AUGUST 2018
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MHINSIDER.COM ™
T H E N E W M A G A Z I N E F O R M A N U FA C T U R E D H O U S I N G P R O F E S S I O N A L S
2018 RV/MH Hall of Fame Induction Dinner and Celebration IN THIS ISSUE:
Cascade Financial Fills Out Offerings for Manufactured Home Lending 3 Things to Consider When You’re Ready to Sell Your Community Kevin Clayton: Man on a Mission A Publication of
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CO NTE NT S ™
VOLUME 1 • ISSUE 3 AUGUST 2018 ON THE WEB MHInsider.com –––––––– Executive Editor
Darren Krolewski darren@mhvillage.com
30 RV/MH Hall of Fame
2018 Induction Dinner and Celebration • MH Inductee Profiles
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Cascade Financial Fills Out Offerings for MH Lending
Kevin Clayton Reveals His Intentions for The Home of the Future
Managing Editor
Patrick Revere patrick@mhvillage.com
Creative Director
Mark Dollan dollan@mhvillage.com
Contributors
George Allen Dr. Lesli Gooch Kevan Enger Donna Rishel Dennis Smith
Cover Photo
RV/MH Hall of Fame CK Photography/Chris Kausch
Advertising Sales
FAIR HOUSING 7 In Compliance with Fair Housing
Matthew O’Brian Call (877) 406-0232 matthew@mhvillage.com
Disclaimer
FINANCING 13 Freddie Mac Brings Conventional Financing to a New Generation of MH NEWS BRIEFS 17 Industry Happenings: News and Updates from Around the Industry EVENTS 20 Industry Trade Shows This Summer 23 It Was a Great Year in Vegas for MHI and the Congress & Expo 24 Multi-State Convention: a Beach Weekend to Learn, Laugh and Share 27 George Allen’s Annual International Networking Roundtable Returns to Indianapolis 28 SECO18 Draws 350-Plus MH Professionals to Atlanta Oct.10-11, 2018 TIPS / ADVICE 53 Preserving Your Personal and Corporate Legacy
Although we have made every effort to ensure that the information in this issue was correct before publication, MHVillage, Inc. and the publisher do not assume and hereby disclaim any liability to any party for any loss, damage, or disruption caused by errors or omissions, whether such errors or omissions result from negligence, accident, or any other cause. Opinions expressed are those of the author or persons quoted and not necessarily those of MHInsider or the publisher MHVillage, Inc.
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ADVOCACY 56 MHI Secures Key Wins for Manufactured Housing Across Multiple Fronts TRENDS / INSIGHTS 61 Skyline Champion Corporation Becomes Nation’s Largest Public Factory Home Builder 63 3 Things to Consider When You’re Ready to Sell Your Community 4 | MHINSIDER™ • AUGUST 2018 • MHINSIDER.COM
2600 Five Mile Road NE Grand Rapids, MI 49525 1-800-397-2158 www.MHVillage.com
W ELC O M E
Welcome
On Legacies, Advocacy and the Affordable Housing Crisis By Darren Krolewski • Photo courtesy of Equity LifeStyle Properties, Inc.
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enjamin Franklin once said, “If you would not be forgotten as soon as you are dead, either write something worth reading or do something worth writing.” In this third quarterly issue of the MHInsider, we explore a common theme of honoring and preserving legacies. This August, the MH/RV Hall of Fame in Elkhart, Indiana will induct its Class of 2018. Each year, these nominees read like a who’s who of some of the most respected, successful and dedicated members of the manufactured housing industry. Indeed, much of the greatest learning in business results from the experiences of those who have come before us. We would be remiss not to learn from the long history of our industry. Because history, as we all know, has a funny habit of repeating itself. On that note of preservation, industry consultant, author and previous Hall of Fame inductee, George Allen shares some of his thoughts on preserving legacies through the printed page. In this article and its digital companion piece on MHInsider.com, Allen highlights some of
the autobiographies by members of our industry as well as offers some helpful pointers on how to get started writing your own memoir. Even if you’re not at that point in your career when you’ve even begun to contemplate your legacy, worry not. There’s still plenty of opportunity left to make your mark on history. Our country is in the midst of an affordable housing crisis and as the nation’s largest segment of unsubsidized affordable housing, we can be part of the solution. I recently returned from the MHI Legislative Fly-In in Washington, DC, where I had the opportunity to help inform our elected officials about some of the important issues facing our industry and, in turn, affecting their constituents. Affordable housing is an issue that concerns everyone, and we are fortunate to have supporters on both sides of the aisle. It’s a testimonial to the efforts of our national association and the members of our industry who cultivate relationships with their representatives in Congress on our behalf. As much as we hear about the division and rhetoric of American politics,
and at times, divisiveness within our own industry, the reality is that we all need to find a better way to work together if all the good we anticipate is going to get accomplished. The affordable housing crisis may not be solved easily, but at least we are seeing awareness in Washington that manufactured housing can help solve some of the nation’s housing challenges with little or no intervention from government. All they have to do is keep harmful policies out of our way and allow us to keep doing what we do best. And who knows, perhaps that in itself will be our legacy. MHV Darren Krolewski is Co-President and Chief Business Development Officer of MHVillage, the number one website for manufactured homes, retailers and communities. Prior to joining MHVillage in 2014, Darren held senior marketing positions in the telecommunications, advertising and financial services industries – and was a partner in a marketing consulting firm serving the housing industry.
MHINSIDER.COM • AUGUST 2018 • MHINSIDER™ |
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FA I R HO US I N G
Fair Housing
In Compliance with Fair Housing By Donna Rishel • Photos courtesy of Deer Valley Homes and Equity LifeStyle Properties, Inc.
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ommunity owners and operators dealing with Fair Housing has become a top issue as more and more owners are shoveling out money for fines and lawsuits. Hardly a week goes by that I don’t hear about another community owner getting nailed over these issues. Thanks to Rick Robinson of MHI, industry leaders are learning about the dangers that community owners, and to a more limited extent, retailers face every day. The Fair Housing Amendments Act of 1988 (“FHAA”) is a federal law prohibiting discrimination in the rental of dwellings for certain protected classes. The exhaustive list of protected classes consists of race, color, religion, sex, national origin, familial status and handicap. The Americans with Disabilities Act, ADA, also provides additional protection for individuals with disabilities. In addition to federal laws, there is a morass of state, regional, and local laws, rules, regulations, and letters of advisement to deal with as well. To prevent discrimination in accordance with the Fair Housing Act,
FHAA, ADA, or state or local laws (col- portionate impact on minority home lectively “Acts”), a community owner seekers. Accordingly, community should adopt clear and uniform appli- owners will need to have a substantial, cation and leasing practices to ensure legitimate, and nondiscriminatory that a members of all protected classes reason for implementing a policy are treated equally. The Department which considers criminal records in the of Housing and Urban Development housing application process. Moreover, (HUD) issued guidance on background community owners and managechecks in a document, dated April 4, 2016, Criminal background checks conducted during the are being reviewed by HUD to application process. This is a very new determine whether processes have area of compliance a potential “disparate impact” for Fair Housing and (meaning “unintentional impact”) is based on a Supreme on protected classes, regardless of Court ruling affirming the validity of applying whether a background check policy disparate impact to the is non-discriminatory on its face. screening methods and – Donna Rishel, Rishel Consulting Group standards of community owners and other community owners. In light of statistics ment should ensure that the intent demonstrating that African Americans achieved by their criminal background and Hispanics are incarcerated at rates screening policy cannot be achieved disproportionate to their share of the by another practice that has a less general population, HUD warned in discriminatory effect. guidance published on April 4, 2016 that criminal records-based barriers CONTINUED ON NEXT PAGE to housing are likely to have a disproMHINSIDER.COM • AUGUST 2018 • MHINSIDER™ |
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Criminal background checks are being reviewed by HUD to determine whether this process has a potential “disparate impact” (meaning “unintentional impact”) on protected classes, regardless of whether a background check policy is non-discriminatory on its face. Thus, while criminal background checks should be conducted in a uniform manner, the results should be reviewed and analyzed on an individual basis to ensure that applicants are not denied based on discriminatory purpose or disparate impact. When this subject comes up, the question I most often hear is, “How exactly does a disparate impact claim work? And is it as draconian for community owners as it seems? The short answer is that while the threat of a disparate impact claim may give management a bit of heartburn, there are safeguards in place to pro-
tect legitimate, nondiscriminatory policies and practices. As I’ve written about before, a disparate impact claim allows a plaintiff to attack a housing policy that may
seem nondiscriminatory on its face, but which has a disparate impact on certain protected classes. As upheld by the Supreme Court, and as originally
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promulgated by HUD, a disparate impact claim encompasses a burden shifting framework.
An Examination of Disparate Impact So, what does that mean in plain English? Well, under the Supreme Court’s guidance, a disparate impact claim works as follows: First, the plaintiff must make a threshold showing of disparate impact, meaning that the plaintiff must show that a challenged practice or policy has caused, or will cause, a discriminatory effect. Importantly, pursuant to the Supreme Court’s guidance, there must be a causal relationship between the defendant’s practice or policy and the discriminatory effect—if there is not, then the plaintiff cannot make its required initial showing, and the case is dismissed. If the plaintiff does make this initial showing, then the burden shifts to the defendant to show that the practice or policy is necessary to achieve one or more substantial, legitimate, non-discriminatory interests. Presuming that the defendant makes this showing, then the burden shifts back to the plaintiff to prove that the interests offered by the defendant in support of the practice or policy could be achieved by another practice or policy with a less discriminatory effect. While the above framework may seem complex, the key takeaway is that ownership is still able to articulate and rely on a valid interest served by the challenged practice or policy as a defense to a disparate impact claim. Moreover, the causal requirement set out by the Supreme Court—which the Court itself described as needing to be “robust”—is designed to ensure
NMLS #93140 | www.nmlsconsumeraccess.org CONTINUED ON PAGE 10
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that defendants will not be held liable for disparities that they did not create. In fact, the Supreme Court has specifically cautioned that courts should examine with care whether a plaintiff has met the threshold requirements to make a disparate impact claim, and that courts should promptly dismiss those cases where the plaintiff’s initial showing is insufficient. While the above safeguards can provide community owners with a little peace of mind, it is still instrumental for them to analyze all practices and policies to determine if they might have a discriminatory impact on any protected classes and, if so, to consider whether there are any less discriminatory means that might equally achieve the intended goals of the practice or procedures. It is strongly suggested that most operations will either need to retain a qualified consultancy or an expe-
rienced regulatory attorney or firm as this requires careful calculation and documentation. In the rental of manufactured homes or lots to homeowners, ignorance of the Acts is not considered an excuse for avoiding liability. A discriminatory act or statement at any stage of the rental process can place community owners on the losing side of a lawsuit. Community owners can be held liable, through vicarious liability, for any discriminatory act made by an employee who is at any level in the company, or an agent of the community owner. By holding community owners liable for all levels of employment or third-party agents, the community owner must take affirmative action to provide training to all staff. Community owners should protect against liability under the Acts by making sure their employees are highly trained in what to say
and what to do when dealing with prospective residents and current residents as well. MHV Donna Rishel is Rishel Consulting Group’s Director of Compliance Issues and Training. A Certified Compliance Trainer, she oversees all consulting and customer employee training for Fair Housing, ADA, and a variety of other issues. While the above safeguards should provide management with a little peace of mind, it is still instrumental for management to analyze all practices and policies to determine if they might have a discriminatory impact on any protected classes and, if so, to consider whether there are any fair means that might equally achieve the intended goals of the practice or procedures.
