Archive for September, 2013

Four Announcements & Several Pithy Thoughts

Sunday, September 29th, 2013

Blog # 265 Copyright 2013 29 September 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!

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

Four Announcements & Several Pithy Thoughts…

I.

25th Anniversary ALLEN REPORT questionnaire deadline is 30 September
500 land lease lifestyle community (a.k.a. manufactured home community) portfolio owners/operators have been surveyed! FAX completed questionnaire to (317) 346-7158. The 25th AR debuts 1/1/2014 in the Allen Letter professional journal. Subscribe via the MHIndustry HOTLINE above.

II.

‘First public discussion to plan a Private Equity Fund, geared to support LLLCommunity owners purchasing new and resale manufactured homes, was held 19 September, at the Networking Roundtable in Bloomingdale, IL. More than 50 participated & 20 completed a survey gauging their interest.’ Contact: mnainvestments@comcast.net and garykenner@msn.com

III.

Susan McCarty & George Allen announce Community-Investor’s ‘not so quiet role anymore’, as Buyer Consultant Representative, for qualified and motivated investors, intent on acquiring one or more land lease lifestyle communities (a.k.a. LLLCommunities). Phone (317) 889-6465 &/or smc4464@sbcglobal.net This, a special, quiet, personal service for 20 years!

IV.

‘Champion Home Builders opens second plant in Lake City, FL., to Meet Growing Demand’ for HUD – Code homes! The Redman brand “…Riverview series (of home designs)… will target homebuyers seeking cost – effective housing options in manufactured home communities.” See these and other Community Series Home models, on display, at the upcoming SECO event, 8-10 October. Contact spencer@roane.com for details. This 100% LLLCommunity owner planned & hosted regional show has become the ‘must attend’ manufactured housing venue of Fall 2013!

V.

‘NEW ERA for land lease lifestyle communities (to be) characterized by national political & regulatory advocacy, statistical research reporting, timely print & online communication, monthly distribution of 12 helpful resources, superb peer networking & realty deal – making opportunities, as well as professional property management training & certification, for communities of all sizes, nationwide!’ Read of progress here, following MHI’s National Communities Council meetings on 9/30 & 10/16 – 18/2013.

VI.

From MHARR’s Washington Update, 23 September. “Vanderbilt – GNMA Sole Source Contract to Service FHA Title I Manufactured Housing Loans Raises Questions & Concerns”…

”…GNMA was willing to take ‘a second look’ at the ’10-10’ criteria and potentially revise downward, based on more recent loan performance information; and had specifically requested such information from industry finance companies and their Washington, D.C. representation in 2010, but received no response. While it’s positive the MHIndustry has a qualified lender (Vanderbilt) under the existing rules, the disproportionate influence of it, and other lender(s?) shaping the industry’s consumer finance policies in Washington, D.C., should be a concern for the entire industry.” (Lightly edited. GFA) There’s much more to this story. Phone (202) 783-4087.

VII.

Did you know? ‘Expensive national meeting venues ensure the most financially successful businessmen and women, and high – salaried executives, retain continued primary control regarding which trade advocacy matters are addressed, and how and by whom.’ That truism played out recently, when a grassroots member of one national advocacy body recommended New Business items for a national meeting agenda, and was told they had to be pre – approved by the division’s chairman. Hmm. Makes one wonder whether a bevy of proxy votes will be accepted or rejected next time there’s a national election of officers? Guess we’ll soon see….

***

George Allen, CPM & MHM
Box # 47024, Indpls, IN. 46247.

Networking R’table Success; NEW ERA Redux

Sunday, September 22nd, 2013

Blog # 264 Copyright 2013 22 September 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 Resource reporter, & communications Resource for LLLCommunities, of all sizes, throughout North America!

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

I.

Roundtable Begins New Manufactured Housing Tradition!

II.

Fall Meeting Schedule Mucked Up All the More…

III.

A Contrarian View of NEW ERA Dawning for LLLCommunities?

IV.

25TH ALLEN REPORT will be distributed 1 January 2014, as a lagniappe in that month’s issue of the Allen Letter professional journal, if YOU return your completed land lease lifestyle community questionnaire by 30 September, via (317) 346-7158

***

I.

Roundtable Begins New Manufactured Housing Tradition!

And that’s not all it did – not by a long shot. If you’re reading this, and are an owner/operator of land lease lifestyle communities, you missed ‘the big one’! How so? Read about the 22nd Networking Roundtable in Bruce Savage’s upcoming lagniappe feature, enclosed with the October issue of the Allen Letter professional journal. Not a subscriber? Phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 to do so – today! By the way, Bruce’s story will contain the names & contact information for all 20+/- presenters at this year’s event, making the article a ‘keeper’, for future reference.

‘Celebrating 20 Years of Camaraderie!’ among LLLCommunity owners/operators nationwide, set one heckuva positive, friendly, and productive tone for this year’s 22nd annual Networking Roundtable. That tone was enhanced by YES! Communities’ founder and chairman Gary McDaniel; accompanied by distribution of Bruce Savage’s new book, The First 20 Years! to everyone present. And the icing on the 2 ½ day legacy cake was sweetened by the presence of the chairman and executive VP of the RV/MH Heritage Foundation’s Hall of Fame, Museum & Library in Elkhart, IN. Indeed, ‘History Was All Over the Place!’ at this year’s venue….

Traditions. Given 22 years of history behind it, it’s not surprising to learn there’re at least four such commemorations are in place every time LLLCommunity owners/operators from throughout the U.S. come together for their annual Networking Roundtable. Two of them have been in place since the event was postponed in 2001 due to the ‘911’ national tragedy. To this day, every Roundtable event begins with the audience standing and reciting the Pledge of Allegiance to the American flag! And Friday morning, at 7AM one to two dozen Roundtable participants gather for an informal prayer meeting for our nation and its’ leaders.

The other two traditions? One’s unusual and one isn’t. During the first session of every Roundtable, everyone – usually around 200 individuals, stands and introduces themselves to the entire group. And that’s how the Networking bets jump – started! Then, throughout the 2 ½ day event, someone representing the Manufactured Housing Institute or MHI, usually Rick Rand, ACM, from Great Value Homes in WI., collects thousands of dollars for the institute’s PAC Fund. Maybe not a ‘tradition’ in some folk’s eyes, but surely is where LLLCommunity owners/operators are concerned.

This year’s New Tradition? ‘A Toast to the Community Owner!’ was composed, and first shared publicly, on 23 August 2010, in honor of the late Bud Zeman, a Chicago multi -community owner. At that time 24 of his peers came together for dinner at the famous Rosewood Restaurant in Rosemont, IL., to socialize and honor Bud’s memory. Since then, the poetic toast has been slightly revised and embellished. It goes like this:

Until every homesite is filled, and every bill paid.
With mortgage refinancing approved and dollars on the way.
We’ll ply this trailer trade, selling & financing affordable homes, factory made,
Knowing lesser men truly fear this business we embrace with our peers.
‘So, to community owners everywhere, I offer this toast to our worthy trade’:
“May hitches hold, site rent flow, and all our homes be sold!”

Hopefully, the public offering of ‘A Toast to the Community Owner!’ will become usual fare, a tradition, at every venue where land lease lifestyle community owners/operators gather.

II.

Fall Meeting Schedule Mucked Up All the More….

