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

Mid – Year ALLEN REPORT Announces New # 1 Owner/operator! *1

ELS, Inc. president, Joe McAdams proclaims: “…we have shifted our business from being a trailer park company to being an RV company – a lifestyle company.”

(Before sharing this interesting story, here’re three IMPORTANT DEVELOPMENTS! Subsequent to last week’s ‘Recent MHCC Meeting’ (& contrasted views of manufactured housing’s national advocacy bodies) blog; a significant triple position paper was aired by MHI; startling revelations made, on the subject, by a recent MH executive; and an intriguing MHIndustry recovery plan suggested by a veteran land developer! These ‘blog responses’ will likely form the substance of next blog posting, so ‘stay tuned’ here! GFA)

Now for this week’s story! For veteran landlease (nee manufactured home) community portfolio owners/operators, and Sam Zell fans alike, the April 2010 issue of WOODALLSCM.com trade newspaper contained an article titled: ‘ELS President Joe McAdams Plans to Ratchet Up the Brand Recognition of the Park – Owning Powerhouse’ (pp. 5 & 21). The front page story is replete with surprises (e.g. Reread subtitle to this blog posting!); rare insight into the firm’s difficulty with their manufactured home communities; a brief description of ELS’ recent foray into renting homes on – site; and, what it’s like to be a public company.

First the switch “…from being a trailer park company to being an RV company…” Parenthetically; one wonders, whether fascination with the word ‘park’, in this context and throughout the cited article, is either a sign of disdain for the asset class, or portends a Luddite – like view of the unique income – producing property type? In any event, here’s what ELS, Inc. president Joe McAdams tells WOODALLSCM.com about the switch:

“In 2003, ELS had 128 manufactured home properties and 14 RV campgrounds and resorts. By the end of last year (2009), ELS had increased its RV resort inventory to (sic) 88 Encore and 80 Thousand Trail properties, with 64,000 sites, while still owning 136 manufactured home communities.”

Well, the 21st annual ALLEN REPORT (January 2010) listed Sam Zell’s ELS, Inc. as the largest landlease community (‘LLCommunity’) portfolio owner/operator in the world, with 309 properties (including RV parks), comprised of 111,000 reported (mixed) rental homesites, located in 27 states and one Canadian province. ‘Doing the math’, the majority of ELS, Inc. present property portfolio, according to McAdams, is now comprised of 168 Encore & Thousand Trail RV resort properties and only 136 LLCommunities, for a grand total of 304 properties. When the RV properties are backed out of this total, the remaining LLCommunity property count drops ELS, Inc., to maybe number four among its’ asset class peers, moving recently rejuvenated American Residential Communities (nee Affordable Residential Communities) or ARC, to being ‘number one in the world’! When the 64,000 RV sites, cited in the previous paragraph, are deducted from the firm’s total of 111,000 sites reported in the 21st annual ALLEN REPORT, the remaining 47,000 sites confirms said drop in placement among peer portfolio owner/operators. And how’s this for a coincidence? ELS, Inc. and ARC have corporate offices in the same building in downtown Chicago, IL.

Then there’s the trouble with ‘manufactured home communities’. “Where ELS had been getting in trouble, is that the average age of people in manufactured home communities is something like 72 years old. They were throwing the keys at us because they get too sick to be in Florida and they have to go back to Elkhart to be with their grandkids because somebody’s got to take care of them.” Those of us ‘in the MHBusiness have heard that story before, but the comment also begs this question: ‘Is that the sole reason homeowners/rental homesite lessees (i.e. residents) are throwing keys at some LLCommunity owners/operators these days? No. For an answer to that question, scroll back through the blog archives at this website to one titled: ‘Numbers, Attitudes, Books & Errors, all ‘UP’ at MHCongress! Then read Part III; specifically, ‘The BIGGEST ERRORS of all….’, for an eye and an earful.

Who’d a thunk; ELS, Inc., ‘renting’ manufactured homes on – site in LLCommunities! “The housing side of our business has really been hurt by the inability of people to finance (manufactured) homes, and the inability of people migrating to our markets to sell their (primary) houses. We have addressed that by renting our inventory. That gives us occupancy and helps the growth on that side.” SO, “We are trying to keep the demographic to that guy that we know will rent and convert to an owner. And we will let him take some of the credit from his rent.” AND “The key to homes is bringing the prices down. They are really nice, but if you get to $50 a square foot, you become a viable opportunity.” Since site rent rate isn’t mentioned, it begs yet another question: ‘Is this firm’s homesite rent rate in sync with other forms of multifamily rental housing (e.g. 2BR2B conventional apartments) in the same local housing market?*2

And finally, “Because this is a public company, it needs steady, predictable revenue. Investors want to know how much dividend they are going to get. We average 2% to 3% dividend each year. But we are showing them sizable growth. Since 2004, this stock has doubled, with all the rest of the market going down. The average yield is 15% to 20% a year. But they want to make sure that it’s steady and predictable. It’s got to be there every year.” And in case you didn’t know it, the Allen Letter professional journal is the sole MHIndustry & LLCommmunity asset class print and online trade publication reporting the stock performance of all manufactured housing – related firms, including REITs, every month of the year! To subscribe, do so via website hosting this blog or see End Note # 1 following. And, for that matter, have YOU bought your copy of Manufactured Housing Finance Primer? It’s only $29.95/copy (postpaid) and contains timely and helpful input from no fewer than 24 manufactured housing and landlease community consultants and specialists. To order, use any contacts listed in end note # 1.

End Notes

1. 21st annual ALLEN REPORT, a.k.a. ‘Who’s Who Among Portfolio Owners/operators of Landlease Communities Throughout North America!’ available for $250.00 from PMN Publishing, at this website, or by phoning the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. ALLEN REPORT is also available for FREE, when subscribing to the Allen Letter professional journal @ $134.95/year (12 monthly issues) by phoning same number or (317) 346-7156.

2. ‘Setting Right Site Rent & Housing Price Points…before buying a LLCommunity, while managing it, & when selling’ is the title of a seminal reprint enclosed with the May issue of the aforementioned Allen Letter professional journal. If you’d like a FREE copy of this helpful, practical, timely document, simply phone the number listed last in End Note # 1.

*****

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

MHCC Meeting Summaries Present Opportunity to Juxtapose MHARR & MHI Views on Critical & Timely MHIndustry Issues!
&
Predict Future of the HUD Code Manufactured Housing Idustry!

If, like me, you were unable to attend the April 2010 meeting of the Manufactured Housing Consensus Committee (‘MHCC’), in Tulsa, OK, know the Manufactured Housing Association for Regulatory Reform (‘MHARR’) & Manufactured Housing Institute (‘MHI’) published summaries of said event. And there the (perverse form of) ‘fun’ begins….

I

MHI’s introductory paragraph describing the MHCC meeting. ‘The MHCC met…to discuss a full agenda of proposed changes to the Manufactured Housing Construction and Safety Standards. Susan Brenton…chaired the meeting. Elizabeth Cocke…served as the Designated Federal Official (‘DFO’). Teresa Payne…was introduced….Nineteen of the 22 voting members, including all but one of the producer members of the committee, were in attendance.’

MHARR’s introduction follows this title: ‘MHCC at brink of destruction as HUD attempts to Render it Irrelevant’. So, ‘The cumulative impact of years of mismanagement of the HUD manufactured housing program, under its prior leadership, was on full display as the MHCC met….Building on a series of actions initiated and advanced by HUD during the past several years, the role, authority, functionality and independence of the MHCC has…been replaced by de facto HUD domination, in procedure and substance.’ (Lightly edited. GFA) How so? Read on….

II

MHI’s commentary regarding MHCC By Laws Changes. ‘Ms. Cocke reported HUD’s changes to the bylaws of the MHCC, based on the advice of the General Services Administration (‘GSA’). Key changes…provide for exclusion of industry trade association representatives to serve on the MHCC, and clarification on HUD’s authority to issue interpretative bulletins and changes to the MHCCs. DFO also announced HUD will be making changes to the MHCC subcommittees and task forces, to ensure balanced representation, and reduce the number of participants, as the current committee structure has become unworkable.’

‘New bylaws give HUD discretion to set the agenda for MHCC meetings, but the Department will certainly consult with the MHCC chair and other committee members. Nothing in the new bylaws prohibits the MHCC from continuing to bring forth recommendations and proposals it feels are important.’ Following two sentences confirm status quo of MHCC statutory role regarding responsibilities, and recommendations.

VERY IMPORTANT NOTE. After reading paragraph number nine (9) following, reread previous two paragraphs (above); then, critically reflect on how such liberty cum subjugation, by federal regulators, now affects – and eventually cripples, the manufactured housing industry as we know it today! GFA

MHARR’s commentary regarding MHCC By Laws Changes consists of nine paragraphs addressing specific aspects of HUD’s forced changes to the bylaws. Following material necessarily abbreviated, but important and timely to read nonetheless! Again, pay close attention to content of paragraph number nine (9).

1. Severe restrictions on the role and authority of the MHCC. ‘HUD, through an Interpretive Rule issued by former program management, without opportunity for public comment, has stripped MHCC of much of its’ statutory role and authority, by placing off – limits, from MHCC review and comment, a myriad of Agency interpretations and decisions affecting the standards and their enforcement that directly impact the industry and consumers.’ And there’s more following….

2. Exclusion and censorship of collective industry representatives.’ With no collective industry voting representative on the MHCC, industry organization personnel (i.e. MHI & MHARR executives) were barred from posing questions or raising points during Committee debate, by a ruling of the…DFO at the meeting. This censorship allows HUD to place its’ views and opinions before the MHCC, while effectively silencing other collective viewpoints and perspectives.’ And there’s more following….

3. HUD control of MHCC agenda. ‘HUD has taken complete control of the agenda for all MHCC meetings. HUD itself can determine which matters and proposals will be brought before the MHCC and what subjects can even be discussed by the committee.’

4. HUD control of MHCC schedule and update cycle. HUD has taken control of prioritization of proposals before the Committee. Previously, the MHCC decided how to prioritize proposals received from HUD, or the public….And there’s more following….

5. HUD control of MHCC subcommittees. ‘…HUD has taken control of the membership of MHCC subcommittees. Since it was established, the MHCC has allowed interested non – MHCC members to participate in – and vote as – members of its various subcommittees, where much of the Committee’s actual work is accomplished. HUD…has given itself veto power over appointment of individual subcommittee members (allowing it) to skew membership to particular members, and viewpoints it favors.’ (Lightly edited. GFA)

6. HUD control of subcommittee referrals. ‘HUD has taken over assignment of proposed revisions of standards and enforcement regulations to specific MHCC subcommittees.’ And there’s more following….

7. Manipulation of MHCC appointments. Politically – motivated appointments to the MHCC, during the past several years, have skewed the balance of the Committee with special interest advocates, who don’t appear to share the broader interest of mainstream manufactured housing consumers in affordably – priced, non – subsidized home ownership.’ (In the interest of full disclosure, I’ve applied for appointment to the MHCC continually since year 2000, but for naught. GFA)

8. Mischaracterization of the role and authority of the MHCC. ‘HUD declared, at the Tulsa meeting, the only role of the MHCC is as an ‘advisory committee’ to respond to specific HUD proposals. This contradicts and skews the Manufactured Housing Improvement Act of 2000 reform law, authorizing MHCC to develop its’ own proposed standards, regulations and interpretations….’

9. Mischaracterization of GSA ‘Requirements’ vs. ‘Guidelines’. ‘After attempting to justify HUD domination of the MHCC to ‘requirements’ of the General Services Administration (‘GSA’), which is generally responsible for federal advisory committees, under the Federal Advisory Committee Act, the HUD DFO later acknowledged certain points had been ‘overstated’, and GSA ‘requirements’ are, in fact, only ‘guidelines.’ However, none of the negative rulings (i.e. described in previous paragraphs) of the HUD DFO were retracted. (It’s at this point you should go back and reread the first two paragraphs of Part II of this blog posting, and critically reflect….)

MHARR concludes their remarks about this startling manipulation of the MHCC, concluding with this dire prediction: ‘Now that HUD has degraded the role, authority, functionality and independence of the MHCC, and has stacked the Committee against the industry and mainstream consumers, it will attempt to force as many costly and damaging proposals through the MHCC as possible. HUD indicated proposed rules will be published in rapid sequence this Summer, on a number of major pending matters, some of which do not have the consensus approval of the MHCC.’

III

MHI’s commentary on specific MHIndustry issues, beginning with fire sprinklers.
‘HUD, in an effort to protect the preemptive nature of the HUD code, proposed a ‘where required’ standard for fire sprinklers, based on the NFPA 13d fire sprinkler code. The MHCC voted to refer the proposal to its’ Technical Systems subcommittee. MHI’s Technical Activities Committee is working on its’ own proposal to present to the MHCC and HUD.’

