing Coalition Introducing New ‘Away’ Theme for 2012’. Read the following direct quotation, that appeared at the beginning of this news story, and substitute manufactured housing’s theme words ‘Go Affordable Housing!’ when you read ‘Go RVing Coalition’, to get my point. Here it is: “The Go RVing Coalition has voted unanimously to move forward with production of an all – new, integrated television, print and digital campaign with the theme, ‘Away’, the coalition’s leadership reports.” The program was the product of “…a creative work group of 16 coalition representatives from all segments of the industry and Canada, represents a strategy shift back to the emotion – driven, family focus of past campaigns – with a continued underlying emphasis on the affordability and flexibility of RV travel and camping…according to the RVIA.”

Why can’t the HUD Code manufactured housing industry do something similar? Yes, I know, the home manufacturers are deathly afraid non – contributing manufacturers might indeed benefit from a national ‘integrated television, print and digital campaign’. Plus, this too harkens back to the ‘MHI MHARRvelous Dream that’s presently a nightmare, but begs to become a positive and game – changing Reality, where our two national advocacy bodies are concerned. Nuff said – for now.

IV.

In support of MHI’s NCC. Maybe you haven’t heard or read it, but there’s insurrectionist verbiage floating around the internet these days that “…the HUD Code industry’s independent retailers and communities should have their own independent association in the nation’s capital (sic) to represent their specific interests, and the sooner, the better.” Wanna guess who penned that line? Wasn’t me!

Frankly, landlease community owners/operators who’re direct dues – paying members of MHI in general, and the National Communities Council (‘NCC’) in particular, are probably the happiest we’ve been in years – where national advocacy association representation is concerned. How so? The lousy business climate for HUD Code home manufacturers has created a more favorable internal environment for the NCC within MHI. Specifically, the council is now a full – fledged division of the institute. And as manufacturer dues volume declines, landlease community membership revenues have generally, though not always, increased, ensuring MHI’s survival. And ‘yes’, while criticism that the NCC has become a ‘big boys club’ is somewhat valid, the fact that the majority of direct dues paying NCC members present at the last national meeting in Washington, DC., were sole proprietors and small portfolio owners/operators ‘sent a subtle message’ to everyone present. And the ‘icing on the cake’ these days has been the hiring of Lisa Brechtel, to keep landlease community owners/operators on the influence map.

Now, if you’re a little confused about some excited chatter going on, regarding quiet formation of a new national not for profit platform to ensure continuation of such non – MHI/NCC functions as print communication (i.e. the Allen Letter professional journal & the Allen CONFIDENTIAL! newsletters); professional property management (‘PM’) education and certification (i.e. Manufactured Housing Manager® or MHM®) program; the ALLEN REPORT (a.k.a. ‘Who’s Who Among Landlease Community Portfolio Owners/operators Throughout North America!’); annual Networking Roundtables; perpetuation of the 500+/- name data base of portfolio ‘players’; even weekly blogging, here’s the explanation. The aforementioned NCC is our asset class national advocacy body relative to thing politic and regulatory. What we also need – no, must have, is ongoing credible research and regular publication of key statistics, helpful information, PM education and certification, superb interpersonal networking, effective deal – making, and the like, open to ALL landlease community owners/operators nationwide – and perhaps in time, Canada as well. That’s why the eventual (think 2012) new national not for profit entity will have a name inclusive of research, resources, maybe even affordable housing.

V.

BDMs & CSHs = Success or Failure? The Business Development Managers (‘BDM’) at Fleetwood Homes and Adventure Homes are marketing and selling Community Series Homes (‘CSH’) on a regular (I hear feverish!) basis. If any of the other BDMs are doing so, they’re not telling me about it.

A month ago, letters were sent to every HUD Code home manufacturer in the U.S., along with a copy of the official ‘Landlease Community Business Development Managers (list) for Major HUD Code Home Manufacturers’, inviting them to supply names and contact information for ‘new’ BDMs to add to the present 28 name list. Any guess as to the number of responses we’ve received to date? NONE.

This causes me to ask; “Is it worth continuing to throw good money after bad (i.e. as in printing and mailing costs, reprints, directories, etc.), in attempts to cultivate this two year old landlease community (customer outreach) program? Evidently, HUD Code home manufacturers, 1) Don’t understand (How BDMs can sell more homes!) the program; 2) Don’t want to sell more homes into landlease communities; or, 3) Simply don’t need the extra sales cum production cum income right now. Which of these possibilities do you think it is? Me? NONE of the above. Rather, I’ve come to believe most HUD Code home manufacturers were seduced – away from our core affordable housing product at the turn of the century, when they bought into the ‘bigger box = bigger box’ mentality, and competed with site – builders at every turn. And to date, they’ve not returned to the reality that the only homes they can successfully sell in today’s overstocked (i.e. Foreclosed and under priced resale site – built homes) housing market, are our ‘stock in trade’ smaller, efficient, affordable manufactured homes! And you know the further ‘rub’ in all this? We’re pretty confident there’re more than 250,000 vacant rental homesites in landlease communities throughout the U.S. today! Granted, half or more of them are functionally obsolete (i.e. too small to site today’s behemoth homes), but the underutilized opportunity is there nonetheless, for new home sales! There, I’ve said it. Now, prove me wrong Mr. home manufacturer! GFA

VI.

New Issue for LLCommunity folk. Received the following insightful, even prophetic lines, from a fellow landlease community owner/operator recently, and thought I’d pass it onto you intact – and encourage YOU to comment as you wish, or not.

“Have you thought about this? If landlease communities are going to account for much of the industry’s future production/sales (Relate this to the previous paragraph, where it appears HUD Code home manufacturers are NOT interested in filling 250,000 vacant rental homesites in landlease communities throughout the U.S.!), isn’t it time someone gets concerned about the number of such properties that’ll be ‘going away’ during the next decade or so? Several of my landlease communities are now worth more for their commercial development land value (a.k.a. ‘highest and best use of realty) than their capitalized net operating income value. While those values have dropped some over the past three or so years, they will be back! Don’t know about other states, but in ours, you can’t get land zoning for landlease communities within 50 miles of any metro area.”

What say YOU? Other blog floggers (readers) would like to know your ‘take’ on this, and the preceding topics in this week’s blog posting.

VII.

If you haven’t already done so, print off the 20th annual International Networking Roundtable brochure available on this website, and register for this year’s stellar event. 14-16 September 2011 is still 2 ½ months away, but we’re already at 25% of our 200 attendee maximum count! There is no better, more comprehensive line – up of topics and presenters at any other manufactured housing or landlease community venue during the year, so don’t miss out on this one. And this year’s 20th annual event is even more special, as we celebrate MHI’s 75th anniversary, and the National Communities Council’s 15th anniversary! As has been the case the past two years, we’re working to have a couple sample Community Series Homes, possibly including a ‘park model’ RV, on hand for first hand looks by roundtable participants. Have questions about the event, or to register by phone, call the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

*****

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.

Keeping Score, & ‘MHI MHARRvelous’ Dream!

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Just How Many Landlease Communities & Rental Homesites?

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‘MHI (‘My’) MHARRvelous’ Dream, is to See Chattel $s Return,
Advocacy Bodies Work Together, & We Sell Affordable Housing!

I.

The feature article, ‘How Many Landlease Communities Are There in the U.S.?’ attracted much reader attention when it appeared late last year in MHI’s National Communities Council (‘NCC’) division’s Community Connections newsletter. It’s since been republished as a reprint, and Appendix V in the 22nd annual ALLEN REPORT. For a FREE copy of the reprint; and or acquire a copy of the report proper, phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. The ALLEN REPORT & one year subscription to the Allen Letter professional journal ‘together’ cost $250. And when you ask for the FREE reprint, and or ‘special offer’, also request a FREE copy of the reprint ‘To Rent or Not to Rent’…manufactured homes on – site in your landlease (nee manufactured home) community! This latter reprint was also debuted in Community Connections. The point of this paragraph? Simply some Old but Helpful News leading to New News you’ll likely want to read, hear, know…

‘How Many Landlease Community Rental Homesites Are There in the U.S.?’ Several of you asked this question during the past few weeks. So we dusted off some reliable ‘stats’, e.g. 50,000+/- LLCommunities; 85% of which are 100 rental homesites and fewer in size; and 15% of which are larger than 100 rental homesites in size! Then we made two assumptions: the 85 percentile properties average 25 rental homesites apiece in size; while the 15 percentile properties average 150 rental homesites apiece in size. Then it was a simple matter of:

50,000 X .85 = 42,500 properties X 25 sites = 1,062,500 rental homesites

50,000 X .15 = 7,500 properties X 150 sites = 1,125,000 rental homesites

The two subtotals added together = 2,187,500+/- estimated number of rental homesites X 10% vacancy rate (reciprocal of 89.9 or 90% national physical occupancy rate reported in 22nd ALLEN REPORT) = 218,750+/- vacant rental homesites throughout the U.S., with probably 50% of this number classified as being ‘functionally obsolete’, i.e. generally in older landlease communities and too small to handle contemporary ‘big box = big bucks’ manufactured homes.

Wanting to ‘proof’ the preceding figures, we took recent information regarding MHI’s Community Attributes System (‘CAS’) program, to wit: “We have some data on approximately 19,000 (landlease) communities, containing 2.4 million homesites. Roughly 8,000 of these have 100 or more homesites, representing a total of 1.8 million homesites.” DR

Borrowing assumptions, from preceding paragraphs, our ‘proof’ penciled out this way:

8,000 properties X 150 sites = 1,200,000 rental homesites (vs. 1,800,000 @ CAS)

42,000 properties X 25 sites = 1,050,000 rental homesites

And the two subtotals added together = 2,250,000+/- estimated number of rental homesites X 10% vacancy rate = 225,000 vacant rental homesites throughout the U.S. Or, using the CAS figure of 1,800,000 rental homesites (among larger properties), plus 1,062,500 rental homesites among residual of smaller properties, grand total = 2,850,000.

Figurative ‘bottom line’? Total number of rental homesites, among approximately 50,000+/- landlease communities may range from 2,187,500 to 2,850,000, or average of 2,518,750 or roughly 2 ½ million rental homesites; and at 10% vacancy = 250,000+/- vacant rental homesites in landlease communities throughout the U.S.!

II.

‘MHI MHARRvelous Dream!’ begins with this unsolicited albeit critical commentary from a longtime community-investor.com blog ‘flogger’ (reader), setting the stage for what follows:

“MHI & MHARR have proved ineffective and uncaring in regards to financiers and street retailers. (Landlease) Communities have the only cohesion with which to survive and grow…. When communities go it alone, within a few years, they will drag first the retailers, then financiers, to their side. And unless something changes in manufacturers’ ‘love’ of Washington, DC., they will become the pawn of retailers, dealers, financiers, and communities – which ain’t such a bad idea, when you think of it, since they (the dealers, communities, and financiers) are the manufacturers’ customers.” N

Before we proceed with some specific examples, good and marginal, of advocacy body action and inaction in Washington, DC., let’s address a couple notions in the preceding paragraph:

First off, MHI & MHARR are not wholly ineffective and uncaring regarding the chattel finance and retail sales segments of the HUD Code manufactured housing industry. However, their continued disparate approaches (i.e. ‘go along to get along’ diplomacy/consensus building efforts versus ‘confrontation at every turn’ reform efforts) relative to industry issues advocacy, particularly those that are regulatory in nature and affecting the housing manufacturing segment, sure makes it appear, read, and be interpreted that way!

