Potpourri of US Congress, MHI, NSAC-III & $ Primer Matters & More…

Potpourri of U.S. Congress, MHI, NSAC III and $ Primer
Matters – & More….

I.

Congressional Research Service Prepares Report on MHIndustry!

During mid September 2011, an Analyst in Housing Policy, for the Congressional Research Service, contacted this manufactured housing industry and landlease community asset class observer and author, for assistance in editing and fine – tuning their DRAFT report titled: ‘The Manufactured Housing Industry: An Overview’.

This 20+/- page DRAFT report defines manufactured housing and describes the HUD Manufactured Housing Standards Program; followed by characterizations of Dealers (Recommended this be changed to ‘retailers’) and manufactured home communities (Recommended this be changed to landlease communities). Much of said DRAFT report deals with HUD Title I loans, VA – loan guarantees & RHS loans, as well as expected effects of the S.A.F.E. and Dodd-Frank Acts on the MHIndustry. Report also describes markets served by our industry, trends in shipments during the past several decades, and ‘problems’ with manufactured homes, relative to site preparation and installation, plumbing and moisture, heating and air conditioning, and more.

The area I took strongest exception to, was the analyst’s inclusion of what I viewed as questionable information from IBISWorld Special Reports. Remember them? The first one, titled ‘Dying Industries’, included their view of MHRetailers, was distributed in March 2011. At the time, I’d read and critiqued it heavily – but to date, haven’t received the courtesy of a reply from the publisher, whose motto incidentally, is ‘Where Knowledge is Power’ – even when their ‘knowledge’ is inaccurate and or incomplete. The second one, distributed in September 2011, has to do with ‘Land Leasing in US’ – was also, in my opinion, awash in flaws relative to our unique income – producing property type. Haven’t responded in writing, to that one. After all, why waste time penning a critique to a publisher who’s already demonstrated an intransigent nature.

So, when will YOU get to read ‘The Manufactured Housing Industry: An Overview’? I have no idea – if ever. But my ‘take’ on the matter is, this report was requested by Congress, as more and more Congressmen recognize the reactionary and ill – advised S.A.F.E. & Dodd-Frank Acts have effected business – killing strangleholds on the sole remaining sources of truly affordable housing (i.e. factory – built housing in general, and HUD Code manufactured housing in particular), as well as the most affordable, non – subsidized housing lifestyle (i.e. landlease, nee manufactured home, community living) left in the United States today! Let’s hope all Congressmen read ‘The Manufactured Housing Industry: An Overview’, and come to our rescue with regulatory relief, stimulating new housing production and shipments, creating thousands of new jobs along the way, as closed factories reopen! For that matter, why not help this thought materialize, by printing off and sending this blog posting, to your Congressman ASAP!

As a related aside; it’s already been observed on several fronts, the Congressional Research Service seeking input from the fledgling national, not for profit, Center for Manufactured Housing Research (Or whatever it winds up being named during the months ahead), is tacit recognition of and support for, third party, nonpartisan, academically – based industry and asset class research that’s only existed sporadically, for manufactured housing and landlease communities, during their 60+ year history! All the more reason for YOU to get aboard NOW, in support of this much – needed research and resource center, going into 2012. If you haven’t already done so, make your moral and financial support known, by responding to this blog posting via gfa7156@aol.com or via the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. To date, more than a dozen LLCommunity portfolio owners/operators, and senior manufactured housing industry executives, have stepped forward in this fashion! Let’s continue to make MHIndustry & LLCommunity history together….

II.

Results of MHI Survey of Attendees @ its’ Annual Meeting, & More…

Nearly half the 110 registrants attending this year’s Manufactured Housing Institute annual meeting completed and submitted two page questionnaires soliciting input relative to the State of the Manufactured Housing Industry. Here’s a brief summary of results displayed during a Power Point Presentation the final morning of that three day session. Nature of respondents? 27% = suppliers; 22% = association executives; 13% = HUD Code home manufacturers; 11 = finance – related; and 9% each for LLCommunity reps, MHRetailers, and ‘others’.

Advantages of factory – built housing? 22% said price; 21%, time to completion; and 19% each for opted for quality, design, amenities, and lifestyle.

What’s greatest impediment to increasing factory – built home sales? High employment cited by 21%; then, 20% each for financing, image, and consumer credit problems; and consumer confidence came in at 19%

What will happen in the overall new – home market during the next two years? 60% believe it’ll ‘stay about the same’; 28% think it’ll ‘improve’; and 12% say it’ll ‘decline’. What do YOU think?

