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

AFTERGLOW, & ‘MH to Learn From RV Industry?’

Networking Roundtable’s Keynote Challenge to the Manufactured Housing Industry, is echoed the same week, to the RV Industry, in Woodall’s Campground Management newspaper!

I.

‘Ah, one has to enjoy the afterglow following a successful annual national venue like the recently concluded 19th annual International Networking Roundtable (‘INR’)!’ But where to start? With the two beautiful singlesection Community Series Homes (‘CSH’) displayed by CAVCO Industries and Champion Homes? How ‘bout the two dozen landlease (nee manufactured home) communities offered For Sale by Marcus & Millichap? Or the nearly two dozen top notch presenters holding forth on as many cutting edge and timely topics? For many of us, it was Randy Rowe’s stirring keynote challenge to the manufactured housing industry, identifying Five Foci, required of us, to regain national housing market share – especially the ‘ins & outs’ of chattel (personal property) financing described by Dick Ernst, ManageAmerica/Origen executives, and Ken Rishel of PCA. To learn the entire story, about this year’s stellar Roundtable event, complete with housing supplier, realty, and speaker contact information, read the two lagniappes accompanying the October issue of the Allen Letter professional journal. To subscribe, phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 ($134.95/year)

How do others feel about this year’s Roundtable event? This letter from one of the attendees: “By now, you must be inundated with kudos re: the INR, but I need to add mine. What a pleasure it was to hear serious folk addressing serious concerns with what I thought may actually include a glint of resolve to follow –up their words with action. Frankly, I was surprised. (And) the absence of so many of the ‘old guard’ would, I assumed, cause a bit of a drop – off in the level of excitement, but the opposite happened! The ‘new guard’ showed enthusiasm and a healthy dose of humility by having the courage to ask great questions, and keep the dialogue moving.” PF (emphasis added)

A word about the last two sentences in the previous paragraph. We noticed this change in patronage as we processed registrations prior to the INR. While a dozen or more ‘roundtable regulars’ were absent this year, there was double that number of ‘first time attendees’. And while Thayer Long, of MHI, was the sole executive in attendance, from any of the national advocacy and trade bodies (Think MHARR, the NCC, and ULI’s MHCC & IREM), besides having participants from 26 states, we also documented no fewer than 20 second generation LLCommunity owners/operators! Another interesting demographic was the presence of so many MH and real estate specialists, e.g. 12 Business Development Managers (‘BDM’) from HUD Code home manufacturers; 10 Manufactured Housing Managers (‘MHM’), four Certified Property Managers (‘CPM’), and two Members, Appraisal Institute (‘MAI’) realty appraisers.

II.

And then there was this pithy and timely feature article headline in the September 2010 issue of Woodall’s Campground Management newspaper, page # 6:

2010 RVDA Convention/Expo Comes at a Delicate Point in Time for North America’s RV Industry. The subtitle proclaimed: “There is a consensus we have to recalibrate our definition of what is a good business environment,” said Mike Molino, president of the Fairfax, VA. – based Recreation Vehicle Dealers Association (RVDA), lead sponsor of October’s annual Con/Expo, “We’re not going to get back to the 400,000 – unit years any time soon.” (emphasis added) GFA

It was that last sentence that got me thinking; probably because I’ve heard similar sentiments expressed throughout the MHIndustry during the past couple years. Indeed, a rewrite of said headline and subtitle, per HUD Code manufactured housing, might read thusly:

2010 Manufactured Housing Institute’s Annual Meeting (9/27 & 28) Comes at a Delicate Point in Time for North America’s MH Industry. “We’re not going to get back to the 500,000 shipment years any time soon – if ever.” (emphasis added) GFA

Here’re excerpts from the above – referenced RV article; all of which appear to apply equally well to MHIndustry aficionados – YOU and me:

“…the aftershocks of the Great Recession are obviously still apparent in terms of unemployment, stock market fluctuations, and a general discomfort among many Americans, with regard to the general state of the economy.”

“…many of the nation’s durable good (sic) manufacturers – including RV builders – are still looking to bridge their way to the next year and the next level of recovery, and to find a comfort zone in this new post – recessionary age.”

“We’re not going to get back to the 400,000 – unit years any time soon. We’ll probably never return to that. The next couple of years will be tough, but doable. If dealers stay within the cash structure they have, they will survive. The consumer will come back – slowly. We won’t see a significant increase (in sales) until there is more certainty (about the state of the economy). I’m not so sure the election of 2010 will bring more certainty. That might just bring more confusion.”

Bottom line for us in the MHIndustry? The previous paragraph could well have been penned for the HUD Code manufactured housing industry as well! So, it’s high time we take insightful and proven leaders, like Randy Rowe, seriously. If YOU haven’t heard (at last week’s Roundtable) or read his Five Foci, in detail, YOU need to do so! Copies of his pithy and timely presentation will be distributed at MHI’s annual meeting in Denver, CO., and further be available as a lagniappe, in the October issue of the Allen Letter professional journal. If YOU care enough about the MHIndustry and its’ LLCommunity asset class counter part, you’ll make the extra effort to obtain said document, read it carefully, take it to heart, and act on it – the sooner the better!

III.

There are at least three October MHIndustry venues where YOU can make your views, on this Survival of the Fittest Topic (Reread part II of this blog posting!) known, and encourage appropriate (e.g. National Image Improvement & Branding Campaign) ACTION:

First, the Urban Land Institute’s Manufactured Housing Communities Council (‘MHCC’) convenes 13 October 2010, in downtown Washington, DC. This is our industry and asset class de facto Think Tank. A few dozen of the industry and asset class’ top leaders and thinkers will be present. To participate, phone Kenneth Lipschutz via (248) 645-1077 or KenL@BrooksideCommunities.com And if you missed Dr. David Funk’s (Real Estate Program head at Cornell University) ‘MH Demographics’ address at last week’s Roundtable, he’ll be repeating it for this audience!

Second; the Illinois Manufactured Housing Association (‘IMHA’) is hosting a one day Finance Seminar Program on 21 October in Springfield, IL. For details, phone Bob Thieman @ (217) 528-3423 or bthieman@imha.org If, as a LLCommunity owner/operator, YOU sell and self – finance new and resale home transactions on – site in your properties, YOU need to be present to learn the basics and fine points of this heady, and increasingly harrowing process! Heard of the exciting ‘Ah Ha! & Uh Oh!’ worksheet for calculating ‘affordable’ and ‘risky’ home prices, and monthly payment schedules, for new and resale homes sold in and outside LLCommunities? If not, you can’t afford ‘not to be present’ when this material is distributed and taught by the author.

Third; the Mid – Atlantic States Convention occurs 26 & 27 October 2010 in Albany, NY. While anyone ‘in the MHBusiness’ can attend, it’s primarily intended for MHIndsutry & LLCommunity folk from NY, NJ, PA, DE & MD. For information, phone (800) 721-HOME or info@nyhousing.org Word has it, HUD Secretary Shaun Donovan has been invited as a keynote presenter. Now there’s a potential opportunity to solicit HUD’s support for manufactured housing as this nation’s premier form of truly affordable, non – subsidized, quality, energy – efficient, attractive, transportable housing!
Will YOU be present?

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

‘SHOTGUNS & PICKUP TRUCKS’

19th Networking Roundtable Dishes Out Tough Love, $20 bills for $10 bills, and Much Much More! Also; researching the ALLEN REPORT, & another National State of the Asset Class (‘NSAC’) Caucus Is Coming Your Way….

I.

Facing a record number of landlease (nee manufactured home) community owners/operators from 26 states, and following the Pledge of Allegiance to the American flag, then individual introductions of nearly 200 attendees, Green Courte Partners founder and chairman Randy Rowe took the floor to dish out five specific courses of tough love to the HUD Code manufactured housing industry!

The theme of his presentation? ‘What the Manufactured Housing Industry Must Do to Regain National Housing Market Share’. This is Randy’s five point foci:

Better Warranties and Customer Service

Chattel Financing Issues

Economic Security for Our Customers

Multiple Listing Service(s)

National Marketing (Image) Effort

For a detailed presentation of Randy Rowe’s timely and sobering talk; along with a topic by topic, and speaker by speaker review of all two dozen subjects at this year’s Networking Roundtable in Phoenix, AZ., read the October issue of the Allen Letter professional journal. Therein you’ll also learn, how one firm freely exchanged $20 bills for $10 bills as part of their water sub metering presentation; and, why demographers characterize a portion of our market as being ‘shotgun and pickup truck’ customers.

In the meantime, here’s a sampling of email remarks (slightly edited for this blog) that awaited me when I returned home from Phoenix on Saturday:

“While many attendees of (past) Roundtables have been the ‘big boys’ in our asset class, a shift occurred this year, wherein the event attracted far more ‘Mom & Pop’ operators (owning 10 LLCommunities or less) than ever before.” SR (And) “The addition of Dr. David Funk, from Cornell University, was excellent and classy. Too bad more of the big operators were not there to listen!” KR. ‘That’s OK’; David will be repeating this attention – grabbing Manufactured Housing Demographics presentation to attendees at the ULI’s Manufactured Housing Communities Council (‘MHCC’) meeting in Washington, DC., on 13 October. To participate, phone Ken Lipschutz @ (248) 645-1077.

FYI. Dates of the 20th anniversary International Networking Roundtable are 14 – 16 September. Where? Well, that’s still TBA (to be announced). But, if you missed last week’s stellar event, own one or more LLCommunities, and want to be invited to next year’s Roundtable, phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633- 4764.

II.

‘Under Construction’ aptly describes the present status of the 22nd annual ALLEN REPORT (a.k.a. ‘Who’s Who Among Landlease Community Portfolio Owners/operators Throughout North America!’). AR questionnaires were mailed to 650 known portfolio ‘players’ last week. If you own/operate five or more LLCommunities and or 500 rental homesites, YOU should received one of the questionnaires. If NOT, phone (317) 346-7156 immediately, and request same. If leaving a voicemail message, be sure to provide your name, address, and telephone number, for follow – up purposes. The 22nd annual ALLEN REPORT will initially be distributed with the January 2011 issue of the Allen Letter professional journal. FYI. The ALLEN REPORT retails for $250.00 per copy, but is FREE to subscribers to the above – referenced business newsletter. So, subscribe today for $134.95.

III.

Are YOU struggling to decide how to maneuver through the chattel (personal property) housing finance compliance and regulatory morass, especially where (property) owner – assisted (a.k.a. ‘captive finance’) lending is concerned? Well, there’s immediate assistance on the horizon, to that end; and maybe a national venue in January 2011.

