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

Blog # 233 Copyright 2013 17 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.’

Thinking Outside the Box

“The HUD – Code Manufactured Housing Industry Looks to New, even Renewed Product Design, as well as Novel Ways to Market, Sell and Finance this Nation’s Most Affordable Shelter Option!”

George Allen, CPM & MHM
Consultant to the Factory – built Housing Industry,
The Land Lease Lifestyle Community Asset Class &
Affordable Housing Purists & Enthusiasts Nationwide

EXECUTIVE SUMMARY: Think ‘Community Series Homes’ and the ‘Removable Chassis Option’. Then realize, Today’s On – site Sale of New Homes in Land Lease Lifestyle Communities === Yesterday’s independent ‘street’ MHRetailer; the Near Plethora of Creative Home Financing Methods, even a Rebirth of Rental Homes! And now, Sound the Clarion Call for U.S. Department of Housing & Urban Development (‘HUD’), manufactured housing’s federal regulator for the past 37 – 39 years, to Aggressively Promote this Most Affordable Single Family Housing Alternative in the U.S. Today!!! YOU on board? YOU should be!

I.

Community Series Homes, a.k.a. CSH Model HUD – Code manufactured homes, debuted during 2009. The concept was birthed at the second National State of the Asset Class caucus, held 27 February, at the RV/MH Heritage Foundation’s Hall of Fame, Museum & Library facility in Elkhart, IN. Why? HUD – code home manufacturers were near desperate to sell more new homes into (then) manufactured home communities, and these investment property owners needed smaller homes with ‘durability enhancing features’, to site on vacant, sometimes functionally obsolete (i.e. too small for behemoth Development Series Homes) rental homesites. The Community Series Home moniker was suggested later that year, by Don Westphal, the manufactured housing industry’s preeminent landscape engineer – during the 19th annual International Networking Roundtable in Chicago, IL., where three new CSH Models were on display in the host hotel parking lot. And as they say, ‘the rest is history’.

The accompanying, ‘novel marketing method’, in this instance, was to name nearly three dozen Business Development Managers or BDMs, tasked solely with marketing and selling CSH Model homes into (now) land lease lifestyle communities nationwide, oft times to one or another of the 500+/- known LLLCommunity portfolio owners/operators. The CSH & BDM situation today? Not as bright a picture as it should be! Far too few CSH models are exhibited at regional manufactured housing shows (e.g. less than a half dozen among three dozen homes on display at the recent Louisville MHShow in January 2013). And frankly, too few capable, experienced, motivated BDMs on the widely – distributed CSH/BDM Information Sheet today. *1 After all, as land lease lifestyle community owners/operators, we have an estimated 250,000 vacant rental homesites to ‘fill’ nationwide; and fewer than a dozen BDMs simply won’t get the job done! When will HUD – Code home manufacturers ‘wake up’ and take advantage of this CSH model homes and vacant rental homesite reality opportunity?

II.

The ‘removable chassis option’ is seen, by some if not many, as a timely and practical stimulus to increase the annual volume of HUD – Code home shipments, stuck at 50,000/year for the past five years! How so? While not intended to be applicable to all new manufactured homes moving down the production line, it certainly would be an easy and attractive way to debut a top – of – the – line home option to prospective homebuying consumers (i.e. Removal of steel chassis from under the new home once at the site of installation). AND THIS IS NOT A NEW THOUGHT AT ALL.. The ‘removable chassis option’ goes back to before year 1990, when the manufactured housing industry came to within a hair’s width of seeing Congress (House of Representatives), adopt the measure as a way to reform and modernize the (then) 15 year old federal manufactured housing law. Unfortunately, the reform bill, including the chassis (removal) provision, a.k.a. the ‘Hiler amendment’ (Named for its’ chief sponsor, then Representative John Hiler, of Indiana), succumbed to 1) opposition from federal regulators; 2) industry competitors (e.g. Think site builders): and, sad to say, 3) internal industry politics.

One might ask, ‘Why wasn’t the removable chassis option included in the Manufactured Housing Improvement Act of 2000 (a.k.a. ‘MHIA@2000’), ten years later?’ Frankly, it should have been. But annual home shipment numbers were increasing then, until reaching an acme of 372,843 during 1998, before plummeting to the nadir of 50,000 new homes shipped per year for the past five years, with still only 54,881 new homes shipped during 2012.

Today however, we need every (sales & production) stimulating measure
we can identify, and the ‘removable chassis option’ is one such opportunity! This time around, however, we can ill afford to have it succumb (again) to INTERNAL INDUSTRY POLITICS! Do you recall the particular ‘devil in the details’ in 1990? I do.

III.

‘On – site marketing and sale of repo, resale, and now ‘new’ HUD – Code manufactured homes, modular homes, ‘park model’ RVs, and more!’ Yep; that’s the 21st Century land lease lifestyle community’s new, and likely ‘here to stay’ until chattel financing returns, BUSINESS MODEL; not necessarily by choice, in many cases, but certainly by necessity! Frankly, when I entered this business in 1978; had someone told me I’d ‘see the day’ when owners/operators of this unique, income – producing property type would be voluntarily buying NEW manufactured homes to sell – sometimes at or near cost – to qualified homebuyers, just to ‘get the site rent meter running’, I would not have believed them! But that is the Stark Reality Today, and NOW, even that ‘reality’ is evolving again. For a relatively brief time, say between 2002 and 2010, land lease lifestyle community owners/operators, as they had two decades earlier (e.g. late 1970s – 80s era), sold repo and resale homes ‘on contract’, at whatever terms ‘worked’ for prospective homebuyer/site lessee cum ‘residents’ or customers.

Then along came the federal S.A.F.E. Act (Safe And Fair Enforcement for Mortgage Licensing Act), unevenly enforced among dozens of states; since joined by the federal Consumer Finance Protection Bureau or CFPB, a.k.a. ‘Choking Financial Professionals Bureau’, and its’ regulatory measures. Result? Many LLLCommunity owners/operators heretofore comfortable with ‘contract sales’ and other forms of self – finance, have since identified, and are now engaged in ‘safer’ ways to get buyers into homes on site, e.g. via ‘captive finance’ entities; the lease – option; P2P (e.g. Peer-to-Peer), P2B (Peer-to-Business), B2B crowd funding; rental units; 21st Mortgage Company’s popular C.A.S.H. Program; and soon, a new chattel lender entering the market, joining ‘the Big Four + 1’ independent, third party chattel finance firms. *2

And that’s pretty much where we are today: ‘Heavily regulated if you do (finance); damned (to potential business failure) if you don’t – or don’t do so, in strict compliance with said over – regulations!’ Two unfortunate and profound results of this Law of Unintended Consequences ‘regulating finance affair’, have been and will be:

1) The effective neutering of a nationwide cadre of entrepreneur businessmen and women, long engaged in putting low and middle income citizens into manufactured homes – without federal government assistance ($ subsidy) – at their own risk, at this base level of homeownership!

2) And as a further probable consequence, the potential and exponential increase in this nation’s already large number of homeless individuals and families; when no one else steps up to the base level of homeownership plate to assist this otherwise ignored and oft forgotten level of citizenry!

A friendly suggestion. If you agree with the sentiments expressed in the previous paragraph (part III of this blog posting), print it off and send it to your Congressman, along with a personal note, challenging him or her, as to whether they’re fully aware of the havoc their legislative actions, these past few years, have wrought!?

IV.

The independent ‘street’ MHRetailer, as reduced in number as they are (from 4,000+ nationwide a decade ago, to fewer than 1100 today) warrant comment here. For decades, these independent entrepreneur businessmen and women, along with their ‘company store’ colleagues, were the veritable backbone of the HUD – Code manufactured housing industry! MHRetailers connected the ‘production’ hands, arms, and shoulders (home manufacturers) of the industry to the torso and legs that effected the ‘marketing, selling, and placement’ of said homes outside (Think ‘land & home’ packages) and within (then) manufactured home communities, and before that, ‘mobile home parks’, nationwide. But when chattel financing, per se, went away shortly after the turn of the century, MHRetail salescenter owners/operators, without their own land lease lifestyle communities to sustain them, for the most part, withered, died, and went away. And frankly, there hasn’t been much recent change to that sorry scenario.

However, there is a missed opportunity afoot. And it has to do with these same (remaining, surviving) independent ‘street’ MHRetailers. Those who remain must relearn how to sell new manufactured homes into land lease lifestyle communities! And know what? Many LLLCommunity owners/operators, particularly the one – off property owners WELCOME the return of MHRetailers filling vacant rental homesites for them! But there’re three impediments in the way: 1) MHRetailers, in general, seem to have forgotten ‘the drill’ involved in getting new homebuyers to move on – site into land lease lifestyle communities; 2) LLLCommunity owners/operators have forgotten how to engage in the routine ‘Care & Feeding of MHRetailers’, by courting them and providing helpful information about their properties; and, 3) Either or both ‘players’ now not having ready access to independent, third party source(s) of chattel capital to support home sales transactions. So both parties need to get busy and learn what available home finance measures complement their home sales and property investment circumstances; whether it be via forming ‘captive finance’ entities; using the lease – option; P2P, P2B, & B2B social funding; rental units; 21st Mortgage’s popular C.A.S.H. Program; maybe even accessing the new chattel player about to join ‘the Big Four + 1’ independent chattel finance firms. *2

V

Revisit the Clarion Call to HUD, to ‘GET ON BOARD’, and actively promote HUD – Code manufactured housing as this nation’s most affordable form of single family housing available today! If you missed reading last week’s blog posting, titled: ‘Hey HUD! Help Out!’, you really should go back through the blog archives at this website (community-investor.com), to review how HUD’s ‘need to become involved’, was researched and articulated, using the department’s own GOAL (“Helping low – and moderate – income and minority families achieve successful homeownership….”), MISSION (“…supporting housing opportunities for low – income and minority Americans….”), and various APPROACHES “…to promoting successful homeownership opportunities for low – income individuals….” Sure ‘reads’ like HUD envisions itself as ‘the federal agency’ tasked with “Helping low – and moderate – income and minority families achieve successful homeownership” doesn’t it? SO, is this a ‘good thing’ or a ‘bad thing’ for HUD Code manufactured housing, especially regarding new homes being sited in land lease lifestyle communities. Hmm?

Well, here’s a sampling of four ‘unabashedly PRO & three definitely CON’ responses to last week’s blog posting, ‘Hey HUD! Help Out!’:

“Enjoyed this week’s blog. I can relate firsthand to the way HUD has shunned the MH sector. Hopefully, some pressure, and subsequent recognition, helps them realize we are a tremendously viable home ownership option for low to modest income families!” KS, a LLLCommunity owner (Editorial note: Reread Part III of this week’s blog posting!)

“Great blog today! Excellent subject with good points and questions.” RR, an ACM®

“One of your very best (blogs)!” JD, an MHM®

“George. You really out did yourself on this one. Kudos and kisses (figuratively) for a great blog!” EH, a veteran MHIndustry consultant

&

“BE CAREFUL WHAT YOU WISH FOR!” BB, a retired MHRetailer & LLLCommunity owner/operator

“Oh boy, George, (given)…this plea to HUD, I have a great deal of trepidation.” ‘Recalling the analogy of the camel’s nose under the edge of the tent, when it comes to HUD’s programs and record’…”in low cost housing programs as huge boondoggles. And asking any federal agency to help private industry is fraught with potential trouble (i.e. HUD’s regulation of MH manufacturing is a perfect example); and like subsidized HUD low cost housing programs, awash with fraud, cost overruns of huge cost to taxpayers, and complete destruction of local, private rental markets.” NB

“HUD will not help without a cost. Those costs on the initial ‘help’ the HUD Code was to give us in 1976, were WAY big in lost profits, horrific complication of our business model, quality efficiencies never achieved, and the destruction of real changes in building and pricing methods that could have been developed….” Retired home manufacturer

What say YOU? Sure, I’d like to know; and by extension, so would the faithful blog floggers (readers) at this website; but also (again) let your state’s Congressional delegation know of your thoughts on this timely, albeit controversial topic.

In conclusion; I see ‘two levels or types of support’, in this clarion call: ‘Hey HUD! Help Out!’ The first and simplest being overt, and not just tacit, promotion of HUD – Code manufactured housing as ‘affordable housing’! The other being, arranging access to federal funding intended to enable ‘renters’ to become ‘homeowners’; or in the case of land lease lifestyle communities, ‘homeowner/site lessees’.

***
End Notes.

1. CSH/BDM Information List is available ‘Free for the asking’, by phoning the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

2. ‘Captive finance’ refers to a captive finance company, a.k.a. ‘related finance company’ established, as a separate legal entity from the (home) selling firm or land lease lifestyle community, for the purpose of financing homes the selling entity sells. For more information, contact Rishel Consulting Group @ (217) 971-3968. Then there’s the lease – option; for information on this subject, contact Spencer Roane, MHM® via spencer@roane.com. Same with the home social funding concepts commonly referred to as P2P, P2B, & B2B, where P = Person, & B = Business. Spencer Roane, MHM® is spearheading a regional cum national effort to cultivate these specialty finance investors to the HUD – Code manufactured housing industry & LLLCommunity asset class. Precedent already established throughout the UHaul business Model, where rolling stock equipment is concerned. The there’s the resurgence in ‘rental units’. For a FREE reprint on that subject, simply phone the MHIndustry HOTLINE number listed in end note # 1. Of course, 21st Mortgage Corporation’s year old C.A.S.H. Program is the popular WIN WIN WIN WIN (chattel) home loan program in place today. Contact Lance Hull via (865) 292-2120 & (800) 955-0021 for information and an application checklist. Announcement: The March 2013 issue of the Allen Letter professional journal will contain, as a lagniappe, the 14th annual National Registry of Real Estate and Chattel (Personal Property) Lenders. This is one of 12 Signature Series Resource Documents researched and published annually for land lease lifestyle community owners/operators. To subscribe to the newsletter (only $134.95/year), and receive the 24th annual ALLEN REPORT, and 15th annual National Registry of RE & Chattel Lenders, phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

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

Blog # 232 Copyright 2013 10 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.’

