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CONTENTS HAPPENINGS 6 Industry Happenings EVENTS 8 Upcoming Industry Events COMMUNITY 12 Why Land Holds Value in Times of Market Disruption 16 Don’t Need a Management Company? SERVICE / SUPPLIER 21 LP Building Solutions Expands Trim, Siding, Soffit Offerings 24 Debt Collection Best Practices for Community Owners 28 MHINSIDER INDUSTRY AWARDS BUILDER / RETAILER 36 Corporate, Industry Leadership During Challenging Times 42 What Port Townsend’s New Housing Amendments Mean for Manufactured Housing
VOLUME 3 • ISSUE 4 JULY / AUGUST 2020 MHInsider.com Publisher Patrick Revere patrick@mhvillage.com
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Contributing Editor George Allen gfa7156@aol.com
Senior Graphic Designer Merit Kathan merit@mhvillage.com
Contributors Steven Blank Jason Burbage Ken Corbin Mark Dollan Ryan Fishman Dr. Lesli Gooch Matt Laird Lindsay Patton-Carson Sharmila Srivastav
Cover Image Photo courtesy of Legacy Housing Corporation 2020 Legacy S-24x48-22FLP 2 Bedroom - 2 Bath - 1016 Sq Feet.
ADVOCACY 50 Uniting to Support the Industry During a Crisis
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TRENDS / INSIGHT 56 Don’t Stop Marketing! You Must be Pro-Active
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60 How to Successfully Work From Home
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PLANNING / DEVELOPMENT 64 Infrastructure Leak Detection Using ‘Water Balancing’ LENDING 68 See the Possibilities: Why Generating Interest in Manufactured Housing is About Showing, Not Telling 74 MH Advantage® FAQ with Fannie Mae THE ALLEN LEGACY 80 Tracing Manufactured Housing & Community History Through the Authors – Part 1: 1955 – 1990
Call: (877) 406-0232 advertise@mhvillage.com
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FROM THE PUBLISHER ACHIEVEMENTS WORTH HONORING INTRODUCING MHINSIDER INDUSTRY AWARDS
O
One of the many reasons we create and publish The MHInsider magazine is because there are so many tremendous stories to tell. When someone asks what I enjoy most about working in manufactured housing, the answer invariably is “the people”. The many talented individuals working in teams and partnership across the country truly make the “American Dream” of homeownership.
The MHInsider Industry Awards are for work well done. The field of candidates was chosen by MHInsider’s newly formed editorial board. The list of more than 60 candidates was brought in, researched, and pared-down by our internal project team. The resulting award nominees list was sent to and voted upon by an independent panel of volunteers from the ranks of regional and state association leadership.
What We Found in Forming The MHInsider Industry Awards
You truly have orchestrated valuable change in our industry, for which we are grateful beyond measure.
Those tales we tell, they come from industry leadership and rank-and-file alike. They come from communities, factories, offices, and the interstates that connect our nation. In imagining how we might further honor the industry, our team opted to create the MHInsider Industry Awards. The series of five awards honor individuals — the people of the industry — who have led, innovated, advocated, influenced, envisioned, and otherwise have created positive change no matter what the tangible product.
Industry recognition, as I’ve learned, is much needed because the quality of work, depth of inspiration, and level of determined leadership spans far and wide in manufactured housing. Our candidate list for The MHInsider Industry Awards represented manufactured housing professionals from more than 20 states, and from all parts of the industry. We formed and will maintain the 15-member editorial board that helped build the list of deserving award candidates. And it was an arduous but eye-opening, and enriching experience to work through the list, fish out further detail on industry accomplishments, and make difficult decisions to land on our shortlist of 16 nominees. Each person we called on — whether to be an editorial board member or a selection panelist — was enthusiastic and eager to participate. A big thank you, to you all. Nominees and award winners, congratulations. You truly have orchestrated valuable change in our industry, for which we are grateful beyond measure.
Patrick Revere is associate vice president of publications for MHVillage and publisher for the MHInsider magazine and blog for industry professionals. His background is in print news, language, and communication.
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INDUSTRY
Happenings Patrick Industries Buys Cabinetmaker
Goshen, Ind., cabinetmaker Maple City Woodworking has been purchased by Patrick Industries for an estimated $12 million. The acquisition includes working capital, machinery, equipment, and real estate. Patrick Industries, a leading supplier for the manufactured housing and RV industries, will continue to operate Maple City on a stand-alone basis under its brand name in its existing facilities.
Hunt Provides $6 Million Loan to Refinance Two Utah Communities Country Village and Mountain View Estates, two non-contiguous communities in Layton, Utah, received a $6 million Fannie Mae DUS conventional multifamily loan to refinance the properties. Hunt Real Estate Capital provided the 10-year loan interest-free for the first four years. Developed between 1973 and 1975, the two communities have a combination of single- and double-width spaces among the 145 homesites. Additionally, the communities have 310 parking spaces, two
for every home. Amenities include a clubhouse, playground, and basketball courts.
Three Oklahoma Communities Change Hands Adkins Hill Village in Norman, Okla., a 111-site property that was 95% occupied, and Leisure Estates in Claremore, Okla., a 46-site property that was 96% occupied, were purchased for $4.2 million by Stonetown 6 Investors of Denver from owners in Tracy, Calif, according to Keith Wilson, of Keith Wilson Co. Additionally, South Acres Community LLC of San Antonio purchased South Acres Mobile Home Park of Bristol, Okla., a fully occupied 42-homesite property, for $475,000 from the previous Chandler, Ariz.-based owner.
Cowlitz, Wash., County Commissioners Update Code The Cowlitz County Board of Commissioners in Washington updated the housing code for the first time since 1978 to encourage more affordable housing. Code changes modernize the language and align with state guidelines, Commissioner Dennis Weber said. The updates
6 | 2020 INDUSTRY AWARDS EDITION • MHINSIDER.COM
had been discussed for several years and affect sewer and water usage, as well as landscaping, fire safety, transportation, and parking considerations. Cowlitz County has 60 manufactured home communities.
Louisiana Community Sells for $2 Million A north Lafayette manufactured home community sold for nearly $2 million to Stanley Holdings Group. Drake 55 Investments purchased the 10-acre property, Drake Mobile Home Village, for $900,000 at a 2017 sheriff’s department auction.
West Virginia Builder Changes Name Express Modular, a custom modular home provider, is changing its name to Impresa Modular to elevate the 12-year-old company's long-term vision of providing a range of high-quality, on-demand, reliable ser v ices to home buyers a nd builders/developers.
Colorado Coalition Provides First Home A coalition in Elyria-Swansea, Colo., has its first homeowner un-
HAPPENINGS
der a new program to create more opportunity for homeownership in the northern Denver metro area. “It’s really a story of a victory for the neighborhood,” said Jane Harrington, executive director of the Colorado Community Land Trust, which was brought in by residents of Globeville and Elyria-Swansea as a partner in their trust.
ufactured home communities to 260 nationwide. The announcement was made by Ross H. Partrich, CEO, RHP Properties. Woodlands Estates is an all-age, pet friendly community, located five miles from the quaint town of Lake Orion.
Modular Homebuilder to Use Improved Solar Panel
Ronnie Bledsoe, a visionary land developer, well-regarded businessman, revered family man, and friend to many has passed away at the age of 70. “Those of us in the industry that had the pleasure of working with Ronnie know what a class individual he was,” Florida Manufactured Housing Association President Mark Kelly said. “He was a giant in our industry and a man that was all about vision, drive, a strong work ethic, and integrity.” Bledsoe’s experience as an underground utility contractor and developer, and Mynchenberg’s background in civil engineering and landscape architecture was a winning combination in the development of Plantation Oaks of Flagler between 1998 and 2004. After selling the Flagler property, Bledsoe and Mynchenberg built Plantation Oaks of Ormond Beach, an upscale community with 1,577 homes.
S2A Modular, the creator of the GreenLuxHome, will have exclusive access to upgraded solar panels that create a more durable, longer-living product. The patented PV Graf™ technology comes from FreeVolt, a European solar company that has developed the world’s first and only graphene solar panel.
Arizona Community Sells for $3.2 million Marcus & Millichap has arranged the sale of the Los Arcos Mobile Home Park in Sierra Vista, Ariz. An individual/personal trust acquired the community from a private investor for $3.2 million. The community is on 37.2 acres and features 232 homesites. At the time of sale, the property was 60% occupied.
RHP Acquires Michigan Community RHP Properties, the nation’s largest private owner and operator of manufactured home communities, has announced the acquisition of Woodlands Estates, located in Oakland Township, Mich. This brings the company’s total of man-
In Memoriam: Ronnie Bledsoe Passes Away at 70
Alabama Mourns Death of Administrator Tommy Colley, former assistant administrator of the Alabama
Manufactured Housing Commission, passed away early the morning of April 23 with wife Lisa and children by his side. He had been battling cancer prior to his death. Colley was known as a wonderful friend and someone who was devoted to his family, his work, and the manufactured and modular housing industries.
Wisconsin Community Owner Passes Away The manufactured housing industry mourns the loss of James A. Hornung, who ran Deerrun Estates in Merrill, Wisc., with his wife Janice. In retirement Hornung bowled and collected vintage cars including a 1925 Model T. Having spent much of his life as a builder and cabinet maker, Hornung in 2011 constructed his own coffin. He is survived by his wife; brothers Richard and Donald; three sons James, Tony, and Bryan, and five grandchildren.
N.C. War Veteran, Community Owner Dies Franklin L. Robinson of Hunstville, N.C. passed away at the age of 94. He fought in the Battle over Iwo Jima with the 5th Marine Division, pitched for the University of North Carolina and struck out future president George H.W. Bush in a baseball game against Yale. He completed an eightyear professional baseball career that included a stint in the Major Leagues with the Philadelphia Athletics. He was a teacher at the local schools, and owned and operated Robinson’s Mobile Home Park.
2020 INDUSTRY AWARDS EDITION • MHINSIDER.COM | 7
upcoming INDUSTRY EVENTS SECO Looks to Capture Vital Elements of Industry Symposium at First Virtual Meeting For more than a decade, a committed group of manufactured housing professionals each year in the southeastern U.S. dedicate themselves to building an industry meeting created by community owners, for community owners in an effort to share best practices and form new ideas. From industry panels, presentations, and roundtable discussions, to networking mixers and professional exhibitors, the SECO Symposium again seeks to create that fresh, compelling interaction and camaraderie — this time in a virtual format that will provide the same type of value with the utmost access during trying times. For months, COVID-19 and associated protocols have kept people at home, or in as limited circulation as possible. However, the manufactured housing industry is essential and work must continue in the safest way possible. Organizers David Roden and Spencer Roane understand education, networking, and business development must go on in the best possible way as well.
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“Obviously we’re talking about a format where presentations can be given, and there can be a good amount of interaction for Q&A as well,” Roane said. “But, just like the in-person event, we want attendees to be able to interact with each other, and potentially go away with 15-20 business cards.” Rather than in an Atlanta event space, SECO 2020 will be held on video screens nationwide, with 2- to 3-hour segments from the morning of Sept. 28 through Oct. 1. “Every year we take feedback and give more of what our attendees, exhibitors, and sponsors want, and while this year provides a bit more of a challenge, it’s also a great opportunity to see just what is possible in a virtual meeting,” Roden said. “And with hundreds or maybe more than a thousand participants, this year will be a unique challenge but one that we and our partners feel confident that we can provide with quality results for everyone.” For more information, including registration, exhibiting, and sponsorship details at SECO’s virtual symposium, go to secoconference.com.