In the first instance, if this is a timely and strategic personal or corporate concern, plan to be in Springfield, IL., on 21 October when the Illinois Manufactured Housing Association (‘IMHA’) holds a daylong Finance Seminar. Greg O’Berry, CEO of Hometown America, and in – coming chairman of the above MHI’s National Communities Council (‘NCC’), is keynote speaker and will address: ‘State of the Manufactured Housing Industry’. In addition, there’ll be presentations by the Small Business Administration; Reasons (& How) to launch a ‘captive finance’ home loan program at your property(ies); information on Title II finance; and, How to Use the popular ‘Ah Ha! & Uh Oh! Formulae’ worksheet, for ‘Estimating maximum recommended ‘affordable’ & ‘risky’ purchase prices for new & resale, privately – owned homes of any type, sited on realty owned fee simple with home, or leased!’ – as in a LLCommunity. To register, phone IMHA via (217) 528-3423.

Preliminary plans are being made to facilitate a National State of the Asset Class (‘NSAC’) caucus type Chattel Finance Summit, in Florida during January 2011. No details yet available, but format will likely build upon the program described in the previous paragraph, with the addition of ‘Gauging the Effects of Owner – assisted Chattel Financing of Homes On – site, relative to the Value and Real Estate Lending Worthiness of Landlease Communities’. Veteran MHIndustry & LLCommunity businessmen and women will recall two previous NSAC caucuses; one on – site in a LLCommunity in Tampa during February 2008; and, the following February (2009) at the RV/MH Heritage Foundation Hall of Fame, Library & Museum facility in Elkhart, IN. The first event attracted 100+/- LLCommunity owners/operators intent on taking control of their collective destiny in the face of plummeting manufactured housing shipments. The second event attracted 100+/- LLCommunity folk and HUD Code home manufacturers who spent a day discussing design requirements for what is now commonly known as Community Series Homes (‘CSH’) – two of these were on display at last week’s Networking Roundtable in Phoenix! – and three dozen Business Development Managers (‘BDM’) were named to increase HUD Code home sales throughout the asset class nationally. This time around? Simple! Make sense of the chattel finance scene as it ‘plays out’ in early 2011; and teach those present how to go about properly originating home loans on – site; keeping them in compliance; how to package loans For Sale when new capital is needed; etc. If YOU want to be kept abreast of this developing opportunity, respond directly to this blog posting, or phone the aforementioned MHIndustry HOTLINE.

IV

Another important FYI. If an NCC member (i.e. of MHI’s National Communities Council division), plan to be present at the institute’s annual meeting in Denver, CO. @ 26 – 28 September! Among other reasons, you’ll learn of plans, once MHI’s budget is approved for 2011, to recruit and hire a new executive to administer the LLCommunities’ council! The NCC was launched in January 1996, has been served by at least four dedicated executives in the interim, but with none for the past year and a half. Be present for this historic step, in the soon to be 11 year history, of your advocacy body in Washington, DC. Haven’t become a direct member of the NCC yet? Phone Thayer Long @ (703) 558-0678.

***
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

Responses, Observations, & a Reintroduction…

‘Best Kept Affordable Housing Secret’ evokes your response; ‘Networking Roundtable’ awash in idiosyncrasies, & the Grand ‘Once & For All’ Tour!

I
“Great; you nailed it, George. If the good guys/gals want to win, they must solve the (manufactured housing) perception and financing (issues). Let’s watch to see if they have the belief and commitment ‘to go for it all’, putting their money where their mouth is!” NB (lightly edited. GFA) And this: “Loved the KIA point in your blog, wouldn’t have thought of it that way…Lots of important points, thanks for putting them out there. (Here’s my) multi – pronged suggestion: 1) support Manufactured Housing Institute (‘MHI’), 2) Strengthen that advocacy body, enabling it to move the MHIndustry ahead, (if necessary) under new robust leadership and supported by advisors and members; and, 3) Address the conspiracy theory(ies) once and for all – which I too hear about in discussions.” TK

If you didn’t read last week’s blog posting, titled: ‘Best Kept Affordable Housing Secret in the U.S.!’, you owe it to yourself to go back and do so! Why? Because frankly, ‘That’s where we are today’, and we’re not gonna go anywhere forward anytime soon, towards increased new manufactured home ‘shipments’ (Pains me to pen that, when I/we should be talking in terms of home ‘sales’), until we collectively address the reasons and issues identified in that blog posting!

Know what? I laid some bait out there, in that blog posting, to see if anyone would take and run with it. No one did. The bait? A ‘silver bullet’ I opined would heal manufactured housing’s decade long illness: “Debut an effective, charismatic, focused national leader (I can think of one!) and leadership cadre….” No readers asked who I had/have in mind. Either, as an industry, we don’t really care to be healed, or don’t believe anyone is up to the admittedly Herculean task; so we don’t care to know who this savior might or have been. Don’t bother to ask now; I’m not talking. But will tell you this; that person knows….

II

As a related aside; in an effort to trim down several hundred specific BEBAs (‘Blast Email Blog Alert) we’ve been sending each week, as this blog is posted, I asked addressees to ‘opt in’ or ‘opt out’ of receiving future notices. Here’re initial results during first five days:

67 individuals ‘opted in’ to receive future BEBAs of postings to this website. And responses continue to arrive daily. Have YOU ‘opted in’? To do so, simply respond to this blog posting, that you ‘opt in’. To ‘opt out’, do nothing….

Of the 67 ‘opt ins’ received to date, 33 have been from LLCommunity owners/operators, 14 from suppliers of products and services, four MHRetailers, four association executives, and three each from HUD Code manufacturers, lenders, real estate brokers, and trade publishers. Goal? 100 – 200 seriously interested individuals; folk, from all segments of the industry who truly care about the present and future health of HUD Code manufactured housing and the landlease community real estate asset class!

III.

As you likely know, the 19th International Networking Roundtable occurs this week (15 – 17 September) in Phoenix, AZ. Truly hope to see YOU there! Expecting 200+/- manufactured housing aficionados and landlease (nee manufactured home) community owners/operators from throughout North America! It’s almost too late for you to participate, but you can ‘try’ by phoning (317) 346-7156 and leaving a message, telling me you’ll see me at the Pointe Hilton Tapatio Cliffs Resort Hotel, or read on….

OK, so what are some of the idiosyncratic characteristic individuals and firms registered to attend this year’s Roundtable?

Topping the speaker list this year is Randy Rowe, founder and chairman of Green Courte Partners in Illinois; and with David Lentz, owner/operator of American Land Lease (a former REIT) in Florida. Randy was the executive who took Sam Zell’s then MHC, Inc. (now ELS, Inc.) public, as a REIT, during the early 1990s; and subsequent to that, founded Hometown America! Who better to ‘splain’ to 200+/- Roundtable attendees, ‘What it is we must do, as an industry and asset class, to reclaim our national housing market share?’ You can be sure this will be a max attendance presentation.

No fewer than eight Business Development Managers (‘BDM’), representing four HUD Code manufactured housing producers: CAVCO Industries & Fleetwood Homes, Champion Homes, and Adventure Homes! Where’re the others? You’ll have to ask them, but one would think they’d jump at marketing their Community Series Homes (‘CSH’) to LLCommunity owners/operators needing houses. Call it a missed opportunity…

Of course, something similar might be said of the Big Four + One, third party lenders still originating chattel (personal property) loans on manufactured homes. 21st Mortgage Corporation and CU Factory Built Lending are to be present; but not the other three. Is it any wonder so much (property) owner financing occurs these days?

And indirectly related to the previous observation, there’ll be at least two, maybe three, seasoned financial services and consulting firms who’re now carrying, what appears to be, the lion’s share of chattel home loan origination, servicing, and sale of ‘paper’, throughout the LLCommunity real estate asset class. May even learn, for the first time, of a quiet plan and practice, to restore positive traction to chattel lending on Wall Street!

While majority of attendees are bona fide LLCommunity owners/operators, they’re an eclectic mix of veteran portfolio firms, a few would be ‘players’, several newbie companies, even a ‘shared equity’ conversion specialist.

For the first time in a long time, every publishing segment of the manufactured housing and landlease community print and online trade press will be represented at a major MHIndustry event! Even the publisher of Rental Property Reporter plans to be present. All must be expecting timely and pithy trade news to report!

An especially exciting addition to this year’s program is Dr. David Funk, chairman of Cornell University’s Graduate Real Estate Program. This is the first authentic academic presentation, on demographics and manufactured housing, in a long long time. Hope MHI and other trade groups take notice….

Once again, interested LLCommunity owners/operators will convene, off – agenda, and during one seminar offering, to learn and discuss merits and challenges of forming their own ‘captive insurance’ firm during year 2011. More than a dozen owners/operators are committed to meet and plan the debut of this new business entity.

Did previous eight paragraphs stimulate a passionate desire to attend this seminal annual event, even at the last minute? That’s OK. Show up at the Pointe Hilton, Tapatio Cliffs, Phoenix, AZ. (11111 North 7th Street), the morning of Thursday, 16 September, with $450.00 registration fee, for LLCommunity folk; and $1,000.00 for Service Providers (e.g. lenders, manufacturers, product and service vendors). Check – in with Roundtable coordinator, Susan McCarty, of CommunityInvestor!

If unable to attend the Roundtable, but would like a detailed description of what happened, who presented, and what they said; read the October 2010 issue of the Allen Letter professional journal! (317) 346-7156 to subscribe @ $134.95/yr.

IV

A few months ago I introduced you to the concept of a Grand ‘Once & For All!’ Tour of seven regions across the U.S.. Well, I’ve been too busy, readying for the Roundtable, and getting Official Questionnaires into the mail for this year’s ALLEN REPORT, to spend time developing this concept. So let’s look at the basics again….

These seven regional 1 ½ day gatherings will be open to anyone in the MHIndustry and LLCommunity asset class interested in industry advocacy unity, personal and corporate positive motivation, practical education relative to timely and strategic topics, and improved print and online communication among all segments.

At this point in time, we’re looking at Grand ‘Once & For All! Tour stops in New England, the Mid – Atlantic, South, West, Pacific Northwest, Upper Midwest, and Lower Midwest (not necessarily in that order), during January, February, May, June, July, August, and October or early November 2011.

There’s much more to be said about the wisdom and practicality of planning, hosting, and effecting a series of geographic industry and asset class gatherings during 2011. The point in bringing the matter up in this particular blog posting, is to identify volunteers throughout the U.S., within the MHIndustry & LLCommunity ‘family’, who’d be willing to work with me to bring this unifying, motivating, educational, communication – enabling series of events to your/their area! To do so, respond directly to this blog, phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764,or call (317) 346-7156 or email: gfa7156@aol.com Need to hear from you on or before 1 October 2010, when planning begins in earnest for this Grand ‘Once & For All!’ Tour.

