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

Input HUD’s Agenda; MHRetailers & LLCommunity Home Sales; and, NSAC Caucus movement to become MHInitiative® in 2012?

I.

Your Opportunity to Input HUD’s Research Agenda!

Thanks to Bob Brophs (pronounced Bross), retired Missouri MHRetailer and landlease community owner/operator, for bringing the following timely opportunity to our attention.

PUBLIC COMMENT ON HUD RESEARCH AGENDA

“Over the next 5 – 10 years, what we need to know to improve knowledge gaps that are affecting the execution of good housing and community development policy and practice? HUD’s Office of Policy Development & Research (‘PD&R’) is in the process of formulating its’ research agenda for the next 5 – 10 years, and would like your input. We invite you to think critically about the above question as it relates to four targeted topic areas:

Homeownership and finance. HUD’s goal = “Strengthen the Nation’s Housing Market to Bolster the Economy and Protect Consumers.”

Rental housing. HUD’s goal = Meet the Need for Quality Affordable Rental Homes.”

Housing as a platform. HUD’s goal = “Utilize Housing as a Platform for Improving the quality of Life.”

Communities. HUD’s goal = “Build Inclusive and Sustainable Communities Free From Discrimination.”

To ensure appropriate consideration, be sure to submit your ideas and suggestions in writing, no later than November 4th, 2011. Send your input to HUD USER c/o P.O. Box # 23268, Washington, D.C. 20026-3268.”

Don’t know ‘bout you, but the areas I’m seriously considering commenting on have to do with the following:

Affordable Housing. This still needs an industry – country – government wide ‘official’ working definition and description – especially if ‘more than one’ methodology (there’re presently a half dozen alternatives) is to be codified and widely communicated within and outside HUD. For more on this variegated subject, read HOUSING AFFORDOGRAPHY.

HUD Code manufactured housing. It’s way past time for HUD to actively promote the type factory – built housing it regulates! Today, HUD Code manufactured housing is the most cost effective, quality, energy efficient, non – subsidized BUT under promoted housing type in the U.S.! Again, HUD does little to popularize manufactured housing.

Landlease (nee manufactured home) communities. Given the affordability of HUD Code manufactured homes, particularly Community Series Homes (‘CSH’) designed for placement in this unique income – producing property type, AND given rental homesite rates in sync with other forms of multifamily rental communities in the same local housing markets, there is no more affordable housing lifestyle than LLCommunities!

So, are YOU now inspired to write and comment on HUD’s Research Agenda for the year ahead? I surely hope so. Remember, the DEADLINE is soon: 4 November 2011.

I also challenged an eclectic mix of the ‘five most forward – thinking and influential leaders I know’, in the HUD Code manufactured housing industry and landlease community asset class, to comment on HUD’s Research Agenda. Even offered to publish their commentaries and recommendations (to HUD) in an upcoming issue of the Allen Letter professional journal, or this weekly blog posting. Well, guess what? I’m making the very same offer to you, blog floggers (readers)! Send me your commentary to HUD on its’ Research Agenda, and I’ll do my best to get you published as well! Send your input via FAX (317) 346-7158 or email: gfa7156@aol.com or via ‘snail mail’: GFA c/o Box # 47024, Indpls, IN. 46247.

II.

Coming Soon: the first ever, National Summit for Independent ‘street’ MHRetailers & in – Landlease Community Home Salescenter Operators!

Yep, you read the headline right! On 13 – 15 November 2011, at the historic Drake Hotel in downtown Chicago, independent ‘street’ MHRetailers and landlease community owners/operators selling new and resale homes on – site, from throughout the U.S., will convene for 2 ½ days to…

Understand, negotiate, even compromise with one another, to market and sell more HUD Code manufactured homes, as well as enhance the potential for additional bottom line profits throughout both segments of the industry!

To this end, National Summit organizers and sponsors, Rainmaker Consulting, of Davenport, Iowa, researched and prepared a comprehensive eight page White Paper, identifying issues and trends keeping these parties (home manufacturing/distribution & realty development/investment) apart, rather than working together, during the past decade. White Paper authors, Bill Carr & Chad Carr, sought and received timely experiential input from Dick Moore; Ken Rishel; Jim Reitzner, MHM; Greg Harmon, MHM; and this industry observer, including several other commentators. The initial public presentation of this White Paper will be in the November issue of the Allen Letter professional journal. To subscribe, simply phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

But the real news here is the upcoming historic National Summit for Independent ‘street’ MHRetailers and in – Landlease Community Home Salescenter Operators. Given the nature and goal of this ‘coming together’, i.e. to market and sell more manufactured homes, as well as enhance the potential for additional bottom line profits, it’s anticipated this will be a sold – out venue by the time the Sunday, 13 November convening date arrives. National Summit registrants will receive a copy of the White Paper, to orient their discussions at the National Summit begins. If a ‘street MHRetailer’ or ‘LLCommunity sales center operator’, are YOU registered yet? To do so, and or request additional information, contact Rainmaker via (800) 336-0339 or email gill@getrain.com

III.

NSAC Caucus Movement of 2008 & 9 to become MHInitiative® in 2012?

Given the successful – and evolving scope of the National State of the Asset Class (‘NSAC’) caucuses @ 2/27/2008 in Tampa, FL. & 2/27/2009 in Elkhart, IN., year 2012 appears to be when all segments of the HUD Code manufactured housing industry and landlease community asset class, ‘come together’ to collectively discuss and figure out ‘How to Save Our Industry?!’

Remember? The NSAC – I caucus involved LLCommunity owners/operators only, gathering from throughout the U.S.. The NSAC – II caucus, however, included HUD Code home manufacturers and LLCommunity folk! And now, the NSAC – III caucus, following an intentional two year hiatus – awaiting MHIndustry leaders to ‘come to our collective rescue’; and, given a broader ‘caucus’ scope affecting all segments of the MHIndustry and LLCommunity asset class – warrants a more inclusive moniker, that of MHInitiative®. As a related aside; summaries of NSAC caucuses I & II, including positive measures adopted therein, are contained in Landlease Communities, Manufactured Home Communities, Mobile Home Parks, Trailer Courts & Camps, and Affordable Housing, available from PMN Publishing for $24.95 (postpaid) via the MHIndustry HOTLINE mentioned earlier.

Why the semi – acronym MHInitiative®? Well, anyone who’s read my books, newsletters, magazine columns and features since 1988, is familiar with the many Allenisms® I’ve created during the past two plus decades. Here’re some that have endured the test of time: MHIndustry, short obviously, for ‘manufactured housing industry’; then MOPHEAD (a proword for ‘Manufactured Housing Opinion/Editorial), a column I used to pen for The Journal; likewise, MHRetailers and LLCommunity (Latter has replaced MHCommunity, both semi – acronyms, respectively, for landlease community and manufactured home community); also MHActivist; and, this ‘play on words – or abbreviations’, for our two national advocacy bodies: ‘MHI (‘MY’) MHARRvelous Dream for the MHIndustry!’ (Title of a past blog posting); then there was manufractured housing – recognizing our industry’s nadir of new home shipments. Even the ‘Ah Ha! & Uh Oh!’ label for our popular housing price calculation worksheet is an Allenism®, by dint of ‘Ah Ha’ being an apt abbreviation for ‘affordable housing & housing affordabilty’ (Thanks to Creighton Weber of Wells Fargo for that suggestion!), while ‘Uh Oh!’ is the understandable exclamation of a homebuyer when he or she realizes they’ve purchased more home than they can afford! And the list goes on….

So, what’re the plans for a MHInitiative® caucus in early 2012? Well, they’re still, as we say, ‘on the drawing board’. But it’s already been suggested the initial MHInitiative®, with its’ goal to decide ‘How to Save Our Industry?!’, be scheduled for 2/27/2012 – continuing a triparte (‘Good Luck’?) date pattern begun five years ago in 2008. While there’s already another meeting scheduled on that date, given the unique nature and goal of this MHInitiative® caucus, i.e. ‘How to Save Our Industry?!’, it’s doubtful many seriously interested stakeholders (e.g. business owners) will overlap.

Does this MHInitiative® caucus, across all MHIndustry segment lines, interest and excite you? Seriously enough, to respond to this preliminary announcement with encouragement, even commitment, to attend a 1 ½ day – or longer meeting, in a warm climate, during late February 2012? If so, now’s the time to add your name to the 75+/- names of individuals already committed to caucus, discuss and plan via brainstorming and other creative – yet – practical methods for improved and effective industry planning, ‘How to Save Our Industry?!’ Ask yourself: “If this MHInitiative® caucus doesn’t take such a vital and historic step NOW, in early 2012, WHO will do so & WHEN?” The answer? ‘Likely, no one, ever!’

So, the choice is: Do NOTHING and hope the MHIndustry doesn’t’ die, and LLCommunities decline further; OR, as a business owner, invest the necessary resources to examine the challenges facing our industry and asset class, with an eye to identifying solutions; then going about implementing same, when and where possible, with whomever can ‘get the job done’! Finally, if you’re bona fide business stakeholder in the manufactured housing industry and or landlease community real estate asset class, and related industry segments, communicate your interest and commitment via (317) 346-7156 or email: gfa7156@aol.com If not, please pass this announcement onto the head of the firm for which you work!

***

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

Potpourri of U.S. Congress, MHI, NSAC III and $ Primer
Matters – & More….

I.

Congressional Research Service Prepares Report on MHIndustry!

During mid September 2011, an Analyst in Housing Policy, for the Congressional Research Service, contacted this manufactured housing industry and landlease community asset class observer and author, for assistance in editing and fine – tuning their DRAFT report titled: ‘The Manufactured Housing Industry: An Overview’.

This 20+/- page DRAFT report defines manufactured housing and describes the HUD Manufactured Housing Standards Program; followed by characterizations of Dealers (Recommended this be changed to ‘retailers’) and manufactured home communities (Recommended this be changed to landlease communities). Much of said DRAFT report deals with HUD Title I loans, VA – loan guarantees & RHS loans, as well as expected effects of the S.A.F.E. and Dodd-Frank Acts on the MHIndustry. Report also describes markets served by our industry, trends in shipments during the past several decades, and ‘problems’ with manufactured homes, relative to site preparation and installation, plumbing and moisture, heating and air conditioning, and more.

The area I took strongest exception to, was the analyst’s inclusion of what I viewed as questionable information from IBISWorld Special Reports. Remember them? The first one, titled ‘Dying Industries’, included their view of MHRetailers, was distributed in March 2011. At the time, I’d read and critiqued it heavily – but to date, haven’t received the courtesy of a reply from the publisher, whose motto incidentally, is ‘Where Knowledge is Power’ – even when their ‘knowledge’ is inaccurate and or incomplete. The second one, distributed in September 2011, has to do with ‘Land Leasing in US’ – was also, in my opinion, awash in flaws relative to our unique income – producing property type. Haven’t responded in writing, to that one. After all, why waste time penning a critique to a publisher who’s already demonstrated an intransigent nature.

So, when will YOU get to read ‘The Manufactured Housing Industry: An Overview’? I have no idea – if ever. But my ‘take’ on the matter is, this report was requested by Congress, as more and more Congressmen recognize the reactionary and ill – advised S.A.F.E. & Dodd-Frank Acts have effected business – killing strangleholds on the sole remaining sources of truly affordable housing (i.e. factory – built housing in general, and HUD Code manufactured housing in particular), as well as the most affordable, non – subsidized housing lifestyle (i.e. landlease, nee manufactured home, community living) left in the United States today! Let’s hope all Congressmen read ‘The Manufactured Housing Industry: An Overview’, and come to our rescue with regulatory relief, stimulating new housing production and shipments, creating thousands of new jobs along the way, as closed factories reopen! For that matter, why not help this thought materialize, by printing off and sending this blog posting, to your Congressman ASAP!