SPECIAL NOTE to readers of this week’s opinion/editorial challenge…

This op/ed piece debuts here as blog posting # 232, on the community-investor.com website. Next, it’ll appear as a reprint, enclosed as a lagniappe, in the March 2013 issue of the Allen Letter professional journal. It is recommended, and hoped, YOU will send copies of ‘Hey HUD! Help Out! to all members of your state’s Congressional delegation, and include a personal note requesting they discuss this timely and apt challenge, at their earliest convenience, with Department of Housing & Urban Development officials!

Hey HUD! Help Out!

“Given Our Nation’s Near Stagnant Economy, it’s Time for the Department of Housing & Urban Development (‘HUD’) to Move Beyond Simply Enforcing the National Manufactured Housing Construction and Safety Standards (a.k.a. ‘NMHCSS’, passed by Congress in 1974 & implemented during June 1976), to Actively Promote & Help Finance Placement of New Homes into 50,000 Land Lease Lifestyle Communities, Coast to Coast!”

by 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

The above challenge ‘has been in the making’ throughout my 35 year career in housing, four years shy of the 39 years the HUD – Code manufactured housing industry has been living with – some say ‘enduring’, the only prescriptive national (home) building regulatory code in U.S. history! Why the long wait for this challenge to grow legs?

Frankly, it’s taken nearly four decades for the right pieces to come together; and now, in my opinion they’ve finally done so! But first, here’s the recent triple trigger that gelled my thoughts and experience on the timely topic, prompting this essay challenge.

The Fall 2012 issue of Evidence Matters, is a 28 page booklet published by HUD’s Office of Policy Development and Research. It opens with a feature article, titled: ‘Paths to Homeownership for Low – Income and Minority Households’. Then, within the first three pages of the HUD publication, that lead article title is stated, restated, reinforced three times by Erick C. Poethic, Acting Assistant Secretary for Policy Development and Research; as well as by Rachelle Levitt, Director of Research Utilization Division:

• “Helping low – and moderate – income and minority families achieve successful homeownership has always been a core goal of the U.S. Department of Housing and Urban Development.” P.2. Ms. Poethig (Emphasis added. GFA)

• “…supporting housing opportunities for low – income and minority American remains central to our mission.” P.3. Ms. Levitt (Emphasis added. GFA)

• “this issue of Evidence Matters examines various approaches to promoting successful homeownership opportunities for low – income individuals….” P.3. Ms. Levitt (Emphasis added. GFA)

As I read and reread of HUD’s core goal and mission; then absorbed what other writers in Evidence Matters had to say about ‘paths to homeownership’, Individual Development Accounts, Housing Choice Voucher Homeownership, and a couple shared equity models, I found myself thinking, once again:

‘Why isn’t HUD, manufactured housing’s federal regulator for 39 years, actively promoting and assisting with the financing of new home placement into land lease lifestyle communities (a.k.a.’ manufactured home communities’, and before that ‘mobile home parks’) as a practical means of ‘Helping low – and moderate – income and minority families achieve successful homeownership’?”!

Well, you’ll have to ask HUD officials how they answer ‘that question’; and why, for 39 years, they’ve not explored using the inexpensive factory – built housing type they regulate, as one, if not the key answer, to addressing this nation’s perennial affordable housing shortage? *1 Having been actively involved in factory – built housing since 1970, and the land lease lifestyle community real estate asset class since 1978, I have long and well – honed opinions on that particular matter.*2 But that’s not the gist of this essay challenge.

So, ‘Why today?’ One paragraph in Evidence Matters, crystallized the matter for me, and hopefully it will for you, as well. Here goes:

“Renters of HUD – assisted units may become homeowners via the Housing Choice Voucher Homeownership program, which has been responsible for nearly 15,000 homeownership closings in the past decade. This program allows participating public housing agencies to offer residents the option to apply their rental voucher subsidy toward monthly ownership expenses. After satisfactorily completing a preassistance counseling program that covers home maintenance, budgeting and money management, credit counseling and credit repair, and mortgage financing, the purchaser finds an eligible home. Foreclosure, delinquency, and default rates were quite low for these buyers, who were mostly single mothers with children, minorities, and people with disabilities moving into neighborhoods with higher homeownership rates and slightly lower poverty rates than the neighborhoods where they had rented.” P.8 Quoted from an interview with Janneke Ratacliffe. (Emphasis added. GFA)

It was the latter two of four highlighted portions of this paragraph that hooked me. An eligible home? Why not a HUD – Code (regulated) manufactured home? And, ‘moving into neighborhoods with higher ownership rates’? In traditional land lease lifestyle communities, the vast majority of sited homes are owned by rental home site lessees! Yes I know; for a reason no one has ever satisfactorily explained to me, the fact that underlying realty is owned by someone other than the homeowner/site lessee gives government officials, politicians, lenders, and the like, pause. Yet somehow it’s ‘OK’ to subsidize low income and minority renters living in apartment units and communities affixed to realty owned by someone other than the apartment lessee. Go figure. Some call it discrimination among housing types, and politics among housing players. Reread end note # 2.

Perhaps NOW is the time to take a renewed look at the pieces of this housing puzzle that, when appropriately addressed and accounted for, shall motivate HUD to ‘finally and actively promote & finance new home placement in land lease lifestyle communities from coast to coast’ via the Housing Choice Voucher Homeownership program, or something akin to it!

The right pieces?

• An eligible home. Must be the right size, configuration, and price for the would be homebuyer/homeowner. So, why not a HUD – regulated manufactured home?

• Rental voucher subsidy. The right loan terms and a 30% Housing Expense Factor (‘HEF’), that includes PITI: loan principal & interest, apportioned real estate taxes and insurance premium; as well as all household – related expenses, not including CATV & telephone expenses).*3

• High homeownership neighborhood. A professionally managed *4 land lease lifestyle community, charging a monthly rental homesite rate 1/3rd the monthly rent rate for a 3BR2B garden style apartment or townhouse in the same local housing market *5; and, requirement for a long term written lease, to ensure a fair and just ongoing housing value proposition for the homeowner/site lessee.

The final paragraph of the Evidence Matters publication feature, inspiring this challenge to HUD, to move from being ‘just a housing product regulator, to active promoter and finance facilitator for HUD – Code manufactured housing being sited in land lease lifestyle communities’, underscores the potential merit and reward of the aforementioned recommendations:

“Because the housing market remains fragile, it will take time and thought to
develop reforms that provide access to mortgages for creditworthy low – income
and minority families while also reducing risk and increasing protection for
consumers, investors, and taxpayers. These outcomes are vital to sustainable
homeownership for millions of Americas and are central to the overall health of the economy.”

Yes, it’s past high time for this long awaited and much needed reform; so, let’s join together, MHARR & MHI, along with the Manufactured Housing Congressional Caucus and clamor for…

‘Hey HUD! Help Out!’

***
End Notes.

1. Affordable housing. This is one housing writer who rarely mentions ‘affordable housing’ &/or ‘housing affordability’ without providing a definitions and a multipart frame of reference for readers. So, FYI. Definition: “Housing is affordable when individuals or households ‘…earning less than half of their area’s median income or AMI’, can afford to rent a conventional apartment and or buy a home in their local housing market.” Quoted from June 2011 issue of Multihousing Professional, page # 11. The multipart frame of reference includes Six Measures of Affordable Housing & Housing Affordability that include: the 30% Housing Expense Factor or HEF; The Housing Opportunity Index or HOI; The Housing Wage or HW; The Workforce Housing or WFH; The Income to Home Value Ratio or IHVR; and the very subjective, ‘One Who Believes’ that “Ownership housing is affordable if the price is right”. The latter frame of reference definition quoted from Shelterforce magazine, Fall of 2007. This material summarized from Chapter # 4, ‘Affordable Housing & Housing Affordability’ in the Book of Formulae, Rules of Thumb, & Helpful Measures…by George Allen, PMN Publishing, Indianapolis, IN. 46247., 2012.

2. For example, take the Manufactured Housing Improvement Act of 2000 (a.k.a. ‘MHIA@2000’). It was designed by Congress to require and achieve full parity between HUD – Code manufactured homes and all other types of housing! Specifically, the U.S. Congress directed HUD, in this law, to “facilitat(e) the acceptance of the quality, durability, safety and affordability of manufactured housing within the Department” – in other words, place HUD – Code manufactured housing into the mainstream of housing and home financing programs supported by HUD, to the tune of billions of tax dollars every year! And once the MHIA@2000 law is ‘finally and fully implemented’, after a 12 plus year hiatus, HUD, FHA, lenders and others, must STOP discriminating against HUD – Code manufactured housing, and begin treating it, in every way, like all other types of housing in the U.S. Just how far out of touch is HUD today, when it comes to ‘promoting’ HUD – Code manufactured housing as an affordable housing alternative in the U.S.? HUD – Code manufactured housing is not even on the department’s ‘radar screen’ of Strategic Plan goals and sub goals! For example; an ‘Advanced Search’, entering the words ‘manufactured housing promotion’, on the department’s website, produces this left field result: ‘Promotion of alternative dispute resolution’, along with other similar red herring results, all having nothing to do with promoting HUD – Code manufactured housing as an affordable housing choice, within or outside 50,000+/- land lease lifestyle communities located throughout this nation! Yes, it’s high time for a change: ‘Hey HUD! Help out!’

3. The oddly but appropriately named ‘Ah Ha! & Uh Oh! Worksheet’ was designed for use within and outside the manufactured housing industry and land lease lifestyle community asset class, to: Using a prospective homebuyer’s Annual Gross Income (‘AGI’) and/or local housing market’s Area Median Income (‘AMI’), as a starting point, and a 30% standard Housing Expense Factor (‘HEF’), to calculate the maximum amount of home mortgage and home Price Point a homebuyer or local housing market can afford under ‘affordable’ & ‘risky’ lending and home buying conditions, whether said home was being sited within a land lease lifestyle community or on a scattered building site conveyed fee simple. Form is available, for the asking, from PMN Publishing via the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

4. Professional property management or PM is not, unfortunately, all that widespread among the estimated 50,000+/- land lease lifestyle communities scattered throughout the U.S. As a starting point, however, firms engaged with HUD, in an effort to promote homeownership of manufactured homes to be sited within this unique, income – producing property type, in my opinion, should be expected to have at least one Certified Property Manager® or CPM® member of the Institute of Real Estate Management® or IREM® on staff at all times! And every on – site property manager should have been trained in and completed, one or another of the several professional property management programs, and not just parts thereof, presently available to them via MHI’s MHEI: the Accredited Community Manager® or ACM® program; PMN Publishing’s Manufactured Housing Manager® or MHM program; or in California, that state’s homegrown PM training and certification program.

5. 3:1 Rule of Thumb. While this guideline is hotly contested by some, it’s been a practical mainstay throughout the land lease lifestyle community asset class for at least three decades. A few tweaks apply. 1) When estimating the stabilized rental homesite rate in a land lease lifestyle community along or adjacent to an interstate highway beltway around a major SMSA or MSA, divide the average area apartment or townhouse rental rate by 2.5 instead of 3. 2) This rule of thumb might indeed need further refinement when used in one or another of the Sunbelt regions of the U.S., e.g. Florida, southern California, Arizona, Nevada. 3) And when preparing apartment/townhouse and land lease community Market Studies to effect this 3:1 calculation, ensure one is comparing apples to apples, by checking to see that items such as water and sewer billing, even heating, is treated similarly before the mathematical calculation is completed. For other formulae and rules of thumb associated with manufactured housing and the land lease lifestyle community real estate asset class, read Book of Formulae, Rules of Thumb, & Helpful Measures…available from PMN Publishing by phoning 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 # 231 Copyright 2013 3 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.’

Have You Ever Wondered What You’re Missing, by Not Subscribing to the Allen CONFIDENTIAL! newsletter?

Here’s an inside look at two of 10 stories & four blog summaries, featured in the February issue of TAC!; the first, a dual focus commentary on the recently concluded, successful Louisville MHShow; the second, exciting FLASH NEWS, describing a rare educational and networking opportunity, in our nation’s capitol, for 20 land lease lifestyle community owners/operators who register…

I.

‘They simply don’t get it!
Who? HUD – Code home manufacturers & show organizers!’

Both cases in point were clearly evidenced at the recent ‘2013 Louisville Manufactured Housing Show’, formerly known as the Midwest Manufactured Housing Show, with 30+ new homes on display, and dozens of supplier booths.

• HUD – Code home manufacturers. It’s estimated there are approximately 250,000 vacant rental homesites in 50,000+/- land lease lifestyle communities (a.k.a. manufactured home communities) throughout the U.S. today! And at least half those quarter million vacant rental homesites are likely functionally obsolete, i.e. unable to site today’s typical ‘big box = big bucks’ developer series home(s), as said sites were developed when homes were half the size they are today. And most HUD – Code home manufacturers now include a line of Community Series Homes or CSH Model homes (i.e. singlesection and smaller multisection homes with durability – enhancing features) in their design and production capability. BUT, does one see CSH Model homes ‘identified and showcased as such’ at regional MHShow? NO! Last week at the Louisville MHShow I saw NO signs promoting Community Series Homes (though admittedly, I could have missed a sign or two), and I counted fewer than a half dozen homes, mostly singlesection, that ‘might have qualified’ as such. BOTTOM LINE? Land lease lifestyle community owners/operators, large and small, need Community Series Homes to fill vacant rental homesites in their properties, and at this point in time, ‘go begging’ for same, as HUD – Code manufacturers ballyhoo ‘Big Box = Big Bucks’ behemoth models at regional MHShows. Time for a change! (On a related not, the late Warren Huddleston: RV/MH Hall of Fame member, Illinois MHPioneer, and perennial KY MHShow Chairman, frequently complained of this same shortsightedness, on the part of HUD – Code manufacturers ‘for many years’ before his demise). Hence, ‘They, HUD – Code home manufacturers simply do NOT get it!’, and continue to drag along at a nadir of 50,000+/- new home shipments per year, now going on five years in a row. Go figure.

