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

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

I.

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

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

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

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

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

II.

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

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

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

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

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

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

And with that in mind, reader commentary continues…

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

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

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

III

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

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

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

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

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

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

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

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

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

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

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

I.

Whose Responsibility is Housing Affordability?

Maybe the time has arrived for a ‘New Way of Thinking’ when it comes to manufactured housing sales in landlease communities & retail salescenters…

Think about it! When was the last time, or anytime for that matter, you or your salespersons sold a manufactured home, within or outside a landlease (nee manufactured home) community or retail salescenter, and had this sincere, conscientious thought:

“Can this homebuyer truly afford to buy this new or resale manufactured home?”

Even more to the point; did or do you even care, to accept any responsibility for ensuring the affordability of said home, relative to the homebuyer or household purchasing it? If you work in the manufactured housing industry, and or the landlease community (‘LLCommunity’) business, the answer is probably and understandably ‘No’. Why? Because, as some are wont to say, ‘It just generally isn’t in our DNA (i.e. business model) as housing purveyors!’ A review of manufactured housing’s sales training literature, over the past 40 years, clearly demonstrates we haven’t been taught, nor do we generally teach today, personal and corporate responsibility for ensuring our ‘affordable housing’ product evinces ‘housing affordability’! By practice, we’re taught to sell to what customers are willing to pay each month, not necessarily what they can realistically and comfortably afford.

Gary W. Pomeroy, back in the 1970s, then VP of Marketing for Golden West Homes, and chairman of the Western Manufactured Housing Institute’s marketing committee, authored the 200 page textbook titled: How to Successfully Sell New and Resale Manufactured Homes. Early on in this classic text, Pomeroy describes the importance of qualifying one’s prospect: “If your prospect has the need for housing, if he has the income to enable him to purchase housing, and if there is a degree of urgency…he is someone you should spend time with.” P.22 (emphasis added. GFA)

A couple pages later, the author described how to ‘set the banker up as the source for qualification’ by saying: “Mr. Jones…the prices of our homes run from $15,000 to $35,000, (Reader; remember, this is 40 years ago!) and our lender tells us a person should have a gross income between ______ and ______ per month, with a minimum down payment of between ______ and ______, depending upon the price of the home he purchases.” P.25. Notice the not so subtle focus ‘depending on the price of the home he purchases’, NOT ‘…depending on how much prospective homebuyer can realistically afford to pay on his or her mortgage each month.’ Does this focus on home price absolve the housing salesperson, and salescenter for that matter, of personal and corporate responsibility for ensuring our affordable housing product is ‘just that’ for the variety of homebuyers we serve? I don’t think so! But the real issue is; ‘What do you think?’ And, if that wasn’t enough to consider, know there’s ‘something missing’ from the quoted material. See if you can spot it when rereading the paragraph, and the next few to follow.

A couple pages later, Gary Pomeroy introduces Grayson Schwepfinger and ‘his ‘use of a rather unique system of qualifying the customer’, characterized by ‘locking all the homes on a sales center…forcing prospects to come to the office’, where they are pre – qualified, by Urgency, Income & Need, before seeing homes. P.26. How so? Schwep’s methodology isn’t described, but we’ll revisit Grayson later, when we take a look at contemporary 21st century sales training literature….

I became a Redman Homes, Inc., MHRetailer, on – site in my first owned LLCommunity in the early 1980s. Still have the Retail Sales Training Program used by that firm, to teach me the ropes of manufactured housing sales. Here’s what they said about how “Qualifying the customer is a necessary and productive part of the selling process. If customers are properly qualified, they are more likely to buy the house that is right for them. If they do, they will be happy, satisfied customers who will generate a lot of referral business. You need to know what the customer is looking for in a home, and their financial limitations, so you know what you have to work with.” P.7 Fair enough, and a good start. So, what’s next?

“There are two approaches to qualifying a customer – the qualifying interview, and the rapid qualification. Most sales centers have a prospect interview form they use with their customers.” OK, but why no sample Interview Form included with this program guide? And the ‘rapid qualification’ approach? A series of questions: “Do you work nearby?”, “Do you live near here?” “How soon are you going to need your new home?” “Are you married, do you have any children?” Give me an idea of what type of home you are looking for, and what kind of monthly investment you are interested in making (i.e. monthly loan payment amount)?” & “Do you have any idea of what you are going to invest initially (i.e. down payment)?” p.9 No dollar guidelines or formula offered here, just that bugaboo emphasis on ‘what customers are willing to pay each month, not what they can comfortably and realistically afford.’ And know that ‘something missing’, mentioned earlier, is absent here too. Spotted it yet?

During the 1990s, as I traveled from one end of the country to the other, working as a freelance management consultant, serving LLCommunity owners/operators and MHRetail salescenters, picked up the Selling and Training Techniques manual prepared and used by franchiser A-1 Homes, out of Texas (in the MHBusiness since 1969). Their approach to Qualification? Three parameters: 1) Determine if customers live in a mobile home (Their term, not mine; and in 1990s, ‘that’ should ‘tell you something’ about their mindset) or have any other potential trade – in, through tactful and complimentary inquiries., 2) Maximum monthly investment customer will accept based on income, 3) Specific floor plan desired and any unusual requirements, such as space for a piano or a family heirloom.” Once again, no dollar guidelines or formulae offered for qualifying prospects, and continued emphasis on ‘maximum’ monthly mortgage payment, with no mention of ‘affordability’. And yes, once again, there’s ‘something missing’, from this 1990s training material, just as during the 1970s and 1980s.

Champion Home Builders Company, of the late 1980s & early 1990s, (cum Champion Enterprises, now Champion Homes) took a different approach to qualifying homebuying customers. In Joe Morris’ Sales Success School, the author defined USP (‘Unique Selling Proposition’) as being “A real or percieved (sic) consumer benefit in a product or service that distinguishes that product or service from the same class of competitive products or services.” P.L1-9. Whew! Did you get that? I barely did. Anyway, a few pages later, an effort is made to ‘splain’ why PRICE isn’t a USP, by pointing out: “At every income level, there is affordable housing” & “the affordable tag has no sales appeal – people buy affordable things but in response to some other appeal” P. L1-12). OK. But where are the guidelines or formulae one might use to calculate affordability per homebuying prospect? None are given! Though, a few pages later (P. L2-4) the manual describes USPs for three distinct manufactured housing markets: singles, young marrieds, seniors (empty nesters); and once again, implying differences in ability to qualify to purchase new and resale homes, but sans any practical aids. Yes, ‘something missing’ from this training exercise as well…

Know what? Doesn’t get any easier, or to the point, quoting contemporary authors/trainers who straddle the fence between site – built housing and various types of factory – built housing. In Jerry Rouleau’s The Complete Guide to Selling New Homes, on page # 91 three of five Finance Qualifying questions are these: “3) How much of your cash savings will you put into the building project?, 4) Gross Income? (Combined total yearly income), & 5) What are you looking to spend per month for mortgage payments?” Point? Once again, as in the previous several examples, the ‘affordable housing’ or ‘housing affordability’ question or determination is left to the homebuyer, with little to no guidance from the home seller. But, to Rouleau’s credit, on the next page (# 92), he does provide a Rule of Thumb, for calculating one’s Mortgage Limit – presumably, for a ‘house and realty combination’: “Take the combined gross annual income (i.e. homebuyer or household) and multiply by 2.5. This will help you establish a rough mortgage limit. When interest rates are around 6%, you can calculate the mortgage limit at 3 times gross income. If interest rates go up to 12% you have to use a number 2 times gross income.” P.92. We’ll return to the results of this Rule of Thumb shortly. In the meantime, and for one last time, have you spotted the ‘something missing’ from this recitation too?

Give up? Well, here’s that something that’s been missing! Not once, in any of the preceding tutorials, regarding the sale and financing of ‘mobile homes’, HUD Code manufactured homes, has mention been made regarding anticipated monthly homesite rent amount(s), characteristic homes sited in LLCommunities! Obviously, from the historic through to contemporary training and methodology, emphasis is generally on 1) home only, and 2) designed to relieve the homebuyer of whatever cash he/she thinks they can part with each month to buy, and pay a mortgage on said home – irregardless of other recurring household expenses for taxes, insurance, and utilities – even that phantom factor, ‘homesite rent’, literally throwing any idea or concept of housing affordability right out the window. Moving right along…

Said we’d return to Grayson Schwepfinger. In his Selling for Success Seminar material, dated year 2000, he presages the case I’ve been building in previous paragraphs: “There is no place they (homebuyers) can go for information on how to intelligently invest in a manufactured home! If you wanted information on how to invest in a manufactured home, where would you go? There aren’t any books, seminars, audio or video tapes that will tell you how to intelligently invest in one of our homes. All the internet gives them is prices.” (pages not numbered)

While Grayson’s point is on target (i.e. Nowhere to go for help!), he isn’t entirely correct. There are indeed books ‘out and about’ that purport to teach ‘How to Buy a Manufactured Home’, but they’re either universally incomplete, per content of previous paragraphs (Oft produced by MHIndustry advocacy bodies, etc.) or by self – proclaimed manufactured housing experts with axes to grind. A few such titles include:

Kevin Burnside in his Buying a Manufactured Home (168 pages, 1999), opines “The one constant…dealers want maximum profit from you.” And, “Your pocketbook is their target.” Pages # 15 & 31.

Steven Taylor, writing in MANUFACTURED HOMES, The Buyer’s Guide (144 pages, 2004) suggests, “For the best possible deal, time your shopping for the home either at the end of the month or…last two weeks of December….” P. # 99.

Wes Johnson’s does no one any favors in The Manufactured Home Buyer’s Handbook (226 pages, 2005), when he hyperbolizes: “The manufactured housing industry…feeds a negative stereotype of itself because of tactics its’ salespeople employ. Take every trick a used car salesperson ever had and multiply the total exponentially.”

Yikes! If this tripe commentary is even half true, there’s a lot the manufactured housing industry needs to do internally before ‘going national’, or even regional, with a brand promotion and or image – improvement campaign. But in the meantime, where do the previous dozen paragraphs take us? Right back to the title and subtitle of this week’s blog posting!

Whose Responsibility is Housing Affordability?

Maybe the time has arrived for a New Way of Thinking when it comes to manufactured housing sales in landlease communities retail salescenters

What do YOU think? What are YOU going to do about it, in and around your sphere of business and trade association influence? In the meantime, allow me to share at least one hopeful and helpful development along the line of calculating housing affordability, based on proven affordability parameters, designed to estimate maximum recommended ‘affordable’ and ‘risky’ purchase prices for new and resale, privately – owned homes of any type, sited on realty owned fee simple with home, or leased, as in a landlease community!

For results – comparison purposes, and hearkening back to Jerry Rouleau’s Rule of Thumb, given $36,000 as Annual Gross Income (‘AGI’) or Area Median Income (‘AMI’) per local housing market identified by postal zip code, here’re ‘his results’ first, then those from the new methodology, a.k.a. ‘Ah Ha! & Uh Oh! Formulae.

J. Rouleau’s Rule of Thumb:

AGI X 2.5; or $36,000 X 2.5 = $90,000 max mortgage @ stick – built home & real estate

AGI X 3 when 6% interest, or $36,000 X 3 = $108,000. -do-

AGI X 2 when 12% interest, or $36,000 X 2 = $72,000. -do-

The relatively new, though increasingly popular ‘Ah Ha! & Uh Oh! Formulae:

AGI or AMI X 30% expense factor & $333/month rent & 9.5%, 20 yr. loan = $41,000 for ‘affordable’ home purchase sited in a LLCommunity!

AGI or AMI X 30%, with TI/util pd separate, & $333/month rent & 9.5%, 20yr. loan = $68,000 for ‘risky’ home purchase sited in a LLCommunity!

