Archive for February, 2011

No One Else Will Tell You Any of This….

Sunday, February 27th, 2011

No One Else Will Tell You Any of This….

To REIT or Not To REIT?

Your Response to ‘New Era – New Voice’ Announcement!

How Many MHs in LLCommunities Nationwide?

And, ‘What’d I tell you?’

I.

To REIT or Not to REIT?

For a privately held firm to launch an IPO (‘initial public offering’ of stock), and become publicly – owned, as a real estate investment trust (‘REIT’), is no small, hasty or inexpensive decision! But since rumors are afoot these days, to that end – amongst one or more landlease (nee manufactured home) community aficionados, let’s take a cursory look. But first, a cautionary word from ELS’ Sam Zell, quoted in the February 2011 edition of Multifamily Executive magazine (p.16):

“I think there have been a lot of attempts to create REITs. The problem is one of
scale. If anything, I think the Street has learned, since the dawning of the modern
REIT era, that liquidity equals value. I think some people will make some serious
consolidations.”

For historical perspective, within our unique real estate asset class, pick up your copy of the 22nd annual ALLEN REPORT and turn to page # 22, and peruse the ‘Rental Homesite Count Among LLCommunity REITs’. Look down to the bottom of the list to 1994 entries. At that time, when ELS, Inc (nee MHC, Inc.) was first listed as a REIT, the firm owned 28,407 rental homesites; long gone Chateau Communities, Inc., had 15,689 sites; and, Sun Communities, Inc., claimed the fewest at 13,500 sites. UMH Properties, then already a REIT, owned but 4,623 sites.

Now turn back to page # 19 to see which of this year’s ALLEN REPORT listees own close to, let’s say 13,000 rental homesites (Thinking of Sun’s 13,500 rental sites in 1994), in their LLCommunity portfolios.

• American Residential Communities, a.k.a. ARC*1 54,933
• Hometown America 52,567
• RHP Properties 19,825 + 3,143 fee
• Lautrec, Ltd. 22,063 + 668 fee
• YES! Communities*2 18,388 + 77 fee
• Parkbridge Lifestyle (Canada) 18,254
• American Land Lease (Green Courte Partners) 16,690 + *3
• Carefree Property Management 12,990 + 288 fee

*1 formerly Affordable Residential Communities, and a REIT @ 2004 & 2005
*2 comprised mostly of former CMH (Clayton) LLCommunities
*3 with late 2010 acquisition of six LLCommunities & 1,850 sites from Florida – based CRF Communities, constructively moves this firm up from #9 to #7 on 22nd AR.

So, does this mean one or more of these firms will become a REIT during 2011, or even 2012? No, not at all. Simply identifying firms maybe large enough to do so. For that matter, there’s at least one veteran firm on the above list who was around when two previous REIT waves occurred, but never made the switch from private to public ownership.

Don’t have, but would like a copy of the aforementioned 22nd annual ALLEN REPORT? There aren’t many left. Either pay the cover price of $450.00, OR, reduced amount of only $250.00, and receive the 50+ page annual report, AND a one year subscription (12 monthly issues) to the Allen Letter professional journal. Simply phone the MHIndustry HOTLINE @ (877) MFD-HSNG or 633-4764, or (317) 346-7156 & mention this special offer!

II.

‘COMING! A New Era & A New Voice for Manufactured Housing’

Last week’s blog post title spawned more than a dozen thoughtful, and often lengthy, written replies from blog ‘floggers’ (readers) representing virtually all segments of the HUD Code manufactured housing industry! No way can we fit all, or even a select few of them, into this week’s posting; so, will spread them out during the next several weeks, as we consolidate replies – pro & con – per topic foci. Keep those facts and opinions coming via Gfa7156@aol.com

Frankly; in nearly 30 years of writing ‘about, for, and to’ the manufactured housing industry and landlease community real estate asset class, this weekly blog posting routinely draws more reader response than any other media (e.g. magazines and newsletters) this blogger has experienced to date! It’s very encouraging to finally see and read one’s peers ‘speaking out’ about business matters that concern them, and about which they are encouraged (i.e. a New Era); as well as being generally supportive of bold, stimulating journalism, supplanting poorly penned, unedited articles, features, and columns in trade publications stagnant during the past couple decades (i.e. a New Voice)

III

How Many MHs in LLCommunities Nationwide?

This question is asked more frequently than you might realize; and second only, to ‘How many landlease (nee manufactured home) communities are there?’

Relative to the number of LLCommunities question, read present issue of MHI’s National Communities Council (‘NCC’) division’s quarterly Community Connections newsletter. The feature article ‘splains’ how we know there’re 50,000+/- such income – producing properties. If not a member of the NCC, phone (703) 558-0678 to request a copy. The upcoming issue of that seminal newsletter will contain a feature titled: ‘To Rent (Homes) or Not to Rent!’ and contains information available nowhere else! For a free reprint, of the ‘# of LLCommunities’ piece, phone the MHIndustry HOTLINE number cited earlier in this blog posting. A reprint of the ‘rent’ article available soon.

Back to estimating the number of homes (manufactured and otherwise) in approximately 50,000 LLCommunities; where 85 percent number fewer than 100 rental homesites apiece, and 15 percent more than 100 sites apiece.

50,000 X .85 = 42,500 X average of maybe 50 sites/per property = subtotal of 2,125,000 rental homesites.

50,000 X .15 = 7,500 X average of maybe 150 sites/per property = subtotal of 1,125,000 rental homesites.

2,125,000 plus 1,125,000 = 3,250,000 rental homesites X 89.2 percent average national physical occupancy among LLCommunities during 2010 = 2,899,000 occupied rental sites, rounded to 3 million.

How’s that square with your thinking? Differing opinions and methods of calculating welcome!

IV.

What’d I Tell You?

Here’s the opening sentence from last week’s blog posting at this website: “Yes, it snuck up on me too; the realization HUD Code manufactured housing has permanently changed during the past decade, to the extent of being market – stiffed; maybe forever, sans new sources of third party chattel (personal property) finance!”