• Show organizers. OK; I know. In years past, when there were more than 4,000 independent ‘street’ MHRetailers & ‘company stores’ (formerly called ‘dealers’), and not the paltry 1,100 remaining today, it was anathema to do anything at a manufactured housing trade show that’d pull would be homebuyers (e.g. aforementioned MHRetailers) off the showroom floor! After all, the prevailing attitude was ‘They’re here to buy (homes),not learn anything!’ Well, times have changed. Not only are there far fewer MHRetailers ‘to buy new homes to sell’; land lease lifestyle community owners, by default (few to no nearby MHRetailers selling/moving homes into their properties anymore), have had to learn to sell repo, resale, and now new HUD – Code manufactured homes, to fill vacant rental homesites, as older homes deteriorate and disappear. Unfortunately – in this industry observer’s opinion – the variety and quality of off – the – showroom – floor educational sessions has NOT kept pace with the knowledge and HOW TO… demands of MHShow registrants. That sorry shortfall was convincingly demonstrated last week in Louisville, KY when 70 land lease lifestyle community owners/operators paid $50.00/person to leave the fairground, and go learn about lease – option and other chattel finance strategies; ‘How to Collect 100% of Their Site Rent 100% of the Time!’; and, where to go to learn ‘How to Be Compliant with Today’s Myriad of Financial Regulations’.

Yes, it’s past time for HUD – Code home manufacturers and MHShow program committees to Wake Up & Effectively Deliver, 1) the appropriate housing product, and 2) the ‘How To’ educational topics sorely needed by land lease lifestyle community owners/operators, who take the time and expend the resources, to attend regional trade shows!

Enough said, and hopefully, ‘you get this point’! Few other writers in the manufactured housing industry and land lease lifestyle community asset class, with two notable exceptions*1, routinely put their professional reputation and business credibility ‘on the line’ in your behalf, to communicate the truth! Regularly challenging long held traditions and marketing practices, that once spelled Success for this ‘double dual industry’*2, but today stymie us from being this nation’s preferred housing purveyors and shelter suppliers of choice, replete with a positive brand identity, and reputation for being ‘truly affordable housing’.

II.

FLASH NEWS: Announcing a half day Workshop for Land Lease Lifestyle Community Owners/operators in Arlington, VA., on Monday, 25 February.

Plans have been finalized that might be of interest to YOU! At the request of land lease lifestyle community owners/operators in the Washington, DC area (Think MD, VA, DE, & eastern PA), we’re hosting ‘A Workshop for LLLCommunity Owners/operators!’, Monday morning, 25 February 2013, from 8:00AM until Noon, followed by a networking luncheon at the event hotel. Capacity is limited to first 20 owners/operators who sign up!

Important Notice: This exciting Workshop has nothing to do with MHI’s
Legislative Conference being held the same day. It’s simply an educational,
networking alternative to there being no NCC division meeting this month.

Preliminary agenda includes a ‘meet & greet’ from 8 – 8:30AM; ‘State of the MHIndustry & LLLCommunity Asset Class’, from 8:30 – 9AM; ‘Maximizing Profitability of Land Lease Lifestyle Communities!’ from 9 – 9:45 AM; ‘ID New Chattel $$$ to Fill Vacant Rental Homesites!’, from 10 – 10:45AM; and, an ‘Open Discussion of Industry & Asset Class Issues, Trends, Resources, & More….from 11AM until Noon. Morning will end with a group ‘order from menu’ luncheon at the hotel restaurant. Cost? Only $75.00 per person, to cover meeting room and related expenses. Want to participate? Phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633.-4764 or (317) 346-7156. Remember; ‘First Come, First Served!’ BONUS. If you’ve wanted to learn firsthand, about the lease – option, when used in LLLCommunities; be there!

III.

Well, there’s your taste of the nearly 14 year old limited circulation publication, the Allen CONFIDENTIAL! business newsletter. Yes, it’s expensive @ $950.00/year for 12 monthly issues. However, if a TAC! subscriber is also a subscriber to the Allen Letter professional journal (also a monthly trade publication, but only $134.95/year), then TAC! is only $750.00/year. So, taken altogether, the two newsletters and annual ALLEN REPORT, bought separately, cost $1,584.95/year. But when the two newsletters are subscribed to together, the total cost is reduced to $884.95, for an annual savings of $700.00. So interested in subscribing? Again, phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764, and ‘don’t risk being shown what you’re missing’, ever again! GFA

***

End Notes.

1. The exceptions? Danny Ghorbani, long time executive heading the Manufactured Housing Association for Regulatory Reform or MHARR; and, Ken Rishel of Rishel Consulting, with his two online finance – related publications. You can count on these long time MHIndustry executives, and yours truly, to communicate ABC3 (‘accurate; brief; clear, concise & complete’) trade – related information, that’s become increasingly difficult to find and read ‘in print & on line’ these days! And if Bruce Savage was still on board, in Arlington, VA., we’d quickly add him to this too small number of trade journalists, as well.

2. ‘double dual industry’ = ‘HUD – Code home manufacturing & distribution; land lease lifestyle community development and investment/management’.

***

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 3 47024, Indianapolis, IN> 46247 (317) 346-7156

Blog # 230 Copyright 2013 27 January 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.

Highlights from the 24th annual ALLEN REPORT
II.

More About MHI’s NCC Division’s Non – Meeting Plans

III.

POWER Networking Luncheon Attracts 70+ Attendees!

***

I.

Highlights from the 24th annual ALLEN REPORT,
a.k.a.
‘Who’s Who Among Land Lease Lifestyle Community
Owners/Operators Throughout North America!’

Well, it’s ‘out and about now’, having been distributed as a lagniappe in the January 2013 issue of the Allen Letter professional journal. The ALLEN REPORT is a 12 page Signature Series Resource Document, one of a dozen similar monthly SSRD research reports and directories prepared by PMN Publishing, for land lease lifestyle community owners/operators nationwide, and in Canada.

Here are highlights from the 24th annual edition of the ALLEN REPORT:

• The only chattel finance ‘light at the end of this decade long tunnel’, during 2012, was 21st Mortgage Corporation’s C.A.S.H. Program for LLLCommunities.

• MHI has new president & CEO (Dick Jennison) & NCC a new VP (Jenny Hodge)

• 6 reasons: ‘land lease lifestyle community’, not manufactured home community

• New: Book of Formulae, Rules of thumb & Helpful Measures @ MHIndustry

• Finally; increased concern regarding ‘home finance & site rent value proposition’

• Community Series Homes now a ‘fact of life’ but still resisted by MH factories

• Inspire Communities. Merger of Follett Investment Properties & Bertakis Dev.

• Unintended consequence of 30+ years of property consolidation: less RE brokers

• Birth of Manufactured Home Communities Owners Association of N. America

• 110 of 500+/- LLLCommunity portfolio owners/operators respond to AR survey

• Top 10 portfolio owners/operators control 55% of rental homesites in AR survey

• LLLCommunity portfolio owners/operators from 30 states respond to AR survey

• Average national physical occupancy percentage is down from last year’s figure

• Average national Operating Expense Ratio (‘OER’) higher than last year’s figure

• Self – finance dollar volume, ‘paper carried by LLLCommunity owners’, is down

• LLLCommunity portfolio owners/operators continue to acquire RV parks & sites

• Little to no construction of new rental homesites anywhere in the U.S. & CN.

• Professional property management on the decline among LLLCommunities

• Pride of Young Lions features GCP/ALL, RHP, UMH, & Inspire Communities

• Half of original Daring Dozen investors are still, after eight years, going strong

• MHIndustry unity & national leadership at a tipping point? Maybe. You decide

• 25 Most Influential People in the MHIndustry Today! All named by their peers

• And much much more, for MHIndustry & LLLCommunity aficionados alike…

To order the 24th annual ALLEN REPORT; know that it is FREE to Allen Letter professional journal subscribers (i.e. Only $134.95/year for 12 monthly issues), OR for $500.00 per copy. To order, phone the MHIndustry HOTLINE: (877)MFD-HSNG or 633-4764.

***

II.

More About MHI’s NCC Division’s Non – Meeting Plans

The Good News is, National Community Council’s elected chairman responded by email, to my inquiry and criticism regarding his summarily canceling the regularly scheduled biannual membership meeting of said MHI division, in Arlington, VA., during late February 2013. The Not – So – Good News, in my opinion? Well, here’s a key paragraph from said correspondence to yours truly. Read and decide for yourself, especially if you’re presently a direct, dues – paying member of MHI and or its’ National Communities Council division:

“The Executive Committee planning session will be closed other than for the Executive Committee and any invited guests. We don’t anticipate your participation. Similarly, while we expect to seek suggestions from a variety of constituents of all shapes and sizes either before, during or after the upcoming planning session, we don’t anticipate requiring your involvement. For the time being, this initial planning for the future of the NCC will, in fact, be placed in the hands of the Executive Committee and our work will be shared with the membership at the appropriate time. I’m sure you’re aware that most other large organizations plan effectively for the future in exactly the same manner.”

Yes, that’s how the paragraph was penned, including the redundancy, lack of punctuation, and obvious pompous tone.

Some observations. This is the first indication there’ll be individuals, other than the Executive Committee per se, who’ll be invited guests. That may be a good thing, maybe not, depending on who they invite. Wonder if we’ll (NCC members) ever know?

OK, OK, I get the message! “We don’t anticipate your participation.” & “…we don’t anticipate requiring your involvement.” It’s clear, this duly elected NCC board member is unwelcome to participate in the Executive Committee’s ‘closed planning workshop’. Be that as it may, “I plan to be in attendance at the MHI Legislative Conference.” Hmm. Wonder if I should plan an alternate educational activity for NCC members who, out of loyalty to MHI/NCC, plan to attend the February meeting? I can think of two ‘most appropriate alternative topics’ already. Let me know of your interest via MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. This could be fun….

And that last sentence. Sure, Executive Committee discussion, during retreats and other venues, is certainly one way to ‘plan for the future of the NCC’; but interestingly, for a national Advocacy body birthed by MHI on 1/1/1996, this is the FIRST & ONLY TIME, in my recollection, where duly elected (and appointed) officers have purposely cut themselves off from direct, dues – paying members and their input, regarding ideas, preferences, and suggestions regarding the present and future of the NCC council. So, if nothing else, the Executive Committee is ‘making history’ of themselves.

Frankly, I and others believe, this ‘closed planning workshop’, in lieu of the regularly scheduled biannual NCC meeting, is simply a subterfuge. And those council and audience members present at the NCC meeting on 8 October 2012, in San Antonio, TX., likely understand why. The cowardly public verbal ambush of two NCC members, for alleged offences not documented to this day, and who were not given opportunity to defend or rebut said charges, remains unresolved! So, a ‘closed planning workshop’, again – in lieu of a regularly scheduled membership meeting, is just one way to – like the U.S. Congress – ‘kick the can down the road’, settling nothing.

III.

POWER Networking Luncheon Attracts 70+ Attendees!

…and fully half of them, by a show of hands during lunch, and from responses penned on Event Evaluation Forms turned in following the luncheon, indicated they were either 1) attending their first Louisville MHShow, or 2) deciding to participate in the POWER Networking Luncheon opportunity, convinced them to travel to the KY Fair Grounds for the event this January!

‘LOL’ A humorous sidebar to this event, was the presence of a couple 2’WX3’H bright yellow signs near the MHShow registration area, warning readers, ‘George Allen’s POWER Networking Luncheon is not part of the official MHShow program’. Well guess what? As we were seating an already capacity crowd of 60 registrants at the luncheon, another ten individuals showed up, half indicating they’d read the (above) signs and decided the POWER Networking Luncheon was where they really wanted to be! So a ‘Thanks’, of sorts to the lone show vendor who spent good money to negatively promote this ‘more than sold out’ event. Lessons Learned? ‘Bad publicity is better than no publicity at all!’ & ‘Turn a lemon (yellow sign) into lemonade (luncheon fees)!’ ‘LOL’

Bottom line? There’re several! First; as event organizers, we accomplished our twofold goal: Attract new faces (i.e. land lease lifestyle community owners/operators) to the Louisville MHShow, AND provide a quality educational and networking opportunity:

• Ken & Donna Rishel, the manufactured housing industry’s Power Couple, held the rapt attention of their two Open Discussion Groups, as they walked them through the morass of increasing Federal and state finance regulations. Want more information about their $ workshops and freelance consulting services? Phone (217) 971-3968.

• Spencer Roane, MHM®, widely known, in land lease lifestyle community owner/operator circles, as the ‘lease – option guru’, shared a dynamite, multi paged handout titled: ’10 Critical Steps in MH Seller Financing!’ Everyone should want a copy! Reach him via spencer@roane.com

• Michael Power, flew up from Florida, to once again hold forth on his popular ‘How to Collect 100% of Your Site Rent 100% of the Time!’ methodology. To request a copy of Michael’s handout, phone (305) 879-3776 & ask about his freelance consulting services for land lease lifestyle community owners/operators.

