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

 

ALONE then; now WELL, & NO LONGER EXCEPTED

        ‘Remembering Christmas Eves 1968 and 2005’

           The week between Christmas and beginning of a new year is oft used to pause, remember, and reflect on pivotal and watershed moments in life; how such events and circumstances continue to affect one’s contemporary personal or corporate experience; and ponder the influence they might have during the months ahead.

             Christmas Eve has long held special spiritual, personal and familial meaning to me, especially those of 1968 and 2005…

             1968. Nine months into my 13 month tour of duty as a young U.S. Marine combat engineer officer, I found myself at Vandegrift Forward Combat Base (nee ‘Landing Zone Stud’), 40 or so ‘clicks’ (kilometers) West of Dong Ha Combat Base in Quang Tri Province, Republic of Vietnam. It was Christmas Eve, and my shore party platoon, comprised of helicopter support team members, and I were hunkered down for that night of nights, in a large underground earth and timber bunker.

             Earlier that week I received a couple small packages from home, Christmas presents wrapped first with colorful paper, then covered over with brown grocery bag rag. It was quiet that eve, with a clear sky. No ‘incoming’ (rockets) or small arms fire so far. So I decided to sit alone atop the bunker and open the presents, while thinking of my wife Carolyn, and toddler Susan, way back home. Boy, talk about feeling really Alone! Not sure I ever felt more Alone before that night, I know I certainly haven’t since. And while it wasn’t the most traumatic or emotional experience endured in Nam, it sure convinced me how incomplete each of us is, without someone to hold near and dear, in good times and bad.

             Then it happened! Seemed, in an instant, all hell broke loose. Small arms fire, some automatic, erupted around the entire defensive perimeter of the base; pop flares whooshed skyward and burst, illuminating everyone with their bright light; even some signal star clusters arched out from Stud, over into Indian country (enemy territory). Fortunately, it wasn’t a wholesale response to an attack, or attempted breaching of our barbed wire barricades, just a bunch of Marines intent on celebrating Christmas Eve the only way they could, by using gunfire and pyrotechnics, half a world away from loved ones back in the states. The ‘mad moment’ was short-lived however, as officers and noncoms started hollering ‘Cease fire, cease fire!’ And with the restored quiet, came that Alone feeling again.

             Three months and one major engagement later, I left RVN behind and returned to my family in Philadelphia, PA. For the next 37 years I kept most Vietnam combat memories bottled up inside. While it had been the most exciting, challenging and dangerous 13 months of my life, so far, it had also been the loneliest of times. On one hand, I didn’t want to relive trauma better left behind, so I thought, on the battlefield. On the other hand, I realized not only how Alone I’d felt that Christmas Eve, and most other nights; but now, how potentially permanently Alone, I’d selfishly risked my family, when going off to war. And that’s something I’ve lived with ever since…

             2005. I penned the short story ‘Making Amends’, a few years ago, describing how a chance encounter Christmas Eve 2005, enabled me to finally relate adventures, and some of the trauma experienced during 1968 and 1969 in Vietnam, from the Khe Sanh Combat Base breakout  to a near death experience, during Operation Dewey Canyon, along the Ho Chi Minh Trail bordering Laos in the Ashau Valley.*1

             Two additional results of this pivotal, watershed moment – and I’ve not written publicly about this before, is it completed a multifaceted emotional healing process 40 years in the making; and something else. 

 When I returned to the states during Spring 1969, I was incapable of crying; inclined to laugh, instead of grieve, when relatives and friends died; and, unable to show much affection to those closest to me. Ten years later, during healing prayer administered by close friends one Friday night, I regained the ability to cry! Today I can easily weep during a movie, even while reading a poignant part in a book, but still find it difficult to shed tears among family members. It took even longer to attend funeral services and respond appropriately. And today, it’s not as easy as I’d like, to sow warm affection to my spouse, children, grandchildren and great grandchildren. Why? Best I can figure; when my Marines were killed, wounded or injured in RVN, it was often vital, during and soon after combat, to appear and to be, in full control of one’s emotions and actions, not crying, unflinching facing violence and death, leading by example at all times. That extreme conditioning did not disappear when I returned home. And to this day, I suppose – deep down, I fear – once again, to be the stalwart one, if a tragic turn of events affects my loved ones….

             As a related aside; the third result, portrayed in the words that comprise ‘Making Amends’, is how alienation morphed into acceptance between two individuals whose lives couldn’t have been more disparate in 1968, now reconciled on Christmas Eve 2005, with neither one any longer excepted….

             So, during the days between Christmas and New Years day, since 2005, I’ve made it a point to pause, remember, and reflect on pivotal and watershed moments in my life, and how these events and circumstances might affect personal and corporate experience during the 12 months ahead. My 2010 epiphany? ‘I’m no longer Alone; I can truly empathize; and, I appreciate the efforts of others, as some have finally appreciated me.’ So, how ‘bout you? Might this be a timely and worthwhile exercise for you, this week, as well? Think about it!

 End Note.

 1. Copies of the short stories: ‘Making Amends’, ‘PUC Beer’, ‘Got Rep?’, and ‘The Chester Flashback’ are free and available on request, by simply responding to this Blog, via email: gfa7156@aol.com, or telephoning (317) 346-7156.

 Postscript I.

             If you’re a loyal reader of this weekly blog, you’re likely wondering if and when there’ll be follow – on episodes to chapters # 1, 2 and 3 of the Manufactured Housing and Landlease (nee manufactured home) Community Manifesto, Opportunity to Make History Together, and Gantlet. Answer? You bet! Chapter # 4, very tentatively titled, ‘Where Are Our Elected Leaders?’ is nearing completion; and, Chapter # 5 should be the most exciting episode ever. Why? A Plan! That’s right, since no cogent plan is apparently forthcoming from Washington, DC., from anyone – anytime soon, some business owners (i.e. ‘People with ‘skin in the game’, as is oft said!) are crafting a new Business Model for the MHIndustry, its’ advocacy organizations, and to a lesser extent, the LLCommunity asset class. Hopefully, both chapters will debut sometime during January and February 2010. Want to participate? Here’s how! Pen your ideas, regarding what you think and believe it will take to ‘Save Our Industry’ and email or mail (GFA c/o Box # 47024, Indianapolis, IN. 46247) them ASAP! Remember; the premise towards which we’re focusing our attention these days is how to counter:

 ‘Imagine No New HUD Code manufactured homes by year 2010!’

 Frankly, the most frequent rejoinder I’m hearing and seeing (in letters and emails) these days is,  “George, you’re being too generous with the premise time frame. Frankly, I don’t see new HUD Code homes being manufactured and shipped beyond year 2015!” Yikes! Do YOU see our lot as being that bad? If so, run – don’t walk – to the nearest computer and get your ideas and suggestions off to me right away! If not, I’d still like to hear why. GFA

 And if you’re really caught up in this national conversation about the present and future of the HUD Code manufactured housing industry, you’ll want to be present at the Manufactured Housing Institute’s Winter meeting in Savannah, GA., on 2 February 2010. Why? Because ‘If you’re not at least attempting to be, or become, part of the solution to our industry’s ills, you’re likely part of the problem!’ Be there, in part, to challenge William Matchneer, HUD’s Associate Deputy Assistant Secretary for Regulatory Affairs and Manufactured Housing, as to why that federal agency appears to work so hard to stymie manufactured housing’s acceptance as housing (vs. trailers) by dint of not fully implementing the Manufactured Housing Improvement Act of 2000 (‘MHIA@2000’), refusing to name a noncareer administrator (instead of him) to oversee the work of the Manufactured Housing Consensus Committee (‘MHCC’)! To register, phone Thayer Long @ (703) 558-0678…he’s on vacation this week, so you’ll likely have to leave a message. And, while you’re at it, phone Danny Ghorbani, executive head of the Manufactured Housing Association for Regulatory Reform (‘MHAR’) and request to be put on his email mailing list for his group’s ‘Watchdog’ warnings about HUD’s latest machinations and maneuverings. (202) 783-4087. See you in Savannah? Hope so!

 Postscript II.

 Savvy MHIndustry & LLCommunity businessmen and women already subscribe to the Allen Letter Professional Journal; in part, because they know at this time of year they’ll receive the 21^st annual ALLEN REPORT (a.k.a. ‘Who’s Who Among LLCommunity Portfolio Owners/operators Throughout North America!’) as a lagniappe (‘freebie’) with the January issue of the newsletter! Otherwise, the ALLEN REPORT, alone, costs $250.00., so, a savings of $115.05 for those who’ve invested $134.95 in an annual subscription to ALPJ. It’s not too late! The January issue of the newly reformatted newsletter will be distributed late this week or next week. Call the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 to subscribe today! Credit card orders encouraged.

                                                            *****

 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

 

                             NO  MORE  SOFTBALLS!

 

Chapter # 3 ‘The Manufactured Housing & Landlease Community Gantlet*1

 

Blogger’s Preliminary Notes.