MHARR’s commentary on fire sprinklers. ‘MHARR opposes the HUD – proposed federal fire sprinkler standard on multiple grounds and urges the MHCC to reject the proposal.’

NOTE. Since one of the distinguishing hallmarks of the Manufactured Housing Construction and Safety Standards Act is federal preemption from local building codes, e.g. requiring water sprinklers in private residences, Why is this a matter of discussion at all? Reads like ‘opening the door’ to other local building code mandates. GFA

MHI and MHARR, as far as this industry observer could see, hold similar views relative to other proposals at the MHCC meeting, including:

• Vent exhaust outlets
• Entertainment outlet receptacles
• Fireplace venting/crawlspace ventilation
• Ground anchor assembly testing protocol
• Tamper resistant receptacle outlets
• Tankless water heaters
• Tie down systems
• Vented space heaters

Want copies of the two documents from which these proceedings have been quoted? Call MHARR @ (202 783-4087 & request ‘Report & Analysis’ dated 3 May 2010. Phone MHI @ (703) 558-0678 to request ‘Summary of the MHCC Meeting’, dated 5 May 2010.

IV

Is there a bottom line to the confusing, heavy – handed, internecine code interpretations and actions described in this blog posting, occurring between manufactured housing’s two national advocacy organizations, with the consort of a federal regulatory body – masterful at manipulating expectations of, and consequences to, both trade organizations, as well as our industry as a whole?

YES, and ‘internecine’ is the very word best describing said consequence, considering it means: ‘accompanied by mutual slaughter; extremely destructive’. Friend in the MHBusiness: WE ARE THERE! First, we must get our own house in order. Then…

The very agency, apparently maneuvering and manipulating the Manufactured Housing Consensus Committee (Agree or disagree?) – and by extension, the entire manufactured housing industry, has done little during it’s 35 plus years of regulatory oversight, to ever actively promote this most honestly affordable, non – subsidized, high quality, energy efficient, eminently transportable, and ‘very green’ type factory – built housing to the American home – buying public! That’s gotta change if we’re to survive as an industry! HUD, are you paying attention?

Remember the message of the Manufactured Housing Manifesto, published a few months ago on this website: ‘If we, as an industry, don’t get beyond what some call a Grand Conspiracy (To put us all out of business!), or what others refer to as our industry’s Near Perfect Storm; given the percentage rate of shipment decline between years 2008 & 2009 alone, we will ship only 250 new HUD Code homes come year 2020…that’s only 10 years away, the same time period between beginning the new Millennium and now, when in 1998 we shipped 372,843 homes – but during all of 2009, only 49,789 new homes!

Anyone at MHARR, MHI & HUD listening? Everyone reading this blog posting should surely hope so! And YOU can prompt them to listen, by copying and forwarding this sobering message to everyone you with whom you connect in these three bodies!

As always, your reaction to, critique of, and recommendations for, this weekly blog, are sincerely appreciated. Respond directly hereto, via MHIndustry HOTLINE: (877) MFD – HSNG or 633-4764 or gfa7156@aol.com.

Frankly, many of you do read and comment directly to me every week. In the previous paragraphs, you’ve been given a pretty good feel for perspectives expressed by MHARR and MHI, indirectly by HUD, and this industry observer. How ‘bout a fifth, alternative view’, added to this mix? Following commentary is quoted from an email received from a recent former factory – built housing manufacturing executive, on April 27th, the day before the above – referenced MHCC meeting was held in Tulsa, OK:

“MHI and MHARR are completely and totally lost in the mire of government bureaucracy. To help – which they do not now – they must get off HUD and get after marketing and financing our products! Until we have economic power, we are just a bunch of whiners. (We need to become) a viable option to NAHB’s huge leadership.”

Rejoinder? I’m certain MHI and MHARR would reply, that HUD’s adding of regulations (Think’ fire sprinklers’, for starters) add cost to our affordable housing product. And HUD would relish increased freedom to regulate even more. But how ‘bout if all three parties, for the first time, would begin working together to actively and effectively market our unique housing product, to grow that economic power through larger market share!

What are YOU, beginning today, going to do about this manufactured housing situation?

Here’s just one possibility. HUD Code home manufacturers continue to contact me regarding scheduling and hosting a third NSAC caucus – like national event, to address some of the very same issues, big and small, described throughout this blog posting. If YOU are a HUD Code manufacturer, and haven’t contacted me yet with your support for a focused, limited participation, strategic national event, please do so ASAP. Need a dozen bona fide ‘players’ to pull this off, and we’re not there yet. It’s your future; what are you going to do ‘outside the (trade association) box’ to seek, and hopefully identify, creative yet practical solutions – even ‘cutting edge solutions’ to the heady – if – not – survival – challenges we all face today?

*****

FYI: Sale of Manufactured Housing $$$ Primer continues to be brisk! If you don’t have your copy yet, phone (317) 346-7156 or order via this website @ only $29.95 (postpaid).

*****

Mark your calendar! If a landlease community owner/operator, plan now to attend the 19th annual International Networking Roundtable on 15 – 17 September 2010, likely in Phoenix, AZ. As this is a ‘By Invitation Only’ affair for LLCommunity ‘players’ from throughout the U.S. and Canada, call (317) 346-7156 to ensure your name (Real estate and chattel lenders Welcome as well!) is on the invitee list – and request a FREE reprint describing what occurred at last year’s Roundtable in Chicago, IL. The Roundtable is manufactured housing’s stellar annual event, combining three major activities: stellar interpersonal Networking among peers; 24 stimulating, timely Topics covered by as many presenters and panels; and the only LLCommunity Deal – making Event all year long! Attendance limited to 200, so don’t be left out this year!

*****

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

*****

Postscript: Response to last week’s blog, describing formation of an informal national CONSORTIUM of Print and Online Manufactured Housing – related Trade Publications and Media, was strong and motivating, especially considering The Grissim Report announced the day following, it was ceasing publication. Those subscribers were afforded an opportunity to ‘receive out’ their subscriptions, with monthly issues of the Allen Letter professional journal. To date, most have taken advantage of said offer. Point in telling you all this? Manufactured housing’s print and online publications continue to dwindle in number, so actively support those of us who remain! Next meeting of the CONSORTIUM will be in Washington, DC, mid July, during MHI’s Summer meeting.

CONSORTIUM of PRINT & ONLINE TRADE MEDIA PUBLICATIONS

Serving Factory – built Housing Manufacturers, Retailers, Financiers

& the Landlease Community Real Estate Asset Class!

All segments of the U.S. housing industry have experienced major economic hits since the dawn of the New Millennium. First it was the HUD Code manufactured housing industry, at the turn of the century, losing the majority of its’ third party chattel (personal property) finance resources; eight years later, the site – built housing industry and its’ realty – secured mortgage market went ‘near bust’ for reasons also related to greed. Today, the former struggles to survive what some fear is a Grand Conspiracy, and others opine, a Near Perfect Storm of its’ own making. In the meantime, the latter languishes, as millions of repossessed homes await reselling before new construction can resume.

One of the hardest hit segments of housing industry has been its’ trade press, particularly print publications that served various business subsets for decades. Some have become online ezines, e.g. Automated Builder and Upwardly Mobile. Others have disappeared altogether, e.g. Community Management, then MHI’s Modern Home, the venerable Manufactured Home Merchandiser, even Systems Building magazines. Paucity of paid advertising has been the common denominator causing this wholesale retrenchment. Today, only the Allen Letter professional journal, the Journal magazine, and the Allen CONFIDENTIAL! business newsletter survive!

At the same time, less capital intense – and less reliant on paid advertising – online publications have proliferated! Here we find Ken Rishel’s Chattel Finance Newsletter (free), Community Connections newsletter (for MHI’s NCC members), Dick Moore’s occasional INDUSTRY PERSPECTIVES free newsletter, Tony Kovach’s multifaceted Manufactured Home Marketing Sales Management (free), John Grissim’s The Grissim Report (subscriber – supported), and this weekly blog posting at community-investor.com This is not a new phenomenon, recalling Vermont financier and industry commentator Marty Lavin’s occasional online newsletter of a year or two ago.

In addition to the remaining print publications and new online ezines, there’re more than a half dozen websites offering a modicum of ‘industry news’, and specialty information, relative to sales and marketing training, benchmark statistics, resource directories, lead generation services, even listings of homes and landlease communities for sale. For a copy of the recently researched and just published ‘Official Manufactured Housing Resource for Print & Online Media, plus MHIndustry & Social Networking Web Sites’, subscribe to the Allen Letter professional journal. The seminal document is enclosed as a lagniappe (freebie) with the May 2010 issue! Call the MHIndustry HOTLINE: (877) MFD – HSNG or 633-4764 to subscribe ($134.95/year for 12 monthly issues).

Consortium of Print & Online Trade Media Publications? That’s right. At an April 2010 recent meeting in Springfield, ILL, representatives from two of the above – referenced print publications, and three of the online ezines, newsletters, and blogs, met to explore ways to work together, moving forward, in behalf of the national factory – built housing industry in general, HUD Code manufactured and modular housing industries in particular, as well as the landlease community real estate asset class. It was agreed, in the face of what’s occurred since year 2000 – summarized in the opening paragraphs of this blog posting, a print and online trade media consortium is an important opportunity and cooperative necessity whose time is now!

What might be expected from this informal consortium and its’ advocates, as it matures and time passes? What you won’t see is a blurring of editorial and content focus. For example; the Allen Letter professional journal has focused on LLCommunity owners/operators information needs for 20 years, only recently broadening its’ scope to include HUD Code home manufacturers who’ve named Business Development Managers (‘BDM’) to build new home market share throughout the asset class. the Allen CONFIDENTIAL! continues to be the sole subscriber – supported source of strategic and sensitive ‘insider information’ required by entrepreneurs and senior executives in every segment of the MHIndustry. The Journal’s strength lies with ferrying oft disparate views of the Manufactured Housing Institute (‘MHI’) and Manufactured Housing Association for Regulatory Reform (‘MHARR’), sans commentary. Expect to see the Chattel Finance Newsletter continue to communicate the basics of capital sourcing, mortgage underwriting, and loan compliance. Community Connections keeps LLCommunity folk informed of MHI’s advocacy efforts, in their behalf, ‘inside the Washington beltway’. INDUSTRY PERSPECTIVES has earned a credible rep as the MHIndustry’s ‘truth teller’, and likely won’t stray from that focus. Manufactured Home Marketing Sales Management, during its’ first year of online publication, has earned the apt reputation for being an unapologetic cheerleader for the MHIndustry at large! And let’s hope The Grissim Report remains loyal to its’ mission of reporting on everything newsworthy about manufacturers throughout the factory – built housing milieu.

What you might see is this; tacit agreement that all news reporting be accurate, truthful, and timely! And where How To and Op/Ed (i.e. opinion/editorial) columns are offered, they be penned by qualified and experienced individuals who communicate well, and who’re actively engaged in – not retired from, or working outside – the very business models they describe! And it’ll be a decided plus, when said writers personally demonstrate support, by dint of state and or national trade association membership and event participation, of the housing industry and realty asset class. An added plus, in time, will be to see most of these freelance writers, even the print and online publications themselves, become participants in the National Association of Real Estate Editors (‘NAREE’), the fount of professional and trade journalistic integrity..

If you’re a print or online trade press/media publisher, covering factory – built housing, manufactured housing, and or landlease communities, unable to attend the initial consortium meeting in Springfield, IL., but interested in participating, going forward, respond directly to this blog posting or phone (317) 346-7156. Next consortium meeting? Possibly during MHI’s Summer meeting in Washington, DC., 13 – 15 June 2010. For MHI meeting information, phone (703) 558-0678.

*****
FYI! Recent publication of our industry and asset class’ first Official Lexicon
(Glossary) of manufactured housing and landlease community trade terms, brings consistency in spelling and definition, to the entire spectrum of trade journalism and publishing. For your copy of the Manufactured Housing $$$ Primer @ $29.95/copy (postpaid), order via this website, or phone (317) 346-7156. Credit card orders welcome.

*****
On another subject. The goal of launching a ‘captive insurance’ program, among landlease community owners/operators during 2010, continues to progress. Formal ‘start up’ proposals have been solicited from captive insurance – qualified & experienced firms. After mention, in last week’s blog, several more LLCommunity owners requested their names be added to the list of now more than two dozen seriously interested parties. How ‘bout you? Interested in maybe lowering your annual property damage and casualty insurance premiums, and possibly participating in the profitability of a new ‘captive insurance’ firm comprised entirely of LLCommunity owners/operators? If so, call (317) 346-7156. You probably don’t want to miss out on this once in a lifetime opportunity….