And four days later, this unfortunate, but confirming observation, contained in a communiqué from the Manufactured Housing Association for Regulatory Reform (‘MHARR’):

“…the one HUD program that helps put lower and moderate income consumers (i.e. manufactured home buyers) into new homes they can actually afford – the FHA Title I manufactured housing program – is subject to unreasonable and unnecessary restrictions that effectively limit it to only one financing provider and a minimal number of loans (1,834 during fiscal year 2010).”

What to do about this serious matter? Besides joining forces, as direct, dues – paying of MHI and MHARR (manufacturers only), to seek legislative solutions at the federal level, LLCommunity owners/operators are truly ‘the only game in town’, by dint of their ability to self finance chattel mortgages, via ‘captive finance’ or ‘buy here – pay here’ methodologies, new and resale homes they market and sell on – site at their properties. If YOU’re late coming to this ‘dance’, and want to learn the ‘ins & outs’ of property owner self – finance, make it a point to be in Albany, New York, on 29 & 30 March, when the New York Housing Association hosts Super Symposium II. Frankly, it’s the best lineup of manufactured housing (finance) and landlease community presenters I’ve seen in years! For information, phone (518) 867-3242 or visit the website nyhousing.org Sincerely hope to see you there!

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

COMING! A New Era & A New Voice for Manufactured Housing

Tuesday, February 22nd, 2011

COMING! A New Era & A New Voice for Manufactured Housing

Little did we realize 2011 will usher out an old era and old way of apprising!

I.

Yes, it snuck up on me too; the realization HUD Code manufactured housing has permanently changed during the past decade, to the extent of being market – stiffed; maybe forever, sans new sources of third party chattel (personal property) finance! Meanwhile, the other half this ‘double dual industry’ (i.e. manufacturing/distribution & commercial property development/management), its’ complementary investment real estate asset class, a.k.a. landlease (nee manufactured home) communities, has ‘moved on’, leaving those housing manufacturers behind, who don’t understand they must build Community Series Homes (‘CSH’) to survive! All this however, is but half the story unfolding in 2011, leading to ‘The End of One Era, The Beginning of Another!’

Other half the change? Well, especially for landlease community owners/operators (‘LLCommunities’), there’s a sea change a – coming, regarding big versus small owner/operator advocacy; operating data collection, analysis & distribution; print & online communications; even peer networking & deal – making. How so? That’s what’ll be reintroduced, during months ahead, as the ‘new voice for manufactured housing’. It was birthed, more than a decade ago in a print trade publication, but has lain dormant, till the timing was, and now nearly is, right – to help rejuvenate a moribund manufactured housing industry, and simultaneously encourage and promote the growing LLCommunity renascence! As they say in radio talk, ‘Stay tuned here to learn more!’

II.

Sustainability? It’s difficult to pick up a housing or realty trade publication, even a metropolitan newspaper these days, and not find some direct or passing mention of ‘sustainability this’ or ‘sustainability that’. A recent posturing, by HUD Secretary Shaun Donovan to Kenneth Harney at the Urban Land Institute (‘ULI’), was expressed thusly: ‘Embrace Sustainability, If You Want Federal Money’, got me to thinking….

So, just what is sustainability, in the single and multifamily housing context? I asked the folk at ULI for a definition/description, and this is what I learned: NOTHING. My email requests, as a realty trade journalist (Even stated my National Association of Real Estate Editors credentials!), have gone unanswered for nearly a week. Go figure.
So, ‘What say YOU?’ As a raw land developer or LLCommunity owner/operator, do YOU have a dog in this hunt for increased market penetration, via sustainability, relative to manufactured housing and or our unique income – producing property type? Your peers would like to know and read your view(s), via this blog site, regarding what’s either a contemporary ‘cutting edge concept,’ or simply ‘another temporary whimsy’.

III.

In search of the True Lease! In early January 2011, along with 40+/- fellow members of the IMHA/RVIC (Indiana’s state MHAssociation), I attended an afternoon panel discussion ‘splaining’ that state’s interpretation/implementation, to date, of the federal S.A.F.E. Act (Safe And Fair Enforcement of Mortgage Licensure Laws). One panelist, an attorney, stated a ‘true lease’ does not come under the purview of said act. Unfortunately, at the time, neither a definition or description of True Lease was provided, in any fashion. Since then, repeated requests for clarification have gone pretty much unanswered.

So, the challenge to YOU, loyal blog flogger (reader), is to share your knowledge or opinion of what a True Lease is!

Meanwhile, here’s one opinion. Given a property – owned manufactured home on a rental homesite in a landlease (nee manufactured home) community, and assuming said home & site rental rates in sync with other rental housing alternatives in the same local housing market (How to calculate such rates is the subject of a future blog….), lease said home & homesite for one payment (or two separate payments) per month for an agreed upon term (e.g. one year, more or less). Personally, I prefer weekly collection of home rent in LLCommunity settings….

In any event, and only at the end of the lease term, offer lessee (tenant of the home) the opportunity to extend said lease(s) for another term; OR, at that time make an agreed upon lump sum payment to the home owner (i.e. property owner) in exchange for title to the home leased to date. Assume no effect on the ground lease. If there’s no prior mention or agreement between the parties as to this relationship being a ‘lease to own’ or ‘rent to own’ or ‘lease with option to purchase’ at the front end, or during the term of the lease, might this not be a True Lease? Once again; what say YOU?

Of course I realize this is a legal issue that indeed might vary from jurisdiction to jurisdiction. But at this point, we’re talking concept, and your input is sought.

IV.

Did YOU know?

