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

Time for Another Manufactured Housing Industry Paradigm Shift?

Status Quo, One Consolidated National Advocacy Body, or reorganized ‘Producer Only’ & ‘Post Production’ Associations dba MHARR & MHI?

I.

Disclaimer = ‘a statement of disavowal’. Webster. “I have no dog in this fight! OK, maybe three.”*1 However, I have no proclivity to or for any of the alternatives described in the above subtitle, simply a strong and enduring desire to see the HUD Code manufactured housing industry and landlease (nee manufactured home) community asset class well and effectively represented in our nation’s capitol!” GFA

So, what’s a paradigm shift? Popularized more than a decade ago, it was a trendy term to describe “a (business) example serving as a model or pattern”. Not heard much today, but know the manufactured housing industry (‘MHIndustry’) has experienced at least a half dozen paradigm shifts (i.e. Changing manner in which we ‘do business’) since the early 1970s.*2 However, what hasn’t changed or shifted during the past 30 years, is the way we’re represented and lobbied in behalf of, in Washington, DC and Arlington, VA. Hence the ‘question title’ of this week’s blog posting.

This conversation started, somewhat unexpectedly, with responses to the BEBA (‘Blast Email Blog Alert’) announcing last week’s blog posting titled: ‘The CAMPAIGN, Calculating Housing Price Points, & $$$ Talk!’ Hopefully you read that blog in its’ entirety, and ‘took action’ in one or more of the means suggested! In any event, last week’s BEBA went something like this: ‘Have YOU compared MHI’s WEEK IN REVIEW one pager ‘MHI Participates in MHCC Committee this Week’ with MHARR’s 12 page REPORT AND ANALYSIS describing the same event?’ If not, I suggested readers contact both advocacy bodies for copies of said documents, both dated 29 October 2010. Did YOU?

First off; I misspoke. MHARR’s REPORT AND ANALYSIS was not twelve pages long, only six. The ‘other six pages’ were three two pagers of talking points, describing why the Manufactured Housing Consensus Committee (‘MHCC’) should 1) ‘Oppose HUD Actions Undermining MHCC’s Role, Authority & Independence Provided by Law’; 2) ‘Reject the HUD – MHI Proposed Fire Sprinkler Standard for Manufactured Housing’; & 3) ‘Asset Its’ Statutory Right to Review and Comment on HUD’s Expansion of its’ Regulations’. Sorry ‘bout that. But know what? YOU should still obtain and read all 12 pages. To obtain a copy, phone (202) 783-4075. And, while you’re at it, contact MHI, via (703) 558-0678 and ask Thayer Long to point you towards a copy of (last week’s) WEEK IN REVIEW.

What I’m not going to do here, is pen a paragraph by paragraph comparison of these two disparate descriptions (As I’ve done before…) of this recent MHCC meeting – the volunteer body created more than a decade ago, upon passage of the Manufactured Housing Improvement Act of 2000. If you’re a businessman or woman with ownership stakes (a.k.a. Have ‘skin in the game’!) regarding one or more business interests related to HUD Code manufactured housing and or the LLCommunity asset class, YOU should be concerned enough about ‘What’s Happening!’ and ‘How You’re Represented!’ in our nation’s capitol to ‘Stay Informed!’ Nuff said.

A related perspective. Was recently made privy to informal correspondence among individuals debating the merits, or lack thereof, regarding creation of separate ‘Producer Only’ & ‘Post Production’ (nee ‘the aftermarket’) national advocacy bodies. One telling argument, against such a split, contained points presently ‘not on the table’, by dint of our semi – united industry, heavily influenced by housing manufacturers:

• Implement five & ten year warranties on all new homes
• Require final & comprehensive inspections of every new home prior to shipment
• Shift total responsibility for all new home installations to manufacturers
• Disallow direct sales of new homes by manufacturers
• Proscribe preferential new home pricing by manufacturers

Point? Enter ‘Producer Only’ & ‘Post Production’ advocacy bodies, and expect these five – and likely more, presently assuaged sore points, to become lively issues of dissension. No, the most desirable scenario is to speak with one voice, underwrite one national body!

The most pressing need of contemporary manufactured housing, and by extension, the LLCommunity asset class, is a united focus on solving (chattel) finance issues; which in large part, keeps annual shipments at the 60 year nadir 50,000 ‘new homes’ level, versus 372,843 ‘new homes’ shipped during 1998, the final year of our too short renascence.

OK, so where do we go from here? I have no idea. That is entirely up to those of you who patronize this website and blog posting each week, and have valuable stakes in the future (good) health of this industry and asset class. First step, obviously, is to become and stay informed. Reading this weekly blog posting, and monthly Allen Letter professional journal, are good starts. And there’s not better way to continue that process, than to become an active, direct member of the national advocacy body best representing your business interests, whether HUD Code home manufacturer, supplier, financier, or from the realty side of the house. What will YOU do?

II.

FLASH! Breaking News! You’re reading about it first here! The RV/MH Hall of Fame of the RV/MH Heritage Foundation in Elkhart, IN – national repository of our RV/MHIndustries’ and asset class’ history and heritage, via museum and library, will soon launch Invest in a Dream, an aggressive fund – raising program, to finance the final phase of facility construction!

Here’s what makes this NEWS. The RV/MH Hall of Fame will soon launch a ‘once in a lifetime and career opportunity’ for YOU to acquire ‘naming rights’, for yourself or someone of renown in the RV/MH industries, to be affixed to the new Grand Hall and Manufactured Housing (exhibit) Hall @ $1,000,000.00 apiece! There’re also naming rights opportunities for the Outdoor Show Area @ $1,000,000 per year; and various Roadways/Streets/Boulevards @ $100,000 apiece; plus five lakes at $50,000 apiece. It’s also going to be possible to buy large engraved Paving Bricks @ $500 apiece, and smaller engraved Paving Bricks @ $250 each. Point? You’re hearing about this NOW, before anyone else in the MH & RV industries. SO, if you’ve wanted to ensure your good name, or that of someone of renown from either of these industries or the landlease community real estate asset class, is publicly recognized and honored in perpetuity, phone (574) 293-2344 or (800) 378-8694 today, and ask for information and application form! Remember, this is truly a ‘once in a lifetime and career opportunity’. Don’t miss this opportunity and regret it later! GFA

******
End Notes.

1. Given my loyalty to three dozen HUD Code manufacturer Business Development Managers, a.k.a. ‘BDMs’ named at the NSAC II in Elkhart, IN., on 2/27/09; being a direct, dues – paying member of the Manufactured Housing Institute (‘MHI’) – as YOU should be too – phone (703) 558-0678; and, founding and present day board member of the National Communities Council (‘NCC’) division within MHI. As a 30 year industry consultant and LLCommunity owner, I’ve been told I don’t qualify for membership in the Manufactured Housing Association for Regulatory Reform (‘MHARR’) – or I’d belong there too.

2. If you’d like a free copy of the recently updated (November 2010) ‘MOBILE & MANUFACTURED HOSUING; serving the shelter needs of ‘newly weds & nearly dead’ for 50+ years! The PARADIGM SHIFTS: (are)….Phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 and request 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

The CAMPAIGN, Calculating Housing Price Points, & $$$ Talk!

HUD Housing CAMPAIGN Continues to Generate Lively Interest, Introducing the ‘Ah Ha! & Uh Oh! Housing Price Points Worksheet’ &
How Manufactured Housing Shoots Itself in the Foot, Hand & Head!

I.

For a second consecutive week, The CAMPAIGN to promote HUD Code manufactured housing, proposed at a recent ULI Manufactured Housing Communities Council meeting by creativehavenmedia.com, stimulates record level response from readers of this blog at community-investor.com!

Four executives from the Cherry Hill, New Jersey firm described how the manufactured housing industry “…could (should) create new distribution channels by effectively partnering with big box retailers, and other similar venues, to bring new homes face – to – face with new and old target markets.” *1 This past week I asked Lauren Shippy, Strategic Planner for creativehavenmedia.com, to summarize The CAMPAIGN.

‘This isn’t just another marketing campaign. It’s about creating a new channel in which to integrate the value supply chain (of manufactured housing), so gaps are bridged between the home manufacturer and financier, landlease community or building site, and the consumer/homebuyer.

The CAMPAIGN begins with a strategically located showcase event (featuring one or more manufactured homes), framed and vigorously promoted with regional and continuous marketing and public relations measures, to capture the attention of targeted demographics, and initiate procedures to change consumer perception.

Once consumer’s attention is focused on the housing display, sponsors have opportunities to educate them about ordering, financing, and siting their new home! The process connects the dots for the consumer/homebuyer in a simple and straightforward manner.

The CAMPAIGN also allows sponsors to identify and overcome product marketing hurdles, one region at a time. Using the showcase event as a forum for educational and bridge – building seminars, sponsors can demonstrate the numerous benefits of affordable manufactured housing to local banks, municipalities, zoning boards, even local employers.

Housing design flexibility provides opportunity for various sectors, within the manufactured housing industry (e.g. landlease communities), to produce campaign – supporting promotions, directed at their particular demographic in a specific region. In summary, The CAMPAIGN is comprised of components working together to increase the demand for manufactured housing, making the design, buying, and installation process easy for the consumer, and resolve historic hurdles in local housing market. (Edited. GFA)

What’s next? SUCCESS or FAILURE to implement The CAMPAIGN is up to YOU! Last week, suggested you contact Thayer Long at the Manufactured Housing Institute (‘MHI’): (703) 558-0678; Danny Ghorbani at the Manufactured Housing Association for Regulatory Reform (‘MHARR’): (202) 783-4087; & Amy Haven, at creativemedia.com: (609) 313-5885. Did you? If not; and another week goes by without your vocal support, this creative initiative will, sorry to say, surely die, like an earlier similar proposal unanimously lauded at the 2008 Networking Roundtable! How so? HUD Code housing manufacturers, later that Fall at MHI’s annual meeting, voted down a plan to launch a Nationwide Brand Awareness & Image Improvement Campaign, fearing non – participating HUD Code manufacturers would have a pricing advantage over those supporting that campaign with fee assessments on each new home shipped.

Understand this, if The CAMPAIGN fails to materialize this time around, just as in baseball and crime, manufactured housing will be one strike, or opportunity, away from (Or, closer to!) being terminal; you know, as in the ‘Three strikes & you’re out!’ call or death knell! Is that how HUD Code housing wants to exit the national housing market? With nary a whimper? I surely hope not; and trust you feel the same. Frankly, the manufactured housing industry’s future is in your hands today! What will YOU do?

Are YOU and I alone in promoting The CAMPAIGN? NO! Reread last week’s blog posting at this website! And here’re recent, additional (edited) thoughts on the timely and strategic subject:

• ‘With regard to The CAMPAIGN. I agree an image campaign is well over due. Remember when Champion Homes (nee Champion Enterprises) effected a national campaign a couple decades ago – on the Johnny Carson Show? I’m thinking any image campaign should be localized, funded by (home) manufacturers, landlease community owners/operators, and MHRetailers in that local housing market.” One caveat however: “Until we have a firmer handle on our (chattel) financing situation, now may not be the best time to kick off such a program; rather, ‘keep our powder dry’ for now.” DO

• “We have always wanted to change the image of our industry, to equal and better than ‘mainstream’ homes. However, our (business) success is and always will be, associated with the down payment and monthly payment (amounts) required for safe, comfortable, low maintenance homes quickly delivered for move – in.” NB

• The CAMPAIGN “Can’t hurt, until some manufacturer will not back his (housing) product, or a ‘trailer’ dealer messes over a customer – but still worth a try. Better we return to the lowest cost housing product we can build; that is and always will be our market.”