EVENTS
MHI Annual Meeting Oct. 5-8 Virtual Meeting MHI’s largest membership meeting of the year provides an opportunity to exchange information with industry friends, stay current on housing marketplace trends, and attend the board, committee, and division meetings.
Mid America Manufactured Housing Expo Sept. 29-Oct. 1. Deadwood, S.D. — The Lodge Manufactured housing professionals from Montana, Nebraska, North Dakota, South Dakota, and Wyoming will have association meetings with a social event and golf to follow. On day two, the expo will have educational presentations, expert panels, a lenders Q&A, and another round of golf. MHI CEO Lesli Gooch will be there to provide an update on national advocacy and progress in Washington, D.C.
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EVENTS
2020 Manufactured Housing Industry of Arizona Annual Convention and Golf Outing Oct. 20-22 Sedona, Ariz. — Hilton Sedona Resort at Bell Rock This annual membership convention provides education, fun, and relaxation for attendees which includes retailers, manufacturers, lenders, developers, contractors, and suppliers to the industry throughout Arizona.
2020 Georgia Manufactured Housing Association Annual Convention Rescheduled to Oct. 25-27 (Previous dates were Aug. 18-20) Jekyll Island, Ga. — The Westin Jekyll Island The GMHA will open its annual gathering with an introduction and keynote speaker. The convention also will include a silent auction, golf tournament, banquet, entertainment, and professional networking.
2020 WMA Convention & Expo October 12-15 Henderson, Nev. — M Resort Spa & Casino Western Manufactured Housing Communities Association’s annual event blends educational programs with entertainment and networking forums.
2020 Arizona Manufactured Housing Conference Rescheduled to Oct 27-29 (Previous dates were May 6-8) Maricopa, Ariz. — Ak-Chin Hotel and Casino The event will open on a Tuesday with a golf tournament and pool party, followed by two days of business with industry exhibitors, professional seminars and presentations, and networking with colleagues. Check back for room availability when the hotel reopens.
The NCC Fall Leadership Forum is the Manufactured Housing Institute’s major annual executive-level strategy meeting for members.
National Communities Council Fall Leadership Forum 2020 Nov. 4-6* Join MHI at the only strategic executive-level event of the year for those involved with manufactured home communities as an owner/manager, manufacturer, service provider, broker, lender or consultant. * Events are as tentatively scheduled due to COVID-19. Visit MHI’s website at http://manufacturedhousing.org/ for updates.
RV/MH Hall of Fame Induction Ceremonies and Dinner Rescheduled to Dec. 3 (Previous date was Aug. 3) Elkhart, Ind. — RV/MH Hall of Fame Greet and celebrate the 10 new inductees into the Hall of Fame with a celebration that begins at 5:30 p.m. with a cash bar cocktail party followed by the dinner and induction ceremonies at 6:30.
Have an event you'd like listed here? Call Magazine Publisher, Patrick Revere, at (616) 888-6994, or email at patrick@mhvillage.com
2020 INDUSTRY AWARDS EDITION • MHINSIDER.COM | 11
COMMUNIT Y
WHY LAND HOLDS VALUE IN TIMES OF MARKET DISRUPTION by Jason Burbage
I
It’s no secret that investors here in the U.S. and around the world are very nervous and uncertain about where to put their money amid the current COVID-19 crisis. The volatility of the markets — from equities to bonds to commodities — over the past few weeks tells a very grim story about investors’ portfolios. The Dow Jones Industrial Average, for example, shed about 40% of its value from the beginning of the year before beginning a halting ascent. Entire industries such as travel and restaurants have ground to a halt. As could be expected, the ripple effects
are severe and will be felt throughout the entire economy. So for investors searching for peace of mind, where should they put their money?
The Promise of Land Diversification should always be the priority of every investor, especially during uncertain times. Diversifying one’s portfolio is more urgent than ever lest one avoid sliding into a financial abyss. One investment class that often f lies under the radar but offers strong
12 | 2020 INDUSTRY AWARDS EDITION • MHINSIDER.COM
long-term growth and stability, even in times of uncertainty, is land. Whether it’s for farm, ranch, plantation, timber, recreation, or commercial development, land is one of the oldest and most reliable investment classes in existence. But when people typically think of real estate investments, they associate them with rental properties, commercial properties, and foreclosures. They seem less likely to think of raw land as an investment and end up missing out on many significant benefits. Some will say that land is a boring investment. It is true that land
COMMUNIT Y
investors often are in for less of an adrenaline rush than people who bet the farm (no pun intended) on the latest tech stock or on a precious metal that because of its industrial use or speculative potential has suddenly become all the rage. The thing is, the tranquility of mind offered by land for these reasons is exactly what land investors love most about their strategy.
Low Correlation to Other Investment Classes Land is a safe bet because its returns have little correlation to
stocks, bonds, precious metals, or commodities. For example, during the financial meltdown of 2008, land value didn’t fall in a single quarter.
Land is a Limited Resource Land is a limited resource that is relatively inexpensive to own and requires little maintenance. A growing population is encroaching on land acreage and the result is that it consistently outperforms other asset classes over time. Money can be printed through seemingly unlimited “quantitative easing” but the amount of available land can never
be expanded. Land holds its value because of the simple law of supply and demand. Still not convinced? Let’s pull in some data on institutional timberland investments from the National Council of Real Estate Investment Fiduciaries: • 1997 timberland values averaged $1,001 per acre, with one-year total returns of 14.2%. About 7.1% from this return came from appreciation and 7.1% from income. • 2007 timberland values averaged $1,500 per acre, with one-year total returns of 11.5%. About »
2020 INDUSTRY AWARDS EDITION • MHINSIDER.COM | 13
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3.8% from this return came from appreciation and 7.7% from the income. • 2017 timberland values average $1,823 per acre, with one-year returns of 3.3%. About 0.7% from appreciation and 2.6% from income. Calculating the return on any asset class is a matter of simple math and the math for timberland, as for other land investments, continues to look solid.
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There is little competition in the land market because most real estate investors are focused on other types of investments such as rental and commercial properties. Little competition means that there is less risk of the type of speculative bubbles that you will see arise during times of strong economic growth in the office space market for example.
Land is a Long-Term Play There is a large profit to be made in land ownership, but it is not a get-rich-quick proposition. As a longterm, tangible asset, raw land doesn’t wear out or depreciate. It produces enormous wealth over generations, both through appreciation and rents. This outpaces stocks, gold, and many other assets. Here are a few examples ways to make a profit through land ownership: • Buy and Hold – Purchase land at a good price, hold and sell after appreciation. • Establish a Farming Lease – Farmland has historically produced larger returns than stocks, bonds, and mutual funds over the long
14 | 2020 INDUSTRY AWARDS EDITION • MHINSIDER.COM
run. A landowner can normally earn enough from agricultural leases to cover the taxes and insurance, and still make a small profit. However, keep in mind that farmland is normally more expensive and will require more capital to get started. • E stablish a Hunting Lease – Hunting lessees normally take excellent care of the property they are leasing. They also do a great job of patrolling the property and keeping away poachers. As in a farm lease, landowners normally earn enough from a hunting lease to pay the taxes and insurance. • Offer Owner Financing – Land loans can be difficult to secure from traditional banks at times. Offering a buyer owner-financing is a way to sell the land and earn interest. Most owner financing deals offer higher interest rates than traditional banks. Raw land is an a-cyclical asset class that keeps its value because there is only that much land to be bought. Limited competition makes bubbles less likely to occur than in other asset classes and there are plenty of ways to make sustainable profits with land ownership. For all these reasons, land has always been and should always be part of the diversified portfolio of every prudent investor. MHV Jason Burbage is an experienced leader with a demonstrated skills in management, real estate sales, large acreage, rural property, farms, estates, and public speaking. Living his entire life in the Carolinas, Burbage grew up in rural Sheldon, S.C. on his family’s farm.
2020 INDUSTRY AWARDS EDITION • MHINSIDER.COM | 15
COMMUNIT Y
DON’T NEED A MANAGEMENT COMPANY? by Steven Blank
P
Purchasing your manufactured home community is only the beginning. It is the operation of the community that will make or break your asset. The first instinct of many new companies/owners is to want to operate the community themselves, after all – manufactured housing is famous for being able to be run profitably with little management involvement. In reality, the days of profitably operating a community like my grandfather did in 1968 are over. Old and new owners alike need more than a pegboard accounting system and a community manager to “keep the lights on”. Savvy operators can turn a 2-star asset into a 4-star property, but operators with weak management and processes can quickly transform a 4-star community into the 2-star variety. With recent consolidations in manufactured housing, the industry has experienced much larger companies funded by private equity entering the space. But we’re not seeing an equivalent increase in staff level expertise. Because this industry has always been a niche form of multi-family real estate there wasn’t as much of a demand and necessity for a multitude of mid- to high-level managers. Subsequently, the industry has grown faster than the employment pool. It is indeed hard to find good help these days. »
16 | 2020 INDUSTRY AWARDS EDITION • MHINSIDER.COM
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Management Services Are An Investment in Your Community 2020 INDUSTRY AWARDS EDITION • MHINSIDER.COM | 17
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More is Being Asked of the Third-Party Manager
layers of complexity to the business and the need for an Third-party or fee-based management companies have experienced operator becomes imperative. When we been around, but today more than ever they need to take over a community with an infill attempted or in provide value and growth for the properties they manage. progress, we typically find delinquency. And construction Much of the opportunity for fee-based managers used to or renovation costs are too high. There may be a lack of lie in receivership properties or communities that did insight into what the community actually needs and not have a large need for growth. Today, what potential remedies might be. Rental third-party managers are being asked to models in this industry are unique and “The lot grow portfolios, occupancies, and value; relatively new at current scales. As such, modification expertise some simply do not have. owners and managers need to have a solid Manufactured housing communities plan and the ability to execute or stand the and home are not like apartments, condominiums, risk of significant financial losses. installation process or commercial property management. A solid management company should are other areas With MHC, your land is your asset, not come in with a set operating system and where big issues your buildings. Operating a community longstanding experience working with tend to arise.” is like operating a small town and all the value-add communities. The first step is to town’s utilities and infrastructure are your evaluate the current situation in order to -Steven Blank concern. Up until 2009, most communities understand the nature of the community consisted of owner-occupied homes. Since and the market, to strategize on a best-case then, in many markets, rental homes are a necessity. If scenario, and to provide tactical recommendations and you are or are planning on renting homes, that brings a vision on what results should be. another layer of complexity and commitment into the It does not help anyone if a management company picture, as you are now a landlord, much like with an comes in, overpromises, and underdelivers. apartment complex. In every community, the most important job is that What to Look for in a Third-Party Manager of the “mayor”, making sure the residents have a safe What experience brings to the table, aside from opercommunity within which to raise the family. This is one ations, is a network of vendors that enables initiatives of the main pain points I have seen in our industry. There to be completed correctly, on-time, and on budget. are not enough industry professionals to appropriately This is a very overlooked part of the value-add process. operate a community like the small town that it is. Not all homes are created equal, even if from the same manufacturer. A home that is to be sold at a community Enter the Rental Home level should be different than a home that is to be rented, Currently, the biggest need that Blank Family Commujust as a rental home purchased for long-term rental nities sees is managing communities that are attempting strategy should differ from a home with a shorter-term to add value through increased occupancy. Because selling strategy. This is a way that a management company helps homes is still difficult in today’s market, there has been curb ongoing renovation expenses, by being proactive a large shift into the rental model and that is where upfront during the home order. Upgraded cabinets, doors, small and large community owners alike may fall into flooring, and fixtures may cost extra upfront but over any trouble. On paper, it seems simple: purchase a community significant period, R.O.I. will far outweigh the added costs with vacant sites, fill those vacant sites with rentals, on the front side. and continue to operate the MHC in the traditional The lot modification and home installation process are way — passively and inexpensively. other areas where big issues tend to arise. There should be That is where the disconnect is between paper and a schedule for which you feel a new home should be set practice. Infilling homes and a rental model add several and occupied. If that doesn’t occur, income can fall below 18 | 2020 INDUSTRY AWARDS EDITION • MHINSIDER.COM
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the budget very quickly. In most situations, our schedule for home set for occupancy is 45 days from delivery. We often see inexperienced communities take up to a year before they get a rent-paying resident in the home. This can happen for simple reasons like pitfalls from hiring the wrong contractor to a misunderstanding of the permitting process. Identifying the right subcontractors for concrete, home installation and utilities can be difficult, again, because we are in a niche business. Owner/operators want a management company that has spent years cultivating relationships across the country and possesses extensive vendor relationships that ensure quality work at agreed-upon pricing and schedules. These skills also prove useful when entering unchartered markets, knowing how to locate and negotiate with the right subcontractors can make the difference in months of rent on the books versus idle homes with no occupants. Once the correct home is ordered, delivered and properly set, the final piece of the puzzle (and ultimately the most important) is getting a qualified renter into that home.
