Manufactured Housings 2010 Triumvirate

MANUFACTURED HOUSING’S 2010 TRIUMVIRATE

Housing Production & Sales, the Trade Press, & Landlease Communities

Preparing a weekly blog affirms a pithy observation by Maya Lin, designer of the Vietnam Veterans Memorial WALL in Washington, DC:

“Sometimes I think creativity is magic, it’s not a matter of finding an idea,
but allowing the idea to find you.”

This posting is a convergence of events from the MHCongress two weeks ago, recent conversations with MHIndustry peers, and knowledge of upcoming trade events. And, if you read through to the end of this blog, I’ll share ‘A Personal Reflection Upon My First Visit to the Vietnam Veterans Memorial’.

I.

Housing Production & Sales. Earlier this year (2010), I outed what many in the manufactured housing had been quietly discussing, but not addressing publicly. It had to do with whether the MHIndustry is indeed the target of a Grand Conspiracy, planned and orchestrated by one or more quarters within and about the housing business; or simply, the hapless victim of a Near Perfect Storm brought about by discordant events and disparate happenstances. While the answer to that question remains unanswered, it’s widely agreed, given continued unchecked year to year shipment declines of late (i.e. by dint of continued paucity of third party chattel financing of new and resale home sales transactions), we could see as few as 250 new HUD Code homes manufactured and shipped during year 2020! (I hope this is proven wrong!) But it was confirming to hear MHI’s recent past board chairman, now retired, Barry McCabe make reference to this Grand Conspiracy & Near Perfect Storm scenario within his opening address to the 5th annual National Communities Council FORUM in Las Vegas two weeks ago.

Where’s all this going to date? Nearly nowhere. MHI and HUD continue to endure internal personnel shakeups and reorganization; housing factories have retrenched to handle their lowest production levels in half a century; and, with these same manufacturers not siting more new HUD Code homes in landlease (nee manufactured home) communities, property owners/operators are looking elsewhere for affordable, compatible housing alternatives, e.g. small modular units, 400 square foot ‘park models’, RVs for a season, even stick – built homes constructed on – site to look like manufactured homes. No wonder a retired MH executive recently opined: “Guess the tradition of the egocentric manufacturer continues.”

The only hints, and that’s all there’ve been to date, of genuine concern for the future of the MHIndustry, have been too few quiet inquiries as to possibility of a third NSAC caucus among just HUD Code home manufacturers. This relates to the National State of the Asset Class caucus conducted 2/27/08 in Tampa, FL., among LLCommunity owners/operators only; and, the NSAC caucus – sponsored Historic SUMMIT Meeting, 2/27/09 in Elkhart, IN., that brought MHIndustry manufacturers and LLCommunity folk together, productively, for the first time in decades! NOW some believe, and I agree, answers to our industry/asset class survival dilemma might only be realized in a closed door session among the relatively few stakeholders still active in the MHBusiness. It’s even been suggested, by members of both national advocacy bodies, for such a meeting to be successful, it’d have to be conducted sans association/institute staff. What do you think? Should there be a third NSAC type caucus? (317) 346-7156.

Did you know?! On 2 June 2010, an historic Manufactured Housing Finance Roundtable will occur in Elkhart, IN! Hosted by Congressman Joe Donnelly, with special guest David H. Stevens, Assistant Secretary for Housing & Commissioner of the FHA at HUD, they’ll meet with MHIndustry leaders and financiers, to identify sources of chattel (personal property) financing for the HUD Code manufactured housing industry. Follow this blog for a firsthand account when the time arrives….

II

The Trade Press. Speaking of the trade press, do you realize how depleted one industry resource (print media) has become, and how superabundant (online media) another has grown?

During 2009, we saw the demise of MHI’s Modern Home magazine and venerable Manufactured Home Merchandiser. So far this year, 2010, we’ve seen Automated Builder and Upwardly Mobile magazines cease printing monthly and quarterly issues, and go 100% online.

