An OPEN LETTER to My Friends in the MHIndustry
Blog # 508; Copyright @ 4 November 2018; communiity-investor.com
Perspective. ‘Land lease communities, previously manufactured home communities, & ‘mobile home parks’, comprise the real estate component of manufactured housing.
This blog posting is the sole national advocate, voice, official ombudsman, historian, research reporter & online communication media for all North American LLCommunities
To input this blog &/or affiliate with Community Owners (7 Part) Business Alliance, a.k.a. COBA7, use Official MHIndustry HOHTLINE: (877) MFD-HSNG or 633-4764
COBA7 Motto: ‘U Support US & WE Serve U!’ Goal for its’ print & online media =
to not only inform & opine, but to transform & improve MHousing performance.
An OPEN LETTER to My Friends in the Manufactured Housing Industry &
Land Lease Community Real Estate Asset Class
In 1978 I discovered professional property management (‘PM’) as a career alternative and opportunity, when working for a firm owning/operating apartment communities, mobile home parks, nursing homes, farms and mines. I was not pleased, however, when my boss reassigned my PM responsibilities from apartments to mobile homes. But know what? That marked the beginning of my 40 year experience in land lease community management and ownership, as well as writing and publishing books, newsletters, and this blog.
Now, in 2018, I’m contemplating what to do with the rest of my career and life. I no longer own land lease communities; have relinquished responsibility for teaching the Manufactured Housing Manager (‘MHM’) PM training and certification program; and think I might have a home for future Networking Roundtables – or not. So, for the time being, I continue to pen and post a weekly blog, and publish and distribute two COBA7 affiliate-supported monthly business newsletters: the Allen Letter professional journal & the Allen CONFIDENTIAL!. But what about ongoing research required for the annual ALLEN REPORT, National Registry of ALL $ Lenders; and, directories of trade groups, GSEs & NGOs, trade publications, and freelance consultants? It’d be downright wrong to allow 30+ years of such information to disappear overnight, for lack of interest and effort.
While I shared several personal memoirs in SWAN SONG last year, here’re more memories from past decades:*1 Hopefully, these and more stories will eventually find their way into print as a legacy biography or autobiography.
• Returning 350 rental manufactured homes, scattered among four ‘mobile home parks’ in two states to profitability, by changing from monthly to weekly rent collection. And later learning the advantages to collecting site rent by mail.
• Acquiring my first (then) manufactured home community of 500 rental homesites, with only 20% occupied, for $400,000 – then selling it two years later for $2 1/2 million cash. Ah, the reward of risk taking and ‘sweat equity’.
• Penning & self-publishing Mobile Home Park Management in 1988. Now in its 6th edition as Land Lease Community Management, and centerpiece for the popular Manufactured Housing Manager program, with nearly 1500 MHMs trained and certified to date throughout the U.S. and Canada.
• Collecting & continually updating an exclusive, confidential data base identifying 500+/- land lease community portfolio owners/operators in North America; and making said list available for direct mail contact and marketing by lenders, insurers, investors, and more.
• Researching, compiling & publishing the annual ALLEN REPORT (1989-2019), identifying major portfolio ‘players’, along with pertinent benchmark statistics.
• Articulating the asset class’ Industry Standard Chart of Accounts, including 19 Operating Expense Ratios and widely cited Allen Model OERs. This resource compiled while on active duty, as a Marine officer, based in Honduras during Operation Desert Storm.
• Hosting a strategic planning meeting of 19 manufactured home community owners intent on improving realty asset class’ national advocacy and representation, before the mini-REIT wave of 1994 began. Their Industry Steering Committee was the forerunner of MHI’s National Communities Council division.
• Co-authoring Development, Marketing & Operation of Manufactured Home Communities, with David Alley & Edward Hicks. First such tome in more than 20 years! Still sought and bought, via amazon.com, after more than 25 years.
• Editing How to Find, Buy, Manage & Sell a Manufactured Home Community. First and only comprehensive text on buying, valuing, selling this unique, income-producing property type. Oft referred to as the ‘bible’ of community acquisition. Now out of print, but used copies sometimes available at amazon.com
• Crafting, with daughter Susan McCarty, the ‘Valuation Calculation Worksheet’, or VCW, a do-it-yourself valuation tool for any size and condition land lease community in North America. And later added to this, an ‘ABClassification’ form, for measuring and labeling A, B, C or D quality levels on this income-producing property type. Replaced long defunct Woodall Start System, last updated in 1976.