Communities going it alone? That’s doubtful now and going forward. Today, two of three real estate investment trusts (‘REITs’) and several of the ten largest portfolio owners/operators of landlease community property portfolios are direct and active members of MHI’s National Communities Council division. And now that the NCC, once again has a salaried executive, Lisa Brechtel, at the helm, membership numbers and national advocacy for the asset class, in Washington, DC., should only improve.

For those of you who read last week’s posting, ‘George’s Lamentyen Dimension’, you know there’re plans afoot to launch a new, national, not for profit platform to serve the data research & distribution, professional property management education, interpersonal & corporate networking, print & online communication, and deal – making needs of landlease community owners/operators nationwide, including Canada. Such a research and resource – oriented base will be a valuable supplement to advocacy bodies like MHI, the NCC, IREM, MAI, and other realty trade groups in the U.S., as well as CMHI, MHICanada, & CREA in Canada.

Now to those examples of good and not so good action and inaction, by manufactured housing advocacy bodies in Washington, DC.

First off, MHI’s undated White Paper, titled: DODD-FRANK IMPACT ON MANUFACTURED HOUSING, ‘Ensure Access to Affordable Credit in the Manufactured Housing Market’ should be ‘required reading’ for every businessman and woman active in the industry! To obtain a copy, phone Jason Boehlert @ (703) 558-0660.

Too many details to even start to parse here, but know that it’s only via efforts like this, political action by MHI & MHARR, and grassroots influence on federal legislators, will our industry be spared new regulations that’ll make it nigh impossible to fund future manufactured housing chattel loans of less than $78,000 – or even, some say, $50,000.

Then there’s MHARR NEWS, dated 10 June 2011., headlined: ‘INDUSTRY DECLINE WORSENS – DISINFORMATION PERSISTS. Well, I couldn’t find much evidence of specific disinformation, but I did learn 1) two things; 2) took strong issue with one posture; and 3) walked away with four unanswered questions:

Post – production defined. “…retailers, (landlease) communities, finance companies, insurers and other (nonspecified) service entities.” Whether you realize it or not, this is improved trade lingo; as heretofore, MHARR thought and wrote of ‘us’ as being the ‘aftermarket’, as in afterthought and afterbirth. You get the idea…

Then there was this stunning paragraph. “…over the past decade, manufactured housing production has declined by more than 86% (from 373,143 units in 1998 to 50,046 in 2010), while nearly 75% of manufactured housing production facilities (from 430 to fewer than 110 plants) and 7,500 retail (sales) centers have closed over the same period, resulting in the loss of more than 200,000 manufactured housing industry jobs throughout the United States.” Well, the 1998 home shipment total might be closer to 372,843; and, how ‘bout all those new sales jobs created on – site in new landlease community retail salescenters opened during the same time period? This question suggests MHARR spend more time ‘getting to know and understand’ post production folk, like you and me, before trotting out half – baked facts and uninformed opinions.

And this additional example. “…a renewed effort to alter and water down the statutory definition of a ‘manufactured home’ that would introduce ‘trailer’ elements and ‘trailer’ comparisons that the industry fought to end with the 2000 law (i.e. Manufactured Housing Improvement Act of 2000, or ‘MHIA@2000’ in short). And all of these have been packaged, portrayed and ‘spun’ to the industry grassroots as positives.” MHARR

Do YOU know what’s being talked about here? In a nutshell, ‘park model RVs’ (i.e. recreational vehicles that look like miniature houses, less than 400 square feet in size, a.k.a. ‘Granny flats’, and at present not subject to the HUD Code) are increasingly used as year round homes for snowbirds sojourning in Sunbelt regions, and folk struggling to survive our nation’s struggling economy. The issue is whether these homes should be brought under the HUD Code for regulatory purposes, or remain outside as RVs. Apparently MHARR believes ‘park models’ will pollute our HUD housing image.

MHARR appears to dismiss this idea ‘out of hand’, without soliciting any input from post production segments of the industry, with lively and timely interest in the matter. For example; ‘park models’, though more expensive per square foot in cost, are near ideal for siting on functionally obsolete rental homesites in landlease communities. Not saying this is right or wrong, simply that here’s a clear example of the left hand of the industry, figuratively speaking, not knowing what the right hand is doing, or perhaps prefers to do – in an effort to return HUD Code manufactured housing to it’s ‘affordable housing’ roots, i.e. smaller, less expensive homes, as in Community Series Homes or CSH, already discussed in previous blog postings at this web site. And, as was pointed out earlier in this very blog posting, there’re approximately 250,000 vacant rental homesites to fill across the U.S.! At the present level of annual shipments, that’s five years of work, right there!

Four unanswered questions. Then, under the guise of ‘Full & Proper Implementation of MHIA@2000’, MHARR offers four FACT SHEETs, describing perceived shortfalls:

‘HUD has not Appointed a Non – career Program Administrator.’ Agreed! What to do about it? No plan of action proposed in this document. Why?

‘Collective Industry Representation on the Manufactured Housing Consensus Committee or MHCC Must be Restored.’ Agreed! What to do about it? MHARR suggests: “HUD should immediately place non – lobbyist representatives of the industry’s national organizations (i.e. MHI & MHARR) on the MHCC as voting members.” Since they’ve not done it to date, it’s highly unlikely they’re going to read this and do it. So, what now?

‘HUD has undermined the role and authority of the MHCC.’ Agreed! What to do about it? No plan of action proposed in this document. Why?

‘HUD has undermined the independence of the MHCC.’ Agreed! What to do about it? No plan of action proposed in this document. Why?

To my mind, it doesn’t make much sense to identify perceived problems (i.e. Let’s consider them challenges and opportunities!) without making specific recommendations for action to effect substantial and timely change to the unwanted circumstance or circumstances. How’s the old bromide go, ‘If you’re not an integral part of the solution (even just suggesting one), you’re likely part of the overall problem!’ So, for a change, let’s move away from finger – pointing, and together seek answers to questions (as stated above) and solutions to the challenges and opportunities faced by our industry! GFA

***

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

George’s Lamentyen Dimension!

I.

“Thank You Jenny Hodge!” When I sat down to bare my business soul with you today, I knew the core message would be about change; change for me, and change for everyone involved in landlease (nee manufactured home) community ownership and management. For me, the following paragraphs are at first, a lament; then change, to a yen (a yearning) for the future. For you? Well, read and decide, if and how you want to be involved in change being planned and effected – as to with and by whom, we’ll soon experience research and dissemination of our asset class statistics, helpful information, even the perennial resources used to successfully run your landlease community business.

“Why Jenny Hodge?” Because she introduced me, a decade ago, to John P. Kotter’s Business Week bestseller, Leading Change. In it are apropos quotes, and an Eight Stage Change Process applicable to what’s occurring in the way we serve the data, information, education, networking, and deal – making needs of landlease community owners/operators nationwide. Just what change are we talking about here? Specifically,

Since 1980, when GFA Management, Inc., dba PMN Publishing was founded, we’ve functioned by default, as ‘a small, for – profit, national trade association’ (i.e. ‘No one else would do it!’), providing valuable services: data & information collection & dissemination, professional property management education & certification, as well as superb networking & deal – making opportunities for landlease community owners/operators nationwide, including Canada. Other than helping found the short – lived Industry Steering Committee predecessor to the National Communities Council (now division) of the Manufactured Housing Institute, we’ve had little to do with political and regulatory advocacy relative to our unique, income – producing property type. Now, everything described in the first sentence of this paragraph is undergoing change – due in part, to the drying up of supplemental funding from landlease community portfolio owners, and my desire to eventually retire. But retirement won’t occur before ensuring the above – identified services are funded, reorganized, and progressing as a national, not for profit coalition of landlease community owners/operators of all sizes, as well as interested realty academics, and specialty consultants. Hence the gist of this week’s blog posting about change.

Early in Leading Change, the author describes “Employees in large, older firms (e.g. George Allen & 30 year old GFA Management, Inc.) often have difficulty getting a transformation process started because of the lack of leadership, coupled with arrogance, insularity, and bureaucracy.” P. 29 That’s certainly true of me! I’ve been comfortable as ‘leader of one’ and frankly, unwilling to face change I knew would come; arrogant in the knowledge we were the only firm possessing the bulk of landlease community data and knowledge; insular (remote) tucked away in offices in semi – rural Indiana; and in my experience, often at bureaucratic odds with one or another trade group who didn’t appreciate our firm serving the information, education, networking, and deal – making needs of 500+/- landlease community portfolio owners/operators nationwide, during the past three decades.

How is this anticipated change to occur, and possibly appear, along the way? Well, the author, John P. Kotter identifies eight “…steps to producing successful change, of any magnitude, in organizations.” P.21. They are, with brief personal commentary:

Establishing a sense of urgency. “I can not & will not fund these services alone for long!”

Creating the Guiding Coalition. “That’s where we are today! Want to come aboard?”

Developing a vision and strategy. “Remember how we did this with the ISC in 1993?”

Communicating the change vision. “You’re reading it NOW, with more details to come!”

Empowering broad – based action. “ Yes, we’ll overcome obstacles & take some risks!”

Generating short – term wins. “Ah, that’s the exciting part. So much we can accomplish!”

Consolidating gains & producing more change. “Once this change vehicle is moving….”

Anchoring new approaches in the culture. “Finally, opportunity to improve our image!”

Change doesn’t get any more exciting than what’s being planned for the landlease community real estate asset class! The Good News is, the change has started. To keep abreast of it, read the Allen Letter professional journal each month. To subscribe, reach me via gfa7156@aol.com or MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Also (417) 346-7156. The Bad News? Can’t think of any – unless change doesn’t take place! At that point, the worst case scenario – for all of us, would occur if I, figuratively speaking, ‘pulled the plug’ and retired. At that point, there simply wouldn’t be any further landlease community operating data & information collection & dissemination, professional property management education & certification, weekly and monthly print and online communication among peers, nor superb interpersonal networking & unique deal – making opportunities, throughout North America, until another entity comes along.

With a parting word of sincere appreciation to Jenny Hodge, for bringing Leading Change to my attention a decade ago, here’s the final paragraph from Kotter’s book:

“…people who are making an effort to embrace the future are a happier lot than those who are clinging to the past. That is not to say that learning how to become a part of the twenty – first – century enterprise is easy. But people who are attempting to grow, to become more comfortable with change, to develop leadership skills – these men and women are typically driven by a sense that they are doing what is right for themselves, their families, and their organizations. That sense of purpose spurs them on and inspires them during rough periods.” P.186. With that said, it is indeed the time for us, as landlease community owners/operators, to embrace the future, and do what is right for our business interests going forward!