• ‘Joe McAdams Steps Down as President of Equity LifeStyle’; so reads a headline in the February 2011 edition of Woodall’s Campground Management. The article goes on to say: “Thomas Heneghan, ELS CEO, re – assume(s) role of president of the company. Following executive officers now report to Heneghan: Michael Berman, executive VP & CFO; Ellen Kelleher, esquire, executive VP, property management; Roger Maynard, executive VP, asset management; Marguerite Nader, executive VP, new business development; and Seth Rosenberg, senior VP of sales and marketing.” Page # 5. Now you know who’s on first, second…

• 13th annual National Registry of Realty Lenders/Brokers Specializing in LLCommunity Acquisition & Refinance Mortgages. This highly popular registry is the third in a series of 12 Signature Series Resource Documents, researched and published by PMN Publishing. The initial copies of the 13th Registry will be distributed as a lagniappe in the March 2011 issue of the Allen Letter professional journal. Also, for the first time in 13 years, a list of chattel (personal property) lenders will be included for contact purposes! So, if not already an Allen Letter subscriber, either sign – up for $134.95/year (12 monthly issues) OR, pay $250.00 and receive said subscription PLUS a copy of the recently – released 22nd annual ALLEN REPORT (a.k.a. ‘Who’s Who Among LLCommunity Portfolio Owners/operators in North America!’)! NOTE: Less than 50 copies of the ALLEN REPORT remain. Once this stock is gone, there are no plans to reprint! Phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633.4764 to subscribe to the Allen Letter professional journal AND buy your copy of the ALLEN REPORT. Also phone (317) 346-7156.

***

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

Best Salmagundi of MHIndustry ‘Insider Information’ Ever!

Sunday, February 13th, 2011

Best Salmagundi* of MHIndustry ‘Insider Information’ You’ll Ever Read!

• Salmagundi is ‘a little of this, a little of that; a mixture of something, information’

S.A.F.E. Act ‘fear factor’; portfolio ‘player’ vs. small owner/operator; one liner responses – and more, to last week’s blog about MHAssociations; ‘Where’re Greg O’Berry, Bob Blatz & Greg Harmon? And, where will YOU be March 14 & 15, 22nd, 29 & 30, 2011?

I.

“Many (landlease, nee manufactured home, community) owners are misusing a limited amount of uncertainty in the S.A.F.E. Act final rules, as an excuse to ‘do nothing’ (to ensure their self – financed home loans are in compliance). Their ‘fear factor’ is high, and the tragedy is, there’s no reason for it, except among the smallest of operators.”

“The problem is, they (LLCommunity owners) ‘don’t know enough about what they don’t know’, and hence are so paralyzed, they don’t reach out to get the knowledge they need to make the ‘fear factor’ go away! There’s also fear, among some large portfolio folk, their corporate structure needs changing, meaning someone with the knowledge and experience to set up and run a successful finance arm, would become as important and valuable to the organization, as the traditional CEO and COO ‘golden boy’ positions. And the pay for these financial execs could also be a problem. In an organization doing 40 loans a month, the top finance job is going to be a six figure position.”

“All his doesn’t change the fact that every LLCommunity, capable of filling even a dozen rental homesites a year with self – finance homes, cannot afford not to be doing it the right way! This widespread ‘wait & see’ attitude is a spurious one indeed, simply masking a lack of will and foresight. There’ll always be changes in lending law, and it’s shortsighted not to expect change, and to plan accordingly.” Kenneth Rishel, writing in an email response to an earlier blog posting, by the author, relative to the S.A.F.E. Act. (Lightly edited. GFA)

II.

The following story was prompted by an earlier blog posting, cautioning LLCommunity owners/operators not to be too aggressive with rental homesite rent increases, as more and more properties have been going back to lenders, following large rent increases that have resulted in severely declining physical and economic occupancy.

“I can say first hand, a (LLCommunity) REIT is out of control on their rent increases and fees. I bought a home in a ________- owned property and left it there vs. moving it to my park, since it seemed like a good investment. WRONG. Not only did the market drop shortly after my purchase, but my lot rent shot up from $387 to $427 in three years!”

“What bothered me more, is the fact they charged a flat fee for (natural) gas and water, even when my home sat empty month after month. Their rules and regs state they ‘only charge for consumption’, yet they continued to charge these fees (approximately $37/month), which I continued to ignore. Eventually they evicted me for back lot rent. Frankly, the lot rent was current, but I was behind with the flat fees. Rather than lose the home, I chose to donate it to the St. Vincent de Paul Society. Even that was a struggle to get them to approve, even after I paid all their fees, just to keep the home there.”

Question to this writer: Did they know you were a fellow LLCommunity owner?

Answer: “Absolutely. They knew I was a LLCommunity owner, which was why they were anxious to get me to leave once I started asking too many questions.”

III

One liners, a.k.a. ‘zingers’, have long been the staple of stand up comedians. And the following one liners, emailed in response to last week’s posting title: ‘Why I Belong!, but am frustrated with most MHAssociations’, would be humorous if they weren’t so darn serious!

“You hit the nail very squarely, sir, on the associations.” N

“This won’t make you many friends in MHAssociation (mis) management circles. LOL.” H

“Concerning MHAssociations in your latest blog – it’s time someone threw the skunk out on the table and talked about this.” R

“George, all it takes is the whisper of RENT CONTROL in the (state) legislature, to activate interest in industry political action, which is the ground roots of association membership.” P

There was but one lengthy, thoughtful reply, penned by James Ayotte, a veteran association exec in OH, New England, with MHI/NCC for awhile, and now exec with the Florida Manufactured Housing Association.

“You raise several relevant points. It has become much more difficult to do the work of the association in face of falling revenues. We’ve all been forced to reduce expenses, eliminate non – core services, and focus our limited resources on what’s important – protecting and promoting the MHIndustry’s interests. These decisions have required leadership from staff and volunteer leaders.

“…our mission is clear – to increase the sales of manufactured housing and residency in landlease communities. This mission is evident in everything we do, from ongoing meetings with our customers (e.g. Federation of Manufactured Home Owners of Florida), to our government affairs and legal agenda to our consume education and marketing activities. FMHA’s job is to educate the public about the value and potential of manufactured housing and LLCommunity living, to ensure communities remain open and profitable, and consumers have the ability to buy a manufactured home and (buy/rent) homesites like any other type of single – family housing.

“We don’t lack vision (‘forward focus’) or leadership here in Florida, we lack the resources necessary to accomplish everything we want to do as quickly as we want to do them. These past few years have been sometimes difficult, sometimes gut – wrenching, but we have never lost sight of our mission!

“I am excited about the future of the manufactured housing industry in Florida, and the role we play to position the industry for growth. According to the AARP, 8,000 people a day are turning age 65, and there is a growing wave of first – time homebuyers. These population trends support expansion of the industry. How well we capitalize on these opportunities will depend on the effectiveness of FMHA and industry members marketing efforts and education.

