OLIGARCHY Revisited & Lease-Option…
COBA7® via community-investor.com Blog # 325 Copyright @ 30 November 2014
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 primary national advocacy voice, official ombudsman, 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
Introduction to this week’s COBA7® blog posting at community-investor.com website:
‘OLIGARCHY Revisited…’ Are manufactured housing leaders ‘spoiling’ (i.e. ‘seriously impairing’) our industry by acquiescing to energy saving innovations cum sales price increases, on new HUD-Code homes, when home buyers can least afford to buy? Or as pundits suggest, is this ruse a precursor to amalgamation of many firms into a very few?
‘Are YOU into Lease-Option, or Want to Be?’ This has to be the best and worst kept Secret to Success among land-lease-lifestyle community owners/operators large and small. Read how this dearth (‘scarcity’, ‘lack’) of education and sharing may soon end!
Stories from the Heartland, an anthology. After authoring and editing a dozen books during the past 26 years, this is the first time a few of my short stories have been published in an anthology, one published by the Christian writers’ group I attend….
Did last week’s blog posting here, opining ‘national manufactured housing advocacy = OLIGARCHY?’ spook you? Did some. One faithful blog flogger (reader) reminded me of a quote he’d shared weeks ago, characterizing naïve, would be ‘land-lease-lifestyle community investors’ who flock to our realty asset class these days – oft times failing, because of mistaken notions and unrealistic expectations. His quote:
“To the uninformed, go the spoiled!”– i.e. income-producing properties that are ‘dead on arrival’, but expected to go ‘Poof!’, and magically transform into ‘cash cows’. Not!
Anyway, his suggestion was, this same quote applies to leadership issues described in last week’s blog posting. That is, if WE continue blindly along the road of little to no helpful, salient information and unanswered questions, from our national advocacy bodies, we should not be surprised if manufactured housing production performance, measured by new home shipment volume, continues along its’ now six year historic nadir: 2009 = 49,789; 2010 = 50,046; 2011 = 51,606; 2012 = 54,881; & 2013 = 60,228. 2014? Too early to tell for sure, but certainly not anywhere near the oft cited ‘comfort zone’ of 250,000 new HUD-Code homes shipped per year! If not yet spoiled, we’re on our way.
What helpful, salient information and unanswered questions? Here are some that come quickly to mind:
• Relative to aforementioned (Blog # 323) ‘Three Strikes & We’re Out!’ of the national affordable housing market. Why are WE still waiting to learn, from national advocacy bodies, the Reasons behind increasing the cost, and by extension – the sales price, of new singlesection manufactured homes by at least $2,000 apiece, even more for multisection HUD-Code homes?! See*1. And while they’re at it, offer a reasonable explanation for the 165% increase in HUD label fees? How much of that finagling had to do with coddling HUD, out of home manufacturers’ fear of facing the future sans HUD oversight? Let me suggest a ‘telling’ starting point; this sobering factoid from a West coast MHIndustry consultant: “In California all new residential housing must be ‘net zero (energy usage)’ by year 2020!” If true, at least ‘that’ sets the stage – something that’s yet to be done by anyone else in our business. By the way, ‘overpricing our housing product’ is the fateful Third Strike against us! Read *1 again.
• U.S. Bank’s recent departure from the independent, third party chattel capital resource market is certainly a Vote Against manufactured housing industry resurgence, and maybe something more. Here’s how another blog flogger views our current business climate: “A king (Warren Buffett) should not be the only source of funding for chattel (capital)*2, and the highest (market) percentage of manufactured housing production*3. I see that reality. So now we have a monopoly, don’t we?” And in their departure, U.S. Bank gave us ‘two guns’ with which to argue relaxed oversight at the Consumer Finance Protection Bureau, or CFPB: ‘Manufactured housing is too much a niche (constricted) market at this time’ to support their business model; and, ‘overregulated’ to boot! So, what have our national advocacy bodies done, since U.S. Bank’s announcement, to get that word, those arguments, in front of Congress? Nothing that this industry observer has seen or heard. However, it’s become common knowledge, a dozen or so state MHAssociations have stepped out on their own to do so!
And while we’re at it, let’s review the ‘Ten heady topics – in the form of questions – of nationwide concern to many of us passionate about the HUD-Code manufactured housing industry and its’ realty component, the LLLCommunity real estate asset class:
• Why ongoing disunity & political ineffectiveness at the national advocacy level?
• Is our future better as purveyor of consumer products OR ‘affordable housing’?
• When will we finally define & describe what we mean by ‘affordable housing’?*4
• Does ‘affordable housing’ apply similarly to mfd. Housing & LLLCommunities?
• Revamp chattel capital model with longer terms and more stringent guarantees?
• Begin or end conversation about replacing vehicle titles with long term leases?
• Is business model better as federally-regulated housing/product or non-regulate?
• When will be right time, way & $, to effect national brand advertising & image?
• How to affect representation parity among all LLLCommunities, large & small?
• Time to measure manufactured housing performance via sales & not shipments?
• ‘Elephant in the room’; consistently safe & secure home installation nationwide?
