Exquisite Corpse, & 10 Key Questions….

Blog # 227 Copyright 2013 6 January 2013

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

I.

EXQUISITE CORPSE

II.

Inquiring Minds Would Like to Know

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I.

EXQUISITE CORPSE

Recently, while researching party games, bar tricks, brain teasers, and other amusements, I came across a poetry game titled ‘Exquisite Corpse’, intended for three or more players.

It goes like this: ‘Each player writes an article and an adjective on a sheet of paper, then folds the paper in half, to cover the two words. Players exchange folded papers, unfolding the one received, and adding a noun to the paper before refolding it. Players repeat the procedure (exchanging folded papers), adding a verb; then again, with yet another article and adjective. And the next exchange involves adding yet another noun. Players exchange papers one last time; with each one reading aloud, to the general bafflement of everyone: the ‘article, adjective, noun, verb, article, adjective & noun’ written on the paper just received!’ From The Dictionary of Wordplay, by Dave Morice, Teachers & Writers Collaborative , NY, 2001, page # 68.

What got my attention about this game, besides it being a creative writing exercise, was the unintended, but near unmistakable, not so funny parody (usually a ‘humorous imitation’) of the manufactured housing industry, late in the 20th Century, and now, early in the 21st Century.

It goes like this: ‘Three or more HUD – Code home manufacturers independently design, build and ship lines of new homes, with little to no market research input from prospective homebuyers in local housing markets where the homes are to be sold. (This is, by the way, how the industry ‘keeps score’, by counting the number of new homes ‘shipped’ rather than ‘sold’ beforehand). They then maybe make adjustments to these home designs, and how/where they’re marketed, based on perceptions that may or may not have basis in reality and or practicality, e.g. the land – and – home package (i.e. ‘big boxes = big bucks’) debacle of the late 1990s; followed by a supposed ‘return to the roots of affordable housing’ (i.e. ‘smaller boxes = smaller bucks’); even the Community Series Homes or CSH Models wavelet of the past five years, to whet and feed the appetite of land lease lifestyle community portfolio owners/operators for new homes, to fill their share of an estimated 250,000 vacant rental homesites nationwide. The ‘exquisite corpse’? A mishmash of home designs and local marketing ploys, based on the creativity and perceptions of said home manufacturers, more so than the ‘needs& wants’ of the customers they seek to sell and serve!

Proof? When was the last time you saw a 30 second ad on any major TV network during prime time, advertising any manufactured housing brand of home construction? It simply doesn’t happen in our line of work, sad to say.

Of course, the often debated role – or absence of, chattel (personal property) finance, since the turn of the Century, also plays a critical role in the word picture painted in the previous paragraph. And, if interested, you’ll find a succinct, comprehensive commentary on that very topic, in the soon to be released (January 2013) 24th annual ALLEN REPORT.

Want to obtain a copy of the 24th annual ALLNE REPORT, a.k.a. ‘Who’s Who Among Land Lease Lifestyle Community Portfolio Owners/operators Throughout North America!’? Well, it’s FREE with your paid subscription to the Allen Letter professional journal ($134.95/year = 12 monthly issues – each containing a different but valuable Signature Series Resource Document, e.g. annual National Registry of RE & Chattel Lenders, ‘Who Ya Gonna Call? List of Freelance Consultants’, etc.); or, for $500.00 per standalone copy. To order, simply phone the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. By the way, this year’s 24th ALLEN REPORT also features a first time ever published list of ‘25 of the Most Influential Individuals in the Manufactured Housing Industry & Land Lease Lifestyle Community Asset Class’. All named individuals were recommended by their peers!

II.