Jim continues his reply for another three paragraphs, and ends thusly: “These are issues I think about everyday, and I’m sure my colleagues do the same. Together, we can meet the industry’s challenges head – on and prevail! Separately, we will languish and waste our time talking about what the industry could have been.” Previous paragraphs lightly edited. GFA

Know what? That was the sole response received from MHAssociation execs nationwide, even after making a special effort to send this blog posting their way! Know what I think? Board chairmen should consider placing last week and this week’s blog in front of their salaried association executive, and ask them to pen a response based on their state’s present day experience, as Jim has done here. Then, distribute copies to all the association’s board members, to stimulate discussion, and maybe stimulate some ‘forward focus’, as well as renewed member recruiting. It’s worth thinking about…

By the way, several blog ‘floggers’ (faithful readers) reminded me of other irksome practices and trends characteristic of some MHAssociations, over time:

• Faux takeover of a state association by one or another membership segment. On one hand, this is easy to observe in states where landlord tenant legislation is a near perennial bugaboo. Count the number of attorneys who pen articles in the MHAssociation’s newsletter; more tellingly, what percentage of articles are penned by legal counsel? 100% in some cases! And rent control doesn’t have to be present; as some attorneys wind up specializing in LLCommunity law and are better able to write than most. And of course, there’s the historic leaning of an association, towards manufacturing & retailing (of homes) vs. the real estate investment side of the house – resulting in ‘two associations’ in some states, e.g. WA, OR, CA, AZ, and others.

• Want to be a ‘player’ on the national scene, but maybe avoid paying dues to become a direct member of the national advocacy body? Position yourself to become a state MHAssociation’s Certified Representative to that national group. Frankly, it a responsible job when ‘done right’; meaning attending as many committee meetings as possible, then reporting proceedings back to one’s state association board. Too many times however, assignment as a Certified Representative is sought and treated as a ‘perc’ by past board chairmen, who may or may not fulfill either responsibility. What’s wrong with sending a young, aggressive, even new association member, to learn what’s going on at the national scene, perhaps developing a passion for our industry and or asset class? As is oft said, and this certainly needs to be heeded by the MHIndustry, ‘Our future is our youth!’

To end this review of association peccadilloes on a positive note, join me in welcoming Lisa Brechtel as the new MHI executive hired to lead the National Communities Council division of the institute!

IV.

OK, where’s Greg O’Berry (former president and COO of Hometown America); Bob Blatz (‘Mr. American Land Lease’); and, Greg Harmon, formerly a regional property manager with Green Courte Partners?

Well, Greg O’Berry resurfaced recently, at Onyx Real Estate, LLC., in Chicago, having just taken on an apartment consultancy project for the firm.

And Bob Blatz recently relocated, and went to work as an executive, with a self – storage firm headquartered in Valley Forge, PA.

Greg Harmon, MHM & BDM? He’s discovered, and now enjoys the ‘challenge and rewards’ of the entrepreneur life, as head of GHP, LLC, working throughout the Pacific Northwest.

Are there other former high profile execs you’ve lost track of but would like to know there whereabouts these days? Like Scott Jackson, Stephen Wheeler, Craig White, Nancy Huppert, Kathleen Lyden, Chrissy Jackson, and Gail Cardwell. Just let me know…

V.

Where will you be during the MHIndustry & LLCommunity asset class ‘triple play’ during March 2011?

14 & 15 March. Manufactured Housing Institute’s Spring (Winter?) meeting in Washington, DC. If you own/operate LLCommunities, you owe it to yourself to be present for the National Communities Council (‘NCC’) meeting on 14 March, from 2:30 – 4PM. For information, phone Thayer Long @ (703) 558-0678. I’ll be there for sure, after traveling via Cape May, New Jersey & the Lewes Ferry over to Delaware. Gotta have some of that fresh seafood cooked up by my brother!

22 March. The ‘Manufactured Housing Industry Innovation Summit’ in Portland, ME. Boy, this is one event I don’t want to miss, but probably will. Can’t be everywhere. But, if you live and work anywhere in New England, then you should phone Karen Brown – Mohr @ (207) 761-4221 for program details. Tell her ‘George sent me!’

29 & 30 March. Told you about this gem of a seminar program in last week’s blog posting. Nancy Geer has put together a ‘show stopper of an agenda’ for LLCommunity owners/operators! Call her @ (518) 867-3242 for details. Registrants are already signing – up from throughout the U.S. You don’t want to miss this unique opportunity to learn more about on – site, self – financing of new and resale homes, how to calculate ‘affordable’ & ‘risky’ price points on new and resale homes, within and outside LLCommunities, and much much more!

VI.

Are you a subscriber to the Allen Letter professional journal? If not, and you own one or more LLCommunities, you should be! It’s the ONLY trade publication in the U.S. & Canada that is focused on the information and networking needs of LLCommunity owner/operators. And, for a limited time, PMN Publishing is making the following ‘deal’ available to readers of this weekly blog:

For $250.00, subscribe to the Allen Letter professional journal, and, receive a copy of the recently released 50+ page, 22nd annual ALLEN REPORT. That’s right, a $334.95 savings! How so? The newsletter subscription is $134.95, and ALLEN REPORT retails for $450.00. YOU get both, for a limited period of time for only $250.00. Go figure! Better yet, pick up the phone and order today, via the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

***

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

Best Salmagundi* of MHIndustry ‘Insider Information’ You’ll Ever Read!

• Salmagundi is ‘a little of this, a little of that; a mixture of something, information’

S.A.F.E. Act ‘fear factor’; portfolio ‘player’ vs. small owner/operator; one liner responses – and more, to last week’s blog about MHAssociations; ‘Where’re Greg O’Berry, Bob Blatz & Greg Harmon? And, where will YOU be March 14 & 15, 22nd, 29 & 30, 2011?

I.

“Many (landlease, nee manufactured home, community) owners are misusing a limited amount of uncertainty in the S.A.F.E. Act final rules, as an excuse to ‘do nothing’ (to ensure their self – financed home loans are in compliance). Their ‘fear factor’ is high, and the tragedy is, there’s no reason for it, except among the smallest of operators.”

