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

It’s REALITY CHECK, when ‘an Experience’ Trumps One’s Training, Everyday Practice & Common Knowledge

I.

For more than a decade, I’ve taught Manufactured Housing Manager® candidates, how HUD’s preemptive, performance – based, federal building code has supplanted the inferior quality, sloppy workmanship, and other shortfalls characteristic
of pre – 1976 ‘mobile homes’.

Recently watched a 1962 era Homette 10X60 ‘mobile home’ dismantled in a landlease community I own. Was I ever surprised, when the outer aluminum skin was removed, there was little – to – no insulation; but most shocking of all, the exterior wall structure or skeleton, was fabricated entirely – not using 2 X 2 studs, as I’d always ‘thought & taught’, but rather with 1 ½” X 1 ½” vertical studs mortised to like – sized horizontal structural members every foot or so. Not that’s a REALITY CHECK!

II.

Nearly five decades ago, I experienced a far different reality check. As a young Marine lieutenant, trained as a combat engineer officer, I’d learned the basics of explosives and demolitions, e.g. differences between cutting& cratering charges, booby trapping & disarming same, and safe handling of conventional and plastic explosives.

At the time, I was an engineer platoon commander at Landing Zone (‘LZ’) Studd, later renamed Vandegrift Combat Base, a few miles from the infamous Khe Sanh airstrip. We spent our days building roads, then clearing them of antitank and antipersonnel mines, constructing fighting bunkers, clearing fields of fire, and stringing razor wire.

On this particular day, I’d been teaching an enlisted Marine how to position, arm, and detonate M3 shaped charges, to blast large boulders partly blocking the road into and out of the LZ. He positioned the 12” diameter X 12” tall can – like container atop one boulder; crimped the open end of a blasting cap onto the freshly cut end of a foot long piece of time fuse, now firmly seated inside; inserted this detonator into the fuse well of the shaped charge; lit it; then walked briskly away, knowing we had less than a minute to await the explosion and pulverizing of the rock.

We were at least 100’ from the now armed, and soon to detonate, shaped charge. A minute went by, but no explosion! Another minute, then another went by, and still no explosion. Our radio crackled alive, telling us helicopters were inbound to the LZ, and would be over our worksite in less than five minutes; then asked if we were done blasting. When I radioed back we had a misfire, and were waiting out the requisite 30 safety period before disarming, I was ordered to disarm the charge immediately, as one was chopper carrying casualties. No time or point in arguing. So I started the ‘long walk’ to the unstable shaped charge, knowing it could explode any second, killing or wounding me. When I was a foot from the M3, I could see the fuse had burned and bubbled down into the blasting cap end protruding from the fuse well. I quickly grabbed the near end of the fuse, yanked it out, and tossed it aside. Nothing happened! What a relief! So, an early career REALITY CHECK, that surely trumped training, everyday practice, and common knowledge.

III.

Know what? Today, businessmen and women in manufactured housing, and those of us owning/operating landlease communities, are faced with a new, serious, pervasive, federally – induced Reality Check, nearly unprecedented in our 70+/- year business history! The notable exception being, the period between years 1972 and 1975, when our industry’s new home annual shipment totals plummeted from 575,940 to 212,690 amidst the (then) implementation of another new, serious, pervasive, federally – induced Reality Check, the implementation of the HUD Code. This time around, however, we’re experiencing unprecedented financial regulation of our businesses. But first a little background.

Manufactured housing and landlease (f.k.a. manufactured home) community owners/operators have been purveyors of truly ‘affordable housing’ for decades. New HUD Code manufactured homes – for the most part, and throughout most regions of the U.S. – have been built and sold at but half the ‘per square foot price’ characteristic of traditional, site – built homes erected in the same local housing markets! When you get right down to it, manufactured housing is this nation’s most consistent supplier of quality, non – subsidized, ‘affordable housing’; but are we recognized and appreciated as such? NO, not even by the federal regulator (‘HUD’) tasked with overseeing the industry! They hardly ever mention us, let alone ballyhoo manufactured housing, as a perennial source of ‘affordable housing’, even in their annual planning document.

And that’s not the only ‘affordability’ factor characteristic of the manufactured housing industry. Over the decades, even when enjoying (too) easy access to chattel (i.e. personal property) financing, from independent, third party firms, in support of new – and at times resale home sales, landlease (f.k.a. manufactured home – and before that ‘mobile home park’) community owners/operators routinely…
1. Sold – in years past anyway – resale homes ‘on contract’ at whatever terms worked for both parties, the buyer and the seller
2. And when necessary, to preserve occupancy, rented homes on – site, often inexpensively, like apartment units – by the month or week

But today, with the widespread disappearance of independent ‘street’ MHRetailers, and as more and more prospective homebuyers, oft times with blemished credit, are unable to qualify for financing from independent, third party firms, landlease community owners/operators routinely…
3. Market and sell new homes on – site. These are often specially – designed Community Series Homes or CSH models, sold at or slightly above their wholesale, delivered price, and often far below what the same homes would cost if sited on realty owned fee simple outside the LLCommunity.
4. Engage in one or another of several self – finance methodologies (e.g. ‘captive finance’, ‘contract sale’, lease – option, etc.) to facilitate new and resale home transactions.

Today’s Reality Check is a new manifestation of federal regulation, this time in the area of housing – and related, finance. Think the S.A.F.E. Act (interpreted and enforced at the state level); onerous Dodd – Frank Bill provisions, including the already infamous Consumer Finance Protection Bureau (‘CFPB’); and other similar finance regulatory measures, ostensibly targeting predatory lending practices, money laundering, even identity theft. Well, this mishmash of (as yet) unclear regulatory measures is already acting as a choke on manufactured housing and landlease communities ability to provide ‘affordable housing at affordable prices with affordable terms’ to the very people who need it worst, those that federally – regulated lending institutions won’t serve! Bottom line? This contemporary finance regulations REALITY CHECK is ‘an unintended consequence’, marginalizing our industry and asset class’ ability and willingness to keep low to medium income individuals and families in shelter! This contemporary REALITY CHECK, in this veteran industry observer’s view, is now akin to ‘throwing the baby out with the bathwater’.

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HELP!?

At GFA Management, Inc., dba PMN Publishing, we’ve started research and work on compiling a Very Special Handout for all attendees at the 21st annual International Networking Roundtable, 12 – 14 September 2012, at the Hilton Resort & Spa on Mission Bay, in San Diego, CA.

The guide is tentatively titled George Allen’s Guide to Manufactured Housing, Landlease Community, Affordable Housing, Realty & Lending – related Formulae, Rules of Thumb, Measures, Charts, and more… If you have helpful formulae, rules of thumb, and measures you’d like to see considered for inclusion in this booklet, designed to be user – friendly in size and ease of use, mail your suggestions to GFA c/o Box # 47024, Indianapolis, IN. 46247. Questions? Phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. For that matter, if a LLCommunity owner/operator, and interested in receiving an invitation to attend this major national educational, networking, and deal – making event, let us know when you phone!

George Allen, CPM®Emeritus, MHM®Master
Consultant to the Factory – built Housing Industry &
The Landlease Community Real Estate Asset Class
Box # 47024, Indianapolis, IN. 46247
(317) 346-7156.

‘Short Takes’, Newsy Notes, MHIndustry Peccadilloes

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’18 New Pioneers Pondering the Future of RESEARCH & RESOURCES for all Landlease Communities Nationwide…

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‘Short Takes’, Newsy Notes, & a few MHIndustry Peccadilloes

Blog floggers (readers) by the dozen, continue to respond to this Official MHIndustry & LLCommunity Blog Posting each week We don’t begin to include all of them here, but certainly ones that address, and hopefully bring reason to various observations, issues, and happenstances germane to our double dual industry (i.e. HUD Code home manufacturing & distribution; landlease community investment & management). Have YOU taken the time, or made an effort, to respond of late? Maybe now is the time for YOU to do so….

MHRetailers disappearing? Not by a long shot! This firsthand experience from a retired, but still actively engaged MHIndustry aficionado. During a recent road trip, “…found the South still to have a plethora of independent ‘street’ MHRetailers (f.k.a. ‘street dealerships’), some of the company store variety, others individually – owned salescenters. Most had three or four cars parked outside their sales offices, and almost all were clean, with plenty of flags, lots of attractive colors, and all were attractive and well – appointed from the street view. Nearly all advertised a ‘singlesection special’ and a ‘multisection special’ (Actually, they ballyhooed ‘singlewide’ & ‘doublewide’ models). The SURPRISE was that virtually every marquee proclaimed ‘MOBILE HOMES FOR SALE!’. Which begs the question, ‘Is it maybe time to go back to the future? You know, smaller, low cost, simply appointed, fast to move into, and easy to finance homes!?’ Who’d a thunk we are proving ourselves (this way) every day, and there are indeed folk selling many new homes, even profiting from our ‘past business practices’. WOW.” NB

More on the professional property management issue. From a 20 year manager of conventional apartment communities, now with a year as an on – site landlease (f.k.a. manufactured home) community manager: “Wanted to express to you how appreciative I am, as a property management professional, of your response. I manage a park (i.e. LLCommunity) of 486 homes, and know that it takes more than a warm body to be an active part of the asset’s success! Thank you for recognizing the need for a professional to fill the position of manager, and not just a warm body who happens to live on – site, so (ownership) can save money by not having to close the leasing office. We both know that results in early burn – out because, in essence, the manager never ‘goes home from work.’ “ KC

Property portfolio owners/operators not all paying their fair share of state MHAssociation dues! “I’ve been an executive in partnerships, over the years, in OH, IN, NC, & VA; and always fought with partners over paying MHAssociation dues, because they kept asking, ‘Show us in real terms what we are getting for our money?’ This, unless there’s a ‘hot legislative battle or issue afoot’ is often difficult to do; and add to this, their propensity to act like outsiders, doing their own thing (e.g. ‘I’ve got it handled myself!, instead of ‘Let’s band together!’), as well as being difficult to identify in the first place.” Don’t look for this to change much in the future. In any given state, where there were used to be two dozen sole proprietor – owned LLCommunities, each paying $500.00/year in dues (Total income = $12,000.00); but since have been acquired and are now part of, say, two portfolios, whose owners/operators purposely pay dues for only one such property in each portfolio; well, that’s an immediate, direct, annual loss of $11,000.00 in dues revenue for that state’s MHAssociation. And multiply that ‘hit’ ten times over, and there’s the ‘game changer’ many associations have suffered during the past two decades of landlease community consolidation. What to do about it? Well, here’s the ‘game plan’ I’ve suggested in states where I pay MHAssociation membership dues. FIRST, identify present members not paying their fair (full) share of dues; SECOND, identify out of state property portfolio ‘players’ who aren’t yet dues – paying members; and THIRD, form a volunteer group of LLCommunity owners who’re dues – paying members, and approach recalcitrant firms directly, first by letter, then – if necessary – in person. BUT along the way, these same state MHAssociations must be offering timely services; be engaged in effective lobbying; and, regularly hosting value – laden programs, like Super Symposiums, State of the MHIndustry & LLCommunity asset class presentations ‘that mean something’, and opportunities for professional property management training and certification. If NOT, then why make the effort to attract new, dues – paying members?