Here, a pitfall that many owners fall into is leasing homes with loose underwriting guidelines. In six months a large percentage of those new residents end up being evicted, and home renovation costs go through the roof. The most important thing that I have learned over the years is the importance of employing strict underwriting guidelines to ensure only qualified renters are approved. Otherwise, you are inflating occupancy numbers that are not going to translate into cash flow. Owning and operating a manufactured home community is not “paint by numbers” nor a walk in the park. Yet, if approached in the right way with the right management team it can be rewarding and profitable through effective assessment, planning, execution, and, perhaps most important, insightful industry knowledge. MHV Steven Blank is the president of Blank Family Communities, a third-party management group in the Midwest, with 10 years of MH owner/operator experience and membership in the MMHA.
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SERVICE / SUPPLIER
LP Building Solutions Expands Trim, Siding, Soffit Offerings Nashville-Based Company Puts Added Emphasis on Manufactured Housing by Patrick Revere
L
P Building Solutions, a Nashville-based provider of engineered wood and wood products, expanded its offerings of trim, siding, and soffit for residential use with an added emphasis on serving the manufactured housing industry. “Since its introduction last year, we have seen strong customer interest in our LP SmartSide Smooth Trim
& Siding,” LP SmartSide Senior Brand Manager Derek Blank, said. “Our Smooth product provides a great look on the side of a house and is able to complement a wide variety of styles and aesthetics. “To provide even greater variety, we have launched our smooth aesthetic in a new soffit,” he said. “This will »
2020 INDUSTRY AWARDS EDITION • MHINSIDER.COM | 21
SERVICE / SUPPLIER
allow us to continue our growth and meet the needs for durable siding with a great modern aesthetic.”
LP at the International Builders Show LP used the International Builders Show in Las Vegas to profile how SmartSide performs in strength, weight, and applicability. The company set up pitching machines and wall-anchored sledgehammers on the showroom floor to do side-by-side comparisons of its product against a competing concrete composite. Blank said SmartSide is 44% lighter than Hardie Board, for instance, and can absorb more force without breaking as well. This makes SmartSide a valuable material in construction, delivery, setup, and for the homeowner in maintenance and repair.
Manufactured Housing A Focus for New Engineered Products “Manufactured homes and modular homes in transport tend to sustain some degree of damage, particularly on
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22 | 2020 INDUSTRY AWARDS EDITION • MHINSIDER.COM
the lower boards,” Blank said. “You’re going to get some stress, some bumping of modular sections, and problems with the lower two board when setting the home. “This board is lighter and more durable, which takes away a lot of that potential for damage,” Blank said of the SmartSide and associated products. SmartSide, trim and the new soffit come in 16-foot lengths, rather than the standard 12-foot sections. And the 16 original colors as well as options for cedar and smooth finishes provide a great amount of variability in the use of the product. LP SmartSide Smooth Finish Soffit is cut to width and provides a clean, cohesive look to match other LP products. For better workability, the product comes in a 16-inch width that helps to eliminate time spent ripping full sheets. Vented soffits are also are available with precisely cut, bug-resistant vents to provide an alternative to vinyl, MDO, plywood, or hand-installed metal vents to make it easier to meet code requirements while adding architectural beauty. The material is treated to the core with LP’s SmartGuard® zinc borate-based process and bonded with a water-resistant, resin-saturated overlay. All LP SmartSide soffit provides the same long-term durability and strength against harsh weather as the siding and trim products.
LP Earns Prestigious Awards at Annual Show The company launched its new SmartSiding late in 2019, and used IBS in Las Vegas to show the new offerings. Customers seemed impressed with the product, and judges took notice too. LP won a series of awards for SmartSiding and the associated trim and soffit packages, both for product development and marketing. “We are thrilled to honor LP Building Solutions as Gold, Platinum and Bronze winners of our Brand Builder Awards,” said Hanley Wood Residential Construction Group President Paul Tourbaf. “Their creative marketing approach combined with the effectiveness of their work distinguished them as a leader in their category and offered great insight into the innovation within their company.” MHV
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2020 INDUSTRY AWARDS EDITION • MHINSIDER.COM | 23
SERVICE / SUPPLIER
Photo Courtesy of Clayton Homes
Debt Collection Best Practices for Community Owners by Ryan Fishman
A
s the owner or operator of a manufactured housing community, you’ve probably dealt with your share of delinquent payments. At first, a resident is just late – maybe a couple of days. Eventually, you will experience the rent payment never comes. There’s no response to calls or knocks on the door, so you’re forced to pursue an eviction. Once you have possession of the home or site, you’re stuck carrying a loss you might never recoup.
This process forces you to perform a juggling act of financial, legal, and ethical considerations. Worst of all, you’re often expected to go through this process alone.
Don’t Lose Hope With a set of standard operating procedures for your community, you can develop an effective collections process to mitigate these losses. By being proactive, you’ll avoid the heartaches and headaches often associated with post-eviction loss-
24 | 2020 INDUSTRY AWARDS EDITION • MHINSIDER.COM
es, boost your cash flow, and give your community a competitive business advantage.
Setting the Record Straight We like to tell our clients the place to start is the start. That means comprehensive and standard credit screening protocols for prospective residents. It’s critical this process be structured and tightly maintained – it will help avoid more delinquent or defaulting residents down the road and improve your ability to collect
SERVICE / SUPPLIER post-eviction. There’s a long list of proactive steps that go into a strong policy, but ever-critical are minimum credit standards, legible paperwork, and the delivery of clear expectations before move-in. The figures in your credit policy are a function of the level of risk your community is willing to take. This means evaluating your range of acceptable credit scores and determining what other key aspects of the prospective tenant’s credit profile — like income, for example — are most consequential to you. Making these decisions on the fly can lead to serious errors in accepting residents with questionable reliability, and perhaps also denying potential customers with stronger profiles than initially evident. Standard procedures also help avoid turning the application process into a fair housing minefield. It’s important that you are explicitly clear with your prospects as to what you expect out of them. This means laying out a clear policy when it comes to late payments or missed payments, and the specific steps you plan to take if they’re late or default. This will ensure there are no surprises when you take immediate and decisive action to protect your community’s best interests.
to pursue an eviction. Defaults and bankruptcies sometimes go handin-hand, thus without the proper filings you can easily find yourself in violation of federal law. Bankruptcies not only slow down the eviction process, they often preclude you from later pursuing the balance owed. It’s critical that residents understand that eviction does not exempt them from paying their balance. Follow through with your standard security deposit notice and make a demand for any additional balance that’s owed, including the past due rent, late fees, accelerated rent, releasing expenses, outstanding utilities, damages, clean up, court costs, statutory attorney fees, and other expenses legally permitted by federal, state, and local laws in your juris-
diction. Often, defaulted residents have the mistaken understanding that once they are evicted, the slate is wiped clean. Not only is that not true, but it can often stall getting paid voluntarily post-eviction. It is critical your community staff makes clear to the resident that, if evicted, they will still owe you that money, and you will pursue anything that is not paid voluntarily. MHV Ryan Fishman leads the Fishman Group, a creditor’s rights law firm with a team of experienced attorneys who specialize in debt collection. Fishman is a regular contributor in media reports on the industry and serves as a subject matter expert in collections law.
Eviction Evicting a resident is a laborious and, often, precarious process; for the purposes of this article, we will focus on how evictions tie into your ability to collect. First and foremost, find a landlord-tenant attorney to handle your evictions to avoid exposing yourself to any liabilities that may arise in exercising your right 2020 INDUSTRY AWARDS EDITION • MHINSIDER.COM | 25
IS GOING VIRTUAL! September 28 October 1, 2020 Learn more about SECO and register online at:
www.SECOconference.com
For over 10 years, SECO has been the premier conference for owning and managing successful manufactured home communities. As a non-profit 501(c)(3) organization, net proceeds fund projects for veterans and first responders living in manufactured housing communities. This year, due to COVID-19, SECO is moving to an online event.
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Want to Sponsor SECO20? Don’t miss your chance to reach community owners and managers at our inaugural SECO20 online event! Last year, SECO attracted 443 attendees and we’re anticipating at least that many attending this year’s event as well. Plus, with our new online format, SECO will reach industry professionals nationwide giving you even more visibility this year!
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Guiding your business through extraordinary times Wells Fargo Commercial Real Estate understands that making business decisions in the current environment is more challenging than ever. Our experienced bankers can provide the financial guidance you need to help navigate your company’s most pressing issues. With our industry knowledge, products and services, we’re confident we can help keep your business moving forward. Learn more at wellsfargo.com/mhc. Tony Petosa 760-438-2153 tpetosa@wellsfargo.com
© 2020 Wells Fargo & Company. All rights reserved. IHA-6759339
2020 INDUSTRY AWARDS
– 2020 –
INDUSTRY AWARDS In Recognition of the Highest Achievements in Manufactured Housing
28 | 2020 INDUSTRY AWARDS EDITION • MHINSIDER.COM
2020 INDUSTRY AWARDS
C
ommendable teamwork abounds in the manufactured housing industry, including from the organizations that honor great work in building communities, homes, and services that aid in the effort of high-quality, attainable, affordable housing. MHInsider Industry Awards is a bit different than most award programs in that it keeps to the personal feel of our industry magazine. When it came to the awards program it was clear that we should honor individuals for the highest achievements in manufactured housing. Each MHInsider Industry Award winner profile is like an introduction, a small bio, and a peek into what drives the recipient to achieve at such heights. Our 15-member editorial board and internal project team pared the candidate list from more than 60 individuals from 20 states to a shortlist of 16 nominees. We employed the volunteer efforts of more than a dozen state and regional manufactured housing industry association directors to conduct a vote on the safe, and secure voting platform eBallot. So congratulations to all of the nominees and winners. Thank you for your dedication to high-quality, affordable housing. Each of the MHInsider Industry Award winners will receive the inaugural personalized “crystal home” award chosen by our team.
Honorary Judges Ken Anderson, Ariz. Jim Ayotte, Fla. Amy Bliss, Wisc. Frank Bowman, Ill. Ron Breymier, Ind. Joan Brown, Wash. Mark Brunner, Minn. Randy Grumbine, Va.
