Landlease (mfd. home) Community Owner/operator?

Landlease (nee manufactured home) Community Owner/operator?

Consider yourself ‘toasted’, in more ways than one….

I.

Monday evening, 23 August, at the famous Rosewood Restaurant in Rosemont, IL., two dozen Chicago area landlease community (‘LLCommunity’) owners/operators gathered to socialize. Think Ed Zeman, Barbara Davis (Jennings Realty), Chuck Fanaro, Rick Camboni, Dennis Ohnstad, Eric Hagen, Ed Biskind, Brad & Matt Shechtman, John Zajicek, Greg O’Berry, Ken Hauck, Ben Kadish, John Rogosich, and nearly a dozen others intimately involved in this unique real estate asset class.

A highlight of the evening was the proposal and sharing of a formal toast to the memory and legacy of the late Bud Zeman, fellow LLCommunity owner, Chciago businessman, and friend to most of the folk gathered that evening. “To Bud Zeman!”

Shortly thereafter, a first – ever formal toast was proposed and shared, re: ‘The Community Owner!’ To the best of this industry observer’s recollection, this is the first time such a tribute has been offered publicly. It went like this:

Till that final home site if filled,
And every last bill completely paid

With mortgage refinancing approved
And confident our dollars are not delayed

We’ll continue to ply the trailer trade
With affordable homes factory made

Knowing so well, how lesser men are oft afraid
Of this business path & how they might be portrayed

So to you, my friends and fellow free holders,
I offer this toast to our humble but oh so worthy trade!

The September issue of the Allen Letter professional journal will contain a lagniappe (‘freebie’) 3X5 professionally printed Toast Card containing this historic toast. To subscribe, phone (317) 346-7156 for 12 monthly issues @ $134.95/year subscription.

Postscript. If you bridle at the use of the word ‘trailer’ in the toast above, feel free to substitute the word ‘housing’. Penned it as I did, to pay tribute to our industry’s genesis, well realizing our future is certainly with the latter. GFA

II.

Last week’s #100 blog, at this website, titled UNBRIDLED OPTIMISM & BOLD INITIATIVES, garnered dozens of reader responses (100% positive & encouraging!), far more than any of the previous 100 postings! For example: “I hope you continue this after you retire, as it’s good to have the most up to date info coming at us in this format. Looking forward to all the news you can tell. Thanks for all you do for our industry.” DR.

With that type of encouragement, I’m emboldened to borrow material from blog # 100, and mate it with insights garnered during Precision Capital Funding’s two day Chattel Finance Workshop in Chicago last week. Now, this is pretty heady stuff, so read carefully – reflect thoroughly – react appropriately…

GIVEN 1) The MHIndustry realized, 2 June 2010, during the Manufactured Housing Finance Roundtable, in Elkhart, IN., it would be ‘On its’ own’, from that point forward, and for the foreseeable future, where chattel (personal property) finance is concerned. AND, 2) Now, the LLCommunity asset class senses near abandonment, where third party chattel lending sources are concerned; SO, 3) Property Owner Finance (nee. self – finance), via ‘captive finance’ & or ‘buy here – pay here’ methodology, might not only continue as near term salvation for portfolio owners/operators across the U.S., BUT 4) Possibly ensures the very preservation and continuation of the MHIndustry at large! Think about that progression and conclusion. Do you agree or disagree?

How’s this deliverance unfolding? In fairly simple fashion. First, we’ve already seen Property Owner Financing of new & resale homes, on – site in LLCommunities, balloon in volume during the past decade, from maybe a few million dollars in ‘paper’ held by LLCommunity portfolio owners/operators a decade ago, to more than $3 ½ billion by year end 2009; and some now estimate that total to be $5+ billion dollars and growing! As more and more conscientious LLCommunity owners/operators take steps to bring existing chattel loan portfolios into compliance with state and federal laws and regulations; and better prepare themselves, through training and licensure, to effectively originate and underwrite new chattel home loans going forward (either in – house, with assistance of a financial services firm, or setting up separate LLCs to do so…), it’ll only be a matter of time before they provide (if not doing so already) said financing for FSBO (For Sale By Owner) deals occurring within their LLCommunities; and, when the time is right, sell off their ‘book’ of compliant loans (to existing, and new firms being formed to do this), realizing new capital for originating more home loans!

Want to actively participate in a national, public forum, to learn more about what was just described, and make your views, modus operandi, and ideas known? Attend the 19th International Networking Roundtable in Phoenix, AZ. @ 15 – 17 September 2010! ManageAmerica/Origen (816) 246-5053, will keynote: ‘Getting Chattel $ to Return!’ And Precision Capital Funding will be holding forth on ‘captive finance’ per se. For information on PCF’s next two day workshop on this subject, phone (217) 971-3968. Furthermore, it’ll be telling, to see how many of the ‘Big Four + One’ third party chattel finance lenders are present, expressing interest in LLCommunity business. To register for the Roundtable, do so via this website or phone (317) 346-7156. Mention this blog posting and pay a lesser registration fee! A final word on this $$$ subject: Only a few copies of the Manufactured Housing Finance Primer remain. Three dozen copies were purchased this past week! Order yours; phone (317) 346-7156. Only $29.95 postpaid!

III.

