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

September 11, 2011

Life Being Renewed or a Death Rattle?

Filed under: Uncategorized — George Allen @ 5:03 am


The Recent & Distinct ‘Stirring’ Sensed by, & among, some HUD Code Housing Manufacturers, independent ‘street’ MHRetailers, even Landlease
Community Owners/operators. Is it our industry’s…

Life Being Renewed or a Death Rattle?

“Landlease communities are HOT!” opined the Business Development Manager (‘BDM’) working for one of the 21st Century Triple ‘C’ Firms, shipping specially – designed Community Series Homes (‘CSH’), for marketing to – and placement in, landlease communities nationwide. When I asked, “How so?”, his response was, half the shipments of new HUD Code homes, from most of his firm’s plants, are now CSH homes headed for vacant rental homesites within landlease (nee manufactured home) communities.

Phone calls to other BDMs, working for Clayton Homes, Cavco, Inc., and Champion – Yes, those are our industry’s 21st Century Triple ‘C’ Firms, confirmed the ‘stirring’ described in the opening paragraph. So much so, another indicator is the large number of HUD Code home manufacturers, nearly a dozen, attending this year’s International Networking Roundtable in San Antonio, TX., (14-16 September). That’s far more than have attended any previous Roundtable during the past 20 years! Even ‘park model RV’ manufacturers have registered for this annual opportunity to meet, market to, and sell their product lines into LLCommunities. But know who’s missing? Unfortunatly, the small to mid – sized, regional HUD Code home manufacturers! And that’s a shame, because there’s plenty of business to be had from the 200+/- gathered LLCommunity owners/operators.

If YOU don’t know about CSH homes, be present at the Roundtable this week, when Don Westphal, freelance consultant and CSH specialist, covers that subject in depth. And David Gorin, RV consultant, will explore the increased interest LLCommunity folk have in RV Parks and ‘park model RVs’. To participate, phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. And while you’re on the phone, ask for a ‘free’ list of the more than two dozen BDMs marketing new HUD Code CSH homes to LLCommunity owners/operators.

Independent ‘street’ MHRetailers recently rediscovered a valuable resource and voice in Rainmaker of Davenport, Iowa. While long a consultancy to this key segment of the manufactured housing industry, it’s only become apparent recently (More of that ‘stirring’ feeling.) how surviving home sales professionals are literally chomping at the bit, for a credible opportunity to refresh personal selling skills, improve their online marketing expertise, and frankly, to ‘Get Motivated to Sell – again!’ So, to address those needs, Rainmaker has planned a National Summit for independent ‘street’ MHRetailers and in – landlease community sales center operators, to occur in mid – November in Chicago. For more information, contact Bill and Chad Carr via (800) 336-0339. I certainly plan to participate and learn as well.

And, for the first time in decades, independent ‘street’ MHRetailers have an excellent e-book available ‘just for them’, describing HOW TO ‘drive more qualified traffic to ones’ home center and increase sales opportunities’! This e-book, titled Pillars of Promotion is based on firsthand Lessons Learned by Chris Nicely, former marketing executive with Clayton Homes. Do YOU have a copy yet? If not, phone (865) 385-9675 or pick up order literature at the aforementioned Roundtable this week.

Then there’re the landlease community owners/operators. No other segment of the HUD Code manufactured housing industry has experienced such extreme dichotomy between the ‘Haves & Have Nots’, where occupied rental homesites are concerned! An increasing number of mid to large – size properties, oft saddled with too high rents and low occupancy, have moved – and are continuing to move, from forbearance agreements, pursuant to CMBS (commercial mortgage – backed securities) loans-gone-bad during the past decade, into active foreclosure and REO (real estate owned) status. As in the late 1970s and 1980s, it’ll take a few years – maybe a decade, if reasonable, independent third party chattel financing doesn’t return soon, for these troubled assets to be remarketed, acquired, and returned to solvency!

