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

Time to Hunker Down!

• MHFinance. Yet another paradigm shift in the way we do $$$?

• Your response to last week’s posting regarding muzzling this blog…

• New Day a – Coming? Dissolution of GFA Management, Inc., dba PMN Publishing.

I.

MHFinance. Yet another paradigm shift in the way we do $$$? Here’s an Executive Summary of sorts: ‘The days of third party chattel (personal property) finance for HUD Code manufactured housing – particularly homes in, or going into, landlease (nee manufactured home) communities, are all but gone; Yes, LLCommunity owner self – finance works for the few, but is ify for everyone else – Thanks to federal S.A.F.E. Act & other pending regulatory legislation. Today’s new and resale home transactions trend to be cash deals; leased homes (apartments) on – site; rejuvenated, modified lease – option arrangements; maybe even a True Lease alternative.’

Anyone active in the HUD Code manufactured housing (‘MH’) business since the turn of the century, knows of the industry’s financial self – emasculation (i.e. Turning homebuyers ‘upside down’, by dint of predatory lending practices) during its’ too brief renascence before and after 1998, a year when we shipped 372,843 new homes. Subsequently and consequently, we suffered more than 250,000 repossessed (manufactured) homes; saw LLCommunity occupancy plunge at least 10 percent, from an historic high national average of 95 percent; and rarely saw MH chattel loans securitized and sold on the secondary market – slowing our source of new capital for subsequent home sales. That situation has remained unchanged for a decade, and few see any possibility of improvement in the near or even foreseeable future.

LLCommunity owner self – finance of on – site home sale transactions has been around since the emergence of this unique, income – producing property type 60 years ago. It’s just taken different forms, and has been practiced to varying degree, over the decades, in response to infill needs, local housing market conditions, national economy, and availability of third party finance from local banks and credit companies. Self – finance hit its’ stride during the past ten years, as it’s somewhat filled the post renascence chattel finance gap described in the previous paragraph. In the Manufactured Housing $$$ Primer, published by PMN Publishing during 2010, the two most common, self – finance methodologies are defined as:

• ‘buy here – pay here’. A chattel finance or mortgage process that occurs on – site in LLCommunities when the property owner/operator collects mortgage payments from homeowners, and services said mortgages.

• ‘captive finance’. A chattel finance or mortgage process that occurs on – site in LLCommunities when a third party collects mortgage payments from homeowners, and services said mortgage in behalf of the property owner/operator.

As finance – related federal cum state legislation, and new bureaucratic watchdogs, are added to enhance regulatory oversight of consumer lending practices, both methodologies come under increased scrutiny, making the first alternative costly and treacherous; the second one, only slightly less so. For statistical data relative to estimated billions of dollars of ‘contract sale paper’, held among the 500+/- known portfolio owners/operators of LLCommunities, read the 22nd annual ALLEN REPORT. *1 This brings us to the third and latest paradigm shift in ‘the way we do $$$.’

Sunbelt regions have long experienced, and oft benefited from, periodic plethora of cash transactions, when marketing and selling new and resale homes on – site in LLCommunities. And in some blue collar local housing markets, as well as near military bases, even adjacent to college campuses, the availability of ‘manufactured homes (weekly or monthly pay) rentals’ in LLCommunities, has long been a symbiotic relationship for landlords and tenants. And now, partly in reaction to ‘enhanced regulatory oversight’ mentioned in the previous paragraph, LLCommunity portfolio owners/operators, large and small, have rejuvenated a rewritten Lease – Option (‘LO’) alternative that generally skirts the federal S.A.F.E. Act (‘Safe And Fair Enforcement’ of Mortgage Licensure), and state implementation thereof. Description of this LO program? Read details in the April or May issue of the Allen Letter professional journal.*1 And then there’s True Lease – which gives us something further, along this line, to cover in a future blog posting.

With all that said, where’s your future lie, as a HUD Code manufactured housing aficionado (e.g. manufacturer and MHRetailers) and or landlease community owner/operator, relative to the marketing and financing of new and resale home transactions on – site per this property type? In the first instance, manufacturers need – no, must, sell more new homes to survive, and eventually reverse, this nigh 15 year malaise (i.e. During last three years we’ve shipped only 50,000+/- new HUD Code homes per year!). How to improve on this? In part, continue to design and aggressively market Community Series Homes (‘CSH’) – usually singlesection models with front end porches or small multisection homes, to LLCommunity owners/operators. How to do this? Via nearly three dozen (should be four to five dozen in number!) Business Development Managers (‘BDM’), named and tasked with ‘walking and talking LLCommunityese’ from coast to coast. For information about CSH, contact Don Westphal via (248) 651-5518. And, for a copy of the latest BDM list, see end note # 1.

Now, how ‘bout the LLCommunity owner/operator? To begin with, these properties have to be READY in which to sell and finance new and resale homes. Most are not! Begin with attractive Curb Appeal (i.e. ‘How the property looks and smells, so to speak, to the casual passerby’); Ensure ‘good resident relations’ to Ensure ‘more resident referrals’, to Ensure ‘ maximum resident retention’; Practice professional property management (Are all your on – site managers trained and certified as Accredited Community Managers® or Manufactured Housing Managers? If not, they should be!); and, just as important as the first three readiness conditions, be sure managers and sales staff KNOW HOW to calculate ‘affordable’ and ‘risky’ Price Points for new and resale homes in their local housing market, using AMI (Area Median Income) for the local housing market, and AGI (Average Gross Income) of the individual or family buying the home. *2

Finally; when the property is truly READY, follow the lead of the too few forward – looking portfolio owners/operators, who’re aggressively marketing new and resale homes and properties, effectively using euphemisms (Reread last week’s blog) to position their product and lifestyle right amongst the best of the best alternatives in site – built housing, in and outside Sunbelt regions! *3

Your considered opinion and practical feedback on this timely $$$ description and industry/asset class recovery prescription?

II

Your response to last week’s posting, regarding muzzling this blog. Here’s a sampling of written responses, lightly edited, from blog floggers (readers) like you. There wasn’t a single response suggesting agreement with muzzling this blog!

“Good stuff. Personally, I do not like muzzles on anyone or anyone’s perspective, but especially not on someone who loves the industry and wants it to flourish. At the end of the day, whether we agree or not, we always have to answer the tough question, paraphrasing John Stuart Mill: ‘Either we find a better way of doing things or we confirm and thereby strengthen the current way.’ “ TC

“It sounds like you’ve hit on some ‘soft spots’ on the underbelly of the (our industry’s) beast, now the beast is pissed and trying to bite back. Good job. This is what journalism is all about, isn’t it?” JK

“I would hardly characterize your blog as doing ‘more harm than good’. To the contrary, it’s a timely, refreshing, candid source of valuable industry information that never comes across, to me, as negative, or in any other way intended to hurt our chances for an industry recovery. To me, it’s quite the opposite – you may point out where our weaknesses are, or where leadership is lacking, but you always do it in a way that motivates me, and others, to implement change and become more involved in the restructuring, and ultimately – the revival of the manufactured housing industry. Keep up the good work.” GH

“Wow, George. You are hitting the target! This straight talk is what the industry needs. Will it matter? Fall on deaf ears? Many of these folk (as you call them) are in a similar denial as Gadaffe is over in Lybia. None are mean – spirited, just still worshipping false gods of ‘how things used to be.’ “ MP

Hey, Thanks for the strong positive response to the unexplained ‘Attempts to muzzle this blog’ subtitle in last week’s blog posting. I, and hopefully many of you, feel empowered anew! GFA

III.

New day a – coming? Dissolution of GFA Management, Inc., dba PMN Publishing.
Maybe some details next week, or the week or two thereafter. Will tell you this, however; some of what I’ve been doing these past several decades will likely be used to enhance LLCommunity owners/operators presence on the national scene; others seek to improve statistical research and reporting, relative to the asset class; yet others, are desirous to improve professional property management training and certification; and, last but not least, a new initiative might be on the offing, to unite and serve small LLCommunity owners/operators nationwide! Bottom line? I’m cautiously optimistic my plans to at least semi – retire by the end of 2011, are realistic and achievable. What will I be doing in 2012? Stay tuned….

IV.

Tomorrow I fly to Albany, NY., to participate in the New York Housing Association’s Super Symposium II. Sure hope to see and talk with many of you there. As I’ve written here before, this is the strongest lineup of presenters I’ve seen, in the MHIndustry & LLCommunity asset class, in a long time. How can you not be present? To register, phone (518) 867-3242. Tell Nancy, ‘George sent me!’ See YOU there!

V.

Potpourri. ‘Thanks’ to the many of you who’ve sent your ‘Congrats!’ this past week. Means a very great deal to me. Maybe we’ll be together the evening of 1 August 2011 at the RV/MH Heritage Foundation’s Hall of Fame Induction Banquet in Elkhart, IN. For details, phone (574) 293-2344 and talk to Al Hesselbart.

And watch for an exciting story to soon come out of Maine! Talked with Karen Brown – Mohr this week, and is she ever ‘pumped’ about her association’s recently completed, day long strategic planning, brainstorming event. Can hardly wait to write about it! Are YOU planning a similar ‘take control of your future’ event? If so, invite me to participate as a provocateur, scribe, and historian.

Are YOU reading, Factory Built Bulletin? Quite a few ‘industry insiders’ do. For $5.00/year, receive this periodic ‘source of factory – built housing information’ (for homeowners), published since 2003. I do. Phone (866) 764-5505 to subscribe.

*****
End Notes.

1. To order the 22nd annual ALLEN REPORT (Ask for special pricing); and or the Manufactured Housing $$$ Primer, only $29.95 postpaid, phone (317) 346-7156

2. For ACM® information, phone Lisa Brechtel @ NCC: (703) 558-0666. For MHM class information; and to order a FREE copy of the ‘Ah Ha! & Uh Oh! Worksheet’ for calculating new and resale home price points, phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

3. Here’s a tip to know whether your property and staff is truly READY to go! Be sure the Five ‘Ps of Marketing’ are in place and positioned, e.g. Place (location); Price (housing prices & site rent in sync with local housing market); Promotion (measure the volume and conversion rates of phone calls to on – site visits to approved applications); Product (Homes & property ready to SHOW now?); and, in this observer’s opinion, People (Is your on – site staff trained and motivated to effectively sell homes and lease homesites?). How to really know all this is coming together ‘rightly’? Have the property(ies) Mystery Shopped, by telephone and via unscheduled on – site visits, by anonymous, experienced professional ‘shoppers’! For information, call the MHIndustry HOTLINE.

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

Will Euphemisms Save the Manufactured Housing Industry
&
Landlease Community Lifestyle?

• Wordplay. Euphemisms increasingly used as marketing smokescreen

• National Communities Council. Bully pulpit at fork in the road?

• Attempts to muzzle this blog….

I.

Wordplay. Euphemisms increasing being used as a marketing smokescreen of sorts.

‘Euphemism’ According to The New American Webster Handy College Dictionary, is “…the use of a mild word in place of a plainer but possibly offensive one.”
Will liberal use of euphemisms SAVE the manufactured housing industry and landlease (nee manufactured home) community lifestyle? In the former instance, from continuing to crawl along at its’ past three years 50,000 ‘annual home shipment’ pace. And, in the latter case, heading off declining physical occupancy of rental homesites? Too early to tell; but let’s take a look at some of the euphemisms ‘in play’ in print and online advertising today.

Last week’s blog posting ended with this teaser: “There’s a whole new privately conceived, funded and implemented national manufactured housing product and image marketing strategy already in play, regarding the smart positioning and advertising of an entire retirement landlease community property portfolio!’ The strategy referred to is the liberal use of euphemisms to describe manufactured housing and landlease communities (‘LLCommunities’). Well, since last week’s posting, I’ve learned of at least three additional landlease community portfolios ‘doing the very same thing’! And we’re not talking about properties just located in Sunbelt regions either. During the past month, I’ve spotted and visited euphemistically – enhanced in a Middle Atlantic state, the upper Midwest, and elsewhere.

In the current issue of one national magazine catering to retirees, euphemisms were used to describe ‘manufactured housing per se, in LLCommunity environs’ this way: “…carefree retirement living, wonderful homes, fantastic amenities, professional community management, and friendly neighborhoods.” Nary a mention of manufactured housing or LLCommunity in the mix! And know what? That’s perfectly fine! New HUD Code manufactured housing product is akin to site – built housing in just about every way except for genuine brick/stone veneers and prevalence of two story models. Similarly with LLCommunities. Today’s properties are oft indistinguishable from subdivisions, except for the presence of ‘professional management’ (Frankly, I take umbrage with firms who advertise such, but whose managers – from top to bottom, are sans commonly – recognized “PM’ credentials to that end: CPM®, ACM®, MHM, etc.), and indicators of leases and home site rental rates.

Are there other euphemisms in play these days? You bet.

