Selling Homes On-Site? Who’s Got Your Back?
COBA7® via community-investor.com Blog#298 @ 5/18/14 Copyright 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 a national advocacy voice, ombudsman press*, statistical research reporter, & online communications resource for all LLLCommunities in North America!’
To input this blog &/or affiliate with Community Owners (7 Part) Business Alliance®, a.ka. COBA7®, use the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764
*Ombudsman press. ‘Manufactured housing’s ronin; fielding inquiries, complaints, etc.
Introduction to this week’s COBA7® blog posting at community-investor.com
What was bound to happen sooner or later? Lack of representation where Product Change Information & Price Increase Warnings are involved. (&) Lack of industry wide dialogue about new housing Product & Pricing, where filling vacant rental homsites is concerned.
And, what’s going to be done about both matters?
The number of COBA7 affiliates continues to grow, as the alliance takes up more and more of the slack where others appear to fear to tread. OR, as the distance and distinction between national lobbying and ‘everything else’ (e.g. ongoing research, resource distribution, print & online communication, peer networking, deal-making, PM training & certification, & national advocacy when/where need be…) appears to lengthen, grassroots businessmen and women are increasingly gravitating to affiliate with peers who share their concerns, needs, and wants.
Have YOU affiliated with COBA7 yet?
It Was Bound to Happen, Sooner or Later, So Here It Is!
More Benefits for COBA7 Affiliates!
It Was Bound to Happen, Sooner or Later, So Here It Is!
‘How HUD-Code home manufacturers deal with a new type MHRetailer’
‘Increased presence of mixed RV/MH rental homesites clouds legislation’
Independent (street) MHRetailers and ‘company stores’ are far fewer in number today, than prior to and at the turn of the century, when ‘Big Box = Big Bucks’ Developer Series Homes competed head-to-head with site builders, via land-and-home packages. Since 2009 though, singlesection and modest-sized multisection homes, designed and labeled as Community Series Homes, a.k.a. CSH Models, with built-in WOW! factors and durability-enhancing features – sited in land-lease-lifestyle communities, have become, in many regions of the U.S., de rigueur for the HUD-Code manufactured housing industry.
Today, the land-lease-lifestyle community owner/operator, for the purposes of this blog message, is ‘ the new type MHRetailer’, when marketing, selling, siting, often self-financing new Community Series Homes on-site! With that said, here’s the recent Product Change Information & Price Increase Warning received, by one LLLCommunity owner/operator, from their HUD-Code home manufacturer of choice:
“As of June, we will have to meet new HUD guidelines. HUD has decided no manufacturers windows are large enough for egress. They have to be increased in size. This may mean the number of windows will change. This will cause an increase in pricing.”
“HUD has also decided panel boxes can no longer go in closets. We will have an option for a panel box cover for those who don’t want to see the cover. They also have decided we need anti scald faucets. This will cause an increase in prices. We are working to see the cheapest way around this.”
“President Obama has hit all factories with Obama care insurance. Each manufacturer has a different date of enrollment. Ours just hit.”
“All these things will affect our pricing. I don’t know how much yet. We will let you know as soon as we can pin everything down. Please cover yourself on quotes to customers.”
Do you see the obvious and serious challenge contained within this correspondence? The issuance of Product Change Information & Price Increase Warnings, with little to no advance notice or substantiation of change claims! If you’re a LLLCommunity owner/operator, and what you just read – or other correspondence akin to it, the first you’re hearing of such matters affecting the marketing and sale of new HUD-Code manufactured homes on-site? If so, you – we ALL need an answer to this question?
WHO, from a national advocacy perspective, is looking after your/our collective manufactured housing business interests in and around the nation’s capitol these days?
There are two national manufactured housing advocacy bodies presently in place.
One entity does not accept LLLCommunity owners/operators – or any other segments of the HUD-Code manufactured housing industry except manufacturers, as direct, dues-paying members. However, that entity faithfully and routinely educates all segments of the manufactured housing industry, relative to technical HUD-Code home matters, via its’ monthly column in the last remaining manufactured housing trade print publication, The Journal; as well as via email and FAX messages of import, to state MHAssociations and other interested parties. But remember, if you’re not a HUD-Code home manufacturer, they are not representing you in Washington, DC. Are YOU on their mailing list? If a LLLCommunity owner/operator, you should be. Call the Official MHIndustry HOTLINE for contact information.
