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

Blog # 244 Copyright 2013 28 April 2013

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

I.

Manufactured Homes & Land Lease Lifestyle Communities,
the Archetype For All Affordable Housing

II.

Others Benefit from This; Why Not Your Firm???

III.

And the Talk Goes On, but That’s ‘All it is’ So Far…

IV.

Soft Underbelly (vulnerability) of Social Media!

V.

Did You Realize? 2013 is 20th Anniversary of….

I.

Manufactured Homes & Land Lease Lifestyle Communities,
The Archetype of Affordable Housing

Allowing for differences in business practices and ‘barriers to affordable housing’, among local markets, HUD – Code manufactured homes in land lease lifestyle communities (a.k.a. manufactured home communities), charging site rent in sync with other forms of multifamily rental housing (e.g. Usually 1/3rd the amount of monthly rent charged for a 3BR2B conventional apartment), continues to be the Sole Archetype (prototype) for Truly Affordable Housing in the United States today!

FOR EXAMPLE. Anyone earning the recent national Annual Median Income, or AMI, of $51,000, can afford a small new or modest resale manufactured home, given favorable loan terms, and modest site rent in most all age LLLCommunities! The Key to Success, is NOT to exceed the commonly – accepted 30% of AMI Housing Expense Factor, wherein household utility expenses, but not telecom charges, are included, along with PITI within said HEF. SPECIFICLLY: $51,000 AMI X .3 HEF = $15,300 available for housing payment & household expenses; X .75 (75%) to separate out ‘available for’ PITI payment amount alone, = $11,475; divided by 12 months = $956.24/month, less $300/month for site rent = $656.25 available for monthly house payment or PITI (principal, interest, taxes, insurance). This calculation in accords with the ‘Ah Ha! & Uh Oh! Worksheet’, available FREE by phoning the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

Where else can one go in the U.S. today, to buy a home, which will likely appreciate in value over time – if well cared for and sited in a good location; and pay site rent to live in a multifamily community professionally managed – not having to be subsidized by the government and one’s fellow citizens? Nowhere!

II.

Others Benefit from This; Why Not Your Firm???

Following passages are excerpted from a recent briefing effected for the board of directors of a manufactured housing and land lease lifestyle community – related firm. As you read thru these informative excerpts, ask yourself, ‘Would this material be of interest and helpful to officers, senior executives, even board of directors of our firm? If so, give me a call at the MHIndustry HOTLINE: (877) MFD-HSNG or 633.4764 to schedule a briefing.

‘So, what’s with this ‘land lease lifestyle community’ lingo anyway? Well, it’s tacit and timely industry cum public recognition this unique, income – producing property type, heretofore known as ‘manufactured home communities’, now routinely site six or more different housing types on the rental homesites contained therein….’

‘There are an estimated 50,000+/- LLLCommunities nationwide, with 85% of that number containing fewer than 100 rental homesites apiece. And that 85% drops to 78% in Sunbelt states like Florida and California. Unfortunately, we’ll not firm up those inventory number percentages anytime soon, for several reasons….’

‘In 1987, the real estate consulting firm Deloitte Haskins + Sells, in their newsletter, Roulac’s Strategic Real Estate, identified the ’25 Largest Mobile Home Park Owners (by spaces owned). A year later, Roulac’s list ceased publication, and the first ALLEN REPORT (a.k.a. ‘Who’s Who Among LLLCommunity Portfolio Owners/operators Throughout North America!’) debuted, immediately bumping the number of ‘portfolio firms’ from 25 to 100! Why the fourfold increase in number of ‘players’ nationwide? Three reasons: The first wave of consolidation was well underway, characterized by limited partnership syndicators, taking advantage of a major tax break that had lasted until 1986….’

‘From early to late 1990s, consolidation continued, and for awhile, it appeared ‘everyone’ would become a real estate investment trust or REIT. That did not happen. Only six were ever formed, three survive today. What happened? Too high expectations by WS analysts, who erroneously viewed LLLCommunities as ‘growth stocks’, insisting dividends grow quarter after quarter after quarter. NOT. And increased regulation….’

‘Since year 2000? NO more lasting REITs (e.g. loss of ARC – twice now, & American Land Lease); NO more chattel capital, to speak of, from independent, third party chattel lenders – but that’s not the whole story. Equity partner ownership takes center stage, first with Hometown America, then Green Courte Partners (Anyone know the single unique commonality among the firms ELS, Inc. (the REIT), Hometown America, Green Courte Partners & American Land Lease? Answer: _______________)’

‘According to the 24th annual ALLEN REPORT, 500+/- LLLCommunity portfolio owners/operators today, own an average of 22 properties apiece (With ELS, Inc., at the top, with 382 properties and an average property size of 369 rental homesites, with 60+/-% of those being for RVs).’

‘And here are the four Current Business Challenges & Trends Sorely Affecting LLLCommunities Nationwide…’

Yes, this briefing content is chock full of historical notes, industry trends, even the challenges and opportunities we face today. So, do you think your management team would benefit from being better informed and made knowledgeable of ‘where we’ve been’, ‘where we are today’, and ‘where we might well be headed’ during the next ten years or so? If so, again give me a call and schedule a presentation. GFA (317) 346-7156

III.

And the Talk Goes On, but That’s ‘All it is’ So Far…

“My comments on exiting HUD were solicited by George (Allen), and were on that point. Do I think we should exit HUD? I am not sure, but do see some wonderful advantages – FREEDOM being the most important. I also see some uglies – POOR STANDARDIZATION being the most prevalent.” NB

What I’ll say at this point in time is, WE SHOULD ALL BE GRATEFUL for the ACTIVE NATIONAL ADVOCACY ROLE the Manufactured Housing Association for Regulatory Reform (MHARR) is playing in keeping several emerging issues ‘front and center’ among businessmen and women deeply concerned about the present and future of their manufactured housing and land lease lifestyle community enterprises. For example:

I continue to be amazed how little public dialogue is taking place regarding provisions of the Uniform Manufactured Housing Act, proposed by the Uniform Law Commission @ July 2012. Nary a word about the matter last week, at the MHCongress in Las Vegas. Isn’t anyone else concerned about probable negative consequences (Maybe higher taxes on the homes) of doing away with the titling of manufactured homes inside and outside LLLCommunities? The excuse I hear, from more than one national leader, is ‘This is a state matter.’ OK, I’ll concede that; but shouldn’t there be information and guidance ‘trickling down’ from our national advocacy body to state MHAssociations? Not saying it isn’t happening; but I’m a dues – paying member of two such trade bodies, and I’m ‘hearing & reading nothing’. By the way; ‘Why the de – titling initiative in the first place/” So certain large national bank(s) can feel more comfortable originating non – chattel mortgages on new and resale manufactured homes.

Then there’s this whole matter of ‘HUD vs. No HUD’ regulatory oversight of manufactured housing, going forward. Reread the direct quote that introduced this portion of this week’s blog posting. NB simply ‘scratches the surface’ of the pros and cons relative to this timely, potentially paradigm shift effect on HUD – Code manufactured housing as we know it today. Tell me; do you really think, if HUD is taken out of the picture, we’ll be left, as an industry, to function (i.e. self – regulate) on our own? Not for a minute! The gist of this ‘capitol move’ has to do with forces outside, but near our industry, wanting to step in and exert their own brand of influence and control over the manner in which we build and site our brand of factory – built housing. And here we are, for the most part, sitting quietly by, while fate appears to take us in a direction over which we’re exerting little to no control. Think I exaggerate? Guess you’ll have to wait and see. Frankly, as I’ve written before here (In ‘Hey HUD! Help Out!’), I’d like to see HUD actively promote HUD – Code manufactured housing as affordable housing.

Earlier I lauded MHARR for keeping grassroots manufactured housing and LLLCommunity businessmen and women, like thee and me, informed. Well, how many of you read MHARR’s announcement, 23 April, to this effect: “The House Financial Services Committee cannot legally accept testimony from Richard Cordray, on the Consumer Financial Protection Bureau’s (CFPB) semi – annual report until he is validly appointed as the bureau’s director”, said Rep. Jeb Hensarling (R-TX), the committee’s chairman. However, the committee will continue to conduct rigorous oversight of the CFPB. Do you catch the drift of the first statement? Hopefully you do. Again; who else is keeping us (YOU) informed about such matters potentially affecting our business interests? Get on MHARR’s online email distribution list by phoning (202) 783-4087.

IV.

Soft Underbelly (vulnerability) of Social Media!

The following two passages are quoted directly from the March/April 2013 edition of Sales & Marketing magazine, and warrant your close attention – and probably action, within your firm!

“Many social media enthusiasts are convincing businesses, governments, and nonprofits, to use social media based on blind faith, supported by soft metrics that, for all intents and purposes, is (simply) old marketing guised as newfound engagement. Just because a business is embracing new technology doesn’t mean it is creating meaningful, productive or measureable experiences.” P.6

– and this –

How so? “A study conducted by Satmetrix in mid – 2012, revealed less than half the companies it surveyed, tracked and followed up on customer feedback in social media. An astonishing 28 percent do NOT track or respond, leaving customers to question their value to the businesses they support. That lack of acknowledgment or engagement leaves the door wide open to competitive courtship….

Acquisition of customers through social networks is only part of the story. The brilliance of social networks is the opportunity to transform negative experiences into positive outcomes. Conversations inspire opportunities for product refinement, or innovation to create remarkable experiences from the onset.” P.7

For more information on this disturbing subject, read the new J. Wiley & Sons release: ‘What’s the Future of Business? Changing the Way Businesses Create Experiences’ by Brian Solis, 2013.

BOTTOM LINE. Are your employees tracking and responding to customer inquiries? How do YOU know for sure? One way is to engage in Mystery Shopping. Do so in – house, with a corporate staff individual trained to do so – online, via telephone, and best of all, via on – site interview of home sales and site – leasing staffers. Need guidance? Call the aforementioned MHIndustry HOTLINE and request a FREE copy of the Mystery Shopping firm in use throughout the MHIndustry & LLLCommunity environments since the early 1990s – and updated over the years. OR, hire us @ $500.00 per property (plus travel expenses) to perform a complete three part Mystery Shopping audit and written report, with photos, of each of your under – performing land lease lifestyle communities. Use the same MHIndustry HOTLINE.

V.

Did You Realize? 2013 is 20th Anniversary of…

Camaraderie and national advocacy among land lease lifestyle community owners/operators nationwide! Yep; on 31 August 1993, 19 LLLCommunity owners/operators, from throughout the U.S. convened at an airport hotel in Indianapolis, IN., for a daylong Strategic Planning Meeting. This was just before the first portfolio of LLLCommunities started the second REIT wave (First one was in the mid – 1980s…think UMH Properties, Inc.) in 1994. These owners/operators decided to take control of their collective business future, first by ensuring far better National Advocacy in behalf of the real estate asset class, then pursue projects which would lead to better operations, marketing, positioning, even improved image of the unique, income – producing property type.

Yes; an appropriate 20th anniversary celebration is in order, and being planned, to commemorate this important event in the history of LLLCommunities1 It’ll take place 18 – 20 September, during the 22nd annual Networking Roundtable at the Hilton/Chicago Indian Lakes Resort in Bloomingdale, IL. (suburb of Chicago & near the O’Hare airport). All 18 living owners/operators (Ron Richardson died last year) have been invited. Two have formally retired, but there’re about ten who’re still actively involved in their respective MHBusiness interests. Should be a very special time for all. Will YOU be present? To ensure an ‘invite’, again call the aforementioned MHIndustry HOTLINE or email me via gfa7156@aol.com

***

George Allen, CPM®Emeritus, MHM®Master
Consultant to the Factory – built Housing Industry,
The Land Lease Lifestyle Community Asset Class &
Affordable Housing Purists & Enthusiasts Nationwide
Box # 47024, Indpls, IN. 46247
(317) 346-7156

Blog # 243 Copyright 2013 21 April 2013

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

I.

