Archive for the ‘Uncategorized’ Category

MHs Mixed Bag of ‘#s & $s’; Rick Robinson’s new gig 7& new book!

Thursday, December 5th, 2019

December 2019; www.educatemhc.com

Perspective. ‘Land lease communities, previously manufactured home communities, and earlier, ‘mobile home parks’, comprise the real estate component of manufactured housing.’

This blog is the online national advocate, official ombudsman, asset class historian, researcher, education resource & communication media for land lease communities in North America!

To input this blog &/or affiliate with EducateMHC, telephone Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Also email: gfa7156@aol.com, & visit www.educatemh;c.com

Motto: ‘U Support US & WE Serve U!” Goal: promote HUD-Code manufactured housing & land lease communities as U.S. source of affordable attainable housing! Next MHM class: 1/14/2020

INTRODUCTION: As an industry that ‘keeps score’ by tracking new home shipment volume, rather than new home sales, we are slipping backwards, and hardly anyone seems to notice! Read Part I here. And Part II? Read how one of the most popular executives at MHI, during recent years, and who’s since gone elsewhere –might be embarking on a new job adventure every bit as exciting as the thrillers he authors! Part III? Our way at EducateMHC to let you know of the many practical resources available via www.educatemhc.com

I.

Mixed Bag of Manufactured Housing Production Volume & Value, and Finance

Last week’s blog posting (#562) began with this observation from Listening Session # 1 in St. Louis, MO:

“Fannie Mae & Freddie Mac are frustrated and disappointed with the too few ‘new type’ HUD-Code manufactured homes (Now, CrossMod® homes according to MHI) financed via their respective MHAdvantage & CHOICEHomes programs to date.”

This was followed with a request by James Gray of the FHFA, for readers of this blog to recommend, ‘How to generate more consumer interest in these two real estate-secured finance products for manufactured homes?’

Well, readers responded. This from a middle level executive at one of our HUD-Code housing manufacturers:

“Why (did it take) 11 months for the first MHAdvantage home in Texas to be sold? Along with a new type of homes comes a new class of home seller – The Developer. Their projects don’t develop quickly. So, not many MHAdvantage or CHOICEHomes are coming out of the ground yet.”

Point made and taken. There’s a cautionary message here as well – supported by a 20 year old memory dating back to the day when these ‘big box = big bucks’ Developer Series homes were all the rage (Recalling 372,943+/- new HUD-Code homes shipped during year 1998!). The Achilles’ heel then, were independent (street) MHRetailers who wrongly marketed themselves as developer/contractors. Not. Their lack of contracting expertise, and resulting installation shortfalls, pretty much doomed that brief second renascence for the manufactured housing industry. Corollary point? Let’s not repeat the same industrywide mistake! Ensure our developers and installers KNOW what they’re doing, and they’re doing it right this time around!

Personally? I think the plethora of names and labels emerging to describe this, now two years old, ‘new type’ HUD-Code manufactured home is leading to far more confusion than consensus, e.g. CrossMod® (MHI), MHAdvantage (Fannie Mae), CHOICEHomes (Freddie Mac), Genesis series (Skyline/Champion), and going back a few years, ‘MHSelect’.

Back to that mixed bag of MH production volume – and value. Everyone knows the pace of new HUD-Code housing shipments has slowed during the past couple years, but few have taken time to ‘work the numbers’. Here’s how bad the situation really is:

Between 2015 & 2016, we enjoyed an increase of 10,592 new HUD-Code homes shipped
Between 2016 & 2017, we enjoyed an increase of 11,766 new HUD-Code homes shipped
Between 2017 & 2018, saw an increase of only 3,653 new HUD-Code homes shipped
Between 2018 & 2019, likely 5,009 fewer new HUD-Code homes will be shipped by year end.

How so? Extrapolate 82,942 new HUD-Code homes shipped through October 2018 with that year’s total of 96,555; then with 79,912 new HUD-Code homes shipped through October 2019. Result is an estimated total of 93,027 new homes to maybe be shipped by year end, or 3,528 fewer new HUD-Code homes than previous year shipment pace! And certainly fewer than the 100,000 industry goal for year 2019. Startled yet? You should be. And should be asking, ‘Why?’

Moving on to value. As official statistician for the land lease community real estate asset class, EducateMHC is forced to continue using Dr. Stephen C. Cooke’s HUD-Code housing ‘production value’, computed using base year 2013 cost factors. MHI continues to promise an update, even expansion, to this key data, but it hasn’t occurred to date. SO, are we, in terms of production value, a $3 billion industry (2018), using six year old data, or closer to $4 billion?

This info readily available from EducateMHC via its’ monthly MHShipment ‘#s & $s’ Report, published as an integral part of each monthly issue of the Allen Letter and the Allen CONFIDENTIAL! business newsletter. Visit www.educatemhc.com to subscribe.

Finally finance. Easy to describe. Real estate-secured new home financing is available from a variety of local, regional, and national sources. Personal property (i.e. chattel capital) lending continues to be elusive for home-only transactions occurring on leased land, e.g. new and resale homes on rental homesites within land lease communities. And of course this mixed bag of housing finance resources is complicated by the S.A.F.E. Act and regulations implemented by the Consumer Finance Protection Bureau (‘CFPB’).

Always happy to learn ‘your take’ on these business dampening matters: gfa7156@aol.com

II.

Rick Robinson, esquire, joins MANUFACTUREDHOMES.COM Team as
VP of Industry Relations

Congratulations Rick! We’ll miss your presence and yeoman’s work at the Manufactured Housing Institute (‘MHI’) – especially where Federal Fair Housing is concerned. We now know far more about that important program, and how it relates to land lease community ownership and operations, than we did before you. Who will take up that torch at MHI; or will this be part of your work at Manufacturedhomes.com? An inquiring public would like to know…

Brad Melms, president of Manufacturedhomes.com, in a recent press release describing Rick’s job change stated, he’ll “…be working to bring a new level of consumer technology to those buying homes and residing in communities.” Hmm. While ‘time will surely tell’ what Bruce means by that statement, one wonders if this might be akin to ‘throwing down the gauntlet’, figuratively speaking, in the direction of MHVillage, the manufactured housing industry’s premier and perennial marketer of resale homes ‘for sale’ on-site in land lease communities?

In the meantime, if you haven’t already heard or read, Rick has a new novel (thriller) available for purchase: Opposition Research. I read it over the Thanksgiving holiday and had difficulty putting it down! Includes a couple examples of the influence manufactured housing has on his creative writing. The book is available for purchase from Amazon.com

III.

ANSWERS to Challenges in Land Lease Community Ownership/Operations…

Industry Standard Chart of Operating Accounts and Operating Expense Ratios (‘OERs’)

Know the most frequent questions I’m asked as consultant to the land lease community real estate asset class? ‘What and where are the operating expense industry standards for land lease communities?’ Answer: In two appendices # 32 & 33 of the Community Management in the Manufactured Housing Industry 250 pages textbook! That’s right, the official Industry Standard Chart of Operating Expense Accounts & accompanying Operating Expense Ratios (‘OERs’) are easily available to land lease community owners and managers alike. The historic genesis of this unique property type information makes for an interesting tale.

This story was first told in SWAN SONG (History of the Land Lease Community Real Estate Asset Class & Official Record of Manufactured Housing Shipments, 1955 to present day’), but blog readers will likely find it engaging to read again.

During the spring of 1992, while a Major in the USMC reserves, I was called to active duty for service during the Desert Storm initiative in Iraq. However, by the time I was cleared medically, that brief conflict had come to an end – so I was ordered to Honduras along with several other staff officers. While there we supported helicopter air strikes (interdictions) against drug stills in the mountain region of that country. Not much publicity about it back in the U.S., but we believed our Marines were shot at with more intensity in Honduras, than they would have been over in Saudi Arabia.

Combat environs are famously known for days and week long periods of relative peace and nonconflict, abruptly interrupted by inconvenient moments of intense conflict with, and maneuvering against, one’s adversary at the time. And this is the way it was in Honduras. Some days were hot and boring, others just as hot, but as physically and mentally demanding as you can imagine.