Plight of the small businessman and woman competing for national recognition at the annual MHCongress Awards Luncheon. “LOL. Pretty hard to compete with REITs. MHI should segregate the ‘big boys’ who have all their managers vote for themselves.” Probably a good idea. In all fairness though, two ‘little guys’, both from central Illinois, did garner national recognition, one as a MHRetailer and other as a LLCommunity owner, at this year’s MHCongress in Las Vegas. Still though, there’s room for improvement.

More on the controversial ‘unrestricted’ vs. ‘restricted’ distribution of handout materials at MHI events policy. “I want to weigh in on the issue of literature at the MHCongress. As one who’s ponied up for a booth since day one, I believe that if one wants to advertise at the MHCongress, they should pay for a booth as well. If I could hawk my wares for free, why would I spend the time and effort on a booth? I’m certain that booth rentals pay a big part in the financial success of the MHCongress, and I want it to continue as a great industry event. Having said that, it might be appropriate for speakers to have their materials in the room at the time of their presentation, as a way of thanking them for their participation.” DW Well put. But I think ‘the handout distribution issue’ has more to do with said practice at MHI meetings, rather than at this annual big $$$ ticket event in Las Vegas. But hey, we’ll wait to see if/how their new restrictive ‘handouts’ policy discourages or encourages MHI membership by small businesses.

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’18 New Pioneers’ Pondering the Future of RESEARCH & RESOURCES for All Landlease Community Owners/operators Nationwide….

Well the personal epiphany of late February 2012 is being realized, as you read these very lines – assuming you’re doing so between 29 April and 5 May. That’s the week between posting this particular blog, at the community-investor.com website, and the next Sunday posting.

A letter and survey were distributed 24 April, to ’18 New Pioneers’ plus a half dozen ‘advisors’- landlease community owners all, who’ve stepped forward to brainstorm and ponder, then plan, the future of RESEARCH & RESOURCES for all landlease community owners/operators in the U.S., and eventually Canada! Their individual input will be collected and summarized during the first two weeks of May, when an initial White Paper will be prepared, then sent to them for further consideration. During mid – June, as many of these businessmen and women as possible, from more than a dozen states – ranging from New England and Florida to California and the Pacific Northwest, will convene at SaddleBrook Farms in Grayslake, IL., for a day long strategic planning meeting. Those proceedings will likely be akin to the popular FOCUS meeting format of the past 20 years.

Why ’18 New Pioneers’? Mainly as a respectful nod to the 18 ‘then’ manufactured home community owners/operators, who convened 31 August 1993, to begin the process to ensure adequate and appropriate national ADVOCACY for our unique, income – producing property type, before several of their number launched IPOs (Initial Public Offerings of their stock) to become real estate investment trusts (REITs) during the mid 1990s. Today, that ADVOCACY effort is well handled by MHI’s National Communities Council (‘NCC”) division. Are YOU a direct, dues – paying member yet? If not, phone Bruce Savage @ (703) 558-0666 and do so today! Tell him ‘George sent me!’ Seriously.

Back to the ’18 New Pioneers’. Besides being ‘LLCommunity owners all’; with one or two exceptions, they’re also representatives of the new generation of owners/operators. In fact, only one of these ‘owners’ has been a member of both ‘18’ groups. And none of them are listed among the 15 largest portfolio ‘players’ profiled in the 23rd annual ALLEN REPORT.

And frankly, it’s not too late for you to make your interest known, to participate as a supporter of this latter day RESEARCH & RESOURCES project. Simply contact me via the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. This is certainly NOT a closed clique of LLCommunity owners!

With our asset class’ ADVOCACY effort now in place for 16 years (NCC didn’t officially supplant the original Industry Steering Committee until 1 January 1996), it’s time to turn our thoughts and efforts to ensuring adequate and appropriate national RESEARCH & RESOURCES for the unique, income – producing property type! Last time around, need for ADVOCACY was driven by an imminent REIT wave. This time around, RESEARCH & RESOURCES is being driven by the perennial need of landlease community owners/operators for print and online communication; benchmark statistical information; periodic networking and deal – making opportunities; as well as professional property management training and certification; and more….

If you’re thinking, ‘What about the new, national not for profit, Center for Manufactured Housing Studies (CMHS), I’ve been reading about of late; isn’t that supposed to be the standard bearer for landlease community RESEARCH going forward?’ In a word, YES. But it’s hoped RESEARCH & RESOURCES will continue to move forward together, as they have in the ‘for profit’ realm for the past 30 years. And at present, since they are intertwined from start to finish, it’s one more consideration the ’18 New Pioneers’ and their advisors, will be pondering and planning for, during the months ahead.

Is there an ‘end game’ to this epiphany cum strategic planning session? Again, YES. Ideally, as was the case during the Networking Roundtable in San Antonio, TX., last Fall (2011), this year, 12 – 14 September, in San Diego, we’ll be in a position to announce how RESEARCH & RESOURCES will likely move ahead together, in accords with NCC’s ADVOCACY efforts, from that point forward. But, only time – and effort, will surely tell, and spawn the needed results. SO, continue to follow this saga here, and in the Allen Letter professional journal. ($134.95/year = 12 issues, via the aforementioned MHIndustry HOTLINE).

Finally, I’ll share this broad hint with you. Since the MHCongress in Las Vegas, no fewer than three new alternatives have been proffered, but are not yet vetted. One has considerable depth of manufactured housing experience, and more; another comes from the national and professional real estate management ‘side of the house’; and a third, from generic real estate investment quarters. It’s likely the ’18 New Pioneers’ will evaluate one or more of these alternatives, given their (and yours, by extension) interest in ensuring landlease community RESEARCH & RESOURCES, continue on into the future. Exception(s) will occur only when confidence has been requested and assured.

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George Allen, CPM®Emeritus & MHM®Master
Consultant to the Factory – built Housing Industry &
The Landlease Community Real Estate Asset Class
Box # 47024, Indianapolis, IN. 462467
(317) 346-7156

George Allen’s Blog Floggers Reply; & ‘How to Make $1 Million’

Responses to Last Sunday’s Blog Posting re NCC Forum & MHCongress

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‘How I Made Almost $1 Million Profit On My First Mobile Home Park’
(No, not a GFA tale, but someone else ‘with their story to tell’, kinda…)

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Responses to Last Sunday’s Blog Posting re NCC Forum & MHCongress

“On one hand, ‘Congrats to MHI for putting on one of the best meetings I’ve attended in a long time!. The excellent program topics and keynote speakers attracted many interesting, experienced, and generally optimistic attendees.”

“On the other hand…how about some tables near the registration desk, or at the back of the main meeting room, where anyone can place handouts or copies of documents that attendees can peruse before the meeting and during breaks? “ SR Regarding this latter point, another blog flogger (reader) commented: “Great post!!! I will discuss your PAY THRICE comment, for sure, with MHI!” KL This has to do with MHI’s ‘newly enforced old policy’ outlawing handouts at its’ events – from anyone but event sponsors. As another blog flogger succinctly but sadly put it: “I found…MHI’s discrimination perfectly predictable.” NB

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Then this; “Despite the continuing ‘feel’ of the ‘good ol boys club’ that prevails at MHI events like this (i.e. major HUD Code manufacturer reps & largest property portfolio execs are speakers, lead panels, and garner most of the ‘manufacturer’ & ‘community’ of the year awards), I thought the one over – riding positive of this MHCongress was OPTIMISM. And I recognized at least five signs of positive things ahead: favorable demographics, continuing landlease community consolidation, financing for inventory, new chattel finance programs (Think 21st Mortgage Company’s new C.A.S.H. Program & give Lance Hull a call) for retail sales, and realty – secured mortgages for LLCommunities engaged in home sales and self – finance.” JR

Bottom line? ‘Some very GOOD with some NOT so very GOOD. Are you paying attention MHI? And onto this….

“Good to see you mention the fracking phenomenon. The (resulting) new home shipments are NOT insignificant, and certainly underscore this industries ability to quickly, and appropriately, address such housing boom needs!” DF However, as I attempted – albeit unsuccessfully – to warn, at the conclusion of the ‘manufacturers’ panel presentation’, let’s not get carried away by unbridled optimism about what might be, or could turn out to be, a relatively short – to – moderate length phantom housing market, before and if chattel finance finally returns to our industry and really rejuvenates it!

Finally. “NOT need a professional property manager on – site in landlease communities?!! Are you kidding? Without years of property management training, I would be such a failure to ownership and my residents. So glad now to be an MHM®!” VG This from an on – site property manager overseeing a 1,000 + rental homesite LLCommunity! Really. It was such a disappointment, to hear property management (‘PM’) executives from two of the ten largest portfolio owners/operators of landlease communities, publicly belittle any need for ‘professional property management training and certification’, that so many have espoused these past 20 years. In my opinion, there should be at least one Certified Property Manager® or CPM® member of the Institute of Real Estate Management ® in the COO or CEO position at each of our 20 largest firms! And every on – site and regional PM should be either a CPM® Candidate, a bona fide Accredited Community Manager® or ACM® (Meaning they’ve completed all three levels of the ACM® program, not just one or two) and or a Manufactured Housing Manager® or MHM® designee. Is your firm thus staffed? For the good of the industry and asset class, let’s hope so…

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‘How I Made Almost $1Million Profit On My First Mobile Home Park’

No, not me! GFA. Rather, this is the Attention – Getter, the ‘hook’ used by a couple well – known landlease community owners (They consistently use ‘mobile home park’ lingo) who routinely host Mobile Home Park Investors Boot Camps, for would – be investors in our unique income – producing property type. You likely read a monthly column, by one of them, in our industry’s last surviving, advertising – supported, trade publication. So, thought you’d like to see how our realty asset class – or what they call ‘mobile home park’ investment is ‘pitched’ these days….

“I bought my first mobile home park at the end of 1996. It was a total dump. And it was in the wrong part of town. Nobody would have ever imagined that it had any future. I only bought it – at that time – for three reasons: 1) It was cheap 2) the seller was carrying the paper and 3) there weren’t a lot of mobile home parks in Dallas so I figured there had to be some type of supply/demand shortage (if I could just figure out what the demand for this product type was).”

“I bought 83 spaces for $400,000 with $10,000 down and the seller carrying $390,000 for 15 years. Had I known how to do due diligence (I’d never heard of the term back then) then I’d known that this park had all kinds of serious flaws, such as a failing natural gas system and a troubled electrical system. But in the end I fought through all these problems with about #100,000 of additional capital spend and lot of terrifying moments.”

“Meanwhile, I unlocked one of the most powerful drivers in the mobile home park game: the enormous demand for affordable housing. The prior owner had a manager who was a crack addict, and did absolutely no advertising, so there were a pile of vacant, park – owned homes sitting there when I arrived. So job # 1 was to get those sold and income producing. When I got the first one cleaned and ready to sell, I ran a small newspaper advertisement in the Dallas Morning News. I didn’t expect much, maybe a few calls a week. So you can imagine my shock when I got around 20 calls in the first day, and sold the home by the second. I certainly had no idea that the demand to live in a junky trailer in the wrong part of town could be that strong.”

