‘Who’s Working in Your Behalf – manufactured housing’?

Blog # 387 Copyright 2016 COBA7® @ 28 February 2016; community-investor.com

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 national advocacy voice, official ombudsman (press), 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

COBA7® Motto: ‘U Support US & WE Serve U!, &Goal of its’ print/online media = to ‘Not only inform & Opine, but transform & improve MHBusiness Model Performance!’

INTRODUCTION. Did you know? As we go about our daily business in the MHIndustry, and as LLLCommunity owners/operators – and lenders, there’re businessmen and women taking steps intended, in time, to rejuvenate HUD-Code manufactured housing, and fill an estimated 250,000 vacant rental homesites in properties throughout the U.S.? Well there are, and this blog posting might be your first exposure to three independent initiatives occurring outside the confines of either, or both, national advocacy bodies in and near our nation’s capitol. What are YOU doing to advance these initiatives?



We’re Reshaping the MHIndustry Business Model!

Who’re we talking about here?

Smart HUD-Code home manufacturers, savvy land-lease-lifestyle community owners/operators, even lenders!

How so?

Well, it’s been a three-step process spread over the past seven years, and the cycle likely won’t be complete for, well, another few years.

But we are getting a bit ahead of ourselves, so let’s stop, and describe the background, in effect lay the groundwork on which historic business model changes have occurred during the past few years, present day situation(s), and likely what’s to happen in the not too distant future.

1998 – 2000. For the second time (some say third*1) in its’ (then) 50 years history, the manufactured housing industry abused its’ easy access to chattel capital, to fund ‘home only’ loans in (then) manufactured home communities. Result?

By 2005, chattel capital from independent third party lenders had pretty much dried up. Annual shipments of new manufactured homes slid from 372,843 & 250,550 in years 1998 & 2000 respectively, to 129,902 by year 2005. Then it was observed, no fewer than six types of housing were now relatively commonplace in our unique, income-producing property type, so MHCommunity became land-lease-lifestyle community, or LLLCommunity for short. *2

2009 = nadir (bottom) year for HUD-Code manufactured housing, when only 49,789 new homes shipped! It was also at this point the number of independent (street) MHRetailers began to decline precipitously, from more than 14,000, to fewer than 4,000 (including ‘company stores’) a few years later! Who picked up the slack? Read on…

Enough background. This is where the three-step process leading to historic (manufactured housing) business model change began! On 28 February of that year, at the RV/MH Hall of Fame in Elkhart, IN., 100 HUD-Code home manufacturers and LLLCommunity owners/operators caucused to agree on a new home design that’d entice community owners to ‘buy more homes’, boosting shipment volume. Results? Community Series Home, or CSH Model design*3 was agreed upon, though not named as such until eight months later at the International Networking Roundtable.*4 Also that year, only 25% of new homes were going directly into LLLCommunities.

Fast forward to year 2015. By the end of this year, many plants routinely turned out CSH Models, often purchased by the 500+/- property portfolio firms who’d been consolidating the property type during the past 35 years.*5 By year end, it was estimated that 40% of all new HUD-Code homes were being shipped into (the larger) LLLCommunities. In summary, that meant the 12,500 homes shipped in 2009 more than doubled in number to 28,000+ homes during 2015! But it was also recognized, the vast majority of (smaller) LLLCommunities, awash with an estimated 250,000 vacant rental homesites nationwide, were NOT buying new homes, for several reasons: lack of ‘know how’; mostly passive, often absentee investors; and, lack of working capital and home finance, unless the mortgage was paid off.*6 Which brings us to the second step in the aforementioned three-step process leading to historic business model change.

HOW TO train and motivate small to mid-sized LLLCommunity owners/operators to buy more new HUD-Code homes and sell them on-site, even seller-financing them if need be? That’s where we are today, and in part, why THIS BLOG POSTING is a major step in this recovery scenario!