 

• Haven’t read chapters # 1 & 2 of this unfolding, punishing tale? It’s highly recommended you access archived blogs at community-investor.com & read ‘Let’s Make History Together!’. It contains ‘The Near Perfect Storm Manifesto’ and premise toward which this and subsequent chapters are and will be focused. GFA

 

• Don’t overlook the End Notes to this week’s Blog. They contain pithy information rounding out points made throughout the body of the material.

 

*****

 

            Echoing the premise of the widely read ‘Near Perfect Storm Manifesto’, yet another veteran business owner recently opined: “We need (as an industry & asset class) to wake up or die!”*2   So, what have other entrepreneurs and senior corporate executive peers been saying and penning these past few weeks?

 

One long experienced, hands – on, Chicago – based respondent put it this way:

 

1. “We must get back to our roots of (housing) affordability, customer satisfaction, and quality of product and service! There are some landlease (nee manufactured home) community owners/operators doing VERY WELL these days because they routinely deliver core values and more, to their customers and residents.

 

1. LLCommunity owners/operators MUST finance their own home sales and or have ‘skin in the game’ (via recourse), when it comes to marketing new homes on – site. There’s no financing White Knight coming to save us anytime soon!

 

1. The model of how LLCommunities ‘work’, from several perspectives, must be rethought. The old days are gone, and the dinosaurs of the asset class (including me), must wake up to a new reality! Rent raises must be curtailed; massive capital infusions used to build and improve infrastructure to support new homes and site upgrades; and, a new breed of professional property managers is needed to better run our properties. The economic, political and social landscapes or our Business Model must change. (lightly edited. GFA)

 

While I generally agree with this colleague’s assessment of, and challenge to, our existent realty and home sales Business Model, let’s view the matter from a broader perspective:

 

• Yes, many veteran LLCommunity owners/operators are doing VERY WELL these days, frequently selling new and resale homes on – site, often engaging in one form or another of self – finance*3, using excess cash flow from the property proper, having paid down or retired their original or refinanced real estate mortgage. On the other hand, some veteran owners/operators have been greedy, raising site rent far above the traditional 3:1 ratio (apartment unit rent 3X LLCommunity site rent), resulting in severely declining physical and economic occupancy, and inability to pay operating expenses and mortgage payments.

 

• Some newer LLCommunity owners/operators are struggling to survive because they valued and acquired one or more properties based ‘on the (rent increases to) come’; and, being novices to the asset class, made costly errors in overstaffing. However, other new owners/operators are doing ‘Just fine, Thank You’, having paid NOI – supportable prices for their investments, then parlaying this with past successful income – producing property management experience.

 

This from a recently retired HUD Code & mod manufactured housing executive:

 

“I believe strongly we, the MHIndustry, have not just lost our way, we’ve lost our cheese!*4 After reading ‘The Near Perfect Storm Manifesto’ twice, I’ve come to the conclusion, we’ve really lost touch with OUR customer’s housing payment ability. I’m thinking maybe we should want OUT of our current Business Model, trade advocacy associations, and this government – controlled housing product altogether!”

 

“What if we build (this is the easy part) low cost, national code – compliant homes (IRC is a breeze to work in, and outlines every local housing market’s requirements), focusing attention on present resale market for site built homes of the 1950s, 60s, 70s, & 80s? Young, first time homebuyers are flocking to them with payments in hand.”

 

“The LLCommunity folk will have to start using long term leases, protecting the value of their residents’ homes; maybe implement home maintenance contracts; and probably offer other niceties as well.”

 

“We have the land, we have the communities, and all our factories can produce an inexpensive housing product. So, how ‘bout if we join the enemy – the NAHB*5, who likely helped put us where we are in Washington anyway, to enhance our collective  power?” 

 

Now there’s a stretch! Others ‘out there’ thinking along similar lines? If so, we need to hear from you right away. If not; OK, but your reasoning and ideas to Save Our Industry need to be heard and expressed as well. Think about it. What other forum do we have today, with the passing of the Manufactured Home Merchandiser and Modern Homes magazines? None really. If you don’t know why, ask me personally sometime….

 

            Here’s a conundrum (‘a hard question or riddle’) of sorts. The numerous written and verbal responses to aforementioned manifesto and blog, i.e. Chapters # 1 & 2 of the MHousing & LLCommunity Gantlet, have been 100 percent positive in nature and content. Frankly, I didn’t expect such overwhelming agreement and support. So, I went in search of contrary points of view and perspective, and found a few. But while I encouraged written expression of their converse views, offering to protect the identities of those expressing opinions, the dissenters have remained pococurante. Go figure.

 

            Where does all this leave us today? Frankly? On the national advocacy scene, ‘nigh lost and without a reliable, true compass!’ How so? Allow me to explain and recommend a course of personal and corporate action:

 

• Manufactured Housing Association for Regulatory Reform or MHARR, a.k.a. MHIndustry’s regulatory ‘watchdog’ in Washington, DC., has one membership classification: HUD Code housing manufacturers; oft referring collectively to other segments of the MHIndustry as being ‘the aftermarket’. While smallest of the two national advocacy bodies, it tenaciously fights what it views as regulatory – related, cost – increasing threats to the ‘affordability’ of factory – built housing. Danny Ghorbani @ (202) 783-4087.

 

• Manufactured Housing Institute or MHI, represents all segments (manufacturers, suppliers, retailers, lenders, and LLCommunities) of the MHIndustry & LLCommunity asset class. Given the heterogeneous nature of its members, its’ resources are spread thin on one hand; and, disagreements on policy (e.g. land use regulations) sometimes occur. Since 1996, MHI’s National Communities Council (‘NCC’) has ably met the national advocacy needs of LLCommunity owners/operators, though it’s presently without a senior executive. Thayer Long @ (703) 558-0678.

 

• At present, there’re a half dozen significant industry and asset class issues, serving as regulatory and self – imposed brickbats, playing active roles in the MHIndustry & LLCommunity Gantlet. While there’s disagreement between MHI & MHARR, as well as among industry segments, as to appropriate order of priority of these issues, they certainly include: severe present paucity of institutional realty mortgage and personal property (‘chattel’) financing for LLCommunities and homes respectively; the quiescent state of the Manufactured Housing Improvement Act of 2000, a.k.a. ‘MHIA@2000’, and its’ intended functionary, the Manufactured Housing Consensus Committee or MHCC, still sans the non – career administrator mandated by Congress a decade ago! And then there’re the issues of national ‘brand promotion’, as in HUD Code manufactured housing being the most affordable and desirable form of factory – built housing; and, IMAGE. You know, the ‘T’ thing, and how to best deal with it effectively. And the list goes on…

 

• Some recommended action steps. Get on MHARR’s email distribution list, read their position papers, and ask for another or supporting point of view from folk at MHI. For that matter, join and become a direct, dues – paying member of MHI, especially the NCC if you’re a LLCommunity owner/operator, and involve yourself in these ‘industry discussions’, particularly the upcoming quizzing of William Matchneer, Associate Deputy Assistant Secretary for Regulatory Affairs and Manufactured Housing, at MHI’s Winter meeting in Savannah, GA., on Tuesday, February 2^nd ! Does all this sound daunting? Well, help is on the way…

 

• Probably with the February issue of the Allen Letter Professional Journal, you’ll meet the MHIndustry & LLCommunity savvy writer who’ll be parsing MHARR & MHI press releases, newsletters and articles, to pen accurate, centrist monthly columns – for YOU, describing what these two advocacy bodies are attempting to communicate regarding political and regulatory matters inside the Washington beltway. FYI; the anonymous columnist has decades of experience in MHousing, LLCommunities, and MHAssociation leadership, and is active in the MHBusiness today! If not already subscribing to ALPJ, phone (317) 346-7156 or subscribe online via community-investor.com  You don’t want to miss this!

 

Well, now you know almost all there is to read and hear, today, about the MHIndustry & LLCommunity Gantlet that, in large measure, prevents us from coming anywhere near to realizing our affordable housing production and shipment potential (‘Think housing finance, regulatory environments, & historic lack of sensitivity to homebuyer needs and wants!’), and achieving Max ROI relative to the LLCommunity asset class (‘Think housing finance, unwillingness to adjust site rent to fit local economic conditions, & historic lack of professional property management on – site!’) investment. Do you get the idea, that to move upwards from this very nadir of historic MHousing production & shipments, we’re going to have to stop playing softball with those contributing to the confusion described in previous paragraphs, and commit to make some changes from both the top down and bottom up (That’s YOU and ME!)? 

 

As always, we solicit your input by phone, email, FAX (317)346-7158 and letter: GFA c/o Box # 47024, Indianapolis, IN. 46247.

 

Postscript.

