Archive for November, 2018

To Party or Persuade? – MHShipments Flounder – Good bye D&R?

Friday, November 9th, 2018

Blog # 509; Copyright @ 11 November 2018; community-investor.com

Perspective. ‘Land lease communities, previously manufactured home communities, & ‘mobile home parks’, comprise the real estate component of manufactured housing.

This blog posting is the sole national advocate, voice, official ombudsman, historian, research reporter & online communication media for all North American LLCommunities

To input this blog &/or affiliate with Community Owners (7 Part) Business Alliance, a.k.a. COBA7, use Official MHindustry HOTLINE: (877) MFD-HSNG or 633-4764

COBA7 Motto: ‘U Support US & WE Serve U!’ Goal of its’ print & online media =
to not only inform & opine, but to transform & improve MHousing performance!
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INTRODUCTION. Much to pay attention to in this week’s blog posting (#509). How I favor representing you to the affordable housing crowd in Washington, DC., rather than networking at MHI’s NCC division/s annual Fall Leadership Forum. Do you realize new HUD-Code housing production, during September, fell well off the pace to shipping 100,000 new homes by year end? And there’s a ‘breaking story’ I can only titillate you with at this time. Finally, a couple responses from last week’s OPEN LETTER to My Friends in the MHIndustry.

I.

To Party or To Persuade?

‘Why I did not participate in MHI’s NCC Division’s Leadership Forum this week.’

The choice has been clear for awhile. It was clear last Fall (2017), when several manufactured housing industry businessmen (Spencer Roane, MHM; Paul Bradley, MHM, & me) attended the National Housing conference in Washington, DC., to input: ‘Solving the U.S. Affordable Housing Crisis’. And it’s just as clear this Fall, as I prepare to participate in the 2019 NH conference. Frankly; as a small businessman, I cannot afford a high-priced networking conference in Chicago one week, then participate in an affordable housing solutions conference the next, in Washington, DC. It’s that simple.

Bottom line for me? Far more important to persuade ‘housers’ – including legislators and regulators, of all stripes, how HUD-Code manufactured housing& land lease communities make for the most practical of affordable housing solutions available in the U.S. today! Someone, in my opinion, has to step forward to make the case – and it’s best done by those with ‘skin in the game’, someone not ‘paid’ to do someone else’s bidding.

So, Yes, I missed seeing many friends and colleagues at MHI’s NCC division’s Fall Leadership Forum in Chicago; but it’s money much better spent advancing the cause of manufactured housing – with an eye to further increasing the new home shipment volume we’ve experienced YTD 2018. Anyone disagree with that line of thinking? Didn’t think so.

Speaking of money. The funds used to pay for these trips to Washington, representing manufactured housing & land lease communities among affordable housing ‘housers’ is coming solely from COBA7, a division of GFA Management, Inc., dba PMN Publishing. No one else! Point? There needs to be an influx of $, from somewhere, if this good work is to continue. If not; well, our industry & asset class presence & favor, among the affordable housing crowd, will diminish rather than grow. Do we want more new HUD-Code homes shipped than at present? If interested, phone me @ (317) 346-7156.

II.

Are YOU Paying Attention?

– to fluctuating MHShipment ‘#s & $s’ this past Summer headed into the Fall?

If not, you should be, and here’s why. The number of new HUD-Code homes shipped during September 2018 was 1,638 fewer than shipped the previous month, i.e. 9,157 (-) 7,519 (=) 1,638. And not only that, this September new home shipment total is also 61 units fewer than shipped during September 2017! What’s happening?

Another way to look at it is this. If we don’t do better than shipping 7,519 during each of the next three months (October, November & December), our possible year end total of new homes shipped 3,000+/- fewer than the 100,000 new HUD-Code homes anticipated during the past several months, i.e. 7,519 (Sept.) X 3 months = 22,557 (+) 74,354 new HUD-Code homes shipped YTD (=) 96,911 or 3,000+/- homes fewer than targeted!

III.

D&R Shipments to End, On-site Inspections to Begin?

HUD-Code Housing Manufacturers to Eschew D&R Shipment Policy of Past 70 Years, in Favor or On-site Inspections of New Home Site Preparation, Home Installation & Setup!