AGI or AMI X 30% expense factor & 6.5%, 20 yr. loan = $101,000 max mortgage for ‘affordable’ home and land purchase! Pretty close to Rouleau’s $108,000, with mortgage term at 6%. (For estimated value of home alone, back out land cost)

AGI or AMI X 30%, with TI/util pd separate, & 6.5%, 20yr. loan = $134,000 max mortgage for ‘risky’ home and land purchase! (For estimated value of home alone, back out land cost)

I hope you see the differences, at a couple levels. First, leaving the home payment decision up to the homebuyer is frequently going to trump affordability. Consumers are rarely schooled in the concept, let alone methodology about how to measure and achieve it, to their ultimate benefit. And Yes, that’s what we rely on lenders to do for us; and today, they’re covering that responsibility well. But it wasn’t but a couple years ago, when many banking institutions transitioned from prudent lending to predatory lending, clearly demonstrating their commitment to ‘affordability’ was in turn trumped by their desire to fatten the bottom profit line. So, hope you too ‘see the light’ relative to protecting your homebuyers, sometimes from themselves. And don’t forget, those folk buying new or resale homes in, or going into LLCommunities, must figure in the appropriate homesite rental amount, right along with calculating their maximum monthly mortgage (PITI) payment!

I truly hope there’re blog floggers (readers) ‘out there’ who are already looking out for the affordable housing interests of their prospective homebuyers! If so, would you please share your business model and methodologies with me; to in turn, present in future blog postings like this one? Thank You. GFA

If you’d like a free copy of the aforementioned ‘Ah Ha! & Uh Oh! Formulae worksheet, simply respond via this blog, website, email: gfa7156@aol.co, or the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. And Yes, continue to send your observations, critique, suggestions for improving this weekly blog posting.

II.

FLASH NEWS. A possible investment opportunity for an experienced LLCommunity developer/investor.

If you’re familiar with what’s happening about 100 miles North of Las Vegas, NV., relative to what’s locally referred to as the SWIP Utility Corridor (bringing long term electrical power to CA from ID, Canada, and elsewhere), then the following opportunity to develop raw land into much – needed rental housing (i.e. LLCommunity &/or RV Parks) will interest you.

“The Caliente City Council has approved a parcel split of the 30.98 acre parcel fronting HWY 93 into two parcels. 16.24 acres zoned Highway Commercial on the HWY 93 frontage, and 14.54 acres zoned Recreational Vehicle Estates, with a Conditional Use Permit for 123 Mobile/RV Estate lots on the southern portion.”

The two parcels can be purchased separately, if someone wants to build the Mobile/RV Estate lots. The lots will be permitted as manufactured housing rental homesites. The RV Estates ordinance allows each site two RV/Mobile hookups, so that during the SWIP construction, the crews can occupy both (total of 246 RV spaces). The Recreational Vehicle Estates zoning allows the sites to continue as RV rental sites and allows long – term stays to continue. The sites can be marketed as manufactured home rental sites, where the home will hook up to one pedestal, and the second pedestal can be used for guests in RVs. Manufactured home marketing and sales can start immediately.

For information, contact Jan Cole via jancole@land-water.com or 6772 Running Colors Ave., Las Vegas, NV. 89131 or phone (702) 270-9194

***

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

A Sense of Personal Legacy…

doesn’t usually blossom overnight, unless you expect to die tomorrow.
And, one’s sense of corporate legacy, is another matter altogether….

A sense of personal legacy, if it emerges at all during a lifetime, is generally a multistep process, materializing with little, much or no fanfare at all, as one….

1. Learns the basics of life and values during one’s youthful years, through family, education, and variety of experiences, especially from one’s mistakes and successes.

2. Gradually, and generally quietly, identifies one’s personal life focus and career path; all the while learning and maturing in a variety of ways, along the way.

3. Cultivates and nurtures his/her personal life (e.g. spiritual perspective or not, political preference or not, family situation or not, amateur sports or not) and career path (e.g. employment or entrepreneurship, corporate religion perspective, local or national politics, amateur or professional sports, active or reserve military, teaching or academic pursuits, or variety of creative outlets, to name just a few possibilities), continue to learn, decide, and mature along the way.

4. At some point in time, during middle age for some, before or after for others, one realizes ‘You are your legacy!’ to those with whom one interacts personally and corporately; and or influences, by one’s chosen career path or paths – whether sequential or concurrent.

5. ‘The Question’, if and when asked, may be – and oft is, ‘What will be my legacy in years to come? And will it be manifested within or through…’

• Interpersonal relationships nurtured, damaged, repaired, and otherwise?

• The family or families begun and nurtured; and or whose members are now out in society on their own?

• Books authored, poems penned, and art created?

• Edifices designed and built; machinery and devices conceived and patented; formulae and methods originated, perfected, and protected?

• Informal and formal recognition by one’s peers?

• Philanthropic giving reflective of one’s interests and passion?

• College or university scholarships and academic chairs funded?

Corporate legacy? May, or may not be, an extension of one’s personal legacy, if and when one is closely identified, positively or negatively, with a particular familial, societal, political, military, religious, sport, organization, or business entity.

So, where are YOU on this lifelong personal and corporate legacy journey? Too young to care? Too busy to notice yet? Just becoming aware? Deciding now? Or; sad to say, maybe too late….

At this point, you’re likely asking yourself, ‘What makes legacy the lively topic for this week’s blog posting?’ Here’re several recent and pending happenstances that should get all of us to thinking.

First; there’re plenty of business pioneers who’ve shaped industries during their careers. But know what? Within the manufactured housing industry and landlease (nee manufactured home) community real estate asset class, these folk have rarely penned autobiographies, nor have biographies been authored about them. In the first instance, there’re but two such autobiographies: John Crean’s The Wheel & I, describing how he founded and grew Fleetwood Enterprises; now, Champion’s Fleetwood Homes. And there’s Jim Clayton’s First a Dream, chronicling his life and work story – with notable differences, in content, between the first and second editions.

To the best of my knowledge, there’ve been but two biographies describing the successful business careers of landlease community developers/owners/operators. The first, a biography titled A Danish American (long out of print), written by Kris Jensen, Jr., describing his immigrant father’s life and work. I recently wrote Kris Jensen, III., suggesting the time might be write to pen a Part II, telling ‘the middle generation of the story’, as Kris III now runs Connecticut – domiciled Jensen Communities. And then there’s the recently released Trailer Park Twins, profiling the colorful and successful business careers of identical twins, Darrell and (the late) Harrell Cohron, of Indianapolis, IN.

So, is there a book in you; or should one be penned, describing your life and work? I’d be pleased to assist, if you contact me for advice. In the meantime, suggest you go to a local bookstore and buy a copy of Dan Poynter’s Self – Publishing Manual, to learn how to organize material, prepare a working outline and author the book; then how to self – publish it. I buy the latest edition of Dan’s book each time I begin the process of writing another nonfiction book. Note that none of the aforementioned four books were published by traditional acquisitions publishers. This observation brings us to the second major step in this creative process, marketing your book! For that purpose, you want to obtain a copy of John Kremer’s 1001 Ways to Market Your Book. Seriously.

Additional opportunities for legacy preservation, where MHIndustry and LLCommunity asset class are concerned, can be found with the RV/MH Heritage Foundation’s prestigious Hall of Fame. “…the first Hall of Fame Awards Banquet (occurred) August 21, 1972, at the (now defunct) RV/MH Midwest Show at South Bend, Indiana, (during which) 14 industry pioneers were inducted. Hall of Fame awards have been made each year since, except 1976, when the organization was inactive.” Since 1972, hundreds of worthy men and women, from these two industries, have been inducted into this Elkhart, IN., domiciled repository of history (library) and artifacts (museum). To learn how to recommend someone for induction into the RV/MH Heritage Foundation’s prestigious Hall of Fame, phone either (800) 378-8694 or (574) 293-2344.

The RV/MH Heritage Foundation beginning its’ final phase of construction, recently announced the availability of naming rights for the Elkhart facility’s Grand Hall ($1,000,000.), Manufactured Housing Hall ($1,000,000.) with shared naming rights, Outdoor Show Area ($1,000,000. per year for three years), complex naming rights for roadway/streets/boulevard ($100,000.), five lakes on premises ($50,000. each), large paving bricks engraved @ $500 apiece, or small paving bricks engraved @ $250. each. Frankly, this is a near once in a lifetime, incredible opportunity, to ensure either your legacy in the MHIndustry and or LLCommunity asset class continues on into perpetuity – or a unique and lasting way for you to commemorate the lifework and memory of others worthy of such honor. Interested? Again, phone either of the numbers cited in the previous paragraph.

Hope you allow the content of this week’s blog posting to inspire you to pause and look at your personal and career legacy, and how you’d like to be remembered during years to come. A few possible alternatives have been described. Now it’s up to you to decide, and take appropriate action. If I can be of assistance to you, in some way to this end, reach me via the MHIndustry HOTLINE: (877) MFD – HSNG or 633- 4764.

*****
End Notes.

1. How to Find, Buy, Manage, & Sell a Manufactured Home Community, George Allen, J. Wiley & Sons, NY., 1996. Appendix B., page # 292. This book available for purchase from PMN Publishing. (317) 346-7156.

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

READ it HERE the FIRST Time; LATER, maybe ELSEWHERE!

Another Seller – Finance Option; Pithy Blog Responses; Next to New ‘repos for sale’; Saber Rattling again, or finally Throwing Down the Gauntlet?!

I.

From a veteran MHIndustry exec: “Just printed a few of your recent blog postings to read before the _____game. I’m working on a speech for an upcoming association meeting and want to be certain I have fresh information, so I turned to your blog!” RR

“Well written blog posting. I am concerned, however; people reading your Summary of intra – industry squabbling might misinterpret. Those issues have no traction in a united industry association. But if MHIndustry segments go their own way, watch out!” KR

“I’ve decided to get off the sidelines and re – assert myself nationally. Only a few years before I retire, and I want to retire from a prosperous industry.” XX (Who doesn’t?!)

“Interesting stuff. Is anybody listening; or are they ignoring the fact their cheese has moved? This is a great break out opportunity (‘The CAMPAIGN’) for our industry.” NB

Regarding HUD Code housing manufacturers taking 100% responsibility for installation of their product: “We did this on all our product, as part of the price a homebuyer paid for our new homes. My nose got bloodied on the financials the first year, but in the eight years following, we had to defend only ONE consumer lawsuit; and our service costs, as a percent of sales, dropped by 80%! It works!” XX

“This paradigm change is needed for all home manufacturers, if we expect the public to regain confidence in us & buy our homes, assuming the financing is there to pay for it.”

And this quoted from the Wall Street Journal during first week of November, in an article titled: ‘Mobile Home Makers Try to Stitch Together a Rebound’. “Don Glisson, CEO of Triad Financial Services, Inc., which finances manufactured home sales, says ‘…the industry could use an image – building national advertising campaign, (Think’ The CAMPAIGN’, described in previous three blog postings at this website! GFA) but ‘nobody wants to pony up the money because times are so tough.’ “

Furthermore, “A bigger disadvantage may be financing costs. Most manufactured homes are financed with personal property loans, meaning the loan is secured only by the home and not the land, which is often leased from the operator of a (landlease) housing community. Rates on such loans, which are considered riskier, are around 7% to 11%, compared with less than 5% for conventional (real estate – secured) home loans.” WSJ

“Although 2008 housing legislation required government – backed mortgage companies Fannie Mae and Freddie Mac, to support financing for manufactured homes, the regulator of Fannie and Freddie, the Federal Housing Finance Agency, recently decided such loans should be funded only when backed by land as well as by homes. Most buyers of manufactured homes (these days) either don’t own the land or don’t want to mortgage it. Unless the financing disadvantage is eliminated or reduced, ‘the manufactured home industry seems destined to struggle and dwindle’, Mr. Buffett said in his annual letter to shareholders earlier this year.” WSJ

So, faithful blog flogger (As in ‘promoter or publicist’), what’s on your mind these days?
The MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or via gfa7156@aol.com

II.

