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

November 4, 2012

Beware Faux Management Consultants!

Filed under: Uncategorized — George Allen @ 5:06 am

Blog # 218 Copyright 2012 4 November 2012

Perspective. ‘Land lease lifestyle communities, a.k.a. manufactured home communities, & earlier, ‘mobile home parks’, are the real estate component of manufactured housing.’


WARNING! Land Lease Lifestyle Community Owners/operators
Beware of Faux Management Consultants!


More Differences Between Small & Large Owners/operators of
Land Lease Lifestyle Communities….


Initial Blog Reader Responses to ‘A Lesson in Growing & Caring for One’s Reputation’, from Management 101, for Land Lease lifestyle Community Owners, Property Management Executives,
Regional & On – site Managers & Others!



WARNING! Land Lease Lifestyle Community Owners/operators
Beware of Faux Management Consultants!

They’ve resurfaced again. Sometimes they’re unemployed land lease lifestyle community on – site and regional managers looking for work, other times interlopers from other segments of the manufactured housing industry, even other income – producing property types. Irregardless, they hang out their shingle as independent, freelance management consultants, oft promising to quickly fill vacant rental homesites; trim operating expenses; in effect, maybe executing the turnaround or rehabilitation of an ailing or management – abused, income – producing property. A desirable end game, for sure; just be fully aware of to whom one is entrusting this multi million dollar real estate investment! More later….

This phenomena pops up every ten or so years, as the LLLCommunity realty asset class suffers through the ‘down stage’ of an economic life cycle. For example; we saw this in the late 1970s, as the manufactured housing industry adjusted to HUD’s new performance – based national building code (Causing new ‘mobile home’ shipments to plummet from 575,940 in 1972 to 250,000+/- by the end of the decade), initially resulting in tens of thousands of newly constructed ‘mobile home parks’ going into foreclosure as the historically heavy flow of new homes dried up.

We saw a similar, though not as massive adjustment in the late 1980s, after the Federal Tax Code was changed in 1986, forcing limited partnership syndicators to market the ‘profitability’ of their deals, rather than ‘tax losses’ heretofore. That raft of freelance consultants had their work cut out for them, as they were forced to implement basic principles of professional real estate management to salvage and then rebuild profitability. That time around, compared to the decade before, it was easy to spot the charlatans, as they were forced to quickly produce positive results or quickly move on.

A decade later, at the end of the 1990s, following a second REIT wave (mid – 1990s), LLLCommunity income – producing properties as a whole, enjoyed – albeit only for a brief period of time – the statistical and historical acme (highest point) of national rental homesite physical occupancy, at 95 percent! And if we needed any independent consultancy advice at the time – which we did not get, it should have been as a loud and stern Warning, to stop going down the slippery slope of predatory (chattel) lending that had taken the manufactured housing industry by storm! And we’re still paying for that misguided era of greed, more than a decade later.

Now it’s 2012, about to morph into year 2013. This time around, thousands of LLLCommunities have slipped into foreclosure, or are approaching that unfortunate destiny, as physical and economic occupancy (Do you understand the critical difference? See *1), for the most part, continues to decline in local housing market after local housing market – but with some notable exceptions. While some of the general occupancy decline is driven by tenant relocation, and near disappearance of independent ‘street’ MHRetailers, as well as many ‘company stores’, from most markets (i.e. The manufactured housing industry’s traditional ‘fillers’ of vacant rental homesites), most of the asset class’ stress comes from a lack of ability to obtain chattel (personal property) financing for new and used homes sold on – site. And with the exception of the innovative C.A.S.H. Program available from the 21st Mortgage Company (Lance Hull @ (800) 955-0021), not much improvement to this situation is anticipated anytime in the near future.

Now here’s where the WARNING about faux management consultants becomes important. Let’s begin by describing what a LLLCommunity owner/operator should look for in a bona fide management consultant, one specializing in this unique income – producing property type, and not from outside this realty asset class. First off, what are his/her property management consultancy capabilities?

One way to measure this is to look for – and verify, nationally – recognized credentials. And there’s really only one; whether the individual is an active Certified Property Manager® member of the Institute of Real Estate Management®. Sure, IREM does not train and certify LLLCommunity managers per se, but their requisite course work and rigorous peer approval system generally ensures a CPM®s application of ‘professional property management principles’ to one’s property challenge – once they know and understand property owner’s goals for a specific location or locations. There are 147 such LLLCommunity specialty CPM®s at work throughout the U.S. today. If listed here, every one of them would be viewed as a ‘household name’ throughout the asset class; as they hail from CA, AZ, OR, IN, IL, MI, PA, FL and beyond. To identify these specialty CPM®s in your region, simply go online to and left click on the Find a Member tab.

Another means is to identify, and then verify, a would be management consultant’s claims of work experience. If you don’t perform this critical step, you deserve whatever results you experience. Right now, there are land lease lifestyle community owners in MI and IL who sorely wish they’d made such a phone call or two, in recent months, before retaining the services of one or more freelance PM consultants.