Inquiring Minds Would Like to Know…

Questions that might not yet be keeping us awake at night, but ones that do make us routinely wonder, ‘Is anyone listening?’:

As many prepare to attend this year’s series of manufactured housing shows in Louisville, Tunica, and elsewhere, The Question that begs answering is this: ‘Given the real need (i.e. an estimated 250,000 vacant rental homesites in land lease lifestyle communities throughout the U.S.), and existence of Community Series Homes (a.k.a. CSH models, designed for in – LLLCommunity siting) from most major HUD – Code home manufacturers, WHY do the majority of new homes on display at said shows continue to be ‘big box = big bucks’ Development Series Homes that, in part, helped bring the manufactured housing industry to its’ knees, annual shipment count wise, at the turn of the 21st Century? That’s 13 years ago, and we still haven’t ‘changed our stripes’, nor have annual shipment numbers of new homes built, improved one iota. Why?

National Advocacy. ‘Are we getting our money’s worth?’ – dues and PAC Fund wise, by continuing, after 27 years, to support two somewhat overlapping national, not for profit, manufactured housing trade entities in and near our nation’s capitol? This is not, by any means, the first time this vital question has been raised from and among the businessmen and women grassroots of the HUD – Code manufactured housing industry. Or, ‘is there a better way’ on the horizon? Possibly, one overarching national body, Advocating the interests of all segments of the MHIndustry, including the land lease lifestyle community realty asset class; or two: one representing all HUD Code manufactured housing production & distribution segments of the industry; another representing all the real estate development and investment – related segments. Hmm?

Given the unique nature and circumstances of 21st Mortgage Corporation’s C.A.S.H. Program, (i.e. filling vacant rental homesites in land lease lifestyle communities with Clayton Homes purchased and mortgaged by 21st, in partnership with the property’s owner/operator) when will other independent, third party chattel finance firms (e.g. Triad, CU Factory – built Housing, & U.S. Bank – Manufactured Housing Finance) roll out similar LLLCommunity – friendly programs? Ask them!

Another question, related to the topic in the previous paragraph, has to with your firm’s chattel lending program, on – site and otherwise. Is it fully compliant with today’s plethora of onerous financial regulatory measures, e.g. relating to the S.A.F.E. Act, Dodd – Frank Legislation, AML, and more? As most already know, there’s ‘only one game in town’, at present, to teach manufactured housing – related compliance, and that’s via Rishel Consulting @ (217) 971-3968. Believe me; I wish there were additional credible resources to mention here. If there is, let me know via the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 or gfa7156@aol.com

Has the time arrived to seriously consider founding a national captive insurance entity for land lease lifestyle community owners/operators? If so; or even ‘if not’, let Jay Zandman know of your interest, so as to be ‘first in line’ if and when that time arrives: (800) 211-0468 X 117 or jayz@manning-nozick.com.

When will 21st Mortgage Corporation’s C.A.S.H. Program be opened to other HUD – Code home manufacturers? It’s believed this would enhance the program’s attractiveness to land lease lifestyle community owners/operators with longstanding home manufacturer relationships elsewhere; and, be an obvious nod to ‘inter – manufacturer cooperation and, by extension, Industry Unity’. By the way, if no one has contacted you regarding you participating in the C.A.S.H. Program, let Lance Hull know via (865) 523-2120 X 1218, or email him your LLLCommunity information & needs: LanceHull@21stMortgage.com

When will the HUD – Code manufactured housing industry provide its’ homebuying customers, particularly those living in homes sited within land lease lifestyle communities (i.e. as site lessees), a viable secondary market, replete with market comparable valuations of their homes, a real time means of marketing and selling these homes, escrow closings, even the presence of trained and licensed professional sales staff? This question, like a few before it (e.g. national Advocacy and captive insurance) should be routine fodder at periodic national MHInitiative® gatherings of businessmen and women, paying their own way, to have a role shaping and effecting national policy and issues such as: viable secondary market, advocacy, captive insurance, and more. Which, of course raises this question: ‘When will MHIndustry leaders finally, for the first time since National State of the Asset Class caucuses (predecessor to MHInitiative® concept) were held in Tampa, FL. on 2/27/2008, and in Elkhart, IN., on 2/27/2009? What will YOU be doing on 2/27/2013? That’s one day after MHI’s annual Legislative Conference, in Arlington, VA., ends. Hmm. Would YOU be willing to remain there an extra day to raise, parse, and address some of the questions posed here, and others as well? I sure would! If you agree, phone our salaried national leaders at MHI: (703) 558-0678 or 0666; and, MHARR @ (202) 783-4087. Leave a message if necessary….