Well, it was during one of those periods of relative peace and nonconflict I found myself, sitting on a camp stool, pondering mobile home park operating expense statistics I’d gathered during research conducted while writing for the Manufactured Home Merchandiser magazine. Given I had nothing else of importance to do at the time, ‘the numbers just seemed to come together’ in a very cogent fashion, especially operating expense ratios. So, when I returned to the U.S. a month or two later, the two new resources found their way into my column at the Merchandiser, then an earlier edition of Manufactured Home Community Management.

Today, that text and its’ 13 chapters and 52 appendices are available for purchase from EducateMHC via the website: www.educatemhc.com

1st Listening Session Revisited

Tuesday, November 26th, 2019

November 2019; Copyright 2019; www.educatemhc.com

Perspective. ‘Land lease communities, previously manufactured home communities, and earlier, ‘mobile home parks’, comprise the real estate component of manufactured housing.’

This blog is the online national advocate, official ombudsman, asset class historian, researcher, education resource & communication media for land lease communities in North America!

To input this blog &/or affiliate with EducateMHC, telephone Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Also email: gfa7156@aol.com, & visit www.educatemhc.com

Motto: ‘U Support US & WE Serve U!’ Goal: promote HUD-Code manufactured housing & land lease communities as U.S. source of affordable attainable housing! Next MHM class: 1/14/2020

INTRODUCTION: Pretty straightforward! More info from Listening Session # 1, plus a request for assistance. AND, the second installment of ANSWERS addition to this weekly blog posting.

I.

1st Listening Session Revisited…

Fannie Mae & Freddie Mac are frustrated and disappointed with the too few ‘new type’ HUD-Code manufactured homes (Now, CrossMod® homes according to MHI) financed via their respective MHAdvantage & CHOICEHomes programs to date. Accordingly, James Gray of the FHFA, and others present at the Listening Session, requested input from attendees – and YOU, if not an attendee; regarding ‘How to generate more consumer interest in these two real estate-secured finance products for manufactured homes!’ If you have ideas, please pass them onto me, and I’ll ensure they are forwarded to the appropriate GSE, or both. Simply email: gfa7156@aol.com or phone the Official MHIndustry hotline: (877) MFD-HSNG or 633-4764.

Was interesting to learn of GSE’s interest in long term written leases as protection against surprise and exorbitant rental homesite rate increases. Also their sensitivity to securing chattel capital loans in land lease communities that might close for redevelopment. And where property owner loan ‘guarantees’ are concerned, these appear to be of more interest to lenders than, surprisingly, to the GSEs. And finally, we were assured time and again the end of conservatorship of the GSEs would have little to no effect on DTS programs present and future.

If you’re reading this blog posting and participated in Listening Session # 2, and/or plan to ‘present’ during Listening Session # 3, please share your narrative with me. Most likely, with your permission, I’ll reprint it in an upcoming issue of one or another of our widely read business newsletters, the Allen Letter and the Allen CONFIDENTIAL! If not already a subscriber to either or both media, visit www.educatemhc.com to do so.
II.

ANSWERS! A New Emphasis for this Blog.

Last week we introduced you to the ’10 Helpful Steps to Manager & Leasing Consultant Safety’, one of many helpful aids for land lease community owner/operators, contained in the recently released 8th edition: Community Management in the Manufactured Housing Industry.

This week; introducing you to three authors who penned unique chapters in this textbook.

George Porter literally ‘wrote the book’ (i.e. regulations & protocols) on manufactured housing installation. To this day, he is relied on by HUD, manufacturers, state associations, and land lease community owners/operators to not only teach them to be eligible for installer licensing, but he troubleshoot troublesome situations as well. George articulated the Frost Free Foundation! Read George’s chapter # 8 is George’s in Community Management in the Manufactured Housing Industry.

Fred Rice, co-owner of Spectrum Utilities – a nationwide utility submetering company, is an attorney, and active member of the Utility Management & Conservation Association. We had our choice of several submetering practitioners, but were well aware of Fred’s ongoing efforts to educate land lease community owners/operators in this important cost savings activity. Planning to submeter one’s property or retrofit existing meters? Chapter # 9 will be invaluable.

Dave Hegemann’s staff at London Computer Systems and Rent Manager prepared this ‘first ever’ resource on property management (‘PN’) software in the land lease community. The PM areas covered in chapter # 10, include accounting, collections, marketing, maintenance, integrated phone systems and websites, credit reporting, and so much more! Like the previous chapters, this one too has been authored by the best known and respected expert in the field.

So, if manufactured housing installation, water submetering, and taking your community digital, are lively concerns of yours, you need to routinely refer to Community Management in the Manufactured Housing Industry! Obtain your copy via www.educatemhc.com

It’s my personal belief; a copy of this book belongs in every central property management office, and every land lease community in the U.S. and Canada. That’s how valuable the information is in this 250+ page tome used as base text of the Manufactured Housing Manager (‘MHM’) professional property management training & certification class! Next class? 14 January in Louisville, KY. Visit www.educatemhc.com for more information & to register.

George Allen, CPM®, MHM®
EducateMHC

‘This is a very Critical Issue!’

Friday, November 22nd, 2019

November 2019; Copyright 2019; www.educatemhc.com

Perspective. ‘Land lease communities, previously manufactured home communities, and earlier, ‘mobile home parks’, comprise the real estate component of manufactured housing.’

This blog is the online national advocate, official ombudsman, asset class historian, researcher, education resource & communication media for land lease communities in North America!

To input this blog &/or affiliate with EducateMHC, telephone Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Also email: gfa7156@aol.com & visit www.educatemhc.com

Motto: ‘U Support US & WE Serve U!’ Goal: promote HUD-Code manufactured housing & and lease communities as U.S. source of affordable attainable housing! Call for next MHM class info

INTRODUCTION: Wow! FHFA & GSE Listening Sessions are off to a ‘flying start’ – with much good and timely input from the manufactured housing market! And, in this blog posting, we introduce a NEW FOCUS for the weekly communique! Hope you take good advantage of what’s being offered to you. Finally; if we don’t talk again beforehand, here’s wishing YOU a Happy Thanksgiving holiday. GFA

I

“This is a very critical issue!”
Clinton Jones, FHFA

(During beginning of St. Louis, MO. Listening Session)

40 men and women sitting in the amphitheater of the Federal Reserve Bank of St. Louis, at first 2019 Listening Session hosted by the Federal Housing Finance Agency, Fannie Me & Freddie Mac (Enterprises). Audience was divided among the hosting organizations, and representatives from the Affordable Housing Preservation, Manufactured Housing, & Rural Housing Markets.

Once Jim Gray, from FHFA, explained Guidelines for this Listening Session, and how questions would be processed – from GSEs to scheduled presenters, the listening sessions got underway.

For the purposes of this blog posting, I’m limiting my observations to those pertaining to the manufactured housing market.

The national manufactured housing industry and land lease community real estate asset class were represented by four individuals, in the following order:

George Allen, CPM, MHM of EducateMHC. This presentation, titled: ‘Two+ Decades of Manufactured Housing Shipment & Finance Turmoil (1998 – 2020) Can End with Help from FHFA & GSEs!’ debuted nationwide, last week, as blog posting # 560. So, when done reading this blog posting (#561), scroll back into the blog archives to reread # 560. This presentation will also be featured in the December issue of the Allen Letter, via www.educatemhc.com.

Edward Hussey, Jr., VP of Liberty Homes, Inc., and chairman of the Manufactured Housing Association for Regulatory Reform (‘MHARR’), did an excellent job describing regulatory-related matters, progress and failures, where Duty to Serve (‘DTS’) programs have been concerned at Fannie Mae & Freddie Mac of late. While Mr. Hussey’s remarks are available directly from the MHARR, it’s anticipated they’ll also be featured in an upcoming issue of the Allen Letter.

Spencer Roane, MHM, president of Pentagon Properties, Inc., a portfolio land lease community owner/operator, delivered an impassioned presentation from his unique community ownership perspective, honed over 30+ years. Mr. Roane is one of many community owners/operators who’ve turned the ‘lemon into lemonade’, two decades long paradigm shift – from distribution of new HUD-Code homes via independent (street) MHRetailers, to new home sales & seller-financing on-site, from a forced burden into a near art form of profitability. Mr. Roane’s presentation too will likely appear as a feature article in the Allen Letter.