“The problem is, they (LLCommunity owners) ‘don’t know enough about what they don’t know’, and hence are so paralyzed, they don’t reach out to get the knowledge they need to make the ‘fear factor’ go away! There’s also fear, among some large portfolio folk, their corporate structure needs changing, meaning someone with the knowledge and experience to set up and run a successful finance arm, would become as important and valuable to the organization, as the traditional CEO and COO ‘golden boy’ positions. And the pay for these financial execs could also be a problem. In an organization doing 40 loans a month, the top finance job is going to be a six figure position.”

“All his doesn’t change the fact that every LLCommunity, capable of filling even a dozen rental homesites a year with self – finance homes, cannot afford not to be doing it the right way! This widespread ‘wait & see’ attitude is a spurious one indeed, simply masking a lack of will and foresight. There’ll always be changes in lending law, and it’s shortsighted not to expect change, and to plan accordingly.” Kenneth Rishel, writing in an email response to an earlier blog posting, by the author, relative to the S.A.F.E. Act. (Lightly edited. GFA)

II.

The following story was prompted by an earlier blog posting, cautioning LLCommunity owners/operators not to be too aggressive with rental homesite rent increases, as more and more properties have been going back to lenders, following large rent increases that have resulted in severely declining physical and economic occupancy.

“I can say first hand, a (LLCommunity) REIT is out of control on their rent increases and fees. I bought a home in a ________- owned property and left it there vs. moving it to my park, since it seemed like a good investment. WRONG. Not only did the market drop shortly after my purchase, but my lot rent shot up from $387 to $427 in three years!”

“What bothered me more, is the fact they charged a flat fee for (natural) gas and water, even when my home sat empty month after month. Their rules and regs state they ‘only charge for consumption’, yet they continued to charge these fees (approximately $37/month), which I continued to ignore. Eventually they evicted me for back lot rent. Frankly, the lot rent was current, but I was behind with the flat fees. Rather than lose the home, I chose to donate it to the St. Vincent de Paul Society. Even that was a struggle to get them to approve, even after I paid all their fees, just to keep the home there.”

Question to this writer: Did they know you were a fellow LLCommunity owner?

Answer: “Absolutely. They knew I was a LLCommunity owner, which was why they were anxious to get me to leave once I started asking too many questions.”

III

One liners, a.k.a. ‘zingers’, have long been the staple of stand up comedians. And the following one liners, emailed in response to last week’s posting title: ‘Why I Belong!, but am frustrated with most MHAssociations’, would be humorous if they weren’t so darn serious!

“You hit the nail very squarely, sir, on the associations.” N

“This won’t make you many friends in MHAssociation (mis) management circles. LOL.” H

“Concerning MHAssociations in your latest blog – it’s time someone threw the skunk out on the table and talked about this.” R

“George, all it takes is the whisper of RENT CONTROL in the (state) legislature, to activate interest in industry political action, which is the ground roots of association membership.” P

There was but one lengthy, thoughtful reply, penned by James Ayotte, a veteran association exec in OH, New England, with MHI/NCC for awhile, and now exec with the Florida Manufactured Housing Association.

“You raise several relevant points. It has become much more difficult to do the work of the association in face of falling revenues. We’ve all been forced to reduce expenses, eliminate non – core services, and focus our limited resources on what’s important – protecting and promoting the MHIndustry’s interests. These decisions have required leadership from staff and volunteer leaders.

“…our mission is clear – to increase the sales of manufactured housing and residency in landlease communities. This mission is evident in everything we do, from ongoing meetings with our customers (e.g. Federation of Manufactured Home Owners of Florida), to our government affairs and legal agenda to our consume education and marketing activities. FMHA’s job is to educate the public about the value and potential of manufactured housing and LLCommunity living, to ensure communities remain open and profitable, and consumers have the ability to buy a manufactured home and (buy/rent) homesites like any other type of single – family housing.

“We don’t lack vision (‘forward focus’) or leadership here in Florida, we lack the resources necessary to accomplish everything we want to do as quickly as we want to do them. These past few years have been sometimes difficult, sometimes gut – wrenching, but we have never lost sight of our mission!

“I am excited about the future of the manufactured housing industry in Florida, and the role we play to position the industry for growth. According to the AARP, 8,000 people a day are turning age 65, and there is a growing wave of first – time homebuyers. These population trends support expansion of the industry. How well we capitalize on these opportunities will depend on the effectiveness of FMHA and industry members marketing efforts and education.

Jim continues his reply for another three paragraphs, and ends thusly: “These are issues I think about everyday, and I’m sure my colleagues do the same. Together, we can meet the industry’s challenges head – on and prevail! Separately, we will languish and waste our time talking about what the industry could have been.” Previous paragraphs lightly edited. GFA

Know what? That was the sole response received from MHAssociation execs nationwide, even after making a special effort to send this blog posting their way! Know what I think? Board chairmen should consider placing last week and this week’s blog in front of their salaried association executive, and ask them to pen a response based on their state’s present day experience, as Jim has done here. Then, distribute copies to all the association’s board members, to stimulate discussion, and maybe stimulate some ‘forward focus’, as well as renewed member recruiting. It’s worth thinking about…

By the way, several blog ‘floggers’ (faithful readers) reminded me of other irksome practices and trends characteristic of some MHAssociations, over time:

• Faux takeover of a state association by one or another membership segment. On one hand, this is easy to observe in states where landlord tenant legislation is a near perennial bugaboo. Count the number of attorneys who pen articles in the MHAssociation’s newsletter; more tellingly, what percentage of articles are penned by legal counsel? 100% in some cases! And rent control doesn’t have to be present; as some attorneys wind up specializing in LLCommunity law and are better able to write than most. And of course, there’s the historic leaning of an association, towards manufacturing & retailing (of homes) vs. the real estate investment side of the house – resulting in ‘two associations’ in some states, e.g. WA, OR, CA, AZ, and others.

