An Open Letter to Blog Floggers (readers) from George Allen

June 27th, 2015

COBA7® presents Blog # 354 via community-investor.com Copyright 28 June 2015

Perspective. ‘Land-lease-lifestyle Communities, a.k.a. manufactured home communities and ‘mobile home parks’, comprise the real estate component of manufactured housing.’

This blog posting is the national advocacy voice, official ombudsman (press), research reporter, & online communication media for all LLLCommunities in North America!

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 transform & improve our MHBusiness model!’

An Open Letter to Blog Floggers (Readers)

You likely know what is commonly said, derogatorily, about ‘making assumptions’. Well, I don’t want to be guilty of ‘assuming’ you 1) know what I’m about; 2) why I pen this weekly blog posting; and 3) where the manufactured housing industry and land-lease-lifestyle community (a.k.a. manufactured home community) realty asset class is possibly headed these days. So, in the following paragraphs I’ll address these legitimate queries.

First off; I’ve been involved in factory-built housing since 1970, a year after returning from a 13 month tour of duty, as a USMC combat engineer officer and shore party company commander, in the Republic of Vietnam. The newspaper ad I answered, for that first job, read simply: ‘WANTED: former military officer with background in construction’. After working for two PA & IN firms, in housing component fabrication, I segued to ‘mobile home park’ management in 1978, overseeing four large properties in Indiana and Kentucky, earning my real estate broker license, and Certified Property Manager® designation along the way.

In 1980, Carolyn and I founded GFA Management, Inc., as a fee management firm; one that, in her words, ‘managed anything that didn’t move’, e.g. strip malls, apartments, houses, offices, and yes, ‘mobile home parks’. With a partner, we bought our first income-producing property in the early 1980s; turning it around operationally and selling it. We continue as real estate investors and property managers to this day. Why – besides the income? If I’m going to write, and teach the Manufactured Housing Manager® professional property management training & certification program,, I need to be regularly involved with what’s going on in and around the manufactured housing industry and its’ various segments.

By 1988, when we self-published Mobile Home Park Management (since retitled Landlease Community Management & in its’ 6th edition), I’d moved into freelance consulting, routinely Mystery Shopping properties, engaging in turnaround planning and execution, as well as authoring textbooks for J. Wiley & Sons Publishers: Development, Marketing & Operation of Manufactured Home Communities (with David Alley & Edward Hicks), and How to Find, Buy, Manage & Sell a Manufactured Home Community. All three books continue to be available from PMN Publishing via Official MHIndustry HOTLINE: (:877)MFD-HSNG or 633-4764, & community-investor.com website.

Also during the late 1980s and early 1990s, we debuted the first (of 26 to date) ALLEN REPORTs (a.k.a. ‘Who’s Who Among LLLCommunity Portfolio Owners/operators From Throughout North America!’), and first (of 23 to date) International Networking Roundtables – with # 24 scheduled for 9-11 September in San Diego, CA. We also facilitated the eventual appearance of several real estate investment trusts (‘REITs’) in 1994 & 1995, by researching, refining, compiling and popularizing the first manufactured home community Industry Standard Chart of (Operating) Accounts, along with corresponding Operating Expense Ratios, or OERs. These were used by Wall Street analysts to get ‘comfortable’ with this heretofore unknown realty asset class. It was also during that time frame, on 31 August 1993 specifically, when 19 MHCommunity owners met in Indianapolis to form the Industry Steering Committee, ensuring national advocacy when IPOs (Initial Public Offerings of stock) were launched. The ISC became MHI’s National Communities Council division on 1 January 1996. .

Since then, we rolled out the aforementioned MHM® program in 2001, having lain dormant since 1988, out of deference to MHEI’s Accredited Community Manager® program, launched in 1991. To date, nearly 1,000 MHMs have been certified. And along the way, GFA/PMN birthed and nurtured more than a dozen directories and resource documents (e.g. Lenders’ Registry, List of Consultants, etc.); today widely known as Signature Series Resource Documents or SSRDs.

But it was the National State of the Asset Class (‘NSAC’) caucuses, on 2/27/2008 & 2/27/2009, that brought the realty asset class into the 21st Century. In the first instance, more than 100 land-lease-lifestyle community owners/operators convened in Tampa, FL., to ‘take control of their destiny’ – agreeing to a Five Action Areas plan, in effect to this day. And the following year, a 100 mix of home manufacturers and community owners/operators convened at the RV/MH Hall of Fame in Elkhart, IN., to agree on design parameters for what came to be known as Community Series Homes, or CSH Models. This was acknowledgement that independent (street) MHRetailers could no longer be counted on to fill vacant rental homesites; that property owners/operators must now do so themselves, via selling ‘repo’, good quality resale, even new HUD-Code homes on-site, and seller-financing them when need be.

Hence, a NEW ERA for LLLCommunities was identified, along with the launch of the Community Owners (7 Part) Business Alliance®, or COBA7® on or about 1 January 2014. And that pretty much brings us to today – and WHY I prepare this weekly blog posting at community-investor.com, along with the two subscriber-supported monthly newsletters, the Allen Letter professional journal & the Allen CONFIDENTIAL! WHY? It’s simple. All but one manufactured housing industry trade print publication, besides the two newsletters just mentioned, have passed from the business scene. And the one that’s left hasn’t changed its’ stable of columnists for a long time. Furthermore, the content quality of regularly published online newsletters, catering to the manufactured housing industry is, with one exception, questionable. That exception being Rishel Consulting’s finance newsletter; as it is should be ‘required reading’ for everyone engaged in any form of housing finance using chattel capital.

Finally; WHERE we are headed as an industry and realty asset class is not an easy question to answer without maybe treading on someone’s toes.

The manufactured housing industry, sad to say, is ‘dead in the water’ as long as there’s no easy access to chattel capital to finance housing transactions on-site in LLLCommunities. That’s why, after six long years, we continue to bump along at an annual average new home shipment nadir volume of only 55,000 per year – though it’s estimated we might come in somewhere between 60 & 70 thousand by year end 2015. However, as we know, ‘Thanks to disunity between national advocacy parties in Washington, DC., annual new home shipment totals will be reported differently.

Land-lease-lifestyle community owners/operators fall into two distinct camps. There’s the cadre of 500+/- property portfolio owners/operators (i.e. Portfolio threshold = ‘Own &/or fee manage a minimum of five LLLCommunities &/or 500+ rental homesites – MH & RV’), who appear, for the most part, to be engaging in aforementioned ‘Buy Here – Pay Here’ drill, where new home sales and seller-financing are concerned. This practice has become so widespread, LLLCommunity folk have become known as the New Breed of MHRetailer & Lender. But this cadre accounts for only 15 percent of the national inventory of this unique, income-producing property type.

Then there’s the smaller, mostly Mom & Pop owned/operated properties, usually numbering fewer than 100 rental homesites apiece, that appear to be minimally engaged in the ‘Buy Here – Pay Here’ business model. Why? Probably not deep enough pockets to buy and resell more than one home at a time, let alone carry the financing. Also, lack of operational and marketing knowledge, especially among second and third generation owners, and those who’ve never been anything but passive investors. This sole proprietor segment accounts for the remaining 85 percent of national inventory of 50,000+/-LLLCommunities.

Bottom line? Don’t expect any major changes, albeit except for small ones under way – and just described, in the near future. These matters are not talked about openly at national meetings planned and hosted by national advocacy bodies. Just ‘how bad’ is that situation? One national advocacy bodies does ‘next to nothing’ to promote its’ members and their housing product, i.e. no website, no social media, nada. The other entity? When was the last time you saw or read of any plan(s) to rejuvenate the manufactured housing industry?

Someday, somewhere, ‘Selling More Community Series Homes into LLLCommunities Nationwide!’ should and will become the national topic of conversation – and hopefully action, among manufactured housing aficionados and land-lease-lifestyle community owners/operators in this business for the long haul. Perhaps this national, across industry segment or component lines, will begin at the 24th International Networking Roundtable, 9-11 September 2015, in San Diego, CA. After all, that’s the very THEME of this year’s mega – event, expected to draw a 250 mix of MHIndustry & LLLCommunity businessmen and women. Will YOU be there?

Furthermore, RUMOR has it a treatise is being prepared, even as you read these lines, picking up where last year’s (2014) nationally distributed WHITE PAPER left off, actually making positive, practical suggestions to this noble end, i.e. rejuvenating the manufactured housing industry!. Let’s hope it’s completed in time for distribution at the Networking Roundtable in San Diego. You’ll have to be present though, to get a copy.

POSTSCRIPT. What makes aforementioned corporate cooperation so difficult, if not impossible, at times? Self-serving competitive interests of corporate CEOs protecting the interests (e.g. regional and national market share) of their firms, and as they see it, their stakeholders, employees, even their jobs. Simply a sad reality of business life (Or is it?) in corporate America. And things aren’t any better where competing national advocacy bodies are concerned; but there, it’s more territorial than anything else; e.g. MHARR = smaller regional home manufacturers and no one else; COBA7® = land-lease-lifestyle community owners/operators and their lenders in US & CN; and, MHI = representatives from every segment of the manufactured housing industry.

George Allen, CPM®Emeritus & MHM®Master
Consultant to the Factory-built Housing Industry,
The Land-lease-lifestyle Community Asset Class &
Community Owners (7 Part) Business Alliance®

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Washington Visit, Mystery Solved, Bloom Gone!

June 20th, 2015

COBA8® present Blog # 353 via community-investor.com Copyright 21 June 2015

Perspective. ‘Land-lease-lifestyle Communities, a.k.a. manufactured home communities and ‘mobile home parks’, comprise the real estate component of manufactured housing.’

This blog posting is the national advocacy voice, official ombudsman (press) , research reporter, & online communication media for all LLLCommunities in North America!

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 transform & improve our MHBusiness model!’

Introduction to blog posting # 353. This past week has been filled with traveling, meetings, networking, and pondering what to include in this four part blog posting. Yes, Spencer Roane, MHM® and I made it to Washington, DC., via OH, PA, NJ, DE, & MD. Once at the expensive Capital Hilton Hotel, (Part I) we met with influencers from government and the MHIndustry. (Part II) Everyone enjoys a mystery, but fewer the better in business environs! One is about to be ‘splained’ and resolved in the Allen Letter professional journal. Part III, in a word, was ‘difficult’ to write. Kinda like criticizing a loved one; but if they’re – in one’s opinion – headed down the wrong path, we have a responsibility to speak out. So…And finally; (Part IV) if you’ve ever wanted to showcase your firm’s product or service, in person, before 200-250 LLLCommunity owners & operators, here’s your unique opportunity to do so! And hey, keep those letters coming!

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I.

COBA7® Visits Washington, DC.

Allen & Roane Meet with Regulator, National Advocacy Bodies, & Real Estate Investors Before Talking with Legislators.

Following a relaxing and gastronomically-pleasing weekend dining on fresh seafood (raw oysters, boiled crab, shark steaks, & scrumptious scallops) at Mark’s Place in Cape May, New Jersey, George Allen and Spencer Roane brunched, in Lewes, Delaware, with American Housing Advocate’s Bruce Savage, while enroute to Washington, DC. Bruce is alive and well, free-lancing for several state MHAssociations.

COBA7® affiliates, Allen & Roane, met with Pam Danner, esquire, manufactured housing program director at HUD. Covered a lot of territory in the hour spent together, but the most important, if not exciting topic, came near the end – when we learned of shared interest in promoting HUD-Code manufactured housing as affordable housing!

COBA7® ‘MHInsiders’, Allen & Roane then met with Marc Weiss, esquire, and recently retired MHARR executive Danny Ghorbani. Here the range of topics stretched from inaccurate tallying of monthly and annual new HUD-Code home shipment totals, to affiliating with COBA7®, and our shared interest in needed and adequate – if not new, national representation of all post-production components of the manufactured housing industry, as well as the land-lease-lifestyle community (a.k.a. manufactured home community) realty asset class!

Allen & Roane also met with MHI chairman Nathan Smith, near the end of the day, to network and discuss matters of mutual interest.

The busy day ended with Allen & Roane dining with real estate investors not affiliated with any of the entities identified in the previous paragraphs.

Bottom line? This was one heckuva day for COBA7® affiliates. As blog floggers (readers) know, the upcoming 24th annual International Networking Roundtable features keynote presentations by executives representing all major HUD-code home manufacturers, addressing the theme:

‘Selling More Community Series Homes into LLLCommunities Nationwide!’

…and the presence of all the GSEs at this year’s stellar event in San Diego. This COBA7® visit to Washington, DC., frankly, planted seeds for the anticipated theme of the 25th Roundtable in 2016 – yet to be announced.

Decades Old MH Mystery Solved!

Have you noticed & wondered: ‘Why do monthly & annual HUD-Code new home shipment numbers never tally the same, when reported by the manufactured housing industry’s two national advocacy entities?”

Well, they’re not the same! Probably never have been, though they should be! But guess what? This perennial mystery has been solved, and the tell-all expose’ will be featured in the July issue of the Allen Letter professional journal! Not only that, given the existence of a legitimate national source for ‘home shipment numbers’, a practical solution is evident, and will be proposed, to end this decades-long confusing state of affairs! Don’t miss it this truly historic story.

If not already affiliated with the Community Owners (7 Part) Business Alliance®, or COBA7®, and receiving the Allen Letter professional journal, phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 to do so. Cost? Only $134.95 to join with the other 250 ‘MHInsiders’ already benefitting from statistical research, helpful resources, print & online media, networking & deal-making, property management training/certification, & national advocacy (e.g. ombudsman – press & historian services) available by affiliating with COBA7®.

‘Ah, The Bloom is Off the Rose!’

As a 20 years, direct, dues-paying member of MHI, my respect for the institute in general, and NCC division in particular, wanes!