Another ‘bottom line’ had to do with the Surprise Special Speaker on the Program. It was ‘yours truly’. And the POWER Networking Luncheon achieved its’ ‘historical significance’ as the first public venue at which the birthing of a new, national, not for profit entity, to serve the ‘statistical Research & ongoing Resource servicing’ of land lease lifestyle community owners/operators, coast to coast, and maybe Canada, was announced! Still tentatively known as the Manufactured Home Community Owners Association of North America, or MHCOA in short, the entire presentation will be shared, first with subscribers to the Allen CONFIDENTIAL! business newsletter, then in the Allen Letter professional journal. Already, in excess of 100 businessmen and women have committed to join the new Research & Resources entity; have you? If seriously interested, simply phone the above referenced MHIndustry HOTLINE or via gfa7156@aol.com Details to follow. Pivotal date = likely 2/27/2013. Are YOU on board?

There’s yet another ‘bottom line’ to this superbly successful POWER Networking Luncheon. And it has to do with state manufactured housing associations throughout the U.S.. If you’d like to bring this tripartite, half day program to your state (Either morning or afternoon, including breakfast or a luncheon), know all four presenters are willing to address your members, given scheduling compatibility, for reimbursement of travel – related expenses! Three of the presentation topics are listed in the previous paragraph. What’s the fourth? That’s up to you and what your members need, e.g. ‘State of the MHIndustry & LLLCommunity Asset Class’; ‘How to Calculate Affordable & Risky Price Points for New & Resale Homes Going into LLLCommunities or onto Private Property Conveyed Fee Simple’; or, ‘How to Sell More Homes into Land Lease Lifestyle Communities!’ – latter message addressed primarily to HUD – Code home manufacturers and independent ‘street’ MHRetailers and ‘company stores’. If interested, phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. This could be the very best program you offer your members all year long! Think about it – and call….

***

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 # 229 Copyright 2013 20 January 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 Housing Industry’s Enronesque Period

II.

What? No Meeting of the National Communities Council?

III.

MHInitiative®, Second Generation Workshop, & More…

***

I.

Manufactured Housing Industry’s Enronesque Period

‘When We Dodged a Lethal Bullet & Didn’t Know It!’

“The Enron scandal, revealed in October 2001, eventually led to the bankruptcy of the Enron Corporation, an American energy company based in Houston…” Google Search
-meanwhile-
The manufactured housing industry’s businessmen and women routinely engaged in turning our (home buying) customers ‘upside down’ financially, using a variety of housing finance shenanigans, a.k.a. predatory lending measures.

The adjective ‘enronesque’ has since been spawned by the aforementioned Enron scandal; and to this day, ‘relates to accounting methods meant to deceive, accounting legerdemain spun to make something seem affordable.’ Housing maybe?

Frankly, it’s a minor miracle ‘enronesque’ hasn’t been applied before this, to manufactured housing industry financial shenanigans that, in large part, caused us to lose our independent, third party sources of chattel (personal property) finance; and, in lesser part, why those resources haven’t returned, en masse, to this day.

Remember business life back then? At the turn of the 21st Century, specifically 1998, when during our brief renascence, the HUD – Code manufactured housing industry shipped 372,843 new, mostly Developer Series Homes (a.k.a. ‘Big Boxes = Big Bucks’), to compete head to head, as land and home packages – for increased local housing market share – against production site builders.

As a rule, we sold customers ‘more home than they could afford’, accepted false or inaccurate loan applications, encouraged phantom and insufficient mortgage down payments, and engaged in underwriting ARMs (adjustable rate mortgages) with flagrant interest rate swings, and too often, arranged for the installation of these behemoth new homes in (then) manufactured home communities, ‘rent free’ for periods of time.

Yep, this sad period in our industry’s history, when independent ‘street’ MHRetailers, and company stores alike, espoused this mantra: ‘We have no $$$ down, no job, no problem deals for you!’, deserves this label:

Manufactured Housing’s Enronesque Period, circa 1994 – 2002

And it will be so – labeled next time the Signature Series Resource Document, ‘Paradigm Shifts of Mobile & Manufactured Housing’ (subtitled: ‘Serving shelter needs of the newly wed & nearly dead for seven decades’) is updated (November 2013), and distributed as a lagniappe in the Allen Letter professional journal. To subscribe, phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

II.

What? No Meeting of the National Communities Council?

As a direct, dues – paying member of the Manufactured Housing Institute and its’ National Communities Council division, my firm pays $500.00/year as a land lease lifestyle community owner/operator. And I’ll pay a near like amount to participate in MHI’s annual Legislative Conference in late February. And let’s not forget the hundreds of dollars in annual dues we pay to Indiana and Illinois Manufactured Housing Associations ,’just to be eligible’ to be a direct, dues – paying member of the national Advocacy body. And NOW I learn there will be NO opportunity, during MHI’s annual Legislative Conference, to meet and network with fellow NCC division members in Arlington, VA @ 25 & 26 February. Where’s the dues value in that change of plans?

WHY no meeting? Following passage is quoted, in part, from email correspondence received from the division’s chairman, on 16 January – a week and a month before many of us expected to convene in Arlington, VA., for the first time since MHI’s annual meeting, and NCC’s debacle meeting on 8 October 2012, in San Antonio, TX.

“In lieu of the NCC business meeting that has been held traditionally in
conjunction with the MHI Legislative Conference and Winter Meeting, at the
upcoming meeting, the NCC Executive Committee will instead hold a closed
planning workshop focused on solidifying the NCC’s vision for the future. Our
goal will be to define a vision that ensures the NCC supports MHI’s broader
legislative advocacy and marketing outreach efforts, provides the range of
services most valuable to the variety of constituents we represent, makes interim
NCC meetings more productive for all our members, and expands our
membership to add to our resources and strength as the only MHI division
representing community owners.”

Don’t know ‘bout you, but the first of several questions this paragraph raises, is this:

Why didn’t NCC Executive Committee hold a ‘closed planning workshop’ between its’ last meeting during October 2012 and now, so it’d be ready and able to communicate its’ ‘vision for the future’ in late February in VA?

Know what this selfish pre empting of the ‘traditional’ February meeting means to those of us who are faithful attendees (As a related aside, I’m an elected NCC board member, but do you think we’ll be invited to this Executive Committee soiree? Nope.)? We get to wait until the next NCC meeting, probably next Fall at MHI’s annual meeting, unless there’s’ an interim NCC meeting during the MHCongress in Las Vegas this coming April.

You probably noticed the four part goal contained within the quoted paragraph. Broken out, the parts are:

• “…define a vision that ensures the NCC supports MHI’s broader legislative advocacy and marketing outreach efforts…” That’s pretty much ‘business as usual’, based on my not having missed an MHI/NCC division meeting in years.

• “…provides the range of services most valuable to the variety of constituents we represent…” One can only hope, between now and this ‘closed planning workshop’, the Executive Committee reaches out to its’ members, including ‘yours truly’, and asks: What ‘services (are) most valuable to me as a land lease lifestyle community owner/operator?’ Think that’ll happen? Wait and see. But given the MHIndustry’s penchant for designing, building, and shipping homes to ‘then sell’, rather than the other way around; my guess is we’ll wind up being told what ‘services (are) most valuable to me as a LLLCommunity owner/operator.’ That too, sad to say, is pretty much ‘business as usual’ for this group.

• “…makes interim NCC meetings more productive for all of our members…” Hmm. What’s the ‘diff’ between an interim and a regularly scheduled NCC meeting?

• “…expands our membership to add to our resources and strength as the only MHI division representing community owners.” Now this is a cute one. An obvious call for more dues revenue; but what are direct, dues – paying LLLCommunity owners/operators, like you and me, receiving in terms of benefits, from NCC membership? National advocacy, for sure. But what else? Non – meetings like this one in February 2013?

At this point, I’d like to ask the following question of NCC’s Executive Committee:

It’s pretty well known throughout the land lease lifestyle community realty asset class, MHI’s NCC division effectively handles the national Advocacy needs of its’ unique, income – producing property type members. But what about the plethora of other products and services LLLCommunity owners/operators presently enjoy, from other sources, and not presently provided by MHI’s NCC division?

STOP HERE! Originally, the plan was to list ‘right here’, those needed products and services, some think should be available via MHI’s NCC division. However, several LLLCommunity owner friends advised ‘not to do so’, likening the matter to ‘beating a dead horse’ where this national body is concerned. So, to switch the subject…

There’s concern today’s NCC division has become a ‘Big Boys (largest property portfolio owner/operator dominated) Club’, given No representation on its’ present Executive Committee, by sole proprietors and smaller property portfolio owners/operators. There’s serious concern this imbalance bodes ill for small businessmen and women, where present and future NCC Advocacy decisions – as well as Research& Resources, if or when taken in – house at the MHI/NCC, might be concerned. This issue deserves to be soon addressed, but not in a ‘closed planning workshop’ attended by the division’s executive committee and a few invited guests.

And let there be no misunderstanding. I plan to attend MHI’s annual Legislative Conference in late February 2013; and if NCC’s Executive Committee wants to meet with me before, during, or after their ‘closed planning workshop’, I’ll do my best to be accommodate them.

III.

MHInitiative®, Second Generation Workshop, & More…

Let’s hold this off until maybe next week. Many who’ve been responding to this blog of late, have inquired as to when and where there’ll be a FOCUS Group meeting this Winter (i.e. a 1 ½ day regional gathering of LLLCommunity owners and senior executive property managers addressing five key operational topics they select); and, what plans there are afoot for an industry wide MHInitiative®. In this latter instance, MHInitiative® plans are ‘on hold’ until we learn what, if anything, unfolds from MHI’s NCC division’s ‘closed planning workshop’ in late February, and the anticipated emergence of the Manufactured Home Community Owners Association of North America, or MHCOA in short, around that same time…think 27 February 2013.

Others of you, have been asking us to plan and host a one or two day program, dealing with Business Succession Planning, for second and third generation owners/operators of land lease lifestyle communities. If this topic is a ‘hot button’ for you and your family, let me know via email: gfa7156@aol.com or the aforementioned MHIndustry HOTLINE. It continues to be ‘simply amazing to me’ that none of our present day national bodies appear to be sensitive to not only routine, but special needs (like this one) on the part of their constituents, industry and nationwide.

***

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 # 228 Copyright 2013 13 January 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.

Land Lease Lifestyle Communities Celebrate 20 Years of History

II.

‘Hooray!’ for MHCA’s ‘The Future of Manufactured Housing’…

III.

MUSINGS

IV.

2013, a Breakout Year? Maybe if…

***

I.

Land Lease Lifestyle Communities Celebrate 20 Years of History

For a multifamily rental property type that’s been around for 70 years, land lease lifestyle community (a.k.a. manufactured home community) contemporary history ‘first blossomed’ 20 years ago, during 1993.

Prior to 1993, national advocacy decisions were handled by an ad hoc committee, during Manufactured Housing Institute meetings. But when rumors of IPOs (initial public offerings of stock), pursuant to REIT (real estate investment trust) formation, became commonplace, it was generally agreed national advocacy would be in need of marked and formal improvement.

Prior to 1993, only one book had been authored during the preceding two decades, describing any aspect of mobile home park operations. And that was Mobile Home Park Management, self – published in 1988 by PMN Publishing in Indianapolis, IN. Six years later, in 1994, J. Wiley & Sons debuted Development, Marketing & Operation of Manufactured Home Communities. Both books ‘sold out’ within six months after being released. Since then, the first book has gone thru six updates and is now titled, Landlease Community Management. The second tome, long out of print, and considered by many to be an industry classic, continues to be available via PMN Publishing and Amazon.com. Point? Prior to 1993, HOW TO information, along with benchmark operating statistics re the LLLCommunity asset class, were exceedingly difficult to find.

Prior to 1993, two print trade publications, the Journal – which is still in existence, and the Manufactured Home Merchandiser magazine (now defunct) were unabashedly ‘HUD – Code home manufacturing & retail sales oriented’. No question about it, and no apologies offered. When I started writing columns, for both publications, during the late 1980s & early 1990s, it was understood they were token nods to the realty segment of the MHIndustry. Since that time, other trade pubs have come and gone, e.g. Modern Home and Community Management. The Allen Letter professional journal (1991) and the Allen CONFIDENTIAL! (1999), both subscriber – supported newsletters; along with a few online ezines, feed our appetite for industry and asset class information.

Prior to 1993, little to no professional property management education. While MHI’s Manufactured Housing Education Institute’s (‘MHEI’) Accredited Community Manager® or ACM® program debuted in 1991, it took a couple years to reach its’ potential; and in 2001, was joined by PMN Publishing’s Manufactured Housing Manager® or MHM® program. Today, PM training & certification programs are in place – but not utilized nearly as much as they should be, given 50,000 LLLCommunities nationwide. This sad situation has not improved much at all since 1993.

So, what’s the big deal about year 1993? Well first; know two separate resources, birthed in successive years, combined to create a third decisive occasion benefiting the entire specialty property type! In 1989, the ALLEN REPORT (a.k.a ‘Who’s Who Among LLLCommunity Portfolio Owners/operators in North America!’) replaced Roulac’s Strategic Real Estate ‘List of 25 Largest Mobilehome Park Owners in the U.S.’ And the following year, nearly 100 ‘mobile home park owners’ convened in Clearwater Beach, Florida, for the first of 21 annual International Networking Roundtable events. And subsequent to that first meeting, this idea was birthed…

Bringing us to 31 August 1993. While details of the historic event, formation of the Industry Steering Committee, or ISC, predecessor to MHI’s National Communities Council (‘NCC’) division, is recounted in Appendix G of How to Find, Buy, Manage & Sell a Manufactured Home Community (J. Wiley & Sons, 1996), a summary of those events follows here. That day, 19 owners/operators of (then) manufactured home communities met at an airport hotel in Indianapolis, IN. Among the 19, were executives from all the firms that’d launch IPOs during the next two years: MHC, Inc. (today, ELS, Inc.); Sun Communities, Inc.; Chateau Properties, Inc.; ROC Communities, Inc. (latter two eventually merged). And UMH Properties (then, United Mobile Homes), already a REIT – from the 1980s, was also present, as were a half dozen other private and corporate property owners. Following that watershed meeting, several additional Task Force gatherings convened at locations around the U.S., culminating, on 1 January 1996, with MHI forming the NCC (now division), to formalize national advocacy in behalf of land lease lifestyle communities nationwide.