*****

Here’s something novel to consider. Recently experienced this insight: “Given all the attention these days, to on – site sales & self – financing of new & resale manufactured homes, perhaps the relatively new handle ‘landlease community’, would be more accurately stated and penned as ‘lendlease community’! Why? Today, we almost universally ‘lend’ money to folk buying a new or resale home in our LLCommunity, then ‘lease’ them the homesite on which their home is sited.” Hmm. What do you think?

*****
And don’t forget; your input, response, and critique of this weekly blog posting is vital and important to its’ continuing and future ability to provide timely, accurate, cutting edge industry and asset class information back to you and all our MHBusiness peers!

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

MANUFACTURED HOUSING’S 2010 TRIUMVIRATE

Housing Production & Sales, the Trade Press, & Landlease Communities

Preparing a weekly blog affirms a pithy observation by Maya Lin, designer of the Vietnam Veterans Memorial WALL in Washington, DC:

“Sometimes I think creativity is magic, it’s not a matter of finding an idea,
but allowing the idea to find you.”

This posting is a convergence of events from the MHCongress two weeks ago, recent conversations with MHIndustry peers, and knowledge of upcoming trade events. And, if you read through to the end of this blog, I’ll share ‘A Personal Reflection Upon My First Visit to the Vietnam Veterans Memorial’.

I.

Housing Production & Sales. Earlier this year (2010), I outed what many in the manufactured housing had been quietly discussing, but not addressing publicly. It had to do with whether the MHIndustry is indeed the target of a Grand Conspiracy, planned and orchestrated by one or more quarters within and about the housing business; or simply, the hapless victim of a Near Perfect Storm brought about by discordant events and disparate happenstances. While the answer to that question remains unanswered, it’s widely agreed, given continued unchecked year to year shipment declines of late (i.e. by dint of continued paucity of third party chattel financing of new and resale home sales transactions), we could see as few as 250 new HUD Code homes manufactured and shipped during year 2020! (I hope this is proven wrong!) But it was confirming to hear MHI’s recent past board chairman, now retired, Barry McCabe make reference to this Grand Conspiracy & Near Perfect Storm scenario within his opening address to the 5th annual National Communities Council FORUM in Las Vegas two weeks ago.

Where’s all this going to date? Nearly nowhere. MHI and HUD continue to endure internal personnel shakeups and reorganization; housing factories have retrenched to handle their lowest production levels in half a century; and, with these same manufacturers not siting more new HUD Code homes in landlease (nee manufactured home) communities, property owners/operators are looking elsewhere for affordable, compatible housing alternatives, e.g. small modular units, 400 square foot ‘park models’, RVs for a season, even stick – built homes constructed on – site to look like manufactured homes. No wonder a retired MH executive recently opined: “Guess the tradition of the egocentric manufacturer continues.”

The only hints, and that’s all there’ve been to date, of genuine concern for the future of the MHIndustry, have been too few quiet inquiries as to possibility of a third NSAC caucus among just HUD Code home manufacturers. This relates to the National State of the Asset Class caucus conducted 2/27/08 in Tampa, FL., among LLCommunity owners/operators only; and, the NSAC caucus – sponsored Historic SUMMIT Meeting, 2/27/09 in Elkhart, IN., that brought MHIndustry manufacturers and LLCommunity folk together, productively, for the first time in decades! NOW some believe, and I agree, answers to our industry/asset class survival dilemma might only be realized in a closed door session among the relatively few stakeholders still active in the MHBusiness. It’s even been suggested, by members of both national advocacy bodies, for such a meeting to be successful, it’d have to be conducted sans association/institute staff. What do you think? Should there be a third NSAC type caucus? (317) 346-7156.

Did you know?! On 2 June 2010, an historic Manufactured Housing Finance Roundtable will occur in Elkhart, IN! Hosted by Congressman Joe Donnelly, with special guest David H. Stevens, Assistant Secretary for Housing & Commissioner of the FHA at HUD, they’ll meet with MHIndustry leaders and financiers, to identify sources of chattel (personal property) financing for the HUD Code manufactured housing industry. Follow this blog for a firsthand account when the time arrives….

II

The Trade Press. Speaking of the trade press, do you realize how depleted one industry resource (print media) has become, and how superabundant (online media) another has grown?

During 2009, we saw the demise of MHI’s Modern Home magazine and venerable Manufactured Home Merchandiser. So far this year, 2010, we’ve seen Automated Builder and Upwardly Mobile magazines cease printing monthly and quarterly issues, and go 100% online.

At present, three healthy print publications serve the information and news needs of the MHIndustry and LLCommunity asset class; supplemented by roughly seven online ezines, newsletters and this blog; plus, a plethora of websites claiming affinity with every possible aspect of, as they put it, ‘mobile homes’ and ‘mobile home parks’. Frankly, I find it unfortunate and incongruent for ‘cutting edge’ modern technology – enabled communication to be victimized by individuals opting for vestigial and stereotype perpetuating, rather than contemporary and image – enhancing, trade terminology. Chalk that up to stupid, albeit free, speech online!

OK, so who’re the Official Manufactured Housing PRINT MEDIA Resources these days? In alphabetical order, the Allen Letter professional journal @ $134.95/year via (317) 346-7156; the Journal = ‘free’ to MHIndustry aficionados via (706) 655-2333; and the Allen CONFIDENTIAL! business newsletter @ $950/year, or only $750/year with an Allen Letter professional journal subscription, via same phone number cited earlier.

Official Manufactured Housing ONLINE MEDIA Resources? Automated Builder via (805) 642-9735; Chattel Finance Newsletter via (217) 971-3968; Community Connections newsletter for NCC members via (703) 558-0678; INDUSTRY PERSPECTIVES (MHRetailers) via (901) 872-4446; Manufactured Home marketing Sales Management via (847) 730-3692; this Official Blog for MHIndustry & LLCommunity Asset Class! via (317) 346-7156; and The Grissim Report @ $150 – 300/year, via (360) 683-1458. Then, of course, there are the manufactured housing – related websites.

If you’d like a copy of the two – sided, single page comprehensive directory of the above print and online media resources, as well as the MHWebsites, subscribe to the Allen Letter professional journal! The new Official Directory of All Print & Online Media Resources & Websites, will be included as a lagniappe (‘freebie’) with May 2010 issue of the newsletter. FYI; unique monthly enclosures with every issue of this newsletter, including the 21st annual ALLEN REPORT in January; List of HUD Code Business Development Managers or BDMs in February; annual RE Lender’s Registry in March; and, annual ‘Who Ya Gonna Call in 2010?’ list of freelance consultants in April. How can you afford not to be on the receiving end of such timely and helpful news and information month after month? That’s probably why paid subscriptions, to the Allen Letter professional journal are up 25 percent in 2010! (317) 346-7156.

When the Illinois Manufactured Housing Association (‘IMHA’) hosts it’s annual meeting in Springfield, IL., on 28 & 29 April, representatives from at least five of the aforementioned PRINT and ONLINE publications will be present to discuss the future of the MHIndustry & LLCommunity asset class’ trade press! Who knows, maybe as was attempted – but failed, nearly 20 years ago, we’ll see a trade press consortium rise from the ashes of failed publications, to ensure even better newsgathering and purveying to you during months and years to come! If you’ve a strong and abiding interest in MHTrade journalism, plan to be present at 3PM, the afternoon of 4/28. To register for the IMHA event, phone (217) 528-3423. Let me know of your interest and or plans to participate in the trade press conversation.

III.

Landlease Communities. Following are ‘not so random thoughts’ about our asset class’ heritage, ongoing intrinsic value, and somewhat uncertain future. Recently, I was asked by a major national real estate valuation franchise to identify significant emphasis areas, relative to landlease communities, deserving in depth attention at some point in the future. Here’s what I described to them…

Heritage. How and why has the moniker or label for this unique income – producing property type evolved from trailer camp (1960s) to mobile home park (1970s), to mobile home community (1980s), to manufactured home community (1990s) – though some would say manufactured housing community; to now, landlease community (2010 & beyond). Think about it. What do YOU call or how do YOU refer to this investment property alternative? By now, you should know why many of us opt for the landlease community label, i.e. no fewer than six different types of factory – built housing are routinely cited in the typical LLCommunity; no longer just pre & post – HUD manufactured homes!. If you don’t know what these six housing types are, scroll back through the archives at this blog site.

Ongoing intrinsic value; or why it’s almost always a ‘seller’s market’ where well – managed landlease communities are concerned. Do you know the drill? Goes like this: scarcity (hard to get new ones zoned and developed, thanks to NIMBY, her sister LULU, and fruity brother BANANA! See past blogs for acronym explanations); low annual turnover of homes and residents (e.g. 5 & 10 percent respectively, compared with conventional apartments at 60%+/-); low operating expense ratio(s) or OER @ 40 percent national average (again, compared with conventional apartments at 55%+/-); max opportunities for AITR (Alternative Income to Rent) on – site; and, ability to add value (e.g. either site& rent ‘repo’ homes, and or sell & self – finance new & resale homes on – site). The last of the five points is segregated from AITR, since it’s a specialty application, usually set up as a separate, if not independent, profit center.

Coincidentally, the now decade long penchant for on – site, sales and self – financing of new and resale homes has spawned three new sets of trade terminology and trends: Business Development Managers or BDMs who market new HUD Code homes to LLCommunity owners/operators; Community Series Homes or CSH, describes specially designed and equipped homes for LLCommunity siting; and, the Super Symposium & Showcase of Homes…usually a state MHAssociation planned and hosted two day program of seminars teaching LLCommunity folk how to sell and self – finance on – site, with opportunity to tour and buy new CSH homes on display at the event.

Somewhat uncertain future. Succinctly put: ‘Will chattel (personal property) financing return anytime soon to the HUD Code MHIndustry and LLCommunity asset class?’ The answer to that question, along with this one: ‘What will be the near and long term effects of the federal S.A.F.E. Act (Safe And Fair Enforcement of Mortgage Licensing), once implemented at the sate level – along with other impending financial regulatory measures, have on the industry and asset class?’ will either dispel or increase uncertainty for the two sister Business Models!

One of the first attempts to bring ‘rhyme & reason’ to this uncertain milieu of chattel finance, relative to LLCommunity operations (i.e. especially on – site sales & self – finance practices) has been recent publication of the Manufactured Housing Finance Primer, edited by this blogger, but containing definitive writings by no fewer than 24 MHIndustry & LLCommunity $$$ experts! Subtitled: ‘Almost everything you’ve wanted & needed to know about manufactured housing finance but didn’t know who to ask!’, it includes the MHIndustry’s Official Lexicon (dictionary), lists of sources for home finance, and much much more! How popular has it been since released two weeks ago? More than 100 copies were sold at the MHCongress, and mail orders have been brisk to date. Available for $29.95 (postpaid) via this blog website, or phoning the MHIndustry HOTLINE: (877) MFD – HSNG or 633-4764.

If you’re actively involved in selling and self – financing new and resale homes on – site in one or more LLCommunities, consider availing yourself of one or another of the training and consulting resources helping owners/operators and MHRetailers ensure their ‘paper’ is compliant with existent regulations; how to effectively set – up on – site operations to support this activity; and or use outside resources. These resources and matters are covered in the aforementioned book. However, also know there’s a Captive Finance Workshop scheduled for 18 & 19 May 2010 in Dallas, TX. For general information, and to register, telephone (217) 971-3968.

*****

This concludes the review of Housing Production & Sales, the Trade Press, & Landlease Community contemporary challenges, and what’s in store for the immediate future, even out to year 2020.
*****

As promised, here’s ‘A Personal Reflection Upon My First Visit to the VIETNAM VETERANS MEMORIAL Wall’ on July 15th, 1984.

Damn black wall!
Why do I cry so before you?
I’m alive – ‘Thank God’ for that
But what of these friends I knew?

Many years have passed
But now – ‘I’m really there again’
With the same strong emotions
And memories flooding back again…

‘God, I hate to cry!’
But that’s all I’ve done today
Out of gratitude – grief – and pride
For these my comrades, where’er they lie.

Damn black wall!
But I’m oh so glad you’re there…

GFA, Jr.
*****

George Allen, Realtor®, CPM®, MHM; Consultant to the Factory – built Housing Industry; Box # 47024 Indianapolis, IN. 46247 (317) 346-7156

Numbers, Attitudes, Books & Errors, all ‘UP’ AT MHCongress!

