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

Blog Column # 283 Copyright 2014 9 February 2014

Perspective. ‘Land-lease-lifestyle communities, a.k.a. manufactured home communities & earlier, ‘mobile home parks’, is the real estate component of manufactured housing.’

Purpose of this blog. “It’s the national advocacy voice, statistical research reporter, & communication resource for LLLCommunities, of all sizes, throughout North America!’

Input this blog, & Affiliate with the Community Owners (7 Part) Business Alliance, a.k.a. COBA7, via the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

I.

MHConspiracies # 101 & 102

II.

I Feel Change Coming On….

III.

JP Morgan Chase Funds ROC Conversions!

IV.

FLASH NEWS!
60,228 &/or 60,210?
(You don’t want to miss this)

I.

MHConspiracies # 101 & 102

It wasn’t long after blog # 281 was posted two weeks ago, on the community-investor.com website, before two distinct types of telephone calls and email messages began arriving at our office in central Indiana.

One type caller expressed enthusiastic appreciation for our publicly identifying the proverbial ‘elephant in the room’, where ‘affluence gerrymandering’ has long been and continues to be, a serious but ignored concern regarding most national meetings of certain industry advocacy bodies. For those reading this, who didn’t peruse the earlier blog posting, ‘affluence gerrymandering’ was defined as being ‘The artful limiting of meeting attendance by keeping the cost of member participation higher than necessary.’ Hmm. Might we describe this then, as MHConspiracy # 101? No. Conspiracy is too strong a word choice here, being defined as ‘a plan or agreement formulated, especially in secret, by two or more persons, to commit an unlawful, harmful, or treacherous act.’ However, IF ‘the plan or agreement’ is indeed to ‘limit the number of potential decision maker members involved in national advocacy meeting proceedings’; well, that could prove ‘Harmful’ to the work, even the greater purpose of the trade or advocacy group as a whole! SO, is there a more appropriate word choice than conspiracy?

‘Cabal’ fits better, given its definition as ‘a secret scheme or intrigue’. For example, when was the last time national advocacy body leaders or staff asked us, who’re direct, dues-paying members and certified representatives, if we enjoyed, let alone were/are able to afford, spending ‘big bucks’ for two days of committee meetings in Sunbelt Mecca’s and high-priced downtown locales, instead of patronizing more affordable venues? They haven’t, don’t, and likely won’t! So, with that said, meet MHCabal # 101! But this telling question begs answering: Is indeed, ‘affluence gerrymandering’ Harmful to the Work and Purpose of National Advocacy Body(ies)?
I say YES! How ‘bout YOU? And if you agree ‘affluence gerrymandering’ is Harmful, guess who can do something about it? YOU, if a direct, dues-paying member of such a national advocacy body.

The other type caller had a markedly different focus, describing yet another alleged conspiracy (Again, their word choice, not mine – yet), I’d long heard whispered, but hoped to be untrue. And here I think, if indeed true, ‘conspiracy of silence’ is the most appropriate word choice, given this definition: ‘…a usually secret or unstated agreement to remain silent about something that might be damaging or harmful to those participating in the agreement if disclosed.’ How so? Well these latter callers described a sorry duplicitous matter, using words to this effect:

The manufactured housing industry has long suffered home builder competitors, and real estate-related detractors, inside and around the Washington, DC beltway.

And while it’s difficult enough, to offset negative image stereotypes foisted on the manufactured housing industry by itself, dealing effectively with arcane and esoteric interpersonal relationships and intrigues among outside detractors and industry insiders – with oft harmful results to manufactured housing – is a daunting, under-addressed task! Like, ‘Who does one trust?’ Heretofore, ‘You didn’t!’; and going forward, ‘You can’t!’, at least for the time being, or until corrective ‘change’ is deemed necessary, effected, and a new start begun….

Frankly, the ‘conspiracy of silence’ label aptly describes how disparaging, scheming parties and others, seem frequently to be ‘reading our strategic planning minds’, before and during lobbying with legislators and federal regulators – with either ‘no’, bad, or marginal consequences to the manufactured housing industry! Examples? Look no further than the pitiful lack of progress implementing the Manufactured Housing Improvement Act of 2000 during the past 13 years! During year 2013, the botched – accidental or otherwise – appointment process to seat an agreed upon Non-career Administrator for the Manufactured Housing Consensus Committee. And then there was the necessary rush to disabuse the Government Accounting Office (‘GAO’) of the erroneous survey notion that doing away with the HUD-Code for manufactured housing, would have little to no effect on the annual shipment volume of new homes! Well, nothing much has changed, that I see, so the ‘conspiracy of silence’ continues in and around the DC beltway….

What do YOU think? Depending on personal and corporate perspectives, relative to national advocacy matters regarding HUD-Code manufactured housing, and whether you’re dealing with these matters from afar or up close, you’ve surely experienced, maybe even dealt with, one or another aspect of home builder, real estate, and insider detractions, relative to our industry and its realty asset class, the land-lease-lifestyle community. IF so affected, have YOU then ever wondered – better yet, known firsthand, why neutralizing such contretemps (e.g. ‘unexpected & embarrassing events or mishaps’), like the ones just described, have been nigh impossible to prevent to date? Your answer to that question clarifies whether all this is simple connivance, a serious collusion, or double dealing conspiracy of silence, a.k.a. ‘MHConspiracy # 102’!

II.

I Feel Change Coming On….

Coming off a failed national Dodd-Frank amendment lobbying campaign, as year 2013 ended, the manufactured housing industry Needs Change on several fronts, not simply, expensively, and expansively ‘More of the Same’ – as is being video ballyhooed today! For example; how many reading this blog were present at the industry meeting in San Antonio, TX., 1 ½ years ago, and recall a Midwest state MHAssociation executive famously asking aloud:

“What’s Plan B, if the Dodd-Frank amendment lobbying campaign, in Congress, fails?”

There was no Plan B then, nor is there one now – that we’ve heard, other than the above-referenced cry for ‘More of the Same!” NO; what the HUD-Code manufactured housing industry Needs NOW is CHANGE, a new Plan B, replete with Lessons (just) Learned on Capitol Hill during the past six months! And Please, NO more ‘throwing good money after bad’ WHY? Well, in the minds of some, there might just be a MHConspiracy of sorts afoot within the housing finance segment of our industry, and draining our resources at this time, will only weaken us as we move into the future. But that story is not yet ready to be told, by me anyway….

But if the cryptic message describing ‘MHConspiracy # 102’ is accurate – and it is – we need a manufactured housing advocacy body(ies) housecleaning of sorts, the sooner the better! ‘Business as Usual’ will only take us as far as ‘More of the Same’ – not far, not effective at all! And that, blog flogger (‘reader’) is where we are today, and that’s Unsatisfactory to many grassroots businessmen and women across the U.S.

SPECIAL ANNOUNCEMENT. If YOU want to ‘speak your mind’ about a MHIndustry-related issue, take time to organize and pen your thoughts. Then send your 200-300 word op/ed (opinion/editorial) piece to gfa7156@aol.com, for consideration, and possible inclusion, in a future blog posting at this website: community-investor.com

Now, back to the timely and thought-provoking topics at hand….

Who, What, When, Where, How, & How Much Change? Hey, I’m not an elected leader of this not so merry band. But I am a direct, dues-paying member of one of three national manufactured housing-related trade and advocacy bodies (NOT including the Community Owners Business Alliance, or COBA7, as it isn’t a national, not for profit or non profit advocacy entity), and One who isn’t planning on attending any more of their meetings anytime soon.! Why? Should be obvious to all by now: MHCabal # 101, MHConspiracy # 102, maybe even a MHConspiracy #…..

Now, if someone wants to pay my registration fee and travel expense (Just kidding!) – or at least promise the fees and expenses will be reasonable from this time forward; and, that we’ll ALL sit down in a day or two long problem-solving session or MHInitiative®, OPEN to bona fide, direct, dues-paying members of the host national advocacy body(ies), to deal with MHConspiracy # 102, ‘Count me in!’ – but it sure won’t be as soon as this week or next will it? And how ‘bout ever?

III.

JP Morgan Chase Funds ROC Conversions!

ROC USA® was recently awarded $MM by JPMorgan Chase Foundation to help more co-ops buy their land-lease-lifestyle communities (A.k.a. manufactured home communities). Most of the funds will be used as equity in the firm’s community purchase financing subsidiary, ROC USA Capital, and shared with two other nonprofit community development lenders: Leviticus 25:23 Alternatives Funs & Mercy Loan Fund.

ROC USA® is unique among resident-ownership service providers, in that it provides expert assistance and proven systems (before and after residents purchase) swell as financing (for due diligence, acquisition, & rehab) to deliver resident-ownership effectively and efficiently Since it launch in 2008, ROC USA® has helped co-ops (i.e. ‘cooperatives’) purchase a LLLCommunity every 36 days, with transactions ranging from a half-million dollars to $23 million in value.

For more information, contact Paul Bradley via (603) 856-0709 or visit rocusa.org

IV.

FLASH NEWS!
60,228 & or 60,210?

READ CAREFULLY & YOU DECIDE
(Hint: There’re three discrepancies here, not just one)

An MHARR Press Release dated 3 February 2013 announced, “Cumulative 2013 industry production thus totaled 60,228 homes, an increase of 9.7% over the 54,881 homes produced in 2012.”; & continued, “2013…becomes the first year since 2008, that annual industry production has broken through the +/- 50,000-home level (sic).” *1 On request, MHARR clarified ‘their 60,228 number’ on 7 February, as follows: “MHARR’s numbers are based on official HUD monthly production and shipment reports: The total for 2013 is 60,228, as reported by MHARR.”

MHI’s Monthly Economic Report distributed 7 February 2014 announced, “Year to date shipments totaled 60,210 homes compared with 54,891 homes in 2012, a net increase of 9.7 percent.” On request, MHI clarified ‘their 60,210 number’ on 7 February, as follows: “The distinction between MHARR’s number and MHI’s number is nuanced. The 60,228 figure is the total production of HUD Code homes whereas the 60,210 is the number of homes shipped. The slight difference is a result of ‘destination pending’ and other inventory and timing issues. In this instance, both numbers are correct but are counting two different items – production versus shipments.”

In fairness to MHARR, I’ve not had an opportunity to ask if they agree with the explanation put forth in the previous paragraph. And frankly – to me anyway – that’s not the issue anyway. Rather; it’s about ‘Correcting a minor but perennial reporting procedure error (#1)’, and HOW the HUD-Code manufactured housing industry will ‘Keep Score’ going forward. Will it be production or shipments numbers; and or, ‘HUD monthly production and shipment reports’ vs. what?

By careful reading, did you catch the other discrepancy (#2) in reported production/shipment numbers from these two national advocacy bodies? Look again, and check-out the reported annual total of new HUD-Code homes produced or shipped during year 2012? Was it 54,881 as reported by MHARR, or 54,891 as reported by MHI?

POINT? Last year, in 2012, for unspecific reasons, the two annual manufactured housing production/shipment totals were 10 homes apart; this year in 2013, they’re 18 homes apart! *2 And by the end of year 2014, if the unspecific trend continues unaddressed, and no reporting consensus is achieved, another 80 percent increase, takes us to what, maybe 32 homes? I realize two years don’t make for a trend, but there is no good reason why two national advocacy bodies can’t agree, once and for all, on how to tally and report our industry’s annual production/shipments. And while they’re at it, agree to include an appropriate end or footnote, to said Press Releases and Monthly Economic Reports, clarifying if, whether, and how ‘floors’ were counted and represented in the reported numbers. Do YOU know right now, the effect of that distinction on the 60,228 and 60,210 figures? Not many do….

Why is all this important? Simple. Individuals, journalists, researchers, all Street analysts, legislators, regulators, and others, use our industry stats, so we owe them accurate and clear reporting! For example; the Community Owners Business Alliance, or COBA7, this month, published and distributed its’ annual ‘Official State of the Manufactured Housing & Land-lease-lifestyle Community Asset Class Briefing Outline’ to its’ affiliates. One of the supporting documents, ‘Mobile & Manufactured Housing –related statistics, from 1959 to the Present Day’, cites 54,881 new HUD-Code homes shipped during 2012. So, is the correct reporting, for 2012: 54,881 homes produced and 54,891 homes shipped, or the other way around, 54,881 homes shipped and 54,981 homes produced? Confused yet? You should be. If not, take a gander at end note # 2. If ‘we’ as an industry, don’t understand our production and shipment numbers ‘across the board’, how can we expect anyone else to do so? These present circumstances do not help our industry’s credibility and business image at all.

End Notes:

1. Should have read ‘60,000 home level’, as all the years, except 2009, since 2008, have ‘broken through the 50,000-home level, i.e. 2008 = 81,457; 2009 = 49,683; 2010 = 50,056; 2011 = 51,618; 2012 = 54,881; and, 2013 = 60,228. From MHARR’s aforementioned Press Release dated 7 February 2014. NOTE. This was the (#3) discrepancy hinted at in the title of this part of the blog posting today. GFA

2. Dropping deeper into confusion, contemplate these number relationships:
MHARR = 60,228 homes in 2013; 54,881 homes in 2012
MHI = 60,210 homes in 2013; 54,891 homes in 2012
MHARR’s total annual ‘whatever’ number is ‘18’ MORE than MHI’s in 2013, BUT ‘10’ LESS than MHI’s number in 2012; hence the disparity moves in different directions, two years in a row. What will we find, going back in years?

***

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

Blog Column # 282 Copyright 2014 2 February 2014

Perspective. ‘Land-lease-lifestyle communities, a.k.a. manufactured home communities & earlier, ‘mobile home parks’, is the real estate component of manufactured housing.’

Purpose of this blog. ‘It’s the national advocacy voice, statistical research reporter, & communication resource for LLLCommunities, of all sizes, throughout North America!’

Input this blog, & Affiliate with the Community Owners (7 Part) Business Alliance, a.k.a. COBA7, via the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

I.

How to Complain About the CFPB!

II.

Manufactured Housing Consensus Committee

III.

COBA7 Update. What to Expect in February…

IV.

Grayson Schwepfinger died on 21 December 2013

V.

Next Week? Maybe, MHConspiracy Theories 101 & 102!

___________________________________________

I.

How to Complain about the CFPB!

(That’s the Consumer Financial Protection Bureau)

The House (U.S. Congress) Financial Services Committee wants to hold the Bureau of Consumer Financial Protection (‘CFPB’) accountable for the manner in which they’re enforcing financial regulations initiated by the Dodd-Frank legislation, and how they’re impacting consumers and business owners alike! From the committee’s Press Release:

“The committee’s web form gives individuals the choice of having their story shared publicly or kept confidential. The committee website also allows for individuals who’d rather phone and record their story, about the CFPB’s work, to dial (240) 490-2372 and leave a message.”

It’s worthwhile to simply phone the number and listen to the message. Sounds like businesses just might have ‘a friend in court’, so to speak, where this oversight committee is concerned.