Advocacy Award Honors efforts toward outreach and education that reach beyond professional position or title
Influencer Award Honors individuals who by their presence and authentic implementation of ideas have created widely held business practices and wholesale improvements for the industry
Leadership Award Honors individuals who have earned the highest levels of industry achievement through their corporate or organizational leadership approach
Legacy Award Honors manufactured housing professionals whose overall career contributions are certain to create meaningful and lasting industry improvement and excellence
Visionary Award Honors those who have brought to market the coolest concept or product, the idea that makes the job easier, the offering better, the customer experience more meaningful
MHInsider Editorial Board Jennifer Hall, Ky. JD Harper, Ark. Deanna Fields, Okla. Brad Lovin, N.C. Jess Maxcy, Calif. Marla McAfee, Tenn. DJ Pendleton, Texas Leo Poggione, Nev.
George Allen, EducateMHC Paul Barretto, MHInitiatives Paul Bradley, ROC USA Barry Cole, Manufactured Housing Insurance Services Kevan Enger, Capstone Stacey Epperson, NextStep Suzanne Felber, The Lifestylist
Dawn Highhouse, MHVillage/Datacomp Maria Horton, Newport Pacific Darren Krolewski, Datacomp/MHVillage John Neet, MAI Karl Radde, Southern Comfort Homes Patrick Revere, MHInsider/MHVillage TC Sheppard, UMH Properties Joe Stegmayer, Cavco
2020 INDUSTRY AWARDS EDITION • MHINSIDER.COM | 29
ADVOCACY AWARD Mark Yost, CEO of Skyline Champion Corporation
M
ark Yost, the winner of the MHInsider Advocacy Award, is the CEO of Skyline Champion Corporation and was nominated for the award on the merit of his industry representation in Washington, including a July meeting at the White House that resulted in progress on peeling back excessive regulatory requirements that drive up the cost of housing. He also presented for the industry at the Innovative Housing Showcase in June of 2019, and testified in Congress regarding HUD Code updates and associated legislation including the HUD Modernization Act. Prior to being named CEO, Yost served as Champion’s CFO for more than six years. What do you view as the biggest accomplishment of your career?
To be honest, I don’t think of myself having one. I do not think of things that are accomplished as big events. I think of accomplishments really being rooted in the small and daily things you do compounding over time and working with great people that are the foundation for accomplishments. What work or life skill do you give the most credit for your achievements?
Nominees: Stacey Epperson, Next Step Amie Hacker, Parkplace Homes 30 | 2020 INDUSTRY AWARDS EDITION • MHINSIDER.COM
It is a combination of two really big skills that I think of as two sides of a coin. Critical Thinking and Emotional Intelligence. I have always loved problem solving, originally looking to work in or be a professor of either quantum or particle physics because of the understanding of how small things work together so well to create everything around us. I think of Emotional Intelligence in the same way, we are a wonderful team of people, each with our unique gifts and traits and when they are together in the right environment and we let them do what they are best at, amazing things happen. I often hear the saying that people are our greatest asset, people are the company, period. Everything else is assets.
INFLUENCER AWARD Kevin Clayton, CEO of Clayton
K
evin Clayton leads Clayton, a national builder of off-site built homes, with a focus on innovation, sustainability, and customer experience. Clayton works together with industry partners to make homeownership attainable for more families. Clayton teamed on the initiative around CrossMod™ homes, a new type of off-site built homes with the potential to finance and appraise similarly to site-built homes. Additionally, he spearheaded matching funds for the RV/MH Hall of Fame and has provided innumerable gifts from the Clayton Home Foundation and Family Foundation that invest in affordable housing, community involvement, and educational enhancement.
What do you view as the biggest accomplishment of your career? Only together are we able to unite efforts to improve lives and utilize innovative building methods and products to build a better tomorrow. That is why an extraordinary team member experience is so important, and why we look to engage our workforce, reduce turnover, increase wages, and invest in facilities. We want to make Clayton a family atmosphere with fellow teammates. What work or life skill do you give the most credit for your achievements? One of the most important skills I’ve learned during my career is to adopt a style of servant leadership that focuses on others. Directing efforts to improve the lives of our team members, homeowners, and communities allows us to build a stronger and better company. Warren Buffett says if he could inject one gene into every company, it would be to make them customer focused. By listening to others and striving to answer needs we continue to make progress.
Nominees: Mike Sullivan, Newport Pacific Steve Schaub, Yes Communities 2020 INDUSTRY AWARDS EDITION • MHINSIDER.COM | 31
LEADERSHIP AWARD Wally Comer, President of Adventure Homes
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ally Comer, the winner of the MHInsider Leadership Award, could have retired or gone into consulting, but he founded Adventure Homes during troubled times, taking over a defunct plant, creating jobs, and building award-winning homes. Ten years later, Comer and his team run one of the most successful manufactured housing facilities in the country. Adventure has won numerous Manufacturer of the Year awards from MHI, as well as many other accolades, including Comer’s 2019 induction into the RV/MH Hall of Fame. Adventure works to build what the customer wants, and has worked equally as hard to get factory-built homes into urban areas where they previously had been zoned out.
What do you view as the biggest accomplishment of your career? Perhaps my biggest accomplishment was the creation of Adventure Homes. Adventure is a business dream come true for me. It’s one thing to shoot for the stars, it’s amazing when you actually hit one! I’m incredibly proud of our company. I call it ours because there are so many people who have played a significant role in our success. What work or life skill do you give the most credit for your achievements?
Nominees: Steven Adler, Murex Properties Todd Su, Advantage Homes 32 | 2020 INDUSTRY AWARDS EDITION • MHINSIDER.COM
My father never achieved the level of success that I enjoy today. He worked hard his entire life and never complained, never missed a day of work, never spoke badly of anyone. He was my hero. Out of college I made a promise to myself that I would work every day without compromise. There is not a day I go to work that I don’t think about him. He didn’t know it at the time but he was my inspiration. He is the reason for my success.
LEGACY AWARD John Crean, Founder of Fleetwood Enterprises
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ohn Crean, the winner of the MHInsider Legacy Award (posthumously), founded Fleetwood Enterprises in 1951 and built it into one of the nation's most successful manufacturers of RVs and mobile homes. Based in Orange County, Calif., Fleetwood by 1998 when Crean retired had become a Fortune 500 company at better than $3 billion in annual sales. That year, Fleetwood sold more than 135,000 RVs and manufactured homes. Fleetwood built more than a million homes under the leadership of John Crean, who passed away in 2007. He was a veteran of the Navy and Merchant Marines. He and his wife Donna gave generously within Orange County and elsewhere, including at times donating half of their annual earnings.
On John Crean’s Career In 1965, Fleetwood had nine factories and less than a decade later the company was operating 70 plants. The company, at its height, was the largest manufactured home and RV maker in the world. Observations from a Colleague “John started off slow, making 10 floors a week and made sure it could be profitable that way, and then the growth began. There was no debt and very thoughtful growth with the operating profits on hand. John understood how to pace the business and always was very generous to his employees, which is why he always had a strong team. There was a good training program, and it ended up preparing a lot of people who went to other companies or started their own successfully, as well.” – Gordon Collins, Fleetwood Marketing Executive and colleague of John Crean
Nominees: Jim Clayton, Clayton Art Decio, Skyline Chuck Fanaro, DWG Corp. 2020 INDUSTRY AWARDS EDITION • MHINSIDER.COM | 33
VISIONARY AWARD Cody Pearce, President of Cascade Financial Todd Kopstein, CEO of Cascade Financial What do you view as the biggest accomplishment of your career? For 21 years I have had the honor of working with many incredible team members. George Dover and I started Cascade in 1999 and slowly built a strong foundation. When Wayne Bond, Ryan Stum, and Gerron Dover became our partners in 2006, Cascade began to really grow. Now I look at the talented executive team that we have and more importantly the individual team members at Cascade who work day in and day out serving the American Dream through affordable home ownership and I am humbled and grateful to each of them. Building Cascade shoulder-to-shoulder with so many great people is my biggest career accomplishment. What work or life skill do you give the most credit for your achievements? I enjoying connecting with other people. I believe that the ability to connect with anyone at any level has allowed me to succeed where I otherwise might not have. Cody Pearce, President of Casacade Financial
Cody Pearce, the co-winner for the MHInsider Visionary Award, shares the honor with Cascade CEO Todd Kopstein. These leaders of the Arizona-based lender developed the first securitized pool of home loans in the manufactured housing industry in more than 15 years. Round one is valued at $175 million, with a second larger round coming that could receive a credit rating and further shoring up financing for factory-built housing.
Todd Kopstein, the co-winner of the MHInsider Visionary Award, shares the honor with Cascade President Cody Pearce. The combination of manufactured housing industry knowledge at Cascade combined with Kopstein’s experience as a director at Centerbridge partners with a deep background on Wall Street and in securities, provides the potential for a major breakthrough in affordable home finance that will be beneficial for all manufactured home lenders, builders, community owners, and homebuyers.
Nominees: Kenny Shipley / Curt Hodgson, Legacy Housing George Porter, Manufactured Housing Resources 34 | 2020 INDUSTRY AWARDS EDITION • MHINSIDER.COM
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CORPORATE, INDUSTRY LEADERSHIP
DURING CHALLENGING TIMES by Patrick Revere
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William “Bill” Boor has run the gamut in the corporate world, from homebuilding to mining to wallboard to beer and back. Leading teams and organizations is what drives him. “My career has been a series of executive positions in large public companies,” he said. Boor met former Cavco CEO Joe Stegmayer in 2001 during their time with Centex Corporation in Dallas. “I joined a year or two after Joe in a corporate strategy role,” Boor said of Centex. “He actually interviewed me for that role, and we worked together and I was learning about the industry from Joe.” When Cavco spun off from the site-built company and Stegmayer went with it, the two maintained contact. Boor went on to hold jobs at Eagle Materials, Cliffs Natural Resources, and Great Lakes Brewing Company. In 2008, with the manufactured housing industry facing a tremendous lull amid the housing bust, credit crunch, and subsequent recession, Boor was asked to join Cavco’s board of directors. “That was before the Fleetwood and Palm Harbor acquisitions,” Boor said. “I was able to be on the board for that transition of Cavco from a regional manufacturer 36 | 2020 INDUSTRY AWARDS EDITION • MHINSIDER.COM
into a national leader in the industry through those transactions. Despite the challenging times, Cavco was well-positioned to buy these larger companies that also brought retail and financial services businesses to the portfolio.”
Head of Cavco Industries In early 2019, Boor had taken on the chairman role and the board was considering options for filling the CEO position vacated by Stegmayer a few months earlier. His fellow directors asked Boor whether he would consider taking on the new challenge. The decision to take on the CEO role at Cavco was a difficult one for Boor. When the opportunity arose, his family had developed deep roots in Cleveland, Ohio and he had largely settled on retiring in the brewing industry. “Every time in my career that I think I have it all figured out…,” Boor intoned, “Next thing I know, a new and interesting challenge is a possibility. I had to make a hard choice between two really good opportunities. I have a history with Cavco, and we’d made some real progress together in growing its presence in the industry.
Builders construct new homes in one of Cavco’s Arizona homebuilding facilities.
I knew Cavco had a great foundation as a company, yet the industry still had a lot of room to move and grow. “That’s where I started thinking about what’s happening in regard to the need for affordable housing, that’s what really sparked my interest,” he said. “My family and I decided to make this work because there aren’t a lot of great places to go where you can enter a stable environment and still understand that there’s a lot of vital work to be done. That’s great to be a part of.”