Relative to LLCommunities? All the following end with the word ‘community’ and are listed in order of declining frequency of use: retirement community, life – care, rental retirement, residential, resort – style living, campus – style, certified retirement, senior, Mediterranean village –style gated, accredited, garden neighborhood, country club – style, full service – retirement, luxury retirement, senior living, gated, & waterfront retirement – living.

Relative to manufactured homes? Again, listed in order of declining frequency of use: cottages, villas, garden homes, single – family homes, wonderful homes, residential living homes, patio homes, ranch homes, town homes, duplex homes, free – standing homes, single story accommodations, & garden villas.

Even ran across a euphemism for what we commonly refer to as ‘rental homesites’ (nee lots, spaces, stalls). How ‘bout ‘homesites for investment’. Nope, not talking about being conveyed fee simple here.

Don’t know about you, but I surely hope this strategy works! The recent call for a National Image Improvement Campaign certainly hasn’t. Anyway, the concept is simply to remove the ‘manufactured’ label from our quality housing product; and, while ‘landlease’ clearly describes our type income – producing property, the use of consumer – friendly euphemisms helps here too. But the ‘catch’, the caveat! To effect such a forward – thinking strategy, senior management must be marketing and selling the best housing product possible, at truly affordable prices; and, the host property must be deserving of the new moniker used to market it! This latter point harkens to the earlier parenthetical criticism of our asset class’ general lack of professional property management training and certification, and our avoidance of regularly using ‘capable, experienced, motivated’ third party professional Mystery Shoppers to take ‘hard looks’ at what and how we’re marketing and selling, by telephone, online, and in person, now using consumer – friendly, or should we say housing and property – enhancing, euphemisms!

By the way, there’s more to this strategy than simply using euphemisms. It might well involve completely altering a firm’s identity and more. But we’ll talk about this, and other measures, in a future posting….

II.

Manufactured Housing Institute’s (‘MHI’) National Communities Council (‘NCC’) division. Bully pulpit at a fork in the road?

I got two things out of last week’s meeting (3/14/2011) of MHI’s National Communities Council division. 1) Numbers tell a compelling story, and 2) there might well be a way around the infamous S.A.F.E. Act for landlease (nee manufactured home) community owners/operators!

In the first instance, here’re the hard cold facts. Only 78 names on MHI’s meeting official registration list. I’m one longtime member who recalls attendance eclipsing 200, in years past; and, at times, we’ve had nigh as many folk (75) at an NCC meeting! Of the 78 present, 19 were state association execs present (didn’t count Certified Reps) – the best represented segment of the MHIndustry for a change; a dozen landlease community (‘LLCommunity’) owners/operators; and, five HUD Code home manufacturers.

Of the dozen LLCommunity owners/operators present, seven were bona fide property owners, albeit ‘small ones’, owning from one to 16 properties apiece, for an average of five LLCommunities each, though three of us own but one of these unique income – producing properties. The five remaining NCC members were senior executives representing five mid – to – major portfolio ‘players’, averaging more than 50 LLCommunities apiece! Bottom line? Majority of attendees at this sparsely attended NCC meeting were small Mom & Pop owners, ‘yours truly’ included. However, the lions share of properties (i.e. 265+/- vs. 30+/-) were represented by five salaried execs. Previously agreed upon replacements for recently departed Greg O’Berry – chairman, and as other council executive positions, were summarily filled by three of these large portfolio operators. Interestingly, none of the three real estate investment trusts (‘REIT’) were represented at this meeting.

A timely question that begs answering, given the ‘near even – but also lopsided’ representation at this NCC meeting – described in the previous paragraph, is this:

Will MHI’s National Communities Council continue to be regarded, as it presently is by many asset class aficionados – as the ‘big boys club’, a semi – derisive commentary regarding presence and control of proceedings by major portfolio owners/operators; OR, will NCC leadership take definitive steps in the near and not too distant future, to identify advocacy, property management training, information, and related needs of smaller owners, to aggressively recruit them as new and active members of the council division?

Hence, maybe we’re at a fork in the road, relative to LLCommunity representation. The following sentiment is often expressed privately, but rarely publicly: ‘We’re either in this (‘NCC’) altogether in demonstrable fashion, or perhaps we – being major portfolio ‘players’ & Mom – Pop investors, should go separate ways, based on sometimes dissimilar marketing, operational, legislative needs and resources. And NO, this is not the opening gun to creating a new national trade or advocacy body for small LLCommunity owners/operators! It wouldn’t work anyway. Why? Lack of charismatic, widely known, national leaders, to take folk in a new direction; and, getting Mom – Pop owners/operators motivated to join with their peers, after 60 years of being loners.

However, rejuvenation of NCC membership, under the administrative leadership of Lisa Brechtel, and new chairman Steven Schaub of YES! Communities, David Lentz of Green Courte Partners/American Land Lease, and Stephen Braun of Hometown America, is entirely possible! The question is whether there’ll be directed and concerted efforts to increase membership and services across the board, or in one ‘group size’ direction or the other.

A related sidebar to all this, is while 43 percent of MHI’s budgeted income for 2011, is predicted to come from the manufacturers division, 19.5 percent is expected to come from the National Communities Council division; taken together, 62.5 percent of MHI’s total annual revenue is scheduled to come from these two divisions alone! To date, 42.8 percent has come in from manufacturers, and 20.6 percent from LLCommunity folk. Who’d a thunk; nearly 18 years ago, on 31 August 1993, when 18 LLCommunity owners/operators convened in Indianapolis, IN., to form the Industry Steering Committee (‘ISC’) – predecessor to the NCC, this real estate asset class would be 20 percent of the financial lifeblood of the Manufactured Housing Institute.

Oh yes, the second important thing I learned at last week’s NCC meeting! The lease – option, for self – financing new and resale homes on – site in LLCommunities, is experiencing far broader corporate application these days, in certain quarters, than previously realized. How’s it work? There’ll be a feature story in April’s issue of the Allen Letter professional journal, either integral to the newsletter or enclosed as a lagniappe, detailing ‘How to Do Lease – Option Right!’ Be sure to get and read your copy. Why not share details here? This blog posting is already long enough (Some will opine, ‘too long’) as is; and I really want to do this ‘expose & How To’ justice! Need a subscription to the Allen Letter professional journal? Read last paragraph of section IV of this blog, or phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

III.

Attempts to muzzle this blog

Let’s go into this at a later time. Just know, for now, some of the frank commentary appearing in this blog is perceived, by some, as maybe doing more harm than good. Do YOU see it that way? If so, please let me know in writing (see signature block at end of this posting). If not, I’ll also appreciate your encouraging words….

IV.

Inquiring minds want to know – and will be told, on 29 & 30 March, in Albany, NY.

If YOU own and or operate landlease communities East of the Mississippi and North of the Mason Dixon Line, YOU owe it to yourself to be present at the New York Housing Association’s Super Symposium II in 1 ½ weeks. Expecting close to 200 LLCommunity owners/operators to be present to be engaged by the best lineup of presenters, on in – community financing, ‘in years’. For information, phone Nancy Geer at (518) 867-3242.

And, if you’re selling and self – financing, or even leasing, new and resale homes on – site in your LLCommunities, but can’t be present at this stellar event, then at least buy the only book ever published (in 2010) on this timely and strategic subject. It’s the Manufactured Housing $$$ Primer, available only from PMN Publishing, for $25.00 (or $29.95 postpaid) per copy, by phoning (317) 346-7156. And while you’re at it, consider buying a copy of the 22nd annual ALLEN REPORT and one year subscription to the Allen Letter professional journal for total of $250.00 (postpaid) for both items! Also know the April issue of the newsletter will contain FREE copies of the 13th annual National Registry of Real Estate Lenders & Brokers Specializing in LLCommunity Mortgages, and the 12th annual ‘Who Ya Gonna Call in 2011?’ directory of freelance national consultants active in the MHIndustry & LLCommunity asset class.

Here’s a compelling reason to acquire these two Signature Series Resource Documents: If no one steps up to the plate, during 2011, to acquire copyrights to these items, they’ll likely not be available in 2012, if I’ve at least semi – retired by then! Think about it….

*****

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

YOUR TURN TO VENT & BE TITILLATED!

Tales, Opinions & a Lament, from MHIndustry Blog Floggers (readers); &,
Allusion to Major Occurring MHIndustry News You’ll Read Nowhere Else!

But first. Given the remote possibility you don’t know HUD Code manufactured housing continues to be ‘in the tank’ – ‘an historic nadir’, annual shipment volume – wise, know this: Year 2010 HUD Code manufactured housing shipments numbered 50,046 units; up just 257 homes from year 2009 total of 49,789. This is probably why an industry pundit recently labeled the past decade, ’a mhcession in the midst of the national recession’. And ‘No’, this is not the allusion to major occurring MHIndustry News available nowhere else….

I.

DISCLAIMER. The following tales, opinions and lament, provided by MHIndustry and LLCommunity aficionados, have been edited for length and clarity of expression, and are not necessarily the views of the blogger! GFA

The vicious cycle. This from a licensed MHInstaller: “Recently went, on behalf of a HUD Code home manufacturer, to a home that had problems. Had lots of water under it, the roof was dripping, floor squeaked, and doors stuck. Asked the MHRetailer, “Who set this up?” He replied, he did. I asked, “Why the water?” MHRetailer said he made a deal with the homeowner, that the homeowner would grade the lot. I said, “Well, couldn’t you see he did it wrong?” MHRetialer, “Not my problem!” I said, “Really, so why are you here now?” His response was that the home manufacturer said to show up, so he did. The manufacturer’s rep was outside, beating his head against a tree (figuratively speaking, I think), saying “How can you make someone care?” The vicious cycle: ‘The manufacturer can’t or won’t fire the MHRetailer. The MHRetailer can’t fire the homeowner for grading the lot wrong; and, the local building inspector is clueless and couldn’t care less. It was, after all, ‘just a trailer’.’ Frankly, this is how as an industry, we are sometimes our own worst enemy.

In search of a solution. This from a veteran landlease (nee manufactured home) community owner in the Southeast, asking ‘What’s wrong with this, if anything?’ “I buy a home from a resident or finance company for $10,000. and fix it up. Now I want to sell it outright for $20,000. or am willing to do a ‘rent to own’ if need be. So, a resident moves in and pays me $600 per month, with $200 of that earmarked for site rent, the balance is credited toward the eventual purchase of the home. Assuming there’s ‘no cash down payment’ and no interest or carrying charge, the home is paid off in 50 months. If resident want s to pay it off early, there’s no pre – payment penalty. If they abandon the home, the arrangement ends. I go into the home each month to change the AC filters and spray for insects. This allows me to oversee the condition of the home as long as I own it. If the arrangement goes bad, no public tax money is lost, no lender suffers, only me.” In search of a solution. What do YOU think or know?

The Mom & Pop Lament. This from a veteran LLCommunity owner in the Midwest. “The name of the game is to keep buying homes, so our rental homesites can remain filled, or sell out. My local bank doesn’t want me to sell out, but I get weary always being right at my credit limit for the home sales part of my business. And I really don’t like the ‘rent to buy’ avenue, even though it doesn’t differ much from a contract sale. But buyers do tend to feel a little more obligation if they’re buying on contract, rather than renting to own. It’s only semantics, to me, as ‘contracts’ are simply glorified ‘rentals’.” The Mom & Pop Lament. What would YOU do? What are YOU doing?

Large versus small owners/operators. This from a longtime LLCommunity owner in the East. “As I’ve said before, George, large operators and small operators of LLCommunities, march to different drums. The (operational) problems are identical, but solutions totally different; in that small operators can (and do) make decisions instantly, without worrying about stockholders, multistate regulations, Wall Street analysts, and the SEC. Smaller operators are more secure and comfortable in what we’re doing, and are more forthcoming – willing to share all when asked, describe what works and what doesn’t, with others in the business. People who work for big outfits think they’re going to get dismissed if their boss finds out they got a good idea from someone else. Hence, they oft parade around telling everyone they’ve got everything figured out. Usually takes two to three years to learn they don’t, then they get canned and the process begins over again. Do I care those guys disregard my advice or what I do? It would be real hard for me to care less!” Large versus small owners/operators. Has this been your experience, or something different? In fairness and truth, salaried LLCommunity executives are vulnerable to the whims of their bosses, while sole proprietors have ‘all their skin in their game’, understanding the concept of profit as being their ‘reward for taking risks!’

II.

In an earlier blog posting, we introduced the latest ‘trick pony’ to fill pages in real estate – related publications. Not any particular ‘generation’ demographic, or how to ‘leed’ the way ‘going green’, rather the concept (or fad?) of Sustainability – one more idea in play to end the national recession, mancession (i.e. More unemployed men than women), maybe even the decade long mhcession! (Described in first paragraph of this blog!)

Well, here’s how one blog flogger addressed Sustainability – ‘the innate ability to withstand normal use’. The writer comes at this, within the context of the MHIndustry, by citing personal and career expertise and experience as a home designer, consumer advocate, manufactured home owner, even MHLobbyist….