The other entity? Represents the ‘Big Three C’ HUD-Code home manufacturers (i.e. Clayton, Champion, Cavco), some of the largest LLLCommunity portfolio owners/operators, and other segments of the manufactured housing industry, informing members via weekly email summaries and monthly shipment reports. Hosts an annual national trade show featuring seminars, but no longer pens a column for The Journal. With that said; if you have business interests in one or more segments of the HUD-Code manufactured housing industry, you should consider becoming a direct, dues-paying member of this body, or a certified representative from your state manufactured housing association, at periodic national meetings. Again, for contact information, phone the Official MHIndustry HOTLINE listed at the beginning of this blog posting.
So, HOW are we, as LLLCommunity owners/operators (i.e. new type MHRetailers), being backstopped, relative to substantiation of Product Change Information & Price Increase Warnings cited above? To the best of my knowledge, we’re not. So, the questions begging answering are, ‘WHY NOT?’ & WHAT, if anything, should be done about this present day information verification and representation vacuum? And the sooner the better!
Would like your input on this important matter? A thought. This might be worthy fodder for the upcoming, first ever, National Public Forum @ 11 September 2014 in Peachtree City, GA. For more information on that event, and to input relative to this timely matter, phone the Official MHIndustry HOTLINE: (877)MFD-HSNG or 633-4764
Have YOU noticed the increased mention and presence of ‘mixed use properties’ in trade banter characteristic of land-lease-lifestyle community operations? While an increasingly common phenomenon among many, if not most, of the 500+/- portfolio owners/operators of LLLCommunities (i.e. in control of the majority of the 7500+ LLLCommunities containing more than 100-150 rental homesites apiece), in time (some say) the trend will likely affect smaller properties as well. Reportedly, the present day RV rental homesite count amidst the several hundred property portfolio of the largest LLLCommunity owners/operator in the world, is in the neighborhood of being 60% RV.
The trend, to mix recreational vehicle sites, with one’s manufactured housing rental sites, makes sense, from the LLLCommunity owner/operator perspective, for several reasons – all related to increasing physical and economic occupancy, cum cash flow, at these income-producing properties. Specifically, the practice…
• Broadens the overall business base of the operating company, making it less susceptible to unexpected, at times damaging, economics-related swings in local housing market circumstances, even demographics
• Attracts a broader clientele, e.g. homeowner/site lessees, AND seasonal or year round RV owners/site renters, AND others, e.g. construction workers.
• Especially strategic in older LLLCommunities, where ‘doing so’ can be a cash flow-restoring means, or business model, by putting functionally obsolete rental homesites back into operation, siting – where permissible – park model RVs and other types of recreational vehicles.
But here’s ‘the rub’! LLLCommunity owners/operators have routine differences of opinion about operating With OR Without 30 day or long term written leases; also whether to feature a full array of on-site amenities (e.g. pools, tennis courts, clubhouses, etc.) OR operate with none! Likewise, the ‘legality’ of siting recreational vehicles in general, ‘park model RVs’ in particular – as seasonal and year round residences is controversial, in the eyes of certain trade protectionists, local zoning boards and planning commissions; but less so, among LLLCommunity owners looking to fill vacant, oft functionally obsolete rental homesites, to restore cash flow. This RV matter today?
On one hand, there’s federal legislation afoot to amend the existing HUD-Code, expanding an RV-related exception. This change might create a new class of unregulated, and potentially competing, (smaller) structures useable as de facto housing – lacking consumer protection; but preserving present day RV chattel financing and taxation as personal property. At the same time, such smaller structures are in keen demand in LLLCommunities throughout the U.S., yet HUD-Code home manufacturers appear reluctant to fabricate smaller units at cost effective price points. With all that said, it’s felt in some circles, said legislative effort would be better effected via change in the regulatory process, not law.