As a related aside; it’s already been observed on several fronts, the Congressional Research Service seeking input from the fledgling national, not for profit, Center for Manufactured Housing Research (Or whatever it winds up being named during the months ahead), is tacit recognition of and support for, third party, nonpartisan, academically – based industry and asset class research that’s only existed sporadically, for manufactured housing and landlease communities, during their 60+ year history! All the more reason for YOU to get aboard NOW, in support of this much – needed research and resource center, going into 2012. If you haven’t already done so, make your moral and financial support known, by responding to this blog posting via gfa7156@aol.com or via the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. To date, more than a dozen LLCommunity portfolio owners/operators, and senior manufactured housing industry executives, have stepped forward in this fashion! Let’s continue to make MHIndustry & LLCommunity history together….

II.

Results of MHI Survey of Attendees @ its’ Annual Meeting, & More…

Nearly half the 110 registrants attending this year’s Manufactured Housing Institute annual meeting completed and submitted two page questionnaires soliciting input relative to the State of the Manufactured Housing Industry. Here’s a brief summary of results displayed during a Power Point Presentation the final morning of that three day session. Nature of respondents? 27% = suppliers; 22% = association executives; 13% = HUD Code home manufacturers; 11 = finance – related; and 9% each for LLCommunity reps, MHRetailers, and ‘others’.

Advantages of factory – built housing? 22% said price; 21%, time to completion; and 19% each for opted for quality, design, amenities, and lifestyle.

What’s greatest impediment to increasing factory – built home sales? High employment cited by 21%; then, 20% each for financing, image, and consumer credit problems; and consumer confidence came in at 19%

What will happen in the overall new – home market during the next two years? 60% believe it’ll ‘stay about the same’; 28% think it’ll ‘improve’; and 12% say it’ll ‘decline’. What do YOU think?

Do you think our (national) market share will increase during the next two years? 52% indicated NO, and 47% indicated YES.

Will homeownership continue to be as a big priority for new generations entering the housing market and forming new families? 61% said YES, and 38% said NO.

Well, there you have it. As one who took much time to complete the lengthy, detailed questionnaire, I was disappointed there wasn’t ‘more’ to this summary. Perhaps MHI staff plans to publish additional insights, in one or another of their communiqués, during the weeks and months ahead. Let’s hope so. But then again, maybe not.

On a different, but related MHI subject. Are you, like me, one of those direct, dues – paying members, who see MHI as a ‘manufacturer dominated institute’, but wonder if change might be afoot? We’ve all heard the bromide: ‘Follow the money!’ No ‘diff’ here. During year 2010, 55% of all ‘dues revenue’ was paid by the Manufacturers Division (I believe that percentage as high, or higher, than 75% during 1990s heyday); and 18% of ‘dues revenue’ now comes from the National Communities Council Division (up from 0% before NCC was founded @ 1/1/1996); with 12% from the Suppliers Division; 8% from the Financial Services Division; and 7% from State Association dues. This data obtained from MHI’s 2012 Proposed Budget. Now you know…

III.

Work on 2nd Edition of Manufactured Housing $$$ Primer Begins

Last year’s best – selling manufactured housing – related book, the Manufactured Housing $$$ Primer is nearly out – of – stock, and in need of updating (i.e. addition of How To information regarding lease option self – finance methodology, renting homes on – site, and more) and expansion (i.e. inclusion of new resources and firms relative to chattel and land/home finance mortgage origination, as well as loan servicing). You may recall this was the first book ever published, describing chattel (personal property) financing as it relates to HUD Code manufactured housing, especially those sited on rental homesites in landlease (nee manufactured home) communities. Do YOU have a copy? If not, you might be able to snag one of the few dozen remaining copies, for only $19.95 (postpaid), by phoning PMN Publishing via (317) 346-7156.

Letters went out this week to the nearly two dozen MHIndustry writers who contributed manuscripts for the first edition of the Manufactured Housing $$$ Primer; along with ‘invitations to participate’, to a half dozen or so new writers. And this is where YOU might come into the picture. If you’re presently and actively involved in one or another aspect of chattel finance (e.g. as a loan originator, independent third part lender, servicer; and or LLCommunity owner engaged in self – finance on – site) and would like to be considered for participation in this second edition, pen correspondence to me, describing the aspect you feel most qualified to write about – and explain why. One particular topic I’d like to address, this time around, is the effect of having ‘park – owned homes’ on – site, either as ‘rentals’ or ‘contract sale’ units, relative to when one (the LLCommunity owner) decides to refinance or market the income – producing property ‘for sale’. Any takers? We really would like to increase participation in this industry wide educational project. OK to email your communiqué, or mail it to GFA c/o Box # 47024, Indianapolis, IN. 46247. Deadline? Soon! The end of This Week, 21 October 2011. Once the new writing team is formed, we’ll set reasonable manuscript submission deadlines.

IV.

And Here’s What Your Peers Have to Say, via Email, about MHBusiness….

“I’d like to bring up what I feel is a major issue in our MHIndustry. That is, all our Seniors. My major market has been Seniors since I got involved back in 1976. They buy our homes for cash, have excellent credit, pay on time, are easy to manage, and stay until something bad happens to their health. But with all the new Senior complexes being built, I’ve lost a major portion of my Seniors market. I cannot compete with them.” Anyone else facing this challenge, and have suggestions for this fellow LLCommunity owner? With enough helpful response, we’ll build a future blog posting around this hot topic.

“How we find and provide (manufactured) houses is where everyone is going in different directions. But is that a bad thing? And does that mean the industry is dying? I am not sure it means that. But what it does mean, is the business is not as profitable as it used to be, when we factor back in, the capital costs of buying the homes, whether new or used. And since it’s now difficult, or certainly less profitable, to do self – financing, that makes it harder to recycle one’s capital to acquire more houses and or communities. So, we do ‘rentals’ to get our capital costs back faster. The industry is evolving, not dying.” DH Does your experience mirror this owner/operator; or do you have a different ‘take’ on the matter? Let’s hear from you ‘renter’ aficionados out there? Another hot blog topic?

“As to a third national grassroots caucus of manufactured housing and landlease community stakeholders, meeting in late January or early February 2012, YES, I would participate, and bring along one or two business associates from the Pacific Northwest. We need to ‘Save Our Industry!’” GH Here the writer is talking of anticipated plans to host National State of the Asset Class III. Long time blog readers will recall NSAC – I, was held on 2/27/08 at FountainView LLCommunity in Tampa, FL. Want to be involved in planning and ‘spreading the word’ about this timely and strategic brainstorming session? Let me know, via any of the means described earlier in this blog posting. By the way, who remembers the tangible result of a national brainstorming session held in Indianapolis, IN., on 8/31/1993? Answer: Formation of the Industry Steering Committee (‘ISC’) predecessor, to today’s National Communities Council (‘NCC’) division of the Manufactured Housing Institute (‘MHI’). Brainstorming works, so let’s do it again!

Pertaining to the identification and recruitment of private investors to supply working capital for self – financing new and resale home sales on – site in landlease communities. “It’s been done for years, but everyone has played their cards so close to their vest, afraid to disclose the names of investors they’re dealing with, etc.. With other (independent, third party) financing alternatives unavailable, or too onerous to deal with (Need I identify those firms who’ve, as one wag puts it, ‘Taken all the risk out of lending chattel monies to landlease community owners.’? GFA), a widespread private investor program could be a huge success, maybe even part of the salvation of our MHIndustry. Also, it dovetails nicely with lease option financing.” (edited) SR. and know what? Ken Rishel of Rishel Consulting, teaches LLCommunity owners, and independent MHRetailers how to do this – raise private capital to underwrite chattel loans. Call (217) 971-3968 for info.

“Hope (industry) events lead to ‘new’ turks taking the lead, and the ‘old’ turks bowing out.” NB ‘Reacting as a bona fide old turk, “Ouch!”’ But I do understand the sentiment. However, a counter to that thought is, ‘a woeful lack of experience’ on the part of many, if not most, New Turks – described in this blog posting a couple weeks ago. Here’s but one example: Rental units (manufactured homes) on – site in landlease communities. To a man (& woman), every Young Turk I talk to, thinks ‘rentals’ are a new and exciting business model for filling vacant rental homesites! First off; the concept is not new – it’s how we filled tens of thousands of vacant ‘lots’ back in the 1970s, then converted them to ‘contract sales’ when the time came to market the properties ‘for sale’. We often rented 14X70 duplex model homes, with a family living in each end of the home! No, ‘rentals’ are not new, but Yes, they can be exciting. But mostly in a negative ways, when one opts to ‘work harder, not smarter’, collecting rent by the month (Rather than by the week, like many of us did in the 1970s), then spend a whale of a lot more money on the maintenance ‘get ready’ of rental units, plus management time to oversee an ‘apartment community’.

“When you were born, you cried and the world rejoiced. Live your life, so that when you die, you will rejoice and the world will cry.” DW A personal and heartfelt response, by a ‘friend in the MHBusiness’ upon reading last week’s ‘Dreamin’ blog posting.

Here’s something we don’t see every day! FALLING PRICES on new HUD Code homes! ‘Our Sale Ends Monday, October 17th, 2011.’ So proclaims the internet flyer recently received from Eric Steadman, website correspondent with Factory Expo Home Centers. For details, call (800) 965-6821. Think this outfit is out of Chandler, AZ. If interested, phone Eric on Monday – that’s tomorrow, to beat the home sale deadline!

V.

Jonathan Douglas Sharp (Jon Sharp to his buddies) of Onyx Capital, succumbed to cancer on 11 October 2011. He will be long missed!

Thanks to several of you, for bringing this sad occasion to my attention. Want to read more of Jon’s saga? Go to www.jonathansharpnews.com

&

Kristian Jensen, Jr., ACM®, 2nd generation owner/operator of landlease community portfolio Jensens, Inc., a longtime supporter of MHI, has died.

For a detailed summary of his service to our industry and asset class, read MHI’s current Week in Review on line. More than likely, his son, Kristian Jensen, III, ACM® succeeds.

***

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

I.

Dreamin…

It’s been a day and a half of meeting after meeting after meeting. The Manufactured Housing Executives Council (‘MHEC’) was certainly interesting. Despite a couple state execs monopolizing conversation, we learned of the renewed business model (circa 1970s) utilizing ‘rental units on – site’ in landlease communities in Florida. And Massachusetts is considering opening its’ membership rolls to resident – owned (i.e. ‘co – ops’) LLCommunities there. West Virginia is rewriting ‘park rules & regs’ for the first time since 1971; and the heretofore inspiring regional marketing program, Northwest Pride, is in limbo for now. Wisconsin doubled its’ ‘unit dues’ by banking voluntary assessments of $75.00 per resale home sold in that state. And New York continues to bank non – dues revenue by facilitating installation and professional property management certification (‘Manufactured Housing Manager’) classes, as well as profitable annual Super Symposiums! Most memorable ‘quote of the day’ was voiced, when discussing errant software suppliers who, “Sell you the dream and service the nightmare – for a big price!”