Just about ‘anyone who’s anybody’ in the MH business was in Las Vegas

I.
First the numbers! According to Manufactured Housing Institute (‘MHI’) exec Thayer Long, overall attendance at the recently concluded 2010 Manufactured Housing Congress, in Las Vegas, NV. was up from 690 in 2009, to 730 last week! That’s progress; hopefully on our way back to the ‘thousands’ of a few years ago.

Just as impressive, was the jump in the number of landlease (nee manufactured home) community owners/operators participating in the Fifth Annual National Communities Council (‘NCC’) FORUM. Here, attendance rose from the 150 present last year, to 200 this time around. And no wonder; ‘everyone’ opined this year’s joint program with Urban Land Institute’s (‘ULI’) highly regarded Manufactured Housing Communities Council (‘MHCC’) was a Winner, from start to finish!

II.
Borrowed from a chapter title in Chapbook of Business and Management Wisdom, here’re ‘Scintillatingly Salient – but – Salacious’ observations gleaned from three days of ‘goings on’ at this year’s MHCongress. *1

Historic! This was first time in ULI history, for one of its’ several dozen ‘product councils’ to meet independent of the institute’s major membership meeting, this year occurring near simultaneously in Boston, MA. Why important? MHCC is widely regarded as MHIndustry’s de facto Think Tank. This joint meeting cements a key working relationship between MHI and ULI. No ‘attitude adjustment’ needed here!

The (Mobile Home) Park Girl debuted at this year’s MHCongress, offering property management services to LLCommunities in Texas. Contact Ms. Acosta via (877) 565-3444. When she gets the MHIndustry lingo right, and adds a PM credential or two to her name and firm, look for that team to be a ‘professional’ property management force to contend with in Texas and possibly elsewhere.

Spectrum Utilities Solutions recently acquired Edison Micro – Utilities, and Water Saver Systems, giving it a presence in 24 states – from New Jersey to California, offering utility submetering equipment, installation, and billing services. Contact: Fred Rice and Dave Eversole, respectively, at (614) 214-777 & 738-9996.

Dick Bessire of Bessire & Casenhiser circulated a list of ‘43 Useful Ways to Use DW-40’. Want a copy? Call (909) 594-0501. ‘Keeps flies off cows’, ‘attracts fish when sprayed on bait’, and much much more! WD-40 that is, not the list!

SUNSTONE manufactured housing consultants also debuted at this MHCongress. ‘Think’ Bob McBroom, Christopher Nortley, and Kolman Bubis. (312) 479-1200. Had planned to ‘do a story’ describing their transition from CBRichard Ellis, but we never got together….YOU can though, by phoning (312) 442-4402.

Nearly 100 copies of the just released Manufactured Housing $$$ Primer were sold, at a special show price of $20.00, at the MHCongress! The 100 page compendium contains ‘Almost everything you’ve wanted and needed to know about manufactured housing (chattel) finance but didn’t know who to ask!’ Now available to the MHIndustry and LLCommunity asset class at large, for only $29.95 (postpaid), by phoning (317) 346-7156 or via the website posting this blog: community-investor.com Contains the Official MHIndustry Lexicon (glossary), two ways to value manufactured homes, sources of MH chattel finance, finance service & consulting firms, federal programs, regulatory reform, and ‘How to sell & self – finance new & resale homes in LLCommunities’, list of all BDMs, description of Community Series Homes or ‘CSH’, and much much more!

Paul Bradley’s ROC – USA made a splash at the MHCongress! How so? A dozen members of his LLCommunity team attended FORUM & Congress seminars, networked with new and old peers at social events, manned an Information Booth on the show floor, and generally interacted with MHIndustry and LLCommunity businessmen and women – explaining their unique Business Model, converting this income – producing property type from private to cooperative ownership.*2

Susan Gargano of Creative Haven Media & Marketing, and Lauren Shippy of The DeSimone Group, both from Cherry Hill, New Jersey, were present and actively seeking creative but practical ways to assist the MHIndustry & LLCommunity asset class in a soon and joint recovery from their ‘now decade long’ economic malaise. If YOU have ideas, contact them, respectively via (609) 351-6043 & (856) 702-6007. Tell ‘em ‘George sent you!’

Lou Vela, now with iCAP Michigan, as senior director, was as busy as ever, lining up real estate mortgage clients. (248) 539-7800. Do YOU have a copy of the 12th annual ‘Lender’s Registry of Real Estate Loan Originators & Lenders’? Was enclosed as a lagniappe with the March issue of the Allen Letter professional journal. Call (317) 346-7156 to request a FREE copy. Speaking of RE lenders, Brian Mills (727) 374-6040 was present, as were the DiMarco brothers (585) 423-0230, Charlie Williams (602) 284-8772, Dan Armstrong (205) 991-6700, Lew Grace (949) 477-1545, John Jacobs (813) 829-5061, Bruce Tolchin (310) 442-8400, and Cary Monroe (813)229-5055.

The Jerry Gowans, present at the MHCongress sans wife Donna, have a new book out, Take the ‘E’ out of EGO and ‘GO’! Check it out via www.EoutofEGO.com

Did you pick up one or both the FREE books Don Westphal distributed at his booth? If not, and you’re anticipating the rejuvenation of an aging or abused LLCommunity, YOU need these useful and timely resources! Contact him via (248) 651-5518.

And, if you’re at all into social networking, either as a novice or regular, contact Suzanne S. Felber via TrailerDiva.com and request a copy of ‘A Do – it Yourself Guide to Social Media’ produced by The Home Idea Factory. Or phone (214) 941-8341.

Speaking of books. If you didn’t get a FREE copy of the fourth edition of Tony Petosa, Nick Bertino & Creighton Weber’s Manufactured Home Community Financing Handbook, go to wellsfargo.com/mhc Frankly, this real estate mortgage How To text, and survey of present day lending trends, should be on every LLCommunity owner/operators book shelf, to be read before acquiring or refinancing another property!

At CPM® candidate Candice Hocomb’s excellent seminar on ‘Managing LLCommunities in Tough Times’, there were no fewer than six Certified Property Managers® on hand to hear and give her moral support: Michael Sullivan, CPM®; Allan Alt, CPM®; Bill Cramer, CPM® & MHM; John Rogosich, CPM® & MHM; and George Allen, CPM® & MHM. Can’t even recall the last time there were that many CPMs® in one room at a manufactured housing or landlease community function!

III.
And now for some ERRORS. Here’s a general one: If you or your firm have any intention of being or becoming a significant ‘player’ on the MHIndustry and or LLCommunity business scene, it’s an obvious ERROR for YOU not to participate in the annual MHCongress. For example; ask yourself (if present at said event), ‘What print trade publications were present?’ Answer: At least three FREE and subscriber – supported business newsletters (e.g. Allen Letter professional journal @ 317/346-7156), but no trade magazine(s) whatsoever! And, ‘What online trade publications were present?’ Answer: Several, but not all! Keep that in mind when product and service vendors vie for your business. Ask them, ‘What are you doing to keep MHBusiness segments healthy and growing in today’s difficult economy?’ Special Announcement: If you’d like one of the first copies of Official Manufactured Housing PRINT MEDIA Resources, ON LINE MEDIA Resources, and SOCIAL MEDIA Resources Contact List, being readied for distribution, as a lagniappe, in an upcoming issue of the aforementioned Allen Letter professional journal; SUBSCRIBE TODAY!

Some specific ERRORS. One speaker opined, though treated this as a fact, “More LLCommunities are going into foreclosure these days than ever before!” NOT! Ask any LLCommunity (nee ‘mobile home park’) veteran who was around when the HUD Code went into effect in 1976. Not only did home shipments plunge from 575,940 in 1972 to 49,789 in 2009, but physical occupancy didn’t rise much above 50 percent ‘way back then’ until we hit our historic 95 percent high in the late 1990s, and to have now dropped off to 88.2 percent! There’s ‘no valid comparison’ between foreclosure volumes during the late 1970s with what’s happening today!

And this: “More LLCommunities are being bulldozed today than are being built!” NOT! Just read the last several annual ALLEN REPORTS. While not replicating the ‘new development’ volume of the early 1970s (again; when 575,940 homes/per year, with 80+ percent going into ‘mobile home parks’) and late 1990s, during our mini – renascence, there’ll still a healthy number of new LLCommunities being built every year, and existing properties being expanded.

And this: “Past industry standard OERs *3 no longer apply to contemporary LLCommunity operations!” NOT SO! All the ‘old OERs’ still apply; it’s simply prudent, in some instances (e.g. when dealing with older properties and deteriorating infrastructures), to add a new line item labeled ‘capital reserves’, and with a percentage allowance relative to anticipated need for near and far future on – site capital expenditures.

The BIGGEST ERRORS of all did not occur at this year’s MHCongress, but they were indeed addressed. What are they? Too high rental homesite rent rates in particular local housing markets, and the consequences thereof! First; here’re two ‘real life examples’ of too high rental homesite rates. In central Florida, a large LLCommunity charges more than $600.00/month site rent in a local housing market where 2BR2B conventional apartment units rent for $800.00/month. Using the 3:1 ratio, (Where site rents are 1/3rd apartment rents), target site rent is $260/month; so, present site rent is nearly 2 ½ times what this Rule of Thumb suggests! Result? To sustain occupancy, the owner/operator allegedly puts prospective homebuyers into resale homes for as little as $75.00, if they’ll sign a homesite lease at the above – referenced $600/month rate. And in central Indiana, a 1BR1B apartment on a golf course goes for $426/month rent, while a mile down the road, a large LLCommunity, with declining occupancy, continues to charge $446/month site rent in this local housing market where the 3:1 Ratio suggests site rent should be $300/month or less. (Based on $900/month for 2BR2B conventional apartment). Bottom line ERRORS? Giving homes away to get site rent, and leasing vacant rental homesites for nearly the same amount one can move into a 1BR1B apartment on a golf course! Those are just two of the horror (error) stories circulating these days….

So, how were these and other out of balance site rent situations addressed at this year’s FORUM and MHCongress? In a variety of ways. Some LLCommunity owners/operators actually (finally) recommended lowering rental homesite rent rates! Others decline to do so, preferring to make up for losses in physical occupancy by ‘renting’ homes on – site, and expanding existent home sales and self – finance programs. Not sure if the NCC FORUM ‘book’, containing Power Point Presentations on this topic, is available for purchase, but you might call (703) 558-0678 and ask Thayer Long if they are. And while you’re at it, find out how to become a direct member of MHI in general, the NCC in particular!

But, for the first time in many years, LLCommunity owners/operators, in general, are clamoring to learn 1) How to decide the appropriate site rent in any given local housing market (Think 3:1 Ratio described two paragraphs earlier), and 2) How to calculate ‘affordable’ and ‘risky’ price points for new and resale manufactured homes in any given local housing market. If you’d like a copy of the handout used for the 1 ½ hour class: ‘Is Your LLCommunity Really Ready to Sell & Self – finance New & Resale Homes On – site?’, phone (317) 346-7156 and request it. And, while you’re at it, consider ordering a copy of the aforementioned Manufactured Housing Finance Primer for only $29.95 (postpaid). Why? Because the seminar syllabus is part of chapter # 7, and includes several helpful forms, including the EQUALIZER, and the ‘Ah Ha! & Uh Oh!’ formulae.

IV
In closing, I owe you an update regarding remarks made at the conclusion of last week’s blog posting. Yes, some HUD Code housing manufacturers are interested in ‘finally getting together’ to talk about our industry’s Business Model and how to best weather the ‘Near Perfect Storm’ we’ve been in now for a decade. More approached me – confidentially, about this, in Las Vegas. So, if you have a real and vested (i.e. ‘skin in the game’) interest in seeing HUD Code manufactured housing survive threats of a Grand Conspiracy, and thrive, then let me know by email, phone or whatever. Just since last week’s blog posting, I’ve received several such inquiries, but need more, to decide if and when to proceed with planning a third NSAC caucus type event for this segment of the MHBusiness.*4

*****

End Notes.

1. Chapbook of Business and Management Wisdom, by George Allen, is available for $10.00, per copy, from PMN Publishing. (317) 346-7156.

2. ROC = resident – owned communities

3. OER = operating expense ratio(s)
4.
5. NSAC caucus. Two have been held to date: 2/27/08 in Tampa, FL., attended by 100+ LLCommunity owners/operators; and, 2/27/09 in Elkhart, IN., attended by 100+ HUD Code home manufacturers & LLCommunity owners/operators.

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

Welcome to a Little Bit of Manufactured Housing History!

‘How many books have been penned describing MHIndustry chattel finance?’
Answer: ‘None before today!’

