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

The New Old Model for Manufactured Housing Finance!

“In 1999, only a few of the 500+/- portfolio owners/operators of landlease (nee manufactured home) communities engaged in on – site marketing, sales and self – finance of resale manufactured homes. Virtually no one sold & self – financed new manufactured homes on – site. However, ten years later – by end of 2009, most did so,
to the tune of $ 3 ½ +/- billion dollars – in contract sale ‘paper’ carried by these owners/operators!” To learn why, read the 21st annual ALLEN REPORT (a.k.a. ‘Who’s Who Among Landlease Community Portfolio Owners/operators Throughout North America!’). *1

In the meantime, how ‘bout manufactured housing chattel (personal property) finance of new and resale home transactions outside landlease communities? If you truly don’t know, ‘it’s nigh nonexistent TODAY (March 2010)’, except from what’s generally referred to as The Big Four, along with some lenders in various local housing markets. *2

So, what is this New Old Model for Manufactured Housing Finance? *3

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The 20 year (i.e. 1979 to 1999 +/- ) business model, of relying on outside lenders to handle all or most landlease community manufactured housing financing, is long gone! This reality was confirmed during an October 2009 meeting, in San Francisco, CA., of the industry and asset class’ de facto Think Tank, Urban Land Institute’s (‘ULI’) Manufactured Housing Communities Council (‘MHCC’). At that time, a 13 point ‘Baker’s Dozen’ of focus areas was identified and articulated per how LLCommunities looked ten years ago (1999), today (2009), and possibly ten years hence (2019). One focus area had to do with chattel (personal property) finance of new and resale home transactions on – site. Their prediction for this focus area in 2019? ‘Chattel $ on – site via (local) lenders and (excess) cash flow’ only! The other dozen focus areas? Read the aforementioned 21st annual ALLEN REPORT.

Despite what you just read, know there’re several quiet but concerted efforts afoot in Washington, DC., to improve the chattel finance climate relative to HUD Code manufactured housing and the landlease community asset class. First; contact the Manufactured Housing Institute (‘MHI’) to learn of their initiatives: (703) 558-0678, Thayer Long; then the Manufactured Housing Association for Regulatory Reform (‘MHARR’) @ (202) 783-4087, Danny Ghorbani. Second; know there’s ‘a consortium of major LLCommunity (portfolio) owners working hard to get FHA, Fannie & Ginnie Mae to increase their support for consumer financing to the MHIndustry’, in part, by broadening lending standards to ensure low – cost financing is readily available to worthy consumers who meet down payment and income standards. And third; there’s now a fledgling body of independent MHRetailers intent on rejuvenating their heretofore dying segment of the industry; visit MHIdea.com. Fourthly; there’s a printed work being prepared, hopefully in time for sale and distribution at MHI’s annual Manufactured Housing Congress in mid – April in Las Vegas, NV., tentatively titled: The MH $$$ Primer, ‘All You Ever Wanted to Know About Manufactured Housing Finance But Didn’t Know Who to Ask!’ Will also be available via this website hosting the Official MHIndustry & LLCommunity Blog. But even with all that said…

Today, many LLCommunity owners/operators continue to engage in what some psychologists call ‘magical thinking’; believing the manufactured housing industry’s decade long doldrums (i.e. 1999 to 2009) will magically end (somehow), and past normalcy will return! Another reality that flies in the face of such wishful thinking, is that even if a revised FHA Title I program emerges, it’ll enable third party chattel lenders (.e.g The Big Four) to service only a small percentage of would be homebuyers who should be our customers. This because of tightened qualifying requirements for would – be borrowers, and so many borrowers with already bruised credit incurred during recent and continuing times of economic stress.

Bottom line? LLCommunity owners/operators, not presently engaged in self – finance of homes sales transactions on – site, are going to have to get over lingering fears of this new old business model, and get actively into the fray, or remain on the sidelines unable to facilitate filling vacant rental homesites with new or resale homes, to ‘keep the site rent meter running’.

As was pointed out earlier, most property portfolio owners/operators now self – finance, and many (most) have built loan portfolios of significant size, some valued at millions of dollars apiece. Unfortunately, some, if not many, have patterned present day policies and procedures (i.e. business model) on ways lending was effected during the 1960s and 1970s; meaning, most of these loan portfolios have little liquidity, as they are of questionable legality, noncompliant with contemporary lending regulations, and often not properly underwritten. This reality is oft compounded by the presence of rental units, rent – to – own and lease – to – own homes, as well as retail installment sales contracts, effectively tying subject homes to the LLCommunity proper, consequently lowering the overall investment value of the income – producing property!

The alternative to the ‘old business model’ per se? Create a captive finance company, as automobile manufacturers did decades ago, and as others have done in other business types. *4

A captive finance company is different from the heretofore described ‘buy here – pay here’ (process), since finance actions are effected by a separate legal entity functioning apart from the MHRetail or landlease community operation. This approach limits liability, is easier to keep legal, simplifies compliance simpler, and is often less costly. So, where’s a captive finance company to get its’ funds to loan on housing transactions?

Some LLCommunity owners/operators borrow money against their assets, even their income – producing property(ies), to fund home loans, or make loans out of the property’s excess cash flow. Real estate mortgagees (i.e. lenders) worry such practices dilute the overall value of the realty asset, and favor situations where homeowners/borrowers/site renters are committed, at least in part, to a separate finance company; not a scenario where site rent, and home payments are all rolled up into one interrelated financial package.

The aforementioned alternative is to establish an independent, but related finance (captive) company that raises its’ own capital and operates in a professional manner. Since the subject company makes the loan, there is no need for a ‘buy here – pay here’ presence in the LLCommunity, and therefore, nothing to ‘disclose’. Because the firm is indeed separate, it will normally operate on its own merits, meaning it will professionally underwrite its’ loans, and carefully observe the legalities and compliance issues, as well as strive to make a genuine profit.

So, if a LLCommunity owner/operator, where does this presentation of our industry and asset class’ new old model for manufactured housing finance leave you? If this author/blogger can be of assistance, in any way, don’t hesitate to respond to the blog proper, via our website: community-investor.com, or phone (317) 346-7156.

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NEXT WEEK. No promises; but unless something of greater importance or timeliness intervenes, watch this blog for a probable call for a third National State of the Asset Class (‘NSAC’) caucus sometime during 2010, or early 2011 if we can afford to wait that long.

This NSAC suggestion was proffered at the conclusion of a recent FOCUS Group gathering of LLCommunity owners from six states, meeting in Ruskin, FL. The first NSAC caucus convened in Tampa, FL. @ 2/27/08; a second, titled: an Historic SUMMIT Meeting, between HUD Code manufacturers and LLCommunity owners/operators occurred 2/27/09. This one? To accomplish something many have talked about ‘for years’, but have never had to brass to address collectively, i.e.

• Decide on our own (i.e. MHIndustry & LLCommunity segments),once and for all, a workable definition of ‘affordable housing’ &/or ‘housing affordability’, then apply appropriate descriptive terms and characteristics to those types of HUD Code manufactured housing design/production/distribution, applicable and marketable as such! It is past time for our industry to finally seize the high ground of ‘affordable housing’ via marketing and image improvement, and DELIVER!

• Again, once and for all, aggressively address the oft extreme disconnect between the 1) well – designed, attractive and professionally managed, family and 55+ LLCommunities, & the 2) often old and functionally obsolete, unattractive and poorly managed, multifamily hovels perennially giving our contemporary, quality, attractive, ‘green’, energy efficient, non – subsidized, transportable type factory – built housing a bad name & social image in most local housing markets!

• Decide now (2010) is time to establish and nurture a viable secondary market for the sale of resale homes, relative to valuation, multilist access, and transactions effected by licensed/certified realty professionals, using escrow accounts and realty – type ‘closings’!

Any of these areas ‘hot buttons’ for you, pro or con? I surely hope so; and if so, let me know! That way you won’t be left out when a third NSAC caucus is scheduled. Otherwise, you have only yourself to blame for not being involved in the now national effort to Save Our Industry! If you don’t know about this growing initiative and movement, scroll back through the blog archive at this website (community-investor.com) to ‘ManuFractured Housing C o n s p i r a c y or near Perfect Storm Sequel’ and previous blog postings. And if you’re reading this, thinking one or another national MH trade or advocacy bodies will (eventually) ‘take the lead’ in addressing the three pivotal matters, and more, just described, then you’ll likely wait too long. Remember; at the rate of decline in HUD Code housing shipments experienced during 2009, by year 2020 – only ten years hence, total shipments that year will number 225! Can we afford to wait any longer to address this industry’s core challenges? I think not, and hope you agree!

Respond directly via this blog posting, email: gfa7156@aol.com, or the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Better yet, let the elected and salaried leaders at MHI and MHARR know your opinions and feelings on these matters pro and con!

*****
End Notes.

1. To obtain a copy of the ALLEN REPORT, phone the MHIndustry HOTLINE: (877) MFD – HSNG or 633-4764. Available for $250.00 per report, or ‘free’ with $134.95 subscription to the new Allen Letter professional journal (12 issues).

2. The Big Four: 21st Mortgage Corporation: Tim Williams @ (800) 955-0021; Triad Financial Services, Inc.: Don Glisson, Jr. @ (904) 223-1111; C U Factory Built Lending, LP: John Harcher @ (216) 533-4797; & U.S. Bank – Manufactured Housing finance: Scott MacFarlane @ (501) 978-1020.

3. The following paragraphs were prepared from material supplied by Kenneth Rishel of Precision Capital Funding @ (217) 971-3968

4. Next Captive Finance workshop is scheduled for Dallas, TX, on 11 & 12 May. For information: kennethrishel@capativefinance.net

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

ManuFractured Housing C o n s p i r a c y or Near Perfect Storm Sequel…

‘Hey, shoulda, woulda, coulda, folk, it’s high time to stop making excuses ‘bout your facilitating our industry’s soon demise, & support some practical enabling solutions’

Here’re responses to last week’s blog posting: ‘ManuFractured Housing, circa 2020 or before, by dint of a Grand C o n s p i r a c y or Near Perfect Storm?’, from:

“Well crafted and follows the logical path to (manufactured housing) destruction. REAL housing builders sell and construct in accords with their buyers needs and desires, not to their own dreams of bigger baths and kitchens, greeny things, and fancier ‘stuff’. Monuments are for looking, not living. We need a low priced product for landlease (nee manufactured home) communities and scattered site purchases, along with competitively – priced components, to help site builders do more for less!” NB (lightly edited. GFA)

to

“Don’t blame the manufactured housing industry’s decline on a c o n s p i r a c y; blame it on apathy and greed! And this isn’t gong to change until our industry is imbued with some really serious, professional, responsible entrepreneurs able to effect a social cultural environment where our homes and residents are no longer considered inferior” EH

So, is it too late to ‘Save Our Industry!’? Maybe not, if heretofore ‘shoulda, woulda, coulda’ folk get up off their individual and corporate duffs to expose, neutralize, and effectively counter manufractured housing’s grand c o n s p i r a c y ; or if you prefer, salt the storm clouds of this ‘near perfect storm’, by doing the following and much much more…*1

Blogger’s Note. If you’re new to this blog dialog, and are already lost regarding the
c o n s p i r a c y and storm talk of which we speak here, relative to the HUD Code manufactured housing industry, STOP now and read last week’s blog posting identified in the opening sentence of this posting! Go to community-investor.com/blog

Following suggestions, prescriptions, strategies, and courses of action have been articulated and recommended by manufactured housing businessmen and women caring greatly about the present & future prospects of this industry & these respective segments:
Housing manufacturing/distribution, OEM and aftermarket suppliers, chattel and real estate mortgage lenders and brokers, MHRetailers, service firms, landlease community owners/operators, and state manufactured housing trade and advocacy associations.

MANUFACTURERS and LANDLEASE COMMUNITY owners/operators together.

This from a veteran industry observer (not me): “I understand manufacturer resentment (towards bureaucrats) and their need to combat it through the MHARR, but they need to understand the future of the industry is 10 times bigger than just fighting bureaucracy! *2 They need to join forces with landlease community owners/operators, MHRetailers, and lenders, to strategically create a new brand for manufactured housing – just like Starbucks is doing.” *3

We started down this cooperative path during 2008, when Steve Quick, BDM & ‘MHIndustry’s Person of the Year 2010’, of Fleetwood Homes, brought representatives from these two segments together for several in – plant FOCUS Groups, where home design, features and pricing were openly discussed. Then, on 27 February 2009, 100+/- HUD Code home manufacturers and landlease community owners/operators gathered at the RV/MH Heritage Foundation facilities in Elkhart, IN., for an Historic SUMMIT Meeting, and decided to ‘move ahead together’. An enduring result of that summit was the naming of nearly three dozen Business Development Mangers (‘BDM’), manufacturer marketing executives, who immediately started building their firms’ market share of new homes being shipped into landlease communities for marketing, selling, and when appropriate, self – financing. Today, several factories ship at least 50 percent of their production into this renewed and cooperative market! For a free, comprehensive, and up – to – date contact list of all BDMs, phone (317) 346-7156.