Three meetings have come and gone, one has been postponed. Yet there’s still at least 14 national, regional, and some special statewide ones to occur before 8 November 2013. Whew! Why do we do this to ourselves?

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 attend yet another high – priced venue.

30 September, 1:45 – 3:45PM @ MHI’s National Communities Council meeting, also in Carlsbad, CA. (703) 558-0666. As we’ve hinted before, ‘a NEW ERA for land lease lifestyle communities’ might begin at this ‘first full membership meeting of the NCC in a year’! If you missed reading the NEW ERA Mission Statement in last week’s blog posting at this web site, go back and review it before attending the NCC meeting.

8 – 10 October @ 3rd annual SECO Super Symposium in Forsyth, GA. (865) 385-9675. This is ONE MEETING THIS FALL I’ll sorely miss – that I HOPE YOU ATTEND! Why? It’s been planned, and will be hosted, 100% by LLLCommunity owners/operators – and no one else. It’s replete with timely seminars on cutting edge topics (e.g. Where & how to find chattel $ capital for home sales on – site, and much more), PLUS there’ll be at least eight new HUD – Code homes on display! What other manufactured housing trade show this Fall can boast such as program? NO ONE! Oh, and it’s, by far, the most cost effective (i.e. economical) regional/national venue this Fall!

9 October in Indianapolis, IN., IMHA/RVIC’s annual (luncheon) meeting. Not a regional event, but one that generally manages to attract a fair share of national talent relative to the RV/MH sister industries. (317) 247-6258.

10 – 11 October. MHC of Arizona meeting and seminars in Tucson, AZ. (470) 345-4202. Susan Brenton has planned this venue to be ‘land lease lifestyle community – heavy’, with emphasis on the ‘5 – RPs of Marketing’, relative to new and resale home sales on – site, and the leasing of rental homesites via: RIGHT Product, Place, Price, Promotion, People!

15 – 17 October @ WMA’s annual convention & expo in Reno, NV. (916) 448-7002, and talk to Sheila Dey. Does this state association ever bring anyone in from outside California to interact with their members?

15 – 19 October @ Institute of Real Estate Management’s Leadership Conference in Scottsdale, AZ. (312) 329-6000. Frankly, this event should see several dozen LLLCommunity owners/operators in attendance each year, but there’s rarely more than a handful – that’s how far afield, as a realty asset class, we are from embracing professional property management. How many Certified Property Managers® do you have on your regional and executive level property management staff?

16 – 18 October @ MHI’s National Communities Council division’s Leadership Forum in downtown Chicago, IL. (703) 558-0666. Sam Zell is the publicized draw for this high – priced meeting. Will be interesting to see what transpires at this ‘second NCC meeting in little more than two weeks time’, and where none of the presenters’ names and credentials have been made public to date. Wonder why?

17 & 18 October @ Legacy Homes’ first of two sequential plant shows in Fort Worth, TX. Mark Ledet via (817) 632-3351. Why is this cited as a national or regional event? To highlight the fact this HUD – Code home manufacturer, unlike its’ competitors, is routinely reaching out to market new homes to land lease lifestyle community owners/operators. They were well – represented at the Networking Roundtable a month earlier, as well.

20 & 21 October @ Legacy Homes’ second sequential plant show in Fort Worth, TX. Mark Ledet via (817) 632-3351. Guess if you missed the first one – by being in downtown Chicago at the NCC’s Leadership Forum, you can catch this one. And know there’re celebrity guests at both events.

23 & 24 New York Housing Association’s annual meeting at Turning Stone Resort in New York. (518) 867-3242. Talk to Nancy Geer. Not one of Nancy’s usual Super Symposium events, this time around; maybe next year.

29 October @ Michigan MHAssociation’s annual meeting, featuring that entity’s possible entry into the world of for – profit financing of manufactured housing, recreational vehicles, self – storage facilities, and more. If a Michigan businessman or woman, phone Tim DeWitt for info: (517) 349-3300X18

5 – 7 November @ London Computer’s annual Rent Manager® Conference on Marco Island, FL. Primarily for Rent Manager® users. Contact regional sales rep for details and an ‘invite’, if qualified. Here too, I’ll be covering the ‘5 – RPs of Marketing’ new and resale manufactured homes on – site in LLLCommunities, and leasing of vacant rental homesites.

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

So, how much of this mucked – up Fall schedule of mostly MH – related meetings will you be attending? I’m planning to be present of six of them. See you there! GFA

III.

A Contrarian View of NEW ERA Dawning for LLLCommunities?

Last week’s ‘Status Quo Slow or Game Changer Quick’ lead posting touched more than one nerve among the blog’s readership. In fact, one might opine, the ‘status quo slow’ folk remain in the driver’s seat.

“The change you promote (i.e. Dawning of a NEW ERA for land lease lifestyle communities), from my perspective is this: ‘LLLCommunity owners to collectively band together? Not Likely! Management companies comprised of LLLCommunity owners to come together? Not Likely! REITs to join together with all other LLLCommunity owners? Not at all likely! Why? Too many are selfish distribution – minded folks living in the past, clinging to old business models, seeking guidance from HUD – Code home manufacturers and MHRetailers – neither of which are ‘solutions ‘for LLLCommunity owners. Heck, they’ve probably never seen a P&L for a LLLCommunity. The LLLCommunity ‘big boys’ (i.e. large property portfolio folk) are consolidating. Why is that? Well, the writing – for ending chattel $ – is on the wall! The future is rentals! How so? Close the GSEs first, then eliminate chattel $, continue to promote elimination of the mortgage interest income tax deduction or cap it, and do away with ‘motor vehicle titling’ for homes going into LLLCommunities. A lead indicator? Hedge Funds now own tens of thousands – or more, rental homes across the country. Hey, just follow the money!” (Lightly edited. GFA)

Too simplistic a view to be universally right? Perhaps. Perhaps not. As we participate in various state, regional, and national MHIndustry & LLLCommunity – related venues this Fall, let’s Make it a Point to Observe, from afar & up close, how often or rarely, various LLLCommunity segments, large and small, identified in the previous paragraph, ‘play well together’ or Not! I’m certainly hearing more ‘consolidation disparity talk’ than ever before – even as We ‘Celebrated 20 Years of Camaraderie!’, at the recent 22nd annual International Networking Roundtable. Perhaps an inclination toward ‘Game Changer Quick’, but don’t get too comfortable with that thought.

For when a well known industry leader tells me, in effect, ‘expensive national meeting venues ensure the most financially successful businessmen and women retain continued primary control regarding which trade advocacy matters are addressed and how’; well, that’s clearly ‘Status Quo Slow’, a long long way from ‘Game Changer Quick’, dontcha think? So, in the weeks and months ahead, to the end of year 2013, Pay Close Attention! ***

George Allen, CPM & MHM, Box # 47024, Indianapolis, IN> 46247

Status Quo Slow or Game Changer Quick, & Mission Statement…

Sunday, September 15th, 2013

Blog # 263 Copyright 2013 15 September 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 Resource reporter, & communications Resource for LLLCommunities, of all sizes, throughout North America!

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

I.

‘Status Quo Slow’ or ‘Game Changer Quick’?

II.

NEW ERA Mission Statement for Land Lease Lifestyle Communities!

***

I.

‘Status Quo Slow’ or ‘Game Changer Quick’?