Atlanta, Georgia – based LLCommunity owner/operator Spencer Roane, offers this sage and timely, albeit lightly edited advice regarding ‘Lease – Option Financing and the S.A.F.E. Act’. *1 (Review with Counsel before Implementing!)

Some in the manufactured housing industry suggest community owners who engage in lease – option financing of manufactured homes, should switch to retail installment contracts and get licensed under the S.A.F.E. Act; or, deal with a lender who isolates the property owner/operator from said act. Well, here’s another increasingly popular perspective, which LLCommunity folk should review with their legal counsel.

Unlike a lease – purchase, which obligates the (home) buyer and seller to consummate the sale, the lease – option alternative is simply a lease with an option purchased by the tenant/lessee, to buy the home for a specified amount at a specified time in the future. Both parties agree the purchase amount, at the time the option might be exercised, is simply a one’s opinion of what the fair market value of the home will be at that time. For example, the lessee might lease the manufactured home for $300 per month for eight years, and agree to pay $1,000 for the option to purchase the home after five years, for $10,000; or, upon expiration of the lease, for only $3,000. And, continuing with this example; if the lessee exercises said option, at the end of the lease, the property owner might choose to finance the purchase amount, for $250 per month, over the next 12 months.

Most agree the S.A.F.E. Act applies to ‘mortgages’, and mortgages are defined as a transaction where the lender/seller holds a security interest in the property, e.g. home. Leasing/renting does not involve a security interest. Hence, one might argue, no mortgage is created by the lease portion of the lease – option transaction, therefore the S.A.F.E. Act does not apply!

What about the part of the above – described transaction, involving the property owner choosing to finance the purchase of the manufactured home after the option is exercised? If the property owners had no security interest in the home during that latter part of the transaction, one might further argue no mortgage is created, and again, the S.A.F.E. does not apply. Why would a property owner finance the home without holding a security interest in it; i.e. deliver title to the buyer and only hold a unsecured promissory note? Why not? The property owner might choose to do so, because the lessee has now established an excellent (rental) payment history. The home isn’t likely to be relocated, as the cost of moving is usually much higher than the value of the home. Even if the home is moved, the buyer is still obligated under the promissory note.

Another argument suggesting the S.A.F.E. Act wasn’t intended to address lease – option transactions, has to do with a primary goal of the S.A.F.E. Act: prevent the predatory lending practice of arbitrarily taking a borrower’s home without a judicial hearing (non – judicial foreclosure). Breaking a lease, however, always involves a hearing before a judicial authority. Hence, one can argue regulatory authorities are much less concerned about a landlord taking advantage of a tenant/lessee, than an unscrupulous lender taking advantage of an unsuspecting borrower.

A caution. Some ‘lenders’ claim their loan program allows LLCommunity owners to employ retail installment contracts, and not be subject to the S.A.F.E. Act. Perhaps. But in some cases, the lender is loaning the property owner’s funds, dollars specifically earmarked to finance on – site home sales. Well, if the LLCommunity owner/operator provides specific instructions to the lender regarding buyer qualifications and terms of financing, the property owner is, in effect, controlling the transaction. Might such transactions be considered a sham or a ruse by regulatory authorities?

Another concern with third party lenders, is cost and servicing effectiveness. In this day and age of rock – bottom interest rates, and record low manufactured housing shipments and sales, can loan transactions absorb 15 – 20 percent per year servicing fees? Can collections representatives, several states away, be more effective ‘over the phone’, than on – site community management personnel? If local personnel are already handling on – site rent collections and are involved in even a part of finance collections, why not do it all? And if third party servicing is ‘sold’ as a means of avoiding S.A.F.E. Act compliance, might regulatory authorities view this as yet another ruse?

Finally; one additional argument which may tip the scales in favor of lease – option transactions, is the recent focus of various regulatory authorities on sloppy foreclosure practices and paperwork. Hardly a day goes by we don’t read of another lender who thought its’ attorneys, agents, and staff were handling foreclosures correctly, only to find one detail or another (e.g. not reading legal documents before signing) was mishandled, putting the entire foreclosure process in jeopardy.

A nuance of the S.A.F.E. Act, is that it involves Federal ‘guidelines’ enforced by specific state legislation. Hence, there are wide variations in enforcement, from state to state. And even when S.A.F.E. Act licenses might not be required, other state licenses might be . So, community owners interested in lease – option transactions, in about a dozen states, are currently seeking legal counsel to ensure (their) compliance with applicable lending laws. Some are even sharing the cost of research and of drafting state – specific lease – option contracts. If you’re interested in participating in this cooperative effort, contact the web site posting this blog for appropriate contact information.

Announcement! On a semi – related matter; need late model repo manufactured homes to fill vacant rental homesites? Go to repogallery.com or phone (586) 337-5373 (Citizens Bank of Michigan) for dozens of possibilities.

III

There’s a not – so – new, but increasingly visible game in town these days…

“Nationwide, residents of manufactured homes have historically faced issues of predatory lending and constrained financing options. However, evidence suggests well – built, energy – efficient HUD Code homes, properly sited on ‘owned land’ or in a resident – owned community, and financed fairly, can appreciate in value and represent an attractive, affordable asset – building housing option.”

If that paragraph, quoted from ‘News & Updates from CFED’ grabbed your attention, you’ll likely want to participate in CFED’s Manufactured Housing Webinar Series: ‘Promoting Quality Affordable Housing’ on Wednesday, November 17th, from 2 – 3 PM EST. For information, go to cfed.org/knowledge_center/events/ or phone (202) 408-9788 or 207-0149. Panelists? Several; but MHIndustry & LLCommunity aficionados will recognize Stephen Wheeler, managing director at Housing Advisory Services.

IV.

Landlease Community Development Opportunity in Fast Growing Energy Boom Area of Northwest North Dakota!

Don Westphal has taken a proposed 260 rental homesite manufactured home community through the local approval process, and his client seeks a development partner, or someone to take complete control of this timely project. Located on US highway 2, West of Stanley, ND, the Montrail County board has enthusiastically supported the much – needed landlease community project, and the city of Stanley has agreed to supply water to the project. Engineering for the project would be completed during the Winter months, in anticipation of a Spring ground breaking and occupancy in – fill during late 2011. Contact Don at don@dcwestphal.com for details.

V.

‘Same ol Saber Rattling of the Past, or a Throwing Down of the Gauntlet?’

This industry observer does not plan to become involved in what appears to be an evolving matter at this time; but if you read the MHIndustry’s tealeaves of sorts, i.e. press releases, weekly reports, and the like, emanating from our industry’s national advocacy bodies, you’ve observed increasingly pointed and strident, and at times defensive, postures and tone of late…

Well, just this past week (11/9/2010), per board fiat: “…MHARR’s new approach and direction will be designed to uncover, expose and address all the matters that have contributed to a seemingly endless decline (in MH shipments), which has had a devastating impact on the industry’s small businesses, and the mostly lower and moderate – income American consumers of affordable housing.”

And the ‘movement to contact’, as we’re wont to say in the Marines, has begun. Suggest YOU take a gander at MHMSM.com newsletter feature by Eric Miller.

V

Beech Street Capital Expands into Landlease Community Lending!

Damon Reed and Dan Armstrong have joined Beech Street Capital, and will lead the company’s expansion into landlease (nee manufactured home) community lending! The veteran loan originators will be based in the Birmingham, Alabama production office, and will be responsible for originating LLCommunity loans on a nationwide basis! Reach Damon via (205) 991-6700X 8191 and Dan via (205) 991-6700 X 8192

VI

GFA Management, Inc., dba PMN Publishing ‘Searches for a New Platform’

Allen Letter professional journal subscribers were surprised to learn, in November’s issue of the monthly LLCommunity newsletter, of GFA Management, Inc., dba PMN Publishing’s now public search for a new, permanent, not – for – profit or for – profit platform. This action is intended to ensure continuation of the annual ALLEN Report, International Networking Roundtables, popular Manufactured Housing Manager (‘MHM’) professional property management training and certification program, two business newsletters, many books, and dozens of standard forms, into the future.

Since the first of November, three interested parties have visited Indianapolis, IN., to discuss this rare opportunity, and one has expressed interest via correspondence.

For the record; the ideal platform for these work products (i.e. more than a half dozen ‘profit centers’) at play here, is an existent or new not – for – profit national trade body with strong ties to investment real estate and or manufactured housing. Since this focus limits the number of capable successors or partners, the opportunity was made public, in the hopes another entity or person, with known passion for the asset class, will step forward, in either a not – for – profit or for – profit mode, to continue the many valuable products and services designed solely for landlease community owners/operators nationwide. The ideal or WIN – WIN combination, whether not – for – profit or for – profit based, will be a national platform balancing a desire for legacy recognition, on one hand; with, compensation that’ll guarantee said LLCommunity products and services are taken seriously, on the other hand. And frankly, there is no personal or corporate deadline in effect here! Barring an acceptable, mutually beneficial transition, life and work will likely continue unchanged beyond year 2011. Interested in discussing this matter further, simply phone (317) 346-7156. GFA

***
End Note.

1. Spencer Roane has been a landlease (nee manufactured home) community owner/operator for 26 years, and engages in lease – option ‘financing’ to sell manufactured homes in properties he owns and manages. He obtained the mortgage loan originator (MLO) license and mortgage broker (MB) licenses required by the S.A.F.E. Act, but was advised by legal counsel, the Act does not apply to his lease – option financing. He serves on the Georgia Manufactured Housing Association (GMHA) board of directors and is a direct member of the Manufactured Housing Institute’s (MHI) National Communities Council (NCC) division. Spencer can be reached via spencer@roane.com or (678) 428-0212.

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

Time for Another Manufactured Housing Industry Paradigm Shift?

Status Quo, One Consolidated National Advocacy Body, or reorganized ‘Producer Only’ & ‘Post Production’ Associations dba MHARR & MHI?

I.

Disclaimer = ‘a statement of disavowal’. Webster. “I have no dog in this fight! OK, maybe three.”*1 However, I have no proclivity to or for any of the alternatives described in the above subtitle, simply a strong and enduring desire to see the HUD Code manufactured housing industry and landlease (nee manufactured home) community asset class well and effectively represented in our nation’s capitol!” GFA

So, what’s a paradigm shift? Popularized more than a decade ago, it was a trendy term to describe “a (business) example serving as a model or pattern”. Not heard much today, but know the manufactured housing industry (‘MHIndustry’) has experienced at least a half dozen paradigm shifts (i.e. Changing manner in which we ‘do business’) since the early 1970s.*2 However, what hasn’t changed or shifted during the past 30 years, is the way we’re represented and lobbied in behalf of, in Washington, DC and Arlington, VA. Hence the ‘question title’ of this week’s blog posting.

This conversation started, somewhat unexpectedly, with responses to the BEBA (‘Blast Email Blog Alert’) announcing last week’s blog posting titled: ‘The CAMPAIGN, Calculating Housing Price Points, & $$$ Talk!’ Hopefully you read that blog in its’ entirety, and ‘took action’ in one or more of the means suggested! In any event, last week’s BEBA went something like this: ‘Have YOU compared MHI’s WEEK IN REVIEW one pager ‘MHI Participates in MHCC Committee this Week’ with MHARR’s 12 page REPORT AND ANALYSIS describing the same event?’ If not, I suggested readers contact both advocacy bodies for copies of said documents, both dated 29 October 2010. Did YOU?