Earn Incentives for Built-in Efficiency AEP Ohio offers cash incentives to retail centers/ communities and their HVAC suppliers for new energy-efficient manufactured homes within its service territory. Get a competitive advantage by offering your customers the quality they deserve at a price they can afford. For more program details, call (614) 360-9309 or e-mail AEPOhio-NMH@magrann.com or visit EfficiencyCraftedHomesAEPOhio.com.
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Financing FINANCING
Freddie Mac Brings Conventional Financing to a New Generation of Manufactured Homes By Dennis Smith • Photos courtesy of Clayton Homes
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n 1998, if you asked anyone to describe their perceptions of a telephone, you would get a pretty standard answer. Two decades later, today’s “phone” is barely recognizable visually, and contains features, applications and capabilities that couldn’t have been imagined back then. Every so often, it’s useful to take a second look at a product or technology to see what changes have been brought to the market. Manufactured housing is no exception, and Freddie Mac is working to help educate potential homebuyers about the realities of today’s manufactured homes. Though some borrowers may have dismissed them in the past, many are finding that second look worthwhile. That’s because
there’s a new generation of manufactured housing that might just be the best option for first-time homebuyers, millennials, and empty-nesters looking to downsize. In July, we launched our CHOICEHomeSM pilot, specifically tailored to a new type of high-quality manufactured home. These homes have features such as garages, permanent foundations, built-in porches and a 5/12 roof incline. Many of these homes also come with energy-saving features like double-pane windows and additional insulation. These features illustrate a product that has evolved for the better, while remaining at a low price point that is affordable to low-income and working families.
At Freddie Mac, we believe that just as manufactured homes have evolved, manufactured home financing has to evolve as well. That means potential homebuyers should be able to enjoy conventional loan financing to purchase a manufactured home. An important part of our mission is increasing access to mortgage credit across the country for affordable housing. For manufactured homes, the CHOICEHomeSM pilot does just that. The nation is facing a shortage of affordable housing stock that has reached crisis levels, affecting millions of U.S. households. Safe and affordable housing is increasingly hard to find across large swaths of the nation. This shortage particularly affects millennials and baby boomers -- the CONTINUED ON NEXT PAGE
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two largest generations in number -- who want to find their first home or their retirement home, respectively. According to the U.S. Census Bureau, there will be 71 million young adults age 20 to 34 in the United States in 2019. Many of these young adults will be first-time homebuyers and all of them will drive the demand for housing, particularly affordable housing, for years to come. In addition, baby boomers will number an additional 72 million, many of whom are “empty nesters” and will be looking for an affordable home.
Simply put, the demand for affordable housing isn’t going away any time soon. And manufactured homes will have a crucial role to play. Millions of America’s families rely on manufactured housing, especially in rural areas. Today, more than 22 million Americans live in manufactured housing and the need is only expected to grow. According to the U.S. Census Bureau, 321,000 new manufactured homes were shipped by manufacturers in the first quarter of 2018.
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Freddie Mac has looked for innovative ways to increase liquidity in the manufactured housing space. Through the CHOICEHomeSM pilot, we hope to provide a scalable opportunity that brings together multiple industry players who support manufactured housing as high-quality, affordable housing stock. These pilot participants -- lenders, manufacturers, retailers, mortgage insurers and appraisers – are all integral parts of the lending process. CONTINUED ON PAGE 16
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FIN AN CING CONTINUED FROM PAGE 14
During this pilot, Freddie Mac will treat the loans it purchases on manufactured homes titled as real property in the same manner as single-family site-built homes. Access to conventional financing that eliminates many of the traditional manufactured housing requirements is a true win-win for lenders and borrowers. Both will benefit from a more streamlined mortgage experience that is faster and, more importantly, less expensive over the long term. The primary objectives around the CHOICEHomeSM pilot include: • Obtaining data that documents trends in loan value and overall performance so we can see how these homes retain their appraised value and how they perform generally; • Working with the industry to support the development of a standard product to finance manufactured homes for the long term. Through this pilot, we’re seeking feedback – and trying to see what works and what doesn’t work. • Increasing the purchases of factory-built housing loans characterized as real property;
• Improving consumer perception It’s All Part of Our Duty to by promoting well-made, fac- Serve Underserved Markets tory-built homes as a quality, mo dern, viable, affordable Through our Duty to Serve effort, housing option; and we’re tackling some of the nation’s most persistent housing challenges. We welcome this opportunity work with the industry to develop innovative solutions like the CHOICEHomeSM pilot and promote greater access to credit for affordable housing. It’s an important step forward in increasing responsible financing options for buyers of manufactured homes, and we look forward to continuing our positive momentum in this important space. For more information about Duty to Serve, visit www.freddiemac. com/about/duty-to-serve/. MHV • Leveraging the Freddie Mac Home Dennis Smith ® Possible product to expand is an Affordable access to credit for low-toLending Manager moderate income borrowers. of Single-Family Freddie Mac is dedicated to imAffordable Lendproving America’s affordable housing ing and Access to finance ecosystem for the benefit of Credit at Freddie homebuyers, manufacturers, sellers Mac. He manages the manufactured and lenders. In our work to re-imagine housing initiatives that support Freddie the mortgage experience, we want Mac’s underserved markets plan. to be an active participant in the FOR MORE INDUSTRY NEWS VISIT conversations about manufactured WWW.MHINSIDER.COM housing and support industry change.
When it’s time to sell, ROC USA® will be there.
We were there with financing of $5 million in February 2018 for the homeowners in and the operators of a 56-site Salt Lake County, Utah MHC that is now the Applewood Homeowners Cooperative. ROC USA is: • Paid by the buyer • Active in 21 states • Capitalized to meet all of the co-op’s financing needs ROC USA is a national network of 220 Resident Owned Communities home to 14,000 homeowners, and we’re growing by more than 1,000 home-sites per year. Provided the opportunity, homeowners want community ownership; we make resident ownership viable and successful. When you’re ready to sell, please contact us first.
Angela Romeo, National Acquisitions Manager aromeo@rocusa.org • 603-513-2791 • www.rocusa.org 16 | MHINSIDER™ • AUGUST 2018 • MHINSIDER.COM
NEWS BRIEFS
Happenings
INDUSTRY
News and updates from around the industry...
Howard Walker, Vice Chairman of Equity LifeStyle Properties (ELS) and MHI Treasurer, passed away in April. Mr. Walker was an industry pioneer and supporter of manufactured housing with a visionary leadership style. He was admired for his intelligence, wit and passion for people. ELS attributed much of its success and culture to Howard’s contributions during his 23 years with the organization. Paragon and Propac Images co-owner Wendell Ray Glassco died on June 6 after a lengthy battle with Alzheimer’s disease, his family said. He was 77. Glassco and his wife Bonnie started Carousel Decors in 1970 as a provider of decorative accessory packages to the manufactured housing industry. Michigan-based RHP Properties, the nation’s largest private owner of manufactured home communities, has acquired Brookside Country Club, with 421 home sites, in El Monte, Calif. With the acquisition, RHP Properties now owns and manages 235 communities with 60,163 sites in 24 states. Brookside Country Club offers an affordable housing solution in a market otherwise dominated by
high multi-family rents and singlefamily home prices.
approximately 231 acres. The average occupancy rate is 91 percent.
Indiana Gov. Eric Holcomb signed into law state bill 375, which eliminates the requirement for permanent tags on carriers that transport modular homes to customers. The switch to a transferable tag program and recyclable carriers, which may serve as model for other states, will save money for builders, retailers and customers.
Green Courte Partners announced the promotions of Amy A. Bjork and Jon S. Pollan to vice president and Amber N. Mullenix to senior associate.
Westland Distributing, the leading distributor of parts and supplies for the manufactured housing industry in the Western United States, announced in June that it has acquired Arizona Home Supply and Nevada Home Supply, regional distributors of industry parts and supplies. YES! Communities has acquired Woodland Estates, a 338-site community in Kalamazoo, Mich. UMH Properties Inc. acquired two manufactured housing communities in Anderson, Ind., about 40 miles northeast of Indianapolis, for $20.5 million. All totaled, the properties feature 669 developed home sites on
Fannie Mae has launched its much-anticipated MH Advantage program. The program is designed to provide increased financing options for manufactured housing and close the gap between affordable housing and the traditional site-built residences. Factory Home Center opened a new retail location in June in Princeton, Minn. It is the company’s third location in Minnesota, with others in Redwood Falls and Paynsville. ROC USA assisted community residents in the purchase of Applewood Estates in Midvale, Utah, a 56 site-community in the Salt Lake City market.
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President Trump signed into law SB 2155, the “Economic Growth, Regulatory Relief, and Consumer Protection Act” that includes updated language on “Preserving Access to Manufactured Housing”, clarifying that a manufactured housing retailer or seller is not inappropriately considered a mortgage “loan originator” simply because they provide a customer with some assistance in the mortgage loan process. Brown & Brown, the country’s sixth largest insurance intermediary, has acquired Manning & Nozick Insurance Agency of Atlanta, Ga. Patrick Industries Inc. has completed the acquisition of Dehco Inc. a distributor and manufacturer of parts and accessories primarily for the recreational vehicle markets as well as the manufactured housing, marine and other industrial markets. Dehco’s primary products include flooring, kitchen and bath products, adhesives and sealants, electronics, appliances and accessories, LP tanks and other related building materials. Sacramento-based BoaVida Communities LLC and Cascade Corporate Management bought upscale recreational vehicle and mobile home parks in San Diego County for $27 million.
Arbor Re alty Trust Inc. has provided a $16 million Freddie Mac loan for the refinancing of Lakeview Terrace in Kansas City. The 541-unit manufactured housing community is located just north of the Missouri River. Built in 1970, the community features newly renovated mobile homes in addition to a clubhouse, basketball court, playground and two swimming pools. Next Step Network announced Funding Partners, a community development financial institution that creates access to capital and credit within underserved markets throughout Colorado, is joining Next Step’s efforts to promote sound financing options for manufactured home buyers. Pine Crest Estates, Macomb County Michigan’s first manufactured home community for those 55 years of age and older opened June 16. Monroe & Giordano, located in Tampa, Florida, the nation’s oldest, independently owned and operated mortgage banking firm specializing in Manufactured Housing Community financing, recently arranged financing on Cypress Creek Village in Winter Haven, Florida. The borrower received long term fixed rate financing in the amount of $14,462,000.
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Saddlebrook Farms, owned and operated by Hometown America Management Corp., was named 2018 Land Lease Community of the Year by Illinois Manufactured Housing Association. The 55+ community in Grayslake, Ill., was built in 1989 and boasts more than 1,700 ranch-style sites, an on-site library, lakeside recreation center, community gardens, wooded walking paths and countless affinity clubs. A new 4,400 squarefoot fitness center was added in 2015, along with a lakeside picnic pavilion.
“Saddlebrook Farms stands out in our Association as a vibrant community with active residents and responsive management. In addition, the community is beautifully planned out on 100-plus acres of lakefront property,” says Frank Bowman, Executive Director of IMHA. Bedrock Group acquired five manufactured housing communities in North Carolina from Horizon Land Co, also known as “Tar Heel Portfolio”. The properties add 542 lots under Bedrock ownership and management across central and southeastern North Carolina, bringing its year-to-date acquisitions to nearly $23 million.
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EV ENT S
Trade Shows Industry Trade Shows This Summer August Trade Shows
September Trade Shows
Multi-State Convention
George Allen International Networking Roundtable
Aug. 4-6, 2018 • Orange Beach, Ala. – Perdido Beach Resort The Multi-State Retreat is an annual draw for community owners and operators, retailers and other manufactured housing industry professionals who operate from or have business in Alabama, Louisiana, Mississippi or Tennessee. The multi-state effort provides the ideal setting for networking among the large community of MH pros in the region, and will include a series of educational and informational presentations, including sales and installation seminars.