 

Last week’s Blog encouraged readers to attend Georgia Manufactured Housing Association’s second Super Symposium & Showcase of Homes in Forsyth, GA. Well, guess what? The Symposium was a complete SUCCESS. More than 120 MHIndustry & LLCommunity folk were in attendance, visiting five HUD Code and one Park Model home, along with a line of Bennett Building Systems storage sheds, for renting to LLCommunity residents! The S.A.F.E. Act of 2008 got worked over pretty well, and property owners/operators were challenged to ‘Really Get Communities READY Before Selling and Financing New and Resale Homes On – site! For more information, and copies of materials shared, contact Jamie Hammons @ (770) 980-6393. The initiator of the Super Symposium concept, now a popular national industry trend, James Keller of the IMHA/RVIC was honored at this seminal event! Where’s next Super Symposium? For sure, in Albany, New York, @ 30 & 31 March 2010. For information, contact Nancy Geer of the New York Housing Association @ (518) 867-3242. Tell her George Allen told you to call! And I hear a fourth Super Symposium & Showcase of Homes is in the planning stage in Indiana (317) 247-6256X12. How ‘bout your state? Every state MHAssociaiton should do this for their members, and it’s an effective means of recruiting new members! Also, there’s a HOW TO checklist being developed, describing steps to effecting one of these stellar events. Check with Jamie Hammons or Jim Keller.

 

                                                            *****

End Notes.

 

1. Gantlet. “a form of punishment or hazing in which the victim (MHIndustry & LLCommunity asset class) runs between two lanes of people (e.g. politicians & regulators) and is struck by them (legislatively & regulatorily) in passing; a series of unpleasant things or events.” The New American Webster Handy College Dictionary.

 

1. Premise. “Imagine No New HUD Code Homes Manufactured in Year 2020!” or, in other words: “The Not So Secret Scheme to Regulate and Politic HUD Code Manufactured Housing Out of Business by the Year 2020…” There it is. Someone finally said and wrote what many have been thinking since 2005.

 

1. “Self – finance is ‘captive finance’ when third party collects payments and services chattel mortgage, and ‘buy here – pay here’ when LLCommunity does so.” From MHIndustry & LLCommunity Lexicon pocket card. For FREE copies of this and other training aids, call MHIndustry HOTLINE: (877)MFD-HSNG or 633-4764.

 

1. Who Moved My Cheese by Dr. Spencer Johnson.

 

1. National Association of Home Builders in general, the Building Systems Council (‘BSC’) in particular, at 1201  15^th St., NW, Washington, DC. 20005.

 

*****

 

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

21st annual ALLEN REPORT full of timely ‘stats’ & surprises!

This ‘Who’s Who Among LLCommunity Portfolio Owners/operators in North America!’ will be distributed free, as a lagniappe, in January 2010 issue of newly reformatted Allen Letter Professional Journal; or available for purchase, for $250.00 via community-investor.com, & by phoning the MHIndustry HOTLINE: (877)MFD-HSNG or 633-4764 or (317) 346-7156

We’ve all heard it said: “Today, just about every landlease (nee manufactured home) community owner/operator sells, and often self – finances, new and resale homes onto vacant rental homesites to ‘get the (site) rent meter running’! But just how many homes have been sold into these unique income – producing properties to date, and what’s the approximate value of this eclectic mix of new and resale, manufactured and mobile, homes? One billion, two billion, three billion, or more, dollars? Read the 21st ALLEN REPORT (a.k.a. ‘AR’) to find out!

As a manufactured housing or landlease community (‘LLCommunity’) aficionado, are you familiar with, and conversant about, the year old phenom (i.e. ‘BDMs’!); and the emerging trends: Community Series Homes supplanting Developer Series Homes, a new Small Community Owners Forum, increasing role of the industry’s Think Tank, and how Super Symposiums/Showcases of HUD Code Homes (in IL, OH, GA, NY & elsewhere) are replacing larger, more expensive venues like the Midwest Manufactured Housing Show in Louisville, KY? All this is covered in the 21st AR, January 2010!

Were you one of 100+/- LLCommunity owners/operators in attendance at the first National State of the Asset Class (‘NSAC’) caucus in Tampa, FL., on 2/27/08; or, the Historic SUMMIT Meeting between HUD Code manufacturers & LLCommunity ‘players’ on 2/27/09 in Elkhart, IN? If so, you’ll want to read the ‘NSAC update’ in the AR, to decide whether present business conditions, and the future of your investment in this industry and asset class, warrants another critical examination of where we are today, and what we must do soon, to move home shipments off present 50,000+/- nadir (Go ahead, look it up!), ensuring continued supply of new homes for our properties in the foreseeable future! Hint: Only one firm uses network TV to promote its’ brand of homes!

Stats! 125 respondents, out of 500+/- this year! These owners/operators own and or manage 3,160 LLCommunities containing 738,833 rental homesites. The real surprise is how many of these properties and sites are controlled by the ten largest ‘players’ in the asset class. Wanna guess where national average physical occupancy and operating expense ratio (‘OER’) percentages wound up by end of 2009? Hint: ‘Down & Up!’ Believe it or not, three times more new LLCommunities ‘under construction’, but fewer property expansions during 2009 than 2008 – with an unexpected twist in the first instance. And even more numbers with which to compare one’s property portfolio. And don’t forget, all 125 AR respondents are described in terms of home office location, number of properties & rental homesites owned/fee managed, & their geographic spread!

Think you really know and understand the difference between ‘Buy Here – Pay Here’ and ‘Captive Finance’, when it comes to on – site, self – finance of new and resale homes? First comprehensive definitions and descriptions of these financial processes here in AR!

And, if you’ve been following the almost ever changing makeup of our asset class Pride of Young Lions (i.e. ‘High performing acquirers of LLCommunities’), and present status of the Daring Dozen, first identified in January 2005 AR, you’ll not want to miss this thorough update regarding all original ‘players’. And finally; anyone want to guess whether the total portfolio count of rental homesites, controlled by real estate investment trusts (‘REIT’s), grew or contracted during 2009? No hints here.

Bottom line? Where the 20th anniversary edition of the ALLEN REPORT was a two decade landmark look back and forward, at our unique real estate asset class, the new 21st edition not only covers similar, familiar territory, but provides – by far – the most comprehensive look at the generalities and specifics of the property type, so familiar to many of us, as owners/operators, but near wholly unfamiliar to the majority of commercial realty investors and lenders, the realty trade press, even professional property managers!

Reserve your copy today, by subscribing to the new Allen Letter Professional Journal!

POSTSCRIPT.

You’ll not want to miss next Monday’s Blog at community-investor.com Why?

Unless something cataclysmic occurs within the MHIndustry & LLCommunity asset class, it’s nigh time for Chapter # 3 of the unfolding saga ‘Your business future and mine’, first premised in ‘The Near Perfect Storm Manifesto’, followed by (chapter # 2), a Blog at this website titled, ‘Let’s Make History Together!’ Check it out in the archives.

Hint: The working title, today, is ‘No More Softballs!

There’re investigative journalism and op/ed initiatives afoot – well beyond the author of this Blog, preparing to challenge the lackluster and questionable reporting of MHIndustry & LLCommunity news and views. Think about it next time you pick up any of the remaining trade pubs, and peruse online ezines. Ask two questions: ‘Aside from this media, have I met, seen or heard these individuals at work in their claimed specialty?’ And, ‘How many of these folk are presently active on state and national scenes, as dues – paying, meeting attending members, of state MHAssociations, MHI or NCC, the ULI & its’MHCC – all attempting to ‘Salvage and Save Our Industry’?’ If answer to either or both questions is ‘No’, why are you…

FYI. Join your peers at the GMHA’s Super Symposium II/ Showcase of New HUD Code Homes in Forsyth, GA., from 15 – 17 December – YES, this week! Homes from a half dozen manufacturers will be on display, along with seminar presenters telling the hard truths about impending state implementation of the federally mandated S.A.F.E. Act for Mortgage Licensing (Read last week’s Blog for an ‘eyeful’ of what this is all about & how it’ll change the way you’re presently doing business!); ‘How to Know if Your LLCommunity is Truly Ready to Successfully Market, Sell & Self – finance New & Resale Homes On – site!’; and much much more! How can you afford not to be present or represented? Phone Jamie Hammons of GMHA as soon as you read this Blog! (770) 980-6393.

*****

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

Major WARNING to LLCommunity Owners Nationwide!

Your State’s Eventual Implementation of the Federal S.A.F.E. Act *1
May Bite Your On – site, Housing Self – finance Program in the Butt!

First, the Good News!

Landlease (nee manufactured home) communities have long been considered one of the very best ‘off the investment realty radar screen’ opportunities because (of)

Relatively limited property supply! Think NIMBY, LULU & BANANA.*2

Investor leases only land, so generally fewer and lower operating $ expenses!

‘Recession proof’ reputation when homesite rents are low and homes affordable!

Opportunities for investor to ‘add value’ via on – site sale of new and resale homes, the self – financing of said transactions, and AITR*3

BUT NOW,

The Not – So – Good News!

Relative to the last LLCommunity characteristic cited above, regarding ‘self – finance of (housing) transactions’: Unless a LLCommunity owner/operator is effecting ‘cash only’ deals or transactions with homebuyers, expect your state’s present or near future implementation of the Federal S.A.F.E. Act to require your 100% participation in this new, nationwide licensing system & registry database for residential loan originators! Yes, YOU! And Seriously!

SPECIFICS?