“But I learned over time that a family living on minimum wage only has two options: 1) a mobile home park or 2) a terrible apartment complex. Between the two options, the mobile home park is executive housing. Using just that one item – giant insatiable demand – I filled up all the vacant homes and started to bring in more to sell. Day after day, the phone would ring off the hook, and I could sell anything that humans could live in. I even brought in a few old RVs on the tiniest lots and those sold, as well.”

“Fast forward about 8 years, the park had every usable lot occupied. And my income had shot up due to twice the number of tenants, and twice the original monthly rent (I had been raising it up every year). So I sold the park to somebody else of $1,525,000 – about $1 million more than I had in it. And even then, it was a good deal, as the park was still under market on its rent, and the phone was still ringing off the hook. I heard through the grapevine that the person I sold it to was offered a good profit years later, but refused to sell because they like the monthly income and the park was easy to run. And, of course, the failure of the U.S. economy has only made the phone ring more.”

“If you are interested in these type of real estate deals, then you should consider attending the Mobile Home Park Investors Boot Camp. It’s a three day immersion event in which you learn how to locate, evaluate, negotiate, perform due diligence on, turn – around, and operate mobile home parks, both in a classroom setting and in the field in real mobile home parks.”

So, there you have it; an unvarnished, unedited (Who needs commas anyway?), firsthand description of how one self – proclaimed, successful landlease community owner’s views our real estate asset class. Yes, it’s penned to appeal to the natural greed characteristic of many, if not most, folk; particularly ‘wealth wannabees’. And along the way, it does misrepresent and ‘dis’ (as in disrespect) the vast majority of landlease communities across our country today, and certainly denigrates the owners/operators thereof. I’ll also wager these guys, like the execs described earlier in this particular blog posting, don’t advocate ‘professional property management training and certification’ either. So Sad. BUT, if you’ve read the previous six paragraphs, and find yourself drawn to a ‘need to attend’ a Mobile Home Park Investors Boot Camp, let me know, and I’ll provide the dates, location, and contact details – reluctantly.

There’s a postscript, of sorts, to this scheme. I understand many ‘would be investors’ have participated in past Mobile Home Park Investors Boot Camp events. And an indeterminate number have indeed acquired – or attempted to acquire, their first income – producing property in the recommended manner. But the end game for some, if not many – in my experience – has not been akin to that of the event promoter. Rather, they wind up finding their way to this industry observer, in my role as a property management consultant, seeking advice on how to save what remains of their inheritance, their spouse’s fortune, someone else’s investment capital, their pride and reputation, and the like. Unfortunately, by the time they contact me, there’s not much left that can be done, they don’t have the dollars to pay me, so they walk away Wiser but Poorer, and thoroughly Disillusioned with ‘mobile home parks’.

More on this sordid subject next week….

*****

George Allen, CPM®Emeritus, MHM®Master
Consultant to the Factory – built Housing Industry &
The Landlease Community Real Estate Asset Class
Box # 47024, Indianapolis, IN. 46247
(317) 346-7156

Serious Business ‘Skinny’ (gossip/information) from George Allen

‘Some of What I Learned at the NCC Forum & MHCongress in Las Vegas!’

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‘Pay to Play’ – NOW – ‘Pay Thrice +, to Play’, at all future MHI Events….

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‘Some of What I Learned at the NCC Forum & MHCongress in Las Vegas!’

National Communities Council (‘NCC’) Forum sponsor, ROC – USA, represented by Mary O’Hara, MHM, cited 35 landlease (f.k.a. manufactured home) community ‘conversions to resident ownership’, in12 states, totaling $63,000,000+ since year 2008!

Keynote presenter, Dr. David Crowe of the National Association of Homebuilders (‘NAHB’), reminded listeners of the Rule of Thumb for estimating ‘how much house one can afford’ (including underlying realty) as being, ‘3X one’s Annual Gross Income or AGI’; e.g. $36,000 X 3 = $108,000.00. Confirmation of this truism plays out on the latest edition of the popular ‘Ah Ha! & Uh Oh! Worksheet’, where an AGI of $36,000 suggests a max ‘affordable’ housing purchase of $101,000.00; and, a ‘risky’ housing purchase @ $134,000.00. More on this very point, later in this blog posting….

NAHB/Wells Fargo Housing Opportunity Index or ‘HOI’, uses a local housing market’s Area Median Income (‘AMI’) and Median Home Price, to calculate what percentage of these AMI folk can afford the Median Home Price, BUT is the only affordable housing indicator, of five, to use proprietary (i.e. ‘Gotta pay for it!’) statistical information, generally unavailable to the home buying consumer! FYI; the five affordable housing indicators are: the 30% Housing Expense Factor (‘HEF’); aforementioned HOI; Housing Wage (‘HE’); ‘One Who Believes…a deal is affordable at the time it was/is struck’; and, the Income to Home Value Ratio or IHVR. Sources of this information: HOUSING AFFORDOGRAPHY, PMN Publishing, 2008, 35 pages; and, ‘Affordable Housing; America’s Bugbear of Shelter Definition & Measures’ by George Allen. Latter reference available ‘for the asking’ by phoning the MHIndustry HOTLINE.

Housing Information Resources include: www.housingeconomics.com & www.eyeonhousing.wordpress.com

Is today’s oil shale ‘fracking’ factor (Shipments of crew units or man cabins @ 12BR4B models, HUD Code homes, even ‘mods’) akin to yesterday’s short – lived ‘Katrina effect’ on manufactured housing’s annual shipment total? Consider this: At least five HUD Code home manufacturers are shipping said units into as many ‘fracking’ states. That’s 25 factors; and if each is multiplied by just 500 housing units, that’s a potential uptick of at least 12,500 such units during year 2012. Add this to the 2011 year end shipment total of 51,168 HUD Code homes, and the resulting 63,668 home shipment estimate for 2012, isn’t far from what’s already being ballyhooed as this year’s recovery estimate. All I’m saying is, ‘Be careful’ not to be misled long term, by unbridled enthusiasm and optimism being touted today and the intermediate future….

Dr. John K McIlwain, Senior Research Fellow for Housing, at the Urban Land Institute (‘ULI’) provided this longtime MHIndustry observer, a personal ‘high point’ for the entire NCC Forum & MHCongress experience! Turns out, he too believes ‘affordability’ needs to be put back into the oft abused affordable housing and housing affordability definition discussion. Specifically, where the aforementioned 30% HEF is concerned, that factor should include not only PITI (mortgage principal & interest amounts, taxes & insurance), but also ‘annual household/utility expenses, not including telephone expenses’ for the said housing unit! Unfortunately, mortgage lenders germane to the manufactured and traditional site – built housing industries, for the most part, continue to use ‘the PITI only’ approach; again highlighting the aforementioned differences in ‘How much house a buyer can buy’, as demonstrated in ‘affordable’ vs. ‘risky’ Price Point calculations on the ‘Ah Ha! & Uh Oh! Worksheet’. Want a free copy of the worksheet? Simply phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 & request it!

This year’s NCC Forum experienced, in my opinion, an unfortunate contretemps (i.e. ‘embarrassing occurrence’). It happened when a panel, featuring major property portfolio operations execs, described their firms’ efforts to attract and keep top notch landlease community management personnel. When queried about providing professional property management (‘PM’) training for on – site managers, the panelists appeared to convey this message: ‘We don’t need professional PM training or certification programs for our managers!’ Later however, another panel featured four veteran LLCommunity owners/operators, ALL of whom are professional, certified Manufactured Housing Managers® or (‘MHM®s’), and one Certified Property Manager® or CPM®. There was at least a half dozen CPM®s present at the NCC Forum & MHCongress (Mike Sullivan, CPM®, Alan Alt, CPM®, John Rogosich, CPM® & MHM®; and, Bill Cramer, CPM®, CCIM® & MHM® – all presidents of LLCommunity firms; along with dozens of on – site and regional MHM®s. And, Realtor® Joanne Stevens, an Accredited Community Manger®, or ACM®, also holds the coveted CCIM® and Professional Housing Consultant® or PHC® designations – lectured MHCongress attendees on LLCommunity brokerage matters. Icing on the professional property management training and certification program cake? MHI’s perennial ‘PAC man’, Rick Rand, is a proud holder of the ACM® designation. Maybe next year’s MHCongress will feature a one day MHM® professional property management training and certification opportunity for attendees! What do you think? Let MHI know via (703) 558-0400.

Concerned about anti – money laundering rules for residential mortgage lenders and originators? Visit www.fincen.gov

Did YOU know? CMH Manufacturing produced more than 21,000 coded and 1,400 MOD coded homes during 2011; from Clatyon, Buccaneer, Cavalier, Crest, Giles, Karsten, Schult, SEhomes, Norris, and Golden West ‘brand’ factories? That 21,000 figure represents 41 percent national manufactured housing market share for the firm in 2011.

Something else you missed by not being at this year’s MHCongress. An opportunity to connect with Lance Hull of 21st Mortgage Corporation, about that firm’s exciting new C.A.S.H. home sales/finance program designed to fill vacant rental homesites in ‘one off’ and smaller property portfolios throughout the U.S. Reach Lance via (800) 955-0021.

Last but not least; more than 100 copies of the first – time – distributed ‘LLCTT 3 Step Plan’ for use before, during & after, the Takeover or Turnaround of a LLCommunity, was distributed during a panel presentation at the MHCongress. If you’d like a copy, subscribe to the Allen Letter professional journal @ $134.95/YEAR (12 monthly issues) via aforementioned MHIndustry HOTLINE, as this exciting Lessons Learned tool will be included as a lagniappe (‘freeebie’) in the May issue. Verso (reverse side) of this new one page resource contains latest version of the ‘Ah Ha! & Uh Oh! Worksheet’.

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‘Pay to Play’ – NOW – ‘Pay Thrice +, to Play’ at all future MHI Events….

A few years ago, attendance at national meetings hosted by the Manufactured Housing Institute, numbered in the hundreds; and, ‘in the thousands’, at the institute’s annual MHCongress in Las Vegas. During the past two years, I’ve been keeping close track, tallying names on the institute’s regular meeting registration lists, and it’s been rare to see even 100 businessmen and women present. Just two months ago, at MHI’s annual Legislative Conference in Arlington, VA., there were fewer than 75 attendees.

Point? As difficult as it’s become to attract MHIndustry folk to national MHI meetings, the last thing the institute’s elected and salaried leaders should do, in this MHI direct dues – paying member’s opinion, is Discourage Participation even further! But that’s what they’ve likely done, by rolling out, dusting off, and now enforcing, the following policy regarding…

DISTRIBUTION OF MATERIALS. “MHI’s policy prohibits promotional/sales materials from being placed or handed out at its events unless you are an exhibitor or sponsor and your sponsorship specifically includes the benefit of displaying your materials. Sponsors at all levels of sponsorship are eligible to provide materials for distribution in the attendee registration bags. If you would like to have this privilege, please contact…to become a sponsor.”

What’s going on here? Anyone who’s been to MHI – hosted meetings and events, during the past two decades, knows this supposed ‘old policy’ has Not Been Enforced. Accordingly, ‘never more than a few’ – generally entrepreneurs heading Smaller Business Ventures, would put out free handout material, newsletters, brochures, and literature, near MHI’s event registration area. This practice has now been outlawed, ‘at least for the time being’.

