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

December 18, 2014

26th ALLEN REPORT & ‘New Breed of MHRetailer & Lender’

Filed under: Uncategorized — George Allen @ 5:19 am

COBA7® via Blog # 328 Copyright @ 21 December 2014

Perspective. ‘Land-lease-lifestyle communities, a.k.a. manufactured home communities and ‘mobile home parks’, comprise the real estate component of manufactured housing.’

This blog posting is the primary national advocacy voice, official ombudsman, research reporter, & online communication media for all LLLCommunities in North America!

To input this blog &/or affiliate with Community Owners (7 Part) Business Alliance, a.k.a. COBA7®, use Official MHIndustry HOTINE: (877) MFD-HSNG or 633-5764.

Introduction to this week’s COBA7® blog posting at website:


Coming Soon: 26th annual ALLEN REPORT

‘Biggest & Best Ever, Thanks to You!’

How so? Five good reasons. 1) Benchmark statistics have been culled from the strongest questionnaire response in the 26 year history of the ALLEN REPORT; 2) included is a comprehensive chronicle of the 2014 ‘Dawn of NEW ERA for land-lease-lifestyle (a.k.a. manufactured home) communities!’; 3) an inaugural feature of rental unit and contract sale home inventories on-site; 4) exciting, new national LLLCommunity inventories by state; and, 5) first ever, Standard Metropolitan Statistical Area (‘SMSA’) local housing market homesite rent summaries from Datacomp & MHVillage!

This year’s ALLEN REPORT, a.k.a. ‘Who’s Who Among LLLCommunity Portfolio Owners/operators Throughout North America!’ is also lengthier than previous editions, so will be restricted to a limited print run of 250 copies. Already, 200 of which are committed to Community Owners (7 Part) Business Alliance®, or COBA7® affiliates, a.k.a. ‘MHInsiders’, and individuals/firms who submitted ‘completely filled-in questionnaires’ pursuant to preparation of the ALLEN REPORT.

So, if you want a copy of this history-making 26th annual ALLEN REPORT, affiliate with COBA7® at the Option II level ($544.95), to receive 12 monthly issues of the Allen Letter professional journal and a dozen Signature Series Resource Documents or SSRDs – the first of which, distributed during January 2015, is the ALLEN REPORT. The remaining 11 SSRDs? Directories of lenders, HUD-Code home manufacturers, real estate brokers, freelance consultants, MHIndustry print & online media, and all national advocacy organizations; as well as the industry’s Official terminology Lexicon or Glossary.

To affiliate with COBA7®, simply telephone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. There is no better value from anyone else, for LLLCommunity owners/operators, anywhere in the manufactured housing industry!


‘New Breed of MHRetailer & Lender’

The business model trend is indeed here, but no one is measuring or tracking its’ growth!

According to the 26th annual ALLEN REPORT, the majority of land-lease-lifestyle (a.k.a. manufactured home) community portfolio owners/operators now routinely purchase new Community Series Homes, or CSH Models – and other models of HUD-Code manufactured homes, from factories; for installation, sale, and (oft times) seller-financing within their properties. Doing so, ensures stable, growing physical and economic occupancy cum profitability. Hence the business model trend moniker of ‘New Breed of MHRetailer & Lender’.

This has been an evolving trend, not an overnight phenomena with a specific ‘start date’. The evolution began when easy access to chattel capital from independent third party lenders nearly ended, soon after the turn of the century, and as independent (street) MHRetailers disappeared from many local housing markets – due to economic pressures, or acquisition and conversion into ‘company stores’. Savvy LLLCommunity owners/operators of institutional investment grade properties (i.e. 200+ rental homesites in size*1) realized they had to become controllers of their business destinies, no longer reliant on local MHRetailers to fill vacant rental homesites in their properties – as had been the practice for 50 years.

The turning point, among LLLCommunity owners/operators, occurred on two specific occasions precisely one year apart.

On 27 February 2008, a hundred or so LLLCommunity owners/operators convened at the FountainView LLLCommunity in Tampa, FL., to chart their destiny, relative to the manufactured housing industry. Result? Five strategies and action areas, along with the mantra: ‘Affordable Housing & Lifestyle’ – engraved on challenge coins given every attendee as a motivating reminder. This event was the first National State of the Asset Class (‘NSAC’) caucus.

A year later, on 27 February 2009, another hundred – this time a mix of LLLCommunity owners/operators and HUD-Code home manufacturers, convened at the new RV/MH Hall of Fame facility in Elkhart, IN., to agree on what it’d take for the former to buy more homes directly from the latter! Answer? The Community Series Home, or CSH Model.*2 The new housing design was not identified by name, until six months later, at the annual Networking Roundtable, where several CSH Models were on display. And this NSAC caucus is generally acknowledged as being the ‘line in the sand’ moment for LLLCommunity owners/operators, to (eventually) displace independent (street) MHRetailers, in many parts of the U.S., as primary wholesale buyers of manufactured housing.