RV/MH Hall of Fame Heritage Foundation 2018 Induction Ceremony
Aug. 6, 2018 • Elkhart, Ind. – Northern Indiana Event Center Eleven new members to the RV/MH Hall of Fame will be inducted during a dinner to honor the members of the hall, the work of the industries and the diversity of the 2018 class in its demographics, geographies and array of business segments.
Rocky Mountain Home Association 2018 Annual Meeting and Conference
Aug. 15-16, 2018 • Black Hawk, Colo. – Ameristar Casino & Spa RMHA offers a mountain resort getaway west of Denver that attracts MH professionals from across the state and throughout the region for two days of networking, industry presentations and best practices. Rooms are available for $109 while event availability lasts.
National Tiny House & Simple Living Jamboree
Aug. 23-26, 2018 • Austin, Texas – Travis County Expo Center Tiny House & Simple Living Jamboree is this year will include a two-day industry only trade show before opening up for the general public on the weekend. The Jamboree is the tiny house destination for professionals, enthusiasts, lifestyle advocates, and those interested in delivering and celebrating the best that simple living has to offer: mindful practices, eco-friendly products and services and, of course, one-of-a-kind tiny houses. Organizers estimate a total of more than 70 tiny structured to tour this year.
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Sept. 5-7, 2018 • Indianapolis, Ind. – The Alexander More than 200 land-lease community professionals gather each year to share latest trends, best practices and make deals. In its 27th year, the Roundtable is an industry keystone.
Florida Manufactured Housing Association Annual Convention
Sept. 18-19, 2018 • Orlando, Fla. – Rosen Shingle Creek Approximately 250 people are anticipated in attendance at Florida’s largest gathering of manufactured housing professionals. Exhibitor booths will be open during the Tuesday night Welcome Reception and the following morning’s Continental Breakfast. The Welcome Reception includes open bar, a variety of catered foods and the best networking opportunity of the year.
MHI Annual Meeting
Sept. 23-25, 2018 • Huntington Beach, Calif. – Paseo Hotel & Spa MHI’s largest membership meeting of the year provides an excellent opportunity to exchange information with industry friends, stay current on housing marketplace trends, and attend the board, committee and division meetings.
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MHEI’s Accredited Community Manager (ACM®) Certification Manufactured housing communities can represent million or multi-million dollar investments that deserve professional management. The ACM courses cover hands on and financial management challenges and were written by a team of industry experts. Students will hear lectures, participate in group discussions and prepare to apply the learning to their property.
The Accredited Community Manager (ACM) certification was developed by the Manufactured Housing Educational Institute to raise the standard of training for manufactured housing community managers. This program educates the land-lease community operators on issues unique to their career.
If you would like to schedule an in-person course to be held by your company, or in your state, please contact Lee Krinzman – lkrinzman@mfghome.org or 703-558-0654 for more information. Manufactured Housing Educational Institute | 1655 Fort Myer Drive, Suite 200 I Arlington, VA 22209
E VE N T S
Congress & Expo It Was a Great Year in Vegas for MHI and the Congress & Expo
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he Manufactured Housing Institute (MHI), the nation’s lone trade group representing factory-built housing, wrapped its big week in Las Vegas in May. HUD Sec. Ben Carson was perhaps the most prominent keynote speaker in the event’s history. The gathering enjoyed lofty attendance, sparking a conversation about the potential historic rise of manufactured housing. Carson reaffirmed his commitment to reforming HUD’s manufactured housing program, intoning to MH pros the importance of the industry in addressing the nation’s affordable housing crisis. He said, to do that, the department’s approach to manufactured housing will have to change. “According to the economists, we are experiencing the biggest jump in housing prices in four years – prices are rising while the supply of housing is getting smaller. It’s basic supply and demand,” Sec. Carson said. “That’s why everyone in this audience and the manufactured housing industry is so important – and that’s why I am here today. You are a big part of the solution to providing unsubsidized, quality, affordable housing.” A top priority for MHI has been creating a more cooperative regulatory environment at HUD for manufactured housing. Progress has been made through ongoing outreach with the White House, HUD and Congress.
Sec. Carson acknowledged MHI's efforts in his remarks stating, “Your leadership and fellow members have let us know where improvement can be made and what issues need to be addressed… let me just say that as the Secretary of HUD, I hear you.”
Best MHI Congress & Expo Attendance in 12 Years The 2018 MHI Congress & Expo at the Paris Hotel in Las Vegas was able to draw more than 1,300 attendees for industry leading educational workshops, multiple days of networking and keynote presentations. MHI sends along its wishes to thank members of the institute who help to lead the charge for the industry every day.
Congress & Expo 2019 Will Land in the ‘Big Easy’ MHI also announced a new and exciting change. For the first time in a decade, the show will be held somewhere other than the Vegas strip. The 2019 Congress & Expo will be in New Orleans at the Hyatt Regency from May 5-7. Mark your calendars now and keep an eye out for important event information. See you in New Orleans! MHV
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EV ENT S
Multi-State Convention Offers Attendees a Beach Weekend to Learn, Laugh and Share By Patrick Revere • Photos courtesy of the Alabama Tourism Department and Perdido Beach Resort
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t’s been six years since the state associations of Tennessee, Mississippi, Alabama and Louisiana decided to combine forces and hold the Multi-State Convention. And each year it feels increasingly more like a family reunion. “We have about 330 to 360 attend, and it’s a good even mix of all of our community owners, managers, retailers, service suppliers and manufacturer reps,” Mississippi Executive Director Jennifer Hall said. “We’re really excited about it. We always have things for the children, which is fun. Many people bring their families because it’s kind of a last beach trip for the season. We are a close-knit community, and it’s almost like a family reunion. It’s a great atmosphere and a wonderful way to network, especially for those who are new to the industry.” The 2018 Multi-State Convention will be held Aug. 4-6 at Perdido Beach Resort in Orange Beach, Ala. T h e Lo u i s i a n a M a n u fa c t u re d Housing Association serves as host state association for this year’s convention with the theme of “Exploring New Possibilities”, a theme that reflects the industry’s upturn and growth potential. LMHA Executive Director Steve Duke said it’s been more than 30 years since the last time economic factors and consumer sentiment
Convention Multi-State
have lined up as well as it is today for the industry, and current growth could outpace anything MH professionals have experienced. “You always factor in so many things when you go to analyze all of this, but one of the most important things is the health of the lending market. When you see what Fannie and Freddie are doing to create greater access, and then smaller local and regional lenders getting into the business, it really provides a lot of optimism for us.
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“Unemployment is low, need for housing is high, and having a growing secondary market in lending really looks like it will create a favorable environment for buying and selling homes,” he said. Midday Saturday at the MultiState Convention each of the state associations will hold board of directors meetings, followed by the Welcome Reception for attendees and the simultaneous Kids Program for younger guests.
E VE N T S
Sunday at the Multi-State Convention offers a choice of three outings: golf, fishing or a cooking demonstration. That evening is the annual Dessert Extravaganza. “The Dessert Extravaganza is really about us giving our service and supplier exhibitors an evening to take a client to dinner without missing
anything, and then we can all come back together for dessert and close out the evening,” Hall said. Monday opens with a breakfast buffet followed by the General Session with presentations from Rick Robinson, who is general counsel for the Manufactured Housing Institute, as well as Darren Krolewski from MHVillage, and representatives from Fannie Mae and Freddie Mac who will provide updates on chattel lending. That afternoon is a series of stateby-state breakout sessions, with another kids program that evening while attendees close the convention with a reception and banquet. The Alabama Manufac tured Housing Association will also hold continuing education programing on Tuesday Aug. 7. “We try to do something with a variety of activities that will really allow people to spend time together,” Hall said. “Now that the industry is doing so well, with all of the states having increases in shipments, everyone is so busy and maybe the most difficult thing is to find the time that’s needed for everyone to take a breath and catch up. “We’re reaping the benefits of a lot of hard work from people who have been in the industry for years, and it’s great to be able to hear some of those stories,” she said. “And every year you learn something new about the people, about the business and about the history of what we do.” MHV Pa t r i c k R e ve re i s managing editor for the MHInsider magazine, as well as the MHInsider blog and MHVillager, a lifestyle and resources blog for homeowners and residents. He is an award-winning journalist and writer who has written extensively about manufacturing, real estate, management, technology, the building trades and the labor markets.
MHINSIDER.COM • AUGUST 2018 • MHINSIDER™ |
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Call Kim Scott - Director (MH Operations and Sales) at 248-865-0066 | www.mshapirorealestate.com 26 | MHINSIDER™ • AUGUST 2018 • MHINSIDER.COM
E VE N T S
George Allen’s Annual International Networking Roundtable Returns to Indianapolis By Patrick Revere
G
eorge Allen’s 27th International Networking Roundtable will take place in Indianapolis at The Alexander hotel Sept. 5-7, drawing a few hundred of the leading land-lease community owners and operators for a discussion on best practices and deal making. Allen, who founded and runs Community Owners Business Alliance (COBA7), will greet attendees Thursday morning and give way to the 2018 keynote speaker, Joe Stegmayer, who is chairman of Cavco Industries and chairman of the board for both the Manufactured Housing Institute and the RV/MH Hall of Fame. In addition to the presentation by Stegmayer, there will be a pair of conversations on chattel capital, which will include information from Fannie Mae and Freddie Mac. Allen says invites are out for representatives from HUD to attend, which seems likely to happen given the department’s renewed interest in manufactured housing.
Spencer Roane, a champion of smaller to mid-size community owners who is a co-founder of the SECO annual conference in Atlanta, will present on the development of a new chattel capital program for owners and operators. Attendees stand to gain a lot at this year’s Roundtable, with the industry on the rise and energy among its top contributors at an all-time high. Indeed, even hard-to-impress industry leaders can appreciate that the 200 people Allen draws are owners, CEOs, CFOs and highly regarded analysts and consultants. Katie Hauck and Kathy Taylor, who each own and operate 11 communities in the Midwest, will kick off the unofficial first day of the Roundtable on Wednesday Sept. 5 with the Manufactured Housing Manager Class. In addition, there will be more than a dozen other presentations ranging in topic from how to acquire or refinance a community, how to host a sales seminar, information on third
party fee management and a talk on writing for publication And for Allen himself, with those decades of experience and the way he weaves a story, the Roundtable is well worth the visit. So, come to Indianapolis again this year for the George Allen International Networking Roundtable, grab a copy of the updated “Swan Song”, and let Allen tell you how he once, long ago, purchased a community for $400,000 and a couple years later sold it for $2.5 million in cash. It’s one worth hearing. MHV Patrick Revere is managing editor for the MHInsider magazine, as well as the MHInsider blog and MHVillager, a lifestyle and resources blog for homeowners and residents. He is an award-winning journalist and writer who has written extensively about manufacturing, real estate, management, technology, the building trades and the labor markets. SUBSCRIBE ONLINE AT:
WWW.MHINSIDER.COM
MHINSIDER.COM • AUGUST 2018 • MHINSIDER™ |
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EV ENT S
SECO18 Draws 350-Plus MH Professionals to Atlanta Oct.10-11, 2018 By Patrick Revere • Photos courtesy of Nicely Made Media and the Atlanta Airport Marriott
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his year the Southeast Community Owners symposium (SECO) moves to a more central and convenient Atlanta location, the Atlanta Airport Marriott on Best Road, with newly renovated guest rooms and a spacious top-of-theline conference center. Each year at SECO is a set of new topics and speakers, but the goal remains the same. “This is a program put on by community owners for community owners,” SECO Co-founder Spencer Roane said. “This is not an outside party trying to talk to you about your business and hoping to make some money. “We want to create and promote nice looking, healthy communities filled with quality homes and people who are happy to be where they are,” he said. “We don’t think that’s too much to ask, and we find we’re not alone.” Notable Program Highlights for SECO18: • Network with Fellow Community Owners and Managers • Explore New Ways to Run Your Community
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New Location for SECO18: Atlanta Airport Marriott College Park, Georgia Attendees at SECO18 will include community owners, managers, vendors and other industry personnel from more than 25 states. Additionally, SECO offers educational workshops, presentations and panel discussions to complement three days of networking.
