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

December 5, 2010

Solstice Communities; Housing Affordability; & Consequences of Illiquidity

Filed under: Uncategorized — George Allen @ 11:29 am

Meet SOLSTICE Communities!
What YOU Said About ‘Housing Affordability’ Responsibility!
Lack of Liquidity Kills Again & Again!


It’s about time! Not really; it’s about lifestyle, rebranding, and challenging an entire investment realty asset class – to ‘take to the high road’, from this day forward, toward stellar corporate image; impeccable reputation building; and superior, all around, on the job sales, leasing and resident relations performance and curb appeal!

With that said, meet SOLSTICE Communities! A dictionary definition of SOLSTICE suggests a ‘turning point’ or culmination; and that’s what SOLSTICE communities is all about; the culmination of all that’s good – to – great about the landlease (nee manufactured home) community lifestyle; and, by example, a turning point challenge to all other property portfolios of this income – producing property type!

Here’s what the totally new website, launched 1 December 2010, has to say…

“DISCOVER America’s best places to retire, at Solstice Communities! With more than 25 retirement communities across the country. Solstice offers free – spirited, vacation – style 55+ living that’s anything but retiring.”

To learn more about this rebranded, manufactured housing industry pace setter, go to


Here’s what YOU said about ‘housing affordability’ responsibility in response to last week’s blog posting at this website:

“Great blog!!!!! Thanks; I am gong to use this (housing affordability) discussion at our next sales meeting. KL

“Well crafted, and you are right. Morally, we should have stuck with the old 25% rule (i.e. No more than 25% of a homebuyer or household’s annual income to go for housing) that presaged the FHA 235 program, where it was possible to max out at 43%. Indeed, we (manufactured housing industry) are our own worst enemy!” (lightly edited. GFA) NB

“Very interesting; an obvious dichotomy (i.e. ‘subdivision into two parts’) for the (manufactured housing) sales person, Greed versus Ethics; how novel. We have seen this before in so many industries, and I am sure we will see it again. Sure is a compelling story for the ‘packaged deal’, and need for an industry wide movement to embrace a new approach to doing (manufactured housing) business!” RT. (Parenthesis added for emphasis. GFA)

“Well written article with many valid points. Unfortunately, it will again fall on deaf ears because, as you know full well, this entire (manufactured housing) industry, from day one, has been built – and is now being destroyed, by one simple Latin phrase: Caveat emptor! (‘Let the buyer beware!’) Success, in the minds of most, now depends on finding the next stupid (home) buyer and the next stupid (chattel) lender. ‘There must be some still out there!’ is their battle cry.” DR

So astute reader, is this observer’s remarks indeed ‘a bona fide reality check’ or ‘gross, unwarranted exaggeration’ about how we sell and finance new and resale homes throughout the MHIndustry today? Are YOU ready to ‘take the pledge’? To sell and finance new and resale homes at prices points truly affordable to prospective homebuyers and households, based on their annual gross income (‘AGI’) or a local housing market’s annual median income (‘AMI’)!

And with that in mind, reader commentary continues…

“As someone who really likes the ‘Ah Ha! & Uh Oh!’ formulae (For estimating maximum recommended ‘affordable’ & ‘risky’ purchase prices for new and resale, privately – owned homes of any type, sited on realty owned fee simple with home, or leased, as in a landlease community!), and given the importance of this week’s topic, there’s one more following point. One might say the reason ‘affordability’ is an issue at all, is because of the near complete lack of an exit strategy for homeowners and lenders, akin to site – built (i.e. ‘realty – secured’) housing.” Even if a homebuyer ‘overbuys’, in the latter instance, value appreciation and presence of a secondary home sales market, driven pretty much by Realtors®, one can generally exit their housing experience with a profit (notwithstanding dismal housing regional housing markets of the past few years). But what about the manufactured housing world? Reality for us; there’s no functioning secondary home sales market characterized by value appraisals based on market comparables and not replacement (book) values, availability of widespread multilisting services, existence of escrow ‘closings’, readily available third party chattel financing, nor even a cadre of trained, licensed salespersons.

