LLCommunities…cum Lendlease Communities
LLComunities (nee MHCommunities) cum Lendlease Communities! Huh?
Translation please! First the long version. Back in the 1950s they were ‘trailer camps; morphed to ‘mobile home parks’ in the 1970s; then, with publication of two J. Wiley & Sons development and investment ‘how to’ textbooks, and emergence of several real estate investment trusts (‘REIT’s) during the 1990s, enjoyed a decade long panache as ‘manufactured home communities’ (‘MHCommunities’). However, given manufactured housing’s ‘chattel finance bubble busting’, at the turn of the Millennium, along with the surprising realization six different types of housing are now routinely sited in this unique income – producing property class, ‘landlease communities’ (‘LLCommunities’) became, and continues to be, the moniker of choice among most investors, lenders, journalists, and trade advocacy bodies. There’s also widespread recognition, that since year 2000, the on – site marketing, sale and property owner – financing of new and resale homes has become commonplace, suggesting a future terminology refinement might be in the works, i.e. maybe ‘lendlease communities’, whereby property owners routinely ‘lend’ homebuyers capital with which to acquire new and resale homes on – site, then ‘lease’ them the homesite on which their new or resale home is installed. The short definition? ‘LLCommunities’, formerly ‘MHCommunities’, will likely continue to be known as ‘LLCommunities’, but with a chattel finance nuance.
Last week’s blog posting, presaging the previous paragraph, was titled ‘Ongoing Transition from TPL (third party lenders) to Owner Financing’. As its’ author/blogger, the heavier – than – usual reader response was not only welcome, but contained a healthy mix of Good News & Bad News. First the really good (confirming) stuff:
“Top notch post! This is certainly one of the most remarkable blogs I’ve seen….” CM
“Great article again George. Thanx.” NB
“George, I greatly enjoy your blog, especially the one on Owner Financing. (Starting in) 2007, I advertised a few seller – finance MHs in my park. 30 deals later, I can say it is great! I have had one ‘walk away’ repo. I structure the deals so they make sense for the buyer, thereby solidifying my park occupancy. I believe my (LLCommunity) would be in a serious state of decline had I failed to act when I did.” SS
“There is no doubt, much more to the story than you’re telling, and I’m glad you don’t mention names. Just better that way. You continue fighting, on our behalf, and I want you to know (there’s) at least one park owner in ________ who appreciates all you’re doing to keep us from doing down the tubes.” DR
“Good that the LLCommunities have it (presumably, ‘chattel finance matters’) in hand. It is a huge challenge, that can only build. I see the quagmire, George.” NC (Go ahead, look it up. Quagmire well posits our capital sourcing challenges and regulatory climate ahead.)
“Just got thru reading your blog on TPLs to Property Owner Financing. Thank You. There is really nothing I can add to this that you’re not aware of already, but I’ll vent if nothing else…” DB
Now for the ‘me bad’ stuff. I was roundly and rightly criticized for an error I let slip into my description of MHI’s summer meeting, off – agenda financing session, during mid – July in Washington, DC. I’ve since corrected the error: said meeting was requested by FHA not FHFA. Plus, my computer omitted half the opening paragraph of what was originally posted; that’s now been restored.
Having now perused informal, unofficial notes penned by uninvited MHI dues – paying members present at said meeting, I believe I was right in my earlier observation that, even to date, there’ve been no written proceedings describing what was shared by and among (What at one point was described as…) ‘the survivors are in the room’. Like my peers, I applaud FHA for being engaged on our (finance) issues; and even understand why some ‘insiders’ loathe sharing information and control with peers, during what could be nigh end days for our industry. And for that very reason, this work session should have been announced and open to any MHI direct dues – paying member who might have contributed knowledge and ideas, on one hand; or been in a position to share information, even rally industry wide support, on the other.
So, where do we go from here? For starters, you’re already doing as I’ve requested time and again; you’re communicating reactions, thoughts, ideas, and frustrations relative to HUD Code manufactured housing and the landlease community real estate asset class. Don’t stop! Respond via this website or the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. That’s how I obtained all the commentary written into this blog posting!
Next. If you own/operate one or more LLCommunities in North America, plan to join your peers at the 19th annual International Networking Roundtable, 15 – 17 September 2010, in Phoenix, AZ. If you haven’t already received material on this generally ‘by invitation only’ event, let me know (317) 346-7156, and I’ll mail or email it to you! Registrations are now arriving daily, and our maximum participation will be 200. Product and service vendors with a history selling to LLCommunities are also welcome to attend. Same procedure.
Furthermore; did you read Dick Moore’s INDUSTRY PERSPECTIVE # 73 online MHIndustry newsletter distributed Friday, 30 July? If not, phone ((901) 872-4446 to request a copy. This is one MHRetailer who ‘tells it like it is!’
Finally; received the following lightly – edited paragraphs from one of the few true, decades – seasoned sages in the MHIndustry:
• “Relative to the long – awaited Title I program. As you probably know, the final regs are out; and, while GNMA has lifted its’ moratorium, it’s also established (stringent financial guarantee) guidelines that effectively eliminate all but two (Really one, when you consider who owns the two firms) chattel lenders from participating in the program, virtually ending competition among said lenders!” So, does this mean Title I is, again, ‘dead in the water’ for now, where MHIndustry chattel lending is concerned? Chattel finance – challenged businessmen and women want to know….
• “And George, except for selling to Seniors, home financing is the key to success in our industry! As long as we market home products and LLCommunities to low and moderate income buyers, who’re mostly credit – challenged, we’re going to have difficulty obtaining viable home financing programs anywhere. Answer? While there’s no simple solution, greatly and widely ‘improving our image’ with the general public, will help to move us up the credit score chain to more credit worthy buyers, and access new financing options for home sales.”
What say you? Are these sage’s remarks ‘right on’ or do you feel they ‘miss the mark’? If I get enough and soon response, either or both topics might be worthy fodder for next week’s blog posting. Will be listening for you on the MHIndustry HOTLINE!
George Allen, Realtor®, CPM®Emeritus, MHM
Consultant to the Factory – built Housing Industry &
The Landlease Community Real Estate Asset Class
Box # 47024, Indianapolis, IN. 46247