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

MY EPIPHANY

‘It’s the Issues, Stupid!’ & sadly, more…

What’s an epiphany? It’s ‘a sudden, intuitive perception of or insight into reality or the essential meaning of something, often initiated by some simple, commonplace occurrence.’ Random House Webster’s College Dictionary

First the issues, both macro (‘large, great’) and micro (‘very small’) in size & import.

The macro issue as of February 1, 2010? Amazingly, it’s the same issue today (Now, read this carefully…) as in 1990, when the Hiler Amendment (Our industry’s first legislative initiative to modernize the HUD Code) fell to political skullduggery (Guess by whom?); a decade later, when the Manufactured Housing Improvement Act of 2000 passed, but has never been fully implemented (e.g. Still awaiting the much needed non – career administrative appointee!); and now, another decade later, as manufactured housing ‘fights’ (Wrong word choice there; think instead…) ‘flounders’ toward Free Enterprise oblivion, with bane – like assistance from federal regulators and career bureaucrat(s) at the Department of Housing & Urban Development. The macro issue?

Modernize and segue HUD Code manufactured housing away from its’ trailer heritage of the 1960s,’ mobile home’ image of the 1970s, and manufactured housing identity of the 1980s & 90s, to compete on a level playing field with every other type housing in the U.S.! This is the macro issue that’s failed to materialize in years 1990 and 2000; and now, with dawning of year 2010, unless elected and salaried leaders of this industry bring us together collectively, effectively, and soon, to face known challenges, the micro issues before us today, we’ll indeed fail to survive by year 2020; or as has been said frequently of late: ‘Imagine No New HUD Code Manufactured Homes by Year 2020!’. With that said, what’re the micro issues? List begins here, in no particular order:

• Non – Career Administrative Appointee by HUD
• Residential Fire Sprinklers in Manufactured Homes & Other Types of Housing
• Installation Program & Installation Standards Implementation
• DOE Oversight re MH Energy Standards (Think loss of federal preemption!)
• MHCC Member Composition (No MHARR or MHI staff presence; more later)
• Lack of Secondary Market for Manufactured Housing Sales
• Carried Interest
• Finance (Consumer/Inventory); Fannie Mae & Freddie Mac; FHA Title I Reform
• MHCC/HUD Program
• GSE Duty to Serve Provision
• Weather Radios/disaster Alert Systems
• Formaldehyde – CARB standards
• Energy Tax Credit Extender Legislation
• Pre – 1976 Replacement Home Legislation
• FEMA Emergency Housing Specifications
• FEMA Accountability/Disposal of Temporary Housing Units
• Homebuyer Tax Credit
• Water Submetering
• Frost Free Foundations

So, where to go from here? It’s pretty simple really. Besides motivating and directing our elected and salaried leadership – no small challenge in itself*1; focus their and our attention and action, not inaction, on the macro issue; as well as, identifying, evaluating and confronting, not evading, the micro issues, as new information and legislative initiatives become known and evolve over time! And it’s vital these micro issues be widely and regularly publicized and openly discussed; but no longer in confusing point – and – counterpoint MHARR – MHI Press Release battles played out in the trade press! Speaking of the trade press. Guess how many were represented at MHI’s Winter meeting in Savannah, during early February? One. Our last advertising – supported tabloid, though registered as a Special Guest, was absent; as were all the online ezines and reports. Only the Allen Letter professional journal and the Allen CONFIDENTIAL! business newsletter were represented!

Speaking of the Allen Letter; if we, as an industry, are to continue floundering with two disparate national advocacy bodies attempting to do manufactured housing’s bidding inside the Washington beltway, let’s regularly post their views on macro & micro issues, side – by – side, in the professional journal! The first example of this surprisingly simple, but illustrative, exercise occurred in the January 2010 issue of the business newsletter. What happens if one or both bodies decline to publish their position on a micro issue? Think about it. February’s issue of the new Allen Letter professional journal introduces M.H. Ronin, penname for an articulate, 30 year experienced, and highly motivated observer (No, not me!) of the manufactured housing scene. His/her job is to take MHARR & MHI’s published public positions on macro & micro issues, parse them, then attempt to ‘make sense’ of them for you and me!*2

And here’s the ‘sadly more’ part, referenced in the blog title; my take on what was experienced and not experienced at MHI’s Winter meeting in Savannah, GA., on 1 & 2 February 2010. Bottom line first? I’m no longer confident MHI is worthy of efforts and resources to keep it going as the manufactured housing industry’s primary advocate! Huh? You read that right; so now, by way of explanation:

• Only 108 MHI members, non – members and guests registered in advance to attend this meeting. There were several ‘no shows’, and a few add – ons, like Brian Mills, real estate mortgage originator, now correspondent with Centerline Capital Group in St. Petersburg, FL., and the only RE lender present! MHI’s 2009 Individual (print) Directory contains 650 entries. And did you know? MHI’s 2010 Directory will likely be in electronic format? Anyone ask your preference?

• Manufactured Housing Division meeting featured an agenda containing ten specific micro issues and this macro one: ‘Other Goals & Priorities for 2010 for Industry Recovery!’ Care to guess which issue wasn’t even mentioned during their meeting? Yep; the macro one which coulda – woulda – shoulda address The Near Perfect Storm Manifesto’s premise: ‘Imagine No New HUD Code Homes Manufactured by the Year 2020!’ Why? My guess is manufacturers simply didn’t care to discuss the matter. After all, they shipped 49,000+ HUD Code homes during all of 2009 didn’t they?

• Then there was the less than stirring monologue by William W. Matchneer, III; Associate Deputy Assistant Secretary for Regulatory Affairs & Manufactured Housing at the Department of Housing & Urban Development. Challenged on at least three issues: 1) HUD’s failure to appoint a non – career administrator to replace him; 2) restaffing the Manufactured Housing Consensus Committee (‘MHCC’) so there’s no MHARR & MHI technical staff representation on this body for the first time since its’ inception ten years ago; and 3) ‘Why change the rules by which the MHCC functions now?’ Responses? Not worth repeating. But will tell you this. Post – luncheon remarks were more telling than those from the podium, e.g. “A code body (‘MHCC’) needs an industry expert (staffer from MHARR or MHI) on board to examine and communicate the impact of code changes on the MHIndustry!” Guess which advocacy body no longer has anyone on staff with technical expertise? And this, from individuals who insisted on speaking privately: “Thanks for asking the hard questions most of us don’t have the guts to ask!” Faint comfort there.

• Other voiced but unanswered questions from this same meeting? ‘Where’s the much ballyhooed Manufactured Housing Congressional Caucus of years past? Why aren’t they helping us now with our macro and micro issues?”

So, where does all this leave us? For starters, and it pains me to announce this, but I’m not going to waste time and resources organizing and effecting the ‘hinted at’ meeting on February 26th, 2010, at the RV/MH Heritage Foundation Hall of Fame facility in Elkhart, IN. Many reading this blog have been agitating for a National State of the Asset Class (In this case, industry wide) type gathering, a la 2/27/08 in Tampa, FL., to caucus, discuss, agree upon, and widely publish a grassroots – generated Plan of Action to Save Our Industry! So, why no meeting? For the first time in 30 plus years, I’m convinced we do not have national advocacy bodies capable or willing to effectively ‘Carry our coals to New Castle!’, even if we were to create and codify what entrepreneur businessmen and women in this industry and asset class demand they do on our behalf!

Here’s one further example addressing that very point. Is it the Manufactured Housing Association for Regulatory Reform (‘MHARR’) that’s the answer to manufactured housing industry and landlease community asset class travails inside and outside the Washington beltway? No! And here’s why. Read the following paragraph, quoted directly from an MHARR Press Release dated 3 February 2010, one day after MHI’s Winter meeting concluded; then answer the pointed question posed at the end:

“It is…not surprising an increasing number of grassroots industry members
(particularly MHRetailers and LLCommunities), baffled by such delays and
tired of excuses from half of the industry, in Washington, D.C., have become
disenchanted (when) an industry, such as manufactured housing, a leading source
of affordable, non – subsidized housing and jobs throughout the United States,
is being ignored, neglected, penalized and discriminated against in the Nation’s
Capitol – and are looking for strong pressure to be applied in Washington,
D.C. to break this logjam.” (lightly edited. GFA)

The pointed question. ‘How can MHARR apply ‘strong pressure’ on anyone’s behalf, outside HUD Code home manufacturing circles, when every other segment of the industry (e.g. suppliers, financiers, MHRetailers, LLCommunities, and state MHAssociations, a.k.a. ‘the aftermarket, in MHARR’s vernacular) is pointedly excluded from membership in that organization?!’ Accordingly, sufficient ‘strong pressure’ simply isn’t going to occur or come from one shrinking segment of the manufactured housing industry!

So, what’re your views on these end time events, issues and circumstances plaguing the HUD Code manufactured housing industry; and by extension, the landlease community real estate asset class? I’d like to know! Contact me via this website, respond to this blog, or simply phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or (317) 346-7156. Again, there’s no meeting planned for 26 February 2010; unless, something unexpected, inspiriting, and compelling (to do so) happens in the meantime..

*****
End Notes.

1. One of the unsolicited responses, to this leadership issue, first raised in the blog: ‘Sarah Palin & ManuFractured Housing!’ put it succinctly: “MHIndustry leaders, & by default – our industry per se, are care – less & leaderless.”

2. To obtain a Free copy of January’s new Allen Letter professional journal, &/or to subscribe to the business newsletter – to also receive a Free copy of the 21st ALLEN REPORT, a.k.a. ‘Who’s Who Among Portfolio Owners/operators of Landlease Communities in North America!’ (By itself, the report retails for $250.00), phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or (317) 346-7156, or respond directly to this blog via the community-investor.com website. Never heard of a ronin before? It’s ‘a covert operations specialist with no governmental ties.’ Can you think of a better handle for a columnist writing about a federally regulated industry? Neither could I!

George Allen, Realtor®, CPM®, MHM c/o Box # 47024, Indpls, IN. 46247

Milking, then & now…

goes by several names; avarice, covetousness in Holy writ, and simple old fashioned greed. As Random House Webster’s College Dictionary posits, ‘…to get something from; exploit: The swindler milked her of all her savings.’ It also occurs when a pettifogger bills clients ‘whatever the traffic will bear’, rather than what’s honest, fair
and earned.*1

Well, landlease (nee manufactured home) communities, over the years, have experienced various nefarious milkings, as in ‘pulling excess profits out of the income – producing property type’, as well.

During the early days of landlease community (‘LLCommunity’) consolidation, roughly from the late 1970s through 1980s, when there were many half full properties on the market, it was common for frustrated, ailing, and near retirement owners/operators to sell their realty investments to buyers, sometimes limited partnership syndicators. These buyers would frequently meet the seller’s top dollar price expectation, while insisting on a low down payment and lengthy contract term; reminiscent of the acquisition mantra: ‘You can name the price or the terms of the deal, but not both!’ Then, after ‘closing’, the now somewhat wealthy, former – but still on the accountability hook, LLCommunity owner/operator, would oft ‘move away’ to begin his or her new, and usually comfortable, lifestyle.