The state of Ohio, thanks to efforts by its’ manufactured housing association (‘OMHA’) is ‘ahead of the curve’ where the new federal program is concerned, as their state’s law becomes effective January 2010. At a recent Super Symposium on this very subject, I asked Ken Rishel of Precision Capital to outline S.A.F.E. Act related measures about which LLCommunity owners/operators and MHRetailers should be aware in the immediate future.

If not presently involved in any form of self – finance, but use outside lenders like Triad Financial Services or 21st Mortgage Corporation, as sources of financing for new and or resale home sales in one’s LLCommunity, and sales people are advising customers about lending sources, and assisting in completion of credit applications, the business entity employing the sales staff is likely going to need to be registered as a Mortgage Broker*4 in the state where said property is located. And not only that, sales personnel are going to need to be trained, likely tested, and licensed as Mortgage Loan Originators.*4

If presently involved in self – financing of homes, the business entity may need a regulated loan license*4, a Mortgage Lender Registration*4, and sales persons will likely need Mortgage Loan Originator’s Licenses.*4

In addition to state registration and licenses, there’s also a requirement for national registration, through NMLSR.*5

In certain states, relief may be available if a business entity’s sales people are prohibited from assisting customers seeking financing, except through direction to a website or telephone number of an outside licensed lender who handles the transaction in toto. If your self – finance is handled entirely by a licensed entity, the same exemption may also apply.

The servicing and collection of existing loans is not ‘grandfathered’ in the S.A.F.E. Act. And ongoing mortgage servicing and collections must be handled by a properly licensed Mortgage Lender.*4

If a business entity operates in multiple states, it must be registered, licensed and bonded in each of those states.

The basic requirements*4, pursuant to licensing and registration under the S.A.F.E. Act require fingerprinting by an approved source, a personal history given under penalty for perjury, a credit check, an FBI background check, a civil records check, bonding, and pre – licensure training (education) and successful passing of a standardized test. There’s also a continuing education requirement.

Failure to comply is a felony with a substantial fine*4, accompanied by fine for each day of violation, and an opportunity for the borrower to sue all parties involved.

If you own/operate one or more LLCommunities and the content of this Info Blog is disturbing to you, – as it should be – contact one or more of the following resources for information and assistance:

Ken Rishel, Precision Capital @ (217) 971-3968

Tim Williams, Ohio Manufactured Housing Association @ (614) 799-2340.
Request a copy of Symposium outline describing Ohio’s new law, as a template.

Thayer Long, Manufactured Housing Institute and National Communities Council @ (703) 558-0678. Join the NCC division to stay abreast of this evolving matter!

Tim W. Williams, president, 21st Mortgage Corporation @ (800) 955-0021

Don Glisson, Jr., Triad Financial Services, Inc. @ (904) 223-1111

And finally; if you own/operate one or more LLCommunities in the U.S. or Canada, know that the 21st annual edition of the ALLEN REPORT (a.k.a. ‘Who’s Who Among LLCommunity Portfolio Owners/operators in North America!’) will be available 1/1/2010 for $134.95 from PMN Publishing @ (317) 346-7156, or free to subscribers to the Allen Letter professional journal (one year subscription also $134.95) – same phone #. Begin year 2010 informed; read all about the MHIndustry & LLCommunity ‘News, Views & How To’s’ in the Allen Letter professional journal each month!

End Notes.

1. ‘Safe And Secure Enforcement’ for mortgage licensing act of 2008; S.A.F.E. Act

2. ‘Not in my back yard!’, ‘Locally Unwanted Land Use!’ & ‘Build Absolutely Nothing Anywhere Near Anybody!’ Acronyms commonly used to describe local regulatory barriers to affordable housing of all types!

3. ‘Alternative Income to Rent’ measures per Allen Cymrot; cited in Landlease Community Management, available from PMN Publishing: (317) 346-7156

4. These terms and precise requirements related thereto, are going to vary from state to state, as will the penalties for violation of statutes. Seek advice from competent counsel, or a consultant specializing in compliance and finance – related issues for specific information

5. National Mortgage Licensing System and Registry or NMLSR

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

MHIndustry HOTLINE: (877)MFD-HSNG or 633.4764 This number is the primary source of MHIndustry & LLCommunity information shared in this Info Blog, the Allen CONFIDENTIAL! business newsletter, and the Allen Letter professional journal! Call!

For the time being, Forbearance apparently trumps Foreclosure!

Do you have a commercial real estate mortgage coming due and see no way, at present, to pay it off or refinance? Or perhaps you’ve been through this stressful drill during the past year, and the old bromide, ‘Take one day at a time’ has new and sobering meaning for you. If so, and in either event, I know just how you feel. As we’re oft wont to say, ‘Been there, done that!’

With that stated, however, what is one (i.e. borrower) to do when faced with, 1) imminent default, 2) loan balloon with no replacement lender and property worth less than the debt, or 3) loan balloon with no replacement lender and a property worth more than the debt? First step is ‘education’. If you didn’t read Creighton Weber, Nick Bertino, & Tony Petosa’s (Wells Fargo) recent (August 2009), excellent two page special report on this very subject, ‘What to do when your loan comes due!’, contact this Blogger for a free copy (via Blog reply or MHIndustry HOTLINE: (877)MFD-HSNG or 633-4764.

Next step? Well, that depends on your particular circumstances and the terms and conditions of your commercial real estate loan(s). Right now (i.e. remainder of 2009 and into 2010 – and hopefully, longer) many, if not most, lending institutions ‘have been reluctant to foreclose’*1; and some special servicers (i.e. “… party designated to ‘work – out’ loans or foreclose on loans, if they go into default” CW) have opted to forbear rather than foreclosure.

In a recent issue of PERE magazine, Sam Zell (i.e. Think ELS, Inc., as in Equity Lifestyle Properties, Inc., formerly MHC, Inc.) was interviewed for his views on this and related realty topics. Sam argued that ‘despite declines in property values of at least 30 percent, banks (are) willing to let borrowers “carry” their loans beyond maturity, even if they (have) little chance of paying them off.’

“Everyone is talking about this giant balloon of loans coming due,
that the end of the world is coming because we’re never going to be
able to refinance. Instead, we have a scenario of extend and pretend.
If an owner has no equity, just an option – a hope certificate – why
would he sell unless he was under complete distress? He’ll extend
as long as he can keep paying the debt service and the lender will
leave him in place.”

End result, in Mr. Zell’s opinion? “I don’t think there are going to be significant grave dancing opportunities in equity this time round, other than in the hotel business.” *2 So, that confirmation brings faint hope to those faced with (maybe) imminent default and either of the two ‘loan balloon with no replacement lender’ situations.

But not everyone sees this favorable – though – personally or corporately – stressful scenario continuing for long into year 2010. The following is quoted from the Executive Summary of Urban Land Institute’s (‘ULI’) recently released, prestigious, annual tome Emerging Trends in Real Estate:

“…the commercial real estate industry hits bottom in 2010, suffering
a surge of painful write downs, defaults, and workouts. Massive
government infusions finally build up loss reserves in financial
institutions to levels allowing them to foreclose or strike deals with
many over leveraged borrowers.” *3

The tome’s author goes onto state: “…2010 will be the worst time for investors to sell properties in the report’s 30 – year history, but will offer a much – improving environment to buy (with cash).” *4 – no limiting equity opportunities to the hotel sector here.

So when do these confusing, and again, yes – stressful debt and equity aberrations end? Probably not until sometime after 2015, according to Emerging Trends.

“Debt markets will remain severely compromised – resuscitated banks
will increase lending slowly, employing strict underwriting standards
and requiring significant equity stakes from borrowers. Moribund
CMBS (Commercial Mortgage Backed Securities) markets remain
entangled in complex workouts of failed multitranched structures
with mounting levels of troubled loans maturing through 2015.” *5

Care to share your unique ‘loan due scenario’ with readers of this Blog? Then reply directly to this Blog, phone above MHIndustry HOTLINE, or write GFA c/o Box # 47024, Indianapolis, IN. 46247.

*****

Important Reminder! Compilation of 21st annual ALLEN REPORT is just about complete. More landlease community portfolio owners/operators listed this year (125) than last. Given the altered landscape of MHIndustry & LLCommunity trade press reporting, this year’s ALLEN REPORT will only be available, as a free lagniappe, to Allen Letter paid subscribers, or through direct purchase for $134.95 from PMN Publishing @ (317) 346-7156. Credit card orders welcome! If you own and or manage this unique type income – producing property report, you need the 21st annual ALLEN REPORT as a handy and ongoing reference resource to the asset class benchmark statistics. GFA
*****
End Note.

1. Quoted from RCAReport published by NAR @ Fall 2009, p. 1.
2. PERE magazine, November 2009, p.22.

A DRAFT manuscript, titled ‘The Near Perfect Storm Manifesto’ was recently distributed to 26 business stakeholder leaders active in the manufactured housing industry & landlease (nee manufactured home) community real estate asset class. Written responses have been numerous and 100% supportive of the document’s thesis:

‘Imagine No New HUD Code Homes Manufactured in Year 2020!’