At present, three healthy print publications serve the information and news needs of the MHIndustry and LLCommunity asset class; supplemented by roughly seven online ezines, newsletters and this blog; plus, a plethora of websites claiming affinity with every possible aspect of, as they put it, ‘mobile homes’ and ‘mobile home parks’. Frankly, I find it unfortunate and incongruent for ‘cutting edge’ modern technology – enabled communication to be victimized by individuals opting for vestigial and stereotype perpetuating, rather than contemporary and image – enhancing, trade terminology. Chalk that up to stupid, albeit free, speech online!

OK, so who’re the Official Manufactured Housing PRINT MEDIA Resources these days? In alphabetical order, the Allen Letter professional journal @ $134.95/year via (317) 346-7156; the Journal = ‘free’ to MHIndustry aficionados via (706) 655-2333; and the Allen CONFIDENTIAL! business newsletter @ $950/year, or only $750/year with an Allen Letter professional journal subscription, via same phone number cited earlier.

Official Manufactured Housing ONLINE MEDIA Resources? Automated Builder via (805) 642-9735; Chattel Finance Newsletter via (217) 971-3968; Community Connections newsletter for NCC members via (703) 558-0678; INDUSTRY PERSPECTIVES (MHRetailers) via (901) 872-4446; Manufactured Home marketing Sales Management via (847) 730-3692; this Official Blog for MHIndustry & LLCommunity Asset Class! via (317) 346-7156; and The Grissim Report @ $150 – 300/year, via (360) 683-1458. Then, of course, there are the manufactured housing – related websites.

If you’d like a copy of the two – sided, single page comprehensive directory of the above print and online media resources, as well as the MHWebsites, subscribe to the Allen Letter professional journal! The new Official Directory of All Print & Online Media Resources & Websites, will be included as a lagniappe (‘freebie’) with May 2010 issue of the newsletter. FYI; unique monthly enclosures with every issue of this newsletter, including the 21st annual ALLEN REPORT in January; List of HUD Code Business Development Managers or BDMs in February; annual RE Lender’s Registry in March; and, annual ‘Who Ya Gonna Call in 2010?’ list of freelance consultants in April. How can you afford not to be on the receiving end of such timely and helpful news and information month after month? That’s probably why paid subscriptions, to the Allen Letter professional journal are up 25 percent in 2010! (317) 346-7156.

When the Illinois Manufactured Housing Association (‘IMHA’) hosts it’s annual meeting in Springfield, IL., on 28 & 29 April, representatives from at least five of the aforementioned PRINT and ONLINE publications will be present to discuss the future of the MHIndustry & LLCommunity asset class’ trade press! Who knows, maybe as was attempted – but failed, nearly 20 years ago, we’ll see a trade press consortium rise from the ashes of failed publications, to ensure even better newsgathering and purveying to you during months and years to come! If you’ve a strong and abiding interest in MHTrade journalism, plan to be present at 3PM, the afternoon of 4/28. To register for the IMHA event, phone (217) 528-3423. Let me know of your interest and or plans to participate in the trade press conversation.

III.

Landlease Communities. Following are ‘not so random thoughts’ about our asset class’ heritage, ongoing intrinsic value, and somewhat uncertain future. Recently, I was asked by a major national real estate valuation franchise to identify significant emphasis areas, relative to landlease communities, deserving in depth attention at some point in the future. Here’s what I described to them…

Heritage. How and why has the moniker or label for this unique income – producing property type evolved from trailer camp (1960s) to mobile home park (1970s), to mobile home community (1980s), to manufactured home community (1990s) – though some would say manufactured housing community; to now, landlease community (2010 & beyond). Think about it. What do YOU call or how do YOU refer to this investment property alternative? By now, you should know why many of us opt for the landlease community label, i.e. no fewer than six different types of factory – built housing are routinely cited in the typical LLCommunity; no longer just pre & post – HUD manufactured homes!. If you don’t know what these six housing types are, scroll back through the archives at this blog site.