By now you likely understand my taking poetic license with ‘George’s lament for the present, and yen for the future’; combining those words into a ‘lamentyen dimension’ for the months, even years ahead. So, will you and your landlease community(ies) be part of this unfolding change process?

“And finally, just who is Jenny Hodge?” Most manufactured housing industry folk fondly recall her from the years she spent on the corporate staff of American Modern Insurance. Well today, she’s vice president of marketing for American Integrity Insurance Group in Tampa, FL. Many of us got to visit with her this Spring at MHI’s annual Manufactured Housing Congress in Las Vegas, NV.

II.

As you know, we have a busy Summer ahead. I missed attending FEMA’s Small Footprint HUD Temporary Housing Unit (THU) Industry Day on June 7th, because, frankly, GFA Management, Inc., dba PMN Publishing, couldn’t spare the $1,000.00 it would have taken for the flight, airport parking, hotel room, transportation, and meals in downtown Washington, DC. As a sad result, the 50,000 landlease community asset class was not represented by an owner/operator (That I’ve heard about to date), in a meeting where we could easily have made knowledge of vacant rental homesites known (per MHI’s CAS Program), for use in the time of need for emergency housing resources. A missed opportunity indeed; and, one more reason, why the change described in part I of this week’s blog is both necessary and progressing. Understand about 50 participants attended FEMA’s Small Footprint HUD Temporary Housing Unit (THU) Industry Day.

Try not to miss the Manufactured Housing Manager (‘MHM’) class scheduled for 20 July in Horseshead, New York, hosted by the NYHA. This one day ($250.00) professional property management training and certification class (program) has already designated nearly 1,000 MHMs, during the past ten years, who now own and operate landlease communities throughout North America. To register, phone Nancy Geer @ (518) 867-3242. What do you get, besides practical property management training by a CPM® member of the Institute of Real Estate Management® and landlease community owner? Copy of Landlease Community Management, monograph of contemporary manufactured housing industry readings, and a gold MHM pin and MHM certificate. If you own or manage one or more landlease communities, you owe it to yourself to attend and become certified!

Then there’s 1 August 2011. About 400 MHIndustry & RVIndustry aficionados will gather late afternoon that day, for a reception, followed by a Hall of Fame Induction Banquet, at the beautiful RV/MH Heritage Foundation’s Museum & Library facility in Elkhart, IN. Several MHIndustry folk will be inducted this year, from manufacturing and landlease community segments of the MHBusiness. By the way, a golf tournament is also scheduled earlier the same afternoon. Want to attend? Phone (800) 378-8694 or (574) 293-2344 for information. And if you’re a landlease community owner/operator and want to participate in one or both private networking opportunities after the induction ceremony, phone Dennis Ohnstad @ (217) 493-0083 or via drohnstad@aol.com

And finally, there’s the Triple Anniversary Networking Roundtable, 14 – 16 September 2011, at the beautiful Hyatt Regency Hill Country Resort & Spa on the western edge of San Antonio, TX. For a trifold brochure listing the nearly two dozen exciting topics and terrific presenters scheduled, phone the above – referenced MHIndustry HOTLINE or (317) 346-7156 and request it. This year, we’ll be celebrating the 75th anniversary of the Manufactured Housing Institute, 20th anniversary of the International Networking Roundtable, and 15th anniversary of MHI’s National Communities Council division. Also contemplating one or more Community Series Homes to be on display during the networking roundtable venue. Plan to attend!

***

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

Alphabet Soup Firms Acquire 74% of Landlease Communities
In Hometown America’s Portfolio!

&

Letter ‘C’ HUD Code Home Manufacturers Encouraged to
Rejuvenate Their Languid Industry!

&

Thanks for Making June 1st a Special Day for Me!

I.

“I am writing to announce Hometown America has reached an agreement with Equity LifeStyle Properties (‘ELS’) to sell 76 communities…We are scheduled to close on the sale of the first 39 communities on July 1, with the balance of the communities expected to close before the end of November.

As you are aware, we are also scheduled to close on the sale of 16 communities to AMC over this same time period. After the sale of the ELS and AMC portfolios, Hometown will be a much smaller company with 32 remaining communities.” Rich Cline (lightly edited. GFA)

So the company announcement, dated May 31, 2011, reads. But what doesn’t the communiqué tell us?

• ELS, Inc., is acquiring a portfolio of 76 landlease communities containing 31,167 rental homesites on approximately 6,500 acres in 16 states (primarily in Florida and the northeastern region of the U.S., and “certain manufactured homes and loans secured by manufactured homes located at the Hometown Properties…for a stated purchase price of $1.43 billion.”…at an estimated 6.7% cap rate ‘assuming the acquisition was completed on 1 January 2010.’ (That’s the right date. Think about it…) Extracted from an ELS, Inc. press release cited in E – Trade news.

• Previous bullet point news prompted these observations and calculations from a fellow landlease community portfolio owner/operator who’s pretty good with numbers. “The $1.43 billion works out to about $45,000 per rental homesite. Wonder how many of those are vacant? Apparently there are manufactured homes included in the deal as well. Even if as many as 25% of those sites were occupied by homes bought for $20,000. apiece, the per site cost of this deal is still almost $41,000. In addition, the deal appears to be funded by nothing more than debt and the sale of stock, with most of the debt maturing in six years. Good luck ELS!”

• ELS, Inc. property portfolio grows in size, from approximately 307 landlease & RV communities, as cited in the 22nd annual ALLEN REPORT @ 1 January 2011, to approximately 383 properties. ‘Approximately’, as a few properties are almost always ‘in play’, either being acquired or sold during the normal course of business. No change in ranking, however, as ELS, Inc., has long been identified as largest owner/operator of this income – producing property type in the world!

• Hometown America, once the two portfolio transactions are ‘closed’, will drop from 124 landlease communities (despite showing 127 on aforementioned 22nd ALLEN REPORT) to 32. Depending on the actual ‘rental homesite count’ of the 32 retained properties, this could conceivably drop the firm from its’ #7 ranking, down to somewhere in the mid – twenties. Word has it Rich Cline and two senior execs will continue to manage the landlease community portfolio for the Pacific Northwest pension fund owner.

• AMC is the abbreviated name of the new firm to manage 14 ‘other landlease communities’ being acquired from Hometown America. AMC? One wag suggested a rejuvenated American Motors Corporation (i.e. ‘Remember the Gremlin?’). But no, knowledgeable folk claim it’s American Manufactured Communities, established (or to be established) by CAP REIT, an apartment REIT, headquartered in Canada, who’d eventually like to launch an IPO (Initial Public Offering of stock), as a new REIT, here in the states.

• Why reference to an alphabet soup of firm names? Well, beyond ELS, Inc., and AMC, cited in the previous bullet points, the following letter abbreviations appear in the 22nd annual ALLEN REPORT: RHP Properties; YES! Communities; MHPI; UNIPROP; KDM Development; CRF Communities; UMH Properties, the REIT; former CREICO, now Ascencia; SSK Communities; NTH Property Management; HCA Management; A.L.S. Properties; QCA Management; KAFCO, Inc; PLJ, Inc; M.N.A. Investments; MUREX Properties; and, MISA Corporation. And there are many more, beyond the 137 ranked in the report.

Rich Cline, writing in the final paragraph of the company announcement, cited earlier, concludes,

“…I want to thank everyone for their commitment and dedication to Hometown over the past 13 years and ask for your understanding and support as we move to this next phase in the life of Hometown.”

As a long time industry observer, who along with Bill Geary, CPM, from California, was ‘present at the birth of the Hometown America’, when founded by Randy Rowe, it’s been an interesting, and at times exciting scenario to watch unfold and document, as the firm grew in size through acquisition (Remember former REIT Chateau Communities, Inc. acquired in 2003, two years after it had acquired CWS Communities?), and ownership change. This acquisition announcement too suggests an answer to the mystery of CEO Greg O’Berry’s abrupt departure earlier this year. Next phase in the life of Hometown, as well as ELS, Inc., and AMC? ‘Stay tuned’, as it’ll surely make for an intriguing ‘read’ or two, over time.

Speaking of which, ‘News of the ELS, Inc., AMC, & Hometown Transactions’ has already been written into the manuscript of the new ‘historical retrospective’, scheduled for release at the RV/MH Heritage Foundation’s Hall of Fame Induction Banquet, 1 August 2011, in Elkhart, IN. Book title? Landlease Communities, Manufactured Home Communities, Mobile Home Parks, Trailer Courts & Camps, and Affordable Housing. Formal invitations to this annual gala event are ‘in the mail’, but to ensure your opportunity to attend, phone (574) 293-2344. Hint. If you’re a personal friend, and or business colleague, of this blogger, contact landlease community owner/operator Dennis Ohnstad, to learn of additional ‘networking events’ planned later that evening and next morning, ‘for everyone in the LLCommunity business’: (217) 493-0083 or drohnstad@aol.com

II.

Letter ‘C’ HUD Code home manufacturers are hereby encouraged to rejuvenate the/their/our languid, listless manufactured housing industry! In the dog – eat – dog world of HR (Human Relations) employment headhunting, reference to ‘C level executives’ is trade lingo for job openings and applicants at the CEO, COO, CFO, & CTO level. In the HUD Code manufactured housing industry arena, letter ‘C’ firms are: Clayton Homes, Cavco Industries, and Champion.

By way of quick review; Clayton Homes, Inc., in terms of number of new homes shipped, boasts a heady 48 percent national market share. Cavco Industries, Inc, recent acquirer, through bankruptcy proceedings, of Fleetwood and Palm Harbor firms, enjoys a growing market share. And Champion Home Builders, Inc., recently emerged from bankruptcy, reportedly stronger than beforehand, commanded a 6.5 percent national market share at the end of 2010.

With that said; what are they to do? I don’t have a particular plan, but all three of these ‘C’ firms are headed and led by smarter men than me:

• Kevin Clayton at Clayton Homes, Inc., in TN, a Berkshire – Hathaway Company
• Joe Stegmayer at Cavco Industries, Inc., in AZ
• Jack Lawless, CEO, at Champion Home Builders, Inc., in MI.

But I do know this; as an industry, we can only bump along at a 60 year nadir (‘the lowest point’) of housing production for only so long (i.e. 50,000+/- new homes shipped nationally during each of these years: 2008, 2009, & 2010), before we are no longer viable! So, what are some of the tough love possibilities?

• Letter C firms finish buying up the smaller HUD Code home manufacturers, as they fear is going to happen anyway, and consolidate HUD Code manufactured housing into a half dozen (+/-) firms, per automobile industry history early in the 20th Century. Then move ahead as one focused, consolidated, powerful presence!

• Letter C firms sit down and ‘make truly friendly’ with the smaller, and in some cases financially secure, HUD Code home manufacturers in the South, Midwest, and West, to end differences relative to manufactured housing dealings with federal regulators. Then move ahead as one focused, consolidated industry voice!