• Want to be a ‘player’ on the national scene, but maybe avoid paying dues to become a direct member of the national advocacy body? Position yourself to become a state MHAssociation’s Certified Representative to that national group. Frankly, it a responsible job when ‘done right’; meaning attending as many committee meetings as possible, then reporting proceedings back to one’s state association board. Too many times however, assignment as a Certified Representative is sought and treated as a ‘perc’ by past board chairmen, who may or may not fulfill either responsibility. What’s wrong with sending a young, aggressive, even new association member, to learn what’s going on at the national scene, perhaps developing a passion for our industry and or asset class? As is oft said, and this certainly needs to be heeded by the MHIndustry, ‘Our future is our youth!’

To end this review of association peccadilloes on a positive note, join me in welcoming Lisa Brechtel as the new MHI executive hired to lead the National Communities Council division of the institute!

IV.

OK, where’s Greg O’Berry (former president and COO of Hometown America); Bob Blatz (‘Mr. American Land Lease’); and, Greg Harmon, formerly a regional property manager with Green Courte Partners?

Well, Greg O’Berry resurfaced recently, at Onyx Real Estate, LLC., in Chicago, having just taken on an apartment consultancy project for the firm.

And Bob Blatz recently relocated, and went to work as an executive, with a self – storage firm headquartered in Valley Forge, PA.

Greg Harmon, MHM & BDM? He’s discovered, and now enjoys the ‘challenge and rewards’ of the entrepreneur life, as head of GHP, LLC, working throughout the Pacific Northwest.

Are there other former high profile execs you’ve lost track of but would like to know there whereabouts these days? Like Scott Jackson, Stephen Wheeler, Craig White, Nancy Huppert, Kathleen Lyden, Chrissy Jackson, and Gail Cardwell. Just let me know…

V.

Where will you be during the MHIndustry & LLCommunity asset class ‘triple play’ during March 2011?

14 & 15 March. Manufactured Housing Institute’s Spring (Winter?) meeting in Washington, DC. If you own/operate LLCommunities, you owe it to yourself to be present for the National Communities Council (‘NCC’) meeting on 14 March, from 2:30 – 4PM. For information, phone Thayer Long @ (703) 558-0678. I’ll be there for sure, after traveling via Cape May, New Jersey & the Lewes Ferry over to Delaware. Gotta have some of that fresh seafood cooked up by my brother!

22 March. The ‘Manufactured Housing Industry Innovation Summit’ in Portland, ME. Boy, this is one event I don’t want to miss, but probably will. Can’t be everywhere. But, if you live and work anywhere in New England, then you should phone Karen Brown – Mohr @ (207) 761-4221 for program details. Tell her ‘George sent me!’

29 & 30 March. Told you about this gem of a seminar program in last week’s blog posting. Nancy Geer has put together a ‘show stopper of an agenda’ for LLCommunity owners/operators! Call her @ (518) 867-3242 for details. Registrants are already signing – up from throughout the U.S. You don’t want to miss this unique opportunity to learn more about on – site, self – financing of new and resale homes, how to calculate ‘affordable’ & ‘risky’ price points on new and resale homes, within and outside LLCommunities, and much much more!

VI.

Are you a subscriber to the Allen Letter professional journal? If not, and you own one or more LLCommunities, you should be! It’s the ONLY trade publication in the U.S. & Canada that is focused on the information and networking needs of LLCommunity owner/operators. And, for a limited time, PMN Publishing is making the following ‘deal’ available to readers of this weekly blog:

For $250.00, subscribe to the Allen Letter professional journal, and, receive a copy of the recently released 50+ page, 22nd annual ALLEN REPORT. That’s right, a $334.95 savings! How so? The newsletter subscription is $134.95, and ALLEN REPORT retails for $450.00. YOU get both, for a limited period of time for only $250.00. Go figure! Better yet, pick up the phone and order today, via the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

***

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

What MHAssociations LACK, & Time for YOU to Decide!

Sunday, February 6th, 2011

‘Why I Belong’, but am frustrated with most MHAssociations!

&

Own/operate LLCommunities? Time to Decide What You Need!

2011 promises to be a year of survival for some & end of the road for others.
Know this; your fate is in, good but not complete measure, your hands – so make the very most of every opportunity and challenge that comes you way!

I.

A Decade ago I penned an article titled ‘Why I belong!’, for a now defunct MHIndustry print trade publication. It was reprinted many times over, and frequently distributed by state manufactured housing trade associations (‘MHAssociations) as an aid to help recruit new dues – paying members! It’s still inventoried at PMN Publishing, but is rarely requested these days, underscoring the tripartite theme of the following paragraphs.

Our firm is a 20+ year member of two Midwest MHAssociations, and a direct, dues – paying charter member of the Manufactured Housing Institute’s (‘MHI’) National Communities Council (‘NCC’) division. Until recently, we were a full (charter) member of the Urban Land Institute’s (‘ULI’) Manufactured Housing Communities Council (‘MHCC’) – but that’s another story for another time. The Point? As a former elected board member of those Midwest MHAssociations, and present board member of the NCC, I’ve observed ‘the workings’ of these bodies, up close and repeatedly over the years, and believe They Are All Lacking At This Time!

Yes, ‘lacking dues revenue’ for sure, but also ‘lacking forward focus’ and ‘lacking leadership’. Let’s take these three shortfalls, in need of obviation, one at a time.

Lack of forward focus. I’ll be the first to admit, ‘Generalizations are as generally wrong as they are generally right’. But with that said, ask yourself: ‘How many of the state or provincial MHAssociations, or even just the one association – you or your firm belong to, is/are indeed focused – let’s say, on planning and effecting aggressive, positive measures ensuring ongoing survival as a viable trade association and advocacy body? Are you satisfied with the answer? If not, maybe YOU need to get involved and become part of a focused solution, rather than continue as part of the ongoing problem(s). With that said,