Kara Beigay, of the Manufactured Housing Institute did a superb job representing MHI, articulating concerns about GSE’s checkered progress, relative to existing DTS programs and plans for the next several years. She also used her talk to introduce the audience to CROSS-MOD, the name MHI has finally given their ‘new type’ manufactured home designed to qualify for Fannie Mae’s CHOICEhomes & Freddie Mac’s MHAdvantage programs. What was unique here, but not surprising, was how examples, shortfalls, etc., cited by all three presenters paralleled one another. For a copy of Ms. Beigay’s presentation, contact MHI directly.

Here’re several out of context remarks made during Tuesday, 19 November Listening Session:

FHFA would like to see ‘a new research center’ birthed by MHI – or, barring that, any other entity closely aligned with the HUD-Code manufactured housing industry and land lease community real estate asset class. Anyone ‘out there’ listening and inspired? Hmm. Am thinking

FHFA and the GSEs challenged Listening Session participants to suggest ways to make the CHOICEhomes & MHAdvantage programs more marketable in general, more attractive to prospective homebuyers in particular. Consider identical ‘specs’ for both programs!

A surprising sidebar realization occurred when it became apparent land lease communities might well be eligible for GSE consideration under Affordable Housing Market parameters – somewhere we haven’t been before. I’ll be looking into this in our behalf.

Finally. The GSEs were warned to ensure mortgages they’re writing on land lease communities are not being ‘set up for failure’, due to extravagant rental homesite rate increases. How to tell? Research HUD’s new Fair Market Rent (‘FMR’) stats per specific geographic region, and compare with said site rents (e.g. Divide FMR$ by ‘3’ for estimated and historic equivalent)

II.

ANSWERS! A New Emphasis for This Blog

Every land lease community owner/operator faces unique and changing challenges within a particular property or throughout one’s portfolio of communities. The goal is to identify these internal challenges and solve them in the most efficient manner possible.

In this instance, let’s begin with the safety and security of one’s on-site staff when ‘showing product’, whether selecting a vacant rental homsite for one’s new or resale home; or, walking through one or more model or ‘spec’ homes available for purchase. Have you considered or taught measures to reduce personal risk during these routine leasing and sales tasks?

Well, a few years ago, during a Manufactured Housing Manager (‘MHM’) professional property management certification class, this question was raised by a veteran on-site manager. We discussed the matter as a class, and came up with a few practical measures. I recorded them, and during several more MHM classes, elicited response on this subject, from candidates.

Today, and for some time now, a list of ’10 Helpful Steps to Manager & Leasing Consultant Safety’ has been part of the MHM curriculum. Now it’s Appendix # 45 in the 8th edition of the Community Management in the Manufactured Housing Industry textbook!

Sample ‘helpful steps’? “Never walk into a house or room first; be the one to follow!” & “Carry a small but very loud whistle with which to summon help!” And there’re eight more great tips!

To order a copy of this valuable property management text, simply visit www.educatemhc.com

And since a copy of this 250 pages property management text is given to every MHM candidate during all Manufactured Housing Manager classes, consider attending one! Next MHM class is scheduled for 14 January 2020 in Louisville, KY – the day before the Louisville MHShow begins. Visit website or phone Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 to register.

***

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

Here’s My FHFA & GSEs-hosted Listening Session Presentation

Tuesday, November 12th, 2019

2019; copyright 2019; www.educatemhc.com

Perspective. ‘Land lease communities, previously manufactured home communities, and earlier, ‘mobile home parks’, comprise the real estate component of manufactured housing.’

This blog is the online national advocate, official ombudsman, asset class historian, researcher, education resource & communication media for land lease communities in North America!

To input this blog &/or affiliate with EducateMHC, telephone Official MHindustry HOTLINE: (877) MFD-HSNG or 633-4764. Also email: gfa7156@aol.com & visit www.educatemhc.com

Motto: ‘U Support US & WE serve U!’ Goal: promote HUD-Code manufactured housing & land lease communities as U.S. source of affordable attainable housing! Call for next MHM class info.

INTRODUCTION. Have you wondered what a formal presentation, at an FHFA & GSE-hosted Listening Session, reads like? Well here’s what I’ll be presenting, in your behalf, at the St. Louis, MO. Listening Session on Tuesday, 19 November.

And, for those of you reading this, and attending MHI’s NCC Leadership Forum in downtown Chicago this week – with this blog in hand, ask staff what they will be saying, in your behalf, at the upcoming Listening Sessions in St. Louis and or Washington, DC. As a member, you have a right to know.

Here goes:

Two+ Decades of Manufactured Housing Shipment & Finance Turmoil
(1998 – 2020)
Can End with Help from FHFA & GSEs!

George Allen, CPM®Emeritus, MHM®Master
‘Input for FHFA & GSEs-hosted 2019 Listening Sessions’

See Enclosure: ‘Ah Ha! & Uh Oh’ Formulae worksheet; EducateMHC., Franklin, IN., 2008

Setting the stage. During year 1998, 372,943+/- new HUD-Code homes were shipped nationwide; but from there onward, it was downhill till nadir year 2009, when only 48,789+/- new homes were shipped.*1 At the dawn of the 21st century, according to the Manufactured Housing Institute (‘MHI’), more than 10,000 ‘ independent (street) MHRetailers’ closed their doors; and new HUD-Code homes, particularly Community Series Homes, began to be shipped directly into land lease communities, ‘for sale’ & seller-financing, as well as rental units.*2 And that’s where we are today. How do Fannie Mae & Freddie Mac fit into this two decades long paradigm shift scenario? As an industry, manufactured housing is surviving, albeit recovering slowly, from 48,789+/- new HUD-Code homes shipped during 2009, up to 96,555 new homes shipped throughout year 2018, but still sorely in need of reasonable access to chattel capital for home-only loans in land lease communities, large and small, coast to coast!

***
I was present at the historic meeting, during early 2010 in Elkhart, IN, when the FHFA & GSEs informed HUD-Code housing manufacturers, that going forward, the industry would be on its own, where housing finance support was concerned, i.e. end of easy access to chattel capital to finance new home-only loan transactions within land lease communities nationwide! Why?

While naive at the time, about housing finance and the GSEs, I understood Fannie Mae & Freddie Mac’s angst with the manufactured housing industry. A decade earlier, I had penned an expose’ titled, ‘Upside Down in a Mobile Home Park’, first published in Manufactured Home Merchandiser magazine. It detailed widespread financial shenanigans and predatory lending practices – and consequences, that’d hurt and haunt the industry during the decade ahead – as described in the previous paragraph.

Fast forward a few years, to the International Networking Roundtable held in Peachtree City, GA. That event marked the return of the FHFA, Fannie Mae & Freddie Mac, to meet and talk firsthand with manufactured housing industry businessmen and women most affected by the their departure a few years earlier; specifically, the owners/operators of land lease communities, now routinely selling and seller-financing new HUD-Code homes on-site. We learned a lot from each other during the two day event; but most important of all, was the obvious pent-up optimism, and belief we could forge a new housing finance way forward together!

How so? Well this was nigh the time of Duty to Serve (‘DTS’) planning at Fannie Mae & Freddie Mac. Manufactured housing aficionados, and land lease community owners/operators, were invited to participate in open discussion sessions at GSE headquarters, as well as during formal Listening Sessions around the U.S.

Results? That’s been a decidedly mixed bag; complicated by whatever perspective is being espoused by whoever is speaking, about what, at the time. In summary; here’s how I see it:

Relative to DTS focus on manufactured housing, there’s been limited progress in the real estate-secured lending arena, speaking specifically of Fannie Mae’s MH Advantage and Freddie Mac’s CHOICEHomes programs. In my opinion, the programs are welcome and needed, but are too confusingly similar in terms of seller concessions, down payment minimums, transaction type, terms, and more. Of particular ‘rub’ are distinct differences in housing valuation methodology. And a further tripping point is MHI’s ‘new type’ of HUD-Code manufactured home, designed for underserved markets. To date, even after several years, there’s no consensus name for this ‘more expensive’ manufactured home design that qualifies for both GSE home loan programs. Bottom line? How’s a prospective homebuyer to know what (no name) manufactured home design to consider buying, and which of the two near-twin GSE loan programs to use?