A Potpourri of this year’s MHCongress in Las Vegas

II.

LEST WE FORGET (ALREADY)

III.

Preview of ‘Things to Come’ in Next Week’s Posting

***

I.

A Potpourri of this year’s MHCongress in Las Vegas

Attendance was up this time around, MHI Chairman Nathan Smith tells me, by more than 100 registrants. Seemed enthusiasm was ‘up’ as well. Now, all WE need is a significant uptick in the annual new home shipment number of new HUD – Code manufactured homes!

Matt Follett makes historic pitch for INSPIRE Communities (‘Enriching American Lives Through Affordable Housing Communities’) as maybe, within two to three years, the next real estate investment trust (REIT) from the land lease lifestyle community realty asset class!

“Gee George, where were you on Tuesday (@ NCC Forum)? Wanting to learn from you, is the reason I signed – up in the first place! But had to listen to execs from the big firms again.” Those were the two most frequent remarks I heard from folk, as I visited the MHCongress exhibits on Wednesday. The occasional third question? “Were there any bona fide owners of LLLCommunities presenting this year?” Hmm.

Michael L. Glass is now the National Director of Marcus & Millichap’s 21 land lease lifestyle community marketing specialists nationwide. (216) 264-2000. Be sure to attend his firm’s annual Investors’ Symposium, from 4 – 6PM, on Wednesday, 18 September 2013, at the Hilton/Chicago Indian Lakes Resort in Bloomingdale, IL. Phone the MHIndustry’s HOTLINE: (877)MFD-HSNG or 633-4764 for information and to register.

NCC Forum attendees hear promise of more attention to land lease lifestyle community owners/operators’ needs in the future, including an increased emphasis on statistical research.

MHIndustry veterans miss showman Gub Mix as Awards Luncheon emcee!

Cavco360 Finance Program debuted as means to ‘Recycle Your LLLCommunity Investment’ For info, contact (312) 346-1874 and talk to Stephen Wheeler at HAS-Capital.

An increasing number of firms use the annual MHCongress and International Networking Roundtable, to bring their boards of directors, regional property managers, even investors, together to experience ‘these events’ and meet privately to pursue their own agenda. ROC USA® and a Canadian – based owner of LLLCommunities were just two such firms this time around.

Sure, there’s much more I could share with you, but much of that will find its’ way into print during the next few weeks as we pen and publish the Allen CONFIDENTIAL! and Allen Letter professional journal ‘business newsletters’ during the next couple weeks. Be especially alert to the newly updated (first time since about 1993) Industry Standard Chart of (operating expense) Accounts, along with some new Operating Expense Ratio (OER) percentages provided by ARA MHC Group out of Denver, CO. Copies of the new one pager will be attached as an enclosure to the first publication, and as a lagniappe in the second one. You don’t want to miss updating your OER statistical reference tool! If not already a newsletter subscriber, phone the above – referenced MHIndustry HOTLINE to do so.

II.

LEST WE FORGET (ALREADY)

The following quotes are from the ebook, The New Robber Barons, by Janet M. Tavakoli. Pretty sobering stuff….

From ‘Blame the Victims and Enrich the Perpetrators’, 1/13/2011. “While there were instances of fraud by borrowers, the key drivers of our housing crisis were fraud perpetrated by mortgage lenders and securities fraud – by some of our most revered financial institutions – that provided money to fuel fraudulent mortgage lending.”

“After the largest bank bailout in world history, we have a national epidemic of foreclosure fraud. In cases where foreclosures are being delayed, banks are walking away from abandoned homes and sticking local taxpayers with the bill to clean up the mess they left behind.”

From ‘GSAMP: Garbage Sold at Mythical Prices’. “In 2007, the state of Ohio kicked the California – based New Century mortgage lending carpetbaggers out of the state and barred New Century from doing business after despicable practices. A complaint of alleged fraud on the part of Goldman Sachs detailed its close relationships with Countrywide, New Century, and Fremont. The complaint showed Goldman knew of ‘an accelerating meltdown for subprime lenders such as New Century and Fremont.’ Despite known serious loan problems, Goldman continued to securitize the loans and sell them in packages of residential mortgage backed securities.’

From ‘Countrywide Broke the Law’. “…allegations of suspect practices from mortgage lenders, including Countrywide, now owned by Bank of America, were revealed. According to a former Countrywide employee: ‘approximately 90% of all reduced documentation loans (a.k.a. ‘liars’ loans) sold out of a Chicago office, had inflated incomes, and one of Countrywide’s (mortgage brokerage arms) routinely doubled the amount of the potential borrower’s income…so borrowers could qualify for loans they could not afford.” Illinois Attorney General Lisa Madigan told First Business Morning News: “Countrywide broke the law, homeowners did not.”

“Despite evidence of widespread interconnected mortgage lending, securitization, and foreclosure wrong – doing and fraud, there are no meaningful felony indictments.”

As most of us in the manufactured housing industry, and as owners/operators of land lease lifestyle communities, well know, chattel loan origination has not returned to anywhere near what it was back in our latest heyday, 1998. And only time will truly tell, if and when it ever does. But in the meantime, it’s helpful, albeit painful, to remind ourselves of what happened, not just to HUD – Code manufactured housing, but to our Big Sister industry, the site – built housing business, about which much of the preceding paragraphs describe. It’s no small wonder we suffer the financial regulatory measures rampant today; and it’s no less a mystery as to why our national economy continues to flounder. Is there a solution in sight? Depends on who you ask, and what aspect of housing finance one explores. But for the time being, we have to make do with what we do and don’t have available to work with in our business environs.

III.

Preview of ‘Things to Come’ in Next Week’s Posting

Interested in reading what a board of directors hears, when briefed about the land lease lifestyle community real estate asset class? Well that’ll be spelled out in detail for you next week in this blog posting. We’ll even take a long look back at the August 1988 edition of Roulac’s Strategic Real Estate newsletter’s final ‘Largest Mobile Home Park Owners in 1987’ listing, the precursor to the ALLEN REPORT annually researched and published since then (#22 @ 2013). You’ll find it interesting to learn how many of the 25 firms on said list, continue to exist to this day, 26 years later!

Do YOU realize there’re no fewer than FIVE ‘MHIndustry & LLLCommunity’ – related meetings vying for our participation, during six weeks this Fall (2013)? That’s right; the 22nd annual Networking Roundtable for land lease lifestyle community owners/operators leads off, 16 – 18 September, in the Chicago suburb of Bloomingdale; followed two weeks later by MHI’s annual meeting in San Diego; then the annual SECO (Southeast Community Owners) Symposium in GA; a leadership conference, hosted by MHI’s National Communities Council, in downtown Chicago in mid – October; and finally, the Urban Land Institute’s meeting (of the Manufactured Housing Communities Council) in early November, also in downtown Chicago. Whew? Can anyone out there afford the time and money, to patronize all five events? I sure can’t. Anyway; more details forthcoming, to help you plan your Fall travels.

And I’ve just gotta tell you. The hinted – at 3”X5” plastic cards describing the

• 5 – RPs of Marketing & Selling New Homes INTO a Land Lease Lifestyle Community!

• 5 – RPs for Marketing & Selling New & Resale Homes WITHIN a Land Lease Lifestyle Community!

• 5 – RPs for Marketing& Leasing Rental Homesites WITHIN a Land Lease Lifestyle Community!

Have been manufactured, delivered, and are ready for distribution to participants at this year’s 22nd annual Networking Roundtable, 18 – 20 September, at the Hilton/Chicago Indian Lakes Resort in Bloomingdale, IL. And not only that, we’re making good progress converting the widely used ‘Ah Ha! & Uh Oh! Worksheet’ (for estimating ‘risky’ &’affordable’ Price Points for new & resale homes in and outside LLLCommunities) into a handy, easy to use slide chart. If ready by September, this too will be distributed as a FREE training aid to every Roundtable participant!

***

George Allen, CPM & MHM
Consultant to the Factory – built Housing Industry,
The Land Lease Lifestyle Community Asset Class &
Affordable Housing Purists & Enthusiasts Nationwide
Box # 47024, Indianapolis, IN. 46247
(317) 346-7156

Blog # 242 Copyright 2013 14 April 2013

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

I.

Neal Haney – IMHO, ‘Gets it Really Right!’

II.

Ned Beach Parses the ‘HUD/no HUD’ Issue

III.

Where to Find BOFUS in Vegas this week

IV.

Next Week: ‘New Era Dawns for LLLCommunity Owners’

***

I.

Neal Haney, IMHO, ‘Gets it Really Right!’

Manufactured Housing Communities of Arizona’s perennial president, Neal T. Haney (land lease lifestyle community fee – management company executive par excellence), writing in the March – April 2013 issue of Today & Tomorrow takes his readers on a reflective ride 12 years back into manufactured housing/land lease lifestyle community history, with a swift return to the changed present, and his hope for our collective future.

“I recently read an article that appeared in this newsletter 12 years ago. There were two main thoughts. One dealt with the changes taking place in our industry. And since that article, changes have indeed taken place. For example, many (home) manufacturers in business 12 years ago are gone. Those who remain have closed many of their facilities and have the lowest production levels in more than 30 years. LLLCommunities that enjoyed occupancy levels over 95% now struggle to keep occupancies at 80%. The government, both federal and state, continue to impose new regulations and additional costs detrimental to the MHIndustry. It’s been a tough 10 years.”

The other thought? “But the good news is things continue to change. LLLCommunities are more conscientious at providing facilities and services specific to their unique client base. By eliminating unneeded or unwanted facilities and services, operating costs are maintained at a lower level. Home manufacturers now recognize the number of vacant rental homesites needing to be filled. And they’re now working with community owners, to provide homes appropriate to smaller sites, and within a price range that allows us to truly refer to them as ‘affordable housing’.”

“At a national meeting five years ago, I heard a speaker sounding the death knell for our industry and asset class. I think instead, we are actually seeing a rebirth of the industry that’ll take us back to days when we were considered ‘a quality lifestyle at affordable prices’.” NH. (Moderately edited. GFA)

Lest you take Neal’s remarks lightly, know he’s been plying this trade for more than 30 years, as a successful entrepreneur businessman; and frankly, he’s one of but a very few of my ‘go to’ MHIndustry/LLLCommunity professionals in Arizona!

***

I.

Ned Beach Parses the ‘HUD/no HUD’ Issue

OK, I’m letting the ‘cat outa the bag a little here’, by introducing you to my long time correspondent, Ned Beach; retired – but – still – knowledgeable & articulate, regarding the HUD – Code manufactured housing industry.

As most blog floggers (readers) of this weekly posting know, I recently introduced the timely and heady topic: ‘What effect would it have on your business interests, model, etc., if HUD was soon and completely removed from federal regulatory oversight of the manufactured housing industry?’ This is not a casual, pipe – dream question! Frankly, it’s being asked of (home) manufacturing executives, suppliers, etc., across the U.S. by a team of interviewers. And here’s ‘the rub’. This question is being asked – and answered – with little to no aforethought, on the part of those being queried and answering. Indeed; at first blush, the ‘question & probable kneejerk answer’ appear a God – send, i.e. ‘Regulatory freedom after 37 years! Yea!’ BUT, is that really the case? Maybe not.

Remember last week’s blog posting on this topic? In it, a sober and reasoned response to said question was offered by Danny Ghorbani of the Manufactured Housing Association for Regulatory Reform or MHARR. He used the simile of a three – legged stool to make his point(s) there’re at least three interrelated reasons why HUD’s disappearance from its’ regulatory role, where manufactured housing is concerned, would be a very bad day for the industry. If you don’t recall why, suggest you reread the earlier blog posting, here at community-investor.com, to learn and understand the reasons.