What Are the Challenges? Boor wants to see the industry, and Cavco’s part in it, be energetic and innovative through the housing crisis he was brought on to face, as well as in the coronavirus economy he and so many other leaders have had to confront. Indeed, business has changed and will need to continue to evolve. Housing availability and cost have been a challenge in nearly every part of the country for more than a decade. During a time when everyone has been asked to stay at home, the affordability, availability, and safety of housing carries added importance. “Different parties need to come together in a unique way,” he said. “One great challenge is the historic mindset
and legacy of zoning restrictions that are outdated and need to fall away. And we’re starting to see that. The barriers are falling away for manufactured homes.” Accessory dwelling units, or ADUs have become acceptable in some of the country’s hardest-hit housing markets. It’s that type of greater vision for builders, developers, planners, zoning officials, and lenders that can make a difference. “We’re not going to be building and delivering the home that looks like what we’ve delivered historically,” Boor said. “Product innovation is going to be part of responding to the affordability needs of the future. “I’m very optimistic about the demand side of the opportunity that is already on us,” he added. “What concerns me is the backlog of orders, a certain restraint in the labor markets, and what that means for the industry and its players. We at Cavco, and the industry as a whole, have to learn and understand how to operate with all of these obstacles.” Boor said he believes the manufactured housing industry is in the best position to meet the housing challenge in any economy. »
2020 INDUSTRY AWARDS EDITION • MHINSIDER.COM | 37
BUILDER / RE TAILER
Labor and Distribution Development of an increasingly robust, dedicated workforce in home building, retail, and delivery is a must, Boor said. “We’re always doing the math on long-term demand trends and we’re confident that after many years of new home construction lagging household formation, there is a pent-up demand, particularly in the price points we serve. However, competition for labor is a challenge
that needs to be solved and the industry needs to make sure we have distribution to get our products in front of homebuyers. Dealers are down approximately 80% from the 2000 timeframe,” Boor said. “These were the challenges in providing housing solutions before the coronavirus response. We’ll face shifting dynamics in the coming months, but the long-term need will remain and we need to keep a long-term perspective on solutions.” Expansion through acquisition can help in ramping up production, he said. Cavco, for instance, acquired Destiny Homes in August of 2019. But networking on best practices, and developing meaningful partnerships in every corner of the industry
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will create the greatest amount of success for everyone. “Once someone gets something in their head about an opportunity, resources that might have been missed before seem to pop up all around,” Boor said. “It’s really traditional networking, and you’ll see those second- and third-order people appear who really help fill in pieces of the puzzle. I’ve met people working on a certain aspect of the affordable housing puzzle and the conversation takes off with a lot of new ideas. “Being out there and being vocal about affordable housing means you capture some of those connections that might just walk by you otherwise,” he said. Many in the brewing industry have embraced the use of the Triple Bottom Line — measuring success in terms of people, planet, and profit. This has created an extraordinary culture and sense of purposefulness among beer makers, Boor points out. That mission-minded business approach is built into the manufactured housing industry as well, with the existing need for attainable, affordable, healthy, and sustainable housing. “Getting an organization motivated on that bigger impact is very powerful, which is something I would like to enhance at Cavco and through the rest of the industry,” Boor said. “Staying focused on putting people in homes, that’s special. Our focus is right there.” MHV
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Port Townsend is a small peninsular city in Washington with geographic restraints that increase the need for affordable housing options. Photos courtesy of Port Townsend, Wash.
42 | 2020 INDUSTRY AWARDS EDITION • MHINSIDER.COM
BUILDER / RE TAILER
What Port Townsend’s New Housing Amendments Mean for Manufactured Housing by Lindsay Patton-Carson
A
A few amendments to the Port Townsend housing code could drastically benefit the mobile home industry in the Washington city. The amendments were recommended by the city Planning Commission in late 2019. Included in the amendments are design-modulation modifications, expanding the size of accessory dwelling units, allowing duplexes, triplexes and four-plexes in a zone currently reserved for multi-family housing. Port Townsend Planning Director Lance Bailey presented the final reading in front of city council on April 6, and the final approval will be discussed when meetings resume amid continued precautions to prevent the spread of the coronavirus. Bailey and his colleagues started the amendment process two years ago, right around the time Port Townsend was going through a housing crisis. The amendments are important to Bailey because it expands affordable-housing options throughout the city. “There’s a divide on the working-class side,” Bailey said. “People working full time can’t afford the housing here. It had been getting worse and the city council started to address it.”
Port Townsend is a small tourist and retirement town approximately two hours from Seattle. The town has a population of 10,000 and is located on Washington’s Olympic Peninsula, at the entrance of Puget Sound. Within the community itself, there are many second/ vacation homes and high-end real estate, which is mostly driven by second-home purchases. The 9.6-mile town also is a Victorian seaport, so aesthetic architectural standards come into play when considering new developments. “Any city looking to adopt or have standards that relate to architectural elements, they haven’t thought about how that would affect manufactured homes,” Bailey said. “And the products coming out of the manufactured home industry have aesthetics that are raising the bar. It’s not your old mobile home.” With the new housing amendments, updated housing codes will make it easier for Port Townsend to incorporate affordable manufactured home communities throughout the city while abiding by state law that requires cities and towns to allow manufactured homes in all residential zones. “We’re starting to see more manufactured homes here,” Bailey said. “The industry is rapidly changing. People » 2020 INDUSTRY AWARDS EDITION • MHINSIDER.COM | 43
BUILDER / RE TAILER
aren’t familiar with manufactured homes today. When they think of them, they think of old housing.” The trouble Port Townsend was running into was finding manufactured and modular homes that fit within the city’s architectural standards for custom home design. Manufactured homes are designed to meet federal regulations and in some cases are misaligned with local codes. “One of the recommendations I made to City Council at the last meeting was to make it as easy and clear as possible, we could exempt the manufactured homes,” Bailey said. “Personally, I think that would have been a reasonable approach. What we’ve done is change the standard to measure that linear wall space from triggering the modulation at 20 feet - we’ve expanded that out to 30 feet. And looking at the majority of manufactured home plans that have come in, I think that will cover the vast majority of them.” Bailey consulted with multiple developers to get their input on any regulatory items or obstacles to building lower-cost housing. The Planning Department then started a process based on developer recommendation. “We wanted to pick the low-hanging fruit to address some of the strategic pieces in our code without doing a complete overhaul,” Bailey said.
44 | 2020 INDUSTRY AWARDS EDITION • MHINSIDER.COM
The inclusion of more manufactured and modular homes also makes the approval process easier for the city, because the applications come in a template. “We’ve done more permits in the past two years than previous years, and I’d imagine we’re not alone. We’re seeing dramatically increased volume of permits, which stresses a small city,” she said. “A good manufactured home application is much easier for us to process.” Overall, Bailey says the amendments will strongly benefit the Port Townsend community, especially for those who are seeking more affordable-housing options in the town. “The amendments help diversify the housing and community and make it easier to meet the review standards that the city has,” Bailey said. “It helps to address affordable housing.” MHV Lindsay Patton-Carson is a writer and content and social media manager based in Grand Rapids, Mich. As a trained journalist for over a decade, Lindsay has accumulated bylines with publications that include PhillyVoice, One Green Planet, Girlboss, Care2, The Huffington Post, and Bust. She manages brands and social media platforms.
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Name Precedes Central Florida Home Retailer Four Star Leads Vital Market in the Industry by Patrick Revere
46 | 2020 INDUSTRY AWARDS EDITION • MHINSIDER.COM
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The presence of Four Star Homes in the Central Florida manufactured home market can’t be overstated. Four Star has eight retail locations in a 12-county area. It has more than 25 people on staff and employs about 200 sales agents. The brokerage lists approximately eight of 10 homes that sell in Central Florida each year. “People just know Four Star. If you’re going to buy or sell a mobile home, that’s where you go if you’re in Central Florida,” owner Karen Rearden said. And from a historical perspective, too, the Rearden family business has a name that precedes itself. Four Star Homes Inc. was started by Karen Rearden in 1982. At the time, she was employed with a mobile home brokerage that most people today identify as a leader in home insurance; Foremost Insurance, of Grand Rapids, Mich. “The division was Foremost Home Brokers,” Karen Rearden said. “I ran the Port Orange office in the early 1980s, and then I got a call. I was told Foremost was getting out of the brokerage business, and that I could have the phones, the office, the files… “I’m thinking what do I have to lose? So I took the leap of faith and I doubled my income in the first quarter,” she said. Nearly overnight, Karen was in business for herself. She changed Foremost to Four Star and used the same colors in the new company’s branding. The goal was the make the transition effortless, and keep Four Star on the forefront for home sellers and buyers the way Foremost had been. “People really didn’t notice much difference,” Karen Rearden said. “It was amazing how smooth it was.”
Single Mom Raising Two Boys When Karen Rearden turned the former brokerage into a family business, she had two young boys to raise. As often is the case, Matt and Jon grew up in the business. The first office and the ones to follow would make somewhat of a second home. Certainly, the business dealings and shop talk rubbed off in ways that may be immeasurable. “They used to have a big three-ring binder and polaroids taped to a page in the office. That’s how they kept track of listings. If you were an agent you’d come in and look
BUILDER / RE TAILER
at a hot sheet and flip through the binder,” Matt Rearden recalls. “Has a lot changed?” Today, Jon Rearden is a pastor, and Matt Rearden is their mother’s business partner at Four Star. He is an attorney and worked for large corporations and organizations, including a stint with NASCAR. “I was in two publicly traded companies, traveled the world and did some fun stuff, but some things changed here,” he said of Four Star and Central Florida. “In the last five years the brokerage business has really taken off, so I came back to help out.” Karen focuses on sales and operations. Matt works on finances, business planning, and marketing. In recent years, they built a proprietary database called Four Start Direct, a web portal that staff and sales agents can access for listings, leads, and other information. “All of our agents can see all of our listings, and they can do it from any device. There’s a lot of development and upgrade time,” Matt Rearden said. “But people ask us how we’ve been able to scale, and I say it’s all » Karen Rearden hangs her sign in Central Florida. Photos courtesy of Four Star Homes.
BUILDER / RE TAILER
about training and the system. Four Star Direct makes it easy to do that.”
Manufactured Home Sales in Central Florida Four Star serves customers within about 70 miles of each location. “We’ve gotten more structure since Matt came on board, and we’ve expanded our marketing efforts,” Karen Rearden said. There were many years when business activity was good, but it was difficult to find sales agents and office staff. The tone today is different, she said. “We have people walking in the door who want to work for us now,” Karen Rearden said. “A lot of our agents came to us because they bought a home and liked what we do. Maybe it’s a second career, children are out of the house, and they quickly adopt our company. We do have a family feel,” she said. “We mean our buyers, but sellers and agents too.”
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Matt Rearden said everyone knows Four Star sells manufactured and mobile homes. “But people are our business, and that’s the way it has always been,” he said. Building relationships across generations creates familiarity and loyalty that cannot be conjured up in a conference room. Success like Four Star’s is the product of prolonged care, determination, and diligence. “I feel if you take care of the people, the people will take care of the business. I know their kids, and the birthdays, and whatever difficulties might be taking place,” Karen Rearden said. “We’re there for all of it, and that’s one of my favorite parts about doing what we do.”