How so, ‘at least for the time being’? Simple. To participate in MHI events heretofore, one had to be a direct, dues – paying member of MHI or one of its’ divisions, e.g. the National Communities Council division; or, attend as the Certified or Alternate Representative, from a state MHAssociation member of MHI. So, that’s ‘PAY # 1’. Then, there’s been the ‘several hundred dollar registration fee’ to attend said event, hence ‘PAY # 2’. But NOW, at the behest of MHI’s old policy cum new, would be attendees must ante up with even more money, As A Sponsor – when one desires to engage in DISTRIBUTION OF MATERIALS; now we’re up to ‘PAY # 3. And Oops! Need I remind everyone of the approximately $1,000 in transportation, lodging, and related travel expenses it requires to attend these two and three day events? Call that ‘PAY # 4’! So, why ‘at least for the time being’ again? Besides discouraging new members from joining this national advocacy body, one with such a prohibitive member self – marketing policy; this Whole Affair ‘has the feel’, of being yet another example of bigger firms (Think some MHI board executive officers) squelching the influence of, and discouraging participation by, smaller ones! We’ll have to wait and see ‘at least for the time being’, if this recent decision and action affects participation in MHI’s annual meeting in October.

Now, how did all this ‘Pay Thrice + to Play’ change in policy, come about in the first place? Well, that in itself is a sorry tale, maybe for another time and place….

*****

George Allen, CPM®Emeritus & MHM®Master
Consultant to the Factory – built Housing Industry &
The Landlease Community Real Estate Asset Class
Box # 47024, Indianapolis, IN. 46247
(317) 346-7156

DID or DO YOU KNOW?

What the Second Greatest Unmet Need in Manufactured Housing is Today?

In 2003, a Landlease Community Portfolio Owner Accurately Predicted Site – Built Housing’s Collapse in 2008, five years before it actually happened!

The Allen Letter professional journal is now, upon popular request by product & service advertisers, publishing display ads in every issue!

Get your copy of the now combined ‘LLCTT 3 Step Plan’, for takeover & turnaround of landlease communities, & ‘Ah Ha! & Uh Oh! $ Worksheet’

*****

Before turning to the subject matter highlighted above, here’re two selections from the many email messages we receive weekly, in response to this Official MHIndustry & LLCommunity Blog. The first is in response to last week’s BEBA (Blast Email Blog Alert) memo that announces each weekly blog posting, asking ‘How’s business?’ The second passage addresses the perennial question as to ‘WHY the Department of Housing & Urban Development, or HUD, our industry’s federal regulator, does NOT actively MARKET our unique, and often AFFORDABLE HOUSING product?’ So, here goes:

“We are now seeing some action, for the first time in over two years. We have had five (home) sales during the last two weeks. Let’s hope this is the ‘break’ we have been hoping for.” Jack in PA.

&

“…those of us in the landlease (f.k.a. manufactured home) community business know manufactured homes are ‘affordable’, because that’s what we eat, sleep, and drink every day! However, it seems we often can’t see the forest for the trees. How so? While we ‘know manufactured housing is & can be affordable’, our (home) manufacturers and MHRetailers continue to promote the ‘big box = big bucks’ designs. So, when the home buying public – and HUD, sees advertising and promotion of our industry’s high – priced, feature – laden alternatives to site – built homes, the concepts of ‘affordability’ and ‘manufactured housing’ simply don’t equate in their minds.” (lightly edited) SR

Bottom line, where this latter quote is concerned? While HUD has long regulated manufactured housing – since the mid 1970s, it has, to the best of my knowledge, never overtly promoted our unique factory – built housing product as being eminently affordable! But at the time, manufactured housing producers continue to Design, Build & Ship (Note I didn’t pen ‘Design, Sell & Ship’ here, for we, as an industry, continue to ‘keep score’ by counting home shipments rather than home sales) ‘Big Box = Big Bucks’ singlesection and multisection units, instead of more economical models in both configurations, e.g. Community Series Homes for siting within landlease communities, on some of the estimated 250,000 vacant rental homesites in the U.S. today!

NOTE. This is one of the reasons we recently revamped the popular Community Series Home and Business Development Manager list. While keeping the CSH description intact, we reduced the number of BDMs, listed thereon, from 30 down to eight, working for six HUD Code manufactured housing firms. If you’d like a copy of this new document, simply phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

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The Second Greatest Unmet Need in Manufactured Housing Today?

Simple. The ability to identify capable, experienced, motivated freelance – as in consulting – home sales trainers, available to landlease community owners/operators nationwide! These to teach on – site staff how to effectively market new and resale manufactured and modular homes, then sell them to individuals and families committed to, and or interested in, the LLCommunity lifestyle! It’s as simple, but frustrating, as that.

Aren’t there itinerate home sales trainers ‘out and about’ the manufactured housing industry today? Yes, but not of the stripe needed by landlease community owners/operators. How so? I’ve come to realize, during the past five or so years, retread HUD Code manufactured housing sales trainers (i.e. those who’ve spent their careers training independent and ‘company store’ MHRetailers – a different slant in ‘home sales’ than needed in LLCommunities today) simply don’t ‘get the job done’. The main reason? Retread sales trainers generally lack understanding of, and sensitivity to, the basics and nuances of landlease community operations and lifestyle!

For example. Landlease community owners/operators, these days, generally get into the ‘home sales business’ (and ‘self – financing’, by default) because they have to! Almost gone are the days when MHRetailers, in the same local housing market as these unique, income – producing properties, would routinely ‘sell homes into them’. Why? At the turn of the century, most MHRetailers were distracted by the siren song of land/home competition with site – builders, and or were bought out by HUD Code home manufacturers needing to (be able to) force new home inventory down the throats of ‘now company stores’ – until all that came to its’ sorry end. Anyway, ‘to get the (site) rent meter running’, contemporary LLCommunity owners/operators now buy ‘repo’, resale, and NEW manufactured homes to market, and then sell on – site; often doing so, if need be, with little to no profit margin between wholesale and retail prices. Independent MHRetailers – unless they happen to own one or more LLCommunities – and retread sales trainers, simply don’t (seem to) understand that truism. Why? They characteristically live ‘from deal (profit) to deal’, and are generally unfamiliar and or uncomfortable with the desirability of annuity – type income, e.g. rental homesite revenue. Furthermore, ask retread sales trainers for ten, or even just five, ‘really good reasons’ for buying a new manufactured home, and moving it on – site into a landlease community. Most of them simply can’t do it!

The solution? While not possible overnight, one mechanism is (kinda) in place. The Manufactured Housing Educational Institute arm of the Manufactured Housing Institute continues to promote its’ Professional Housing Consultant® or PHC® program. Designed more than a decade ago, for training independent and company store ‘would be’ manufactured housing sales pros, the PHC® program might well soon be reviewed; and, either reconstituted, or a new and parallel track prepared with an in – landlease community home sales focus! This timely matter came up at the last MHEI board meeting in Alexandria, VA, in late February 2012; then was put before MHI’s National Communities Council division for consideration. The question now, is to see whether the NCC responds to this real (training) need of its’ members, or lets it too drag on, as it has the opportunity to remove electrical pedestals from LLCommunities….

Since the preceding paragraphs describe ‘the second greatest unmet need in manufactured housing today’, what’s the first? Availability of chattel financing from independent, third party lenders, in a fashion attractive to credit – challenged would be homebuyers and lenders alike! But you already knew that….

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A landlease community portfolio owner predicted site – built housing’s collapse in 2003, a full five years before it actually happened in 2008!

That’s right, and the prediction was made during a flight aboard a private, corporate jet, as it winged its’ way from the East coast to a meeting in Las Vegas. Four MHIndustry execs (from OR, IL, IN, & MI) were on that flight. The story is told in more detail, in the April issue of the Allen Letter professional journal. To subscribe, use the MHIndustry HOTLINE cited in the lead story of this week’s blog posting. Who’s the LLCommunity owner? While not identified in the story per se, here’s a heady hint: At one time he/she managed the largest portfolio of landlease communities; has founded and grown two large property portfolios during the past two decades; and is a founding member of two national trade bodies – one serving the advocacy, and the other, the land development networking needs, of this unique realty asset class.

*****

The Allen Letter professional journal is now, upon popular request by product & service advertisers, publishing display ads in every issue!

Why? Guess you’d have to ask the advertisers for their specific reasons. But everyone knows four print trade publications have ceased circulation during the past five or so years. And the publisher of the sole advertising – supported pub left, has made it clear, on more than one occasion, a primary purpose of columnists, is to ‘fill white space among ads’. So, when an industry or asset businessman or woman, desires substance in what they read, there’re really only two print publications left to consider: the 21 year old Allen Letter professional journal, and the Allen CONFIDENTIAL! monthly newsletter. And I don’t see the latter ever accepting paid advertising, as its’ inherent value lies in its’ ability to, and practice of, printing sensitive information, insider stories, and op/ed pieces – not only unavailable anywhere else in the industry or asset class, but also untainted by any outside influence. Again; to subscribe to either or both trade publications, use the MHIndustry HOTLINE cited earlier, or sign – up via the website hosting this blog posting.

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How to get your copy of the combined ‘LLCTT 3 Step Plan’, for the takeover & turnaround of landlease communities, & the ‘Ah Ha! & Uh Oh! $ Worksheet’!

DRAFT copies of this new Lessons Learned tool were scoffed up by the 125 landlease community owners/operators attending the New York Housing Associations’ Super Symposium III in Albany, New York, two weeks ago. And the folk there were most helpful with their suggestions for edits thereto.

The newly edited ‘LLCTT 3 Step Plan’, for use before, during, & after the takeover and or turnaround of a landlease community, now also features an updated version of the highly popular and frequently referenced ‘Ah Ha! & Uh Oh! $ Worksheet’, used to estimate maximum recommended affordable and risky purchase prices for new and resale, privately – owned homes of any type, whether sited on realty owned fee simple with home, or within landlease communities’! Yep; both helpful tools are now on one sheet of paper, printed front and verso sides.

This exciting new resource will be available this coming week during the Manufactured Housing Congress in Las Vegas, NV., on Wednesday, 11 April, at the ‘Acquisition & Rehabilitation of Landlease Communities’ panel presentation beginning at 2:30PM that day. Plan to be in attendance, as the three ‘turnaround experts’ share their expertise in this timely and potentially profitable business model – and get your copy of the ‘LLCTT 3 Step Plan’ to boot! What do the ‘LLCTT’ letters represent? Landlease Community Takeover & Turnaround.

And, if you can’t be with us in Las Vegas this week, but need or want a copy of the revised and combined ‘LLCTT 3 Step Plan’, don’t fret. It’ll likely be enclosed as a lagniappe (‘freeebie’) in the May issue of the Allen Letter professional journal. Just one more good reason to subscribe!

*****

Final update, for awhile, on the formation and composition of the ‘New 18 Pioneers’ volunteering to brainstorm, plan, and effect the continuation of information, communication, training & certification, and networking resources for landlease community owners/operators nationwide.