First off; I misspoke. MHARR’s REPORT AND ANALYSIS was not twelve pages long, only six. The ‘other six pages’ were three two pagers of talking points, describing why the Manufactured Housing Consensus Committee (‘MHCC’) should 1) ‘Oppose HUD Actions Undermining MHCC’s Role, Authority & Independence Provided by Law’; 2) ‘Reject the HUD – MHI Proposed Fire Sprinkler Standard for Manufactured Housing’; & 3) ‘Asset Its’ Statutory Right to Review and Comment on HUD’s Expansion of its’ Regulations’. Sorry ‘bout that. But know what? YOU should still obtain and read all 12 pages. To obtain a copy, phone (202) 783-4075. And, while you’re at it, contact MHI, via (703) 558-0678 and ask Thayer Long to point you towards a copy of (last week’s) WEEK IN REVIEW.

What I’m not going to do here, is pen a paragraph by paragraph comparison of these two disparate descriptions (As I’ve done before…) of this recent MHCC meeting – the volunteer body created more than a decade ago, upon passage of the Manufactured Housing Improvement Act of 2000. If you’re a businessman or woman with ownership stakes (a.k.a. Have ‘skin in the game’!) regarding one or more business interests related to HUD Code manufactured housing and or the LLCommunity asset class, YOU should be concerned enough about ‘What’s Happening!’ and ‘How You’re Represented!’ in our nation’s capitol to ‘Stay Informed!’ Nuff said.

A related perspective. Was recently made privy to informal correspondence among individuals debating the merits, or lack thereof, regarding creation of separate ‘Producer Only’ & ‘Post Production’ (nee ‘the aftermarket’) national advocacy bodies. One telling argument, against such a split, contained points presently ‘not on the table’, by dint of our semi – united industry, heavily influenced by housing manufacturers:

• Implement five & ten year warranties on all new homes
• Require final & comprehensive inspections of every new home prior to shipment
• Shift total responsibility for all new home installations to manufacturers
• Disallow direct sales of new homes by manufacturers
• Proscribe preferential new home pricing by manufacturers

Point? Enter ‘Producer Only’ & ‘Post Production’ advocacy bodies, and expect these five – and likely more, presently assuaged sore points, to become lively issues of dissension. No, the most desirable scenario is to speak with one voice, underwrite one national body!

The most pressing need of contemporary manufactured housing, and by extension, the LLCommunity asset class, is a united focus on solving (chattel) finance issues; which in large part, keeps annual shipments at the 60 year nadir 50,000 ‘new homes’ level, versus 372,843 ‘new homes’ shipped during 1998, the final year of our too short renascence.

OK, so where do we go from here? I have no idea. That is entirely up to those of you who patronize this website and blog posting each week, and have valuable stakes in the future (good) health of this industry and asset class. First step, obviously, is to become and stay informed. Reading this weekly blog posting, and monthly Allen Letter professional journal, are good starts. And there’s not better way to continue that process, than to become an active, direct member of the national advocacy body best representing your business interests, whether HUD Code home manufacturer, supplier, financier, or from the realty side of the house. What will YOU do?

II.

FLASH! Breaking News! You’re reading about it first here! The RV/MH Hall of Fame of the RV/MH Heritage Foundation in Elkhart, IN – national repository of our RV/MHIndustries’ and asset class’ history and heritage, via museum and library, will soon launch Invest in a Dream, an aggressive fund – raising program, to finance the final phase of facility construction!

Here’s what makes this NEWS. The RV/MH Hall of Fame will soon launch a ‘once in a lifetime and career opportunity’ for YOU to acquire ‘naming rights’, for yourself or someone of renown in the RV/MH industries, to be affixed to the new Grand Hall and Manufactured Housing (exhibit) Hall @ $1,000,000.00 apiece! There’re also naming rights opportunities for the Outdoor Show Area @ $1,000,000 per year; and various Roadways/Streets/Boulevards @ $100,000 apiece; plus five lakes at $50,000 apiece. It’s also going to be possible to buy large engraved Paving Bricks @ $500 apiece, and smaller engraved Paving Bricks @ $250 each. Point? You’re hearing about this NOW, before anyone else in the MH & RV industries. SO, if you’ve wanted to ensure your good name, or that of someone of renown from either of these industries or the landlease community real estate asset class, is publicly recognized and honored in perpetuity, phone (574) 293-2344 or (800) 378-8694 today, and ask for information and application form! Remember, this is truly a ‘once in a lifetime and career opportunity’. Don’t miss this opportunity and regret it later! GFA

******
End Notes.

1. Given my loyalty to three dozen HUD Code manufacturer Business Development Managers, a.k.a. ‘BDMs’ named at the NSAC II in Elkhart, IN., on 2/27/09; being a direct, dues – paying member of the Manufactured Housing Institute (‘MHI’) – as YOU should be too – phone (703) 558-0678; and, founding and present day board member of the National Communities Council (‘NCC’) division within MHI. As a 30 year industry consultant and LLCommunity owner, I’ve been told I don’t qualify for membership in the Manufactured Housing Association for Regulatory Reform (‘MHARR’) – or I’d belong there too.

2. If you’d like a free copy of the recently updated (November 2010) ‘MOBILE & MANUFACTURED HOSUING; serving the shelter needs of ‘newly weds & nearly dead’ for 50+ years! The PARADIGM SHIFTS: (are)….Phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 and request it.

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

The CAMPAIGN, Calculating Housing Price Points, & $$$ Talk!

HUD Housing CAMPAIGN Continues to Generate Lively Interest, Introducing the ‘Ah Ha! & Uh Oh! Housing Price Points Worksheet’ &
How Manufactured Housing Shoots Itself in the Foot, Hand & Head!

I.

For a second consecutive week, The CAMPAIGN to promote HUD Code manufactured housing, proposed at a recent ULI Manufactured Housing Communities Council meeting by creativehavenmedia.com, stimulates record level response from readers of this blog at community-investor.com!

Four executives from the Cherry Hill, New Jersey firm described how the manufactured housing industry “…could (should) create new distribution channels by effectively partnering with big box retailers, and other similar venues, to bring new homes face – to – face with new and old target markets.” *1 This past week I asked Lauren Shippy, Strategic Planner for creativehavenmedia.com, to summarize The CAMPAIGN.

‘This isn’t just another marketing campaign. It’s about creating a new channel in which to integrate the value supply chain (of manufactured housing), so gaps are bridged between the home manufacturer and financier, landlease community or building site, and the consumer/homebuyer.

The CAMPAIGN begins with a strategically located showcase event (featuring one or more manufactured homes), framed and vigorously promoted with regional and continuous marketing and public relations measures, to capture the attention of targeted demographics, and initiate procedures to change consumer perception.

Once consumer’s attention is focused on the housing display, sponsors have opportunities to educate them about ordering, financing, and siting their new home! The process connects the dots for the consumer/homebuyer in a simple and straightforward manner.

The CAMPAIGN also allows sponsors to identify and overcome product marketing hurdles, one region at a time. Using the showcase event as a forum for educational and bridge – building seminars, sponsors can demonstrate the numerous benefits of affordable manufactured housing to local banks, municipalities, zoning boards, even local employers.

Housing design flexibility provides opportunity for various sectors, within the manufactured housing industry (e.g. landlease communities), to produce campaign – supporting promotions, directed at their particular demographic in a specific region. In summary, The CAMPAIGN is comprised of components working together to increase the demand for manufactured housing, making the design, buying, and installation process easy for the consumer, and resolve historic hurdles in local housing market. (Edited. GFA)

What’s next? SUCCESS or FAILURE to implement The CAMPAIGN is up to YOU! Last week, suggested you contact Thayer Long at the Manufactured Housing Institute (‘MHI’): (703) 558-0678; Danny Ghorbani at the Manufactured Housing Association for Regulatory Reform (‘MHARR’): (202) 783-4087; & Amy Haven, at creativemedia.com: (609) 313-5885. Did you? If not; and another week goes by without your vocal support, this creative initiative will, sorry to say, surely die, like an earlier similar proposal unanimously lauded at the 2008 Networking Roundtable! How so? HUD Code housing manufacturers, later that Fall at MHI’s annual meeting, voted down a plan to launch a Nationwide Brand Awareness & Image Improvement Campaign, fearing non – participating HUD Code manufacturers would have a pricing advantage over those supporting that campaign with fee assessments on each new home shipped.

Understand this, if The CAMPAIGN fails to materialize this time around, just as in baseball and crime, manufactured housing will be one strike, or opportunity, away from (Or, closer to!) being terminal; you know, as in the ‘Three strikes & you’re out!’ call or death knell! Is that how HUD Code housing wants to exit the national housing market? With nary a whimper? I surely hope not; and trust you feel the same. Frankly, the manufactured housing industry’s future is in your hands today! What will YOU do?

Are YOU and I alone in promoting The CAMPAIGN? NO! Reread last week’s blog posting at this website! And here’re recent, additional (edited) thoughts on the timely and strategic subject:

• ‘With regard to The CAMPAIGN. I agree an image campaign is well over due. Remember when Champion Homes (nee Champion Enterprises) effected a national campaign a couple decades ago – on the Johnny Carson Show? I’m thinking any image campaign should be localized, funded by (home) manufacturers, landlease community owners/operators, and MHRetailers in that local housing market.” One caveat however: “Until we have a firmer handle on our (chattel) financing situation, now may not be the best time to kick off such a program; rather, ‘keep our powder dry’ for now.” DO

• “We have always wanted to change the image of our industry, to equal and better than ‘mainstream’ homes. However, our (business) success is and always will be, associated with the down payment and monthly payment (amounts) required for safe, comfortable, low maintenance homes quickly delivered for move – in.” NB

• The CAMPAIGN “Can’t hurt, until some manufacturer will not back his (housing) product, or a ‘trailer’ dealer messes over a customer – but still worth a try. Better we return to the lowest cost housing product we can build; that is and always will be our market.”

OK; ‘the ball is NOW in your court’. Again, what are YOU going to do? Pass or play???

II.

When the time comes to calculate appropriate home sale price(s) for a prospective homebuyer visiting your standalone or on – site salescenter, or estimate price points for new inventory to be ordered when opening a salescenter in a new local housing market, ‘How do you do it?’ Historically, in the rough and tumble world of HUD Code manufactured housing, we’ve oft relied on the self – serving advice of manufacturers’ regional sales representatives, concocted a formula of our own that sometimes seemed to work, adjusted the easily researched ‘book value’ of resale homes, or simply priced existing or newly ordered inventory by the seat of our pants. Now there’s a much better way! Use the ‘Ah Ha! & Uh Oh! Formulae’ for “…estimating maximum recommended ‘affordable’ & ‘risky’ purchase (or sale) prices for new & resale, privately – owned homes of any type, sited on realty owned fee simple with home, or leased – as in a landlease community (‘LLCommunity’)”. *2

The ‘Ah Ha! & Uh Oh!’ methodology begins with either a prospective homebuyer or household’s Annual Gross Income (‘AGI’), or the Area Median Income (‘AMI’) of any local housing market with a postal zip code. For the purpose of calculations to follow, AGI & AMI can, and will be in this example, the same dollar amount, e.g. $60,498. Specifically, this is the National Association of Realtors (‘NAR’) estimated national Median Family Income or MFI (akin to AGI), for between 2006 and the present.