National Communities Council? As usual, the most heavily attended session of the 17 scheduled at this year’s MHI’s annual meeting in Phoenix., with 58 of the 110 registrants present. An attempt to gauge “How do you feel about the idea of an image campaign?” (&) “…name one thing you would deem a TOP PRIORITY for the NCC to work on…” was a non – starter! One simply can’t ask 58 individuals to speak, even for a minute apiece – on these, or any other subject, and conduct a 1 ½ hour business meeting. After giving the S.A.F.E. Act & Dodd – Frank regulatory imbroglios their due, Spencer Roane, from Georgia, challenged the NCC to research, then educate LLCommunity owners and operators about ‘lease – option financing’. For information on this topic, go to LeaseOptonMHSales.com or phone (678) 428-0212. A Community Attributes System (‘CAS’) Task Force was formed, to update and improve that underutilized resource. A contrarian quote, heard at the NCC meeting, came out like this: “Stop being all things to all people and get back to the trailer business!” Huh? Maybe a kernel of truth in there?

Onto the Awards Dinner, sponsored by Triad Financial Services, in Grande Ballroom Salons ABE. “Hmm. Maybe shoulda taken a nap this afternoon. Why am I so very tired all of a sudden? Oh well, dinner’s over and the awards program starts soon….
ZZZZZZ…”

‘Tonight’s Chairman’s award goes to an MHI member who’s been in the manufactured housing and landlease community business for more than three decades.’

‘Besides earning bona fides as an on – site and regional property manager, and as a present day community owner, this person has enriched the business experiences of his peers, throughout the U.S. and Canada, in many ways.’

‘For more than two decades, this individual has researched and published, frequently at his/her expense, key benchmark statistics which, since the early 1990s, have positioned landlease communities as viable and valuable real estate investment alternatives in private and public markets. Over the years, this person has authored, co – authored, and edited ten books on various aspects of management, manufactured housing, ‘affordable housing’, housing finance, & the landlease communities.’

‘For more than 21 years, this landlease community owner has penned, printed and published monthly newsletters, magazine columns, features, and editorials for colleagues, informing them of trade news, upcoming industry events, ‘How To’ effect various property management methodologies, and much much more.’

‘For two decades, this individual and his family members, have hosted annual national gatherings, at resort hotels throughout the U.S., for property owners and portfolio operators, providing top notch education, interpersonal networking, and incomparable deal – making opportunities.’

‘This person is also the co – founder of no fewer than three national trade and advocacy bodies, for landlease communities in the U.S. and Canada; has served on the governing boards of two state manufactured housing trade associations; and served as state president of a professional real estate management organization.’

‘For more than a decade, this individual has shared professional property management expertise and experience with landlease community owners/operators throughout North America, personally training and certifying nearly 1,000 Manufactured Housing Managers to date.’

‘And twice, during the past several years, this individual has convened national caucuses for landlease community colleagues, on one hand; and HUD Code home manufacturers, on the other, to discuss industry and asset class issues, then achieving consensus, relative to ‘conduct of business going forward’ on one hand; and, the need for new manufactured homes designed for in – community marketing, sales and siting.’

‘Finally, this individual has been feted by the Institute of Real Estate Management as an Emeritus member, inducted into the RV/MH Heritage Foundation’s prestigious Hall of Fame, and honored as manufactured housing’s ‘Industry Person of the Year’.’

‘Most significant of all, this person has been married for more than 45 years, is blessed with two adult children – successful business entrepreneurs in their own right, six grandchildren – one of whom is a U.S. Marine, and two great grandchildren! And is one of the few MHI members who’ve been decorated for leadership in combat during the Vietnam War, and service during Desert Storm.’

‘So, at this time, join me in honoring one of our colleagues, with this year’s Chairman’s Award!’

“Umph. Musta dozed off. Hmm. What’s all the clapping about? Oh, they’ve just announced this year’s Chairman’s Award. Who is it? Oh, Tim Williams, President of 21st Mortgage Corporation in Knoxville, TN.! Good man, Tim! OK, now we’re all gonna stand. Good, need to stretch and get awake here. Man, that was some dream….”

And I’ve reconciled myself to the fact it will always be that, a dream.

***

II.

Then There’s Stark Reality

Step II of the three step, ‘How to Save Our Industry?!’ sequence has occurred.

If a regular reader of this weekly blog posting, you know Step I happened in mid – September, at the 20th International Networking Roundtable in San Antonio, TX., In large part, Step II was the public announcement of plans to launch a new national not for profit platform, to ensure continuation of valuable and timely research and resources, for and in behalf of landlease community owners/operators, throughout North America. Have YOU signed – on as a moral and or financial supporter yet? See final paragraph, here following, for contact information.

Step II was anticipated to occur at the Manufactured Housing Institute’s annual meeting in Phoenix, AZ., from 2 – 4 October 2011. Frankly, the unofficial industry wide theme of ‘How to Save Our Industry?!’ was a non – starter! Oh, there were hints of theme awareness, but no decisions, no plans, and no action, whatsoever. The hints?

• Aforementioned futile attempt to let 58 NCC meeting attendees comment on the need – or not, for an ‘image campaign’, and to identify a TOP PRIORITY issue for 2012. No results whatsoever. This was worthy of a session all its’ own.

• A two page questionnaire was distributed early, to all registrants; then collected, tallied, and communicated, via PowerPointPresentation, during the morning of 4 October. Here too, little was accomplished, given minimal open discussion, and certainly no consensus plan of action pursuant to ‘How to Save Our Industry?!’

So, where does that leave us today, relative to maybe – or maybe not, moving ahead with Step III during early 2012?

Frankly, I don’t know at this point. But putting that matter and question into abeyance for a week or more, is the prudent and patient thing to do. After all – and get ready for this; THE ANNOUNCEMENT, during the governing board session at MHI’s annual meeting, of Thayer Long’s RESIGNATION as executive vice president of the institute, was a shocker – maybe even a game changer! How so? Think about it; the possible ramifications. So again and for the moment, let’s absorb this surprise before turning our collective attention to how a change in salaried leadership might impact this ‘How to Save Our Industry?!’ theme. Who knows; MHI might use this opportunity to become an advocacy body more balanced in representation, among all the membership segments of the manufactured housing industry and landlease community asset class.

In the interim, I need to hear from you – again, as to what YOU think the manufactured housing industry and landlease community real estate asset class should or might do to ‘Save Our Industry?!’ going forward. For example, would YOU support, by your participation, a third national grassroots caucus of manufactured housing and landlease community stakeholders (i.e. Those with actual ‘skin in the game’ as business owners and senior executives) during late January or early February 2012, likely in a warm climate, maybe central Florida? Phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or (317) 346-7156, email: gfa7156@aol.com, or write: GFA c/o Box # 47024, Indianapolis, IN. 46247. Nearly 50 of you have already expressed support.

Remember; there’re precedents for such a timely and focused event! On 2/27/2008, 100+/- LLCommunity owners/operators gathered at the FountainView LLCommunity clubhouse, in Tampa, Florida for the first National State of the Asset Class (‘NSAC’) caucus. There they agreed on Five Action Areas to guide their Business Futures during the years ahead. And know what? 3 ½ years later those foci continue to guide! A year later, on 2/27/2009, 100+/- HUD Code home manufacturers & LLCommunity owners/operators assembled at the RV/MH Heritage Foundation’s Hall of Fame facility in Elkhart, IN., for NSAC caucus II, to collectively answer the question: ‘How to Sell More Homes into Landlease Communities?’ And know what? Their solutions marked the birth of the Community Series Home (‘CSH’) design concept – in effect to this day, and the appointment of nearly three dozen Business Development Managers (‘BDM’). Is it indeed time for NSAC caucus III? That’s up to YOU! Do YOU believe we can openly discuss, and eventually agree on solutions answering ‘How to Save the Our Industry?!’ I do, but cannot do so alone! GFA

***

III.

ERRATA

Did you receive John Grissim’s 1 October issue of ‘The Grissim Perspective’ newsletter? If you want to continue to receive this communiqué for FREE, write ‘newsletter’ on the subject line (NOT ‘perspective’ as was requested first time around). If you didn’t receive it at all, but would like to peruse a copy, contact John Grissim via john@grissimguides.com

***

IV.

TITILLATION

Two weeks ago, this weekly blog posting featured this headline, ‘Yet Another New Era, or a Chicago Renascence, dawning?’ Well, all three leading indicators hinted at therein, remain in play; and you’ll likely read about them first, here, if and as they occur.

Well, there’s yet more intrigue afoot, this time at the very top of one of our relatively few remaining HUD Code manufactured housing industry firms. Only other hint I’ll give you, is that if the anticipated change materializes as expected, it’ll underscore the present day importance of sales expertise, experience, and motivation.

***

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

Manufactured Housing History & Future by Degrees

Remember the old canard regarding college degree abbreviations with dual meanings, such as BS, or bulls _ _ _? Followed by an MS degree, or ‘more of the same’; and finally, the coveted PhD degree, where it’s ‘Piled higher and deeper!’

Well, apparently the time has arrived, to realize and be motivated by parallel degrees (of frustration), relative to HUD Code manufactured housing’s history, present and future, as a sustainable business enterprise. For more than 13 years we’ve suffered our own form of BS, as in ‘Below average Shipments’. And as we near the end of year 2011, we’re experiencing profound MS, as in ‘More of the Same’, having been driven to our industry’s historic 60 year nadir point. But now, like the Brazilian bareback bull rider (from whom this metaphor is borrowed), we’re indeed PhD: ‘Poor, Hungry & Driven’, to find and win, once and for all, our way out of this upside down national housing market!

How are we accomplish this fete? Well, in this veteran industry observer’s opinion, there’re two initiatives afoot, when there should be but one. However, we could wind up with three by year end – OR only ONE, if the ‘third’ comes on like gang busters!

I.

The first initiative began 2/27/2008 at National State of the Asset Class caucus I, convened at the all – adult FountainView landlease community in Tampa, FL. There, 100+/- portfolio owners/operators gathered, and before leaving, agreed on Five Action Areas to guide their collective Business Future during the years ahead. Much of that initiative remains ‘in play’ 3 ½ years later, evidenced by Green Courte Partners’ founder Randy Rowe in his Five Part Plan to Save the Manufactured Housing Industry, keynote address delivered at the 19th annual International Networking Roundtable in Phoenix, AZ., September 2010; then recorded for posterity, in the 22nd annual ALLEN REPORT – still available for purchase, from PMN Publishing via the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764..

The national caucus initiative took a different direction a year later, as 100+/- HUD Code housing manufacturers and landlease (nee manufactured home) community owners/operators met together, for the first time in manufactured housing history, at the RV/MH Heritage Foundation’s Hall of Fame, Museum & Library facility in Elkhart, IN., on 2/27/2009. During NSAC caucus II, the Community Series Home concept (i.e. specially designed singlesection homes & smaller multisection homes for siting in LLCommunities) was birthed, and two dozen Business Development Managers (‘BDM’) named by the manufacturers – to specialize in marketing CSH models to communities. Much of this initiative too remains ‘in play’ 2 ½ years later, as evidenced by the presence of CSH models on display, and presence of BDMs at every Networking Roundtable since then!

The next manifestation of the first national initiative played out recently at the 20th annual Networking Roundtable in San Antonio, TX., when a record number of 200 registrants learned of plans to ensure continuation of landlease community research and resources they’d come to rely on during the past 30 years. This event was widely referred to as Stage I of ‘How to Save Our Industry?!’