In the meantime, the individual or syndicator buyer nunc owner would start managing the property, sometimes from afar, as a passive investor. And early on there’d usually be attempts to fill the remaining vacant rental homesites with ‘repo’ units, that were in abundance at the time, either as ‘rentals’ or contract sale units, to ‘get the rent meter running’. But along the way, and for various reasons, this flurry of activity tended to slow. Critical operating expense bills would continue be paid, albeit slowly, while routine maintenance became deferred maintenance; and soon, the departed seller nunc retiree – if still alive, would see contract payments arriving later and later, until sometimes stopping altogether. In the meantime, milk money going to the contract buyer (i.e. new owner) would continue, even increase for awhile, until the ‘still on the accountability hook’ former LLCommunity owner/operator filed suit and received a court order allowing him or her to take the property back – usually in far worse condition than when it had been sold ‘for more than it was really worth’. And another property had been milked, through excess profit – taking, by both owners, one more than the other.

So, do similar scenarios play out on a larger scale, say with privately – owned and publicly – owned LLCommunity portfolios? Yes, but in different ways and generally on a grander scale.

LLCommunity asset class consolidation has been underway for more than 30 years. The headcount of known LLCommunity portfolio owners/operators numbered slightly more than 25 in the mid – 1980s, when the Roulac Real Estate Consulting Group of Deloitte Haskins + Sells published an annual list of these ‘players’ in Roulac’s Strategic Real Estate newsletter. Today, however, according to the 21st annual edition of the ALLEN REPORT (a.k.a. ‘Who’s Who Among LLCommunity Portfolio Owners/operators in North America!’), published January 2010, that number has mushroomed to 500+/- in 2009 & 2010.*2 What’s a portfolio owner/operator? For the purposes of the ALLEN REPORT, it’s a business entity, whether a sole proprietor, limited or general partnership, private corporation, or a real estate investment trust (‘REIT’), that owns and or fee manages a minimum property portfolio of five LLCommunities and or at least 500 rental homesites.

Milking, on the privately – owned LLCommunity portfolio level, over the years, often began with the acquisition of investment grade properties (i.e. usually more than 100 rental homesites per location, with good physical occupancy, & low operating expense ratios*3), ideally including several in the same or neighboring local housing markets. If not already at a high occupancy level, the new owner often took necessary steps to fill vacant rental homesites; often, in the recent past, with assistance from local manufactured housing retail sales centers (a.k.a. MHRetailers nee street dealers or dealers). Then, once a fairly high level of physical occupancy was achieved, say 95 percent, the property owner would start ‘jacking site rents’, in accords with the old bromide: ‘If occupancy is higher than 95%, the rent level is too low!’ While this max profitability maxim focused on the positive fiscal health of the business enterprise, it overlooked the potential consequences of too high rents, e.g. Higher the site rent, the less home (price & mortgage) prospective homebuyers can afford to purchase, encouraging them to go where there’s ‘more bang for their bucks’! Irregardless; given this favorable ‘Return On & of (one’s) Investment (‘ROI’) window of opportunity, per max occupancy, high site rent, and maximum net operating income (‘NOI’) via trimmed expenses, some portfolio owners frequently refinanced with high percentage Loan to Value (‘LTV’) mortgages, that allowed them to walk away with large amounts of money from the property or properties. This was especially common between 1998, when average national physical occupancy among portfolio LLCommunities was at an historic high of 95 percent, and there was far ‘too much easy money chasing too few deals’, and 2008 when financial markets tanked.

Present day consequences? Given excessively high rents (Defined as exceeding the 3:1 Rule of Thumb, where LLCommunity site rent is more than 1/3rd the monthly rent for largest 3BR2B conventional, non – subsidized apartment units in the same local housing market!), homebuyers no longer could afford even modest sized and priced homes in such an overpriced landlease property, so went elsewhere – especially during the run up of the site – built housing bubble of the last ten years! As a result, physical occupancy plunged to 80, 70, 60 percent and lower; while site rents remained unchanged, even increased in places; and now some LLCommunities, and portfolios of these properties, are going into forbearance or foreclosure, depending on the structure of the underlying mortgage financing! In one recent example, as much by dint of mismanagement as out of sync rent levels, a large LLCommunity that sold for more than $11,000,000.00 less than ten years ago, was recently purchased out of foreclosure for $2,000,000.00 cash.

The contemporary REIT experience, is similar in some ways, different in others. UMH, Inc., in Freehold, New Jersey, was the sole LLCommunity REIT carryover from the 1980s, when the 1990s decade began. During 1994, Chicago headquartered ELS, Inc. (nee MHC, Inc), Detroit’s Chateau Properties, Inc., and Sun Communities, Inc. made their debut, making it four REITs. Three years later, Chateau merged with Denver – based ROC Communities, to more than double its’ size, in terms of rental homesite inventory, changing its’ name to Chateau Communities, Inc. The following year, Clearwater, Florida domiciled American Land Lease, Inc. ‘went public’ with an initial public offering (‘IPO’) of its’ stock.; so, ‘then there were five REITs’. This happy family of five began to fall apart in 2003, with demise of Chateau Communities, Inc., acquired and taken private by Hometown America. The following year, upstart Affordable Residential Communities (‘ARC’) appeared on the REIT scene, but lasted only two years, too taken private, via auctioning of assets and direct purchase, eventually resurfacing and renamed as American Residential Communities, still using the ARC acronym. Today there are but three publicly – traded REITs: ELS, Inc., Sun Communities, Inc., and the enduring, though recently renamed, UMH Properties, Inc. American Land Lease, though still a public company, is managed by Green Courte Partners, LLC., out of Lake Forest, IL. What happened to Chateau Communities, Inc., ARC, Inc., and American Land Lease?

While all three corporate stories vary, some lay a significant part of the blame at the feet of aggressive Wall Street analysts who, via published expectations of continually improving financial performance from REIT LLCommunities, effectively treated and feted these otherwise stable realty investments as ‘growth stocks’, feeding investors confidence that dividends would not only be continual, from period to period, but would increase in amount as well. Such overly optimistic expectations fueled operational cost cutting, aggressive rent increases, search for ‘alternative income to rent’ measures, or AITR, e.g. ancillary services paid for by homebuyers/site lessees; and for a time, a flurry of additional LLCommunity acquisitions, on the part of REIT executives. In time, some of these portfolios overheated, no longer able to sustain the profit pace near – dictated to them by Wall Street denizens; so, either merged with other like firms, experienced disposition, were taken back to private ownership, or effected one or another combination of these strategies.

In the private sector, milking of assets has been similar to that described in an earlier paragraph, the major difference being that of scale. For example, when a property portfolio acquires an otherwise healthy and attractive investment grade LLCommunity for top dollar (i.e. often ‘on the come’, or specifically, ‘on the – expectation of rent increases to – come’); then, take the rental homesite rent level upwards to 50 percent or higher, of what’s being charged for large 3BR2B apartments in multifamily rental communities in the same local housing market, would – be homebuyers, even existing LLCommunity residents, soon figure out it’s more economical for them to live in said apartments, maybe even buy a site – built tract home (until recently), with no down payment requirement and an adjustable rate mortgage (‘ARM’) with extremely low monthly payment for the first year of ownership. Repeat this scenario over as many times as there are LLCommunities in a given portfolio being milked, and one can see how millions of dollars quickly add up.

The challenge for LLCommunity site rents to be kept in sync with local conventional apartment communities is compounded when apartment rent rates are reduced in a given local housing market, almost always indirect response to declining physical occupancy levels – though they prefer to refer to this performance benchmark statistic in terms of ‘vacancy percentage’. Do LLCommunity owners/operators respond likewise? Generally, not. The only rationale, for not doing so, that makes any sense, are couched within these two disparate perspectives: First, since our annual turnover of homes runs only about 5 percent, in most good years, due to size of contemporary homes and high expense to relocate them, homeowners/site lessees tend to be a ‘captive audience’. The other, maybe lesser reason, has to do with the 3:1 Rule. When an apartment community rolls its’ rent back by $60.00/month, the equivalent amount of rent roll back for the LLCommunity in the same local housing market would be only $20.00/month. In the minds, I suppose, of many owners/operators, that’s not a large enough amount to waste time and effort to make the adjustment. Or is it?

Believe it or not, the foregoing is just a pretty good sized ‘drop in the bucket’ where this subject of milking is concerned. Do you have business experience, to this end, you ‘d be willing to share with blog readers, or maybe even in a future issue of the new Allen Letter professional journal? If so, communicate with me directly, via GFA c/o Box # 47024, Indianapolis, IN. 46247, or phone (317) 346-7156, or respond directly to this blog and website.

If you’re with me this far, it’s important you let me know you desire to receive advance notice of future weekly blog postings, and information about upcoming MHIndustry & LLCommunity issues and events. For example; as you read this, during or shortly after the week of 1 February 2010, you should ‘want to know’ what transpired –or, just as importantly, did not occur, at MHI’s Winter Meeting in Savannah, GA. Frankly, and tellingly, there’s going to be only one business press outlet broadcasting and printing that story: this one, and the new Allen Letter professional journal! When I post next week’s blog, on 8 February 2010, advance notice will be sent only to businessmen and women who’ve already emailed me, requesting to be kept on the Blog Posting Blast Email Alert Notice List, and those responding to this specific paragraph in this particular blog! Why the sharp focus? As an industry and asset class we are on the veritable cusp of our collective failure, or a potentially bright future, depending on what we do, or don’t do, during the weeks and months ahead! I only have time and inclination to communicate with peers who care as much about our business future as I do. And, as was hinted at in last week’s blog (Read ‘stealth Starbucks & manuFractured Housing!’), our collective Bottom Line is we need a New Business Model, to convert manufractured into A.C.E. housing or some other improved image and brand presence!*4

Are you keeping 2/26/2010 open on your ‘Save Our Industry!’ calendar?

End Notes.

1. Pettifogger. A mean, tricky, unscrupulous lawyer. Courtesy of Mrs. Byrne’s Dictionary, NJ, 1974.

2. 21st annual ALLEN REPORT available for $250.00 from PMN Publishing via community-investor.com or by phoning the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or (317) 346-7156. It’s ‘free’ with a $134.95 one year subscription to the new Allen Letter professional journal!

3. Physical occupancy = # occupied rental homesites, divided by total # of rentable sites; and OER = either total $ amount of annual operating expenses (or a particular line item from the Industry Standard Chart of Accounts), divided by total $ amount of site rent collected from that particular property. Home sales generally treated as a separate profit center. Allen Model = 40% OER. For detailed information on this strategic subject read, How to Find, Buy, Manage & Sell a Manufactured Home Community (as an Investment), available from PMN Publishing. See previous end note for contact and ordering information.

4. Uniquely Attractive, Cost – Effective residences, American – made, Comfortable & Energy – efficient!

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

Stealth Starbucks & ManuFractured Housing!

Short story how Starbucks is reinventing itself. Lesson for manufractured housing?

During mid – 2009, “…Starbucks tried to avoid being judged by its own label by
opening its first unbranded coffee shop. The ‘stealth Starbucks’, as the distinct
Settle outlet immediately became known, is decorated with ‘one of a kind’
fixtures and , unlike regular Starbucks shops, customers are invited to bring in
their own music for the stereo system, and their own pet social causes for the
message board. The only hint of branding is the fine print on the backs of menus:
‘Inspired by Starbucks.’ After spending two decades trying to blast its logo onto
every conceivable surface, Starbucks was now trying to escape its’ own brand!”

Quoted from ‘No Logo (the book) at 10’, in the Baffler magazine. Vol. 2, No. 1, p.30.