Had a Pithy Topic in Mind & This Title; Then Along Came These Emails…

To this day, I regard Charles (‘Chuck’) Fanaro, developer/operator of beautiful Saddlebrook Farms land lease lifestyle community (A.k.a. manufactured home community) in Grayslake, IL. (West of Chicago), and owner of Hi – Tec Housing, Inc., in Elkhart, IN., (a HUD – Code home manufacturer) to be one of the most visionary entrepreneur businessmen during the 70 year history of HUD- Code manufactured housing!

And lately, I’ve come to regard Steven Lefler, vice president of Modular Lifestyles, Inc., domiciled in southern California, in similar fashion. Steven’s vision and expertise is in the realm of innovative HUD – Code home design, characterized by solar – power off – grid capability and near independence from water resources. Additionally, the firm he works for routinely retrofits functionally obsolete rental homesites, in decades old ‘mobile home parks’ in California, with Solar Green Porch Homes. Reach him via steve@modularlifestyles.com

As the result of a recent exchange of emails between us, I reached out to a couple dozen individuals I consider to be national leaders throughout the HUD – Code manufactured housing industry and the LLLCommunity realty asset class. What follows from here, is a lightly edited version of those email conversations between us, beginning shortly after his reading of last week’s (8 September) blog posting at this website.

STEVEN to GEORGE. There’s an attractive chattel finance alternative available in California, when siting solar power energy – equipped, highly energy efficient homes! LLLCommunity owners are offered a 50% financing purchase option, at low interest rates, by lenders who believe these specially – equipped, nearly ‘off power grid’ homes are a major WIN – WIN for the property owner, as well as the renter or buyer of said home; in large part due to the major utility cost savings.

Furthermore, in California we’re being mandated to have Modular Lifestyle type homes in place by year 2020! We just happened to have designed and developed working HUD – Code homes that fully comply, well before others will be ‘forced to do so’. We are image busters as well, having been recognized as ‘Best in Class’ among retrofitted LLLCommunities, given installations of our innovative, energy efficient housing model.”

Then we banter back and forth about Steven’s plans to incorporate wheel chair lifts into Solar Green Porch Homes; and my ‘decades past’ experience with LLLCommunity portfolio owners/operators in search of ways to keep older, increasingly feeble residents on – site in their properties. And how – due to younger, healthier retired residents’ angst about such ‘new features’, these plans were scrapped. What features? Ramping existing driveways up to door threshold level to ease ingress and egress from vehicles into homes; installation of grab bars, emergency call devices, and wheelchair accessible vanities throughout the home. Why the angst? These features were viewed as unwanted daily reminders of what ‘they’ could expect in years to come – when they became frail and feeble.

Steve then talked and defined Universal Design (i.e. ‘Broad spectrum of ideas meant to produce buildings, products, and environments inherently accessible to older people, those with and without disabilities’) as it related to HUD – Code manufactured homes, citing failures on their part, as he saw it, to be sensitive to changing homebuyer demographics, not having a national brand marketing program, image issues, and the like. It was at this point; I decided to share his forward – looking message with peers in the MHIndustry and LLLCommunity asset class, via blast email, and now this blog posting.

GEORGE to STEVEN. “In a few short paragraphs, you clearly – in my opinion – identify the sorry lack of national and regional market sensitivity (e.g. regarding changing demographics, etc), trend foresight per ‘housing needs’, MHIndustry strategic planning, and more (e.g. national brand promotion, image improvement, etc.), all perennially characteristic of our factory – built housing business model, and in large part, it’s unique, income – producing property type or component as well.

My hope is, one or more of the mostly entrepreneur businessmen and women (receiving this email message & reading this blog posting), will agree with the content of the previous paragraph – and use the type forward – thinking you espouse, maybe even some of the critique I oft voice in our blog and op/ed pieces, to get motivated to finally say collectively:

It’s time NOW, to figure out HOW to bring MHIndustry & LLLCommunity asset class ‘thinkers’ & ‘do’ers’ together in an inexpensive national, retreat style forum – along the lines of two National State of the Asset Class caucuses we facilitated in 2008 & 2009, to finally and effectively address various market, brand, and image matters – in an open, creative, strategic, industry wide fashion! Such a gathering must be Open to all businessmen and women willing to pay a reasonable price to participate, whether a national advocacy body member or not.

I know I’ve often talked about ‘doing this’ in the past, and frankly, if the lions’ share of participants were to be LLLCommunity owners/operators, I’d do so in a heartbeat! But this matter, the way you articulate it – and in truth, the way it must happen, has to involve every major segment of the entire MHIndustry, especially LLLCommunity owners/operators! That’s why such an inexpensive national, retreat style two day venue, maybe even this Winter, must be organized and promoted by One – or the Other, of the two present day advocacy bodies; better yet, both of them working together!

All I can do here is; once again, make the continuing and pressing need for grand thinking, strategic planning, and needed action known; along with the sincere hope this timely Change Challenge Opportunity finally falls on receptive leadership ears. Otherwise, our unique business culture continues adrift – one more reason to believe the MHIndustry will continue on at a snail’s pace of only 50,000+/- new HUD – Code homes shipped per year ad infinitum!

Yet another reason for this ‘stuck in neutral @ 50,000+/- homes shipped’ belief? GSE reform! If pending GSE reform legislation does not contain definitive and mandatory language, to the effect HUD – Code manufactured housing’s chattel mortgage securitization SHALL be included as an integral part of said reform, rather than just saying, ‘may’ be included, we’ll – as an industry, be ‘dead in the water’ going forward – much to the pleasure of our housing competitors, maybe even some folk within the MHIndustry.

Well, I’ve thrown out the Change Challenge Opportunity. Now let’s see if one or more of our MHIndustry Leaders picks it up and, figuratively speaking, Runs with it ‘Game Changer Quick’; or once again, let’s everyone remain stuck in ‘Status Quo Slow’?

II.

NEW ERA Mission Statement for Land Lease Lifestyle Communities!

A NEWER ERA for land lease lifestyle communities (A.k.a. manufactured home communities) will be characterized by 1) effective national political and regulatory matters – related advocacy, 2) ongoing operational statistical research reporting, 3) routine and timely print and online communication, 4) widespread resources distribution, 5) superb peer networking, 6) realty deal – making opportunities, and 7) professional property management training and certification; for properties of all sizes, from coast to coast!

***

George Allen, CPM & MHM
Box # 47024, Indianapolis, IN. 46247

(317) 346-7156

Wha’s the Chattel $$$Buzz All About?

Sunday, September 8th, 2013

Blog # 262 Copyright 2013 8September 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!

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

I.

What’s the $$$ Buzz About?

Networking Roundtable Set to Celebrate 20 years Camaraderie; ‘Splain’ all ‘bout Chattel Capital Sourcing; Talk of a Private Equity Fund; Promote One’s Brand via Social Media; Examine Good & Bad Realty Deals; Talk to a Dozen+ RE Lenders; &, Learn to Use the ‘5RPs of Marketing’ in Three MH & LLLCommunity Scenarios….

But here today, we’ll focus only on Chattel Capital Sourcing! With permission, I’m quoting from recent email exchanges between one of the manufactured housing industry’s most respected state association executives, and a land lease lifestyle community owner/operator with two decades of hands – on experience, self – financing new and resale home transactions among his properties.