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Who Should Attend? Anyone who owns or has an interest in the vitality of manufactured home communities will find great value in attending SECO18. The program focuses on tactics that can benefit professionals who own anywhere from one to 100 communities. This includes the owners and investors, but SECO18 also is beneficial for general managers, managers and other operators. The networking opportunity with owners/operators will be beneficial for lenders, suppliers, home manufacturers and corporate property managers as well. But there is no mistake – this is a gathering directed by community owners for community owners. Nearly 50 industry exhibitors will fill the hall at the Marriott, where attendees can receive special room rates by mentioning the SECO conference. And come a day early for pre-SECO events, which include professional workshops on management and growth strategies for manufactured home community owners and managers. More information about SECO can be found at secoconference.com. MHV
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H ALL O F FAME
Hall Fame OF
2 018 INDUC TION DIN N ER AN D CEL EBRAT ION
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HA L L O F FA M E
RV/MH Hall of Fame Holds Annual Induction Dinner on Aug. 6 in Elkhart, Ind. By Patrick Revere • Photos courtesy of RV/MH Hall of Fame and CK Photography/Chris Kausch
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he RV/MH Hall of Fame in Elkhart, Ind., has experienced and adequately dealt with what might be called its midlife crisis, and emerges this summer as a powerful component in what proves to be a new era of manufactured housing.
Organization to be Debt Free This Year “I’ve been semi retired for about 22 years now and six years ago in March I committed to help the Hall of Fame out of its debt situation,” RV/MH Hall of Fame President Darryl Searer said. “I volunteered for one year to help the hall get financially independent, and here six years later I am still volunteering. This summer I should be able to announce that the RV/MH Hall of Fame is debt free. “After the first year it kind of got into my blood,” said Searer, who helped the organization pay off its $5.5 million in debts. “It became my passion and I just wanted to see the Hall of Fame working as well as it could for both the RV and MH industries. It’s the shining star of both industries and it would be a shame to have seen it go away.”
Founded in 1972, the hall has inducted nearly 400 industry pioneers, most typically with five being brought in from each of the RV and manufactured housing industries each year. Each potential inductee must have at least 25 years of experience in the respective industry, and be nominated by an industry professional. In August 2018, the RV/MH Hall of Fame will induct 11 new members.
Rebecca (Becky) Lenington Executive Vice President, Pennsylvania RV and Camping Association Pennsylvania Association Executive Daniel R Pearson President and CEO Pleasureland RV Minnesota RV Dealer CONTINUED ON PAGE 34
RV Inductees Derald Bontrager President & CEO Jayco Corporation Indiana RV Manufacturer Roger Faulkner President - General Coach Canada Ontario, Canada RV Manufacturer Gregg Fore President, Dicor Corporation Indiana RV Industry Supplier
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H ALL O F FAME CONTINUED FROM PAGE 31
Manufactured Housing Inductees Michael A. Cirillo, Santa Ana, Calif.
President of Star Management, 1979-present MH Communities Owner Nominator: Thom Niederkofler, Pacific Current Partners Mike grew up in the mobile home business as the grandson of a first-generation Italian immigrant who started a business installing submeters in parks. In 1983, Mike founded Star Management, which now manages more than 4,800 spaces in 30-plus properties. Mike is a recognized expert in community operations, facilities maintenance, infrastructure replacement and resident relations.
Born in a small community in rural Kentucky, the identical twin brothers were the first members of their family to graduate from high school. After serving in the military they found themselves looking to the future when someone suggested they sell factory-built homes. After establishing a successful sales center nearly 55 years ago, the brothers began operating communities in Indiana as well. Harrel has passed. However, his brother carries on the operations of multiple communities with more than 800 homesites and nearly full capacity. The following and third generation of Cohrons are now involved in the business. Other Notable Honor: Sagamore of the Wabash Award from the Governor of Indiana “ Throughout the past three and a half decades, I’ve often found myself traveling to the east side of Indianapolis for business advice from the brothers Cohron; camaraderie at their annual Christmas Party ‘for everyone’ and simply to talk shop about manufactured housing and the land-lease-lifestyle.” – George Allen, industry leader and land-lease community owner/operator
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DARREL COHRON
Darrel and Harrel Cohron, Indianapolis, Ind. Cohron Homes and Communities, 1968 to present MH Dealer and Community Owner Nominator: Gary “Mac” McClanahan
HARREL COHRON
“ Mike has been an institution in the MH/RV world in California and Nevada for years, and now after 40 years, he dedicates a huge amounts of time to educate a new generation of MH/RV leaders with Pacific Current Partners.” – Joe Stegmayer, president/CEO of Cavco Industries
MICHAEL CIRILLO
Other Notable Honor: Busch, Carr & McAdoo Memorial Award (2009-2010)
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Manufactured Housing Inductees John Evans, Calif.
Plant & National Sales Manager at Elixir Industries, 1984-91 and West Coast Sales Manager at Kinro Inc., 1996-2009 among others MH Supplier Nominator: David Webster, former Chairman/President/CEO for Kinro Inc. As chairman of the MHI Suppliers Division, John Evans was one of the first people who saw the value and need for a national industry public relations campaign, and became a strong advocate and leader for the MHI Image Campaign Task Force. He began in the industry in 1978, when he went to work with Phillips Industry. After a stint with Elixir Industries, he returned to Phillips where he stayed until joining Kinro.
“ I have known John Evans for more than 20 years and have only the highest regard for John in every aspect of life. He displays great personal integrity and honesty. He is a good family man, having been married to his childhood sweetheart for more than 40 years, a dedicated employee and a person willing to volunteer his time to improve the manufactured housing and RV industries.” – Leigh J. Abrams, Director of Drew Industries Inc.
JOHN EVANS
Other Notable Honor: Person of the Year MHI Suppliers Division 2004 & 2009
Gub Mix, Saint George, Utah Served as director for four state associations simultaneously: Idaho, Utah, Nevada & Arizona MH Association Executive Nominator: Ross Kinzler, Wisconsin state executive There are state executives and then there’s Gub Mix. The leadership he displayed of multiple state associations had never been accomplished and likely never will be matched. Gub has been a voice of reason and a constant promoter of the industry, from coordinating and kicking off the inspiring Northwest Pride campaign to launching a national trade show that evolved into the National Congress & Expo in Las Vegas.
“ As an Association Executive, I worked with and benefited from Gub’s counsel for more than 20 years. I can personally attest to his dedication and support of every segment of our industry. Mr. Mix’s service and significant accomplishments for our industry over more than three decades, clearly qualifies him for induction to the Hall of Fame.” – Jess Maxcy, California state executive
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GUB MIX
Other Notable Honor: MHI State Executive of the Year for 1989
HA L L O F FA M E CONTINUED FROM PREVIOUS PAGE
Manufactured Housing Inductees Bill Wilson, Williamstown, Ky.
CEO/President of Cherry Hill Homes 1980-2003 MH Dealer Nominator: Betty Whittaker, Kentucky state executive
One of Bill Wilson’s major goals was to promote a highly positive image of the industry. As a graduate engineer, one who had passed the stringent professional association tests to practice in Kentucky, he put just as much pride and great effort toward ensuring that homes were safe, properly set up and had curb appeal.
BILL WILSON
Other Notable Honor: Induction into Kentucky Manufactured Housing Institute Hall of Fame in 2005
“In an extraordinary move, the MH nominating committee recommended the Cohron twin brothers of Cohron’s Manufactured Homes in Indiana be inducted as one. Harrel is deceased. So the Class of 2018 includes eleven inductees instead of the usual ten,” Searer said. “Congratulations to the 11 new honorees,” he said. “All of them have had or are having outstanding careers and are richly deserving of this high honor.” In addition to the nominations, each potential honoree needs three letters of support from an industry professional. There are separate nominating committees to review and make selections. In 2018, the 11 inductees were selected from 23 nominations for the manufactured home side and 35 from the RV industry.
“ Being a past president of the Kentucky Manufactured Homes Institute, Mr. Wilson has led us with integrity, heart and honor. His knowledge and expertise have changed the way we do many things in this business, from sales to setup.” – Morris Hylton, Hylton Sales; Ivel, Ky.
“We took about four or five hours each studying the nominations and making notes, and then the committees meet and keep paring it down to five for each industry,” Searer said.
The Induction Ceremony is a Night with Friends, Colleagues
event is over and the last inductee has had their chance to speak, people are eager to shake their hand and congratulate them. “It’s a very nice dinner,” he said. “It’s catered by the Matterhorn, and they manage to get everyone served within six minutes.”
Make Reservations While It is anticipated about 400 people Seats Remain
will attend the induction ceremony and dinner, including many of the past inductees. Inductees and guests attend free of charge. Other attendees can purchase a $150 ticket for the cocktail hour, dinner with beef filet and salmon, wine and the induction ceremony. “We ask that all of the inductees be there at 5 o’clock and we take our class photos up on the grand staircase,” Searer said. “When the
The RV/MH Heritage Foundation will formally recognize the distinguished careers and lifetime achievements of the industries’ most notable individuals at the 20918 Hall of Fame induction ceremony on Aug. 6 at Northern Indiana Event Center in Elkhart, Ind. “We hope to see a large turnout for these honorees,” Searer said. CONTINUED ON NEXT PAGE
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H ALL O F FAME CONTINUED FROM PREVIOUS PAGE
“Attendees also can make a day of it by signing up for the Annual Golf Classic Fundraiser hosted the morning of the dedications by Christiana Creek Country Club in Elkhart. The day’s events kick off with a golf tournament shotgun start at 8 a.m. followed by a luncheon, and finally the ceremonies and dinner.” To make reservations for the induction dinner and/or the golf outing, visit rvmhhalloffame.org or by calling (574) 293-2344. To make reservations by mail or drop in: 2018 Induction Dinner RV/MH Hall of Fame 21565 Executive Parkway Elkhart, IN 46514
What You Can Find at the RV/MH Hall of Fame With the goal to preserve the history and promote the future, the hall honors industry leaders and the products they’ve created. Visitors can tour dozens of classic and in some cases priceless RVs, take a pictorial tour of the manufactured housing industry’s trajectory, and become acquainted with the hall’s honorees. There’s also a small screening theater and a library of the industries. Barry Cole is an RV/MH Hall of Fame honoree with 46 years in the industry. His history in manufactured housing coincides with the history of the hall itself. “I’ve seen our industry when we thought it was never going to fade,” Cole said. “We used to have 66 plants in California, and now we have six. So there are cycles. The industry comes and goes, and now is a good time, but we will stay steady and train new people to carry this thing on. “We have to be proud of what we have and what we do every day.
Hall of Fame Our models on display at the hall are so amazing. When you go, it’s surprising. It’s just something you have to see,” said Cole, who also serves as chairman of the Hall of Fame’s executive committee. “It’s an incredible experience when you get inducted. I’ve experienced this myself, and I have the privilege of making phone calls to let people know that they’ve been inducted. You can hear what it means to them when they get the news. It’s very prestigious.”