To date, there’re a dozen landlease community owners, from 11 states, who’ve committed to become intimately involved in the matter described in the above headline. These businessmen and women are the vanguard of a generation of small to mid – sized property and portfolio owners/operators willing to step out, where many of their large portfolio colleagues have not (i.e. Some large property portfolio ‘players’ are indeed among this ‘New 18 Pioneer’ group), this time around, to ensure their ongoing needs for statistical research reporting (In this specific instance, via the newly formed Center for Manufactured Housing Studies), trade information & directories, print & online communication, property management training & certification, and national networking and deal – making will continue to be there for their use for decades to come.

As we say in the U.S. Marines. We continue to ‘Look for a Few Good Men & Women!’ Are YOU one of those landlease community owners? (317) 346-7156.

This will likely be the last you hear of the ‘New 18 Pioneers’ for awhile; as we decide how to best proceed with this historic project during the months ahead.

*****

George Allen, CPM®Emeritus, MHM®Master
Consultant to the Factory – built Housing Industry &
The Landlease Community Real Estate Asset Class
Box # 47024, Indianapolis, IN. 46247
(317) 346-7156

Musings from a Reluctant Road Warrior

Community Series Homes’ (a.k.a. CSH model Manufactured Homes) list of Business Development Managers, (a.k.a. BDMs), Completely Revamped!

&

What YOU Missed by NOT Participating in NYHA’s Super Symposium III!

&

‘They’re Everywhere, they’re everywhere!’ What? MHM® Pins!

***

It’s Saturday, and I’ve just returned from a five day and 1,600 mile road trip between Indianapolis, IN., and Albany, NY., with stops in Pittsburgh, PA., Utica, NY., and Olmsted Falls, OH., to visit with landlease community owner/operator friends and clients. So very much has happened this past week, and most of it has been very good.
As you’ll soon see, this week’s blog has a slightly different format: somewhat shorter in length, but offering you an opportunity for ‘more information’ and a ‘rare look’ at one of the quietest, but most widely – read, paid subscriber – supported business newsletters in our industry. Enjoy. GFA

Community Series Homes & Business Development Managers

Yep. Got tired of making excuses, time and again, for Business Development Mangers (‘BDM’) who didn’t respond, in any fashion, to good faith inquiries from landlease community owners/operators, interested in buying Community Series Homes (‘CSH’). SO, a few weeks ago, we canvassed all 30+/- BDMs, asking them to complete a brief update of their contact information, and requested they send us CSH floor plans and elevation drawings. Only eight BDMs from six HUD Code home manufacturers responded! On one hand I was sorely disappointed; but on the other hand, it suggested: 1) CSH is being seriously pursued by only a few of the remaining HUD Code firms; and, 2) Those not responding, likely continue to be enamored by those ‘big box = big bucks’ business models of the late 1990s, when land and home packages were all the rage. So be it! But if you’d like a copy of the new CSH description & BDM list, simply phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 & request it. Copies will likely be enclosed in the May issue of the Allen Letter professional journal. Also use that number to subscribe to the newsletter, @ $134.95/year (12 issues)

***

What YOU Missed by NOT Participating in Super Symposium III this past week…

OK, gonna ‘bait’ you here. You missed superb presentations by Jason Boehlert (MHI); Mark Lifset, esquire; Dr. David Funk – ‘All the national housing market stats you’ve ever wanted to hear/see, but didn’t know who to ask!’; the Rishel Show in two complementary parts; Spencer Roane’s talk to a full house, ALL interested in what he had to teach about the lease – option methodology (MHI are you listening?); and ‘yours truly’ sharing the Official State of the MHIndustry & LLCommunity Asset Class’. Want more information on one or more of these exciting topics? Well, I’m doing something ‘here’, I’ve not done before! If you phone (see preceding paragraph) or email and request it, I’ll send you a gratis (free) copy of this month’s issue of the Allen CONFIDENTIAL! business newsletter. Contains contact info for all just mentioned, and much much more.

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‘They’re everywhere, they’re everywhere!’ What? MHM® Pins! MHM® Pins!

First noticed the phenomenon at MHI’s Legislative Conference in Arlington, VA., last month; then again, at NYHA’s Super Symposium III in Albany, NY., this past week. MHM® professional property management designation pins. But I shouldn’t have been surprised. After all, with the Manufactured Housing Manager® certification class in Louisville, KY, in January, the total of designated MHM®s is very close to the 1,000 mark. Now I’m looking forward to seeing how many MHM® pins will be in evidence at the NCC Forum and MHCongress in Las Vegas @ 10-12 March, 2012. If you haven’t registered yet, for the MHCongress, phone (703) 558-0400.

Back to the MHM® phenomenon. Are YOU and or your on – site and regional property managers graduates and designees, of the only active professional property management training and certification program in our industry and asset class these days? If not, suggest you request a program brochure via the aforementioned MHIndustry HOTLINE.

As a reminder, classes are most often co – hosted by state MHAssociations (Which receive $50.00 for every paid registration); then, as in – house national or regional training programs, by LLCommunity portfolio owners/operators, depending on how many properties they have; as stand alone venues, when we have enough ‘interest’ in any given geographical region, to hold the one day class; and finally, for those in remote areas or who can’t afford the travel expenses, there’s a correspondence version that always has one or more LLCommunity manager on the way to earning their coveted MHM® designation.. Interested? Give us a call today! (317) 346-7156.

What do you get for the reasonable $250.00 per person fee? A copy of Landlease Community Management (Retails @ $75.00), a monograph of contemporary MHIndustry ‘readings’, the gold MHM® pin, and an MHM® certificate, with new MHM®s name printed on it. Plus, ‘free telephone consulting’ for as long as I’m in the MHBusiness.

***

George Allen, CPM®Emeritus, MHM®Master
Consultant to the Factory – built Housing Industry &
The Landlease Community Real Estate Asset Class
Box # 47024, Indianapolis, IN. 46247
(317) 346-7156

SOME OPPORTUNITIES FOR YOUR INPUT….

Ideas for 21ST Networking Roundtable Agenda & Presenters?

You Using Private Investors or P2P to finance home sales on site?

Last Chance! Volunteer to be a ‘New 18’ LLCommunity Pioneer?

Want a copy of the LLCTT 3 Step Plan for Takeover/Turnaround?

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Ideas for 21st Networking Roundtable Agenda & Presenters?

No other manufactured housing, and or landlease (f.k.a. manufactured home) community national venue, offers more education options (i.e. 24 topics and panels during two days), better interpersonal networking (i.e. ten social events for 200+/- registrants), and deal – making opportunities, than the annual International Networking Roundtable.

This year’s 2012 event is scheduled for 12 – 14 September at the Hilton Resort Hotel on Mission Bay in San Diego, CA. The 2 ½ day agenda of timely, cutting edge topics is being crafted NOW. If YOU have practical suggestions for topics and or presenters, communicate same to me, ASAP, via the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or via email: gfa7156@aol.com

What’s already tentatively scheduled? Read this blog during the next few weeks to stay abreast of what’s going on, and to become truly excited about attending this year’s 21st annual Networking Roundtable. Even considering having a well known author and humorist on hand for the Thursday luncheon….

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You Using Private Investors, P2P, or P2B, to finance home sales on site?

Here’s the situation. For the most part, our ‘Big Four + 1’ independent, chattel (personal property) finance lenders and mortgage originators, are ‘dead in the water’ when it comes to financing in – landlease community home sales transactions! Sure, ‘financing’ is available, but only to credit – worthy borrowers with high credit scores – well above 600; certainly not the ones, oft with bruised credit, many of us are seeing these days. And, in my opinion, we’re not going to see this static situation change anytime soon. So, what might be practical alternatives during this impasse?

For starters, one ‘light at the end of the (finance) tunnel’, might be 21st Mortgage Corporation’s C.A.S.H. (‘Communities Affordable Spec Homes’) program, introduced here, in last week’s blog posting at this website. Did you read about it? If not, here’s the exciting new concept: ‘21st Mortgage Corporation will participate, with approved LLCommunity owners/operators, by purchasing new homes and siting them within their properties, at no cost to the operator.’ And there’s much more you need to know about the program. To do so, contact Lance Hull via (800) 955-0021 X 1218 or (865) 405-9121. You’ll likely be glad you did. And he’ll be at the NYHA Super Symposium III in Albany, NY., this week, 28 & 29 March (Phone 518/867-3242 to register!), as well as the Manufactured Housing Congress in Las Vegas @ 11 & 12 April. (Phone 703/558-0400 to register!)

Next. Here’re pithy questions and answers to consider, and maybe respond to this week. Are YOU presently using private investor funds, or P2P (peer – to – peer) & P2B (peer – to – business) – a.k.a., ‘crowd’ or ‘social funding’ to acquire homes, and or underwrite home mortgages on new and or resale homes, sold and sited within your landlease community(ies)? Why am I asking? Because a movement is already afoot, and has been established for awhile now, among sole proprietor and smaller property portfolio LLCommunity owners, to grow this ‘private finance’ concept, through education and communication – like what you’re reading here. For that matter, there’re some large property portfolio players who’ve already created their own in – house home finance programs, using equity funds they’ve raised.

In any event, once private investor funds are raised, two common approaches to applying them are 1) via lease – option transactions, in states where this methodology is acceptable, and LLCommunity owner is comfortable and compliant within the procedure; and, 2) via one or another ‘captive finance’ methodology, where home loans are effected under the auspices of a stand alone finance firm indirectly affiliated with the property owner, and mortgage servicing is handled by an independent, outside, financial services firm like Ken Rishel Consulting (217) 971-3968 (This is not a blanket endorsement, simply recognition that this sort of specialized service is very difficult to find in the manufactured housing industry).

In the meantime, what’s ‘peer – to – peer’ and ‘peer – to – business’ funding, P2P & P2B or ‘crowd’ or ‘social funding’ all about? Well, it’s when many investors contribute funds to finance one transaction (e.g. a manufactured home) at a time, often via common interest websites (e.g. prosper.com & lendingclub.com). The investment practice(s) are regulated by securities law, where prospectuses are filed, etc.. So, how’s this different from aforementioned ‘private investor funds’ – long in use by landlease community owners? Here, a private investor places savings, and or funds from a self – directed IRA account, into a transaction that stands on its own, e.g. one loan from one investor for one home purchased and or financed by the property owner, with investment ‘returns’ paid directly, over time, to the private investor.

Now, back to those two key questions: 1) Are YOU presently using private investor funds to acquire home(s) that’ll be seller – financed? And, 2) How ‘bout the similar, but newer alternative, referred to above as P2P and or P2B ‘crowd’ or ‘social’ funding?

With this blog posting, we’re launching an online, and in time, print effort to gather experiential information, successful and otherwise, to produce and distribute a Standard Operating Procedures (‘SOP’) of sorts, for landlease community owners seriously interested in ‘How to raise private investor funds, and via P2P & B2P’, for the purpose of filling vacant rental homesites! Also plan to identify additional resources providing independent mortgage servicing to firms engaged in any and all variations of self – finance (a.k.a. property owner finance) methodology, relative to manufactured homes in landlease communities. Anyone else out there into this (servicing) line of work, and or using private investor funds?

So, if YOU are into one or another aspect of using private investor funds, and P2P & B2P; and, routinely ‘service’ chattel mortgages on manufactured homes in landlease communities, contact Spencer Roane via (678) 428-0212 or via spencer@roane.com and or the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. When you contact Spencer, also know he’s knowledgeable and experienced in the use of the lease – option (Not ‘lease – purchase’), relative to manufactured homes sited in landlease communities, especially in the states of Georgia and Texas.