V.

FLASH! The official questionnaires used to research and prepare the 22nd annual ALLEN REPORT (a.k.a. ‘Who’s Who Among Landlease Community Portfolio Owners/operators in North America!’) are being mailed to 500+/- portfolio owners/operators this week, the second full week of September. Responses are due back to GFA Management, Inc., on or before 30 September, to be included in the final report, which will be enclosed as a lagniappe in the January 2011 issue of the Allen Letter professional journal. If you own/operate five or more LLCommunities and or 500 or more rental homesites, but have not received this questionnaire, call (317) 346-7156 to obtain same.

VI

Since many of you apparently didn’t realize (per your correspondence) the acronym KIA, now an automobile brand name, has – for decades, also meant ‘Killed In Action’ (as in military combat), how many of you know the alternative meanings of these popular abbreviations: NFL & USMC? In the first instance, locker room slang among professional football players, renders it ‘Not For Long’; a rueful commentary on careers oft cut short by injury. And among U.S. Marines, there at least three alternative renderings: ‘Uncle Sam’s Misguided Children’ (Carolyn’s favorite), ‘U Saw Me Coming!’, and one other….

*****

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

Best Kept Affordable Housing Secret in the US!

Why HUD Code Manufactured Housing & Landlease (nee manufactured home) Communities Continue to be ‘Best Kept Affordable Housing Secret’

I

One person’s passion is often another’s piranha, poser, puzzle or problem! Think of KIA brand automobiles. Today, a popular consumer choice; but for combat veterans, the chilling acronym for ‘Killed In Action’! Same to be said about succulent Kobe beef. A delicacy for many diners; but a ‘not on your life’ food choice among vegetarians. Some opine a similar dichotomy for this nation’s Best Kept Affordable Housing Secret….

Think HUD Code manufactured housing and landlease communities (‘LLCommunities’)! For aficionados of quality, inexpensive (1/2 the cost, per square foot, of site – built housing!), energy efficient, non – subsidized, transportable, single family housing, certainly a valuable bargain when well bought and well – sited, on realty owned fee simple or leased. But how many American homebuyers clearly know this, and select unique factory – built housing products when in the market for a new home? Not many. Why? A half dozen reasons.

Presently, there’s a major DISTRACTION. With 4,000,000+/- foreclosed and or repossessed stick – built homes in play these days (A number that varies from week to week, and from news source to resource person), would be homebuyers will shop in that affordable pool first, before seriously considering new manufactured homes. And since there’s NO SECONDARY MARKET to effectively market and resell manufactured homes, beyond MHVillage online listings, that avenue too is a nigh non – starter! So, there’re the first two reasons why manufactured housing continues to be this nation’s Best Kept Affordable Housing Secret!

Complete lack of national product and brand PROMOTION. Automobile manufacturers regularly do this – on national TV; so do pharmaceutical firms hyping virility and PDA pills; and, a plethora of companies peddling cable and dish TV, cel phones, and other cutting edge technology. So, why doesn’t HUD Code manufactured housing follow suit – at all? In my opinion: “Because we don’t play well together” has too long been our self – defeating siren song, playing out in more ways than one. A possible tri – part solution? Debut an effective, charismatic, focused national leader (I can think of one!) and leadership cadre; collectively backed and financed by a no – longer – divided national voice; if necessary, wrought from a drastically reorganized advocacy presence. Bottom line? As long as we don’t effectively nationally promote our unique housing product and lifestyle alternative, we’ll remain this nation’s Best Kept Affordable Housing Secret!

BAD IMAGE, bad image, BAD IMAGE, bad image, BAD IMAGE, bad image! Who’s to blame for the sorry state of affairs? BAD PRESS & BAD ACTORS! In the first instance, most of the secular and business press continue to practice the bromide: ‘BAD NEWS SELLS!’ In our case, this is regularly exhibited via the press’ persistent use of archaic, negative terminology, to subliminally negate positive views one might have for manufactured housing and landlease communities. Some in our businesses fight skirmishes of this nature in various ways, e.g. One with stock postcards responding, in part: ‘Oops…you slipped! Trailers haul livestock and beer. People live in manufactured homes. No one lives in a trailer!’* What do you do? It’s going to take many more manufactured housing loyalists, doing things like this and more, to turn the press in a positive direction. Here’s a novel suggestion. Research and prepare a comprehensive MHStyle Manual to distribute to every print and online news purveyor in the U.S.! Style manuals are everyday references, generally containing a dictionary or lexicon of trade terms, as well as contact sources for industry information and statistics. And the BAD ACTORS? They take many forms. Shoddy workmanship within housing factories, shifty ‘street dealers’, unsatisfactory customer service, predatory lenders, lousy landlords, and more; all working (often unintentionally) to keep BAD IMAGE in place year after year. How to interrupt this perennial cycle? Begins with each of us in the MHBusiness; the ‘five percenters’ who genuinely care! Make a sincere commitment to personal and corporate excellence! Seriously. Get active on the state level, via your trade association, as an industry image activist and board member. And when given an opportunity, make yourself and image improvement views known on regional and national levels. Frankly, until we, as an industry and asset class, effectively address BAD PRESS & BAD ACTOR impediments, we’ll continue to languish as this nation’s Best Kept Affordable Housing Secret! Are YOU a direct member of the Manufactured Housing Institute (‘MHI’)? If not, phone (703) 558-0678 today and join!

FINANCING. This is a bona fide hiatus* at this time! Available only to the most credit worthy of would be homebuyers, and then generally on the realty – owned fee simple side of the lending house. BUT, frequently available within many, if not most, larger LLCommunities (i.e. containing more than 100 rental homesites) throughout the U.S. How so? Well, that’s another major part of this story; one that’s been thoroughly covered in previous blog postings at this website (Scroll back through archived blogs!), and will be readdressed as circumstances change and or continue to unfold. There is one perspective on this subject, however, that warrants further attention: NOT ALWAYS AFFORDABLE. And there’re two interrelated aspects of this impediment to manufactured housing and landlease communities breaking free of their ‘rep’ as this nation’s Best Kept Affordable Housing Secret! One aspect has to do with calculating the price (value) of new or resale (manufactured) homes marketed in specific local housing markets (Identified by postal zip code and referenced, as Annual Median Income or AMI at zipskinny.com) and or sold to an individual or household with a provable level of annual income (a.k.a. Annual Gross Income or AGI). But first, ask any HUD Code home manufacturer’s regional sales representative, or MHRetailer, how to take either or both those ‘$$$ starting points’ (AMI &/or AGI) to calculate ‘affordable’ and ‘risky’ price points of homes to be sold in the given local housing market, or to the individual or household buying a home. You may be surprised at the answer(s); or, more likely, non – answers. And don’t forget to ask ‘How they got to their numbers?’. Today there is a practical way to effect these key computations, using the obliquely – named ‘Ah Ha! & Uh Oh! Formulae’.* The other aspect? Has to do with relationship of on – site homesite rent and PITI factor calculated using the ‘Ah Ha & Uh Oh!’ methodology. Here’s the rub; sometimes referred to as the KY-MN Rule of Thumb (Named for two MHIndustry leaders routinely using this rule in KY & MN); to wit: For a manufactured home sited in a landlease community to ‘sell well’ against similarly – sized and appointed stick – built homes in the same local housing market, the total monthly PITI & site rent payment on the former, must be at least $50.00/month less than the PITI payment for the latter! When that relationship is out of sync, it’s usually due to too high site rent, too much home for the prospective homebuyer (often the case), and or combination of both factors. Now you know.

CONSPIRACY. Do you really want to go there? Some do; some don’t. However, want to acknowledge this theory frequently surfaces in casual conversation among MHIndustry purists and veterans. Such talk usually centers around personal convictions that advocacy bodies have been infiltrated by stick – built housing loyalists intent on gradually dismantling the industry; and, HUD, as federal regulator of the our industry, has been its’ most reluctant bridesmaid for 35 years, rarely doing anything proactive, even reactive, to pointedly promote manufactured housing beyond being this nation’s Best Kept Affordable Housing Secret. Nuff said, for now…

Can YOU identify additional reasons why HUD Code manufactured housing and LLCommunities continue to be this nation’s Best Kept Affordable Housing Secret? Let me know by phone: MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764, or respond directly to this blog posting via this website!

II.

Remember last week’s blast email teaser quote: “LLCommunities to be the Salvation of the MHIndustry? Looks like it!” Well, we received several supportive messages regarding points made therein. Here’s one: “Well done, sir. Perhaps we should Thank the conspirators for starting our demise, so our national associations and ‘we’ could finish (the job). As an industry, we are definitely suicidal. We should be thinking aggressively and believing in our future! (What’s the chance our few remaining) financially strong manufacturers, LLCommunity owners, OEM suppliers, MHRetailers, and (third party) financial firms contribute monies to a pool to provide financing for creditworthy buyers of our housing product?” MM. And this; responding to (property) owner – financing of new and resale homes sold on – site via ‘captive finance’ and ‘buy here – pay here’ methodology: “Good for the LLCommunity owners; they KNOW how great our customers really are, and how they deserve our confidence.”

III.

For more information about the Best Kept Affordable Housing Secret in the US!,
+
• Attend 19th annual International Networking Roundtable in Phoenix, AZ @ 15-17 September. Not too late to register! (317) 346-7156 for special rates for LLCommunity owners, HUD Code home manufacturers, and service Providers. FLASH. Here’s a piece of inside information! Thanks to this blog, and other online postings, this year’s Roundtable is attracting as many ‘new faces’ as it does folk who’ve patronized it for the past 19 years! So, if you’re looking for prime prospecting, best educational offerings available anywhere in the MHIndustry, unparalleled interpersonal networking, and dozens of deal – making opportunities, register today! Our max capacity is 200, and we’re almost there!
+
• Only a few copies of the best-selling Manufactured Housing $$$ Primer remain. Sells for $29.95 per copy (includes postage & handling). Phone (317) 346-7156.
+
• If the ‘Ah Ha! & Uh Oh! Formulae’ methodology intrigues you, plan to be in Springfield, IL., on 21 October 2010. Why? The Illinois Manufactured Housing Association (‘IMHA’) is hosting a day long chattel finance educational program, for anyone in the manufactured housing business and landlease community asset class, who wants to attend. I’ll be describing the above methodology in detail, using said form. Call (217) 528-3423 for further information and to register for this seminal event. Given the ‘other topics’, anyone in self – finance will be there!
+
Remember; this Blog is only as useful as your input, suggestions, and ideas! GFA

***
End Notes.

• For a free copy of the ‘Oops…You slipped’ postcard, call (317) 346-7156
• Hiatus? A space where something is missing; a gap; a break.” Webster
• For Free copy of the ‘Ah Ha! & Uh Oh! Formulae’ form, call (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

Landlease (nee manufactured home) Community Owner/operator?