NOW attention is focused on the Manufactured Housing Institute’s annual meeting, during the 75th year of its’ existence, in Phoenix, AZ. What’s expected to happen? Hard to say. Nothing on the published agenda suggests any Big Picture initiative relative to ‘How to Save Our Industry?!’, but one never knows for sure, until the event (a.k.a. Stage II) begins on 2 October and ends 4 October 2011.

But here’s a HINT. Whether a new, MHIndustry wide national initiative actually materializes from MHI’s annual meeting, really depends on the personal and corporate perspective(s) of its’ elected and salaried leaders; to wit:

• Industry success or failure, on the macro level, depends in large part, on the activities and goals effected on the micro (individual and corporate) level, NOT on some grand national scale and plan, OR

• Industry success or failure, on the macro level, depends in large part, on the activities and goals effected on the national advocacy level, by elected and salaried industry and asset class leaders, according to some grand scale and plan.

Learning how our national elected and salaried leaders perceive their responsibility, if any at all, to caucus, discuss, brainstorm, plan and ultimately effect a pragmatic program pursuant to ‘How to Save Our Industry?!’ is where we are today. How will we know? By being present at said national gathering and paying attention to what’s said and written during the weeks following….

A Stage III, if deemed necessary, depending on the outcome of Stage II, will likely be announced by year end, and occur sometime early in year 2012. Think NSAC caucus III, if need be..

II.

Yes there’s another would be national initiative afoot. It too has its’ roots in a for profit firm, via a for profit vehicle labeled the Manufactured Home Alliance. It appears to be funded, at least in part, by $31.95/year ‘memberships’, with promises of discounts, MH financing, insurance, advocacy information, and more; suggesting, “The idea of mobilizing a national network of homeowners has great potential.”

But there’s difficulty understanding MH Alliance goals and activities, here quoted in part, relative to “MH Business Professionals (big stake) – Very low buy in, encourage and incentives to be an MH Association member and use best practices.”

Randy Rowe’s Five Point Plan (to Save the Manufactured Housing Industry) is here too referenced, being: 1) better warranties and customer service, 2) improve chattel financing, 3) economic security for homeowners, 4) MLS, and 5) image and marketing. On the same page, MH Alliance key part, the ‘Phoenix Project’ is described in formulaic fashion, as being comprised of Positive PR + Prestige + Profitable (sic).

There really isn’t much to add at this point in time. But the initiative bears watching, especially if MHI demurs taking the lead, on the macro level, to caucus, discuss, brainstorm, plan and ultimately effect a pragmatic program pursuant to ‘How to Save Our Industry?!’

III.

As you know, reading through this blog posting to this point, there’s nothing (yet) of substance to describe or tell you about Stage II of ‘How to Save Our Industry?!’ There’s not yet, if there ever will be, a third ‘hopefully overriding’ macro national initiative to save the manufactured housing industry.

If status quo prevails however, expect existing initiatives, whether an NSAC Caucus III and new not for profit national research and resource platform funded by landlease community owners/operators in the first instance; and or, manufactured home owners and rental homesite lessees, et. al., in the latter instance, to continue in their respective macro and micro environments, to effect positive impact on the industry and asset class.

But how ‘bout YOU? Frustrated yet with manufactured housing’s now decade long malaise, and consequences thereof (i.e. historic low new home shipment levels, year after year; and, sliding physical and economic occupancy levels in LLCommunities large and small)? If so, to which of the two perspectives, described above, do you ascribe?

• Keeping one’s nose to the business grindstone, and national initiatives be damned, OR.

• Look to national advocacy body leadership, of all stripes, for relief and succor!

As usual, this veteran MHIndustry & LLCommunity asset class observer and commentator would surely like to know! Comment via mail: GFA c/o Box # 47024, Indpls, IN. 46247, phone (317) 346-7156, or email: gfa7156@aol.com

IV.

FLASH ANNOUNCEMENT. If you attended Spencer Roane’s ‘almost standing room only’ presentation of ‘Lease – Option Financing of new and resale home transactions in the landlease community environment’, at the recent 20th anniversary Networking Roundtable in Texas – or missed it altogether, but want the timely & ‘available nowhere else’ information, go to the Summary’ page of http://www.leaseoptionmhsales.com/ To open the Powerpoint file, click the link, then ‘Open’ or ‘Save’, then ‘Read Only’. You’ll be glad you did!

V.

Remember John Grissim? Manufactured housing trade journalist and author? Well, he’s just published the first issue of ‘The Grissim Perspective’, a free e – newsletter designed and intended to communicate ‘occasional news, notes and commentary about the factory – built home industry.’ (Speaking of the factory – built housing industry, just spoke at length with Don Carlson, editor and publisher of the shuttered Automated Builder magazine; he’s well and awaiting an opportunity to return to ‘the business’). Anyway, if Grissim’s e – newsletter is anything like his popular ‘The Grissim Report’ subscription – based newsletter, this offering too will likely be widely circulated. To get on the inside track with ‘The Grissim Perspective’, email him at john@grissimguides.com and pen Perspective on the subject line. He’ll also put you on a list to receive future issues.

VI.

Deadline for submission of landlease community portfolio statistical input for the 23rd ALLEN REPORT (a.k.a. ‘’Who’s Who Among Landlease Community Portfolio Owners/operators Throughout North America!’) is now past. BUT, not too late to be included if your completed questionnaire is sent in (by FAX @ 317.346-7158) by Friday, 9 September 2011. Or mail it to GFA c/o Box # 47024, Indianapolis, IN. 46247. Need a questionnaire to complete? Simply phone (317) 346-7156 this week; leave a message.

***

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

I.

Young Turks Emerging?

In the annual ALLEN REPORTS, we routinely identify the Young Lions of property acquisition, and report the status of a Daring Dozen realty investors who commenced building landlease community portfolios a decade ago. But Young Turks? Last week’s…

20th Networking Roundtable maybe demarcates the end & beginning of two eras….

On 31 August 1993, 18 manufactured home (nee mobile home park) community operators, 14 of whom were bona fide owners with ‘skin in their games’, founded the Industry Steering Committee (‘ISC’) predecessor to the Manufactured Housing Institute’s (‘MHI’) present day National Communities Council (‘NCC’) division. Today, 18 years later, only one of those property owners remains active and regularly visible in national landlease community affairs and issues.

On 15 September 2011, considerably more than 100 landlease community owners/operators attended the 20th anniversary Networking Roundtable in San Antonio, TX. Only one of the aforementioned ISC cum NCC founders was present, along with a few dozen new, second, third, even fifth generation property owners, and these were supplemented by a growing bevy of portfolio operators. Enter the Young Turks!

What’s a Young Turk? According to the Illustrated Reverse Dictionary, an ‘elite soldier or bodyguard in former times’, a.k.a. janissary, a ‘member of any group of loyal guards, soldiers, or supporters’. Know what? The term fits! As I studied the registration list for this year’s Roundtable; along with direct, dues – paying member lists (not the Certified Representatives) of MHI’s NCC division, and the Urban Land Institute’s (‘ULI’) Manufactured Housing Communities Council (‘MHCC’), an interesting pattern or trend emerged. This being, the subtle transferring of management control, in many but not all instances, from the daily, hands – on presence of property portfolio owners, to salaried managers or ‘soldiers, property guards, supporters’, i.e. the Young Turks!

Young Turks for the most part, appear to be salaried, and generally managing landlease community portfolios for sole proprietors, partnerships, corporate owners, even real estate investment trusts (‘REITs’). Only rarely however, do contemporary Young Turks possess earned professional property management or realty credentials, like the hard to earn Certified Property Manager® or CPM® and Certified Commercial Investment Manager® or CCIM® designations, though many have college or university degrees, even advanced ones. They’re also often politically active, when the need arises, generally via state and national advocacy venues, but not always. Furthermore, the majority of today’s Young Turks, like their pioneer owner/operator predecessors and bosses, are male and young.

Who’re today’s Young Turks? I can easily identify several dozen by name. But that’s not the point of this pattern or trend spotting blog posting. But ‘naming’ might indeed be an interesting exercise, and certainly a potential added feature to the 23rd annual ALLEN REPORT – being researched at this time. Speaking of which; please complete and return, via FAX (317) 346-7158, the standard questionnaire, distributed last week, to 600+/- known landlease community portfolio owners/operators! Deadline is September 30th , 2011. The 23rd ALLEN REPORT (a.k.a. ‘Who’s Who Among Landlease Community Portfolio Owners/operators Throughout North America!’) will likely be distributed with the January 2012 issue of the Allen Letter professional journal.

Why only ‘likely’? As you may or may not know, there’s a present effort afoot, to launch a new, national not for profit platform, a real estate and manufactured housing Center of sorts, to ensure continuation of Research (e.g. ALLEN REPORT, Allen Surveys, Mortgage & Chattel Lenders’ Registries, etc.) and Resources (e.g. newsletters, directories, books, standard PM forms, consulting services, and professional property management training and certification via the Manufactured Housing Manager program), long provided by GFA Management, Inc., dba PMN Publishing. At some point, it’ll become more cost effective for such research reports to be marketed and distributed through (the) Center for Manufactured Housing Research & Resources – or whatever the new not for profit national platform is named. If YOU’d like to be on the ‘inside track’, relative to launching, guiding, and financially supporting this exciting, historic initiative, contact me privately at (317) 346-7156 or via gfa7156@aol.com All inquiries will be kept in confidence!

In the meantime, know that if YOU own and or fee manage five or more landlease communities, and or 500+ rental homesites (even if in just one property), and have NOT received a cover letter and ALLEN REPORT questionnaire, phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764, ASAP, and request one be mailed to you! Why? Because you’re eligible to be included in the nearly quarter century old ALLEN REPORT, organized by firm name and ranking (per total number of rental homesites owned/operated) of landlease (nee manufactured home) community portfolios, throughout North America.

For that matter, there’re still a couple dozen copies of the 52 page 22nd annual ALLEN REPORT available for purchase @ $125.00 apiece; or as part of a special $150.00 package that includes said report, plus a one year subscription to the Allen Letter professional journal (published monthly, with a subscription price of $134.95/year). Again, use the above MHIndustry HOTLINE to place your order and or to subscribe.

So, are YOU a Young Turk reading these trend – spotting paragraphs? Do you agree or disagree with the characterizations cited? I’d sincerely like to know your view(s) on the subject. Use any of the contact methods cited in previous paragraphs, or pen them to me via: GFA c/o Box # 47024, Indianapolis, IN. 46247.

II.

Yet another New Era, or a Chicago Renascence, dawning?

Let’s see; the first real estate investment trusts (‘REITs’) emerged during the 1980s. That’s when New Jersey – based UMH Properties, Inc., nee United Mobile Homes, Inc., debuted. Then there was the second REIT wave, in the mid – 1990s, when Chicago – based ELS, Inc., nee MHC, Inc., followed by Detroit – based Sun Communities, Inc., and Colorado – based Chateau Communities, Inc. (Latter acquired by Hometown America in 2003) appeared on the landlease (nee manufactured home) community scene. Today, however, there’re only three REITs remaining in play, ELS, Inc., Sun Communities, Inc., and UMH Properties, Inc.

• Rumor has it a new IPO (‘initial public offering’ of stock) may be in the offing, possibly combining landlease communities of more than one firm. IF this occurs, it’ll be the asset class’ first new REIT since American Landlease (founded in 1998 & de – REITed in 2008) and short – lived ARC (2004 & 2005), originally Affordable Residential Communities, now American Residential Communities appeared on the income – producing property (type) scene.