Spencer Roane, along with Ken Rishel, and ‘yours truly’, are participating in the NYHA’s Super Symposium III in Albany, NY., this week (Complete with Community Series Homes on display!). And all three of us will be panelists during either the National Communities Council Forum on 10 April, and or Manufactured Housing Congress on 11 & 12 April, in Las Vegas, NV. To register for any one, two or three of these seminal and timely national events, use contact phone numbers listed in an earlier paragraph of this blog posting.

*****

Last Chance to Volunteer as one of the ‘New 18’ LLCommunity Pioneers?

OK, we’re just about there! Each week, for the past three weeks, landlease community owners have been stepping forward to be one of the ‘New 18’ pioneers*1, committed to plan the future nature and direction of research and resource products and services utilized by LLCommunity owners/operators throughout the U.S. and Canada! We’re now at a dozen ‘New 18 pioneer’ businessmen and women. Should we count you, a landlease community owner, as being among this august body of our peers? If so, let me know soon, via the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or via gfa7156@aol.com You’ll likely have to ‘leave a message’ as I’ll be in Albany, NY, the week of 26 March, attending and participating in the NYHA’s Super Symposium III. How ‘bout You? To get information and register, phone Nancy Geer via (518) 867-3242.

*****

Want a copy of the ‘LLCTT 3 Step Plan’ for Takeover & Turnaround?

Wow! We haven’t even made it to Albany yet (see previous paragraph), and folk are calling – in, wanting a copy of this stunning, one page summary of Lessons Learned during 30+ years of ‘taking over’ and ‘turning around’ troubled landlease communities!

As you learned here, in last week’s blog posting, I’ll be distributing a DRAFT copy of this unique, first time ever ‘handout’, at the Super Symposium III in Albany, NY. Once ‘back home in Indiana’, I’ll effect edits, reflecting critiques received from some of the 125+ LLCommunity owners/operators in attendance at the symposium, to make the ‘LLCTT 3 Step Plan’ even more applicable and valuable than it is today. And, unlike the DRAFT copy distributed to Super Symposium III folk in Albany, the ‘revised’ version to be distributed in Las Vegas, will feature an updated version of the highly popular ‘Ah Ha! & Uh Oh! Worksheet’ on the reverse side, likely using $64,000. as the ‘common denominator starting point’ for this unique, truly ‘affordable housing’ computation methodology.

Coincidentally, that $64,000. figure, is not only the ‘national average Area Median Income or AMI for year 2011’, it also ‘just happens to be’, according to the Wall Street Journal, the average price of a HUD code manufactured home during that very same year (2011)! How ‘bout that?

Next distribution will occur in support of a showcase panel presentation at the MHCongress in Las Vegas. Specifically, I’ll be moderating a panel comprised of three capable and experienced landlease community ‘turnaround experts’, between 2:45 & 4PM on 11 April. But you’ll need to be present at the panel presentation to pick up a copy of this finished work: the ‘LLCTT 3 Step Plan’, before, during, and after the ‘takeover’ and or ‘turnaround’ of any landlease community!

The third general distribution of this new PM (‘property management’) tool will occur for subscribers to the Allen Letter professional journal; as the new training handout, will likely be a lagniappe (freebie) enclosed in the May 2012 issue. How can YOU not want this handy form in your briefcase, ready for the next time you ‘takeover’ and or plan the ‘turnaround’ of a LLCommunity; and, need to clearly know what ‘housing price points’ will sell in particular local housing markets identified by postal zip code? Then, perhaps sometime in June or later, this terrific Lessons Learned one pager will be made available for general distribution to LLCommunity owners/operators nationwide.

*****

End Note.

1. The moniker ‘New 18’ is a nod to the ‘original 18’ landlease community owners who gathered, in Indianapolis, IN., on 8/31/1993, to take the first steps to ensuring appropriate and effective national advocacy, in behalf of their unique, income – producing property type. Result? Initially, formation of the Industry Steering Committee or ISC; then as of 1/1/1996, launch of what is now the National Communities Council division of the Manufactured Housing Institute. If you’re not already a direct, dues – paying member of this body, and own/operate one or more LLCommunities, phone (703) 558-0666 for information and to join.

***’

George Allen, CPM®Emeritus, MHM®Master
Consultant to the Factory – built Housing Industry &
The Landlease Community Real Estate Asset Class
Box # 47024, Indianapolis, IN. 46247
(317) 346-7156

‘The LLCTT 3 Step’; ’18 New Pioneers’; & C.A.S.H. for Landlease (f.k.a. manufactured home) Community Owners!

I.

‘The LLCTT 3 Step’: Before, During & After, Takeover & Turnaround of any Landlease (f.k.a. manufactured home) Community, anywhere in the US

Will you be attending the National Communities Council (‘NCC’) FORUM and Manufactured Housing Congress in Las Vegas on 10 – 12 April 2012? If so, look me up, so we can ‘talk shop’ awhile! Seriously. To register, phone (703) 558-0400.

One of the sessions you shouldn’t miss, if you own or ever hope to own and operate a landlease (f.k.a. manufactured home) community is ‘Acquiring & Rehabilitating Distressed Properties’ panel presentation scheduled for 2:45 – 4:00PM on 11 April. Why? Two good reasons: First, the three panelists, Jamie Dougherty, MHM®, of Community Management Group, Greg Harmon, MHM®, of GHP Marketing, and ‘Mac’ MacClanahan, MHM®Master, of Indy Mac, are experienced landlease community turnaround owners/operators. So, if you’ve ever wondered ‘how to do it’ or ‘do it better’, sit in and learn from these capable, experienced, and motivated professionals.

Yet another reason? Finally, after having engaged in ‘property takeovers & turnarounds’, involving more than 1,000 rental homesites during the past 30 years, I’ve culled my Lessons Learned into a tri – part, 16 point, one page summary, that’ll be distributed only to those in attendance at this particular MHCongress session! Titled
‘The LLCTT 3 Step’ – short, for the ‘The Landlease Community (before, during & after) Takeover & Turnaround Three Step Procedure!’, it’s the most accurate, brief, clear, concise & complete (A nod to the ‘ABC-3 Rule of Effective Communication!’) description of this tactical process ever published! So, be present to pick up ‘your copy’!

II.

18 New Pioneers

Well, we’re getting close! Already a third of the way to identifying ‘18 New Pioneers’, all landlease community owners, who’ll make the aforementioned 27 February 2012 epiphany a reality!

Remember my sharing the personal and corporate epiphany experienced on 27 February 2012, while attending MHI’s annual Legislative Conference in Arlington, VA? The one where I recollected how

“18 years ago, it took 18 (then) MHCommunity owners, to convene, on
8/31/1993 in Indianapolis, IN., to get our asset class national advocacy (i.e.
today’s NCC division of MHI) movement started!”

And how today,

“On 27 February 2012, the quiet search began, for a ‘New group of 18
LLCommunity owners’…to ensure statistical research, property management
education, communication resources, networking and deal – making opportunities
continue for landlease community owners/operators throughout the U.S.”

Who are we seeking? Landlease community owner volunteers, from throughout the U.S., who believe the success of their business interests, in this unique realty asset class, depends on a healthy mix of personal and corporate management skills, national political advocacy (via the NCC); and, ready access to key data & helpful information – like ‘The LLCTT 3 Step’ described earlier in this blog posting, property management education & MHM® certification, regular print & online communication, as well as opportunities to engage in interpersonal networking & deal – making among peers!

More than a half dozen landlease community owners have already stepped forward, volunteering to be among the ’18 new pioneers’ (Compared to the 18 who did so 18 ½ years ago). So far the geographic spread includes property owners from the Midwest, Middle Atlantic States, and New England; with inquiries in from the Southeast, West coast, and Pacific Northwest regions. And it appears we have at least one woman owner in the mix as well. SO, if YOU own one or more LLCommunities, have a passion for this business model, and want to be part of manufactured housing’s recorded history, this is that ‘one chance in a career’ to be a change maker! Simply phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or (317) 346-7156, or email me today! GFA

III.

C.A.S.H. Program

Have you heard? There’s a new chattel (personal property) finance program afoot, the Communities Affordable Spec Home (‘CASH’) program, designed to ‘fill vacant rental homesites, in standalone landlease communities and or small portfolios, of this unique, income – producing property type’!

Yep; and here’s the exciting new concept: 21st Mortgage Corporation will participate, with approved landlease community owners/operators, by purchasing new homes and siting them within their properties, at no cost to the operator. Furthermore, 21st will cover all costs, including cost of the home, foundation, skirting, air conditioning, decks, steps, and other requirements necessary to prepare the home ‘for sale’. How so?

Once the new home is installed on – site, 21st will offer the home ‘for sale’, featuring an aggressive lending structure characterized by a reasonable down payment amount and rates, even for lower credit quality home buyers. The 21st program is made possible, by working with the owner/operator to allocate a portion of the monthly site rent, from this newly occupied homesite, directly to the principal balance of the new homebuyer’s home loan. This enables the new homeowner to realize an equity position they likely would not have been able to attain otherwise; in turn, likely ensuring loan performance and long term residency within the landlease community.

Yes, there are additional exciting details about this new and exciting program from 21st Mortgage Corporation. Suggest you contact Lance Hull via (800) 955-0021 X 1218 or (865) 405-9121 (mobile). Tell him ‘George told me to call!’
IV.

A Plan, based on accountability, to fix the manufactured housing industry!

Blogger’s Note. The following thoughts, lightly edited, were penned and submitted by Jim Carmichael, relative to ‘How we (might) fix the industry!’ Accordingly, therefore, “The biggest challenge is how do we get the message out, and motivate the right people (leaders) to implement it.” JC

“My plan is based around accountability at every level, in every sector, of the (manufactured housing) industry; from home manufacturing; to home finance; to the sale, set – up and move – in of the home buying customer.”

One caveat, at this point. ‘Does anyone think the S.A.F.E. Act and Consumer Financial Protection Bureau (‘CFPB’) regulations and enforcement actions will restore enough confidence in the secondary market to make a significant difference, or is this just part of the overall ‘challenge(s)’ facing the manufactured housing industry?’

With that said, “(Home) manufacturing standards must be set and loopholes removed, e.g. 2X4 exterior walls should be fabricated using actual 2X4 studs, not a 2X3 with three furring strip bands and Styrofoam.” And are we ready to ban particleboard floors from manufactured homes?

“Independent ‘street’ MHRetailers…must be licensed, from the general manager down to every sales person, as well as individuals responsible for home finance and ‘closings’.” This state – issued license should be in line with federal guidelines; maybe not as extensive as real estate salespersons and brokers licenses, but heady enough that licensees will think twice before risking relinquishing it for cause.

‘Finance – more complete auditing, no more padding deals with down payments, circa 1990s. But that appears to be covered via recent round of state and federal finance regulatory measures.”

“Set up permits to be required in every jurisdiction; use of only certified installers.” Regulatory groundwork is certainly in place for this, but state financing of enforcement mechanisms is not.