Looking Ahead to 2019 Inductions The Hall of Fame also is taking nominations for 2019 inductees through Oct. 31. If a complete nomination form and three properly prepared seconding letters are received by the end of October any year, the nominee will be in the pool of candidates for the following year’s class and for four years beyond submission if they’re not initially selected.
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Selections are announced each January. MHV Patrick Revere is managing editor for the MHInsider magazine, as well as the MHInsider blog and MHVillager, a lifestyle and resources blog for homeowners and residents. He is an award-winning journalist and writer who has written extensively about manufacturing, real estate, management, technology, the building trades and the labor markets.
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I N D US T RY P R OF I L E
Cascade Financial Fills Out Offerings for Manufactured Home Lending By Patrick Revere • Photos courtesy of David Cruz Photography and Zeman Homes
Founders Look to Expand Market Share in Growing Sector of Housing
C
ody Pearce and George Dover families to Gilbert, Ariz., to found “One of the first days in the met in September 1997. Cascade Financial Services. rental house Cody started loading Both men were being hired “Everyone finds it humorous that the dishwasher after dinner,” to work for a small mortgage lender we rented a house together for the Dover said. “It wasn’t organized in Utah, with Cody moving to Boise, first four months while we started at all and it was obvious that he Idaho, to start a retail branch for the the company,” Pearce said. “I suppose was never going to fit everything company, and George joining as the vice looking back it was unusual, but to into the dishwasher. president of operations “I just couldn’t take at the home offices. anymore so I stood up and Wanting to understand the market The tandem spent the I told him to step away, at and the demand for this product, we next two years working in which point I finished the spent an August afternoon out on close contact with George job for him,” he added. ‘The Trail’ speaking with retailers serving as a mentor to Pearce responded Cody, who was newer to with laugh, and recalls to gain perspective on the demand the mortgage business. the look on his business as well as to assess current lending “Over time it became partner’s face. competition in the market. apparent to both of us “He told me in no uncer– Cody Pearce, Cascade Financial Services that with George’s opertain terms to never load ational expertise and my the dishwasher again,” experience in production and sales us it just made sense. We were broke, Pearce recounts. “I knew then and that there was an alliance at hand that living in a new state and we knew there that we could orchestrate the could work really well,” Pearce said. George and I would be working ideal partnership, for our business and Dover and Pearce agreed they around the clock. for the people we serve.” should pursue a business partnership. “So it made perfect sense to share It was only the two years later that the expenses and make the strain for The Hot Housing Market pair exited their respective roles in the hours worked easier on our Utah and moved to Phoenix to launch families,” he said. Arizona at the end of the last an altogether new endeavor. Although the two were friends, they millennia was a booming market Little did they know what an had spent no time in close quarters. in the housing industry. Conditions endeavor it would be. With the move to Arizona, it quickly had fostered a significant amount of Dover and Pearce packed up became apparent just how different entrenched competition. It also was what little they had, shared a they were from each other, and how a time of rising interest rates, and U-Haul and moved their small that could serve to their advantage. CONTINUED ON NEXT PAGE
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Our mission statement is more than a slogan, it’s who we are. It’s what our team members focus on, and we are fortunate to be able to work in such an incredible industry serving deserving consumers. – George Dover, Cascade Financial Services
From left, George Dover and Cody Pearce in Cascade Financial’s Headquarters in Gilbert, Ariz.
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the combination of that and a high level of competition created a difficult environment to get a foothold in the mortgage lending arena.
“As we worked on lead generation methods, we came to the realization that starting Cascade was proving to be much more of a challenge than anticipated,” Dover said. “Fortunately, as reality was setting in, we crossed paths with an industry contact who
mentioned a new loan product that was gaining traction in many of the Sun Belt states.” The product, which was a foreign concept to Dover and Pearce at the time, was a construction to perm loan for new manufactured homes being placed on real estate. Pearce and Dover played with the idea, and kept an open mind about the new concept. “Our initial research was very encouraging when we discovered that, at the time, there were well over 20 manufactured home retailers on Apache Trail in Mesa and Apache Junction,” Pearce said. “Wanting to understand the market and the demand for this product, we spent an August afternoon out on ‘The Trail’ speaking with retailers to gain perspective on the demand as well as to assess current lending competition in the market.”
After visiting three or four retailers, the Cascade tandem changed the conversation. “We had been asking retailers what they needed, and pretty quickly we were entering with a conversation about ‘what we can do for you’,” Pearce said. “Even though we really still had no idea how the product worked, just hearing the demand and desperation that existed for manufactured home loan products in 1999 had a big impact on us.” While lenders were having liquidity issues, Pearce and Dover realized that they had just stumbled onto something big. They just had no idea at the time just how big. Dover put his expertise to work. He occupied himself during the next several days dissecting and analyzing the loan product and creating processCONTINUED ON NEXT PAGE
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es needed to offer the product. Pearce continued to establish relationships with the retailers, and he began taking loan applications. It was more than a new product. It was a new business, and the start of a new era in lending.
cial conglomerates who could assume a loan or loan portfolio -- proved to be a constant issue in those early years. Many of these lenders to whom Cascade sold their loans had elimi-
“I was answering calls it seemed daily from a salesman or general manager of a retail business in some other state,” Pearce said. “They had heard good things from their friends
nated manufactured housing from their offerings. This forced Cascade to continually look for liquidity, which became burdensome when what they wanted to be doing was originating home loans. “It became apparent that we had to take control of our future. We need to have it in our own hands,” Dover said. “And the best way to do that was to become a Ginnie Mae issuer.”
in the industry and wanted to know when we were going to get licensed in their state. The demand for our loan products was there and we realized the incredible opportunity that lay ahead of us if we were to choose to accept it. “For us, there was only one way forward. Growth,” he said. Pearce said the challenge in any expansion effort is the need for service levels to remain a point of pride. Retailers and borrowers had built an expectation of what they would get from Cascade. The team in Gilbert, Ariz. always had been relationship focused. As a lender, Cascade built a “high-touch organization”. Industry partners expected Pearce and Dover to be accessible, and to maintain the small company feel even if they were to grow.
The Birth of Cascade as an MH Lender While that original form of the construction to perm product was relatively short lived, Cascade had primed itself for a new mission. The mantra of “Servicing the American Dream Through Affordable Home Ownership” resonated with Pearce and Dover, and to fully embrace the concept Cascade transitioned its lending platform to nationwide FHA and VA construction to perm loans for manufactured housing. “Our mission statement is more than a slogan, it’s who we are,” Dover said. “It’s what our team members focus on, and we are fortunate to be able to work in such an incredible industry serving deserving consumers.” Ryan Stum, Wayne Bond and George’s brother Gerron Dover joined the Cascade team in 2003. The added talent and leadership served as Cascade’s initial foray beyond the Arizona state line. Bond took over as CFO, alleviating George Dover of many of his primary responsibilities. “That way George could work on continually improving processes,” Pearce said. “Ryan and Gerron moved to Texas and opened up that market for Cascade, which was a tremendous catalyst for growth. The three later became equity partners and have been integral to the overall success of Cascade Financial.” However, there were challenges. The group’s ability to find what are called “take-out lenders” -- large finan-
Enter Ginnie Mae and Untold Market Forces It was 2007, and Cascade had just received its Ginnie issuer number. And just as quickly, the doorstep of the Great Recession appeared. As lenders folded up or exited the MH market, Cascade went ahead with the plan to expand its footprint. It may have been counterintuitive, but for Cascade it worked.
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“This wasn’t and isn’t easy to do, and we certainly have had our share of growing pains, but we never forget how we got here and that our retailers and community partners are the reason,” Pearce said. “So, we are continually working on improving our service level, speed and efficiencies so that manufacturers, retailers and communities can continue to provide much needed affordable housing opportunities to consumers.”
Cascade’s In-house Service Platform Along with the Ginnie approval came the need to create an in house servicing platform. So, of course, Dover built Cascade’s from scratch. He knew that creating a responsive servicing department for borrowers would be critical to their success in maintaining payments and staying in homes. “Our goal is to work for every opportunity for our clients,” Dover said. “Other traditional servicers just weren’t providing this type of high-touch effort, and we felt a responsibility to give our borrowers something better.” Lo a n s e r v i c i n g b e c a m e t h e game-changer Cascade and the industry needed. Immediately, the quality and performance of Cascade portfolios began to improve. “The current servicing leadership team and their group of professionals, in my opinion, is second to none in the lending industry,” Pearce said. “We are confident that our borrowers have the best servicing experience possible.” A good example of this is Cascade’s FHA “compare ratio”, which puts their current government loan performance up against all other FHA loans, including mortgages for site-built homes. Cascade has a 78
percent compare ratio, which means in the room that day long ago were no their FHA loans default at 78 percent longer in business. of the national average. “They went from kind of laughing “This shows that manufactured at us, to taking us very seriously,” home borrowers perform on par, and, Pearce said. in our case, better than other collatEventually, the Mortgage Bankers eral types when serviced correctly,” Association became a great ally and Dover said. resource to Cascade. It has supported The two, early in their careers, MH-positive lending rules and regdecided to work as closely as possible ulations and been instrumental in with regulators and elected officials. placing Cascade in front of regulators This would ensure the longevity of and elected officials. manufactured home financing, which “We get to tell our story and to is a clear benefit for Cascade. But shine a light on the tremendous these types of assertions -- working need for affordable housing finance closely with regulators and elected in America,” Pearce said. officials -- can be more easily said than done. Cody Pearce Industry Service:
How Cascade Financial Gradually Became a National Resource
• AZ Governor’s OMH Board of Directors • Vice Chairman MHI Financial Services Division
• MHI Board of Directors Dover and Pearce recall the early 2000s at a meeting • MHIPAC Committee for the Mortgage Bankers • MHI Investment Committee Association in Washington, D.C. There was an “introduce • MORPAC Committee yourself” type of question • Former Chairman MBA’s State Legislative going around the room. and Regulatory Committee “George was responding to the question, and every • Former Chairman MHIAZ head in the room seemed • Former Member MBA Residential to spin for a closer look at Board of Governors the dumb guys who only financed manufactured homes,” Pearce said. “They couldn’t Shor tly following C ascade’s believe that an entity would do advanced involvement with MBA, that with all of the sub-prime loans Pearce engaged in a similar way and home equity lines that were with the Manufactured Housing being offered at the time.” Institute, the nation’s lone industry George said he felt their industry trade organization, which he said colleagues at the time were unable has been a positive step for Cascade to give Cascade any real credit as and the industry. “real mortgage lenders”. Years later “MHI is the link for lenders and during the mortgage crisis, after all aspects of our industry to work the sub-prime and equity markets together to create positive outcomes turned and spiraled, their peers saw for our consumers. With no secondary Cascade’s growth while many entities CONTINUED ON NEXT PAGE
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market for chattel financing, Cascade has worked closely with its peers to educate regulators, Congress, HUD and the GSEs,” Pearce said. “Cody has really helped our industry tremendously in bringing his mortgage background and lending experience to manufactured housing,” Kevin Clayton, CEO of Clayton Homes, said during a presentation at the manufactured housing conference in Arizona. “His work in Washington and with individual customers nationwide is making a difference.”