OK; ‘the ball is NOW in your court’. Again, what are YOU going to do? Pass or play???

II.

When the time comes to calculate appropriate home sale price(s) for a prospective homebuyer visiting your standalone or on – site salescenter, or estimate price points for new inventory to be ordered when opening a salescenter in a new local housing market, ‘How do you do it?’ Historically, in the rough and tumble world of HUD Code manufactured housing, we’ve oft relied on the self – serving advice of manufacturers’ regional sales representatives, concocted a formula of our own that sometimes seemed to work, adjusted the easily researched ‘book value’ of resale homes, or simply priced existing or newly ordered inventory by the seat of our pants. Now there’s a much better way! Use the ‘Ah Ha! & Uh Oh! Formulae’ for “…estimating maximum recommended ‘affordable’ & ‘risky’ purchase (or sale) prices for new & resale, privately – owned homes of any type, sited on realty owned fee simple with home, or leased – as in a landlease community (‘LLCommunity’)”. *2

The ‘Ah Ha! & Uh Oh!’ methodology begins with either a prospective homebuyer or household’s Annual Gross Income (‘AGI’), or the Area Median Income (‘AMI’) of any local housing market with a postal zip code. For the purpose of calculations to follow, AGI & AMI can, and will be in this example, the same dollar amount, e.g. $60,498. Specifically, this is the National Association of Realtors (‘NAR’) estimated national Median Family Income or MFI (akin to AGI), for between 2006 and the present.

Side Note. Why the ‘Ah Ha! & Uh Oh!’ Moniker? Originally, the formula was used to estimate home sales and price points per ‘affordable housing and housing affordability’ alone. Well, Creighton Weber, realty loan originator with Wells Fargo, noticed the first letters of the four words were AHHA, and he morphed them into the common exclamation: ‘Ah Ha!’; as in, “Ah Ha!, here’s how to effectively estimate affordable housing price points!” And when the scope of the formula was broadened, to include less stringent measures of housing affordability, accommodating homebuyers willing to take on more risk, when buying and financing a new or resale home, it made sense to round out the title with the exclamation, ‘Uh Oh!’ Watch and see how these two thesis materialize in the paragraphs to follow…

Here’re the ‘givens’ and related factors, in order of appearance, in the eight step calculation process. $60,498 MFI (Just as easily, AGI or AMI – the latter, easily available from zipskinny.com, per postal zip code, of subject local housing market); a 30% Household Expense Factor or HEF, per ‘loaded’ (Including PITI & household/utility expenses) and ‘barebones’ (Only PI, no TI, etc.) perspectives.*3 Then, either 75% or 100% of estimated ‘loaded’ & ‘barebones’ HEF amounts available for annual PI & site rent – if applicable; and in this case, $333/month, depending on whether it’s to be an ‘affordable’ (e.g. 75% of HEF amount) or ‘risky’ (e.g. 100% of HEF amount) loan commitment on part of borrower. Loan terms of 6.5% & 20 year terms for a real estate secured, and 9.5% & 20 year terms for a chattel (personal property) mortgage. Also assume a 10% of sales price down payment . Final step to the ‘Ah Ha! & Uh Oh!’ methodology, is to adjust the fee simple ‘affordable’ and ‘risky’ home sale prices and price point calculations, according to the value of underlying real estate, a key factor whose value varies widely, e.g. between $5,000 and $50,000+/- per site or acre, depending on whether raw or developed land, rural or urban locale, and other conditions.

With all that said, and given the factors cited in the previous paragraph, here’re the four new or resale home sales prices, and or inventory price points, for homes (to be) sited as follows:

With an ‘affordable’ loan and within a landlease community: $95,000.00

With a ‘risky’ loan (Using 100% of HEF for P&I only): $141,000.00

With an ‘affordable’ loan and on realty owned fee simple: $169,000.00, minus value of underlying realty, e.g. @ -$50,000 = $119,000.00+/-

With a ‘risky’ loan (Using 100% of HEF for P&I only): $225,000.00, minus
value of underlying realty, e.g. @ -$50,000 = $175,000.00+/-

Bottom lines? With an annual income of $60,498.00, buy a new or resale manufactured (or modular) home sited in a LLCommunity for an ‘affordable’ $95,000.00; or, a effect a somewhat riskier transaction (by dint of paying taxes & insurance & utility payments in addition to the 30% HEF) for $141,000; and pay $333/month site rent for professional property management, generally lower taxes (personal property vs. realty), and property amenities, among other benefit.

Or, given same $60,498.00, buy a new or resale manufactured (or modular) home sited on realty owned fee simple for an ‘affordable’ $169,000.00, less the value of the underlying real estate; or, effect a somewhat riskier transaction (by dint of paying taxes & insurance & utility payments in addition to of the 30% HEF) for $225,000.00, less the value of the underlying real estate; and be responsible for all the routine maintenance of the home and privately – owned site, whether in a subdivision or elsewhere.

Now, with all that said, again understand there’re additional factors, e.g. annual real estate taxes; where improved ‘realty owned fee simple’ generally pays much higher taxes than usage taxes levied on homes sited in landlease communities, where property owner also pays real estate taxes on the overall multifamily rental property; and tax credits, rent control, etc..

III.

What do LLCommunity owners/operators talk about when they get together these days? Following is the slightly edited transcript of an actual conversation among small to mid – sized property portfolio folk, discussing the purchase, pricing, resale, repossession, and financing of used manufactured homes.

“Every time I run across one of these ______ repos, I wonder why the ‘suits’ on Wall Street, and the powers – that – be at that lender have so much difficulty understanding what we see day in and day out. This is a (manufactured) home in our LLCommunity in _______. The lender financed it for 30 years! The buyer paid site rent and house payments like clockwork for 12 years, then moved out, saying there’s no way she’s going to pay another 18 years on that home. Not sure what her ‘grunt line’ is, but I wouldn’t be surprised if she would have stayed in the home, if she only had just three more years to pay on it – for a total of 15 years.”

“Well, our property manager and maintenance man went to look at another _____repo on private property in _______ – a ’97, 24X40 (20% smaller than a 16X76). Their buyer paid regularly for 14 years, then decided he wasn’t willing to pay another 16 years. Considering the $3,500 we’d have to spend for move/setup, $4K for back taxes and rehab, $2K for decks and skirting rehab, and what we figure we could sell it for, we offered $3-4K for the manufactured home.” Lender’s response? “No! We want $12,000. ‘Comps’ have come in at $11,000. So, lowest we could go is around $9,000, since the balance on the loan is $38,000.” LLCommunity owner: “Unbelievable. Homeowner pays for 14 years and only shaves $3,000 off the principal balance! Don’t know about the rest of you guys, but I haven’t been able to buy a repo at a price that makes sense in about six months.”

“Over the past few months, we’ve bought eight manufactured homes. Two were in our LLCommunity; the rest in other owners’ properties. Best deals I’m finding are coming from homeowners who need to sell quickly – of which there seem to be a lot these days. We’re turning them around and doing Lonnie Deals (‘contract sales’).”

“Just got back from Jack Miller’s tribute seminar in Tampa. Pretty much everyone there sees things continuing to slide for the next two or three years, and credit remaining tight. This means affordable housing – combined with some type of seller – financing, will be very much in demand. This is what I’m seeing around here. Rarely do we hold a home for more than 30 days before reselling.”

And this summary, by yet another LLCommunity owner/operator: “Conventional lending today is a real conundrum. To the frustration of taxpayers and potential borrowers, beneficiaries (lenders) of TARP, used the funds to acquire weaker banks instead of making new loans, as the government intended, but didn’t require. Those lenders who want to make loans, are being required to follow incredibly strict guidelines, particularly regarding income, credit, and appraised value. Since many potential borrowers have lost their jobs, have little to show for retirement and savings funds, run up credit card balances, etc., many can’t meet the income, down payment, and credit requirements. Those few who can satisfy those requirements then run into appraisers who tell them the property (house) they want to refinance (to take advantage of today’s low rates) is worth half what it was two to three years ago – so they can’t get the loan they need. So, the only loans being ‘closed’ today are to buyers of foreclosed property with 750+ credit scores, high stable income, and 20% down payment. Since few transactions meet all those criteria, bank revenue (from loans) drops and more bank failures are inevitable. To keep more banks from getting into financial trouble, the government’s solution is to tighten lending guidelines. Second verse, same as the first.”

IV.

What’s happening? During first and second weeks of November, take a gander at that month’s edition of the Allen Letter professional journal. Why? Feature story is a ‘Request for Proposal’ to acquire the dozen or so Work Product profit centers that comprise GFA Management, Inc. dba PMN Publishing. Think: annual ALLEN Report, Networking Roundtable, two subscriber – supported monthly business newsletters, the popular Manufactured Housing Manager (‘MHM’) training & certification program (with nearly 1,000 MHMs designated to date!), and much more. To obtain a copy, phone (317) 346-7156.

On 17 – 19 November, in Chicago, there’ll be a Captive Finance Workshop. For information, phone Ken Rishel @ (773) 647-3125.

Louisville MHShow is now a definite GO! So; plan to be in Louisville, KY., on 13 & 14 January 2011 to help rejuvenate this valued Midwest manufactured housing event. There’ll be three LLCommunity – oriented seminars on the 13th: the Community Series Home; how to use the above – referenced ‘Ah Ha! & Uh Oh! Formulae’ to estimate home sale and inventory price points in any local housing market in the U.S. For registration information, contact Dennis Hill @ (770) 587-3350.

Plans are moving ahead for NSAC III. LLCommunity owners/operators should watch their mail for a letter to the 250 folk who’re on the Official Insiders List of the asset class. These are the owners/operators generally recognized as being the Movers & Shakers in the MHIndustry and LLCommunity asset class. IF you don’t get a letter by mid – November, phone the MHIndustry HOTLINE (see End Note # 2 below) and request to be invited to this seminal event tentatively scheduled for Florida in early February 2011. Focus? ‘Examining Self – finance from the LLCommunity owners/operator’s Perspective!’ This is where we’ll be talking about the ‘present and future’ of self – finance within the LLCommunity realty asset class for years to come!

*****
End Notes.

1. See blog posting # 111, title: ‘Attention HUD Code Housing Manufacturers! Are You Listening?’ Visit: community-investor.com

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

3. PITI = loan principal, interest, taxes, insurance

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

Attention HUD Code Housing Manufacturers! Are You Listening?

If NOT; no one to blame but yourselves, if shipments continue to languish!

I.

Last week, at a Finance Seminar in Springfield, IL., Greg O’Berry, President & COO of Hometown America, and chairman of MHI’s National Communities Council division, during his ‘State of the MHIndustry’ keynote address, opined IMAGE continues to be a perennial bugbear for HUD Code manufactured housing! *1 And until we ‘Take a Major Step to Image – Educate the Consumer – Public’, our systems – built housing product is ‘not their father’s mobile home’, but an attractive and high quality, affordable and non – subsidized, ‘green’ and energy efficient Shelter Alternative, our annual housing shipment total will continue to bump along at its’ 60 year nadir. *2

Well, the HUD Code manufactured housing industry, a.k.a. MHIndustry, is now poised to ‘Take (that) Major Step to Image – Educate the Consumer Public’!
Did YOU read last week’s blog posting titled ‘The CAMPAIGN’? If not, you might want to stop reading this blog posting, and scroll back a week to this web site’s archive, to do so. Seriously. Then the following paragraphs will enjoy maximum impact, relative to your thinking, and hopefully – personal and corporate action and support of The CAMPAIGN!

