What YOU Missed, & HUD Mfrs Still Don’t Get It!
What YOU Missed at the Louisville Manufactured Housing Show
HUD Code Home Manufacturers Still ‘Don’t Get It!’
1,000+/- attendees visited more than two dozen new homes (Mostly indoors, but with three FEMA units outdoors) & 82 supplier exhibits, during the 2 ½ day rejuvenated Louisville Manufactured Housing Show! KUDOS to Show Ways’ Dennis Hill for planning and facilitating the improbable: A New Manufactured Housing Show with a Landlease Community ‘Spin’ to the Program, if not the homes themselves – but more on this point in part II of this blog posting.
More proof of the emerging ‘popularity and profitability of landlease (nee manufactured home) communities’ lies in the asset class’ increased level of participation in this traditional mid – January manufactured housing show, up from 10% in years past, to more than 20% this year! And this, sans participation by most large Midwest property portfolio owners/operators, identified in the just released 22nd annual ALLEN REPORT! Why absent? Probably because they’re routinely buying new manufactured homes in bulk – in one case via a bidding process, built to their specifications; so, probably feel they don’t need to see what’s on display in ‘Luavul’. This time around, who could blame them? – again, more on this point in part II of this blog posting.
Veteran Midwest Manufactured Housing Show attendees remember it was anathema, in years past, to schedule any activity that’d take attendees ‘off the display floor’ during the day. After all, folk (i.e. MHRetailers) were there to buy homes, not necessarily to ‘learn how to do so better’. Well, this year was 180 degrees different. Four pithy, one hour programs, were planned to attract LLCommunity aficionados, and attract them they did – Thanks to online efforts of MHMSM.com (ezine), Ken Rishel’s Chattel Finance Newsletter, this blog, and the Allen Letter professional journal, which comprise the, new in 2010, Print & Online Publishers’ CONSORTIUM. Result? An average of 40+ LLCommunity owners/operators attended each of the following sessions:
• Don Westphal prepared a Power Point Presentation describing the genesis, and present day manifestation, of Community Series Homes or ‘CSH’. These are new lines of HUD Code manufactured, and modular, homes that’re Affordable, Adaptable, and Attractive! They’re often singlesection in configuration, with 3BR2B and an open floor plan featuring some sort of ‘WOW’ factor. Most have shutters on windows, vaulted ceilings, asphalt shingled roofs, and linoleum in kitchens, utility area and at the front door. They also have 40 gallon hotwater heaters, 200 amp service, wood cabinetry, and non – plastic sinks and tubs. And best of all, CSH homes are competitively priced! If you’d like a list of the CSH specialist Business Development Managers (‘BDM’), assigned to ‘talk the talk & walk the walk’ of LLCommunity infill, using manufactured homes, see End Note # 1. To reach Don Westphal, phone (248) 651-5518.
• Ken Rishel of Ken Rishel Consulting delivered a comprehensive overview of ‘captive finance’, a.k.a. or (property owner) self – financing of new and resale transactions effected on – site in LLCommunities. Far too many details and timely advice to describe here, so sign up for his FREE, aforementioned online newsletter by phoning (217) 971-3968. While you’re at it, ask for the firm’s CD on how to prepare for and comply with the new Red Flag program! Plus, if you don’t have a copy of the 100 page Manufactured Housing $$$ Primer, for helpful information on chattel financing, see End Note # 1. Cost? Only $25.00 postpaid.
• ‘Setting Affordable & Risky Price Points for New & Resale Manufactured Homes, Sited Within & Outside Landlease Communities, in any Local Housing Market in the U.S., using AGI & AMI, & HEF guidelines’ was the first LLCommunity – focused seminar in the afternoon. If you’d like free copies of the seminar outline and ‘Ah Ha! & Uh Oh!’ worksheet, see End Note # 1.
• Tony Kovach and his team of marketing specialists, introduced the day’s largest audience, of more than 60 LLCommunity owners/operators, to the exciting new world of online marketing, of new and resale homes, via web site design, blogging, social networks, and much much more. For a copy of that Power Point Presentation, phone the firm at (847) 730-3692.
Heavy snow throughout most of the nation (At one point, 49 states had ‘snow on the ground’) surely affected Louisville MHShow attendance. But now is the time to purpose to attend the January 2012 event! And if you want to input the program composition, talk to Dennis Hill at Show Ways.