“Yes, ‘stupid money’, especially pertaining to chattel financing available to independent (street) MHRetailers, is likely (Let’s hope!) a thing of the past. However, low interest rates, fewer lending/investing alternatives, tighter credit, more banking regulations, and new willingness on the part of many LLLCommunity owners to truly WORK WITH lenders, appears to be why more (new) lenders are ‘sniffing around’ the manufactured housing industry today. (Some will be at the Networking Roundtable! GFA)

In the meantime, most independent third party chattel lenders (i.e. until recently known as the Big Four + One) or ‘A’ lenders, are apparently doing as much manufactured housing business as they have an appetite for, by focusing on borrowers whose minimum FICO scores are above 650 points. That singular criterion eliminates upwards of 90 percent of those interested in buying new manufactured homes in most all age land lease lifestyle communities! When processing applications for site rent, home rent, or lease – option contracts, LLLCommunity owners generally place more emphasis on front – end & back – end, debt – to – income (or DTI) ratios, employment factors, and rental or criminal histories.*1 In fact, for many LLLCommunity owners/operators, the sole use for FICO scores, is to determine if the applicant should be referred to an ‘A’ lender. (That’s a 180 degree reversal from 20 years ago! GFA)

Furthermore, and confirming the point made in the previous paragraph, severe attrition among independent (street) MHRetailers during the past ten years, and past severe chattel finance losses, suggest the present and future financing ‘play’, these days, may well lie with LLLCommunities, where lenders & property owners form symbiotic relationships, beneficial to all THREE parties involved in a MH finance transaction: the lender or source of capital, the community owner, and prospective homebuyer/mortgagor/site lessee.

To this end, new concepts are being floated to see what gets traction. For example, some involve the purchase of existing chattel notes, and other seller – finance vehicles (e.g. rental and lease – option contracts), and expectation the lender/buyer assumes all risk, citing outrageous cost of funds, @ 15 – 20% per year, to the LLLCommunity owner. Only those note sellers who’re desperate, or holding worthless paper, are likely to be interested; likely resulting, over time, in a potential lose – lose transaction for all involved. (One of several motivations sparking interest in launching a Private Equity Fund. Discussion scheduled at the Networking Roundtable. GFA)

The 21st Mortgage Corporation’s 1 ½ year old C.A.S.H. Program, and the novel in – house finance program offered by Legacy Homes (Texas) are good examples of mutually beneficial relationships much more acceptable to LLLCommunity owners. Both are relatively new and still being tweaked. Word ‘on the street’ is announcements are in the offing, citing significant improvements to both programs – maybe even at the upcoming Networking Roundtable.

Another, mutually beneficial concept being considered for possible rollout, involves a hybrid floor plan program, where floor plan financing routinely provided by a HUD – Code home manufacturer to a MHRetailer (In this case, a LLLCommunity selling homes on – site), is extended to the point when the newly sold home is occupied! This concept is especially appealing to those manufacturers with strong balance sheets, and who are comfortable with the profitability of conventional floor plan financing. (You will only learn about this alternative, at the Networking Roundtable. GFA)

Yet another interesting and recent development, involves new working relationships LLLCommunity owners are establishing with local banks, to fund the acquisition of new homes, and in some cases, effecting the origination and servicing of home mortgages on – site. Various combinations of recourse and underwriting criteria are assuring profitable returns to the lenders; isolation from S.A.F.E. Act licensing for LLLCommunity owners; and, attractive financing for the homebuyer/mortgagor/site lessee. And at least one effort is underway to establish this type ‘small bank’ program throughout an entire geographical region.

Captive finance. This typically refers to either an in – house finance program that originates and services home mortgages, or a separate lending business altogether from the LLLCommunity operation. Since such practices, in the first instance, are prohibited without S.A.F.E. Act licenses, in – house origination/servicing efforts are, or should be, practically non – existent. Other LLLCommunity operations opt for the second alternative. And there are LLLCommunity owners who effect captive finance programs, employing lease – option contracts in states where the use of such arrangements doesn’t require S.A.F.E. Act licenses. An interesting captive finance twist, that likely avoids S.A.F.E. Act licensure, is offered by a few chattel lenders who originate home mortgages, then sell them back to the LLLCommunity owners, while retaining the servicing of said mortgages. And one recent arrival on the third party independent chattel lender scene apparently originates home mortgages on homes sold by the host LLLCommunity, using funds supplied by the property owner per se. (Mr. ‘Captive Finance’ will be presenting at the Networking Roundtable! GFA)

Finally; there’s the old, albeit effective, practice of working with private investors to finance the acquisition of new homes and mortgaging thereof. Millions of private investor accounts, many with balances well over $100,000. actively search, online and off, for practical ways to beat today’s record low ROI opportunities, and the highly volatile stock market. This reality now includes IRA custodians, who routinely include manufactured housing ‘How To’ investing sessions during their annual conferences. (Want to attend one of these? Info available at Networking Roundtable! GFA)

There are even attractive chattel finance alternatives available – in California, when siting solar power energy equipped, highly energy efficient homes. There, LLLCommunity owners are offered a 50% financing purchase option, at low interest, by lenders who believe these specially – equipped, nearly ‘off power grid’ homes are a major WIN WIN for the property owner and the renter or home buyer; in large part, because of major utility cost savings. Last year’s Roundtable featured one of these specialty homes!

Bottom line for LLLCommunity owners/operators in need of chattel capital for new home purchases on – site and mortgaging of same? All is not gloom and doom in this investment arena; there’s more than one ray of bright light shining through to the MHIndustry and LLLCommunity asset class! Most of these ideas – and more, will be formal topics of discussion at the 18 – 20 September Networking Roundtable in Bloomingdale, IL; the Equity Trust annual meeting in Orlando during October; as well as SECO’s Third Annual Super Symposium in Forsyth, GA., 8 – 10 October. Ask, if you want more information….” *2

End Notes.

1. For those reading this blog posting, who’d like to learn more about the calculation of front end and back end debt – to – income (‘DTI’) ratios, read ‘Contemporary Archetype of Affordable Housing in the U.S.’, featured in the August issue of the Allen Letter professional journal, and or chapter six of the new book, The First 20 Years!. Both available from PMN Publishing via the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Sample Allen Letter is FREE, or one year subscription @ $134.95 (12 monthly issues). The book is $19.95.

2. SECO Super Symposium is a two day seminar and new home exhibit planned and hosted entirely by land lease lifestyle community owners/operators in the Southeast. Last year’s event attracted more than 150 attendees; more than that expected this year.

***

II.

And That’s Not All That’s Happening!

Here’s a taste of Three Things to On Their Way Now, & or Coming During, & After this Year’s 22nd annual International Networking Roundtable, 18 – 20 September, in Bloomingdale, IL.

* The cover letter and questionnaire, used to research, prepare, and publish the annual ALLEN REPORT, a.k.a. ‘Who’s Who Among Land Lease Lifestyle Community Portfolio Owners/operators Throughout North America!’ is ‘on its’ way’ to 500+/- known firms in the U.S. and Canada. If and when you receive the mailer, please complete it and return to, via FAX (317/346-7158), on or before 30 September 2013 – coincidentally, the date of MHI’s NCC meeting in Carlsbad, CA. The 25th anniversary edition of the annual ALLEN REPORT will be distributed as a lagniappe (FREE) in the January 2014 issue of the Allen Letter professional journal. Otherwise, the retail price of the ALLEN REPORT is $500.00/copy. So, if not presently an Allen Letter subscriber, phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 to subscribe @ $134.95/year (12 monthly issues). Being the 25th anniversary year of the ALLEN REPORT, a very special edition is being planned. As a LLLCommunity owner/operators, you will surely want to have a copy to refer to regularly throughout the year 2014 and beyond.