Home designer. “A firm I worked for, marketed modular homes as being comparable to ‘stick built homes’. Why? Cuz the public kept comparing ‘mods’ to ‘mobile homes’, which ‘everyone knew’ were temporary structures, underscored by ease of relocation among ‘mobile home parks’.” Situation here, where structural design and quality of fabrication, to enhance transportability, did not translate as Sustainability.

Consumer advocate disguised as a production inspector. “The corporate focus, observed while a plant inspector, was ‘Get those boxes out the back door!’ From sales commissions, to production line worker incentives, to corporate exec bonuses, all was geared to how FAST the completed boxes could be pushed from the plant. Yes, some companies gave lip service to quality, but that’s all it was; and too often still is, little more than a corporate smoke screen.” If true, how difficult –if – not – impossible it is, to build and ship a structure that’ll withstand normal use over time (Think Sustainability!), while using particle board flooring in bathrooms, thin gauge flap door hinges, plastic plumbing fixtures, and the like….

Manufactured home owner. “While still working in the MHIndustry, I purchased one of the best manufactured homes on the market, ‘fully optioned out’, and sited it on my own land. Since moving into this home less than a decade ago, I’ve completely rebuilt one bathroom due to water line damage incurred at the plant – but not realized till much later. Replaced the water heater after three years of use; the original refrigerator and dishwasher after four years. Air conditioning system is in the process of being replaced, along with kitchen counter tops. Carpet is shot, but will have to wait till savings catch up with expenditures.” Sustainable? Not this one.

Industry lobbyist. “Here’s an acid test. Ask anyone who works in manufactured housing this question: ‘Do You live in a manufactured home?’ Not many do; prompting recollection of that classic joke about not marrying a virgin from a certain distant state. ‘Why not?’ “Because if she isn’t good enough for her own kin, she isn’t good enough for you!” So, people who work in the MHIndustry know the product is temporary. In fact, a former colleague, upon hearing me grouse about problems with my home, commented: “You work in the industry, you should have known better than to BUY one.” Not sure how this observation squares with being an industry lobbyist; but it does raise further questions about product Sustainability. What say YOU?

III.

Not entirely sure what direction I’ll go with next week’s blog posting, but will tell you this: There’s a whole new privately conceived, funded and implemented national manufactured housing product and image marketing strategy already in play, regarding the smart positioning and advertising of an entire retirement landlease community property portfolio! In a word, it’s stunning ‘re – branding’; though its’ creator might disagree, and opine it’s ‘debut branding of the first order’! Either way, it is quite the unfolding marketing tale, about which more research and documentation needs to occur, before sharing specific or generic details here and elsewhere. Think Trojan Horse….

IV.

Have YOU made reservations to attend New York Housing Association’s Super Symposium II in a little more than two weeks? Surely hope so! Expect to interact with close to 200 LLCommunity owners/operators. For information, and to register, phone Nancy Geer @ (518) 867-3242.

I certainly plan to be present, and will bring along remaining copies of the 22nd annual ALLEN REPORT, to sell at a very special price. Or, if you don’t want to wait until then, phone (317) 346-7156 and ask for the special offer combination of the ALLEN REPORT & one year subscription (12 monthly issues) to the Allen Letter professional journal, together for only $250.00. – that’s a $334.95 savings off the cover price of the report & $134.95 newsletter subscription price! Offer only good as long as there’re copies of the 22nd ALLEN REPORT.

*****

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

MHIndustry’s Business Prosperity Glass Nearly Empty or Soon Filled?

Manufactured Housing’s Title I (chattel) financing. Victim of past abuse, today’s macro economy, uncertain capital markets, & widespread misunderstanding? A Look at the latter

Gotta love landlease communities; just don’t abuse their inherent investment strengths

Join me in Albany, New York, on 29 & 30 March 2011 for Super Symposium II

I.

Manufactured Housing’s Title I (chattel) financing. Victim of past abuse, today’s day macro economy, uncertain capital markets, and widespread misunderstanding.

Two weeks ago, in this Official MHIndustry & LLCommunity Blog, I penned: “Yes, it snuck up on me too; the realization HUD Code manufactured housing has permanently changed during the past decade, to the extent of being market – stiffed; maybe forever, sans new sources of third party chattel (personal property) finance!” That observation was straight historical retrospect, relating to the latest round of lending abuse foisted on homebuyers and investors, by the MHIndustry, at turn of the 21st century.

Last week, I cited the following confirming observation, quoted directly from a recent communiqué’ of the Manufactured Housing Association for Regulatory Reform (‘MHARR’): “…the one HUD program that helps put lower and moderate income consumers (i.e. manufactured home buyers) into new homes they can actually afford – the FHA Title I manufactured housing program – is subject to unreasonable and unnecessary restrictions that effectively limit it to only one financing provider and a minimal number of loans (1,834 during fiscal year 2010).”

I’ve since learned, the previous paragraph, relative to the FHA Title I (chattel or personal property loan) program, was viewed by some as misleading, causing confusion within some circles in the MHIndustry. To that end, I asked Thayer Long, of the Manufactured Housing Institute (‘MHI’), to set the record straight. Here he does so:

“The FHA Title I program is fully functional, and there is nothing in it that places unnecessarily high restrictions, preventing lenders from being Title I approved lenders! The reforms made to the Title I program were championed by all industry groups, and include a 90 – 10 risk share of loan loss; meaning, 90% of loan loss is covered by FHA, while the 10% loss remainder is assumed by the lender. I repeat, there is nothing wrong with the Title I program.”

“MHI has serious concerns, however, regarding capital requirements Ginnie Mae expects of securitizers of Title I loans, i.e. a lender must have a $10 million net worth, and keep an additional ‘reserve’ equivalent to 10% of the lender’s outstanding loans! Reasons? First, the aforementioned risk share. If a lender goes out of business, Ginnie Mae assumes the 10% loss incurred by the now defunct lender. Second; Title I loan actuarial data for their new program is lacking, since it’s so new, forcing Ginnie Mae to rely on old program loan performance for anticipated outcome. Third; Ginnie Mae’s approval is not structured for every lender. Only a fraction of FHA lenders ever become Ginnie Mae issuers. This is usually because one needs a large volume of loans to securitize, hence an aggregator to pull them together into loan pools.”

“Furthermore, MHI has had several meetings with FHA and Ginnie Mae staff, to encourage scaling back capital requirements for smaller lenders. Ginnie Mae can waive capital requirements if they feel comfortable with a lender. In fact, we believe if loan performance under the new program continues to improve, as we expect, they’ll likely reduce capital requirements for everyone.”

Bottom line? It’s not that MHARR’s statement was totally off track, but rather should have treated the matter as two related, but different aspects (i.e. FHA Title I & Ginnie Mae) of chattel (personal property) lending, relative to HUD Code manufactured housing. Anyway, Thayer Long ended his clarification by pointing out “…all this is a complex issue, impossible to fully explain in just a few paragraphs.” Now YOU know!

But even with the preceding explanation, not everyone in the MHIndustry believes ‘a better (lending) day is a – coming’. One MHVeteran, a highly respected financial advisor, lender and servicer, responded to last week’s blog thusly:

“I noted in your blog, you have finally come to realize Title I simply will not save the industry, no matter what _____________,or others, have proclaimed. And it’s not that Title I, or ‘Buy here – pay here’ and ‘captive finance’ methodologies can’t work in certain limited circumstances. It means, as I’ve oft said, ‘they alone’ cannot fuel a 100,000+ new home shipments per year industry! That seems to me, to be as apparent today as it was five to seven years ago. There simply is NO industry chattel loan silver bullet, none!” The writer goes on to suggest “The GSEs and HUD will not do any loans, even per our industry’s largest ‘players’, if they feature 16 – 19 percent default rates, and lots of work for originators” – the federal S.A.F.E. Act notwithstanding.

What’re the ‘certain limited circumstances’ referred to in the previous paragraph? Larger landlease (nee manufactured home) community portfolio owners/operators, frequently market and sell new and resale homes on – site, then (property owner) self – finance said transactions via ‘captive finance’ (i.e. using a third party financial service firms to collect mortgage payments from homeowners/site renters, etc.) or ‘buy here – pay here’ (i.e. property owner services his/her chattel loans to homeowners/site renters) methodologies.*1

Prevalence of this practice? Estimated chattel loan volume (contract sale paper) held by 500+/- LLCommunity owners/operators during 2009, was $3 1/2 billion. According to the 22nd annual ALLEN REPORT, by year end 2010, that total had swelled to nearly $5.2 billion! And it’s important to keep in mind, these 500+/- property portfolio owners/operators control only 10 – 15 percent of LLCommunities in the U.S., albeit the largest ones (i.e. properties containing more than 100 rental homesites apiece). *2 Furthermore, unlike a decade ago, when only ‘mobile homes’ (a.k.a. pre – HUD Code homes) and manufactured homes were sited in LLCommunities; today there’re at least four additional ‘types of housing’ to be found, e.g. ‘park model’ RVs, modular homes, ‘RVs for a season’, even site – built homes designed and constructed on – site to look like manufactured homes. So, word – playing the old country hit song, ‘A Community Owner Can Survive!’ – even ‘thrive’, as new HUD Code home shipments languish at 49,000 per year, as in 2009 and 2010. But there’s another side to this story. Read on….

II.

Don’t abuse inherent strengths of LLCommunities as realty investments!

Just what are the Eight Good Reasons LLCommunities ‘enjoy a near perennial sellers’ market among tens of thousands of real estate investors throughout the U.S. and Canada’? Well, they’re listed on page nine of the aforementioned 22nd annual ALLEN REPORT. But here we’ll identify three of them here, along with cautionary advice regarding how ‘not to abuse’ these inherent strengths:

• Stable competitive site rent! This is the second biggest bugaboo directly affecting property operating performance throughout the asset class. Time and again, novice – as well as some experienced realty investors, have been overly aggressive with rental homesite rent increases in specific local housing markets. Now some are paying a bitter price, typified by severely lower physical and economic occupancy at best, property forbearance or foreclosure at worst. Is there a formula for computing competitive but fair site rent? Yes. But rather than repeating it here, suggest you scroll back through the blog archive at this Official MHIndustry & LLCommunity website for earlier detailed descriptions. In the meantime, know an online resource has been identified, one that provides quarterly ‘apartment rent’ information for 200 SMSAs (Standard Metropolitan Statistical Areas, or urban markets), and is now being compared, ratio – wise, to LLCommunity homesite rental rates in the same markets, using data researched and published by JLT & Associates – to ‘proof’ or modify the aforementioned formula. Results of survey will be first published in the Allen CONFIDENTIAL! business newsletter, then the Allen Letter professional journal. *3

• Low operating expense ratio or OER! One would think this is a ‘no brainer’, but it’s not. It boggles the mind, to realize how many owners/operators don’t know how to compute, let alone use, this key statistical benchmark of operating efficiency. Simply divide Total Amount of Annual Operating Expenses (not including debt service/mortgage $) – or the total expense amount from just one Industry Standard Chart of Operating Expense Accounts category (e.g. refuse/trash removal), by Total Annual Amount of Site Rent Collected: $192,000 divided by $480,000 = 40% or .40 overall Operating Expense Ratio or OER. While this percentage happens to be the OER planning model for this income – producing property type (a.k.a. the Allen Model, featured on above – referenced Industry Standard Chart of Operating Expense Accounts), know that conventional apartment national OER is frequently 10 – 15 percent higher (given high resident turnover, expensive maintenance ‘get ready’ of vacant units, etc.), while LLCommunity OERs are also known to drop by half, when larger (200+ sites) are managed efficiently. What’s the OER for your property or properties? If you don’t know, you can’t control, let alone improve it! *4

• Opportunity to add value. This is the primary, uncertain bugaboo – more accurately, ‘bugbear’, affecting LLCommunity ownership/management these days! How to add value? In this instance, ‘Buy homes, then rent or sell & finance them on – site…’ (quoted from ALLEN REPORT). So, how’s this a bugbear? Unlike late 1970s & early 1980s – the ‘first go round’ of this nature (post implementation of the HUD Code in 1976), when these practices were generally unregulated; the recent bursting of conventional housing’s finance bubble has caught the MHIndustry up in its’ consequences as well. This has meant a whole new array of housing finance regulatory legislation and measures. Think the federal S.A.F.E. Act (and variegated state implementation thereof), Red Flag, and the like. Today, only the largest of property portfolio owners/operators might have a handle on the matter. Relief? Maybe, but too early to tell whether concepts like True Lease (of homes) will shelter some owners/operators. Read about these developments here first, and in one or another of Rishel Consulting’s free and subscriber – supported monthly chattel finance newsletters. (217) 971-3968.

There’re five additional ‘good reasons to invest in LLCommunities’ we won’t parse in this blog today. But again, whether a potential or novice investor in the unique asset class, or even as an experienced owner/operator, YOU should be comfortably familiar with all eight inherent strengths! If not, order a copy of the ALLEN REPORT and strengthen your investor knowledge of this income – producing property type!