In the meantime, Ned Beach, a retired manufactured housing executive, who’s long functioned as an informal sounding board for me; and other MHIndustry folk, recently sat back and gave this ‘HUD/no HUD’ issue some reasoned thought, tempered by long experience ‘in the business’. Here’re Ned’s thoughts on the subject:

“The effect(s) of closing the MH/HUD relationship today would be difficult; but would likely turn the fabrication of housing into something akin to what the NAHB has already accomplished relative to pre – fab, modular, and other (factory – built) specialty products. National codes would become the guidelines, to which manufactured housing would be built. For example, years ago, John Slater, an excellent engineer and working member of our industry, developed housing products meeting the ‘real’ building codes, able to be manufactured in plants, and transported to sites to be installed on pillar foundations. As we found out in the modular business, we didn’t need a national code to be able to meet the needs and requirements of towns, cities, counties, and states, in our chosen markets; we simply complied with them.”

“A downside to local code compliance, is not enjoying any, or at least as much, ‘experimental’ methodology, from which new, better and more economical processes, products and methods would or could be developed. This no different from dealing with the inflexible HUD ‘performance’ requirements. For those of us still in touch with the MHIndustry, we know a lumber shortage crisis is upon us. However, the local codes generally do not allow for much economical substitutes.”

“Could the MHIndustry survive and succeed without HUD oversight? Absolutely! But like many others ‘things’ about the leaders of our industry, ‘We don’t like change!’. So, could land lease lifestyle communities develop 30 year leases, with five year rent rate adjustment points, in order to be attractive to long term home financing? Yes. So can MHRetailers adjust and become builder/contractors, accepting responsibility for a new ‘land and home’ project, and derive income from the project at large? (Yes – but beware of repeating errors experienced at the turn of the century when MHRetailers attempted to compete head – to – head with site – builders). So can factories also learn to build to local building codes, homes that can be installed anywhere, and sized and designed for the need, especially where (functionally obsolete) rental homesites in land lease lifestyle communities are concerned. And the last question: Can we be competitive with other types of housing? Yes, if we work at it. And therein lies the show stopper: Do we want to survive and thrive as an industry; or continue to die on the vine, as we have been doing these past five plus years?” Relate that final question to the HUD/no HUD issue of the day!”

“Good post, George, got the juices a – flowing!” (Moderately edited. GFA)

***

III.

Where to Find BOFUS in Vegas this week

To date, more than a dozen of you have inquired as to how we might connect at the MHCongress in Las Vegas this coming week. While I arrive Tuesday afternoon, to attend no fewer than three corporate receptions and Lou Vela’s state dinner, BOFUS will be on the exhibit hall floor most of the day Wednesday – except for two formal ‘State of the MHIndustry & LLLCommunity Asset Class’ presentations I’ll be making, one mid – morning, and one mid – afternoon. And late Wednesday afternoon, two more gala receptions, and Security Mortgage’s ‘by invitation only ‘ special dinner soiree. Flying home early Thursday morning – with lots to write about in the next blog posting!

When we do hook up, probably mid – day Wednesday, before and after the annual Awards Luncheon, REMEMBER to ASK me FOR your TOAST! You’ll be glad you did.

So, what else is going on these days? Well, on 24 & 26 April, I’ll be in Chicago finalizing plans for the 22nd International Networking Roundtable at the Hilton/Chicago Indian Hills Resort, 18 – 20 September. Have you marked this on your planning calendar yet? If you’re a land lease lifestyle community owner/operator, you already know this is the single seminal annual event designed solely for your educational, interpersonal networking, deal – making needs! Themes this year? Two. Celebrating our collective legacy as land lease lifestyle community owners/operators, via special presentation by the staff from the RV/MH Heritage Foundation’s Hall of Fame, Museum & Library, in Elkhart, IN., and, 20 years of national advocacy thru the eyes of one of the 8/31/1993 founders and early chairman of the NCC division, Gary McDaniel. Also, in support of ‘selling & self – financing new & resale homes on – site’, we plan to have Community Home Series or CSH model homes on display again this year. IMPORTANT. To ensure YOU receive an ‘invite’ to this ‘by invitation only’ event for LLLCommunity owners/operators, phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or email: gfa7156@aol.com Why is this so important? We promote this event three ways: direct mail to all 500+/- portfolio owners/operators of LLLCommunities, to subscribers to the Allen Letter professional journal, and via names of previous year roundtable registrants. So, if you’re not on one or more of those three lists, you likely won’t receive an invitation to attend. So ‘call or write and let us know of your interest!’

29 & 30 April. As many as 20 land lease lifestyle community owners/operators will convene, in Davenport, Iowa, with Bill Carr of Rainmaker Associates, to spend time working together on this common interest: ‘Selling and self – financing new and resale manufactured homes on – site in this unique, income – producing property type’ – with an emphasis on mortgage financing and being in compliance with all state and federal regulations thereto pertaining. Hey; I’ll certainly be participating; how ‘bout YOU? For more information, contact Bill directly via (800) 336-0339.

***

IV.

Next Week: ‘New Era Dawns for LLLCommunity Owners’

Read all about it – if & when the timing is right. Next week? Maybe, maybe not. In any event, I appreciate your continued patience and support!

Interestingly however – and this has been pointed out repeatedly of late, by land lease lifestyle community owner/operator peers; the longer we await the inevitable dawning of a new era for our asset class; obvious clique nepotism and council inactivity effectively sunset the demoralizing ‘business as usual’ catharsis we’ve suffered these past few years.

***

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

Blog # 240 Copyright 2013 7 April 2013

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

Trends
Past, Present, & the Future of Manufactured Housing

I.

TRENDS PAST

Since shortly after the dawning of the new millennium (2000), annual new manufactured housing shipments plunged to historic lows of 50,000+/- per year, and have remained there for the past five years. Even the fabrication of modular homes (at times called ‘hudulars’) and Park Model RVs, have not moved the industry off this record – setting nadir. Hundreds of housing factories have closed and more than a thousand independent ‘street’ MHRetailers have disappeared from the manufactured housing business scene.

Furthermore, independent, third party chattel capital lenders appear to have also disappeared from the HUD – Code manufactured housing scene; but reality, it’s the paucity of qualified borrowers for those funds that cripples the industry. Just about the only bright spot, among these post cum present trends, has been the now routine selling and self – financing, and sometime leasing, of new and resale homes on – site within land lease lifestyle communities. But not all LLLCommunities; mainly those among the 500 property portfolios domiciled throughout the U.S. and Canada.

The foregoing is what we’re living with today, along with a myriad of additional, albeit other minor trends, like: smaller, less vibrant state manufactured housing associations; weaker, thinly staffed national advocacy bodies; and a near wholesale retreat from professional property management training and certification. Today; seeing a new HUD – Code manufactured home being transported down the highway enroute to its’ point of installation, is about as rare an occasion as seeing the circus come to town.

II.

TRENDS PRESENT

Favoring the Big over the Small (business entity), on one hand predates Past Trends identified in the previous paragraphs, but at the same time has become a heady Present Trend whose consequences have yet to be fully played out on the national scene. The following paragraph was penned by a blog flogger (reader) in response to a recent posting:

”Herein lies the problem – big fish want to get bigger and eat the small ones. Going separate (ways) can allow for good operators to survive, but I doubt the MHIndustry would be what it could be. I shared your, and my, trading of thoughts with a banker friend. Interestingly, he likened it to the BIG banks loving all the regulation, because it hurt us little folk to keep up. You’d think they’d hate it (regulation) as much as we, the little community bank guys, because they do not compete in the small world anyway, and the regs cost a bunch to survive and keep informed. Have you thought to separate out land lease lifestyle communities? Gotta bet the medium and small operators would follow.” NB

More and more, small to mid – sized land lease lifestyle community owners/operators are having to fend for themselves, no longer counting on any particular national entity to do so for them. This is evidenced by national task forces being recently formed to study key issues, e.g. home finance alternatives within the LLLCommunity asset class; and, how to best ensure – going forward – that LLLCommunity owners/operators nationwide continue to benefit from statistical Research and ongoing Resource servicing. And then there’re the regional symposiums, which have grown in popularity, during the past decade, as MHIndustry businessmen and women seek meaty seminar programs featuring useful substance, rather than just sales pitch pabulum and lesser fare.

Then there’s the Uniform Manufactured Housing Act, passed during mid – 2012, by the Uniform Law Commission. Some are already equating its’ recommendations to ‘Throwing the (affordable housing) baby out with the bathwater (vehicle titling of manufactured homes). To date, none of the proponents of this model regulatory legislation have bothered to consider the potentially dire consequences of replacing vehicular type titling of manufactured homes with some sort of quasi realty ownership document that large banks find attractive enough to encourage them to start lending on this housing type. Likely long term consequence? ‘Easier access to conventional home loans = loss of manufactured housing affordability through higher taxes!’

And finally, how would YOU answer this question: “What would be the effect on your niche in the manufactured housing business if HUD was/is relieved from regulatory oversight of this industry, for the first time in 37years?” Think about it? Interviewers are traveling the county today, asking that question of home manufacturing and LLLCommunity executives. Danny Ghorbani of the Manufactured Housing Association for Regulatory Reform, or MHARR, puts it this way:

The HUD federal program is a stable three – legged stool, comprised of three essential elements: 1) uniform, performance – based federal standards, 2) federal preemption relative to local building codes, and 3) uniform federal enforcement. Together, they ensure maintaining affordable manufactured housing; meeting the housing needs of lower and moderate – income American families; and ultimately, guide the success of the manufactured housing industry. Without any one of these elements, which only a federally – based program can provide, manufactured housing, as an affordable homeownership option for consumers, would soon die the death of a thousand cuts, as thousands of local housing jurisdictions would pile – on, with their own costly mandates and requirements.

Thus, lose this code and lose all uniformity, federal preemption, even building guidelines based on how a home should perform – all at the likely expense of product credibility, affordability, and universal acceptance! Are we, as an industry, ready for this? I don’t think so; but how many have really taken the time to think through the process and its’ logical consequences? Not many.

III.

TRENDS FUTURE

I’m not sure I’m up to taking on this challenge at this point in time. First off; the annual MHCongress is only a few weeks away, and there, some of us might learn of initiatives and tweaks affecting TRENDS FUTURE. Besides; have you read or heard of anyone else taking on the aforementioned PRESENT TRENDS of 1) adopting or not adopting the Uniform Manufactured Housing Act proposed by the Uniform Law Commission; or, for that matter, 2) even let us – out here amidst the grassroots of the HUD Code manufactured housing industry, know there’s a movement afoot to have HUD removed from regulatory oversight, where our industry is concerned? The answers to those two questions? NO & NO! Why? Ask them, not me.

The only thing I’ll pen about TRENDS FUTURE, has to do with industry and realty asset class representation on the national level. The Good News is MHARR & MHI are working together in three key areas, relative to securing additional private and public chattel capital sources. The not so good news, is institute members at large, some state MHAssociation executives, and small to mid – sized land lease lifestyle community owners/operators are frustrated at what’s perceived to be ‘marginal effectiveness’ in the national advocacy arena; the ill – advised wholesale change recommendations to the institute’s bylaws – and unintended consequences thereof (e.g. less dues revenue to states); and, nothing but ‘promises of action’, for two years now, from and to the LLLCommunity side of the house, even less to other post – manufacturing segments of the industry

Sure, there’s more I’m inclined to share with you on this topic. But the problem is; whenever I speak or write of practical solutions on the near horizon, or better ways to address what isn’t being accomplished now, some very territorial individuals immediately take issue with suggestions there’re better ways to achieve certain ends that the MHIndustry and LLLCommunity asset class have been missing or ignoring to date. No, I don’t feel like getting into an argument or discussion about the matter(s) just now; rather, as I’ve learned time and again, during the past 33 years as a successful entrepreneur businessman, I’ll wait and pick the right time and place to announce these new and rejuvenated opportunities to sell more homes and promote our unique lifestyle.