And that’s not easy for one to say, who’s been a (founding) National Communities Council board member since 1995 – shortly before this MHI division began its’ work in January 1996.

What’s happened? I disagree with the direction the council has taken during the past few years, as attendance at its’ national meetings has dropped from dozens of land-lease-lifestyle community owners/operators of all sizes, to rarely more than a dozen today. At last week’s NCC meeting, of the dozen or so board members in the room, half were bona fide ‘owners’; the remainder, salaried executives from property portfolio firms.

Besides the declining participation in meetings,

• Council leadership should not, in my opinion, be dominated –as it appears to be – by executives and owners of large property portfolios. This troublesome issue was underscored twice last week when 1) a council executive expressed his opinion in public, that it’s unnecessary to qualify in writing how certain proprietary rent survey results are representative only of institutional grade LLLCommunities, and not LLLCommunities at large throughout the same local housing market. The problem with not doing so? Large property portfolio LLLCommunity site rents tend to be higher than neighboring properties. And such skewed reporting can provide cover for further rent increases. And 2), a REIT executive bullied attempted opposition to certain pre-decided agenda topics. So, it was no surprise when one meeting attendee opined privately, following the meeting: “Perhaps the time has come for manufacturer floor dues, paid by small LLLCommunity owners/operators, be diverted to an entity that better represents our interests.”

• Ignoring presence of recreational vehicle rental sites in LLLCommunities is, in my opinion, wrong. Ever since the ALLEN REPORT began ranking property portfolios according to total rental homesite count in 1985, all developed and rentable sites have been included in corporate totals, including those for recreational vehicles. And now that LLLCommunities routinely site six different types of shelter (i.e. pre-HUD ‘mobile homes’; post-HUD manufactured homes, modular units, ‘park model RVs’; ‘RVs for a season’; even site-built homes constructed on-site to look like manufactured homes) this TREND of acquiring mixed-use destination (i.e. MH & RV together) properties, is well established! However, the debut of the NCC’s ‘Top 50 List’, signals MHI/NCC’s desire to change this 26 years of precedent. Specifically, the ‘Top 50 List’ does NOT include RV sites. Consequences? Ignoring the obvious business model trend, and reshuffling of some portfolio rankings. In the latter instance, the most significant being real estate investment trust SUN Communities, Inc., supplanting ELS, Inc., as ‘Largest Owner/operator of LLLCommunities in the World!’ So henceforth, while the ALLEN REPORT continues to identify ELS, Inc., as #1, MHI’s NCC division will likely rank the firm as being only #2. This is yet another sorry consequence of the ongoing and unnecessary disunity that so characterizes the manufactured housing industry! Like it or not, let’s be clear: Recreational vehicles, and RV rental sites are part of our present and future business models!

• More encroachment? Announcement last week, of NCC’s intent to imitate more of COBA7®’s SSRD (Signature Series Resource Document) research; specifically, relating to LLLCommunity Operating Expense Ratios, or OERs. COBA7®’s predecessor articulated the Official MHIndustry Standard Chart of Operating Accounts in 1992, and has been reporting/updating appropriate LLLCommunity OERs ever since. But then, perhaps this is yet another self-serving effort to produce one’s own version of another benchmark statistic, as appears to be the case with aforementioned skewed site rent reporting.

• Don’t look for any of this (the preceding) to change anytime soon! In my opinion, two reasons. As long as MHI continues to practice ‘affluence gerrymandering’ (i.e. scheduling its’ meeting venues in high cost locations, e.g. valet parking @ $47.00/night in Washington, DC) – discouraging participation and decision-making by other than the most successful and wealthy of its’ members; and, continued prohibition of proxy voting at annual elections – as was made clear in new NCC operating procedures circulated for comment last week, present day status quo will prevail, and overall meeting attendance will continue to hover at the ‘only 100’ mark..

Conclusion? All this prompts one to wonder about the value and efficacy of one’s institute membership on one hand; and, whether worth the time and resources to attend and strive against established NCC practices, on the other hand. For me? Per the subtitle of this part of today’s blog posting, “As a 20 year direct, dues-paying member of MHI, my respect for the institute in general, and NCC division in particular, wanes!” However, if I and the few other sole proprietor LLLCommunity owners don’t hang around, to make our views known, it’s downright scary to imagine what might be dictated in the future.

Sponsorship @ 24th Networking Roundtable

We announced nine unique sponsorship opportunities in last week’s blog posting. Already, two major opportunities have been spoken for, by mortgage originators and a real estate investment firm.

What are YOU waiting for? When will you have an opportunity again, to present your unique product and or service to 200 – 250 LLLCommunity owners/operators and other registrants at this year’s event in San Diego, CA., 9-11 September 2015. Simply phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764, to learn details and decide which social networking event to sponsor.

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Local Chattel $; Unique Sponsorship Opportunity!

June 9th, 2015

COBA7® presents Blog # 352 via community-investor.com Copyright 14 June 2015

Perspective. ‘Land-lease-lifestyle Communities, a.k.a. manufactured home communities and ‘mobile home parks’, comprise the real estate component of manufactured housing.’

This blog posting is the national advocacy voice, official ombudsman (press), research reporter, & online communication media for all LLLCommunities in North America!

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 transform & improve our MHBusiness model!’

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Introduction to blog posting # 352. Are YOU overlooking this source for chattel capital? YOU want to participate in the Biggest & Best LLLCommunity networking, deal-making, educational event in all of 2015? Tapped into the timely and helpful resources available to YOU from Allen & Roane? Have YOU read The Advance Man yet? Four questions and answers for manufactured housing businessmen and women nationwide!

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I.

IT IS POSSIBLE

Local Chattel Capital Financing of Manufactured Homes in
Land-lease-lifestyle Communities!

Here’s an email exchange between veteran LLLCommunity operators, one shared with other area property owners, talking of their recent success obtaining manufactured housing and property loan commitments from a regional bank…

“A little over two years ago, _____sent an email note to several of us in the _____area who stay in touch with each other, and said, “Guess what? I received a letter from the president of a local bank who actually said he wants to do business with community/park owners!” We all met, and eventually developed a program involving that banks’ financing of manufactured homes we buy and resell within our communities – filling vacant lots, increasing cash flow and property value, and upgrading our properties. That bank also expressed an interest in financing our communities. Today I received a loan commitment from the bank which will save my firm almost $350,000 in interest over the next five years! Had _____ and I not made an effort to stay in touch with one another, I might never have been invited to that meeting two years ago. Thanks _____!”

And this from the other party…

“This bank has really benefitted from meeting us too. At a lunch meeting a month or so ago, a representative of the bank indicated to me our introduction to them, and resulting loan programs, have resulted in more than $20 million in new loan business for them, in just the past 1 ½ years!”

So, what have YOU done to reach out to your local lending institutions to ‘test the borrowing waters’ for financing new and resale homes on-site in your LLLCommunity, even refinancing the property itself? Maybe the time is ‘right’ for YOU to do so.

II.

A Unique Opportunity…

Be a Major Sponsor at This Year’s 24th Networking Roundtable!

Heretofore, mostly $$$ lenders and brokers, specializing in originating land-lease-lifestyle community mortgages, have been the primary sponsors of nine social networking events at the annual International Networking Roundtable. This year we’re opening up this unique opportunity to anyone who’d like Maximum Exposure before 250+/- owners/operators of LLLCommunities from throughout the U.S. and Canada!

What’s different this year? For starters, all the major HUD-Code home manufacturers will be present as keynote speakers, holding forth on this event theme:

How to Sell More Community Series Homes into LLLCommunities Throughout the U.S.!

Furthermore, all the GSE’s (Fannie Mae & Freddie Mac, for starters) will be present, and possibly the FHFA, as well as senior executives from MHI & MHARR. And as usual, there’re nearly two dozen educational sessions. So, if your firm, as a product and or service supplier/vendor has an active and lively interest in this realty asset class, you’ll want to be Front & Center when these folks gather 9-11 September 2015 at the Hilton Resort Hotel on Mission Bay in San Diego, CA.

Specifically, you and or your firm can sponsor one of two breakfasts at $3,500.00 per F&B (food & beverage) event; one of two luncheons at $5,000.00 apiece; either evening reception at $6,500.00; and all three scheduled ‘breaks’ at a one time total of $8,500.00.

What do YOU get for your sponsorship? Prominent display of your corporate logo on all Networking Roundtable literature. For example; the Registration List prepared for this event is widely recognized as being the most comprehensive compilation of LLLCommunity owners/operators available anywhere – and will feature YOUR logo and contact information during 2015 & 2016! Your firm will also be singled out several times during the event proper. AND, if you care to do so, you’re welcome to distribute premium gifts at the event(s) YOU sponsor!

For more information, simply phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

III,

Allen & Roane in Washington, DC., @ 15 & 16 June!

As used to be said about dance marathons ‘decades ago’, our dance card is full! From the time we arrive in our nation’s capitol on Sunday, the 14th of June, until we leave later that week, our time is committed to meetings with colleagues from MHARR, MHI, HUD, & COBA7® – plus businessmen and women who want to ‘talk shop’ with us, about a variety of MHIndustry & LLLCommunity-related topics! Are YOU on that list? If not, but would like to have a frank, albeit probably short, discussion regarding where the manufactured housing industry is today – and probably headed, contact either one of us. If need be, use the Official MHIndustry HOTLINE in the previous part of this blog posting.

On a related subject, watch this blog posting next Sunday for a summary of what occurs at the National Communities Council division’s meeting on 6/15. Two of five topics I requested be placed on the agenda, made it – three did not. Should make for an interesting meeting – and a most revealing follow up report via this blog, and elsewhere.

And as you likely suspect, the ‘Open Letter to the Manufactured Housing Industry & LLLCommunity Asset Class’, previewed in blog posting #351, continues to materialize, and will soon be ready for industry wide distribution.

IV.

The Advance Man, by Rick Robinson

Hey, just finished reading a genuine thriller of a novel! In this new release, Rick Robinson’s Washington, DC setting, and plot (political intrigue), calls to mind Gary Grossman’s Executive Actions and Executive Treason. Not only that, Rick’s style, i.e. sharing a new body of knowledge – or two, with his reader (e.g. inner workings of DC politics & Godfather Rules), reminds one of the famous mystery novelist, Dick Francis.

OMG. I’d tell you more, but you’ll read the entire review of The Advance Man, in an upcoming issue of the Allen Letter professional journal! Seriously. This is one book you do not want to miss reading. How to get your copy of The Advance Man? Visit www.authorRickRobinson.com. And hey, if the author’s name, Rick Robinson, sounds familiar to you, it should. He’s Vice President of state and regulatory affairs/general counsel at MHI – and this is his ninth book. And be aware, there’s yet another thriller in the works from him. So, like me, become a Rick Robinson fan, and join in this reading adventure!

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NCC Agenda, Shipment #s, & PM $ Compensation

May 30th, 2015

COBA7® presents Blog # 351 via community-investor.com Copyright 31 May 2015

Perspective. ‘Land-lease-lifestyle Communities, a.k.a. manufactured home communities and ‘mobile home parks’, comprise the real estate component of manufactured housing.’

This blog posting is the national advocacy voice, official ombudsman (press), research reporter, & online communication media, for all LLLCommunities in North America!

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 transform & improve our MHBusiness model!’

Important Announcement

There will be no blog posting, at community-investor.com, on Sunday 7 June 2015. Next blog posting, at this website, will likely be Sunday morning, 14 June 2015 or thereabouts… GFA

I.

Allen & Roane in Washington @ 15 & 16 June!

Visits Scheduled with MHARR, MHI, HUD, COBA7® & more…

Yes, it’s that time of year, when – it seems – many manufactured housing and land-lease-lifestyle community roads lead to Washington, DC., for MHI’s annual legislative emphasis meeting and visits to Capitol Hill. Will you be there? If so, maybe we’ll see you and have time to ‘talk MH shop’.

Spencer Roane, MHM® and I’ll begin our trip several days earlier, as we meet in Harrisburg, PA., then drive onto Cape May, New Jersey, where we’ll spend much of the weekend dining on fresh seafood prepared by a gourmet chef – my brother Mark. Then we’ll take the ferry across the Delaware Bay to Lewes, DE., to visit with Bruce Savage of American Housing Advocates. George Porter usually joins this merry band, but has a commitment elsewhere this year. In any event, this is where the future of the MHIndustry & LLLCommunity asset class is planned. Ha!

Once in DC, we’ll likely hang out with industry friends at the picturesque, eclectic Tabard Inn (Novelists oft describe its’ bar, restaurant, even sleeping rooms – some with – and some without bathrooms, as settings for scenes in their books), attend meetings with executives at various government agencies, MH trade groups, and elsewhere. As an NCC board member, I’ll attend the division’s meeting, from 1:30-3PM, on the 15th of June. Will you be there too? In regards to said meeting, here’re items I’ve requested be put on the agenda that day:

• Pros & cons of NCC’s recently debuted ’50 Largest Owners’- not including RV sites, list. Three questions: 1) Why change rental homesite inventory methodology that’s worked for 26 years in the ALLEN REPORT? 2) Will annual membership dues to MHI/NCC, from REITs ELS, Inc., & Sun Communities, Inc., be reduced, since their RV sites have been stripped from their property portfolio total site count? 3) And how will Wall Street analysts view this abrupt unilateral change, in light of new LLLCommunity IPOs anticipated this year and next?

• Status of performance, recruiting members for the NCC, by new salaried recruiter? Frankly, whether these five bulleted items make it onto the meeting agenda will be a clear indicator of sensitivity and responsiveness by NCC leadership, to the concerns of new and old direct, dues-paying members!

• Request for final report and cost accounting relative to Dr. Becker’s two years research project contracted by the NCC. Wasn’t the purpose of said research, to quantify the value and or dollar impact of land-lease-lifestyle communities (a.k.a. manufactured home communities) on local housing markets?