• AND, there’s yet another new landlease community portfolio firm in the process of being formed, comprised of properties acquired from Hometown America. Think AMC. (No, not a rejuvenated American Motors Corporation!). Trust me; if and when this occurs, and details are made public, it’ll make for an interesting ‘international’ tale….

• Not to forget; the first National Summit for independent ‘street’ MHRetailers and landlease community home sales centers, will be held 13 – 15 November 2011. If seriously interested in improving your manufactured housing retail sales operation, consider attending. Phone (800) 336-0339. I plan to be present.

Is there a common denominator among these disparate but MHIndustry – related events? Sure; they’re all occurring in downtown Chicago (i.e. National Summit @ The Drake Hotel) and in surrounding suburbs. Know what? There’s even more ‘new news’ emerging from the Windy City. Geesh; really want to write more, but need to await further details.

III.

Let Me Whet Your Appetite for Next Sunday’s Blog Post…

The Year is 2012. The Question is ‘Who Will Effectively Lead the Manufactured Housing Industry?’ The Dilemma: ‘Old (habits) Guard or a New (inexperienced) Generation’? This (next) week’s blog posting kicks off Stage II of a three stage (if need be) ‘How to Save Our Industry?!’ industry wide grassroots effort, to effect 1) national dialogue, 2) open discussion, 3) strategic planning, and 4) focused action, to stimulate and lead HUD Code manufactured housing out of its’ decade – long general malaise and array of industry – specific ailments.

Maladies, for sure, like 1) paucity of independent source chattel capital for everyone, not just those with pristine credit ratings; 2) continuing feud between ‘big box = big bucks’ purists (i.e. in land & home competition with site – builders) versus ‘affordable housing’ pragmatists (i.e. desiring to fill 250,000+/- vacant rental homesites nationwide); 3) reluctance to routinely sell homes that homebuyers (and by extension, local housing markets) can afford to buy, rather than what factories decide to ship their way; 4) complete absence of a functioning, ongoing secondary market for the sale of existing manufactured homes; 5) new home warranties that match and exceed those of site – built homes; 6) need for a national manufactured housing brand and image improvement campaign, but only after resolving which comes first: clean up the industry beforehand or after attracting prospective homebuyers to our sales centers and communities? And there’re more issues and related asides….

What’s next? Well, that’s why YOU should plan to attend the Manufactured Housing Institute’s (‘MHI’) annual meeting in Phoenix, AZ. @ 2 – 4 October 2011. Listen, Observe & Participate for YOUrself and YOUr business interests! For more information, contact Thayer Long via (703) 558-0678. And, if you own one or more landlease communities, and would like to at least attend the National Communities Council (‘NCC’), the morning of 3 October, contact Lisa Brechtel via (703) 558-0666. If YOU do attend, either or both venues at the same resort hotel, look me up and tell me know your views on the industry issues identified, in part, in the previous paragraph, and otherwise. See YOU there!

***

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) 346-7145

Stage I of III, pursuant to ‘How to Save Our Industry!?’
effected at 20th Networking Roundtable in San Antonio, TX.

Stage II of III occurs soon, at the Manufactured Housing Institute’s annual meeting in Phoenix, AZ., 2 – 4 October.

Stage III of III? Unnecessary, if elected & salaried leaders
host a national & open forum for manufactured housing & landlease community stakeholders, to discuss, plan & enact ‘How to Save Our Industry!?’

Last week’s blog posting (#157) posed this question: “Is the recent & distinct ‘Stirring’ sensed, among some HUD Code Housing Manufacturers, independent ‘street’ MHRetailers and Landlease Community owners,

Life Being Renewed or a Death Rattle?”

Conclusion? Here’s what I penned at the time: “Death rattle? I think not. Made that mistake back in 1979, shortly after entering this business. Five years later, I was head of my own firm, and cleared $2 million with my partners, on our first landlease community transaction. I’ve not looked back, or negatively, at the industry and asset class since. Neither should you! So, come on, ‘Let’s get a – stirring together!” GFA

*****

Well, more than 200 of us did get a – stirring last week, at the 20th International Networking Roundtable in San Antonio, TX! Landlease community owners/operators, home manufacturers, as well as product and service suppliers, from 27 states, convened for 2 ½ days of the best business education, interpersonal networking, and enthusiastic deal – making, available anywhere, anytime! For a detailed summary of the two dozen seminars and panel discussions, complete with presenters names and contact information, read the October issue of the Allen Letter professional journal! Simply phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. In the feature article, you’ll learn how Cavco Industries, Inc., chairman and CEO, Joe Stegmayer ‘stirred’ this audience; how Green Courte Partners & American Land Lease, under the leadership of David Lentz, has introduced ‘rebranding’ to the landlease community asset class; and how Spencer Roane has taken the lease – option to a new level; and much much more!

The final session of this year’s Networking Roundtable related to the present and future of landlease community ‘research & resources’. Why so late in the 2 ½ day program? To serve as a gauge of how important, or unimportant, the subject of research and resource succession is, to those invested in the landlease community income – property type as bona fide owners, even professional property managers with ‘skin in their game’. Result? Nearly 40 ‘interested parties’ participated in the 1 ½ hour session. That’s more than double the number of landlease community owners/operators it took, on 31 August 1993, to form the Industry Steering Committee predecessor to MHI’s National Communities Council division! More about these new historic proceedings later….

In the meantime, here’s a list of general and intimate observations from the Roundtable:

• This was indeed the ‘Biggest (i.e. More than 200 registrants) and Best (Thanks to Hyatt Regency Hill Country Resort, 22 ‘presenters’, & the Cavco ‘Community Series Home’ on display) Ever’!

• Cutting edge presentations: Wait till you read what Stephen Wheeler, Joe Adams, Dr. David Funk (Cornell University), and others, had to say at this event, in the aforementioned October issue of the Allen Letter professional journal!

• Have you ever experienced Joe Stegmayer’s dry sense of humor? You should!

• Most old guard landlease community portfolio owners/operators are gone (e.g. only one of original 18 member Industry Steering Committee (See above) was present; supplanted by a new generation, many in evidence at this year’s event!

• NCC bobbled this new member recruiting opportunity; but MHI’s PAC promoter, Rick Rand, ACM, collected mega bucks for institute’s ongoing lobbying effort.

• MHIndustry pragmatists (i.e. smaller size & greater affordability of Community Series Homes) squared off against ‘bigger box = bigger bucks’ MHPurists.

• A dozen Business Development Managers were present, so maybe direct – marketing to landlease community owners/operators is ‘alive and well’ after all!

• Fair home value and homebuyer – friendly chattel mortgage advocates squared off against the perennial ‘churning’ and predatory lending aficionados.

• National Industry Image Improvement Campaign gets its’ first national re – airing since 17th Networking Roundtable in Mystic, CT., in 2008. Conclusion? This hard question: Showcase ‘Best Products & Practices NOW’ or ‘Get Products & Practices Right Before Going Public’? In either event, be wary of tempting siren songs of self – proclaimed marketing pros in search of billable projects.

• 17 Roundtable attendees present at 10th annual prayer meeting for ‘Our Nation & Its’ Leaders’. Each received a copy of Steve Harper’s A Pocket Guide to Prayer.

• Every Networking Roundtable registrant received a copy of the recently released Landlease Communities, Manufactured Home Communities, Mobile Home Parks, Trailer Courts & Camps, and Affordable Housing book. Dedicated in part, to Randy Rowe, of Green Courte Partners/American Land Lease, it’s the first inside look at what’s brought our asset class from its’ ‘dark ages’ into the 21st Century! Available for $24.95 via aforementioned MHIndustry HOTLINE.

Finally, many landlease community owners wanted to know, coming away from Stage I (the 20th Networking Roundtable), and headed for Stage II (MHI’s annual meeting); if, where, when, how, and how much would our unique realty asset class be fitting into the HUD Code manufactured housing business milieu of the immediate, near, and forward – looking future? In a word, Are we to be an integral part of this ‘Stirring’ so many of us have been sensing of late? That’s why YOU should plan NOW to attend MHI’s annual meeting in Phoenix, AZ., 2 – 4 October. For information, phone (703) 558-0678 and ask to speak to Thayer Long. Tell him ‘George sent me!’

*****

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

I.

The Recent & Distinct ‘Stirring’ Sensed by, & among, some HUD Code Housing Manufacturers, independent ‘street’ MHRetailers, even Landlease
Community Owners/operators. Is it our industry’s…

Life Being Renewed or a Death Rattle?

“Landlease communities are HOT!” opined the Business Development Manager (‘BDM’) working for one of the 21st Century Triple ‘C’ Firms, shipping specially – designed Community Series Homes (‘CSH’), for marketing to – and placement in, landlease communities nationwide. When I asked, “How so?”, his response was, half the shipments of new HUD Code homes, from most of his firm’s plants, are now CSH homes headed for vacant rental homesites within landlease (nee manufactured home) communities.

Phone calls to other BDMs, working for Clayton Homes, Cavco, Inc., and Champion – Yes, those are our industry’s 21st Century Triple ‘C’ Firms, confirmed the ‘stirring’ described in the opening paragraph. So much so, another indicator is the large number of HUD Code home manufacturers, nearly a dozen, attending this year’s International Networking Roundtable in San Antonio, TX., (14-16 September). That’s far more than have attended any previous Roundtable during the past 20 years! Even ‘park model RV’ manufacturers have registered for this annual opportunity to meet, market to, and sell their product lines into LLCommunities. But know who’s missing? Unfortunatly, the small to mid – sized, regional HUD Code home manufacturers! And that’s a shame, because there’s plenty of business to be had from the 200+/- gathered LLCommunity owners/operators.

If YOU don’t know about CSH homes, be present at the Roundtable this week, when Don Westphal, freelance consultant and CSH specialist, covers that subject in depth. And David Gorin, RV consultant, will explore the increased interest LLCommunity folk have in RV Parks and ‘park model RVs’. To participate, phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. And while you’re on the phone, ask for a ‘free’ list of the more than two dozen BDMs marketing new HUD Code CSH homes to LLCommunity owners/operators.

Independent ‘street’ MHRetailers recently rediscovered a valuable resource and voice in Rainmaker of Davenport, Iowa. While long a consultancy to this key segment of the manufactured housing industry, it’s only become apparent recently (More of that ‘stirring’ feeling.) how surviving home sales professionals are literally chomping at the bit, for a credible opportunity to refresh personal selling skills, improve their online marketing expertise, and frankly, to ‘Get Motivated to Sell – again!’ So, to address those needs, Rainmaker has planned a National Summit for independent ‘street’ MHRetailers and in – landlease community sales center operators, to occur in mid – November in Chicago. For more information, contact Bill and Chad Carr via (800) 336-0339. I certainly plan to participate and learn as well.

And, for the first time in decades, independent ‘street’ MHRetailers have an excellent e-book available ‘just for them’, describing HOW TO ‘drive more qualified traffic to ones’ home center and increase sales opportunities’! This e-book, titled Pillars of Promotion is based on firsthand Lessons Learned by Chris Nicely, former marketing executive with Clayton Homes. Do YOU have a copy yet? If not, phone (865) 385-9675 or pick up order literature at the aforementioned Roundtable this week.