On 25 & 26 May 2016, at the RV/MH Heritage Foundation’s Hall of Fame, Museum & Library, in Elkhart, IN., the manufactured housing industry will host the ‘first ever’ Two Days of Plant Tours & Home Sales Seminars! No fewer than six plants are committed to offer a total of 24 tours during the two days (Champion Homes, 2 @ Clayton Homes, The Commodore Corporation, Cavco (Fairmont & Harmony), and Adventure Homes). The four seminars (Getting Ready!, Buying Homes! Selling Homes! Financing Homes!) will each be presented twice during the two day period. And all seminars will be taught by capable, experienced, successful, motivated LLLCommunity owners presently selling new HUD-Code homes on-site! Goal? To motivate small to mid-sized LLLCommunity owners/operators to attend, visit factories, and learn HOW TO prepare their properties, HOW TO buy new homes, HOW TO sell new homes on-site, and HOW TO finance them, when need be! We haven’t even printed brochures, but have more than 50 individuals registered to attend! How can you not want to be part of this exciting event? To put your name on the preferred invite list, simply email gfa7156@aol.com, or phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764. There will also be opportunities to interface with firms offering chattel capital financing, as well as consultants providing training and resources on HOW TO be compliant with state and federal finance regulations.

The third-step in this historic business model changing sequence? Well, it’s ‘in process’, and has to do with the way we might finance new HUD-Code ‘home only’ loans within LLLCommunities ‘in the future’. Up front bottom line? We can continue to struggle along with limited access to chattel capital, increasing our annual shipment rate by only 4,000+/- new homes per year, e.g. 70,535 + 4,000 in 2016 = 74,535; then 78,535 in 2017. You get the picture; is this what you/we want? NO! So, to exceed that sluggish pace, we must do something major differently! And that might well have to be, again, in the area of ‘home only’ finance! Not going into detail here, other than to say, there are major U.S. banks who will jump at the opportunity to finance new HUD-Code homes if we, as an industry, would adjust our traditional business model to give them, the lenders, protections like they enjoy with real estate-secured mortgages. Is that possible? Some say YES, others say NO. And that’s where we are today, with this added whisper: Rumor has it, several major $ ‘players’ – sources and consultants, will likely meet during the next six months to work thru this situation, in search of a solution designed to help rejuvenate the MHIndustry. Who knows? Might even dust off the Freddie Mac program of 2006 that disappeared when the national economy went into national recession in year 2007….

In summary; the Community Series Home, in 2009, got the slow recovery ball rolling in the right direction. Now that portfolio firms are 40% buyers of new HUD-Code homes, it’s time to get the 85% of national (smaller) LLLCommunity owners/operators trained and motivated to do the same! Hence the ‘Two Days of Plant Tours & Home Sales Seminars’ @ 24 7 26 May 2016 in Elkhart, IN. No reason why such a unique and timely program can’t be emulated in Southeast, South Central, West coast, and Pacific Northwest regions of the U.S. Will YOU be the next event planner and promoter?

OR, to state it differently, more succinctly…

Years 2000 thru 2015 = 15 year paradigm shift for the manufactured housing industry of yore and today; culminating during 2014, with the co-debut of the Community Owners (7 Part) Business Alliance®, or COBA7®, and NEW ERA for the MHIndustry & LLLCommunity asset class, with latter dubbed ‘New Breed of MHRetailer & Lender’!

Are YOU on board? It’s not too late, you know…

End Notes.

1. For detailed treatment of this subject, read Otto Wontuck’s classic feature, ‘Looking Back at 50 Years of Manufactured Housing Financing’, in the now defunct Manufactured Factory Home Merchandiser magazine, June 2000, p.45.

2. LLLCommunities = pre-HUD ‘mobile homes’; post-HUD manufactured homes’ ‘park model RVs’, a.k.a. ‘PMRVs’; ‘RVs for a season’; and, stick-built homes constructed on-site in LLLCommunities, usually after hurricanes (only in FL).

3. Community Series Homes = WOW factors inside & out, plus a plethora of durability-enhancing features, to speed ‘make ready’ of units between renters or homebuyers/site lessees.

4. At the International Networking Roundtable in 2009, freelance landscape design consultant Don Westphal suggested labeling the new home design as Community Series Home.

5. In 1989 only 25 property portfolio firms; 500+/- known in 2016. See the 27th annual ALLEN REPORT, .a.k.a. ‘Who’s Who Among LLLCommunity Portfolio Owners/operators Throughout North America!’, available from COBA7® with Option II affiliation @ $544.95. Phone the Official MHIndustry HOTLINE: (877) MFD-HSNG or 633-4764.

6. This was 85% of the 55,000+/- known LLLCommunities nationwide, i.e. those with fewer than 100 rental homesites apiece.


George Allen, CPM & MHM
Box # 47024, Indpls, IN. 46247
(317) 346-7156

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