• Discuss, speculate and decide whether the HUD Code manufactured housing industry is stronger and better served in our nation’s capitol, by dint of a singular manufacturing/distribution focus, supplemented by a strong working relationship with a sister advocacy body representing all other segments, realty and otherwise; OR, ascribe to either of the previous bullet points (Neither of which is in effect today!), & continue unchanged, appearing to be ‘one big happy family’ – but not!

There’s nothing new in those three bullet points! Each is a relatively frequent, ongoing topic of sometime heated conversation, even debate, wherever and whenever manufactured housing and landlease community aficionados, purists (Some would say Luddites) and self – described progressives alike, gather. All this industry observer suggests is, with as much consolidation taking place among manufacturing firms, during these past three years of ‘only 50,000 home shipments’, perhaps we’re at or near a ‘tipping point’ that could (maybe) reshape our industry and asset class for years to come.

All I ask, and hopefully you blog floggers (readers) agree, of these aforementioned leaders, and others who wield influence; ‘Don’t attempt such a paradigm change alone! Solicit input and buy – in from grassroots manufactured housing business peers ‘with skin in their games’; consider all the options (e.g. Return to truly affordable housing; ensure the Manufactured Housing Improvement Act of 2000 is finally fully implemented; emphasize Community Series Homes design; make far better use of Business Development Managers to access landlease community owners/operator who need new homes; and the list goes on…), and communicate broadly and continually, in print and online, as the process proceeds!

Otherwise be guilty, as observed by a blog flogger commenting on last week’s posting, with its’ nod to the ‘Great & Greater Conspiracy’ topics, of a few weeks earlier:

“Perhaps, aside from NAHB and HUD, the most hurtful conspiracy of all is the ‘not conspiracy’, where (manufactured housing) executives, including our national and state associations, say ‘Not my job!’, when it comes to saving our industry! Keep hammering George.” And I plan to do so….GFA

III

THANK YOU!

For what? The many impromptu birthday greetings, by telephone, attractive cards, and email messages, on Tuesday 1 June. Can truly say, those were the most remembrances I’ve ever received on any birthday. Geesh. Maybe I should turn 66 more often. Not!

Anyway, that evening, Susan and Adam, our adult children, showed up at home with all but one grandchild in tow (Travis is away at USMC boot camp in San Diego, CA.), and of course our two great grandchildren, Hunter and Peyton. And not to forget Flossie, Carolyn’s 98 ½ year old Mother who lives with us. A very nice end to a near perfect day! Know what Carolyn gave me? An amazonkindle. So, I’m learning something new this weekend.

THANK 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

Postscript.

Just received an advance copy of June’s issue of the Allen Letter professional journal. Can this possibly be the ‘best one ever’? Maybe. Not only a preview of this year’s Roundtable event (Including registration brochure), but SOLSTICE Communities’ Good Neighbor Pledge (A worthy template for every LLCommunity owner/operator!), Michael Power’s Mantra: ‘The Manager’s job is mostly outside the office, not inside!’ – and rationale following. Then there’s a color photo of a 13X40 British ‘manufactured home- called a caravan over there. Also photos of a Redman ‘Community Series Home’ or CSH, with recessed front and back steps! Lagniappes? Four: an Ascentia brochure (Remember CREICO?), CSH brochures from Fleetwood and Champion; and this month’s Signature Series Resource Document: the 2nd annual Official Manufactured Housing & Landlease Community Lexicon & Glossary of Trade Terminology. All this and more (i.e. 11 additional monthly issues of the newsletter) for only $134.95/year. How can you possibly manage your business, and properties, without it? Phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or (317) 346-7156 – or via this website, to Subscribe!

New Landlease Community (History) Book to Debut August 2011;

More Conspiracy Talk; youtube; MHArt & FEMA Housing Input!

(More than 350 MHIndustry & LLCommunity Executives Read This Blog Each Week!)

I.

We’re far enough along to announce publication of my fifth book about manufactured housing & landlease (nee manufactured home) communities. This one has the longest, but entirely apt, title for any such non – fiction business book text to date:

‘Landlease Communities, Manufactured Home Communities, Mobile Home Parks, Trailer Courts & Camps, and Affordable Housing.’

The book will debut at the RV/MH Heritage Foundation’s Hall of Fame Induction Banquet, in Elkhart, IN., the evening of 1 August 2011. Invitations to this annual event are almost ‘in the mail’, but if you don’t receive one by mid – June, and desire to join 400 of your manufactured housing and recreational vehicle peers at the industry’s Social Event of the Year, phone (800) 378-8694 or (574) 293-2344 for tickets.
Frankly, ‘anyone who’s anyone’ in these sister industries and asset class, will be present that evening, to tour the museum and library, hobnob with business leaders and industry pioneers from throughout the U.S., and honor the Class of 2011 as they’re inducted into the prestigious RV/MH Hall of Fame.

If you thought the 22nd ALLEN REPORT (a.k.a. ‘Who’s Who Among Landlease Community Portfolio Owners/operators in North America!’) was a ‘good read’, earlier this year, you haven’t seen anything yet! How so? Here’re chapter titles of the new book, as they pre – press appear today:

• How I Got My Start in the Landlease Community Business

• ‘Retrospective to 1988’, first published in 2008, updated in 2011.

• Overview of the Landlease Community Realty Asset Class

• Signature Series Resource Documents

• The Affordable Housing Component

• Summary

Any surprises? Suppose that depends on your business perspective and related matters.

For example, this sentence from the Preface will likely get some folk’s blood – a – flowing, either in hopeful anticipation, or by dint of abject frustration: “To a growing number of manufactured housing purists and aficionados, the industry’s return to affordable housing is likely its’ only possible salvation….”

And this triple mystery in the Dedication: “This book is dedicated, in sincere personal appreciation, to three men who’ve never met.” Here’re three hints: One got me started in this business. One Ensured Landlease Community Owners/operators Nationwide Advanced to Where We Are Today – Without Them Even Realizing It. And One is a Manufactured Housing Manager® known to ‘Manage his landlease community like he owns it!’

That’s all I want to pen about the new book at this time. But trust me when I say, You’ll want to be among the first to obtain a copy, as it’s chock full of information about our unique income – producing property type – unavailable anywhere else! We haven’t set a price on it yet, and will likely limit the print run to 500 copies; which if anything like the 22nd ALLEN REPORT, it too will nearly sell out within a few months of its’ release. Speaking of the ALLEN REPORT, if you’re reading these lines, and have yet to acquire and read/use ‘your copy’, this Special Offer is still in effect: For $250.00, receive a copy of the 22nd ALLEN REPORT, and one year subscription to the Allen Letter professional journal! Simply phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or (317) 346-7156 and order it using a credit card. We have a few dozen still in inventory.

We’ll announce pricing and ordering instructions for

‘Landlease Communities, Manufactured Home Communities, Mobile Home Parks, Trailer Courts & Camps, and Affordable Housing’

later, in future blog postings at this website, and via press releases in our newsletters.

II.

Remember the blog posting in early April, titled: CONSPIRACY THEORISTS, GATHER YE AROUND! – ? We sure do. Not a week goes by that blog floggers (readers) don’t contact me by email and phone, to share personal and unique spins on ‘The Great, and Greater Conspiracies’ described back then. But there hasn’t been much ‘new news’, along these lines, until recently….

What’s emerging today is the growing consensus, We’re an industry likened to a ship without a rudder, drifting aimlessly on the still – troubled waters of our national economy, languishing (new) housing market, and no new sources of third party chattel capital. These inquirers routinely ask, ‘When will manufactured housing leaders caucus nationally, agree on a workable plan, and give our industry practical focus toward the future?’ (Excuse me when I point out how that very question reads akin to sentiment expressed by landlease community owners/operators prior to the first of two National State of the Asset Class (‘NSAC’) caucuses; first held 2/27/2009 in Tampa, FL, second on 2/27/2010 in Elkhart, IN. Hmm.) Might there be a timely and pointed message or suggestion here; like, ‘What was good for the goose, might well be good for the gander as well?’ Sure don’t want to wait till 2/27/2012 for next NSAC caucus, but ‘What the hey.’

Frankly, I don’t see the matter really that dire – yet. I believe we have capable, experienced, motivated elected and salaried manufactured housing leaders in place! Hopefully they’re already looking to the future in our behalf, articulating a recovery plan of sorts – though I haven’t heard any requests for ‘input from (us) grassroots folk’ yet. But know what’s sorely missing from the recovery equation, though rarely discussed – if and when the time arrives to ‘go public’ with ‘a plan’? The method(s) by which such a plan is effectively published or broadcast, is severely limited at this time. How so? Neither MHARR or MHI have general trade broadcast ability to non – members; the Merchandiser, Modern Home, and Automated Builder magazines are gone; the Allen Letter professional journal & the Allen CONFIDENTIAL! are limited circulation, subscriber – supported newsletters; and, The Journal, in this industry observer’s opinion, rarely seeks out and publishes trade NEWS beyond two, sometimes sparring, columns penned by MHI & MHARR executives. Those avenues simply won’t get the job done! Only means left, are online ezines which, as good as they’ve become this past year, have yet to realize the stature afforded major journalistic media publishing hard news. So, all those communication constraints combine as ‘one more severe hindrance to our industry’s recovery’.

But that’s not the only ‘conspiracy news’ (i.e. Conspiracy being, “Why isn’t this plan happening? Someone waiting to build market share on the back of their peers”, etc..) that we’re hearing these days. No, we’re also being asked weekly, “Who will be researching the ALLEN REPORT this Fall; Who will compile the landlease community portfolio data; and, Who will publish the new 23rd edition in January 2012?” And that’s not all, lenders and other landlease community owners/operators regularly inquire about continuation of the annual (realty) lenders’ registry they’ve happily referenced, for free, these past 13 years; and ask, “Who will publish the Allen Letter professional journal?” The conspiracy theorists pose this question? “Why isn’t this happening? Someone waiting to cannibalize our resources, and silence the open communication we’ve enjoyed for 20 years?” It doesn’t help when I decry knowledge of any conspiracies; these folk have their own ideas. What ‘good news’ I can offer, however, is there won’t be any significant change in authorship, between now and the end of the year – except for the possible addition of a partner intent on improving the ALLEN REPORT package of information and statistics. But it’s a little early yet, to tell you more details than that.

III.

Miss the MHCongress in Las Vegas? Get a taste of it by going to youtube.com/watch?y=uj3RE1DnnLI Here, Suzanne Felber, Lifestylist® has put together a collage of interviews with various MHIndustry leaders. Well worth watching! Suzanne will be at the Triple Anniversary, Networking Roundtable in San Antonio, TX., @ 14 – 16 September, teaching LLCommunity folk how to effectively furnish, accessorize, and ‘show’ new Community Series Homes on – site in our communities. For information on the Roundtable, phone the MHIndustry HOTLINE listed in para. I.

Did you catch Marisa Murrow’s manufactured housing and landlease community – themed artwork (i.e. paintings & miniature ‘mobile homes’) at the MHCongress? Whether you did or not, it’s worth a visit to her website: http://www.marisamurrow.com

IV.