So, are CPM®s and experience – verified independent consultants, the only credible freelance property management experts afoot these days in the LLLCommunity realty asset class? No. There are indeed some Accredited Community Managers® or ACM®s and Manufactured Housing Managers® or MHM®s out and about; but guess what? Their ‘cred’ too needs to be tested, not only in personal interviews featuring pointed questions (e.g. Do they know how to compute physical & economic occupancy and understand the difference; same with Operation Expense Ratios or OERs – and are they conversant with the LLLCommunity Standard Chart of Accounts and Model OER percentages? If not, how do you and they expect to set performance standards, then measure results against them? *2), and make phone inquiries to previous employers and consulting clients as well. A key issue, relative to an ACM®, is to contact the certifying body, in this instance, the Manufactured Housing Educational Institute, via (703) 558-0653, ensuring the individual has completed all three stages of that educational program and actually been awarded the coveted ACM® designation. Same for the MHM® designee. In this instance, phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 and request verification of MHM® status.

Any other touchstones along the way to retaining the services of a freelance PM consultant? If a formal report is required, as part of the assignment, beforehand request a copy of their Mystery Shopping reports to other clients,
End Notes.

1. Physical occupancy = # rental homesites with homes on them; Economic occupancy = # rental homesites with homes on them where resident’s rent is paid current. For example: 180 occupied sites, divided by 200 rentable sites = 90% physical occupancy; while 160 occupied & paid sites, divided by 200 rentable sites = 80% economic occupancy. The latter calculation is more a performance ‘acid test’ than the former.

2. Want a resource featuring all the MHIndustry & LLLCommunity – related formulae, etc? Phone the aforementioned MHIndustry HOTLINE, and for only $19.95, order the new Book of Formulae, Rules of Thumb, & Helpful Measures for LLLCommunities, MHIndustry, commercial real estate, affordable housing, and realty – secured mortgage origination. PMN Publishing, Indpls, IN. 2012.


More Differences Between Small & Large Owners/operators of
Land Lease lifestyle Communities….

OK, if you reading this line, and did not peruse last week’s blog posting at this web site (; you’d be better – served, right now, to scroll down thru this posting to blog # 217. There read what prompted the responses you’re about to hear in the paragraphs that follow…

Ready to go? The following commentary was penned by a several decades veteran of land lease lifestyle community on – site home sales and property management. He/she begins with a general statement, then focuses on one more key difference between, in this case, large versus small LLLCommunity owners/operators, specifically, consequences foisted on the latter by actions of the former.

“George. I’m sure I’m not the only one who recognizes the 800 pound gorillas (i.e. large property portfolio owners/operators) may be able to take advantage of their strength to float their realty assets along the meandering river of (business) life, but their lack of commitment to the long term health of their assets…and their leadership’s disdain for their customers…will eventually float them over the waterfall.”

“The…characteristic you may have overlooked (in the previous blog posting) rears its’ ugly head in certain local housing markets. When these (owners/operators) make large portfolio transactions, they essentially assign values to each asset (i.e. LLLCommunity), which are less grounded in reality, than in finance. So, trading them like baseball cards, at inflated values, winds up (providing) prima facia evidence for every county property appraiser’s inflated valuation calculations, and ultimately the amount of ad valorem taxes paid by smaller LLLCommunity owners/operators(in the same local housing market) – as well as residents, via pass – ons and pass – throughs. Witness what is happening to _______________ in ____________, after the ______________deal.” (Lightly edited.) GFA

Other blog readers weren’t as verbose; one simply wrote: “ (You) Hit the nail on the head!” – with the characteristics described in the previous blog posting.


Initial Blog Reader Responses to ‘A Lesson in Growing & Caring for One’s Reputation’, from Management 101, for Land Lease Lifestyle Community Owners, Property Management Executives,
Regional & On – site Managers & Others!

Here too, if you didn’t read last week’s thoughts about earning and preserving one’s ‘rep’ in the business world, you might want to stop; scroll back to blog # 217, and read ‘A Lesson in Growing & Caring for One’s Reputation’.

Now today, recalling the totally unexpected, undocumented personal attack, followed with no opportunity to explain or defend myself, during a national business meeting in early October – and hinted at in blogs # 217, 216 & 215, the following ‘rep’ encouragement, coming from a manufactured housing industry veteran, is highly appreciated:

“I know you are too secure to worry about any of this, but I still wanted to remind you that the right people in our crazy industry love and respect you, and that’s not going to change. You are about results, not hot air, and you’ve proven you know what you are talking about, time and time again.” SF

See what I mean? Does take time, effort, and positive results, over time, to cultivate one’s good personal and business reputation. But, from time to time, there’ll be individuals who’ll make an effort to besmirch what one has done, said, penned, or otherwise. And there’ll also be other individuals with which, and to whom, one has proven themselves, repeatedly, who will come to one’s defense, one way or another – just as in the previous paragraph!

And to these latter, supportive individuals, who’ve stepped forward since this recent contretemps and voiced and written of their support, I say a sincere ‘Thank You!’ The status of this affair? Still awaiting a formal response and apologies resolving this sorry matter. GFA

George Allen, CPM & MHM
Box # 47024, Indpls, IN. 46247
(317) 346-7156

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