• Results of NCC’s web-based survey circulated to members during the past month?

• Discuss whether the time is right to recommend to MHEI, the Accredited Community Manager® or ACM® professional property management training and certification program be simplified and made less expensive, as an entry level PM offering; or, elevate it to regional and executive property management focus and status, then embrace COBA7®’s popular one day Manufactured Housing Manager®, or MHM® program as NCC’s entry level program of choice!

In the same correspondence to NCC’s chairman, Steve Adler of MUREX Properties, when I made the above request, I also offered to brief the NCC, and by extension MHI, about the ‘new statistics gathering & reporting initiative’ to soon be implemented by COBA7®. The gist of said initiative is to bring accuracy & consistency to the HUD-Code home shipment numbers reported ‘variously’ by MHARR & MHI. COBA7® has already entered into agreements with appropriate data sources to make this happen. And given this blog, via its’ BEBA (Blast Email Blog Alert) distribution to 1,000 MHIndustry & LLLCommunity aficionados each week, there’s the ideal opportunity, even responsibility, to finally bring home shipment statistical accuracy & consistency to our business base throughout the U.S.- the sooner the better.

So, there you have it. Our trip to Washington, DC. If you do plan to be ‘in town’ during the stated time frame, and want to engage in private conversation, or networking with Spencer and or me, simply phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 and let us know your availability.

II.

On-site LLLCommunity Property Manager Compensation

As owners/operators of land-lease-lifestyle communities, we’ve intermittently discussed this important matter, among ourselves, ‘for years’. We’ve talked of ‘doing surveys’, but when push-came-to-shove, no one (and I mean ‘no one’) was willing to openly and honestly share what or how they’re compensating on-site (property) mangers, under a variety of working arrangements. Appears there’re just too many variables in play, to identify a true Common Denominator applicable to everyone, except maybe one, the OER (operating expense ratio) percentage approach.

But first the variables…

• The nature of the job itself, e.g. simple ground lease income only property – or with includes property-owned homes, and how many? Also; full & stable, or a turnaround challenge? And, all city utilities, or water wells & water treatment facilities in place – in good or poor condition? Other factors: adult vs. family property, snow plowing vs. Sunbelt, etc..

• Small vs. large enough LLLCommunity (i.e. occupied & paying rent homesites) to support a fulltime on-site manager vs. part-time. My opinion? It’s a part-time job until more than 150 occupied sites are paying rent. But more on that later.

• One on-site manager or prefer a married couple – preferably retired and drawing one or more pensions from elsewhere. The thought? Get two talents – one inside doing paperwork, other outside doing maintenance), for price of 1 ½ employees, but incurring the risk of losing two, not just one, employees upon occasion..

• Providing housing and or housing allowance – and concessioned site rent or not?

• Paying for all or none of the manager’s on-site utilities?

• Role, if any, of bonuses for leasing and or home sales performance?

• And there’s more; to include, but not limited to: benefits (healthcare, retirement, etc.), provide vehicle, etc..

With all that said, it’s not difficult at all to understand the difficulty finding consensus among owners/operators, let alone willingness to report and explain their respective compensation programs.

The answer? Again, one that’s (deceptively?) simple. If you have access to the Official MHIndustry Standard Chart of Operating Accounts*, you know, under the ‘Allen Model of OERs (Operating Expense Ratios) for LLLCommunities’, the pro forma total OER is pegged at 40 percent (i.e. 40% or 40 cents of every dollar in collected homesite rent), and that…

4.5 percent of 40 percent OER is set aside for Administrative wages/salary, &
3.0 percent of the same base amount, is set aside for Maintenance wages/salary.

How’s that work? Given 50, 100, 150, & 200 site LLLCommunities charging $200/month homesite rent, the following $$$ amounts can be available for the on-site administrative and maintenance management and work at four sizes of properties:

50 sites X $200 rent = $10,000 X .045 admin.= $450, & $10,000 X .03 maint. = $300.

Together = $750/month gross PM wages/salary, divided by 4.3weeks/month = $174/week pay, administrative & maintenance together. Not a fulltime job.

100 sites X $200 rent = $20,000 X .045 admin. = $900, & $20,000 X .03 maint. = $600.

Together = $1,500/month gross PM wages/salary, divided by 4.3 weeks/month = $348/week pay, administrative & maintenance together. Not a fulltime job.

150 sites X $200 rent = $30,000 X .045 admin. = $1,350, & $30,000 X .03 maint. = $900

Together = $2,250/month gross PM wages/salary, divided by 4.3 weeks/month = $523/week pay, administrative & maintenance together. Barely a fulltime job

200 sites X $200 rent = $40,000 X .045 admin. = $1,800, & $40,000 X .03 maint = $1,200

Together = #3,000/month gross PM wages/salary, divided by 4.3 weeks/month = $698/week pay, administrative & maintenance together, for one or two, maybe three employees, working a mix of fulltime and part-time.

Now comes the difficult part. How to best allocate the budgeted administrative and maintenance wages/salary dollars per property, based on its’ size (i.e. again, number of occupied and rent paying homesites), and nature of the property management responsibilities. Are we talking about one fulltime PM, two part-time PMs, or a mix of of fulltime and part-time positions?

All this does not fully address perennial questions relative to staffing and compensating property managers on-site in LLLCommunities throughout the U.S. but it certainly is a place to start.

End Note.

• If you’d like a FREE copy of the Industry Standard Chart of Operating Accounts for LLLCommunities, phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.and ask for it. Special ANNOUNCEMENT for COBA7® affiliates and MHInsiders: The July 2015 issue of the Allen Letter professional journal will include a copy of the newest version of the Income & Expense Analysis Worksheet for LLLCommunities. And on the reverse side of this standard PM form, is a copy of the above referenced Industry Standard Chart of Operating Accounts for LLLCommunities.

III.

COBA7® Preparing an ‘Open Letter to the Manufactured Housing Industry & LLLCommunity Realty Asset Class!’

Content & Distribution Depends on Proceedings at MHI, NCC, HUD, MHARR & COBA7® Meetings in Washington, DC…

WHY an Open Letter to the Manufactured Housing Industry & LLLCommunity Realty Asset Class? Simple. Lack of unified action by MHARR & MHI following last year’s 23rd annual International Networking Roundtable. At that venue, a WHITE PAPER – distributed nationwide by COBA7®, was underscored by keynote presentations and discussions led by Michael Sullivan, CPM® & Ken Rishel; both of whom inspired lively and timely discussion relative to the Past, Present & Future of our beleaguered industry and recovering property type. From there, a formal call went out to leaders of MHARR & MHI, to work together and plan, and eventually host a National Strategic Planning Meeting – ‘for everyone willing to pay their own way’, to convene in the Chicagoland area. As it turned out, the call was ignored; so to date, the manufactured housing industry continues to flounder along at a six year nadir average of but 55,000+/- new HUD-Code homes shipped per year, and with no real end in sight.

An ‘Open Letter to the Manufactured Housing Industry & LLLCommunity Realty Asset Class!’ is the next public manifestation of this Initiative That Will Not Die! What will be included in the forthcoming message to more than a thousand MHIndustry & LLLCommunity aficionados? That’s still coming together, but at present includes:

• Yet another call for a National Strategic Planning Meeting, in late 2015 or early 2016. The ideal setting? Perhaps at the Louisville MHShow during mid-January 2016. Not the best time of year or best location, but certainly an opportunity to
1) support and participate in this national initiative – planned and hosted by MHARR, MHI, & COBA7®; 2) take in a rejuvenated MHShow with dozens of new homes on display, and an array of super seminars; and, 3) maybe even sit for the Manufactured Housing Manager® professional property management certification designation. Now that’s what one might well call a ‘threefer’!

• Time has (more than) come for one or more new HUD-Code manufactured homes – especially a Community Series Home (singlesection with WOW! Factors and durability-enhancing features), to be publicly exhibited near Congress in our nation’s capitol! Why not? The RV industry already does this! Target date? MHI’s next legislative gathering. And again, why not to be planned and hosted by MHARR, MHI, and COBA7®?!

• Identify and cultivate working relationships with new partners, from outside the MHIndustry & LLLCommunity asset class, to strengthen our presence and reputation as affordable housing, with a desirable lifestyle, and help improve our national image through MH brand advertising. Frankly, this latter part is an ideal project for the American Housing Advocates! What are we waiting for?

And yes, there’s more, much more to come; but you likely get the idea….As they say, ‘Stay tuned here – at community-investor.com, for more and timely news about this ‘Open Letter to the Manufactured Housing Industry & LLLCommunity Asset Class!’ And again; what are we waiting for?

There are a number of quiet issues that’ll be addressed at MHI, NCC, MHARR, COBA7®, & HUD meetings on 14, 15 & 16 June 2015. Once Spencer Roane, MHM® and I see how these play out – or don’t, then finishing the ‘Open Letter to the Manufactured Housing Industry & LLLCommunity Realty Asset Class’ will occur..

As a related aside; ‘What would YOU like to see included in such an Open Letter, that hasn’t been mentioned so far? Just let me know via the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or via email: gfa7156@aol.com

And remember, No Blog Posting on 7 June 2015! Start again on or about 14 June. Will try and remember to ‘splain’ all that then…GFA

***.

Answers to Five Tough Questions, Community Buying Group & More…

May 23rd, 2015

COBA7® presents Blog # 350 via community-investor.com, copyright 24 May 2015

Perspective. ‘Land-lease-lifestyle Communities, a.k.a. manufactured home communities and ‘mobile home parks’, comprise the real estate component of manufactured housing.’

This blog posting is the national advocacy voice, official ombudsman (press), research reporter, & online communication media, for all LLLCommunities in North America!

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 transform & improve our MHBusiness model!’

Introduction to this week’s blog posting. Whew! What an exciting two weeks it’s been, processing your answers to the Five Tough Questions! And, if not already an affiliate of COBA7®, here’s one more (new) good reason to do so ASAP! And finally; a successful LLLCommunity owner/operator ‘goes on record’ as to why he/she actively sells & self-finances new HUD-Code homes on-site in LLLCommunities. Three hot topics to read here!

I.

Blog Readers’ Reply to Five Tough Questions

Few of our weekly blog postings during the past seven years have generated as much thoughtful, helpful, passionate response at this multifaceted topic two weeks ago:

‘Five Tough Manufactured Housing Questions Never Before Addressed in Any Public Forum’

Two weeks later, we continue to receive worthy input from businessmen and women actively engaged in manufactured housing & or land-lease-lifestyle communities.

Following are abbreviated versions of the Five Tough Questions, followed by a summary composite of responses received from at least a dozen conscientious individuals.

1. Remain under HUD’s regulatory oversight (per 1976 – 2015 experience), OR seek eventual deregulation?

One response: “If not too late, exit HUD regulation (and join NAHB); but if too late to exit, then simply find ways to WIN with them hanging on our backs. HUD is not fixable, nor will they ever be. They are ‘gubment’ and like Reagan said so well, ‘Beware the person knocking on your door, saying: ‘Hi, I’m from the government, and I’m here to help you.” NB

Probable Bottom Line? Our ‘Big 3-C’ HUD-Code home manufacturers have far too much invested in the past-to-present day business model to change anytime soon; and frankly, they appreciate, even enjoy the protection federal preemption provides, relative to the HUD’s performance-based building code. And given the recent increase in HUD label fees, and moving to the front burner, long dormant programs with potential fines attached, smacks of assurance dollars will be forthcoming to keep the manufactured housing program afloat. Forget deregulation for the foreseeable future!

2. Continue using chattel (personal property) capital to finance in-LLLCommunity home sales transactions; OR, convert to lower interest rate, realty-secured home mortgages likely featuring written rental homesite leases with longer terms than purchase agreement on the home itself?

The latter possibility raises more questions than answers at present, e.g. “How’s this handled in Hawaii? How’s it handled in New Hampshire, where ‘the change’ is already long in place among all LLLCommunities there?” BB. Hmm. Lessons to be learned, pondered and maybe someday effected!”

Probable Bottom Line? Change is likely a-coming; the real question is when? Year 2016 or 2020, or later? With all that said however, don’t ‘count out’ the independent chattel finance firms – yet. Reportedly, Berkshire-Hathaway firms, 21st Mortgage Corporation & Vanderbilt Mortgage& Finance, Inc., presently originate chattel capital loans for 39 percent of the national market, while Wells Fargo garners 6 percent; and the remaining 55 percent is shared by 7,000+/- lenders nationwide.

3. Future of manufactured housing sales, within and outside land-lease-lifestyle communities?

Manufactured housing marketing and sales = manufactured housing distribution. And at present we have four distinct, though at times overlapping business models afoot:

• Independent (street) MHRetailers (formerly known as ‘dealers’). Traditionally filled vacant rental homesites in manufactured home communities cum land-lease-lifestyle communities. Today? Depends on the local housing market, but there’s still ‘some of the same’, as well as strong interest in selling/contracting land & home packages using manufactured and modular homes. But far fewer in business today than 15 years ago.

• Company stores. Manufacturer-owned (street) MHRetailers primarily marketing their corporate brand(s) of manufactured and modular homes in the manner just described..

• Quasi direct sales to consumer outlets, e.g. Factory Expo Homes and others. Where new manufactured homes are marketed online, and or at sales centers often sited near home manufacturing plants. ‘Quasi’ (‘almost’), because consumers remain unable to buy new manufactured homes directly from manufacturers.

• Land-lease-lifestyle Communities. Today, this is a mixed-bag situation. Many, if not most LLLCommunity portfolio owners/operators are engaged in on-site marketing, sales, even seller-financing of new manufactured homes to fill vacant rental homesites. However, this paradigm shift in that business model has yet to impact the majority of LLLCommunities throughout the U.S., i.e. those properties containing fewer than 100 rental homesites apiece, or 85 percent of the estimated 50,000 property inventory nationwide..