So, just how many Community Series Homes were on display at this year’s rejuvenated Louisville MHShow? Oh, two, maybe five, possibly seven, depending on how one ‘counts’. Apparently, only one HUD Code manufacturer, of the six exhibiting at this year’s event, ‘gets it’. Get’s what? That LLCommunities have been, for the past several years – and continue to be, major purchasers of new HUD Code manufactured homes, for on – site infill, ‘marketing, selling & self – financing, when necessary, to get the ground rent meter running!’ But you wouldn’t know that, when viewing the behemoth, tricked – out, multisection homes on display at this year’s Louisville MHShow. Oh, they were certainly ‘pretty enough’, even impressive, but totally out of sync with what most of the couple hundred LLCommunity folk were looking to buy at the beginning of year 2011! Close to a dozen LLCommunity owners, ‘would be homebuyers’, came by the GFA Management, Inc., booth to complain, ‘There’s nothing here at the show for me to purchase for our property!’
Performed an informal survey on Thursday at the Louisville MHShow. Wanted to identify how many of the 29 known BDMs were present to ‘sell product’ to LLCommunity owners/operators; how many CSHs were indeed on display; and, inquire how manufacturers taught wholesale home purchasers (i.e. MHRetailers & LLCommunity owners) to calculate selling price points, for their homes, when marketed in various local housing markets, where Area Median Incomes (‘AMI’) vary widely.
BDM presence. There were three: Walt Comer & Chris Miller from Adventure Homes of Garrett, Indiana; and, Brian Cira of Harmony Homes in Nappanee, IN. But, by the time I was done with the survey, several more were formally added to the BDM roll: Joe Kimmel of Champion (Northeast), Wade Lyall of Champion (South), Jim Justice of Champion (West), and Nathan Kimpel with Manufactured Housing Enterprises, Inc., out of Bryan, OH. These four new BDMs will be added to the next update of that widely referenced resource. Again, see End Note # 1.
CSH presence. Adventure Homes had two Community Series Homes on display. One was 28X44, the other a 14X72 model home. Harmony Homes had larger homes on display, 28X64 & 16X80, both a tad bit large for many, if not most, LLCommunities. And it’s questionable whether the three FEMA homes exhibited outdoors in front of the convention center, should be labeled as CSH models. Size wise they certainly are, but interior features are not akin to specifications listed earlier in this blog posting. Bottom line? Two for sure, maybe four, perhaps seven CSH models among the 25 HUD Code and modular homes on display at this year’s Louisville MHShow.
Price Points. Let’s not even ‘go there’, this time around. It’s clear to this industry observer, present day home manufacturers have little sensitivity to what square footage and features will sell, based on AMI and Annual Gross Income (‘AGI’) in different housing markets throughout their targeted geographic regions.
Bottom line? This year’s Louisville MHShow demonstrated how HUD Code home manufacturers continue to design and fabricate homes to interest land developers focused on scattered (owned fee simple) site and subdivision placement, i.e. The Big 4 B Formula, where ‘Bigger Box = Bigger Bucks’, rather than return to their historic roots and creatively address the affordable housing needs of the greater part of this nation’s citizenry, especially during these times when both conventional real estate and chattel (personal property) financing is so difficult to obtain. Hence the headline: ‘HUD Code Home Manufacturers Still ‘Don’t Get It!’’
22nd annual ALLEN REPORT debuts! Allen Letter professional journal subscribers, for the last time, received a FREE copy of the annual ALLEN REPORT. The now 50+ page compendium of landlease community information, statistics, trends, listing of major portfolio players, and much much more, retails for $450.00/copy. Copies, at the Louisville MHShow, however, sold at a Special Price of only $250.00. And given this was a very limited print run, the remaining 100 copies will likely not last long. So, if YOU want a copy of this seminal document, maybe the last edition that’ll be published, ORDER your copy today! Blog readers can purchase the 22nd annual ALLEN REPORT, this week only (January 17 thru 21, 2011) for the above referenced show price of only $250.00. See end note # 1 to order.
Ouch! Some blog ‘floggers’ (readers) responded strongly to last week’s title: ‘A Call for (more than one) Honest Intellectual Debate’ – within and throughout the HUD Code manufactured housing industry! Gonna let that one lie (percolate?) awhile, to see if more commentary arrives. If so, we’ll pursue the matter further. In the meantime, here’s but a taste of what’s already in hand: “In order to have ‘honest’ debate, we must start with ‘honest’ individuals.” K And this challenge: “The HUD Code problem: ‘How Can We Make Chattel Financing Survivable for Average Lenders?’ L ‘Hmm. What a choice place to start an Honest Intellectual Debate. Anyone else out there a – pondering?
1. To order offered items, phone the MHIndustry HOTLINE (877) MFD-HSNG or 633-4764 or (317) 346-7156.
George Allen, Realtor®, CPM®Emeritus, MHM
Consultant to the Factory – built Housing Industry & ‘
The Landlease Community Real Estate Asset Class
Box # 47024, Indianapolis, IN. 46247