* The Dawning of a NEW ERA, is something more and more land lease lifestyle community owners/operators talk about openly these days. Hard to say when ‘that talk’ began; but in my opinion, it was as far back as 27 February 2008, at the first National State of the Asset Class (‘NSAC’) caucus, held on – site at FountainView LLLCommunity on the west side of Tampa, FL. There and then, more than 100 businessmen and women gathered to collectively plan the future of their realty asset class, agreeing on a Five Point Plan, later elaborated upon at a Networking Roundtable, by Randy Rowe, founder and chairman of Green Courte Partners/American Landlease. To date, no other national forum, with more than 100 LLLCommunity owners/operators in attendance, has provided a like opportunity!

NEW ERA ‘talk’ took on some urgency, a couple years later, when I publicly announced, via the Allen Letter professional journal, plans to retire. The question became: WHO will take on the statistical Research, online and print Communication (weekly blog & two monthly newsletters), peer Networking (annual roundtables & periodic FOCUS Groups), as well as professional Property Management training & certification (via Manufactured Housing Manager® or MHM®) program responsibilities, and hosting of realty deal – making opportunities for land lease lifestyle community owners/operators, large and small, nationwide?

An early attempt to sell some or all these research, communication, networking, and training resources to a national advocacy body failed. And, to date, there’s been little success in identifying individuals with appropriate writing and verbal communication skills, underscored by industry and asset class experience (preferably with ownership cred), and high motivation – no, PASSION, for advancing the cause of affordable housing via manufactured housing and the land lease lifestyle community realty asset class! For that matter, if YOU, or someone you know, characterizes the three point SUCCESS formula of that entrepreneurial job description, let me know ASAP via the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. We are making progress….

NEW ERA talk continues among small to mid – sized LLLCommunity owners/operators nationwide, and may even – though not planned for or scheduled to happen, ‘come to a head’ during, and or immediately following, the NCC meeting, in Carlsbad, CA., on 3 September 2013.

HOW SO? Well, that depends, to large degree, on two groups of land lease lifestyle community owners/operators, and how they decide, with or without my participation – as an elected leader – or not, to implement the following ‘platform’ description of what 50,000+/- LLLCommunities, large and small and nationwide, should expect from a…

‘NEW ERA for land lease lifestyle communities, characterized by these seven functions:

1) effective national political and regulatory matters – related ADVOCACY;

2) ongoing operations statistical RESEARCH & reporting, e.g. annual ALLEN REPORT, RE lenders’ registry, etc.);

3) routine & timely print & online COMMUNICATION via a weekly blog posting & monthly subscriber – supported newsletters;

4) widespread RESOURCE distribution (e.g. Helpful How To Info, various directories, a trade term glossary, & ongoing documented history of the asset class);

5) superb peer NETWORKING at annual Roundtables & Forums, and periodic FOCUS Groups;

6) realty deal – making opportunities;

7) professional property management training & certification, via MHM® & ACM® programs, for properties of all sizes!’

With that said, what groups of land lease lifestyle community owners/operators influence when and how this NEW ERA will emerge?

80+/- direct, dues – paying members of MHI’s National Communities Council (‘NCC’) division, and

36+/- LLLCommunity owners who’ve offered advice and supported the concept of a NEW ERA these past couple years – even though the movement didn’t have a formal name.

So, if YOU own one or more LLLCommunities, and want to influence and bring about an exciting NEW ERA for our unique, income – producing property type – OR express your personal and corporate satisfaction with the present day status quo,

Consider becoming a direct, dues – paying member of MHI’s NCC, by phoning (703) 558-0666 and get involved, by attending NCC meetings in February and June 2014

And or

Phoning the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764, to express your support, and desire to participate during the months ahead.

* Watch your upcoming issues of the Allen CONFIDENTIAL! And Allen Letter professional journal business newsletters for a NEW Signature Series Resource Document, to join the dozen already in place (Think annual ALLEN REPORT, & RE Lenders Registry, and 10 other SSRDs). This one is untitled, but will contain all pre & post HUD annual new home shipment totals, with the latter years tagged in accords with ‘what happened’ that year; which HUD – Code home manufacturers garner more than 80% national market share of manufactured housing; and a brief history of LLLCommunity consolidation, from 1975 to the present day.

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

Blog # 262 Copyright 2013 8September 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!

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

I.

What’s the $$$ Buzz About?

Networking Roundtable Set to Celebrate 20 years Camaraderie; ‘Splain’ all ‘bout Chattel Capital Sourcing; Talk of a Private Equity Fund; Promote One’s Brand via Social Media; Examine Good & Bad Realty Deals; Talk to a Dozen+ RE Lenders; &, Learn to Use the ‘5RPs of Marketing’ in Three MH & LLLCommunity Scenarios….

But here today, we’ll focus only on Chattel Capital Sourcing! With permission, I’m quoting from recent email exchanges between one of the manufactured housing industry’s most respected state association executives, and a land lease lifestyle community owner/operator with two decades of hands – on experience, self – financing new and resale home transactions among his properties.

“Yes, ‘stupid money’, especially pertaining to chattel financing available to independent (street) MHRetailers, is likely (Let’s hope!) a thing of the past. However, low interest rates, fewer lending/investing alternatives, tighter credit, more banking regulations, and new willingness on the part of many LLLCommunity owners to truly WORK WITH lenders, appears to be why more (new) lenders are ‘sniffing around’ the manufactured housing industry today. (Some will be at the Networking Roundtable! GFA)

In the meantime, most independent third party chattel lenders (i.e. until recently known as the Big Four + One) or ‘A’ lenders, are apparently doing as much manufactured housing business as they have an appetite for, by focusing on borrowers whose minimum FICO scores are above 650 points. That singular criterion eliminates upwards of 90 percent of those interested in buying new manufactured homes in most all age land lease lifestyle communities! When processing applications for site rent, home rent, or lease – option contracts, LLLCommunity owners generally place more emphasis on front – end & back – end, debt – to – income (or DTI) ratios, employment factors, and rental or criminal histories.*1 In fact, for many LLLCommunity owners/operators, the sole use for FICO scores, is to determine if the applicant should be referred to an ‘A’ lender. (That’s a 180 degree reversal from 20 years ago! GFA)

Furthermore, and confirming the point made in the previous paragraph, severe attrition among independent (street) MHRetailers during the past ten years, and past severe chattel finance losses, suggest the present and future financing ‘play’, these days, may well lie with LLLCommunities, where lenders & property owners form symbiotic relationships, beneficial to all THREE parties involved in a MH finance transaction: the lender or source of capital, the community owner, and prospective homebuyer/mortgagor/site lessee.