Probable Bottom Line? While all are valid means for distributing HUD-code manufactured homes nationwide, a major evolution in home sales could occur among the aforesaid 85 percent of the estimated 50,000+/- national inventory of smaller LLLCommunities; as owners/operators 1) learn how to market, sell and seller-finance new homes on-site; and, 2) HUD-Code home manufacturers recognize this mostly untapped national market, and make it easier for owners/operators to buy, even finance, their product upon sale to homebuyers/site lessees. Both must happen, or this fledgling ‘buy here/pay here’ MH distribution model will not blossom!

4. Future of manufactured housing installation within and outside land-lease-lifestyle communities?

• Federal Installation Standard of 2007 versus Frost Free Foundation®

• Home warranties to cover home installations

Probable Bottom Line. This is a scary question, one awash with unanswered questions. If HUD enforces the Federal Installation Standard in 2016, land-lease-lifestyle communities will likely bear the brunt of the estimated $5,000.00/rental homesite ‘new foundation’ or ‘retrofitting’ cost! The unanswered questions: Will existing concrete foundations, in presently compliant states, be grandfathered – as rumored? Will HUD ‘encourage or discourage’ widespread use and approval of the Frost Free Foundation®, among LLLCommunity owners/operators and state inspection agencies, in lieu of wholesale reconfiguration of rental homesites? To learn more about Frost Free Foundation®, phone the official MHIndustry HOTLINE: (877) MFD-HSNG & request the COBA7® FFF Signature Series Resource Document, or SSRD. It’s FREE to everyone! A simplest answer to all this, for the time being, is to buy one’s new HUD-Code homes only from manufacturers describing and encouraging use of FFF in their official Installation Manuals; learn all you can about the FFF system; and, implement it properly!

5. Future of rental homesite rent rates in land-lease-lifestyle communities?

“Let the market rule! Avoid formulae and laws.” SG

Probable Bottom Line. The blog flogger (reader) is right. In the words of the French: ‘laissez-faire’ or noninterference! After all, look what happened to the original ARC, more than one LLLCommunity REIT; Capital First Realty and others. Just be aware, the 3:1 Rule of Thumb (i.e. average area site rent = 1/3rd unit rent for a 3BR2B conventional apartment in same local housing market) has worked well for more than 40 years; while the 2:1 Rule of Thumb aberration not nearly so well, except in a few specialty (e.g. Sunbelt, all adult communities) local housing markets!

II.

COBA7® Partners with Community Buying Group
to Save Affiliates $$$!

Did you know? COBA7®, as a valuable new service for its’ hundreds of its’ affiliates, has partnered with Community Buying Group, to save money on materials, products and services from a wide variety of national sources and vendors. And there’s NO cost to COBA7® affiliates for this unique service.

Begin buying and saving at Lowe’s, Sherwin-Williams, Sunbelt Rentals, and at least 20 additional CBG Preferred Partners. And the most exciting part we can’t tell you yet, beyond this hint: ‘Who’d YOU like to buy WHAT from, in this MHBusiness, and save mega-dollars along the way?’ Think about it….

Community Buying Group has a list of all COBA7® affiliates. So, as an affiliate, all you have to do is visit COBA7Benefits.com to sign up NOW! Couldn’t be easier!

To affiliate with COBA7®, simply telephone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Frankly, It’s, by far, the wisest way to invest $134.95, or $544.95, even $944.95/year to receive, in the first instance, 12 issues of the Allen Letter professional journal; or, same subscription, plus a dozen Signature Series Resource Documents, e.g. annual ALLEN REPORT, Lenders’ Registry, and much much more! And the $944.95 gets you the Allen Letter, 12 SSRDs, and the Allen CONFIDENTIAL! business newsletter…containing MHIndustry intelligence before it becomes MHIndustry News!

III.

The Compelling Case for Selling New HUD
Homes on-site in LLLCommunities!

Received the following, as an email, from a fellow LLLCommunity owner and COBA7® affiliate.

“New manufactured homes work best for me right now, because ‘repos’ are older, harder to find, and more expensive. Our experience is, buyers prefer new manufactured homes for the same reasons they prefer new cars: no previous owner, no dents or scratches, no smoke or pet odors, and the one year bumper-to-bumper warranty. The key to successful manufactured housing sales is to qualify the buyer and get a substantial down payment on the new home. Specifically, sell to those who CAN & WILL make the mortgage payments. New manufactured homes generally improve the appearance of the LLLCommunity and attract a higher demographic resident, as well as prospective homebuyers.”

As a related aside, this LLLCommunity owner/operator provides seller-originated financing for virtually all his/her homebuyer/site lessees. This chattel capital comes from local banks, private sources, etc.

Pretty much says it all, dontcha think? Come to the 24th annual International Networking Roundtable, 9-11 September 2015, at the Hilton Resort Hotel on Mission Bay in San Diego, CA., and learn more about this process – particularly those of you reading this blog posting not yet engaged in the on-site sale and seller-financing of new HUD-Code manufactured homes. For a descriptive brochure/registration form, phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

***

6 MHIndustry Trends, & Time for New Type MHShow?

May 16th, 2015

COBA7® via community-investor.com Blog # 349 Copyright @ 17 May 2015

Perspective. ‘Land-lease-lifestyle Communities, a.k.a. manufactured home communities and ‘mobile home parks’, comprise the real estate component of manufactured housing.’

This blog posting is the national advocacy voice, official ombudsman (press) , research reporter, & online communication media, for all LLLCommunities in North America!

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 transform & improve our MHBusiness model!’

¬¬¬¬¬¬¬¬¬¬¬

Introduction to Parts I & II of this week’s blog posting.

In Part I, a half dozen contemporary MHIndustry & LLLCommunity trends are identified, along with positive & negative consequences; and, ending with ‘Five Tips to ID Trends!’

Part II, asks, ‘Time and Trends Ripe for a New Type Regional Manufactured Housing Show?’ Hint. The answer is ‘yes’, but how will it look when ready to debut will be the subject of a future blog posting here and elsewhere.

I.

Identifying, Using & ‘Dissing’ Business Trends

“You don’t need the Psychic Hotline to find out what the future holds for your business, but you do need to pay attention to trends. Unlike fads, trends are long-term tendencies that shape our culture and companies. They reflect what is happening in the world around us and help predict what is to come. “

So reads wise guidance relied on during 26 years publishing the Allen Letter professional journal, and nearly seven years penning the Allen CONFIDENTIAL!, a highly respected, limited circulation business newsletter. I no longer recall who provided the sage advice, but it’s been appreciated time and again. At the end of this posting, I’ll list the ‘Five Tips for Tapping into Trends’ that complement the opening quote

In the meantime, I’ll tell you this, the quote’s been a valuable maxim, reminding me to stay alert to and describe emerging trends. In today’s blog, I’ll identify several, but not all the national trends shaping ‘mobile home parks’ into manufactured home communities during the 1970s thru 1990s; then land-lease-lifestyle communities, circa 2005. Will also describe positive and negative characteristics of each trend; and how recently, an accidental ‘dissing’ (‘disrespecting’) of an established LLLCommunity trend, could foist unintended consequences on the manufactured housing industry.

First the trends.

Land-lease-lifestyle community consolidation has been an ongoing, albeit intermittent, trend since the mid-to late 1970s. Then, ‘syndicators’ roamed the land, searching for failed ‘mobile home parks’ to acquire as tax write-offs and turnaround opportunities for their doctor and lawyer limited partners. That drill ended in 1986 with a tax law change. Consolidation then became a series of ‘waves’, first documented in the Roulac RE Consulting Group of Deloitte Haskins + Sells ‘Largest Mobile Home Park Owners list’ in 1987 – precursor to the annual (26th) ALLEN REPORT (a.k.a. ‘Who’s
Who Among LLLCommunity Portfolio Owners/operators Throughout North America!’).

Since then, we’ve seen the real estate investment trust (‘REIT’) wave build from four LLLCommunity property portfolios in 1994 & 1995, to crest at six a decade later; then decline in number to three, five years later (2009); remaining at that small number today (2015) – though new IPOs (Initial Public Offerings of stock, as REITs, is reportedly in the offing.

Next came a few equity ‘players’, one of whom, Hometown America, operates to this day.

And the most recent consolidation wave is evidenced by aggregators buying and flipping property portfolios often comprised of marginally-performing LLLCommunities, to capital sources outside the manufactured housing industry.

Positive aspects of all these consolidation waves? Certainly have popularized LLLCommunities as a realty investment vehicle; and to a lesser degree, highlighted and promoted the lifestyle, especially all adult communities in Sunbelt regions.

Negative aspects of all these consolidation waves? Gone, pretty much, are the days of strong and vibrant state manufactured housing associations, as Mom & Pop-developed LLLCommunities have been absorbed into (now) 500+/- property portfolios nationwide. Large portfolio owners, or their representatives, have supplanted heretofore wealthy sole proprietors active in local and national advocacy matters, seriously reducing attendance at statewide meetings and local chapters. And some would say, certain large property portfolio ‘players’ have, at times, played havoc with local housing market rental homesite rent rates, raising them too much and too frequently, negatively affecting occupancy rates and the value of homes titled by homeowner/site lessees.

Majority of earliest ‘mobile home parks’ were designed to site small (then) singlewide mobile homes. In time however, as the housing type became more popular, and manufacturers understood the $$$ potential of the ‘big box = big bucks’ mantra, multisection homes became vogue – requiring manufactured home community design and development to accommodate the evolving trend. Positives? Today’s larger manufactured homes are certainly more ‘homelike’ than ever before. And today’s newer LLLCommunities ‘look & feel’ more like communities than their high density ‘mobile home park’ predecessors; both measures popularizing, once again, the lifestyle. Negatives? Less unit density = (likely) less ROI. And, unfortunately, that’s also one of the factors working against the ‘affordable housing’ reputation of manufactured housing in years past. While today’s large manufactured homes cost less per square foot, than site-built competition; the tendency, on the part of some large property portfolio owners/operators to ‘push the envelope’ where rental homesite rent rates are concerned, increasing the difficulty of making a case for housing affordability.

National advocacy for manufactured housing has been around for more than seven and three decades respectively, where MHI & MHARR are concerned. However, national advocacy for (then) manufactured home communities did not become a necessity – or the beginning of an eventual wave, until the early 1990s, when several large property portfolios launched IPOs, eventually becoming REITs in 1994 & 1995. Two years earlier, in 1993, the Industry Steering Committee (‘ISC’) was formed by 19 LLLCommunity owners/operators. And in early 1996, the National Communities Council was launched by MHI, absorbing the ISC, eventually making the NCC a full-fledged division.

In early 2014, the national advocacy wave crested with the formation of the Community Owners (7 Part) Business Affiliates®, or COBA7® – where national advocacy is the last of seven function areas.

Positives? If nothing else, national representation and advocacy on the national political and regulatory level. But now, with the debut of COBA7®, there’s 1) ongoing statistical research, 2) monthly distribution of key resource material, 3) weekly and monthly print and online communication via blog and newsletters, 4) & 5) superb networking and deal-making opportunities, and 6) professional property management training and certification via the Manufactured Housing Manager® program.

Negatives? At least two. ‘Too much power by too few at the top’, as in manufacturer members (i.e. the Big Three ‘C’ firms: Clayton, Champion, Cavco), and too few housing finance and (now) land-lease-lifestyle Community portfolio owners/operators! Then there’s ‘affluence gerrymandering’, the purposeful scheduling of national meetings at high-priced resort venues where only the wealthiest businessmen and women can afford to attend – hence, enjoying limited opposition when it comes to deciding matters of national policy and procedure. To this abuse is the added ‘insult to injury’, whereby proxy voting is banned, by at least one national advocacy entity, at national meetings,

Hard to say here, which trend came first, widespread interest in submetering utilities to increase profitability and conserve energy and natural resources; or, resident relations as a professional property management focus that along with profitability and curb appeal, distinguished the better run properties, from those left to languish. Positives? Again, increased profitability and conservation of energy and resources in the first instance; better reputation, more resident referrals, and longer resident retention, in the latter instance. Negatives? Beats me.

Marketing, selling, and often seller-financing new Community Series Homes, or CSH Model manufactured homes on-site in (now) land-lease-lifestyle communities is one of the newest, ongoing trends, to characterize contemporary operations. Forced on owners/operators, with the departure of ‘easy to access chattel capital’ at the turn of the century, and resulting disappearance of thousands of independent (street) MHRetailers, the New Breed of MHRetailer & Lender is likely here to stay! Positives? More AITR (Alternative Income to Rent) measures than ever before; likely resulting in greater ROI potential. Negatives? Difficulty complying with cumbersome, complicated, state and federal financial regulations. And, to date, this trend has not swept up the smaller (i.e. less than 100 rental homesites per property) LLLCommunities who comprise an estimated 85 percent of the national inventory (i.e. 50,000+/- such properties). This trend has been primarily a property portfolio driven phenomenon.

And now this imbroglio (‘an intricate, confused or perplexing state of affairs.’): Mixed-use land-lease-lifestyle communities, once a rarity, have become all but commonplace, as a bona fide trend, among some-if-not-many portfolio owners/operators of this unique, income-producing property type. Mixed-use here, describes income-producing properties characterized by homeowner/site lessees on rental sites within LLLCommunities, whether they reside in ‘mobile homes’, manufactured homes, modular homes, ‘park model RVs’, ‘RVs for a season’, even stick-built homes constructed on-site to look like HUD-Code homes. And yes, even rental units, as in apartments.

• Positives? A clear demonstration of property owners/operators ‘doing what it takes’ to keep vacant rental homesites occupied and paying rent’! Some of these shelter types, especially those RV-related, have helped reclaim lost ground when it comes to providing ‘affordable housing’ in LLLCommunities, as well as filling functionally obsolete rental sites.