Consider yourself ‘toasted’, in more ways than one….

I.

Monday evening, 23 August, at the famous Rosewood Restaurant in Rosemont, IL., two dozen Chicago area landlease community (‘LLCommunity’) owners/operators gathered to socialize. Think Ed Zeman, Barbara Davis (Jennings Realty), Chuck Fanaro, Rick Camboni, Dennis Ohnstad, Eric Hagen, Ed Biskind, Brad & Matt Shechtman, John Zajicek, Greg O’Berry, Ken Hauck, Ben Kadish, John Rogosich, and nearly a dozen others intimately involved in this unique real estate asset class.

A highlight of the evening was the proposal and sharing of a formal toast to the memory and legacy of the late Bud Zeman, fellow LLCommunity owner, Chciago businessman, and friend to most of the folk gathered that evening. “To Bud Zeman!”

Shortly thereafter, a first – ever formal toast was proposed and shared, re: ‘The Community Owner!’ To the best of this industry observer’s recollection, this is the first time such a tribute has been offered publicly. It went like this:

Till that final home site if filled,
And every last bill completely paid

With mortgage refinancing approved
And confident our dollars are not delayed

We’ll continue to ply the trailer trade
With affordable homes factory made

Knowing so well, how lesser men are oft afraid
Of this business path & how they might be portrayed

So to you, my friends and fellow free holders,
I offer this toast to our humble but oh so worthy trade!

The September issue of the Allen Letter professional journal will contain a lagniappe (‘freebie’) 3X5 professionally printed Toast Card containing this historic toast. To subscribe, phone (317) 346-7156 for 12 monthly issues @ $134.95/year subscription.

Postscript. If you bridle at the use of the word ‘trailer’ in the toast above, feel free to substitute the word ‘housing’. Penned it as I did, to pay tribute to our industry’s genesis, well realizing our future is certainly with the latter. GFA

II.

Last week’s #100 blog, at this website, titled UNBRIDLED OPTIMISM & BOLD INITIATIVES, garnered dozens of reader responses (100% positive & encouraging!), far more than any of the previous 100 postings! For example: “I hope you continue this after you retire, as it’s good to have the most up to date info coming at us in this format. Looking forward to all the news you can tell. Thanks for all you do for our industry.” DR.

With that type of encouragement, I’m emboldened to borrow material from blog # 100, and mate it with insights garnered during Precision Capital Funding’s two day Chattel Finance Workshop in Chicago last week. Now, this is pretty heady stuff, so read carefully – reflect thoroughly – react appropriately…

GIVEN 1) The MHIndustry realized, 2 June 2010, during the Manufactured Housing Finance Roundtable, in Elkhart, IN., it would be ‘On its’ own’, from that point forward, and for the foreseeable future, where chattel (personal property) finance is concerned. AND, 2) Now, the LLCommunity asset class senses near abandonment, where third party chattel lending sources are concerned; SO, 3) Property Owner Finance (nee. self – finance), via ‘captive finance’ & or ‘buy here – pay here’ methodology, might not only continue as near term salvation for portfolio owners/operators across the U.S., BUT 4) Possibly ensures the very preservation and continuation of the MHIndustry at large! Think about that progression and conclusion. Do you agree or disagree?

How’s this deliverance unfolding? In fairly simple fashion. First, we’ve already seen Property Owner Financing of new & resale homes, on – site in LLCommunities, balloon in volume during the past decade, from maybe a few million dollars in ‘paper’ held by LLCommunity portfolio owners/operators a decade ago, to more than $3 ½ billion by year end 2009; and some now estimate that total to be $5+ billion dollars and growing! As more and more conscientious LLCommunity owners/operators take steps to bring existing chattel loan portfolios into compliance with state and federal laws and regulations; and better prepare themselves, through training and licensure, to effectively originate and underwrite new chattel home loans going forward (either in – house, with assistance of a financial services firm, or setting up separate LLCs to do so…), it’ll only be a matter of time before they provide (if not doing so already) said financing for FSBO (For Sale By Owner) deals occurring within their LLCommunities; and, when the time is right, sell off their ‘book’ of compliant loans (to existing, and new firms being formed to do this), realizing new capital for originating more home loans!

Want to actively participate in a national, public forum, to learn more about what was just described, and make your views, modus operandi, and ideas known? Attend the 19th International Networking Roundtable in Phoenix, AZ. @ 15 – 17 September 2010! ManageAmerica/Origen (816) 246-5053, will keynote: ‘Getting Chattel $ to Return!’ And Precision Capital Funding will be holding forth on ‘captive finance’ per se. For information on PCF’s next two day workshop on this subject, phone (217) 971-3968. Furthermore, it’ll be telling, to see how many of the ‘Big Four + One’ third party chattel finance lenders are present, expressing interest in LLCommunity business. To register for the Roundtable, do so via this website or phone (317) 346-7156. Mention this blog posting and pay a lesser registration fee! A final word on this $$$ subject: Only a few copies of the Manufactured Housing Finance Primer remain. Three dozen copies were purchased this past week! Order yours; phone (317) 346-7156. Only $29.95 postpaid!

III.

‘MHI’s Three Point Plan to Move the Manufactured Housing Industry Forward’ was the headline to the Manufactured Housing Institute’s Quick Links newsletter dated 14 May 2010. And shortly thereafter it was a major topic in Blog # 87, titled: ‘MHI’s Three Point Plan; CONSPIRACY vs. Suicide, & Overlooked Opportunities!’

So, what were these three points? In MHI’s words: “improving financing for our customers; advocating for the implementation of updates to the manufactured housing building code (Think Manufactured Housing Improvement Act of 2000, a.k.a. MHIA @ 2000. GFA), ‘keeping our homes competitive’ (this phrase added since May. GFA); and, protecting preemption of the federal building code.”

When I requested a three month update from MHI, I was reminded by Thayer Long, that members, at their June meeting in Washington, DC., “lobbied representatives on the GSE’s failure to properly implement their ‘duty to serve’ the manufactured housing industry” in accords with the Housing Economic Recovery Act of 2008 (‘HERA’).

Furthermore, Members of Congress were alerted that 60% of manufactured home owners rely on personal property (chattel) lending, and during the past two decades, MH has represented 21% of the national housing market. But now the FHFA’s (‘Federal Housing Finance Agency’) proposed rule stymies such financing for manufactured housing, and Congress assistance is needed to direct that agency to modify their proposed rule, and require GSE’s (‘Government Sponsored Enterprises’) to develop personal property lending products as part of their duty to serve the MHIndustry.

MHI members also lobbied on S.A.F.E. Act (‘Safe And Fair Enforcement of Mortgage Licensing) reform; specifically to exempt manufactured housing retail activities from the S.A.F.E. Act. For more information on these topics, visit manufacturedhousing.org

IV.

What do you call them? A recent communiqué from CNBC begins: “They’ve been called McMansions, Starter Castles, Garage Mahals, and Faux Chateaus but here’s the latest thing you can call them – history.” The story goes on to describe the apparent demise of “…garishly large homes, which are generally over 3,000 square feet and built very close together.” According to Wikipedia “They’re tacky, they lack a definitive style and they have a ‘displeasingly jumbled appearance.’” While I don’t anticipate a race by disaffected McMansion homebuyers to factory – built housing, motivated by national economic malaise, such retrenching could, in time (After many of the 4,000,000 ‘repo’ site – built homes are resold), be a harbinger for increased sales volume for HUD Code homes! Did I say ‘sales’? It’d be nice, timely and fitting, when this renascence occurs, to finally cease talking ‘shipments’, and get in accords with the rest of the housing market, and start talking ‘sales’.

Speaking of terminology. Has anyone else noticed? One of our national advocacy bodies long referred to non – manufacturing segments of the HUD Code manufactured housing industry as being ‘aftermarket’. That term long grated my sensitivity (Think of the synonyms) but few, or so I thought, listened to my aversion for the label. But earlier this year, 2010, I started hearing those same segments now referred to as being ‘post production’. Now, I can handle that. Makes me wonder though, how OEM (original equipment manufacturers), and other suppliers of housing components, feel out there in limbo land, being neither HUD Code home manufacturers or post production. Hmm. But then, we’ve learned to live with two identical acronyms during the past several years: Think MHCC. You know; short for Manufactured Housing Consensus Committee (relative to MHIA@ 2000); but as well, Urban Land Institute’s Manufactured Housing Communities Council. And then there’s MHARR. For sure, the letters stand for Manufactured Housing Association for Regulatory Reform, but the suggestion is out there, to improve our industry’s image with a comprehensive Manufactured Housing And Resident Relations (a.k.a. customer service) program! Plus, how many renderings of the letters, among state MHAssociations, are there for IMHA?

IV.

Denigrate. Know the definition of the word? Goes like this: “blacken in reputation; defame” (from New American Webster Handy College Dictionary, p.187).
On – site LLCommunity managers and fee property management firms were, in my opinion, denigrated in a column this month, published in a trade publication that’ll remain unnamed here. I decline to direct any fresh traffic their way. If you read this tripe, and disagreed with the writer – but haven’t contacted the editor/publisher to express your views, inaction only serves to encourage future defaming of property managers and firms. I’ve written, as have LLCommunity owners from California to (I’m told) Florida…

V.

Well, that does it for this week. Kids are back in school; the selling season begins for homes in Sunbelt regions; and, we have a very heavy business meeting schedule ahead of us. International Networking Roundtable (‘INR’) in Phoenix, AZ. @ 15 – 17 September; Manufactured Housing Institute’s (‘MHI’) annual meeting is in Denver, CO. @ 26 – 28 September – with National Communities Council (‘NCC’) division convening 27 September; Urban Land Institute (‘ULI’) members travel to Washington, DC. @ 12 – 15 October – with Manufactured Housing Communities Council (‘MHCC’) convening 13 October; and the Manufactured Housing Mid – Atlantic (5) States Convention takes place this year, in Albany, NY @ 26 & 27 October. Be sure also, to mark your calendar to attend the Louisville Manufactured Housing Show (formerly the Midwest manufactured Housing Show), in Louisville, KY. @ 13 – 15 January 2011. For more information on this latter venue, contact Dennis Hill via (770) 587-3350.

*****
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

UNBRIDLED OPTIMISM & BOLD INITIATIVES

from Chicago to Phoenix, & Austin to Louisville (‘Lou-avul’), & beyond…

Is it just me, or do you too feel ‘a – shakin & a – stretchin’ occurring among survivors of the grim, decade – old, Manufactured Housing Reality Show? Must be careful here, not to overplay what I’ve been sensing of late; however, with each passing day, it’s become increasingly obvious: Some things downright Positive, and Some things out – and – out Bold, are a – happening!