Then there’re the landlease community owners/operators. No other segment of the HUD Code manufactured housing industry has experienced such extreme dichotomy between the ‘Haves & Have Nots’, where occupied rental homesites are concerned! An increasing number of mid to large – size properties, oft saddled with too high rents and low occupancy, have moved – and are continuing to move, from forbearance agreements, pursuant to CMBS (commercial mortgage – backed securities) loans-gone-bad during the past decade, into active foreclosure and REO (real estate owned) status. As in the late 1970s and 1980s, it’ll take a few years – maybe a decade, if reasonable, independent third party chattel financing doesn’t return soon, for these troubled assets to be remarketed, acquired, and returned to solvency!

In the meantime, ‘the other half’ this dichotomy – and actually a far greater number within the unique property type, especially where/when owned by veteran realty investors, are ‘doing just fine, thank you’, as they market, sell, and frequently self – finance, via one methodology or another, new and resale home transactions on – site. And it’s these financially healthy owners/operators, frequently enjoying excess cash flow by dint of having paid down or off mortgages, who oft shoulder additional management risk, and now buy new HUD Code homes at a discount, to fill vacant rental homesites, since the repo market has all but dried up, and there’s still no viable secondary market for the ‘sale and purchase’ of quality resale homes.

Who to talk to about the various self – finance methodologies in vogue these days? Again, be at this week’s Roundtable! Ken Rishel of Rishel Consulting will explain, one – on – one, the ins and outs of ‘captive finance’. Dick Ernst of CU Factory – built Housing will happily describe his firm’s chattel loan servicing capabilities. Matt Kerlin of 21st Mortgage Corporation will also be on hand, to walk you through their new program. And LLCommunity owner/operator Spencer Roane will share his firsthand experience and success, using a carefully crafted lease – option program. And if ‘rentals’ on – site are of interest, request the free reprint titled, ‘To Rent or Not to Rent?’ when you phone the above – listed MHIndustry HOTLINE number. And rumor has it, a freelance consultant (not me) may soon go on the road, carrying the ‘ways to self – finance’ message to state manufactured housing associations and portfolio owners/operators desiring such knowledge. If this interests you, let me know. And, by the way, last year’s ‘bestseller’, the Manufactured Housing $$$ Primer is still available, for $29.95 (postpaid) from PMN Publishing. Again, just phone the toll free HOTLINE.

OK, if by now, you don’t see where this industry wide ‘stirring’ is going, you’ve gotta be tone deaf. Sure, new home shipments continue to drop this year; but know what? Almost everyone described in the previous paragraphs is now ‘pulling out all the stops’ to stimulate new and resale home sales business, filling previously vacant rental homesites, and doing their part to keep the manufactured housing industry alive. How ‘bout YOU? What are YOU doing as your part in this timely, critical, ‘stirring’ scenario?

My participation in all this’? First and foremost, during three decades as manufactured housing’s observer cum blogger, landlease community newsletters publisher, and management consultant at large, I’ve long argued for our industry’s return to ’truly affordable housing’ for the American homebuyer – something, sadly, that hasn’t happened yet. No other type housing, in or out of the factory – built milieu, can do as good a job at ‘being affordable’, than HUD Code manufactured housing, when we set our minds, production, and marketing to do so! Second; PMN Publishing continues to make the handy, do – it – yourself, oddly – named ‘Ah Ha! & Uh Oh! new or resale home sales price & mortgage worksheet’ available FREE for the asking. For the first time in the history of manufactured housing, independent ‘street’ MHRetailers and sales centers within LLCommunities, can easily and accurately calculate ‘just how much home buying customer can truly afford’, based on individual or household Annual Gross Income or AGI, and if opening a sales center in a new local housing market, per postal zip code, know what price range homes will sell, based on the prevailing Area Median Income or AMI. For your FREE copy of this revolutionary form, use HOTLINE number cited earlier.

Death Rattle? I think not. I made that mistake – thinking such, way back in 1979, shortly after entering this business. Five years later, I was had of my own firm, and had cleared $2 million with my partners, on our first landlease community transaction. I’ve not looked back, or negatively at the industry and asset class since; neither should you! Come on, ‘Let’s get a – stirring together!’

II.

And don’t forget! This week’s Networking Roundtable is but the first stage of that Three Step Process, described in this industry blog more than a month ago, to ascertain ‘How to Save Our Industry!’ At the very least, and at this week’s event, we’ll see the ‘stirring’ anticipated national plans for the future of landlease community research and resources! Step II of the Process? Manufactured Housing Institute’s (‘MHI’) annual meeting in Phoenix, AZ., 2 – 4 October. Have YOU perused the meeting agenda? Will YOU be present to ensure our industry’s elected and salaried leaders keep the MHIndustry train on track to increased production and renewed profitability? And Step III of the process? If necessary, a National State of the Asset Class (‘NSAC’) caucus III during early 2012.

***
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

What’s in Your Career Remembrance File?

I.

“You just don’t take a mobile home and stick it in your pocket like you would a diamond bracelet,” says Peggy Vaughn, manager of Hickory Lake Mobile Village, in a news story titled: ‘Huge trailer’s not at home after being taken from (sales) lot.’

“In the wee hours Friday, a 16-foot-by-70 foot Fleetwood became a very mobile home when thieves hauled it off a retail lot near I-65 in Scott County. Friday’s theft of the pale-pink and white abode occurred with nary a sound, at least none loud enough to wake the neighbors.” Marcella Fleming, staff writer for the Indianapolis Star.

***

Following, are some choice pickins’ from my career remembrance file, mostly property management, manufactured housing, and landlease community related.

***

Let’s begin with this ‘How NOT to enforce Rules & Regulations, and encourage good resident relations’ gem. It was a posted ‘Notice to Residents’ I plucked from the laundry room bulletin board, in the old Eastwood Mobile Home Park, circa 1984.

ATTENTION: ‘All Park Resident Who Improperly Dispose of Their Trash or Use Our Dumpsters for Their Own Private Dumping Grounds.’

“You people are filthy, disgusting slobs who walk around without a single ounce of common – sense or a brain in your heads. Since I have been associated with this park, I have brought in 26 homeowners, doubled the rental occupancy, removed four long – bed dumpsters of trash, and have changed the clientele in our ‘rentals’ from scums and bums to decent, hard – working people.

It’s pretty evident I care about the environment you people live in, why the hell don’t you? These dumpsters are to be used for your trash only! Not old water heaters, washers and dryers, sheds, swing – sets, automobile parts, etc.

Any trash I find not disposed of properly, I will no longer give warnings, I will find (sic) you $25.00 per bag. Tell your children, tell your spouse, and tell your neighbors. If you see anyone disobeying (sic), tell me!” The ‘Park’ Manager

This travesty occurred before professional property management found it’s way into, what we today think of as, landlease communities. Hopefully we won’t see this sort of bullying ever again. And to that end, here’s the timely and helpful ‘Six Rs’ mnemonic device for Cultivating Good – to – Great Resident Relations! Good Resident Relations = More Resident Referrals = Great Resident Retention!*1

***

Don’t get me started relating memorable Mystery Shopping experiences, and the important Lessons Learned from them, unless you’ve got lotsa time on your hands.

Like the day I walked into a local apartment community’s Information Center. There, taped on the inside of a closet door that should have been closed, was a large poster featuring a big sleeping bear, with this caption underneath: JUST WAKE ME IN TIME FOR THE WEEKEND! Surefire commentary on the work ethic of that office. Hmm. Perhaps that’s why we were hired to ‘shop’ the leasing staff in the first place. Lesson? When was the last time YOU looked inside – and outside the closet doors in your Information Center(s)? Bet you’ll find some unsettling surprises. Read on….

At an independent ‘street’ MHRetailer’s sales center, a few years ago, I came across yet another large poster, this one picturing a life – sized hangman’s noose, along with this motivating caption: A REMNDER ABOUT HOW IMPORTANT SALES ARE AROUND HERE! Well, I suppose IF the message ‘works’, the poster is worth keeping around – but certainly NOT where customers can see it. When do ‘high pressure sales techniques’ ever equate to long term satisfied home buying customers? Hardly ever!

And how ‘bout this ‘unofficial’ notice I removed from the bulletin board in yet another landlease community Information Center: ‘NOTICE: This Department Requires No Physical Fitness Program! Everyone gets enough exercise jumping to conclusions, Flying off the handle, Running down the boss, Knifing friends in the back, Dodging responsibility, and Pushing their luck!’ Yes, that really happened – the poster removal, that is. So again, what’s on the bulletin board in your Information Center(s)? Go check!

***

Like to receive holiday and birthday cards? Anyone who subscribes to the Allen Letter professional journal knows, every year we rank the ‘manufactured housing – themed Christmas cards’ we receive in December, then feature the winning card in the January issue of the newsletter. And we’ve received some doozies over the years…like one that pictured ‘half a doublewide’ being pulled down the highway, with the center (mating) side wide open, displaying holiday decorations and gifts. And another one, a singlesection manufactured home being towed through the sky by Santa’s reindeer. Cute.

Well, here’s a true Christmas card story you’ve not heard before. Remember colorful, outspoken, iconic, St. Charles, MO., MHRetailer Bob Bross? I’ve long counted him as one of my best friends in the MHBusiness! Well, he’s retired now. But in his heyday, and he certainly had a few (heydays, that is), he was known to save holiday greeting cards received one year, then recycle them the next year. How so? By crossing out the original sender’s name inside the saved cards, then affixing his firm’s address label above the crossed – out signature. Then he’d enclose the recycled card within a tri – folded sheet of his company’s letterhead stationery, bearing this message: “PLEASE DON’T FUSS ABOUT THE ENCLOSED CARD. CONSIDERING THE LOUSY BUSINESS CIRCUMSTANCES OF THE PAST YEAR, YOU’RE LUCKY TO GET THIS ONE!” Seriously. That’s vintage Bob Bross.

One year, Bob added this message to the recycled cards: “Being in the manufactured housing industry brings to mind a friend, who spent years of effort and thousands of dollars to cure his bad breath problem, only to find out that no one liked him anyway!”

Someday, ask me to share Bob’s collection of eight ‘After the Party’ standardized excuses and explanations, containing blank spaces where sender (offender) inserts offended parties’ names, e.g. ‘Dear _____________________. I regret telling the firemen it was you who turned in the false alarm. But of course I had no way of knowing they would be such bad sports about it. Those fire hoses sure have a lot of pressure, don’t they? And the water was so cold!’ (Signed) Your friend ____________________.

***

Speaking of (studio) cards. The best one ever, for enticing apartment renters to consider buying new manufactured homes to move into a landlease community, is this one, used ‘for years’ by Country Village.

Top of the front panel features caricature heads of a happy young couple, along with a similar sketch at the bottom, but of a top – hatted villain dressed in black. The verse in between the caricatures goes like this:

‘There was a young couple named Trent, who spent all their money on RENT.
They’d scrimp and they’d save, but their landlord (the knave), walked off with the Trent’s LAST RED CENT!’

Next card panel, inside, again shows the same happy young couple, and reads: ‘The Moral is: Rent is Money Spent. (Don’t be like the Trents). Invest in a Home that You OWN…

And the final, inside double panel of the colorful studio card, features an artist’s rendering of the property’s clubhouse, followed by a list of the property’s amenities, and a sketch map showing how to find one’s way to Country Village. An idea worth trying? I certainly think so….

***

15 years ago, Ed Zeman, of Zeman MHC (LLCommunity portfolio owner/operator) in Chicago, crafted this (slightly edited) list of ‘Top 10 Things (an investor) Hears From a Landlease Community Owner During Negotiations to Buy Their Property’:

• All the lot rent is always in by the first of the month, no one is ever late here!

• My rent (rate) is way under market, so there’s plenty of room for rent increases.

