Archive for August, 2013

NEW Opportunity, NEW Paradigm, New Private Equity Fund! & ?

Sunday, August 25th, 2013

Blog # 260 Copyright 2013 25 August 2013

Perspective. ‘Land lease lifestyle communities, a.k.a. manufactured home communities, & earlier, ‘mobile home parks’, are the real estate component of manufactured housing.’

Purpose of this blog. ‘To be a national Advocacy voice, statistical Research reporter, & communications Resource for LLLCommunities, of all sizes, throughout North America!

Opportunity to respond. ‘Critiques, reactions, & suggestions for future blog coverage: gfa7156@aol.com or Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.’

I.

$$$ EXPECTATION DISCONNECT OF THE YEAR =
a MANUFACTURED HOUSING OPPORTUNITY!

II.

Where Others Fear to Tread…

‘The Question’ & Manufactured Housing’s Past, Present, Future Paradigms.

III.

BERKSHIRE HATHAWAY Home Services Revisited!

IV.

FLASH NEWS
Would YOU Like to Increase Your Cash Flow?

V.

Getting Ready for MHI’s annual meeting
& the NCC division Meeting, 1 October…

I.

$$$ EXPECTATION DISCONNECT OF THE YEAR =
A MANUFACTURED HOUSING OPPORTUNITY!

MONEY magazine recently polled subscribers, and asked this question:

‘What’s Most Important To You When Deciding On a Great Place to Live?’

35% responded, AFFORDABLE HOUSING; followed by 30% wanting top – ranked schools; 21% desiring lots of stuff to do; and, 14%, simply, good, high – paying jobs. (September 2013)

Well, here’s the Disconnect, cited by MONEY, and other news media stories of late:

$214,200 is typical price for a four – bedroom home in the U.S. these days! Nothing ‘generally affordable’ about that unless one is making more than $75,000.00 per year.

What an Opportunity for HUD – Code manufactured housing, and its’ real estate component, land lease lifestyle communities, IF we could get our (National Brand Marketing ) act together NOW or in the near future, introducing the American home – buying public to truly affordable housing & professionally – managed community living!.

Recalling last week’s blog (#259) posting at this website: community-investor.com…

‘Hey, Clayton Homes, Inc., the Manufactured Housing Institute, and Berkshire Hathaway Home Services, are YOU interested in accessing this ‘once in several decades manufactured housing opportunity, just waiting to happen or not? or !

***

II.

Where Others Fear to Tread….

‘The Question’, & Manufactured Housing’s Past, Present & Future Paradigm Answers….

The Question: ‘How Will Land Lease Lifestyle Community Owners/operators Participate Effectively in the Present Paradigm Shift Occurring Throughout the Manufactured Housing Industry?’

This question was posed recently by a housing design consultant, known and respected nationally, for his expertise in breathing new life into old, often functionally obsolete LLLCommunities on the West coast. How would YOU answer the question?

Well, first off, ‘Just what paradigm change is being referenced by the question?

To answer, we must take a look back at 50 years of manufactured housing industry history. While opinions will vary, most MHIndustry veterans would likely agree there’ve been at least two major paradigm shifts to date, and we’re now in the midst of an emerging third. Here’s how they pencil out:

1970s; the Early Heydays. That was when 80+% of new ‘mobile home’ shipments were 80+% ‘singlewides’ destined for placement in new ‘mobile home parks’ being developed from coast to coast, with 20+/-% ‘doublewides’ headed elsewhere and on – site. This first paradigm shift started prior to implementation of the HUD – Code, legislated in 1974 and enforced in 1976. Then followed a 20 year hiatus, where the (now) manufactured housing industry, essentially and effectively, ‘made lemonade (i.e. via performance – based, federally preemptive building code) out of the federal regulatory lemon’ forced upon it.

1990s; the Big Box = Big Bucks days. That was when 80+/-% of new manufactured home shipments were 80+/-% high – priced multisection homes intended for installation on ‘scattered building sites conveyed fee simple’, with 20%+/- singlesection homes placed on rental homesites in nearly full (now) land lease lifestyle communities (a.k.a. manufactured home communities) from coast to coast. This second paradigm shifted during the turn of the century, as a consequence of 1) widespread chattel capital abuse; 2) widespread portfolio consolidation of properties – oft accompanied by too soon, too high site rent increases; and in some regions, 3) tract developers siphoning away the front half of the industry’s traditional market, the ‘newly wed & nearly dead’. Said shift escalated, as independent (street) MHRetailers failed in their bid to compete, as general contractors effecting ‘land & home packages’, against site – built housing stick builders; with some MHRetailers acquired by HUD Code manufacturers and converted into ‘company stores’. And then, factories closed by the dozens. This second paradigm shift has pretty much run its’ course, and we’re now headed into a third one….

2010 and beyond. The new, oft less expensive, single and multisection home mix, trends toward more of the former going onto some of the estimated 250,000+/- vacant rental homesites scattered among 50,000+/- LLLCommunities nationwide. This emerging and different paradigm is characterized dissimilarly from the previous two, in significant fashion.

Today, LLLCommunity portfolio owners/operators, near routinely buy single, even multiple quantities of new HUD – Code homes (When they can’t find good quality resale or ‘repo’ homes to relocate), including specially – designed, smaller Community Series Homes, a.k.a. CSH Models, featuring durability – enhancing features like asphalt shingles, wood cabinetry, non – plastic sinks & tubs, and more. These new homes are utilized either as rental units or sold ‘on contract’, for little or the usual profit margin. More on this in the following paragraph. At this point in time, however, few single property owners actively participate in the purchase and resale of new HUD Code homes on – site, unless they’ve paid down their realty mortgages and have excess cash to invest in this do – it – yourself infill process.