Even more ‘telling’ – some would say ‘appalling’, relative to DTS focus on manufactured housing, there’s been NO progress towards a new or renewed chattel lending product program! And while volume estimates vary, the vast majority of manufactured housing finance, these days, is needed for chattel, or home-only, transactions occurring on-site in 50,000+/- land lease communities located throughout the U.S.! To date, land lease community owners/operators have exhibited an admirable degree of creativity, initiative, and chutzpah – even in the face of increased state and federal financial oversight, to consummate new home-only sales transactions on-site. We still sorely need reasonable access to chattel capital, other than via one independent third party firm that, reportedly, corners 70+ percent of the national market share of this type lending. Furthermore, we continue to need a viable secondary market for selling seasoned manufactured housing financing products!

Now, it would be easy to stop here and feel ‘I’ve done my part’ at this Listening Session – but I can’t do that. A sentence in this recent Press Release (10/28/19): ‘FHFA Releases New Strategic Plan & Scorecard for Fannie Mae & Freddie Mac’ hooked me with the following statement:

“…solving our nation’s critical housing affordability challenges will require looking beyond the secondary mortgage market and addressing the true cause of this crisis: namely, the significant shortage of housing supply.”

Here I am, a businessman with 40 years experience in a housing arena capable of shipping 579,940 new ‘mobile homes’ during year 1973, and 372,943+/- ‘manufactured homes’ in 1998; but today, year to date through September 2019, we’ve shipped only 70,497 new homes! Why? Simply because we don’t have the chattel capital financing needed for home-only loans effected within land lease communities! And we don’t have ‘that’ because no one (Think FHFA, GSEs, et. al.) trusts our integrity to lend these monies wisely and securely! But the truth of the matter is, we can do both – and more! Here’s how to increase the supply of HUD-Code manufactured home to address this nation’s affordable housing crisis…

The manufactured housing industry routinely makes home loans, in land lease communities, giving the 30 percent Housing Expense Factor (‘HEF’) lip service, by including only PITI (loan principal, interest, taxes, insurance) and rental homesite fee in monthly mortgage payments!*3 What’s missing is household expenses (e.g. electricity, heat, water, sewer) – all which must be paid each month, but separate from the ‘mortgage payment’. Consequences? 1) A riskier loan, where homeowners/site lessee can ‘buy more home’ yes, but 2) generally pay considerably more than the prudent 30% HEF. Here are results of both calculations*4:

Given: $51,229 Area Median Income (‘AMI’) per local housing market’s postal zip code via zipwho.com, &/or Annual Gross Income (‘AGI’) per homebuying prospect or household. Also 30% HEF; $333 monthly site rent; and loan terms of 9.5% & 20 years.

Risky home-only loan. $51,229 AGI X .3HEF X 100% applied to monthly PITI & rent, divided by 12 months, less $333 site rent = $948/month PITI & rent payment. When loan terms applied = $101,702 max loan amount. Risky, because household expenses, when paid in addition to mortgage & rent, force homeowner/site lessee beyond the 30% HEF goal. So, consider changing this routine practice to what follows:

Affordable home-only loan. $51,229 AGI X .3HEF X 75% applied to monthly PITI & rent (with 25% kept out of 30% HEF for household expenses), divided by 12 months, less $333 site rent = $628/month PITI & rent. Loan terms applied = $67,372 max loan amount. Far less risky an investment, but also less home purchased.

Point? If home-only loans were effected in accords with the ‘affordable’ perspective, it’s logical there’d be fewer defaults as homeowners/site lessees lived within their means. Perhaps this is one of the long sought keys to improving the security of chattel capital loans on homes sited in land lease communities.

And there are additional measures to consider. One would be to enforce strict screening of loan applicants. Also consider a measure of property owner recourse on home-only loans effected within their owned properties.

Finally; consider applying HUD’s recently published Fair Market Rents (‘FMR’) for year 2020, as a guide to ‘check & ensure’ land lease community site rents are in accords with the traditional 3:1 ratio, e.g. $999/month @ 3BR2B conventional apartment (per FMR) = $333/month site rent in a land lease community in the same local housing market. *5

This concludes my remarks and recommendations relative to this Listening Session.

EducateMHC
Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764

End Notes.

1. (+/-) qualifier following manufactured housing industry annual shipment totals, until 2012, accounts for different totals published by MHARR & MHI. Since 2013 an official total, based on unadulterated data from the Institute of Building Technology & Safety (‘IBTS’), HUD’s contractor, is published by MHARR, NAMHCO, HUD, & EducateMHC

2. Year 2009 = 24% of new HUD Code homes (i.e. 12,000+/-) were shipped into land lease communities; by year end 2015, that percentage increased to 40%, or 28,000 new homes – and that percentage will continue to rise with access to chattel capital.

3. Housing Expense Factor or HEF @ 30 percent. One of at least six measures of housing affordability; other measures being: Housing Opportunity Index or HOI; Housing Wage or HW; Workforce Housing or WFH; Income to Home Value Ratio or IHVR; and, ‘one who believes’ he/she has consummated an affordable home transaction.

4. Reference: ‘Ah Ha! & Uh Oh! Formulae’ estimate maximum recommended ‘affordable’ & ‘risky’ purchase prices for new & resale, privately-owned homes of any type, sited on realty owned fee simple with home, or ‘home-only’ on leased land – as in a land lease community. Form available via www.educatemhc.com

5. For FMR, google ‘Fair Market Rents 2020’ to research state and city fair market rates.

Visit www.educatemhc.com for comprehensive array of products (newsletters & books) and services (PM training/certification & Performance Evaluations) tailored for land lease communities large & small, nationwide. The ‘Upside Down in a Mobile Home Park’ expose’, described in this narrative, is featured in SWAN SONG, a history of land lease communities and official record of mobile home/manufactured housing annual shipment volumes from 1955 to present day. This text is available for purchase from EducateMHC.

GFA/cc

MHIndustry New Years Resolution for 2020!

Friday, November 8th, 2019

8 November 2019; www.educatemhc.com

Perspective. ‘Land lease communities, previously manufactured home communities, and earlier, ‘mobile home parks’, comprise the real estate component of manufactured housing!’

This blog is the online national advocated, official ombudsman, asset class historian, researcher, education resource & communication media for land lease communities in North America!

To input this blog &/or affiliate with EducateMHC, telephone Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764/ Also email: gfa7156@aol.comk & visit www.educatemhc.com

Motto: ‘U Support US & WE Serve U! Goal: promote HUD-Code manufactured housing & land lease communities as U.S. source of affordable attainable housing! Call for next MHM class info

INTRODUCTION: Yes, it’s early to announce the traditional New Year Resolution Challenge, but that’s what you’re about to read here. First, how it took 32 long and rocky years to get where we are today. Then a heartfelt challenge to three national MH-related entities to better represent, lobby in behalf of, and serve the product & service needs of land lease community owners/operators, large & small, nationwide! Here goes….

I.

Long & Rocky Road to Land Lease Community Advocacy & Respect!

It’s taken more than a quarter century for owners/operators of land lease communities (a.k.a. manufactured home communities, & before that ‘mobile home parks’) to arrive at the point in time (year 2020) when they have and benefit from…

• National advocacy via Manufactured Housing Institute’s (‘MHI’) National Communities Council (‘NCC’) division

• National lobbying via National Association of Manufactured Housing Community Owners (‘NAMHCO’)

• National product & service resourcing (books, newsletters, professional property management training/certification, & consulting) via EducateMHC

But getting to this point in time, of representation, lobbying, and resourcing, has been a long and rocky road, commencing as far back as year 1988. Here’s a summary of key stages along the 32 year journey to land lease community advocacy and respect.

1988. The year Mobile Home Park Management text was published and distributed nationwide. It was the first professional property management text on the property type in two decades.

1989. Marked the debut of the ALLEN REPORT (a.k.a. ‘Who’s Who Among Land Lease Community Portfolio Owners/operators Throughout North America!’), the longest-running (31 years to date) compendium of investment realty statistics and emerging trend documentation, in the history of the manufactured housing industry.