Question: If Starbucks is trying to escape its’ own brand, as good as it is; isn’t it high time for manufractured housing do the same for a better brand?

To help you think through that possibility, here’s our industry’s scenario in three parts:

The Problem!, The Challenge!, The Opportunity!

based on the premise: ‘No New HUD Code Homes Manufactured by 2020!’, and as many of our peers are now saying: the universal distress signal SOS (Save our Ship!) has become, for manufractured housing, SOI (Save Our Industry!). So, with that said…

The Problem has only gotten worse…

While it took brass to go public predicting ‘No New HUD Code Homes Manufactured by Year 2020!’, verbal and written blog response sentiment, by email and phone calls, to this MHIndustry observer and blogger, has been supportive:

“If our industry’s leaders don’t get on the stick NOW, there’ll be ‘No New HUD Code Homes Manufactured by 2015!’

“ManuFractured Housing (moniker) is really cool, and most adequately represents our industry’s current condition!”

And latest year end HUD Code housing shipments for 2009, are running around 46,000; below the predicted 50,000 worst case scenario guestimate earlier in the year, under the 81,889 in 2008; and light years from the 372,843 shipped in 2008.

How, you say, can this be possible? Inaction and misaction in several different ways:

Continued dearth of third party chattel (personal property) financing! Yes, I know you/we’ve heard this before, but that doesn’t make the emergency any less real and serious. But now the tragedy is playing out on not just one, but two fronts, and more:

First; FHA Title I. Ask yourself: ‘How long have we been waiting and waiting for this, hearing one empty assurance after another, from industry leaders and lenders?’ It’s truly become, ‘The promise that isn’t!’ Time has come to learn the real reasons FHA Title I has not, and likely will not, materialize for HUD Code manufactured housing! Accept no rehash of excuses intended to mollify! Some now suggest consolidation conspiracies exist in more than one segment of the MHIndustry, with the nefarious goal of ensuring ‘the survival of one, or a very few, at the expense of everyone else’.

Second; Self – finance. You know, of the ‘captive finance’ and ‘buy here – pay here’ varieties, so commonplace on – site in landlease communities, where new and resale homes are routinely marketed and sold these days. You know, the ‘carrying of paper’ that’s mushroomed from a few million dollars a decade ago, when almost everyone decried the practice given its’ potential to devalue one’s LLCommunity investment upon disposition, to more than $3,500,000,000.00 dollars estimated to be now held among just the 500+/- known portfolio owners/operators of this unique income – producing property type.*1 ‘Ah, but here’s the rub!’ Once states have enacted and implemented their versions of the federal S.A.F.E. Act of 2008, look for this Survival Cum Profitable Business Model to all but disappear.*2 How so? Just look at the state laws, to this end, recently implemented in Ohio and Pennsylvania. Either you’ll be hiring an outside licensed chattel mortgage firm to handle loan origination and servicing functions for you, or you’ll likely find yourself getting licensed as a lender or mortgage broker, and anyone on staff even talking to homebuyers about home finance, being in need of criminal background checks; required training to pass mandatory mortgage licensing tests; and ultimately, formal licensure as a mortgage originator – or more. Reads like low level job security and restraint of trade to me.

And there’s more, much more…

Another growing major problem, has to do with the transfer of regulatory authority over manufactured housing, away from HUD, to other federal agencies and state governments.

Start with the proposed transfer of housing – related energy standards to the Department of Energy or DOE. This is a significant first chip out of the MHIndustry’s preemption protection.

Then comes the water sprinker issue. While an added expense for manufacturers when building a HUD Code home, have LLCommunity owner/operators thought about probable consequences when this regulatory authority segues from HUD to state governments? It leaves the door wide open for the National Fire Prevention Association (‘NFPA’) to lobby all existing homes in LLCommunities be retrofitted with water sprinkler systems! ‘Bye bye’ preemption; ‘Hello’ replacing your underground water system to handle the greatly increased design load!

Are you asking yourself yet, ‘Why aren’t our two national advocacy bodies telling me this? Well, they really are trying to do so, but in different (sometimes conflicting) ways and with different (tones of) voice, bearing with minimal success and results. For example…

Do YOU know about the non – career administrator position being overtly stonewalled by HUD leadership? As long as HUD does so, ‘their (career bureaucrat) man’ Bill Matchneer has effective control of OUR destiny as an industry and YOUR business future! His hands are in every issue just identified, including the S.A.F.E. Act of 2008! Frankly, the appointment of a non – career administrator to shepherd the HUD Code program is Our Last Best Hope & Opportunity to counter much of what’s just been described and much more! And that brings us to…

The Challenge to turn our titanic – like destiny around before…

How? Become informed, become involved, and demand action! In other words, ‘If you’re no longer content to sit back as part of this growing Problem, accept this Challenge, and become an active part of the Opportunity to ‘Save Our Industry’!

By the time you read this blog, it’ll be nearly too late for YOU to make arrangements to attend MHI’s Winter meeting on 1 & 2 February 2010, in Savannah, GA – where HUD’s Bill Matchneer will be a keynote speaker. But try anyway; phone (703) 558-0678 and talk to Thayer Long, MHI’s executive VP, expressing YOUR opinion about the present conditions of, and the probable future of the MHIndustry & LLCommunity asset class. And, if not already a direct, dues – paying member of MHI, sign – up immediately! You’re no help to the industry or yourself, if you attempt to ‘Save Our Industry’! from afar, even via your state’s salaried and elected representatives to MHI meetings! It’s simply not the same, nor nearly as effective, as YOU being present!

If attending the MHI Winter meeting, as I am, go prepared to ask hard questions and demand honest answers. One of the foremost should be, ‘Where’s the much – vaunted Manufactured Housing Congressional Caucus, of a couple years ago, in this regulatory mix?’ Here’s another I’m hearing frequently these days: ‘What individual or individuals effectively shape the regulatory posture and political thrust of the two advocacy bodies in Washington?’ Well, with MHARR, it’s pretty simple. A bevy of small HUD Code home manufacturers give Danny Ghorbani his specific marching orders. MHI? Much more complicated and vague. Its’ 21 member Board of Directors? Highly doubtful, as that’s akin to ‘management by committee’. The recently dollar – empowered National Communities Committee (‘NCC’) division? Maybe in time, but those members aren’t yet knowledgeable of, or sensitive to, the causes, effects and nuances of HUD’s covert maneuverings. One manufacturer? Maybe. MHI’s salaried executive? No; new to the job and responsive to the whims of elected leaders. The few executive committee members of the Board of Directors? Probably. And that’s the point! Give at least five alternatives, how are we, as direct dues – paying members of MHI, to know who really shapes and directs the regulatory posture and political thrust of this advocacy body, along with our collective business futures? I’d like to know; how ‘bout YOU? Other timely and pithy questions? Reread previous paragraphs and zero – in on the issues! Call and ask Danny Ghorbani, at MHARR, for input: (202) 783-4087.

The Opportunity for a new & better future…

New Business Model needed to convert manufractured into A.C.E. housing!*3

It’d be premature here, to introduce anything different from today’s status quo. However, depending on what, if anything – proactive and substantial, comes out of MHI’s Winter meeting, there’ll be two divergent different paths for the manufactured housing industry to consider; one, is to be more united and stronger than we are today! The other? Well, let’s just wait and see, for the time being. Are you keeping 26 February 2010 ‘open’ on YOUR Business Survival calendar?

A hint. One sage MHIndustry veteran recently penned this email message to me:

“I believe HUD Code housing manufacturers, MHRetailers, LLCommunity owners, and financiers need to gather in the same room and be given the Clear Challenge to Work Together! They need each other, even though they often function like they do not. Our business is not particularly complicated. It is – or should be, Customer Driven, not factory or retailer driven, not LLCommunity or financier driven. All four segments of the industry must work together to meet the customer’s need for housing!” NB (lightly edited. GFA)

To which I’d add. This needed revival, restoration, resuscitation, reawakening, and renewal (Or is it rethinking, reinventing, reorganizing?) has not, and likely will not, occur in a regularly scheduled meeting of any formal trade organization or advocacy body. It must be a separate venue, driven by a bona fide industry wide need; in this case, to Save Our Industry! Similar precursors occurred twice during the past two years; first, when LLCommunity owners/operators convened on 2/27/08 in Tampa, FL., to identify and codify focus for the asset class going forward*4; then when HUD Code home manufacturers and LLCommunity owners/operators convened on 2/27/09 in Elkhart, IN., to ascertain what it’d take to sell more new manufactured homes into this unique income – producing property type, than at any time since the early 1970s.*5 Tangible results? You bet! Which begs the question, now – and – again: Will anything proactive and substantial, relative to achieving MHIndustry strategic focus, advocacy unity, and restored vitality, result from MHI’s Winter meeting in Savannah, GA., next week?

In the meantime, feel free to communicate your views to me by replying to this blog, via email: gfa7156@aol.com, MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764, or (317) 346-7156. What do you think manufractured housing’s New Business Model should entail, contain, and do?

Look at it this way. If Starbucks thinks it wise to, at least in part, ‘escape from its’ own brand’, via stealth Starbucks; surely the manufractured housing industry, with shipments as bad as they are today, at a 60 year nadir, should at least consider if and how to escape from its’ image and brand, into one more promising and profitable!

The Countdown nears its climax…

*****
End Notes.

1. See 21st annual ALLEN REPORT, available from PMN Publishing for $250.00 or ‘free’ with a one year subscription to the Allen Letter professional journal @ $134.95/year (12 issues). Just phone the MHIndustry HOTLINE: (877)MFD-HSNG or 633-4764, or (317) 346-7156.

2. Safe And Secure Enforcement of Mortgage Licensing Act of 2008

3. Uniquely Attractive, Cost – Effective residences that are American – made, Comfortable & Energy – efficient!

4. National State of the Asset Class (‘NSAC’) caucus; an international, informal, quasi realty investment and property management body specializing in the landlease (nee manufactured home) community real estate asset class.

5. Historic SUMMIT Meeting

George Allen, Realtor®, CPM®, MHM Consultant to the Factory – built Housing Industry & The Landlease Community Real Estate Asset Class
Box # 47024 Indianapolis, IN. 46147 (317) 346-7156

Living & Working Bass – Ackwards!

A book review accents use of FORM acronym & value of the Golden Rule

David Greene of Greene & Greene, Inc., in Atlanta, sent me Steve Beecham’s book, Bass – Ackward Business: ‘ The Power of Helping Without Hustling’, published in 2009 by Home Town Publishing. I didn’t get many pages into it before recalling similar personal and business relationship cultivating (as in ‘promote the growth of’) styles learned and lived over the years.

“My helping without hustling strategy is bass – ackwards when you compare it to everything I’ve been taught about building a business” – “it’s not about you or your sales; it’s about helping others.” Pp. 9 & 14. (Emphasis added. GFA)

Beecham quickly identifies three components to implementing the bass – ackward ‘helping without hustling’ mindset:

1. Get out of the office
2. Focus on relationships
3. Find a way to help people p.24

And through these steps, Steve emphasizes ‘discovering the person and not the business’, earning – by – serving, rather than expecting or demanding, ‘the right to sell’.