Why and furthermore? Given the steep attrition among independent (street) MHRetailers nationwide (According to MHI, from 1100 down to 400+/- after turn of the century), including company stores, LLLCommunity owners are forced to effect their own infill, to the point of engaging in various forms of self – finance, ‘captive finance’, and manufacturer – partnered finance programs, to consummate on – site, new home sales and resale transactions. And where are the independent, third party chattel capital sources these days? While the heretofore ‘Big Four + 1’ chattel lenders, with the debut of Green Hill Financial, has become the ‘Big Five + 1’, chattel capital remains inaccessible, due to stiff underwriting standards, to the majority of would – be homebuyers desiring to live in LLLCommunities.*1

So, what else characterizes this post 2010, emerging manufactured housing and LLLCommunity paradigm? Besides buying new homes (‘Who’d have thunk it?’, 30 – 40 years ago, when ‘street dealers’ were omnipresent and king?) and self – financing them, there’re additional necessities of 1) ‘making do with what you’ve got’, and 2) ‘installing whatever type housing, permanent and temporary, that can be legally and practically installed on vacant rental homesites’. In the first instance, owner/operators now closely evaluate whether to have vacant (abandoned) homes removed from their property or rehabilitate them, versus incurring the purchase and carrying costs of acquiring, including transportation, newer model homes. In the second instance, the presence of ‘other types housing’ on – site, has become so prevalent across the country, that the 1980s & 90s term of choice, ‘manufactured home community’ is being supplanted with the more accurate, image – enhancing, descriptive handle, ‘land lease lifestyle community’, or in its’ abbreviated form, LLLCommunity.*2

There’s a corollary to this ‘post 2010 paradigm shift’, and it involves taking LLLCommunity – sited homes, new and old, to an enhanced level of energy efficiency, even to the point of removing them entirely, at times, from the local power grid, even most water usage! Think I jest? Here following is the best three part composite summary, of this emerging trend, I’ve read to date. It’s penned by Steven Lefler, VP of Modular Lifestyles, Inc., and lifestyle Services, Inc. Edited and reprinted here with permission:

“…a new product, the ‘Solar Powered Manufactured Home’*3, introduced into existing LLLCommunities, where pre – 1978 homes already exist, may be Key to improving consumer perception and success in achieving greater cash flow, dealing with chattel capital issues, and effecting migration to a mix of existing new rental and contract sale homes.

Furthermore, property owners must move away from street dealers! They, for the most part, ‘have no skin in the game’, when it comes to improving the home product in LLLCommunities, since they continue to offer (in some, if not many cases) cheaply made, not so low cost homes. And the home manufacturers they buy from, appear complacent in their business model, even the status quo of low shipment volume. No one is looking five to 10 years out, where housing Research & Development is concerned.*4

Finally; our younger generation is priced – out of the traditional housing market, suffer high unemployment, and are encumbered with student loan debt. But if they’re to be our target market, for rental, and eventual homeownership, we must find and have the right housing (low price, low cost to live) product! High mortgage debt, and the accompanying mortgage interest deduction, do not make for a good housing market, but rather create housing bubbles and eventual financial losses.”

In a recent (8/13/2013) online article, ‘What makes solar power contagious?’, the writer, Brooke Clark cites a recent paper by two marketing professors, ‘Peer Effects in the Diffusion of Solar Photovoltaic Panels’, to this end: “10 extra solar installations by someone in the same (local housing market) area, increased the incidence of additional solar power by 7.8%, (&) there’s a 10% increase in the number of people with solar panels, in a like area, when solar panel adoption occurs within the same postal zip code.”
So maybe we need to take a closer look at retrofitting existing manufactured homes, and ordering new ones, with solar panels and extreme water conservation devices….

A little more from Steven Lefler. Here’s a self – description that makes one desire to learn more about the contemporary reality of low carbon footprint, off grid, low water use manufactured and modular homes designed for in – LLLCommunity installation.

“…I am the only dealer/builder/community owner/community management company representative, and real estate agent (in the U.S.), diligently working toward proving our company’s 2020 California – compliant manufactured and modular ‘Net Zero’ Homes Work Well For Real People! Our goal is to establish this proven brand, using diverse climate communities as testing grounds, then to subcontract and license out to housing factories, a proven and affordable home model design, for scattered site and in community build – outs. As a company, we’ve been doing this for five years, and remain one of but a handful of home builders to receive the ‘CALIFORNIA ADVANCED HOME’ rebate.. Our motto? ‘If you built it right, they’ll come back to your community!’ “ Reach Steven Lefler by visiting modularlifestyles.com

Well, there you have it. The description of the new paradigm shift in which we now live and work as manufactured housing and LLLCommunity aficionados. And to top it off, there’s the additional challenge of making our already affordable, quality manufactured homes even more energy and water efficient, from end to end.

NOTE. This is one of those rare occasions where every reader should take time to read the End Notes to Part II, located at the end of this blog posting. GFA

III.

BERKSHIRE HATHAWAY Home Services Revisited!