It’s certainly not a ‘done deal’ yet, but the Big 3-C HUD-Code housing manufacturers are talking about how to curtail the astronomical home service and warranty $$$ expenses oft caused by poor to marginal site preparation, home installation and setup.*1

How ‘big’ is the $$$ problem? Informed sources put the total, when talking about the Big 3-C HUD Code housing manufacturers, at hundreds of millions of dollars per year!
So, what’s the solution? That’s the next step. Federal regulation of installations hasn’t worked, and there’s been no real or effective self-policing to date; but there are practical alternatives:

ENDING THIS ‘BREAKING STORY’ HERE, FOR THE TIME BEING. Will likely continue as the lead story in the December issue of the Allen Letter professional journal. Now, picking up where this story left off in the previous paragraph…

And there are likely other implementation alternatives not identified here. For the time being, it’s enough information, and to know, this is becoming, if not already, a Major Hot Topic among HUD-Code housing manufacturers…finally.

III.

Responses to ‘An OPEN LETTER to My Friends in the MHIndustry’

Relative to leadership of the manufactured housing industry & land lease community real estate asset class:

“Oh! the community side of the business has a leadership gap? Nope. There are plenty of leaders…(just) in their own businesses. The void really is leaders willing to step onto the national scene to lead the industry as a whole. You named many of them! But where is the next generation?

I think they are there, they just need a push. My solution is simple. Since the industry has rebounded, it’s time for the states to return to sending expense-paid delegates to MHI and other national gatherings. That is where the last generation stepped out of the shadows, both as community and retail leaders.”

These insightful remarks and suggestion offered by a retired state association executive still passionately interested in the healthy future of the industry & property type.

And then there’s this poignant tale from a long retired entrepreneurial business executive.

“Mine was a sudden, and complete break from participation. I was bought out, stayed to help for a couple years, retired to caretake my wife and travel in our RV.

My legacy lies in the products people are still enjoying, the few real friends from the MHIndustry that still call/speak/write to me and in the successes and happiness I see in so many of our former employees.

To you I say, stay or go; and in either case, your curiosity will serve you George. You have your family and your legacy. So, when you see it is time, you will take a walk away, not look back, and go to that which is next. No fear my friend.”

That last line certainly sets the stage for me to say, ‘Now is the time!’ But it isn’t. Geesh; before year end I’ve got to compile and publish the 30th anniversary ALLEN REPORT, attend the National Housing Conference in Washington, DC., representing manufactured housing & land lease communities to the affordable housing ‘housers’ from throughout the US., and more….

Speaking of the 30th anniversary ALLEN REPORT. If you’re reading this and are a property portfolio owner/operator of land lease communities, it’s not too late – just yet – for you to submit your property and rental homesite counts for inclusion in said report. Just do so via gfa7156@aol.com. And if you completely fill out the questionnaire (Ask for it when you email me) and return it, you’ll receive a FREE copy of the ALLEN REPORT when it is distributed during January 2019. That’s an immediate savings of $544.95!

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George Allen, CPM, MHM
COB A7, a division of GFA Management, Inc., dba PMN Publishing
Box # 47024
Indianapolis, IN. 46247

Official MHIndustry HOTLINE: (877) MFD.HSNG or 633-4764:

An OPEN LETTER to My Friends in the MHIndustry

Saturday, November 3rd, 2018

Blog # 508; Copyright @ 4 November 2018; communiity-investor.com

Perspective. ‘Land lease communities, previously manufactured home communities, & ‘mobile home parks’, comprise the real estate component of manufactured housing.

This blog posting is the sole national advocate, voice, official ombudsman, historian, research reporter & online communication media for all North American LLCommunities

To input this blog &/or affiliate with Community Owners (7 Part) Business Alliance, a.k.a. COBA7, use Official MHIndustry HOHTLINE: (877) MFD-HSNG or 633-4764

COBA7 Motto: ‘U Support US & WE Serve U!’ Goal for its’ print & online media =
to not only inform & opine, but to transform & improve MHousing performance.
_______________________________________________________________________

An OPEN LETTER to My Friends in the Manufactured Housing Industry &
Land Lease Community Real Estate Asset Class

In 1978 I discovered professional property management (‘PM’) as a career alternative and opportunity, when working for a firm owning/operating apartment communities, mobile home parks, nursing homes, farms and mines. I was not pleased, however, when my boss reassigned my PM responsibilities from apartments to mobile homes. But know what? That marked the beginning of my 40 year experience in land lease community management and ownership, as well as writing and publishing books, newsletters, and this blog.