Manufactured Housing Primer debuts at the Manufactured Housing Institute’s annual Manufactured Housing Congress, this week in Las Vegas, NV. The eight chapter, 100 page, spiral bound reference resource answers ‘Almost everything you’ve wanted and needed to know about manufactured housing finance but didn’t know who to ask!’ (subtitle). The mini trade tome is comprised of writing contributions from no fewer than two dozen manufactured housing industry executives, MHRetailers, consultants, financiers, service providers, landlease (nee manufactured home) community owners/operators, and national advocacy association leaders.

Copies of the new book will be sold during the MHCongress for only $19.95 apiece; but will be available thereafter, from PMN Publishing for $24.95 post-paid. To order your copy(ies), simply phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764, or email: gfa7156@aol.com Credit card orders welcome; or, mail check to PMN Publishing c/o Box # 47024, Indpls, IN. 46247.

Want a taste of this historic text, authored specifically for the HUD Code manufactured housing industry and landlease community (‘LLCommunity’) real estate asset class? Well, here’s the first chapter, penned by Dick Ernst, president of FINMARK, in Dallas, TX., and George Allen, Realtor®, CPM® Emeritus, & MHM, of Indianapolis, IN.

Chapter 1

Introduction to HUD Code Manufactured Housing Chattel (personal property) Finance in General, and within the Landlease (nee manufactured home) Community Real Estate Asset Class.

In 1994, Manufactured Housing Institute’s in–house specialist on manufactured housing finance, William J. (Joe) Owens, writing in Development, Marketing, and Operation of Manufactured Home Communities, co-authored by George Allen, David Alley, & Edward Hicks, offered this clear and helpful description of chattel (personal property) financing in the HUD Code manufactured housing arena.

Because of its’ origins in the vehicle industry, financing for manufactured housing is still largely similar to automobile financing. In other words, the home does not (generally) become a permanent improvement to the real estate on which it is located. Rather, it remains a separately titled piece of personal property. Personal property finance of manufactured homes has remained the norm through the years because, historically, the majority of manufactured home have been placed on property not owned by the homeowner, either in a landlease community, or on private land owned by someone other than the homeowner. Therefore, acquiring a real estate title to the home and land is not possible, nor is acquiring a (realty–secured) mortgage. This practice is slowly changing, with some manufactured homes being made a permanent part of the land on which they are located, and financed as real estate, just as site – built houses are. P.130

*****

Dick Ernst, president of FINMARK in Dallas, TX., has long been considered one of the mavens of manufactured housing finance; at one point in his long and distinguished career, serving as interim president of the aforementioned Manufactured Housing Institute (‘MHI’). At this point, he picks up where Joe Owens leaves off.

Rather than repeat the history of manufactured housing chattel (personal property) finance from its’ inception 60 years ago, the following remarks focus on one of the most volatile and challenging periods of our industry’s history, from 1998 through 2009. The relevance of that decade, is that it presages the explosive growth of site–built housing and the realty mortgage market between 2001 and 2007 – and its’ subsequent meltdown, bringing our national economy to its’ knees. While dollar volume of the latter’s ‘sub prime’ meltdown far exceeds what happened in manufactured housing circles, ten years earlier, the consequences for both markets have been dire.

Let’s go back to those ‘go–go days’ of the 1990s, when the HUD Code manufactured housing industry was enjoying strong growth year after year. At the time, our industry was a darling of Wall Street. Large amounts of capital were chasing pubic (housing manufacturer) companies’ stock, driving up housing prices, and giving these firms ‘play money’ with which to buy–up other firms to expand their retail distribution networks. The new buzz within the industry was ‘vertical integration’. Led by Champion Enterprises, large retail sales operations were acquired for big bucks. Other manufacturers, like Fleetwood Enterprises, and American HomeStar, tried to keep up with Champion, as they saw their retail distribution networks going to competitors.

Retail (chattel) financing was plentiful and financially attractive, because lenders were paying MHRetailers a premium for their loans, and were very aggressive with their underwriting practices. While some lenders were portfolio lenders (i.e. keeping the chattel loans on their books), the bulk of financing, at the time, came from active participation in the Asset Backed Securities Market. Lenders were originating $100’s of millions in loans, packaging them, and selling them, while retaining servicing. Green Tree Financial was the largest ‘player’ at the time, with more than 30 percent of market share. Other lenders tried to ‘out do’ them, by buying more marginal business and or paying more for the loans purchased. Beginning to see the clear similarities between that period, in manufactured housing finance history, and the more recent ‘sub prime’ meltdown with stick – built housing?

The peak of manufactured housing’s gluttony occurred in 1998, when 372,843 HUD Code homes were shipped to MHRetailers and landlease communities. Marty Lavin, a veteran manufactured housing finance consultant, determined as much as one third of the industry’s chattel loans were made to homebuyers having a FICO score of less than 600! The soon result was a default frequency of more than 30 percent on loans originated during that time. The industry ended up with a glut of repossessed homes that took three years to absorb and resell. Now the parallel is complete! Plenty of Wall Street money chasing an industry; plenty of financing with an appetite to do even more securitizations; and, home sellers and finance companies willing to put consumers into homes with loans they likely wouldn’t be able to pay.

So, what has transpired since then? The asset–backed security business continued to operate, but the cost of doing securitizations became very expensive. Green Tree reorganized under bankruptcy protection, and stopped originating new loans. Clayton Homes, one of the largest securitizers in the manufactured housing industry, ended up selling to Berkshire Hathaway. Clayton had always been one of the most disciplined lenders in the business, but they were painted with the same brush as everyone else, and the cost of securitizaitons became untenable. As an example, if Vanderbilt (Clayton’s in–house finance subsidiary) had $ 1 billion in loans to securitize, they would be required to put up as much as $200 million in additional collateral (over–collateralization) to get the deal done. It does not take a mathematician to realize this is not a workable long-term strategy. Ultimately, when the sub prime fiasco hit, the capital markets were shaken to the core and closed down the asset backed security market completely. Even today, in 2010, there is no such market for manufactured housing. As a result, many chattel lenders went out of business.

The manufactured housing industry, and chattel (personal property) financing, look nothing like they did ten years ago. The number of lenders financing ‘home only loans’, or at least the majority of such loans, can be counted on one hand. The big four: Triad Financial Services, 21st Mortgage Corporation, CU Factory Built Lending, L.P., and U.S. Bank – Mfd. Housing Finance; plus, Clayton’s in–house arm, Vanderbilt Mortgage and Finance, Inc., provide the bulk of chattel financing, along with local community banks, along with an increasing trend toward self–finance of on–site home sales transactions by landlease community owners/operators. And since the heyday in 1998, loan underwriting and credit requirements have tightened considerably, with a minimum of a 650 FICO score required of would–be homebuyers.

What can we look forward to in the future? First the challenges. Despite specific legislation, commonly referred to as ‘Duty to Serve’, requiring government sponsored enterprises (‘GSE’), like Fannie Mae (‘FNMA’) and Freddie Mac, to finance larger shares of the manufactured housing market, we’ve seen little movement in this direction. And, FHA Title 1, passed with sweeping changes that have potential to help the industry, particularly landlease communities; but, until GNMA (Ginnie Mae) lifts their 20 year moratorium on approval of new (loan) issuers, it’ll have little impact on home sales. The good news? There’s optimism GNMA will lift said moratorium, and many more lenders will come into the manufactured housing market. Even with recent changes to FHA, increasing the front end fee and higher credit scores, those are changes the industry can live with today. Furthermore, 21st Mortgage Corporation recently received a fresh commitment of capital, which should keep them among the industry leaders in chattel financing. Finally, there will be a recovery of the financial markets; and the performance of the loans originated since 2001 has been excellent, and should attract investors looking for quality and yield!

*****

Now for a change in perspective. While landlease (nee manufactured home) communities have long been known and popular, among income–producing property investors, for their ‘recession proof’ nature, low annual turn-over, and low operating expense ratios and general scarcity (i.e. relatively few developed anew since the mid–1970s), little has been written about the asset class’ unique ability to ‘add value’ by bringing investor–owned homes on-site to be used as ‘rental units’ and or ‘for sale’ as contract sale units. This dormant practice resurfaced right at the turn of this century, when physical occupancy in landlease communities plummeted (i.e. from its’ historic high of 95 percent in 1998) and hundreds of thousands of next to new repossessed manufactured homes came on the market. Savvy landlease community owners/operators, particularly property portfolio ‘players’, led the way…but first, a retrospective look at the past…

For much of manufactured housing history, landlease communities – and before that, ‘mobile home parks’, eschewed (avoided) wholesale placement of rental homes and ‘contract sale’ homes on vacant rental homesites. Why?

As profitable as such practices can be in the short term, the presence of what are often referred to as ‘park–owned homes’, whether they be rental, contract sale, or lease–to–own units, tended to affect the property owner’s disposition strategy in a negative way; specifically, reduced pre ‘closing’ value of rental homesites so encumbered, as well as replacement versus income value, when pricing the homes themselves. Would–be investors were frequently wont to say,

‘I/we don’t want the added management headaches and increased operating expenses associated with park–owned homes!” An attitude that frequently reversed after ‘closing’, when seller nunc buyer now views the same units as being potential ‘cash cows’. Believe it. Happens that way frequently.

There’s also the difficulty, even today, of getting mortgage originators and lenders to accept more than a very small percentage of ‘park–owned homes’ in new real-estate secured loan.

Much of that changed around year 2000, when the HUD Code housing chattel finance bubble burst, continuing in a deflated state to this day (2010). Now however, besides enjoying the widespread reputation for being ‘recession proof’ investment property, landlease communities (‘LLCommunities’) have the unique ability, unlike most other types of income–producing property, to ‘add value’, by siting resale and new ‘park–owned homes’ to be used as rentals or sold on contract to homebuyers/site lessees. What effects have this singular change in operational philosophy had on the asset class and manufactured housing industry? Recycling of hundreds of thousands of repossessed homes, from the chattel finance bust between 1998 and 2005; increased and more stable physical and economic occupancy levels, certainly among the 500+/- known portfolio owners/operators in North America; and the manufacturing and marketing of tens of thousands of new HUD Code homes that would not have been built and sold otherwise, especially since late 2008, throughout 2009 and 2010!

The latter point is particularly noteworthy, in that rarely before year 2005 did LLCommunity owners buy new HUD Code homes to site and sell in their properties. Why? Because these homes were going onto leased land, they tended to depreciate in value, over time, unless kept in immaculate attention by the homeowner, and were sited in an exceptionally well–located and operated LLCommunity. An exception to this observation occurs when developers operate in strong enough markets to allow them to control the dynamic interrelationships among wholesale and retail home prices, loan terms, and rent level of homesites.

Bottom line in historical dollars? Here’ two paragraphs from the 21st annual ALLEN REPORT (a.k.a. ‘Who’s Who Among Landlease Community Portfolio Owners/operators in North America!’), available from PMN Publishing via the website: community-investor.com or by phoning the MHIndustry HOTLINE: (877)MFD-HSNG or 633-4764, or (317)346-7156.

“As was first pointed out in the 20th anniversary edition of the ALLEN REPORT, ‘Most LLCommunity portfolio owners/operators (now) market, sell, and self–fiancé new and resale manufactured and modular homes on – site.’ So much so, this year, 49 portfolio owners/operators reported 28,642 contract sale and or rental units on – site in their LLCommunities. When six firms reporting more than 1,000 contract sales apiece, were removed from the total mix, the resulting average, among remaining 43 firms, was 185 such transactions/rentals per portfolio or a total of 7,955. The six deducted firms claim an average of 3,447 contract sales per property portfolio.”

“The estimated value of above housing transactions? While impossible to estimate precisely; 27 or the 49 firms reported $221,600,000 in personal property loans carried on their or an affiliated company’s books. And given an arbitrary average new/resale home value of $30,000/unit, that total could account for 7,387 such homes (i.e. $221,600,000 divided by $30,000/home), relatively close to the 7,955 units reported in the previous paragraph (43 firms @ 185 homes apiece). Is it possible there’s nearly a billion dollars in self–financed chattel loans on homes presently sited in all 49 reporting LLCommunity portfolios? Yes, at 28,642 homes, if $30,000/unit. Certainly ‘begs the question’ relative to number of contract sales/mortgages among all 500+/- known portfolio ‘players’, beyond the 49 of 125 reported in this year’s ALLEN REPORT. A simple extrapolation of this data suggests between $2 ¾ and $3 ½ billion dollars among portfolio owners/operators alone.”