I phoned the above number, however, to learn the committee’s web address, since it wasn’t included in the Press Release. Heard back, and the appropriate website address:

www.financialservices.house.gov/tellyourstory/ (I’ve visited it and it does work!)

SO, if these onerous CFPB regs already affect your ability to engage in Free Enterprise, where your manufactured housing customers are concerned, Tell Your Story Now!

II.

Manufactured Housing Consensus Committee

‘Department of HUD Invites Individuals to Serve on the MHCC’
(from the Federal Registry / Vol. 79, No. 12, page # 3220, dtd. 1/17/2014)

The MHCC is a Federal Advisory Committee that exists under auspices of the Manufactured Housing Improvement Act of 2000. If you’d like to be considered for selection as a member of the MHCC, you’ll have to decide whether you qualify as a

1. Producers/Retailers of manufactured housing.

2. Users/Consumers, e.g. consumer organizations, leaders, homeowners, site lessees

3. General Interest & Public Officials

A sample application form containing information for consideration is available on the HUD Website: hud.gov, or contact the Office of Manufactured Housing Programs via (202) 708-6423. Your application may be accompanied by a cover letter, expressing your desire to serve on the MHCC, as well as your resume’. Your package will be retained, for consideration, for three years.

Nominations (including self-nominations) must be in writing and submitted to: Henry S. Czauski, Acting Deputy Administrator, Office of Manufactured Housing Programs, Department of HUD, 451 7th Street SW, Room # 9168, Washington,. DC 20410-8000

Thoughtfully read what follows in the next paragraph.

In my experience, there’s a stark and discouraging aspect of the MHCC member selection procedure. You’d best have significant political pull, and or strong manufactured housing industry influence in your favor and corner, if you’re ‘throwing your hat in this ring’, the Opportunity to Serve the Manufactured Housing Industry and Fellow Citizens. How do I know? Twice, during the past 20 years, I’ve been so-nominated, once with a U.S. Senator’s support – yet failed to be appointed to the Manufactured Housing Advisory Council to HUD during the 1990s, and the MHCC since year 2000. Each time, I was told in retrospect, my nomination application had been derailed due to, let’s nicely say, ‘industry prejudice’. So, as is oft said, ‘Forewarned is Forearmed’, if you decide to take this heady step.

III.

COBA7 Update. What to Expect in February…

The launch of Community Owners (7 Part) Business Alliance, or COBA7, during December and January, exceeded all expectations; as land-lease-lifestyle community owners/operators & portfolio ‘players’, as well as product & service vendors, even a few HUD-Code home manufacturers (Yes, that’s plural ‘several times over’), affiliated via their choice of Options I, II or III. And close to 100 copies of the 25th anniversary ALLEN REPORT (A.k.a. ‘Who’s Who Among LLLCommunity Portfolio Owners/operators Throughout North America!’) are now in the hands of COBA7 affiliates throughout the U.S. and Canada! Guess one could appropriately and proudly proclaim: MISSION ACCOMPLISHED!

Gotta tell you this too. Most COBA7 affiliates to date, have chosen Option II (That’s the Allen Letter subscription, copy of the 25th annual ALLEN REPORT, & 12 Signature Series Resource Documents, or SSRDs, all for $544.95). And on more than one occasion, registering affiliates have told or written us:

“This is the best $500.00 we’ll spend on LLLCommunity(ies) resources during 2014!”

So, if YOU haven’t yet affiliated, but desire to do so, simply phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Credit card orders Welcome!

And we’re just getting started! Here’s what to expect during the month of February and beyond…. At the Louisville MHShow (Think 48 homes on display, 25% of which were Community Series Homes, 86+/- exhibitors, & 1,500+ registrants by mid-show), COBA7…

• Signed up nearly a dozen LLLCommunity owners/operators willing to share their personal and corporate Lessons Learned as property managers. These experiences will be collected and published in a new book due out later this year. As a COBA7 affiliate, your contributions are especially sought and appreciated. Simply phone the HOTLINE for details.

• Heard from a couple dozen LLLCommunity owners/operators who insist on participating in the national FOCUS Group planned to convene during early April. Again, COBA7 affiliates should use the HOTLINE to ensure they’re on the ‘invite’ list.

• Talked with HUD-Code home manufacturers, especially those displaying Community Series Homes, or CSH Models, regarding the planned – but now likely postponed – MHInitiative® at the RV/MH Hall of Fame on 2/27/2014. Why? Everyone wants to know how to market and sell more new homes into LLLCommunities nationwide, but not while in the presence of their competitors. SO, if you’re reading this and are a HUD-Code home manufacturer, or Business Development Manager, and seriously interested in meeting with me on 27 February in Elkhart, at the RV/MH Hall of Fame, phone (317) 346-7156 ASAP.

• Solicited ideas for topics and speakers to be featured at COBA7’s 23rd annual International Networking Roundtable, 10-12 September 2014. this popular annual event is open to LLLCommunity owners/operators, product/service vendors, and HUD-Code home manufacturers selling into our properties. Again, use the HOTLINE to ensure your firm’s name is on the invitation list.

During February, the second of 12 Signature Series Resource Documents, or SSRDs, will be enclosed with Allen Letter professional journals going to COBA7 affiliates. The first SSRD was 25th anniversary edition of the annual ALLEN REPORT. This time, however, it’s the Official State of the MHIndustry & LLLCommunity Presentation Outline – in a format YOU can easily use to brief your peers, your employees, your bankers, your zoning review board, your community service organizations! No one else, anywhere in the manufactured housing industry, is going to provide you with a more comprehensive collection of timely MHIndustry & LLLCommunity statistics and trends! And in the February Allen Letter itself, there’ll be ‘the list of issues’ identified by LLLCommunity owners/operators responding to the ALLEN REPORT questionnaires last Fall. No real surprises, but certainly some insights into ‘What keeps owners/operators awake at night.’

And know this; we’ve already begun the Direct Mail Questionnaire research pursuant to preparing the 16th annual National Registry of Lenders, for distribution in March of 2014. Just this past week, 50 letters, with questionnaires, were mailed to lenders and brokers specializing in originating acquisition and refinance real estate – secured mortgages for land-lease-lifestyle communities throughout North America. If the need for LLLCommunity mortgage capital is in the near future for you, be sure to affiliate with COBA7, to receive the very first copies of this seminal SSRD. And, if you’re a LLLCommunity $ lender, to ensure you’re included in this year’s edition, phone GFA c/o (317) 346-7158.

The National Registry of Lenders also features a comprehensive list of independent chattel capital providers (i.e. The Big Five + 1 firms), as well as mortgage servicers. This latter information is researched and prepared by Rishel Consulting. To ensure your chattel source info in included in this year’s 16th annual edition, contact Ken Rishel, manufactured housing industry’s person of the year (2014), via (312) 878-2802.

IV.

Grayson Schwepfinger died on 21 December 2013

To his many friends and business colleagues in the HUD-Code manufactured housing industry he was known simply as ‘Schwep’. When inducted into the RV/MH Heritage Foundation’s prestigious Hall of Fame in 1979, he’d already been engaged as a freelance sales trainer, by many of our industry’s pioneers, for more than a decade. And he continued sharing his expertise and experience with ‘newbies to the business’, like this industry observer, right up until a couple years ago, when he was a presenter at the annual International Networking Roundtable for land-lease-lifestyle community owners/operators.

Not only will Grayson’s manufactured housing sales training legacy live on in the minds and practices of his many clients and son, but also through his copyrighted sales training literature in the stacks at the RV/MH Heritage Foundations’ Library in Elkhart, IN. For that matter, one of Schweps many guidelines, and in this case, a Rule of Thumb, is identified as such and published in the Book of Formulae, Rules of Thumb & Helpful Measures – for LLLCommunities & HUD-Code Manufactured Housing, Indianapolis, IN., 2012. On pages 11 & 12, the Schwep Rule of Thumb reads thusly:

‘A manufactured home loan monthly PITI (principal, interest, taxes & insurance) and site rent total together, must be 15 – 20% less in dollar amount, than the monthly rental rate amount for a (3BR2B) conventional apartment unit in the same local housing market’ – for the ‘home & homesite’ package to be competitive.

The 78 pages ‘book of numbers’ is available from PMN Publishing @ (317) 346-7156.

If you’d like to send personal or corporate condolences to Grayson’s longtime companion Marilyn Vogel, I’d be pleased to collect and forward them to her. Just mail same to GFA c/o Box # 47024, Indpls, IN. 46247. Grayson requested no obituary or memorial services in his memory.

V.

Next Week? Maybe, MHConspiracy Theories 101 & 102!

A hint. Affluence gerrymandering is simply the tip of this manufactured housing iceberg.

***

George Allen
Box # 47024, Indpls, IN. 46247
(317) 346-7156.

Blog Column @ 281 Copyright 2014 26 January 2014

Perspective. ‘Land-lease-lifestyle communities, a.k.a. manufactured home communities & earlier, ‘mobile home parks’, is the real estate component of manufactured housing.’

Purpose of this blog. ‘To be the national advocacy voice, statistical research reporter, & communication resource for LLLCommunities, of all sizes, throughout North America!’

Input this Blog, & Affiliate with Community Owners Business Alliance, or COBA7; via
Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 and gfa7156@aol.com

I.

Another ‘Affluence Gerrymandering’ Casualty..

II,

NEW ERA Launch of ‘Community Owners (7 Part) Business Alliance’ has been Astounding!

___________________________________________________________

I.

Another ‘Affluence Gerrymandering’ Casualty…

Just returned home from the Luavul (Louisville) Manufactured Housing Show. A lot of newsy notes to share with you during the weeks ahead (e.g. ‘Guess how many Community Series Homes, or CSH Models, were on display this year?), but suffice it to say for now, this was one frigid – but worthwhile – regional meeting experience! And as a voting member of the Louisville Manufactured Housing Show Committee, I’ll share this with you: Show participation, in terms of display homes (48), exhibitors (80+), and registered guests (1500+) exceeded several previous years of ‘returning to normal’ growth.

If you missed Rishel Consulting’s day long (home finance compliance) seminar, for independent (street) MHRetailers & land-lease-lifestyle community on-site salespersons, just prior to the KY Show, you missed a timely and valuable educational opportunity! Phone (312) 878-2802 to ask Ken – the Manufactured Housing Industry’s Person of the Year!, or his wife Donna, when they’ll be facilitating their next similar opportunity, so YOU can be ‘brought up to speed’ as to what YOU Can & what YOU Can’t say to prospective homebuyers during the selling process. Very important to know!

Another ‘affluence gerrymandering’ casualty? Simply means I’m not the only entrepreneur businessman who’s decided NOT to travel to Washington, DC. next month for an industry legislative conference and meeting. The costly combination of travel expenses (flight into & from DC, plus hotel for a couple days in Arlington, VA, plus taxis, plus meals, plus parking) and a hefty event registration fee, make this trip prohibitively expensive! SO, sad to say, I’ll NOT have a ‘say’ (vote) in any of the proceedings at a national meeting hosted by an advocacy entity of which I’m a direct, dues-paying member; especially since it disallows absentee balloting and voting. Yep; another casualty of ‘affluence gerrymandering’, i.e. the artful limiting of meeting attendance by keeping the cost of participation higher than necessary.

II.

NEW ERA Launch, of ‘Community Owners (7 Part) Business Alliance’, has been Astounding!

Already, more land-lease-lifestyle community owners/operators, and their preferred product and service vendors – including several HUD-Code home manufacturers, have affiliated with COBA7, than the combined number of realty asset class’ members claimed by our unique, income-producing property type’s national advocacy and ‘think tank’ councils! And know what’s especially encouraging? Retired manufactured housing executives have been affiliating, wanting to ‘stay informed about what’s really going on – and not going on – throughout the industry today’. What an encouraging vote of confidence that is!

To date, dozens of copies of the ‘biggest & best’ 25th anniversary ALLEN REPORT (A.k.a. ‘Who’s Who Among Land-lease-lifestyle Community Portfolio Owners/operators Throughout North America!’) have been mailed to COBA7 affiliates throughout the U.S. and Canada.

While the Community Owners Business Alliance exists to serve seven function areas (*) important to land-lease-lifestyle community owners/operators throughout North America, the fact that product and service vendors (e.g. chattel & real estate – secured mortgage originators & lenders, insurance & realty brokerages, aftermarket parts suppliers), as well as HUD-Code home manufacturers (Who’re selling an increasing volume of new manufactured homes into LLLCommunities), are WELCOME to affiliate, has struck a very responsive chord among these segments of the manufactured housing industry. Reminder. COBA7 is NOT a new, national, not for profit trade group; simply a business alliance, serving seven function areas (*) important to LLLCommunities, large and small, throughout North America!

The seven function areas (*)? Ongoing statistical research (e.g. annual ALLEN REPORT), distribution of helpful resources (e.g. dozen Signature Series Resource Documents or SSRDs), online & print communication (e.g. this weekly blog posting & two subscriber-supported monthly newsletters), superb peer networking (e.g. upcoming FOCUS Group meeting & annual Networking Roundtable), deal – making opportunities, professional property management training & certification (e.g. Manufactured Housing Manager® or MHM® program via class sessions or correspondence), and when need be, national advocacy (e.g. COBA7 affiliates already being considered for several national appointments….)

How to affiliate? Simply phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 and decide which of three options best serves your business needs:

Option I = Allen Letter only, no ALLEN REPORT, none of the 12 SSRDs @ $134.95/yr.

Option II = Allen Letter, 25th ALLEN REPORT, 12 SSRDs (issued monthly) @ $544.95

Option III = Allen Letter, 25th ALLEN REPORT, 12 SSRDs, & the Allen CONFIDENTIAL! business newsletter for corporate CEOs & sole proprietors @ $944.95

And what’s in the near future for the Community Owners (7 Part) Business Alliance?

Some sort of MHInitiative® aimed at helping HUD-Code home manufacturers identify and effectively sell new Community Series Homes to the 42,000+/- smaller (100 & fewer rental homesites) LLLCommunities throughout the U.S. Most HUD-Code home manufacturers know they can easily access the 500+/- known portfolio owners/operators, via direct mail, using the exclusive, confidential data base available via COBA7. Had planned a mega-event at the RV/MH Heritage Federations’ Hall of Fame facility in Elkhart, IN., on 27 February 2014, but there’s not now really enough time to pull all those pieces together. Suggestions anyone – for accessing 42,000+/- LLLCommunities?

Presently soliciting topics and potential writers’ names to participate in a Lessons Learned from LLLCommunity Operations book, for distribution at the 23rd annual Networking Roundtable this coming Fall. Interested? Contact via Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Preference likely given to COBA7 affiliates.

First national FOCUS Group meeting tentatively scheduled for 2 & 3 April, at an as yet undisclosed location. Looking for a large LLLCommunity with a clubhouse capable of seating 100 men and women. If interested, reach GFA via (317) 346-7156. The Best FOCUS Groups take place on-site at a LLLCommunity!