Looking for something not terribly exciting but maybe necessary to do, on Tuesday, June 7, 2011, from 8AM to 5:30PM? Well, if you’re a HUD Code home manufacturer, and want a piece of future disaster housing production action, you’ll be at the U.S. Access Board, located at 1331 F. Street, NW., Washington, DC. 20004. Registration is required by Friday, June 3, and only one person per firm. To register, email FEMA-Industry@dhs.gov, and on SUBJECT line, put: ‘Small Footprint THU Industry Day Registration’, and include company name, address, attendee name, phone number, and email address. Have questions? Phone (202) 646-1895 between 8AM & 4PM EDT, workdays. I’m even considering attending. If we don’t take this opportunity to input FEMA’s design for future housing product, who’ve we got to blame if we don’t like what they decide? This is a good example of the old bromide: ‘If you’re not part of the solution, you’re likely part of the problem!’ Think about it, and ‘if the house fits’, attend the ‘Small Footprint THU Industry Day’ in Washington, DC., all day Tuesday, June 7, 2011. For more information, phone Lois Stuckey @ MHI: (703) 558-0600.

***

ANNOUNCEMENT. As most veteran manufactured housing and landlease community businessmen and women know, the annual International Networking Roundtable is a ‘by invitation only’ event planned primarily for LLCommunity owners/operators and realty and chattel loan originators. We only exercise the Allen Letter professional journal subscriber list, and our exclusive, confidential data base of 500+/- property portfolio owners/operators, when sending out invitations each year. SO, if you want to attend this year’s Triple Anniversary, 20th annual Networking Roundtable, but haven’t been selected as one of the two dozen presenters, inquire as to sponsorship opportunities, and or an invitation to attend as a LLCommunity owner/operator. Phone (317) 346-7156 to do so.

***
George Allen, CPM®Emeritus, MHM®Master; Consultant to the Factory – built Housing Industry & The Landlease Community Real Estate Asset Class. (317) 346-7156

‘Of What Are WE Afraid & Unafraid?’

Mystery Shopping, Dodd – Frank Fallout, Future of HUD Code Housing, & More

I.

Mystery Shopping. Landlease (nee manufactured home) community owners/operators, portfolio ‘players’ and sole proprietors alike, rarely have their valuable income – producing properties professionally ‘shopped’. Why?

It’s been said of Mickey Mantle, and now a world famous golfer, known for their perennial leg injuries, ‘They’re billion dollar talent on dime store legs.’ Same metaphor appears to apply to most properties in the LLCommunity realty asset class! We routinely put multimillion dollar investments into the hands of oft untrained; rarely certified; frequently underpaid; and loosely – if – that, job performance evaluated (By independent, third party Mystery Shoppers with no personal or job security axe to grind) on – site management and sales staff! Think I exaggerate? Ask yourself, if a community owner: ‘When did we last train and certify (e.g. ACM or MHM designations) our managers, as well as home sales staff (e.g. PHC designation), and have the property and or sales centers professionally ‘mystery shopped’? Your answer disturb you enough to right those wrongs?

What’s it cost to do so? Between $500 and $1,000 per property for a comprehensive evaluation and written report, effected by a capable, experienced, motivated Mystery Shopper (or firm) who ‘visits’ the subject property(ies) by telephone; via the internet – if there’s a dedicated website; and, in person, to conduct anonymous, unscheduled ‘interviews’ with appropriate staffers, after touring the property documenting (photographing) marketing, resident relations, curb appeal, and rules/regulation shortfalls.

Why isn’t Mystery Shopping the job performance evaluation as routine for the LLCommunity asset class as it is for the conventional apartment property type, and builders/developers of site – built housing? In a word, ‘professionalism’, or lack thereof. Within the apartment management, and housing sales disciplines, it’s commonplace to regularly measure, and accordingly adjust, off and on – site marketing measure effectiveness (e.g. Does your staff keep a record of incoming telephone inquiries & visits to the property? More important, are these tallies studied weekly and used?) , as well as OJT performance of leasing and sales teams. In my opinion, there’re additional nefarious, not – so – obvious reasons to ‘not shop’. In the first instance, regional and executive property managers frequently ‘fear’ having their assigned properties ‘shopped’, because results, first time around, are rarely ‘pretty’. In fact, they’re downright awful. All sorts of ‘problems’ with marketing – or, as it turns out, lack thereof; obvious symptoms of sour resident relations, lousy curb appeal (unforgivable), even selective enforcement of rules/regulations becomes glaringly evident. And guess whose fault that is? So, we’re talking job security here, and not just for the on – site sales and leasing staff. Another reason? Frankly, it’s downright difficult to find Mystery Shoppers who know and understand the basics, let alone nuances, of LLCommunity property management and new/resale home sales, even finance. And guess what? That’s not going to change anytime soon, if the major property portfolio folk don’t ‘get on the stick’ and have every one of their income – producing properties professionally ‘shopped’ at least annually – preferably, several months before their local housing market’s leasing and sales season begins.

What to do? Hire a professional Mystery Shopper to visit and evaluate your properties! Contact MHI/NCC and request they address this performance evaluation void at a future meeting. See if the National Apartment Association has a list of Mystery Shoppers who might be comfortable learning the LLCommunity business. Maybe even hire and train your own in – house ‘shopper’. Better yet, talk to Michael or Tim in Florida, Candy in California, Curtis in Texas, Greg in Oregon, John in Chicago, ‘Mac’ or me in Indiana. Need contact information? Let me know via (317) 346-7156.

II.

Dodd – Frank Fallout. Geesh! This bill isn’t even law yet, and finance – related businesses are closing, simply to avoid having to put up with the more onerous of its’ proposed/planned regulations. Already, ‘former employees’, perhaps even potential borrowers, are paying the price for what, to many of us, appears to be excessive regulatory reach into the financial sector. Here’s the plaint of one blog flogger (i.e. reader) writing to us this past week…

‘Dodd – Frank forced us to close our mortgage company in ___________ , and lay off several employees. Reason? Our capitalization with _______________(a major bank) as our JV partner, was slightly in excess of $1,000,000. We were not a broker, but a direct lender, using the bank’s money. Under Dodd – Frank, unless you have a ten million dollar capitalization, you get classified as a broker. And as a broker, you have additional disclosures, the required language of which pretty much scares your customers away to a direct lender. So, we are out of business. Multiply that many times, in every community in America. An apt example of ‘the law of unintended consequences’, as well as job and prosperity killing legislation!’ (lightly edited. GFA)

Remember last week’s blog expose’, describing how the Dodd – Frank bill is maybe the ‘final nail in the coffin of chattel finance’, where manufactured housing is concerned? Whereas the necessity of added fees, will necessitate a minimum manufactured housing loan of $78,000.00., to simply ensure the return of basic and added fees to a chattel lender. And outside certain high – priced local housing markets, how many times do we see manufactured home loans, especially on resale homes, in excess of $78,000.00?

III.

Speaking of the future of HUD Code manufactured housing. During discussions this past week, attempting to match FEMA’s recurring need for emergency shelter for disaster and storm victims, with manufactured housing in general and Community Series Homes (‘CSH’) in particular; with, tens of thousands of vacant rental homesites in landlease (nee manufactured home) communities, across the U.S., the following paragraph popped up, summarizing one of the unfortunate stalemates that continues to stymie our industry/asset class in Washington, DC.

‘As long as HUD continues to consider the MHIndustry as being in the ‘trailer business’, by dint of their relating to us in terms of the 37 year old HUD Code, we ARE temporary housing – as defined and required by FEMA, towed to installation sites on a steel chasis! However, when HUD finally and fully implements provisions of the Manufactured Housing Improvement Act of 2000 – now in bureaucratic limbo for 11 years, but designed to position ‘manufactured housing’ on par with site – built housing, we’ll likely loose the negative stereotype associated with temporary housing!’ GFA

There you have it in the proverbial nutshell. Guess the obvious question that begs answering is this: ‘What are our two national manufactured housing advocacy bodies, in Washington, DC., doing to see that MHIA@2000 is finally and fully implemented during 2011?’ What’s the above – referenced ‘FEMA, CSH, LLCommunity discussion’ all about? Again, look back at the Open Letter to the MHIndustry, in last week’s blog posting at this site. To participate, contact Spencer Roane via spencer@roane.com

IV.

Triple Anniversary, International Networking Roundtable. Last week’s blog posting titillated you with a smorgasbord of timely, cutting edge topics scheduled for this year’s annual Roundtable event, 14 – 16 September at the Hyatt Regency Hill Country Resort & Spa on the western outskirts of San Antonio, TX. This time around? Let me ask you: ‘Where else, during 2011, even 2012, will MHIndustry aficionados and LLCommunity owners/operators, hear the likes of Joe Stegmayer (Cavco Industries & MHI chairman), David Lentz (American Land Lease), Joe Adams (Housing Marketplace), Lisa Brechtel (MHI’s NCC exec.), Spencer Roane (Pentagon Properties), Don Westphal (LLCommunity rehab specialist), David Gorin (RV guru), Earl King (underground leak detector), Suzanne Felber, Lifestylist®, Ed Hicks, Donna Rishel, Greg Harmon, Stephen Wheeler, Pat Ford, Jack Johnson, Mike Bowen, Dr. David Funk, Jeff Mishkin, Susan McCarty, and your truly? Answer: Nowhere else! And don’t forget, we’re celebrating three anniversaries this year: MHI’s 75th, Roundtable’s 20th, & NCC’s 15th! Be there! After last week’s blog posting, we received a dozen requests to receive invitations to the Roundtable. How ‘bout you? Are you on the short list? Be sure; call the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or (317) 346-7156.

V.

Manufactured Housing Manager professional property management training and certification class scheduled! At the request of many of you reading this weekly blog posting, we’ve scheduled the popular one day MHM class, to be hosted by the New York Housing Association, on 20 July 2011. Interested? Contact Nancy Geer via (800) 721-HOME or (518) 867-3242 to register and obtain local hotel information. Retirement Estates of Big Flats, in Horseheads, New York, is the host LLCommunity where this superb educational event will be held, from 8AM thru 4PM. Cost? Only $250.00 per MHM candidate. For this, you receive a copy of the asset class classic, Landlease Community Management, a monograph of contemporary MHIndustry ‘readings’, gold MHM pin and MHM Certificate! To date, nearly 1,000 MHMs own/operate LLCommunities throughout North America. And this is the only professional property management certification class taught in the U.S. by a LLCommunity owner, & Certified Property Manager®Emeritus, of the prestigious Institute of Real Estate Management®.

Ask your state MHAssociation exec or governing board, to schedule the one day MHM professional property management training and certification class in your state! When a class contains more than ten MHM candidates, the association is rebated $50.00 per student; so, with a class of 25 (max size), that’s a potential of $1,250.00 income for the association. And if the class is held on – site, like the one in New York, other than promotional mailings, there’s little cost to the state MHAssociation. Phone (317) 346-7156 for details.

VI.

