Best Kept Affordable Housing Secret in the U.S.!

Best Kept Affordable Housing Secret in the US!

Why HUD Code Manufactured Housing & Landlease (nee manufactured home) Communities Continue to be ‘Best Kept Affordable Housing Secret’

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One person’s passion is often another’s piranha, poser, puzzle or problem! Think of KIA brand automobiles. Today, a popular consumer choice; but for combat veterans, the chilling acronym for ‘Killed In Action’! Same to be said about succulent Kobe beef. A delicacy for many diners; but a ‘not on your life’ food choice among vegetarians. Some opine a similar dichotomy for this nation’s Best Kept Affordable Housing Secret….

Think HUD Code manufactured housing and landlease communities (‘LLCommunities’)! For aficionados of quality, inexpensive (1/2 the cost, per square foot, of site – built housing!), energy efficient, non – subsidized, transportable, single family housing, certainly a valuable bargain when well bought and well – sited, on realty owned fee simple or leased. But how many American homebuyers clearly know this, and select unique factory – built housing products when in the market for a new home? Not many. Why? A half dozen reasons.

Presently, there’s a major DISTRACTION. With 4,000,000+/- foreclosed and or repossessed stick – built homes in play these days (A number that varies from week to week, and from news source to resource person), would be homebuyers will shop in that affordable pool first, before seriously considering new manufactured homes. And since there’s NO SECONDARY MARKET to effectively market and resell manufactured homes, beyond MHVillage online listings, that avenue too is a nigh non – starter! So, there’re the first two reasons why manufactured housing continues to be this nation’s Best Kept Affordable Housing Secret!

Complete lack of national product and brand PROMOTION. Automobile manufacturers regularly do this – on national TV; so do pharmaceutical firms hyping virility and PDA pills; and, a plethora of companies peddling cable and dish TV, cel phones, and other cutting edge technology. So, why doesn’t HUD Code manufactured housing follow suit – at all? In my opinion: “Because we don’t play well together” has too long been our self – defeating siren song, playing out in more ways than one. A possible tri – part solution? Debut an effective, charismatic, focused national leader (I can think of one!) and leadership cadre; collectively backed and financed by a no – longer – divided national voice; if necessary, wrought from a drastically reorganized advocacy presence. Bottom line? As long as we don’t effectively nationally promote our unique housing product and lifestyle alternative, we’ll remain this nation’s Best Kept Affordable Housing Secret!

BAD IMAGE, bad image, BAD IMAGE, bad image, BAD IMAGE, bad image! Who’s to blame for the sorry state of affairs? BAD PRESS & BAD ACTORS! In the first instance, most of the secular and business press continue to practice the bromide: ‘BAD NEWS SELLS!’ In our case, this is regularly exhibited via the press’ persistent use of archaic, negative terminology, to subliminally negate positive views one might have for manufactured housing and landlease communities. Some in our businesses fight skirmishes of this nature in various ways, e.g. One with stock postcards responding, in part: ‘Oops…you slipped! Trailers haul livestock and beer. People live in manufactured homes. No one lives in a trailer!’* What do you do? It’s going to take many more manufactured housing loyalists, doing things like this and more, to turn the press in a positive direction. Here’s a novel suggestion. Research and prepare a comprehensive MHStyle Manual to distribute to every print and online news purveyor in the U.S.! Style manuals are everyday references, generally containing a dictionary or lexicon of trade terms, as well as contact sources for industry information and statistics. And the BAD ACTORS? They take many forms. Shoddy workmanship within housing factories, shifty ‘street dealers’, unsatisfactory customer service, predatory lenders, lousy landlords, and more; all working (often unintentionally) to keep BAD IMAGE in place year after year. How to interrupt this perennial cycle? Begins with each of us in the MHBusiness; the ‘five percenters’ who genuinely care! Make a sincere commitment to personal and corporate excellence! Seriously. Get active on the state level, via your trade association, as an industry image activist and board member. And when given an opportunity, make yourself and image improvement views known on regional and national levels. Frankly, until we, as an industry and asset class, effectively address BAD PRESS & BAD ACTOR impediments, we’ll continue to languish as this nation’s Best Kept Affordable Housing Secret! Are YOU a direct member of the Manufactured Housing Institute (‘MHI’)? If not, phone (703) 558-0678 today and join!