Lack of dues revenue. Admittedly, there’re far fewer HUD Code home manufacturers and MHRetailers to solicit as dues – paying members of state and provincial MHAssociations. But guess what? There’re just as many, if not a few more, landlease (nee manufactured home) communities TODAY than there were a DECADE AGO! And yes, consolidation of this type income – producing property type, into one or another of 500+/- LLCommunity portfolios (averaging 22 properties apiece, per the 22nd annual ALLEN REPORT) existent across the U.S. and Canada, has cannibalized this membership category in almost every state and province. BUT, what has your MHAssociation done to 1) aggressively recruit these portfolio owners/operators as dues – paying members, and 2) go ‘on the road’ to visit and recruit heretofore ignored sole proprietor (i.e. Mom & Pop) owners/operators? My guess is, little to no effort whatsoever. How do I know? A year ago, I volunteered to 1) ID all portfolio owners/operators active in a particular state, 2) form a small team of LLCommunity owner/operator members of said association, to 3) visit each of the portfolio ‘player’ headquarters, to recruit (‘pressure’) them, one – on – one to ‘join’! My offer was ignored, and the association continues to lose members and dues in this minimally tapped category. To this end, it’s my contention, every association executive, in the company of at least one board member, should spend one day each week ‘on the road’ aggressively recruiting the small – to – midsized LLCommunity owners/operators, as well as suppliers, service firms, lenders, and the like.

Lest you think our national trade and advocacy bodies are immune from constructive criticism in this ‘lack of dues revenue’ effort, you’re wrong. Similar trends and circumstances apply on the national level as on the state level. But when a suggestion was made recently, that the new NCC executive, as part of their compensation package, be formally challenged to match their salary with ‘new dues revenue’ within 12 months after being hired, the incentivization idea was dismissed as being inappropriate for association executives. Really? Why? Furthermore; I don’t know ‘bout you, but I tire of hearing one national advocacy body constantly cry ‘poor boy’, as they continue to restrict membership to just HUD Code manufacturers.

Lack of leadership. This category riles me above the other two. Perhaps there’re a few MHAssociations, somewhere in the U.S. and Canada, with strict and enforced term limits for elected board members. If so, they’re few and far between. Sure, respond to this blog and let me know! No response? Then I’ll assume, sad to say, I’ve got it right.

For the moment however, assume most elected boards have done a credible job recruiting, hiring and compensating their present MHAssociation exec, the preceding lack of focus and lack of dues revenue comments notwithstanding – since both are functions of board member ‘direction’, and dare I say it, ‘leadership’. Moving right along; few things are more frustrating to business stakeholder members, than to see MHAssociation board seats perennially occupied by protective ‘friends’ of the association exec (Beware the Golden Parachute when an exec leaves, for cause or otherwise…We’ve seen that travesty firsthand.); individuals (usually salaried employees) who consider board meetings personal ‘percs’ away from their day job; and, some old ‘warhorses’ who’ve convinced everyone the association will wither and die without their hallowed presence, year after year after year. And I simply don’t buy the excuse, ‘No one else will step forward and serve.’ That’s just an excuse for not really trying to recruit, and symptomatic of the very environment just described.

The remedy? A healthy mix of ‘fresh blood’ coming onto MHAssociation boards every year, along side capable, experienced, motivated board members who, hopefully, are businessmen and women with bona fide ‘skin in the game’ of manufactured housing and LLCommunity ownership/operations. And be careful about how many years an exec is permitted to stay in place. Is their present salary now double what it’d cost the association to hire a new and anxious – to – please and learn executive? I know one New England association that was on its’ deathbed a couple years ago, but is now growing by leaps and bounds, thanks to a new, ‘willing to travel and recruit new members’ executive. When was the last time your state’s exec was out ‘on the road’ doing likewise? Ask.

Think I exaggerate? Not at all. Ending this first blog segment with two recent accounts; the first a response to an earlier post on this blog site; the second, published last month in the Chattel Finance Newsletter:

“I find is exacerbating the very organizations (i.e. ‘trade associations’) we tout as our representatives – state or national – do NOTHING to change our desperate straights. They are like five fingers moving without concert, to try and make a fist. We have no chance of surviving as an industry, without us getting together!” N

“I don’t belong and likely never will. From what I have seen, over the years, most seem to be a big ego trip for the board members and a big paycheck for the guys who run them. Once in a while, they get worried about some new law somebody wants, because of what one of the members did to somebody else; but other than that, they mostly meet and talk. In my state, there has only been one guy running the association that didn’t think he was smarter and better than all the park owners. I don’t know much about the national association, but all they seem to do is to meet in expensive places, to have a party, and pretend they are actually doing something worth doing.” Anonymous

II.

The time has come for YOU to Decide What You Need. Talking mostly to landlease (nee manufactured home) community owners/operators here, portfolio folk and otherwise. No big introduction, since most reading this weekly blog, are aware of the Request for Proposals we published in the November 2010 issue of the Allen Letter professional journal, to acquire work products long associated with GFA Management, Inc., dba PMN Publishing. To date, there’s one formal Offer to Purchase in place; and, face – to – face negotiations with one party begin this week; and with another, the following week. All that’s being asked here, is for YOU to read down through the list of 28 work products; then ask yourself – ‘Which items – if any, are helpful, even critical, resources relative to my ownership and operation of one or more LLCommunities?’ At the end of this blog segment, I’ll suggest what you can do to (maybe) ensure continuation of the resources you need…

Annual ALLEN REPORT or ‘AR’, a.k.a. ‘Who’s Who Among Portfolio Owners/operators of Landlease Communities Throughout North America!’ The 50+ page, 22nd annual AR released in early January 2011. Asset class’ statistical compendium

Exclusive & CONFIDENTIAL, 25 year computerized data base, comprised of names & addresses of 500+/- LLCommunity portfolio owners/operators in U.S. & Canada. Regular direct mail access by those acquiring/marketing such properties; new products/services

The Allen Letter professional journal; a 21 year, monthly print, subscriber – supported periodical penned for the LLCommunity owner/operator audience! Vehicle for a dozen Signature Series Resource Documents (‘SSRD’), identified later in this work product list.

International Networking Roundtable or ‘INR’. The 20th INR is scheduled for 14 – 16 September 2011. It’s the LLCommunity asset class’ premier educational, interpersonal networking, and deal – making event. Platform for most initiatives during past 20 years!

the Allen CONFIDENTIAL! business newsletter. Subscriber – supported, monthly print publication communicating sensitive, strategic, advance information to MHIndustry & LLCommunity executives alike, 30 – 60 days before be published elsewhere, if then!