To this end, new concepts are being floated to see what gets traction. For example, some involve the purchase of existing chattel notes, and other seller – finance vehicles (e.g. rental and lease – option contracts), and expectation the lender/buyer assumes all risk, citing outrageous cost of funds, @ 15 – 20% per year, to the LLLCommunity owner. Only those note sellers who’re desperate, or holding worthless paper, are likely to be interested; likely resulting, over time, in a potential lose – lose transaction for all involved. (One of several motivations sparking interest in launching a Private Equity Fund. Discussion scheduled at the Networking Roundtable. GFA)

The 21st Mortgage Corporation’s 1 ½ year old C.A.S.H. Program, and the novel in – house finance program offered by Legacy Homes (Texas) are good examples of mutually beneficial relationships much more acceptable to LLLCommunity owners. Both are relatively new and still being tweaked. Word ‘on the street’ is announcements are in the offing, citing significant improvements to both programs – maybe even at the upcoming Networking Roundtable.

Another, mutually beneficial concept being considered for possible rollout, involves a hybrid floor plan program, where floor plan financing routinely provided by a HUD – Code home manufacturer to a MHRetailer (In this case, a LLLCommunity selling homes on – site), is extended to the point when the newly sold home is occupied! This concept is especially appealing to those manufacturers with strong balance sheets, and who are comfortable with the profitability of conventional floor plan financing. (You will only learn about this alternative, at the Networking Roundtable. GFA)

Yet another interesting and recent development, involves new working relationships LLLCommunity owners are establishing with local banks, to fund the acquisition of new homes, and in some cases, effecting the origination and servicing of home mortgages on – site. Various combinations of recourse and underwriting criteria are assuring profitable returns to the lenders; isolation from S.A.F.E. Act licensing for LLLCommunity owners; and, attractive financing for the homebuyer/mortgagor/site lessee. And at least one effort is underway to establish this type ‘small bank’ program throughout an entire geographical region.

Captive finance. This typically refers to either an in – house finance program that originates and services home mortgages, or a separate lending business altogether from the LLLCommunity operation. Since such practices, in the first instance, are prohibited without S.A.F.E. Act licenses, in – house origination/servicing efforts are, or should be, practically non – existent. Other LLLCommunity operations opt for the second alternative. And there are LLLCommunity owners who effect captive finance programs, employing lease – option contracts in states where the use of such arrangements doesn’t require S.A.F.E. Act licenses. An interesting captive finance twist, that likely avoids S.A.F.E. Act licensure, is offered by a few chattel lenders who originate home mortgages, then sell them back to the LLLCommunity owners, while retaining the servicing of said mortgages. And one recent arrival on the third party independent chattel lender scene apparently originates home mortgages on homes sold by the host LLLCommunity, using funds supplied by the property owner per se. (Mr. ‘Captive Finance’ will be presenting at the Networking Roundtable! GFA)

Finally; there’s the old, albeit effective, practice of working with private investors to finance the acquisition of new homes and mortgaging thereof. Millions of private investor accounts, many with balances well over $100,000. actively search, online and off, for practical ways to beat today’s record low ROI opportunities, and the highly volatile stock market. This reality now includes IRA custodians, who routinely include manufactured housing ‘How To’ investing sessions during their annual conferences. (Want to attend one of these? Info available at Networking Roundtable! GFA)

There are even attractive chattel finance alternatives available – in California, when siting solar power energy equipped, highly energy efficient homes. There, LLLCommunity owners are offered a 50% financing purchase option, at low interest, by lenders who believe these specially – equipped, nearly ‘off power grid’ homes are a major WIN WIN for the property owner and the renter or home buyer; in large part, because of major utility cost savings. Last year’s Roundtable featured one of these specialty homes!

Bottom line for LLLCommunity owners/operators in need of chattel capital for new home purchases on – site and mortgaging of same? All is not gloom and doom in this investment arena; there’s more than one ray of bright light shining through to the MHIndustry and LLLCommunity asset class! Most of these ideas – and more, will be formal topics of discussion at the 18 – 20 September Networking Roundtable in Bloomingdale, IL; the Equity Trust annual meeting in Orlando during October; as well as SECO’s Third Annual Super Symposium in Forsyth, GA., 8 – 10 October. Ask, if you want more information….” *2

End Notes.

1. For those reading this blog posting, who’d like to learn more about the calculation of front end and back end debt – to – income (‘DTI’) ratios, read ‘Contemporary Archetype of Affordable Housing in the U.S.’, featured in the August issue of the Allen Letter professional journal, and or chapter six of the new book, The First 20 Years!. Both available from PMN Publishing via the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Sample Allen Letter is FREE, or one year subscription @ $134.95 (12 monthly issues). The book is $19.95.

2. SECO Super Symposium is a two day seminar and new home exhibit planned and hosted entirely by land lease lifestyle community owners/operators in the Southeast. Last year’s event attracted more than 150 attendees; more than that expected this year.

***

II.

And That’s Not All That’s Happening!

Here’s a taste of Three Things to On Their Way Now, & or Coming During, & After this Year’s 22nd annual International Networking Roundtable, 18 – 20 September, in Bloomingdale, IL.

* The cover letter and questionnaire, used to research, prepare, and publish the annual ALLEN REPORT, a.k.a. ‘Who’s Who Among Land Lease Lifestyle Community Portfolio Owners/operators Throughout North America!’ is ‘on its’ way’ to 500+/- known firms in the U.S. and Canada. If and when you receive the mailer, please complete it and return to, via FAX (317/346-7158), on or before 30 September 2013 – coincidentally, the date of MHI’s NCC meeting in Carlsbad, CA. The 25th anniversary edition of the annual ALLEN REPORT will be distributed as a lagniappe (FREE) in the January 2014 issue of the Allen Letter professional journal. Otherwise, the retail price of the ALLEN REPORT is $500.00/copy. So, if not presently an Allen Letter subscriber, phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 to subscribe @ $134.95/year (12 monthly issues). Being the 25th anniversary year of the ALLEN REPORT, a very special edition is being planned. As a LLLCommunity owner/operators, you will surely want to have a copy to refer to regularly throughout the year 2014 and beyond.

* The Dawning of a NEW ERA, is something more and more land lease lifestyle community owners/operators talk about openly these days. Hard to say when ‘that talk’ began; but in my opinion, it was as far back as 27 February 2008, at the first National State of the Asset Class (‘NSAC’) caucus, held on – site at FountainView LLLCommunity on the west side of Tampa, FL. There and then, more than 100 businessmen and women gathered to collectively plan the future of their realty asset class, agreeing on a Five Point Plan, later elaborated upon at a Networking Roundtable, by Randy Rowe, founder and chairman of Green Courte Partners/American Landlease. To date, no other national forum, with more than 100 LLLCommunity owners/operators in attendance, has provided a like opportunity!

NEW ERA ‘talk’ took on some urgency, a couple years later, when I publicly announced, via the Allen Letter professional journal, plans to retire. The question became: WHO will take on the statistical Research, online and print Communication (weekly blog & two monthly newsletters), peer Networking (annual roundtables & periodic FOCUS Groups), as well as professional Property Management training & certification (via Manufactured Housing Manager® or MHM®) program responsibilities, and hosting of realty deal – making opportunities for land lease lifestyle community owners/operators, large and small, nationwide?

An early attempt to sell some or all these research, communication, networking, and training resources to a national advocacy body failed. And, to date, there’s been little success in identifying individuals with appropriate writing and verbal communication skills, underscored by industry and asset class experience (preferably with ownership cred), and high motivation – no, PASSION, for advancing the cause of affordable housing via manufactured housing and the land lease lifestyle community realty asset class! For that matter, if YOU, or someone you know, characterizes the three point SUCCESS formula of that entrepreneurial job description, let me know ASAP via the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. We are making progress….

