MH ‘qualaiaty & price’; redux or new paradigm?

Blog # 219 Copyright 2012 11 November 2012

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

I.

Talking to One Another About Ourselves & Our Business Model..

II.

‘Selling New Homes’ at 2013 MHCongress in Las Vegas in April!

III.

More on ‘that book’ I’ve Been Telling You About for Weeks….

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I.

Talking to One Another About Ourselves & Our Business Model..

“Bottom line. You can’t sell (manufactured) housing for half price without a fair bit of compromise. Increase your (home sale) price ten percent and you’re toast. It’s competition that brings prices down, and it’s price that moves the goods. The magic of manufactured housing has long been, and apparently still is, the ability to build decent housing at costs nobody else can touch, and make good profits along the way. Invest every nickel of profit in upgrading the product, and you gain a five percent advantage. But of course, you go out of business. It’s a brutal world out there George. We have to find a way to improve the quality of our golden eggs without killing the goose!” RV (Lightly edited. GFA)

There’s a significant measure of truth in the previous paragraph. To this day, it boggles my mind, when walking into an attractive, brand new HUD – Code manufactured home, to experience the eclectic right mix of ‘bells & whistles’, e.g. laminated flooring instead of carpeting in some rooms; heavy gauge recessed flap hinges on all doors, instead of thin gauge surface hinges; and more. But then, to observe dozens of cheap white plastic switch and outlet covers at every light switch and electric outlet in the house; and doors hung ‘inches off the floor’ to facilitate return air flow to the heater/air conditioner, rather than enhancing privacy via installation of air vents near the bottom of passage doors hung nearly flush with the floor; and more.

Is there an answer to this perennial quality – price conundrum? I think so, and not; the answer being in the form of this question: ‘When was the last time you heard or saw HUD – Code home manufacturers caucus and cooperate with one another to this end?’ Answer: Almost never. Why? Competition. Oh, innovative ideas have been tried ‘over the years’ (Think back to aluminum wiring, culturally sensitive exterior designs for urban infill, etc.), but we still lack the will to meet and work together towards a common solution – with one notable exception, the National State of the Asset Class (‘NSAC’) caucus, 27 February 2009 in Elkhart, IN. That was when 100 reps from the manufacturing and land lease lifestyle community segments of the manufactured housing industry caucused to figure out ‘How to Sell More New Manufactured Homes into Land Lease Lifestyle Communities?!’ Results? The Community Series Homes, or CSH Models, relatively common today, with many featuring front end loaded porches, and durability – enhancing features needed to ensure habitability over an extended period of time. Perhaps now it’s time, once again, for HUD – Code home businessmen and women to look past their competitive nature, to solve the quality – price golden egg conundrum, without killing the goose that manufacturers them!

So, here’re two Questions of the Hour, Day, Month and for the Year 2013: If YOU agree there should be a soon national caucus, call it a MHInitiative® *1, to address this perennial, and as yet unsolved, manufactured housing industry conundrum, WHO should and will step forward to lead, plan, organize, and facilitate this timely, strategic effort in behalf of HUD – Code home manufacturers nationwide? I’ll be pleased to help if asked; but rather than being the catalyst and meeting planner this time around, the organizing and executing of such a MHInitiative® should rightly come from the manufacturing segment of the manufactured housing industry! And know what? There isn’t a more appropriate time and opportunity for elected and salaried leaders of MHI and MHARR to come together, for the good of the entire industry, than auspicious occasion!

Now, let’s wait to hear and see what happens, or doesn’t happen regarding this challenge, between now – mid November, and the end of year 2012. This could be the HUD – Code manufactured housing industry’s 60 year bellwhether event! *2

End Notes:

1. MHInitiative® is the term that’s replaced National State of the Asset Class (‘NSAC’) caucus, used to effectively in Tampa, FL., @ 2/27/2008, and a year later in Elkhart, IN., @ 2/27/2009. A hint, for anyone who’s read this challenge thus far; 2/27/2013 might be a possibility, as MHI’s annual Legislative Conference, in Arlington, VA., ends, and just before the Great Southwestern Manufactured Housing Show begins in Tulsa, OK. Or, the MHInitiative® might be an appropriate sidebar event to the 2013 Manufactured Housing Congress in Las Vegas, 16 – 18 April.
2. Bellwhether ‘a person or thing that assumes leadership., a person or thing that indicates a trend.’ And does the manufactured housing industry need a unifying bellwhether leader and bellwhether trend at this point in its’ history!

II.

‘Selling More Homes’ at 2013 MHCongress in Las Vegas, NV.

Switching our focus to market research. Here’s what another industry observer has to say about that subject and manufactured housing. “The vehicle industry, from which our industry evolved, spends multiple millions (of dollars) researching who their potential customers are, and what it will take to make them customers, while manufactured housing spends almost nothing; relying instead on borrowed site – built housing research and gut instinct. What is wrong with our industry, that this basic (research) function goes unmet? George Allen is the closest we have to a research arm, with his community – oriented publications, and ongoing efforts to get an Ivy League university actively and permanently involved in (‘teaching us how to effect and share’) manufactured housing and land lease lifestyle community market research.” KR (Again, lightly edited. GFA)

As mentioned in the last paragraph of Part I of this blog posting, ‘How to Sell More New Manufactured Homes into Land Lease Lifestyle Communities?!’ will be a primary focus during year 2013. Yes, it’s early in the (business) game – like five months early, to be writing and talking about one of the key topics to be covered at the Manufactured Housing Institute’s annual Manufactured Housing Congress in Las Vegas, 16 – 18 April. But guess what; it’s going to take those five months to get this alert out, and the training material prepared, for HUD Code home manufacturers and land lease lifestyle community owners/operators wanting to cultivate this emerging market. It’s simply a shame though, that MH – focused ‘market research’ is not an integral part of our industry’s package – yet.