An early alternative title for this week’s blog was ‘The CAMPAIAGN Revisited – through the eyes of manufactured housing aficionados responding to this timely and strategic Challenge and Opportunity!’ But if you’re with me this far, title alternatives no longer matter. What you want to know NOW, is what our peers have been saying and writing in response to ‘The CAMPAIGN!’ And FYI, last week’s posting generated the strongest reader response of the 120 blogs penned to date. That’s very ‘telling’….

But first, a clarification to last week’s blog, wherein was stated, “…The CAMPAIGN debuted at a recent national gathering of manufactured housing executives and landlease (nee manufactured home) community owners/operators, meeting in Washington, DC.” This was actually the Fall meeting of the Urban Land Institute’s (‘ULI’) Manufactured Housing Communities Council (‘MHCC’), under the leadership of Kenneth Lipschutz, VP of finance & acquisition at Brookside Communities in Detroit, MI. Why is this important to know? ULI’s MHCC, as a discreet product council, functions as the de facto THINK TANK for the MHIndustry! And now, having provided the bully pulpit for ‘a concept whose time is now’, next key step is to identify national and or regional DO TANKS (e.g. advocacy and trade groups representing manufactured housing and LLCommunities, along with private and public firms), to articulate, fund and implement The CAMPAIGN! If you’d like information about becoming an ULI & MHCC participating member, contact Kenneth via (248) 645-1077.

Here’re some of the ‘lightly edited remarks’ our peers submitted regarding The CAMPAIGN:

“The CAMPAIGN is the first real, viable light at the end of this black hole (i.e. minimal home shipments) for the MHIndustry. This is so exciting. I hope ‘the big three’ will listen to reason, putting away self – serving mind sets for the first time in six decades!” *3 JK in IN.

“I am all for, and willing to help support, any type of national (brand) awareness program. I think the big box store parking lot is an interesting concept. Worth exploring!” JD in MI.

“Exactly George. The CAMPAIGN does not have to be ‘perfectly agreeable’ to everyone; but certainly implemented loudly and nationally! We will not legislated, regulate, or postulate ourselves out of this mess. We must SELL our way out!” NB in AZ

“Interesting post George. Some observations and comments relative to The CAMPAIGN:

Advantages of big – box exposure over MHRetail sales lots include, more traffic, indirect solicitation (e.g. ‘See a new home while shopping at Walmart!’), tacit endorsement by the big – box stores, not to mention even more traffic for the stores!

Disadvantages might include bog – box stores, or shopping center owners, charging for this prime exposure, big – box store reluctance to endorse what might be seen as a ‘problem product’, and big – box reluctance to overcrowd their parking lot.

Concerns/questions regarding which manufacturers homes would be displayed and how many homes displayed at one time – obviously dependent on size of parking lot.

Local landlease communities should be present, in some fashion, at big – box store displays, to give prospective homebuyers more options for siting their new home.

A Code of Ethics, signed onto by MHIndustry participants, along with minimum standards (e.g. for LLCommunity participation) would be welcome improvements in support of The CAMPAIGN.”

The preceding five observations and comments submitted by industry veteran & GMHA board member, Spencer Roane, of Atlanta, GA.

“It’s been tried in the past. Perhaps a conversation with former MHI economist Jim Clifton is in order, to benefit from his experience in working with bog box stores a few years ago.” Marty Lavin in VT.

“We used to do a number of ‘shows’ in big box (store) parking lots. It’s not as easy as you think, to draw people into the houses. Some people are afraid they are getting sucked into a 90 minute condo type sales presentation. The key might be signage: ‘A 10 minute tour that could change your life and budget!’ Once inside, they’ll see our homes are ‘nicer than their home’ and ‘not what they expected – it was better.’ Expect some initial push back from MHRetailers, e.g. ‘Who’s going to pay for these displays?’ & ‘Who’s going to man them?’ & ‘I’ve got a great street location already!’ With that said, however, ‘Access to new potential homebuyers is the key to the success of The CAMPAIGN.” RK in WI.

What follows here, is the most thoughtful and far reaching response to last week’s blog introducing The CAMPAIGN. While the big – box store concept isn’t even mentioned in this overview, there’s enough related verbiage and thinking to the concept, to use it as a conclusion to this week’s revisit to The CAMPAIGN concept:

“…a lot of what was talked about 20 years ago is still being discussed today: better recognition and acceptance of the manufactured housing brand and (landlease community) income – producing property type; also zoning, construction codes, proper and fair lending practices, etc.. Another constant, is the inability of the MHIndustry as a whole, and its’ leaders, to gain a secure market footing where ‘affordable housing’ and LLCommunities are concerned; to secure reliable, reputable financing for the housing product; and, creation of national branding and advertising campaigns!

“Furthermore, until there is a unified group to assaults the problems that erode the foundation of the MHIndustry, the collection of well – intended businessmen and women working therein, will continue to be forced to deal with many, if not all, these problems individually. And that unified group will need a lot of money to professionalize the industry. Therein lies the rub. Without a major, identifiable ‘State Farm’ in the mix, everyone appears to be, and is, on their own! As observed at the Networking Roundtable last month, ‘Where are the manufacturers and home sellers in the problem – solving part of this (industry survival) equation? Who will commit to funding the industry’s ‘bank’ to move it forward? All too often it appears our Great Whites don’t lead with their money, but rather with their advice and PowerPoint presentations.” PS in IL.

With all that said, where does it leave The CAMPAIGN today? This website and weekly blog is just one voice in the manufactured housing wilderness, and YOU’ve responded well to my request for input last week. BUT, have YOU contacted executives at Clayton Homes, Champion Homes, and CAVCO Industries – all of whom were represented at the aforementioned ULI/MHCC meeting in Washington, DC – encouraging them to ‘give legs’ to The CAMPAIGN? If not, YOU owe it to yourself, and the rest of us, to do so, the sooner the better! For contact information, see End Note # 4. And, if a direct dues – paying member of the Manufactured Housing Institute (‘MHI’), it wouldn’t hurt to contact Thayer Long @ (703) 558-0678, to encourage that national advocacy body to grab this bull by the horns as well, and lead the MHIndustry back to increased volume of new home sales (nee shipments)! Not a member? Join when you phone! For that matter, it’s also a good idea to tell Danny Ghorbani about The CAMPAIGN! His national advocacy body, the Manufactured Housing Association for Regulatory Reform (‘MHARR’) represents most of the smaller HUD Code housing manufacturers in the U.S. These stakeholders should especially want to become actively involved in The CAMPAIGN! Contact Danny via (202) 783-4087.

Finally; keep the blog responses coming! Not only do they stimulate my writing juices each week, in our behalf, but – as you can see in the previous paragraphs – your considered responses provide the very fodder that comprise the best blog postings of all! Reply directly to this blog, or via gfa7156@aol.com or via the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Looking forward to hearing from you!

Postscript. Just realized the email address included in last week’s introduction to The CAMPAIGN, contained a typo. Should have read: ahaven@creativehavenmedia.com
Strongly recommend you contact Amy Haven of creativehavenmedia.com to encourage her and her team of four marketing executives, in Cherry Hill, NJ, to do whatever they can, as you too are doing, to get the manufactured housing industry to fund and implement The CAMPAIGN! Their phone: (609) 313-5885.

II.

25 of you joined me for the Finance Seminar in Springfield, IL., this past week! Now, how many of you will be in Grove City, Ohio @ 28 & 29 October for OMHA’s ‘Self Finance Legal Compliance Seminar’? All presenters are from one law firm (Tomkies Scheiderer, LLP) and 21st Mortgage. To register, phone Tim Williams at (614) 799-2340. And, lest you forget; during the very same time frame, the Five State Mid – Atlantic Annual Conference convenes in Albany, NY. Phone Nancy Geer @ (518) 867-3242. And, on Friday 29 October, Jim Keller, MHM, will be conducting IMHA/RVIC’s ‘Installer Continuing Education – Transportation & Safety Seminar (four hours) in Indianapolis, IN., from 1 – 5PM. To register, phone Jim at (317) 370-5954.

On November 17 – 19, there’ll be a Captive Finance Workshop in Chicago, IL. For information, phone Ken Rishel @ (773) 647-3125.

III.

Will I see you at the Louisville MHShow on 13 & 14 January 2011? Sure hope so. As I told you last week, there’ll be a special day of seminars for those ‘selling and self – financing new and resale homes in LLCommunities’. For registration information, phone Dennis Hill @ (770) 587-3350.

IV.
OK, I let the cat out of the bag last week, by announcing preliminary plans for a National State of the Asset Class (‘NSAC’) caucus III, probably in Florida during early February 2011. Already, a dozen of you have committed to attend – that’s how timely and critical this contemporary topic is to LLCommunity owners/operators nationwide: ‘Examining Self – finance from the LLCommunity owner/operator Perspective!’ And yes, there’re plans to invite a few realty and chattel lenders to input as resource voices during discussions of the ‘present and future of self – finance within LLCommunities’, relative to ‘realty mortgages and refinance’, as well as ‘permanence or not, of the self – finance trend’.

What you may or may not know, there’s a special Insider’s Contact List of LLCommunity owners/operators who’ve patronized the previous two NSAC caucuses. We plan to distribute a letter this week, to update/purge said list, so an Advance Planning Document can be sent out during late November. So, if you own and or fee manage one or more LLCommunities, and would like to be included on the Invitation List for NSAC III, let me know by responding to this blog, or email via gfa7156@aol.com , or phone (317) 346-7156.

Attendance at NSAC III will be limited to 100 LLCommunity owner/operators, plus invited resource voices. Just as the previous two NSAC caucuses set the stage for our asset class survival this decade (i.e. Five Action Areas still very much in play) and HUD manufacturers now fabricating Community Series Homes (‘CSH’) for siting in our properties, with the help of Business Development Managers (‘BDM’); NSAC III will likely be the defining venue for chattel finance in the LLCommunity environment!

V.

Finally. The 22nd annual ALLEN REPORT compilation nears completion. But some LLCommunity owners/operators who read this blog posting each week, and who’ve been listed in previous editions, have NOT submitted their portfolio data yet. So, FAX questionnaire to (317) 346-7159 ASAP! Need a questionnaire? Phone (317) 346-7156.

VI.

If you’re an Allen Letter professional journal subscriber, pay close attention to the November issue – arriving next week. Front page will feature a Request for Proposal to acquire and/or absorb the MHIndustry & LLCommunity asset class ‘work product(s)’ of GFA Management, Inc., dba PMN Publishing. While there’s no immediate plan to retire or exit the MHBusiness anytime soon, planning should begin now, in 2010 and early 2011, to ensure the gradual, orderly and effective transition of newsletters, texts, forms, reports, MHM program, events, etc., from one permanent platform (i.e. 1980 to 2010, so far) to another, during the year(s) ahead. Platform preferences, in declining order of interest? 1) An existing or new national, not – for – profit MH, or realty – oriented association, to purchase and absorb GFA/PMN in toto; 2) An existing or new national, for – profit firm, to purchase and absorb GFA/PMN in toto; or, 3) Dismantling of GFA/PMN, selling off revenue – producers: two subscriber – supported newsletters, 21 year old Roundtable event, popular MHM certification program, textbook and forms inventory, ALLEN REPORT, and more. Interested in learning more? Read the November issue of the Allen Letter professional journal: Phone (317) 346-7156 to subscribe.