Keep in mind, it’s estimated the 500+/- portfolio owners/operators control maybe 15-25% of the national inventory of LLCommunities. But since their property size of this year’s ALLEN REPORT respondents averages 234 rental homesites per location, the remaining 75–85% of the national inventory are generally smaller properties, ranging in size from 100 rental homesites down to only three or four apiece, in the dozen or so states where this property type is even regulated. Point? The majority of non–portfolio LLCommunity owners/operators tend to be Mom & Pop–sized investments, often passively managed, and sans the resources and experience to create a new profit center to engage in self–finance of the ‘captive finance’ or ‘buy here–pay here’ methodology.

All this brings us to today, 2010 and beyond. What’s the year ahead hold for:

• HUD code manufactured housing production and shipment?
• Manufactured housing chattel (personal property) finance?
• Landlease community operations

Your guess is as good as the folk contributing their knowledge and experience to this primer. And helping you prepare for this vague future is part of the purpose of this book. Our intent is to equip the reader with enough knowledge about various aspects of chattel (personal property) finance, and various segments of the industry/asset class, to effect considered decisions about these matters going forward.

Good Reading, Good Luck, and hopefully, a very Good Future!

*****

What else is covered in the following seven chapters? Valuation of manufactured housing; sources of chattel (personal property) finance, finance service & consulting firms, federal programs, regulatory reform, LLCommunity – related matters, and resources not specifically described in previous segments of the primer. Another historic aspect of the primer is that, at the end of chapter # 1, it features the first Official Lexicon (a.k.a. Glossary) of MHIndustry & LLCommunity trade terms ever published. The Lexicon alone, is worth the price of the primer!

Hope you decide YOU want to read the entire work. This is a limited print run of 500 copies; so, when they’re gone, that’ll be all that’s available, for the time being. Don’t be without your handy, helpful Manufactured Housing Primer. Buy one or more at the MHCongress; use the ordering contacts listed earlier herein; and or phone (317) 346-7156. Leave a message if necessary….

*****

So, what else is going – on, in and around the MHIndustry & LLCommunity asset class these days? A lot! Not the least of which, is significant reorganization taking place within HUD, relative to the department’s manufactured housing regulatory responsibilities. You owe it to yourself to stay abreast of these, and other timely developments, re: FHA Title I, and implementation of the S.A.F.E. Act, to name a couple. Do so, by becoming a dues – paying direct member of the Manufactured Housing Institute via (703) 558-0678 (Thayer Long); and, asking to be put on MHARR’s email newsletter distribution list, by phoning (202) 783-4087 (Danny Ghorbani).

Better yet, become a paid subscriber to the Allen Letter professional journal, also available from PMN Publishing, for $134.95/year (12 monthly issues)! And, if you’re ‘the top executive’ with any factory – built housing – related firm, or LLCommunity property portfolio, join your peers in reading the Allen CONFIDENTIAL! business newsletter (a.k.a. TAC!) the first of each month ($950.00/year, or only $750.00/year if an Allen Letter subscriber). The ‘insider’ and oft confidential trade and national news featured in each issue of TAC!, if ever learned at all by other trade publications, will generally not appear until 30 – 60 days later. This is probably one reason why no TAC! subscribers to date, after 10+ years of publication, have experienced business failure! They oft know, before their competitors, what’s happened, happening, and about to happen; so can make appropriate strategic business planning decisions in a timely and forthright fashion. Maybe these two monthly print publications are what you’ve been needing to help YOU make right business decisions during the months ahead….

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

SAVE YOURSELF; NO ONE ELSE WILL!

– a simple but serious Four Step Plan for owners/operators of landlease (nee manufactured home) communities during these economically trying times –

It occurred to me, while Mystery Shopping landlease communities (‘LLCommunities’), engaging in some expert witness introspection, and attending a Super Symposium & Showcase of Homes, we – as owners/operators, continue to be our own worst enemies, when it comes to managing, selling, installing & financing new and resale homes within our valuable income – producing properties!

That’s right; no, I mean, that’s ‘wrong’ – that in property after property, homebuyers/site lessees see evidence of unprofessional property management (‘PM’); experience lackadaisical selling & leasing by phone and during interviews; suffer homes poorly sited and installed; and, probably worst of all, endure sub prime chattel (personal property) financing procedures, or lack thereof, that’ll might (Think impending S.A.F.E. Act implementation) get note holders in trouble!

So, what’s one to do about ‘poor rules enforcement, lax curb appeal, & lousy resident relations’ indicators; consultants who increasingly default to their firm’s website rather than sell; homes twisting and turning on insecure foundations; and, ‘buy here – pay here’ loans that’re unintentionally non – compliant with state and federal regulations?

Here’re four places to start the corrective process through education:

I.

Ensure every on – site property manager (a.k.a. administrator, caretaker, resident manager) is provided an opportunity to receive professional property management training & certification, preferably outside the company. Why? First; training is an educational and sharing experience; second, certification is the reward for, and indicator of superior PM performance! Furthermore, it’s unlikely a firm’s homegrown program was prepared and articulated by a Certified Property Manager ® member of the Institute of Real Estate Management (‘IREM’). Why is this important? During 30 years of experience and observation in this business, the best LLCommunity PMs almost always are professional CPMs®. So, why settle for less, when training your best?

What’re the professional property management training and certification alternatives available to LLCommunity owners/operators today?

At the entry level, whether a new or experienced on – site manager, or new owner of a LLCommunity, is the Manufactured Housing Manager (‘MHM’) one day PM program, available in classroom format (hosted by state MHAssociations & LLCommunity portfolio firms) or correspondence course. Contact PMN Publishing for details, via the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. There’re 1,000+/- MHMs to date, all trained by a veteran LLCommunity owner and CPM®

At the intermediate level, is the Manufactured Housing Education Institute’s (‘MHEI’) nearly 20 year old Accredited Community Manager ® (‘ACM’®) program. This is a three course program (two days each session), culminating in preparation of a property management Plan. Classes are usually held annually in Michigan and Florida. For more information, contact Manufactured Housing Institute via (703) 558-0678. There are approximately 200 ACM®s in place today.

And then there’s the Certified Property Manager® member of IREM program, that serves as a quasi – ‘graduate degree’ in professional property management. CPMs® are trained in all types of income – producing property, and to date, 250+/- CPMs®, nationwide, claim affinity with the LLCommunity real estate asset class. For information, contact IREM® via (312) 329-6000.

II.

Real estate licensure. Few three word combinations stimulate more fear, prejudice, and distinction, in the minds of HUD Code manufactured housing aficionados and LLCommunity ‘players’. Why? Some ‘fear’ the day when, as marketers, sellers and installers of (factory – built) housing, on building sites conveyed fee simple and or into LLCommunities, they’ll have to become educated and licensed as real estate salespersons and brokers, to perform their presently uneducated and unlicensed realty – related jobs.

Then there’s the prejudice. Rarely, if ever, have real estate licensees given more than minimum lip service to the HUD Code manufactured housing type of factory – built housing. And only since the recent U.S. Supreme Court’s decision, allowing MHIndustry access to local realty board multilisting services, has the industry begun to enjoy a viable means of establishing a working, ongoing secondary market for its’ unique type housing.

But there are enlightened MHIndustry and LLCommunity professionals – I can think of at least a dozen; who know firsthand, the value, benefits and distinction of achieving real estate licensure – from training, networking, and access perspectives – to maintain active real estate brokerage licenses, and in some cases become Realtor® members of the National Association of Realtors (‘NAR’)..

So, what to do? Contact your state’s real estate licensing board and request guidance relative to licensure in your state. Then take the appropriate classes (They’re not easy!), pass the necessary tests, and become licensed. Frankly, you’ll be surprised how much you’ll learn about the profession (i.e. real estate) with whom you’ve rubbed shoulders over the years, but never really understood before. And, be assured, you’ll walk away from the experience with concepts and ideas, you wouldn’t have otherwise learned, to apply to your own organization.

III.

Installation of HUD Code manufactured homes. Why take your state’s official or sanctioned manufactured housing installer class? Ask yourself: ‘Who does the homeowner and lawyer call first, and whose money is most at risk, when something appears to go wrong with the installation of a new or resale manufactured home?’ YOU, as LLCommunity owner/operator! So, why not mitigate potential financial loss by being better prepared. There’s that old Seven ‘P’ Rule again: ‘Proper Prior Planning (i.e. Preparedness!) Prevents Pitifully Poor Performance! For information, call (302)645-5552 or MHRConsuolting@juno.com, or your state manufactured housing association executive. You’ll be very glad you did!

IV.

Captive finance and ‘buy here – sell here’. Which of these is your preferred process for providing self – finance (a.k.a. owner – assisted financing) on – site in your LLCommunity, when marketing and selling new and resale homes? By way of refresher, here’re the definitions of both concepts:

‘Buy here – pay here’, has been around MHIndustry circles since the 1970s; and occurs, when the same business entity that sells a new or resale manufactured home also effects and services the chattel loan on said home. While a simple approach, it also carries the potential of opening home seller/financier to otherwise avoidable finance – related liabilities, and complicates licensing under the S.A.F.E. Act.

Captive finance, also a lending process, occurs when home selling business entity forms a separate, but related, finance entity; removing finance – related liabilities from the selling party, and makes S.A.F.E. Act licensure less complicated. Captive finance also eliminates public disclosures of information by the selling entity, facilitates raising funds, and enhances liquidity.

Related to both previous descriptions, is the concept of ‘third party servicing’. Some LLCommunity owners/operators chose to use an independent third party to perform all or some of the duties associated with a captive finance operation; and or, for that matter, the ‘buy here – pay here’ scenario as well.

So, which is your preferred and or actual business model? Do you know where to go for training and assistance with each? First, obtain a copy of the Manufactured Housing $$$ Primer, published by PMN Publishing. Use contact information provided with the aforementioned MHM professional property management and certification description, or among the salmagundi ‘news items’ at the end of this blog posting. Another good reason to obtain this new, valuable resource, is it’ll help you decide how to best ‘value’ homes in your LLCommunity, when readying for sale and or finance. There’re chapters on that subject, as well as ‘captive finance’ and ‘buy here – sell here’ business models.

If interested in ‘captive finance’ training, consider attending a two day seminar facilitated by Precision Capital Finance. For information, phone (217) 971-3968 or Jim Keller, MHM: jkeller@captivefinance.net Next scheduled program will be in Dallas, TX on 18 & 19 May 2010.

If ‘buy here – pay here’ is preferred business model, contact ManageAmerica for information on their broad array of services on this timely and critical subject, as well as revenue management, integrated utility billing, and property management tools. Phone (760) 770-6500 or via sales@manageamerica.com

That pretty well covers the Four Step Plan promised in this weekly blog. Don’t hesitate to contact me, via this website, or phone: (317) 346-7156, if you have questions and comments to share.

FINI

Now for some SALMAGUNDI new: ’a little of this and a little of that’ These are some of the exciting and interesting initiatives afoot in the MHIndustry & LLCommunity asset class these days:

ANNOUNCEMENT! Manufactured Housing $$$ Primer will be available for purchase! The 100+ page, spiral bound book is the first ever written about chattel (personal property) finance as it pertains to the HUD Code manufactured housing industry. Contains the writings of no fewer than two dozen industry and asset class executives and consultants. Available from PMN Publishing via phone, at: (317) 346-7156. Price is only $19.95 plus shipping & handling, for a total of $24.95. Every HUD Code home manufacturer and retailer, along with LLCommunity owners/operators will want this handy ‘reader friendly’ resource close at hand during these trying economic times!

HAVE YOU HEARD THE WHISPERINGS? I’ve received confidential requests, from HUD Code home manufacturers on both sides the infamous MHARR/MHI fence, to plan and host a third NSAC caucus – like meeting later this year. *1 What’s on their minds? A desire (need?) to convene, then examine our industry’s present business model(s); also discuss and decide what needs to be made anew, renewed, or tweaked, to better face an uncertain future! One recurring theme goes like this: ‘Let’s seize what’s become the ‘low income (subsidized) housing = affordable housing’ societal nor; and through united effort, a clear redefinition of ‘affordable housing’, followed by a national media branding campaign, return homebuyers’ perception to where it was during 1970s & 1980s: ‘affordable housing = manufactured housing‘!’ If the idea of a third NSAC caucus excites you, let me know via the MHIndustry HOTLINE: (877)MFD-HSNG or 633-4764. Personally, I think MHFinanciers and LLCommunity owners/operators should be involved in this historic, high level strategic planning session….

TONI GUMP, publisher of the California – based Upwardly Mobile magazine, told this industry observer there’d be no more print copies of her popular publication; all is going online. So, strongly recommend you visit umhmag.com

INTERNATIONAL NETWORKING ROUNDTABLE. Am in the midst of compiling the annual ’24 speakers and topics’ list for this Fall’s stellar event (15 – 17 September). Do you personally have, or want to hear, compelling subject? Let me know ASAP @ (317) 346-7156. Remember, this is the sole annual, international event designed primarily for LLCommunity owners/operators, and HUD Code home manufacturers of late, so don’t be left out. As this is a ‘by invitation only event’ ensure your name is on the mailing list!