23rd annual International Networking Roundtable. Details to follow, but likely @ 10 – 12 September, somewhere in the Midwest. If you’re reading this and would like to be considered as a presenter; let me know, also the nature of the topic you’d like to present. Past speakers know we publicize their participation, in the Roundtable, ahead of time, and also in a feature article, summarizing the event, afterwards – complete with contact information. Who else does that for YOU in this industry and realty asset class?

Hope you decide to affiliate with COBA7 during the days and week ahead! Once you’ve selected Option II or III, we get a copy of the 25th ALLEN REPORT, and a copy of January’s Allen Letter professional journal in the mail to you right away! And if you’re already a newsletter subscriber, we credit the unused portion of said subscription to your Option II or III choice. Remember; Option I is only a subscription to the Allen Letter professional journal.

***

Blog Column #280 Copyright 2014 19 January 2014

George Allen writes about MHBusiness Matters, Issues & Serious Concerns

Perspective. ‘Land-lease-lifestyle communities, a.k.a. manufactured home communities & earlier, ‘mobile home parks’, is the real estate component of manufactured housing.’

Purpose of this blog. ‘To be the national advocacy voice, statistical research reporter, & communication resource for LLLCommunities, of all sizes, throughout North America!’

How to Input. Critical responses & helpful ideas Welcome for future blog coverage, via gfa7156@aol.com & Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764

I.

Duty to Serve, DTS, &
‘duty to serve underserved markets’,
Three Ways to Describe the Same Concept

II.

YOUR OPPORTUNITY
to
Share Good Ideas With Me at the Louisville MHShow This Week!

III.

‘DUELING CURVES: The Battle for Housing’

New Book on MH, by Bob Vahsholtz, draws closer to Publication

I.

Duty to Serve, DTS, &
‘duty to serve underserved markets’,
Three Ways to Describe the Same Concept

The ‘Newest Old Mandate’ affecting Manufactured Housing; adopted by Congress in 2008; ‘dead in the water’ since 2010; Now to be Revived?!

Bloggers Note. Following material was prepared as a feature for the February 2014 issue of the Allen Letter professional journal. However, given the recent, increasing level of interest in this ‘Newest Old Mandate’, we’re sharing it here first, to bring you up to speed regarding one of the legislative battles likely to be fought this year. Responses Welcome

OK folks, we and our industry’s ‘political wonks’* learned a valuable lesson during the last half of year 2013. As one national advocacy exec put it in a recent issue of a trade publication: ‘No longer deceive ourselves about hoped-for legislative victory, by putting all our eggs (lobbying focus) in one basket, ‘effectively holding everything else (other lobbying foci) ‘hostage’!’ Look what that misguided strategy got us regarding Dodd-Frank and the CFFB = Nothing at all! And don’t expect success during 2014 either…

• wonk = ‘an obsessive student (in this case, national advocacy execs & leaders), grind.’

YOU owe it to yourself to ‘read up’ on Duty to Serve, or DTS. Start with last month’s
issue of The Journal, and MHARR’s column therein. Here’re a few salient quotes from it:

“…DTS, on its’ face, refers to three segments of the housing market – rural housing, ‘affordable housing preservation’ and manufactured housing….”

“Federal Housing Finance Authority (‘FHFA’) @ June 7, 2010, in a proposed DTS ‘implementation’ rule…totally exclude(d) chattel loans – comprising 76 percent of all manufactured home placements – from DTS….”

“…the value of DTS, as a means of spurring an expansion of manufactured home financing…was disputed by some in the industry, as a ‘waste of time’.”

The present day hope? “DTS, with a relatively minor technical correction and a concerted industry effort…still can lead…to the high-volume securitization of as much as 76% of the industry homes titled in the states.” And just what is that minor technical correction? Despite inquiries to the national advocacy body making that claim, no answer has been forthcoming, so is not described here.

AND

YOU owe it to yourself to ‘google’ Duty to Serve, on the internet, and read the aforementioned ‘Notice of proposed rulemaking; request for comments.’ Here’re a few salient quotes from that notice:

“…the proposed rule would, among other things: (1) consider only manufactured homes titled as real property, for purposes of the duty to serve the manufactured housing market….” P.1.

Why exclusion of chattel loans from this rulemaking document? In part, “Since establishment of the conservatorships, combined losses at the two GSEs depleted all their capital and required them to draw about $145 billion from the Dept. of the Treasury, under the Senior Preferred Stock Purchase Agreements…Acting Director reported to Congress that having the Enterprises engage in new products would be inconsistent with the goals of conservatorship….” P.7. As a taxpayer, that’s responsible and easy to understand. As a businessman, it tells me the money honey pot has been closed for the time being.

A hard reality. “According to Home Mortgage Disclosure Act data for 2008, home purchase applications for manufactured homes are denied at three times the rate that applications for site-built homes are denied.” P.11. So, what, if anything, can be done about that sad state of affairs?

Five advantages to personal property mortgages cited by the Manufactured Housing Institute: overall principal loan amount is more affordable due to absence of land in the transaction; no appraisal, survey or private mortgage insurance is necessary, which lowers closing costs; customer does not encumber any real property; tax, titling fees, homeowners insurance, and service warranties can be financed; and transaction is generally faster.” P.11, footnote # 12.

“Organizations representing consumers and manufactured home community residents expressed serious reservations about chattel lending. DFED, for example, stated chattel loans provide low-income families with higher rates, less optimal terms, and reduced consumer protections, as compared to a mortgage loan….” P.17. So, it’s not just federal bureaucrats we’re battling here, but our own homebuyers, mortgagors, and tenants.

Is this a potential solution? “Commenters suggested if FHFA determines manufactured homes, secured by chattel loans be considered, FHFA should require borrower protections such as: 1) capping the annual percentage rate or APR at 3.5 points above the prime rate; 2) banning prepayment penalties; 3) banning yield spread premiums; & 4) requiring lease terms extend five years beyond the term of the loan.” P.19

Manufactured homes are generally regarded as depreciating assets, even in a strong market environment. A 2005 report by Lehman Brothers, estimated the expected annual depreciation rate at three to four percent annually.” P.20.

“Enterprise assistance to manufactured home communities would not be considered for purposes of the duty to serve the manufactured housing market in the proposed rule.” P.22. Why? Maybe because, “With regard to manufactured home communities, individuals, nonprofit organizations, and policy advocacy groups expressed concern about the lack of tenant protections in communities owned by investors.” P.9

“ROC-USA commented, after 25 years and over $150 million in originations for resident-owned communities, it had ‘not had a single loan lost or charged off.’”p.23

AND

YOU owe it to yourself, to not only become better educated about Duty to Serve or DTS, but to stay well-informed about what either or both national advocacy bodies say and do, ‘in our (your) behalf’, on this sensitive subject during the months to come during year 2014!

II.

YOUR OPPORTUNITY
To
Share Good Ideas with Me at the Louisville MHShow This Week!

It’s as simple as this: Look me up at Rishel Consulting’s one day seminar on 21 January (The day ‘before’ the Louisville MHShow actually begins!) at the Crown Plaza Hotel; &/or, anytime on 22 January, as I’m admiring & photographing new HUD-Code homes on display (The BIG QUESTION THIS YEAR? How many of these will be Community Series Homes or CSH Models, desired by land-lease-lifestyle community owners/operators?) and meeting & talking with various product & service suppliers! Don’t wait for the 23rd though, as I’ll be touring LLLCommunities that morning and in meetings that afternoon.

Why look me up? Here, let’s identify at least five good and timely reasons:

FIRST; I’ll be handing out TICKETS, during private conversations (With you?), inviting land-lease-lifestyle community owners/operators, and their product/service vendors – especially HUD-Code home manufacturers, to affiliate with the Community Owners (7 Part) Business Alliance or COBA7, launched last month by GFA Management, Inc., dba PMN Publishing. This is NOT a new, national trade group, simply an opportunity for businessmen and women, associated in one or another fashion with the LLLCommunity realty asset class, to – at a minimum, receive the Allen Letter professional journal each month, the (25th anniversary) ALLEN REPORT (A.k.a. ‘Who’s Who Among LLLCommunity Portfolio Owners/operators Throughout North America!’), and a dozen Signature Series Resource Documents or SSRDs, e.g. annual National Lenders’ Registry, during the course of the year. When you see me, just ask for your TICKET!

SECOND; We’re deep into planning some sort of MHInitiative®2014, with this GOAL: Helping HUD-Code home manufacturers successfully market and sell more new Community Series Homes, or CSH Models, into land-lease-lifestyle communities in the U.S.. Manufacturers now routinely access our exclusive, confidential data base to put their firm’s name, via Direct Mail, in front of the 500+/- known LLLCommunity portfolio owners/operators throughout North America! BUT, the Big Question now begging answering is ‘How to Get This Same Message in Front of the 42,500+/- Mom&Pop-sized LLLCommunities across the country?’ IDEAS? And how many manufacturers are using Lifestylist ‘services’ to ensure product designs are indeed ‘right’ for targeted local housing markets? And, for the first time in decades, they’re calculating ‘affordable’& ‘risky’ Price Points for new and resale homes per local housing market’s Average Median Income or AMI, and prospective homebuyer’s Annual Gross Income or AGI! Do YOU know how to do this? Finally; really would like your creative ideas on how to effect MHInitiative@2014: at the RV/MH Hall of Fame on 27 February 2014; or some other venue later in the year?

THIRD; we’re looking for subject matter and volunteer writers to input the new book, Lessons Learned from LLLCommunity Operations. So, if you’re a capable, successful, experienced owner/operator of one or more land-lease-lifestyle communities, and willing to share one or more personal or corporate LESSONS LEARNED, with your peers, in this book – and have your contribution serve as Your Lasting Legacy, talk to me during the Louisville MHShow – or contact me via means listed at beginning of this blog posting. This is a COBA7 project for LLLCommunity owners/operators nationwide.

FOURTH. There’ll be a national FOCUS Group meeting of land-lease-lifestyle community owners/operators during the first week of April 2014, planned and facilitated by COBA7. If you’d like to have your name on the ‘invite’ list, let me know at the Louisville MHShow. Already have 40 businessmen and women who’ve expressed their desire to participate. In this instance, ‘you’ recommend the agenda (i.e. issues you face); we meet on-site in a clubhouse at a large LLLCommunity for 1 ½ days. Proceedings confidential!

FIFTH. The 23rd annual International Networking Roundtable is scheduled for 10-12 September. If there’re topics you’d like to see covered this year, and presenters you’d like to hear – including your interest in being a speaker, let me know this as well. If you’ve got something worthwhile to share (Not necessarily a sales pitch), with your peers, we’d like to know. Being featured at the annual Networking Roundtable is invaluable, as your name and topic are publicized on the advance brochure, and summarized – along with your contact information, in a Signature Series Resource Document published following the event. Who else gives YOU that sort of exposure in this business? Look Me Up!

WHEW! This is going to be one very busy Louisville MHShow for us this year! Looking forward to seeing you there – or having you contact me otherwise, if not going to be in attendance – and ask about COBA7, when you call or write! GFA

III.

‘DUELING CURVES The Battle for Housing’

New Book on MH, by Bob Vahsholtz, draws closer to publication

It’s not official, but Bob Vahsholtz’s new book about factory-built housing in general, manufactured housing in particular, is drawing closer to publication. The DRAFT copy I just helped edit is chock full of principles & methods, examples & statistics, biographies & corporate histories, all helping carry & support his dual themes of ‘learning curve’, and it’s effect on housing industry fundamentals, over the decades.

We’ll be among the first to let you know when and how this tome will be available for purchase by housing aficionados and practitioners.

***

George Allen, CPM & MHM
Box # 47024, Indpls, IN. 46247
(317) 346-7156

Blog Column @ 279 Copyright 2014 12 January 2014

George Allen writes about MHBusiness Matters, Issues & Serious Concerns

Perspective. ‘Land-lease-lifestyle communities, a.k.a. manufactured home communities & earlier, ‘mobile home parks’, is the real estate component of manufactured housing.’

Purpose of this blog. “To be the national advocacy voice, statistical research reporter, & communication resource for LLLCommunities, of all sizes, throughout North America!’

How to Input. Critical responses & helpful ideas Welcome for future blog coverage; via gfa7156@aol.com & Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764

I.

MHIndustry Meetings @ January & February 2014

II.

MHInitiative® 2014?

III.

‘Hats off to Mharrio!’

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

I.

MHIndustry Meetings @ January & February 2014

What do Rishel Consulting, the Community Owners (7 Part) Business Alliance or COBA7, Louisville MHShow, a national manufactured housing advocacy body’s annual legislative conference, and MHInitiative®2014, all convening during January & February 2014, have in common?

A lively interest in HOW TO MARKET, SELL & FINANCE MORE NEW MANUFACTURED HOMES ON-SITE WITHIN LAND-LEASE-LIFESTYLE COMMUNITIES DURING 2014! Here’s how this might well materialize with your help:

1. Need to ‘Learn How to Advertise, Market, and Sell Homes Successfully and Legally in 2014’?, be present at Rishel Consulting’s one day seminar, 21 January at the Crown Plaza Hotel adjacent to Kentucky State Fairgrounds in Louisville, KY! 100+ already signed up. Learn from Ken & Donna Rishel (Ken is Manufactured Housing’s ‘Industry Person of the Year for 2013’!), Dennis Ohnstad, MHM®; Bill & Chad Carr; John Ace Underwood; & Eddie Hicks. To register, for $ 95., phone (312) 878-2802.

2. While the Community Owners (7 Part) Business Alliance won’t be formally meeting in Louisville, during 21 – 24 January, there’ll be face-to-face opportunities for YOU to input three key COBA7 events and projects: a) Ask for ‘an invite’ to participate in MHInitiative®2014 (See paragraph # 5 to follow) when HUD-Code home manufacturers and LLLCommunity owners/operators convene again, at the RV/MH Hall of Fame in Elkhart, IN; b) Have an itch to describe your LLLCommunity operations experiences and create a personal legacy? Volunteer to input the new book planned this year: Lessons Learned in LLLCommunity Operations! No writing experience required; and, c) Want to attend the National FOCUS Group meeting, 2 & 3 April 2014? ‘Ask ME for an invite’, to avoid being missed later. Or phone Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

3. 22 – 24 January 2014 = Louisville MHShow. This is rejuvenated Midwest MHTrade Show canceled several years ago. Dozens of new HUD-Code homes will be displayed indoors, along with dozens of supplier exhibits. The Big Question This Year? How many ‘show homes’ will be Community Series Homes, or CSH Models, designed for placement within land-lease-lifestyle communities? This has been a sad shortfall with previous regional shows. Home manufacturers must realize, any major increase in annual home shipment volume, depends on filling 250,000 vacant rental homesites nationwide! Call Dennis Hill @ (770) 587-3350

4. 9 – 11 February 2014. Annual Legislative Conference in Arlington, VA. If you have a hankering for a firsthand look at how manufactured housing industry lobbying is handled in our nation’s capitol, consider participating in this event. Phone (703) 558-0400 for details and to register.
.