No further into the book than that, I reflected on how some of his principles applied – or should apply, to the way I’m ‘doing business’. That thought stirred the memory of cleaning out a vacant office, 30 years ago, and finding a set of AMWAY cassette training tapes. As I listened to them while driving, I learned the FORM acronym, an effective personal networking guide. Letters were for Family, Occupation, Recreation, & Message; or, a reminder to set a date for next Meeting. How’s it work? Simple. Walk up to someone, anyone, – in this case in a group setting, and introduce yourself, with a Smile on your face and a friendly, but not fierce or wimpy, handshake. Then, after exchanging names, strike up a conversation, by asking about Family (may be single, married, whatever). After talking ‘families’ for awhile, segue to Occupation. Might be a student, stay at home parent, or otherwise. By now, both parties should be fairly comfortable conversing, so ask about Recreation – what do you do ‘for fun’? Then, near the end of the conversation, and depending on what seems appropriate, decide on when to next Meet and continue the friendly conversation; or, if fitting, ease into one’s Message. I’ve been using the FORM technique ever since – and it works! *1

Gotta admit, there’re a couple things in Bass – Ackward Business that gave me pause, since I hadn’t run into them before; like this piece non – footnoted advice @ p.39

“Look people in the EYE. Yeah, and by ‘eye’, I mean their left eye. Typically, when you’re talking to someone about serious matters or business affairs, you look into their right eye. Looking into their left eye communicates sincerity – they feel like you care.”

My immediate reaction: “Who sez?” But, until I can ask the author that question while looking him in the right eye, I think I’ll give it a try next time I’m in conversation with a friend or associate! Hmm. Maybe it’s because the left eye is closer to one’s heart…

Then there’s the Ritz –Carlton illustration. After a few superb guest service experiences during a second visit to a hotel in that chain, Steve asked the front desk receptionist what she thought made the Ritz so special. Her response? “We have a card we all carry in our pocket when working that reminds us, ‘We are ladies and gentlemen serving ladies and gentlemen’. Now that’s pretty nifty. In fact, it reminds me of a similar experience YOU too can have, by dialing (941) 721-0046. The phone will be answered every time, usually on the second ring, by someone ‘with a Smile on their face’, offering this Greeting after Thanking You for calling, then identifying their firm: “How may I Serve You?” Seriously. Place the call to prove it to yourself; better yet, think how You might implement the Ritz-Carlton & Newby Management’s superb customer service techniques as part of your firm’s resident relations program!*2

As I continued to read Bass – Ackward Business, my thoughts turned, time and again, to this writer’s practical application of the Golden Rule, being ‘Do Unto Others as You Would Have Them Do Unto You!’, to the way we ‘do business’. Frankly, too many firms focus on the antithesis Gold Rule; you know, the one that goes like this: ‘He or she who has the gold, makes the rules!’ Sorry to say, we can probably identify more contemporary businesses that appear to ascribe to that scheme (e.g. Predatory lending and Ponzi schemes are just two of society’s present day poster children for that selfish and greedy mindset) than those practicing the Golden Rule in personal relationships and during business dealings. To underscore this truth, the author cites a fairly well known reminder to ‘Use things and love people, not love things and use people!’ Amen.

OK, so how do you get your copy of this pithy little book (97 pages)? Contact Steve Beecham directly at 11855 Haynes Bridge Road, Alpharetta, GA. 30009 or via steve@hometownmoney.com or via www.bassackwardsbusiness.com

*****

Yes, the Countdown Continues…

Last week was a busy one for manuFractured housing and landlease (nee manufactured home) community aficionados. Friday’s GSE mass auction of Katrina manufactured homes was delayed two weeks. So, if you’d like to buy some of these homes for your LLCommunities in the South (word has it they’re possibly not built for northern climates), contact HUD for further information.

HUD assistant secretary for housing & federal housing commissioner David H. Stevens, in a letter dated 11 January 2010, continued to defend his decision regarding how “…it is not in HUD’s or the public’s interest to appoint a non – career Administrator for the manufactured housing program given the current budgetary climate. This is especially true for this program because HUD has capable staff currently fulfilling this important mission.” (Emphasis added. GFA) So, continuing to have HUD’s career employee(s) responsible for administering ‘the best interests of manuFractured housing’, from both regulatory and industry perspectives is in ‘the best interests of whom’? Not the manuFractured housing industry! That’s why YOU, if indeed ‘having skin in the game’ of manuFractured housing, as small business entrepreneur or senior executive, need to be in Savannah, GA., on 1 & 2 February 2010, to hear what HUD’s MHProgram executive, Bill Matchneer has to say & ask your own questions. Phone (703) 558-0678 to register.

Frankly, there’s more to the manuFractured housing saga than we’re being told, or that I’m sharing here. You need to be personally vigilant to learn ‘the rest of the story’! For starters, read a new column appearing in the February issue of the new Allen Letter professional journal, penned by a 30 year veteran of the MHIndustry & LLCommunity asset class. The goal of this new business journalism platform is to record and parse published and often differing views, from MHARR & MHI, attempting to publish full disclosure relative to industry issues – then identify either the ‘right business decision’, or as appropriate, ‘a centrist perspective’. No more should you have to rely on ‘reading this (MHI) here’ and ‘reading that (MHARR) there’. To subscribe, call the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or (317) 346-7156.
BONUS!
21st annual ALLEN REPORT enclosed with January issue of the new Allen Letter professional journal, as a lagniappe (‘freebie’) to subscribers. Or, the ‘Who’s Who Among LLCommunity Portfolio Owners/operators in North America!’ is available, from same contact phone numbers listed in previous paragraph, or this website, for $250.00.

End Notes.

1. More information on this subject in George Allen’s Chapbook of Business & Management Wisdom, PMN Publishing, 2008. (317) 347-7156 ($10.00 postpaid)
2. Six R’s of Effective Multifamily Rental Property Resident Relations: Superb Resident Relations = More Resident Referrals = Long term Resident Retention!

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

Sarah Palin & ManuFractured Housing

‘When Imitation is not a Sincere Form of Flattery!’

plus

The Countdown Begins….

Mark Twain, in 1888 wrote, “The difference between the almost right word and the right word is really a large matter – it’s the difference between the lightning bug and the lightning.” Same can be true with placement of two consecutive letters in one word; though in the following example, it’s the stark difference between a compelling personal story and political chicanery.

Manufactured housing pioneer, retailer and community owner Dick Moore of Millington, TN., recently got snookered at an airport bookseller’s kiosk. In search of Sarah Palin’s best selling autobiography Going Rogue, ‘An American Life’, he was surreptitiously sold Going Rouge, ‘An American Nightmare’, authored by two senior editors at The Nation magazine, Richard Kim & Betsy Reed. Dick was not happy.

Palin’s 413 page book is graciously “Dedicated to all Patriots who share my love of the United States of America. And particularly to our women and men in uniform, past and present – God bless the fight for freedom.” And it’s a good, positive read to boot!

The editors, in their 320 page attack, offer no such grateful Dedication, just this description of their target: “…a Christian fundamentalist opposed to the teaching of honest sex education in schools and in favor or teaching creationism alongside evolution, a climate – change – denier and government – basher alarmingly ignorant of the world and totally unprepared to be president.” Are they alarmed by and scared of her? You bet! “…this is a woman with at least nine lives. By our count…she’s still got seven left.” In any event, Going Rouge is an apt example of when ‘Imitation is not a form of flattery’.

Had something akin occur when authoring and self – publishing my first book, Mobile Home Park Management, in 1988. The real estate management trade association to which I paid dues, and to whom I’d submitted the manuscript for publishing consideration, instead came out with their own book on the same subject. The justice?
22 years later, Landlease Community Management, in its’ sixth edition, continues to sell well, and is foundation text for the popular Manufactured Housing Manger (‘MHM’) professional property management training and certification program! The other book? Long out of print.*1

And there’s yet a third example of inglorious imitation; but this time around, with the near tragic result of nearly killing – off an entire industry, until it learned to ‘make (housing production) lemonade out of a (regulatory) lemon’; that is, until recently….

It begins with enthusiastic kudos from the Assistant Secretary for Housing Production & Mortgage Credit of the U.S. Department of Housing and Urban Development, (‘HUD’), when speaking to housing manufacturers: “…you set your fourth consecutive annual record, shipping almost 580,000 mobile homes…Your one percent increase in volume during that year stands in start contrast to the 14% drop in single – family, site – built housing starts…I should think (this) indicates a definite trend for the future. Today, mobile homes constitute just about the only true low – cost houses available…which are at the same time decent, safe, sanitary and comfortable.” Sheldon Lubar, March 1974, quoted in ‘A Comparison of Different Dwelling Costs’ Mobile Homes, Housing’s Best Buy, by Carl Edwards, June 1974. (Emphasis added by Edwards)

Well, it didn’t take long for mobile home manufacturing ‘imitators’ schlock product to severely tarnish the present and future reputation of this uniquely American factory – built housing type, to the extent Congress was forced to legislate in behalf of consumers, enacting the infamous HUD Code, effecting implementation during 1976. The same year, Congress mandated changing product’s moniker from ‘mobile homes’ to ‘manufactured housing’. And, as you likely know, the MHIndustry’s annual production was immediately halved to a quarter million homes shipped per year, remaining there for two decades, until experiencing a too brief renascence in 1998 with 372,843 shipments. Today? We’ll be lucky if we can tally 50,000 new HUD Code homes during year 2009.

All this brings us to today, January 2010! Well, guess what? Secretary Lubar’s kudos, relative to true affordability, decency, safety, and comfort of HUD Code housing is as accurate now as in 1974! The problems are: 1) we have yet to figure out how to effectively promote manufactured housing, nationally and regionally, to the American home buying public; 2) establish and support a well – functioning secondary market for the resale of manufactured homes; and, 3) secure sufficient floor plan and retail chattel (personal property) financing for our customers! In short? ManuFractured housing is broken! Even now, is ‘almost too late’ to identify and implement practical, effective solutions to these timely marketing and financial challenges and opportunities. But some are trying, and within 30 days, a way for you to participate as well.

First efforts at solutions appeared almost a year ago, on 27 February 2009, when 100+/- HUD Code home manufacturers and landlease (nee manufactured home) community owners/operators convened at the RV/MH Heritage Foundation’s Hall of Fame, Museum & Library facility in Elkhart, IN. (the ‘birthplace of manufactured housing’), for the first Historic SUMMIT Meeting! Purpose of the gathering? Open lines of communication between these two disparate segments (one manufacturing/distribution oriented, the other realty development/investment focused) of the manufactured housing industry and real estate asset class, to learn what each side ‘needed, wanted & expected’ relative to the design, size, specifications, features, and pricing of the HUD Code housing product. Since that day, nearly three dozen Business Development Mangers (‘BDM’), employed by HUD Code manufacturers, have increased the number of new HUD Code homes sold into landlease communities (‘LLCommunities’). And, at 18th International Networking Roundtable in Chicago, during September 2009, it was agreed by the 200 businessmen and women present, the popular notion (circa 1998) of Development Series Homes be supplanted by Community Series Homes (i.e. smaller, affordable, easily transportable, energy efficient), generally destined for LLCommunity siting! Don Westphal, of Michigan, agreed to serve as National Clearing House for input on this subject. Read his inaugural CSH article in January 2010 issue of the new Allen Letter professional journal.*1

For in depth coverage and review of these and other advances, review archived blogs on this website, especially one titled: ‘Let’s Make History Together!’ Why? Because it contains ‘The Near Perfect Storm Manifesto!’ which introduced the now much talked about premise: ‘Imagine No New HUD Code Homes by the Year 2020!’ Furthermore, the January 2010 edition of the aforementioned Allen Letter carries, in side by side columns, official responses to said premise, by the Manufactured Housing Association for Regulatory Reform (‘MHARR’) and Manufactured Housing Institute (‘MHI’)! Also know, the same issue of the Allen Letter contains a free copy (for paid subscribers) of the 21st annual ALLEN REPORT (a.k.a. ‘Who’s Who Among LLCommunity Portfolio Owners/operators in North America!’); otherwise available for $250.00. *1

The Countdown Begins!