Manufactured Housing Manager or ‘MHM’ professional property management training and certification program for on – site, regional & executive property managers, and owners of LLCommunities. Nearly 1,000 MHMs to date! Classroom or correspondence.

community-investor.com website…’How you got here today!’ Superb online resource for books, reprints, PM forms, educational programs, newsletters & more (e.g. Mystery Shopping & MAP planning/execution). Also site of industry& asset class’ weekly blog

Weekly blog posting! The primary B2B (business – to – business) MHIndustry & LLCommunity online news and op/ed source for hundreds of corporate executives and LLCommunity owners/operators, responsible for profitability of business enterprises.

FOCUS Group meetings of LLCommunity owners/operators are convened as interest and needs require. Confidential small group interaction opportunities oft hosted on – site in LLCommunities. GFA/PMN compensated as meeting planner, facilitator and reporter.

National State of the Asset Class (‘NSAC’) caucuses for MHIndustry executives and LLCommunity owners/operators. Two to date: 2/27/08 identified Five Action Areas of LLCommunity concern; 2/27/09, dialogue per new home design for on – site marketing

Periodic ALLEN SURVEYS (VI to date); prepared with assistance from Laurence Allen, MAI. Researched & published results regarding LLCommunity Operating Expense Ratios (‘OER’s), & income capitalization rates (‘cap rates’) per ABClassification System

Stock Inventory of at least 26 copyrighted standard forms tailored to the LLCommunity asset class, e.g. Market Survey, Standard Shopping Report, Income & Expense Cash Flow Analysis Worksheet, ‘Ah Ha! & Uh Oh!’ housing price point worksheet, and more!

MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Primary point of initial inquiry for matters pertaining to LLCommunity operations nationwide, including Canada! E.g. access to HUD Code Business Development Managers & Community Series Homes…

Stock inventory of books includes: Development, Marketing & Operation of Manufactured Home Communities; How to Find, Buy, Manage & Sell a Manufactured Home Community; Landlease Community Management, Manufactured Housing $ Primer

Stock inventory of reprints, both hard copy and PDFs, via community-investor.com. Dozens of copyrighted articles cover virtually every aspect of manufactured housing, and LLCommunity ownership and property management. More than 50 titles.

Chronological History of the LLCommunity Real Estate Asset Class, dating back to the 1980s. Includes accounts of many of the resources on this list. ‘History’ is updated upon revision and publication of each edition of Landlease Community Management.

Library of manufactured housing and LLCommunity asset class related texts, notebooks, binders, etc. Acquisition interest expressed by RV/MH Heritage Foundation’s library, and U.S. Library of Congress. The ‘best location’ for this body of knowledge & history?

SSRD: annual ‘Official State of the MHIndustry & LLCommunity Asset Class’, published in February, includes a comprehensive list of owners/operators’ issues identified during ALLEN REPORT research previous Fall. Only ‘combined’ summary!

SSRD: annual ;National Registry of Real Estate Lenders & Brokers’ specializing in LLCommunity acquisition and refinance real estate – secured mortgages. Narrative identifies prevailing trends, plus list of at least a dozen lenders/brokers with contacts.

SSRD: annual ‘Who Ya Gonna Call in 2011?’ comprehensive list of MHIndustry & LLCommunity freelance consultants. 12th edition to be published in April 2011. Only such ‘specialty skill’ list available anywhere throughout the MHIndustry.

SSRD: annual ‘Directory of MHIndustry & LLCommunity Print & Online Trade Media Resources’. Given the greatly reduced number of print and online trade publications serving the MHIndustry, this is a key working resource facilitating press releases, etc..

SSRD: annual ‘Official Lexicon or Glossary of MHIndustry & LLCommunity Terminology’. Years in the making, this landmark research and resource first published in the Manufactured Housing $ Primer and the 22nd annual ALLEN REPORT.

SSRD: annual ‘Professional Property Management Training & Certification Program Survey’ describes and codifies professional property management in the LLCommunity real estate asset class by dint of the CPM®, ACM® & MHM certification programs.

SSRD: annual, repeatedly updated, ‘Industry Briefing Sheet’. This four page document summarizes HUD Code MHIndustry & LLCommunity benchmark statistics, lists key advocacy and media contacts, including Canadian CSA Z240 & CSA A277-90 info.

SSRD: annual ‘Trade Body Advocacy Directory’ features background and contact information re: MHI/NCC, ULI/MHCC, MHARR, IREM, FBOA, NSAC caucuses, etc..

SSRD: annual ‘Summary of International Networking Roundtable’ proceedings serves as an historical record of this annual event, featuring contact information on all presenters!

SSRD: annual updates to the ‘MHIndustry Paradigm Shifts Timeline’, preserves the essence of HUD Code manufactured housing history & the LLCommunity asset class!

SSRD: annual ‘National State of the Asset Class caucus progress report’ preserves accomplishments of the first two NSAC caucuses, and measures progress relative to the Five Action Areas, Business Development Managers, & Community Series Homes.

So, there you have it, 28 proprietary resources presently in place, and in service to the MHIndustry and LLCommunity asset class! How many, if any, of these specialized resources are important to YOU, and the success with which you manage your business interests? If you’re a direct, dues paying member of any of the national trade and advocacy bodies, you already know ‘who to contact’ relative to your desire to see some or all these work products continue intact – or not. If not presently within that Inner Circle, but wish to make your views and needs better known, contact me via the aforementioned MHIndustry HOTLINE or (317) 346-7156 or email: gfa7156@aol.com

Bottom line? Ideally, ‘all the above’ will wind up being administered and continued by one, two, maybe three, national not for profit trade and or academic bodies, maybe even a ‘for profit’ entity, all committed to HUD Code manufactured housing and the landlease community real estate asst class. Or maybe not. Frankly, much of the future of our unique, income – producing property type and asset class, more so than ever before, is in your hands. If these 28 resources continue, it’ll be in large part, due to your support; if not, well, it’s been an interesting, challenging, rewarding, thirty years of service….

***

George Allen, Realtor®, CPM®Emeritus, MHM Box # 47024
Consultant to the Factory – built Housing Industry & Indpls, IN. 46247