IV.

Bofus in Vegas!

Bofus can hardly wait to get there! Already we’ve been invited to two private dinners and no fewer than five late afternoon and early evening receptions. And, in my case, since my name and topic (‘How to Sell More Homes INTO and WITHIN Land Lease Lifestyle Communities!’) have been yanked from the MHCongress program schedule, I’ve lined up two ‘paid’ speaking engagements, one for a corporate board of directors and one for a firm’s employees in attendance at this event. So, along with visiting exhibits, attending a couple select seminar offerings, and engaging in that Vegas pastime, ‘people watching’, there’ll be plenty to do on the 16th, 17th, & 18th of April.

When you see me walking around the MHCongress, come up and ask me – or Bofus, for your Toast; you’ll be glad you did so.

***

George Allen, CPM®Emeritus, MHM®Master
Consultant to the Factory – built Housing Industry,
The Land Lease Lifestyle Community Asset Class &
Affordable Housing Purists & Enthusiasts Nationwide
Box # 47024, Indianapolis, IN. 46247
(317) 346-7156

Blog # 239 Copyright 2013 31 March 2013

Perspective. “Land lease lifestyle communities, a.k.a. manufactured home communities & earlier, ‘mobile home park’s, are the real estate component of manufactured housing.”

I.

If We Can’t Get the Job Done (i.e. ‘Restore Financing!’);
Someone, It Appears, Is Ready Now, to do it for (to) us!

II.

‘The New Normal! 50,000+/- New HUD – Code Homes Shipped Per Year! Really? Not Everyone Agrees….

III.

More about Bofus in Las Vegas

I.

If We Can’t Get the Job Done (i.e. Restore Financing!’);
Someone, It Appears, Is Ready Now, to do it for (to) us!

‘Those 21 Words are Likely a Bellwether of What’s in Store for the Manufactured Housing Industry & Land Lease Lifestyle Community Asset Class, if We Continue to Sit On Our Hands and Do Nothing Substantial….’

So, did you take my advice and get yourself a copy of CFED’s 2013 report titled: TOWARD A SUSTAINABLE AND RESPONSIBLE EXPANSION OF AFFORDABLE MORTGAGES FOR MANUFACTURED HOMES? I hope so, because the following paragraphs contain my ‘take’ on this 50 page document. And I’d like to hear yours….

First off; there were nearly no manufactured housing industry or land lease lifestyle community asset class ‘players’ (i.e. businessmen and women, lenders, trade association executives) involved in researching, compiling results, and agreeing on points put forth in this 50 page document. How can the Corporation for Enterprise Development, in good conscience, publish a report of this nature without input from the very folk who stand to be affected by its’ findings and recommendations? Only passing mention is made of ROC USA™ and its’ involvement, via the I’M HOME network, in this Ford Foundation – sponsored project.

Here are the questions this report endeavors to answer. Wherever the words ‘real estate – secured’ are inserted, know they were NOT in the report proper, but added by this blogger for clarification:

• To what extend and from what sources can low and moderate – income (LMI) household obtain MH single – family (real estate – secured) loans?

• How well do manufactured housing (real estate – secured) loans perform, and how does their performance compare with that of mortgage loans for site – built home? (Some readers, like me, opine the report preparers’ statistics gathering, compilation and reporting is questionable, i.e. not identifying and including defaulted loans in performance results)

• As there products or underwriting features that are correlated with more successful (real estate – secured) loan performance?

“The Project’s long – term goal is to expand access to and availability of, affordable (real estate – secured) financing to low – and moderate – income (‘LMI’) owners and buyers of manufactured homes…”

While eight ‘main findings’ are listed early in this report, a couple bear mentioning:

• “Manufactured home (real estate – secured) mortgage performance is comparable to general mortgage performance, and certain manufactured housing (real estate- secured) mortgage portfolios outperform comparable general mortgage portfolios.” That would be encouraging and helpful news, once we’re convinced the number and value of defaulted loans, occurring prior to compilation of statistics for this report, have indeed been included, and lead to this rosy conclusion.

• “Data shortcomings are widespread and a serious barrier to understanding the factors that contribute to loan performance….” Interestingly, none (OK, maybe one) of the independent, third party chattel capital lenders, approached to contribute loan performance data to this report did so. “The resulting dataset totals $1.7 billion in (real estate – secured) loan volume at origination.” What wasn’t researched was the more than $5 billion in chattel mortgages estimated, in the 24th ALLEN REPORT, to be held among 500+/- land lease lifestyle community portfolio owners/operators nationwide AND chattel mortgages, held by the aforementioned independent, third party lenders. Why not researched? In the case of LLLCommunity owners/operators, we simply weren’t asked; in the latter instance? Well, one wag has suggested, “Work in it (chattel lending) to make a high interest buck, until it changes to a new titling of the home.” OUCH! Do you suppose this could be true? I think not, but one now has to consider the matter when….

Like in CFED’s earlier report, REAL VALUE, REAL HOME, tucked away within the report, are these telling lines:

“A major recent development is expected to transform this picture (i.e. “:…allow home owners to convert the title on their manufactured home from personal property to real property….”). In July 2012, the Uniform Law Commission unanimously adopted a Uniform Manufactured Housing Act that would give all manufactured housing owners and buyers the option of titling their homes as real property.” Surprised? You shouldn’t be. This initiative has been in the works for the past several years; now is time to take the matter seriously. Of course, none of this is state law yet – except in New Hampshire.

The stated and desired consequence of title conversion? “The market for (real estate – secured) mortgages for manufactured homes can be expected to grow significantly with more homes titled as real property, and because of consistency across states, that is sought by lenders and investors, including secondary markets.”

Unintended consequences of this conversion? Significant increases in the taxes owners of manufactured housing will have to pay on their homes, particularly those sited on leased land, as in land lease lifestyle communities. While this might be a boon for local, county tax assessors, it could signal the end of LLLCommunties as we know them today, particularly those catering to folk in dire need of affordable housing! They’re no longer going to be able to afford to live in their LLLCommunity, and who will the property’s owners/operators attract to live there, if/when new real estate – secured property taxes take supplant the last affordable housing feature available to this citizenry?

And, it’s widely recognized there’s a dire shortage of affordable housing throughout the U.S. today; so the last thing we need now, is a new mechanism that only exacerbates that sorry situation.

*****

II.

‘the New Normal! 50,000+/- New HUD – Code Homes Shipped Per Year! Really? Not Everyone Agrees….

“The manufactured housing industry cannot survive very long if annual shipments (of new HUD – Code homes) remains below 100,000 per year for very long.” So says one of the most veteran (40 years) and respected (member, the RV/MH Hall of Fame) in the MHIndustry today.

Let’s begin with what I saw and didn’t see at last week’s MHShow in Tunica, Mississippi. And let me say right up front, this was the first time I’d attended that particular, as one attendee referred to it, ‘regional dealer show’ (i.e. a tad bit shy on the number of land lease lifestyle community owners/operators present). Here goes….

Ever been to The Tunica Show? I was pleasantly surprised to see no fewer than 70 new HUD – Code homes on display; clearly, more ‘affordable models’ than what was observed at the Louisville MHShow in January. And yes, there were some Community Series Homes or CSH Models present, but guess what, NOT a SINGLE ONE of them was labeled as such. Go figure….Tells me, these home manufacturers still haven’t learned, or maybe it’s simply ‘accepted the fact’, that land lease lifestyle community sales and sitings will be commonplace for the foreseeable future. And until they do, in this region and otherwise, it’ll be darn difficult to get off that 50,000+/- new HUD – Code homes shipped per year.

And then there were the more than 70 exhibitors displaying their wares and promoting their services. Saw quite a few vendors I hadn’t seen before at other MHShows, and that’s a good thing. The seminars? Ask someone other than me. Having such educational sessions, is certainly an improvement over ‘having none’, as was the case not many years ago; but maybe having nonstop daylong seminars two days in a row has swung the pendulum too far the other direction.

I was pleased to learn that CSL Lending (that’s short for ‘common sense lending’) is broadening its’ chattel finance market to include new homes sited within land lease lifestyle communities. There’re outa Marietta, GA. (205) 331-5700. Ask for Aaron Waters. And Randy Pyle, of Blevins, is already putting together a ‘Security Package for Land Lease Lifestyle Communities’ presentation for the 22nd annual Networking Roundtable in Chicago, IL., 18 – 20 September 2013. Then there was Joshua Dobbs. A young Marine, recently home from Afghanistan, who’s been hired by the rejuvenated Robert Sage Careers, to recruit candidates, and find placements for mid – level jobs within HUD – Code manufacturing plants and land lease lifestyle community property portfolios. Reach him via joshualeedobbs@gmail.com And finally, next time you’re in the Tunica area, make it a point to ‘eat where the locals eat’, at The Hollywood Café, ‘Home of the Fried Dill Pickle’. Technically, it’s located in Robinsonville, Mississippi, and is in a building constructed in the mid to late 1800s, and used mainly for a country store.

III.

More about Bofus in Las Vegas

‘So, how’s Bofus to find ways to improve business acumen? Meet privately with individuals who’re good listeners and have right and helpful ideas and solutions, based on individual effort, long experience, and passionate motivation. And barring that, know who to send Bofus to, to get such business knowledge’

For example, what’s it going to take nationally and regionally, to improve land lease lifestyle community Advocacy, statistical Research, and ongoing Resource distribution? Bofus surely would like to know the answer to that question.

For starters, meet privately with individuals who are already personally and corporately committed to serving the Advocacy, Research and Resource needs of LLLCommunity owners/operators nationwide. Only the first part of that will be found among the inner workings of one or another national trade entity, their recent ‘plans for great things’ notwithstanding. If Bofus isn’t already a direct, dues – paying member of one or another of those bodies, do so.

Where Research and Resources are concerned, a.k.a. Signature Series Resource Documents or SSRDs, monthly installments of same are already in place! If Bofus isn’t familiar with what follows, make it a point to meet with and learn from those who do such ‘resource research’, to wit:

• Annual ALLEN REPORT, a.k.a. ‘Who’s Who Among Land Lease Lifestyle Community Portfolio Owners/operators Throughout North America!’ Without this seminal report (24 to date), we’d have no idea who the portfolio ‘players’ are throughout the U.S. and Canada. And while only 20%, on the average, of the 500+/- known portfolio owners/operators are actually named each year, most of the 500 participate in the survey that makes up the ALLEN REPORT.

• Then, in February, there’s the annual Official State of the MHIndustry & LLLCommunity Asset Class, comprised of Census Bureau data and information gleaned from the aforementioned ALLEN REPORT research.

• National Registry of Real Estate Lenders and Brokers, including the only published list of independent, third party chattel lenders, is distributed every March. The 15th annual edition identified 18 of the largest realty – secured lenders. Next to the ALLEN REPORT, this is the most requested of all SSRDs.

• ‘Who Ya Gonna Call During 2013?!’ is the only published list of freelance management consultants serving the MHIndustry & LLLCommunity Asset Class. The 14th edition of this valuable resource contains 40 names and will be distributed with the April issue of the Allen Letter professional journal.

• Next we have the Official Directory of Manufactured Print and Online Resources, plus social networking guidelines. The fourth edition of this is being researched at this time.

• Official Lexicon or Glossary of MHIndustry & LLLCommunity Terminology is updated and published each year as a lagniappe to the aforementioned newsletter and as an appendix in every text penned about the industry and asset class.