III.

“Changing demographics, including household formation and housing consumer tastes, pose significant challenges and opportunities for the manufactured housing industry. As we emerge from the ‘great recession’, hear projections on when and how manufactured housing can lead housing’s return. Gain insight into how the industry, and LLCommunity owners, can best position themselves by understanding trends in the overall housing market. This session will also examine housing affordability, efficiency, and related strategies for manufactured housing.” Dr. David Funk, Cornell University

Need I say more? This is Dr. Funk’s clear and comprehensive description of the keynote address he’ll deliver at the New York Housing Association’s upcoming Super Symposium II in Albany, NY., on 29 & 30 March 2011. Will YOU be there? I certainly plan to be; wouldn’t miss those insights, as well as others from several excellent presenters.

And there’ll be several new HUD Code ‘Community Series Homes’ on display during the symposium. Here’s a question for you: Know how to calculate the sale and mortgage ‘price points’ a prospective homebuyer, or even the average consumer, in any local housing market in the U.S., can ‘affordably’ afford when buying a new or resale home within a LLCommunity or to be installed on a fee simple scattered building site? If NOT, be sure to attend this symposium to learn how to use the widely – acclaimed ‘Ah Ha! & Uh Oh! Worksheet for this purpose! For a program agenda, hotel accommodations, and registration information, phone Nancy Geer via (518) 867-3242.

*****
End Notes.

1. For more information on this specialized subject, read the Manufactured Housing $$$ Primer, PMN Publishing, Franklin, IN., 2010. Phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764, or (317) 346-7156. $25.00 postpaid.

2. For a copy of the 22nd annual ALLEN REPORT, phone the MHIndustry HOTLINE (See # 1 preceding). For a limited time, the $450.00 annual report is available for only $250.00 – and if mentioned when ordering, includes a one year (12 month) subscription to the Allen Letter professional journal at no additional cost!

3. To subscribe to the Allen CONFIDENTIAL! business newsletter, phone the MHIndustry HOTLINE (See # 1 preceding). Cost? $950.00/year (12 monthly issues), but only $750.00/year for subscribers to the aforementioned Allen Letter professional journal.

4. For a FREE copy of the GFA Management, Inc., (2) Number Crunching Cards, containing all operating formulae characteristic of the LLCommunity asset class (e.g. physical & economic occupancy, home & resident turnover, OERs, ‘cap rates’, New Rule of 72 – for estimating capitalized income value of a ‘C’ grade LLCommunity, & IRV, phone above – referenced MHIndustry HOTLINE (See # 1 preceding)

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

No One Else Will Tell You Any of This….

To REIT or Not To REIT?

Your Response to ‘New Era – New Voice’ Announcement!

How Many MHs in LLCommunities Nationwide?

And, ‘What’d I tell you?’

I.

To REIT or Not to REIT?

For a privately held firm to launch an IPO (‘initial public offering’ of stock), and become publicly – owned, as a real estate investment trust (‘REIT’), is no small, hasty or inexpensive decision! But since rumors are afoot these days, to that end – amongst one or more landlease (nee manufactured home) community aficionados, let’s take a cursory look. But first, a cautionary word from ELS’ Sam Zell, quoted in the February 2011 edition of Multifamily Executive magazine (p.16):

“I think there have been a lot of attempts to create REITs. The problem is one of
scale. If anything, I think the Street has learned, since the dawning of the modern
REIT era, that liquidity equals value. I think some people will make some serious
consolidations.”

For historical perspective, within our unique real estate asset class, pick up your copy of the 22nd annual ALLEN REPORT and turn to page # 22, and peruse the ‘Rental Homesite Count Among LLCommunity REITs’. Look down to the bottom of the list to 1994 entries. At that time, when ELS, Inc (nee MHC, Inc.) was first listed as a REIT, the firm owned 28,407 rental homesites; long gone Chateau Communities, Inc., had 15,689 sites; and, Sun Communities, Inc., claimed the fewest at 13,500 sites. UMH Properties, then already a REIT, owned but 4,623 sites.

Now turn back to page # 19 to see which of this year’s ALLEN REPORT listees own close to, let’s say 13,000 rental homesites (Thinking of Sun’s 13,500 rental sites in 1994), in their LLCommunity portfolios.

• American Residential Communities, a.k.a. ARC*1 54,933
• Hometown America 52,567
• RHP Properties 19,825 + 3,143 fee
• Lautrec, Ltd. 22,063 + 668 fee
• YES! Communities*2 18,388 + 77 fee
• Parkbridge Lifestyle (Canada) 18,254
• American Land Lease (Green Courte Partners) 16,690 + *3
• Carefree Property Management 12,990 + 288 fee

*1 formerly Affordable Residential Communities, and a REIT @ 2004 & 2005
*2 comprised mostly of former CMH (Clayton) LLCommunities
*3 with late 2010 acquisition of six LLCommunities & 1,850 sites from Florida – based CRF Communities, constructively moves this firm up from #9 to #7 on 22nd AR.

So, does this mean one or more of these firms will become a REIT during 2011, or even 2012? No, not at all. Simply identifying firms maybe large enough to do so. For that matter, there’s at least one veteran firm on the above list who was around when two previous REIT waves occurred, but never made the switch from private to public ownership.

Don’t have, but would like a copy of the aforementioned 22nd annual ALLEN REPORT? There aren’t many left. Either pay the cover price of $450.00, OR, reduced amount of only $250.00, and receive the 50+ page annual report, AND a one year subscription (12 monthly issues) to the Allen Letter professional journal. Simply phone the MHIndustry HOTLINE @ (877) MFD-HSNG or 633-4764, or (317) 346-7156 & mention this special offer!

II.

‘COMING! A New Era & A New Voice for Manufactured Housing’

Last week’s blog post title spawned more than a dozen thoughtful, and often lengthy, written replies from blog ‘floggers’ (readers) representing virtually all segments of the HUD Code manufactured housing industry! No way can we fit all, or even a select few of them, into this week’s posting; so, will spread them out during the next several weeks, as we consolidate replies – pro & con – per topic foci. Keep those facts and opinions coming via Gfa7156@aol.com

Frankly; in nearly 30 years of writing ‘about, for, and to’ the manufactured housing industry and landlease community real estate asset class, this weekly blog posting routinely draws more reader response than any other media (e.g. magazines and newsletters) this blogger has experienced to date! It’s very encouraging to finally see and read one’s peers ‘speaking out’ about business matters that concern them, and about which they are encouraged (i.e. a New Era); as well as being generally supportive of bold, stimulating journalism, supplanting poorly penned, unedited articles, features, and columns in trade publications stagnant during the past couple decades (i.e. a New Voice)

III

How Many MHs in LLCommunities Nationwide?

This question is asked more frequently than you might realize; and second only, to ‘How many landlease (nee manufactured home) communities are there?’

Relative to the number of LLCommunities question, read present issue of MHI’s National Communities Council (‘NCC’) division’s quarterly Community Connections newsletter. The feature article ‘splains’ how we know there’re 50,000+/- such income – producing properties. If not a member of the NCC, phone (703) 558-0678 to request a copy. The upcoming issue of that seminal newsletter will contain a feature titled: ‘To Rent (Homes) or Not to Rent!’ and contains information available nowhere else! For a free reprint, of the ‘# of LLCommunities’ piece, phone the MHIndustry HOTLINE number cited earlier in this blog posting. A reprint of the ‘rent’ article available soon.

Back to estimating the number of homes (manufactured and otherwise) in approximately 50,000 LLCommunities; where 85 percent number fewer than 100 rental homesites apiece, and 15 percent more than 100 sites apiece.

50,000 X .85 = 42,500 X average of maybe 50 sites/per property = subtotal of 2,125,000 rental homesites.

50,000 X .15 = 7,500 X average of maybe 150 sites/per property = subtotal of 1,125,000 rental homesites.

2,125,000 plus 1,125,000 = 3,250,000 rental homesites X 89.2 percent average national physical occupancy among LLCommunities during 2010 = 2,899,000 occupied rental sites, rounded to 3 million.

How’s that square with your thinking? Differing opinions and methods of calculating welcome!

IV.

What’d I Tell You?

Here’s the opening sentence from last week’s blog posting at this website: “Yes, it snuck up on me too; the realization HUD Code manufactured housing has permanently changed during the past decade, to the extent of being market – stiffed; maybe forever, sans new sources of third party chattel (personal property) finance!”

And four days later, this unfortunate, but confirming observation, contained in a communiqué from the Manufactured Housing Association for Regulatory Reform (‘MHARR’):

“…the one HUD program that helps put lower and moderate income consumers (i.e. manufactured home buyers) into new homes they can actually afford – the FHA Title I manufactured housing program – is subject to unreasonable and unnecessary restrictions that effectively limit it to only one financing provider and a minimal number of loans (1,834 during fiscal year 2010).”

What to do about this serious matter? Besides joining forces, as direct, dues – paying of MHI and MHARR (manufacturers only), to seek legislative solutions at the federal level, LLCommunity owners/operators are truly ‘the only game in town’, by dint of their ability to self finance chattel mortgages, via ‘captive finance’ or ‘buy here – pay here’ methodologies, new and resale homes they market and sell on – site at their properties. If YOU’re late coming to this ‘dance’, and want to learn the ‘ins & outs’ of property owner self – finance, make it a point to be in Albany, New York, on 29 & 30 March, when the New York Housing Association hosts Super Symposium II. Frankly, it’s the best lineup of manufactured housing (finance) and landlease community presenters I’ve seen in years! For information, phone (518) 867-3242 or visit the website nyhousing.org Sincerely hope to see you there!

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

COMING! A New Era & A New Voice for Manufactured Housing

Little did we realize 2011 will usher out an old era and old way of apprising!

I.

Yes, it snuck up on me too; the realization HUD Code manufactured housing has permanently changed during the past decade, to the extent of being market – stiffed; maybe forever, sans new sources of third party chattel (personal property) finance! Meanwhile, the other half this ‘double dual industry’ (i.e. manufacturing/distribution & commercial property development/management), its’ complementary investment real estate asset class, a.k.a. landlease (nee manufactured home) communities, has ‘moved on’, leaving those housing manufacturers behind, who don’t understand they must build Community Series Homes (‘CSH’) to survive! All this however, is but half the story unfolding in 2011, leading to ‘The End of One Era, The Beginning of Another!’

Other half the change? Well, especially for landlease community owners/operators (‘LLCommunities’), there’s a sea change a – coming, regarding big versus small owner/operator advocacy; operating data collection, analysis & distribution; print & online communications; even peer networking & deal – making. How so? That’s what’ll be reintroduced, during months ahead, as the ‘new voice for manufactured housing’. It was birthed, more than a decade ago in a print trade publication, but has lain dormant, till the timing was, and now nearly is, right – to help rejuvenate a moribund manufactured housing industry, and simultaneously encourage and promote the growing LLCommunity renascence! As they say in radio talk, ‘Stay tuned here to learn more!’

II.

Sustainability? It’s difficult to pick up a housing or realty trade publication, even a metropolitan newspaper these days, and not find some direct or passing mention of ‘sustainability this’ or ‘sustainability that’. A recent posturing, by HUD Secretary Shaun Donovan to Kenneth Harney at the Urban Land Institute (‘ULI’), was expressed thusly: ‘Embrace Sustainability, If You Want Federal Money’, got me to thinking….

So, just what is sustainability, in the single and multifamily housing context? I asked the folk at ULI for a definition/description, and this is what I learned: NOTHING. My email requests, as a realty trade journalist (Even stated my National Association of Real Estate Editors credentials!), have gone unanswered for nearly a week. Go figure.
So, ‘What say YOU?’ As a raw land developer or LLCommunity owner/operator, do YOU have a dog in this hunt for increased market penetration, via sustainability, relative to manufactured housing and or our unique income – producing property type? Your peers would like to know and read your view(s), via this blog site, regarding what’s either a contemporary ‘cutting edge concept,’ or simply ‘another temporary whimsy’.

III.

In search of the True Lease! In early January 2011, along with 40+/- fellow members of the IMHA/RVIC (Indiana’s state MHAssociation), I attended an afternoon panel discussion ‘splaining’ that state’s interpretation/implementation, to date, of the federal S.A.F.E. Act (Safe And Fair Enforcement of Mortgage Licensure Laws). One panelist, an attorney, stated a ‘true lease’ does not come under the purview of said act. Unfortunately, at the time, neither a definition or description of True Lease was provided, in any fashion. Since then, repeated requests for clarification have gone pretty much unanswered.

So, the challenge to YOU, loyal blog flogger (reader), is to share your knowledge or opinion of what a True Lease is!

Meanwhile, here’s one opinion. Given a property – owned manufactured home on a rental homesite in a landlease (nee manufactured home) community, and assuming said home & site rental rates in sync with other rental housing alternatives in the same local housing market (How to calculate such rates is the subject of a future blog….), lease said home & homesite for one payment (or two separate payments) per month for an agreed upon term (e.g. one year, more or less). Personally, I prefer weekly collection of home rent in LLCommunity settings….

