U Aware of Impending Title/Tax Imbroglio?
Blog # 239 Copyright 2013 31 March 2013
Perspective. “Land lease lifestyle communities, a.k.a. manufactured home communities & earlier, ‘mobile home park’s, are the real estate component of manufactured housing.”
If We Can’t Get the Job Done (i.e. ‘Restore Financing!’);
Someone, It Appears, Is Ready Now, to do it for (to) us!
‘The New Normal! 50,000+/- New HUD – Code Homes Shipped Per Year! Really? Not Everyone Agrees….
More about Bofus in Las Vegas
If We Can’t Get the Job Done (i.e. Restore Financing!’);
Someone, It Appears, Is Ready Now, to do it for (to) us!
‘Those 21 Words are Likely a Bellwether of What’s in Store for the Manufactured Housing Industry & Land Lease Lifestyle Community Asset Class, if We Continue to Sit On Our Hands and Do Nothing Substantial….’
So, did you take my advice and get yourself a copy of CFED’s 2013 report titled: TOWARD A SUSTAINABLE AND RESPONSIBLE EXPANSION OF AFFORDABLE MORTGAGES FOR MANUFACTURED HOMES? I hope so, because the following paragraphs contain my ‘take’ on this 50 page document. And I’d like to hear yours….
First off; there were nearly no manufactured housing industry or land lease lifestyle community asset class ‘players’ (i.e. businessmen and women, lenders, trade association executives) involved in researching, compiling results, and agreeing on points put forth in this 50 page document. How can the Corporation for Enterprise Development, in good conscience, publish a report of this nature without input from the very folk who stand to be affected by its’ findings and recommendations? Only passing mention is made of ROC USA™ and its’ involvement, via the I’M HOME network, in this Ford Foundation – sponsored project.
Here are the questions this report endeavors to answer. Wherever the words ‘real estate – secured’ are inserted, know they were NOT in the report proper, but added by this blogger for clarification:
• To what extend and from what sources can low and moderate – income (LMI) household obtain MH single – family (real estate – secured) loans?
• How well do manufactured housing (real estate – secured) loans perform, and how does their performance compare with that of mortgage loans for site – built home? (Some readers, like me, opine the report preparers’ statistics gathering, compilation and reporting is questionable, i.e. not identifying and including defaulted loans in performance results)
• As there products or underwriting features that are correlated with more successful (real estate – secured) loan performance?
“The Project’s long – term goal is to expand access to and availability of, affordable (real estate – secured) financing to low – and moderate – income (‘LMI’) owners and buyers of manufactured homes…”
While eight ‘main findings’ are listed early in this report, a couple bear mentioning:
• “Manufactured home (real estate – secured) mortgage performance is comparable to general mortgage performance, and certain manufactured housing (real estate- secured) mortgage portfolios outperform comparable general mortgage portfolios.” That would be encouraging and helpful news, once we’re convinced the number and value of defaulted loans, occurring prior to compilation of statistics for this report, have indeed been included, and lead to this rosy conclusion.
• “Data shortcomings are widespread and a serious barrier to understanding the factors that contribute to loan performance….” Interestingly, none (OK, maybe one) of the independent, third party chattel capital lenders, approached to contribute loan performance data to this report did so. “The resulting dataset totals $1.7 billion in (real estate – secured) loan volume at origination.” What wasn’t researched was the more than $5 billion in chattel mortgages estimated, in the 24th ALLEN REPORT, to be held among 500+/- land lease lifestyle community portfolio owners/operators nationwide AND chattel mortgages, held by the aforementioned independent, third party lenders. Why not researched? In the case of LLLCommunity owners/operators, we simply weren’t asked; in the latter instance? Well, one wag has suggested, “Work in it (chattel lending) to make a high interest buck, until it changes to a new titling of the home.” OUCH! Do you suppose this could be true? I think not, but one now has to consider the matter when….