If an entrepreneur or executive businessman or woman, active in the HUD Code MHIndustry or LLCommunity asset class, and sincerely desirous of becoming and being an integral part of a national effort to Save Our Industry!, plan to be present at MHI’s Winter meeting in Savannah, GA., on 1 & 2 February 2010. Here’re at least two reasons:

First; are plans to Save Our Industry! on MHI’s meeting agenda? If so, you must to be present to participate in the discussions! If not; you should be present to ask, ‘Why not?’ Or, has MHI leadership decided the manifesto’s premise: ‘Imagine No New HUD Code Homes by Year 2020!’ is just an alarmist exaggeration, or simply inevitable – hence unworthy of further effort, from either or both national MHIndustry advocacy bodies. Think of this meeting as a weather report and forecast; and you the participant, as a barometer, measuring and reporting the low or high pressure your business interests is/are experiencing at present and what you can reasonably expect in the near future.

Second; William Matchneer, HUD’s Associate Deputy Assistant Secretary for Regulatory Affairs and Manufactured Housing, is MHI’s invited guest presenter at this meeting. Again, you owe it to yourself to be present to hear what he has to say about MHIndustry ills; otherwise you’ll never really know ‘that side of the story’. And if present, ask why HUD appears to resist full implementation of the Manufactured Housing Improvement Act of 2000 (‘MHIA@2000’) – ten years after its’ appearance on the housing scene? And, why the reluctance to appoint a non – career administrator to oversee the work of the Manufactured Housing Consensus Committee (‘MHCC’) pursuant to MHIA @ 2000?. Also inquire about HUD’s position regarding installation of water sprinkler systems in our homes, and why?

Know what it’d take to really make this an open, lively and (hopefully) productive forum? An invitation from MHI, to MHARR’s chief executive, Danny Ghorbani, to attend and participate in dialogue with Mr. Matchneer! Unfortunately, as needed and worthy a stimulus as this would be, it will not happen! Ask me why sometime. Better yet, when you phone (703) 558-0678 to request registration materials for MHI’s meeting, make that suggestion, and watch what happens…

Unable to attend MHI’s Winter meeting in Savannah, GA., but want to support the national movement to Save Our Industry!, hopefully via the efforts of one or more of our national trade advocacy organizations? Then, tell everyone you know, in the MHIndustry & LLCommunity asset class, about this blog. Encourage them to read it and respond appropriate to their circumstances and passion, or lack thereof, about the subject. Better yet, make copies of this blog and circulate them to all your ‘friends in the MHBusiness’, encouraging them to become actively involved as well!

So, what happens after MHI’s meeting in Savannah, GA? It depends on what happens, or doesn’t happen, at said meeting. Was there positive and substantial progress planning how to Save Our Industry!, or was the Winter meeting simply another non – starter? Past blogs have hinted at a new Business Model being articulated for the HUD Code MHIndustry. If you’d like a sampling of raw material submitted and parsed’, to date, by manufacturing/distribution & realty development/investment executives and entrepreneurs around the country, make your request via Reply at the end of this blog. Include your postal mailing address to receive this material. And, as has also been penned before, you might want to pencil in 26 February 2010 onto your business calendar.

The Countdown Continues…

End Note.

1. To order the text, register for MHM program, and or subscribe to the new Allen Letter professional journal, phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or (317) 346-7156.

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

a FOCUS Group opportunity; BLOG Lessons Learned; &,

Two Timely, Pithy Postscripts

‘How the Best LLCommunity Owners/operators Learn Together’;

‘Beware fakers & spammers!’;

‘How to Get Your 21st annual ALLEN REPORT;
&
Recommend ‘How to Save Our Industry from Oblivion by Year 2020!’

FOCUS Group meeting planning typically begins with a telephone conversation or email message from a LLCommunity owner/operator who asks, “George, isn’t it about time we got together for another FOCUS Group meeting?” If there’s no date conflict with an MHI/NCC or ULI/MHCC Think Tank meeting, and the MHCongress/NCC Forum or an annual International Networking Roundtable, the answer is usually ‘Yes’.*1 And the process starts….

But first; what’s a FOCUS Group? It begins with one or more pools of approximately 20 veteran LLCommunity owners/operators, who’ve attended previous FOCUS Group meetings during the past two decades, and individuals who’ve expressed interest in attending their first get together. List of past participants reads like a ‘Who’s Who List of Most Successful Owners/operators in this asset class! A FOCUS Group convenes for 1 ½ days, with attendees spending an evening networking over dinner, the following day working through an agreed upon agenda of timely and compelling topics.

Once the decision to meet has been made, a letter is mailed to the 20 name pool of LLCommunity aficionados from which the request originated; sometimes to both pools. The letter announces preliminary plans for a FOCUS Group to convene. At least two sets of mid – week dates are given (never near the beginning of the month, when rent collection occurs), along with a city location – if a FOCUS Group member has previously offered an invitation to meet in the clubhouse at one of his or her properties. If that’s not the case, a request is made for volunteers to make such an offer. A key part of this letter requests soon input, naming three issues or concerns of import to the FOCUS Group member – along with a deadline for submission.

As date and topic responses are received, generally by email and FAX, an agenda takes shape; prioritized according to the number of similar responses and concerns. A local hotel is identified, and transportation planned from there to the FOCUS Group meeting site. This information is put into a second letter to the member pool or pools, citing a deadline for positive response. Sign – ups are accepted on a ‘first call, first reserved’ basis, until maximum of 12 – 15 commitments have been made. If there’s a particularly strong response to the invite, a second FOCUS Group session is scheduled.

FOCUS Group members fly or drive into the designated city location mid – afternoon the day before the formal meeting, check into host hotel, and gather in the lobby around 6PM to attend a no host networking dinner. Next morning, following breakfast at the hotel, attendees are car pooled or bussed to the host LLCommunity, arriving by 8:30AM to tour the property and be in their seats ‘ready to begin’ by 9AM. While five topics are usually selected for discussion at one of these meetings, e.g. 9 – 9:45, 10 – 10:45, 11 – 11:45, over the lunch hour on – site, and 1 – 1:45PM, it’s not unusual to adjust the schedule when a particular topic commands lively and prolonged attention. A goal is to complete four or five sessions by 2 and 3PM, so participants, who need to do so, can get to the airport to catch afternoon flights home. Many stay longer.

Participants are encouraged to bring 20 or so handouts (e.g. forms, policies, ads.) relating to topics on the agenda. This is LLCommunity cross – pollination at its’ best! And attendees informally agree to keep meeting proceedings confidential among themselves. After the meeting, a summary is prepared by the organizer, with copies sent to each participant, along with an invoice covering meeting and planner’s expenses.

If interested in adding your name to one of the 20 name FOCUS Group pools, contact the blogger via (317) 346-7156, reply directly by message to this Blog, or via the MHIndustry HOTLINE:(877) MFD-HSNG or 633-4764. FYI; FOCUS Group meeting(s) are now being considered for sometime in late February or early March 2010, likely in one or another Florida LLCommunity. Remember however, this special education and networking event is intended for LLCommunity owners/operators and senior corporate executives. An effort is made to not have competing portfolio ‘players’ in same group.

*****

On another subject. Read or post blogs? Beware fakers and a unique breed of spammer! Those are two things I’ve learned blogging, first for the defunct Manufactured Home Merchandiser, now at the official MHIndustry/LLCommunity website: community-investor.com

Fakers? These are individuals who’d like you to believe they’re experts, in one specialty or another (We’ve all heard the bromide: ‘Fake it till you make it.’ description of some novices), relative to HUD Code manufactured housing or landlease community asset class. There’re several ways fakers hawk their presence online.

First, they come across as being highly successful in their stated or implied MH or LLCommunity – related specialty, whether home marketing and sales, home finance, property investment, property marketing, or property management. When one takes the time to investigate, some of these folk lack the credentials and successful experience they infer. After all, establishing an online presence is not difficult or expensive, just an easy way to garner quick attention, get (back) into business, or head off in an entirely different direction, in the hope no one looks too closely. One indicator is their misuse of standard MHIndustry terminology. Do they talk and write about ‘trailers’ instead of manufactured homes, ‘mobile home park’ vs. landlease community, tenants rather than residents, and more? By the way, this ploy has long been a problem with print trade publications where editors and publishers don’t vet manuscript content and those who pen them. So, just be careful what you read and believe online and off.

Second, beware products or services fakers offer. Begin by examining their website. When was last time it was updated? What national trade affiliations do they claim? Before you spend resources on some novel idea (e.g. leasing vs. selling your income – producing property), product (leak detectors), training (‘Get rich quick, buy a MHPark!’) or service (‘We can easily sell your property; no listing needed!’) , request specific referrals, complete with contact information, to previous customers you can contact in person – and contact those referrals!

Speaking of national trade affiliations; this is a timely and effective acid test. How? If the online vendor/blogger, or trade publication columnist or feature writer – for that matter, doesn’t list a paid, direct membership affiliation with the Manufactured Housing Institute (‘MHI’), Urban Land Institute (‘ULI’), or Institute of Real Estate Management (‘IREM’) – where professional property management of LLCommunities is concerned, Beware. They either don’t know of these national trade advocacy, networking, and education bodies; can’t afford membership in same; or, simply, seek to avoid the public exposure they’d experience if a bona fide ‘player’ or expert in the MHIndustry and or LLCommunity asset class.*1

Spammers? If you email, you deal with these folk every day. Turns out they’re on the blogger circuit as well! How so? In my experience, fully a third of the direct responses to newly posted weekly Blogs, comes from spammers hoping blogger will approve their message (vs. delete), leaving it intact, so future blog readers will learn of their (pharmacy) product or (sex) service imbedded within their email address. Seriously. Happens all the time.
*****

Postscript I.

IMPORTANT REMINDER. This week, 4 – 8 January, will see distribution of the new Allen Letter professional journal, commemorating 20 years in continual publication serving the MHIndustry & LLCommunity asset class! This issue contains the only official 21st edition of the ALLEN REPORT, a.k.a. ‘Who’s Who Among LLCommunity Portfolio Owners/operators Throughout North America!’ Unlike years past, it’ll not be released anywhere else, so ensure you receive your copy, as a lagniappe (‘freebie’) with January’s Allen Letter ($134.95/annual subscription) or for $250.00 for the report alone! In either case, phone (317) 346-7156 to subscribe, and or buy the ALLEN REPORT, listing 125 of the 500+/- known portfolio owners/operators in the U.S. and Canada. Other special features this month? HOW TO articles by Don Westphal and Joanne Stevens, CCIM, as well as a very special presentation of ‘The Near Perfect Storm Manifesto!’ that has our entire industry and asset class addressing the timely Premise: ‘Imagine No More HUD Code Homes being Manufactured by Year 2010!’ For that matter, for the first time I can recall, MHI and MHARR address said Premise in side – by – side columns in this month’s Allen Letter. What they pen, is an enlightening education in itself! GFA

Postscript II.