The Four Star Business Model Most of the markets Four Star operates in are places they’ve been for 20 years or more. The business as a whole is better than 50% repeat business. “If they purchased the home through us, chances are they’re going to list with us when they sell,” Karen Rearden said. Four Star lists homes that sell for anywhere between $2,200 and $232,000. Agents can provide information and access to home finance options, but most buyers are cashing in a retirement account or other investments and have no need for financing. About 70% of Four Star home sales are in cash, and transactions tend to close in two weeks. The Four Star agents build relationships with Central Florida manufactured home community owners, operators, and residents. This helps when an agent is picking up a Four Star listing in a given community. They have details on the amenities, lifestyle, and culture of a community. And sometimes they’re asked to run a smaller sales operation from the community. “One of the biggest challenges is to educate the customer on the value of their home,” Karen Rearden said. “We have a saying: ‘Priced Right, Half Sold’ You have to be armed with good data and price the home correctly to sell quickly.” MHV
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Uniting to Support the Industry During a Crisis by Dr. Lesli Gooch
A
s an industry, manufactured housing has overcome a lot. Through outdated perceptions, misrepresentations in the media, and recessions, our industry has prevailed by doing what it does best — providing quality, affordable housing for people through innovation and efficiency. This has been an unprecedented time in our country and our industry’s ability to produce high-quality homes affordably puts manufactured housing in a unique position to help stabilize the housing market. The Manufactured Housing Institute is
dedicated to ensuring lawmakers and regulators recognize the value and quality of our homes, our industry, and our team members. As the government, private industry, and the American people grapple with rebounding from the impact of the COVID-19 outbreak, it is crucial to have a team in place dedicated to ensuring manufactured housing is represented in every effort to restore stability to the housing market and economy. When COVID-19 began impacting the economy, MHI was ready to take action on behalf of our members.
50 | 2020 INDUSTRY AWARDS EDITION • MHINSIDER.COM
Our strong relationships with the White House, HUD, members of Congress on both sides of the aisle and in both chambers, and housing and business coalitions, allowed us to ensure our industry’s concerns were heard as the national response was contemplated. MHI successfully advocated for the inclusion of residential housing operations, including leasing, property management, housing construction-related activities, and suppliers and contractors on the U.S. Department of Homeland Security’s Essential Critical Workforce
ADVOCAC Y Infrastructure list. By being included on this list, we ensured that our industry was affirmed as “essential”, meaning that we are critical to public health, public safety, economic security, or national security, and in most cases were able to operate safely. MHI provided
Although the COVID-19 outbreak dominated the world’s attention, HUD’s commitment to updates to the manufactured housing regulations continued uninterrupted. –Dr. Lesli Gooch
MHI worked with HUD as supply chain shortages threatened to disrupt plant operations. MHI successfully secured the first-ever industry-wide Alternative Construction letter to address window supply chain challenges. HUD’s action allowed manufacturers to continue the production of affordable housing and install windows that meet or exceed federal standards. By working quickly and changing the process so manufacturers did not have to request approval individually, HUD’s action saved manufacturers precious time and costs that would typically be incurred by each company. In addition to advocacy with policymakers, MHI recognized early the importance of keeping members informed of the quickly changing federal landscape, including the almost daily changes to federal programs and policies that might impact them. In addition to its regular newsletters and alerts, MHI launched a COVID-19 landing page to support not only our members but any company in the industry looking for resources to help guide their team members through the crisis. continued on page 53
vital resources to assist our state association partners, as well, to ensure that designation was recognized by state and local governments. MHI also worked with Congress and the administration to guide the federal government during the formation of stimulus packages intended to help American families and businesses through the crisis. During the development of each bill, MHI joined with a coalition of trade groups representing Main Street businesses to advocate for federal support to help businesses survive. MHI also worked with a coalition of housing groups to ensure that rental assistance and financial mitigation measures for property managers were included in relief packages. With millions of residents confined to their homes, MHI also made sure policymakers were aware that our members stepped up to answer the call to serve — providing impacted residents flexible rent or mortgage payment options, postponing scheduled rent increases, and providing additional resources and support including services like free lunches, grocery deliveries, and information about employment opportunities and filing for government benefits.
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The resource page included information about federal assistance pro grams for businesses and families, links to assistance applications and other resources, a stateby-state tracker of essential workforce designations, and much more. MHI also convened virtual webinars and roundtables so members could share information and best practices during the crisis. Although the COVID-19 outbreak dominated the world’s attention, HUD’s commitment to updates to the manufactured housing regulations continued uninterrupted. The Office of Manufactured Housing Programs continued operations through the outbreak, and MHI was there to ensure the industry’s priorities continued to gain momentum. MHI worked with its members to submit detailed comments to HUD in response to the most comprehensive proposed update to the HUD code in over a decade. The proposed revisions included the elimination of the requirement that manufacturers must follow the Alternative Construction (AC) approval process for add-on features, such as garages and carports. HUD’s proposal also addressed carbon monoxide provisions, stairways, fire safety considerations for attached garages, draft stops and venting systems, and transportation requirements that better align with Department of Transportation rules. MHI, along with members of its Technical Activities Committee, carefully reviewed each proposed change, and provided comments where appropriate by highlighting opportunities to further enhance the HUD code. When a major crisis occurs and rattles the economy, it is vital to have a strong trade association that can help drive the industry forward. MHI has remained committed to its mission, focusing on advocacy and communications to ensure our industry has the tools it needs to not only survive the immediate crisis, but thrive when it is over. It is absolutely crucial that our industry unite to ensure manufactured housing is well-positioned to restore stability and prosperity for American homebuyers. MHI has led and will continue to lead the charge for our industry through advocacy in Washington, D.C., and by providing useful resources and information to our members. Now more than ever, your support is vital. Join us in the fight to ensure our industry is poised to secure the future of affordable housing in America. MHV Dr. Lesli Gooch is the CEO of the Manufactured Housing Institute, the national trade organization representing all aspects of the factory-built
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Don’t Stop Marketing! You Must Be Pro-Active by Ken Corbin
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If you were in the manufactured housing industry between 1998 and 2009, you experienced our largest sales decline ever. During that time, new home shipments dropped from 375,000 to under 50,000, or a remarkable 87%. Over 10,000 retailers, manufacturers, lenders, and suppliers went out of business, were acquired, put a key in the door for the last time or filed for bankruptcy. It was our darkest time and one we never want to re-live. In recent weeks there has been some talk about an economic recession. When a recession happens, businesses become fearful of declining revenue and begin to cut back in various areas, including their ad spending.
Brief History Lesson In the ’08 recession, ad spending in the U.S. dropped by 13%. Broken out by medium, newspaper ad spending dropped the most at 27%, radio spending dropped by 22%, followed by magazines with a decline of 18%, out-of-home by 11%, television by 5% and online by 2%. From 2000 to 2008, McGraw-Hill research involved 600 companies and their marketing spending. They concluded that the firms that had maintained or increased their advertising during those turbulent times boasted an average sales growth of 275% over the next five years. But those companies who survived, yet cut their advertising, saw paltry sales growth over the next five years of just 19%.
Advertising During Slowdowns There are several reasons to advertise during a slowdown. The “noise level” of your competitors will decline when they cut back on their ad spending. It will allow you to re-position yourself or maintain your standing as the leader in your market. You can project to customers the image of stability during challenging times. The cost of advertising will likely drop. The lower rates create a “buyer’s market” for retailers and communities. This is one time I’ll recommend direct mail. When companies cut back on their ad spending, they lose its “share of mind” with consumers, with the potential of losing current and possibly future sales. An increase in “share of voice” typically leads to an increase in “share of market”. An increase in market share results in added profits.
Social Media So, where to start? It’s simple. Today it’s social media. Let’s be honest. You have more time for planning and outreach than ever, so use it to stay busy working on your campaign. During the past year, I’ve conducted countless seminars on marketing to our customers. There’s been a dramatic shift in our potential buyer’s social media preferences. Today, the biggies in our industry are, in order, the following: 1. Facebook 2. YouTube 3. Pinterest 4. TikTok
5. Reddit 6. Instagram 7. Snapchat
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TRENDS / INSIGHT
Update Your Website
Of course, everyone knows about Facebook; but is everyone at your location posting pictures and videos on their personal page? Does your company have a Facebook Business Page? Are you target marketing your prospects with paid ads? Perhaps you have one or two videos on YouTube… BUT, if you don’t have a YouTube Channel, you need to start one NOW. Successful retailers and communities are garnering tremendous amounts of views at no charge! Pinterest is targeting our #1 demographic, women. Beijing-based TikTok has become the fastest growing social media site in the United States. Instagram and Snapchat (and even Reddit, which you may not have heard of also are big players.
Display messaging on your homepage about any service changes. Your customers need to be up-to-date on your adjusted hours and what steps you’re taking to ensure the safety of your customers during this time. You also can add features for scheduling appointments, online tours of models and online deposits.
So, stay busy working on promoting your business to those potential homebuyers who are spending hours upon hours roaming the internet. Business will return to some form of normalcy. Be there, in the mind of your customers, when it happens. MHV Industry consultant Ken Corbin has worked with over 800 communities, retailers,
Create More Digital Content
associations, and man-
Since you may not see your customers in-person as much, it’s important to remind them you’re still around and ready to answer their questions. Create a variety of materials that will keep you at the top of their mind including blog posts, updated videos, newsletters, guest columns (just like this one), and webinars.
ufacturers. He’s also co-facilitator of the MH20 Group. For more information, e-mail: ken@callkencorbin.com. Reach Over 30,000 Manufactured Housing Professionals in Print and Online To Advertise, call:
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58 | 2020 INDUSTRY AWARDS EDITION • MHINSIDER.COM
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2020 INDUSTRY AWARDS EDITION • MHINSIDER.COM | 59
TRENDS / INSIGHT
HOW TO SUCCESSFULLY WORK FROM HOME by Mark Dollan
M
Many of us continue to work from home, or at least work from home much more often in 2020. Likewise, there are a great many of us who have spent years working in an office, or from the road. Working from home is a blessing in many ways. However, more than a couple of months in you may realize that days and hours blur, and there seems to be a lack of structure that can impact mood and productivity. Having spent about two-thirds of my career working from a home office, I thought I would share some of the tips and tricks I’ve discovered over the years to help avoid the subtle challenges of working from home.
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5-Part Plan to Stay Productive While Working from Home Create A Routine And Stick With It One of the biggest challenges with working from home that can lead to burnout is not protecting home life and personal time. And the best way to avoid that is to create a daily routine. For example, start and stop work at the same time every day. This helps create a feeling of separation between work and personal time. Obviously, there may be an occasional need to put in a few extra hours. But, when you live where you work it’s easy to slip into unhealthy patterns of working long hours too often or working random hours. The more you stick to the daily routine you create, the less you’ll feel work bleeding into your personal time.
TRENDS / INSIGHT
Get Dressed For Work This is one classic work-from-home trick that has research to back it up. Getting dressed for work, as if you were going to the office, has a profound psychological effect that works to your benefit. It’s all about how it makes you feel. First, by dressing for work and changing into casual attire after hours, it further separates your work and home life and reinforces that daily routine. It also can help you feel more focused, competent, and professional as you go about the day. And these positive feelings will increase your personal productivity and sense of accomplishment. Create A Dedicated Work Area In Your Home One of the most important tips I learned by working from home over the years is to separate my work area
from my living space as much as possible. Doing this helps you be able to “leave the office” after working hours as part of your daily routine. If you can, try to set up a dedicated workspace away from the common living areas of your home. Spaces like your living room or kitchen are areas that should remain sacred to your home life and personal time if possible. That way, when you’re making dinner or watching a movie, you won’t be looking at your desk and thinking about work. Likewise, if you can manage it, try to leave your desk completely at lunch and eat in another room. Everyone needs to take a break from work to rest and recharge. And physically separating yourself from your workspace during your personal time will help you mentally disconnect from work in a healthy way. » 2020 INDUSTRY AWARDS EDITION • MHINSIDER.COM | 61
TRENDS / INSIGHT
Make Exercise Part Of Your Routine By working from home, you’ll find that you’re logging fewer steps per day than you were at the office or from the road. However, exercise does more than help to keep our bodies healthy and trim. It also has mental benefits. Exercise has been proven effective by many studies to help relieve stress, anxiety, and depression. So, keep moving to keep your spirits up and make exercise part of your daily routine. Over Communicate Loneliness and isolation are two common feelings remote workers experience. And the best way to combat those feelings is through communication. Because we’re not all working in the same office space right now, it’s important we all make an extra effort to stay in touch and check-in with each other. This involves communicating with your teammates and manager more often than you normally might. By staying in closer contact with each
other while not in the office can help reduce miscommunications, and minimize the feelings of loneliness and isolation working from home can cause.