I.

Let’s begin with the small cum large, non – host, no – agenda, networking dinner party for Chicago’s landlease (nee manufactured home) community owners, Monday evening, August 23rd. When first phone calls were made a week earlier, the optimistic goal was to see a dozen of the 25 known Chicagoland portfolio ‘players’ gather at the popular Rosewood Restaurant in Rosemont, IL. Well, as this blog is posted Sunday afternoon, August 22nd, 24 name tags and a private dining room at the Rosewood await the largest social gathering of LLCommunity owners/operators in the city’s history! Why the Unbridled Optimism? Revisit this website and blog next week to learn the answer…

II.

Then there’re the Unbridled Optimistic commentaries that roll in each week, following this blog’s posting. Here’re just two recent penned communiqués:

“I still believe manufactured housing is the best, and maybe the only hope, for safe affordable housing for a large portion of U.S. citizens!” JA

“We are on the edge of the greatest boom the manufactured housing world has ever seen. And this isn’t hype. It’s the logical reality of why the Buffett folk keep buying up manufactured housing producers and suppliers! They are doing the same tea leaf reading as any sage of the biz can come to.” TK

Know what? There’s a lot more going on ‘optimistically’ than most folk realize. That’s why YOU need to be reading the Allen Letter professional journal every month! Phone (317) 346-7156 to subscribe @ $134.95/year (12 issues) – and get to know columnist M.H. Ronin; that’s code for Manufactured Housing’s ‘covert operations (editorial) specialist with no governmental ties’! Seriously. And guess who he/she is?

III.

Excuse me here, if I have difficulty restraining genuine excitement for the landlease community asset class (a.k.a. In some circles, the ‘post production segment of manufactured housing’, nee the ‘aftermarket’), and what happens 15 – 17 September, at the 19th annual International Networking Roundtable in Phoenix, AZ.

Just corresponded with Randy Rowe, upon his return from Australia. He’s ‘primed to share’, with 200+/- LLCommunity owners/operators expected to attend and hear: ‘What we must collectively do, to regain our legitimate share of the U.S. housing market!’ How can YOU not be present to hear that timely, bellwether address?!

And then there’s how Murphy’s Law (i.e. ‘Whatever can go wrong, will go wrong!’) has been turned on its head at this event. We planned to feature the first public pairing of MHI & MHARR execs ‘telling their respective advocacy stories’. Well that’s not gonna happen. Why? Ask me privately. BUT, in its’ place? Something bigger and much better! But you have to be present to ‘experience’ it. Frankly; I can hardly wait!

And ‘how ‘bout this?’ Did you know there’s already a ‘plan & practice’ in place, to restore third party chattel financing to manufactured housing in general, and LLCommunities in particular? No? Well, that’s getting its’ first public airing as well!

PLUS, all the other nifty topics, best presenters, superb networking, and important deal – making characteristic of this venue! Mention this blog posting when you register (if you haven’t already), and we’ll honor the ‘before 8/15’ registration fee of $395.00, saving you $55.00 off the present $450.00 registration fee. Register via this website or phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 today!

By the way, the third meeting of the MHTrade Press CONSORTIUM will occur at this year’s Roundtable in Phoenix. Anyone who’s anyone in the print and online press will be present!

IV.

TA – TA! Remember the ‘teaser’ of a week or two ago in this blog, about Good News and how ‘The South might rise again’? Well, here’s Good News about one Bold Initiative: the Louisville Manufactured Housing Show (formerly, Midwest Manufactured Housing Show), following a year’s (2010) hiatus, returns to the Kentucky State Fair Grounds @ 13 – 15 January 2011. Yep; got that, as they say, straight from the horse’s (i.e. Dennis’) mouth. Are you excited to hear that Good News? You should be! As a colleague said yesterday, “Geesh, I didn’t realize how much I was going to miss the mid – January trip to Louisville until the show got canceled!” A dozen (+) manufacturers have committed to participate and nearly half the supplier booths are reserved. For more information, and or to reserve ‘your supplier booth’, contact Dennis Hill via (770) 587-3350. Tell him ‘George sent me!’

V.

Hey; also remember this blog telling you (a little) about the ‘Arkansas initiative’, to (in my words) pressure our national MHAdvocacy bodies to effect more and better results for the MHIndustry, inside the Washington beltway? Well, have been watching this matter unfold from a distance, and recently learned it’s morphed into the ‘Texas initiative’. Following a recent circulation of ‘requests for proposals’ and conference call; two consultancy proposals have been received, and will be decided upon. Appears the Texas Manufactured Housing Association will be funding this Bold Initiative, in part; and, providing leadership for same, via its’ board of directors and executive director. To become involved in this effort, or simply to learn more, phone (512) 459-1221 # 940.

VI.

OK, continuing this week’s blog theme describing Unbridled Optimism popping up all around the U.S., here’s a novel if not somewhat shocking thought. The rock band, The Grateful Dead, just might have the answer(s) to MHIndustry’s decade long malaise! How so? Go to your local Borders or Barnes & Noble bookstore and take a gander at David Meerman Scott’s Marketing Lessons from the Grateful Dead. ‘What Every Business Can Learn from the Most Iconic Band in History.’ I’m serious! A few of the chapter titles should titillate your curiosity:

Create a Unique Business Model
Choose a Memorable Brand Name(s)
Build a Diverse Team
Be Yourself
Cut Out the Middleman
Free Your Content
Partner with Entrepreneurs
Give Back
Do What You Love (to do)

Who’d a thunk? There’re some pithy ideas contained therein. Just don’t lose sight or hold of business common sense, tempered by your abilities and skills, personal and corporate experience; and most important of all, your level and focus of attitude and motivation!

VII.

In case you haven’t noticed – and why should you? This is the 100th blog for me; originally posted at Manufactured Housing Merchandiser’s website, now a fixture at community-investor.com

When planning this landmark 100th blog, I considered reaching back and sharing our some MHIndustry & LLCommunity timeline and media history. But as interesting as it might have been for some, it’d likely be boring and uninteresting for the majority. So…

Suffice it to say, when I started penning this blog two years ago, the last thing I needed was another recurring (weekly) writing assignment. But know what? It’s become a pleasure ‘staying alert’ to newsy notes, then articulating (hopefully) informed opinions, to share with friends and colleagues. The most gratifying part of the blogging experience has been the regular, and generally very positive feedback, from readers. For that matter, including material contained herein, much about which I write comes directly from you who do phone, email, and otherwise communicate musings ideas, and opinions to me. So, please don’t stop. And here’s why…

‘In real time, our MHIndustry & LLCommunity asset class, for the first time in its’ collective 60 year history, has ongoing, very public, honest – to – goodness, give – and – take, interpersonal and corporate intercommunication!’ We must preserve and protect this means that brings us together, by participating in and supporting the opportunity.

If you haven’t already seen, or have, a copy of the ‘Official Manufactured Housing Resource for Print & On – line Media, plus Social Networking Sites’ (One of 12 Signature Documents), request a ‘free’ copy when you register for the above – referenced Networking Roundtable, or subscribe to the Allen Letter professional journal.

VIII.

Finally, a word about the future. Not making a grandiose announcement here, just encouraging you to ‘stay tuned’ in the near and intermediate future. Carolyn and I’ve built a significant manufactured housing and landlease community business consulting, publishing, and training platform during the past 30 years. We’ve begun making preliminary plans to, hopefully, ensure its’ continuation beyond our tenure. All I’ll say at this point, is my (our) desire, mission, goal – for the two dozen work products (e.g. profit centers, like the ALLEN REPORT, Networking Roundtable, two newsletters, book publishing, MHM classes, and this blog, to name a few) comprising GFA Management, Inc., dba PMN Publishing, is to see the entity continue in toto, if possible. Maybe as a for – profit business enterprise like it is today; or, perhaps institutionalized (e.g. as part of a not for profit trade or advocacy group), given the right and timely venue, and favorable circumstances. As usual, your thoughts on this subject are welcome….

*****

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

Fight, Flight or Freeze?

+ more on, ‘better to lease than be S.A.F.E.d’; MHImage & YOU; Tony’s Musings; CHURN; &, ‘Four 7 Year Cycles for Your Landlease Community!

I.

My late foundryman Dad was wont to say, “Learn something new every day!” Well, today is one of those days. Heretofore, when teaching Manufactured Housing Manager (‘MHM’) certification candidates the finer points of Developing Good Resident Relations, in general; and, ‘conflict resolution’ in particular, I’d advise: “When having to be involved, get feuding parties seated, eliminating the fight and flight alternatives.” Well, recently read where those two ‘Fs’ are parts of a triad known as the ‘fight-flight-freeze response’ to perceived threats. I guess knowing two out of three wasn’t all that bad. Anyway, our personal – and perhaps by extension, the manufactured housing industry’s response, during the past decade, to its’ perceived threat of annihilation, has been what? Fight it off, run from it, or freeze until deciding the nature of the threat?

Perhaps all three! How so? At the turn of the century, MHIndustry’s perceived threat had to do with loss of national housing market share to the site – built housing folk. At which time, one can make a pretty good case that HUD Code housing manufacturers, for awhile, successfully ‘fought the competition’ by aggressively entering the land/home (package) market, via local housing market MHRetailers, selling and siting our unique, affordable, very homelike housing product. Remember the huge multisection homes (We called them ‘doublewides’ in the 1970s & 80s.) and 80’ long singlesection homes of the time?

But then, self – interest in keeping manufactured housing’s ‘372,843 unit shipments per year’ production lines humming, motivated collaboration with third party sources of chattel (personal property) lending, and owners/operators of newly developed/expanded landlease (nee manufactured home) communities, to offer ‘no money down’ deals, adjustable rate and ‘teaser rate’ mortgages, as well as reduced or ‘free site rent’, soon turning our customers upside down financially. At that point the ‘fight’ went out of our game, and the housing finance segment of our industry took ‘flight’ – yet to return, ten years later! WE became the perceived threat (i.e. Our own worst enemy!); soon prompting the tongue in cheek motto, ‘Be a stud! Sell a HUD!’

By the time year 2008 rolled around, another housing bubble (site – built) burst. And since third party chattel finance hadn’t returned to the HUD Code housing industry, the manufacturing segment ‘froze in place’, due to lack of these options (i.e. Few land/home opportunities & minimal chattel loans for homes in LLCommunities), forced to await eventual amelioration of these perceived ‘lack of financing’ threats. And frankly, that’s where we continue to be today, ‘frozen in place’; but with one notable exception: (property) owner financing of new and resale homes on – site in landlease communities (‘LLCommunities’). This contemporary reality has been the subject of several recent blog postings at this website; so, if you want to learn more, scroll back through the archived blogs to detail the word picture just painted. You’ll learn enough to fill several days with fresh knowledge….