Relative to the ‘timely Premise’ quoted at the end of the previous paragraph (Postscript I.); it’s not too late to provide your input to a small working group envisioning and crafting a new Business Model, designed to return HUD code new home shipments (a key part of said model suggests changing our industry’s perspective away from its’ ‘shipment’ mentality, to tracking new home ‘sales’! What do you think?) to the 200,000 per year level! How to input? FAX @ (317) 346-7158, respond directly to this Blog, or telephone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. If you’re asking yourself: ‘Why isn’t this new Business Model coming from MHARR, MHI or the ULI/MHCC Think Tank or – best of all – the three of them together? Well, ask them, and the sooner the better! MHI will host its’ Winter meeting in Savannah, GA., @ 1 & 2 February 2009. Bill Matchneer from HUD will be present to field questions. Wonder if this historic Premise is on MHI’s agenda for that meeting? Ask! Contact MHARR via (202) 783-4087 Danny Ghorbani; MHI via (703) 558-0678 Thayer Long, CAE., and ULI/MHCC via (248)645-1077. Go ahead, tell’em ‘George suggested we call you with this or other ideas to prevent realization of the Premise: ‘Imagine No New HUD Code Homes by Year 2020!’ and, ultimately, to help Save Our Industry!

*****
End Note.

1. MHI/NCC = Manufactured Housing Institute/National Communities Council division; the landlease (nee manufactured home) community real estate asset class’ national advocacy body. (703) 558=-678. ULI/MHCC = Urban Land Institute’s Manufactured Housing Communities Council, LLCommunity property types’ de facto Think Tank. MHCongress = MHI’s annual Manufactured Housing Congress & NCC Forum for LLCommunity owners/operators (mid – April in Las Vegas, NV). International Networking Roundtable = the asset class sole, annual,
education, networking, and deal making event for LLCommunity owners/operators; though, of late, HUD Code home manufacturers have been attending to display and market their Community Series Homes via their Business Development Managers (‘BDM’) – for a list, call (317) 346-7156.

****

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

 

ALONE then; now WELL, & NO LONGER EXCEPTED

        ‘Remembering Christmas Eves 1968 and 2005’

           The week between Christmas and beginning of a new year is oft used to pause, remember, and reflect on pivotal and watershed moments in life; how such events and circumstances continue to affect one’s contemporary personal or corporate experience; and ponder the influence they might have during the months ahead.

             Christmas Eve has long held special spiritual, personal and familial meaning to me, especially those of 1968 and 2005…

             1968. Nine months into my 13 month tour of duty as a young U.S. Marine combat engineer officer, I found myself at Vandegrift Forward Combat Base (nee ‘Landing Zone Stud’), 40 or so ‘clicks’ (kilometers) West of Dong Ha Combat Base in Quang Tri Province, Republic of Vietnam. It was Christmas Eve, and my shore party platoon, comprised of helicopter support team members, and I were hunkered down for that night of nights, in a large underground earth and timber bunker.

             Earlier that week I received a couple small packages from home, Christmas presents wrapped first with colorful paper, then covered over with brown grocery bag rag. It was quiet that eve, with a clear sky. No ‘incoming’ (rockets) or small arms fire so far. So I decided to sit alone atop the bunker and open the presents, while thinking of my wife Carolyn, and toddler Susan, way back home. Boy, talk about feeling really Alone! Not sure I ever felt more Alone before that night, I know I certainly haven’t since. And while it wasn’t the most traumatic or emotional experience endured in Nam, it sure convinced me how incomplete each of us is, without someone to hold near and dear, in good times and bad.

             Then it happened! Seemed, in an instant, all hell broke loose. Small arms fire, some automatic, erupted around the entire defensive perimeter of the base; pop flares whooshed skyward and burst, illuminating everyone with their bright light; even some signal star clusters arched out from Stud, over into Indian country (enemy territory). Fortunately, it wasn’t a wholesale response to an attack, or attempted breaching of our barbed wire barricades, just a bunch of Marines intent on celebrating Christmas Eve the only way they could, by using gunfire and pyrotechnics, half a world away from loved ones back in the states. The ‘mad moment’ was short-lived however, as officers and noncoms started hollering ‘Cease fire, cease fire!’ And with the restored quiet, came that Alone feeling again.

             Three months and one major engagement later, I left RVN behind and returned to my family in Philadelphia, PA. For the next 37 years I kept most Vietnam combat memories bottled up inside. While it had been the most exciting, challenging and dangerous 13 months of my life, so far, it had also been the loneliest of times. On one hand, I didn’t want to relive trauma better left behind, so I thought, on the battlefield. On the other hand, I realized not only how Alone I’d felt that Christmas Eve, and most other nights; but now, how potentially permanently Alone, I’d selfishly risked my family, when going off to war. And that’s something I’ve lived with ever since…

             2005. I penned the short story ‘Making Amends’, a few years ago, describing how a chance encounter Christmas Eve 2005, enabled me to finally relate adventures, and some of the trauma experienced during 1968 and 1969 in Vietnam, from the Khe Sanh Combat Base breakout  to a near death experience, during Operation Dewey Canyon, along the Ho Chi Minh Trail bordering Laos in the Ashau Valley.*1

             Two additional results of this pivotal, watershed moment – and I’ve not written publicly about this before, is it completed a multifaceted emotional healing process 40 years in the making; and something else. 

 When I returned to the states during Spring 1969, I was incapable of crying; inclined to laugh, instead of grieve, when relatives and friends died; and, unable to show much affection to those closest to me. Ten years later, during healing prayer administered by close friends one Friday night, I regained the ability to cry! Today I can easily weep during a movie, even while reading a poignant part in a book, but still find it difficult to shed tears among family members. It took even longer to attend funeral services and respond appropriately. And today, it’s not as easy as I’d like, to sow warm affection to my spouse, children, grandchildren and great grandchildren. Why? Best I can figure; when my Marines were killed, wounded or injured in RVN, it was often vital, during and soon after combat, to appear and to be, in full control of one’s emotions and actions, not crying, unflinching facing violence and death, leading by example at all times. That extreme conditioning did not disappear when I returned home. And to this day, I suppose – deep down, I fear – once again, to be the stalwart one, if a tragic turn of events affects my loved ones….

             As a related aside; the third result, portrayed in the words that comprise ‘Making Amends’, is how alienation morphed into acceptance between two individuals whose lives couldn’t have been more disparate in 1968, now reconciled on Christmas Eve 2005, with neither one any longer excepted….

             So, during the days between Christmas and New Years day, since 2005, I’ve made it a point to pause, remember, and reflect on pivotal and watershed moments in my life, and how these events and circumstances might affect personal and corporate experience during the 12 months ahead. My 2010 epiphany? ‘I’m no longer Alone; I can truly empathize; and, I appreciate the efforts of others, as some have finally appreciated me.’ So, how ‘bout you? Might this be a timely and worthwhile exercise for you, this week, as well? Think about it!

 End Note.

 1. Copies of the short stories: ‘Making Amends’, ‘PUC Beer’, ‘Got Rep?’, and ‘The Chester Flashback’ are free and available on request, by simply responding to this Blog, via email: gfa7156@aol.com, or telephoning (317) 346-7156.

 Postscript I.

             If you’re a loyal reader of this weekly blog, you’re likely wondering if and when there’ll be follow – on episodes to chapters # 1, 2 and 3 of the Manufactured Housing and Landlease (nee manufactured home) Community Manifesto, Opportunity to Make History Together, and Gantlet. Answer? You bet! Chapter # 4, very tentatively titled, ‘Where Are Our Elected Leaders?’ is nearing completion; and, Chapter # 5 should be the most exciting episode ever. Why? A Plan! That’s right, since no cogent plan is apparently forthcoming from Washington, DC., from anyone – anytime soon, some business owners (i.e. ‘People with ‘skin in the game’, as is oft said!) are crafting a new Business Model for the MHIndustry, its’ advocacy organizations, and to a lesser extent, the LLCommunity asset class. Hopefully, both chapters will debut sometime during January and February 2010. Want to participate? Here’s how! Pen your ideas, regarding what you think and believe it will take to ‘Save Our Industry’ and email or mail (GFA c/o Box # 47024, Indianapolis, IN. 46247) them ASAP! Remember; the premise towards which we’re focusing our attention these days is how to counter:

 ‘Imagine No New HUD Code manufactured homes by year 2010!’

 Frankly, the most frequent rejoinder I’m hearing and seeing (in letters and emails) these days is,  “George, you’re being too generous with the premise time frame. Frankly, I don’t see new HUD Code homes being manufactured and shipped beyond year 2015!” Yikes! Do YOU see our lot as being that bad? If so, run – don’t walk – to the nearest computer and get your ideas and suggestions off to me right away! If not, I’d still like to hear why. GFA

 And if you’re really caught up in this national conversation about the present and future of the HUD Code manufactured housing industry, you’ll want to be present at the Manufactured Housing Institute’s Winter meeting in Savannah, GA., on 2 February 2010. Why? Because ‘If you’re not at least attempting to be, or become, part of the solution to our industry’s ills, you’re likely part of the problem!’ Be there, in part, to challenge William Matchneer, HUD’s Associate Deputy Assistant Secretary for Regulatory Affairs and Manufactured Housing, as to why that federal agency appears to work so hard to stymie manufactured housing’s acceptance as housing (vs. trailers) by dint of not fully implementing the Manufactured Housing Improvement Act of 2000 (‘MHIA@2000’), refusing to name a noncareer administrator (instead of him) to oversee the work of the Manufactured Housing Consensus Committee (‘MHCC’)! To register, phone Thayer Long @ (703) 558-0678…he’s on vacation this week, so you’ll likely have to leave a message. And, while you’re at it, phone Danny Ghorbani, executive head of the Manufactured Housing Association for Regulatory Reform (‘MHAR’) and request to be put on his email mailing list for his group’s ‘Watchdog’ warnings about HUD’s latest machinations and maneuverings. (202) 783-4087. See you in Savannah? Hope so!

 Postscript II.

 Savvy MHIndustry & LLCommunity businessmen and women already subscribe to the Allen Letter Professional Journal; in part, because they know at this time of year they’ll receive the 21^st annual ALLEN REPORT (a.k.a. ‘Who’s Who Among LLCommunity Portfolio Owners/operators Throughout North America!’) as a lagniappe (‘freebie’) with the January issue of the newsletter! Otherwise, the ALLEN REPORT, alone, costs $250.00., so, a savings of $115.05 for those who’ve invested $134.95 in an annual subscription to ALPJ. It’s not too late! The January issue of the newly reformatted newsletter will be distributed late this week or next week. Call the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 to subscribe today! Credit card orders encouraged.

                                                            *****

 George Allen, Realtor®, CPM®, MHM

Consultant to the Factory – built Housing Industry &

The Landlease Community Real Estate Asset Class

Box # 47024

Indianapolis, IN. 46247

(317) 346-7156

 

                             NO  MORE  SOFTBALLS!

 

Chapter # 3 ‘The Manufactured Housing & Landlease Community Gantlet*1

 

Blogger’s Preliminary Notes.