Know what? There’s even more; and we’ll revisit this timely and strategic subject again next week. And guess who responded, at length, on this very topic? Grayson Schwepfinger. Yes, the manufactured housing industry pioneer quoted in the 1970s How to Sell Manufactured Housing text by Gary Pomeroy. As some of you know, particularly those who attend the annual International Networking Roundtable, ‘Schwep’ continues to be active in the manufactured housing and landlease community segments of our industry/asset class. So, don’t miss his observations about ‘whose responsibility for housing affordability’ in next week’s blog. And there’s even more, as a popular CPA portfolio owner/operator too speaks out on this subject and shares his/her methodology….

Have something YOU want to say? Respond to this blog via website or the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or (317) 346-7156.


Yes,’ lack of liquidity kills again – and again’! By now, you likely know “Palm Harbor Homes, Inc., announced on Monday, November 29, 2010, it and five of its’ domestic subsidiaries…filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. The Company is taking this action to provide liquidity and partner with Fleetwood Homes, Inc., a subsidiary of Cavco Industries, Inc., through a sale process pursuant to Section 363 of the Bankruptcy Code in order to support ongoing operations.” For additional information, phone (888) 220-3896.

And yet another Special Announcement, also driven by lack of liquidity, is in the offing. If you’re reading this blog posting and are not a paid subscriber to either or both the Allen Letter professional journal and the Allen CONFIDENTIAL!, you should consider doing so in the very near future.

Why? It’s been a thinly veiled secret for years; no, make that decades, that most of the services and products created by and associated with GFA Management, Inc., dba PMN Publishing, have been subsidized by one or more major portfolio owners/operators in the landlease community (‘LLCommunity’) asset class. Apparently, that all may be about to change by the end of this month, December 2010, when the subsidy ends.

If so, our present options are pretty bleak but straight forward:

1) Immediately start charging what’s necessary to keep GFA/PMN’s routinely delivered services and products financially ‘liquid’, e.g. Significantly increase subscription rates of aforementioned monthly newsletters; and, effective immediately, charge a premium, possibly $1,000.00, for the previously ‘free’ (in this case, 2011’s 22nd annual) ALLEN REPORT (a.k.a. ‘Who’s Who Among Landlease Community Portfolio Owners/operators in North America!’) – a highly unlikely happenstance, as most portfolio folk have grown accustomed to these bargain – priced (subsidized) resources.

2) Seek and identify an immediate replacement of the financial subsidy, to the amount of at least $3,000 per month. Interested? Let me know via (317) 346-7156. Am I hopeful? No. Wishful? Yes. But tough times make for hard finds.

3) Transfer or sell some or all the present half dozen GFA/PMN profit centers to another ‘for profit’ firm, or not for profit national platform – but here, ‘time’ is now the effective barrier to this happening.

4) Once operating funds run out, simply go out of business and fully retire. The obvious shortfall to this option, where my ‘friends in the LLCommunity business’ are concerned, is the complete loss of valuable resources, opportunities and contacts (e.g. 500+/- name exclusive North American data base of portfolio LLCommunity owners/operators) cultivated over the past three decades, and more…

Bottom line? To be candid, I did not see this day coming! I’d long hoped to gradually ease our way out of the LLCommunity consulting/publishing business; watching most or all that GFA/PMN created and grew, continue as an integral part of a manufactured housing – related, not for profit national platform. While that process indeed has barely begun, it’s now unlikely the funds (subsidy) will be in place, at the first of the year, to see that proposal through to a logical, practical, and agreeable conclusion. And in the midst of the doldrums the manufactured housing industry finds itself today, launching a new business enterprise, product or service, to pick up the financial slack (e.g. REO fee management), is simply impractical at this time!

At the very least, I’d appreciate your thoughts and suggestions on this topic. GFA

George Allen, Realtor®, CPM®Emeritus, MHM
Consultant to the Factory – built Housing Industry &
The Landlease Community Real Estate Asset Class
Box # 47024
Indianapolis, IN. 35247

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