***
End Notes.

1. bugbear. Persistent problem or source of annoyance

2. systems – built housing. The trade term of preference, per Joe Stegmayer, chairman & CEO of CAVCO Industries, and new chairman of the Manufactured Housing Institute (‘MHI’). Alternatives: factory – built housing & industrialized housing, with HUD Code manufactured housing as a subset of all three terms.

3. Clayton Homes, Champion Homes, CAVCO Industries.

4. Clayton Homes: Kevin Clayton @ 865) 380-3000. Or ask for Lance Hull, BDM or Colt Davis, BDM. Champion Homes: Kevin Flaherty, BDM @ (919) 467-0099. CAVCO Industries: Joe Stegmayer @ (602) 256-6263 or Bill Danforth, BDM @ (602) 763-0521. And while you’re at it: Chris Miller, BDM, at Adventure Homes @ (877) 510-1955X109; Steve Quick, BDM, with Fleetwood Homes @ (512) 255-7743; Brian Cira, BDM, with Harmony Homes @ (800) 999-8787X3235; Ed Hussey, Jr., BDM, with Liberty Homes @ (574) 533-0431; and, Terry Decio, BDM, with Skyline Corporation @ (574) 294-6521.

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

The CAMPAIGN

There’s a New Team in Town and It Might Have What It Takes to Help the Manufactured Housing Industry Regain Significant National Market Share!

I.

Labeled ‘New Marketing Tactics for Manufactured Housing: The Wave of the Future?’, a recent presentation by four executives from the Cherry Hill, New Jersey firm creativehaven media + marketing, described how our industry could (should!) create new distribution channels by effectively partnering with big box retailers, and other similar venues, to bring new homes face – to – face with new and old target markets.

The CAMPAIGN, strategically, is designed to be a regionally planned and executed means, to effect increased demand for our housing product in new and existing markets, via three distinct but related methodologies:

Re – branding and re – imaging our housing product, via careful online and print media planning and buying

Experiential marketing, via showcasing our housing product in big box retail store parking lots, supported by a series of message – supporting local seminars

Enhance awareness and availability of our housing product via public and community relations efforts and events

Is The CAMPAIGN a perfect and ready program? Not yet. The CAMPAIGN debuted at a recent national gathering of manufactured housing executives and landlease (nee manufactured home) community owners/operators, meeting in Washington, DC. The dual purpose of the presentation was to 1) introduce The CAMPAIGN, and 2) solicit direct feedback (i.e. critique, ideas, alternatives) from this top level gathering of industry leaders. Suggestions included:

Agree to no longer use the descriptive adjective ‘manufactured’, and go simply with housing; and when/where necessary, follow MHI Chairman Joe Stegmayer’s lead and refer to the unique housing type as being ‘systems built housing’.

Articulate and agree on a housing design and construction standard supportive of this new marketing dynamic.

Articulate and agree on a landlease (nee manufactured home) community quality standard supportive of this new marketing dynamic.

Articulate, and ensure all participants agree, to abide by a Code of Business Ethics

Much more about The CHALLENGE was discussed during this high level meeting of business executives and LLCommunity owners/operators, but you get the idea of what could/should lead our industry forward to restored market share. The question now is; ‘Where do we (You) go from here?’

First; whether this important and timely matter ‘grows legs’ and moves forward, depends in large measure, whether firms like Clayton Homes, Champion Homes, and CAVCO Industries executives, as well as MHI’s new chairman, ‘take The CAMPAIGN ball and run with it’! Will they? And don’t forget, there’re additional HUD Code housing manufacturers who’d likely be interested in participating in The CAMPAIGN, if invited or challenged to do so. Continue to read this blog every week to hear firsthand what’s happening….

Second; much depends on whether YOU, reading about The CAMPAIGN, here in this Blog posting, and soon elsewhere, take the initiative to input The CAMPAIGN directly, to learn more about it, and offer your support, to creativehaven media + marketing, via (856) 702-6063 or ahaven@creataivemedia.com (Amy Haven or Kendra Brill). Marketing executives on this team, with manufactured housing experience, are Susan Gargano and Lauren Shippy.

Third; if you’re a direct, dues – paying member of the Manufactured Housing Institute – and if a bona fide business participant in this industry and asset class you surely should be, take the initiative to let Thayer Long, at MHI, know of your support for The CAMPAIGN! (703) 558-0678. For that matter, contact Danny Ghorbani of the Manufactured Housing Association for Regulatory Reform (‘MHARR’), suggesting he promote The CAMPAIGN concept to his housing manufacturer members as well. (202) 783-4087.

So, at this point what do YOU think of The CAMPAIGN? Does the concept resonate with YOU? I’d like to know! At present, I’m receiving more than a dozen direct responses, each week, to compelling topics covered in this blog. So, don’t be shy: respond directly to this posting, via the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or write to GFA c/o Box # 47024, Indianapolis, IN. 462347.

II.

Where will YOU be this Thursday, 21 October 2010? I’ll tell you where several dozen LLCommunity owners/operators, who’re presently ‘selling and self – financing new and resale homes on – site in their properties’ will be: at a FINANCE SEMINAR hosted in the Northfield Inn in Springfield, IL. That’s right, they’re driving and flying in from throughout the Midwest, to attend this one day potpourri of topics germane to that timely and strategic business model. For details and or to register, phone Bob Thieman @ (217) 528-3423.

III.

And where do you plan to be on 13 & 14 January 2011? At the resuscitated Louisville Manufactured Housing Show we surprised you with in last week’s blog posting! Don’t forget, 13 January will be an extra special day for those who, as described in the previous paragraph, ‘sell and self – finance new and resale homes in LLCommunities’. Three seminars that day will explore the concept (and reality) of Community Series Homes (‘CSH’) for LLCommunities; ‘How to Properly Calculate Affordable & Risky Price Points of New & Resale Homes Sited Within & Outside LLCommunities!’; and, ‘All you’ve wanted to know about self – finance,but didn’t know who to ask, e.g. difference between ‘captive finance’ and ‘buy here – pay here’ methodologies, and much much more’! For information, contact Dennis Hill @ (770) 587-3350.

IV.

Now, here’s a new thought for you; actually, it’s a third manifestation of the National State of the Asset Class caucus concept, that debuted on 27 February 2008. Remember that pivotal day? More than 100 LLCommunity owners/operators convened at FountainView LLCommunity in Tampa, FL., to ‘take control of their collective future’ in the face of plummeting manufactured home shipments. Well, Five Action Items came out of that meeting, and they continue to guide the asset class to this day! Then, a year later to the day, 27 February 2009, another 100 MHIndustry & LLCommunity folk NSAC -caucused in Elkhart, IN., at the beautiful RV/MH Heritage Foundation’s Museum & Library facility. That time we walked away with mutually agreed upon new home design guidance, nearly three dozen Business Development Managers (‘BDM’) named by attending manufacturers, and eventually the aforementioned Community Series Home (‘CSH’) concept.

A third NSAC caucus in the works? Yes. The ‘need to caucus’ has been around now, for almost a year. This Fall, an increasing number of LLCommunity owners/operators have asked to caucus, on their own, to ‘Look at Self – finance From Their Perspective, as Investors and LLCommunity Owners’, and NOT just as a ‘stop gap measure’ to tide them over until chattel (personal property) finance returns to manufactured housing. The plan to caucus, for a third time in four years, got a boost at the recent National Communities Council (‘NCC’) meeting in Denver, CO., where it was opined LLCommunity owners/operators should meet again before the next scheduled MHI meeting in March of 2011. SO, if you’re a LLCommunity owner/operator, watch your mail during the weeks ahead, for an Invitation to Join Your Peers at the Third NSAC Caucus, sometime in late January or early February, likely in a Sunbelt state, hopefully on – site in a LLCommunity. To ensure you’re not overlooked, respond directly to this blog posting, phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764, or write GFA c/o Box # 47024, Indianapolis, IN. 46247. Or call (317) 346-7156 or email: gfa7156@aol.com

V.

Finally. I’m in the midst of consolidating data from 100 ALLEN REPORT questionnaires, preparing the 22nd annual edition. If you’re a portfolio owner/operator of LLCommunities and NOT returned your completed questionnaire, please do so this week! FAX it to (317) 346-7158. Some very interesting stats so far; so don’t be left out…send in your information TODAY. Thanks. GFA

*****

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
(3170 346-7156

So Obvious An Answer is Rarely So Ignored & Misunderstood!

Manufactured Housing & Landlease Community Asset Class’ answer to:

Worst Case Housing Needs 2007: A Report to Congress – the U.S. Department of Housing & Urban Development’s (‘HUD’) office of Policy Development & Research (‘PD&R’) most recent biennial report.

I.
‘
But first, feedback from blog readers, responding to last week’s posting: ‘Time for a Change?’ Subtitled: ‘Days of the hammer & velvet glove may be over!’ It’s encouraging many in the MHIndustry & LLCommunity asset class, take time to read and respond to stimulating exposes and issue discussions. Here’s a typical response, received this week: “Great blog. Once again, the nail hits the head. This effort will need all the industry. The challenge is to convince the ‘egos’ they all need each other!” N

If you missed last week’s description of “…the independent initiative, outside MHI and MHARR political circles, to unify, influence, and improve how manufactured housing interacts with federal regulators (of the industry) in Washington, DC.” scroll back into the blog archive at this website, to learn what’s really going on ‘within & without’ the manufactured housing industry these days. Frankly; if you’re a stakeholder (i.e. entrepreneur or corporate business owner) YOU owe it to yourself, your employees, your peers, and your customers, to KNOW what’s affecting your business model and plan! No one else is going to tell you so clearly, what’ going on….

II.

“Nearly 6 million households experienced worst case (housing) needs in 2007. This is an 18 percent increase from 2001, when only 5 million households faced this difficulty.” Now imagine how this 6 million households figure will swell, when year 2008’s housing trauma is written into HUD’s PD&R report Worst Case Housing Needs 2009, when it debuts during 2011! But back to the 2007 report. Here’re highlights quoted in RESEARCHWORKS, an online newsletter from HUD’s PD&R:

• 93 percent have severe rent burdens, the primary cause of worst case needs

• 73 percent have extremely low incomes

• 37 percent were families with children, 20 percent were elderly, 10 percent were non – elderly disabled, and 32 percent were ‘other’.

• Almost half of households with children had full – time employment

• 49 percent were non – Hispanic white; 21 percent were Hispanic; and 23 percent were non – Hispanic black

“The (PD&R report) study found the availability of housing stock across the nation is insufficient for the lowest income groups. For every 100 extremely low income households, there were only 76 affordable rental units available (those costing 30% or less of a household’s income). This lack of affordable and available rental units and severe rent burdens are the largest barriers to families experiencing worst case housing needs.”

OK, the ‘affordable housing’ problem (challenge or opportunity) has been clearly described in the previous paragraphs. Is there a practical, present day solution to ‘insufficient housing stock, across the nation, for low income groups’? Sure. There are several, if bureaucrats will take off their blinders (to practical, present day solutions) and look beyond their minions and lobbyists inside the Washington beltway. One of these has to do with HUD Code manufactured housing, in tandem with landlease (nee manufactured home) communities in suburban and rural areas of this country.

Clarification. Most discussions about use of new and resale manufactured homes, in tandem with landlease communities (‘LLCommunities’) in urban environments, will be moot. Low project density (e.g. five or so houses per acre) preclude use of this type subdivided or landlease property on high value realty, unless local housing market conditions prevail and homeowner subsidies are rampant. However, replacing derelict housing units, with compatibly – designed manufactured homes, can work economically; but usually on a case by case basis.