• Property Management Training & Certification Programs, once each year, are identified, described, and recommended in a special SSRD.
1.
• The highly popular Industry Briefing Sheet is not an annual update, but rather is updated whenever deemed necessary throughout the year. It contains all the benchmark statistics pertinent to the MHIndustry and LLLCommunity asset class.

• The annual Trade Advocacy Body Directory is the one time each year, MHIndustry and LLLCommunity aficionados see clearly who is representing them, as businessmen and women, and how well
.
• Annual Summary of Networking Roundtable proceedings is penned and published during the month following the seminal event. What makes is particularly unique is that all two dozen presenters are identified by name, topic, and their contact information is included.

• The quietest update, if you will, is the annual update of the Official MHIndustry Paradigm Shifts Timeline. Here it’s easy to see and track the business trends of the past 50 or more years.

• Finally, there’s the annual MHInitiative® (formerly the National State of the Asset Class or NSAC caucus. In the past, these have been one day gatherings of MHIndustry and or LLLCommunity execs coming together to a particular end. This annual MHInitiative® Summary is as important a SSRD as any other.

Point? Bofus has no excuse, when patronizing this year’s MHCongress, not to come away wiser and better informed than when he/she arrived. Don’t hesitate to get my attention when we meet or pass one another at the show. I’ve been hired to make at least two formal presentations, i.e. ‘State of the MHIndustry & LLLCommunity Asset Class’, but that still gives me plenty of time on the show floor to talk with you, Bofus, and whoever else happens along….It’s also possible to obtain all the above SSRDs for FREE, as a paid subscriber to the Allen Letter professional journal via the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

******

George Allen, CPM®Emeritus, MHM®Master
Consultant to the Factory – built Housing Industry,
The Land Lease Lifestyle Community Asset Class &
Affordable Housing Purists & Enthusiasts Nationwide
Box # 47024, Indianapolis, IN. 46247
(317) 346-7156

Blog # 238 Copyright 2013 24 March 2013

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

Is There a Pattern Here? First; Responses to Blog # 237, & then….
I.
Responses to ‘The New Normal = 50,000 new homes per year?’!
“Great blog! I think you are right on target; especially your comments on some of the big asset class entities. The public ones (REITs) are only in the game for the short term results. This mirrors most corporate strategy these last few years. I think you pointed out in prior blogs, that 85% of land lease lifestyle communities are owned by small owners. Were they long term investors, or the quick buck and disappear types, all too prevalent today? The real question, in my opinion, is how do we get back to the long term investor model and get rid of the fast buck guys? P.S. Thanks for letting me vent.” GS (Lightly edited. GFA)

Response from GFA: Here’s an example of why it’s important to be careful with generalities. Truth of the matter is, during the past two decades, there’ve been six land lease lifestyle community – focused real estate investment trusts or REITs. UMH Properties (formerly United Mobile Homes) has been around since the mid – 1980s and is ‘going strong’, acquiring more LLLCommunities during the past two years than at any other time in its’ 30+/- year history. ELS, Inc. (formerly MHC, Inc.), Sam Zell’s REIT, has been around since 1994, or nearly 20 years; same with Sun Communities, Inc. The only short – lived REITs were Chateau Communities, Inc. (from 1994 – 2002), American Landlease. Inc. (Now part of the Green Courte property portfolio) from 1998 – 2008; and, ARC, Inc., just 2004 & 2005. This information from the 24th annual ALLEN REPORT, a.k.a. ‘Who’s Who Among LLLCommunity Owners/operators Throughout North America!’. This seminal report is available FREE, with a paid subscription to the Allen Letter professional journal, via the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764
&

“Ah, those ‘(four) elephants in the room’ are controlling (our industry and destiny), not the consumer and home provider. We have lost what we had in 1969 – 72, George. The market, back then, determined the viability (of our housing product). Not gubment and not associations.” NB
Ah, but as an industry, we squandered that Golden Opportunity, when cheap imitations of mobile homes fell apart while being transported down highways, forcing the U.S. government to step in, when we couldn’t or wouldn’t police ourselves, ‘giving us’ the infamous HUD Code in 1974, implemented in 1976. But to our industry’s credit, during the next 20 years, we made that ‘lemon (of regulatory oversight) into lemonade (with increasingly homelike structures)’, and turned this pre – emptive, performance – based, Federal building code to our favor, until the turn of this century; when everyone in the MHBusiness today knows, ‘the rest of that sorry $ story.’

II.
‘Net Promoter Scores’ No More & ‘Dealers Be Damned!’
Remember the hype from a couple years ago, at the annual MHCongress and elsewhere, when something called NPS or Net Promoter Score was all the rage? I sure do. My first brush with the concept came as I visited a HUD – Code manufactured housing plant, and was given a copy of Fred Reichheld’s book, titled ULTIMAE QUESTION, ‘Driving Good Profits and True Growth’ – Introducing NPS (&) How leading firms transform ordinary customers into promoters. At the time, that book was required reading by all employees, from the top down. And I well remember being impressed, by the book content, as well as the corporate commitment to NPS on the part of this major home producer.
Next brush with NPS came with the knowledge at least one of the largest portfolio owners/operators of land lease lifestyle communities, had also bought into the Net Provider Score concept; hook, line and sinker. And for awhile I guess they did. But do you ever hear about NPS anymore? Only when a freelance management consultant wants to pitch it.
Just what is/was NPS all about? Well, here’s my take on the subject, after having read the book and observed, from afar, at least two large companies’ attempts to implement and sustain the NPS program.
• “Companies need to ask just one question – the Ultimate Question – in a regular systematic, and timely fashion.” P.x. Then, track and publicize the answers to that question, put the information to work right away. Therein lies the pat to true growth.

• What is the Ultimate Question? “How likely is it you would recommend the company t a friend or colleague?”

• Then, “Grouping customers into three clusters: promoters, passives, and detractors, provides a simple, intuitive scheme that accurately predicts (future) customer behavior.” P.30

• An apt goal: “We are in the business of selling an experience that delights our customers.” P.155
And I guess my Ultimate Question to the HUD – Code home manufacturer and land lease lifestyle community portfolio owner/operator aficionados of the Net Promoter Score, is: ‘Are YOU succeeding in providing an experience that is delighting your homebuying and site renting customers?’
So, where is NPS today? From all indications, ‘Dead in the water’. Why do I write that? Because the emails I receive from clients and associates dealing with these two, and other NPS aficionado firms; and, recently, asking key employees where ‘they’ thought the concept is/was on their firm’s corporate radar screen, so to speak.
For example, this direct quote from a recent email between a land lease lifestyle community portfolio owner/operator and an NPS – oriented(?) corporate executive: “I too regret my experience with your plant was unsatisfactory enough to cause me to look elsewhere for my next home (purchases).”Later in the same message, “I again commend you for building a very nice Community Series Home (Where I personally think our industry is headed). Just suggest you start considering LLLCommunity owners like (independent ‘street’) MHRetailers rather than wholesale buyers, recognizing ’we expect the home we buy to be the one we saw on display’; and furthermore, encourage greater quality control at your plants.” SR (Lightly edited. GFA)
Is this a universal let down, throughout the HUD – Code manufactured housing industry, or a one – off, maybe two – off happenstance? Frankly, I have no way of knowing for sure.
I had hoped to explore this matter at the upcoming MHCongress in Las Vegas, during an early morning session that was 1) ‘on’ in early October; 2) ‘off’ in January; 3) ‘on’ again, in February; and 4) ‘off’ again, earlier this month. Why? Well, that’s another story to tell sometime in the future, and it will be told.
In the meantime, however, this non – MHCongress seminar: ‘How to Market & Sell More Homes INTO and WITHIN Land Lease Lifestyle Communities?!’ will be one of the key themes at the 22nd annual Networking Roundtable scheduled 11 – 13 September at the Indian Lakes Hilton Resort in the suburbs of Chicago. If YOU have thoughts, suggestions, ideas on ‘marketing & selling homes INTO and WITHIN LLLCommunities, that’d enrich the learning experience this Fall, make it a point to talk to me about it during the MHShow in Tunica, Mississippi this week – a group of us will be lunching together at the Hollywood Café at 11:30AM on Wednesday, 27 March. OR, talk to me before the MHCongress! Want an ‘invite’ to the Networking Roundtable? Simply phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.
And hey, if you’re still a committed NPS fan, I’d like to know it! How are you using it throughout your firm; what have been the measurable results; how long have you been on the program? And what are your Lessons Learned? Write to me GFA c/o Box # 47024, Indianapolis, IN. 46247 or email: gfa7156@aol.com

III.
Bofus does Vegas!
a unique opportunity awaits Bofus at the MHCongress next month

You going to MHI’s MHCongress in Las Vegas in mid – April? If not yet registered, but would like to participate, phone (703) 558-0678, and tell’em ‘George sent me!’. As a related aside; watch to see whether MHI , in turn, actively promotes the 22nd Networking Roundtable in Chicago, scheduled for early September. In any event, read more about what awaits Bofus in Las Vegas.
Bofus have a lot to gain if ‘ones cards are played right’ in the MH exhibit area. You see, Bofus comes to this annual event with different agendas. For example:
• Business sucks and Bofus’s in search of ways to make it better, the sooner the better, or get out of it altogether!

• What’s it going to take nationally, regionally to improve Advocacy, Research & Resources – wise, where manufactured housing and land lease lifestyle community owners/operators are concerned? Bofus wants to know!
These are but two of Bofus concerns, and there are indeed additional ones….
So, how does Bofus address these legitimate concerns? If you’ve read this closely, you already know the answer; if not, well, read next week’s blog posting for more hints and details….
IV.
TOWARD A SUSTAINABLE AND RESPONSIBLE EXPANSION OF AFFORDABLE MORTGAGES FOR MANUFACTURED HOMES
If you’re a LinkedIn fan, or regular commentator, you likely came across a lively discussion on the 2013, 50 page study just released by CFED (Corporation for Enterprise Development) with the above 12 words as its’ title.
I’ll review this interesting piece of work in next week’s blog posting (#239). A hint. The conclusion suggested by the study’s title is not nearly as rosy as it reads. How so? Another hint. The study, per se, is all about realty – secured home mortgages, very little is said/written about chattel (personal property) capital sources and loan performance. But a ‘way’ is suggested that, if enacted, will change the HUD – Code manufactured housing industry forever, and likely destroy the land lease lifestyle community income – producing property type as we know it today.
Can’t wait? Then google CFED and ask for access to the 2013 study with the above title.
***
George Allen, CPM®Emeritus, MHM®Master
Consultant to the Factory – built Housing Industry,
The Land Lease Lifestyle Community Asset Class &
Affordable Housing Purists & Enthusiasts Nationwide
Box # 47024, Indianapolis, IN. 46247 (317) 346-7156

Blog # 237 Copyright 2013 17 March 2013

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

I.

The NEW NORMAL! 50,000 New HUD Homes Shipped per Year

II.

‘REAL HOMES, REAL VALUE’, How Outsiders Look at Us!

***

I.