In any event, and only at the end of the lease term, offer lessee (tenant of the home) the opportunity to extend said lease(s) for another term; OR, at that time make an agreed upon lump sum payment to the home owner (i.e. property owner) in exchange for title to the home leased to date. Assume no effect on the ground lease. If there’s no prior mention or agreement between the parties as to this relationship being a ‘lease to own’ or ‘rent to own’ or ‘lease with option to purchase’ at the front end, or during the term of the lease, might this not be a True Lease? Once again; what say YOU?

Of course I realize this is a legal issue that indeed might vary from jurisdiction to jurisdiction. But at this point, we’re talking concept, and your input is sought.

IV.

Did YOU know?

• ‘Joe McAdams Steps Down as President of Equity LifeStyle’; so reads a headline in the February 2011 edition of Woodall’s Campground Management. The article goes on to say: “Thomas Heneghan, ELS CEO, re – assume(s) role of president of the company. Following executive officers now report to Heneghan: Michael Berman, executive VP & CFO; Ellen Kelleher, esquire, executive VP, property management; Roger Maynard, executive VP, asset management; Marguerite Nader, executive VP, new business development; and Seth Rosenberg, senior VP of sales and marketing.” Page # 5. Now you know who’s on first, second…

• 13th annual National Registry of Realty Lenders/Brokers Specializing in LLCommunity Acquisition & Refinance Mortgages. This highly popular registry is the third in a series of 12 Signature Series Resource Documents, researched and published by PMN Publishing. The initial copies of the 13th Registry will be distributed as a lagniappe in the March 2011 issue of the Allen Letter professional journal. Also, for the first time in 13 years, a list of chattel (personal property) lenders will be included for contact purposes! So, if not already an Allen Letter subscriber, either sign – up for $134.95/year (12 monthly issues) OR, pay $250.00 and receive said subscription PLUS a copy of the recently – released 22nd annual ALLEN REPORT (a.k.a. ‘Who’s Who Among LLCommunity Portfolio Owners/operators in North America!’)! NOTE: Less than 50 copies of the ALLEN REPORT remain. Once this stock is gone, there are no plans to reprint! Phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633.4764 to subscribe to the Allen Letter professional journal AND buy your copy of the ALLEN REPORT. Also phone (317) 346-7156.

***

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

Best Salmagundi* of MHIndustry ‘Insider Information’ You’ll Ever Read!

• Salmagundi is ‘a little of this, a little of that; a mixture of something, information’

S.A.F.E. Act ‘fear factor’; portfolio ‘player’ vs. small owner/operator; one liner responses – and more, to last week’s blog about MHAssociations; ‘Where’re Greg O’Berry, Bob Blatz & Greg Harmon? And, where will YOU be March 14 & 15, 22nd, 29 & 30, 2011?

I.

“Many (landlease, nee manufactured home, community) owners are misusing a limited amount of uncertainty in the S.A.F.E. Act final rules, as an excuse to ‘do nothing’ (to ensure their self – financed home loans are in compliance). Their ‘fear factor’ is high, and the tragedy is, there’s no reason for it, except among the smallest of operators.”

“The problem is, they (LLCommunity owners) ‘don’t know enough about what they don’t know’, and hence are so paralyzed, they don’t reach out to get the knowledge they need to make the ‘fear factor’ go away! There’s also fear, among some large portfolio folk, their corporate structure needs changing, meaning someone with the knowledge and experience to set up and run a successful finance arm, would become as important and valuable to the organization, as the traditional CEO and COO ‘golden boy’ positions. And the pay for these financial execs could also be a problem. In an organization doing 40 loans a month, the top finance job is going to be a six figure position.”

“All his doesn’t change the fact that every LLCommunity, capable of filling even a dozen rental homesites a year with self – finance homes, cannot afford not to be doing it the right way! This widespread ‘wait & see’ attitude is a spurious one indeed, simply masking a lack of will and foresight. There’ll always be changes in lending law, and it’s shortsighted not to expect change, and to plan accordingly.” Kenneth Rishel, writing in an email response to an earlier blog posting, by the author, relative to the S.A.F.E. Act. (Lightly edited. GFA)

II.

The following story was prompted by an earlier blog posting, cautioning LLCommunity owners/operators not to be too aggressive with rental homesite rent increases, as more and more properties have been going back to lenders, following large rent increases that have resulted in severely declining physical and economic occupancy.

“I can say first hand, a (LLCommunity) REIT is out of control on their rent increases and fees. I bought a home in a ________- owned property and left it there vs. moving it to my park, since it seemed like a good investment. WRONG. Not only did the market drop shortly after my purchase, but my lot rent shot up from $387 to $427 in three years!”

“What bothered me more, is the fact they charged a flat fee for (natural) gas and water, even when my home sat empty month after month. Their rules and regs state they ‘only charge for consumption’, yet they continued to charge these fees (approximately $37/month), which I continued to ignore. Eventually they evicted me for back lot rent. Frankly, the lot rent was current, but I was behind with the flat fees. Rather than lose the home, I chose to donate it to the St. Vincent de Paul Society. Even that was a struggle to get them to approve, even after I paid all their fees, just to keep the home there.”

Question to this writer: Did they know you were a fellow LLCommunity owner?

Answer: “Absolutely. They knew I was a LLCommunity owner, which was why they were anxious to get me to leave once I started asking too many questions.”

III

One liners, a.k.a. ‘zingers’, have long been the staple of stand up comedians. And the following one liners, emailed in response to last week’s posting title: ‘Why I Belong!, but am frustrated with most MHAssociations’, would be humorous if they weren’t so darn serious!

“You hit the nail very squarely, sir, on the associations.” N

“This won’t make you many friends in MHAssociation (mis) management circles. LOL.” H

“Concerning MHAssociations in your latest blog – it’s time someone threw the skunk out on the table and talked about this.” R

“George, all it takes is the whisper of RENT CONTROL in the (state) legislature, to activate interest in industry political action, which is the ground roots of association membership.” P

There was but one lengthy, thoughtful reply, penned by James Ayotte, a veteran association exec in OH, New England, with MHI/NCC for awhile, and now exec with the Florida Manufactured Housing Association.

“You raise several relevant points. It has become much more difficult to do the work of the association in face of falling revenues. We’ve all been forced to reduce expenses, eliminate non – core services, and focus our limited resources on what’s important – protecting and promoting the MHIndustry’s interests. These decisions have required leadership from staff and volunteer leaders.

“…our mission is clear – to increase the sales of manufactured housing and residency in landlease communities. This mission is evident in everything we do, from ongoing meetings with our customers (e.g. Federation of Manufactured Home Owners of Florida), to our government affairs and legal agenda to our consume education and marketing activities. FMHA’s job is to educate the public about the value and potential of manufactured housing and LLCommunity living, to ensure communities remain open and profitable, and consumers have the ability to buy a manufactured home and (buy/rent) homesites like any other type of single – family housing.

“We don’t lack vision (‘forward focus’) or leadership here in Florida, we lack the resources necessary to accomplish everything we want to do as quickly as we want to do them. These past few years have been sometimes difficult, sometimes gut – wrenching, but we have never lost sight of our mission!

“I am excited about the future of the manufactured housing industry in Florida, and the role we play to position the industry for growth. According to the AARP, 8,000 people a day are turning age 65, and there is a growing wave of first – time homebuyers. These population trends support expansion of the industry. How well we capitalize on these opportunities will depend on the effectiveness of FMHA and industry members marketing efforts and education.

Jim continues his reply for another three paragraphs, and ends thusly: “These are issues I think about everyday, and I’m sure my colleagues do the same. Together, we can meet the industry’s challenges head – on and prevail! Separately, we will languish and waste our time talking about what the industry could have been.” Previous paragraphs lightly edited. GFA

Know what? That was the sole response received from MHAssociation execs nationwide, even after making a special effort to send this blog posting their way! Know what I think? Board chairmen should consider placing last week and this week’s blog in front of their salaried association executive, and ask them to pen a response based on their state’s present day experience, as Jim has done here. Then, distribute copies to all the association’s board members, to stimulate discussion, and maybe stimulate some ‘forward focus’, as well as renewed member recruiting. It’s worth thinking about…

By the way, several blog ‘floggers’ (faithful readers) reminded me of other irksome practices and trends characteristic of some MHAssociations, over time:

• Faux takeover of a state association by one or another membership segment. On one hand, this is easy to observe in states where landlord tenant legislation is a near perennial bugaboo. Count the number of attorneys who pen articles in the MHAssociation’s newsletter; more tellingly, what percentage of articles are penned by legal counsel? 100% in some cases! And rent control doesn’t have to be present; as some attorneys wind up specializing in LLCommunity law and are better able to write than most. And of course, there’s the historic leaning of an association, towards manufacturing & retailing (of homes) vs. the real estate investment side of the house – resulting in ‘two associations’ in some states, e.g. WA, OR, CA, AZ, and others.

• Want to be a ‘player’ on the national scene, but maybe avoid paying dues to become a direct member of the national advocacy body? Position yourself to become a state MHAssociation’s Certified Representative to that national group. Frankly, it a responsible job when ‘done right’; meaning attending as many committee meetings as possible, then reporting proceedings back to one’s state association board. Too many times however, assignment as a Certified Representative is sought and treated as a ‘perc’ by past board chairmen, who may or may not fulfill either responsibility. What’s wrong with sending a young, aggressive, even new association member, to learn what’s going on at the national scene, perhaps developing a passion for our industry and or asset class? As is oft said, and this certainly needs to be heeded by the MHIndustry, ‘Our future is our youth!’

To end this review of association peccadilloes on a positive note, join me in welcoming Lisa Brechtel as the new MHI executive hired to lead the National Communities Council division of the institute!

IV.

OK, where’s Greg O’Berry (former president and COO of Hometown America); Bob Blatz (‘Mr. American Land Lease’); and, Greg Harmon, formerly a regional property manager with Green Courte Partners?

Well, Greg O’Berry resurfaced recently, at Onyx Real Estate, LLC., in Chicago, having just taken on an apartment consultancy project for the firm.

And Bob Blatz recently relocated, and went to work as an executive, with a self – storage firm headquartered in Valley Forge, PA.

Greg Harmon, MHM & BDM? He’s discovered, and now enjoys the ‘challenge and rewards’ of the entrepreneur life, as head of GHP, LLC, working throughout the Pacific Northwest.

Are there other former high profile execs you’ve lost track of but would like to know there whereabouts these days? Like Scott Jackson, Stephen Wheeler, Craig White, Nancy Huppert, Kathleen Lyden, Chrissy Jackson, and Gail Cardwell. Just let me know…

V.

Where will you be during the MHIndustry & LLCommunity asset class ‘triple play’ during March 2011?

14 & 15 March. Manufactured Housing Institute’s Spring (Winter?) meeting in Washington, DC. If you own/operate LLCommunities, you owe it to yourself to be present for the National Communities Council (‘NCC’) meeting on 14 March, from 2:30 – 4PM. For information, phone Thayer Long @ (703) 558-0678. I’ll be there for sure, after traveling via Cape May, New Jersey & the Lewes Ferry over to Delaware. Gotta have some of that fresh seafood cooked up by my brother!

22 March. The ‘Manufactured Housing Industry Innovation Summit’ in Portland, ME. Boy, this is one event I don’t want to miss, but probably will. Can’t be everywhere. But, if you live and work anywhere in New England, then you should phone Karen Brown – Mohr @ (207) 761-4221 for program details. Tell her ‘George sent me!’

29 & 30 March. Told you about this gem of a seminar program in last week’s blog posting. Nancy Geer has put together a ‘show stopper of an agenda’ for LLCommunity owners/operators! Call her @ (518) 867-3242 for details. Registrants are already signing – up from throughout the U.S. You don’t want to miss this unique opportunity to learn more about on – site, self – financing of new and resale homes, how to calculate ‘affordable’ & ‘risky’ price points on new and resale homes, within and outside LLCommunities, and much much more!

VI.

Are you a subscriber to the Allen Letter professional journal? If not, and you own one or more LLCommunities, you should be! It’s the ONLY trade publication in the U.S. & Canada that is focused on the information and networking needs of LLCommunity owner/operators. And, for a limited time, PMN Publishing is making the following ‘deal’ available to readers of this weekly blog:

For $250.00, subscribe to the Allen Letter professional journal, and, receive a copy of the recently released 50+ page, 22nd annual ALLEN REPORT. That’s right, a $334.95 savings! How so? The newsletter subscription is $134.95, and ALLEN REPORT retails for $450.00. YOU get both, for a limited period of time for only $250.00. Go figure! Better yet, pick up the phone and order today, via the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

***

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

Best Salmagundi* of MHIndustry ‘Insider Information’ You’ll Ever Read!

