More Lenders, Home Sales & Chagne Agents in 2016?!
Blog # 369 Copyright 2015 COBA7® Worldwide Proprietary: community-investor.com
Perspective. ‘Land-lease-lifestyle communities, a.k.a. manufactured home communities and ‘mobile home parks’, comprise the real estate component of manufactured housing.’
This blog posting is the national advocacy voice, official ombudsman (press), research reporter, & online communication media for all LLLCommunities in North America!’
To input this blog &/or affiliate with Community Owners (7 Part) Business Alliance®, a.k.a. COBA7®, use Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.
COBA7® Motto = ‘U Support US & WE Serve U!’, & Goal of its’ print & online media = to ‘Not only inform & opine, but transform & improve Business Model Performance.’
Getting Ready for Year 2016 Excitement
24th International Networking Roundtable Spawns Exciting New Ideas for COBA7® Signature Series Resource Document: ‘National Registry of ALL Lenders Serving the MHIndustry & LLLCommunity Asset Class’; AND, Your Opportunity to, maybe be part of a New HUD-Code Home Sales Training Contact Team!
What are we talking about here? Nothing short of doing what No One Else Has Done these past 15 years! Help small to mid-sized LLLCommunity owners/operators identify and access bona fide sources of real estate – secured monies & chattel capital, for property acquisition & refinance mortgages, as well as home loans, on one hand. AND, finally ensuring proven methods of on-site new home marketing, sales, & seller-finance are taught by capable, experienced, motivated individuals with proven success track records!
In the first instance. If you are a local housing market lender, and or know of local housing market lenders (banks, S&Ls, etc.) who have an affinity for manufactured housing and or land-lease-lifestyle communities, PLEASE communicate that information to us ASAP! Here at COBA7®, we only have until February 2016, to collect and verify this timely and critical information, for publication in the 18th annual National Registry of ALL Lenders! – to be distributed as a lagniappe in the March 2016 issue of the Allen Letter professional journal. Just since the Networking Roundtable, in early September, We’ve increased our ‘on hand resource list’ by 100%! But I still need more names and contact information! Reach me via GFA c/o Box # 47024,Indpls, IN. 46247, or phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.
In the second instance. If YOU have successful firsthand knowledge and experience, in one or more of the following four specialized skill areas…
• Matching new HUD-Code home size(s) with rental homesite size dimensions, configuration, and readiness for use of the Frost Free Foundation®…
• Identifying and specifying new Community Series Home (a.k.a. CSH Models) features with what homeowners/site lessees are actively buying in their specific local housing market…
• Committed to selling the ‘right’, ‘truly affordable’ (*1) new home to prospective homebuyers/site lessees, and not defaulting to the ‘biggest home in stock’ or ‘what the customer should not buy’!
• Understand the regulatory restrictions in place today, relative to new manufactured housing sales, and how to effect compliant financing thereof…
• Be capable of ‘closing the sale’ when previous factors are properly in place…
Then COBA7® wants to talk to you about becoming part of the new HUD-Code home sales training team to be featured in several regional and national venues during the year or two ahead. For starters, the first ever Multi-plant Tours & Seminar Program planned for late Spring in Northern Indiana. Then a national debut at the 25th anniversary International Networking Roundtable during the first week of September 2016. And possibly, major regional appearances at the 6th annual SECO Summit in the South (Atlanta, GA), and before or during the Louisville MHShow in early 2017.
So, if YOU are qualified and motivated to be part of the first national training contact team, get in touch with COBA7® ASAP – in the same manner described earlier in this blog.
*1 Affordable housing definition. “Housing is affordable when individuals or households ‘…earning less than half the Area Median Income (‘AMI’)’, can afford to rent a conventional apartment and or buy a home in their local housing market.” Quoted from Bruce Savage’s The First 20 Years! – a history of MHI’s National Communities Council
WANTED! Responsible Change Agents
Peter F. Drucker once told us: “Systematic innovation requires a willingness to look on change as an opportunity.” Well, since change is rarely easy, and “The best way to anticipate the future is by understanding the present.”(*1) -Are we ready for a tumultuous ride thru present day manufactured housing, with an eye to how ‘making changes’ to reclaim prosperity in the near and interim future?
Where change agents appear to be needed. Following not in any order of priority
• Affordable housing defined
• HUD-Code home manufacturers
• Housing finance overregulation
• Manufactured Housing Institute
• Manufactured Housing Association for Regulatory Reform
• Professional property management
• Think Tank.
One early order of business is to retrieve ‘affordable housing’ from the low cost housing folk, who see themselves as the default definition and application for said term. Affordable housing is far broader than just low cost and subsidized housing! It relates differently to every local housing market! Reread end note # 1 in Part I of this blog posting for an apt definition of affordable housing – to see how it varies quantitatively, per AMI, from local housing market to local housing market. This is what we need to be thinking and saying, when we introduce prospective homebuyers/site lessees to manufactured housing and land-lease-lifestyle communities! Is their Annual Gross Income in sync with the AMI of said local housing market, and if so, will half their AGI rent them a conventional apartment, or buy them a (manufactured) home in a LLLCommunity in that market? If not, there is no affordable housing for them in that market! Change agent task? Return ‘affordable housing’ to consensus definition, and in time, widespread application among the citizenry!