Like in CFED’s earlier report, REAL VALUE, REAL HOME, tucked away within the report, are these telling lines:
“A major recent development is expected to transform this picture (i.e. “:…allow home owners to convert the title on their manufactured home from personal property to real property….”). In July 2012, the Uniform Law Commission unanimously adopted a Uniform Manufactured Housing Act that would give all manufactured housing owners and buyers the option of titling their homes as real property.” Surprised? You shouldn’t be. This initiative has been in the works for the past several years; now is time to take the matter seriously. Of course, none of this is state law yet – except in New Hampshire.
The stated and desired consequence of title conversion? “The market for (real estate – secured) mortgages for manufactured homes can be expected to grow significantly with more homes titled as real property, and because of consistency across states, that is sought by lenders and investors, including secondary markets.”
Unintended consequences of this conversion? Significant increases in the taxes owners of manufactured housing will have to pay on their homes, particularly those sited on leased land, as in land lease lifestyle communities. While this might be a boon for local, county tax assessors, it could signal the end of LLLCommunties as we know them today, particularly those catering to folk in dire need of affordable housing! They’re no longer going to be able to afford to live in their LLLCommunity, and who will the property’s owners/operators attract to live there, if/when new real estate – secured property taxes take supplant the last affordable housing feature available to this citizenry?
And, it’s widely recognized there’s a dire shortage of affordable housing throughout the U.S. today; so the last thing we need now, is a new mechanism that only exacerbates that sorry situation.
‘the New Normal! 50,000+/- New HUD – Code Homes Shipped Per Year! Really? Not Everyone Agrees….
“The manufactured housing industry cannot survive very long if annual shipments (of new HUD – Code homes) remains below 100,000 per year for very long.” So says one of the most veteran (40 years) and respected (member, the RV/MH Hall of Fame) in the MHIndustry today.
Let’s begin with what I saw and didn’t see at last week’s MHShow in Tunica, Mississippi. And let me say right up front, this was the first time I’d attended that particular, as one attendee referred to it, ‘regional dealer show’ (i.e. a tad bit shy on the number of land lease lifestyle community owners/operators present). Here goes….
Ever been to The Tunica Show? I was pleasantly surprised to see no fewer than 70 new HUD – Code homes on display; clearly, more ‘affordable models’ than what was observed at the Louisville MHShow in January. And yes, there were some Community Series Homes or CSH Models present, but guess what, NOT a SINGLE ONE of them was labeled as such. Go figure….Tells me, these home manufacturers still haven’t learned, or maybe it’s simply ‘accepted the fact’, that land lease lifestyle community sales and sitings will be commonplace for the foreseeable future. And until they do, in this region and otherwise, it’ll be darn difficult to get off that 50,000+/- new HUD – Code homes shipped per year.
And then there were the more than 70 exhibitors displaying their wares and promoting their services. Saw quite a few vendors I hadn’t seen before at other MHShows, and that’s a good thing. The seminars? Ask someone other than me. Having such educational sessions, is certainly an improvement over ‘having none’, as was the case not many years ago; but maybe having nonstop daylong seminars two days in a row has swung the pendulum too far the other direction.
I was pleased to learn that CSL Lending (that’s short for ‘common sense lending’) is broadening its’ chattel finance market to include new homes sited within land lease lifestyle communities. There’re outa Marietta, GA. (205) 331-5700. Ask for Aaron Waters. And Randy Pyle, of Blevins, is already putting together a ‘Security Package for Land Lease Lifestyle Communities’ presentation for the 22nd annual Networking Roundtable in Chicago, IL., 18 – 20 September 2013. Then there was Joshua Dobbs. A young Marine, recently home from Afghanistan, who’s been hired by the rejuvenated Robert Sage Careers, to recruit candidates, and find placements for mid – level jobs within HUD – Code manufacturing plants and land lease lifestyle community property portfolios. Reach him via email@example.com And finally, next time you’re in the Tunica area, make it a point to ‘eat where the locals eat’, at The Hollywood Café, ‘Home of the Fried Dill Pickle’. Technically, it’s located in Robinsonville, Mississippi, and is in a building constructed in the mid to late 1800s, and used mainly for a country store.
More about Bofus in Las Vegas
‘So, how’s Bofus to find ways to improve business acumen? Meet privately with individuals who’re good listeners and have right and helpful ideas and solutions, based on individual effort, long experience, and passionate motivation. And barring that, know who to send Bofus to, to get such business knowledge’
For example, what’s it going to take nationally and regionally, to improve land lease lifestyle community Advocacy, statistical Research, and ongoing Resource distribution? Bofus surely would like to know the answer to that question.