Accordingly, a new chapter, and likely one of several when all is said and done, is being added – via this week’s Blog – to the original DRAFT manuscript. And if responses and ideas to this week’s Blog continue to arrive, as they have to date, it’ll be appropriate to envision early 2010 as the timeframe during which some – or many, come together to
lay the foundation for a rejuvenated HUD Code manufactured housing industry,
maybe in a manner untried to date. But this is not going to even begin to occur, without your input and commitment to materially participate in the very salvation and rebirth of our unique factory – built housing business model! Are you ready? Then let’s read and reflect upon the content of chapters one and two together, then….

Chapter # 1.

The Near Perfect Storm Manifesto

‘Imagine No New HUD Code Homes Manufactured in Year 2020!’

or

The Not So Secret Scheme to Regulate and Politic HUD Code Manufactured Housing Out of Business by the Year 2020…

*

At a recent meeting of a de facto Think Tank* pondering the past, present and future of landlease (nee manufactured home) communities, 40 conferees identified more than 20 business indicators and significant trends affecting that realty segment of the industry, during years 1999 through 2009, out to 2019 and beyond.* What wasn’t discussed however, are the dark clouds of an impending near perfect storm, threatening the continuing existence of the home manufacturing segment of the industry, a blow characterized by onerous regulatory manifestations, bureaucratic inefficaciousness, and political legerdemain. These, and other conditions, appear poised to wash away what’s left of this nation’s sole homegrown type and source of affordable factory – built housing!

To understand and appreciate how this latest near perfect storm has advanced on the HUD Code manufactured housing industry, one must look back to 1972 when factory – built housing enjoyed the sunniest of times, shipping 575,940 new mobile homes throughout the United States in one year!. And 26 years later, 1998 was almost as sunny again, with 372,843 new manufactured homes shipped! But between those apex and renascence years, the industry endured its’ first major (regulatory) storm, only to now appear to be on the cusp of being wiped – out by yet another! Precursor to the first storm, was passage of the HUD Code (i.e. Federal preemptive building code for factory – built housing) in 1974, implemented in 1976. Result? A halving of new manufactured home shipments, down to an average of 249,000 homes per year during 15 years, until 1991, when we hit our first nadir of 179,713 – before rebounding to 372,843 new manufactured homes during 1998! Precursors to the second, now near perfect storm? Selfish missteps within the industry, involving massive misuse of chattel (personal property) housing finance; and, the hollow promise of positive regulatory reform (i.e. Finally evolving manufactured housing from the ‘trailer business’ to becoming a bona fide housing supplier!) couched in passage of the Manufactured Housing Improvement Act of 2000.*

What’s happened between year 2000, when the MHIA of 2000 was passed, and now? Statistically, it looks like this:

2000 = 250,550 new HUD Code manufactured homes shipped; then in…
2001 = 194,229
2002 = 168,491
2003 = 130,937
2004 = 130,802
2007 = 95,769
2008 = 81,889
2009 = (50,000+/-)
2010 = ________?
&
2020 = 250,000 as in year 2000; or 50,000+/- as in year 2009 & 10; or 0+ ?

Yes, manufactured housing’s near perfect storm is indeed imminent! What are just some of the prevalent and potentially harmful weather conditions?

• A cold front at HUD, characterized by perennial bureaucratic wrangling with the politically gerrymandered Manufactured Housing Consensus Committee (‘MHCC’), operating in a 100% regulatory environment! Ask yourself: ‘When was the last time I heard and or read of HUD overtly promoting HUD Code manufactured housing in any fashion?’ Not! Last I heard, umpires like baseball, referees like football. Why can’t HUD career employees and political appointees like our unique form of affordable, quality, energy efficient, transportable, non – subsidized, factory – built housing enough to promote it, instead of stifling its’ affordability by regularly increasing its’ cost to the American homebuyer?

• Continuing lack of the much – needed, non – career administrator to function as HUD and industry’s weatherman, warning all parties of imminent stormy weather, suggesting how we might survive, and dare I mention, thrive together in service to our nation as ready suppliers of truly affordable, attractive housing!

• A turbulent upper atmosphere apparently not improved with the recent (2009) change in federal government administration. Will the sun shine through this near perfect storm before it’s too late? Let’s hope so….

• Continuing lack of sufficient chattel home financing with which to weather this near perfect storm. Just maybe part of the answer to this storm condition lies with cutting through red tape and barriers long germane to the FHA 207(m) Program.

• Continuing local (housing market) regulatory barriers (e.g. acronyms NIMBY, LULU & BANANA*) to all forms of affordable housing needed to shelter our nation’s citizenry, storm or no storm!

• Growing, continuing threat to affordability of HUD Code housing by dint of installation overkill, threat of water sprinklers as original equipment, ongoing transportation restrictions and much much more…

Bottom line? Unless our industry’s two trade bodies in Washington, DC., once and for all, simultaneously and united, adopt identical foci in behalf of every segment of the manufactured housing industry, there simply will not likely be an industry by the year 2020! Effect this will have on landlease communities (‘LLCommunities’)? With no new HUD Code housing, a continual need to rejuvenate existing housing stock, site RVs when and where allowed, utilize other forms of factory – built housing (e.g. modulars & ‘park model’ RVs cum homes), even build new homes on – site to complement existing HUD Code homes. No longer will the 50,000+/- LLCommunities enjoy ‘business as usual’!

What are some of the things MHARR & MHI* should be united in effecting ASAP?

• Press for full & immediate implementation of MHIA @ 2000; accept no excuses!

• Press for immediate appointment of non – career administrator to guide MHCC!

• Plan and soon effect a major national Image Improvement Campaign, on behalf of all brands of HUD Code manufactured housing, using appropriate media and online resources and opportunities. Invite the LLCommunities segment of the industry to help financially support this timely and much – needed effort!

So, in the meantime, what are manufactured housing industry purists, aficionados, even Luddites, to do? Maybe hunker down, as HUD Code home manufacturers have already, and hope for the best – which might eventually come as an up tick in the affordable housing need cycle. But know what? That’s not going to happen anytime soon, because hundreds of thousands of foreclosed site – built homes are on the market and must be ‘sold through’ before prospective homebuyers return to factory – built housing. Hunkering down is not the effective answer! Become an activist! How? Reread the previous paragraphs, then personally and corporately commit to address the following:

The biggest disconnect within the HUD Code manufactured housing industry
and its’ sister business model, LLCommunities, lies in the near complete lack
of understanding and appreciation of ‘the other (segment’s) business model’.

HUD Code home manufacturers, till recently (early 2009), gave short drift to
community folk; and in turn, LLCommunity owners/operators have too long taken manufacturers and distributors of HUD Code housing product for granted. NOW is almost too late to learn and appreciate ‘the other party’s role’ in and about our unique and related business models. Are you willing to try? If so, start now! The price for not doing so is too high for any one of us, alone, to bear; specifically:

No New HUD Code Homes Built in Year 2020
Postscript.

Early in this article, actually beginning with the title, mention was made of a
‘not too secret scheme to regulate and politic HUD Code housing out of business’.

That’s been touched upon, just not fully explored. Why? Think about it. To do so,
would be in part, to have to name names and identify competing trade entities in national homebuilding business environs; as well as to criticize divergent leadership styles, from those publicly ‘resisting perceived regulatory encroachment at all costs’, to what appears to occur behind closed doors: ‘consensus – building to the extreme’. Are you, are we, ready for that sort of expose and discussion? I suppose your answer to that question depends on whether one agrees with and believes the thesis you’ve just read, or simply don’t care to form an opinion upon which you might be called to act. Again remember, the possible consequence of your personal and corporate inaction might well be…

No New HUD Code Homes built in Year 2020!

*****

Endnotes.

1. Urban Land Institute’s (‘ULI’) Manufactured Housing Communities Council (‘MHCC’) meeting November 4, 2009, in San Francisco, CA.

2. Available for viewing at MHI’s National Communities Council website: mhcommunities.org & Communities Connection newsletter or phone (317) 346-7156 and request a copy be emailed to you ASAP.

3. MHIA of 2000 established the MHCC and was viewed as modernizing ‘mobile home’ manufacturing of the early 1970s, to contemporary housing standards for the new millennium.

4. NIMBY = ‘Not in my back yard!’; then there’s LULU = ‘Locally Unwanted Land Use!’; and finally, the ultimate local regulatory barrier to all forms of affordable housing clearly expressed by the acronym BANANA = ‘Build Absolutely Nothing Anywhere Near Anything!’ Have additions to this list?

5. Manufactured Housing Association for Regulatory Reform (‘MHARR’) & Manufactured Housing Institute (‘MHI’)

*********************************************************************

Chapter # 2

Near Perfect Storm Manifesto now Manufactured Housing’s Jeremiad? *

‘The Near Perfect Storm Manifesto’ was distributed, along with a cover letter, to 26 business stakeholder leaders active in the manufactured housing industry and landlease community (‘LLCommunity’) real estate asset class. Fully half these men and women, mostly corporate stakeholders, from California to New Jersey, responded to the manifesto with comments like these:

• “That is a great read, really sums up what’s happening and how important it is some kind of action be taken (soon).”