Next significant and somewhat parallel development, relative to this key inter – segment cooperation occurred as several Midwestern states (IN, OH & IL) planned and hosted day long Super Symposiums, where BDMs and landlease community folk gathered for home sales and finance seminars. Jim Keller, veteran manufactured housing specialist with Indiana’s IMHA/RVIC, was the first to plan and host these events during 2009. When new HUD Code homes, specially designed for in – community placement, were added to the mix at the 18th annual International Networking Roundtable in Chicago, and at a similar GMHA – hosted event in Forsythe, GA., during the Fall 2009, the program morphed into a ‘Super Symposium & Showcase of Homes!’ Next such event is scheduled for 30 & 31 March 2010, in Albany, NY. Interested? Phone Nancy Geer at (518) 867-3242. Be there! I will be! Has your state gotten onto this promotional bandwagon? Perhaps you should more than suggest they do so, the sooner the better!

A third manifestation of manufacturer and landlease community cooperation occurred, again during the aforementioned International Networking Roundtable, during a wide ranging discussion of what specially – designed homes, for landlease community placement should look like and contain, by way of specifications and features. Consultant Don Westphal suggested manufacturers and landlease community owners/operators henceforth refer to this variety of specialized product (e.g. singlesection and multisection models), collectively, as Community Series Homes or CSH, a new trade term that has stuck. In fact, when one contacts any of the aforementioned 30+ BDMs, and mentions Community Series Homes, he/she knows exactly what you’re looking for in a new HUD Code manufactured home! For more information on CSH read the January 2010 issue of the Allen Letter professional journal (317) 346-7156, or phone Don Westphal @ (248) 651-5518 and ask him how this differs from the Community Series Home of the 1990s.

And, it appears there’s a fourth manifestation of manufacturer and landlease community cooperation in the works: in – house manufacturer programs featuring floor plan and retail (chattel/personal property) financing, for either favored landlease communities (e.g. property portfolios buying multiple homes at a time), and or long time, valued customers. Actually this is not such a new concept, just not widely known or publicized. During the next few weeks, as details of these manufacturing/financing – and sometimes, ‘captive insurance’ programs (e.g. in TX & IN, for starters), are documented, they’ll be shared in this blog column! So, continue to visit community-investor.com/blog every Monday to learn more and more….

LANDLEASE (nee manufactured home) COMMUNITIES on their own…

Marketing, selling and self – financing new and resale home transactions on – site? Then, by all means, take the time to do it right at each of the three stages of the process! Don’t even start marketing new or resale residences until calculating the affordable ‘price point’ for your local housing market, defined by postal zip code (Using the Area Median Income or AMI, available at zipskinny.com), and or Annual Household Income (‘AHI’) of prospective homebuyers, either individuals or households, who walk in the door of your on – site Information Center! Don’t know how to do this? Visit the Manufactured Housing Institute’s website for the National Communities Council (‘NCC’) division: mhcommunities.org and read ‘Setting Right Site Rent & Housing Price Points’ in the Community Connections newsletter featured there. Or, telephone Thayer Long at (703) 558-0678 for assistance in accessing this very helpful ‘How To’ piece. Same about rental homesite rates! Rent rate must be in sync with the local housing market, usually 1/3rd the amount charged for largest conventional apartment unit available in same local housing market, or face being ‘priced (rent wise) out of the market’, or, just as bad, force prospective homebuyers to buy less house than otherwise possible. For ‘free’ copies of two recently updated, enabling do – it – yourself forms, ‘The EQUALIZER Formula’ & the ‘Ah Ha! & Uh Oh! Worksheet!’, telephone (317) 346-7156.

NOT interested in marketing, selling and or self – financing new and resale homes on – site in your landlease community? Then relearn the fine, but since year 2000, ‘lost art’, so to speak, of ‘Caring and Feeding MHRetailers!’ Seriously. Prior to year 2000, or thereabouts, when third party chattel (personal property) home financing ‘went away’, thanks to widespread abuse during the previous decade, landlease (nee manufactured home) community owners/operators routinely – if they really cared about achieving and maintaining high physical occupancy on – site, visited all local, reputable, MHRetailers (nee street or boulevard dealers), each month, with one agenda in mind: ‘Be the first, and hopefully only, landlease community a MHRetailer would have in mind whenever he/she sold a new or resale manufactured home!’ How was that accomplished? Well, just showing up and being friendly, was usually a major jump on one’s competition. But, add to that:

• Leave a supply of well – designed and attractive business cards in a highly visible location within the retail sales center! Really skilled property managers always sought to make their card a ‘keeper’, by putting a sketch map on the back if property was off the beaten path; a list of five to 10 reasons to move into their particular property, even a mini – coupon offering ‘One Month Free Rent – once home is installed on – site and skirted.’ – with an expiration date. Get the idea?

• Leave a supply of well – designed and attractive tri fold brochures in a highly visible location within the retail sales center! Use two or more photos of really nice homes on – site (Oft times, Home of the Month contest winners who’ve granted permission to showcase their home!), along with a sketch map on how to access the property, a list of reasons for considering said community, any move – in incentives presently in place, and certainly all appropriate contact information – particularly a website address if available.

• Prepare a photo collage on 2’X3’ or larger, heavy gauge cardboard or thin plywood. Here the property can really shine! Use 5X7, even 8X10 color photos (Again, taken of Home of the Month contest winners!). Mention any move – in features. Maybe even add a pocket, of some kind, to hold a supply of tri fold brochures. Of course, before going to all that expense, secure MHRetailers permission to put this in a high traffic area at the salescenter. While maybe best to mount this on a wall, using a small easel just inside the salescenter door works well too. Also decide which MHRetailers to do this with; one or all, if interested?

• Occasionally obtain ‘premium gifts’ bearing the property’s name, logo, and some contact information, for distribution to local MHRetailers. Possibilities include: coffee mugs with trigger handle, plastic pencil holders and matching tablet holder (good combination if you own/manage two properties needing homes on vacant sites), paperweights, and a personal favorite: either leather or vinyl covered 8 ½ X 11 tablet holder with inside pockets – and property’s logo embossed on outside or inside front cover. As MHRetailer is demonstrating product, carrying ‘your’ notebook, what will likely be the first landlease community he/she thinks of when a customer indicates they’re ready to buy? The one embossed on the nice notebook, holding some of your business cards and or tri fold brochures on the inside. Best of all; this really works!

• Invite MHRetailers, one at a time, to visit the subject landlease community! Drive them around the property, pointing out all its’ positive features. Take them to lunch; advance your business relationship! And, when needing outside judges to select Home of the Month Contest winners, invite these same MHRetailers to return and do this honor…after using editor of local newspaper and mayor of the town.

• Yes, and there’s even more a conscientious landlease community owner/operator can do to ingratiate (or, in one significant way, alienate) oneself with local housing market retailers. In the first instance, make referrals to MHRetail salescenters whenever possible; clearly know which way the ‘supply and demand’ wind is blowing, relative to whether local practice smiles or frowns upon ‘bird dog fees’ between parties – and specifically who said fees should be paid to when earned. And in the latter instance (alienation), while it probably goes without saying, Know that if the LLCommunity Routinely Markets & Sells New Homes On – site, There Generally Won’t be Much in the Way of Move – ins Coming From Local MHRetailers! This stems from their fear of losing qualified customers to the community, when referred prospective homebuyers visit on – site to select a rental homesite.

INDEPENDENT MHRetailers

There’re approximately 10 percent remaining independent MHRetailers from HUD Code manufactured housing’s last heyday, a too short – lived renascence, occurring roughly between 1994 and 1998 or 2000. At the time, many independent MHRetailers were acquired by mega – manufacturers, in a mad grab for market share and self – preservation. Many or most of the absorbed salescenters are shuttered today; and some of the firms that exercised the ill – advised acquisition strategy are in bankruptcy, or now part of other manufacturers. Many MHRetailers answered the siren song, to become general contractors, and compete for market share with site – built housing developers, believing the ‘bigger box = bigger bucks’ land – and – home mantra was the sure route to financial success. And today, while many of these salescenters too are shuttered, other MHRetailers have adjusted to changing market and financial conditions and survived. A major difference, between now and back then? While every local housing market is different, in a number of ways, there’s really only a modicum of MHRetailers routinely chasing after landlease community placements; in part, because so many properties – particularly those in portfolios, are marketing, selling and self – financing new and resale home transactions on – site; and frankly, many MHRetailers are still enamored with the land – and – home business and or have forgotten how to engage in landlease community infill.

What to do about this near – survival state of affairs? Well, the company stores (i.e. MHRetailers owned and or closely affiliated with one or two of the remaining major HUD Code home manufacturers) will likely survive, given their symbiotic relationship with manufacturers. But what about everyone else?

While there’s been a National Retailers Council (‘NRC’) in place, with the Manufactured Housing Institute (‘MHI’), for nearly as long as the aforementioned NCC, until the NRC became a full – fledged division within the institute, it was unable to join direct dues paying members. While that’s changed, and the council cum division is growing in membership size, albeit slowly; now a new and separate initiative is afoot, proposing a more aggressive stance, representing independent MHRetailers, more so than ‘company stores’. For more about this ‘alliance of smaller HUD code home manufacturers, independent MHRetailers, and the suppliers who serve them’, visit MHIdea.org/What Now. Add to this mix, some cutting edge chattel finance thinking by a third party finance firm, along with specialized seminar offerings teaching attendees how to raise housing finance funds from private investors, how to prepare for impending finance regulatory restraints; and the seeds of a MHIndustry rallying opportunity are present!

FINANCE.

OK, almost everything that precedes this paragraph is for naught, without reliable, affordable, continuing sources of funds for chattel (personal property) finance for new and resale manufactured housing transactions. At this writing, FHA Title I remains a ‘pipe dream’ smoked by GSE’s reluctant to connect with our unique brand of factory – built housing. Just about ‘the only game in town’ is the self – finance reality, a.k.a. ‘captive finance’, engaged in these past ten years by landlease community owners/operators using excess cash flow from their properties, growing – among the 500+/- portfolio ‘players’ alone, from a few million dollars in ‘carried paper ’in year 2009, to more than 3 ½ billion dollars by the end of 2009. *4 And there’s now also the new opportunity, hinted at in the previous paragraph, to learn How To raise investment funds to finance home sales transactions in the MHRetail salescenter and or landlease community business environments.

*****
Next week’s blog posting (#76), will feature ‘A non – FHA Title I Model for Manufactured Home Finance’, along with practical suggestions for national initiatives to Save Our Industry from the Grand C o n s p I r a c y or Near Perfect Storm! A couple salient hints: In part, these suggestions will involve, once and for all, getting a firm handle on the slippery concept of ‘affordable housing’ & ‘housing affordability’, ideally leading to a true and timely Ah Ha! epiphany we should and can parlay as ‘the compelling reason prospective homebuyers should look to HUD Code manufactured housing first’! And, to grow ‘that brand excitement’ it’ll be absolutely necessary to finally have a working secondary market in place wherein present manufactured home owners can effectively market their homes when preparing to buy new! What’s that secondary market to look like? Well, guess you’ll have to read blog posting # 76, or one to follow!

Just in case you don’t yet realize it; those of us who work fulltime, especially those who own manufactured housing – related businesses and income – producing properties, are living in truly exciting and challenging times! There’s nothing ‘fun’ about what we’re going through right now. But unless you’re ready to ‘throw in the towel’, and I – for one, hope you are not, it’s by thinking, sharing, working together via this Official MHIndustry & LLCommunity weekly blog, the monthly Allen Letter professional journal, the Allen CONFIDENTIAL! business newsletter; along with communication media from MHI, emails from MHARR, Dick Moore’s INDUSTRY PERSPECTIVE, and other on and offline avenues, that we’ll be able to work together towards the common goal to Save Our Industry!

Caution! Be aware of new names, and heretofore unknown entities, suggesting their ‘fresh blood’ and claimed expertise, are the answer to manufactured housing’s woes. We’ve all heard that siren song before; but where are those distracting sea nymphs today? Yes, there is indeed, good, new, even valuable information, products and services available to us today; simply, use wisdom when sorting out and evaluating golden opportunities, ability, experience and motivation – from dross, on the part of those offering answers….

Do continue to voice responses to these blog postings, making helpful suggestions, sharing good ideas, and generally keeping me informed, the way you have been doing to date – and we’ll be a long way towards that highly worthwhile, self – preserving end: Save Our Industry! As many of your peers have already done, once and for all, separate yourself from the ‘shoulda , woulda, coulda’ crowd!

End Notes.

1. ‘shoulda, woulda, coulda’? ‘We ‘shoulda’ done something ‘bout HUD Code manufactured housing’s problems before this; and we ‘woulda’, if we’d had united national leadership and employed sufficient resources, so we ‘coulda’ fought cost – adding regulatory encroachment, & design/build affordable, quality, energy efficient, green, non – subsidized, transportable housing for our traditional clientele, versus. competing for market share with expensive site – built housing!