1993. 19 (then) mobile home community owners met in Indianapolis, IN., to form an Industry Steering Group (‘ISG’), taking first steps to improve national advocacy for the property type – before the mini-REIT wave of 1994. Before then, mobile home park matters were handled by a committee of volunteers during MHI national meetings.

1994. J. Wiley & Sons published Development, Marketing & Operation of Manufactured Home Communities. Another ‘first text on the subject in 20 years’, that sparked raw land development seminars during the next decade.

1996. MHI embraces the aforementioned ISC and launches the NCC, which remains in place to this day, as a full-fledged division of MHI, but is generally led by senior salaried executives of large property portfolios. Also during 1996, J. Wiley & Sons published How to Find, Buy, Manage & Sell a Manufactured Home Community. This case bound text, as its 1994 predecessor, has long been recognized as a realty asset class primary source of information.

2004. One of the rocks along the road to community advocacy and respect occurred when the Urban Land Institute (‘ULI’) launched the Manufactured Housing Communities Council (‘MHCC’). For slightly more than a decade, this was a quasi Think Tank for the realty asset class, hosting opportunities for open discussion among participants from all segments of the manufactured housing industry.

2008 & 2009. Two years and two National State of the Asset Class (‘NSAC’) caucuses, in Tampa, FL. & Elkhart, IN. In the first instance, community owners/operators agreed on a Five Step Action Plan, to reinvigorate the industry and asset class. In the second meeting, HUD-Code housing manufacturers & community owners/operators agreed to begin fabricating and buying a new design of manufactured home, the Community Series Home. All this occurring during the industry’s nadir year (lowest shipment volume ever), 2009. These were also the two years during which the term ‘land lease community’ got widespread traction. Why? Because today’s properties site as many as seven types of shelter, no longer just ‘mobile homes’ and manufactured homes of yore.

2011. Unfortunately, but providentially, the year during which the issue of control and scope of MHI’s NCC came to a public and argued climax, i.e. Whether it’d be dominated by, and identified as, a portfolio owners/operators club, or serving communities of all sizes? This identity issue has played out during years 2014, 2018, and 2019.

2014. Community Owners (7 Part) Business Alliance or COBA7 was launched early in the year, providing tailored products and services to land lease communities, large and small.

2018. NAMHCO stepped forward to lobby, in our nation’s capitol, in behalf of all land lease communities, large and small, throughout the U.S.

2019. EducateMHC absorbed the COBA7 division of GFA Management, Inc., dba PMN Publishing, to continue that body’s goal to serve the product and service needs of land lease communities, large and small, from coast to coast.

2020. The land lease community real estate asset class has traveled the long and rocky road to advocacy and respect! Let’s identify these benchmark achievements:

• We’re now well-represented in Washington, DC. Add MHARR to the MHI & NAMHCO list

• The Institute of Real Estate Management (‘IREM’) now sells Community Management in the Manufactured Housing Industry to its’ Certified Property Manager (‘CPM’) members. This is 8th edition of the 1988 Mobile Home Park Management, & basic MHM textbook.

• We read a quality print trade publication (MHInsider), as well as three digital MH business newsletters, and a weekly blog posting.

• Via annual ALLEN REPORT, we know identities of all 500+ portfolio owners/operators of land lease communities throughout the U.S. & Canada.

• All our real estate asset class advocacy, lobbying, and resource needs are now handled by the NCC, NAMHCO & EducateMHC.

Know what? There’s still much more that could, and probably should, be said about land lease communities long and rocky road history. For example, the three – or is it four, consolidation stages we’ve passed through together; the slow growth – but at least there’s growth, of professional property management throughout the realty asset class via MHM and ACM certification programs. And then there’re the paradigm shifts the manufactured housing industry has experienced since 1972, especially the 20 year one we’re in now, i.e. distribution of new HUD-Code homes away from independent (street) MHRetailers, to direct sale of new homes into land lease communities nationwide.

And then there’s still that perennial ‘elephant in the MH room’. Specifically, whether the three identified entities – MHI/NCC, NAMHCO, & EducateMHC, or make it four with addition of MHARR, will work together – or apart, during the months in year 2020, especially considering the new and restructured leadership at the Manufactured Housing Institute. Let’s all watch and see what happens going forward….

If you’d like to read more about land lease community history, purchase a copy of SWAN SONG, via www.educatemhc.com And when you purchase the book, ask for a FREE copy of the booklet titled: ‘Who Will Preserve Your Legacy? Answer: You!’ The beauty of this offering is it summarizes ten autobiographies authored by industry pioneers to date; and in the end, describes how to pen your memoir and corporate history. Enjoy!

George Allen, CPM, MHM
EducateMHC
170 Commerce Dr.
Franklin, IN. 46131
(317) 346-7156

Your First VALEDICTION

Friday, November 1st, 2019

1 November 2019; www.educatemhc.com

Perspective. ‘Land lease communities, previously manufactured home communities, and earlier, ‘mobile home parks’, comprise the real estate component of manufactured housing.’

This blog is the online national advocate, official ombudsman, asset class historian, researcher, education resource & communication media for land lease communities in North America!

To input this blog &/or affiliate with EducateMHC, telephone Official MHIndustry HOTLINE: (877)MFD-HSNG or 633-4764. Also email gfa7156@aol.com & visit www.educatemhc.com

Mot: ‘U Support US & WE Serve U!’ Goal: promote HUD-Code manufactured housing & land lease communities as U.S. source of affordable attainable housing! Call for next MHM class info

INTRODUCTION: Now here’s something, about me, about which you knew or know nothing!
My practice of penning ‘valedictions’, or ‘fond farewells’, to friends and relatives when they die. Started doing this in 1996, upon the passing of my father. At the time, I rewrote a birthday gift story about him, into a tribute that was printed, read, and shared during his memorial service. Since then, I’ve continued the practice with individuals I’ve known well enough to have had personal experiences worthy of sharing in this fashion. The valediction included here is for one of the many owners/operators of land lease communities I’ve known well during the past four decades.

I.

A Valediction, a ‘bidding farewell’ to Darrel G. Cohron

I met Darrel Cohron, and his twin Harrel, during the early 1970s, when relocating to Indianapolis from Philadelphia, PA., as part of a plant management team tasked to build a new pre-fab housing plant in Franklin, IN. I’d been told, by local apartment and nursing home developers Frank, Ethan & Rollin Jackson, the Cohron brothers, and a Greenwood businessman – the late Bud Meyer, would be knowledgeable resources about factory-built housing in general; manufactured housing, mobile homes and parks in particular. Well we met, and ‘got a leg up’ on our assignment, learning how doing business in the Midwest would not be wholly akin to what we experienced back East – mainly how union labor was the exception rather than the rule, at the time.

Ten years later, long after the pre-fab plant closed, and shortly after I’d started my own firm;, I sought Darrel’s advice again. This time it had to do with me wanting him to critique my estimated value of the large manufactured home community I was fee-managing in Mooresville, IN> It was in foreclosure and no investor would pay anywhere near the amount of development money the bank had loaned and lost in the project. They asked me if I’d buy it. Well, I had but $10,000 in savings, a wife and two small children, and not desire to lose this fee-management client, so I estimated the 500 rental homesite property, with but 100 homes paying rent, to be worth only $400,000. Asked Darrel to ‘check my numbers’ and advise. Here’s how this part of the story is told in my 2017 book, SWAN SONG, a ‘Semi-autobiography, and history of land lease communities I since 1970’:

‘Darrel agreed with my estimate, and his parting word of wisdom was this: ‘There comes a point in everyone’s life when you decide to stay on the safety of the porch, or go out and run with the big dogs! George, I think this is your safe porch or big dog decision moment in life!’

Took Darrel’s advice, found a partner, along with $400,000 and bought the property. Now that’s the Darrel we remember and appreciate. Certainly for me!

Then there’s the 2010 book, The Trailer Twins, a.k.a. ‘The Harrel & Darrel Cohron Story’. Here are some of my favorite passages from this biography.