So, year 2013 commemorates the 20th anniversary of LLLCommunity owners/operators ‘taking control of their collective future’, and laying the groundwork for representation and advocacy they’d need as several property portfolios ‘went public’. Year 2013 also marks the 17th anniversary of the NCC division proper. And for those reading this history, but not yet direct, dues – paying members of MHI and its’ NCC division, know that the next biannual meeting is 25 & 26 February in Arlington, VA. For membership and meeting information, phone (703) 558-0666 or 0678. And tell’em ‘George sent me!’ Hope to see you at the meeting in late February….

As a related aside, the RV/MH Heritage Foundation has been approached about effecting some sort of formal commemoration of this 20th anniversary, so important to owners/operators of land lease lifestyle communities. Perhaps special mention will be made of the Industry Steering Committee, and its’ 19 Pioneer attendees (most of whom have now retired or died), at the 2013 Induction Banquet honoring Hall of Fame inductees, during August 2013. Guess we’ll have to wait and see….

II.

‘Hooray!’ for MHCA’s ‘The Future of Manufactured Housing’…

Have YOU read it yet? What? The Manufactured Housing Communities of Arizona (‘MHCA’) January/February 2013 ‘newsletter’ cum 30+/- page booklet, titled: Today & Tomorrow. Actual title of this issue: ‘The Future of Manufactured Housing’. Kudos to executive director Susan Brenton, for planning and pulling off this futuristic coup! Want a copy? Phone Susan @ (480) 345-4202.

OK, here’s what I like about the overall newsletter cum booklet. There are no fewer than nine feature articles, penned by several attorneys (West of the Mississippi, they’re ‘everywhere’!), representatives from three national Advocacy bodies, one erstwhile land lease lifestyle community manager, one LLLCommunity owner, and MHCA’s president, Neal Haney, owner of NTH Management, a fee management firm.
There’s good substance buried within most of these articles, but you must ferret it out…

For example: Attorney Michael A. Parham’s piece, ‘A Dystopian Future for manufactured housing?’ Where dystopian is ‘…a society characterized by human misery, squalor, oppression, disease and overcrowding.’ His final paragraph reads, “I am gloomy about the future but still have some optimism that with innovation and hard work this industry can survive and perhaps prosper. But we need to recognize what is happening around us and be nimble enough to act to avoid the bad consequences and take advantages of opportunities presented by all of these new developments.” (Evidently, attorneys don’t use commas in AZ. GFA)

For example: Erstwhile property manager L.A. ‘Tony’ Kovac pens: “A well known, successful community operator has told me that if we aren’t careful, the land lease MH Communities of today will turn back into the corn fields, will be bought out by big box stores or ‘higher and better use’ developers. We have natural advantages because we do offer quality, affordable homes and living. But that doesn’t mean that we don’t have threats.” And he goes on, to rightly decry subsidized housing. Other threats?

For example: Attorney John A. Buric reminds us: “A segment of our industry will also continue to cater to lower income individuals, providing necessary housing to those who might otherwise be unable to afford decent housing. While many outsiders tend to bash our industry and some of its low end housing, the reality remains that such communities are an economic necessity and provide housing to individuals who could not otherwise afford a decent place to live.” How many times do we forget that perennial truism?

Here’s where & how I think MHCA can improve on this project, in the event they decide to perform this valuable service for the manufactured housing industry next year.

• Decide on a theme, like you did this time around, but solicit a more heterogeneous group of writers. While MHCA is a land lease lifestyle community owners’ trade association, only two of the nine articles are authored by 1) a bona fide LLLCommunity owner; and, 2) owner of a highly respected fee management firm specializing in this unique, income – producing property type. In my opinion, half the articles should be written by community owners/operators and HUD – Code home manufacturers. The other half? Industry advocates again, and certainly representatives from the chattel and real estate – secured finance (mortgage) segments of the manufactured housing industry.

• Hire a proofreader and content editor to polish all submissions! There were grammar, word choice, spelling, and punctuation issues within every article, e.g. missing commas, too many ‘that’ words, etc.. Also consider terminology alternatives and give writers an Approved List to use. In this year’s debut pub, nine variants were used to describe our unique, income – producing property type: ‘communities’ (Here Haney & Buric have the right idea); manufactured home community; manufactured housing community; parks; land lease lifestyle communities; and, one writer used three variants interchangeably: MH Communities, Land lease MHCs, and MHC’s. And, in my opinion, drop the use of ‘dealer’ next year in lieu of independent ‘street’ MHRetailer, and maybe ‘company stores’ (to differentiate manufacturer – owned sales centers from the former). Also prefer use of ‘resident’ and or homeowner/site lessee instead of tenant, and rental homesite or site, instead of lot, pad, stall, or worse.

• And there will be missteps, no matter how careful one parses, that slip by unnoticed. For example; in the MHARR piece, this statement is made: “What is needed…is dedicated, independent, national representation of the post production sector to effectively advance its’ interests in the nation’s capital (sic) – working in cooperation with the (home) producers’ national representation….” (author’s underlining) This is an obvious call for national advocacy association reorganization. Yet, when given an opportunity to advance said cause, two months after those lines were penned, the author waffles, claiming a subsequent change in priority.

Know what MHCA’s ‘The Future of Manufactured Housing’ issue reminds me of (excusing the dangling participle)? How ‘years ago’, the short – lived slick print trade publication, Community Management, prepared and distributed an annual compendium of Best Articles Published That Year, including some new material, regarding all aspects of (then) manufactured home community ownership and management. And there’s an interesting coincidence to be found in that comparison: both publications were researched and prepared by manufactured aficionados domiciled in Arizona!

III.

MUSINGS

Originally thought it was just me, but have since learned there’re many ‘skin in the game’ businessmen and women around the country who observe and think similarly about contemporary issues, disturbing trends, and more; all affecting the manufactured housing industry and land lease lifestyle community asset class. In no particular order or priority or emphasis, here’re those we’ve been seeing and pondering most of late…

Talking about ‘fair value propositions’, relative to homeowner/site lessees living in LLLCommunities, and enabling this to occur, is difficult if not impossible to ensure, when the property owner/operator touts a Maximize Profitability business model (i.e. ‘maximize – rental – income & minimize – operations – expenses’). Bottom line? Either enable ‘fair value propositions’ for one’s homeowner/site lessees, or stop boasting about the matter among your peers!

The sad disconnect, between word and deed, by national elected leaders talking ‘industry unity’ out of one side of their mouth; yet through inaction, encouraging the birthing of at least one, if not two, new national, not for profit manufactured housing – related trade bodies. Can’t help but recollect a similar scenario in 1985, when a group of disenchanted HUD – Code home manufacturers split from the Manufactured Housing Institute to form the Manufactured housing Association for Regulatory Reform. Paraphrasing a pair of oft – quoted, and related, aphorisms: ‘Those who fail to learn from the errors of their past, are likely to repeat them; and at greater cost, the second time around.’

The ol bugaboo of family leadership slippage, usually between first generation entrepreneurs and their adult children, when risk – taking and passion often wane in the face of business school acumen, fuzzy OJT, or some other supposed leadership education by osmosis. Time in the military, especially as a junior officer, oft helps here; unfortunately, most today do not go that route. A solution? Too little too late for many of you, but ‘Cut em loose for a year or two’, then see if they come back around, 1) more appreciative of their family’s business heritage, and 2) ready to be passionate, risk – taking, responsible business leaders! Of course, ‘the downside(?) risk’ is they find career fulfillment elsewhere and don’t return. I twice learned that lesson, first as a son, later as a father. But know what? In retrospect, I’d not have the matter evolve any other way….

Would be trade journalists unable to move beyond ‘throwing enough stuff against the wall – to see what might stick’, should focus attention and effort on business topics their prospective readers need and desire to see and learn, and less on opinion and editorializing, in print and online. Unfortunately, it appears the trendy need for ‘immediate gratification’, in all areas of life, has supplanted good old fashioned research and word smithing before publishing!. But there’s an opposite extreme as well. Trade columnists writing for pubs that boast of ‘using writers to fill white space among ads’. Geesh. How many ways can a columnist describe, over a period of 20 years, ‘HOW TO install skirting on a manufactured home’? Maybe that’s why readership is down.

How pimping a present day business relationship – or a potentially profitable relationship foreseen in the future, can trump doing the morally and organizationally right, albeit difficult thing to do today, given one’s position as an elected leader of a national body. But as they say, ‘What goes around comes around’. Just sad to say; it’s already happened on our watch.

IV.

2013, a Breakout Year? Maybe if…

Attention all C.A.S.H. Program Aficionados! As you’ll soon read in the 24th annual ALLEN REPORT, January 2013 marks the one year anniversary of the birthing of 21st Mortgage Corporation’s bold, symbiotic, new home purchase and chattel finance program; you know, the one that’s WOW – WOW – WOW for our home buying/site lessee customers, the land lease lifestyle community owner/operator, and the mortgage finance firm!

Well, a number of land lease lifestyle community owners/operators, knowing Spencer Roane, MHM®, David Funk, MHM®, and I, this time last year, worked with Matt Kerlin and Lance Hull, of 21st Mortgage Corporation, to establish the basics of 21st Mortgage Corporation’s exciting C.A.S.H. Program, have been inquiring about the possibility of getting together and talking about the progress, Lessons Learned, and more, during the Louisville MHShow in KY, during 23 – 25 January 2013. Informally, several of us have agreed to attempt to do so. So, to express ‘your interest’ in being part of an informal get together, contact Spencer via (678) 428-0212. We already know of C.A.S.H. Program users coming in from both coasts, as well as from throughout the Midwest.

And get this, learned just this week of yet another new chattel finance program is in the offing, maybe even during the aforementioned Louisville MHShow! This one, modeled somewhat after the C.A.S.H. Program, does not require $ participation by the LLLCommunity owner/operator, and applies only to lease – option and true lease agreements, relative to new and resale homes sited within LLLCommunities! Watch this weekly blog for further details. And if you see me at the MHShow in Louisville, ask me for more information then….

Will year 2013 be a breakout year for HUD – Code manufactured housing? Depends on a number of factors, for sure; but with the appearance of new and exciting finance programs, like the ones just described (2012) and hinted at (2013), we’re close to being ‘on our way back’ to increased home shipment volume!

***

POSTSCRIPT.

The 24th annual ALLEN REPORT is in the process of being distributed to hundreds of Allen Letter professional journal subscribers nationwide! Will you be among those receiving this seminal document during the next couple weeks? If not a paid newsletter subscriber (only $134.95/year), phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 today to subscribe. OR, buy single copy of ALLEN REPORT for $500.00.

SPECIAL ANNOUNCEMENT.

If interested, and not already registered to participate in the POWER Networking Luncheon, at the Crowne Plaza Hotel in Louisville, KY, @ 11:30Am – 2:30PM on 23 January, either phone the above – referenced MHIndustry HOTLINE; or better yet, print off the attachment to the BEBA (Blast Email Blog Alert) bringing you this posting, complete it and FAX it back to us ASAP via (317) 346-7158. Why is all this So Important? Because we expect to attract 75+/- land lease lifestyle community owners/operators to attend the Louisville MHShow for the very first time – to see Community Series Homes (or CSH Models) on display, and visit dozens of supplier booths, the afternoon after the luncheon and all day on the 25th of January. How can YOU not want to participate in this multipurpose occasion and event?

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

Blog # 227 Copyright 2013 6 January 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.

EXQUISITE CORPSE

II.

Inquiring Minds Would Like to Know

***

I.

EXQUISITE CORPSE

Recently, while researching party games, bar tricks, brain teasers, and other amusements, I came across a poetry game titled ‘Exquisite Corpse’, intended for three or more players.

It goes like this: ‘Each player writes an article and an adjective on a sheet of paper, then folds the paper in half, to cover the two words. Players exchange folded papers, unfolding the one received, and adding a noun to the paper before refolding it. Players repeat the procedure (exchanging folded papers), adding a verb; then again, with yet another article and adjective. And the next exchange involves adding yet another noun. Players exchange papers one last time; with each one reading aloud, to the general bafflement of everyone: the ‘article, adjective, noun, verb, article, adjective & noun’ written on the paper just received!’ From The Dictionary of Wordplay, by Dave Morice, Teachers & Writers Collaborative , NY, 2001, page # 68.

What got my attention about this game, besides it being a creative writing exercise, was the unintended, but near unmistakable, not so funny parody (usually a ‘humorous imitation’) of the manufactured housing industry, late in the 20th Century, and now, early in the 21st Century.

It goes like this: ‘Three or more HUD – Code home manufacturers independently design, build and ship lines of new homes, with little to no market research input from prospective homebuyers in local housing markets where the homes are to be sold. (This is, by the way, how the industry ‘keeps score’, by counting the number of new homes ‘shipped’ rather than ‘sold’ beforehand). They then maybe make adjustments to these home designs, and how/where they’re marketed, based on perceptions that may or may not have basis in reality and or practicality, e.g. the land – and – home package (i.e. ‘big boxes = big bucks’) debacle of the late 1990s; followed by a supposed ‘return to the roots of affordable housing’ (i.e. ‘smaller boxes = smaller bucks’); even the Community Series Homes or CSH Models wavelet of the past five years, to whet and feed the appetite of land lease lifestyle community portfolio owners/operators for new homes, to fill their share of an estimated 250,000 vacant rental homesites nationwide. The ‘exquisite corpse’? A mishmash of home designs and local marketing ploys, based on the creativity and perceptions of said home manufacturers, more so than the ‘needs& wants’ of the customers they seek to sell and serve!