Recalling last week’s blog posting, ‘BERKSHIRE HATHAWAY Home Services, a precursor for affordable manufactured housing?’, know one blog flogger (reader), after perusing the column, forwarded an online article from MODULAR HOME BUILDER, titled: ‘Who Speaks for Residential Modular Housing?’ This was a fascinating ‘read’! Why? Because it turns out the modular housing folk have the same darn shortfall as HUD Code manufactured housing: NO National Brand Marketing effort in place now, or envisioned anytime in the near future!

Here’s the most telling quote from this article: “…there is absolutely No
Nationwide Modular (Brand) Industry Marketing Plan.”

And when this not so rhetorical question was posed, ‘Who speaks for modular housing?’, the writer identified

1) NAHB’s Building Systems Council, commenting. “What is missing from their website is any kind of marketing for residential modular homes.” STRIKE ONE!

2) Modular Building Systems Association. Here the writer pens, “I give this a ranking of three out of 10 on the Modcoach, ‘Excellence in Marketing scale.” STRIKE TWO!

3) MHI’s Modular Housing Council’s website is characterized as “…they offer next to nothing in the way of marketing modular homes to prospective new home buyers.” STRIKE THREE!

For some reason, the writer does not describe the Modular Building Institute. Maybe because this trade body has a commercial structure bent, but it has had residential modular builders as members in the past, if not the present. In any case, residential modular housing, just like HUD – Code manufactured housing, effectively ‘STRIKES OUT!’ when it comes to (Not) having a National Brand Marketing!

Again, is all this surprising or not surprising to you; since many, if not most, HUD – Code home manufacturers also build modular units? Bottom Line: Neither the HUD – Code manufactured housing industry, or the modular housing industry, have a National Brand Marketing program in place, or one even on the drawing board!

Kinda ‘splains’, as a past employer was known to say to me at times, ‘Why factory – built housing, as a whole’ is languishing when it should be vanquishing hi – priced, site – built housing! And until the present day No National Brand Marketing reality changes, given we have two types of quality factory – built housing in hand, ‘housing affordability’ in the United States will continue to go a – begging!

Hey Warren, Kevin, Joe, Nathan, and Danny & John, are you reading, listening, paying attention to what restrains your/our respective factory – built housing business models today? An inquiring national audience would like to know….

IV.

FLASH NEWS

Would YOU Like to Increase Your Cash Flow?

Do YOU have empty rental homesites within one or more land lease lifestyle communities that need filling? Are YOU confident your property has a high local housing market demand for good quality homes, if they were available on – site? And, are you dismayed at the lack of accessibility to competitive chattel capital funding at this time?

Well, we’re a couple land lease lifestyle community owners/operators who’re also tired of the lack of chattel capital financing available for buying and reselling homes into our properties, and want to discuss options and develop some practical solutions! All options are open, including arrangements with financial institutions, manufacturers, even the creation of a private equity fund, to provide such capital to qualified, participating LLLCommunity owners!

We will be at the 22nd annual International Networking Roundtable, 18 – 20 September 2013, at the Hilton Chicago Indian Lakes Resort; specifically, Thursday afternoon, September 19th at 4PM. Specific in hotel location will be announced during the Roundtable earlier in the day. And the forum will be open to anyone interested in participating.

To register for the Networking Roundtable, phone the Official Manufactured Housing Industry HOTLINE: (877) MFD-HSNG or 633-4764.

Note. The creation of a private equity fund has become a topic of lively interest of late. Know that the September issue of the Allen Letter professional journal will feature an article co – authored by LLLCommunity owners/operators also very interested in taking this unprecedented step in manufactured housing industry history.

V.

Getting Ready for MHI’s annual meeting,
& the NCC division meeting, 1 October…

Coming soon. A position paper relative to the National Communities Council division

***

End Notes.

1. Big Five + 1 = 21st Mortgage Corporation, CU Factory Built Lending, Triad Financial Services, Inc., U.S. Bank – Manufactured Housing Finance, and Green Hill Financial. Major regional and national chattel capital sources.

2. Types of housing now found in land lease lifestyle communities: pre – HUD ‘mobile homes’, post – HUD manufactured homes, modular homes (DE & elsewhere), ‘park model RVs’ (i.e. less than 400 square feet in size), ‘RVs for a season’ (seasonal & worker transient populations), even stick – built homes constructed on – site to look like HUD – Code homes (in FL. After hurricanes).

3. Reference to the Quest home (and its’ successors), exhibited at the 21st annual International Networking Roundtable in San Diego, during the Fall of 2012. According to Steve Lefler “… the Quest is a concept and educational tool used to attract people to Newport Pacific’s 80+ LLLCommunities – where the strategy is to position the firm’s communities as ‘Best in their Zip Code’, letting others stagnate in their operations. The purpose of the Quest home was not to sell industry folks, but be showcased at communities, fairs, and expos. There are only nine in existence today.”

4. Steve Lefler goes on to indicate the designers of the Quest home “have perfected a low cost HUD version; however, most are unaware of its’ existence.” This comment was in response to a veteran LLLCommunity owner’s observations after examining the Quest home: “My views are essentially the same as Steve Lefler’s – the economic circumstances of the 20 – 35 year time segment, combined with the sustainability ethic, make a Net Zero manufactured home (i.e. Quest home) the perfect solution. Here’s the problem. The Quest home, exhibited at the Roundtable prices out in the $70K range and is equivalent to the $25,000 HUD code home we just purchased (sans the remarkable energy efficiency). Why the high price? Because it’s a one – off, rather than mass – produced.