• “(Manifesto) analyzes industry’s predicament fairly well, but stops short and pulls punches when it should bust it wide open! Looks like (no one) is willing to tackle the major problems the industry is facing; meanwhile, things keep getting worse.”

• “I’ve read ‘The Near Perfect Storm Manifesto’. I share your concerns, predictions, and necessary steps that need to be taken, specifically 1) getting MHI & MHARR to agree on a consistent message to HUD; 2) press for appointment of a (non – career) administrator to guide the MHCC; 3) (ensure) full implementation of the MHIA of 2000; and, 4) (implement) an image campaign.
&.
“I do think there needs to be significant improvements and use of the MHCC –
and it starts with a unified industry.”
&
• “If MHARR & MHI can’t get together to get the job done, perhaps we need a new national trade advocacy body to effectively represent our business interests.”

• “It’s statistically accurate we’re headed straight for extinction…it could happen sooner – 2015! DRASTIC measures need to be taken IMMEDIATELY by national industry leaders, and at the local level, by all of us.”

• “Overzealous and self – promoting bureaucrats/politicians have destroyed many industries, therefore the MH guys should not feel singled out. Look at the cost of automobiles. India now as a car for $2,000 – but you’ll never see one in the U.S. Government regulation will prevent it.”

• “…you cannot beat HUD staff. If you could not win under the Bush Administration, you have no chance with Obama. They do not really want affordably constructed housing. They want to subsidize expensively constructed homes.”
Vs.
“The approach that HUD is the enemy does nothing to help the cause or change anything – all that attitude does is stand in the way of meaningful change. It’s a distraction.”

• “The death sentence might have been imposed on manufactured housing the day in 1973 the industry went to Congress and asked the politicians for regulation. Like death row inmates, it took 40 years for the execution. Government cannot help but add cost, and eventually those costs add up.”
Vs.
“We’ve got affordability of product down pat – financing drives this industry…”

• “the MHIndustry needs to either find a way to succeed with more expensive housing or have Congress repeal the HUD Code law and return regulation to the states.”

How many of these observations, opinions, and suggestions ‘strike a nerve’ with you? Did you notice, while a lot of business angst was expressed, there’s also disagreement on different issues among businessmen and women in the MHBusiness?

OK, so where do we go from here? That’s really up to you. If the preceding remarks have motivated you to become involved, in some fashion, and make your views known – and or willingness to participate, respond directly to this Blog or correspond via GFA c/o Box # 47024, Indianapolis, IN. 46247. The third chapter of this MHJeremiad will unfold during the next 30 days, and be featured in the January 2010 issue of a newly configured Allen Letter professional journal for the MHIndustry & LLCommunity asset class!

January’s Allen Letter is the sole source of this year’s 21St annual ALLEN REPORT (a.k.a. ‘Who’s Who Among LLCommunity Portfolio Owners/operators throughout North America!’); and, will contain special features describing the new Community Series HUD Code homes (Don Westphal), Small LLCommunity Owners Forum (Joanne Stevens, CCIM), and ‘Taking LLCommunity Statistics to the Next Level’ (Bruce Nell). Subscriber? If not, phone (317) 346-7156 and do so today!

But know what? There’s yet more to cover in this Chapter # 2 of our industry and asset class’ final – or first, chapter describing its’ demise or latest renascence – to last another 50 years! The previous quoted responses notwithstanding, there’re two points to be made before bringing this chapter to a close.

First; ‘The National Manufactured Home Construction and Safety Standards Act’, as amended by ‘The Manufactured Housing Improvement Act of 2000’ (‘MHIA@2000’), contains two ‘findings’ by Congress: “Manufactured housing plays a vital role in meeting the housing needs of the Nation; and, manufactured homes provide a significant resource for affordable homeownership and rental housing accessible to all Americans.”* One sure would not know that at present, given the extremely poor state of economic affairs throughout the manufacturing and distribution segments of the HUD Code housing.

Second; Congress sets forth eight ‘purposes’ for this title, the MHIA@ 2000; of which I’ll quote three that relate to what’s been described in this DRAFT and Blog:

• “to facilitate the availability of affordable manufactured homes and to increase homeownership for all Americans;

• to establish a balanced consensus process for the development, revision and interpretation of Federal construction and safety standards for manufactured homes and related regulations for the enforcement of such standards.

• to ensure the public interest in, and need for, affordable manufactured housing is duly considered in all determinations relating to the Federal standards and their enforcement.”

The first of these purposes, in my opinion, relates to the total lack of promotional effort on the part of anyone at HUD, to ensure our nation’s home buying public is well aware, the only factory – built housing type in the U.S., built to a Federally pre – emptive building code, is the most affordable, transportable, non – subsidized, high quality, energy efficient, green housing available anywhere, anytime!

The second purpose relates to the Manufactured Housing Consensus Committee or MHCC. This body, in the eyes of many in the manufactured housing industry, has evolved into a political football – from the manner in which its’ members are selected by HUD, to perennial battles regarding how to develop, revise and interpret Federal construction and safety standards.

The third purpose relates to the dire and pressing need at HUD for “…a noncareer administrator within the Department to administer the manufactured housing program” – for which a funding mechanism is already in place; and not only that, “pay expenses (salary) referred to in that (a previous) paragraph which shall be exempt and separate from any limitations on the Department regarding full – time equivalent positions and travel.” Reads like a ‘ticket to ride’ to me! So, why won’t HUD execs appoint a noncareer administrator who’ll convey MHIndustry’s pressing concerns onto the Department’s policy level, rather than continuing to rely on a career employee to do so? They’re not saying, and I have a copy of the letter that makes that point very clear.

But all is not lost! There are indeed bright signs in and about the MHIndustry and LLCommunity asset class! In summary, here’re some of the emerging and existent new trends:

• In the face of little to no chattel (personal property) mortgage sources of funds, many LLCommunity owners, large and small, now actively market and sell new and resale homes on – site, often self – financing them in either a ‘captive finance’ fashion (i.e. where third party collects mortgage payments and services the loan) or a ‘buy here – pay here’ format, in which the property owner does so.

• Nearly three dozen Business Development Managers (‘BDM’), since early in 2009, have ably represented more than a dozen HUD Code home manufacturers, building their firm’s market share of new HUD Code homes sold into LLCommunities nationwide! For a free list of these BDMs, call (317) 346-7156.

• For the first time in years, MHRetailers are actively seeking out and buying small to mid – sized LLCommunities in relatively close proximity to their salescenters. Why? The land & home business has about dried – up for the time being, for obvious reasons, and MHRetailers are relearning the LLCommunity business they’ve ignored, for the most part, for the past decade.

• As more and more major HUD Code home manufacturers liquidate, new HUD Code home manufacturers are springing up around the country. One of the most notable recent startups is ADVENTURE HOMES in Garrett, Indiana. The firm ships into 14 states and boasts the most competitive pricing in the HUD Code market today, with 14X70 singlesection homes starting at $15,995 (net pricing) and multisection homes beginning at $19,995. Interested? Call (877) 510-1955 and talk to Greg Pinckney, account sales manager.

And yes, there’re even more timely and motivating examples, but we’ll leave them for Chapter # 3 or this manifesto cum jeremiad description of the MHIndustry in the January 2010 issue of the Allen Letter professional journal for businessmen and women! You don’t want to miss this budding opportunity to help reform and rejuvenate our industry for the 21st Century! Subscribe today.

*****
End Notes.

1. Jeremiad = lamentation, a complaint

2. Quoted from Unofficial Compilation Prepared by NCSBCS: Title VI as amended by the Manufactured Housing Improvement Act of 2000, page # 1.

3. Ibid, Authority to Collect Fee, page # 15.

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

George Allen’s Official Info Blog, for the MHIndustry & LLCommunity Asset Class! Available only at the MHIndustry & LLCommunity website: community-investor.com
or contact the author/blogger via (317) 346-7156 &r Box # 47024, Indpls, IN. 46247

What Will the Landlease Community Asset Class Look Like by Year 2020 ?

‘A Retrospective View of the Past Decade & Present,
Envisioning Our Business Model in the Future!’

Special Insertion Announcement. This Blog form

did not allow 2010 & 2020 columns to appear,

so – if you want ‘complete blog’, call (317)346

7156 or email gfa7156@aol.com and request it

for Free.  George Allen, CPM & MHM

Most landlease (nee manufactured home) community aficionados know and tout Manufactured Housing Institute’s (‘MHI’) National Communities Council (‘NCC’) division, founded in 1996, as primary national representative of, and advocate for, the estimated 50,000 properties comprising this unique real estate asset class. Not as many folk, however, are as familiar with Urban Land Institute’s (‘ULI’) Manufactured Housing Communities Council (‘MHCC’), founded during 2004, & widely viewed as the income – producing property type’s de facto Think Tank, comprised of many of the brightest and best landlease community (‘LLCommunity’) owners/operators in North America.

On November 3, 2009, 40+/- members and guests of the MHCC, half of whom were NCC members, convened at Westin Market Street Hotel in San Francisco, CA., for a daylong meeting. Key presentation & discussion topics highlighted morning agenda:

• Selling the Benefits of Landlease Communities in a Challenging Economic & Legislative Environment, facilitated by Joe Adams, PHC, and president of The Housing Marketplace in Ashville, NC.