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Centerbridge Partners, a private equity firm with a robust understanding and background in manufactured housing, approached Cascade in 2015 with the idea of providing capital to expand Cascade’s current lending platform to include chattel and non-government loans. The timing, once again, seemed fortuitous. In August 2016, Cascade was acquired by Centerbridge and immediately built chattel financing options for retailers and manufactured housing communities across the country. By the end of 2018, Cascade projects being licensed in all 50 states for originating and Servicing their entire offering of loan products. With nationwide shipments on the rise, MH becoming more and more mainstream as a viable option for much needed affordable housing in the U.S., and with the encouraging push into MH financing by government-backed corporations, Cascade’s outlook continues to be as bright as the desert sun. “We have done a lot to get here, we are proud of that, but we have so much more than we need to accomplish,” Pearce said. “With a great partner in Centerbridge our path forward is clear. “Over the years, despite ups and downs, we have not had to reduce the size of our team due to lack of volume,” he said. “This is something we are very proud of, and our team members know that we are going to do everything possible to continue this pattern. We are loyal to our team and they are loyal to our customers. This is why we continue to set the pace for service in the industry.” MHV Patrick Revere is managing editor for the MHInsider magazine, as well as the MHInsider blog and MHVillager, a lifestyle and resources blog for homeowners and residents. He is an award-winning journalist and writer who has written extensively about manufacturing, real estate, management, technology, the building trades and the labor markets.
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B UI L D E R / R E TA I L E R
Kevin Clayton Reveals His Intentions for The Home of the Future By Patrick Revere • Photos courtesy of Clayton Homes
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evin Clayton is a man on a mission. The factory-built home empire his father Jim Clayton built from the mid-’60s is in a unique position today. It’s been 15 years since Warren Buffett rolled Clayton into the Berkshire Hathaway portfolio. “It’s been better than I expected,” Clayton said of the Berkshire Hathaway relationship. “It’s not just a matter of access to capital. “I can call Warren any time, and he will pick up,” Clayton said. “I say ‘Do you have a moment?’ and he will say ‘I have as long as you need’.” Clayton commends Buffett for going on national news to defend the industry, for pointing to its value as the only form of unsubsidized affordable housing. His influence has done as much for the industry as anything in validating the place factory built housing holds.
TON
KEVIN CLAY
$400,000. Home ownership is at its lowest in 50 years. And retiring Baby Boomers and upcoming millennials need the right place to live. These factors along with the industry initiative to get financing, zoning, and appraisals on par with site built put the manufactured housing industry in an opportunistic position. But Kevin Clayton won’t concern himself with greater share, not when the company already owns better than 46 percent of the market. It’s the bigger picture that matters. So, Kevin Clayton is a man on a mission for his industry. For his industry, and his parents. He points to the idea of factory-built homes that have all the characteristics, look and feel, of traditional site-built homes, able to be placed seamlessly in residential neighborhoods along their site-built counterparts. “This is what my dad and I have dreamed about for our entire careers,” Clayton said backstage at the annual Berkshire Hathaway Investor Meeting What is at Stake for in Omaha May 5. “This is the legacy we want to leave on the industry. And Kevin Clayton and I predict a year from now, we will be the MH industry? able to point to the neighborhoods Median price for tra- where this is happening. And there’s ditional site-built homes no reason it shouldn’t happen.” is steadily approaching
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“The cool thing is there’s a merging of building on site and building in a factory. All builders are looking to our industry for answers,” he said.
What Media Means to Kevin Clayton and His Company Clayton very recently launched a media campaign bent on waking potential customers to the idea of factory-built homes. The initial TV commercial espousing the question “Who’s laughing now?” has garnered 37 million views. They’ve shared the idea of “Have it Made”, and the edgy “Prefabulous”, “Sustainabling” and “Affordabliss” monikers to their target markets. “It’s elevating our industry in a big way,” Clayton said. “We were on national football, and we’re getting ready to run in the next few months all the way through Thanksgiving again,” he said. “This time it will be national football but also really targeted at the buyer-decision maker in the household, who many times is the woman of the house.” The design of the campaign was to elevate all builders, home centers, community owners and homeowners.
The drive is to increase the percent that manufactured housing represents in all new housing starts. The industry always has held eight to 10 percent of the new home market.
Angling for the Sentiments of New Home Customers These industry initiatives are improving the perception of manufactured housing and causing Clayton to upgrade all 40 of its home building
The stars are aligning for this industry on a number of fronts right now, and it’s why the GSEs and so many others are really listening to us and want to be part of the solution to solving the low homeownership rate in our country. – Kevin –Clayton Kevin Clayton facilities. Kevin is encouraging other industry pros to do the same which in turns improves the team member
We know that what the millennial buyer is going to do is share that experience socially, posting pictures and comments, which is great for us and the industry. – Kevin Clayton experience resulting in a better customer experience. All this is part of elevating the industry. “That ties into what our big aspirational goals are, opening doors to a better life,” Clayton said. “We really do want to make homes more affordable and more available for everyone. “There absolutely is an affordable housing crisis out there,” he said. “The stars are aligning for this industry on a number of fronts right now, and it’s why the GSEs and so many others are really listening to us and want to be part of the solution to solving the low homeownership rate in our country. With rising interest rates and land prices, site-built housing is not in a position to help like manufactured housing.”
How Clayton Can Attract the Emerging Buyer For the first time in years, Clayton opted to skip bringing a new model home to the annual shareholders meeting. Rather, they’re pitching their new technologies that help put a potential buyer in a house. The Home Touch™ touchscreen technology CONTINUED ON NEXT PAGE
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being introduced to retail locations this summer, allows shoppers to have a virtual experience, swap out floor plans, and view photos of other home features. The new technologies connect potential customers to their dream home in a real way much earlier in the home buying process than we’ve seen from this or any other sector.
“I’d like to see our industry stay focused on this New Class of MH which includes the exterior features that the GSE’s, appraisals, and zoning officials want to see. We need to be disciplined and innovative to make these features affordable so MH can be treated on par with other forms of housing. That home with the price tag on it right at the front of the home center facing the highway without any discrimination in how it is financed or appraised will draw a whole new buyer in addition to the important customers we serve today.” – Kevin Clayton, CEO of Clayton Homes
New Buyers Have Different Needs and New Expectations Millennials, clearly, are a major focus for Clayton and the industry. “The good news is they’re getting older and having children,” Clayton said of the younger buyers. “They don’t have the same bias against the
industry older buyers might have. They are starting to buy homes. And they will buy in a big way, but they don’t want to buy in the same way.” Millennial homebuyers and many others will gravitate to the My Clayton Built Home app, which is currently in development. When released, it will follow those buyers through their path to ownership of that home. The app assists the buyer no matter where they buy or what they buy. It provides updates on the home, maintenance and planning. Even before the home is placed, the app will tell the customer where their actual home is on the line, in photo-
graphs and otherwise to convey how construction is coming together, the processes and materials being used. “And here’s the thing,” Clayton added. “We know that what the millennial buyer is going to do is share that experience socially, posting pictures and comments, which is great for us and the industry.” MHV Patrick Revere is a content marketing specialist for MHVillage and managing editor for its blogs MHInsider for professionals and MHVillager for consumers. MHInsider also issues a quarterly print magazine of the same name. Patrick’s background is in print news, language and communication.
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Legacy TIPS & ADVICE
Preserving Your Personal and Corporate Legacy By George Allen CPM Emeritus, MHM Master • Photos courtesy of Zeman Homes
Editor's Note: Portions of this story debuted in the July 2017 issue of the Allen Letter professional journal. There titled, “So Far, Sorry to Say, It’s Been a Man’s World!” Here, author George Allen adds to the original message, and includes “howto” assistance for penning memoirs that later can be collected and published as an autobiography. If you’re interested in a deeper look at manufactured housing industry publications, see George Allen’s digital companion piece to this article at the MHInsider™ blog at: https://www.mhvillage.com/pro/write-your-memoirs-and-preserve-industry-knowledge/
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During a 40-year career in factorybuilt housing, I’ve met, talked or worked with all but one of the autobiography authors described in the following paragraphs. To a man, they are, or were, free enterprise entrepreneurs, starting and growing their firms from scratch. And today, decades later, all but one of the firms they founded, continue to operate in manufactured housing and land-lease community environs.
Fame Inductee. His firm, Fleetwood Enterprises, is today owned by Cavco Industries, Inc. “The Wheel & I” is possibly available from a book repository in California. It’s also in the library at RV/MH Hall of Fame.
The Authors and Titles of Their Autobiographies Kristian Jensen, Sr., authored “A Danish American”. The late Mr. Jensen, a Danish immigrant, was a 1972 RV/MH Hall of Fame Inductee. The third generation of his family continues managing their land lease community portfolio from offices in Connecticut. Unfortunately, the book is long out of print, but is archived in the library at the RV/MH Hall of Fame in Elkhart, Ind. John Crean, with Jim Washburn, co-authored “The Wheel & I”. The late Mr. Crean was a 1985 RV/MH Hall of
James Clayton, with Bill Retherford & Amy Nolan, co-authored “First a Dream”. Jim is a 1992 RV/MH Hall of Fame Inductee. His firm, Clayton Homes, while now owned by Berkshire Hathaway, is led by his son Kevin Clayton, from the firm’s offices
in Tennessee. “First a Dream” is in its second edition, and is available for purchase from the RV/MH Hall of Fame. Those details to follow. “The Life and Times of B.M. Vukovich” is a family-produced photo-autobiography, chronicling the adventures and business career of the late Borislav (‘Boro’) Vukovich. Like Kris Jensen, Boris was an immigrant to the U.S. He achieved The American Dream, by owning land lease communities, under the name of Colorado Real Estate Investment Comp a n y ( ‘C R E I C O’ ) , t o d a y Ascencia. His adult children and grandchildren continue his legacy. A limited quantity of the four page picto-autobiography is available by phoning (317) 346-7156. Harrel & Darrel Cohron, with Matt Cohron, co-authored “The Trailer Twins”. Darrel, and his late twin brother Harrel Cohron are members of the RV/MH Hall of Fame Class of 2018. There progeny continues the family businesses in Indianapolis, Ind. Their memoir is available for purchase from the RV/MH Hall of Fame. CONTINUED ON NEXT PAGE
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Mike Conlon’s “Unconventional Wealth” is part #1 of his life story. It will be interesting to, someday, read part # 2. Mike’s firm, Affordable Communities Group operates out of North Carolina. Copies of “Unconventional Wealth” are available via Amazon. com and for purchase from the RV/ MH Hall of Fame. George N. Goldman, “The Road Less Traveled”. The late George Goldman was a well-known businessman throughout the Midwest during the 1970s thru the 1990s. His son David carries on his family’s interest in RV/ MH industries, as an RV park owner. Alvan L. Schrader’s “No Respect At All...A PATH TO MILLION$”, continues to be ‘required reading’ for anyone aspiring to become a selfmade, successful businessperson in manufactured housing and land lease communities! Al is a 2004 inductee into the RV/MH Hall of Fame, and continues to be active in his family’s manufactured housing and self-storage businesses throughout Minnesota. The title is available for purchase from the RV/ MH Hall of Fame and PMN Publishing via (317) 346-7156. George Allen’s “SWAN SONG”, is semi-autobiographical, documenting the history of land-lease communities, and the author’s business experiences within same from 1970 to present day. George is a 2011 inductee into the RV/ MH Hall of Fame. The book, in its second edition, also the first official record of manufactured housing annual shipment volumes from 1955 to present day, and is available for purchase from the RV/MH Hall of Fame & PMN Publishing. Samuel Zell, of Equity Lifestyle Communities, Inc. (a.k.a. ELS, Inc., a REIT) lays claim to authoring the most CONTINUED ON NEXT PAGE
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recently published autobiography, is called “Am I Being Too Subtle?” This also is the only one of ten manufactured housing-related autobiographies printed, bound, and distributed by a traditional publisher, Penguin Random House (2017). Zell’s book is available for purchase via Amazon.com
Just sit down and write or type what comes to mind. Then wait 24 hours before reading it. Only then make adjustments. 2. Be Patient: This life and career-spanning memory recall, and writing challenge/exercise, must be broken into manageable parts,
From left, RV/MH Hall of Fame President Darryl Searer, MH Consultant and Organizer George Allen and Newport Pacific CEO Mike Sullivan gather in their inductee green jackets during the 2017 International Networking Roundtable in Indianapolis.