***

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

Berkshire Hathaway Home Services, precursor for affordable manufactured housing?

Sunday, August 18th, 2013

Blog # 259 Copyright 2013 18 August 2013

Perspective. ‘Land lease lifestyle communities, a.k.a. manufactured home communities, & earlier, ‘mobile home parks’, are the real estate component of manufactured housing.’

Purpose of this blog. ‘To be a national Advocacy voice, statistical Research reporter, & communications Resource for LLLCommunities, of all sizes, throughout North America!

I.

BERKSHIRE HATHAWAY Home Services,
a precursor for affordable manufactured housing?

RISMedia’s REAL ESTATE magazine, for the month of August 2013, describes BERKSHIRE HATHAWAY Real Services as being “…a residential real estate franchise brand…set to invigorate the real estate industry.” P. 3. This is such a grand story, its’ two principals command the cover photo of the magazine, and the Publisher’s Desk column (more about this later) gushes with enthusiasm; this followed by a five page feature story beginning on page 66.

Here’s what the magazine’s publisher has to say about branding in general, and the official launch of the ‘Berkshire Hathaway HomeServices’ brand in particular. All the while, watch for the logical, but as yet unrealized, tie – in to HUD – Code manufactured housing and its’ real estate component, the land lease lifestyle community (a.k.a. manufactured home community)….

Effective branding has always been an important cornerstone of the real estate
business. From the local independent firm to the national franchisor, real estate leaders of all shapes and sizes strive to maximize their brand and thereby create
that all important consumer recognition and loyalty.

That’s what makes the official launch of the Berkshire Hathaway HomeServices
Brand such a big deal. Perhaps enacting one of the most significant branding coups to date, the brokerage network – operated by HSF Affiliates – is banking on the power of Warren Buffet’s Berkshire Hathaway name to bring the concept of real estate branding to a whole new level! (Underlining for emphasis. GFA)

There it is! The potential double tie – in to, and with, HUD – Code manufactured housing and LLLCommunities! If I have to spell it out for you, here goes:

• Branding. HUD – Code manufactured housing has never had really it – thanks to entrepreneurial self interest & perennial internecine squabbling – but ever since Berkshire Hathaway acquired Clayton Homes, Inc., ‘MH branding’ has been on the minds (and in the fears) of manufactured housing aficionados and competitors alike, e.g. ‘When and how will it (MH branding) eventually happen?’ After all, given present ownership of Clayton Homes, Inc., Berkshire Hathaway already commands 48+/- percent of new manufactured housing market share nationwide – even amidst rumors of further soon growth in the Southeast. They’re there (brand positioned), it’s just not their focus – yet. So, if not yet, perhaps in the near future, we’ll see ‘an affordable housing franchise brand’ , or better yet, ‘MH brand’ also launched!

• Real Estate. And, HUD – Code manufactured housing is an inexpensive, quality housing type and affordable lifestyle, already in place, routinely siting new homes on scattered building sites conveyed fee simple, as well as into 50,000+/- multifamily rental properties nationwide! So, it’s but a hop – skip – and – a – jump to envision what a factory – built housing product, brand, and affordability awareness, like ‘Berkshire Hathaway Home Services’, would bring to the manufactured housing industry and land lease lifestyle community realty asset class.

Bottom line? BERKSHIRE HATHAWAY Home Services likely hits its’ realty brand stride during year 2014. And let’s hope a similar ‘affordable manufactured housing franchise brand’ isn’t far behind – whether launched via Clayton Homes, Inc. and its’ parent company; or, on a broader scale, via the Manufactured Housing Institute – and dare I suggest – better yet, a joint national brand marketing effort between MHI and the Manufactured Housing Association for Regulatory Reform!? After all, in the case of the institute, and its ‘Big 3 C’ members: Clayton, Champion & Cavco, they already corner more than 80 percent of the national market share of HUD – Code manufactured housing! So, let’s get the ball rolling together!

We’re already nearly there – but for pernicious self – interest and internecine squabbling, within the institute and between associations. Let’s overcome these bugbears and get on with recovery and a return to profitability! Hey, Warren, you listening? We hope so!

II.

Know What?

There’s more I could, and maybe should, share with you this Sunday morning. But the gist of Part I of this blog posting is important and timely enough to stand on its’ own! How so? Because if YOU buy into what’s penned here, and are not distracted by any other newsy notes and musings that’d otherwise follow in Parts III & IV following, YOU might be motivated to speak out to your state MHAssociation leaders, even our elected and salaried national advocates in and around Washington, DC., telling them

We’ve Waited Long Enough For Them to Wax Creative and Take Definitive Leadership Steps to Resurrect the HUD – Code Manufactured Housing Industry from its’ five year malaise of shipping but 50,000 new homes per year, and head back to the 250,000 shipment mark thought to be sustainable over the long haul!

WILL TELL YOU THIS. Not only are rumors afoot of further consolidation within the home manufacturing segment of the manufactured housing industry, but at least one HUD manufacturer has become so busy of late, in part due to a unique in – house finance program available to land lease lifestyle community purchasers of their new homes, that said firm has reached out to other manufacturer(s) to build new homes to their unique ‘specs’, to be shipped into the secondary manufacturer’s region, to save on freight costs. All this and much more, especially along the lines of ‘creative chattel finance alternatives’ will be disclosed at the 22nd International Networking Roundtable, 18 – 20 September, in Bloomingdale, IL! Registration already eclipses 50+% of the max number of attendees allowed. So, if not already signed – up for the 20+ educational sessions, nine peer networking events, and major realty deal – making opportunity, phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 Today!