Setting land cost aside for the moment, know that HUD Code manufactured homes in year 2008 (latest year for this type statistic), on the average (among singlesection & multisection models) cost $41.34 per square foot, to fabricate in a factory, compared to stick – built homes, at the time, averaging $88.55 per square foot, erected on – site. It’s as simple and significant a $$$ difference as that, where housing construction cost is concerned! One wonders, why HUD doesn’t do more to promote this affordable housing alternative, especially since it’s been tasked with regulating the manufactured housing industry for more than 35 years(?)

Now, mate that ‘half price’, attractive, non – subsidized, quality, energy efficient, ‘green’, transportable home to a vacant rental homesite within a professionally – managed, well – located, LLCommunity, charging a fair, local housing market – sensitive site rent, and one has the potential of a WIN – WIN situation for the aforementioned low income group of U.S. homebuying/site lessee citizens! Here’s how…

The first WIN. Price of the home. Like most consumer product choices, there’s the opportunity to buy ‘top of the line’ (i.e. larger, fancier, most expensive home), mid price range, or economically (i.e. smaller, basic, least expensive home), depending on one’s annual personal or household income level, a.k.a. Annual Gross Income or AGI. The goal here is to keep monthly housing cost (i.e. PITI & utilities; or loan principal & interest, taxes & insurance premiums, as well as utility payments) in sync at 30+/- percent of one’s annual personal or household income level. Examples to follow.

The second WIN. Amount of site rent. Here too, consumers (homebuyers) will find ranges, oft but not always, based on landlease property location, features, amenities, and local housing market conditions (e.g. Area Median Income or AMI per local housing market postal zip code via zipskinny.com), as well as economic factors of supply and demand. The goal is to find a site and rent rate that melds with housing unit cost in an affordable fashion. Definition and examples to follow.

How can low income folk achieve this WIN – WIN proposition? The process involves knowledge (Think AGI and or AMI); a measure of affordability (i.e. In following examples, a 30% Household Expense Factor or HEF); a decision (i.e. Whether to use 75% or 100% of Household Expense Factor to pay P&I & site rent); amount of monthly site rent (When home is in a LLCommunity); and, home mortgage terms (e.g. payment, interest, term, loan amount) or monthly rental amount for the home per se (In addition to site rent).

Example. Given an AGI or AMI of $36,000; using a 30% HEF; with monthly site rent at $333.; and chattel mortgage terms @ 9.5% interest & 20 year term.

30% HEF of AGI/AMI’s $36,000 is $10,800; and, 75% of this amount, is dedicated to P&I + site rent @ $8,100/year (Balance of that amount to cover T&I, as well as household utility costs). $8,100 converted to monthly amount of $675; this covers $333 in site rent and $342 towards P&I of home mortgage. Applying 9.5% interest & 20 year loan terms, with $342 P&I payment, the maximum ‘affordable’ mortgage would be $35,690. Assuming a 10% down payment, this ups the maximum ‘affordable’ home purchase price to $40,767 or rounded, to $41,000. (See end note # 1 for worksheet)

OR

Use 100% (vs. 75%) of HEF for P&I + site rent. Then, ‘running the numbers’, jumps the maximum home purchase price to a riskier $68,000. Why risky? Utility bills, factored into the initial calculation (i.e. residual 25% of HEF), but separated out here, still must be be paid – but outside the inclusive monthly payment calculation.

Bottom line? Depending on the nature and peculiarities of suburban or rural local housing markets, and presence (or not) of landlease (nee manufactured home) communities, it’s entirely possible (Happens all the time!) for someone, or a household, earning just $36,000/year, to buy a new or resale manufactured home priced between $41,000 and $68,000, where the site rent is approximately $333/month. There’s not a subsidized rent dollar in that mix! This everyday reality check ‘flies in the face’ of HUD’s PD&R report that “…found the availability of housing stock across the nation is insufficient for the lowest income groups.” Obviously Not True, according to these metrics! Is it possible someone (Everyone at HUD) simply isn’t looking within their regulatory milieu for practical answers? YES! Let’s watch, to see if anyone there, takes notice of this expose’ and initiates affirmative action to address their posit: “…lack of affordable and available rental units (being) the largest barriers to families experiencing worst case housing needs.”

III.

Either the MHIndustry is stirring, preparing to rise Phoenix – like, during year 2011, or what? Given stirring, timely and motivating keynote presentations by industry leaders Randy Rowe and Dick Ernst, during the Networking Roundtable in September; and, with encouraging announcements, earlier this month at MHI’s annual meeting, about budgeting for outside lobbyists in 2011, plus hiring a new executive to head the National Communities Council (‘NCC’) division, it’s easy to wax positive for a change.

And when you add – in, this week’s meeting of the Urban Land Institute’s Manufactured Housing Communities Council (‘MHCC’), our industry’s de facto Think Tank, in Washington, DC., well – Anything Can Be About to Happen! Then, the following week, there’ll be a class of 25 professional property managers trained and certified in Salt Lake City, Utah, by ROC-USA; followed by a day long (chattel) Finance Seminar in Springfield, IL., facilitated by IMHA.

Need more positive indicators? How ‘bout the reconstituted Louisville Manufactured Housing Show, 13 & 14 January 2011? Bet you didn’t know there will be dozens of new homes, including Community Series Homes, on display there. If you’d like to display, as a home manufacturer, or supplier (Like me; I’ll be there!), simply phone (770) 587-3350 and talk to Dennis Hill, show coordinator. And that’s not all! On the 13th, there’ll be three sequential 45 minute seminars on these three timely topics:

• Given an individual’s AGI, and or local housing market’s AMI (See preceding paragraphs for descriptions), How YOU calculate maximum ‘affordable’ & ‘risky’ sale prices for new & resale, privately – owned homes of any type, sited on realty owned fee simple with home, or leased. What every manufacturer’s rep should know how to teach YOU, as a MHRetailer or selling homes on – site!

• Community Series Homes. Their genesis, definition and description, who manufactures them for in – LLCommunity siting, and how YOU can properly meld them into any local living environment.

• All YOU ever wanted to know about property owner or self – finance of new & resale home transactions on – site in LLCommunities; particularly, the differences between ‘captive finance’ and ‘buy here – pay here’ methodologies.

And, there’s more to come, after the Louisville Manufactured Housing Show! Read about those opportunities here, in future weekly blog postings. A hint. We’ve already told you about the possibility of Grand ‘Once & For All! Tours coming to your area in 2011.

But have you heard about the possibility of a third National State of the Asset Class (‘NSAC’) caucus, in Florida during late January or early February? Many LLCommunity owners/operators have requested a 1 ½ day program, to examine and discuss ‘property owner or self – finance, of new & resale home transactions on – site’ from their stakeholder perspective. Why? Three reasons. First, to learn more about the process alternatives, pro & con; second, to identify ticklish aspects of the process (e.g. regulatory issues, raising capital, selling – off paper, etc.); and third, the possibility this ‘new business model’ will alter the face of chattel finance for years to come, if not permanently.

Now, if all this, as they say, ‘floats your boat’, as a LLCommunity owner/operator, let me know during the next few weeks! No significant response = no 3rd NSAC caucus; however, much response = a 3rd NSAC caucus, ‘by invitation only’, this Winter, and somewhere in Florida, preferably on – site in a LLCommunity! Respond to this blog directly, via email, or phone the MHIndustry HOTLINE: (877) MFD-HSNG or 533- 4764 or (317) 346-7156. Use the same means to respond to matters covered in this blog posting as well!

End Note:

1. For a free copy of the widely – used ‘Ah Ha! & Uh Oh!’ worksheet that “…estimates recommended ‘affordable’ & ‘risky’ purchase prices for new & resale, privately – owned homes of any type, sited on realty owned fee simple with home, or leased!”, phone the MHIndustry HOTLINE: (877)MFD-HSNG or 633-4764, or respond directly to this blog posting via this community-investor.com website.

***

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

Time for a Change? MHIndustry Budgets for a Contract Lobbyist!

Or, to put it another way: ‘Days of the hammer & velvet glove may be over.’

Disclaimer. In no way should you read what follows as a clarion or veiled call, to form a new, unified, national manufactured housing trade advocacy body. The intent is simply to describe an active, independent effort to unify, influence and improve how manufactured housing interacts with federal regulators (of the industry) in Washington, DC. GFA

As a directly related aside, last week’s blog posting at this website, titled: ‘AFTERGLOW & ‘MH to Learn from RV Industry?’’ introduced Randy Rowe’s succinct ‘Five Part Market Share Recovery Plan for Manufactured Housing Industry & the Landlease community Real Estate Asset Class!’ Scroll back thru this website’s blog archive to reread it; or, request a free copy of the summary treatise, enclosed as a lagniappe with the October issue of the Allen Letter professional journal.*1 It relates to…

This week’s blog focus is the direct result of conversations heard, & plans shared last week, at Manufactured Housing Institute’s (‘MHI’) annual meeting in Denver, CO. But first some numbers; then a brief historical perspective; finally, the guts of the issue.

If you’re a longtime MHI member, and recall hundreds of manufactured housing aficionados in attendance at past annual meetings, you’ll be shocked to learn this year’s event saw just 91 names on the 26 – 28 September registration roster. Deduct 17 state MHAssociation execs, and four more to account for invited speakers and no – shows (Have no idea how many last minute sign-ups and ‘crashers’ were present, but I did see a couple of the latter), one is left with but 70 businessmen and women, from 21 states, in attendance at this year’s annual business meeting.

Unless you’ve been ostrich-like during the past four months, you’ve certainly heard or read of the independent initiative, outside MHI and MHARR (‘Manufactured Housing Association for Regulatory Reform’) political circles, to unify, influence and improve how manufactured housing interacts with federal regulators (of the industry) in Washington, DC. The initiative was birthed during telephone conference calls among state MHAssociation execs, and made public during the Manufactured Housing Executive Council (‘MHEC’) meeting in June in Washington, DC. The matter was reported on, in this weekly blog posting, shortly thereafter. Who comprises the active, independent initiative today? An increasing number of HUD Code home manufacturers ‘from both camps’, some MHRetailers, several state MHAssociaiton execs, and more….
Their gripe? As it’s been explained to this industry and asset class observer, dissatisfaction with the (lack of) results per heavy – handed (Some say ‘hammering’), ultimately self – defeating dealings with federal regulators in one corner of the manufactured housing industry; and, dissatisfaction with the (lack of) results using velvet glove (Some say ‘consensus – building’) defeatist dealings with federal regulators, from another corner of our national advocacy presence. And those disparate tactics have oft led to industry disunity, a suicidal condition regularly exploited by the very federal regulators targeted, to influence and improve the regulatory climate suffered by HUD Code manufactured housing producers! Proof? The Manufactured Housing Improvement Act of 2000; not fully implemented to this day, more than a decade after its’ enthusiastic passage by Congress!

Will the active, independent initiative spread and grow? Too early to tell, but the bellwether indicator is and will continue to be, the amount(s) of money raised to support this regulatory focus; then identify and hire the right contract lobbyist to markedly unify, influence and improve how manufactured housing interacts with federal regulators (of the industry) in Washington, DC. Already, MHI has budgeted more than $120,000.00 to this end, during 2011. (But has it really? At MHI’s board meeting last week, their $120,000.00 foci priority was entirely legislative, not regulatory! See *2 for details). On the other (i.e. regulatory issues initiative) hand, HUD Code manufacturers have stepped up to the funds plate; several states have pledged financial support; and two well – regarded Washington, DC consulting groups have responded, in writing, to a Request for Proposal distributed after MHI’s (MHEC) meeting during June 2010. Bottom line? Apparently, two different war chests in the making….

