One Big Auction! Notable Events, Individuals In Manufactured Housing

ONE BIG AUCTION!

Notable Events, Individuals in Manufactured Housing

by George Allen, CPM Emeritus, MHM-Master

RReal estate auctions, during year 2005, were thought to be the way to sell manufactured home communities.

On at least two occasions, in September and December of that year, nearly 100 of these unique income-producing communities located in more than 15 states were auctioned by Sheldon Good & Company. While there have been few auctions since then, the one on Dec. 16 makes for a whopper of a tale.

That day marked the first time in manufactured housing history a large number of communities were marketed, let alone auctioned en masse, at a metropolitan convention center in a major city — Chicago.

Here’s what occurred that day. First off, admission to the event was “by invitation” and would-be buyers were required to purchase a Bidders Information Packet for $100.

The day of the auction, 71 properties were described with statistics and color photographs in an 80-page, spiral bound book, also featuring general, financial, community, utility, and amenity i nformation for the properties.

The huge convention center ballroom featured two very large video screens on opposite ends of the stage in front. Besides rotating auctioneers, there were several spotters walking the aisles among the attendees and bidders.

When the action began, both screens simultaneously displayed identical information (photographs & financial information) about the property of the moment.

Using book and screen information, bidders calculated income capitalization value and decided whether to bid on that particular property. If so, they raised a numbered card high into the air, and were quickly joined by one of the spotters working the aisles, who escorted winning bidders to the front of the convention hall to verify legitimacy of the bid. It was a fascinating afternoon.

According to my notes from that day, all 71 properties received bids, totaling $211,547,782 at an approximate average cap rate of 10.6, or $21,222 per rental homesite. Turned out later, however, a dozen or so properties did not sell, as bids were non compliant with the auction’s terms of sale.

Today all these communities are owned by other portfolio investors, not necessarily by the successful auction bidders.

The Industry Travelers

This true tale begins more than 40 years ago, soon after I hung my shingle as a freelance management consultant specializing in mobile home park management. My first assignment came from a park owner headquartered in a western city. His assignment? Locate another park owner somewhere in the U.S.

At the time, I hadn’t published the first ALLEN REPORT, but knew a couple hundred owners/operators and the targeted individual was on my list. Only after I passed on the contact information and billed the client did I learn the latter was the former’s son-in-law who allegedly had skipped town with some of the property owner’s money.

Well, over the years, I got to know both individuals better, and was always grateful nothing serious had happened between them back then. »

Allen Legacy Million Dollar Bash for New Bride

“It was all a matter of feather boas, really. And silk capes, Venetian masks, Vera Wang and Valentino ball gowns, 7,000 roses from Ecuador – the color or rubies and pearls… and the scent of a single gardenia,” reads a snippet from the Feb. 5, 2003 edition of the Chicago Sun-Times.

So begins the description of Chicago real estate mogul Richard Klarchek, an owner of many manufactured home communities and the three-day extravaganza to celebrate his recent marriage to model Michelle Love, decades his junior.

More than 40 guests were hosted for three days at the Ritz Carlton Hotel in Palm Beach, Fla., all arriving via chartered private jets. Their first night? A “casual chic soiree” by the sea, complete with Jamaican band, limbo dancers, and a fire eater. Next night? At Donald Trump’s Mar-a-Lago partiers enjoyed a Venetian masquerade ball, amid 7,000 roses, with male guests wearing silk capes, and their ladies handmade masks that matched their gowns. And the final evening? Back to the Ritz for a gala “black and white ball”.

Know what? Nearly two decades later the Klarchek couple continues to be happily married and living in a suburb of Chicago. MHV

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.

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