‘MHI’s Three Point Plan to Move the Manufactured Housing Industry Forward’ was the headline to the Manufactured Housing Institute’s Quick Links newsletter dated 14 May 2010. And shortly thereafter it was a major topic in Blog # 87, titled: ‘MHI’s Three Point Plan; CONSPIRACY vs. Suicide, & Overlooked Opportunities!’

So, what were these three points? In MHI’s words: “improving financing for our customers; advocating for the implementation of updates to the manufactured housing building code (Think Manufactured Housing Improvement Act of 2000, a.k.a. MHIA @ 2000. GFA), ‘keeping our homes competitive’ (this phrase added since May. GFA); and, protecting preemption of the federal building code.”

When I requested a three month update from MHI, I was reminded by Thayer Long, that members, at their June meeting in Washington, DC., “lobbied representatives on the GSE’s failure to properly implement their ‘duty to serve’ the manufactured housing industry” in accords with the Housing Economic Recovery Act of 2008 (‘HERA’).

Furthermore, Members of Congress were alerted that 60% of manufactured home owners rely on personal property (chattel) lending, and during the past two decades, MH has represented 21% of the national housing market. But now the FHFA’s (‘Federal Housing Finance Agency’) proposed rule stymies such financing for manufactured housing, and Congress assistance is needed to direct that agency to modify their proposed rule, and require GSE’s (‘Government Sponsored Enterprises’) to develop personal property lending products as part of their duty to serve the MHIndustry.

MHI members also lobbied on S.A.F.E. Act (‘Safe And Fair Enforcement of Mortgage Licensing) reform; specifically to exempt manufactured housing retail activities from the S.A.F.E. Act. For more information on these topics, visit manufacturedhousing.org

IV.

What do you call them? A recent communiqué from CNBC begins: “They’ve been called McMansions, Starter Castles, Garage Mahals, and Faux Chateaus but here’s the latest thing you can call them – history.” The story goes on to describe the apparent demise of “…garishly large homes, which are generally over 3,000 square feet and built very close together.” According to Wikipedia “They’re tacky, they lack a definitive style and they have a ‘displeasingly jumbled appearance.’” While I don’t anticipate a race by disaffected McMansion homebuyers to factory – built housing, motivated by national economic malaise, such retrenching could, in time (After many of the 4,000,000 ‘repo’ site – built homes are resold), be a harbinger for increased sales volume for HUD Code homes! Did I say ‘sales’? It’d be nice, timely and fitting, when this renascence occurs, to finally cease talking ‘shipments’, and get in accords with the rest of the housing market, and start talking ‘sales’.

Speaking of terminology. Has anyone else noticed? One of our national advocacy bodies long referred to non – manufacturing segments of the HUD Code manufactured housing industry as being ‘aftermarket’. That term long grated my sensitivity (Think of the synonyms) but few, or so I thought, listened to my aversion for the label. But earlier this year, 2010, I started hearing those same segments now referred to as being ‘post production’. Now, I can handle that. Makes me wonder though, how OEM (original equipment manufacturers), and other suppliers of housing components, feel out there in limbo land, being neither HUD Code home manufacturers or post production. Hmm. But then, we’ve learned to live with two identical acronyms during the past several years: Think MHCC. You know; short for Manufactured Housing Consensus Committee (relative to MHIA@ 2000); but as well, Urban Land Institute’s Manufactured Housing Communities Council. And then there’s MHARR. For sure, the letters stand for Manufactured Housing Association for Regulatory Reform, but the suggestion is out there, to improve our industry’s image with a comprehensive Manufactured Housing And Resident Relations (a.k.a. customer service) program! Plus, how many renderings of the letters, among state MHAssociations, are there for IMHA?

IV.

Denigrate. Know the definition of the word? Goes like this: “blacken in reputation; defame” (from New American Webster Handy College Dictionary, p.187).
On – site LLCommunity managers and fee property management firms were, in my opinion, denigrated in a column this month, published in a trade publication that’ll remain unnamed here. I decline to direct any fresh traffic their way. If you read this tripe, and disagreed with the writer – but haven’t contacted the editor/publisher to express your views, inaction only serves to encourage future defaming of property managers and firms. I’ve written, as have LLCommunity owners from California to (I’m told) Florida…

V.

Well, that does it for this week. Kids are back in school; the selling season begins for homes in Sunbelt regions; and, we have a very heavy business meeting schedule ahead of us. International Networking Roundtable (‘INR’) in Phoenix, AZ. @ 15 – 17 September; Manufactured Housing Institute’s (‘MHI’) annual meeting is in Denver, CO. @ 26 – 28 September – with National Communities Council (‘NCC’) division convening 27 September; Urban Land Institute (‘ULI’) members travel to Washington, DC. @ 12 – 15 October – with Manufactured Housing Communities Council (‘MHCC’) convening 13 October; and the Manufactured Housing Mid – Atlantic (5) States Convention takes place this year, in Albany, NY @ 26 & 27 October. Be sure also, to mark your calendar to attend the Louisville Manufactured Housing Show (formerly the Midwest manufactured Housing Show), in Louisville, KY. @ 13 – 15 January 2011. For more information on this latter venue, contact Dennis Hill via (770) 587-3350.

*****
George Allen, Realtor®, CPM®Emeritus, MHM
Consultant to the Factory – built Housing Industry &
The Landlease Community Real Estate Asset Class
Box # 47024
Indianapolis, IN. 46247
(317) 346-7156

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