Do you think our (national) market share will increase during the next two years? 52% indicated NO, and 47% indicated YES.

Will homeownership continue to be as a big priority for new generations entering the housing market and forming new families? 61% said YES, and 38% said NO.

Well, there you have it. As one who took much time to complete the lengthy, detailed questionnaire, I was disappointed there wasn’t ‘more’ to this summary. Perhaps MHI staff plans to publish additional insights, in one or another of their communiqués, during the weeks and months ahead. Let’s hope so. But then again, maybe not.

On a different, but related MHI subject. Are you, like me, one of those direct, dues – paying members, who see MHI as a ‘manufacturer dominated institute’, but wonder if change might be afoot? We’ve all heard the bromide: ‘Follow the money!’ No ‘diff’ here. During year 2010, 55% of all ‘dues revenue’ was paid by the Manufacturers Division (I believe that percentage as high, or higher, than 75% during 1990s heyday); and 18% of ‘dues revenue’ now comes from the National Communities Council Division (up from 0% before NCC was founded @ 1/1/1996); with 12% from the Suppliers Division; 8% from the Financial Services Division; and 7% from State Association dues. This data obtained from MHI’s 2012 Proposed Budget. Now you know…

III.

Work on 2nd Edition of Manufactured Housing $$$ Primer Begins

Last year’s best – selling manufactured housing – related book, the Manufactured Housing $$$ Primer is nearly out – of – stock, and in need of updating (i.e. addition of How To information regarding lease option self – finance methodology, renting homes on – site, and more) and expansion (i.e. inclusion of new resources and firms relative to chattel and land/home finance mortgage origination, as well as loan servicing). You may recall this was the first book ever published, describing chattel (personal property) financing as it relates to HUD Code manufactured housing, especially those sited on rental homesites in landlease (nee manufactured home) communities. Do YOU have a copy? If not, you might be able to snag one of the few dozen remaining copies, for only $19.95 (postpaid), by phoning PMN Publishing via (317) 346-7156.

Letters went out this week to the nearly two dozen MHIndustry writers who contributed manuscripts for the first edition of the Manufactured Housing $$$ Primer; along with ‘invitations to participate’, to a half dozen or so new writers. And this is where YOU might come into the picture. If you’re presently and actively involved in one or another aspect of chattel finance (e.g. as a loan originator, independent third part lender, servicer; and or LLCommunity owner engaged in self – finance on – site) and would like to be considered for participation in this second edition, pen correspondence to me, describing the aspect you feel most qualified to write about – and explain why. One particular topic I’d like to address, this time around, is the effect of having ‘park – owned homes’ on – site, either as ‘rentals’ or ‘contract sale’ units, relative to when one (the LLCommunity owner) decides to refinance or market the income – producing property ‘for sale’. Any takers? We really would like to increase participation in this industry wide educational project. OK to email your communiqué, or mail it to GFA c/o Box # 47024, Indianapolis, IN. 46247. Deadline? Soon! The end of This Week, 21 October 2011. Once the new writing team is formed, we’ll set reasonable manuscript submission deadlines.

IV.

And Here’s What Your Peers Have to Say, via Email, about MHBusiness….

“I’d like to bring up what I feel is a major issue in our MHIndustry. That is, all our Seniors. My major market has been Seniors since I got involved back in 1976. They buy our homes for cash, have excellent credit, pay on time, are easy to manage, and stay until something bad happens to their health. But with all the new Senior complexes being built, I’ve lost a major portion of my Seniors market. I cannot compete with them.” Anyone else facing this challenge, and have suggestions for this fellow LLCommunity owner? With enough helpful response, we’ll build a future blog posting around this hot topic.

“How we find and provide (manufactured) houses is where everyone is going in different directions. But is that a bad thing? And does that mean the industry is dying? I am not sure it means that. But what it does mean, is the business is not as profitable as it used to be, when we factor back in, the capital costs of buying the homes, whether new or used. And since it’s now difficult, or certainly less profitable, to do self – financing, that makes it harder to recycle one’s capital to acquire more houses and or communities. So, we do ‘rentals’ to get our capital costs back faster. The industry is evolving, not dying.” DH Does your experience mirror this owner/operator; or do you have a different ‘take’ on the matter? Let’s hear from you ‘renter’ aficionados out there? Another hot blog topic?