“Service, (Home) manufacturers and MHRetailers must be trained properly to do the work.” Plant visits should become routine and educational, rather than periodic fun junkets.

“Appraisers (of homes). Set forth standards requiring home valuations be based on more than just age and size of home, but also its’ condition inside and out”, as well as where it is sited, e.g. in a landlease community.

In conclusion, Jim asks: “How do we get the plan out, people on board, and implement it? I am reaching out for suggestions.” Got any? Let him know via this web site: www.community – investor.com

Do you pick up on the plaintiveness (as in mournfulness) off his plea? I surely do; and it’s far from being the first time I’ve read and heard similar frustrations ‘voiced over the years’; no, make that ‘over the decades’. I mentioned this once, recently, and guess it’s time to do so again

V.

Creative Finance Workshop scheduled in Chicago @ 15 & 16 May 2012.

If you market, sell, and self – finance new and or resale manufactured homes on – site, in one or more landlease communities, and haven’t attended this Captive Finance Workshop in the past, you should consider doing so! For that matter, if you’re considering implementing the practices described in the first sentence, it’s doubly recommended you attend. Why?

For starters, it’s the only such captive finance workshop presently being conducted in the U.S. MHI isn’t sponsoring any. Neither is MHARR. And certainly no one else! Furthermore, I’ve attended – and as happened when I took my real estate salesperson and broker licensure classes ‘years ago’, and George Porter’s MHInstallation class more recently, I walked away from Ken Rishel’s two day presentation a far wiser businessperson in the manufactured housing industry. Is that an endorsement? You bet it is!

Suggest you phone Rishel Consulting, via (217) 971-3968 and request additional information, maybe even register. And know what? You might see me there, as it’s high time to attend the workshop again, for refresher training, and to learn what’s changed (a lot!) on the financial regulatory front since the last session I attended.

***
End Note

MHI chairman Joe Stegmayer recently questioned why I regularly make the distinction of being a direct, dues – paying corporate member of the institute, presumably versus what that body refers to as its’ Certified Representatives – in their annual Membership Directory. Well, it’s really pretty straightforward. As the 20+ year owner of a manufactured housing – related business, I dig deep into my figurative pocket each year to pay dues (real money) directly to the Manufactured Housing Institute, in addition to what I pay to belong to more than one state MHAssociation. I’ve simply found it troublesome, to sit in meetings with some CRs, who treat their ‘seat at the table’ in a disingenuous fashion (i.e. ‘lacking in frankness, candor or sincerity’), take the importance of their role for granted, and even the event proper, little more than as an employment ‘benie’. Of course this is not true of all Certified Representatives.

George Allen, CPM®Emeritus, MHM®Master
Consultant to the Factory – built Housing Industry &
The Landlease Community Real Estate Asset Class
Box # 47024, Indianapolis, IN. 46247
(317) 346-7156 & gfa7156@aol.com

27 February 2012 Fallout Continues; an Emerging Trend;
& Much More….

I.

Sampling of Peer Response to Last Week’s Blog: ’27 February 2012 akin to 27 February 2008 & 2009?’

Here’re a few of the near immediate responses to our blog posting of 4 March:

“As always, your weekly blog postings are tremendously helpful and informative. This past Sunday’s (3/4/12) was particularly good, as those of us who were unable to attend the MHI Legislative Conference appreciate the updates and information sharing. As to your epiphany, and search for the ‘new 18’, you are absolutely right! It is critical we support your ongoing efforts to ensure we have data, communication, and numerous other services and resources you unselfishly provide our industry in the long – term. I’m available to assist you in identifying how we seamlessly transition to the next provider(s) of these critical services, once you decide to phase into retirement. Thanks again for everything you do for us.” A Pacific Northwest businessman. (No edits. GFA)

“Good post George. Obviously you can count me among the ‘new 18’ – if you feel I can contribute. And ‘formerly known as’ or ‘f.k.a.’ better describes the trade term transition from ‘manufactured home community’ to ‘landlease community’.” A Middle Atlantic states LLCommunity owner/operator.

And this. “I’ve copied (your blog posting to) a couple friends, since I’m not sure my instinct is correct. But here it is: ‘It appears all manner of things continue to get in the way of ‘How to Save Our Industry?!’, and we/the industry just continue to accept the state of affairs. And Okay George, you say we need the DC (advocacy) experience in lobbying, to deal with legislation and regulatory matters. Perhaps the reality is that DC cannot save us! We will, as an industry, be saved by producing and selling products that fit our customer’s needs and their ability to buy, period. Financing will, in time, fix itself; especially when we assure (product) quality, and service to our customers. Sounds too simple, I suppose, but this continual delay just plain ‘ain’t right’!” A Midwest businessman.

Bottom line? As I penned earlier, the MHInitiative® is ‘on hold’ for now, as we give Dick Jennison, MHI’s new president and CEO, “…space and opportunity to ‘learn our various business model(s)’; then address this (if still) timely and potentially fatal issue.” – that of ‘How to Save Our Industry?!’ GFA

II.

A Word about that ‘Wholly Unexpected Personal & Corporate Epiphany!’

The epiphany? “18 years ago, it took 18 (then) manufactured home community owners, to convene, on 8/31/1993 in Indianapolis, IN., to get their realty asset class’ national advocacy movement started!’ AND “As of today, 27 February 2012, I begin the quiet search for a ‘new 18’ veteran and successful landlease community owners, motivated and capable of ensuring their property owner/operator peers, large and small, throughout the realty asset class, have sufficient statistical data, educational opportunities, communication resources, networking and deal – making opportunities, now and into the future!” GFA

Within 24 hours of the Sunday blog posting, several landlease community owners stepped forward, via phone and email messages, volunteering to be among the ‘new 18’!

So, if YOU own one or more landlease communities, and are willing to commit, as these businessmen and women have, to meet later this Spring, and begin the planning process, to ensure the future of products and services needed in the everyday operation of our unique income – producing properties, as well as enhancing our industry’s reputation as a primary source of Affordable Housing, and our communities’ Lifestyle, let me know via the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or email.

Frankly, I’m already humbled by the quality and character of landlease community owners who share this similar – but – different vision, from the one embraced by 18 forebearers, nearly 18 years ago! Will YOU be one of the ‘new 18’? I hope so.

In the meantime, know that the ‘original 18’ are already part of the recorded history of our industry and asset class, having been identified for posterity in the books: How to Find, Buy, Manage & Sell a Manufactured Home Community, in 1998; and recently in Landlease Communities, Manufactured Home Communities, Mobile Home Parks, Trailer Courts & Camps, and Affordable Housing, in 2011. For a list of their names, read End Note # 1. The question now is, will your name, in time, also become part of our industry and asset class’ recorded history, as preservationist of landlease community data, resources, communication, education, networking, and deal – making?

III.

An Emerging Trend?

It went public on 2 February 2012, when Ms. E. Dickens of the Manufactured Home Owners’ Association (‘MHOA’), at a Congressional Hearing – convened to examine WHY the Manufactured Housing Improvement Act of 2000’ hasn’t been fully implemented by HUD, unexpectedly slammed landlease (f.k.a. manufactured home) community owners/operators, for a variety of perceived affronts relating to rent increases and other matters. Ms. Dickens blatantly abused her member status, on HUD’s Manufactured Housing Consensus Committee (’MHCC’), to mount this bully pulpit in behalf of tenant rights, or as she seemed to view them – a lack thereof; a topic completely afield from the stated purpose of the Congressional Hearing.

Anyway, ‘the word’ out and about in Washington, DC., during MHI’s recent Legislative Conference was, with the retirement of Congressman Barney Frank, long a supporter of ‘manufactured housing – as – affordable housing’, tenant activists would likely no longer be held at bay, and could be expected to launch new initiatives against perceived abuses by the industry and realty asset class. Is this true? Only time will tell.

But in the meantime, a word of advice. Now is as good a time as any, to take a good hard look at all one’s landlease community operations! While doing so, pay special attention to the professional property management tenet: Ensure Good Resident Relations! Remembering though, that is just a third of the whole; where the ‘Six Rs of Good Resident Relations’ include Good Resident Relations = More Resident Referrals = Maximum Resident Retention! Is this being practiced at all your properties?

We have this opportunity to stop the threat of an emerging trend in its’ tracks. Is your business worth preserving, by taking the appropriate professional property management steps, at all levels, and among all on – site functions, to set matters aright? If your on – site and regional property managers have not yet been trained and certified as Manufactured Housing Managers® or MHM®s, now might be the time to ‘get the job done’! For more information, use the aforementioned MHIndustry HOTLINE. For that matter, are your rental homesite rents truly in sync with rental rates charged by other multifamily rental properties in each of the local housing markets your properties serve? If you don’t know how to do this, let me know….

IV.

f.k.a. does a better job than a.k.a. and completely eliminates ‘nee’….

Huh? Maybe you should reread last week’s blog posting tidbit on this subject. But then, it’s easy enough to ‘splain’ once again.

For a long time I introduced newsletter, book, and blog readers to the timely segue from ‘manufactured home community’ to ‘landlease community’, in trade terminology, by penning: landlease (nee manufactured home) community, the first time used in a narrative; then, from that point onward, simply ‘landlease community’, even ‘LLCommunity’.

Well, at MHI’s Legislative Conference in late February, chairman Joe Stegmayer (also CEO & chairman of Cavco Industries, Inc.) pointed out to me, ‘nee’ is an incorrect word choice (Go ahead, look it up; it’ll be worth the effort), and recommended I switch to a.k.a., as in ‘also known as’. Initially that sounded and read ‘OK’, but the more I thought about it, I knew a word was needed that suggested ‘manufactured home community’ was passé, and not just ‘also known as’.

Soon after last week’s blog was posted, as you already saw in one of the samplings quoted earlier in this blog, alternatives started arriving, namely f.k.a. (formerly known as) and p.k.a. (previously known as). Well, I’ve opted, as stated earlier, for f.k.a. to replace both a.k.a. and nee. End of story.

V.

The Young Turks, as in ‘the young and the restless’

Was prepared to conclude this blog posting, by introducing a new asset class trade term: the Young Turks. This won’t come as a surprise to long time readers, who’ve been introduced to Young Lions (i.e. Aggressive property consolidators & or portfolio builders) in past editions of the annual ALLEN REPORT (a.k.a. ‘Who’s Who Among Landlease Community Portfolio Owners/operators Throughout North America!’*1); even the Daring Dozen, a ‘bakers dozen’ of new investors, from nearly a decade ago, who started their LLCommunity firms during the most difficult of economic times – and today, only a few of whom continue in this business model

But I’ve decided the time isn’t quite right for this introduction. For that matter, if I wait awhile longer, I’m confident there’ll be additional names to add to this list of ‘the young and the restless’. Will give you a hint though: they differ from their present employers – often pioneers in our asset class, and who’ve often been their mentors, in several significant ways. The clue? With one notable exception, a lack of formal real estate and professional property management training and credentials.

*****
End Note.

1. The ‘original 18’: Jeff Kellogg; Randy Rowe; Gary McDaniel & Jim Grange; Jerry Ellenburg & Scott West; Thomas Horner, Jr.; Martin Newby (retired) & Dick Leiter; Ron Richardson: Bill Williams; Kamal Shouhayib; Lynwood Wellhausen (retired); Bill Geary, CPM; Martin Lavin; Eugene Landy; Brian Fannon, CPM; Ed Zeman; and, George Allen, CPM – the 19th & organizer.