Proof? When was the last time you saw a 30 second ad on any major TV network during prime time, advertising any manufactured housing brand of home construction? It simply doesn’t happen in our line of work, sad to say.

Of course, the often debated role – or absence of, chattel (personal property) finance, since the turn of the Century, also plays a critical role in the word picture painted in the previous paragraph. And, if interested, you’ll find a succinct, comprehensive commentary on that very topic, in the soon to be released (January 2013) 24th annual ALLEN REPORT.

Want to obtain a copy of the 24th annual ALLNE REPORT, a.k.a. ‘Who’s Who Among Land Lease Lifestyle Community Portfolio Owners/operators Throughout North America!’? Well, it’s FREE with your paid subscription to the Allen Letter professional journal ($134.95/year = 12 monthly issues – each containing a different but valuable Signature Series Resource Document, e.g. annual National Registry of RE & Chattel Lenders, ‘Who Ya Gonna Call? List of Freelance Consultants’, etc.); or, for $500.00 per standalone copy. To order, simply phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. By the way, this year’s 24th ALLEN REPORT also features a first time ever published list of ‘25 of the Most Influential Individuals in the Manufactured Housing Industry & Land Lease Lifestyle Community Asset Class’. All named individuals were recommended by their peers!

II.

Inquiring Minds Would Like to Know…

Questions that might not yet be keeping us awake at night, but ones that do make us routinely wonder, ‘Is anyone listening?’:

As many prepare to attend this year’s series of manufactured housing shows in Louisville, Tunica, and elsewhere, The Question that begs answering is this: ‘Given the real need (i.e. an estimated 250,000 vacant rental homesites in land lease lifestyle communities throughout the U.S.), and existence of Community Series Homes (a.k.a. CSH models, designed for in – LLLCommunity siting) from most major HUD – Code home manufacturers, WHY do the majority of new homes on display at said shows continue to be ‘big box = big bucks’ Development Series Homes that, in part, helped bring the manufactured housing industry to its’ knees, annual shipment count wise, at the turn of the 21st Century? That’s 13 years ago, and we still haven’t ‘changed our stripes’, nor have annual shipment numbers of new homes built, improved one iota. Why?

National Advocacy. ‘Are we getting our money’s worth?’ – dues and PAC Fund wise, by continuing, after 27 years, to support two somewhat overlapping national, not for profit, manufactured housing trade entities in and near our nation’s capitol? This is not, by any means, the first time this vital question has been raised from and among the businessmen and women grassroots of the HUD – Code manufactured housing industry. Or, ‘is there a better way’ on the horizon? Possibly, one overarching national body, Advocating the interests of all segments of the MHIndustry, including the land lease lifestyle community realty asset class; or two: one representing all HUD Code manufactured housing production & distribution segments of the industry; another representing all the real estate development and investment – related segments. Hmm?

Given the unique nature and circumstances of 21st Mortgage Corporation’s C.A.S.H. Program, (i.e. filling vacant rental homesites in land lease lifestyle communities with Clayton Homes purchased and mortgaged by 21st, in partnership with the property’s owner/operator) when will other independent, third party chattel finance firms (e.g. Triad, CU Factory – built Housing, & U.S. Bank – Manufactured Housing Finance) roll out similar LLLCommunity – friendly programs? Ask them!

Another question, related to the topic in the previous paragraph, has to with your firm’s chattel lending program, on – site and otherwise. Is it fully compliant with today’s plethora of onerous financial regulatory measures, e.g. relating to the S.A.F.E. Act, Dodd – Frank Legislation, AML, and more? As most already know, there’s ‘only one game in town’, at present, to teach manufactured housing – related compliance, and that’s via Rishel Consulting @ (217) 971-3968. Believe me; I wish there were additional credible resources to mention here. If there is, let me know via the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or gfa7156@aol.com

Has the time arrived to seriously consider founding a national captive insurance entity for land lease lifestyle community owners/operators? If so; or even ‘if not’, let Jay Zandman know of your interest, so as to be ‘first in line’ if and when that time arrives: (800) 211-0468 X 117 or jayz@manning-nozick.com.

When will 21st Mortgage Corporation’s C.A.S.H. Program be opened to other HUD – Code home manufacturers? It’s believed this would enhance the program’s attractiveness to land lease lifestyle community owners/operators with longstanding home manufacturer relationships elsewhere; and, be an obvious nod to ‘inter – manufacturer cooperation and, by extension, Industry Unity’. By the way, if no one has contacted you regarding you participating in the C.A.S.H. Program, let Lance Hull know via (865) 523-2120 X 1218, or email him your LLLCommunity information & needs: LanceHull@21stMortgage.com

When will the HUD – Code manufactured housing industry provide its’ homebuying customers, particularly those living in homes sited within land lease lifestyle communities (i.e. as site lessees), a viable secondary market, replete with market comparable valuations of their homes, a real time means of marketing and selling these homes, escrow closings, even the presence of trained and licensed professional sales staff? This question, like a few before it (e.g. national Advocacy and captive insurance) should be routine fodder at periodic national MHInitiative® gatherings of businessmen and women, paying their own way, to have a role shaping and effecting national policy and issues such as: viable secondary market, advocacy, captive insurance, and more. Which, of course raises this question: ‘When will MHIndustry leaders finally, for the first time since National State of the Asset Class caucuses (predecessor to MHInitiative® concept) were held in Tampa, FL. on 2/27/2008, and in Elkhart, IN., on 2/27/2009? What will YOU be doing on 2/27/2013? That’s one day after MHI’s annual Legislative Conference, in Arlington, VA., ends. Hmm. Would YOU be willing to remain there an extra day to raise, parse, and address some of the questions posed here, and others as well? I sure would! If you agree, phone our salaried national leaders at MHI: (703) 558-0678 or 0666; and, MHARR @ (202) 783-4087. Leave a message if necessary….

Why aren’t more owners/operators of small to mid – sized land lease lifestyle communities buying and seller – financing new HUD – Code homes on – site? Possible reasons: new homes priced too high for the local housing market (This is where home manufacturers need to learn, using Annual Gross Income & Annual Median Income figures, to calculate ‘affordable’, even ‘risky’ Price Points, on homes going into specific – defined by postal zip code – local housing markets!*1); real concerns about being compliant with the S.A.F.E. Act and other related finance regulatory measures; too much trouble ‘being all things to all people’, e.g. wholesale home buyer, marketer, seller, and seller – finance source; unfamiliarity with other options (e.g. lease – option, even leasing of homes as apartment units); and that rare, good working relationship with a local independent ‘street’ MHRetailer willing to sell new homes into LLLCommunities.

How can we, as an industry and realty asset class, effectively attract more private investors, interested in safe investments with yields attractive to them, as well as to land lease lifestyle community owners/operators, and our actual homebuyers?’ Perhaps this pithy question has a two-step answer. First; as a realty asset class, we must provide access to well – constructed Community Series Homes affordably priced, properly installed on fully serviced rental homesites in LLLCommunities owned and managed by individuals and firms committed to providing an ‘attractive value proposition to homebuyer/site lessees via rent rates in line with what the local housing market indicates’. AND secondly, perhaps the time has arrived (for us?) to create a new, national fund, to finance the purchase of new CSH model homes by reputable, qualified LLLCommunity owners/operators (i.e. Similar to existing P2P & P2B internet lending platforms). If you’re reading this, and are excited about the prospect of creating such a fund, contact Spencer Roane, MHM® via spencer@roane.com or via (678) 428-0212.

And the final questions of the hour are these: Are you, or your firm, direct, dues – paying members of the Manufactured Housing Institute (‘MHI’) and or its’ National Communities Council (‘NCC’) division, both Advocating in behalf our MHIndustry and the land lease lifestyle community realty asset class? If the answer is NO, then phone (703) 558-0666 in the first instance; and (703) 558-0678 in the latter instance, to converse with Dick Jennison and Jenny Hodge respectively. Tell ‘em ‘George sent me!’ And, if you’re reading this, and are a LLLCommunity owner/operator, and interested in the rare opportunity to be a Charter Member of the Manufactured Home Communities Association of North America, or MHCA in short, simply phone the aforementioned MHIndustry HOTLINE, and provide your contact information. Remember, the new, not for profit MHCA is being launched to continue the ‘statistical Research & comprehensive Resource servicing’ of land lease community owners/operators nationwide, and maybe Canada; services heretofore provided by GFA Management, Inc., dba PMN Publishing. NOTEs. It’s hoped and planned the MHCA will effectively complement national Advocacy efforts of and by MHI, as long as one group of NCC members (e.g. largest property portfolio ‘players’) don’t preempt legislative and regulatory concerns of small to mid – sized owners/operators of land lease lifestyle communities. And, if you’re wondering ‘Why didn’t MHI absorb aforementioned ‘statistical Research & comprehensive Resource servicing’ of LLLCommunities when given the opportunity, on two separate occasions? Ask them, when you phone to join as a direct, dues – paying member.

End Notes:

1. Easiest & best way to calculate ‘affordable’ & ‘risky’ Price Points for new & resale homes, of any type, to be sited within or outside LLLCommunities, is to use the ‘Ah Ha! & Uh Oh! Worksheet’, available FREE upon request, by phoning 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, Indpls, IN. 46247
(317 346-7156

Blog # 226 Copyright 2012 30 December 2012

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

I.

Don’t Take Good Leadership for Granted!

II.

Kudos Continue to Arrive in Support of Forming MHCA

III.

There’re Some Pretty Bright Thinkers & Doers Out There..

***

I.

Don’t Take Good Leadership for Granted!

‘Yes, I’m as guilty as the next guy or gal, taking good leadership for granted, at all levels and among a wide variety of firms that comprise various segments of the HUD – Code manufactured housing industry.’ It only occurred to me recently, how far astray some self – proclaimed, a few elected, even salaried leaders, routinely drift from core values and performance measures generally associated with good leadership practice.

How do I know? We see and read sorry examples all the time; in our trade press, during business meetings at state and national levels, and elsewhere.

But first, as a matter of credentialing; I’ve enjoyed two simultaneous leadership rich and demanding roles, of 28 years and 33 years duration respectively; as an officer of U.S. Marines, experiencing combat tours of duty in the Republic of Vietnam and during Desert Storm; and am now winding down more than three decades of responsibility as a senior salaried executive, entrepreneur businessman, real estate investor and manager, book author and newsletter publisher. There’s no way I’d have achieved significant successes throughout two parallel careers, without having early learned, and long applied, honorable core values and performance measures generally associated with good leadership.

Now, back to the self – proclaimed, a few elected, even salaried leaders who, in this industry reporter’s opinion, ‘based on firsthand observation & reading what they’ve penned’, are at times, selling would be clients, serious readers, and others, a ‘bill of bogus goods’ based on whimsy, ‘less than as successful as claimed past results’, even seat – of – the pants rhetoric. The sad thing is, some manufactured housing industry aficionados and land lease lifestyle community owners/operators, have bought into these bogus goods, for a time; some out of naiveté’; some out of supposed peer pressure; and still others, unaware of likely consequences of bad leadership.

Where to find examples of marginal and poor leadership? Easiest, is probably within one or another of the print and online trade publications making their way to our mailboxes and computers every month. Next time you pick up one of these media, and read the columns therein, study what the writer has to say; then ask yourself: ‘OK, I read what you write, but just how has this advice played out ‘successfully’ in your own experience, over the years, as a businessman or woman?’ Or, if unsuccessful, ‘Have you learned from your mistakes?’ Furthermore; ‘If you’re a leader, even a ‘thought leader’, I should be following, ‘What is your regional or national platform’, where I can find you, to listen and observe firsthand, business and leadership principles you espouse and (hopefully) practice?’ In my experience, more often than not, some of the self – proclaimed leaders aspire more to the misleading ‘Do as I say, not as I do!’ mantra, rather than simply setting a good, solid, verifiable example for us to emulate and follow. So, Be Careful Out There; what you read, might be leading you down the wrong leadership path.

Then there’s the body politic, within and throughout our industry and realty asset class. Here we find elected and salaried leaders who (at least should) aspire to espouse good core values and performance measures (results). And know what? For the most part, we do generally see more positive leadership than negative; and that’s a good thing. But leadership position voids (over time); round pegs hired to fill square holes; and worst of all, junior execs wearing their superior’s (boss’s) ‘rank’ in arrogance, are examples of marginal to faux leadership, on the association level. And then there’s that rare occasion, when elected officer(s) take it on themselves to publicly attack or chastise other association members, without notice or documentation, and without providing opportunity for their victims to rebut. That’s among the grossest examples of poor leadership – compounded in the eyes of other members, when the host body does nothing to rectify the sorry matter occurring on their time and in their locale, but simply passes the buck.

And did you know, there’s an unproven, but hard to miss, tip – off to identifying marginal or soft leaders? Here goes. It involves the trend, among frequent emailers, to end messages with a favorite or apt quotation, usually from some famous – or at times infamous, personage. And as far as it goes, it’s not a bad idea, and the practice can even convey meaning, if not overused. For example; if I were inclined to do so – which I’m not – my choice would be a tossup between this line from an old hymn, stenciled on my helmet in 1968: ‘Where Duty Calls or Danger, Be Never (found to be) Wanting There.’ Or that ol ‘6-P Rule: ‘Proper Prior Planning Prevents Poor Performance!’

But know what? The wanna be leader, one who has yet to find his or her path to good leadership, via core values and performance measures, often appends several, sometimes related, but often disjointed quotations, from a variety of individuals, to his/her correspondence or writings. My guess is they hope the reader will equate them with the substance of their selected quotations. Not. In a recent extreme example, I counted no fewer than a dozen mishmash of quotations accompanying a single piece of written communication.