Side Note. Why the ‘Ah Ha! & Uh Oh!’ Moniker? Originally, the formula was used to estimate home sales and price points per ‘affordable housing and housing affordability’ alone. Well, Creighton Weber, realty loan originator with Wells Fargo, noticed the first letters of the four words were AHHA, and he morphed them into the common exclamation: ‘Ah Ha!’; as in, “Ah Ha!, here’s how to effectively estimate affordable housing price points!” And when the scope of the formula was broadened, to include less stringent measures of housing affordability, accommodating homebuyers willing to take on more risk, when buying and financing a new or resale home, it made sense to round out the title with the exclamation, ‘Uh Oh!’ Watch and see how these two thesis materialize in the paragraphs to follow…

Here’re the ‘givens’ and related factors, in order of appearance, in the eight step calculation process. $60,498 MFI (Just as easily, AGI or AMI – the latter, easily available from zipskinny.com, per postal zip code, of subject local housing market); a 30% Household Expense Factor or HEF, per ‘loaded’ (Including PITI & household/utility expenses) and ‘barebones’ (Only PI, no TI, etc.) perspectives.*3 Then, either 75% or 100% of estimated ‘loaded’ & ‘barebones’ HEF amounts available for annual PI & site rent – if applicable; and in this case, $333/month, depending on whether it’s to be an ‘affordable’ (e.g. 75% of HEF amount) or ‘risky’ (e.g. 100% of HEF amount) loan commitment on part of borrower. Loan terms of 6.5% & 20 year terms for a real estate secured, and 9.5% & 20 year terms for a chattel (personal property) mortgage. Also assume a 10% of sales price down payment . Final step to the ‘Ah Ha! & Uh Oh!’ methodology, is to adjust the fee simple ‘affordable’ and ‘risky’ home sale prices and price point calculations, according to the value of underlying real estate, a key factor whose value varies widely, e.g. between $5,000 and $50,000+/- per site or acre, depending on whether raw or developed land, rural or urban locale, and other conditions.

With all that said, and given the factors cited in the previous paragraph, here’re the four new or resale home sales prices, and or inventory price points, for homes (to be) sited as follows:

With an ‘affordable’ loan and within a landlease community: $95,000.00

With a ‘risky’ loan (Using 100% of HEF for P&I only): $141,000.00

With an ‘affordable’ loan and on realty owned fee simple: $169,000.00, minus value of underlying realty, e.g. @ -$50,000 = $119,000.00+/-

With a ‘risky’ loan (Using 100% of HEF for P&I only): $225,000.00, minus
value of underlying realty, e.g. @ -$50,000 = $175,000.00+/-

Bottom lines? With an annual income of $60,498.00, buy a new or resale manufactured (or modular) home sited in a LLCommunity for an ‘affordable’ $95,000.00; or, a effect a somewhat riskier transaction (by dint of paying taxes & insurance & utility payments in addition to the 30% HEF) for $141,000; and pay $333/month site rent for professional property management, generally lower taxes (personal property vs. realty), and property amenities, among other benefit.

Or, given same $60,498.00, buy a new or resale manufactured (or modular) home sited on realty owned fee simple for an ‘affordable’ $169,000.00, less the value of the underlying real estate; or, effect a somewhat riskier transaction (by dint of paying taxes & insurance & utility payments in addition to of the 30% HEF) for $225,000.00, less the value of the underlying real estate; and be responsible for all the routine maintenance of the home and privately – owned site, whether in a subdivision or elsewhere.

Now, with all that said, again understand there’re additional factors, e.g. annual real estate taxes; where improved ‘realty owned fee simple’ generally pays much higher taxes than usage taxes levied on homes sited in landlease communities, where property owner also pays real estate taxes on the overall multifamily rental property; and tax credits, rent control, etc..

III.

What do LLCommunity owners/operators talk about when they get together these days? Following is the slightly edited transcript of an actual conversation among small to mid – sized property portfolio folk, discussing the purchase, pricing, resale, repossession, and financing of used manufactured homes.

“Every time I run across one of these ______ repos, I wonder why the ‘suits’ on Wall Street, and the powers – that – be at that lender have so much difficulty understanding what we see day in and day out. This is a (manufactured) home in our LLCommunity in _______. The lender financed it for 30 years! The buyer paid site rent and house payments like clockwork for 12 years, then moved out, saying there’s no way she’s going to pay another 18 years on that home. Not sure what her ‘grunt line’ is, but I wouldn’t be surprised if she would have stayed in the home, if she only had just three more years to pay on it – for a total of 15 years.”

“Well, our property manager and maintenance man went to look at another _____repo on private property in _______ – a ’97, 24X40 (20% smaller than a 16X76). Their buyer paid regularly for 14 years, then decided he wasn’t willing to pay another 16 years. Considering the $3,500 we’d have to spend for move/setup, $4K for back taxes and rehab, $2K for decks and skirting rehab, and what we figure we could sell it for, we offered $3-4K for the manufactured home.” Lender’s response? “No! We want $12,000. ‘Comps’ have come in at $11,000. So, lowest we could go is around $9,000, since the balance on the loan is $38,000.” LLCommunity owner: “Unbelievable. Homeowner pays for 14 years and only shaves $3,000 off the principal balance! Don’t know about the rest of you guys, but I haven’t been able to buy a repo at a price that makes sense in about six months.”

“Over the past few months, we’ve bought eight manufactured homes. Two were in our LLCommunity; the rest in other owners’ properties. Best deals I’m finding are coming from homeowners who need to sell quickly – of which there seem to be a lot these days. We’re turning them around and doing Lonnie Deals (‘contract sales’).”

“Just got back from Jack Miller’s tribute seminar in Tampa. Pretty much everyone there sees things continuing to slide for the next two or three years, and credit remaining tight. This means affordable housing – combined with some type of seller – financing, will be very much in demand. This is what I’m seeing around here. Rarely do we hold a home for more than 30 days before reselling.”

And this summary, by yet another LLCommunity owner/operator: “Conventional lending today is a real conundrum. To the frustration of taxpayers and potential borrowers, beneficiaries (lenders) of TARP, used the funds to acquire weaker banks instead of making new loans, as the government intended, but didn’t require. Those lenders who want to make loans, are being required to follow incredibly strict guidelines, particularly regarding income, credit, and appraised value. Since many potential borrowers have lost their jobs, have little to show for retirement and savings funds, run up credit card balances, etc., many can’t meet the income, down payment, and credit requirements. Those few who can satisfy those requirements then run into appraisers who tell them the property (house) they want to refinance (to take advantage of today’s low rates) is worth half what it was two to three years ago – so they can’t get the loan they need. So, the only loans being ‘closed’ today are to buyers of foreclosed property with 750+ credit scores, high stable income, and 20% down payment. Since few transactions meet all those criteria, bank revenue (from loans) drops and more bank failures are inevitable. To keep more banks from getting into financial trouble, the government’s solution is to tighten lending guidelines. Second verse, same as the first.”

IV.

What’s happening? During first and second weeks of November, take a gander at that month’s edition of the Allen Letter professional journal. Why? Feature story is a ‘Request for Proposal’ to acquire the dozen or so Work Product profit centers that comprise GFA Management, Inc. dba PMN Publishing. Think: annual ALLEN Report, Networking Roundtable, two subscriber – supported monthly business newsletters, the popular Manufactured Housing Manager (‘MHM’) training & certification program (with nearly 1,000 MHMs designated to date!), and much more. To obtain a copy, phone (317) 346-7156.

On 17 – 19 November, in Chicago, there’ll be a Captive Finance Workshop. For information, phone Ken Rishel @ (773) 647-3125.

Louisville MHShow is now a definite GO! So; plan to be in Louisville, KY., on 13 & 14 January 2011 to help rejuvenate this valued Midwest manufactured housing event. There’ll be three LLCommunity – oriented seminars on the 13th: the Community Series Home; how to use the above – referenced ‘Ah Ha! & Uh Oh! Formulae’ to estimate home sale and inventory price points in any local housing market in the U.S. For registration information, contact Dennis Hill @ (770) 587-3350.

Plans are moving ahead for NSAC III. LLCommunity owners/operators should watch their mail for a letter to the 250 folk who’re on the Official Insiders List of the asset class. These are the owners/operators generally recognized as being the Movers & Shakers in the MHIndustry and LLCommunity asset class. IF you don’t get a letter by mid – November, phone the MHIndustry HOTLINE (see End Note # 2 below) and request to be invited to this seminal event tentatively scheduled for Florida in early February 2011. Focus? ‘Examining Self – finance from the LLCommunity owners/operator’s Perspective!’ This is where we’ll be talking about the ‘present and future’ of self – finance within the LLCommunity realty asset class for years to come!

*****
End Notes.

1. See blog posting # 111, title: ‘Attention HUD Code Housing Manufacturers! Are You Listening?’ Visit: community-investor.com

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

3. PITI = loan principal, interest, taxes, insurance

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

Attention HUD Code Housing Manufacturers! Are You Listening?

If NOT; no one to blame but yourselves, if shipments continue to languish!

I.

Last week, at a Finance Seminar in Springfield, IL., Greg O’Berry, President & COO of Hometown America, and chairman of MHI’s National Communities Council division, during his ‘State of the MHIndustry’ keynote address, opined IMAGE continues to be a perennial bugbear for HUD Code manufactured housing! *1 And until we ‘Take a Major Step to Image – Educate the Consumer – Public’, our systems – built housing product is ‘not their father’s mobile home’, but an attractive and high quality, affordable and non – subsidized, ‘green’ and energy efficient Shelter Alternative, our annual housing shipment total will continue to bump along at its’ 60 year nadir. *2

Well, the HUD Code manufactured housing industry, a.k.a. MHIndustry, is now poised to ‘Take (that) Major Step to Image – Educate the Consumer Public’!
Did YOU read last week’s blog posting titled ‘The CAMPAIGN’? If not, you might want to stop reading this blog posting, and scroll back a week to this web site’s archive, to do so. Seriously. Then the following paragraphs will enjoy maximum impact, relative to your thinking, and hopefully – personal and corporate action and support of The CAMPAIGN!

An early alternative title for this week’s blog was ‘The CAMPAIAGN Revisited – through the eyes of manufactured housing aficionados responding to this timely and strategic Challenge and Opportunity!’ But if you’re with me this far, title alternatives no longer matter. What you want to know NOW, is what our peers have been saying and writing in response to ‘The CAMPAIGN!’ And FYI, last week’s posting generated the strongest reader response of the 120 blogs penned to date. That’s very ‘telling’….

But first, a clarification to last week’s blog, wherein was stated, “…The CAMPAIGN debuted at a recent national gathering of manufactured housing executives and landlease (nee manufactured home) community owners/operators, meeting in Washington, DC.” This was actually the Fall meeting of the Urban Land Institute’s (‘ULI’) Manufactured Housing Communities Council (‘MHCC’), under the leadership of Kenneth Lipschutz, VP of finance & acquisition at Brookside Communities in Detroit, MI. Why is this important to know? ULI’s MHCC, as a discreet product council, functions as the de facto THINK TANK for the MHIndustry! And now, having provided the bully pulpit for ‘a concept whose time is now’, next key step is to identify national and or regional DO TANKS (e.g. advocacy and trade groups representing manufactured housing and LLCommunities, along with private and public firms), to articulate, fund and implement The CAMPAIGN! If you’d like information about becoming an ULI & MHCC participating member, contact Kenneth via (248) 645-1077.

Here’re some of the ‘lightly edited remarks’ our peers submitted regarding The CAMPAIGN:

“The CAMPAIGN is the first real, viable light at the end of this black hole (i.e. minimal home shipments) for the MHIndustry. This is so exciting. I hope ‘the big three’ will listen to reason, putting away self – serving mind sets for the first time in six decades!” *3 JK in IN.

“I am all for, and willing to help support, any type of national (brand) awareness program. I think the big box store parking lot is an interesting concept. Worth exploring!” JD in MI.