2. To order the 23rd annual ALLEN REPORT (distributed 1/1/2012), subscribe to the Allen Letter professional journal for only $134.95/year (12 monthly issues) and receive it for FREE; or, buy said report for $134.95. Call the MHIndustry HOTLINE cited earlier.

27 February 2012; akin 27 February 2008 & 2009?*1

MHI’s Legislative Conference, NCC Division Meeting & the MHInitiative®

‘a.k.a.’ replaces ‘nee’; a wholly unexpected personal & corporate epiphany;

&, How to know whether a landlease community owner/operator is, by dint of rental homesite count, a small, medium – sized, or large scale participant!

I.

MHI’s Legislative Conference, NCC division meeting, & the MHInitiative®

First the numbers, then substance; followed by items covered & to be covered.

According to MHI’s Legislative Conference & Winter Meeting official list of attendees, there were 79 registrants, not counting MHI staff. Of this number, 17 were state MHAssociation executives; and 62+/- businessmen and women, of whom 16 were landlease community owners/operators, a dozen or so lenders and financial service representatives, eight HUD Code home manufacturers, and several MHRetailers.

Following Monday (2/27/2012) morning’s breakfast buffet, a general session featured presentations by the Honorable Carol Galante, acting commissioner of the Federal Housing Administration & Assistant Secretary for HUD; Tom Davis, Director of Federal Government Affairs for Deloitte & Touches, LLP; and the Honorable Judy Biggers, chairman of the House Financial Services Subcommittee on Insurance, Housing & Community Opportunity (One of two members of Congress who hosted the 1 February 2012 Hearing on the Manufactured Housing Improvement Act of 2000). Luncheon speaker was Mark Calabria, Director of Financial Regulation Studies, CATO Institute, a think tank in Washington, DC.

The National Communities Council (‘NCC’) division met from 2:30 – 4:15PM that day. There was a dozen NCC board members, all landlease community owners/operators present, plus a couple more in the audience. It was announced SUN Communities, Inc., rejoined MHI/NCC, so their CEO, John McLaren was proffered an invitation to serve as this year’s vice chairman of the council. Following the passing of the chairman’s gavel from Steven Schaub of YES! Communities to David Lentz of American Land Lease, the latter shared his thoughts on

• Importance of providing value, and a good customer experience, to homeowner/site lessee residents of our landlease communities

• Commonality of business interests among large and small owners of landlease communities

• Need for unity among NCC members, decrying what he views as self – serving decisions of the few, hurting the majority.

The remainder of the meeting agenda included a description of the 2012 NCC Forum prior to this year’s MHCongress in Las Vegas, NV., and briefings as to various federal legislative issues, particularly the MHCC Fire Sprinkler Position relative to landlease communities.

What else was covered? While not on the meeting agenda per se, it was noted that ‘lease option’, one of a landlease community owner’s self – finance methodology options, briefly discussed at MHI’s annual meeting in Phoenix during October 2011, will be one of the topics featured at the aforementioned NCC Forum this Spring. And the CAS Task Force, named at the aforesaid annual meeting, has not been forgotten, but will be supplemented with representatives from finance firms. Marc Lifset, esquire, briefed the board on the ‘manufactured housing de – titling efforts’ of the National Conference of Commissioners on Uniform State Law – apparently at a ‘stand still’ for the time being. MHI staff was encouraged to see if a landlease community owner/operator member of the NCC could be named to the ‘working group’ being formed by Congresswoman Judy Biggert, pursuant to further attention paid to implementing the Manufactured Housing Improvement Act of 2000. Finally, Steve Adler, an MHEI board member, presented that body’s request for guidance, as to what should be included in a new PHC® variant designed to teach ‘How to Sell Manufactured Homes within a Landlease Community!’

What wasn’t covered, but will likely be so, in the future? In the National Electric Code, 2011 edition, page # 70-489 (para. 550.32 Service Equipment) there’s a paragraph that reads in part:

“The mobile home service equipment (electrical pedestal) shall be located adjacent to the mobile home and not mounted in or on the mobile home. The service equipment shall be located in sight from and not more than 9.0m (30 ft) from the exterior wall of the mobile home it serves.”

Know what? This provision dates back to the early days of our industry (1970s), when manufactured homes were indeed ‘mobile’, and electric pedestals provided for relative ease and safety, when connecting and disconnecting electric power to ‘mobile homes’. There’s little to no reason to continue this archaic practice, as 95% of today’s homes are characterized by one site installation. Steps can be taken to have our contemporary manufactured homes treated as site – built homes, and said electric power brought into the home via service equipment affixed to the side of the home; or, as is more often the case these days, underground, removing eyesore electric pedestals from landlease communities once and for all! How to effect this change? Have a knowledgeable manufactured housing industry representative (including the possibility of a landlease community owner/operator) become a board member of the administering body, OR recruit an existing board member to ‘carry our coals to Newcastle’ – and there is such an individual in place. Bottom line? It appears this matter will finally be given explored.

MHInitiative®. As regular readers of this weekly blog posting know; I attended this year’s Legislative Conference, primarily to see whether MHI elected and salaried leaders would tackle the timely question, ‘How to Save Our Industry?!’ This remains a sensitive issue for many of us. But given the recent hiring of Dick Jennison, as president and CEO of MHI, it’s reasonable to give him space and opportunity to ‘learn our various business model(s)’; then address this (if still) timely and potentially fatal issue. GFA

And, if you aren’t presently a direct, dues – paying member of the Manufactured Housing Institute, and or it’s National Communities Council division, contact Lisa Brechtel via (703) 558-0666 to request membership information, and for the upcoming NCC Forum at the annual MHCongress in Las Vegas, NV., in early April 2012.

II.

‘a.k.a.’ replaces ‘nee’!

Yep, it’s as simple as that! Somewhere along the journalistic line, I came to believe using ‘nee’ in the following fashion, to be correct. It isn’t. For example: landlease (nee manufactured home) community. The correct rendering? Landlease (a.k.a. manufactured home) community. Frankly, a.k.a. doesn’t quite get the job done though, as I was seeking a word that communicates the modified word (i.e. manufactured home) is, or is about to become, passe’, or used less frequently than in years past. Suggestions anyone? In the meantime, I’ll go with landlease (a.k.a. manufactured home) community. Thanks to Joe Stegmayer, former college English teacher, present MHI chairman, as well as chairman & CEO of Cavco Industries, Inc., for that apt observation and correction! GFA

III.

A Wholly Unexpected Personal & Corporate Epiphany!

And that’s what it was; “a sudden, intuitive perception of, or insight into reality…often initiated by some simple, commonplace occurrence”, truly an epiphany. Webster’s Dictionary.

It was Sunday afternoon, 26 February, hours before leaving my hotel in Arlington, VA., to participate in MHI’s Manufactured Housing Educational Institute board of directors meeting. I was sitting there, quietly planning for the upcoming Legislative Conference and aforementioned NCC meeting, when all of a sudden, the following recollection and inspiration occurred to me:

“18 years ago, it took 18 (then) manufactured home community owners, to convene, on 8/31/1993, and get their realty asset class’ national advocacy movement started! And here we are 18 years later, and that ‘mid – 1990s, REIT formation – driven initiative’, appears to maybe be at an impasse, given that only 16 (now) landlease community owners/operators are in attendance at this year’s MHI Legislative Conference – and only one of those can be numbered among the original 18 Industry Steering Committee (‘ISC’) members! The good reality however, is that we do indeed have trade and advocacy representation in Washington, DC, via MHI’s NCC division.” GFA

Here’s the epiphany.

“As of today, 27 February 2012, I begin the quiet search for a ‘new 18’ veteran and successful landlease community owners, motivated and capable of ensuring their property owner/operator peers, large and small, throughout the realty asset class, have sufficient statistical data, educational opportunities, communication resources, networking and deal – making opportunities, now and into the future!” GFA

At this juncture, let me be clear; we’re NOT talking about national or regional political and regulatory agency ADVOCACY here! The epiphany is simply a logical means by which to ensure, along with the planned academic research emphasis of the Center for Manufactured Housing Research – and Affordable Housing, that perennial ALLEN REPORTs, Manufactured Housing Manager® professional property management training & certification, subscriber – supported monthly newsletters & Signature Series Resource Documents (‘SSRD’), weekly Official MHIndustry & LLCommunity blog postings, and annual International Networking Roundtables and periodic FOCUS Groups continue, rather than cease, when I bring my working career to an end during the next couple years. Previous attempts to merge with other bodies have failed, so this is a new and quiet beginning to ensure adequate resources for our asset class on into the future.

If you’d like to talk about this matter further; better yet, express sincere personal interest in being one of the aforementioned ‘new 18’ veteran and successful landlease community owners, motivated and capable of ensuring the future of our asset class in the manner just described, contact me via: GFA c/o Box # 47024, Indianapolis, IN. 46247 or the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

IV.

How to Know Whether a Landlease Community Owner/operator is, by dint of rental homesite count, a small, medium – sized, or large scale participant!

As you likely know; more than 23 years ago, the decision was made, that to be identified as a landlease community portfolio owner/operator, a sole proprietor, partnership, or corporation, would have to own and or fee – manage five such properties or 500 rental homesites. This remains the ‘portfolio qualification standard’ to this day, relative to the aforementioned ALLEN REPORT and other research documents.

Then, 15 years ago, this question was posed, ‘What are the individual and corporate – owned landlease community investment categories, within this unique income – producing property type?’ Well, that wasn’t as easy to delineate, but past and present practice goes like this:

• An Institutional &/or Investment Grade Landlease Community usually contains 175 – 200+ rentable rental homesites

• A Young Wealth – Builder Landlease Community is characterized as being 75 or 100 to 175 or 200 rentable rental homesites in size.

• A Mom & Pop – sized Landlease Community generally features 100 and fewer rentable rental homesites. This category constitutes about 85+/-% of our national inventory of this unique, income – producing property type.

Now, we turn our attention to the question about how to best differentiate among small, medium – sized, and large scale property portfolio owners/operators of landlease communities. Here’s what we’ve come up with to date.

Collectively, 10 to a maximum of 499 rentable rental homesites, in one or more landlease communities in one property portfolio, describes a small owner/operator.

Collectively, 500 – 2,000 rentable rental homesites, in one or more landlease communities in one property portfolio, describes a mid – sized owner/operator.

Collectively, 2001+ rentable rental homesites, in one or more landlease communities in one property portfolio, describes a large scale owner.

Now you know. Furthermore; if you have an opinion, or refining thoughts, on this subject, and are willing to share it; please let us know.

*** End Note: 1. 27 February 2008 & 2009 refer to the first two National State of the Asset Class (‘NSAC’) caucuses, held respectively in Tampa, FL., and Elkhart, IN., on those identical day/month dates in those consecutive years. See earlier blog postings for detailed descriptions of historic measures that came from both events.

George Allen, CPM®Emeritus, MHM®Master
Consultant to the Factory – built Housing Industry &
The Landlease Community Real Estate Asset Class
Box # 47024, Indianapolis, IN. 46247
(317) 346-7156