• Articulating the ‘Ah Ha! & Uh Oh! Worksheet’, for estimating ‘affordable’ & ‘risky’ purchase prices of new & resale homes, of any type, on building sites conveyed fee simple, and placed within land lease communities on rental homesites.
• Launching of Community Owners (7 Part) Business Alliance, or COBA7, as a division of GFA Management, Inc., dba PMN Publishing. In reality, a rebranding of heretofore ‘free’ products & services long provided by GFA Management, Inc.
• Creating the ‘New Rule of 72’, to facilitate valuation of ‘average’ land lease communities at100% occupancy (maximum value), OR any lesser percentage of physical occupancy; e.g. 200 sites X $300/month rent X ’72’ = $4,320,000 or $21,600 per occupied rental homesite.
• Defining affordable housing (‘AH’), to include Low Income Housing & Very Low Income Housing, as well as all six measures of AH, being HEF, HOI, HW, WH, IHVR, & ‘One, or anyone, who believes they live in affordable housing’
• Bringing logic to heretofore conflicted annual new HUD-Code manufactured housing shipment volume reporting, using Institute for Business & Technology Safety (‘IBTS’) data – though differences in said public reporting continues via HUD, MHARR & COBA7 versus MHI..
• Documenting of 21st Century paradigm shift in manufactured housing distribution, from independent (street) MHRetailers to in-community home sales & finance.
So, were to go from here?
That’s somewhat ‘up to you’. The following paragraph (actually two) concludes the November 2018 issue of the Allen CONFIDENTIAL! business newsletter. Not asking you to agree with me; just read and ponder what the next decade – and longer, will look like if
1. Our realty asset class remains, again in my opinion, relatively leaderless; and,
2. The research & print resources – and more, just described, ‘simply go away’….
Now, here’s that paragraph, rendered as two:
“I’m concerned…about the dearth of asset class leadership among land lease community owners/operators nationwide. I have never viewed myself as such a leader, rather as a gatherer and purveyor of statistics and information via COBA7….Furthermore, I don’t see LLCommunity representation and advocacy, envisioned by aforementioned 19 owner/operator peers 25 years ago, faring any better! (Their hope) MHI’s NCC division…is insular (‘detached, provincial, narrow-minded’) & .(For proof, read page # 97 in SWAN SONG, to compare NCC’s contemporary presence with their 1993 Mission Statement & Objectives). And MHARR has never figured into this leadership void, as their membership is strictly limited to HUD-Code housing manufacturers. Now NAMHCO appears on the national advocacy (lobbying) scene. Too early to judge their leadership potential.”
“As I travel nationwide, I meet and interact with individuals who’re already bona fide leaders in their own right (i.e. entrepreneur owners/operators & some salaried PM executives). But therein lies their constraint: ‘taking care of (their) business first’! Here I’m thinking the likes of Mike Sullivan, CPM; Paul Bradley, MHM; Spencer Roane, MHM; Steve Adler; Stephen Braun; Brian Fannon, CPM; Randy Rowe, Kevin Shaughnessy, et .al. So, there’s talent afoot, and the need is great, but as a realty asset class we continue to be hopelessly (?) adrift.”
Frankly, I hope this blog posting becomes a topic of lively conversation at the upcoming NCC Fall Leadership Forum, 7-9 November, in Chicago, IL. It should be. Why there? I understand that event attracts ‘hundreds’ of participants, while NCC membership meetings, in my experience as a founding board member – just resigning last month, attract maybe a dozen owners/operators, way down from multiple dozens two decades ago. Hey, a leadership renascence,, among land lease community owners/operators, has to begin somewhere….
1. To order a copy of SWAN SONG, ‘George Allen’s History of the Land Lease Community Real Estate Asset Class (1970-present day) & Official Record of Manufactured Housing Shipments (1955-present day)’, for $34.95 ()postpaid), phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.
George Allen, CPM & MHM
Box # 47024, Indianapolis, IN. 46247
If you or your firm owns and or fee manages a minimum of five stand alone land lease communities or 500+ rental homesites (in one or more properties), the portfolio qualifies to be included in the 30th anniversary ALLEN REPORT, a.k.a. ‘Who’s Who Among Land Lease Community Owners/operators Throughout North America!’. To input this seminal document, simply phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764 and request a copy of the questionnaire used to compile this data. Then complete it in full ASAP, and return via FAX, to (317) 346-7158. Completely filled-in questionnaires get you a FREE copy of the 30th ALLEN REPORT in January when distributed as a lagniappe in the Allen Letter professional journal. Questions? Email: email@example.com