For starters, meet privately with individuals who are already personally and corporately committed to serving the Advocacy, Research and Resource needs of LLLCommunity owners/operators nationwide. Only the first part of that will be found among the inner workings of one or another national trade entity, their recent ‘plans for great things’ notwithstanding. If Bofus isn’t already a direct, dues – paying member of one or another of those bodies, do so.
Where Research and Resources are concerned, a.k.a. Signature Series Resource Documents or SSRDs, monthly installments of same are already in place! If Bofus isn’t familiar with what follows, make it a point to meet with and learn from those who do such ‘resource research’, to wit:
• Annual ALLEN REPORT, a.k.a. ‘Who’s Who Among Land Lease Lifestyle Community Portfolio Owners/operators Throughout North America!’ Without this seminal report (24 to date), we’d have no idea who the portfolio ‘players’ are throughout the U.S. and Canada. And while only 20%, on the average, of the 500+/- known portfolio owners/operators are actually named each year, most of the 500 participate in the survey that makes up the ALLEN REPORT.
• Then, in February, there’s the annual Official State of the MHIndustry & LLLCommunity Asset Class, comprised of Census Bureau data and information gleaned from the aforementioned ALLEN REPORT research.
• National Registry of Real Estate Lenders and Brokers, including the only published list of independent, third party chattel lenders, is distributed every March. The 15th annual edition identified 18 of the largest realty – secured lenders. Next to the ALLEN REPORT, this is the most requested of all SSRDs.
• ‘Who Ya Gonna Call During 2013?!’ is the only published list of freelance management consultants serving the MHIndustry & LLLCommunity Asset Class. The 14th edition of this valuable resource contains 40 names and will be distributed with the April issue of the Allen Letter professional journal.
• Next we have the Official Directory of Manufactured Print and Online Resources, plus social networking guidelines. The fourth edition of this is being researched at this time.
• Official Lexicon or Glossary of MHIndustry & LLLCommunity Terminology is updated and published each year as a lagniappe to the aforementioned newsletter and as an appendix in every text penned about the industry and asset class.
• Property Management Training & Certification Programs, once each year, are identified, described, and recommended in a special SSRD.
• The highly popular Industry Briefing Sheet is not an annual update, but rather is updated whenever deemed necessary throughout the year. It contains all the benchmark statistics pertinent to the MHIndustry and LLLCommunity asset class.
• The annual Trade Advocacy Body Directory is the one time each year, MHIndustry and LLLCommunity aficionados see clearly who is representing them, as businessmen and women, and how well
• Annual Summary of Networking Roundtable proceedings is penned and published during the month following the seminal event. What makes is particularly unique is that all two dozen presenters are identified by name, topic, and their contact information is included.
• The quietest update, if you will, is the annual update of the Official MHIndustry Paradigm Shifts Timeline. Here it’s easy to see and track the business trends of the past 50 or more years.
• Finally, there’s the annual MHInitiative® (formerly the National State of the Asset Class or NSAC caucus. In the past, these have been one day gatherings of MHIndustry and or LLLCommunity execs coming together to a particular end. This annual MHInitiative® Summary is as important a SSRD as any other.
Point? Bofus has no excuse, when patronizing this year’s MHCongress, not to come away wiser and better informed than when he/she arrived. Don’t hesitate to get my attention when we meet or pass one another at the show. I’ve been hired to make at least two formal presentations, i.e. ‘State of the MHIndustry & LLLCommunity Asset Class’, but that still gives me plenty of time on the show floor to talk with you, Bofus, and whoever else happens along….It’s also possible to obtain all the above SSRDs for FREE, as a paid subscriber to the Allen Letter professional journal via the MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.
George Allen, CPM®Emeritus, MHM®Master
Consultant to the Factory – built Housing Industry,
The Land Lease Lifestyle Community Asset Class &
Affordable Housing Purists & Enthusiasts Nationwide
Box # 47024, Indianapolis, IN. 46247