So, here’s where the matter stands today, and what’s expected to materialize during the next five months, as the MHCongress approaches. During August, a blog posting, at this web site, introduced a Ten Point Plan to help HUD – Code home manufacturers ‘Sell More New Manufactured Homes into Land Lease Lifestyle Communities!’ Since then, copies of the Ten Point Plan have been mailed to every HUD Code home manufacturer in the U.S., and it was published in the September issue of the Allen Letter professional journal. This same Ten Point Plan will serve as the core of the program being prepared for public presentation at MHI’s annual MHCongress in Las Vegas.

In the meantime, it’s hoped at least one HUD – Code home manufacturer takes ‘point number ten’ seriously, to wit: #10. ‘Want to corner the on – site new home sales in land lease lifestyle community market? Research, write, publish and distribute, for a price or for free, the MHIndustry’s first HOW TO guidebook on this subject! Seriously. No one has done so to date. Be the first to do so, and watch LLLCommunity folk beat a path to your plant door, when you teach them how to properly select, fairly price, skillfully market, and effectively sell ‘your homes’ on – site at their properties!’ I’ve personally challenged Business Development Managers, or BDMs, at each of the Big Three ‘C’ manufactured housing firms (Clatyon, Cavco, & Champion) TO DO SO, but still await a manuscript! Even volunteered to provide all the self – publishing services (e.g. editing, printing, binding, distribution) needed, to pull this project off successfully. Anyone listening out there?

Proof of the validity of this #10 point? 25 years ago, I authored and self – published Mobile Home Park Management. Today, with tens of thousands of copies sold, it’s been retitled twice, and now is Land Lease Lifestyle Community Management. In its’ eighth edition, this is the core textbook for the Manufactured Housing Manager® or MHM® professional property management certification program.*3 And know what? The same could well be the case now – and 25 years from now, for whoever pens and publishes the first and best ‘How to Sell More New Manufactured Homes into Land Lease Lifestyle Communities!’ guide or text. I’m not qualified to author it or I would….

Bottom line? See YOU in Las Vegas at the MHCongress, when we will learn together, ‘How to Sell More New Manufactured Homes into Land Lease Lifestyle Communities!’

End Note.

1. To order a copy of Land Lease Lifestyle Community Management, phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. If interested, also ask for information on the Manufactured Housing Manager® or MHM® program. A one day class is scheduled in Tulsa, OK., during late August 2013.

III.

More on ‘that book’ I’ve Been Telling You About for Weeks….

As you’re reading this weekly blog posting at community-investor.com, know that author Bob Vahsholtz is diligently working, somewhere in the U.S., diligently researching, carefully compiling, and skillfully writing the first definitive book on factory – built housing in general, manufactured and modular housing in particular. When this tome is completed, hopefully during 2013, it’ll be the first such book in more than two decades!

In the meantime, if after reading the following list of chapter headings and subtopics, you’d like to provide input, in the way of ideas, suggestions, material, etc., to the author, send it to me via GFA c/o Box # 47024, Indianapolis, IN. 46247 or FAX it to (317) 346-7158. Any questions, contact me via the aforementioned MHIndustry HOTLINE.

Here’re the chapter headings and subtopics Bob V is working with at this time:

1. There’s Always a Better Way. Stick – built housing, the ailing beast? America, the nation of shortcuts to success, and more….

2. Leadership & Innovation. The risks of pioneering. Introducing Richardson’s.

3. Introduction to the Learning Curve. Theory; how it works in the real world. Classic example of the Model T Ford.

4. Niche Markets, the Way into the Battle. Using Detroit as an example; introduction to Midget Motors.

5. The Biggest Market in the World; Housing. Size of the challenge? And bureaucracy, the ultimate stranger (or maybe ‘strangler’) of progress.

6. Big Guns Step into the Fray. An introduction to Sears, Levitt, National Homes, and Lustron.

7. The Elephant in the Room. Code challenges to innovation, barrier of cultural momentum, and more….

8. Manufacturers Climb the Blind Side. Origins of the MHIndustry; the story of Schult Homes.

9. The Support System. Suppliers, dealers (Wish he’s say MHRetailers), parks (Wish he’d say communities), lots (Wish he’d say rental homesites or sites), and installation ‘foundations’, the origin of the industry’s stigma?

10. How to Cut Housing Cost in Half. Fundamentals of MH efficiency, comparison with stick – building costs, matters of quality and more….

11. Leadership & Management. Art Decio builds a learning curve; the Skyline experience.

12. Managing in Troubled Times. Think Gold Seal, ANSI, and early codes; then the HUD code, along with government ambiguity.

13. How Much Can One Leader Do? Norcom & Canada; federal industries, and more

14. Manufactured Housing Hits the Wall. Who’s in charge of MH strategy? Lack of overview. Role of government, MH & long term finance. Land Lease Lifestyle Communities, a financing niche.

15. A Way Through the Woods? The Clayton story, park models, mobes redux, sectionals, etc. The Cavco story.

16. Getting Serious about the Opportunities Ahead. Riding a focused learning curve; risks vs. gambles – and a big difference. Role of team building….

Well, there you have it. Your advance peek at a text that will describe and parse parts and much of your business livelihood. David Funk, MHM, and I are working closely with Bob V, introducing him to key personages and firms throughout the manufactured housing business. Feel free to contact either of us if you have questions and comments.

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George Allen, CPM®Emeritus, MHM®Master
Box # 47024, Indianapolis, In. 46247
(3170 346-7156 or gfa7156@aol.com

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