Again, MHI’s $120,000.00 apparently earmarked for legislative issues; and the necessity, for a like or greater amount to be raised, via independent initiative proponents, to address manufactured housing’s perennial regulatory issues….

Want to learn more about the independent initiative; maybe even donate to the cause? Telephone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 and be put in touch with the appropriate ‘movers and shakers’ leading it. At the same time, if a direct dues – paying member of MHI and or MHARR, encourage elected and salaried leadership to unite their respective efforts, to markedly influence and improve their interaction with legislators and federal regulators (of the manufactured housing industry) in Washington, DC! In the meantime, continue to read this blog posting every week, to stay abreast of further developments as they occur….

Postscript.

See anything missing from this Time for a Change discussion? How ‘bout the landlease (nee manufactured home) community real estate asset class; you know, one of those dratted (in some folks’ mind) post production (nee aftermarket) segments of the HUD Code manufactured housing industry. It’s interesting to ponder why the most prosperous segment of the manufactured housing industry – at this time, is all but omitted from heady discussions when manufacturing/distribution segments of the industry (not realty asset class) are engaged. Suppose part of the reason is historical precedent. After all, how often is it that the perceived ‘tail of the dog’ is in a position to wag the dog? Furthermore; in year 2011, as MHI celebrates its’ 75th anniversary, the robust NCC division of MHI is only 15 years young – but growing.

But moving right along, and continuing with the dog metaphor; do we, as a realty asset class, even have ‘a dog in this hunt’? Of course we do, in a big picture way. Here’re two (regulatory) examples: implementation of the aforementioned MHI @ 2000 Act and home installation. In the first instance, once MHIA @ 2000 is fully implemented, segueing our affordable shelter product from ‘trailer stigma’ to full – fledged ‘housing status’, we’ll see our struggle for parity realized – opening marketing avenues along the way! And, we owe it to ourselves, as landlease community (‘LLCommunity’) owners/operators, to remain fully engaged in the regulatory processes, to ensure safe and secure, but not unduly expensive, installation regulations relative to manufactured homes sited in and outside our unique income – producing properties.

And yes, we certainly do also have a strong and abiding interest in legislative matters potentially affecting our realty asset class, like those listed in end note # 2 following.

End Notes.

1. Free copy: Allen Letter professional journal, and Mr. Rowe’s summary treatise available, by phoning MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

2. Dodd-Frank Wall Street Reform Bill; S.A.F.E. Act – related legislation; housing finance programs; ‘duty to serve’ tax reform; and, energy matters.

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

AFTERGLOW, & ‘MH to Learn From RV Industry?’

Networking Roundtable’s Keynote Challenge to the Manufactured Housing Industry, is echoed the same week, to the RV Industry, in Woodall’s Campground Management newspaper!

I.

‘Ah, one has to enjoy the afterglow following a successful annual national venue like the recently concluded 19th annual International Networking Roundtable (‘INR’)!’ But where to start? With the two beautiful singlesection Community Series Homes (‘CSH’) displayed by CAVCO Industries and Champion Homes? How ‘bout the two dozen landlease (nee manufactured home) communities offered For Sale by Marcus & Millichap? Or the nearly two dozen top notch presenters holding forth on as many cutting edge and timely topics? For many of us, it was Randy Rowe’s stirring keynote challenge to the manufactured housing industry, identifying Five Foci, required of us, to regain national housing market share – especially the ‘ins & outs’ of chattel (personal property) financing described by Dick Ernst, ManageAmerica/Origen executives, and Ken Rishel of PCA. To learn the entire story, about this year’s stellar Roundtable event, complete with housing supplier, realty, and speaker contact information, read the two lagniappes accompanying the October issue of the Allen Letter professional journal. To subscribe, phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 ($134.95/year)

How do others feel about this year’s Roundtable event? This letter from one of the attendees: “By now, you must be inundated with kudos re: the INR, but I need to add mine. What a pleasure it was to hear serious folk addressing serious concerns with what I thought may actually include a glint of resolve to follow –up their words with action. Frankly, I was surprised. (And) the absence of so many of the ‘old guard’ would, I assumed, cause a bit of a drop – off in the level of excitement, but the opposite happened! The ‘new guard’ showed enthusiasm and a healthy dose of humility by having the courage to ask great questions, and keep the dialogue moving.” PF (emphasis added)

A word about the last two sentences in the previous paragraph. We noticed this change in patronage as we processed registrations prior to the INR. While a dozen or more ‘roundtable regulars’ were absent this year, there was double that number of ‘first time attendees’. And while Thayer Long, of MHI, was the sole executive in attendance, from any of the national advocacy and trade bodies (Think MHARR, the NCC, and ULI’s MHCC & IREM), besides having participants from 26 states, we also documented no fewer than 20 second generation LLCommunity owners/operators! Another interesting demographic was the presence of so many MH and real estate specialists, e.g. 12 Business Development Managers (‘BDM’) from HUD Code home manufacturers; 10 Manufactured Housing Managers (‘MHM’), four Certified Property Managers (‘CPM’), and two Members, Appraisal Institute (‘MAI’) realty appraisers.

II.

And then there was this pithy and timely feature article headline in the September 2010 issue of Woodall’s Campground Management newspaper, page # 6:

2010 RVDA Convention/Expo Comes at a Delicate Point in Time for North America’s RV Industry. The subtitle proclaimed: “There is a consensus we have to recalibrate our definition of what is a good business environment,” said Mike Molino, president of the Fairfax, VA. – based Recreation Vehicle Dealers Association (RVDA), lead sponsor of October’s annual Con/Expo, “We’re not going to get back to the 400,000 – unit years any time soon.” (emphasis added) GFA

It was that last sentence that got me thinking; probably because I’ve heard similar sentiments expressed throughout the MHIndustry during the past couple years. Indeed, a rewrite of said headline and subtitle, per HUD Code manufactured housing, might read thusly:

2010 Manufactured Housing Institute’s Annual Meeting (9/27 & 28) Comes at a Delicate Point in Time for North America’s MH Industry. “We’re not going to get back to the 500,000 shipment years any time soon – if ever.” (emphasis added) GFA

Here’re excerpts from the above – referenced RV article; all of which appear to apply equally well to MHIndustry aficionados – YOU and me:

“…the aftershocks of the Great Recession are obviously still apparent in terms of unemployment, stock market fluctuations, and a general discomfort among many Americans, with regard to the general state of the economy.”

“…many of the nation’s durable good (sic) manufacturers – including RV builders – are still looking to bridge their way to the next year and the next level of recovery, and to find a comfort zone in this new post – recessionary age.”

“We’re not going to get back to the 400,000 – unit years any time soon. We’ll probably never return to that. The next couple of years will be tough, but doable. If dealers stay within the cash structure they have, they will survive. The consumer will come back – slowly. We won’t see a significant increase (in sales) until there is more certainty (about the state of the economy). I’m not so sure the election of 2010 will bring more certainty. That might just bring more confusion.”

Bottom line for us in the MHIndustry? The previous paragraph could well have been penned for the HUD Code manufactured housing industry as well! So, it’s high time we take insightful and proven leaders, like Randy Rowe, seriously. If YOU haven’t heard (at last week’s Roundtable) or read his Five Foci, in detail, YOU need to do so! Copies of his pithy and timely presentation will be distributed at MHI’s annual meeting in Denver, CO., and further be available as a lagniappe, in the October issue of the Allen Letter professional journal. If YOU care enough about the MHIndustry and its’ LLCommunity asset class counter part, you’ll make the extra effort to obtain said document, read it carefully, take it to heart, and act on it – the sooner the better!

III.

There are at least three October MHIndustry venues where YOU can make your views, on this Survival of the Fittest Topic (Reread part II of this blog posting!) known, and encourage appropriate (e.g. National Image Improvement & Branding Campaign) ACTION:

First, the Urban Land Institute’s Manufactured Housing Communities Council (‘MHCC’) convenes 13 October 2010, in downtown Washington, DC. This is our industry and asset class de facto Think Tank. A few dozen of the industry and asset class’ top leaders and thinkers will be present. To participate, phone Kenneth Lipschutz via (248) 645-1077 or KenL@BrooksideCommunities.com And if you missed Dr. David Funk’s (Real Estate Program head at Cornell University) ‘MH Demographics’ address at last week’s Roundtable, he’ll be repeating it for this audience!

Second; the Illinois Manufactured Housing Association (‘IMHA’) is hosting a one day Finance Seminar Program on 21 October in Springfield, IL. For details, phone Bob Thieman @ (217) 528-3423 or bthieman@imha.org If, as a LLCommunity owner/operator, YOU sell and self – finance new and resale home transactions on – site in your properties, YOU need to be present to learn the basics and fine points of this heady, and increasingly harrowing process! Heard of the exciting ‘Ah Ha! & Uh Oh!’ worksheet for calculating ‘affordable’ and ‘risky’ home prices, and monthly payment schedules, for new and resale homes sold in and outside LLCommunities? If not, you can’t afford ‘not to be present’ when this material is distributed and taught by the author.

Third; the Mid – Atlantic States Convention occurs 26 & 27 October 2010 in Albany, NY. While anyone ‘in the MHBusiness’ can attend, it’s primarily intended for MHIndsutry & LLCommunity folk from NY, NJ, PA, DE & MD. For information, phone (800) 721-HOME or info@nyhousing.org Word has it, HUD Secretary Shaun Donovan has been invited as a keynote presenter. Now there’s a potential opportunity to solicit HUD’s support for manufactured housing as this nation’s premier form of truly affordable, non – subsidized, quality, energy – efficient, attractive, transportable housing!
Will YOU be present?

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

‘SHOTGUNS & PICKUP TRUCKS’

19th Networking Roundtable Dishes Out Tough Love, $20 bills for $10 bills, and Much Much More! Also; researching the ALLEN REPORT, & another National State of the Asset Class (‘NSAC’) Caucus Is Coming Your Way….

I.

Facing a record number of landlease (nee manufactured home) community owners/operators from 26 states, and following the Pledge of Allegiance to the American flag, then individual introductions of nearly 200 attendees, Green Courte Partners founder and chairman Randy Rowe took the floor to dish out five specific courses of tough love to the HUD Code manufactured housing industry!

The theme of his presentation? ‘What the Manufactured Housing Industry Must Do to Regain National Housing Market Share’. This is Randy’s five point foci:

Better Warranties and Customer Service

Chattel Financing Issues

Economic Security for Our Customers

Multiple Listing Service(s)

National Marketing (Image) Effort

For a detailed presentation of Randy Rowe’s timely and sobering talk; along with a topic by topic, and speaker by speaker review of all two dozen subjects at this year’s Networking Roundtable in Phoenix, AZ., read the October issue of the Allen Letter professional journal. Therein you’ll also learn, how one firm freely exchanged $20 bills for $10 bills as part of their water sub metering presentation; and, why demographers characterize a portion of our market as being ‘shotgun and pickup truck’ customers.

In the meantime, here’s a sampling of email remarks (slightly edited for this blog) that awaited me when I returned home from Phoenix on Saturday:

“While many attendees of (past) Roundtables have been the ‘big boys’ in our asset class, a shift occurred this year, wherein the event attracted far more ‘Mom & Pop’ operators (owning 10 LLCommunities or less) than ever before.” SR (And) “The addition of Dr. David Funk, from Cornell University, was excellent and classy. Too bad more of the big operators were not there to listen!” KR. ‘That’s OK’; David will be repeating this attention – grabbing Manufactured Housing Demographics presentation to attendees at the ULI’s Manufactured Housing Communities Council (‘MHCC’) meeting in Washington, DC., on 13 October. To participate, phone Ken Lipschutz @ (248) 645-1077.