This commentary regarding leadership brings to mind a short poem, author unknown, shared ‘years ago’, by Craig Fulmer, chairman of the board, of Heritage Financial (LLLCommunity portfolio owner/operator), and featured on page # 27 of the Chapbook of Business & Management Wisdom, PMN Publishing, Indianapolis, IN., 2008 (3rd ed.) An appropriate way to end this challenge to not take Good Leadership for granted.

‘I’d rather see a sermon, than hear one any day;
I’d rather one would walk with me, than merely show the way.
The eye’s a better pupil, and more willing than the ear;
Fine counsel is confusing, but examples’ always clear.’

Just how important is good individual leadership? Here’s an insightful passage from Robert Rosen & Paul Brown’s book, Leading People: “With a net worth estimated at $250 million, Malcolm Forbes was frequently asked how he decided where to invest his own fortune. His answer never varied. ‘I bet on the jockey, never the horse…I don’t need to know what industry the company is in, or what its’ financials are. All I need to know is what kind of person the CEO is.” (p.283). This quoted from the Handbook to Leadership, by Kenneth Boa, Sid Buzzell, & Bill Perkins (2007); a 52 week collection of readings on various aspects of leadership. Available via kenboa.org

***

II.

Kudos Continue to Arrive in Support of Forming MHCA

“I truly appreciate your commitment to our (MH) industry, and will be supportive of your efforts going forward. It’s unfortunate the national association doesn’t see the merits of your work. Perhaps this ‘not for profit spin-off’ is the best way to take this issue (of ‘statistical Research & comprehensive Resource Servicing’) on. I have no loyalty to the national circus, so will back you to the furtherance of this agenda.” MC

“As long as you find it rewarding and enjoyable, you will be able to do it forever, with glee, and die in your boots, like a real man, to whom we are all humbled; and I am not being facetious or sarcastic. There is no doubt you have set the stage for the future, and have made historical contributions to the industry. Hard to walk away from that and quite possibly, counter productive. It would be terrible (for you) to retire too early and watch the diminishing of your efforts because idiots took over the cause.” KH

“One thing we shouldn’t forget, is a code of ethics, and procedures which all MHCA members agree to operate under. For example, 1) not directly soliciting the residents of another land lease lifestyle community owner/operator, 2) and treating lenders like we would like to be treated ourselves.” PC

“Honestly – I think you’re right launching this new organization, George. We have waited and asked and shouted for strength and unity among the independent ‘street’ MHRetailers, manufacturers, suppliers, financiers, and LLLCommunity segments of our industry without result. Time to move on and win!” NB

***

III.

There’re Some Pretty Bright Thinkers & Doers Out There…

The following three short, lightly edited paragraphs, came to me in the form of an email message from a successful manufactured housing entrepreneur businessman, with more than 30 years owning and operating his own ‘for profit’ entities. Pay close attention; there’s some pretty pithy thinking here…

“I think our (HUD – Code) industry continues to struggle with a market identity problem. While tempting, even glamorous, to suggest our ‘big box = big bucks’ housing product (a.k.a. Developer Series Homes) continue to compete with site – built housing, despite zoning restrictions, modular homes, low – end site built models, foreclosed on homes, lending regulations, and tightening lender credit, make that a really rough row to hoe. The less glamorous, more competitive, affordable, manufactured housing alternative (e.g. inexpensive multisection, & 16X80 singlesection models) sited in land lease (lifestyle) communities (with site rent in sync with the local housing market), has a far better chance of success, than continuing to fight battles we’ve been losing for years!”

“I don’t agree with a lending executive’s recent warning to be wary of ‘the same customers who led us into this $ mess’. What got us into this $ mess was: mortgage fraud, fabricated income, false credit claims, fictitious down payments, lenders more focused on selling to the CMBS market than making sound loans, and long – range planning that was anything but. Like site – built housing today, we’ll continue to struggle until we convince investors they can, and will, make money by trusting us to treat them like we’d like to be treated. On that account, I’m afraid we still have a long way to go.”

“I continue to think 21ST Mortgage Capital’s CASH program is a definite step in the right direction, being a symbiotic relationship between LLLCommunity owners and chattel lenders, and certainly a no – brainer from the home buyer’s point of view. But seeing how much of the marketing and processing burden is on the owner/operators, specifically the difficulty communicating benefits of the program to would be home buyers, this continues to hold the program back from achieving its’ full potential.” SR

See what I mean? Sage observations and reasonable suggestions like these, should be receiving max attention on the national scene of our ‘double dual industry’ (i.e. ‘home manufacturing/distribution & realty development/investment’). Other than what you read here, or in Ken Rishel’s fine online finance newsletters, and in the Allen Letter professional journal, or the Allen CONFIDENTIAL! business newsletter, where else do you find heady topics presented, parsed, and planned into the future of HUD – Code manufactured housing and land lease lifestyle communities? It simply does not happen; despite the fact we have two national trade bodies claiming to Advocate in our behalf.

Proof? Ask yourself; When was the last time either Advocacy body called for a national MHInitiative® type strategic planning meeting, where businessmen and women from across the U.S., would participate at their own expense, to seek new and pragmatic solutions to the inherent barriers to increased housing market share – demonstrated by five years of HUD – Code housing shipments at a 60 year nadir? Why hasn’t this Survival effort happened? Ask them, next time you send in your annual membership dues check!

***

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 # 225 Copyright 2012 23 December 2012

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

I.

Is History About to Repeat Itself During Year 2013?

II.

Manufactured Home Communities Association of North America

III.

REMINDER!

IV.

Duke University Discovers MHIndustry & LLLCommunities….

***

Pay careful attention to what you read here today. No one else in the manufactured housing industry, nor any other land lease lifestyle community owner or operator, will be as candid and forthcoming with you, as that which you are about to learn and ponder…

***

I.

Is History About to Repeat Itself During Year 2013?

In matters politic, business, social and otherwise, power is the operative word. And power is measured in many ways; as in votes, dollars, influence and otherwise. Power can be well applied to achieve a greater good, but it can just as easily be subverted to wreak harm, even dissipated to the point of marginalizing one or something into powerlessness.

The HUD – Code manufactured housing industry has been down this power to powerlessness path before. In 1985, I’m told, smaller, regional home manufacturers split from the Manufactured Housing Institute, or MHI, at least in part, because they felt the direction and future of the industry, particularly where HUD – Code related regulatory matters were concerned, was being powered by a few, much larger home manufacturers. Result? Formation of the Manufactured Housing Association for Regulatory Reform or MHARR. To this day, both entities continue to Advocate in behalf of HUD – Code manufactured housing; the former, from offices in Arlington, VA.; the latter, in downtown Washington, DC.

Have these two HUD – Code manufactured housing Advocacy bodies worked well together during the past 17 years? Generally no; though at times, they’ve sought and found common ground, when it came to supporting or opposing specific legislative initiatives and troublesome regulatory issues. One of the clearest and enduring examples of their cooperation, even with its’ downside, was the joint effort to effect passage of the Manufactured Housing Improvement Act of 2000. Its/ downside? The act is still far from being fully implemented; in part – per this industry observer’s opinion – because the two national Advocacy bodies have been unable to ‘power’ effectively together, to get the job done, even after 12 years!

Is MHIndustry unity (Think enhanced power!) on the horizon for year 2013? The chairmen of both national Advocacy bodies seem to think so; but given numerous past false hopes and failed efforts, only the passage of time and tangible results will tell us for sure.

In the meantime, MHARR continues, unofficially, to press for reorganization of various segments of this ‘double dual industry’ (i.e.‘home manufacturing/distribution’ & ‘realty development/investment’) whereby all HUD – Code home manufacturers, large and small (And possibly their OEM suppliers, and maybe ‘company stores’; which begs this question: Who’d Advocate for independent ‘street’ MHRetailers?) would be represented by one national Advocacy entity; and the remaining segments, by another national Advocacy entity (Thinking finance, and maybe land lease lifestyle community owners/operators here; but – again wondering, ‘Who’d Advocate along with, and in behalf of, state manufactured housing associations?’). But wait! Given the recent past, present and continuing depressed state of the industry (e.g. annual home shipments at a 50,000+/- 60 year nadir for the past four or more years!), with no sub prime chattel finance capital relief in sight, some have likened this bold reorganization idea, to ‘rearranging deck chairs on the Titanic after it hitting the iceberg and starting to sink’.

So much for the manufacturing side of the house. How ‘bout expectations, during year 2013, where land lease lifestyle communities’ present and future are concerned?

Their back story is fairly well known. A group of 19 (then) manufactured home community portfolio owners/operators gathered on 31 August 1993, in Indianapolis, IN., to eventually form an ad hoc Industry Steering Committee or ISC. Following a series of meetings and dues collection, by year 1996 (January), MHI formed the National Communities Council or NCC – since granted full division status by the institute. Like MHI, the NCC division has been, and continues to be ‘the national Advocate’ for land lease lifestyle communities, and their owners/operators nationwide.

But wait – again. Here too, there’s at least one elephant – the first one by historic comparison – ‘in this room’ (i.e. Segment of the MHIndustry). Remember how the big versus small HUD – Code home manufacturer matter played out, as just described, in 1985? Well, some fear a similar scenario might be in the offing, where ‘big & small’ land lease lifestyle community owners/operators are concerned. How so? While there’s an acceptable ‘size mix’, among present day, direct, dues – paying members of the NCC division, all elected and ‘appointed’ members of its’ executive committee hail only from among the Top Ten largest LLLCommunity portfolio owners/operators listed in the last several ALLEN Reports! And the second elephant? There seems to be a communications shortfall to boot. Only once since the NCC council’s last meeting, 8 October 2012, – and then, in the form of a newsletter, has communication gone out to all members, relative to what and how, as LLLCommunity owners/operators, we should be planning for the upcoming year 2013. And in one instance, a direct, dues – paying member submitted a list of recommended agenda items for the council’s next meeting, in late February; but to date, has not received even an acknowledgement of receipt of said correspondence, let alone the agenda suggestions. Any elephant hunters reading this?

During all this time, since 1980 when it was founded, GFA Management, Inc., dba PMN Publishing, a ‘for profit’ firm domiciled in Indianapolis, IN., has handled the statistical Research & ‘comprehensive Resource servicing’ of land lease lifestyle communities and their owners/operators nationwide. Today, faced with the probable closing down of the firm by year end 2013, an alternative vehicle, to perpetuate print and online communication media, professional property management education and certification, national and regional interpersonal networking, and deal – making opportunities, is sorely needed.

The plan is for a Manufactured Home Communities Association of North America, or MHCA in short, to take on those responsibilities and tasks, as a new, not for profit, national entity. Furthermore, it is hoped the work of MHI’s NCC division, with its’ sole Advocacy focus, will be complemented by MHCA’s emphasis on statistical Research & ‘comprehensive Resource servicing’. And at some point in the future, when the Center for Manufactured Housing Studies, or CMHS – formed during 2012, is ready, ‘academic research’ in manufactured housing, land lease lifestyle communities, and affordable housing, will become their standard fare, allowing MHCA to focus on Resources needed and desired by LLLCommunities nationwide, and maybe in Canada.

Back to the power and powerlessness theme voiced in the opening paragraph of this essay. In light of the content of the preceding paragraphs, three similar – but in the end, very different pivotal questions beg answering, and the sooner the better:

Will the HUD – Code manufactured housing industry and land lease lifestyle community asset class be best served, by further dissipating national lobbying presence and ‘power’ among four, eventually five, national, not for profit entities: MHARR, MHCA, MHI, & MHI’s NCC division (Right there we see three Advocacy bodies and one Research/Resources entity, but not in that order). And in time, there’ll be a fifth, the CMHS – not really an Advocate, but still to be, a national presence and ‘power’ – by dint of its’ dividing LLLCommunity Research & Resources responsibilities. The answer???

OR

Will the HUD – Code manufactured housing industry and land lease lifestyle community asset class be best served by consolidating presently disparate lobbying ‘power’ into one overarching, all – inclusive national, not for profit Advocacy body yet to be formed or identified??? And if this mega – merger comes about, in the name and interest of enhanced national Advocacy, what becomes of ongoing statistical Research & ‘comprehensive Resource servicing’ enjoyed by land lease lifestyle community owners/operators for the past 33 years? Does the new entity do what present ones have been unwilling to do; assume responsibility for ongoing statistical Research & ‘comprehensive Resource servicing’ for LLLCommunity owners/operators nationwide?

OR

Will the HUD – Code manufactured housing industry and land lease lifestyle community asset class be best served by reorganizing as many as four or five disparate national lobbying ‘powers’ into ‘only two’ new, national, not for profit entities; one being a solely ‘housing – focused’ Advocate; the other, a ‘realty – focused’ national Advocate, statistical Researcher, and ‘comprehensive Resource purveyor’???

A helpful hint! This quote from Woodrow Wilson describes our industry; and by default, its’ realty asset segment, in terms of past, present, and future power perspectives: “As a matter of fact and experience, the more ‘power’ is divided, the more irresponsible it becomes.” Substituting the words ‘ineffective’, ‘counterproductive’, even ‘divisive’, in lieu of ‘irresponsible’, aptly describes ‘what we’ve done to ourselves’ during the past 27 years of national Advocacy presence and powerlessness in our nation’s capitol. So, will year 2013 hold, for us, ‘more of the same’; or a reorganization that restores and enhances, rather than saps our collective power?

***

II.

Manufactured Home Communities Association of North America

Steps are being taken to legally form the new, national, not for profit entity, to be known as the Manufactured Home Communities Association of North America, or MHCA, for short. There are a few legal hurdles to be cleared during the next 30 days. It’s hoped a meeting of some, if not majority, of the Pioneers of 2012, will occur during the Louisville MHShow in Kentucky, on 24 January 2013.

