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

January 1, 2012

2012. A Year of New Beginnings? Let’s Plan It So…

Filed under: Uncategorized — George Allen @ 6:15 am

2012. A Year of New Beginnings? Let’s Plan It So…

I.

Manufactured Housing Wisdom Honed by Experience

The following vignette (‘a short literary essay’) was penned at my request, by a 40 year successful business owner veteran of the manufactured housing industry and landlease community real estate asset class. I requested it for my education and your enlightenment. It deserves as broad circulation, among our peers, as we can give it. And while I have permission to disclose the author’s identity, have decided the message contained herein, is best delivered, and stands well, on its’ innate wisdom and timeliness, sans his personality and reputation. GFA

“There is no (chattel, personal property) financing today because the (independent third party) lenders can not make any money. I think the reason they can not make any money is generally misunderstood.

It is not, for the most part, bad underwriting, or less than honest ‘dealers’. It is because we have a bad business model. We say we are in the housing industry, but we have always treated it like a car sales lot. And the new car lot model worked fairly well, because the ‘dealer’ made a market in selling new homes. But the used car lot model did not work so well, because the ‘dealer’ did not make a market for used homes.

People were supposed to live in these homes forever; or if not, they were supposed to bring them back to the dealer and trade them in for a new model. Heaven forbid if they wanted to live in another area, or buy a stick – built house, because the dealer did not make a market for the sale of a ‘used home’. And, guess what? If a real estate agent wanted to sell the home, many landlease community owners would run them off. Who was left to make a market for the resale of our homes? No one. How could we be so stupid. And yet today, I still do not hear anyone talking about the importance of having a secondary market for our homes, or the bad effect it has had on the value of our home, or the effect it has on repossessions.

I once asked a Realtor® friend of mine. “Why do we have more repossessions than you have in your business?” He was shocked I did not know the answer. He told me a stick – built house, properly priced, in an average neighborhood, in normal economic conditions and listed with a Realtor®, was sold for cash within ninety days. A foreclosure takes 120 – 180 days. Thus, most troubled owners’ homes are sold before they become foreclosures. How much would our repossessions decrease if we had a similar marketplace? How much would the value of our homes increase with a similar marketplace? What would be the likelihood of attracting lenders?”

Preceding paragraphs lightly edited for effect and to improve readability. GFA

***

II.

Getting Ready for MHInitiative® in 2012

This blog column has purposely been quiet during the past several weeks, on the subject of whether there’ll be an MHInitiative® national gathering of manufactured housing and landlease community businessmen and women on 27 February 2012. And at this writing, a final decision has yet to be made. But it is appropriate, even necessary, to let the more than 500 MHIndustry & LLCommunity business owners and managers, who receive this weekly blog posting, know the status of this important matter.

To begin with, and as review for those unfamiliar with the MHInitiative®, here’s what it’s about….

The proword and concept replaces and succeeds the well known and popular National State of the Asset Class (‘NSAC’) caucuses held 2/27/2008 in FL. and 2/27/2009 in IN.

In the first instance, 100+/- landlease community owners/operators, from throughout the U.S., gathered in the clubhouse at FountainView, in Tampa, FL. By the end of the first NSAC caucus, owners/operators present agreed on Five Action Areas to guide their business future during years ahead – and these principles continue in effect to this day, five years later! For a detailed description of the Five Action Areas, read Landlease Communities, Manufactured Home Communities, Mobile Home Parks, Trailer Courts & Camps, and Affordable Housing, available from PMN Publishing.*1

In the next instance, 100+/- HUD Code home manufacturers and landlease community owners/operators gathered at the RV/MH Heritage Foundation’s Hall of Fame, Museum & Library facility in Elkhart, IN. At that venue, executives from those segments of the manufactured housing industry endeavored to answer this question: ‘How to Sell More Homes into Landlease Communities Nationwide?’ Answers? Agreement on the need for a new line of homes for community in – fill, i.e. the Community Series Home or CSH (replacing behemoth Developer Series Home of the late 1990s); and, to market them via a new job title/description, the Business Development Manager or BDM.*2

Why no NSAC caucus in 2010 and 2011? Several apt reasons.

• First, NSAC caucuses were not planned and facilitated to supplant any routinely scheduled MHIndustry or LLCommunity national event. In fact, the executive vice president of the Manufactured Housing Institute was present at each caucus, lending support to the different foci at each of the two national gatherings.

• Second; it was hoped, early on, elected and salaried leaders of the industry and asset class’ national advocacy organizations would ‘read the handwriting on the wall’, and assume leadership role in like manner during 2010 and 2011. As everyone ‘in the MHBusiness’ now knows, that certainly didn’t happen!

• Third; and please excuse the personal nature of this reason: I decided in 2010 to begin ‘retiring’ from active involvement in MHIndustry & LLCommunity matters, like the NSAC caucus described. But now, as you may or may not know, I’ve put those plans on hold for the next several years, to give the National Center for Manufactured Housing Studies, time to assume my research and work load.