FYI. Dates of the 20th anniversary International Networking Roundtable are 14 – 16 September. Where? Well, that’s still TBA (to be announced). But, if you missed last week’s stellar event, own one or more LLCommunities, and want to be invited to next year’s Roundtable, phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633- 4764.

II.

‘Under Construction’ aptly describes the present status of the 22nd annual ALLEN REPORT (a.k.a. ‘Who’s Who Among Landlease Community Portfolio Owners/operators Throughout North America!’). AR questionnaires were mailed to 650 known portfolio ‘players’ last week. If you own/operate five or more LLCommunities and or 500 rental homesites, YOU should received one of the questionnaires. If NOT, phone (317) 346-7156 immediately, and request same. If leaving a voicemail message, be sure to provide your name, address, and telephone number, for follow – up purposes. The 22nd annual ALLEN REPORT will initially be distributed with the January 2011 issue of the Allen Letter professional journal. FYI. The ALLEN REPORT retails for $250.00 per copy, but is FREE to subscribers to the above – referenced business newsletter. So, subscribe today for $134.95.

III.

Are YOU struggling to decide how to maneuver through the chattel (personal property) housing finance compliance and regulatory morass, especially where (property) owner – assisted (a.k.a. ‘captive finance’) lending is concerned? Well, there’s immediate assistance on the horizon, to that end; and maybe a national venue in January 2011.

In the first instance, if this is a timely and strategic personal or corporate concern, plan to be in Springfield, IL., on 21 October when the Illinois Manufactured Housing Association (‘IMHA’) holds a daylong Finance Seminar. Greg O’Berry, CEO of Hometown America, and in – coming chairman of the above MHI’s National Communities Council (‘NCC’), is keynote speaker and will address: ‘State of the Manufactured Housing Industry’. In addition, there’ll be presentations by the Small Business Administration; Reasons (& How) to launch a ‘captive finance’ home loan program at your property(ies); information on Title II finance; and, How to Use the popular ‘Ah Ha! & Uh Oh! Formulae’ worksheet, for ‘Estimating maximum recommended ‘affordable’ & ‘risky’ purchase prices for new & resale, privately – owned homes of any type, sited on realty owned fee simple with home, or leased!’ – as in a LLCommunity. To register, phone IMHA via (217) 528-3423.

Preliminary plans are being made to facilitate a National State of the Asset Class (‘NSAC’) caucus type Chattel Finance Summit, in Florida during January 2011. No details yet available, but format will likely build upon the program described in the previous paragraph, with the addition of ‘Gauging the Effects of Owner – assisted Chattel Financing of Homes On – site, relative to the Value and Real Estate Lending Worthiness of Landlease Communities’. Veteran MHIndustry & LLCommunity businessmen and women will recall two previous NSAC caucuses; one on – site in a LLCommunity in Tampa during February 2008; and, the following February (2009) at the RV/MH Heritage Foundation Hall of Fame, Library & Museum facility in Elkhart, IN. The first event attracted 100+/- LLCommunity owners/operators intent on taking control of their collective destiny in the face of plummeting manufactured housing shipments. The second event attracted 100+/- LLCommunity folk and HUD Code home manufacturers who spent a day discussing design requirements for what is now commonly known as Community Series Homes (‘CSH’) – two of these were on display at last week’s Networking Roundtable in Phoenix! – and three dozen Business Development Managers (‘BDM’) were named to increase HUD Code home sales throughout the asset class nationally. This time around? Simple! Make sense of the chattel finance scene as it ‘plays out’ in early 2011; and teach those present how to go about properly originating home loans on – site; keeping them in compliance; how to package loans For Sale when new capital is needed; etc. If YOU want to be kept abreast of this developing opportunity, respond directly to this blog posting, or phone the aforementioned MHIndustry HOTLINE.

IV

Another important FYI. If an NCC member (i.e. of MHI’s National Communities Council division), plan to be present at the institute’s annual meeting in Denver, CO. @ 26 – 28 September! Among other reasons, you’ll learn of plans, once MHI’s budget is approved for 2011, to recruit and hire a new executive to administer the LLCommunities’ council! The NCC was launched in January 1996, has been served by at least four dedicated executives in the interim, but with none for the past year and a half. Be present for this historic step, in the soon to be 11 year history, of your advocacy body in Washington, DC. Haven’t become a direct member of the NCC yet? Phone Thayer Long @ (703) 558-0678.

***
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

Responses, Observations, & a Reintroduction…

‘Best Kept Affordable Housing Secret’ evokes your response; ‘Networking Roundtable’ awash in idiosyncrasies, & the Grand ‘Once & For All’ Tour!

I
“Great; you nailed it, George. If the good guys/gals want to win, they must solve the (manufactured housing) perception and financing (issues). Let’s watch to see if they have the belief and commitment ‘to go for it all’, putting their money where their mouth is!” NB (lightly edited. GFA) And this: “Loved the KIA point in your blog, wouldn’t have thought of it that way…Lots of important points, thanks for putting them out there. (Here’s my) multi – pronged suggestion: 1) support Manufactured Housing Institute (‘MHI’), 2) Strengthen that advocacy body, enabling it to move the MHIndustry ahead, (if necessary) under new robust leadership and supported by advisors and members; and, 3) Address the conspiracy theory(ies) once and for all – which I too hear about in discussions.” TK

If you didn’t read last week’s blog posting, titled: ‘Best Kept Affordable Housing Secret in the U.S.!’, you owe it to yourself to go back and do so! Why? Because frankly, ‘That’s where we are today’, and we’re not gonna go anywhere forward anytime soon, towards increased new manufactured home ‘shipments’ (Pains me to pen that, when I/we should be talking in terms of home ‘sales’), until we collectively address the reasons and issues identified in that blog posting!

Know what? I laid some bait out there, in that blog posting, to see if anyone would take and run with it. No one did. The bait? A ‘silver bullet’ I opined would heal manufactured housing’s decade long illness: “Debut an effective, charismatic, focused national leader (I can think of one!) and leadership cadre….” No readers asked who I had/have in mind. Either, as an industry, we don’t really care to be healed, or don’t believe anyone is up to the admittedly Herculean task; so we don’t care to know who this savior might or have been. Don’t bother to ask now; I’m not talking. But will tell you this; that person knows….

II

As a related aside; in an effort to trim down several hundred specific BEBAs (‘Blast Email Blog Alert) we’ve been sending each week, as this blog is posted, I asked addressees to ‘opt in’ or ‘opt out’ of receiving future notices. Here’re initial results during first five days:

67 individuals ‘opted in’ to receive future BEBAs of postings to this website. And responses continue to arrive daily. Have YOU ‘opted in’? To do so, simply respond to this blog posting, that you ‘opt in’. To ‘opt out’, do nothing….

Of the 67 ‘opt ins’ received to date, 33 have been from LLCommunity owners/operators, 14 from suppliers of products and services, four MHRetailers, four association executives, and three each from HUD Code manufacturers, lenders, real estate brokers, and trade publishers. Goal? 100 – 200 seriously interested individuals; folk, from all segments of the industry who truly care about the present and future health of HUD Code manufactured housing and the landlease community real estate asset class!

III.

As you likely know, the 19th International Networking Roundtable occurs this week (15 – 17 September) in Phoenix, AZ. Truly hope to see YOU there! Expecting 200+/- manufactured housing aficionados and landlease (nee manufactured home) community owners/operators from throughout North America! It’s almost too late for you to participate, but you can ‘try’ by phoning (317) 346-7156 and leaving a message, telling me you’ll see me at the Pointe Hilton Tapatio Cliffs Resort Hotel, or read on….

OK, so what are some of the idiosyncratic characteristic individuals and firms registered to attend this year’s Roundtable?

Topping the speaker list this year is Randy Rowe, founder and chairman of Green Courte Partners in Illinois; and with David Lentz, owner/operator of American Land Lease (a former REIT) in Florida. Randy was the executive who took Sam Zell’s then MHC, Inc. (now ELS, Inc.) public, as a REIT, during the early 1990s; and subsequent to that, founded Hometown America! Who better to ‘splain’ to 200+/- Roundtable attendees, ‘What it is we must do, as an industry and asset class, to reclaim our national housing market share?’ You can be sure this will be a max attendance presentation.

No fewer than eight Business Development Managers (‘BDM’), representing four HUD Code manufactured housing producers: CAVCO Industries & Fleetwood Homes, Champion Homes, and Adventure Homes! Where’re the others? You’ll have to ask them, but one would think they’d jump at marketing their Community Series Homes (‘CSH’) to LLCommunity owners/operators needing houses. Call it a missed opportunity…

Of course, something similar might be said of the Big Four + One, third party lenders still originating chattel (personal property) loans on manufactured homes. 21st Mortgage Corporation and CU Factory Built Lending are to be present; but not the other three. Is it any wonder so much (property) owner financing occurs these days?

And indirectly related to the previous observation, there’ll be at least two, maybe three, seasoned financial services and consulting firms who’re now carrying, what appears to be, the lion’s share of chattel home loan origination, servicing, and sale of ‘paper’, throughout the LLCommunity real estate asset class. May even learn, for the first time, of a quiet plan and practice, to restore positive traction to chattel lending on Wall Street!

While majority of attendees are bona fide LLCommunity owners/operators, they’re an eclectic mix of veteran portfolio firms, a few would be ‘players’, several newbie companies, even a ‘shared equity’ conversion specialist.

For the first time in a long time, every publishing segment of the manufactured housing and landlease community print and online trade press will be represented at a major MHIndustry event! Even the publisher of Rental Property Reporter plans to be present. All must be expecting timely and pithy trade news to report!

An especially exciting addition to this year’s program is Dr. David Funk, chairman of Cornell University’s Graduate Real Estate Program. This is the first authentic academic presentation, on demographics and manufactured housing, in a long long time. Hope MHI and other trade groups take notice….

Once again, interested LLCommunity owners/operators will convene, off – agenda, and during one seminar offering, to learn and discuss merits and challenges of forming their own ‘captive insurance’ firm during year 2011. More than a dozen owners/operators are committed to meet and plan the debut of this new business entity.

Did previous eight paragraphs stimulate a passionate desire to attend this seminal annual event, even at the last minute? That’s OK. Show up at the Pointe Hilton, Tapatio Cliffs, Phoenix, AZ. (11111 North 7th Street), the morning of Thursday, 16 September, with $450.00 registration fee, for LLCommunity folk; and $1,000.00 for Service Providers (e.g. lenders, manufacturers, product and service vendors). Check – in with Roundtable coordinator, Susan McCarty, of CommunityInvestor!

If unable to attend the Roundtable, but would like a detailed description of what happened, who presented, and what they said; read the October 2010 issue of the Allen Letter professional journal! (317) 346-7156 to subscribe @ $134.95/yr.

IV

A few months ago I introduced you to the concept of a Grand ‘Once & For All!’ Tour of seven regions across the U.S.. Well, I’ve been too busy, readying for the Roundtable, and getting Official Questionnaires into the mail for this year’s ALLEN REPORT, to spend time developing this concept. So let’s look at the basics again….

These seven regional 1 ½ day gatherings will be open to anyone in the MHIndustry and LLCommunity asset class interested in industry advocacy unity, personal and corporate positive motivation, practical education relative to timely and strategic topics, and improved print and online communication among all segments.

At this point in time, we’re looking at Grand ‘Once & For All! Tour stops in New England, the Mid – Atlantic, South, West, Pacific Northwest, Upper Midwest, and Lower Midwest (not necessarily in that order), during January, February, May, June, July, August, and October or early November 2011.