• Negatives? Manufactured housing industry purists sometimes have difficulty accepting ‘anything but manufactured homes’ being sited within this unique, income-producing property type. This might be one of the reasons the NCC’s recent ’50 Largest MHCommunity Portfolio Owners/operators’ list debuted with all RV site counts stripped from the rental site totals of portfolio ‘players’. Consequences of this unilateral action? Beyond the initial toppling of ELS, Inc., by sister REIT, Sun Communities, Inc., as ‘World’s Largest Owner/operator of LLLCommunities!’, that remains to be seen. Hopefully the NCC will realize the error of ‘dissing’ valuable RV rental sites in LLLCommunity portfolios. If not, the council runs the real risk the number of RV sites will continue to increase among some-if-not-many property portfolios, to the point where they’ll become the majority shelter choice. One MHI direct, dues-paying member, ELS, Inc., is already at that tipping point. Which suggests this question: ‘If RV sites no longer ‘count’ in a property portfolio total, will annual ‘per site dues calculations’ be based on resulting smaller number of manufactured housing rental homesites? If so, ‘Why do this to one’s budget planning?’, as it likely means, for example, a 50% reduction in annual dues revenues received from ELS, Inc., alone.

And these aren’t all the trends, past and present, affecting manufactured housing and land-lease-lifestyle communities nationwide, but they give you a feel for ‘what’s happening’ and why it’s wise and helpful to be a trend identifier and user.

Here’re Five Tips for Tapping into Trends, cited earlier in this blog posting:

1. Pay attention. Listen to what people are talking about when networking. What choices are being made in stores and elsewhere? Watch for these predictors of consumer demand.

2. Read. Trend watchers read dozens of industry magazines, newspapers and newsletters – on and off the web. Changes in any industry will have a ripple effect in yours.
.

3. Network differently. Talk to clients and competition. Learn about changes anticipated and experienced by others.

4. Keep track. Not observations. Watch for common threads of information, for a clearer picture of what’s happening.

5. Slow down. Reserve time to think about what’s been learned, and what it likely means to your business.

So, ready to become a trend watcher? Let me know when you spot new trends worthy of research and sharing among friends, peers, and business associates. (317) 346-7156. GFA

II.

Time for a New Type Regional MHShow?

Depends on whether YOU agree with the description of the newest, ongoing trend cited in Part I of this week’s blog posting; again:

“Marketing, selling, and often seller-financing new Community Series Homes, or CHS model manufactured homes on-site in (now) land-lease-lifestyle communities….’

First a little back ground. For many decades, vacant rental homesites in ‘mobile home parks’ cum ‘manufactured home communities’ cum LLLCommunities, were oft filled by independent (street) MHRetailers and ‘company stores’ throughout the U.S. With the all but disappearance of ‘easily accessible chattel capital’ from independent chattel finance firms, at the turn of this Century, it became necessary for community owners/operators to ‘step up to the plate’, so to speak, and buy, market, sell, and often seller-finance, or rent, new manufactured homes (since 2009, called Community Series Homes, or CHS models) themselves, on-site. Well, this has worked reasonably well among some, if not many, property portfolio firms and some sole proprietor-owned LLLCommunities. Well enough, that today, more than 30 percent of all annual HUD-Code home shipments go directly from factories into LLLCommunities; that’s up from 25 percent in 2009. But that’s not the whole picture.

Today, 500+/- LLLCommunity portfolio owners/operators, controlling an average of about 20 such properties apiece, account for the ownership of the 15 percent of 50,000+/- properties that have more than 100 rental homesites apiece. What about the 85 percent of the 50,000+/- national inventory, numbering fewer than 100 rental homesites apiece in their properties? There’s ‘the rub’! How do we, as an industry and realty asset class, reach out and bring these mostly (presumably) passive investors to the point of buying new HUD-Code homes to fill vacant rental homesites in their properties, from coast to coast?

Well, one step will occur this Fall, when the top executives from the Big Three C HUD-Code home manufacturers keynote the 24th annual International Networking Roundtable (9-11 September 2015) in San Diego, CA. Their message: ‘How to Buy New Community Series Homes for Siting in LLLCommunities Nationwide!’ Not only will that message resonate with the estimated 250 LLLCommunity owners/operators expected to be present at the event, but ‘that message’ will be circulated as widely as possible during months to follow.

So, what’s all this have to do with the title of Part II of this week’s blog posting? ‘Time for a New Type Regional MHShow?’

It’s likely everyone reading this blog posting has been to one or more or many regional manufactured housing shows in KY, MS, PA, FL & elsewhere – with ‘shows’ being the operative word, indicating ‘homes on display’. Well, ask yourself this, if a LLLCommunity owner/operator: ‘Have you been satisfied with the number and variety of Community Series Homes*1, or CSH Models, on display at these events?’ Methinks most of you would say ‘No’. As a rule, HUD-Code home manufacturers love to show off their latest designs of ‘Big Box + Big Bucks’ multisection, and humongous singlesection homes at these shows. Rare is the CSH singlesection or small-sized multisection home suitable for siting within a LLLCommunity. And that’s one of the two motivations suggesting the need for a new type regional MHShow. The other reason? The vast majority of LLLCommunity owner/operators who aren’t yet buying new HUD-Code homes, for a variety of reasons. In many cases, they simply don’t know how to go about the buying and selling processes, including seller-finance.

So, watch this website next week, or the week after, for a description of what might be in store as a prototype regional MHShow is planned for the Spring of 2016. A hint: it’ll likely be a healthy combination of several two hour plant tours and at least a half dozen pithy HOW TO seminars, during a two weekday time frame. But that’s all for now…

***
End Note.

1. Community Series Homes, or CSH Models. Generally described as being a singlesection or small-sized multisection HUD-Code home with at least one exterior WOW factor (e.g. front loaded porch) and interior WOW factor, plus an array of durability-enhancing features to help lessen the ‘make ready time’ between home owners and or renters. For a free list of these Community Series Homes and where to buy them, simply phone COBA7®’s Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

Five Tough Questions begging answers!

May 8th, 2015

COBA7® via community-investor.com Blog # 348 Copyright @ 10 May 2015

Perspective. ‘Land-lease-lifestyle Communities, a.k.a. manufactured home communities and ‘mobile home parks’, comprise the real estate component of manufactured housing.’

This blog posting is a national advocacy voice, official ombudsman (press), research reporter, & online communication media, for all LLLCommunities in North America!

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 transform & improve our MHBusiness model!’

You get one five part topic this week. The matters in question here should be of utmost importance to MHBusinessmen & women reading this challenging blog posting…

But before we begin, let’s agree on this: Business is not a democracy and business decision-making is generally not a result of the democratic process.

Rather, business decision-making involves assessment of opportunities, in terms of risk & reward, related to ability to supply solutions (i.e. products & services) to prospective customers’ needs & wants. Result? As is oft said: “Profit is the reward for taking risk!”

Corporations & their leaders are expected to make profit motive-based decisions; however at times – like now – when faced with entrenched muddle (e.g. absence of easily accessible chattel capital for 15 years), they should step back, reflect and consider viable, mutually beneficial alternatives to ‘business as usual’.

Hence, relative to these Five Tough Questions, alternative solutions will not be found via the democratic process during Think Tank deliberations, but only thru serious discussion cum decision-making among savvy participants during Think Tank deliberations. GFA

Five Tough Manufactured Housing Questions Never Before Addressed in Any Public Forum

COBA7®’s Goal, as stated in the mast head of this week’s blog posting (See above) is to: ‘Not only Inform & Opine, but Transform & Improve our Manufactured Housing Business Model!’ That’s a four step process; and in the following paragraphs, this blog posting will take the first two steps: to Inform & Opine. Whether the next two steps, Transformation & Improvement take place, will depend on elected and salaried leaders of three national entities representing, advocating for, and affiliated with HUD-Code manufactured housing and land-lease-lifestyle communities nationwide:

• MHARR. The Manufactured Housing Association for Regulatory Reform headquartered in Washington, DC; represents smaller, regional HUD-Code home manufacturers. (202) 783-4-87.

• MHI. The Manufactured Housing Institute, in Arlington, VA. Self-described national advocate for all segments of HUD-Code manufactured housing. (703) 558-0400…

• COBA7®. The Community Owners (7 Part) Business Alliance® in Indianapolis, IN., serves land-lease-lifestyle community owners/operators nationwide and in Canada. Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

Whether all three ronin (‘non government agent’) entities ‘come together’, in Think Tank fashion, as has been suggested before (i.e. Publication of MHIndustry’s Official WHITE PAPER in mid-2014, & proceedings at 23rd annual Networking Roundtable) – but ignored, remains to be seen. Only grassroots entrepreneur businessmen and women, who’re direct, dues-paying members and affiliates of all three entities, can exert sufficient pressure to make this happen. However, entrenched, large scale and specific business self-interests likely will not opt for open discussion, let alone change, relative to one or more of the following Five Tough Questions.

Here’re ‘Five Tough Manufactured Housing Questions Never Before Addressed in Any Public Forum’, let alone in the trade press.*1

FIRST Question. What’s BEST for the Present & Future of HUD-Code Manufactured Housing: Continued Federal Oversight & Regulation, via National Preemptive Performance-based Building (HUD) Code; OR, Deregulation & Cease Funding the Department of Housing & Urban Development’s (‘HUD’) Manufactured Housing Program? And the Best Answer to this Tough Question is?

First, as a related and telling sidebar, know HUD does ‘next to nothing’ to promote manufactured housing, widely recognized as the last true form of nonsubsidized ‘affordable housing’ in the US today! In other words – and in my opinion, ‘HUD is manufactured housing’s federal regulator, Yes; but a fan of its’ affordable housing, No’

Onto to the answer to this Tough Question. Methinks this important decision was made, mid-year 2014 – almost a year ago, by our industry’s elite, sans input from thee and me! (Remember, this is not a democratic process.) The key indicators? Start with the 165 percent increase in label fees last Fall, then the recent ‘recitement’ of two HUD regulatory initiatives that have lain dormant since year 2007. Specifically, nationwide implementation and enforcement of Federal Installation Standards, & Dispute Resolution. Indirect proof? Ask yourself: ‘Why are these regs and measures being rolled out now, AND who will be paying whom for them?’ Answers: Again, in my opinion, ‘To finance the HUD manufactured housing program’, AND ‘$$$ fines from LLLCommunities for the same purpose’!

Our default alternative to deregulation? (It’s all we have left, if I’m right about ‘the decision’ having already been made, in our behalf, to finance HUD). Work on improving perception of manufactured housing via a national advertising campaign – where our factory-built housing type is depicted as (Gasp!) the ‘regulated hybrid housing’ alternative we are! OR, if/when we do deregulate, maybe someday in the (distant) future, demand and be recognized as nothing short of bona fide housing!

SECOND Question. What’s BEST for the Present & Future of HUD-Code Manufactured Housing AND Its’ Homebuyer/Site Lessee Customers living in Land-lease-lifestyle Communities (a.k.a. manufactured home communities): ’Traditional Chattel (personal property) Capital Loans on New & Resale Homes Installed on Rental Homesites, OR, Conversion to Lower Interest Rate, Real-estate Secured Conventional Home Mortgages, Somewhat Guaranteed by Written Leases with Time Terms Longer Than Housing Purchase Agreements?’

The tradeoff? In the first instance, potentially greater risk to, but enhanced protection of, lenders – as well as higher ROI; versus new opportunities to ‘Sell More (affordable) Homes!’ in the second instance. Is it as simple as that? No. Some folk are concerned about (maybe) change in valuation/taxation of homes proper. Others about warranty deeds replacing titles; and still others, how to handle abandoned homes – though usually a local taxing authority matter.

Bottom line? When the FHFA decides, in the near future, what GSEs must do, regarding Duty to Serve, relative to manufactured housing, perhaps they’d be do everyone a favor, and consider both sides of this Tough Question.*2 Word has it, ‘they already are doing so.’

If/when someone tells you this possible change, from chattel capital to real estate-secured mortgaging is the ‘beginning of the end’, know that’s not the case. Rather, it’s likely a better way to take affordable manufactured housing ‘into the future’; and, be assured, chattel capital, especially for lower price/value homes will always be with us.

The effect of all this on land-lease-lifestyle communities, as we know them today? Well, that’s yet another Tough Question. But if it means ‘filling more vacant rental homesites with new and resale homes’, well…

THIRD Question. What’s BEST for the Present & Future of HUD-Code Manufactured Housing AND Its’ Homebuying Customers in LLLCommunities and on Scattered Building Sites Conveyed Fee Simple: ‘Buying from Independent (street) MHRetailers; OR, via in-Community Home Sales Operations; OR, via Factory-direct Where/when Available?’

In many instances, local housing market-related conditions (e.g. housing availability & local economy) and issues (e.g. zoning) influences, but buying decisions are also affected by ease of access to chattel lending and/or conventional mortgage capital, home installation expertise, customer and warranty service, and more.

How does the manufactured housing industry prefer to market its’ product today and in the future? Via 1) Independent (street) MHRetailers and ‘company stores’ (as in the Past), 2) via in-LLLCommunity housing retail salescenters (Present day), and/or 3) factory direct to prospective homebuyers, whether siting their purchase on scattered building sites conveyed fee simple, or in-community (the Future?). Which will it be? Or perhaps an interesting combination of all three?

Here’s why this is a pivotal (tough) question in manufactured housing today. As long as easy access to chattel capital remains absent from the business scene, as has been the case now for 15 years, there’ll be relatively few independent (street) MHRetailers in business; with maybe lesser effect on ‘company stores’, unless they have access to factory lending programs. On the other hand, many if not most of the known 500+/- LLLCommunity portfolio owners/operators today routinely purchase new Community Series Homes from manufacturers, often engaging in seller-finance programs of their own choosing and servicing.