***

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

Meetings $ & # Expose’, IPOs, & ‘DENSITY’

Sunday, August 11th, 2013

Blog # 258 Copyright 2013 11 August 2013

Perspective. ‘Land lease lifestyle communities, a.k.a. manufactured home communities, & earlier, ‘mobile home parks’, are the real estate component of manufactured housing.’

Purpose of this blog. ‘To be a national Advocacy voice, statistical Research reporter, & communications Resource for LLLCommunities, of all sizes, throughout North America!

I.

Anticipation Passion may be in the $s,
But Participation Proof is in the #s!

II.

IPO Time Once Again
for Land Lease Lifestyle Community Portfolios?

III.

IF NO MORE CHATTEL CAPITAL. WHAT’S NEXT?

***

I.

Anticipation Passion may be in the $s,
But Participation Proof is in the #s!

Amount of event registration fees and hotel overnight room rates oft predict, even presage (i.e. ‘give a warning of’) potential attendance at manufactured housing and land lease lifestyle community (a.k.a. manufactured home community) trade events and meetings. The 2013 Fall lineup of 16 national and regional gatherings, between 5 August & 5 November, offers a unique look into the near future, relative to participation level meeting planners and hosts might expect, based on 1) announced registration fees, 2) hotel overnight rack rates, and 3) past attendance numbers at like events.

For a complete list of the aforementioned 16 national and regional meetings, along with contact information, visit community-investor.com. Left click on the blog icon, then scroll back to blog # 257 and read the list therein.

For a comprehensive list of state MHAssociation meetings and training sessions, visit mhi.org. Left click on CALENDAR, but do NOT expect to find the aforementioned national and regional events listed there; e.g. NO RV/MH Hall of Fame Induction Banquet, NO 22nd annual Networking Roundtable, NO 3rd annual SECO Symposium, NO MHM® training & certification, NOT even ULI’s MHCC meeting! Why the omissions? It’s not like MHI didn’t receive Press Releases at least some of these ‘other events’. If you’re an MHI member, Ask WHY?! The institute either represents all segments of the manufactured housing industry or it doesn’t.

OK, let’s ‘run the $s & #s for four of what might be the biggest, most important national and regional meetings this Fall, where the HUD – Code manufactured housing industry and LLLCommunity real estate asset class are concerned.

• 22nd International Networking Roundtable for LLLCommunity owners/operators, 18 – 20 September, in Bloomingdale, IL. Registration is $395.00 for LLLCommunity owners/operators; resort hotel room rate X two nights = $278.00; and add $100.00 for ‘taxes, fees, miscellaneous’, for an event total of approximately $773.00, plus travel expenses. Last year’s attendance = 240 LLLCommunity owners/operators & their preferred lenders.

• MHI’s annual meeting, including the National Communities Council, 29 September – 1 October, in Carlsbad, CA. Registration is $399.00 for MHI members; resort hotel room rate X two nights = $438.00; and add $100.00 for ‘taxes, fees, miscellaneous’, for an event total of approximately $937.00, plus travel expenses. Last year’s attendance = slightly fewer than 100 MHI members, including only a dozen or so NCC members.

• 3rd annual SECO Symposium, 8 – 10 October, in Forsythe, GA. Registration is only $195.00 for LLLCommunity owners/operators; resort hotel room rate X two nights = $120.00; and add $100.00 for ‘taxes, fees, miscellaneous’, for an event total of approximately $415.00, plus travel expenses. Last year’s attendance = 142 paid registrants.

• 1st National Communities Council Leadership Forum, 16 – 18 October, in downtown Chicago. Registration is $549.00 for NCC members; downtown hotel room rate X two nights = $578.00; and add $100.00 for ‘taxes, fees, miscellaneous’, for an event total of approximately $1,227.00, plus travel expenses. No historical precedent for attendance estimate.

In summary; and given the accuracy of announced registration fees and quoted hotel rack rates, it appears the bottom line ‘per person’ cost to attend each of these four regional/national two day meetings, ranges from a LOW of only $415.00/person at the 3rd annual SECO Symposium in GA; to $773.00/per person at the 22nd annual International Networking Roundtable in IL; to $937.00/person at MHI’s annual meeting in CA; to a HIGH of $1,227/person, at the National Communities Council Leadership Forum in Chicago, IL. – or, in the latter instance, nearly triple what it’ll cost a LLLCommunity owner/operator to patronize the SECO event – where there’ll be six new HUD – Code homes on display!

Tried, albeit unsuccessfully, to resist commenting on the perennial problem of ‘high cost national meetings’ throughout the manufactured housing arena. Know what this wide range of meeting costs suggest (to me)? Someone at the national advocacy level is either 1) insensitive to the difficult economic times member companies and state MHAssociations suffer at present; OR, 2) are well aware of the matter, but also clearly realize how high meeting costs 1) Discourage Participation by anyone other than a few loyal and financially flush businessmen and women, along with high – salaried executives, all who write – off these meeting and hotel fees as deductible business expenses; and 2) Enable & Enhance ‘trade politic control’ for the few who do attend, often at the expense of peers who can’t or won’t waste the money! This is a situation that begs fixing, the sooner the better….

So, is this a new national advocacy association phenomenon? NO; it’s been the manufactured housing industry’s sorry, self – serving reality for decades!

II.

