Diff Tween Large & Small LLLCommunities; & Did YOU Realize?

Blog # 217 Copyright 2012 28 October 2012

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


Getting It Out Into the Open! Some Differences Between Small & Large Owners/operators of Land Lease Lifestyle Communities…


‘A Lesson in Growing & Caring for One’s Reputation’, from Management 101, for Land Lease Lifestyle Community Owners, Property Management Executives, Regional & On – site Managers & Others!




Initial Blog Reader Responses to ‘A Lesson in Handling Interpersonal Conflict’, from Management 101 for LLLCommunity Owners, Property Management Executives, Regional & On – site Managers & Others!



Getting It Out Into the Open! Some Differences Between Small & Large Owners/operators of Land Lease Lifestyle Communities….

First the numbers. It’s estimated there’re 50,000+/- land lease lifestyle communities in the U.S. Of these, 85% are income – producing properties with 100 and fewer rental homesites or sites. In Sunbelt states, the percentage is closer to 78. So, maybe 42,500+/- ‘smaller’ LLLCommunities in play.

The remaining 7,500+/- land lease lifestyle communities, containing 100+ sites apiece, have for the most part, been consolidated during the past 25 years, into 500+/- property portfolios. According to the 23rd ALLEN REPORT, these portfolios contain an average of 27+/- properties (X) 500+/- portfolios = 13,500+/- LLLCommunities of all sizes. Subtracting 13,500+/- from the estimated 50,000+/- base, leaves 36,500+/- ‘smaller’ LLLCommunities not yet – if ever, to be absorbed into existing or future property portfolios, defined as ‘entities owning and or fee – managing a minimum of five LLLCommunities and or 500+ rental homesites’. The difference between 42,500+/- ‘smaller’ LLLCommunities cited in the opening paragraph, and 36,500+/- here, is likely due to some, if not many, portfolios having acquired ‘smaller’ properties over time.

Off and on, during the past couple decades, an informal debate has ‘waxed and waned’, relative to differences in characteristics, foci, objectives, policies and procedures, where ‘large’ versus ‘smaller’ land lease lifestyle communities and property portfolios, and their owners/operators, are concerned. Here’re some of the obvious, but rarely talked about differences:

• Land lease lifestyle community consolidation, during the past 20 years – via limited partnership syndications of the 1980s (Until the federal tax law changed in 1986); a second wave of REIT formations during the mid – 1990s; and now, the presence of equity funds, have frequently, and at times negatively, affected state MHAssociation membership rolls, as well as participation in training and meetings. Formerly, Mom & Pop – sized and owned properties were often active and involved dues – paying members of state trade/advocacy bodies. However, once absorbed into a property portfolio, only the corporate entity – in most cases, contributes to just one association membership, and not a separate membership for each LLLCommunity. And these corporate entities (i.e. property portfolios) generally participate in statewide advocacy matters only when troublesome, potentially intrusive issues, usually landlord – tenant legislation – related, appear on the business horizon. There are, of course, exceptions to both trends in some states and local housing markets.

• Some large land lease lifestyle community portfolio owners/operators, when maintaining physical occupancy of rental homesites becomes an issue, ‘raid’ like properties in the same local housing market. One recent flyer sent to this industry observer boldly states: ‘Relocate Your Home to _______________ & We’ll Move Your Home for FREE, & Charge You Site Rent at $99.00/month for Three Years! Call ___________’ And this is occurring in a market where the average area site rent is around $400.00 per month. What’s a competitor or ‘smaller’ LLLCommunity to do? Raid back, if able. Otherwise, enlist assistance and support of like members in the state MHAssociation; however, if the raider isn’t an active member, expect the plea or argument to maybe fall on deaf ears.

• Some larger land lease lifestyle community portfolio owners/operators are under constant pressure, from investment analysts, to not only exhibit consistent property profitability, but ensure its’ increase – like a growth stock, from reporting period to reporting period. This pernicious pressure has, at times, led to rental homesite rates raised out of sync with other forms of rental multihousing in the same local housing market. An extreme manifestation of such pressure has led to property portfolio owners/operators, whose site rent is $100+/- above the local housing market’s average site rent rate, to all but give away resale homes already on – site (e.g. bought cheap from ‘don’t want it sellers’, abandoned and otherwise) to would be ‘homebuyers’ willing to commit to pay long term inflated homesite lease payments. Smaller LLLCommunities are not generally caught up in this ultimately self – destructive cycle.

• Given their inherent enhanced economy of scale (i.e. A 200 site land lease lifestyle community ‘well managed’, can experience an Operating Expense Ratio or OER, half that of a 100 site property), LLLCommunity portfolios generally have more internal resources (e.g. capital, equipment, staff), with which to address challenging developments and trends affecting the asset class’ day to day business. A current one being, variably restricted access to third party chattel home financing, leading to use of different self – financing mechanisms, such as ‘contract sales’, ‘carrying paper’, ‘captive finance’, lease option, and most recently, unit leasehold agreements on new and resale homes on – site. But do these larger firms routinely share their homegrown expertise, forms, Lessons Learned, and access, with their peers, large and small?