NEW ERA talk continues among small to mid – sized LLLCommunity owners/operators nationwide, and may even – though not planned for or scheduled to happen, ‘come to a head’ during, and or immediately following, the NCC meeting, in Carlsbad, CA., on 3 September 2013.

HOW SO? Well, that depends, to large degree, on two groups of land lease lifestyle community owners/operators, and how they decide, with or without my participation – as an elected leader – or not, to implement the following ‘platform’ description of what 50,000+/- LLLCommunities, large and small and nationwide, should expect from a…

‘NEW ERA for land lease lifestyle communities, characterized by these seven functions:

1) effective national political and regulatory matters – related ADVOCACY;

2) ongoing operations statistical RESEARCH & reporting, e.g. annual ALLEN REPORT, RE lenders’ registry, etc.);

3) routine & timely print & online COMMUNICATION via a weekly blog posting & monthly subscriber – supported newsletters;

4) widespread RESOURCE distribution (e.g. Helpful How To Info, various directories, a trade term glossary, & ongoing documented history of the asset class);

5) superb peer NETWORKING at annual Roundtables & Forums, and periodic FOCUS Groups;

6) realty deal – making opportunities;

7) professional property management training & certification, via MHM® & ACM® programs, for properties of all sizes!’

With that said, what groups of land lease lifestyle community owners/operators influence when and how this NEW ERA will emerge?

80+/- direct, dues – paying members of MHI’s National Communities Council (‘NCC’) division, and

36+/- LLLCommunity owners who’ve offered advice and supported the concept of a NEW ERA these past couple years – even though the movement didn’t have a formal name.

So, if YOU own one or more LLLCommunities, and want to influence and bring about an exciting NEW ERA for our unique, income – producing property type – OR express your personal and corporate satisfaction with the present day status quo,

Consider becoming a direct, dues – paying member of MHI’s NCC, by phoning (703) 558-0666 and get involved, by attending NCC meetings in February and June 2014

And or

Phoning the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764, to express your support, and desire to participate during the months ahead.

* Watch your upcoming issues of the Allen CONFIDENTIAL! And Allen Letter professional journal business newsletters for a NEW Signature Series Resource Document, to join the dozen already in place (Think annual ALLEN REPORT, & RE Lenders Registry, and 10 other SSRDs). This one is untitled, but will contain all pre & post HUD annual new home shipment totals, with the latter years tagged in accords with ‘what happened’ that year; which HUD – Code home manufacturers garner more than 80% national market share of manufactured housing; and a brief history of LLLCommunity consolidation, from 1975 to the present day.

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

Only 18 Days; & Growing Pains = Groaning Pains

Sunday, September 1st, 2013

Blog # 261 Copyright 2013 1 September 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.

Only 18 Days & Counting….

II.

When Growing Pains Become Groaning Pains

***

I.

Only 18 Days & Counting….

22nd annual International Networking Roundtable,
in Bloomingdale, IL. @ 18 – 20 2013

Here’s how this year’s only national educational, peer networking, and realty deal – making event, designed specifically for land lease lifestyle community owners/operators, is shaping up ‘two weeks out’:

• If you’re ‘in the market’ to acquire LLLCommunities, you’ll be present at Marcus & Millichap’s Investors’ Symposium on Wednesday afternoon. At least three other national real estate brokerages will be present and including their listings among the more than 50 being showcased between 4 & 6PM.

• Gala Reception Wednesday evening is sponsored by Wells Fargo Multi – Family Capital Group. Frankly, ‘anyone who’s anyone’ throughout the LLLCommunity real estate asset class will be present that evening, from 6 – 8PM. It’s a veritable smorgasbord of national leaders, freelance consultants, and legendary players.

• Thursday morning! There’s no more exciting a day than when the Roundtable event begins. At this time, everyone will receive a copy of Bruce Savage’s new book, The First 20 Years!, the most comprehensive list of industry contacts available anywhere in the industry/asset class, and more!

• What other trade event do you attend, during the course of the year and as a matter of course, gives every single person gathered, an opportunity to stand and introduce themselves to the entire audience? This is one of the most popular and enduring features of the annual Roundtable event.

• Since this year’s theme is ‘Celebrating 20 Years of Camaraderie!’, there’s no more fitting a keynote presenter than Gary McDaniel, founder and chairman of YES! Communities, out of Denver, CO. Gary, among his achievements is former chairman of MHI, and before that, of the National Communities Council division.

• The RV/MH Heritage Foundation’s Hall of Fame, Museum & Library will be featured during the second keynote presentation of the day. Most LLLCommunity owners/operators are unfamiliar with this guardian of our industry and asset class’ legacy in Elkhart, IN. This is our opportunity to learn, and to show our support!

• Following this exciting start to the festivities, there’ll be more than a dozen educational seminars and panels Thursday and Friday; covering everything from product branding, electrical code, types of RVs, ‘ROCs’, RE deals good & bad, social media, ‘5-RPs of Marketing’, small owners emphasis, platform purchasing, benchmark statistics, and more.

• Thursday afternoon there’ll be a two hour forum, led by LLLCommunity owners interested in exploring the idea of starting a Private Equity Fund, for the purpose of providing chattel capital to qualified LLLCommunity owners/operators

• Friday morning, following the ever – popular Real Estate Lenders Panel, there’ll be ‘the first ever’ summary of all the chattel capital programs in effect today, from the ‘Big Five + One’ firms to several home manufacturer partnership programs, to online crowd funding, and more.

• At this writing, there will be no HUD – Code homes on display. When I first asked around, I received a lukewarm reception – which surprised me. One would think these firms would jump at opportunities to exhibit Community Series Homes for LLLCommunity owners/operators to buy. Evidently not. Is it possible they’ve simply become complacent at shipping only 50 – 60,000 homes per year?

• Saving the Best for Last, is how participants oft describe the final hour of every Roundtable event. And this year will be no different, as we caucus in the main conference room to engage in discussion regarding industry issues, current trends, and whatever topics LLLCommunity owner/operator participants desire to parse.

Well, there you have it. No fewer than ten major reasons to make your way to Bloomingdale, IL., between 18 & 20 September, to participate in the only annual trade event designed exclusively for LLLCommunity owners/operators and their favorite lenders. For more information and or to register, visit community-investor.com or phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

Postscript. Here’s what a former chief executive of one of the ‘Big 3 C’ HUD – Code home manufacturers (i.e. Clayton, Champion, Cavco), and past MHI chairman penned last week about this year’s 22nd annual Networking Roundtable: “I have a scheduling conflict, so cannot attend even a portion (of the program). It is great you have continued these confabs over the decades! Maybe this is another reason (land lease lifestyle) communities are now the bulk of the remaining (manufactured housing) industry!! Keep up the Good work. Best.”

II.

When Growing Pains Become Groaning Pains

The Historic Love – Hate Relationship Between Independent (street) MHRetailers and Land Lease Lifestyle Community (a.k.a. manufactured home community) Owners/operators is Renewing in Certain Local Housing Markets Across the U.S.

Amidst little fanfare, and even less recognition after the fact, a heterogeneous group of two dozen MHRetailers and LLLCommunity owners/operators gathered, at the invitation of Rainmaker Associates Bill, Judy & Chad Carr, in downtown Chicago, to explore past, present, and probable future interrelationships between these two distinct segments of the HUD – Code manufactured housing industry.