5. 27 February 2014. Does the date ring familiar to YOU? If an industry veteran, it should! Why? On 27 February 2009, 100+/- HUD-Code home manufacturers and (then) manufactured home community owners/operators, from throughout the U.S., convened at the RV/MH Hall of Fame facility in Elkhart, IN., to address this challenge: How to Sell More Manufactured Homes Into MHCommunities!’ That’s where the Community Series Home, or CSH Model homes concept was birthed! And now, on 27 February 2014, six years later, we’re returning! Why? Read the next segment (II) of this blog posting. Might surprise you….

II.

MHInitiative @ 2014?

At RV/MH Hall of Fame on Thursday, 27 February 2014. Be there! Why?

Well, the first time around, 2/27/2009, we did successfully ‘break the ice’ and get HUD-Code home manufacturers and property portfolio owners/operators talking – then designing/manufacturing/ordering/shipping new homes! These manufacturers now routinely use the annual ALLEN REPORT and Direct Mail Campaigns to the 500+/- known portfolio ‘players’ to market their homes. But this time around, the challenge is different, and actually more difficult to solve. Being? ‘How to Market & Sell More Manufactured Homes Into (Stand alone) Land-lease-lifestyle Communities!’ Yes, Mom&Pop-sized/owned LLLCommunities, for the most part, are ‘emptying out’, as longtime owners/operators no longer can rely on independent ‘street’ MHRetailers, in local housing markets, to fill vacant rental homesites within their properties. So, this is a one day opportunity for HUD-Code home manufacturers, and property owners, to figure out: 1) How to identify these 40,000+/- prospective, one-off customers, 2) How to effectively sell new Community Series Homes directly to them, & 3) How to find chattel capital to finance on-site deals – and/or 4) How to engage in Lease-Options, and other ‘captive finance’ alternatives – all the while being compliant with applicable state and federal finance regulations. YES, this is a very tall order, but have YOU noticed anyone, anywhere else, in the entire manufactured housing industry ‘stepping up to the plate’ to BRAINSTORM HOW TO: 1) Market & Sell more HUD-Code homes, & 2) Fill vacant rental homesites in LLLCommunities? The answer is a resounding and disappointing, NO! So, if YOU’d like an ‘invite’ to this seminal, albeit ‘historic’ session; phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. This MHInitiative® session is One more Good Reason for YOU, as a LLLCommunity owner/operator, home manufacturer, and/or product/service vendor, serving this realty asset class, to formally affiliate with the Community Owners (7 Part) Business Alliance, or COBA7, the sooner the better. How? Read next paragraph….

Talk to me about the MHInitiative®2014, and affiliating with COBA7, during our time together in Louisville, KY., from 21 – 24 January 2014. In brief, COBA7 Option I is a one year subscription to the Allen Letter professional journal for $134.95. Option II is the same newsletter, plus 25th annual ALLEN REPORT (A.k.a. ‘Who’s Who Among Land-lease-lifestyle Community Portfolio Owners/operators Throughout North America!’), and a dozen Signature Series Resource Documents & directories, all for $544.95. And Option III is all that’s in Option II, plus a one year subscription to the Allen CONFIDENTIAL! business newsletter for corporate presidents and CEOs, @ $944.95.

III.

‘Hats off to Mharrio!’

Have YOU seen and or read the Fall segment of the Federal 2013 Semi-Annual Regulatory Agenda (‘SRA’), detailing pending and anticipated rulemaking activities of 1) HUD, 2) DOE, & 3) EPA – pertaining to HUD-Code manufactured housing? Well, I hadn’t either; and likely never would have seen it, but for the efforts of Mharrio, there in Washington, DC. If you’d like a copy of this four page Memorandum, penned by Mark Weiss, dated 6 January 2014, phone (202) 783-4087. Tell him ‘George told me to call!’

One of several ‘concerns’ flagged in this document, reads thusly: “…instead of playing the active role…maintaining and preserving the affordability of manufactured housing – in conjunction with expert analysis and input of the MHCC (i.e. Manufactured Housing Consensus Committee’) – HUD may take the route of least resistance, and simply accept whatever ‘findings’ are concocted by DOE, which has already engaged in regulatory misconduct by selectively leaking a ‘draft’ of the proposed rule.” What does this mean t our industry and asset class? In my opinion, it’s an indication of a planned sneak attack – until reported by Mharrio – on the eminent affordability of HUD-Code manufactured housing, especially that sited within land-lease-lifestyle communities nationwide!

Where’s Mhiki? Waiting to read another view on this SRA (Semi-Annual Regulatory Agenda). How ‘bout you?

Mharrio & Mhiki? Introduced you to them two weeks ago in blog posting # 277 at the web site: community-investor.com

***

George Allen, CPM & MHM
Box # 47024, Indpls, IN. 46247
(317) 346-7156

Blog Column # 278 Copyright 2014 5 January 2014

George Allen writes about MHBusiness Matters, Issues & Serious Concerns

Perspective. ‘Land-lease-lifestyle communities, a.k.a. manufactured home communities & earlier, ‘mobile home parks’, is the real estate component of manufactured housing.’

Purpose of this blog. ‘To be the national advocacy voice, statistical research reporter, & communication resource for LLLCommunities, of all sizes, throughout North America!’

How to Input. Critical responses & helpful ideas Welcome for future blog coverage; via gfa7156@aol.com & Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764

I.

‘By George, They’ve Got It! They Really Do!’

II.

Will I See YOU at the Louisville MHShow?

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

I.

‘By George, They’ve Got It! They Really Do!’

Here’s How Land-lease-lifestyle Community Owners/operators Can Double the Value of Their $544.00+/- Corporate Investment in Realty Asset Class Knowledge & National Advocacy in 2014!

When the Community Owners (7 Part) Business Alliance, or COBA7, was launched during December, and now January 2014, there’d been – and remains, a strong desire to ‘clearly communicate the business alliance concept’ to a national target audience of land-lease-lifestyle community owners/operators of all sizes, AND all the product and service vendors servicing the property type’s information & consulting, real estate & chattel lending, property insurance, water sub metering & billing, valuation & brokerage needs! For awhile, there was even talk of a breakfast meeting on 22 January, in Louisville, KY., to ‘splain’ everything. Now that’s not even necessary. Why? Individual and corporate paid subscriptions re: Options I, II, or III*, in effect affiliating with COBA7, have been pouring into our offices. The concept has evidently been well-communicated and understood enough, to prompt this heavy flood of individual and corporate investment in realty asset class knowledge and national advocacy, during 2014 and beyond. So, you might say, ‘We’re off and running!’

A recent email from one portfolio owner/operator of LLLCommunities, not even listed in this year’s 25th Anniversary ALLEN REPORT – but signed up for an Option II subscription nonetheless, well summarizes the affiliation concept and its’ ‘double the value’ potential nicely:

“George. The way I look at it, I’m going to spend at least $500.00, one way or the other, in support of our properties nationwide. I can either ‘put all my eggs into one (national advocacy) basket’; OR, I can send nearly the same amount ($544.00) to affiliate our business with COBA7, then rely on membership in one or another state manufactured housing association, to represent us where national political and regulatory advocacy is concerned. AND, while ‘the state’ is doing my bidding, we’ll benefit from the seven function areas COBA7 administers. Now that’s what I call ‘doubling the value’ of the $500 or $544 I’ve invested in behalf of our LLLCommunities!” BBP

By way of clarification, those Seven Function Areas COBA7 are: 1) ongoing statistical research (e.g. ALLEN REPORT); 2) resource & directory distribution (e.g. a dozen Signature Series Resource Documents or SSRDs, issued monthly); 3) print & online communication (weekly & monthly); 4) peer networking events (Networking Roundtable & FOCUS Groups); 5) deal – making opportunities; 6) professional property management training & certification (e.g. Manufactured Housing Manger® or MHM® program); and, 7) supplement the national advocacy effort, when appropriate or needed.

Have YOU affiliated with COBA7 yet? January 2014 Allen Letters, and the 25th annual ALLEN REPORT go into the mail shortly. Only those individuals and firms having already opted for Option II or III will be receiving the ALLEN REPORT this year. Not too late to subscribe; just phone the Official MHIndustry HOTINE: (877) MFD-HSNG or 633-4764 and sign-up for Option II. All three options described in the following End Note below.

End Note.

Option I. $134.95 paid subscription (12 monthly issues) to the Allen Letter professional journal. No longer is the ALLEN REPORT or any of the dozen Signature Series Resource Documents, or SSRDs, enclosed with the monthly newsletter.

Option II. $544.95 paid subscription (12 monthly issues) to the Allen Letter professional journal, the 25th Anniversary ALLEN REPORT (Biggest & Best Edition in 25 years!), and 12 SSRDs during the course of the year, e.g. annual National Registry of Lenders, annual ‘Who Ya Gonna Call in 2014?’ list of freelance consultants, & 10 more SSRDs

Option III. $944.95 paid subscription (12 monthly issues) to the Allen Letter professional journal, the 25th Anniversary ALLEN REPORT, 12 SSRDs, and paid subscription (12 monthly issues) to the Allen CONFIDENTIAL! business newsletter for corporate presidents and chief executive officers. The industry news you’ll get nowhere else!

Again, to obtain your personal or corporate copy of the 25th Anniversary ALLEN REPORT (a.k.a. ‘Who’s Who Among Land-lease-lifestyle Community Owners/operators Throughout North America!’) this month (January 2014), select Option II or III, then phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. During that conversation, assuming you’re already a paid subscriber to the Allen Letter professional journal, we’ll apply credit for your unused subscription months to the Option II or III $ amount; OR, adjust your ‘start date’, whichever you prefer. If not already a paid subscriber, we’ll start your Option I, II, or III subscription affiliation right away!

***

II.

Will I See YOU at the Louisville MHShow?

There are many reasons YOU should make it a point to participate in this year’s Louisville MHShow! Here are just a few features to bear in mind:

• 21 January. The day before the Louisville MHShow begins! Rishel Consulting is facilitating a day long program at the nearby Crown Plaza Hotel for everyone concerned about ‘what to say’ & ‘what not to say’ when selling new and resale manufactured homes in today’s regulatory rich, consumer protection finance market! Already more than 100 signed-up. I’ll be there. Phone (217) 971-3968 and pay $95.00 to register. Added benefit? Superb networking opportunity for all.

• 22-24 January. Wander the show floor, visit and maybe buy some new homes, and talk with the exhibitors. The question on everyone’s mind this year: ‘How many of the HUD-Code homes are of the Community Series Homes, or CSH Model design, for placement within land-lease-lifestyle communities? The answer to that question will be a ‘leading indicator’ as to whether HUD-Code home manufacturers are paying attention to the fact that ‘their future = filling an estimated 250,000 vacant rental homesites in LLLCommunities around the U.S. Oh, and there’ll also be some show seminars to consider….

• Doing Lease-Option’ on-site in your land-lease-lifestyle community; or thinking to do so? Know that Spencer Roane, MHM®Master, will be in town from Atlanta, for this year’s MHShow. GA. Look for his name tag and ask his advice on this rich topic! More and more LLLCommunity owners are opting for on-site ‘rental units’, and use of the Lease-Option, if in states allowing its’ use.

• Freelance consultant Michael Power too will be around, with a full quiver of property management – related arrows, to help you improve the day to day operation of your land-lease-lifestyle community. Even has a Shared Equity Plan in hand, to fill vacant rental homesites on your property with new homes!

• And hey, if you’ve got questions about the Community Owners (7 Part) Business Alliance, a.k.a. COBA7, stop me on the show floor, and ‘Ask to see a copy of the 25th Anniversary ALLEN REPORT!’ Will sign you up, right there, if you wish, with a subscription to Option I, II, or III, affiliating your firm with COBA7. Will also be carrying around FREE copies of the popular new plastic wallet card: ‘5-RPs of Marketing & Selling New Homes, & Leasing Rental Homesites, Within LLLCommunities!’ Do YOU have yours yet? Almost everyone else does!

• Wondering why there’re so many itinerant MHIndustry & LLLCommunity freelance consultants and experts circulating at this year’s Louisville MHShow, but NOT on the formal program? Visit the MHShow office and ask the show director, Dennis Hill of Showways. By the way, I’m on the MHShow committee this year, and am open to your suggestions for improving the program in 2015. Want to be an exhibitor or presenter? Let me know! (317) 346-7156

• And finally. Since I canceled the previously announced COBA7 breakfast on 21 January, we still want to hear from you regarding two important 2014 plans: First, if you’re interested in being invited to the first national FOCUS Group meeting of LLLCommunity owners/operators this Spring, let me know at the MHShow – along with discussion topics you’d like to see considered for the agenda. AND, I’m looking for writers to input Lessons Learned in LLLCommunity Operations!, the new book planned for this year, with distribution at the 23rd annual International Networking Roundtable in September. If you miss me at the MHShow, but want to talk of these two matters, reach me via (317) 346-7156 the week before or after the Louisville MHShow.

Looking forward to seeing many of you, who read this weekly blog posting, at the 2014 Louisville MHShow. Registration is FREE to most folk in the MHBusiness. Just show up at the exhibit hall and complete appropriate paperwork at 10AM on 22, 23, & 24 January 2014. Have questions beforehand, give me a call at the Official MHIndustry HOTINE: (877) MFD-HSNG or 633-4764. Keep this number handy for everyday reference!

Blog Column # 277 Copyright 2013 29 December 2013

George Allen writes about Key MHBusiness Issues, Matters, & Serious Concerns

Perspective. ‘Land-lease-lifestyle communities, a.k.a. manufactured home communities & earlier, ‘mobile home parks’, is the real estate component of manufactured housing.’

Purpose of this blog. ‘To be the national advocacy voice, statistical research reporter, & communication resource for LLLCommunities, of all sizes, throughout North America!’

How to input. Critical responses & helpful ideas Welcome for future blog coverage here: gfa7156@aol.com & Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

An Important Year End Announcement!

When the January 2014 issue of the Allen Letter Professional Journal is mailed later this week and next, it will NOT contain the 25th Anniversary ALLEN REPORT, a.k.a. ‘Who’s Who Among Land-lease-lifestyle Community Portfolio Owners/operators Throughout North America!’, UNLESS recipients have recently (within the past 30 days) affiliated with the Community Owners (7 Part) Business Alliance, or COBA7, by adjusting their paid subscription to said newsletter, to include said ALLEN REPORT, plus a dozen Signature Series Resource Documents or SSRDs (e.g. National Lenders Registry, ‘Who Ya Gonna Call in 2014?’ directory of freelance consultants, & ten additional directories), to be distributed to newsletter subscribers during the next twelve months!