“Exactly George. The CAMPAIGN does not have to be ‘perfectly agreeable’ to everyone; but certainly implemented loudly and nationally! We will not legislated, regulate, or postulate ourselves out of this mess. We must SELL our way out!” NB in AZ

“Interesting post George. Some observations and comments relative to The CAMPAIGN:

Advantages of big – box exposure over MHRetail sales lots include, more traffic, indirect solicitation (e.g. ‘See a new home while shopping at Walmart!’), tacit endorsement by the big – box stores, not to mention even more traffic for the stores!

Disadvantages might include bog – box stores, or shopping center owners, charging for this prime exposure, big – box store reluctance to endorse what might be seen as a ‘problem product’, and big – box reluctance to overcrowd their parking lot.

Concerns/questions regarding which manufacturers homes would be displayed and how many homes displayed at one time – obviously dependent on size of parking lot.

Local landlease communities should be present, in some fashion, at big – box store displays, to give prospective homebuyers more options for siting their new home.

A Code of Ethics, signed onto by MHIndustry participants, along with minimum standards (e.g. for LLCommunity participation) would be welcome improvements in support of The CAMPAIGN.”

The preceding five observations and comments submitted by industry veteran & GMHA board member, Spencer Roane, of Atlanta, GA.

“It’s been tried in the past. Perhaps a conversation with former MHI economist Jim Clifton is in order, to benefit from his experience in working with bog box stores a few years ago.” Marty Lavin in VT.

“We used to do a number of ‘shows’ in big box (store) parking lots. It’s not as easy as you think, to draw people into the houses. Some people are afraid they are getting sucked into a 90 minute condo type sales presentation. The key might be signage: ‘A 10 minute tour that could change your life and budget!’ Once inside, they’ll see our homes are ‘nicer than their home’ and ‘not what they expected – it was better.’ Expect some initial push back from MHRetailers, e.g. ‘Who’s going to pay for these displays?’ & ‘Who’s going to man them?’ & ‘I’ve got a great street location already!’ With that said, however, ‘Access to new potential homebuyers is the key to the success of The CAMPAIGN.” RK in WI.

What follows here, is the most thoughtful and far reaching response to last week’s blog introducing The CAMPAIGN. While the big – box store concept isn’t even mentioned in this overview, there’s enough related verbiage and thinking to the concept, to use it as a conclusion to this week’s revisit to The CAMPAIGN concept:

“…a lot of what was talked about 20 years ago is still being discussed today: better recognition and acceptance of the manufactured housing brand and (landlease community) income – producing property type; also zoning, construction codes, proper and fair lending practices, etc.. Another constant, is the inability of the MHIndustry as a whole, and its’ leaders, to gain a secure market footing where ‘affordable housing’ and LLCommunities are concerned; to secure reliable, reputable financing for the housing product; and, creation of national branding and advertising campaigns!

“Furthermore, until there is a unified group to assaults the problems that erode the foundation of the MHIndustry, the collection of well – intended businessmen and women working therein, will continue to be forced to deal with many, if not all, these problems individually. And that unified group will need a lot of money to professionalize the industry. Therein lies the rub. Without a major, identifiable ‘State Farm’ in the mix, everyone appears to be, and is, on their own! As observed at the Networking Roundtable last month, ‘Where are the manufacturers and home sellers in the problem – solving part of this (industry survival) equation? Who will commit to funding the industry’s ‘bank’ to move it forward? All too often it appears our Great Whites don’t lead with their money, but rather with their advice and PowerPoint presentations.” PS in IL.

With all that said, where does it leave The CAMPAIGN today? This website and weekly blog is just one voice in the manufactured housing wilderness, and YOU’ve responded well to my request for input last week. BUT, have YOU contacted executives at Clayton Homes, Champion Homes, and CAVCO Industries – all of whom were represented at the aforementioned ULI/MHCC meeting in Washington, DC – encouraging them to ‘give legs’ to The CAMPAIGN? If not, YOU owe it to yourself, and the rest of us, to do so, the sooner the better! For contact information, see End Note # 4. And, if a direct dues – paying member of the Manufactured Housing Institute (‘MHI’), it wouldn’t hurt to contact Thayer Long @ (703) 558-0678, to encourage that national advocacy body to grab this bull by the horns as well, and lead the MHIndustry back to increased volume of new home sales (nee shipments)! Not a member? Join when you phone! For that matter, it’s also a good idea to tell Danny Ghorbani about The CAMPAIGN! His national advocacy body, the Manufactured Housing Association for Regulatory Reform (‘MHARR’) represents most of the smaller HUD Code housing manufacturers in the U.S. These stakeholders should especially want to become actively involved in The CAMPAIGN! Contact Danny via (202) 783-4087.

Finally; keep the blog responses coming! Not only do they stimulate my writing juices each week, in our behalf, but – as you can see in the previous paragraphs – your considered responses provide the very fodder that comprise the best blog postings of all! Reply directly to this blog, or via gfa7156@aol.com or via the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Looking forward to hearing from you!

Postscript. Just realized the email address included in last week’s introduction to The CAMPAIGN, contained a typo. Should have read: ahaven@creativehavenmedia.com
Strongly recommend you contact Amy Haven of creativehavenmedia.com to encourage her and her team of four marketing executives, in Cherry Hill, NJ, to do whatever they can, as you too are doing, to get the manufactured housing industry to fund and implement The CAMPAIGN! Their phone: (609) 313-5885.

II.

25 of you joined me for the Finance Seminar in Springfield, IL., this past week! Now, how many of you will be in Grove City, Ohio @ 28 & 29 October for OMHA’s ‘Self Finance Legal Compliance Seminar’? All presenters are from one law firm (Tomkies Scheiderer, LLP) and 21st Mortgage. To register, phone Tim Williams at (614) 799-2340. And, lest you forget; during the very same time frame, the Five State Mid – Atlantic Annual Conference convenes in Albany, NY. Phone Nancy Geer @ (518) 867-3242. And, on Friday 29 October, Jim Keller, MHM, will be conducting IMHA/RVIC’s ‘Installer Continuing Education – Transportation & Safety Seminar (four hours) in Indianapolis, IN., from 1 – 5PM. To register, phone Jim at (317) 370-5954.

On November 17 – 19, there’ll be a Captive Finance Workshop in Chicago, IL. For information, phone Ken Rishel @ (773) 647-3125.

III.

Will I see you at the Louisville MHShow on 13 & 14 January 2011? Sure hope so. As I told you last week, there’ll be a special day of seminars for those ‘selling and self – financing new and resale homes in LLCommunities’. For registration information, phone Dennis Hill @ (770) 587-3350.

IV.
OK, I let the cat out of the bag last week, by announcing preliminary plans for a National State of the Asset Class (‘NSAC’) caucus III, probably in Florida during early February 2011. Already, a dozen of you have committed to attend – that’s how timely and critical this contemporary topic is to LLCommunity owners/operators nationwide: ‘Examining Self – finance from the LLCommunity owner/operator Perspective!’ And yes, there’re plans to invite a few realty and chattel lenders to input as resource voices during discussions of the ‘present and future of self – finance within LLCommunities’, relative to ‘realty mortgages and refinance’, as well as ‘permanence or not, of the self – finance trend’.

What you may or may not know, there’s a special Insider’s Contact List of LLCommunity owners/operators who’ve patronized the previous two NSAC caucuses. We plan to distribute a letter this week, to update/purge said list, so an Advance Planning Document can be sent out during late November. So, if you own and or fee manage one or more LLCommunities, and would like to be included on the Invitation List for NSAC III, let me know by responding to this blog, or email via gfa7156@aol.com , or phone (317) 346-7156.

Attendance at NSAC III will be limited to 100 LLCommunity owner/operators, plus invited resource voices. Just as the previous two NSAC caucuses set the stage for our asset class survival this decade (i.e. Five Action Areas still very much in play) and HUD manufacturers now fabricating Community Series Homes (‘CSH’) for siting in our properties, with the help of Business Development Managers (‘BDM’); NSAC III will likely be the defining venue for chattel finance in the LLCommunity environment!

V.

Finally. The 22nd annual ALLEN REPORT compilation nears completion. But some LLCommunity owners/operators who read this blog posting each week, and who’ve been listed in previous editions, have NOT submitted their portfolio data yet. So, FAX questionnaire to (317) 346-7159 ASAP! Need a questionnaire? Phone (317) 346-7156.

VI.

If you’re an Allen Letter professional journal subscriber, pay close attention to the November issue – arriving next week. Front page will feature a Request for Proposal to acquire and/or absorb the MHIndustry & LLCommunity asset class ‘work product(s)’ of GFA Management, Inc., dba PMN Publishing. While there’s no immediate plan to retire or exit the MHBusiness anytime soon, planning should begin now, in 2010 and early 2011, to ensure the gradual, orderly and effective transition of newsletters, texts, forms, reports, MHM program, events, etc., from one permanent platform (i.e. 1980 to 2010, so far) to another, during the year(s) ahead. Platform preferences, in declining order of interest? 1) An existing or new national, not – for – profit MH, or realty – oriented association, to purchase and absorb GFA/PMN in toto; 2) An existing or new national, for – profit firm, to purchase and absorb GFA/PMN in toto; or, 3) Dismantling of GFA/PMN, selling off revenue – producers: two subscriber – supported newsletters, 21 year old Roundtable event, popular MHM certification program, textbook and forms inventory, ALLEN REPORT, and more. Interested in learning more? Read the November issue of the Allen Letter professional journal: Phone (317) 346-7156 to subscribe.

***
End Notes.

1. bugbear. Persistent problem or source of annoyance

2. systems – built housing. The trade term of preference, per Joe Stegmayer, chairman & CEO of CAVCO Industries, and new chairman of the Manufactured Housing Institute (‘MHI’). Alternatives: factory – built housing & industrialized housing, with HUD Code manufactured housing as a subset of all three terms.

3. Clayton Homes, Champion Homes, CAVCO Industries.

4. Clayton Homes: Kevin Clayton @ 865) 380-3000. Or ask for Lance Hull, BDM or Colt Davis, BDM. Champion Homes: Kevin Flaherty, BDM @ (919) 467-0099. CAVCO Industries: Joe Stegmayer @ (602) 256-6263 or Bill Danforth, BDM @ (602) 763-0521. And while you’re at it: Chris Miller, BDM, at Adventure Homes @ (877) 510-1955X109; Steve Quick, BDM, with Fleetwood Homes @ (512) 255-7743; Brian Cira, BDM, with Harmony Homes @ (800) 999-8787X3235; Ed Hussey, Jr., BDM, with Liberty Homes @ (574) 533-0431; and, Terry Decio, BDM, with Skyline Corporation @ (574) 294-6521.

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

The CAMPAIGN

There’s a New Team in Town and It Might Have What It Takes to Help the Manufactured Housing Industry Regain Significant National Market Share!

I.

Labeled ‘New Marketing Tactics for Manufactured Housing: The Wave of the Future?’, a recent presentation by four executives from the Cherry Hill, New Jersey firm creativehaven media + marketing, described how our industry could (should!) create new distribution channels by effectively partnering with big box retailers, and other similar venues, to bring new homes face – to – face with new and old target markets.

The CAMPAIGN, strategically, is designed to be a regionally planned and executed means, to effect increased demand for our housing product in new and existing markets, via three distinct but related methodologies:

Re – branding and re – imaging our housing product, via careful online and print media planning and buying

Experiential marketing, via showcasing our housing product in big box retail store parking lots, supported by a series of message – supporting local seminars

Enhance awareness and availability of our housing product via public and community relations efforts and events

Is The CAMPAIGN a perfect and ready program? Not yet. The CAMPAIGN debuted at a recent national gathering of manufactured housing executives and landlease (nee manufactured home) community owners/operators, meeting in Washington, DC. The dual purpose of the presentation was to 1) introduce The CAMPAIGN, and 2) solicit direct feedback (i.e. critique, ideas, alternatives) from this top level gathering of industry leaders. Suggestions included:

Agree to no longer use the descriptive adjective ‘manufactured’, and go simply with housing; and when/where necessary, follow MHI Chairman Joe Stegmayer’s lead and refer to the unique housing type as being ‘systems built housing’.