On the other hand, there’re some strenuous advocacy efforts afoot to prevent said change to the HUD-Code altogether. This is, in part, to prevent erosion of manufactured housing market share by dint of increased RV production; but also to protect the MHIndustry’s efforts, since passage of the Manufactured Housing Improvement Act of 2000, to position the HUD-Code product as bona fide ‘housing’, distancing it from the vestiges of its’ trailer heritage. In other words, preserve the obvious distinction between housing and temporary occupancy vehicles. To this end again, HUD-Code home manufacturers should see ‘the handwriting on the wall’ and begin to routinely produce and ship smaller CSH Model homes with WOW factors, durability-enhancing features, and cost effective price points! *1
A further SPECIAL MESSAGE to HUD-Code home manufacturers, particularly the smaller, regional ones. There’s an estimated 250,000 vacant rental homesites in 50,000+/- LLLCommunities nationwide. UNDERSTAND; They Are Your Fertile New Home Sales Market For NOW! LLLCommunity owners/operators increasingly and eventually, will routinely market, sell, and often self—finance the new HUD-Code homes they buy from you IF & WHEN you produce and ship CSH Model homes with truly cost effective price points! If you’re unfamiliar with the concept of Community Series Homes, phone the Official MHIndustry HOTLINE and request the one page information sheet detailing the above-referenced ‘durability-enhancing features’ of these homes, and add your Business Development Manager’s name to the several dozen already listed there!*2
All this begs yet another obvious question, similar to the one posed in the first part of this blog posting: HOW are we, as LLLCommunity owners/operators, going forward, to make our preferences known – for debate and resolution among ourselves, on policy matters such as this/these? Since it’s easy to see ‘both sides to this issue’, whether to host RVs or not, within LLLCommunities, it becomes all the more important for elected and salaried national and regional leaders of the realty asset class, to provide such opportunity and forum! As was pointed out earlier, perhaps this heady topic too, is a matter to bring before the first ever National Public Forum on 11 September 2014 in Peachtree City, GA. What do YOU think?
But first, some of us, including a few reading this blog posting, will be convening in Indianapolis, IN., on 9 June 2014, for a morning meeting of MHI’s National Communities Council (‘NCC’) division. Let’s wait and see if the two matters publicized in Part I of this week’s blog posting are brought up as New Business items before that august body, maybe even before the parent body at large. I won’t be the one to do so! Will you?
1. “…the RVIA is moving to include 400 sq. ft. travel trailers in the same category as recreational park trailers. Since the Park Trailer Industry Association merged with RVIA last year, the effort has been to merge those units that are under NFPA A1195, so there is (to be) one category = RVs. As for non-RVIA sealed units, once unified, the seal will probably be the RVIA A 1192 on all units. And if land-lease-lifestyle communities want RVs in their communities, that would be no problem. As for non-RVIA units, there are not likely too many of those. RVIA represents about 90% of all units manufactured.” From one of my confidants.
2. The one continuing ‘information shortfall’ among LLLCommunities marketing, selling, and self-financing new HUD-Code homes on-site, is the woeful lack of readily accessible, easy-to-use, HOW TO information per selling said product in a community environment, as opposed to the independent (street) MHRetailer’s salescenter. For example; the latter lives from ‘deal to deal’, while the LLLCommunity owner/operator is shepherding an annuity type investment lasting ‘for years’, hence great concern for maximizing one’s commission versus ensuring credit worthiness and verifying stability of one’s homebuyer/site lessee. To this end, a writing team is being formed to prepare a new text on this very subject, the first one since Gary Pomeroy’s 1977 classic: How To Successfully Sell New and Resale Manufactured Homes. If you’d like to be considered as a co-author in this project, let me know via (317) 346-7156.
More Benefits for COBA7® Affiliates!
Nary a day goes by anymore that the phone doesn’t ring, or emails appear, asking how one affiliates with the Community Owners (7 Part) Business Alliance®, or COBA7®. As I’ve penned before, in just four months the alliance has grown from two dozen affiliates (The original ‘inner circle’ of LLLCommunity owners/operators who suggested forming said alliance) to 200+/- individuals and firms who’ve affiliated at one of these three levels:
• Option I = Allen Letter professional journal® only, @ $134.95/year
• Option II = Allen Letter plus 12 Signature Series Resource Documents®
or SSRD®s, including the 25th anniversary edition of the ALLEN REPORT (A.k.a. ‘Who’s Who Among LLLCommunity Portfolio Owners/operators Throughout North America!’) @ $544.95. This is how vast majority of folk have affiliated to date
• Option III = Allen Letter plus a dozen SSRDs & the Allen CONFIDENTIAL!
business newsletter @ $944.95/year
And by way of review, here’re the Seven Function, or parts, that comprise COBA7®:
• Ongoing statistical research & reporting, e.g. annual ALLEN REPORT®, etc..