But that latter business model accounts for only 15 percent of the estimated 50,000+/- such properties nationwide. The other 85 percent? They’re Mom & Pop-sized investment properties (i.e. characterized by fewer than 100 rental homesites apiece) and, for the most part, are not presently engaged in filling their increasing number of vacant rental homesites with new manufactured homes. Why? The whole process, including seller-finance, is foreign to them, especially if second and third generation property ownership.

Factory-direct home sales might be the only answer to their economic survival over the long haul, unless they entice nearby homes sales operations to fill their vacant sites. But it’s too early to tell, as ‘factory-direct home sales’ is only now entering business conversations across the country.

FOURTH Question. What’s BEST for the Present & Future of HUD-Code Manufactured Housing, Land-lease-lifestyle Community Owners/operators, AND Its’ Homebuyer/Site Lessee Customers: ‘Widespread Enforcement of (2007) Federal Installation Standards for Manufactured Homes; OR, Approved by Manufacturer and Strictly Implemented Frost Free Foundations®, a.k.a. FFF Installation, for New and Resale Homes being sited in LLLCommunities?’

What’s pivotal here, is the issue of compliance with federal standards and/or FFF, and who’s paying for the installation (i.e. forced re-installation via retrofitting of developed, even well-performing rental homesites) thereof, the homebuyer/site lessee or LLLCommunity owner/operator?

Likely not the home manufacturer! Hence the lukewarm endorsement of FFF since ‘recitement’ of Federal Installation Standards was announced. Why? Apparently, lack of confidence that licensed installers and/or LLLCommunity owners/operators will implement FFF properly – and wind up being fined accordingly. And they just might be right…

No, this one’s ‘on the LLLCommunity owner/operator’ cum homebuyer/site lessee, from start to finish – and for the most part, neither sees it coming! So reminds me of the time, at the turn of the Century, when the chattel capital bubble burst – how Randy Rowe, of Green Courte Partners, warned a group of us of the coming (2007) self-immolation by the conventional housing finance market. He/we clearly saw it coming, but no one did anything to prevent it! (What could we have done anyway? Nothing!) Now we’re faced with a similar situation, where the Federal Installation standards in general, and Frost Free Foundations®, in particular, are concerned – along with dollar consequences almost certainly to be borne by LLLCommunity owners/operators nationwide!

FIFTH Question. What’s BEST for Rental Homesite Lessees AND LLLCommunity Owners/operators: ‘Application of the Traditional 3:1 Ratio, to Estimate Stabilized Rental Homesite Rent Rate in Most Local Housing Markets ( with possible Sunbelt exceptions); OR, Application of the ‘in-Vogue Among Some Property Portfolio Players’, 2:1 Ratio, to Set and Justify Rental Homesite Rent Rates in Many, Local Housing Markets?’

Example applications of both rules of thumb: 3BR2B conventional apartment rent is $900/month. Divide that figure by ‘3’ to estimate $300/month site rent in the same local housing market. OR, divide by ‘2’ to estimate $450/month site rent in some (portfolio) LLLCommunities. Who cares? Reasonable LLLCommunity owners/operators, and homeowner/site lessees concerned about maintaining the value of their residences.

This MHIndustry observer has been criticized in the past, for pointing up this difference; but it’s difficult to ignore, in light of the large number of mismanaged LLLCommunities on the ‘for sale’ market since the turn of the Century – oft characterized by too high site rent rates and declining physical and economic occupancy. If overly aggressive rent increases drive investors out of business, so be it! But what about the lenders, homeowners/site lessees, and former employees compromised and or injured in the process? So, how will you estimate LLLCommunity site rents when going into new local housing markets in the future?

KNOW WHAT? These five tough questions deserve open (industry) discussion, and hopefully resolution, in a Think Tank setting – the sooner the better! And the time is ‘right’ for this to happen. How so? When the Urban Land Institute (‘ULI’) dissolved the Manufactured Housing Communities Council (‘MHCC’) this Spring – following its’ decade run (formed in 2004), a ‘public forum vacuum’ materialized, relative to identifying and parsing industry issues and related matters.

All that needs to happen, is for salaried and elected leaders of MHARR, MHI, & COBA7®, to agree to convene in the Chicago area, OR at the RV/MH Heritage Foundation in Elkhart, IN., this Summer – maybe even on Monday, 3 August, the day of the annual Hall of Fame (evening) Induction Banquet?

And make this national forum available to anyone in the MHIndustry and LLLCommunity asset class who’s willing to pay their own way! Will this happen? I sincerely doubt it – for a couple sorry reasons.

FOLLOW THE MONEY! Well, here’s the gist (‘essence or substance of a matter’) of all Five Tough Questions! No matter how each is answered and resolved, as they say: ‘Someone’s ox is going to be gored!’ It’s just a darn shame personal and corporate self-interests are so strong and pervasive, in some if not most quarters, the overall general health of the manufactured housing industry (i.e. Nadir average of only 55,146 new HUD Code homes shipped/year between 2009 & 2014, with no end in sight!), and to a lesser extent, the land-lease-lifestyle community asset class (i.e. Estimated 250,000 vacant rental homesites to be filled nationwide) continue to be back burnered, suffering in the prevailing, stagnant, self-serving ‘business as usual’ process!

It’s like ‘we’ve retrenched so far to survive’, since year 2000, ‘we’ve lost the will to thrive’, except via old and proven ways just described. In my opinion, we’re, as an industry and realty asset class, simply afraid to answer these Five Tough Questions, out of fear of the answers and needed changes. Prove me wrong!

Who and where’re the capable, experienced, motivated, savvy, and charismatic national leaders to bring all of us (i.e. MHARR, MHI, COBA7, & independents) together to SAVE OUR INDUSTRY; to, as was pointed out at the beginning of this posting, ‘transform and improve’ our 70 year business model, returning us to prosperity?! Until that happens, the following quote from a nationally known and respected businessman (not me) sadly applies: “George, I wish we had a __________(national advocacy body) that was leading instead of managing!” Amen to that!

***

End Note.

1. Trade press. A decade ago, we were generally well-informed by the Manufactured Home Merchandiser magazine, The Journal, and the Allen Letter – all print publications. There were no online ezines. Today? Only The Journal and (renamed) Allen Letter professional journal remain, along with two online ezines and a weekly blog posting at community-investor.com (bearing this particular posting).

2. FHFA = Federal Housing Finance Agency; GSEs = Freddie Mac & Fannie Mae. All three federal government entities are expected to be present and participating in the 24th annual International Networking Roundtable, 9-11 September, in San Diego, CA. For an informative brochure and or to register, phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

George Allen, CPM®, MHM®
COBA7®, a division of GFA Management, Inc., dba PMN Publishing
Box # 47024, Indpls, IN. 46247
(317) 346-7156

SUN Communities # 1 per NCC; Networking Roundtable on horizon…

May 2nd, 2015

COBA7® via community-investor.com Blog # 347 Copyright @ 3 May 2015

Perspective. ‘Land-lease-lifestyle Communities, a.k.a. manufactured home communities
And ‘mobile home parks’, comprise the real estate component of manufactured housing.’

This blog posting is a national advocacy voice, official ombudsman (press), research reporter, & online communication media, for all LLLCommunities in North America!’

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!’, & the Goal of its’ print & online media = to ‘Not only inform & opine, but transform & improve our MHBusiness model!’

***

MHI’s NCC busts its’ likely largest dues-paying member, from ‘Biggest Owner of LLLCommunities in the World!’ to #2 position; simultaneously elevating second largest owner/operator on 26th annual ALLEN REPORT, to vaunted #1 position, amidst outcry over outright imitation of COBA7®s Signature Series Resource Document! The 24th International Networking Roundtable, with distribution of its’ event brochure last week, is signing up registrants daily. Illinois’ IMHA sets political activism and effective lobbying example for other state MHAssociations! And, COBA7®s final Goal on its’ five part WISH LIST is described in detail.

***

I,

Fallout Continues Over MHI’s NCC’s Imitation of annual ALLEN REPORT!

We had no idea there were so many pithy quotes afoot, relative to the crass imitation of this longstanding and respected work product. Here’s a sampling of quips and words of encouragement received, from blog floggers (readers) to date, by Community Owners (7 Part) Business Alliance®, or COBA7®:

‘He who is short on originality is usually long on imitation.’

‘Imitation is the antithesis of originality.’

‘He who lacks originality is usually proficient at imitation.’

‘The absence of originality is the precursor to imitation.’

‘Imitation is the by-product of absence of originality’

And finally, one we’ve all heard before: ‘Imitation is the sincerest form of flattery.’

For those just joining this conversation, know it has to do with MHI’s NCC Division’s recent creation of an ‘April 2015, Largest 50 Community Owners & Operators’ List, ranking property portfolios based solely on rental homesites for HUD-code homes – omitting all recreational vehicles (‘RV’) sites from a reporting firm’s site count. The format adopted by MHI’s NCC division imitates the popular 26 year old ALLEN REPORT, but NCC’s change in ranking methodology, as just described, changes some firms’ sequential position relative to their competitors.

Most notable example of said ‘change’ occurred just before the ‘April 2015, Largest 50 Community Owners & Operators’ List debuted at the recent MHCongress in Las Vegas. The following ‘cumbersome but tell-all headline not used for Part I of blog # 346’ – breaking this story last Sunday, tells of one unintended, albeit embarrassing consequence of this unique story of imitation.

The headline: “MHI’s NCC-proposed ‘RV site less ranking’ of LLLCommunity portfolios reduced its’ biggest dues-paying member, ELS, Inc., to # 2 position, behind (now) # 1 Sun Communities, Inc., when latter recently acquired an additional 3,100 MH rental homesites in Florida!”

According to an as yet unpublished article in Allen Letter professional journal,, the mixed-use property portfolios of real estate investment trusts (‘REIT’), ELS, Inc., & Sun Communities, Inc., now compare in needlessly ‘cornfusing’ ways:

• ELS, Inc., @ 140,000+/- total rental homesites per 26th ALLEN REPORT, vs. NCC’s ‘April 2015 Largest 50…List’ @ only 71,500 sites, not including RV sites! A 51 percent reduction in ELS portfolio size!

• Sun Communities, Inc., @ 92,234+/- total rental homesites per 26th ALLEN REPORT (inclusion of 3,100 recently acquired sites in FL.), vs. NCC’s ‘April 2015 Largest 50…List’ @ 74,259, not the 71,129 posted during said MHCongress!

Bottom line? ELS, Inc., continues to be ranked, by the 26 year old ALLEN REPORT, as ‘Biggest Owner/operator of LLLCommunities in the World!’, but is only # 2 on NCC’s ‘April 2015 Largest 50…List’! And Sun Communities, Inc., according to NCC’s ‘RV site less ranking’ methodology, is now positioned, given recent acquisition of 3,100 MH rental homesites in FL, as ‘Biggest Owner/operator of LLLCommunities in the World!’

Furthermore; in the minds of 500+/- LLLCommunity portfolio ‘players’, dozens of Wall Street analysts following the three REITs, and other mixed-use property portfolio owners/operators, which methodology is preferable going forward? Comparing ‘apples-to-apples’ (i.e. total rental homesites to total rental homesites) as has been the practice for the past 26 years; or ‘apples-to-oranges’, separating out ‘RV sites’ from ‘rental homesites’? I’m certain MHI’s NCC would like to know, so call (703) 558-0666; and COBA7® would as well: Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

Let’s hope common sense prevails, and MHI’s NCC scraps promotion of an unneeded, confusing inventory research document, imitating an industry standard in place and functioning well for 26 years!.

II.

24th International Networking Roundtable
‘Off & Running’!

Brochures for this year’s Networking Roundtable are now being distributed. First exposure was as an attachment to last week’s blog posting to 1,000+/- recipients. Before the end of the day (Sunday), completed registration forms were arriving via email – and they continue to arrive daily. Strongly recommend you not wait this year, until August or September to sign-up. Given the strength of the program agenda, nature of its’ theme (i.e. ‘Selling More New Homes Into LLLCommunities!’), and location on Mission Bay in San Diego; well, you don’t want to miss out when the event ‘sells out’ – like it almost did last time we were there, in 2012.

What’s so very special this year? Hard to know where to start, but here’re a few extraordinary, titillating tidbits:

• No fewer than five top executives from largest HUD-Code home plants, keynoting the roundtable, telling why you should be buying Community Series Homes from them, what marketing & sales support they provide, their position of Frost Free Foundations®, & How to calculate affordable housing price points!’

• Representatives from both GSE’s, Fannie Mae & Freddie Mac, have asked to be invited back, to continue the lively and revealing discussions first experienced last Fall in Peachtree City, GA. Expecting to add the Federal Housing Finance Authority to this already heady mix. How can you not want to be present?

• Dr. David Funk. That’s really about all I have to pen – for MHIndustry veterans! Anyone who’s listened to this Cornell University researcher and department head hold forth on ‘Housing Economics & Manufactured Housing’s Strategic Niche!’ always comes back for more!

• Frankly, I could go on and on and on. There’s simply nothing else like this available to LLLCommunity owners/operators nationwide. Nearly two dozen seminars and panels, special appearances by the RV/MH Hall of Fame, MHI & MHARR staffers, as well as COBA7®, the event planner and host

For more information, phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 & use attached brochures to register for the Networking Roundtable, and to affiliated, at one of three levels, with the Community Owners (7 Part) Business Alliance®.

III.

Illinois IMHA Makes 30 Year History!

New Blood + New Talent = New Successes for a state MHAssociation! Yes, a scant three years ago, the newly elected board of directors took over direction and scope of the Illinois Manufactured Housing Association. Their first order of business was to hire a new executive director, then aggressively address a broad array of fiscal issues and regulatory challenges, which if left unaddressed at the time, threatened to overwhelm the many decades old advocate for manufactured housing in the state of Illinois. What happened?