2. Manufactured Housing Association for Regulatory Reform

3. Quoted from blog # 70: ‘Stealth Starbucks & ManuFractured Housing!’ During mid – 2009 “…Starbucks tried to avoid being judged by its’ own label by opening its’ first unbranded coffee shop. The ‘stealth Starbucks’, as the distinct Seattle outlet immediately became known, is decorated with ‘one of a kind’ fixtures and, unlike regular Starbucks shops, customers are invited to bring in their own music for the stereo system, and their own pet social causes for the message board. The only hint of branding is the fine print on the backs of menus. ‘Inspired By Starbucks.’ After spending two decades trying to blast its’ logo onto every conceivable surface, Starbucks was now trying to escape from its’ own brand!” This passage in turn quoted from ‘No Logo (the book) at 10’, in Baffler magazine.

4. Source: 21st annual ALLEN REPORT, a.k.a. ‘Who’s Who Among Landlease Community Portfolio Owners/operators Throughout North America!’ Published in January 2010 issue of new Allen Letter professional journal. Available for $250.00 per copy, or ‘free’ with a $134.95 annual subscription to the newsletter. Telephone MHIndustry HOTLINE: (877)MFD-HSNG or 633-4764 to subscribe.

ManuFractured Housing, circa 2020 or before,

by dint of a Grand C o n s p i r a c y or Near Perfect Storm?

…oft whispered but rarely penned, till now…

OK, here it is! The grand c o n s p i r a c y or, if you prefer, ‘near perfect storm’, to regulatorily and financially ease HUD Code manufactured housing out of existence, out of the factory – built housing milieu altogether! This is not a novel intrigue or surprise economic event for the manufactured housing industry. Nor should said
c o n s p i r a c y, if indeed that’s what it is, be taken lightly because it’s been hinted at before. As’ The Near Perfect Storm Manifesto’ theorized recently; housing shipment – wise, we’re rapidly winding down to ‘zero HUD Code manufactured homes before the end of the present decade’! More on this dismal prediction later.

Disclaimer. This grand c o n s p i r a c y or ‘near perfect storm’ divulgence
was researched and penned using written and verbal communications with numerous and various manufactured housing industry business leaders and successful entrepreneurs. Intentionally, no interviews were conducted on
this timely and sensitive subject, with any elected or salaried leaders of the Manufactured Housing Association for Regulatory Reform (‘MHARR’) or Manufactured Housing Institute (‘MHI’)! GFA

From an historical perspective, manufactured housing’s grand
c o n s p i r a c y has been whispered since the late 1970s, coinciding with implementation of HUD’s infamous national, federally preemptive, performance – based building code circa 1976. Upon entering the manufactured housing business in 1978, it was ‘splained’ to me, that left unchallenged and unchecked, HUD’s design demands would price this affordable housing product right out of existence! Well, that didn’t happen. If anything, manufactured housing industry aficionados managed, to their credit, to make ‘lemonade out of a (regulatory) lemon’, by taking national housing market advantage of the federally preemptive nature of their unique factory – built housing product, to Sell More Homes! One might also view this beneficial switcheroo as the industry’s first inaccurate weather warning of an impending storm.

Next indicator of a grand c o n s p i r a c y, or ‘storm warning’? This from an industry veteran who participated in an early futile attempt to achieve housing equality: “You’re right about the c o n s p i r a c y; we learned it for sure when we lost ‘frame removal’ in the early nineties. Not sure we can stop it (c o n s p i r a c y), unless we’re an economic power to deal with – which we are not. So, probably the ax (sic) will fall, unless we move ourselves first, and become a part of traditionally supplied housing.” NB. The ‘frame removal’ defeat, along with the Hiler Amendment (The industry’s first legislative initiative to modernize the HUD Code) falling to internal political skullduggery, were motivating precursors to drafting and enacting federal legislation: the Manufactured Housing Improvement Act of 2000, a.k.a. ‘MHIA@2000’, designed and intended to give HUD Code manufactured housing a level playing field with traditional, site – built housing. More too on ‘MHIA@2000’, later.

Then there’ve been these perennial questions: Which has served manufactured housing better or worse; the watchdog (Some opine ‘junkyard dog’) tactics of ‘manufacturer only’ focused MHARR & its’ lone executive over several decades; or, repeated and ongoing attempts at regulatory – related consensus – building by MHI, representing all segments of the industry (Referred to, by MHARR, as ‘the aftermarket’) & its’ four different executives during the same period of time? And what overt and covert roles have either or both advocacy bodies played, and or continue to play, relating to grand c o n s p i r a c y maneuvering or stormy weather making? *1

Finally. Manufactured housing shipments, during the period 1978 thru 1998, remained stagnant at about 250,000 homes per year, never again coming close to the 575,940 shipped during pre – HUD Code 1972. And it wasn’t long after HUD Code housing’s mini – renasance in 1998, when 372,843 new homes were shipped, that chattel (personal property) financing all but disappeared, and grand c o n s p i r a c y talk resumed as ominous storm clouds gathered, all the while we worked (reselling) our way through hundreds of thousands of repossessed manufactured homes.

The first time manufactured housing c o n s p i r a c y appeared in print, that I’m aware of, occurred a couple years ago when Tennessee MHRetailer and landlease (nee manufactured home) community owner Dick Moore, in his business newsletter INDUSTRY PERSPECTIVES, floated the alleged connivance on everyone’s mind. And guess what? Besides relief that someone finally said and penned the ‘C’ word, there was near immediate response from one MHIndustry leader (manufacturer), intent on disabusing Dick of any possibility of such a radical notion! And frankly, he might have been successful to that end, if it didn’t turn out his overture was followed by not one, but two additional personal assurances from other executives within the same large firm. Hmm. The c o n s p i r a c y plot appeared to be thickening…

Be that as it may, what are indeed key factors apparently contributing to manufactured housing’s grand c o n s p i r a c y or ‘near perfect storm’ talk today? Not in any priority order, here’re some obvious and obscure indicators:

• Department of Housing & Urban Development (‘HUD’) now headed by a political appointee tapped from the real estate mortgage (Think conventional single and multihousing finance here versus chattel or personal property variety) side of the national housing scene. And HUD continues to stonewall, after ten years, Congress’ intent, in the ‘MHIA @ 2000’, to have a non – career appointee head the Manufactured Housing Consensus Committee (‘MHCC’), not a career bureaucrat! Now, for the first time in its’ history, the MHCC is devoid technical expertise from the aforementioned MHARR or MHI trade bodies! And there’s more that could be said of HUD’s role in this sorry scene….*2

• Trend analysis of the 39.2 percent decline in new home shipments, from 2008 thru 2009, when applied to years remaining until 2020, demonstrates only 215 HUD Code homes will be shipped that year! If so, the manufractured housing industry will be dead! Or, a similar declining trend analysis, among years 2007, 2008 & 2009, demonstrates, by year 2020, we’ll be shipping only 3,000 new homes. At that level, the manufractured housing industry might as well be dead! Get the point?

• There’re three laws ‘on the books’ that aren’t presently functioning as intended. One has to ask ‘Why’? Why no full implementation of MHIA@ 2000? Why no progress on Duty to Serve (private financing)! And why the perennial delaying tactics, effectively neutering FHA Title I, now a.k.a. ‘The $$$ Promise that isn’t & likely never will be!’ Grand c o n s p i r a c y anyone? Or, just another indicator of a ‘near perfect storm’?

• Then there’s the nearly 50 percent national manufactured housing market share; increased national political influence per presidential election of 2008; an effective cornering of remaining chattel (personal property) finance market; and, recent foray into realty mortgage (Think landlease, nee manufactured home, communities!) financing – all by one extended family of firms! The seminal question that begs asking: ‘Is all this Good or Terminal for the HUD Code manufactured housing industry as we have known it till today?’ *3

• Add to this, curious but quiet corporate memberships and past employment relationships, among various national homebuilder, real estate, and manufactured housing advocacy bodies, and one wonders where personal and business loyalty might end, before career legerdemain and or political skullduggery begins…

With all that said, what’re possible or probable consequences of manufactured housing’s grand c o n s p i r a c y or ‘near perfect storm’? Clear and murky at the same time; depending on how this potentially nefarious cabal or severe weather event plays out by year 2020 or before!

• HUD has long given the impression there’re other (public) housing avenues it’d prefer to focus on, than continue being the sole federal regulatory agency overseeing an entire business model. Ask yourself, ‘When was the first (and last) time you saw, heard or read of HUD overtly promoting manufactured housing as this nation’s unique homegrown brand of truly affordable, quality, energy efficient, green, transportable, non – subsidized housing?’ Possible end game here? ‘Ah, sweet relief for HUD!’ – and this aftermath of the Law of Unintended Consequences: ‘HUD – related bureaucrats face unemployment when manufactured housing factories close!’

• Certain homebuilder groups have long been a nemesis to factory – built housing, particularly when it comes to protecting highly paid union carpenters from market incursions by inexpensive industrialized housing and housing components. Balderdash you say? Don’t forget the lost off – frame battle of the early 90s cited earlier. The end game here? ‘Ah, no more ‘affordable’ manufactured housing competition. Let housing costs rise again, again, and again!’

• Realty specialists. Hey, I’m in the real estate business and know firsthand how little love is lost between that business model and affordable housing providers; those who deign to help common folk become homebuyers of inexpensive (up to 50% less cost per square foot than new conventional stick – built housing, not including land cost), attractive, comfortable, energy efficient, often factory – built housing! And since the U.S. Supreme Court recently opened the door to manufactured housing marketing access to local realty board Multilisting Services; well, here’s this end game: ‘Ah, there goes the competition on two fronts!’, when HUD Code manufractured housing disappears by Year 2020!

Any idea how ‘what’s left of the manufractured housing industry’ will look post grand
c o n s p i r a c y or after the ‘near perfect storm’ passes? Easy to envision four or more possibilities:

• Like the automobile industry at the turn of the 20th Century, further consolidation among today’s remaining home manufacturers will segue from several ‘dozen’ to maybe a few; specifically, one very large firm and a dozen regional, privately – owned, solid enterprises. They’ll continue to ‘ship’ (Don’t look for even these survivors to ‘keep score’ by tallying ‘home sales’) say, 40,000+/- HUD Code homes per year post 2020.

• Wholesale switch from HUD Code manufractured homes to modular homes

• Enter some sort of hybrid home; borrowing features from the HUD Code housing product, mating same with characteristics of other types of factory – built housing, as local or national building codes allow or demand. But no more HUD Code manufractured housing market stigma!

• And this, not – so – novel suggestion, by another 30 year industry veteran intent on surviving the grand c o n s p i r a c y or ‘near perfect storm’: “Assume the manufractured housing industry settles into two manufacturing segments, driven by available financing. Primarily, multisection product for land and home installation (conventional realty financing); and, singlesection product for siting in landlease communities, i.e. filling vacant rental homesites and upgrading older homes, using chattel (personal property) financing.” SR. (Lightly edited. GFA) But ‘Ah, there’s that perennial bugaboo: financing by type, availability, and volume.’

Any other positive hopes or thoughts for the future that have potential to Save Our Industry!? Sure. But you’ll have to read next week’s blog to learn what they are….

Well, there you have it. This is how manufactured housing’s grand
c o n s p i r a c y, or, if you prefer, ‘near perfect storm’ is viewed by numerous Free Enterprise businessmen and women from grassroots housing markets across this nation, active in all segments of the manufactured housing industry and landlease community real estate asset class. What can you do to comment on this sad state of affairs; maybe proffer an idea or two to ultimately ‘Save Our Industry!’ (‘SOI’)? We’d like to know! Respond to this blog via email, or phone the MHIndustry HOTLINE: (877) MFD – HSNG or 633-4764 or (317) 346-7156.

End Notes.

1. One industry observer opines: ‘Unfortunately, MHARR manufacturers care more about combating bureaucratic BS than saving the industry; (thus preventing) an entire industry (from) addressing its’ strategic future, because they cannot get past their anti – HUD/bureaucrat resentment.’
‘
2. An industry observer, describing the department, suggests: Under performing bureaucrats are shipped to the MH office, the equivalent of HUD Siberia. If you were a power hungry bureaucrat in the department, would you want to be assigned to regulating house trailers? That’s how they see it. They do not believe in the real potential of manufactured housing’ (As quality, affordable, green, energy efficient, non – subsidized, transportable shelter alternative for American home buying citizens!).

3. A contrarian view or simple fact? ‘This firm’s execs go to work everyday, driven to beat the competition, and they are winning. This (firm) understands the retail customer, (while most) manufacturers do not. Manufacturers are competent at counting nails per home, not satisfaction per home.’

Important Reminder. This weekly Official MHIndustry & LLCommunity blog posting just tells only part of what you need to know to achieve a level of success during these difficult economic and business times. If not already a paid subscriber to the new Allen Letter professional journal, access the contacts listed in the previous paragraph today! With your $134.95 annual subscription, you’ll receive a Free copy of the 21st ALLEN REPORT (a.k.a. ‘Who’s Who Among Landlease Community Portfolio Owners/operators Throughout North America!’) – which alone sells for $250.00. March 2010 issue of the Allen Letter professional journal will include the ‘12th annual National Registry of Lenders and Brokers Specializing in the Origination of Acquisition & Refinance Landlease Community Realty Mortgages!’ April issue will include the ‘11th annual ‘Who Ya Gonna Call in 2010?’ directory of several dozen freelance consultants working nationwide in manufactured housing and the landlease community real estate asset class. No other manufactured housing industry trade publication provides more actionable, accurate, and timely business information, by writers active in the industry and LLCommunity asset class, than the new Allen Letter professional journal!