IPO Time Once Again
for Land Lease Lifestyle Community Portfolios?

Following quotes taken directly from the USA Today newspaper; ironically, on the same day the RV/MH Heritage Foundation hosted its’ annual Hall of Fame Induction Banquet, 5 August, in Elkhart, IN. Were YOU one of the 320 recreational vehicle and manufactured housing pioneers and businessmen and women present for this impressive soiree?

Title of the article lead in section B: ‘IPOs are back on the street’

“The world may not be ready for another dot-com boom, but Wall Street is definitely warming up to IPOs again.” (IPO = Initial Public Offering of a firm’s stock to the investing public)

“Companies are lining up to sell shares to the public for the first time, signaling the long – awaited reawakening of the market for initial public offerings might be happening.”

“It’s a strong year for the IPO market”, says Josef Schuster of IPOX Schuster. “It’s the best environment since the mid – 1990s for good companies. It’s amazing.”

FYI. The mid – 1990s, is when three (present day) real estate investment trusts, or REITs, were formed: ELS, Inc., (then MHC, Inc.), Chateau Communities, Inc. (now gone), and Sun Communities, Inc. UMH Properties (then United Mobile Homes) is not included in ‘the three’, as it became a REIT back in the 1980s, during the first such wave. Source of this REIT information? The 24th annual ALLEN REPORT, a.k.a. ‘Who’s Who Among Portfolio Owners/operators of Land Lease Lifestyle Communities (a.k.a. manufactured home communities), available for $500.00/copy from PMN Publishing via the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. OR, for FREE, when subscribing to the Allen Letter professional journal for only $134.95/year (12 monthly issues).

“The clip of IPOs this year is already on the verge of blowing away recent deal activity. There have been 116 IPOs this year, up 35% from this time last year. The number of IPOs is just about to pass the 128 done in all of 2012, and 125 in all of 2011.”

Three reasons, cited by the USA Today article, as to why the IPO market is finally showing signs of life:

The rising broad stock market

The Facebook effect. (After initially spooking investors, Facebook stock has rebounded.)

Strong performance of recent deals.

The article concludes with this warning: “You have to be selective and not just go in and think guaranteed returns.”

Well, with the foregoing in mind, this industry observer reached out to the four large LLLCommunity portfolio owners/operators rumored to be ‘growing & positioning themselves to go public’ in the near future with their own IPOs. Not unexpectedly, there were no replies. But then, that in itself, might be viewed ‘as a reply’. Hmm.

What do YOU think? Are we ready for more REITs in the LLLCommunity real estate asset class? Some would surely say YES to the broadened investment opportunity scenario. Others however, a resounding NO, recalling the out of whack (i.e. ‘out of sync with rent rates of other multifamily rental housing types in the same local housing markets) rental homesite rent rates laid at the feet of REITs formed during the aforesaid ‘second wave’ in the mid – 1990s. Proof? Recall the short – lived REITs now out of the business. See last page of 24th ALLEN REPORT for ‘name & number’ details.

And are we ready to have Wall Street analysts, once again, view our unique, income – producing property type as ‘growth stocks’ (expecting firms to pay a dividend every quarter, as opposed to reinvesting retained earnings for capital projects), rather than ‘value stocks’?

Whatever the case, when the new IPOs start rolling out; remember, you read about it here first!

III.

IF NO MORE CHATTEL CAPITAL. WHAT’S NEXT?

Though it genuinely pains me to say so, with each passing day and waning week, it’s looking more and more like the days of chattel capital financing new and resale homes in land lease lifestyle communities, as we’ve known it for decades, have come to an end. If TRUE, what is next?

Well, just this week, an email message crossed the PCs and desks of some owners/operators announcing the arrival of DENSITY, a.k.a. Legiance’s ‘Game Changer’. DENSITY? It’s an acronym for Develop Every Non – producing Site, Increasing Total Yield! Seriously.

Specifically and according to Dennis Duling, VP at Legiance Investments, Inc., DENSITY is a program “…for any (LLLCommunity) owner who has a community with high vacancy and limited capital.” The program’s sponsor will “…bring significant private capital (i.e. $1 – 10 million) to a community to: 1) renovate vacant homes, if appropriate; 2) bring in new homes to fill empty sites; and, 3) improve infrastructure where needed. In exchange, at the end of a period of two to three years, the community is sold or refinanced in order to cash out our investor(s) and allow Legiance, the investor, and the community owner, to share in the upside.” The deal can be structured as a joint venture or an outright purchase by Legiance. The firm is also agreeable to taking an equity stake in the community in lieu of a complete cash out from a ‘refi’ (refinance).

To be considered for the program, the LLLCommunity must be ‘C’ grade (or some would say 3 Star) or better, contain 60 – 200 rentable homesites, charge a minimum site rent rate of $275.00, have a vacancy level of 30 – 50%, and be able to document ‘solid demand’ in the local housing market.