II.

Last week’s blog posting, also Part II, introduced the MHIndustry and LLCommunity’s new bromide: “Better to lease than be S.A.F.E.d!” This new truism was reinforced in Ken Rishel’s latest Chattel Finance Newsletter, when he answered a query about implementing ‘rent to buy’ and ‘lease to own’ programs, to avoid regulatory issues of the S.A.F.E. Act. Ken writes: “…these are still credit transactions and…subject to the S.A.F.E. Act.” (+) “There could even be criminal charges brought under the RICO statutes, given the theory (a business enterprise) is engaging in an ongoing conspiracy to evade the law.” P.2. (lightly edited. GFA) Reach Rishel via (217) 971-3968.

For some, looks like now might be time to, pull out those dusty old rental homesite leases of the late 1970s and early 80s, update them, and use to fill vacant LLCommunity sites with leased homes!

III.

I call this, ‘a LLCommunity owner’s lament’. It was sent to this blogger in response to an earlier posting at this website, regarding ‘everyone’s role’ in working to improve the pubic image of our affordable housing product and community lifestyle.

“I’ve spent lots of money over the years upgrading my properties, only to wind up selling them to buyers who let them quickly fall into disrepair. I worked diligently to improve the image of these properties in their local housing markets. Appears the majority of my efforts and investment have been for nothing! When others (i.e. new LLCommunity owners/operators) don’t follow the good precedent set for them, it’s not only discouraging, but soon contributes to our ongoing public image challenge. Just needed to vent!”

How many others feel the same way? Maybe too many times we boast about ‘taking over troubled properties’, turning them around, effecting improved curb appeal and enhanced profitability, without realizing there’s a too frequent down side to some realty transactions. What to do? It’s pretty obvious. Whether a present day owner/operator, or a new, would – be investor in the asset class, each of us has a day – by – day responsibility to ‘do our part’ to enhance the public image of HUD Code manufactured housing and LLCommunities! Are you doing your important part?

IV.

Call this retro (i.e. back; backward; behind) manufactured housing! It’s not going to recur, but interesting nonetheless, for a blog responder to recall, in “…1970, my first full year in this business, there were no national floor plan lenders, and personal (chattel) financing was at high rates, for a seven year term. Home manufacturers collected a 10% down payment when home was ordered, then freight charges and a trust agreement given to the ‘toter’ (a.k.a. transporter) upon delivery of the new home, to be taken to the bank to collect a check. Back then, the only place to put ‘dem mobile homes’ was in ‘dem parks’, of course. And by 1972 we were shipping 500,000 homes. No HUD, some state regs, and MHMI tags. Even then, those (dealers) committed to serving the customer with a quality product and great service, won big time. What are we missing? There’s no single reason for us to fail, except us. Hmm.” N

V.

Even Tony Kovach, publisher of ezine Manufactured Home Marketing Sales Management got into the act this past week, with some pretty salient observations as to what’s ‘going on’ and ‘not going on’, relative to manufactured housing, on the national scene. Here’re his four points: 1) Obama staff points out past administration favored home ownership, this one promotes rental housing; 2) FHFA/GSE’s have been, and continue to work mightily, Not to Lend to effect housing purchases; 3) FHA Title I’s new stringent financial guarantee guidelines, for lenders, keeps many lenders away; and, 4) now appears to be ‘safer & easier’ to lease homes in LLCommunities than having to comply with the sifting sands of the S.A.F.E. Act, when selling and financing. Appears our federal government has switched 180 degrees away from home ownership, to strong emphasis on leasehold interests. (847) 730-3692

VI.

Last week’s blog hinted this week, I’d explore the sensitive subject: ‘To Churn or to Nurture’? Specifically; when owning/operating a LLCommunity, and or selling new and resale homes on – site, deciding whether to ‘make easy money’ or ‘build lasting value’. Well guess what? Didn’t get far into that heady dual topic before realizing how many toes I’d likely be walking on, when citing even a few examples of churn. Still want to explore the subject, just need more time to research, marshal my experiences, and consider my thoughts on the subject. For now, suffice it to know, ‘churning & nurturing’ have been around as long as there’ve been rental properties. The matter received quasi official MHIndustry attention at the first National State of the Asset Class (‘NSAC’) caucus in Tampa, FL., on 27 February 2008, when identified as one of Five Action Areas (Still in play!), by 100+/- LLCommunity folk gathered from throughout the U.S., to wit:

“Value proposition. Ensure a fair interplay of housing product pricing, financing, and value, with site rentals and more….”

Churn? I’ll leave you with a defining thought or two about the word and concept. Even a classic Webster’s dictionary’s ‘take’ on the word provides a viable starting point: “To engage in excessive trading (of stocks, etc.) to increase commissions”. Hmm. How’s that translate to the field of realty in general, home sales in particular? “To facilitate excessive turnover of contract sale homes, to increase (number of) down payments, commissions, and other fees.” Churn was relatively common practice in the late 1970s, as owners/operators segued from ‘rental units’ to ‘contract sale’ transactions, often when readying their property(ies) for sale (marketing). Hopefully this is far less a reality today, as enlightened owners/operators realize ‘building value’ (i.e. stable, rent – paying clientele, a.k.a. residents) is easier, more cost effective, and more worthwhile in the long run, than churning ‘easy money’ in the short term. But that’s as far as I’m comfortable taking that subject this week.

VII.

Many readers of this weekly blog posting are also paid subscribers to the Allen Letter professional journal. Know the September 2010 issue features an expanded work originally penned by Richard ‘Dick’ Bessire of California – domiciled, Bessire & Casenhiser (One of this nation’s, and our industry’s largest, oldest, and most respected fee property management firms!). The piece features four Seven Year Cycles, apropos to professional property (i.e. realty) management, but applied specifically to the landlease community real estate asset class! My guess is, many owners/operators will clip, mount and retain this ’28 year cyclic business (operations) plan’ for reference, time and again, during the years ahead. Don’t miss this unique learning experience opportunity! To subscribe, phone the MHIndustry HOTLINE cited at the end of the following paragraph.

VIII.

End Note. To those blog readers accessing this week’s posting via a blast email message, know there’s a 19th International Networking Roundtable brochure attached to the conveying email message. If you haven’t registered to attend yet, don’t delay. We’re already more than halfway to our max number of attendees. Remember; this is the sole national 2 ½ day gathering designed specifically for the advanced educational, interpersonal networking, and realty deal – making needs of all LLCommunity owners/operators in North America! Questions? Call the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

******

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
(317) 346-7156

A Salmagundi of MHIndustry News & Views….*1

I.

Just learned Automated Builder magazine, after switching from print to online format (i.e. ezine) recently, now “will take a furlough”, replaced by a monthly online AB newsletter, at an annual subscription rate of $50.00. Phone (805) 642-9735. Many of us ‘in the MHBusiness’, cut our industry baby teeth reading AB publisher Don Carlson’s informative and often comment – provoking editorials. Tragically, this is the second online ezine to cease publication (Think The Grissim Report) since the June debut of factory – built housing’s Official Resource for Print & On – line Media directory. As related side; what’s John Grissim up to these days? Read the September issue of the Allen Letter professional journal to find out. Hint: ‘It’s a mystery!’

Know what this means? Here’s what remains of manufactured housing media: ONE advertiser – supported print magazine, the Journal; TWO subscriber – supported print newsletters: the Allen Letter professional journal & the Allen CONFIDENTIAL! (Phone 317/346-7156); and, TWO online monthly ezines, Chattel Finance Newsletter (free) via captivefinance.net & Manufactured Home Marketing Sales Management (free) via MHMSM.com. Then there’re Manufactured Housing Institute’s (‘MHI’) Community Connections online newsletter, published quarterly for National Communities Council (‘NCC’) members (Phone 703/558-0678); and, Dick Moore’s (Think MHRetailer par excellence) INDUSTRY PERSPECTIVES (free) online newsletter, which appears when he gets the itch to share his extensive knowledge, and express strong opinions, on various manufactured housing issues. And that folks, is all that remains!

II.

“Better to lease than to be S.A.F.E.d!” is a new landlease community bromide making the rounds these days.*2 The point seems to be, there’re less regulatory hurdles to clear ‘leasing a manufactured home on – site in a LLCommunity’, than when engaging in property owner financing of new and resale homes, via either ‘captive finance’ or ‘buy here – pay here’ chattel loan underwriting and servicing procedures. What do you think? For more information on this timely and critical topic, read Manufactured Housing $$$ Primer, available for $29.95 postpaid, by via the MHIndustry HOTLINE: (877) MFD-HSNG or 633.4764. Also FYI! A Captive Finance Workshop is scheduled for 24 & 25 August in Chicago, IL. Phone (217) 971-3968.

III.

At the annual Hall of Fame Induction Banquet, hosted by the RV/MH Heritage Foundation, at its’ marvelous museum and library facility, in Elkhart, IN., on 2 August, we learned of the passing of Professor Carl Edwards, one of our industry’s few remaining genuine pioneers. Carl was a good friend to many, and has long been regarded and respected as manufactured housing’s de facto historian! His last book, Homes for Travel and Living was published in 1977, and a copy sits on a shelf in my office library. What I remember most about Carl, however, is a series of his reprints, dating back to 1970 – 74, titled: ‘Different Dwelling Costs – Mobile Homes as Housing’s Best Buy’. These served as the basis for some of my earliest trade magazine writing in the mid 1980s.

Speaking of the RV/MH Heritage Foundation’s Museum and Library facility, I encourage you to financially support this guardian of our collective RV/MH business legacy; better yet, visit the large the new facility, located right along the I-80/90 Toll Road on the East side of Elkhart, IN. Phone (574) 293-2344 for more information. Carolyn and I’ve donated annually, for more than a decade; won’t you join us? And consider hosting your firm’s next industry – related training or social event in one of the facility’s large, attractive display halls or meeting rooms! You’ll be glad you did!

IV.

Let’s revisit the final two paragraphs of last week’s blog posting. Why? Both generated thoughtful remarks you need to read! Remember, these provocative paragraphs were penned by one of the few true, decades – seasoned sages remaining active in the MHIndustry:

• “Relative to the long – awaited Title I program. As you probably know, the final regs are out; and, while GNMA has lifted its’ moratorium, it’s also established (stringent financial guarantee) guidelines that effectively eliminate all but two (Really one, when you consider who owns the two firms) chattel lenders from participating in the program, virtually ending competition among said lenders!” Hmm. First we lost many lenders; then most MHRetailers; next our housing manufacturers; and now, possibly 50 percent of the remaining lenders?

