Best Kept Secret In All of Manufactured Housing!
Blog #480; Copyright @ 2 April 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: Best Kept Secret; Exciting Stats & Continuing Trends; and, Be Careful Who You Read & What You Believe!
Best Kept Secret in All of Manufactured Housing!
Everyone has heard, one way or another, about the Manufactured Housing Consensus Committee (‘MHCC’) – spawned by the Manufactured Housing Improvement Act of 2000, a.k.a. MHIA2000.
Well, did YOU know, as a manufactured housing ‘producer’ (Read, manufacturer), ‘user’ (Read, consumer interest), and or someone with ‘general interest &/or public official’ involvement with manufactured housing, you’re eligible to apply for an open seat on the MHCC? Didn’t think so. That’s why said opportunities continue to be the ‘Best Kept Secret in All of Manufactured Housing’!
And right now there are openings to be filled! By YOU?
If sincerely interested in ‘putting your hat into the ring’, so to speak, get hold of the Federal Register/Vol. 82, No. 54/Tuesday, March 20th, 2018/Notices; page 12200. MHCC members serve for ‘up to two terms of three years’, and ‘meetings take place by conference call or in person’.
Also contact the office of Teresa B. Payne, acting deputy administrator, office of manufactured housing programs at HUD, via (202) 708-6423, for more information.
One caution. In my opinion, this can be a very political minefield. I’ve applied in the past, but could never get past the manufacture housing industry politics that seem to prevail in Washington, DC. So, if you’ve got ‘friends in the business’, better positioned than mine, solicit their support as you quickly navigate the application process!
Deadline for submission of applications? 19 April 2018. So, this is a short fuse opportunity. FYI. A couple of our business peers who’ve served on the MHCC in years past are Susan Brenton in AZ, and Doug Gorman in OK.
Have You Been Paying Close Attention?
There’s a plethora of not only encouraging statistics of late, but some ‘telling’ trending occurring on as well. And what are these leading indicators:
• Probably the most exciting, and announced in the feature article of the March issue of the Allen Letter professional journal are these two gems: 2018 new manufactured housing shipments are projected, based on trending to date, to reach 107,000 units by year end! And, continuing with said trending uptick in shipments, maybe 200,000 by year end 2022. Now, how bold & exciting is that?
• Then there’s the continued ‘proof’ of the ongoing paradigm shift, since the turn of the century – away from distribution by independent (street) MHRetailers to on-site home sales within land lease communities! This phenomena is referred to as the NEW ERA of manufactured housing & land lease communities. Specifically; seeing 24% of new HUD-Code homes going into LLCommunities during 2009, jump to more than 41% by year end 2015; and estimated to eclipse 75+/-% by year 2020. Now, how bold & exciting is that?
• And finally, for now anyway, there’s the ‘first time ever’ proof of affordable housing production dominance, by dint of HUD-Code manufactured housing shipments! How so? When polled, the ‘Big Three C’ manufactured housing producers (i.e. Clayton, CAVCO, Champion, together with a commanding 75+/-percent national market share) reported an average of at least 65 percent of their new home shipments during 2017 were (wholesale) valued at $50,000 or less! Now, how bold & exciting is that?
Did you get all that? By year end 2018 the manufactured housing industry might well have shipped more than 100,000 new HUD-Code homes; that by year end 2022, we might return to that ‘sweet spot’ of 200,000 new HUD-Code homes shipped; and during the same time frame, we see the volume of new HUD-Code homes going directly into land lease communities, increase from 24 percent to maybe 75 percent! But most important of all = WE ARE AFFORDABLE HOUSING!
Ezine Distorts Manufactured Housing Trend
As much as some folk would have you believe, One REIT (Sun Communities), and a couple more (ELS & UMH – also REITs) do not a trend make!
Yes, according to a recently published Intelligence Report (3/29), a ‘third or more new manufactured housing shipments (i.e. 41 percent at year end 2015, & more now. GFA) are going into land lease communities.’
And yes, aforementioned property portfolios are buying in bulk, i.e. large numbers of new HUD-Code homes
But, the ezine misses an unfolding story, when it concentrates on what it views as the ‘three to five year window before (those three firms) MHCommunities fill their vacancies of existing home sites.’ – proposing that new HUD-Code housing shipment volume will go flat!
The ezine makes no mention of the 85 percent of estimated 50,000 land lease communities nationwide, characterized as having fewer than 100 rental homesites apiece, many of which are presently vacant.
That my friend, is where ‘the action’ should and will be going forward in manufactured housing and land lease community history! How so?
For the most part, the owners/operators of these estimated 43,000 smaller land lease communities don’t know how to fill their vacant rental homesites. Seriously. Most of them developed and or acquired these properties during the decades when independent (street) MHRetailers ‘were’ the distribution arm of the manufacturing process.
Most of that changed following the turn of the 21st century, when ‘easy access to chattel capital’ went away and has yet to return. Today, the new manufactured housing paradigm rests on the shoulders of entrepreneurial owners/operators of land lease communities. Individuals who are only now, for the most part, learning to
• Get their properties ‘ready’ to sell new homes on-site, e.g. curb appeal, foundations, advertising, etc.
• Spec & buy, with the right price point(s), new HUD-Code homes, directly from one or another manufacturer
• Effectively sell these new homes on-site and lease the rental homesites
• And when need be, seller-finance new home sales transactions via ‘captive finance’, manufacturer $ assistance, local banks, lease-option, contract sale, even leased as rental units.
Where are these businessmen and women going for assistance with this four step drill?
Some rely on freelance consultants (e.g. Ken Corbin), experienced peers (e.g. Spencer Roane, MHM re lease-option), factory training, and their state manufactured housing association.
One good example of the latter resource will occur 8 & 9 May at the RV/MH Hall of Fame in Elkhart, IN., when the IMHA/RVIC (Indiana association) hosts the second Two Days of New Home Seminars & Plant Tours. There, all four segments of the new home sales process will be taught by a half dozen capable, experienced, motivated land lease community owners/operators. Attendance is limited to 200. And other state MHAssociation executives are encouraged to attend and take this customized training session back to their membership.
A corollary to this training will be the ‘Six Right Ps of Marketing’, i.e. Product, Place, Price, Promotion, People, Process. If this too is new to you, be present to receive a plastic 3X5 wallet card, used as a Ready Reminder of how to market homes effectively!
For more information and or to register for this event, phone (317) 247-6258 x 14 and or visit www.inmharvic.org/homesalesplanttours/
OK, back to the theme of this part of this week’s blog posting.
YES, today the lion’s share of new HUD-Code homes being shipped ‘appear’ to be going mainly into the largest of the property portfolio firms’ land lease communities. And that’s expected to continue for awhile. However, the vast majority (i.e. 85%) of land lease communities across the U.S., are not in portfolios, and have an increasing number of vacant rental homesites – as the supply of ‘repos’ and resale homes dries up. That’s where and why new home shipment will have to head for years to come. And the sooner state manufactured housing associations, and HUD-Code housing factories, realize this – and start teaching owners/operators to effect this four step improved occupancy process, the better!