It’s now six years later, and among property portfolio ‘players’, on-site home sales and (oft times) seller-financing – under the watchful eye of state and federal financial regulators, has become commonplace. So commonplace, that in several instances, large portfolio owners/operators have more than 10,000 rental units in place throughout their properties. By and large, however, the average number of rental homes and contract sale units on-site, among portfolio folk, hovers in the neighborhood of 375 apiece, relative to overall portfolio presence.*3

But that’s not the whole story. It’s estimated maybe, at most, 15 percent of LLLCommunities are actively selling and self-financing new homes on-site; while the remaining 85 percent (i.e. mostly Mom & Pop-sized investment properties) are not so engaged, for a variety of reasons (e.g. passive investors, lack of knowledge, inexperience, and lack of capital). The question becomes: Should and can this ‘vast majority of property owners be educated and motivated to buy into this trend, stimulating much-needed increase in shipment volume throughout the MHIndustry?

Besides ‘that question’, much else is not well! Here’s a cacophony of disparate shortfalls within and throughout the manufactured housing industry and LLLCommunity realty asset class, going into year 2015:

• No one is ‘keeping score’, that we know of, relative to the actual shipment volume of new HUD-Code homes going directly into LLLCommunities throughout the U.S. Why is this important? If we, as an industry, knew the percentage of new home shipments (e.g. ‘What percent of 60,228 in 2013?’) going into LLLCommunities, it’d be instructive as to activating the ‘quiet 85 percent’ of LLLCommunity owners/operators. Anyone ‘out there’ have any practical solution(s) to this lack of knowledge? MHI. How ‘bout you?

• Home manufacturers, as busy as some of them are today –given the reduced number of factories working thru backlogs of home orders, appear to be cutting their nose off in spite of their face, where product pricing, including freight (gas) costs are concerned. One, at times, even senses being ‘taken advantage of’, as the ‘New Breed of MHRetailer & Lender’, still naïve as to’ industry past practices’ with erstwhile independent (street) MHRetailers. Here’s an area where the MHARR might be of assistance.

• Home finance principles and regulations, as well as the securing of fresh chattel capital remain new, often confusing educational challenges for LLLCommunity owners/operators of all sizes – except for perhaps the largest of the property portfolio firms. Fortunately, we have resources like Rishel Consulting, teaching ‘How to Raise Capital and be a Compliant Lender’, as well as Spencer Roane, MHM®, holding forth on the attributes of lease-option.

• And there’s this very real but rarely talked about caution, relative to veteran LLLCommunity owners/operators, who’ve structured all sorts of deals, over the years and decades, to facilitate home ownership/site leasing by individuals and families least likely to qualify for home financing in their local housing markets. These veterans continue to ‘go it on their own’, not so much out of greed – though that can be a problem, but the genuine concern, that if they don’t ‘fit deals to their customers’, they’ll wind up contributing to the homeless population of their local housing market. Think about it. Our $ regulators should, but evidently don’t.

• Of late, there’s also increasing concern expressed that, 1) given 80+/- percent national market share is enjoyed by the Big Three-C HUD-Code home manufacturers; 2) the recent surprise departure of U.S. Bank – and maybe more, from the chattel capital lending scene; and, 3) dominance of national advocacy affairs in one entity, by a few salaried executives from as few companies and property portfolios, that overall sensitivity to business and market needs of grassroots businessmen and women, from all segments of the MHIndustry, is going begging! Proof? Repeated calls for a National Strategic Planning meeting are ignored by two of three national manufactured housing trade bodies, the two dominated by HUD-Code home manufacturers.

The messages conveyed and suggested by these five bullet points? This/these questions:

Where do we go from here, relative to this business model trend change, from independent (street) MHRetailers being primary customers of HUD-Code home manufacturers, to the New Breed of MHRetailer and Lender emerging? The trend needs documentation; home manufacturers need to treat their new business partners with more respect; home finance and chattel capital sourcing remain more a mystery than applied methodology; and, national advocacy bodies need to realize ‘life is more than just lobbying in the nation’s capitol’ – they must also be about communication and service!

So, where do we go from here? Nathan Smith and Mark Weiss, esquire; are you listening, reading, and understanding what’s going on – and at times, not going on, throughout the manufactured housing industry and land-lease-lifestyle community asset class?

(MHARR. You can no longer cop out by saying LLLCommunities are not your members. They’re not; they’re now – or should be, your home buying customers, worthy of your attention!)

The Louisville MHShow (KY) occurs a month from now? What’s stopping you two from laying the groundwork for a much-needed National Strategic Planning Meeting for manufactured housing and land-lease-lifestyle community-affiliated businessmen and women from throughout the U.S., willing to pay their own way to a two day venue where the preceding – and other issues, are brought into the open and discussed publicly for the first time – with an eye to resolution, planning, and recovery?

End Notes:

1. See page # 68 (Official MHIndustry Lexicon & Glossary) in Bruce Savage’s The First 20 Years! Published by PMN Publishing, Indianapolis, IN., 2013.

2. Community Series Home, or CSH Model is characterized as having at least one WOW! design factor to get the homebuyer’s attention; and an array of durability enhancing features that facilitate changes in lessees and owners, with a minimum of home repair by the LLLCommunity owner/operator

3. 26th annual ALLEN REPORT, a.k.a. ‘Who’s Who among LLLCommunity Portfolio Owners/operators Throughout North America!’, available for $544.95 from PMN Publishing, Indianapolis, IN. (317) 346-7156

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