 

• Haven’t read chapters # 1 & 2 of this unfolding, punishing tale? It’s highly recommended you access archived blogs at community-investor.com & read ‘Let’s Make History Together!’. It contains ‘The Near Perfect Storm Manifesto’ and premise toward which this and subsequent chapters are and will be focused. GFA

 

• Don’t overlook the End Notes to this week’s Blog. They contain pithy information rounding out points made throughout the body of the material.

 

*****

 

            Echoing the premise of the widely read ‘Near Perfect Storm Manifesto’, yet another veteran business owner recently opined: “We need (as an industry & asset class) to wake up or die!”*2   So, what have other entrepreneurs and senior corporate executive peers been saying and penning these past few weeks?

 

One long experienced, hands – on, Chicago – based respondent put it this way:

 

1. “We must get back to our roots of (housing) affordability, customer satisfaction, and quality of product and service! There are some landlease (nee manufactured home) community owners/operators doing VERY WELL these days because they routinely deliver core values and more, to their customers and residents.

 

1. LLCommunity owners/operators MUST finance their own home sales and or have ‘skin in the game’ (via recourse), when it comes to marketing new homes on – site. There’s no financing White Knight coming to save us anytime soon!

 

1. The model of how LLCommunities ‘work’, from several perspectives, must be rethought. The old days are gone, and the dinosaurs of the asset class (including me), must wake up to a new reality! Rent raises must be curtailed; massive capital infusions used to build and improve infrastructure to support new homes and site upgrades; and, a new breed of professional property managers is needed to better run our properties. The economic, political and social landscapes or our Business Model must change. (lightly edited. GFA)

 

While I generally agree with this colleague’s assessment of, and challenge to, our existent realty and home sales Business Model, let’s view the matter from a broader perspective:

 

• Yes, many veteran LLCommunity owners/operators are doing VERY WELL these days, frequently selling new and resale homes on – site, often engaging in one form or another of self – finance*3, using excess cash flow from the property proper, having paid down or retired their original or refinanced real estate mortgage. On the other hand, some veteran owners/operators have been greedy, raising site rent far above the traditional 3:1 ratio (apartment unit rent 3X LLCommunity site rent), resulting in severely declining physical and economic occupancy, and inability to pay operating expenses and mortgage payments.

 

• Some newer LLCommunity owners/operators are struggling to survive because they valued and acquired one or more properties based ‘on the (rent increases to) come’; and, being novices to the asset class, made costly errors in overstaffing. However, other new owners/operators are doing ‘Just fine, Thank You’, having paid NOI – supportable prices for their investments, then parlaying this with past successful income – producing property management experience.

 

This from a recently retired HUD Code & mod manufactured housing executive:

 

“I believe strongly we, the MHIndustry, have not just lost our way, we’ve lost our cheese!*4 After reading ‘The Near Perfect Storm Manifesto’ twice, I’ve come to the conclusion, we’ve really lost touch with OUR customer’s housing payment ability. I’m thinking maybe we should want OUT of our current Business Model, trade advocacy associations, and this government – controlled housing product altogether!”

 

“What if we build (this is the easy part) low cost, national code – compliant homes (IRC is a breeze to work in, and outlines every local housing market’s requirements), focusing attention on present resale market for site built homes of the 1950s, 60s, 70s, & 80s? Young, first time homebuyers are flocking to them with payments in hand.”

 

“The LLCommunity folk will have to start using long term leases, protecting the value of their residents’ homes; maybe implement home maintenance contracts; and probably offer other niceties as well.”

 

“We have the land, we have the communities, and all our factories can produce an inexpensive housing product. So, how ‘bout if we join the enemy – the NAHB*5, who likely helped put us where we are in Washington anyway, to enhance our collective  power?” 

 

Now there’s a stretch! Others ‘out there’ thinking along similar lines? If so, we need to hear from you right away. If not; OK, but your reasoning and ideas to Save Our Industry need to be heard and expressed as well. Think about it. What other forum do we have today, with the passing of the Manufactured Home Merchandiser and Modern Homes magazines? None really. If you don’t know why, ask me personally sometime….

 

            Here’s a conundrum (‘a hard question or riddle’) of sorts. The numerous written and verbal responses to aforementioned manifesto and blog, i.e. Chapters # 1 & 2 of the MHousing & LLCommunity Gantlet, have been 100 percent positive in nature and content. Frankly, I didn’t expect such overwhelming agreement and support. So, I went in search of contrary points of view and perspective, and found a few. But while I encouraged written expression of their converse views, offering to protect the identities of those expressing opinions, the dissenters have remained pococurante. Go figure.

 

            Where does all this leave us today? Frankly? On the national advocacy scene, ‘nigh lost and without a reliable, true compass!’ How so? Allow me to explain and recommend a course of personal and corporate action:

 

• Manufactured Housing Association for Regulatory Reform or MHARR, a.k.a. MHIndustry’s regulatory ‘watchdog’ in Washington, DC., has one membership classification: HUD Code housing manufacturers; oft referring collectively to other segments of the MHIndustry as being ‘the aftermarket’. While smallest of the two national advocacy bodies, it tenaciously fights what it views as regulatory – related, cost – increasing threats to the ‘affordability’ of factory – built housing. Danny Ghorbani @ (202) 783-4087.

 

• Manufactured Housing Institute or MHI, represents all segments (manufacturers, suppliers, retailers, lenders, and LLCommunities) of the MHIndustry & LLCommunity asset class. Given the heterogeneous nature of its members, its’ resources are spread thin on one hand; and, disagreements on policy (e.g. land use regulations) sometimes occur. Since 1996, MHI’s National Communities Council (‘NCC’) has ably met the national advocacy needs of LLCommunity owners/operators, though it’s presently without a senior executive. Thayer Long @ (703) 558-0678.

 

• At present, there’re a half dozen significant industry and asset class issues, serving as regulatory and self – imposed brickbats, playing active roles in the MHIndustry & LLCommunity Gantlet. While there’s disagreement between MHI & MHARR, as well as among industry segments, as to appropriate order of priority of these issues, they certainly include: severe present paucity of institutional realty mortgage and personal property (‘chattel’) financing for LLCommunities and homes respectively; the quiescent state of the Manufactured Housing Improvement Act of 2000, a.k.a. ‘MHIA@2000’, and its’ intended functionary, the Manufactured Housing Consensus Committee or MHCC, still sans the non – career administrator mandated by Congress a decade ago! And then there’re the issues of national ‘brand promotion’, as in HUD Code manufactured housing being the most affordable and desirable form of factory – built housing; and, IMAGE. You know, the ‘T’ thing, and how to best deal with it effectively. And the list goes on…

 

• Some recommended action steps. Get on MHARR’s email distribution list, read their position papers, and ask for another or supporting point of view from folk at MHI. For that matter, join and become a direct, dues – paying member of MHI, especially the NCC if you’re a LLCommunity owner/operator, and involve yourself in these ‘industry discussions’, particularly the upcoming quizzing of William Matchneer, Associate Deputy Assistant Secretary for Regulatory Affairs and Manufactured Housing, at MHI’s Winter meeting in Savannah, GA., on Tuesday, February 2^nd ! Does all this sound daunting? Well, help is on the way…

 

• Probably with the February issue of the Allen Letter Professional Journal, you’ll meet the MHIndustry & LLCommunity savvy writer who’ll be parsing MHARR & MHI press releases, newsletters and articles, to pen accurate, centrist monthly columns – for YOU, describing what these two advocacy bodies are attempting to communicate regarding political and regulatory matters inside the Washington beltway. FYI; the anonymous columnist has decades of experience in MHousing, LLCommunities, and MHAssociation leadership, and is active in the MHBusiness today! If not already subscribing to ALPJ, phone (317) 346-7156 or subscribe online via community-investor.com  You don’t want to miss this!

 

Well, now you know almost all there is to read and hear, today, about the MHIndustry & LLCommunity Gantlet that, in large measure, prevents us from coming anywhere near to realizing our affordable housing production and shipment potential (‘Think housing finance, regulatory environments, & historic lack of sensitivity to homebuyer needs and wants!’), and achieving Max ROI relative to the LLCommunity asset class (‘Think housing finance, unwillingness to adjust site rent to fit local economic conditions, & historic lack of professional property management on – site!’) investment. Do you get the idea, that to move upwards from this very nadir of historic MHousing production & shipments, we’re going to have to stop playing softball with those contributing to the confusion described in previous paragraphs, and commit to make some changes from both the top down and bottom up (That’s YOU and ME!)? 

 

As always, we solicit your input by phone, email, FAX (317)346-7158 and letter: GFA c/o Box # 47024, Indianapolis, IN. 46247.

 

Postscript.

 

Last week’s Blog encouraged readers to attend Georgia Manufactured Housing Association’s second Super Symposium & Showcase of Homes in Forsyth, GA. Well, guess what? The Symposium was a complete SUCCESS. More than 120 MHIndustry & LLCommunity folk were in attendance, visiting five HUD Code and one Park Model home, along with a line of Bennett Building Systems storage sheds, for renting to LLCommunity residents! The S.A.F.E. Act of 2008 got worked over pretty well, and property owners/operators were challenged to ‘Really Get Communities READY Before Selling and Financing New and Resale Homes On – site! For more information, and copies of materials shared, contact Jamie Hammons @ (770) 980-6393. The initiator of the Super Symposium concept, now a popular national industry trend, James Keller of the IMHA/RVIC was honored at this seminal event! Where’s next Super Symposium? For sure, in Albany, New York, @ 30 & 31 March 2010. For information, contact Nancy Geer of the New York Housing Association @ (518) 867-3242. Tell her George Allen told you to call! And I hear a fourth Super Symposium & Showcase of Homes is in the planning stage in Indiana (317) 247-6256X12. How ‘bout your state? Every state MHAssociaiton should do this for their members, and it’s an effective means of recruiting new members! Also, there’s a HOW TO checklist being developed, describing steps to effecting one of these stellar events. Check with Jamie Hammons or Jim Keller.

 

                                                            *****

End Notes.

 

1. Gantlet. “a form of punishment or hazing in which the victim (MHIndustry & LLCommunity asset class) runs between two lanes of people (e.g. politicians & regulators) and is struck by them (legislatively & regulatorily) in passing; a series of unpleasant things or events.” The New American Webster Handy College Dictionary.

 

1. Premise. “Imagine No New HUD Code Homes Manufactured in Year 2020!” or, in other words: “The Not So Secret Scheme to Regulate and Politic HUD Code Manufactured Housing Out of Business by the Year 2020…” There it is. Someone finally said and wrote what many have been thinking since 2005.

 

1. “Self – finance is ‘captive finance’ when third party collects payments and services chattel mortgage, and ‘buy here – pay here’ when LLCommunity does so.” From MHIndustry & LLCommunity Lexicon pocket card. For FREE copies of this and other training aids, call MHIndustry HOTLINE: (877)MFD-HSNG or 633-4764.

 

1. Who Moved My Cheese by Dr. Spencer Johnson.

 

1. National Association of Home Builders in general, the Building Systems Council (‘BSC’) in particular, at 1201  15^th St., NW, Washington, DC. 20005.

 

*****

 

George Allen, Realtor®, CPM®, MHM

Consultant to the Factory – built Housing Industry &

The Landlease Community Real Estate Asset Class

Box # 47024

Indianapolis, IN. 46247

(317)346-7156

21st annual ALLEN REPORT full of timely ‘stats’ & surprises!