One of several responses. “I share the same concerns, from the portion of the blog that relates to Title I and GNMA requirements. Between these requirements, FINREG and the S.A.F.E. Act, the only people who’ll be left, are the exact ones the government is afraid of, the TBTF (‘Too Big to Fail!) folk. They’ll be the only ones able to absorb the costs that continue to appear, as we try to conduct compliant chattel loan programs. For example, see Friday announcements of bank closings. Never is a TBTF bank listed, just your small community banks caught up in all the new regulation requirements forced upon them. So, if the TBTF folk are not loaning money, and the small community banks don’t, who are we left with?” PB (lightly edited)

• “And George, except for selling to Seniors, home financing is the key to success in our industry! As long as we market home products and LLCommunities to low and moderate income buyers, who’re mostly credit – challenged, we’re going to have difficulty obtaining viable home financing programs anywhere. Answer? While there’s no simple solution, greatly and widely ‘improving our image’ with the general public, will help to move us up the credit score chain to more credit worthy buyers, and access new financing options for home sales.” Hmm. This gets kinda personal. So, what will YOU do, even ME, to address this image issue?

Here’s how some of you replied to the second paragraph. Again, comments lightly edited.

“I agree we need image enhancement. We hear about different efforts being started, but then seems to dissipate, and we never get the REAL reason for its’ demise. Do you know, or can you get to the bottom of ‘why’ these plans never come to fruition? Strictly money? Who’s going to pay? Who is in control? At the (17th) Networking Roundtable in Mystic, CT., the (home) purchasers agreed to add a lot of money to each house (sold) to fund a program. (One manufacturer) seemed to be enthusiastically in favor of it. Does (another manufacturer) not see this as favorable to them, or do they want to do it on their own, for their own brand only?” JD

“Your (sage’s) last paragraph poignantly hammers the smart MH guys and gals. We are not promoting ourselves! While we spend hundreds of thousands of dollars playing chess (lobbying) with the bureaucrats in state houses and DC, we ignore our customers. Even if we had chattel (finance matters) handled, would customers be visiting our sales centers/dealerships? We must require our (trade) associations to get busy promoting, advertising, and showing our (housing) products to the masses! Who needs financing when we have no customers of substance? The author of that paragraph needs a hug ‘attaboy’ – or ‘girl’, for seeing ‘where some of our cheese is hiding’ – right behind our own lack of promotion!” NP

Point? These and additional, similar responses, arrive from the grassroots of this industry, throughout the U.S. There’re messages here to be heeded. Who’s listening?

V.

Next week will mark the posting of my 100th blog, if I’ve got the count right; might be #99. Anyway, as some of you know, this blog series’ began on Manufactured Home Merchandiser’s website more than a year ago, before the print trade magazine ceased publication; then it segued to the community-investor.com website. I want this to be a special posting, and have already started working on it. A possible title and topic might be: To Churn or To Nurture? Deciding to ‘make easy money’ or ‘build lasting value’, when owning/operating one or more landlease communities! What do you think? A much needed discussion? Or; too heady, controversial, and simply a ‘none of your darn business’ topic? But hey; if you’ve got a better topic idea, let me know ASAP via this website, email: gfa7156@aol.com, or either of the aforementioned telephone numbers.

VI.

In little more than a month, 200+/- of the most active LLCommunity owners/operators in North America will gather, from 15 – 17 September 2010, at the beautiful Pointe Hilton Tapatio Cliffs Resort Hotel in Phoenix, AZ., for 2 ½ days of the Best Education (nearly two dozen or so seminar & panel offerings), Interpersonal Networking (at nearly a dozen social events and meals), and superb Deal – making venue (Beginning with Marcus & Millichap’s State of the Asset Class presentation of dozens of LLCommunities ‘for sale’ – and much more) available anytime, anywhere in the MHIndustry and LLCommunity asset class! CAVCO and Champion Homes plan to have Community Series Homes (‘CSH’) on display, adjacent to the International Networking Roundtable’s meeting rooms. Come and meet HUD Code home manufacturers’ Business Development Managers (‘BDM’) who know how to ‘talk LLCommunity’, when it comes to new home sales! Keynote presenter this year? Randy Rowe, of Green Courte Partners & American Land Lease renown returns! Don’t miss ‘his take’ on ‘what’s going on’ throughout the MHIndustry and LLCommunity asset class these days! (317) 346-7156.

One hiccup to this year’s INR schedule. Had hoped to provide a side – by – side opportunity for our two national advocacy bodies to tell their respective stories during a panel session. This isn’t going to happen. BUT, have already arranged for an equally informative and equally stimulating panel session relative to….

VII.

By now, ‘you know me’; more accurately, ‘my writing style’, from previous blog postings. I oft leave the best news till last, at the very end of the weekly blog. While not quite true this time around, I do indeed leave a titillating teaser tidbit with you! In either the August 22nd or 29th blog posting, at this website, Watch for a very Special & Timely Announcement, of a Most POSITIVE Nature! Hint. ‘The South may indeed rise again!’

In the meantime; will I see you in Chicago on the 23rd, 24th & 25th of August? How ‘bout in Phoenix, AZ on the 15th, 16th & 17th of September? Sure hope so! Those two venues are followed by MHI’s annual meeting in Denver, CO., on the 27th & 28th of September; and , the Urban Land Institute’s (‘ULI’) Manufactured Housing Communities Council (‘MHCC’) – not HUD’s MHCC (Manufactured Housing Consensus Committee), on the 12th thru 15th of October in Washington, DC. Whew! How does one keep abreast of these workshops, roundtables, annual meetings, and council (a.k.a. ‘Think Tank’) gatherings? When YOU can’t attend, know the event descriptions and proceedings are almost always reported in the pages of the Allen Letter professional journal! One more reason many of your peers, if not yet you, subscribe! (317) 346-7156.

End Notes:
1. Salmagundi. A hash or stew; any mixture.
2. Safe And Fair Enforcement of Mortgage Licensing Act

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

LLComunities (nee MHCommunities) cum Lendlease Communities! Huh?

I.

Translation please! First the long version. Back in the 1950s they were ‘trailer camps; morphed to ‘mobile home parks’ in the 1970s; then, with publication of two J. Wiley & Sons development and investment ‘how to’ textbooks, and emergence of several real estate investment trusts (‘REIT’s) during the 1990s, enjoyed a decade long panache as ‘manufactured home communities’ (‘MHCommunities’). However, given manufactured housing’s ‘chattel finance bubble busting’, at the turn of the Millennium, along with the surprising realization six different types of housing are now routinely sited in this unique income – producing property class, ‘landlease communities’ (‘LLCommunities’) became, and continues to be, the moniker of choice among most investors, lenders, journalists, and trade advocacy bodies. There’s also widespread recognition, that since year 2000, the on – site marketing, sale and property owner – financing of new and resale homes has become commonplace, suggesting a future terminology refinement might be in the works, i.e. maybe ‘lendlease communities’, whereby property owners routinely ‘lend’ homebuyers capital with which to acquire new and resale homes on – site, then ‘lease’ them the homesite on which their new or resale home is installed. The short definition? ‘LLCommunities’, formerly ‘MHCommunities’, will likely continue to be known as ‘LLCommunities’, but with a chattel finance nuance.

Last week’s blog posting, presaging the previous paragraph, was titled ‘Ongoing Transition from TPL (third party lenders) to Owner Financing’. As its’ author/blogger, the heavier – than – usual reader response was not only welcome, but contained a healthy mix of Good News & Bad News. First the really good (confirming) stuff:

II.

“Top notch post! This is certainly one of the most remarkable blogs I’ve seen….” CM

“Great article again George. Thanx.” NB

“George, I greatly enjoy your blog, especially the one on Owner Financing. (Starting in) 2007, I advertised a few seller – finance MHs in my park. 30 deals later, I can say it is great! I have had one ‘walk away’ repo. I structure the deals so they make sense for the buyer, thereby solidifying my park occupancy. I believe my (LLCommunity) would be in a serious state of decline had I failed to act when I did.” SS

“There is no doubt, much more to the story than you’re telling, and I’m glad you don’t mention names. Just better that way. You continue fighting, on our behalf, and I want you to know (there’s) at least one park owner in ________ who appreciates all you’re doing to keep us from doing down the tubes.” DR

“Good that the LLCommunities have it (presumably, ‘chattel finance matters’) in hand. It is a huge challenge, that can only build. I see the quagmire, George.” NC (Go ahead, look it up. Quagmire well posits our capital sourcing challenges and regulatory climate ahead.)

“Just got thru reading your blog on TPLs to Property Owner Financing. Thank You. There is really nothing I can add to this that you’re not aware of already, but I’ll vent if nothing else…” DB

III.

Now for the ‘me bad’ stuff. I was roundly and rightly criticized for an error I let slip into my description of MHI’s summer meeting, off – agenda financing session, during mid – July in Washington, DC. I’ve since corrected the error: said meeting was requested by FHA not FHFA. Plus, my computer omitted half the opening paragraph of what was originally posted; that’s now been restored.

Having now perused informal, unofficial notes penned by uninvited MHI dues – paying members present at said meeting, I believe I was right in my earlier observation that, even to date, there’ve been no written proceedings describing what was shared by and among (What at one point was described as…) ‘the survivors are in the room’. Like my peers, I applaud FHA for being engaged on our (finance) issues; and even understand why some ‘insiders’ loathe sharing information and control with peers, during what could be nigh end days for our industry. And for that very reason, this work session should have been announced and open to any MHI direct dues – paying member who might have contributed knowledge and ideas, on one hand; or been in a position to share information, even rally industry wide support, on the other.

IV.

So, where do we go from here? For starters, you’re already doing as I’ve requested time and again; you’re communicating reactions, thoughts, ideas, and frustrations relative to HUD Code manufactured housing and the landlease community real estate asset class. Don’t stop! Respond via this website or the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. That’s how I obtained all the commentary written into this blog posting!

V.

Next. If you own/operate one or more LLCommunities in North America, plan to join your peers at the 19th annual International Networking Roundtable, 15 – 17 September 2010, in Phoenix, AZ. If you haven’t already received material on this generally ‘by invitation only’ event, let me know (317) 346-7156, and I’ll mail or email it to you! Registrations are now arriving daily, and our maximum participation will be 200. Product and service vendors with a history selling to LLCommunities are also welcome to attend. Same procedure.

Furthermore; did you read Dick Moore’s INDUSTRY PERSPECTIVE # 73 online MHIndustry newsletter distributed Friday, 30 July? If not, phone ((901) 872-4446 to request a copy. This is one MHRetailer who ‘tells it like it is!’