• Salmagundi is ‘a little of this, a little of that; a mixture of something, information’

S.A.F.E. Act ‘fear factor’; portfolio ‘player’ vs. small owner/operator; one liner responses – and more, to last week’s blog about MHAssociations; ‘Where’re Greg O’Berry, Bob Blatz & Greg Harmon? And, where will YOU be March 14 & 15, 22nd, 29 & 30, 2011?

I.

“Many (landlease, nee manufactured home, community) owners are misusing a limited amount of uncertainty in the S.A.F.E. Act final rules, as an excuse to ‘do nothing’ (to ensure their self – financed home loans are in compliance). Their ‘fear factor’ is high, and the tragedy is, there’s no reason for it, except among the smallest of operators.”

“The problem is, they (LLCommunity owners) ‘don’t know enough about what they don’t know’, and hence are so paralyzed, they don’t reach out to get the knowledge they need to make the ‘fear factor’ go away! There’s also fear, among some large portfolio folk, their corporate structure needs changing, meaning someone with the knowledge and experience to set up and run a successful finance arm, would become as important and valuable to the organization, as the traditional CEO and COO ‘golden boy’ positions. And the pay for these financial execs could also be a problem. In an organization doing 40 loans a month, the top finance job is going to be a six figure position.”

“All his doesn’t change the fact that every LLCommunity, capable of filling even a dozen rental homesites a year with self – finance homes, cannot afford not to be doing it the right way! This widespread ‘wait & see’ attitude is a spurious one indeed, simply masking a lack of will and foresight. There’ll always be changes in lending law, and it’s shortsighted not to expect change, and to plan accordingly.” Kenneth Rishel, writing in an email response to an earlier blog posting, by the author, relative to the S.A.F.E. Act. (Lightly edited. GFA)

II.

The following story was prompted by an earlier blog posting, cautioning LLCommunity owners/operators not to be too aggressive with rental homesite rent increases, as more and more properties have been going back to lenders, following large rent increases that have resulted in severely declining physical and economic occupancy.

“I can say first hand, a (LLCommunity) REIT is out of control on their rent increases and fees. I bought a home in a ________- owned property and left it there vs. moving it to my park, since it seemed like a good investment. WRONG. Not only did the market drop shortly after my purchase, but my lot rent shot up from $387 to $427 in three years!”

“What bothered me more, is the fact they charged a flat fee for (natural) gas and water, even when my home sat empty month after month. Their rules and regs state they ‘only charge for consumption’, yet they continued to charge these fees (approximately $37/month), which I continued to ignore. Eventually they evicted me for back lot rent. Frankly, the lot rent was current, but I was behind with the flat fees. Rather than lose the home, I chose to donate it to the St. Vincent de Paul Society. Even that was a struggle to get them to approve, even after I paid all their fees, just to keep the home there.”

Question to this writer: Did they know you were a fellow LLCommunity owner?

Answer: “Absolutely. They knew I was a LLCommunity owner, which was why they were anxious to get me to leave once I started asking too many questions.”

III

One liners, a.k.a. ‘zingers’, have long been the staple of stand up comedians. And the following one liners, emailed in response to last week’s posting title: ‘Why I Belong!, but am frustrated with most MHAssociations’, would be humorous if they weren’t so darn serious!

“You hit the nail very squarely, sir, on the associations.” N

“This won’t make you many friends in MHAssociation (mis) management circles. LOL.” H

“Concerning MHAssociations in your latest blog – it’s time someone threw the skunk out on the table and talked about this.” R

“George, all it takes is the whisper of RENT CONTROL in the (state) legislature, to activate interest in industry political action, which is the ground roots of association membership.” P

There was but one lengthy, thoughtful reply, penned by James Ayotte, a veteran association exec in OH, New England, with MHI/NCC for awhile, and now exec with the Florida Manufactured Housing Association.

“You raise several relevant points. It has become much more difficult to do the work of the association in face of falling revenues. We’ve all been forced to reduce expenses, eliminate non – core services, and focus our limited resources on what’s important – protecting and promoting the MHIndustry’s interests. These decisions have required leadership from staff and volunteer leaders.

“…our mission is clear – to increase the sales of manufactured housing and residency in landlease communities. This mission is evident in everything we do, from ongoing meetings with our customers (e.g. Federation of Manufactured Home Owners of Florida), to our government affairs and legal agenda to our consume education and marketing activities. FMHA’s job is to educate the public about the value and potential of manufactured housing and LLCommunity living, to ensure communities remain open and profitable, and consumers have the ability to buy a manufactured home and (buy/rent) homesites like any other type of single – family housing.

“We don’t lack vision (‘forward focus’) or leadership here in Florida, we lack the resources necessary to accomplish everything we want to do as quickly as we want to do them. These past few years have been sometimes difficult, sometimes gut – wrenching, but we have never lost sight of our mission!

“I am excited about the future of the manufactured housing industry in Florida, and the role we play to position the industry for growth. According to the AARP, 8,000 people a day are turning age 65, and there is a growing wave of first – time homebuyers. These population trends support expansion of the industry. How well we capitalize on these opportunities will depend on the effectiveness of FMHA and industry members marketing efforts and education.

Jim continues his reply for another three paragraphs, and ends thusly: “These are issues I think about everyday, and I’m sure my colleagues do the same. Together, we can meet the industry’s challenges head – on and prevail! Separately, we will languish and waste our time talking about what the industry could have been.” Previous paragraphs lightly edited. GFA

Know what? That was the sole response received from MHAssociation execs nationwide, even after making a special effort to send this blog posting their way! Know what I think? Board chairmen should consider placing last week and this week’s blog in front of their salaried association executive, and ask them to pen a response based on their state’s present day experience, as Jim has done here. Then, distribute copies to all the association’s board members, to stimulate discussion, and maybe stimulate some ‘forward focus’, as well as renewed member recruiting. It’s worth thinking about…

By the way, several blog ‘floggers’ (faithful readers) reminded me of other irksome practices and trends characteristic of some MHAssociations, over time:

• Faux takeover of a state association by one or another membership segment. On one hand, this is easy to observe in states where landlord tenant legislation is a near perennial bugaboo. Count the number of attorneys who pen articles in the MHAssociation’s newsletter; more tellingly, what percentage of articles are penned by legal counsel? 100% in some cases! And rent control doesn’t have to be present; as some attorneys wind up specializing in LLCommunity law and are better able to write than most. And of course, there’s the historic leaning of an association, towards manufacturing & retailing (of homes) vs. the real estate investment side of the house – resulting in ‘two associations’ in some states, e.g. WA, OR, CA, AZ, and others.

• Want to be a ‘player’ on the national scene, but maybe avoid paying dues to become a direct member of the national advocacy body? Position yourself to become a state MHAssociation’s Certified Representative to that national group. Frankly, it a responsible job when ‘done right’; meaning attending as many committee meetings as possible, then reporting proceedings back to one’s state association board. Too many times however, assignment as a Certified Representative is sought and treated as a ‘perc’ by past board chairmen, who may or may not fulfill either responsibility. What’s wrong with sending a young, aggressive, even new association member, to learn what’s going on at the national scene, perhaps developing a passion for our industry and or asset class? As is oft said, and this certainly needs to be heeded by the MHIndustry, ‘Our future is our youth!’

To end this review of association peccadilloes on a positive note, join me in welcoming Lisa Brechtel as the new MHI executive hired to lead the National Communities Council division of the institute!

IV.

OK, where’s Greg O’Berry (former president and COO of Hometown America); Bob Blatz (‘Mr. American Land Lease’); and, Greg Harmon, formerly a regional property manager with Green Courte Partners?

Well, Greg O’Berry resurfaced recently, at Onyx Real Estate, LLC., in Chicago, having just taken on an apartment consultancy project for the firm.

And Bob Blatz recently relocated, and went to work as an executive, with a self – storage firm headquartered in Valley Forge, PA.

Greg Harmon, MHM & BDM? He’s discovered, and now enjoys the ‘challenge and rewards’ of the entrepreneur life, as head of GHP, LLC, working throughout the Pacific Northwest.

Are there other former high profile execs you’ve lost track of but would like to know there whereabouts these days? Like Scott Jackson, Stephen Wheeler, Craig White, Nancy Huppert, Kathleen Lyden, Chrissy Jackson, and Gail Cardwell. Just let me know…

V.

Where will you be during the MHIndustry & LLCommunity asset class ‘triple play’ during March 2011?

14 & 15 March. Manufactured Housing Institute’s Spring (Winter?) meeting in Washington, DC. If you own/operate LLCommunities, you owe it to yourself to be present for the National Communities Council (‘NCC’) meeting on 14 March, from 2:30 – 4PM. For information, phone Thayer Long @ (703) 558-0678. I’ll be there for sure, after traveling via Cape May, New Jersey & the Lewes Ferry over to Delaware. Gotta have some of that fresh seafood cooked up by my brother!

22 March. The ‘Manufactured Housing Industry Innovation Summit’ in Portland, ME. Boy, this is one event I don’t want to miss, but probably will. Can’t be everywhere. But, if you live and work anywhere in New England, then you should phone Karen Brown – Mohr @ (207) 761-4221 for program details. Tell her ‘George sent me!’

29 & 30 March. Told you about this gem of a seminar program in last week’s blog posting. Nancy Geer has put together a ‘show stopper of an agenda’ for LLCommunity owners/operators! Call her @ (518) 867-3242 for details. Registrants are already signing – up from throughout the U.S. You don’t want to miss this unique opportunity to learn more about on – site, self – financing of new and resale homes, how to calculate ‘affordable’ & ‘risky’ price points on new and resale homes, within and outside LLCommunities, and much much more!

VI.

Are you a subscriber to the Allen Letter professional journal? If not, and you own one or more LLCommunities, you should be! It’s the ONLY trade publication in the U.S. & Canada that is focused on the information and networking needs of LLCommunity owner/operators. And, for a limited time, PMN Publishing is making the following ‘deal’ available to readers of this weekly blog:

For $250.00, subscribe to the Allen Letter professional journal, and, receive a copy of the recently released 50+ page, 22nd annual ALLEN REPORT. That’s right, a $334.95 savings! How so? The newsletter subscription is $134.95, and ALLEN REPORT retails for $450.00. YOU get both, for a limited period of time for only $250.00. Go figure! Better yet, pick up the phone and order today, via the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

***

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

‘Why I Belong’, but am frustrated with most MHAssociations!

&

Own/operate LLCommunities? Time to Decide What You Need!

2011 promises to be a year of survival for some & end of the road for others.
Know this; your fate is in, good but not complete measure, your hands – so make the very most of every opportunity and challenge that comes you way!

I.

A Decade ago I penned an article titled ‘Why I belong!’, for a now defunct MHIndustry print trade publication. It was reprinted many times over, and frequently distributed by state manufactured housing trade associations (‘MHAssociations) as an aid to help recruit new dues – paying members! It’s still inventoried at PMN Publishing, but is rarely requested these days, underscoring the tripartite theme of the following paragraphs.

Our firm is a 20+ year member of two Midwest MHAssociations, and a direct, dues – paying charter member of the Manufactured Housing Institute’s (‘MHI’) National Communities Council (‘NCC’) division. Until recently, we were a full (charter) member of the Urban Land Institute’s (‘ULI’) Manufactured Housing Communities Council (‘MHCC’) – but that’s another story for another time. The Point? As a former elected board member of those Midwest MHAssociations, and present board member of the NCC, I’ve observed ‘the workings’ of these bodies, up close and repeatedly over the years, and believe They Are All Lacking At This Time!

Yes, ‘lacking dues revenue’ for sure, but also ‘lacking forward focus’ and ‘lacking leadership’. Let’s take these three shortfalls, in need of obviation, one at a time.

Lack of forward focus. I’ll be the first to admit, ‘Generalizations are as generally wrong as they are generally right’. But with that said, ask yourself: ‘How many of the state or provincial MHAssociations, or even just the one association – you or your firm belong to, is/are indeed focused – let’s say, on planning and effecting aggressive, positive measures ensuring ongoing survival as a viable trade association and advocacy body? Are you satisfied with the answer? If not, maybe YOU need to get involved and become part of a focused solution, rather than continue as part of the ongoing problem(s). With that said,

Lack of dues revenue. Admittedly, there’re far fewer HUD Code home manufacturers and MHRetailers to solicit as dues – paying members of state and provincial MHAssociations. But guess what? There’re just as many, if not a few more, landlease (nee manufactured home) communities TODAY than there were a DECADE AGO! And yes, consolidation of this type income – producing property type, into one or another of 500+/- LLCommunity portfolios (averaging 22 properties apiece, per the 22nd annual ALLEN REPORT) existent across the U.S. and Canada, has cannibalized this membership category in almost every state and province. BUT, what has your MHAssociation done to 1) aggressively recruit these portfolio owners/operators as dues – paying members, and 2) go ‘on the road’ to visit and recruit heretofore ignored sole proprietor (i.e. Mom & Pop) owners/operators? My guess is, little to no effort whatsoever. How do I know? A year ago, I volunteered to 1) ID all portfolio owners/operators active in a particular state, 2) form a small team of LLCommunity owner/operator members of said association, to 3) visit each of the portfolio ‘player’ headquarters, to recruit (‘pressure’) them, one – on – one to ‘join’! My offer was ignored, and the association continues to lose members and dues in this minimally tapped category. To this end, it’s my contention, every association executive, in the company of at least one board member, should spend one day each week ‘on the road’ aggressively recruiting the small – to – midsized LLCommunity owners/operators, as well as suppliers, service firms, lenders, and the like.