Increased membership, a rejuvenated budget and vastly improved income and cash flow, record attendance at annual meetings, even a new print directory of members – for the first time in years! But most significant have been the association’s stunning successes on the political scene – in large part facilitated by a board member who’s a passionate political wonk (‘obsessive student’). Well, this combination of new members, new $$$ blood, new talent, new successes, and new leadership, gelled recently as IMHA initiatives ‘more than made their way’ through the Illinois legislature. Here’s how Frank Bowman, IMHA’s executive director, describes circumstances today:

During drafting of SB 1702, IMHA was able to convince the Illinois Secretary of State’s Office, that while manufactured homes and ‘park model RVs’ are indeed vehicles, they’re non-motorized vehicles, and antiquated licensing rules in effect for 70+ years, are ill-suited for MHRetailers selling today, especially owners/operators of land-lease-lifestyle communities selling new and resale homes on-site! Result? A change in rules that include a major reduction in ‘dealer licensing fees’ for community-based MHRetailers. Those savings, per business entity, more than offset the cost of IMHA membership! Anyway, SB 1702 passed the state Senate without opposition on 23 April, and was introduced in the House on 24 April. There’s no anticipated opposition in the House, or by the Governor; so hopes are high this bill will become law during July 2015..

Riding, in part, on that success, IMHA was also successful in having another bill introduced, HB 2627, addressing ‘interest caps’ put in place by Illinois that are far below the ‘rebuttable presumption caps’ established nationally. The initiative passed the House 80-34 on 23 April and was read in the Senate, later the same day. This bill too is expected to pass muster in the Senate and be signed by the Governor.

What’s to be learned from all this? Several things. First , it demonstrates the business climate in the state of Illinois is improving! Second, it clearly shows the effectiveness of a rejuvenated state MHAssociation, a body capable of introducing and having favorable legislation passed, rather than always having to fight a rear action against negative legislation. Third; there’s finally strong momentum in the state of Illinois, where manufactured housing is concerned, and hopes are high about regaining ground lost during the past decade.

Kudos to Frank Bowman; Doug Daniels, chairman of IMHA’s board; Ken Rishel, IMHA’s legislative committee chairman; as well as board members and association members who worked together to advance manufactured housing in the state of Illinois!

And know what? On 5 May 2015, IMHA board and general members will gather in Springfield, IL., to visit legislators and tell manufactured housing’s exciting story as affordable housing, and of land-lease-lifestyle communities as being the desirable lifestyle of choice for thousands of Illinois residents!

***

IV.

Personal & Corporate WISH LIST for COBA7® & LLLCommunity Activities @ 2015 & Beyond….

As you’ll recall from the previous blog postings, we’ve reviewed four of the five items on COBA7®’s WISH LIST for 2015. However, did not do so last week.

Anyway, we’re back on track, and the following WISH is the fifth and final one listed. Here it is:

“Continue to represent, in so far as possible, post production segments of the MHIndustry with ombudsman (press) services, and function as official historian for everyone in the manufactured housing industry.”

Yes, this WISH is a catch-all of sorts. First off, it describes a quiet movement occurring throughout the manufactured housing industry, among segments other than home manufacturers, chattel capital sources and servicers, and LLLCommunity owners/operators, seeking increased and improved national and regional representation.

Furthermore, this WISH is being fulfilled via COBA7®’s willingness to serve as official ronin (‘non government’) ombudsman (press) to the manufactured housing industry and LLLCommunity asset class. What’s an ombudsman (press)? Someone who investigates complaints and concerns from the public. Ombudsman (press) can be government, corporate, or association-focused. And the (press) part? Acknowledgement of the ‘bully pulpit’ when need be, to publish-with-an-eye-to-resolving complaints and concerns. To access the ombudsman (press), phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

And official historian? While the RV/MH Heritage Foundation in Elkhart, IN., maintains copies of The Journal in its’ library stacks, several decades old collections of past issues of the Allen Letter professional journal, the Allen CONFIDENTIAL! business newsletter, and hard copies of nearly 400 weekly blog postings at community-investor.com, have been committed to a major national building-related institute’s library for posterity. This bequest includes the largest known private, corporate library of manufactured housing and LLLCommunity books. Furthermore, a concerted effort has been underway since MHI’s NCC was founded in 1966, to document trends, regulatory issues, and more, relative to the LLLCommunity asset class, e.g. Bruce Savage’s The First 20 Years! published during 2014. Plus, COBA7® continues to be the only national MHIndustry presence, to offer seminars on memoir writing, and preparation of one’s autobiography. To purchase a copy of Savage’s book, or express interest in participating in a writing class this Summer, phone (317) 346-7156.

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MHCongress Shakes Things Up! Sun Communities = #1 in size

April 24th, 2015

COBA7® via community-investor.com Blog # 346 Copyright @ 26 April 2015

Perspective. ‘Land-lease-lifestyle Communities, a.k.a. manufactured home communities and ‘mobile home parks’, comprise the real estate component of manufactured housing.’

This blog posting is a national advocacy voice, official ombudsman (press), research reporter, & online communication media, for all LLLCommunities in North America!

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!’, & the Goal of its’ print & online media = to ‘Not only inform & opine, but transform & improve our MHBusiness model!’

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Attendance and enthusiasm may well have been up, during the recent MHCongress in Las Vegas; but – in my opinion – the event was awash with unneeded controversy (Read I.), suffered a ‘telling’ oversight (Read II.), but did experience bona fide off-agenda progress between GSE Fannie Mae and LLLCommunity owners/operators (Read III.). Oh yes, and there was some on-camera drama better left undescribed for the time being….

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I.

GUESS WHO MIGHT NOT LIKE THE CONSEQUENCE OF THIS CHANGE?

Manufactured Housing Institute’s National Communities Council divisions

‘April 2015, Largest 50 Community Owners & Operators’ List, Ranking Property Portfolios Based on Rental Homesites for HUD-Code Homes (After Omitting All RV Sites!), Positions REIT Sun Communities, Inc., to Supplant ELS, Inc., as Largest Owner/operator of Land-lease-lifestyle Communities (a.k.a. manufactured home communities) in the World! How so? Read on…

The above paragraph, and what follows, are stunning headline statements spawned by unnecessary unilateral changes to property portfolio inventory methodology utilized by the ALLEN REPORT (a.k.a. ‘Who’s Who Among LLLCommunity Portfolio Owners/operators Throughout North America!’) for the past 26 years! Brings to mind the truism: ‘If it isn’t broken, why fix it?’

• NCC’s ‘April 2015 list’ positions Sun Communities, Inc., a real estate investment trust (‘REIT’), to soon be publicly identified as Largest Owner/operator of Land-lease-lifestyle Communities (a.k.a. manufactured home communities) in North America, for the first time since its’ IPO (Initial Public Offering…of stock) in 1994; repositioning competitor ELS, Inc., into second place – for the first time ever! How so? While presently listed as number two on the NCCs ‘April 2015 list’ (Remember; sans RV sites in property portfolio counts!), Sun’s recent acquisition of 3,130 rental homesites in FL, increases its’ total rental homesite count to 74,259, significantly greater than the RV site-stripped portfolio of ELS, Inc., now at only 71,129 rental homesites!

• Furthermore, the NCC’s purposeful omission of ‘recreational vehicle sites’ from their official rental homesite count, on the ‘April 2015 list’, ignores the growing presence and role of mixed use properties as an integral part of the paradigm shift (i.e. LLLCommunities, not MHRetailers, filling vacant rental homesites with a variety of housing options), underway since the start of the new millennium! For example; of the six types of shelter now commonly found sited within LLLCommunities, two of them are recreational vehicle (‘RV’) related!*1 Why the omission of RV sites from the portfolio counts? Ask them, not me. In my opinion, it likely has to do with MHI being a HUD-Code housing related national advocate, not wanting to mix RVs into their housing coverage and representation – even though their manufacturer members fabricate and ship recreational vehicles when need be. COBA7®, on the other hand, source of the annual ALLEN REPORT will continue to inventory MH & RV sites together, before ranking property portfolio firms in order of declining total site count.

• Good News. While the NCC does not identify any new property portfolio ‘players’ on the ‘April 2015 list’ of 50 community owners & operators, they do provide ‘rental homesite count’ information from 18+/- firms not reporting same in recent years. This new information will likely be included next year, in the 27th annual ALLEN REPORT, a.k.a. Official ‘Who’s Who Among LLLCommunity Portfolio Owners/operators Located Throughout North America!’ For a copy of the 12 page, 26th annual ALLEN REPORT, listing 110, of the known 500+/- firms, phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764, and affiliate with the Community Owners (7 Part) Business Alliance®, or COBA7®.

• Comparing the NCC’s inaugural ‘April 2015 list’ with the 26th ALLEN REPORT, down to 1,000 rental homesites property portfolio size, the latter identifies 40+/- firms NOT included on the former’s list! What makes the matter even more interesting, is there’re dozens of additional LLLCommunity portfolio owners/operators who do not appear on either proprietary list. Here’re just a few, in alphabetical order: Brandenburg, Staedler & Moore (CA), Churchill Group (CO), Lakeshore Communities (IL), Moore Enterprises (TX), Phoenix Manufactured Homes (PA), Tower Management (CA), and many more….again, 500+/- in all, owning/operating more than five communities &/or 500 rental homesites apiece.

• Of the 50 firms named on the NCC’s ‘April 2015 list’ only 20 are highlighted in bold print, or 40 percent thereof, identifying them as direct, dues-paying NCC members. However, among the first 79 firms reviewed on the 26th ALLEN REPORT (down to the same 1,000 rental homesite count limit), 50 firms, or 63 percent, are affiliated with COBA7®! And, among all 50 firms listed on the NCC’s ‘April 2015 list’, more than half are presently affiliated with COBA7®!

• Be wary of unsubstantiated claims. These two quotes are from the NCC’s ‘April 2015 list’: “MHI’s National Communities Council is the leading national organization representing the interests of manufactured home community owners, operators, managers, developers, lenders, and suppliers.” Really? How is this measured? Perhaps by number of direct, dues-paying members? If so, reread previous paragraph and reconsider. Then this, “The NCC is also the industry’s most reliable source of data used to create more opportunities for the successful development, operation, and marketing of land-lease communities.” Really? First, what are we talking about here? ‘Manufactured home communities’ OR ‘land-lease communities’? And, just what ‘reliable sources of data’ are available, related to physical & economic occupancy, operating expense ratios, rental rates, income capitalization rates, PM salaries, and more? An inquiring public would like to know…

Bottom lines? The NCC’s ‘April 2015 list’ contains the names of only 50 firms owning/operating LLLCommunity portfolios comprised of 1,000 or more rental (HUD-Code only) homesites. The 26th ALLEN REPORT lists 79 like-sized firms (i.e. with 1,000 or more rental homesites), 110 overall! Truth be told, the actual total number of such firms, with 1,000+ rental homesites apiece, is closer to 100, perhaps even 150 firms. The majority of these shadow owners/operators eschew any form of publicity, for a variety of good and personal reasons. However, they almost all routinely cooperate with, and financially support, the ongoing realty asset class research of COBA7®.

Finally; all 500+/- known LLLCommunity portfolio owners/operators, especially the firm’s decision-makers, can be accessed by anyone, for a price, by direct mail, via COBA7®. Lenders, insurers, and property portfolio builders do so all the time. Simply phone the above-referenced Official MHIndustry HOTLINE….

End Note.

1. Six types of shelter found in many contemporary land-lease-lifestyle communities (hence use of the new specialty term for the realty asset class): pre-HUD code ‘mobile homes’, post-HUD code manufactured homes, modular homes, ‘park model RVs’ – especially suitable for functionally obsolete rental homesites in generally older properties, ‘RVs for a season’, and in FL., stick-built homes constructed on-site, usually following severe hurricanes, to imitate HUD-Code manufactured homes. A.k.a. ‘LLLCommunities’. GFA

II.

2015 Awards Luncheon at the MHCongress

One Pithy Question: Where is/are the annual MHIndustry awards for design(s) of Community Series Homes, or CSH Models?

You know, the specially-designed homes, agreed upon during the National State of the Asset Class (‘NSAC’) caucus, convened at the RV/MH Heritage Foundation’s Hall of Fame facility on 27 February 2009 – six years ago! There, 100+/- HUD-Code home manufacturers and (then) manufactured home community owners/operators agreed to ‘What it would take to sell more new manufactured homes into this unique, income-producing property type nationwide?’ Their answer? Singlesection and modest-sized multisection (NOT the ‘big box = big bucks’ behemoths taking our industry, at the time, down the road toward oblivion, via head-to-head competition with site-builders), but HUD-Code homes with one or more WOW! factors inside and out, plus a plethora of durability-enhancing features, enabling inexpensive ‘make-ready’ between contract buyers and renters.

Yes, these are the same specially-designed homes that, for the most part, have stimulated at least a five, maybe ten percent increase in the number of HUD-Code homes being delivered directly into (now) land-lease-lifestyle communities, from 25% in 2009 to 30% by end of 2013, and likely even higher now!

Furthermore, these Community Series Homes, or CSH Models, have had a lot to do with the manufactured housing industry’s successfully executing a paradigm shift, since the beginning of the New Millennium. A paradigm shift forced by the lack of easy access to chattel capital, hence fewer homes now sold by independent (street) MHRetailers into LLLCommunities; with many CSH Models now sold, and often seller-financed, by the owners/operators of these multifamily rental properties!

So, why aren’t we recognizing this ‘change in design’ to meet market demand? Hopefully the folk who dream up these awards will effect this needed and worthy addition, in time for the 2016 MHCongress.

In the meantime, if you’d like a list of product specification characteristic of Community Series Homes, along with a list of HUD-Code home manufacturers who routinely fabricate and ship them to LLLCommunities, simply phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. You do not have to be a COBA7® affiliate to request and receive this very helpful Signature Series Resource Document, or SSRD – one of more than a dozen produced by COBA7®..