Who’re the Pioneers of 2012? They’re an ad hoc group of land lease lifestyle community owners who volunteered, during early 2012, to help market the products and services of GFA Management, Inc., dba PMN Publishing. We met once at Chuck Fanaro’s beautiful SaddleBrook Farms, in Grayslake, IL., and continue to stay in touch regularly, via various forms of correspondence. When it was finally (recently) realized there wasn’t going to be a ‘buyer’ of aforementioned products and services – all related to the statistical Research & ‘comprehensive Resource servicing’ of LLLCommunity owners/operators nationwide, attention refocused on launching the MHCA.

Watch here (weekly blog posting), as well as in the Allen Letter professional journal, for announcements relative to ‘How to Become a Charter Member of MHCA’, and what the array of membership benefits will include, e.g. newsletter subscription, FREE copy of 24th ALLEN REPORT (vs. $500/copy retail price), and much much more. If you’d like us to add your name to the list of individuals to be notified ‘first’ of this Charter Member opportunity, simply phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764, and ask for be so listed.

***

III.

REMINDER!

Reserved your copy of ‘Past as Predictor of the Future – or just another Crapshoot?’ yet? All you have to do is reach out to Sue Brenton, executive director of MHC of Arizona. Phone (480) 345-4202. Trust me. You don’t want to miss this expose’ of the MHIndustry and LLLCommunity asset class’ past, present, and future. It’s being published, during January 2013, in that state’s MHAssociation newsletter.

IV.

Duke University Discovers MHIndustry & LLLCommunities….

A Duke University professor, as I understand it, has been retained by a mainline publisher to research and produce a book describing the manufactured housing industry and land lease lifestyle communities. Deadline is sometime during the Summer of 2013.

In the meantime, the author’s research staff member, Ms. Reed Few, has been in touch with this industry observer, and others, and is now absorbing all she can learn about our unique ‘double dual industry’ (Described in part I of this blog posting). In fact, she participated in the recent symposium hosted by the Virginia Manufactured and Modular Housing Association, in Richmond, VA. There she met with 25 land lease lifestyle community owners/operators and several HUD – Code home manufacturer representatives, to learn more about the basics and nuances of our ‘most affordable of all factory – built housing alternatives’ as well as the unique, income – producing property type that caters to manufactured homebuyers/site lessees.

If you’re an Allen Letter professional journal subscriber, expect to receive an owner/investor questionnaire, enclosed as a lagniappe, from Ms. Few, in behalf of the book’s author. Please complete and return it promptly. To subscribe to the monthly newsletter, phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

By the way, this book is not the same one we told you about last month in this blog series. That one is being researched and authored by a MHIndustry veteran; this one by an academic.

Speaking of books. How many of you remember Ted Boers, founder of DATACOMP? If you do, you know he dropped out of sight a decade or so ago, to concentrate on helping Haitians as a Christian businessman missionary. Well, it’s been quite an adventure for Ted, with some pretty high spiritual peaks, as well as more than his share of deep valleys. He tells this story in the newly released Demons of Poverty, ‘One Entrepreneur’s Experience with Addressing Poverty in Haiti’. I just finished reading it, and will tell you this much here (a longer review will be published in an upcoming issue of the Allen Letter professional journal): It is one of the most unusual non – fiction books I’ve read to date! It has everything: facts, characters, story line, etc. But what I didn’t expect, was the near abject depression Ted had to overcome at one point in his work. And his list of Practical Lessons Learned, for those planning or attempting to ‘do business’ in an undeveloped country, is worth the $14.95 price of the case bound book! Order via Datacomp: (800) 365-1415 or, at only for $9.95, electronically, from amazon.com, barnesandnoble.com, or appleibooks.

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

Blog # 224 Copyright 2012 16 December 2012

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

I.

January 2013 = Dawning of a New Era for Land Lease Lifestyle
Communities Nationwide, maybe including Canada!

II.

Schwep, Schrader, & Smith Rules of Thumb;
and, How to ‘Sell More Homes & Lease More Sites’

***

I.

January 2013 = Dawning of a New Era for Land Lease Lifestyle
Communities Nationwide, maybe including Canada!

“Go MHCA!” was the typical response to last week’s blog posting, in which emergence of the Manufactured Home Communities of North America®, or MHCA®, was announced. Given the heavy volume and supportive nature of telephone and email responses, one has good reason to believe this new, national, not for profit body (Actually a conversion of ‘for profit’ GFA Management, Inc., dba PMN Publishing into a ‘not for profit’ entity) has tapped strong pent up demand for ongoing statistical Research & ‘comprehensive Resource servicing’, like that of other realty – based national trade bodies, like the National Apartment Association and Communities Association Institute.

Fourfold significance of January 2013. In brief; publication of the 24th annual ALLEN REPORT, as a lagniappe in the January issue of the Allen Letter professional journal; a ‘by invitation only’ POWER Luncheon for LLLCommunity owners/operators, during the Louisville MHShow on 23 January; first formal meeting of MHCA organizers; and, laying of preliminary plans for a MHInitiative® (formerly, National State of the Asset Class caucus or NSAC) event, likely to be held in early or mid – February 2013.

Here’s more information about each of these exciting Dawning of a New Era events:

• 24th annual ALLEN REPORT. All previous ALLEN REPORTs will pale in comparison with this one, relative to meaty content and cultivating new territory! For starters; the number of listed property portfolio owners/operators is down from 127 to 110. Why? In addition to losing a few non – reporting firms, we’ve removed ‘deadwood’ responders this year, yet added several new ‘players’ – one in particular: ‘Inspire Communities’. Furthermore; weekly blog floggers (readers) already know this year’s ALLEN REPORT features, for the first time ever, ‘25 of the Most Influential People in the Manufactured Housing Industry’ – all recommended by their peers! And there’s much more… If you’re an Allen Letter professional journal subscriber (only $134.95/year…for the time being), you’ll receive the ALLEN REPORT for Free; otherwise, it’s available at $500.00/copy. FYI. In months to come, this newsletter and report will become key MHCA member benefits!

• POWER Luncheon at 11:30AM, on 23 January, at the Crowne Plaza Hotel ‘across the street’ from the Kentucky State Fairgrounds. While invitations haven’t been mailed to Midwest LLLCommunity owners/operators yet, ‘reservations’ already approach our initial capacity of 50+/-; likely to be increased now, to 75. What’s to happen? Likely a brief ‘after luncheon’ presentation, followed by three simultaneous Discussion Groups dealing with Regulatory Compliance Issues; the Lease Option alternative; & ‘How to Collect 100% of Your Site Rent!’ And maybe: ‘Calculating New & Resale Home ‘affordable’ & ‘risky’ Price Points, using Annual Gross Income & Area Median Income…’ This event will conclude around 2:30PM.

• Meeting of MHCA organizers. There’s been an ad hoc working group, of a couple dozen LLLCommunity owners/operators, in place during 2012 – helping GFA Management, Inc., dba PMN Publishing find a buyer or successor. Results? No buyer, but a successor, the MHCA! Volunteers from this group are becoming leaders of the MHCA, giving the new, national, not for profit trade entity direction. As you’ll recall from previous blog postings and elsewhere, the MHCA was formed to Complement the National Advocacy focus of an existing not for profit body. Again, the dual foci of MHCA, for the time being, is ongoing statistical Research & ‘comprehensive Resource servicing’ in behalf of LLLCommunity owners/operators nationwide, likely including Canada. For the time being? That’s acknowledgement of the Center for Manufactured Housing Studies or CMHS, formed during 2012, which will likely assume the ‘statistical Research’ focus of MHCA, plus manufactured housing and affordable housing Research, at some point in the near or distant future.

• MHInitiative®. It’s this industry observer’s long held opinion cum conviction, the HUD – Code manufactured housing is long overdue – when it comes to engaging in open and strategic parsing, free – ranging discussion, and resolution of self – defeating business practices, inherent but unresolved intra and inter segment differences, and ongoing peccadilloes affecting homebuying and site leasing customers! Such a major, national effort takes time to plan and effect. So, in the near term, a call will go out to businessmen and women in all segments of the manufactured housing industry, to gauge their interest, and solicit their support, to meet during the Summer of 2013 to ‘do just that’: identify and address errant, self defeating business practices; ascertain how to better serve MH-related businesses at the ends of the size spectrum; and most important, rediscover our core customer base; and take steps, once again, to design, build, deliver, install, service, and warranty quality housing product! Frankly, such a national, mega – effort should originate with an existing Advocacy body – or two, already part and parcel to the business model! But will one or the other, or both, respond to an MHInitiative® opportunity to collectively regroup, refocus, and recover? Continue to read this weekly blog posting to see what, if anything, transpires to that end – in the way of response. At the very least, learn when and where the mid – February MHInitiative® planning session will occur – with or without the support of aforementioned national Advocacy entities.

OK. If you’d like to respond to the announcements and commentary contained in the previous four bulleted paragraphs; subscribe to the Allen Letter professional journal; order a copy of the 24th annual ALLEN REPORT (Appears in a couple weeks); participate in the 1/23/2013 POWER Luncheon in KY; become a charter member of the Manufactured Home Communities Association of North America (‘MHCA’); and or volunteer to participate, at your own expense, in the forthcoming MHInitiative® planning session, phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764, or email: gfa7156@aol.com and make your wishes known!

***

II.

Schwep, Schrader, & Smith Rules of Thumb;
And, How to ‘Sell More Homes & Lease More Sites’

Earlier this year, the Book of Formulae, Rules of Thumb, & Helpful Measures ‘Mostly for Land Lease Lifestyle Communities & HUD – Code Manufactured Housing, as well as Commercial Real Estate Investment, Affordable Housing, and Realty – Secured Mortgage Originations’ debuted at the 21st annual International Networking Roundtable in San Diego, CA. Did you get your copy there or afterwards? It’s still available!

Since then, a fair number of readers of the Allen Letter professional journal, and this weekly blog posting, have requested more information about the content of the book, and ‘how to order it’. Well, the answer to the second question is this: Phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 and order the Book of Formulae…for $19.95 postpaid. Credit card orders are welcome.

Content? Thought we’d share some of it here, and possibly in future blog postings. This time around, we’ll quote three separate (edited) Rules of Thumb, from pages # 11 & 12 of the subject book.

• Schwep Rule of Thumb. To sell successfully, a manufactured home’s loan PITI (principal, interest, taxes & insurance premium) payment, and site rent total together, must be 15- 20 percent less than monthly rental amount for a conventional apartment in the same local housing market. Percentage may vary per specific market. This rule of thumb first articulated by veteran freelance manufactured housing consultant, and RV/MH Hall of Fame inductee, Grayson Schwepfinger. For example. If conventional 3BR2B apartment rent, in a given local housing market is $900.00/month, maximum PITI and site rent combined payment has to be between $720 & $765/month. How so? Multiply $900, first by .85, then by .80 (i.e. 15% & 20% target margins cited earlier), to arrive at those two amounts. Then subtract site rent (e.g. $300/month from the $720 figure to leave $520/month remaining for new home mortgage PITI. Same thing with the $765 amount, (-) $300 = $465 for mortgage PITI. Be careful to ensure any household utility payments, e.g. water/sewer charges, are handled similarly in the apartment and home/rental site environments. *1

• Schrader/Smith Rule of Thumb. To sell successfully, a manufactured home’s loan PITI (principal, interest, taxes & insurance premium) payment, and site rent total together, must be at least $50.00 less, per month, than conventional apartment unit rent in the same local housing market. Dollar amount may vary per specific market. This rule of thumb first articulated, similarly but at different times and places (i.e. KY & MN) by land lease lifestyle community portfolio owners/operators Al Schrader and Nathan Smith, PHC®. For example: If conventional 3BR2B apartment rent, in a local housing market, is $900/month, maximum PITI and site rent combined payment must be at least $50.00 less, per month, than aforesaid apartment rental rate. How so? Subtracting $50.00 from $900.00 leaves $850.00. In turn, subtract #$300/month site rent from the $850.00, to arrive at $550/month for new home mortgage PITI. Be careful to ensure any household utility payments, e.g. water/sewer charges, are handled similarly in the apartment and home/rental site environments. *1

• ‘Sell More Homes & Lease More Sites’ Rule of Thumb. To sell successfully, a manufacture home’s loan PITI (principal, interest, taxes & insurance premium) and site rent total together, must be at least $25.00 per month less (some say 25%) than a real estate – secured home mortgage’s PITI – assuming household utility expenses are treated in similar fashion in both instances. Several reasons: First and foremost, site – built home PITI includes underlying realty, while a manufactured home in a land lease lifestyle community doesn’t. Furthermore, said discount plays to the affordable nature of manufactured housing and the land lease community lifestyle. *1

End Note.
1. The third Rule of Thumb makes passing mention of ‘household utility expenses (being) treated in similar fashion in both instances’, i.e. per conventional apartment & or LLLCommunity. The first two Rules of Thumb make no mention whatsoever of this important consideration. How so? When estimated annual household utility expenses (e.g. water, sewer, electricity, heating fuel @ gas or oil) are included in the 30% Household Expense Factor or HEF, along with PITI & site rent – or even apartment rent, homebuyers/apartment renters are positioned to be in ‘affordable’ living situations, i.e. ‘Not buying more house, or renting more apartment, than they can truly afford!’ On the other hand, when said household utility expenses (not including telecom services) are NOT included within the aforesaid 30% HEF, homebuyers and apartment renters are saddled with ‘risky’, at best, home and apartment ‘deals’. Consequences? Instead of paying 30% of their annual gross income (AGI) towards household mortgage and or rent expense, they in truth wind up paying in the neighborhood of 40 – 50% HEF; hence a precursor to financial woe, of one manifestation or another.

***

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