Postscript. If you plan to be in Massachusetts on March 25th, or Springfield, IL., on April 29th, join me at a no – host networking dinner, along with a dozen or more individuals registered to participate in the Manufactured Housing Manager professional property management training and certification class the next day. Not only will there be superb interpersonal networking opportunities at both evening events, but an Open Discussion of manufactured housing’s grand c o n s p i r a c y or ‘near perfect storm’! Don’t miss this firsthand opportunity to make your views and ideas known about this important period of our industry and asset class history! For details, phone (317) 346-7156. And, if you plan to attend the networking dinner, consider staying over and participating in the MHM class the next day? Only costs $250.00 per candidate. FYI! Additional no – host networking & Open Discussion dinner meetings are being planned in Florida, Indiana, Arizona & elsewhere. Read this weekly blog for details and specific locations, or call…

*****

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

ETAOIN SHRDLU*1

A Potpourri of General, MHIndustry & LLCommunity Signs, Jokes, USPs, Reflections about Data Overload & Excessive Social Networking, and the Presaging of a C o n s p i r a c y Theory Many Believe but None Articulate

A (billboard) Sign of the Times’, observed in downtown San Francisco, CA., during the Urban Land Institute’s (‘ULI’) Manufactured Housing Communities Council (‘MHCC’) ‘Think Tank’ meeting in San Francisco this past Fall: ‘I was closer to retirement at 40 than I am at 50!’ How many of us can identify with that?

Joke of the Times. Is your local banker pining for ‘the good old days of 3 – 6- 3’? You know; when he borrowed money at 3%, loaned it out at 6%, and was on the golf course by 3PM.

What’s your business USP? That’s the well known abbreviation, in business marketing circles, for Unique Selling Point, Proposition, Perspective, or Promise! Synonyms? Sex appeal, or ‘Selling the sizzle and not the steak!’. For dentists? ‘Gentle & painless!’ For Starbucks coffee? ‘Handcrafted beverages!’ For churches? ‘Seeker sensitive!’ For Certified Financial Planners or CFPs? ‘Wealth preservation!’ For Don’s Gun Shop? ‘Hi, I’m Don, and I just love to sell guns!’ For multifamily rental properties? ‘Superb curb appeal!’ For manufactured housing? ‘Half the per square foot cost to build! And your landlease (nee manufactured home) community? Fill in the blank: __________

“I see (Twitter) as a kind of time suck I don’t need anymore of. Just too much “I got the most awesome new pair of sweatpants.”’ per Brian Williams opining at time.com. And this from David Hornik, upon observing groups of tech veterans and computer gurus carrying ‘good old – fashioned notebooks’ into meetings, forsaking the digital world for analog. He asks, ‘Why?’ Their answer? Data overload from emails, social networks, corporate wikis and portals, and knowledge management systems! Advantages of notebooks? Faster than laptops; unlimited storage; direct sunlight not a problem; only power management issue is when a pen runs out of ink; no requirement for connectivity; not susceptible to viruses; and highly portable. Hornik’s conclusion? “I’m a firm believer in a laptop in every room and a smart phone in every pocket. But, when it comes to keeping track of priority information, it appears notebooks are becoming the tool of choice for technology’s elite.” (USAirwaysmag.com) Next? Maybe resurgence of The Lead Pencil Club of years past?

Forewarned is forearmed. Be aware of niche investors and ezines, as well as freelance writers and teachers sans bona fide ‘cred’ in the MHBusiness! Some examples. ‘…we lease the park (LLCommunity) from you based on current economics, and then buy your park when the market returns at a price more in line with what you feel it’s worth. In the meantime, we buy and bring in homes to fill vacant lots (rental homesites) and address any other management issues.’ Hmm. Or, how ‘bout self – proclaimed experts, with shaky credentials, telling us online how to operate our businesses? And, for that matter, writers and teachers who ‘no longer practice what they preach’ (i.e. No longer own or actively manage LLCommunities, but continue to ‘tell and teach’ us how to do so.) Here’s how to separate the wheat from the chaff. Ask, how long they’ve been in the MHBusiness and in what capacities, and if they still are; then, request non – partner references along with contact information. And here’s the truth – teller, if claiming regional or national presence in the MHIndustry and or LLCommunity asset class: ‘Which state and national trade and advocacy organizations do you actively support with dues membership, and participate in their industry events as a ‘presenter’?’ For example: MHI & the NCC, ULI & the MHCC, NSAC caucus, annual INRs, even the MHCongress.

Up until now, many have talked about it, but no one I’m aware of, has written about it. What? The grand c o n s p i r a c y to regulatorily (Yep, that’s poetic license.) ease ‘HUD Code manufactured housing’ out of factory – built housing altogether, in favor of – well, you’ll just have to wait to read about that in next weeks blog! All I’ll tell you now, is what’s motivated me to bring this perennial c o n s p i r a c y theory cum reality (?) ‘out of the closet’ into broad daylight! Remember ‘The Perfect Storm Manifesto’ premise blog posting # 61 during November 2009? “Imagine No New HUD Code Homes Manufactured in Year 2020!” Well, that premise spawned strong reaction during the intervening three months; vast majority of which, via email, letters and personal as well as telephone conversations, has agreed with that sad inevitability, even some questioning whether the MH demise date might not be closer to 2015 – if we don’t get access to reliable, copious amounts of chattel (personal property) financing soon! Well, upon returning from MHI’s disappointing (For me, anyway.) Winter meeting in Savannah, GA., last week, a colleague demonstrated how taking 2009 year end total of 49,789 HUD Code homes shipped, then applying the negative performance trend of 2008 thru 2009, on out to year 2020, shows a total of only 215 new HUD Code homes to be shipped nationwide that year.*2 Now that’s motivation to talk about what else, besides lack of chattel financing, might be involved in HUD Code manufactured housing’s continuing death spiral. So, read more about the c o n s p i r a c y in next week’s blog….

In the meantime; have you read the 21st annual ALLEN REPORT yet? It’s available only from PMN Publishing, for $250.00 per copy; or ‘free’, when you subscribe to the new Allen Letter professional journal! That’s right, this ‘Who’s Who Among LLCommunity Portfolio Owners/operators Throughout North America!’ is available nowhere else. (317) 346-7156. And the 12th annual National Registry of Realty Lenders Specializing in LLCommunity Acquisition Mortgages & Refinance will be included as a lagniappe in the March issue of the new Allen Letter professional journal. Order it today!

*****
End Notes.

1. ETAOIN SHRDLU. ‘The twelve letters most often appearing in printed text, arranged in order of decreasing frequency. E, the commonest, appears an average of once every five letters.’ From The Dictionary of Wordplay by Dave Morice.

2. Using negative trend numbers between years 2007 & 2008 & 2009 & 2010, the year 2020 nationwide HUD Code home shipment total is 3,000; way down, again, from the 49,789 shipped during all of year 2009.

*****

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

MY EPIPHANY

‘It’s the Issues, Stupid!’ & sadly, more…

What’s an epiphany? It’s ‘a sudden, intuitive perception of or insight into reality or the essential meaning of something, often initiated by some simple, commonplace occurrence.’ Random House Webster’s College Dictionary

First the issues, both macro (‘large, great’) and micro (‘very small’) in size & import.

The macro issue as of February 1, 2010? Amazingly, it’s the same issue today (Now, read this carefully…) as in 1990, when the Hiler Amendment (Our industry’s first legislative initiative to modernize the HUD Code) fell to political skullduggery (Guess by whom?); a decade later, when the Manufactured Housing Improvement Act of 2000 passed, but has never been fully implemented (e.g. Still awaiting the much needed non – career administrative appointee!); and now, another decade later, as manufactured housing ‘fights’ (Wrong word choice there; think instead…) ‘flounders’ toward Free Enterprise oblivion, with bane – like assistance from federal regulators and career bureaucrat(s) at the Department of Housing & Urban Development. The macro issue?

Modernize and segue HUD Code manufactured housing away from its’ trailer heritage of the 1960s,’ mobile home’ image of the 1970s, and manufactured housing identity of the 1980s & 90s, to compete on a level playing field with every other type housing in the U.S.! This is the macro issue that’s failed to materialize in years 1990 and 2000; and now, with dawning of year 2010, unless elected and salaried leaders of this industry bring us together collectively, effectively, and soon, to face known challenges, the micro issues before us today, we’ll indeed fail to survive by year 2020; or as has been said frequently of late: ‘Imagine No New HUD Code Manufactured Homes by Year 2020!’. With that said, what’re the micro issues? List begins here, in no particular order:

• Non – Career Administrative Appointee by HUD
• Residential Fire Sprinklers in Manufactured Homes & Other Types of Housing
• Installation Program & Installation Standards Implementation
• DOE Oversight re MH Energy Standards (Think loss of federal preemption!)
• MHCC Member Composition (No MHARR or MHI staff presence; more later)
• Lack of Secondary Market for Manufactured Housing Sales
• Carried Interest
• Finance (Consumer/Inventory); Fannie Mae & Freddie Mac; FHA Title I Reform
• MHCC/HUD Program
• GSE Duty to Serve Provision
• Weather Radios/disaster Alert Systems
• Formaldehyde – CARB standards
• Energy Tax Credit Extender Legislation
• Pre – 1976 Replacement Home Legislation
• FEMA Emergency Housing Specifications
• FEMA Accountability/Disposal of Temporary Housing Units
• Homebuyer Tax Credit
• Water Submetering
• Frost Free Foundations

So, where to go from here? It’s pretty simple really. Besides motivating and directing our elected and salaried leadership – no small challenge in itself*1; focus their and our attention and action, not inaction, on the macro issue; as well as, identifying, evaluating and confronting, not evading, the micro issues, as new information and legislative initiatives become known and evolve over time! And it’s vital these micro issues be widely and regularly publicized and openly discussed; but no longer in confusing point – and – counterpoint MHARR – MHI Press Release battles played out in the trade press! Speaking of the trade press. Guess how many were represented at MHI’s Winter meeting in Savannah, during early February? One. Our last advertising – supported tabloid, though registered as a Special Guest, was absent; as were all the online ezines and reports. Only the Allen Letter professional journal and the Allen CONFIDENTIAL! business newsletter were represented!

Speaking of the Allen Letter; if we, as an industry, are to continue floundering with two disparate national advocacy bodies attempting to do manufactured housing’s bidding inside the Washington beltway, let’s regularly post their views on macro & micro issues, side – by – side, in the professional journal! The first example of this surprisingly simple, but illustrative, exercise occurred in the January 2010 issue of the business newsletter. What happens if one or both bodies decline to publish their position on a micro issue? Think about it. February’s issue of the new Allen Letter professional journal introduces M.H. Ronin, penname for an articulate, 30 year experienced, and highly motivated observer (No, not me!) of the manufactured housing scene. His/her job is to take MHARR & MHI’s published public positions on macro & micro issues, parse them, then attempt to ‘make sense’ of them for you and me!*2

And here’s the ‘sadly more’ part, referenced in the blog title; my take on what was experienced and not experienced at MHI’s Winter meeting in Savannah, GA., on 1 & 2 February 2010. Bottom line first? I’m no longer confident MHI is worthy of efforts and resources to keep it going as the manufactured housing industry’s primary advocate! Huh? You read that right; so now, by way of explanation:

• Only 108 MHI members, non – members and guests registered in advance to attend this meeting. There were several ‘no shows’, and a few add – ons, like Brian Mills, real estate mortgage originator, now correspondent with Centerline Capital Group in St. Petersburg, FL., and the only RE lender present! MHI’s 2009 Individual (print) Directory contains 650 entries. And did you know? MHI’s 2010 Directory will likely be in electronic format? Anyone ask your preference?

• Manufactured Housing Division meeting featured an agenda containing ten specific micro issues and this macro one: ‘Other Goals & Priorities for 2010 for Industry Recovery!’ Care to guess which issue wasn’t even mentioned during their meeting? Yep; the macro one which coulda – woulda – shoulda address The Near Perfect Storm Manifesto’s premise: ‘Imagine No New HUD Code Homes Manufactured by the Year 2020!’ Why? My guess is manufacturers simply didn’t care to discuss the matter. After all, they shipped 49,000+ HUD Code homes during all of 2009 didn’t they?

• Then there was the less than stirring monologue by William W. Matchneer, III; Associate Deputy Assistant Secretary for Regulatory Affairs & Manufactured Housing at the Department of Housing & Urban Development. Challenged on at least three issues: 1) HUD’s failure to appoint a non – career administrator to replace him; 2) restaffing the Manufactured Housing Consensus Committee (‘MHCC’) so there’s no MHARR & MHI technical staff representation on this body for the first time since its’ inception ten years ago; and 3) ‘Why change the rules by which the MHCC functions now?’ Responses? Not worth repeating. But will tell you this. Post – luncheon remarks were more telling than those from the podium, e.g. “A code body (‘MHCC’) needs an industry expert (staffer from MHARR or MHI) on board to examine and communicate the impact of code changes on the MHIndustry!” Guess which advocacy body no longer has anyone on staff with technical expertise? And this, from individuals who insisted on speaking privately: “Thanks for asking the hard questions most of us don’t have the guts to ask!” Faint comfort there.