The NEW NORMAL! 50,000 New HUD Homes Shipped per Year

(54,881 new HUD – Code Manufactured Homes Shipped During Year 2012)

Yes, you read that right! As an industry, we’ve been bouncing along this ‘new home shipment nadir’ for so long, folk now entering factory – built housing and its’ related realty component, increasingly view ’50,000+/- new HUD – Code homes shipped per year’, as the New Normal for manufactured housing production and sales. *1

Harkening way back to year 1972, when a record number 575,940 new ‘mobile homes’ were shipped; then year 1998 – our latest, too brief renascence – when 372,943 new manufactured homes were delivered, it’s obvious that while 50,000+/- new home shipments per year was NOT ‘the norm’ in the distant past, after five years of limping along, the figure is likely our par going forward. *2

Frankly, this growing contemporary nadir, or New Normal, view of manufactured housing production and shipments has become, and will continue to be, increasingly entrenched in our collective mindset – the longer the following perennial mal conditions remain unaddressed and unchanged:

• While chattel (personal property) capital, for mortgages on manufactured homes sited within land lease lifestyle communities, is available from independent, third party lenders and some local banks, it must be more accessible by prospective homebuyers/site lessees; OR, the quality (i.e. credit worthiness) of would – be homebuyers/site lessees must markedly improve! Do you see either or both these changes occurring anytime soon? Neither do I.

• Counting new home ‘shipments’ rather than new home ‘sales’. As long as HUD – Code home manufacturers continue to operate from this wholly ‘production priority’ (versus ‘marketing sensitivity’) perspective, we’ll continue to see new homes delivered into local housing markets that, based on Area Median Income or AMI, cannot afford them; that don’t want them, e.g. into markets saturated with site – built homes in foreclosure; and, their continuing insensitivity to the genuine housing needs and wants of local prospective homebuyers.

• Decide once and for all, whether HUD – Code manufactured housing is ‘affordable housing’ OR an apt competitor in enough local site – built housing markets to ensure sufficient ‘home sales cum shipments’ – or is it the other way around: ‘home shipments cum sales’? See the difference? I surely hope so. In the meantime, continue to expect to see far more ‘big box = big bucks’ manufactured homes at regional housing trade shows in Louisville and Tunica, rather than Community Series Homes or CSH models, with durability – enhancing features, designed for in – LLLCommunity infill, on functionally obsolete and full size rental homesites. At the very least, understand and agree – industry wide – what it means for housing to be ‘affordable’ in the first place; then, if and when possible, get our federal regulator, HUD, to finally begin promoting manufactured housing as the affordable housing option it is!*3

• Then there’re the ever present ‘elephant in the room’ concerns. *4 Whether a) ‘not talking’ about rental homesite rates being way out of sync with other forms of multifamily rental housing in the same local housing market; b) chattel lenders’ practice of including PITI only, within the commonly accepted 30% Housing Expense Factor – omitting routine household expenses; c) how after 60 years in business, there’s still no ‘secondary market’ for the valuation, listing, and sale of manufactured housing, particularly those sited within LLLCommunities; and of late, d) an emerging, unfortunate repeat of manufactured housing history, circa 1985, where larger firms – first, the mega home manufacturers, and today apparently, a few of the largest property portfolio owners/operators, who’re members of a national advocacy body, publicly and privately bullying smaller firm businessmen and women. *5

With that said, understand there’re two major matters to address here and going forward:

1. How to reverse the growing ‘nadir view’ of HUD – Code manufactured housing; where 50,000+/- new homes shipped per year is now viewed as the New Normal? It won’t be an easy process.

As preview, it’ll take a) leadership capable, industry experienced, highly motivated individuals, willing to listen to and understand their peers, via one or more national strategic brainstorming sessions – open to everyone willing to ‘pay the price to attend’; b) charting a realistic return to greater productivity and profitability via better and creative financing, with a marketing and sales perspective, under – girded by new respect for housing affordability, and,

2. How to effectively address most or all ‘elephant in the room ‘ concerns? Here too, this will not be an easy process.

In fact, with the exception of the final ‘elephant’ of the four – being a relatively recent arrival on the national manufactured housing scene, the other three matters are perennial bugaboos to everyone in the factory – built housing business. Three examples: 1) Are specific land lease lifestyle community owners/operators, charging rental homesite rents out of sync with other forms of multifamily rental housing, in their local housing markets, prepared to roll back their rates? I seriously doubt it. 2) Are independent, third party and on – site, self – finance chattel lenders prepared to make homeowner loans more affordable (i.e. ‘less risky’), by adding routine housing expenses to the PITI $ already within the 30% Housing Expense Factor? I think not. And, 3) after 60+/- years are we, as a housing alternative industry, prepared to create, grow and support a secondary market for the valuation, marketing, and sale of used manufactured homes – so that we can sell more new homes? Nope. And as far as that ‘fourth elephant’ is concerned, let’s hope saner minds prevail in the near future, so we don’t wind up with an even more diverse and divisive national representation relative to political and regulatory Advocacy, statistical Research, and comprehensive Resource servicing – especially where land lease lifestyle community owners/operators are concerned!

But given the circumstances and challenges just described, is there willingness and commitment to ‘change and improve’, to and for the greater good of all involved in manufactured housing and the land lease lifestyle community realty asset class? Again, I think not.

Not mentioning any names here, but today there are no fewer than five national, not for profit entities vying for the dues money and loyalty of individuals and firms associated with HUD – Code manufactured housing and or its’ real estate component, the land lease lifestyle community asset class. Print off this blog posting and send it to the elected and salaried leaders of the trade group or groups with whom you affiliate, and ASK: 1) Do they agree or disagree with the concerns set forth in the previous paragraphs, then ask, ‘WHY?’ Then, 2) What are, or will they be doing about these and related matters, from their perspective, during the remaining months of year 2013? Anything you’re told, short of a specific and timed Action Plan, is their clear vote to continue this status quo; being,

’50,000 new HUD – Code homes per year as the New Normal for the entire manufactured housing industry’!

Is that what YOU want to hear, and where you want to lend your support? I hope not!

In either event, I’d like to know your thoughts on some or all these identified concerns playing important parts in keeping HUD – Code manufactured housing at its’ five year new home shipment nadir! Either our elected and salaried leaders should be taking steps to get us out of this malaise, or we need to reorganize and do it ourselves, with the help of new business associates!

Write to me: GFA c/o Box # 47024, Indianapolis, IN. 46247 or phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

II.

‘REAL HOMES, REAL VAUE’. How Outsiders Look at Us!

(How the Corporation for Enterprise Development, or CFED, views the value appraisal of manufactured housing sited on parcels of real estate owned fee simple; and, why land lease lifestyle community – sited homes should be appraised similarly….)

If you’re on LinkedIn, and have been following the lively discussion leading up to the CFED – hosted Webinar on 28 March, you know there’s a ‘recent report’ cited as seminal to the upcoming presentation. It’s titled, ‘REAL HOMES, REAL VALUE’. I’ve read it cover to cover, but there’s no way I can do the 50 page report justice in a few paragraphs. But I will point out some of the highlights that caught my attention.

• Among 31 individuals acknowledged as resources for this report, eight are affiliated with manufactured housing; but NONE are owners/operators of land lease lifestyle communities: Joan Brown, Steve Hullibarger, Don Miner, Dan Rinzema, Betty Whittaker, Paul Bradley, Emanuel levy, and George Porter.

• Early on, author Robin LeBaron acknowledges report’s focus being “…the practices of appraising manufactured homes as real estate….” P.5. But by default, he hints at interest in valuation issues pertaining to manufactured homes sited in land lease lifestyle communities. “In 2008, approximately two – thirds of manufactured homes placed in the US were titled as personal property, and one – third as real property.” P.13. Leading to a recommendation, later in the report: “Encourage states to adopt the Uniform Manufactured Housing Act as a means of standardizing the process of recording the conversion of title from personal to real property (Within land lease lifestyle communities and elsewhere. GFA), and vice versa.” P.39. *6

• In the Executive Summary, the author calls for ‘terminological clarity’ relative to differentiation among factory – built housing types. That work has already been done. All he had to do was cite Don Carlson’s decades long demarcations, based on national housing market share, per production (site) builders @ 45% (Who routinely use pre – hung window and door components, as well as roof trusses and floor/ceiling joists); panelizers @ 45%; modular housing @ 5%; and HUD – Code manufactured housing @ 5%. Courtesy, ‘Automated Builder’ magazine.

• “Only one state, New Hampshire, automatically titles all manufactured homes as real property.”

• “Six differences between manufactured and site – built homes…relative mobility or immobility, design and structural quality, external appearance, finishes, perception and tenure.” P.22 Actually, the final ‘difference’ would have been better cited as ‘tenancy’ (‘holding property by lease or rent’) rather than tenure (‘the holding of something, as property or office….’), since the author points out, on page 27, “…one – third of manufactured homes are located on land that is not owned by the homeowner (“fee simple” ownership of the land and home), but leased from a third – party, typically in a manufactured home community.”

• “A perimeter foundation, for example, must be perfectly sized to accommodate a manufactured home without generating future problems.” P.24. No question, but what dimension and integrity of the perimeter wall are important; but it is not weight bearing, as the mass and weight of a manufactured home is borne by the steel carriage or frame under the home, onto piers located under said home and not the perimeter wall!

• Another recommendation in the report, calls for “…standardization of the definitions and terminology related to manufactured housing….” An example of outsiders being unaware of resources already widely available to them. The Official Glossary or Lexicon of the manufactured housing industry and land lease lifestyle community asset class has been around now for more than three years, with latest edition published as Appendix III in the 2012 ‘Book of Formulae, Rules of Thumb & Helpful Measures’. See end note # 3.

Interested in obtaining a copy of this report to read for yourself, and maybe prepare to participate in the free Webinar, on this subject, at 2:30PM on 28 March 2013? Do what I did. Google CFED and make a direct inquiry for ‘REAL HOMES, REAL VALUE’; and while you’re at it, ask for Webinar ‘sign up’ instructions.

***
End Notes.

1. nadir: ‘the lowest point’ Webster

2. Year 2011 = 51,055 homes; 2010 = 50,046 homes; & 2009 = 49,789 homes

3. Read chapter # 5 in Book of Formulae, Rules of Thumb, & Helpful Measures, available for $19.95 from PMN Publishing. MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764

4. ‘elephant in the room’ = English metaphorical idiom for an obvious truth that is either being ignored or going unaddressed.’ Wikipedia

5. PITI = loan principal & interest; pro rata personal property or real estate taxes & homeowners’ insurance premium

6. The Uniform Manufactured Housing Act adopted in July 2013 by the Uniform Law Commission

***

George Allen, CPM®Emeritus, MHM®Master
Consultant to the Factory – built Housing Industry,
The Land Lease Lifestyle Community Asset Class &
Affordable Housing Purists & Enthusiasts Nationwide
Box # 47024, Indianapolis, IN. 46247
(317) 346-7156

Blog # 236 Copyright 2013 10 March 2013

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

I.

22nd annual Networking Roundtable to Emphasize Close Cooperation Between Land Lease Lifestyle Community Owners/operators & HUD – Code Home Manufacturers!

II.

HUD Acknowledges Affordable Housing Shortage in the U.S., but Fails to ‘Look Within’ and See Manufactured Housing as Answer!

III.

Readying for Competition & Tweaking Revenue Sources

IV.

Planning for Disaster

***

I.

22nd annual Networking Roundtable to Emphasize Close Cooperation Between Land Lease Lifestyle Community Owners/operators & HUD – Code Home Manufacturers!

(Originally scheduled to debut @ 7:30 – 8:45AM on 18 April, at MHI’s congress in Las Vegas, but now canceled, this much – needed, new home shipment catalyst, will now be center stage during the 22nd annual Networking Roundtable in September 2013!)

On 4 March 2013, a letter went out to all Business Development Managers, or BDMs, working for HUD – Code home manufacturers throughout the U.S. The correspondence described a new, three – pronged MHInitiative® designed to pick up where the last National State of the Asset Class (‘NSAC’) caucus, on 27 February 2009, left off. MHIndustry veterans will recall how the day long meeting at the RV/MH Heritage Foundation’s Hall of Fame, Museum & Library facility, spawned the popular Community Series Home, or CSH Model, now relatively commonplace among HUD – Code home manufacturers and land lease lifestyle communities.