OK, all that’s kinda the Good News. But keep in mind, this is a new $ program, likely with kinks to be worked out during the days ahead, relative to terminology, methodology, definitions, cited data, and more. If, however, you’re interested in learning more, contact Dennis Duling via (626) 653-2728. NOTE. The preceding is not to be taken as an endorsement of this or any other particular $ program, at this time. GFA

And know what? DENSITY is not the only NEW Program out and about these days. There are at least three HUD – Code manufactured housing factory cooperative home finance programs afoot, as well as budding interest in various manifestations of online crowd funding, and more. That’s why you need to plan NOW to participate in the 22nd annual International Networking Roundtable, 18 – 20 September, in Bloomingdale, IL. WHY? Well, Friday morning, immediately following the ‘always popular & heavily attended’ real estate lenders (loan originators) panel, there’ll be another group participation presentation, led by the most analytical LLLCommunity owner I know, focused on ‘What remains of the chattel capital market & beyond!’ YOU will not find a comparable program, anywhere, anytime, in the U.S. the rest of this year, and well into year 2014! Why? Because no one else is bold enough to take this sensitive, multifaceted subject on, in your behalf!

So, phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 today to get Roundtable information and or to register. Also visit community-investor.com online. For specific questions, reach GFA via (317) 346-7156.

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

Fourth Tough Question Refuses to Go, & Mtg. Schedule

Sunday, August 4th, 2013

Blog # 257 Copyright 2013 4 August 2013

Perspective. ‘Land lease lifestyle communities, a.k.a. manufactured home communities, & earlier, ‘mobile home parks’, are the real estate component of manufactured housing.’

Purpose of this blog. ‘To be a national Advocacy voice, statistical Research reporter, & communications Resource for LLLCommunities, of all sizes, throughout North America’

I.

That ‘Fourth Tough Question’ Refuses to Go Away!

Surely you remember, the ‘fourth tough question’ posed two weeks ago in Blog Posting # 255 at this website:

“Does the HUD – Code manufactured housing industry Really Want to See the
Return of ‘easy access to chattel capital’, stimulating new home shipment volume and filing vacant rental homesites in LLLCommunities, of all sizes, throughout the U.S.? – OR – has the nearly Five Year Shipment Nadir (i.e. ‘Lowest point’ in MHIndustry shipments history!’) become the accepted and manageable status quo benchmark in the minds and operations of one or more regulatory compliant lenders who’ve cornered the severely constricted manufactured housing loan origination market?’

Think about this matter carefully. Therein might lay the very crux of what put us where we wound up five years ago; where we are indeed today; and if we don’t break the vicious nadir cycle, where we’ll continue to be five years from now!

Within last week’s Blog Posting # 256, two MHIndustry veterans, each a successful entrepreneur businessman in his own right, responded with ‘heady & timely commentary’; one from the land lease lifestyle community perspective – 1) expressing dismay at independent, third party loan originator ‘cherry picking’ (i.e. via FICA scores) of manufactured home purchasers; 2) frustration with recent attempts by HUD – Code home manufacturers to roll out cooperative plans for selling/financing new home sales on – site, but with interest rates ranging from 12 – 20 percent; and now, 3) product price increases! And the other commentator boldly told us ‘easy access to chattel capital’ simply isn’t going to happen – EVER, and cited reasoned logic, couched on past bad performance of manufactured housing – secured chattel loans, as to The Why!

Well, this week, since Blog Posting # 256 appeared on 28 July, new additional ‘heady & timely commentary’, on that same ‘fourth tough question’ has arrived. The first is a mantra of sorts, being “Manufactured housing is fast becoming a cash business!” Reminds one of similar telling shibboleths of the past, e.g.

• During 1998, when we shipped 372,843 new HUD – Code homes, the commonplace pitch was: “We have no $ down, no job, no problem deals for you!’ Yep; that’s what we said back then to our prospective home buying customers.

• During 2002, when shipment levels plunged to their worst level since 1963, we frequently heard: “Be a stud, sell a HUD!” And 12 months later, we ballyhooed the “Year of the hudular!” –albeit a short lived production fad that went nowhere.

• During 2006, the everyday question was: “When does hurricane season begin?”, reminiscent of the ‘Katrina Factor’ that goosed home shipments a year earlier.

• During 2007, as more and more LLLCommunity owners/operators sold and self – financed new homes on – site, we frequently heard the clarion call for a “Return to Our (manufactured housing’s) Affordable Housing Roots!” – a plea that fell on deaf ears until 2008 & 2009, when National State of the Asset Class caucuses were held in Tampa, FL., & Elkhart, IN. (The NSAC has since been relabeled the MHInitiative®. Watch for announcement of a third national strategic planning caucus; planned, promoted and hosted by MHInitiative®, unless MHI or MHARR ‘steps up to the industry leadership plate’ beforehand, to lead us out of our self – generated & perpetuated new home shipment malaise (‘uneasiness & discomfort’) and morass (‘a marsh, a bog’ – as in ‘bogged down’).

• During 2010, at a heavily attended Manufactured Housing Finance Roundtable in Elkhart, IN., federal government regulators and GSE representatives made it absolutely clear: “Manufactured housing is on its’ own!” – and frankly, they were not only right but prescient, as nothing has changed since then – 3 ½ years later!!!