TODAY? Annual shipment volume of new HUD Code manufactured homes continues, for a third year and now maybe a fourth, at a 60 year nadir of only 50,000+/- homes, compared to 372,843 new HUD Code homes shipped in 1998! And this sorry state of affairs, with little to no relief in sight; and no new national initiative(s) in place, to ‘talk through the matter, with a vision and plan to meet the perennial marketing – sales – production challenge’, is how we’re beginning year 2012.

And, frankly, a similar scenario exists for the chattel finance imbroglio (‘a complicated situation’), now faced on several (capital availability, mortgagor worthiness, & regulatory compliance) fronts.

So, what’s a grassroots, ‘skin in the game’ business owner, male or female, to do? Continue to, figuratively speaking, ‘sit on our hands’ and wait for the normal course (economic cycle) of events to finally (re)turn in favor of our type affordable housing and lifestyle? If that’s what YOU truly believe, then read no further into this blog posting! Because, if you’re not interested in being part of the solution to the aforesaid challenge and opportunity, you’re more than likely, part of the ongoing problem.

Where does this leave us today, 1 January 2012? All I can tell you, for now, is I’ve sent a letter to the board chairmen of both national manufactured housing advocacy organizations, asking what each body and elected leader plans to do during year 2012 to, frankly, ‘Save Our Industry!?’

In one instance in particular, I’m interested in learning of the institute’s topics agenda for their annual legislative conference scheduled for 2/27/2012 (Note the date), and whether ‘Save Our Industry!?’ is specifically included therein. And also, whether a new executive vice president will be named before or during that 2/27/2012 meeting in Washington, DC. I’ll let you know of any response(s) I receive, to said letters, in weekly blog postings and newsletters to come….

In the meantime, the MHInitiative® sits on the sideline, waiting to see what our elected and salaried leaders have in mind, if anything, to ‘Save Our Industry!?’ during year 2012.

III.

Dumming Down or Over Stimulation of Our Citizenry?

On line communication, digital journalism, information overload, planned obsolescence, abstractionitis and acronymitis. Symptoms of an emerging culture where everyone is overly interconnected, and one in which we no longer have or take time to think critically and to analyze?

“Scientists at the University of California in San Diego calculated that in 2008
(a year after the original iPhone was released) Americans consumed 34 gigabytes of information per day, the equivalent of 100,000 words – or 350 percent more than we consumed on a given day in 1980.”*3 Think about it. How many computers, laptops, netbooks, and various electronic communication devices do you have in your home, office & car? Together, Carolyn and I have no fewer than a dozen such interconnected gadgets.

“The old business model is broken, and digital journalism has to figure out how to keep up with itself without sacrificing ethical and professional standards.” Columbia Journalism Review, Nov/Dec 2011, p.22. Not to mention ‘lack of permanence’ (for future reference), as there’re fewer and fewer hard (print) copies of newspapers, magazines, newsletters, and books.

And the most recent ‘shocker’, that longhand writing or cursive, will no longer to be taught in public schools. After all, everyone now has a handheld electronic communication device of some sort, and we simply text and or email everything to be said, often preferring this means over verbalizing, even with friends and family.

Bottom line to these recent phenomenon’s? A significant lack of downtime (and offline) that’s “…lowering our ability to think critically and to analyze. Others claim such distraction causes loss of IQ points, and it can take up to 25 minutes to regain our focus after an e – mail or phone call.”*4 Yet another study estimates ‘distraction’ is costing the U.S. economy around $650 billion a year in lost productivity.

Another way of looking at what amounts to be a significant cultural shift, is the negative influence distraction has on creativity. Recalling that creativity consists of five stages: preparation, incubation, insight, evaluation, and elaboration; social scientists now believe three, if not four of these key stages are simply incompatible with the constant influx of new and varied information routinely found online. “What creativity needs most of all, is time for the mind to percolate, to mix old ideas together in new ways, and to find connections no one else has found. For this, the mind must be left to itself.” *5

So, if you buy into these ‘over stimulation & dumming down’ consequences of modern day communication technology, what should you be doing to carve out some downtime, and ensure a creative milieu for yourself? Me? I’ve gone back to playing the piano early most mornings, to clear and prepare my mind for creative thinking; and, scheduling at least a half or full hour each day, away from telephones and computers, to simply read and reflect (i.e. percolate & incubate) relative to matters personal and business. Know what? It works. I find myself looking forward to those oasis moments, where and when I refresh, even nourish that part of me needing to think new thoughts and chart paths for my personal and business lives. Try it; I’ll bet you wind up liking it – the rest of your life!

***
End Notes

1. Order book, for $24.95 + shipping & handling, by phoning PMN Publishing via the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

2. For a FREE copy of the one page list of Business Development Managers, with a comprehensive description of Community Series Homes specifications on the reverse side, phone the above – referenced MHIndustry HOTLINE

3. ‘Inner Space’ by Frank Bures writing in Poets & Writers magazine, Jan/Feb 2012

4. Ibid, p.48

5. Ibid, p.48

***

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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