Besides learning about these manufactured housing and community pioneers and leaders, in the following profiles, it’s my hope that industry professionals will be motivated to do the same - if you have a life, career, or business story to tell, pen your memoirs. And, eventually, an autobiography can come of it.
Some Writing Advice to Help with Your Memoirs or Autobiography Here are some writing basics to motivate and assist you in preparing to pen memoirs, maybe even your autobiography, when enough short stories have been accumulated. 1. Set Goals: “I’m going to do this!” Make a list of personal and or corporate short stories to pen into memoirs. Then, commit to and write one or two memoirs, from this list each month.
chronologically and or by topic. Sort and organize memoirs later, as the bigger picture of one’s life, career, or business story begins to emerge and gel. 3. Edit With a Passion: If not qualified to do so, hire or enlist a trusted, capable, experienced, motivated (preferably non-family) individual to do this for and or with you. Both of you learning and using basic proofreader’s marks makes this process easier and more productive. 4. Decide When Enough is Enough: Do the memoirs cover the desired, limited or broad scope of personal and or corporate life for now - or forever? Only you can decide. A memoir is a portion of one’s life, and or business experience, or much more. The comprehensive story is the autobiography. 5. Seek Assistance With Prepress Matters: Identify and interview more than one printer/binder, for price,
product and service comparisons. Ensure they’re experienced with basics and nuances of the publishing process. Become familiar with front and back material requirements to legitimize your finished product.
Best References to Help You Along the Way? • Dan Poynter’s “Self-publishing Manual”. I purchase a copy of the latest paperback edition every time I prepare to author a new book. It’s very helpful with front and back material. • John Kremmer’s “1001 Ways to Market Your Book”. When self publishing, you’ll have to either sell your title or give it away; no one else is going to do this task for you! Now you have all the tools needed to get started. Read other people’s stories, start penning memoirs, and share your story with the world. MHV George Allen is Administrator of COBA7, a division of GFA Management, Inc., db a PMN Publishing. George owned & fee-managed land lease communities since 1978. He’s authored all the “books in print” relative to manufactured housing and its unique realty asset class. Honored by MHI as Industry Person of the Year, George is also a member of the prestigious RV/MH Hall of Fame. Furthermore, he’s been designated a Certified Property Manager - Emeritus, and Manufactured Housing Manger - Master. Finally, George is a retired lieutenant colonel of U.S. Marines, having served a combat tour in the Republic of Vietnam, with active duty service during Operation Desert Storm. George & Carolyn have two adult children, six grandchildren and two great grandchildren. Contact him at (317) 346-7156 and gfa7156@aol.com.
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AD V OC AC Y
National Advocate MHI Secures Key Wins for Manufactured Housing Across Multiple Fronts By Dr. Lesli Gooch
A
s the national advocate for the manufactured housing industry, the Manufactured Housing Institute (MHI) is working to ensure federal rules and regulations support the industry’s efforts to offer quality homes at affordable prices. Even as those who wield power in Washington shifts with each election, and the methods for effective advocacy evolve with new technology, MHI works to ensure the industry continues to have an effective, consistent and unified voice. MHI has been aggressively advocating in Washington to accomplish the association’s 2018 priorities and elevate the importance of manufactured housing as a source of affordable housing. These priorities include improving the supply of manufactured housing financing and ensuring HUD Code regulations encourage innovation and are cost effective.
During the past few months, MHI MHI is grateful to the sponsors of has achieved success in each of the manufactured housing provision these critical areas. in S. 2155, Sen. Joe Donnelly (D-IN) and Rep. Andy Barr (R-KY), for Improving the Supply of Manu- their persistent efforts to make this important change a reality. factured Housing Financing When the bill was signed, Sen. President Signs Bill Giving Relief Donnelly said, “Manufactured housing from the Dodd-Frank Act serves as a vital source of affordable On May 24, President Trump housing for millions of hard-working signed into law S. 2155, the “Eco- Americans, particularly in rural and nomic Growth, Regulatory Relief, underserved communities. I’m pleased and Consumer Protection Act.” S. the President signed into law my 2155 includes a provision clarifying bipartisan regulatory relief package, that manufactured housing retailers which includes a provision based on or sellers are not inappropriately my Preserving Access to Manufacconsidered a mortgage “loan origina- tured Housing Act. This provision tor” simply because they provide a provides a common-sense exemption customer with some assistance in the for manufactured home retailers to mortgage loan process. ensure consumers can receive general S. 2155 passed the U.S. House and financing information.” Senate with bipartisan support – 258 to 159 in the House and 67 to CONTINUED ON NEXT PAGE 31 in the Senate.
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Barr lauded the bill’s passage by saying, “Dodd-Frank’s one-size-fits-all ‘loan originator’ definition failed to account for the unique nature of the manufactured housing market. The result: hard-working, low and moderate-income Americans have lost access to affordable manufactured housing. The Preserving Access to Manufactured Housing Act, included in S. 2155, fixes this problem and enables more Americans to achieve the American Dream of homeownership.” S. 2155 becoming law is a result of MHI’s ongoing and effective advocacy to ensure manufactured housing retailers and sellers are protected from liability under federal consumer protection mortgage rules for the loan portion of a consumer transaction. MHI has continually argued that if a retailer or seller does not receive compensation or gain related to the loan, they should not be considered
a loan originator simply because they help borrowers identify potential lenders or provide minimal assistance during the loan process. MHI’s government affairs team worked closely with both Senate and House leadership and congressional champions of manufactured housing to secure passage of this important provision. The grassroots outreach from MHI members and state executive directors – totaling more than 20,000 calls and emails – was instrumental in helping members of Congress understand the importance of this provision to their constituents. MHI and its members succeeded over the last few years in getting a similar provision included in several previous House-passed bills (H.R. 1699, H.R. 10, H.R. 650, H.R. 1779 and FY 2017 and 2018 appropriations bill), as well as in freestanding Senate manufactured housing bills (S. 1751 and S. 682).
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Members of Congress Ask the CFPB to Revisit Regulations for Manufactured Housing A vital component of MHI’s comprehensive strategy to ease the regulations that limit access to credit for manufactured housing includes highlighting these financing challenges on Capitol Hill and with federal regulators. In April, the Consumer Financial Protection Bureau’s (CFPB) Acting Director Mick Mulvaney testified before the U.S. Senate Banking and House Financial Services Committees where Members of Congress asked him to look at the harm that has been caused by the Agency’s regulations for manufactured housing loans. These exchanges during the Committee hearings came as a direct result of MHI’s outreach to members
NCC Fall Leadership Forum November 7-9, 2018
The Westin Michigan Avenue Chicago, IL
Manufactured Housing Institute 1655 Fort Myer Drive, Suite 200 Arlington, VA 22209 (703) 558-0400 www.ManufacturedHousing.org
SAVE THE DATE
Registration opening late summer.
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of Congress prior to the hearings about the negative impact of CFPB regulations. Among the Members of Congress who discussed the negative impact of CFPB regulations on the availability of financing for manufactured homes were Sen. Thom Tillis (R-NC) and Rep. Andy Barr (R-KY), Bruce Poliquin (R-ME), and Stephen Pearce (R-NM). Senator Tillis talked about living in a manufactured home with his father in the 1970s and ’80s and lamented that the financing they received then would not be available today. He argued that “the real victims we don’t talk about with all this regulatory overreach are the people who aren’t getting loans.” He said, “let’s talk about the untold victims that because of the regulatory overreach aren’t getting loans, aren’t getting mobile home mortgages, and aren’t able to pay their bills.” Acting Director Mulvaney agreed with Sen. Tillis’ remarks, pointing out that he and the Senator were “probably the only two people in this room who have lived in a manufactured home and there is a consequence to all this over-regulation, which is that people do not have access to credit.” MHI will continue its work to enact legislative and regulatory measures to ensure financing availability for consumers seeking to purchase manufactured housing. MHI’s goal is to ensure Congress and the CFPB make needed legislative and regulatory changes so that more financing options are available for those seeking to purchase manufactured homes.
Ensuring HUD Code Regulations Encourage Innovation and are Cost Effective MHI’s Candidate for Federal Housing Commissioner Confirmed by the Senate On May 24, the Senate approved, by a bipartisan vote of 74 to 23, the nomination of the Honorable Brian Montgomery to be the U.S. Department of Housing and Urban Development’s (HUD) Assistant Secretary for the Department of Housing and Federal Housing Administration (FHA) Commissioner. Since his nomination in September 2017, MHI repeatedly urged the Senate to confirm him. Joining with other housing associations and groups, MHI sent numerous letters of support and worked with the White House and Senate leaders to secure his confirmation. As FHA commissioner, Montgomery will oversee the federal Manufactured Housing Programs. Having previously served as the FHA Commissioner under 58 | MHINSIDER™ • AUGUST 2018 • MHINSIDER.COM
President George W. Bush from 2005 to 2009, Montgomery historically has demonstrated understanding of the importance and benefits of manufactured housing. In 2017, he reiterated his commitment to manufactured housing during his confirmation hearing before the Senate Banking Committee. Mr. Montgomery testified, “We need to make sure FHA’s manufactured housing rules undergo a rigorous cost-benefit analysis to ensure we are balancing important product safety considerations with affordability and access. If confirmed, you have my commitment this will be a priority.” HUD Reaffirms its Commitment to Manufactured Housing A top priority of MHI has been creating a more cooperative regulatory environment at HUD for manufactured housing. Through ongoing outreach with the White House, HUD and Congress, MHI has argued that the regulatory climate for manufactured housing at HUD needs to change. At MHI’s 2018 Congress & Expo in Las Vegas, HUD Sec. Ben Carson acknowledged these efforts by MHI and reaffirmed his commitment to reforming the Department’s CONTINUED ON NEXT PAGE
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manufactured housing program stating, “Your leadership and fellow members have let us know where improvement can be made and what issues need to be addressed…let me just say that as the Secretary of HUD, I hear you.” These remarks follow similar statements that Carson made in March before the U.S. Senate Banking and House Appropriations Committees acknowledging that manufactured housing is an important source of affordable housing for millions of Americans and that HUD’s approach to the regulation of manufactured housing should change. He discussed the quality of today’s manufactured homes, calling them “amazing” and referring to the current regulations as “ridiculous”. Secretary Carson explained that “the reason [manufactured housing] hasn’t expanded to the degree it can is because of that dense regulatory forest that people have to go through in order to [build] it.” He also went on to discuss the Department’s current regulatory review of all manufactured housing rules, which he said is being done with “an aim toward reducing undue burdens on production”. MHI will continue to work with Congress and the Administration’s key housing leaders to achieve a more cooperative regulatory environment and to ensure that HUD regulations and policies for manufactured housing do not unnecessarily burden the production or affordability of this important form of housing.
Looking Ahead Building on these successes, MHI will continue its aggressive advocacy to ensure Washington policymakers understand that a robust manufacturing housing market is critical. By engaging with federal agencies and Congress, MHI will seek to expand the supply of manufactured housing by improving the supply of financing for manufactured homes and creating a regulatory environment that fosters innovation that enables the industry to deliver quality affordable homes. MHV Dr. Lesli Gooch is the executive vice president of government affairs and chief lobbyist of the Manufactured Housing Institute in Arlington, Va. MHI is the only national trade organization representing all segments of the factory-built housing industries. MHI members include home builders, lenders, home retailers, community owners and managers, suppliers and more than 50-affiliated state organizations.