All of which brings us back to this new shibboleth” “Manufactured housing is fast becoming a cash business!” How do YOU see this scary prognostication? TRUE or FALSE? As they say, inquiring minds would like to know! Via email: gfa7156@aol.com or the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

Then there’re these convicting remarks from yet another manufactured housing business executive:

“I’m with SR (commentator quoted in last week’s blog), who notes there ain’t no such thing as a free lunch! The MH industry has fouled its’ nest, and it’s not alone. So has the whole housing industry – the government, the entire nation. Collectively, we’ve bought far more than we can pay for, and now we’re paying for it. And we will be for some time. Nobody owes us nuthin. We owe everybody. There’s plenty of money available, sloshing around, just looking for good secure returns. That money will find its’ way to our (housing) product when we offer good housing that people of ordinary means can afford! By that, I don’t mean housing they can buy, if prepared to stretch to more than 30 percent of their annual household income.” BV (lightly edited. GFA)

If you’d like to read more on this heady and timely subject, i.e. What ‘affordable housing’ is, and how to measure it in terms of 1) the Annual Median Income (‘AMI’) of local housing markets, 2) Annual Gross Income (‘AGI’) of prospective home buying individuals and households, 3) the 30% Housing Expense Factor or HEF (One of six recognized measures of affordable housing), and 4) how ‘50% of AMI’ has become our nation’s ‘affordability benchmark’, make it a point to read and study the August 2013 issue of the Allen Letter professional journal.

The lead feature is titled ‘Contemporary Archetype of Truly Affordable Housing in the U.S.!’. It walks the reader through the multistep process of estimating ‘affordable’ & ‘risky’, new & resale home transactions, within & outside land lease lifestyle communities – and in the end, makes a compelling case for HUD – Code manufactured housing and its’ real estate segment lifestyle, as indeed being, ‘the contemporary archetype of truly affordable housing in the U.S.’! To subscribe, phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Only $134.95/year for 12 monthly issues. (During the 23 years I’ve been writing and editing the Allen Letter professional journal, this is the most important and challenging housing – related article I’ve penned to date! GFA)

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II.

Upcoming Opportunities You Don’t Want to Miss!

Last week we listed 11 MH, RV, RE & PM – related trade, educational, networking, and deal – making events YOU should be aware of this Fall; and deciding now, which ones to support with your participation. Well, since then, we’ve learned of more events to add to the list, increasing the total to 16 – all occurring between 5 August and 5 November, a scant three month period of time! Venues containing (*) are the ones I plan to patronize, and ‘Hope to see you there!’

5 August @ RV/MH Hall of Fame Induction Banquet (*) in Elkhart, IN. (574) 293-2344. Craig Bollman & Theresa Desfosses among ten inducted in this Class of 2013. Be sure to look at the new Fairmont HUD – Code home installed in front of the RV/MH facility, right along Interstate – 80. That means an average of 55,000 auto drive – bys per day, or more than 20 million people, viewing an attractive new example of our type factory – built housing, during the course of the next 12 months!

8 August @ four Webinars (*) having to do with New Advertising Rules as they apply to LLLCommunity owners/operators selling and financing new and resale home transactions on – site. For times and details, contact Donna Rishel via (217) 971-3968.

18 – 20 September @ 22nd International Networking Roundtable (*) in Bloomingdale, IL. (317) 346-7156. ‘Celebrating 20 Years of Camaraderie!’ 100+ already registered! Don’t miss this unique annual educational, peer networking, deal – making opportunities!

19 September @ Equity University’s Networking Conference in Orlando, FL. (888) 382-4727 x 127. Spencer Roane, MHM® is being considered as a presenter at this venue.

29 September – 1 October @ MHI’s annual meeting (*) in Carlsbad, CA. (703) 558-0678. If you’re a direct, dues – paying member of MHI, make it a point to participate!

30 September, 1:45 – 3:45PM @ MHI’s National Communities Council meeting (*) in Carlsbad, CA. (703) 558-0666. Rumor has it, ‘a New Era for LLLCommunities begins!’

8 – 10 October @ 3rd annual SECO Symposium in Forsythe, GA. (865) 385-9675. This is the only regional event planned & hosted entirely by LLLCommunity owners/operators, with an emphasis on seller – financing of homes, and with several homes on display! For information, contact Spencer Roane, MHM®

10 & 11 October ! MHC of Arizona meeting (*) in Tucson, AZ. (480) 345-4202. Very special program being planned for LLLCommunity owners/operators, by Susan Brenton.

15 – 17 October @ WMA’s annual convention & expo in Reno, NV. (916) 448-7002 & talk to Sheila Dey.

15 – 19 October @ Institute of Real Estate Management’s Leadership Conference in Scottsdale, AZ. (312) 329-6000.

16 – 18 October @ MHI’s National Communities Council division’s Leadership Forum (*) in downtown Chicago, IL. (703) 558-0666. Sam Zell to be guest presenter.

20 & 21October @ Legacy Housing’s first ‘Park Show & Seminar’ in Ft. Worth, Texas. For information, contact Mark Ledet via (817) 632-3351 Special celebrity guest is Randy White of the Texas Cowboys.

23 October @ a PMN Publishing – sponsored national Manufactured Housing Manager® professional property management training & certification class (*), in Indianapolis, IN. (317) 346-7156. Only certification program taught by a Certified Property Manager® member of the Institute of Real Estate Management® & LLLCommunity owner/operator

23 & 24 October @ New York Housing Association’s annual meeting at Turning Stone Resort in New York. (518) 867-3242. Talk to Nancy Geer

5 & 6 November @ London Computer’s annual Rent Manager® Conference (*) on Marco Island, FL. Primarily for Rent Manager® users. Contact regional sales rep for details

5 – 8 November @ Urban Land Institute’s Fall Meeting (*) in Chicago, IL. Manufactured Housing Communities Council or MHCC, to meet during the same time frame. Randy Rowe of Green Courte Partners is co – host of ULI’s meeting. Sam Zell is a guest speaker

***
George Allen, CPM®Emeritus, MHM®Master
Box # 47024, Indpls, IN. 46247 (317) 346-7156