There’s much more to be said about the wisdom and practicality of planning, hosting, and effecting a series of geographic industry and asset class gatherings during 2011. The point in bringing the matter up in this particular blog posting, is to identify volunteers throughout the U.S., within the MHIndustry & LLCommunity ‘family’, who’d be willing to work with me to bring this unifying, motivating, educational, communication – enabling series of events to your/their area! To do so, respond directly to this blog, phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764,or call (317) 346-7156 or email: gfa7156@aol.com Need to hear from you on or before 1 October 2010, when planning begins in earnest for this Grand ‘Once & For All!’ Tour.

V.

FLASH! The official questionnaires used to research and prepare the 22nd annual ALLEN REPORT (a.k.a. ‘Who’s Who Among Landlease Community Portfolio Owners/operators in North America!’) are being mailed to 500+/- portfolio owners/operators this week, the second full week of September. Responses are due back to GFA Management, Inc., on or before 30 September, to be included in the final report, which will be enclosed as a lagniappe in the January 2011 issue of the Allen Letter professional journal. If you own/operate five or more LLCommunities and or 500 or more rental homesites, but have not received this questionnaire, call (317) 346-7156 to obtain same.

VI

Since many of you apparently didn’t realize (per your correspondence) the acronym KIA, now an automobile brand name, has – for decades, also meant ‘Killed In Action’ (as in military combat), how many of you know the alternative meanings of these popular abbreviations: NFL & USMC? In the first instance, locker room slang among professional football players, renders it ‘Not For Long’; a rueful commentary on careers oft cut short by injury. And among U.S. Marines, there at least three alternative renderings: ‘Uncle Sam’s Misguided Children’ (Carolyn’s favorite), ‘U Saw Me Coming!’, and one other….

*****

George Allen, Realtor®, CPM®Emeritus, MHM
Box # 47024
Indianapolis, IN. 46247

Best Kept Affordable Housing Secret in the US!

Why HUD Code Manufactured Housing & Landlease (nee manufactured home) Communities Continue to be ‘Best Kept Affordable Housing Secret’

I

One person’s passion is often another’s piranha, poser, puzzle or problem! Think of KIA brand automobiles. Today, a popular consumer choice; but for combat veterans, the chilling acronym for ‘Killed In Action’! Same to be said about succulent Kobe beef. A delicacy for many diners; but a ‘not on your life’ food choice among vegetarians. Some opine a similar dichotomy for this nation’s Best Kept Affordable Housing Secret….

Think HUD Code manufactured housing and landlease communities (‘LLCommunities’)! For aficionados of quality, inexpensive (1/2 the cost, per square foot, of site – built housing!), energy efficient, non – subsidized, transportable, single family housing, certainly a valuable bargain when well bought and well – sited, on realty owned fee simple or leased. But how many American homebuyers clearly know this, and select unique factory – built housing products when in the market for a new home? Not many. Why? A half dozen reasons.

Presently, there’s a major DISTRACTION. With 4,000,000+/- foreclosed and or repossessed stick – built homes in play these days (A number that varies from week to week, and from news source to resource person), would be homebuyers will shop in that affordable pool first, before seriously considering new manufactured homes. And since there’s NO SECONDARY MARKET to effectively market and resell manufactured homes, beyond MHVillage online listings, that avenue too is a nigh non – starter! So, there’re the first two reasons why manufactured housing continues to be this nation’s Best Kept Affordable Housing Secret!

Complete lack of national product and brand PROMOTION. Automobile manufacturers regularly do this – on national TV; so do pharmaceutical firms hyping virility and PDA pills; and, a plethora of companies peddling cable and dish TV, cel phones, and other cutting edge technology. So, why doesn’t HUD Code manufactured housing follow suit – at all? In my opinion: “Because we don’t play well together” has too long been our self – defeating siren song, playing out in more ways than one. A possible tri – part solution? Debut an effective, charismatic, focused national leader (I can think of one!) and leadership cadre; collectively backed and financed by a no – longer – divided national voice; if necessary, wrought from a drastically reorganized advocacy presence. Bottom line? As long as we don’t effectively nationally promote our unique housing product and lifestyle alternative, we’ll remain this nation’s Best Kept Affordable Housing Secret!

BAD IMAGE, bad image, BAD IMAGE, bad image, BAD IMAGE, bad image! Who’s to blame for the sorry state of affairs? BAD PRESS & BAD ACTORS! In the first instance, most of the secular and business press continue to practice the bromide: ‘BAD NEWS SELLS!’ In our case, this is regularly exhibited via the press’ persistent use of archaic, negative terminology, to subliminally negate positive views one might have for manufactured housing and landlease communities. Some in our businesses fight skirmishes of this nature in various ways, e.g. One with stock postcards responding, in part: ‘Oops…you slipped! Trailers haul livestock and beer. People live in manufactured homes. No one lives in a trailer!’* What do you do? It’s going to take many more manufactured housing loyalists, doing things like this and more, to turn the press in a positive direction. Here’s a novel suggestion. Research and prepare a comprehensive MHStyle Manual to distribute to every print and online news purveyor in the U.S.! Style manuals are everyday references, generally containing a dictionary or lexicon of trade terms, as well as contact sources for industry information and statistics. And the BAD ACTORS? They take many forms. Shoddy workmanship within housing factories, shifty ‘street dealers’, unsatisfactory customer service, predatory lenders, lousy landlords, and more; all working (often unintentionally) to keep BAD IMAGE in place year after year. How to interrupt this perennial cycle? Begins with each of us in the MHBusiness; the ‘five percenters’ who genuinely care! Make a sincere commitment to personal and corporate excellence! Seriously. Get active on the state level, via your trade association, as an industry image activist and board member. And when given an opportunity, make yourself and image improvement views known on regional and national levels. Frankly, until we, as an industry and asset class, effectively address BAD PRESS & BAD ACTOR impediments, we’ll continue to languish as this nation’s Best Kept Affordable Housing Secret! Are YOU a direct member of the Manufactured Housing Institute (‘MHI’)? If not, phone (703) 558-0678 today and join!

FINANCING. This is a bona fide hiatus* at this time! Available only to the most credit worthy of would be homebuyers, and then generally on the realty – owned fee simple side of the lending house. BUT, frequently available within many, if not most, larger LLCommunities (i.e. containing more than 100 rental homesites) throughout the U.S. How so? Well, that’s another major part of this story; one that’s been thoroughly covered in previous blog postings at this website (Scroll back through archived blogs!), and will be readdressed as circumstances change and or continue to unfold. There is one perspective on this subject, however, that warrants further attention: NOT ALWAYS AFFORDABLE. And there’re two interrelated aspects of this impediment to manufactured housing and landlease communities breaking free of their ‘rep’ as this nation’s Best Kept Affordable Housing Secret! One aspect has to do with calculating the price (value) of new or resale (manufactured) homes marketed in specific local housing markets (Identified by postal zip code and referenced, as Annual Median Income or AMI at zipskinny.com) and or sold to an individual or household with a provable level of annual income (a.k.a. Annual Gross Income or AGI). But first, ask any HUD Code home manufacturer’s regional sales representative, or MHRetailer, how to take either or both those ‘$$$ starting points’ (AMI &/or AGI) to calculate ‘affordable’ and ‘risky’ price points of homes to be sold in the given local housing market, or to the individual or household buying a home. You may be surprised at the answer(s); or, more likely, non – answers. And don’t forget to ask ‘How they got to their numbers?’. Today there is a practical way to effect these key computations, using the obliquely – named ‘Ah Ha! & Uh Oh! Formulae’.* The other aspect? Has to do with relationship of on – site homesite rent and PITI factor calculated using the ‘Ah Ha & Uh Oh!’ methodology. Here’s the rub; sometimes referred to as the KY-MN Rule of Thumb (Named for two MHIndustry leaders routinely using this rule in KY & MN); to wit: For a manufactured home sited in a landlease community to ‘sell well’ against similarly – sized and appointed stick – built homes in the same local housing market, the total monthly PITI & site rent payment on the former, must be at least $50.00/month less than the PITI payment for the latter! When that relationship is out of sync, it’s usually due to too high site rent, too much home for the prospective homebuyer (often the case), and or combination of both factors. Now you know.

CONSPIRACY. Do you really want to go there? Some do; some don’t. However, want to acknowledge this theory frequently surfaces in casual conversation among MHIndustry purists and veterans. Such talk usually centers around personal convictions that advocacy bodies have been infiltrated by stick – built housing loyalists intent on gradually dismantling the industry; and, HUD, as federal regulator of the our industry, has been its’ most reluctant bridesmaid for 35 years, rarely doing anything proactive, even reactive, to pointedly promote manufactured housing beyond being this nation’s Best Kept Affordable Housing Secret. Nuff said, for now…

Can YOU identify additional reasons why HUD Code manufactured housing and LLCommunities continue to be this nation’s Best Kept Affordable Housing Secret? Let me know by phone: MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764, or respond directly to this blog posting via this website!

II.

Remember last week’s blast email teaser quote: “LLCommunities to be the Salvation of the MHIndustry? Looks like it!” Well, we received several supportive messages regarding points made therein. Here’s one: “Well done, sir. Perhaps we should Thank the conspirators for starting our demise, so our national associations and ‘we’ could finish (the job). As an industry, we are definitely suicidal. We should be thinking aggressively and believing in our future! (What’s the chance our few remaining) financially strong manufacturers, LLCommunity owners, OEM suppliers, MHRetailers, and (third party) financial firms contribute monies to a pool to provide financing for creditworthy buyers of our housing product?” MM. And this; responding to (property) owner – financing of new and resale homes sold on – site via ‘captive finance’ and ‘buy here – pay here’ methodology: “Good for the LLCommunity owners; they KNOW how great our customers really are, and how they deserve our confidence.”

III.

For more information about the Best Kept Affordable Housing Secret in the US!,
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• Attend 19th annual International Networking Roundtable in Phoenix, AZ @ 15-17 September. Not too late to register! (317) 346-7156 for special rates for LLCommunity owners, HUD Code home manufacturers, and service Providers. FLASH. Here’s a piece of inside information! Thanks to this blog, and other online postings, this year’s Roundtable is attracting as many ‘new faces’ as it does folk who’ve patronized it for the past 19 years! So, if you’re looking for prime prospecting, best educational offerings available anywhere in the MHIndustry, unparalleled interpersonal networking, and dozens of deal – making opportunities, register today! Our max capacity is 200, and we’re almost there!
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• Only a few copies of the best-selling Manufactured Housing $$$ Primer remain. Sells for $29.95 per copy (includes postage & handling). Phone (317) 346-7156.
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• If the ‘Ah Ha! & Uh Oh! Formulae’ methodology intrigues you, plan to be in Springfield, IL., on 21 October 2010. Why? The Illinois Manufactured Housing Association (‘IMHA’) is hosting a day long chattel finance educational program, for anyone in the manufactured housing business and landlease community asset class, who wants to attend. I’ll be describing the above methodology in detail, using said form. Call (217) 528-3423 for further information and to register for this seminal event. Given the ‘other topics’, anyone in self – finance will be there!
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Remember; this Blog is only as useful as your input, suggestions, and ideas! GFA

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End Notes.

• For a free copy of the ‘Oops…You slipped’ postcard, call (317) 346-7156
• Hiatus? A space where something is missing; a gap; a break.” Webster
• For Free copy of the ‘Ah Ha! & Uh Oh! Formulae’ form, call (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