Lest you think our national trade and advocacy bodies are immune from constructive criticism in this ‘lack of dues revenue’ effort, you’re wrong. Similar trends and circumstances apply on the national level as on the state level. But when a suggestion was made recently, that the new NCC executive, as part of their compensation package, be formally challenged to match their salary with ‘new dues revenue’ within 12 months after being hired, the incentivization idea was dismissed as being inappropriate for association executives. Really? Why? Furthermore; I don’t know ‘bout you, but I tire of hearing one national advocacy body constantly cry ‘poor boy’, as they continue to restrict membership to just HUD Code manufacturers.

Lack of leadership. This category riles me above the other two. Perhaps there’re a few MHAssociations, somewhere in the U.S. and Canada, with strict and enforced term limits for elected board members. If so, they’re few and far between. Sure, respond to this blog and let me know! No response? Then I’ll assume, sad to say, I’ve got it right.

For the moment however, assume most elected boards have done a credible job recruiting, hiring and compensating their present MHAssociation exec, the preceding lack of focus and lack of dues revenue comments notwithstanding – since both are functions of board member ‘direction’, and dare I say it, ‘leadership’. Moving right along; few things are more frustrating to business stakeholder members, than to see MHAssociation board seats perennially occupied by protective ‘friends’ of the association exec (Beware the Golden Parachute when an exec leaves, for cause or otherwise…We’ve seen that travesty firsthand.); individuals (usually salaried employees) who consider board meetings personal ‘percs’ away from their day job; and, some old ‘warhorses’ who’ve convinced everyone the association will wither and die without their hallowed presence, year after year after year. And I simply don’t buy the excuse, ‘No one else will step forward and serve.’ That’s just an excuse for not really trying to recruit, and symptomatic of the very environment just described.

The remedy? A healthy mix of ‘fresh blood’ coming onto MHAssociation boards every year, along side capable, experienced, motivated board members who, hopefully, are businessmen and women with bona fide ‘skin in the game’ of manufactured housing and LLCommunity ownership/operations. And be careful about how many years an exec is permitted to stay in place. Is their present salary now double what it’d cost the association to hire a new and anxious – to – please and learn executive? I know one New England association that was on its’ deathbed a couple years ago, but is now growing by leaps and bounds, thanks to a new, ‘willing to travel and recruit new members’ executive. When was the last time your state’s exec was out ‘on the road’ doing likewise? Ask.

Think I exaggerate? Not at all. Ending this first blog segment with two recent accounts; the first a response to an earlier post on this blog site; the second, published last month in the Chattel Finance Newsletter:

“I find is exacerbating the very organizations (i.e. ‘trade associations’) we tout as our representatives – state or national – do NOTHING to change our desperate straights. They are like five fingers moving without concert, to try and make a fist. We have no chance of surviving as an industry, without us getting together!” N

“I don’t belong and likely never will. From what I have seen, over the years, most seem to be a big ego trip for the board members and a big paycheck for the guys who run them. Once in a while, they get worried about some new law somebody wants, because of what one of the members did to somebody else; but other than that, they mostly meet and talk. In my state, there has only been one guy running the association that didn’t think he was smarter and better than all the park owners. I don’t know much about the national association, but all they seem to do is to meet in expensive places, to have a party, and pretend they are actually doing something worth doing.” Anonymous

II.

The time has come for YOU to Decide What You Need. Talking mostly to landlease (nee manufactured home) community owners/operators here, portfolio folk and otherwise. No big introduction, since most reading this weekly blog, are aware of the Request for Proposals we published in the November 2010 issue of the Allen Letter professional journal, to acquire work products long associated with GFA Management, Inc., dba PMN Publishing. To date, there’s one formal Offer to Purchase in place; and, face – to – face negotiations with one party begin this week; and with another, the following week. All that’s being asked here, is for YOU to read down through the list of 28 work products; then ask yourself – ‘Which items – if any, are helpful, even critical, resources relative to my ownership and operation of one or more LLCommunities?’ At the end of this blog segment, I’ll suggest what you can do to (maybe) ensure continuation of the resources you need…

Annual ALLEN REPORT or ‘AR’, a.k.a. ‘Who’s Who Among Portfolio Owners/operators of Landlease Communities Throughout North America!’ The 50+ page, 22nd annual AR released in early January 2011. Asset class’ statistical compendium

Exclusive & CONFIDENTIAL, 25 year computerized data base, comprised of names & addresses of 500+/- LLCommunity portfolio owners/operators in U.S. & Canada. Regular direct mail access by those acquiring/marketing such properties; new products/services

The Allen Letter professional journal; a 21 year, monthly print, subscriber – supported periodical penned for the LLCommunity owner/operator audience! Vehicle for a dozen Signature Series Resource Documents (‘SSRD’), identified later in this work product list.

International Networking Roundtable or ‘INR’. The 20th INR is scheduled for 14 – 16 September 2011. It’s the LLCommunity asset class’ premier educational, interpersonal networking, and deal – making event. Platform for most initiatives during past 20 years!

the Allen CONFIDENTIAL! business newsletter. Subscriber – supported, monthly print publication communicating sensitive, strategic, advance information to MHIndustry & LLCommunity executives alike, 30 – 60 days before be published elsewhere, if then!

Manufactured Housing Manager or ‘MHM’ professional property management training and certification program for on – site, regional & executive property managers, and owners of LLCommunities. Nearly 1,000 MHMs to date! Classroom or correspondence.

community-investor.com website…’How you got here today!’ Superb online resource for books, reprints, PM forms, educational programs, newsletters & more (e.g. Mystery Shopping & MAP planning/execution). Also site of industry& asset class’ weekly blog

Weekly blog posting! The primary B2B (business – to – business) MHIndustry & LLCommunity online news and op/ed source for hundreds of corporate executives and LLCommunity owners/operators, responsible for profitability of business enterprises.

FOCUS Group meetings of LLCommunity owners/operators are convened as interest and needs require. Confidential small group interaction opportunities oft hosted on – site in LLCommunities. GFA/PMN compensated as meeting planner, facilitator and reporter.

National State of the Asset Class (‘NSAC’) caucuses for MHIndustry executives and LLCommunity owners/operators. Two to date: 2/27/08 identified Five Action Areas of LLCommunity concern; 2/27/09, dialogue per new home design for on – site marketing

Periodic ALLEN SURVEYS (VI to date); prepared with assistance from Laurence Allen, MAI. Researched & published results regarding LLCommunity Operating Expense Ratios (‘OER’s), & income capitalization rates (‘cap rates’) per ABClassification System

Stock Inventory of at least 26 copyrighted standard forms tailored to the LLCommunity asset class, e.g. Market Survey, Standard Shopping Report, Income & Expense Cash Flow Analysis Worksheet, ‘Ah Ha! & Uh Oh!’ housing price point worksheet, and more!

MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Primary point of initial inquiry for matters pertaining to LLCommunity operations nationwide, including Canada! E.g. access to HUD Code Business Development Managers & Community Series Homes…

Stock inventory of books includes: Development, Marketing & Operation of Manufactured Home Communities; How to Find, Buy, Manage & Sell a Manufactured Home Community; Landlease Community Management, Manufactured Housing $ Primer

Stock inventory of reprints, both hard copy and PDFs, via community-investor.com. Dozens of copyrighted articles cover virtually every aspect of manufactured housing, and LLCommunity ownership and property management. More than 50 titles.

Chronological History of the LLCommunity Real Estate Asset Class, dating back to the 1980s. Includes accounts of many of the resources on this list. ‘History’ is updated upon revision and publication of each edition of Landlease Community Management.

Library of manufactured housing and LLCommunity asset class related texts, notebooks, binders, etc. Acquisition interest expressed by RV/MH Heritage Foundation’s library, and U.S. Library of Congress. The ‘best location’ for this body of knowledge & history?

SSRD: annual ‘Official State of the MHIndustry & LLCommunity Asset Class’, published in February, includes a comprehensive list of owners/operators’ issues identified during ALLEN REPORT research previous Fall. Only ‘combined’ summary!

SSRD: annual ;National Registry of Real Estate Lenders & Brokers’ specializing in LLCommunity acquisition and refinance real estate – secured mortgages. Narrative identifies prevailing trends, plus list of at least a dozen lenders/brokers with contacts.

SSRD: annual ‘Who Ya Gonna Call in 2011?’ comprehensive list of MHIndustry & LLCommunity freelance consultants. 12th edition to be published in April 2011. Only such ‘specialty skill’ list available anywhere throughout the MHIndustry.

SSRD: annual ‘Directory of MHIndustry & LLCommunity Print & Online Trade Media Resources’. Given the greatly reduced number of print and online trade publications serving the MHIndustry, this is a key working resource facilitating press releases, etc..

SSRD: annual ‘Official Lexicon or Glossary of MHIndustry & LLCommunity Terminology’. Years in the making, this landmark research and resource first published in the Manufactured Housing $ Primer and the 22nd annual ALLEN REPORT.

SSRD: annual ‘Professional Property Management Training & Certification Program Survey’ describes and codifies professional property management in the LLCommunity real estate asset class by dint of the CPM®, ACM® & MHM certification programs.

SSRD: annual, repeatedly updated, ‘Industry Briefing Sheet’. This four page document summarizes HUD Code MHIndustry & LLCommunity benchmark statistics, lists key advocacy and media contacts, including Canadian CSA Z240 & CSA A277-90 info.

SSRD: annual ‘Trade Body Advocacy Directory’ features background and contact information re: MHI/NCC, ULI/MHCC, MHARR, IREM, FBOA, NSAC caucuses, etc..

SSRD: annual ‘Summary of International Networking Roundtable’ proceedings serves as an historical record of this annual event, featuring contact information on all presenters!

SSRD: annual updates to the ‘MHIndustry Paradigm Shifts Timeline’, preserves the essence of HUD Code manufactured housing history & the LLCommunity asset class!

SSRD: annual ‘National State of the Asset Class caucus progress report’ preserves accomplishments of the first two NSAC caucuses, and measures progress relative to the Five Action Areas, Business Development Managers, & Community Series Homes.

So, there you have it, 28 proprietary resources presently in place, and in service to the MHIndustry and LLCommunity asset class! How many, if any, of these specialized resources are important to YOU, and the success with which you manage your business interests? If you’re a direct, dues paying member of any of the national trade and advocacy bodies, you already know ‘who to contact’ relative to your desire to see some or all these work products continue intact – or not. If not presently within that Inner Circle, but wish to make your views and needs better known, contact me via the aforementioned MHIndustry HOTLINE or (317) 346-7156 or email: gfa7156@aol.com

Bottom line? Ideally, ‘all the above’ will wind up being administered and continued by one, two, maybe three, national not for profit trade and or academic bodies, maybe even a ‘for profit’ entity, all committed to HUD Code manufactured housing and the landlease community real estate asst class. Or maybe not. Frankly, much of the future of our unique, income – producing property type and asset class, more so than ever before, is in your hands. If these 28 resources continue, it’ll be in large part, due to your support; if not, well, it’s been an interesting, challenging, rewarding, thirty years of service….

***

George Allen, Realtor®, CPM®Emeritus, MHM Box # 47024
Consultant to the Factory – built Housing Industry & Indpls, IN. 46247

This Weekly Blog Draws Much Traffic; YOUR RESPONSES to…

High Site Rent, an Intellectually Honest Debate, the S.A.F.E. Act & My Sayonara!

(Note. Don’t miss reading the final paragraph of this blog; it contains a Special Deal for purchase of the 50+ page, 22nd annual ALLEN REPORT! Maybe only time offered..)

If anyone told me two years ago, when I started blogging, electronic media would become a rich and ready forum for discourse among friends and associates throughout the MHIndustry and landlease community asset class, I wouldn’t have believed them. But that’s what has occurred. I pen this 125th consecutive weekly blog, knowing we’ll receive a dozen or so thoughtful and oft provocative responses by this time next week. And that number doesn’t include plenteous email messages that arrive daily, addressing a wide variety of industry/asset class matters. Yes, the community-investor.com website has become the intellectual and communication oasis for manufactured housing executives and landlease community owners/operators nationwide. Here’s a sampling of typical daily and weekly commentary…

I.