• Other voiced but unanswered questions from this same meeting? ‘Where’s the much ballyhooed Manufactured Housing Congressional Caucus of years past? Why aren’t they helping us now with our macro and micro issues?”

So, where does all this leave us? For starters, and it pains me to announce this, but I’m not going to waste time and resources organizing and effecting the ‘hinted at’ meeting on February 26th, 2010, at the RV/MH Heritage Foundation Hall of Fame facility in Elkhart, IN. Many reading this blog have been agitating for a National State of the Asset Class (In this case, industry wide) type gathering, a la 2/27/08 in Tampa, FL., to caucus, discuss, agree upon, and widely publish a grassroots – generated Plan of Action to Save Our Industry! So, why no meeting? For the first time in 30 plus years, I’m convinced we do not have national advocacy bodies capable or willing to effectively ‘Carry our coals to New Castle!’, even if we were to create and codify what entrepreneur businessmen and women in this industry and asset class demand they do on our behalf!

Here’s one further example addressing that very point. Is it the Manufactured Housing Association for Regulatory Reform (‘MHARR’) that’s the answer to manufactured housing industry and landlease community asset class travails inside and outside the Washington beltway? No! And here’s why. Read the following paragraph, quoted directly from an MHARR Press Release dated 3 February 2010, one day after MHI’s Winter meeting concluded; then answer the pointed question posed at the end:

“It is…not surprising an increasing number of grassroots industry members
(particularly MHRetailers and LLCommunities), baffled by such delays and
tired of excuses from half of the industry, in Washington, D.C., have become
disenchanted (when) an industry, such as manufactured housing, a leading source
of affordable, non – subsidized housing and jobs throughout the United States,
is being ignored, neglected, penalized and discriminated against in the Nation’s
Capitol – and are looking for strong pressure to be applied in Washington,
D.C. to break this logjam.” (lightly edited. GFA)

The pointed question. ‘How can MHARR apply ‘strong pressure’ on anyone’s behalf, outside HUD Code home manufacturing circles, when every other segment of the industry (e.g. suppliers, financiers, MHRetailers, LLCommunities, and state MHAssociations, a.k.a. ‘the aftermarket, in MHARR’s vernacular) is pointedly excluded from membership in that organization?!’ Accordingly, sufficient ‘strong pressure’ simply isn’t going to occur or come from one shrinking segment of the manufactured housing industry!

So, what’re your views on these end time events, issues and circumstances plaguing the HUD Code manufactured housing industry; and by extension, the landlease community real estate asset class? I’d like to know! Contact me via this website, respond to this blog, or simply phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or (317) 346-7156. Again, there’s no meeting planned for 26 February 2010; unless, something unexpected, inspiriting, and compelling (to do so) happens in the meantime..

*****
End Notes.

1. One of the unsolicited responses, to this leadership issue, first raised in the blog: ‘Sarah Palin & ManuFractured Housing!’ put it succinctly: “MHIndustry leaders, & by default – our industry per se, are care – less & leaderless.”

2. To obtain a Free copy of January’s new Allen Letter professional journal, &/or to subscribe to the business newsletter – to also receive a Free copy of the 21st ALLEN REPORT, a.k.a. ‘Who’s Who Among Portfolio Owners/operators of Landlease Communities in North America!’ (By itself, the report retails for $250.00), phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or (317) 346-7156, or respond directly to this blog via the community-investor.com website. Never heard of a ronin before? It’s ‘a covert operations specialist with no governmental ties.’ Can you think of a better handle for a columnist writing about a federally regulated industry? Neither could I!

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

Milking, then & now…

goes by several names; avarice, covetousness in Holy writ, and simple old fashioned greed. As Random House Webster’s College Dictionary posits, ‘…to get something from; exploit: The swindler milked her of all her savings.’ It also occurs when a pettifogger bills clients ‘whatever the traffic will bear’, rather than what’s honest, fair
and earned.*1

Well, landlease (nee manufactured home) communities, over the years, have experienced various nefarious milkings, as in ‘pulling excess profits out of the income – producing property type’, as well.

During the early days of landlease community (‘LLCommunity’) consolidation, roughly from the late 1970s through 1980s, when there were many half full properties on the market, it was common for frustrated, ailing, and near retirement owners/operators to sell their realty investments to buyers, sometimes limited partnership syndicators. These buyers would frequently meet the seller’s top dollar price expectation, while insisting on a low down payment and lengthy contract term; reminiscent of the acquisition mantra: ‘You can name the price or the terms of the deal, but not both!’ Then, after ‘closing’, the now somewhat wealthy, former – but still on the accountability hook, LLCommunity owner/operator, would oft ‘move away’ to begin his or her new, and usually comfortable, lifestyle.

In the meantime, the individual or syndicator buyer nunc owner would start managing the property, sometimes from afar, as a passive investor. And early on there’d usually be attempts to fill the remaining vacant rental homesites with ‘repo’ units, that were in abundance at the time, either as ‘rentals’ or contract sale units, to ‘get the rent meter running’. But along the way, and for various reasons, this flurry of activity tended to slow. Critical operating expense bills would continue be paid, albeit slowly, while routine maintenance became deferred maintenance; and soon, the departed seller nunc retiree – if still alive, would see contract payments arriving later and later, until sometimes stopping altogether. In the meantime, milk money going to the contract buyer (i.e. new owner) would continue, even increase for awhile, until the ‘still on the accountability hook’ former LLCommunity owner/operator filed suit and received a court order allowing him or her to take the property back – usually in far worse condition than when it had been sold ‘for more than it was really worth’. And another property had been milked, through excess profit – taking, by both owners, one more than the other.

So, do similar scenarios play out on a larger scale, say with privately – owned and publicly – owned LLCommunity portfolios? Yes, but in different ways and generally on a grander scale.

LLCommunity asset class consolidation has been underway for more than 30 years. The headcount of known LLCommunity portfolio owners/operators numbered slightly more than 25 in the mid – 1980s, when the Roulac Real Estate Consulting Group of Deloitte Haskins + Sells published an annual list of these ‘players’ in Roulac’s Strategic Real Estate newsletter. Today, however, according to the 21st annual edition of the ALLEN REPORT (a.k.a. ‘Who’s Who Among LLCommunity Portfolio Owners/operators in North America!’), published January 2010, that number has mushroomed to 500+/- in 2009 & 2010.*2 What’s a portfolio owner/operator? For the purposes of the ALLEN REPORT, it’s a business entity, whether a sole proprietor, limited or general partnership, private corporation, or a real estate investment trust (‘REIT’), that owns and or fee manages a minimum property portfolio of five LLCommunities and or at least 500 rental homesites.

Milking, on the privately – owned LLCommunity portfolio level, over the years, often began with the acquisition of investment grade properties (i.e. usually more than 100 rental homesites per location, with good physical occupancy, & low operating expense ratios*3), ideally including several in the same or neighboring local housing markets. If not already at a high occupancy level, the new owner often took necessary steps to fill vacant rental homesites; often, in the recent past, with assistance from local manufactured housing retail sales centers (a.k.a. MHRetailers nee street dealers or dealers). Then, once a fairly high level of physical occupancy was achieved, say 95 percent, the property owner would start ‘jacking site rents’, in accords with the old bromide: ‘If occupancy is higher than 95%, the rent level is too low!’ While this max profitability maxim focused on the positive fiscal health of the business enterprise, it overlooked the potential consequences of too high rents, e.g. Higher the site rent, the less home (price & mortgage) prospective homebuyers can afford to purchase, encouraging them to go where there’s ‘more bang for their bucks’! Irregardless; given this favorable ‘Return On & of (one’s) Investment (‘ROI’) window of opportunity, per max occupancy, high site rent, and maximum net operating income (‘NOI’) via trimmed expenses, some portfolio owners frequently refinanced with high percentage Loan to Value (‘LTV’) mortgages, that allowed them to walk away with large amounts of money from the property or properties. This was especially common between 1998, when average national physical occupancy among portfolio LLCommunities was at an historic high of 95 percent, and there was far ‘too much easy money chasing too few deals’, and 2008 when financial markets tanked.

Present day consequences? Given excessively high rents (Defined as exceeding the 3:1 Rule of Thumb, where LLCommunity site rent is more than 1/3rd the monthly rent for largest 3BR2B conventional, non – subsidized apartment units in the same local housing market!), homebuyers no longer could afford even modest sized and priced homes in such an overpriced landlease property, so went elsewhere – especially during the run up of the site – built housing bubble of the last ten years! As a result, physical occupancy plunged to 80, 70, 60 percent and lower; while site rents remained unchanged, even increased in places; and now some LLCommunities, and portfolios of these properties, are going into forbearance or foreclosure, depending on the structure of the underlying mortgage financing! In one recent example, as much by dint of mismanagement as out of sync rent levels, a large LLCommunity that sold for more than $11,000,000.00 less than ten years ago, was recently purchased out of foreclosure for $2,000,000.00 cash.

The contemporary REIT experience, is similar in some ways, different in others. UMH, Inc., in Freehold, New Jersey, was the sole LLCommunity REIT carryover from the 1980s, when the 1990s decade began. During 1994, Chicago headquartered ELS, Inc. (nee MHC, Inc), Detroit’s Chateau Properties, Inc., and Sun Communities, Inc. made their debut, making it four REITs. Three years later, Chateau merged with Denver – based ROC Communities, to more than double its’ size, in terms of rental homesite inventory, changing its’ name to Chateau Communities, Inc. The following year, Clearwater, Florida domiciled American Land Lease, Inc. ‘went public’ with an initial public offering (‘IPO’) of its’ stock.; so, ‘then there were five REITs’. This happy family of five began to fall apart in 2003, with demise of Chateau Communities, Inc., acquired and taken private by Hometown America. The following year, upstart Affordable Residential Communities (‘ARC’) appeared on the REIT scene, but lasted only two years, too taken private, via auctioning of assets and direct purchase, eventually resurfacing and renamed as American Residential Communities, still using the ARC acronym. Today there are but three publicly – traded REITs: ELS, Inc., Sun Communities, Inc., and the enduring, though recently renamed, UMH Properties, Inc. American Land Lease, though still a public company, is managed by Green Courte Partners, LLC., out of Lake Forest, IL. What happened to Chateau Communities, Inc., ARC, Inc., and American Land Lease?

While all three corporate stories vary, some lay a significant part of the blame at the feet of aggressive Wall Street analysts who, via published expectations of continually improving financial performance from REIT LLCommunities, effectively treated and feted these otherwise stable realty investments as ‘growth stocks’, feeding investors confidence that dividends would not only be continual, from period to period, but would increase in amount as well. Such overly optimistic expectations fueled operational cost cutting, aggressive rent increases, search for ‘alternative income to rent’ measures, or AITR, e.g. ancillary services paid for by homebuyers/site lessees; and for a time, a flurry of additional LLCommunity acquisitions, on the part of REIT executives. In time, some of these portfolios overheated, no longer able to sustain the profit pace near – dictated to them by Wall Street denizens; so, either merged with other like firms, experienced disposition, were taken back to private ownership, or effected one or another combination of these strategies.

In the private sector, milking of assets has been similar to that described in an earlier paragraph, the major difference being that of scale. For example, when a property portfolio acquires an otherwise healthy and attractive investment grade LLCommunity for top dollar (i.e. often ‘on the come’, or specifically, ‘on the – expectation of rent increases to – come’); then, take the rental homesite rent level upwards to 50 percent or higher, of what’s being charged for large 3BR2B apartments in multifamily rental communities in the same local housing market, would – be homebuyers, even existing LLCommunity residents, soon figure out it’s more economical for them to live in said apartments, maybe even buy a site – built tract home (until recently), with no down payment requirement and an adjustable rate mortgage (‘ARM’) with extremely low monthly payment for the first year of ownership. Repeat this scenario over as many times as there are LLCommunities in a given portfolio being milked, and one can see how millions of dollars quickly add up.

The challenge for LLCommunity site rents to be kept in sync with local conventional apartment communities is compounded when apartment rent rates are reduced in a given local housing market, almost always indirect response to declining physical occupancy levels – though they prefer to refer to this performance benchmark statistic in terms of ‘vacancy percentage’. Do LLCommunity owners/operators respond likewise? Generally, not. The only rationale, for not doing so, that makes any sense, are couched within these two disparate perspectives: First, since our annual turnover of homes runs only about 5 percent, in most good years, due to size of contemporary homes and high expense to relocate them, homeowners/site lessees tend to be a ‘captive audience’. The other, maybe lesser reason, has to do with the 3:1 Rule. When an apartment community rolls its’ rent back by $60.00/month, the equivalent amount of rent roll back for the LLCommunity in the same local housing market would be only $20.00/month. In the minds, I suppose, of many owners/operators, that’s not a large enough amount to waste time and effort to make the adjustment. Or is it?