The Good News Here’s a bonus suggestion for you. Because work is still work, and home and personal time is sacred, keep in mind that you deserve a prolonged break. A getaway? Time for a project you’ve been putting off? Yes, those of us who work from home still need to take a vacation. So think about where and how to spend that time, and get it scheduled! MHV Mark Dollan is vice president of marketing for MHVillage and a six-time international award-winning marketer. He has been an official judge for the Davey Awards, W3 Awards, and Communicator Awards for more than a decade.
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62 | 2020 INDUSTRY AWARDS EDITION • MHINSIDER.COM
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PL ANNING / DEVELOPMENT
Photo Courtesy of Advantage Homes
Infrastructure Leak Detection Using ‘Water Balancing’ by Matt Laird
M
eter reading systems are continuously advancing, providing new benefits to park owners. Systems now compare the water metered at the inlet, to the entire park, then to the combined usage of all the meters on homes and other meters on common areas, sprinklers and swimming pools. The difference between main park meters and the sum of downstream meters is the water lost to leaks within the park’s infrastructure. This is known as “water balancing”. The easiest and cheapest way to get started is to compare the water consumption from your current bill from the utility to the total usage of all the downstream billing meters
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PL ANNING / DEVELOPMENT
over the same period. Your utility bill should show three necessary ingredients: current read date, previous read date and water usage over the billing period. The next step is to have your submeter reading system totalize usage of all your downstream billing meters over that same billing period.
suggest infrastructure leaks that may not even be there. And, the quality of certain water submeters varies greatly. Some can hold their accuracy for five or even 10 years. Others lose accuracy quickly or use pulse counters that are notoriously unreliable for delivering consistently
month in various parks around the country. Submetering systems can’t fix the infrastructure leaks but it can quantify and pinpoint them. A few well-placed zone meters will help the park owner to “zero in” on the biggest leaks and minimize repair costs.
Accuracy is Key The accuracy of the water balancing is dependent on two major factors. First, it is critical that the totalization period from the submeters match the billing period on your utility bill, otherwise the calculation will be inaccurate. Secondly, the assumption is that all meters involved are reasonably accurate. It is common for large utility meters that serve manufactured home communities to be inaccurate sometimes as by as much as 20% to 30%. But think twice before calling your local utility and requesting a calibration because the inaccuracy is usually in your favor. If the main meter is repaired your utility bill could increase considerably. If you suspect the utility meter may be inaccurate (as is often the case), then consider installing your own master meter, downstream of the utility meter to get an accurate water balancing calculation to allow you to assess the health of your water infrastructure. Similarly, if the submeters you are using are past their accuracy life, they will generally report lower than actual usage skewing the results of water balancing to
From both an economic and environmental responsibility point-of-view, water submetering is demanded by most mid-sized and large MHP ownership group. –Matt Laird
accurate data. Many sophisticated park ownership groups upgrade submeters regularly knowing that their accuracy is crucial. As long as all meters are at or near their rated accuracy, the water balancing exercise should yield no more than a 5% to10% difference between the park’s main meter bill and the addition of all the downstream submeters. Anything more than 10% difference suggests potentially material leaks in the internal piping of the park. As a side note the park owner is paying the utility for that water but not billing the tenants. Historically we have seen leaks cost owner’s from $5,000 to $10,000 per
Understand Your Utility Bill including Tiered Billing, Wastewater Many water utility customers review their bill each month see the cost of water = $x per thousand gallons. Those charges range from $3 - $15 per thousand gallons depending on the rates of the local utility. They are usually tiered with the amount of water used, penalizing higher usage. There is an incentive to manage and reduce peak consumption as it is the most expensive water. As well, many utilities bill for wastewater based on water usage. Wastewater rates usually are higher than the water rates, sometimes two to three times higher, so this can add significantly to the economics of submetering. As the community owner pays wastewater charges on any infrastructure leaks (leaks before the meter at the homes) and even irrigation and pool usage (if those are not separately utility metered), there is even greater incentive to understand water usage, water loss and accurately pass on the cost of water to those who are using it. »
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Submetering is ‘State of the Art’ not ‘The Way of the Future’ Advances in meter communication, data collection and data analytics have changed submetering at manufactured home parks from simply being a way to pass on costs to residents to a powerful tool in water and utility management. Mobile home park owners and residents alike now have the information to understand their water usage, fix
leaks, change behaviors, and better manage this precious resource. All of this is now available in a cost-effective and user-friendly platform, giving park owners capabilities previously only available to the largest municipal utilities. From both an economic and env ironmenta l responsibilit y point-of-view, water submetering is demanded by most mid-sized and large MHP ownership groups,
and the value of any property is impacted by the quality of the submetering system. MHV Matt Laird is CEO of Metron-Farnier and its subsidiaries Metron Sustainable Services and Transparent Technologies. He holds a B.S. in Aerospace Engineering and an M.B.A. in Finance, both from the University of Colorado and has 30 years of experience in water metering.
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See the Possibilities: Why Generating Interest in Manufactured Housing is About Showing, Not Telling by Sharmila Srivastav
A
s a high quality, lower-cost alternative to site-built homes, manufactured housing could genuinely be the future of housing affordability. The latest generation of factory-built homes can offer everything prospective homebuyers seek in the home they’ve been dreaming of. The big difference is that Fannie Mae research shows they’ll spend $1,000 less per month on a mortgage loan by choosing a manufactured home. We in the housing industry know this well, but unfortunately, homebuyers do not. Well, at least not yet. »
Photo Courtesy of Fannie Mae
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To Change The Market, We Need To Change The Story
When It Comes To Housing, Buyers Need To See The Possibilities
Right here in MHInsider, we’ve seen the resurgence of manufactured housing, with an almost 50% increase in new home shipments over the past five years. But Fannie Mae’s research shows that factory-built homes still have low awareness among younger homebuyers. In fact, less than half of the Millennial and Gen Z homebuying
We in the industry all understand that manufactured housing is not just affordable. Today’s factory-built homes are constructed of quality materials and to design specifications meeting or exceeding that of site-built homes. Once sited, newly constructed HUD Code manufactured homes often can be indistinguishable from traditional homes on the same street. Low profile foundations, high-pitched roofs, front porches, driveways, and garages or carports are just a few of the attractive design features that can be found in today’s manufactured homes. When it comes to selling more manufactured homes to these audiences, it’s important to show and not just tell. Fannie Mae research indicates that interest in factory-built homes increases by 31% when prospective buyers are shown pictures of the amenities and design choices available both inside and outside of today’s manufactured homes. In a recent Fannie Mae focus group, photos were shared of modern factory-built homes. We heard things like: “seeing them completely dispelled any notions I had about them,” and “this pre-fab — I’m down for”. Much more than price point, we believe images and videos have the power to positively change the perceptions that respondents previously held of factory-built homes. In fact, retailers who have started using virtual tours as a marketing tool have seen an increase in web traffic, with site visitors staying longer and looking more. If you’re not already showing your potential customers what’s possible with new manufactured homes, you might be missing out. Showing your audience something is more telling than words can ever be.
According to Fannie Mae research, future homebuyer interest in manufactured homes increased by 31% when shown pictures of modern MH models
audience is aware of manufactured housing as a suitable option for their budget without compromising their desired amenities and aesthetics. The awareness problem is compounded by the lingering stigma around manufactured homes, primarily their association with “trailers” and “mobile homes”. These beliefs are largely based on how many structures were built before the HUD Code, and unfortunately, the misperceptions haven’t gone away. In fact, many younger homebuyers consider manufactured housing to be lower quality than site-built options. And less than a fourth of Millennials and Gen Z homebuyers on the hunt are currently considering manufactured housing as an option. Younger homebuyers, especially first-time buyers, are the exact consumers for which many manufactured homes are built. If we want to move the market forward, we need to change their mindset. 70 | 2020 INDUSTRY AWARDS EDITION • MHINSIDER.COM
There’s More To Perception Than Meets The Eye While you can make manufactured homes more affordable and more beautiful, you also have to make them more accessible. With new loan products such as Fannie Mae’s MH Advantage®, manufactured homes are available with as little as 3% down on a land-home, 30-year mortgage. And by educating and supporting our mortgage lenders through strategic initiatives as part of the Duty to Serve plan, Fannie Mae is working to promote conventional mortgage financing for manufactured homes across the country. FHFA research has concluded that manufactured continued on page 72
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homes purchased using conventional mortgages tend to appreciate similarly to site-built homes. Generating awareness about manufactured housing and the loan options that make it accessible is essential for reaching more future homebuyers. According to MetroStudy, many Millennials are looking to buy a home in the next one to three years. So, if we want to show them what’s possible with manufactured housing, with mortgage rates at or near historic lows, the time is now.
to find it. And last but not least, they need to be shown that now, it’s more within their reach than ever before. When we show how beautiful and affordable manufactured homes can be, together, we can create home-buying opportunities for younger homebuyers that they never thought possible. MHV Sharmila Srivastav is the manager of Affordable Housing, Single-Family Business at Fannie Mae. Fannie Mae supports lenders, manufacturers, and other industry stakeholders to help create housing
The Research is Clear – Manufactured Homes Could be the Future of Housing Affordability Prospective homebuyers need to see to believe. They need to be shown, especially first-hand, that their perceptions of manufactured housing are no longer true. They need to be shown that the home features they’ve been dreaming of may be found where they least expected
Photo Courtesy of Fannie Mae
72 | 2020 INDUSTRY AWARDS EDITION • MHINSIDER.COM
opportunities for families across the country.
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Photo Courtesy of Fannie Mae
MH Advantage® FAQ with Fannie Mae MHInsider and Fannie Mae collaborated on some frequently asked questions with the MH Advantage® financing program and qualifying homes. From the program’s basics to how appraisal work is managed, Fannie Mae’s Starla Sand, a national evaluation analyst, provided the answers for our FAQ on MH Advantage financing.
»1. What is MH Advantage? MH Advantage is an innovative homeownership option that pairs affordable mortgage financing with specially designed manufactured housing. Think of MH Advantage qualifying homes as a cross between a traditional manufactured home
and a site-built home, designed to be indistinguishable from site-built houses from the exterior view (that is, designed with characteristics typical of site-built homes). You may have heard the term CrossModTM referring to these new modern manufactured homes, and while not all
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CrossMod homes are eligible for MH Advantage financing, many features of the two are consistent. Exterior features of manufactured homes that qualify for MH Advantage include higher pitch rooflines, larger eaves, and lower-prof ile foundations typically not found
LENDING
built neighborhoods. Standard MH financing, for manufactured homes that don’t qualify for MH Advantage, provides conventional mortgage financing for more traditional manufactured homes.
» 3. When appraising a property, how would an appraiser distinguish between a standard MH and MH Advantage?
on standard manufactured homes. In addition, the exteriors feature attractive, durable siding materials, roof dormers, covered porches, garages, and carports. The similarity with site-built does not end on the outside. The interior has high-quality finishes, including drywall, kitchen cabinets with fronts of solid wood or veneered wood, and various material options for counters, sinks, and tubs seen in new site-built homes.