One result of this two day meeting was the drafting and circulation of a formal White Paper titled: ‘Street Retailer & Community Sales Centers’. Specific contributors to said White Paper included the Carrs, Dick Moore of TN, Ken Rishel of IL, Jim Reitzner, MHM® of WI, Greg Harmon, MHM® of OR, and yours truly.

And as opening paragraphs in the White Paper clearly indicate: In the past, “MHRetailers & LLLCommunities…have needed and worked with each other, to varying degrees of success.” However, (they) “…seem to be more at odds today, than ever before.”

The White Paper, in general terms, described the evolution, from ‘infill of vacant rental homesites in LLLCommunities by MHRetailers – during the 1970s & 1980s, to the late 1990s reality – when said retailers, for the most part, became general contractors. As such, they sold and sited ‘more homelike multisection manufactured homes’, a.k.a. ‘big box = big bucks’ units, as land/home packages, head – to – head against site or stick builders working developed ground conveyed fee simple. In effect, MHRetailers abandoned their traditional infill roll with LLLCommunities. And at first, this didn’t matter much, as the average physical occupancy, among LLLCommunities, hovered in the 95% range between 1995 the turn of the century.

When the annual new HUD – Code home shipment rate hit 372,843 units in 1998, another phenomenon began: the conversion of independent (street) MHRetailers into ‘company stores’ via expensive buyout. These previously independent businesses now were managed by salaried staff. This change squelched heretofore entrepreneurial business decision making, that shut off stock housing inventory glutting, when local housing markets were saturated. And anyone (reading this) who was around at the time, knows ‘the rest of the (sad) story’; that when new home markets became overstocked, qualified homebuyer caution was ignored, and in the end, we – as an industry – turned many (some say North of 250,000 deals) customers ‘upside down’ financially.

Well, during the next (almost) decade, roughly 2005 – 2015, the number of MHRetailers plummeted, according to MHI, from more than 1100 nationwide, to 400+/-. So where ‘many were lost’ to the land/home package misadventure; and many ‘independents’ became ‘company stores’; now even more closed their doors, as they were no longer able to secure chattel capital from the quickly shrinking independent chattel finance firms – who eventually became known as the ‘Big Four + One’, and recently, with the addition of Green Hill Financial to the mix, the ‘Big Five + One’.*1 And at the time, LLLCommunity owners/operators too played a role in this enronesque financial debacle, as many offered ‘rent free living’, for a period of time, to attract move – ins to fill, overall, tens of thousands of recently vacated rental homesites, whether they be new, ‘resale’ or ‘repo’ homes.

In a nod to the future, Bill Carr, freelance consultant to the MHRetail segment of the HUD – Code manufactured housing industry predicts the industry’s future will not see a return to 1100 salescenters, but rather a national market dominated by maybe 100 mega independent (street) MHRetailers who’re fully compliant with all state and federal financial regulations, and have relearned how to sell new HUD – Code and modular homes into land lease lifestyle communities, even compete successfully – in some local housing markets – with traditional site builders. But that is only part of the story….

All this (the previous paragraphs) brings us to the present day in MHRetailer/LLLCommunity owner/operators relations. Here’s what we’re hearing from across the U.S.

• From the LLLCommunity owner/operator: ‘MHRetailers have simply forgotten how to sell new HUD – Code homes into our properties! They don’t know us; they don’t know how to ‘sell’ us. My response? What have you, as owner/operator done, of late, to reacquaint local MHRetailers with your property? When was the last time you invited them on – site, say to judge a Home of the Month Contest, or simply to have lunch and ‘talk shop’ with them. Is your literature in full view at the salescenter? And as of 18 September, there’ll be a FREE new training aid available for you to give to them: ‘The 5 – RPs of Selling New HUD – Code Homes INTO LLLCommunities!’ *2 And that’s not all! For the first time in awhile, we’re hearing of disputes regarding protected or inviolable sales territories, granted MHRetailers by HUD – Code home manufacturers – even when said MHRetailer has never, say in a decade, sold a single home into the affected LLLCommunity or communities. Some might call this ‘restraint of trade.’

• From the independent (street) MHRetailer: ‘LLLCommunity owners/operators selling homes on – site ‘Kill & Steal Our Business’! How so? Well, believe it or not – if you haven’t heard this before, it’s not uncommon for property portfolio owners/operators to buy ‘quantities at a time’ of new, often Community Series Homes or CSH Models (Which is to say, smaller multisection or singlesection homes replete with durability – enhancing features. ‘Think about why…’*3), directly from the factory, then sell them at or near cost (minimum profit margin), to make ‘attractive deals’ to get homebuyers/site lessees to move in quickly and ‘Get the ol rent meter a – running again!’ No wonder local MHRetailers are reluctant to send otherwise ‘qualified prospects’ to nearby LLLCommunities to ‘pick out a vacant rental homesite’. They have every reason to believe the on – site sales team will hijack their customer, or the customer will get wind of the ‘better deal’ and switch MHRetailers. And that’s not all! For the first time in awhile, we’re hearing of LLLCommunities ‘closed’ to local MHRetailers; in effect, requiring would be homebuyers/site lessees, to buy their new (sometimes resale) home on – site, before leasing the rental homesite. Some might call this ‘restraint of trade’.

Point in all this? Are the business practices just described a preliminary sign of the manufactured housing industry’s long – awaited recovery? Or perhaps they’re some of the very practices that continue to dog the industry and its’ landlease real estate component; in effect, helping keep us – along with the difficulty in qualifying for chattel capital, at 50,000 – 60,000 new HUD – Code homes shipped each year, when we should be climbing back to the generally acclaimed sustainable shipment level of 250,000 new HUD Code homes per year. What do YOU think about this matter?

***

End Notes:

1. Big Four + One = 21st Mortgage Corporation, CU Factory – built Housing, Triad Financial Services, U.S. Bank – Manufactured Housing Finance, and (Clayton’s in – house) Vanderbilt Mortgage and Finance – and here some would now add (Cavco’s in – house) Countryplace Mortgage, as well as Legacy Home’s in – house lending arm.

2. ‘5-RPs of Marketing’ plastic 3”X 5” wallet cards! There’re two cards, based on the 5 – Ps of Marketing: Right Product, Right Place, Right Price, Right Promotion, Right People! One is designed for HUD – Code manufacturer and independent (street) MHRetailer use, and one for the on – site LLLCommunity salescenter – selling new and resale homes and leasing vacant rental homesites. To request one or both cards, phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. And while you’re at it, ask yourself: ‘Who Else in the MHIndustry Makes Material Like This Available to Me?’ Don’t call for the card until after 18 September – when they’ll be distributed for the first time, to attendees at the 22nd annual Networking Roundtable in Bloomingdale, IL.

3. ‘Durability – enhancing features’ = plywood vs. particleboard, solid wood cabinets, panel floors vs. carpeting, and more. Most new homes purchased by LLLCommunity owners/operators today, will be used as rental units or contract sale homes. In either event, the expectation – rightly or wrongly – is the home will ‘turn’ from time to time – and the longer time span the better. But there’s more money to be saved ‘up front’, by toughening up the home when manufactured, than to incur the same (e.g. recarpeting) expenses over and over and over again. For a FREE list of Community Series Home features, and the Business Development Managers that sell them, request said list when phoning the above – referenced Official MHIndustry HOTLINE.

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