• Resource production & distribution via Signature Series Resource Documents®
• Print & online communication via two newsletters and a weekly blog posting
• Superb peer networking via annual Networking Roundtable & FOCUS Groups
• Unique realty deal-making opportunities via relationships with national brokers
• Professional Property Management Training & Certification via the Manufactured Housing Manager® program, with nearly 1,000 MHMs® designated to date.
• National Advocacy when need be, e.g. Official ombudsman (press) for MHIndustry & LLLCommunity owners/operators. (Inquiries arrive daily)
With each passing week and month, COBA7® learns of new and additional ways to serve its’ increasing bevy of affiliates. Here’re several recent additions:
• Unofficial COBA7® Slogan: ‘U support US & WE support U!” COBA7®
• What else does affiliation with COBA7® garner YOU, besides the seven function areas in general, newsletters and SSRD®s in particular? Opportunity to participate in the updating the dozen SSRD®s – Where would you like to help? And when it’s time to research and author a book, or update an edition of an existing one (e.g. Landlease Community Management text for MHM® program), capable, experienced, motivated COBA7® affiliates will be given first opportunity to volunteer. And COBA7® affiliates are to whom I look first, when recruiting presenters for the annual Networking Roundtable, FOCUS Groups, and MHM® instructors. The values, for YOU, in all this?
There are several ways YOU benefit from all this! 1) Opportunities for YOU to stretch and mature as a researcher, writer, and eventual expert in LLLCommunity matters!2) An opportunity for YOUr name to receive national, even international exposure, as an industry and realty asset class resource, even expert. And, since all COBA7® books (12 published via GFA Management, Inc., dba PMN Publishing) and 12 monthly SSRDs® will eventually be housed in either the National Building Institute’s huge library in Washington, DC., or at the RV/MH Heritage Foundation’s library in Elkhart, IN., 3) YOU – as a writer, author, researcher, realize an immediate legacy in the manufactured housing industry and land-lease-lifestyle community real estate asset class by dint of your COBA7® affiliation! And, as unofficial historian of the LLLCommunity asset class, I get to ensure 4) worthy individuals are feted in books dealing with the history of the realty asset class, e.g. Bruce Savage’s 2013 tome, The First 20 Years!, PMN Publishing.
If a COBA7® affiliate, and seriously interested in participating in the seven functions, in some fashion, let me know via letter to GFA c/o Box # 47024, Indpls, IN. 46247, or phone (317) 356-7156. To affiliate with COBA7®, simply phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. Or ask for a COBA7® brochure.
FYI. GFA Management, Inc. dba PMN Publishing is a long time, direct, dues-paying member of the Manufactured Housing Institute (‘MHI’) – and by extension its’ National Communities Council (‘NCC’) division; and would belong to the Manufactured Housing Association for Regulatory Reform (‘MHARR’) if permitted to do so. Also am an early supporter and continuing big fan of the work of the American Housing Advocates (‘AHA’), ‘online advocate for all things factory-built housing’ – even taking on The New York Times in recent weeks. And now, of course, COBA7® is in this heady national mix of three business advocates and one alliance. Opportunity to affiliate with COBA7® has been offered to all three national bodies, but to date none have responded. Also, all have been invited to participate in the 23rd annual International Networking Roundtable, 10-12 September 2014, in Peachtree City, GA. Two of the three have indicated they’ll be present for the first ever National Public Forums, scheduled for the morning of 11 September 2014. To ensure YOU receive an ‘invite’ to this historic event, phone the aforementioned Official MHIndustry HOTLINE. Attendance limited to 250.
George Allen, CPM & MHM
Box # 47024, Indpls, IN. 46247