Mayor Paul Ricketts recalling “…( a) fond memory of Harrel & Darrel wrasslin’ in the gravel of their sales lot, both dressed in suits. They called such altercations their board meetings’. When they were through , they brushed themselves off, and we all went to dinner.”

And this from Darrel, talking about the manufactured housing business: “We loved it. We still do. You have to. If you’re not in love with what you do, you’re just not ever gonna make it.”

Darrel & Harrel’s business success formula? “First, you never lie to a customer and second, after a sale, you give good customer service and follow up to make sure the customer is satisfied.” Plus this, about working together for life: “We both know we’re dedicated to the business and to each other and our families. If something needs to be done, we will do it. Our motto is ‘get up early, stay late, and tell the truth’.”

Don’t know ‘bout you, but as a local manufactured housing businessman, I’ll miss the friendly camaraderie of those Christmas parties out in the barn in back of the Cohron’s home sales center along Pendleton Pike.

Well Darrel, you’ve lived a long and prosperous life – just look at the legacy you and Harrel leave behind, in family, friends, and fortune. When I get to heaven, I’ll ask St. Peter where to find you, and he’ll likely say the same thing as the folk at the assisted living facility where you lived this past year. “Just walk down that street of gold until you hear country music played loud and bold. That’s where you’ll find Darrel Cohron!” Hope to see you then and there old friend!

George Allen, colleague & fellow RV/MH Hall of Fame member, October 2019.

Want to buy either or both books mentioned in this valediction? SWAN SONG is available via www.educatemhcv.com And The Trailer Twins is available from the RV/MH Hall of Fame store: (574) 293-2344

Hope you liked the valediction to Darrel Cohron. Who knows? Perhaps someday I’ll pen a like tribute to you and your life adventure. GFA

***

Meet FMR (&) News From MHI & IREM

Thursday, October 24th, 2019

@ 25 October 2019; www.educatemhc.com

Perspective. ‘Land lease communities, previously manufactured home communities, and earlier, ‘mobile home parks’, comprise the real estate component of manufactured housing.’

This blog is the online national advocate, official ombudsman, asset class historian, researcher, education resource & communication media for land lease communities in North America!

To input this blog &/or affiliate with EducateMHC, telephone Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Also email gfa7156@aol.com & visit www.educatemhc.com

Moto: ‘U Support US & WE Serve U!’ Goal: promote HUD-Code manufactured housing & land lease communities as U.S. source of affordable attainable housing! Call for next MHM class info

INTRODUCTION: I’m almost as pumped about the potential use of Fair Market Rents (‘FMR’), introduced in Part I of this blog posting, as I was when introducing the land lease community Industry Standard Chart of Accounts & Operation Expense Ratios (‘OERs’) in 1992; and the unexplainable but so useful New Rule of 72 formula for estimating capitalized income value of average communities. Let’s see if FMR ‘works’ for you! And then there’s the timely and interesting news about IREM and MHI.

I.

Fair Market Rents. A Tool or Red Herring?

This from a Press Release dated 19 September 2019. “HUD has published the Fiscal Year (FY) 2020 Fair Market Rents (FMRs), which are now released only on huduser.gov, under a provision of the Housing Opportunities Through Modernization Act of 2016 (HOTMA), enacted July 29, 2016.” Furthermore, “…the FMR for any (geographic) area is the ($) amount… needed to pay the gross rent (shelter rent plus utilities) of privately-owned, decent and safe rental housing of a modest (non-luxury) nature, with suitable amenities.”

The question in this industry observer’s mind is this: ‘Might FMR be the long sought tool to estimate and validate rental homesite rates in land lease communities throughout the U.S.? Or is FMR just another ‘red herring’ that misleads us off the trail to reasonable profitability? Let me walk you through the process, using one of our realty asset class’ Rules of Thumb, so you can make up your own mind. Here’s the drill:

1. Google or search Fair Market Rents 2020.
2. Once ‘there’, access the website subtitled HUD User & left click on Select Geography.
3. Once ‘there’, left click on Statewide FMRs
4. Once ‘there’, left click on city of choice

Now the fun begins.

For this blog posting I chose three MSAs (Metropolitan Statistical Areas): Atlanta, GA., Indianapolis, IN., and Los Angeles, CA. At each MSA, I selected the ‘three bedroom FMR’ – as being equivalent to a manufactured home, then divided by three, to apply the 3:1 Rent Ratio Rule of Thumb, for comparing land lease community site rent rates to conventional apartment 3BR2B unit rates. And then divided the original FMR by two, to see what land lease community site rent rates might be, as result of aggressive increases. Here’re the interesting results:

City FMR 3:1 Ratio 2:1 Ratio

Atlanta, GA. $1,489/unit $496/site $745/site

Indianapolis, IN. $1,256 $419 $628

Los Angeles, CA. $2,514 $871 $1307

How do these rental homesite rents compare to the 2018 JLT Market Report Summary for Institutional Investment Grade Land Lease Communities, published as an integral part of the 30th anniversary ALLEN REPORT? To secure a copy of this Resource Document, visit www.educatemhc.com

Atlanta, GA. $463/site among all-age communities

Indianapolis, IN. $380/site among 55+ communities

Los Angeles, CA. $759/site among 55+ communities

Remember now, these latter rental homesite rates, from the 30th ALLEN REPORT are from two years earlier, while the FMRs in the previous paragraph are estimates going into year 2020.

Obviously this methodology bears further scrutiny. But for the time being, this should be a valid and interesting exercise for you, to compare the rental homesite rents at your land lease communities with the FMRs for 2020 provided by HUD User.

A note of caution. Remember, in the cited Press Release, the HUD made it clear the FMRs, per geographic area, are dollar amounts needed to pay gross rent (shelter rent plus utilities) – not a practice generally characteristic of land lease community rental homesite rates. How to account for the difference? Research what homeowners/site lessees are paying for household utilities, on a monthly basis, and adjust FMRs accordingly – or not.

Also know the 31st ALLEN REPORT will be distributed during January 2020. To ensure you receive a copy, visit www.educatemhc.com

II.

News from IREM & MHI

Institute of Real Estate Management (‘IREM’) now stocks and sells the iconic professional property management text Community Management in the Manufactured Housing Industry. First published in 1988 as Mobile Home Park Management, the 250+ pages HOW TO book has gone through eight edition updates and four name changes during the past 40 years. It continues to be the only book in print, teaching what one needs to know about effectively managing land lease communities, large and small. It has also been the core text for the popular Manufactured Housing Manager class since its’ debut a dozen years ago. To date, nearly 1,500 MHMs own and operate land lease communities throughout North America.

To order the book, visit www.educatemhc.com or visit IREM.org. And while at the EducateMHC website, sign up for the next one day MHM class, at the Louisville MHShow in mid-January.

IREM also released its’ annual CPM Profile & Compensation Study (executive summary thereof).

“The average Certified Property Manager is 52 years old, with women comprising 54% of CPM members.” Furthermore, “CPM members (of IREM) earn a median total compensation of $126,000, which includes a base salary and additional real estate income from sales and leasing commissions.”

According to IREM’s membership directory, 147 CPMs claim an affinity for managing manufactured home communities. 14 of these CPMs have cultivated positive national reputations among their land lease community ownership/operations peers. And four of these CPMs have achieved Emeritus status with IREM, while three have been inducted into the prestigious RV/MH Hall of Fame in Elkhart, IN: George Allen, CPM; Brian Fannon, CPM; and Michael Sullivan, MHM.

&

The Manufactured Housing Institute (‘MHI’) continues to make lobbying headway, in behalf of manufactured housing, by dint of its’ political and regulatory agency relationships with the present administration, HUD, the FHFA, and both GSEs.

At the same time, MHI appears to be undergoing a seismic shift in volunteer and salaried leadership at the top of the organization. Everyone know Dick Jennison will be leaving at the end of this year, but to date, no official (just rumored) word of succession relative to CEO/president and COO positions. And at least two key staffers have left the institute during the past 90 days.

And inquiring minds are sensitive to the present (2020) reality of having four Berkshire-Hathaway corporate executives on MHI’s board going into the New Year, with no representation from Skyline Champion and Cavco Industries.