III.

Fannie Mae, the GSE, Makes MHIndustry History!

Yes, they sure did! For 2 ½ hours during the afternoon on Wednesday 15 April, 30 individuals (20 @ Fannie Mae reps, lenders, & financial consultants, plus nine land-lease-lifestyle community portfolio owners/operators, and one Mom & Pop ‘player’ – me) identified and discussed a variety of issues of mutual interest and concern. The LLLCommunity owners/operators hailed from New Hampshire to California, New Jersey to Colorado, and from Illinois, Wisconsin, and Indiana.

What’d we talk about and resolve? Much and little. Huh? Yes, we ‘much’ discussed rental units on-site in LLLCommunities, flood plain issues, pre-HUD Code homes, park model RVs, the defunct STAR quality rating system re LLLCommunities, and near the end of the meeting, HUD’s Federal Installation Standard implementation and enforcement plans, and possible role for Frost Free Foundations® along the way. But ‘little’ was resolved. Nor did any of us expect change or closure.

This Las Vegas venue was a continuation of spirited dialogue begun during the 23rd annual Networking Roundtable, in Peachtree City, GA., last Fall – when Fannie Mae & Freddie Mac, for the first time, met and talked with 200 LLLCommunity owners/operators from throughout the U.S. The Las Vegas venue, ‘off MHI’s MHCongress agenda’, was/is also a springboard onto the 24th annual Networking Roundtable, scheduled for 9-11 September 2015, in San Diego, CA.. Once again, the two GSEs, along with invited representation of the Federal Housing Finance Authority, will continue the Open Discussion of what the GSE’s ‘can do for us’ and what we could ‘do for them’.

To ensure an invitation to participate in the 24th International Networking Roundtable, 9-11 September 2015, phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764, and ask for an event brochure, containing the exciting agenda and names of 20 presenters. Also know, this year’s theme, keynoted by a half dozen HUD-Code home manufacturers, is ‘How to Sell More New Community Series Homes into LLLCommunities Nationwide!’ If you own/operate LLLCommunities, how can you not want to be present to prosper from this unique combination of ability, experience, and motivation?

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New Paradigm Education & Micro Units/Tiny Houses

April 18th, 2015

COBA7® via community-investor.com Blog # 345 Copyright @ 19 April 2015

Perspective. ‘Land-lease-lifestyle Communities, a.k.a. manufactured home communities and ‘mobile home parks’, comprise the real estate component of manufactured housing.’

This blog posting is a national advocacy voice, official ombudsman (press), research reporter, & online communication media, for all LLLCommunities in North America!

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!’, & the Goal of its’ print & online media = to ‘Not only inform & opine, but transform & improve our MHBusiness model!’

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Introduction to this & next week’s blog postings at this website:

This week. 1) What is seriously missing in manufactured housing’s New Paradigm? The paradigm first described here, for you, last week. 2) The Park Model RV ‘discussion has only just begun. Think too of Accessory Dwelling Units or ADUs & Micro Units – plus what we’re not discussing them yet, Tiny Houses! & 3) This week’s posting concludes with a review of COBA7®s third WISH for 2015: professional property management & certification among all land-lease-lifestyle communities! Are YOU MHM® certified yet?

Next week. Reportedly ‘record attendance’ at MHCongress, but 1) program tainted by crass imitation; 2) a notable and telling oversight during annual awards presentation; and, 3) an off-agenda meeting that made manufactured housing industry history! And maybe ending with 4) the major announcement from COBA7® deferred in Las Vegas. Hint. ‘Official reporting of annual HUD-Code home shipments will never be the same again!’

You do not want to miss reading This & Next week’s blog postings at community-investor.com If you didn’t realize before, LLLCommunities, and by extension, the manufactured housing industry, are in the midst of a NEW ERA, you soon will! GFA

I.

So, We’re In a New Paradigm. What’s Next?

Last week, here at community-investor.com, we described the new manufactured housing paradigm unfolding since the turn of the 21st Century. One in which land-lease-lifestyle community owners/operators no longer rely on independent (street) MHRetailers to fill vacant rental homesites with new and resale homes. Rather, LLLCommunity owners/operators, now buy new Community Series Homes directly from HUD-Code home manufacturers, to be installed on-site, then sold to prospective homebuyer/site lessees at whatever profit margin works in the local housing market. And when need be, LLLCommunity owners/operators also engage in renting homes, and seller-financing, to effect transactions.

With that said, what’s holding the manufactured housing industry back from going ‘gang busters’ filling vacant rental homesites, even boosting annual home shipments up from the 55,145 six year (i.e. 2009-2014) ‘woeful running average’ towards the alleged ‘sweet spot’ of 250,000 new HUD-Code homes per year? In a word, EDUCATION.

This has to be one of the worst industries, and by extension, real estate asset classes, when it comes to educating itself on how to best do something, the right way, at the right time. And this matter is sorely complicated in at least two ways: internecine (‘mutually destructive’) behavior between national advocacy bodies representing the industry, and among business enterprises themselves!

I well remember the late 1980s, when some of us sensed a New Renascence in manufactured housing ‘was upon us’, culminating as it did, in 1998, with 372,843 new homes shipped! There wasn’t a single educational text around, to ‘splain’ how to develop new (then) mobile home parks cum manufactured home communities (by 1994), or even how to search an existing one out, value it to buy, and then turn around (investment wise) as a profitable business. Well, within a few years, J. Wiley & Sons, provided us with Development, Marketing & Operation of Manufactured Home Communities, and How to Find, Buy, Manage & Sell a Manufactured Home Community. With those in hand, as an industry/asset class, we were ‘off and running’ for awhile – until our chattel capital finance bubble burst soon after the turn of the century. And know, the preparation and distribution of these seminal texts received little to no interest or help from either of the national advocacy bodies at the time. Nada.

Well, we’re in the same unfortunate state of affairs today. There are at least two tomes begging to be authored and published – to EDUCATE, the sooner the better. And a third title that’d sure be nice to have around. In this order, they’re:

• How to Market & Sell New & Resale Manufactured Homes in-Community! I’d love to write this one myself, but I’m not a practitioner, so won’t be doing so, except as an editor. In my opinion, it needs to begin with ‘how to assess a local housing market’s acceptance of manufactured housing sales’, and what the affordable housing price points will be. Then, how to set up an on-site sales center, spec homes, order same, and begin the marketing, and the sales drill. There’s a key difference between ‘these sales’ and those by independent (street) MHRetailers: on-site we’re selling lifestyle and covet retention, so prequalification plays a major role in the selling process. This must not be a deal-to-deal, or ‘churning’ sales exercise, as was too oft the case within the previous paradigm! So, who’s going to author this text? It will not be an easy task, but certainly a rewarding one. This I know.

• How to Engage in Seller-finance of New & Resale Home Transactions in-Community! Early in 2010, I penned the industry’s first Manufactured Housing $$$ Primer. It sold out at that year’s MHCongress in Las Vegas – that’s how hungry folk were – and continues to be, for that sort of detailed, albeit changing housing finance information. But there hasn’t been anything akin published since, despite my encouragement to qualified practitioners and trainers. We sorely need an updatable reference describing the various ways to finance new and resale homes on-site in LLLCommunities, and how to be in compliance with various state and federal regulations. Also, how to raise capital for said transactions, and the basics of lease-option methodology. So, who’s going to author this text? Hint. Probably best if this is a team effort.

• Land-lease-lifestyle Community Valuation, with & without Property Owner-owned Homes. Believe it or not, the valuation chapter penned by Laurence Allen, MAI®, for inclusion in the aforementioned How to Find, Buy, Manage & Sell…book continues to this day, 20years later, to be the seminal work on this timely topic. But today, considering the new paradigm’s influence regarding ‘six types of shelter on-site, not just two’, and presence of property owner-owned homes as rentals, contract sales, and lease options, we’re in dire need of a contemporary reference of this sort. So, again, who’s going to author this text? I can think of at least three MAI®s who’re qualified to do so….

I’ve encouraged qualified and experienced individuals, with expertise and successful experience in all three areas, to step forward and ‘make their mark’, as David Alley, Edward Hicks, & I did with our raw land development classic 21 years ago. But so far, no takers. How ‘bout you? Seriously interested? If so, I’d like to hear from you. With everything else that’s going on with COBA7® these days, I’d still help get one or more of these needed books written, edited, published and distributed to the industry/asset class. And don’t forget, COBA7®, unlike any other national trade group, is closely affiliated with a commercial printer (i.e. Spotlight Strategies) and MHIndustry publisher (i.e. PMN Publishing). To talk about one or another of these heady projects, phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

II.

Room in the Park Model RV Discussion for Micro Units?

As you may recall, the park model RV confab (‘conversation’) of nearly a year ago, promises to heat up again in the not too distant future. First off, everyone – rightly or wrongly, agrees park model RVs are not designed or intended for permanent residency – even though hundreds, if not thousands, of them are already used as such in RV parks in Sunbelt regions. The present pressing issue is, however, whether or not to include the front porch overhang in the 400+/- square feet limit that differentiates between HUD-Code manufactured homes (i.e. more than 400 square feet in size) and recreational vehicles (i.e. less than 400 square feet in size). To do so cuts back on the living space ‘inside the walls’; to not do so, makes for a larger than usual park model RV.

Well, there’s yet another contemporary aspect of this discussion. It involves ‘dainty urban dwellings’, a.k.a. micro units, as apartments and condominiums. The Urban Land Institute recently published a 46-page report titled, ‘The Macro View on Micro Units’. The report draws on three information sources.

According to the report, a micro-unit is roughly 350 sq. ft. in size, “slightly larger than a one-car garage but considerably smaller than a two-car garage.” Some micro-units are as small as 220 sq. ft. (in San Francisco, CA. & Washington, DC), others as large as 400 sq. ft., (in New York City & Philadelphia, PA). In Seattle, WA. & Portland, OR., there are no square footage minimums. Apartments without bathrooms and kitchens are classified, in this report, as single-room occupancy (‘SRO’) units and not qualify as micro-units.

There’s a significant user difference preference relative to micro-units and park model RVs. According to the ULI report, micro-units target “predominantly young, professional singles, typically under 30 years of age, trending slightly more male than female.” Whereas, park model RVs, have become the abode of choice among retirees and senior citizens, often living alone (i.e. ‘granny flats’) in Sunbelt regions of the U.S. Interestingly, HUD itself has a trade term of long standing that includes both these very small shelter types: Accessory Dwelling Unit or ADU. And if that didn’t cloud the issue enough, here’re rebranding terms being bandied about relative to micro-units: launch pads, nano units, urban flats, innovation units, and even fun units.

And lest we forget to mention it, there’s another whole sidebar topic to this discussion, called Tiny Houses. More about these in a later blog posting, as HUD is also deciding whether this shelter type should also be brought in under, or excepted from the HUD-Code that regulates manufactured housing..

In any event, we’re likely in for some rough sledding during the months ahead, as HUD, the RV industry, even manufacturers in the HUD-Code housing business, and now NAHB homebuilders (re: Tiny Houses) strive to protect what they view as their proprietary and regulatory territories in whatever manner appears best to them. Let’s hope though, the housing wants and needs of consumers are included in these discussions.

The material describing ULI’s report was taken from ‘Small Small World’ in the March/April 2015 issue of Multihousing Professional magazine, pp. 36 & 37.

III.

Reviewing COBA7®s WISH LIST for Year 2015

Here we review the fourth of five WISHES identified early this year, as being goals for the Community Owners (7 Part) Business Alliance® during 2015. The WISH?

“Do whatever necessary and possible, to promote professional property management of on-site, regional, and executive managers, via training and certification of LLLCommunity owners/operators, as CPM®s, MHM®s, & ACM®s.”

Well, from my perspective, there’ve been three, and will soon be a fourth initiative in this direction. Three months ago, I taught the Manufactured Housing Manager® program at the Louisville MHShow. A few weeks ago, I taught the same one day MHM® course to a dozen on-site and regional property managers from two Midwest firms, along with two property owners.

And just this past week, handled a telephone inquiry from an ‘asset aggregator’ seeking professional third party property management services for the land-lease-lifestyle communities his firm recently acquired. That was easy. As you likely know, one can count on one hand the number of reputable, capable, experienced, motivated ‘fee management firms’ serving the realty asset class – and not one of them, that I know of, is an AMO® or Approved Management Organization® per the Institute of Real Estate Management. Sad but true. Of course, there’s also that understandable economic reason why there’s so few such firms throughout our realty asset class: most LLLCommunities are too small (i.e. too few rental homesites) to support third party fee management. And most large size communities (e.g. 200+/- rental homesites apiece) are in property portfolios managed centrally.

On 20 May 2015, I’ll again be teaching the one day MHM® class. This time we’ll convene at the Par-a-Dice Hotel Casino, in East Peoria, IL., the day before the Illinois Manufactured Housing Association has its’ annual business meeting. It’s still more than a month away, and already the class is half full (max of 20-25). If you’re interested in attending, register – for only $250.00/person – via (217) 528-3423. What a deal! For that low tuition fee, MHM® candidates receive a copy of Landlease Community Management, a monograph of contemporary manufactured housing readings, and gold MHM® lapel pin and sequentially numbered MHM® certificate.

To date, there’re barely more than 100 Certified Property Managers® active as LLLCommunity owners/operators; 200+/- Accredited Community Managers via the Manufactured Housing Educational Institutes; but nearly 1,000 Manufactured Housing Managers, under the auspices of the COBA7® division of GFA Management, Inc., dba PMN Publishing.

So, if not presently trained and certified as a professional property manager, give this upcoming opportunity serious consideration. It’s the only such MHEducation opportunity taught by a veteran LLLCommunity owner/operator, CPM®Emeritus, & MHM®Master. Register today!

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