Since then, the NSAC caucus movement has been relabeled as MHInitiative®; whereby many HUD – Code manufacturers now routinely design, build and ship CSH Model homes; and virtually all LLLCommunities, with more than 100 rental homesites, now sell, self – finance, and or lease homes on – site, to fill their share of an estimated 250,000 vacant sites located throughout the U.S. But there’s still room for improvement, in both the manufacturer/LLLCommunity relationship, and the methodology of marketing and selling new, even resale manufactured homes. Hence this expanded, three – pronged MHInitiative®, targeting:

• All HUD – Code home manufacturers desiring to sell more new homes into LLLCommunities!

• All land lease lifestyle community owners/operators buying/selling/renting, and oft times self – financing new homes on – site!

• All land lease lifestyle community owners/operators buying/selling/renting resale homes on – site, and or leasing rental homesites!

Not one of these three parts of the expanded MHInitiative® is self – exclusive! They interrelate to the extent that HUD – Code home manufacturers AND land lease lifestyle community owners/operators decide to overtly work together, cooperating to market, sell, lease, and when need be, self – finance new, even resale homes on – site, within these unique, income – producing properties! And in most cases, throughout the U.S., this novel Business Plan is effected, unfortunately, sans participation by independent ‘street’ MHRetailers, and with no secondary market for selling – off ‘used’ manufactured homes.

Achieving this ‘new level of intra – segment cooperation, or team building’, is what had been hoped for during the congress next month. But that opportunity has been ‘kicked down the road’ to September – and that’s probably a ‘good thing’ for these reasons: 1) There are still several training aids to prepare; and now with the added time, 2) recruit additional presenters to focus their expertise on the tripartite task at hand. The training aids? At least four exciting ones to date:

• Virtually everyone in the MHIndustry & LLLCommunity asset class is already aware of, if not routinely using, the strangely – named, but highly useful ‘Ah Ha! & Uh Oh! Worksheet’. *1 But what most folk don’t realize is this four perspective Housing Price Point Estimation Tool is functional as a Spread Sheet. And that application will be introduced and made accessible to all, at the 22nd annual Networking Roundtable this Fall.

• The first of two 3”X5” plastic cards, printed both sides, will feature using the ‘5 – RPs of Marketing’ to market and sell new, HUD – Code homes INTO land lease lifestyle communities. To the best of this writer’s knowledge, never before have HUD – Code home manufacturers cooperated, via their Business Development Managers, to produce a Training Aid of this nature, to this practical end! Once and for all, ‘Here’s How to do it!’ What could be more exciting than cooperating together on such a worthy, and certainly timely, project?!

• The second of two 3”X5” plastic cards, printed both sides, will feature two distinctly different, but related uses of the ‘5 – RPs of Marketing’: to 1) market and sell new homes WITHIN land lease lifestyle communities; and 2) market and sell resale, and or rental homes, WITHIN this property type, as well as lease vacant rental homesites! And like the ‘manufacturers’ card described in the previous paragraph, these two will contain the best thinking, based on successful on – site experience, of owners/operators already engaged in these procedures!

And capable, experienced, motivated presenters willing to focus and share their expertise in these three areas? Well, if you believe you’re One of Them, please get in touch with me via this website, mail: GFA c/o Box # 47024, Indianapolis, IN. 46247. or otherwise.*1 For that matter, if you own/operate a LLLCommunity, and or supply products and services (e.g. mortgage origination) to this property type, and would like to be invited to this year’s ‘by invitation only’ 22nd annual Networking Roundtable, NOW is not too early to say so!

And know I’ll be present at the aforementioned congress, in April, if you’d like to discuss this new, enhanced shipment volume MHInitiative®, between HUD – Code home manufacturers AND land lease lifestyle community owners/operators! It’s likely most Networking Roundtable ‘presenter’ positions will be filled by then, but Your Ideas are indeed Welcome!

II.

HUD Acknowledges Affordable Housing Shortage in the U.S., but Fails to ‘Look Within’ & See Manufactured Housing as Answer!

Remember blog posting # 232, of a few weeks ago, featuring this ‘in your face challenge’: Hey HUD! Help Out! ? Well, according to a recently released document titled: ‘Worst Case Housing Needs 2011: A Summary Report to Congress’, HUD’s 2011 American Housing Survey conducted by the U.S. Census Bureau, between May & September 2011, “…the number of ‘Worst Case Housing Needs’ continued to grow from the previous record high, in 2009 (7.1 million households) by a striking 43.5 percent since 2007.” This means “8.5 million households paid more than half their income for rent or lived in substandard housing.”

What will it take to get HUD to realize and promote manufactured housing as the most reasonable answer to our nation’s affordable housing crisis – as just described in the previous paragraph? At least the Manufactured Housing Association for Regulatory Reform, or MHARR, is trying to do so! The following is quoted from their Press Release dated 26 February 2013:

“…MHARR has pointed out, in congressional oversight hearing and other
interactions with government decision – makers, notwithstanding such growing
‘critical needs’ and mandate of the Manufactured Housing Improvement Act of
2000 (a.k.a. MHIA@2000), the HUD program (should) ‘facilitate the acceptance
of the quality, durability, safety and affordability of manufactured housing within
the Department’.”

If you’re not already on MHARR’s mailing list to receive strategic information such as this, phone (202) 783-4087.

III.

Readying for Competition & Tweaking Revenue Sources

Let’s leave it this way: If you’re a direct, dues – paying member of the Manufactured Housing Institute, and were not in attendance at the institute’s recent (February 25 & 26) annual Legislative Conference and Winter Meeting, it’s likely you haven’t seen and or read a copy of the proposed changes to MHI’s present bylaws. No commentary here, yet; just a friendly suggestion you phone Richard Jennison via (703) 558-0678, and, as a direct, dues – paying member of the institute, request a copy of the marked – up set of bylaws; to review, and about which, to form your own opinion(s) pro and con, before their annual meeting, October 2013.

IV.

Planning for Disaster!

In a recent blog posting, it was described how some land lease lifestyle community owners/operators are searching for guidelines and more, to help them better prepare, ahead of time, for disasters that might strike their properties! Besides the resources suggested in that blog posting, Jay Zandman of the Manning & Nozick Insurance Agency informed this web site his firm has such resources ‘available for the asking’. So, phone Jay via (770) 393-8311 X 117, and tell him ‘Hey Jay, George Sent me!’

***
End Notes.

1. ‘Ah Ha! & Uh Oh! Worksheet’ available FREE by phoning the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.
***

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

Blog # 235 Copyright 2013 3 March 2013

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

I.

A Land Lease Lifestyle Community Contretemps?

II.

Removable Chassis Prompts Excitement & Questions

III.

‘Circling the Drain’ or Readying for Resurgence?

***

I.

A Land Lease Lifestyle Community Contretemps?

‘Yet Another Day (2/25/2013) likely to go down in MHIndustry History!’

On the very same day, 25 February 2013, two separate meetings, among land lease lifestyle community owners/operators, occurred in the neighboring cities of Arlington and Alexandria, Virginia.

In the first instance, the National Communities Council (‘NCC’) division’s executive committee, along with invited guests, met in a closed door planning session, in lieu of the council’s usual biannual meeting, to – in the words of one participant sharing afterwards – ‘Rethink the whole NCC thing and what we should be doing.’ That’s OK for the time being. However, proceedings from this meeting were not even mentioned at the full MHI board meeting the following day, so NCC members must wait and see, or listen for, further enlightenment, if and when it comes….

In the second instance, a small group of land lease lifestyle community owners/operators convened, elsewhere, to review the ‘State of the MHIndustry & LLLCommunity Asset Class today’; ‘How to Maximize ROI via AITR at their properties’ (See end note *1); and, as it turned out, parse the major asset class issue of the day: Need to identify contemporary and new sources of chattel finance pursuant to the self – financing of new and resale homes on – site!

What was accomplished in this latter instance? Following a brief discussion of present day programs (See end note *2), the morning turned creative, as B2P and P2P ‘crowd funding’; creative home finance and ownership partnerships between investors and REITs and other property portfolio owners/operators; and, the need to create a new nationwide ‘manufactured housing’ bank, were discussed at length. End result? The formation of a Task Force, to focus on popularizing the aforementioned sources, and identifying new $ for funding the on – site sale of new and resale manufactured homes within land lease lifestyle communities. If you’d like to participate in this process, contact Spencer Roane, MHM® via spencer@roane.com Serious inquiries only, please.

II.

Removable Chassis Prompts Excitement & Questions

Here’s what one blog flogger (reader) had to say after reading about the possible re – emergence of the removable chassis as an added option to the line of home designs available from HUD – Code home manufacturers:

“I liked your Sunday blog. I liked how you drew on history (i.e. the failed 1990 effort to approve the removable chassis measure to boost HUD – Code housing production) to present day issues (i.e. Again, ‘boost HUD – Code housing production’) for others to move to meaningful solutions!” SL

The latter part of that quote has to do with Advocacy efforts, on the part of the Manufactured Housing Association for Regulatory Reform (‘MHARR’) and the Manufactured Housing Institute (‘MHI’), to advance the removable chassis measure forward successfully, this time around!

So, what’s happening? The removable chassis possibility continues to move forward. As there are worthwhile advances to report, you’ll read about them here; so, as they say in radio, ‘Stay tuned!’

III.

‘Circling the Drain’ or Readying for Resurgence?

Editorial Posture. Everyone likes it when this blog presents – as it has during the past two weeks – clear, succinct recitations of industry issues and trends; as well as HOW TO information useful to land lease lifestyle community owners/operators. On the other hand, when circumstances appear ripe for critique, constructive and otherwise, your responses – while just as frequent, wax supportive and nay saying in near equal measure. Well, circumstances this past week, prompt the following op/ed reporting…

Before I left Indianapolis, to travel East on a week long business trip, lunching and dining with nearly a dozen business associates and clients along the way, one MHIndustry veteran, and former MHI member, opined relative to MHI’s annual Legislative Conference & Winter Meeting, it’d be akin to our industry continuing to ‘Circle the Drain!’

Ouch! But was he right or wrong? While I hope(d) ‘the latter’, it’s difficult – for the following reasons – not to fear the former. (That he’s right).

First the numbers. According to the distributed Registration List, there were 94 individuals in attendance (That’s fewer than number present at MHI’s annual meeting in San Antonio, TX., last Fall), but 13+/- of these were former legislators, governors, and lobbyists. So, of the 81+/- remaining, the best represented group present, at 16+/- , were state MHAssociation executives; then (somewhat surprisingly) 15+/- mostly chattel finance – related attendees (But tellingly, not a single LLLCommunity – focused real estate mortgage originator!); then 14+/- LLLCommunity owners/operators from 13 different firms; and (also surprisingly), 13+/- HUD – Code home manufacturers representing about eight firms. Altogether, those four segments accounted for 58 of the aforementioned 81 industry registrants. And when you subtract the 16+/- MHAssociation executives, from among the 58 subtotal, one is left with 42+/- actual business entities (i.e. Folk with bona fide ‘skin in the game’ of manufactured housing), or half the number present in toto. Not an impressive turnout for an industry struggling to survive.

Recalling the 20+ NCC members present, during the annual meeting ‘ambush’ last Fall; had all of them been present this time around (They weren’t, as their biannual scheduled membership meeting was pre empted by the aforementioned ‘closed planning session’), MHI would/could have had 100+ present for this meeting, something that hasn’t happened in quite some time.

Then the shocker. At Noon on Monday, 25 February 2013, MHI Chairman Don Glisson, Jr., of Triad Financial Services, Inc., resigned his elected position, allegedly for personal reasons. This is an unexpected, unneeded, and unwanted loss for the manufactured housing industry as a whole! Frankly, I suspect there’s more to the story than we’re being told, but I won’t go into that matter here at this time. In any event, Nathan Smith, of SSK Communities, succeeds Don Glisson as chairman of MHI.