Believe it or not, the foregoing is just a pretty good sized ‘drop in the bucket’ where this subject of milking is concerned. Do you have business experience, to this end, you ‘d be willing to share with blog readers, or maybe even in a future issue of the new Allen Letter professional journal? If so, communicate with me directly, via GFA c/o Box # 47024, Indianapolis, IN. 46247, or phone (317) 346-7156, or respond directly to this blog and website.

If you’re with me this far, it’s important you let me know you desire to receive advance notice of future weekly blog postings, and information about upcoming MHIndustry & LLCommunity issues and events. For example; as you read this, during or shortly after the week of 1 February 2010, you should ‘want to know’ what transpired –or, just as importantly, did not occur, at MHI’s Winter Meeting in Savannah, GA. Frankly, and tellingly, there’s going to be only one business press outlet broadcasting and printing that story: this one, and the new Allen Letter professional journal! When I post next week’s blog, on 8 February 2010, advance notice will be sent only to businessmen and women who’ve already emailed me, requesting to be kept on the Blog Posting Blast Email Alert Notice List, and those responding to this specific paragraph in this particular blog! Why the sharp focus? As an industry and asset class we are on the veritable cusp of our collective failure, or a potentially bright future, depending on what we do, or don’t do, during the weeks and months ahead! I only have time and inclination to communicate with peers who care as much about our business future as I do. And, as was hinted at in last week’s blog (Read ‘stealth Starbucks & manuFractured Housing!’), our collective Bottom Line is we need a New Business Model, to convert manufractured into A.C.E. housing or some other improved image and brand presence!*4

Are you keeping 2/26/2010 open on your ‘Save Our Industry!’ calendar?

End Notes.

1. Pettifogger. A mean, tricky, unscrupulous lawyer. Courtesy of Mrs. Byrne’s Dictionary, NJ, 1974.

2. 21st annual ALLEN REPORT available for $250.00 from PMN Publishing via community-investor.com or by phoning the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or (317) 346-7156. It’s ‘free’ with a $134.95 one year subscription to the new Allen Letter professional journal!

3. Physical occupancy = # occupied rental homesites, divided by total # of rentable sites; and OER = either total $ amount of annual operating expenses (or a particular line item from the Industry Standard Chart of Accounts), divided by total $ amount of site rent collected from that particular property. Home sales generally treated as a separate profit center. Allen Model = 40% OER. For detailed information on this strategic subject read, How to Find, Buy, Manage & Sell a Manufactured Home Community (as an Investment), available from PMN Publishing. See previous end note for contact and ordering information.

4. Uniquely Attractive, Cost – Effective residences, American – made, Comfortable & Energy – efficient!

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

Stealth Starbucks & ManuFractured Housing!

Short story how Starbucks is reinventing itself. Lesson for manufractured housing?

During mid – 2009, “…Starbucks tried to avoid being judged by its own label by
opening its first unbranded coffee shop. The ‘stealth Starbucks’, as the distinct
Settle outlet immediately became known, is decorated with ‘one of a kind’
fixtures and , unlike regular Starbucks shops, customers are invited to bring in
their own music for the stereo system, and their own pet social causes for the
message board. The only hint of branding is the fine print on the backs of menus:
‘Inspired by Starbucks.’ After spending two decades trying to blast its logo onto
every conceivable surface, Starbucks was now trying to escape its’ own brand!”

Quoted from ‘No Logo (the book) at 10’, in the Baffler magazine. Vol. 2, No. 1, p.30.

Question: If Starbucks is trying to escape its’ own brand, as good as it is; isn’t it high time for manufractured housing do the same for a better brand?

To help you think through that possibility, here’s our industry’s scenario in three parts:

The Problem!, The Challenge!, The Opportunity!

based on the premise: ‘No New HUD Code Homes Manufactured by 2020!’, and as many of our peers are now saying: the universal distress signal SOS (Save our Ship!) has become, for manufractured housing, SOI (Save Our Industry!). So, with that said…

The Problem has only gotten worse…

While it took brass to go public predicting ‘No New HUD Code Homes Manufactured by Year 2020!’, verbal and written blog response sentiment, by email and phone calls, to this MHIndustry observer and blogger, has been supportive:

“If our industry’s leaders don’t get on the stick NOW, there’ll be ‘No New HUD Code Homes Manufactured by 2015!’

“ManuFractured Housing (moniker) is really cool, and most adequately represents our industry’s current condition!”

And latest year end HUD Code housing shipments for 2009, are running around 46,000; below the predicted 50,000 worst case scenario guestimate earlier in the year, under the 81,889 in 2008; and light years from the 372,843 shipped in 2008.

How, you say, can this be possible? Inaction and misaction in several different ways:

Continued dearth of third party chattel (personal property) financing! Yes, I know you/we’ve heard this before, but that doesn’t make the emergency any less real and serious. But now the tragedy is playing out on not just one, but two fronts, and more:

First; FHA Title I. Ask yourself: ‘How long have we been waiting and waiting for this, hearing one empty assurance after another, from industry leaders and lenders?’ It’s truly become, ‘The promise that isn’t!’ Time has come to learn the real reasons FHA Title I has not, and likely will not, materialize for HUD Code manufactured housing! Accept no rehash of excuses intended to mollify! Some now suggest consolidation conspiracies exist in more than one segment of the MHIndustry, with the nefarious goal of ensuring ‘the survival of one, or a very few, at the expense of everyone else’.

Second; Self – finance. You know, of the ‘captive finance’ and ‘buy here – pay here’ varieties, so commonplace on – site in landlease communities, where new and resale homes are routinely marketed and sold these days. You know, the ‘carrying of paper’ that’s mushroomed from a few million dollars a decade ago, when almost everyone decried the practice given its’ potential to devalue one’s LLCommunity investment upon disposition, to more than $3,500,000,000.00 dollars estimated to be now held among just the 500+/- known portfolio owners/operators of this unique income – producing property type.*1 ‘Ah, but here’s the rub!’ Once states have enacted and implemented their versions of the federal S.A.F.E. Act of 2008, look for this Survival Cum Profitable Business Model to all but disappear.*2 How so? Just look at the state laws, to this end, recently implemented in Ohio and Pennsylvania. Either you’ll be hiring an outside licensed chattel mortgage firm to handle loan origination and servicing functions for you, or you’ll likely find yourself getting licensed as a lender or mortgage broker, and anyone on staff even talking to homebuyers about home finance, being in need of criminal background checks; required training to pass mandatory mortgage licensing tests; and ultimately, formal licensure as a mortgage originator – or more. Reads like low level job security and restraint of trade to me.

And there’s more, much more…

Another growing major problem, has to do with the transfer of regulatory authority over manufactured housing, away from HUD, to other federal agencies and state governments.

Start with the proposed transfer of housing – related energy standards to the Department of Energy or DOE. This is a significant first chip out of the MHIndustry’s preemption protection.

Then comes the water sprinker issue. While an added expense for manufacturers when building a HUD Code home, have LLCommunity owner/operators thought about probable consequences when this regulatory authority segues from HUD to state governments? It leaves the door wide open for the National Fire Prevention Association (‘NFPA’) to lobby all existing homes in LLCommunities be retrofitted with water sprinkler systems! ‘Bye bye’ preemption; ‘Hello’ replacing your underground water system to handle the greatly increased design load!

Are you asking yourself yet, ‘Why aren’t our two national advocacy bodies telling me this? Well, they really are trying to do so, but in different (sometimes conflicting) ways and with different (tones of) voice, bearing with minimal success and results. For example…

Do YOU know about the non – career administrator position being overtly stonewalled by HUD leadership? As long as HUD does so, ‘their (career bureaucrat) man’ Bill Matchneer has effective control of OUR destiny as an industry and YOUR business future! His hands are in every issue just identified, including the S.A.F.E. Act of 2008! Frankly, the appointment of a non – career administrator to shepherd the HUD Code program is Our Last Best Hope & Opportunity to counter much of what’s just been described and much more! And that brings us to…

The Challenge to turn our titanic – like destiny around before…

How? Become informed, become involved, and demand action! In other words, ‘If you’re no longer content to sit back as part of this growing Problem, accept this Challenge, and become an active part of the Opportunity to ‘Save Our Industry’!

By the time you read this blog, it’ll be nearly too late for YOU to make arrangements to attend MHI’s Winter meeting on 1 & 2 February 2010, in Savannah, GA – where HUD’s Bill Matchneer will be a keynote speaker. But try anyway; phone (703) 558-0678 and talk to Thayer Long, MHI’s executive VP, expressing YOUR opinion about the present conditions of, and the probable future of the MHIndustry & LLCommunity asset class. And, if not already a direct, dues – paying member of MHI, sign – up immediately! You’re no help to the industry or yourself, if you attempt to ‘Save Our Industry’! from afar, even via your state’s salaried and elected representatives to MHI meetings! It’s simply not the same, nor nearly as effective, as YOU being present!

If attending the MHI Winter meeting, as I am, go prepared to ask hard questions and demand honest answers. One of the foremost should be, ‘Where’s the much – vaunted Manufactured Housing Congressional Caucus, of a couple years ago, in this regulatory mix?’ Here’s another I’m hearing frequently these days: ‘What individual or individuals effectively shape the regulatory posture and political thrust of the two advocacy bodies in Washington?’ Well, with MHARR, it’s pretty simple. A bevy of small HUD Code home manufacturers give Danny Ghorbani his specific marching orders. MHI? Much more complicated and vague. Its’ 21 member Board of Directors? Highly doubtful, as that’s akin to ‘management by committee’. The recently dollar – empowered National Communities Committee (‘NCC’) division? Maybe in time, but those members aren’t yet knowledgeable of, or sensitive to, the causes, effects and nuances of HUD’s covert maneuverings. One manufacturer? Maybe. MHI’s salaried executive? No; new to the job and responsive to the whims of elected leaders. The few executive committee members of the Board of Directors? Probably. And that’s the point! Give at least five alternatives, how are we, as direct dues – paying members of MHI, to know who really shapes and directs the regulatory posture and political thrust of this advocacy body, along with our collective business futures? I’d like to know; how ‘bout YOU? Other timely and pithy questions? Reread previous paragraphs and zero – in on the issues! Call and ask Danny Ghorbani, at MHARR, for input: (202) 783-4087.

The Opportunity for a new & better future…

New Business Model needed to convert manufractured into A.C.E. housing!*3

It’d be premature here, to introduce anything different from today’s status quo. However, depending on what, if anything – proactive and substantial, comes out of MHI’s Winter meeting, there’ll be two divergent different paths for the manufactured housing industry to consider; one, is to be more united and stronger than we are today! The other? Well, let’s just wait and see, for the time being. Are you keeping 26 February 2010 ‘open’ on YOUR Business Survival calendar?

A hint. One sage MHIndustry veteran recently penned this email message to me:

“I believe HUD Code housing manufacturers, MHRetailers, LLCommunity owners, and financiers need to gather in the same room and be given the Clear Challenge to Work Together! They need each other, even though they often function like they do not. Our business is not particularly complicated. It is – or should be, Customer Driven, not factory or retailer driven, not LLCommunity or financier driven. All four segments of the industry must work together to meet the customer’s need for housing!” NB (lightly edited. GFA)

To which I’d add. This needed revival, restoration, resuscitation, reawakening, and renewal (Or is it rethinking, reinventing, reorganizing?) has not, and likely will not, occur in a regularly scheduled meeting of any formal trade organization or advocacy body. It must be a separate venue, driven by a bona fide industry wide need; in this case, to Save Our Industry! Similar precursors occurred twice during the past two years; first, when LLCommunity owners/operators convened on 2/27/08 in Tampa, FL., to identify and codify focus for the asset class going forward*4; then when HUD Code home manufacturers and LLCommunity owners/operators convened on 2/27/09 in Elkhart, IN., to ascertain what it’d take to sell more new manufactured homes into this unique income – producing property type, than at any time since the early 1970s.*5 Tangible results? You bet! Which begs the question, now – and – again: Will anything proactive and substantial, relative to achieving MHIndustry strategic focus, advocacy unity, and restored vitality, result from MHI’s Winter meeting in Savannah, GA., next week?

In the meantime, feel free to communicate your views to me by replying to this blog, via email: gfa7156@aol.com, MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764, or (317) 346-7156. What do you think manufractured housing’s New Business Model should entail, contain, and do?

Look at it this way. If Starbucks thinks it wise to, at least in part, ‘escape from its’ own brand’, via stealth Starbucks; surely the manufractured housing industry, with shipments as bad as they are today, at a 60 year nadir, should at least consider if and how to escape from its’ image and brand, into one more promising and profitable!

The Countdown nears its climax…

*****
End Notes.

1. See 21st annual ALLEN REPORT, available from PMN Publishing for $250.00 or ‘free’ with a one year subscription to the Allen Letter professional journal @ $134.95/year (12 issues). Just phone the MHIndustry HOTLINE: (877)MFD-HSNG or 633-4764, or (317) 346-7156.

2. Safe And Secure Enforcement of Mortgage Licensing Act of 2008

3. Uniquely Attractive, Cost – Effective residences that are American – made, Comfortable & Energy – efficient!

4. National State of the Asset Class (‘NSAC’) caucus; an international, informal, quasi realty investment and property management body specializing in the landlease (nee manufactured home) community real estate asset class.