The ‘No NSAC – III caucus in February’ announcement attracted a flood of response – but of a totally unexpected nature! I’d been hearing, for some time, peer angst regarding ‘too high homesite rents’, at some or many properties owned/operated by mega – sized LLCommunity portfolio owners/operators. Here’s a sampling of those blog responses:

• “As far as the secondary focus on high rent (at postponed NSAC – III caucus) is concerned, it may just end up (being) a bitch session. However, I would like to hear from the offenders: ______________, ______________, and ___________, as to what their strategy is? Specifically, in the _________________market, their LLCommunities are emptying – out, yet they’ve just raised the rent another $25 per month! They don’t take care of them (the properties) anymore; (homeowner) residents have no equity; they (the owners/operators) pay extravagant incentives to move people in; and then, residents can’t afford to keep up their homes and pay the high rent. I simply don’t see the strategy, if there is one.” D (edited. GFA)

• Responding to the two reasons I gave for not having NSAC – III (i.e. “…largest portfolio ‘players’ have programs in place and eschew distraction” & “Thanks to the federal S.A.F.E. Act and variegated state implementation thereof, most everyone else favors a ‘Wait & See’ attitude, before doing anything.”), one blog flogger (reader) opined: “Don’t believe the reasons you’ve been given! The MHIndustry is paralyzed by fear of anyone learning what steps have been contemplated and taken, to keep their present jobs – at the expense of the balance sheet; and, contrary to any reasonable understanding of the true cost of ‘buying occupancy’ in marketplaces where new homes cannot be sold, except at great loss…” P (edited. GFA) Whew! Do ya think maybe ‘site rent is too high in those marketplaces’?

Keep the dialogue going! Anyone care to ‘splain’ the strategy of having market – leading rental homesite rent when a LLCommunity’s physical occupancy is 80% and dropping?

II.

‘Encouragement for a national, Intellectually Honest Debate about what’s brought the noble HUD Code MHIndustry to its’ knees, then brainstormning what it might take to get it back on its’ feet again’, continues to show up on our PC, laptop and netbook screens. For example:

“The need for an industry wide national forum for discussion, and (formulation of) action plans is as obvious as the 12 year slide from nearly four hundred thousand new HUD Code homes shipped annually, to the 49,000 level we’ve been stuck at for the past two years! This would be an appropriate and timely meeting theme and focus for small, mid and large – sized businesses alike.” K Are our elected and salaried leaders at MHI, the NCC, MHARR, and ULI’s MHCC listening? If you’re a member, tell ‘em!

III.

S.A.F.E. Act related commentary seems to be on everyone’s mind these days. Here’s one LLCommunity owner/operator who plans to ‘carry his coals to Newcastle’ next time MHI’s National Communities Council (‘NCC’) meets. After talking about the various home finance alternatives relative to the S.A.F.E. Act, and state implementation thereof, he/she goes on to observe: “One of the problems with the NCC, is the age – old difference in priorities, operation, etc., between large and small (LLCommunity) operators. Everyone is inclined to think the big guys know it all. When in fact, most execs have never been in the trenches, and there are 25 – 50 ‘little guys’ in our asset class for every one of them! Too bad the NCC continues to be dominated by a few big guys….” R`

IV.

“I’m still having a hard time with thinking about you not being involved in this business. I know you need a life, and I do too, but it’s hard to ‘cut bait’, as the saying goes. I too am assessing my options, as a LLCommunity owner, which is hard to do when I’m so busy with day – to – day business demands. So I understand what you mean.” N

Let me say, it’s still early in the process of finding new home(s) for the work products and services we’ve created and grown ‘together’ during the past three decades. I’m cautiously optimistic all will work out in the end, hopefully before December 2011. My ‘ideal’ outcome is pretty well known, if you’ve been reading recent blog postings here, and articles in the Allen Letter professional journal. My worst case scenario however, is not to have found a capable, industry experienced, motivated national successor(s); then having to decide whether to continue in trace another year or two or three; or, as the writer quoted in the previous paragraph puts it, simply ‘cut bait’. Hopefully neither of the last two options will come to pass. In the meantime, know there’s been lively interest to date, in the assets of GFA Management, Inc., dba PMN Publishing; with two ‘intents’ expressed, one firm written offer received to date, and face – to – face meetings scheduled and effected. You seriously interested? Contact Susan McCarty, during working hours, using a not – blocked phone @ (317) 889-6465 & request a Confidentiality Agreement to sign, the first step in participating in the process.

V.

The 50+ page, 22nd annual ALLEN REPORT has been flying out our door! Initial print run of 300 is more than half gone one month after the report’s initial release1 There is no plan for a second printing. So, if YOU want a copy of what could well be the last ALLEN REPORT researched and published for the LLCommunity asset class, phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or (317) 346-7156 right away. While the cover price is $450.00/copy (postpaid), there’s a Special Deal available for the 137 LLCommunity portfolio owners/operators listed in this year’s edition; as well as for those who donated funds in 2010, to partially cover the cost of researching and preparing this year’s report! The Special Deal? Only $250.00/copy, and if you’re not already a paid subscriber to the popular Allen Letter professional journal, a new ‘free’ one year subscription, to the newsletter, will be included in that amount as well! GFA

VI.

Speaking of the Allen Letter professional journal. In light of the seriously faux ‘Top 100 List’ published this month, in the only other print trade publication serving the MHIndustry, and as businessmen or women requiring accurate (Not firms long gone!) and timely (Not portfolio stats five years old!) information, begin your paid subscription ($134.95/year for 12 monthly issues) to the Allen Letter professional journal TODAY! Use contact information in the previous (‘V’) paragraph. Credit Card Orders Welcome.

***

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

You Won’t Read Any of What Follows, Anywhere Else in the MHIndustry!

I.

No NSAC – III next month in Florida! Despite an announcement in the 22nd annual ALLEN REPORT – first distributed at the rejuvenated Louisville MHShow in Kentucky last week, the ‘National State of the Asset Class caucus III, (will not meet) to refine the 2nd of Randy Rowe’s Five Points’: Need for more chattel financing sources!

Why not? Sent a ‘test the waters’ mailing to 50 landlease community owners/operators actively engaged in seller – financing of new and resale home transactions on – site, who also happen to be on the asset class’ Exclusive 200 name ‘Insiders List’ – and received but five responses, or 10%. When I phone – polled them, and others, identified two reasons for NOT convening YET: First, the largest portfolio ‘players’ have programs in place and eschew distraction, for the time being. Second, Thanks to the federal S.A.F.E. Act and variegated state implementation thereof, ‘most everyone else’ favor Wait & See attitudes, before doing anything. So, we’ll wait awhile.

Interestingly however, every sole proprietor and small portfolio owner/operator I polled, made it a point to say they support a separate NSAC caucus, that’d elevate the earlier stated secondary focus of ‘too high homesite rent rates’- on the part of some mega portfolio firms, to primary focus! Now, that was a surprise – or was it?

In the meantime, if you can’t or don’t want to wait for the ‘chattel finance regulatory debris to settle’, before moving ahead with a self – finance program of your own, here’re the only five MHIndustry resources available to you today:

• Buy a copy of Manufactured Housing $$$ Primer for $25.00, via (317) 346-7156

• Attend Ken Rishel’s Chattel Finance Workshop (217) 971-3968 & read newsletter

• Ask Dick Ernst about CU Factory – Built Housing’s new program (972) 503-3201

• See Matt Kerlin (800) 955-0021 for info on 21st Mortgage Corporation’s program

• Use ‘Ah Ha! & Uh Oh! worksheet to calculate ‘affordable’ & ‘risky’ housing ‘price points’ in any local U.S. housing market. (317) 346-7156.

Furthermore, plan to attend the Manufactured Housing Institute’s (‘MHI’) National Communities Council FORUM, the day before this year’s MHCongress, in Las Vegas. Why? Entire program focus, this time around – in April 2011, is on property owner self – finance of new and resale home sales transactions within LLCommunities! For information, contact Thayer Long @ (703) 558-0678.

II.

An Intellectually Honest Debate, within and throughout the manufactured housing industry. There’s no way this is going to play out in the online communication blogosphere. Oh, it’s tempting to try, for sure….just read the quoted blog responses following. No, intellectually honest debate occurs best, when and where primary parties are face – to – face, then properly schooled and guided throughout the debate process. Such a timely and much needed forum could occur at a future meeting of the industry’s de facto Think Tank (i.e. Urban Land Institute’s MHCC) – if that wasn’t such a ‘closed society’ forum. Another possibility would be a One Hour Open Discussion, during a future Manufactured Housing Institute meeting – if internal and industry segment power politics could be kept at bay. The MHCongress is ‘out of the question’, as it’s more a trade show than ‘guiding light’; and, the International Networking Roundtable plays only to the landlease (nee manufactured home) community asset class needs. Would YOU patronize a national intellectually honest debate if one was planned this Summer? To express your opinion(s), respond directly to this blog posting or via the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

Here’re recent responses to previous blog postings on this and related topics:

“Too bad, too sad for (home) manufacturers. So many are already gone, and those left need to awaken their imaginations and intelligence. Yes, I know, that assumes (the survivors) have the intelligence and willingness to identify and get out into the (local housing) markets.” N
versus

“…I think it’s unfair to say ‘We (HUD Code home manufacturers) Don’t Get It!’, because not all the houses at the (Louisville) show were low end models built for communities. That is clearly an important market we are working to better serve, with low price points. But it isn’t only about communities.” K (lightly edited for length)

See what I mean? This is an honest intellectual debate waiting to happen! And most likely, it will not occur! For example; here’re just a couple debate parameters:

• All housing is local housing market specific, per climate, demographics, zoning, & LLCommunity occupancy. What will sell in one locale, won’t sell elsewhere!

• Which point(s) of view to embrace? Be an affordable housing purveyor advocate or ‘Bigger Box = Bigger Bucks!’? Housing contractor or street MHRetailer only?

What can YOU DO, if YOU AGREE the manufactured housing industry, and it’s elected leaders, should be engaging in honest intellectual debate regarding our collective future as this nation’s premier source of affordable, non – subsidized, quality, energy efficient, transportable, attractive, quality housing? Whether you’re an active dues – paying member of one or both national advocacy bodies, and or one or more state associations, let them know how YOU FEEL about this timely, increasingly strategic (Because the future of our industry and asset class may indeed be ‘on the line here!’) matter. Will YOU PARTICIPATE if a national honest intellectual debate occurs? Thought so….

III.

Affordable housing & housing affordability still a bugaboo almost everywhere one looks and reads these days. What follows is quoted from the January/February issue of the Institute of Real Estate Management’s prestigious Journal of Property Management, page # 8:

“Affordable housing in Florida is going green…and gold. The $33 million townhouse development called East Village will target very low and low – income families earning between $15,000 and $49,500 annually in Davie, Florida. Monthly rents at the 155 unit complex will start at $416. Average unit size will be more than 1,000 square feet. Amenities will include a community lake surrounded by walking paths, a swimming pool, children’s splash fountain, exercise facility, playground/tot lot, library and computer lab.” Whew! Who wouldn’t want to live there?

OK, here’s ‘the rub #1’. While there are several formulae and measures of housing affordability*1, the most commonly recognized ones include:

• 30% Housing Expense Factor or HEF
• Housing Opportunity Index or HOI
• Housing Wage or HW

In the HEF instance, this means folk who’re earning $15,000/year annual gross income or AGI, will be expected to pay no more than $375.00/month rent – for their rental housing to be considered ‘affordable’. Well, that’s $41.00/month less than the ‘starting rent’ of $416.00, or a net difference (shortfall – unless subsidized) of $492.00/year. Who’s making up that difference? And while it’s unlikely all 155 units will be rented by $15,000/year AGI folk; if that was the case, it’d be a $56,580 annual shortfall in overall rental income. However, mix in some – or many, $49,500/year AGI folk, paying 30% HEF @ $1,238.00/month, as the appropriately compensating balancing factor. Wonder what happens if and when these ‘opposite ends of the affordability extreme’ get to talking to one another about their respective ‘affordable’ monthly rent rates or $375.00 and $1,238.00, for the same sized apartment unit? And then there’s the question as to who’s really footing the bill to make all this happen.

Hence, in this tight raw land development finance market, here’s ‘the rub # 2’. This 155 unit, $33,000,000.00 townhouse development, pencils out to $212,903.00 per ‘affordable’ unit! Wanna know where all this ‘affordable housing’ money comes from? “Funding for the project stems from federal stimulus funds, Low Income Housing Tax Credit (LIHTC) equity, a Town of Davie SHIP Loan, a Broward County HOME Loan and conventional financing from Citi Community Capital.”

Bottom line? Affordable housing and or housing affordability can, and oft does, mean whatever one wants it to mean! ‘Affordable’ has become the hackneyed catchall term of choice throughout the housing industry; brashly preempted on one hand, by the low income housing folk; and, irretrievably fuzzied by land and housing developers looking to curry favor with political shelterforce activists, on their way to securing quasi – public funding their next project.

***

End Note.

1. HOUSING AFFORDOGRAPHY, ‘Study of Affordable Housing Formulae & Measures of Housing Affordability’, George Allen, Realtor®, CPM®Emeritus, MHM., PMN Publishing, Franklin, IN., June 2008.

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