Yes, there’s more that could be said, but you get the idea. Bottom line? It’s downright difficult to spark resurgence in an industry routinely attracting ‘less than 100 members and guests’ to biannual membership meetings; loses a good leader midstream; refuses to look beyond a limited Advocacy role and serve all its’ members’ (Not just home manufacturers) need for statistical Research and ongoing Resource services; and finally, not repeat the ‘lesson of 1985’, by catering to the few at the expense of the many (Lest you think I exaggerate by including this final point, take a close look at the proposed changes to MHI’s bylaws, before you decide….).

***

End Notes.

1. ROI: Return On &/or Of Ones’ Investment; &, AITR: ‘Alternative Income to Rent’ theory proposed by multifamily rental property consultant Allen Cymrot.

2. All present day national, super regional, and regional independent sources of chattel financing for manufactured housing, will be featured in the soon – to – be – released 15th annual National Registry of Real Estate & Chattel Lenders. To obtain your FREE copy of this ‘only such $ resource available today’, phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 and subscribe to the Allen Letter professional journal. The Registry will be distributed as a lagniappe in the March issue of the monthly newsletter.

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

Blog # 234 Copyright 2013 24 February 2013

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

What Land Lease Lifestyle Community Owners Really Want!

The most insensitive thing land lease lifestyle community asset class’ elected leaders can do, is decide ‘on their own’ what their peers need and want – without soliciting their input, regarding contemporary issues and trends; and most important, what’s required to help them run their unique income – producing properties well!

What follows here, are responses from two separate, recent surveys of more than 600 owners/operators of land lease lifestyle communities and property portfolios. The sources? 24th annual ALLEN REPORT research, and POWER Networking Luncheon at the Louisville MHShow during January 2013.

I.

A detailed summary of the 14 MHIndustry & LLLCommunity issues identified by property owners/operators, during the research phase (Fall of 2012) of preparing the 24th annual ALLEN REPORT®, will be published as a signature Series Resource Document®, in the March 2013 issue of the Allen Letter professional journal. In the meantime, here’re the four major categories of issues, covering said 14 different topics:

• For a least the fifth year in a row, land lease lifestyle community owners and operators identified the ‘lack of new and resale home finance programs’ (Specifically, the inability of would be homebuyers to access chattel capital, due to low credit scores, bruised credit, etc.), as well as continued lack of access to government – insured finance programs, on – site, as perennial bugaboos.

• Hand in glove with the first ‘industry issue’, is the continually growing number of home finance regulatory measures and agencies (e.g. S.A.F.E. Act, Dodd – Frank legislation, CFPB, and more) requiring compliance by those selling/financing homes. And how many LLLCommunity owners/operators now embrace creative alternative means of financing and moving new move – ins into their property(ies)

• Not surprisingly, there’s the ongoing challenge to grow and maintain physical and economic occupancy within land lease lifestyle communities, as the third most prevalent issue among the owners/operators involved in this business model.

• And finally, a three way tie among 1) inability to find good quality, near new homes, to move on – site and sell or rent; 2) rising cost of new manufactured homes, including cost of site additions; and 3) government interference in business via rent controls, and other landlord-tenant measures.

Did you notice, while reading the above list, that while all issues’ are germane to the land lease lifestyle community realty asset class, they’re especially critical to the small to mid – sized owners/operators (i.e. one property owners and portfolio ‘players’ with maybe a half dozen or so smaller to mid – sized LLLCommunities). These being the folk who lack ‘economy of scale’ resources, mainly dollars, to deal with said issues internally, unlike the largest of the portfolio owners/operators, who’re routinely doing just that.

In any event, and with the above six MHIndustry & LLLCommunity ‘issues’ in mind, here’re practical recommendations as to how national leaders at 1) MHI’s National Communities Council (‘NCC’) division, and the 2) Manufactured Home Community Owners of America (‘MHCO’), can Best Serve land lease lifestyle community owner/operators nationwide:

• Once and for all, identify ALL existing, viable home finance programs in effect throughout the U.S. today, from identifying independent third party chattel capital firms (e.g. Commonly referred to as the ‘Big Four + 1’, maybe soon to be the ‘Big Five + 1’ *1); then, the various forms of ‘self – finance’ (e.g. formation of ‘captive finance’ entities), including the lease – option, even the popular contemporary practice of renting manufactured homes on – site; and more! There’s already one such chart in circulation, titled ‘Seller Finance Solutions’ – distributed as a lagniappe, in the January 2013 issue of the Allen Letter professional journal, along with the 24th annual ALLEN REPORT®. Did you get a copy of both documents? If not, the chart is available ‘for the asking’, by phoning the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. One thing that hasn’t happened yet, is the formation of a Task Force, comprised of LLLCommunity owners/operators to explore the exciting possibility (reality?) of using private investors via P2P (Peer to Peer) and B2P (Business to Peer), a.k.a. ‘crowd funding’, to finance LLLCommunity owners/operators’ acquisition of new manufactured homes for placement on – site in their properties. For LLLCommunity owners/operators not yet familiar with, or using this option, know Spencer Roane, MHM®, has been using this approach successfully, for more than a decade, and brought it to our asset class two years ago. Reach him via spencer@roane.com

• Home finance regulatory measures and agencies. Here, an easy to read, periodically updated compendium of appropriate information, is sorely needed. PMN Publishing prepared and distributed the Manufactured Housing $$$ Primer in 2010, and copies are still available for $19.95 apiece, via the MHIndustry HOTLINE. *1 And while an excellent ‘introduction to the subject’ of MHIndustry chattel finance, it does NOT cover the ubiquitous regulatory climate since 2010. That key and timely topic offers a unique Research & Resource opportunity for MHI’s NCC division; something that should and could be researched, then distributed – for a price, to all small to mid – sized owners of LLLCommunities, those not big enough to home – grown our own $ and compliance programs! Anyone out there listening? Let’s hope so!

• ‘How to improve and maintain physical and economic occupancy in a LLLCommunity during these trying economic times?!’ Now there’s a lively combination ripe for Joe Adams’ online marketing advice, George Allen’s Mystery Shopping Lessons Learned ‘on the phone’ and ‘during on – site personal interviews’, along with Michael Powers’ ‘How to Collect 100% of Your Site Rent 100% of the Time!’ Gee; do you think we’ll see that timely and heady ‘combo’ at the MHCongress this Spring? I doubt it, but we should! Hmm. Maybe at the 22nd annual International Networking Roundtable this Fall, in…

• And how ‘bout that potpourri third combination of slightly lesser issues ‘on the minds of LLLCommunity owners/operators’? Finding good quality, near new homes ‘for sale’ in one’s local housing market? Like finding pins in a haystack these days, but search the local ‘penny saver’ advertising tabloids! Rising cost of new manufactured homes? Maybe ‘break the comfortable mold’ and get familiar with other home manufacturers, especially their Community Series Homes or CSH models! And government interference in business matters, (e.g. rent control and failure to maintain lawsuits? That can be a toughie. Easier to confront before government gets involved, with local LLLCommunity owners joining together and visiting property owners charging exorbitant homesite rents.

Then there’s the plethora of topics requested/recommended by the 70 land lease lifestyle community owners/operators who participated in the historic POWER Networking Luncheon during the Louisville MHShow during January 3023. Anyone responsible for putting together educational programs for LLLCommunity owners/operators should be paying close attention right now:

• How to Effectively Upgrade Older LLLCommunities & Homes?’ Talk to Don Westphal, and order MHI’s book on the subject – if it’s still in print.

• What are ALL the New & Resale Home Finance Alternative Available Today? Hmm. This reads similar to the ‘need’ described earlier in this blog posting, challenging MHI’s NCC division ‘closed planning meeting’ of executive offers to Research and Resource such a document or chart to all LLLCommunity owners.

• Operations – related topics, like curb appeal, rules enforcement, rent collection, resident relations, etc.. All these, and more, are covered in Landlease Community Management, the frequently updated 1988 property management text basis of the Manufactured Housing Manager® or MHM® training and certification program. Both available from PMN Publishing via the MHIndustry HOTLINE….*1

• How to Buy a New Manufactured Home to resell On – site in my Property? It’s difficult to believe there are NO contemporary guidelines or books on this topic. I’ve challenged several HUD – Code home manufacturers to do so, but so far, ‘no takers’. Wonder why?

• How to Better Market my LLLCommunity Online & via Social Media? Know who needs to write this? Someone who ‘lives and works’ as an Occupancy Specialist for one or another of the large property portfolio owners/operators!

• On – site Home Sales 101 Class for LLLCommunity Managers! Same comment here as in the previous bullet point. Is there an Occupancy Specialist listening? If so, let me know of your interest and we’ll help you pen, print, and distribute such a tome!

• Preparing for Disaster! Is There a Model Guide Available? (Yes) Actually there are several, MHI published one ‘years ago’ (Still available?) Ask them.). And the Institute of Real Estate Management® also keeps one available on their publications list. Phone 9312) 329-6000 and request a copy of the publications list.

• How to Work with a Local MHRetailer to Put Homes into my Property? This used to be referred to, tongue in cheek, as ‘The Care & Feeding of MHRetailers!’ Still included in the aforementioned Landlease Community Management text; just not taught all that much during the past decade or so. Maybe start again?

• How to Value Manufactured Homes on – site in my Property? Here we’re caught betwixt and between. NADA methodology continues to be easiest to use, and is most prevalent, thanks to federal agency preference. However, manufactured housing, per se, will never truly be considered ‘conventional housing’ until valuation is routinely via market comparables, not book value.

• How to Calculate Affordable Price Points on New 7 Resale Manufactured Homes? Finally, after 60+ years, this ‘No longer a Mystery, but now a Methodology’, is in place and used throughout the U.S. If unfamiliar with it, phone the MHIndustry HOTLINE and request a FREE copy of the ‘Ah Ha! * Uh Oh! Worksheet’. *1

Don’t know ‘bout you, but that’s a downright interesting and challenging list of educational topics coming from land lease lifestyle community owners ‘with skin in the game’, and desirous of better positioning themselves to maximize the profitability of their unique, income – producing properties. So, is anyone else out there listening? I sure am. As I begin planning now, for the 22nd annual International Networking Roundtable, I’ll attempt to incorporate as many of the aforementioned topics into that, by coincidence, 22 topic programs.

Are there additional topics you’d like to see covered in September, at the next Networking Roundtable event? If so, let me know by mail: GFA c/o Box # 47024, Indianapolis, IN. 46247., or via email: gfa7156@aolc.om

Can’t wait eight months for helpful information like this? Then consider attending the 2nd annual SECO (Southeast Community Owners) Super Symposium in Atlanta, GA. later this Spring, or early Summer. For information, contact Spencer@roane.com I certainly plan to be present.

For that matter, it’s also a good idea to let Jenny Hodge, executive VP of MHI’s NCC division, know if these and other topics should be covered at one or another of her group’s functions during the months ahead: (703) 558-0666.

End Note.

1. For an up to date, inside look, at all 20 national, super regional, and regional independent chattel (personal property) lenders and their contact information, read the soon to be released 15th annual National Registry of Real Estate & Chattel Lenders/Brokers. It’ll be a lagniappe in the March 2013 issue of the Allen Letter professional journal. This latest update contains more ‘lenders’ of both stripes, than any of the previous 14 editions. FREE to newsletter subscribers, simply phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 to do so. And guess what? A copy of the 24th annual ALLEN REPORT® will be mailed to you as well!
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George Allen, CPM & MHM
Box # 47024, Indpls, IN. 46247
(317) 346-7156