Quoted from blog posting # 323 at community-investor.com. What would you ADD or DELETE from this list of heady questions on the minds of conscientious entrepreneur businessmen and women across the U.S. these days? Let me know via GFA c/o Box # 47024, Indianapolis, IN. 46247. Or phone me via the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Remember, the Community Owners (7 Part) Business Alliance®, or COBA7® is YOUR Official Ombudsman (press) to the MHIndustry & LLLCommunity asset class. Make YOUR VIEWS known!
Are YOU into Lease-Option, or Want to Be?
Here’s a ground floor opportunity for land-lease-lifestyle community owners/operators desiring to learn more about the lease-option way of business, as it pertains to new and resale manufactured housing placement on vacant rental homesites in-community!
As I pen these lines, a lease-option curriculum is being prepared for beta testing this Winter, maybe as early as February 2015. If YOU are serious about wanting to participate in this educational process – either from the perspective of an experienced and successful practitioner willing to share, or as a novice, let me know firsthand ASAP, via: GFA c/o Box # 47024, Indianapolis, IN. 46247. Or the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. A FOCUS Group type venue is already being planned. Don’t be left out; this could mean the success or failure of your future as a LLLCommunity owner/operator.
While this is not a COBA7® project per se, know that affiliates, a.k.a. ‘MHInsiders’ are involved from start to finish. The impetus? Knowledge that some mega property portfolio ‘players’ already, and have for some time, use this method to fill vacant rental homesites in their LLLCommunities! The ‘rub’ has been, their unwillingness to share said knowledge and expertise with smaller owners/operators and Mom/Pop investors. So, the goal here, is to make lease-option knowledge and procedures broadly available to LLLCommunity owners/operators otherwise locked out of the chattel capital markets due to ‘cherry picking’ by third party firms, and lack of sources within their local housing market.
Relative to ‘raising $ funds’ to support a lease-option program on-site in your LLLCommunity or communities, you’ll want to get your hands on the new Signature Series Resource Document PLUS, or SSRD-PLUS, to be enclosed with the December 2014 issue of the Allen Letter professional journal. It’s a refinement (lengthened and more detailed) of the nine point list, compiled by Spencer Roane, MHM®, for inclusion in the Official WHITE PAPER (End note # 9 on page # 18), distributed at the 23rd annual Networking Roundtable in Peachtree City, GA., earlier this Fall. If you thought ‘that list’ was helpful, this SSRE-PLUS is much better! To subscribe, use the aforementioned (end note # 1) Official MHIndustry HOTLINE. Cost? Only $134.95 for the Allen Letter alone; $544.95 for the newsletter and a dozen SSRDs, an updated one distributed monthly.
Stories From the Heartland, an anthology
This 215 page perfect bound book is available for purchase directly from amazon.com. The collection of short stories and poems is an appropriate Christmas gift for the casual reader on your gift list this year.
Among the 40+/- stories and poems are three I penned during the past two decades. There’s ‘Big George!’, a tribute to my late father. This serious, but sometimes humorous tale has been published in several books over the years – along with the recommendation ‘A tribute like this is something every son or daughter should prepare for either or both parents while they’re still alive’. My father was a colorful guy (semi-pro boxer, foundry man, paladin, and deacon – so easy to characterize. My mother, not so much. So, I dedicated the book, Figurative Language & Figures of Speech as a tribute to her. A second, enlarged edition is due out yet this year; a handy reference tool for writers..
Then there’s ‘Making Amends’ and ‘PUC Beer’. Longtime subscribers to the Allen Letter professional journal have likely read these, since 2006, as lagniappes in said newsletter. However, most readers don’t know the Christmas Eve 2005 experience, described in ‘Making Amends’ was an emotional catharsis to me, unleashing repressed memories of combat in the Republic of Vietnam, dating back to 1968 and 1969. And ‘PUC Beer’, as I often tell folk, when giving them a reprint of the story, describes a chance encounter that, frankly, is as difficult to believe, as it is true!
If you decide to buy the book, I wish there was a way I could autograph it for you. But tell you what. If you contact me, via email or mail (see previous Part I) or phone (317/346-7156), I’ll be pleased to mail you a ‘free’ plastic management wisdom wallet card titled: ‘The Writer’s WRITE card!’, to use as a bookmark.
1. Might the explanation be as simple as this? Here’s a quote from someone who should know: “The DOE issue is a mixed bag. Congress took energy regulations away from HUD, leaving a clear signal to act! So, doing nothing is not an option for DOE.” The commentator goes on to say, “I have some problems with DOE’s life cycle costing model”; specifically, the “first owner (of the new home) will not recapture the upfront costs of the (required) upgrades.” If true, this is a cost and price increase with little to no hope of being returned to the homeowner paying for requisite upgrades cum program. Bottom line? Yet another forced tax, akin to the American Healthcare Act.
2. 21st Mortgage Corporation & Vanderbilt Mortgage and Finance, Inc. (latter, Clayton Homes in-house lender)
3. Clayton Homes, Inc. @ 48+/-% national MH market share, and 80%+/-% when combined with Champion Home Builders, Inc. & Cavco Industries, Inc.
4. “Housing is affordable when individuals or households ‘…earning less than half the Area Median Income or AMI’, can afford to rent a conventional apartment and or buy a home in their local housing market.” Quoted from pages # 105 & 106 in Bruce Savage’s The First 20 Years!, PMN Publishing, Indianapolis, 2013.