Still looking! At one time or another, we’ve all heard about, seen, bought, even used weather radios, smoke alarms, burglar alarms, radon detectors, and on and on. Well, several years ago, when weather radios were all the rage at MHI meetings, I opined the perfect, needed device, for voluntary installation and use inside HUD Code manufactured and modular homes, as well as in site – built homes, is a hardwired – with battery backup, electronic device that ‘triples’ as a weather (tornado alert) radio, smoke alarm, and intrusion device! Well, guess what? Still waiting for such a multipurpose device to appear on the national housing market. Anyone out there, reading this blog, have a line on such equipment? If so, please let me know. Why? A national market awaits! Call MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

VII.

Gossip? Received this terse email message from ‘a friend in the MHBusiness’ earlier this week: ‘With the proposed $35.00 charge (subscription) for The Journal, starting August 2011, is it too early to plan a wake? Sad.’

Turns out it’s true. “You will continue to receive your copy of THE JOURNAL free until August 1, 2011. Thank you all for over 30 years in business. We look forward to serving you in the future.” Jim Visser, Publisher.

Why is this news? Because, if there’s no alteration to this announcement, the last of the ‘free’, advertiser – supported trade publications passes from the MHIndustry scene! As you’ll likely recall, Community Management was the first to disappear, then a couple years ago, Modern Home and Systems Building magazines; and during Fall of 2009, the venerable Manufactured Home Merchandiser ceased publication, followed shortly thereafter by Don Carlson’s Automated Builder magazine.

If you’re an Allen Letter professional journal subscriber (as most readers of this weekly blog posting are); you know, from the ‘2nd annual Official Manufactured Housing Resource for Print & On – line Media, plus Social Networking Web Sites’ directory, enclosed with May’s issue, that The Journal, the Allen Letter professional journal, and the Allen CONFIDENTIAL!, after 1 August will be the three remaining, subscriber – supported, national print trade publications, supplemented by five online newsletters and ezines, including this weekly blog posting. For a free copy of the above – referenced directory, call (317) 346-7156; and while you’re at it, if not already a subscriber to the Allen Letter professional journal, do so @ $134.95/year. The ‘Do – it yourself Guide to Social Media’, featured in the directory is incomparable, and was prepared by Lifestylist® Suzanne Felber or The Home Idea Factory.

***

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

August 1st Might End MHBusiness Chattel Finance as We Known It & September 14-16 to Celebrate 3 MHBusiness Anniversaries!

I.

Dodd – Frank Act, as it stands ‘today’, will likely break our MH $ Business!! Huh? That’s right. Letters are already going out to MHRetailers and LLCommunity folk (I’ve seen them), warning of the likely end, on 1 August 2011, of all chattel finance for manufactured homes selling for less than $78,000.00! Tragically, most MHIndustry & LLCommunity businessmen and women aren’t even aware of this end game scenario – our industry’s veritable Armageddon, despite best efforts by MHI and others to stop it!

Rationale for above headline & statement? MHI’s Dodd-Frank Task Force uncovered provisions in the Act that force lenders (‘Including LLCommunity self – finance programs!’), into increased fixed transitional costs amounting to about $4,000.00 per loan, above existing costs. Furthermore, since the great majority of chattel loans fall into ‘high risk’ and or ‘high interest’ categories, ‘closing costs’ are limited to 6% of the amount being financed. To recover those additional costs, plus existing costs, a chattel loan will have to be for more than $78,000.00! And with the exception of California, and some East coast states, the majority of chattel loans made today, are well under that dollar amount, unless made elsewhere, for example, in ‘A’ grade luxury LLCommunities.

Need more information on this downright scary subject? Phone Thayer Long @ MHI: (703) 558-0678. And perhaps YOU have a solution none of us have considered to date!

II.

Triple Anniversary, 20th annual Networking Roundtable to occur 14 – 16 September at the Hyatt Regency Hill Country Resort & Spa on the western outskirts of San Antonio, TX. Probably the nicest venue we’ve enjoyed to date for the annual International Networking Roundtable! This is a ‘by invitation only’ event, intended for owners/operators of landlease communities, but all major realty lenders will be present, along with a few HUD Code CSH home manufacturers, nearly two dozen specially – selected presenters, and event sponsors. For a registration brochure, phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633 – 4764. Don’t wait to be solicited. Only contact lists we exercise for this seminal event are Allen Letter professional journal subscribers and the exclusive 500+/- name data base of LLCommunity portfolio owners/operators in North America. Don’t delay. Attendance is limited to first 200 registrants and sponsors!

How’s this a triple anniversary celebration? Simple. Year 2011 commemorates the 75th anniversary of the Manufactured Housing Institute (‘MHI’), our industry and asset class national advocacy body, headquartered in Arlington, VA. Year 2011 commemorates the 20th annual International Networking Roundtable. How many recall our first Roundtable event in Clearwater, Florida in 1991? And, year 2011 commemorates the 15th anniversary of MHI’s National Communities Council (‘NCC’) division! And how many recall the first meeting of NCC’s predecessor, the Industry Steering Committee, when 18 LLCommunity owners/operators convened in Indianapolis, IN., on 31 August 1993? Yes, this is a very special opportunity to celebrate three key anniversaries in MH & LLCommunity history. Plan today to participate!

What’s on the program? Nearly two dozen presenters, including two panels, variously holding forth on the Rebranding of LLCommunities; ‘lease option’ alternative to captive finance, ‘buy here – pay here’ & rentals; Siting ‘park models’ on functionally obsolete rental homesites; Lifestyling ‘Community Series Homes’ to Sell; ever popular realty lenders’ panel; a panel comparing ‘book value’ & ‘market value’ methodologies for home appraisals; and, a host of other informative topics. Also an Investors’ Forum, featuring dozens of LLCommunities ‘for sale’! Be sure to read June’s Allen Letter professional journal for program details, plus a Roundtable registration form will be enclosed! To subscribe, phone (317) 346-7156 or via website: community-investor.com Another topic: ‘Past, Present & Future of LLCommunity Research, Communication, Education, Networking & Resources’. This particular session will likely, and markedly, influence the very nature of your LLCommunity(ies) going forward!

III.

An Open Letter to National & State Representatives, Counties & Municipalities Impacted by Recent Storms, as well as FEMA, Manufactured Home Builders, and Landlease Community Owners/operators Nationwide!

During the last two weeks, as storm waters ravaged south central U.S., two Georgia LLCommunity owners/operators, David Roden and Spencer Roane, conceived and articulated a practical plan and means to provide quick, cost – effective, attractive housing for flood water – displaced citizens; a plan free of most shortcomings and problems associated with efforts post – Katrina housing.

Enter the Community Series Home or CSH. Designed and built during the past two years, for in – landlease (nee manufactured home) community placement, these smaller but functional, attractive – inside and out, sturdily built, affordable HUD Code homes, are ideal for quickly housing storm victims and other displaced individuals and families! Add to that, the plethora of vacant rental homesites within 50,000+/- LLCommunities across the U.S., and there’s a WIN WIN proposition in the making, for everyone involved! And just think; no more ‘overnight trailer cities’ in the secular press! In addition, since LLCommunity owners/operators already market, sell and often self – finance CSH homes on – site, reselling them once FEMA needs are past, will be a whole lot easier than getting rid of unsightly Katrina homes, featuring oversized hallways and bathrooms, and undersized bedrooms.

Are you enthused about this practical plan for providing quick, cost – effective, attractive housing, and LLCommunity access, for flood water – displaced citizens? If so, encourage you to soon contact one or more of the following key ‘players’ in this timely scenario, and offer your support and assistance:

• David Roden @ (423) 760-4818 & davidroden@mtnviewestates.com

• Spencer Roane @ (678) 428-0212 & spencer@roane.com

• Don Westphal @ (248) 651-5518 & don@dcwestphal.com (Keeper of CSH info!)

• Lois Starkey @ (703) 558-0654 & lstarkey@mfghome.org (MHI’s MHSpecialist)

• Lisa Brechtel @ (703) 558-0666 & lbrechtel@mfghome.org (LLCom. Specialist)

• George Allen @ (317) 346-7156 & gfa7156@aol.com (Source of BDM List: HUD Code home manufacturers’ Business Development Managers marketing Community Series Homes)

Know what? This is the first, potentially large scale, eminently society – serving, manufactured housing – focused concept and plan, I’ve seen in a very long time! This is a viable opportunity for several segments of the HUD Code manufactured housing industry and landlease community asset class, to ‘work well together’ for the greater cause of helping folk experiencing hard times and tragedy; at the same time, putting our ability to quickly provide truly affordable housing, and an attractive community lifestyle, ‘center stage’, for all to see, experience, and appreciate! Let’s go for it! GFA

IV.

‘Yours truly’ debuted on youtube this past week, interviewed by Suzanne Felber of LifeStylist.com at the Manufactured Housing Congress in Las Vegas, NV. Interested in seeing it? Go to http://www.youtube.com/watch?jwns2Aql19U By the way, if you presently stock and sell Community Series Homes on – site in your LLCommunity(ies), don’t miss Suzanne’s feature article in June’s Allen Letter professional journal, titled: ‘Lifestyling Community Series Homes to Sell!’ She’ll also be a presenter, on that hot topic, at the Triple Anniversary, 20th annual Networking Roundtable in San Antonio!

V.

Mark your calendar! Next one day Manufactured Housing Manager (‘MHM’) professional property management training and certification class will occur 20 July 2011, from 7:30AM to 4PM, at the Retirement Estates of Big Flats Community Center in Horseheads, New York. Only $250.00 per MHM candidate. MHMs receive a copy of Landlease Community Management text, monograph of contemporary MHIndustry ‘readings’, gold MHM pin and calligraphy – printed MHM certificate! To register, phone (800) 721 – HOME or (518) 867-3242. Hosted by NYHA. I’ll be instructing. Ask your state MHAssociation to sponsor an MHM class during 2011! For info: (317) 346-7156.

1 August 2011. This is the date the 2011 Class will be inducted into the RV/MH Heritage Foundation’s prestigious RV/MH Hall of Fame, in Elkhart, IN. There’ll be about 400 RV/MH aficionados present for the banquet that evening. If you’ve never visited ‘our museum & library’, plan to do so now. For information: (574) 293-2344.

***

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

Blog Flogger (reader) Comments: MHIndustry, Home Valuation & finance!

&

Proofing – Spoofing the 3:1 Ratio for Pegging Rental Homesite Rent Rates

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The Triple Anniversary Networking Roundtable, 14 – 16 September in TX.

I.

“There is no question, we in the MH World have lost the political, economic and social high ground relative to what authentic ‘affordable housing’ is and ought to be. (And) it’s no longer enough for us to say, ‘We lack clout’ in DC or statehouses. We need to creatively, individually, and collectively engage the media, public and government, demonstrating true affordability relative to our quality, eco – minded ‘green’ homes!” TK

“Between HUD, our national and state organizations, and (corporate) ivory towers, we departed the (affordable housing) market that fed us, and now wonder where we are. Appears foreign competition could easily take over this industry, like so many others, that ‘forgot their customer base’.” NB

Appears landlease communities have a viable ongoing ‘business model’ ensuring their survival. They’ll still need a few (home) manufacturers, but likely can succeed nicely. Those remaining manufacturers will have to relearn ‘success’, by building economically – sized, well – designed and built homes! In the meantime, the remainder will fade and die that ‘death of a thousand cuts’, as you aptly put it. George.”