• Stop the Attrition: Resident Retention from Landlease Community & Apartment Perspectives, jointly presented by Bill Cramer, CPM® & MHM, from Pittsburgh, PA., & Gene Powell, CPM® of Bend, OR.

• Are You Reaching Your Customer? Using Social Media & Search Engine Optimization to Maximize Your Company’s Marketing Effectiveness, led by Tim Ware, owner of HyperArts, from Oakland, CA.

The most stimulating group discussion of the day, however, occurred during the lunch hour when Randy Rowe, founder and chairman of Green Courte Partners, LLC, headquartered in Lake Forest, IL., challenged landlease community owners/operators to imagine and defend what they think our unique income – producing property type business model will look like in ten years, by year 2020!

As was soon determined; one way to approach this challenge, is to ‘look back’ as we ‘looked forward’- from today, identifying changes – or not, relative to specific foci; which in turn, might serve as precursors to what could materialize during the next ten years, to nearly 2020. Here’s the Baker’s Dozen focus areas we identified and discussed:

1999 2009 2019

1. 80%+ multisection homes increasingly more continuation of this
& 20%- singlesection singlesection homes affordable trend

2. prevalence of land/home prevalence of on – site on – site brokerage of
packages among retailers sale of new & resale homes new & resale homes

3. abundance of chattel $ scarcity of chattel $ chattel $ on – site via
lenders & cash flow

4. ‘developer series’ homes ‘community series’ homes rehab of all homes
by design for land/home by design for LLCommunity already on – site

5. vacant rental homesites prevalence of on – site LLCommunities as
filled by MHRetailers sales via BDMs* & staff as new MHRetailers

6. consolidation of retailers regional more than national continuation of
& LLCommunities LLCommunity consolidation consolidation

7. relatively few ‘park’ more publicity relative to continued pressure to
closures across U.S. ‘park’ closures & ROCs* close or convert ROC

8. traditional print ads widespread web marketing web marketing and
social networking

9. home manufacturers = LLCommunity owners = shared influence and
major influence & $ emerging influence & $ leadership of industry

10. good LLCommunity $ some LLCommunity return to widespread $
& occupancy health foreclosure & forbearance & occupancy health

11. no- to- few RV parks in the many RV parks now in the continued presence of
MH rental homesite mix MH rental homesite mix the RV/MH site mix

12. no-to-few rental homes increasing number of rental no-to-few rental
on – site in LLCommunities homes in LLCommunities homes in LLComm.

13. OK demographics with waiting for newlyweds to great demographics
‘newly weds/nearly deads’ return & ‘boomers’ retire! from young to old!

To be sure, there’re additional business foci we could have- maybe should have, given more time, been included on this interesting list, e.g.

• Major influence & presence of CMBS* in 1999 – but no longer a factor. Future?

• The evolution – or not, of new HUD Code home installation standards and enforcement procedures, especially as this matter relates to passage of the Manufactured Housing Improvement Act (‘MHIA’) of 2000 – yet to be fully implemented, (Yet another apropos ‘business focus!) intended to segue our industry from the ‘trailer business’ to the ‘housing business’

• We’ve gone from a half dozen print trade press publications to three in just one year; but are seeing emergence of online ezines and newsletters. Staying power?

• Decreasing support for regional home shows (e.g. demise of Midwest MHShow in Louisville, KY) to state – hosted symposiums/showcases of new homes

• Professional property management too continues to evolve, from the thin presence of 250 CPMs®* in 1999, to200 ACMs®* and nearly 1,000 MHMs* today. Next?

• And how ‘bout these two perennial bugaboos: good & bad industry image, and increasing government regulation at all levels?

Yes, all these beg that seminal question: ‘Where will these 21, and additional, foci be by year 2020?

This has been an inside look at what goes on in an industry Think Tank manned by individuals whose livelihoods, careers, fortunes, and business success or failure, depends on well – knowing: ‘Where we’ve been’, ‘What we’re about today’, and Where we surely hope to be tomorrow!’ If you’d like to become involved in these timely and strategic discussions, consider joining MHI’s NCC, as a direct dues – paying member, by phoning Thayer Long @ (703) 558-0678. And for membership information relative to ULI’s MHCC, contact Joanne Stevens, CCIM® & ACM® via (319) 378-6786. How’s this for a BONUS? During mid – April 2010, both groups will officially combine their Spring meetings at MHI’s annual Manufactured Housing Congress in Las Vegas! If you’re truly active in the LLCommunity asset class, you can hardly afford NOT to be present, doing your part to influence the present and future of the MHIndustry and our real estate asset class. For information on this historic event, again, contact Thayer Long at the aforementioned phone number or via www.manufacturedhousing.org

This too, is a working document for the HUD Code manufactured housing industry and landlease (nee manufactured home) community real estate asset class! If you’d like to input your thoughts, ideas, suggestions, critique, etc., prior to the above – announced joint meeting of the NCC & MHCC, contact Thayer Long, Kenny Lipschutz (chairman of the MHCC) of Brookside Communities in MI. @ (248) 645-1077, or the author of this feature.

End Notes:

• BDM Business Development Manager of HUD Code home manufacturer
• ROC Resident Owned Community, usually as cooperative or condo
• CMBS Commercial Mortgage Backed Securities
• CPM® Certified Property Manager member of the Institute of Real Estate Management (‘IREM’)
• ACM® Accredited Community Manager certification designation via auspices of the Manufactured Housing Educational Institute (‘MHEI’)
• MHM® Manufactured Housing Manager certification designation via auspices of PMN Publishing

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

Visit his website: www.community-investor.com and Blog
Email: gfa7156@aol.com

What follows is an edited version of email correspondence recently received from a veteran portfolio owner/operator of landlease (nee manufactured home) communities.

                                                             *****

“Know what George? If I had the opportunity to sit down and ’talk shop’ with  Kevin Clayton, president & CEO of Clayton Homes, Inc., here’s what I’d say and suggest to him, then patiently await his reply”:

             ‘Tell me if I’ve got this right. Vanderbilt Mortgage and Finance, Inc., and 21^st Mortgage Corporation, finance HUD Code manufactured homes; the former, financing said homes only for Clayton retail salescenters; the latter, financing these homes for everyone else, maybe soon via the newly revised FHA program. Meanwhile, 21^st Corp’s chattel finance program isn’t very popular with LLCommunity owners, given its’ plethora of contractual ‘gotchas’.

            It’s also my understanding, Vanderbilt isn’t financing many manufactured homes these days, because their underwriting guidelines (i.e. credit score, income/debt ratios, down payment) are so tight – to cover cost of possible defaults and repossessions, prospective Clayton homebuyers are opting to buy foreclosed-on, stick–built houses for $.50 on the dollar. Result? A greatly reduced demand for new manufactured homes!

Amidst all this, I know more than a few landlease community (‘LLCommunity’) owners interested in becoming bona fide Clayton retailers; willing and able to sell the firm’s new ‘community series’ homes on–site, with chattel financing provided by Vanderbilt Mortgage and Finance, Inc.

Given the accuracy and timeliness of the previous paragraphs, why wouldn’t  Clayton Homes and Vanderbilt Mortgage be interested, even eager, to craft a new and unique business model that’d…

1)      Sell and finance many more affordably-priced new ‘community series’ manufactured homes, via Clayton–affiliated retail salescenters located within LLCommunities!

2)      Ensure LLCommunity rental homesite fees are in sync with other forms of ‘for sale’ and rental housing in the same local housing market; and, new home price points are truly affordable, in relation to the prevailing Area Median Income (‘AIM’) per postal zip code; all with the aim of getting the ‘site rent meter running’ via increased occupancy!

3)      Adequately protect financial interests of the lender, regarding these homes, via written agreement with the LLCommunity owner, so mortgage underwriting guidelines can be relaxed and more homes sold!

If interested in discussing this further, Kevin; let me know, and I’ll bring along other veteran LLCommunity owners who’ve already expressed strong interest in creating this  WIN – WIN – WIN  (i.e. manufacturer – lender – property owner) partnership!’   SR

                                                           *****

Know what? This new and unique business model isn’t a novel concept, not by a long shot. It was broached earlier this year, shortly after Clayton Homes named its’ first two Business Development Managers (‘BDM’*), and about the time the firm introduced its new E Home (nee Evolution series home). Interest is there! But at least one implementation challenge lies with Clayton in-house retailers eschewing ‘new home sale competition’ from what they perceive as interlopers, LLCommunity owners with Clayton-affiliated retail salescenters on–site.  It’ll be interesting to see if and how Kevin responds to this earful.

What are your thoughts about this lively matter? Good or bad for the MHIndustry & LLCommunity asset class, and why? Always appreciate your critique and input.

End Note.      For a free list of all BDMs marketing HUD Code manufactured homes into LLCommunities, call (317)346-7156 and request it.