This ‘Who’s Who Among LLCommunity Portfolio Owners/operators in North America!’ will be distributed free, as a lagniappe, in January 2010 issue of newly reformatted Allen Letter Professional Journal; or available for purchase, for $250.00 via community-investor.com, & by phoning the MHIndustry HOTLINE: (877)MFD-HSNG or 633-4764 or (317) 346-7156

We’ve all heard it said: “Today, just about every landlease (nee manufactured home) community owner/operator sells, and often self – finances, new and resale homes onto vacant rental homesites to ‘get the (site) rent meter running’! But just how many homes have been sold into these unique income – producing properties to date, and what’s the approximate value of this eclectic mix of new and resale, manufactured and mobile, homes? One billion, two billion, three billion, or more, dollars? Read the 21st ALLEN REPORT (a.k.a. ‘AR’) to find out!

As a manufactured housing or landlease community (‘LLCommunity’) aficionado, are you familiar with, and conversant about, the year old phenom (i.e. ‘BDMs’!); and the emerging trends: Community Series Homes supplanting Developer Series Homes, a new Small Community Owners Forum, increasing role of the industry’s Think Tank, and how Super Symposiums/Showcases of HUD Code Homes (in IL, OH, GA, NY & elsewhere) are replacing larger, more expensive venues like the Midwest Manufactured Housing Show in Louisville, KY? All this is covered in the 21st AR, January 2010!

Were you one of 100+/- LLCommunity owners/operators in attendance at the first National State of the Asset Class (‘NSAC’) caucus in Tampa, FL., on 2/27/08; or, the Historic SUMMIT Meeting between HUD Code manufacturers & LLCommunity ‘players’ on 2/27/09 in Elkhart, IN? If so, you’ll want to read the ‘NSAC update’ in the AR, to decide whether present business conditions, and the future of your investment in this industry and asset class, warrants another critical examination of where we are today, and what we must do soon, to move home shipments off present 50,000+/- nadir (Go ahead, look it up!), ensuring continued supply of new homes for our properties in the foreseeable future! Hint: Only one firm uses network TV to promote its’ brand of homes!

Stats! 125 respondents, out of 500+/- this year! These owners/operators own and or manage 3,160 LLCommunities containing 738,833 rental homesites. The real surprise is how many of these properties and sites are controlled by the ten largest ‘players’ in the asset class. Wanna guess where national average physical occupancy and operating expense ratio (‘OER’) percentages wound up by end of 2009? Hint: ‘Down & Up!’ Believe it or not, three times more new LLCommunities ‘under construction’, but fewer property expansions during 2009 than 2008 – with an unexpected twist in the first instance. And even more numbers with which to compare one’s property portfolio. And don’t forget, all 125 AR respondents are described in terms of home office location, number of properties & rental homesites owned/fee managed, & their geographic spread!

Think you really know and understand the difference between ‘Buy Here – Pay Here’ and ‘Captive Finance’, when it comes to on – site, self – finance of new and resale homes? First comprehensive definitions and descriptions of these financial processes here in AR!

And, if you’ve been following the almost ever changing makeup of our asset class Pride of Young Lions (i.e. ‘High performing acquirers of LLCommunities’), and present status of the Daring Dozen, first identified in January 2005 AR, you’ll not want to miss this thorough update regarding all original ‘players’. And finally; anyone want to guess whether the total portfolio count of rental homesites, controlled by real estate investment trusts (‘REIT’s), grew or contracted during 2009? No hints here.

Bottom line? Where the 20th anniversary edition of the ALLEN REPORT was a two decade landmark look back and forward, at our unique real estate asset class, the new 21st edition not only covers similar, familiar territory, but provides – by far – the most comprehensive look at the generalities and specifics of the property type, so familiar to many of us, as owners/operators, but near wholly unfamiliar to the majority of commercial realty investors and lenders, the realty trade press, even professional property managers!

Reserve your copy today, by subscribing to the new Allen Letter Professional Journal!

POSTSCRIPT.

You’ll not want to miss next Monday’s Blog at community-investor.com Why?

Unless something cataclysmic occurs within the MHIndustry & LLCommunity asset class, it’s nigh time for Chapter # 3 of the unfolding saga ‘Your business future and mine’, first premised in ‘The Near Perfect Storm Manifesto’, followed by (chapter # 2), a Blog at this website titled, ‘Let’s Make History Together!’ Check it out in the archives.

Hint: The working title, today, is ‘No More Softballs!

There’re investigative journalism and op/ed initiatives afoot – well beyond the author of this Blog, preparing to challenge the lackluster and questionable reporting of MHIndustry & LLCommunity news and views. Think about it next time you pick up any of the remaining trade pubs, and peruse online ezines. Ask two questions: ‘Aside from this media, have I met, seen or heard these individuals at work in their claimed specialty?’ And, ‘How many of these folk are presently active on state and national scenes, as dues – paying, meeting attending members, of state MHAssociations, MHI or NCC, the ULI & its’MHCC – all attempting to ‘Salvage and Save Our Industry’?’ If answer to either or both questions is ‘No’, why are you…

FYI. Join your peers at the GMHA’s Super Symposium II/ Showcase of New HUD Code Homes in Forsyth, GA., from 15 – 17 December – YES, this week! Homes from a half dozen manufacturers will be on display, along with seminar presenters telling the hard truths about impending state implementation of the federally mandated S.A.F.E. Act for Mortgage Licensing (Read last week’s Blog for an ‘eyeful’ of what this is all about & how it’ll change the way you’re presently doing business!); ‘How to Know if Your LLCommunity is Truly Ready to Successfully Market, Sell & Self – finance New & Resale Homes On – site!’; and much much more! How can you afford not to be present or represented? Phone Jamie Hammons of GMHA as soon as you read this Blog! (770) 980-6393.

*****

George Allen, Realtor®, CPM®, MHM®
Consultant to the Factory – built Housing Industry &
The Landlease Community Real Estate Asset Class
Box # 47024
Indianapolis, IN. 46147
(317)346-7156

Major WARNING to LLCommunity Owners Nationwide!

Your State’s Eventual Implementation of the Federal S.A.F.E. Act *1
May Bite Your On – site, Housing Self – finance Program in the Butt!

First, the Good News!

Landlease (nee manufactured home) communities have long been considered one of the very best ‘off the investment realty radar screen’ opportunities because (of)

Relatively limited property supply! Think NIMBY, LULU & BANANA.*2

Investor leases only land, so generally fewer and lower operating $ expenses!

‘Recession proof’ reputation when homesite rents are low and homes affordable!

Opportunities for investor to ‘add value’ via on – site sale of new and resale homes, the self – financing of said transactions, and AITR*3

BUT NOW,

The Not – So – Good News!

Relative to the last LLCommunity characteristic cited above, regarding ‘self – finance of (housing) transactions’: Unless a LLCommunity owner/operator is effecting ‘cash only’ deals or transactions with homebuyers, expect your state’s present or near future implementation of the Federal S.A.F.E. Act to require your 100% participation in this new, nationwide licensing system & registry database for residential loan originators! Yes, YOU! And Seriously!

SPECIFICS?

The state of Ohio, thanks to efforts by its’ manufactured housing association (‘OMHA’) is ‘ahead of the curve’ where the new federal program is concerned, as their state’s law becomes effective January 2010. At a recent Super Symposium on this very subject, I asked Ken Rishel of Precision Capital to outline S.A.F.E. Act related measures about which LLCommunity owners/operators and MHRetailers should be aware in the immediate future.

If not presently involved in any form of self – finance, but use outside lenders like Triad Financial Services or 21st Mortgage Corporation, as sources of financing for new and or resale home sales in one’s LLCommunity, and sales people are advising customers about lending sources, and assisting in completion of credit applications, the business entity employing the sales staff is likely going to need to be registered as a Mortgage Broker*4 in the state where said property is located. And not only that, sales personnel are going to need to be trained, likely tested, and licensed as Mortgage Loan Originators.*4

If presently involved in self – financing of homes, the business entity may need a regulated loan license*4, a Mortgage Lender Registration*4, and sales persons will likely need Mortgage Loan Originator’s Licenses.*4

In addition to state registration and licenses, there’s also a requirement for national registration, through NMLSR.*5

In certain states, relief may be available if a business entity’s sales people are prohibited from assisting customers seeking financing, except through direction to a website or telephone number of an outside licensed lender who handles the transaction in toto. If your self – finance is handled entirely by a licensed entity, the same exemption may also apply.

The servicing and collection of existing loans is not ‘grandfathered’ in the S.A.F.E. Act. And ongoing mortgage servicing and collections must be handled by a properly licensed Mortgage Lender.*4

If a business entity operates in multiple states, it must be registered, licensed and bonded in each of those states.

The basic requirements*4, pursuant to licensing and registration under the S.A.F.E. Act require fingerprinting by an approved source, a personal history given under penalty for perjury, a credit check, an FBI background check, a civil records check, bonding, and pre – licensure training (education) and successful passing of a standardized test. There’s also a continuing education requirement.

Failure to comply is a felony with a substantial fine*4, accompanied by fine for each day of violation, and an opportunity for the borrower to sue all parties involved.

If you own/operate one or more LLCommunities and the content of this Info Blog is disturbing to you, – as it should be – contact one or more of the following resources for information and assistance:

Ken Rishel, Precision Capital @ (217) 971-3968

Tim Williams, Ohio Manufactured Housing Association @ (614) 799-2340.
Request a copy of Symposium outline describing Ohio’s new law, as a template.

Thayer Long, Manufactured Housing Institute and National Communities Council @ (703) 558-0678. Join the NCC division to stay abreast of this evolving matter!

Tim W. Williams, president, 21st Mortgage Corporation @ (800) 955-0021

Don Glisson, Jr., Triad Financial Services, Inc. @ (904) 223-1111

And finally; if you own/operate one or more LLCommunities in the U.S. or Canada, know that the 21st annual edition of the ALLEN REPORT (a.k.a. ‘Who’s Who Among LLCommunity Portfolio Owners/operators in North America!’) will be available 1/1/2010 for $134.95 from PMN Publishing @ (317) 346-7156, or free to subscribers to the Allen Letter professional journal (one year subscription also $134.95) – same phone #. Begin year 2010 informed; read all about the MHIndustry & LLCommunity ‘News, Views & How To’s’ in the Allen Letter professional journal each month!

End Notes.

1. ‘Safe And Secure Enforcement’ for mortgage licensing act of 2008; S.A.F.E. Act

2. ‘Not in my back yard!’, ‘Locally Unwanted Land Use!’ & ‘Build Absolutely Nothing Anywhere Near Anybody!’ Acronyms commonly used to describe local regulatory barriers to affordable housing of all types!

3. ‘Alternative Income to Rent’ measures per Allen Cymrot; cited in Landlease Community Management, available from PMN Publishing: (317) 346-7156

4. These terms and precise requirements related thereto, are going to vary from state to state, as will the penalties for violation of statutes. Seek advice from competent counsel, or a consultant specializing in compliance and finance – related issues for specific information

5. National Mortgage Licensing System and Registry or NMLSR

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

MHIndustry HOTLINE: (877)MFD-HSNG or 633.4764 This number is the primary source of MHIndustry & LLCommunity information shared in this Info Blog, the Allen CONFIDENTIAL! business newsletter, and the Allen Letter professional journal! Call!