Now, in 2018, I’m contemplating what to do with the rest of my career and life. I no longer own land lease communities; have relinquished responsibility for teaching the Manufactured Housing Manager (‘MHM’) PM training and certification program; and think I might have a home for future Networking Roundtables – or not. So, for the time being, I continue to pen and post a weekly blog, and publish and distribute two COBA7 affiliate-supported monthly business newsletters: the Allen Letter professional journal & the Allen CONFIDENTIAL!. But what about ongoing research required for the annual ALLEN REPORT, National Registry of ALL $ Lenders; and, directories of trade groups, GSEs & NGOs, trade publications, and freelance consultants? It’d be downright wrong to allow 30+ years of such information to disappear overnight, for lack of interest and effort.

While I shared several personal memoirs in SWAN SONG last year, here’re more memories from past decades:*1 Hopefully, these and more stories will eventually find their way into print as a legacy biography or autobiography.

• Returning 350 rental manufactured homes, scattered among four ‘mobile home parks’ in two states to profitability, by changing from monthly to weekly rent collection. And later learning the advantages to collecting site rent by mail.

• Acquiring my first (then) manufactured home community of 500 rental homesites, with only 20% occupied, for $400,000 – then selling it two years later for $2 1/2 million cash. Ah, the reward of risk taking and ‘sweat equity’.

• Penning & self-publishing Mobile Home Park Management in 1988. Now in its 6th edition as Land Lease Community Management, and centerpiece for the popular Manufactured Housing Manager program, with nearly 1500 MHMs trained and certified to date throughout the U.S. and Canada.

• Collecting & continually updating an exclusive, confidential data base identifying 500+/- land lease community portfolio owners/operators in North America; and making said list available for direct mail contact and marketing by lenders, insurers, investors, and more.

• Researching, compiling & publishing the annual ALLEN REPORT (1989-2019), identifying major portfolio ‘players’, along with pertinent benchmark statistics.

• Articulating the asset class’ Industry Standard Chart of Accounts, including 19 Operating Expense Ratios and widely cited Allen Model OERs. This resource compiled while on active duty, as a Marine officer, based in Honduras during Operation Desert Storm.

• Hosting a strategic planning meeting of 19 manufactured home community owners intent on improving realty asset class’ national advocacy and representation, before the mini-REIT wave of 1994 began. Their Industry Steering Committee was the forerunner of MHI’s National Communities Council division.

• Co-authoring Development, Marketing & Operation of Manufactured Home Communities, with David Alley & Edward Hicks. First such tome in more than 20 years! Still sought and bought, via amazon.com, after more than 25 years.

• Editing How to Find, Buy, Manage & Sell a Manufactured Home Community. First and only comprehensive text on buying, valuing, selling this unique, income-producing property type. Oft referred to as the ‘bible’ of community acquisition. Now out of print, but used copies sometimes available at amazon.com

• Crafting, with daughter Susan McCarty, the ‘Valuation Calculation Worksheet’, or VCW, a do-it-yourself valuation tool for any size and condition land lease community in North America. And later added to this, an ‘ABClassification’ form, for measuring and labeling A, B, C or D quality levels on this income-producing property type. Replaced long defunct Woodall Start System, last updated in 1976.

• Articulating the ‘Ah Ha! & Uh Oh! Worksheet’, for estimating ‘affordable’ & ‘risky’ purchase prices of new & resale homes, of any type, on building sites conveyed fee simple, and placed within land lease communities on rental homesites.

• Launching of Community Owners (7 Part) Business Alliance, or COBA7, as a division of GFA Management, Inc., dba PMN Publishing. In reality, a rebranding of heretofore ‘free’ products & services long provided by GFA Management, Inc.