Articulate and agree on a housing design and construction standard supportive of this new marketing dynamic.

Articulate and agree on a landlease (nee manufactured home) community quality standard supportive of this new marketing dynamic.

Articulate, and ensure all participants agree, to abide by a Code of Business Ethics

Much more about The CHALLENGE was discussed during this high level meeting of business executives and LLCommunity owners/operators, but you get the idea of what could/should lead our industry forward to restored market share. The question now is; ‘Where do we (You) go from here?’

First; whether this important and timely matter ‘grows legs’ and moves forward, depends in large measure, whether firms like Clayton Homes, Champion Homes, and CAVCO Industries executives, as well as MHI’s new chairman, ‘take The CAMPAIGN ball and run with it’! Will they? And don’t forget, there’re additional HUD Code housing manufacturers who’d likely be interested in participating in The CAMPAIGN, if invited or challenged to do so. Continue to read this blog every week to hear firsthand what’s happening….

Second; much depends on whether YOU, reading about The CAMPAIGN, here in this Blog posting, and soon elsewhere, take the initiative to input The CAMPAIGN directly, to learn more about it, and offer your support, to creativehaven media + marketing, via (856) 702-6063 or ahaven@creataivemedia.com (Amy Haven or Kendra Brill). Marketing executives on this team, with manufactured housing experience, are Susan Gargano and Lauren Shippy.

Third; if you’re a direct, dues – paying member of the Manufactured Housing Institute – and if a bona fide business participant in this industry and asset class you surely should be, take the initiative to let Thayer Long, at MHI, know of your support for The CAMPAIGN! (703) 558-0678. For that matter, contact Danny Ghorbani of the Manufactured Housing Association for Regulatory Reform (‘MHARR’), suggesting he promote The CAMPAIGN concept to his housing manufacturer members as well. (202) 783-4087.

So, at this point what do YOU think of The CAMPAIGN? Does the concept resonate with YOU? I’d like to know! At present, I’m receiving more than a dozen direct responses, each week, to compelling topics covered in this blog. So, don’t be shy: respond directly to this posting, via the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or write to GFA c/o Box # 47024, Indianapolis, IN. 462347.

II.

Where will YOU be this Thursday, 21 October 2010? I’ll tell you where several dozen LLCommunity owners/operators, who’re presently ‘selling and self – financing new and resale homes on – site in their properties’ will be: at a FINANCE SEMINAR hosted in the Northfield Inn in Springfield, IL. That’s right, they’re driving and flying in from throughout the Midwest, to attend this one day potpourri of topics germane to that timely and strategic business model. For details and or to register, phone Bob Thieman @ (217) 528-3423.

III.

And where do you plan to be on 13 & 14 January 2011? At the resuscitated Louisville Manufactured Housing Show we surprised you with in last week’s blog posting! Don’t forget, 13 January will be an extra special day for those who, as described in the previous paragraph, ‘sell and self – finance new and resale homes in LLCommunities’. Three seminars that day will explore the concept (and reality) of Community Series Homes (‘CSH’) for LLCommunities; ‘How to Properly Calculate Affordable & Risky Price Points of New & Resale Homes Sited Within & Outside LLCommunities!’; and, ‘All you’ve wanted to know about self – finance,but didn’t know who to ask, e.g. difference between ‘captive finance’ and ‘buy here – pay here’ methodologies, and much much more’! For information, contact Dennis Hill @ (770) 587-3350.

IV.

Now, here’s a new thought for you; actually, it’s a third manifestation of the National State of the Asset Class caucus concept, that debuted on 27 February 2008. Remember that pivotal day? More than 100 LLCommunity owners/operators convened at FountainView LLCommunity in Tampa, FL., to ‘take control of their collective future’ in the face of plummeting manufactured home shipments. Well, Five Action Items came out of that meeting, and they continue to guide the asset class to this day! Then, a year later to the day, 27 February 2009, another 100 MHIndustry & LLCommunity folk NSAC -caucused in Elkhart, IN., at the beautiful RV/MH Heritage Foundation’s Museum & Library facility. That time we walked away with mutually agreed upon new home design guidance, nearly three dozen Business Development Managers (‘BDM’) named by attending manufacturers, and eventually the aforementioned Community Series Home (‘CSH’) concept.

A third NSAC caucus in the works? Yes. The ‘need to caucus’ has been around now, for almost a year. This Fall, an increasing number of LLCommunity owners/operators have asked to caucus, on their own, to ‘Look at Self – finance From Their Perspective, as Investors and LLCommunity Owners’, and NOT just as a ‘stop gap measure’ to tide them over until chattel (personal property) finance returns to manufactured housing. The plan to caucus, for a third time in four years, got a boost at the recent National Communities Council (‘NCC’) meeting in Denver, CO., where it was opined LLCommunity owners/operators should meet again before the next scheduled MHI meeting in March of 2011. SO, if you’re a LLCommunity owner/operator, watch your mail during the weeks ahead, for an Invitation to Join Your Peers at the Third NSAC Caucus, sometime in late January or early February, likely in a Sunbelt state, hopefully on – site in a LLCommunity. To ensure you’re not overlooked, respond directly to this blog posting, phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764, or write GFA c/o Box # 47024, Indianapolis, IN. 46247. Or call (317) 346-7156 or email: gfa7156@aol.com

V.

Finally. I’m in the midst of consolidating data from 100 ALLEN REPORT questionnaires, preparing the 22nd annual edition. If you’re a portfolio owner/operator of LLCommunities and NOT returned your completed questionnaire, please do so this week! FAX it to (317) 346-7158. Some very interesting stats so far; so don’t be left out…send in your information TODAY. Thanks. 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
(3170 346-7156

So Obvious An Answer is Rarely So Ignored & Misunderstood!

Manufactured Housing & Landlease Community Asset Class’ answer to:

Worst Case Housing Needs 2007: A Report to Congress – the U.S. Department of Housing & Urban Development’s (‘HUD’) office of Policy Development & Research (‘PD&R’) most recent biennial report.

I.
‘
But first, feedback from blog readers, responding to last week’s posting: ‘Time for a Change?’ Subtitled: ‘Days of the hammer & velvet glove may be over!’ It’s encouraging many in the MHIndustry & LLCommunity asset class, take time to read and respond to stimulating exposes and issue discussions. Here’s a typical response, received this week: “Great blog. Once again, the nail hits the head. This effort will need all the industry. The challenge is to convince the ‘egos’ they all need each other!” N

If you missed last week’s description of “…the independent initiative, outside MHI and MHARR political circles, to unify, influence, and improve how manufactured housing interacts with federal regulators (of the industry) in Washington, DC.” scroll back into the blog archive at this website, to learn what’s really going on ‘within & without’ the manufactured housing industry these days. Frankly; if you’re a stakeholder (i.e. entrepreneur or corporate business owner) YOU owe it to yourself, your employees, your peers, and your customers, to KNOW what’s affecting your business model and plan! No one else is going to tell you so clearly, what’ going on….

II.

“Nearly 6 million households experienced worst case (housing) needs in 2007. This is an 18 percent increase from 2001, when only 5 million households faced this difficulty.” Now imagine how this 6 million households figure will swell, when year 2008’s housing trauma is written into HUD’s PD&R report Worst Case Housing Needs 2009, when it debuts during 2011! But back to the 2007 report. Here’re highlights quoted in RESEARCHWORKS, an online newsletter from HUD’s PD&R:

• 93 percent have severe rent burdens, the primary cause of worst case needs

• 73 percent have extremely low incomes

• 37 percent were families with children, 20 percent were elderly, 10 percent were non – elderly disabled, and 32 percent were ‘other’.

• Almost half of households with children had full – time employment

• 49 percent were non – Hispanic white; 21 percent were Hispanic; and 23 percent were non – Hispanic black

“The (PD&R report) study found the availability of housing stock across the nation is insufficient for the lowest income groups. For every 100 extremely low income households, there were only 76 affordable rental units available (those costing 30% or less of a household’s income). This lack of affordable and available rental units and severe rent burdens are the largest barriers to families experiencing worst case housing needs.”

OK, the ‘affordable housing’ problem (challenge or opportunity) has been clearly described in the previous paragraphs. Is there a practical, present day solution to ‘insufficient housing stock, across the nation, for low income groups’? Sure. There are several, if bureaucrats will take off their blinders (to practical, present day solutions) and look beyond their minions and lobbyists inside the Washington beltway. One of these has to do with HUD Code manufactured housing, in tandem with landlease (nee manufactured home) communities in suburban and rural areas of this country.

Clarification. Most discussions about use of new and resale manufactured homes, in tandem with landlease communities (‘LLCommunities’) in urban environments, will be moot. Low project density (e.g. five or so houses per acre) preclude use of this type subdivided or landlease property on high value realty, unless local housing market conditions prevail and homeowner subsidies are rampant. However, replacing derelict housing units, with compatibly – designed manufactured homes, can work economically; but usually on a case by case basis.

Setting land cost aside for the moment, know that HUD Code manufactured homes in year 2008 (latest year for this type statistic), on the average (among singlesection & multisection models) cost $41.34 per square foot, to fabricate in a factory, compared to stick – built homes, at the time, averaging $88.55 per square foot, erected on – site. It’s as simple and significant a $$$ difference as that, where housing construction cost is concerned! One wonders, why HUD doesn’t do more to promote this affordable housing alternative, especially since it’s been tasked with regulating the manufactured housing industry for more than 35 years(?)

Now, mate that ‘half price’, attractive, non – subsidized, quality, energy efficient, ‘green’, transportable home to a vacant rental homesite within a professionally – managed, well – located, LLCommunity, charging a fair, local housing market – sensitive site rent, and one has the potential of a WIN – WIN situation for the aforementioned low income group of U.S. homebuying/site lessee citizens! Here’s how…

The first WIN. Price of the home. Like most consumer product choices, there’s the opportunity to buy ‘top of the line’ (i.e. larger, fancier, most expensive home), mid price range, or economically (i.e. smaller, basic, least expensive home), depending on one’s annual personal or household income level, a.k.a. Annual Gross Income or AGI. The goal here is to keep monthly housing cost (i.e. PITI & utilities; or loan principal & interest, taxes & insurance premiums, as well as utility payments) in sync at 30+/- percent of one’s annual personal or household income level. Examples to follow.

The second WIN. Amount of site rent. Here too, consumers (homebuyers) will find ranges, oft but not always, based on landlease property location, features, amenities, and local housing market conditions (e.g. Area Median Income or AMI per local housing market postal zip code via zipskinny.com), as well as economic factors of supply and demand. The goal is to find a site and rent rate that melds with housing unit cost in an affordable fashion. Definition and examples to follow.

How can low income folk achieve this WIN – WIN proposition? The process involves knowledge (Think AGI and or AMI); a measure of affordability (i.e. In following examples, a 30% Household Expense Factor or HEF); a decision (i.e. Whether to use 75% or 100% of Household Expense Factor to pay P&I & site rent); amount of monthly site rent (When home is in a LLCommunity); and, home mortgage terms (e.g. payment, interest, term, loan amount) or monthly rental amount for the home per se (In addition to site rent).

Example. Given an AGI or AMI of $36,000; using a 30% HEF; with monthly site rent at $333.; and chattel mortgage terms @ 9.5% interest & 20 year term.