Maintaining lobbying balance in all this, we have MHARR representing smaller, regional HUD-Code housing manufacturers, and NAMHCO representing land lease communities nationwide.

***

31st ALLEN REPORT, ‘Green Jacket Policy’, & Meet PES!

Thursday, October 17th, 2019

October 2019; Copyright 20190; www.educatemhc.com

Perspective. ‘Land lease communities, previously manufactured home communities, and earlier, ‘mobile home parks’, comprise the real estate component of manufactured housing.’

This blog is the online national advocate, official ombudsman, asset class historian, researcher, education resource & communication media for land lease communities in North America!

To input this blog 7/or affiliate with EducateMHC, telephone Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Also email: gfa7156@aol.cm & visit www.educatemhc.com

Motto: ‘U Support US & WE Serve U!’ Goal: promote HUD-Code manufactured housing & land lease communities as U.S. source of affordable attainable housing! Call for next MHM class info.

INTRODUCTION: Three pretty disparate topics this time around. First; your last opportunity to be written into the 31st annual ALLEN REPORT, due for distribution in early 2020. Second; look to see more ‘green jackets’, worn by RV/MH Hall of Fame inductees, at state and national MH & RV events. And third; a little known but valuable and timely service available to land lease community owners/operators intent on improving their property holdings’ occupancy, profitability, resident relations, value, and other functions.

I.

Will You be in the 31st ALLEN REPORT?

If you, as a sole proprietor, or your partnership, company, or REIT, owns and or fee-manages five or more land lease communities, or 500+ rental homesites in one community, you’re eligible to be listed in the 31st annual ALLEN REPORT as one of the 500 largest property portfolio firms in North America.

Here’s the drill. Request an ALLEN REPORT questionnaire from EducateMHC by phoning the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764, or request it via email from gfa7156@aol.com Complete the questionnaire right away and FAX it to (317) 346-7158 or email it to the same address just cited. We already have many completed questionnaires on hand, as a result of the mailing effected during September. But there’s still room for YOU!

During the month of November we’ll compile the information reported in the completed questionnaires, and begin penning the annual ALLEN REPORT. As you likely know, or maybe don’t, the annual ALLEN REPORT – for the past 30 years, has been and continues to be, the sole compendium of pertinent benchmark statistics (e.g. occupancy, OERs, average site rents & much more), as well as emerging trends, pertaining to land lease communities (i.e. and before that, manufactured home communities & ‘mobile home parks’).

During December we’ll finalize the 31st annual ALLEN REPORT, for printing and distribution to those who’ve paid for it. How so? At present, that means subscribing to the Allen CONFIDENTIAL! business newsletter (i.e. the ALLEN REPORT is but one of a dozen Resource Documents distributed monthly, with that newsletter, throughout the calendar year). To learn more, visit www.educatemhc.com or phone Erin via (317) 738-3434.

You might also be interested to know; the ALLEN REPORT is archived and will, upon my eventual retirement, become part of the libraries at the RV/MH Hall of Fame in Elkhart, IN., and the Library of Congress in Washington, DC. So, take steps now to ensure your property portfolio’s continuing legacy into the future. Questions? Phone me at (317) 346-7156. GFA

II.

RV/MH Hall of Fame’s Green Jacket Policy

What follows here pertains to a small, but growing, number of men and women in the manufactured housing industry and land lease community ownership/operations. It’s the recently suggested ‘when and where all RV/MH Hall of Fame inductees should wear their distinctive green jackets.’

Green sports jackets have long been integral to the formal recognition of individuals inducted into the prestigious RV/MH Hall of Fame in Elkhart, IN. And heretofore, green jackets have rarely been worn and seen at other than at one RV/MH Hall of Fame event, the annual Induction Banquet, during early August, at the facility.

Here’re the appropriate occasions when the RV/MH Hall of Fame green jackets may be worn:

• At the annual RV/MH Hall of Fame Induction Banquet

• At all state and national RV or MH annual industry functions

We’ve long encouraged RV/MH Hall of Fame inductees to wear their green jacket at the annual Networking Roundtable. Now it’s officially appropriate to wear it at MHI’s annual meeting, the manufactured housing congress, SECO Symposiums, Rent Manager’s annual soiree, as well as various state and provincial business and social functions.

Have you been in the manufactured housing (&/or recreational vehicle) business for 25 or more years, and know three individuals who’ll pen letters of recommendation describing your contributions to the industry and or realty asset class? Then visit the RV/MH Hall of Fame online, and download the application and instructions there, to be considered for induction. And if you want to recommend someone for induction, follow the same procedure. Ten individuals are inducted every August, five from MH and five from RV industries.

III.

Professional Community Evaluation (‘PCE’) Service Available!

EducateMHC announces its’ Professional Community Evaluation (‘PCE’) service is available for land lease communities nationwide.

During past decades, Mystery Shopping services have been offered by various firms, but no one ever ‘went the extra mile’ to observe, evaluate, and report on entire land lease community operations, to include:

• Telephone sales and leasing performance evaluation via grading and reporting

• On-site sales and leasing performance evaluation via grading and reporting.

• Curb appeal outside, and throughout the targeted land lease community, documented with photographs

• Comparison of operating statements with industry norms, highlighting differences, and suggestions for correction or improvement

• Documentation and evaluation of print and online marketing in light of product, place, price, promotion, people, and process

What does PCE service cost? Each assignment is quoted on an individual basis, considering size and location of the property, scope of evaluation services desired, number of properties to be evaluated, and more. PCE services are appropriate for new acquisitions, as well as mature property and portfolio holdings.

For more information, contact Erin Smith at EducateMHC via (317) 697-1717

There’s Only ONe HUD-Code HOusing Shipment # Each Month (&) ‘State of MHIndustry & LLCommunities!’

Friday, October 11th, 2019

October 2019; Copyright 2019; www.educatemhc.com

Perspective. ‘Land lease communities, previously manufactured home communities, and earlier, ‘mobile home parks’, comprise the real estate component of manufactured housing.’

This blog is the online national advocate, official ombudsman, asset class historian, researcher, education resource & communication media for land lease communities in North America!

To input this blog &/or affiliate with EducateMHC, telephone Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Also email: gfa7156@aol.com & visit www.educatemhc.com

Motto: ‘U Support US & WE Serve U!’ Goal: promote HUD-Code manufactured housing & land lease communities as U.S. source of affordable attainable housing! Call for next MHM class!

INTRODUCTION: Time for a change! With new leaders coming on board at the Manufactured Housing Institute (‘MHI’), now is the ideal time to begin reporting monthly new HUD-Code housing shipments in the same manner as IBTS, MHARR, HUD, & EducateMHC! This reporting discrepancy was first reported, in the Allen Letter, during Summer of 2015. Let’s start year 2020 off right! And ‘State of the MHIndustry & LLCommunity Asset Class’? I share this message a dozen times each year. Suggest your state MHAssociation invite me to share it with you.

I.

Rely on EducateMHC’s Monthly ‘#s & $s’ Report Documenting New HUD-Code Housing Shipments!

Every month, the Institute for Building Technology & Safety (‘IBTS’), HUD’s contractor for researching and reporting manufactured housing shipments, distributes a statistical report to subscribers. For example, on or about 1 October, the IBTS reported 8,646 new HUD-Code singlesection and multisection homes shipped nationwide during the month of August 2019.

HUD reports the same total: 8,646
MHARR reports the same total: 8,646
NAMHCO reports the same total: 8,646
EducateMHC reports the same total: 8,646

MHI reports 8,631 new HUD-Code homes shipped

What’s wrong – and ‘why’, with this statistical reporting picture? If five out of six reporting entities agree on the monthly shipment volume, ‘why’ the outlier’s different total number?

Has to do with the ‘accounting or not’ of DESTINATION PENDING (‘DP’) units – new HUD-Code homes not scheduled for delivery, to any particular destination, at the time of reporting #s to the IBTS. MHI, for decades, has reduced IBTS’ monthly total (e.g. 8,646 units during August) by that month’s number of DP units (e.g. -24), then added back the number of DP units from the previous month (e.g. +9 from July), to arrive at its’ own reported volume of new HUD-Code homes shipped = 8,631. Rationale for this process? Likely, an attempt to account for eventual distribution of all DESTINATION PENDING units. The ‘problem’ with that thinking however, is IBTS has long known some DP units will almost never be distributed, i.e. unit accounting when a plant closes oft exposes DP units, months and years after their fabrication.

