Blog # 570 @ 7 February; Copyright 2020; www.educatemhc.com
Perspective. ‘Land lease communities, previously manufactured home communities, and earlier, ‘mobile home parks’, comprise the real estate component of manufactured housing.’
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INTRODUCTION: Correcting one’s errors can be instructive, even humorous. Part I describes a recent error with an instructive correction. A decade ago I penned a booklet on MH finance; a misprint therein suggested using ‘pubic finance’, when I meant to say ‘public finance’. Part II is serious stuff! I’ve been around this (MH) business for 40 plus years, and current threats of landlord-tenant legislation are the most widespread experienced to date. Pay attention! And Part III was kinda fun to write. I’ve known Ralph Cochran ‘for decades’ and admire what he’s done in the field of Christian education. Maybe if we’re fortunate, he’ll return to the land lease community investment fold one of these days…
We corrected an ERRATUM (misprint @ blog # 568) in last week’s (#569) posting; so, why do so again, here in # 570? Ha! Making mistakes is NOT my habit or amusement, but it does happen from time to time. Here’s the latest misstep and it’s a doozie:
Pull out your 31st annual ALLEN REPORT and turn to page # 6, where the list of 100 land lease community portfolio owners/operators begins. Look at year 2020 ranking # 2, listing SUN Communities, Inc. In the 7th column across, where we show 266 communities – the correct number is 382. Why the difference? When compiling the ALLEN REPORT I missed seeing a small print footnote at the bottom of the data questionnaire indicating: In addition to 266 land lease communities, the firm now owns/operates 116 RV parks; for a total of 382 MH&RV communities! Hence, total should have been 382 and not 266. Certainly underscores the decade long emerging trend of including recreational vehicle rental sites and properties in heretofore ‘land lease community only’ portfolios.
Sorry ‘bout that oversight. But since the ALLEN REPORT is now distributed digitally, all copies henceforth will have the correct total in place! Speaking of which, if you have yet to purchase your copy of said report, visit www.educatemhc.com to order. You’ll be glad you did, as there’s no more comprehensive a compendium of realty asset class stats and trends available anywhere else in the HUD-Code manufactured housing industry!
Be Aware & BEWARE!
I’ve used that headline before and now, for good reason both times!’
What you’re about to read here, are summaries of a half dozen landlord-tenant legislation regulations now in place in at least one state, where rent control was anathema (‘something accursed’) just a year or so ago. You ready? Here goes:
Landlords prohibited from refusing to rent to a tenant on grounds he/she was the subject of prior eviction proceedings.
Attorney’s fees, in behalf of landlords, in landlord-tenant proceedings, are no longer collectable from the tenant if landlord is awarded judgement based on tenant’s default.
If landlord charges a fee for conducting a background or credit check, the total amount cannot exceed the actual cost of the background and credit checks, or $20 dollars, whichever is less.
Unless landlord can prove to the court a tenant is ‘objectionable’ (‘whatever that means’), a warrant of eviction, and collection of costs of an eviction proceeding, may be stayed by the court for a period of not more than one year, if court finds tenant cannot, within the neighborhood, secure suitable premises similar to those occupied by said tenant.
Illegal evictions prohibited. Prohibits landlord from using or threatening force, interrupting or discontinuing essential services, or ‘engaging in a course of conduct which interferes with or is intended to interfere with or disturb the comfort, repose, peace or quiet of the occupant in the use or occupancy of the dwelling unit…
Limit security deposits to one month’s rent, only.
So, are you shocked at what’s happening to leaseholds in some parts of the U.S.? All the more reason for you to take steps now, so as to not have this occur in local housing markets you serve with your land lease community or communities! How to effect these steps? Several measures come to mind:
• Join and be active in your state manufactured housing association! And extend that membership status and activity to the Manufactured Housing Institute’s (‘MHI’) National Communities Council (‘NCC’) division. Anything less is counter-productive.
• Have your community operators trained and certified as professional property managers! Easiest and most economical means of doing so is enrollment in the popular one day Manufactured Housing Manager (‘MHM’) class. Visit www.educatemhc.com
• Join local Chambers of Commerce wherever you have land lease communities! Encourage local staff to attend events and cultivate a positive local image wherever and whenever possible. Success? When chamber sends you prospective homeowners.
• Purchase a copy of Community Management in the Manufactured Housing Industry for every land lease community! MHM class participants receive this book as a matter of course. It addresses most on-site management challenges. Has to be best text available, now that Institute of Real Estate Management (‘IREM’) stocks and sells it to Certified Property Manager (‘CPM’) members & AMO organizations. Visit www.educatemhc.com
I realize, as many of you do, our unique income-producing property performance hiatus, and unwanted legislative attention, is as much to blame on ‘outsiders’ acquiring communities ‘at whatever cost’, then increasing rental homesite rates to whatever level necessary to pay operating expenses and inflated debt service payments. So it behooves you, as an owner/operator, to do whatever you can to protect your investment and job – starting with the four bullet points just articulated. If you have additional suggestions, let me know via email@example.com
Ralph Cochran Rides Again!
Not everyone reading these lines is old enough to recall, nearly two decades ago, when Ralph Cochran was identified as one of our realty asset class’ Young Wealth builders, a.k.a. Young Lions in the ALLEN REPORT. After a few years run, Ralph liquidated his property portfolio, and headed off in a different career direction, founding and growing classical Christian schools back East.
A couple months ago, Ralph released his new book, Story Marketing for Christian Schools, ‘The Expert’s Guide to Growing Enrollment through Word of Mouth Marketing, Story Telling, and Inbound Marketing’. I read the book recently, and was pleasantly surprised (?) – no, encouraged, to read Ralph suggesting a formula similar to one used by land lease community owners/operators to market and sell new HUD-Code homes on-site. Here’s what Ralph has to say on the subject of, what he calls, Inbound Methodology:
“To effectively market the Right Way to the Right Audience at the Right Time and achieve your marketing goals, you also need a working knowledge of the inbound methodology, a four-phase process:”
• Attract the right visitors to your school website ( or land lease community website)
• Convert visitors into school enrollment leads (Convert inquiry phone calls into on-site visits & visits into completed applications!)
• Nurture those leads through the Buyer’s Journey to the enrollment decision (Using ‘Ah Ha! & Uh Oh! Worksheet’ to ensure buyer purchases the house he/she can afford!)
• Delight your enrollees to the point they become your WOM (‘Word of mouth’) marketers (Cultivate good resident relations to generate referrals & encourage retention!)
See what I mean? The parallels are clear. And, if Christian schools are of interest to you, consider buying a copy of Ralph’s book. It’s available online.
George Allen, CPM, MHM