It is not too late for YOU to ensure soon receipt of the Biggest & Best ALLEN REPORT compiled during the past 25 years! Simply phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 and, using a credit card – or corporate check if preferred, indicate your choice of

Option II @ $544.95. If you’re already an Allen Letter subscriber, we’ll adjust the subscription amount to reflect unused credit or lengthen your present subscription accordingly.

Option I? That’s simply a one year subscription to the Allen Letter professional journal, nothing less, nothing more. If already an Allen Letter subscriber, and you’re content with NOT receiving the ALLEN REPORT & 12 SSRDs, there’s nothing more for you to do! If NOT a newsletter subscriber, but would like to become one, then exercise this Option I.

Option III? $944.95. That’s the same as Option II, plus an annual subscription to the Allen CONFIDENTIAL! business newsletter (12 monthly issues) – the only intimate, confidential, ‘insider’ communiqué existent in the manufactured housing industry today! Read by CEOs & presidents!

Bottom line? This year’s 25th ALLEN REPORT is extra special! If YOU own and or operate one or more land-lease-lifestyle communities, you owe it to yourself to affiliate with COBA7, and receive this seminal document, along with the industry’s longest-running monthly newsletter, and 12 SSRDs designed to make your free enterprise adventure easier and more profitable!

I.

Meet Mharrio & Mhiki

II.

25 Lease-Options in Four Years & No Defaults!
Here’s How to ‘Do-It-Yourself’!

III.

Why YOU Should Affiliate with COBA7

(Two Breaking News Stories to Read Now, Only if COBA7 Affiliates!)

***

I.

Meet Mharrio & Mhiki

Major Characters in Future Parodies and Political Contretemps, Relating to Manufactured Housing & its Land-lease-lifestyle Community Realty Asset Class…

Never mistaken for twins, they hail from the same family – but rarely invite one another to participate in the other’s politico-social-association gatherings. That’s truly unfortunate, as their respective family loyalists would likely learn valuable business and political lessons from their not-so-distant relatives, given networking opportunities to mix and mingle on a regular basis. Makes one wonder, ‘Why?’ Mhiki & Mharrio don’t arrange for their respective ‘faithful’ to benefit from such social/business opportunities

In any event, Mhiki is the older and bigger of the two siblings. But Mharrio is longer-in-the-tooth politically, and widely viewed as being the more territorial and contentious of the pair. Those characterizations likely have to do with Mhiki’s loyalists being eclectic and heterogeneous, while Mharrio’s faithful are as homogeneous as can be, given their singular manufacturing focus. Those unique intra-family characterizations, as one might expect, lead to Mhiki being the political consensus-builder of the two, while Mharrio’s supporters are loyal to a fault, oft championing the minority view.

So, where do we find Mharrio and Mhiki as we prepare to begin a new (2014) year in manufactured housing, including post-production segments in general, and LLLCommunity contingent in particular?

Well, there’s no denying manufactured housing has come out of the recent political maneuvering in Washington, DC., with ‘less than the short end of the stick’ in hand, where much-needed alterations to Dodd-Frank legislation and CFPB regulations are concerned. For some strange reason, Mhiki appears to have adopted the stance, ‘less communication is more’, so even direct, dues-paying members, like the veteran industry observer penning these lines, have little direct knowledge of ‘What really went wrong?’ for most of us in the MHIndustry – OR, as some now opine, ‘What went right?’ for a politically blessed few? Note. If you read the previous lines in this paragraph, and don’t understand the thinly veiled message, you’ve not been paying attention when, where, and how you should!

Then there’s Mharrio. You’ve gotta feel sorry for the guy. I mean, how many times must one step forward with worthy and timely warnings of impending threats and danger to our industry – even from agents within (Now, that’s another story for another day!), only to have it ignored, even tromped upon by well-meaning but oft naïve sycophants? Thinking here about the Manufactured Housing Improvement Act of 2000, which after 13 years, is not yet fully implemented; about the recent botched attempt to seat a non-career leader on the Manufactured Housing Consensus Committee; even ‘right’ the non-independent operation of said MHCC. And then there’s the ol political football known as Duty to Serve; one day it’s OK, next day it’s off the table! Yet we continue to wonder why we make so little advocacy headway in our nation’s capitol…

So, what does 2014 look like for us? There’re two answers to that question. First; did you notice the previous paragraphs had ‘everything to do’ with manufactured housing and nothing – directly, to do with land-lease-lifestyle communities; or, for that matter, any other segment of the MHIndustry, except perhaps chattel finance? If you did notice, then that’s also ‘the answer’ to the question: Mharrio and Mhiki, each in their own right and unique manner, will, during 2014, continue to look after respective manufactured housing’s interests ‘inside the capitol beltway’, being Washington, DC, and Arlington, VA, and probably not much more.

But there’s a second question here; that having to do with ‘every other segment of the manufactured housing industry’, and the land-lease-lifestyle community asset class in particular! I’d be lying to you if I told you there wasn’t increasing discontent being expressed by ‘family members’, in casual conversation and via emails, regarding the markedly diminished communication (‘Ah, to have Bruce Savage back in place, keeping us informed!’) and political efficaciousness on one side of the house, not to mention failure after failure to head – off harmful legislation and effectively deal with it once arrived. Just look at the stalled house and senate bills, affecting manufactured housing finance regulations, this November and December! They were DOA…Dead on Arrival, despite protestations otherwise. But then, there’s another side to that story….

About the only bright spot on the 2014 horizon is the Community Owners (7 part) Business Alliance, or COBA7, emerging this month, and expected to hit its’ stride during January. NOT a formal non-profit or not-for-profit membership entity, but rather a business alliance of land-lease-lifestyle community owners/operators who insist on, and are now willing to pay for, proven products and services in seven key function areas:

• National Advocacy in a fashion that serves LLLCommunities large and small
• Ongoing statistical Research per operations benchmarks for LLLCommunities
• Distribution of Resources & directories critical to effective property management
• Ongoing (weekly & monthly) print & online Communication to owners/operators
• Superb peer networking via FOCUS Groups and Networking Roundtables
• Deal-making Opportunities for real estate brokerages and property owners
• Professional Property Management training & certification via MHM® program

If reading this, and interested in aligning your firm with CABO7, go back and reread the Announcement beginning this week’s blog posting. Know that CABO7 affiliation is available to any businessman or woman, or firm, in every segment of the HUD-Code manufactured housing industry! If the Official MHIndustry HOTLINE is ‘busy’ when you call, try (317) 346-7156. And frankly, CABO7 doesn’t care if your past loyalty has been with Mharrio or Mhiki; we simply want to serve LLLCommunity owners/operators in the seven function areas just identified!

II.

25 Lease-Options in Four Years & No Defaults!
Here’s How to ‘Do-It-Yourself’!

Once again I’ve reached out to Spencer Roane, MHM®Master, of Pentagon Properties, the manufactured housing industry and land-lease-lifestyle community asset class’ ‘duty expert’ on the effective use of lease-option to put would be homebuyers/site lessees into new manufactured homes in LLLCommunities.

Editor’s Note. In a day when manufactured housing national advocacy bodies have been unable to ameliorate constricting negative effects of onerous financial regulation of chattel capital, where manufactured housing and land-lease-lifestyle communities are concerned (In case you haven’t heard, neither house or senate bill went anywhere in Washington this month!), the lease-option becomes one more practical homeownership-facilitating tool in the property owner’s quiver of self-finance arrows. I know of no one better than Spencer Roane, MHM®Master, to ‘splain’ not only his time-proven technique in this avenue, but ‘How he’s been doing it, where new HUD-Code homes are concerned, the past four years with NO defaults!’

23 years ago, we began selling manufactured home (‘MHs’) via Lease-Option (‘L-O’) in the land-lease-lifestyle communities (‘LLLCs’) we own and manage. Our previous experience with rental MHs told us to avoid the oft self-defeating ‘churn & burn’ routine. It took almost 20 years, however, for us to learn how to effect L-Os while minimizing defaults. In no special order, here’re critical guidelines we use to achieve this end:

• Right home to sell. Today’s resale homes and repos are scarce, older, often in poor condition, and surprisingly expensive. So, new homes make better sales for us! In addition, these homes must be functional, lower cost, have ‘eye candy’, even a Wow! factor, be well-constructed, and with a good warranty. Community Series Homes, with their durability-enhancing features make near ideal L-O homes.

• Right price. Why try to make a killing on the sales price of a new home, when selling said home just $1-2K over cost, creates a ‘home run’ in terms of increasing property cash flow, adding value to the LLLC, cutting common area costs, improving overall curb appeal, and adding to a positive ‘community spirit’? All the while, we try to keep the L-O term to 12-13 years.

• Right community. This includes appearance, resident mix, staff personnel, desired amenities, even appropriate site rent. In the latter instance, it’s important to ensure rental homesite rates are in sync with rents at other multifamily rental properties in the same local housing market.

• Right marketing. Here we’re talking about attractive off and on-site signage, print and online advertising, an inviting sales or information center (not ‘office’), attractive property logo and color scheme, as well as appropriate point-of-purchase sales material, even effective prospect follow-up procedures. For assistance in these areas contact Chris Nicely (print & online advertising) via cnicely929@aol.com or (865) 385-9675, and Don Westphal (signage & curb appeal) via don@dcwestphal.com or (248) 651-5518.

• Right processing/underwriting of applications. (Read on…)

• Right follow-up after the ‘sale’ via Welcome Packages, warranty help, etc.

Now, not suggesting the initial four considerations listed above, are any less important, but experience proves the ‘processing/underwriting’ (step) is VERY important – particularly verification of application information and establishing and applying acceptable limits for front-end and back-end Debt-to-income (DTI) ratios. *1 And the follow-up (step) is vital as a sort of ‘icing on the transaction cake’, helping the new homeowner/site lessee make the adjustment to land-lease-lifestyle community living.

Since we lease homesites when we rent or lease MHs, we thoroughly review all the following when considering an L-O application:

• Verification of rental history (no domestic or police problems, past rental amounts and payment history)

• Verification of employment (sources of income, type work, time on the job, monthly income, likelihood of continued employment)

• Credit report (payment history with creditors, monthly obligations, previous addresses)

• Income tax returns (historical income, dependents)

• Checking and savings account statements (income, expenses, and savings over a three month period, funds available for option payment, insurance, moving costs)

• Budget – income and expenses, before and after entering into L-o contract.

• Criminal report (applicant can get copy from local police or sheriff’s office)

• Debt-to-Income Ratios capitalize income in these deals: Front-end ratio = Housing costs (monthly site rent + monthly L-O payment) divide by total gross monthly income. Target: below 30%
Back-end ratio = Total monthly debt (housing costs, car payments, furniture payment, loan payments, child support, etc.) divided by total gross monthly income. Target: below 40%.

A tool we’ve found particularly helpful is one which we refer to as our Pre-Qualification Worksheet (‘PQW’). Before asking the home sales prospect to complete an application, pay an application fee, or even look at homes, we ask them to provide the following information, which we enter into the PQW spreadsheet:

• How much are you paying in rent now?
• What will your previous landlords say when we contact them about your rental history?
• What will your criminal history show when we contact law enforcement authorities?
• What will your credit report show?
• How much do you have available for a down payment (option payment)
• What monthly debt obligations are you currently responsible for?
• What is your gross monthly income from various sources?

Knowing the monthly site rent at the LLLC, the home buying prospect is interested in, as well as their monthly gross income and current monthly debt obligations, the PQW computes the maximum monthly L-O payment the prospect could make and still satisfy the DTI ratios (our PQW uses a sliding scale, based on an applicant’s gross monthly income, for acceptable DTI ratios)

Alternatively, if we also know the monthly L-O payment on the home a prospect is interested in, the PQW computes the DTI ratios and ‘flags’ acceptable or unacceptable values. If the prospect’s DTI ratios are unacceptably high, our sales personnel can suggest the prospect consider a less expensive home or possibly pay off some recurring debt (e.g. credit cards) before buying their new home. If the prospect’s DTI ratios are exceptionally low, our sales personnel can also tell them they might qualify for a more spacious home.

If our PQW indicates a prospect would be approved, based on the information the prospect provides, we encourage him/her to complete our full application, and pay the application fee. As long as the information provided by the prospect is accurate, he/she will be approved. We ensure the prospect knows the application fee is non-refundable if our processing/underwriting reveals information provided for the PQW was inaccurate.

A copy of our PQW is posted on the Lease Option Documents page of our website: www.leaseoptionmhsales.com

End Note.

1. The initial five guidelines closely parallel the ‘5-RPs of Marketing’ popularized by George Allen, CPM®Emeritus & MHM®Master. For a FREE plastic wallet card containing these 5-RPs (Right Product, Right Place, Right Price, Right Promotion, Right People) – and details pertinent thereto, simply phone the Official MHindustry HOTLINE: (877) MFD-HSNG or 633-4764.

III.

Why YOU Should Affiliate with COBA7

Two Breaking News Stories to Read Now, Only if a COBA7 Affiliate!

RHP Properties, Inc., further expands its’ property portfolio with acquisition of 15 land-lease-lifestyle communities, containing 5,900 rental homesites, located in Colorado and Texas. For the rest of the story, read January 2014 edition of the Allen CONFIDENTIAL! business newsletter or February 2014 issue of the Allen Letter professional journal.

The 50th anniversary issue of Automated Builder magazine debuts online during January 2014. To contact Don Carlson, phone (805) 351-5931. To read his column ‘It’s Virtually Here!’, and review the ezine’s advertising rate card, read the January 2014 edition of the Allen CONFIDENTIAL! business newsletter or February 2014 issue of the Allen Letter professional journal.

These are two examples of why you, as a land-lease-lifestyle community owner/operator, or anyone serving the product/service needs of this realty asset class, need to affiliate with COBA7 now! This new and unique business relationship begins 1 January 2014, ushering in the NEW ERA for LLLCommunities, large and small, nationwide & in CN. Will YOU be aboard & participating? I surely hope so! George Allen, CPM® & MHM®

***

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

Blog Column # 276 Copyright 2013 22 December 2013

George Allen writes about Key MHBusiness Issues, Matters, & Serious Concerns

Perspective. ‘Land-lease-lifestyle communities, a.k.a. manufactured home communities & earlier, ‘mobile home parks’, is the real estate component of manufactured housing.’

Purpose of this blog. ‘To be the national advocacy voice, statistical research reporter, & communication resource for LLLCommunities, of all sizes, throughout North America!’

How to respond? Critical responses & helpful ideas Welcome for future blog coverage: gfa7156@aol.com & Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764

Again; a little help from my friends in the MHBusiness! We continue to reconstitute our email contact list, following hacking of our computers two weeks ago. SO, continue to send us names and email addresses of other ‘friends in the MHBusiness’ who’d likely want to be included in this special brand of communication available nowhere else in the HUD-Code manufactured housing industry & land-lease-lifestyle community asset class!

I.