“As to a third national grassroots caucus of manufactured housing and landlease community stakeholders, meeting in late January or early February 2012, YES, I would participate, and bring along one or two business associates from the Pacific Northwest. We need to ‘Save Our Industry!’” GH Here the writer is talking of anticipated plans to host National State of the Asset Class III. Long time blog readers will recall NSAC – I, was held on 2/27/08 at FountainView LLCommunity in Tampa, FL. Want to be involved in planning and ‘spreading the word’ about this timely and strategic brainstorming session? Let me know, via any of the means described earlier in this blog posting. By the way, who remembers the tangible result of a national brainstorming session held in Indianapolis, IN., on 8/31/1993? Answer: Formation of the Industry Steering Committee (‘ISC’) predecessor, to today’s National Communities Council (‘NCC’) division of the Manufactured Housing Institute (‘MHI’). Brainstorming works, so let’s do it again!

Pertaining to the identification and recruitment of private investors to supply working capital for self – financing new and resale home sales on – site in landlease communities. “It’s been done for years, but everyone has played their cards so close to their vest, afraid to disclose the names of investors they’re dealing with, etc.. With other (independent, third party) financing alternatives unavailable, or too onerous to deal with (Need I identify those firms who’ve, as one wag puts it, ‘Taken all the risk out of lending chattel monies to landlease community owners.’? GFA), a widespread private investor program could be a huge success, maybe even part of the salvation of our MHIndustry. Also, it dovetails nicely with lease option financing.” (edited) SR. and know what? Ken Rishel of Rishel Consulting, teaches LLCommunity owners, and independent MHRetailers how to do this – raise private capital to underwrite chattel loans. Call (217) 971-3968 for info.

“Hope (industry) events lead to ‘new’ turks taking the lead, and the ‘old’ turks bowing out.” NB ‘Reacting as a bona fide old turk, “Ouch!”’ But I do understand the sentiment. However, a counter to that thought is, ‘a woeful lack of experience’ on the part of many, if not most, New Turks – described in this blog posting a couple weeks ago. Here’s but one example: Rental units (manufactured homes) on – site in landlease communities. To a man (& woman), every Young Turk I talk to, thinks ‘rentals’ are a new and exciting business model for filling vacant rental homesites! First off; the concept is not new – it’s how we filled tens of thousands of vacant ‘lots’ back in the 1970s, then converted them to ‘contract sales’ when the time came to market the properties ‘for sale’. We often rented 14X70 duplex model homes, with a family living in each end of the home! No, ‘rentals’ are not new, but Yes, they can be exciting. But mostly in a negative ways, when one opts to ‘work harder, not smarter’, collecting rent by the month (Rather than by the week, like many of us did in the 1970s), then spend a whale of a lot more money on the maintenance ‘get ready’ of rental units, plus management time to oversee an ‘apartment community’.

“When you were born, you cried and the world rejoiced. Live your life, so that when you die, you will rejoice and the world will cry.” DW A personal and heartfelt response, by a ‘friend in the MHBusiness’ upon reading last week’s ‘Dreamin’ blog posting.

Here’s something we don’t see every day! FALLING PRICES on new HUD Code homes! ‘Our Sale Ends Monday, October 17th, 2011.’ So proclaims the internet flyer recently received from Eric Steadman, website correspondent with Factory Expo Home Centers. For details, call (800) 965-6821. Think this outfit is out of Chandler, AZ. If interested, phone Eric on Monday – that’s tomorrow, to beat the home sale deadline!

V.

Jonathan Douglas Sharp (Jon Sharp to his buddies) of Onyx Capital, succumbed to cancer on 11 October 2011. He will be long missed!

Thanks to several of you, for bringing this sad occasion to my attention. Want to read more of Jon’s saga? Go to www.jonathansharpnews.com

&

Kristian Jensen, Jr., ACM®, 2nd generation owner/operator of landlease community portfolio Jensens, Inc., a longtime supporter of MHI, has died.

For a detailed summary of his service to our industry and asset class, read MHI’s current Week in Review on line. More than likely, his son, Kristian Jensen, III, ACM® succeeds.

***

George Allen, CPM®Emeritus, MHM®Master Box # 47024
Consultant to the Factory – built Housing Industry & Indianapolis, IN. 46247
The Landlease Community Real Estate Asset Class (317) 346-7156

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