HUD-Code home manufacturers. Somewhere along the line, all (certainly the remaining ones) HUD-Code home manufacturers must come to recognize and capitalize on the consequence(s) of the massive paradigm shift occurring since the turn of the Century (i.e. distribution of new homes NOT via independent (street) MHRetailers, but directly into LLLCommunities where they’re sold and often seller-financed by the property owners/operators). It’s happening all around us. In fact, it’s one of those semi-rare instances where statistics gathering has not kept up with reality. For example, the U.S. Census Bureau recently (September 2005) announced 33% of new homes shipped during 2014, went directly into LLLCommunities. NOT. Anecdotally, more than 40% of many/most manufactured housing plant production is being distributed in that fashion; some say as high as 50%. At this point the ‘counters’ have not caught up with what’s to be counted! Change agent task? Awaken all HUD-Code home manufacturers to the reality that 85% of all LLLCommunities contain fewer than 100 rental homesites apiece, and for the most part, are ‘going begging’ for new homes to fill their vacant, sometimes functionally obsolete rental homesites, in large part because they’ve never had to do so in the past (i.e. relied on local, now gone, MHRetailers), don’t have the expertise or capital or ‘fire in the belly’ to do so – without attention and assistance from home manufacturers!
Over regulation of housing finance. In a recent edition of Ken Rishel’s popular online Manufactured Housing Chattel Finance newsletter, he identifies no fewer than six federal ‘watchers’ for financial shenanigans and other operational missteps. Those listed:
• The Internal Revenue Service
• Financial Crimes Enforcement Network
• Office of Foreign Asset Control
• Federal Trade Commission
• Consumer Financial Protection Bureau
If any of these take you by surprise, you need to be reading Rishel Consulting’s newsletter. To do so, phone (312) 878-2802 X 1.Change agent task? Support the two national advocacy bodies who claim to represent our industry and realty asset class in these regulatory matters: MHI & MHARR. Are you a direct, dues-paying member of either or both entities?
Manufactured Housing Institute. MHI is manufacturer-dominated, where income (floor dues) is concerned; with majority of said income coming from one national market dominating mega-home manufacturer. Much the same story on the chattel capital finance side of the institute. So, how do these firms, both owned by the same entity – by the way, ensure political dominance relative to national advocacy matters? There’s a variety of means; two of which are interrelated: MHI patronizes high priced resorts or metropolitan areas for their few major national meetings (a.k.a. affluence gerrymandering), ensuring only the most successful and wealthy members generally attend – with attendance rarely exceeding 100.(*2) And once there, during annual election time, not allowing proxy voting for officers. Change agent task? Recognize ‘Everyone knows what’s going on!’, and how the institute will never capture widespread support throughout the industry, even with a fulltime member recruiter now on board, until they make meetings more affordable and leadership opportunities more accessible.
Manufactured Housing Association for Regulatory Reform. In this industry’s observer’s opinion, MHARR is far too insular, serving an indeterminate number (closely guarded secret, it seems) of smaller, mostly regional HUD-Code home manufacturers. At the same time, however, ‘Everyone is glad they’re there inside the beltway’, serving as our industry’s perennial Watchdog. Which then begs the question, ‘Why do we need an industry watchdog?’ A question few, to date, have been willing to address in public. And this business of the founding executive having retired after 29 years of service? No one is fooled. The farce only lessens the ‘cred’ of the association. Change agent task? Ensure there’s but one ‘alpha male – or female, leader’, open membership and welcome ‘post production’ segments of the industry, OR, once and for all, stop sowing discontent. Returning to the earlier ‘watchdog’ question. Perhaps if the change agent would explore and answer that ‘Why needed?’ question, once and for all, the MHIndustry could begin to work towards (Gasp!) eventual national advocacy unity in our nation’s capitol.
Professional property management. This is as close to being a ‘no brainer’ as matters get. Every other real estate asset class recognizes the intrinsic economic value of its income-producing property potential, and ensures those assets are managed by professionals! Not the manufactured housing industry, and by extension its’ land-lease-lifestyle community asset class! Oh, there’s variously 100 – 200 Institute of Real Estate Management Certified Property Manager® members claiming affinity for LLLCommunities. And since year 2006, the Manufactured Housing Manager® professional property manager training & certification program has designated nearly 1,000 MHM®s. But know what? There’re 50,000+/- LLLCommunities throughout the U.S. That means there’s fewer than one professional property manager per 1,000 such properties. Change agent task? An ‘impossible to change’ challenge until 500+/- property portfolio owners/operators ‘catch the vision’ and ‘see the need’ of professional property management from top to bottom in their firms.
Think Tank. Well, some of us thought we had one. When the Urban Land Institute, at Randy Rowe’s encouragement, started its’ Manufactured Housing Communities Council in 2004, some of us saw periodic MHCC meetings as being ideal ‘come together’ opportunities for various segments of the manufactured housing industry – and that happened for awhile. However, ULI is a high-priced outfit, and strong, charismatic leadership disappeared; so, in the end – during the Spring of 2015, ULI disbanded the too small group. Change agent task? Well, I suppose one person could step forward and attempt to rally support for the Think Tank concept; but don’t hold your breath. A better approach would be for reconstituted MHI & MHARR entities to join with COBA7® and make this an as-needed resource for the ‘double dual industry’(*3). Let’s see if it happens anytime soon.
*1 Quoted from ‘The Competitive Edge’, by Les Harrison, in Executive Focus, October 1995, p.35
*2. MHI’s annual meeting in Boca Raton, FL., @ 4-6 October, saw a record number (123+/-) of participants – since turn of the century, attend. Of that number, 27+/- were state MHAssociation execs; 15 LLLCommunity owners/operators (eight @ large portfolio ‘players’ and seven small property owners); 14 each of HUD-Code home manufacturers & financiers (chattel capital & real estate-secured mortgage originators); 11 insurance reps; and nine freelance consultants….
*3. Double dual industry: manufactured housing production & distribution; land-lease-lifestyle community development & investment/management.