FINANCING. This is a bona fide hiatus* at this time! Available only to the most credit worthy of would be homebuyers, and then generally on the realty – owned fee simple side of the lending house. BUT, frequently available within many, if not most, larger LLCommunities (i.e. containing more than 100 rental homesites) throughout the U.S. How so? Well, that’s another major part of this story; one that’s been thoroughly covered in previous blog postings at this website (Scroll back through archived blogs!), and will be readdressed as circumstances change and or continue to unfold. There is one perspective on this subject, however, that warrants further attention: NOT ALWAYS AFFORDABLE. And there’re two interrelated aspects of this impediment to manufactured housing and landlease communities breaking free of their ‘rep’ as this nation’s Best Kept Affordable Housing Secret! One aspect has to do with calculating the price (value) of new or resale (manufactured) homes marketed in specific local housing markets (Identified by postal zip code and referenced, as Annual Median Income or AMI at zipskinny.com) and or sold to an individual or household with a provable level of annual income (a.k.a. Annual Gross Income or AGI). But first, ask any HUD Code home manufacturer’s regional sales representative, or MHRetailer, how to take either or both those ‘$$$ starting points’ (AMI &/or AGI) to calculate ‘affordable’ and ‘risky’ price points of homes to be sold in the given local housing market, or to the individual or household buying a home. You may be surprised at the answer(s); or, more likely, non – answers. And don’t forget to ask ‘How they got to their numbers?’. Today there is a practical way to effect these key computations, using the obliquely – named ‘Ah Ha! & Uh Oh! Formulae’.* The other aspect? Has to do with relationship of on – site homesite rent and PITI factor calculated using the ‘Ah Ha & Uh Oh!’ methodology. Here’s the rub; sometimes referred to as the KY-MN Rule of Thumb (Named for two MHIndustry leaders routinely using this rule in KY & MN); to wit: For a manufactured home sited in a landlease community to ‘sell well’ against similarly – sized and appointed stick – built homes in the same local housing market, the total monthly PITI & site rent payment on the former, must be at least $50.00/month less than the PITI payment for the latter! When that relationship is out of sync, it’s usually due to too high site rent, too much home for the prospective homebuyer (often the case), and or combination of both factors. Now you know.

CONSPIRACY. Do you really want to go there? Some do; some don’t. However, want to acknowledge this theory frequently surfaces in casual conversation among MHIndustry purists and veterans. Such talk usually centers around personal convictions that advocacy bodies have been infiltrated by stick – built housing loyalists intent on gradually dismantling the industry; and, HUD, as federal regulator of the our industry, has been its’ most reluctant bridesmaid for 35 years, rarely doing anything proactive, even reactive, to pointedly promote manufactured housing beyond being this nation’s Best Kept Affordable Housing Secret. Nuff said, for now…

Can YOU identify additional reasons why HUD Code manufactured housing and LLCommunities continue to be this nation’s Best Kept Affordable Housing Secret? Let me know by phone: MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764, or respond directly to this blog posting via this website!

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Remember last week’s blast email teaser quote: “LLCommunities to be the Salvation of the MHIndustry? Looks like it!” Well, we received several supportive messages regarding points made therein. Here’s one: “Well done, sir. Perhaps we should Thank the conspirators for starting our demise, so our national associations and ‘we’ could finish (the job). As an industry, we are definitely suicidal. We should be thinking aggressively and believing in our future! (What’s the chance our few remaining) financially strong manufacturers, LLCommunity owners, OEM suppliers, MHRetailers, and (third party) financial firms contribute monies to a pool to provide financing for creditworthy buyers of our housing product?” MM. And this; responding to (property) owner – financing of new and resale homes sold on – site via ‘captive finance’ and ‘buy here – pay here’ methodology: “Good for the LLCommunity owners; they KNOW how great our customers really are, and how they deserve our confidence.”

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For more information about the Best Kept Affordable Housing Secret in the US!,
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• Attend 19th annual International Networking Roundtable in Phoenix, AZ @ 15-17 September. Not too late to register! (317) 346-7156 for special rates for LLCommunity owners, HUD Code home manufacturers, and service Providers. FLASH. Here’s a piece of inside information! Thanks to this blog, and other online postings, this year’s Roundtable is attracting as many ‘new faces’ as it does folk who’ve patronized it for the past 19 years! So, if you’re looking for prime prospecting, best educational offerings available anywhere in the MHIndustry, unparalleled interpersonal networking, and dozens of deal – making opportunities, register today! Our max capacity is 200, and we’re almost there!
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• Only a few copies of the best-selling Manufactured Housing $$$ Primer remain. Sells for $29.95 per copy (includes postage & handling). Phone (317) 346-7156.
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• If the ‘Ah Ha! & Uh Oh! Formulae’ methodology intrigues you, plan to be in Springfield, IL., on 21 October 2010. Why? The Illinois Manufactured Housing Association (‘IMHA’) is hosting a day long chattel finance educational program, for anyone in the manufactured housing business and landlease community asset class, who wants to attend. I’ll be describing the above methodology in detail, using said form. Call (217) 528-3423 for further information and to register for this seminal event. Given the ‘other topics’, anyone in self – finance will be there!
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Remember; this Blog is only as useful as your input, suggestions, and ideas! GFA

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End Notes.

• For a free copy of the ‘Oops…You slipped’ postcard, call (317) 346-7156
• Hiatus? A space where something is missing; a gap; a break.” Webster
• For Free copy of the ‘Ah Ha! & Uh Oh! Formulae’ form, call (317) 346-7156.

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

One Response to “Best Kept Affordable Housing Secret in the U.S.!”

  1. Sona Strande says:

    A standard or conforming mortgage is a key concept as it often defines whether or not the mortgage can be easily sold or securitized, or, if non-standard, may affect the price at which it may be sold. In the United States, a conforming mortgage is one which meets the established rules and procedures of the two major government-sponsored entities in the housing finance market (including some legal requirements). In contrast, lenders who decide to make nonconforming loans are exercising a higher risk tolerance and do so knowing that they face more challenge in reselling the loan. Many countries have similar concepts or agencies that define what are “standard” mortgages. Regulated lenders (such as banks) may be subject to limits or higher risk weightings for non-standard mortgages. For example, banks and mortgage brokerages in Canada face restrictions on lending more than 80% of the property value; beyond this level, mortgage insurance is generally required

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