Some pretty heady words there, from our peers throughout the MHIndustry and LLCommunity asset class, responding to blog posts of the past few weeks. Are any of our elected and salaried executives ‘out there’ listening? How ‘bout that still quiet charismatic, visionary – but – effective leader, who’s yet to step forward to bring us together to plan and effect the rejuvenation of the industry and property type? Hmm? Know what’s interesting about the previous sentence? At the MHCongress in Las Vegas last week, a half dozen attendees talked to me individually about this very matter. Each had his/her idea as to whom I’ve been referring to as ‘our reluctant leader’ – and guess what? All but one of them was ‘right on the money’, so my commentary to date has been Right on Target! But we continue to wait….

II.

Remember the heady, if not heated discussion, of the past few weeks on LinkedIn, that spilled over into this weekly blog posting, on the subject of ‘book value’ versus ‘market comparables’ approaches to valuing HUD code manufactured homes sited within and outside landlease communities? Well, the conversation continues online at that social media site, but here’re a couple commentaries, again from blog floggers, to this blogger:

“I agree 100% with your point on NADA book value. There is indeed, a sad irony behind the question: ‘Do manufactured homes depreciate?’ Of course they do, if loan amounts are based on a depreciation schedule! And, if older homes can’t be financed, then of course there’s no lasting value outside of pennies on the original (purchase) dollar. It’s ridiculous.
&
And yes, I have a position on the matter. I think the ‘depreciation factor’ is so deeply ingrained in the consumer’s mindset, it’s going to be touch to shake. But it needs to be changed. In my view, the principle is: ‘Do what’s in the best interest of the customer, and long – term, you’ll make out just fine. Abuse them at every turn, and you’re a short – timer, with them and your business interests. And whether my associates in ‘MH land’ agree with me or not, that’s how it works!” PB

And from yet another source: “Real estate appraisers DO know how to appraise manufactured homes ‘on land’ as realty. The problem is, we routinely site these homes in awful locations, ‘miles from civilization’ and the values do come in low. Any time a value comes in low, our industry screams, “They don’t understand manufactured housing”, when, in fact, they don’t understand you can’t place a good home in a horrible location and expect to get top dollar.
&
Furthermore, it’s true, few real estate appraisers outside FL, AZ & CA are interested, willing, or qualified to do chattel (in LLCommunity) valuations. But the job can indeed be done, when you hire manufactured housing valuation specialists to seek out market ‘comps’ in local housing markets where subject homes are located. DR

Note. How ‘bout the expectation Dodd – Frank regs will make for expensive housing appraisals? Quite likely, for ‘real housing’! Now, this question begs answering: Which camp will we be in, going forward, real housing or manufactured housing – continuing with our very own set(s) of rules, like book valuation, and no secondary housing market? We can no longer afford to have it both ways! What do YOU think?

III.

Here’s an interesting commentary received from a LLCommunity owner/operator who attended the MHShow in Tunica this year. Seems he/she picked up a loan rate sheet from one of the third party chattel lender exhibitors, and figured out the following….

Note that a $35,000 singlesection home transaction, with 10% down payment, and customer with a 650 – 700 credit score (i.e. a premium buyer), would pay 11.99%+0.5% (for an under’ $50,000 loan), or 12.5% plus 2% origination fee. Based on a 15 year loan, that works out to an effective interest rate of 12.88%

Buyer’s monthly payment would then be $388.00. Assuming site rent of $250.00/month, his/her total payment would be $639.00. That same buyer would probably be approved for a 5% site – built loan. His $/her $638/month payment (15 year term) would qualify for a $80,000 loan. What percentage of the eligible home buying prospects do you think would sign up with this lender for a $35,000 singlesection manufactured home in a LLCommunity versus $85,000 site – built home?

The numbers are similar, when manufactured home is put on private property (chattel only). That buyer’s interest rate would be 10.25% + 0.5% = 10.75%, plus 2% origination (effective rate on 15 year loan would be 11.1%). Door # 1 leads to a $35,000 singlesection manufactured home. Door # 2 leads to a $48,000 site – built home.

Bottom line? “Those (typical) terms from that lender suggest their experience financing chattel – only manufactured homes is pretty poor. Probably just the nature of the beast. The spread between manufactured housing and site – built rates is simply too great to ever make the former very attractive to prospective homebuyers.

IV.

Are landlease communities pricing themselves, homesite rent rate – wise, out of their local housing markets? Anecdotally, the answer appears to be ‘Yes’, as urban and semi – urban LLCommunities, across the U.S., experience significant declines in physical and economic occupancy rates (i.e. Or, as some say, higher vacancy rates). While this topic deserves more research than I can give it here, an article in the March/April 2011 issue of Multihousing Professional (p.28) titled, ‘Where rents are rising the most, and least’, relative to conventional apartment communities across the U.S. was illustrative. Here’re a half dozen SMSAs (Standard Metropolitan Statistical Area), for which we were able to compare monthly apartment rent rates in the subject article, with adjusted site rent averages in ‘family’ & ‘all adult’ LLCommunities surveyed and published in a recent JLT & Associates report. In the following examples, I used the divisor of 2.5 instead of 3, per the 3:1 Rent Ratio Rule (for comparing LLCommunity & apartment rent rates), since 2.5 is oft recommended for SMSA markets vs. decidedly suburban and rural markets.

SMSA Apt. Rent LLCom. JLT & Associates adjusted rates

Seattle $1094 / 2.5 = $438 model vs. $477 @ family & 526 @ adult

Portland, OR. $877 / 2.5 = $351 model vs. $442 @ family

Tucson, AZ. $683 / 2.5 = $273 model vs. $323 @ family & $379 @ adult

Las Vegas $811 / 2.5 = $324 model vs. $488 @ family & $532 @ adult

Phoenix, AZ. $763 / 2.5 = $305 model vs. $384 @ family & $435 @ adult

A practice that tends to skew published average LLCommunity site rent rates upward in urban markets, relates to the property composition of SMSA survey samples Generally speaking, only larger institutional investment grade LLCommunities are researched and tallied; while the smaller, far more numerous properties, e.g. under 100 sites in size, are oft not included in SMSA survey samples. Result? In a sense, rendering a ‘false positive’ result, i.e. SMSA area average rent is ‘higher’ than would be the case, if all LLCommunities in the SMSA were included in the survey sample. But then, this 85%+/- of the nation’s LLCommunity stock, ‘under 100 sites in size’, are also difficult to track, due to lack of on – site staff to respond to rent surveys. These smaller properties too, frequently have lower site rent rates than larger institutional investment grade ones found in LLCommunity portfolios. Why? Often older with more functionally obsolete rental homesites; owned by Mom & Pop investors who’re frequently emotionally attached to their residents – along with a fear of not being able to replace ‘older, smaller homes’ if they depart.

Point? In the face of declining physical occupancy, a LLCommunity owner/operator must look at every aspect of his/her operation to remedy that situation. Are marketing measures generating sufficient volume of incoming telephone and online inquiries, and on – site visits, to drive conversion percentages needed to more than offset move – outs? How do you know? Is a daily record being made of such inquiries (Including the key question: ‘How did you first learn/hear of this LLCommunity?’), and is this record of inquiries being evaluated at least weekly, by the property owner or a regional or executive property manager? If not, start NOW! And just how sure are YOU, on – site staff is performing the way they were trained (‘They were trained weren’t they?’) to handle telephone and online inquiries, as well as on – site, in person interviews? Only one effective way to know: Have your property (ies) Mystery Shopped regularly and anonymously by professional ‘shoppers’, especially by individuals who clearly understand the MHIndustry & LLCommunity business, to the extent of being sensitive to basics and nuances of our housing product and unique lifestyle, whether ‘family’ or ‘all adult’. When was the last time you had your LLCommunities shopped? Perhaps therein lies the answer to your declining physical occupancy rate. And economic occupancy? Well, that’s another story altogether.

V.

Don’t miss reading next week’s blog posting on this website! We’ll be announcing details of this year’s TRIPLE ANNIVERSARY ROUNDTABLE, scheduled for 14 – 16 September, somewhere in Texas! Triple anniversary? Yep. We’ll be celebrating manufactured housing’s 75th anniversary; International Networking Roundtable’s 20th anniversary; and National Communities Council division of MHI’s 15th anniversary! How can YOU not want to be present for such an historic and gala celebration?

And this year’s two dozen presenters? Wait till you see the list! Can already tell you there’ll be folk there ‘Everyone knows, but rarely see!’ One in particular (might) be the Allen Letter’s ghost columnist MH Ronin (It’s not me!). Others? Well, you’ll just have to wait for the blog posting, then the registration brochure which’ll be enclosed with the June issue of the Allen Letter professional journal. That alone, is a good reason to ensure your subscription is current. Know why? We use only four data bases for this ‘by invitation only event’: Allen Letter subscribers, the exclusive 500+/- name contact list of LLCommunity portfolio owners/operators in North America, 13th National Registry of Realty Mortgage Lenders & Brokers, and last year’s Roundtable registration list. If you’re not on one of those four lists, and desire to attend this year’s TRIPLE ANNIVERSAY ROUNDTABLE, I strongly recommend you subscribe to the Allen Letter professional journal today! (317) 346-7156 or the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. As in years past our maximum capacity is 200 attendees.

***

George Allen, Realtor®, CPM®Emeritus, MHM
Consultant to the Factory – built Housing Industry &
The Landlease Community Real Estate Asset Class
Box # 47024, Indianapolis, IN. 46247 (317) 346-7156
Gfa7156@aol.com

“Where’s Lou Vela?”, More ‘MH’ Questions, & GSE Reform!

‘Do YOU advocate CSH, attend the NCC Forum, MHCongress, & INR?’

I.

Community Series Homes or CSH. It’s been two years and two months since a hundred HUD Code housing manufacturers and landlease (nee manufactured home) community owners/operators caucused, for first time in MHIndustry history, at the new RV/MH Heritage Foundation’s Hall of Fame facility (museum & library) in Elkhart, IN.

Why? To agree how to better market and site new manufactured homes on vacant rental homesites! How to do so? Via exciting new exterior designs (e.g. smaller ‘footprints’, front load porches and more), interior floor plans, appropriate specifications, even WOW features enticing to LLCommunity buyers. And, to market these exciting new homes, via three dozen newly appointed Business Development Managers or BDMs, employed by the HUD Code home manufacturers. It’s been almost as long a time, since the Community Series Home (differentiated from heretofore Developer Series Homes of the late 1990s), was identified and labeled as such, at the 18th annual Networking Roundtable in Chicago. Since then, CSHs have become the LLCommunity owner/operator’s ‘home of choice’, to fill vacant, and frequently functionally obsolete (i.e. ‘too small for today’s behemoth – sized manufactured homes’) rental homesites in properties throughout the U.S. and Canada.