ADVOCACY MISFIRES BADLY!or ?

II.

MARKETING

III.

HOW ONE FIRM COMPUTES SITE RENT FOR ABANDONED HOMES OWNED BY AN INDEPENDENT CHATTEL LENDER

IV.

Be Aware & Beware!

I.

ADVOCACY MISFIRES BADLY!or ?

“Bi-Partisan Effort Unveils Manufactured Housing Relief Legislation…
to Preserve Access to Affordable Manufactured Housing”

So reads the ‘Housing Alert’ headline on 12/17/13. And, an elected manufactured housing association leader identified in the story, called “…the introduction of S. 1828 a major step forward for the manufactured housing industry.” REALLY? ‘A Major Step Forward’? Perhaps, more accurately put, ‘a Too Late Step Nowhere!’? You decide….

The introduction of this U.S. Senate bill was duly ‘expected & predicted’ in a Blast Email Blog Alert (‘BEBA’) posted here Four Weeks Ago! And Now, with ‘no days left’ in the current session of Congress, does anyone expect action, let alone passage, of this companion bill to H.R. 1779? In a word, ‘NO’!. In another word, ‘WHY – the delay?’ Methinks the answer is twofold, in terms of immediacy and ‘further down the road’: 1) Simply CYA! or ‘political cover’ today; and, 2) ‘Something near nefarious (?) is afoot’, that to understand, you’ll have to read deeper into this blog posting, and more yet to come…

For now though, all that PAC (political action committee) money has been spent (wasted?), once again, on ‘fruitless & failed’ lobbying! When will the manufactured housing industry finally get out in front of business – killing legislation, and STOP playing catch – up, after regulatory bugaboos (e.g. S.A.F.E. Act, Dodd – Frank) have been turned loose on it?

January 2014 is nigh upon us! Are we now doomed as an industry? Maybe, and here’s why….

For more than two years, the manufactured industry has been told repeatedly, by it’s self – appointed champions of strategy, to focus ALL our attention & resources on amending onerous Dodd-Frank legislation – to the exclusion of virtually everything else (e.g. ’Duty to Serve’, etc.) – before this January 2014 deadline arrived! Well they & we failed to amend Dodd-Frank, and now we’re ‘left holding a bag full of other consumer financing matters’ that could & should have been tackled months, if not two years ago! Result? We (will) continue to ship new HUD-Code houses at the dismal rate of but 50,000 – 60,000 per year, with no regulatory relief, and no easily accessible chattel capital, in sight!

Face it friends. If we’re going to (maybe) survive, and even eventually thrive again – assuming we get an even playing field somewhere along the way for our homes and homebuyers – it’s going to be on our own merits! And one of those merits, like it or not, involves a paradigm shift – or two, in way(s) we do business with one another. And there’s one example of a needed shift (e.g. ‘MARKETING’), featured and parsed as next topic in this blog posting….

But before we turn there, here’s a hint about the aforementioned ‘Something near nefarious (?) is afoot’ comment, regarding the broader, interim future manufactured housing industry scene. Simply; it has to do with someone or some thing achieving controlling national market share(s) in areas of 1) home manufacturing; 2) home finance; and, 3) full service real estate brokerage franchising.

II.

MARKETING

Manufactured Housing’s Industry Person of the Year, Ken Rishel of Rishel Consulting, in the December 2013 issue of his online newsletter, Chattel Finance Newsletter opined, ‘…the manufactured housing industry, and especially (land-lease-lifestyle) communities, need access to marketing expertise.” Amen to that! GFA

To buttress his point, Rishel described “A Michigan land-lease-lifestyle community owner (who) bitterly complained about…a self-proclaimed ‘marketing expert’ (to whom) he shelled over considerable money…for help in turning around his infill problems. Six months later the community owner had zero results for the money he’d invested.” Well, ‘shame on him’ if he didn’t ask for and check the quality of past work referrals related to this individual. Did this ‘expert’ possess peer – reviewed professional credentials, like being a Certified Property Manager®, or possess a bona fide real estate salesperson or broker licensee? In related fashion, it’s one of the reasons the Community Owners (7 Part) Business Alliance (‘COBA7) annually updates the ‘WhoYa Gonna Call in 2014?’ list of 40+/- freelance manufactured housing and LLLCommunity consultants. While listing thereon does not constitute endorsement, the list is vetted before publication each year! To obtain a copy, or – as a consultant, request consideration to be added to said list, simply phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. No other organization or individual, to date, researches and publishes such a useful roster for the MHIndustry and LLLCommunity asset class.

More on MARKETING…

“Marketing means human activity that takes place in relation to markets. Marketing means working with markets, which means attempting to actualize potential exchanges for the purpose of satisfying human needs and wants.” And, “Marketing management is the analysis, planning, implementation, and control of programs designed to create, build, and maintain mutually beneficial exchanges and relationships with target markets for the purpose of achieving organizational objectives.” *1 Well, there you have it, ‘marketing defined’. So, where do we go with that knowledge?

I can think of a few areas, where ‘marketing is spoken but not well practiced’. It’s one of those needed paradigm shifts presaged in the previous segment of this blog posting

HUD-Code home manufacturers. We wrote it here a few weeks ago, ‘Land-lease-lifestyle Communities = The Very Future of the Manufactured Housing Industry!’ And know what? Every verbal and written response from blog floggers (readers) agreed, home manufacturers and LLLCommunity owners/operators alike! WHY? For the most part, given their attrition from 1100+, down to fewer than 400, independent ‘street’ MHRetailers – unless actually owning one or more LLLCommunities, are Done & Gone! I get no joy out of penning that line, none whatsoever. But fact is fact. Yet HUD-Code home manufacturers continue to suffer, and wonder why, annual shipments of new HUD-Code homes have languished between 50,000 & 60,000 for the past five years. Yes, not having easy access to chattel capital continues to be ‘the killer’; BUT, with all the self – financing (i.e. ‘captive finance’ variants) going on these days among property portfolio owners/operators of LLLCommunities, and given an estimated 250,000 vacant rental homesites to fill, there’s No Excuse for not tapping into that market with specially-designed Community Series Homes or CSH Models (Featuring durability-enhancing features)! And know what? One firm effected a mailing, two weeks ago, to every HUD-Code home manufacturer in the U.S., suggesting what you just read! And to date, they’ve had but ONE response – from an East coast home manufacturer, asking how to identify this unique target market. The answer? A Direct Mail campaign to all 500+/- LLLCommunity portfolio owners/operators in North America (i.e. Six Canadian firms own hundreds of LLLCommunities in the U.S.) is easily possible. How so? Again, just contact COBA7 and ask….*2 It is not as easy, however, to contact the majority of LLLCommunities, whose rental homesite count is below 100; but it can be done!

So, paradigm shift # 1 = HUD-Code home manufacturers to aggressively market new, fairly-priced Community Series Homes, or CSH Models, to land-lease-lifestyle community owners/operators, large and small, nationwide, to fill 250,000 vacant rental homesites!

Land-lease-lifestyle communities. I’ve been fighting this battle for 35 years; first as a regional salaried property manager, then as an owner/operator, and for the past two decades, as a freelance property management consultant. And the same challenges persist, year after year after year. Being? Reluctance (or inability?) to identify one’s target market, especially when going into a new local housing market, upon acquisition – or better selling within an existing one. Answers? Demographically, go to zipskinny.com to learn the Area Median Income (‘AMI’), then calculate ‘How much home will sell there?’ using Ah Ha! & Uh Oh! Worksheet methodology; or, in one’s present market, use prospective customer’s (or household’s) Annual Gross Income (‘AGI’) in the exact same manner! Generally, do NOT rely on inventory selection advice from manufacturers’ regional rep – unless they happen to be a Business Development Manger (‘BDM’) named on the Official List of Community Series Homes Manufacturers. And site rent? This is more controversial than need be. How so? The Rule of Thumb Formula is simple: Stabilized rental homesite monthly rate should be roughly 1/3rd what it costs to rent a 3BR2B conventional (nonsubsidized) apartment or townhouse, in the same local housing market as the subject LLLCommunity! Unfortunately, this longtime 1:3 relationship is out of kilter (Yep, that’s an apt word; look it up.), thanks to overly zealous (And some say WS analyst – pressured) site rent increases among some real estate investment trusts, then aped by some privately-owned property portfolio players. Again, COBA7, via the Official MHIndustry HOTLINE, is your solely source for the above – referenced ‘Ah Ha! & Uh Oh! Worksheet (FREE), and the Official List of Community Series Homes Manufacturers and BDMs. *2

So, paradigm shift # 2 = Land-lease-lifestyle communities, with no independent ‘street’ MHRetailers in sight, must learn to use numbers (via zipskinny.com & ‘Ah Ha!& Uh Oh! Worksheet’) to understand what will sell in their present and future local housing markets; then effectively sell new and resale homes on-site and leave vacant rental homesites!

A Relatively New Marketing Critique & Planning Tool for HUD-Code Home Manufacturers and Land-lease-lifestyle Community Owners/operators. Here we’re talking about the ‘5-RPs of Marketing’. In its’ basic form, the 5-RPs include: Right Product, Right Place, Right Price, Right Promotion, & Right People. And there are three interrelated applications of these 5-RPs: 1) ‘Marketing & selling new homes INTO a LLLCommunity’; 2) ‘Marketing & selling new & resale homes WITHIN a LLLCommunity’; & 3) ‘Marketing & leasing rental homesites WITHIN a LLLCommunity’. To date, one or another of the two plastic wallet cards featuring said formulae, have been distributed to more than 200 LLLCommunity owners/operators – at the 22nd annual International Networking Roundtable; and, recently, to every HUD-Code home manufacturing facility still in operation in the U.S.. If YOU do not have a plastic wallet card (one is for home manufacturers & other is for LLLCommunity folk), but would like one, for FREE; again, simply phone COBA7via the aforementioned Official MHIndustry HOTLINE and ask for the appropriate card! *2 And if in need of Mystery Shopping service, anywhere in the U.S. and Canada, ask about that too, when you phone.

So, paradigm shift # 3 = Learn what marketing and sales system(s) work BEST for YOU and on-site staffs; then use them faithfully; and, routinely monitor on-the-job performance of employees via Mystery Shopping!

Sure, there’s much more to be said about marketing in the HUD-Code manufactured housing industry and land-lease-lifestyle community real estate asset class; but surely, by now, you ‘get the idea’ there’s lots yet to be done, to bring us out of the dark ages and into contemporary business marketing reality. In the meantime however, just be careful who you align yourself with: ask for credentials; see a sample of their work (e.g. reports); follow up on referrals; and if they’ve written a book on their specialty subject, read it!

End Notes.

*1. Principles of Marketing, Philip Kotler, Prentice-Hall, Inc., NY. 700 pages
*2 Community Owners (7 Part) Business Alliance resources available via Official
MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

III.

HOW ONE FIRM COMPUTES SITE RENT FOR ABANDONED HOMES OWNED BY AN INDEPENDENT CHATTEL LENDER

Given a rental homesite rate of $400.00/month, multiply that amount by the composite percentage of 11.5 percent (Comprised of 5% to account for property owner’s recurring PM fee, & 6.5% for real estate taxes *1) to arrive at $46.00/month expected from each home, with that property at that $400/month rent rate, owned by the independent chattel lender holding title to said abandoned manufactured home. The real estate tax percentage, of course, will vary from local housing market to local housing market. Do you clearly know what the appropriate percentage is for each and all of your land-lease-lifestyle communities?

Do YOU have an alternative method of calculating how much rent to charge for abandoned homes owned by independent chattel lenders until they sell their home on – site? If so, ‘inquiring minds would like to know’. Please write and share your methodology with us. See beginning of this blog posting for how to contact us.

End Note.

*1 These are Allen Model ‘Operating Expense Ratio’ (‘OER’) percentages published
as part of the Official Industry Standard Chart of (Operating) Accounts. This
seminal document also available from COBA7 via the Official MHIndustry
HOTLINE: (877) MFD-HSNG or 633-4764. And ‘PM’ = Property Management

IV.

Be Aware & Beware!

How a Useful $ Incentive Can Become an Unintentional Red Herring $

The ‘Be Aware’ portion works this way. Want to collect 90 percent of your site rent before it’s even due, before the first of every month? Then offer a $10.00, or larger, cash discount to land-lease-lifestyle community residents (lessees) who pay their site rent before the first of the month when it’s due! Nothing particularly ‘new’ there, except for those who ‘collect by mail’, then we use the postal cancellation stamp as discount control date.

The ‘Beware’ portion comes into play, if and when the LLLCommunity is marketed ‘for sale’. It’s simply ‘too easy’ to cite one’s rental homesite rate as being $400.00 per month, but neglect to tell the prospective buyer about the 90+/-% pre-due date rent collection effect of the 10 percent discount. For example, in a 500 site property enjoying 100% physical and economic occupancy, that 10% discount can mean a potential maximum difference of slightly less than a quarter million dollars over the course of a year:

100% occupancy & collection: 500 sites X $400/month X 12 months = $2,400,000

100% occupancy & 10% discount for prepaying site rent before the first of the month:
450 sites (90% pre-paying rent) X $360/month (effect of 10% pre-pay discount) X 12 months = $1,944,000 collected before the first of the month when due’ AND, plus.
50 sites (not pre-paying rent) X $400/month (no discount earned) X 12 months = $240,000. Then, $1,944,000 & $240,000 together = $2,184,000, or $216,000 less ‘gross potential income’ over the course of a year.

Differences in ‘income value’, using New Rule of 72. *1

500sites X $400 = $200,000 X 72 = $14,400,000 or $28,800/occupied site

450sites X $360, & 50 sites X 400 together = $182,000/month X 72 = $13,104,000 value; or $1,296,000 less value, but certainly a more efficient rent collection procedure.

Whew! A very good reason to verify a ‘for sale’ property’s bank (rent) deposit amounts over the course of a year, during the due diligence period.

Think I jest that this sort of thing happens from time to time? Well, I don’t jest. Reminds me of another anomaly Susan and I encountered when marketing a 700 site LLLCommunity several years ago. The developer/owner had been managing the property for decades, without keeping formal ledgers and operating statements. To recreate his books, Susan worked with his bank deposit records and checkbook stubs. But she wound up in a quandary, as the property’s ‘gross actual rental income dollar amount’ exceeded what we’d calculated to be his ‘gross potential rental income dollar amount’. How was that possible? Finally figured out, he counseled his immigrant homebuyers – to whom he was selling homes, at the time, on ‘contract’, to pay one month’s rent in advance, from the day of ‘closing’, so they’d never be late with their monthly payments! SO, the number of new home sales each year, times the monthly site rental amount, equaled the dollar amount overage relative to the ‘gross potential rental income dollar amount’. And yes, Susan and I continue to quietly 1) market LLLCommunities for owners/operators planning to retire; and, 2) work as ‘buyers’ consultants’, for a fee, for would-be first time investors and present day portfolio owners/operators in search of LLLCommunities to acquire. Reach Susan via (317) 889-6465 for more information.