End Notes.

1. NSCA caucus. ‘National State of the Asst Class’ caucus. Two to date; first in Tampa, FL @ 2/27/08 for LLCommunity owners/operators; second in Elkhart, IN. @ 2/27/09 for HUD Code manufacturers & LLCommunity folk.

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

Official MHIndustry Briefing format @ April 2010

Have you wondered what Wall Street analysts, investment bankers, and major real estate investment portfolio managers pay thousands of dollars to hear and learn? Well here’s one example that’s used frequently and updated monthly…

An Overall Perspective of the MHIndustry as a ‘double dual industry & realty asset class’

HUD Code manufactured housing is one key type of factory – built housing, characterized by federal regulatory oversight via a preemptive, performance – based national building code. First half the ‘double dual’ characterization = housing design and manufacturing; then, housing distribution per towed steel chassis, with marketing thru ‘company stores’ and a declining number of independent MHRetailers. Today however, an increasing number of landlease (nee manufactured home) communities, throughout the U.S. regularly market, sell and often self – finance new and resale homes on – site! Housing market share, measured by annual shipment volume (e.g. only 49,789 new HUD Code homes shipped during 2009), not sales volume! Clayton Homes = 46%+/- of national HUD Code market share. Trends? Consolidation (e.g. Fleetwood acquired by Cavco; Champion acquired out of bankruptcy by three creditor investors) of housing manufacturers. Production/shipments continue to trend downwards, and will continue to do so sans reliable, continuing source(s) of chattel (personal property) financing for new and resale home transactions! At present rate of annual decline in shipments, it’s estimated only 250 homes will be ‘shipped’ during year 2020.

The second half the ‘double dual industry & realty asset class. The landlease (nee manufactured home) community, a.k.a. ‘LLCommunity’ income – producing property type, historically sited ‘mobile homes’ (pre – 1976 vintage) and manufactured homes (post – 1976) Today? Add modular homes, ‘park models’, RVs for a season, and stick – built homes constructed to look like manufactured homes (in Florida), to the historic mix, hence recent evolution in trade terminology. National inventory = estimated 50,000+/- such properties; 85% of which = fewer than 100 rental homesites piece in size. 500+/- portfolio owners/operators of LLCommunities (i.e. minimum portfolio size threshold = five properties and or 500 rental homesites). See additional stats in 21st annual ALLEN REPORT available via this website: www.community-investor.com

Examples of recent ground – breaking joint initiatives and efforts between HUD Code home manufacturers and LLCommunity owners/operators: nearly three dozen business Development Managers (‘BDMs’) appointed a year ago to increase manufacturers’ market share of new homes going into this property type (some factories now have 50% of production headed into LLCommunities); recognition of special design, size and features for LLCommunity – sited homes = Community Series Homes or CSH; and, regular scheduling of Super Symposiums & Showcases of Homes, in IN, OH, IL, GA & NY, with dual goals of teaching LLCommunity folk’ how to market, sell and self – finance new and resale homes on – site’, and exhibit CSH product for purchase consideration. Symposiums also replace regional shows (e.g. Louisville, KY.), which have been canceled of late.

SPECIFIC PERSPECTIVES

Manufactured housing valuation. Historically, and for the present – per GSE preference, ‘book valuation’ (replacement method) still very much in play. Book value adjusted per condition of housing unit being valued, and location of home. Valuation by ‘market comps’ is preferred method by MHIndustry and LLCommunity businessmen and women desiring to move beyond near automatic depreciation of MHousing values per ‘book valuation’ method. Datacomp in MI sets the pace and standard(s) in this effort. Difficulty of conversion from ‘book value’ to ‘comp value’ also hinderd by local housing market practices and prejudices, oft instigated and perpetuated by real estate sales licensees and brokers; and sad to say, some folk within the manufactured housing industry.

Current Market Trends. Local housing market trends are ‘all over the place’ per climate (e.g. Sunbelt vs. non – Sunbelt), economy ($ available for home purchases and lending), employment increasing or decreasing, & active workforce or retirees, etc.); competition (e.g. site – built housing repossessions & presence/lack of multifamily rental or apartment communities, etc.) NATIONAL. Relative to HUD Code home manufacturers: beyond above – referenced consolidation, 80/20 mix of singlesection vs. multisection homes swinging again, in part due to $ available for housing purchases and increased interest in siting new homes in LLCommunities. (This did not happen prior to five years ago!). Relative to LLCommunities: consolidation here too (e.g. 25 portfolio ‘players’ 21 years ago; 500+/- today, including three REITs), as well as a near perpetual ‘seller’s market’ due to scarcity of product (new properties not being developed due to NIMBY, LULU, & BANANA*1); ‘recession proof’ nature of the property type (explain); very low annual turnover rates for homes and homeowner/lessees; lowest operating expense ratios (‘OERs’); more opportunities for AITR (‘alternative income to rent’) than any other realty asset class; and, innate ability to ‘add value’ by marketing, selling, and self – financing new and resale homes on – site…from a few million $$$ in 1999 to $3 ½+/- billion, among 500+/- major ‘players’ alone, by end of year 2009. Downside? Due to too high rents (first with REITs, then greedy private operators), some large LLCommunities are now in foreclosure or forbearance. Occupancy trend? Down slightly, but not nearly as bad as would have been the case without on – site home sales. In fact, national physical occupancy among portfolio LLCommunities is higher, for the first time in memory, than percentage experienced by conventional apartment communities during 2009

Impact of subprime collapse and housing crisis on the manufactured housing industry. To answer this, be aware MHIndustry continues to endure its’ subprime lending collapse and housing crisis, that began eight years earlier than site – built housing, from when 372,843 new manufactured homes were shipped in 1989 – down to only 49,789 last year! Impact of contemporary subprime and housing crisis among stick – built homes, on MHIndustry? Varies from local housing market to market. Yes, some folk with bruised credit have ‘returned’ to HUD code housing (After all, site – built housing boom stole half our traditional market of the ‘newly wed & nearly dead’), but there’re still 1,000,000+/- repossessed site – built homes to be resold as bargains (competing with non – repo, new MHomes) before we’ll see any groundswell of new homebuyers. AND, since MHIndustry lost its’ access to third party chattel (personal property) financing post 2000, our ability to loan to 600 FICA score borrowers is sorely limited – except for on – site sale and self – financing of new and resale homes in LLCommunities! Bottom line? Minimum impact at this time. And there is one major bugaboo on the asset class’ horizon: the unknown impact of the federal S.A.F.E. Act once implemented on a state by state basis. At present, this legislation has the potential to put most on – site, self – finance operations out of business…

Here ends the Official MHIndustry Briefing format ‘exercised for hire’ several times each month. If you’d like to comment about it, offer suggestions, etc., do so via this website or phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

SPECIAL ANNOUNCEMENT. Manufactured Housing $$$ Primer being printed and bound as this blog is posted! The 100 page guide contains original work prepared by two dozen MHIndustry experts. This is the first such text ever published on the complicated subject of chattel (personal property) finance, as it applies to HUD Code manufactured housing. This is a limited print run, so if seriously interested in owning a copy of this historic and helpful publication, respond directly to this Blog or via (317) 346-7156. Some copies will be available for purchase (Price indeterminate, but likely $19.95+/-) at the Manufactured Housing Congress in Las Vegas @ April 13 – 15, 2010. Call (703) 558-0678 to register for this important industry event!

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

‘Get Ready, Get Set, LEAP!’

A salmagundi of advice, observations, and opportunities to help you Learn, Earn And Prosper, during these difficult times for manufactured housing!*1

First, for the landlease (nee manufactured home) community owner/operator.

1. Mind your own business like never before! And remember this about your personal and business character: Malcolm Forbes, had a net worth of about $250 million, when asked how he decided where to invest his own fortune, said: “I bet on the jockey, never the horse…I don’t need to know what industry the company is in, or what its’ financials are. All I need to know is what kind of person the CEO is!”*2 “…the character of an organization is established by the character of the people who work there. And that character is determined by the integrity of the leader.’ Rosen & Brown, in Leading People, 1996.

2. Don’t be greedy! Apply the Minnesota/Kentucky Rule of Thumb!*3 In the landlease community (‘LLCommunity’) business environment, ‘Total monthly PITI & rent payment, for a new or resale home transaction and homesite lease combined, must be $50.00/month less than monthly rent for a large conventional apartment unit in the same local housing market, or you’ll lost the deal every time!’*4

3. If personal or corporate funds are available, self – finance new and resale home transactions on – site, forming a separate business entity for this purpose (i.e. ‘captive finance’); or hire a capable, experienced, motivated third party financial services firm to underwrite and service these chattel (personal property) loans! To this end, reserve your copy of the Manufactured Housing $$$ Primer scheduled for release April 13th at the National Communities Council (‘NCC’) FORUM in Las Vegas. How? Call (317) 346-7156 or email: gfa7156@aol.com Price? Indeterminate, as the guidebook is being edited as this blog is being posted.

4. Speaking of ‘captives’. NOW is finally the time to seriously consider joining with approximately two dozen other LLCommunity owners/operators, to form a ‘captive insurance’ firm during 2010, emulating what our campground and RV park peers did so successfully decades ago! For more information, contact Jay Zandman @ (800) 211-0468 x 117. I plan to participate! GFA

Next up; is manufactured housing industry ‘an either or’ proposition or a singular entity?

‘Up & Down’, ‘Left & Right’, ‘Port & Starboard’, Manufacturer & Distributor’, ‘Housing Production & Post Production’. Specifically, Housing Production = HUD code home manufacturers & OEM suppliers; while Post Production (nee ‘the aftermarket’) = lenders, MHRetailers & LLCommunity folk!*5 Does our Business Model really pencil down to being a simple couplet, comprised of one or the other perspective, relative to HUD code manufactured housing; or, are we inextricably bound up ‘in this together’? That’s the first pivotal question being asked, with increasing frequency today, from different corners of this industry and its’ unique realty asset class.

A second question being asked of and from both perspectives: ‘Are we satisfied with the advocacy efforts and trade representation in place inside the Washington beltway at this time?’ Are you?

Now, neither question is particularly new. What’s novel, is the patent recognition the ‘industry’ per se, may have passed the point of (near) ‘no return’. Specifically; did you see, as I did, there were No HUD Code manufacturer ads, of any size whatsoever, in the February issue of The Journal? And after a 50 year run, no Midwest Manufactured Housing Show in Louisville, KY? And the 50+ year old Manufactured Home Merchandiser folded during 2009. For a complete and sobering list of the many HUD Code manufacturers who exited during 2009, read The Grissim Report.

In the meantime, the realty asset class, though some are paying the price for past greed continues to profit from intrinsic benefits of scarcity (few new LLCommunities being developed); being ‘recession proof’; ‘adding value’ via home sales and finance; and, enjoying the fruit of generally low annual turnover of homes and residents, as well as lowest OER among all income – producing property types.*6

How’re answers to the leadership – focused questions going to pan out? For sure, we’ll have to wait and see. In the meantime, MHARR rails against federal regulators (e.g. ‘Further Evidence of HUD Program Mismanagement’, per email correspondence on 3/19/2010). The very same day, MHI’s weekly email report contained little more than pabulum. Just know there’re contingency plans in place, to ensure continuation of political advocacy, regulatory defense, and trade representation – with a minimum of interruption, should a worst case scenario present itself.

And finally; while it’s not really for me to announce; the MHRetailer, some say MHIdea, rejuvenation initiative appears to be dead for now. In last week’s blog posting I apologized for not announcing Big News, stymied by an unexpected power failure in central Indiana. Well, guess what? Still no Big News – of a positive nature, this week either. The truth is, No News. A half dozen and more, really concerned independent MHRetailers and affiliated parties, were ‘standing by’ in the hopes a charismatic leader of financial means, would step up to the plate, and unite disparate ‘players’ throughout this segment of the industry. It simply didn’t happen. However, if the content of this paragraph lights your ire fire, and you decide to get actively and intimately involved; let me know, and I’ll put you in touch with the aforementioned core of seriously concerned independent MHRetailers and affiliated parties.

