Blog # 273 Copyright 2013 1 December 2013

George Allen Writes About Key MHBusiness Interests & Concerns – & More…

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

Purpose of this blog. To be the national advocacy voice, statistical research reporter, & communication resource for LLLCommunities, of all sizes, throughout North America!

Ways to respond: Critical responses & helpful ideas Welcome for future blog coverage;; Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764



As I started to pen this week’s blog posting, and given the nature of narratives I was about to share, I recalled this earthy riposte:

“Hey, you do know the difference between a fairy tale and a sea story, don’t you?”

Well, a fairy tale begins…’Once upon a time….’, while a sea story starts…’This ain’t no sh–!”

With that rhetorical juxtaposition in mind, YOU DECIDE THIS TIME NEXT YEAR, whether what transpired during year 2014, was indeed a fairy tale come true – OR one gone seriously awry; OR, is it a sea story with no one left around to tell or who cares?

Manufactured Housing’s ‘Perfect Storm’ in 2014?

The confluence of several interrelated factors & happenstances suggest it so!

Let’s begin with MHI’s Conference Call with state manufactured housing association executives on 21 November, AND the ‘too little too late’ Senate Bill mirroring House Bill # 1779, a.k.a. ‘Preserving Access to Manufactured Housing Act of 2013’. (On ‘Thanksgiving Day’ we were still waiting Senator J. Donnelly (D-IN) to introduce the latter bill – six months late, and a scant month before the end of this year’s legislative session!) Go figure.

Taken together; given the gist of said conference call, teaching ‘How to Live with the Truth in Lending Act’, rather than fighting it or welcoming needed/expected changes; and, effecting this last gasp, as penned earlier, ‘too little too late’ Senate Bill aping the stalled House Bill, suggests our industry’s efforts to unravel Dodd-Frank legislation, have been akin to stepping on Super Man’s cape, pissing up a rope or into the wind, even like repeatedly transporting, setting up, and dissembling a HUD-Code multisection manufactured home! It simply isn’t gonna – or in the latter instance, happen! But is THAT ‘the Real Story’ around and behind the failure of this round of legislative change effort? Methinks Not. But let’s wait and see what the unintended (Really?) consequences turn out to be, during 2014, (A hint) ‘regarding respective corporate National Market Share percentages of 1) HUD-Code home manufacturing, and 2) chattel capital sourcing.’

Here’s a summary look at major manufactured housing industry components or segments, and what they should consider doing in 2014, to weather the Perfect Storm:

HUD-Code home manufacturers. Learn to play better with the land-lease-lifestyle community folk! Whether you agree or not with last week’s blog headline: Land-lease-lifestyle Communities = Future of the Manufactured Housing Industry!, know until easier – to – obtain chattel financing, of new and resale manufactured homes sited in LLLCommunities ‘returns’ in volume to this industry, this unique, income – producing property type, is the only game in town, with an estimated 250,000 vacant rental homesites to be filled nationwide; that is, unless one wants to hang his/her future on ‘fracking’. So, if you’re not already aggressively marketing Community Series Homes, a.k.a. CSH Models to LLLCommunity owners/operators, big and small, learn how to do so during 2014! Two hints: First; pressure national advocacy bodies to plan and host a National Strategic Planning Meeting focused on how to effectively market CSH Model homes to the 42,500 LLLCommunities NOT in anyone’s property portfolio! And, if not already familiar with the ‘5 – RPs of Marketing’ and how they apply to you and LLLCommunities, order a FREE plastic wallet card containing what you need to know about Right Product, Right Place, right Price, Right Promotion, Right People. *2

Land-lease-lifestyle Community Owners/operators. Property disposition and consolidation among portfolio ‘players’, in the U.S. & Canada, continues unabated. Read the 25th anniversary ALLEN REPORT (A.k.a. ‘Who’s Who Among Land-lease-lifestyle Community Owners/operators Throughout North America!’) for details – and much more.*2 Number One concern among owners/operators continues to be filling vacant rental homesites with new homes and qualified homeowners/site lessees. This only happens ‘today’ when has sufficient and reliable sources of chattel capital to engage in one form or another of self – finance; more about that later. In this MHIndustry veteran observer’s opinion, the second most obvious shortcoming, throughout the realty asset class, is the absence of professional property management, at all levels. For the most part, we continue to run our valuable income – producing properties ‘by the seat of our pants’. If not already familiar with the aforementioned ‘5-RPs of Marketing plastic wallet card – for LLLCommunities, order one today. Also ask for the ‘Ah Ha! & Uh Oh! Worksheet. And if you’re really bold and conscientious, you’ll sign all your property managers up for training and certification as Manufactured Housing Managers® or MHMs®! *3

Manufactured housing finance. This is one area where ‘angels surely fear to tred’. As an industry, we have a bad, repetitive history of abusing our access to personal property (chattel) capital, seeing dozens of independent, third party ‘lenders’ of this type financing ‘come and go’, over the years. Memories of our most recent debacle, looking back to 1998 – 2008, a period sometimes labeled our Enronesque period, remains painful and consequential, i.e. Five years of record low ‘new home shipments’ @ 50,000+/-/year, and still no easy access to any volume of reasonable chattel financing for new and resale manufactured homes on – site in land-lease-lifestyle communities! Today? Appears we fight (or comply) with state and federal financial regulations on every front. Oh sure, chattel capital is available from the (now) Big Five + One independent lenders serving the manufactured housing industry, but only to prospective homebuyers/site lessees with ‘higher than average’ credit scores.*4 During the past five or more years, some new, and some old, terms like self – finance, ‘captive finance’, and lease – option have come to the fore, as more and more land-lease-lifestyle community owners/operators aggressively market, sell and self – finance new and resale homes on – site in their properties. How pervasive have these practices become? The annual ALLEN REPORT, during the past several years has estimated/documented more than $5 billion dollars of ‘contract sale’ paper on – site; this up from a few million dollars at the turn of the Century. And, during 2013, one of the nation’s largest LLLCommunity owners/operators, Zeman MHC, launched it’s own ‘bank’ (Green Hill Financial), to serve the chattel finance needs of other property portfolio owners/operators, first in a few states, then more….

End Notes.

1. MHInitiative®. The latter day or successor term for the National State of the Asset Class caucuses held on 27 February 2008 & 2009 respectively. Every year since then, we’ve ended the year, at PMN Publishing, with an update regarding the landmark matters decided upon at those two seminal meetings. Here you have this year’s summary and look ahead into year 2014. To learn what happened at the two aforementioned NSAC caucuses, read Landlease Communities, Manufactured Home Communities, Mobile Home Parks, Trailer Courts & Camps, & Affordable Housing, PMN Publishing, 2011. To order, phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

2. To order the 25th annual ALLEN REPORT and or FREE ‘5 – RPs of Marketing plastic wallet cards (one for HUD- Code home manufacturers & one for LLLCommunity owners/operators), phone the Official MHIndustry HOTLINE in previous end note.

3. ‘Ah Ha & Uh Oh! Worksheet for calculating ‘affordable’ & ‘risky’ new & resale price points for homes going into LLLCommunities or site conveyed fee simple, use the Official MHIndustry HOTLINE in end note # 1.

4. 21st Mortgage Corporation, Triad Financial Services, Inc., CU Factory Built Lending, U.S. Bank – Manufactured Housing Finance, & Green Hill Financial; as well as Vanderbilt Mortgage and Finance, Inc. (latter = Clayton Homes’ in – house chattel lender)


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