                                                           *****

George Allen via or gfa7156@aol.com or the MHIndustry HOTLINE:

(877)MFD-HSNG or 633-4764 or via GFA c/o Box # 47024, Indpls, IN. 46247

                                                           *****

Ever plan a party and not have everyone show up? Worse; ever schedule or facilitate a business education and networking event, only to find those ‘who need it most’ absent? Well, if you answered the second query with a ‘Yes’, you’ll understand and appreciate the frustration embodied in the following paragraphs…

This particular annual multi-state association business, education and networking meeting was not my event. However, I’d been asked to deliver the keynote ‘State of the Industry & Asset Class’ address one day, and the same educational session twice the following day. Don’t misunderstand; overall meeting attendance was healthy, with more than 200 businessmen and women present, and 50 eager learners in each of the two like sessions I taught.

But here’s the rub. With HUD Code manufactured housing experiencing an historic nadir of annual new home shipments, and many of the asset class’ largest landlease communities struggling with high turnover and marginal occupancy levels – in large part due to too high rental homesite fees, it’s time to face and resolve perennial image, finance, and customer service issues! But guess what? Some, no – make that several, of the most notorious issue offenders, though invited and encouraged to participate in this timely regional affair, declined to do so!

Why? I doubt we’ll ever know for sure, but I’m confident their reason or reasons are included among the following excuses, as they…

• View themselves as being ‘above the fray’, even while suffering along with their peers; but counting on the business cycle to eventually return them to prosperity

• Know it all! After all, they’ve been in business for decades, if not family generations; so what could they possibly learn from or with their peers?

• Have heard and tried or discarded ‘corrective formulae and solutions’ before, so figure there’s nothing new to learn under the sun.

• Have been enthused, in the past, with ‘one or another or more’ regional and national business improvement initiatives, only to watch them die – for a variety of reasons (e.g. lack of funding, focus dispute, even selfish feuding), before ever getting started.

The unfortunate truth is, with sole exception of the last excuse, they were wrong not to attend and learn, as well as support their state trade presence! A special effort was made by meeting planners – and maybe just inadequately communicated, certain key performance indicators, in some cases mathematical formulae and models, would be shared ‘for the first time’, enabling attendees to evaluate present business holdings against industry and regional norms (e.g. homesite rent level ‘acid test’; an Industry Standard Chart of Accounts with Operating Expense Ratios or OERs); and, how to affordably price new and resale homes marketed on site in LLCommunities, using AGI (annual gross income) or AMI (area median income) as starting points; and, ‘How to Negotiate an Effective Three Party Financial Partnership Among One’s Local Bank or S&L, MHRetailer, and Landlease Community Selling New & Resale Homes On-site!

Frankly, this insider, and previously proprietary, confidential information deserves as broad and timely coverage as possible. Encourage your state MHAssociation executive to plan and host a one or two day Super Symposium & Showcase of New HUD Code Homes during 2010! For meeting planning guidance, contact George Allen, CPM & MHM @ (317) 346-7156 or Jim Keller of IMHA/RVIC in IN. @ (317) 247-6258X12.

End Note.

* lament, as to ‘regret’. Webster

George Allen’s Official Info Blog for the MHIndustry & LLCommunity Asset Class!

PRINT & SAVE THIS BLOG – for your use today, tomorrow & beyond!

Title:

‘Influencing What Does & Doesn’t Happen
to the MHIndustry & LLCommunity Asset Class’

Whether a veteran purist, dedicated Luddite, or forward–looking visionary in the HUD Code manufactured housing industry – or sister segments sometimes called the ‘aftermarket’, and the landlease (nee manufactured home) community real estate asset class, YOU have a responsibility to influence what does and does not happen to all of US! And now, given the content of this Info Blog, here’s a practical resource with which to truly influence what does and doesn’t happen to US! The question is; are you, and will you, exercise this ‘responsibility to influence’, on regional and national business scenes through active participation in state and national MHAssociations and other means; or just lie back, content with what’s going on around you; or at worst, pursue proprietary MHBusiness interests with no ‘giving back’ to the industry and asset class where you make your living?

Following are the major opinion shapers, government lobbyists, trade bodies, and education outlets serving the MHIndustry & LLCommunity asset class. The list is near complete and comprehensive. Think someone or something is missing? Maybe they are. But ask yourself; ‘When was the last time I saw or heard said entity present and working on behalf of our industry and asset class on the regional or national scene?’ Following bodies are not listed in any particular order:

• Manufactured Housing Association for Regulatory Reform (‘MHARR’), a.k.a. MHIndustry’s ‘watchdog’ in Washington, DC. Comprised only of HUD Code home manufacturers & interested state MHAssociations. (202) 783-4087. Danny Ghorbani. Call & ask to receive their periodic FAX messages & reprints.

• Manufactured Housing Institute (‘MHI’), headquartered in Arlington, VA. Advocates in behalf of every segment of the HUD Code manufactured housing industry, including most state MHAssociations. (703) 558-0400. Thayer Long. Call to join the organization and attend periodic meetings during the year.

• National Communities Council (‘NCC’) division of MHI. Sole representative for 50,000+/- LLCommunities throughout the U.S. & sponsors an NCC Forum @ MHI’s annual MHCongress in Las Vegas. (703) 558-0678. No director at this time. Most effective means for LLCommunity owners to influence their future!

• Urban Land Institute’s Manufactured Housing Communities Council (‘ULI’s MHCC’) in Washington, DC. Described as MHIndustry’s de facto ‘Think Tank’ and LLCommunity owners/operators’ ‘foot in the door’ with U.S. land developers (248) 645-1077 Call Kenneth Lipschutz, chairman, to join ‘best & brightest’.

• Manufactured Housing Educational Institute (‘MHEI’) education arm of MHI; developing and effecting trade training programs for MHRetailers, LLCommunity managers (e.g. ACM) & others. (703) 558-0400 Ann Parman or chairman Joe Adams @ (828) 891-3911. Suggestions for a webinar & other training programs?

• Community-Investor.com nee PMN Publishing. Sole source of professional property management, development, and investment textbooks, standard forms, and Manufactured Housing Manager (‘MHM’) certification, all geared to LLCommunity asset class. (317)346-7156. Susan McCarty

• Manufactured Housing Executives Council (‘MHEC’), de facto council serving state MHAssociation executives; meets during MHI meetings. (919) 872-2740. Brad Lovin, chairman. This is the body to encourage to participate in national trends like the Super Symposium & New Home Showcase, on the state level!

• Factory–Built Owners of America (‘FBOA’) in TX. Sole quasi – consumer (i.e. manufactured home owner) & MHBusiness body actively working to bring these parties together in a positive fashion through education and communication. (210) 258-1674. Contact Deb Ahrens to join and receive their newsletter.

• The RV/MH Heritage Foundation, Inc., Elkhart, IN. The only legacy body in North America preserving the history of the RV & MH industries and their respective realty ‘aftermarkets’. Annual Hall of Fame induction banquet in August at the museum, library facility. Donate $! (574) 293-2344. Carl Ehry

• Systems Building Research Alliance (‘SBRA’) in NY, is a non–profit organization developing new technologies to enhance factory–built structures. Think: the SOILS Project! Have ideas or questions? Give them a call! (212) 496-0900. Emanuel Levy, director.

• Small Community Owners Forum (‘SCOF’) in IA, not a formal, organized body at this time, but the beginning of a national presence for owners/operators of ‘100 sites and smaller’ LLCommunities. (319) 378-6786. LLCommunity owner Joanne Stevens, ACM, PHC, CCIM. Contact & encourage her to this end!

• ‘Community series’ manufactured homes. Another recent, needed debut on the national MHIndustry scene. Donald C. Westphal of MI., heads this timely effort to research, document, and describe the unique sizes, features and specification characterizing new homes to be sited within LLCommunities. (248) 651-5518.

• Annual ALLEN REPORT is undergoing gradual transformation. For 20 years it’s been: ‘Who’s Who Among LLCommunity Portfolio Owners/operators in North America!’ Efforts afoot to take its’ benchmark statistics to a higher level. To help? Contact George Allen (317) 346-7156 & Bruce Nell (614) 540-2950.

• Business Development Managers (‘BDM’), a national trend among HUD Code home manufacturers to market more new homes to be sited in LLCommunities. No formal organization, but Official BDM list is updated several times each year. Want to be included? Call (317)346-7156.

• George Allen’s Official Info Blog for MHIndustry & LLCommunity Asset Class. Only electronic cum print, business to business, trade media compiled and published daily (via email), weekly (via this blog) & monthly (via Allen Letter & the Allen CONFIDENTIAL!) by a Realtor®, CPM® & MHM® fully engaged nationally, in this industry and asset class, for 30 years! (317) 346-7156.

Know what? There’re additional organizations, trade bodies, and business entities that could be included in this ‘responsibility to influence’ enabling list. And perhaps, when the day comes that these groups step forward from the manufactured housing underground, where they educate about ‘mobile home parks’ and publish material by folk not associated with the MHIndustry & LLCommunity asset class, and become actively involved, as dues–paying members, in existent trade organizations, trade bodies and business entities that influence our collective future, we can double this list in size! If you know of any of these folk, encourage them to become ‘influencers’ on the national scene…

As usual, your response, critique, and suggestions are welcome!

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