But, ‘Guess what?’ While there’s been some significant progress, among a few enlightened HUD Code home manufacturers – now shipping increasing numbers of CSH models into LLCommunities, they’re still rarely identified as such, in corporate literature. And at regional MHShows, HUD code home manufacturers continue to exhibit the ‘bigger box = bigger bucks’ behemoths (e.g. 16X80 & large multisection units) that helped get us into our present sour business pickle! Adding ‘insult to injury’ was the absence of an awards category, at the recently completed Manufactured Housing Congress in Las Vegas, singling out these industry – saving CSH models, as being worthy of national recognition! Hopefully that‘ll be addressed at the 2012 MHCongress.

In the meantime, it’s increasingly difficult not to surmise HUD Code home manufacturers have resigned themselves to ‘die the death of a thousand cuts’. How so? Four indicators and counting: 1) at the mercy of federal regulators intent on increasing floor fees; 2) benign neglect of loan origination and secondary market financial institutions, where third party chattel capital is concerned; 3) abject reluctance to return to their ‘affordable housing’ roots, the very today market that brought them shipment volume success in the mid – 1970s; and, 4) aforementioned ‘foot dragging’ where forging active CSH partnerships with LLCommunities nationwide, is concerned. And this list doesn’t even include lack of viable warranty, responsibility for home installation, and customer service symptoms….

For the seriously interested MHIndustry aficionado, here’re the Top Ten Features that characterize contemporary Community Series Homes today:

• 3BR (bedroom), 2B (bath) design, either singlesection or small multisection homes, oft times with a front load porch, sometimes with recessed steps.

• Open floor plan with WOW factor interior treatment

• Shutters on all windows

• Vaulted ceilings

• Asphalt shingles on roof

• Linoleum in kitchen, utility & front door areas

• 40 gallon water heater

• 200 amp service panel

• Wood cabinetry throughout

• Non – plastic sinks and tubs

And, if you’d like a FREE copy of the aforementioned list of nearly three dozen official BDMs, phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 and request it. For detailed information about CSH product design; and, ‘Why it’s important, even critical, to upgrade older LLCommunities before buying and siting new CSH homes!’, contact Don Westphal @ (248) 651-5518. You’ll be glad you did.

II.

5th National Communities Council Forum Attendance up by about 50 from last year’s 200 registrants! Most frequently asked question this year? ‘Where’s Lou Vela?’ Answer: He’s pretty much semi – retired these days, but maybe expect to see him at the International Networking Roundtable (INR’) later this year, when two dozen specialty realty – secured lenders and loan brokers with affinity for the LLCommunity asset class, gather for their annual Lenders’ Panel! To ensure you’re on the invitation list for the 20th annual INR, 14 – 16 September, phone (317) 346-7156 or email via gfa7156@aol.com By the way, the 13th annual National Registry of Landlease Community Lenders & Loan Brokers was released as a lagniappe in the April issue of the Allen Letter professional journal. Receive a FREE copy of that seminal report and directory of 18 ‘players’ when you subscribe to the newsletter! Simply phone the number cited in this paragraph.

Home finance, home finance, home finance, and ‘rentals’ were foci of this year’s NCC Forum. Bottom line? LLCommunity owners/operators should probably not go the self – finance route, either via ‘buy here – pay here’ & or ‘captive finance’ methodologies, alone! Who to contact for information and advice? The NCC Forum was the first venue where all present loan servicers and chattel finance consultancies were identified, and are listed here in alphabetical order:

• 21st Mortgage Corporation per Matt Kerlin (800) 955-0021

• CU Factory – built Housing per Dick Ernst ((972) 503-3201

• Kenneth Rishel Consulting (217) 971-3968

• Triad Financial Services per Don Glisson (904) 223-1111

• PMH Financial per John Briggs (303) 467-8009

Did I miss anyone? If so, let me know by phone or email, and once verified, I’ll add them to the directory being prepared for the 2nd edition of the Manufactured Housing $$$ Primer.

Rentals advice? If you’d like a FREE copy of the seminal article on that subject, titled: ‘To Rent or Not to Rent!’, phone the aforementioned MHIndustry HOTLINE and request it. Tells you just about all you need to know to make an informed HOW TO decision. A Word of Caution. While ‘renting manufactured homes in LLCommunities’ was ballyhooed at the NCC Forum, be careful! A 100% ‘rental unit’ community ‘works’ in a supportive local housing market; however, mixing bona fide homeowners/site lessees with a like number of ‘apartment renters’ creates two classes of citizenry in one’s property. Not always, if ever, a happy mix. And there’s much more to this decision. That’s why you need to read ‘To Rent or Not to Rent!’ before taking the plunge.

Property classification or gradation. Now this was a surprise for the NCC Forum audience; to learn U.S. Bank – Manufactured Housing Finance, has – as it turns out – an internal ABC method of determining the quality of landlease communities in which they’re considering underwriting manufactured home loans. At present, the methodology is not available for general distribution. But all is not lost. There’re two long – established programs to access to a similar end. First, the Community Attributes Systems or CAS, formalized ‘years ago’ by an MHI task force comprised of third party chattel finance firms and LLCommunity owners/operators. Simply go to www.mhicas.org to see how your LLCommunity is described thereon. Yes; know it or not, your LLCommunity is likely listed and described. Disagree with what you see/read? Identify yourself as the property owner and effect desired changes. You owe it to yourself to do so! And then there’s the widely – used manual ‘grading system’ form, the ABClassification System, designed in 1998 by Susan McCarty and yours truly, revised in 2001 by a NCC Task Force. Also available FREE to you, by phoning the aforementioned MHIndustry HOTLINE and requesting PM form # 126. Anyone in the MHIndustry & LLCommunity business ‘still talking stars’ is woefully out of date, as the Woodall System of classifying ‘mobile home parks’ has not been updated since 1976, 35 long years ago!

‘Let’s start our own bank to finance new & resale manufactured homes!’ Once again, that now – not – so – novel thought and aspiration was voiced by more than one NCC Forum attendee. But will it go anywhere this time around? I doubt it. Why? Just look at the unfolding finance regulatory environment most of us are dealing with these days? Hopefully the time will indeed come, and leaders emerge (Heck, we can’t even get a charismatic, capable, experienced leader to step forward to lead our industry out of its’ doldrums! Huh? That’s right. Just read back through this web site’s blog archives, for a few weeks, for more on that timely and disturbing subject), that’ll make this decades – old ‘dream’ a practical reality. I doubt the time is now…. Anyone disagree? Tell me!

An interesting sidebar at this year’s NCC Forum was the distribution of an article describing the Lease Option approach to filling vacant rental homesites in landlease communities. Titled, ‘Lease Option Sales Transactions Gaining in Popularity!’ by Spencer Roane, portfolio LLCommunity owner/operator headquartered in Atlanta, GA. For a copy of this seminal article, phone (678) 428-0212 or email spencer@roane.com If YOU have successful personal experience with lease option methodology, let me know!

III.

20th annual INTERNATIONAL NETWORKING ROUNDTABLE or INR Considering renaming this year’s event as the Triple Anniversary Networking Roundtable! Why? Read on… Dates still 14 – 16 September 2011; location hopefully finalized with next week’s blog posting! In the meantime, know this: The 20th INR will be awash in celebration! How so? Besides unparalleled networking (This ‘by invitation only’ event, ensures majority of registrants are bona fide LLCommunity owners/operators & realty lenders), superb educational seminars (Nearly two dozen specially – selected presenters!), and unprecedented deal – making opportunities (‘It’s said, 50% of the next year’s LLCommunity transactions get their impetus at the annual INR!’), the INR will be celebrating its’ 20th anniversary, as well as the 70th anniversary of manufactured housing, and 15th anniversary of MHI’s National Communities Council (‘NCC’) division! How can you not want to be present for such an unparalleled networking, educational, deal making, celebratory event? Again, phone (317) 346-7156 or via gfa7156@aol.com to add your name and address to the official ‘invite’ list.

IV.

GSE Reform. ‘With the February 11 release of the Obama Administration’s white paper, ‘Reforming America’s Housing Finance Market’, it’s official – the two giant government – sponsored agencies Fannie Mae and Freddie Mac will no longer exist in their present form.’ This from the March/April 2011 issue of Multihousing Professional magazine, pp. 43 – 47.

The magazine feature goes on to briefly describe three plans for phasing out Fannie Mae & Freddie Mac, with each plan restricting federal credit to varying degrees:

• ‘One option restricts it entirely and limits government’s guarantee to the FHA, USDA – Rural Development, and VA.’

• ‘Another offers a government guarantee only in case of emergencies.’

• ‘Option Three still restricts federal credit – they didn’t define it specifically – but there very clear clues that if they were to extend federal credit to the market…it would be on defined terms.

With that said, the National Multi Housing Council (‘NMHC’) points out, “We have two incredibly successful business models out there for the multifamily books of business that Fannie and Freddie do. Fannie Mae has the delegated underwriting (‘DUS’), where their lenders are in the first loss position. They have skin in the game and it really colors the kind of underwriting they do….” And for that matter, “If you look at the multifamily books of the GSEs, they performed well, even through the crisis.” (Secretary Donovan)

Furthermore, because of demographic characteristics on the horizon (e.g. 78 million cohort of echo boomers entering the housing market), “half of all new homes built between 2005 and 2030 will have to be rental units.” Manufactured housing and landlease communities anywhere in that mix? Let’s hope and plan for it to happen!

Relative to whether Fannie and Freddie have met three affordable housing goals set for them in 1992, by the Federal Housing Enterprises Financial Safety & Soundness Act, a recent Policy Analysis published by the CATO Institute (titled: ‘Fannie Mae, Freddie Mac, & the Future of Federal Housing Finance Policy’ by David Reiss), pointed out: “Fannie & Freddie typically meet these goals, although they sometimes may use financing shenanigans (such as buying a portfolio of loans solely to meet affordable housing goals) to do so.” (And) ‘A number of studies have indicated Fannie and Freddie actually cannibalize the FHA loan market by lending to borrowers who would have otherwise received FHA mortgages.” (Finally) “the U.S. General Accounting Office has also questioned whether Fannie and Freddie, notwithstanding their affordable housing mandate, do any more than any other lenders to promote affordable housing.” Hmm. Where have we, in the manufactured housing business, encountered that latter matter before? Anyone recall our ‘duty to serve’ contretemps? (p.9)

So, how will Fannie and Freddie end up, down the line? The above referenced Policy Analysis had this to say on the matter: “Because Fannie and Freddie are poor agents of public policy and political powerhouses with unmatched influence, the two companies should be fully privatized.” – by extension, no longer Government Sponsored Enterprises or GSEs. (p.14). In any event, whatever plan for housing finance and GSE reform is agreed upon, it’ll take five to 10 years to fully implement.

V.

Grand Opening! Shiloh Estates in Indianapolis, IN. This is an early example of the turning around of a LLCommunity acquired via the foreclosure process. If interested in attending this 14 May event (10AM – 6PM), phone (317) 356-1666. Address? 7441 Chinook Circle (Washington & Shortridge Roads), Indianapolis, IN. 46219. I certainly plan to attend! GFA

***

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