End Note.

1. Rule of 72 is used only for ‘average’ (e.g. 10% income capitalization rate) land-lease-lifestyle communities! Run the numbers twice for every LLLCommunity, to estimate ‘gross potential income value’, and ‘present income value’. For example: 500 sites X $400/month rent X 72 = $14,400,000. Or same property, with 90% physical & economic occupancy: 450 sites X $400/month rent X 72 = $12,960,000. Note. This simple formula produces the same $ value as when using the well known IRV formula; in which case Value or ‘V’ = Net Operating Income, NOI, or ‘I’, divided by the income capitalization rate or ‘R’ for example, in the first instance: 500sites X $400/month rent X 12 months, multiplied by .6 (reciprocal of the 40% or .4 national Allen Model average OER, or operating expense rate, for LLLCommunities), divided by .1 (or 10% ‘cap rate’ for an ‘average’ LLLCommunity) = $14,400,000. Same procedure when using 450 sites X $400/month rent…= $12,960,000 (Not considering ‘rent discount’ in this example), or $1,440,000 difference in what the property is worth today, with 10% of sites vacant and not paying rent, versus what property is worth at 100% physical & economic occupancy!

***

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

Blog Column # 275 Copyright 2013 15 December 2013

George Allen Writes about Key MHBusiness Issues, Matters, & Serious Concerns

Perspective. ‘Land-lease-lifestyle communities, a.k.a. manufactured home communities & earlier, ‘mobile home parks’, is the real estate component of manufactured housing.’

Purpose of this blog. ‘To be the national advocacy voice, statistical research reporter, & communication resource for LLLCommunities, of all sizes, throughout North America!’

Ways to respond: Critical responses & helpful Ideas Welcome for future blog coverage:
Gfa7156@aol.com; Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764

Here’s something Special YOU can do for me after reading this week’s Blog Posting.

Reach out to friends in the MHBusiness & suggest they too start reading this weekly op/ed! All they have to do is contact me via one of two ‘Ways to respond’ above, & ask to receive our BEBA (Blast Email Blog Alert) most Sunday mornings. Thanks!

I.

15+ Important Things You’ll Learn When Reading
the
25th Anniversary Edition of the ALLEN REPORT!

II.

What’s Good for the Goose is Good for the Gander!

III.

DID YOU KNOW?
(Don’t want to miss this enlightenment)

I.

15+ Important Things You’ll Learn When Reading
the
25th Anniversary Edition of the ALLEN REPORT!

A.k.a.

‘Who’s Who Among Land-lease-lifestyle Community Owners/operators From Throughout North America!’

Not just TWO lists this year (i.e. 100 of 500+/- largest portfolio ‘players’, & 1994-2013 REIT portfolio size chart); now FIVE lists, including addition of 65+ mix of, ‘previously listed’ & ‘no shows’, plus 17 new listees & MORE!

1. Who is Green Hill Financial? You need to know, as the debut of this $ firm – in this industry observer’s opinion, ‘might’ mark the emergence of new trend!

2. How to facilitate your Direct Mail Campaign access to the exclusive, data base comprised of 500+/- LLLCommunity US & CN portfolio owners?

3. What is the average property portfolio size, by number of LLLCommunities, during 2013? And average size LLLCommunity within these portfolios?

4. What percentage of all 780,705 rental homesites catalogued in this year’s 25th Anniversary ALLEN REPORT are owned/operated by the Ten Largest LLLCommunity Portfolio Firms? Hint. Surprise = More than 50 percent!

5. Collectively, by what percentage, did the three LLLCommunity REITs (ELS, Inc., SUN Communities, Inc., & UMH Properties, Inc., Grow or Reduce their rental homesite inventory during 2013? And which, if any, ‘grew’ the most?

6. Examining a sampling of small to mid – sized property portfolios, what was the average’ ratio of all-age to age-restricted LLLCommunities’ during 2013?

7. What high percentage of this year’s ALLEN REPORT respondents from 32 states and once Canadian province, hail from just nine states & one province?

8. What is the ‘average national physical occupancy’ among ALLEN REPORT LLLCommunity owners/operators respondents during 2013?

9. What is the ‘average value of a contract sale home’ among this year’s 7,820 homes reported by 29 LLLCommunity portfolio owners/operators?

10. What is the ‘average national Operating Expense Ratio’, or OER percentage among ALLEN REPORT’s LLLCommunity owners/operators for year 2013?

11. How many LLLCommunity owners/operators acquired 1,000+ rental homesites apiece, in 2013, and named as part of the ‘Pride of Young Lions’?

12. Of the ‘Daring Dozen LLLCommunity ‘portfolio-building entrepreneurs’ who ventured forth in 2005, ‘How many & Who’ remain active in the asset class?

13. And WHO is Manufactured Housing Industry Person of the Year for 2014?

14. And WHO is the worthy professional property manager of LLLCommunities, now honored with the designation: Manufactured Housing Manager–Master!?

As announced in last week’s blog, as well as in the December issue of the Allen Letter professional journal, the 25th Anniversary ALLEN REPORT, and future editions, as well as a dozen Signature Series Resource Documents, or SSRDs, will be available only as an integral part of two packages (a.k.a. Options II & III), available from PMN Publishing. In summary, the contents of each Options are:

OPTION I. Allen Letter professional journal alone – No ALLEN REPORT, No Signature Series Resource Documents (& directories) described earlier. Cost. $134.95

OPTION II. Allen Letter professional journal, 25th anniversary ALLEN REPORT, & 12 monthly Signature Series Resource Documents (& directories). Cost $554.95 This monthly newsletter, 25th AR, & 12 SSRDs = ‘Our LLLCommunity knowledge base!’

OPTION III. Allen Letter professional journal, 25th anniversary ALLEN REPORT, & 12 monthly Signature Series Resource Documents (& directories), as well as the Allen CONFIDENTIAL! ‘insider’ business newsletter for Sr. Execs. Cost $994.95 These 4 Resources have served MHIndustry professionals for more than 2 decades!

If you’re already an Allen Letter professional journal subscriber, & are satisfied with that monthly source of key & timely LLLCommunity/MHIndustry information, there’s nothing to do, but ‘use that information’, & wait for your renewal notice. But there’ll be no ALLEN REPORT enclosed in the January 2014 Allen Letter. However, if NOT presently a subscriber, but would like to become one, simply phone Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 and sign-up for OPTION I…

AND, whether you’re a present Allen Letter professional journal subscriber or not, but would like to receive a copy of the Biggest & Best 25th anniversary ALLEN REPORT, along with the dozen Signature Series Resource Documents (& directories) during the next 12 months, decide between OPTION II & III, then phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 to subscribe!

And remember, the sole difference between OPTIONs II & III, is the latter option includes the coveted and rare opportunity, as a Senior Executive in either the MHIndustry or LLLCommunity asset class, to be privy to timely, inside information generally not printed elsewhere by anyone else; and if so, generally ‘months after you’ve read it’ in the Allen CONFIDENTIAL! business newsletter. The TAC! ‘newsletter’ is comprised of three to five, single-spaced, typed pages, and is accompanied by one to two or more dozen ‘enclosures’ documenting everything disclosed within that issue. For example. Who’s new CEO @ Green Hill Financial?

Questions, & to order your OPTION choice, phone Official MHIndustry HOTLINE!
To ensure receipt of your copy of the 25th Anniversary ALLEN REPORT – Bigger & Better than any of the previous 24 annual editions, effect your OPTION choice before the end of December 2013!

II.

‘What’s Good for the Goose is Good for the Gander!’

An old saying or idiom, with several shades of meaning – believe it or not, that apply to the lease-option home finance alternative, regarding manufactured home transactions in land-lease-lifestyle communities!

Gander = ‘a male goose’
&
Gander = ‘a careful look’

The shades of meaning: 1) ‘What’s good for one sex is good for the other’; 2) ‘Hey, maybe this lease-option alternative deserves a second careful look’; and, 3) ‘If lease-option is good for a few large portfolio owners/operators, why wouldn’t it be good for most remaining properties in the realty asset class’?

So, it was with those thoughts in mind, I reached out to Spencer Roane, MHM®Master, and owner/operator of Pentagon Properties, to share his latest and best ‘take’ on…

‘Lease-Option as an Alternative for In-LLLCommunity Seller-Financing’

With all the talk these days, about new financing regulations taking effect next month (January 2014) – and the tangible havoc they’re expected to wreak on the manufactured housing scene, perhaps it’s high time for us to re-consider Lease-Option (‘L-O’), as a practical means of supporting home sales within your land-lease-lifestyle community or communities. If you agree, here’re a few things to think about now and during the few weeks ahead to the end of the year….

The Bad News is the S.A.F.E. Act, which requires licensing for mortgage origination and servicing, is a Federal law interpreted and enforced differently among states. So, what’s acceptable in one state may not be acceptable in another. Furthermore, some regulators have taken positions against L-O, without taking time to learn and recognize how it differs from ‘lease-purchase’, ‘rent-to-own’, etc., which many agree, are indeed credit transactions that could result in the origination of mortgages requiring S.A.F.E. act licenses.

The Good News is what deserves our attention here.

• Almost five years have passed since the S.A.F.E. Act was enacted. Chicken Little arguments against L-O (e.g. Misleadingly called ‘disguised credit transactions’, or walks-like-a-duck, & quacks-like-a-duck, etc.) have been appropriately dismissed from most serious finance conversations. Anyone who thinks law is that simple should wonder why it takes more than 70,000 pages to document the U.S. tax code.

• Some very bright attorneys agree mortgages are not created or originated by L-O transactions, and therefore, S.A.F.E. Act licenses are not required with them. If you missed the SECO Symposium in Georgia, earlier this Fall, you missed a great presentation on this very subject. It’s posted for your edification at the website www.SECO13.org

• Many large land-lease-lifestyle community owners/operators have used L-O contracts to sell homes for years. Unfortunately, they dominate national advocacy organizations, and seemingly discourage the host body from disseminating information about L-O to other, albeit smaller, LLLCommunity owners/operators around the U.S.

If you’re seriously interested in L-O transactions (e.g. Arguments as to why S.A.F.E. Act licenses are not required, how to structure transactions, and even a copy of one LLLCommunity owner/s L-O contract, etc.) review this free information at www.LeaseOptionMHSales.com, particularly the following links: Also check out these resources:

‘Lease Option Sales Transactions Gaining in Popularity’, published in the April 2011 issue of the Allen Letter professional journal. Revised & reprinted @ 8/2012

‘Everything you’ve ever wanted to know about lease purchases, and then some’, and ‘Consumer Leasing Act: Regulation M’; both by D.J. Pendleton, executive director, Texas Manufactured Housing Association, describing S.A.F.E. Act and Dodd-Frank Acts, MH seller financing, and Regulation M – all in ‘TMHA Today’, Winter of 2012.

‘Characteristics of a L-O Transaction that Differentiates it from an Installment Sale’, July 2013.

All the preceding information was provided, at this blogger’s request by:

Spencer Roane, MHM-Master, president of Pentagon Properties, Inc., Atlanta, GA. Mr. Roane owns and manages four land-lease-lifestyle communities in Georgia and Texas. His firm has sold more than 250 new and resale manufactured homes in his communities during the past 20 years, via Lease-Option contracts. During the past three plus years, his firm has had NO defaults on new home Lease-Option contracts. He is a member of the Georgia Manufactured Housing Association, where he served as an officer and member of the board of directors. He is a former member of the Manufactured Housing Institute (‘MHI’) where he served on the National Communities Council (‘NCC’) board of directors, and the Disaster Housing Task Force. He is one of the organizers of the highly successful SECO Symposium series for LLLCommunity owners/operators throughout the Southeast U.S. He holds a B.S. degree in Electrical Engineering, an M.S. degree in Industrial Management, and both the Mortgage Loan Originator and Mortgage Broker S.A.F.E. licenses. Contact him at spencer@roane.com or (678) 428-0212. Pentagon Properties, Inc. website. LinkedIn profile.

III.

DID YOU KNOW?
(Prepare to be twice enlightened here!)

Being identified as a key leader, MHIndustry Person of the Year, or a Manufactured Housing Manager® – Master, in any book printed and distributed by PMN Publishing (There’ve been 11 to date), pretty much ensures your name and unique business achievement(s), an enduring place in manufactured housing and land-lease-lifestyle community history! For that matter, being identified as a major loan originator or freelance consultant, in one or another of PMN Publishing’s dozen Signature Series Resource Documents (& directories), even as a ‘presenter’ at the annual Networking Roundtable, also ensures your personal & corporate legacy! How so?

To date, there’ve been more than 11 MHIndustry Persons of the Year and 16 Manufactured Housing Manager®-Masters designees honored, along with the 19 land-lease-lifestyle community owners/operators who met on 31 August 1993, the latter taking the first pre-REIT steps leading to formation of a national advocacy body. And there’ve been other ‘special mentions’ over the years, as well, e.g. Sam Zell of ELS, Inc., naming of the annual Pride of Young Lions (Year’s most successful portfolio consolidators) and the Daring Dozen (2005 era portfolio – building entrepreneurs), within the annual ALLEN REPORT, a.k.a. ‘Who’s Who Among LLLCommunity Owners/operators Throughout North America!’ Many of these ALLEN REPORTs have been routinely republished as appendices in most of PMN Publishing’s textbooks.

Again, the same can be said of one’s appearance and reputation in the annual National Registry of Realty & Chattel Loan Originators, and ‘Who Ya Gonna Call in 2014?’ list of freelance consultants – just two of PMN’s dozen SSRDs! These unique resource documents and directories, designed and updated annually for the use of land-lease-lifestyle community owners/operators nationwide, and in Canada, are also oft included as appendices. For example, the firm’s most recent release, Bruce Savage’s The First 20 Years! (Chronicling the first two decades of LLLCommunity national advocacy) contained not only the names and biographies of the aforementioned 19 ‘pioneers’, but all the SSRDs updated during 2013! To order a copy of the book, for $19,95 postpaid, phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

Now enter national libraries of business – related books. At least three have expressed interest in acquiring the extensive manufactured housing and land-lease-lifestyle community corporate library of GFA Management, Inc., dba PMN Publishing. The RV/MH Heritage Foundation’s library in Elkhart, IN., Library of Congress, and the National Building Institute library in Washington, DC. Why would these national libraries want to acquire this firm’s ‘stacks’? Because this particular corporate collection contains virtually every published and bound (case, perfect & spiral) title published from the early 1970s to the present day, numbering more than 100 volumes – including collections of short stories, stand alone mysteries, biographies and autobiographies, HOW TO works, & much much more.