The week or two ahead. If planning to be in central Massachusetts on Friday, March 26th, consider joining LLCommunity peers at the day long Manufactured Housing Manager (‘MHM’) professional property management training and certification class there. Call Mary McBrady @ (508) 460-9523 ASAP. And early the next week, if you have any excuse to be in Albany, New York, attend the New York Housing Association’s Super Symposium & Showcase of Homes! To date, more than 100 registered to attend this combination of sales and finance seminars and home tours. For information, contact Nancy Geer @ (800) 721-HOME or info@nyhousing.org

Have you been following the ‘Best of MHARR & MHI’ column in the Allen Letter professional journal, penned by ghost writer M.H. Ronin (last name means ‘a covet operations specialist with no governmental ties’)? To subscribe, access the website bearing this blog: www.community-investor.com

*****
End Notes.

1. salmagundi. ‘a little of this, a little of that’
2. Material quoted from Boa, Buzzell & Perkins’ Handbook to Leadership, Trinity House Publishers, GA, (800) 372-9632.
3. Minnesota/Kentucky Rule of Thumb. Moniker recognizes a wise pricing perspective recognized and espoused by two veteran LLCommunity portfolio owners/operators who independently arrived at the same conclusion; a.k.a. the Schraeder/Smith Rule
4. PITI = principal, interest, taxes, insurance
5. MHRetailers = official abbreviation for manufactured housing (nee street) retailers; and OEM = original equipment manufacturers (e.g. appliances, etc.)
6. OER = operating expense ratio(s). For FREE copy of Official Industry Standard Chart of Accounts and accompanying OERs for the LLCommunity asset class, phone the MHIndustry HOTLINE: (877)MFD-HSNG or 633-4764.

George Allen, Realtor®, CPM®, MHM. c/o Box # 47024, Indianapolis, IN. 46247

NEXUS is US!

Some sense ‘Change is in the wind’; not the President Obama type, but pro & con initiatives & measures affecting every segment of HUD Code manufactured housing & the landlease community real estate asset class!

NEXUS is US!? Dictionaries list three definitions for this word, each characterizing one or another aspect of our unique, American born, ‘double dual industry’.*1 Nexus is ‘a means of connection, link or tie’; also, a ‘connected series or group’; and, ‘the core or center’. If you’re an entrepreneur businessman or woman with sole proprietorship, partnership, or corporate stake in HUD Code manufactured housing, and or ‘re salaried executives and employees of these businesses, partnerships, and firms! Bottom line? We’re in this predicament of historic proportions, together; and as ‘the nexus’ of manufactured housing & landlease communities (‘LLCommunities’), we must steer ourselves clear of this Near Perfect Storm, or as some opine, Grand
C o n s p i r a c y; or perish! But, how to do so?

Since we continue to await word, plans, and action from elected and salaried leaders of our two national advocacy bodies, within the Washington, DC beltway, we must, by default, rely on grassroots initiatives, and rumors of political and regulatory measures, for hope, if not faith, a new or revised Business Model is in the offing. A Business Model that’ll 1) attract favorable and consumer – favored transaction financing for our type factory – built housing, oft sited in professionally – managed, multifamily rental communities; and, 2) consequently, ‘Save Our Industry!’*2 In the meantime, we wait….

So, what is today’s ‘warp and woof’ of inter – segment threads connecting grassroots initiatives and rumors cum reality of political and regulatory measures?

Any talk of a new or revised Business Model, for this industry and asset class, will be for naught if the HUD Code manufactured housing industry doesn’t, once and for all, decry its’ recent past mantra: ‘Bigger Boxes = Bigger Bucks!’ Then, publicly and forthrightly, seize the initiative and proffer a workable definition and description of ‘affordable housing’ &/or ‘housing affordability’, applied to those features (e.g. low cost per square foot, transportability, energy efficiency, and more) characterizing contemporary HUD Code manufactured housing! *3

Next? Manufacturers of HUD Code manufactured homes. As has been pointed out in The Grissim Report, many many HUD Code housing firms went out of business during year 2009; or have been changed, maybe forever, by dint of merger and absorption (a.k.a. consolidation); and in some cases even new ownership, e.g. Fleetwood Enterprises now Fleetwood Homes, owned by CAVCO; & Champion Enterprises, acquired out of bankruptcy by three investors.*4 Only one mega firm remains intact, controlling 48+/- percent of the national market share of this unique type factory – built housing. So, how will all this pencil – out during the months ahead? Depends on several factors: availability of chattel (personal property) financing – or some other novel approach to this business perpetuation necessity; states implementation of the federal S.A.F.E. Act (i.e. Safe And Fair Enforcement of Mortgage Licensing); and, what restraint of trade measures one or another agency or department of the federal government applies, or does not apply, to the ongoing consolidation among HUD Code housing manufacturers.

Manufactured housing (nee street) retailers, whether independent or company stores. Had hoped to have Big News for you today, in this arena. However, due to a local power failure in central Indiana last Friday, I was unable to effect the telephone call many hope will spark a phoenix – like rejuvenation of the housing ‘distribution’ segment of our ‘double dual industry’. In the meantime, the in – house marketing of new Community Series Homes (‘CSH’), via Business Development Managers (‘BDM’), existent at several dozen HUD Code home manufacturing firms, is generally proceeding according to plan, with some plants – we’re told, shipping as much as 50 percent of their new home production into LLCommunities!*5 And frankly, as far as can be ascertained, ‘company MHRetailer stores’ are doing as well or poorly as their manufacturer bosses allow. It’s the plight of the 10 percent remainder of independent MHRetailers (as compared to the number selling Land & Home packages in year 2000) that’s motivated the birth of MHIDEA, to rally and organize these MHBusinessmen and women throughout the U.S.*6 Let’s hope some exciting Big News will headline next week’s Blog posting here at community-investor.com/blog! Where’s MHI’s National Retailers Council division in this mix? At present, they aren’t. All the initiatives cited earlier in this paragraph, e.g. CSH, BDM, & MHIdea, have been grassroots in nature. Hopefully MHI’s NRC division will climb aboard the MHIDEA bandwagon, if and when it pulls out of the barn to begin its’ work rejuvenating the distribution segment of the MHIndustry, and supplementing the marketing of new homes into LLCommunities!

Landlease community owners/operators. Much has been penned of late, about what is generally the healthiest of all MHIndustry segments. You’ve heard or read the drill. Today, nearly all owners/operators, certainly property portfolio ‘players’, actively market, sell, and frequently self – finance new and resale homes on – site! The Success Formula? Used to be simply, ‘Maximum Income + Minimum Expenses = Max ROI! Now there’s this corollary: ‘Recession proof property + Ability to add value = More than Survival; and if not greedy, Financial Success!*7 Sure, there’re properties (often larger ones) going back to lenders these days, either in forbearance (think ‘tied up in CMBSs’), or foreclosure, as REO (‘real estate owned) assets.*8 But there’s usually a sorry story behind those reversions, and much of the time it has to do with raising rental homesite rents to much higher than justified levels in the local housing market. *9 Besides the self – help measure(s) described in this paragraph, probably the best things the 50,000+/- property strong asset class has going for it, are MHI’s National Communities Council (‘NCC’) division, and the Urban Land Institute’s Manufactured Housing Communities Council (‘MHCC’) de facto Think Tank for both the HUD Code Manufactured Housing Industry & the LLCommunity asset class. And in the case of MHI’s NCC division, the sooner it hires a capable, asset class – experienced, highly motivated executive to devote 100 percent of his/her time to growing membership, and providing valuable services, to property owners/operators, the brighter our collective future will be!

And there’s more. Not even talked about in this blog, is the present need for MHIndustry & LLCommunity elected and salaried leaders to come together to parse some pretty serious questions. On the manufactured housing side; how much longer is it going to take for MHI to get off its’ duff and establish/nurture a viable secondary market facilitating the sale of resale homes? This means some difficult decision – making relative to how manufactured homes are valued for marketing and sale (e.g. ‘book value’ vs. ‘comp value’); encourage multilist use (Made easier, of late, by U.S. Supreme Court’s direction to National Association of Realtors® to open MLS to our brand of housing); as well as use of escrow accounts and realty – type ‘closings’ when consummating deals; and, probably most controversial of all, require home sales staffs to be licensed real estate salespersons and brokers, in states where they operate! Did I just hear a primal scream out there? I truly hope so….

It’s also high time to address the oft extreme disconnect between the 1) well – designed, attractive and professionally – managed, family and 55+ LLCommunities, and the 2) often old and functionally obsolete, unattractive, and poorly managed (if managed at all), multifamily hovels perennially giving our contemporary, quality, attractive, ‘green’, energy efficient, non – subsidized, transportable, factory – built housing a bad bad name, and ugly ugly social image in most local housing markets, on TV, in novels, and on Broadway! Are you on board to address the issues just described in these two paragraphs?

As a related aside; the serious questions described in the previous two paragraphs demonstrate why Manufactured Housing Association for Regulatory Reform (‘MHARR’) has not been, is not, nor will ever be – sans a major change to its’ restricted membership base (i.e. Non – manufacturers need not apply!), in a leadership position to Save Our Industry! Until, as MHARR puts it, aftermarket issues – like the ones just described, are resolved and corrected, manufactured home owners are handicapped when ‘buying up’ into a new home (i.e. One more new home shipment for a HUD Code manufacturer!), since their present dwelling has likely depreciated in value; and, why should lenders extend favorable chattel financing terms on home deals to be sited in substandard properties, poorly managed by passive investors, and subject to landlord whims? Keeping federal regulators at bay, protecting the intrinsic affordability of our unique brand of factory – built housing, is simply one, albeit important, part of our overall challenge!

Well, that does it for this week. Hopefully one or more of these revelations, and restatements of hard truths, has motivated you to become part of the solution to Save Our Industry! and not continue to sit back on your haunches as part of the problem. Don’t forget; if a business owner and or executive active in any segment of this ‘double dual industry’, NEXUS is US! So, as such, respond directly to this Blog with our ideas, comments and suggestions via one or another of the contacts listed in the End Notes to follow!

Next step? While we collectively continue to await ‘words, plan and action’ from MHARR & or MHI, perhaps we should begin talking now, about a third National State of the Asset Class (‘NSAC’) caucus.*10 What say You; at the Nexus?!

***
End Notes.

1. ‘double dual industry’ refers to HUD Code manufactured housing’s distinct ‘manufacturing’ and ‘distribution’ systems; and, landlease community raw land ‘development’ and ‘investment/property management’ perspectives.

2. Manufactured Housing Association for Regulatory Reform (‘MHARR’) @ (202) 783-4087: Danny Ghorbani; and, Manufactured Housing Institute (‘MHI’) @ (703) 558-0678: Thayer Long. Are you a direct member? If not; join today!

3. Much of this work has already been published in HOUSING AFFORDOGRAPHY, ‘Study of Affordable Housing Formulae & Measures of Housing Affordability’, PMN Publishing, IN, 2008; to wit: Housing Expense Factor, Housing Opportunity Index; Housing Wage; and other parameters.

4. The Grissim Report. (360) 683-1458 & http://grissimreport.com

5. If you’d like a FREE list of the 33+/- BDMs presently marketing HUD Code homes, in behalf of their firms, to LLCommunity owners/operators nationwide, call the MHIndustry HOTLINE: (877)MFD-HSNG or 633-4764 and request it. And while phoning, ask for Don Westphal’s seminal article describing the nature of CSH!

6. For more information, go to MHIdea.org (apology for incorrect web address cited in last week’s blog posting).

7. ROI: ‘Return On & Of Investment.

8. Commercial Mortgage – Backed Securities

9. For a Do It Yourself forms designed to calculate the appropriate rental homesite rent in any local housing market, using AMI (Average Median Income) and or AGR (Average Gross Income of an individual or household); as well as the ‘affordable’ and ‘risky’ price points on any new or resale manufactured home in or outside a LLCommunity, phone (317) 346-7156, and request FREE copies of the EQUALIZER worksheet, and the new ‘Ah Ha! & Uh Oh!’ multipurpose form.

10. Brief description and history of the National State of the Asset Class (‘NSAC’) caucus. An informal grassroots movement comprised initially of landlease community owners/operators; but now, also HUD Code housing manufacturers, who gather when there’re enough significant national issues afoot to warrant a one or two day caucus attracting seriously interested and already successful businessmen and women. First caucus was held 2/27/08 in Tampa, FL., and agreed on Five Action Areas (For a list of these foci, read 21st annual ALLEN REPORT, p. 6.). Second caucus, titled: an Historic SUMMIT Meeting, between LLCommunity owners/operators & HUD Code home manufacturers, was held 2/27/09 at the RV/MH Heritage Foundation Hall of Fame, Museum & Library facility in Elkhart, IN. That’s where those two major segments of the industry relearned, after a nearly 30 year hiatus, to work together to ‘sell new manufactured homes into landlease communities’! Can you imagine what might occur if we gathered, once again, to address the issues, questions, and challenges described in this blog posting?

*****

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