In the meantime, ‘the other half’ this dichotomy – and actually a far greater number within the unique property type, especially where/when owned by veteran realty investors, are ‘doing just fine, thank you’, as they market, sell, and frequently self – finance, via one methodology or another, new and resale home transactions on – site. And it’s these financially healthy owners/operators, frequently enjoying excess cash flow by dint of having paid down or off mortgages, who oft shoulder additional management risk, and now buy new HUD Code homes at a discount, to fill vacant rental homesites, since the repo market has all but dried up, and there’s still no viable secondary market for the ‘sale and purchase’ of quality resale homes.

Who to talk to about the various self – finance methodologies in vogue these days? Again, be at this week’s Roundtable! Ken Rishel of Rishel Consulting will explain, one – on – one, the ins and outs of ‘captive finance’. Dick Ernst of CU Factory – built Housing will happily describe his firm’s chattel loan servicing capabilities. Matt Kerlin of 21st Mortgage Corporation will also be on hand, to walk you through their new program. And LLCommunity owner/operator Spencer Roane will share his firsthand experience and success, using a carefully crafted lease – option program. And if ‘rentals’ on – site are of interest, request the free reprint titled, ‘To Rent or Not to Rent?’ when you phone the above – listed MHIndustry HOTLINE number. And rumor has it, a freelance consultant (not me) may soon go on the road, carrying the ‘ways to self – finance’ message to state manufactured housing associations and portfolio owners/operators desiring such knowledge. If this interests you, let me know. And, by the way, last year’s ‘bestseller’, the Manufactured Housing $$$ Primer is still available, for $29.95 (postpaid) from PMN Publishing. Again, just phone the toll free HOTLINE.

OK, if by now, you don’t see where this industry wide ‘stirring’ is going, you’ve gotta be tone deaf. Sure, new home shipments continue to drop this year; but know what? Almost everyone described in the previous paragraphs is now ‘pulling out all the stops’ to stimulate new and resale home sales business, filling previously vacant rental homesites, and doing their part to keep the manufactured housing industry alive. How ‘bout YOU? What are YOU doing as your part in this timely, critical, ‘stirring’ scenario?

My participation in all this’? First and foremost, during three decades as manufactured housing’s observer cum blogger, landlease community newsletters publisher, and management consultant at large, I’ve long argued for our industry’s return to ’truly affordable housing’ for the American homebuyer – something, sadly, that hasn’t happened yet. No other type housing, in or out of the factory – built milieu, can do as good a job at ‘being affordable’, than HUD Code manufactured housing, when we set our minds, production, and marketing to do so! Second; PMN Publishing continues to make the handy, do – it – yourself, oddly – named ‘Ah Ha! & Uh Oh! new or resale home sales price & mortgage worksheet’ available FREE for the asking. For the first time in the history of manufactured housing, independent ‘street’ MHRetailers and sales centers within LLCommunities, can easily and accurately calculate ‘just how much home buying customer can truly afford’, based on individual or household Annual Gross Income or AGI, and if opening a sales center in a new local housing market, per postal zip code, know what price range homes will sell, based on the prevailing Area Median Income or AMI. For your FREE copy of this revolutionary form, use HOTLINE number cited earlier.

Death Rattle? I think not. I made that mistake – thinking such, way back in 1979, shortly after entering this business. Five years later, I was had of my own firm, and had cleared $2 million with my partners, on our first landlease community transaction. I’ve not looked back, or negatively at the industry and asset class since; neither should you! Come on, ‘Let’s get a – stirring together!’


And don’t forget! This week’s Networking Roundtable is but the first stage of that Three Step Process, described in this industry blog more than a month ago, to ascertain ‘How to Save Our Industry!’ At the very least, and at this week’s event, we’ll see the ‘stirring’ anticipated national plans for the future of landlease community research and resources! Step II of the Process? Manufactured Housing Institute’s (‘MHI’) annual meeting in Phoenix, AZ., 2 – 4 October. Have YOU perused the meeting agenda? Will YOU be present to ensure our industry’s elected and salaried leaders keep the MHIndustry train on track to increased production and renewed profitability? And Step III of the process? If necessary, a National State of the Asset Class (‘NSAC’) caucus III during early 2012.

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

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