92,902 New HUD Code Homes Shipped in 2017 & Time for New Tactics & Improved Strategy
Blog # 476; Copyright @ 11 February 2018; community-investor.com
Perspective. ‘Land lease communities, previously manufactured home communities, & ‘mobile home parks’, comprise the real estate component of manufactured housing.’
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INTRODUCTION. Never before have we lived and worked in such exciting times!
Manufactured housing shipment volume continues to rise – albeit slowly. More and more new HUD-Code homes are being sold, and often seller-financed, within land lease communities nationwide! Beyond the exciting developments described in the following paragraphs, what we need now as an industry is to, STOP WORRYING about what we call ourselves, and what outsiders call us, and concentrate on WORKING TOGETHER to Sell, Ship, & Seller-finance More HUD-Code Manufactured Homes! In just Four Words, we are 1) HOUSING, & 2) LAND LEASE COMMUNITIES! Nuff said!
Here’s ‘the Question of the Month! ‘Which large U.S.- based portfolio owner/operator of land lease communities purchased ten such properties, in Canada, from their Canadian owner – and is keeping the acquisition Very Quiet? Answer? When the identity is made known, you’ll likely read about it First in the Allen CONFIDENTIAL! business newsletter or the Allen Letter professional journal. To ‘subscribe’, affiliate with the Community Owners (7 Part) Business Alliance, or COBA7. See masthead information above…
92,902 New HUD-Code Homes were Shipped During 2018, with an Estimated Production Value of $4,000,000,000.00 (Yes, that’s ‘billions’ of dollars!). Now the Big Question Emerges: When Will the Manufactured Housing Industry Likely Reach Its’ 200,000 Homes ‘Sweet Spot’? Think about that….
Yes, you read that right! HUD’s contractor, the Institute of Building Technology & Safety (‘IBTS’), provided monthly new manufactured housing shipment totals throughout 2018 – unadulterated by ‘minus & plus’ shenanigans with DESTINATION PENDING units each month. Then HUD, MHARR, & COBA7 totaled said monthly shipment totals to realize the 92,902 annual total for year 2018! And that’s the 2017 annual MH shipment total that’ll be written into the industry’s official archives.
Furthermore, using MHI contractor Dr. Stephen C. Cooke’s ‘production value’ of $43,126 per housing unit – based on year 2013 ‘shipment # & $ data’ – it pencils out that those 92,902 new HUD-Code homes are valued at approximately $4,000,000,000.00!
Here again is that timely question: At the current rate of new manufactured housing shipments, from year 2009 thru 2017, when will the manufactured housing industry likely hit its’ ‘sweet’ spot’ of 200,000 units? Answer? That’s the headline story in the March 2018 issue of the Allen Letter professional journal – as well as a key news bite in the same monthly issue of the Allen CONFIDENTIAL! (‘TAC!’) business newsletter. Seriously. We have this figured out. Sure it’s not ‘carved in stone’, but makes perfect sense when one researches the numbers and trends. You don’t want to miss this story!
Again, if not already receiving the Allen Letter or TAC!, but would like to do so, simply phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764, or email me via email@example.com.
‘A Call for New Tactics & Improved Strategy’
…to restore reasonable access to chattel capital for on-site financing of new HUD-Code home sales transactions within land lease communities; and, increase the number of new HUD-Code homes shipped monthly – especially into this unique, income-producing property type, i.e. 24% in 2009; 40% in 2015; & 75% by 2020!
This CALL initially went out during January, beginning with the historic meeting among dozens of land lease community owners, at the Louisville MHShow, on 17 January 2018. If you didn’t receive a copy of this ‘Call for New Tactics & Improved Strategy’ – you should want one. Simply, again, phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764, or email me via firstname.lastname@example.org.
Among the six recommended ‘Further Action’ recommendations, listed therein, were these two:
• “Land lease community owners come together to create and use a hybrid form of HUD-Code housing chattel finance, using time-tested parameters of existing loan programs, to create a WIN, WIN, WIN situation for lenders, homeowners/site lessees, and land lease community owners seller-financing homes on-site.”
• “Land lease community owners, if need be, to retain services of a Washington, DC., manufactured housing consultant, ensuring these chattel finance concerns are front-and-center at all FHFA & GSE meetings.”
Well, the first one materialized at the aforesaid 17 January meeting in KY. A second meeting will occur during the Tunica MHShow! Want to attend? If you seller-finance new and or resale manufactured housing on-site in one or more land lease communities, You Need to be Present! To do so, email email@example.com and request your name and contact information be placed on the rapidly growing Hybrid Loan Information & Invite List.
The second bullet point? We’ve identified a Washington, DC – based freelance consultant who ‘knows’ the manufactured housing industry well, and is available to represent land lease community owners/operators in matters legislative and regulatory. So, pretty impressive progress during the past month or so.
Back to the first bullet point.
Today’s status of a new hybrid loan program? In very general terms:
At least one independent chattel capital source (firm) has stepped forward and expressed strong interest in partnering with (small to mid-sized) land lease community owners to this end!
An other lender is very interested in marketing and selling seasoned chattel loans in behalf of land lease community ‘lenders’, freeing up capital to fund more new home purchases.
But there’s still a lot of work to be done re: funding issues, underwriting standards, nature of guarantees, GSE-preferred leases and community standards, and much much more.
Well, that’s all for now. If this timely and strategic topic interest you, plan to be at the Tunica MHShow, 20-22 March 2018. Ensure your name is on the Hybrid Loan Information & Invite List; then attend the special land lease community owner luncheon!
A postscript of sorts. Have you reserved the dates 5-7 September on your planning calendar for 2018? Please do so, as that’s when at least 200 land lease community owners/operators, and their preferred lenders ‘of all types’ will convene for the 27th annual International Networking Roundtable. Making the location decision this week.
George Allen, CPM, MHM
Box # 47024,
Indianapolis, IN. 46247