Finally; received the following lightly – edited paragraphs from one of the few true, decades – seasoned sages in the MHIndustry:

• “Relative to the long – awaited Title I program. As you probably know, the final regs are out; and, while GNMA has lifted its’ moratorium, it’s also established (stringent financial guarantee) guidelines that effectively eliminate all but two (Really one, when you consider who owns the two firms) chattel lenders from participating in the program, virtually ending competition among said lenders!” So, does this mean Title I is, again, ‘dead in the water’ for now, where MHIndustry chattel lending is concerned? Chattel finance – challenged businessmen and women want to know….

• “And George, except for selling to Seniors, home financing is the key to success in our industry! As long as we market home products and LLCommunities to low and moderate income buyers, who’re mostly credit – challenged, we’re going to have difficulty obtaining viable home financing programs anywhere. Answer? While there’s no simple solution, greatly and widely ‘improving our image’ with the general public, will help to move us up the credit score chain to more credit worthy buyers, and access new financing options for home sales.”

What say you? Are these sage’s remarks ‘right on’ or do you feel they ‘miss the mark’? If I get enough and soon response, either or both topics might be worthy fodder for next week’s blog posting. Will be listening for you on the MHIndustry HOTLINE!

*****

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

Ongoing Transition from TPL to Property Owner Financing….

I.

Turns out, all the while we were talking of a maybe Grand Conspiracy to kill the MHIndustry, and weathering our own Near Perfect Storm, new HUD Code home shipments slipped to a 60 year nadir; another, albeit undercurrent, was also present and building in volume and momentum….

Some call it a temporary cum permanent supplanting of ‘third party lending’ (‘TPL’) chattel (personal property) lending on new and resale HUD code homes, by the now widespread practice of property owner financing (a.k.a. ‘self – finance’, via either the ‘captive finance’ or ‘buy here – pay here’ method), throughout the 50,000 property landlease (nee manufactured home) community real estate asset class.*1 Huh?

Yes, you read that right; and for that matter, have been reading and hearing about this gradual change in primary chattel lending situs for months now, though it’s been evolving for a decade – this time around. However, during the past 60 days, subsurface frustration, on the part of some TPLs, regarding capital sourcing, lack of secondary markets, new financial regulations, and other aspects of chattel lending, including aforesaid property owner financing, has bubbled to the surface in industry conversations. To better understand what’s happening, here’s one industry observer’s view of the chattel finance timeline:

First official, public recognition of the phenomenon, where property owner financing of new and resale home transactions on – site in landlease communities (‘LLCommunities’) was replacing TPLs, as primary chattel lending sources, occurred at the National State of the Asset Class (‘NSAC’) caucus, in Tampa, FL. on 27 February 2008. One of Five Action Areas identified by the 100+/- caucusing LLCommunity owners/operators, states: “Financing and servicing of new and resale home transactions on – site, and financing of LLCommunities. The first half this action item is in place….” Doesn’t get much clearer than that.

A year and a half later, all TPLs were invited to participate on a Chattel Finance Panel at the 18th International Networking Roundtable in Chicago, IL., during September 2009, declined. Only one representative from one TPL attended. A telling gesture.

So, at the Manufactured Housing Institute’s (‘MHI’) Winter meeting in southern California, later that same month, a small group of the asset class’ largest property portfolio owners/operators decided to retain the services of a Washington, DC – based consultancy to attempt to ferret out additional sources of chattel financing for LLCommunity use. This focused effort is ongoing, and may indeed see fruition during the months, if not year, ahead. Details, however, are CONFIDENTIAL, and otherwise unavailable for publication in this blog posting, at this time.

During the timeframe, January through April 2010, it was recognized there’d been no new chattel finance information articulated since MHI’s former staffer Joe Owens’ penned a seminal chapter, on this subject, in Development, Marketing, & Operation of Manufactured Home Communities, co – authored by George Allen, David Alley, & Edward Hicks, published by J. Wiley & Sons in 1994. So, in short order, more than two dozen MHIndustry experts contributed chattel finance – related ‘How To’ material for the compilation and publication of the Manufactured Housing $$$ Primer, distributed at the Manufactured Housing Congress in Las Vegas, NV. Of the few surviving national TPLs (a.k.a. the ‘Big Four + 1’), only two contributed ‘self – descriptions of their chattel finance products’.*2

June 2, 2010, turned out to be a pivotal day in MHIndustry history, where chattel finance in public and government arenas, is concerned. A national Manufactured Housing Finance Roundtable was sponsored and co – hosted by Congressman Joe Donnelly (D-IN) and Federal Housing Commissioner David Stevens. The event occurred in Elkhart, IN, “…attended by 60 business executives, lenders, politicians, and representatives from federal regulatory agencies – but no GSE’s….”*3 Bottom line? As an industry, we learned once and for all, we’re truly ‘on our own from now on’, when it comes to financing most on – site, new and resale home sale transactions requiring chattel loans! Interestingly; whoever set up that meeting ensured every TPL had a seat at the Roundtable’s ‘square table’, while a greater number of major LLCommunity portfolio owners/operators (i.e. property owner ‘lenders’) also present at the event, were left to sit/stand around the perimeter of the meeting room. Another telling gesture…

Then there was MHI’s Summer meeting in Washington, DC, 13 – 15 July 2010.*4. Dues – paying members, aligned with the National Communities Council (‘NCC’) division, but with strong chattel finance bias, felt ‘less than welcome’ at Financial Services Division meetings. And unbeknownst to the majority of paid registrants at the Summer affair, an off – agenda meeting (Thursday) was requested by FHA  representatives desiring a workshop with TPLs. While this is ‘fine and good’ in its’ own right, it’s ironic the segment of the MHIndustry maybe doing the ‘lions share’ of chattel lending these days (i.e. LLCommunities), was generally not invited to said meeting – with the exception of two senior executives from two large property portfolio firms. Results? Hard to tell. While a request has been made for a copy of the ‘proceedings’ from said meeting, nothing has arrived to date. However, other sources will likely share this information before next weekly blog posting. So, as they say, ‘Stay tuned! (to this blog)’ for more information to come….

Well, there you have the 2 ½ year timeline; realizing of course, property owner financing goes all the way back to near year 2000 and before. Frankly, many of us recall a similar spate of property owner financing, occurring during the late 1970s, when we filled thousands of recently – developed but vacant rental homesites, with mostly resale homes sited as rental units and or ‘contract sales’. That time around, we were reeling from the effects of implementation of the new HUD Code, in 1974 – 1976, when new home shipments plunged from a record high of 575,940 new ‘mobile homes’ in 1972, down to 250,000+/- homes shipped per year, for the next two decades plus. This time around? Are memories so short we don’t recall shipping 372,843 new manufactured homes during 1998, by ‘turning our customers upside down’, financially; then by year 2000, experiencing our own ‘housing bubble bust’ eight years ahead of the one presently paralyzing site – built housing?

So, where does all that leave us today? Depends on who you ask. All I can offer is my opinion. But for what it’s worth, and sad to say, TPLs, like the no – show GSEs (referring to aforementioned 2 June 2010 Roundtable in Elkhart, IN.) are going nowhere, Title I ‘PR’ and hype notwithstanding, for the time being. On the other hand, LLCommunity owner – financing, of new and resale HUD Code homes on – site, where the property owner has deep enough pockets, or sufficient local lending contacts, to engage in self – finance, of either the ‘captive finance’ or ‘buy here – pay here’ method, is doing better than OK. But given uncertain implementation of the federal S.A.F.E. Act (‘Safe And Fair Enforcement of Mortgage Licensing Act’), and other related regulatory legislation of late, there’s been a noticeable retreat, by generally smaller LLCommunity owners/operators, and portfolio folk, from the public scene. Makes sense. When you get right down to it, LLCommunity owners/operators are the last private and practical source of truly inexpensive durable housing, flexible affordable lending/borrowing, and professional property management! You’ve gotta ask yourself: ‘Where else can a would be homebuyer go, to purchase a 3BR2B resale home for $20,000.00. – 50,000.00 (depending on what’s available in the local housing market); and, with a modest down payment, plus whatever amount ‘works for them’ to make dual housing and rental homesite payments each month, become a bona fide homeowner?’ Answer? Nowhere else in the non – subsidized rental payment or conventional homebuying world! And in this unique ‘affordable housing environment’ (i.e. manufactured housing in landlease communities), homebuyers, oft with credit scores within the 580 – 620 range, build equity as well! We are indeed a National Treasure well worth preserving!

II.

Hey; more and more ‘blog readers’ are communicating thoughts, opinions, and ideas to me via this website, email (gfa7156@aol.com), phone (317) 346-7156, and c/o Box # 47024, Indianapolis, IN. 46247. Become one of my many valued information resources and contact me with your input today! The more you help me, the better informed we will all be during the weeks and months ahead!

III.

If you own one or more LLCommunities, and read this blog, you should be planning to attend the 19th annual International Networking Roundtable in Phoenix, AZ. @ 15 – 17 September 2010. More than 50 have already registered, and max allowed is 200. So, don’t delay. While there’s a Roundtable brochure on this website you can use, also phone and I’ll send you one. This is the premier annual educational, networking, and deal – making event for all landlease community owners/operators in North America!

IV.

You’ve probably already noticed, I frequently reference news notes, stories, and statistics published in the Allen Letter professional journal @ $134.95/year; and occasionally, the Allen CONFIDENTIAL! (Most of what’s contained in the latter periodical can’t be reprinted here or elsewhere. Subscribe and learn why….) @ $950.00/year. If not already a subscriber, to either or both monthly business newsletters, phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633 –4764 to do so. Also able to subscribe via this website. Join the hundreds who read the AL each month, and the dozens of top corporate executives who read the TAC! ‘first thing each month’!

V.

FLASH! Do you have personal access to the Urban Land Institute’s Urban Land magazine? Well, the July/August 2010 issue, on page # 62, carries this feature: ‘Today’s Manufactured Home Community’. Contains lots of inside information about this unique income – producing property type. Unfortunately, ULI does not sell single copies of their professional publication, but a reprint of this article will appear as a reprint lagniappe in an upcoming issue of the aforementioned Allen Letter professional journal. Just one more reason to subscribe today….

*****
End Notes.

1. For a more complete description of this phenomenal change, read the July 2010 issue of the Allen Letter professional journal, available by phoning (317) 346-7156.

2. Ibid., and GSE: government – sponsored enterprises. Also, to order your copy of the Manufactured Housing $$$ Primer, phone the above number @ end note # 1.

3. For additional information on MHI’s Summer meeting visit our blog archive for week of 18 July 2010.

*****

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