• Small (one property owner) to mid – sized, privately – owned property portfolios, for the most part, continue to operate in local housing markets, as traditional land lease lifestyle communities. How so? Being content with collecting fair site rent, and not much more; being ‘afraid & inexperienced’, as to how to actually buy new homes (absorbing ‘value depreciation’ in the process); filling vacant homesites themselves – having relied, during past decades, on local independent ‘street’ MHRetailers, who’re no longer in business; and now, unsure how to self – finance compliant transactions in the present financial regulatory imbroglio. And who will teach them how to ‘buy’, ‘sell’ & ‘finance’ their new and resale homes? That is the big unanswered question of today. It’s also the question the SECO organizers will pointedly address at their event this Spring in Atlanta, GA.

The list goes on. There remain several more characteristics that, unfortunately, seem to routinely separate the small from the big ‘players’ in the contemporary land lease lifestyle community realty asset class. What ‘differences’ dismay, confuse, frustrate, even anger you? Let me know via GFA c/o Box # 47024, Indpls, IN. 46247, this web site (community-investor.com) or (317) 346-7156.


A Lesson in Growing & Caring for One’s Reputation, from ‘Management 101’, for Land Lease Lifestyle Community Owners, Property Management Executives, Regional & On – site Managers & Others!

“What people say behind your back is your standing in the community in which you live.” Edgar Watson Howe, quoted in The Forbes Book of Business Quotations. That’s especially true, even encouraging, when members of one’s (business) community knowing your good and longstanding reputation, opt to believe in and stand by you, when it counts!

The preceding quote describes one of the first business lessons I learned 40 plus years ago, on my first civilian job after leaving the U.S. Marine Corps, following a combat tour in the Republic of Vietnam. I’ve related the story before, in the published short story, ‘Got Rep?’ The gist of that tale is, I was a lumberyard supervisor responsible for a rough, mostly minority, work crew. After two years on the job, I was promoted and transferred to the Midwest. Then…

During an after hours farewell party with my crew, I learned the real ‘secret to my supervisory success’. It had to do with a false reputation of me being ‘a handy Marine with a blade’ in Vietnam. Turned out that a crew member had been in the U.S. Army, in the same region of RVN, at the same time as me. In an effort to enhance his own rep and standing among our co – workers, he concocted a hand – to – hand combat tale about me; in effect, warning others not to unduly aggravate either of us. While I benefited from the residual effects of the tall tale, it certainly wasn’t the leader rep I coveted. A free copy of the short story is available by phoning the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

Now for the comment accompanying the above quotation. Business reputations are indeed built over time, generally the result of personal, corporate, and social performance, good and bad. And reputations can certainly be sullied more quickly than earned. But there can also be an upside – one I’m relearning and appreciating today! Given a good reputation, especially one built during many years of service to one’s peers, it can be difficult – if – not – impossible, for an interloper, a faux friend, or anyone else, to effectively besmear it! And that’s a good and comforting thing.

For example; having been inducted into the RV/MH Heritage Foundation’s Hall of Fame, named MHI’s ‘Industry Person of the Year’ in 2008, and granted Emeritus status as a Certified Property Manager®, along with other reputation confirmations, recent whispered efforts by a particular low life have fallen on deaf ears, as the tale spinner attempted, unsuccessfully I’m told, to turn at least one national association executive against me, in an attempt to smear my good reputation. He/she failed.

So, how does one defend against such actions? Sometimes you can’t and don’t; especially when one doesn’t know about the matter. But given a ‘good rep’, it can say more (positive) about you, when not striking back, in anger or otherwise; letting the offending party run off at the mouth, and in effect, damaging their own reputation, as listeners reflect: “Hmm. If he/she says this about him, what will he/she say about me?”



When the year 2013 rolls around, where matters of national manufactured housing advocacy are concerned, our industry will be led and represented by two DGs:

DG (Don Glisson, Jr.) at MHI


DG (Danny Ghorbani) at MHARR

The point? There is none, at least none that anyone will take seriously, even though they should. Huh? MHI, for the most part begins the New Year with New Leadership in virtually every position (e.g. Dick Jennison as president & CEO; Jenny Hodge as executive vice president of the NCC division, et. al.). And MHARR? Long and rightly acknowledged as the ‘watchdog of the manufactured housing industry’, be alert to something of ‘paradigm shift’ import to materialize, from this national advocacy body, early during 2013. Hint? A takeoff on the old riddle: ‘What’s black and white and (intended to be) read all over?’ No, not a ‘newspaper’, in this instance, but close….


Initial Blog Reader Responses to ‘A Lesson in Handling Interpersonal Conflict’, from Management 101 for LLLCommunity Owners, Property Management Executives, Regional & On – site Managers & Others!

OK, here’re two of several written responses to last week’s blog posting:

“Conflict facing is difficult for many, but when tried as you lay it out, it becomes an everyday benefit of a relationship. Good for you, sir.” NB

“…use my credo: ‘If someone is giving you trouble for no apparent reason; give the SOB a reason!’ “ BB

Just goes to show you, there’s generally more than one way folk deal with difficult situations.


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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