Ongoing intrinsic value; or why it’s almost always a ‘seller’s market’ where well – managed landlease communities are concerned. Do you know the drill? Goes like this: scarcity (hard to get new ones zoned and developed, thanks to NIMBY, her sister LULU, and fruity brother BANANA! See past blogs for acronym explanations); low annual turnover of homes and residents (e.g. 5 & 10 percent respectively, compared with conventional apartments at 60%+/-); low operating expense ratio(s) or OER @ 40 percent national average (again, compared with conventional apartments at 55%+/-); max opportunities for AITR (Alternative Income to Rent) on – site; and, ability to add value (e.g. either site& rent ‘repo’ homes, and or sell & self – finance new & resale homes on – site). The last of the five points is segregated from AITR, since it’s a specialty application, usually set up as a separate, if not independent, profit center.

Coincidentally, the now decade long penchant for on – site, sales and self – financing of new and resale homes has spawned three new sets of trade terminology and trends: Business Development Managers or BDMs who market new HUD Code homes to LLCommunity owners/operators; Community Series Homes or CSH, describes specially designed and equipped homes for LLCommunity siting; and, the Super Symposium & Showcase of Homes…usually a state MHAssociation planned and hosted two day program of seminars teaching LLCommunity folk how to sell and self – finance on – site, with opportunity to tour and buy new CSH homes on display at the event.

Somewhat uncertain future. Succinctly put: ‘Will chattel (personal property) financing return anytime soon to the HUD Code MHIndustry and LLCommunity asset class?’ The answer to that question, along with this one: ‘What will be the near and long term effects of the federal S.A.F.E. Act (Safe And Fair Enforcement of Mortgage Licensing), once implemented at the sate level – along with other impending financial regulatory measures, have on the industry and asset class?’ will either dispel or increase uncertainty for the two sister Business Models!

One of the first attempts to bring ‘rhyme & reason’ to this uncertain milieu of chattel finance, relative to LLCommunity operations (i.e. especially on – site sales & self – finance practices) has been recent publication of the Manufactured Housing Finance Primer, edited by this blogger, but containing definitive writings by no fewer than 24 MHIndustry & LLCommunity $$$ experts! Subtitled: ‘Almost everything you’ve wanted & needed to know about manufactured housing finance but didn’t know who to ask!’, it includes the MHIndustry’s Official Lexicon (dictionary), lists of sources for home finance, and much much more! How popular has it been since released two weeks ago? More than 100 copies were sold at the MHCongress, and mail orders have been brisk to date. Available for $29.95 (postpaid) via this blog website, or phoning the MHIndustry HOTLINE: (877) MFD – HSNG or 633-4764.

If you’re actively involved in selling and self – financing new and resale homes on – site in one or more LLCommunities, consider availing yourself of one or another of the training and consulting resources helping owners/operators and MHRetailers ensure their ‘paper’ is compliant with existent regulations; how to effectively set – up on – site operations to support this activity; and or use outside resources. These resources and matters are covered in the aforementioned book. However, also know there’s a Captive Finance Workshop scheduled for 18 & 19 May 2010 in Dallas, TX. For general information, and to register, telephone (217) 971-3968.

*****

This concludes the review of Housing Production & Sales, the Trade Press, & Landlease Community contemporary challenges, and what’s in store for the immediate future, even out to year 2020.
*****

As promised, here’s ‘A Personal Reflection Upon My First Visit to the VIETNAM VETERANS MEMORIAL Wall’ on July 15th, 1984.

Damn black wall!
Why do I cry so before you?
I’m alive – ‘Thank God’ for that
But what of these friends I knew?

Many years have passed
But now – ‘I’m really there again’
With the same strong emotions
And memories flooding back again…

‘God, I hate to cry!’
But that’s all I’ve done today
Out of gratitude – grief – and pride
For these my comrades, where’er they lie.

Damn black wall!
But I’m oh so glad you’re there…

GFA, Jr.
*****

George Allen, Realtor®, CPM®, MHM; Consultant to the Factory – built Housing Industry; Box # 47024 Indianapolis, IN. 46247 (317) 346-7156

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