• This local housing market is really hot. Those 25 vacant lots could be filled in no time, and you should sell 50 homes next year. This is best community in the area!

• Rental mobile homes are a great source of revenue. We never have a problem with them, and all our residents are carefully screened!

• What’s the big deal about my underground oil tanks and lines, the wetlands next door, asbestos in my clubhouse, and the flood plain and landfill this community was built on? No one’s ever said anything about that before now.

• My community is worth more. This place can be a real money – maker, and those REITs are banging on my door wanting to buy it!

• This is the best well water anywhere, and the EPA never has a problem with our sewage treatment plant. In fact, the plant operates so good you could drink the discharged effluent.

• There are no maintenance expenses, since my son and I do everything!

• The 50 acres next door is not zoned for manufactured homes, but it could easily be rezoned. I have a verbal OK about that.

• (After six months of discussion) I think I’ll wait until the capital gains tax rate is reduced.

***

So, what’s in your career remembrance file? An inquiring blog readership would like to know. Take a look and send me some gems to share in the future….
II.

‘Biggest & Best Ever!’

What do 40 Texans, four state manufactured housing association executives, two dozen women executives, all our landlease community asset class’ REITs, and best of the privately – owned portfolio owners/operators, as well as a Cavco, Inc., Community Series Home (‘CSH’) have in common? They’ll be at the 20th annual International Networking Roundtable in San Antonio, TX., when it kicks off Wednesday afternoon, at 4PM, with a Marcus & Millichap ‘State of the Landlease Community Real Estate Asset Class’ presentation, followed by showcasing dozens of these properties ‘for sale’! And then ‘the fun’- the superb education, interpersonal networking, and deal – making begins….

Yes, that’s where things stand two weeks before this annual seminal venue begins. More HUD Code housing manufacturers (e.g. Clayton, Champion, Cavco, Palm Harbor, Fleetwood, Athens Park, and others) will be in attendance than ever before! Why? In the words of one manufacturer’s Business Development Manager (‘BDM’), when thus queried: “Communities are back. Communities are hot!” And that they are.

So, if you’re reading this blog, and own one or more landlease communities, and either sell new and used homes on – site, or are thinking of doing so, YOU need to be at the Networking Roundtable to meet these home manufacturers – and much much more! Need capital to acquire and or refinance landlease communities and homes? All the major realty – secured and chattel (personal property) mortgage lenders and brokers will be present this year.

See brochure attached to the BEBA (Blast Email Blog Alert) accompanying this week’s blog posting, or phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. But I need to warn you. Our max number of registrants is 200, and we were at 175 on the first of September. So, don’t be left out, register today!

III.

Last week, this blog announced the release of Chris Nicely’s new online book, describing HOW TO effectively market and sell HUD Code manufactured homes at independent ‘street’ MHRetail salescenter, and on – site in landlease communities. An
e-book, it’s titled Pillars of Promotion, and contains ‘six proven tactics that drive more qualified traffic, and increase (home) sales opportunities!’ Well, a bunch of blog floggers (readers) responded, buying copies. Did YOU? Price is $49.95; BUT he’ll sell it to you for less, if you’re a dues – paying member of any state or national manufactured housing trade association. To order, phone (865) 385-9675. Tell him ‘George sent me!’ Thanks.

IV.

This blog was the first national MHTrade news media to provide preliminary details about the upcoming National Summit for independent ‘street’ MHRetailers & in – landlease community home sales center operators. The event date is 13 – 15 November, and location will be in the Chicago area. I met with the organizers, Chad and Bill Carr, of Rainmaker Consulting, for three hours last week, and gotta say, ‘I came away impressed’ with what they plan to do to ‘motivate, educate, & rejuvenate MHRetailers’ who’ll be gathering from throughout the U.S. and Canada. At the very least, if you market, sell, and or self – finance new and resale manufactured homes these days, get your name on the list to receive additional information when it’s available. Call (800) 336-0339. Think about it. Attend this mid – November National Summit, and leave with new, exciting, proven practices; plan implementation during December; then, kick off the New Year 2012, with a ‘higher altitude attitude’ and a new game (business) plan designed to increase and sustain your new (and resale) home sales volume during the months ahead!

***

End Note.

1. For more on ’mnemonic devices’, read George Allen’s Collection of Figurative Language & Figures of Speech, PMN Publishing, Franklin, IN., 2011. Available for $19.95 postpaid, by phoning (317) 346-7156. A handy, and at times humorous, reference tool for any amateur writer or journalist in your firm or family, or among your friends.

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

Independent Street MHRetailers & In – Landlease Community Home Sales

“Do YOU view them as ‘oil & water siblings, separated at birth – never the twain to meet’? Or as ‘one in the same, cut from the same cloth’, but NOW maybe ripe for sharing knowledge that sells homes, while eschewing nefarious ‘tricks of the trailer trade’? And finally, are they willing to embrace contemporary housing marketing and sales techniques, including the establishment of a functioning and accountable secondary manufactured housing resale market?” Edited introduction to last weeks blog posting.

I.

The above subtitle questions were last week’s BEBA (Blast Email Blog Alert) reader provocateur. And did we ever get responses! Here’s an outline based on the observations and commentary YOU sent us; then fleshed out in paragraphs to follow:

Independent street MHRetailers, ‘pro & con’ and recent (not past) trend(s)

In – landlease communities, are new and resale home sales & self – finance necessary evils to fill vacant rental homesites, and or a practical means of ‘adding value’, while complicating one’s disposition strategy and property’s refinance potential?

Consequences of increased federal and state financial regulatory control and supervision of MHRetailers & landlease community owners/operators engaged in self – finance of new and resale home sales transactions.

Still awaiting on a secondary market for resale homes!

Where to go from here, relative to manufactured housing marketing and sales training, communication, resources, and more?

II

Independent street MHRetailers, ‘pro & con’ and recent (not past) trend(s)

While not a documentable fact, many MHIndustry aficionados estimate we’ve lost 9/10ths of the independent street MHRetailers in business during manufactured housing’s most recent, albeit brief heyday, culminating in 1998 with 372,843 new HUD Code home shipments in the U.S. Why? Take your pick of reasons: chasing market share (Think ‘land & home packages’) head to head with stick builders; loss of independent third party chattel (personal property) financing for our homes; and, wholesale acquisition of independent salescenters by cash flush (at the time) HUD Code manufacturers (i.e. Converted to ‘company stores’) During the same period of time, per Danny Ghorbani of the MHARR, we’ve also seen 300 of 400 housing factories close.

PRO. Independent street MHRetailers “…are on the front line of battling business problems every day. They create all the jobs in this industry – for the manufacturers, lenders, suppliers and associations – not the other way around. (Some) have survived these last three years of financial turmoil, with most having been through several downturns over the last 40 years or more.” CC

CON. “Many, if not most, retailers (street dealers) are out of business because they ‘killed the goose that was laying the golden egg’ with their selfish, short – sighted financing shenanigans (i.e. down payment games, fraudulent credit applications and income – reporting antics) or because they couldn’t operate unless they locked the customer in their office to pressure them and keep them from buying elsewhere. What are LLCommunity owners to learn from people like that?” And “Even when lenders caught them, they really just got a slap on the wrist and a warning. Everyone was so concerned about volume and profit, no one thought about the long term consequences, which we are now suffering.” Latter quote (edited) per Jim Carmichael.

TREND. Most landlease community owners/operators, particularly portfolio ones, are convinced MHRetailers have forgotten how to market and sell new manufactured homes into their properties. As a result, the majority of larger LLCommunities, particularly property portfolio owners/operators, now routinely sell and often self – finance new and resale homes on – site. In the meantime, this question begs answer: Will independent street MHRetailers ever return in significant number? Most pundits say ‘Not until independent third party chattel finance returns in volume.’ Others just say ‘No.’ How ‘bout you?

III.

In – landlease communities, are new and resale home sales & self – finance methodologies necessary evils to fill vacant rental homesites, and or a practical means of ‘adding value’, while complicating one’s disposition strategy, and a property’s refinance potential?

PRO. Real estate broker Jim Carmichael penned the following lines a few years ago. Landlease community owners/operators “…must become dealers if they want to increase and control their occupancy levels. Just like a street retailer with a couple park models, sales people and service operations. The (business) model is that of a residential developer when they are building a new subdivision. The good news is you control tenant and housing quality. The bad news is the asset totally changes.”

CON. Hmm. “How does this change the asset class? Once you have a successful dealership in the community and vacancy is back to less than 5%, you decide to sell (the property). Instead of ‘many investors’ driving prices (up), there will only be a few players who can take on the complicated operations now part of the asset. The community (ground leases) will have a value, and the home sales (and finance) business(es), as well as ‘rental units’, all have different values. They are also totally interdependent on each other. So, potentially, a limited pool of buyers will dictate the market, thereby (maybe) driving prices down.”

TRENDS. For the majority of landlease communities (85% of the national inventory containing fewer than 100 rental homesites apiece) it’s ‘business as usual’, with the typical Mom & Pop owner/operator selling an occasional home, maybe carrying a personal note for the buyer, even renting a few units (apartments) from time to time. However, property portfolio owners/operators were quick to realize their very profitability, even their future, depended on their ability to effectively sell, and often self – finance new and resale mobile and manufactured homes, park model RVs, even modular homes on – site to fill rental homesites vacated by more than 250,000+/- repossessed homes circa year 2000. And by coincidence, it’s this same quarter million figure that’s estimated to be the number of vacant rental homesites in landlease communities in the U.S. today! So there’s a great deal of work to be done.

Result of all this? Today, according to past two years of ALLEN REPORTS, 500+/- known portfolio owners/operators landlease communities were carrying $3 ½ billion in chattel ‘paper’ by the end of 2009, and $5.2 billion by the end of 2010. What’s the total for this 2011? Read the 23rd annual ALLEN REPORT in January 2012, when it’s published as a Signature Series Resource Document enclosed with the Allen Letter professional journal. To ensure you receive a copy of that dynamic duo, phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

In the midst of the above – described, on – site sales and self – finance reality, landlease community owners/operators took control of their future, by convening National State of the Asset Class (‘NSAC’) caucuses in 2008 in Tampa, FL. (Where they agreed on Five Action Areas to guide future business efforts), and 2009 in Elkhart, IN., where they met, for the first time in manufactured housing history, with their home fabrication counterparts. There they agreed to new home design features, which led to the branding of Community Series Homes (in contrast with the Developer Series Homes of the late 1990s), marketed and sold by Business Development Managers (‘BDM’), a new job title for the manufacturing segment of the industry. For a description of the typical CSH product, contact Don Westphal @ (248) 651-5518.

IV.

Consequences of increased federal and state financial regulatory control and supervision of MHRetailers and landlease community owners/operators engaged in self – finance of new and resale home sales transactions

In the first instance, since there are far fewer independent street MHRetailers today than a decade ago; those surviving, some even thriving, have learned to adjust to increased financial regulatory overview – or, consider themselves ‘far enough below the radar’ of state and federal review to worry much about it.

Portfolio owners/operators of landlease communities however, are another story altogether. They have far more to lose, monetarily, if caught in violation of S.A.F.E. Act provisions in their state, or regulations pursuant to the Dodd – Frank bill. It’s been interesting to watch those actively engaged in self – finance on – site, segue from one methodology to another, during the past several years. Many started out using the classic ‘buy here – pay here’ approach, then shifted some of their mortgage servicing responsibility to others via ‘captive finance’. In the meantime, others ‘seeing the handwriting on the wall’ opted to ‘return to the 1970s business model’ and lease manufactured homes, as apartment units, on – site; and yet others have become firm believers in carefully worded and executed lease – options.