So, what’s the logical resolution to this reporting dilemma that only adds to the consternation, by federal legislators and regulators, over how one industry – the manufactured housing industry, appears to be incapable of agreeing on just how many new HUD-Code homes are shipped monthly throughout the U.S.? The answer, in this industry observer’s opinion, is for all six reporting entities to agree on monthly shipment volume, beginning with IBTS published totals.

So, where can one obtain a copy of the EducateMHC Monthly ‘#s & $s’ Report – showing how all six reporting entities report each month’s shipment volume? Visit www.educatemhc.com

II.

State of the MHIndustry & LLCommunities

This past week saw the 10th anniversary celebration of the SECO Symposium. Held at the Airport Hilton in Atlanta, GA., it was attended by nearly 500 manufactured housing and land lease community businessmen and women. The Big Three C: HUD-Code manufactured housing firms (Clayton Homes, Skyline Champion, & CAVCO Industries), and a hefty number of small to mid-sized land lease community owners/operators, many of whom are ‘new to the business’, characterized the group at large. The only national manufactured housing/land lease community advocate present was the National Association of Manufactured Housing Community Owners (‘NAMHCO’) – lobbyist for the real estate asset class in Washington, D.C.

Also interesting to note that all MH trade publications of note were present at SECO:
• MHInsider magazine, a product of MHVillage & DATACOMP in Michigan
• Manufactured Housing Review, a quarterly online publication
• Allen Letter and the Allen CONFIDENTIAL! Published by at www.educatemhc.com
As has been the case in years past, I was asked to deliver the ‘State of the Manufactured Housing & Land Lease Community Real Estate Asset Class’ address. But this time around, instead of focusing entirely on statistics and emerging trends, I shared highlights of the past year, in terms of performance and pressing concerns. Here goes:

• 96,555 new HUD-Code homes were shipped during year 2018. According to the U.S. Census Bureau, they were valued (retail) at $6.4billion, or $66,200/manufactured home (close to the $70,000/MH figure oft quoted within the MHIndustry). Production (wholesale) value of the year’s shipments, based on MHI’s research & 2013 baseline, pencils out to be $4.2 billion or $43,126/MH, leaving a $2.2 billion margin or 23,000 per new manufactured home. It’s time for an update to the year 2013 baseline $ factor.

• How many new HUD-Code homes will be shipped by year end 2019? Time will certainly tell, but it’ll likely NOT eclipse the 100,000 ‘goal’ of the past two years. Why? Continuing lack of reasonable access to chattel capital for new HUD-Code home sales transactions on-site in land lease communities! Here we’ve moved up from only 24% of new HUD-Code homes shipped into LLCommunities in 2009, to more than 40% by year end 2015 – and now likely stalled.

• During year 2019 we celebrated the 30th anniversary release of the ALLEN REPORT (a.k.a. ‘Who’s Who Among Land Lease Community Portfolio Owners/operators Throughout North America!’). Now, during October and November we’re researching the data needed for the 31st ALLEN REPORT, scheduled for distribution during January 2020. If you’re a property portfolio owner/operator and have not yet submitted the completed questionnaire used to compile said report, please let me know via gfa7156@aol.com and I’ll send you another blank one. And if you’ve not yet been listed among the ‘known 500 portfolio owners/operators’ – who own and or fee manage five or more communities, and or 500+ rental homesites – whether MH & RV or purely MH, get listed now! Also phone (317) 346-7156.

• Beware national rent control legislation making its’ way through Congress! It’s written to include anyone owning/operating two or more land lease communities. How to fight this? Belong to and support your state manufactured housing association, and encourage staff to keep you informed, and how you can help fight this national plague! How to know if your local housing market is guilty of bringing unwanted landlord/tenant legislation to our doorstep? Use the traditional 3:1 ratio. Market survey the 3BR2B conventional apartments in your area (e.g. $900/month), then divide by ‘3’ to estimate what land lease community rental homesite rent might be (e.g. $300/month). If site rates in your local housing market are at or above a 2:1 ratio (e.g. $450+/month), then it’s possible these rents are part of the focus creating this challenge.

And there was more, but you have the gist of the presentation here.

Be Aware & Beware of ‘Place to Prosper’ Act (&) GASLIGHTING

Friday, October 4th, 2019

October 2019; Copyright 2019; www.educatemhc.com

Perspective. ‘Land lease communities, previously manufactured home communities, and earlier, ‘mobile home parks’, comprise the real estate component of manufactured housing.’

This blog is sole online national advocate, official ombudsman, asset class historian, researcher, PM education resource & communication media for land lease communities in North America!

To input this blog &/or affiliate with EducateMHC, telephone Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Also email gfa7156@aol.com & visit www.educatemhc.com

Moto: ‘U Support US & WE Serve U! Goal: promote HUD-Code manufactured housing & land lease communities as U.S. source of affordable attainable housing! Call for next MHM class.

INTRODUCTION: As an industry, we were ‘asleep at the switch’ when the S.A.F.E. Act was legislated a decade ago. Let’s not be guilty of similar inattention and inaction as national rent control makes its’ way through the halls of Congress! MHI/NCC. When will your ‘research’ translate into action? And, wouldn’t it be helpful to ‘really know’ the $ details about ‘home & land’ finance of manufactured homes, as well as for ‘home only’ loans? Perhaps 21st Mortgage Company will ‘take the lead’ here, and report $ facts and trends relative to the latter type MH lending. Finally; GASLIGHTING. This has been a trade news blemish awaiting attention for a while now. Manufactured housing and land lease community aficionados owe it to themselves, their employees, and customers, to rely solely on reliable trade news reporting of facts and trends, not salacious op/ed posturing by an outlier!

I.

Be Aware of, & Beware, the ‘Place to Prosper’ Act!

“The Place to Prosper Act calls for a cap of 3 percent or the Consumer Price Index (‘CPI’), whichever is greater, for housing markets nationwide. (The rule would apply specifically to landlords with five or more residential properties or TWO OR MORE MANUFACTURED HOUSING PARKS)…” (Emphasis added. GFA) Per AOC, Bernie Sanders, et. al. Will let you know more when we hear and learn more!

II.

INTERESTING MH $$$ NEWS – Revisited

CFPB’s recently-released HMDA Summary description of 99,200 ‘home & land’ mortgages and 51,000 ‘home only’ loans, according to some freelance manufactured housing consultants, understates the real total, given that an unspecified number of independent third party lenders allegedly don’t report this $ data to the CFPB. However, knowing the manufactured housing industry shipped 96,555 new HUD-Code homes during year 2018, the 150,200 total loans underwritten during that same period of time, appears logical when including resale homes in the mix.

III.

GASLIGHTING

…is a psychological tactic, in writing and speaking, used to (attempt to) gain power over someone – or a group, causing them question their perception, reality, sanity, even memory, of how they believe things are and should be. And I suppose, at times, all of us are guilty of this practice, to some degree, as we deign to influence individuals we interact with during business and social intercourse. However, when I (sometimes) read a particular manufactured housing trade publication (Not MHInsider or Manufactured Housing Review), it appears their op/ed penmen go out of their way to gaslight a particular national advocacy entity – one they should be supporting, and various targeted individuals. Point? Be discerning as to what you read, and who you listen to, in today’s fractious world of politics, business, and certainly, manufactured housing. In truth, you’re better off not reading some news tripe, but concentrate on good and uplifting news about the industry and realty asset class we embrace as businessmen and women.

Is there an acid test to discern gaslighting masquerading as journalism? Yes, three principles of journalism posed as questions:

• Is what you read or hear, the reporting of facts – or just the source’s opinion?

• Check writer/speaker’s resources – or is it past commentary used out of context?

• Is read or spoken word easily understood, by dint of plain style communication?

So, next time you read any of the nearly half dozen manufactured housing trade publications afoot these days, ask those three questions as you read, to learn which ones are worth the time and effort, going forward, and which is not. It’s as simple as that. So, ‘Just Do It!’

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