5. Historic SUMMIT Meeting

George Allen, Realtor®, CPM®, MHM Consultant to the Factory – built Housing Industry & The Landlease Community Real Estate Asset Class
Box # 47024 Indianapolis, IN. 46147 (317) 346-7156

Living & Working Bass – Ackwards!

A book review accents use of FORM acronym & value of the Golden Rule

David Greene of Greene & Greene, Inc., in Atlanta, sent me Steve Beecham’s book, Bass – Ackward Business: ‘ The Power of Helping Without Hustling’, published in 2009 by Home Town Publishing. I didn’t get many pages into it before recalling similar personal and business relationship cultivating (as in ‘promote the growth of’) styles learned and lived over the years.

“My helping without hustling strategy is bass – ackwards when you compare it to everything I’ve been taught about building a business” – “it’s not about you or your sales; it’s about helping others.” Pp. 9 & 14. (Emphasis added. GFA)

Beecham quickly identifies three components to implementing the bass – ackward ‘helping without hustling’ mindset:

1. Get out of the office
2. Focus on relationships
3. Find a way to help people p.24

And through these steps, Steve emphasizes ‘discovering the person and not the business’, earning – by – serving, rather than expecting or demanding, ‘the right to sell’.

No further into the book than that, I reflected on how some of his principles applied – or should apply, to the way I’m ‘doing business’. That thought stirred the memory of cleaning out a vacant office, 30 years ago, and finding a set of AMWAY cassette training tapes. As I listened to them while driving, I learned the FORM acronym, an effective personal networking guide. Letters were for Family, Occupation, Recreation, & Message; or, a reminder to set a date for next Meeting. How’s it work? Simple. Walk up to someone, anyone, – in this case in a group setting, and introduce yourself, with a Smile on your face and a friendly, but not fierce or wimpy, handshake. Then, after exchanging names, strike up a conversation, by asking about Family (may be single, married, whatever). After talking ‘families’ for awhile, segue to Occupation. Might be a student, stay at home parent, or otherwise. By now, both parties should be fairly comfortable conversing, so ask about Recreation – what do you do ‘for fun’? Then, near the end of the conversation, and depending on what seems appropriate, decide on when to next Meet and continue the friendly conversation; or, if fitting, ease into one’s Message. I’ve been using the FORM technique ever since – and it works! *1

Gotta admit, there’re a couple things in Bass – Ackward Business that gave me pause, since I hadn’t run into them before; like this piece non – footnoted advice @ p.39

“Look people in the EYE. Yeah, and by ‘eye’, I mean their left eye. Typically, when you’re talking to someone about serious matters or business affairs, you look into their right eye. Looking into their left eye communicates sincerity – they feel like you care.”

My immediate reaction: “Who sez?” But, until I can ask the author that question while looking him in the right eye, I think I’ll give it a try next time I’m in conversation with a friend or associate! Hmm. Maybe it’s because the left eye is closer to one’s heart…

Then there’s the Ritz –Carlton illustration. After a few superb guest service experiences during a second visit to a hotel in that chain, Steve asked the front desk receptionist what she thought made the Ritz so special. Her response? “We have a card we all carry in our pocket when working that reminds us, ‘We are ladies and gentlemen serving ladies and gentlemen’. Now that’s pretty nifty. In fact, it reminds me of a similar experience YOU too can have, by dialing (941) 721-0046. The phone will be answered every time, usually on the second ring, by someone ‘with a Smile on their face’, offering this Greeting after Thanking You for calling, then identifying their firm: “How may I Serve You?” Seriously. Place the call to prove it to yourself; better yet, think how You might implement the Ritz-Carlton & Newby Management’s superb customer service techniques as part of your firm’s resident relations program!*2

As I continued to read Bass – Ackward Business, my thoughts turned, time and again, to this writer’s practical application of the Golden Rule, being ‘Do Unto Others as You Would Have Them Do Unto You!’, to the way we ‘do business’. Frankly, too many firms focus on the antithesis Gold Rule; you know, the one that goes like this: ‘He or she who has the gold, makes the rules!’ Sorry to say, we can probably identify more contemporary businesses that appear to ascribe to that scheme (e.g. Predatory lending and Ponzi schemes are just two of society’s present day poster children for that selfish and greedy mindset) than those practicing the Golden Rule in personal relationships and during business dealings. To underscore this truth, the author cites a fairly well known reminder to ‘Use things and love people, not love things and use people!’ Amen.

OK, so how do you get your copy of this pithy little book (97 pages)? Contact Steve Beecham directly at 11855 Haynes Bridge Road, Alpharetta, GA. 30009 or via steve@hometownmoney.com or via www.bassackwardsbusiness.com

*****

Yes, the Countdown Continues…

Last week was a busy one for manuFractured housing and landlease (nee manufactured home) community aficionados. Friday’s GSE mass auction of Katrina manufactured homes was delayed two weeks. So, if you’d like to buy some of these homes for your LLCommunities in the South (word has it they’re possibly not built for northern climates), contact HUD for further information.

HUD assistant secretary for housing & federal housing commissioner David H. Stevens, in a letter dated 11 January 2010, continued to defend his decision regarding how “…it is not in HUD’s or the public’s interest to appoint a non – career Administrator for the manufactured housing program given the current budgetary climate. This is especially true for this program because HUD has capable staff currently fulfilling this important mission.” (Emphasis added. GFA) So, continuing to have HUD’s career employee(s) responsible for administering ‘the best interests of manuFractured housing’, from both regulatory and industry perspectives is in ‘the best interests of whom’? Not the manuFractured housing industry! That’s why YOU, if indeed ‘having skin in the game’ of manuFractured housing, as small business entrepreneur or senior executive, need to be in Savannah, GA., on 1 & 2 February 2010, to hear what HUD’s MHProgram executive, Bill Matchneer has to say & ask your own questions. Phone (703) 558-0678 to register.

Frankly, there’s more to the manuFractured housing saga than we’re being told, or that I’m sharing here. You need to be personally vigilant to learn ‘the rest of the story’! For starters, read a new column appearing in the February issue of the new Allen Letter professional journal, penned by a 30 year veteran of the MHIndustry & LLCommunity asset class. The goal of this new business journalism platform is to record and parse published and often differing views, from MHARR & MHI, attempting to publish full disclosure relative to industry issues – then identify either the ‘right business decision’, or as appropriate, ‘a centrist perspective’. No more should you have to rely on ‘reading this (MHI) here’ and ‘reading that (MHARR) there’. To subscribe, call the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or (317) 346-7156.
BONUS!
21st annual ALLEN REPORT enclosed with January issue of the new Allen Letter professional journal, as a lagniappe (‘freebie’) to subscribers. Or, the ‘Who’s Who Among LLCommunity Portfolio Owners/operators in North America!’ is available, from same contact phone numbers listed in previous paragraph, or this website, for $250.00.

End Notes.

1. More information on this subject in George Allen’s Chapbook of Business & Management Wisdom, PMN Publishing, 2008. (317) 347-7156 ($10.00 postpaid)
2. Six R’s of Effective Multifamily Rental Property Resident Relations: Superb Resident Relations = More Resident Referrals = Long term Resident Retention!

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

Sarah Palin & ManuFractured Housing

‘When Imitation is not a Sincere Form of Flattery!’

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The Countdown Begins….

Mark Twain, in 1888 wrote, “The difference between the almost right word and the right word is really a large matter – it’s the difference between the lightning bug and the lightning.” Same can be true with placement of two consecutive letters in one word; though in the following example, it’s the stark difference between a compelling personal story and political chicanery.

Manufactured housing pioneer, retailer and community owner Dick Moore of Millington, TN., recently got snookered at an airport bookseller’s kiosk. In search of Sarah Palin’s best selling autobiography Going Rogue, ‘An American Life’, he was surreptitiously sold Going Rouge, ‘An American Nightmare’, authored by two senior editors at The Nation magazine, Richard Kim & Betsy Reed. Dick was not happy.

Palin’s 413 page book is graciously “Dedicated to all Patriots who share my love of the United States of America. And particularly to our women and men in uniform, past and present – God bless the fight for freedom.” And it’s a good, positive read to boot!

The editors, in their 320 page attack, offer no such grateful Dedication, just this description of their target: “…a Christian fundamentalist opposed to the teaching of honest sex education in schools and in favor or teaching creationism alongside evolution, a climate – change – denier and government – basher alarmingly ignorant of the world and totally unprepared to be president.” Are they alarmed by and scared of her? You bet! “…this is a woman with at least nine lives. By our count…she’s still got seven left.” In any event, Going Rouge is an apt example of when ‘Imitation is not a form of flattery’.

Had something akin occur when authoring and self – publishing my first book, Mobile Home Park Management, in 1988. The real estate management trade association to which I paid dues, and to whom I’d submitted the manuscript for publishing consideration, instead came out with their own book on the same subject. The justice?
22 years later, Landlease Community Management, in its’ sixth edition, continues to sell well, and is foundation text for the popular Manufactured Housing Manger (‘MHM’) professional property management training and certification program! The other book? Long out of print.*1

And there’s yet a third example of inglorious imitation; but this time around, with the near tragic result of nearly killing – off an entire industry, until it learned to ‘make (housing production) lemonade out of a (regulatory) lemon’; that is, until recently….

It begins with enthusiastic kudos from the Assistant Secretary for Housing Production & Mortgage Credit of the U.S. Department of Housing and Urban Development, (‘HUD’), when speaking to housing manufacturers: “…you set your fourth consecutive annual record, shipping almost 580,000 mobile homes…Your one percent increase in volume during that year stands in start contrast to the 14% drop in single – family, site – built housing starts…I should think (this) indicates a definite trend for the future. Today, mobile homes constitute just about the only true low – cost houses available…which are at the same time decent, safe, sanitary and comfortable.” Sheldon Lubar, March 1974, quoted in ‘A Comparison of Different Dwelling Costs’ Mobile Homes, Housing’s Best Buy, by Carl Edwards, June 1974. (Emphasis added by Edwards)

Well, it didn’t take long for mobile home manufacturing ‘imitators’ schlock product to severely tarnish the present and future reputation of this uniquely American factory – built housing type, to the extent Congress was forced to legislate in behalf of consumers, enacting the infamous HUD Code, effecting implementation during 1976. The same year, Congress mandated changing product’s moniker from ‘mobile homes’ to ‘manufactured housing’. And, as you likely know, the MHIndustry’s annual production was immediately halved to a quarter million homes shipped per year, remaining there for two decades, until experiencing a too brief renascence in 1998 with 372,843 shipments. Today? We’ll be lucky if we can tally 50,000 new HUD Code homes during year 2009.

All this brings us to today, January 2010! Well, guess what? Secretary Lubar’s kudos, relative to true affordability, decency, safety, and comfort of HUD Code housing is as accurate now as in 1974! The problems are: 1) we have yet to figure out how to effectively promote manufactured housing, nationally and regionally, to the American home buying public; 2) establish and support a well – functioning secondary market for the resale of manufactured homes; and, 3) secure sufficient floor plan and retail chattel (personal property) financing for our customers! In short? ManuFractured housing is broken! Even now, is ‘almost too late’ to identify and implement practical, effective solutions to these timely marketing and financial challenges and opportunities. But some are trying, and within 30 days, a way for you to participate as well.

First efforts at solutions appeared almost a year ago, on 27 February 2009, when 100+/- HUD Code home manufacturers and landlease (nee manufactured home) community owners/operators convened at the RV/MH Heritage Foundation’s Hall of Fame, Museum & Library facility in Elkhart, IN. (the ‘birthplace of manufactured housing’), for the first Historic SUMMIT Meeting! Purpose of the gathering? Open lines of communication between these two disparate segments (one manufacturing/distribution oriented, the other realty development/investment focused) of the manufactured housing industry and real estate asset class, to learn what each side ‘needed, wanted & expected’ relative to the design, size, specifications, features, and pricing of the HUD Code housing product. Since that day, nearly three dozen Business Development Mangers (‘BDM’), employed by HUD Code manufacturers, have increased the number of new HUD Code homes sold into landlease communities (‘LLCommunities’). And, at 18th International Networking Roundtable in Chicago, during September 2009, it was agreed by the 200 businessmen and women present, the popular notion (circa 1998) of Development Series Homes be supplanted by Community Series Homes (i.e. smaller, affordable, easily transportable, energy efficient), generally destined for LLCommunity siting! Don Westphal, of Michigan, agreed to serve as National Clearing House for input on this subject. Read his inaugural CSH article in January 2010 issue of the new Allen Letter professional journal.*1

For in depth coverage and review of these and other advances, review archived blogs on this website, especially one titled: ‘Let’s Make History Together!’ Why? Because it contains ‘The Near Perfect Storm Manifesto!’ which introduced the now much talked about premise: ‘Imagine No New HUD Code Homes by the Year 2020!’ Furthermore, the January 2010 edition of the aforementioned Allen Letter carries, in side by side columns, official responses to said premise, by the Manufactured Housing Association for Regulatory Reform (‘MHARR’) and Manufactured Housing Institute (‘MHI’)! Also know, the same issue of the Allen Letter contains a free copy (for paid subscribers) of the 21st annual ALLEN REPORT (a.k.a. ‘Who’s Who Among LLCommunity Portfolio Owners/operators in North America!’); otherwise available for $250.00. *1

The Countdown Begins!