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Skyline Champion Skyline Champion Corporation Becomes Nation’s Largest Public Factory Home Builder By Patrick Revere • Photos courtesy of Skyline Champion Corporation
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kyline Corporation and Champion Enterprises Holdings, LLC, the parent company of Champion Home Builders, announced the closing of their previous operation to form Skyline Champion Corporation. The combined company will operate as Skyline Champion Corporation and its common stock will trade on the New York Stock Exchange under the ticker symbol “SKY”. The ticker symbol is the same symbol under which Skyline previously traded. Company headquarters will remain in Elkhart, Ind., where Skyline is based, with continued operation from Troy, Mich., where Champion has had central operations. The new company’s combined market share reaches 18 percent, with combined annual net sales exceeding $1.3 billion. Skyline C hampion gains an advantageous platform to support the production of manufactured and modular homes, park-model
RVs and modular buildings for the “There is a tremendous opportumulti-family, hospitality, senior and nity for Skyline Champion to take workforce housing sectors. advantage of the attractive market “We are very excited to close the dynamics in the industry given our transaction and look forward to broader geographic footprint across operating as Skyline Champion Cor- North America and our enhanced poration,” said Keith Anderson, Skyline product offering,” Anderson said. Champion’s chief executive officer. Skyline Champion is now the largest “Skyline Chamindependent publicly traded factory-built pion is now the housing company in the United States largest independent with combined revenue of more than $1.3 publicly traded facbillion. The increased size and scale, coupled tory-built housing with a strong balance sheet and significant company in the cash flow generation capability, has us United States with combined revenue well positioned to execute our long of more than term growth strategy. $1.3 billion. The – Keith Anderson, Skyline Champion Corporation increased size and scale, coupled with a strong balance sheet and significant “We will remain committed to cash flow generation capability, has providing quality products and us well positioned to execute our long outstanding customer service as we term growth strategy. CONTINUED ON NEXT PAGE
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focus on executing our strategy on our newly enhanced platform.”
What the Formation of Skyline Champion Corporation Will Do Anderson said the new organization anticipates taking advantage of efficiencies that result from the merger, to the tune of about $10 to $15 million. These efficiencies primarily are driven by direct cost savings, reduced overhead costs and operational improvement opportunities. The company also will target synergies through cross-selling and distribution optimization through the combined company’s owned and independent dealer network. “The complementary cultures and shared values of our legacy businesses are evident in the deep commitment to providing solutions to customers and
delivering a broad range of quality products and value-added services,” Anderson said. “I am confident that this will translate into future success of Skyline Champion.” In conjunction with the closing of the transaction, Skyline issued approximately 47.8 million shares to
Champion, representing 84.5 percent of the common stock of the combined company on a fully-diluted basis. Also, Skyline paid a special cash dividend on May 31 of $0.62381 per
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share on the company’s common stock to Skyline’s shareholders of record at the close of business on May 25, 2018. Jefferies LLC served as financial advisor to Skyline. Barnes & Thornburg LLP acted as Skyline’s legal counsel. Ice Miller LLP acted as legal counsel to Skyline’s Special Committee of the Board. RBC Capital Markets, LLC served as financial advisor to Champion, and Ropes & Gray LLP acted as Champion’s legal counsel. Taft Stettinius & Hollister LLP acted as Indiana legal counsel to Champion. MHV Patrick Revere is a content marketing specialist for MHVillage and managing editor for its blogs MHInsider for professionals and MHVillager for consumers. MHInsider also issues a quarterly print magazine of the same name. Patrick’s background is in print news, language and communication.
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3 Things to Consider When You’re Ready to Sell Your Community By Kevan Enger • Photos courtesy of Equity LifeStyle Properties, Inc. and Zeman Homes
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here has never been a better time to sell a mobile or manufactured home park than right now. The need for affordable housing is at an all-time high as baby boomers retire in record numbers, home prices hit historic highs, and fewer affordable housing units are being supplied to the market for either the lowincome or 55+ segments. In addition, interest rates remain low, at least for the time being, and recent publicity about the opportunity mobile home parks provide -- and the need they fill -- has prompted increased demand across the country, and investors are taking notice. While the demand for manufactured home properties as investments is rapidly growing, the supply is not. The inventory of available manufactured home parks is low and decreasing. The barriers for new entrants are high, and the path to approval and profitability for new developments can be long and difficult. This high demand versus the supply/inventory dynamic is driving prices for mobile home communities higher than ever with record prices being achieved across the spectrum.
It’s a Seller’s Market.
3. Mitigate your taxes Let’s take a closer look at these If you’ve been thinking about three areas and how they can impact selling, now is the time your bottom line. Whether you’re ready to retire or simply interested in moving into an- How to Get the Best Price other property class, there has never been a better time to sell your mobile While all sellers want the best home park than now. market price, not all will get the best Regardless of the optimum market available market-driven price. Make conditions, there are other factors sure you do by selling your property every seller should consider. through a seller-focused broker, also As a seller-focused broker, the three known as a seller’s representative questions I get asked most are: or listing agent. • How do I know how much my As I mentioned earlier, I am a property is worth? seller-focused broker, but I am not • How do I get the highest sales making the recommendation for my price for my property? benefit. There are several reasons to • How do I reduce my tax liability? work with a seller-focused broker, all It’s important to note that a seller’s of which can have a significant impact market provides owners the opportu- on your bottom line. nity to get a great price, but it doesn’t Leverage: There are buyer-focused guarantee it. brokers and seller-focused brokers. A To leverage that opportunity and buyer-focused broker, also known as a maximize your property’s sales price buyer’s agent or representative, does and proceeds, there are three things as their title implies. They represent you must do: the buyers and their interests first, not 1. Increase the number of prospects the seller’s interests. Their primary and competition for your property objective is to get their buyers the 2. Know how much your park is worth and how much to ask CONTINUED ON NEXT PAGE MHINSIDER.COM • AUGUST 2018 • MHINSIDER™ |
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lowest possible price for the property at terms that are most beneficial to them. This is great for the buyer but not the seller. The result: Your property sells for less than it should. A buyer’s agent also wants to market your property exclusively to their buyers so they can maximize their commission in what is called an
bounce around for 6 to 12 months while the comings and goings of potential buyers disturb and unsettle the tenant base, and as buyer’s agents try to make the deal work with their limited portfolio of prospects.
It’s a Seller’s Market, So Don’t Give Up Your Leverage!
The Affordable Housing Shortage Without federal rental assistance, not one county in the United States has enough affordable housing to meet market needs. According to Urban.org, the market only provides 21 adequate, affordable, and available (AAA) units for every 100 renter households with income at or below 30 percent of the area median income (often called extremely low-income, or ELI, renters). Federal assistance adds another 25 AAA units, making a total of 46 adequate and affordable units available to those households.
off-market deal. Because off-market deals are offered only to a closed and small pool of potential buyers, competition for your property will be minimized. They are essentially taking your property off the current seller’s market. In addition to being at a disadvantage by working with an agent whose primary goal is to get the buyer the best deal, off-market deals keep the price of your property artificially low, typically extend the length of time it takes to sell your property, and puts you at a disadvantage at the negotiating table. We’ve seen deals
Your Advantage: The competitive environment is prompting buyers to approach owners/sellers directly. They are doing this for two reasons: To avoid paying full price for your property and to put themselves at an advantage. While it may seem that negotiating directly with a potential buyer allows you greater control, it puts the unrepresented seller in an unbeneficial position by: • Reducing or eliminating competition for your property • Putting the burden of estab lishing the value and setting the price for the property on you • Taking time and money to draft the sales and other documents • Having to directly negotiate the deal without the market data and expertise that will support your obtaining the best price for the property • Ensuring you are protected on the path to closing Your Interests: A seller-focused broker, also known as a seller’s agent or representative, puts the seller’s interest first. They will: • Broadly yet discreetly market your mobile home park to all relevant buyers (This is particularly important since the best buyers often come from outside the market/region.) • Create a competitive environment for your property
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• Conduct a proper value analysis on your property to set the right price • Shorten the time it takes to close on your deal • Have market comps and data available to support your property’s sales price • Increase the number of qualified offers you receive • Provide guidance and ensure you are properly and beneficially represented from beginning to end • Get the best price and terms for you, the seller
How to Find Out How Much Your Park Is Worth Knowing how much your mobile home park is worth today, including its intrinsic and market value, and how much to ask, is essential. The analysis is extensive and has to be backed by market data and property variables such as: • Size of the property • Location • Occupancy rate • Cash flow • NOI • Private vs public utility connectivity • Park-owned homes vs lot rentals • Amenities • Financing availability • Market conditions • Available on-market inventory of similar properties • The price/value of other comparable properties that sold in your market • The asking price of other on market properties The best way to arrive at the proper price is through a market analysis. CONTINUED ON PAGE 66
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A market analysis includes all of the considerations listed above to arrive at a market-driven price, while many appraisals can place more weight on the intrinsic value of a property. The difference is akin to looking backward through the rear-view mirror with a property appraisal versus looking forward through the windshield with a market analysis.
Look for a seller-focused broker that will provide you with a no-obligation market analysis that shows you the cap rates of other properties that have sold in your market, as well as the potential cap rates for your property. The desired cap rate dictates the purchase price and is one way to measure the efficiency of your sale. To find the cap rate, divide your property’s NOI by the Sales Price. To find your Sales Price, divide your NOI by the desired cap rate. For sellers, the lower the cap rate, the higher your return because it means the sales price was higher.
Cap Rate = NOI/Sales Price A ½ point difference in the cap rate can mean millions of dollars less or more in your pocket
How to Mitigate Your Taxes Now that you’ve optimized your price and capital gains, mitigating your tax liability after the sale can and will have the most significant impact on your pocket. 1031 Exchanges: One of the most common ways owners reduce their tax liability is by using the provision in the Internal Revenue C o de (IRC) Sec tion 1031, which allows you to postpone paying tax on the gain if you reinvest the proceeds in a similar property as part of a qualifying like-kind exchange. This is commonly called a 1031 Exchange. Many retiring owners, or those who wish to take on investments with less intensive management and responsibilities, opt for triple-net (NNN properties) for their exchange. In triple-net properties, the tenant is responsible for the rent and utilities, and other typical expenses stipulated in a leasing agreement for the property type. The tenant also pays for and manages the property’s real estate taxes, building maintenance and insurance. The arrangement frees the landlord from the typical responsibilities of an actively managed property. In addition to the “passive investment” nature of NNN deals, other benefits include, restarting
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your property depreciation schedules, steady income especially from properties with corporate-backed and/ or established tenants, built-in rental rate increases, and long-term stability. Delaware Statutory Trust: A Delaware Statutory Trust, or DST, is a separate legal entity that allows smaller investors to own high-quality institutional level and professionally-managed commercial properties as individual owners and not partners. In addition, a DST is a passive investment with no active management responsibility for the investor, provides an extra layer of protection through non-recourse debt preference, and offers stability, among other benefits. Be sure to discuss the pros and cons of 1031 Exchanges and DSTs with your tax advisor. Making the decision to sell is not easy, but by aligning yourself with a broker that has your best interests in mind and ensuring you are fully informed on how to value your property, obtain the best price for it, and mitigate your tax liability, you will not only maximize your return for your years of hard work, you also will maximize your peace of mind. MHV Kevan Enger is a partner and manufactured housing director for Capstone MH. He specializes in helping mobile and manufactured home park property owners across the country successfully position, market and sell their properties to maximize returns. Capstone has seven offices in five states through Florida, the Southeast, Midwest and Mid-Atlantic regions. TO ADVERTISE IN THE MHINSIDER™ OR REQUEST A MEDIA KIT, VISIT:
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