• Creating the ‘New Rule of 72’, to facilitate valuation of ‘average’ land lease communities at100% occupancy (maximum value), OR any lesser percentage of physical occupancy; e.g. 200 sites X $300/month rent X ’72’ = $4,320,000 or $21,600 per occupied rental homesite.

• Defining affordable housing (‘AH’), to include Low Income Housing & Very Low Income Housing, as well as all six measures of AH, being HEF, HOI, HW, WH, IHVR, & ‘One, or anyone, who believes they live in affordable housing’

• Bringing logic to heretofore conflicted annual new HUD-Code manufactured housing shipment volume reporting, using Institute for Business & Technology Safety (‘IBTS’) data – though differences in said public reporting continues via HUD, MHARR & COBA7 versus MHI..

• Documenting of 21st Century paradigm shift in manufactured housing distribution, from independent (street) MHRetailers to in-community home sales & finance.

So, were to go from here?

That’s somewhat ‘up to you’. The following paragraph (actually two) concludes the November 2018 issue of the Allen CONFIDENTIAL! business newsletter. Not asking you to agree with me; just read and ponder what the next decade – and longer, will look like if

1. Our realty asset class remains, again in my opinion, relatively leaderless; and,

2. The research & print resources – and more, just described, ‘simply go away’….

Now, here’s that paragraph, rendered as two:

“I’m concerned…about the dearth of asset class leadership among land lease community owners/operators nationwide. I have never viewed myself as such a leader, rather as a gatherer and purveyor of statistics and information via COBA7….Furthermore, I don’t see LLCommunity representation and advocacy, envisioned by aforementioned 19 owner/operator peers 25 years ago, faring any better! (Their hope) MHI’s NCC division…is insular (‘detached, provincial, narrow-minded’) & .(For proof, read page # 97 in SWAN SONG, to compare NCC’s contemporary presence with their 1993 Mission Statement & Objectives). And MHARR has never figured into this leadership void, as their membership is strictly limited to HUD-Code housing manufacturers. Now NAMHCO appears on the national advocacy (lobbying) scene. Too early to judge their leadership potential.”
&
“As I travel nationwide, I meet and interact with individuals who’re already bona fide leaders in their own right (i.e. entrepreneur owners/operators & some salaried PM executives). But therein lies their constraint: ‘taking care of (their) business first’! Here I’m thinking the likes of Mike Sullivan, CPM; Paul Bradley, MHM; Spencer Roane, MHM; Steve Adler; Stephen Braun; Brian Fannon, CPM; Randy Rowe, Kevin Shaughnessy, et .al. So, there’s talent afoot, and the need is great, but as a realty asset class we continue to be hopelessly (?) adrift.”

Frankly, I hope this blog posting becomes a topic of lively conversation at the upcoming NCC Fall Leadership Forum, 7-9 November, in Chicago, IL. It should be. Why there? I understand that event attracts ‘hundreds’ of participants, while NCC membership meetings, in my experience as a founding board member – just resigning last month, attract maybe a dozen owners/operators, way down from multiple dozens two decades ago. Hey, a leadership renascence,, among land lease community owners/operators, has to begin somewhere….

End Note.

1. To order a copy of SWAN SONG, ‘George Allen’s History of the Land Lease Community Real Estate Asset Class (1970-present day) & Official Record of Manufactured Housing Shipments (1955-present day)’, for $34.95 ()postpaid), phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

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

POSTSCRIPT

If you or your firm owns and or fee manages a minimum of five stand alone land lease communities or 500+ rental homesites (in one or more properties), the portfolio qualifies to be included in the 30th anniversary ALLEN REPORT, a.k.a. ‘Who’s Who Among Land Lease Community Owners/operators Throughout North America!’. To input this seminal document, simply phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 and request a copy of the questionnaire used to compile this data. Then complete it in full ASAP, and return via FAX, to (317) 346-7158. Completely filled-in questionnaires get you a FREE copy of the 30th ALLEN REPORT in January when distributed as a lagniappe in the Allen Letter professional journal. Questions? Email: gfa7156@aol.com

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