Is there a clear roadmap out there, for navigating this constantly changing financial regulatory scene? No. For example, read this rambling but illustrative passage from a veteran LLCommunity owner: “…the S.A.F.E. Act has put a great deal on us to do things right. Just because someone is doing ‘something’, doesn’t mean they’re doing it right, or others should copy what they’re doing. I’ve heard community owners say they continue to use Retail Installment Contracts or Promissory Notes to seller – finance manufactured homes, despite what the S.A.F.E. Act says, and assume they either won’t get caught or will only get their hand slapped if they do. I’ve heard others say they use lease – option contracts which provide for the tenant (buyer) to buy the manufactured home for $1.00 at the end of the lease – despite IRS ruling that the sales price must be approximately equal to the Fair Market Value of the asset at that time.” SR Go figure…

V.

Still awaiting a secondary market for resale homes!

If memory serves me right, the Manufactured Housing Institute (‘MHI’), under the leadership of Barry McCabe, before he retired, took a good hard look at this matter, at their annual meeting in New Orleans, Louisiana, maybe five or more years ago. Well, we’re still waiting for a secondary market for resale homes to materialize, to take shape. Because, until that happens, we have no efficient, effective, intrastate and interstate home value preservation means of freeing up homeowner equity for them to buy their next new manufactured home from us!

What comprises a secondary market for resale homes? Well, part of the national marketing piece is already in place via MHVillage. Most landlease community owners/operators, as well as homeowner/site lessees, already are either somewhat familiar with the system, or use it regularly. Visit www.mhvillage.com or (800) 397-2158. But that’s but only the visible present day tip of a figurative iceberg that needs to materialize and float our way.

Multilist service. Though discriminatory denial of access to Realtor® mulitlist services has softened since a recent U.S. Supreme Court ruling, National Association of Realtors (‘NAR’) affiliated state and local realty boards have not ‘flung open their doors’, welcoming manufactured housing listings, including those in landlease communities.

Valuation. As long as federal government GSEs (government – sponsored enterprises), independent third party chattel lenders, and lending institutions continue to opt for ‘book (replacement) values’, in preference to estimating home values ascertained via market ‘comparable sales’, our unique, affordable, manufactured housing product, in and outside landlease communities, will continue to trend toward value depreciation, rather than appreciation or increase. Believe it.

Escrow closings. The sooner we treat our homebuyers/borrowers like folk buying/mortgaging site – built new and resale homes, the sooner HUD Code manufactured housing will be treated, across the board, like HOUSING per se.

Licensure. In most manufactured housing sales environments, this is a touchy subject. But it relates to the previous point. There’s little harm, rather a lot of positives, to educating ‘street’ and on – site sales staffs in the basics of real estate, along with state regulations. If YOU were a would – be manufactured housing purchaser, wouldn’t you feel a whole lot more confident meeting with and buying from a trained and licensed professional, rather than someone with less invested in your home buying experience?

VI.

Where to go from here, relative to manufactured housing marketing and sales training, communication, resources and more?

First; an attempt to answer the primary question posed in the subtitle of this week’s blog posting. Can we indeed bring independent street MHRetailers & in – landlease community home sales, as disparate but akin manufactured housing marketing and sales environments as they are, together to work as the much needed new team to effectively and fairly sell new and resale homes? I think so, if both sides are willing to learn ‘the good lessons’ from one another, even tips from housing ‘brethren’ outside factory – built housing circles. A couple cases, resources, and upcoming opportunities in point.

More than a decade ago, Hometown America recruited a top housing marketer from outside the HUD Code manufactured housing industry. He continues with the firm today, and is widely recognized as bringing conventional housing marketing and sales techniques to that firm, realizing unparalleled success along the way; methods now copied by other property portfolio owners/operators.

Note. If you’re a property portfolio owner/operator reading this blog posting, and wonder why I’m not citing your firm as an example here, it’s because I need to sit in on some of your sales training sessions, then Mystery Shop your landlease communities, to ensure you’re not only ‘talking the (sales) talk’, but ‘walking the (sales) talk’ as well. GFA @ (317) 346-7156. Professional Mystery Shopping of LLCommunities = $500.00 each.

Chris Nicely, longtime marketing executive with Clayton Homes, now an independent consultant, has released the first How To book in decades, describing means to effectively market and sell HUD Code manufactured homes in ‘street’ retail salescenters and on – site in landlease communities! It’s an e-book, titled Pillars of Promotion. In it Nicely describes “six proven tactics that will drive more qualified traffic and increase sales opportunities.” Price is $49.95, actually $10.00 less, if you’re a dues – paying member of any state or national manufactured housing trade association. To order, phone (865) 385-9675 or chrisnicely1@gmail.com

Another relatively new, but now widely used, tool for individuals marketing and selling new and resale homes of any type, is the ‘Ah Ha! & Uh Oh!’ Formulae. This single page worksheet is used by MHRetailers and LLCommunity owners/operators, to estimate maximum recommended ‘affordable’ & ‘risky’ purchase prices – as well as max mortgage amounts – for new and resale, privately – owned homes of any type, whether sited on realty owned fee simple with said home, or on a leased rental homesite within a landlease community! Seriously. Such a practical computational tool was not available to home manufacturers, MHRetailers, and landlease community salescenters before 2008. The procedure begins with either a prospective homebuyer or household’s Annual Gross Income (‘AGI’), or local housing market’s Area Median Income (‘AMI’) – latter ascertained by inputting one’s local housing market’s postal zip code at zipskinny.com For a FREE sample of this revolutionary form, phone the above – referenced MHIndustry HOTLINE today. Why is this form revolutionary? Using it, one never again has to rely on the advice of a manufactured housing factory marketing representative to suggest what home price points will sell in one’s present or intended local housing market; and, no more will salespersons accidentally ‘sell more house than their customer can afford’, based on their Annual Gross Income, or the local housing market’s Area Median Income.

Finally; for those reading this, who’re truly excited about the possibility of ushering in a new era of independent street MHRetailer & in – landlease community home sales cooperation, objectivity and professionalism, there’s a helpful and timely ‘bright light on the horizon’! A National Summit is being planned for 13 – 15 November, in Chicago, where top – notch, successful independent street MHRetailers and in – landlease community home sales pros, will be sharing their ‘insider secrets’ to sustaining home sales and maintaining profits during the past decade. The only way you’re going to get off ‘dead center’, to rejuvenate your MHRetail sales business model, whether street – oriented or in – community, is to network with, and learn from, marketing and sales pros and peers willing to share and discuss ‘what works’! Want more information on this first – ever national summit meeting opportunity? Contact Bill or Chad Carr of Rainmaker Consulting at (800) 336-0339. I plan to be present, how ‘bout you?

***

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

Apartment Industry ‘Reinvents the Wheel’ of Good Fortune!

As ‘micro (apartment) units’ grab multifamily trade press news headlines, ‘park model RVs’, a.k.a. Accessory Dwelling Units (‘ADUs’) & ‘Granny Flats’ sit on the sideline waiting to be discovered by homebuyers & renters!

I.

Multifamily Executive magazine, in its’ August 2011 issue, ran an article titled, ‘How Low Can You Go?’, and subtitled: ‘With sustainability and affordability on the brain, multifamily developers are pushing (design) boundaries with radical new ideas in micro – unit construction’. P.34.

What’s a micro unit? Redefines ‘efficiency’ in efficiency apartments, where “…the loft – inspired, one – and two – bedroom units range in size from 270 to 425 square feet, complete with a kitchen and bath.” (&) “…two – bathroom (sic) apartment floor plans at a diminutive 764 square feet” in size.

But STOP! Don’t those descriptions also describe factory – built housing’s ‘park model RV’ product line, where loft – inspired, one bedroom units range in size from 300 to 375 square feet, complete with kitchenette and bath, (&) two bedroom units up to 400 square feet in size, complete with kitchen and bath? As an additional point of apt reference, the smallest singlesection HUD Code manufactured home, shipped by Cavco Industries, Inc., is only 500 square feet in size! Talk about ‘reinventing the wheel’.

Impetus for micro units? According to Daniel Gehman, a principal with California – based architecture and design firm TCA, “…micro units could see a renaissance in the rental market as construction activity heats up and developers look to pull yield out of ever – decreasing urban infill acreages.” Read ‘high density lifestyle’.

Hmm. Here’s the high density lifestyle tipping point between micro (apartment) units and park model RVs. Condo owners and apartment renters are forced to share halls, walls, floors, ceilings, and ambient noise with neighbors, in a bee – in – a – honeycomb existence; OR, as homeowner and lessee, enjoy freedom from neighbor proximity and intrusion, enjoy outdoor scenery through windows on all four sides of their home, and enjoy two means of egress, not just one!

Micro unit design goal? According to Michael Ytterberg, principal of Pennsylvania – based BLT Architects, “…amenities are becoming so critically important: The reality is everyone is being squeezed. But we certainly seem to be able to cram a hell of a lot into a small area that still feels commodious.” Really? One wonders if architect Michael has actually ever lived in a micro unit? If so, bet he’d soon prefer a similar – sized park model RV with two doors and windows on all four sides!

The generation factor. “…next – gen renters…embrace open – space design that allows for smaller kitchens without boxy cabinets and living spaces defined by function and furniture rather than the formality of walled – in boundaries, (and) such tiny living spaces A) are more affordable and B) create less carbon stress on the environment makes for an easier sell to prospects numbed by the McMansion culture….” And according to Rohit Arnold, a principal of the KTCY Group, “It’s suddenly cool again to have galley kitchens without any cabinets.” That might be true of Echo Boom renters, still single, but probably doesn’t ring true for retirees opting out of McMansions into park model RVs, with a car port and storage shed attached to one side and a screened – in porch on the other.

Interested in learning more about ‘park model RVs’, built to ANSI 119.5 code?
Phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764, and request a list of RV manufacturers. For that matter, if you’d like a ‘free’ list of Business Development Managers (BDM’), who work for HUD Code home manufacturers producing specially – designed Community Series Homes (‘CSH’) for landlease (nee manufactured housing) community in – fill, especially on functionally obsolete rental homesites, call the same number or (317) 346-7156, and request a BDM list. On the reverse side of the BDM list is a description and picture of CSH a home. Furthermore, if you’d like to see and inspect a CSH ‘display home’ firsthand, attend the 20th annual International Networking Roundtable, 14 – 16 September, at the Hyatt Regency Hill Country Resort & Spa, in San Antonio, TX.

II.

Speaking of the 20th annual International Networking Roundtable (‘INR’), registrations to date number many more than 100, in fact we’re closing in on our 200 person maximum! If you intend to participate this year, but haven’t registered, don’t delay. Complete the INR brochure attached to the BEBA (Blast Email Blog Alert) accompanying this blog posting, then email or fax (317/346-7156) it back to us TODAY.

What’s especially exciting is the number of landlease (nee manufactured home) community owners/operators who’ve signed – up that haven’t attended any previous Roundtable event. In addition, several state manufactured housing association executives, from across the U.S., have registered. Our hope is they’ll take some of the exciting and contemporary agenda topics back home with them, and plan New York Housing Association – like Super Symposiums during 2012, inviting some of our 20+ speakers to share their timely and oft critical messages with their members! For further information, phone (317) 346-7156.

*****
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.