So, if your name and achievements are mentioned and or highlighted in any of PMN Publishing’s past and ‘in print’ texts, SSRDs & directories – even those yet to come, e.g. a new ‘Lessons Learned in LLLCommunity Management’ tome planned for 2014. (Interested? Let us know of your interest via the above – referenced Official MHIndustry HOTLINE!), know Your Legacy will ‘live on’ in one or more of the national library repositories of business history! The question that begs answering though, is this: ‘What other business or organization in the entire manufactured housing industry looks out for your present, future, and personal/corporate legacy in such tangible fashion?’ None.

With that said, and if an Allen Letter professional journal subscriber, you likely have just learned who’s being honored as the 2013/2014 MHIndustry Person of the Year, and who’s just been designated a Manufactured Housing Manager®-Master. If not, you’ll soon read their names and stellar achievements in the 25th Anniversary ALLEN REPORT, scheduled for distribution during early January 2014. And trust me, this is one ALLEN REPORT you do not want to miss! As stated earlier, this is the Biggest & Best ALLEN REPORT published in 25 years! Even contains a copy of the 1987 pre-ALLEN REPORT list of ‘25 largest mobile home park owners’ known at the time. Today there’re 500+/-!

Frankly, I am ‘pumped’ for the year 2014! Why? The Community Owners (7 Part) Business Alliance, and ‘Opportunity for you to align your business interests with COBA7’, was introduced but a couple weeks ago, and already verbal, written, and financial support has waxed heavy and sustained! As expected, the aforementioned OPTION II is drawing the most response from land-lease-lifestyle community owners/operators nationwide, but there’s also been a surprisingly good number of OPTION IIIs too. SO, if you want to be among the first to receive the 25th Anniversary Edition of the ALLEN REPORT, soon after 1 January 2014, effect your subscription soon, via Official MHIndustry HOTLINE!.

One final hint. I’m contemplating hosting a COBA7 breakfast one morning during the Louisville MHShow, probably 22 January 2014. If you are interested in attending, and want to be sure of an ‘invite’, let me know via one of the means mentioned at the beginning of this blog posting. Threefold purpose of the breakfast meeting? 1) Explain what the Community Owners (7 Part) Business Alliance is all about and encourage Your Participation; 2) solicit Your Input as we plan a national FOCUS Group meeting in early April 2014; and finally, 3) Your Opportunity to express interest in penning fresh material for possible inclusion in the ‘Lessons Learned in LLLCommunity Management’ book planned for distribution later during 2014, likely at the 23rd annual International Networking Roundtable. I’ve already polled the four dozen LLLCommunity owners/operators who’ve helped launch COBA7, and the majority of them plan to be present at the breakfast meeting, probably from 8 – 10AM. How ‘bout you?

COBA7. National business alliance of LLLCommunity owners/operators, large & small, featuring seven functions: National Advocacy, Statistical Research, SSRD (& directories) Distribution, Peer Networking, Deal – making Opportunities, & Profession Property Management Training & Certification.

***

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

Blog # 274 Copyright 2013 8 December 2013

George Allen Writes About Key MHBusiness Matters, Concerns,& Much More…

Perspective. ‘Land-lease-lifestyle communities, a.k.a manufactured home communities & earlier, ‘mobile home parks’, is the real estate component of manufactured housing.’

Purpose of this blog. ‘To be the national advocacy voice, statistical research reporter, & communication resource for LLLCommunities, of all sizes, throughout North America!’

Ways to respond: Critical responses & helpful ideas Welcome for future blog coverage; gfa7156@aol.com; Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764

I.

‘COBA7’

II.

Giving ‘Lifestyle’ Legs…

III.

The Elephant in the Room

_____________________________________________________________

I.

‘COBA7’

‘Community Owners (7 Part) Business Alliance’, already the buzz among land-lease-lifestyle community owners/operators throughout the US & CN’

Here’s the first of several responses to last week’s blog introduction to the ‘Community Owners (7 Part) Business Alliance’, and how ‘COBA7’will usher in a NEW ERA for ‘all of us’ during 2014:

“Well thought out, George, but there is an 8th part or purpose of the Allen activities. The opportunities you provide for all (manufactured housing) industry folk, to opine about their business concerns, beliefs and practices, is also Invaluable; and I feel should be highlighted! Large or small, you hear them all….” JR That’s certainly the case; you folk do write and communicate a lot with me, as you’ll soon read in Parts II & III of this blog.

Following is a Summary of Seven Functions targeted by the COBA7. And please remember; this is NOT a formal membership $ driven ‘for profit’ or ‘not for profit’ trade group; rather, it’s ‘an informal alliance of businessmen and women with land-lease-lifestyle community ownership/operations in common’. The three subscription Options, described a little later in this blog, is how the research, printing, and distribution (postage) costs will be covered going forward. So, please decide SOON, at what level you want to align your advocacy, research, resources, communication, networking, deal-making, and property management training/certification needs with COBA7. Specifically,

• National Advocacy. While the mission of one national council, there are issues and opportunities presently being ignored, that need to be addressed during 2014

• Statistical Research. The 25th anniversary ALLEN REPORT, a.k.a. ‘Who’s Who Among Land-lease-lifestyle Community Owners/operators Throughout North America!’ is Bigger (167+ owners/operators identified this year; up 52% from 110 ‘players’ listed last year!) & Better (More benchmark statistics and ‘good to know’ information than ever before…)

• Resources Distribution. 12 Signature Series Resource Documents or SSRDs, include: ‘Official State of the MHIndustry & LLLCommunities!, National $ Registry of RE & Chattel Lenders, ‘Who Ya Gonna Call’ list of freelance consultants, Official directory of print & online MHPublications; Official MHLexicon; and, six additional information – packed titles & directories!

• Print & Online Communication via weekly blog posting, the Allen Letter professional journal, and/or the Allen CONFIDENTIAL! business newsletter.

• Peer Networking via annual Networking Roundtable & periodic FOCUS Groups for LLLCommunity owners/operators desiring to caucus confidentially.

• Deal – making via opportunities planned & hosted with & by national real estate brokerages specializing in the Marketing of LLLCommunties in U.S. & CN

• Professional Property Management Training & Certification via the popular Manufactured Housing Manager® or MHM® one day class for owners/operators

You know, the blog correspondent quoted at the beginning of Part I to this week’s blog posting is Too Right. Sad to say, but there are NO longer, any other present day outlets or voices available to MHIndustry & LLLCommunity businessmen and women, other than three print and a couple online ezines and blogs. Here’re a couple sobering, troubling questions, along with one very dark thought: 1) When was the last time you read opinions and observations by our peers in print or online, except for the casual interview here and there, and the guest features you read in the Allen Letter professional journal? Now consider; 2) How would we fare, information-sharing and communication-wise, throughout our realty asset class, if we lost one or all these present day media means? Consequence. We’d likely have little to NO trade press left, and revert to the Dark Ages of No Communication suffered more than 25 years ago – except for what was written about home manufacturers!

To that end, decide before the end of December 2013, which of three Options describe your subscription affiliation with the Community Owners (7 Part) Business Alliance, or COBA7, during 2014:

Option I. Allen Letter professional journal alone – No SSRDs (e.g. And no ALLEN
REPORT) enclosed with 12 monthly issues of the newsletter @ $134.95

Option II. Allen Letter professional journal, 25th anniversary ALLEN REPORT, &
12 monthly Signature Series Resource Documents, @ $544.95/year

Option III. Allen Letter professional journal, 25th anniversary ALLEN REPORT, &
12 monthly Signature Series Resource Documents, & the Allen
CONFIDENTIAL! business newsletter, @ $944.95/year.

For those with existing subscriptions to either or both monthly print newsletters, an adjustment will be made to the amount you pay to begin the new year (2014). And remember; the 25th anniversary Biggest & Best ALLEN REPORT ever, will NOT be enclosed as a lagniappe or ‘freebie’ in the January 2014 Allen Letter professional journal!

To order Option I, II, or III subscription, phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. If already an Allen Letter professional journal subscriber, & NOT interested in receiving the 25th annual ALLEN REPORT & 12 SSRDs, simply await a renewal form on or near your subscription date.

Bottom Line, One Last Time. Your financial support of the ‘Community Owner (7 Part) Business Alliance’ ensures LLLCommunity owners/operators, large and small, nationwide, will benefit from the Seven Functions described above, for years, even decades, to come! This is your opportunity to ‘get on board’ during December 2013. Watch for an announcement of a meeting of COBA7 affiliates during Louisville MHShow, likely on 22 January at a hotel near the KY State Fair Grounds….
II.

Giving ‘Lifestyle’ Legs…

The ‘Lifestyle’ adjective is catching–on far faster than we expected it would!

Here’s how another blog flogger (reader) suggests we help the manufactured housing industry & land-lease-lifestyle community asset class to embrace the ‘Lifestyle’ adjective among all segments or components of our unique, double – dual business type.*1

1. Start locally. Talk it up, and encourage exemplary businesses, new and old, to introduce Lifestyle into their entity name, mission statement, advertising, etc.. Even involve one’s state manufactured housing association in this new positioning of our housing type and community lifestyle.

2. Zero – in on HUD-Code manufacturers & land-lease-lifestyle community owners/operators actively using Community Series Homes, or CSH Models, to fill some of those 250,000 vacant rental homesites nationwide! In a word; if we’re ‘taking the high road’ with new CSH Model homes, why not include Lifestyle in all marketing efforts as well? Same can be said of using the cutting edge Modular Lifestyle homes.

3. Insist all local housing market rent surveys of LLLCommunities, by JLT & Associates and others, to include ‘all such properties’, NOT just the cherry – picked few of lively interest to property portfolio consolidators. Then identify the ‘best’ properties within said surveys, and highlight them as being exemplary ‘Lifestyle’ communities in that local housing market(s).

As you likely recall from last week’s blog posting, the world’s largest owner/operator of land-lease-lifestyle communities (i.e. Equity Lifestyle Properties, or ELS, Inc., for short), and Canada’s largest owner/operator of LLLCommunities, Parkbridge Lifestyle Communities, Inc., have already incorporated the adjective Lifestyle into their entity names! And Modular Lifestyles, a California converter of ‘trailer parks’ into land-lease-lifestyle communities, is setting a positive example among property owners/operators on the West coast. Let me know, via the contact alternatives listed at the beginning of this blog posting, when you’ve introduced the adjective Lifestyle into your corporate name!

End Note. 1. Double-dual business type? ‘HUD-Code home manufacturing & distribution; LLLCommunity development & investment/management’.

***

III.

The Elephant in the Room

And this, from a third blog flogger (reader), & so worthy of your attention!

“George. Kudos to you for identifying ‘the elephant in the room’, affecting the present and future of our property type (land-lease-lifestyle communities), especially where major (portfolio) players are concerned!”

“The titanic lack of professional property management of these multi – million dollar real estate investment assets is perplexing. I know from where it (i.e. nominal worth of on-site managers) rises – the bean counters assumption ‘real estate is the value of the asset’. This view pales however, when site and home vacancy rears its’ head! My conclusion is, many of the mature and successful industry professionals we’ve known over the years, have risen to senior management positions, and now struggle to keep their fresh crop of ‘apartment leasing consultants’ afloat in their sea of home sales and site leasing ignorance.”

“Just make a few (telephone) calls, and ask the person answering (leasing or sales consultant) a few questions, if you want to experience the ‘dumbing down’ of today’s on – site staff. These are often (former) apartment leasing staffers who’ve discovered, working as LLLCommunity managers brings more job satisfaction than painting walls, cleaning carpets, and servicing appliances during make – ready. But they’ve NOT learned – or been taught. probably due to training budget constraints, the basics and finer points of community management, home sales, and site leasing.”

“I frankly, but selfishly, appreciate this phenomenon (i.e. Corporate training, supervision, & Mystery Shopping shortfalls), because it makes it SOOOO easy to compete against them! How does one beat their really nice curb appeal and high rents? By effectively managing, selling, leasing on – site! And ask their residents if they would buy there again, and put up with the ‘artificially inflated market rents’ these firms manufacture. Not! So, I thank God for the REITs!” (Edited. GFA)

WOW! As we asked earlier in this blog posting, ‘Where else can businessmen and women, from the grassroots of our industry/asset class, and working on the front lines of property management, home sales, and rental homesite leasing, go to publicly share their observations, opinions, ideas, even criticisms of the status quo, and how we conduct our various business interests?; Answer: ‘Nowhere else!’ Just here – and here’s how….

The following terse line is also from a ‘last week’ blog flogger, one with 30+ years in the manufactured housing industry – and it’s not me!

“Good plan for a new organization (‘NO; again, ‘COBA7’ is a ‘business alliance’, NOT a formal business or association entity funded by membership dues! GFA). Often wondered, over the years, why communities and retailers have stuck it out with the (national advocacy body/ies). Let’s get-r-dun!” NB

Think that an outlandish comment? I don’t, and here’s why. Let’s call it ‘affluence gerrymandering’ – the de facto control of national trade association agenda (voter) power by 1) always holding national meetings in expensive venues, affordable only to the most affluent of businesses and state trade associations – hence discouraging member participation; and where, 2) voting is restricted to only those relatively few members in attendance at said national meetings! *1 This is not a new concept, not at all. It’s been the self-serving, power-garnering pattern, within certain manufactured housing industry advocacy circles, for more than three decades. In this industry observer’s opinion, it’s high time for wholesale change, of one sort or another…!

What change(s)? There’re really only two choices, maybe three. To 1) work from within, as direct, dues – paying members, collectively agreeing to propose and effect changes – in selection of meeting venues, and changing organization’s bylaws (e.g. allowing proxy voting by absentee members). And barring success there, 2) launch a new trade entity designed, in part, to correct self – serving matters like ‘affluence gerrymandering’ and rejection of proxy voting by absentee members, OR, 3) put up with ‘affluence gerrymandering’ and rejection of proxy voting for another three decades! Whew! Let’s hope neither of the latter two alternatives become reality.

End Note. 1. ‘gerrymandering’ = “…change the boundaries of election districts to give one political party an unfair advantage.” In the instance of ‘affluence gerrymandering’? Effect artificial boundaries, i.e. 1) one’s ability to participate financially, & 2) restrict voting privilege to those direct, dues – paying members in attendance at meetings, ‘to give one political party (e.g. affluent businesses) an unfair advantage.’

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IV.

Hey, keep those emails, voicemail messages, penned notes, even telephone calls, coming my way! It ‘more than appears’ this weekly blog posting has struck a strong responsive chord among the 1,000+/- BEBA (Blast Email Blog Alert) recipients most Sunday mornings. At present we’re averaging more than a dozen written inquiries, insightful opinions, and helpful suggestions per week. And that’s fine. I can easily handle that volume. Don’t know ‘bout you, but I’m convinced the trade politic junkies, a.k.a. ‘wonks’ are so entrenched in one national advocacy body, they must continually ‘read about themselves’, and their ineffectiveness as leaders, lobbyists (Where’s that Senate bill we’ve been awaiting since before Thanksgiving?) and communicators, until they collectively adopt a New Years Resolution to better represent our entire industry!

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