If an entrepreneur or executive businessman or woman, active in the HUD Code MHIndustry or LLCommunity asset class, and sincerely desirous of becoming and being an integral part of a national effort to Save Our Industry!, plan to be present at MHI’s Winter meeting in Savannah, GA., on 1 & 2 February 2010. Here’re at least two reasons:

First; are plans to Save Our Industry! on MHI’s meeting agenda? If so, you must to be present to participate in the discussions! If not; you should be present to ask, ‘Why not?’ Or, has MHI leadership decided the manifesto’s premise: ‘Imagine No New HUD Code Homes by Year 2020!’ is just an alarmist exaggeration, or simply inevitable – hence unworthy of further effort, from either or both national MHIndustry advocacy bodies. Think of this meeting as a weather report and forecast; and you the participant, as a barometer, measuring and reporting the low or high pressure your business interests is/are experiencing at present and what you can reasonably expect in the near future.

Second; William Matchneer, HUD’s Associate Deputy Assistant Secretary for Regulatory Affairs and Manufactured Housing, is MHI’s invited guest presenter at this meeting. Again, you owe it to yourself to be present to hear what he has to say about MHIndustry ills; otherwise you’ll never really know ‘that side of the story’. And if present, ask why HUD appears to resist full implementation of the Manufactured Housing Improvement Act of 2000 (‘MHIA@2000’) – ten years after its’ appearance on the housing scene? And, why the reluctance to appoint a non – career administrator to oversee the work of the Manufactured Housing Consensus Committee (‘MHCC’) pursuant to MHIA @ 2000?. Also inquire about HUD’s position regarding installation of water sprinkler systems in our homes, and why?

Know what it’d take to really make this an open, lively and (hopefully) productive forum? An invitation from MHI, to MHARR’s chief executive, Danny Ghorbani, to attend and participate in dialogue with Mr. Matchneer! Unfortunately, as needed and worthy a stimulus as this would be, it will not happen! Ask me why sometime. Better yet, when you phone (703) 558-0678 to request registration materials for MHI’s meeting, make that suggestion, and watch what happens…

Unable to attend MHI’s Winter meeting in Savannah, GA., but want to support the national movement to Save Our Industry!, hopefully via the efforts of one or more of our national trade advocacy organizations? Then, tell everyone you know, in the MHIndustry & LLCommunity asset class, about this blog. Encourage them to read it and respond appropriate to their circumstances and passion, or lack thereof, about the subject. Better yet, make copies of this blog and circulate them to all your ‘friends in the MHBusiness’, encouraging them to become actively involved as well!

So, what happens after MHI’s meeting in Savannah, GA? It depends on what happens, or doesn’t happen, at said meeting. Was there positive and substantial progress planning how to Save Our Industry!, or was the Winter meeting simply another non – starter? Past blogs have hinted at a new Business Model being articulated for the HUD Code MHIndustry. If you’d like a sampling of raw material submitted and parsed’, to date, by manufacturing/distribution & realty development/investment executives and entrepreneurs around the country, make your request via Reply at the end of this blog. Include your postal mailing address to receive this material. And, as has also been penned before, you might want to pencil in 26 February 2010 onto your business calendar.

The Countdown Continues…

End Note.

1. To order the text, register for MHM program, and or subscribe to the new Allen Letter professional journal, phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or (317) 346-7156.

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

a FOCUS Group opportunity; BLOG Lessons Learned; &,

Two Timely, Pithy Postscripts

‘How the Best LLCommunity Owners/operators Learn Together’;

‘Beware fakers & spammers!’;

‘How to Get Your 21st annual ALLEN REPORT;
&
Recommend ‘How to Save Our Industry from Oblivion by Year 2020!’

FOCUS Group meeting planning typically begins with a telephone conversation or email message from a LLCommunity owner/operator who asks, “George, isn’t it about time we got together for another FOCUS Group meeting?” If there’s no date conflict with an MHI/NCC or ULI/MHCC Think Tank meeting, and the MHCongress/NCC Forum or an annual International Networking Roundtable, the answer is usually ‘Yes’.*1 And the process starts….

But first; what’s a FOCUS Group? It begins with one or more pools of approximately 20 veteran LLCommunity owners/operators, who’ve attended previous FOCUS Group meetings during the past two decades, and individuals who’ve expressed interest in attending their first get together. List of past participants reads like a ‘Who’s Who List of Most Successful Owners/operators in this asset class! A FOCUS Group convenes for 1 ½ days, with attendees spending an evening networking over dinner, the following day working through an agreed upon agenda of timely and compelling topics.

Once the decision to meet has been made, a letter is mailed to the 20 name pool of LLCommunity aficionados from which the request originated; sometimes to both pools. The letter announces preliminary plans for a FOCUS Group to convene. At least two sets of mid – week dates are given (never near the beginning of the month, when rent collection occurs), along with a city location – if a FOCUS Group member has previously offered an invitation to meet in the clubhouse at one of his or her properties. If that’s not the case, a request is made for volunteers to make such an offer. A key part of this letter requests soon input, naming three issues or concerns of import to the FOCUS Group member – along with a deadline for submission.

As date and topic responses are received, generally by email and FAX, an agenda takes shape; prioritized according to the number of similar responses and concerns. A local hotel is identified, and transportation planned from there to the FOCUS Group meeting site. This information is put into a second letter to the member pool or pools, citing a deadline for positive response. Sign – ups are accepted on a ‘first call, first reserved’ basis, until maximum of 12 – 15 commitments have been made. If there’s a particularly strong response to the invite, a second FOCUS Group session is scheduled.

FOCUS Group members fly or drive into the designated city location mid – afternoon the day before the formal meeting, check into host hotel, and gather in the lobby around 6PM to attend a no host networking dinner. Next morning, following breakfast at the hotel, attendees are car pooled or bussed to the host LLCommunity, arriving by 8:30AM to tour the property and be in their seats ‘ready to begin’ by 9AM. While five topics are usually selected for discussion at one of these meetings, e.g. 9 – 9:45, 10 – 10:45, 11 – 11:45, over the lunch hour on – site, and 1 – 1:45PM, it’s not unusual to adjust the schedule when a particular topic commands lively and prolonged attention. A goal is to complete four or five sessions by 2 and 3PM, so participants, who need to do so, can get to the airport to catch afternoon flights home. Many stay longer.

Participants are encouraged to bring 20 or so handouts (e.g. forms, policies, ads.) relating to topics on the agenda. This is LLCommunity cross – pollination at its’ best! And attendees informally agree to keep meeting proceedings confidential among themselves. After the meeting, a summary is prepared by the organizer, with copies sent to each participant, along with an invoice covering meeting and planner’s expenses.

If interested in adding your name to one of the 20 name FOCUS Group pools, contact the blogger via (317) 346-7156, reply directly by message to this Blog, or via the MHIndustry HOTLINE:(877) MFD-HSNG or 633-4764. FYI; FOCUS Group meeting(s) are now being considered for sometime in late February or early March 2010, likely in one or another Florida LLCommunity. Remember however, this special education and networking event is intended for LLCommunity owners/operators and senior corporate executives. An effort is made to not have competing portfolio ‘players’ in same group.

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On another subject. Read or post blogs? Beware fakers and a unique breed of spammer! Those are two things I’ve learned blogging, first for the defunct Manufactured Home Merchandiser, now at the official MHIndustry/LLCommunity website: community-investor.com

Fakers? These are individuals who’d like you to believe they’re experts, in one specialty or another (We’ve all heard the bromide: ‘Fake it till you make it.’ description of some novices), relative to HUD Code manufactured housing or landlease community asset class. There’re several ways fakers hawk their presence online.

First, they come across as being highly successful in their stated or implied MH or LLCommunity – related specialty, whether home marketing and sales, home finance, property investment, property marketing, or property management. When one takes the time to investigate, some of these folk lack the credentials and successful experience they infer. After all, establishing an online presence is not difficult or expensive, just an easy way to garner quick attention, get (back) into business, or head off in an entirely different direction, in the hope no one looks too closely. One indicator is their misuse of standard MHIndustry terminology. Do they talk and write about ‘trailers’ instead of manufactured homes, ‘mobile home park’ vs. landlease community, tenants rather than residents, and more? By the way, this ploy has long been a problem with print trade publications where editors and publishers don’t vet manuscript content and those who pen them. So, just be careful what you read and believe online and off.

Second, beware products or services fakers offer. Begin by examining their website. When was last time it was updated? What national trade affiliations do they claim? Before you spend resources on some novel idea (e.g. leasing vs. selling your income – producing property), product (leak detectors), training (‘Get rich quick, buy a MHPark!’) or service (‘We can easily sell your property; no listing needed!’) , request specific referrals, complete with contact information, to previous customers you can contact in person – and contact those referrals!

Speaking of national trade affiliations; this is a timely and effective acid test. How? If the online vendor/blogger, or trade publication columnist or feature writer – for that matter, doesn’t list a paid, direct membership affiliation with the Manufactured Housing Institute (‘MHI’), Urban Land Institute (‘ULI’), or Institute of Real Estate Management (‘IREM’) – where professional property management of LLCommunities is concerned, Beware. They either don’t know of these national trade advocacy, networking, and education bodies; can’t afford membership in same; or, simply, seek to avoid the public exposure they’d experience if a bona fide ‘player’ or expert in the MHIndustry and or LLCommunity asset class.*1

Spammers? If you email, you deal with these folk every day. Turns out they’re on the blogger circuit as well! How so? In my experience, fully a third of the direct responses to newly posted weekly Blogs, comes from spammers hoping blogger will approve their message (vs. delete), leaving it intact, so future blog readers will learn of their (pharmacy) product or (sex) service imbedded within their email address. Seriously. Happens all the time.
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Postscript I.

IMPORTANT REMINDER. This week, 4 – 8 January, will see distribution of the new Allen Letter professional journal, commemorating 20 years in continual publication serving the MHIndustry & LLCommunity asset class! This issue contains the only official 21st edition of the ALLEN REPORT, a.k.a. ‘Who’s Who Among LLCommunity Portfolio Owners/operators Throughout North America!’ Unlike years past, it’ll not be released anywhere else, so ensure you receive your copy, as a lagniappe (‘freebie’) with January’s Allen Letter ($134.95/annual subscription) or for $250.00 for the report alone! In either case, phone (317) 346-7156 to subscribe, and or buy the ALLEN REPORT, listing 125 of the 500+/- known portfolio owners/operators in the U.S. and Canada. Other special features this month? HOW TO articles by Don Westphal and Joanne Stevens, CCIM, as well as a very special presentation of ‘The Near Perfect Storm Manifesto!’ that has our entire industry and asset class addressing the timely Premise: ‘Imagine No More HUD Code Homes being Manufactured by Year 2010!’ For that matter, for the first time I can recall, MHI and MHARR address said Premise in side – by – side columns in this month’s Allen Letter. What they pen, is an enlightening education in itself! GFA

Postscript II.

Relative to the ‘timely Premise’ quoted at the end of the previous paragraph (Postscript I.); it’s not too late to provide your input to a small working group envisioning and crafting a new Business Model, designed to return HUD code new home shipments (a key part of said model suggests changing our industry’s perspective away from its’ ‘shipment’ mentality, to tracking new home ‘sales’! What do you think?) to the 200,000 per year level! How to input? FAX @ (317) 346-7158, respond directly to this Blog, or telephone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. If you’re asking yourself: ‘Why isn’t this new Business Model coming from MHARR, MHI or the ULI/MHCC Think Tank or – best of all – the three of them together? Well, ask them, and the sooner the better! MHI will host its’ Winter meeting in Savannah, GA., @ 1 & 2 February 2009. Bill Matchneer from HUD will be present to field questions. Wonder if this historic Premise is on MHI’s agenda for that meeting? Ask! Contact MHARR via (202) 783-4087 Danny Ghorbani; MHI via (703) 558-0678 Thayer Long, CAE., and ULI/MHCC via (248)645-1077. Go ahead, tell’em ‘George suggested we call you with this or other ideas to prevent realization of the Premise: ‘Imagine No New HUD Code Homes by Year 2020!’ and, ultimately, to help Save Our Industry!

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End Note.

1. MHI/NCC = Manufactured Housing Institute/National Communities Council division; the landlease (nee manufactured home) community real estate asset class’ national advocacy body. (703) 558=-678. ULI/MHCC = Urban Land Institute’s Manufactured Housing Communities Council, LLCommunity property types’ de facto Think Tank. MHCongress = MHI’s annual Manufactured Housing Congress & NCC Forum for LLCommunity owners/operators (mid – April in Las Vegas, NV). International Networking Roundtable = the asset class sole, annual,
education, networking, and deal making event for LLCommunity owners/operators; though, of late, HUD Code home manufacturers have been attending to display and market their Community Series Homes via their Business Development Managers (‘BDM’) – for a list, call (317) 346-7156.

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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