Why aren’t more owners/operators of small to mid – sized land lease lifestyle communities buying and seller – financing new HUD – Code homes on – site? Possible reasons: new homes priced too high for the local housing market (This is where home manufacturers need to learn, using Annual Gross Income & Annual Median Income figures, to calculate ‘affordable’, even ‘risky’ Price Points, on homes going into specific – defined by postal zip code – local housing markets!*1); real concerns about being compliant with the S.A.F.E. Act and other related finance regulatory measures; too much trouble ‘being all things to all people’, e.g. wholesale home buyer, marketer, seller, and seller – finance source; unfamiliarity with other options (e.g. lease – option, even leasing of homes as apartment units); and that rare, good working relationship with a local independent ‘street’ MHRetailer willing to sell new homes into LLLCommunities.

How can we, as an industry and realty asset class, effectively attract more private investors, interested in safe investments with yields attractive to them, as well as to land lease lifestyle community owners/operators, and our actual homebuyers?’ Perhaps this pithy question has a two-step answer. First; as a realty asset class, we must provide access to well – constructed Community Series Homes affordably priced, properly installed on fully serviced rental homesites in LLLCommunities owned and managed by individuals and firms committed to providing an ‘attractive value proposition to homebuyer/site lessees via rent rates in line with what the local housing market indicates’. AND secondly, perhaps the time has arrived (for us?) to create a new, national fund, to finance the purchase of new CSH model homes by reputable, qualified LLLCommunity owners/operators (i.e. Similar to existing P2P & P2B internet lending platforms). If you’re reading this, and are excited about the prospect of creating such a fund, contact Spencer Roane, MHM® via spencer@roane.com or via (678) 428-0212.

And the final questions of the hour are these: Are you, or your firm, direct, dues – paying members of the Manufactured Housing Institute (‘MHI’) and or its’ National Communities Council (‘NCC’) division, both Advocating in behalf our MHIndustry and the land lease lifestyle community realty asset class? If the answer is NO, then phone (703) 558-0666 in the first instance; and (703) 558-0678 in the latter instance, to converse with Dick Jennison and Jenny Hodge respectively. Tell ‘em ‘George sent me!’ And, if you’re reading this, and are a LLLCommunity owner/operator, and interested in the rare opportunity to be a Charter Member of the Manufactured Home Communities Association of North America, or MHCA in short, simply phone the aforementioned MHIndustry HOTLINE, and provide your contact information. Remember, the new, not for profit MHCA is being launched to continue the ‘statistical Research & comprehensive Resource servicing’ of land lease community owners/operators nationwide, and maybe Canada; services heretofore provided by GFA Management, Inc., dba PMN Publishing. NOTEs. It’s hoped and planned the MHCA will effectively complement national Advocacy efforts of and by MHI, as long as one group of NCC members (e.g. largest property portfolio ‘players’) don’t preempt legislative and regulatory concerns of small to mid – sized owners/operators of land lease lifestyle communities. And, if you’re wondering ‘Why didn’t MHI absorb aforementioned ‘statistical Research & comprehensive Resource servicing’ of LLLCommunities when given the opportunity, on two separate occasions? Ask them, when you phone to join as a direct, dues – paying member.

End Notes:

1. Easiest & best way to calculate ‘affordable’ & ‘risky’ Price Points for new & resale homes, of any type, to be sited within or outside LLLCommunities, is to use the ‘Ah Ha! & Uh Oh! Worksheet’, available FREE upon request, by phoning the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

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George Allen, CPM®Emeritus, MHM®Master
Consultant to the Factory – built Housing Industry,
The Land Lease Lifestyle Community Asset class &
Affordable Housing Purists & Enthusiasts Nationwide
Box # 47024, Indpls, IN. 46247
(317 346-7156

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