»2. What are the differences between standard MH and MH Advantage financing? Fannie Mae purchases mortgages secured by manufactured housing titled as real estate using our standard MH or MH Advantage underwriting guidelines. MH Advantage financing offers terms similar to those traditionally offered for site-built homes, including down payments as low as 3%. MH Advantage homes are also built to blend into stick-
There are two ways for an appraiser to know that a home is MH Advantage-eligible. If an MH Advantage-qualifying home has already been built, the home will have an MH Advantage sticker near the HUD Data plates and HUD Certification Labels. In the case of a home that has been ordered but hasn’t been built yet, it will be the responsibility of the lender to let the appraiser know that the home will be financed by an MH Advantage mortgage. We have a number of resources available at www.fanniemae.com that lenders can share with appraisers to help them get an accurate valuation for the property. Regardless of the situation, it’s always a good idea to make a note in the appraisal that it’s for an MH Advantage home.
»4. What is the MH Advantage manufacturer sticker, and where can it be found? The MH Advantage sticker will be affixed to homes designed to meet MH Advantage eligibility criteria for easy identification by retailers, lenders, and appraisers. It is typically found inside the home next to the
HUD Data plate. The sticker indicates that the structure of the home has been constructed to meet the MH Advantage requirements and makes it so that an appraiser can simply verify the presence of the sticker rather than verifying that many of the individual requirements for the structure of the house have been met. It greatly simplifies the appraisal process. This sticker allows for the home to be financed by MH Advantage at both the retail point of sale and when it is sold to a new consumer. Many people don’t realize that the sticker applies to resale, too. Even if the original purchase is financed some other way, the MH Advantage sticker means that when a buyer is ready to sell, that home is still eligible for affordable MH Advantage financing.
» 5. What is the biggest challenge in appraising MH Advantage-eligible homes? MH Advantage is relatively new, so the industry is unfamiliar with the product, what makes it unique, and its appraisal requirements.
»6. What is being done to overcome that challenge? Fannie Mae is committed to educating and training appraisers and appraisal management companies on this new property type. • We have collaborated with McKissock, the nation’s largest appraiser Continuing Education (CE) provider, to create Appraising Today’s Manufactured Homes, a 7-hour CE course that
2020 INDUSTRY AWARDS EDITION • MHINSIDER.COM | 75
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explains Fannie Mae’s appraisal policies concerning MH with a deep dive and case studies on MH Advantage appraising. • Appraisers can visit our appraisers page at www.fanniemae.com/ appraisers. It includes newsletters on appraisal topics, online help and training, and other resources. Questions can be submitted using the “Contact Fannie Mae about Appraisal Topics” link on the Appraisers page, which allows appraisers to get answers to their specific questions. • We’ve also developed a landing page dedicated to MH appraisal at w w w.fanniemae.com / mhappraiser. It includes an MH Advantage Appraisal Training tutorial, MH Advantage Appraiser Requirements checklist, Q&As, and other relevant resources. • We offer regular in-person and online training sessions to lenders, AMCs, and appraisal groups. • We have a presence in industry events where we conduct presentations with Q&As.
»7. Since the MH Advantage qualifying home is a cross bet ween a trad itiona l manufactured home and a site-built home, what appraisal form should be used? And, are manufactured home sales an appraisal requirement? Since it is a manufactured home, appraisals must be completed using the 1004C form (manufactured home form). However, unlike a standard MH appraisal, two man-
ufactured home sales are not an appraisal requirement.
»8. How can an appraiser pick comparable sales when they appraise an MH Advantage eligible home? The known challenge is that there are few or no MH Advantage sales currently available in many locations for sales comparison purposes. Based on our Selling Guide requirements, appraisers must use MH Advantage Homes for the comparable sales when available. If MH Advantage sales are not available, an appraiser can supplement with the best and most appropriate sales, which may include site-built homes, standard manufactured homes, or modular homes. The goal is to ensure an accurate appraisal that reflects the market value, condition, and marketability of the property.
»9. What is not permitted to be used as comparable sales? Appraisers are not permitted to create comparable sales by combining a vacant land sale with the contract purchase price of a home. However, a created sale can be added as additional support for value – slotted in as additional sale in the sales comparison approach section or in the addendum.
MH Advantage sticker, as well as the driveway, sidewalks, and detached structures located on the site. For purchase transactions, the appraiser must analyze the sale contract and manufacturer’s/retailer’s invoice for new manufactured homes, and they must provide a summary in the appraisal report and complete the cost approach.
»11. What are the most common deficiencies with Manufactured Home Appraisals? There are some cases where appraisers do not properly assess the quality of the subject property. As a result, appraisers have either used older, lesser quality MH sales or superior quality site-built homes, both without proper adjustments. This can result in an appraisal that does not accurately reflect the market value of the property.
»12. How can appraisers overcome this?
» 10. Are there appraisal require-
The appraiser is responsible for determining if sufficient information exists to value the property. The appraiser should review plans, specs, and other documents to understand the exterior/interior features, characteristics, and quality of the home. It is good practice to visit manufacturer websites to view photos, videos, or virtual depictions or visit a dealer lot or model home.
ments that are specific to MH Advantage?
» 13. What are the MH appraiser
Yes, for MH Advantage appraisals, the appraisers are required to provide photos of the HUD Data plate, HUD Certification Label,
To qualify to complete this type of appraisal assignment, an appraiser must possess the knowledge and
qualifications?
LENDING
experience to understand the unique construction process of manufactured homes fully.
»14. Is MH Advantage found primarily in rural markets, or are there subdivisions with MH Advantage? We are seeing the MH Advantage qualifying homes getting some traction in rural markets and subdivisions. The same general appraisal requirements for new subdivisions apply for MH Advantage. The appraiser must select one comparable sale from the subject subdivision or project and one comparable sale from outside the subject subdivision or project. The third comparable
sale can be from inside or outside the subject subdivision or project, provided it is a good indicator of value for the subject property. Two of the sales must be verifiable from reliable data sources, other than the builder. MHV Starla Sand is a national review appraiser for the Risk, Eligibility, and Valuation team in the Loan Quality Center at Fannie Mae, and she leads the MH/MHA appraisal training courses for appraisers, lenders, and real estate professionals. Starla is also active in the Affordable Housing space, working to provide affordable housing for low- to
real estate industry. Starla has a bachelor’s degree in business from Wayne State College, Wayne, NE.
Information about the new MH Appraisal course: Fannie Mae has collaborated with McKissock, the nation’s largest appraiser CE provider, to create Appraising Today’s Manufactured Homes, a 7-hour CE course that explains Fannie Mae’s appraisal policies concerning MH with a deep dive and case studies on MH Advantage appraising.
moderate-income homebuyers. With more than 28 years of experience as an appraiser, national reviewer, realtor, and educator, she brings insightful knowledge to share with the
2020 INDUSTRY AWARDS EDITION • MHINSIDER.COM | 77
continued from page 80
THE ALLEN LEGAC Y
manuals, one on mobile home park operations and another for mobile home retailers. These helpful how-to guides were supplemented in part by Gary W. Pomeroy’s classic “How to Successfully Sell New & Resale Manufactured Homes” published in 1977 and 1980. The irony here is that this Golden West Homes-published case bound text was not only the first MH sales text published, but remains the sole resource 35 years later! Then followed an era during which freelance consultants shared their knowledge and experience relative to manufactured housing and communities.
Industry Consultants Who Authored Books First was Craig White, ACM, then of Aristek Corporation in Denver, and later with other firms. His “Management of MH Communities” lesson outlines material and articles published in “Manufactured Housing Dealer” magazine under the auspices of the now-defunct Hudson Institute,
which established early protocols for an industry chart of operating accounts for communities. Included were operating expense ratios, all of which materialized in 1992. Craig’s work was followed by Thomas P. Kerr, a California-based consultant. His 1980 “Guide to Mobilehome Parks & Condominiums” explored territory never before considered; condominiumizing of communities. White and Kerr’s published works set the stage for Nevada-based Stephen G. Pappas’ IREM-published “Managing Mobile Home Parks” monograph in 1990, in effect bringing this early period of manufactured housing and communities history to a close. Next month we’ll explore Part II, and the dozen-plus books published that describe manufactured housing and manufactured home communities between 1990 and today. Here’s an interesting, albeit unfortunate sidebar, relative to the six just-identified individuals who made and wrote MH and community history between 1955 and 1990. To
date, not one of them has been recommended for approval and induction into the RV/MH Heritage Foundation’s prestigious RV/MH Hall of Fame in Elkhart, Ind. That’s right, since the Hall of Fame opened its doors in 1972, more than 400 pioneering men and women of the manufactured housing industry and the land-lease community real estate asset class have received this singular personal honor. However, among them nary an individual who studied and described the unique business models many of us follow to this day. Perhaps there’s a “group solution” to this unintentional oversight a half-century ago. George Allen has owned and fee-managed land-lease communities since 1978. He’s a former MHI Industry Person of the Year and a member of the RV/MH Hall of Fame. He has been designated a Certified Property Manager-Emeritus and a Manufactured Housing Manager-Master. He’s also a senior consultant and staff writer with EducateMHC. Allen can be reached at (317) 346-7156 and gfa7156@aol.com.
Just because the world may never be the same, doesn’t mean we can’t make it better. Contact us at innovate@dcwestphal.com or 1-844664-6234 to find out how we can help future-proof the design of your next community Design for a better world.
Donald C. Westphal Associates
78 | 2020 INDUSTRY AWARDS EDITION • MHINSIDER.COM
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2020 INDUSTRY AWARDS EDITION • MHINSIDER.COM | 79
THE ALLEN LEGAC Y
Photo courtesy of Tharakan Consulting
Tracing Manufactured Housing & Community History Through the Authors Part I: 1955 – 1990 by George Allen, CPM Emeritus, MHM-Master
L
.C. Michelon, a professor at the University of Chicago in 1955, gave us “How to Build & Operate a Mobile Home Park”. In this Mobile Home Manufacturers Association-sanctioned text, the author describes how to develop raw or fallow ground into mobile home parks; separates MH & RV development; and emphasizes the importance of “planning, location & management” as the keys to “park” success. The next writer on the MH scene is Frederick H. Bair with his co-author Ernest Bartley, both from Florida. Their 150-page book “Mobile Home Parks & Comprehensive Community Planning” book of 1960 was made possible by a grant from the Mobile Home Research Foundation of Chicago. Bair and Bartley tell us in a statement: “In the five-year period 1954-58, starts were made on 538,000 privately-owned nonfarm dwelling units in multiple-family dwellings, and on 168,000 units in two-family dwellings. In the same period, 480,000 mobile home 80 | 2020 INDUSTRY AWARDS EDITION • MHINSIDER.COM
units were shipped to dealers. Thus, in the most recent five-year span for which figures are available, almost as many dwelling units were added in the form of mobile homes as in multiple-family dwellings, and almost three times as many mobile home units were added as units in two-family dwellings.” And they provide us a bit of trend information at the time. “…the movement toward 12 foot wide units may increase consumer acceptance in the same way the move to 10 foot wide units did a few years ago.” Five years later, F. H. Bair alone followed up with a new book, “Local Regulation of Mobile Home Parks, Travel Trailer Parks, & related-Facilities”. During the mid-1970s through early ’80s, the Mobile Home Manufacturers Association, and Mobile Home Dealers National Association, headquartered together in Chantilly, Va., supplied guidance through two accounting continued on page 78
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