30% HEF of AGI/AMI’s $36,000 is $10,800; and, 75% of this amount, is dedicated to P&I + site rent @ $8,100/year (Balance of that amount to cover T&I, as well as household utility costs). $8,100 converted to monthly amount of $675; this covers $333 in site rent and $342 towards P&I of home mortgage. Applying 9.5% interest & 20 year loan terms, with $342 P&I payment, the maximum ‘affordable’ mortgage would be $35,690. Assuming a 10% down payment, this ups the maximum ‘affordable’ home purchase price to $40,767 or rounded, to $41,000. (See end note # 1 for worksheet)

OR

Use 100% (vs. 75%) of HEF for P&I + site rent. Then, ‘running the numbers’, jumps the maximum home purchase price to a riskier $68,000. Why risky? Utility bills, factored into the initial calculation (i.e. residual 25% of HEF), but separated out here, still must be be paid – but outside the inclusive monthly payment calculation.

Bottom line? Depending on the nature and peculiarities of suburban or rural local housing markets, and presence (or not) of landlease (nee manufactured home) communities, it’s entirely possible (Happens all the time!) for someone, or a household, earning just $36,000/year, to buy a new or resale manufactured home priced between $41,000 and $68,000, where the site rent is approximately $333/month. There’s not a subsidized rent dollar in that mix! This everyday reality check ‘flies in the face’ of HUD’s PD&R report that “…found the availability of housing stock across the nation is insufficient for the lowest income groups.” Obviously Not True, according to these metrics! Is it possible someone (Everyone at HUD) simply isn’t looking within their regulatory milieu for practical answers? YES! Let’s watch, to see if anyone there, takes notice of this expose’ and initiates affirmative action to address their posit: “…lack of affordable and available rental units (being) the largest barriers to families experiencing worst case housing needs.”

III.

Either the MHIndustry is stirring, preparing to rise Phoenix – like, during year 2011, or what? Given stirring, timely and motivating keynote presentations by industry leaders Randy Rowe and Dick Ernst, during the Networking Roundtable in September; and, with encouraging announcements, earlier this month at MHI’s annual meeting, about budgeting for outside lobbyists in 2011, plus hiring a new executive to head the National Communities Council (‘NCC’) division, it’s easy to wax positive for a change.

And when you add – in, this week’s meeting of the Urban Land Institute’s Manufactured Housing Communities Council (‘MHCC’), our industry’s de facto Think Tank, in Washington, DC., well – Anything Can Be About to Happen! Then, the following week, there’ll be a class of 25 professional property managers trained and certified in Salt Lake City, Utah, by ROC-USA; followed by a day long (chattel) Finance Seminar in Springfield, IL., facilitated by IMHA.

Need more positive indicators? How ‘bout the reconstituted Louisville Manufactured Housing Show, 13 & 14 January 2011? Bet you didn’t know there will be dozens of new homes, including Community Series Homes, on display there. If you’d like to display, as a home manufacturer, or supplier (Like me; I’ll be there!), simply phone (770) 587-3350 and talk to Dennis Hill, show coordinator. And that’s not all! On the 13th, there’ll be three sequential 45 minute seminars on these three timely topics:

• Given an individual’s AGI, and or local housing market’s AMI (See preceding paragraphs for descriptions), How YOU calculate maximum ‘affordable’ & ‘risky’ sale prices for new & resale, privately – owned homes of any type, sited on realty owned fee simple with home, or leased. What every manufacturer’s rep should know how to teach YOU, as a MHRetailer or selling homes on – site!

• Community Series Homes. Their genesis, definition and description, who manufactures them for in – LLCommunity siting, and how YOU can properly meld them into any local living environment.

• All YOU ever wanted to know about property owner or self – finance of new & resale home transactions on – site in LLCommunities; particularly, the differences between ‘captive finance’ and ‘buy here – pay here’ methodologies.

And, there’s more to come, after the Louisville Manufactured Housing Show! Read about those opportunities here, in future weekly blog postings. A hint. We’ve already told you about the possibility of Grand ‘Once & For All! Tours coming to your area in 2011.

But have you heard about the possibility of a third National State of the Asset Class (‘NSAC’) caucus, in Florida during late January or early February? Many LLCommunity owners/operators have requested a 1 ½ day program, to examine and discuss ‘property owner or self – finance, of new & resale home transactions on – site’ from their stakeholder perspective. Why? Three reasons. First, to learn more about the process alternatives, pro & con; second, to identify ticklish aspects of the process (e.g. regulatory issues, raising capital, selling – off paper, etc.); and third, the possibility this ‘new business model’ will alter the face of chattel finance for years to come, if not permanently.

Now, if all this, as they say, ‘floats your boat’, as a LLCommunity owner/operator, let me know during the next few weeks! No significant response = no 3rd NSAC caucus; however, much response = a 3rd NSAC caucus, ‘by invitation only’, this Winter, and somewhere in Florida, preferably on – site in a LLCommunity! Respond to this blog directly, via email, or phone the MHIndustry HOTLINE: (877) MFD-HSNG or 533- 4764 or (317) 346-7156. Use the same means to respond to matters covered in this blog posting as well!

End Note:

1. For a free copy of the widely – used ‘Ah Ha! & Uh Oh!’ worksheet that “…estimates recommended ‘affordable’ & ‘risky’ purchase prices for new & resale, privately – owned homes of any type, sited on realty owned fee simple with home, or leased!”, phone the MHIndustry HOTLINE: (877)MFD-HSNG or 633-4764, or respond directly to this blog posting via this community-investor.com website.

***

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

Time for a Change? MHIndustry Budgets for a Contract Lobbyist!

Or, to put it another way: ‘Days of the hammer & velvet glove may be over.’

Disclaimer. In no way should you read what follows as a clarion or veiled call, to form a new, unified, national manufactured housing trade advocacy body. The intent is simply to describe an active, independent effort to unify, influence and improve how manufactured housing interacts with federal regulators (of the industry) in Washington, DC. GFA

As a directly related aside, last week’s blog posting at this website, titled: ‘AFTERGLOW & ‘MH to Learn from RV Industry?’’ introduced Randy Rowe’s succinct ‘Five Part Market Share Recovery Plan for Manufactured Housing Industry & the Landlease community Real Estate Asset Class!’ Scroll back thru this website’s blog archive to reread it; or, request a free copy of the summary treatise, enclosed as a lagniappe with the October issue of the Allen Letter professional journal.*1 It relates to…

This week’s blog focus is the direct result of conversations heard, & plans shared last week, at Manufactured Housing Institute’s (‘MHI’) annual meeting in Denver, CO. But first some numbers; then a brief historical perspective; finally, the guts of the issue.

If you’re a longtime MHI member, and recall hundreds of manufactured housing aficionados in attendance at past annual meetings, you’ll be shocked to learn this year’s event saw just 91 names on the 26 – 28 September registration roster. Deduct 17 state MHAssociation execs, and four more to account for invited speakers and no – shows (Have no idea how many last minute sign-ups and ‘crashers’ were present, but I did see a couple of the latter), one is left with but 70 businessmen and women, from 21 states, in attendance at this year’s annual business meeting.

Unless you’ve been ostrich-like during the past four months, you’ve certainly heard or read of the independent initiative, outside MHI and MHARR (‘Manufactured Housing Association for Regulatory Reform’) political circles, to unify, influence and improve how manufactured housing interacts with federal regulators (of the industry) in Washington, DC. The initiative was birthed during telephone conference calls among state MHAssociation execs, and made public during the Manufactured Housing Executive Council (‘MHEC’) meeting in June in Washington, DC. The matter was reported on, in this weekly blog posting, shortly thereafter. Who comprises the active, independent initiative today? An increasing number of HUD Code home manufacturers ‘from both camps’, some MHRetailers, several state MHAssociaiton execs, and more….
Their gripe? As it’s been explained to this industry and asset class observer, dissatisfaction with the (lack of) results per heavy – handed (Some say ‘hammering’), ultimately self – defeating dealings with federal regulators in one corner of the manufactured housing industry; and, dissatisfaction with the (lack of) results using velvet glove (Some say ‘consensus – building’) defeatist dealings with federal regulators, from another corner of our national advocacy presence. And those disparate tactics have oft led to industry disunity, a suicidal condition regularly exploited by the very federal regulators targeted, to influence and improve the regulatory climate suffered by HUD Code manufactured housing producers! Proof? The Manufactured Housing Improvement Act of 2000; not fully implemented to this day, more than a decade after its’ enthusiastic passage by Congress!

Will the active, independent initiative spread and grow? Too early to tell, but the bellwether indicator is and will continue to be, the amount(s) of money raised to support this regulatory focus; then identify and hire the right contract lobbyist to markedly unify, influence and improve how manufactured housing interacts with federal regulators (of the industry) in Washington, DC. Already, MHI has budgeted more than $120,000.00 to this end, during 2011. (But has it really? At MHI’s board meeting last week, their $120,000.00 foci priority was entirely legislative, not regulatory! See *2 for details). On the other (i.e. regulatory issues initiative) hand, HUD Code manufacturers have stepped up to the funds plate; several states have pledged financial support; and two well – regarded Washington, DC consulting groups have responded, in writing, to a Request for Proposal distributed after MHI’s (MHEC) meeting during June 2010. Bottom line? Apparently, two different war chests in the making….

Again, MHI’s $120,000.00 apparently earmarked for legislative issues; and the necessity, for a like or greater amount to be raised, via independent initiative proponents, to address manufactured housing’s perennial regulatory issues….

Want to learn more about the independent initiative; maybe even donate to the cause? Telephone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 and be put in touch with the appropriate ‘movers and shakers’ leading it. At the same time, if a direct dues – paying member of MHI and or MHARR, encourage elected and salaried leadership to unite their respective efforts, to markedly influence and improve their interaction with legislators and federal regulators (of the manufactured housing industry) in Washington, DC! In the meantime, continue to read this blog posting every week, to stay abreast of further developments as they occur….

Postscript.

See anything missing from this Time for a Change discussion? How ‘bout the landlease (nee manufactured home) community real estate asset class; you know, one of those dratted (in some folks’ mind) post production (nee aftermarket) segments of the HUD Code manufactured housing industry. It’s interesting to ponder why the most prosperous segment of the manufactured housing industry – at this time, is all but omitted from heady discussions when manufacturing/distribution segments of the industry (not realty asset class) are engaged. Suppose part of the reason is historical precedent. After all, how often is it that the perceived ‘tail of the dog’ is in a position to wag the dog? Furthermore; in year 2011, as MHI celebrates its’ 75th anniversary, the robust NCC division of MHI is only 15 years young – but growing.

But moving right along, and continuing with the dog metaphor; do we, as a realty asset class, even have ‘a dog in this hunt’? Of course we do, in a big picture way. Here’re two (regulatory) examples: implementation of the aforementioned MHI @ 2000 Act and home installation. In the first instance, once MHIA @ 2000 is fully implemented, segueing our affordable shelter product from ‘trailer stigma’ to full – fledged ‘housing status’, we’ll see our struggle for parity realized – opening marketing avenues along the way! And, we owe it to ourselves, as landlease community (‘LLCommunity’) owners/operators, to remain fully engaged in the regulatory processes, to ensure safe and secure, but not unduly expensive, installation regulations relative to manufactured homes sited in and outside our unique income – producing properties.

And yes, we certainly do also have a strong and abiding interest in legislative matters potentially affecting our realty asset class, like those listed in end note # 2 following.

End Notes.

1. Free copy: Allen Letter professional journal, and Mr. Rowe’s summary treatise available, by phoning MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

2. Dodd-Frank Wall Street Reform Bill; S.A.F.E. Act – related legislation; housing finance programs; ‘duty to serve’ tax reform; and, energy matters.

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